Semi-Annual Report 2011
Announcement No.:【CMPD】2011-023
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 authenticity, accuracy and integrality of the whole contents.
The Semi-annual Financial Report of the Company is not audited.
Lin Shaobin - Legal Representative, Huang Peikun –Chief Financial Officer, and Xu Yixia –Manager of Accounting
Department hereby confirm that the Financial Report enclosed in the Semi-annual Report is true and complete.
This report has been prepared in Chinese and English version respectively. In the occurrence of differences due to
interpretations of both versions, the Chinese report shall prevail.
(II) Definitions
Unless specified 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.
8. Hong Kong Eureka: Eureka Investment Co., Ltd.
9. CMC: Shenzhen China Merchants Construction Co., Ltd.
(III) Content
Chapter 1. Important Notice, Definitions & Content…………………………….1
Chapter 2. Company Profile………………………………………………………2
Chapter 3. Changes in Share Capital and Share-holding Status………...………...4
Chapter 4. Info about Directors, Supervisors and Senior Executives…………….9
Chapter 5. Report of the Board of Directors……………………………………..11
Chapter 6. Significant Events…………………………………………………….21
Chapter 7. Financial Report………………………………………………………26
Chapter 8. Documents Available for Reference…………………………………. 25
1
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: Lin Shaobin
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 selected for Disclosing the Information of the Company: China Securities Journal, Securities Times,
Shanghai Securities News and Hong Kong Commercial Daily
Official Website for Publishing Annual Report authorised 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
Also 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 19th, 1990
2. Initial registration place: Shenzhen
3. Registration code for corporate business code: 440301503287841
4. Tax Registration No.: National Tax-Shen Zi 440300618845136
5. Code of Organization: 61884513-6
6. The certified public accountants hired by the Company:
Deloitte Touche Tohmatsu (Shanghai) CPA Ltd., 30/F, Bund Center, Yan An Road East, Shanghai
(II) Main financial data and benchmarking (Unit: RMB)
Ended of the End of last Increase/decrease
report period year (%)
Total assets 65,703,246,899 59,818,240,763 9.84%
Shareholders’ equity attributable
to the listed company’s shareholders 19,468,790,132 18,207,431,836 6.93%
Capital stocks 1,717,300,503 1,717,300,503 0.00%
Net assets per share
attributable to shareholders of the
listed company 11.34 10.60 6.93%
The same Increase/decrease in
This report
period of last this report period
period
year year-on-year (%)
Total operating revenue 8,091,485,144 6,981,153,925 15.90%
Operating profit 2,405,752,401 1,829,861,942 31.47%
2
Total profit 2,406,464,972 1,833,668,498 31.24%
Net profit attributable to
the listed company’s shareholders 1,468,587,411 1,050,179,281 39.84%
Net profit attributable to
the listed company’s shareholders after
deducting non- recurring
gains and losses 1,468,615,071 1,051,236,135 39.70%
Basic earnings per share 0.86 0.61 40.98%
Diluted earnings per share 0.86 0.61 40.98%
Return on equity (weighted) 7.77% 6.25% Up by 1.52
Weighted average of ROE after
deducting non- recurring gains and
losses 7.77% 6.25% Up by 1.52
Net cash flow arising from
-51.36%
operating activities -3,024,942,771 -1,998,549,301
Net cash flow per share arising
-51.72%
from operating activities -1.76 -1.16
Non-recurring gain and loss items:
Non-recurring gain and loss items Amount
Gains/losses from the disposal of non-current
assets -411,644
Government subsidies 1,619,000
Other non-operating income/expenditure -494,786
Impact on income tax -214,539
Influences on minority shareholders’gain and loss -525,691
Total -27,660
Differences between accounting standards at home and abroad (Unit: RMB)
Net profit attributable to the shareholders Net assets attributable to the
of the listed company shareholders of the listed company
Report period Corresponding period Report period End of last year
By International Accounting 2010
standards 20,808,619,361
1,468,587,411 1,050,179,281 19,547,261,065
By domestic Accounting
standards
1,468,587,411 1,050,179,281 19,468,790,132 18,207,431,836
Difference between domestic
and international standards 1,339,829,229 1,339,829,229
Of which: Adjustment of
goodwill 1,339,829,229 1,339,829,229
For the current year, the net profit attributable to the shareholders of listed company
is the same under both Chinese Accounting Standard and International Accounting
Standard. The main reason of the adjustment on the net asset attributable to
shareholders of listed company according to International Accounting Standard was
Notes
that according to the Chinese Accounting Standard and relative regulations, the
differences generated by consolidation of entities under same control shall be
adjusted into capital reserves, whereas the goodwill generated by consolidation shall
be recorded individually as assets according to the IAS.
3
Chapter 3. Changes in Share Capital and Share-holding Status
(I) Chart of share change
Before the change Increase/decrease this time (+,-) After the change
Share
transfer of
Amount Proportion bonus others subtotal Amount Proportion
accumulati
on fund
I. Shares with conditional
trading 891,594,208 51.92% 90,349 90,349 891,684,557 51.92%
1. State-owned
share-holding
2. State-owned legal
person’s share-holding 693,419,317 40.38% 693,419,317 40.38%
3. Other domestic shares
Including: Domestic
nonstate-
owned legal person’s
share-holding
Domestic natural person’s
share-holding
4. Foreign share-holding 197,709,440 11.51% 197,709,440 11.51%
Including: Foreign legal
person’s share-holding 197,709,440 11.51% 197,709,440 11.51%
Foreign natural person’s
share-holding
5. Senior executives’
share-holding 465,451 0.03% 90,349 90,349 555,800 0.03%
II. Shares with
unconditional 48.08%
trading 825,706,295 48.08% -90,349 -90,349 825,615,946
1. RMB common shares 684,265,720 39.84% -58,474 -58,474 684,207,246 39.84%
2. Domestically listed
foreign shares 141,440,575 8.24% -31,875 -31,875 141,408,700 8.24%
3. Overseas listed foreign
shares
4. Others
III. Total shares 1,717,300,503 100% 1,717,300,503 100%
Note: Shares held by senior executives with conditional trading increased by 90,349 shares and it was derived by the
company senior executives purchasing company stocks from secondary market within the report period.
4
II Status of shares held by the top ten shareholders (Unit: Share)
Total number of
74,854 shareholders (62,939 are A shareholders, 11,915 are B shareholders)
shareholders
Shareholding situation of top 10 shareholders
Proport
ion Quantity of
Category of the Quantity of shares with Shares pledged
Name of the shareholder of
shareholders shares held sales restrict ion or frozen
share- condition held
holding
China Merchants ShekouState-owned legal None
Industrial 40.38% 693,419,317 693,419,317
person
Zone Co., Ltd.
Foreign legal
Full Space Investment Ltd. 5.48% 94,144,050 94,144,050 None
person
China Merchants Securities Hong Foreign legal
Kong Ltd. person 2.91% 50,018,471 49,242,245 None
China Merchants Zhangzhou State-owned legal
2.21% 37,878,788 None
Development Zone Co., Ltd person
Domestic non-
Penghua Value Advantage
state-owned legal 1.63% 28,000,000 Unknown
Stock-linked Security Investment Fund
person
FOXTROT INTERNATIONAL Foreign legal
1.61% 27,720,000 27,720,000 None
LIMITED person
ORIENTURE INVESTMENT Foreign legal
1.55% 26,603,145 26,603,145 None
LTD person
Domestic non-
National Social Insurance Fund 102
state-owned legal 1.36% 23,436,423 Unknown
Combination
person
CNCA A/C COMPAGNIE Unknown
Foreign legal
FINANCIERE EDMOND DE 1.19% 20,446,608
person
ROTHSCHILD
Domestic non- Unknown
China International Advantaged
state-owned legal 1.11% 19,122,596
Security Investment Fund
person
Top 10 holders of unconditional shares
Amount of
Name of the shareholder unconditional Type of shares
shares held
China Merchants Zhangzhou Development Zone Co., Ltd. 37,878,788 A shares
Penghua Value Advantage Stock-linked Security Investment Fund 28,000,000 A shares
National Social Insurance Fund 102 Combination 23,436,423 A shares
CNCA A/C COMPAGNIE FINANCIERE EDMOND DE ROTHSCHILD 20,446,608 B shares
China International Advantaged Security Investment Fund 19,122,596 A shares
Nuo’an Value Increase Stock Security Investment Fund 18,635,299 A shares
Full Goal Selected Mixed Open-ended Security Investment Fund 17,099,671 A shares
Penghua Power Increase Mixed Security Investment Fund 15,549,801 A shares
China International Internal Demand Stock-Linked Security Investment Fund 15,086,161 A shares
China Life Insurance Company Co., Ltd.-traditional-ordinary insurance products
14,159,919 A shares
-005L-CT001 Shen
Explanation on associated 1. Among the shares held by China Merchants Securities Hong Kong Ltd.,
relationship or unanimous 49,242,245 shares were purchased-in entrusted by Top Chief Co., Ltd.
action among the above
2. Top Chief Co., Ltd., Full Space Investment Ltd., FOXTROT INTERNATIONAL LIMITED and
shareholders ORIENTURE INVESTMENT LTD are wholly-owned subsidiaries of China Merchants Shekou
5
Industrial Zone Co., Ltd. China Merchants Zhangzhou Development Zone Co., Ltd is wholly-owned
subsidiaries of China Merchants Group.
3. Penghua Value Advantaged Stock-linked Security Investment Fund and Penghua Power Mixed
Growth Security Investment Fund belong to the same fund management company.
4. China International Advantaged Security Investment Fund and China International Domestic
Demand Drive Stock-Linked Security Investment Fund belong to the same fund management
company.
6
III Amount of shares held by shareholders with sales restrictions and reasons of such restrictions
Sales Sales
Amount of
restricti restric
shares with Amount of
on tion Sales Date of sales
sales shares with sales
Name of the shareholder release increa restriction restriction
restriction at restriction at the
d in sed in reason released
the beginning period end
this this
period
period period
China Merchants
Shekou
Industrial Zone Co., Ltd. 693,419,317 693,419,317 Promised sales
Full Space Investment Sales restriction
Ltd. 94,144,050 94,144,050 Restriction release date is
China Merchants Release September 24,
Securities Hong Kong Order not 2010, but sales
Ltd. 49,242,245 49,242,245 yet been restriction
FOXTROT placed release
INTERNATIONAL applications has
LIMITED 27,720,000 27,720,000 not been filed
ORIENTURE
INVESTMENT LIMITED 26,603,145 26,603,145
Senior
executives
share-holdi
Lin Shaobin 106,627 7,500 114,127 ng
Senior
Determined
executives
according to the
share-holdi
related
He Jianya 72,876 6,525 79,401 ng
provisions on
Senior
Senior
executives
executives
share-holdi
share-holding
Yang Zhiguang 57,971 5,250 63,221 ng
Senior
executives
share-holdi
Huang Peikun 83,025 24,375 107,400 ng
Leaving
director
share-holdi
Yang Baiqian 67,425 22,475 89,900 ng
Senior
executives
share-holdi
Wang Li 22,640 6,300 28,940 ng
Senior
executives
share-holdi
Zhu Wenkai 7,500 7,500 ng
Senior
executives
share-holdi
Meng Cai 33,512 1,274 34,786 ng
Senior
executives
share-holdi
Zhang Lin 1,650 1,650 ng
7
Senior
executives
share-holdi
Wang Zhengde 7,500 7,500 ng
Directors
secratery
share-holdi
Liu Ning 10,125 10,125 ng
Supervisor
share-holdi
Liu Ye 11,250 11,250 ng
Total 891,594,208 90,349 891,684,557
①Shares with sales restrictions include: 693,419,317 A shares directly held and 197,709,440 B shares indirectly held
by Shekou Industrial Zone, 330,650 A shares and 225,150 B shares held by senior executives.
② In 2007, because of increasing holding non public share offer of the Company, Shekou Industrial Zone promised
not to sell shares of the Company held (including both directly and indirectly) by it before September 24th, 2010. Up till
the date of this report, the Company has not received the notice of Shekou Industrial Zone requiring releasing sales
restrictions.
Chapter 4. Info 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
Post Share Shares held at the Shares increased
Shares held at the Reason for
Name category period beginning holding in this
period end (share) change
(share) period (share)
Secondary
market
Lin A share 41,670 10,000 51,670 increased
Chairman
Shaobin holding
B share 100,500 100,500
Secondary
market
Managing
A share 97,170 8,700 105,870 increased
He Jianya director holding
Secondary
market
Yang Vice General A share 44,295 7,000 51,295 increased
Zhiguang Manager holding
B share 33,000 33,000
Secondary
market
Huang
B share 130,700 12,500 143,200 increased
Peikun Managing CFO holding
Secondary
market
Vice General
A share 30,187 8,400 38,587 increased
Wang Li Manager holding
Secondary
market
Zhu Vice General
A share 10,000 10,000 increased
Wenkai Manager holding
Secondary
market
Vice General
A share 1,700 increased
Meng Cai Manager 44,682 46,382 holding
Secondary
market
Vice General
A share 2,200 increased
Zhang Lin Manager 2,200 holding
8
Secondary
market
Wang
B share 10,000 increased
Zhengde Chief economist 10,000 holding
Secretary of the
Liu Ning Board of B share
Directors 13,500 13,500
Employee
Liu Ye A share
supervisor 15,000 15,000
Total 550,704 70,500 621,204
II New appointment or dismissal of directors, supervisors and senior executives in the report period
According to the work arrangement of China Merchants Group, Sun Chengming resigned from Chairman of the
Company, and Lin Shaobin resigned from the General Manager of the Company. On February 15th, 2011, the Company
held the 19th conference of the sixth board of directors, electing Lin Shaobin as Chairman of the Company, and electing
Yang Tianping as Vice Chairman of the Company. The Board of Directors employed He Jianya as General Manager of
the Company.
According to the work arrangement of China Merchants Group, Yang Baiqian, Hua Li and Chen Gang resigned
their posts as Director of the 6th Board of Directors, Fu Gangfeng, Ding Yong resigned their posts as Supervisor of the
6th Board of Supervisors. On April 12, 2011, after approval of 2010 annual shareholders’ meeting of the Company, the
Company employed Fu Gangfeng, He Jianya, Wang Hong and Hu Yong as Director of the 6th Board of Directors, and
employed Liu Zhimin and Hua Li as Supervisor of the 6th Board of Supervisors. On the same day, the 12th conference of
the 6th Board of Supervisors of the Company elected Wu Zhenqin as Chairman of the Board of Supervisors of the
Company.
Chapter 5 Report of the Board of Directors
Ⅰ Managerial discussion and analysis
1. Analysis on the market situation
Half a year has passed in 2011, government housing control has been upgraded continuously, and policy additive
effect has gradually appeared. Looking from investment, investment on development of real estate in China from
January to June reaches to RMB 2630 billion Yuan, increasing 32.9% compared to the same period of the previous year;
newly constructed area amounts to 0.994 billion square meters, increasing 23.6% over the same period of the previous
year; the increase speed still keeps high level, but diminishes greatly over the same period of the previous year. Price of
commercial housing is stable, and increase speed has slowed down. Looking from cities, housing price in first-tier cities
has somewhat loosened and housing price in second-tier and third-tier cities present both rise and drop. Supply volume
and trading volume of the land market withered gradually, and current average rate and premium rate level decrease.
9
Under the current circumstances, real estate enterprises are facing big pressure, financing environment is
increasingly intense, and many enterprises slow down their steps of expansion. Over stock of inventory, tight cash flow,
rise of debt ratio become the common phenomena for real estate enterprises. At the same time, some active changes
appear in the market. The government vigorously promotes construction of guarantee housing, accelerates
implementation of policies such as adjustment of residence supply structure, purchase limitation and loan limitation etc.,
restraining irrational investment demand; real estate enterprises actively seek changes, innovate business mode, and seek
the mode of changing traditional increase. This may become the catalyst promoting healthy growth of the Chinese real
estate industry. The Company believes that adjustment is a compulsory stage of market development, and only
enterprises that have experienced sharp grinding can be more mature.
2. Company operation and management condition
It is the opening year for the new ten-year journey of China Merchants Group, under the guidance of the Group
vigorously developing property business objective, China Merchants Property silently has changes under the drive of
internal and external force of seeking breakthrough for itself and high expectation of the market.
Accelerate project development progress and enhancing turnover rate is one of the core management objectives of
the Company. In the first half year, the Company adopted a series of pointed strategies and measures for this: improve
project development template according to industry advanced standard and implement comprehensively; clarify rights
and responsibilities of city companies, release authority to city companies, strengthen utilization of standardized
products in project development, greatly compress project early stage positioning design period, intensify strategic
cooperation and group procurement, adjust assessment and distribution mechanism, conduct assessment with project
operation efficiency as the key index and closely link with reward and punishment distribution. Along with
implementation of these measures, in the first half year, lagging behind of project progress in the first half year was
reduced greatly, and enhancement of development progress of projects under construction and newly constructed
projects was obvious.
Exploring new business mode and vigorously promoting resource integration is another vital aspect for the
Company to seek changes. During the report period, the Company split the investment property division in Shenzhen
China Merchants Real Estate Co., Ltd. and established Shenzhen China Merchants Commercial Property Investment Co.,
Ltd., stepping key step for integrating commercial property resources under the flag, opening up nation-wide
commercial property business and promoting rapid development of the Company.
Under the background of continuous macro control and tightening borrowing environment, cash flow becomes an
important standard for measuring the development strength of real estate enterprises. During the report period, the
Company complied with the market changes, intensified research on financing channels and financial innovation
products, strengthened good business relationship with financial institution cooperative partners, and actively explore
10
and tried diversified financial innovation mode; under the support of the big shareholder, it raised fund through multiple
channels, reasonably planed currency type period structure of interest-bearing debt, controlled debt comprehensive cost,
and guaranteed capital demand for Company operation and development.
The Company paid close attention to market changes, utilized price strategy and sales promotion strategy flexibly,
and adjusted sales promotion extent according to the market conditions at all time. During the report period, the
Company had 24 buildings on sale in 12 cities in China, realized subscription area of 607,300 square meters and
subscription amount of RMB 12.047 billion. After CM Guanyuan, Shenzhen King’s Ville and Beijing 1872 project etc.
were put into the market in June, they were pursued by the market, but due to slowing down of agreement signing speed,
in the first half year, the Company realized sales area of 415,800 square meters and agreement signing sales amount of
RMB 6.835 billion, increasing 45% and 62% respectively compared to the same period of the previous year.
The Company continued to insist on active and stable expansion strategy. In the first half year, the Company got
five projects in Foshan, Wuhan and Zhenjiang etc., expanding project resource 1.03 million square meters, among which
area of entitlement was 840,000 square meters. While sharing opportunities brought by market growth in first-line and
second-line cities, the Company intensified expansion to third-line and fourth-line cities. Now it has entered 17 cities,
and the total project resource is kept over 10 million square meters. Along with the enhancement of overall development
ability, during the Company report period, there were 25 newly constructed projects, 2.07 million square meters of
newly constructed area, at the end of the report period, there were 38 projects under construction and 4.51 million square
meters of area under construction.
3. Forecast on the operation environment in the second half year by the Company an operation thinking of
the Company.
Real estate control has become a normal state, and control will inevitably be intensified. Along with large increase
of market supply volume in the second half year, market competition will be very fierce. The Company will sell rapidly
and realize capital withdrawal rapidly through working hard on sales of end buildings and winding up buildings, sales of
projects on sale, building opening of new projects, agreement signing rate and received payments etc.
In terms of new project development, besides deeply ploughing the cities that it has entered, the Company will
intensify tracking on new projects in second-line and third-line cities, try to grasp the opportunity brought by promoting
urbanization construction and constructing high-speed railway network in the 12th “five-year plan” of the state, bring the
advantage of industrial coordinated development of China Merchants Group, and actively participate in the construction
of guarantee housing in related cities.
As one of the key companies in the Normative Internal Control Pioneers list recognized Shenzhen Securities Regulatory
Bureau, the Company will comprehensively promote and finish establishment of risk prevention and control system,
protect rapid development of the Company, continue to enhance the client service ability, deepen “Maple Leaves Act”
nationwide, further enhance client satisfaction degree, with green technology research and development center as the
11
platform, accelerate promotion and application of green technology, finish construction of ERP an knowledge
management system, further refinement of CRM system, achieving a new level of informative and efficient
management.
ⅡMain operation in the report period
1. Main business
Unit: RMB’0,000
Increase or Increase or Increase or
decrease decrease decrease
Classified year- year- year-
Operation Gross profit
according to Operation cost on-year in on-year in on-year in
income rate
industries operation operation gross profit
ncome（%） cost（%） rate（%）
Development
sales for real
estate 712,212 353,060 50.43% 16.75% 1.11% 7.67
Rental property
operation 29,458 14,820 49.69% 17.11% 11.08% 2.73
Property agency
service 4,182 3,483 16.71% -16.97% -6.19% -9.57
Power &
water supply
for parks
and communities 28,341 20,637 27.18% -11.78% -12.82% 0.86
Property
management 24,983 21,414 14.29% 25.51% 29.41% -2.58
Engineering
construction
income 9,490 9,396 1.00% 77.88% 78.12% -0.22
① Business division of real estate development & sales:
In the reporting period, sales revenue increased 16.5% over the same period of last year, and the total gross
profit rate also improved due to newly incurred revenue held relatively high profitability.
② Business division of rental property operation:
In the report period, along with the rise of occupancy rate of properties such as Garden City Digital Building
and 2nd phase of Technology Building, operation income increase on year-on-year basis. Because growth of
operational cost in this period is slightly lower than the growth of operational income, gross profit rate in this period
saw minor increase.
③ Business division of power & water supply
Because water supply business was established in June 2010, during the reporting period, only power supply
business was accounted. The total power sales decreased slightly comparing to the same period of last year, owing to
the negative influence of restructuring of the industrial zone.
④ Property management
In the reporting period, income increased significantly as a result of newly added properties under management,
however the raise of labor cost compressed the gross profit margin.
12
⑤ Engineering construction income
In the report period, engineering construction income increased greatly because started projects of this period
increased.
2. Main business classified according to area
Unit: RMB 0,000 Yuan
Area Operation income Increase or decrease year-on-year
Area around Pearl River Delta 413,381 3.61%
Area around Yangtze River Delta 90,389 -52.62%
Area around Bohai Sea 221,372 249.77%
Other areas 84,007 86.36%
Total 809,149 15.90%
In the report period, revenue of area around Bohai Sea increased greatly compared to the same period of the
previous year due to Beijing Park 1872 etc., while operation income of Yangtze River Delta area decreased greatly for
the realized sales revenue is smaller than the same period of the previous year.
3. Settlement for main real estate projects
Amount for
Area for settlement
Project settlement
(square meter)
(RMB 0,000)
Beijing Park1872 Phase 1 and 2 53,965 133,289
Shenzhen Buena Vista Phase 4 14,327 105,393
Zhuhai China Merchants Garden City Phase 1 76,314 81,593
Tianjin Star City 48,135 62,032
Chongqing Jiangwan City 78,145 61,047
Shenzhen Estate at waterside 30,808 39,171
Nanjing Yi Yun Xi Gu 14,325 38,030
Foshan Evian Up City 40,695 36,980
Shenzhen Mount Orchid Riverlet Phase 2 7,191 31,741
Shenzhen Mount Orchid Riverlet Phase 3 5,990 20,825
Zhangzhou China Merchants Garden City 22,040 14,052
Shanghai China Merchants Bay Garden 6,855 15,545
Shenzhen Garden City Phase 5 3,589 10,235
4. Financial condition
Unit: RMB 0,000
December 31, Change
Items June 30, 2011 2010 scope Reason for the difference
Decreased due to NDF contract
Tradable financial
264 85 211% completion of this period and market
assets
price fluctuation
Advance payment 11,621 560 1975% Advance engineering payment increased
Other current Increase of real estate sales income
155,409 98,054 58%
assets caused increase of pre-paid tax
Short-term loan 243,306 117,213 108% Expansion of business scale
Decreased due to NDF contract
Transactional
722 2,082 -65% completion of this period and market
financial debt
price fluctuation
Bills payable - 27,562 -100% Bill due decreased
Accrued Employee 10,791 20,723 -48% Decresased for paying employee salary
13
salary payable
Increase of real estate sales income
Tax payable 89,205 61,479 45%
caused increase of tax payable
Dividends payable 37,553 12,421 202% Dividend distribution increased
Non current deby Long-term loan due in one year
245,836 185,642 32%
due in one year 一 increased
January – June January – June
2011 2010
Sales tax and Increase of real estate sales income
128,070 86,293 48%
additionals caused increase of tax
Sales expense 15,995 11,215 43% Business scale expanded
Management
14,309 10,118 41% Business scale expanded
expense
Financial expense -7,228 305 -2470% Exchange rate gain increased
Fair value flexible Decreased due to NDF market price
loss and profit
1,588 2,992 -47%
fluctuation
Investment income of associated
Investment gain 5,126 2,545 101%
company increased
Income tax
58,673 43,474 35% Profit total amount increased
expense
III. Investment
(I) Progress and income of the project invested with raised funds
In the report period, Company is using the funds raised through the 2007 non-public share offering and the 2008 public
share offering. 99.6% of the non-public share offering are current in use. And 96.7% of public share offering is also in
use.
1. Progress of the project invested with funds raised through the 2007 non-public share offering,
and application of the proceeds:
Unit: RMB’0,000
Total raised proceeds used
in this period 1,919
Total proceeds raised 229,217
Total raised proceeds
accumulatively used 228,331
Whether Whether
Amount Whether Amount Total profit
comply to comply to
Commitment planned to change actually accumulatively
planned
input projects input realized planned
income
progress
Purchase 5%
equities of No
Shenzhen China 40,000 40,000 22,270 Yes Yes
Merchants Property Co.,
Ltd.
No
Purchase office building
of New 88,000 88,000 8,852 Yes Note 1
Times Square
Purchase land No
use right of
Meilun Apartment 25,000 24,114 -705 Note 2 Note 2
and develop
for construction
Haiyue Huating 33,000 No 33,000 18,332 Yes Yes
Nanjing Xianlin (Evian No
43,217
Valley) 43,217 21,685 Yes Yes
Total 229,217 228,331 70,434
Note 1: Income of RMB 12.79 million was realized by office building of New Times
Notes on actual progress Square in this period. Because the actual depreciation life of the Company is shorter than the depreciation
and projected income life used in the original listed company statement, annual depreciation amount of the building is RMB 7.82
14
million Yuan higher than the annual depreciation amount related to the calculated profit in the original listed
company statement. Tax rate used when calculating profit in the listed company statement is 15%, income tax
rate applicable to the Company in 2011 already increased to 24%, if calculating according to depreciation and tax
rate caliber in the listed company statement, in the first half of 2011, profit of New Times Square was RMB
17.63 million, reaching the expected profit level.
Note 2: Up till the end of the report period, Meilun Apartment had been completed and
put into use, because part of the engineering fund was not paid, raised proceeds was not
used up. However, because Meilun Apartment is in the early stage of business at present,
occupancy rate is low, fixed expenses are large, so it is not profiting yet.
Reasons on procedure Not change
of change
Allocation of unused
The allocation of unused funds will stick to the original planning.
funds
2. Progress of the project invested with funds raised through the 2008 public share offering, and application of the
proceeds: (unit: RMB 0,000 Yuan)
Total raised proceeds
used 19,293
Total proceeds raised 577,722 in this period
Total raised proceeds 558,896
accumulatively used
Whethe Total
Whether Whether
r Amount Amount profit
comply to comply to
Commitment chang planned to actually accumulativ
planned planned
e input input ely
progress income
projects realized
Garden City Syber Port No 22,722 22,722 1,397 Yes Note 2
Garden City Phase 5 No 22,000 22,000 20,687 Yes Yes
Technology Building Phase 2 No Yes
16,000 16,000 -95 Note 3
China Merchants Square No 44,000 44,000 - Yes Note 1
Woods Apartment No 34,000 34,000 - Yes Note 1
Kings Ville No 130,000 115,936 - Note 10 Note 1
CM Guanyuan No 40,000 40,000 - Yes Note 1
CM Lanyuan No 70,000 70,000 30,196 Yes Note 4
Tianjin Star City No 60,000 60,000 26,702 Yes Note 5
CM Jiangwan City No 40,000 40,000 23,993 Yes Note 6
Evian Town phase 3 No 26,000 21,238 7,610 Note 10 Note 7
CM Nanqiao Yayuan No 35,000 35,000 18,409 Yes Note 8
CM Yong Hua Yuan No 38,000 38,000 4,139 Yes Note 9
Total 577,722 558,896 133,038
Note 1: The project didn’t realize profit.
Note 2: The project was on rental in November 2009, it was making profit in
2010, and it is estimated that the internal yield can reach the expected profit.
Note 3: It was completed and put into use in March 2010, it began to profit in
2011, and it is estimated that internal yield can reach the expected rate.
Note 4: CM Lanyuan accumulatively carried over 99% by the end of the report
period, and made a net profit of RMB301.96 million Yuan, slightly lower than
the expected profit. If influence of income tax rate difference is eliminated, it can
reach the expected profit.
Notes on actual progress Note 5: Tianjin Star City accumulatively carried over 29% by the end of the
and projected income report period, realizing net profit of RMB 267.02 million Yuan, and it is
estimated that expected profit can be reached when it carries over all.
Note 6: CM Jiangwan City accumulatively carried over 37% by the end of the
report period, realizing net profit of RMB 239.93 million Yuan, and it is
estimated that expected profit could be reached when it carries over all.
Note 7: accumulative carried over sales area proportion of Evian Town Phase 3
is 100% by the end of the report period, realizing net profit of RMB 76.1 million
Yuan. Evian Town phase 3 was opened for sale in August 2008, because 2008
annual economic situation is contrary to expected, actual profit of the project did
15
not reach the expected.
Note 8: CM Nanqiao Yayuan accumulatively carried over 100% by the end of
the report period, realizing net profit of RMB 184.09 million Yuan, basically
reaching the expected profit.
Note 9: CM Yonghuayuan accumulatively carried over 41% by the end of the
report period, realizing net profit of RMB 41.39 million Yuan, and it is estimated
that expected benefit can be reached when it carries over all.
Note 10: Because up-to-position time of the raised proceeds is later than
expected, use progress of the raised proceeds of such projects is later than
expected.
Reasons on procedure of change No Change
Allocation of unused funds The allocation of unused funds will stick to the original planning.
(II)Actual progress and benefit of the significant projects invested with non-raised proceeds (unit: RMB 0,000 Yuan)
Investment
amount
Investment
increased Benefit received in
Project amount in Progress
compared to this period
this period
the previous
year
Zhenjiang Dadong Project 305,854 - Construction started
Nanjing G54 Project 187,000 - Construction started
Wuhan P022 Project 41,535 - Construction started
Realized gross profit
Beijing Park1872 29,622 42% Completed and in partnership
ofRMB 435.54 million
Shenzhen Xicheng phase 4 to Phase 4 completed and in partnership, Realized gross profit
5
24,130 13% phase 5 construction started ofRMB 439.90 million
Shanghai Sheshan Longyuan
Project
21,177 11% Construction started
Chongqing Tanzishi Project 18,766 8% Early stage planning
Shenzhen Chuanqian Square 17,758 - Construction started
Phase 2 and 3 completed and in
Realized gross profit of
Guangzhou Jinshan Valley 17,326 16% partnership, phase 4 foundation in
RMB 2.22 million
construction
Shenzhen CM Guoling Garden 15,574 31% Main body in construction
Shenzhen Yong Jing Wan 15,015 14% Structure roof sealed
Realized gross profit
Foshan Evian Up City 11,631 6% Part completed and in partnership
of RMB 7.81 million
Nanjing G67 Project 11,517 8% Main body in construction
Beijing Xicheng Homestead Phase 1 completed and in partnership, Realized gross profit
and Longyuan Project
10,933 7% phase 2 in main body construction of RMB 11.92 million
Phase 1, 2 and 3 completed and in
Realized gross profit of
Suzhou Xiaoshi City 10,143 8% partnershio, phase 4 in main body
RMB 26,12 million
construction
Zhuhai CM Garden City phase Realized gross profit
1
9,339 17% Completed and in partnership
of RMB 292.02 million
Zhuhai CM Garden City phase
2 to 3
9,322 15% Main body in construction
Shenzhen Lanxi Valley phase Realized gross profit
3
8,463 41% Completed and in partnership
of RMB 71.30 million
Tianjin Yong Hua Fu Project 7,840 10% Main body in construction
Foshan Evian Tianhui 7,293 6% Foundation in construction
Shenzhen Jingshan phase 9 6,341 752% Foundation in construction
Shanghai CM Bay Garden 6,099 8% Main body in construction
Foshan Evian Xicheng 5,799 8% Main body in construction
Chongqing CM Garden City 5,449 4% Foundation in construction
Chengdu CM Yong Hua Fu
(former Chengdu Chenghua
District Zhaojue Temple South
5,392 3% Construction started
Road Project)
Xiamen Jimei P08 Project 5,385 5% Foundation in construction
Zhangzhou Cadaques Project 5,345 8% Foundation in construction
16
Shanghai Haide Garden phase
2 and 4
4,765 6% Construction started
Beijing Conrad Hotel 4,500 9% Main body in construction
Xiamen Jimei P01 project 4,195 4% Foundation in construction
Chengdu East City
International Business Square
4,076 17% Foundation in construction
Shenzhen Seaworld Hotel 3,868 567% Construction started
Realized gross profit of
Zhangzhou CM Garden City 2,048 14% Phase 1 completed and in partnership
RMB 40.76 million
(III) Companies newly invested
1. In January 2011, subsidiary company of the Company China Merchants Property (Nanjing) Co., Ltd. invested to
establish Nanjing China Merchants Ruisheng Real Estate Co., Ltd., registered capital of the company was RMB 30
million, the Company indirectly holds 100% shares of it, and includes it in the consolidated financial statement.
2. In February 2011, the Company invested to establish China Merchants Property (Wuhan) Co., Ltd., registered
capital of the company was RMB 30 million, the Company holds 100% shares of it, and includes it in the consolidated
financial statement.
3. In March 2011, the Company invested to establish China Merchants Property (Zhenjiang) Co., Ltd., registered
capital of the company was RMB 50 million, the Company holds 100% shares if it, and includes it in the consolidated
financial statement.
4. In May 2011, the Company invested to establish Zhenjiang Yingsheng Real Estate Development Co., Ltd.,
registered capital of the Company was U.S. dollar 93 million, the Company directly and indirectly holds 100% shares
of it, and includes it in the consolidated financial statement.
5. In June 2011, the Company invested to establish Shenzhen China Merchants Commercial Property Investment
Co., Ltd., registered capital of the Company was RMB 200 million, the Company held 100% shares of it, and includes
it in the consolidated financial statement.
IV. Modification plan for the operation plan for the later half year
N/A
Chapter 6 Significant Events
Ⅰ. Corprate governance condition
During the report period, the company insisted on complying with the requirements of securities laws and
regulations such as Company Law, Securities Law and Code of Corporate Governance for Listed Companies，
continuously perfected the Company legal person governance structure, standardized Company operation, optimize
internal control system, so as to continuously enhance the Company governance level an strengthen scientificalness of
decision-making.
The Company has always been focusing on the perfection and standardization of internal control. The Company
deeply knows that perfecting internal control system is the important guarantee for the enterprise to tamping
development foundation; enhance ability and level of preventing and resisting risks. When Enterprise Internal Control
Basic Criterion released by five ministries and commissions such as the Ministry of Finance etc. began to be
17
implemented, the Company arranged relative work, with the help of Company processes reconstruction, according to the
requirements of Enterprise Internal Control Basic Criterion, the Company conducted comprehensive combing to the
internal control system and all rules and regulations, revised, supplemented and perfected the internal control system in
time.
During the report period, the Company was nominated as one of the 26 key listed companies that are pioneers of
internal control implementation criterion in Shenzhen. According to the requirements of Enterprise Internal Control
Basic Criterion and Enterprise Internal Control Matching Guidance issued by the five ministries an commissions such as
the Ministry of Finance etc. and Notice about Getting to one Work about Pilot of Internal Control Criterion for Listed
Companies in Shenzhen, in order to guarantee smoothly developing work related to internal control, the Company
attached great importance, established internal control criterion work group in March 2011, and Chairman and General
manager served as the leader and vice leader of the work group. As the leading department of internal control criterion,
the Law Department coordinated with Company Enterprise Management Department, Finance Department, Human
Resources Department, Office, Information Technology Department, Chairman’s Secretary Office, and Auditing
Department to develop organization internal control construction work. At the same time, the Company invited
specialized consultation institution with rich experiences to assist the Company combing, constructing and perfecting
internal control overall structure, help the Company identify weak links and main risks existing in internal control,
design key processes and content of design control pointedly and assist the Company developing internal control and
self-evaluation work.
Ⅱ. Execution of profit distribution plan for year 2010
The proposal of profit distribution in 2010 was approved at the Annual General Meeting 2010 held on April 12,
2011.
According to 10% of the net profit of the parent company RMB 1,136,695,740, statutory surplus capital reserve
RMB 113,669,574 was withdrew;
Taking the total capital shares 1,717,300,503 shares as of year-end as the radix, cash RMB 1.2 (tax included) would
be sent for each 10 shares, that was to say, RMB 206,076,060 cash dividend would be sent.
The residual undistributed profit RMB 4,184,330,333 was retained to the next report year.
The Company did not conduct converting capital reserve into share capital this year.
The Company issued the Announcement on Dividend Distribution and Implementation of Converting Capital
Reserve into Share Capital of 2010 on China Securities Journal, Securities Times, Shanghai Securities News, Hong
Kong Wen Wei Po and http://www.cninfo.com.cn on July 6, 2010. A share equity registration day would be June 2, 2011,
and the ex-interest day would be June 3, 2011 (Final transaction day of B shares would be June 2, 2011, ex-interest day
would be June 3, 2011, and B share equity registration day would be June 8, 2011). Up till the disclosure date of this
report, carry out of the above-mentioned dividend and interest distribution scheme has been completed.
18
Ⅲ. Profit distribution plan of semi-annual 2011
Neither profit distribution nor converting capital reserve into share capital will be implemented for semi-annual
2011.
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
N/A
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 Power Supply Co., Ltd. supplies power to its controlling shareholder Shekou
Industrial Zone and its subsidiaries. Utility bills Calculated and charged according to the regulations of Bureau of
Commodity Price. As part of the power bills of related transaction were calculated and billed by other property
management companies, the related power transaction is untraceable.
（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 aforementioned business have rented land of Shekou Industrial Zone since they were
founded. In the report period, land using expenses of the Company and controlling subsidiaries paid to Shekou
Industrial Zone totaled to RMB 11.68 million.
（3） Guarantee and assurance
A. Up till June 30, 2011, condition of associated party providing bank loan guarantee for the Company and its
subsidiaries is as follows:
Name of the associated party Guaranteed party Guarantee amount
Shekou Industrial Zone The Company RMB 940,000,000
Shenzhen China Merchants RMB
Shekou Industrial Zone 78,000,000
Property
China Merchants Group The Company RMB 2,000,000,000
Dafeng Co., Ltd. Hong Kong Eureka USD 50,000,000
China Merchants Group (Hong USD
Hong Kong Eureka 297,000,000
Kong) Co., Ltd.
B. The wholly owned subsidiary company of Shekou Industrial Zone – Top Chief Ltd. provided liquidation
guarantee for long-term foreign exchange business engaged in ING Bank N.V., Hong Kong Branch of the Company’s
19
subsidiary-Hong Kong Eureka.
（4） Rental income
Accumulated in this
term Accumulated in the same period of the previous year
RMB Yuan
RMB Yuan
China Merchants Shekou Industrial Zone Co., Ltd. 5,317,001 5,946,918
China Merchants International (China) Investment Co., Ltd. 2,263,627 2,266,634
China Merchants International Information Technology Co., Ltd. 589,056
-
Shenzhen Beike Venture Co., Ltd. 333,330 335,000
China Merchants Group Shenzhen Major Projects Coordination Office 250,542 -
Shenzhen China Merchants International Ship Agency Co., Ltd. 218,963 -
Shenzhen China Merchants Landmark Co., Ltd. -
1,076,120
__________ China Merchants Logistics Holding Co., Ltd. -
__________ 763,896
Total 8,972,519
10,388,568 __________ __________
__________
Proportion accounting for in
the rental income of the report period 3.05% 4.13％
The above mentioned rental income is the building rental fee that subsidiary company of the Company, Shenzhen
China Merchants Commercial Property Investment Co., Ltd. collected from the related parties such as Shekou Industrial
Zone etc., and the transaction is conducted according to the agreement price.
2. Other related transactions
Up till June 30, 2011, subsidiary of the Company China Merchants Construction altogether undertook general
contracting engineering of Front Bay Garden phase 1 to 4 invested by Shenzhen China Merchants Front Bay Property
Co., Ltd. (hereinafter referred to as “China Merchants Front Bay Property”) indirectly controlled by Shekou Industrial
Zone. Phase 1 and 2 engineering contract prices are estimated to be RMB 140.62 million and RMB 117.81 million, and
now the two projects have been completed and accepted and are entering completion settlement stage. Phase 3 and 4
engineering contract prices are estimated to be RMB 69.83 million and RMB 65.35 million. So far progress of the two
projects is normal, and under estimation civil engineering operation can be finished by the end of this year. China
Merchants Construction can get general contracting management fee of 1% of the total contracting price. China
Merchants Construction undertaking Front Bay Garden engineering of China Merchants Front Bay Property can
accumulate housing construction achievment; create conditions for the Company promoting qualification as soon as
possible, thus better meeting development demand of the Company, meeting the overall interest of the Company.
3. Credit, debts between the Company and associated parties at the report period-end
Item name Associated party June 30, 2011 December 31, 2010
Other account Foshan China Merchants Longyuan
receivable 672,924,122 -
Real Estate Co., Ltd.
Other account Shenzhen TCL Optical- Electronics
receivable Technologies Ltd.
227,159,525 291,155,457
Other account China Merchants Guangming Science
receivable - 13,960,000
Park Co., Ltd.
20
Long-term account Huizhou Taitong Property Investment Co., Ltd.
141,577,000 134,579,000
receivable
Account payable China Merchants Shekou Industrial Zone Co.,
Ltd.
111,751,800 -
Other account payable China Merchants Zhangzhou Development
Zone Co., Ltd.
393,929,535 393,929,535
Other account payable Shenzhen Nanshan Real Estate
259,201,912 344,987,895
Development Co., Ltd.
Other account payable Shenzhen Shekou Dazhong Investment Co.,
Ltd
138,235,302 138,235,302
Other account payable China Merchants Guangming Science
74,095,728 1,055,028
Park Co., Ltd.
Other account payable CM Financing 71,770,000 53,440,000
Other account payable Shenzhen CM Landmark Co., Ltd. 693,279 1,838,494
Other account payable China Merchants Hanghua Technologies and
Trade Center Co., Ltd.
528,151 528,151
Other account payable Tianjin Xinhai Real Estate Development Co.,
Ltd.
- 133,081,399
Other account payable Shenzhen CM Landmark Co., Ltd. 1,200,000 1,200,000
Dividend payable Shenzhen Nanshan Real Estate
39,604,987 39,604,987
Development Co., Ltd. __________
The aformentioned issues had no major influences on the Company.
Ⅷ. Significant contracts and execution
1. In the report period, there were no other significant trusts, contracts or lease events.
2. Execution of significant contracts in the report period:
In the report period, the Company signed bank loan contracts with Bank of China, Agricultural Bank of China and
China Merchants Bank etc. in succession, up till the end of the report period, the sum of loans contracted equals to RMB
20.168 billion Yuan
3. Capital occupation by associated parties and guarantee issues
（1） Capital occupation by associated parties
According to the requirements of regulations on Capital Flow between the Listed Companies and Associated parties as
well as on External Guarantee of Listed Companies ruled by CSRC, the Company made internal inspection on the
current fund with the associated parties and external guarantee and report to Shenzhen Securities Regulatory Bureau.
Relevant details were as follows:
Accounting
Relationship items
Name of the Amount at Amount in Amount in
with the calculated by Reason Nature
parties period begin this period period end
Company listed
company
Foshan China
Merchants Associated Other accont Current Non-operational
Longyuan Real company receivable
- 672,924,122 672,924,122 fund occupancy
Estate Co., Ltd.
Shenzhen TCL
Associated Other accont Current Non-operational
Optical- Electronics
company receivable
291,155,457 63,995,932 227,159,525 fund occupancy
Technologies Ltd.
Huizhou Taitong Long-term
Current Non-operational
Property Investment Joint venture accont 134,579,000 6,998,000 141,577,000 fund occupancy
Co., Ltd. receivable
（2） Guarantee issues
21
Up till June 30, 2011, external guarantee sum of the Company and its holding subsidiary companies (excluding
sales mortgage guarantee provided by the subsidiary company to the client) was RMB 1840.65 million, accounting for
10.11% of the parent company shareholders’ net assets after the latest audit report, and the guarantee issue is the
guarantee provided by the Company for bank loan of the subsidiary company. There was no overdue guarantee
amount, litigated guarantee amount or any loss that should be accounted for the guarantee due to lawsuit.
Up till June 30, 2011, the Company continued to provide interim guarantee for purchasers of commercial
properties within the period from the date the bank offering the loan to the date the bank finalizing the Property
Ownership Certificate. If the purchaser doesn’t fulfill the responsibility to the debtor in the aforesaid period, the
Company is entitled to take back the sold properties, so the guarantee would not cause actual loss of the Company. At
the end of the period, the Company provided a total guarantee amount of RMB 74.89 millions.
In the report period, besides the above-mentioned guarantee issues, the Company and the Company held
subsidiaries do not have other external guarantee and has not provided guarantee for the shareholder, actual controller
and its associated parties.
4. Special statements 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,
comment that:
The Company that provides development fund for joint venture as shares holding proportion and provide loan
guarantees for subsidiaries as shares holding proportion meets the demands of normal operation and rational use of fund.
Decision-making procedures are in accordance with laws and regulations without jeopardizing shareholders’ interests.
5. In the report period, there was none occurrence of the Company entrusting other parties to conduct cash assets
management.
Ⅸ. Inspections, visits and interviews received and communication functions held during the report period are as
follows:
During the reporting period, the Company treats every individual investor with fairness, equitableness and good will
throughout all receptions on inspections, visits and interviews, maintaining a consistent fine relationship with our
investors. We strictly followed the Directory to Fair Disclosure of Public Listed Companies and Guidelines to Reception
and PR Rules, and had suspended any forms of reception one month before semi-annual report disclosure. Inspections,
visits and interviews received during the reporting period are as follows:
Content
Reception discussed and
Reception date Reception way Object received
place information
provided
Hong
January 6, 2011 Strategic seminar ICBC Credit Suisse
Kong
Hong
January 7, 2011 Strategic seminar JEFFERIES
Kong
January 10, 2011 Shekou, Field Client of CITIC securities
22
Shenzhen investigation
Shekou, Telephone
January 11, 2011 Investor
Shenzhen inquiry
Shekou, Telephone ①
January 13, 2011 Investor
Shenzhen inquiry Introducing
January 18, 2011 Shanghai Field inspection UBS operation of
Shekou, the Company
January 26, 2011 Field inspection JEFFERIES
Shenzhen ②
Shekou, Discussing
February 16, 2011 Field inspection United securities
Shenzhen the industry
Shekou, development;
February 16, 2011 Field inspection Dacheng Fund
Shenzhen ③ Providing
Shekou, the
February 17, 2011 Written inquiry Investor
Shenzhen information
Shekou, announced
February 18, 2011 Field inspection Client of Deutsche Bank
Shenzhen and brochure
Shekou, for projects
February 21, 2011 Field inspection Client of Haitong Securities
Shenzhen of the
Shekou, Telephone Company.
March 9, 2011 Investor
Shenzhen inquiry ④ Visiting
Shekou, Telephone the Company
March 14, 2011 Investor
Shenzhen inquiry on-sale
Shekou, Investment 40 institutions such as Guotai Junan, buildings,
March 21, 2011
Shenzhen discussion forum CICC and CITIC etc. and providing
Shekou, Telephone building sales
April 6, 2011 Investor brochure.
Shenzhen inquiry
Shekou, Telephone
April 8, 2011 JEFFERIES
Shenzhen inquiry
April 12, 2011 Tianjin Field inspection Client of Pingan Securities
Shekou, Telephone
April 22, 2011 Investors
Shenzhen inquiry
April 25, 2011 Wuhan Field inspection Shenyin Wanguo strategy meeting
Shekou, Telephone
April 27, 2011 JEFFERIES
Shenzhen inquiry
Shekou,
May 2, 2011 Field inspection CITIC Securities
Shenzhen
Shekou,
May 3, 2011 Field inspection Goldman Sachs-Gaohua
Shenzhen
Shekou,
May 5, 2011 Field inspection Guangfa Funds
Shenzhen
Shekou, Telephone
May 9, 2011 JEFFERIES
Shenzhen inquiry
Shekou, First Capital Securities, Goldstate
May 11, 2011 Field inspection
Shenzhen Securities, Guangzhou Securities
Shekou,
May 13, 2011 Field inspection Capital World Investor Group
Shenzhen
Shekou,
May 16, 2011 Field inspection Yuanta Securities
Shenzhen
Shekou, Project China Merchants Securities, Houde
May 18, 2011
Shenzhen inspection Investment,Shuimutong Investment
Shekou, Pingan Securities, Yinhua Fund,
May 19, 2011 Field inspection
Shenzhen Dacheng Fund
Shekou,
May 19, 2011 Field inspection E Fund
Shenzhen
Shekou,
May 19, 2011 Field inspection Client of Shenyin Wanguo
Shenzhen
Shekou,
May 20, 2011 Field inspection Credit Suisse
Shenzhen
Shekou,
May 25, 2011 Field inspection Huatai United, GTJA Allianz Funds
Shenzhen
23
Shekou,
May 25, 2011 Field inspection First capital securities
Shenzhen
Shekou, Telephone
June 7, 2011 JEFFERIES
Shenzhen inquiry
Orient Securities
June 8, 2011 Beijing Orient securities
Strategic seminar
Shekou,
June 14, 2011 Field inspection Goldstate Securities
Shenzhen
China Merchants
June 16, 2011 Shenzhen Securities China Merchants Securities
Strategic seminar
Pingan Securities
June 16, 2011 Shenzhen Pingan Securities
Strategic seminar
Shekou,
June 20, 2011 Field inspection Penghua Fund
Shenzhen
Shekou,
June 20, 2011 Field inspection Huatai Group
Shenzhen
Shekou, Telephone
June 21, 2011 Individual investor
Shenzhen inquiry
Shekou,
June 22, 2011 Field i inspection CITIC securities
Shenzhen
Shekou, Telephone
June 22, 2011 Guotai Junan
Shenzhen inquiry
Shekou, Telephone
June 22, 2011 Orient Securities
Shenzhen inquiry
Shekou, Telephone
June 22, 2011 Chang Xin Asset Management
Shenzhen inquiry
Shekou,
June 23, 2011 Field inspection Orient Securities
Shenzhen
Shekou, Telephone
June 23, 2011 JEFFERIES
Shenzhen inquiry
UBS Strategic
June 23, 2011 Qingdao UBS
seminar
BOC
June 23, 2011 Taiyuan international BOC international
Strategic seminar
Credit Suisse
June 23, 2011 Chongqing Credit Suisse
Strategic seminar
Shekou,
June 24, 2011 Field inspection Chang Xin Asset Management
Shenzhen
June 25, 2011 Beijing Field inspection Guotai Junan
Shekou, Telephone
June 28, 2011 China Investment Securities
Shenzhen inquiry
Shekou,
June 29, 2011 Field inspection Minsheng Securities
Shenzhen
Shekou, Telephone
June 30, 2011 Goldmand Sachs Gaohua
Shenzhen inquiry
Shekou, Telephone
June 30, 2011 Guotai Junan
Shenzhen inquiry
CITIC securities
June 30, 2011 Chengdu CITIC Securities
Strategic seminar
Ⅹ. Fulfill of commitment made by shareholders with holding 5% or more
Subsidiary company of the Company Shenzhen China Merchants Real Estate (short for “CMPD
Shenzhen”) indirectly participated in the investment and construction of Shenzhen Jingyuan Building in
the previous year. Due to the subsequent bankruptcy of the previous project developer, CMPD Shenzhen
24
undertook the settlement of Jingyuan Building project (sales and registration of property rights etc.),
entrusted by the project settlement authorities. Since the bankrupted developer hadn’t contributed to
building maintenance fund of Jingyuan Building, CMPD Shenzhen recovered the fund of RMB
1,277,096.68 for the project in the name of the original developer according to the investment share of
Jingyuan Building project indirectly held by it on July 7, 2011.
Ⅺ. In the report period, there was no criticism or condemnation targeting the Company, the Board of Directors,
or the directors.
N/A
Ⅻ. Appointment or dismissal of CPAs
On April 12, 2011, Shareholders’ General Meeting of 2010 of the Company approved relevant proposal on
continuing hiring Deloitte Touche Tohmatsu Certified Public Accountants Ltd. as external audit institution.
ⅩⅢ. Other significant events
Subsidiary companies of the Company Shenzhen China Merchants Real Estate indirectly participated in the investment
and construction of Shenzhen Jingyuan Building in the previous year. Due to the subsequent bankruptcy of the previous
project developer, Shenzhen China Merchants Property undertook the settlement of Jingyuan Building project (sales and
registration of property rights etc.), entrusting by the project settlement authorities. Since the bankrupted developer
hadn’t contributed to building maitenance fund of Jingyuan Building, Shenzhen China Merchants property recovered the
fund of RMB 1,277,096.68 for the project in the name of the original developer according to the investment share of
Jingyuan Building project indirectly held by it on July 7, 2011.
Chapter 7. Financial Report (unaudited)
The Semi-annual Financial Report of the Company is not audited.For the details, please refer to Appendix
(Interim Financial Report 2011)
Chapter 8. Documents Available for Reference
Ⅰ. Financial statements carrying the signatures and seals of Legal Representative, Person in Charge of Accounting
Works and Person in Charge of Accounting Department;
Ⅱ. Originals of all disclosed documents and notices published on newspapers authorised by CSRC in the first half
of 2011;
The Board of Directors of China Merchants Property Development Co., Ltd.
August 9, 2011
25
26
China Merchants Property Development Co., Ltd.
Financial Statements
The period from January 1, 2011 to June 30, 2011
27
China Merchants Property Development Co., Ltd.
Financial Statements
The period from January 1, 2011 to June 30, 2011
Contents Page
Balance Sheet of the Company and Consolidated 29 - 30
Income Statement of the Parent Company and Consolidated 31 - 32
Cash Flow Statement of the Company and Consolidated 33 - 35
Change in Shareholders’ Equity, the Company and Consolidated 36 - 37
Notes to Financial Statements 38 - 154
28
China Merchants Property Development Co., Ltd.
The period from January 1, 2011 to June 30, 2011
Consolidated Balance Sheet
RMB Yuan
Balance at the end of Balance at the beginning of Balance at the end of Balance at the beginning of
Items Note term term Items Note term term
Current asset: Current liabilities
Monetary capital (V)1 8,967,712,438 9,676,385,052 Short-term loans (V)16 2,433,062,956 1,172,132,283
Transactional financial assets (V)2 2,640,628 846,539 Trade off financial liabilities (V)2 7,218,100 20,824,615
Account receivable (V)3 88,878,553 102,603,093 Notes payable (V)17 - 275,616,189
Prepayment 116,205,959 5,598,968 Account payable (V)18 4,922,342,738 4,757,667,163
Other account receivable (V)4 4,276,608,466 4,144,714,137 Prepayment received (V)19 11,948,189,849 11,268,654,826
Inventories (V)5 44,470,273,077 38,699,347,411 Employees’ wage payable (V)20 107,910,392 207,232,511
Non-current asset due in 1 year 969,987 936,793 Tax payable (V)21 892,048,600 614,789,018
Other current asset (V)6 1,554,093,471 980,538,674 Interest payable (V)22 84,337,866 109,123,639
Dividend payable (V)23 375,533,977 124,209,948
Other account payable (V)24 6,347,908,156 5,743,381,514
Non-current liability due in 1 year (V)26 2,458,362,972 1,856,422,159
Other current liability (V)27 2,432,328,579 2,357,741,683
Total current asset 59,477,382,579 53,610,970,667 Total current liability 32,009,244,185 28,507,795,548
Non-current assets Non-current liabilities
Long-term receivable (V)7 1,297,613,656 1,260,737,445 Long-term borrowings (V)28 10,829,222,300 9,995,835,344
Long-term share equity
(V)8,9 764,694,976 597,610,091 Long-term payable (V)29 72,703,760 58,587,176
investment
Investment properties (V)10 3,362,465,250 3,438,215,323 Expectible liabilities (V)25 102,501,835 106,289,589
Fixed assets (V)11 255,945,948 260,939,762 Differed income tax liability (V)14 - -
Construction in process (V)12 36,085,981 23,327,061 Other non-recurring liabilities (V)30 3,816,700 3,816,700
Long-term amortizable expenses (V)13 164,590,917 165,985,049 Total non-current liabilities 11,008,244,595 10,164,528,809
Differed income tax asset (V)14 344,467,592 460,455,365 Total liability 43,017,488,780 38,672,324,357
Total non-current assets 6,225,864,320 6,207,270,096 Shareholders’ equity -
Share capital (V)31 1,717,300,503 1,717,300,503
Capital reserves (V)32 8,478,831,944 8,484,453,421
Surplus reserves (V)33 899,462,584 899,462,584
Retained profit (V)34 8,203,418,576 6,940,907,225
Different of foreign currency translation 169,776,525 165,308,103
Total shareholders’ equity attributable to the parent
19,468,790,132 18,207,431,836
company
Minor shareholders’ equity 3,216,967,987 2,938,484,570
Total shareholders’ equity 22,685,758,119 21,145,916,406
Total assets 65,703,246,899 59,818,240,763 Total owners’ equity and liabilities 65,703,246,899 59,818,240,763
The Notes to the Financial Statements are essential parts of the Financial Statements
The Financial Statements presented on page 2 to 107 are signed by the following persons:
_______________________ ____________________________ _________________________
Legal representative Financial superior Head of accounting dept.
29
China Merchants Property Development Co., Ltd.
The period from January 1, 2011 to June 30, 2011
Balance Sheet of the Company
RMB Yuan
Items Note Balance at the end of term Balance at the beginning of term Items Note Balance at the end of term Balance at the beginning of term
Current asset: Current liabilities
Monetary capital 2,262,424,051 3,701,866,661 Short-term loans (XII)3 2,216,506,000 998,021,500
Prepayments 232,797 - Employees’ wage payable 207,258 5,371,108
Dividend receivable 1,986,481,527 2,169,117,072 Tax payable 14,222,374 5,240,509
Other account receivable (XII)1 22,503,788,230 19,692,350,788 Interest payable 23,139,307 83,065,942
Total current asset 26,752,926,605 25,563,334,521 Dividend payable 87,755,772 -
Other account payable 6,231,964,635 5,825,384,664
Non-current liability due in 1 year (XII)4 864,716,000 500,000,000
Other current liability - -
Total current liability 9,438,511,346 7,417,083,723
Non-current assets Non-current liabilities
Available-for-sale financial asset - - Long-term borrowings (XII)5 6,412,228,000 6,783,316,000
Long-term receivable 1,007,059,987 981,013,052 Differed income tax liability - -
Long-term share equity investment (XII)2 3,720,267,935 3,538,956,943 Total non-current liabilities 6,412,228,000 6,783,316,000
Fixed assets 377,924 367,487 Total liability 15,850,739,346 14,200,399,723
Long-term amortizable expenses - - Shareholders’ equity
Total non-current assets 4,727,705,846 4,520,337,482 Share capital 1,717,300,503 1,717,300,503
Capital reserves 8,927,054,193 8,927,054,193
Surplus reserves 848,511,191 848,511,191
Retained profit 4,137,027,218 4,390,406,393
Total shareholders’ equity 15,629,893,105 15,883,272,280
Total assets 31,480,632,451 30,083,672,003 Total owners’ equity and liabilities 31,480,632,451 30,083,672,003
30
China Merchants Property Development Co., Ltd.
The period from January 1, 2011 to June 30, 2011
Consolidated Income Statement
RMB Yuan
Amount of the same period
Items Note Amount of the Current Term of last year
I. Total revenue (V)35 8,091,485,144 6,981,153,925
Incl. Business income 8,091,485,144 6,981,153,925
II. Total business cost 5,752,879,119 5,206,663,811
Incl. Business cost (V)35 4,241,421,711 4,127,363,733
Business tax and surcharge (V)36 1,280,704,062 862,925,247
Sales expense 159,949,829 112,145,064
Administrative expense 143,092,729 101,179,394
Financial expenses (V)37 (72,284,595) 3,053,234
Asset impairment loss (V)40 (4,617) (2,861)
Plus: Income from change of fair value (V)38 15,884,266 29,917,874
Investment income (V)39 51,262,110 25,453,954
Incl. Investment gains from affiliates 45,609,319 (592,236)
III. Business profit 2,405,752,401 1,829,861,942
Plus: Non business income (V)41 3,359,735 8,910,241
Less: Non-business expenses (V)42 2,647,164 5,103,685
Incl. Loss from disposal of non-current assets 442,593 276,647
IV. Gross profit 2,406,464,972 1,833,668,498
Less: Income tax expenses (V)43 586,733,180 434,742,205
V. Net profit 1,819,731,792 1,398,926,293
Net profit attributable to the owners of parent co. 1,468,587,411 1,050,179,281
Minor shareholders’ equity 351,144,381 348,747,012
VI. Earning per share
(I) Basic earnings per share (V)44 0.8552 0.6115
(II) Diluted earnings per share (V)44 0.8552 0.6115
VII. Other misc. incomes (V)45 (1,153,055) 38,546,181
VIII. Total misc. incomes 1,818,578,737 1,437,472,474
Total misc gains attributable to the parent company 1,467,434,356 1,072,475,141
Total misc gains attributable to the minor shareholders 351,144,381 364,997,333
31
China Merchants Property Development Co., Ltd.
The period from January 1, 2011 to June 30, 2011
Income Statement of the Company
RMB Yuan
Amount of the same period of
Items Note Amount of the Current Term last year
I. Turnover - -
Less: Operation cost - -
Business tax and surcharge - -
Sales expense - -
Administrative expense 12,926,397 9,215,964
Financial expenses 54,209,759 (14,086,134)
Asset impairment loss - -
Plus: Income from change of fair value - -
Investment income (XII)6 19,847,934 20,005,859
Incl. Investment gains from affiliates (2,734,008) (2,403,251)
II. Operation profit (47,288,222) 24,876,029
Plus: Non business income - -
Less: Non-business expenses - -
Incl. Loss from disposal of non-current assets - -
III. Total profit (47,288,222) 24,876,029
Less: Income tax expenses 14,893 6,001,441
IV. Net profit (47,303,115) 18,874,588
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)
VII. Total integrated income (47,303,115) 18,223,610
32
China Merchants Property Development Co., Ltd.
The period from January 1, 2011 to June 30, 2011
Consolidated Cash Flow Statement
RMB Yuan
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 8,808,595,910 5,779,743,718
Tax returned 801 15,311,948
Other cash received from business operation (V)46(1) 2,399,907,299 1,457,432,262
Sub-Total cash inflow from business activities 11,208,504,010 7,252,487,928
Cash paid for purchasing of merchandise and services 9,336,184,478 6,182,133,125
Cash paid to staffs or paid for staffs 490,222,480 367,569,007
Taxes paid 2,302,125,348 1,621,816,124
Other cash paid for business activities (V)46(2) 2,104,914,475 1,079,518,973
Sub-Total cash outflow from business activities 14,233,446,781 9,251,037,229
Cash flow generated by business operation, net (3,024,942,771) (1,998,549,301)
II. Cash flow generated by investing
Cash received from investment retrieving - -
Cash received as investment gains 724,434 -
Net cash retrieved from disposal of fixed assets, intangible assets, and other
22,752 33,971
long-term assets
Net cash received from disposal of subsidiaries or other operational units - -
Other investment-related cash received (V)46(3) - 12,887
Sub-Total cash inflow due to investment activities 747,186 46,858
Cash paid for purchasing of fixed assets, intangible assets and other
22,562,917 6,321,512
long-term assets
Cash paid as investment 127,821,477 28,125,469
Net cash received from subsidiaries and other operational units - -
Other cash paid for investment activities (V)46(4) 22,597,418 -
Sub-Total cash outflow due to investment activities 172,981,812 34,446,981
Net cash flow generated by investment (172,234,626) (34,400,123)
III. Cash flow generated by financing
Cash received as investment 51,250,000 475,673,905
Incl. Cash received as investment from minor shareholders 51,250,000 475,673,905
33
China Merchants Property Development Co., Ltd.
Cash received as loans 4,240,989,406 5,730,487,074
SubTotal cash inflow from financing activities 4,292,239,406 6,206,160,979
Cash to repay debts 1,445,159,864 1,507,153,645
Cash paid as dividend, profit, or interests 638,348,637 239,851,792
Incl. Dividend and profit paid by subsidiaries to minor shareholders 279,455,136 61,556,629
Other cash paid for financing activities - 882,889,738
SubTotal cash outflow due to financing activities 2,083,508,501 2,629,895,175
Net cash flow generated by financing 2,208,730,905 3,576,265,804
IV. Influence of exchange rate alternation on cash and cash equivalents (18,808,577) (3,610,150)
V. Net increase of cash and cash equivalents (1,007,255,069) 1,539,706,230
Plus: Balance of cash and cash equivalents at the beginning of term (V)47(2) 8,914,595,308 8,775,661,067
VI. Balance of cash and cash equivalents at the end of term (V)47(2) 7,907,340,239 10,315,367,297
34
China Merchants Property Development Co., Ltd.
The period from January 1, 2011 to June 30, 2011
Cash Flow Statement of the Company
RMB Yuan
Amount of the same period of
Items Note Amount of the Current Term last year
I. Net cash flow from business operation
Other cash received from business operation 318,519,847 552,707,036
Sub-Total cash inflow from business activities 318,519,847 552,707,036
Cash paid to staffs or paid for staffs 8,657,061 5,860,756
Taxes paid 642,724 5,024,297
Other cash paid for business activities 2,705,554,780 2,277,673,432
Sub-Total cash outflow from business activities 2,714,854,565 2,288,558,485
Cash flow generated by business operation, net (2,396,334,718) (1,735,851,449)
II. Cash flow generated by investing
Cash received from investment retrieving - -
Cash received as investment gains 182,635,544 -
Net cash received from disposal of subsidiaries or other operational units - -
Sub-Total cash inflow due to investment activities 182,635,544 -
Cash paid for construction of fixed assets, intangible assets and other long-term assets 9,400 40,900
Cash paid as investment 184,045,000 10,000,000
Sub-Total cash outflow due to investment activities 184,054,400 10,040,900
Net cash flow generated by investment (1,418,856) (10,040,900)
III. Cash flow generated by financing
Cash received as loans 2,331,076,500 1,318,282,000
SubTotal cash inflow from financing activities 2,331,076,500 1,318,282,000
Cash to repay debts 1,098,021,500 627,909,000
Cash paid as dividend, profit, or interests 274,296,425 124,762,027
SubTotal cash outflow due to financing activities 1,372,317,925 752,671,027
Net cash flow generated by financing 958,758,575 565,610,973
IV. Influence of exchange rate alternation on cash and cash equivalents (447,611) (416,613)
V. Net increase of cash and cash equivalents (1,439,442,610) (1,180,697,989)
Plus: Balance of cash and cash equivalents at the beginning of term 3,701,866,661 6,268,540,841
VI. Balance of cash and cash equivalents at the end of term 2,262,424,051 5,087,842,852
35
China Merchants Property Development Co., Ltd.
The period from January 1, 2011 to June 30, 2011
Consolidated Statement of Change in Shareholders’ Equity
RMB Yuan
Amount of the Current Term Amount of Last Year
Shareholders’ equity attributable to the parent company Minor Shareholders’ equity attributable to the parent company
shareholders’ Total shareholders’ Minor shareholders’ Total shareholders’
Items Share capital Capital reserves Surplus reserves Retained profit Others equity equity Share capital Capital reserves Surplus reserves Retained profit Others equity equity
785,793,01 5,214,909,61
I. Balance at the end of last year 1,717,300,503 8,484,453,421 899,462,584 6,940,907,225 165,308,103 2,938,484,570 21,145,916,406 1,717,300,503 8,487,926,904 72,806,727 2,023,299,723 18,302,036,477
0 0
Plus: Change of accounting
policy - - - - - - - - - - - - - -
Correcting of previous errors - - - - - - - - - - - - - -
Others - - - - - - - - - - - - - -
II. Balance at the beginning of 785,793,01 5,214,909,61
current year 1,717,300,503 8,484,453,421 899,462,584 6,940,907,225 165,308,103 2,938,484,570 21,145,916,406 1,717,300,503 8,487,926,904 72,806,727 2,023,299,723 18,302,036,477
0 0
III. Changed in current term - (5,621,477) - 1,262,511,351 4,468,422 278,483,417 1,539,841,713 - (3,473,483) 113,669,574 1,725,997,615 92,501,376 915,184,847 2,843,879,929
(I) Net profit - - - 1,468,587,411 - 351,144,381 1,819,731,792 - - - 2,011,397,239 - 472,589,734 2,483,986,973
(II) Other integrated income - (5,621,477) - - 4,468,422 - (1,153,055) - (3,473,483) - - 92,501,376 64,143,209 153,171,102
Total (I) and (II) - (5,621,477) - 1,468,587,411 4,468,422 351,144,381 1,818,578,737 - (3,473,483) - 2,011,397,239 92,501,376 536,732,943 2,637,158,075
(III) Shareholder input and
withdraw of share capital - - - - - 255,534,324 255,534,324 - - - - - 631,850,102 631,850,102
1. Capital input by shareholders - - - - - 255,534,324 255,534,324 - - - - - 632,387,198 632,387,198
2. Share payment accounted into
shareholders’ equity - - - - - - - - - - - - - -
3. Others - - - - - - - - - - - - (537,096) (537,096)
(IV) Profit distribution - - - (206,076,060) - (328,195,288) (534,271,348) - - 113,669,574 (285,399,624) - (253,398,198) (425,128,248)
1. Providing of surplus reserves - - - - - - - - - 113,669,574 (113,669,574) - - -
2. Common risk provision - - - - - - - - - - - - - -
3. Dividend to shareholders - - - (206,076,060) - (328,195,288) (534,271,348) - - - (171,730,050) - (253,398,198) (425,128,248)
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 8,478,831,944 899,462,584 8,203,418,576 169,776,525 3,216,967,987 22,685,758,119 1,717,300,503 8,484,453,421 899,462,584 6,940,907,225 165,308,103 2,938,484,570 21,145,916,406
-
36
China Merchants Property Development Co., Ltd.
The period from January 1, 2011 to June 30, 2011
Statement of Change of Shareholders’ Equity of the Company
RMB Yuan
Amount of the Current Term Amount of Last Year
Total Total
Surplus shareholders’ Capital Surplus shareholders’
Items Share capital Capital reserves reserves Retained profit equity Share capital reserves reserves Retained profit equity
I. Balance at the end of last year 1,717,300,503 8,927,054,193 848,511,191 4,390,406,393 15,883,272,280 1,717,300,503 8,930,527,676 734,841,617 3,539,110,277 14,921,780,073
Plus: Change of accounting policy - - - - - - - - - -
Correcting of previous errors - - - - - - - - - -
Others - - - - - - - - - -
II. Balance at the beginning of current
year
1,717,300,503 8,927,054,193 848,511,191 4,390,406,393 15,883,272,280 1,717,300,503 8,930,527,676 734,841,617 3,539,110,277 14,921,780,073
III. Changed in current term - - - -253,379,175 -253,379,175 - (3,473,483) 113,669,574 851,296,116 961,492,207
(I) Net profit - - - -47,303,115 -47,303,115 - - - 1,136,695,740 1,136,695,740
(II) Other integrated income - - - - - - (3,473,483) - - (3,473,483)
Total (I) and (II) - - - -47,303,115 -47,303,115 - (3,473,483) - 1,136,695,740 1,133,222,257
(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 - - - -206,076,060 -206,076,060 - - 113,669,574 (285,399,624) (171,730,050)
1. Providing of surplus reserves - - - - - - - 113,669,574 (113,669,574) -
2. Providing of common risk
provisions
- - - - - - - - - -
3. Dividend to shareholders - - - -206,076,060 -206,076,060 - - - (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 8,927,054,193 848,511,191 4,137,027,218 15,629,893,105 1,717,300,503 8,927,054,193 848,511,191 4,390,406,393 15,883,272,280
37
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(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.
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 have 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
38
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
1,267,300,503 shares.
39
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(I) Company Profiles – cont.
Under “Approval of issuing new shares by China Merchants Property Development Co., Ltd.”
(Zheng-Jian-Xu-Ke[2009]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 have increased up to
1,717,300,503 shares since then.
The Company’s headquarter is 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.
(II) Main Accounting Policies, Estimations and Retrospection of Previous Accounting Errors
1. Basis of the Financial Statements
The Company adopts the Enterprise Accounting Standard published by the Department of
Finance on February 15, 2006. In addition, the financial statements had also presented and
disclosed the relevant financial information in accordance with the "Rules of information
disclosure of PLCs No.15 -- the general provisions of financial report (2010 Amendment)".
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, 2011 of both the company and consolidated, as well as the operation results and cash flow in
the period from January 1, 2011 to June 30, 2011 of the Company and consolidated as well.
3. Accounting period
The fiscal year of the Group is the solar calendar year, which 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 Company in Hong Kong and other countries shall be accounted in the local
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China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
currencies. Standard currency used in this financial statement is RMB.
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China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(II) Main Accounting Policies, Estimations and Retrospection of Previous Accounting Errors –
Cont.
5. Accounting treatment of the merging entities under common control and different control
Merger of companies is divided into merger of enterprises under common control and merger of
enterprises under different control.
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.
Assets and liabilities acquired through merger are calculated at the book value of the merged
party at the date of merger. The difference between the book value of net asset and the
consolidated offer is adjusted to share capital premium in the capital reserves. If the share capital
premium is not enough to be adjusted, the retained profit shall be adjusted.
Direct expenses caused by merger of enterprises are accounted into current gain/loss account.
5.2 Merger of entities under different control and goodwill
Both before and after the merger, the enterprises are not under common control of sole party or
several parties; it is regarded as merger of enterprises under common control.
Merger cost refers to the fair value of assets paid, liabilities undertaken, and rights instruments
issued by the buyer for purchasing of the controlling power of the target entity. Agency expenses
such as auditing, legal services, or appraisal services and other administrative expenses occurred
in merger are accounted into current gain/loss account. For merger done through multiple
trades, the overall cost is the sum of cost of each single trade. Shares held before merging are
recounted at the fair value at the date of merger. The differences between the book value and fair
value are accounted into investment gains of current term. If the shares held by the buyer before
merging are involving in other benefits, the gains attached to it shall be transferred to investment
gains of the current term.
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.
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China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(II) Main Accounting Policies, Estimations and Retrospection of Previous Accounting Errors –
Cont.
5. Accounting treatment of the merging entities under common control and different control –
cont.
5.2 Merger of entities under different control and goodwill – cont.
Goodwill and intangible assets formed by merger of enterprises, shall be presented individually in
the consolidated financial statements, and measured at cost less impairment provisions. Goodwill
shall be verified at least annually for impairment.
Verifying of goodwill is performed along with the asset portfolio or combination of asset
portfolios to which the goodwill is related. I.e. the book value of goodwill shall be reasonably
amortized to the related asset portfolio since the day acquired. Those can hardly be amortized to
the related asset portfolio shall be amortized to the combination of asset portfolios. Impairment
loss is recognized when the retrievable value of the asset portfolio or combination of asset
portfolios including the goodwill is lower than its book value. Impairment losses shall be firstly
amortized to the book value of goodwill of the asset portfolio or combination of asset portfolios,
then amortized to other assets in the portfolio or combination of portfolios 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 information obtained.
Disposal expenses include those legal expenses, taxes, freightage, and other direct expenses
occurred in purpose of make the asset usable.
Goodwill impairment loss shall be accounted into current gain/loss account and shall not be
written back in subsequent fiscal periods.
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.
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.
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China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
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.
The accounting policies and accounting periods of the subsidiaries are decided accord with the
Company’s accounting policies and accounting periods.
(II) Main Accounting Policies, Estimations and Retrospection of Previous Accounting Errors –
Cont.
6. Preparing of consolidated financial statements – cont.
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 “Minority 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 “Minority
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, the shareholders’ equity shall be deducted thereof.
For purchasing of minor share equity of subsidiaries or disposal of partial share equity but the
controlling power is still in possession of the Company, it will be accounted as equity trade, and
adjusted to the book value of owners’ equity attributable to the parent company and minority
shareholders’ equity to reflect the change of related equities in the subsidiary. The differences
between the adjusted amount and fair value of asset paid are adjusted to capital reserves, when the
capital reserves are not enough, retained profit shall be adjusted.
When the control over original subsidiary is lost for disposal of partial equity or other reasons, the
retained equity shall be recounted for fair value at the date of such change was happened. The
sum of consideration obtained from disposal of equity and the fair value of retained equities are
accounted into investment gains of the term when the disposal was happened. Other gains related
to the investment shall be transferred to investment gains of the term.
7. Recognition basis of cash and cash equivalents
Cash refers to in-stock cash and bank savings that 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
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China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
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.
(II) Main Accounting Policies, Estimations and Retrospection of Previous Accounting Errors –
Cont.
8. Translation of businesses and accounts in foreign currency – cont.
8.1 Foreign currency businesses – cont.
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
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
“undistributed 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.
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
“influence 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
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China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
according to the translated amount of the financial statements of last year.
When the control power is lost for disposal of partial equity or other reasons, the fair value of
retained shares shall be recounted at the date of the change happened. The sum of consideration
of equity disposal and the fair value of retained equity, less the share of net asset in the original
subsidiary shall be accounted into investment gains of the current term. Other gains related to
share investment in original subsidiary shall be transferred into investment gains of current term.
When the control power is lost for disposal of partial equity or other reasons, the fair value of
retained shares shall be recounted at the date of the change happened. The sum of consideration
of equity disposal and the fair value of retained equity, less the share of net asset in the original
subsidiary shall be accounted into investment gains of the current term. Other gains related to
share investment in original subsidiary shall be transferred into investment gains of current term.
When the controlling power was not lost at disposal of partial share equity or other reasons, the
difference related to the foreign currency account shall be accounted into minority shareholders’
equity, rather than current gain/loss account. When equity disposed was part of affiliates or joint
ventures in overseas area, the differences related to the overseas business shall be transferred into
current gain/loss at portion of share.
9. Financial instruments
Financial assets or liabilities are recognized as soon as the Group becomes a party of the contract
of financial instrument. Financial assets and liabilities are measured at fair value initially. For
financial assets and liabilities accounted at fair value with fluctuation accounted into current
gain/loss account, the transaction expenses shall be accounted into gain/loss account directly.
Whereas the expenses of financial assets and liabilities fall into other categories shall be
accounted into initial amount recognized.
(II) Main Accounting Policies, Estimations and Retrospection of Previous Accounting Errors –
Cont.
9. Financial instruments – cont.
9.1 Recognition of fair value
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 substantially similar financial instruments,
discounted cash flow analysis, and future option pricing model.
9.2 Actual interest basis
Actual interest rate basis refers to the method of calculating the amortized costs and each due
interest at actual interest rate of financial assets or liabilities (including a portfolio of financial
assets or liabilities). Actual interest rate refers to the interest rates used in discounting of future
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China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
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.
9.3 Categorizing, recognition, and measuring of financial assets
Financial assets are categorized as: financial assets accounted at fair value with fluctuation carried
into current gain/loss account, investment hold to maturity, loans, receivable accounts, and
available-for-sale financial assets. Financial assets traded in conventional ways are recognized
and terminated at the date of trading.
9.3.1 Financial assets measured by fair value with fluctuation accounted into current gain/loss
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 at initial recognition,
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.
(II) Main Accounting Policies, Estimations and Retrospection of Previous Accounting Errors –
Cont.
9. Financial instruments – cont.
9.3.2 Investment hold to maturity
Refers to those non-derivate financial assets which has fixed expiration date, retrievable amount,
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China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
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.
9.3.3 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.
9.3.4 Disposable financial assets
It 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.
Interests obtained during the period of holding the disposable financial assets and cash dividend
announced by the debtor are accounted into investment gains.
Equity instrument investment without quotations in an active market and cannot be reliably
measured for their fair values, and derivate financial assets connected to the instrument, shall be
measured at costs.
9.4 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.
Evidence for impairment on financial refers to those events actually occurred after initial
recognition, produced influences on the expected cash flow, and which can be reliably measured.
(II) Main Accounting Policies, Estimations and Retrospection of Previous Accounting Errors –
Cont.
9. Financial instruments – cont.
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China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
9.4 Financial asset impairment - continues
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 scope, which may cause obstructions for the investor
to retrieve the investment;
(8) The fair value of right investment instrument is significantly decreasing or
non-contemporarily decreasing;
(9) Other practical evidence showing that impairment has happened with the financial asset.
- Impairment of financial assets measured on amortized costs
Financial assets measured at costs or retained costs after amortization are written down to the
current value of anticipated 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.
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 portfolio 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 portfolio of financial
assets with similar risk characteristics. Financial assets confirmed for impairment individually
shall not be tested along with the portfolio of financial assets with similar risk characteristics.
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China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(II) Main Accounting Policies, Estimations and Retrospection of Previous Accounting Errors –
Cont.
9. Financial instruments – cont.
9.4 Financial asset impairment - continues
- 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 an 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
accounted to capital reserves, and the impairment loss of disposable liability instrument will be
restored to current gain/loss account.
- Impairment of financial assets counted by costs
Equity instrument investment without quotations in an active market and cannot be reliably
measured for its fair value, or the derivate instrument connected to the instrument, has impaired,
the book value shall be reduced to the current value of future cash flow estimated basing on the
market profit rate of similar instruments. The reduced amount is recognized as impairment loss
and accounted to current gain/loss account. Once the impairment loss was recognized, it shall not
be written back.
9.5 Transferring of financial assets
Recognition will be terminated when a financial asset satisfies one of the following conditions:(1)
The rights setout by the contract by which 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.
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
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China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
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
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.
(II) Main Accounting Policies, Estimations and Retrospection of Previous Accounting Errors –
Cont.
9. Financial instruments – cont.
9.6 Categorizing, recognizing and measuring of financial liabilities
Financial instruments issued by the Group are recognized as financial liabilities or equity
instruments according to the substantial quality of the contract arrangement and the definition of
financial liability or equity instruments.
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.
9.6.1 Financial liabilities accounted at fair value and fluctuation accounted into current gain/loss
account
Financial liabilities accounted at fair value and fluctuation accounted into current gain/loss
account are categorized to transactional financial liabilities and those which assigned to be
financial liabilities accounted at fair value and fluctuation accounted into current gain/loss
account.
Transactional financial liabilities shall satisfy one of the following conditions: (1) The purpose of
undertaking the liability was to repurchase in close future; (2) Which was part of a
recognizable financial instrument portfolio at initial recognition, and objective evidence showing
that the Group is managing this portfolio by mean of short-term profit in a short period of time;
(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 liabilities satisfying one of the following conditions are assigned to be financial
liabilities accounted at fair value and fluctuation accounted into current gain/loss account: (1)
This assignment can eliminate or obviously reduce the differences in recognition and measuring
caused by different measuring basis; (2) It has been described in the official papers of the
Group regarding risk management or investment strategies that, the portfolio shall be managed,
evaluated and reported on fair value basis.
Successive measurement of financial liabilities measured on fair value and fluctuation accounted
into current gain/loss account shall be on fair value basis. Gains or loses from fluctuation of fair
value or dividend or interests related to the financial liabilities shall be accounted into current
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China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
gain/loss account.
9.6.2 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 by 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.
(II) Main Accounting Policies, Estimations and Retrospection of Previous Accounting Errors –
Cont.
9. Financial instruments – cont.
9.6.3 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 “Enterprise Accounting Standard No.13 – Contingent Issues” and the
balance of initially recognized amount less accumulative amortization decided according to
“Enterprise Accounting Standard No. 14 – Income”
9.7 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.
9.8 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
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China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
assigned to financial asset or liability accounted on fair value basis with changes accounted into
current income account.
9.8.1 Convertible bonds
Convertible bonds containing liabilities and converting options issued by the Company are split
and recognized separately at initial recognition. Where converting options are instrument settled
by fixed amount of cash or exchanged of other financial assets for fixed amount with own equity,
which is 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)_
At successive measuring, the liability part of convertible bonds shall be measured at amortized
costs on actual interest rate basis; whereas the value of converting option shall be retained with
equity. No loss or gain is recognized when convertible bonds are expired or converted.
Transaction expenses occurred in issuing of convertible bonds, which shall be amortized upon its
relative fair values between the liability elements and equity elements. Equity-related transaction
expenses shall be straightly accounted into equity; liability-related transaction expenses shall be
accounted to book value of the liability, and amortized upon the period of the convertible bonds
on actual interest basis.
(II) Main Accounting Policies, Estimations and Retrospection of Previous Accounting Errors –
Cont.
9. Financial instruments – cont.
9.9 Neutralization of financial assets and 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.
9.10 Rights 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
53
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
10.1 Recognition and provision of bad debt provision on receivable accounts with large amount
Recognition criteria of bad debt The Group recognizes receivable accounts over RMB10 million as
provision on receivable accounts with receivable accounts with large amount
large amount
The Company performs impairment test separately on individual
financial assets with large amounts; those financial assets tested
Provision of bad debt provision on separately with no impairment found shall be tested again along with
receivable accounts with large amount the portfolio of financial assets with similar risk characteristics.
Financial assets confirmed for impairment shall not be tested along
with the portfolio of financial assets with similar risk characteristics.
10.2 Receivables recognized and providing bad debt provisions upon along with the portfolio
with similar characteristics
Recognition basis of credit risk portfolio Receivable accounts with minor amount individually and those with
large amount but tested no impairment, are grouped in portfolios
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
portfolios.
Providing method decided on the When impairment testing by way of risk grouping, amount of bad
portfolios of similar risks debt provision is decided according to historical experiences and
current economical situation and evaluated loss already exists with
the portfolios.
(II) Main Accounting Policies, Estimations and Retrospection of Previous Accounting Errors –
Cont.
10. Account receivable – cont.
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
54
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
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, 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.
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 accumulated actual cost and accumulated recognized
gross profit (loss)” over the “settled price” is demonstrated as inventory. The balance of “settled
price” over “Total accumulated actual cost and accumulated recognized gross profit (loss)” is
demonstrated as account received in advance.
Expenses such as traveling 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 day, inventories are accounted depending on which is lower between the
cost and the net realizable value. When its net realizable value is lower than the cost, provisions
for impairment of inventories shall be drawn. 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.
(II) Main Accounting Policies, Estimations and Retrospection of Previous Accounting Errors –
Cont.
11. Inventories
11.2 Recognition basis of realizable net value of inventory and providing basis of inventory
impairment provision – cont.
Provisions for impairment of inventories shall be accounted according to the difference between
the cost of individual inventory items and the net realizable 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.
55
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
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 long-term 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
12.2.1 Long-term equity investment on cost basis
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 cost
accounting method; Meanwhile, the Company apply cost basis in accounting of long-term equity
investment in subsidiaries under the Group’s substantial control.
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.
(II) Main Accounting Policies, Estimations and Retrospection of Previous Accounting Errors –
Cont.
12.2.2 Long-term equity investment on equity basis
The Group adopts equity basis in accounting of investment in affiliates and joint ventures.
Affiliates refer to those entities on which the Group can make major influences; joint ventures
refer to the entities the Group has joint control along with other investors.
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 long-term 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.
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China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
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 unrealized 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 unrealized 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 Disposal of long-term equity investment
At disposal of long-term equity investment, the difference between the book value and practical
price shall be accounted into current gain/loss account. At treating of long-term equity investment
accounted on equity basis, the part originally written into shareholders’ equity shall be transferred
over to current gain/loss account at appropriate portion.
12.3 Basis of deciding the common control and major influence on the invested firm
Controlling power means the power over the firm’s financial and operational decision-making,
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 have 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.
57
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(II) Main Accounting Policies, Estimations and Retrospection of Previous Accounting Errors –
Cont.
13. Investment property
Investment property 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.
Investment property 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
property. 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 property,
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 provided 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.
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. Fixed assets are only recognized when the financial benefit attached to the asset could
possibly inflow to the Group, and the cost can be reliably measured. Fixed assets are measured at
initial costs.
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 expenses
other than these are accounted into current income account when occurred.
58
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(II) Main Accounting Policies, Estimations and Retrospection of Previous Accounting Errors –
Cont.
14. Fixed assets – cont.
14.2 Depreciation of various fixed assets
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:
Annual
Depreciation age Salvage value depreciation ratio
Categories (yrs) rate % (%)
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. 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 fixed asset impairment is recognized, it shall not be written back in subsequent fiscal
periods.
14.4 Other remarks
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.
When a fixed asset is in disposable statue or make no financial benefit by using or disposal,
recognition of fixed asset shall be terminated. 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-process
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. No depreciation provided upon construction-in-process. It is
transferred to fixed asset as soon as the construction reaches the useful status.
59
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
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.
(II) Main Accounting Policies, Estimations and Retrospection of Previous Accounting Errors –
Cont.
16. Borrowing expenses
Borrowing expenses include borrowing interests, amortizing of discount or premium, 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.
17. Intangible assets
17.1 Intangible assets
Intangible assets include land-using rights and patents, etc.
Intangible assets are measured by their initial costs. 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, adjustment shall be done when necessary.
17.2 Testing and providing of intangible asset impairment provision
60
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
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.
(II) Main Accounting Policies, Estimations and Retrospection of Previous Accounting Errors –
Cont.
19. Anticipated liabilities
When quality warranty or liabilities attached to a contingent event is the current liability to be
undertaken by the Group, and it could lead to outflow of financial benefit with measurable
amount, then it is recognized as anticipated liabilities.
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 fulfill the current responsibility. If time influences the value of
currency significantly, then the best estimation shall be decided by the discount of predicted
future cash flow.
If the expenses for clearing of predictive liability is fully or partially compensated by a third party,
and the compensated amount can be recovered, it is recognized separated as asset. But the
compensated amount should not greater than the book value of the estimated liability.
20. Turnover
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
61
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
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.
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.
(II) Main Accounting Policies, Estimations and Retrospection of Previous Accounting Errors –
Cont.
20. Turnover – cont.
20.2 Income from construction contracts – cont.
Cost occurred in construction contract, gross profit (loss) recognized, and payment received is
presented in the Balance Sheet as net value neutralized. The premium part of accumulated
actual costs and gross profit (loss) over payment received is presented as inventory. The premium
part of payment received over the accumulated actual costs and gross profit (loss) is presented as
prepayment received.
20.3 Rental income
Rental income from investing rental properties is 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
62
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
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. Government subsidies are recognized when attached conditions are satisfied
and received.
Monetary government subsidies are measured at the amount received or receivable.
Non-monetary 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.
(II) Main Accounting Policies, Estimations and Retrospection of Previous Accounting Errors –
Cont.
22. Differed income tax assets/ differed income tax liabilities
Income tax expenditures include current income tax and differed income tax.
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.
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.
Generally all of the provisional differences are recognized for related differed income tax.
Whereas for the provisional deductible differences, the Group may possibly recognize differed
income tax asset to the limit of taxable income could be used to neutralize the provisional
differences. Those taxable provisional differences relating to initial recognition of goodwill, not
causing by enterprise mergers transaction, also making no influence on the accounting profit and
63
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
taxable income (or deductible losses) when initial recognition of assets or liabilities generated by
trades occurs are not recognized as relative differed income tax liabilities.
Deductible losses and tax deduction which could be transferred to successive years are recognized
as differed income tax assets to the limit of future taxable income which could be used to deduct
deductible losses and tax deduction.
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. Deductible
provisional differences related to investment in subsidiaries, affiliates, and joint ventures, are
recognized as differed income tax asset only when the provisional differences could be written
back in predicable future, and the taxable income amount could be obtained to deduct the
deductible provisional differences.
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.
Except for those current income taxes and differed income taxes related to trades which are
directly accounted into shareholders’ equity are accounted into other incomes, and differed
income tax generated by merger of businesses are adjusted in the book value of goodwill, all
current income taxes and differed income taxes expenditures or incomes are accounted into
current gain/loss account.
At the balance sheet day, verification will be performed on the book value of differed 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.
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.
(II) Main Accounting Policies, Estimations and Retrospection of Previous Accounting Errors –
Cont.
22. Differed income tax assets/ differed income tax liabilities – cont.
22.2 Deferred income tax asset and deferred income tax liabilities – cont.
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.
64
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
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 as
recognition of rental income to the whole rental period. Initial direct expenses with minor amount
are accounted into current income account at occurring. Contingent rental is accounted into
current income account as occurring.
(II) Main Accounting Policies, Estimations and Retrospection of Previous Accounting Errors –
Cont.
24. Employee wages
In the accounting period when the employees served the Company, the remunerations payable to
the employees are recognized as liabilities, except for the compensation for dismissing of labor
service contract.
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. Types 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%
65
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
Income from sales of goods (Note 2) 17%
VAT
Income from power supply (Note 2) 17%
Income from property sales – amount of on ultra-progressive tax rate of
Land VAT
deducted items 30%-60%
Amount received for land using rights and 3%
Contract tax
estates
70% of the original value of estates (Note 1.2%
Property tax
3)
City maintenance and Operational tax (or VAT paid) 7%(Note 4)
construction tax
Education surtax Operational tax (or VAT paid) 3%(Note 4)
Note 1: Except for businesses in the following areas, the income tax rate for other subsidiaries of
the Company is 25%.
Tax rate Notes
Shenzhen and Zhuhai 24% (1)
Hong Kong 16.5% (2)
(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 24%
of corporation tax in 2011. Therefore the subsidiaries of the Company located in Shenzhen
and Zhuhai are subject to 24% of corporation tax.
(2) According to Taxation Act of Hong Kong, enterprises located in Hong Kong are subject to
16.5% of corporation tax.
(III) Taxation - continues
1. Types and rates of taxes – cont.
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.
Note 4: According to “The notice on adopting of universal standard of city construction tax and
education surcharge for domestic and foreign invested enterprises” [国发(2010)35 号]
issued by the national government and “Notice on city construction tax and education
surcharge for foreign invested enterprises” (财税[2010]103), city construction tax and
education surcharge will be charged on foreign invested enterprises at 7% and 3%
respectively on VAT, consuming tax, and operational tax since December 1, 2010
(included).
66
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(IV) Merger of enterprises and consolidated financial statements
1. Particulars of the subsidiaries
(1) Subsidiaries acquired through incorporation or investment
Amount of
Balance of minor
other items shareholders’
actually equity used
Actual capital formed net Minor to offset the
Full name of Registered input as of investment Share shareholder gain/loss of
the Ownership of Business capital end of term in the proportion Voting Consolid s’ equity minor
subsidiary the subsidiary Reg. Add. property RMB’000 Business Scope (RMB’000) subsidiaries % power % ated? (RMB) shareholders
Eureka
Investment Investme Not Not
Ltd. liability HK HKD20,000 Investment 19,919 - 100% 100% Yes
Industrial nt applicable applicable
Ltd.
Shenzhen
Taige Indoor golf court, Property
Hotel Not Not
Apartment Ltd. liability Shenzhen RMB1,000 rental, restaurant, shopping 1,000 - 100% 100% Yes
service applicable applicable
Management mall
Co., Ltd.
Shekou
Xinghua Property
Real-estate and other
Industrial Ltd. liability Shenzhen develop HKD47,420 38,065 - 65.07% 65.07% Yes 39,894,400 -
properties
Holdings ment
Co., Ltd.
Shekou
Building of commercial
Zhaofa Not Not
Ltd. liability Shenzhen Property RMB36,000 houses and auxiliary 36,000 - 100% 100% Yes
Property Co., applicable applicable
facilities
Ltd.
Shenzhen
CM Property Property Real-estate operation, Not Not
Ltd. liability Shenzhen RMB2,000 2,000 - 100% 100% Yes
Consultancy agency information & consulting applicable applicable
Ltd.
Shanghai
China Property Property development and
Not Not
Merchants Ltd. liability Shanghai develop RMB30,000 sales of construction 30,000 - 100% 100% Yes
applicable applicable
Properties ment materials
Co., Ltd.
Guangzhou Ltd. liability Guangzhou Property RMB50,000 Specialized property 50,000 - 100% 100% Yes Not Not
67
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
China develop development, leasing and applicable applicable
Merchants ment sales
Real-estate
Co., Ltd.
CM Property Property
Property development and Not Not
(Beijing) Ltd. liability Beijing develop RMB20,000 20,000 - 100% 100% Yes
sales applicable applicable
Ltd. ment
China
Property
Merchants Property development, Not Not
Ltd. liability Suzhou develop RMB30,000 30,000 - 100% 100% Yes
(Suzhou) operation and sales applicable applicable
ment
Co., Ltd.
CM Property Property development,
Not Not
(Chongqing) Ltd. liability Chongqing develop RMB30,000 leasing of self-owned 30,000 - 100% 100% Yes
applicable applicable
Ltd. ment properties
68
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(IV) Merger of enterprises and consolidated financial statements – cont.
1. Particulars of the subsidiaries – cont.
(1) Subsidiaries acquired through incorporation or investment – cont.
Amount of
minor
shareholders’
Actual Balance of other equity used
capital items actually to offset the
Full name of Registered input as of formed net Share Voting Minor gain/loss of
the Ownership of Business capital end of term investment in proportio power Consolidate shareholders’ minor
subsidiary the subsidiary Reg. Add. property RMB’000 Business Scope (RMB’000) the subsidiaries n% % d? equity (RMB) shareholders
CM Property
Property development, Not Not
(Nanjing) Ltd. liability Nanjin develop RMB30,000 30,000 - 100% 100% Yes
sales, and services applicable applicable
Ltd. ment
Tianjin
China Property
Property development,
Merchants Ltd. liability Tianjin develop RMB40,000 30,000 - 75% 75% Yes 16,754,490 -
sales, and services
Properties ment
Co., Ltd.
Shenzhen
China
Property
Merchants Leasing of self-owned Not Not
Ltd. liability Shenzhen develop RMB25,000 36,803 - 100% 100% Yes
Xin’an properties applicable applicable
ment
Properties
Co., Ltd.
Property management,
Beijing CM
decoration, consultancy,
Property
Ltd. liability Beijing Property RMB5,000 property facility sales, 4,000 - 80% 80% Yes 5,946,669 -
Management
maintenance, property
Co., Ltd.
leasing and agency
Property management,
Nanjing CM
decoration, consultancy,
Property Not Not
Ltd. liability Nanjin Property RMB5,000 property facility sales, 5,000 - 100% 100% Yes
Management applicable applicable
maintenance, property
Co., Ltd.
leasing and agency
Property management,
Shanghai
decoration, consultancy,
CM Property Not Not
Ltd. liability Shanghai Property USD620 property facility sales, 5,130 - 100% 100% Yes
Management applicable applicable
maintenance, property
Co., Ltd.
leasing and agency
69
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
Property management,
Wuhan CM
decoration, consultancy,
Property Not Not
Ltd. liability Wuhan Property RMB5,000 property facility sales, 5,000 - 100% 100% Yes
Management applicable applicable
maintenance, property
Co., Ltd.
leasing and agency
70
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(IV) Merger of enterprises and consolidated financial statements – cont.
1. Particulars of the subsidiaries – cont.
(1) Subsidiaries acquired through incorporation or investment – cont.
Amount of
Balance of minor
other items shareholders’
Actual actually equity used to
capital formed net offset the
Full name of Registered input as of investment Share Minor gain/loss of
the Ownership of Business capital end of term in the proport Voting Consol shareholders’ minor
subsidiary the subsidiary Reg. Add. property RMB’000 Business Scope (RMB’000) subsidiaries ion % power % idated? equity (RMB) shareholders
Property management,
CM Property decoration, consultancy,
Not
Management Ltd. liability HK Property HKD 10 property facility sales, 11 - 100% 100% Yes Not applicable
applicable
(HK) Ltd. maintenance, property leasing
and agency
Shenzhen
Property management,
China
decoration, consultancy,
Merchants Not
Ltd. liability Shenzhen Property RMB11,200 property facility sales, 11,200 - 100% 100% Yes Not applicable
Property applicable
maintenance, property leasing
Management
and agency
Co., Ltd.
Property management,
Zhangzhou
decoration, consultancy,
CM Property Not
Ltd. liability Zhangzhou Property RMB500 property facility sales, 500 - 100% 100% Yes Not applicable
Management applicable
maintenance, property leasing
Ltd.
and agency
Shenzhen Property management,
CM Qile decoration, consultancy,
Property Ltd. liability Shenzhen Property RMB2,000 property facility sales, 1,200 - 60% 60% Yes (1,494,074) 1,494,074
Management maintenance, property leasing
Ltd. and agency
Zhangzhou
Property
CM Property development and Not
Ltd. liability Zhangzhou develop RMB40,000 38,448 - 100% 100% Yes Not applicable
Honglong sales applicable
ment
Property Ltd.
Foshan
Property
Xincheng Property development, sales,
Ltd. liability Foshan develop USD127,000 478,690 - 50% 50% Yes 527,333,870 -
Property Co., and services
ment
Ltd. (Note 1)
71
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
Huipeng
Property Property
Property development, sales,
Development Ltd. liability HK develop HKD 10 5 - 50% 50% Yes (40,760,870) 40,760,870
and services
Co., Ltd. ment
(Note 1)
Suzhou
Property
Shuanghu Property development, sales,
Ltd. liability Suzhou develop USD244,000 867,300 - 50% 50% Yes 798,292,001 69,007,999
Property Co., and services
ment
Ltd. (Note 1)
Tianjing
Property
Zhaosheng Property development, sales, Not
Ltd. liability Tianjin develop RMB30,000 30,000 - 100% 100% Yes Not applicable
Property Co., and services applicable
ment
Ltd.
72
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(IV) Merger of enterprises and consolidated financial statements – cont.
1. Particulars of the subsidiaries – cont.
(1) Subsidiaries acquired through incorporation or investment – cont.
Balance of Amount of
other items minor
actually shareholders’
Actual formed net equity used
capital input investment to offset the
Registered as of end of in the Share Minor gain/loss of
Full name of the Ownership of Reg. Business capital term subsidiarie proporti Voting Consolid shareholders’ minor
subsidiary the subsidiary Add. property RMB’000 Business Scope (RMB’000) s on % power % ated? equity (RMB) shareholders
Shenzhen CM
Anye Investment Shenzh Investmen Industrial investment,
Ltd. liability RMB10,000 5,100 - 51% 51% Yes 2,856,887 2,043,113
Development Co., en t domestic commerce
Ltd.
Shanghai CM Property Property development,
Shangh Not
Minsheng Ltd. liability developm RMB30,000 interior decoration, trade 30,000 - 100% 100% Yes Not applicable
ai applicable
Property Ltd. ent of construction materials
Shanghai CM Property Property development,
Shangh Not
Fengsheng Ltd. liability developm RMB30,000 interior decoration, trade 30,000 - 100% 100% Yes Not applicable
ai applicable
Property Ltd. ent of construction materials
Construction engineering,
Shenzhen CM Property decoration, elevator, air
Shenzh Not
Construction Co., Ltd. liability developm RMB150,000 conditioner maintaining, 150,000 - 100% 100% Yes Not applicable
en applicable
Ltd. ent sales of construction
materials
Suzhou CM Property
Property development,
Nanshan Property Ltd. liability Suzhou developm RMB100,000 60,000 - 60% 60% Yes 92,041,576 -
sales, and services
Co., Ltd. ent
Guangzhou Qidi
Property
Tech & Science Guang
Ltd. liability developm RMB30,000 Venture Investment 21,777 - 72.59% 72.59% Yes 4,786,544 3,436,456
Investment Co., zhou
ent
Ltd.
Foshan Xinjie Property
Property development, Not
Property Co., Ltd. Ltd. liability Foshan developm USD219,800 1,511,578 - 100% 100% Yes Not applicable
sales, and services applicable
(Note 1) ent
British
Heighten Holdings Investmen Not
Ltd. liability Virgin USD0.002 Investment 11 - 100% 100% Yes Not applicable
Limited t applicable
Island
Converage Ltd. liability British Investmen USD0.002 Investment 11 - 100% 100% Yes Not applicable Not
73
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
Holdings Limited Virgin t applicable
Island
China Merchants Property development,
Property
Properties Chong interior decoration Not
Ltd. liability developm RMB30,000 30,000 - 100% 100% Yes Not applicable
(Chongqing) Co., qing service, trade of applicable
ent
Ltd. construction materials
74
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(IV) Merger of enterprises and consolidated financial statements – cont.
1. Particulars of the subsidiaries – cont.
(1) Subsidiaries acquired through incorporation or investment – cont.
Amount of
Actual Balance of minor
capital other items shareholders’
input as actually equity used to
of end of formed net offset the
Registered term investment in Share Minor gain/loss of
Full name of the Ownership of the Reg. Business capital (RMB’0 the proportion Voting Consol shareholders’ minor
subsidiary subsidiary Add. property RMB’000 Business Scope 00) subsidiaries % power % idated? equity (RMB) shareholders
China Merchants
Jiaming Property development,
Property
(Beijing) interinal decoration service,
Ltd. liability Beijing develop RMB350,000 175,000 - 50% 50% Yes 231,246,948 5,895,183
Property trade of construction
ment
Development materials
Co., Ltd.
Shenzhen CM
Developing of commercial
Commercial Property
Shenzhe property, operation,
Development Ltd. liability develop RMB100,000 100,000 - 51% 51% Yes 47,647,377 1,333,438
n management, leasing,
Co., Ltd. ment
investment in industry
(Note 3)
Beijing
Property development, sales
Kanglade Property
of its products, hotel
Property Ltd. liability Beijing develop RMB30,000 18,000 - 60% 60% Yes 9,125,898 2,874,102
development, import & export
Development ment
of goods and technologies
Co., Ltd.
Shenzhen China
Special measurement
Merchants
Shenzhe Power technologies authorized by Not
Electric Power Ltd. liability RMB1,500 1,500 - 100% 100% Yes Not applicable
n supply Shenzhen Quality and applicable
Measurement
Technical Supervisory Bureau
Co., Ltd.
Chengdu China
Property Property development, project
Merchants Beihu Not
Ltd. liability Chengdu develop RMB50,000 investment, property agency, 50,000 - 100% 100% Yes Not applicable
Property Co., applicable
ment and management service
Ltd.
Tianjin Gangwei
Property Property development, sales,
Property Not
Ltd. liability Tianjin develop RMB15,000 leasing, management and 15,000 - 100% 100% Yes Not applicable
Development applicable
ment information service
Co., Ltd.
75
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
Shenzhen China
Property Property development,
Merchants OCT Shenzhe
Ltd. liability develop RMB100,000 management, agency, and 50,000 - 50% 50% Yes 240,710,341 -
Investment Co., n
ment decoration
Ltd. (Note 2)
British
Pride Oasis Investme
Ltd. liability Virgin USD0.002 Investment 0.007 - 50% 50% Yes 55,061,750 -
Limited (Note 1) nt
Island
Chongqing
China Merchants
Property
Property Chongqi Developing, leasing, sales and Not
Ltd. liability develop USD399,960 2,712,784 - 100% 100% Yes Not applicable
Development ng management of property applicable
ment
Co., Ltd. (Note
4)
76
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(IV) Merger of enterprises and consolidated financial statements – cont.
1. Particulars of the subsidiaries – cont.
(1) Subsidiaries acquired through incorporation or investment – cont.
Balance of
other
items Amount of
Actual actually minor
capital formed shareholders’
input as net equity used to
Busine of end investmen offset the
ss Registered of term t in the Share Minor gain/loss of
Full name of the Ownership of Reg. propert capital (RMB’0 subsidiari proportion Voting Consol shareholders’ minor
subsidiary the subsidiary Add. y RMB’000 Business Scope 00) es % power % idated? equity (RMB) shareholders
Cosmo City Invest Not
Ltd. liability HK USD0.002 Investment 0.013 - 100% 100% Yes Not applicable
Limited ment applicable
Propert
Property development, property
Chengdu CM y Not
Ltd. liability Chengdu RMB10,000 management, project 10,000 - 100% 100% Yes Not applicable
Property Co., Ltd. develo applicable
investment , property agency
pment
Foshan CM Propert
Property development, property
Huidefeng y
Ltd. liability Foshan USD99,900 management, project 340,978 - 50% 50% Yes 340,326,933 651,068
Property Co., Ltd. develo
investment , property agency
(Note 1) pment
Shanghai Jingyuan Propert
Property development, rent of
Property y
Ltd. liability Shanghai RMB555,000 properties, property 279,000 - 55% 55% Yes 247,442,187 2,307,813
Development Co., develo
management, interior decoration
Ltd. (Note 5) pment
Propert
Foshan Yiyun Property development,
y
Property Co., Ltd. Ltd. liability Foshan RMB30,000 construction, sales, rent, and 15,000 - 50% 50% Yes 14,696,159 4,462
develo
(Note 6) property management
pment
Propert
Yunnan CM Property development, sales,
y
Chengtou Property Ltd. liability Kunming RMB10,000 rent, decoration, agency, 6,000 - 60% 60% Yes 3,970,196 29,804
develo
Co., Ltd. property management
pment
Fujan Property development, property
Propert
Zhongliansheng rent and sales, property
y
Property Ltd. liability Xiamen RMB50,000 management, construction 25,000 - 50% 50% Yes 22,879,161 2,120,839
develo
Development Co., works, interior decoration, rent
pment
Ltd. (Note 7) of construction equipment
77
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
Property development, rent and
Propert
sales, property service,
CM Property y Not
Ltd. liability Xiamen RMB50,000 construction works, interior 50,000 - 100% 100% Yes Not applicable
Xiamen Co., Ltd. develo applicable
service, sales of construction
pment
materials
Chengdu CM Propert
Property development, project
Beicheng Property y Not
Ltd. liability Chengdu RMB10,000 investment, property agency, 10,000 - 100% 100% Yes Not applicable
Development Co., develo applicable
and management service
Ltd. pment
78
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(IV) Merger of enterprises and consolidated financial statements – cont.
1. Particulars of the subsidiaries – cont.
(1) Subsidiaries acquired through incorporation or investment – cont.
Balance of
other
items Amount of
Actual actually minor
capital formed shareholders’
input as of net equity used to
Busine end of investmen offset the
ss Registered term t in the Share Minor gain/loss of
Full name of the Ownership of Reg. propert capital (RMB’00 subsidiari proportion Voting Consol shareholders’ minor
subsidiary the subsidiary Add. y RMB’000 Business Scope 0) es % power % idated? equity (RMB) shareholders
Nanjing China
Propert
Merchants Property development,
y Not
Ruisheng Property Ltd. liability Nanjin RMB30,000 property management, project 30,000 - 100% 100% Yes Not applicable
develo applicable
Co., Ltd. investment , property agency
pment
(Note 8)
China Merchants Propert
Property development,
Property (Wuhan) y Not
Ltd. liability Wuhan RMB30,000 property management, project 30,000 - 100% 100% Yes Not applicable
Co., Ltd. develo applicable
investment , property agency
(Note 9) pment
Yingze
Development Co., Invest Not
Ltd. liability HK HKD 10 Investment 0 - 100% 100% Yes Not applicable
Ltd. ment applicable
(Note 10)
China Merchants
Propert
Property Property development,
Zhenjian y Not
(Zhenjiang) Co., Ltd. liability RMB50,000 property management, project 50,000 - 100% 100% Yes Not applicable
g develo applicable
Ltd. investment , property agency
pment
(Note 11)
Zhenjiang
Yingsheng Propert
Property development,
Property Zhenjian y Not
Ltd. liability USD93,000 property management, project 600,651 - 100% 100% Yes Not applicable
Development Co., g develo applicable
investment , property agency
Ltd. pment
(Note 12)
Shenzhen China
Propert
Merchants Property development,
y Not
Shangzhi Ltd. liability Shenzhen RMB200,000 property management, project 2,076,481 - 100% 100% Yes Not applicable
develo applicable
Investment Co., investment , property agency
pment
Ltd.
79
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(Note 13)
Tianjin China Propert
Property development,
Merchants Taida y Not
Ltd. liability Tianjin RMB30,000 property management, project 18,000 - 60% 60% Yes 12,000
Property Co., Ltd. develo applicable
investment , property agency
(Note 14) pment
(IV) Merger of enterprises and consolidated financial statements – cont.
1. Particulars of the subsidiaries – cont.
(2) Subsidiaries acquired from merger of enterprises under common control
Amount of
Balance of minor
other items shareholders’
Actual actually equity used
capital formed net to offset the
Ownership of Registered input as of investment Minor gain/loss of
Full name of the the Business capital end of term in the Share Voting shareholders’ minor
subsidiary subsidiary Reg. Add. property RMB’000 Business Scope (RMB’000) subsidiaries proportion % power % Consolidated? equity (RMB) shareholders
Shenzhen CM Property
Property Not
Property Co., Ltd. liability Shenzhen RMB300,000 development and 1,415,831 - 100% 100% Yes Not applicable
development applicable
Ltd. (Note 13) sales
Shenzhen CM
Power Power supply and Not
Power Supply Ltd. liability Shenzhen RMB57,000 592,978 - 100% 100% Yes Not applicable
supply sales applicable
Co., Ltd.
Zhangzhou
China Property
Property
Merchants Ltd. liability Zhangzhou RMB250,000 development and 127,500 - 51% 51% Yes 166,514,413 -
development
Properties Co., sales
Ltd.
Shenzhen
Hotel
Shekou Sea
Hotel management,
World Hotel Ltd. liability Shenzhen RMB30,000 15,314 - 51% 51% Yes 14,443,156 271,215
management export of goods
Management
and technologies
Co., Ltd.
China Property
Merchants management, Not
Ltd. liability Shenzhen Property RMB25,000 169,200 - 100% 100% Yes Not applicable
Property decoration, applicable
Management consultancy,
80
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
Co., Ltd. property facility
sales,
maintenance,
property leasing
and agency
Shanghai China Property
Merchants Property development, Not
Ltd. liability Shanghai RMB30,000 30,000 - 100% 100% Yes Not applicable
Real-estates Co., development sales, and applicable
Ltd. services
81
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(IV) Merger of enterprises and consolidated financial statements – cont.
1. Particulars of the subsidiaries – cont.
(3) Subsidiaries acquired from merger of enterprises under different control
Amount of
Balance of minor
other items shareholders’
Actual actually equity used to
capital formed net Minor offset the
Registered input as of investment shareholders’ gain/loss of
Full name of Ownership of Business capital (x end of term in the Share Voting equity minor
the subsidiary the subsidiary Reg. Add. property 1000) Business Scope (RMB’000) subsidiaries proportion % power % Consolidated? (RMB) shareholders
Property
development,
Shanghai CM interior
Property Not Not
Fengrui Ltd. liability Shanghai RMB10,000 decoration 10,000 - 100% 100% Yes
development applicable applicable
Property Ltd. service, trade of
construction
materials
Zhuhai China
Property
Merchants Property Not Not
Ltd. liability Zhuhai RMB8,000 development and 8,000 - 100% 100% Yes
Property Co., development applicable applicable
sales
Ltd.
Zhuhai
Property
Yuanfeng Property
Ltd. liability Zhuhai RMB8,000 development and 4,080 - 51% 51% Yes 109,447,898 -
Property Co., development
sales
Ltd.
Shanghai
Fengyang Property
Property
Property Ltd. liability Shanghai RMB30,000 development and 353,250 - 60% 60% Yes 267,804,077 -
development
Development sales
Co., Ltd.
Shenzhen
Property
Meiyue
Property consultancy, Not Not
Properties Ltd. liability Shenzhen RMB1,000 88,287 - 100% 100% Yes
development planning and applicable applicable
Consultants
brokerage
Co., Ltd.
Shenzhen City Industry and
Not Not
Main Plaza Ltd. liability Shenzhen Investment RMB10,000 domestic - - 100% 100% Yes
applicable applicable
Investment Co., commerce
82
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
Ltd.
83
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(IV) Merger of enterprises and consolidated financial statements – cont.
1. Particulars of the subsidiaries – cont.
Note 1: Through its subsidiary Eureka Investment & Industry Co., Ltd., the Company is holding
50% of the equity capital of Foshan Xincheng Real Estate Co., Ltd., Huipeng Real Estate
Co., Ltd., Suzhou Shuanghu Real Estate Co., Ltd., Pride Oasis Limited, Foshan China
Merchants Defeng Property 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
incorporates them in the consolidate range of the consolidated financial statements. As for
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 incorporated into the
consolidation range.
Note 2: The Company respectively holds 50% equity capital of China Merchants Jiaming (Beijing)
Property Co., Ltd. through Shenzhen CM Property Co., Ltd. Because the Group holds
major voting rights in the board of China Merchants Jiaming (Beijing) Property Co., Ltd.,
controls the financial and business decisions, thus the Group incorporates it into the range
of consolidated financial statements.
Note 3: In January 2011, Shenzhen China Merchants Business Development Co., Ltd. increased
its capital. Its registered capital was increased from RMB51 million to RMB100 million.
The increased capital was inputted in one payment of cash by Shenzhen Marine World
Industrial Development Co., Ltd. Upon completion of this, the Company is still holding
51% equity of Shanghai Jingyuan Property Development. Therefore the Company is
holding substantial power on financial and business decisions of the company, and it was
included in the consolidated financial statements.
Note 4: In May 2011, Cosmo City Limited – one of the subsidiaries of the Company, increased its
investment in Chongqing China Merchants Property Development Co., Ltd. by USD50
million. Cosmo City Limited still holds 100% of its equity. Therefore Chongqing China
Merchants Property Development Co., Ltd. was incorporated in the consolidated financial
statements.
84
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(IV) Merger of enterprises and consolidated financial statements – cont.
1. Particulars of the subsidiaries – cont.
Note 5: In february 2011, Shanghai Jingyuan Property Development Co., Ltd. increased its capital.
Its registered capital was increased from RMB30 million up to RMB555 million. Shanghai
China Merchants Property Co., Ltd. and Shanghai Langda Industry Co., Ltd. inputted
capital in original share portions. Upon completion of this, the Company is still holding
55% equity of Shanghai Jingyuan Property Development. Therefore the Company is
holding substantial power on financial and business decisions of the company, and it was
incorporated in the consolidated financial statements.
Note 6: The Company invested through Guangzhou China Merchants Real-Estate Co., Ltd. to
take 50% of capital shares of Foshan Yiyun Property 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 incorporated in the
consolidation range.
Note 7: Fujian Zhongliansheng Property Development Co., Ltd. was founded by the Company
and Guangzhou Jindi Property Development Co., Ltd., in which the Company is holding
50% of the capital shares. For the Company is holding the majority votes in the board of
Fujian Zhongliansheng Property Development Co., Ltd., thus it has practical control over
the financial and business decisions of the company. Therefore the Company includes it
in the consolidated financial statements.
Note 8: In January 2011, China Merchants Property (Nanjing) Co., Ltd. invested to establish
Nanjing China Merchants Ruisheng Property Co., Ltd. with registered capital of RMB30
million. The Company is indirectly holding 100% of the equity and voting power over
this company, therefore it is incorporated in the consolidated financial statements.
Note 9. In February 2011, the Company invested to establish China Merchants Property (Wuhan)
Co., Ltd. with registered capital of RMB30 million. The Company is holding 100% of the
equity and voting power over this company, therefore it is incorporated in the
consolidated financial statements.
Note 10. In February 2011, Hong Kong Eureka Investment – one of the subsidiaries of the
Company invested to establish Yingze Development Co., Ltd. with registered capital of
HKD10 thousand. The Company is holding 100% of the equity and voting power over
this company, therefore it is incorporated in the consolidated financial statements.
Note 11: In March 2011, the Company invested to establish China Merchants (Zhenjiang) Co.,
Ltd. with registered capital of RMB50 million. The Company is holding 100% of the
equity and voting power over this company, therefore it is incorporated in the
consolidated financial statements.
Note 12. In May 2011, Yingze Development Co., Ltd. – the subsidiary of the Company, and the
Company invested jointly to setup Zhenjiang Yingsheng Property Development Co., Ltd.
with registered capital of USD93 million, in which Yingze Development Co., Ltd.
invested USD92.07 million and take 99% of the share equity; the Company invested
85
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
USD930 million and take 1% of the equity. The Company and the subsidiary is jointly
holding 100% of the equity and voting power over this company, therefore it is
incorporated in the consolidated financial statements.
Note 13. In March 2011, by means of derivate split, Shenzhen China Merchants Property Co., Ltd.
was split to Shenzhen China Merchants Property Co., Ltd. (registered capital: RMB300
million) and the newly incorporated Shenzhen China Merchants Property Investment Co.,
Ltd. (registered capital: RMB200 million). The Company is holding 100% of the equity
and voting power over this company, therefore it is incorporated in the consolidated
financial statements.
Note 14: Tianjin China Merchants Taida Property Co., Ltd., was founded by the Company’s
subsidiary Shenzhen China Merchants Property Co., Ltd. and Tianjin Taida Development
Co., Ltd., in which the Company is holding 60% of the capital shares. For the Company
is holding the majority votes in the board of Tianjin China Merchants Taida Property Co.,
Ltd., thus it has practical control over the financial and business decisions of the company.
Therefore the Company includes it in the consolidated financial statements.
(IV) Merger of enterprises and consolidated financial statements – cont.
2. Entities newly consolidated in current term
RMB Yuan
Name Net asset at end of Net profit of the
term current term (loss)
Zhenjiang Yingsheng Property Development 600,534,115 (117,359)
Co., Ltd.
China Merchants Property (Zhenjiang) Co., Ltd. 49,868,176 (131,824)
Nanjing China Merchants Ruisheng Property 30,031,890 31,890
Co., Ltd.
China Merchants Property (Wuhan) Co., Ltd. 29,826,130 (173,870)
Shenzhen China Merchants Shangzhi 2,333,779,991 216,331,570
Investment Co., Ltd.
Yingze Development Co., Ltd. 13,906,056 13,897,547
Tianjin China Merchants Taida Property Co., 30,000,000 -
Ltd.,
86
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(V) Notes to the consolidated financial statements
1. Monetary fund
RMB Yuan
End of term Beginning of term
Original Exchange Amount Original Exchange Amount
Items currency rate RMB currency rate RMB
Cash:
RMB 99,949 1.00 99,949 53,947 1.00 53,947
HKD 4,244 0.83 3,530 6,069 0.85 5,164
Bank account:
RMB 7,609,327,445 1.00 7,609,327,445 8,214,811,543 1.00 8,214,811,543
USD 44,216,925 6.47 286,154,253 104,384,274 6.62 690,772,033
HKD 14,135,477 0.83 11,755,062 10,521,355 0.85 8,952,621
Other monetary fund
(Note)
USD 8,356,665 6.47 54,080,994 10,088,740 6.62 66,738,549
RMB 1,006,291,205 1.00 1,006,291,205 695,051,195 1.00 695,051,195
Total 8,967,712,438 9,676,385,052
Note: Balance of other monetary capital was mainly prepayment for property, deposits of foreign
currency future contracts and guarantee letters of project payment.
2. Transactional financial assets / liabilities
Details of transactional financial assets/liabilities:
RMB Yuan
Fair value at beginning of
Items Fair value at end of term 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 2,640,628(Note) 846,539
5. Hedge instruments - -
6. Others - -
Total 2,640,628 846,539
Transactional financial liabilities:
1. Transactional bond investment - -
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 7,218,100(Note) 20,824,615
5. Others - -
Total 7,218,100 20,824,615
87
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(V) Notes to the consolidated financial statements – cont.
2. Transactional financial assets / liabilities – cont.
Note: This was the fair value at end of the contract year by which Eureka 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, 2011, the nominal principal has amounted to
USD180,000,000 (December 31, 2010: USD353,410,000). Such contracts will due amongst
the period from October 12, 2011 to April 30, 2012.
3. Account receivable
(1) Account receivable categorized by property
RMB Yuan
End of term Beginning of term
Book balance Bad debt provision Book balance Bad debt provision
Propo Propo Propo Propo
rtion rtion rtion rtion
Categories Amount % Amount % Amount % Amount %
Single receivable account with mass
amount - - - - - - - -
(note)
No major amount individually but with
great risk after combined with others 3,502,304 4 2,915,689 83 5,350,608 5 4,001,444 75
with similar credit risk
Other non-material receivables 94,783,873 96 6,491,935 7 106,667,364 95 5,413,435 5
Total 98,286,177 100 9,407,624 10 112,017,972 100 9,414,879 8
Note: Single receivable account with mass amount is defined to account over RMB10 milion.
Ages of receivable accounts:
RMB Yuan
End of term Beginning of term
Bad debt Bad debt
Age Amount Proportion % provision Book value Amount Proportion % provision Book value
within 1 yr 88,751,840 90 5,521,722 83,230,118 97,589,029 86 3,748,574 93,840,455
1-2 years 2,918,859 3 142,392 2,776,467 8,485,365 8 1,083,870 7,401,495
2-3 years 3,113,174 3 827,821 2,285,353 592,970 1 580,990 11,980
Over 3 yrs 3,502,304 4 2,915,689 586,615 5,350,608 5 4,001,445 1,349,163
Total 98,286,177 100 9,407,624 88,878,553 112,017,972 100 9,414,879 102,603,093
(2) No balance in the account receivable due from shareholders holding 5% or over of the
Company’s shares.
(3) Top 5 receivable accounts
RMB Yuan
Portion in total
Name of the companies Amount Ages receivables
Client I 6,674,615 within 1 yr 7
Client II 5,568,797 within 1 yr 6
Client III 2,376,283 Over 2 yrs 2
Client IV 1,890,000 within 1 yr 2
Client V 1,800,000 within 1 yr 1
Total 18,309,695 18
(4) No accounts receivable due from related parties.
88
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(V) Notes to the consolidated financial statements – cont.
4. Other account receivable.
(1) Other account receivable categorized by property
RMB Yuan
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 4,156,121,234 97 - - 3,930,452,175 95 - -
amount
(Note)
No major
amount
individually but
with great risk
14,623,648 - 2,237,391 15 6,486,798 - 2,083,365 32
after combined
with others with
similar credit
risk
Other minor
other 109,933,122 3 1,832,147 2 211,842,064 5 1,983,535 1
receivables
Total 4,280,678,004 100 4,069.538 - 4,148,781,037 100 4,066,900 -
Note: Note: SingleotherreceivableaccountwithmassamountisdefinedtoaccountoverRMB10million.
Age of other receivable accounts:
RMB Yuan
End of term Beginning of term
Propo
Propor Bad debt Bad debt
Amount Book value Amount rtion Book value
tion % provision provision
Age %
within 1 yr 3,878,584,858 91 346,458 3,878,238,400 3,221,925,971 77 186,740 3,221,739,231
1-2 years 278,411,120 6 820,467 277,590,653 899,212,085 22 940,655 898,271,430
2-3 years 109,058,378 3 665,222 108,393,156 21,156,183 1 856,140 20,300,043
Over 3 yrs 14,623,648 - 2,237,391 12,386,257 6,486,798 - 2,083,365 4,403,433
Total 4,280,678,004 100 4,069,538 4,276,608,466 4,148,781,037 100 4,066,900 4,144,714,137
(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
RMB Yuan
Portion in total other
Name of the companies Relation with the Company Amount Ages receivables (%)
Client I Non-related 1,493,471,702 within 1 yr 35
Client II Affiliate of the Company 672,924,122 within 1 yr 16
Client III Shareholder of subsidiary 639,324,894 within 1 yr 15
Client IV Non-related 360,000,000 within 1 yr 8
Client V Affiliate of the Company 227,159,525 1-2 years 5
Total 3,392,880,243 79
(4) Receivables from related parties
RMB Yuan
Relation with the Portion in total other
Name of the companies Company Amount receivables (%)
89
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
Foshan China Merchants Longyuan Affiliate of the 672,924,122 16
Property Co., Ltd. Company
Shenzhen TCL Optical-Electronics Affiliate of the 227,159,525 5
Technologies Ltd. Company
Total 900,083,647 21
(V) Notes to the consolidated financial statements – cont.
5. Inventories
(1) Categories of inventory
RMB Yuan
End of term Beginning of term
Impairment Impairment
Items Book balance provision Book value Book balance provision Book value
Real property
41,940,052,016 296,210,000 41,643,842,016 36,376,901,757 296,210,000 36,080,691,757
development costs
Property products 2,729,379,502 - 2,729,379,502 2,524,202,875 - 2,524,202,875
Raw materials 4,314,642 - 4,314,642 4,292,763 - 4,292,763
Low-value consumables
4,899,899 162,982 4,736,917 2,322,998 162,982 2,160,016
and others
Sub-total 44,678,646,059 296,372,982 44,382,273,077 38,907,720,393 296,372,982 38,611,347,411
Inventory formed by
construction contract
Completed but not settled
88,000,000 - 88,000,000 88,000,000 - 88,000,000
(Note)
Sub-total 88,000,000 - 88,000,000 88,000,000 - 88,000,000
Total 44,766,646,059 296,372,982 44,470,273,077 38,995,720,393 296,372,982 38,699,347,411
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. Beijing Xicheng Jiayuan project has been completed but payment not cleared.
Property development costs:
Expected total Balance at the Balance at the end
Start Planned investment beginning of term of term
Projects date finish date RMB0’000 RMB Yuan RMB Yuan
Development costs of real estate under
construction:
Zhenjiang Dadong Project 2011.05 2015.11 597,110 - 3,058,541,166
Shanghai Sheshan Longyuan Project 2010.10 2013.12 303,342 1,871,326,873 2,083,098,122
Nanjing G54 project 2011.05 2013.07 328,236 - 1,870,001,688
Shenzhen CM Guanyuan 2008.08 2011.10 195,073 1,564,201,188 1,687,773,326
Chengdu China Merchants Yonghuafu
(original Chengdu Chenghuaqu Zhaojuesi 2011.05 2013.04 384,231 - 1,661,817,567
Road South project)
Foshan Yiyunshui’an 2008.04 2012.12 324,049 1,428,916,623 1,633,672,097
Foshan Yiyun Shangcheng 2008.08 2013.08 274,271 1,857,000,180 1,630,359,908
Nanjing G67 project 2010.08 2012.11 234,919 1,514,628,824 1,629,803,340
Beijing Xicheng Home and Longyuan
Projects 2008.10 2013.05 540,555 1,484,891,572 1,546,263,883
Chongqing CM Garden City 2010.10 2015.05 425,195 1,353,107,713 1,407,598,462
Suzhou Xiaoshicheng 2008.04 2016.12 538,344 1,275,198,927 1,376,633,104
Shenzhen Yongjinwan 2009.07 2012.08 176,059 1,111,636,624 1,261,555,127
Jinshan Valley, Guangzhou 2008.02 2016.03 482,973 1,078,338,580 1,251,595,683
90
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
Foshan Yiyun Tianhui 2011.02 2015.06 228,192 - 1,213,715,218
Shenzhen Xicheng phase IV, V 2010.02 2012.10 220,661 1,821,242,252 1,136,631,594
Xiamen Jimei P01 Project 2011.03 2014.06 256,949 - 1,085,621,209
Xiamen Jimei P08 Project 2011.03 2014.08 238,435 - 1,082,509,146
Suzhou Yongjingwan 2011.03 2013.04 214,234 - 1,077,396,865
(V) Notes to the consolidated financial statements – cont.
5. Inventories – cont.
Cost of property development - continues
Expected total Balance at the Balance at the end
Start Planned investment beginning of term of term
Projects date finish date RMB0’000 RMB Yuan RMB Yuan
Tianjin Star City 2007.10 2014.09 356,494 1,389,194,614 935,230,957
Shanghai Haide Garden phase II and IV 2006.05 2013.08 150,842 841,406,982 889,051,193
Tianjing Yonghuafu Project 2010.03 2012.06 129,031 754,907,374 833,311,559
Zhangzhou Kadalansi 2010.12 2020.07 363,103 706,876,674 819,615,337
Foshan Yunxi Town 2010.12 2015.06 218,372 719,491,596 777,481,522
Zhuhai CM Garden City Phase II and III 2009.12 2012.12 151,667 608,624,656 701,842,529
Shanghai CM Haiwan Garden 2008.10 2013.12 163,139 781,851,979 658,142,630
Shenzhen CM Guoling Garden 2010.05 2013.05 143,588 498,973,326 654,493,652
Shanghai CM Yonghua Garden 2008.07 2011.09 132,539 566,644,098 653,070,407
Beijing Park 1872 2006.10 2013.12 422,646 708,620,374 620,961,748
Shenzhen CM Plaza 2010.06 2012.11 121,232 524,210,113 594,918,211
Beijing Kanglade Hotel 2009.12 2012.06 120,419 520,783,345 565,782,536
Shenzhen Xicheng Phase VI 2011.02 2012.08 82,814 - 557,420,245
Chongqing China Merchants, Jiangwan
Town 2007.10 2013.10 209,617 819,190,312 531,711,148
Shenzhen Wuzi Apartment 2010.04 2012.12 75,530 368,973,403 426,228,862
Chengdu CM Dongcheng International
Business Plaza 2010.12 2012.09 60,255 236,957,219 277,716,989
Shenzhen Ship-front Plaza 2010.10 2012.04 39,977 7,624,267 177,573,847
Zhangzhou CM Garden City 2008.07 2012.11 65,806 144,340,564 164,822,254
Zhangzhou Holiday 365 2010.07 2013.12 44,205 103,562,309 122,679,534
Shenzhen Jingshan Phase IX 2011.05 2014.04 328,268 8,434,400 71,842,865
Shenzhen Sanyo Workshop 2# and 6#
reconstruction 2010.07 2011.07 8,350 40,460,923 66,438,138
Shenzhen Marine World Hotel 2010.12 2013.02 83,903 6,823,777 45,495,708
Shenzhen Ship-tail Plaza 2010.12 2012.06 41,488 479,981 27,410,248
Shenzhen Behind-ship Plaza 2011.04 2012.09 29,960 381,149 23,426,098
Shenzhen Lanxigu phase III 2008.08 2011.05 29,115 206,523,541 -
Zhangzhou CM Garden City Phase I 2008.12 2011.05 68,467 561,120,439 -
Others 38,101,774 93,633,443
Sub-total 27,525,048,545 38,984,889,165
Land to be developed:
Chongqing Danzishi Project 2011.07 2019.10 1,311,183 2,352,153,521 2,539,815,467
Wuhan P022 project 2011.07 2013.07 107,600 - 415,347,384
Chengdu China Merchants Yonghuafu
(original Chengdu Chenghuaqu Zhaojuesi 2011.05 2013.04 384,231 1,607,896,500 -
Road South project)
Foshan Yiyun Tianhui 2011.02 2015.06 228,192 1,140,786,275 -
Xiamen Jimei P01 Project 2011.03 2014.06 256,949 1,043,671,317 -
Suzhou Yongjingwan 2011.03 2013.04 214,234 1,036,497,375 -
91
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
Xiamen Jimei P08 Project 2011.03 2014.08 238,435 1,028,657,965 -
Shenzhen Xicheng Phase VI 2011.02 2012.08 82,814 549,490,259 -
Zhangzhou Kadakaisi Hotel 2011.03 2012.04 30,602 92,700,000 -
Sub-total 8,851,853,212 2,955,162,851
Total 36,376,901,757 41,940,052,016
92
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(V) Notes to the consolidated financial statements – cont.
5. Inventories – cont.
Property development products:
RMB Yuan
Balance at the
beginning of Increased this Decreased this Balance at the
Projects Date of finish term term term end of term
Shenzhen Xicheng Phase IV 2011.06 - 925,907,607 280,750,799 645,156,808
Beijing Park 1872, phase I, II 2011.06 673,895,625 383,882,751 713,563,064 344,215,312
Beijing Xicheng Jiayuan 2010.09 365,750,246 - 56,363,597 309,386,649
Zhangzhou CM Garden City
Phase I 2011.05 - 654,514,748 401,546,584 252,968,164
Shenzhen Lanxigu phase III 2011.05 - 291,153,146 55,250,105 235,903,041
Chongqing China Merchants
Jiangwan City 2011.03 75,676,058 434,310,900 326,725,832 183,261,126
Shanghai Haide Garden Phase
I to III 2010.12 238,291,732 - 76,490,351 161,801,381
Guangzhou Jinshangu Phase II,
III 2010.05 95,471,774 - 1,959,979 93,511,795
Shanghai CM Haiwan Garden 2011.03 - 184,688,513 91,594,989 93,093,524
Shenzhen CM Lanyuan 2010.06 321,382,065 - 242,845,508 78,536,557
Shenzhen Xicheng Phase III 2010.03 56,481,438 - - 56,481,438
Shenzhen Lanxigu Phase II. 2007.06 106,463,463 - 51,177,990 55,285,473
Tianjin Star City 2011.03 - 534,679,854 495,147,023 39,532,831
Nanjing Yunxigu 2009.12 174,052,830 - 148,261,729 25,791,101
Foshan Yiyunshui’an 2010.06 54,094,313 - 30,311,221 23,783,092
Shanghai CM Yonghua Garden 2010.02 24,975,132 - 3,362,355 21,612,777
Suzhou Xiaoshicheng phase I
to III 2010.12 75,273,267 - 55,437,300 19,835,967
Shenzhen Yishanjun phase II,
III 2009.10 14,910,467 - - 14,910,467
Phase V. Garden City 2010.11 52,272,781 - 39,519,742 12,753,039
Zhangzhou Sun Garden Phase
I 2006.06 11,479,422 - - 11,479,422
Zhangzhou CM Garden City 2009.12 101,603,058 - 92,166,986 9,436,072
Zhangzhou CM Jianzhu 2007.12 7,347,721 - - 7,347,721
Shenzhen Haiyue Huating 2009.09 8,043,595 - 1,028,212 7,015,383
Zhangzhou Yinshanhai Phase
II 2007.12 5,023,065 - - 5,023,065
36 Xikang Road Tianjin 2009.11 37,861,640 17,179,435 52,103,470 2,937,605
Zhangzhou Jinshanjiao
Apartment 2004.12 1,439,657 - - 1,439,657
Shanghai CM Nanqiao Yayuan 2010.01 5,521,635 - 4,907,353 614,282
Foshan Yiyun Shangcheng 2011.06 342,945,678 342,945,678 -
Others 16,891,891 - 626,138 16,265,753
Total 2,524,202,875 3,769,262,632 3,564,086,005 2,729,379,502
93
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(V) Notes to the consolidated financial statements – cont.
5. Inventories – cont.
Property development products: - continues
Note 1: As of June 30, 2011, China Merchants Jiaming (Beijing) Property Development Co., Ltd.
– one of the subsidiaries of the Company, entered the Pledge Contract with the bank, by
which the 106,700 square meters of land of Beijing Xicheng Jiayuan (Land CY-09 in
Dongxiaokou Town, Changping) was pledged to the bank for the loan of RMB139, 000,000.
Except for this, there is no inventory under pledge, guarantee, suspension, or abandoned.
Note 2: As of June, 30, the land using agreements for Chongqing Danzishi Project, and Xiamen
Jimei P08 totaled to 427,844 square meters has been engaged, and the land using certificate
is under process.
Loan expense capitalized in current year was RMB230, 191,509 (2010: RMB267, 277,090).
(2) Inventory impairment provision
RMB Yuan
Balance of book Decreased this term Balance of
value at beginning Provided this book value at
Categories of term term Written back Transferred 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.
6. Other current assets
RMB Yuan
Items End of term Beginning of term
Operation tax and surcharges prepaid 612,007,427 476,534,168
Prepaid income tax 684,028,846 283,586,580
Prepaid land VAT (Note) 237,801,778 192,505,466
Prepaid rent 2,242,028 8,968,112
Others 18,013,393 18,944,348
Total 1,554,093,471 980,538,674
Note: 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.
94
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(V)Notes to the consolidated financial statements – cont.
7. Long-term receivables
RMB Yuan
Items Beginning of
End of term
term
Entrusted loan (Note 1) 1,148,636,986 1,115,590,052
Balance of share equity transfer (Note 2) 148,976,670 145,147,393
Total 1,297,613,656 1,260,737,445
Note 1: In November 2008, the Company entered the Entrusted Loan Contract with China
Agriculture Bank Nanshan Branch (“Agriculture Bank Nanshan” hereafter) 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, 2011, the principal
was RMB886,921,083, and entrusting loan interest receivable was RMB120,138,903.
Shenzhen CM Property Co., Ltd. entered the Entrusted Loan Contract with Shekou Branch
of Bank of China, by which the bank is entrusted to provide RMB250, 000,000 of loans to
Huizhou Taitong Property Investment Co., Ltd. As of June 30, 2011, the principal of
loan was RMB141, 577,000 and entrusted loan interest received was RMB9,701,834.
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 RMB3, 930,303 with reference to the bank loan rates
at the similar period. It was added to the long-term receivables.
(V) Notes to the consolidated financial statements – cont.
8. Investment in affiliates and joint ventures
RMB Yuan
Voting right Total asset at end of Total liability at Total net asset at end Total turnover at Net profit (loss) of
Name of the Companies Share portion
portion term end of term of term current term the year
I. Joint ventures
Guangzhou Panyu Innovation
70% 70% 609,728,084 18,389,974 591,338,110 783,257 -
Technology Garden Co., Ltd.
Shenzhen China Merchants OCT
50% 50% 8,476,269 2,990,534 5,485,735 6,379,272 324,433
Investment Co., Ltd.
Huizhou Taitong Property
50% 50% 291,652,151 283,940,311 7,711,840 - (11,315)
Investment Co., Ltd.
II. Affiliates
Beijing Tianping Property
49% 49% 4,898,867 492,016 4,406,850 3,832,522 391,275
Management Co., Ltd.
China Merchants Guangming
49% 49% 591,606,851 226,733,111 364,873,741 3,510,227 (5,579,609)
Technologies Garden Ltd.
Shenzhen Haitao Hotel Co., Ltd. 45% 45% 16,348,835 4,391,592 11,957,243 5,135,492 567,000
Tianjin Xinhai real Estate
45% 45% 315,451,799 76,273,963 239,177,836 - -
Development Co., Ltd.
Shenzhen TCL
Optical-Electronics Technologies 40% 40% 768,530,038 510,623,295 257,906,743 386,274,098 119,349,713
Ltd.
Shenzhen DeHan Investment
70% 70% 19,924,667 50,737 19,873,930 - -
Development Co., Ltd.
Foshan China Merchants
50% 50% 10,200,000 - 10,200,000 - -
Longyuan Property Co., Ltd.
95
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(V) Notes to the consolidated financial statements – cont.
9. Long-term equity investment
(1) Details of long-term equity investment
Impairme
Balance at Statement on nt
the Balance at Percentage of differences between Impairme provision Cash dividend
Calculating beginning of the end of share in the Voting power the shareholding and nt provided of the current
Company invested in basis Investment cost term Changed by term firm % in the firm % voting rights provision this term term
Guangzhou Panyu Innovation Technology
Equity basis 350,000,000 337,461,874 - 337,461,874 70 70 Note 1 - - -
Garden Co., Ltd.
Tianjin Xinhai real Estate Development Co., Equity basis
6,750,000 100,628,537 - 100,628,537 45 45 - - - -
Ltd.
China Merchants Guangming Technologies Equity basis
196,000,000 83,522,141 95,265,992 178,788,133 49 49 - - - -
Garden Ltd.
Shenzhen TCL Optical-Electronics Equity basis
42,010,652 59,851,731 47,739,893 107,591,624 40 40 - - - -
Technologies Ltd.
Shenzhen DeHan Investment Development Equity basis
14,000,000 - 14,000,000 14,000,000 70 70 注2 - - -
Co., Ltd.
Foshan China Merchants Longyuan Equity basis
10,200,000 - 10,200,000 10,200,000 50 50 注3 - - -
Property Co., Ltd.
Shenzhen Haitao Hotel Co., Ltd. Equity basis 4,996,675 5,932,561 255,150 6,187,711 45 45 - - - -
Huizhou Taitong Property Investment Co., Equity basis
4,900,000 4,801,249 -5,657 4,795,592 50 50 - - - -
Ltd.
Shenzhen China Merchants OCT Equity basis
2,500,000 3,414,144 -562,218 2,851,926 50 50 - - - 724,434
Investment Co., Ltd.
Beijing Tianping Property Management Co., Equity basis
490,000 1,997,854 191,725 2,189,579 49 49 - - - -
Ltd.
Total 597,610,091 167,084,885 764,694,976 - - - - - 724,434
Less: Impairment provision - - - - - - - - -
Long-term equity investment (net) 597,610,091 167,084,885 764,694,976 - - - - - -
Note1: Guangzhou Qidi Technologies Garden Investment Co., Ltd. – one of the Company’s subsidiaries, is holding 70% shares of Guangzhou 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 incorporated in the consolidation range.
96
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
Note2: Shenzhen DeHan Investment Development Co., Ltd. is co-founded by CMPD Shenzhen Company and Guangdong Outsourcing Company,
and the Company holds 70% of its equity shares. According to the Organizational Code of Conduct of DeHan Investment Company, its
financial and managerial decisions need to be made by both parties on mutually agreeing basis; therefore, CMPD Shenzhen Company holds no
controlling power over Dehan’s operating activities. Additionally, CMPD Shenzhen Company is not including DeHan into consolidating
subsidiaries.
Note3: In April 2011, CMPD Shenzhen Company set up Foshan China Merchants Longyuan Property Co., Ltd. with registered capital of 10.2 million
Chinese Yuan. CMPD Shenzhen Company holds 100% of its equity shares. In June, CMPD Shenzhen Company agreed upon a capital increase
deal with Foshan Shunde District Polly Real Estate Development Company to increase the capital to 100 million Chinese Yuan. After the
increase, CMPD Shenzhen holds an equal share of 50%. According to the Organizational Code of Conduct of Foshan China Merchants
Longyuan Property Company, its financial and managerial decisions need to be made by both parties on mutually agreeing basis; thus, CMPD
Shenzhen Company holds no controlling power over Longyuan’s operating activities. Additionally, CMPD Shenzhen Company is not
including Longyuan into consolidating subsidiaries. Currently, the capital change registration procedures are under processing with
government authorities.
(2) The ability of the long-term invested subsidiaries in transferring fund to the Company was not restricted as of June 30, 2011.
97
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(V) Notes to the consolidated financial statements – cont.
10. Investment property
RMB Yuan
Balance of book Balance of book
Items value at beginning Increased this term Decreased this term value at end of
of term term
I. Total original book
4,360,579,304 1,632,983 - 4,362,212,287
value
1. House and buildings 3,039,355,806 1,632,983 - 3,040,988,789
2. Land using rights 1,321,223,498 - - 1,321,223,498
II. Total accumulated
depreciation and 922,363,981 77,383,056 - 999,747,037
amortizing
1. House and buildings 791,895,915 60,270,244 - 852,166,159
2. Land using rights 130,468,066 17,112,812 - 147,580,878
III. Total net book
value of investment 3,438,215,323 3,362,465,250
property
1. House and buildings 2,247,459,891 2,188,822,630
2. Land using rights 1,190,755,432 1,173,642,620
IV. Total impairment
- - - -
provision
1. House and buildings - - - -
2. Land using rights - - - -
V. Total book value of
3,438,215,323 3,362,465,250
investment property
1. House and buildings 2,247,459,891 2,188,822,630
2. Land using rights 1,190,755,432 1,173,642,620
Note 1: RMB77, 383,056 amortized this term.
Note 2: As of June 30, 2011, none of the Company’s investment properties is on pledge.
(V) Notes to the consolidated financial statements – cont.
10. Investment property – cont.
Note 3: As of June 30, 2011, the Company still has investment properties of RMB708,784,003
which are not granted property certifications. They are Beike Building, Technologies
Building Stage II, Meilun Apartment. Among them, Technologies Building phase II and
Meilun Apartment were the investment property completed and transferred in the report
term. The property certificate is under processing. The others was constructed a long time
ago, and the original materials are not enough to file for certification, thus are not in filing
process at present.
11. Fixed assets
(1) Details of fixed assets
RMB Yuan
Items Balance of book Increased this term Decreased this Balance of book
value at beginning of term value at end of term
98
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
term
I. Total original book value 529,485,994 10,353,217 5,704,972 534,134,239
Incl. House & Buildings 218,174,894 - - 219,546,688
Equipment & machinery 193,267,833 1,577,831 3,303,720 191,541,944
Transportation equipment 59,324,819 3,633,469 2,337,316 59,249,178
Electronics, furniture, appliances 58,718,448 5,141,917 63,936 63,796,429
Increased Provided
this term current term
II. Total accumulative depreciation 268,546,232 - 14,913,285 5,271,226 278,188,291
Incl. House & Buildings 58,999,188 - 4,273,319 - 63,272,507
Equipment & machinery 135,341,500 - 4,407,465 2,973,348 136,775,617
Transportation equipment 37,561,900 - 2,918,400 2,092,345 38,387,955
Electronics, furniture, appliances 36,643,644 - 3,314,101 205,533 39,752,212
III. Total net book value of fixed assets 260,939,762 255,945,948
Incl. House & Buildings 159,175,706 156,274,181
Equipment & machinery 57,926,333 54,766,327
Transportation equipment 21,762,919 20,861,223
Electronics, furniture, appliances 22,074,804 24,044,217
IV. Total impairment provisions - - - -
Incl. House & Buildings - - - -
Equipment & machinery - - - -
Transportation equipment - - - -
Electronics, furniture, appliances - - - -
V. Total fixed asset book value 260,939,762 255,945,948
Incl. House & Buildings 159,175,706 156,274,181
Equipment & machinery 57,926,333 54,766,327
Transportation equipment 21,762,919 20,861,223
Electronics, furniture, appliances 22,074,804 24,044,217
Note 1: The depreciation of the term was RMB14,913,285
Note 2: No construction-in-process transferred to fixed asset in the report period.
Note 4: As of June 30, 2011, the Company still has houses and buildings of RMB33,133,974
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.
99
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(V) Notes to the consolidated financial statements – cont.
12. Construction-in-process
Details of construction in process:
RMB Yuan
End of term Beginning of term
Impairment Net book Impairment
Items Book balance provision value Book balance provision Net book value
Construction project 2,936,043 - 2,936,043 2,936,043 - 2,936,043
Transformer Station 33,149,938 - 33,149,938 20,391,018 - 20,391,018
Total 36,085,981 - 36,085,981 23,327,061 - 23,327,061
13. Long-term expenses to be amortized
RMB Yuan
Items At beginning Increased this Amortized this At end of term Reason of other
of term term term decreasing
Renewing of fixed assets for
rent
162,520,199 - 6,433,702 156,086,497
Outdoor advertisement
98,776 3,600,000 1,190,137 2,508,639
facilities
Others 3,366,074 4,133,454 1,503,747 5,995,781
Total 165,985,049 7,733,454 9,127,586 164,590,917
100
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(V) Notes to the consolidated financial statements – cont.
14. Differed income tax assets/ differed income tax liabilities
(1) Differed income tax assets and differed income tax liabilities recognized
RMB Yuan
Items End of term Beginning of term
Differed income tax assets:
Land VAT drawn in advance 324,690,916 449,165,509
Anticipated liabilities 6,251,570 6,251,570
Neutralizable losses 11,559,626 2,280,706
Amortizing of other long-term assets 1,017,993 1,017,993
Bad debt provision on receivables 601,445 965,114
Reserved expenses - 772,832
Bad debt provision on other receivables 298,479 1,641
Depreciation of fixed assets 47,563 -
Sub-total 344,467,592 460,455,365
Differed income tax liabilities:
Fluctuation of fair value of disposable financial assets - -
accounted into capital reserves
Sub-total - -
(2) Details of income tax assets not recognized
RMB Yuan
Items End of term Beginning of term
Deductible provisional differences 310,825,970 838,088,182
Neutralizable losses 340,659,410 331,289,596
Total 651,485,380 1,169,377,778
(3) The un-recognized deductible losses of differed income tax assets will due in the following
years:
RMB Yuan
Year End of term Beginning of term Note
2012 6,517,747 7,355,671
2013 8,296,126 11,805,761
2014 55,993,218 120,120,170
2015 169,490,022 192,007,994
2016 100,362,297 -
Total 340,659,410 331,289,596
101
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(V) Notes to the consolidated financial statements – cont.
14. Differed income tax assets/ differed income tax liabilities – cont.
(4) Provisional differences caused by recognized differed income tax assets/ differed income tax
liabilities
RMB Yuan
Items Amount of temporary differences
End of term:
Deductible provisional difference and deductible losses:
Land VAT drawn in advance 1,298,763,662
Neutralizable losses 46,238,504
Amortizing of other long-term assets 4,071,972
Bad debt provision on receivables 2,405,779
Anticipated liabilities 26,048,209
Bad debt provision on other receivables 1,193,918
Depreciation of fixed assets 190,252
Sub-total 1,378,912,296
Taxable provisional difference:
Fluctuation of fair value of disposable financial assets accounted
-
into capital reserves
Sub-total -
Beginning of term:
Deductible provisional difference and deductible losses:
Land VAT drawn in advance 1,874,421,859
Anticipated liabilities 26,048,209
Neutralizable losses 9,139,865
Amortizing of other long-term assets 4,071,971
Bad debt provision on receivables 4,022,300
Reserved expenses 505,000
Bad debt provision on other receivables 6,564
Inventory impairment provision -
Long-term equity investment impairment provision -
Sub-total 1,918,215,768
Taxable provisional difference:
Fluctuation of fair value of disposable financial assets accounted
-
into capital reserves
Sub-total -
102
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(V) Notes to the consolidated financial statements – cont.
15. Detail of asset impairment provision
RMB Yuan
Balance of Decreased this term
book value at Written Transferred Exchange Balance of
beginning of Increased back rate book value at
Items term this term adjustment end of term
I. Bad debt provision 13,481,779 4,002 8,619 - - 13,477,162
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
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 309,854,761 4,002 8,619 - - 309,850,144
16. Short-term loans
RMB Yuan
Items End of term Beginning of term
Loan by pledge - -
Pledged loan - -
Guarantee loan 216,556,956 -
Credit loan 2,216,506,000 1,172,132,283
Total 2,433,062,956 1,172,132,283
Note 1: Shenzhen CM Power Supply Co., Ltd. – one of the subsidiaries of the Company, raised
USD21, 410,000 (RMB138, 556,956) from the bank, which was secured by the Company.
Shenzhen China Merchants Property Co., Ltd. – the subsidiary of the Company, raised RMB78,
000,000 of loan from the bank, which was secured by China Merchants Shekou Industry Zone
Co., Ltd.
103
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(V) Notes to the consolidated financial statements – cont.
17. Notes payable
RMB Yuan
Categories End of term Beginning of term
Commercial acceptance - -
Bank acceptance - 275,616,189
Total - 275,616,189
18. Account payable
(1) Details of payable accounts:
RMB Yuan
Items End of term Beginning of
term
Project payment 1,916,573,726 2,051,849,132
Land price 2,804,618,260 2,529,091,908
Payment for purchasing of share equity 70,650,000 70,650,000
Warrant fee 89,851,992 34,572,057
Others 40,648,760 71,504,066
Total 4,922,342,738 4,757,667,163
(2) No account payable to shareholders with 5% or over of the Company’s shares or any related
parties.
(3) Payable accounts with large amount and due over 1 year
RMB Yuan
Amount to repay
after the report
Name of the companies End of term Age Reason of overdue term
Shanghai Baoshan Yanghang Payment condition not
72,192,000 2-3 years -
Government satisfied yet
Payment condition not
Shanghai Meiyang Property Co., Ltd. 70,650,000 2-3 years -
satisfied yet
Shenzhen OCT Construction and Project quality deposit, pay
64,002,147 2-3 years -
Installation Co., Ltd. on due.
Total 206,844,147
104
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(V) Notes to the consolidated financial statements – cont.
19. Account received in advance
(1) Age analyze of prepayment received
RMB Yuan
End of term Beginning of term
Age Amount % Amount %
within 1 yr 11,874,014,925 99 11,245,023,346 100
1-2 years 66,386,482 1 23,184,800 -
2-3 years 7,754,665 - 446,680 -
Over 3 yrs 33,777 - - -
Total 11,948,189,849 100 11,268,654,826 100
Including: presale of properties:
RMB Yuan
Projects End of term Beginning of term Date of completion (anticipated) Presell portion
Foshan Yiyunshui’an Phase I - IV 2,733,740,403 1,686,286,477 2012 56%
Beijing Xicheng Home and Longyuan
Projects 1,614,919,435 992,697,243 completed 49%
Guangzhou Jinshangu phase II 1,413,788,762 957,034,244 completed 99%
Shanghai CM Yonghuayuan phase I 1,376,884,547 703,029,613 completed 100%
Beijing Park 1872 Phase I,II 844,823,623 1,907,866,683 completed 57%
Shenzhen Lanxigu phase III 573,472,007 496,043,699 completed 70%
Tianjin Xincheng phase I 485,841,035 876,104,628 completed 96%
Suzhou Xiaoshicheng Phase IV 484,459,543 - 2011 60%
Chongqing CM Jiangwancheng phase I, II 483,713,089 834,160,111 2011 92%
Foshan Yiyun Shangcheng phase I 288,935,068 499,079,745 2011 79%
Tianjing Yonghuafu 281,226,112 - 2012 35%
Shenzhen Yongjingwan Garden 209,808,516 - 2012 2%
Zhangzhou CM Garden City 153,334,168 167,359,485 completed 100%
Shenzhen CM Guanyuan 152,140,827 - 2011 11%
Shenzhen Xicheng Phase IV 127,329,164 559,576,579 2011 49%
Zhuhai CM Garden City Phase I 120,440,288 670,216,271 completed 72%
Zhuhai China Merchants Garden City
Phase II 114,841,242 - 2012 12%
Shanghai CM Haiwan Garden 79,253,136 145,086,710 2013 32%
Shenzhen Xicheng Phase III 77,181,711 77,181,711 completed 96%
Shanghai Haide Garden Phase III 46,998,290 41,376,464 completed 68%
Nanjing Yiyunxigu Phase III 42,230,373 322,461,693 completed 100%
Zhangshou Holiday 365, phase I 41,980,314 - 2012 30%
Xiamen Jimei P01 Project 38,943,972 - 2014 5%
Shenzhen CM Lanyuan 35,088,953 84,756,830 completed 97%
Shenzhen Lanxigu Phase II. 26,411,745 82,296,586 completed 97%
Suzhou Xiaoshicheng Phas II, III 18,458,658 43,558,381 completed 100%
Phase V. Garden City 7,486,460 15,253,943 completed 98%
Shenzhen Haijing Plaza 1,327,409 1,327,894 completed 100%
Shenzhen Haiyue Huating 485,500 1,845,847 completed 100%
Shenzhen Yishanjun phase II, III 259,995 894,469 completed 100%
Shanghai CM Nanqiao Yayuan 180,000 3,508,642 completed 100%
Zhangzhou CM Jianzhu 147,089 147,089 completed 100%
Tianjin 36 Xikang Road - 8,658,000 completed 100%
Others 21,943,185 15,891,487
Total 11,898,074,619 11,193,700,524
105
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(2) No prepayment account received from shareholders holding 5% or over of shares of the
Company.
106
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(V) Notes to the consolidated financial statements – cont.
20. Wage payable
RMB Yuan
Balance of
Other Balance of
book value Increased
Items decrease this book value at
at beginning this term
term end of term
of term
I. Wage, bonus, allowances 166,245,620 323,112,763 413,291,233 76,067,150
II. Employees’ welfare 541,895 14,932,659 12,267,971 3,206,583
III. Social security 1,843,461 28,473,062 28,625,901 1,690,622
IV. Housing fund 15,740,645 13,103,325 28,463,457 380,513
V. Dismissing welfare 1,280,000 77,046 57,865 1,299,181
VI. Others 21,580,890 11,259,371 7,573,918 26,546,343
Incl. Trade union fee and
20,193,804 7,238,513 4,862,895 22,569,422
training fee
Total 207,232,511 390,958,226 490,280,345 107,910,392
Note: Balance of union fund and employee training fund is RMB22,569,422. Balance of
dismissing compensation is RMB563,434.
21. Tax payable
RMB Yuan
Items End of term Beginning of term
Enterprise income tax 561,031,616 365,498,608
Land VAT (Note) 165,200,572 118,920,233
Business tax 116,424,433 86,918,764
Personal income tax 36,460,868 20,155,272
VAT 5,040,130 6,364,197
City maintenance and construction tax 4,328,418 4,733,034
Land using tax 189,722 4,547,650
Others 3,372,841 7,651,260
Total 892,048,600 614,789,018
Note: See Note (V)6.
22. Tax disbursable
RMB Yuan
Items End of term Beginning of
Long-term loan interest with installments 60,038,666 106,863,476
Short-term borrowing interests payable 24,299,200 2,260,163
Total 84,337,866 109,123,639
107
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(V) Notes to the consolidated financial statements – cont.
23. Dividend payable
RMB Yuan
Name of the companies End of term Beginning of term Reason of overdue for
over 1 year
Shenzhen OCT Property Co., Ltd. (Note 1) 228,195,288 54,627,032
Shenzhen Nanshan Property Development 39,604,987 39,604,987
Co., Ltd. (Note 2)
Tianjin Shenmiao Investment Group Co., 19,692,329 29,692,329
Ltd. (Note 3)
Shenzhen Huayuan Seafood Restaurant 285,600 285,600 To be neutralized
CMSIZ. (Note 4) 83,210,318 -
CM Zhangzhou Development Co., Ltd. 4,545,455 -
(Note 4)
Total 375,533,977 124,209,948
Note 1: According to the profit distribution plan as of December 31, 2010 adopted by the board
meeting of Shenzhen CM OCT Investment Co., Ltd held on March 22, 2011, this was the
profit payable to OCT Property Co., Ltd.
Note 2: According to the profit distribution plan as of December 31, 2010 adopted by the board
meeting of Suzhou CM Nanshan Property Co., Ltd. held on December 20, 2010, this was
the profit payable to Shenzhen Nanshan Property Co., Ltd.
Note 3: According to the profit distribution plan as of December 31, 2010 adopted by the board
meeting of Tianjin CM Property Co., Ltd. held on December 28, 2010, this was the profit
payable to Tianjin Shenmiao Investment Group Co., Ltd.
Note 4: This was the dividend of common shares to China Merchants Shekou Industrial Zone Co.,
Ltd. and China Merchants Zhangzhou Development Zone Co., Ltd. in accordance with the
profit distribution plan of 2010 adopted at the Annual General Meeting.
24. Other account payable.
(1) Details of other payable accounts
RMB Yuan
Items End of term Beginning of term
Interchange with co-operative 4,156,440,178 4,082,251,898
companies
Interchange with related parties 981,653,978 1,067,095,804
Deposit 574,647,856 418,765,712
Temporary payment 560,334,878 154,437,315
Others 74,831,266 20,830,785
Total 6,347,908,156 5,743,381,514
108
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(V) Notes to the consolidated financial statements – cont.
24. Other account payable – cont.
(2) No other account payable to shareholders with 5% or over of the Company’s shares or any
related parties. See Note (VI)6.
(3) Statement on other payable accounts with large amount and aged over 1 year
RMB Yuan
Name of the companies End of term Age Reason of overdue
Client I 1,294,210,760 1-2 years Payment made by shareholder
Client II 711,302,408 1-3 years Payment made by shareholder
Client III 617,373,350 1-2 years Payment made by shareholder
Client IV 269,191,275 1-2 years Deposit for limited property
Client V 163,304,045 1-3 years Payment made by shareholder
Client VI 138,235,302 1-2 years Payment made by shareholder
25. Anticipated liabilities
RMB Yuan
Beginning of Increased this Decreased this End of term
Items
term term term
Providing of external guarantees -
Unsettled lawsuit 26,048,209 - 3,787,754 22,260,455
Including: Lawsuit of Yishanjun (Note 1) 26,048,209 - 3,787,754 22,260,455
Lawsuit of Garden City phase III - - - -
Dismissing policy - - - -
Loss contract to be executed - - - -
Predicted expenses (Note 2) 80,241,380 - - 80,241,380
Total 106,289,589 - 3,787,754 102,501,835
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 property
certification in 2009. The compensation was predicted to RMB27,810,000 basing on 0.03%
to 0.05% of the contract amount and was provided as anticipated liabilities. As of June 30,
2011, RMB5,549,545 of compensate has been paid.
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.
109
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(V) Notes to the consolidated financial statements – cont.
26. Non-current liabilities due in one year
(1) Details of non-current liabilities due in one year
RMB Yuan
Items End of term Beginning of term
Long-term loans due in 1 year 2,458,362,972 1,856,422,159
Bond payable due in one year - -
Long-term payable due in 1 year - -
Other non-current liabilities due in 1 year - -
Total 2,458,362,972 1,856,422,159
(2) Long-term loans due in 1 year
(a) Long-term loans due in one year
RMB Yuan
Items End of term Beginning of term
Entrusted loan (Note 1) 152,906,972 152,906,972
Pledged loan - 122,000,000
Guaranteed loan (Note 2) 1,540,740,000 781,515,187
Credit loan 764,716,000 800,000,000
Total 2,458,362,972 1,856,422,159
Note 1: According to the Contract for Entrusted Loan entered between Shenzhen CM
Construction Co., Ltd. and Nanjing Fucheng Property Co., Ltd., Nanjing Fucheng has
entrusted the bank to provide loans to Shenzhen CM Construction Co., Ltd.
Note 2: See Note (V)28;
(b) Long-term loans due in 1 year top 5 in amount
RMB Yuan
End of term
Interest Amount of foreign Amount of original
Loan provided by Commence date Terminate date Currency rates % currency currency
Financial Institution I 2008.11.24 2011.11.28 USD Float 150,000,000 970,740,000
Financial Institution II 2009.04.13 2012.06.10 RMB 4.86 400,000,000
Financial Institution III 2008.10.30 2011.10.29 RMB 5.265 300,000,000
Financial Institution IV 2009.05.26 2012.05.26 RMB 4.86 300,000,000
Financial Institution V 2009.04.24 2012.04.24 RMB 4.86 300,000,000
Total 2,270,740,000
110
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(V) Notes to the consolidated financial statements – cont.
27. Other current liability
RMB Yuan
Balance of book Balance of book
value at end of value at beginning
Items term of term
Land VAT drawn in advance (Note) 2,398,239,888 2,331,464,209
Outsourced cleaning and security guard services 18,655,149 13,048,065
Agencies 76,304 3,012,000
Garments 3,823,668 2,510,750
Water and electricity 769,719 -
Improving of intelligent system 244,151 -
Others 10,519,700 7,706,659
Total 2,432,328,579 2,357,741,683
Note: Land VATs are calculated and provided in accordance with State Taxation [2006] No.187
with the heading of circular about Settlement of Land VAT of Property Development
Enterprises issued by State Taxation 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.
28. Long-term loans
(1) Categories of long-term loans
RMB Yuan
Items End of term Beginning of term
Pledged loan (Note 1) 139,000,000 49,000,000
Guaranteed loan (Note 2) 5,687,651,600 5,753,519,344
Credit loan 4,430,226,700 4,193,316,000
Consigned loans 572,344,000 -
Total 10,829,222,300 9,995,835,344
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
RMB139,000,000.
Note 2: The Company borrowed loan of RMB940,000,000 from the bank, which was secured by
China Merchants Shekou Industry Zone Co., Ltd., including RMB400,000,000 will due in
one year; and another RMB2,000,000,000 was secured by China Merchants Group Co.,
Ltd.
111
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
Shenzhen China Merchants Property Co., Ltd. – the subsidiary of the Company, raised
RMB78,000,000 of loan from the bank, which was secured by China Merchants Shekou
Industry Zone Co., Ltd. which will due in one year.
Zhuhai Yuanfeng Property Co., Ltd. raised RMB170, 000,000 of loan from the bank. The
Company provided guarantee covering 51% of the overdue part of the loan. RMB170,
000,000 will due in one year.
Fujian Zhongliansheng Property Development Co., Ltd. – the subsidiary of the Company,
raised RMB150, 000,000 of loan from the bank, which was secured by the Company
covering 50% of the overdue part of the loan.
Shanghai Jingyuan Property Development Co., Ltd. – subsidiary of the Company, raised
RMB165, 000,000 of loan, which was secured by the Company covering 51% of the
overdue part of the loan.
Shenzhen China Merchants Power Supply Co., Ltd. – subsidiary of the Company, raised
USD30, 000,000 (RMB194, 148,000) of loan from the bank, which was secured by the
Company.
Eureka Investment Industry Co., Ltd. – subsidiary of the Company raised USD541,000,000
(RMB3,501,135,600) and HKD130,000,000 (RMB108,108,000) of loan from the bank, in
which USD297,000,00 (RMB1,922,065,200) and HKD130,000,000 (RMB108,108,000)
were secured by China Merchants Group (HK) Co., Ltd., USD50,000,000
(RMB323,580,000) was secured by Dafeng International Holdings Co., Ltd., the rest loans
are secured by the Company. In which, the loan of USD150,000,000 (RMB970,740,000)
secured by China Merchants Group (HK) Co., Ltd. and Dafeng International Holdings Co.,
Ltd. will due in one year.
Note 3: According to the “Contract of Consigned Loan” engaged by Foshan Yiyun Property Co.,
Ltd. – the subsidiary of the Company and Huidefeng Property (Guangzhou) Co., Ltd., it
was the loan provided to Foshan Yiyun Property Co., Ltd. by the bank as consigned by
Huidefeng Property (Guangzhou) Co., Ltd.
112
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(V) Notes to the consolidated financial statements – cont.
28. Long-term loans – cont.
(2) Long-term loans top 5 in amount
RMB Yuan
End of term Beginning of term
Amount of Amount of Amount of Amount of
Commence Interest foreign original foreign original
Loan provided by date Terminate date Currency rates % currency currency currency currency
Financial Institution I 2010.04.20 2017.04.20 RMB 5.94 2,000,000,000 2,000,000,000
Financial Institution II 2009.07.21 2012.07.20 RMB 5.04 1,000,000,000 1,000,000,000
Financial Institution
2010.01.05 2013.12.23 USD Float 130,000,000 841,308,000 130,000,000 859,969,743
III
Financial Institution
2009.07.27 2012.07.27 RMB 4.86 470,000,000 470,000,000
IV
Financial Institution V 2010.01.04 2013.12.23 USD Float 64,000,000 414,182,400 64,000,000 423,369,720
Total 4,725,490,400 4,753,339,463
29. Long term payables
RMB Yuan
Subjects Term Initial Interest Interest Balance at Condition
amount rates % payable the end of
term
Main body maintaining fund - 71,503,760 - - 71,503,760 -
Shenzhen China Merchants - 1,200,000 - - 1,200,000 -
Landmark Co., Ltd.
Total - 72,703,760 - - 72,703,760 -
30. Other non-current liabilities
RMB Yuan
Items Balance of book Balance of book
Differed rental income 2,316,700 2,316,700
Special grant for culture development 1,500,000 1,500,000
Total 3,816,700 3,816,700
Less: Other non-current liabilities due in 1 year - -
Non-current liabilities due beyond 1 year 3,816,700 3,816,700
113
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(V) Notes to the consolidated financial statements – cont.
31. Capital Share
RMB Yuan
Changed this term
Bonus
Beginning of Issuing of shares Transferred from
Items term new shares reserves Others Sub-total End of term
June 30, 2011:
I. Shares with trading limited
conditions
1. State-owned shares - - - - - - -
2. National legal person
693,419,317 - - - - - 693,419,317
shares
3. Other domestic shares - - - - - - -
4. Foreign shares 197,709,440 - - - - - 197,709,440
5. Management shares 465,451 - - - 90,349 90,349 555,800
Total conditional shares 891,594,208 - - - 90,349 90,349 891,684,557
II. Shares without trading
limited conditions
1. RMB common shares 684,265,720 - - - (58,474) (58,474) 684,207,246
2. Foreign shares placed in
141,440,575 - - - (31,875) (31,875) 141,408,700
domestic exchange
3. Foreign shares listed
- - - - - - -
overseas
4. Others - - - - - - -
Total unconditional shares 825,706,295 - - - (90,349) (90,349) 825,615,946
III. Total capital shares 1,717,300,503 - - - - - 1,717,300,503
RMB Yuan
Changed this term
Transferred
Beginning of Issuing of Bonus from
Items term new shares shares reserves Others Sub-total End of term
December 31, 2010:
I. Shares with trading
limited conditions
1. State-owned shares - - - - - - -
2. National legal
731,298,105 - - - (37,878,788) (37,878,788) 693,419,317
person shares
3. Other domestic
- - - - - - -
shares
4. Foreign shares 197,709,440 - - - - - 197,709,440
5. Management shares 431,939 - - - 33,512 33,512 465,451
Total conditional shares 929,439,484 - - - (37,845,276) (37,845,276) 891,594,208
II. Shares without
trading limited
conditions
1. RMB common
646,434,394 - - - 37,831,326 37,831,326 684,265,720
shares
2. Foreign shares
placed in domestic 141,426,625 - - - 13,950 13,950 141,440,575
exchange
3. Foreign shares
- - - - - - -
listed overseas
4. Others - - - - - - -
Total unconditional
787,861,019 - - - 37,845,276 37,845,276 825,706,295
shares
III. Total capital shares 1,717,300,503 - - - - - 1,717,300,503
The above shares are with par value of RMB1 yuan.
114
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(V) Notes to the consolidated financial statements – cont.
32. Capital reserves
RMB Yuan
Items Beginning of term Increased this Decreased End of term
term this term
June 30, 2011:
Share capital premium 8,369,949,610 - - 8,364,328,133
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
(1,354,694,800) - - (1,354,694,800)
common control
Acquiring share equities from minor
(384,866,956) - (5,621,477) (390,488,433)
shareholders of subsidiaries
Capital reserves capitalized (168,973,400) - - (168,973,400)
Other misc. incomes 10,092,053 - - 10,092,053
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
104,411,758 - - 104,411,758
system
Total 8,484,453,421 - (5,621,477) 8,478,831,944
December 31, 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
(1,354,694,800) - - (1,354,694,800)
common control
Purchasing of shares from minor shareholders of
(384,866,956) - - (384,866,956)
subsidiaries (Note 1)
Capital reserves capitalized (168,973,400) - - (168,973,400)
Other misc. incomes 13,565,536 - 3,473,483 10,092,053
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
104,411,758 - - 104,411,758
system
Total 8,487,926,904 - 3,473,483 8,484,453,421
115
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(V) Notes to the consolidated financial statements – cont.
33. Surplus reserves
RMB Yuan
Items Beginning of Increased this Decreased this End of term
term term term
June 30, 2011:
Statutory surplus reserves 759,342,546 - - 759,342,546
Optional surplus reserves 140,120,038 - - 140,120,038
Preserved fund - - - -
Enterprise development fund - - - -
Others - - - -
Total 899,462,584 - - 899,462,584
December 31, 2010:
Statutory surplus reserves 645,672,972 113,669,574 - 759,342,546
Optional surplus reserves 140,120,038 - - 140,120,038
Preserved fund - - - -
Enterprise development fund - - - -
Others - - - -
Total 785,793,010 113,669,574 - 899,462,584
Legal common reserves could be used to makeup losses, expand business operation or capitalized
to capital shares.
34. Retained profit
RMB Yuan
Items Amount Percentage of
drawing or allocation
June 30, 2011:
Before adjustment: Retained profit at end of last year 6,940,907,225
Adjusted: Total retained profit at beginning of year -
Adjusted: Retained profit at beginning of year 6,940,907,225
Plus: Net profit attributable to owners of the parent company 1,468,587,411
Less: Statutory surplus reserves -
Optional surplus reserves -
Common risk provisions -
Common share dividend payable 206,076,060 Note 1
Common share dividend transferred to capital share -
Retained profit at the end of term 8,203,418,576
December 31, 2010:
Before adjustment: Retained profit at end of last year 5,214,909,610
Adjusted: Total retained profit at beginning of year -
Adjusted: Retained profit at beginning of year 5,214,909,610
Plus: Net profit attributable to owners of the parent company 2,011,397,239
Less: Statutory surplus reserves 113,669,574
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 6,940,907,225
116
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(V) Notes to the consolidated financial statements – cont.
34. Retained profit - continues
Note 1: Cash dividend approved by the Shareholders’ Annual Meeting
According to the resolutions adopted at the Shareholders’ Meeting 2010 held in April 2011,
on the basis of 1,717,300,503 shares at December 31, 2010, the Company distributed
RMB1.20 to each 10 shares, and totally RMB206,076,060 was distributed.
Note 2: Surplus reserves drawn by subsidiaries
As of June 30, 2011, there were RMB507,712,376 of surplus reserves provided by the
subsidiaries which has been incorporated in the retained profit of the Group. (December
31, 2010: RMB507,712,376).
35. Operational turnover and cost
(1) Turnover
RMB Yuan
Items Occurred Amount occurred
current term in same period last
year
Major business turnover 8,091,485,144 6,980,394,887
Other business income - 759,038
Operation cost 4,241,421,711 4,127,221,400
Other business cost - 142,333
(2) Main businesses (on industries)
RMB Yuan
Occurred current term Amount occurred in same
period last year
Turnover Operation Turnover Operation cost
Name of industry cost
Property development 7,558,252,607 3,820,931,126 6,460,083,143 3,725,031,407
Public Utilities 283,410,271 206,370,877 321,265,272 236,716,661
Property management 249,822,266 214,119,708 199,046,472 165,473,332
Total 8,091,485,144 4,241,421,711 6,980,394,887 4,127,221,400
117
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(V) Notes to the consolidated financial statements – cont.
35. Operational turnover and cost – cont.
(3) Income from top 5 clients
RMB Yuan
Percentage in total
turnover of the
Name of clients Turnover Company %
Client I 42,149,597 0.52
Client II 40,341,965 0.50
Client III 39,958,467 0.49
Client IV 37,945,237 0.47
Client V 37,087,823 0.46
Total 197,483,089 2.44
36. Business tax and surcharge
RMB Yuan
Occurred current term Amount occurred in
Items Rate
same period last year
Land VAT 792,752,288 509,082,873 Note
Business tax 442,386,064 335,311,052 Note
City maintenance and construction tax 29,219,269 10,008,345 Note
Education surtax 13,714,010 7,158,099 Note
Others 2,632,431 1,364,878
Total 1,280,704,062 862,925,247
Note: See Note (III).
37. Financial expenses
RMB Yuan
Items Occurred current term Amount occurred in same
period last year
Interest expense 334,107,729 195,007,097
Less: Interest expenses capitalized 230,191,509 173,094,565
Less: Interest income 51,023,401 48,785,129
Exchange differences (156,152,499) 26,152,464
Less: Exchange difference capitalized (26,652,607) 8,392,352
Others 4,322,478 12,165,719
Total (72,284,595) 3,053,234
118
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(V) Notes to the consolidated financial statements – cont.
38. Income from fair value fluctuation
RMB Yuan
Source of income from fluctuation of fair value Occurred current Amount occurred in
term same period last
year
Transactional financial assets 1,773,595 19,394,866
Incl. Gains from fluctuation of fair value of derivate financial
1,773,595
instruments 19,394,866
Trade off financial liabilities 14,110,671 10,523,008
Investment property measured at fair value - -
Others - -
Total 15,884,266 29,917,874
39. Investment income
(1) Detailed investment gains
RMB Yuan
Items Occurred current Amount occurred in
term same period last
year
Long-term equity investment gains on cost basis - -
Long-term equity investment gains on equity basis 45,609,319 (592,236)
Investment gains from disposal of long-term equity investment - -
Investment gains on the date of maturity of financial assets - -
Investment gains from disposal of tradable financial assets (19,295,749) 3,637,080
Investment gains from disposal of investment hold to expiration - -
Investment gains from disposal of available-for-sale financial
- -
assets
Others (Note 1) 24,948,540 22,409,110
Total 51,262,110 25,453,954
Note 1: Interest income from entrusted loans was RMB24, 948,540 after deducting of taxes. See
Note (V) 7 for details.
119
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(V) Notes to the consolidated financial statements – cont.
39. Investment gains – cont.
(2) Details of gains from long-term equity investment on equity basis
RMB Yuan
Amount
Occurred current occurred in same
Company invested in term period last year Causation of change
Shenzhen TCL Optical-Electronics
47,739,893 -
Technologies Ltd.
Tianjin Xinhai real Estate Development
- 2,094,709
Co., Ltd.
40. Asset impairment loss
RMB Yuan
Items Occurred current Amount occurred in
term same period last
year
I. Bad debt loss (4,617) (2,861)
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 - -
Total (4,617) (2,861)
120
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(V) Notes to the consolidated financial statements – cont.
41. Non-business income
(1) Details of non-operational income
RMB Yuan
Items Occurred current Amount occurred in
term same period last
year
Total gains from disposal of non-current assets 31,599 66,174
Incl. Gains from disposal of fixed assets 31,599 66,174
Gains from disposal of intangible assets - -
Gains from debt reorganization - -
Gains from exchange of non-monetary assets - -
Donation received - -
Government subsidy 1,619,000 7,088,493
Write back of predicted debts - -
Income from penalties 891,329 599,948
Others 817,807 1,155,626
Total 3,359,735 8,910,241
(2) Details of government subsidy
RMB Yuan
Items Occurred current term Amount occurred Remarks
VAT refund for electric power import - 4,862,063
Subsidy for solar energy application - 1,020,600
Tax refund 367,000 556,129
Industrial development special fund - 600,000
Award for great tax payer 1,252,000 -
Subsidy for culture and sport center - -
Supporting fund for financial crisis - -
Government financing for pipe - 49,701
Others - -
Total 1,619,000 7,088,493
42. Non-business expenditures
RMB Yuan
Items Occurred current Amount occurred in
term same period last
year
Total loss from disposal of non-current assets 442,593 276,647
Incl. Loss from disposal of fixed assets 442,593 276,647
Loss from disposal of intangible assets - -
Losses from debt restructuring - -
Loss from exchange of non-monetary assets - -
Expected liability expense - -
Donations - 2,232,000
Others 2,204,571 2,595,038
Total 2,647,164 5,103,685
121
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(V) Notes to the consolidated financial statements – cont.
43. Income tax expenses
RMB Yuan
Items Occurred current term Amount occurred in
same period last year
Income tax calculated according to the law and regulations of
470,745,407 582,418,590
current term
Adjustment of differed income tax 115,987,773 (147,676,385)
Total 586,733,180 434,742,205
Adjustments on income tax expenditure and accounting profit:
RMB Yuan
Occurred current Amount occurred in same
term period last year
Accounting profit 2,406,464,972 1,833,668,498
Income tax at 24% (22% last year) 577,551,593 403,407,070
Influence of taxes may not be neutralized by expenses 4,628,073 16,484,665
Influence of tax-free income (12,302,906) (2,229,334)
Influence of taxes not confirmed to neutralize loss and
35,116,990 (45,150,629)
neutralizable provisional differences
Tax influence by using of unrecognized previous loss and
(22,660,693) 43,672,028
deductible provisional differences
Influence of change in timing of writing back differed income
- -
tax asset/liability
Influence of inconsistency in tax rates of subsidiaries in other
4,400,123 18,558,405
region
Others - -
Income tax expenses 586,733,180 434,742,205
44. 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:
RMB Yuan
Occurred current Amount occurred in
term same period last year
Net profit of current term attributable to common shareholders 1,468,587,411 1,050,179,281
Incl. Net profit attributable to continuous operation 1,468,587,411 1,050,179,281
Net profit attributable to terminating operation - -
122
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
At calculating of diluted earning per share, the net profit of current term attributable to common
shareholders is:
RMB Yuan
Occurred Amount occurred in
current term same period last year
Net profit of current term attributable to common shareholders 1,468,587,411 1,050,179,281
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 1,468,587,411 1,050,179,281
Net profit attributable to terminating operation - -
123
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(V) Notes to the consolidated financial statements – cont.
44. Calculation of basic earning per share and diluted earning per share – cont.
At calculating of basic earning per share, the denominator is the weighted average of common
shares issued outside, the calculation formula is as:
RMB Yuan
Occurred current Amount occurred in
term 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 Amount occurred in
term same period last year
Weighted average of common shares used
1,717,300,503 1,717,300,503
in calculating of basic earnings per share
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
1,717,300,503 1,717,300,503
used in calculating of diluted earning per share
Earnings per share
RMB Yuan
Occurred current Amount occurred in
term same period last year
Calculated according to net profit attributable to the shareholders of
the parent company
Basic earnings per share 0.86 0.61
Diluted earnings per share 0.86 0.61
Calculated according to continuous operation net profit attributable
to the shareholders of parent company
Basic earnings per share 0.86 0.61
Diluted earnings per share 0.86 0.61
Calculated according to termination net profit attributable to the
shareholders of parent company
Basic earnings per share - -
Diluted earnings per share - -
124
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(V) Notes to the consolidated financial statements – cont.
45. Other miscellaneous income
RMB Yuan
Amount occurred in
Occurred current same period last
Items term year
1. Gain(loss) generated by sellable financial assets - (769,024)
Less: Income tax influence of available-for-sale financial assets - (118,046)
Net amount written into other gains and transferred into gain/loss
-
in previous terms -
Sub-total - (650,978)
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 4,468,422 39,197,159
Less: Net amount of disposing overseas business and transferred
-
to current gain/loss -
Sub-total 4,468,422 39,197,159
5. Others (5,621,477) -
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 (5,621,477) -
Total (1,153,055) 38,546,181
46. Notes to cash flow statements
(1) Other cash received relating to business operation
RMB Yuan
Items Occurred current term Amount occurred in
same period last year
Operational trade money received 2,039,455,447 965,050,266
Project deposit received 143,199,977 337,179,945
Interest received 70,082,500 50,537,793
Operational provisional money received 147,169,375 104,664,258
Total 2,399,907,299 1,457,432,262
125
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(V) Notes to the consolidated financial statements – cont.
46. Notes to cash flow statements – cont.
(2) Other cash paid relating to business operation
RMB Yuan
Items Occurred current term Amount occurred in
same period last year
Operational trade money paid 1,719,041,536 478,606,354
Project deposit refunded 237,536,195 477,206,606
Cash paid for sales expenses 106,561,289 71,933,008
Cash paid for administrative expenses 41,775,455 51,773,005
Total 2,104,914,475 1,079,518,973
(3) Other cash received relating to investment operation
RMB Yuan
Items Occurred current term Amount occurred in
same period last year
Cash received from trade of foreign currency future contract - 12,887
Total - 12,887
(4) Other cash paid relating to investment operation
RMB Yuan
Items Occurred current Occurred in
term previous term
Cash paid for NDF trade loss 22,597,418 -
126
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(V) Notes to the consolidated financial statements – cont.
47. Supplementary data of cash flow statement
(1) Supplementary cash flow statement
RMB Yuan
Supplementary Info. Amount of the
Amount of the
same period of last
Current Term
year
1. Net profit adjusted to cash flow of business operation
Net profit 1,819,731,792 1,398,926,293
Plus: Asset impairment provision (4,617) (2,861)
Fixed asset depreciation, gas and petrol depreciation, 14,913,285 16,924,895
production goods depreciation
Amortizing of intangible assets and investment properties 77,383,056 68,873,765
Amortizing of long-term expenses 9,127,586 9,611,584
Loss from disposal of fixed assets, intangible assets and 410,994 210,473
other long-term assets
Loss of disposing fixed assets - -
Loss (gain) from fair value fluctuation (15,884,266) (29,917,874)
Financial expenses (72,284,595) 3,053,234
Investment loss (gains) (51,262,110) (25,453,955)
Decrease of differed income tax assets (increase) 115,987,773 (147,676,385)
Increase (decrease) of differed income tax liabilities - (118,047)
Decreasing (increase) of inventory (5,771,433,459) (3,339,843,203)
Decrease (increase) of operational receivables (802,331,577) 888,747,172
Increase (decrease) of operational payable items 1,650,703,367 (841,884,392)
Others
Cash flow generated by business operation, net (3,024,942,771) (1,998,549,301)
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 7,907,340,239 10,315,367,297
Less: Initial balance of cash 8,914,595,308 8,775,661,067
Plus: Balance of cash equivalents at the period end - -
Less: Initial balance of cash equivalents - -
Net increasing of cash and cash equivalents (1,007,255,069) 1,539,706,230
127
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(V) Notes to the consolidated financial statements – cont.
47. Supplementary data of cash flow statement – cont.
(2) Composition of cash and cash equivalents
RMB Yuan
Items End of term Beginning of term
I. Cash 7,907,340,239 8,914,595,308
Incl: Cash in stock 103,479 59,111
Bank savings could be used at any time 7,907,236,760 8,914,536,197
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 - -
Incl. Bond investment due in 3 months - -
III. Balance of cash and cash equivalents at end of term 7,907,340,239 8,914,595,308
128
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(VI) Related parties and related transactions
1. Particulars about the parent company of the Company
RMB Yuan
Ultimate
Voting power of holder of
Ownership Reg. Legal Business Registered Shareholding of the parent the Organization
Name of the parent co. Relationship type Add. representative property capital the parent co. company % Company code
Establishment
and China
China Merchants Shekou Controlling Ltd. management Merchants
Shenzhen Fu Yuning 2,236,000,000 51.89% 51.89% 10001146 - 0
Industrial Zone Co., Ltd. shareholder liability of various Group Co.,
types of Ltd.
enterprises.
China Merchants Group Co., Ltd. is the ultimate controlling party of the Group.
2. Particulars of the subsidiaries
See Note (IV)
3. Joint-ventures and affiliates
See Note (V) 8
129
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(VI) (7) Related Parties and Related Transactions -continues
4. Other related parties
Name of the related parties Relationship with the Company Organization code
Shenzhen China Merchants Landmark 70844202 - 3
Under same controlling shareholder
Co., Ltd.
Shenzhen Beike Venture Co., Ltd. Under same controlling shareholder 72304387 - 2
Dafeng International Holdings Under same controlling shareholder Not applicable
Shenzhen China Merchants Financing 19244397 - 2
Under same controlling shareholder
Service Co., Ltd.
China Merchants Logistics Holdings Co., 72472882 - 2
Under same controlling shareholder
Ltd.
Shenzhen Shekou Dazhong Investment 61880956 - 5
Under same controlling shareholder
Co., Ltd.
China Merchants Hanghua Technologies 60002262 - 5
Under same controlling shareholder
and Trade Center Co., Ltd.
Shenzhen CM Qianhaiwan Property Co., 79386851 - 1
Under same controlling shareholder
Ltd.
Shanghai CM Plaza Property Co., Ltd. Under same controlling shareholder 60727122 - 9
Under common ultimate controlling Not applicable
China Merchants Group (HK) Ltd.
shareholder
Under common ultimate controlling 19218149 - 0
China Merchants Securities Co., Ltd.
shareholder
Huajian Transportation Economic Under common ultimate controlling 10171700 - 0
Development Center shareholder
Shenzhen Nanshan Property Under common ultimate controlling 75046859 - 3
Development Co., Ltd. shareholder
China Merchants International (China) Under common ultimate controlling 71786931-X
Investment Co., Ltd. shareholder
Under common ultimate controlling 61145106 - 2
CM Zhangzhou Development Zone Ltd.
shareholder
Shenzhen TCL Optical-Electronics 26639365 - 3
Affiliate of the Company
Technologies Ltd.
China Merchants Guangming 76755303 - 0
Affiliate of the Company
Technologies Garden Ltd.
Tianjin Xinhai real Estate Development 7581445 – 4
Affiliate of the Company
Co., Ltd.
Huizhou Taitong Property Investment 67314099 – 0
Joint venture of the Company
Co., Ltd.
Foshan China Merchants Longyuan 57747802-X
Affiliate of the Company
Property Co., Ltd.
Director, general manager and vice
Key management
general manager
130
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(VI) (7) Related Parties and Related Transactions -continues
5. Related transactions
(1) Related transactions of goods and services
RMB Yuan
Amount occurred in same
Pricing and Occurred current term period last year
Subjects of the decision making Percentage in Percentage in
Related parties Type of trade related transactions process Amount similar trades % Amount similar trades %
Shenzhen CM
Providing of Approved by the
Qianhaiwan Property Note 94,901,000 100 53,350,000 100
labor service Board
Co., Ltd.
Note. This was the income occurred with the construction contract for the overall construction
project of phase I to IV of Qianhaiwan Garden undertaken by Shenzhen China Merchants
Construction Co., Ltd. – subsidiary of the Company, from Shenzhen China Merchants
Qianhaiwan Property Co., Ltd.
(2) Related rents
RMB Yuan
Starting Rental
Name of the owner Name of the tenant Description of the property date Stop date income
China Merchants Shekou Shenzhen China Merchants Property
Nanhai E-cool 2009.09.01 2023.08.31 (6,726,084)
Industrial Zone Co., Ltd. Co., Ltd.
China Merchants Shekou Shenzhen CM Power Supply Co.,
Land using right 2007.01.01 2011.12.31 (1,142,943)
Industrial Zone Co., Ltd. Ltd.
China Merchants Shekou Shenzhen China Merchants Property
Land using right 2010.01.01 2012.12.31 (3,809,176)
Industrial Zone Co., Ltd. Co., Ltd.
Shanghai CM Plaza Property
Subsidiary in Shanghai Shanghai CM Plaza 2011.01.01 2011.11.01 (1,650,947)
Co., Ltd.
Huajian Transportation
CM Property (Beijing) Ltd. CM Tower 2007.05.10 2011.06.30 (696,000)
Economic Development Center
Shenzhen China Merchants China Merchants Shekou Industrial Office building of New Time
2011.01.01 2011.12.31 5,317,001
Property Co., Ltd. Zone Co., Ltd. Plaza
Shenzhen China Merchants China Merchants International Office building of New Time
2011.01.01 2011.12.31 2,263,627
Property Co., Ltd. (China) Investment Co., Ltd. Plaza, industrial building
Shenzhen China Merchants China Merchants International IT Co., Nanhai E-cool, Science and
2011.01.01 2014.02.28 589,056
Property Co., Ltd. Ltd. Tech Building phase II
Shenzhen China Merchants
Shenzhen Beike Venture Co., Ltd. Beike Chuangye Building 2000.07.01 2015.06.30 333,330
Property Co., Ltd.
Shenzhen China Merchants China Merchants Group Shenzhen Office building of New Time
2010.11.01 2011.10.31 250,542
Property Co., Ltd. Major Project Cordinating Office Plaza
Shenzhen China Merchants
Shenzhen China Merchants Office building of New Time
International Shipping Agency Co., 2011.01.01 2011.12.31 218,963
Property Co., Ltd. Plaza, United Building
Ltd.
The above transactions are implemented according to agreement price.
(3) Related guarantees
RMB Yuan
The Guarantor The Beneficiary Amount Start date Due date Completed or
guaranteed not
CMSIZ. (Note 1) The Company 940,000,000 2009.05.26 2012.07.27 No
Shenzhen China Merchants Property
CMSIZ. (Note 1) 78,000,000 2011.05.26 2012.04.16 No
Co., Ltd.
CM Group Co., Ltd. (Note 2) The Company 2,000,000,000 2010.04.20 2017.04.20 No
Dafeng International Holdings Co., Ltd.
Eureka Investment Industrial Ltd. 323,580,000 2011.02.28 2011.11.28 No
(Note 3)
China Merchants Group (HK) Co., Ltd.
Eureka Investment Industrial Ltd. 2007.11.20 2013.12.24 No
(Note 3) 2,030,173,200
131
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
Dafeng International Co., Ltd. – the subsidiary of CM Shekou Industry Co., Ltd., has provided
guarantee for the future foreign currency contract of Eureka Investment Co., Ltd. – one of the
Company’s subsidiaries.
132
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(VI) (7) Related Parties and Related Transactions -continues
5. Related transactions – cont.
(3) Related guarantees – cont.
Note 1: China Merchants Sekou Industrial Zone Co., Ltd. provide guarantee for the loan of the
Company amount to RMB940,000,000; and provided guarantee for the loan of Shenzhen
China Merchants Property Co., Ltd. amount to RMB780,000,000.
Note 2: China Merchants Group Co., Ltd. provided guarantee to the Company for loan of
RMB2,000,000,000.
Note 3: Eureka Investment Co., Ltd. – one of the subsidiaries of the Company, raised loan of
USD297,000,000 (RMB1,922,065,200), HKD 130,000,000 (RMB108,108,000) from the
bank which was secured by CM Group (HK) Co., Ltd.; the loan of USD50,000,000
(RMB323,580,000) which was secured by Dafeng International Holdings Co., Ltd.
133
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(VI) (7) Related Parties and Related Transactions -continues
6. Receivable and payables due with related parties
RMB Yuan
Projects Related parties Amount at end of term Initial ammount
Other account Foshan China Merchants Longyuan Property
672,924,122 -
receivable Co., Ltd.
Other account Shenzhen TCL Optical-Electronics
227,159,525 291,155,457
receivable Technologies Ltd.
Other account China Merchants Guangming Technologies
- 13,960,000
receivable Garden Ltd.
Long-term receivable Huizhou Taitong Property Investment Co., Ltd. 141,577,000 134,579,000
Account payable China Merchants Shekou Industrial Zone Co.,
111,751,800 -
Ltd.
Other account payable CM Zhangzhou Development Zone Ltd. 393,929,535 393,929,535
Other account payable Shenzhen Nanshan Property Development Co.,
259,201,912 344,987,895
Ltd.
Other account payable Shenzhen Shekou Dazhong Investment Co.,
138,235,302 138,235,302
Ltd.
Other account payable China Merchants Guangming Technologies
74,095,728 1,055,028
Garden Ltd.
Other account payable Shenzhen China Merchants Financing Service
71,770,000 53,440,000
Co., Ltd.
Other account payable Shenzhen China Merchants Landmark Co.,
693,279 1,838,494
Ltd.
Other account payable China Merchants Hanghua Technologies and
528,151 528,151
Trade Center Co., Ltd.
Other account payable Tianjin Xinhai real Estate Development Co.,
106,081,399 133,081,399
Ltd.
Shenzhen China Merchants Landmark Co.,
Long-term payable 1,200,000 1,200,000
Ltd.
Dividend payable Shenzhen Nanshan Property Development Co.,
39,604,987 39,604,987
Ltd.
(VII) Contingency
As of June 30, 2011, the Company has provided guarantees for property mortgages to the banks
totaled to RMB74,887,795 (December 31, 2010: RMB205,889,457). 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
RMB Yuan
Items End of term Beginning of term
Signed but not yet recognized in the financial statements
- commitment of long-term asset purchasing - 2,743,729
- Outsourcing contract with large amount - -
－Real estate development projects 7,691,306,417 7,570,722,695
－Investment commitment to the outside - -
Total 7,691,306,417 7,573,466,424
134
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(VIII) Commitments - continues
(2) Operational leasing commitment
By the balance sheet date, information on irrevocable operation lease contract signed with outside,
as follows:
RMB Yuan
Items End of term Beginning of term
Minimum lease payments of irrevocable operation lease:
The first year since the balance sheet date. 31,064,794 44,307,562
The Second years since the balance sheet date. 29,422,208 41,559,497
The Third years since the balance sheet date. 28,822,025 41,335,434
The following years. 289,567,848 346,187,586
Total 378,876,875 473,120,079
(IX) Post-balance-sheet issues
No post-balance-sheet issue with the Company up to the date of this report.
(X) 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 utilities, and property management.
Segment report adopts same accounting policies and measurement basis with those adopted in
preparing of this financial statement.
135
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(X) Segment report - continues
(1) Segment report data
RMB Yuan
Property development Public Utilities Property management Unclassified projects Neutralized between segments Total
Same period last Same period last Same period last Same period
Current year Same period last year Current year year Current year year Current year year Current year last year Current year Same period last year
Turnover
Income from external trade 7,699,951,909 6,460,083,143 276,284,982 321,265,272 249,822,266 199,046,472 - 759,038 (134,574,013) - 8,091,485,144 6,981,153,925
Income among the segments 8,684,000.00 - - - - - - (8,684,000) - - -
Total turnover of the segments 7,708,635,909 6,460,083,143 276,284,982 321,265,272 249,822,266 199,046,472 - 759,038 (143,258,013) - 8,091,485,144 6,981,153,925
Adjusted items: -
Total turnover in the financial statement
Operation cost 3,951,072,216 3,725,031,407 197,974,756 236,716,661 214,119,708 165,473,332 - 142,333 (121,744,969) - 4,241,421,711 4,127,363,733
Segment operation profit (loss) 3,757,563,693 2,735,051,736 78,310,226 84,548,611 35,702,558 33,573,140 - 616,705 (21,513,044) - 3,850,063,433 2,853,790,192
Adjusted items:
Business tax and surcharge 1,265,913,921 851,678,388 1,163,599 815,766 13,626,542 10,431,093 - - - - 1,280,704,062 862,925,247
Sales expense 159,949,829 112,145,064 - - - - - - - - 159,949,829 112,145,064
Administrative expense 121,742,510 71,161,608 5,204,184 6,674,145 14,520,181 13,060,686 1,625,854 10,282,955 - - 143,092,729 101,179,394
Financial expenses 24,934,426 (15,283,182) (21,585,029) (272,842) (2,203,510) (1,519,832) (73,430,482) 20,129,090 - - (72,284,595) 3,053,234
Asset impairment loss (4,617) (2,861) - - - - - - - - (4,617) (2,861)
Income from change of fair value - - - - - - 15,884,266 29,917,874 - - 15,884,266 29,917,874
Investment income 70,203,918 2,927,006 - - 353,941 390,684 (19,295,749) 22,136,264 - - 51,262,110 25,453,954
Operation profit 2,255,231,542 1,718,279,725 93,527,472 77,331,542 10,113,286 11,991,877 68,393,145 22,258,798 (21,513,044) - 2,405,752,401 1,829,861,942
Non-operational income 3,271,512 3,396,091 3,500 4,912,894 84,723 601,256 - - - - 3,359,735 8,910,241
Non-operational expenditure 315,766 2,655,341 2,279,218 2,278,486 52,180 169,858 - - - - 2,647,164 5,103,685
Total profit 2,258,187,288 1,719,020,475 91,251,754 79,965,950 10,145,829 12,423,275 68,393,145 22,258,798 (21,513,044) - 2,406,464,972 1,833,668,498
Income tax 559,551,066 405,867,659 23,093,300 18,360,567 4,088,814 4,512,537 - 6,001,442 - - 586,733,180 434,742,205
Net profit 1,698,636,222 1,313,152,816 68,158,454 61,605,383 6,057,015 7,910,738 68,393,145 16,257,356 (21,513,044) - 1,819,731,792 1,398,926,293
136
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(X) Segment report - continues
(1) Segment report data – cont.
RMB Yuan
Property development Public Utilities Property management Unclassified projects Neutralized between segments Total
Same period last Same period last Same period last Same period last
Current year Same period last year Current year year Current year year Current year year Current year year Current year Same period last year
Total asset of the segments 98,488,888,761 48,700,383,337 3,608,615,712 3,770,461,248 493,035,767 472,737,757 7,016,681,792 23,312,528,448 (43,903,975,133) (24,470,465,895) 65,703,246,899 51,785,644,895
Total asset in the financial
98,488,888,761 48,700,383,337 3,608,615,712 3,770,461,248 493,035,767 472,737,757 7,016,681,792 23,312,528,448 (43,903,975,133) (24,470,465,895) 65,703,246,899 51,785,644,895
statements
Total liability of the segments 65,981,198,791 35,548,838,318 2,626,208,732 2,785,938,164 400,537,537 36,330,819 6,429,622,437 17,841,550,683 (32,420,078,717) (24,470,465,895) 43,017,488,780 31,742,192,089
Total liability in the financial
65,981,198,791 35,548,838,318 2,626,208,732 2,785,938,164 400,537,537 36,330,819 6,429,622,437 17,841,550,683 (32,420,078,717) (24,470,465,895) 43,017,488,780 31,742,192,089
statements
Supplementary info.
Depreciation 9,143,609 6,901,811 4,643,891 8,904,500 1,125,785 1,118,584 - - - - 14,913,285 16,924,895
Amortized 86,510,642 78,384,924 - 4,873 - - - 95,552 - - 86,510,642 78,485,349
Interest income 36,421,377 45,593,691 12,743,975 1,240,872 484,895 1,639,772 1,373,154 310,794 - - 51,023,401 48,785,129
Interest expense 98,487,009 13,771,325 5,429,211 8,141,207 - - - - - - 103,916,220 21,912,532
Impairment recognized in current
(4,167) (2,861) - - - - - - - - (4,167) (2,861)
term
Investment gains recognized with
long-term equity investment on 45,255,378 - - - 353,941 - - (592,236) - - 45,609,319 (592,236)
equity basis
Amount of long-term equity
759,653,571 - - - 5,041,405 - - 615,920,380 - - 764,694,976 615,920,380
investment on equity basis
Non-current asset other than
5,186,485,320 4,679,503,497 116,215,725 100,440,141 9,147,603 12,519,734 149,320,695 142,052,666 - - 5,461,169,343 4,934,516,038
long-term equity investment
Capital expenditure 10,924,291 252,596,902 12,907,121 806,933 1,827,418 1,286,592 - 56,400 - - 25,658,830 254,746,827
Incl. Expenditure of
- - 12,758,921 656,918 913,709 - - - - - 13,672,630 656,918
construction-in-process
Expenditure for purchasing of
9,291,308 3,225,824 148,200 150,015 913,709 1,286,592 - 56,400 - - 10,353,217 4,718,831
fixed assets
Expenditure for purchasing of
- - - - - - - - - - - -
intangible assets
Expenditure for purchasing of
1,632,983 249,371,078 - - - - - - - - 1,632,983 249,371,078
investment property
Non-cash expenses other than
- - - - - - - - - - - -
depreciation and amortizing
137
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(X) Segment report - continues
(2) Income from external trade categorized by source territories and non-current assets
categorized by locations
RMB Yuan
Amount occurred
Occurred current in same period last
Items term year
External trade income from mainland China 8,144,325,918 6,981,153,925
External trade income from Hong Kong and abroad - -
Total 8,144,325,918 6,981,153,925
RMB Yuan
Items End of term Beginning of term
Non-current asset located in mainland China 4,967,381,057 5,003,573,235
Non-current asset located in Hong Kong and 149,320,695 145,631,405
abroad
Total 5,116,701,752 5,149,204,640
(XI) Financial Instruments and Risk Management
Financial instruments adopted by the Group are available-for-sale financial assets, long-term
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 Group are illustrated hereafter. The executive team of the Company have been monitoring and
controlling over the risk exposures to constrain them in a limited 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.
138
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(XI) Financial Instruments and Risk Management - continues
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 June 30, 2011, 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.
RMB Yuan
Items End of term Beginning of term
Cash and cash equivalents 351,993,839 766,468,367
Other account receivable 696,631 811,826
Long-term receivable 148,976,670 145,147,392
Other account payable 1,294,210,760 1,157,654,458
Short-term loans 365,062,956 472,132,283
Long-term loans due in 1 year 970,740,000 661,515,187
Long-term borrowings 3,576,885,600 4,402,688,087
Note: As of June 30, 2011, except for the above assets and liabilities accounted in HKD or USD,
the Company has the book principal of USD180,000,000 (RMB1,164,888,000) purchased in
term of foreign currency future contract without transferring of principal.
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.
139
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(XI) Financial Instruments and Risk Management - continues
1.2 Credit risks
As at June 30, 2011, 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 counter parties 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.
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.
140
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(XI) Financial Instruments and Risk Management - continues
1.3 Liquidity risk – cont.
The due dates of financial liabilities held by the Company on retained contract liabilities without
discounted to cash is as the followings:
RMB Yuan
Book value Gross value within 1 yr 1-5 yrs over 5 yrs
Monetary capital 8,967,712,438 8,967,712,438 8,967,712,438 - -
Account receivable 88,878,553 88,878,553 88,878,553 - -
Other account receivable 4,276,608,466 4,276,608,466 4,276,608,466 - -
Non-current asset due in 1
969,987 969,987 969,987 - -
year
Long-term receivable 1,297,613,656 1,297,613,656 - 1,297,613,656 -
Short-term loans (2,433,062,956) (2,433,062,956) (2,433,062,956) - -
Account payable (4,922,342,738) (4,922,342,738) (4,922,342,738) - -
Interest payable (84,337,866) (84,337,866) (84,337,866) - -
Dividend payable (375,533,977) (375,533,977) (375,533,977) - -
Other account payable (6,347,908,156) (6,347,908,156) (6,347,908,156) - -
Non-current liability due in
(2,458,362,972) (2,458,362,972) (2,458,362,972) - -
1 year
Long-term borrowings (10,829,222,300) (10,829,222,300) - (8,829,222,300) (2,000,000,000)
Long-term payable (72,703,760) (72,703,760) - (72,703,760) -
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;
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.
Levels of fair value measurement
For financial assets and financial liabilities measured by fair value in successive periods, the fair
value measuring is divided to the following 3 levels:
Level 1: Quotation of the similar asset or liability in an active market (not adjusted);
Level 2: Evaluation on input value of the asset or liability other than market quotation but can be
directly (for example from prices) or indirectly (for example calculated basing on
prices) observed.
141
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(XI) Financial Instruments and Risk Management - continues
2. Fair value – cont.
Levels of fair value measurement – cont.
Level 3: Input value of asset or liability decided on the basis of varieties other than observable
market data (unobservable).
RMB Yuan
End of term
Leval 1 Level 2 Level 3 Total
Transactional financial assets:
- Derivate financial assets 2,640,628 - - 2,640,628
Available-for-sale financial asset
- equity instruments - - - -
Total 2,640,628 - - 2,640,628
Transactional financial liabilities:
- Derivate financial liabilities 7,218,100 - - 7,218,100
Total 7,218,100 - - 7,218,100
RMB Yuan
Beginning of term
Leval 1 Level 2 Level 3 Total
Transactional financial assets:
- Derivate financial assets 846,539 - - 846,539
Available-for-sale financial asset
- equity instruments - - - -
Total 846,539 - - 846,539
Transactional financial liabilities:
- Derivate financial liabilities 20,824,615 - - 20,824,615
Total 20,824,615 - - 20,824,615
No shifting of fair value measuring on financial assets and liabilities between level 1 and 2
happened in the current year nor previous year.
142
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(XI) Financial Instruments and Risk Management - continues
3. Sensitivity analyse
3.1 Foreign currency risk
Foreign currency risks are mainly the influences of exchange rate fluctuation on monetary assets
and liabilities of the Company in foreign currency. Most of the Company’s foreign currency loans
are USD. the Company adopted future foreign currency contract to lock up the exchange rate to
avoid risks. On the other hand, for other monetary assets and liabilities in foreign currencies, the
Group capitalized most of the exchange gain/loss occurred into inventory costs.
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
RMB Yuan
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 22,499,421,422 100 - - 19,689,135,591 100 - -
individual
amount
No major
amount
individually
but with great
risk after - - - - - - -
combined
with others
with similar
credit risk
Other minor
other 4,366,808 - - - 3,215,197 - - -
receivables
Total 22,503,788,230 100 - - 19,692,350,788 100 - -
Ages of other receivable accounts
RMB Yuan
End of term Beginning of term
Propo Propo
rtion Bad debt rtion Bad debt
Age Amount % provision Book value Amount % provision Book value
within 1 yr 22,503,273,730 100 - 22,503,273,730 19,690,541,912 100 - 19,690,541,912
1-2 years - - - - 1,294,376 - - 1,294,376
2-3 years 514,500 - - 514,500 514,500 - - 514,500
143
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
Over 3 yrs - - - - - - - -
Total 22,503,788,230 100 - 22,503,788,230 19,692,350,788 100 - 19,692,350,788
(2) No other receivable account due from shareholders with 5% or over of shares of the Company
in the balance.
144
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2011 to June 30, 2011
(XII) Notes to major items in financial statements of the parent company - continues
1. Other account receivable – cont.
(3) Top other receivable accounts
RMB Yuan
Portion in total
Relation with the other
Name of the companies Company Amount Ages receivables (%)
Shenzhen China Merchants Property Subsidiary of the
5,118,410,565 1 年以内 23
Co., Ltd. Company
Shenzhen CM Power Supply Co., Subsidiary of the
2,264,000,000 within 1 yr 10
Ltd. Company
Shenzhen China Merchants Shangzhi Subsidiary of the
1,770,416,807 within 1 yr 8
Investment Co., Ltd. Company
Chengdu CM Beicheng Property Co., Subsidiary of the
1,655,899,218 within 1 yr 7
Ltd. Company
China Merchants Properties Subsidiary of the
1,401,664,145 within 1 yr 6
(Chongqing) Co., Ltd. Company
Total 12,210,390,735 54
(4) Receivables from related parties: See Note (XII)7(2)
145
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The year ended December 31, 2010
(XII) Notes to major items in financial statements of the parent company - continues
2. Long-term equity investment
(1) Details of long-term equity investment
RMB Yuan
Statement on Impairment
Balance at the Percentage of differences between provision
Calculatin Investment beginning of Balance at the share in the Voting power in the shareholding and Impairment provided this Cash dividend
Company invested in g basis cost term Changed by end of term firm % the firm % voting rights provision term of the term
China Merchants Guangming Equity
98,000,000 83,522,141 95,265,992 178,788,133 49% 49% Not applicable - - -
Technologies Garden Ltd. basis
Shanghai China Merchants Cost basis
3,000,000 3,000,000 - 3,000,000 10% 10% Not applicable - - -
Properties Co., Ltd.
Shenzhen CM Property Cost basis
400,000 400,000 - 400,000 20% 20% Not applicable - - -
Consultancy Ltd.
Shanghai China Merchants Cost basis
3,000,000 3,000,000 - 3,000,000 10% 10% Not applicable - - -
Real-estates Co., Ltd.
Shenzhen CM Property Co., Ltd. Cost basis
300,000,000 2,734,841,461 (2,076,481,429) 658,360,032 100% 100% Not applicable - - -
(Note 1)
Shenzhen China Merchants Cost basis
Shangzhi Investment Co., Ltd. 200,000,000 - 2,076,481,429 2,076,481,429 100% 100% Not applicable
(Note 1)
Shenzhen CM Power Supply Co., Cost basis
57,000,000 119,791,233 - 119,791,233 95% 95% Not applicable - - -
Ltd.
China Merchants Property Cost basis
22,500,000 36,460,597 - 36,460,597 90% 90% Not applicable - - -
Management Co., Ltd.
Shenzhen China Merchants Xin’an Cost basis
25,000,000 20,822,211 - 20,822,211 60% 60% Not applicable - - -
Properties Co., Ltd.
Eureka 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., Cost basis
27,000,000 27,000,000 - 27,000,000 90% 90% Not applicable - - -
Ltd.
CM (Chongqing) Ltd. Cost basis 27,000,000 27,000,000 - 27,000,000 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 Cost basis
127,500,000 127,500,000 - 127,500,000 51% 51% Not applicable - - -
Properties Co., Ltd.
Tianjing Zhaosheng Property Co., Cost basis
18,000,000 18,000,000 - 18,000,000 60% 60% Not applicable - - -
Ltd.
Suzhou CM Nanshan Property Co., Cost basis
120,000,000 120,000,000 - 120,000,000 60% 60% Not applicable - - -
Ltd.
Chengdu CM Property Co., Ltd. Cost basis 10,000,000 10,000,000 - 10,000,000 100% 100% Not applicable - - -
China Merchants Properties Cost basis
30,000,000 30,000,000 - 30,000,000 100% 100% Not applicable - - -
(Chongqing) Co., Ltd.
Chengdu China Merchants Beihu Cost basis
50,000,000 50,000,000 - 50,000,000 100% 100% Not applicable - - -
Property Co., Ltd.
CM Property Xiamen Co., Ltd. Cost basis 50,000,000 50,000,000 - 50,000,000 100% 100% Not applicable - - -
Fujan Zhongliansheng Property Cost basis
25,000,000 25,000,000 - 25,000,000 50% 50% Note 2 - - -
Development Co., Ltd.
China Merchants Property (Wuhan) Cost basis 30,000,000 - 30,000,000 30,000,000 100% 100% Not applicable
146
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The year ended December 31, 2010
Co., Ltd.
China Merchants Property Cost basis
50,000,000 - 50,000,000 50,000,000 100% 100% Not applicable
(Zhenjiang) Co., Ltd.
Zhenjiang Yingsheng Property Cost basis
6,045,000 - 6,045,000 6,045,000 100% 100% Not applicable
Development Co., Ltd.
Total 3,538,956,943 181,310,992 3,720,267,935 - - -
Note 1: For details please see Note (IV)1(13).
Note 2: For details please see Note (IV)1(11).
147
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The year ended December 31, 2010
(XII) Notes to major items in financial statements of the parent company - continues
2. Long-term equity investment – cont.
(2) Investment in affiliates and joint-ventures
RMB Yuan
Shares held by the Voting power of the Total liability at end of Total net asset at end of Total turnover at current Net profit of the current
Name of the Companies Company % Company in the entity % Total asset at end of term term term term term
I. Affiliates
China Merchants Guangming
49% 49% 357,191,886 186,738,537 170,453,349 1,440,000 (5,079,076)
Technologies Garden Ltd.
(3) The Company’s long-term equity invested subsidiaries as of June 30, 2011 were not limited in ability to transfer capital to the Company.
148
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The year ended December 31, 2010
(XII) Notes to major items in financial statements of the parent company - continues
3. Short-term loans
RMB Yuan
Items End of term Beginning of term
Loan by pledge - -
Pledged loan - -
Guarantee loan - -
Credit loan 2,216,506,000 998,021,500
Total 2,216,506,000 998,021,500
4. Non-current liabilities due in one year
(1) Details of non-current liabilities due in one year
RMB Yuan
Items End of term Beginning of term
Long-term loans due in 1 year 864,716,000 500,000,000
Bond payable due in one year - -
Long-term payable due in 1 year - -
Other non-current liabilities due in 1 year - -
Total 864,716,000 500,000,000
(2) Long-term loans due in 1 year
(a) Long-term loans due in one year
RMB Yuan
Items End of term Beginning of term
Loan by pledge - -
Pledged loan - -
Guarantee loan 400,000,000 -
Credit loan 464,716,000 500,000,000
Total 864,716,000 500,000,000
(b) Long-term loans due in 1 year top 5 in amount
RMB Yuan
End of term
Amount of
Interest foreign Amount of original
Loan provided by Commence date Terminate date Currency rates % currency currency
Financial Institution I 2009.04.24 2012.04.24 RMB 4.86 300,000,000
Financial Institution II 2009.05.26 2012.05.26 RMB 4.86 300,000,000
Financial Institution III 2009.06.10 2012.06.10 RMB 4.86 100,000,000
Financial Institution IV 2009.06.24 2012.06.24 RMB 4.86 100,000,000
Financial Institution V 2010.07.21 2012.01.21 USD Float 10,000,000 864,716,000
149
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The year ended December 31, 2010
(XII) Notes to major items in financial statements of the parent company - continues
5. Long-term loans
(1) Categories of long-term loans
RMB Yuan
Items End of term Beginning of
term
Loan by pledge -
Pledged loan -
Guaranteed loan (Note) 2,540,000,000 2,940,000,000
Credit loan 3,872,228,000 3,843,316,000
Entrusted loan - -
Total 6,412,228,000 6,783,316,000
Note: See Note (V)28(1)
(2) Long-term loans top 5 in amount
RMB Yuan
End of term
Interest Amount of foreign Amount of original
Loan provided by Commence date Terminate date Currency rates % currency currency
Financial Institution I 2010.04.20 2017.04.20 RMB 5.94 2,000,000,000
Financial Institution II 2009.07.21 2012.07.20 RMB 5.04 1,000,000,000
Financial Institution III 2009.07.27 2012.07.27 RMB 4.86 470,000,000
Financial Institution IV 2009.07.24 2012.07.23 RMB 4.86 400,000,000
Financial Institution V 2009.07.17 2014.07.17 RMB 5.472 330,000,000
Total 4,200,000,000
6. Investment income
(1) Detailed investment gains
RMB Yuan
Items Occurred current Amount occurred in
term same period last
year
Long-term equity investment gains on cost basis - -
Long-term equity investment gains on equity basis (2,734,008) (2,403,251)
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 - -
Investment gains from disposal of investment hold to expiration - -
Investment gains from disposal of available-for-sale financial
- -
assets
Others 22,581,942 22,409,110
Total 19,847,934 20,005,859
150
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The year ended December 31, 2010
(XII) Notes to major items in financial statements of the parent company - continues
7. Related Transactions
(1) Guarantees of related parties
RMB Yuan
Amount Completed or
The guarantor The beneficiary guaranteed Start date Due date not
Shenzhen CM
The Company Power Supply 194,148,000 2010.06.18 2013.06.18 No
Co., Ltd.
Shenzhen CM
The Company Power Supply 138,556,956 2011.03.10 2012.03.25 No
Co., Ltd.
Zhuhai Yuanfeng
The Company Property Co., 8,670,000 2009.11.27 2012.06.18 No
Ltd.
Fujan
Zhongliansheng
The Company Property 75,000,000 2011.06.27 2014.06.28 No
Development
Co., Ltd.
Eureka
The Company Investment 1,255,490,400 2010.01.05 2013.12.23 No
Industrial Ltd.
China Merchants Shekou
The Company 940,000,000 2009.05.26 2012.07.27 No
Industrial Zone Co., Ltd.
China Merchants Group
The Company 2,000,000,000 2010.04.20 2017.04.20 No
Co., Ltd.
151
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The year ended December 31, 2010
(XII) Notes to major items in financial statements of the parent company - continues
7. Related transactions – cont.
(2) Receivable and payable due with the related parties
RMB Yuan
Projects Related parties Amount at end of Initial amount
term
Dividend receivable Shenzhen China Merchants Property Co., Ltd. 1,913,775,223 1,913,775,223
Dividend receivable Suzhou CM Nanshan Property Co., Ltd. 59,407,480 182,635,545
Dividend receivable China Merchants (Suzhou) Co., Ltd. - 59,407,480
Dividend receivable Shanghai China Merchants Properties Co., Ltd. 13,298,824 13,298,824
Total 1,986,481,527 2,169,117,072
Other account receivable Shenzhen China Merchants Property Co., Ltd. 5,118,410,565 5,421,906,548
Other account receivable Shenzhen CM Power Supply Co., Ltd. 2,264,000,000 2,000,000,000
Shenzhen China Merchants Shangzhi Investment Co.,
Other account receivable 1,770,416,807 -
Ltd.
Other account receivable Chengdu CM Beicheng Property Development Co., Ltd. 1,655,899,218 793,380,770
Other account receivable China Merchants Properties (Chongqing) Co., Ltd. 1,401,664,145 1,351,114,146
Other account receivable Nanjing China Merchants Ruisheng Property Co., Ltd. 1,302,000,000 -
Other account receivable CM (Nanjing) Ltd. 1,214,700,000 2,144,700,000
Other account receivable Shanghai Jingyuan Property Development Co., Ltd. 1,040,622,677 1,001,489,668
Other account receivable Shanghai CM Fengrui Property Ltd. 700,879,200 700,879,200
Other account receivable Tianjing Zhaosheng Property Co., Ltd. 600,041,316 599,248,516
Other account receivable Zhuhai China Merchants Property Co., Ltd. 597,524,874 548,346,527
Other account receivable Fujan Zhongliansheng Property Development Co., Ltd. 523,055,000 -
Other account receivable CM Property Xiamen Co., Ltd. 512,500,000 -
Other account receivable Zhenjiang Yingsheng Property Development Co., Ltd. 508,082,600 -
Other account receivable Guangzhou China Merchants Real-estate Co., Ltd. 464,187,417 1,282,901,475
Other account receivable China Merchants Property (Wuhan) Co., Ltd. 410,975,455 -
Other account receivable Zhangzhou China Merchants Properties Co., Ltd. 406,771,900 406,716,900
Other account receivable Suzhou CM Nanshan Property Co., Ltd. 389,062,299 517,777,820
Other account receivable Chengdu China Merchants Beihu Property Co., Ltd. 332,887,496 213,133,617
Other account receivable Beijing Kanglade Property Development Co., Ltd. 313,207,158 286,983,158
Other account receivable Chengdu CM Property Co., Ltd. 289,693,108 242,957,993
Other account receivable Shanghai Fengyang Property Development Co., Ltd. 220,643,596 220,643,596
Other account receivable CM (Chongqing) Ltd. 100,015,001 100,000,001
Other account receivable Eureka Investment Industrial Ltd. 80,678,350 80,681,323
Other account receivable Foshan Xinjie Property Ltd. 39,139,788 35,551,640
Other account receivable Foshan CM Huidefeng Property Co., Ltd. 30,705,280 18,081,580
Other account receivable Shenzhen China Merchants Xin’an Properties Co., Ltd. 18,695,006 25,896,380
Shenzhen China Merchants Business Development
Other account receivable 16,097,293 2,000
Consultancy Co., Ltd.
Other account receivable Suzhou Shuanghu Property Co., Ltd. 7,344,066 -
Shenzhen Shekou Sea World Hotel Management Co.,
Other account receivable 1,745,605 -
Ltd.
Other account receivable Foshan Xincheng Property Co., Ltd. 1,085,932 -
Other account receivable Shenzhen Meiyue Property Development Co., Ltd. 65,110 55,110
Other account receivable Yunnan CM Chengtou Property Co., Ltd. 5,000 -
Other account receivable Shenzhen City Main Plaza Investment Co., Ltd. 2,000 -
Other account receivable China Merchants (Suzhou) Co., Ltd. - 212,554,011
Other account receivable Suzhou Shuanghu Property Co., Ltd. - 104,680,724
Other account receivable China Merchants Guangming Technologies Garden Ltd. - 13,960,000
Other account receivable Zhuhai Yuanfeng Property Co., Ltd. - 104,349
Total 22,332,803,262 18,323,747,052
152
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The year ended December 31, 2010
(XII) Notes to major items in financial statements of the parent company - continues
7. Related transactions – cont.
(2) Receivable and payable due with the related parties – cont.
RMB Yuan
Projects Related parties Amount at end of Initial amount
term
Other account payable Shenzhen CM Power Supply Co., Ltd. 2,448,056,7131,900,525,832
Other account payable Shanghai CM Minsheng Property Ltd. 521,751,870 183,032,337
Other account payable CM Property (Beijing) Ltd. 442,117,963 607,250,847
Other account payable Guangzhou China Merchants Real-estate Co., Ltd. 368,740,323 349,538,399
Other account payable Shenzhen CM Construction Co., Ltd. 287,864,464 150,783,764
Other account payable Shanghai CM Fengsheng Property Ltd. 231,525,183 267,669,457
Other account payable Shanghai China Merchants Properties Co., Ltd. 189,865,795 181,633,305
Other account payable Tianjing Zhaosheng Property Co., Ltd. 161,553,220 114,220,454
Other account payable Shenzhen China Merchants Property Management Co., Ltd. 149,706,161 155,596,500
Other account payable CM (Chongqing) Ltd. 142,882,436 93,271,426
Other account payable Shanghai Fengyang Property Development Co., Ltd. 136,717,220 83,150,426
Other account payable Tianjin China Merchants Properties Co., Ltd. 135,396,804 132,759,411
Other account payable Beijing CM Property Management Co., Ltd. 115,004,084 108,303,386
China Merchants Jiaming (Beijing) Property Development Co.,
Other account payable
Ltd. 103,329,154 123,329,154
Other account payable Shekou Xinghua Industrial Holdings Co., Ltd. 101,091,732 98,946,477
Other account payable Shanghai CM Fengrui Property Ltd. 98,797,039 81,127,410
Other account payable CM (Nanjing) Ltd. 96,359,014 192,889,813
Other account payable China Merchants Guangming Technologies Garden Ltd. 74,095,728 1,055,028
Other account payable Zhangzhou China Merchants Properties Co., Ltd. 66,823,976 96,530,810
Other account payable China Merchants Property (Zhenjiang) Co., Ltd. 49,777,274 -
Other account payable Shanghai CM Property Management Co., Ltd. 41,632,293 42,467,549
Other account payable China Merchants (Suzhou) Co., Ltd. 40,966,797 466,677,757
Other account payable Shenzhen CM Property Consultancy Ltd. 40,352,511 50,383,640
Other account payable Shanghai China Merchants Real-estates Co., Ltd. 30,497,188 30,498,688
Other account payable China Merchants Property (Wuhan) Co., Ltd. 26,610,750 -
Other account payable China Merchants Property Management Co., Ltd. 18,985,585 14,515,492
Other account payable Wuhan CM Property Management Co., Ltd. 15,321,248 18,305,889
Other account payable Nanjing China Merchants Ruisheng Property Co., Ltd. 14,862,097 -
Other account payable Zhangzhou CM Honglong Property Ltd. 13,865,965 13,865,965
Other account payable Shenzhen Taige Apartment Management Co., Ltd. 12,867,163 76,290,642
Other account payable Shenzhen CM Qile Property Management Ltd. 12,043,615 11,616,514
Other account payable Shenzhen CM Commercial Development Co., Ltd. 9,160,134 49,969,324
Other account payable CM Property Xiamen Co., Ltd. 8,782,642 48,500,000
Other account payable Shenzhen City Main Plaza Investment Co., Ltd. 3,943,887 30,136,096
153
China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The year ended December 31, 2010
Other account payable Shenzhen China Merchants Xin’an Properties Co., Ltd. 3,625,747 4,225,893
Other account payable Eureka Investment Industrial Ltd. 3,416,349 3,416,349
Other account payable Chengdu CM Property Co., Ltd. 3,138,750 -
Other account payable Zhenjiang Yingsheng Property Development Co., Ltd. 2,076,303 -
Other account payable Nanjing CM Property Management Co., Ltd. 1,044,327 4,038,353
Other account payable Beijing Kanglade Property Development Co., Ltd. 1,031,287 1,022,582
Other account payable Shenzhen Shekou Sea World Hotel Management Co., Ltd. - 12,366,964
Other account payable Foshan Xinjie Property Ltd. - 10,245,093
Other account payable Chengdu CM Beicheng Property Development Co., Ltd. - 9,000,000
Total 6,225,680,7915,819,157,026
7. Related transactions – cont.
(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.
154
China Merchants Property Development Co., Ltd.
Supplementary Information
The year ended December 31, 2010
(XIII) Supplementary Info.
1. Details of non-recurring gain/loss
RMB Yuan
Items Amount Remarks
Gain/loss of non-current assets (411,644) -
Tax refunding or exemption without official certification or exceeded authority -
Government subsidy recorded into current income account (other than those closely related to the
1,619,000 -
Company’s business operation, granted at fixed amount according to the national regulations)
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
Restoring of receivable account impairment provision tested individually - -
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 (494,786) -
Other gain/loss items satisfying the definition of non-recurring gain/loss account - -
Influenced amount of income tax (214,539) -
Influence on minority shareholders’ equity (after tax) (525,691) -
Total 27,660 -
154
China Merchants Property Development Co., Ltd.
Supplementary Information
The year ended December 31, 2010
(XIII) Supplementary info. – cont.
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 are according to “Information Disclosure Rules of PLC No.09 – calculating and disclosing
of net income on asset and earnings per share” (Revised 2010) issued by China Securities
Regulatory Commission.
Earnings per share
Diluted
Weighted average net Basic earnings earnings per
Profit of the report period income on asset % per share share
Net profit attributable to
common shareholders of the 7.77% 0.86 0.86
Company
Net profit attributable to the
common owners of the PLC
7.77% 0.86 0.86
after deducting of non-recurring
gains/losses
3. Analysis on irregular situation of items in the financial statements
RMB Yuan
Comparing Scale of
Items Current term amount change Causation of differences
Decreased by handover of NDF
Transactional
1 2,640,628 846,539 212% contracts in the period and
financial assets
fluctuation of NDF market prices
2 Prepayment 116,205,959 5,598,968 1975% Increase of project prepayment
Prepaid tax increased due to increase
3 Other current asset 1,554,093,471 980,538,674 58%
of property sales
4 Short-term loans 2,433,062,956 1,172,132,283 108% Expanding of business scale
Decreased by handover of NDF
Trade off financial
5 7,218,100 20,824,615 (65%) contracts in the period and
liabilities
fluctuation of NDF market prices
6 Notes payable - 275,616,189 (100%) Decrease of mature notes
Employees’ wage
7 107,910,392 207,232,511 (48%) Decreased by delivering of wages
payable
Tax payable increased due to
8 Tax payable 892,048,600 614,789,018 45%
increase of property sales
9 Dividend payable 375,533,977 124,209,948 202% Increase of dividend distribution
Non-current liability Increased due to approaching of
10 2,458,362,972 1,856,422,159 32%
due in 1 year long-term loan due date
Business tax and Tax increased due to increase of
11 1,280,704,062 862,925,247 48%
surcharge property sales
12 Sales expense 159,949,829 112,145,064 43% Expanding of business scale
Administrative
13 143,092,729 101,179,394 41% Expanding of business scale
expense
14 Financial expenses (72,284,595) 3,053,234 (2467%) Increase of exchange gains
Gain/loss from Decreased due to fluctuation of
15 15,884,266 29,917,874 (47%)
change of fair value NDF market
Increase of investment returns from
16 Investment income 51,262,110 25,453,954 101%
affiliates
17 Income tax expenses 586,733,180 434,742,205 35% Increase of total profit
154
