China Vanke Co., Ltd. 2010 Third Quarterly Report §1 Important Notice 1.1 The Board, the Supervisory Committee, Directors, members of the Supervisory Committee and senior management of the Company warrant that in respect of the information contained in this Quarterly Report, there are no misrepresentations or misleading statements, or material omission, and individually and collectively accept full responsibility for the authenticity, accuracy and completeness of the information contained in this Quarterly Report. 1.2 None of the Director, member of the Supervisory Committee and senior management fails to assure or disputes with the authenticity, accuracy and completeness of the contents of this Quarterly Report. 1.3 Deputy Chairman Qiao Shibo, Director Wang Yin and Director Jiang Wei were not able to attend the board meeting in person due to their business engagements and had authorised Director Yu Liang to represent them and vote on behalf of them. 1.4 This quarterly financial statements of the Company have not been audited. 1.5 The Company’s Chairman Wang Shi, Director and President Yu Liang, and Executive Vice President and Supervisor of Finance Wang Wenjin declare that the financial report contained in this Quarterly Report is warranted to be true and complete. 12 §2 Basic Corporate Information 2.1 Major accounting data and financial indicators (Unit: RMB) As at 30 September 2010 As at 31 December 2009 Changes Total assets 188,292,319,208 138,027,359,150 36.42% Shareholders’ equity(excluding minorityinterests) 40,255,221,614 37,375,888,061 7.70% Total Shares 10,995,210,218 10,995,210,218 - Net assets per share 3.66 3.40 7.70% From July to September 2010 Changes From January to September 2010 Changes Revenue 5,269,980,667 -29.12% 21,086,234,891 -24.66% Profit attributable to equity shareholders of the Company 459,505,335 6.07% 3,272,003,908 10.63% Net cash inflow from operating activities - - (1,207,363,590) -110.74% Net cash inflow from operating activities per share - - (0.11) -110.74% Basic earnings per share 0.042 6.07% 0.298 10.63% Diluted earnings per share 0.042 6.07% 0.298 10.63% Return on equity 1.15% Decrease 0.10percentage points 8.39% Decrease 0.45percentage points Note: 1. The net assets and net profit used to calculate the above-mentioned indicators refer to the equity and profit attributable to equity shareholders of the Company. 2. The above-mentioned return on equity is calculated by weighted average method. 2.2 Total number of shareholders and shareholding of the top 10 shareholders of non-restricted tradable shares as at the end of the Reporting Period As at the end of 30 September 2010, the total number of shareholders of the Company was 1,306,313 (including 1,276,270 holders of A shares and 30,043 holders of B shares). Total number of shareholders as at the end of the Reporting Period 1,306,313 Shareholdings of the top 10 shareholders of non-restricted tradable shares Serial No. Name of shareholders (in full) Total number of non-restricted tradable shares held as at the end of the Reporting Period Type 1 China Resources Co., Limited 1,619,094,766 A Share 2 Bank of China - E Fund Shenzhen Stock Exchange 100 Exchange-Traded Fund 150,556,325 A Share 3 Liu Yuansheng 133,791,208 A Share 4 China Life Insurance Company Limited– Dividend- Distribution– Individual Dividend- 005L-FH002 Shen 111,741,448 A Share 5 ICBC–Rongtong Shenzhen Stock Exchange 100 Index Securities Investment Fund 102,239,426 A Share 6 Morgan Stanley & Co. International PLC 100,240,821 A Share 7 CCB-Bosera Theme Industry Stock Securities Investment Fund 98,000,000 A Share 8 HTHK/CMGFSGUFP-CMG First State China Growth Fund 92,012,968 B Share 9 Toyo Securities Asia Limited-A/C Client 82,454,306 B Share 10 ICBC - China International Domestic Demand Dynamic Stock Securities Investment Fund 73,809,464 A Share As at the end of 30 September 2010, the total number of shares of the Company was 10,995,210,218, including 9,680,254,750 A shares and 1,314,955,468 B shares.3 2.3 Bond holdings of the Company’s top 10 bondholders as at the end of Reporting Period (1) Name of the top 10 bondholders of 08 Vanke G1 bonds and their bondholdings Serial No. Bondholder No. of bonds held 1 New China Life Insurance Company–Dividend Distribution–Individual Dividend -018L-FH002 Shen 5,548,262 2 China Petroleum Finance Co., Ltd. 4,157,662 3 China Pacific Insurance (Group) Co. Ltd. 3,433,312 4 China Life Insurance Company Ltd. 2,619,042 5 China Ping An Life Insurance Company Limited–Traditional–General Insurance Products 2,560,727 6 China Life Property and Casualty Insurance Company Limited –Traditional – General Insurance Products 1,820,000 7 CNPC Pension Scheme - ICBC 1,017,984 8 China Life Pension Company Limited–Internal Resources 1,000,000 9 China Property & Casualty Reinsurance Company Ltd. 776,162 10 Generali China Life Insurance–Investment Related Products–Stock Account 706,500 (2) Name of the top 10 bondholders of 08 Vanke G2 bonds and their bondholdings Serial No. Bondholder No. of bonds held 1 ICBC Credit Suisse Asset Management Co., Ltd – ICBC – Assets of Specific Clients 2,728,528 2 CCB – ICBC Credit Suisse Credit Tianli Bond Securities Investment Fund 2,346,450 3 ICBC- Harvest Stable Earning Bond Securities Investment Fund 2,059,405 4 China National Machinery Import & Export Corporation 1,500,759 5 206 Portfolio of National Social Security Fund, PRC 1,430,218 6 CCB–Fullgoal Tianfeng Surging Income Bond Securities Investment Fund 1,364,700 7 CNPC Pension Scheme - ICBC 972,256 8 801 Portfolio of National Social Security Fund, PRC 959,778 9 China Ping An Trust & Investment Co. Ltd – CMB Furui Life Individua 922,343 10 China Ping An Trust & Investment Co. Ltd – Bank Comm Furui Life Dividend Distribution 742,569 §3 Management Discussion and Analysis As the new construction projects which increased since the second half of 2009 were gradually launched during the Reporting Period, new housing supply rose steadily and sales activities reached a peak in September 2010. The area of newly launched projects in the 14 major cities on which China Vanke focused increased by approximately 100% in September when compared with the monthly average in the second quarter. Owing to the increase in supply, the overall transaction volume of residential properties in major cities in the third quarter surged when compared with the previous quarter, but was still significantly lower than that in the corresponding period of the previous year. When compared with the same period last year, the sales area of new residential properties in the above-mentioned cities in the third quarter declined by 35.9%. In view of the sales area to approved pre-sales area ratio, new housing supply in the third quarter surpassed that of sales in the same period, marking the end of the decline in home inventory that had started since 2009. It is expected that the new housing supply in the fourth quarter will remain high, while housing4 inventory available for sale will gradually rise. The land market showed signs of a cool-down in the first half of the current year, but saw a rebound in the third quarter, with reserve price and average transaction price higher than those in the second quarter. However, both reserve price and average transaction price had yet to return to their levels in 2009. On the whole, the main trends in the market that we see is property developers facing tighter liquidity, while the rebound in the land market is expected not to last long. At the end of the Reporting Period, to strengthen the effect of the previous round of macro adjustments and to further implement State Council’s “Notice regarding determination to curb rapidly rising housing price in certain cities”, the relevant ministries under the State Council successively introduced measures to impose new requirements in relation to the regulation of the property industry, including: all commercial banks suspend loans to families purchasing their third house and to those non local residents who cannot provide proof of local tax payment or proof of social insurance payment for more than one year; raise the down payment for first-time buyers of commodity housing to 30% or above; adjust deed tax and preferential tax policies for personal income tax, etc. As at the date of announcement of the Report, a number of cities have promulgated measures to limit the total number of properties bought by a single family. The aforesaid policies reinforce the State’s commitment to regulate the property market and guard against overly rapid rise in housing prices, which will have significant impact on the market. Since the introduction of the measures, the number of visitors to show apartments of projects being launched in general drops. Customers’ desire to buy declines significantly. It is expected that as the measures gradually take effect, investment-driven demand will further be restrained, while the overall market sales will slow down, inventory available for sale will increase, supply-demand balance will change to become more favourable for home purchasers, and demand from end-users will further dominate the market in the future. In view of the change in market environment, the Company will continue to adhere to its basic principles of “not hoarding land resources; not stalling home sale; not acquiring supreme land lot”, and will sell its housing units at a price with reference to home purchasers’ desired and acceptable level, in order to keep sales moving at a reasonable rate. As the Company has gained first mover advantage in project launch since the beginning of this year, it is not under too much sales pressure for the rest of the year. In addition, with its competitive edges in unique features and product mix, which sees a high proportion of small-sized residential units and furbished units, China Vanke is quite confident in continuing to surpass the overall market performance. In the third quarter, the Company’s product positioning continued to target at end users and the Company achieved satisfactory sales results. Its cumulative sales area and sales amount in the third quarter reached 2,808,000 sq m and RMB34.64 billion respectively, representing increases of 73.9% and 124.9% respectively from those of the corresponding period of 2009. From January to September 2010, the Company realized sales area and sales amount of 6,011,000 sq m and RMB71.42 billion respectively, representing 17.8% and 54.8% respectively from those of the corresponding period of 2009.5 Since completion of different projects occur on different dates in a year, the Company’s floor area completed between January and September 2010 represented a relatively small portion of the total area completed in the entire year. The booked area and booked revenue between January and September 2010 amounted to 2,160,000 sq m and RMB20.92 billion respectively, representing a decline of 39.0% and 24.2% respectively when compared with those of the same period last year. The Company realized revenue of RMB21.09 billion, representing a 24.7% decrease from that of the same period last year. With more projects to be completed and recognized in the fourth quarter, it is expected that the Company’s booked revenue in the fourth quarter will surpass the sum of those in the previous three quarters. As most of the projects booked in the corresponding period of the previous year consisted of projects sold during the trough period in 2008, booked earnings had improved considerably since the beginning of this year, with year-on-year growth in net profit significantly surpassing that of revenue. Between July and September, the Company achieved net profit of RMB460 million, representing a 6.1% increase from that of the same period last year. From January to September, the Company realized a total of RMB3.27 billion in net profit, representing a 10.6% increase when compared with that of the corresponding period of the previous year. As at the end of the Reporting Period, the Company had an area of 7,840,000 sq m sold but incomplete and not yet booked, with an aggregate contract amount of approximately RMB86.3 billion. Included in the consolidated statements was an area of 6,600,000 sq m sold but not yet booked, with a contract amount of RMB77.8 billion, representing increases of 40% and 44% when compared with those in the interim period. Since the proportion of furbished units has been rising in recent years and the period from completion of sale to satisfying the conditions for recognition has been prolonged, the number of properties sold but not yet booked has been increasing. Such trend is expected to continue for at least a year. Since the Company’s sales went well in the third quarter, with successive record high monthly sales in August and September, the Company’s cash and cash equivalents at the end of the Reporting Period rose significantly to RMB31.54 billion when compared with that at the end of the interim period, which far exceeded the aggregate amount of short-term borrowings and long-term borrowings due within one year of RMB15.83 billion. The Company’s financial position was further enhanced. Affected by substantial growth in advance receipts, the Company’s gearing ratio was 73.8%, slightly increased from that at the end of the interim period. However, advance receipts did not constitute pressure of repayment. The Company’s interest-bearing borrowings actually accounted for only 23.9% of its total assets. Of the interest-bearing borrowings, short-term borrowings accounted for only 35.2%. As at the end of the Reporting Period, the Company’s net gearing ratio was 27.2%, representing a decrease of 13.6 percentage points from 40.8% at the end of the interim period. As at the end of September, among the Company’s different types of inventories, completed properties (completed properties ready for sale) amounted to RMB5.24 billion, accounting for only 4.2%, representing a decline from that at the end of the interim period. The Company continued to maintain a healthy inventory structure.6 During the Reporting Period, the Company continued to adhere to its prudent investment strategy of “forgoing the opportunity rather than making wrong acquisitions”, leverage the edge of its geographical diversification, and control the risks of land acquisition. In the third quarter, the Company entered new markets of Qingyuan, Yangzhou, Langfang, with a total of 20 new projects. The total planned GFA of the aforesaid 20 new projects attributable to China Vanke’s equity holding amounted to 5,260,000 sq m. Of the new projects acquired between January and September 2010, the total planned GFA attributable to China Vanke’s equity holding amounted to 14,270,000 sq m. The average accommodation value of the newly added projects remained at a relatively low level of around RMB2,400. The Company is currently in a strong cash position, with cash sufficient to fund future development. The Company will continue to adopt prudent investment strategy and rapid development strategy, and acquire project resources necessary for property development at reasonable prices, and pay close attention to possible opportunities arising from market adjustment. §4 Significant Events 4.1 Significant changes and reasons for such changes in major items of the accounting statements and financial indicators of the Company √Applicable □Not applicable Items 30/9/2010 (RMB'000) 31/12/2009 (RMB'000) Change(+/-) Reasons for change Interest in jointly controlled entities 3,791,949.16 2,763,877.40 37.20% Increase of investment Other financial assets 88,483.63 255,622.80 -65.39% Disposal of available for sale financial assets Properties under development 65,814,360.88 41,872,964.96 57.18% Increase in property development Interest-bearing borrowings(Short term) 15,831,178.46 8,628,670.48 83.47% Change in debt structure Trade and other payables 88,775,815.29 55,244,411.87 60.70% Increase in investment for the development of projects with associates and jointly controlled entities Items 2010.1-9 (RMB'000) 2009.1-9 (RMB'000) Change(+/-) Reasons for change Revenue 21,086,234.89 27,988,969.28 -24.66% Difference in booked time of property development Cost of sales 13,509,556.74 20,414,159.49 -33.82% Difference in booked time of property development Financial income 447,777.18 183,521.35 143.99% Increase in dividends from investment of cost method Share of profits less losses of jointly controlled entities 70,433.01 -4,580.86 1637.55% More profits recognized from jointly controlled entities Attributable to minority interests 553,641.75 712,389.72 -22.28% Decreased in booked revenue of corporate projects 4.2 Progress of significant events and analysis of their impact and solutions √Applicable □Not applicable On 15 September 2009 the “Resolution Regarding The Proposal On The Public Offer Of New A Shares” was approved at the Company’s First Special General Meeting of 2009. Validity period of the resolution is: 12 months from the date of shareholders’ meeting in which the resolution was reviewed and approved. As at 15 September 2010, the above-mentioned resolution of shareholders’ meeting was due. According to the relevant regulations, the “Resolution Regarding The Proposal On The Public Offer Of New A Shares” reviewed and approved at the first Special General Meeting of 2009 became invalid. 4.3 Implementation of the undertakings given by the Company, shareholders and beneficial controllers7 √ Applicable □Not applicable Undertaking Details Implementation Other undertakings China Resources National Corporation (“CRNC”) – the parent company of CRC, being the Company’s original single largest shareholder and the present single largest shareholder, gave a significant undertaking to the Company in 2001: CRNC would provide as much support to the Company as it did in the past, as long as such support was beneficial to the Company’s development, and that it would remain impartial in the event of any competition between the investment projects of the Company and that of CRNC and its subsidiaries, and in the event of any disagreements or disputes arising from horizontal competition. CRNC has fulfilled its undertakings. 4.4 Warning of and explanation for the accumulated net profit from the beginning of the year to the end of the next reporting period forecast to be a probable loss or to be significantly differed from that of the corresponding period of the previous year □Applicable √Not applicable 4.5 Other major events and their explanations 4.5.1 Securities investments □Applicable √Not applicable 4.5.2 Equity interests held in other listed companies √Applicable □Not applicable (Unit: RMB) Stock code Stock abbreviation Initial investment amount Percentage of shareholdings Booked value as at the end of the Reporting Period Gains/(losses) from January to September in 2010 Changes in equity attributable to equity shareholders from January to September in 2010 000001 Shenzhen Development Bank Co., Ltd – A - - - 43,480,910.81 (61,866,882.60) 600697 Changchun Eurasia Group Co., Ltd - - - 44,208,569.16 (40,907,808.62) 600680 Shanghai Potevio Co., Ltd - - - 28,385,048.22 (32,361,871.93) 600751 SST Tianjin Marine Shipping Co., Ltd. 143,600.00 0.04% 143,600.00 - - Total 143,600.00 - 143,600.00 116,074,528.19 (135,136,563.15) Note: 1. The above-mentioned equity interests are legal person shares held by the Company over the years. Up till now, the SST Tianjin Marine Shipping Co., Ltd has not undergone share reform. 2. During the Reporting Period, all equity interests of Shenzhen Development Bank Co., Ltd – A, Changchun Eurasia Group Co., Ltd, and Shanghai Potevio Co., Ltd held by the Company were sold, and gains from the disposal was recognized as “Investment Income”. 4.5.3 Investor relations activities such as meetings, communications and handling of inquiries during the Reporting Period Type of Activities Time Location Approach Classification of visitors Issues discussed and information provided CITIC Securities meeting 2010.7 Qingdao Face to face meeting Investors including securities companies, funds,etc BNP meeting 2010.7 Hong Kong Face to face meeting Investors including securities companies, funds,etc Credit Suisse meeting 2010.7 Hong Kong Face to face meeting Investors including securities companies, funds,etc CLSA meeting 2010.7 Hong Kong Face to face meeting Investors including securities companies, funds, etc CITIC Securities meeting 2010.7 Shenzhen Face to face meeting Investors including securities companies, funds, etc Interim results presentation 2010.8 Hong Kong, Shenzhen (Shanghai, Beijing) Face to face meeting Investors including securities companies, funds,individual investors, etc Credit Suisse meeting 2010.8 Hong Kong Face to face meeting Investors including securities companies, funds,etc BNP meeting 2010.8 Hong Kong Face to face meeting Investors including securities companies, funds,etc Published information including the Company’s regular reports. (I) Major issues discussed: (1) The Company’s daily operations; (2) The Company’s development strategies; (3) The Company’s opinion on the changes in the industry. (II) Major information provided:8 Shenyin Wanguo meeting 2010.8 Beijing Face to face meeting Investors including securities companies, funds,individual investors, etc Guotai Junan meeting 2010.8 Shenzhen Face to face meeting Investors including securities companies, funds, etc Nomura Securities meeting 2010.9 Tokyo Face to face meeting Investors including securities companies, funds, etc CITIC Securities meeting 2010.9 Dongguan Face to face meeting Investors including securities companies, funds, etc UBS meeting 2010.9 Hong Kong Face to face meeting Investors including securities companies, funds, etc CLSA meeting 2010.9 Hong Kong Face to face meeting Investors including securities companies, funds, etc Note: The above-mentioned meetings included one-on-one meetings, small group meetings andlarge group presentation. The Company received or met with investors from over 50 companies. Securities companies During the Reporting Period Shenzhen, Guangzhou,Zhongshan, Xiamen, Sanya, Changsha, Shanghai, Hangzhou,Nanjing, Wuxi, Ningbo,Beijing, Tianjin,Shenyang, Changchun, Small group or one-on-one Dalian, Qingdao,Wuhan, Chengdu, Chongqing,, Xi’an , etc Goldman Sachs, Great Wall Securities, Macquarie, Deutsche Bank, CLSA, UBS, Credit Suisse, Shenyin Wanguo,Nikko Cordial Securities, CITIC Securities, Orient Securities, BNP, Essence Securities, Citi, DBS VickersSecurities, Morgan Stanley, HSBC, Samsung Securities, CICC, Guangfa Securities, Gaohua Securities, Changjiang Securities, NomuraSecurities, JP Morgan, Qilu Securities, Masterlink Securities, Daiwa Securities, Royal Bank of Scotland, Clairvoyance, Daewoo Securities Galaxy Securities, Keefe, Bruyette & Woods, and Merrill Lynch, etc Fund and other investment companies and individual investors During the Reporting Period Shenzhen, Guangzhou,Zhongshan, Xiamen,Sanya, Changsha,Shanghai, Hangzhou,Nanjing, Wuxi, Ningbo,Beijing, Tianjin,Shenyang, Changchun, Dalian, Qingdao,Wuhan, Chengdu,Chongqing,, Xi’an , etc Small group or one-on-one Cephei Investment, Bosera Fund, Soros Fund Management, Invesco Great wall Fund, Wanjia Fund, ABN AMRO TEDA, China Orient Asset Management, Tianhong Fund, Yinhua Fund, Orient Fund, Southern Fund, Fortis Haitong Investment Management, China AMC, Taikang Life, CCB Principal AMC, Franklin Templeton Sealand Fund, Hua An Fund, Huashang Fund, AETNA Fund CSCFund, SinoPac Fund, [Uni-President Fund, HSBC Fund, Invesco Fund, Fubon Fund, Shin Kong Life, MassMutual Mercuries Life, TransGlobe Life, Korea Development Bank, Taiyo Life Insurance, Great Wall Fund, LionFund, Changjiang Pension, JF Asset Mgmt, Lazard Asset Management, Mondrian, BaringAssets, Abu Dhabi Investment Authority, Capital Research, Chuo Mitsui Investment, BSIGenerale, DBSAM, HTCapital, PHEIM, Chilton Investment Company, The BlackstoneGroup, Cadwalader,Wickersham & Taft, William McAree Investment Partners,Blackrock, TT International, Boyer Allan, Noondays, Moore Capital, Tiger Asia, Buenavista Fund, Bennelong AssetManagement, First State Investment, Keywise, Harvest Global Investments, China LifeInvestment, Wellington, Government ofSingapore Investment Corporation, StandardLife Investments, Blue Ridge Capital LLC, Baillie Gifford, Penta, Spinner AssetManagement, Tuboron Partners, Highbridge, AMP, Perpetual, Och-Ziff, Trivest, Prudential, BroadPeak, Waddell&Reed, NSSF, BOC GroupLife Assurance, EMIC, TM Capital Partners, Tudor Investments Corporation, TantallonCapital, Resolution Capital, Mitsubishi UFJAsset Management, Colonial First State, Cathay Life, Kingdon Capital, NeubergerBerman, Morgan Stanley InvestmentManagement, Mount Kellett Capital, SumitomoMitsui Asset, Clough Capital Partners, BuenaVista, etc I9 4.5.4 Other major events and their explanations √ Applicable □Not applicable (1) The Company did not provide any funds for use by its controlling shareholder and its related parties, nor did the Company provide any guarantee to third parties in violation of regulations and procedures; (2) Corporate bonds of the Company During the Reporting Period, the Company distributed the second-year interest of the Company’s “08 Vanke G1” and “08 Vanke G2” corporate bonds. 4.6 Investment in derivatives √ Applicable □Not applicable Remarks on risk analysis and management of derivative positions during the Reporting Period (including but not limited to market risk, liquidity risk, credit risk, operational risk and legal risk, etc.) In order to limit the risk association with the fluctuations of interest rate, the Company entered into Interest Rate Swap(IRS) agreements and would charge the counterparty an interest according to floating interest, in order to pay the floating-rate interest to the original lender, and pay a fixed rate to the counter party. IRS is used to control the risk arising from the change in interest rate by fixing a forward interest rate on the notional amount during the term of the foreign currency loan. Change in market price or fair value of the derivatives during the Reporting Period, as well as the method, related assumptions and parameters used to analyse the fair value of derivatives should be disclosed The effect of the change in the IRS value on the Company’s profit or loss during the Reporting Period was RMB (16,275,323.80). The value of the Company’s IRS is determined with reference to the fair value appraised as at 30 September 2010. Remarks on whether there is a material change in the accounting policy and principles for derivatives during the Reporting Period No Professional opinions from independent directors, sponsor or financial adviser on the Company’s investment and risk management of derivatives The Company’s independent directors are of the view that financial instruments such as IRS reduced the probable loss associated with foreign currency loan in the event of significant fluctuations in interest rate. The relevant arrangement of the Company has been prudent and reasonable. 4.6.1 Derivative positions as at the end of the Reporting Period √Applicable□ Not applicable (Unit: RMB) Types of contracts Contract amount as at the beginning of the period Contract amount as at the end of the period Profit/loss during the Reporting Period Contract amount as a percentage of net assets as at the end of the period Interest rate swap (IRS) agreement 462,610,550.00 1,717,895,966.99 (16,275,323.80) 4.27% Total 462,610,550.00 1,717,895,966.99 (16,275,323.80) 4.27%10 Consolidated income statement for the three months ended 30 September 2010 (Expressed in Renminbi Yuan) Jul-Sep 2010 Jul-Sep 2009 Revenue 5,269,980,667 7,435,491,349 Cost of sales (3,462,667,296) (5,573,311,057) Gross profit 1,807,313,371 1,862,180,292 Other income 46,946,815 162,727,234 Distribution costs (400,325,189) (383,036,687) Administrative expenses (312,306,496) (327,000,586) Other expenses (27,242,972) (38,568,672) Results from operating activities 1,114,385,529 1,276,301,581 Financial income 74,176,302 48,789,145 Financial expenses (87,634,546) (239,522,024) Net finance costs (13,458,244) (190,732,879) Share of profits less losses of associates (2,819,019) 20,806,265 Share of profits less losses of jointly controlled entities (6,339,067) 13,749,178 Profit before taxation 1,091,769,199 1,120,124,145 Income tax (426,944,430) (550,369,440) Profit for the period 664,824,769 569,754,705 Attributable to: Profit attributable to equity shareholders of the Company 459,505,335 433,199,832 Minority interests 205,319,434 136,554,873 Profit for the period 664,824,769 569,754,705 Earnings per share Basic 0.042 0.039 Diluted 0.042 0.039 Other comprehensive income for the period 22,762,535 (11,717,794) Total comprehensive income for the period 687,587,304 558,036,911 Attributable to: Equity shareholders of the Company 482,267,870 421,482,038 Minority interests 205,319,434 136,554,87311 Consolidated income statement for the nine months ended 30 September 2010 (Expressed in Renminbi Yuan) Jan-Sep 2010 Jan-Sep 2009 Revenue 21,086,234,891 27,988,969,280 Cost of sales (13,509,556,744) (20,414,159,486) Gross profit 7,576,678,147 7,574,809,794 Other income 253,601,462 216,288,710 Distribution costs (1,006,726,766) (934,484,166) Administrative expenses (887,754,439) (908,874,865) Other expenses (62,397,259) (106,972,915) Results from operating activities 5,873,401,145 5,840,766,558 Financial income 447,777,180 183,521,350 Financial expenses (473,806,265) (586,361,344) Net finance costs (26,029,085) (402,839,994) Share of profits less losses of associates 14,848,848 184,172,621 Share of profits less losses of jointly controlled entities 70,433,006 (4,580,863) Profit before taxation 5,932,653,914 5,617,518,322 Income tax (2,107,008,256) (1,947,536,362) Profit for the period 3,825,645,658 3,669,981,960 Attributable to: Profit attributable to equity shareholders of the Company 3,272,003,908 2,957,592,239 Minority interests 553,641,750 712,389,721 Profit for the period 3,825,645,658 3,669,981,960 Earnings per share Basic 0.298 0.269 Diluted 0.298 0.269 Other comprehensive income for the period (23,439,217) 36,823,021 Total comprehensive income for the period 3,802,206,441 3,706,804,981 Attributable to: Equity shareholders of the Company 3,248,564,691 2,994,415,259 Minority interests 553,641,750 712,389,72212 Consolidated balance sheet as at 30 September 2010 (Expressed in Renminbi Yuan) 30 Sep 2010 31 Dec 2009 Non-current assets Property, plant and equipment 1,363,555,187 1,387,295,710 Lease prepayments 80,718,586 81,966,326 Investment properties 144,281,323 228,143,158 Construction in progress 748,560,145 593,208,234 Interest in associates 766,290,191 709,512,280 Interest in jointly controlled entities 3,791,949,164 2,763,877,398 Other financial assets 88,483,632 255,622,796 Deferred tax assets 1,345,872,395 1,265,649,479 Total non-current assets 8,329,710,623 7,285,275,381 Current assets Inventories 66,584,154 59,998,046 Properties held for development 52,430,335,639 43,259,163,354 Properties under development 65,814,360,878 41,872,964,957 Completed properties for sale 5,241,495,962 5,311,972,269 Trade and other receivables 24,866,376,628 17,235,320,841 Financial derivatives - 740,471 Cash and cash equivalents 31,543,455,324 23,001,923,831 Total current assets 179,962,608,585 130,742,083,769 TOTAL ASSETS 188,292,319,208 138,027,359,150 CAPITAL AND RESERVES Share capital 10,995,210,218 10,995,210,218 Reserves 29,260,011,396 26,866,813,259 Awarded Shares purchased for the Employees’ Share Award Scheme - (486,135,416) Total equity attributable to equity shareholders of the Company 40,255,221,614 37,375,888,061 Minority interests 9,081,511,570 8,032,624,393 TOTAL EQUITY 49,336,733,184 45,408,512,45413 Consolidated balance sheet as at 30 September 2010 (continued) (Expressed in Renminbi Yuan) 30 Sep 2010 31 Dec 2009 Non-current liabilities Interest-bearing borrowings and bonds(Long term) 29,131,764,583 23,296,534,102 Deferred tax liabilities 1,080,660,062 1,221,268,786 Other long term liabilities 8,550,657 8,408,145 Provisions 43,567,523 34,355,815 Total non-current liabilities 30,264,542,825 24,560,566,848 Current liabilities Interest-bearing borrowings(Short term) 15,831,178,460 8,628,670,478 Financial derivatives 15,534,853 - Trade and other payables 88,775,815,288 55,244,411,867 Current taxation 4,068,514,598 4,185,197,503 Total current liabilities 108,691,043,199 68,058,279,848 TOTAL LIABILITIES 138,955,586,024 92,618,846,696 TOTAL EQUITY AND LIABILITIES 188,292,319,208 138,027,359,15014 Consolidated cash flow statement for the nine months ended 30 September 2010 (Expressed in Renminbi Yuan) Jan-Sep 2010 Jan-Sep2009 Cash flows from operating activities Cash receipts from customers 54,283,454,889 41,355,694,164 Cash paid to suppliers (42,941,813,416) (21,466,720,733) Cash paid to and for employees (1,131,132,831) (868,308,952) Cash paid for other taxes (6,603,238,943) (5,391,007,399) Cash generated from other operating activities 5,511,421,036 1,799,176,130 Cash used in other operating activities (10,326,054,325) (4,187,623,950) Net cash generated from / (used in) operating activities (1,207,363,590) 11,241,209,260 Cash flows from investing activities Acquisitions of subsidiaries, net of cash acquired (450,226,495) (569,017,159) Acquisitions of interest in associates, jointly controlled entities and other investments (1,155,471,630) (202,806,289) Acquisitions of minority interests (368,305,267) - Acquisitions of property, plant and equipment and construction in progress (56,160,940) (84,475,241) Payment for acquisitions of subsidiaries in previous year (26,164,230) - Proceeds from disposals of subsidiaries 6,519,582 4,400,259 Proceeds from disposal of property, plant and equipment 458,787 88,802,961 Proceeds from disposal of interest in other long term investments 158,403,841 90,477,205 Proceeds from other investment activities 826,706,405 172,237,517 Proceeds from investment income 439,300,965 228,763,122 Cash used in other investment activities (993,726,314) - Net cash used in investing activities (1,618,665,296) (271,617,625)15 Consolidated cash flow statement for the nine months ended 30 September 2010 (Expressed in Renminbi Yuan) Jan-Sep 2010 Jan-Sep2009 Cash flows from financing activities Capital injections from minority interests of subsidiaries 1,594,241,499 157,235,000 Proceeds from loans and borrowings 21,874,453,038 17,866,920,394 Repayment of loans and borrowings (8,882,790,882) (18,822,758,840) Dividends paid to equity shareholder (771,376,582) (549,760,511) Dividends paid to minority shareholder (332,449,919) (46,375,168) Interests paid (1,949,316,947) (1,938,638,605) Net cash (used in) / generated from financing activities 11,532,760,207 (3,333,377,730) Net increase in cash and cash equivalents 8,706,731,321 7,636,213,905 Cash and cash equivalents at 1 January 22,002,774,937 19,978,285,930 Effect of foreign exchange rate changes 4,181,269 116,260 Cash and cash equivalents at balance sheet date 30,713,687,527 27,614,616,095