GEMDALE CORPORATIONen.gemdale.com/UploadFile/gemdalefile/jdboard/docc/ad949bbc-ed9c-4...“CSRC”...

GEMDALE CORPORATION

(600383)

2014 Interim Report

Gemdale Corporation 2014 Interim Report

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.Ⅰ IMPORTANT NOTICE

1. The Board of Directors, the Board of Supervisors, and directors, supervisors and senior management of the Company confirm that the contents in this annual report are true, accurate and complete and have no false representations, misleading statements or material omissions, and they individually and collectively accept legal responsibility for such content.

2. The Company currently has 14 directors, and all of them attended the meeting in person.

3. The interim financial report of the Company is unaudited.

4. Ling Ke, Chairman of the Company, Huang Juncan, President, Wei Chuanjun, Chief Financial Officer of the Company, hereby collectively warrant the truthfulness, accuracy and completeness of the financial statements contained in this annual report.

5. Risk associated with forward-looking statements:

We have included in this report certain forward-looking statements with respect to our future plans and development strategies, these statements should not be deemed as the Group’s material commitment to investors, and investors are reminded to pay more attention to investment risks

6. There was no misappropriation of the Company’s funds by the controlling shareholders and their related parties for non-operational purpose.

7. The Company has not provided any guarantee to external parties in violation of the required

decision-making process.

CONTENTS


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I. DEFINITION ..................................................................................................................................... 4

II. ASIC INFORMATION ABOUT THE COMPANY ..................................................................... 4

III. Key Financial Data and Indicators ............................................................................................... 5

IV.REPORT OF THE DIRECTORS .................................................................................................. 6

V. SIGNIFICANT MATTERS ........................................................................................................... 26

VI. CHANGES IN SHARE CAPITAL AND PARTICULARS OF SHAREHOLDERS ............. 31

VII. DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT ........................................ 32

VIII. FINANCIAL REPORT (Unaudited) ........................................................................................ 34

IX. DOCUMENTS AVAILABLE FOR INSPECTION ................................................................... 34


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I. Definitions

In this report, the following expressions shall have the meanings set out below unless the context requires otherwise: Defined terms “CSRC” China Securities Regulatory Commission “SSE” Shanghai Stock Exchange “the Company”, “Gemdale”, “Gemdale Group” or “the Group”

Gemdale Corporation

“Gemdale Properties and Investment” Gemdale Properties and Investment Corporation Limited

“Yuan”, “10,000Yuan” or “100 million Yuan” RMB, RMB ten thousand or RMB one hundred million, respectively

II. ASIC INFORMATION ABOUT THE COMPANY (I) Company Profile Registered company name in Chinese 金地（集团）股份有限公司

Registered company name in Chinese abbreviation 金地集团

Company name in English Gemdale Corporation Company name in English abbreviation Gemdale Legal representative Ling Ke

(II) Contact Person

Secretary to the Board of Directors Securities affairs representative Name Xu Jiajun Zhang Xiaoyu Mailing address

Gemdale Business Building, Fuqiang Road, Futian District, Shenzhen

Gemdale Business Building, Fuqiang Road, Futian District, Shenzhen

Tel 0755-82039509 0755-82039509 Fax 0755-82039900 0755-82039900 E-mail [email protected] [email protected]

(III) Basic Information

Registered address Gemdale Business Building, Fuqiang Road, Futian District, Shenzhen

Postcode of Registered address 518048

Office address Gemdale Business Building, Fuqiang Road, Futian District, Shenzhen

Postcode of Office address 518048 Office address www.gemdale.com E-mail of the Company [email protected]

(IV) Information Disclosure Newspapers designated by the Company for information disclosure

“China Securities Journal”, “Securities Times”, “Shanghai Securities News”

Website designated by China Securities Regulatory Commission to publish the annual report of the Company

www.sse.com.cn

Annual Reports of the Company are available at Office of the Board of Directors of the Company (V) Information of Securities


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Security type Stock Exchange where

the Company’s Security are Listed

Security name in abbreviation

Security Code

A Share Shanghai Stock Exchage Gemdale 600383 Company Bond Shanghai Stock Exchage 08 Gemdale Bonds 122006

(VI) Changes of Registration by the Company during the Reporting Period

Date of Registration 12 June 2014 Place of Registered Address Shenzhen

Registered No. of business license 440301103379518

Taxation Registration No. Shen Shui Deng Zi 440300192181634 号 Organisation Code 19218163-4 Index regarding queries on the Company’s changes of registration

Web site of Bureau of Shenzhen market supervision

and administration

III. Key Financial Data and Indicators

1. Key accounting data

Unit: RMB

Reporting period (January to June)

Corresponding period of last year Change (%)

After Adjustment Before Adjustment

Operating revenue 9,083,871,342.25 8,794,931,787.69 8,794,931,787.69 3.29

Net profit attributable to shareholders of the Company

157,980,745.80 315,394,461.45 303,827,764.85 -49.91

Net profit attributable to shareholders of the Company after deducting non-recurring profit or loss

103,566,217.45 287,942,660.06 276,375,963.46 -64.03

Net cash flows from operating activities

-4,437,819,991.80 -7,863,184,548.36 -7,863,184,548.36 N/A

At the end of the reporting period

At the end of last year Change (%)

Owner’s equity (or Shareholders’ equity)

28,429,079,181.55 29,114,331,819.25 -2.35

Total assets 134,734,475,117.33 123,926,332,991.27 8.72

2. Key financial indicator

Key financial indicator Reporting period (January to June)

Corresponding period of last year Change (%)

After Adjustment Before Adjustment

Basic earnings per share (RMB) 0.04 0.07 0.07 -42.86 Diluted earnings per share (RMB) 0.04 0.07 0.07 -42.86 Basic earnings per share after

deducting non-recurring profit or loss (RMB)

0.02 0.06 0.06 -66.67

Weighted average return on net assets (%)

0.54 1.20 1.29 Down by 0.66 percentage


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point Weighted average return on net

assets (%) after deducting non-recurring profit or loss

0.36 1.10 1.17 Down by 0.74 Percentage point

3. Non-recurring profit or loss items and amount:

Unit: RMB Non-recurring profit or loss items Amount

Profit or loss from disposal of non-recurring assets -70,651.27Government grants included in profit/ loss for the

current period (excluding those closely related to the Company's business and entitled to in fixed amount and quantities in accordance with the national standard)

18,922,875.54

Other non-operating income or expenses -8,675,710.25Investment income from held-to-maturity investments 38,162,596.51

Other Investment income 25,360,337.12

Minority Interest effects -1,200,057.39Tax effects -18,084,861.91

Total 54,414,528.35 4. Items Measured at Fair Value

Unit: RMB

Name Opening balance Closing balance Change for the

period

The influenced amounts to the profits for the

period

Investment property 10,038,112,000.00 10,153,888,506.12 115,776,506.12 - Available-for-sale financial assets

179,135,670.00 167,948,235.00 -11,187,435.00 -

Total 10,217,247,670.00 10,321,836,741.12 104,589,071.12 - IV. REPORT OF THE DIRECTORS

(I) Management discussion and analysis of operations during the reporting period

1. Changes in the operating environment of the real estate industry during the reporting period

In the first half of 2014, significant adjustments were made to the real estate market. The sales of commercial residence in China reported a year-on-year decrease of 6.0% and 6.7% in terms of floor area and transaction value respectively, of which the floor area and transaction value of residential properties sold reported a year-on-year decline of 7.8% and 9.2% respectively. Weak demands pulled down housing prices, and the housing price indexes of newly completed residential properties in 70 large- and medium-sized cities have been falling since 2014. With inventory houses soaring up and sales proceeds hard to be collected, the real estate industry stepped into the phase of selling inventory houses.

Specifically, the real estate market suffered from the falling of both sales volume and price at the beginning of the year. In March, driven by factors such as more housing supplies, market demands were released, however, as credit continued to be tightened, transaction volume of commercial properties recorded a sharp year-on-year drop. As some property companies promoted the sale of properties with discount, housing purchasers increased their neutral sentiments with pessimistic expectations; therefore,


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housing prices in some major cities went down. Control policies in some cities have been eased since May, but its impact on the real estate market was limit, and the transaction volume continued to drop.

In respect of land market, property companies in China made investment decisions more carefully, which resulted in the decrease of sales volume. Figures of land transactions in 40 large-and medium-sized cities showed that both amounts and premium rates of land transactions decreased, with land auction failures and transactions at bottom prices.

2. Operating performance of the Company during the reporting period

In the first half of 2014, the Company achieved sales of a total GFA of 1,310,000 square metres or a sales amount of RMB17.00 billion, down by 13% and 14% respectively compared to the corresponding period of the previous year. The Company recorded an operating income of RMB9.084 billion and a net profit of RMB158 million, up by 3.29% and down by 51.27% respectively compared to the corresponding period of the previous year. The recognised sales GFA of real estate projects was 634,700 square metres and the recognised sales amount was RMB8.340 billion, representing increases of 3.61% and 1.29% respectively as compared to the corresponding period of the previous year. As at the end of the reporting period, the sold-but-unrecognised resources of the Company further increased, with the sold-but-unrecognised contractual GFA amounting to approximately 4,270,000 square metres and sold-but-unrecognised contractual sales amounting to approximately RMB54.6 billion.

During the reporting period, the gross profit margin of the Company’s real estate business was 21.35%, down by 5.81 percentage points from the corresponding period of the previous year. The net profit margin was 1.74%, down by 1.95 percentage points from the corresponding period of the previous year. The decreases in gross profit margin and net profit margin were primarily due to those discounted products sold during promotional campaigns and other products with low profit margin being brought forward from prior periods. Selling expenses and administrative cost accounted for 5.2% of our sales amount, representing an increase of 1.3 percentage points compared to the corresponding period of the previous year. The increase was primarily due to downward pressure suffered by the overall real estate industry. The Company will continue to focus on and control costs and expenses.

The Company proceeded with the development of new projects prudently and timely replenished land resources available for sale. As at the end of the reporting period, the Company acquired new land reserve for a total saleable area of 1,300,000 square metres and an attributable saleable area of 930,000 square metres.

The Company’s revised plans for newly commenced projects were 6,360,000 square metres and the completed GFA was 4,140,000 square metres. The Company’s actual newly constructed GFA was approximately 2,900,000 square metres during the first half of 2014, which did not have material discrepancy compared to the operating plan made at the beginning of the year.

The Company’s financial position remained stable. At the end of the period, the Company had cash and bank balance of RMB17.31 billion, i.e. 1.04 times the balance of outstanding borrowings due within one year. The Company’s debt structure further improved. Long-term borrowings accounted for 60% of all interest-bearing liabilities. The Company always insists on good financial management and has plenty of fund raising options, including bank borrowings, bond issue, entrusted loans, trust loans, etc. During the reporting period, due to its sustained good credit status, the Company was granted long-term credit ratings of BB+ and Ba1 respectively by Standard & Poor’s and Moody’s (both being internationally renowned credit rating agencies). The Company’s size of debts and financing costs were kept at a reasonable level. At the end of the reporting period, the Company’s total amount of debt financing was RMB41.982 billion, and the weighted average cost of debt financing stood at 6.46%. The Company continued to expand joint


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venture cooperation to broaden its funding channels. The sound debt positions and funding conditions ensured the healthy and stable operations of the Company.

In order to ensure the effective implementation and execution of the cost management system promulgated in 2013, the Company further improved this system by launching Enterprise Application Suites (EAS). The Company carried out a cost to standard measurement for its projects, based on cities, so as to find out the differences in cost management from various dimensions, the results of which would be used to optimise the costs of newly completed projects and projects under construction. Progress was made in its strategic purchase. The Company streamlined its regional strategic purchase systematically and its three-level purchase system was further improved and standardised. Three more items were newly included into the overall strategic purchase, which further guaranteed the achievement in “higher efficiency, lower cost and better quality”.

As for its established systems and standards, the Company integrated its project quarterly inspections with the project assessment conducted by third parties. The project management system was successfully implemented through ten key management aspects, including technical disclosure, project drawing management, model construction, alteration of certificates and contract execution. In the meantime, by improving the system of quarterly assessment and year-end incentive awarding for its regional companies, the Company enhanced the standards for supplier management and strengthened its project planning and progress management, which facilitated the industrialisation of the Group and provided strong technical capabilities for the effective implementation of the Company’s strategy.

The Company continued to improve its product management through value enhancement and cost management. Innovative breakthroughs were made in space design and renovation package development for Home+ series, a product newly developed by the Company, which offered high-value-added experiences to the clients. In the meantime, the Company constantly launched products using new materials and components of high price-performance ratio, in order to maintain its vitality and competitive strength.

Wins Investment was committed to enhance its projects and its fund-raising ability, to streamline and optimise its expansion strategy and incentive system and to further develop its target cities and target institutions. Wins Investment sought for new investment modes and tried to expand its investment scale, while it further improved its operation and management process. During the reporting period, Wins Investment made new investment of RMB3.4 billion, and started up the first RMB indefinite fund. Investment in seed project was also completed.

During the reporting period, Gemdale Properties and Investment Corporation Limited (“Gemdale Properties and Investment”) recorded contracted sales of RMB3.89 billion. As at 30 June 2014, Gemdale Properties and Investment held a land bank amounting to 4 million square metres, which laid a solid foundation for improving its sales volume and profitability in the coming years. During the reporting period, Gemdale Properties and Investment further expanded its land bank for commercial properties by acquiring a parcel of land for commercial use in Hangzhou.

3. Progress of each project developed by the Company

1) Newly Acquired Projects

During the reporting period, the Company reaped 10 projects involving a total saleable area of over 1.3 million square meters, for which the Company made total investments of approximately RMB6.4 billion. As at the end of the reporting period, the Company held a land bank attributable to total floor area exceeding 26 million square meters, of which, the land bank held through our associated companies amounted to nearby 18 million square meters of total floor area.

During the reporting period, the Company newly acquired the following projects:


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No. Name of land Percentageof equity interest

Site area (sq.m.)

Saleable GFA (sq.m.)

Total land premium (RMB ten thousand)

GFA attributable

to our associated companies

(sq.m.)

Land premium

attributableto our

associatedcompanies(RMB tenthousand)

1

Beijing Shunyi Zone 19 Project (北京顺义 19 街区

项目) 100% 84,666 149,398 216,000 149,398 216,000

2 Suzhou Baodai Road Project

100% 26,331 46,820 43,500 46,820 43,500

3

Jinhua Jindong District Guangrun West Land (Jinhua Art Wonderland) (金华市金东区广润西地

块(金华艺境))

50% 79,094 172,255 49,828 86,128 24,914

4 Zhuhai Doumen 31 Xianghai Bay Garden

50% 133,333 263,234 70,740 131,617 35,370

5 Shenyang Jiuxi Residence Project

100% 6,909 6,922 1,306 6,922 1,306

6

Dongguan Longgang Fengping Road Project (东莞凤岗项目)

50% 35,128 88,204 63,730 44,102 31,865

7 Hangzhou Jindu North Road Project

72% 25,139 120,555 30,198 87,041 21,803

8 Shenyang Baoma West Project

100% 104,376 259,591 60,016 259,591 60,016

9

Nanjing Pukou District Huashan Road Project (南京浦口区华山路西项目)

100% 44,513 79,218 40,500 79,218 40,500

10

Hangzhou Gudun Road North Project (杭州古墩

路北项目) 33% 56,286 120,555 68,209 39,783 22,509

Total 595,774 1,306,751 644,027 930,619 497,783

Notes: (1)The percentage of the Company’s interest in the abovementioned projects may change for certain reasons such as bringing in cooperative partners for joint development of such projects. (2) The saleable GFA of such projects is based on the results of relevant governmental departments’ examination and approval on the latest planning of such projects, so that any adjustments to the planning, especially the phased planning, could result in changes in relevant figures throughout the construction period of such projects.


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2) List of major real estate projects developed in the reporting period

No. Name of project Location

Progress of project

Percentageof interest

attributableto our

associatedcompanies

Total investment(RMB ten thousand) Site area

Total floor area

Saleable GFA (note)

Newly constructed

GFA in first half of

2014

Area completed in first half of 2014

Contracted Area in first half of 2014

Average selling price

per square meter

(RMB)

Cumulative contracted

area

Settled area in current period

Cumulative settled area

1 Shenzhen Villas du Lac

Baoan District

Under construction

100% 506,176 91,198 369,890 237,625 102,773 10,711 27,045 53,774 8,720 46,382

2 Shenzhen Mingfeng

Longgang District

Under construction

100% 173,400 39,316 159,470 115,617 115,617 17,893 18,079 96,573 1,154 2,063

3 Shenzhen Langyue

Pingshan New District

Under construction 100% 77,900 29,515 112,217 90,368 27,348 12,551 55,495 - -

4 Shenzh Weixin Phase III

Nanshan District

Under construction

72% 447,279 50,953 344,525 253,813 - - - - - - -

5 Donguan Bodeng Lake

Tangxia Town

Under construction

51% 194,300 179,862 380,420 319,560 1,939 22,206 302,710 1,012 276,569

6 Dongguan The Luxury Nature

Huangjiang Town

Under construction

100% 433,780 248,234 425,061 362,089 12,690 - 14,884 12,330 126,616 5,973 64,199

7 Dongguan Century Plaza

Tangxia Town

Under construction

100% 130,617 49,322 158,953 130,556 130,556 - - -

8 Dongguan Times Square

Humen Town

Under construction

100% 105,150 44,056 129,282 95,064 95,064 - - -

9 Dongguan Yichengnan

Daojiao Town

Under construction

80% 317,855 231,046 417,755 350,876 138,050 - - -

10 Guangzhou Lakes

Zengcheng District

Under construction

80% 1,398,600 2,472,217 3,664,850 2,313,504 103,000 - 43,884 10,403 723,611 7,804 556,713

11 Zhuhai Power Port

Xiangzhou District

Under construction

100% 125,663 747,892 750,000 712,483 - - 31,893 9,349 377,269 7,088 322,104

12 Zhuhai Blooming Garden

Jinwan District

Under construction 100% 177,674 264,920 315,126 263,910 - - 16,626 11,131 32,007 - -

13 Zhuhai Sanyi

Doumen

Doumen

Ditrict

Under construction 50% 211,506 133,333 324,001 263,234 103,430 - - - -

14 Foshan

Longyue Nanhai District

Under construction

65% 261,164 49,102 242,599 186,260 - - 4,889 10,653 4,889 - -

15 Foshan Liwanyue City

Nanhai District

Under construction

100% 322,651 65,085 299,817 212,027 80,000 - - - -

16 Foshan the Shunde Completed 100% 151,016 43,265 169,350 129,839 - - 1,440 23,025 74,493 8,852 66,431


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Progress of project


attributableto our

associatedcompanies


Total floor area

Saleable GFA (note)

Newly constructed


2014




per square meter

(RMB)


area



Signature District

17 Kunning Yuetianxia

Xishan District

Under construction 70% 523,267 116,510 720,030 517,234 214,586 - - -

18 Yantai Glory Mansion

High–tech Zone

Under construction 51% 113,370 66,311 206,502 142,741 - - 3,161 8,574 56,024 4,843 46,778

19 Yantai Green World

Laishan District

Under construction 85% 344,492 455,779 847,180 488,340 113,811 - 15,504 7,589 72,636 - -

20 Beijing Langyue

Fangshan District

Under construction 100% 400,577 190,257 374,057 271,342 14,719 29,569 15,112 24,649 253,457 28,948 128,358

21 Beijing Green Green

Tongzhou District


22 Beijing The Capital Hill

Mentougou District


23 Bejing Villa Life

Daxing District


24 Tianjin International Plaza

Hedong District


25 Tianjin Changhu Bay

Jinghai District


26 Tianjin Art Wonderland

Jinnan District


27 Shanghai The Pure Land

Qingpu District


28 Shanghai Fantastic Age

Pudong New District


29 Shanghai Songjiang Yijing

Songjiang District


30 Shanghai Free City

Songjiang District


31 Changzhou Horizon

Xinbei District

Under construction 100% 187,322 69,789 191,695 157,652 - - 1,098 10,388 4,613 - 805

32 Changzhou Xinbei Under 100% 201,754 102,515 294,719 233,087 48,528 - 20,974 6,356 51,535 - -


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Progress of project


attributableto our

associatedcompanies


Total floor area

Saleable GFA (note)

Newly constructed


2014




per square meter

(RMB)


area



Green County District construction

33 Nanjing Glory Mansion

Qixia District

Under construction 100% 183,813 81,104 253,411 192,204 - 90,220 61 26,186 185,285 26,399 89,370

34 Nanjing Free City

Yuhuatai District

Under construction 100% 812,500 468,049 1,193,204 1,030,242 8,980 90,328 20,062 14,368 979,523 86,571 748,782

35 Nanjing Art Wonderland

Qixia District


36 Yangzhou Art Wonderland

Development District

Under construction 100% 152,455 132,731 267,982 208,000 22,342 105,724 18,672 7,732 132,480 86,219 86,219

37 Yangzhou Glory Mansion

Hanjiang District


38 Suzhou Baodai

Road Wuzhong District

Under construction 100% 79,761 26,331 54,262 46,820 46,820 - - - -

39 Wuhan Art Wonderland

High–tech Zone

Under construction 100% 239,498 156,413 428,495 323,457 33,766 8,204 235,533 7,036 125,306

40

Wuhan Saint Emilion (Shengaimilun Project)

Hongshan District

Under construction 70% 177,942 199,186 396,715 280,638 24,801 14,028 10,460 273,583 24,638 204,797

41

Wuhan Raphael Bay (Lanfeixian Project

Hanyang District

Under construction

100% 438,456 306,551 706,250 575,733 45,165 41,709 8,639 220,013 4,075 132,358

42

Wuhan King Hood (Mingjun Project)

Jiang’an District

Completed 100% 127,214 14,794 90,087 71,768 11,453 21,748 52,486 41,504 47,475

43 Wuhan Green Eastern County

High–tech Zone

Under construction 51% 284,498 104,703 467,554 382,698 96,589 41,746 9,802 74,359 - -

44

Changsha Beyond Imagination (Sanqianfu Project)

Wangcheng District

Under construction 50% 793,942 230,193 1,184,113 952,338 127,540 27,309 9,308 27,309 - -

45 Wuhan Art High–tech Under 70% 448,092 788,976 1,070,112 936,531 40,878 33,252 4,644 137,321 33,097 61,411


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Progress of project


attributableto our

associatedcompanies


Total floor area

Saleable GFA (note)

Newly constructed


2014




per square meter

(RMB)


area



Wonderland Zone construction

46 Xi’an Lake City

Yanta District

Under construction 70% 1,091,755 628,799 1,685,885 1,220,909 - - 45,038 13,204 829,045 32,162 594,654

47 Xi’an Xiangyue Tianxia

Yanta District


48 Xi’an Fantastic Age

Yanta District


49 Xi’an Xifeng Gongyuan Project

Yanta District

Under construction 100% 2,192,691 561,223 2,739,040 2,145,123 - - 34,933 8,895 222,298 - -

50 Shenyang Binhe Zuoan

Hunnan District

Under construction 100% 850,600 599,153 1,645,639 1,357,249 193,699 43,586 8,173 1,042,562 25,983 944,494

51 Shenyang City Crown

Tiexi District Completed 100% 325,627 192,206 540,464 418,562 2,112 17,104 405,483 7,585 401,367

52 Shenyang Pleasure Town (Boyue Project)

Dadong District


53 Shenyang Laurel Bay

Hunnan District

Under construction 39% 106,697 61,361 207,067 183,451 16,795 25,983 6,175 84,194 - -

54 Shenyang Jincheng

Hunnan District


55 Shenyang Yijing

Hunnan District


56 Shenyang Yuefeng

Huanggu District


57 Shenyang Jiuxi Mansion

Hunnan District

Under construction 100% 10,000 6,909 6,922 6,922 - -

58

Dalian CEO Mansion (Yunjin Project)

ZhongshanDistrict

Under construction

70% 96,900 9,800 77,970 63,098 2,796 17,968 41,859 60 8,305

59 Dalian Art Wonderland (Qianguan

GanjingziDistrict



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Progress of project


attributableto our

associatedcompanies


Total floor area

Saleable GFA (note)

Newly constructed


2014




per square meter

(RMB)


area



Project)

60 Dalian Tanxi Ganjingzi District


61 Hangzhou Free City 24#25#

Xihu District


62 Hangzhou Tinyat Mansion

Xiaoshan District

Under construction 60% 727,790 123,464 407,498 305,340 - 112,378 9,791 24,857 174,167 - -

63 Hangzhou shenhuali

Gongshu District


64 Hangzhou Green Green

Jianggan District


65 Hangzhou Xiaoshanlanjue

Xiaoshan District

Under construction 50% 133,004 30,382 142,372 100,041 100,041 - - - - - -

66 Shaoxing Free City

Shaoxing County

Under construction 51% 748,974 450,840 1,409,742 1,115,858 - - 64,645 9,459 467,189 15,402 205,984

67 Shaoxing Didang Project

Yuecheng District

Under construction 51% 108,537 56,872 138,403 100,932 101,279 - - - - - -

68 Cixi Topleasur Cixi City Completed 100% 286,300 80,070 212,131 154,887 - 154,887 6,210 13,323 91,995 46,022 46,022

69 Cixi Lanyue Cixi City Under construction

50% 155,092 86,794 209,783 152,976 66,614 - - - - - -

70 Jinhua Green Spring

Wucheng District

Under construction

90% 45,500 33,991 63,006 50,615 - - 10,727 11,166 26,133 - -

71 Jinhua Art Wonderland

Jindong District

Under construction

50% 127,704 79,094 222,040 172,255 - - - - -

72 Yuyao Lanyue Yuyao City

Under construction

65% 109,913 58,259 142,361 103,310 - - 14,173 14,972 79,993 - -

73

Ningbo Eastern Radiance (Dongyu Project)

High–tech Zone

Completed 100% 147,861 47,380 136,348 92,819 - - 4,160 12,219 82,578 4,921 81,238

74 Ningbo New Bund #1

Yinzhou District

Under construction

36% 196,340 59,088 193,007 145,497 - - 27,564 16,881 27,564 - -


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Note: The saleable GFA of such projects is based on the results of relevant governmental departments’ examination and approval on the latest planning of such projects, so that any adjustments to the planning, especially the phased planning, could result in changes in relevant figures throughout the construction period of such projects.

3) Property Lease

Items Total GFA

(square meters)

GFA available for-rent (square

meters) Occupancy

rate (%) Rental income

(RMB)

Average rent per square meter

(RMB/month)

Percentage of rental income to fair value

of property

Office building 309,280.17 252,725.28 97 239,034,678.72 162.63 2.90% Property of Gemdale Industry Section 45,599.74 36,778.50 83 7,533,366.52 40.96 2.50%

Total 354,879.91 289,503.78 246,568,045.24

4. Management’s forecast and operation strategy for the second half of the year

“Selling inventory houses” will still be the key operation strategy for the second half of the year. The Company expects that the loan policies will become greatly supporting the market demands from first-time homebuyers and of home improvement. The government will proactively give direction over market expectation and more cities will adjust their limited purchase policies. In the meantime, some of the small players with over-leveraged ratio may suffer from serious crisis of repayment, providing favorable M&A opportunities to top-tier companies with solid financial position. In addition, suitable investment opportunities may arise resulting from continuously stagnant land market.

In the second half of 2014, the Company will strive to improve its sales through the following measures:

(1) Actively selling its inventory houses. The Company will grasp the development trend of the market and the customers. By adopting flexible marketing strategy and measures, more efficient selling channels and highly competitive pricing strategy, the Company expands its customer base and further improves the price-performance ratio of its products. Also, the Company strives to increase the overall sales of its inventory houses and maintain its sales-inventory ratio at reasonable level.

(2) Dynamic review and adjust of its annual schedule. The Company enhances its control and management strengths over new projects and arranges dynamic review and adjust of its annual construction schedule, after considering factors such as existing available-for-sale resources and speed of sales. Also, the Company accelerates the launching of products with differentiation and makes prudent decisions of the construction schedule of products of similar nature but with high inventory, and the schedule of which maybe extended, if necessary. (3) Ensure of new projects to be launched as scheduled. Regarding to the new projects scheduled to be launched this year, the Company will ensure the projects to be launched as scheduled and prepare precise and effective marketing and launching measures for the projects, in order to achieve a higher opening sales ratio and sales target.

5. Analysis of principal business

1) Analysis of changes in relevant items of financial statement Unit: RMB

Items The current period The prior period Change (%)

Operating income 9,083,871,342.25 8,794,931,787.69 3.29

Operating cost 6,957,962,974.95 6,313,301,446.01 10.21

Selling and distribution expenses 657,620,017.14 651,837,818.83 0.89

Administrative expenses 403,250,520.70 381,240,036.57 5.77

Financing expenses 485,646,912.44 394,023,637.71 23.25

Impairment loss in respect of assets 156,512,040.04 152,230,450.28 2.81


16

Investment income 4,415,241.03 100,407,910.58 -95.60

Non-operating expense -6,827,683.84 8,932,857.65 -176.43

Net cash flow from operating activities -4,437,819,991.80 -7,863,184,548.36 N/A

Net cash flow from investing activities -3,979,106,010.55 -421,974,479.71 N/A

Net cash flow from financing activities 8,024,926,800.39 5,406,645,929.29 48.43 2)Income

Income analysis① During the reporting period, operating income of the Company amounted to RMB 9,084 billion, representing an increase of 3.29% as compared with the corresponding period of the previous year. Among which, revenue realized from real estate business amounted to RMB 8. 34 billion, representing an increase of 1.29% as compared with the corresponding period of the previous year, mainly attributable to the significant increase in recognised sales area in the current year as compared to the previous year. ②Major customers

During the reporting period, operating income from our top five customers amounted to RMB 105.85 million, representing 1.17% of our total operating income.

3) Cost Cost analysis①

Unit: RMB

Industry The current period

Percentage of cost for the

current period to total cost

(%)

The prior period

Percentage of cost for the prior period to total cost

(%)

Change (%)

Real estate development

6,559,812,383.36 94.28 5,997,537,693.87 95.04 9.38

Property lease 982,575.55 0.01 1,150,276.45 0.02 -14.58Property management

378,879,706.20 5.45 292,051,113.12 4.63 29.73

Others 18,257,393.95 0.26 19,385,730.58 0.31 -5.82Note: total cost represents cost of principal business, which is mainly comprised of the cost of real estate business. Changes in the current period as compared to the prior period were mainly attributable to the increase in sales of properties. ②Major suppliers During the reporting period, purchases from the top five suppliers amounted to RMB1.5774 million, representing 16.65% of our total purchases.

4) Cost

During the reporting period, sales expense amounted to RMB 403.25 million，representing an increase of 5.77% as compared with the corresponding period of the previous year, mainly due to increase of promotion expense; administration expense amounted to RMB 485.65 million，representing an increase of 23.25% as compared with the corresponding period of the previous year, mainly due to expansion scale；Financial expense amounted to RMB 403.25million, representing an increase of 23.25%，mainly attributable to the increase of interest expense. 5) Cash flow

Items The current period The prior period Change Change（%）

Cause of Change

Net cash flow from operating activities

-4,437,819,991.80 -7,863,184,548.36 3,425,364,556.56 N/a Decrease in land value payable


17

Net cash flow from investing activities

-3,979,106,010.55 -421,974,479.71 -3,557,131,530.84 N/a Increase in investment

Net cash flow from financing activities

8,024,926,800.39 5,406,645,929.29 2,618,280,871.10 48.43 Increase in borrowings payable

6. Analysis of industries, products and regional operations

During the reporting period, recognized sales area of real estate projects was 634,700 m2, representing an increase of 3.61% as compared with the previous year. Recognized sales amount was RMB8.34 billion, representing an increase of 1.29% as compared with the previous year. Gross profit margin of our real estate business was 21.35%, representing a decrease of 5.81 percentage points as compared with the previous year. 1) Principal business (by industry)

Unit: RMB

Industry Operating income Operating cost

Gross profit margin (%)

Change in operating income as compared

to previous year (%)

Change in operating

cost as compared

to previous year (%)

Change in gross profit margin as

compared to previous year

(%)

Sales of properties

8,340,306,216.44 6,559,812,383.36 21.35 1.29 9.38

Decrease by 5.81 percentage points

① Breakdown of principal business (by region)

Unit: RMB

Region Operating income Change in operating income as compared to previous year (%)

Southern China 1,071,733,654.54 -15.97 Northern China 1,339,188,621.09 9.57 Eastern China 2,651,502,545.38 149.93 Central China 1,342,994,009.20 57.48

Northwestern China 506,104,324.70 3.02 Northeastern China 949,395,221.27 -40.35 Southeastern China 1,220,028,137.00 -46.86

Total 9,080,946,513.18 3.31 ② Breakdown of property sales (by region)

Unit: RMB

Region Operating income

from principal business

Percentage (%)

Gross profit of principal business

Percentage

(%)

Recognized sales area

(ten thousand

m2)

Percentage (%)

Southern China 775,735,292.82 9.30 210,670,797.79 11.83 4.13 6.51

Northern China 1,008,694,841.00 12.09 239,354,491.75 13.44 4.94 7.78

Eastern China 2,574,229,723.92 30.86 376,324,512.34 21.14 23.53 37.07

Central China 1,338,500,763.00 16.05 299,272,029.29 16.81 11.23 17.70

Northwestern China 506,104,324.70 6.07 250,858,628.53 14.09 3.25 5.12


18

Northeastern China 917,013,134.00 11.00 260,670,349.79 14.64 9.68 15.25

Southeastern China 1,220,028,137.00 14.63 143,343,023.59 8.05 6.71 10.57

Total 8,340,306,216.44 100.00 1,780,493,833.08 100.00 63.47 100.00 ③ Recognized sales area and sales amount of major projects during the reporting period:

Project

Recognized sales area (ten thousand

m2)

Recognized sales amount (RMB ten

thousand)

GFA sold (ten thousand m2)

Sales amount (RMB ten thousand)

Dongguan The Luxury Nature 0.60 9,109 1.50 18,360 Guangzhou Lakes 0.78 10,711 4.44 45,653 Foshan the Signature 0.89 16,034 0.19 2,775 Zhuhai Power Port 0.71 6,513 3.19 29,816 Shenzhen Villas du Lac 0.87 23,522 1.07 28,967 Shenzhen Top Class 0.12 3,505 1.79 32,349 Shenzhen River Town - - 2.73 34,220 Zhuhai Blooming Garden - - 1.66 18,506 Beijing River Town 2.89 55,297 1.51 37,249 Tianjin International Plaza 1.52 40,231 0.94 23,099 Tianjing Art Wonderland - - 5.23 49,017 Beijing The Capital Hill - - 6.84 141,177 Bejing Villa Life - - 6.08 131,499 Nanjing Free City 8.66 78,218 2.01 29,774 Yangzhou Art Wonderland 8.62 65,940 1.87 14,437 Nanjing Glory Mansion 2.64 25,894 0.02 312 Shanghai Age Fantastic 2.47 61,024 1.18 30,811 Shanghai Free City - - 4.77 91,396 Shanghai Songjiang Art Wonderland

- - 3.77 73,899

Nanjing Art Wonderland - - 3.17 53,238 Hangzhou Tinyat Mansion - - 0.98 26,563 Cixi Topleasure 4.60 92,769 0.62 8,896 Shaoxing Free City 1.54 20,828 5.28 55,531 Yuyao Lanyue - - 1.42 28,866 Hangzhou Green Green - - 2.08 22,959 Ningbo New Bund #1 - - 2.76 46,531 Wuhan King Hood 4.15 78,133 1.15 24,909 Wuhan Saint Emilion 2.46 21,533 1.40 14,673 Wuhan Raphael Bay 0.41 3,766 4.17 36,031 Wuhan Art Wonderland 0.70 7,189 3.38 27,700 Changsha Beyond Imagination 3.31 20,499 3.33 15,441 Wuhan Green Eastern County - - 4.17 40,921 Wuhan Free City - - 2.73 25,419 Xi'an Lake City 3.22 49,715 4.50 59,470 Xi'an Yanxiang Road - - 2.98 23,394 Shenyang Laurel Bay 2.60 23,578 4.36 35,623 Shenyang City Crown 0.43 5,054 4.44 40,284 Dalian Art Wonderland 4.95 47,615 3.27 29,068 Shenyang Jincheng 0.59 5,686 2.33 19,890

7. Analysis of core competitiveness


19

The Company was founded in 1988, and began to operate its real estate business in 1993. With over two decades of exploration and successful operation, the Company has expanded rapidly in size and strength. Adhering to the corporate mission of "building homes in a scientific way", highlighting the unique features of "professionalism, perfectionism and persistency" in its business operation, and sticking to its business philosophy (“Gemdale’s Motto”) of “delivering best performance and upholding business integrity”, and the spirits of “be devoted and be aggresive, be brave and be idealistic”, Gemdale has gradually formed its core competitive strength in the real estate development business. Gemdale has deployed its nationwide expansion layout for 7 major regions including Southern China, Eastern China, Northern China, Central China, Northwestern China, Northeastern China and Southeastern China, and has strong business foothold in 25 major cities in China.

Adhering to “leading human-oriented living” as its core product concept, Gemdale devotes to satisfy all the basic needs of cozy living, creates rich humanistic atmosphere for its products, designs diversified and innovative human-oriented functions, and builds interactive communication platforms at the housing estate level, so as to create harmonious and humanized communities. In recent years, Gemdale not only achieved excellent sales performance, but also won numerous professional awards attributable to its outstanding product innovation and quality, and its brand received extensive recognition from the market.

The Company is one of the first real estate companies to engage in financial business. Currently, Wins Investment, a private equity funds management company established by Gemdale Corporation, is focusing on investment opportunities in the Chinese real estate market. In 2012, Gemdale Corporation penetrated into the Hong Kong capital market by acquiring Frasers Property (China) Limited (stock code: 00535), a company listed on the Stock Exchange of Hong Kong, which was later renamed as Gemdale Properties and Investment Corporation Limited (“Gemdale Property and Investment”). In future, Gemdale Property and Investment will continue to focus on commercial properties, and optimize the core business model for the development, operation and management of urban complexes, so as to become a leading developer of high-end commercial properties in China. Looking forward, Gemdale Corporation will continue to develop and increase its core competitive strength in real estate development and financial services, adopt a global vision and adhere to international standards, and continue to achieve value-creation through exploration, innovation and sustainable development, in an effort to realize its ambitious goal of “becoming the most valuable international conglomerate in China”

8. Analysis of assets and liabilities

Unit: RMB

Item

At the end of the reporting period At the end of last year Changed by

(%) Causes of changes

Amount Percentage

of total asset (%)

Amount Percentage

of total asset (%)

Monetary assets 17,312,293,709.87 12.85 18,609,949,221.67 15.02 -6.97 Business expansion Advances to suppliers

587,119,011.76 0.44 822,686,154.09 0.66 -28.63 Decrease in prepayment of land cost

Other receivables 9,950,900,887.59 7.39 10,126,599,754.86 8.17 -1.74

Decrease in advanced deposit for land auction and receivables from counterparties

Inventories 82,344,212,200.64 61.12 76,638,115,688.85 61.84 7.45 Business expansion Other current assets

9,082,249,506.72 6.74 3,826,338,997.84 3.09 137.36 Increase in tax expense

Long-term equity investment

3,877,286,522.19 2.88 2,480,403,376.47 2.00 56.32 Increase in equity cooperation

Short-term borrowings

4,976,367,381.55 3.69 2,736,310,901.31 2.21 81.86 New loans

Notes payable 106,456,261.57 0.08 314,972.18 0.00 33,698.62 Increase in payment of notes for construction cost

Accounts payable 7,678,804,721.36 5.70 10,081,654,234.82 8.14 -23.83 Payment of land cost and construction cost

Advances from customers

36,669,862,629.33 27.22 30,276,042,182.49 24.43 21.12 Increase in pre-sales of properties


20

Employee benefits payable

304,511,600.16 0.23 653,657,927.39 0.53 -53.41 Payment of salary

Tax payable 276,673,509.27 0.21 665,260,082.00 0.54 -58.41 Payment of taxation Non-current liabilities due within one year

11,518,638,003.60 8.55 9,092,725,435.75 7.34 26.68 Transferred from long-term borrowings

Long-term borrowings

19,903,259,113.05 14.77 16,963,097,519.64 13.69 17.33 New loans

Bonds payable 5,477,701,456.30 4.07 6,483,515,823.00 5.23 -15.51 Buy-back of bonds

9. Analysis of investment

1) Shareholdings in other listed companies Unit: Ten thousand dollars

Stock code

Stock abbreviation Shareholding (%)Carrying value at

the end of the reporting period

Accounting item Source of

shareholding

00535.HK Gemdale Properties

and Investment 72.20 281,901.52

Long-term equity investment

acquisition

00207.HK Cofco Land

Holdings Limited 1.37 16,794.82

Total / 181,512.84 298,696.34 /

2)Transaction of other listed companies

Name of the share

No.of shares at the beginning of

the period

No.of shares bought in the

period

Amount used(RMB

Yuna)

No.of shares sold in the period

No.of shares at the end of the

period

产生的投资

收益（元）

Cofco Land Holdings Limited

116,250,000 - - - 116,250,000 -

3)Analysis of major subsidiaries and investee companies in which the Company has equity interest

Unit: RMB

Name Principal

activities or services

Percentage of

shareholding (%)

Asset scale at the end of the period

Operating income for the period

Net profit for the period

Bejing Gemdale Hongyun Real Estate Development Co., Ltd.

Real estate development 70.00 6,060,043,773.76 211,564,834.58 118,926,396.00

Bejing Gemdale Huida Real Estate Development Co., Ltd.


Shanghai Hangjin Real Estate Development Co., Ltd.


Gemdale Tianjin Investment Development Co., Ltd.


Shenyang Gemdale Changqing Property Investment Co., Ltd.


Gemdale Nanjing Property Co., Ltd Real estate development 100.00 2,837,125,034.94 782,175,371.00 65,209,985.29

Gemdale Nanjing Jinjiu Real Estate Development Co., Ltd.


Gemdale Wuhan Real Estate Development Co., Ltd.


Wuhan Guanggu Agricultural Development co., LTD


Wuhan Gemdale Huigu Property Co., Ltd.


Xi’an Gemdale Property Investment Co., Real estate 100.00 1,237,748,384.61 8,950,705.00 418,602,783.99


21

Ltd. development

Shanxi Jiahe Real Estate Development Co., Ltd.

Real estate development

70.00 5,229,163,343.35 497,153,619.70 101,125,011.47Dalian Tianyi Real Estate Development Co., Ltd.


Cixi Jinqi Real Estate Development Co., Ltd.


Shaoxing Gemdale Shenxing Real Estate Development Co., Ltd


3) Equity investments made by the Company During the reporting period, new additional equity investments made by the Company amounted to RMB 2,820,198,100, which mainly composed of the following: A. During the reporting period, major new subsidiaries established by the Company are as follows:

Unit: RMB 10 thousand

Name of investees Principal operating

activities Currency

Registered capital

Actual capital contribution at the end of the year (translated into RMB10 thousand)

Gemdale (Asia) Investment Limited Investment US dollar 1,000 6,163.23

Foshan Nanhai Gemdale Real Estate Development Co., Ltd.

Real estate development RMB 1,000 1,000

Suzhou Jinhongyue Real Estate Development Co., Ltd.

Real estate development RMB

2,000 2,000

Foshan Gemdale Xinhua Investment Limited

Investment RMB 70,000 45,150

Shaoxing Zechong Investment Management Limited

Investment RMB 10 10

Beijing Gemdale Huiyuan Real Estate Development Co., Ltd.

Real estate development RMB

10,000 10,000

Shenzhen Zhuanmei International Investment and Development Limited

Investment RMB 60,760 60,760

Jiaxing Wenjiajia No. 1 Equity Investment and Partnership Enterprise (Limited Partnership)

Investment RMB 60,000 10,481.79

Total 135,565.02

During the reporting period, the Company acquired 9 wholly owned companies or minor equity for a total

consideration equivalent to RMB 586,991,900. B. During the reporting period, the Company acquired 1 company for a total consideration equivalent to

RMB 50,980,000. C. During the reporting period, the Company made additional capital contributions to 4 subsidiaries in

an aggregate amount equivalent to RMB 826,576,000. Among which, RMB 223,410,000 was contributed to Zhuhai Zhushengyuan Real Estate Development Co., Ltd., while RMB 491,900,000 were contributed to Wuhan Dianjuntai Real Estate Development Co., Ltd.,.


22

5) Entrusted wealth management

Unit: RMB10 thousand Type of entrusted

wealth management products

Amount of entrusted

wealth manageme

nt

Commencement date of entrusted

wealth management

Maturity date of entrusted

wealth management

Method of return

Actual principal amount

recovered

Actual gain Whether it is subject to legal

procedures

Provision for

impairment

Whether it is a

connected transaction

Whether it is

financed by the

proceeds raised

Bank of China Shenzhen Futian Branch

100,000.00 2014-6-25 2014-7-10Floating return - -

Yes -

No No


50,000.00 2014-6-25 2014-7-30Floating return - -

Yes -

No No


40,000.00 2014-6-30 2014-7-8Floating return - -

Yes -

No No

Industrial and Commercial Bank of China Shenzhen Hongwei Branch

100,000.00 2014-6-26 2014-7-31

Floating return

- -

Yes

-

No No

China Bohai Bank Shenzhen Branch

20,000.00 2014-6-26 2014-7-28Floating return

- - Yes

- No No

Bank of Communication Shenzhen Oversea Chinese Town Branch

30,000.00 2014-6-26

Floating return

- -

Yes

-

No No

Total 340,000.00 / / / - - / - / /

6) Entrusted loans

Unit: RMB10 thousand


23

Name of borrower Amount of entrusted

loan

Term of loan

Interest rate of loan

Purpose of loan

Collateral/guarantor

Overdue

or not

Connected transaction

or not

Renewable or

not

Involved litigation or

not

Source of funds and whether from proceeds

raised or not Tianjin Haoting Real Estate Development Co., Ltd.

88,000 Two years

14% per annum

Project develop

ment

Pledge of land rights

No No No No No

Shenzhen Xinchengcan Investment Limited

10,500 One year

6% per annum

Project develop

ment

Pledge of Equity No No No No No

Yunnan Handou Real Estate Development Co., Ltd.

200 24

months 17% per annum

Project development


No No No No No

Jinan Qingda Huachuang Property Co., Ltd.

470 24

months 17% per annum

Project development

Pledge of land rights No No No No No

Kunming Jianfa Real Estate Development Co., Ltd.

100

18 months 16% per

annum

Project development


No No No No No


24

10. Amendments by the Board of Directors to the Company’s operation plan for the second half of the year

During the reporting period, certain amendments were made to the annual operation plan due to various adjustments made to the sales targets of some projects planned at the beginning of the year and additional space/units were launched in the market for certain projects based on market conditions. The revised annual plan for newly constructed area and completed area is set out as follows:

. Unit: sq. m


Percentage of

shareholdingSaleable

area

Newly constructed

GFA Completed

GFA 1 Shenzhen Villas du Lac Baoan District 100% 237,625 156,350

2 Shenzhen Top Class Longgang District 100% 115,617 115,617

3 Shenzhen River Town

Pingshan New District

100% 90,368 90,368

4 Shenzhen Longcheng Central Longgang District 51% 382,697 276,108

5 Shenzhen Vision Phase III Nanshan District 100% 253,813 253,813 -

6 Foshan the Signature Shunde District 100% 129,839

7 Foshan Longyue Nanhai District 65% 186,260

8 Foshan Liwanyuecheng Nanhai District 100% 212,027 212,027

9 Dongguan The Luxury Nature Huangjiang Town 100% 362,089 12,691 31,633

10 Dongguan Bodeng Lake Tangxia Town 51% 319,560 16,764 20,727

11 Dongguan Times Square Humen Town 100% 95,064 95,064

12 Dongguan Century Plaza TangxiaTown 100% 130,556 130,556

13 Donguan Yicheng South Daojiao Town 80% 350,876 138,050

14 Dongguan Fenggang Project Fenggang Town 50% 88,204 88,204

15 Zhuhai Power Port Xiangzhou District 100% 712,483 31,461

16 Zhuhai Blooming Garden Jinwan District 100% 263,910 187,800 76,110

17 Zhuhai Sanyi Doumen Project Doumen District 50% 263,234 103,430

18 Guangzhou Lakes Zengcheng District 80% 2,313,504 372,512 125,168

19 Kunming Yuetianxia Xishan District 70% 517,234 214,586

20 Beijing River Town Fangshan District 100% 271,342 14,719 155,683

21 Beijing Gelin Glin Tongzhou District 60% 160,066 - 160,066

22 Beijing The Capital Hill Mentougou

District 36% 352,018 133,328 -

23 Bejing Villa Life Daxing District 50% 131,966 68,120 38,224

24 Beijing Shuyi Project Shunyi District 100% 149,398 106,970 -

25 Tianjin International Plaza Hedong District 100% 354,864 16,751

26 Tianjin Changhuwan Jinghai County 70% 459,826 64,333 41,389

27 Tianjin Art Wonderland Jinnan District 36% 286,047 49,334 45,211

28 Tianjin Shunaggang Project Jinnan District 100% 136,785 136,785 -

29 Yantai Glory Mansion Gaoxin District 51% 142,741 - 21,672

30 Yantai Green World Laishan District 85% 488,340 113,811 34,449

31 Shanghai The Pure Land Qingpu District 100% 207,678

32 Shanghai Fantastic Age Pudong District 100% 218,570

33 Shanghai Songjiang Ronglexi Road Songjiang District

50% 96,921

34 Shanghai Free City Songjiang District 40% 726,987 213,027

35 Nanjing Free City Yuhuatai District 100% 1,030,242 8,980 225,955

36 Nanjing Glory Mansion Qixia District 100% 192,204 121,996

37 Nanjing Art Wonderland Qixia District 51% 365,858 116,200

38 Nanjing Pukou Project Pukou District 100% 79,218 79,218

39 Yangzhou Art Wonderland

Hi-Tech Development Zone

100% 208,000 22,342 136,336

40 Yangzhou Mingyue Hanjiang District 65% 345,898 34,742

41 Changzhou Horizon Xinbei District 100% 157,652 43,547

42 Changzhou Green Spring Xinbei District 100% 233,087 48,528 81,874


25

43 Suzhou Baodai Road Wuzhong District 100% 46,820 46,820

44 Hangzhou Free City #24, #25 Xihu District 49% 408,922 - 154,810

45 Hangzhou Tinyat Mansion Xiaoshan District 60% 305,340 - 228,210

46 Hangzhou Shenhuali Gongshu District 51% 60,348 - -

47 Hangzhou Gelin Gelin Jianggan District 51% 119,438 - -

48 Hangzhou Xiaoshan Lanjue Xiaoshan District 50% 100,041 100,041 -

49 Hangzhou Jindu North Road Yuhang District 72% 115,580 115,580

50 Shaoxing Free City Shaoxing County 51% 1,115,858 251,099 192,257

51 Shaoxing Didang Project Yuecheng District 51% 100,932 101,279 -

52 Cixi Topleasure Cixi City 100% 154,887 - 154,887

53 Cixi Lanyue Cixi City 50% 152,976 152,976 -

54 Jinhua Gelinchunxiao Wucheng District 90% 50,615 - 50,615

55 Jinhua Art Wonderland Jindong District 50% 172,255 84,384 -

56 Yuyao Lanyue Yuyao City 65% 103,310 - 103,310

57 Ningbo Dongyu Hi-Tech District 100% 92,819 - -

58 Ningbo New Bund #1 Yinzhou District 36% 145,497 - -

59 Wuhan Saint Emilion Hongshan District 70% 280,638 93,685

60 Wuhan Raphael Bay Hanyang District 100% 575,733 72,130 27,202

61 Wuhan King Hood Jiang’an District 100% 71,768 - -

62 Wuhan Art Wonderland


100% 323,457 26,553 84,046

63 Wuhan Green Spring Eastern Town


51% 382,698 162,366 -

64 Wuhan Freecity Hongshan District 50% 952,338 282,743 -

65 Changsha Beyond Imagination

Wangcheng District

70% 936,531 117,785 94,043

66 Zhengzhou Boyue Guancheng District 51% 139,063 135,685 -

67 Xi'an Lake City Yanta District 70% 1,220,909 45,910 362,748

68 Xi’an Xifenggongyuan Yanta District 100% 2,145,123 273,125

69 Xi’an Xiangyuetianxia Yanta District 39% 259,892 126,487

70 Xi’an Fantastic Age Yanta District 72% 676,514

71 Shenyang Binhe International Community Hunnan District

100% 1,357,249 206,138 152,319

72 Shenyang City Crown Tiexi District 51% 448,279 89,755 172,006

73 Shenyang Laurel Bay Left Bank Hunnan District

39% 183,451 16,795 94,752

74 Shenyang Jincheng Hunnan District 67% 429,117 32,289 145,224

75 Shenyang Art Wonderland Hunnan District 72% 523,437 60,829 88,489

76 Shenyang Yuefeng Huanggu District 72% 196,919 117,739 -

77 Shenyang Jiuxi Mansion Hunnan District 100% 6,922 - 4,558

78 Shenyang Baoma West Project Dadong District

100% 259,591 98,900 -

79 Dalian CEO Mansion Zhongshan District 70% 63,098 - 54,794

80 Dalian Art Wonderland Ganjingzi District 40% 455,816 65,298 141,899

81 Dalian Tanxi Hunnan District 72% 234,937 190,021 47,538

Total 6,362,844 4,139,904 Note1: The above construction plan and completion plan is subject to adjustments due to the following reasons: 1) macro economy and changes that may take place in the real estate market or changes in the sales of individual project; 2) the more strict requirements of new regulations on project approval which may delay the progress of obtaining licenses for development projects and may have adverse impact on the progress of development; 3) the impact of the demolition and reallocation progress of projects involving demolition and reallocation on development plans; and 4) the impact of other unpredictable major issues on construction period.


26

(II) Profit distribution plan formulated and implemented during the reporting period

At the 2013 Annual General Meeting of the Company held on May 29, 2014, our shareholders approved the Company's dividend distribution plan for 2013. According to the dividend distribution plan, a cash dividend of RMB1.6 (tax included) will be paid to all shareholders for every 10 shares they held based on the total share capital as at the closing of the record date. The Company completed the 2013 profit distribution plan, the record date was July 1, 2014, and the cash dividend payment date was July 2, 2014. The Company also published an announcement in respect of the cash dividend payment on June 26, 2014 in China Securities Journal, Securities Times and Shanghai Securities News respectively.

The Company had resolved not to make any profit distribution nor capitalization of surplus reserve during the interim period

V. SIGNIFICANT MATTERS

(I) Significant litigations, arbitrations or matters widely questioned by media

The Company had no significant litigation, arbitration or matters widely questioned by media during the year.

(II) Matters relating to bankruptcy or restructuring

The Company had no matters relating to bankruptcy or restructuring during the year.

(III) Acquisition and disposal of assets or merger and acquisition by the Company during the reporting period

The Company had no acquisition and disposal of assets or merger and acquisition during the year.

(IV) Implementation of the share incentive scheme of the Company and its impact

For details, please see Part VII of this Report: Stock Options Held by Directors and Senior Management.

(V) Significant related party transactions during the reporting period.

The Company had no significant related party transactions during the year.

(VI) Material contracts and their implementation

1. There was no custody, contracting or leasing business which contributed 10% or more of the Company's total profit for the reporting period.

2. Guarantees are as follows:


27

Unit: RMB ten thousand

Guarantees in favour of external parties provided by the Company (excluding guarantees provided to subsidiaries)

Guarantor

Relationship between guarantor and listed company

Guaranteed party

Guaranteed amount

Date of guarantee (execution date)

Guarantee commencing date

Expirydate Type of

guaranteeGuarantee released or not

Pass due or not

Overdue guaranteed amount

Counter Guarantee

Related-party guarantee

Relationship

Gemdale Corporation

The Company as Guarantor

Shenzhen Gemdale Dabaihui Real Estate Development Co., Ltd.

22,750 2012-5-31 2012-5-31 2014-5-30

Joint and several liability guarantee

Yes No 0 Yes Yes

Associated company

Gemdale Corporation



5,250 2012-6-1 2012-6-1 2014-5-30


Yes No 0 Yes Yes

Associated company

Gemdale Corporation



50,000 2014-1-13 2014-1-13 2019-1-13


Yes No 0 Yes Yes

Associated company

Gemdale Corporation



72,500 2014-1-13 2014-1-13 2019-1-13


No No 0 Yes Yes

Associated company

Gemdale Corporation



17,500 2014-6-18 2014-6-18 2019-5-30


No No 0 Yes Yes

Associated company

Total guaranteed amount during the reporting period (excluding guarantees provided to subsidiaries) 112,000 Total guaranteed balance at the end of the reporting period（A）(excluding guarantees provided to subsidiaries) 140,000


28

Guarantees provided by the Company to subsidiariesTotal guaranteed amount to subsidiaries during the reporting period 24,645 Total guaranteed balance to subsidiaries at the end of the reporting period（B） 558,037

Total guaranteed amount of the Company (including guarantees provided to subsidiaries)Total guaranteed amount（A+B） 698,037 Total guaranteed amount as a percentage of net assets of the Company (%) 24.55 Of which: Guaranteed amount provided for shareholders, beneficial controllers and their related parties（C） Guaranteed loan amount provided directly or indirectly for guaranteed parties with gearing ratio exceeding 70%（D） 572,303 Portion of total guaranteed amount exceeding 50% of net assets（E） Total amount of the above three guarantees（C+D+E） 572,303 Description of outstanding guarantees which may subject to joint and several liability Description of guarantees

Shenzhen Gemdale Dabaihui Real Estate Development Co., Ltd. (hereinafter referred to as "Gemdale Dabaihui ") is an associate of Shenzhen Gemdale Old City Reconstruction Co., Ltd. (hereinafter referred to as “Gemdale Reconstruction"), a subsidiary of the Company. Gemdale Dabaihui is responsible for the old city reconstruction project in Gangxia, Shenzhen, and it is held by Gemdale Reconstruction as to 35% of equity interest.

Based on the approval at the 4th meeting of the fifth session of the Board of Directors held on 8 April 2009 and the approval at the first 2009 Extraordinary General Meeting held on 24 April 2009, the Company resolved to provide Gemdale Dabaihui with loan guarantees or fundings at the proportion of 35%, the cumulative amount of which shall not exceed RMB600 million. The provision of fundings or loan guarantees by the Company will be dealt with in the same manner and in proportion to its shareholdings as other shareholders of Gemdale Dabaihui.

To continuously support the old city reconstruction project in Gangxia, Shenzhen, based on the approval at the 21st meeting of the sixth session of the Board of Directors held on 26 April 2012 and the approval at the 2011 Annual General Meeting held on 22 May 2012, Gemdale Reconstruction will continue to increase fundings to Gemdale Dabaihui and provide guarantees for Gemdale Dabaihui’s loans, and the additional facility shall aggregate not more than RMB1.4 billion. The provision of fundings by Gemdale Reconstruction or provision of loan guarantees by the Company for Gemdale Dabaihui will be dealt with in the same manner and in proportion to its shareholdings as other shareholders of Gemdale Dabaihui.

As at 30 June 2014, the balance of the loan guarantee provided by the Company for Gemdale Dabaihui amounted to RMB1.55 billion, and the above-mentioned loan guarantee was counter-guaranteed by Shenzhen Junwei Real Estate Development Co., Ltd., a minority shareholder of Shenzhen Gemdale Old City Reconstruction Co., Ltd., with the pledge of its 40% equity interest in Shenzhen Gemdale Old City Reconstruction Co., Ltd.


29

3. Other Material Contracts

The Company had no other discloseable material contracts during the year.

(VII) FULFILLMENT OF COMMITMENTS

During the reporting period, the Company and shareholders holding more than 5% of the Company’s Shares had no outstanding commitments.

(VIII) PUNISHMENT AND RECTIFICATION ON THE COMPANY AND ITS DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT, SHAREHOLDERS AND DE FACTO CONTROLLER

During the year, neither the Company nor any of its directors, supervisors, senior management, shareholders, de facto controller were subject to any investigation, administrative penalty, criticism by the CSRC or public reprimand by any stock exchange.

(IX) Corporate governance During the reporting period, the Board of Directors and the Board of Supervisors held election for the

change of session. The terms of office for the seventh session of the Board of Directors and the seventh

session of the Board of Supervisors became effective from 28 April 2014. The sixth session of the Board of

Directors and the Board of Supervisors fulfilled their responsibilities diligently.

The Company held 14 meetings of the Board of Directors, 3 meetings of the Board of Supervisors and

a General Meeting, during which the Company’s periodic reports, external investments, project cooperation

and change of session were reviewed. Specialised committees under the Board of Directors fulfilled their

respective obligations and responsibilities, which played a relatively important role in corporate governance.

During the preparation period of Gemdale’s 2013 Annual Report, the Audit Committee under the Board of

Directors paid constant attention to the preparation of the report, and maintained effective communication

with the auditors. The committee also discussed and reviewed significant events, and some Directors even

conducted on-site inspections of projects in different locations.

According to the Basic Regulations on Internal Control of Gemdale and relevant guidelines, and the

Plan of Implementation of Internal Control Regulations of Gemdale formulated in 2011, the Company,

with more stringent enforcement, continued to improve its internal control measures and its self-evaluation,

and prepared the Self-Evaluation Report on Internal Control for the First Half of 2014 of Gemdale. During

the reporting period, the Audit Department has continuously assessed the internal control systems for 4

operating regions of the Company, including Eastern China, Northeastern China, Central China and

Southeastern China, based on the principle of risk management. By adopting measures such as risk-check,

internal control assessment and auditing for special projects, the design and the efficiency and effectiveness

of the operation of the internal control systems of the Company could be assessed independently.

The Company attached great importance to effective communication with investors via telephone, fax,

internet and email etc. During the reporting period, the Company received a total of 236 visiting investors

to conduct mutual exchanges and attended 12 investment strategy seminars and investor forums held by

domestic and foreign securities companies, which enabled the Company to communicate and exchange

views with more than 280 investors. The Company has made information disclosure in a truly, accurately,


30

completely and timely manner in strict compliance with relevant laws and regulations and has ensured that

all shareholders can access the information fairly.

1. Particulars of participation in activities

Organiser Date Place Type of meetings

Guests Information

communicated

Jefferies 2014-2-27 Hong Kong

One-to-one, one-to-group meetings and marketing presentations

Various types of investors such as securities companies, fund managers and individual investors etc.

Key information communicated based

on the Company’s periodic reports and

other public disclosures were as

follows: 1. The Company’s

daily operations and analysis thereof;

2. The Company's future operation and development strategies; 3. The Company’s view on prospects of the industry and the macro-economic environment.

Credit Suisse (瑞士信贷) 2014-3-26

Hong Kong

Macquarie Equities ( 麦

格理证券) 2014-5-7

Hong Kong

Everbright Securities (光大证券)

2014-5-9 Beijing

Haitong Securities (海通证券)

2014-5-13 Hangzhou

Orient Securities (东方证券)

2014-5-14 Shanghai

CITIC Securities (中信证券)

2014-6-5 Chengdu

China Futures (中信建投) 2014-6-12 Shanghai

China Merchants Securities (招商证券)

2014-6-19 Shenzhen

CICC ( 中金

公司) 2014-6-24 Beijing

Sinolink Securities (国金证券)

2014-6-26 Ningbo

Credit Suisse (瑞士信贷) 2014-6-30 Singapore

2. Securities dealers, fund managers, other institutional and individual investors received by the

Company

Time Place Type of meetings

Guests Information communicated


31

During the reporting period

Shenzhen, Dongguan, Shanghai, Hangzhou, Wuhan, Beijing, Tianjin, Xi’an, Nanjing, Changzhou

In groups, one-to-one, on-site visits and telephone conference

CICC (中金公司), Industrial Securities (兴业证券), Bosera Funds ( 博时基金 ), GF Securities (广发证券), Shenyin Wanguo (申银万国 ), Huatai Securities (华泰证券), Guotai Junan ( 国泰君安 ), Fortune CLSA ( 财富里昂 ), China Futures ( 中信建投 ), First Capital (第一创业), Soochow Asset (东吴基金), Rongtong Fund (融通基金), First-Trust Fund ( 泰信基金 ), CITIC Securities (中信证券), CLSA (里昂证券 ), Schroders(施罗

德), 马投咨询

Key information communicated based on the Company’s periodic

reports and other public disclosures were as follows:

1. The Company’s daily operations and analysis thereof;

2. The Company's future operation and development strategies; 3. The Company’s view on prospects of the industry and the macro-economic environment.

VI. CHANGES IN SHARE CAPITAL AND PARTICULARS OF SHAREHOLDERS

(I) Changes in Shareholding

During the reporting period, there were no change in the total share number and shareholding structure of the Company. (II) Particulars of Shareholders

1. Total number of shareholders

Total number of shareholders as at the end of the reporting period

99,561

Shares held by top ten shareholders

Name of shareholders Type of

shareholders

Changes during the reporting

period

Total number of shares held

Percentage of shareholding

(%)

Number of restricted

tradable shares held

Number of shares pledged or frozen

Sino Life Insurance Co., Ltd. – Universal H

Other 532,243,736

896,314,854

20.05 0 0

An-Bang Life Insurance Co., Ltd. – Steady Investment Portfolio

Other 292,326,048

513,088,164

11.47 0 0

Shenzhen Futian Investment Development Company

State-owned legal person

0

351,777,629 7.87 0 0

An-Bang Life Insurance Co., Ltd.-Traditional insurance products

Other 0

223,575,465 5.00 0 0

China Life Insurance Company Limited – Universal Insurance Product

Other 69,079,202

176,998,528

3.96 0 0

Sino Life Insurance Co., Ltd. – Profit Sharing

Other 8,295,318

169,889,373

3.80 0 0

Sino Life Insurance Co., Ltd. – Universal G

Other 169,095,431

169,095,431

3.78 0 0

Shenzhen Futian Construction Co., Ltd Other

0

165,703,417 3.71 0 0

Tian’an property insurance Company Limited

Other 104,058,654

104,058,654

2.33 0 0

Changsha Xiandao Investment Holdings Limited

Other -2,145,650

87,854,350

1.96 0 0

Note on the connected relationship among or concerted actions of the above shareholders

Both Sino Life Insurance Co., Ltd. – Universal H(生命人寿保险股份有限公司－

万能H)and Sino Life Insurance Co., Ltd. – Profit Sharing (生命人寿保险股份有


32

限公司－分红) are accounts held by Sino Life Insurance Co., Ltd.. An-Bang Property & Casualty Insurance Co., Ltd. and An-Bang Life Insurance Co., Ltd. are owned by An-Bang Life Insurance Co., Ltd.. The Company was not aware of any connected relationship or concerted actions among the above top ten shareholders.

2. Particulars of single laregest shareholder

As of 30 June 2014, the number of shares held by Sino Life Insurance Co., Ltd. accounted for 1,235,299,658, representing 12.847% of the total share capital of the Company.

3. Particulars of bondholders of Gemdale’s bonds issued in 2008 Total number of bondholders as at the end of the reporting period 98

Top 10 bondholders of Gemdale’s bonds issued in 2008

Name of corporate bondholders Amount of bonds held at the end of the reporting

period (RMB)

Percentage of total issued bonds (%)

New China Life Insurance Co., Ltd – All inclusive – Exultant financing – 018L – WN001 (Hu) 180,000,000 15.00

China Petroleum Finance Company Limited 121,047,000 10.09Taikang Life Insurance Ltd－Investment Link – Personal insurance investment link 110,000,000 9.17Postal Savings Bank of China Co., Ltd. 100,000,000 8.33Taiping Life Insurance Co., Ltd – Universal – Group universal insurance 80,000,000 6.67New China Life–Profit sharing — Group Insurance Profit Sharing-018L-FH001 (Hu) 60,000,000 5.00Agriculture Bank Life Insurance Co., Ltd- Traditional insurance products 58,563,000 4.88China resources investment trust co., LTD-Ruizhi No.8 Structured assembled funds trust plan 54,265,000 4.52

China-Italia Assets-Merchante Bank-Shanxi Yaodu Rural commercial bank co., LTD 40,000,000 3.33China national petroleum corporation enterprise annuity plan-ICBC 38,998,000 3.25

VII. DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT (I) Movements in the number of shares and share options of the Company held by Directors, Supervisors and Senior Management 1．During the reporting period, the number of shares of the Company held by directors, supervisors and senior management were as follows:

Serial No.

Name Capacity Shareholdings at the beginning of the year

Shareholdings at the end of the year

Change (shares)

1 Ling Ke Chairman 130,000 130,000 02 Huang

Juncan Director and President 100,000 100,000

03

Xu Jiajun Director, Senior Vice

President, secretary to the Board

49,100 49,100 0

4 Yang Weimin

Chairman of the Supervisory Committee

30,600 30,600 0

5 Wang Yong

Staff Representative Supervisor

30,000 30,000 0

6 Yan Jiarong Senior Vice President 50,000 50,000 07 Wei

Chuanjun Chief Financial Officer, Senior Vice President

1,080,000 1,080,000 0

8 Zhang Xiaofeng

Vice President 135,000 135,000 0

9 Chen Changchun

Senior Vice President 20,000 20,000 0


33

Total 1,624,700 1,624,700 0Save as mentioned above, as at the end of the reporting period, none of Directors, Supervisors and Senior Management held any shares of the Company.

2．Number of share options granted to Directors and Senior Management during the reporting period

As at the end of the reporting period, the total number of shares to be issued on exercise of the share options granted under our Share Option Scheme is 111,276,000 shares. Of which, the share options granted to directors and senior management were as follows:

Name Capacity

Number of share options held as at the beginning of the reporting

period (10,000 shares)

Number of share options newly granted

during the reporting


Number of shares exercisable during the reporting period (10,000 shares)

Number of shares

exercised during the reporting


Exercise price of share

options(10,000

shares)

Number of share

options held as at the end

of the reporting


Ling Ke Chairman 894.6 0 357.84 0 7.42 536.76

Huang Juncan

Director and President

491.4 0 196.56 0 7.42 294.84

Chen Bi’an Director and Senior Vice

President 491.4 0 196.56 0 7.42

294.84

Yan Jiarong Senior Vice

President 322.2 0 128.88 0 7.42

193.32

Xu Jiajun

Director, Senior Vice President, Secretary to the

Board

250.2 0 100.08 0 7.42

150.12

Wei Chuanjun

Chief Financial Officer

239.4 0 95.76 0 7.42 143.64

Hu Hong Vice President 279 0 111.6 0 7.42 167.40

Zhang Xiaofeng

Vice President 199.8 0 79.92 0 7.42 119.88

Total 3168 0 1267.2 0 1900.8

March 19, 2010 was determined as the grant date for the share option scheme by the 40th meeting of the fifth session of the Board of Directors. The exercise period for the first batch of share options was commenced on March 11, 2011. No share options granted under the share option scheme of the Company were exercised during the reporting period.

The exercise price of share options was adjusted to RMB 7.42 per share as a result of the implementation of the 2013 profit distribution plan during the reporting period.

Since some share options elapsed due to resignation of their holders, the total number of share options granted as at the end of the period amounted to111,276,000. The above share options caused the net profits attributable to owners of the parent for the current period to reduce by RMB 1,888,228.69.

(II)Change of Directors, Supervisors and Senior Management of the Company

In the first meeting of the seventh session of the Board of Directors, Mr. Ling Ke was elected as the Chairman of the seventh session of the Board of Directors. Mr. Huang Juncan was employed as the President of the Company and Mr. Chen Bi’an, Mr. Yan Jiarong, Mr. Wei Chuanjun, Mr. Xu Jiajun and Mr. Chen Changchun were all employed as Senior Vice President. Mr. Hu Hong, Mr. Zhang Xiaofeng and Mr. Yang Kan were employed as Vice President of the Company. Mr. Wei Chuanjun and Mr. Xu Jiajun were employed as Chief Financial Officer and Secretary of the Board of Directors of the Company respectively.


34

VIII. FINANCIAL REPORT (Unaudited) Please refer to the interim financial report for the six months ended June 30, 2013 as attached. IX. DOCUMENTS AVAILABLE FOR INSPECTION

(I) A copy of this interim report bearing the signature of the Chairman;

(II) A copy of the financial statements bearing the signatures and seals of the Chairman, the financial controller and the general manager of the planning and financial department.

(III) All documents and original copies of announcements published in newspapers designated by China Securities Regulatory Commission during the reporting period.

Gemdale Corporation Ling Ke

Chairman Date approving release of this Report: August 19, 2014

GEMDALE CORPORATION

Financial Statements For interim period of six months ended June 30, 2014

GEMDALE CORPORATION

1

FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2014 CONTENTS PAGE(S) THE COMPANY AND CONSOLIDATED BALANCE SHEETS 2 - 4 THE COMPANY AND CONSOLIDATED INCOME STATEMENTS 5 & 6 THE COMPANY AND CONSOLIDATED CASH FLOW STATEMENTS 7 & 8 THE COMPANY AND CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY 9 & 10 NOTES TO THE FINANCIAL STATEMENTS 11 – 147

GEMDALE CORPORATION

2

AT JUNE 30, 2014

THE CONSOLIDATED BALANCE SHEET Unit: RMB

ITEMS NOTES Closing balance Opening balance ITEMS NOTES Closing balance Opening balance

CURRENT ASSETS: CURRENT LIABILITIES:

Currency funds (VI)1 17,312,293,709.87 18,609,949,221.67 Short-term borrowings (VI)17 4,976,367,381.55 2,736,310,901.31

Provision of settlement fund - - Borrowings from central bank - -

Funds lent - -Deposits from customers and interbank

- -

Held-for-trading financial assets

- - Deposit funds - -

Notes receivable - -Held-for-trading financial liabilities

- -

Accounts receivable (VI)2 4,419,917.22 9,863,274.33 Notes payable (VI)18 106,456,261.57 314,972.18

Advances to suppliers (VI)3 587,119,011.76 822,686,154.09 Accounts payable (VI)19 7,678,804,721.36 10,081,654,234.82

Insurance premiums receivable

- - Advances from customers (VI)20 36,669,862,629.33 30,276,042,182.49

Cession premiums receivable - -Funds from sales of financial assets with repurchasement agreement

- -

Provision of cession receivable

- -Handling charges and commissions payable

- -

Interest receivable - - Employee benefits payable (VI)21 304,511,600.16 653,657,927.39

Dividends receivable - - Tax payable (VI)22 276,673,509.27 665,260,082.00

Other receivables (VI)4 9,950,900,887.59 10,126,599,754.86 Interest payable (VI)23 148,693,737.41 171,061,889.01

Recoursable financial assets acquired

- - Dividends payable (VI)24 374,085,142.00 36,850,000.00

Inventories (VI)5 82,344,212,200.64 76,638,115,688.85 Other payables (VI)25 7,124,153,603.17 6,338,647,194.28

Non-current assets due within one year

- - Cession premiums payable - -

Other current assets (VI)6 9,082,249,506.72 3,826,338,997.84Provision for insurance contracts

- -

Total current assets 119,281,195,233.80 110,033,553,091.64Receivings from vicariously traded securities

- -

NON-CURRENT ASSETS: Receivings from vicariously sold securities

- -

Loans and payments on behalf

- -Non-current liabilities due within one year

(VI)26 11,518,638,003.60 9,092,725,435.75

Available-for-sale financial assets

(VI)7 167,948,235.00 179,135,670.00 Other current liabilities - -

Held-to-maturity investments - - Total current liabilities 69,178,246,589.42 60,052,524,819.23

Long-term receivables - -NON-CURRENT LIABILITIES:

Long-term equity investments (VI)8、9 3,877,286,522.19 2,480,403,376.47 Long-term borrowings (VI)27 19,903,259,113.05 16,963,097,519.64

Investment properties (VI)10 10,153,888,506.12 10,038,112,000.00 Bonds payable (VI)28 5,477,701,456.30 6,483,515,823.00

Fixed assets (VI)11 287,975,250.12 298,706,116.23 Long-term payables - -

Construction in progress (VI)12 - 2,104,503.76 Special payables - -

Construction materials - - Provisions - -

Fixed assets held for disposal - - Deferred tax liabilities (VI)14 2,423,291,274.58 2,391,739,137.98

Bearer biological assets - - Other non-current liabilities - -

Oil and natural gas assets - - Total non-current liabilities 27,804,251,843.93 25,838,352,480.62

Intangible assets - - TOTAL LIABILITIES 96,982,498,433.35 85,890,877,299.85

GEMDALE CORPORATION

3

AT JUNE 30, 2014 - continued

THE CONSOLIDATED BALANCE SHEET Unit: RMB


Development expenditure - - SHAREHOLDERS' EQUITY

Goodwill - - Share capital (VI)29 4,471,508,572.00 4,471,508,572.00

Long-term prepayments (VI)13 20,852,781.59 11,961,646.22 Capital reserve (VI)30 5,609,166,938.21 5,659,160,053.76

Deferred tax assets (VI)14 930,928,588.51 867,456,586.95 Less: Treasury shares - -

Other non-current assets (VI)16 14,400,000.00 14,900,000.00 Special reserve - -

Total non-current assets 15,453,279,883.53 13,892,779,899.63 Surplus reserve (VI)31 1,209,287,421.76 1,209,795,733.29

General risk reserve - -

Unappropriated profit (VI)32 16,687,016,418.92 17,243,968,733.11

Translation differences arising on translation of financial statements denominated in foreign currencies

452,099,830.66 529,898,727.09

Total shareholders' equity attributable to equity holders of the parent

28,429,079,181.55 29,114,331,819.25

Minority interests 9,322,897,502.43 8,921,123,872.17

TOTAL SHAREHOLDERS' EQUITY

37,751,976,683.98 38,035,455,691.42

TOTAL ASSETS 134,734,475,117.33 123,926,332,991.27TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

134,734,475,117.33 123,926,332,991.27

The accompanying notes form part of the financial statements. The financial statements on pages 2 to 147 were signed by the followings: ____________________ ____________________ __________________________________ Legal Representative Chief Accountant Person in Charge of the Accounting Body

GEMDALE CORPORATION

4

AT JUNE 30, 2014

THE COMPANY BALANCE SHEET Unit: RMB


Current Assets: Current Liabilities:

Currency funds 7,952,385,960.70 8,376,926,818.85 Short-term borrowings 3,840,000,000.00 2,364,400,000.00

Loans to others - -Held-for-trading financial liabilities

- -

Held-for-trading financial assets

- - Notes payable 30,822,638.92 -

Notes receivable - - Accounts payable 21,329,411.02 59,825,096.45

Accounts receivable 134,934.10 134,934.10 Advances from customers 1,071,037.57 1,070,172.75

Advances to suppliers 13,552,449.34 45,824,675.82 Employee benefits payable 175,831,824.71 319,328,720.31

Interest receivable - - Tax payable 1,555,873.21 56,013,831.38

Dividends receivable 222,103,069.61 41,958,715.85 Interest payable 35,424,088.89 52,616,700.00

Other receivables (XIII)1 39,180,217,192.21 34,438,618,026.37 Dividends payable 337,235,142.00 -

Inventories 3,206,370.23 3,206,370.23 Other payables 15,885,326,977.07 13,790,475,191.48

Non-current assets due within one year

- -Non-current liabilities due within one year

11,380,200,000.00 7,235,000,000.00

Other current assets 3,400,209,423.18 117,253.53 Other current liabilities - -

Total current assets 50,771,809,399.37 42,906,786,794.75 Total current liabilities 31,708,796,993.39 23,878,729,712.37

Non-current Assets: Non-current Liabilities:

Available-for-sale financial assets

- - Long-term borrowings 17,414,378,333.39 15,694,026,452.84

Held-to-maturity investments

- - Bonds payable 1,197,501,037.65 1,196,360,763.45

Long-term receivables - - Long-term payables - -

Long-term equity investments

(XIII)2 18,654,503,572.36 16,384,787,261.37 Special payables - -

Investment property 300,939,047.79 294,429,000.00 Provisions - -

Fixed assets 183,384,887.73 193,041,530.44 Deferred tax liabilities 76,201,607.09 76,201,607.09

Construction in progress - 2,104,503.76 Other non-current liabilities - -

Construction materials - - Total non-current liabilities 18,688,080,978.13 16,966,588,823.38

Fixed assets held for disposal

- - TOTAL LIABILITIES 50,396,877,971.52 40,845,318,535.75

Bearer biological assets - - SHAREHOLDERS' EQUITY

Oil and natural gas assets - - Share capital 4,471,508,572.00 4,471,508,572.00

Intangible assets - - Capital reserve 6,313,914,100.62 6,312,025,871.93

Development expenditure - - Less: Treasury shares - -

Goodwill - - Special reserve - -

Long-term prepayments - - Surplus reserve 1,209,287,421.76 1,209,795,733.29

Deferred tax assets 119,738,285.30 133,068,051.92 General risk provision - -

Other non-current assets - - Unappropriated profit (XIII)3 7,638,787,126.65 7,075,568,429.27

Total non-current assets 19,258,565,793.18 17,007,430,347.49TOTAL SHAREHOLDERS' EQUITY

19,633,497,221.03 19,068,898,606.49

TOTAL ASSETS 70,030,375,192.55 59,914,217,142.24TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

70,030,375,192.55 59,914,217,142.24

The accompanying notes form part of the financial statements.

GEMDALE CORPORATION

5

FOR THE SIX MONTHS ENDED JUNE 30, 2014

THE CONSOLIDATED INCOME STATEMENT

Unit: RMB

ITEMS

NOTESFor The Six Months Ended June 30,2014 (The Current Period)

For The Six Months Ended June 30,2013(The Prior Period)

(Restated)I. Total operating income (VI)33 9,083,871,342.25 8,794,931,787.69

Including: Operating income 9,083,871,342.25 8,794,931,787.69

Interest income - -

Earned premium - -

Handling charges and commissions income - -

II. Total operating costs 6,957,962,974.95 6,313,301,446.01

Including: Operating costs (VI)33 6,957,962,974.95 6,313,301,446.01

Interest expense - -

Handling charges and commissions expenses - -

Refund of insurance premiums - -

Net payments for insurance claims - -

Net provision for insurance contracts - -

Commissions on insurance policies - -

Cession charges - -

Taxes and surcharges on operations (VI)34 657,620,017.14 651,837,818.83

Selling and distribution expenses (VI)35 403,250,520.70 381,240,036.57 Administrative expenses (VI)36 485,646,912.44 394,023,637.71 Financial expenses (VI)37 156,512,040.04 152,230,450.28

Impairment loss in respect of assets (VI)38 4,415,241.03 100,407,910.58

Add: Gains from changes in fair values - -

Investment income (VI)39 (6,827,683.84) 8,932,857.65

Including: Income from investment in associates and joint ventures (70,350,617.47) (17,712,463.82)

III. Operating profit 411,635,952.11 810,823,345.36

Add: Non-operating income (VI)40 31,247,533.73 24,222,916.15

Less: Non-operating expenses (VI)41 21,071,019.71 14,254,958.18

Including: Losses from disposal of non-current assets 145,197.59 46,069.43

IV. Total profit 421,812,466.13 820,791,303.33

Less: Income tax expenses (VI)42 208,512,697.55 346,689,170.25

V. Net profit 213,299,768.58 474,102,133.08

Net profit attributable to shareholders of the parent 157,980,745.80 315,394,461.45

Profit or loss attributable to minority interests 55,319,022.78 158,707,671.63

VI. Earnings per share:

(I) Basic earnings per share (VI)43 0.04 0.07

(II) Diluted earnings per share N/A N/A

VII. Other comprehensive income (VI)44 (99,840,193.70) 72,284,371.17

VIII.Total comprehensive income 113,459,574.88 546,386,504.25

Total comprehensive income attributable to shareholders of the parent 68,994,414.37 365,809,319.11

Total comprehensive income attributable to minority interests 44,465,160.51 180,577,185.14


GEMDALE CORPORATION

6


THE COMPANY INCOME STATEMENT

Unit: RMB

ITEMS NOTES The Current Period The Prior Period

(Restated)I. Operating income (XIII)4 35,641,380.01 43,842,348.23

Less: Operating costs (XIII)4 114,637.89 33,167,272.04

Business taxes and levies 7,462,570.23 8,524,892.40

Selling and distribution expenses - 263,964.93

Administrative expenses 74,967,171.70 72,697,407.63

Financial expenses (70,662,122.36) (106,221,378.10)

Impairment loss in respect of assets 118,862.84 67,256.49

Add: Gains from changes in fair values - -

Investment income (XIII)5 1,273,970,310.30 1,643,823,378.11

Including: Income from investment in associates and joint ventures

(15,757,347.73) (1,645,875.85)

II. Operating profit 1,297,610,570.01 1,679,166,310.95

Add: Non-operating income 2,020,972.70 967.44

Less: Non-operating expenses 3,922,572.09 2,000,000.00

Including: Losses from disposal of non-current assets 72,572.09 -

III. Total profit 1,295,708,970.62 1,677,167,278.39

Less: Income tax expenses 12,474,097.99 17,980,238.95

IV. Net profit 1,283,234,872.63 1,659,187,039.44

V. Earnings per share:

(I) Basic earnings per share N/A N/A

(II) Diluted earnings per share N/A N/A

VI. Other comprehensive income - -

VII. Total comprehensive income 1,283,234,872.63 1,659,187,039.44


GEMDALE CORPORATION

7


CONSOLIDATED CASH FLOW STATEMENTS Unit: RMB

ITEMS NOTES The Current Period The Prior Period I. Cash Flows from Operating Activities:

Cash receipts from the sale of goods and the rendering of services 15,337,758,558.62 18,525,305,264.11

Net increase in deposits from customers and placements from corporations in the same industry

- -

Net increase in loan from central bank - -

Net increase in funds borrowed from other financial institutions - -

Cash premiums received on original insurance contracts - -

Cash received from re-insurance business - -

Net increase in deposits and investments from insurers - -

Net increase in disposal of trading financial assets - -

Interest, handling charges and commissions received - -

Net increase in funds deposit - -

Net increase in repurchasement business funds - -

Receipts of tax refunds - -

Other cash receipts relating to operating activities (VI)45(1) 1,886,977,202.55 438,160,982.42

Sub-total of cash inflows 17,224,735,761.17 18,963,466,246.53

Cash payments for goods purchased and services received 13,968,463,093.70 14,222,901,154.53

Net increase in loans and payments on behalf - -

Net increase in deposits with centre bank and interbank - -

Payments of claims for original insurance contracts - -

Interests, handling charges and commissions paid - -

Commissions on insurance policies paid - -

Cash payments to and on behalf of employees 714,280,981.62 491,821,536.60

Payments of all types of taxes 3,355,599,118.62 3,662,406,985.66

Other cash payments relating to operating activities (VI)45(2) 3,624,212,559.03 8,449,521,118.10

Sub-total of cash outflows 21,662,555,752.97 26,826,650,794.89

Net Cash Flows from Operating Activities (VI)46(1) (4,437,819,991.80) (7,863,184,548.36)

II. Cash Flows from Investing Activities:

Cash receipts from disposals and returns of investments 1,191,938,000.00 1,190,331,060.15

Cash receipts from returns on investments 24,341,734.54 30,353,695.18 Net cash receipts from disposals of fixed assets, intangible assets and other long-term 111,807.50 218,367.76

Net cash receipts from disposals of subsidiaries and other business units (VI)46(2) - -

Other cash receipts relating to investing activities - -

Sub-total of cash inflows 1,216,391,542.04 1,220,903,123.09 Cash payments to acquire and construct fixed assets, intangible assets and other long-term assets

125,063,617.34 17,604,118.76

Cash payments to acquire investments 4,985,271,803.93 1,612,040,650.00

Net increase in secured loans - -

Net cash payments for acquisitions of subsidiaries and other business units (VI)46(2) 50,974,286.75 13,232,834.04

Other cash payments relating to investing activities (VI)45(3) 34,187,844.57 -


Net Cash Flows from Investing Activities (3,979,106,010.55) (421,974,479.71)

III. Cash Flows from Financing Activities:

Cash receipts from investors making investment in the enterprise 596,757,800.00 1,096,087,139.07

Including: cash receipts from minorities making investment in subsidiaries 596,757,800.00 1,096,087,139.07

Cash receipts from borrowings 17,416,425,491.07 12,744,000,000.00

Cash receipts from issue of bonds 1,035,415,936.46 1,986,408,433.60

Other cash receipts relating to financing activities (VI)45(4) 909,995,705.29 80,364,626.54


Cash repayments of amounts borrowed 9,810,294,849.57 8,698,938,854.54

Cash payments for distribution of dividends or profit or interest expenses 2,039,949,516.56 1,743,809,096.98

Including: payments for distribution of dividends or profit to minorities of subsidiaries 284,064,321.07 340,366,236.08

Other cash payments relating to financing activities (VI)45(5) 83,423,766.30 57,466,318.40


Net Cash Flows from Financing Activities 8,024,926,800.39 5,406,645,929.29

IV. Effect of Foreign Exchange Rate Changes on Cash and Cash Equivalents 4,339,395.45 (38,108,999.77)

V. Net Increase in Cash and Cash Equivalents (387,659,806.51) (2,916,622,098.55)

Add: Opening Balance of Cash and Cash Equivalents (VI)46(3) 16,901,051,824.53 19,204,139,167.03

VI. Closing Balance of Cash and Cash Equivalents (VI)46(3) 16,513,392,018.02 16,287,517,068.48

GEMDALE CORPORATION

8


THE COMPANY CASH FLOW STATEMENTS Unit: RMB

ITEMS NOTE The Current Period The Prior Period I. Cash Flows from Operating Activities:

Cash receipts from the sale of goods and the rendering of services 35,424,765.32 10,453,786.44

Receipts of tax refunds - -

Other cash receipts relating to operating activities 1,000,599,414.63 77,012,960.50

Sub-total of cash inflows 1,036,024,179.95 87,466,746.94

Cash payments for goods purchased and services received 45,759,280.28 33,340,786.16

Cash payments to and on behalf of employees 194,855,114.47 58,941,488.48

Payments of all types of taxes 168,288,221.33 158,275,641.36

Other cash payments relating to operating activities 2,347,426,876.24 5,354,936,235.68


Net Cash Flows from Operating Activities (1,720,305,312.37) (5,518,027,404.74)

II. Cash Flows from Investing Activities:

Cash receipts from disposals and returns of investments 1,070,000,000.00 1,279,210,000.00

Cash receipts from returns on investments 1,109,583,304.27 1,643,648,434.00

Net cash receipts from disposals of fixed assets, intangible assets and other long-term assets

85,090.00 1,000.00

Net cash receipts from disposals of subsidiaries and other business units - 662,120.30

Other cash receipts relating to investing activities - -

Sub-total of cash inflows 2,179,668,394.27 2,923,521,554.30 Cash payments to acquire and construct fixed assets, intangible assets and other long-term assets

7,362,928.79 4,594,407.95

Cash payments to acquire investments 6,765,896,715.00 3,783,254,360.00 Net cash payments for acquisitions of subsidiaries and other business units

- -

Other cash payments relating to investing activities - -


Net Cash Flows from Investing Activities (4,593,591,249.52) (864,327,213.65)

III. Cash Flows from Financing Activities:

Cash receipts from investors making investment in the enterprise - -

Cash receipts from borrowings 13,149,000,000.00 12,558,000,000.00

Cash receipts from issue of bonds - -

Other cash receipts relating to financing activities 975,342,288.05 -


Cash repayments of amounts borrowed 5,792,800,000.00 6,846,981,148.02 Cash payments for distribution of dividends

fi i 1,445,631,512.84 1,181,647,821.66

Other cash payments relating to financing activities 21,241,648.73 23,682,233.81


Net Cash Flows from Financing Activities 6,864,669,126.48 4,505,688,796.51

IV. Effect of Foreign Exchange Rate Changes on Cash and Cash Equivalents

28,865.31 (50,818.36)

V. Net Increase in Cash and Cash Equivalents 550,801,429.90 (1,876,716,640.24)

Add: Opening Balance of Cash and Cash Equivalents 7,215,381,501.09 7,744,329,330.87

VI. Closing Balance of Cash and Cash Equivalents 7,766,182,930.99 5,867,612,690.63


GEMDALE CORPORATION

9


CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY Unit: RMB

ITEMS

The Current Period The Prior Period (Restated)

Attributable to equity holders of the parent

Minority interests Total shareholders'

equity

Attributable to equity holders of the parent

Minority interests Total shareholders'

equity Share capital Capital reserve Surplus reserve Unappropriated

profit Others Share capital Capital reserve Surplus reserve Unappropriated

profit Others

I. Closing balance for the prior year

4,471,508,572.00 5,659,160,053.76 1,209,795,733.29 17,243,968,733.11 529,898,727.09 8,921,123,872.17 38,035,455,691.42 4,471,508,572.00 5,989,575,064.58 998,395,245.96 11,700,162,137.06 356,877,471.02 7,479,916,831.36 30,996,435,321.98

Add: Changes in accounting policies

- - - - - - - - - 15,301,201.13 2,488,791,600.71 - 1,054,861,002.70 3,558,953,804.54

Correction of prior periods errors

- - - - - - - - - - - - - -

Others - - (508,311.53) 508,311.53 - - - - - 27,383,039.03 (27,383,039.03) - - -

II. Opening balance for the current year

4,471,508,572.00 5,659,160,053.76 1,209,287,421.76 17,244,477,044.64 529,898,727.09 8,921,123,872.17 38,035,455,691.42 4,471,508,572.00 5,989,575,064.58 1,041,079,486.12 14,161,570,698.74 356,877,471.02 8,534,777,834.06 34,555,389,126.52

III. Changes for the period

- (49,993,115.55) - (557,460,625.72) (77,798,896.43) 401,773,630.26 (283,479,007.44) - 16,195,503.13 - (42,326,224.31) 50,414,857.66 736,374,915,85 760,659,052.33

(I) Net profit - - - 157,980,745.80 - 55,319,022.78 213,299,768.58 - - - 315,394,461.45 - 158,707,671.63 474,102,133.08

(II) Other comprehensive - (11,187,435.00) - (77,798,896.43) (10,853,862.27) (99,840,193.70) - - - - 50,414,857.66 21,869,513.51 72,284,371.17

Subtotal of (I) and (II)

- (11,187,435.00) - 157,980,745.80 (77,798,896.43) 44,465,160.51 113,459,574.88 - - - 315,394,461.45 50,414,857.66 180,577,185.14 546,386,504.25

(III) Owner's contributions and reduction in capital

- (38,805,680.55) - - - 641,372,790.82 602,567,110.27 - 16,195,503.13 - - - 896,163,966.79 912,359,469.92

1. Capital contribution from - - - - - 503,400,000.00 503,400,000.00 - - - - - 531,897,100.00 531,897,100.00

2. Share-based payment recognised in

- 21,282,290.79 - - - 9,705,294.91 30,987,585.70 - 17,184,823.91 - - - 1,451,736.66 18,636,560.57

3. Others - (60,087,971.34) - - - 128,267,495.91 68,179,524.57 - (989,320.78) - - - 362,815,130.13 361,825,809.35

(IV) Profit distribution

- - - (715,441,371.52) - (284,064,321.07) (999,505,692.59) - - - (357,720,685.76) - (340,366,236.08) (698,086,921.84)

1. Transfer to surplus reserve

- - - - - - - - - - - - - -

2．Transfer to generic risk reserve

- - - - - - - - - - - - - -

3. Distribution to shareholders

- - - (715,441,371.52) - (284,064,321.07) (999,505,692.59) - - - (357,720,685.76) - (340,366,236.08) (698,086,921.84)

4．Others - - - - - - - - - - - - - -

(V)Transfer within shareholders' equity

- - - - - - - - - - - - - -

1．Capitalization of capital reserve

- - - - - - - - - - - - - -

2．Capitalization of surplus reserve

- - - - - - - - - - - - - -

3．Loss made up by surplus reserve

- - - - - - - - - - - - - -

4．Others - - - - - - - - - - - - - -

IV. Balance at June 30

4,471,508,572.00 5,609,166,938.21 1,209,287,421.76 16,687,016,418.92 452,099,830.66 9,322,897,502.43 37,751,976,683.98 4,471,508,572.00 6,005,770,567.71 1,041,079,486.12 14,119,244,474.43 407,292,328.68 9,271,152,749.91 35,316,048,178.85


GEMDALE CORPORATION

10


THE COMPANY STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY Unit: RMB

ITEMS

The Current Peroid The Prior Peroid (Restated)

Share capital Capital reserve Surplus reserve Unappropriated profit Total shareholders' equity Share capital Capital reserve Surplus reserve Unappropriated profit Total shareholders' equity

I. Closing balance for the prior year

4,471,508,572.00 6,312,025,871.93 1,209,795,733.29 7,075,568,429.27 19,068,898,606.49 4,471,508,572.00 6,295,050,594.19 998,395,245.96 5,530,684,729.15 17,295,639,141.30

Add: Changes in accounting policies

- - - - - - - 15,301,201.13 137,710,810.05 153,012,011.18

Correction of prior periods errors - - - - - - - - - -

Others - - (508,311.53) (4,574,803.73) (5,083,115.26) - - 27,383,039.03 246,447,351.31 273,830,390.34

II. Opening balance for the current year

4,471,508,572.00 6,312,025,871.93 1,209,287,421.76 7,070,993,625.54 19,063,815,491.23 4,471,508,572.00 6,295,050,594.19 1,041,079,486.12 5,914,842,890.51 17,722,481,542.82

III. Changes for the period - 1,888,228.69 - 567,793,501.11 569,681,729.80 - 17,184,823.91 - 1,301,466,353.68 1,318,651,177.59

(I) Net profit - - - 1,283,234,872.63 1,283,234,872.63 - - - 1,659,187,039.44 1,659,187,039.44

(II) Other comprehensive income - - - - - - - - - -

Subtotal of (I) and (II) - - - 1,283,234,872.63 1,283,234,872.63 - - - 1,659,187,039.44 1,659,187,039.44

(III) Owner's contributions and reduction in capital

- 1,888,228.69 - - 1,888,228.69 - 17,184,823.91 - - 17,184,823.91

1. Capital contribution from shareholders

- - - - 0.00 - - - -

2. Share-based payment recognised in shareholders' equity

- 1,888,228.69 - - 1,888,228.69 - 17,184,823.91 - - 17,184,823.91

3. Others - - - - 0.00 - - - - -

(IV) Profit distribution - - - (715,441,371.52) (715,441,371.52) - - - (357,720,685.76) (357,720,685.76)

1. Transfer to surplus reserve - - - - - - - - - -

2．Transfer to generic risk reserve - - - - - - - - - -

3. Distribution to shareholders - - - (715,441,371.52) (715,441,371.52) - - - (357,720,685.76) (357,720,685.76)

4．Others - - - - - - - - - -

(V)Transfer within shareholders' equity

- - - - - - - - - -

1．Capitalisation of capital reserve - - - - - - - - - -

2．Capitalisation of surplus reserve - - - - - - - - - -

3．Loss made up by surplus reserve

- - - - - - - - - -

4．Others - - - - - - - - - -

IV. Balance at June 30 4,471,508,572.00 6,313,914,100.62 1,209,287,421.76 7,638,787,126.65 19,633,497,221.03 4,471,508,572.00 6,312,235,418.10 1,041,079,486.12 7,216,309,244.19 19,041,132,720.41


GEMDALE CORPORATION

NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2014

11

(I) BASIC INFORMATION ABOUT THE COMPANY

Gemdale Corporation (the "Company") is a joint stock limited company established in accordance with the approval issued by Leading Office of Shenzhen Enterprise System Reform (filed as Shen Qi Gai Ban [1996] No. 02). On February 8, 1996, the Company acquired the Business License of Enterprise Legal Person and the license number is 19218163-4 (changed to 440301103379518 on March 9, 2001). On January, 15, 2001, the Company conducted the initial public offering of RMB ordinary shares (A-share) with approval issued by China Securities Regulatory Commission (filed as Zheng Jian Fa Xing Zi [2001] No. 2). On April 12, 2001, the shares of the Company started to be traded on Shanghai Stock Exchange (“SSE”) with approval issued by SSE (filed as Shang Zheng Shang Zi [2001] No.39 named as Listing Notice)

The Company's head office is located in Shenzhen. The Company and its subsidiaries are mainly engaged in real estate development and operation, management of self-owned properties, set-up of various entities and information consultansy.

(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES, ACCOUNTING ESTIMATES, AND PRIOR PERIOD ERRORS

1. Basis of preparation of financial statements

The Company has adopted the Accounting Standards for Business Enterprises issued by the Ministry of Finance (MoF) on February 15, 2006. In addition, the Company has disclosed relevant financial information in accordance with Information Disclosure and Presentation Rules for Companies Offering Securities to the Public No. 15－ General Provisions on Financial Reporting (Revised in 2010). Basis of accounting and principle of measurement The Company has adopted the accrual basis of accounting. Except for certain financial instruments which are measured at fair value, the Company adopts the historical cost as the principle of measurement of the financial statements. Where assets are impaired, provisions for asset impairment are made in accordance with relevant requirements.

GEMDALE CORPORATION


12

(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES, ACCOUNTING ESTIMATES, AND PRIOR PERIOD ERRORS - continued 2. Statement of compliance with the ASBE

The financial statements of the Company have been prepared in accordance with Accounting Standards for Business Enterprises, and present truly and completely, the Company's and consolidated financial position as of June 30, 2014, and the Company's and consolidated results of operations and cash flows for the six months then ended. 3. Accounting period The Company has adopted the calendar year as its accounting year, i.e. from January 1 to December 31.

4. Functional currency Renminbi (“RMB”) is the currency of the primary economic environment in which the Company and its domestic subsidiaries operate. Therefore, the Company and its domestic subsidiaries choose RMB as their functional currency. The Company's foreign subsidiary chooses currency Hong Kong dollar (“HKD”) as its functional currency on the basis of the primary economic environment in which it operates. The Company adopts RMB to prepare its financial statements. 5. The accounting treatment of business combinations involving enterprises under common control and business combinations not involving enterprises under common control Business combinations are classified into business combinations involving enterprises under common control and business combinations not involving enterprises under common control.

5.1 Business combinations involving enterprises under common control A business combination involving enterprises under common control is a business combination in which all of the combining enterprises are ultimately controlled by the same party or parties both before and after the combination, and that control is not transitory. Assets and liabilities obtained shall be measured at their respective carrying amounts as recorded by the combining entities at the date of the combination. The difference between the carrying amount of the net assets obtained and the carrying amount of the consideration paid for the combination is adjusted to the share premium in capital reserve. If the share premium is not sufficient to absorb the difference, any excess shall be adjusted against retained earnings. Costs that are directly attributable to the combination are charged to profit or loss in the period in which they are incurred.

GEMDALE CORPORATION


13

(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES, ACCOUNTING ESTIMATES, AND PRIOR PERIOD ERRORS - continued 5. The accounting treatment of business combinations involving enterprises under common control and business combinations not involving enterprises under common control - continued

5.2 Business combinations not involving enterprises under common control and goodwill A business combination not involving enterprises under common control is a business combination in which all of the combining enterprises are not ultimately controlled by the same party or parties before and after the combination. The cost of combination is the aggregate of the fair values, at the acquisition date, of the assets given, liabilities incurred or assumed, and equity securities issued by the acquirer, in exchange for control of the acquire, the intermediary expenses (fees in respect of auditing, legal services, valuation and consultancy services, etc.) and other administrative expenses attributable to the business combination are recognised in profit or loss in the periods when they are incurred. Where a business combination not involving enterprises under common control is achieved in stages that involve multiple transactions, the cost of combination is the sum of the consideration paid at the acquisition date and the fair value of the equity in the acquiree held before the acquisition. The equity held in the acquiree before the acquisition date is remeasured at its fair value at the acquisition date, with any difference between its fair value and its carrying amount being recognised as investment income, and the other comprehensive income relating to the equity held in the acquiree before the acquisition date being transferred to investment income.

The acquirer's identifiable assets, liabilities and contingent liabilities acquired by the acquirer in a business combination that meet the recognition criteria, shall be measured at fair value at the acquisition date. Where the cost of combination exceeds the acquirer's interest in the fair value of the acquirer's identifiable net assets, the difference is treated as an asset and recognised as goodwill, which is measured at cost on initial recognition. Where the cost of combination is less than the acquirer's interest in the fair value of the acquirer's identifiable net assets, the acquirer reassesses the measurement of the fair values of the acquirer's identifiable assets, liabilities and contingent liabilities and measurement of the cost of combination. If after that reassessment, the cost of combination is still less than the acquirer's interest in the fair value of the acquirer's identifiable net assets, the acquirer recognises the remaining difference immediately in profit or loss for the current period. Goodwill arising on a business combination is measured at cost less accumulated impairment losses, and is presented separately in the consolidated financial statements. It is tested for impairment at least at the end of each year. For the purpose of impairment testing, goodwill is considered together with the related assets group(s), i.e., goodwill is reasonably allocated to the related assets group(s) or each of assets group(s) expected to benefit from the synergies of the combination. In testing an assets group with goodwill for impairment, an impairment loss is recognised if the recoverable amount of the assets group or sets of assets groups (including goodwill) is less than its carrying amount. The impairment loss is firstly allocated to reduce the carrying amount of any goodwill allocated to such assets group or sets of assets groups, and then to the other assets of the Company pro-rata basis on the basis of the carrying amount of each asset (other than goodwill) in the group.

GEMDALE CORPORATION


14

(II) THE COMPANY 'S SIGNIFICANT ACCOUNTING POLICIES, ACCOUNTING ESTIMATES, AND PRIOR PERIOD ERRORS - continued 5. The accounting treatment of business combinations involving enterprises under common control and business combinations not involving enterprises under common control - continued 5.2 Business combinations not involving enterprises under common control and goodwill - continued The recoverable amount of an asset is the higher of its fair value less costs of disposal and the present value of the future cash flows expected to be derived from the asset. An asset's fair value is the price in a sale agreement in an arm's length transaction. If there is no sale agreement but an asset is traded in an active market, fair value is the current bid price. If there is no sale agreement or active market for an asset, fair value is assessed based on the best information available. Costs of disposal include legal costs related to the disposal of the asset, related taxes, costs of removing the asset and direct costs to bring the asset into condition for its sale. The present value of expected future cash flows of an asset shall be determined by estimating the future cash flows to be derived from continuing use of the asset and from its ultimate disposal and applying the appropriate discount rate to those future cash flows. The impairment of goodwill is recognised in profit or loss for the period in which it is incurred and will not be reversed in any subsequent period.

6. Preparation of consolidated financial statements The scope of consolidation in the consolidated financial statements is determined on the basis of control. Control is the power to govern the financial and operating policies of an enterprise so as to obtain benefits from its operating activities. For a subsidiary already disposed of by the Group, the operating results and cash flows before the date of disposal (the date when control is lost) are included in the consolidated income statement and consolidated statement of cash flows, as appropriate. For subsidiaries acquired through a business combination involving enterprises not under common control, the operating results and cash flows from the acquisition date (the date when control is obtained) are included in the consolidated income statement and consolidated statement of cash flows, as appropriate, and no adjustment is made to the opening balances and comparative figures in the consolidated financial statements. No matter when the business combination occurs in the reporting period, subsidiaries acquired through a business combination involving enterprises under common control are included in the Group's scope of consolidation as if they had been included in the scope of consolidation from the date when they first came under the common control of the ultimate controlling party. Their operating results and cash flows from the beginning of the earliest reporting period are included in the consolidated income statement and consolidated statement of cash flows, as appropriate. The significant accounting policies and accounting periods adopted by the subsidiaries are determined based on the uniform accounting policies and accounting periods set out by the Company.

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(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES, ACCOUNTING ESTIMATES, AND PRIOR PERIOD ERRORS - continued 6. Preparation of consolidated financial statements – continued All significant intra-group balances and transactions are eliminated on consolidation. The portion of subsidiaries' equity that is not attributable to the parent is treated as minority interests and presented as "minority interests" in the consolidated balance sheet within shareholders' equity. The portion of net profits or losses of subsidiaries for the period attributable to minority interests is presented as "minority interests" in the consolidated income statement below the "net profit" line item. When the amount of loss for the period attributable to the minority shareholders of a subsidiary exceeds the minority shareholders' portion of the opening balance of owners' equity of the subsidiary, the excess amount is still allocated against minority interests. Acquisition of minority interests or disposals of interests in a subsidiary that do not result in the loss of control over the subsidiary are accounted for as equity transactions. The carrying amounts of the parent's interests and minority interests are adjusted to reflect the changes in their relative interests in the subsidiary. The difference between the amount by which the minority interests are adjusted and the fair value of the consideration paid or received is adjusted to capital reserve. If the capital reserve is not sufficient to absorb the difference, the excess are adjusted against retained earnings. When the Company loses control over a subsidiary due to disposal of equity investment or other reason, any retained interest is re-measured at its fair value at the date when control is lost. The difference between (i) the aggregate of the consideration received on disposal and the fair value of any retained interest and (ii) the share of the former subsidiary's net assets cumulatively calculated from the acquisition date according to the original proportion of ownership interests is recognised as investment income in the period in which control is lost. Other comprehensive income associated with investment in the former subsidiary is reclassified to investment income in the period in which control is lost. 7. Recognition criteria of cash and cash equivalents Cash comprises cash on hand and deposits that can be readily withdrawn on demand. Cash equivalents are the Group's short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

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(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES, ACCOUNTING ESTIMATES, AND PRIOR PERIOD ERRORS - continued 8. Translation of transactions and financial statements denominated in foreign currencies 8.1 Transactions denominated in foreign currencies A foreign currency transaction is recorded, on initial recognition, by applying the spot exchange rate on the date of the transaction. At the balance sheet date, foreign currency monetary items are translated into RMB using the spot exchange rates at the balance sheet date. Exchange differences arising from the differences between the spot exchange rates prevailing at the balance sheet date and those on initial recognition or at the previous balance sheet date are recognised in profit or loss for the period, except that (1) exchange differences related to a specific-purpose borrowing denominated in foreign currency that qualify for capitalisation are capitalised as part of the cost of the qualifying asset during the capitalisation period; (2) exchange differences related to hedging instruments for the purpose of hedging against foreign currency risks are accounted for using hedge accounting; (3) exchange differences arising from change in the carrying amounts (other than the amortised cost) of available-for-sale monetary items are recognised as other comprehensive income and included in capital reserve. When the consolidated financial statements include foreign operation(s), if there are foreign currency monetary items constituting a net investment in a foreign operation, exchange difference arising from changes in exchange rates are recognised as "exchange difference arising on translation of financial statements denominated in foreign currency " in owner's equity, and in profit and loss for the period upon disposal of the foreign operation. Foreign currency non-monetary items measured at historical cost are translated to the amounts in functional currency at the spot exchange rates on the dates of the transactions; the amounts in functional currency remain unchanged. Foreign currency non-monetary items measured at fair value are re-translated at the spot exchange rate on the date the fair value is determined. Difference between the re-translated functional currency amount and the original functional currency amount is treated as changes in fair value (including changes of exchange rate) and is recognised in profit and loss or as other comprehensive income included in capital reserve. 8.2 Translation of financial statements denominated in foreign currencies For the purpose of preparing the consolidated financial statements, financial statements of a foreign operation are translated from the foreign currency into RMB using the following method: assets and liabilities on the balance sheet are translated at the spot exchange rate prevailing at the balance sheet date; shareholders' equity items except for retained earnings are translated at the spot exchange rates at the dates on which such items arose; all items in the income statement as well as items reflecting the amount of profit distributed are translated at the spot exchange rates on the dates of the transactions; the opening balance of retained earnings is the translated closing balance of the previous year's retained earnings; the closing balance of retained earnings is calculated and presented on the basis of each translated income statement and profit distribution item. The difference between the translated assets and the aggregate of liabilities and shareholders' equity items is separately presented, as the translation difference of financial statements denominated in foreign currencies, under the owner's equity in the balance sheet.

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(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES, ACCOUNTING ESTIMATES, AND PRIOR PERIOD ERRORS - continued 8. Translation of transactions and financial statements denominated in foreign currencies- continued 8.2 Translation of financial statements denominated in foreign currencies - continued Cash flows arising from transaction in a foreign currency and the cash flows of a foreign subsidiary are translated at average rate for the accounting period of the consolidated financial statements. The effect of exchange rate changes on cash and cash equivalents is regarded as a reconciling item and presented separately in the cash flow statement as "effect of exchange rate changes on cash and cash equivalents ". The opening balances and the comparative figures of previous year are presented at the translated amounts of previous year's financial statements. On disposal of the Group's entire interest in a foreign operation, or disposal of certain interest (or due to other reasons) resulting in a loss of control over a foreign operation, the Company transfers the accumulated translation differences attributable to the shareholders' equity of the parent that relating to translation of the financial statements of that foreign operation, presented under shareholders' equity, to profit or loss in the period in which the disposal occurs. In case of a disposal or other reason that does not result in the Company losing control over a foreign operation, the proportionate share of accumulated translation differences are re-attributed to non-controlling interests and are not recognised in profit and loss. For partial disposals of associates or joint ventures, the proportionate share of the accumulated translation differences is reclassified to profit or loss. 9. Financial instruments Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially measured at fair value. For financial assets and financial liabilities at fair value through profit or loss, transaction costs are immediately recognised in profit or loss. For other financial assets and financial liabilities, transaction costs are included in their initial recognised amounts. 9.1 Determination of fair value Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm's length transaction. For a financial instrument which has an active market, the Company uses the quoted price in the active market to establish its fair value. For a financial instrument which has no active market, the Company establishes fair value by using a valuation technique. Valuation techniques include using recent arm's length market transactions between knowledgeable, willing parties, reference to the current fair value of another instrument that is substantially the same, discounted cash flow analysis and option pricing models.

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(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES, ACCOUNTING ESTIMATES, AND PRIOR PERIOD ERRORS - continued 9. Financial instruments - continued 9.2 Effective interest method The effective interest method is a method of calculating the amortised cost of a financial asset or a financial liability (or a group of financial assets or financial liabilities) and of allocating the interest income or interest expense over the relevant period, using the effective interest rate. The effective interest rate is the rate that exactly discounts estimated future cash flows through the expected life of the financial asset or financial liability or, where appropriate, a shorter period to the net carrying amount of the financial asset or financial liability. When calculating the effective interest rate, the Company estimates future cash flows considering all contractual terms of the financial asset or financial liability (without considering future credit losses), and also considers all fees paid or received between the parties to the contract giving rise to the financial asset and financial liability that are an integral part of the effective interest rate, transaction costs, and premiums or discounts etc.

9.3 Classification, recognition and measurement of financial assets On initial recognition, the Group's financial assets are classified into one of the four categories, including financial assets at fair value through profit or loss ("FVTPL"), held-to-maturity investments, loans and receivables, and available-for-sale financial assets. All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis.

9.3.1. Financial Assets at Fair Value through Profit or Loss ("FVTPL") Financial assets at fair value through profit or loss ("FVTPL") include financial assets held for trading and those designated as at fair value through profit or loss.

A financial asset is classified as held for trading if one of the following conditions is satisfied: (1) It has been acquired principally for the purpose of selling in the near term; or (2) On initial recognition it is part of a portfolio of identified financial instruments that the Company manages together and there is objective evidence that the Company has a recent actual pattern of short-term profit-taking; or (3) It is a derivative that is not designated and effective as a hedging instrument, or a financial guarantee contract, or a derivative that is linked to and must be settled by delivery of an unquoted equity instrument (without a quoted price in an active market) whose fair value cannot be reliably measured. A financial asset may be designated as at FVTPL upon initial recognition only when one of the following conditions is satisfied: (1) Such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise result from measuring assets or recognising the gains or losses on them on different bases; or (2) The financial asset forms part of a group of financial assets or a group of financial assets and financial liabilities, which is managed and its performance is evaluated on a fair value basis, in accordance with the Group's documented risk management or investment strategy, and information about the grouping is reported to key management personnel on that basis.

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(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES, ACCOUNTING ESTIMATES, AND PRIOR PERIOD ERRORS - continued 9. Financial instruments - continued 9.3 Classification, recognition and measurement of financial assets - continued 9.3.1. Financial Assets at Fair Value through Profit or Loss ("FVTPL") - continued Financial assets at FVTPL are subsequently measured at fair value. Any gains or losses arising from changes in the fair value and any dividend or interest income earned on the financial assets are recognised in profit or loss

9.3.2 Held-to-maturity investments Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturity dates that the Group's management has the positive intention and ability to hold to maturity. Held-to-maturity investments are subsequently measured at amortised cost using the effective interest method. Gain or loss arising from derecognition, impairment or amortisation is recognised in profit or loss.

9.3.3.Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Financial assets classified as loans and receivables by the Company include notes receivable, accounts receivable, interest receivable, dividends receivable, and other receivables. Loans and receivables are subsequently measured at amortised cost using the effective interest method. Gain or loss arising from derecognition, impairment or amortisation is recognised in profit or loss. 9.3.4.Available-for-sale financial assets Available-for-sale financial assets include non-derivative financial assets that are designated on initial recognition as available for sale, and financial assets that are not classified as financial assets at fair value through profit or loss, loans and receivables or held-to-maturity investments.

Available-for-sale financial assets are subsequently measured at fair value, and gains or losses arising from changes in the fair value are recognised as other comprehensive income and included in the capital reserve, except that impairment losses and exchange differences related to amortised cost of financial assets are recognised in profit or loss, until the financial assets are derecognised, at which time the gains or losses are released and recognised in profit or loss. Interests obtained and the dividends declared by the investee during the period in which the available-for-sale financial assets are held, are recognised in investment gains.

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(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES, ACCOUNTING ESTIMATES, AND PRIOR PERIOD ERRORS - continued 9. Financial instruments - continued

9.3.4.Available-for-sale financial assets - continued For investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured, and derivative financial assets that are linked to and must be settled by delivery of such unquoted equity instruments, they are measured at cost. 9.4 Impairment of financial assets The Company assesses at each balance sheet date the carrying amounts of financial assets other than those at fair value through profit or loss. If there is objective evidence that a financial asset is impaired, the Company determines the amount of any impairment loss. Objective evidence that a financial asset is impaired is evidence that, arising from one or more events that occurred after the initial recognition of the asset, the estimated future cash flows of the financial asset, which can be reliably measured, have been affected. Objective evidence that a financial asset is impaired includes the following observable events: (1) Significant financial difficulty of the issuer or obligor; (2) A breach of contract by the borrower, such as a default or delinquency in interest or

principal payments; (3) The Group, for economic or legal reasons relating to the borrower's financial difficulty,

granting a concession to the borrower; (4) It becoming probable that the borrower will enter bankruptcy or other financial

reorganisations; (5) The disappearance of an active market for that financial asset because of financial

difficulties of the issuer; (6) Upon an overall assessment of a group of financial assets, observable data indicates that

there is a measurable decrease in the estimated future cash flows from the companion financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial assets in the group. Such observable data includes: - Adverse changes in the payment status of borrower in the Company of assets; - Economic conditions in the country or region of the borrower which may lead to a failure to pay the Company of assets;

(7) Significant adverse changes in the technological, market, economic or legal environment in which the issuer operates, indicating that the cost of the investment in the equity instrument may not be recovered by the investor;

(8) A significant or prolonged decline in the fair value of an investment in an equity instrument below its cost;

(9) Other objective evidence indicating there is an impairment of a financial asset.

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(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES, ACCOUNTING ESTIMATES, AND PRIOR PERIOD ERRORS - continued 9. Financial instruments - continued 9.4 Impairment of financial assets - continued - Impairment of financial assets measured at amortised cost If financial assets carried at cost or amortised cost are impaired, the carrying amounts of the financial assets are reduced to the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset's original effective interest rate. The amount of reduction is recognised as an impairment loss in profit or loss. If, subsequent to the recognition of an impairment loss on financial assets carried at amortised cost, there is objective evidence of a recovery in value of the financial assets which can be related objectively to an event occurring after the impairment is recognised, the previously recognised impairment loss is reversed. However, the reversal does not result in a carrying amount of the financial asset that exceeds what the amortised cost would have been had the impairment not been recognised at the date the impairment is reversed. - Impairment of financial assets measured at amortised cost- continued For a financial asset that is individually significant, the Company assesses the asset individually for impairment. For a financial asset that is not individually significant, the Company assesses the asset individually for impairment or includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. If the Company determines that no objective evidence of impairment exists for an individually assessed financial asset (whether significant or not), it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets for which an impairment loss is individually recognised are not included in a collective assessment of impairment. - Impairment of available-for-sale financial assets When an available-for-sale financial asset is impaired, the cumulative loss arising from decline in fair value previously recognised directly in capital reserve is reclassified from the capital reserve to profit or loss. The amount of the cumulative loss that is reclassified from capital reserve to profit or loss is the difference between the acquisition cost (net of any principal repayment and amortisation) and the current fair value, less any impairment loss on that financial asset previously recognised in profit or loss. If, subsequent to the recognition of an impairment loss on available-for-sale financial assets, there is objective evidence of a recovery in value of the financial assets which can be related objectively to an event occurring after the impairment is recognised, the previously recognised impairment loss is reversed. The amount of reversal of impairment loss on available-for-sale equity instruments is recognised as other comprehensive income and included in the capital reserve, while the amount of reversal of impairment loss on available-for-sale debt instruments is recognised in profit or loss.

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(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES, ACCOUNTING ESTIMATES, AND PRIOR PERIOD ERRORS - continued 9. Financial instruments - continued 9.4 Impairment of financial assets – continued - Impairment of financial assets measured at cost If an impairment loss has been incurred on an investment in unquoted equity instrument (without a quoted price in an active market) whose fair value cannot be reliably measured, or on a derivative financial asset that is linked to and must be settled by delivery of such an unquoted equity instrument, the carrying amount of the financial asset is reduced to the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset. The amount of reduction is recognised as an impairment loss in profit or loss. The impairment loss on such financial asset is not reversed once it is recognised. 9.5 Transfer of financial assets The Company derecognises a financial asset if one of the following conditions is satisfied: (1) the contractual rights to the cash flows from the financial asset expire; or (2) the financial asset has been transferred and substantially all the risks and rewards of ownership of the financial asset is transferred to the transferee; or (3) although the financial asset has been transferred, the Company neither transfers nor retains substantially all the risks and rewards of ownership of the financial asset but has not retained control of the financial asset. If the Company neither transfers nor retains substantially all the risks and rewards of ownership of a financial asset, and it retains control of the financial asset, it recognises the financial asset to the extent of its continuing involvement in the transferred financial asset and recognises an associated liability. The extent of the Group's continuing involvement in the transferred asset is the extent to which it is exposed to changes in the value of the transferred asset. For a transfer of a financial asset in its entirety that satisfies the derecognition criteria, the difference between (1) the carrying amount of the financial asset transferred; and (2) the sum of the consideration received from the transfer and any cumulative gain or loss that has been recognised in other comprehensive income, is recognised in profit or loss. If a part of the transferred financial asset qualifies for derecognition, the carrying amount of the transferred financial asset is allocated between the part that continues to be recognised and the part that is derecognised, based on the respective fair values of those parts. The difference between (1) the carrying amount allocated to the part derecognised; and (2) the sum of the consideration received for the part derecognised and any cumulative gain or loss allocated to the part derecognised which has been previously recognised in other comprehensive income, is recognised in profit or loss.

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(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES, ACCOUNTING ESTIMATES, AND PRIOR PERIOD ERRORS - continued 9. Financial instruments - continued 9.6 Classification and recognition of financial liabilities Debt and equity instruments issued by the Company are classified into financial liabilities or equity on the basis of the substance of the contractual arrangements and definitions of financial liability and equity instrument. On initial recognition, financial liabilities are classified into financial liabilities at fair value through profit or loss and other financial liabilities.

9.6.1 Financial liabilities at fair value through profit or loss

Financial liabilities at FVTPL consist of financial liabilities held for trading and those designated as at FVTPL on initial recognition. A financial liability is classified as held for trading if one of the following conditions is satisfied: (1) It has been acquired principally for the purpose of repurchasing in the near term; or (2) On initial recognition it is part of a portfolio of identified financial instruments that the Company manages together and there is objective evidence that the Company has a recent actual pattern of short-term profit-taking; or (3) It is a derivative, except for a derivative that is a designated and effective hedging instrument, or a financial guarantee contract, or a derivative that is linked to and must be settled by delivery of an unquoted equity instrument (without a quoted price in an active market) whose fair value cannot be reliably measured. A financial liability may be designated as at FVTPL upon initial recognition only when one of the following conditions is satisfied: (1) Such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise result from measuring liabilities or recognising the gains or losses on them on different bases; or (2) The financial liability forms part of a group of financial liabilities or a group of financial assets and financial liabilities, which is managed and its performance is evaluated on a fair value basis, in accordance with the Group's documented risk management or investment strategy, and information about the grouping is reported to key management personnel on that basis. Financial liabilities at FVTPL are subsequently measured at fair value, any gains or losses arising from changes in the fair value or any dividend or interest expense related with the financial liabilities are recognized in profit or loss. 9.6.2 Other financial liabilities For a derivative liability that is linked to and must be settled by delivery of an unquoted equity instrument (without a quoted price in an active market) whose fair value cannot be reliably measured, it is subsequently measured at cost. Other financial liabilities are subsequently measured at amortised cost using the effective interest method, with gain or losses arising from derecognition or amortisation recognised in profit or loss.

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(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES, ACCOUNTING

ESTIMATES, AND PRIOR PERIOD ERRORS - continued 9. Financial instruments - continued 9.6 Classification and recognition of financial liabilities - continued

9.6.3 Financial guarantee contracts

A financial guarantee contract is a contract by which the guarantor and the lender agree that the guarantor would settle the debts or bear obligations in accordance with terms of the contract in case the borrower fails to settle the debts. Financial guarantee contracts that are not designated as financial liabilities at fair value through profit or loss are initially measured at their fair values less the directly attributable transaction costs. Subsequent to initial recognition, they are measured at the higher of: (i) the amount determined in accordance with “Accounting Standard for Business Enterprises No. 13 – Contingencies”; and (ii) the amount initially recognised less cumulative amortisation recognised in accordance with the principles set out in “Accounting Standard for Business Enterprises No. 14 – Revenue”. 9.7 Derecognition of financial liabilities The Company derecognises a financial liability (or part of it) only when the underlying present obligation (or part of it) is discharged. An agreement between the Company (an existing borrower) and an existing lender to replace the original financial liability with a new financial liability with substantially different terms is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. When the Company derecognises a financial liability or a part of it, it recognises the difference between the carrying amount of the financial liability (or part of the financial liability) derecognised and the consideration paid (including any non-cash assets transferred or new financial liabilities assumed) in profit or loss. 9.8 Offsetting financial assets and financial liabilities Where the Company has a legal right that is currently enforceable to set off the recognised amounts, and intends either to settle on a net basis, or to realise the financial asset and settle the financial liability simultaneously, a financial asset and a financial liability shall be offset and the net amount presented in the balance sheet. Except for the circumstances above, financial assets and financial liabilities shall be presented separately in the balance sheet and shall not be offset. 9.9 Equity instruments An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. The consideration received from issuing equity instruments, net of transaction costs, are added to shareholders' equity. All types of distributions (excluding stock dividends) made by the Company to holders of equity instruments are deducted from shareholders' equity. The Company does not recognise any changes in the fair value of equity instruments.

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ESTIMATES, AND PRIOR PERIOD ERRORS - continued 10. Receivables 10.1 Receivables that are individually significant and for which bad debt provision is individually assessed

Basis or monetary criteria for determining individually significant receivables

Receivables that exceed the amount of RMB 5 million are deemed as individually significant receivables by the Group.

Provision methods for receivables that are individually significant and for which bad debt provision is individually assessed

For receivables that are individually significant, the Company assesses the receivables individually for impairment; for a financial asset that is not impaired individually, the Company includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Receivables for which an impairment loss is individually recognised are not included in a collective assessment of impairment.

10.2 Receivables for which bad debt provision is assessed by portfolio Basis of determining a portfolio

Portfolio 1

Receivables that are significant with the impairment tests performed individually but for which bad debt provision is not assessed. The receivables above mainly include amount due from related parties and amount due from subsidiaries' related parties, amount due from government sectors and amount due from cooperation partner. For the receivables as above, bad debt provision would not be assessed as the probability of the loss of the bad debt is rarely low.

Portfolio 2

The Company classifies receivables into groups of financial assets according to the similarity and relativity of credit risk characteristics. These credit risks usually reflect the debtor's ability to pay the amount due at maturity under contractual terms of related assets and are relate to the estimation of future cash flow of the assessed assets.

Methods of bad debt provision by portfolio

Portfolio 1 No bad debt provision would be provided. Portfolio 2 Percentage of total receivables outstanding

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(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES, ACCOUNTING ESTIMATES, AND PRIOR PERIOD ERRORS - continued 10. Receivables 10.2 Receivables for which bad debt provision is assessed by portfolio - continued 10.2.1 Portfolios that use percentage of total receivables outstanding for bad debt provision

Name of portfolio

Provision proportion for accounts receivable

(%)

Provision proportion for other receivables

(%)

Receivables that use percentage of total receivables outstanding for bad debt provision

5.00 5.00

10.3 Accounts receivable that are not individually significant but for which individual bad debt provision is individually assessed Reasons for making individual bad debt provision

There are large difference between present valueof the future cash flow of receivables and the book value of receivables.

Bad debt provision methods The impairment test is performed individually. If the present value of future cash flow is lower than the book value of receivables, bad debt provision is assessed basis on the difference. Otherwise, bad debt provision is not assessed.

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(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES, ACCOUNTING ESTIMATES, AND PRIOR PERIOD ERRORS – continued

11. Inventories - continued 11.1 Classification of inventories Inventories mainly include properties under construction, completed projects, goods on hand, construction materials and others. Inventories are initially measured at cost. Cost of goods on hand and construction materials comprise purchase, freights, insurances, taxes and other related expenses. Cost of property development comprises land acquisition fees, expenditure on infrastructure development, expenditure on construction and installation, borrowing costs incurred before the completion of construction, and other related expenses. 11.2 Cost measurement of delivered inventories Upon delivery of goods on hand and construction materials, the weighted average method is used to determine the actual cost of inventories. Upon delivery of completed projects, the specific identification method is used to determine the actual cost of inventories. 11.3 Basis for determining net realisable value of inventories and provision methods for decline in value of inventories At the balance sheet date, inventories are measured at the lower of cost and net realisable value. If the cost of inventories is higher than the net realisable value, a provision for decline in value of inventories is made. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion, the estimated costs necessary to make the sale and relevant taxes. Net realisable value is determined on the basis of clear evidence obtained, and takes into consideration the purposes of inventories being held and effect of post balance sheet events. Provision for decline in value of other inventories is made based on the excess of cost of inventory over its net realisable value on an item-by-item basis. After the provision for decline in value of inventories is made, if the circumstances that previously caused inventories to be written down below cost no longer exist so that the net realisable value of inventories is higher than their cost, the original provision for decline in value is reversed and the reversal is included in profit or loss for the period. 11.4 Inventory count system The perpetual inventory system is maintained for stock system.

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ESTIMATES, AND PRIOR PERIOD ERRORS - continued 12. Long-term equity investments 12.1 Determination of investment cost For a long-term equity investment acquired through a business combination involving enterprises under common control, the investment cost of the long-term equity investment is the attributable share of the carrying amount of the shareholders' equity of the acquiree at the date of combination. For a long-term equity investment acquired through business combination not involving enterprises under common control, the investment cost of the long-term equity investment acquired is the cost of acquisition. The long-term equity investment acquired otherwise than through a business combination is initially measured at its cost. 12.2 Subsequent measurement and recognition of profit or loss

12.2.1.A long-term equity investment accounted for using the cost method

For long-term equity investments over which the Company does not exercise joint control or significant influence and those without quoted prices in an active market and the fair values cannot be reliably measured, the Company accounts for such long-term equity investments using the cost method. Besides, long-term equity investments in subsidiaries are accounted for using the cost method in the Company's separate financial statements. A subsidiary is an investee that is controlled by the Group. Under the cost method, a long-term equity investment is measured at initial investment cost. Except for cash dividends or profits already declared but not yet paid that are included in the price or consideration actually paid upon acquisition of the long-term equity investment, investment income is recognised in the period in accordance with the attributable share of cash dividends or profit distributions declared by the investee.

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ESTIMATES, AND PRIOR PERIOD ERRORS - continued 12. Long-term equity investments - continued 12.2 Subsequent measurement and recognition of profit or loss - continued 12.2.2. A long-term equity investment accounted for using the equity method The Company accounts for investment in associates and joint ventures using the equity method. An associate is an entity over which the Company has significant influence and a joint venture is an entity over which the Company exercises joint control along with other investors. Under the equity method, where the initial investment cost of a long-term equity investment exceeds the Group's share of the fair value of the investee's identifiable net assets at the time of acquisition, no adjustment is made to the initial investment cost. Where the initial investment cost is less than the Group's share of the fair value of the investee's identifiable net assets at the time of acquisition, the difference is recognised in profit or loss for the period, and the cost of the long-term equity investment is adjusted accordingly. Under the equity method, the Company recognises its share of the net profit or loss of the investee for the period as investment income or loss for the period. The Company recognises its share of the investee's net profit or loss based on the fair value of the investee's individual separately identifiable assets at the acquisition date after making appropriate adjustments to conform with the Group's accounting policies and accounting period. Unrealised profits or losses resulting from the Group's transactions with its associates and joint ventures are recognised as investment income or loss to the extent that those attributable to the Group's, equity interest are eliminated. However, unrealised losses resulting from the Group's transactions with its associates and joint ventures which represent impairment losses on the transferred assets are not eliminated. Changes in shareholder's equity of the investee other than net profit or loss are correspondingly adjusted to the carrying amount of the long-term equity investment, and recognised as other comprehensive income which is included in the capital reserve. The Company discontinues recognising its share of net losses of the investee after the carrying amount of the long-term equity investment together with any long-term interests that in substance form part of its net investment in the investee are reduced to zero. Except that if the Company has incurred obligations to assume additional losses, a provision is recognized according to the obligation expected, and recorded in the investment loss for the period. Where net profits are subsequently made by the investee, the Company resumes recognising its share of those profits only after its share of the profits exceeds the share of losses previously not recognised.

12.2.3 Disposal of long-term equity investments On disposal of a long term equity investment, the difference between the proceeds actually received and receivable and the carrying amount is recognised in profit or loss for the period. For a long-term equity investment accounted for using the equity method, the amount included in the shareholders' equity and attributable to the percentage interest disposed is transferred to profit or loss for the period.

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ESTIMATES, AND PRIOR PERIOD ERRORS - continued 12. Long-term equity investments - continued 12.3 Basis for determining joint control and significant influence over investee Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. Joint control is the contractually agreed sharing of control over an economic activity, and exists only when the strategic financial and operating policy decisions relating to the activity require the unanimous consent of the parties sharing control. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies. When determining whether an investing enterprise is able to exercise control or significant influence over an investee, the effect of potential voting rights of the investee (for example, warrants and convertible debts) held by the investing enterprises or other parties that are currently exercisable or convertible shall be considered. 12.4 Impairment assessment and provision method for impairment loss The Company reviews the long-term equity investments at each balance sheet date to determine whether there is any indication that they have suffered an impairment loss. If an impairment indication exists, the recoverable amounts are estimated. If such recoverable amount is less than its carrying amount, a provision for impairment losses in respect of the deficit is recognised in profit or loss for the period. Once an impairment loss is recognised for a long-term equity investment, it will not be reversed in any subsequent period. 13. Investment properties Investment property is property held to earn rentals or for capital appreciation or both. It includes a land use right that is leased out; a land use right held for transfer upon capital appreciation; and a building that is leased out. An investment property is measured initially at cost. Subsequent expenditures incurred for such investment property are included in the cost of the investment property if it is probable that economic benefits associated with an investment property will flow to the Company and the subsequent expenditures can be measured reliably, other subsequent expenditures are recognised in profit or loss in the period in which they are incurred. As there is an active property market in the location in which the Company's investment property is situated, and the Company can obtain the market price and other relevant information regarding the same or similar type of property from the property market so as to reasonably estimate the fair value of the investment property; therefore, the Company uses the fair value model for subsequent measurement of the investment property, with changes in the fair value included in profit or loss for the period in which they arise.

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(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES, ACCOUNTING ESTIMATES, AND PRIOR PERIOD ERRORS - continued

13. Investment properties - continued When determining the fair value of the investment property, the current market prices of the same or similar type of property in an active market is considered. If the current market prices of the same or similar type of property in an active market cannot be obtained, the recent trading prices for such properties in an active market as well as factors such as the circumstances at the time of transactions, transaction dates and geographic areas are considered so as to reasonably estimate the fair value of the investment property. Alternatively, the fair value of the investment property is determined based on the expected future rental income and the present value of the relevant cash flows. For an investment property under construction, if the fair value is not reliably determinable but is expected to be reliably determinable when construction is complete, the Company measures that investment property under construction at cost until either its fair value becomes reliably determinable or construction is completed (whichever is earlier). When the Company has sufficient evidence that the purpose of the property has been changed and transfers the investment property carried at fair value to owner-occupied property or inventory, deemed cost of the owner-occupied property or inventory for subsequent accounting is its fair value at the date of change in use, with difference between the fair value of the property at that date and its previous carrying amount recognised in profit or loss for the period in which they arise. For a transfer from inventory to investment property, deemed cost of the investment property for subsequent accounting is its fair value at the date of change in use, with any resulting decrease in the fair value of the property at that date compared to its previous carrying amount recognised in profit or loss for the period in which they arise, or any resulting increase in the fair value at that date compared to its previous carrying amount recognised in shareholders' equity. When an investment property is sold, transferred, retired or damaged, the Company recognises the amount of any proceeds on disposal net of the carrying amount and related taxes in profit or loss for the period. 14. Fixed assets

14.1 Recognition criteria for fixed assets Fixed assets are tangible assets that are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes, and have useful lives of more than one accounting year. A fixed asset is recognised only when it is probable that economic benefits associated with the asset will flow to the Company and the cost of the asset can be measured reliably. Fixed assets are initially measured at cost and the effect of any expected costs of abandoning the asset at the end of its use is considered. Subsequent expenditures incurred for the fixed asset are included in the cost of the fixed asset and if it is probable that economic benefits associated with the asset will flow to the Company and the subsequent expenditures can be measured reliably. Meanwhile the carrying amount of the replaced part is derecognised. Other subsequent expenditures are recognised in profit or loss in the period in which they are incurred.

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(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES, ACCOUNTING ESTIMATES, AND PRIOR PERIOD ERRORS - continued

14. Fixed assets - continued 14.2 Depreciation of each category of fixed assets A fixed asset is depreciated over its useful life using the straight-line method since the month subsequent to the one in which it is ready for intended use. The useful life, estimated net residual value rate and annual depreciation rate of each category of fixed assets are as follows:

Classes Useful lives

(Years)

Estimated net residual

values rates (%)

Annual depreciation

rates (%) House and buildings 20 5 4.75 Electronic equipment, furniture and fixtures 3 5 31.67 Motor vehicles 4 5 23.75 Other equipments 5 5 19

Estimated net residual value of a fixed asset is the estimated amount that the Company would currently obtain from disposal of the asset, after deducting the estimated costs of disposal, if the asset were already of the age and in the condition expected at the end of its useful life. 14.3 The method of impairment test and provision for impairment losses of fixed assets

The Company assesses at the balance sheet date whether there is any indication that the fixed assets may be impaired. If there is any indication that such assets may be impaired, recoverable amounts are estimated for such assets. Recoverable amount is estimated on individual basis. If it is not practical to estimate the recoverable amount of an individual asset, the recoverable amount of the asset group to which the asset belongs will be estimated. If the recoverable amount of an asset or an asset group is less than its carrying amount, the deficit is accounted for as an impairment loss and is recognised in profit or loss.

Once the impairment loss of such assets is recognised, it is not be reversed in any subsequent period. 14.4 Other explanations

The Company reviews the useful life and estimated net residual value of a fixed asset and the depreciation method applied at least once at each financial year-end, and account for any change as a change in an accounting estimate.

If a fixed asset is upon disposal or no future economic benefits are expected to be generated from its use or disposal, the fixed asset is derecognised. When a fixed asset is sold, transferred, retired or damaged, the amount of any proceeds on disposal of the asset net of the carrying amount and related taxes is recognised in profit or loss for the period.

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(II) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES, ACCOUNTING ESTIMATES, AND PRIOR PERIOD ERRORS - continued 15. Construction in progress Construction in progress is measured at its actual costs. The actual costs include various construction expenditures during the construction period, borrowing costs capitalised before it is ready for intended use and other relevant costs. Construction in progress is not depreciated. Construction in progress is transferred to a fixed asset when it is ready for intended use. The Company assesses at the balance sheet date whether there is any indication that construction in progress may be impaired. If there is any indication that such assets may be impaired, recoverable amounts are estimated for such assets. Recoverable amount is estimated on individual basis. If it is not practical to estimate the recoverable amount of an individual asset, the recoverable amount of the asset group to which the asset belongs will be estimated. If the recoverable amount of an asset or an asset group is less than its carrying amount, the deficit is accounted for as an impairment loss and is recognised in profit or loss. Once the impairment loss of construction in progress is recognised, it is not be reversed in any subsequent period. 16. Borrowing costs Borrowing costs directly attributable to the acquisition, construction or production of qualifying asset are capitalised when expenditures for such asset and borrowing costs are incurred and activities relating to the acquisition, construction or production of the asset that are necessary to prepare the asset for its intended use or sale have commenced. Capitalisation of borrowing costs ceases when the qualifying asset being acquired, constructed or produced becomes ready for its intended use or sale. Capitalisation of borrowing costs is suspended during periods in which the acquisition, construction or production of a qualifying asset is interrupted abnormally and when the interruption is for a continuous period of more than three months. Capitalisation is suspended until the acquisition, construction or production of the asset is resumed. Other borrowing costs are recognised as an expense in the period in which they are incurred.

Where funds are borrowed under a specific-purpose borrowing, the amount of interest to be capitalised is the actual interest expense incurred on that borrowing for the period less any bank interest earned from depositing the borrowed funds before being used on the asset or any investment income on the temporary investment of those funds. Where funds are borrowed under general-purpose borrowings, the Company determines the amount of interest to be capitalised on such borrowings by applying a capitalisation rate to the weighted average of the excess of cumulative expenditures on the asset over the amounts of specific-purpose borrowings. The capitalisation rate is the weighted average of the interest rates applicable to the general-purpose borrowings. During the capitalization period, exchange differences related to a specific-purpose borrowing denominated in foreign currency are all capitalised. Exchange differences in connection with general-purpose borrowings are recognised in profit or loss in the period in which they are incurred.

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ESTIMATES, AND PRIOR PERIOD ERRORS - continued 17. Intangible assets

17.1 Intangible assets Intangible assets include land use rights, patents, etc. An intangible asset is measured initially at cost. When an intangible asset with a finite useful life is available for use, its original cost less net residual value and any accumulated impairment losses is amortised over its estimated useful life using the straight-line method. An intangible asset with an indefinite useful life is not amortised.

For an intangible asset with a finite useful life, the Company reviews the useful life and amortisation method at the end of the period, and makes adjustments when necessary. 17.2 Research and development expenditure Expenditure during the research phase is recognised as an expense in the period in which it is incurred. Expenditure during the development phase that meets all of the following conditions at the same time is recognised as intangible asset. Expenditure during development phase that does not meet the following conditions is recognised in profit or loss for the period.

(1) it is technically feasible to complete the intangible asset so that it will be available for use or

sale; (2) the Company has the intention to complete the intangible asset and use or sell it; (3) the Company can demonstrate the ways in which the intangible asset will generate economic

benefits, including the evidence of the existence of a market for the output of the intangible asset or the intangible asset itself or, if it is to be used internally, the usefulness of the intangible asset;

(4) the availability of adequate technical, financial and other resources to complete the development and the ability to use or sell the intangible asset; and

(5) the expenditure attributable to the intangible asset during its development phase can be reliably measured.

If the expenditures cannot be distinguished between the research phase and development phase, the Company recognises all of them in profit or loss for the period.

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ESTIMATES, AND PRIOR PERIOD ERRORS - continued 17. Intangible assets - continued 17.3 The method of impairment test and provision for impairment losses of intangible assets The Company assesses at the balance sheet date whether there is any indication that the intangible assets with a finite useful life may be impaired. If there is any indication that such assets may be impaired, recoverable amounts are estimated for such assets. Recoverable amount is estimated on individual basis. If it is not practical to estimate the recoverable amount of an individual asset, the recoverable amount of the asset group to which the asset belongs will be estimated. If the recoverable amount of an asset or an asset group is less than its carrying amount, the deficit is accounted for as an impairment loss and is recognised in profit or loss. Intangible assets with indefinite useful life and intangible assets not yet available for use are tested for impairment annually, irrespective of whether there is any indication that the assets may be impaired. Once the impairment loss of such asset is recognised, it is not be reversed in any subsequent period. 18. Long-term prepaid expenses Long-term prepaid expenses represent expenses incurred that should be borne and amortised over the current and subsequent periods (together of more than one year). Long-term prepaid expenses are amortised using the straight-line method over the expected periods in which benefits are derived.

19. Estimated liabilities

An obligation related to a contingency is recognized as a provision when all of the following conditions are satisfied: (1) the obligation is a present obligation of the Group; (2) it is probable that an outflow of economic benefits will be required to settle the obligation; and (3) the amount of the obligation can be measured reliably.

At the balance sheet date, a provision is measured at the best estimate of the expenditure required to settle the related present obligation, taking into account the factors pertaining to a contingency such as the risks, uncertainties and time value of money.

Where all or some of the expenditure required to be settled a provision is expected to be reimbursed by a third party, the reimbursement is recognized as a separate asset only when it is virtually certain that reimbursement will be received. The amount recognized for the reimbursement does not exceed the carrying amount of the provision.

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ESTIMATES, AND PRIOR PERIOD ERRORS - continued 20. Share-based payments and equity instruments

20.1. Classification of share-based payments A share-based payment is a transaction in which the Company grants equity instruments, or incurs liabilities for amounts that are determined based on the price of equity instruments, in return for services rendered by employees or other parties. The Group's share-based payments include equity-settled share-based payments and cash-settled share-based payments. Equity-settled share-based payments Equity-settled share-based payments in exchange for services rendered by employees are measured at the fair value of the equity instruments granted to employees at the grant date. Such amount is recognised as related costs or expenses on a straight-line basis, based on the best estimate of the number of equity instruments expected to vest/ as related costs or expenses at the grant date, if the equity instruments vest immediately, with a corresponding increase in capital reserve. At each balance sheet date during the vesting period, the Company makes the best estimate according to the subsequent latest information of change in the number of employees who are granted with options that may vest, etc. and revises the number of equity instruments expected to vest. The effect of the above estimate is recognised as related costs or expenses, with a corresponding adjustment to capital reserve. For equity-settled share-based payments in exchange for services rendered by other parties, if the fair value of services from other parties can be measured reliably, they are measured at the fair value of services from other parties at the date when such services are received. If the fair value of services from other parties cannot be measured reliably but the fair value of the equity instruments can be measured reliably, they are measured at the fair value of the equity instruments at the date when such services are received. The fair value of the equity instruments are recognised as related costs or expenses, with a corresponding increase in capital reserve. Cash-settled share-based payments Cash-settled share-based payments are measured at the fair value of the liabilities incurred by the Group, which are determined based on the price of the share or other equity instruments. If the rights under a cash-settled share-based payment vest immediately, the Company recognises related costs or expenses on grant date, with a corresponding increase in liability, at an amount equal to the fair value of the liability based on the best estimate of the outcome of vesting at each balance sheet date within the vesting period. Until the liability is settled, the Company remeasures the fair value of the liability at each balance sheet date and at the date of settlement, with any changes in fair value recognised in profit or loss for the period.

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ESTIMATES, AND PRIOR PERIOD ERRORS - continued

20. Share-based payments and equity instruments - continued

20.2. The method of determining the fair value of equity instruments The value of share options granted by the Company is estimated by applying Black-Scholes option pricing model. Details please refer to note (VIII). 20.3. Accounting treatment related to implementation, modification and termination of share-based payments

In case the Company modifies a share-based payment arrangement, if the modification increases the fair value of the equity instruments granted, the Company will include the incremental fair value of the equity instruments granted in the measurement of the amount recognised for services received. If the modification increases the number of the equity instruments granted, the Company will include the fair value of additional equity instruments granted in the measurement of the amount recognised for services received. The increase in the fair value of the equity instruments granted is the difference between fair value of the equity instruments before and after the modification on the date of the modification. If the Company modifies the terms or conditions of the share-based payment arrangement in a manner that reduces the total fair value of the share-based payment arrangement, or is not otherwise beneficial to the employee, the Company will continue to account for the services received as if that modification had not occurred other than a cancellation of some or all the equity instruments granted.

If cancellation of the equity instruments granted occurs during the vesting period, the Company will account for the cancellation of the equity instruments granted as an acceleration of vesting, and recognise immediately the amount that otherwise would have been recognised over the remainder of the vesting period in profit or loss for the period, with a corresponding recognition in capital reserve. When the employee or counterparty can choose whether to meet the non-vesting condition but the condition is not met during the vesting period, the Company treats it as a cancellation of the equity instruments granted.

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ESTIMATES, AND PRIOR PERIOD ERRORS - continued 21. Revenue 21.1 Revenue from sale of goods Revenue from sale of goods is recognised when (1) the enterprise has transferred to the buyer the significant risks and rewards of ownership of the goods; (2) the enterprise retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold; (3) the amount of revenue can be measured reliably; (4) it is probable that the associated economic benefits will flow to the enterprise; and (5) the associated costs incurred or to be incurred can be measured reliably. Revenue from sales of property is recognized when all the following conditions are successfully satisfied: 1) sales contact is entered into between the buyer and the Company and filed with Land and Resources Bureau; 2) development of property is completed and arrives at the condition for its intended use, and successfully passes the examination by the relevant authorities with the relevant registration procedures well finished; and 3) the buyer makes payment for the property subject to the terms in sales contract and obtains the occupation permit. In another word, revenue from sales is recognized when the Company receives or obtains the right to receive the full amount of property sold, and all the relevant economic benefit can flow to the Company. 21.2 Revenue from rendering of services Revenue from rendering of services is recognised when (1) the amount of revenue can be measured reliably; (2) it is probable that the associated economic benefits will flow to the enterprise; (3) the stage of completion of the transaction can be determined reliably; and (4) the associated costs incurred or to be incurred can be measured reliably. Revenue from rendering of services is recognised using the percentage of completion method at the balance sheet date. The stage of completion of a transaction is determined based on services performed to date as a percentage of total services to be performed. When the outcome of the transaction involving the rendering of services cannot be estimated reliably, revenue is recognised only to the extent of the costs incurred that will be recoverable, and the costs incurred are recognised as expenses for the period. When it is not probable that the costs incurred will be recovered, revenue is not recognised. 21.3 Revenue from construction contract

Where the outcome of a construction contract can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the contract activity at the end of the reporting period, measured based on the proportion that contract costs incurred for work performed to date relative to the estimated total contract costs, except where this would not be representative of the stage of completion. Variations in contract work, claims and incentive payments are included to the extent that the amount can be measured reliably and its receipt is considered probable. Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred that it is probable will be recoverable. Contract costs are recognised as expenses in the period in which they are incurred. When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognized as an expense immediately.

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ESTIMATES, AND PRIOR PERIOD ERRORS - continued 21. Revenue - continued 21.3 Revenue from construction contract - continued Where contract costs incurred to date plus recognised profits less recognised losses exceed progress billings, the surplus is shown as amounts due from customers for contract work. For contracts where progress billings exceed contract costs incurred to date plus recognised profits less recognised losses, the surplus is shown as amounts due to customers for contract work. Amounts received before the related work is performed are included in the consolidated statement of financial position, as a liability, as advances received. Amounts billed for work performed but not yet paid by the customer are included in the consolidated statement of financial position under trade and other receivables. 21.4 Revenue arising from lease Rental income from lessee per contract or agreement is recognized as operating income on a straight-line basis over the lease term. 21.5 Income from royalties The amount of income from royalties is recognised according to the relevant contract or agreement on an accrual basis. 21.6 Interest income The amount of interest income is determined according to the length of time for which the Company's monetary funds are used by others and the effective interest rate. 22. Government grants Government grants are the transfer of monetary assets or non-monetary assets from the Government to the Company at no consideration, excluding capital contribution from the Government as an owner of the Company to the Company. Government grants are classified into government grants related to assets and government grants related to income. If a government grant is in the form of a transfer of a monetary asset, the item is measured at the amount received or receivable. If a government grant is in the form of a transfer of a non- monetary asset, the item is measured at fair value. If fair value is not reliably determinable, the item is measured at a nominal amount. A government grant measured at a nominal amount is recognised immediately in profit or loss for the current period. A government grant related to an asset is recognised as deferred income, and evenly amortised to profit or loss over the useful life of the related asset.

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ESTIMATES, AND PRIOR PERIOD ERRORS - continued 22. Government grants - continued For a government grant related to income, if the grant is a compensation for related expenses or losses to be incurred in subsequent periods, the grant is recognised as deferred income, and recognised in profit or loss over the periods in which the related costs are recognised; if the grant is a compensation for related expenses or losses already incurred, the grant is recognised immediately in profit or loss for the current period. For the repayment of a government grant already recognised, if there is any related deferred income, the repayment is offset against the carrying amount of the deferred income, and any excess is recognised in profit or loss for the current period; if there is no related deferred income, the repayment is recognised immediately in profit or loss for the current period. 23. Income tax expenses The income tax expenses include current income tax and deferred income tax. 23.1. Current Income Tax At the balance sheet date, current income tax liabilities (or assets) for the current and prior periods are measured at the amount expected to be paid (or recovered) according to the requirements of tax laws. 23.2. Deferred tax assets and deferred tax liabilities For temporary differences between the carrying amounts of certain assets or liabilities and their tax base, or between the nil carrying amount of those items that are not recognised as assets or liabilities and their tax base that can be determined according to tax laws, deferred tax assets and liabilities are recognised using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets for deductible temporary differences are recognised to the extent that it is probable that taxable profits will be available against which the deductible temporary differences can be utilised. However, for temporary differences associated with the initial recognition of goodwill and the initial recognition of an asset or liability arising from a transaction (not a business combination) that affects neither the accounting profit nor taxable profits or deductible losses at the time of transaction, no deferred tax asset or liability is recognised. For deductible losses and tax credits that can be carried forward, deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which the deductible losses and tax credits can be utilised.

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ESTIMATES, AND PRIOR PERIOD ERRORS - continued 23. Income tax expenses - continued 23.2. Deferred tax assets and deferred tax liabilities - continued Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, except where the Company is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognised to the extent that it is probable that there will be taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future. At the balance sheet date, deferred tax assets and liabilities are measured at the tax rates, according to tax laws, that are expected to apply in the period in which the asset is realised or the liability is settled. Current and deferred tax expenses or income are recognised in profit or loss for the period, except when they arise from transactions or events that are directly recognised in other comprehensive income or in equity, in which case they are recognised in other comprehensive income or in equity, and when they arise from business combinations, in which case they adjust the carrying amount of goodwill. At the balance sheet date, the carrying amount of deferred tax assets is reviewed and reduced if it is no longer probable that sufficient taxable profits will be available in the future to allow the benefit of deferred tax assets to be utilised. Any such reduction in amount is reversed when it becomes probable that sufficient taxable profits will be available. When the Company has a legal right to settle on a net basis and intends either to settle on a net basis or to realise the assets and settle the liabilities simultaneously, current tax assets and current tax liabilities are offset and presented on a net basis. When the Company has a legal right to settle current tax assets and liabilities on a net basis, and deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current tax assets and liabilities on a net basis or to realise the assets and liabilities simultaneously, in each future period in which significant amounts of deferred tax assets or liabilities are expected to be reversed, deferred tax assets and deferred tax liabilities are offset and presented on a net basis.

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24. Operating leases and finance leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases. 24.1. The Company as lessee under operating leases Operating lease payments are recognised on a straight-line basis over the term of the relevant lease, and are either included in the cost of related asset or charged to profit or loss for the period. Initial direct costs incurred are charged to profit or loss for the period. Contingent rents are charged to profit or loss in the period in which they are actually incurred. 24.2. The Company as lessor under operating leases Rental income from operating leases is recognised in profit or loss on a straight-line basis over the term of the relevant lease. Initial direct costs with more than an insignificant amount are capitalised when incurred, and are recognised in profit or loss on the same basis as rental income over the lease term. Other initial direct costs with an insignificant amount are charged in profit or loss in the period in which they are incurred. Contingent rents are charged to profit or loss in the period in which they actually arise. 25. Non-current assets held for sale Non-current assets including fixed assets, intangible assets, long-term equity investments, etc. ,but excluding deferred tax asset, that the Company has determined to dispose of those assets and has entered into an irrevocable transfer agreement with the transferee and it is highly probable that the transfer will be completed within one year, are accounted for as non-current assets held for sale. They are not depreciated or amortised, and are measured at the lower of carrying amount and fair value less costs to sell. If an asset or a disposal group has been classified as held for sale but the criteria for classification as held for sale are no longer met, the Company shall cease to classify the asset or disposal group as held for sale. It shall be measured at the lower of (1) the carrying amount before the asset or disposal group was classified as held for sale, adjusted for any depreciation, amortisation or impairment that would have been recognised had the asset or disposal group not been classified as held for sale; and (2) the recoverable amount at the date of the decision not to sell.

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26. Changes in significant accounting policies The Company changed the accounting policy for subsequent measurement of investment property from cost model to fair value model, effective from 1 December 2013. The Company has accounted for the above change in accounting policy retrospectively and restated the financial statements for the comparable period. The impacts of the above change in accounting policy on operating results for the six months ended 30 June 2013 are as bolow: operating costs decreased by RMB 39,735,337.77, investment income decreased by RMB14,634,471.45 and net profit attributable to owners of the Company increased by RMB11,566,696.60. 27. Other significant accounting policies, accounting estimates, and preparation of financial statements 27.1 Employee benefits In an accounting period in which an employee has rendered service to the Group, the Company recognises the employee benefits for that service as a liability, except for compensation for termination of employment relationship with the employees. The Company participates in the employee social security systems, such as basic pensions, medical insurance, housing funds and other social securities established by the government in accordance with relevant requirements. The related expenditures are either included in cost of related assets or charged to profit or loss for the period when they occur. When the Company terminates the employment relationship with employees before the expiry of the employment contracts or provides compensation as an offer to encourage employees to accept voluntary redundancy, if the Company has a formal plan for termination of employment relationship or has made an offer for voluntary redundancy which will be implemented immediately, and the Company cannot unilaterally withdraw from the termination plan or the redundancy offer, a provision for the compensation payable arising from the termination of employment relationship with employees is recognised with a corresponding charge to the profit or loss for the period. 27.2 Maintenance Fund For properties located in Shenzhen, the company complies with the Rules on Administration of Specific Public Facilities Fund of Residence of Shenzhen. For properties in the locations other than Shenzhen, the company follows the respective local regulations.

GEMDALE CORPORATION


44

(III) BASIS OF DETERMINING SIGNIFICANT ACCOUNTING POLICIES AND KEY ASSUMPTIONS AND UNCERTAINTIES IN ACCOUNTING ESTIMATES In the application of the Company's accounting policies, which are described in note 2, the Company is required to make judgments, estimates and assumptions about the carrying amounts of items in the financial statements that cannot be measured accurately, due to the internal uncertainty of the operating activities. These judgments, estimates and assumptions are based on historical experiences of the Company's management as well as other factors that are considered to be relevant. Actual results may differ from these estimates. The aforementioned judgments, estimates and assumptions are reviewed regularly on a going concern basis. The effect of a change in accounting estimate is recognised in the period of the change, if the change affects that period only; or recognised in the period of the change and future periods, if the change affects both. The following are the key assumptions and uncertainties in accounting estimates at the balance sheet date, which have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities in future periods. The Company records inventories as lower of cost and net realisable value. Net realisable value of inventory is amount calculated as estimated selling price of ordinary activities, minus estimated cost to happen until work completed, estimated selling expenses and related taxes. The Company will increase provision for decline in value of inventories if the management revises any of the estimated selling price, cost to happen until work completed, estimated selling expenses or related taxes, and (1) the revised estimated selling price is less than current adopted estimated selling price, or (2) the revised estimated cost to happen until work completed, estimated selling expenses and related taxes is larger than current adopted estimated amount. On the contrary, the Company will reverse provision for increase in value of inventories if the management revises any of the estimated selling price, cost to happen until work completed, estimated selling expenses or related taxes, and (1) the revised estimated selling price is higher than current adopted estimated selling price, or (2) the revised estimated cost to happen until work completed, estimated selling expenses and related taxes is less than current adopted estimated amount. If the actual selling price, estimated cost to happen until work completed, estimated selling expenses and related taxes is larger or less than the management's estimation, the Company recognises relevant influences in corresponding accounting period.

GEMDALE CORPORATION


45

(IV) TAXATION

Major taxes and tax rates Tax Basis of taxation Tax rate Enterprise Income Tax Taxable income (Note 1)

Business Tax

Revenue from rendering of services, transfer of intangible assets or sales of properties

5% or 3%

Urban construction and maintenance tax

Business tax and value added tax ("VAT") paid

Paid according to the Company location policy

Education surcharge Business tax and VAT paid Paid according to the Company location policy

Land appreciation tax Increase in value of property sold (Note 2)

Base on progressive tax rate 30%-60% in accordance with the land appreciation percentage

Property tax

70%-90% of original cost of property or property lease income (property residual value); property lease income

1.2% for those calculated on the basis of property residual value; 12% for those calculated on the basis of property lease income

Town land usage tax Acreage of land actually occupied

(Note 3)

Note 1: The applicable income tax rate to the Company and its major subsidiaries is 25%. Note 2: The Company and its subsidiaries prepay the land appreciation tax at the rate stipulated

by local tax authorities. Based on relevant regulations, the land appreciation tax is filed based on actual appreciation in value and the applicable tax rate, any overpayment or underpayment will be refunded or paid after the tax filling.

Note 3: The Company and its subsidiaries pay the town land usage tax based on the applicable

taxable amount following the pre-set standards by local governments.

GEMDALE CORPORATION NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2014

46

(V) SCOPE OF CONSOLIDATED FINANCIAL STATEMENTS

1. SUBSIDIARIES

(1) Subsidiaries established or acquired through investment by the Company

Name of subsidiary Type of company

Place of incorporati

on Nature of business

Registered capital (0'000) Business Scope

The Company's actual

investment at period end

(0'000)

Other balances

essentially constitute

investments

% of ownership

held by the

Company

% of voting power held

by the Company

Within the

consolidation scope (Yes/No)

Minority Interests

(RMB0'000)

Minority Interests

amount used for deducting

profit attributable to Minority

Interests (RMB0'000)

Beijing Gemdale Xingye Property Co., Ltd.

Limited company Beijing Real estate development

RMB18,000.00Real estate development and operation

RMB18,000.00 - 100 100 Yes - -

Beijing Gemdale Yuanjing Real Estate Development Co., Ltd.



RMB12,000.00 - 100 100 Yes - -

Beijing Gemdale Hongye Real Estate Development Co., Ltd.



RMB3,500.00 - 70 70 Yes 5,292.14 -

Beijing Gemdale Weisheng Real Estate Development Co., Ltd.



RMB2,000.00 - 100 100 Yes - -

Beijing Gemdale Hongyun Real Estate Development Co., Ltd.



RMB10,500.00 - 70 70 Yes 119,894.42 -

Beijing Gemdale Rongqiao Real Estate Development Co., Ltd.



RMB5,000.00 - 100 100 Yes - -

Beijing Gemdale Huida Real Estate Development Co., Ltd.



RMB50,000.00 - 100 100 Yes - -

Zhongxiweiye (Beijing) Investment Co., Ltd.


RMB 1,000.00Real estate development and operation

RMB 600.00 - 60 60 Yes -536.95 936.95

BJ Gemdale Green Property Management Co., Ltd.

Limited company Beijing Property management

RMB500.00 Property management RMB500.00 - 100 100 Yes - -

Guangzhou Dongling Real Estate Development Co., Ltd.

Limited company Guangzhou Real estate development


RMB50,400.00 - 80 80 Yes 20,451.28 -

Guangzhou Green Real Estate Development Co., Ltd.

Limited company Guangzhou Real estate development

RMB 1,000.00Real estate development and operation

RMB 1,000.00 - 100 100 Yes - -


47

(V) SCOPE OF CONSOLIDATED FINANCIAL STATEMENTS - continued

1. SUBSIDIARIES - continued

(1) Subsidiaries established or acquired through investment by the Company - continued





The Company's actual investment

at period end (0'000)

Other balances


investments

% of ownership

held by the

Company


by the Company

Within the


Minority Interests

(RMB0'000)

Minority Interests




Shanghai Nanxiang Garden Real Estate Development Co., Ltd.

Limited company Shanghai Real estate development


RMB1,620.00 - 90 90 Yes 13.54 166.46

Gemdale Corporation Shanghai Real Estate Development Co., Ltd.



RMB5,000.00 - 100 100 Yes - -

Shanghai Shenjin Real Estate Development Co., Ltd.



RMB7,500.00 - 75 75 Yes 2,947.27 -

Shanghai Green Fengfan Real Estate Development Co., Ltd.



RMB14,000.00 - 70 70 Yes 67,890.21 -

Shanghai Shenxiang Real Estate Development Co., Ltd.



RMB2,000.00 - 100 100 Yes - -

Shanghai Jingjiu Real Estate Development Co., Ltd.



RMB1,000.00 - 100 100 Yes - -

Shanghai Jinheng Real Estate Development Co., Ltd.



RMB163,265.00 - 100 100 Yes - -

Shanghai Jinshen Real Estate Development Co., Ltd.



RMB1,000.00 - 100 100 Yes - -

Shanghai Gemdale Baoshan Real Estate Development Co., Ltd.



RMB2,000.00 - 100 100 Yes - -

Shanghai Gemdale Hangjin Real Estate Development Co., Ltd.



RMB147,500.00 - 100 100 Yes - -

Gemdale (Corporation) Tianjin Real Estate Development Co., Ltd.

Limited company Tianjin Real estate development


RMB20,000.00 - 100 100 Yes - -

Gemdale (Corporation) Tianjin Investment Co., Ltd.

Limited company Tianjin Real estate development


RMB60,000.00 - 100 100 Yes - -


48




Name of subsidiary Type of

company Place of

incorporationNature of business




(0'000)

Other balances


investments

% of ownership

held by the

Company


by the Company

Within the consolidation scope (Yes/No)

Minority Interests

(RMB0'000)

Minority Interests




Tianjin Tuanbohu Development Co., Ltd.

Limited company

Tianjin Real estate development


RMB9,730.00 - 70 70 Yes 1,967.75 2,202.25

Tianjin Gemdale Shengjing Real Estate Development Co., Ltd.

Limited company

Tianjin Real estate development

RMB5,000,00Real estate development and operation

RMB5,000.00 - 100 100 Yes - -

Wensheng (Tianjing) Investment Management Co., Ltd.

Limited company

Tianjin Investment USD 350.00 Investment USD 350.00 - 100 100 Yes - -

Shenyang Gemdale Changqing Property Development Co., Ltd.

Limited company

Shenyang Real estate development

USD 19,997.00Real estate development and operation

USD 19,997.00 - 100 100 Yes - -

Gemdale Corporation (Shenyang) Property Co., Ltd.

Limited company


USD 3,770.00 Real estate development and operation

USD 3,770.00 - 100 100 Yes - -

Shenyang Gemdale Hongye Real Estate Development Co., Ltd.

Limited company



USD 2,100.00 - 100 100 Yes - -

Shenyang Gemdale Shicheng Real Estate Development Co., Ltd.

Limited company



USD 3,700.00 - 100 100 Yes - -

Shenyang Gemdale Quansheng Real Estate Development Co., Ltd.

Limited company



USD 10,900.00 - 100 100 Yes - -

Shenyang Rongyao Real Estate Development Co., Ltd.

Limited company



USD 10,000.00 - 100 100 Yes 3,059.86 -

Shenyang Gemdale Yijing Property Co., Ltd.

Limited company


RMB1,000.00 Real estate development and operation

RMB510.00 - 51 51 Yes 478.47 11.53


49








The Company's actual investment

at period end (0'000)

Other balances

essentially constitute investment

s

% of ownership

held by the

Company


by the Company

Within the


Minority Interests

(RMB0'000)

Minority Interests




Gemdale Corporation Nanjing Property Co., Ltd.

Limited company Nanjing Real estate development


RMB7,000.00 - 100 100 Yes - -

Gemdale Corporation Nanjing Real Estate Development Co., Ltd.



RMB2,000.00 - 100 100 Yes - -

Gemdale Corporation Nanjing Jinjiu Real Estate Development Co., Ltd.



RMB30,000.00 - 100 100 Yes - -

Gemdale Corporation Wuhan Real Estate Development Co., Ltd.

Limited company Wuhan Real estate development


RMB42,000.00 - 100 100 Yes - -

Wuhan Gemdale Weisheng Real Estate Development Co., Ltd.



RMB73,469.39 - 100 100 Yes - -

Wuhan Guanggu Agricultural Development Co., Ltd.



RMB5,400.00 - 75 75 Yes 8,799.66 -

Wuhan Gemdale Famous Real Estate Development Co., Ltd.



RMB2,000.00 - 100 100 Yes - -

Wuhan Gemdale Huigu Real Estate Co., Ltd.



RMB40,000.00 - 100 100 Yes - -

Wuhan Gemdale Puying Property Co., Ltd.



RMB56,900.00 - 100 100 Yes (986.20) -

Wuhan Gemdale Aochu Real Estate Development Co., Ltd.



RMB29,070.00 - 51 51 Yes 27,923.16 6.84


50










(0'000)

Other balances


investments

% of ownership

held by the

Company


by the Company


Minority Interests

(RMB0'000)

Minority Interests




Xi'an Gemdale Property Investment Co., Ltd.

Limited company Xi'an Real estate development


RMB50,000.00 - 100 100 Yes - -

Shanxi Gemdale Jiahe Property Co., Ltd.



RMB55,300.00 - 70 70 Yes 43,839.00 -

Shaanxi Gemdale Jiayi Real Estate Development Co., Ltd.



RMB60,000.00 - 100 100 Yes - -

Shanxi Hexiang Real Estate Development Co., Ltd.



RMB2,010.00 - 67 67 Yes 490.34 499.66

Henan Gemdale Shixian Real Estate Development Co., Ltd.

Limited company Zhengzhou Real estate development


RMB5,100.00 - 51 51 Yes 4,140.64 759.36

Dalian Rongyao Real Estate Development Co., Ltd.

Limited company Dalian Real estate development


USD 6,000.00 - 100 100 Yes (133.91) -

Dalian Tianyi Real Estate Development Co., Ltd.



USD 8,520.00 - 71 60 (Note 1) Yes 36,538.63 -

Dalian Boan Real Estate Development Co., Ltd.


RMB800.00Real estate development and operation

RMB800.00 - 100 100 Yes - -

Gemdale Corporation Yangzhou Real Estate Development Co., Ltd.

Limited company Yangzhou Real estate development


USD 7,072.18 - 100 100 Yes - -

Gemdale Corporation Yangzhou Property Development Co., Ltd.

Limited company Yangzhou Real estate development

USD 9000.00Real estate development and operation

USD 5,850.00 - 65 65 Yes 18,817.57 535.70

Changzhou Jinkun Real Estate Development Co., Ltd.

Limited company Changzhou Real estate development


RMB100,000.00 - 100 100 Yes - -

Changzhou Jinjiu Real Estate Development Co., Ltd.

Limited company Changzhou Real estate development


RMB100,000.00 - 100 100 Yes - -


51



(1) Subsidiaries established or acquired through investment by the Company – continued







( 0'000)

Other balances


investments

% of ownership

held by the

Company


by the Company


Minority Interests

(RMB0'000)

Minority Interests




Yantai Jinxiangtai Real Estate Development Co., Ltd.

Limited company Yantai Real estate development


RMB10,200.00 - 51 51 Yes 10,397.40 -

Yantai Yijing Real Estate Development Co., Ltd.

Limited company Yantai Real estate development


USD 6,800.00 - 85 85 Yes 7,103.10 399.00

Hangzhou Gemdale Zizaicheng Real Estate Development Co., Ltd.

Limited company Hangzhou Real estate development


RMB10,000.00 - 100 100 Yes - -

Hangzhou Gemdale Xianghu Real Estate Development Co., Ltd.



USD 7,500.00 - 60 60 Yes 27,414.85 6,200.14

Hangzhou Jinmu Real Estate Development Co., Ltd.



RMB15,300.00 - 51 51 Yes 14,123.99 576.01

Hangzhou Jinxiang Real Estate Development Co., Ltd.



USD 5,100.00 - 51 51 Yes 29,553.82 687.66

Ningbo Jinjie Real Estate Development Co., Ltd.

Limited company Ningbo Real estate development


RMB5,000.00 - 100 100 Yes - -

Ningbo Jinxiang Real Estate Development Co., Ltd.

Limited company Ningbo Real estate development


RMB5,000.00 - 100 100 Yes - -

Cixi Jinqi Real Estate Development Co., Ltd.

Limited company Cixi Real estate development


RMB88,599.19 - 100 100 Yes - -

Yuyao Gemdale Real Estate Development Co. Ltd.

Limited company Yuyao Real estate development


RMB13,000.00 - 65 65 Yes 6,248.05 751.95

Cixi Hengyuan Xincheng Real Estate Development Co., Ltd.



RMB4,000.00 - 100 100 Yes - -


52










( 0'000)

Other balances


investments

% of ownership held by

the Company


by the Company


Minority Interests

(RMB0'000)

Minority Interests




Cixi Jinheng Real Estate Development Co., Ltd.



RMB8,500.00 - 50 50 Yes 8,444.09 55.91

Shaoxing Gemdale Shenxing Real Estate Development Co., Ltd.

Limited company Shaoxing Real estate development


RMB30,600.00 - 51 51 Yes 36,772.59 -

Shaoxing Gemdale Guyue Property Investment Co., Ltd.

Limited company Shaoxing Real estate development


RMB6,120.00 - 51 51 Yes 5,794.48 85.52

Gemdale Corporation Jinhua Real Estate Development Co., Ltd.

Limited company Jinhua Real estate development


RMB4,500.00 - 90 90 Yes 404.11 95.89

Hunan Jinlu Real Estate Development Co., Ltd.

Limited company Changsha Real estate development


RMB8,774.31 - 70 70 Yes 3,476.73 283.69

SZ Gemdale Residence Development Co., Ltd.

Limited company Shenzhen Real estate development


RMB3,200.00 - 100 100 Yes - -

Shenzhen Gemdale Property Project Management Co., Ltd.



RMB1,000.00 - 100 100 Yes - -

Shenzhen Gemdale Xincheng Real Estate Development Co., Ltd.



RMB1,000.00 - 100 100 Yes - -

SZ Gemdale Old City Reconstruction Co., Ltd.



RMB2,430.00 - 60 60 Yes 31,988.20 -

Shenzhen Gemdale Beicheng Real Estate Development Co., Ltd.



RMB140,000.00 - 100 100 Yes - -

Shenzhen Gemdale Baocheng Real Estate Development Co., Ltd.



RMB1,000.00 - 100 100 Yes - -


53





Place of incorporatio

n Nature of business

Registered capital ( 0'000) Business Scope



( 0'000)

Other balances


investments

% of ownership held by the Company


by the Company


Minority Interests

(RMB0'000)

Minority Interests




Shenzhen Wensheng Equity Investment Fund Management Co., Ltd.

Limited company Shenzhen Investment RMB500.00 Investment RMB500.00 - 100 100 Yes - -

Gemdale Corporation Zhuhai investment Co., Ltd.

Limited company Zhuhai Real estate development

RMB3,000.00 Real estate development and operation RMB3,000.00 - 100 100 Yes - -

Zhuhai Hejiada Investment Consulting Co., Ltd.


RMB20,000.00 Real estate development and operation RMB10,200.00 - 51 51 Yes 13,026.49 -

Zhuhai Gemdale Real Estate Development Co., Ltd.


RMB5,000.00 Real estate development and operation RMB5,000.00 - 100 100 Yes - -

Zhuhai Mendao Investment Co., Ltd.

Limited company Zhuhai Investment, Real estate development

RMB1,000.00 Investment, Real estate development and operation

RMB1,000.00 - 100 100 Yes - -

Gemdale (Foshan) Real Estate Development Co., Ltd.

Limited company Foshan Real estate development


USD 4,380.00 - 100 100 Yes - -

Foshan Shunde Gemdale Real Estate Development Co., Ltd.



RMB1,000.00 - 100 100 Yes - -

Foshan Nanhai Gemdale Ruijin Real Estate Development Co., Ltd.



RMB1,000.00 - 100 100 Yes - -

Dongguan Gemdale Property Investment Co., Ltd.

Limited company Dongguan Real estate development

RMB9,940.10 Real Estate Development and Operation

RMB9,940.10 - 100 100 Yes - -

Dongguan Gemdale Baodao Property Co., Ltd.


RMB10,000.00 Real Estate Development and Operation

RMB10,000.00 - 100 100 Yes - -


54










( 0'000)

Other balances


investments



by the Company


Minority Interests

(RMB0'000)

Minority Interests




Yunnan Run'an Real Estate Development Co., Ltd.

Limited company Yunan Real estate development

RMB1,000.00Real Estate Development and Operation

RMB700.00 - 70 70 Yes 37.30 262.70

Famous Business Ltd. Limited company Hong Kong Investment HKD 100.00USD 990.00

Investment HKD 100.00USD 990.00

- 100 100 Yes - -

Gemdale (Asia) Holding Ltd.

Limited company Hong Kong Investment USD 1,000.00 Investment USD 1,000.00 - 100 100 Yes - -

SZ Gemdale Property Management Co., Ltd.

Limited company Shenzhen Property management

RMB5,000.00 Property management RMB5,000.00 - 100 100 Yes - -

Gemdale (Asia) Investment Ltd.

Limited company Hong Kong Investment USD 1,000.00 Investment USD 1,000.00 - 100 100 Yes - -




RMB1,000.00 - 100 100 Yes - -


Limited company Suzhou Real estate development


RMB2,000.00 - 100 100 Yes - -

Foshan Gemdale Xinhua Investment Co., Ltd.

Limited company Foshan Investment RMB 70,000.00 Investment RMB 45,150.00 - 64.50 64.50 Yes 24,839.11 -

Beiijng Gemdale Huiyuan Real Estate Development Co., Ltd.



RMB10,000.00 - 100 100 Yes - -

Shenzhen Zhuanmei International Investment and Development Co., Ltd.

Limited company Shenzhen Investment RMB60,760.00 Investment RMB60,760.00 - 100 100 Yes - -

Zhuhai Zhushengyuan Real Estate Development Co., Ltd.



RMB25,000.00 - 50 50 Yes 25,003.23 -


55


1. SUBSIDIARIES - continued (2) Subsidiaries acquired throuth business combinations not involving enterprises under common control







( 0'000)

Other balances


investments



by the Company


Minority Interests

(RMB0'000)

Minority Interests




Dongguan New Century Runcheng Industry Investment Co., Ltd.



RMB1,173.00 - 51 51 Yes 2,138.72 -

Wuhan Ao'qiang Real Estate Development Co., Ltd.



RMB21,000.00 - 100 100 Yes - -

Gemdale Properties and Investment Corporation Limited

Limited company Bermuda Investment HKD 90,931.01 Investment HKD 65,652.89 - 72.20 72.20 Yes 270,538.06 -

Note 1: According to the Cooperation Framework Agreement, a subsidiary of the Company was entitled to 60% of voting right in Dalian Tianyi Real Estate Development Co., Ltd.,


56


2. SUBSIDIARIES NEWLY INCLUDED IN AND EXCLUDED FROM THE SCOPE OF CONSOLIDATION FOR THE CURRENT REPORTING PERIOD (1) Subsidiaries newly included in the scope of consolidation for the current period

Unit: RMB

Name of the subsidiary Net Assets

at June 30, 2014 Net Profit /(Loss)

for the current periodSubsidiaries newly established Gemdale (Asia) Investment Co., Ltd. 56,752,139.82 (4,783,233.82)Foshan Nanhai Gemdale Real Estate Development Co., Ltd.

7,760,495.01 (2,239,504.99)


18,701,324.98 (1,298,675.02)

Foshan Gemdale Xinhua Investment Co., Ltd. 699,693,373.23 (306,626.77)Shaoxing Zezhong Investment Management Co., Ltd.

94,588.60 (5,411.40)

Beiijng Gemdale Huiyuan Real Estate Development Co., Ltd.

99,786,135.10 (213,864.90)

Shenzhen Zhuanmei International Investment and Development Co., Ltd.

607,552,530.39 (47,469.61)

Shenyang Hesheng Real Estate Development Co., Ltd.

- -

Jiaxing Wenjia No.1 Equity Investment Ltd. (Limited Partnership)

203,075,700.00 -


- -

Dalian Vision Investment Consultancy Co., Ltd. 98,483.88 (1,516.12)Beijing Gemdale Chuangshi Consultancy Co., Ltd.

99,155.07 (844.93)

Hangzhou Rehuo Consultancy Co., Ltd. 98,757.37 (1,242.63)Ningbo Yinzhou Xieyuan Real Estate Investment Consultancy Co., Ltd.

125,976.30 -

Shenzhen Yuanwei Investment Co., Ltd. - -Shenzhen Jinsaiwei Investment Co., Ltd. - -Shenzhen Xinwei Investment Co., Ltd. - -Tianjin Shangzhi Real Estate Information Consultancy Co., Ltd.

- -

Gemdale USA Corporation (643,572.43) (643,572.43)Gemdale Bush-Pine Investment Company LLC - -Subsidiaries newly acquired - -Zhuhai Zhushengyuan Real Estate Development Co., Ltd.

495,050,199.17 64,538.24

Shenyang Gemdale Jincheng Real Estate Development Co., Ltd.

320,152,572.21 (12,836,038.70)


57


2. SUBSIDIARIES NEWLY INCLUDED IN AND EXCLUDED FROM THE SCOPE OF CONSOLIDATION FOR THE CURRENT REPORTING PERIOD - continued

(2) Subsidiaries excluded from the scope of consolidation for the current period

Unit: RMB Name of the subsidiary Net Assets at disposal Net Profit up to disposal

Subsidiaries disposed Shenzhen Gemdale Longcheng Real Estate Development Co., Ltd. (Note 1)

299,038,771.21 773,797.57

Shenzhen Songjiang Kangna Investment Co., Ltd. (Note 1)

(15,595,149.40) (17,363,283.10)

Wuhan Dian Juntai Real Estate Development Co., Ltd. (Note 2)

(14,611,423.09) (4,367,244.06)

Note 1: Associates after disposal Note 2: Joint ventures after disposal 3. EXCHANGE RATE OF MAJOR FINANCIAL STATEMENTS' ITEMS FOR FOREIGN OPEPRATION

For the Company's foreign operating subsidiaries, all asset and liability items on the balance sheet are translated at the spot exchange rate prevailing at the balance sheet date, i.e. HKD 1.0000 = RMB 0.7938. Shareholders' equity items except for inappropriate profits are translated at the spot exchange rates at the dates on which such items arose. All items in the income statement are translated at average exchange rate for the accounting period of the consolidated financial statements, i.e. HKD 1.0000 = RMB 0.7900.


58

(VI) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. CURRENCY FUNDS

Unit: RMB

Item

Closing balance Opening balance

Foreign currency Exchange

rate Amount in RMB Foreign currency Exchange

rate Amount in RMB Cash: RMB 3,657,553.07 3,375,227.73

HKD 34,649.42 0.7938 27,504.71 67,697.93 0.7862 53,224.11

USD 31,392.72 6.1528 193,153.13 25,904.44 6.0969 157,936.78

EUR 6,525.00 8.3946 54,774.77 6,815.00 8.4189 57,374.80

Subtotal 3,932,985.68 3,643,763.42

Bank balances: RMB 16,158,342,101.39 16,591,339,592.08

HKD 73,696,506.76 0.7938 58,500,287.07 117,944,444.16 0.7862 92,727,922.00

USD 47,558,289.54 6.1528 292,616,643.88 44,176,638.46 6.0969 269,340,547.03

Subtotal 16,509,459,032.34 16,953,408,061.11

Other currency funds (Note) :

RMB 622,698,648.18 1,488,660,790.55

HKD 13,177,122.44 0.7938 10,459,999.79 -

USD 26,937,824.06 6.1528 165,743,043.88 26,937,723.53 6.0969 164,236,606.59

Subtotal 798,901,691.85 1,652,897,397.14

Total 17,312,293,709.87 18,609,949,221.67

Note: Other currency funds mainly represent deposits pledged for mortgages and deposits for

bank borrowings. 2. ACCOUNT RECEIVABLE (1) Disclosure of accounts receivable by categories is as follows:

Unit: RMB

CATEGORIES

Closing balance Opening balance Carrying amount Bad debt provision Carrying amount Bad debt provision

Amount Proportion

(%) Amount Proportion



(%) Accounts receivable that are individually significant and for which bad debt provision has been assessed individually

- - - - - - - -

Accounts receivable for which bad debt provision has been assessed by portfolios Portfolio 1 - - - - - - - -Portfolio 2 4,652,544.47 100.00 232,627.25 5.00 10,382,394.03 100.00 519,119.70 5.00Subtotal of portfolios 4,652,544.47 100.00 232,627.25 5.00 10,382,394.03 100.00 519,119.70 5.00Accounts receivable that are not individually significant but for which bad debt provision has been assessed individually

- - - - - - - -

Total 4,652,544.47 100.00 232,627.25 5.00 10,382,394.03 100.00 519,119.70 5.00

Classification of account receivable by categories: Individually significant accounts are accounts receivables with individual amount larger than RMB5,000,000.00 (inclusive).


59

(VI) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued

2. ACCOUNT RECEIVABLE - continued (1) Disclosure of accounts receivable by categories is as follows - continued: The aging analysis of accounts receivable is as follows:

Unit: RMB

The account receivable with provision for bad debts calculating at 5% of the balance:

Unit: RMB Category Carrying amount Percentage of provision (%) Bad debt provision

Portfolio 2 4,652,544.47 5.00 232,627.25

(2) There are no amounts due from shareholders who hold more than 5% (including 5%) of

shareholding of the Company.

(3) Details of total amount of top five outstanding amounts are as follow: Unit: RMB

Company name Amount Aging Proportion of the outstanding amount to

the total accounts receivable (%)

Customer 1 512,538.84 Within 1 year 11.02





Total 2,319,389.09 49.85

(4) There was no amount due from related party in the closing balance for the current balance for

account receivable.

AGING

Closing balance Opening balance Amount (RMB)

Proportion (%)

Bad debts provision

Carrying amount(RMB)

Amount (RMB)

Proportion (%)

Bad debts provision

Carrying amount (RMB)

Within 1 year 3,917,541.77 84.20 195,877.11 3,721,664.66 9,517,896.09 91.67 475,894.80 9,042,001.291 to 2 years 592,966.80 12.75 29,648.34 563,318.46 722,462.04 6.96 36,123.10 686,338.942 to 3 years - - - - - - - -Over 3 years 142,035.90 3.05 7,101.80 134,934.10 142,035.90 1.37 7,101.80 134,934.10Total 4,652,544.47 100.00 232,627.25 4,419,917.22 10,382,394.03 100.00 519,119.70 9,863,274.33


60

(VI) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – continued

3. ADVANCES TO SUPPLIERS

(1) The aging analysis of advances to suppliers is as follows: Unit: RMB

AGING Closing balance Opening balance

Amount Proportion (%) Amount Proportion (%) Within 1 year 500,381,963.70 85.23 790,883,589.90 96.131 to 2 years 66,075,113.90 11.25 19,908,950.55 2.422 to 3 years 17,246,231.48 2.94 11,248,113.06 1.37Over 3 years 3,415,702.68 0.58 645,500.58 0.08Total 587,119,011.76 100.00 822,686,154.09 100.00

(2) Total amount of top five outstanding details are as follow:

Unit: RMB Name of company Relationship Amount Aging Descriptions

Hangzhou Land Resources Bureau Yuhang Branch

Government sector 169,790,000.00 Within 1 year Prepayment for land use right

Shenyang Land Trade Center Government sector 120,000,000.00 Within 1 year Prepayment for land use right

Jiangsu Electric Power Company Yangzhou Branch

Supplier 20,900,319.0022,551,746.00

Within 1 year 1-2 years

Prepayment for electric power

Sub-total 43,452,065.00

Jiangsu Electric Power Company Changzhou Branch

Supplier 1,024,176.00

28,763,834.06Within 1 year

1-2 years Prepayment for electric power

Sub-total 29,788,010.06

Shenyang Xinbei Gas Co., Ltd.

Supplier 16,696,108.00 Within 1 year Prepayment for gas

Total 379,726,183.06

(3) There are no prepayments to shareholders who hold more than 5% (including 5%) of shares of the Company.


61


4. OTHER RECEIVABLES (1) Disclosure of other receivables by categories is as follows:

Unit: RMB

CATEGORIES

Closing balance Opening balanceCarrying amount Bad debt provision Carrying amount Bad debt provision

Amount Propor

-tion (%) Amount

Propor-tion (%) Amount

Propor -tion (%) Amount

Propor-tion (%)

Other receivable that are individually significant and for which bad debt provision has been assessed individually

- - - - - - - -

Other receivable for which bad debt provision has been assessed by portfolios Portfolio 1 9,439,290,479.50 94.60 - - 9,705,942,165.77 95.64 - -Portfolio 2 538,531,216.10 5.40 26,920,808.01 5.00 442,797,462.20 4.36 22,139,873.11 5.00Subtotal of portfolios 9,977,821,695.60 100.00 26,920,808.01 0.27 10,148,739,627.97 100.00 22,139,873.11 0.22Other receivable that are not individually significant but for which bad debt provision has been assessed individually

- - - - - - - -

Total 9,977,821,695.60 100.00 26,920,808.01 0.27 10,148,739,627.97 100.00 22,139,873.11 0.22

Individually significant accounts are other receivables with individual amount larger than RMB5,000,000.00 (inclusive).


62


4. OTHER RECEIVABLES - continued The aging analysis of other receivables is as follows:

Unit: RMB

AGING


Amount

Propor-tion (%)

Bad debt provision Carrying amount

Amount

Propor -tion (%)

Bad debts provision Carrying amount

Within 1 year 8,473,377,149.59 84.92 20,563,443.02 8,452,813,706.57 8,921,460,001.61 87.91 17,745,114.91 8,903,714,886.701 to 2 year 720,908,274.70 7.23 3,497,486.18 717,410,788.52 450,976,389.35 4.44 3,001,541.89 447,974,847.462 to 3 year 262,762,781.33 2.63 1,801,681.55 260,961,099.78 83,403,552.39 0.82 920,740.08 82,482,812.31Over 3 years 520,773,489.98 5.22 1,058,197.26 519,715,292.72 692,899,684.62 6.83 472,476.23 692,427,208.39Total 9,977,821,695.60 100.00 26,920,808.01 9,950,900,887.59 10,148,739,627.97 100.00 22,139,873.11 10,126,599,754.86

The other receivables with provision for bad debts calculating at 5% of the balance:

Unit: RMB Category Balance Percentage (%) Bad debt reserve

Portfolio 2 538,531,216.10 5.00 26,920,808.01

(2) There are no other receivables due from shareholders who hold more than 5% (including 5%) of shares of the Company.

(3) Details of total amount of top five outstanding amounts are as follow:

Unit: RMB

Name of company Relationship Amount Aging

Proportion of the outstanding amounts to the total of other

receivables (%) Beijing Jinshui Real Estate Development Co., Ltd.

Joint venture 1,785,555,759.32 Within 1 year 18.43

Wuhan Dian Juntai Real Estate Development Co., Ltd.

Joint venture 970,803,488.0013,170,860.00

Within 1 year 1-2 years

Sub-total 983,974,348.00 10.16

Shanghai Jiabao Group Co., Ltd.

Minority shareholder of subsidiary

9,000,000.00108,600,000.00109,800,000.00612,347,000.00

Within 1 year 1-2 years 2-3 years

Over 3 years Subtotal 839,747,000.00 8.67Dongguan Xiangdiyajing Garden Construciton Co., Ltd.

Joint venture 774,406,384.99 Within 1 year 7.99

Nanjing Jinjun Real Estate Development Co., Ltd.

Joint venture 586,555,806.31 Within 1 year 6.06

Total 4,970,239,298.62 51.31


63

(VI) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued 4. OTHER RECEIVABLES - continued (4) Other receivables of related parties:

Unit: RMB

Name of company Relation Amount

Proportion of the outstanding amounts to the total of other receivables

(%) Beijing Jinshui Real Estate Development Co., Ltd.

Joint venture 1,785,555,759.32 17.90


Joint venture 983,974,348.00 9.86

Dongguan Xiangdiyajing Garden Construciton Co., Ltd.

Joint venture 774,406,384.93 7.75


Joint venture 586,555,806.31 5.88

Gemdale Dabaihui Associate 414,755,785.04 4.16Ningbo Langyue Real Estate Development Co., Ltd.

Joint venture 388,561,682.85 3.89

Beijing Jinshuixingye Real Estate Development Co., Ltd.

Joint venture 312,580,166.66 3.13

Gemdale Corporation Jinhua Zhongda Real Estate Development Co., Ltd.

Joint venture 310,518,676.20 3.11

Dalian Dalianwanjinyi Investment Co., Ltd.

Associate 239,838,848.07 2.40

Hangzhou Wanye Property Co., Ltd.

Associate 170,086,400.00 1.70

Tianjin Heshi Real Estate Development Co., Ltd.

Joint venture 155,008,813.00 1.55

Dongguan Aolinwei Real Estate Development Co., Ltd.

Joint venture 150,156,088.00 1.50

Wuxi Poly Zhiyuan Real Estate Development Co., Ltd.

Joint venture 42,488,512.27 0.43

Shenzhen Songjiang Kangna Investment Co., Ltd.

Associate 10,369,351.00 0.10

Shanghai Rongtian Real Estate Development Co., Ltd.

Joint venture 5,681,295.17 0.06

Ruijin Fangrong (Beijing) Investment Consultancy Co., Ltd.

Joint venture 82,071.00 0.00


64

(VI) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued 5. INVENTORIES

(1) Categories of inventories

Unit: RMB

Categories


Cost Provision for

decline in value Carrying amount Cost Provision for

decline in value Carrying amount Material on hand 9,904,749.98 - 9,904,749.98 9,345,682.24 - 9,345,682.24Goods on hand 44,502.84 - 44,502.84 69,752.24 - 69,752.24Properties under construction

67,269,888,796.18 328,840,291.45 66,941,048,504.73 62,682,752,355.15 442,143,810.33 62,240,608,544.82

Completed projects 15,570,362,974.14 177,148,531.05 15,393,214,443.09 14,523,403,693.48 135,311,983.93 14,388,091,709.55Total 82,850,201,023.14 505,988,822.50 82,344,212,200.64 77,215,571,483.11 577,455,794.26 76,638,115,688.85


65

(VI) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued 5. INVENTORIES

(2) Categories of inventories The details of properties under construction are as follow:

Unit: RMB

Project name Beginning date

Estimated completion date of

next batch

Total estimated investment RMB'100M Opening balance Closing balance

Beijing Langyue 2011.4 2014.8 40.06 1,579,376,009.10 1,285,700,474.43

Beijing Green Green 2013.3 2014.10 17.83 984,855,219.53 1,076,592,027.50

Beijing Shunyi 2014.6 2016.7 35.19 - 2,189,641,554.48

Tianjin International Plaza

2010.4 2016.6 57.85 322,907,983.92 416,467,752.80

Tianjin Changhu Bay 2012.3 2014.12 41.20 1,030,370,231.44 1,126,073,064.88

Tianjin Shuanggang 2014.4 2015.12 17.08 - 864,965,863.14

Shanghai Tianjing 2010.7 2015.6 82.35 2,616,679,140.67 2,797,019,698.09

Shanghai Yihuanian 2011.8 2015.12 53.13 2,832,115,344.45 1,893,375,695.40

Guangzhou Lihucheng 2010.3 2014.12 139.86 1,172,460,234.92 1,233,514,278.03

Dongguan Bodenghu 2008.8 2015.6 19.43 55,180,998.11 53,348,577.88

Dongguan Hushandajing 2010.6 2014.12 43.38 1,295,329,817.76 1,365,633,547.01

Foshan Longyue 2013.4 2015.12 26.12 863,718,055.26 1,642,449,339.86

Wuhan Mingjun 2010.3 Completed 12.72 751,751,702.20 -

Wuhan Sheng'aimilun 2010.6 2014.8 17.79 299,337,382.02 200,449,201.97

Wuhan Green Dongjun 2013.1 2015.3 28.45 1,128,631,128.29 1,278,054,646.89

Wuhan Zizaicheng 2013.10 2015.12 79.39 1,477,250,634.26 -

Shenzhen Tianyuewan 2010.3 2015.12 50.62 1,790,701,213.30 1,831,204,758.00

Zhuhai Science Park 2005.8 2014.11 12.57 96,336,648.11 128,868,773.34

Shenyang Boyue 2011.5 2014.12 34.31 1,041,239,376.96 1,150,803,016.53

Xi'an Hucheng Dajing 2009.5 2014.12 109.18 1,415,648,231.03 1,559,609,416.29

Nanjing Zizaicheng 2009.4 2014.12 81.25 1,916,511,374.78 1,296,142,501.70

Nanjing Mingyue 2011.8 2014.12 18.38 977,216,348.01 775,543,984.05

Xiaoshan Tianyi Gemdale Cheng (Hangzhou Tianyi)

2011.6 2014.12 72.78 5,057,991,973.83 5,354,084,996.81

Hangzhou Gemdale Green Green

2013.9 2015.9 11.83 646,529,685.15 679,367,789.75

Hangzhou Gemdale Shenhuali

2013.8 2016.6 11.55 707,957,355.97 741,123,150.40

Shenyang Binhe International Community

2008.4 2014.9 85.06 977,111,574.22 1,058,204,365.43

Shenyang Jiuxi Gongguan

2013.5 2014.12 1.00 28,007,321.13 50,682,551.40

Zhuhai Puman Garden (Zhuhai Green City)

2011.10 2014.12 17.77 642,766,444.56 726,567,926.52

Shenzhen Mingfeng 2011.5 2014.9 17.34 1,320,168,862.88 1,293,018,754.91


66

(VI) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued 5. INVENTORIES - continued

(3) Categories of inventories - continued The details of properties under construction are as follow - continued:

Unit: RMB



next batch


Shenzhen Langyue 2013.9 2014.12 7.79 492,381,067.36 539,905,230.10

Shenzhen Zhenfuling Project

2013.9 2016.7 41.18 1,158,677,102.29 -

Dongguan Lincun Project

2013.12 2015.8 13.06 443,347,068.18 474,942,630.36

Dongguan Humen Huiying Project

2013.12 2015.12 10.52 510,267,501.83 537,965,783.57

Shaoxing Zizaicheng 2010.8 2014.12 74.90 1,705,580,085.57 1,693,909,431.20

Cixi Hongyue 2011.5 2014.10 28.63 2,289,849,045.58 -

Cixi Jinheng 2014.5 2015.12 15.51 685,029,153.00 723,077,728.30

Yuyao Lanyue 2013.3 2014.12 10.99 733,109,990.54 782,729,295.52

Jinhua Green Chunxiao 2013.8 2014.12 4.55 284,006,413.53 299,220,171.58

Shaoxing Didang 2014.4 2016.6 10.85 125,000,000.00 131,024,336.47

Wuhan Lanfeixi Bank 2010.7 2014.9 43.85 1,676,907,401.38 1,847,684,137.88

Wuhan Yijing 2011.7 2014.12 23.95 660,193,149.13 801,201,399.12

Zhengzhou Hanghai Dong Road

2014.5 2016.11 9.49 251,150,808.20 261,983,013.59

Xi'an Xifenggongyuan 2011.2 2015.8 219.27 2,614,220,359.78 3,128,101,213.51

Xi'an Dazhai Road 2015.1 2016.10 58.28 14,021,199.79 176,892,173.39

Yantai Lanyue 2010.11 2014.10 11.34 114,753,185.38 144,464,705.84

Kunming Haigeng Road Project

2013.9 2015.11 52.33 1,454,575,365.47 1,686,504,728.96

Yantai Green World 2013.3 2014.9 34.45 287,060,484.60 789,092,916.14

Dalian Yunjin 2011.6 2014.9 9.69 610,259,824.04 652,784,531.24

Dalian Yijing 2011.11 2014.9 34.68 904,865,675.07 737,186,172.01

Changsha Sanqianfu 2011.3 2014.12 44.81 626,855,292.17 593,415,095.79

Yangzhou Yijing 2012.2 2014.12 15.25 1,075,285,195.82 456,702,728.26

Yangzhou Mingyue 2013.6 2015.10 28.31 1,230,937,164.78 1,321,141,892.76

Vision(Shenzhen) Business Park Phase 3

2013.10 2018.11 36.70 379,997,649.17 407,336,698.22

Shenyang Binhe Left Bank

2012.10 2014.12 10.67 550,670,958.92 629,386,882.50

Xi'an Yanxiang Road Project

2012.10 2014.12 18.03 796,825,407.04 896,722,735.40

Shanghai Zizaicheng 2010.9 2015.6 64.86 3,218,766,428.77 3,499,833,720.54

Shenyang Yijing 2013.5 2014.12 36.58 590,619,228.26 1,344,180,195.18Dalian Huiquan Road 2013.10 2014.12 20.90 718,835,455.15 863,502,322.07

Changzhou Horizon Yaju (Changzhou Horizon 2#)

2011.7 2014.12 18.73 643,149,764.24 681,330,977.42

Changzhou Green Town (Changzhou Horizon 3#)

2011.8 2014.12 20.18 1,191,727,500.31 1,285,704,464.87


67

(VI) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued 5. INVENTORIES - continued

(4) Categories of inventories - continued The details of properties under construction are as follow - continued:



next batch


Shenyang Jincheng (Note)

2013.4 2014.12 30.90 - 1,269,386,459.91

Suzhou Baodai Road 2014.6 2016.11 7.98 - 459,050,648.37

Zhuhai Doumen Xianghaiwan Garden

2014.5 2016.1 21.15 - 693,979,616.20

Foshan Dali Yanbu Project

2014.4 2017.4 32.27 - 921,701,498.69

Shenyang Yalujiang 2014.5 2016.9 18.39 - 774,143,101.97

Others 19,054,125.88 21,185,316.54

Total 62,682,752,355.15 67,269,888,796.18

The details of completed projects are as follow:

Unit: RMB Project name Completion date Opening balance Increase Decrease Closing balance

Shenzhen Haijing No. 21 Department

2002.10 2,961,807.04 - - 2,961,807.04

Shenzhen Mingzuo 2010.1 243,939.18 - - 243,939.18

Shenzhen Gemdale Tennis Garden

2005.9 950,486.44 - - 950,486.44

Shenzhen Gemdale Mingjin

2007.11 58,713,389.05 - - 58,713,389.05

Shenzhen Tianyuewan 2012.6 1,141,099,409.11 - 207,187,164.03 933,912,245.08

Shenzhen Mingfeng 2013.10 29,682,736.75 38,809,803.50 16,583,659.88 51,908,880.37

Guangzhou Lihucheng 2013.12 533,578,881.47 13,573,580.51 84,356,302.21 462,796,159.77

Shanghai Green Chunxiao

2005.3 19,546,571.18 - - 19,546,571.18

Shanghai Green Town 2009.5 212,317,041.60 - - 212,317,041.60

Shanghai Green World 2011.12 411,530,533.05 - 16,103,245.09 395,427,287.96

Shanghai Wanliuyu 2010.12 13,782,821.80 - - 13,782,821.80

Shanghai Tianyu 2011.11 129,190,025.54 - 61,897,437.53 67,292,588.01

Shanghai Tianjing 2013.12 2,339,298,709.01 - 141,580,837.33 2,197,717,871.68

Shanghai Yijing 2012.11 92,918,269.40 21,652,972.83 50,691,767.34 63,879,474.89

Shanghai Yihuanian 2014.5 298,944,451.68 1,154,288,390.65 588,087,772.36 865,145,069.97


68


5. INVENTORIES - continued

(1) Categories of inventories - continued

The details of completed projects are as follow – continued: Unit: RMB

Project name Completion date Opening balance Increase Decrease Closing balance

Ningbo Gemdale International Garden

2008.12 1,540,000.00 - - 1,540,000.00

Ningbo Dongyu 2012.8 309,971,780.10 3,767,210.94 84,893,470.62 228,845,520.42

Cixi Hongyue 2014.6 2,792,897,400.00 864,601,393.25 1,928,296,006.75

Shaoxing Zizaicheng 2013.12 328,541,632.28 221,038,151.40 171,388,335.87 378,191,447.81

Changsha Sanqianfu 2014.3 245,818,781.96 189,852,082.00 171,877,094.56 263,793,769.40

Shenyang International Garden Phase 4

2011.10 2,505,646.02 82,204.37 - 2,587,850.39

Beijing Mingjing 2010.3 2,663,379.18 - - 2,663,379.18

Beijing Langyue 2014.5 21,012,766.70 454,518,662.66 430,553,777.22 44,977,652.14

Tianjin Green World 2012.12 13,190,929.05 - - 13,190,929.05

Tianjin International Plaza 2014.6 1,237,485,286.44 - 308,848,916.95 928,636,369.49

Xi'an Furong Shijia 2010.12 3,133,628.56 7,545,677.23 10,679,305.79 -

Xi'an Shanglinyuan 2008.12 1,594,675.88 - - 1,594,675.88

Xi'an Huchengdajing 2013.12 1,682,289,300.98 - 277,953,564.80 1,404,335,736.18

Dalian Yunjin 2012.12 846,330.53 - 846,330.53 -

Dalian Yijing 2013.12 452,254,296.43 346,099,236.04 352,894,495.81 445,459,036.66

Yantai Lanyue 2013.10 611,382,081.24 - 32,830,971.09 578,551,110.15

Wuhan Green Town 2008.12 832,400.16 915,482.83 1,747,882.99 -

Wuhan West Bank Story 2011.12 11,444,358.51 - 315,000.00 11,129,358.51

Wuhan Mingjun 2014.6 175,106,147.64 915,402,746.12 696,349,989.39 394,158,904.37

Wuhan Lanfeixi Bank 2013.10 113,311,572.77 - 29,701,553.31 83,610,019.46

Wuhan Sheng'aimilun 2013.9 9,983,786.81 10,143,417.40 - 20,127,204.21

Wuhan Yijing 2013.12 439,695,396.62 1,131,771.77 55,145,694.33 385,681,474.06

Dongguan Gemdale Green Town

2007.1 3,895,707.10 - - 3,895,707.10

Dongguan Green Garden 2010.12 1,579,724.97 - 880,000.00 699,724.97

Dongguan Waitan 8# 2012.12 14,669,036.98 - 660,000.00 14,009,036.98

Dongguan Bodenghu 2013.12 15,296,616.17 12,840,000.00 11,783,478.91 16,353,137.26

Dongguan Hushandajing 2013.12 307,241,998.44 - 99,560,085.12 207,681,913.32

Foshan Jiulongbi 2011.6 12,545,569.87 - 958,368.00 11,587,201.87

Foshan Tianxi 2013.9 777,778,716.69 - 101,555,328.55 676,223,388.14

Zhuhai Science Park 2012.12 163,187,795.47 - 31,771,328.54 131,416,466.93

Zhuhai Yidunshan Land 3# 2012.12 26,921,863.03 1,910,041.03 11,473,646.80 17,358,257.26

Zhuhai Yidunshan Land 1# 2013.9 2,400,247.12 124,040.87 1,122,403.12 1,401,884.87


69


5. INVENTORIES - continued

(1) Categories of inventories - continued

The details of completed projects are as follow - continued: Unit: RMB

Project name Completion date Opening balance Increase Decrease Closing balance

Beijing Green Town 2009.11 5,622,913.53 - - 5,622,913.53

Shenyang International Park 2010.1 12,053,038.04 981,953.00 - 13,034,991.04

Nanjing Mingjing 2010.10 56,445,102.67 - - 56,445,102.67

Nanjing Mingyue 2013.12 51,518,046.61 171,251,650.74 215,966,840.06 6,802,857.29

Shenzhen Shangtangdao 2011.3 2,233,623.40 72,480.00 - 2,306,103.40

Nanjing Zizaicheng 2014.6 264,277,425.39 553,182,188.86 637,335,914.20 180,123,700.05

Hangzhou Zizaicheng 41# 2013.12 117,230,457.59 - 14,330,896.88 102,899,560.71

Wuhan Green Spring Bank 2012.3 66,505,418.17 - 14,293,137.68 52,212,280.49

Wuhan International Park 2011.12 2,080,004.68 - 163,602.00 1,916,402.68


2013.9 533,627,130.73 2,337,971.57 169,688,283.03 366,276,819.27

Shenyang Tanjun 2012.12 20,082,377.24 9,576,250.56 9,534,041.82 20,124,585.98

Beijing Yangshan 2012.12 15,152,406.32 - 4,835,121.36 10,317,284.96

Shenyang Mingjing 2013.12 230,583,613.60 - 69,870,660.63 160,712,952.97

Shenyang Boyue 2013.12 99,754,667.29 - 44,164,760.58 55,589,906.71

Shenyang Jincheng (Note) 2013.12 - 158,431,836.44 55,761,790.24 102,670,046.20

Yangzhou Guyunhe 2013.10 - 713,081,118.34 571,002,806.77 142,078,311.57

Changzhou Horizon Yaju (Changzhou Horizon 2#)

2013.12 592,490,808.50 - - 592,490,808.50

Shanghai Zizaicheng 2010.9 91,655,338.95 74,431.42 - 91,729,770.37

Hong Kong Grennery Place (Yuen Long)

2001.9 9,018,115.63 - 211,999.67 8,806,115.96

Dalian Zhongshanjiuhao 2004.7 4,326,060.32 - - 4,326,060.32

Shenyang Yijing 2013.12 73,314,603.82 - 24,583,016.18 48,731,587.64

Hong Kong Harbourview Garden

2000.5 552,015.00 - - 552,015.00

Total 14,523,403,693.48 7,795,582,753.08 6,748,623,472.42 15,570,362,974.14

Note: Due to the change in the scope of consolidation, this project was included in the completed projects.


70


5. INVENTORIES - continued (2) Provision for decline in value of inventories

Unit: RMB

Project name Opening balance

Increase in the current period Decrease in the current period

Closing balanceProvision

Transfers from properties under

development

Transers to completed projects

Reversals Write-off

Properties under construction (Note 1)

442,143,810.33 - - 113,303,518.88 - - 328,840,291.45

Completed projects (Note 2)

135,311,983.93 - 113,303,518.88 - - 71,466,971.76 177,148,531.05

Total 577,455,794.26 - 113,303,518.88 113,303,518.88 - 71,466,971.76 505,988,822.50

Note 1: Due to the transfers to completed projects of Shanghai Yihuanian and Cixi Jinqi held by the subdidiaries of the

Company, the amount of provision for decline in value of properties under development decreased by RMB 113,303,518.88.

Note 2: Due to the recognision of sales of Shanghai Yihuanian and Cixi Jinqi held by the subdidiaries of the Company,

the amount of provision for decline in value of compledted projects was written off by RMB 71,466,971.76.

(3) Categories of provision for decline in value of inventories Unit: RMB

Category of provision

Basis of provision for decline in value of

inventories

Reasons for reversals of decline in value of

inventories in the current period

Proportion of amount of reversal for to the closing balance of the relevant

category of inventories in the current peroid

Properties under construction

Estimated net realizable value is lower than the carry amount of the inventories

N/A N/A

Completed projects

Estimated net realizable value is lower than the carry amount of the inventories

N/A N/A


71

(VI) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued 6. OTHER CURRENT ASSETS

Unit: RMB Item Closing balance Opening balance

Current asset arising from prepaid tax 4,277,249,506.72 2,964,400,997.84

Financial products (Note 1) 3,400,000,000.00 121,938,000.00

Other investments (Note 2) 1,405,000,000.00 740,000,000.00

Total 9,082,249,506.72 3,826,338,997.84

Note 1: Financial products purchased by the Company which will be repaid within one year Note 2: The carrying amount represents the short-term bridge fund amounting RMB 1,300,000,000.00 issued by the

Company via Shanghai Wenjie Equity Investment Funds Ltd. (Limited Partnership) and the entrust loan amounting RMB105,000,000.00 issued by the Company via Shenzhen Gemdale Beicheng Real Estate Development Co., Ltd.. The Company received interest per agreed interest rate.


72


7. AVAILABLE-FOR-SALE FINANCIAL ASSETS Unit: RMB

Item Closing balance Opening balance

Available-for-sale equity instruments 167,948,235.00 179,135,670.00

Unit: RMB

Item Available-for-sale

equity instruments

Available-for-sale

debentures Others Total

Cost of equity instruments 182,791,500.00 - - 182,791,500.00

Closing balance of fair value (Note) 167,948,235.00 - - 167,948,235.00

Accumulated changes in fair value

recognized in other comprehensive

income

(14,843,265.00) - - (14,843,265.00)

Impairment on available-for-sale - - - -

Note: Closing fair value of available-for-sale equity instruments is determined by the closing price in open

market on the balance sheet date.


73


8. INVESTMENTS IN JOINT VENTURES AND ASSOCIATED COMPANIES Unit: RMB

Investee Proportion of investee's registered capital (%)

The Company's attributable voting

rights in investee (%)Total assets

at current period endTotal liabilities

at current period endTotal net assets

at current period endTotal revenue

for current period Total net profit

for current period Associates

Shanghai Pufa Gemdale Real Estate Development Co., Ltd. 49 49 245,760,718.30 120,501,445.09 125,259,273.21 26,343,640.79 12,026,419.90

Shenzhen Yuansheng First Phase Investment Ltd.

(Limited Partnership)

38.76 38.76 425,187,184.94 4,476,424.00 420,710,760.94 35,771,045.36 28,023,181.36

Hangzhou Wanhong Real Estate Development Co., Ltd. 49 49 2,611,775,839.74 1,997,958,608.19 613,817,231.55 - (11,584,809.03)

Gemdale Dabaihui 35 35 10,515,427,587.15 9,657,463,103.59 857,964,483.56 - (61,790,554.79)

UBS/Gemdale China Real Estate Fund I, L.P. (Note 1) 4.71 4.71 928,819,008.14 10,757,276.74 918,061,731.40 96,129.09 (9,800,624.25)

Shenzhen Yuansheng Investment Management Co., Ltd. 40 40 5,182,664.97 300,330.58 4,882,334.39 1,148.66 (117,762.83)

Dalian Dalianwan Jinyi Investment Co., Ltd. 49 49 374,522,181.75 380,663,845.07 (6,141,663.32) - (310,885.87)

Hangzhou Wanye Property Co., Ltd. 33 33 885,363,249.27 686,337,370.26 199,025,879.01 - (989,469.91)

Jiaxing Wenjia No.4 Equiy Investment Ltd. (Limited Partnership)

( Note 2)

13.01 13.01 1,551,865,000.00 - 1,551,865,000.00 - (135,000.00)

Shenzhen Longcheng Real Estate Development Co., Ltd. (Note 3) 51 51 1,504,703,117.54 1,231,259,495.73 273,443,621.81 - (16,589,485.53)

Joint ventures UBS/Gemdale Investment Management Limited 50 50 12,587,047.53 7,640,393.22 4,946,654.31 9,136,115.72 1,036,644.36 UBS/Gemdale Investment G.P. Ltd. 50 50 0.12 - 0.12 - - Tianjin Heshi Real Estate Development Co., Ltd. 50 50 1,555,005,432.22 1,525,475,721.70 29,529,710.52 - (6,882,975.55) Ningbo Langyue Real Estate Development Co., Ltd. 50 50 1,419,819,013.77 1,334,218,731.44 85,600,282.33 - (7,257,747.61) Beijing Jinshui Real Estate Development Co., Ltd. 50 50 5,009,945,125.50 4,987,438,475.30 22,506,650.20 - (13,876,964.02) Dongguan Xiangdi Yajing Garden Construction Co., Ltd. (Note 4) 80 80 977,784,184.81 928,065,641.93 49,718,542.88 - (129,430.47) Ruijin Fangrong (Beijing) Investment Consulting Co., Ltd.. 50 50 4,929,964.80 4,392,119.35 537,845.45 2,937,954.14 (72,601.02) Shanghai Shengshi Investment Management Limited 50 50 32,407,248.07 11,644,030.26 20,763,217.81 2,549,538.05 (358,850.42) Wuxi Baoli Zhiyuan Real Estate Development Co., Ltd. (Note 4) 49 49 1,022,625,745.37 939,281,112.89 83,344,632.48 - (8,165,391.85) Beijing Jinshui Xingye Real Estate Development Co., Ltd. (Note 4) 2.38 2.38 2,758,807,126.71 1,732,746,453.37 1,026,060,673.34 - (17,257,094.13) Nanjing Jinjun Real Estate Development Co., Ltd. (Note 4) 51 51 3,455,177,587.67 2,547,407,444.15 907,770,143.52 - (4,650,738.50) Shanghai Rongtian Real Estate Development Co., Ltd. 50 50 957,117,409.26 868,493,907.17 88,623,502.09 - (10,680,424.08) Hangzhou Gemdale Zhongtian Real Estate Development Co., Ltd. (Note 4) 49 49 3,205,480,281.72 2,446,926,984.41 758,553,297.31 22,046,060.00 (4,091,533.71)

Dongguan Aolinwei Real Estate Development Co., Ltd. 50 50 710,004,716.19 700,221,585.58 9,783,130.61 - (218,362.12) Gemdale Corporation Jinhua Zhongda Real Estate Development Co., Ltd.

50 50 519,562,478.45 514,929,332.46 4,633,145.99 - (366,854.01)

Wuhan Dian Juntai Real Estate Development Co., Ltd. 50 50 2,838,932,564.93 1,867,791,167.15 971,141,397.78 - (4,214,423.19) Shenzhen Gemdale Xinsha Real Estate Development Co., Ltd. (Note 4)

51 51 20,000,000.00 - 20,000,000.00 - -

Gemdale JV Bush-Pine Real Estate Development Company LLC (Note 4)

99 99 504,483,092.58 7,859.03 504,475,233.55 - (1,465,063.76)


74


8. INVESTMENTS IN JOINT VENTURES AND ASSOCIATED COMPANIES - continued

Note 1: The Company held 4.71% shares of the total fund raised for the UBS/Gemdale China

Real Estate Fund I, L.P. which was a limited partnership funds in USD account. According to the agreements, the joint venture, UBS/Gemdale Investment G.P. Ltd, which is the general partner of UBS/Gemdale China Real Estate Fund I, L.P., is in charge for the daily management and has significant influence over major financial and operational decisions. Thus, the UBS/Gemdale China Real Estate Fund I, L.P was considered as an associate.

Note 2: Jiaxing Wenjia No.4 Equiy Investment Ltd. (Limited Partnership) (“Wenjia No.4”)was a

partnership raising fund for a project and the Company held 13.01% shares of the total fund raised by Wenjia No.4. According to the agreements of partnership, the Company has significant influence over major financial and operational decisions in Wenjia No.4. Thus Wenjia No.4 was considered as an associate.

Note 3: According to the articles of association of Shenzhen Gemdale Longcheng Real Estate

Development Co., Ltd. (“Shenzhen Longcheng”), the Company has significant influence over major financial and operational decisions in Shenzhen Longcheng. Thus Shenzhen Longcheng was considered as an associate.

Note 4: Major financial and operational decisions of these companies involved unanimous

approval of the Company and cooperation parties. Thus these companies were considered as associates.


75


9. LONG-TERM EQUITY INVESTMENTS (1) Categories of long-term equity investments:

Unit: RMB

Items Closing balance Opening balance

Equity investments to joint ventures 2,228,947,400.91 1,237,922,403.80

Equity investments to associates 1,641,336,129.02 1,235,545,029.46

Equity investments to other companies 7,002,992.26 6,935,943.21

Subtotal 3,877,286,522.19 2,480,403,376.47

Less: long-term equity investments provision for impairment

- -

Total 3,877,286,522.19 2,480,403,376.47


76


9. LONG-TERM EQUITY INVESTMENTS - continued (2) Details of long-term equity investments are as follow:

Unit: RMB

Investee Method of accounting

Initial investment cost Opening balance

Increase/ (Decrease) Closing balance

Proportion of investee's

shareholdings (%)

The Company's attributable

voting rights in investee

(%)

The note for the differences of shareholding

Proportion and voting rights Proportion

Provision for impairment

Accrued provision for impairment

for the current period

Cash dividends for

the current period

Hangzhou Gemdale Zhongtian Real Estate Development Co., Ltd.

Equity method

343,000,000.00 516,802,575.49 (2,004,851.52) 514,797,723.97 49 49 N/A - - -


Equity method

468,370,000.00 465,334,649.83 (2,371,876.64) 462,962,773.19 51 51 N/A - - -

Wuxi Baoli Zhiyuan Real Estate Development Co., Ltd.

Equity method

49,000,000.00 45,870,802.08 (3,022,165.59) 42,848,636.49 49 49 N/A - - -

Dongguan Xiangdi Yajing Garden Construction Co., Ltd.

Equity method

40,000,000.00 40,000,000.00 (225,165.70) 39,774,834.30 80 80 N/A - - -

Beijing Jinshui Xingye Real Estate Development Co., Ltd.

Equity method

25,000,000.00 22,494,162.80 (6,471,410.30) 16,022,752.50 2.38 2.38 N/A - - -

Shanghai Pufa Gemdale Real Estate Development Co., Ltd.

Equity method 4,899,980.00 55,484,098.11

5,892,945.76 61,377,043.87 49 49 N/A - - -


Equity method

151,200,000.00 149,844,874.91 (149,844,874.91) - 45 45 N/A - - -


Equity method

52,500,000.00 48,710,471.52 (4,398,720.48) 44,311,751.04 50 50 N/A - - -

Shenzhen Yuansheng First Phase Investment Ltd. (Limited Partnership)

Equity method

72,800,000.00 72,800,000.00 - 72,800,000.00 38.76 38.76 N/A - - -

Shanghai Shengshi Investment Management Limited

Equity method

10,000,000.00 14,023,553.11 - 14,023,553.11 50 50 N/A - - -

Ruijin Fangrong (Beijing) Investment Consulting Co., Ltd.

Equity method

331,060.15 331,060.15 - 331,060.15 50 50 N/A - - -

Hangzhou Wanhong Real Estate Development Co., Ltd.

Equity method

318,901,800.00 306,446,999.88 (5,676,556.42) 300,770,443.46 49 49 N/A - - -

Gemdale Dabaihui Equity method

35,000,000.00 605,665,529.80 (21,626,694.18) 584,038,835.62 35 35 N/A - - -

Shenzhen Yuansheng Investment Management Limited

Equity method

2,000,000.00 2,000,000.00 - 2,000,000.00 40 40 N/A - - -

Ningbo Langyue Real Estate Development Co., Ltd.

Equity method

50,000,000.00 46,429,014.99 (3,628,873.81) 42,800,141.18 50 50 N/A - - -

Beijing Jinshui Real Estate Development Co., Ltd.

Equity method

25,000,000.00 18,191,807.11 (6,938,482.01) 11,253,325.10 50 50 N/A - - -


77


9. LONG-TERM EQUITY INVESTMENTS - continued (2) Details of long-term equity investments are as follow – continued:

Investee Method of accounting

Initial investment cost Opening balance

Increase/ (Decrease) Closing balance

Proportion of investee's

shareholdings (%)

The Company's attributable

voting rights in investee

(%)

The note for the differences of shareholding

Proportion and voting rights Proportion


Accrued provision for impairment

for the current period

Cash dividends for

the current period

Tianjin Heshi Real Estate Development Co., Ltd.

Equity method

25,000,000.00 18,206,343.03 (3,441,487.78) 14,764,855.25 50 50 N/A - - -

UBS/Gemdale China Real Estate Fund I, L.P.

Equity method

46,130,509.32 43,303,526.76 (46,741.89) 43,256,784.87 4.71 4.71 N/A - - -

UBS/Gemdale Investment G.P. Ltd

Equity method

0.06 0.06 - 0.06 50 50 N/A - - -

UBS/Gemdale Investment Management Limited

Equity method

61,529.87 1,527,963.63 968,003.86 2,495,967.49 50 50 N/A - - -

Dalian Dalianwan Jinyi Investment Co., Ltd.

Equity method

4,900,000.00 - - - 49 49 N/A - - -

Dongguan Aolinwei Real Estate Development Co., Ltd.

Equity method

5,000,000.00 - 4,891,565.30 4,891,565.30 50 50 N/A - - -

Hangzhou Wanye Property Co., Ltd.

Equity method

66,000,000.00 - 65,801,500.95 65,801,500.95 33 33 N/A - - -


Equity method

2,500,000.00 - 2,316,572.99 2,316,572.99 50 50 N/A - - -

Jiaxing Wenjia N0.4 Equity Investment Ltd. (Limited Partnership)

Equity method

202,000,000.00 - 202,000,000.00 202,000,000.00 13.01 13.01 N/A - - -


Equity method

500,900,000.00 - 502,260,032.46 502,260,032.46 50 50 N/A - - -

Shenzhen Gemdale Xinsha Real Estate Development Co., Ltd.

Equity method

10,200,000.00 - 10,200,000.00 10,200,000.00 51 51 N/A - - -

Shenzhen Gemdale Longcheng Real Estate Development Co., Ltd.

Equity method

300,000,000.00 - 309,291,520.25 309,291,520.25 51 51 N/A - - -

Gemdale JV Bush-Pine Real Estate Development Company LLC

Equity method

502,891,856.33 - 502,891,856.33 502,891,856.33 99 99 N/A - - -

Shenzhen Innovation Technology Park Co. Ltd. (Note)

Cost method

7,002,992.26 6,935,943.21 67,049.05 7,002,992.26 25 25 N/A - - -

Total 3,320,589,727.99 2,480,403,376.47 1,396,883,145.72 3,877,286,522.19 - - -


78


9. LONG-TERM EQUITY INVESTMENTS - continued (2) Details of long-term equity investments are as follow – continued: Note: Shenzhen Innovation Science Park Co., Ltd. is in the process of deregistration. There is no impairment of book value based on the results of

impairment assessment. At the end of current period, the Company and its subsidiaries have no long-term investment projects restricted from transferred funds to the investing enterprises. (3) Details of unrecognised investment loss are as follow:

Unit: RMB

Investee

Amount recognised in the current period Amount recognised in the prior period

Unrecognised investment loss in the current period

Accumulated unrecognised

investment loss

Unrecognised investment loss in the

prior period

Accumulated unrecognised investment

loss Dalian Dalianwan Jinyi Investment Co., Ltd. 152,334.08 3,009,415.03 - - Total 152,334.08 3,009,415.03 - -


79


10. INVESTMENT PROPERTIES

The investment properties which are measured by cost method: Unit: RMB

Opening balance

Increase in the current year Decrease in the current year

Closing balance Acquisitions

Transfers from owner-occupied properties,

construction in progress or inventories

Land and construction cost

Transfers from investment

properties under development

Gain or loss on

changes in fair value Disposals

Transfers to owner-occupied

properties, construction in

progress or inventories

Transfers to completed investment properties

I. Total cost 3,946,660,418.72 - - 115,776,506.12 - - - - - 4,062,436,924.84

1. Completed investment properties

3,234,728,130.62 - - 6,638,512.59 - - - - - 3,241,366,643.21

(1) Buildings 3,234,728,130.62 - - 6,638,512.59 - - - - - 3,241,366,643.21

(2) Land use right - - - - - - - - - -

(3) Others - - - - - - - - - -

2. Investment property under construction

711,932,288.10 - - 109,137,993.53 - - - - - 821,070,281.63

II. Total changes in fair value

6,091,451,581.28 - - - - - - - - 6,091,451,581.28


5,268,705,283.16 - - - - - - - - 5,268,705,283.16

(1) Buildings 5,268,705,283.16 - - - - - - - - 5,268,705,283.16

(2) Land use right - - - - - - - - - -

(3) Others - - - - - - - - - -


822,746,298.12 - - - - - - - - 822,746,298.12

III. Total carrying amount of investment properties

10,038,112,000.00

10,153,888,506.12


8,503,433,413.78 8,510,071,926.37

(1) Buildings 8,503,433,413.78 8,510,071,926.37

(2) Land use right - -

(3) Others - -


1,534,678,586.22 1,643,816,579.75


80


10. INVESTMENT PROPERTIES - continued Notes: (1) The increase for the current period included the increase of cost of land use right and construction amounting RMB115,776,506.12. (2) As at June 30, 2014, the property certificate attached to the investment properties amounting to RMB49,820,000.00 was not yet obtained (opening balance: RMB49,820,000.00).


81


11. FIXED ASSETS

(1)The details of fixed assets: Unit: RMB

Items Opening balance Increase Decrease Closing balance I. Total cost 468,591,620.19 17,542,632.95 8,204,457.74 477,929,795.40 Including: House and buildings 260,651,154.99 2,104,503.76 2,918,959.65 259,836,699.10

Electronic equipment, furniture and fixtures 84,017,521.04 5,172,108.66 2,028,772.32 87,160,857.38 Motor vehicles 93,186,246.12 7,937,260.52 3,099,603.84 98,023,902.80 Other equipments 30,736,698.04 2,328,760.01 157,121.93 32,908,336.12

II. Total accumulated depreciation 169,885,503.96 Increase Accrued

Depreciation 3,796,765.00 189,954,545.28

Including: House and buildings 35,107,802.36 - 7,975,835.67 - 43,083,638.03 Electronic equipment, furniture and fixtures 55,896,141.97 28,292.46 6,724,797.16 1,811,951.71 60,837,279.88 Motor vehicles 60,390,590.83 - 6,795,876.47 1,825,408.21 65,361,059.09 Other equipments 18,490,968.80 1,390.79 2,339,613.77 159,405.08 20,672,568.28

III. Total net value of fixed assets 298,706,116.23 287,975,250.12 Including: House and buildings 225,543,352.63 216,753,061.07

Electronic equipment, furniture and fixtures 28,121,379.07 26,323,577.50 Motor vehicles 32,795,655.29 32,662,843.71 Other equipments 12,245,729.24 12,235,767.84

IV. Total accumulated provision for impairment of fixed assets - - - - Including: House and buildings - - - -

Electronic equipment, furniture and fixtures - - - - Motor vehicles - - - - Other equipments - - - -

V. Total carrying value of fixes assets 298,706,116.23 287,975,250.12 Including: House and buildings 225,543,352.63 216,753,061.07

Electronic equipment, furniture and fixtures 28,121,379.07 26,323,577.50 Motor vehicles 32,795,655.29 32,662,843.71 Other equipments 12,245,729.24 12,235,767.84


82


11. FIXED ASSETS - continued

(1)The details of fixed assets: - continued Notes: (1) The increase of cost for current period includes purchased fixed assets amouting to RMB14,841,026.19, transfer from construction in progress to

fixed assets amounting to RMB2,104,503.76 and acquiries of subsidiaries amounting to RMB597,103.00. (2) The decrease of cost for current period includes disposal of fixed assets amounting to RMB7,767,496.29 and disposals of subsidiaries amounting to

RMB436,961.45. (3) The increase of accumulated depreciation for current period includes acquiries of subsidiaries amounting to RMB29,683.25 and accrued depreciation

for current period amounting to RMB23,836,123.07. (4) The decrease of accumulated depreciation for current period includes depreciation of disposed fixed assets amounting to RMB3,743,394.20 and

disposals of subsidiaries amounting to RMB53,370.80. (2) The details of the fixed assets property certificates which have not been obtained as follows:

As at June 30, 2014, the property certificate attached to the fixed assets amounting to RMB2,172,803.64 was not yet obtained (opening balance: RMB374,933.03).


83


12. CONSTRUCTION IN PROGRESS

The details of construction in progress were listed as follows:

Unit: RMB


Book value Provision for impairment

Net value Book value Provision for impairment Net value

Other reconstruction project - - - 2,104,503.76 - 2,104,503.76 Total - - - 2,104,503.76 - 2,104,503.76

13. LONG-TERM PREPAYMENTS Unit: RMB

Items Opening balance Increase Amortization for current

period Other decrease Closing balance Reason for other

decrease Improvement expenses for fixed assets under leasing 10,147,185.14 12,745,275.87 3,393,707.43 - 19,498,753.58 Others 1,814,461.08 10,032.00 470,465.07 - 1,354,028.01 Total 11,961,646.22 12,755,307.87 3,864,172.50 - 20,852,781.59


84


14. DEFERRED TAX ASSETS/DEFERRED TAX LIABILITIES (1) The deferred tax assets and liabilities which are recognized:

Unit: RMB

Items

Deductible/Taxable temporary differences as at June 30, 2014

Deferred tax assets/liabilities as at June 30, 2014

Deductible/Taxable temporary differences as at January 1, 2014

Deferred tax assets/liabilities as at January 1, 2014

Deferred tax assets: Impairment losses on assets 109,266,037.62 27,316,509.49 125,116,827.16 31,279,206.79 Unrealized profit in inventories 758,903,357.56 189,725,839.39 618,651,294.44 154,662,823.61 Employee benefits payable 331,111,870.48 82,777,967.62 492,768,693.80 123,192,173.45 Deductible losses 1,717,309,681.84 429,327,420.46 1,177,269,363.20 294,317,340.80 Accrued land appreciation tax 409,441,995.72 102,360,498.93 433,828,870.04 108,457,217.51 Accrued construction cost 357,672,672.88 89,418,168.22 466,857,341.40 116,714,335.35 Others 40,008,737.60 10,002,184.40 155,333,957.76 38,833,489.44 Sub-total 3,723,714,353.70 930,928,588.51 3,469,826,347.80 867,456,586.95 Deferred tax liabilities: Investment properties 6,528,942,173.58 1,632,235,543.40 6,528,942,173.58 1,632,235,543.40 Change in fair value of acquiries of subsidiaries 2,757,410,558.76 689,352,639.69 2,757,410,558.76 689,352,639.69 Change in fair value of disposals of subsidiaries 174,378,278.12 43,594,569.53 136,215,676.88 34,053,919.22 Others 411,607,978.02 58,108,521.96 315,090,972.76 36,097,035.67 Sub-total 9,872,338,988.48 2,423,291,274.58 9,737,659,381.98 2,391,739,137.98

Note: Based on the Company and its subsidiaries' profit forecast, it was estimated that there was probably sufficient taxable income in the future

periods so as to utilize the deductible temporary differences and deductible tax losses, thereby the Company and its subsidiaries recognize the above deferred tax assets.


85


14. DEFERRED TAX ASSETS/LIABILITIES - continued (2) Details of the deferred tax assets not recognized:

Unit: RMB Items Closing balance Opening balance

Deductible temporary differences 799,440,277.21 853,277,162.77Deductible losses 100,386,270.85 246,957,557.90Total 899,826,548.06 1,100,234,720.67

Due to uncertainty of whether sufficient taxable income of some subsidiaries is available in the future, the Company and its subsidiaries did not recognize deferred tax assets for the deductible temporary differences and deductible losses of such subsidiaries listed above. (3) Deductible losses, which are not recognized as the deferred tax assets, will be expired in the year

as followings: Unit: RMB

Year Closing balance Opening balance Remarks

2014 1,438,394.78 1,694,301.12

2015 1,449,833.11 1,046,859.86

2016 12,619,729.43 34,326,509.67

2017 52,145,233.84 90,701,465.57

2018 26,280,023.69 119,188,421.68

2019 6,453,056.00 -

Total 100,386,270.85 246,957,557.90

15. PROVISION FOR IMPAIRMENT LOSSES ON ASSETS Unit: RMB

Items Opening balance Increase

Decrease Closing balanceReversal Write-off

Provision for bad debts 22,658,992.81 5,627,970.32 1,075,690.02 57,837.85 27,153,435.26Provision for decline in value of inventories 577,455,794.26 - - 71,466,971.76 505,988,822.50

Total 600,114,787.07 5,627,970.32 1,075,690.02 71,524,809.61 533,142,257.76

Note: The provision for bad debts increased by RMB137,039.27 due to the change in scope of consolidation.

16. OTHER NON-CURRENT ASSETS

Unit: RMB

Items Closing balance Opening balanceOther investments (Note) 14,400,000.00 14,900,000.00

Note: The carrying amount mainly represents prepayment for equity acquiries and entrust loans.


86

(VI) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued 17. SHORT-TERM BORROWINGS Categories of short-term borrowings:


Guaranteed loans (Note 1) 942,554,152.41 353,620,201.24Credit loans (Note 2) 4,033,813,229.14 2,382,690,700.07Total 4,976,367,381.55 2,736,310,901.31

Note 1: The loans were guaranteed by financial institutes. Note 2: The closing balance includes bank credit loans amounting to RMB533,813,229.14, trust loans

amounting to RMB3,000,000,000.00 and entrust loans amounting to RMB500,000,000.00. The opening balance includes bank credit loans amounting to RMB882,690,700.07, trust loans amounting to RMB1,000,000,000.00 and entrust loans amounting to RMB500,000,000.00.

18. NOTES PAYABLE


Commercial acceptances 106,456,261.57 314,972.18

Note: Notes payable amounting to RMB106,456,261.57 will mature in next accounting period. 19. ACCOUNTS PAYABLE (1) Details of the account payable are as followings:

Unit: RMB Items Closing balanceotes Opening balance

Buildings project and land value payable 7,678,804,721.36 10,081,654,234.82

(2) Accounts payable do not include accounts payable to shareholders of the Company that hold 5% or more than 5% of shares with voting power of the Company.

20. ADVANCES FROM CUSTOMERS Aging analysis of advance from customers is as followings:

Unit: RMB

Aging Closing balance Opening balance

Amount % Amount % Within 1 year 29,721,988,209.84 81.05 26,552,463,112.09 87.701 to 2 years 6,578,905,831.85 17.94 2,714,991,530.11 8.972 to 3 years 361,789,622.60 0.99 1,000,886,487.00 3.31Over 3 years 7,178,965.04 0.02 7,701,053.29 0.02Total 36,669,862,629.33 100.00 30,276,042,182.49 100.00


87


20. ADVANCES FROM CUSTOMERS - continued

Details of the receipts arising from pre-sale of major properties are as follows:

Unit: RMB

Name of project Opening balance Closing balance Estimated time of

completion Pre-sold

Proportion


432,422,220.00 672,357,170.50 2014.9 68.32%

Shenyang Boyue 570,373,778.88 983,003,438.88 2014.12 57.87%

Shanghai Green World 259,331,688.87 237,164,707.87 Completed 98.00%

Xiaoshan Tianyi Gemdale Cheng (Hangzhou Tianyi)

3,850,886,839.00 4,255,567,804.99 2014.12 57.16%

Shanghai Yihuanian 690,103,438.00 522,141,007.00 2015.12 44.06%

Nanjing Zizaicheng 2,235,634,621.18 2,544,867,285.18 2014.12 94.86%

Nanjing Mingyue 1,054,447,474.00 1,016,560,496.00 2014.12 66.52%

Shenzhen Mingfeng 1,173,175,174.56 1,438,547,181.56 2014.9 69.82%

Guangzhou Lihucheng 764,440,054.69 1,134,265,740.84 2014.12 29.53%

Dongguan Bodenghu 201,657,585.44 241,455,323.00 2015.6 94.68%

Dongguan Hushandajing 359,207,318.00 446,204,057.00 2014.12 38.96%

Yangzhou Yijing 817,296,099.10 318,951,499.14 2014.12 64.41%

Wuhan Mingjun 572,772,917.39 44,788,682.00 Completed 73.13%

Wuhan Lanfeixi Bank 294,010,788.00 522,792,814.00 2014.9 38.22%

Wuhan Sheng'aimilun 607,564,858.00 552,316,408.00 2014.8 97.48%

Wuhan Yijing 476,368,494.00 765,694,896.00 2014.12 72.60%

Beijing Langyue 1,685,769,012.00 1,794,954,676.00 2014.8 69.81%

Xi'an Hucheng Dajing 1,663,922,950.37 1,899,091,050.65 2014.12 73.62%

Xi'an Xifenggongyuan 511,591,053.00 614,281,604.00 2015.8 10.36%

Changsha Sanqianfu 243,101,100.00 265,448,202.00 2014.12 14.64%

Dalian Yunjin 609,701,529.80 681,578,694.00 2014.9 66.34%

Dalian Yijing 388,588,498.00 254,897,286.00 2014.9 52.53%

Cixi Hongyue 1,547,191,262.00 740,290,691.00 2014.10 59.38%

Shaoxing Zizaicheng 1,603,745,840.00 1,915,820,493.00 2014.12 40.22%

Shanghai Zizaicheng 1,532,758,641.00 2,579,831,129.00 2015.6 21.52%

Shenyang Binhe Left Bank 326,654,539.00 482,717,393.00 2014.12 45.90%

Xi'an Yanxiang Road Project 224,392,289.00 461,961,065.00 2014.12 28.39%

Beijing Green Green 2,185,525,334.00 2,967,004,840.00 2014.10 65.31%

Yuyao Lanyue 684,452,818.00 1,179,356,165.00 2014.12 77.47%

Tianjin Changhu Bay 298,125,728.00 453,177,822.00 2014.12 11.20%

Yantai Green World 243,423,602.00 491,765,890.00 2014.9 14.88%


88


20. ADVANCES FROM CUSTOMERS - continued

Details of the receipts arising from pre-sale of major properties are as follows: Unit: RMB

Name of project Opening balance Closing balance Estimated time of

completion Pre-sold

Proportion

Wuhan Green Dongjun 195,893,831.00 589,492,379.00 2015.3 19.42%

Changzhou Tianjiyuan 188,543,547.00 318,100,910.00 2014.12 22.11%

Yangzhou Jinghuacheng 152,333,898.00 304,301,817.00 2015.10 11.04%

Shenyang Jincheng - 291,009,664.00 2014.12 11.44%

Zhuhai Sciense Park 178,839,641.23 276,535,657.29 2014.11 59.10%

Zhuhai Green Chunxiao 122,791,351.00 273,450,788.20 2014.12 12.13%

Jinhua Huhaitang 100,388,079.00 249,270,562.00 2014.12 51.80%

21. EMPLOYEE BENEFITS PAYABLE

Unit: RMB

Items Opening balanceIncrease during

the current periodDecrease during

the current period Closing balanceI. Wages or salaries, bonuses, allowances, subsidies

568,183,115.84 506,589,529.32 864,358,423.10 210,414,222.06

II. Staff welfare 182,191.73 20,557,640.12 19,058,985.44 1,680,846.41III. Social security contributions 556,226.81 51,125,545.99 50,826,826.35 854,946.45Including: Premiums or

contributions on medical insurance

128,962.26 16,678,938.00 16,372,415.39 435,484.87

Basic pension insurance 212,189.88 30,995,239.22 30,866,928.08 340,501.02Annuity fee - 342,891.22 342,891.22 -Unemployment insurance 200,221.42 1,347,626.94 1,487,444.56 60,403.80Work injury insurance - 878,058.10 878,058.10 -Maternity insurance 14,853.25 882,792.51 879,089.00 18,556.76

IV. Housing funds 556,587.71 21,616,212.29 21,712,680.63 460,119.37V. Union running costs and employee education costs

79,296,688.60 17,764,527.10 11,154,674.42 85,906,541.28

VI. Non-monetary welfare - 15,470.00 15,470.00 -VII. Compensation to employees for termination

- 251,520.67 251,520.67 -

VIII. Others 4,883,116.70 311,807.89 - 5,194,924.59Total 653,657,927.39 618,232,253.38 967,378,580.61 304,511,600.16

22. TAX PAYABLE


Income tax 227,835,256.34 549,324,775.97VAT 1,350,118.42 3,051,016.48Business tax 10,115,897.56 39,538,778.04Land appreciation tax 24,277,228.12 16,965,597.97Property tax 2,074,007.93 1,975,607.11Others 11,021,000.90 54,404,306.43Total 276,673,509.27 665,260,082.00


89

23. INTEREST PAYABLE

Unit: RMB


Interest for long-term borrowings 27,221,376.28 15,803,701.87

Interest for Corporate Bonds (Note) 108,663,220.36 147,856,381.61

Interest for short-term borrowings 3,791,322.23 869,180.47

Other interests 9,017,818.54 6,532,625.06

Total 148,693,737.41 171,061,889.01

Note: This was the corresponding interest accrued for the outstanding Corporate Bonds of

RMB5,450,000,000.00 and USD350,000,000.00, please refer to Note (VI) 28 for details.


90


24. DIVIDENDS PAYABLE Unit: RMB

Name of the company Closing balance Opening balance The reason for unpayment

over one yearPublic shareholders 337,235,142.00 - Shanghai Mingqi Investment Co., Ltd. 36,850,000.00 36,850,000.00 Total 374,085,142.00 36,850,000.00

25. OTHER PAYABLES (1) Details of other payables are as follows:


Accrued land appreciation tax (Note) 2,041,186,441.62 2,470,516,489.64Current accounts 4,188,805,229.75 2,490,854,280.73Security deposit, cash pledge etc. 353,066,494.02 310,032,922.12Others 541,095,437.78 1,067,243,501.79Total 7,124,153,603.17 6,338,647,194.28

Note: The Company accrued land appreciation tax to profit or loss account according to “Notice on

relevant issues of Land Appreciation Tax Finalization Management for Real Estate Developing Enterprises” (filed as Guo Shui Fa [2006] No. 187) issued by State Administration of Taxation and other relevant regulations.

(2) Other payables do not include the amount due to shareholders of the Company which holds 5% or

more than 5% of the shares with voting right of the Company. (3) Details of significant other payables are as follows:

Unit: RMB Company name and item Closing balance Aging Nature

Shenzhen Songjiang Kangna Investment Co., Ltd.

471,591,070.81 within 1 year Borrowing from joint veuture to the Company


455,072,954.20 within 1 year Borrowing from joint veuture to the Company

Hangzhou Zhongtian Real Estate Development Co., Ltd.

371,766,308.56within 1 year

Borrowing from joint veuture to the Company

Yunnan Hengyu Real Estate Development Co., Ltd.

373,575,550.00 within 1 year Borrowing from minority shareholder to project company

Shanghai Jingshi Junpu Investment Center (Limited Partnership)


Cixi Hengyuan Xincheng Property Co., Ltd.


Hangzhou Wanhong Property Co., Ltd. 263,175,371.00 within 1 year Advances from joint venture to the Company

Shenzhen Yuansheng Development First Phase Equity Investment Ltd. (Limited Partnership)

239,557,228.77 1-2 years Borrowing from minority shareholder to project company

Tianjin Renai Co., Ltd. 202,781,000.00 Over 3 years Borrowing from minority shareholder to project company


91


26. NON-CURRENT LIABILITIES DUE WITHIN ONE YEAR

(1) Details of the non-current liabilities due without one year are as follows: Unit: RMB

Items Closing balance Opening balance Long-term borrowings due within one year 11,518,638,003.60 9,092,725,435.75

(2) Long-term borrowings due within one year A. Long-term borrowings due within one year


Guaranteed loans - 1,490,692,055.23Credit loans (Note 1) 11,518,638,003.60 7,602,033,380.52Total 11,518,638,003.60 9,092,725,435.75

Note 1: The closing balance of credit loans includes bank credit loans amounting to

RMB9,133,138,003.60 and trust loans amounting to RMB2,385,500,000.00. The opening balance of credit loans includes bank credit loans amounting to RMB5,966,433,380.52 and trust loans amounting to RMB1,635,600,000.00.

B. Top five amount of the long-term borrowings due within one year:

Unit: RMB

Credit institution Inception

date Maturity

date Currency Interest rate (%)

Closing balance Amount of

original currency Amount of

reporting currencyPingan Trust Co., Ltd. 2012-10-31 2014-10-31 RMB Agreement interest rate 997,000,000.00Xiamen International Trust Co., Ltd.

2013-6-27 2015-6-26 RMB Agreement interest rate 500,000,000.00

Wukuang International Trust Co., Ltd.

2011-9-22 2014-9-22 RMB Based on market interest

rate 499,500,000.00

China Construction Bank Shenzhen Chengjian Branch


rate 400,000,000.00



rate 375,000,000.00

Total 2,771,500,000.00


92


27. LONG-TERM BORROWINGS (1) Categories of long-term borrowings


Guaranteed loans (Note 1) 1,725,010,197.24 329,232,601.16Credit loans (Note 2) 18,178,248,915.81 16,633,864,918.48Total 19,903,259,113.05 16,963,097,519.64

The above loans carry interest rates ranging from 2.24% to 12.50% Note 1: The guaranteed loans were mainly guaranteed by financial institutes. Note 2: Closing balance of credit loans includes bank credit loans amounting to RMB15,064,248,915.81, trust loans amounting to RMB1,449,000,000.00, entrust loans amounting to RMB775,000,000.00 and financial leasing amounting to RMB890,000,000.00. Opening balance of credit loans includes bank credit loans amounting to RMB15,733,864,918.48 and trust loans amounting to RMB900,000,000.00.


93


27. LONG-TERM BORROWINGS - continued

(2) Top five amount of the long-term borrowings: Unit: RMB

Credit institution Inception date Maturity date Currency Interest rate (%)

Closing balance Opening balance Amount of original

currency Amount of

reporting currencyAmount of

original currencyAmount of

reporting currency

Jianxin Financial Leasing Co., Ltd. 2014-2-28 2017-3-21 RMB Agreement interest rate 890,000,000.00 -

Huafu Securities Co, Ltd. 2014-5-13 2016-5-13 RMB Agreement interest rate 775,000,000.00 -

Bank of Beijing Shenzhen Branch 2013-2-1 2015-11-28 RMB Based on market interest rate 600,000,000.00 600,000,000.00

Tibet Trust Co., Ltd. 2014-3-7 2016-3-7 RMB Agreement interest rate 547,000,000.00 -

Bank of Shanghai Shenzhen Branch 2013-8-27 2016-8-27 RMB Based on market interest rate 540,000,000.00 600,000,000.00

Total 3,352,000,000.00 1,200,000,000.00

28. BONDS PAYABLE

Unit: RMB

Category Par value Issue date Term of the

bond Issue amount Opening

interest payableAccrued interest for

current period Interest paid during

current period Closing interest

payable Closing balance RMB bonds issued in 2008 (Note 1) RMB1,200,000,000.00 2008-3-10 8 years RMB1,200,000,000.00 52,616,700.00 33,000,000.00 66,000,000.00 19,616,700.00 1,197,501,037.65

RMB bonds issued in 2012 (Note 2) RMB1,200,000,000.00 2012-7-26 3 years RMB1,200,000,000.00 45,750,000.65 54,899,993.47 55,652,400.00 44,997,594.12 1,194,211,485.50

USD bonds issued in 2012 (Note 3) USD350,000,000.00 2012-11-16 5 years USD350,000,000.00 19,005,180.53 59,245,913.64 62,326,608.09 15,924,486.08 1,733,805,322.11

RMB bonds issued in 2013 (Note 4) RMB2,000,000,000.00 2013-3-21 5 years RMB2,000,000,000.00 30,484,500.43 26,444,897.32 51,554,954.62 5,374,443.13 321,467,848.33

RMB bonds issued in 2014 (Note 5) RMB1,050,000,000.00 2014-3-4 5 years RMB1,050,000,000.00 - 22,749,997.03 - 22,749,997.03 1,030,715,762.71

Total 147,856,381.61 196,340,801.46 235,533,962.71 108,663,220.36 5,477,701,456.30


94

(VI) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – continued

28. BONDS PAYABLE - continued Note 1: Based on the approval "Zheng Jian Fa Xing Zi [2007] 457" issued by China Securities

Regulatory Commission, the Company issued 12,000,000 bonds on March 10, 2008 with par value of RMB100 and total amounting to RMB1,200,000,000.00 to open public investors through internet and to institutional investors through placement. The bonds have a term of 8 years with coupon rate of 5.5%, which will not change during the bond term. The interest was calculated as simple interest, and no compound interest was accrued. It was irrevocably guaranteed by China Construction Bank Shenzhen branch. The bonds were listed on March 20, 2008 on the Shanghai Stock Exchange. The proceeds of the bonds were used to repay commercial bank loans of RMB0.3 billion and to provide additional working capital to the Company.

Note 2: On July 26, 2012, The Company issued 1,200 bonds with par value RMB1,000,000.00 for

each and total amount of RMB1,200,000,000.00 to institutional investors through The Hongkong and Shanghai Banking Corporation Limited. The bonds have a term of 3 years with coupon interest rate of 9.15% which will not change during the bond term. The interest will be paid every six months based on simple interest and no compound interest will be charged. It was irrevocably guaranteed by Famous Commercial Co., Ltd. and other subsidiaries of the Company. The bonds were listed on Singapore Securities Exchange on July 26, 2012. The proceeds of the bonds were used to provide additional working capital to the Company.

Note 3: On November 16, 2012, The Company issued 1,750 bonds with par value USD200,000.00 for

each and total amount of USD350,000,000.00 to institutional investors through The Hongkong and Shanghai Banking Corporation Limited and JP Morgan Chase Bank Ltd.. The bonds have a term of 5 years with coupon interest rate of 7.125% which will not change during the bond term. The interest will be paid every six months based on simple interest and no compound interest will be charged. It was irrevocably guaranteed by Famous Commercial Co., Ltd. and other subsidiaries of the Company. The bonds were listed on Singapore Securities Exchange on November 16, 2012. The proceeds of the bonds were used to repay commercial bank loans and enhance financial structure of the Company. Gemdale International Investment Co., Ltd., a subsidiary of the Company, paid USD66,373,160.00 for early redemption of the bonds on 7 March, 2014.

Note 4: On March 21, 2013, The Company issued 2,000 bonds with par value RMB1,000,000.00 for

each and total amount of RMB2,000,000,000.00 to institutional investors through The Hongkong and Shanghai Banking Corporation Limited and Standard Chartered Bank (Hong Kong) Ltd.. The bonds have a term of 5 years with coupon interest rate of 5.625% which will not change during the bond term. The interest will be paid every six months based on simple interest and no compound interest will be charged. It was irrevocably guaranteed by Famous Commercial Co., Ltd. and other subsidiaries of the Company. The bonds were listed on Singapore Securities Exchange on March 21, 2013. The proceeds of the bonds were used to enhance financial structure of the Company. Gemdale (Asia) Holding Co., Ltd., a subsidiary of the Company, paid RMB1,692,871,100.00 for early redemption of the bonds on 7 March, 2014.


95


28. BONDS PAYABLE - continued Note 5: On March 21, 2013, The Company issued 1,050 bonds with par value RMB1,000,000.00 for

each and total amount of RMB1,050,000,000.00 to institutional investors through Standard Chartered Bank, China International Capital Corporation (Hong Kong), Credit Suisse, Development Bank of Singapore, Deutsche Bank, Hong Kong and Shanghai Banking Corporation and Industrial and Commercial Bankd of China (Asia). The bonds have a term of 3 years with coupon interest rate of 6.5% which will not change during the bond term. The interest will be paid every six months based on simple interest and no compound interest will be charged. It was irrevocably guaranteed by Famous Commercial Co., Ltd. and other subsidiaries of the Company. The bonds were listed on Singapore Securities Exchange on 4 March, 2014. The proceeds of the bonds were used to enhance financial structure of the Company.


96


29. SHARE CAPITAL Unit: RMB

Opening balance

Increase (Decrease)

Closing balance New issue of

shares Bonus issue

Capitalization of surplus reserves Others Total

The Current Period: I. .Restricted tradable shares

1.State-owned shares

- - - - - - -

2.State-owned legal person shares

- - - - - - -

3.Other domestic shares

- - - - - - -

4. Other foreign shares

- - - - - - -

5. Others - - - - - - -Total restricted tradable shares

- - - - - - -

II. Tradable shares 1.Ordinary shares denominated in RMB

4,471,508,572.00 - - - - - 4,471,508,572.00

2.Foreign capital shares listed domestically

- - - - - - -

3.Foreign capital shares listed overseas

- - - - - - -

4. Others - - - - - - -Total tradable shares

4,471,508,572.00 - - - - - 4,471,508,572.00

III. Total shares 4,471,508,572.00 - - - - - 4,471,508,572.00The Prior Period: I. .Restricted tradable shares

1.State-owned shares

- - - - - - -

2.State-owned legal person shares

- - - - - - -

3.Other domestic shares

- - - - - - -

4. Other foreign shares

- - - - - - -

5. Others - - - - - - -Total restricted tradable shares

- - - - - - -

II. Tradable shares 1.Ordinary shares denominated in RMB

4,471,508,572.00 - - - - - 4,471,508,572.00

2.Foreign capital shares listed domestically

- - - - - - -

3.Foreign capital shares listed overseas

- - - - - - -

4. Others - - - - - - -Total tradable shares

4,471,508,572.00 - - - - - 4,471,508,572.00

III. Total shares 4,471,508,572.00 - - - - - 4,471,508,572.00


97


30. CAPITAL RESERVE Unit: RMB

Items Opening balance Increase Decrease Closing balance The Current Period: Share premium 6,008,655,745.23 - - 6,008,655,745.23Including: Capital invested by investors 6,008,655,745.23 - - 6,008,655,745.23 Conversion option of convertible

corporate bonds is exercised - - - -

Debts converted to capital - - - - Differences arising from business

combination involving enterprises under common control

- - - -

Others - - - -Other comprehensive income (3,655,830.00) - 11,187,435.00 (14,843,265.00)Other capital reserves (345,839,861.47) 21,282,290.79 60,087,971.34 (384,645,542.02) Including: Equity component split from

convertible corporate bonds - - - -

Fair value of equity-settled share-paid equity instrument (Note 1)

339,516,820.05 21,282,290.79 - 360,799,110.84

Balance of removal subsidy from Government for public interest

- - - -

Transfer from capital reserve under the previous accounting system

- - - -

Others (Note 2) (685,356,681.52) - 60,087,971.34 (745,444,652.86)Total 5,659,160,053.76 21,282,290.79 71,275,406.34 5,609,166,938.21The Prior Period: Share premium 6,008,655,745.23 - - 6,008,655,745.23Including: Capital invested by investors 6,008,655,745.23 - - 6,008,655,745.23 Conversion option of convertible

corporate bonds is exercised - - - -

Debts converted to capital - - - - Differences arising from business

combination involving enterprises under common control

- - - -

Others - - - -Other comprehensive income - - - -Other capital reserves (19,080,680.65) 17,184,823.91 989,320.78 (2,885,177.52)Including: Equity component split from

convertible corporate bonds - - - -

Fair value of equity-settled share-paid equity instrument (Note 1)

287,161,675.96 17,184,823.91 - 304,346,499.87

Balance of removal subsidy from Government for public interest

- - - -

Transfer from capital reserve under the previous accounting system

- - - -

Others (306,242,356.61) - 989,320.78 (307,231,677.39)Total 5,989,575,064.58 17,184,823.91 989,320.78 6,005,770,567.71


98


30. CAPITAL RESERVE - continued Note 1: On 19 March 2010, the total 99,370,000 shares options have been approved and will be

granted to certain directors and senior managements of Gemdale as the Share Incentive Scheme. This option was in force for a term of seven years. Every selected member would receive 20% of the entitlement for every year from the first year to the fifth year.Every year, 20% of the subjected shares would be excisable from the first year to the fifth year and the option was available until the last trade day in the seventh year. According to the Black-Scholes Model, the fair value of the option as at the grant day was RMB5.26 per share. After the adoption of the proposals including transferring capital reserve into share capital and dividend distribution in 2010, the exercising price was RMB7.79 per share and the total option amount was 178,866,000 shares. Due to the resignation of some of the staffs, the corresponding share options lapsed, making the total option amount at period end was 111,276,000 shares. The Share Incentive Scheme leads to a decrease of RMB1,888,228.69 in net profit attributable to the owners of the Company for the period and an increase of RMB1,888,228.69 in capital reserve.

During the year, Gemdale Properties and Investment adopted a share option scheme

which has a term of 10 years from its adoption date. 154,230,000 shares options and 465,198,000 shares options had been approved respectively and were granted to certain directors and senior managements of Gemdale Properties and Investment. The exercise prices of the share options are HKD0.55 per share and HKD0.79 per share respectively. According to the The Binomial Model, the fair values of the option as at the grant day were HKD0.55 per share and HKD0.79 per share respectively and the total option amount was 619,428,000 shares at period end. The Share Incentive Scheme leads to a decrease of RMB19,394,062.10 in net profit attributable to the owners of the Company for the period and an increase of RMB19,394,062.10 in capital reserve.

Note 2: The change of this year was attributed to the acquisition of equity in subsidiaries held by

minority shareholders or disposals of equity in subsidiaries partly under the circumstances that the Company does not lose control of its subsidiaries.

31. SURPLUS RESERVE

Unit: RMB Items Opening balance Increase Decrease Closing balance

The Current Period:Statutory surplus reserve 1,118,431,192.59 - 508,311.53 1,117,922,881.06Discretionary surplus reserve 91,364,540.70 - - 91,364,540.70Reserve fund - - - -Venture expansion fund - - - -Others - - - -Total 1,209,795,733.29 - 508,311.53 1,209,287,421.76The Prior Period: Statutory surplus reserve 922,331,906.39 - - 922,331,906.39Discretionary surplus reserve 91,364,540.70 - - 91,364,540.70Reserve fund - - - -Venture expansion fund - - - -Others - - - -Total 1,013,696,447.09 - - 1,013,696,447.09


99


31. SURPLUS RESERVE - continued Statutory surplus reserve can be used to offset accumulated losses, to expand operations or to convert into capital of the Company. Surplus reserve decreased by RMB 508,311.53 for the current period due to the retrospective adjustment of subsequent measurement from cost method to equity method for disposals of subsidiaries.


100


32. UNAPPROPRIATED PROFITS Unit: RMB

Items Amount Appropriation

Proportion The Current Period: Before adjustment: Unappropriated profits at the end of 2013 17,243,968,733.11 Adjust: Total unappropriated profits at the beginning of 2014 (Note) 508,311.53 After adjustment: Unappropriated profits at the end of 2013 17,244,477,044.64 Add: Net profit attributes to the owners of the Company for the period 157,980,745.80 Less: Appropriation to statutory surplus reserve - 10%

Appropriation to discretionary surplus reserve - Appropriation to generic risk reserve - Common share payable - Common share converted to share capital - Dividends payable – last year's cash dividends approved in

shareholders' general meeting 715,441,371.52

Unappropriated profits at June 30, 2014 16,687,016,418.92 The Prior Period (Restated): Before adjustment: Unappropriated profits at the end of 2012 11,700,162,137.06 Adjust: Total unappropriated profits at the beginning of 2013 2,461,408,561.68 After adjustment: Unappropriated profits at the end of 2012 14,161,570,698.74 Add: Net profit attributes to the owners of the Company for the period 324,175,144.32 Less: Appropriation to statutory surplus reserve - 10%

Appropriation to discretionary surplus reserve - Appropriation to generic risk reserve - Common share payable - Common share converted to share capital - Dividends payable – last year's cash dividends approved in

shareholders' general meeting 357,720,685.76

Unappropriated profits at June 30, 2013 14,119,244,474.43

(1) Cash dividends approved in the shareholders' meeting during the period On May 29, 2014, 2013 shareholders' general meeting approved to distribute cash dividend of RMB1.6 for every ten shares (tax inclusive) based on 4,471,508,572 shares (par value of RMB1.00 per share) in issue to all shareholders. Note: Opening balance of unappropriated profits increased by RMB508,311.53 due to the change of subsequent measurement from cost method to equity method for disposals of subsidiaries.


101


33. OPERATING INCOME AND OPERATING COSTS

(1) Operating income Unit: RMB

Items The Current Period The Prior Period (Restated)

Principal operating activities income 9,080,946,513.18 8,790,002,021.37Other operating activities income 2,924,829.07 4,929,766.32Operating costs 6,957,962,974.95 6,313,301,446.01

(2) Principal operating activities (by industries)

Unit: RMB

Name of industries The Current Period The Prior Period

Operating income Operating costs Operating income Operating costs Sales of properties 8,340,306,216.44 6,559,812,383.36 8,233,991,628.38 5,997,537,693.87Property lease 254,702,233.93 982,575.55 215,856,670.93 1,150,276.45Property management 414,467,257.33 378,879,706.20 314,917,711.76 292,051,113.12Others 71,470,805.48 18,257,393.95 25,236,010.30 19,385,730.58Total 9,080,946,513.18 6,957,932,059.06 8,790,002,021.37 6,310,124,814.02

(3) The turnover of the top 5 customers The aggregate amount of operating income from the top five customers was RMB105,850,000.00 (the prior period: RMB181,020,000.00), which accounts for 1.17% (the prior period: 2.06%) of the total operating income.

34. TAX AND SURCHARGES ON OPERATIONS

Unit: RMB Items The Current Period The Prior Period Tax Rate

Business tax 463,452,471.43 449,322,259.04 Note Urban construction and maintenance tax 28,736,288.15 27,933,276.02 Note Education surcharge 14,097,199.88 14,416,841.69 Note Land appreciation tax 132,097,934.85 145,149,300.10 Note Others 19,236,122.83 15,016,141.98 Total 657,620,017.14 651,837,818.83

Note: Details are shown in Note (IV).


102


35. SELLING AND DISTRIBUTION EXPENSES Unit: RMB

Items The Current Period The Prior Period Payroll and salaries 24,633,907.79 18,686,968.02Printing and office supply fee 5,189,515.03 6,643,916.40Activities and business entertainment fee 3,435,503.94 4,480,147.59Property related fee 3,863,813.89 2,823,902.85Marketing service fee 363,557,305.01 348,565,203.97Others 2,570,475.04 39,897.74Total 403,250,520.70 381,240,036.57

36. ADMINISTRATIVE EXPENSES

Unit: RMB Items The Current Period The Prior Period

Payroll and salaries 272,058,720.63 191,560,436.10 Printing and office supply fee 38,580,248.30 34,156,366.14 Activities and business entertainment fee 78,332,644.14 63,081,746.52 Property related fee 69,787,443.47 82,577,970.29 Corporate culture fee 20,309,387.60 16,250,038.72 The board meeting fee 6,017,539.77 5,859,215.22 Others 560,928.53 537,864.72 Total 485,646,912.44 394,023,637.71

37. FINANCIAL EXPENSES


Interest expenses 1,389,644,425.29 1,108,472,140.13Less: Capitalized interest expenses 959,786,324.90 826,188,661.61Less: Interest income 302,664,900.44 196,730,905.51Exchange differences (19,048,777.92) 31,720,566.36 Less: Capitalized exchange differences - -Others 48,367,618.01 34,957,310.91 Total 156,512,040.04 152,230,450.28


103

(VI) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued 38. IMPAIRMENT LOSS IN RESPECT OF ASSETS


I. Bad debt losses 4,415,241.03 2,998,391.41II. Write-down of inventories - 97,409,519.17III. Impairment on available-for-sale financial assets

- -

IV. Impairment on held-to-maturity investments - -V. Impairment on long-term equity investments - -VI. Impairment on investment properties - -VII. Impairment on fixed assets - -VIII. Impairment on construction materials - -IX. Impairment on construction in progress - -X. Impairment on bearer biological assets - -XI. Impairment on oil and natural gas assets - -XII. Impairment on intangible assets - -XIII. Impairment on goodwill - -Total 4,415,241.03 100,407,910.58

39. INVESTMENT INCOME (1) Details of the investment income are as followings:

Unit: RMB Items The Current

Period The Prior Period

(Restated) Income from long-term equity investment income recognised under cost method

- -

Income from long-term equity investment income recognised under equity method

(70,350,617.47) (17,712,463.82)

Income on disposal of long-term equity investments 38,162,596.51 81,060.15Income from held-for-trading financial assets - -Income from held-to-maturity investments - -Income from available-for-sale financial assets - -Income on disposal of held-for-trading financial assets - -Income on disposal of held-to-maturity investments - -Income on disposal of available-for-sale financial assets - -Other investment income (Note) 25,360,337.12 26,564,261.32Total (6,827,683.84) 8,932,857.65

Note: Other investment income for the current period includes investment income from fund

products based on agreement interest rate amounting to RMB25,257,164.58. Investment income from financial products was amounting to RMB103,172.54.


104

(VI) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued 39. INVESTMENT INCOME - continued (2) Gains on long-term equity investment income recognised under equity method:

Unit: RMB

Investee companies The Current

Period The Prior Period

(Restated) Shanghai Pufa Gemdale Real Estate Development Co., Ltd. 5,892,945.75 2,249,301.01 Shanghai Rongtian Real Estate Development Co., Ltd. (4,398,720.48) (287,850.50)Shenyang Gemdale Jincheng Real Estate Development Co., Ltd. (5,776,217.42) (151,916.15)Hangzhou Gemdale Zhongtian Real Estate Development Co., Ltd. (2,004,851.52) -Nanjing Jinjun Real Estate Development Co., Ltd. (2,371,876.64) -Shenzhen Gemdale Longcheng Real Estate Development Co., Ltd. (7,098,627.42) -Gemdale Dabaihui (21,626,694.18) (17,307,937.44)UBS/Gemdale China Real Estate Fund I, L.P. (463,118.67) (54,691.81)UBS/Gemdale Investment Management Limited 948,670.20 2,803,119.39 Tianjin Heshi Real Estate Development Co., Ltd. (3,441,487.78) (661,044.30)Hangzhou Wanhong Property Co., Ltd. (5,676,556.42) (422,005.20)Hangzhou Wanye Property Co., Ltd. (198,499.05) -Beijing Jinshui Xingye Real Estate Development Co., Ltd. (6,471,410.30) -Ningbo Langyue Real Estate Development Co., Ltd. (3,628,873.81) (270,141.70)Beijing Jinshui Real Estate Development Co., Ltd. (6,938,482.01) (489,804.97)Wuxi Poly Zhiyuan Real Estate Development Co., Ltd. (3,022,165.59) (90,042.06)Dongguan Xiangdi Yajing Garden Construction Co., Ltd. (225,165.70) -Dongguan Aolinwei Real Estate Development Co., Ltd. (108,434.70) -Gemdale Corporation Jinhua Zhongda Real Estate Development Co., Ltd. (183,427.01) -Wuhan Dian Juntai Real Estate Development Co., Ltd. (2,107,211.60) -Shenzhen Songjiangkangna Investment Co., Ltd. - (1,094,019.52)Shenzhen Yuansheng Development Phase 1 Equity Investment Ltd. (Limited Partnership)

- (2,965,605.24)

Shanghai Shengshi Investment Management Co., Ltd. - 1,030,174.67 Gemdale JV Bush-Pine Real Estate Development Company LLC (1,450,413.12) -Total (70,350,617.47) (17,712,463.82)

There is no significant restriction on the remittance of the above investment income.


105


40. NON-OPERATING INCOME

(1) Details of the non-operating income are as followings:

Unit: RMB

Items The Current

Period The Prior

Period

Amounts included in non-recurring profit or loss of current period

Total gains on disposal of non-current assets 74,546.32 57,692.03 74,546.32Including: Gains on disposal of fixed assets 74,546.32 57,692.03 74,546.32 Gains on disposal of intangible assets - - -Gains on debt restructuring - - -Gains on exchange of non-monetary assets - - -Donations - - -Government grants 18,922,875.54 18,204,181.60 18,922,875.54Penalty income 9,147,270.71 3,444,490.03 9,147,270.71Negative goodwill - - -Others 3,102,841.16 2,516,552.49 3,102,841.16Total 31,247,533.73 24,222,916.15 31,247,533.73

(2) Details of the government grants are as followings:

Unit: RMB Items The Current Period The Prior Period Remarks

Financial awards (Note) 18,922,875.54 18,204,181.60 Income related

Note: Financial awards represent the enterprise development awards provided by local government.


106


41. NON-OPERATING EXPENSES Unit: RMB

Items The Current

Period The Prior

Period

Amounts included in

non-recurring profit or loss of current period

Total losses on disposal of non-current assets 145,197.59 46,069.43 145,197.59Including: Losses on disposal of fixed assets 145,197.59 46,069.43 145,197.59 Losses on disposal of intangible assets - - -Losses on debt restructuring - - -Losses on exchange of non-monetary assets - - -Donations 4,760,599.99 2,852,000.00 4,760,599.99Penalty expenses 1,554,124.11 146,817.46 1,554,124.11Compensation payments 12,937,167.85 10,307,668.70 12,937,167.85Others 1,673,930.17 902,402.59 1,673,930.17Total 21,071,019.71 14,254,958.18 21,071,019.71

42. INCOME TAX EXPENSES

Unit: RMB Items

The Current Period The Prior

Period(Restated) Current income tax expense calculated based on law of tax and relevant rules

240,432,562.51 226,755,718.36

Adjusted deferred tax expense (31,919,864.96) 119,933,451.89 Total 208,512,697.55 346,689,170.25 Reconciliation of income tax expense from the accounting profit is as follows:

Unit: RMB


Period(Restated)

Accounting profit 421,812,466.13 835,425,774.78

Income tax expense calculated at 25% (the prior period: 25%) 105,453,116.53

205,197,825.83

Tax effect of undeductible expenses for tax purposes 178,552,320.73 161,734,597.88 Tax effect of non-taxable income (20,649,089.35) 2,619,996.97Effect of unrecognised deductible losses and deductible temporary differences for tax purposes (50,102,043.15)

(10,950,529.66)

Effect of using previously unrecognised deductible losses and deductible temporary differences for tax purposes

1,490,503.45 -

Changes in opening balances of deferred tax assets/liabilities due to the adjustment in tax rate

- -

Effect of different tax rates of subsidiaries operating in other jurisdictions

(6,232,110.66) (11,912,720.77)

Effect of tax adjustment in prior years - -Income tax expense 208,512,697.55 346,689,170.25


107


43. THE CALCULATION PROCESS OF THE BASIC EARNINGS PER SHARE AND DILUTED EARNINGS PER SHARE

For the purpose of calculating basic earnings per share, the net profit for the current period attributable to ordinary shareholders was as follows:

Unit: RMB


Period(Restated) Net profit for the current period attributable to ordinary shareholders

157,980,745.80 315,394,461.45

Including: Net profit attributes to continuous operation 157,980,745.80 315,394,461.45 Net profit attributes to discontinuing operation - -

For the purpose of calculating basic earnings per share, the denominator is determined by the weighted average number of outstanding ordinary shares and the calculation process is as follows:

Unit: Number of shares

The Current Period The Prior Period

Number of ordinary shares outstanding at the beginning of period 4,471,508,572 4,471,508,572

Add: Weighted average number of ordinary shares issued during the period

- -

Less: Weighted average number of ordinary shares repurchased during the period

- -

Weighted average number of ordinary shares 4,471,508,572 4,471,508,572

Earnings per share

Unit: RMB The Current Period The Prior Period

Calculation on the basis of Net profit attributable to shareholders:

Earnings per share 0.04 0.07Calculation on the basis of Net continuous operating profit attributable to shareholders:

Earnings per share 0.04 0.07Calculation on the basis of Net discontinuous operating profit attributable to shareholders:

Earnings per share - -


108


44. OTHER COMPREHENSIVE INCOME Unit: RMB

Items The Current Period The Prior Period 1.Gain or loss from Held-for-trading financial assets (11,187,435.00) - Less: Tax effect of Held-for-trading financial assets - -

Those previously recorded in Other comprehensive income but transferred to current period's profit or loss account

- -

Subtotal (11,187,435.00) -2.Proportional share in investee's Other comprehensive income, under equity method

- -

Less: Tax effect of proportional share in investee's Other comprehensive income, under equity method

- -

Those previously recorded in Other comprehensive income but transferred to current period's profit or loss account

- -

Subtotal - -3.Gain or loss from Cash flow hedging instruments - - Less: Tax effect of Cash flow hedging instruments - - Those previously recorded in Other comprehensive income but transferred to current period's profit or loss account

- -

Adjustment to amounts of hedged items at initial recognition

- -

Subtotal - -4. Translation differences arising on translation of financial statements denominated in foreign currencies (88,652,758.70) 72,284,371.17

Less: Those transferred to current period's profit or loss account for those disposed overseas operations

- -

Subtotal (88,652,758.70) 72,284,371.175.Others - - Less: Tax effect of others in Other comprehensive income - - Those previously recorded in Other comprehensive income but transferred to current period's profit or loss account

- -

Sub-total - -Total (99,840,193.70) 72,284,371.17

45. NOTES TO CASH FLOW STATEMENTS (1) Other cash received relating to operating activities


Current Accounts 1,330,059,838.26 106,075,000.00

Temporary receipt of maintenance funds 2,959,152.62 20,416,616.44

Interest income on bank deposits 111,452,504.87 132,886,821.83

Deposits pledged for mortgages and other deposits 399,869,749.67 139,118,732.59

Revenue from penalty and breached contracts 3,075,549.18 2,152,578.58

Government grants 18,867,343.41 18,204,181.60

Others 20,693,064.54 19,307,051.38

Total 1,886,977,202.55 438,160,982.42


109


45. NOTES TO CASH FLOW STATEMENTS - continued

(2) Other cash payments relating to operating activities Unit: RMB

Items The Current Period The Prior Period Current Accounts 2,625,198,176.27 6,074,804,216.98Cash paid for general and administrative expenses 226,639,674.86 168,929,970.89Cash paid for operating expenses 415,983,978.01 389,952,263.14Payments of deposits and maintenance funds 206,431,414.89 1,708,590,338.93Advances to employees 38,588,111.45 47,651,444.44Donations 4,760,599.99 4,850,000.00Reimbursed expenses 76,707,284.36 24,143,429.19Payments for penalty and breached contracts 1,554,124.11 146,817.46Compensation 12,937,167.85 10,307,668.70Handling charges 1,338,346.19 3,450,221.90Others 14,073,681.05 16,694,746.47Total 3,624,212,559.03 8,449,521,118.10 (3) Other cash payments relating to investment activities

Items The Current Period The Prior Period Net cash payments relating to disposal of subsidiaries and other business units(Note)

34,187,844.57 -

Note: Please refer to Notes VI 46 (2)

(4) Other cash received relating to financing activities

Items The Current Period The Prior Period Withdrawal of deposits in other currency funds 909,995,705.29 80,364,626.54

(5) Other cash payments relating to financing activities


Payment of financial consultancy fees, guarantee fees etc. 83,423,766.30 57,466,318.40


110


46. SUPPLEMENTARY INFORMATION TO CASH FLOW STATEMENTS (1) Supplementary information to cash flow statements

Unit: RMB Supplementary information The Current Period The Prior

Period(Restated) 1．Reconciliation of net profit to cash flows from operating

activities: Net profit 213,299,768.58 474,102,133.08

Add: Provision for asset impairment 4,415,241.03 100,407,910.58

Depreciation of fixed assets, oil and gas assets, bearer biological assets and investment properties

23,836,123.07 21,919,065.46

Amortization of intangible assets - -

Depreciation of investment properties - -

Amortization of long-term prepaid expenses 3,864,172.50 3,515,648.74 Loss on disposal of fixed assets, intangible assets

and other long-term assets (less gains) 67,537.37 (11,622.60)

Write-off of fixed assets (less gains) - - Losses on changes in fair values (less gains) - - Financial expenses (less gains) 375,831,412.01 291,578,100.03

Losses arising from investments (less gains) 6,827,683.84 (8,932,857.65)

Decrease in deferred tax assets (less increase) (63,472,001.56) 118,023,758.35

Increase in deferred tax liabilities (less decrease) 31,552,136.60 12,750,451.06

Decrease in inventories (less gains) (4,945,983,645.17) (3,407,521,294.05)

Decrease in operating receivables (less gains) (4,547,811,142.17) (10,952,481,931.63)

Increase in operating payables (less decrease) 4,459,752,722.10 5,483,466,090.27

Others - - Net cash flow from operating activities (4,437,819,991.80) (7,863,184,548.36)

2．Significant investing and financing activities that do not involve cash receipts and payments:

- -

Conversion of debt into capital - -Convertible bonds due within one year - -Fixed assets acquired under finance leases - -

3．Net changes in cash and cash equivalents: - -Closing balance of cash 16,513,392,018.02 16,287,517,068.48

Less: Opening balance of cash 16,901,051,824.53 19,204,139,167.03

Add: Closing balance of cash equivalents - -Less: Opening balance of cash equivalents - -Net increase in cash and cash equivalents (387,659,806.51) (2,916,622,098.55)


111


46. SUPPLEMENTARY INFORMATION TO CASH FLOW STATEMENTS - continued

(2) Acquisition or disposal of subsidiaries or businesses during the period Unit: RMB

Item Amount for the

current year Amount for the prior

year I. Information about acquisition of subsidiaries and business units

1. Acquisition price of subsidiaries and business units - -

2. Cash and cash equivalents paid to acquire subsidiaries and business units

- -

Less: Cash and cash equivalents held by subsidiaries and business units

- -

3. Net cash outflow on acquisition of subsidiaries and business units

- -

4. Net assets of the acquired subsidiaries - -

Current assets - -

Non-current assets - -

Current liabilities - -

Non-current liabilities - -

II. Information about disposal of subsidiaries and businesses - -

1. Disposal price of subsidiaries and business units - -

2. Cash and cash equivalents received from disposal of subsidiaries and business units

- -

Less: Cash and cash equivalents held by subsidiaries and business units 34,187,844.57 -

3. Net cash inflow on disposal of subsidiaries and business units (34,187,844.57) -

4. Net assets of the disposed subsidiaries 258,832,198.72 -

Current assets 4,114,551,852.32 -

Non-current assets 12,769,061.43 -

Current liabilities 3,868,488,715.03 -

Non-current liabilities - -

(3) CASH AND CASH EQUIVALENTS


(1) Cash 16,513,392,018.02 16,901,051,824.53

Including: Cash on hand 3,932,985.68 3,643,763.42 Bank demand deposits 16,509,459,032.34 16,897,408,061.11

Other monetary funds that can be readily withdrawn on demand

- -

Governable deposits in Central Bank - - Deposit from other banks - - Loan from other banks - -(2) Cash equivalents - - Including: Investment in debt securities due within three

months - -

(3) Cash and cash equivalents balances 16,513,392,018.02 16,901,051,824.53


112

(VII) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS

1. DETAILS OF THE PARENT COMPANY OF THE COMPANY The Company had no parent company. 2. DETAILS OF THE SUBSIDIARIES OF THE COMPANY The details of the subsidiaries of the Company are shown in Note (V). 3. DETAILS OF THE ASSOCIATES AND JOINT VENTURES OF THE COMPANY The details of the associates and jointly ventures of the Company are shown in Note VI (8) and VI (9). 4. DETAILS OF OTHE RELATED PARTIES OF THE COMPANY

Names of other related parties Relationship between other related

parties and the Company Company code Directors, general managers and vice general managers, etc.

Key management personnel Not applicable


113

(VII) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued

5. DETAILS OF RELATED PARTY TRANSACTIONS (1) Sales and purchase of goods, provision and receipt of services

Unit: RMB

Related party

Details of related party transaction

Pricing and decision-making

procedures of related party transactions

Amount for the current year Amount for the prior year

Amount

Proportion of the

amount of related party

transactions to that of similar

transactions (%)

Amount

Proportion of the

amount of related party

transactions to that of similar

transactions(%)

Nanjing Jinjun Real Estate Development Co.Ltd.

Consulting Service

Implement according to agreement

12,760,274.14 66.45 - -


Consulting Service


1,783,207.54 9.29 - -


Consulting Service


2,605,660.38 13.57 - -

Dongguan Xiangdi Yajing Garden Construction Co., Ltd.

Consulting Service


2,052,427.18 10.69 - -

Shenzhen Songjiang Kangna Investment Co.,Ltd.

Leasing Service


644,400.00 100 - -

(2) Borrowings and lendings of funds

Lendings of funds：


114


5. DETAILS OF RELATED PARTY TRANSACTIONS – continued Borrowings and lendings of funds– continued

Related party Opening balanceAmount incurred in

the current year Amount repaid in the

current year Closing balance

Beijing Jinshui Real Estate Development Co., Ltd. 2,075,492,271.34 226,349,238.49 516,285,750.51 1,785,555,759.32

Gemdale Dabaihui 1,182,800,000.00 929,226,178.38 1,697,270,392.96 414,755,785.42

Nanjing Jinjun Real Estate Development Co., Ltd. 533,569,539.58 130,724,152.63 85,154,567.26 579,139,124.95

Beijing Jinshui Xingye Real Estate Development Co., Ltd. 470,662,562.50 12,580,166.66 170,662,562.50 312,580,166.66

Shanghai Rongtian Real Estate Development Co., Ltd. 269,954,300.58 5,652,526.51 269,925,531.92 5,681,295.17

Tianjin Heshi Real Estate Development Limited. 215,000,000.00 6,394,896.36 66,386,083.36 155,008,813.00

Dalian Dalianwan Jinyi Investment Co., Ltd. 230,663,805.07 9,175,043.00 - 239,838,848.07

Wuxi Baoli Zhiyuan Real Estate Development Co., Ltd. 280,915,608.35 4,122,903.92 242,550,000.00 42,488,512.27

Ningbo Langyue Real Estate Development Co., Ltd. 539,713,998.56 13,847,684.29 165,000,000.00 388,561,682.85

Dongguan Xiangdi Yajing Garden Construction Co., Ltd. 752,000,000.00 15,407,277.48 15,407,277.48 752,000,000.00

Wuhan Dian Juntai Real Estate Development Co., Ltd. 1,495,370,860.00 1,154,203,488.00 1,665,600,000.00 983,974,348.00


-310,518,676.20

- 310,518,676.20

Shenzhen Songjiang Kangna Investment Co., Ltd. 10,369,351.00 - - 10,369,351.00

Dongguan Aolinwei Real Estate Development Co., Ltd. - 202,893,150.68 202,893,150.68 -

Amount incurred accumulatively in the current period includes interest income of RMB172,261,641.91 arising from lending of funds to related parties (the prior period: RMB 58,359,853.95). Borrowings of funds:

Unit: RMB

Name of related party Opening balanceAmount incurred in

the current year Amount repaid in the current year Closing balance


530,902,562.36 325,418,236.59 484,554,490.39 371,766,308.56

Nanjing Jinjun Real Estate Development Co., Ltd. 9,503,561.28 216,089,671.69 216,775,787.06 8,817,445.91


- 90,000,000.00 5,000,000.00 85,000,000.00


253,076,308.05 201,996,646.15 - 455,072,954.20

Shenzhen Songjiang Kangna Investment Co., Ltd. 734,120.55 470,856,950.26 - 471,591,070.81

Amount incurred accumulatively in the current period includes interest expenses of RMB153,185.45arising from borrowing of funds from related parties (the prior period: None).

(3) Related parities' guarantee

Unit: RMB’0000

Warrantor Warrantee Guaranteed

amount Starting date of

guarantee Due date of guarantee

Guarantee terminated or not

The Company Gemdale Dabaihui 22,750.00 2012.5.31 2014.5.30 Yes The Company Gemdale Dabaihui 5,250.00 2012.6.1 2014.5.30 Yes The Company Gemdale Dabaihui 50,000.00 2014.1.13 2019.1.13 No The Company Gemdale Dabaihui 72,500.00 2014.1.13 2019.1.13 No The Company Gemdale Dabaihui 17,500.00 2014.6.18 2019.5.30 No


115


5. DETAILS OF RELATED PARTY TRANSACTIONS – continued (3) Related parities' guarantee – continued Note: Gemdale Dabaihui, an associate of the Company, was engaged in the development of

Shenzhen Gangxia Old City Reconstruction Project. The Company's subsidiary SZ Gemdale Old City Reconstruction Co., Ltd. holds 35% of the share of Gemdale Dabaihui

The Company provides direct interest-bearing loan or loan guarantee (provided the accumulated amounts of these two types of support within the limit of RMB600,000,000.00) to Gemdale Dabaihui, all of its shareholders simultaneously provide direct interest-bearing loan or loan guarantee in proportion of their shareholdings in Gemdale Dabaihui This proposal has been approved both in the Board of Directors' Meeting held on April 8, 2009 and in the shareholders' meeting held on April 24, 2009. In order to provide continuous support to the development of Shenzhen Gangxia Old City Reconstruction Project, SZ Gemdale Old City Reconstruction Co., Ltd. further increased direct interest-bearing loan and loan guarantee, provided the accumulated increase of these two types of support within the limit of RMB1,400,000,000.00. The Company and all the shareholders of Gemdale Dabaihui simultaneously provide direct interest-bearing loan or loan guarantee in proportion of their shareholdings.This proposal has been approved both in the Board of Directors held on April 26, 2012 and in the shareholders’ meeting held on May 22, 2012. SZ Gemdale Old City Reconstruction Co., Ltd. further increased direct interest-bearing loan and loan guarantee, provided the increase of these two types of support within the limit of RMB2,300,000,000.00 and the accumulated amount of these two types of support within the limit of RMB4,300,000,000.00. The Company and all the shareholders of Gemdale Dabaihui simultaneously provide direct interest-bearing loan or loan guarantee in proportion of their shareholdings.This proposal has been approved in the Board of Directors held on April 25, 2014. Up to June 30, 2014, the Company has provided Joint-liability loan guarantee of RMB140,000,000.00 to Gemdale Dabaihui, while Shenzhen Junwei Property Co., Ltd., the Minority Interest in SZ Gemdale Old City Reconstruction Co., Ltd., has provided counter-guarantee to the Company through the mortgage of its 40% of shares in SZ Gemdale Old City Reconstruction Co., Ltd.


116


6. Amounts due to/due from related parties Unit: RMB

Item Related parties Closing balance Opening balanceOther Receivables Dalian Dalianwan Jinyi Investment Co., Ltd. 239,838,848.07 230,663,805.07

Other Receivables Gemdale Dabaihui 414,755,785.42 1,182,800,000.00

Other Receivables Dongguan Aolinwei Real Estate Development Co., Ltd. 150,156,088.00 -

Other Receivables Dongguan Xiangdi Yajing Garden Construction Co., Ltd. 774,406,384.93 752,000,000.00

Other Receivables Beijing Jinshui Real Estate Development Co., Ltd. 1,785,555,759.32 2,075,492,271.34

Other Receivables Beijing Jinshui Xingye Real Estate Development Co., Ltd. 312,580,166.66 470,662,562.50

Other Receivables Tianjin Heshi Real Estate Development Limited. 155,008,813.00 215,000,000.00

Other Receivables Ningbo Langyue Real Estate Development Co., Ltd. 388,561,682.85 539,713,998.56

Other Receivables Wuhan Dian Juntai Real Estate Development Co., Ltd. 983,974,348.00 -

Other Receivables Gemdale Corporation Jinhua Zhongda Real Estate Development Co., Ltd.

310,518,676.20 -

Other Receivables Nanjing Jinjun Real Estate Development Co., Ltd. 586,555,806.31 533,569,539.58

Other Receivables Shanghai Rongtian Real Estate Development Co., Ltd. 5,681,295.17 269,954,300.58

Other Receivables Shenzhen Songjiang Kangna Investment Co., Ltd. 10,369,351.00 10,369,351.00

Other Receivables Wuxi Baoli Zhiyuan Real Estate Development Co., Ltd. 42,488,512.27 280,915,608.35

Other Receivables Ruijin Fangrong (Beijing) Investment Consulting Co., Ltd. 82,071.00 82,071.00

Other Receivables Hangzhou Wanye Property Co., Ltd. 170,086,400.00 -

Other Payables Hangzhou Gemdale Zhongtian Real Estate Development Co., Ltd.

371,766,308.56 530,902,562.36

Other Payables Shenzhen Gemdale Longcheng Real Estate Development Co., Ltd.

455,072,954.20 253,076,308.05

Other Payables Shenzhen Songjiang Kangna Investment Co., Ltd. 471,591,070.81 734,120.55


117

(VIII) SHARE-BASED PAYMENTS

1. SHARE-BASED PAYMENTS OF THE COMPANY

(1) Summary of share-based payments Unit: RMB

Amount for the current year Amount for the prior year Total amounts of the Company's equity instruments granted during the period - -Total amounts of the Company's equity instruments vested during the period - -Total amounts of the Company's equity instruments lapsed during the period 7,902,000 4,140,000Total amounts of equity instruments outstanding at the end of the period

111,276,000 123,786,000

Total amounts of equity instruments exercisable at the end of the period

44,510,400 49,514,400

Range of exercise price and remaining contractual life of the Company's share options outstanding at the end of the period

The exercise price is RMB7.42nd the share options are effective for a period of 7 years from grant day. The remaining contractual life is 2.75 years at current year end.

The exercise price is RMB7.58 and the share options are effective for a period of 7 years from grant day. The remaining contractual life is 3.75 years at current year end.

Range of exercise price and remaining contractual life of the Company's other equity instruments outstanding at the end of the period

- -

Description of share-based payments: Range of exercise price and remaining life of each type of equity instrument outstanding at the end of the year related to share-based payments

Share-based payment plan Equity instrument Range of exercise price Remaining contractual life A share options plan of Gemdale Corporation Share options RMB7.42

The share options are effective for a period of 7 years from grant day. The remaining contractual life is 2.75 years at current year end.

(2) Equity-settled share-based payments

Unit: RMB Current year Prior year The method of determining the fair value of equity instruments at the grant date

Note Note

The method of determining the best estimate of the number of equity instruments expected to be vested

At each balance sheet date during the vesting period, the Company makes the best estimate according to the subsequent latest information of change in the number of employees who are granted with options that may vest, etc. and revises the number of equity instruments expected to vest.

Reasons for the significant difference between the estimate in the current period and that in the prior period

Nil Nil

Amounts of equity-settled share-based payments accumulated in capital reserve

306,025,182.39 304,346,499.87

Total expenses recognised arising from equity-settled share-based payments

4,020,676.89 18,636,560.57


118

(VIII) SHARE-BASED PAYMENTS - continued

1. SHARE-BASED PAYMENTS OF THE COMPANY - continued (2) Equity-settled share-based payments - continued Note: The method of determining the fair value of equity instruments: Fair values are calculated by using Black-Scholes Model and the inputs to the model are as follows:

Unit: RMB 2010Weighted average share price 13.96Weighted average exercise price 14.12Expected volatility 42.32%Expected life 5 yearsRisk-free interest rate 2.6968%Expected dividend yield 0.75%

Expected volatility is calculated based on the volatility of the Company's share prices during the past five years. Expected life used in the model is based on the best estimate of management after the adjustments of the effects of inconvertibility, exercise restriction and exercise pattern. 2. SHARE-BASED PAYMENTS OF GEMDALE PROPERTIES AND INVESTMENT,

SUBSIDIARY OF THE COMPANY

(1) Summary of share-based payments Unit: RMB

The Current Period The Prior Period Total amounts of the Company's equity instruments granted during the period

- 619,428,000

Total amounts of the Company's equity instruments vested during the period

- -

Total amounts of the Company's equity instruments lapsed during the period

2,395,000 -

Total amounts of equity instruments outstanding at the end of the period

- -

Total amounts of equity instruments exercisable at the end of the period

617,033,000 619,428,000

Range of exercise price and remaining contractual life of the Company's share options outstanding at the end of the period

The exercise price is HKD 0.55 and HKD 0.79 ,and the share options are effective for a period of 10 years from grant day. The remaining contractual life is 8.5-9 years at current period end.

The exercise price is HKD 0.55 and HKD 0.79 ,and the share options are effective for a period of 10 years from grant day. The remaining contractual life is 9.5-10 years at current period end.

Range of exercise price and remaining contractual life of the Company's other equity instruments outstanding at the end of the period

- -


119

(VII) SHARE-BASED PAYMENTS – continued

2. SHARE-BASED PAYMENTS OF GEMDALE PROPERTIES AND INVESTMENT, SUBSIDIARY OF THE COMPANY - continued

(1) Summary of share-based payments - continued Explanations of share-based payments: Range of exercise price and remaining life of each type of equity instrument outstanding at the end of the current period related to share-based payments

Share-based payment plan Equity

instrument Range of exercise

price Remaining contractual life

A share options plan of Gemdale Corporation Share options

HKD 0.55/HKD 0.79

The share options are effective for a period of 10 years from grant day. The remaining contractual life is 8.5-9 years at current period end.

(2) Equity-settled share-based payments

Unit: RMB The Current Period The Prior Period The method of determining the fair value of equity instruments at the grant date

Note Note

The method of determining the best estimate of the number of equity instruments expected to be vested

At each balance sheet date during the vesting period, the Company makes the best estimate according to the subsequent latest information of change in the number of employees who are granted with options that may vest, etc. and revises the number of equity instruments expected to vest.

Reasons for the significant difference between the estimate in the current period and that in the prior period

Nil Nil

Amounts of equity-settled share-based payments accumulated in capital reserve

54,773,928.45 10,829,042.98

Total expense recognised arising from equity-settled share-based payments

26,966,908.81 16,054,919.18

Note: The method of determining the fair value of equity instruments


120

(VIII) SHARE-BASED PAYMENTS – continued

2. SHARE-BASED PAYMENTS OF GEMDALE PROPERTIES AND INVESTMENT, SUBSIDIARY OF THE COMPANY - continued

(2) Equity-settled share-based payments - continued Fair values are calculated by using Binominal Model and the inputs to the model are as follows:

7 January 2013 20 May 2013Total amounts of the equity instruments granted during the period 154,230,000 465,198,000

Volatility of the Company’s share price 39.8% 48.6%Expected dividend yield 4% 4%Expected employee exit rate

– Directors 14.2% 16.7%– Senior management 14.2% 16.7%

Risk free rate 0.756% 1.093%Exercise multiple

– Directors 2.01 2.01– Senior management 1.66 1.66


121

(IX) CONTINGENCIES

1. THE CONTINGENT LIABILITIES ARISING FROM PENDING LITIGATIONS AND PENDING ARBITRATIONS AND ITS FINANCIAL EFFECT

At the end of the current period, the Company had no significant pending litigations and pending arbitrations.

2. THE CONTINGENT LIABILITIES ARISING FROM GUARANTEES PROVIDED TO OTHER COMPANIES AND ITS FINANCIAL EFFECT

(1) As at June 30, 2014, the outstanding guaranteed amount, which was provided by the

Company and its subsidiaries for the commercial residential property with mortgage guarantee for the secured bank borrowings, was RMB5,491,180,000.00. It was believed that the above guarantees have low risk to the Company since no any default of contracts incur so far.

(2) The Company had provided joint-liability guarantee for bank loans of

RMB1,400,000,000.00 raised by Shenzhen Gemdale Dabaihui Real Estate Development Co., Ltd., while Shenzhen Junwei Property Co., Ltd., the Minority Interests in SZ Gemdale Old City Reconstruction Co., Ltd., had provided counter-guarantee to the Company through mortgage of its 40% of equity interest in SZ Gemdale Old City Reconstruction Co., Ltd.

(X) COMMITMENTS

1. SIGNIFICANT COMMITENTS (1) Capital commitments

Unit: RMB'0000 Closing balance Opening balance

Capital commitments contracted but not recognised in the financial statements:

- Commitment for acquisition of long-term assets 5,208 22,443

- Significant outsourcing contracts - -

- Real estate development project 1,207,133 1,214,849

- External investment commitment - -

Total 1,212,341 1,237,292


122

(X) COMMITMENTS - continued

1. SIGNIFICANT COMMITENTS - continued

(2) Operating lease commitments As of the balance sheet date, the Company has the following commitments in respect of non-recoverable operating leases:

Unit: RMB'0000 Closing balance Opening balance

Minimum lease payments under non-cancellable operating leases:

1st year subsequent to the balance sheet date 2,743 2,794

2nd year subsequent to the balance sheet date 1,968 2,607

3rd year subsequent to the balance sheet date 655 1,174

Subsequent periods 99 232

Total 5,465 6,807


123

(XI) EVENTS AFTER THE BALANCE SHEET DATE

There is no description of significant events after the balance sheet date (XII) OTHER SIGNIFICANT EVENTS

1. BORROWING COSTS

Unit: RMB

Items

Amount of borrowing costs capitalised during the current

period Capitalisation rateInventories 959,786,324.90 6.75%Construction in progress - -Intangible assets - -Sub-total of borrowing costs capitalised during the current period

959,786,324.90 -

Borrowing costs recognised in profit or loss during the current period

429,858,100.39 -

Total borrowing costs 1,389,644,425.29 -

2. SEGMENT REPORTING

Based on the Company's internal organization framework, administrative needs and internal reporting system, seven reporting segments are identified. The Company's executive management periodically evaluates the operating results of these segments for the purposes of allocating resources and assessing performances. Each segment of the Company mainly specializes in sales of property. Information of segment reporting was disclosed on the basis of accounting policies and measurement standards employed by each segment in reporting to executive management. These accounting policies and measurement standards are in compliance with those utilized in preparation of financial statements.


124

(XII) OTHER SIGNIFICANT EVENTS - continued

2. SEGMENT REPORTING - continued (1) Segment infomation

Unit: RMB The Current Period

Southern China

Segment Northern China

Segment Eastern China

Segment Central China

Segment Northwestern

China Segment Northeastern

China Segment Southeastern

China Segment

Unallocated items Inter-segment elimination

Total

Revenue 1,141,721,953.26 1,339,487,133.09 2,669,323,600.99 1,342,994,009.20 506,104,324.70 949,454,221.27 1,221,556,523.40 - (86,770,423.66) 9,083,871,342.25

Including: Revenue arising from external transactions

1,072,772,585.21 1,339,487,133.09 2,651,502,545.38 1,342,994,009.20 506,104,324.70 949,454,221.27 1,221,556,523.40 - - 9,083,871,342.25

Revenue arising from inter-segment transactions

68,949,368.05 - 17,821,055.61 - - - - - (86,770,423.66) -

Cost & Expenses 338,835,428.13 1,030,535,162.10 2,528,209,021.07 1,227,538,660.21 395,602,691.59 930,191,273.68 1,237,204,736.15 1,084,345,198.86 (107,054,465.49) 8,665,407,706.30

Segmental income 802,886,525.13 308,951,970.99 141,114,579.92 115,455,348.99 110,501,633.11 19,262,947.59 (15,648,212.75) (1,084,345,198.86) 20,284,041.83 418,463,635.95

Add: Gains/losses from changes in fair values

-

Add: Investment income

(6,827,683.84)

Operating income 411,635,952.11

Total assets 93,362,076,564.72 20,802,533,099.95 27,448,726,722.81 8,193,402,287.98 11,809,981,112.09 16,908,018,757.39 16,172,431,853.51 4,808,215,110.70 (64,770,910,391.82) 134,734,475,117.33

Total liabilities 50,747,992,986.83 12,783,348,650.88 16,755,698,317.04 6,368,043,362.32 7,856,856,482.80 12,178,808,166.27 13,102,401,816.06 42,398,744,833.91 (65,209,396,182.76) 96,982,498,433.35

Supplementary infomation：

Depreciation & Amortization

15,482,501.02 3,547,072.02 1,851,991.32 1,503,985.39 1,577,113.33 2,778,690.23 958,942.26 - - 27,700,295.57

Impairment losses recognized in current period

1,612,314.65 1,483,087.53 225,887.96 540,957.96 314,142.05 (160,409.16) 399,260.04 - - 4,415,241.03

Capital expenditure

20,878,946.80 1,788,202.35 1,926,543.85 547,287.00 628,181.00 1,909,635.82 2,619,144.00 - - 30,297,940.82


125


2. SEGMENT REPORTING - continued (1) Segment information - continued

Unit: RMB The Prior Period

Southern China

Segment Northern China

Segment Eastern China

Segment Central China

Segment Northwestern China

Segment Northeastern China

Segment Southeastern China

Segment

Unallocated items Inter-segment elimination

Total

Revenue 1,352,940,169.08 1,224,756,733.47 1,091,267,408.70 852,787,276.30 491,258,644.02 1,591,637,605.00 2,295,834,519.00 - -105,550,567.88 8,794,931,787.69

Including: Revenue arising from external transactions

1,280,224,111.06 1,222,279,314.12 1,060,910,318.19 852,787,276.30 491,258,644.02 1,591,637,605.00 2,295,834,519.00 - - 8,794,931,787.69

Revenue arising from inter-segment transactions

72,716,058.02 2,477,419.35 30,357,090.51 - - - - - -105,550,567.88 -

Cost & Expenses

603,900,815.96 1,071,086,878.38 1,142,375,247.03 800,366,819.23 345,694,293.58 1,346,814,974.87 1,951,181,584.53 848,067,778.04 -116,447,091.64 7,993,041,299.98

Segmental income

749,039,353.12 153,669,855.09 -51,107,838.33 52,420,457.07 145,564,350.44 244,822,630.13 344,652,934.47 -848,067,778.04 10,896,523.76 801,890,487.71

Add: Gains/losses from changes in fair values

-

Add: Investment income

8,932,857.65

Operating income

810,823,345.36

Total assets 80,204,859,380.76 17,894,486,606.16 25,575,994,244.03 8,751,229,465.28 8,775,329,909.38 13,424,062,125.82 19,933,875,611.50 1,907,758,489.15 -57,159,374,495.51 119,308,221,336,57

Total liabilities 41,445,464,448.80 12,083,045,317.63 15,898,535,527.89 6,459,454,569.87 5,781,058,535.54 9,156,940,732.77 16,628,781,533.95 36,712,405,930.97 -60,173,513,439.70 83,992,173,157.72

Supplementary infomation：

Depreciation & Amortization

16,558,527.40 789,265.83 2,657,038.68 1,659,525.48 468,712.44 2,529,459.20 772,185.17 - - 25,434,714.20

Impairment losses recognized in current period

817,355.11 -289,528.60 98,635,495.16 50,392.84 534,870.32 141,609.75 517,716.00 - - 100,407,910.58

Capital expenditure

43,590,353.68 1,229,675.71 1,556,085.00 1,395,006.00 1,807,530.00 1,471,366.00 2,559,924.03 - - 53,609,940.42


126


2. SEGMENT REPORTING – continued (2) External revenue by geographical area of source and non-current assets by geographical location During the current and prior period, the Company’s external revenue were mainly from local customers of mainland China and Company’s main non-current assets were located in mainland China. (3) Degree of reliance on major customers The Company has no major customer who contributes revenue accounting for more than 10% of the Company’s operating income for current period. 3. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT The Company's major financial instruments include equity investments, borrowings, account receivables, account payables, etc. Details of these financial instruments are disclosed in respective notes. The risks associated with these financial instruments and the policies on how to mitigate these risks are set out below. Management manages and monitors these exposures to ensure appropriate measures are implemented on a timely and effective manner. 3.1 Risk management objectives and policies The Company's risk management objectives are to achieve proper balance between risks and yield, minimize the adverse impacts of risks on the performance of the Company's operations, and maximize the benefits of the shareholders and other equity investors. Based on these risk management objectives, the Company's basic risk management strategy was to identify and analyze the Company's exposure to various risks, establish appropriate bottom line for risk tolerance, implement risk management, and to ensure appropriate measures are implemented on a timely and effective manner to monitor these exposures within certain limits.


127

(XII) OTHER SIGNIFICANT EVENTS - continued 3. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT - continued 3.1 Risk management objectives and policies - continued 3.1.1 Market Risk 3.1.1.1 Currency Risk Currency risk is the risk that losses will occur because of changes in foreign exchange rates. The Company's exposure to the currency risk is primarily associated with USD and HKD. Other than the Company's certain subsidiaries with borrowings denominated in USD, the Company's other principal activities are denominated and settled in RMB. As at June 30, 2014, the Company's assets and liabilities are all denominated in RMB except those in USD and HKD set out below. Currency risk arising from these assets and liabilities denominated in foreign currencies may have impact on the Company's performance.

Unit: RMB

Items Closing balance

Opening balance

Cash and cash equivalents (HKD) 68,987,791.57 46,492,343.62

Cash and cash equivalents (USD) 458,552,840.89 433,735,090.40

Cash and cash equivalents (EUR) 54,774.77 57,374.80

Cash and cash equivalents (RMB)(Note) 8,782,392.56 58,414,316.16

Account receivable(HKD) 7,094.99 5,344,793.71

Other receivables (HKD) 7,070,084.43 185,471.04

Other receivables (USD) 49,929.97 1,496,995.15

Other payables (HKD) 88,816,907.00 77,019,980.71

Other payables (USD) 127,707,390.47 131,814,631.64

Short-term borrowings (HKD) 118,694,211.01 -

Short-term borrowings (USD) 1,017,673,148.90 371,910,900.00

Advances from customers(HKD) 184,848.25 -

Long-term borrowings due within one year(USD) 138,438,003.60 1,857,725,430.00

Long-term borrowings (USD) 2,488,880,779.66 1,279,129,620.00

Bonds payable (USD) 1,733,805,322.11 2,112,621,752.19

Note: This was the financial assets in RMB held by the subsidiaries whose functional currency was HKD. The Company closely monitors the effects of changes in the foreign exchange rates on the Company's currency risk exposure. The Company currently does not take any measures to hedge against currency risk exposure.


128


3. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT - continued 3.1 Risk management objectives and policies - continued 3.1.1 Market Risk - continued 3.1.1.2 Interest risk - risk of changes in cash flows The Company's borrowings are mainly denominated in RMB and supplemented with borrowings in foreign currencies. Foreign currency borrowings are mainly USD borrowings with floating rate of interest. Their interest rates will not be influenced by base rate adjusted by the People's Bank of China. As for RMB borrowings, the Company arranges for suitable proportion of short-term borrowings and long-term borrowings. 3.1.2 Credit Risk As at June 30, 2014, the Company's maximum exposure to credit risk which will cause a financial loss to the Company due to failure to discharge an obligation by the counterparties and financial guarantees issued by the Company is arising from: The carrying amount of the respective recognized financial assets as stated in the consolidated

balance sheet; The amount of financial guarantees contract disclosed in Note (IX) "Contingencies". For the reasons that, no default of contract happens so far, and fair values of these properties are higher than their sold amounts, it is believed that the above guarantee represents little risk to the Company. The credit risk on liquid funds is limited because the counterparties are banks with high credit ratings assigned by international credit-rating agencies. The Company had adopted a policy of only dealing with creditworthy counterparties. The Company had no significant concentration of credit risk.

3.1.3 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 loans and ensures compliance with loan covenants.


129


3 FINANCIAL INSTRUMENTS AND RISK MANAGEMENT - continued (1) Risk management objectives and policies - continued 3.1.3 Liquidity Risk - continued The following is the maturity analysis for financial assets and financial liabilities held by the Company which is based on undiscounted remaining contractual obligations:

Unit: RMB On demand Within 1 year 1-5 years Over 5 years

Financial Assets: Cash and cash equivalents - 17,312,293,709.87 - -Account receivables - 4,419,917.22 - -Other receivables - 10,174,693,901.23 - -Other current assets - 4,805,000,000.00 - -Other non-current assets 167,948,235.00 - - -Financial Liabilities: Short-term borrowings - (5,143,514,604.76) - Notes payable - (106,456,261.57) - -Account payables - (7,678,804,721.36) - -Interest payable - (148,693,737.41) - -Dividends payable (374,085,142.00) Other payables - (7,124,153,603.17) - -Long-term borrowings due within one year

- (12,006,433,668.66) - -

Long-term borrowings - (1,234,954,058.55) (21,054,460,908.22) -Bonds payable - (386,895,222.14) (6,155,047,966.22) -


130


3. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT - continued 3.2 Fair Value - continued Fair values of the financial assets and financial liabilities are determined as follows: The fair value of financial assets and financial liabilities with standard terms and conditions

and traded on active markets are determined with reference to quoted market bid prices and ask prices respectively;

The fair value of other financial assets and financial liabilities (excluding derivative

instruments) are determined in accordance with generally accepted pricing models based on discounted cash flow analysis or using prices from observable current market transactions;

The fair value of derivative instruments are determined with reference to quoted market

prices. Where such quoted prices are not available, the fair value of a non-option-based derivative is estimated using discounted cash flow analysis and the applicable yield curve. For an option-based derivative, the fair value is estimated using option pricing model (for example, the binomial model).

The management considers that the carrying amounts of financial assets and financial liabilities stated at amortised cost in the financial statements approximate their fair values Fair value hierarchy The following provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable: Level 1 - those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 - those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); Level 3 - those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs). The fair value measurement of the Company's available-for-sale financial assets is based on Level 1.


131


3. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT - continued 3.3 Sensitivity analysis The Company adopts sensitivity analysis techniques to analyze how the entity's profit and loss for the period and owners' equity would have been affected by changes in the relevant risk variables that were reasonably possible. As it is unlikely that risk variables will change in an isolated manner, and the interdependence between risk variables will have significant effect on the amount ultimately influenced by the changes in a single risk variable, the following items are based on the assumption that each risk variable has changes on a stand-alone basis.

3.3.1 Currency risk 3.3.1.1 The assumption for the sensitivity analysis on currency risk is that all the cash flow hedges and hedges of a net investment in a foreign operation are highly effective. 1. On the basis of the above assumption, where all other variables are held constant, the

reasonably possible changes in the foreign exchange rate may have the following pre-tax effect on the profit or loss for the period or equity: The Company and subsidiaries using RMB as functional currency

Unit: RMB

Item Changes in exchange rate The Current Period The Prior Period

Effects on profits Effects on equity Effects on profits Effects on equity

All foreign currencies 5% increase against RMB (250,247,632.90) (250,247,632.90) (166,395,648.02) (166,395,648.02)All foreign currencies 5% decrease against RMB 250,247,632.90 250,247,632.90 166,395,648.02 166,395,648.02

Subsidiaries using HKD as functional currency： Unit: HKD

Item Changes in exchange rate The Current Period The Prior Period

Effects on profits Effects on equity Effects on profits Effects on equity All foreign currencies except USD

5% increase against HKD 19,334,910.03 19,334,910.03 50,086,521.49 50,086,521.49

All foreign currencies except USD

5% decrease against HKD (19,334,910.03) (19,334,910.03) (50,086,521.49) (50,086,521.49)

3.3.2 Sensitivity analysis on interest rate risk 3.3.2.1 The sensitivity analysis on interest rate risk is based on the following assumptions: Changes in the market interest rate may influence the interest income or expense of the

variable rate financial instruments； For fixed rate financial instruments measured at fair value, changes in the market interest rate

only influence their interest income or expense； For derivative financial instruments designated as hedging instruments, changes in the market

interest rate influence their fair values, and all the hedges of interest rate risk are expected to be highly effective；

Changes in the fair value of derivative financial instruments and other financial assets and liabilities are calculated at the market interest rate as at the balance sheet date, using the method of discounted cash flow analysis.


132


3. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT - continued 3.3 Sensitivity analysis - continued 3.3.2 Sensitivity analysis on interest rate risk - continued 3.3.2.2 On the basis of the above assumptions, where all other variables are held constant, the reasonably possible changes in the interest rate may have the following pre-tax effect on the profit or loss for the period or equity:

Unit: RMB

Item Changes in

Interest Rate

The Current Period The Prior Period

Effects on profit Effects on equity Effects on profit Effects on equity

External borrowings 1% increase (63,652,358.34) (63,652,358.34) (44,470,695.31) (44,470,695.31)

External borrowings 1% decrease 63,652,358.34 63,652,358.34 44,470,695.31 44,470,695.31

(XIII) NOTES TO KEY ITEMS IN THE PARENT'S FINANCIAL STATEMENTS

1. OTHER RECEIVABLES (1) The composition of other receivables is as follows:

Unit: RMB

CATEGORIES

Closing balance Opening balanceCarrying amount Bad debt provision Carrying amount Bad debt provision

Amount

Propor-tion (%) Amount

Percent-age (%) Amount

Propor -tion (%) Amount

Percent-age (%)

Other receivable that are individually significant and for which bad debt provision has been assessed individually

- - - - - - - -

Other receivable for which bad debt provision has been assessed by portfolios Portfolio 1 39,173,980,321.32 99.98 - - 34,434,639,549.21 99.99 - -Portfolio 2 6,565,127.26 0.02 328,256.37 5.00 4,187,870.69 0.01 209,393.53 5.00Subtotal of portfolios 39,180,545,448.58 100.00 328,256.37 - 34,438,827,419.90 100.00 209,393.53 -Other receivable that are not individually significant but for which bad debt provision has been assessed individually

- - - - - - - -

Total 39,180,545,448.58 100.00 328,256.37 - 34,438,827,419.90 100.00 209,393.53 -

Note to other receivables: Individually significant accounts are other receivables with individual amount of and more than RMB5,000,000.00.


133

(XIII) NOTES TO KEY ITEMS IN THE PARENT'S FINANCIAL STATEMENTS - continued

1. OTHER RECEIVABLES - continued (1) The composition of other receivables is as follows - continued: The ageing analysis of other receivables is as follows:

Unit: RMB

The composition of the bad debt provision using the percentage of account balance for other receivable：

Unit: RMB

The composition Closing balanceThe percentage

(%) Bad Debt ProvisionOther insignificant other receivable 6,565,127.26 5.00 328,256.37

(2) There are no other receivables due from shareholders of the Company who hold 5% and more than 5% of shares of the Company. (3) Top five outstanding amounts of other receivables:

Unit: RMB

Debtors Relations with the

Company Amount Aging

Proportion of the outstanding amounts to the

total other receivables (%)


The Company's subsidiary

2,934,681,364.02 Within1year 7.49

Shaanxi Gemdale Jiayi Real Estate Development Co., Ltd.


2,200,265,000.00 Within1year 5.62

Beijing Gemdale Huiyuan Real Estate Development Co., Ltd.


2,100,000,000.00 Within1year 5.36

Dongguan Gemdale Investment Co., Ltd. The Company's subsidiary

1,679,220,000.00 Within1year 4.29



1,640,397,318.82 Within1year 4.19

Total 10,554,563,682.84 26.94

Ageing


Amount Proportion (%)

Bad debts provision Carrying amount Amount

Proportion (%)

Bad debts provision Carrying amount

Within 1 year 39,180,107,808.08 100.00 306,374.35 39,179,801,433.73 34,438,389,779.43 100.00 187,511.51 34,438,202,267.921 to 2 years - - - - 12.24 - 0.61 11.632 to 3 years 12.24 - 0.61 11.63 161.16 - 8.06 153.10Over 3 years 437,628.26 - 21,881.41 415,746.85 437,467.07 - 21,873.35 415,593.72Total 39,180,545,448.58 100.00 328,256.37 39,180,217,192.21 34,438,827,419.90 100.00 209,393.53 34,438,618,026.37


134


2. LONG-TERM EQUITY INVESTMENTS

(1) Details of long-term equity investments are as follows: Unit: RMB

Investee Investment cost Opening balance Increase/ (decrease)

Closing balance

Proportion of

ownership interest in

the investee (%)

Proportion of voting power in

the investee (%)

Explanation of the inconsistency between the

proportion of ownership interest

and the proportion of voting power

Provision for

impairment losses

Provision for

impairment losses for the period

Cash dividends for the period

Under equity method Nanjing Jinjun Real Estate Development Co., Ltd. 468,370,000.00 465,334,649.83 (2,371,876.64) 462,962,773.19 51.00% 51.00% N/A - - - Hangzhou Gemdale Zhongtian Real Estate Development Co., Ltd. 343,000,000.00 373,695,967.20 (2,004,851.52) 371,691,115.68 49.00% 49.00% N/A - - -

Shenzhen Gemdale Longcheng Real Estate Development Co., Ltd. 300,000,000.00 300,000,000.00 (12,181,742.68) 287,818,257.32 51.00% 51.00% N/A - - -

Shenzhen Yuansheng Development First Phase Investment Ltd. (Limited Partnership) 72,800,000.00 72,800,000.00 - 72,800,000.00 38.76% 38.76% N/A - - -

Shanghai Rongtian Real Estate Development Co., Ltd. 52,500,000.00 48,710,471.52 (4,398,720.48) 44,311,751.04 50.00% 50.00% N/A - - -

Shenzhen Gemdale Xinsha Real Estate Development Co., Ltd. 10,200,000.00 - 10,200,000.00 10,200,000.00 51.00% 51.00% N/A -

Shanghai Pufa Gemdale Real Estate Development Co., Ltd. 4,899,980.00 55,484,098.12 5,892,945.75 61,377,043.87 49.00% 49.00% N/A - - -

Subtotal 1,251,769,980.00 1,316,025,186.67 (4,864,245.57) 1,311,160,941.10 - - - - -

Under cost method


1,481,015,150.00 1,481,015,150.00 - 1,481,015,150.00 100.00% 100.00% N/A - -

- Shanghai Wenjie Equity Investment Funds Ltd. (Limited Partnership)

1,300,000,000.00 740,000,000.00 560,000,000.00 1,300,000,000.00 100.00% 100.00% N/A - - 24,352,236.48

Changzhou Jinjiu Real Estate Development Co., Ltd.

1,000,000,000.00 1,000,049,536.57 74,665.59 1,000,124,202.16 100.00% 100.00% N/A - - -

Changzhou Jinkun Real Estate Development Co., Ltd.

1,000,000,000.00 1,000,000,000.00 - 1,000,000,000.00 100.00% 100.00% N/A - - -

Shenzhen Gemdale Constructional Material Co., Ltd.

925,435,404.11 927,808,728.80 (208,992.88) 927,599,735.92 100.00% 100.00% N/A - - -

Shanghai Hangjin Real Estate Development Co., Ltd.

885,000,000.00 885,233,255.45 128,028.77 885,361,284.22 60.00% 60.00% N/A - - -


832,650,000.00 835,120,195.09 (217,523.20) 834,902,671.89 51.00% 51.00% N/A - - -

Shanghai Chengjin Jianhao Equity Investment Co., Ltd.

633,014,284.00 633,014,284.00 - 633,014,284.00 100.00% 100.00% N/A - - 1,300,000.00

Shenzhen Zhuanmei International Investment Development Co., Ltd.

607,600,000.00 - 607,600,000.00 607,600,000.00 100.00% 100.00% N/A - - -

Cixi Jinqi Real Estate Development Co., Ltd. 587,629,162.00 587,629,162.00 - 587,629,162.00 66.32% 66.32% N/A - - - Hangzhou Gemdale Xianghu Real Estate Development Co., Ltd.

504,418,113.81 505,692,266.10 (112,694.48) 505,579,571.62 60.00% 60.00% N/A - - -


135


2. LONG-TERM EQUITY INVESTMENTS - continued

(1) Details of long-term equity investments are as follows – continued Unit: RMB

Investee Investment cost Opening balance Increase/ (decrease) Closing balance

Proportion of ownership

interest in the investee (%)

Proportion of voting power in the investee

(%)

Explanation of the inconsistency between the proportion of

ownership interest and the proportion

of voting power


losses

Provision for



Guangzhou Dongling Real Estate Development Co., Ltd.

504,000,000.00 505,978,048.78 123,875.01 506,101,923.79 80.00% 80.00% N/A - - -

Beijing Gemdale Huida Real Estate Development Co., Ltd.

500,000,000.00 500,247,019.31 137,798.72 500,384,818.03 100.00% 100.00% N/A - - 21,100,000.00

Shaanxi Gemdale Property Investment Co., Ltd.

500,000,000.00 510,455,858.07 200,876.25 510,656,734.32 100.00% 100.00% N/A - - 420,000,000.00

Foshan Gemdale Xinhua Investment Co., Ltd.

451,500,000.00 - 451,500,000.00 451,500,000.00 64.50% 64.50% N/A - - -

Gemdale Corporation Wuhan Real Estate Development Co., Ltd.

419,961,322.16 443,696,338.26 (10,793,079.07) 432,903,259.19 98.57% 98.57% N/A - - -

Dongguan Gemdale Baodao Property Co., Ltd.

400,000,000.00 100,000,000.00 300,000,000.00 400,000,000.00 100.00% 100.00% N/A - - -

Wuhan Gemdale Huigu Real Estate Co., Ltd.

360,000,000.00 360,000,000.00 - 360,000,000.00 90.00% 90.00% N/A - - 34,650,000.00

Shenzhen Hong Gemdale Tennis Club Co., Ltd.

311,213,950.35 145,048,356.63 200,302,984.03 345,351,340.66 99.23% 99.23% N/A - -

-

Shaoxing Gemdale Shenxing Real Estate Development Co., Ltd.

306,000,000.00 306,372,203.46 226,349.80 306,598,553.26 51.00% 51.00% N/A - -

-

Gemdale Corporation Nanjing Jinjiu Real Estate Development Co., Ltd.

300,000,000.00 300,000,000.00 - 300,000,000.00 100.00% 100.00% N/A - - 16,700,000.00

Wuhan Gemdale Aochu Real Estate Development Co., Ltd.

290,700,000.00 290,700,000.00 - 290,700,000.00 51.00% 51.00% N/A - - -

Gemdale Corporation Yangzhou Real Estate Development Co., Ltd.

256,689,122.00 256,689,122.02 338,821.16 257,027,943.18 57.59% 57.59% N/A - - -

Wuhan Ao'qiang Real Estate Development Co., Ltd.

240,330,000.00 240,330,000.00 - 240,330,000.00 100.00% 100.00% N/A - - 24,000,000.00

Beijing Gemdale Rongqiao Real Estate Development Co., Ltd.

210,000,000.00 214,017,372.84 475,258.61 214,492,631.45 100.00% 100.00% N/A - - -

Gemdale (Corporation) Tianjin Real Estate Development Co., Ltd.

197,200,000.00 203,022,749.25 (90,032.30) 202,932,716.95 98.60% 98.60% N/A - - -


136



(1) Details of long-term equity investments are as follows - continued Unit: RMB


Proportion of

ownership interest in

the investee (%)


(%)

Explanation of the inconsistency between

the proportion of ownership interest and

the proportion of voting power

Provision for

impairment losses

Provision for



Hunan Jinlu Real Estate Development Co., Ltd. 191,062,865.00 133,528,450.00 57,524,415.00 191,052,865.00 70.00% 70.00% N/A - - - BJ Gamdale Xingye Property Co., Ltd. 182,418,321.68 185,892,433.61 (902,943.16) 184,989,490.45 100.00% 100.00% N/A - - - Shenyang Gemdale Jincheng Real Estate Development Co., Ltd

144,068,657.49 149,844,874.91 (5,776,217.42) 144,068,657.49 45.00% 51.00% N/A - - -

Shanghai Green Fengfan Real Estate Development Co., Ltd.

140,000,000.00 146,442,202.82 (773,482.93) 145,668,719.89 70.00% 70.00% N/A - - -

Yantai Jinxiangtai Real Estate Development Co., Ltd.

124,950,000.00 125,024,844.97 38,079.45 125,062,924.42 51.00% 51.00% N/A - - -

Beijing Gemdale Hongyun Real Estate Development Co., Ltd.

111,000,000.00 111,000,000.00 682,237.63 111,682,237.63 70.00% 70.00% N/A - - 56,005,379.92

Zhuhai Hejiada Investment Consulting Co., Ltd. 101,984,881.72 101,984,881.72 - 101,984,881.72 51.00% 51.00% N/A - - 23,460,000.00 Hangzhou Gemdale Zizaicheng Real Estate Development Co., Ltd.

100,000,000.00 100,676,194.29 366,662.09 101,042,856.38 100.00% 100.00% N/A - - 120,000,000.00


99,072,300.00 - 99,072,300.00 99,072,300.00 49.00% 49.00% N/A - - -

BJ Gamdale Yuanjing Real Estate Development Co., Ltd.

96,000,000.00 100,402,068.92 (456,357.65) 99,945,711.27 80.00% 80.00% N/A - - 2,320,000.00

Tianjin Tuanbohu Development Co., Ltd. 90,254,780.00 90,626,329.47 242,154.79 90,868,484.26 70.00% 70.00% N/A - - - Hubei Wanhao Science & Technology Development Co., Ltd.

75,180,000.00 75,180,000.00 - 75,180,000.00 70.00% 70.00% N/A - - -

Gemdale Corporation Nanjing Property Co., Ltd. 70,000,000.00 70,000,000.00 5,970,370.32 75,970,370.32 100.00% 100.00% N/A - - 189,900,000.00 Famous Commercial Ltd. 61,974,610.00 71,126,977.92 6,889,431.18 78,016,409.10 100.00% 100.00% N/A - - - Dongguan Gemdale Property Investment Co., Ltd. 61,710,118.00 64,258,914.58 (726,302.21) 63,532,612.37 62.08% 62.08% N/A - - - Ningbo Jinjie Real Estate Development Co., Ltd. 50,478,333.76 51,813,759.81 20,227.44 51,833,987.25 100.00% 100.00% N/A - - - Shenyang Gemdale Tianbang Real Estate Development Co., Ltd.

50,000,000.00 60,995,147.08 (6,285,770.67) 54,709,376.41 100.00% 100.00% N/A - - -


49,500,000.00 56,081,990.67 (392,307.91) 55,689,682.76 99.00% 99.00% N/A - - -

Gemdale Corporation Shanghai Real Estate Development Co., Ltd.

45,000,000.00 48,287,058.67 (1,258,885.58) 47,028,173.09 90.00% 90.00% N/A - - -

BJ Gemdale Hongye Real Estate Development Co., Ltd.

37,000,000.00 38,535,739.96 (91,200.05) 38,444,539.91 70.00% 70.00% N/A - - 33,990,741.52

SZ Gemdale Residence Development Co., Ltd. 32,200,000.00 32,200,000.00 - 32,200,000.00 100.00% 100.00% N/A - - - Gemdale Corporation Zhuhai investment Co., Ltd. 27,000,000.00 28,158,959.04 67,199.03 28,226,158.07 90.00% 90.00% N/A - - -


137








(%)

Explanation of the inconsistency between the

proportion of ownership interest and the proportion

of voting power


losses

Provision for



SZ Gemdale Old City Reconstruction Co., Ltd.

24,300,000.00 25,587,732.27 74,665.59 25,662,397.86 60.00% 60.00% N/A - - -

Shanghai Gemdale Baoshan Real Estate Development Co., Ltd.

20,000,000.00 20,000,000.00 - 20,000,000.00 100.00% 100.00% N/A - - 60,000,000.00

Shanghai Shenxiang Real Estate Development Co., Ltd.

20,000,000.00 23,551,410.24 (763,204.90) 22,788,205.34 100.00% 100.00%N/A

- - 2,000,000.00

Gemdale Corporation Nanjing Property Co., Ltd.

20,000,000.00 20,000,000.00 - 20,000,000.00 100.00% 100.00%N/A

- - 14,300,000.00

Shanghai Nanxiang Garden Real Estate Development Co., Ltd.

14,006,666.81 14,006,666.81 - 14,006,666.81 90.00% 90.00%N/A

- - -

Dongguan New Century Runcheng Industry Investment Co., Ltd.

11,730,000.00 12,979,339.87 268,105.04 13,247,444.91 51.00% 51.00%N/A

- - 23,922,900.11

Shenzhen Gemdale Baocheng Real Estate Development Co., Ltd.

10,000,000.00 10,000,000.00 - 10,000,000.00 100.00% 100.00%N/A

- - -

Foshan Shunde Gemdale Real Estate Development Co., Ltd.

10,000,000.00 10,000,000.00 - 10,000,000.00 100.00% 100.00%N/A

- - -

Shenzhen Gemdale Xincheng Real Estate Development Co., Ltd.

10,000,000.00 17,878,373.63 1,590,261.03 19,468,634.66 100.00% 100.00%N/A

- - -

Guangzhou Green Real Estate Development Co., Ltd.

10,000,000.00 10,000,000.00 0.00 10,000,000.00 100.00% 100.00%N/A

- - -

Shanghai Jinshen Real Estate Development Co., Ltd.

10,000,000.00 11,811,140.24 312,571.39 12,123,711.63 100.00% 100.00%N/A

- - 50,000,000.00

BJ Gemdale Weisheng Real estate Development Co., Ltd.

10,000,000.00 14,644,097.99 (620,224.13) 14,023,873.86 50.00% 50.00%N/A

- - 5,700,000.00

Zhuhai Green Investment Co., Ltd. 10,000,000.00 10,000,000.00 - 10,000,000.00 100.00% 100.00% N/A - - 135,600,000.00


138








(%)

Explanation of the inconsistency between the proportion of

ownership interest and the proportion

of voting power


losses

Provision for




10,000,000.00 - 10,000,000.00 10,000,000.00 100.00% 100.00% N/A - - -

Shanghai Gemdale Jingjiu Real Estate Development Co., Ltd.

10,000,000.00 10,000,000.00 - 10,000,000.00 100.00% 100.00% N/A - - 11,000,000.00

Foshan Nanhai Gemdale Ruijin Real Estate Development Co., Ltd.

10,000,000.00 10,000,000.00 - 10,000,000.00 100.00% 100.00% N/A - - -


9,000,000.00 9,000,000.00 - 9,000,000.00 90.00% 90.00% N/A - - 1,980,000.00

Shenzhen Gemdale Industry Section Reconstruction Co., Ltd.

6,000,000.00 6,000,000.00 - 6,000,000.00 60.00% 60.00% N/A - - -

Wuhan Gemdale Famous Real Estate Development Co., Ltd.

5,616,935.26 5,616,935.26 - 5,616,935.26 18.40% 18.40% N/A - - 1,766,400.00

SZ Gemdale Hotel Co., Ltd. 4,800,000.00 4,800,000.00 - 4,800,000.00 80.00% 80.00% N/A - - 1,280,000.00 Shenzhen Gemdale Building Engineering Co., Ltd.

4,000,000.00 4,000,000.00 - 4,000,000.00 80.00% 80.00% N/A - - -

Shenzhen Gemdale Research And Design Co., Ltd.

900,000.00 3,305,903.32 (177,562.82) 3,128,340.50 90.00% 90.00% N/A - - 14,400,000.00

Shenzhen Gemdale Tennis Center Co., Ltd.

800,000.00 800,000.00 - 800,000.00 80.00% 80.00% N/A - -

- Shanghai Xinqing Investment Management Co., Ltd.

500,000.00 500,000.00 - 500,000.00 100.00% 100.00% N/A - -

- Shenzhen Ruijintongde Investment Co., Ltd.

100,000.00 100,000.00 - 100,000.00 100.00% 100.00% N/A - -

- Subtotal 17,186,964,978.15 15,068,762,074.70 2,274,580,556.56 17,343,342,631.26 - - - - 1,289,727,658.03 Total of long-term equity investments

18,438,734,958.15 16,384,787,261.37 2,269,716,310.99 18,654,503,572.36 - - 1,289,727,658.03


139



(2) Details and key financial information of joint ventures and associates Unit: RMB

Name of investee


% of voting power held by the Company

Total assets of the investee at

current period end

Total liabilities of the investee at

current period end

Total net assets of the investee at

current period end

Total revenue of the investee for current period

Total net profit of the investee for current period

Associates: Nanjing Jinjun Real Estate Development Co., Ltd. 51 51 3,455,177,587.67 2,547,407,444.15 907,770,143.52 - (4,650,738.50) Shanghai Rongtian Real Estate Development Co., Ltd. 50 50 957,117,409.26 868,493,907.17 88,623,502.09 - (10,680,424.08) Hangzhou Gemdale Zhongtian Real Estate Development Co., Ltd. 49 49 3,205,480,281.72 2,446,926,984.41 758,553,297.31 22,046,060.00 (4,091,533.71) Shenzhen Gemdale Xinsha Real Estate Development Co., Ltd. 51 51 20,000,000.00 - 20,000,000.00 - - Joint ventures Shanghai Pufa Gemdale Real Estate Development Co., Ltd. 49 49 245,760,718.30 120,501,445.09 125,259,273.21 26,343,640.79 12,026,419.90 Shenzhen Gemdale Longcheng Real Estate Development Co., Ltd. 51 51 2,218,979,677.87 1,742,865,447.84 476,114,230.03 - (13,918,877.31) Shenzhen Yuansheng Development First Phase Investment Ltd. (Limited Partnership)

38.76 38.76 425,187,184.94 4,476,424.00 420,710,760.94 35,771,045.36 28,023,181.36

(3) There is no restriction in the ability of the investees to transfer funds to the Company at June 30, 2014.


140


3. RETAINED PROFITS Unit: RMB

Item Amount Proportion of appropriation

The current period: Before adjustment: Retained profits at the end of 2013 7,075,568,429.27 Adjust: Total retained profits at beginning of 2014(Note) (4,574,803.73) After adjustment: Retained profits at the end of 2013 7,070,993,625.54 Add: Net profit attributes to the owners of the Company for the year 1,283,234,872.63 Less: Appropriation to statutory surplus reserve - 10%

Appropriation to discretionary surplus reserve - Appropriation to generic risk reserve - Declaration of dividends on ordinary shares - Conversion of ordinary shares' dividends into share capital - Dividends payable – last year's cash dividends approved in shareholders' general meeting

715,441,371.52

Retained profits at end of year 7,638,787,126.65 The prior period(Restated): Before adjustment: Retained profits at the end of 2012 5,530,684,729.15 Adjust: Total Retained profits at beginning of 2013 384,158,161.36 After adjustment: Retained profits at the end of 2012 5,914,842,890.51 Add: Net profit attributes to the owners of the Company for the year 1,659,187,039.44 Less: Appropriation to statutory surplus reserve - 10%

Appropriation to discretionary surplus reserve - Appropriation to generic risk reserve - Declaration of dividends on ordinary shares - Conversion of ordinary shares' dividends into share capital - Dividends payable – last year's cash dividends approved in shareholders' general meeting

357,720,685.76

Retained profits at end of year 7,216,309,244.19 Note: The adjustment of total retained profits at the beginning of 2014 includes a decrease of RMB

4,574,803.73 due to disposal of a subsidiary resulting in change from cost method to equity method.

Please refer to Note (VI) 32 for information about appropriation to statutory surplus reserve, last year's cash dividends approved in shareholders' general meeting and profit distribution decided after the balance sheet date.


141


4. OPERATING INCOME AND COST

(1) Operating income Unit: RMB

Items The Current Period The Prior

Period(Restated) Principal operating income 35,641,380.01 43,842,348.23Other operating income - -Operating cost 114,637.89 33,167,272.04

(2) Principal operating income (by industry)

Unit: RMB

Industry

The Current Period The Prior Period(Restated) Operating income Operating cost Operating income Operating cost

Revenue from sales of properties

- 63,851.21 33,153,783.00 33,167,272.04

Property lease income 13,024,352.91 50,786.68 10,688,565.23 -Others 22,617,027.10 - - -Total 35,641,380.01 114,637.89 43,842,348.23 33,167,272.04

5. INVESTMENT INCOME

(1) Details of investment income


Long-term equity investment income recognised under cost method

1,289,727,658.03 1,624,663,405.26

Long-term equity investment income recognised under equity method

(15,757,347.73) (1,645,875.85)

Gains/losses on disposal of long-term equity investments - 162,120.30Gains/losses from held-to-maturity investments - -Gains/losses on disposal of available-for-sale financial assets

- -

Other investment income - 20,643,728.40Total 1,273,970,310.30 1,643,823,378.11


142

(XIII) NOTES TO KEY ITEMS IN THE PARENT'S FINANCIAL STATEMENTS - continued 5. INVESTMENT INCOME - continued

(2) Long-term equity investment income recognised under equity method

Unit: RMB

Name of investee The Current

Period The Prior

Period Reason of change


5,892,945.75 2,249,301.01 Change in net profit of invested company


(4,398,720.48) (287,850.50) Change in net profit of invested company


(5,776,217.42) (151,916.15) Change in net profit of invested company


(7,098,627.42) - Subsidiary with cost method for accounting measurement in prior period


(2,004,851.52) - Subsidiary with cost method for accounting measurement in prior period


(2,371,876.64) - Established after June 2013

Shenzhen Yuansheng Development First Phase Equity Investment Co., Ltd.

- (2,965,605.24) Change in net profit of invested company

Beijing Jinshui Real Estate Development Co., Ltd.

- (489,804.97) Internal transferred

Total (15,757,347.73) (1,645,875.85)


143


6. PARTICULARS OF MATERIAL TRANSACTIONS BETWEEN THE COMPANY AND ABOVE RELATED PARTIES DURING THE CURRENT PERIOD ARE AS FOLLOWS (1) Borrowings and lendings of funds The Company sets up a funds settlement center to manage and controls funds within the Group. Each subsidiary is entitled to borrow money from the funds settlement center depending on progress of development project and a fee for using the funds is charged by the parent company. (2) Current account balances with related parties

Unit: RMB Account Related parties Closing balance Opening balance

Other receivables Beijing Gemdale Xingye Real Estate Development Co., Ltd. 382,000,000.00 90,545,505.96Beijing Gemdale Hongyun Real Estate Development Co., Ltd. 454,000,000.00 507,644,727.27Beijing Gemdale Huida Real Estate Development Co., Ltd. 2,100,000,000.00 -Guangzhou Dongling Real Estate Development Co., Ltd. 145,502,358.16 -Shanghai Nanxiang Garden Real Estate Development Co., Ltd. 17,700,000.00 16,487,497.75Gemdale Shanghai Real Estate Development Co., Ltd. 520,031,000.00 545,190,408.47Shanghai Gemdale Jingjiu Real Estate Development Co., Ltd. 8,561.00 -Shanghai Jinheng Real Estate Development Co., Ltd. 2,934,681,364.02 2,837,840,927.54Shanghai Jinshen Real Estate Development Co., Ltd. 93,425.74 -Shanghai Gemdale Baoshan Real Estate Development Co., Ltd. 13,800.00 -Shanghai Xinpu Investment Co., Ltd. 14,700,000.00 14,700,000.00Shanghai Xinyi Investment Co., Ltd. 500,000.00 500,000.00Shanghai Hangjin Real Estate Development Co., Ltd. 867,558,120.00 971,345,446.87Shanghai Wenyu Equity Investment Management Co., Ltd. 710,173.01 104,755.80Gemdale (Corporation) Tianjin Investment Co., Ltd. 340,000,000.00 742,469,531.25Tianjin Tuanbohu Development Co., Ltd. 615,800,000.00 591,911,428.83Tianjin Gemdale Shengjing Real Estate Development Co., Ltd. 832,600,000.00 -Wins (Tianjin) Investment Management Co., Ltd. 51,950,877.82 -Shenyang Gemdale Changqing Property Investment Co., Ltd. 20,121,847.97 -Shenyang Gemdale Hongye Real Estate Development Co., Ltd. 14,604.00 -Shenyang Gemdale Shicheng Real Estate Development Co., Ltd. 11,583.00 -Shenyang Gemdale Tianbang Real Estate Development Co., Ltd. 882,800,000.00 1,192,259,139.41Shenyang Rongyao Real Estate Development Co., Ltd. 84,985.18 -Shenyang Gemdale Jincheng Real Estate Development Co., Ltd. 745,797,228.77 63,195,375.00Shenyang Gemdale Yijing Property Co., Ltd. 229,200,000.00 220,619,940.05Gemdale Corporation Nanjing Property Co., Ltd. 55,092.63 -Gemdale Corporation Nanjing Real Estate Development Co., Ltd. 26,971.00 -Gemdale Corporation Nanjing Jinjiu Real Estate Development Co., Ltd. 92,871.00 -Gemdale Corporation Wuhan Real Estate Development Co., Ltd. 1,020,273,641.64 387,118,527.94Wuhan Gemdale Weisheng Real Estate Development Co., Ltd. 795,807,621.22 765,250,637.30Wuhan Gemdale Huigu Real Estate Co., Ltd. 52,270,000.00 198,950,170.82Wuhan Gemdale Puying Property Co., Ltd. 17,089,759.40 174,685,133.52Wuhan Di’an Juntai Real Estate Development Co., Ltd. - 1,494,772,141.38Shaanxi Gemdale Jiahe Property Co., Ltd. - 10,515,642.39Shaanxi Gemdale Jiayi Real Estate Development Co., Ltd. 2,200,265,000.00 1,718,865,698.09Shaanxi Hexiang Property Co., Ltd. 199,867,885.00 37,881,739.68Henan Gemdale Shixian Real Estate Development Co., Ltd. 192,885,053.16 164,574,605.60Dalian Rongyao Real Estate Development Co., Ltd. 17,836.00 -Dalian Tianyi Real Estate Development Co., Ltd. 62,987.30 -Dalian Bo’an Property Co., Ltd. 269,695,600.00 -Suzhou Jinhongyue Real Estate Development Co., Ltd. 444,000,000.00 -Gemdale Corporation Yangzhou Real Estate Development Co., Ltd. 8,028.45 -Gemdale Corporation Yangzhou Property Development Co., Ltd. 600,409,414.55 561,485,802.96Changzhou Jinkun Real Estate Development Co., Ltd. 128,013,800.00 115,683,986.76Changzhou Jinjiu Real Estate Development Co., Ltd. 329,358,302.90 274,311,315.89


144


6. PARTICULARS OF MATERIAL TRANSACTIONS BETWEEN THE COMPANY AND ABOVE RELATED PARTIES DURING THE CURRENT PERIOD ARE AS FOLLOWS - continued

(2) Current account balances with related parties - continued


Other receivables Yantai Jinxiangtai Property Co., Ltd. 246,358,585.77 223,123,439.58Yantai Yijing Real Estate Development Co., Ltd. 149,683,000.00 239,186,993.72Hangzhou Gemdale Xianghu Real Estate Development Co., Ltd. 820,614,000.00 961,787,445.46Hangzhou Qionglong Investment Management Co., Ltd. 119,200,000.00 115,236,251.46Hangzhou Jinmu Real Estate Development Co., Ltd. 172,230,000.00 222,861,010.44Hangzhou Jinxiang Real Estate Development Co., Ltd. 101,858,175.99 97,913,132.45Ningbo Jinxiang Real Estate Development Co., Ltd. 718,653,877.27 876,157,585.51Cixi Jinqi Real Estate Development Co., Ltd. 112,755,750.65 102,580,938.37Cixi Jinheng Real Estate Development Co., Ltd. 282,946,250.00 255,946,250.00Shaoxing Gemdale Guyue Real Estate Development Co., Ltd. 45,340,000.00 61,250,000.00Gemdale Corporation Jinhua Real Estate Development Co., Ltd. 81,014,678.00 174,440,862.78Hunan Jinlu Gemdale Real Estate Development Co., Ltd. 620,048,537.44 575,649,057.24Shenzhen Gemdale Residence Development Co., Ltd. 71,835.00 -Shenzhen Gemdale Old City Reconstruction Co., Ltd. 327,600,000.00 -Shenzhen Gemdale Property Project Management Co., Ltd. 54,400.00 54,400.00Shenzhen Gemdale Xincheng Real Estate Development Co., Ltd. 156,814,058.00 109,516,712.11Shenzhen Gemdale Beicheng Real Estate Development Co., Ltd. 1,640,397,318.82 1,316,002,625.20Shenzhen Gemdale Baocheng Real Estate Development Co., Ltd. 160,583,135.96 514,002,559.35Shenzhen Songjiang Kangna Investment Co., Ltd. 10,369,351.00 806,565,916.58Shenzhen Gemdale Hotel Co., Ltd. 1,816,065.49 -Shenzhen Ruijintongde Investment Co., Ltd. 325.00 325.00Shenzhen Wensheng Equity Investment Funds Management Co., Ltd. 344,500,433.36 581,310,000.00Shenzhen Gemdale Tennis Centre Co., Ltd. 7,608,287.06 7,608,287.06Gemdale Corporation Zhuhai investment Co., Ltd. 67,529,960.00 42,053,551.52Zhuhai Green Investment Co., Ltd. 17,122.00 232,198,093.62Zhuhai Hejiada Investment Consulting Co., Ltd. 12,842.00 -Zhuhai Gemdale Real Estate Development Co., Ltd. 425,072,588.97 387,901,840.32Zhuhai Mendao Investment Co., Ltd. 38,647,420.38 37,016,452.74Zhuhai Zhushengyuan Real Estate Development Co., Ltd. 314,750,000.00 -Gemdale (Foshan) Real Estate Development Co., Ltd. 16,115.00 -Foshan Shunde Gemdale Real Estate Development Co., Ltd. 233,800,000.00 292,526,528.39Foshan Nanhai Gemdale Ruijin Real Estate Development Co., Ltd. 915,747,800.00 850,577,481.79Foshan Nanhai Gemdale Real Estate Development Co., Ltd. 921,708,809.82 -Dongguan Gemdale Property Investment Co., Ltd. 1,679,220,000.00 1,397,697,397.24Dongguan Gemdale Baodao Real Estate Development Co., Ltd. 1,195,521,000.00 1,500,820,072.31Dongguan New Century Runcheng Industry Investment Co., Ltd. - 98,005.92Yunnan Run’an Real Estate Development Co., Ltd. 1,141,400,647.84 937,186,177.35Famous Commercial Ltd. 1,423,100,647.23 -Shenzhen Gemdale Research , Development and Design Co., Ltd. 907,633.86 -Shenzhen Gemdale Constructional Material Co., Ltd. 5,408.00 5,408.00Shenzhen Zhuanmei International Investment Development Co., Ltd. 11,160.00 -Shenzhen Gemdale Property Management Co., Ltd. 949,657.18 -Nanjing Jinjun Real Estate Development Co., Ltd. 7,416,681.36 533,569,539.58Shanghai Zhongjun Real Estate Development Co., Ltd. 1,289,997.60 10,831,391.59Vision (Shenzhen) Business Park Co., Ltd. 461,180,000.00 -Shenyang Gemdale Huacheng Property Co., Ltd. 579,844,486.50 579,844,486.50Dalian Huiquan Real Estate Development Co., Ltd. 832,359,442.87 713,869,789.99Dalian Gemdale Teyuan Management Consultancy Co., Ltd. 500,000.00 500,000.00Shenyang Gemdale Yuefeng Real Estate Development Co., Ltd. 336,106,994.57 -Gemdale Dabaihui - 1,086,000,000.00Xi’an Zhutian Property Co., Ltd. 123,049,692.98 318,572,135.36Vision Real Estate Development (Dalian) Co., Ltd. - 139,339,117.25Xi’an Zhujia Property Co., Ltd. 128,151,619.50 127,430,741.25Ningbo Langyue Real Estate Development Co., Ltd. - 539,713,998.56Beijing Jinshui Xingye Real Estate Development Co., Ltd. - 470,662,562.50Wuxi Poly Zhiyuan Real Estate Development Co., Ltd. 42,488,512.27 280,915,608.35Shanghai Rongtian Real Estate Development Co., Ltd. 5,681,295.17 269,954,300.58Tianjin Heshi Real Estate Development Co., Ltd. - 215,000,000.00


145


6. PARTICULARS OF MATERIAL TRANSACTIONS BETWEEN THE COMPANY AND ABOVE RELATED PARTIES DURING THE CURRENT PERIOD ARE AS FOLLOWS - continued (2) Current account balances with related parties – continued


Other receivables Shenyang Gemdale Tuyuan Property Co., Ltd. - 179,240,100.00Ruijin Fangrong (Beijing ) Investment Consultancy Co., Ltd. - 82,071.00Beijing Jinshui Real Estate Development Co., Ltd. 1,019,143.42 2,075,492,271.34Total 34,404,104,536.25 34,159,203,001.89


Other payables Beijing Gemdale Xingye Property Co., Ltd. 9,289,519.11 -Beijing Gemdale Yuanjing Real Estate Development Co., Ltd. 111,146,321.10 107,682,859.64Beijing Gemdale Hongye Real Estate Development Co., Ltd. 213,569,075.59 262,422,309.62Beijing Gemdale Weisheng Real Estate Development Co., Ltd. 21,851,555.22 33,777,406.91Beijing Gemdale Hongyun Real Estate Development Co., Ltd. 52,990,127.94 -Beijing Gemdale Rongqiao Real Estate Development Co., Ltd. 74,688,419.29 66,675,907.11Beijing Gemdale Huida Real Estate Development Co., Ltd. 596,468,914.99 287,692,104.38Zhongxiweiye (Beijing) Investment Co., Ltd. 1,225,764,499.47 748,820,594.51Beijing Gemdale Huiyuan Real Estate Development Co., Ltd. 5,942,468.83 -Guangzhou Dongling Real Estate Development Co., Ltd. 511,180,248.39 149,259,912.69Guangzhou Green Real Estate Development Co., Ltd. 4,703,263.00 -Shanghai Nanxiang Garden Real Estate Development Co., Ltd. 1,514,871.35 -Gemdale Corporation Shanghai Real Estate Development Co., Ltd. 7,202,981.91 -Shanghai Shenjin Real Estate Development Co., Ltd. 56,975,032.22 54,797,102.48Shanghai Green Fengfan Real Estate Development Co., Ltd. 1,953,480,523.93 2,084,105,462.33Shanghai Shenxiang Real Estate Development Co., Ltd. 134,047,024.91 136,076,648.04Shanghai Gemdale Jingjiu Real Estate Development Co., Ltd. 302,901,210.54 312,158,623.58Shanghai Jinheng Real Estate Development Co., Ltd. 758,601.29 -Shanghai Jinshen Real Estate Development Co., Ltd. 54,616,889.92 161,145,988.43Shanghai Gemdale Baoshan Real Estate Development Co., Ltd. 25,871,907.56 130,967,483.32Shanghai Hangjin Real Estate Development Co., Ltd. 2,509,119.99 -Gemdale (Corporation) Tianjin Real Estate Development Co., Ltd. 18,653,797.91 22,935,454.63Gemdale (Corporation) Tianjin Investment Co., Ltd. 56,927,226.08 -Tianjin Tuanbohu Development Co., Ltd. 41,980,134.81 -Tianjin Gemdale Shengjing Real Estate Development Co., Ltd. 11,649,090.24 45,000,000.00Wins (Tianjing) Investment Management Co., Ltd. 18,312,957.88 4,314,625.58Shenyang Gemdale Changqing Property Investment Co., Ltd. 2,308,409,388.75 2,052,682,785.59Gemdale Corporation (Shenyang) Property Co., Ltd. 364,781,652.12 365,846,915.73Shenyang Gemdale Hongye Real Estate Development Co., Ltd. 115,779,510.58 229,004,084.29Shenyang Gemdale Shicheng Real Estate Development Co., Ltd. 522,742,678.06 611,237,364.05Shenyang Gemdale Tianbang Real Estate Development Co., Ltd. 14,114,372.93 -Shenyang Gemdale Quansheng Real Estate Development Co., Ltd. 977,956,152.89 1,302,303,637.20Shenyang Gemdale Yijing Property Co., Ltd. 124,219.53 -Gemdale Corporation Nanjing Property Co., Ltd. 628,058,403.11 142,237,070.96Gemdale Corporation Nanjing Real Estate Development Co., Ltd. 21,136,351.00 47,849,277.30Gemdale Corporation Nanjing Jinjiu Real Estate Development Co., Ltd. 302,860,190.33 207,458,577.11Gemdale Corporation Wuhan Real Estate Development Co., Ltd. 1,183,329.95 -Wuhan Guanggu Agricultural Development Co., Ltd. 486,489,700.94 433,209,459.56Wuhan Aoqiang Real Estate Development Co., Ltd. 215,580,463.65 241,073,956.78Wuhan Gemdale Famous Real Estate Development Co., Ltd. 10,215,853.99 20,937,879.91Wuhan Gemdale Huigu Real Estate Co., Ltd. 2,513,638.22 -Xi'an Gemdale Property Investment Co., Ltd. 4,365,750.86 14,363,786.32Shaanxi Gemdale Jiahe Property Co., Ltd. 13.65 -Shaanxi Gemdale Jiayi Real Estate Development Co., Ltd. 1,308,645.22 -Shaanxi Hexiang Property Co., Ltd. 532,451.87 -Henan Gemdale Shixian Real Estate Development Co., Ltd. 10,051,487.02 -Dalian Rongyao Real Estate Development Co., Ltd. 392,896,189.17 381,017,608.64


146


6. PARTICULARS OF MATERIAL TRANSACTIONS BETWEEN THE COMPANY AND ABOVE RELATED PARTIES DURING THE CURRENT PERIOD ARE AS FOLLOWS - continued (2) Current account balances with related parties - continued


Other payables Dalian Tianyi Real Estate Development Co., Ltd. 7,004,968.06 -Suzhou Jinhongyue Real Estate Development Co., Ltd. 2,833,171.48 -Gemdale Corporation Yangzhou Real Estate Development Co., Ltd. 118,117,938.24 83,517,659.24

Gemdale Corporation Yangzhou Property Development Co., Ltd. 43,183.85 -

Changzhou Jinkun Real Estate Development Co., Ltd. 28,728,875.58 -Changzhou Jinjiu Real Estate Development Co., Ltd. 7,569,589.42 -Yantai Jinxiangtai Real Estate Development Co., Ltd. 216,197.21 -Hangzhou Gemdale Zizaicheng Real Estate Development Co., Ltd. 63,019,805.79 530,752,224.38Hangzhou Gemdale Xianghu Real Estate Development Co., Ltd. 36,108,618.82 -Hangzhou Qiong long Investment Management Co., Ltd. 332,369.99 -Hangzhou Jinmu Real Estate Development Co., Ltd. 6,727,011.08 -Hangzhou Jinxiang Real Estate Development Co., Ltd. 359,088.88 -Ningbo Jinjie Real Estate Development Co., Ltd. 18,034,348.15 18,002,479.67Ningbo Jinxiang Real Estate Development Co., Ltd. 4,140,834.82 -Cixi Jinqi Real Estate Development Co., Ltd. 3,581,023.60 -Yuyao Gemdale Real Estate Development Co., Ltd. 269,559,706.21 50,076,703.58Cixi Jinheng Real Estate Development Co., Ltd. 9,873.17 -Shaoxing Gemdale Shenxing Real Estate Development Co., Ltd. 142,401,710.40 50,728,180.67Shaoxing Gemdale Guyue Real Estate Development Co., Ltd. 85,651.80 -Gemdale Corporation Jinhua Real Estate Development Co., Ltd. 236,571.46 -Hunan Jinlu Gemdale Real Estate Development Co., Ltd. 32,096,363.69 -Shenzhen Gemdale Residence Development Co., Ltd. 44,208,308.63 269,480,498.07Shenzhen Gemdale Old City Reconstruction Co., Ltd. 314,690,807.81 139,398,834.74Shenzhen Gemdale Property Project Management Co., Ltd. 6,815,165.42 -Shenzhen Gemdale Xincheng Real Estate Development Co., Ltd. 8,910,279.65 -Shenzhen Gemdale Industry Section Reconstruction Co., Ltd. 7,751,020.51 7,650,939.48Shenzhen Hong Gemdale Tennis Club Co., Ltd. 311,768,625.73 115,665,739.25Shenzhen Gemdale Beicheng Real Estate Development Co., Ltd. 14,409,967.84 -Shenzhen Gemdale Baocheng Real Estate Development Co., Ltd. 27,845,108.00 -Shenzhen Gemdale Longcheng Real Estate Development Co., Ltd. - 253,076,308.05Shenzhen Gemdale Hotel Co., Ltd. 8,646,920.15 6,830,854.66Shenzhen Gemdale Building Engineering Co., Ltd. 7,026.85 14,053.69Gemdale Corporation Zhuhai investment Co., Ltd. 49,344,256.29 -Zhuhai Green Investment Co., Ltd. 76,913,064.89 -Zhuhai Hejiada Investment Consulting Co., Ltd. 276,879,203.58 335,461,808.37Zhuhai Gemdale Real Estate Development Co., Ltd. 15,756,755.51 -Zhuhai Mendao Investment Co., Ltd. 220,544.38 -Zhuhai Zhushengyuan Real Estate Development Co., Ltd. 492,395.39 -Gemdale (Foshan) Real Estate Development Co., Ltd. 480,649,495.94 469,810,572.61Foshan Shunde Gemdale Real Estate Development Co., Ltd. 235,249.31 -Foshan Nanhai Gemdale Ruijin Real Estate Development Co., Ltd. 607,204.61 -Foshan Nanhai Gemdale Real Estate Development Co., Ltd. 2,536,265.87 -Dongguan Gemdale Property Investment Co., Ltd. 2,559,208.92 -Dongguan Gemdale Baodao Real Estate Development Co., Ltd. 2,249,404.38 -Dongguan New Century Runcheng Industry Investment Co., Ltd. 1,129.08 -Dongguan Gemdale Investment Development Co., Ltd. 6,004,550.00 -Yunnan Run’an Real Estate Development Co., Ltd. 67,559.71 -Famous Commercial Ltd. 20,047,136.37 20,047,705.61Shenzhen Gemdale Research, Development and Design Co., Ltd. 86,486.92 14,665,221.19Shenzhen Gemdale Property Management Co., Ltd. 92,309,672.94 104,415,135.66Hangzhou Gemdale Zhongtian Real Estate Development Co., Ltd. 318,400,248.26 530,902,562.36Nanjing Jinjun Real Estate Development Co., Ltd. - 9,503,561.28Total 14,727,716,191.95 13,667,055,929.25


147

(XIV) APPROAL OF FINANCIAL STATEMENTS

The Company's financial statements and the consolidated financial statements were approved by the board of directors and authorized for issue on August 19, 2014.

GEMDALE CORPORATION SUPPLEMENTARY INFORMATION FOR THE SIX MONTHS ENDED JUNE 30, 2013

1. NON-RECURRING PROFIT OR LOSS Unit:RMB

Items The Current

Period The Prior

PeriodProfit or loss on disposal of non-current assets (70,651.27) 11,622.60Tax refunds or reductions with ultra vires approval or without official approval documents - -

Government grants (Except for subsidies which have closely related to the Company's business and are in amount and quantities fixed in accordance with the national standard)

18,922,875.54 18,204,181.60

Money lending income (Except for money lending income earned from non-financial institutions by financial institutions whose qualification was approval by relevant government department)

- -

The excess of attributable fair value of identifiable assets and liabilities over the consideration paid for subsidiaries recognised on business - -

Profit or loss on exchange of non-monetary assets - -

Profit or loss on entrusted investments - -

Impairment losses provided for each asset due to force majeure - -

Profit or loss on debt restructuring - -

Business restructuring expenses (e.g., expenditure for layoff of employees, integration expenses, etc.)

- -

Profit or loss relating to the unfair portion in transactions with unfair transaction price - -

Net profit or loss of subsidiaries recognised as a result of business combination of enterprises under common control from the beginning of the period up to the business combination date

- -

Profit or loss arising from provisions other than those related to principal business activities of the Company - -

Except for those designated as effective hedging transactions related to the Company's common business, changes in fair values through profit or loss of held-to-maturity investments, financial assets and financial liabilities, as well as disposal profit or loss of financial assets and financial liabilities.

- -

Bad debt reversion of receivables for which impairment tests are performed individually - -

Profit or loss on entrusted loans - -

Changes in fair value recognized in profit or loss for those investment properties measured at fair value - -

Effect of one-off adjustment on profit or loss of current period according to regulations in fields of Tax, Accounting, etc. - -

Commission fee revenue from entrusted operation - -

Investment income on disposal of equity investment 38,162,596.51 81,060.15

Other non-operating income or expenses (8,675,710.25) (8,247,846.23)

Other non-recurring profit or loss 25,360,337.12 26,564,261.32

Tax effects of non-recurring profit or loss (1,200,057.39) (8,673,319.86)

Minority Interest effects (tax exclusive) of non-recurring profit or loss (18,084,861.91) (488,158.19)

Total 54,414,528.35 27,451,801.39


2. RETURN ON NET ASSETS AND EARNINGS PER SHARE ("EPS") The return on net assets and EPS has been prepared by Gemdale Corporation ("Company") in accordance with Information Disclosure and Presentation Rules for Companies Making Public Offering No. 9 - Calculation and Disclosure of Return on Net Assets and Earnings per Share (Revised 2010) issued by China Securities Regulatory Commission.

Profit for the reporting period Weighted average return on

net assets (%)

EPS Weighted average

EPS Diluted EPS

Net profit attributable to ordinary shareholders 0.54 0.04 N/A

Net profit attributable to ordinary shareholders after deducting non-recurring profit or loss

0.36 0.02 N/A

3. ANALYSIS OF CHANGES IN FINANCIAL STATEMENTS ITEMS

Unit: RMB F/S items Closing balance Opening balance Change by Causes for changes

Currency funds 17,312,293,709.87 18,609,949,221.67 (6.97%)Increase in investment for business expansion

Advances to suppliers 587,119,011.76 822,686,154.09 (28.63%) Decrease in land prepayment

Other receivables 9,950,900,887.59 10,126,599,754.86 (1.74%) Decrease in land deposits

Inventories 82,344,212,200.64 76,638,115,688.85 7.45% Expansion of the development size

Other current assets 9,082,249,506.72 3,826,338,997.84 137.36% Increase in prepaid tax Long-term equity investments

3,877,286,522.19 2,480,403,376.47 56.32% Expansion of equity cooperation size

Short-term borrowings 4,976,367,381.55 2,736,310,901.31 81.86% Increase in borrowings

Notes payable 106,456,261.57 314,972.18 33698.62%Increase in notes payable for construction costs

Accounts payable 7,678,804,721.36 10,081,654,234.82 (23.83%) Payment of construction and land cost

Advances from customers 36,669,862,629.33 30,276,042,182.49 21.12% Increase in pre-sales Employee benefits payable

304,511,600.16 653,657,927.39 (53.41%) Payment of salaries

Tax payable 276,673,509.27 665,260,082.00 (58.41%) Payment of accrued tax Non-current liabilities due within one year

11,518,638,003.60 9,092,725,435.75 26.68% Transfer from long-term borrowings

Long-term borrowings 19,903,259,113.05 16,963,097,519.64 17.33% Increase in borrowings

Bonds payable 5,477,701,456.30 6,483,515,823.00 (15.51%) Redemption of bonds

P/L items The Current Period The Prior Period Change by Causes for changes Revenue 9,083,871,342.25 8,794,931,787.69 3.29% Increase in sales recognition

Cost 6,957,962,974.95 6,313,301,446.01 10.21% Increase in sales recognition Selling and distribution expenses

403,250,520.70 381,240,036.57 5.77% Increase in promotion expenses

Administrative expenses 485,646,912.44 394,023,637.71 23.25% Expansion of business size Impairment loss in respect of assets

4,415,241.03 100,407,910.58 (95.60%)Decrease in provision for decline in value of inventories

Investment income (6,827,683.84) 8,932,857.65 (176.43%)Decrease in investment income from associates and joint ventures


The supplementary information provided by the Management was signed by the following personnel of Gemdale Corporation: Legal Representative: Chief Accountant: Person in charge of the Accounting Body: 19 August, 2014

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