招商局地产控股股份有限公司2014年年度报告摘要(英文版)

                                                                                          Summary of CMPD’s 2014 Annual Report



Stock Code: 000024, 200024

Stock Short Names: China Merchants Property., China Merchants B

Announcement No.: 【CMPD】2015-010

                                 Summary of 2014 Annual Report of
                 China Merchants Property Development Co., Ltd.
I.    Important Notice
The Summary of Annual Report 2013 is originated from the full Annual Report 2013, so that investors who want to know the details
should carefully read the full Annual Report 2013 simultaneously published in the websites such as Shenzhen stock exchange website
and the like which are specified by China Securities Regulatory Commission (CSRC).
Company Profile

                                        China Merchants Property, China Merchants
Stock Short Name                                                                      Stock Code           000024, 200024
                                        B

Listed Stock Exchange                   Shenzhen Stock Exchange

 Contact Person and Contact Way                      Secretary of the Board                       Securities Affair Representative

Name                                    Liu Ning                                      Cheng Jiang

                                        No.3 Building, Nanhai E Cool Park, No.6       No.3 Building, Nanhai E Cool Park, No.6
Address                                 Xinghua Road, Shekou Industrial Zone,         Xinghua Road, Shekou Industrial Zone, Nanshan
                                        Nanshan District, Shenzhen                    District, Shenzhen

Tel                                     0755-26819600                                 0755-26819600

Fax                                     0755-26818666                                 0755-26818666

Email                                   cmpdir@cmhk.com                               cmpdir@cmhk.com


II. Main accounting data and

(I) Main accounting data
                                                                                                                           Unit: RMB Yuan
                                                                                                         Increase or
                                                                                                         decrease of
                                                                                                         current year

                                                                                                         against
Main Accounting Data             2014
                                                                                                         previous
                                                                                                         year
                                                                                                         After
                                                        After adjustment      Before adjustment
                                                                                                         adjustment
Operating incomes                43,385,058,201.09      32,567,813,857.52     32,567,813,857.52          33.21 %        25,296,762,154.46
Net profits attributable to
the     listed       company     4,263,636,555.36       4,190,374,825.04      4,202,152,074.18           1.75 %         3,318,266,875.59
shareholders
Net profit attributable to
shareholders      of    listed
company after deducting          4,416,726,428.34       3,911,400,979.51      3,923,178,228.65           12.92 %        3,347,473,177.02
non-recurring profits and
losses
Net cash flows from
                                 -6,447,055,480.12      495,923,554.51        495,923,554.51             -1400.01 %     5,098,777,753.73
operating activities
                                                                                                     Summary of CMPD’s 2014 Annual Report


Basic earning per share
                                     1.66                   1.63                       2.45                        1.75 %           1.29
(Yuan/share)
Diluted earning per share
                                     1.66                   1.63                       2.45                        1.75 %           1.29
(Yuan/share)
                                                                                                                   Decrease of 2
Rate of return of net assets
                                     14.68                  16.68                      16.73                       percentage       15.19
(%)
                                                                                                                   points
                                                                                                                   Increase or
                                                                                                                   decrease
                                                                                                                   compared
                                                            End of 2013
                                                                                                                   with the end
                                     End of 2014
                                                                                                                   of previous
                                                                                                                   year
                                                                                                                   After
                                                            After adjustment           Before adjustment
                                                                                                                   adjustment
Total assets                         151,692,365,118.58     134,040,446,989.65         134,040,446,989.65          13.17 %          109,197,242,683.06
Net assets attributable to the
                                     31,094,416,110.82      26,725,501,967.24          26,725,501,967.24           16.35 %          23,393,515,534.13
listed company shareholders

1. The Company restated the previous annual accounting data due to changes in accounting policies In this year, according to new
requirements of accounting standard 2014, the Company has conducted retroactive adjustment to the 2013 annual financial statement;
in 2013 balance sheet, undistributed profit of RMB 11,777,249.14 was reduced and capital reserve of RMB 11,777,249.14 was
increased without impact on total assets; in 2013 profit statement, investment income and net profit of RMB 11,777,249.14 was
reduced.
During the reporting period, the Company has implemented the capitalization from capital public reserve plan. In accordance with
Information Disclosure Memorandum No. 21 - Matters Related to the Disclosure of Periodic Reports by Shenzhen Stock Exchange,
the Company has recalculated the earnings per share of 2012 and 2013 based on the increased stock after transfer.
3. During reporting period, the Company paid a lot of land price and infrastructure cost to strengthen land expansion due to
development need. As the operating cash outflow during the reporting period outweighed the annual operating cash inflow, the net
amount of cash flow generated from the operation is negative.
4. The YOY growth rate of basic earning per share and diluted earning per share is calculated based on the figures retaining all
decimal.


(II) Effect adjustment for net profit and net assets based on International Accounting Standards
(unaudited)
                                                                                                                                         Unit: RMB Yuan
                                 Net profits attributable to the listed company                Net assets attributable       to    the    listed   company
                                 shareholders                                                  shareholders
                                 2014                           2013                           End of 2014                    End of 2013
By International Financial
                                 4,263,636,555.36               4,190,374,825.04               32,434,245,339.82              28,065,331,196.24
Reporting Standards
By Chinese accounting
                                 4,263,636,555.36               4,190,374,825.04               31,094,416,110.82              26,725,501,967.24
standard
Difference        between
domestic and foreign             -                              -                              1,339,829,229.00               1,339,829,229.00
accounting standards
Including: adjustment of
                                 -                              -                              1,339,829,229.00               1,339,829,229.00
goodwill value
                                 There is no deviation of net profit of listing Company’s shareholders calculated as per International Financial Reporting
Description of Deviation         Standards and Chinese Accounting Standards. Main reasons for the adjustment of the net profit of listing Company’s
between Domestic and             shareholders subject to International Financial Reporting Standards are: in accordance with Chinese Accounting
Foreign       Accounting         Standards and relevant regulations, for equity investment difference caused by business merger of the same control, the
Standards                        capital reserve shall be adjusted, while the goodwill against merger caused by International Financial Reporting
                                 Standards shall be separately listed as assets.
                                                                                             Summary of CMPD’s 2014 Annual Report




 (III) Items and amount of extraordinary profit or loss
                                                                                                                    Unit: RMB Yuan

Items of extraordinary profit or loss                                      2014              2013

Losses and profits on disposal of non-current assets                       -3,997,255.04     256,255,563.72      -1,407,797.62

Government subsidies                                                       43,659,552.98     33,800,048.66       16,352,111.12
Profit generated when the investment cost for acquisition subsidiary
is smaller than the deserved fair value of identifiable net asset of the                     11,630,003.67
invested company.
Other profit or loss items recognized by CSRC                              -156,839,259.39

Other net non-operating revenue and expenditure                            -25,635,708.61    -3,883,513.02       -49,804,571.52

Influence of income tax                                                    -10,134,034.67    -7,253,985.40       2,766,668.96

Influence of minority shareholders’ profit or loss                        -143,168.25       -11,574,272.10      2,887,287.63

Total                                                                      -153,089,872.98   278,973,845.53      -29,206,301.43

 Note: the long-term equity investment after change in control of Shenzhen Overseas Chinese Town Co., Ltd. (OCT) by the Company
 is measured by fair value. The equity fair value is mainly inventory evaluation added value. In the year, based on the ratio of actual
 carry-forward inventory area in the total salable area of inventory to be carried forward on the date of control right change of OCT,
 the added value of long-term equity investment acknowledged by assessment added value subject to corresponding written off is
 RMB 156,839,259.39.
                                                                                                  Summary of CMPD’s 2014 Annual Report




(IV) Top ten shareholders
                                                                              Number of       shareholders
                                                                              at the end      of the fifth
Total number of shareholders at the 56,318       (A-shares: 45,827, B-shares:                              82,925        (A-shares: 72,797, B-shares:
                                                                              transaction     date before
end of the reporting period        10,491)                                                                 10,128)
                                                                              disclosure      of annual
                                                                              report
Information of shares held by the top ten shareholders
                                                                                                                                Pledged or frozen
                                                           Quantity of shares Increase/decr                       Quantity of status
                                     Nature of Sharehold                                      Quantity         of
                                                           held at the end of ease during                         held
Name of shareholders                 the         ing ratio                                    restricted    share
                                                           this      reporting this reporting                     un-restricted Sharehol
                                     shareholder (%)                                          held                              ding     Quantity
                                                           period (%)          period                             share
                                                                                                                                status
China Merchants Shekou Industrial State-owne
                                              40.38         1,040,128,975        346,709,658 1,040,128,975        None          None     None
Zone Co.,Ltd.                     d corporate
                                     Overseas
Full Space Investment Limited                     5.48      141,216,075          47,072,025    141,216,075        None          None     None
                                     corporate
China Merchants Securities (HK) Overseas
                                                  2.92      75,205,077           25,317,793    73,863,367         1,341,710     None     None
Co., Ltd.                       corporate
FOXTROT         INTERNATIONAL Overseas
                                                  1.61      41,580,000           13,860,000    41,580,000         None          None     None
LIMITED                       corporate
                                     Overseas
ORIENTURE INVESTMENT LTD                          1.55      39,904,717           13,301,572    39,904,717         None          None     None
                                     corporate
GOLDEN        CHINA       MASTER Overseas
                                              1.03          26,487,893           13,614,702    None               26,487,893    None     None
FUND                             institutions
                                 Domestic
Fullgoal Tianbo Innovative Theme non-state-o
                                             0.73           18,800,000           800,000       None               18,800,000    None     None
Stock Fund                       wned
                                 corporate
                                  Domestic
National Social Security Fund 118 non-state-o
                                              0.67          17,136,388           7,192,570     None               17,136,388    None     None
Portfolio                         wned
                                  corporate
                                  Domestic
National Social Security Fund 413 non-state-o
                                              0.58          15,000,000           15,000,000    None               15,000,000    None     None
Portfolio                         wned
                                  corporate
GREENWOODS CHINA ALPHA Overseas
                                    0.51                    13,031,565           11,451,175    None               13,031,565    None     None
MASTER FUND            institutions

Shareholding status of top ten un-restricted shareholders
                                                    Quantity of held un-restricted share at the end of this
Name of shareholders                                                                                        Class of shares
                                                    year
GOLDEN CHINA MASTER FUND                            26,487,893                                              B share

Fullgoal Tianbo Innovative Theme Stock Fund         18,800,000                                              A share

National Social Security Fund 118 Portfolio         17,136,388                                              A share

National Social Security Fund 413 Portfolio         15,000,000                                              A share

GREENWOODS          CHINA      ALPHA      MASTER
                                                    13,031,565                                              B share
FUND
Invesco Great Wall Domestic Needs Growth No
                                            12,567,625                                                      A share
Two Shares Securities Investment Funds
China Life Insurance (Group) Ltd. – traditional -
                                                   12,033,180                                               A share
general insurance products

NORGES BANK                                         11,641,091                                              B share

Chongqing International Trust Co., Ltd. Yuxintong
                                                  10,531,565                                                A share
series single trust No. 2
Jianxin Optimal Configuration Hybrid Securities
                                                10,226,163                                                  A share
Investment Fund





                                                                                                Summary of CMPD’s 2014 Annual Report


Shekou Industrial Zone and its subsidiaries - FOXTROT INTERNATIONAL LIMITED and ORIENTURE INVESTMENT LTD are Persons Acting
in Concert; GOLDEN CHINA MASTER FUND and GREENWOODS CHINA ALPHA MASTER FUND are Persons Acting in Concert. Dafeng
International, a subsidiary of Shekou Industrial Zone, has entrusted 73,863,367 shares of the Company to China Merchants Securities (Hongkong)
Co., Ltd.




(V) Block Diagram of Property Right and Control Relations between the Company and Actual Controller
at the End of Reporting Period


                                                              State-owned Assets Supervision
                                                              and Administration Commission
                                                              of State Council 100 %

                                                                        China Merchants Group

                                                                                100 %
                                                    40.38 %
                                                                        Shekou Industrial Zone

                          China                                                 100 %
                          Merchants                  2.87 %
                                                                           Dafeng International
                          Property
                          Developmen                                            100 %
                          t Co., Ltd.
                                                               Orienture Holdings Co. Ltd

                                                     5.48 %                                       100 %
                                                                        Full Space Investment Limited

                                                     1.61 %                                       100 %
                                                                Foxtrot International Limited


                                                     1.55 %                                       100 %
                                                               Orienture Investment Limited




III. Directors'' Report

(I) Summary

      1. Market review
      In 2014, the global economy was still experiencing a revival, with differential performance of the developed
economies and slow growth of emerging economies. Under “three major trends” of economic growth transition
phase, structural adjustment hardship phase and pre-stimulus policy digestion phase, the overall Chinese economy
shows a steady trend with a little decrease. Macroeconomic policy is seeking a balance among steady growth,
reformation promotion, structure adjustment and benefaction to people while preventing risks.
      In 2014, the Chinese real estate market showed a U-shaped carryover situation. Annual sales area of
commercial housing is 1,206,490,000 m2, with sales volume of RMB 7,629.2 billion, presenting the first negative
growth since financial crisis in 2008 on year-on-year basis. Affected by such factors as economic downturn, credit
squeeze, regulation continuation and housing overdraft, the real estate market of the first half of 2014 entered the
adjustment period. In the second half, with gradually flexible regulatory policy, in respect to release of housing
restriction policy, relaxation of credit restriction policy and asymmetrical reduction of interest, the real estate
market gradually recovers. Leading housing enterprises have achieved a substantial growth in annual sales, but the
overall market differentiation is obvious. \"Differentiation\" is mainly reflected in unbalanced sales, e.g., each
housing enterprise has a better sales performance in the second half than the first half; also reflected in difference
of various cities, e.g., the real estate market performance of the first and second-tier city with strong population
adsorption capacity and stable demand is significantly better than the third and fourth-tier cities with excess
supply and larger inventory digestion pressure; further reflected in difference of sale status against different
products, e.g., differentiation elimination rate of the medium and small-sized housing type is significantly higher
than that of large-sized housing type which benefits from strong demand and policy support. This is consistent



                                                                              Summary of CMPD’s 2014 Annual Report



with the sales data performance of CMPD. \"Differentiation\" dominates now and it requires higher comprehensive
ability of housing enterprises.
      In case the real estate sales and stock are at a record high and the demand growth is not enough, the real
estate industry will enter a relatively stable stage of development. More and more real estate developers begin to
improve efficiency, enhance benefit, reform model and other multiple aspects, conduct positive and useful
exploration along the whole value chain of the real estate industry, so as to respond to industry and market
changes and seek for their own survival and development road.
      2. Strategic objectives of the Company
      Only by grasping the general trend and conducting innovation and development in the new round of industry
change opportunities, can we ride the tide to race the top. During the reporting period, the Company follows the
changes in the trend of market and industry, to actively promote the strategic transformation. Under the new
normal conditions of national development mode transformation, the urban upgrading becomes the new
opportunity for the development of real estate industry. Under this background, the Company will take use of its
thirty-years’ experience in city upgrading in Shekou and thirty-years’ accumulated various professional ability,
relying on China Merchants Group''s strong development resources and powerful industrial background, to strive
to create itself as \"China''s leading expert in urban upgrading.\" Under the guidance of this strategic objective, the
Company will stick to one foundation, explore two new ways, develop three fields and forge comprehensive
strength, to achieve rapid and balanced growth.
      One foundation - the Company will continue to expand the advantages in middle and high-end residential
market, and further extend high-quality residential services for the urban elites;
      Two new ways - the Company will expand overseas business and build a light asset management platform.
Conduct global allocation of resources through overseas platform, to prevent regional market risks; exploit the
real estate business value, to form a variety of professional operating platforms of the whole industry chain.
      Experiential complex of three fields - build experiential cultural recreation complex product line, promote
\"sea\" series waterfront complex and create an \"urban living room” at the level of city card.
      Theme industrial park of three fields - seize the opportunity of urban upgrading and new city plot
development, increase the depth of cooperation with the industry’s best operators to achieve effective replication
of \"Shekou model\".
      Health real estate of three fields – established commercial mode of combination between high-end hospitals
& high-end pension and health care and real estate development, to provide support for creating competitive
differentiation of the real estate business. Strength capability of health management operations and provide
guarantee for the value of healthy real estate.
      In the future, the Company will focus on forging comprehensive operational capability, green technology
ability, red service capacity and integration capacity of industry and finance, refining the core competitiveness;
enhancing human capital, financial capital, institutional capital, brand capital and cultural capital to support the
implementation of the strategic objectives of the Company.
      3. Strategy implementation of the Company during the reporting period
      Achievements in performance indicators – in 2014, the Company achieved a contracted sales area of
3,642,800 m2, having a year-on-year growth of 32.92%, with contracted sales amount of RMB 51.049 billion,
having a year-on-year growth of 18.18%. Faced with such adverse factors as market adjustment and late formation
of their own value, the Company actively implements sales tactical requirement of \"market-oriented, reasonable
pricing and differentiation elimination\", which promotes the realization of sales objectives.
      Fruitful achievements from intelligent development – realize strategic layout of “thirty years, thirty cities” at
the 30th anniversary of establishment of the Company, with successful distribution of 30 cities nationwide. The
first and second-tier cities are significantly consolidated and strengthened. During the year, the new project
resource is 6,107,400 mvia bid, auction and listing, acquisitions and other means in the core cities such as
Shanghai, Guangzhou, Shenzhen and Nanjing, wherein the corporate interest area is 4,662,300 m
      Capital financing innovation - in order to further optimize the capital structure of the Company, quickly start
the program of issuing RMB 8 billion A shares convertible bonds, the current program is still in the review stage
of CSRC. For debt financing, actively explore new channels on the basis of conventional bank loans guarantee
funds, create a new mode to revitalize the stock of commercial real estate to achieve development funds; obtain
“investment real estate debt plan” issued by insurance agency for the first time; obtain registration approval of
NAFMII for the medium-term notes of the Company for the first time, which opens access to debt financing of
stable and long-term low-cost and flexible purpose. Annual comprehensive financial cost of the Company is
5.10%, having a year-on-year decrease of 0.13%.



                                                                             Summary of CMPD’s 2014 Annual Report



      Expansion of cooperation between industry and finance – in 2014, the Company entered into strategic
cooperation agreements respectively with China Merchants Capital and China Merchants Bank. Conducting
cooperation exploration with China Merchants Capital on project equity level and conducting attempt with China
Merchants Bank on brand linkage, become the important practice of synergetic development and innovative
business mode for the two core industries of China Merchants Group - \"finance\" and \"real estate\".
      Incentive mechanism breakthrough - during the reporting period, the Company first introduced the stock
option incentive plan, to award 143 employees 23,228,300 stock options on September 18, 2014, to make the
interest of core team be closely tied to the overall interests of the Company, which was the beginning of the
continued optimization of incentive and restraint mechanisms of the Company. With the implementation of stock
options incentives, the Company will further improve the governance structure, and promote the establishment of
3D incentive mechanism combining short, medium and long-term incentives.
      Expertise enhancement - during the reporting period, the Company adheres to the ideas of \"cost-oriented
support first\", to control the cost by increasing the standardization rate of new projects, target rate of quota design,
strategic sourcing rate, etc. In 2014, the mean cost of construction and installation of national projects under
construction was RMB 127/m2 lower than the year beginning; the product standardization was further enhanced,
achieving innovative design achievements of “two children” series product, completing R & D of such products as
I-Love3.0 demanding product, I-Hope first-changed house type and service-type apartments; application of green
technology became available, forming a reproducible implementation path to create residential project green value;
customer’s satisfaction was enhanced steadily. The third-party survey data shows that, the evaluation results of the
external overall customer satisfaction of the Company increases by 10% on year-on-year basis, furthermore, that
of the property customer increases 19% on year-on-year basis.
      Property management innovation – in 2014, China Merchants Property takes Shekou area as test field, to
explore the development of large-scale and professional operation of community value-added services, and
gradually establish a system of proverty value-added service products. Idea of \"livable at home” is applied to
partial new projects, customizing decoration, home furnishing purchase and other value-added services based on
characteristics of the project, to provide comfortable and personalized service experience to owners. The first
community offline experience pavilion – “party at home” is introduced after “network at home”, designed to
create an intelligent community and pursue quality life of “gathering life, intelligent community, harmonious
neighborhood, luxuriant street and economic enjoyment”.
      During the reporting period, the management results of the Company are widely accepted. In consecutive 12
years, the Company has won the “2014 TOP 10 Shanghai and Shenzhen Listed Real Estate Companies with
Comprehensive Strength” which was evaluated and selected by the Enterprise Institute of Development Research
Center of the State Council, Real Estate Institute of Tsinghua University and China Index Academy, the “2014
TOP 10 Shanghai and Shenzhen Listed Real Estate Companies with Wealth Creation Ability”, “2014 TOP 10
Shanghai and Shenzhen Listed Real Estate Companies with Investment Value” and “2014 TOP 10 Chinese Real
Estate Companies with Brand Value”; it has won the “China Blue Chip Enterprise Award in Real Estate” that is
the evaluated and selected by The Economic Observer in combination with Sina Leju for consecutive 10 years; it
has won “The Annual Comprehensive Award of Best Real Estate Enterprise Citizenship” granted by 21st Century
Business Review, 21st Century Business Herald and 21st Century Enterprise Citizenship Research Center; it has
won the “Top 100 Chinese Valuable Main-board Listed Companies” evaluated and selected by Securities Times
and China Fund News; it has won the title of “The Best Main-board Blue Chip Company” evaluated and selected
by Sina Finance; it has won the “Building Energy Conservation Star – Organization with Outstanding
Contribution” evaluated and selected by China Association of Building Energy Efficiency and other awards.

(II) Analysis of Core Competitive Advantages

1. Strong China Merchants and more collaboration
      China Merchants Group owns a number of outstanding companies, including China Merchants Holdings
(International) Co., Ltd., China Merchants Ships Co., Ltd., China Merchants Roads Co., Ltd., China Merchants
Bank Co., Ltd., China Merchants Securities Co., Ltd., Shekou Industrial Zone, and China Merchants Capital for
Direct Investment Fund Management Platform. CMPD is a flagship enterprise and the only listed company in real
estate of China Merchants Group. In recent years, China Merchants Group, specialized in industrial and financial
field, vigorously promotes the combination of industry and finance. Through the effective interaction between
capital and industry, it gives play to synergy benefits so as to develop by leaps and bounds. In addition, the China
Merchants Group with powerful comprehensive strength has greater influence and appeal on the country and the
world, and its own external collaboration resources will also bring tremendous business opportunity to the


                                                                            Summary of CMPD’s 2014 Annual Report



Company.
      In 2014, on the base that China Merchants Group vigorously practiced the strategy of synergetic
development and innovative development, the Company and counterparts strived to exploit the opportunity of
synergetic cooperation. So far, a solid strategic cooperation alliance has been built in project cooperation, financial
innovation, combination of industry and finance, brand linkage, etc.
2. Abundant capital and sound finance
      The Company continues to adopt the operation style of sound finance from China Merchants Group, and it
always puts the financial risk control in the first place. Through years of effective fund management and operation,
the overall fund costs and debt ratio of the Company are remained at a low level, which provides abundant
leverage space for the continuous expansion in the future. In addition, the company insists diversified financing
and continues to optimize the capital structure to lay a solid capital foundation to the expansion.
3. Promote simultaneously development and investment; pay equal attention to marketing and operation
      The Company pursues moderate growth of marketing scale, and elaborately lay out accumulation of high
quality assets, continuously accumulating treasure to make sure the sustainable development. Commercial real
estate preserved by the Company covers polytypes such as office building, shopping mall, apartment and factory
building, which can not only bring about steady cash flow, but also enjoy appreciation in asset value brought by
urban development. 90% commercial real estate built by the Company concentrates upon Shekou Industrial Zone;
with the development and construction of former Haishekou free trade area, this commercial real estate will
produce giant commercial value.
      During the past 30 years, Shekou had created many legends. On December 26, 2014, the former Haishekou
Free Trade Area of Shenzhen City was approved. China Merchants Group will cooperate with its all subsidiaries,
hold on to this historic opportunity, comply with national strategy, receive the concept of “let business
successfully push forward the progress of the time”, give full play to unique advantage of central enterprises
stayed in Hong Kong; around the “institutional innovation” and “deepening the cooperation of Guangdong-Hong
Kong-Macao”, the Company will do good jobs of all kinds of specific tasks for implementing the free trade area,
fighting for playing greater important role in carrying out the national strategy of “one area, one way”, and
facilitating that Guangdong Province become bridge tower of Maritime Silk Road in the 21st century and
Shenzhen City builds the bay area economy, making bellwether in the beginning of the reform and opening-up
policy become the new model of deepening reform and opening-up. As the only subsidiary listed platform of real
estate of the Group, China Merchants (Shenzhen) Property will continuously promote its operation ability, and
actively participate in the development and construction of free trade area.




IV. Events related to Financial Report

(I) Explanation of changes in accounting policy, estimations and accounting methods compared with the
financial reports of previous year

     1. Changes in accounting policies
     In 2014, Ministry of Finance newly issued or revised a series of accounting standards including Accounting
Standards for Enterprises No. 2 – Long-term Equity Investments, the Company has executed relevant accounting
standards in compiling annual financial statement and conducted retroactive adjustment to 2013 annual financial
statement. Besides, the Company has disposed the issues according to relevant convergence provisions.
     Details are shown as follows:
     Before 2014, the dilution income incurred by decreased proportion of shareholding in the invested company
was included in investment income, and such declining proportion was resulted from capital increase and share
expansion in the invested company. Then such dilution income was included in the rights and interests in
accordance with the revised Accounting Standards for Enterprise No. 2 - Long-term Equity Investments. The
Group adopted the retroactive adjustment approach for such accounting policy change and the comparative
statement 2014 was restated. The decreased undistributed profit in balance sheet 2013 was RMB 11,777,249.14,
increased capital reserve RMB 117,772,491,400, and gross value of assets had no influence. 2013 profit
statement reduced investment income and net profit of RMB 11,777,249.14.



                                                                            Summary of CMPD’s 2014 Annual Report



     According to the Accounting Standards for Enterprise No. 30 - Presentation of Financial Statement, the
deferred income items are added in the financial statement. Therefore, the Group adopted the retroactive
adjustment approach and restated the comparative statement 2014. The decreased other non-current liabilities in
balance sheet 2013 was RMB 11,236,760.00, decreased other payables RMB 4,710,020.00, increased deferred
income RMB 9,736,760.00, increased other current liabilities RMB 6,210,020.00 and total liabilities had no
influence.
      According to the revised Accounting Standards for Enterprises No.30 – Reporting Financial Statement,
other comprehensive income items have been added in balance sheet of financial statement; the Company
has adopted retroactive adjustment method to revise the 2014 comparative statement by expressing the
translation reserve as other new comprehensive income items.
     The changes mentioned above have been submitted to the BOD for approval.
     2. Changes in accounting estimates
     During this year, reviewed and approved by the 11th meeting of the 7th BOD and recognized by the 15th
meeting Resolution of the 7th BOS, the Company has altered the accounting estimate of depreciation of fixed
assets and amortization of investment real estate.
     The BOD deemed this alteration of accounting estimate as necessary for the provisions of relevant laws and
regulations and the actual situation of the Company, the alteration has intensified the relationship of asset
depreciation disposal and actual use of asset. After the alteration, the depreciation of fixed assets and amortization
of the Company accounting of investment real estate tend to be more standard.
     This alteration of accounting estimate shall be effective from March 14, 2014 when it is approved by the
BOD, resulting in depreciation amortization accrual during the reporting period increased by approximately RMB
9,850,000 than that before alteration.


(II)Explanation on the track and restatement of major accounting errors during the reporting period

     Not applicable

(III)Explanation of changes in the scope of consolidated statements compared with the financial reports
of previous year

    33 companies in total are newly included by the consolidation during this year, of which 16 are project
companies with main operation of real estate development and sales, 6 are companies mainly operating operation
management of commercial property and 11 are newly established overseas investment companies.
    China Merchants (Zhangzhou) Honglong Real Estate Co., Ltd. is no longer included by the consolidation
scope as its settlement has been done in this year.
    See specific details of changes in the scope of consolidated statements in Note 7 to the financial report.


(IV)Explanations on the ‘nonstandard auditing report’ of the certified accountant in the report period by
the Board of Directors and the Board of Supervisors

     Not applicable





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