GREENLAND HONG KONG HOLDINGS LIMITED ANNUAL REPORT 2013 (Incorporated in the Cayman Islands with limited liability) ( ) Stock Code : 0337

Transcription

1 GREENLAND HONG KONG HOLDINGS LIMITED ANNUAL REPORT 2013 (Incorporated in the Cayman Islands with limited liability) () Stock Code : 0337

2 % % 500

3 CONTENTS Financial Highlights Key Events of the Year Awards and Accolades Chairman s Statement Property Projects Portfolio Property Investment Management Discussion and Analysis Corporate Governance Report Directors and Senior Management Profiles Report of the Board of Directors Report of the Auditors Consolidated Statement of Comprehensive Income Consolidated Balance Sheet and Company Balance Sheet Consolidated Statement of Changes in Equity Consolidated Statement of Cash Flows Notes to the Consolidated Financial Statements Summary of Consolidated Financial Information

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5 4 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report 2013 FINANCIAL HIGHLIGHTS RESULTS HIGHLIGHTS RMB Million RMB Million Change Revenue 5,448 1,767 +3,681 Gross Profit 1, ,041 Profit/(Loss) from Operating Activities 963 (425) +1,388 Net Profit/(Loss) 33 (988) +1,021 Attributable to: Equity Holders of the Company 35 (938) +973 Minority Interests (2) (50) +48 Earnings/(Loss) Per Share (RMB) Basic 0.02 (0.92) Diluted 0.02 (0.92) RMB Million 6,000 5,500 5, , ,500 4,000 3,500 3,000 2,500 2,000 1,500 1,767 1,446 1, (938) ,000 Revenue Gross Profit Net Profit/(Loss) attributable to equity holders of the Company

6 5 FINANCIAL HIGHLIGHTS (Continued) RMB Million RMB Million Change Total Assets 21,740 23,053-1,313 Total Liabilities 16,033 18,744-2,711 Total Equity 5,707 4,309 +1, REVENUE ANALYSIS RMB Million RMB Million Change Sales of property 5,054 1,415 +3,639 Rental income Property management income & other related service Hotel and golf operation Education Total 5,448 1,767 +3, % 2.1% 1.1% 1.3% % Sales of Property Rental income Property management income & other related service Hotel and related services Education

7 6 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report 2013 KEY EVENTS OF THE YEAR Successful issue of shares equivalent to 60% of the enlarged share capital to Greenland Holding Group and change of name to Greenland Hong Kong Holdings Limited 60% Acquisition of project in Hangzhou injected from Greenland Group Capital injection into the Kunming Project of Greenland Group Acquired land in Heqing Town, Pudong New Area, Shanghai Acquired land in Jiangwan Town, Hongkou District, Shanghai Acquired land in Nanxiang Town, Jiading District, Shanghai Acquired land in Wuliqiao Area, Huangpu District, Shanghai Acquired land in Lingshan Area, Haikou Province Acquired land in Wuyuan River Area, Haikou Province Acquired land on Binggong Road, Xuzhou City, Jiangsu Province Acquired land in Jiaoshan Lake Area, Xuzhou City, Jiangsu Province Acquired land in Wuxiang New District, Nanning City, Guangxi Autonomous Region Disposal of equity interests in Wuxi Jin Gui Li Project Disposal of equity interests in Peninsula Shanghai Issue of USD700 million 4.75% bonds due ,000, Redemption of USD200 million 13.5% senior note due ,000,

8 7 AWARDS AND ACCOLADES NANNING NANNING GREENLAND CENTER Awarded the Most Anticipated Project in Nanning in 2013 by Soufun NINGBO GREENLAND BIHU INTERNATIONAL The China (Ningbo) Internet Media Award Popular Benchmarking E-Commercial Project in 2013 by Leju The 2013 Popular Project of the Second Golden Fox Award of Sohu Focus 2013 The Real Estate Project with the Best Ecological Landscape in the List of Top Real Estate Projects in Ningbo of SHANGHAI HOLIDAY INN PUDONG KANGQIAO Best 1OO MICE Award Best 100 First Runner Up in December in 2013 IHG GC Sales & Marketing Tycoons Competition organized by IHG Won the prize of the best project of charity 2013 Kangqiao Town, Pudong New Area 2013 Awarded The Excellence 2013 by Tripadvisor.com Tripadvisor.com 2013 Champion of the Black box competition in IHG cooking charity

9 8 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report 2013 AWARDS AND ACCOLADES (Continued) SUZHOU GLOBAL 188 Global 188 Tian Yue Hui in Suzhou was awarded the 2013 Asia Pacific s Significant City Landmark Gold Award in the Second Valuable Real Estate Projects Award Greenland Hong Kong Suzhou Branch awarded the Best Contributor to the City and Global 188 Tian Yue Hui was awarded the Most Influential City Landmark Architecture under the Suzhou Taste of Life Awards 188 HAINAN GREENLAND HAI CHANG LIU Greenland Hai Chang Liu was awarded the Significant Real Estate Project of Investment Value in Hainan in 2013 HAINAN GREENLAND THE FLOREA Greenland The Florea was recognized as the Most Valuable Residential Development in Hainan by Sohu Focus HUANGSHAN HIDDEN TIGER GOLF Hidden Tiger Golf Club was awarded the China Golf Course Silver Diamond Award in the Five-Diamond Selection of China Golf Course at the Greatest Golf Contributor in China and the 2013 Five-Diamond Selection of China Golf Course Award Ceremony jointly organized by Golf Punk magazine and China Minsheng Bank Credit Card Center

10 9 AWARDS AND ACCOLADES (Continued) HUANGSHAN GREENLAND TAIPING LAKE INTERNATIONAL RESORT Greenland Taiping Lake International Resort ranked among the Top 10 Anhui Projects in No. 2 Work of Greenland Taiping Lake International Apartment The Forests was awarded the 2013 National Classic Architecture Gold Award, which has been recognized as the Oscar award in China s real estate sector 2013 Greenland Taiping Lake International Resort was awarded the CIHAF2013 (Anhui) Best Resort Complex CIHAF2013

11 10 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report 2013 CHAIRMAN S STATEMENT The year 2013 was a key milestone year in the Group s ( Greenland Hong Kong Holdings Limited ) development as it started its new journey under the guidance of Greenland Group. Upon the completion of the subscription of 60% enlarged share capital of SPG Land (Holdings) Limited by Greenland Holding Group, we have launched the brand new Greenland Hong Kong Holdings Limited and became the international capital operation channel and brand display window of Greenland Group. This is a mutually beneficial transaction whereby the intangible values of both parties have gone up, as it brings together two of the leading real estate developers to create one of the most competitive real estate developers in China. As a bridge that links domestic and overseas resources, Greenland Hong Kong will provide Greenland Group with a new growth driver to achieve higher goals and offer powerful support towards its sustainable development. Greenland Hong Kong is now fully supported by a strong parent company, a Fortune 500 company with leading position in the Chinese property market and extensive overseas foothold, with its many property development projects across the world. Backed by Greenland Group s rich resources, large scale, mature brand, advanced management and passionate corporate culture, the Group is in a better position than ever to achieve quality growth in the years ahead. FINAL RESULTS In 2013, the Group achieved outstanding performance and recorded a total revenue of approximately RMB5,448 million, representing a yearon-year increase of 208%. Net profit attributable to equity holders of the Company amounted to approximately RMB35 million, compared to a net loss of RMB938 million in Basic and diluted earnings per share attributable to equity holders of the Company amounted to RMB0.02 per share, compared to a net loss of RMB0.92 per share for the year ended 31 December The Board recommended a final dividend of HK$0.05 per Ordinary Share and HK$0.05 per CPS for the year REVIEW OF OPERATIONS IN 2013 In 2013, albeit the slight slowing down of Chinese economy, the country still recorded a GDP growth of 7.7%, a pace faster than the government s official target. The moderate economic growth, coupled with increasing urbanization and strong underlying demand, continued to give impetus to the property markets in China, where there was an overall rising trend in both volume and price despite the property curbs imposed by the government to prevent overheating in the market. Meanwhile, the high level of per capita GDP in China and the pursuit of high-end living style by emerging middle-class continued to create ample room for the development of leisure-based property development in the country. 208%5,448,000,000 35,000, ,000, %

12 11 CHAIRMAN S STATEMENT (Continued) 60% 500 During the year, the Company continued to adopt flexible sales and marketing strategies according to geographical locations, local market conditions and characteristics of different projects, resulting in satisfactory contracted sales growth. Apart from the outstanding performance of The Metropolitan, the Group s award-winning residential project in Kunming, it is encouraging to see the fruitful results in 2013 from the seeds we sowed in the second-tier cities, including Hai Chang Liu and Florea in Haikou, as well as Emerald Bay in Changshu, Jiangsu. It is worth noting that the Group managed to maintain its average contracted selling price at a higher than average market level in the cities where the Group s projects are located. Also, the Group s superior products and services have been widely recognized, further consolidating its position as a premier property developer with established presence in the Yangtze River Delta Region. Backed by the strong support of Greenland Group and more diversified financial channels, the Group continued its regional development strategy which focuses on the key Tier 1 and Tier 2 cities with great potential and well developed markets. During the year, the Group actively expanded its footprint in Yangtze River Delta and Pan-Pearl River Delta by securing land parcels in Shanghai, Hangzhou, Kunming, Xuzhou, Nanning and Haikou. As a result, the Group s overall land reserves increased to approximately 9.3 million square meters as at 31 December ,300,000

13 12 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report 2013 CHAIRMAN S STATEMENT (Continued) Furthermore, the Group formed strategic partnerships with China Resources Land for the development of two projects in Shanghai and Xuzhou, and with Cifi Holdings for the development of Hangzhou Greenland Cifi City Project through the injection by our parent company. With a broadened regional framework, the Group believes that its future development will be more stable, balanced and sustainable. The Group also capitalized on the opportunities in the international capital markets to strengthen its financial position to fuel future growth. In October 2013, the Group successfully issued US$700 million of 3-year bond at an interest rate of only 4.75% per annum. It was followed by the issuance RMB-denominated bonds in January 2014, at an interest rate of 5.5% per annum in 100% of the principal amount of RMB1.5 billion. In the same month, the Group s subsidiary which owned 50% interest in Hangzhou Greenland Cifi City Project also raised a three-year offshore loan in US dollar and HK dollar with an aggregate amount equivalent to approximately USD320 million, and a three-year onshore loan facility of RMB1 billion. PROSPECTS AND FUTURE STRATEGY In the year ahead, we believe there will be uncertainties in the government s macro policies targeting the property sector and volatility from time to time as well as imbalanced performances in different regional real estate markets. Nonetheless, we believe that the long term fundamental factors that will support the growth of the Chinese property market remains unchanged namely urbanization, economic growth and upgrade demand. As such, the Group will strive to maintain its competitive edge and growth prospects through strategic regional expansion, gradual expansion of product offerings, and provision of high quality products and services. 700,000, % 50% 320,000, In order to enlarge its scale rapidly and to maximize the financing capabilities of its listed platform, the Group has mapped out its first five-year plan for the period from 2014 to 2018, clearly laying down the strategic goals in different aspects. The plan, known as the " " strategy, refers to (i) the exploration in 4 areas: exploration of new regions, modes of development, new product trends and innovative management systems; (ii) building up 3 core capabilities: business operation capability, capability of achieving quality and speed as well as capability of R&D and marketing planning; (iii) 2-fold organizational protection by cultivating corporate culture and developing talent pipeline; and (iv) maximizing the financing capability of the Hong Kong-listed platform to realize a positive cycle and an accelerated growth in financing, rapid development and cash flow. The Group s target is to achieve a CAGR of above 50% and sales of over RMB50 billion by 2018 in a bid to become a leader among Hong Konglisted mainland property developers (i)4 (ii)3 (iii) (iv) 50% 500

14 13 CHAIRMAN S STATEMENT (Continued) As for the regional development plan, the Group will continue to consolidate its position in existing markets and increase its exposure to the following key regions, namely Yangtze River Delta, Pearl River Delta, Fujian, Hainan and Southwest regions of China in the coming three years. In the longer run, the Group will seek to expand into other regions should suitable opportunities arise. To further strengthen its competitive position, the Group will strive to improve its existing product lines, actively align to Greenland Group s overall strategy, and gradually develop new products and extend product lines. While continuing to replicate its mature product lines, the Group will tap the market demand for urban infrastructure enhancement to promote land development, construction of transportation networks and other municipal infrastructure by adopting the industrial complex model of development. Building on its successful tourism projects in Haikou and Huangshan, the Group will step up its efforts in marketing and product development for the region. The Group will also develop intelligent cities, aiming at enhancing people s requirements towards urban environment by incorporating modern planning concepts, health, retired life and green energy with living communities. With our eyes fixed on the horizon, we are making definite steps towards becoming the enterprise we aspire to be. Working together, I am confident that we can write yet another glorious chapter in China s real estate market. APPRECIATION Our achievements in 2013 were made possible only with the support of our shareholders, investors and customers, and I would like to thank our staff sincerely for their dedication. I also wish to extend my gratitude to our shareholders, customers, business partners and other investors for the support and trust they have placed in us. Greenland Hong Kong Holdings Limited Chen Jun Executive Director, Chairman and CEO

15 14 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report 2013 PROPERTY PROJECTS PORTFOLIO WE HAVE ACCUMULATED SUBSTANTIAL EXPERIENCE IN DEVELOPING PROJECTS. THE MAP BELOW SHOWS THE GEOGRAPHICAL COVERAGE OF OUR PROPERTY DEVELOPMENT PROJECTS AS AT 31 DECEMBER SHANGHAI YANGTZE RIVER DELTA TAIYUAN HAIKOU KUNMING XUZHOU NANNING Cambridge Forest New Town Oriental Garden (Cambridge Watertown) Tiffany (Cambridge Waters) Shanghai Holiday Inn Pudong Kangqiao Greenland Free Harbour Greenland Xin Du Hui Huangpu District Wuliqiao Project Jiading District Nanxiang Town Project Suzhou Global Wuxi Greenland Xi Shui Dong Changshu Greenland La Casa Greenland Emerald Bay Ningbo Greenland Bihu International Huangshan Greenland Taiping Lake Resort Project Hangzhou Greenland Cifi City Greenland Shanding Park Greenland The Florea Greenland Hai Chang Liu Greenland Lingshan Project Greenland Wuyuan River Project The Metropolitan Greenland Hai Po Lan Ting Greenland Xiang Shu Hua Cheng Greenland Yunduhui Square Binggong Road Project Jiaoshan Lake Project Nanning Greenland Center

16 二零一三年年報 綠地香港控股有限公司 PROPERTY PROJECTS PORTFOLIO (Continued) 物業項目簡介 續 TAIYUAN SUZHOU 蘇州 WUXI 無錫 XUZHOU CHANGSHU 常熟 HUANGSHAN SHANGHAI 黃山 上海 HANGZHOU NINGBO 杭州 寧波 KUNMING K NANNING HAIKOU 海口 15

17 16 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report 2013 PROPERTY PROJECTS PORTFOLIO (Continued) SHANGHAI PROJECTS 1. CAMBRIDGE FOREST NEW TOWN Site area (sq.m) 1,584,334 GFA (sq.m) 1,150,697 Brief Introduction One of the largest low-density residential developments in Shanghai Within 25 minutes driving distance to the city center ORIENTAL GARDEN (CAMBRIDGE WATERTOWN) Site area (sq.m) 304,001 GFA (sq.m) Brief Introduction 202,629 The largest Chinese-style, lakeside villa development in Shanghai The project has approximately 700 houses; Located in Qingpu District; 25km from Hongqiao Airport Adjacent to ancient water town Zhujiajiao; 1,700-year history and a famous tourist site; excellent ecological area 1,700

18 17 PROPERTY PROJECTS PORTFOLIO (Continued) 3. TIFFANY (CAMBRIDGE WATERS) Site area (sq.m) 439,667 GFA (sq.m) 579,696 Brief Introduction A large-scale property development comprising mainly residential properties targeted at middle class customers Within 5 minutes to the nearest Metro station and within 20 minutes to the city center by the subway 5 4. SHANGHAI HOLIDAY INN PUDONG KANGQIAO Site area (sq.m) 42,750 GFA (sq.m) 59,630 Brief Introduction The project is located close to the Pudong airport, the 2010 World Expo site and the upcoming Shanghai Disneyland 2010 The hotel has 400 guest rooms. This project also consist of apartments, retail space and conference facilities 400

19 18 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report 2013 PROPERTY PROJECTS PORTFOLIO (Continued) SHANGHAI PROJECTS 5. GREENLAND FREE HARBOUR Site area (sq.m) 69,172 GFA (sq.m) 153,213 Brief Introduction A mixed development of commercial and office Located in Heqing Town, within Shanghai Free Trade Zone, Pudong New Area, Shanghai, 24km to People s square and 11km to Pudong airport GREENLAND XIN DU HUI Site area (sq.m) 7,479 GFA (sq.m) 22,438 Brief Introduction A mixed development of commercial and office Located in Hongkou District, Shanghai, close to Baoshan District and Zhabei District, about 1.3km to Jiangwang Station of Metro Line

20 19 PROPERTY PROJECTS PORTFOLIO (Continued) 7. HUANGPU DISTRICT WULIQIAO PROJECT Site area (sq.m) 64,980 GFA (sq.m) 245,550 Brief Introduction A mixed development of residential, commercial and office Located in the downtown, at west of Meng Zi Road, north of Long Hua Road, east of Lu Ban Road and south of the Planned Green Belt in Huangpu District, Shanghai, within 2010 World Expo Area 2010 To be developed into a new landmark in Shanghai 8. JIADING DISTRICT NANXIANG TOWN PROJECT Site area (sq.m) 11,229 GFA (sq.m) 28,072 Brief Introduction A mixed development of commercial and office Located at east of Cha Xi Road and south of Jin Mai Road

21 20 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report 2013 PROPERTY PROJECTS PORTFOLIO (Continued) SUZHOU PROJECT GLOBAL Site area (sq.m) 14,896 GFA (sq.m) 149,308 Brief Introduction Located in the CBD of Suzhou Industrial Park, near Jinji Lake, underground connected to the subway A landmark project consisting of serviced apartment (Frasers Suites), Tian Yue Hui Office, grade A office tower and retail podium, the tallest building completed in vicinity Fraser Suites Suzhou situated in Global 188 officially opened in May WUXI PROJECT GREENLAND XI SHUI DONG Site area (sq.m) 248,800 GFA (sq.m) 695,400 Brief Introduction Located in the heart of Wuxi and in close proximity to the central commercial and business district. Currently the largest city-core development project in Wuxi, to be a multi-phase and large-scale city-centre integrated development comprising residential and commercial compound

22 21 PROPERTY PROJECTS PORTFOLIO (Continued) CHANGSHU PROJECTS 1. GREENLAND LA CASA Site area (sq.m) 119,769 GFA (sq.m) 86,728 Brief Introduction Situated at the foot of Yu Mountain, facing the national park and with established amenities and infrastructures A prestigious project in the area consisting of townhouses and duplexes units 2. GREENLAND EMERALD BAY Site area (sq.m) 107,391 GFA (sq.m) 121,325 Brief Introduction Situated at the unique location and is adjoining the scenic Shang lake to the north along with impressive landscape

23 22 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report 2013 PROPERTY PROJECTS PORTFOLIO (Continued) NINGBO PROJECT GREENLAND BIHU INTERNATIONAL Site area (sq.m) 90,974 GFA (sq.m) 125,691 Brief Introduction Acquired in February 2011 with an excellent location at the entrance to Hangzhou Bay Bridge linking Shanghai to its southwest, City Express Ring Road to its east, Yubei Expressway to its north and is adjacent to Xiaoyong Railroad A strategic move to mark the Group s expansion into Zhejiang province, and establish a more comprehensive coverage of the Yangtze River Delta HUANGSHAN PROJECT GREENLAND TAIPING LAKE RESORT PROJECT Site area (sq.m) 2,283,733 GFA (sq.m) 1,141,867 Brief Introduction Located in the northern part of Huangshan, close to the legendary scenic Taiping Lake Multi-phase resort development comprising five-star hotels, golf course, resort villas and apartments A golf practicing facility designed by world-renowned Gary Player started to run in 2010 as scheduled Gary Player 2010 To be built as a A-class ecological and leisure area and resort

24 23 PROPERTY PROJECTS PORTFOLIO (Continued) HANGZHOU PROJECT GREENLAND CIFI CITY Site area (sq.m) 58,798 GFA (sq.m) 264,551 Brief Introduction A mixed development of residential and commercial Located at Hangzhou Olympic and International Expo Center, Binjiang District, Hangzhou City, Zhejiang Province TAIYUAN PROJECT GREENLAND SHANDING PARK Site area (sq.m) 429,000 GFA (sq.m) 352,900 Brief Introduction Acquired in July 2009, located in Xiaodian District, southeast of Taiyuan City, the capital of Shanxi Province, an area with enormous potential as the local government intends to develop the area into a multi-functional residential, commercial and leisure new town center Planned to be a low-rise residential community with leisure, sports and retail facilities. The topography of the land is raised so the development will overlook the whole of Taiyuan City

25 24 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report 2013 PROPERTY PROJECTS PORTFOLIO (Continued) HAIKOU PROJECTS 1. GREENLAND THE FLOREA Site area (sq.m) 292,174 GFA (sq.m) 252,759 Brief Introduction Located at the first-tier waterfront in the eastern part of Haikou, the Florea enjoys an unobstructed ocean view, comprising Spanish-style residential development Adjacent to on the National Tourism Island planning, the project has a great potential of development 2. GREENLAND HAI CHANG LIU Site area (sq.m) 339,720 GFA (sq.m) 1,000,652 Brief Introduction Located at the core area of New CBD, just close to the New administration Center of Haikou. The new administrative center was ready and occupied at the end of 2010 (CBD) 2010 The land connects the Coast Avenue from North, and faces the being built International Exhibition Centre

26 25 PROPERTY PROJECTS PORTFOLIO (Continued) 3. GREENLAND LINGSHAN PROJECT Site area (sq.m) 2,524,679 GFA (sq.m) 4,396,600 Brief Introduction A large-scale mixed development of residential, commercial and office Located in Meilan District, east of Haiwen Highway, south of Meilan Airport and west of Nandu River 4. GREENLAND WUYUAN RIVER PROJECT Site area (sq.m) 975,717 GFA (sq.m) Brief Introduction 3,273,100 A large-scale mixed development of residential, commercial and office Located in Xiuying District, west of Chang Bin Road, east of Wuyuan Lake, north of Changliu No. 3 Road, south of Haiyu West Line

27 26 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report 2013 PROPERTY PROJECTS PORTFOLIO (Continued) KUNMING PROJECTS 1. THE METROPOLITAN Site area (sq.m) 170,806 GFA (sq.m) 614,994 Brief Introduction Located along Dianchi Road in the metropolitan area of Kunming, where the Provincial Central Administration Offices are located, is a high quality multi-phase residential and commercial project Designated as the recommended urban living residential project by China Real Estate Index System in GREENLAND HAI PO LAN TING Site area (sq.m) 155,549 GFA (sq.m) 211,733 Brief Introduction A mixed development of residential and commercial Located at the south west side of Er Huan Road, the east coast of Caohai, the north of Dianchi and west of Xi Fu Road in Kunming City

28 27 PROPERTY PROJECTS PORTFOLIO (Continued) 3. GREENLAND XIANG SHU HUA CHENG Site area (sq.m) 70,800 GFA (sq.m) 235,223 Brief Introduction A mixed development of residential, office and commercial Located at west of Jinchuan Road, east of Guihua Road, north of Chen Jia Ying Road and south of Guihua Road, the Pan-Asia Technological New Zone, northwest side of Wuhua District in Kunming City 4. GREENLAND YUNDUHUI SQUARE Site area (sq.m) 59,355 GFA (sq.m) 237,418 Brief Introduction A mixed development of residential, office and commercial Located at west of connecting railway of Kun Wu expressway, east of extension of Ke Pu Lu, north of Wang Qiong Gong Road and south of Chen Jia Ying Road, the Pan-Asia Technological New Zone, northwest side of Wuhua District in Kunming City

29 28 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report 2013 PROPERTY PROJECTS PORTFOLIO (Continued) XUZHOU PROJECTS 1. BINGGONG ROAD PROJECT Site area (sq.m) 86,971 GFA (sq.m) 327,284 Brief Introduction A mixed development of residential and commercial Located in Gulou District, Xuzhou City, Jiangsu Province, west of Zhong Shan Road (N) and north of Tong Pei Road 2. JIAOSHAN LAKE PROJECT Site area (sq.m) 356,629 GFA (sq.m) 342,331 Brief Introduction A mixed development of residential and commercial Located in the south west of Tongshancheng District, south of Fenghuang Mountina and north of Yin Mountain, Xuzhou City, Jiangsu Province

30 29 PROPERTY PROJECTS PORTFOLIO (Continued) NANNING PROJECT NANNING GREENLAND CENTER Site area (sq.m) 356,629 GFA (sq.m) 314,875 Brief Introduction A mixed development of office and commercial Located south of Wuxiang Avenue, Wuxiang New District of Nanning City, Guangxi Autonomous Region Classified by the People s Government of Nanning City as selfuse commercial and financial (office) property project, one of the encouraged types of commercial and trading services properties

31 30 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report 2013 PROPERTY INVESTMENT PROPERTIES HELD FOR DEVELOPMENT AND SALE BY THIS REPORT Name of property and location Group s interest % Type Property Status Scheduled completion (1) Cambridge Forest Newtown Xiuyan Rd., Pudong New Area, Shanghai (2) Tiffany (Cambridge Waters) Shuichan Rd., Baoshan District, Shanghai (3) Oriental Garden (Cambridge Watertown) Fuxing Rd., Qingpu District, Shanghai (4) Shanghai Holiday Inn Pudong Kangqiao Xiuyan Rd., Pudong New Area, Shanghai (5) Greenland Free Harbour Heqing Town, Pudong New Area, Shanghai (6) Greenland Xin Du Hui Jiangwan Town, Hongkou District, Shanghai (7) Huangpu District Wuliqiao Project Wuliqiao Area, Huangpu District, Shanghai (8) Jiading District Nanxiang Town Project Nanxiang Town, Jiading District, Shanghai (9) Global 188 No. 88, Suhui Rd., Suzhou Industry Park, Suzhou City, Jiangsu Province (10) Greenland Xi Shui Dong No. 122, Jiankang Rd., Wuxi City, Jiangsu Province 122 (11) Greenland La Casa No. 688, Yushan Rd (N)., Changshu City, Jiangsu Province 688 (12) Greenland Emerald Bay Huanhu Rd (S)., Changshu City, Jiangsu Province (13) Greenland Bihu International Cicheng Town, Jiangbebi District, Ningbo City, Zhejiang Province (14) Greenland Shanding Park No. 86, Dongfeng Rd., Xiaodian District, Taiyuan City % Apartment Commercial 100% Apartment Commercial Completed Completed 100% Villa Phase II superstructure work in progress 100% Hotel Service apartment 50% Office Commercial 50% Office Commercial 50% Apartment Office Commercial 100% Office Commercial 100% Apartment Office Commercial 100% Apartment Commercial Completed Design planning Design planning Design planning Design planning Completed 100% Apartment Completed 100% Apartment Completed Phase II superstructure work in progress 100% Apartment Phase I superstructure work in progress 100% Apartment Villa Phase I completed Phase II design planning Completed Completed 2014 Completed Completed 2015 Completed Completed

32 31 PROPERTY INVESTMENT (Continued) PROPERTIES HELD FOR DEVELOPMENT AND SALE BY THIS REPORT (Continued) Name of property and location Group s interest % Type Property Status Scheduled completion (15) Greenland Taiping Lake Resort Project No. 1, Binhu Boulevard, Taiping Lake Town, Huangshan District, Huangshan City, Anhui Province 1 (16) Greenland The Florea No. 3, Haidian 6 East Road, Haikou City, Hainan Province 3 (17) Greenland Hai Chang Liu No. 319, Binhai Boulevard, Xiuying District, Haikou City, Hainan Province 319 (18) Greenland Lingshan Project Jingxian Rd., Meilan District, Haikou City, Hainan Province (19) Greenland Wuyuan River Project Wuyuan River Area, Xiuying District, Haikou City, Hainan Province (20) The Metropolitan No. 77, Jinniu Rd., Xishan District, Kunming City, Yunnan Province 77 (21) Greenland Hai Po Lan Ting Xishan District, Kunming City, Yunnan Province (22) Greenland Xiang Shu Hua Cheng Wuhua District Kunming City, Yunnan Province (23) Greenland Yunduhui Square Wuhua District Kunming City, Yunnan Province (24) Greenland Cifi City Hangzhou Olympic and International Expo Center, Binjiang District, Hangzhou City, Zhejiang Province (25) Binggong Road Project Binggong Road, Xuzhou City, Jiangxi Province (26) Xuzhou Jiaoshan Lake Project Jiaoshan Lake Area, Xuzhou City, Jiangxi Province (27) Nanning Greenland Center Wuxiang New District, Nanning City, Guangxi Province 100% Hotel Apartment Golf 100% Apartment Villa Phase I superstructure work in progress Completed 50.1% Apartment Phase I&II superstructure work in progress 100% Apartment Office Commercial 100% Apartment Office Commercial 100% Apartment Commercial 55% Apartment Office Commercial 55% Apartment Office Commercial 55% Office Commercial 50% Apartment Commercial 50% Apartment Commercial 100% Apartment Commercial 100% Office Commercial Design planning Design planning Phase IV&V superstructure work in progress Design planning Design planning Phase I superstructure work in progress Phase I superstructure work in progress Design planning Design planning Phase I superstructure work in progress

33 32 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report 2013 MANAGEMENT DISCUSSION AND ANALYSIS BUSINESS REVIEW Results The year of 2013 was a year of change and rejuvenation. On 8 May 2013, SPG Land entered into a subscription agreement to issue a combination of ordinary shares and non-voting convertible preference shares to Greenland Holding Group, equivalent to 60% of the enlarged share capital of SPG Land. The transaction was completed on 27 August 2013, upon which the brand new Greenland Hong Kong Holdings Limited (together with its subsidiaries collectively referred to as the Group ) was launched. 60% Despite several internal transitions and continued macro-economic control measures, the Group achieved satisfactory performance. During the year ended 31 December 2013, the Group recorded a total revenue of approximately RMB5,448 million, an increase of approximately 208% from last year. The increase was attributable to the higher gross floor area ( GFA ) sold and delivered during the year. Net profit attributable to equity holders of the Company which was a loss for the last year was approximately RMB33 million for this year. Basic and diluted earnings per share attributable to equity holders of the Company amounted to RMB0.02 per share, which was a loss of RMB0.92 for the last year. 5,448,000,000208% 33,000, During the year, the total GFA sold and delivered amounted to 316,737 square meters, a 273% increase from the 84,863 square meters sold and delivered during The average selling price kept at a stable range of more than RMB15,000 per square meter as compared with Revenue derived from property sales was approximately RMB5,054 million, representing an increase of 257% from RMB1,415 million in The key projects completed and delivered in 2013 include Wuxi Xishuidong, Emerald Bay in Changshu, Haikou Florea and Cambrdige Forest Newtown and Cambridge Waters Tiffany in Shanghai. 316,737 84, % 15,000 5,054,000,000 1,415,000, %

34 33 MANAGEMENT DISCUSSION AND ANALYSIS (Continued) BUSINESS REVIEW (Continued) Results (Continued) Item Approximate area sold Approximate and delivered in 2013 sales recognized in 2013 Average selling price sqm RMB 000 RMB/sqm Wuxi Xishuidong 98,623 1,486,528 15,073 Changshu Emerald Bay 92,755 1,349,095 14,544 Cambridge Forest Newtown 35, ,176 18,904 Cambridge Waters Tiffany 32, ,102 16,439 Suzhou Global , ,146 24,560 Haikou Florea 16, ,428 17,321 Taiyuan Shanding Park 17, ,772 11,671 Kunming Metropolitan 9,451 88,557 9,370 Sub-total 316,737 4,953,804 15,640 Cambridge Forest Newtown Parking Lot 6,830 Cambridge Waters Parking Lot 5,480 Haikou Florea Parking Lot 16,698 Kunming Metropolitan Parking Lot 40,106 Wuxi Xishuidong Parking Lot 17,012 Changshu Emerald Bay Parking Lot 13,840 Sub-total 99,966 Total property sales 5,053,770

35 34 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report 2013 MANAGEMENT DISCUSSION AND ANALYSIS (Continued) BUSINESS REVIEW (Continued) Contracted Sales During the year, the Group registered a total contracted GFA of 355,604 square meters and achieved a total contracted sales of RMB3,486 million, representing a year-to-year growth of 24% and 16% respectively, compared to 287,413 square meters and RMB3,008 million in ,604 3,486,000, ,413 3,008,000,000 24% 16% During the year under review, projects in second-tier cities continued to be the main contributor of contracted sales. The key projects that contributed significant volumes of contracted sales include Haikou Hai Chang Liu (23%), The Metropolitan in Kunming (22%), Emerald Bay in Changshu (13%) and Haikou Florea (9%). These are all quality products located in cities with the highest disposable incomes in China, capitalizing on the strong demand for an improved living environment from homebuyers. (23%) (22%) (13%) (9%) The Group s quality products continued to be highly appreciated by the market and its flexible marketing and sales strategy paid off during the year. For instance, The Metropolitan Phase V in Kunming welcomed a grand new launch on 20 January All of the 462 units were sold out within four hours on the first day of launch, which broke the sales record of the local market since the government implemented macro-control policy on the property sector. On 19 October 2013, Phase IV of the project achieved great success again and recorded sales of 330 units within two hours of the launch, and by the end of the same day, approximately 90% of the available units were sold out, and many customers remained in the sales office to explore further purchasing opportunities. V 462 IV 33090% Land Bank Maximizing the resources and support of the parent company Greenland Holding Group and the cost-effective financing channels offered by the capital market, from the subscription completion date to the announcement date, the Group won bids for land parcels at Wuliqiao Street of Huangpu District, Pudong Heqing Town, Hongkou District and Jiading Nanxiang in Shanghai, Lingshan and Wuyuanhe in Haikou, Wuxiang area in Nanning, and Jiao Shan lake area in Tongshan District and Binggong Road in Gulou District in Xuzhou, nearly all at base price. It also acquired quality assets from Greenland Group, including a 50% stake in Hangzhou Greenland Cifi City Project. The newly added land parcels contributed a total planned construction area of approximately 9.3 million square meters. 50% 9,300,000

36 35 MANAGEMENT DISCUSSION AND ANALYSIS (Continued) BUSINESS REVIEW (Continued) Land Bank (Continued) As at 31 December 2013, the Group held a land bank of approximately 9.3 million square meters, with prime sites strategically located in key cities of regional economic importance in the Yangtze River Delta and Pan- Pearl River Delta. The current land bank is sufficient to support the Group s development pipeline for the next three to five years, but the Group is continuously looking for high quality sites which demonstrate strong potential with the abundant resources of Greenland Group. Financing Activities In the year 2013 and at the beginning of 2014, the Group explored financing tools and channels in offshore and onshore capital markets, at both corporate and project level. The proceeds generated at a relatively low cost helped the Group to secure a more prudent financial status and lay a solid commercial foundation to look for ongoing opportunities in the market and realize business and capital growth. 9,300,000 Bond Issue In October 2013, the Group successfully issued USD700 million of bonds to professional investors at the rate of 4.75% per annum, which will mature on 18 October The bonds were assigned a rating of Ba1 by Moody s, BB+ by S&P and BBB by Fitch. The net proceeds from the issue of the bonds were approximately USD692.4 million, part of which have been used to redeem in advance the USD200 million 13.5% senior notes due By doing so, the Group was empowered to go forward with relatively lighter burden of financing costs and greater flexibility in applying other financing tools in future. 700,000, Ba1 BB+BBB 692,400, ,000, In January 2014, the Group successfully issued RMB denominated bonds by private placement at the rate of 5.5% per annum, in 100% of the principal amount of RMB1.5 billion, which will mature on 23 January % Syndicated Loan In January 2014, Xu Bao (HK) Co., Ltd., the project company 50% owned by the Group and 50% by CIFI Holdings (Group) Co. Ltd., which wholly owns Hangzhou Greenland Cifi City Project, obtained a three-year offshore loan in US dollar and HK dollar with an aggregate amount equivalent to approximately USD320 million, and a three-year onshore loan facility of RMB1 billion. 50% 50% 320,000,000 10

37 36 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report 2013 MANAGEMENT DISCUSSION AND ANALYSIS (Continued) BUSINESS REVIEW (Continued) Strategic Partnership On 14 January 2014, the Group and China Resources Land entered into a cooperation agreement to jointly develop the land parcel in Wuliqiao of Huangpu District in Shanghai, and the two parties will each hold a 50% stake in the project. Following that, the two parties enter into another partnership agreement dated 23 January 2014 to jointly develop the land parcel located at Binggong Road of Gu Lou District in Xuzhou City and each party will hold a 50% stake respectively. The strategic alliance of Greenland Hong Kong and China Resources Land will maximize the strengths of both parties and enhance the flexibility of financial, development and management resources to build a new landmark in Shanghai and a quality residential property in Xuzhou City. 50% 50% For Hangzhou Greenland Cifi City Project, Greenland Hong Kong gained a 50% stake injection by Greenland Holding Group, and the other 50% stake was indirectly wholly owned by CIFI Holdings. Outlook Over the next ten years, the Group expects a further change in the industry. It s predicted that the strong will become stronger and the weak will be marginalized, therefore, there is no choice but to grow fast, sharpen its competitive edge and establish strong market position. In order to do so, the Group will stay tuned to ever-changing market demands and speed up the turnover of product development, contracted sales and cash flow. It is, however, mindful of the risk of growing too rapidly and will not sacrifice quality over speed. Its long-term development will focus on a balanced pace of growth, quality products and sustainability. 50%50% The Group will mainly target prime sites in first- and second-tier cities of regional economic importance in the Yangtze River Delta and Pan-Pearl River Delta. The aggregation effect of these economically dynamic locations and the increasing size of the working-age populations boost demand for affordable homes and improved living environments. As far as product strategy is concerned, the Group is determined to develop quality products with environmental features at affordable prices. Quality products are not necessarily luxurious examples of architecture, rather properties which pay attention to details and functionality and further offer added value to homebuyers. Looking ahead, as the market becomes more and more mature, property developers are required to establish differentiating strengths and strong leadership. Guided by this requirement, the Group will study market trends and sentiment, and only enter the areas where it leads or can potentially lead. It will also aim to improve the quality of products and services, strengthen sales efforts, and implement prudent financial measures, in order to grow at a relatively swift but stable pace.

38 37 MANAGEMENT DISCUSSION AND ANALYSIS (Continued) FINANCIAL PERFORMANCE Revenue The total revenue of the Group for 2013 increased by approximately 208% over 2012, from approximately RMB1,767 million to approximately RMB5,448 million. 208%1,767,000,000 5,448,000,000 Sales of property, the core business activity, generated revenue of approximately RMB5,054 million (2012: RMB1,415 million), accounting for approximately 93% of the total revenue, and representing an approximately increase of 257% as compared with last year. The revenue of the Group from other segments includes lease of properties, property management and related services, education, hotel and golf operation. 5,054,000,000 1,415,000,00093% 257% Year ended 31 December Change RMB 000 RMB 000 RMB 000 Sales of properties 5,053,770 1,415,373 3,638,397 Rental income 59,366 50,528 8,838 Property management income & other related service 113,700 83,561 30,139 Hotel and golf operation 147, ,156 5,151 Education 73,625 74,917 1,292 Total 5,447,768 1,766,535 3,681,233 Cost of sales Cost of sales increased by approximately 194% to approximately RMB4,001 million, as compared to RMB1,362 million in The cost of sales mainly comprised land costs, construction costs, capitalized finance costs and sales tax. Gross profit and margin Gross profit increased to approximately RMB1,446 million from RMB405 million in 2012 while gross profit margin increased from 23% to 27%. Other income Other operating income increased from RMB18 million in 2012 to RMB64 million in 2013, which was mainly attributable to the acquisition of Hangzhou Project. 194% 4,001,000,000 1,362,000, ,000,000 1,446,000,000 23% 27% 18,000,000 64,000,000

39 38 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report 2013 MANAGEMENT DISCUSSION AND ANALYSIS (Continued) FINANCIAL PERFORMANCE (Continued) Other operating expenses Other operating expense decreased from RMB571 million in 2012 to RMB344 million in It was mainly attributable to the decrease in impairment losses of properties and other investments accrued. Operating expenses Administrative expenses increased to RMB330 million in 2013 from RMB316 million in 2012 because of its business expansion. Selling and marketing costs experienced a decrease of approximately 7% from RMB95 million in 2012 to RMB88 million in 2013 as the Group further controlled selling expenditure under the current economic circumstances. Net Finance Expenses The net finance expenses increased from RMB177 million in 2012 to RMB203 million in 2013 due to total interest-bearing loans borrowed increased but less finance expenses were capitalised. Share of Loss of Associates and Joint Ventures The Group recorded a loss from share of operating results of associates in 2013 amounting to RMB114 million as compared to a loss of RMB102 million in The loss was mainly attributable to Peninsula Shanghai Hotel. And the Group had a loss from joint ventures entity amounting to RMB48 million which was mainly due to the unrecognized sales of Hai Chang Liu project. Revaluation Loss on Investment Properties The Group recorded a revaluation loss of approximately RMB81 million in 2013, as compared with a loss of RMB65 million in Income Tax Income tax increased by 160% from RMB186 million in 2012 to RMB483 million in The increase was mainly due to the higher LAT accrued resulted from more properties delivered. Profit Attributable to Equity Holders of the Company The Group s profit attributable to equity holders amounted to approximately RMB35 million (2012: Loss attributable to equity holders of RMB938 million) during the year under review. 571,000, ,000, ,000, ,000,000 95,000,0007% 88,000, ,000, ,000, ,000, ,000,000 48,000,000 81,000,000 65,000, ,000, %483,000,000 35,000, ,000,000

40 39 MANAGEMENT DISCUSSION AND ANALYSIS (Continued) FINANCIAL PERFORMANCE (Continued) Financial Position Equity attributable to equity holders of the Company was RMB5,620 million as at 31 December 2013 (31 December 2012: RMB4,278 million). Total assets amounted to RMB21,740 million (31 December 2012: RMB23,053 million) and total liabilities stood at RMB16,033 million (31 December 2012: RMB18,744 million). Liquidity and Financial Resources The Group s business operations, bank borrowings and cash proceeds raised have been the primary source of liquidity of the Group, which have been applied in business operations and investment in development projects. 5,620,000,000 4,278,000,000 21,740,000,000 23,053,000,000 16,033,000,000 18,744,000,000 Net gearing (total borrowings less cash and cash equivalents including restricted cash over total equity) decreased from 120% as at 31 December 2012 to 100% as at 31 December The Group had total cash and cash equivalents (including restricted cash) of RMB1,672 million, total borrowings of RMB7,391 million and an equity base of RMB5,707 million as at 31 December % 100% 1,672,000,000 7,391,000,000 5,707,000,000 Treasury Policy The business transactions of the Group were mainly denominated in Renminbi. Apart from fund raising transactions in the capital market, there is limited exposure in foreign exchange risk. The Group has established a treasury policy with the objective of better controlling treasury functions and lowering costs of funds. In providing funds to all its operations, funding terms have been centrally reviewed and monitored at Group level. In accomplishing the aim of minimizing interest risk, the policy of the Group is to continue closely monitoring and managing the Group s loan portfolio by its existing agreements interest margin spread with market interest rates and offers from banks.

41 40 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report 2013 MANAGEMENT DISCUSSION AND ANALYSIS (Continued) FINANCIAL PERFORMANCE (Continued) Credit Policy Trade receivables mainly arose from sale and lease of properties. Receivables in respect of sale and lease of properties are settled in accordance with the terms stipulated in the sale and purchase agreements and lease agreements. Pledge of Assets As at 31 December 2013, the Group pledged properties and land use rights with a carrying value of RMB7.4 billion to secure bank facilities granted to the Group. The total secured loan balance outstanding as at 31 December 2013 amounted to RMB3.1 billion. Financial Guarantees As at 31 December 2013, the Group provided guarantees to banks for: December 2013 RMB December 2012 RMB 000 Mortgage 506,948 1,402,427 Other Guarantees 135,000 1,935,000 Total 641,948 3,337,427 Capital Commitment 31 December 2013 RMB December 2012 RMB 000 Property development activities: Contracted but not provided for 7,735, ,054 Authorized but not contracted for 2,722,895 2,141,343 Total 10,458,779 2,693,397

42 41 MANAGEMENT DISCUSSION AND ANALYSIS (Continued) FINANCIAL PERFORMANCE (Continued) Human Resources As at 31 December 2013, the Group employed a total of 1,707 employees (31 December 2012: 1,666). The Group has adopted a performance-based rewarding system to motivate its staff. In addition to a basic salary, quarterly and year-end bonuses are offered to staff with an outstanding performance. In relation to staff training, the Group also provides various staff programs to improve their skills and develop their respective expertise. 1,707 1,666

43 42 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report 2013 CORPORATE GOVERNANCE REPORT CORPORATE GOVERNANCE PRACTICES The board (the Board ) of directors (the Directors ) and the management of the Company treasure the shareholders confidence and trust in the ability and vision of the management team and have pledged to maintain an open and responsive attitude in shareholders communications that are on par with other leading corporations in the industry. The Board has been adamant in upholding best practice in corporate governance to ensure the timeliness, transparency and fairness of disclosure to maximize the Group s corporate values and will continue to enhance its disclosure practices to display an exemplary corporate governance practice. It is the Board s belief that a sound corporate governance system has been and will remain as an instrumental element to the healthy growth of the Group. Corporate Governance The Company has strictly complied with the code provisions set out in the Corporate Governance Code ( CG Code ) as set out in Appendix 14 of the Rules (the Listing Rules ) Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the Stock Exchange ) during the year ended 31 December 2013 except for the deviation from code provision A.2.1. A.2.1 Code Provision A.2.1 stipulates that the roles of chairman and chief executive should be separate and should not be performed by the same individual. From 1 January 2013 to 27 August 2013, Mr. WANG Weixian was the Chairman of the Board and Ms. WANG Xuling was the Chief Executive Officer of the Company. With effect from 27 August 2013, both roles have been taken up by Mr. CHEN Jun. The Company considers that the combination of the roles is conducive to the efficient formulation and implementation of the Group s strategies and policies and such combination has not impaired the corporate governance practices of the Group. The balance of power and authority is ensured by the management of the Company s affairs by the Board which meets regularly to discuss and determine issues concerning the operations of the Group. A.2.1 Set out below is the detailed discussion of the corporate governance practices adopted and observed by the Company during the year.

44 43 CORPORATE GOVERNANCE REPORT (Continued) DIRECTORS SECURITIES TRANSACTIONS The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers (the Model Code ) as set out in Appendix 10 to the Listing Rules. All directors have confirmed, following specific enquiry by the Company, that they have complied with the required standard set out in the Model Code for the year ended 31 December BUSINESS MODEL AND STRATEGY Business Model Fully supported by its strong parent company, Greenland Holding Group, a Fortune Global 500 company with a leading position in the Chinese property market and extensive overseas footholds, Greenland HK is principally engaged in the development and sale of quality property projects in China. The Group has comprehensive, mature and diversified product lines comprising residential communities, city centre integrated projects and travel and leisure projects. Residential Communities Leveraging its rich knowledge and insight into China s urban development, Greenland HK strategically develops quality residential projects in key 1st and 2nd tier cities in the affluent Yangtze River Delta and Pan-Pearl River Delta and fast-growing Chinese provincial capital cities that have good potential and well developed markets. 500 In Shanghai, the Group s residential properties include Cambridge Forest Newtown, The Tiffany (Cambridge Waters), and Oriental Garden (Cambridge Watertown), all of which are large-scale and high-end projects that are widely recognized by the market. In Changshu, La Casa is a masterpiece in modern urban landscaping. In Kunming, the Metropolitan boosts the urban living experience to encompass international standards. The Group continues to bring fresh and innovative ideas to Taiyuan, and has created Shanding Park, with Spanish-styled villas which overlook the City of Taiyuan.

45 44 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report 2013 CORPORATE GOVERNANCE REPORT (Continued) BUSINESS MODEL AND STRATEGY (Continued) City Centre Integrated Projects The Group s city centre integrated projects are regarded as classics with their strategic locations and the offerings of contemporary urban living. In the central business district of Suzhou Industry Park, the diamond crowns of Global 188 shimmer brightly as the project reaches new heights to become an outstanding landmark in Suzhou. In Wuxi, the birthplace of China s industry and commerce, Xi Shui Dong has become the new Central Living District. With a rich heritage, it interlinks China s history and culture with the concept of modern living. Xi Shui Dong brings back the prosperity and glamour of the The Rong s Factory, where one of the first entrepreneurs in China once accumulated his wealth. Travel and Leisure Projects Tapping into the rising demand of innovative hospitality products, the Group develops hospitality product offerings which meet stringent international requirements and the needs of domestic travelers. In Huangshan, the Greenland Taiping Lake Resort is an international resort, surrounded by mountains on both sides and a lake; it has a top-notch golf club, yacht club and luxury hotel Crowne Plaza. The Hidden Tiger Golf Club is designed, supported and managed by top talent from around the world. In Haikou, otherwise known as the Gold Coast of China, Florea is the pioneer of seaside mansions in Haikou and the only large scale Spanish style community located by the sea and a park. Florea has become the first choice for local luxury, leisure residences. Hai Chang Liu, the only seaside CBD development in Haikou, is a large scale architectural complex integrating residential offerings, commercial space, offices and hotels. In Changshu, the beautiful lake-view villas and apartments in Emerald Bay nestled between two national scenic spots, set a new benchmark for upscale living in Jiangsu. 188

46 45 CORPORATE GOVERNANCE REPORT (Continued) BUSINESS MODEL AND STRATEGY (Continued) Strategy Drawing on Greenland Group s rich resources, large scale, mature brand, experienced management and passionate corporate culture, the Group has mapped out a development plan to achieve rapid growth in the next five years. The plan, known as the strategy, refers to (i) the exploration of four areas: new regions, development models, new product trends and innovative management systems; (ii) building up three core capabilities in business operation, quality and speed, and R&D and marketing planning; (iii) two-fold organizational security by cultivating a corporate culture and developing a talent pipeline; and (iv) maximizing the financing capability of the Hong Kong-listed platform to realize strong growth in financing, rapid development and cash flow (i) (ii) (iii) (iv) With the resources and support of the parent company Greenland Holding Group, as well as the cost-effective financing channels offered by the capital market, the Group actively replenished its land bank in Yangtze River Delta and Pan-Pearl River Delta including Shanghai, Guangxi, Hainan and Jiangxu during the year under review. The Group also formed a strategic partnership with China Resources Land for the development of two projects in Shanghai and Xuzhou, and gained a 50% stake in a joint venue between the Group and Cifi Holdings for the development of Hangzhou Greenland Cifi City Project. All of these new initiatives will further enhance the Group s geographical coverage and ensure its stable and sustainable development in the future. 50% Greenland Hong Kong will strive to achieve CAGR of above 50% and sales of over RMB50 billion by The clear business strategy, coupled with the Group s diversified products and services offering, will not only provide us with a healthy income stream going forward, but also enable us to make significant progress and establish ourselves as a benchmark for the mainland real estate industry. BOARD OF DIRECTORS The Board currently comprises six executive Directors and four independent non-executive Directors: Executive Directors: CHEN Jun (Chairman and Chief Executive Officer) WANG Weixian (Honorary Chairman) HOU Guangjun (Chief Operation Officer) WU Zhengkui WANG Xuling YOU Defeng (Chief Financial Officer) 50% 500

47 46 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report 2013 CORPORATE GOVERNANCE REPORT (Continued) BOARD OF DIRECTORS (Continued) Independent non-executive Directors: CHEONG Ying Chew, Henry FONG Wo, Felix, JP JIANG Simon X. KWAN Kai Cheong The Board has a balance of skills and experience appropriate for the requirements of the business of the Company. The Board has extensive management experience in the property market in the PRC. The Board has the required knowledge, experience and capabilities to operate and develop the Group s business and implement the Company s business strategies. The biographical details and experience of the Directors and senior management are set out on pages 58 to Each Director has a duty to act in good faith in the best interests of the Company. The Directors, individually and collectively, are aware of their responsibilities and accountability to shareholders and for the manner in which the affairs of the Company are managed and operated. Directors have timely access to relevant information prior to each board meeting to enable them to make an informed decision and to discharge their duties and responsibilities. Directors can attend board meetings either in person or by electronic means of communication. The Company has received an annual confirmation of independence from each of the independent non-executive Directors. The Company is of the view that all the independent non-executive Directors meet the guidelines for assessing independence set out in Rule 3.13 of the Listing Rules and considers them to be independent Ms. WANG Xuling, an executive Director of the Company, is the sister of Mr. WANG Weixian, the Honorary Chairman of the Group. Apart from this, to the best knowledge of the Company, there is no financial, business, family or other material or relevant relationship among members of the Board. The Company provides Directors with directors and officers liability insurance coverage to protect them from loss as a result of any legal proceeding against the Company.

48 47 CORPORATE GOVERNANCE REPORT (Continued) BOARD OF DIRECTORS (Continued) During the year, the Company held nine Board meetings for reviewing and approving, inter alia, the financial and operating performance of the Group. Sufficient notice convening the Board meeting was dispatched to the Directors setting out the matters to be discussed. All Directors were given an opportunity to include matters in the agenda for the Board meeting and had access to the company secretary of the Company (the Company Secretary ) to ensure that all board procedures and all applicable rules and regulations were followed. The Board also enabled the Directors to seek independent professional advice at the Company s expense in appropriate circumstances. At the meetings, the Directors were provided with the relevant documents to be discussed and approved. The minutes are kept by the Company s legal advisers and they are open for inspection by the Directors and members of Board committees. The secretary of the meeting is responsible for taking the minutes and all the matters considered and the decisions reached in the Board meeting are recorded in sufficient detail. The draft minutes are sent to the Directors for comment within a reasonable time after each meeting and the final versions are sent to all Directors for their records. During the year ended 31 December 2013, the Company held the annual general meeting on 3 June 2013 and two extraordinary general meetings on 5 August 2013 and 2 December The following is the attendance record of the Directors in the aforesaid meetings: Number of meeting attended/ Number of meeting held Board meeting General meeting Name of Director Mr. CHEN Jun (Note 1) 1 4/7 0/1 Mr. WANG Weixian 2/9 0/3 Mr. HOU Guangjun (Note 1) 1 4/7 0/1 Mr. WU Zhengkui (Note 1) 1 4/7 0/1 Ms. WANG Xuling 6/9 2/3 Mr. YOU Defeng (Note 1) 1 6/7 1/1 Mr. CHEONG Ying Chew, Henry 6/9 3/3 Mr. FONG Wo, Felix, JP 5/9 3/3 Mr. JIANG Simon X. 6/9 3/3 Mr. KWAN Kai Cheong 5/9 2/3

49 48 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report 2013 CORPORATE GOVERNANCE REPORT (Continued) BOARD OF DIRECTORS (Continued) Note: (1) Mr. CHEN Jun, Mr. HOU Guangjun, Mr. WU Zhengkui and Mr. YOU Defeng were appointed as executive Directors by ordinary resolutions passed at the extraordinary general meeting of the Company held on 5 August 2013, and their appointment became effective on 27 August CHAIRMAN AND CHIEF EXECUTIVE OFFICER Mr. CHEN Jun currently serves as the Chairman of the Board and the Chief Executive Officer of the Company. (1) The Chairman is responsible for the overall business and investment strategies of the Group. The Chairman is also responsible for overseeing effective functioning of the Board and application of good corporate governance practices and procedures. The Chief Executive Officer is responsible for managing the Group s overall operations and execution of the Group s long term business development policies. The Board, led by the Chairman, sets the overall directions, strategies and policies of the Group. Under the leadership of the Chief Executive Officer, the management is responsible for executing the Board s strategy and implementing its policies through the day-to-day management and operations of the Company. The Board delegates appropriate aspects of its management and administrative functions to the management who shall report to the Board. The Board reviews on a periodic basis such delegations to ensure that they remain appropriate. Important matters are reserved for the Board s decision, including: long-term objectives and strategies extension of the Group s activities into new business areas appointments to the Board and the Board committees annual internal controls assessment and annual budgets material acquisitions and disposals material connected transactions material banking facilities announcements of interim and final results payment of dividends

50 49 CORPORATE GOVERNANCE REPORT (Continued) NON-EXECUTIVE DIRECTORS The non-executive Directors of the Company have diversified backgrounds and industry skills and one of the independent non-executive Directors has appropriate accounting qualification as required by the Listing Rules. With their expertise, they offer experience, independent judgement and advice on the overall management of the Company. Their responsibilities include maintaining a balance between the interests of all shareholders of the Company as a whole. All the independent non-executive Directors are members of the audit, nomination and remuneration committees. All the independent non-executive Directors are appointed for a term of one year renewable by mutual agreement on an annual basis. Under the Company s Articles of Association (the Articles ), one-third of all Directors (whether executive or non-executive) is subject to retirement by rotation and re-election at each annual general meeting provided that every Director shall be subject to retirement at least once every three years. REMUNERATION OF DIRECTORS The Board established the remuneration committee on 19 September 2006 with specific written terms of reference which deal clearly with its authority and responsibilities. In compliance with the CG Code, the Board has adopted new terms of reference for the remuneration committee which have been posted on the respective websites of the Company and the Stock Exchange. The committee is responsible for formulating and reviewing the remuneration policy and specific remuneration packages of all executive Directors. In formulating the remuneration policy, the committee takes into consideration factors such as salaries paid by comparable companies, employment conditions and responsibilities, and individual performance of the Directors, senior management, and the general staff. The committee can seek independent professional advice to complement its own resources to discharge its duties.

51 50 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report 2013 CORPORATE GOVERNANCE REPORT (Continued) REMUNERATION OF DIRECTORS (Continued) The remuneration committee currently comprises Mr. CHEN Jun, Ms. WANG Xuling and all the independent non-executive Directors namely Messrs. CHEONG Ying Chew, Henry, FONG Wo, Felix, JP., JIANG Simon X. and KWAN Kai Cheong. Mr. KWAN Kai Cheong is the chairman of the committee. During the year ended 31 December 2013, the following changes in the composition of the remuneration committee took place: Mr. WANG Weixian ceased to be a member of the remuneration committee with effect from 27 August 2013; Mr. CHEN Jun and Ms. WANG Xuling were appointed as members of the remuneration committee with effect from 27 August The Company has adopted the model that the remuneration committee make recommendations to the Board on the remuneration packages of individual executive Directors and senior management. One meeting was held by the remuneration committee in 2013 to discuss remuneration related matters. Individual attendance of the members is set out below: Mr. KWAN Kai Cheong 1/1 Mr. WANG Weixian 1/1 Mr. CHEONG Ying Chew, Henry 1/1 Mr. FONG Wo, Felix, JP 1/1 Mr. JIANG Simon X. 1/1 1/1 1/1 1/1 1/1 1/1 Details of the emoluments of each Director, on a named basis, are set out in note 15 to the financial statements. 15 The remuneration of the senior management paid for the year ended 31 December 2013 fell within the following bands: Number of Individuals RMB1,000,000 or below 1,000, RMB1,000,001 RMB2,000,000 1,000,001 2,000,000 7 RMB2,000,001 RMB3,000,000 2,000,001 3,000,000 0 RMB3,000,001 RMB4,000,000 3,000,001 4,000,000 1

52 51 CORPORATE GOVERNANCE REPORT (Continued) NOMINATION OF DIRECTORS The Company established a nomination committee on 1 April 2013 in compliance with the CG Code. The nomination committee is responsible for nomination and selection of Directors. Proposed new Directors are selected based on skills and experience that will enable them to make positive contributions to the performance of the Board. The nomination committee is chaired by Mr. CHEN Jun and has specific written terms of reference which deal clearly with its authority and responsibilities and posted on the respective websites of the Company and the Stock Exchange. The principal functions of the nomination committee include: to review the structure, size and composition (including the skills, knowledge and experience) of the Board and make recommendations on any proposed changes to the Board to complement the Company s corporate strategy; to identify individuals suitably qualified to become Board members and select or make recommendations to the Board on the selection of individuals nomination for directorships; to assess the independence of independent non-executive Directors; and to make recommendations to the Board on the appointment or reappointment of Directors and succession planning for Directors, in particular chairman and chief executive. The nomination committee currently comprises two executive Directors, namely Messrs. CHEN Jun and HOU Guangjun; and four independent nonexecutive Directors, namely Messrs. CHEONG Ying Chew, Henry, FONG Wo, Felix, JP., JIANG Simon X. and KWAN Kai Cheong. Mr. CHEN Jun is the chairman of the committee. During the year ended 31 December 2013, the following changes in the composition of the nomination committee took place: Mr. WANG Weixian and Ms. WANG Xuling ceased to be members of the nomination committee with effect from 27 August 2013; Mr. CHEN Jun and Mr. HOU Guangjun were appointed as members of the nomination committee with effect from 27 August 2013.

53 52 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report 2013 CORPORATE GOVERNANCE REPORT (Continued) NOMINATION OF DIRECTORS (Continued) One meeting was held by the nomination committee in 2013 to review the structure, size and composition of the Board, evaluation of performance and contribution of retiring Directors and independence of retiring independent non-executive Directors. Individual attendance of the members is set out below: Mr. WANG Weixian 1/1 Ms. WANG Xuling 1/1 Mr. CHEONG Ying Chew, Henry 1/1 Mr. FONG Wo, Felix, JP 1/1 Mr. JIANG Simon X. 1/1 Mr. KWAN Kai Cheong 1/1 AUDIT COMMITTEE The Board established the audit committee on 19 September 2006 with specific written terms of reference which deal clearly with its authority and responsibilities. In compliance with the CG Code, the Board has adopted new terms of reference for the audit committee which have been posted on the respective websites of the Company and the Stock Exchange. 1/1 1/1 1/1 1/1 1/1 1/1 The committee is responsible for formulating and reviewing the financial and internal control principles of the Company. The committee is also responsible for making recommendation to the Board on the appointment, re-appointment and removal of the external auditors, approving the remuneration and terms of engagement of the external auditors and considering any questions of resignation or dismissal of such auditors. The committee can seek independent professional advice to complement its own resources to discharge its duties. The committee comprises all the independent non-executive Directors, namely Messrs. CHEONG Ying Chew, Henry, FONG Wo, Felix, JP., JIANG Simon X. and KWAN Kai Cheong. Mr. KWAN Kai Cheong is the chairman of the committee. There was no change in the composition of the audit committee during the year ended 31 December 2013.

54 53 CORPORATE GOVERNANCE REPORT (Continued) AUDIT COMMITTEE (Continued) Two meetings was held by the audit committee in Individual attendance of the members is set out below: Mr. KWAN Kai Cheong 2/2 Mr. CHEONG Ying Chew, Henry 2/2 Mr. FONG Wo, Felix, JP 2/2 Mr. JIANG Simon X. 2/2 2/2 2/2 2/2 2/2 During the year, the committee reviewed, together with the senior management and the external auditors, the financial statements for the year ended 31 December 2012, the accounting principles and practices adopted by the Company, statutory compliance, other financial reporting matters and the internal control system. The audit committee also reviewed the Group s interim results for the six months ended 30 June COMPANY SECRETARY Ms. LEE Mei Yi of Tricor Services Limited, an external service provider, has been engaged by the Company as its Company Secretary since September The primary contact person of the Company is Mr. You Defeng, Group Executive Director and CFO. According to Rule 3.29 of the Listing Rules, Ms. LEE Mei Yi has taken no less than 15 hours of relevant professional training during the year ended 31 December FINANCIAL REPORTING The Board aims at presenting a comprehensive, balanced and understandable assessment of the Group s performance, position and prospects. Management provides such explanation and information to enable the Board to make an informed assessment of the matters put before the Board for approval The Directors acknowledge their responsibilities for preparing the financial statements for the Group. The statement of the external auditors of the Company regarding their responsibilities for the financial statements of the Group is set out in the report of the auditors on page

55 54 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report 2013 CORPORATE GOVERNANCE REPORT (Continued) INTERNAL CONTROLS The Board has overall responsibility for maintaining a sound and effective system of internal control and for reviewing its effectiveness, particularly in respect of the controls on financial, operational, compliance and risk management, to safeguard shareholders investment and the Group s assets. The Audit Director reports to the audit committee on key findings regarding internal controls. The audit committee, in turn, communicates any material issues to the Board. The Board has conducted a review of the effectiveness of the system of internal control of the Company and its subsidiaries and is satisfied with the adequacy of the Group s system of internal control. AUDITORS REMUNERATION KPMG, the external auditors of the Company, is primarily responsible for providing audit services in connection with annual financial statements of the Group for the year ended 31 December For the year ended 31 December 2013, the total remuneration in respect of audit services provided by KPMG for the Group amounted to RMB3,400,000. CORPORATE GOVERNANCE FUNCTION The Board is responsible for performing the duties on corporate governance function as set out below: 3,400,000 to develop and review the Company s policies and practices on corporate governance; to review and monitor the training and continuous professional development of Directors and senior management; to review and monitor the Company s policies and practices on compliance and legal and regulatory requirements; to develop, review and monitor the code of conduct and compliance manual (if any) applicable to employees and Directors; and to review the Company s compliance with the CG Code and disclosure in the corporate governance report. During the year ended 31 December 2013, the Board has developed and reviewed the Company s corporate governance practices, including the revised terms of reference for the remuneration committee, audit committee and nomination committee.

56 55 CORPORATE GOVERNANCE REPORT (Continued) DIRECTORS TRAINING According to the code provision A.6.5 of the CG Code, all directors should participate in continuous professional development to develop and refresh their knowledge and skills to ensure that their contribution to the board remains informed and relevant. A.6.5 All Directors have been provided with training on their duties and responsibilities as a director of a listed company and the compliance issues under the Listing Rules. The Company continuously updates Directors on the latest developments regarding the Listing Rules and other applicable regulatory requirements, to ensure their compliance and enhance their awareness of their continuing obligations as Directors and good corporate governance practices. During the year, the Company provided the Directors with materials regarding the CG Code. Each of the Directors provided the Company with their respective training record pursuant to the CG Code. During the year, all Directors have participated in appropriate continuous professional development by ways of attending training or reading materials relevant to the Company s business or to Directors duties and responsibilities. SHAREHOLDERS RIGHTS Procedures for convening of an extraordinary general meeting and putting forward proposals at shareholders meeting Pursuant to Article 58 of the Articles of the Company, shareholder(s) holding at the date of deposit of the requisition not less than one-tenth of the paidup capital of the Company carrying the right of voting at general meetings of the Company (the Requisitionist(s) ) may, by written requisition (the Requisition ) to the Board or the Company Secretary, to require an extraordinary general meeting ( EGM ) to be called by the Board for the transaction of any business specified in the Requisition. The Requisition shall be deposited at the head office of the Company in Hong Kong (Unit 5711, 57th Floor, The Center, 99 Queen s Road Central, Hong Kong). The EGM shall be held within two months after the deposit of the Requisition. In the event that the Board fails to proceed to convene the EGM within twenty-one days of the deposit of the Requisition, the Requisitionist(s) may do so in the same manner, and all reasonable expenses incurred by the Requisitionist(s) as a result of the failure of the Board shall be reimbursed to the Requisitionist(s) by the Company

57 56 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report 2013 CORPORATE GOVERNANCE REPORT (Continued) SHAREHOLDERS RIGHTS (Continued) Procedures for shareholders to put enquiries to the Board Shareholders should direct their enquiries about their shareholdings to the Company s branch share registrar in Hong Kong, Tricor Investor Services Limited, at Level 22, Hopewell Centre, 183 Queen s Road East, Hong Kong. In respect of other enquiries, shareholders may put forward enquiries to the Board through Mr. You Defeng who will direct the enquiries to the Board for handling. The contact details are as follows: Address: 46/F., Hong Kong New World Tower, 300 Huaihai Road Central, Shanghai, China ericyou@greenlandhk.com Tel number: Fax number: INFORMATION ON SHARE CAPITAL As at 31 December 2013: ericyou@greenlandhk.com Authorised share capital: HK$5,000,000,000, comprising 7,000,000,000 ordinary shares of HK$0.50 each ( Ordinary Shares ) and 3,000,000,000 non-voting convertible preference shares of HK$0.50 each ( CPS ). 5,000,000,000 7,000,000, ,000,000, Issued and fully paid-up capital: HK$1,313,910, comprising 1,142,291,423 Ordinary Shares and 1,485,529,260 CPS. SIGNIFICANT CHANGES IN THE ARTICLES Pursuant to special resolutions passed at the extraordinary general meeting of the Company held on 5 August 2013, the following amendments were made to the Articles: 1,313,910, ,142,291,423 1,485,529,260 to increase the authorised share capital of the Company from HK$1,000,000,000 divided into 10,000,000,000 ordinary shares of HK$0.10 each to HK$5,000,000,000 divided into 35,000,000,000 ordinary shares of HK$0.10 each and 15,000,000,000 non-voting convertible preference shares of HK$0.10 each; 1,000,000,000 10,000,000, ,000,000,000 35,000,000, ,000,000,

58 57 CORPORATE GOVERNANCE REPORT (Continued) SIGNIFICANT CHANGES IN THE ARTICLES (Continued) to set out the terms of the CPS, including the rights and restrictions of the holders of CPS and the procedure for conversion into Ordinary Shares; to consolidate the shares of the Company on the basis of every five ordinary shares of HK$0.10 each into one Ordinary Share and every five non-voting convertible preference shares of HK$0.10 each into one CPS; to change the name of the Company from SPG Land (Holdings) Limited to Greenland Hong Kong Holdings Limited and to adopt as its new Chinese name to replace. SPG Land (Holdings) Limited Greenland Hong Kong Holdings Limited

59 58 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report 2013 DIRECTORS AND SENIOR MANAGEMENT PROFILES Executive Directors CHEN Jun, 39, is the Executive Director, Chairman of the Board and Chief Executive Officer of the Company. Mr. CHEN Jun is responsible for the overall planning, formulation of strategies and overall daily operations of Greenland Hong Kong. Mr. CHEN Jun has more than 15 years of experience in the real estate and construction industry, with extensive management experience in the industry. Since he joined Greenland Holding Group in February 2001, Mr. CHEN Jun has served as project manager, assistant general manager and deputy general manager of the Business Divisions of Greenland Holding Group. Mr. CHEN Jun also serves as a deputy of the 11th and 12th People s Congress of Shaanxi Province, the honorary chairman of Shanghai Chamber of Commerce in Shaanxi and a member of the standing committee of the Shaanxi Youth Federation. Mr. CHEN Jun obtained a bachelor s degree in industrial and civil architecture from the College of Architecture and Engineering of Nanjing University of Technology, a master s degree in architectural and civil engineering from Xi an University of Architecture and Technology and an EMBA degree from Tsinghua University School of Economics and Management. He is currently a PhD candidate majoring in national economics at the Graduate School of Chinese Academy of Social Sciences EMBA WANG Weixian, 50, is the Executive Director, Honorary Chairman and founder of the Company. Mr. WANG Weixian has over 18 years of experience in finance, construction, and property investment and development. Mr. WANG Weixian graduated from South China University of Technology with a Bachelor degree in Building Materials and University of Technology, Sydney (Australia) with a Bachelor degree of Commerce. He is also a councilor of the Shanghai Soong Ching Ling Foundation and a standing member of the Shanghai Overseas Exchange Association. 50 HOU Guangjun, 42, is the Executive Director and Chief Operating Officer of the Company. Mr. HOU Guangjun has over 19 years of experience in the real estate and construction industry, with extensive management experience in the industry. Since he joined Greenland Holding Group in November 1996, Mr. HOU Guangjun has held the posts of engineer, project manager, assistant general manager, deputy general manager and general manager of the Business Divisions of Greenland Holding Group. Before joining Greenland Holding Group, he worked for Shanghai Railway Sub-administration. Mr. HOU Guangjun also serves as a member of the People s Political Consultative Conference of Jinan, Shandong Province, China. Mr. HOU Guangjun graduated from Tongji University with a bachelor s degree in materials engineering

60 59 DIRECTORS AND SENIOR MANAGEMENT PROFILES (Continued) WANG Xuling, 53, is the Executive Director of the Company. Ms. WANG Xuling graduated from Ji nan University (Guangzhou). Prior to joining the Company, Ms. WANG was the executive director and deputy general manager of Mission Hills Golf Club (Mission Hills Group), responsible for sales and marketing of properties. Before joining Mission Hills Group (Mission Hills Golf Club), Ms. WANG Xuling had about 12 years of experience in the news and media business. Ms. WANG Xuling joined the Company as Executive Director in WU Zhengkui, 40, is the Executive Director of the Company. Mr. WU Zhengkui is also the deputy general manager of the Finance Department of Greenland Holding Group. Mr. WU Zhengkui graduated from Fudan University with a master s degree in accounting. He also has the professional title of intermediate accountant. Mr. WU Zhengkui has over 11 years of experience in the real estate and construction industry, with extensive experience in financial management within the industry. Since he joined Greenland Holding Group in January 2002, Mr. WU Zhengkui has served as finance manager, director and supervisor of the subsidiaries of Greenland Holding Group and assistant general manager of the Finance Department of Greenland Holding Group YOU De Feng, 38, is the Executive Director and Chief Financial Officer of the Company. Mr. YOU De Feng has over 15 years of experience in the real estate and construction industry, accumulating extensive experience of financial management in the industry. Since joining the Company in March 2001, Mr. YOU De Feng was the Finance Manager and Finance Director of the project companies of the Company and Financial Controller of the Group. Prior to joining the Company, he worked in China Poly Group. Mr. YOU De Feng graduated from Shanghai University of Finance and Economics and obtained a Master degree in Business Administration from China Europe International Business School. He is a member of the Institute of Financial Accountants, United Kingdom and a qualified accountant in the PRC

61 60 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report 2013 DIRECTORS AND SENIOR MANAGEMENT PROFILES (Continued) Independent Non-Executive Directors CHEONG Ying Chew, Henry, 66, has been an Independent Non- Executive Director of the Company since He holds a Bachelor of Science degree in Mathematics and a Master of Science degree in Operational Research and Management. He is also an independent nonexecutive director of each of Cheung Kong (Holdings) Limited, Cheung Kong Infrastructure Holdings Limited, Hutchison Telecommunications Hong Kong Holdings Limited, New World Department Store China Limited, TOM Group Limited, CNNC International Limited, Creative Energy Solutions Holdings Limited, all being listed in Hong Kong. He is also an independent director of BTS Group Holdings Public Company Limited, a company listed in Thailand, and an Executive Director and the Deputy Chairman of Worldsec Limited, a company listed in London. He is also a Member of the Securities and Futures Appeals Tribunal and a Member of the Advisory Committee of the Securities and Futures Commission, and was previously a member of the Disciplinary Panel (Panel A) of the Hong Kong Institute of Certified Public Accountants. He was an independent non-executive director of Hong Kong Jewellery Holding Limited (formerly known as Excel Technology International Holdings Limited), a listed company in Hong Kong, up until 3 July TOM BTS Group Holdings Public Company LimitedWorldsec Limited A FONG Wo, Felix, BBS, JP, 63, is an Independent Non-Executive Director of the Company since 2006, a practicing solicitor in Hong Kong and is also qualified in Canada and England. He is appointed by the Ministry of Justice of China as one of the China-Appointed Attesting Officers in Hong Kong. Mr. FONG is a consultant and the founding partner of the Hong Kong law firm, King & Wood (formerly known as Arculli Fong & Ng), and has practiced law for over 30 years, including eight years in Toronto. Mr. FONG is an independent non-executive director of a number of listed companies, namely Guangdong Land Holdings Limited (formerly known as Kingway Brewery Holdings Limited), Evergreen International Holdings Limited, China Investment Development Limited (formerly known as Temujin International Investments Limited) and Sheen Tai Holdings Group Company Limited, whose shares are listed on the Stock Exchange, and also China Oilfield Services Limited, whose shares are listed on the Stock Exchange and the Shanghai Stock Exchange. Mr. FONG is a member of the Guangdong Provincial Committee of Chinese People s Political Consultative Conference (9th and 10th Sessions), a director of the China Overseas Friendship Association, a director of the Shanghai Chinese Overseas Friendship Association and an executive director of the Guangdong Overseas Friendship Association. He is also the chairman of the Advisory Council on Food and Environmental Hygiene, a member of the Hong Kong Communications Authority and a director of the Hong Kong Basic Law Institute. Mr. FONG is a member of the first Selection Committee for the purposes of electing the Chief Executive for Hong Kong Special Administrative Region, a founding member of the Canadian International School of Hong Kong, a member of the Board of Advisers for the Faculty of Business of the University of Victoria, British Columbia, Canada and a visiting professor of the School of Law of Sun Yat-sen University, China. 63

62 61 DIRECTORS AND SENIOR MANAGEMENT PROFILES (Continued) JIANG Simon X., 60, is an Independent Non-Executive Director of the Company since 2006, is the founder and chairman of CyberCity International Limited as well as chairman of some of its subsidiaries. For the past five years, Dr. JIANG has been involved mainly in private equity investment activities in Hong Kong and mainland China. He is also a member of the National Committee of CPPCC and the United Nations Investments Committee. 60 CyberCity International Limited KWAN Kai Cheong, 64, is an Independent Non-Executive Director of the Company since 2006, holds a Bachelor of Accountancy (Honors) degree from the University of Singapore and is a member of the Institute of Chartered Accountants in Australia. He is also a fellow of the Hong Kong Institute of Directors. Mr. KWAN is presently the president of Morrison & Company Limited, a business consultancy firm. 64 Morrison & Company Limited Company Secretary LEE Mei Yi, 46, became the company secretary of the Group in September Ms. LEE is a director of Corporate Services Department of Tricor Services Limited and a fellow member of both the Institute of Chartered Secretaries and Administrators and the Hong Kong Institute of Chartered Secretaries. Ms. LEE has over 20 years of experience in the corporate secretarial area. 46 Senior Management MAO Yong Jun, 40, is the Assistant President of the Company. Mr. MAO Yong Jun obtained a Bachelor degree in Engineering from Shanghai Engineering and Technology University and a Master degree in Business Administration from Fudan University. Mr. MAO has about ten years of working and management experiences gained from internationalized real estate companies. Prior to joining the Company, Mr. MAO was the business development manager of Hutchison Whampoa (Shanghai) Company Limited and senior business development manager of Frasers Property (China) Limited. Since joining the Company in July 2008, Mr. MAO held positions including Deputy General Manager, Executive Deputy General Manager and General Manager of a project company of the Company and General Manager of the City Leisure & Resort Business Division

63 62 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report 2013 DIRECTORS AND SENIOR MANAGEMENT PROFILES (Continued) XU Wenmin, 44, is the Assistant President of the Company. Mr. XU Wenmin graduated from Shanghai Urban Construction Institute in Construction Management and has over 20 years of working and management experience in real estate. Prior to joining the Company, Mr. XU Wenmin was the vice general manager of Zhu Sheng Yuan and Jifushen Purchase. He has a strong competence in project control and comprehensive skills in real estate development. Since joining the Company in September 2006, Mr. XU Wenmin was the General Manager of Taiyuan, Kunming and Ningbo projects of the Company. 44 HUANG Yifeng, 28, is the General Manager of Investment and Development Department of the Company. Mr. HUANG Yifeng obtained a Bachelor degree with honors in Economics and Mathematics from the University of Chicago, USA. Prior to joining the Company, he worked in the investment banking division of J.P Morgan, Hong Kong and Morgan Stanley, and primarily engaged in bond issuance of real estate companies, merger and acquisition of enterprises and IPO projects. Mr. HUANG Yifeng joined the Company in August J.P IPO LIU Xin Rong, 42, is the Office Director and General Manager of Internal Audit Department of the Company. Ms. LIU Xin Rong graduated from Wuhan University of Technology, majoring in Industrial Enterprise Management, and obtained a Master degree in Business Administration from Fudan University. Ms. LIU has over 20 years of experience in financial management, development and corporate management in the property industry. She is a qualified accountant in the PRC. Since joining the Company in October 1999, Ms. LIU was the General Manager of Human Resources Management Center of the Group, Financial Controller and Executive Deputy General Manager of major operating subsidiaries of the Group LEI Yu, Rain, 41, is the General Manager of Legal and Risk Control Center of the Company. Mr. LEI Yu, Rain, graduated from Fudan University with a Bachelor degree in Law and a Master degree in Public Administration. Mr. LEI is a qualified lawyer in the PRC and has over 14 years of working experience in corporate legal management, such as compliance and internal risk control of listed companies, investment in and development of real estate and hotel projects, design of transaction structure and plan, mergers, acquisitions and reorganization of companies, project financing, material contract negotiation, contract management and real estate development, construction and transaction

64 63 DIRECTORS AND SENIOR MANAGEMENT PROFILES (Continued) SUN Yu, 38, is the General Manager of Technology Research and Development Department of the Company. Mr. SUN Yu graduated from Dalian University of Technology with a Master degree in Architecture. He has 11 years of experience in architectural design. Prior to joining Greenland Group in 2010, he worked in East China Architectural Design & Research Institute and had been responsible for the management of various large-scale ultra-high-rise urban complex projects, such as Changsha Greenland Center, Wuhan Greenland Center, Greenland AD 1860 and Greenland Gu Cun Park Business Plaza ZHAO Yi, 41, is Deputy General Manager of Cost Management Department of the Company. Mr. ZHAO Yi graduated from Tongji University with a Bachelor degree in Industrial and Civil Construction. Prior to joining the Company in 2011, he worked in Tomorrow Square, Shimao Property and Yuangao Real Estate. He has over 20 years of experience in cost management, with an extensive experience in dynamic cost estimation and control for the entire process of projects. 41 LI Peng, 31, is the General Manager of Marketing Department of the Company. Mr. LI Peng joined the Northwest Business Division of Greenland Group in 2007 and has 7 years of experience in real estate marketing. He was awarded the Champion for Annual Sales of Weimar Mansion of 2008, the Top Market Manager of 2010 and the One-Star Market Manager of Benteng Award in In 2011, the team led by Mr. LI was also awarded the Champion for Annual Project Sales of the Year Northwest Business Division. In 2012, Mr. LI was recognized as the Business Role Model of the Year of Greenland Group. 31 GE Hao Long, 41, is the general manager of a property company of the Company. Mr. GE Hao Long is a standing member of Shenzhen Property Management Association, a member of the Discipline Inspection Committee of the association, and a visiting professor of Shenzhen Real Estate and Property Management Advanced Training College. Prior to joining the Company, he worked in China Vanke and Shenzhen Poly Property. 41

65 64 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report 2013 REPORT OF THE BOARD OF DIRECTORS REPORT OF THE DIRECTORS The Directors of the Company are pleased to present their annual report together with the audited consolidated accounts of the Group for the year ended 31 December PRINCIPAL ACTIVITIES The Company is an investment holding company. Its subsidiaries are principally engaged in property development, property and hotel investment, property management and education. An analysis of the Group s sales and operating results for the year by principal activities is set out in note 6 to the consolidated accounts. MAJOR CUSTOMERS AND SUPPLIERS The Directors believe that the five largest customers of the Group accounted for about 2.68% of the Group s sales in the year while the five largest suppliers of the Group accounted for about 30.17%, and the largest supplier accounted for about 15.56%, of the Group s purchases in the year % 30.17%15.56% Save for the association with certain related companies as set out in Note 48 to the consolidated accounts, none of the Directors, their associates or any shareholders (which to the knowledge of the Directors owned more than 5% of the Company s share capital) has a beneficial interest in the Group s five largest customers or five largest suppliers. RESULTS The results of the Group for the year ended 31 December 2013 are set out on page 89. DIVIDENDS The Company proposed to pay a special dividend of HK$1.275 for every ordinary share of HK$0.50 each ( Ordinary Share ) and every non-voting convertible preference share of HK$0.50 each ( CPS ) to the holders of Ordinary Shares and CPS whose names appeared on the register of members of the Company on 2 September The payment of the special dividend was approved at the extraordinary general meeting of the Company held on 5 August %

66 65 REPORT OF THE BOARD OF DIRECTORS (Continued) DIVIDENDS (Continued) The Directors recommended a final dividend of HK$0.05 per Ordinary Share and HK$0.05 per CPS for the year ended 31 December 2013 to be paid to holders of Ordinary Shares and CPS whose names appear on the register of members of the Company on 13 June Subject to the passing of the relevant resolution at the annual general meeting which will be held on 4 June 2014, the final dividend is expected to be paid to the shareholders in or before July 2014, in cash in Hong Kong dollars. CLOSURE OF REGISTER OF MEMBERS The annual general meeting of the Company will be held on Wednesday, 4 June 2014 (the AGM ). A notice convening the AGM will be published and dispatched to the shareholders of the Company in the manner required by the Listing Rules in due course The register of members of the Company will be closed from Friday, 30 May 2014 to Wednesday, 4 June 2014 (both days inclusive) during which period no transfer of shares will be effected. In order to determine the entitlement to attend and vote at the AGM, all transfer documents accompanied by the relevant share certificates must be lodged with the Company s branch share registrar in Hong Kong, Tricor Investor Services Limited, at Level 22, Hopewell Centre, 183 Queen s Road East, Hong Kong for registration not later than 4:30 p.m. on Thursday, 29 May In order to determine the identity of the shareholders who are qualified to receive the proposed final dividend, the register of members will be closed on Thursday, 12 June 2014 to Friday, 13 June 2014, both days inclusive, during which period no transfer of shares will be effected. All duly completed transfer documents accompanied by the relevant share certificates must be lodged with the Company s branch share registrar in Hong Kong, Tricor Investor Services Limited, at Level 22, Hopewell Centre, 183 Queen s Road East, Hong Kong not later than 4:30 p.m. on Wednesday, 11 June

67 66 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report 2013 REPORT OF THE BOARD OF DIRECTORS (Continued) FIXED ASSETS Details of the movements in fixed assets during the year are set out in note 20 to the consolidated accounts. BORROWINGS AND INTEREST CAPITALISED Borrowings repayable on demand or within one year are classified under current liabilities. Details of the long-term borrowings are set out in note 35 to the consolidated accounts. Interest and other borrowing costs capitalised by the Group during the year are set out in note 13 to the consolidated accounts. MOVEMENTS OF SHARE CAPITAL Pursuant to ordinary resolutions passed on 5 August 2013: (i) the authorised share capital of the Company was increased from HK$1,000,000,000 (comprising 10,000,000,000 ordinary shares of HK$0.10 each) to HK$5,000,000,000 by the creation of an additional 25,000,000,000 ordinary shares of HK$0.10 each and 15,000,000,000 non-voting convertible preference shares of HK$0.10 each; (i) 25,000,000, ,000,000, ,000,000,000 10,000,000, ,000,000,000 (ii) bonus issue of new shares on the basis of four bonus shares for every ordinary share held by qualified shareholders on 9 August 2013 (being the bonus record date), with an option to elect to receive ordinary shares and/or convertible preference shares for all or part of its entitlement to bonus shares; and (ii) (iii) the ordinary shares and convertible preference shares of the Company were consolidated on the basis of every five ordinary shares into one Ordinary Share and every five convertible preference shares into one CPS. (iii)

68 67 REPORT OF THE BOARD OF DIRECTORS (Continued) MOVEMENTS OF SHARE CAPITAL (Continued) The principal terms of the CPS are set out below: Par value HK$0.50 each Conversion period Any time after issue, provided that the conversion right will be suspended to the extent that it would result in the Company failing to comply with the requirement on public float under the Listing Rules. Conversion ratio Each CPS (at the option of its holder) is convertible at any time (and without payment of any additional consideration) to Shares on a one to one basis. Dividends Each CPS confers on its holder the right to receive dividend pari passu with holders of Ordinary Shares on the basis of the number of Ordinary Share into which each CPS may be converted and on an as converted basis. Distribution of assets On a distribution of assets on liquidation, winding up or a dissolution of the Company, the assets and funds of the Company available for distribution: (a) will first be paid to the holders of CPS pari passu among themselves in respect of the aggregate nominal amounts paid up on the CPS held by them; and (a) (b) the remaining assets will be distributed pari passu to the holders of any class of shares (including the CPS). (b) Voting rights The holders of CPS do not have the right to attend and vote at any general meeting of the Company (except for the winding-up of the Company or for any resolution to vary or abrogate the rights or privileges of the holders of CPS or vary the restrictions to which the CPS are subject). Transferability The CPS are transferable without any restriction by the holders of CPS. Redemption The CPS are non-redeemable. Listing No application has been made for the listing of the CPS on the Stock Exchange or any other stock exchange.

69 68 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report 2013 REPORT OF THE BOARD OF DIRECTORS (Continued) MOVEMENTS OF SHARE CAPITAL (Continued) On 27 August 2013, 685,374,853 Ordinary Shares and 891,317,556 CPS (collectively, Subscription Shares ) were issued to Gluon Xima International Limited (the Subscriber ), an indirect wholly-owned subsidiary of Greenland Holding Group Company Limited ( Greenland Holding ), at the subscription price of HK$1.90 per Subscription Share. 685,374, ,317, As at 31 December 2013, there were a total of 1,485,529,260 CPS in issue, comprising 594,211,704 CPS held by Mr. WANG Weixian and 891,317,556 CPS held by the Subscriber. As at 31 December 2013, none of the CPS has been converted into Ordinary Shares. 1,485,529, ,211, ,317,556 Details of the movements in the share capital during the year are set out in note 42 to the consolidated accounts. ISSUE OF DEBT SECURITIES On 10 October 2013, the Company and Greenland Holding entered into a subscription agreement with The Hongkong and Shanghai Banking Corporation Limited ( HSBC ), J.P. Morgan Securities plc, Morgan Stanley & Co International plc, BOCI Asia Limited, Deutsche Bank AG, Singapore Branch, Citigroup Global Markets Limited and Goldman Sachs (Asia) L.L.C. in relation to the issue of the US$700 million 4.75% bonds due 2016 (the USD Bonds ). Principal terms of the USD Bonds were set out in the announcement of the Company dated 11 October The USD Bonds were listed on the Stock Exchange. 42 J.P. Morgan Securities plc Morgan Stanley & Co International plc Citigroup Global Markets Limited Goldman Sachs (Asia) L.L.C. 700,000, To assist the Company in meeting its obligations under the Bonds and the trust deed between the Company, Greenland Holding and HSBC (as trustee of the USD Bonds) which specified the terms and conditions of the USD Bonds (the Trust Deed ), Greenland Holding entered into a keepwell deed and a deed of equity interest purchase undertaking. Under the keepwell deed, Greenland Holding undertook to, among others, cause the Company to maintain a consolidated net worth position of at least RMB1.00 at all times and to have sufficient liquidity to ensure timely payment of any and all amounts payable under or in respect of the USD Bonds or the Trust Deed (as the case may be) in accordance with the terms and conditions thereof. Under the deed of equity interest purchase undertaking, Greenland Holding undertook to, upon the occurrence of certain events of default under the terms and conditions of the issue of the USD Bonds, subject to satisfaction of certain conditions (including compliance with the Listing Rules by the Company), either by itself or through one of its PRC incorporated subsidiaries purchase certain equity interests in the registered capital of one or more PRC-incorporated subsidiaries of the Company at a certain price in order for the Company to discharge its obligations under the issue of the USD Bonds. 1.00

70 69 REPORT OF THE BOARD OF DIRECTORS (Continued) RESERVES Details of the movements in reserves during the year are set out in note 43 to the consolidated accounts. 43 As at 31 December 2013, the aggregate amount of reserves available for distribution to equity shareholders of the Company was RMB2,225,970,000 (2012: RMB2,165,054,000). DONATIONS The donations made by the Group during the year amounted to RMB847,000 (2012: RMB5,495,000). FIVE-YEAR FINANCIAL SUMMARY A five-year financial summary of the Group is set out on pages 222 to 224. DIRECTORS AND DIRECTORS SERVICE CONTRACTS The Directors of the Company during the year and up to the date of this report were: Executive Directors Mr. CHEN Jun (Chairman and Chief Executive Officer) Mr. WANG Weixian (Honorary Chairman) Mr. HOU Guangjun (Chief Operation Officer) Mr. WU Zhengkui Ms. WANG Xuling Mr. YOU Defeng (Chief Financial Officer) Independent non-executive Directors Mr. CHEONG Ying Chew, Henry Mr. FONG Wo, Felix, JP Mr. JIANG Simon X. Mr. KWAN Kai Cheong 2,225,970,000 2,165,054, ,000 5,495, In accordance with the Company s Articles of Association, Mr. WANG Weixian, Ms. WANG Xuling, Mr. JIANG Simon X. and Mr. KWAN Kai Cheong will retire from the Board at the forthcoming annual general meeting. Being eligible, they offer themselves for re-election. None of the Directors has a service contract with the Company or any of its subsidiaries which is not terminable within one year without payment of compensation other than statutory compensation.

71 70 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report 2013 REPORT OF THE BOARD OF DIRECTORS (Continued) INDEPENDENT NON-EXECUTIVE DIRECTORS CONFIRMATION OF INDEPENDENCE The Company has received independence confirmation from each of the independent non-executive Directors and considers them to be independent. DIRECTORS INTERESTS IN COMPETING BUSINESS In order to eliminate Directors interests in business competing with the Group, on 19 September 2006, Mr. WANG Weixian entered into a deed of non-competition with the Company (the Deed ). In accordance with the terms of the Deed, Mr. WANG Weixian has provided the Company with an annual confirmation that he and his associates (other than the Group) have complied with the terms of the Deed. The independent non-executive Directors of the Company have reviewed the matters relating to the compliance and enforcement of the Deed by Mr. WANG Weixian and his associates (other than the Group) and confirmed that Mr. WANG Weixian and his associates (other than the Group) have complied with the Deed. As at the date of this report, none of the Directors of the Company is considered to have interests in businesses which compete or are likely to compete, either directly or indirectly, with the businesses of the Group.

72 71 REPORT OF THE BOARD OF DIRECTORS (Continued) SHARE OPTIONS Share Option Scheme On 19 September 2006, the Company adopted a share option scheme (the Share Option Scheme ). A summary of the Share Option Scheme is set out below: 1. Purpose of the Share Option Scheme: The purpose of the Share Option Scheme is to recognize and acknowledge the contributions of the participants to the growth of the Group by granting options to them as incentives or rewards. 2. Participants of the Share Option Scheme: The Board may, in its discretion, offer to grant options to subscribe for such number of shares as the Board may determine to the following participants: (i) any executive and employee of the Group; or (i) (ii) any director (including non-executive directors and independent non-executive directors) of the Group; or (ii) (iii) any consultant, adviser and/or agent of the Group. (iii) 3. Total number of shares available for issue under the Share Option Scheme: The maximum number of shares in respect of which options may be granted under the Share Option Scheme must not in aggregate exceed 10% of the issued share capital of the Company, as refreshed at the annual general meeting of the Company. The annual general meeting of the Company on 8 June 2007 refreshed the Share Option Scheme mandate limit to 103,750,000 shares. 4. Maximum entitlement of each participant under the Share Option Scheme: The maximum entitlement for each participant is that the total number of shares of the Company issued and to be issued upon exercise of the options granted to each participant (including both exercised, cancelled and outstanding options) in any 12-month period shall not exceed 1% of the total number of shares of the Company in issue. Any grant of further options above this limit shall be subject to certain requirements as stipulated in the rules of the Share Option Scheme. 5. The period within which the shares must be taken up under an option: Subject to the rules of the Share Option Scheme, options may be exercised by a participant, in whole or in part, at any time during the period commencing from the date of grant and expiring at 5:00 p.m. on the business day (i) preceding the fifth anniversary of the date of grant or (ii) preceding the expiry of the Share Option Scheme, whichever is the earlier % 103,750, % 5. (i) (ii)

73 72 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report 2013 REPORT OF THE BOARD OF DIRECTORS (Continued) SHARE OPTIONS (Continued) Share Option Scheme (Continued) 6. The minimum period for which an option must be held before it can be exercised: No option may be exercised until the expiry of 12 months after the date of grant. A grantee may be required to achieve such performance targets as determined by the Board before any options granted under the Share Option Scheme can be exercised The amount payable on application or acceptance of the option and the period within which payments or calls must or may be made, or loans for such purposes must be repaid: Nil The basis of determining the exercise price: The subscription price of a share in respect of any particular option granted under the Share Option Scheme shall be such price as the Board in its absolute discretion shall determine, save that such price shall at least be the higher of: 8. (i) the closing price of the shares as stated in the Stock Exchange s daily quotations sheet on the date of offer, which must be a day on which the Stock Exchange is open for the business of dealing in securities ( Business Day ); and (i) (ii) the average of the closing prices of the shares as stated in the Stock Exchange s daily quotations sheets for the five Business Days immediately preceding the date of offer, or (where applicable) such price as from time to time adjusted pursuant to the Share Option Scheme. (ii) 9. The remaining life of the Share Option Scheme: The Share Option Scheme is valid and effective for a period of 10 years commencing on 19 September 2006 and will expire at 5:00 p.m. on the Business Day preceding the tenth anniversary thereof. 9. There were no option granted, exercised, cancelled or lapsed during the year ended 31 December 2013.

74 73 REPORT OF THE BOARD OF DIRECTORS (Continued) DIRECTORS INTERESTS IN SECURITIES As at 31 December 2013, the interests of each Director and chief executive of the Company in the equity or debt securities of the Company or any associated corporation (within the meaning of the Securities and Futures Ordinance ( SFO )) which (a) were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they are taken or deemed to have under such provisions of the SFO); or (b) were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (c) were required, pursuant to the Model Code to be notified to the Company and the Stock Exchange were as follows: (a) XV78 (b)352 (c) Aggregate long position in shares of the Company: Number of Approximate Ordinary Shares/ percentage of Approximate Number of CPS/ shareholding in percentage of Approximate the Company s shareholding in percentage of issued share Company s shareholding in capital Name of Director Capacity and nature of interest Ordinary Shares Company s CPS (Note 4) 4 Mr. WANG Weixian Interest of controlled corporation (Note 1) 25,103, ,408, % 1 (2.20)% (6.76)% Beneficiary of discretionary trust (Note 2) 123,450, ,803, % 2 (10.81)% (33.24)% Ms. WANG Xuling Beneficial owner 4,000, % (0.35)% Interest of controlled corporation (Note 3) 10,250, % 3 (0.90)% Beneficiary of discretionary trust (Note 2) 123,450, ,803, % 2 (10.81)% (33.24)% Mr. YOU Defeng Beneficial owner 3,000, % (0.26)% Mr. CHEONG Ying Chew, Henry Beneficial owner 500, % (0.04)% Mr. FONG Wo, Felix, JP Beneficial owner 500, % (0.04)% Mr. JIANG Simon X. Beneficial owner 500, % (0.04)% Mr. KWAN Kai Cheong Beneficial owner 500, % (0.04)%

75 74 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report 2013 REPORT OF THE BOARD OF DIRECTORS (Continued) DIRECTORS INTERESTS IN SECURITIES (Continued) Aggregate long position in shares of the Company: (Continued) Notes: (1) Mr. WANG Weixian was deemed to be interested in 25,103,099 Ordinary Shares and 100,408,398 CPS which are held by Prestige Glory Enterprises Limited. The entire issued share capital of Prestige Glory Enterprises Limited was beneficially owned by Mr. WANG Weixian. (1) 25,102, ,408,398 Prestige Glory Enterprises Limited Prestige Glory Enterprises Limited (2) Each of Mr. WANG Weixian and Ms. WANG Xuling was deemed to be interested in an aggregate of 123,450,826 Ordinary Shares and 493,803,306 CPS, which were held by SPG Investment Holdings Ltd. and Brilliant Bright Investment Limited, respectively: (2) 123,450, ,803,306 SPG Investment Holdings Ltd. Brilliant Bright Investment Limited (a) 101,348,328 Ordinary Shares and 405,393,312 CPS were held by SPG Investment Holdings Ltd. which is a wholly-owned subsidiary of SPG Asset Management Limited. The entire issued share capital of SPG Asset Management Limited was held by Brilliant Bright Investment Limited; and (a) 101,348, ,393,312 SPG Investment Holdings Ltd. SPG Asset Management Limited SPG Asset Management Limited Brilliant Bright Investment Limited (b) 22,102,498 Ordinary Shares and 88,409,994 CPS were held by Brilliant Bright Investment Limited. (b) 22,102,498 88,409,994 Brilliant Bright Investment Limited Brilliant Bright Investment Limited is a wholly-owned subsidiary of HSBC International Trustee Limited which was the trustee of a discretionary trust of which family members of Mr. WANG Weixian (including Mr. WANG Weixian and Ms. WANG Xuling) were discretionary beneficiaries. Brilliant Bright Investment Limited HSBC International Trustee LimitedHSBC International Trustee Limited (3) Ms. WANG Xuling was deemed to be interested in 10,250,448 shares, which were held by Boom Rich Investments Limited which was in turn entirely beneficially owned by Ms. WANG Xuling. (3) 10,250,448 Boom Rich Investments Limited (4) Representing the issued and fully paid-up capital of the Company as at 31 December 2013 comprising 1,142,291,423 Ordinary Shares and 1,485,529,260 CPS. (4) 1,142,291,423 1,485,529,260

76 75 REPORT OF THE BOARD OF DIRECTORS (Continued) DIRECTORS INTERESTS IN SECURITIES (Continued) Aggregate long position in shares of the Company: (Continued) Save as disclosed above, as at 31 December 2013, none of the Directors, chief executives of the Company and their respective associates had any personal, family, corporate or other interests or short positions in the shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which would have to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which they are taken or deemed to have under such provisions of the SFO), or which were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein, or which were required, pursuant to the Model Code, to be notified to the Company and the Stock Exchange. XV XV Apart from the foregoing, at no time during the year was the Company or any of its subsidiaries a party to any arrangements to enable the Directors or any of their spouses or children under 18 years of age to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate, and no Directors or chief executives or their respective spouses or children under 18 years of age had been granted any right to subscribe for equity or debt securities of the Company nor exercised any such right.

77 76 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report 2013 REPORT OF THE BOARD OF DIRECTORS (Continued) SUBSTANTIAL SHAREHOLDERS Other than interests disclosed in the section headed Directors Interests in Securities above, as at 31 December 2013, according to the register of interests kept by the Company under section 336 of the SFO, the following entities had interests or short positions in the shares of the Company which fall to be disclosed to the Company under Divisions 2 and 3 of Part XV of the SFO: 336 XV23 Name of shareholder Capacity and nature of interest Number of Ordinary Shares/ Approximate percentage of shareholding in Company s Ordinary Shares Number of CPS/ Approximate percentage of shareholding in Company s CPS Approximate percentage of shareholding in the Company s issued share capital (Note 5) 5 Gluon Xima International Limited Beneficial owner (Note 1) 685,374, ,317, % 1 (60.0)% (60.0)% Greenland Holding Group Interest of controlled corporation (Note 1) 685,374, ,317, % Company Limited 1 (60.0)% (60.0)% SPG Investment Holdings Ltd. Beneficial owner (Notes 2 and 3) 101,348, ,393, % 2 3 (8.87)% (27.29)% SPG Asset Management Interest of controlled corporation 101,348, ,393, % (Notes 2 and 3) (8.87)% (27.29)% 2 3 Prestige Glory Enterprises Limited Beneficial owner (Note 3) 25,103, ,408, % 3 (2.20)% (6.76)% Brilliant Bright Investment Limited Beneficial owner 22,102,498 88,409, % (1.93)% (5.95)% Interest of controlled corporation 101,348, ,393, % (Notes 2 and 4) (8.87)% (27.29)% 2 4 HSBC International Trustee Limited Trustee (Note 4) 123,450, ,803, % 4 (10.81)% (33.24)% Notes: (1) 685,374,853 Ordinary Shares and 891,317,556 CPS were held by Gluon Xima International Limited ( Gluon Xima ) which was a wholly-owned subsidiary of Hong Kong Vee Eight Limited. The entire issued share capital of Hong Kong Vee Eight Limited was held by Greenland Holding Group Company Limited ( Greenland Holding ). Each of Hong Kong Vee Eight Limited and Greenland Holding Group Company Limited was deemed to be interested in 685,374,853 Ordinary Shares and 891,317,556 CPS under the SFO. (1) 685,374, ,317,556 Hong Kong Vee Eight Limited Hong Kong Vee Eight Limited Hong Kong Vee Eight Limited 685,374, ,317,556

78 77 REPORT OF THE BOARD OF DIRECTORS (Continued) SUBSTANTIAL SHAREHOLDERS (Continued) Notes: (Continued) (2) 101,348,328 Ordinary Shares and 405,393,312 CPS were held by SPG Investment Holdings Ltd. which was a wholly-owned subsidiary of SPG Asset Management Limited. The entire issued share capital of SPG Asset Management Limited was held by Brilliant Bright Investment Limited. Each of SPG Asset Management Limited and Brilliant Bright Investment Limited was deemed to be interested in 101,348,328 Ordinary Shares and 405,393,312 CPS under the SFO. (2) 101,348, ,393,312 SPG Investment Holdings Ltd. SPG Investment Holdings Ltd. SPG Asset Management Limited SPG Asset Management Limited Brilliant Bright Investment Limited SPG Asset Management Limited Brilliant Bright Investment Limited 101,348, ,393,312 (3) Mr. WANG Weixian was a director of SPG Investment Holdings Ltd., SPG Asset Management Limited and Prestige Glory Enterprises Limited. (3) SPG Investment Holdings Ltd. SPG Asset Management Limited Prestige Glory Enterprises Limited (4) Brilliant Bright Investment Limited is a wholly-owned subsidiary of HSBC International Trustee Limited which was the trustee of a discretionary trust of which family members of Mr. WANG Weixian (including Mr. WANG Weixian and Ms. WANG Xuling) were discretionary beneficiaries. (4) Brilliant Bright Investment Limited HSBC International Trustee LimitedHSBC International Trustee Limited (5) Representing the issued and fully paid-up capital of the Company as at 31 December 2013 comprising 1,142,291,423 Ordinary Shares and 1,485,529,260 CPS. CONNECTED TRANSACTIONS During the year ended 31 December 2013, the Group entered into the following transactions and arrangements with persons who constituted connected persons for the purpose of the Listing Rules: (5) 1,142,291,423 1,485,529,260 On 4 January 2013, (Shanghai Oriental Cambridge Property Development Co., Ltd.*) (a wholly-owned subsidiary of the Company, Shanghai Oriental Cambridge ) (as vendor) and (Wuxi Taihu New Town Development Group Co., Ltd.*, Wuxi Taihu, then holder of 40% of the equity interest in Wuxi Xindu) (as purchaser) entered into an agreement (the Wuxi SPA ) pursuant to which Shanghai Oriental Cambridge agreed to sell and Wuxi Taihu agreed to purchase 60% of the equity interest owned by Shanghai Oriental Cambridge in (Wuxi Xindu Real Estate Development Limited*, Wuxi Xindu ), and interestfree shareholder s loans in the aggregate amount of RMB979,000,000 advanced by Shanghai Oriental Cambridge to Wuxi Xindu at the total consideration of RMB1,098,776,400. In connection with the sale and purchase contemplated under the Wuxi SPA, the Company entered into a guarantee in favour of Wuxi Taihu on 4 January 2013 whereby the Company agreed to guarantee the performance of Shanghai Oriental Cambridge of its obligations under the Wuxi SPA. Upon completion of the transactions contemplated under the Wuxi SPA, Wuxi Xindu was held entirely by Wuxi Taihu. Details of the Wuxi SPA were set out in the announcement of the Company dated 6 January 2013 and the circular of the Company dated 22 May % 60% 979,000,000 1,098,776,400

79 78 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report 2013 REPORT OF THE BOARD OF DIRECTORS (Continued) CONNECTED TRANSACTIONS (Continued) On 8 May 2013, the Company (as vendor), Silversonic Profit Holding Limited (a wholly-owned subsidiary under the Duanyuan Trust, a discretionary trust of which Mr. Wang Weixian, Ms. Wang Xuling and family members of Mr. Wang Weixian are discretionary beneficiaries and of which the trustee was HSBC International Trustee Limited, Silversonic ) (as purchaser) and Mr. WANG Weixian (as covenantor) entered into an agreement (the Delta Link SPA ) pursuant to which the Company agreed to sell and Silversonic agreed to purchase (1) the entire issued share capital of Delta Link Holdings Limited (a wholly-owned subsidiary of the Company before the disposal, Delta Link ) and (2) the noninterest bearing loan owed by Delta Link to the Company in the principal amount of US$1,750,000 and the non-interest bearing loan owed by Evermore Gain Limited (a wholly-owned subsidiary of Peninsula Shanghai (BVI) Limited, which is a company incorporated in BVI and an indirect associated company of the Company) to SPG Land (Management) Limited (a wholly-owned subsidiary of the Company) in the principal amount of US$8,100,000; at the total consideration of HK$1,277,837,609 (which was deemed to be the equivalent of RMB1,027,283,229). The disposal contemplated under the Delta Link SPA was completed on 27 August 2013, upon which Delta Link (and its subsidiaries) ceased to be subsidiaries of the Company. Details of the Delta Link SPA were set out in the announcement of the Company dated 8 May 2013 and the circular of the Company dated 11 July Silversonic Profit Holding Limited HSBC International Trustee Limited Silversonic Delta Link Silversonic(1) Delta Link Holdings Limited Delta Link (2) Delta Link1,750,000 Evermore Gain Limited Peninsula Shanghai (BVI) Limited SPG Land (Management) Limited 8,100,000 1,277,837,609 1,027,283,229Delta Link Delta Link Delta Link On 8 May 2013, the Company (as issuer) and Gluon Xima (as subscriber) entered into a subscription agreement (the Subscription Agreement ) pursuant to which the Company agreed to issue and Gluon Xima agreed to subscribe for the Subscription Shares (at the subscription price of HK$1.90 per Subscription Share) at the total consideration of approximately HK$2,996 million. Details of the Subscription Agreement were set out in the announcement of the Company dated 8 May 2013 and the circular of the Company dated 11 July ,996,000,000

80 79 REPORT OF THE BOARD OF DIRECTORS (Continued) CONNECTED TRANSACTIONS (Continued) On 30 September 2013, Vite Wight International Limited (a whollyowned subsidiary of Greenland Holding, Vite Wight ) (as vendor), SPG Investment XVII (BVI) Limited (a wholly-owned subsidiary of the Company, SPG XVII ) (as purchaser), Greenland Holding (as vendor s guarantor) and the Company (as purchaser s guarantor) entered into an agreement (the Xu Bao SPA ), pursuant to which Vite Wight agreed to sell and SPG XVII agreed to purchase 50% of the entire issued share capital of Xu Bao Co. Limited (a joint venture company indirectly owned as to 50% by Vite Wight and 50% by CIFI Holdings (Group) Co. Ltd., Xu Bao ) and the non-interest bearing loan owed by Xu Bao to Vite Wight in the principal amount of US$145,500,000; at the total consideration of US$145,508,200. Details of the Xu Bao SPA were set out in the announcement of the Company dated 2 October 2013 and the circular of the Company dated 14 November Upon completion of the sale and purchase contemplated under the Xu Bao SPA, Xu Bao was held as to 50% by SPG XVII. SPG Investment XVII (BVI) Limited SPG XVII SPG XVII 50% 50% 50% 145,500, ,508,200 SPG XVII 50% On 30 October 2013, Shanghai Oriental Cambridge and (Greenland Real Estate Group Co. Ltd.*, a whollyowned subsidiary of Greenland Holding, Greenland Real Estate ) entered into an agreement (the Capital Injection Agreement ), pursuant to which Shanghai Oriental Cambridge agreed to make capital injection in the aggregate amount of RMB124,960,142 into the capital of (Greenland Group (Kunming) Property Co. Ltd.*, Greenland Kunming ). Shanghai Oriental Cambridge further agreed to (i) advance RMB826,870,000 (subject to adjustment) to Greenland Kunming as repayment of approximately 55% of the then outstanding shareholder s loan owing by Greenland Kunming to Greenland Real Estate and (ii) provide funding in the total amount of approximately RMB600,080,000 to Greenland Kunming for the payment of land premium in respect of two land parcels located in Kunming City. Upon completion of the aforesaid capital injection, Greenland Kunming was held as to 55% by Shanghai Oriental Cambridge and 45% by Greenland Real Estate. Details of the Capital Injection Agreement were set out in the announcement of the Company dated 31 October 2013 and the circular of the Company dated 31 March ,960,142 (i) 826,870,000 55% (ii) 600,080,000 55% 45% Save as disclosed above, no other contracts of significance in relation to the Company s business to which the Company or any of its subsidiaries was a party and in which a Director of the Company had a material interest, whether directly or indirectly, subsisted at the end of the year or at any time during the year.

81 80 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report 2013 REPORT OF THE BOARD OF DIRECTORS (Continued) CONTINUING CONNECTED TRANSACTIONS On 28 October 2013, the Company and (Greenland Group Senmao Landscape Engineering Co., Ltd.*, a whollyowned subsidiary of Greenland Holding, Senmao ) entered into a framework agreement (the Framework Agreement ) pursuant to which Senmao agreed to undertake landscape construction works in respect of two development projects (located in Kunming City and Wuxi City respectively) of the Group. It was expected that the consideration payable to Senmao by the Group under the Framework Agreement for the year ended 31 December 2013 would not exceed RMB2.62 million (in respect of the development project located at Wuxi) and RMB3.99 million (in respect of the development project located at Kunming). The annual cap was arrived at after arm s length negotiations between the parties and was determined with reference to the prevailing market terms offered by independent service providers for landscape construction works in similar development projects. For the year ended 31 December 2013, the consideration payable to Senmao for the landscape construction works provided under the Framework Agreement was approximately RMB2.63 million (in respect of the development project located at Wuxi) and RMB3.99 million (in respect of the development project located at Kunming). Details of the Framework Agreement were set out in the announcement of the Company dated 29 October ,620,000 3,990,000 2,630,000 3,990,000 The independent non-executive Directors have reviewed and confirmed that the continuing connected transactions disclosed above were: (a) entered into by the Group in the ordinary and usual course of its business; (a) (b) entered into on normal commercial terms or on terms no less favourable than terms available from independent third parties; and (b) (c) entered into in accordance with the terms of the relevant agreements governing such transactions and on terms that are fair and reasonable so far as the shareholders of the Company as a whole (c) are concerned.

82 81 REPORT OF THE BOARD OF DIRECTORS (Continued) CONTINUING CONNECTED TRANSACTIONS (Continued) The auditors of the Company, KPMG, have also confirmed that the continuing connected transactions disclosed above: (i) had received the approval of the Board; (i) (ii) were entered into in accordance with the relevant agreement governing the transactions; and (ii) (iii) had not exceeded the annual cap as disclosed in the relevant announcement. (iii) The Company s auditors, KPMG, were engaged to report on the Group s continuing connected transactions in accordance with Hong Kong Standard on Assurance Engagements 3000 Assurance Engagements Other Than Audits or Reviews of Historical Financial Information and with reference to Practice Note 740 Auditor s Letter on Continuing Connected Transactions under the Hong Kong Listing Rules issued by the Hong Kong Institute of Certified Public Accountants. The auditors have issued their unqualified letter containing their findings and conclusions in respect of the continuing connected transactions disclosed above in accordance with Rule 14A.38 of the Listing Rules. A copy of the auditor s letter has been provided by the Company to the Stock Exchange A.38 Details of the related-party transactions undertaken by the Group during the year are set out in note 48 to the consolidated accounts. Save as disclosed above, the related-party transactions either did not constitute connected transactions/continuing connected transactions or constituted connected transactions/continuing connected transactions but were exempted from all disclosure and independent shareholders approval requirements under Chapter 14A of the Listing Rules. MANAGEMENT CONTRACTS No contract concerning the management and administration of the whole or any substantial part of the business of the Company was entered into or existed during the year A

83 82 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report 2013 REPORT OF THE BOARD OF DIRECTORS (Continued) REMUNERATION POLICY The remuneration policy of the employees of the Group is formulated by the remuneration committee which takes into account individual performance, qualifications and competence. The remuneration of the executive Directors of the Company are recommended by the remuneration committee, having regard to the Company s operating results, individual performance and comparable market statistics. The remuneration of the non-executive Directors (including the independent non-executive Directors) of the Company are recommended by the remuneration committee. The Company has adopted the Share Option Scheme and share award scheme (the Share Award Scheme ) to provide incentive to the directors and eligible employees of the Group, details of the Share Option Scheme are set out in the paragraph headed Share Options above. The Company adopted the Share Award Scheme on 3 December 2010 for a term of 10 years, pursuant to which the remuneration committee may once every six months at the interim and year-end of a financial year of the Company, make an award of Ordinary Shares in the Company to an eligible participant. Eligible participants include any executive or employee (whether serving full-time or part-time) or director of the Group from time to time. The maximum number of Ordinary Shares of the Company to be issued to or purchased for the purpose of the Share Award Scheme shall not exceed 5% the total number of issued Ordinary Shares of the Company as at the beginning of a financial year of the Company, and further shall not in aggregate exceed 10% of the Ordinary Shares in issue as at 3 December % 10% On 1 April 2012, the Board of Directors approved the details of the implementing rules to the Share Award Scheme further specifying the eligible employees, vesting conditions and factors in deciding the number of Ordinary Shares to be granted under the Share Award Scheme (the Implementing Rules ). Pursuant to the terms of the Implementing Rules, the total maximum number of Ordinary Shares that may be awarded shall not exceed 25,000,000. Details of the Share Award Scheme were set out in the Company s announcement of 3 December 2010 and details of the Implementing Rules to the Share Award Scheme were set out in Note 40 to the Company s 2012 Annual Report Notes to the Consolidated Financial Statements. 25,000,000 40

84 83 REPORT OF THE BOARD OF DIRECTORS (Continued) REMUNERATION POLICY(Continued) On 2 April 2013, the Board of Directors approved the grant of 16,103,000 Ordinary Shares of the Company to eligible participants under the Share Award Scheme. Of the total number of Ordinary Shares granted, 400,000 Ordinary Shares were granted to Ms. Wang Xuling, 2,740,000 Ordinary Shares were granted to Mr. You Defeng and 2,000,000 Ordinary Shares were granted to the four independent nonexecutive directors (500,000 shares each) respectively. The Ordinary Shares granted to the independent non-executive directors vested immediately. The vesting date of the Ordinary Shares granted to Ms. Wang Xuling and Mr. You Defeng is 31 March During the year ended 31 December 2013, certain employees resigned from the Group and consequently 5,257,000 granted (but unvested) Ordinary Shares were forfeited. PURCHASE, SALE OR REDEMPTION OF THE COMPANY S LISTED SECURITIES Neither the Company nor any of its subsidiaries has purchased, redeemed or sold any of the Company s listed securities during the year ended 31 December 2013, except that the trustee of the Share Award Scheme, pursuant to the terms of the trust deed of the Share Award Scheme, purchased on the Stock Exchange a total of 2,500,000 Ordinary Shares of the Company at a total consideration of HK$7,884,581 and that the Company on 10 November 2013 at a redemption price of US$226,016,000 redeemed and cancelled all of it s outstanding US$200 million principal amount of 13.5% senior notes due 2016 which were listed on the Official List of the Singapore Exchange Securities Trading Limited. PRE-EMPTIVE RIGHTS No pre-emptive rights exist in the Cayman Islands (being the jurisdiction in which the Company is incorporated). MODEL CODE FOR SECURITIES TRANSACTIONS BY DIRECTORS The Company adopted the Model Code as set out in Appendix 10 to the Listing Rules as its code of conduct for dealings in securities of the Company by the Directors. Based on specific enquiry by the Company, all Directors have confirmed that they have complied with the required standards set out in the Model Code during the year ended 31 December CORPORATE GOVERNANCE Principal corporate governance practices adopted by the Company are set out in the Corporate Governance Report. 16,103, ,000 2,740,000 2,000, ,000 5,257,000 7,884,581 2,500, ,016, ,000,

85 84 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report 2013 REPORT OF THE BOARD OF DIRECTORS (Continued) CHANGES IN INFORMATION OF DIRECTORS Pursuant to Rule 13.51B of the Listing Rules, the changes in information of Directors subsequent to the publication of the interim report of the Company for the six months ended 30 June 2013 are set out below: 13.51B Mr. WANG Wexian ceased to be Chairman of the Board, chairman of the Nomination Committee and a member of the Remuneration Committee as of 27 August Ms. WANG Xuling ceased to be Chief Executive Officer of the Company and a member of the Nomination Committee, and became a member of the Remuneration Committee, as of 27 August AUDIT COMMITTEE The Company s audit committee is composed of all the four independent non-executive Directors of the Company. The audit committee has reviewed with the management of the Company the accounting principles and practices adopted by the Group and discussed internal controls and financial reporting matters including a review of the audited consolidated accounts for the year ended 31 December SUFFICIENCY OF PUBLIC FLOAT Based on the information that is publicly available to the Company and within the knowledge of its Directors, the Directors confirm that the Company has maintained throughout the year of 2013 the amount of public float as required under the Listing Rules. EVENTS AFTER THE BALANCE SHEET DATE Issue of RMB Bonds On 23 January 2014, the Company issued RMB1,500,000, % bonds due 2018 (the RMB Bonds ) by way of private placement. Principal terms of the RMB Bonds were set out in the announcement of the Company dated 23 January To assist the Company in meeting its obligations under the RMB Bonds and the relevant trust deed, Greenland Holding entered into a keepwell deed and a deed of equity interest purchase undertaking (on terms which were substantially similar to those in connection with the USD Bonds, details of which were set out in the announcement of the Company dated 11 October 2013). 1,500,000,

86 85 REPORT OF THE BOARD OF DIRECTORS (Continued) EVENTS AFTER THE BALANCE SHEET DATE (Continued) Term Loan Facilities obtained by Xu Bao HK On 29 January 2014, Xu Bao (HK) Co. Limited (a wholly-owned subsidiary of Xu Bao, which was indirectly owned as to 50% by the Company and 50% by CIFI Holdings (Group) Co. Ltd., Xu Bao HK ) as borrower entered into an offshore facility agreement and an onshore facility agreement (the Facility Agreements ) with, among others, a group of financial institutions as lenders (the Lenders ). 50% 50% The offshore term loan facility was a dual-currency term loan facility with an aggregate amount of approximately US$320 million divided into two tranches: (i) United States dollar tranche with an aggregate amount of US$225 million; and (ii) Hong Kong dollar tranche with an aggregate amount of HK$741 million, with final maturity of three years from the date of the first utilization and with interest at London interbank market rate or Hong Kong interbank market rate (as applicable) plus 4.00% per annum. The onshore term loan facility was a term loan facility with a facility amount of RMB1 billion, with final maturity of three years from the date of the first utilization and with interest of 106% times the base interest rate determined by the People s Bank of China per annum. 320,000,000 (i) 225,000,000 (ii) 741,000, % % Pursuant to the Facility Agreements, it was required that, among others, (i) at least 51% of the Company s issued share capital will continue to be beneficially owned by Greenland Holding and the Company remains under the management control of Greenland Holding, and (ii) the entire issued share capital of SPG XVII will continue to be beneficially owned by the Company, otherwise it will lead to an event of default. Upon and at any time after the occurrence of an event of default, the Lenders may immediately cancel all or any part of their respective commitments and the outstanding amount under the Facility Agreements together with interest accrued thereon may become immediately due and payable. (i)51% (ii) SPG XVII Acquisition of land use rights and formation of Joint Venture On 11 December 2013, the Group, through its wholly-owned subsidiary True Thrive Investments Limited ( True Thrive ), successfully won the bid for the land use rights to certain parcels of land located in the Huangpu District of Shanghai in the PRC for a total consideration of RMB5,950 million. On 14 January 2014, China Resources Land Limited, a company whose shares are listed on the Hong Kong Stock Exchange ( China Resources ) and the Group entered into a cooperation agreement in respect of the development of the relevant parcels of land (the Cooperation Agreement ). True Thrive Investments LimitedTrue Thrive 5,950,000,000

87 86 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report 2013 REPORT OF THE BOARD OF DIRECTORS (Continued) EVENTS AFTER THE BALANCE SHEET DATE (Continued) Acquisition of land use rights and formation of Joint Venture (Continued) Pursuant to the Cooperation Agreement, on 15 January 2014, a whollyowned subsidiary of China Resources subscribed for and Prosper Spring Investments Limited ( Prosper Spring ), the parent company of True Thrive, issued to China Resources wholly-owned subsidiary one new ordinary share in itself, representing 50% of the issued share capital as enlarged by the subscription. Upon completion of such subscription, the Group owned 50% of the equity interests in Prosper Spring and Prosper Spring became a jointly controlled entity of the Group. True Thrive Prosper Spring Investments LimitedProsper Spring 50% Prosper Spring 50%Prosper Spring AUDITORS The consolidated financial statements for the year have been audited by KPMG. On behalf of the Board CHEN Jun Chairman Hong Kong, 12 March 2014 * for identification purposes only

88 87 REPORT OF THE AUDITORS Independent auditors report to the shareholders of Greenland Hong Kong Holdings Limited (Formerly SPG Land (Holdings) Limited) (Incorporated in the Cayman Islands with limited liability) We have audited the consolidated financial statements of Greenland Hong Kong Holdings Limited (formerly known as SPG Land (Holdings) Limited) ( the Company ) and its subsidiaries (hereinafter collectively referred to as the Group ) set out on pages 89 to 221, which comprise the consolidated balance sheet of the Group and the balance sheet of the Company as at 31 December 2013, and the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows of the Group for the year then ended, and a summary of significant accounting policies and other explanatory notes. DIRECTORS RESPONSIBILITY FOR THE FINANCIAL STATEMENTS The directors of the Company are responsible for the preparation of financial statements that give a true and fair view in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board and the disclosure requirements of the Hong Kong Companies Ordinance, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. AUDITORS RESPONSIBILITY Our responsibility is to express an opinion on these financial statements based on our audit. This report is made solely to you, as a body, and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report We conducted our audit in accordance with Hong Kong Standards on Auditing issued by the Hong Kong Institute of Certified Public Accountants. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

89 88 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report 2013 REPORT OF THE AUDITORS (Continued) An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the entity s preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. OPINION In our opinion, the consolidated financial statements give a true and fair view of the state of affairs of the Company and of the Group as at 31 December 2013 and of the Group s profit and cash flows for the year then ended in accordance with International Financial Reporting Standards and have been properly prepared in accordance with the disclosure requirements of the Hong Kong Companies Ordinance. KPMG Certified Public Accountants 8th Floor, Prince s Building 10 Chater Road Central, Hong Kong 12 March

90 89 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the year ended 31 December Note RMB 000 RMB 000 Revenue 8 5,447,768 1,766,535 Cost of sales (4,001,353) (1,361,577) Gross profit 1,446, ,958 Other income 9 63,515 17,691 Selling and marketing costs (87,532) (94,615) Administrative expenses (329,707) (316,483) Other operating expenses 10 (344,454) (571,114) Net gain on disposal of interests in subsidiaries 7 214, ,499 Results from operating activities 962,591 (425,064) Finance income 99,057 99,003 Finance expenses (415,331) (277,226) Fair value changes on financial derivatives 112, Net finance expenses 13 (203,462) (177,371) Share of losses of associates (114,096) (102,252) Share of losses of joint ventures (48,175) (32,579) Profit/(Loss) before revaluation losses on investment properties and income tax 596,858 (737,266) Revaluation losses on investment properties 24 (80,539) (65,490) Profit/(Loss) before income tax 516,319 (802,756) Income tax expense 14 (483,169) (185,604) Profit/(Loss) for the year 33,150 (988,360) Profit/(Loss) attributable to: Equity holders of the Company 34,513 (938,248) Non-controlling interests (1,363) (50,112) Profit/(Loss) for the year 33,150 (988,360) Earnings/(Loss) per share Basic earnings/(loss) per share (RMB) Diluted earnings/(loss) per share (RMB) (0.92) (0.92) The notes on pages 97 to 221 form part of these financial statements. Details of dividends payable to equity holders of the Company are set out in note

91 90 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report 2013 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Continued) For the year ended 31 December Note RMB 000 RMB 000 Profit/(Loss) for the year 33,150 (988,360) Other comprehensive income for the year, net of income tax Item that may be reclassified subsequently to profit or loss: Exchange differences on translation 17 16,352 (43) Total comprehensive income for the year 49,502 (988,403) Total comprehensive income attributable to: Equity holders of the Company 40,506 (938,291) Non-controlling interests 8,996 (50,112) Total comprehensive income for the year 49,502 (988,403) The notes on pages 97 to 221 form part of these financial statements. Details of dividends payable to equity holders of the Company are set out in note

92 91 CONSOLIDATED BALANCE SHEET AND COMPANY BALANCE SHEET As at 31 December 2013 Group Company Note RMB 000 RMB 000 RMB 000 RMB 000 Assets Property, plant and equipment , ,388 Intangible assets 21 1,476 1,521 Land use rights 22 74,953 76,826 Other investments 23 2,800 35,432 Properties under development 25 6,832,762 4,062,629 Investment properties 24 1,719,000 1,758,000 Interests in associates 27 3, ,325 Interests in joint ventures , ,556 Investment in subsidiaries 29 8,338,808 4,143,447 Long-term receivable , ,590 Deferred tax assets 34(iv) 212, ,571 Total non-current assets 11,121,099 9,563,838 8,338,808 4,143,447 Properties under development 25 2,205,091 2,380,515 Completed properties held for sale 26 2,651,528 2,694,340 Other investments ,436 Trade, other receivables and advance deposits Long-term receivable within one year 30 3,964,698 2,230, , , , ,007 Restricted cash , ,697 Cash and cash equivalents , , Assets classified as held for sale 4,193,626 Total current assets 10,618,608 13,489, , ,191 Total assets 21,739,707 23,053,130 8,763,033 4,567,638 Equity Share capital 42 1,068, ,591 1,068, ,591 Share premium 43 2,362,986 2,069,086 2,362,986 2,069,086 Reserves , , , ,142 Retained earnings/ (Accumulated losses) Total equity attributable to equity holders of the Company 1,355,871 1,312,056 (446,686) (213,702) 5,620,184 4,278,299 3,314,639 2,277,117 Non-controlling interests 86,889 31,273 Total equity 5,707,073 4,309,572 3,314,639 2,277,117 The notes on pages 97 to 221 form part of these financial statements

93 92 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report 2013 CONSOLIDATED BALANCE SHEET AND COMPANY BALANCE SHEET (Continued) As at 31 December 2013 Group Company Note RMB 000 RMB 000 RMB 000 RMB 000 Liabilities Interest-bearing loans 35 1,725,007 3,873,190 Trade, other payables and advance receipts 36 7,325,317 7,207, , ,896 Tax payable 34(i) 916,405 1,187,142 Long-term payable within one year 37 6,000 6,000 Total liabilities associated with assets classified as held for sale 3,188,578 Total current liabilities 9,972,729 15,462, , ,896 Interest-bearing loans 35 1,441,839 1,730,822 Long-term payable 37 33,935 37, , ,025 Financial derivatives 890 Senior notes 38 1,233,600 1,233,600 Bonds 39 4,224,594 4,224,594 Deferred tax liabilities 34(iv) 359, ,935 Total non-current liabilities 6,059,905 3,281,314 4,652,619 1,661,625 Total liabilities 16,032,634 18,743,558 5,448,394 2,290,521 Total equity and liabilities 21,739,707 23,053,130 8,763,033 4,567,638 Net current assets/ (liabilities) Total assets less current liabilities 645,879 (1,972,952) (371,550) (204,705) 11,766,978 7,590,886 7,967,258 3,938,742 Approved and authorised for issue by the Board of Directors on 12 March Chen Jun Chairman of the Board of Directors and Chief Executive Officer Hou Guangjun Chief Operation Officer The notes on pages 97 to 221 form part of these financial statements

94 93 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the year ended 31 December 2013 Capital reserves (undistributable) Issued capital Shares premium Merger reserve Capital redemption reserve Shares held for Share Award Scheme Employee share-based compensation PRC statutory reserve Revaluation reserve Translation reserve Retained earnings Total Noncontrolling interests RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 (note 42) (note 43(b)) (note 43(d)) (note 43(c)) (note 42(f)) (note 41) (note 43(f)) (note 43(e)) (note 43(g)) 42 43(b) 43(d) 43(c) 42(f) 41 43(f) 43(e) 43(g) Total equity As at 1 January ,591 2,069, ,392 1,231 (31,718) 334,762 25,589 5,737 2,258,044 5,224,714 81,385 5,306,099 Loss for the year (938,248) (938,248) (50,112) (988,360) Other comprehensive income (43) (43) (43) Total comprehensive income (43) (938,248) (938,291) (50,112) (988,403) Transactions with owners, recorded directly in equity Equity-settled share-based transactions 5,472 5,472 5,472 Transfer to reserves 7,740 (7,740) Purchase of shares held for Share Award Scheme (note 42(f)) 42(f) (13,596) (13,596) (13,596) Total transactions with owners (13,596) 5,472 7,740 (7,740) (8,124) (8,124) As at 31 December ,591 2,069, ,392 1,231 (45,314) 5, ,502 25,589 5,694 1,312,056 4,278,299 31,273 4,309,572 The notes on pages 97 to 221 form part of these financial statements

95 94 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report 2013 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Continued) For the year ended 31 December 2013 Capital reserves (undistributable) Issued capital Shares premium Merger reserve Capital redemption reserve Shares held for Share Award Scheme Employee share-based compensation PRC statutory reserve Revaluation reserve Translation reserve Retained earnings Total Noncontrolling interests RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 (note 42) (note 43(b)) (note 43(d)) (note 43(c)) (note 42(f)) (note 41) (note 43(f)) (note 43(e)) (note 43(g)) 42 43(b) 43(d) 43(c) 42(f) 41 43(f) 43(e) 43(g) Total equity As at 1 January ,591 2,069, ,392 1,231 (45,314) 5, ,502 25,589 5,694 1,312,056 4,278,299 31,273 4,309,572 Profit for the year 34,513 34,513 (1,363) 33,150 Other comprehensive income (note 17) 17 5,993 5,993 10,359 16,352 Total comprehensive income 5,993 34,513 40,506 8,996 49,502 Transactions with owners, recorded directly in equity Bonus issue (note 42(c)) 42(c) 334,511 (334,511) Subscription of shares (note 42(e)) 42(e) 627,052 1,705,694 2,332,746 2,332,746 Acquisition of a subsidiary (note 9) 9 51,982 51,982 Disposal of a subsidiary (note 7) 7 (5,362) (5,362) Special dividend (note 18(ii)) 18(ii) (1,077,283) 32,768 (1,044,515) (1,044,515) Equity-settled share-based transactions (note 41) 41 19,525 19,525 19,525 Transfer to reserves 25,042 (25,042) Shares allotted for Share Award Scheme 2,906 (4,482) 1,576 Purchase of shares held for Share Award Scheme (note 42(f)) 42(f) (6,377) (6,377) (6,377) Total transactions with owners 961, ,900 (3,471) 15,043 25,042 9,302 1,301,379 46,620 1,347,999 As at 31 December ,068,154 2,362, ,392 1,231 (48,785) 20, ,544 25,589 11,687 1,355,871 5,620,184 86,889 5,707,073 The notes on pages 97 to 221 form part of these financial statements

96 95 CONSOLIDATED STATEMENT OF CASH FLOWS For the year ended 31 December Note RMB 000 RMB 000 Operating activities Profit/(loss) for the year 33,150 (988,360) Adjustments for: Depreciation 20 72,597 73,914 Amortisation of intangible assets Amortisation of land use rights 22 1,873 1,873 Change in fair value of investment properties 24 80,539 65,490 Write-down of properties under development and completed properties held for sale 10 42, ,765 Impairment of other investments 10 13,032 Net finance expenses , ,371 Share of net losses of associates and joint ventures 162, ,831 Loss on disposal of interests in an associate 17,031 Net gain on disposal of interests in subsidiaries 7 (214,354) (134,499) Net gain on acquisition of a subsidiary 9 (51,932) Net gain on disposal of property, plant and equipment (162) (4,899) Loss on redemption of Senior Notes ,577 Equity-settled share-based payment expenses 11 19,525 5,472 Income tax expense , ,604 Operating profit/(loss) before changes in working capital 1,117,673 (136,362) Decrease in restricted cash 83, ,270 (Increase)/decrease in trade, other receivables and advance deposits (2,075,909) 918,451 Decrease/(increase) in properties under development and completed properties held for sale 1,412,050 (446,916) Decrease in trade, other payables and advance receipts (1,928,182) (83,174) Income tax paid (692,934) (284,925) Net cash (outflow)/inflow from operating activities (2,084,298) 339,344 The notes on pages 97 to 221 form part of these financial statements

97 96 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report 2013 CONSOLIDATED STATEMENT OF CASH FLOWS (Continued) For the year ended 31 December 2013 Investing activities Note RMB 000 RMB 000 Proceeds from sale of property, plant and equipment ,221 Interest received 41,985 36,637 Proceeds from disposal of interests in an associate 95,000 Proceeds from disposal of interests in subsidiaries 1,734, ,800 Proceeds from disposal of other investments 99,000 Proceeds from disposal of equity securities held for trading 14,014 Proceeds from repayment of entrust loans by an associate and a third party 70,000 Acquisition of a subsidiary 9 (1,760,998) Acquisition of an associate (22,730) Acquisition of property, plant and equipment (25,914) (21,597) Payments for purchase of other investments (400) (100,400) Payments for purchase of equity securities held for trading (3,994) Entrust loans to an associate and a third party (70,000) Net cash inflow from investing activities Financing activities 149, ,667 Proceeds from interest-bearing loans 2,419,094 3,075,393 Proceeds from issuance of Bonds 39 4,249,546 Redemption of Senior Notes (1,393,315) Capital contribution from shareholders 42(e) 2,332,746 Payments for purchase of shares for the Share Award Scheme 42(f) (6,377) (13,596) Repayment of interest-bearing loans (4,811,944) (3,631,013) Interest paid (580,877) (779,006) Dividends paid (279,849) Net cash inflow/(outflow) from financing activities Net decrease in cash and cash equivalents 1,929,024 (1,348,222) (5,431) (713,211) Cash and cash equivalents at 1 January 931,670 1,645,026 Effect of foreign exchange rate changes (4,202) (145) Cash and cash equivalents at 31 December 922, ,670 Represented by: Cash at bank and cash in hand , ,836 Cash at bank and cash in hand included in assets classified as held for sale 114, , ,670 The notes on pages 97 to 221 form part of these financial statements

98 97 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 1. GENERAL INFORMATION AND GROUP REORGANISATION The Company was incorporated in the Cayman Islands on 13 April 2006 as an exempted company with limited liability under the Companies Law, Cap 22 (Law 3 of 1961, as consolidated and revised) of the Cayman Islands. The address of the Company s registered office is Century Yard, Cricket Square, Hutchins Drive, P.O. Box 2681 GT, George Town, Grand Cayman, British West Indies. The companies comprising the Group underwent a reorganisation (the Reorganisation ) to rationalise the Group s structure in preparation for the listing of the Company s shares on the Main Board of The Stock Exchange of Hong Kong Limited (the Hong Kong Stock Exchange ). On 30 June 2006, the Company became the holding company of the subsidiaries now comprising the Group. Details of the Reorganisation were set out in the Prospectus of the Company dated 26 September Century Yard, Cricket Square, Hutchins Drive, P.O. Box 2681 GT, George Town, Grand Cayman, British West Indies The Company s shares were listed on the Hong Kong Stock Exchange on 10 October On 27 August 2013, the subscription of shares of the Company (the Subscribed Shares ) by Gluon Xima International Limited ( GXIL ) was successfully completed. GXIL is an indirectly whollyowned subsidiary of Greenland Holding Group Company Limited ( Greenland Holding ). Greenland Holding is a state-controlled enterprise group headquartered in Shanghai, with its main business in real estate, energy and finance. The Subscribed Shares represent approximately 60% of the entire issued share capital of the Company and approximately 60% of the voting rights of the Company as enlarged by the Subscribed Shares. Immediately after the subscription, Greenland Holding became the ultimate controlling shareholder of the Company. 2. BASIS OF PREPARATION The consolidated results of the Group for the year ended 31 December 2013 include the results of the Company and its subsidiaries from 1 January 2013, or their respective dates of incorporation. The consolidated balance sheet at 31 December 2013 is a consolidation of the balance sheets of the Company and its subsidiaries at the respective balance sheet dates. All material intra-group transactions and balances have been eliminated on consolidation. In the opinion of the directors, the consolidated financial statements prepared on this basis present fairly the results of operations and the state of affairs of the Group as a whole. 60% 60% 2.

99 98 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report BASIS OF PREPARATION (Continued) (a) Statement of compliance The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ( IFRSs ) issued by the International Accounting Standards Board ( IASB ). These financial statements also comply with the disclosure requirements of the Hong Kong Companies Ordinance and the applicable disclosure provisions of the Rules Governing the Listing of Securities on Hong Kong Stock Exchange. 2. (a) The IASB has issued certain new and revised IFRSs that are first effective or available for early adoption for the current accounting period of the Group and the Company. Note 4 provides information on any changes in accounting policies resulting from initial application of these developments to the extent that they are relevant to the Group for the current and prior accounting periods reflected in the consolidated financial statements. 4 (b) Basis of measurement The consolidated financial statements have been prepared on the historical cost basis except that the following assets and liabilities are stated at their fair value as explained in the accounting policies set out below: (b) investment properties (see note 3(f)); 3(f) other investment in debt and equity securities (see note 3(c)(i)); and 3(c)(i) derivative financial instruments (see note 3(c)(iii)). 3(c)(iii) Non-current assets and disposal group held for sale are stated at the lower of carrying amount and fair value less costs to sell (see note 3(y)). 3(y) The financial statements have been prepared on the basis that the Group will continue to operate throughout the next twelve months as a going concern.

100 99 2. BASIS OF PREPARATION (Continued) (c) Functional and presentation currency These consolidated financial statements are presented in Renminbi ( RMB ), which is the Company s functional currency. All financial information presented in RMB has been rounded to the nearest thousand. 2. (c) (d) Use of estimates and judgements The preparation of the consolidated financial statements in conformity with IFRSs requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. (d) The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods. Judgements made by management in the application of IFRSs that have a significant effect on the financial statements and major sources of estimation uncertainty are discussed in note 5. 5

101 100 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report SIGNIFICANT ACCOUNTING POLICIES The accounting policies set out below have been applied consistently to all years presented in these consolidated financial statements, and have been applied consistently by Group entities, except as explained in note 4, which addresses changes in accounting policies (a) Basis of consolidation (i) Subsidiaries and non-controlling interests Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. When assessing whether the Group has power, only substantive rights (held by the Group and other parties) are considered. (a) (i) An investment in a subsidiary is consolidated into the consolidated financial statements from the date that control commences until the date that control ceases. Intra-group balances, transactions and cash flows and any unrealised profits arising from intra-group transactions are eliminated in full in preparing the consolidated financial statements. Unrealised losses resulting from intra-group transactions are eliminated in the same way as unrealised gains but only to the extent that there is no evidence of impairment. Non-controlling interests represent the equity in a subsidiary not attributable directly or indirectly to the Company, and in respect of which the Group has not agreed any additional terms with the holders of those interests which would result in the Group as a whole having a contractual obligation in respect of those interests that meets the definition of a financial liability. For each business combination, the Group can elect to measure any non-controlling interests either at fair value or at the non-controlling interests proportionate share of the subsidiary s net identifiable assets.

102 SIGNIFICANT ACCOUNTING POLICIES (Continued) (a) Basis of consolidation (Continued) (i) Subsidiaries and non-controlling interests (Continued) Non-controlling interests are presented in the consolidated balance sheet within equity, separately from equity attributable to the equity shareholders of the Company. Non-controlling interests in the results of the Group are presented on the face of the consolidated statement of comprehensive income as an allocation of the total comprehensive income for the year between non-controlling interests and the equity shareholders of the Company. Loans from holders of non-controlling interests and other contractual obligations towards these holders are presented as financial liabilities in the consolidated balance sheet in accordance with notes 3(m) or 3(n) depending on the nature of the liability. 3. (a) (i) 3(m) 3(n) Changes in the Group s interests in a subsidiary that do not result in a loss of control are accounted for as equity transactions, whereby adjustments are made to the amounts of controlling and non-controlling interests within consolidated equity to reflect the change in relative interests, but no adjustments are made to goodwill and no gain or loss is recognised. When the Group loses control of a subsidiary, it is accounted for as a disposal of the entire interest in that subsidiary, with a resulting gain or loss being recognised in profit or loss. Any interest retained in that former subsidiary at the date when control is lost is recognised at fair value and this amount is regarded as the fair value on initial recognition of a financial asset (see note 3(c)(i)) or, when appropriate, the cost on initial recognition of an investment in an associate or joint venture (see note 3(a)(iii)). 3(c)(i) 3(a)(iii) In the Company s balance sheet, an investment in a subsidiary is stated at cost less impairment losses (see note 3(l)), unless the investment is classified as held for sale (or included in a disposal group that is classified as held for sale)(see note 3(y)). 3(l) 3(y)

103 102 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report SIGNIFICANT ACCOUNTING POLICIES (Continued) (a) Basis of consolidation (Continued) (ii) Business combination for entities under common control Business combinations arising from transfers of interests in entities that are under the control of the shareholder that controls the Group are accounted for as if the acquisition had occurred at the beginning of the earliest comparative period presented or, if later, at the date that common control was established. The assets and liabilities acquired are recognised at the carrying amounts recognised previously in the Group s controlling shareholder s consolidated financial statements. The components of equity of the acquired entities are added to the same components within Group equity except that any share capital of the acquired entities is recognised as part of merger reserves. Any cash paid for the acquisition is recognised directly in equity. 3. (a) (ii) (iii) Associates and joint ventures An associate is an entity in which the Group or Company has significant influence, but not control or joint control, over its management, including participation in the financial and operating policy decisions. (iii) A joint venture is an arrangement whereby the Group or Company and other parties contractually agree to share control of the arrangement, and have rights to the net assets of the arrangement.

104 SIGNIFICANT ACCOUNTING POLICIES (Continued) (a) Basis of consolidation (Continued) (iii) Associates and joint ventures (Continued) An investment in an associate or a joint venture accounted for in the consolidated financial statements under the equity method, unless they are classified as held for sale (or included in a disposal group that is classified as held for sale) (see note 3(y)). Under the equity method, the investment is initially recorded at cost, adjusted for any excess of the Group s share of the acquisition-date fair values of the investee s identifiable net assets over the cost of the investment (if any). Thereafter, the investment is adjusted for the post acquisition change in the Group s share of the investee s net assets and any impairment loss relating to the investment (see notes 3(a)(iv) and 3(l)). Any acquisitiondate fair value excess over cost, the Group s share of the post-acquisition, post-tax results of the investees and any impairment losses for the year are recognised in the profit or loss of the consolidated statement of comprehensive income, whereas the Group s share of the post-acquisition post-tax items of the investees other comprehensive income is recognised in the consolidated other comprehensive income of the consolidated statement of comprehensive income. 3. (a) (iii) 3(y) 3(a)(iv) 3(l) When the Group s share of losses exceeds its interest in an associate or a joint venture, the carrying amount of the interest is reduced to nil and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the investee. For this purpose, the Group s interest is the carrying amount of the investment under the equity method together with the Group s long-term interests that in substance form part of the Group s net investment in the associate or the joint venture. Unrealised profits and losses resulting from transactions between the Group and its associates and joint ventures are eliminated to the extent of the Group s interest in the investee, except where unrealised losses provide evidence of an impairment of the asset transferred, in which case they are recognised immediately in profit or loss.

105 104 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report SIGNIFICANT ACCOUNTING POLICIES (Continued) (a) Basis of consolidation (Continued) (iii) Associates and joint ventures (Continued) If an investment in an associate becomes an investment in a joint venture or vice versa, retained interest is not re-measured. Instead, the investment continues to be accounted for under the equity method. 3. (a) (iii) In all other cases, when the Group ceases to have significant influence over an associate or joint control over a joint venture, it is accounted for as a disposal of the entire interest in that investee, with a resulting gain or loss being recognised in profit or loss. Any interest retained in that former investee at the date when significant influence or joint control is lost is recognised at fair value and this amount is regarded as the fair value on initial recognition of a financial asset (see note 3(c)(i)). 3(c)(i) In the Company s balance sheet, investments in associates and jointly ventures are stated at cost less impairment losses (see note 3(l)), unless classified as held for sale (or included in a disposal group that is classified as held for sale) (see note 3(y)). 3(l) 3(y) (iv) Goodwill Goodwill represents the excess of (iv) i) the aggregate of the fair value of the consideration transferred, the amount of any noncontrolling interest in the acquiree and the fair value of the Group s previously held equity interest in the acquiree; over i) ii) the net fair value of the acquiree s identifiable assets and liabilities measured as at the acquisition date. ii) When ii) is greater than i), then this excess is recognised immediately in profit or loss as a gain on a bargain purchase. ii)i)

106 SIGNIFICANT ACCOUNTING POLICIES (Continued) (a) Basis of consolidation (Continued) (iv) Goodwill (Continued) Goodwill is stated at cost less accumulated impairment losses. Goodwill arising on a business combination is allocated to each cash-generating unit, or groups of cash generating units, that is expected to benefit from the synergies of the combination and is tested annually for impairment (see note 3(l)). 3. (a) (iv) 3(l) On disposal of a cash generating unit during the year, any attributable amount of purchased goodwill is included in the calculation of the profit or loss on disposal. (b) Foreign currency (i) Foreign currency transactions Transactions in foreign currencies are translated to the respective functional currencies of Group entities at the exchange rates ruling at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated to the functional currency at the exchange rate ruling at that date. Exchange gains and losses are recognised in (b) (i) profit or loss. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the foreign exchange rates ruling at the transaction dates. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated using the foreign exchange rates ruling at the dates the fair value was measured.

107 106 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report SIGNIFICANT ACCOUNTING POLICIES (Continued) (b) Foreign currency (Continued) (ii) Foreign operations The assets and liabilities of foreign operations outside the People s Republic of China ( PRC ), including goodwill and fair value adjustments arising on acquisition, are translated to RMB at the foreign exchange rates ruling at the balance sheet date. The results of foreign operations are translated into RMB at the exchange rates approximating the foreign exchange rates ruling at the dates of the transactions. The resulting exchange differences are recognised in other comprehensive income and accumulated separately in equity in the foreign currency translation reserve ( FCTR ). When a foreign operation is disposed of, in part or in full, the cumulative amount of the exchange differences relating to that foreign operation is reclassified from equity to profit or loss as part of the gain or loss on disposal. 3. (b) (ii) When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable future, foreign exchange gains and losses arising from such a monetary item are considered to form part of the net investment in a foreign operation. These are recognised in other comprehensive income, and are presented in the FCTR in equity and recognised in profit or loss on disposal of the net investment. (c) Financial instruments (i) Other investments in debt and equity securities The Group s policies for investments in debt and equity securities, other than investments in subsidiaries, associates and joint ventures, are as follows: (c) (i)

108 SIGNIFICANT ACCOUNTING POLICIES (Continued) (c) Financial instruments (Continued) (i) Other investments in debt and equity securities (Continued) Investments in debt and equity securities are initially stated at fair value, which is their transaction price unless it is determined that the fair value at initial recognition differs from the transaction price and that fair value is evidenced by a quoted price in an active market for an identical asset or liability or based on a valuation technique that uses only data from observable markets. Cost includes attributable transaction costs, except where indicated otherwise below. These investments are subsequently accounted for as follows, depending on their classification: 3. (c) (i) Investments in securities held for trading are classified as current assets. Any attributable transaction costs are recognised in profit or loss as incurred. At each balance sheet date the fair value is re-measured, with any resultant gain or loss being recognised in profit or loss. The net gain or loss recognised in profit or loss does not include any dividends or interest earned on these investments as these are recognised in accordance with the policies set out in note 3(u). 3(u) Investments in securities which do not fall into any of the above categories are classified as available-forsale securities. At the end of each reporting period the fair value is re-measured, with any resultant gain or loss being recognised in other comprehensive income and accumulated separately in equity in the fair value reserve. As an exception to this, investments in equity securities that do not have a quoted price in an active market for an identical instrument and whose fair value cannot otherwise be reliably measured are recognised in the balance sheet at cost less impairment losses (see note 3(l)). Interest income from debt securities calculated using the effective interest method are recognised in profit or loss in accordance with the policies set out in notes 3(u). Foreign exchange gains and losses resulting from changes in the amortised cost of debt securities are also recognised in profit or loss. 3(l) 3(u) When the investments are derecognised or impaired (see note 3(l)), the cumulative gain or loss recognised in equity is reclassified to profit or loss. Investments are recognised/derecognised on the date the Group commits to purchase/sell the investments or they expire. 3(l)

109 108 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report SIGNIFICANT ACCOUNTING POLICIES (Continued) (c) Financial instruments (Continued) (ii) Senior notes/bonds Senior notes or bonds issued by the Company that contain both liability and early redemption option (which is not closely related to the host contract) are classified separately into respective items on initial recognition. At the date of issue, both the liability and early redemption option components are recognised at fair value. Transaction costs that relate to the issue of the senior notes/bonds are recognised initially as part of the liability. 3. (c) (ii) Subsequent to initial recognition, the early redemption component which is presented as derivative financial instruments is re-measured in accordance with the accounting policy set out in note 3(c)(iii). The liability component is subsequently carried at amortised cost. The interest expense on the liability component is calculated using the effective interest method. Any gain or loss from the early redemption is recognised in profit or loss. 3(c)(iii) (iii) Derivative financial instruments Derivative financial instruments are recognised initially at fair value. At each balance sheet date the fair value is re-measured. The gain or loss on re-measurement to fair value is recognised immediately in profit or loss. (iii) (iv) Share capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. (iv) Where any subsidiary of the Company purchases the Company s equity share capital, the amount of the consideration paid, which includes directly attributable costs, is net of any tax effects, and is recognised as a deduction from equity.

110 SIGNIFICANT ACCOUNTING POLICIES (Continued) (c) Financial instruments (Continued) (v) Preference share capital Preference share capital is classified as equity if it is non-redeemable, or redeemable only at the Company s option, and any dividends are discretionary. Dividends on preference share capital classified as equity are recognised as distributions within equity. 3. (c) (v) Preference share capital is classified as a liability if it is redeemable on a specific date or at the option of the shareholders, or if dividend payments are not discretionary. The liability is recognised in accordance with the Group s policy for interest-bearing borrowings set out in note 3(n) and accordingly dividends thereon are recognised on an accrual basis in profit or loss as part of finance costs. 3(n) (vi) Recognition/de-recognition of financial assets and liabilities Financial assets and financial liabilities are recognised in the consolidated balance sheet when the Group becomes a party to the contractual provisions of the instrument. Financial assets are de-recognised when the Group no longer has the rights to cash flows, the risks and rewards of ownership or control of the asset. Financial liabilities are de-recognised when the obligation under the liability is discharged, cancelled or expires. (vi) (d) Property, plant and equipment (i) Recognition and measurement Items of property, plant and equipment are measured at cost less accumulated depreciation (see (iv) below) and impairment losses (see note 3(l)). (d) (i) (iv) 3(l) Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labour, and other costs directly attributable to bringing the asset to a working condition for its intended use. Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and equipment.

111 110 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report SIGNIFICANT ACCOUNTING POLICIES (Continued) (d) Property, plant and equipment (Continued) (i) Recognition and measurement (Continued) Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment and are recognised net within other income in profit or loss. 3. (d) (i) (ii) Reclassification to investment properties When the use of a property changes from owneroccupied to investment property, the property is remeasured to fair value and reclassified as investment property. Any gain arising on re-measurement is recognised directly in equity. Any loss is recognised immediately in profit or loss. (ii) (iii) Subsequent costs The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Group and its cost can be measured reliably. The costs of the dayto-day servicing of property, plant and equipment are recognised in profit or loss as incurred. (iii) (iv) Depreciation Depreciation is recognised in profit or loss on a straightline basis over the estimated useful lives of each part of an item of property, plant and equipment. Leased assets are depreciated over the shorter of the lease term and their useful lives. (iv) The estimated useful lives for the current and comparative periods are as follows: Buildings situated on leasehold land Motor vehicles Fixtures, fittings and equipment Leasehold improvements years 5 years 2 10 years Shorter of leasehold period and 5 years Depreciation methods, useful lives and residual values are reviewed at each reporting date.

112 SIGNIFICANT ACCOUNTING POLICIES (Continued) (e) Land use rights Land use rights represent lease prepayments for acquiring rights to use land in the PRC with periods ranging from 40 to 70 years. Land use rights granted with consideration are recognised initially at acquisition cost. Land use rights are classified and accounted for in accordance with the intended use of the properties erected on the related land. 3. (e) For properties that are held for own use, the corresponding lease prepayments are separately stated as land use rights in the balance sheet and stated at cost, less accumulated amortisation and any impairment losses (see note 3(l)). Amortisation is charged to profit or loss on a straight-line basis over the period of the land use rights. 3(l) For investment properties, the corresponding land use rights are classified and accounted for as part of the investment properties, which are carried at fair value as described in note 3(f). 3(f) For properties that are developed for sale, the corresponding land use rights are classified and accounted for as part of the properties. (f) Investment properties Investment properties are properties held either to earn rental income or for capital appreciation or for both, but not for sales in the ordinary course of business, use in the production or supply of goods or services or for administrative purposes. These include land use rights held for a currently undetermined future use and property that is being constructed or developed for future use as investment properties. (f) Investment properties are stated in the balance sheet at fair value, unless they are still in the course of construction or development at the balance sheet date and their fair value cannot be reliably measured at that time. Any gain or loss arising from a change in fair value or from the retirement or disposal of an investment property is recognised in profit or loss. Rental income from investment properties is accounted for as described in note 3(r). 3(r)

113 112 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report SIGNIFICANT ACCOUNTING POLICIES (Continued) (f) Investment properties (Continued) When the use of an investment property changes such that it is reclassified as property, plant and equipment and completed properties held for sale, its fair value at the date of reclassification becomes its cost for subsequent accounting. When the Group begins to redevelop an existing investment property for continued future use as investment property, the property remains an investment property measured based on the fair value model, and is not reclassified as property, plant and equipment during the redevelopment. 3. (f) (g) Properties under development Properties under development are carried at the lower of cost and net realisable value. Properties under development comprise property developed for own use or for sale. (g) The cost of properties under development comprises specifically identified cost, including the acquisition cost of land use rights for properties under development, aggregate cost of development, materials and supplies, wages and other direct expenses, an appropriate proportion of overheads and borrowing costs capitalised (see note 3(s)). Net realisable value represents the estimated selling price less estimated costs of completion and costs to be incurred in selling the property. 3(s) Properties under development which are intended to be held for sale and expected to be completed within 12 months from the balance sheet date are shown as current assets. Properties under development which are intended to be held for own use, or for sale and expected to be completed beyond 12 months from the balance sheet date are shown as noncurrent assets.

114 SIGNIFICANT ACCOUNTING POLICIES (Continued) (h) Completed properties held for sale Completed properties remaining unsold at the end of each period are stated at the lower of cost and net realisable value. 3. (h) In the case of completed properties developed by the Group, cost is determined by apportionment of the total development costs for that development project, attributable to the unsold properties. Net realisable value represents the estimated selling price less costs to be incurred in selling the property. The cost of completed properties held for sale comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. (i) Intangible assets (other than goodwill) Intangible assets that are acquired by the Group are stated in the balance sheet at cost less accumulated amortisation (where the estimated useful life is finite) and impairment losses (see note 3(l)). (i) 3(l) Amortisation of intangible assets with finite useful lives is charged to profit or loss on a straight-line basis over the estimated useful lives. The following intangible assets with finite useful lives are amortised from the date they are available for use and their estimated useful lives are as follows: Contractor qualification 37 years 37 Both the period and method of amortisation are reviewed annually. (j) Trade and other receivables Trade and other receivables are initially recognised at fair value and thereafter stated at amortised cost by using the effective interest method, less allowance for impairment of bad and doubtful debts (see note 3(l)), except where the receivables are interest-free loans made to related parties without any fixed payment terms and repayable on demand or the effect of discounting would be immaterial. In such cases, the receivables are stated at cost less allowance for impairment of bad and doubtful debts (see note 3(l)). (j) 3(l) 3(l)

115 114 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report SIGNIFICANT ACCOUNTING POLICIES (Continued) (k) Inventories Inventories are carried at the lower of cost and net realisable value. The cost of inventories is calculated using the weighted average cost formula, and includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their existing location and condition. 3. (k) Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses. When inventories are sold, the carrying amount of those inventories is recognised as an expense in the period in which the related revenue is recognised. The amount of any writedown of inventories to net realisable value and all losses of inventories are recognised as an expense in the period the write-down or loss occurs. The amount of any reversal of any write-down of inventories is recognised as a reduction in the amount of inventories recognised as an expense in the period in which the reversal occurs. (l) Impairment (i) Financial assets Investments in debt and equity securities (other than investment in subsidiaries) and other current and noncurrent receivables that are stated at cost or amortised cost or are classified as available-for-sale securities are reviewed at each balance sheet date to determine whether there is objective evidence of impairment. Objective evidence of impairment includes observable data that comes to the attention of the Group about one or more of the following loss events: (l) (i) significant financial difficulty of the debtor; a breach of contract, such as a default or delinquency in interest or principal payments; it becoming probable that the debtor will enter bankruptcy or other financial reorganisation; significant changes in the technological, market, economic or legal environment that have an adverse effect on the debtor; and

116 SIGNIFICANT ACCOUNTING POLICIES (Continued) (l) Impairment (Continued) (i) Financial assets (Continued) a significant or prolonged decline in the fair value of an investment in an equity instrument below its cost. 3. (l) (i) If any such evidence exists, an impairment loss is determined and recognised as follows: For investments in associates and joint ventures accounted for under the equity method in the consolidated financial statements (see note 3(a)(iii)), the impairment loss is measured by comparing the recoverable amount of the investment as a whole with its carrying amount in accordance with note 3(l)(ii). The impairment loss is reversed if there has been a favourable change in the estimates used to determine the recoverable amount in accordance with note 3(l)(ii). 3(a) (iii) 3(l)(ii) 3(l)(ii) For unquoted debt or equity instruments carried at cost, the impairment loss is measured as the difference between the carrying amount of the financial asset and the estimated future cash flows, discounted at the current market rate of return for a similar financial asset where the effect of discounting is material. Impairment losses for unquoted equity instruments carried at cost are not reversed.

117 116 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report SIGNIFICANT ACCOUNTING POLICIES (Continued) (l) Impairment (Continued) (i) Financial assets (Continued) For trade and other current receivables and other financial assets carried at amortised cost, the impairment loss is measured as the difference between the asset s carrying amount and the present value of estimated future cash flows, discounted at the financial asset s original effective interest rate (i.e. the effective interest rate computed at initial recognition of the asset), where the effect of discounting is material. This assessment is made collectively where financial assets carried at amortised cost share similar risk characteristics, such as similar past due status and have not been individually assessed as impaired. Future cash flows for financial assets which are assessed for impairment collectively are based on historical loss experience for assets with credit risk characteristics similar to the collective group. 3. (l) (i) If in a subsequent period the amount of an impairment loss decreases and the decrease can be linked objectively to an event occurring after the impairment loss was recognised, the impairment loss is reversed through profit or loss. A reversal of an impairment loss shall not result in the asset s carrying amount exceeding that which would have been determined had no impairment loss been recognised in prior years. For available-for-sale securities, the cumulative loss that has been recognised in the fair value reserve is reclassified to profit or loss. The amount of the cumulative loss that is recognised in profit or loss is the difference between the acquisition cost (net of any principal repayment and amortisation) and current fair value, less any impairment loss on that asset previously recognised in profit or loss. Impairment losses recognised in profit or loss in respect of available-for-sale equity securities are not reversed through profit or loss. Any subsequent increase in the fair value of such assets is recognised in other comprehensive income.

118 SIGNIFICANT ACCOUNTING POLICIES (Continued) (l) Impairment (Continued) (i) Financial assets (Continued) Impairment losses in respect of available-for-sale debt securities are reversed if the subsequent increase in fair value can be objectively related to an event occurring after the impairment loss was recognised. Reversals of impairment losses in such circumstances are recognised in profit or loss. 3. (l) (i) Impairment losses are written off against the corresponding assets directly, except for impairment losses recognised in respect of trade debtors and bills receivable included within trade and other receivables, whose recovery is considered doubtful but not remote. In this case, the impairment losses for doubtful debts are recorded using an allowance account. When the Group is satisfied that recovery is remote, the amount considered irrecoverable is written off against trade debtors and bills receivable directly and any amounts held in the allowance account relating to that debt are reversed. Subsequent recoveries of amounts previously charged to the allowance account are reversed against the allowance account. Other changes in the allowance account and subsequent recoveries of amounts previously written off directly are recognised in profit or loss. (ii) Non-financial assets The carrying amounts of the Group s non-financial assets, other than investment properties, properties under development, completed property held for sale, inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset s recoverable amount is estimated. For goodwill, its recoverable amount is estimated annually whether or not there is any indication of impairment. (ii)

119 118 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report SIGNIFICANT ACCOUNTING POLICIES (Continued) (l) Impairment (Continued) (ii) Non-financial assets (Continued) The recoverable amount of an asset is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Where an asset does not generate cash inflows largely independent of those from other assets, the recoverable amount is determined for the smallest group of assets that generates cash inflows independently (the cashgenerating unit ). 3. (l) (ii) An impairment loss is recognised in profit or loss if the carrying amount of an asset, or the cash-generating unit to which it belongs, exceeds its recoverable amount. Impairment losses recognised in respect of cashgenerating units are allocated first to reduce the carrying amount of any goodwill allocated to the cash-generating unit (or group of units) and then, to reduce the carrying amount of the other assets in the unit (or group of units) on a pro rata basis, except that the carrying value of an asset will not be reduced below its individual fair value less costs to sell, or value in use, if determinable. In respect of assets other than goodwill, an impairment loss is reversed if there has been a favourable change in the estimates used to determine the recoverable amount. An impairment loss in respect of goodwill is not reversed. A reversal of an impairment loss is limited to the asset s carrying amount that would have been determined had no impairment loss been recognised in prior years. Reversals of impairment losses are credited to profit or loss in the year in which the reversals are recognised. (m) Trade and other payables Trade and other payables are initially recognised at fair value and thereafter stated at amortised cost unless the effect of discounting would be immaterial, in which case they are stated at cost. (m)

120 SIGNIFICANT ACCOUNTING POLICIES (Continued) (n) Interest-bearing borrowings Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initial recognition, interest-bearing borrowings are stated at amortised cost with any difference between the amount initially recognised and redemption value being recognised in profit or loss over the period of the borrowings, together with any interest and fees payable, using the effective interest method. 3. (n) (o) Cash and cash equivalents Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on demand and form an integral part of the Group s cash management are included as a component of cash and cash equivalents for the purpose of the consolidated statements of cash flows. (o) (p) Employee benefits (i) Short term employee benefits and contributions to defined contribution retirement plans Salaries, annual bonuses, paid annual leave, contributions to defined contribution retirement plans and the cost of non-monetary benefits are accrued in the year in which the associated services are rendered by employees. Where payment or settlement is deferred and the effect would be material, these amounts are stated at their present values. (p) (i) A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognised as an employee benefit expense in profit or loss, except to the extent that they are included in the cost of properties under development or completed properties held for sale not yet recognised as cost of sales.

121 120 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report SIGNIFICANT ACCOUNTING POLICIES (Continued) (p) Employee benefits (Continued) (ii) Share award scheme The Company operates a share award scheme (the Share Award Scheme ) where directors and employees of the Group are granted ordinary shares of the Company. Ordinary shares purchased under the Share Award Scheme are held by a trust (the Trust ). 3. (p) (ii) Where the Trust purchases the Company s shares from the market, the consideration paid, including any directly attributable incremental costs, is presented as Shares held for Share Award Scheme and deducted from total equity. For shares granted under the Share Award Scheme, the estimated fair value of the awarded shares are recognised as employee share-based compensation expense and credited to an Employee share-based compensation reserve under equity over the vesting periods. The fair value of the awarded shares is measured by reference to the quoted market price of the shares at grant date. Upon vesting, the related costs of the vested awarded shares recognised are credited to Shares held for Share Award Scheme, with a corresponding decrease in employee share-based compensation reserve for shares purchased with contributions paid to the Trust, with the difference released directly to the retained earnings.

122 SIGNIFICANT ACCOUNTING POLICIES (Continued) (q) Financial guarantees issued, provisions and contingent liabilities (i) Financial guarantees issued Financial guarantees are contracts that require the issuer (i.e. the guarantor) to make specified payments to reimburse the beneficiary of the guarantee (the holder ) for a loss the holder incurs because a specified debtor fails to make payment when due in accordance with the terms of a debt instrument. 3. (q) (i) Where the Group issues a financial guarantee, the fair value of the guarantee is initially recognised as deferred income within trade and other payables. The fair value of financial guarantees issued at the time of issuance is determined by reference to fees charged in an arm s length transaction for similar services, when such information is obtainable, or is otherwise estimated by reference to interest rate differentials, by comparing the actual rates charged by lenders when the guarantee is made available with the estimated rates that lenders would have charged, had the guarantees not been available, where reliable estimates of such information can be made. Where consideration is received or receivable for the issuance of the guarantee, the consideration is recognised in accordance with the Group s policies applicable to that category of asset. Where no such consideration is received or receivable, an immediate expense is recognised in profit or loss on initial recognition of any deferred income. The amount of the guarantee initially recognised as deferred income is amortised in profit or loss over the term of the guarantee as income from financial guarantees issued. In addition, provisions are recognised in accordance with note 3(q)(ii) if and when (i) it becomes probable that the holder of the guarantee will call upon the Group under the guarantee, and (ii) the amount of that claim on the Group is expected to exceed the amount currently carried in trade and other payables in respect of that guarantee, i.e. the amount initially recognised, less accumulated amortisation. (i) (ii) 3(q)(ii)

123 122 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report SIGNIFICANT ACCOUNTING POLICIES (Continued) (q) Financial guarantees issued, provisions and contingent liabilities (Continued) (ii) Other provisions and contingent liabilities A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. 3. (q) (ii) Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or more future events, are also disclosed as contingent liabilities unless the probability of an outflow of economic benefits is remote. (r) Revenue Revenue is measured at the fair value of the consideration received or receivable. Provided it is probable that the economic benefits will flow to the Group and the revenue and costs, if applicable, can be measured reliably, revenue is recognised in profit or loss as follows: (r) (i) Sales of properties Revenue from sales of properties is recognised when a Group entity has delivered the relevant properties to the customers and collectability of the related receivables is reasonably assured. Deposits and instalments received on properties sold prior to the date of revenue recognition are recorded as advances from customers and presented as trade, other payables and advance deposits under current liabilities. (i)

124 SIGNIFICANT ACCOUNTING POLICIES (Continued) (r) Revenue (Continued) (ii) Rental income from lease of properties Rental income is recognised on a straight-line basis over the term of the lease. Lease incentives granted are recognised in profit or loss as an integral part of the aggregate net lease payment receivable. Contingent rents are recorded as income in the periods in which they are earned. 3. (r) (ii) (iii) Sales of goods and services rendered Revenue from the sale of goods is recognised when the significant risks and rewards of ownership have been transferred to the buyer. No revenue is recognised if there are significant uncertainties regarding recovery of the consideration due, associated costs or the possible return of goods, or where there is continuing management involvement with the goods. (iii) Revenue in relation to property management and hotel operation is recognised when the services are rendered. Revenue from landscape projects is recognised in proportion to the stage of completion of the projects at the balance sheet date. The stage of completion is assessed by reference to work performed. An expected loss on a contract is recognised immediately in profit or loss. (iv) Tuition fee Revenue from provision of education services is recognised on a time-proportion basis using the straightline method. Tuition fee received prior to the date of revenue recognition is included in non-trade payables and presented under current liabilities. (iv) (v) Government grants Government grants are recognised in the consolidated balance sheet initially when there is reasonable assurance that they will be received and that the Group will comply with the conditions attaching to them. Grants that compensate the Group for expenses incurred are recognised as income revenue in profit or loss on a systematic basis in the same periods in which the expenses are incurred. (v)

125 124 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report SIGNIFICANT ACCOUNTING POLICIES (Continued) (s) Borrowing costs Borrowing costs that are directly attributable to the acquisition, construction or production of an asset which necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of that asset. Other borrowing costs are expensed in the period in which they are incurred. 3. (s) The capitalisation of borrowing costs as part of the cost of a qualifying asset commences when expenditure for the asset is being incurred, borrowing costs are being incurred and activities that are necessary to prepare the asset for its intended use or sale are in progress. Capitalisation of borrowing costs is suspended or ceases when substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are interrupted or complete. (t) Expenses (i) Service costs and property operating expenses Service costs for service contracts entered into and property operating expenses are expensed as incurred. (t) (i) (ii) Operating lease payments Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives received are recognised in profit or loss as an integral part of the total lease expense. (ii) (u) Net finance expenses Net finance expenses comprise interest expenses on borrowings (see note 3(s)), net of interest capitalised, interest income on cash deposits in bank, dividend income, changes in fair value of other investments in equity securities held for trading, and foreign currency gains and losses. (u) 3(s) Interest income is recognised as it accrues, using the effective interest method. Dividend income from unlisted investments is recognised when the shareholder s right to receive payment is established; dividend income from listed investments is recognised when the share price of the investment goes ex-dividend. Foreign currency gains and losses are reported on a net basis.

126 SIGNIFICANT ACCOUNTING POLICIES (Continued) (v) Income tax expense Income tax for the year comprises current tax and movements in deferred tax assets and liabilities. Current tax and movements in deferred tax assets and liabilities are recognised in profit or loss except to the extent that they relate to items recognised in other comprehensive income or directly in equity, in which case the relevant amounts of tax are recognised in other comprehensive income or directly in equity, respectively. 3. (v) Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the end of the reporting period, and any adjustment to tax payable in respect of previous years. Deferred tax assets and liabilities arise from deductible and taxable temporary differences respectively, being the differences between the carrying amounts of assets and liabilities for financial reporting purposes and their tax bases. Deferred tax assets also arise from unused tax losses and unused tax credits. Apart from certain limited exceptions, all deferred tax liabilities, and all deferred tax assets to the extent that it is probable that future taxable profits will be available against which the asset can be utilised, are recognised. Future taxable profits that may support the recognition of deferred tax assets arising from deductible temporary differences include those that will arise from the reversal of existing taxable temporary differences, provided those differences relate to the same taxation authority and the same taxable entity, and are expected to reverse either in the same period as the expected reversal of the deductible temporary difference or in periods into which a tax loss arising from the deferred tax asset can be carried back or forward. The same criteria are adopted when determining whether existing taxable temporary differences support the recognition of deferred tax assets arising from unused tax losses and credits, that is, those differences are taken into account if they relate to the same taxation authority and the same taxable entity, and are expected to reverse in a period, or periods, in which the tax loss or credit can be utilised.

127 126 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report SIGNIFICANT ACCOUNTING POLICIES (Continued) (v) Income tax expense (Continued) The limited exceptions to recognition of deferred tax assets and liabilities are those temporary differences arising from goodwill not deductible for tax purposes, the initial recognition of assets or liabilities that affect neither accounting nor taxable profit (provided they are not part of a business combination), and temporary differences relating to investments in subsidiaries to the extent that, in the case of taxable differences, the Group controls the timing of the reversal and it is probable that the differences will not reverse in the foreseeable future, or in the case of deductible differences, unless it is probable that they will reverse in the future. 3. (v) Where investment properties are carried at their fair value in accordance with the accounting policy set out in note 3(f), the amount of deferred tax recognised is measured using the tax rates that would apply on sale of those assets at their carrying value at the reporting date unless the property is depreciable and is held within a business model whose objective is to consume substantially all of the economic benefits embodied in the property over time, rather than through sale. In all other cases, the amount of deferred tax recognised is measured based on the expected manner of realisation or settlement of the carrying amount of the assets and liabilities, using tax rates enacted or substantively enacted at the end of the reporting period. Deferred tax assets and liabilities are not discounted. 3(f) The carrying amount of a deferred tax asset is reviewed at the end of each reporting period and is reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow the related tax benefit to be utilised. Any such reduction is reversed to the extent that it becomes probable that sufficient taxable profits will be available. Additional income taxes that arise from the distribution of dividends are recognised when the liability to pay the related dividends is recognised.

128 SIGNIFICANT ACCOUNTING POLICIES (Continued) (v) Income tax expense (Continued) Current tax balances and deferred tax balances, and movements therein, are presented separately from each other and are not offset. Current tax assets are offset against current tax liabilities, and deferred tax assets against deferred tax liabilities, if the Company or the Group has the legally enforceable right to set off current tax assets against current tax liabilities and the following additional conditions are met: 3. (v) in the case of current tax assets and liabilities, the Company or the Group intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously; or in the case of deferred tax assets and liabilities, if they relate to income taxes levied by the same taxation authority on either: the same taxable entity; or different taxable entities, which, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered, intend to realise the current tax assets and settle the current tax liabilities on a net basis or realise and settle simultaneously. (w) Dividends Dividends are recognised as a liability in the period in which they are declared. (w) (x) Earnings per share The Group presents basic and diluted earnings per share ( EPS ) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which comprise restricted shares granted to employees. (x)

129 128 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report SIGNIFICANT ACCOUNTING POLICIES (Continued) (y) Non-current assets held for sale A non-current asset (or disposal group) is classified as held for sale if it is highly probable that its carrying amount will be recovered through a sale transaction rather than through continuing use and the asset (or disposal group) is available for sale in its present condition. A disposal group is a group of assets to be disposed of together as a group in a single transaction, and liabilities directly associated with those assets that will be transferred in the transaction. 3. (y) When the Group is committed to a sale plan involving loss of control of a subsidiary, all the assets and liabilities of that subsidiary are classified as held for sale when the above criteria for classification as held for sale are met, regardless of whether the Group will retain a non-controlling interest in the subsidiary after the sale. Immediately before classification as held for sale, the measurement of the non-current assets (and all individual assets and liabilities in a disposal group) is brought up-todate in accordance with the accounting policies before the classification. Then, on initial classification as held for sale and until disposal, the non-current assets (except for certain assets as explained below), or disposal groups, are recognised at the lower of their carrying amount and fair value less costs to sell. The principal exceptions to this measurement policy so far as the financial statements of the Group and the Company are concerned are deferred tax assets, financial assets (other than investments in subsidiaries, associates and joint ventures) and investment properties. These assets, even if held for sale, would continue to be measured in accordance with the policies set out elsewhere in note 3. 3 Impairment losses on initial classification as held for sale, and on subsequent remeasurement while held for sale, are recognised in profit or loss. As long as a non-current asset is classified as held for sale, or is included in a disposal group that is classified as held for sale, the non-current asset is not depreciated or amortised.

130 SIGNIFICANT ACCOUNTING POLICIES (Continued) (z) Related parties (i) A person, or a close member of that person s family, is related to the Group if that person: (1) has control or joint control over the Group; (2) has significant influence over the Group; or (3) is a member of the key management personnel of the Group or the Group s parent. 3. (z) (i) (1) (2) (3) (ii) An entity is related to the Group if any of the following conditions applies: (ii) (1) The entity and the Group are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others). (1) (2) One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member). (2) (3) Both entities are joint ventures of the same third party. (3) (4) One entity is a joint venture of a third entity and the other entity is an associate of the third entity. (4) (5) The entity is a post-employment benefit plan for the benefit of employees of either the Group or an entity related to the Group. (5) (6) The entity is controlled or jointly controlled by a person identified in (i). (6) (i) (7) A person identified in (i)(1) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity). (7) (i)(1) Close members of the family of a person are those family members who may be expected to influence, or be influenced by, that person in their dealings with the entity.

131 130 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report SIGNIFICANT ACCOUNTING POLICIES (Continued) (aa) Segment reporting Operating segments, and the amounts of each segment item reported in the financial statements, are identified from the financial information provided regularly to the Group s most senior executive management for the purposes of allocating resources to and assessing the performance of the Group s various lines of business. 3. (aa) Individually material operating segments are not aggregated for financial reporting purposes unless the segments have similar economic characteristics and are similar in respect of the nature of products and services, the nature of production processes, the type or class of customers, the methods used to distribute the products or provide the services, and the nature of the regulatory environment. Operating segments which are not individually material may be aggregated if they share a majority of these criteria. (bb) New standards and interpretations not yet adopted Up to the date of issue these financial statements, the IASB has issued a number of new standards, amendments to standards and interpretations which are not yet effective for the year ended 31 December 2013, and have not been applied in preparing these consolidated financial statements: (bb) Effective for accounting period beginning on or after Amendments to IAS 32, Financial instruments: Presentation Offsetting financial assets and financial liabilities 32 1 January 2014 Amendments to IFRS 10, Consolidated financial statements, IFRS 12, Disclosure of interests in other entities and IAS 27 Separate financial statements Investment entities January 2014 Amendments to IAS 36, Impairment of assets 36 Recoverable amount disclosures for non-financial assets 1 January 2014

132 SIGNIFICANT ACCOUNTING POLICIES (Continued) (bb) New standards and interpretations not yet adopted (Continued) 3. (bb) Effective for accounting period beginning on or after Amendments to IAS 39, Financial instruments: Recognition and Measurement Novation of derivatives and continuation of hedge accounting 39 1 January 2014 IFRIC 21, Levies 21 1 January 2014 Amendments to IAS 19, Employee benefits: Defined Benefit Plans: Employee Contributions 19 1 July 2014 Annual Improvements to IFRSs Cycle 1 July 2014 Annual Improvements to IFRSs Cycle 1 July 2014 IFRS 14 Regulatory Deferral Accounts 14 1 January 2016 IFRS 9, Financial instruments 9 To be determined The Group is in the process of making an assessment of what the impact of these amendments, new standards and new interpretations is expected to be in the period of initial application. So far, the Group has concluded that the adoption of them is unlikely to have a significant impact on the Group s consolidated financial statements.

133 132 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report CHANGES IN ACCOUNTING POLICIES The IASB has issued a number of new IFRSs, a few amendments to IFRSs that are first effective for the current accounting period of the Group and the Company. Of these, the following development is relevant to the Group s financial statements: 4. Amendments to IAS 1, Presentation of financial statements Presentation of items of other comprehensive income 1 IFRS 10, Consolidated financial statements 10 IFRS 11, Joint arrangements 11 IFRS 12, Disclosure of interests in other entities 12 IFRS 13, Fair value measurement 13 Annual Improvements to IFRSs Cycle Amendments to IFRS 7 Disclosures Offsetting financial assets and financial liabilities 7 The Group has not applied any new standard or interpretation that is not yet effective for the current accounting period. Amendments to IAS 1, Presentation of financial statements Presentation of items of other comprehensive income 1 The amendments require entities to present separately the items of other comprehensive income that would be reclassified to profit or loss in the future if certain conditions are met from those that would never be reclassified to profit or loss. The Group s presentation of other comprehensive income in these financial statements has been modified accordingly.

134 CHANGES IN ACCOUNTING POLICIES (Continued) IFRS 10, Consolidated financial statements IFRS 10 replaces the requirements in IAS 27, Consolidated and separate financial statements relating to the preparation of consolidated financial statements and SIC 12 Consolidation Special purpose entities. It introduces a single control model to determine whether an investee should be consolidated, by focusing on whether the entity has power over the investee, exposure or rights to variable returns from its involvement with the investee and the ability to use its power to affect the amount of those returns As a result of the adoption of IFRS 10, the Group has changed its accounting policy with respect to determining whether it has control over an investee. The adoption does not change any of the control conclusions reached by the Group in respect of its involvement with other entities as at 1 January IFRS 11, Joint arrangements 11 IFRS 11, which replaces IAS 31, Interests in joint ventures, divides joint arrangements into joint operations and joint ventures. Entities are required to determine the type of an arrangement by considering the structure, legal form, contractual terms and other facts and circumstances relevant to their rights and obligations under the arrangement. Joint arrangements which are classified as joint operations under IFRS 11 are recognised on a line-by-line basis to the extent of the joint operator s interest in the joint operation. All other joint arrangements are classified as joint ventures under IFRS 11 and are required to be accounted for using the equity method. Proportionate consolidation is no longer allowed as an accounting policy choice As a result of the adoption of IFRS 11, the Group has changed its accounting policy with respect to its interests in joint arrangements and re-evaluated its involvement in its joint arrangements. The Group has reclassified the investment from jointly controlled entity to joint venture. The investment continues to be accounted for using the equity method and therefore this reclassification does not have any material impact on the financial position and the financial result of the Group. 11

135 134 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report CHANGES IN ACCOUNTING POLICIES (Continued) IFRS 12, Disclosure of interests in other entities IFRS 12 brings together into a single standard all the disclosure requirements relevant to an entity s interests in subsidiaries, joint arrangements, associates and unconsolidated structured entities. The disclosures required by IFRS 12 are generally more extensive than those required by the respective standards. To the extent that the requirements are applicable to the Group, the Group has provided those disclosures in notes 27, 28 and IFRS 13, Fair value measurement 13 IFRS 13 replaces existing guidance in individual IFRSs with a single source of fair value measurement guidance. IFRS 13 also contains extensive disclosure requirements about fair value measurements for both financial instruments and non-financial instruments. To the extent that the requirements are applicable to the Group, the Group has provided those disclosures in notes 24 and 45. The adoption of IFRS 13 does not have any material impact on the fair value measurements of the Group s assets and liabilities Annual Improvements to IFRSs Cycle This cycle of annual improvements contains amendments to five standards with consequential amendments to other standards and interpretations. Among them, IAS 1 has been amended to clarify that an opening balance sheet is required only when a retrospective application of an accounting policy, a retrospective restatement or a reclassification has a material effect on the information presented in the opening balance sheet. The amendments also remove the requirement to present related notes to the opening balance sheet when such statement is presented. 1

136 CHANGES IN ACCOUNTING POLICIES (Continued) Amendments to IFRS 7 Disclosures Offsetting financial assets and financial liabilities 4. 7 The amendments introduce new disclosures in respect of offsetting financial assets and financial liabilities. Those new disclosures are required for all recognised financial instruments that are set off in accordance with IAS 32, Financial instruments: Presentation and those that are subject to an enforceable master netting arrangement or similar agreement that covers similar financial instruments and transactions, irrespective of whether the financial instruments are set off in accordance with IAS The adoption of the amendments does not have an impact on these financial statements because the Group has not offset financial instruments, nor has it entered into master netting arrangement or similar agreement which is subject to the disclosures of IFRS 7 during the periods presented. 5. ACCOUNTING ESTIMATES AND JUDGEMENTS The following critical accounting policies involve the most significant judgements and estimates used in the preparation of the consolidated financial statements (i) Valuation of investment properties An external, independent valuation company, having appropriate recognised professional qualifications and recent experience in the location and category of property being valued, values the Group s investment property portfolio every six months. The fair values are based on market values, being the estimated amount for which a property could be exchanged on the date of the valuation between a willing buyer and a willing seller in arms length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion. (i) In the absence of current prices in an active market, the valuations are prepared by considering the aggregate of the estimated cash flows expected to be received from renting out the property. A yield that reflects the specific risks inherent in the net cash flows then is applied to the net annual cash flows to arrive at the property valuation.

137 136 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report ACCOUNTING ESTIMATES AND JUDGEMENTS (Continued) (i) Valuation of investment properties (Continued) Valuations reflect, where appropriate: the type of tenants actually in occupation or responsible for meeting lease commitments or likely to be in occupation after letting vacant accommodation, and the market s general perception of their creditworthiness; the allocation of maintenance and insurance responsibilities between the Group and the lessee; and the remaining economic life of the property. When rent reviews or lease renewals are pending with anticipated reversionary increases, it is assumed that all notices and where appropriate counter-notices have been served validly and within the appropriate time. 5. (i) Investment property under construction or development is valued by estimating the fair value of the completed investment property and then deducting from that amount the estimated costs to complete construction or development, financing costs and a reasonable profit margin. (ii) Impairment of non-financial assets If circumstances indicate that the carrying amounts of nonfinancial assets (other than investment properties, properties under development, completed properties held for sale, inventories and deferred tax assets) may not be recoverable, the assets may be considered impaired and are tested for impairment. An impairment loss is recognised when the asset s recoverable amount has declined below its carrying amount. The recoverable amount is the greater of the fair value less costs to sell and value in use. In determining the recoverable amount which requires significant judgements, the Group estimates the future cash flows to be derived from continuing use and ultimate disposal of the asset and applies an appropriate discount rate to these future cash flows. (ii)

138 ACCOUNTING ESTIMATES AND JUDGEMENTS (Continued) (iii) Write-down of properties under development and completed properties held for sale Management performs a regular review on the carrying amounts of properties under development and completed properties held for sale. Based on management s review, write-down of properties under development and completed properties held for sale will be made when the estimated net realisable value has declined below the carrying amount. 5. (iii) In determining the net realisable value of completed properties held for sale, management refers to prevailing market data such as recent sales transactions, market survey reports available from independent property valuers and internally available information, as basis for evaluation. In respect of properties under development, the estimate of net realisable value requires the application of a risk-adjusted discount rate to the estimated future cash flows to be derived from these properties. These estimates require judgement as to the anticipated sale prices by reference to recent sales transactions in nearby locations, rate of new property sales, marketing costs (including price discounts required to stimulate sales) and the estimated costs to completion of properties, the legal and regulatory framework and general market conditions. (iv) Recognition of deferred tax assets At 31 December 2013, the Group has recognised deferred tax assets in relation to the unused tax losses as set out in note 34(ii). The ability to realise the deferred tax assets mainly depends on whether it is probable that future taxable profits will be available against which related tax benefits under the deferred tax assets can be utilised. In cases where the actual future taxable profits generated are less than expected, a reversal of deferred tax assets may arise, which will be recognised in profit or loss for the period in which such a reversal takes place. (iv) 34(ii)

139 138 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report ACCOUNTING ESTIMATES AND JUDGEMENTS (Continued) (v) PRC land appreciation taxes The Group is subject to land appreciation taxes in the PRC. However, the implementation and settlement of these taxes varies among various tax jurisdictions in cities of the PRC, and the Group has not finalised its PRC land appreciation taxes calculation and payments with most of local tax authorities in the PRC. Accordingly, significant judgement is required in determining the amount of the land appreciation and its related taxes. The Group recognised these PRC land appreciation taxes based on management s best estimates according to the understanding of the tax rules. The final tax outcome could be different from the amounts that were initially recorded, and these differences will impact the taxation and tax provisions in the years in which such taxes have been finalised with local tax authorities. 6. SEGMENT REPORTING The Group has five reportable segments, as described below, which are the Group s strategic business units. The strategic business units offer different products and services, and are managed separately because they require different technology and marketing strategies. For each of the strategic business units, the chief operating decision maker (the CODM ) reviews internal management reports at least on a monthly basis. The following summary describes the operations in each of the Group s reportable segments. 5. (v) 6. Sales of properties: this segment develops and sells residential properties, including villas, townhouses and apartments, etc. Currently the Group s activities in this regard are carried out in Shanghai, Kunming, Changshu, Wuxi, Suzhou, Haikou, Taiyuan, Ningbo, Huangshan, Hangzhou, Xuzhou and Nanning. Lease of properties: this segment leases commercial and residential properties to generate rental income and gain from the appreciation in the properties values in the long term. Currently the Group s investment property portfolio is located in Shanghai, Suzhou and Wuxi. Hotel and related services: this segment operates hotels and service apartments to generate accommodation service and related income. Currently the Group s activities in this regard are carried out in Shanghai, Suzhou and Huangshan.

140 SEGMENT REPORTING (Continued) Education: this segment provides education and accommodation service to college students. Currently the Group s activities in this regard are carried out in Shanghai. 6. Property management and other related services: this segment provides property management services, project management services, greenery construction services and other related services to external customers and group companies. Currently the Group s activities in this regard are carried out in Shanghai, Kunming, Changshu, Wuxi, Suzhou, Haikou, Taiyuan and Ningbo. For the purposes of assessing segment performance and allocating resources between segments, the Group s senior executive management monitors the results, assets and liabilities attributable to each reportable segment on the following basis: Segment assets include all current and non-current assets with the exception of interests in associates and interests in joint ventures. Segment liabilities include all current and non-current liabilities except for senior notes, bonds and financial derivatives managed at corporate level. Revenue and expenses are allocated to the reportable segments with reference to the revenue generated and the expenses incurred by those segments or which otherwise arise from the depreciation or amortisation of assets attributable to those segments. Segment results do not include fair value change on financial derivatives, share-based payments, net gain on disposal of equity interests in subsidiaries, loss on redemption of senior notes, share of losses of associates, share of losses of joint ventures and any other transactions managed at the corporate level.

141 140 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report SEGMENT REPORTING (Continued) For the year ended 31 December Property management Hotel & & other Sales of Lease of related related Expressed in RMB 000 properties properties services Education services Total Revenue from external customers 5,053,770 59, ,307 73, ,700 5,447,768 Inter-segment revenue 15,822 15,822 Reportable segment revenue 5,053,770 59, ,307 73, ,522 5,463,590 Reportable segment profit/(loss) 278,733 (37,271) (73,136) (3,988) 2, ,810 Interest income 96, ,202 99,057 Interest expenses (396,236) (21,708) (26,681) (8,364) (1,368) (454,357) Revaluation losses on investment properties (80,539) (80,539) Reportable segment assets 18,657,654 1,719,000 1,940, , ,674 22,832,675 Additions to non-current segment assets during the year 4,864 73,539 1,084 31, ,604 Reportable segment liabilities 9,848,536 1,025,348 1,672, , ,842 12,905,454 Depreciation and amortisation 12,650 46,934 14, ,515

142 SEGMENT REPORTING (Continued) For the year ended 31 December Property management Hotel & & other Sales of Lease of related related Expressed in RMB 000 properties properties services Education services Total Revenue from external customers 1,415,373 50, ,156 74,917 83,561 1,766,535 Inter-segment revenue 9,776 9,776 Reportable segment revenue 1,415,373 50, ,156 74,917 93,337 1,776,311 Reportable segment (loss)/profit (848,360) (44,636) (84,369) 6,821 (4,070) (974,614) Interest income 89,663 2,574 3, ,465 99,003 Interest expenses (214,867) (23,161) (31,988) (8,431) (278,447) Revaluation losses on investment properties (65,490) (65,490) Reportable segment assets 19,220,811 1,758,000 1,948, , ,227 23,437,210 Additions to non-current segment assets during the year 13, , , ,363 Reportable segment liabilities 16,098, ,980 1,620, , ,599 18,904,897 Depreciation and amortisation 14,809 48,395 12, ,832

143 142 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report SEGMENT REPORTING (Continued) Reconciliation of reportable segment revenue, profit/ (loss), assets and liabilities RMB 000 RMB 000 Revenue Reportable segment revenue 5,463,590 1,776,311 Elimination of inter-segment revenue (15,822) (9,776) Consolidated revenue 5,447,768 1,766, RMB 000 RMB 000 Profit/(Loss) Reportable segment profit/(loss) 166,810 (974,614) Elimination of inter-segment profits (7,453) (8,794) Fair value change on financial derivatives 112, Share-based payments (19,525) (5,472) Net gain on disposal of interests in subsidiaries 214, ,499 Share of losses of associates (114,096) (102,252) Share of losses of joint ventures (48,175) (32,579) Loss on redemption of senior notes (271,577) Consolidated profit/(loss) after income tax 33,150 (988,360)

144 SEGMENT REPORTING (Continued) Reconciliation of reportable segment revenue, profit/ (loss), assets and liabilities (Continued) RMB 000 RMB 000 Assets Reportable segment assets 22,832,675 23,437,210 Elimination of inter-segment receivables (1,142,023) (1,434,885) Elimination of inter-segment investments (631,565) (632,076) Interests in associates 3, ,325 Interests in joint ventures 677, ,556 Consolidated total assets 21,739,707 23,053, RMB 000 RMB 000 Liabilities Reportable segment liabilities 12,905,454 18,904,897 Elimination of inter-segment payables (1,142,023) (1,434,885) Bonds 4,269,203 Senior notes 1,272,656 Financial derivatives 890 Consolidated total liabilities 16,032,634 18,743,558 Geographical information In view of the fact that the Group mainly operates in the PRC, no geographical segment information is presented. Information about major customers For the year ended 31 December 2013 and 2012, no single customer contributes 10% or more of the total sales of the group. 10%

145 144 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report DISPOSAL OF EQUITY INTERESTS IN SUBSIDIARIES a) Disposal of Wuxi Xindu Real Estate Development Co., Ltd. ( Wuxi Xindu ) On 4 January 2013, the Group entered into a share sale and purchase agreement with an independent third party. Pursuant to the agreement, the Group has agreed to sell the 60% equity interests in Wuxi Xindu for a total consideration of RMB1,099 million. During the year, the disposal has been completed. 7. a) 1,099,000,000 60% RMB 000 Assets: Total assets classified as held for sale 4,193,626 Liabilities: Total liabilities associated with assets classified as held for sale (3,188,578) Shareholder s loan due to the Group (979,000) Other liabilities due to the Group (12,643) Net assets 13,405 Net assets attributable to the Group 8,043 Add: Shareholder s loan due to the Group 979,000 Other liabilities due to the Group 12,643 Net gain on disposal 99,090 Total consideration in cash 1,098,776 Cash at bank and cash in hand disposed of (114,834) Amount due from the third party as at 31 December 2013 (128,776) Net cash received during ,166

146 DISPOSAL OF EQUITY INTERESTS IN SUBSIDIARIES (Continued) b) Disposal of Delta Link Holdings Limited ( Delta Link ) On 8 May 2013, the Group entered into a share sale and purchase agreement pursuant to which the Group has agreed to sell the 100% equity interests in Delta Link, a whollyowned subsidiary of the Group, as well as the shareholder loans provided by the Group to Silversonic Profit Holding Limited, a company controlled by Mr. Wang Weixian (the former controlling shareholder of the Company), at a total consideration of approximately RMB1,028 million. Delta Link is the legal and beneficial holder of 50% of the entire issued share capital of The Peninsula Shanghai Waitan Hotel Company Limited ( Peninsula Waitan ). The disposal was completed on 27 August b) Delta Link Holdings Limited Delta Link Silversonic Profit Holding Limited Delta Link 1,028,000,000Delta Link 50% RMB 000 Cost of investment 880,678 Share of post-acquisition loss (17,979) Shareholder s loan due to the Group 49, ,660 Gain on disposal 115,264 Total consideration 1,027,924 Satisfied by: Set-off with special dividends attributable to Mr. Wang Weixian 764,600 Cash consideration received during ,324 1,027,924

147 146 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report REVENUE The amount of each significant category of revenue recognised is as follows: RMB 000 RMB 000 Sales of properties 5,053,770 1,415,373 Rental income 59,366 50,528 Hotel operation income 147, ,156 Tuition fee 73,625 74,917 Property management income and other related services 113,700 83,561 Total 5,447,768 1,766, OTHER INCOME RMB 000 RMB 000 Government grants 2,766 1,699 Forfeited deposits from customers 3,356 4,228 Gain on disposal of property, plant and equipment 210 5,025 Gain on acquisition of a subsidiary (i) (i) 51,932 Others 5,251 6,739 Total 63,515 17,691

148 OTHER INCOME (Continued) (i) On 30 September 2013, Vite Wight International Limited ( VWIL ), which is a subsidiary of Greenland Holding, the Company s ultimate controlling shareholder and SPG Investment XVII (BVI) Limited ( SPG XVII ), which is a subsidiary of the Company, entered into a share sale and purchase agreement. Pursuant to the agreement, VWIL has agreed to sell and SPG XVII has agreed to purchase the 50% equity interests in Xu Bao Co. Limited ( Xu Bao BVI ) and the shareholder s loan due to VWIL by Xu Bao BVI and its subsidiaries (the Target Group ) at a total consideration of approximately RMB1,785 million. The transaction was completed on 10 December (i) SPG Investment XVII (BVI) Limited SPG XVII SPG XVII BVI 50% BVI 1,785,000,000 Identifiable assets acquired and liabilities assumed RMB 000 Trade and other receivables 947 Properties under development (note 25) 25 3,931,939 Cash and cash equivalents 23,610 Other assets 567 Trade and other payables (3,819,349) Deferred tax liabilities (note 34(iii)) 34(iii) (33,750) Net identifiable assets 103,964 Net identifiable assets attributable to non-controlling interests (51,982) Net identifiable assets attributable to the Group 51,982 Shareholder s loan 1,784,558 Gain from bargain purchase (51,932) Total consideration satisfied in cash 1,784,608 Net cash paid for the acquisition during ,760,998

149 148 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report OTHER OPERATING EXPENSES RMB 000 RMB 000 Penalties 10, ,224 Write-down of properties under development and completed properties held for sale (i) 42, ,765 Impairment of other investments (ii) 13,032 Loss on disposal of interests in an associate 17,031 Loss on redemption of senior notes (note 38) ,577 Others 6,470 7,094 Total 344, ,114 (i) As of 31 December 2013, the Group assessed the net realisable value of its properties. As a result, the carrying amounts of properties under development and completed properties held for sale were written down by RMB42,881,000 (2012: RMB329,765,000). (i) 42,881, ,765,000 (ii) Full provision was made for the equity investment in XDM Resources Inc., amounting to RMB13,032,000. (ii) XDM Resources Inc. 13,032, PERSONNEL EXPENSES RMB 000 RMB 000 Wages and salaries 166, ,647 Contributions to defined contribution plans 30,197 31,247 Staff welfare, bonuses and other allowances 4,754 26,186 Equity-settled share-based payment expenses (note 41) 41 19,525 5,472 Total 221, ,552

150 EXPENSES BY NATURE The following expenses are included in cost of sales, selling and marketing costs and administrative expenses: RMB 000 RMB 000 Cost of properties sold 3,408, ,873 Auditors remuneration audit services 3,400 4,250 audit-related services 1, Depreciation 72,597 73,914 Amortisation of land use rights 1,873 1,873 Operating lease charges 54,331 55, FINANCE INCOME AND EXPENSES RMB 000 RMB 000 Interest income on bank deposits 41,985 36,639 Interest income on long-term receivable measured at amortised cost (note 31) 31 57,072 62,364 Finance income 99,057 99,003 Interest expenses on interest-bearing loans, bonds and senior notes (581,648) (809,788) Less: interest capitalised (note 25) , ,341 Net interest expenses on interest-bearing loans, bonds and senior notes (454,357) (278,447) Interest expenses on long-term payable measured at amortised cost (2,868) (3,070) Net change in fair value of other investments (2,422) 1,618 Net foreign exchange gain 44,316 2,673 Finance expenses (415,331) (277,226) Fair value changes on financial derivatives Embedded derivatives (note 38) ,922 Interest rate swaps , Net finance expenses (203,462) (177,371)

151 150 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report INCOME TAX EXPENSE (i) Income tax in the consolidated statement of comprehensive income represents: 14. (i) RMB 000 RMB 000 Current tax Provision for PRC enterprise income tax for the year (note 34(i)) Provision for PRC land appreciation tax for the year 34(i) 154,679 77, , , , ,726 Deferred tax Origination and reversal of temporary differences (note 34(ii)&(iii)) 34(ii) (iii) 80,318 21,759 Benefit of tax losses recognised (note 34(ii)) 34(ii) (5,777) (50,912) Deferred PRC land appreciation tax (131,503) 5,031 (56,962) (24,122) Total income tax expense 483, ,604 Enterprise income tax No provision for Hong Kong Profits Tax has been made as the Group did not earn any income subject to Hong Kong Profits Tax during the year ended 31 December Pursuant to the rules and regulations of the Cayman Islands and the British Virgin Islands, the Group is not subject to any income tax in the Cayman Islands and the British Virgin Islands. Pursuant to the Corporate Income Tax Law of the PRC, the Group s main project companies were subject to PRC income tax at a rate of 25% (2012: 25%). 25% 25%

152 INCOME TAX EXPENSE (Continued) (i) Income tax in the consolidated statement of comprehensive income represents: (Continued) Land appreciation tax PRC land appreciation tax is levied on properties developed for sale by the Group at progressive rates ranging from 30% to 60% on the appreciation of land value, which under the applicable regulations is calculated based on the proceeds of sales of properties less deductible expenditures including lease charges of land use rights, borrowing costs and all property development expenditures. Land appreciation tax of RMB253,949,000 has been included in profit or loss for the year ended 31 December 2013 (2012: RMB137,687,000). 14. (i) 30% 60% 253,949, ,687,000 (ii) Reconciliation between tax expense and accounting profit/(loss) at applicable tax rate: (ii) RMB 000 RMB 000 Profit/(Loss) before income tax 516,319 (802,756) Less: PRC land appreciation tax (note 34(i)) 34(i) (253,949) (137,687) 262,370 (940,443) Tax calculated at the rates applicable to respective companies that comprise the Group 137,527 (124,720) Tax effect of share of results of associates and joint ventures 12,044 23,716 Non-deductible expenses, net of non-taxable income 2,701 33,747 Unrecognised deferred tax assets 78, ,038 (Over)/under-provision in prior years (1,830) 3, ,220 47,917 PRC land appreciation tax 253, ,687 Total 483, ,604 In accordance with the accounting policy set out in note 3(v), the Group has not recognised deferred tax assets in respect of cumulative tax losses of certain subsidiaries for the year ended 31 December 2013 as it is not probable that future taxable profits against which the losses can be utilised will be available in the relevant tax jurisdiction and entity. 3(v)

153 152 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report DIRECTORS REMUNERATION 15. Fee Basic salaries, allowances and other benefits Contributions to retirement benefit schemes Bonus Share-based payment Total RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 (note 41) 41 For the year ended 31 December 2013 Executive Directors Mr. Chen Jun (note i) i Mr. Hou Guangjun (note i) i Mr. Wu Zhengkui (note i) i Mr. You Defeng (note i) i 1, ,243 3,770 Mr. Wang Weixian (note i) i 4,821 4,821 Ms. Wang Xuling 4,835 1,854 6,689 Independent Non-Executive Directors Mr. Cheong Ying Chew, Henry 278 1,121 1,399 Mr. Fong Wo, Felix, JP 278 1,121 1,399 Mr. Jiang Simon X ,121 1,399 Mr. Kwan Kai Cheong 278 1,121 1,399 Total 1,112 11, ,581 21,194

154 DIRECTORS REMUNERATION (Continued) 15. Basic salaries, Fee allowances and other benefits Contributions to retirement benefit schemes Bonus Share based payment Total RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 For the year ended 31 December 2012 Executive Directors Mr. Wang Weixian 4,675 4,675 Ms. Wang Xuling 4,769 1,143 5,912 Mr. Cheung Man Hoi, Ronny (ii) (ii) Mr. Chu Hau Lim (iii) (iii) 2,121 2,121 Non-Executive Directors Mr. Tse Sai Tung, Stones (iv) (iv) Independent Non-Executive Directors Mr. Cheong Ying Chew, Henry Mr. Fong Wo, Felix, JP Mr. Jiang Simon X Mr. Kwan Kai Cheong Total 1,323 12,235 1,143 14,701 (i) The appointment of each of Mr. Chen Jun, Mr. Hou Guangjun, Mr. Wu Zhengkui and Mr. You Defeng as executive directors has become effective on 27 August (i) With effect from 27 August 2013: (a) Mr. Wang Weixian (a) has been appointed as Honorary Chairman of the Board; (b) Mr. Chen Jun has been appointed as Chairman of the Board (b) and Chief Executive Officer of the Company; and (c) Mr. Hou (c) Guangjun has been appointed as Chief Operation Officer of the Company.

155 154 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report DIRECTORS REMUNERATION (Continued) (ii) Mr. Cheung Man Hoi resigned as an executive director of the Company with effect from 1 April (ii) (iii) Mr. Chu Hau Lim was appointed as an executive director of the Company with effect from 16 April 2012 and resigned as an executive director of the Company with effect from 1 October (iii) (iv) Mr. Tse Sai Tung, Stones did not offer himself for re-election as a non-executive director in the Annual General Meeting held on 1 June (iv) 16. SENIOR MANAGEMENT REMUNERATION The five highest paid individuals of the Group during the year ended 31 December 2013 comprise three directors of the Company (2012: three), whose remuneration is disclosed in note 15. Details of remuneration paid to the remaining highest paid individuals of the Group are as follows: RMB 000 RMB 000 Basic salary, allowances and other benefits 6,846 5,935 The emoluments of the two (2012: two) individuals with the highest emoluments are within the following bands: Number of individuals Number of individuals Hong Kong Dollar 1,000,001 2,000,000 1,000,001 2,000,000 2,000,001 3,000,000 2,000,001 3,000, ,000,001 4,000,000 3,000,001 4,000, During 2013, no emoluments were paid by the Group to the directors as an inducement to join or upon joining the Group or as compensation for loss of office.

156 OTHER COMPREHENSIVE INCOME (i) Tax effects relating to other comprehensive income: There are no tax effects in relation to the other comprehensive income of the Group. 17. (i) (ii) Components of other comprehensive income, including reclassification adjustments (ii) RMB 000 RMB 000 Exchange differences on translation of financial statements of overseas subsidiaries Reclassification adjustments for amounts transferred to profit or loss Net movement during the year recognised in other comprehensive income 21,879 (43) (5,527) 16,352 (43) 18. DIVIDENDS RMB 000 RMB 000 Final dividends in respect of previous financial year, declared and paid during the year (2012: nil) (i) (i) Special dividend (ii) (ii) 1,044,515

157 156 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report DIVIDENDS (Continued) (i) In the meeting held on 28 March 2013, the Board of Directors resolved not to propose cash dividends for the year ended 31 December 2012, which was approved at the Annual General Meeting held on 3 June (i) (ii) On 5 August 2013, the extraordinary general meeting has passed an ordinary resolution to distribute a special dividend of HKD1.275 per share after share consolidation (note 42(d)) in cash to the shareholders and the convertible preference share holders (other than Gluon Xima International Limited). The cash dividends were paid out of the share premium account of the Company during the year ended 31 December (ii) 42(d) (iii) The Board of Directors has resolved to propose a 2013 final dividend of HKD 0.05 per ordinary share and HKD 0.05 per convertible preference share. Such dividend is to be approved by the shareholders at the forthcoming annual general meeting. The dividends proposed after the balance sheet date have not been recognised as a liability at 31 December (iii) EARNINGS/(LOSS) PER SHARE (a) Basic earnings/(loss) per share Basic and diluted earnings/(loss) per share is calculated by dividing the profit/(loss) attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the period excluding ordinary shares purchased of the Group and held for Share Award Scheme (note 41). 19. (a) RMB 000 RMB 000 Profit/(loss) attributable to equity holders of the Company 34,513 (938,248)

158 EARNINGS/(LOSS) PER SHARE (Continued) (a) Basic earnings/(loss) per share (Continued) 19. (a) Weighted average number of ordinary shares Number of shares ,567,074,588 1,021,428,751 (b) Diluted earnings/(loss) per share Diluted earnings/(loss) per share is calculated by adjusting the weighted average number of ordinary shares outstanding based on the assumption that all dilutive potential ordinary (b) shares are converted as follows: Number of shares Weighted average number of ordinary shares (basic) 1,567,074,588 1,021,428,751 Effect of Share Award Scheme 19,545,934 Weighted average number of ordinary shares (diluted) at 31 December 1,586,620,522 1,021,428,751 There is no adjustment on profit/(loss) attributable to ordinary shareholders of the Company.

159 158 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report PROPERTY, PLANT AND EQUIPMENT 20. In RMB 000 Buildings Leasehold improvements Motor vehicles Fixtures, fittings & equipment Construction in progress Total Cost: Balance at 1 January ,316 32,243 38, ,660 1,211,788 Acquisitions 9 6,697 9,571 5,319 21,596 Transfer from properties under development 15,046 15,046 Transfer to assets classified as held for sale (590) (394) (984) Disposal of a subsidiary (692) (350) (1,042) Disposals (6,502) (550) (609) (7,661) Balance at 31 December ,869 32,243 43, ,878 5,319 1,238,743 Acquisitions/adjustments (9,462) 2,282 11,230 21,864 25,914 Transfer from properties under development (note 25) 25 10,799 10,799 Disposals (4,523) (327) (4,850) Balance at 31 December ,206 32,243 41, ,781 27,183 1,270,606 Depreciation: Balance at 1 January ,462 25,637 21,663 66, ,315 Charge for the year 34, ,426 33,481 73,914 Transfer to assets classified as held for sale (197) (95) (292) Disposal of a subsidiary (181) (62) (243) Disposals (442) (502) (395) (1,339) Balance at 31 December ,423 26,241 26,209 99, ,355 Charge for the year 34, ,781 33,306 72,597 Disposals (4,021) (304) (4,325) Balance at 31 December ,425 26,749 26, , ,627 Carrying amounts: At 31 December ,781 5,494 14, ,297 27, ,979 At 31 December ,446 6,002 17, ,396 5, ,388 (i) All buildings owned by the Group are located in the PRC. (i) (ii) As at 31 December 2013, property, plant and equipment with a total carrying value of RMB777,418,000 (2012: RMB777,943,000) were pledged as collateral for the Group s borrowings. (ii) 777,418, ,943,000

160 INTANGIBLE ASSETS Contractor qualification RMB 000 RMB 000 Cost: Balance at 1 January and 31 December 1,700 1,700 Amortisation: Balance at 1 January Amortisation charge for the year Balance at 31 December Carrying amounts: Balance at 31 December 1,476 1, LAND USE RIGHTS RMB 000 RMB 000 Cost: Balance at 1 January and 31 December 91,265 91,265 Amortisation: Balance at 1 January 14,439 12,566 Amortisation charge for the year 1,873 1,873 Balance at 31 December 16,312 14,439 Carrying amounts: Balance at 31 December 74,953 76,826 Land use rights represent lease prepayments for acquiring rights to use land, which is all located in the PRC, for own use properties.

161 160 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report OTHER INVESTMENTS RMB 000 RMB 000 Equity securities available-for-sale 2,800 15,432 Entrust loans (i) 20,000 Non-current investments 2,800 35,432 Equity securities held for trading 16,436 Other available-for-sale investments 99,000 Entrust loans 50,000 Current investments (i) 165,436 (i) The other investments were derecognized when the investments were disposed of or settled. (i) 24. INVESTMENT PROPERTIES RMB 000 RMB 000 Balance at 1 January 1,758,000 1,651,000 Cost capitalised 73, ,490 Transfer to completed properties held for sale (note 26) 26 (32,000) Fair value adjustments: Recognised in profit and loss (80,539) (65,490) Balance at 31 December 1,719,000 1,758,000

162 INVESTMENT PROPERTIES (Continued) The following table presents the fair value of the Group s investment properties measured at the end of the reporting period on a recurring basis, categorised into the three-level fair value hierarchy as defined in IFRS 13, Fair value measurement. The level into which a fair value measurement is classified is determined with reference to the observability and significance of the inputs used in the valuation technique as follows: Level 1: Fair value measured using unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date. Level 2: Fair value measured using observable inputs and not using significant unobservable inputs. Unobservable inputs are inputs for which market data are not available. Level 3: Fair value measured using significant unobservable inputs The Group Level 1 Level 2 Level 3 Total RMB 000 RMB 000 RMB 000 RMB 000 Investment properties 1,719,000 1,719,000 During the year ended 31 December 2013, there were no transfers between Level 1 and Level 2, or transfers into or out of Level 3. The Group s policy is to recognise transfers between levels of fair value hierarchy as at the end of the reporting period in which they occur. All the Group s investment properties are stated at fair value at 31 December The fair values were arrived at based on valuations carried out by DTZ Debenham Tie Leung Limited. The valuations, which conform to the Valuation Standards (First Edition 2005) on Valuation of Properties published by the Hong Kong Institute of Surveyors, have been determined by reference to comparable sales evidence and, where appropriate, by capitalisation of net rental income. The revaluation losses have been debited to profit or loss of the respective year, or, in the case of revaluation gains arising on transfer of an item of property, plant and equipment to investment properties following a change in use, to equity directly.

163 162 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report INVESTMENT PROPERTIES (Continued) The fair values of the majorities of investment properties are determined using direct comparison approach assuming sale of each of the properties in its existing state by making reference to comparable sales transactions as available in the relevant market and where appropriate, by capitalizing the net rental income derived from the existing tenancies with due allowance for the reversionary income potential of the respective properties. 24. Valuation Unobservable Techniques input Range Note Investment properties: Mainland China Income Capitalisation Capitalisation rate 5% 9% (i) Approach Average unit market rent RMB28 RMB261 (ii) per month per sq.m per month Direct comparison Average market unit rate RMB53,000 RMB62,000 (ii) approach per sq.m 53,000 62,000 Note: Descriptions of the sensitivity in unobservable inputs and interrelationship: (i) The fair value measurement is negatively correlated to the (i) unobservable input that the lower the factor will result in a higher fair value. (ii) The fair value measurement is positively correlated to the (ii) unobservable input that the higher the factor will result in a higher fair value. As at 31 December 2013, investment properties with a total carrying value of RMB1,671,450,000 (2012: RMB1,331,000,000) were pledged as collateral for the Group s borrowings. 1,671,450,000 1,331,000,000

164 PROPERTIES UNDER DEVELOPMENT RMB 000 RMB 000 Properties under development expected to be completed: within twelve months 2,205,091 2,380,515 beyond twelve months 6,832,762 4,062, RMB 000 RMB 000 Balance at 1 January 6,534,859 11,109,607 Cost capitalised 2,049,947 2,202,474 Transfer to property, plant and equipment (note 20) 20 (10,799) (15,046) Transfer to completed properties held for sale (note 26) 26 (3,409,038) (2,278,183) Transfer to assets classified as held for sale (4,082,159) Acquisition of a subsidiary (note 9) 9 3,931,939 Disposal of a subsidiary (401,834) 9,096,908 6,534,859 Write-down of properties under development: Balance at beginning of period (91,715) (37,912) Reversal/(additions) (note 10) 10 32,660 (207,686) Transfer to assets classified as held for sale 153,883 (59,055) (91,715) Balance at 31 December 9,037,853 6,443,144 Interest capitalisation included in the above: Balance at 1 January 810, ,252 Cost capitalised (note 13) , ,341 Transfer to completed properties held for sale (545,637) (373,572) Transfer to assets classified as held for sale (14,190) Balance at 31 December 392, ,831

165 164 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report PROPERTIES UNDER DEVELOPMENT (Continued) All properties under development are located in the PRC. 25. The weighted average capitalisation rate of borrowings is 8.72% for the year ended 31 December 2013 (2012: 10.10%). 8.72% 10.10% As at 31 December 2013, properties under development of approximately RMB4,689,888,000 (2012: RMB5,153,632,000) were pledged as collateral for the Group s borrowings. 26. COMPLETED PROPERTIES HELD FOR SALE 4,689,888,000 5,153,632, RMB 000 RMB 000 Balance at 1 January 2,811,249 1,576,343 Transfer from properties under development (note 25) 25 3,409,038 2,278,183 Transfer to cost of sales (3,498,975) (1,043,277) Transfer from investment properties (note 24) 24 32,000 2,753,312 2,811,249 Write-down of completed properties held for sale: Balance at 1 January (116,909) (43,234) Additions (note 10) 10 (75,541) (122,079) Transfer to cost of sales 90,666 48,404 (101,784) (116,909) Balance at 31 December 2,651,528 2,694,340 All completed properties held for sale are located in the PRC. As at 31 December 2013, completed properties held for sale of approximately RMB292,754,000 (2012: RMB144,522,000) were pledged as collateral for the Group s borrowings. 292,754, ,522,000

166 INTERESTS IN ASSOCIATES Note RMB 000 RMB 000 Peninsula Waitan (a) 976,815 Shanghai Zhaozhi Shiye Co., Ltd. ( Shanghai Zhaozhi ) (b) 3,509 3,510 3, ,325 (a) Peninsula Waitan (a) RMB 000 RMB 000 Cost of investment 880,678 Share of post-acquisition profits 96, ,815 On 27 August 2013, the Company successfully completed the disposal of 100% equity interests in Delta Link which is the Delta Link 100% legal and beneficial holder of 50% equity interests in Peninsula Delta Link 50% Waitan (note 7(b)). 7(b) (b) Shanghai Zhaozhi (b) RMB 000 RMB 000 Cost of investment 3,633 3,633 Share of post-acquisition losses (124) (123) 3,509 3,510 Shanghai Zhaozhi is 36.33% owned by the Group, and is engaged in development of commercial properties %

167 166 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report INTERESTS IN ASSOCIATES (Continued) (c) Summary financial information on associates that are not individually significant is as follows: 27. (c) RMB 000 RMB 000 Aggregate carrying amount of individually immaterial associates in the consolidated financial statements Aggregate amounts of the Group s share of these associates: 3, ,325 Loss (114,096) (102,252) Other comprehensive income Total comprehensive income (114,096) (102,252) 28. INTERESTS IN JOINT VENTURES Note RMB 000 RMB 000 Hainan Tianyuan Lifeng Shiye Company Limited ( Tianyuan Lifeng ) (a) 654, ,556 Shanghai Qiyu Enterprise Co., Ltd. ( Shanghai Qiyu ) (b) 22, , ,556 (a) Tianyuan Lifeng (a) RMB 000 RMB 000 Cost of investment 758, ,476 Share of post-acquisition losses (104,095) (55,920) 654, ,556 Tianyuan Lifeng is 50.1% owned by the Group, and is mainly engaged in property development in Haikou, Hainan Province, the PRC. 50.1%

168 INTERESTS IN JOINT VENTURES (Continued) (a) Tianyuan Lifeng (Continued) Summary of financial information of Tianyuan Lifeng, adjusted for any differences in accounting policies, and a reconciliation to the carrying amount in the consolidated financial statements, are disclosed below: 28. (a) RMB 000 RMB 000 Gross amounts: Current assets 985, ,208 Non-current assets 3,073,804 2,890,398 Current liabilities (1,241,903) (288,812) Non-current liabilities (1,511,199) (1,437,468) Equity 1,306,168 1,402,326 Included in the above assets and liabilities: Cash and cash equivalents 48, ,090 Current financial liabilities (excluding trade, other payables and advance receipts) (125,561) (175,007) Non-current financial liabilities (excluding trade, other payables and advance receipts) (1,078,474) (756,590) Revenue Loss for the year (96,158) (65,027) Other comprehensive income Total comprehensive income (96,158) (65,027) Dividend received from Tianyuan Lifeng Included in the above loss: Depreciation and amortisation (1,115) (1,109) Finance income Finance expenses (57,072) (62,365) Income tax expense 14,268 15,591

169 168 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report INTERESTS IN JOINT VENTURES (Continued) (a) Tianyuan Lifeng (Continued) 28. (a) RMB 000 RMB 000 Reconciled to the Group s interest in Tianyuan Lifeng Gross amounts of Tianyuan Lifeng s net asset 1,306,168 1,402,326 Group s effective interest 50.1% 50.1% Carrying amount in the Group s consolidated financial statements 654, ,556 (b) Shanghai Qiyu (b) RMB 000 RMB 000 Cost of investment 2,730 Loan 20,000 22,730 Shanghai Qiyu is 54.6% owned by the Group, and is mainly engaged in enterprise management consulting and investment management in Shanghai, the PRC. 54.6% Summary of information of Shanghai Qiyu that is not individually material: RMB 000 RMB 000 The Group s share of Shanghai Qiyu s profit N/A Other comprehensive income N/A Total comprehensive income N/A

170 INVESTMENTS IN SUBSIDIARIES RMB 000 RMB 000 Unlisted shares, at cost 8,302,046 4,118,431 Cumulative fair value of share options granted to employees of subsidiaries 20,687 20,687 Cumulative fair value of restricted shares granted to employees of subsidiaries 16,075 4,329 8,338,808 4,143,447 The Company s major operating subsidiaries are as follows: Percentage of equity attributable to the Company Name of company Place and date of incorporation Direct Indirect Registered capital Principal activities % % SPG Investment Ltd. British Virgin Islands, 100% USD1 Investment holding 2 March Shanghai Cambridge (Group) Co., Ltd. the PRC, 98.24% USD67,670,000 Property development, 25 August ,670,000 sales and lease Shanghai SPG Property Service Co., Ltd. the PRC, 98.42% RMB5,000,000 Property management 17 January ,000,000 services Shanghai SPG Hotel Development Co., Ltd. the PRC, 98.24% RMB405,500,000 Hotel operation, property 1 December ,500,000 development, sales and lease

171 170 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report INVESTMENTS IN SUBSIDIARIES (Continued) 29. Percentage of equity attributable to the Company Name of company Place and date of incorporation Direct Indirect Registered capital Principal activities % % Shanghai Sipo Education Development Co., Ltd. the PRC, 65.96% RMB70,000,000 Investment holding ( Sipo Education ) 9 October ,000,000 Shanghai Sipo Polytechnic. the PRC, 65.96% RMB5,000,000 College education 15 April ,000,000 Shanghai Sipo Vocational Technical Training the PRC, 65.96% RMB200,000 Technical training and Centre 14 October ,000 technology consultancy Shanghai Oriental Cambridge Property the PRC, 100% RMB650,000,000 Property development, Development Co., Ltd. 26 September ,000,000 sales and lease Shanghai Lishui Greenery Ecology Engineering the PRC, 100% RMB10,000,000 Landscape construction Co., Ltd. 7 November ,000,000 project Shanghai Zhujia Cambridge Property the PRC, 100% RMB280,000,000 Property development Development Co., Ltd. 24 September ,000,000 and sales Huangshan SPG Property Development Co., Ltd. the PRC, 100% RMB120,000,000 Hotel development and 7 January ,000,000 operation

172 INVESTMENTS IN SUBSIDIARIES (Continued) 29. Percentage of equity attributable to the Company Name of company Place and date of incorporation Direct Indirect Registered capital Principal activities % % Huangshan Hiddentigger Club Management the PRC, 100% RMB1,000,000 Property management Co., Ltd. 7 July ,000,000 services Kunming SPG Land Development Co., Ltd. the PRC, 100% RMB142,500,000 Property development, 9 November ,500,000 sales and lease Kunming SPG Grand City Development Co., Ltd the PRC, 15 June % USD40,000,000 40,000,000 Property development, sales and lease Suzhou Runjian Property Co., Ltd. the PRC, 100% RMB550,000,000 Property development, 28 September ,000,000 sales and lease Suzhou SPG Property Management Co., Ltd. the PRC, 100% RMB500,000 Hotel operations, property 5 March ,000 management services Suzhou Runjian Property Management Co., Ltd. the PRC, 8 December % RMB500, ,000 Property management services Wuxi Guosheng Property Development Co., Ltd. the PRC, 2 November % HKD776,530, ,530,000 Property development, sales and lease

173 172 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report INVESTMENTS IN SUBSIDIARIES (Continued) 29. Percentage of equity attributable to the Company Name of company Place and date of incorporation Direct Indirect Registered capital Principal activities % % Wuxi Shenglian Property Development Co., Ltd. the PRC, 2 November % HKD805,000, ,000,000 Property development, sales and lease Hainan Jianqiao Property Co. Ltd. the PRC, 100% RMB115,000,000 Property development, 4 January ,000,000 sales and lease Hainan Jianqiao Property Management Co., the PRC, 98.42% RMB1,000,000 Property management Ltd. 4 January ,000,000 services Hubei Huazhong Constructing Co., Ltd. the PRC, 100% RMB100,000,000 Construction and 21 May ,000,000 decoration services Changshu SPG Land Development Co., Ltd. the PRC, 100% RMB200,000,000 Property development, 12 July ,000,000 sales and lease Changshu SPG Real Estate Development Co., the PRC, 100% RMB350,000,000 Property development, Ltd. 24 October ,000,000 sales and lease Shanxi SPG Land Development Co., Ltd. the PRC, 100% USD20,000,000 Property development, 27 August ,000,000 sales and lease

174 INVESTMENTS IN SUBSIDIARIES (Continued) 29. Percentage of equity attributable to the Company Name of company Place and date of incorporation Direct Indirect Registered capital Principal activities % % Ningbo SPG Cicheng Property the PRC, 100% RMB230,000,000 Property development, Development Co., Ltd. 21 March ,000,000 sales and lease Hangzhou Tuojiang Zhiye Co., Ltd. the PRC, 50% USD582,000,000 Property development, 22 July ,000,000 sales and lease All these entities are controlled subsidiaries as defined under note 3(a)(i) and have been consolidated into the consolidated financial statements. 3(a)(i)

175 174 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report INVESTMENTS IN SUBSIDIARIES (Continued) As the Trust (as mentioned in note 3(p)(ii)) is set up solely for the purpose of purchasing, administrating and holding the shares of the Company for the Share Award Scheme, the Group has the power over the Trust, has rights to variable returns from its involvement with the Trust and has the ability to use its power over the Trust to affect the returns. Hence, the Group can control the Trust. The assets and liabilities of the Trust are included in the Group s consolidated balance and the shares of the Company held by the Trust are presented as a deduction in equity as Shares held for Share Award Scheme (note 41) (p)(ii) 41 The following table lists out the information relating to Hangzhou Tuojiang Zhiye Co., Ltd., the subsidiary of the Group which has material non-controlling interest ( NCI ). The summarised financial information presented below represents the amounts before any intercompany elimination RMB 000 NCI Percentage 50% Current assets 4,499 Non-current assets 3,935,446 Current liabilities (3,801,379) Non-current liabilities (33,750) Net assets 104,816 Carrying amount of NCI 52,408 Revenue Loss for the year (1,853) Total comprehensive income 18,866 Allocated to NCI 9,433 Cash flows from operating activities (20,760) Cash flows from investing activities 54 Cash flows from financing activities

176 TRADE, OTHER RECEIVABLES AND ADVANCE DEPOSITS 30. Group Company RMB 000 RMB 000 RMB 000 RMB 000 Receivables due from related parties: Subsidiaries 423, ,000 Other related parties (note 48(d)) 48(d) 38, , , , , ,030 Trade receivables due from third parties 25,889 31,759 Advance payments to contractors 66, ,966 Advance deposits for acquisition of land use rights 2,873, ,925 Non-trade receivables 793,317 1,056,417 Tax prepayments 165, ,631 Total 3,964,698 2,230, , ,030 The receivables due from related parties are unsecured, non-interest bearing and repayable on demand. Non-trade receivable balances, deposits and advances to third parties are expected to be settled or recovered within one year. Tax prepayments mainly represent prepayment of business tax, land appreciation tax and income tax during the pre-sale stage of certain properties.

177 176 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report TRADE, OTHER RECEIVABLES AND ADVANCE DEPOSITS (Continued) The ageing analysis of trade receivables at each balance sheet date is as follows: 30. Group RMB 000 RMB 000 Within 90 days 90 25,586 31,559 Over 90 days and within 180 days Over 180 days and within 365 days ,889 31, LONG-TERM RECEIVABLE 31. Term Initial Cost RMB 000 RMB 000 RMB 000 Long-term receivable (note 48(d)) Less: Long-term receivable due within 1 year Long-term receivable due after 1 year 48(d) 10 years 1,300, , ,597 (125,561) (175,007) 673, ,590

178 LONG-TERM RECEIVABLE (Continued) The amount is repayable as follows: RMB 000 RMB 000 Within 1 year 125, ,007 Over 1 year and within 2 years 113, ,237 Over 2 years and within 5 years 292, ,289 After 5 years 268, , , ,597 Long-term receivable represents shareholders loan provided to Tianyuan Lifeng. The amount is non-interest bearing and repayable in 10 annual instalments of RMB130,000,000 each, starting from 11 June 2012 as deferred. Interest income of RMB57,072,000 (note 13) was recognised in relation to the long-term receivable during the year (2012: RMB62,364,000). 32. RESTRICTED CASH ,000,000 57,072, ,364, Group RMB 000 RMB 000 For property construction and development 97, ,568 As pledge for interest-bearing loans and bank acceptance notes (note 35(ii)) 35(ii) 618, ,700 Others 34, , ,697

179 178 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report CASH AND CASH EQUIVALENTS An analysis of the balance of cash and cash equivalents is set out below: 33. Group Company RMB 000 RMB 000 RMB 000 RMB 000 Cash at bank and cash in hand 1,671,730 1,649, Less: restricted cash (note 32) 32 (749,693) (832,697) 922, , Cash at bank and cash in hand is denominated in: RMB 1,537,079 1,573, United States Dollars ( USD ) 35,383 59, Australian Dollars ( AUD ) 8 7 Hong Kong Dollars ( HKD ) 99,260 16, ,671,730 1,649, RMB is not a freely convertible currency and the remittance of funds out of the PRC is subject to exchange restrictions imposed by the PRC government.

180 TAX PAYABLE/DEFERRED TAX ASSETS/ (LIABILITIES) (i) Current taxation in the consolidated balance sheets represents: 34. (i) RMB 000 RMB 000 PRC income tax Balance brought forward 283, ,413 Provision for PRC enterprise income tax for the year (note 14(i)) 14(i) 154,679 77,070 PRC income tax paid (320,721) (108,225) Transfer to liabilities associated with assets classified as held for sale (570) Balance carried forward 117, ,688 PRC land appreciation tax Balance brought forward 903, ,821 Provision for PRC land appreciation tax for the year (note 14(ii)) 14(ii) 253, ,687 PRC land appreciation tax paid (358,644) (127,383) Transfer to liabilities associated with assets classified as held for sale (671) Balance carried forward 798, ,454 Total 916,405 1,187,142

181 180 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report TAX PAYABLE/DEFERRED TAX ASSETS/ (LIABILITIES) (Continued) (ii) Deferred tax assets recognised: The components of deferred tax assets recognised in the consolidated balance sheets and the movements during the year ended 31 December 2013 were as follows: 34. (ii) Temporary difference on revenue recognition and related cost of sales Deferred land appreciation tax and other accruals Tax losses Total RMB 000 RMB 000 RMB 000 RMB 000 At 1 January , ,364 27, ,806 Additions 22,417 29,208 62, ,691 Realisation (48,526) (35,437) (11,154) (95,117) At 31 December , ,135 78, ,380 Additions 6,459 2,922 66,815 76,196 Realisation (43,038) (56,374) (61,038) (160,450) At 31 December , ,683 84, ,126

182 TAX PAYABLE/DEFERRED TAX ASSETS/ (LIABILITIES) (Continued) (ii) Deferred tax assets recognised: (Continued) As at 31 December 2013, the Group had unused tax losses of RMB1,222,976,000 (2012: RMB930,168,000) available to offset against future profits. Deferred tax assets have been recognised in respect of the tax losses of RMB336,088,000 (2012: RMB312,980,000) at the applicable income tax rates of the respective subsidiaries as at 31 December No deferred tax assets have been recognised in respect of the remaining tax losses of RMB886,888,000 (2012: RMB617,188,000) because management is of the view that it is not probable that the individual subsidiaries concerned can generate profits to utilise the tax losses before the tax losses become expired. The unrecognised tax losses for the year ended 31 December 2013 will expire in the following years ending 31 December: 34. (ii) 1,222,976, ,168, ,088, ,980, ,888, ,188, RMB 000 RMB , ,095 3, ,000 52, , , , , , , ,188

183 182 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report TAX PAYABLE/DEFERRED TAX ASSETS/ (LIABILITIES) (Continued) (iii) Deferred tax liabilities recognised: The components of deferred tax liabilities recognised in the consolidated balance sheets and the movements during the year ended 31 December 2013 were as follows: 34. (iii) Revaluation of investment properties Fair value adjustments Total RMB 000 RMB 000 RMB 000 At 1 January , , ,323 Additions 9,913 4,084 13,997 Realisation (24,576) (24,576) At 31 December , , ,744 Acquisition of a subsidiary (note 9) 9 33,750 33,750 Additions 5,210 5,210 Realisation (7,688) (7,235) (14,923) At 31 December , , ,781 (iv) Net-off of deferred tax assets/deferred tax liabilities: (iv) RMB 000 RMB 000 Deferred tax assets recognised 279, ,380 Net-off with deferred tax liabilities (66,244) (122,809) Deferred tax assets 212, ,571 Deferred tax liabilities recognised 425, ,744 Net-off with deferred tax assets (66,244) (122,809) Deferred tax liabilities 359, ,935

184 INTEREST-BEARING LOANS RMB 000 RMB 000 Current Secured bank loans 586, ,451 Secured trust loans 250, ,000 Unsecured loans 100, ,000 Current portion of non-current secured bank loans 538,844 1,342,739 Current portion of non-current secured trust loans 250,000 1,261,000 1,725,007 3,873,190 Non-current Secured bank loans 1,980,683 2,823,561 Secured trust loans 250,000 1,511,000 Less: current portion of non-current secured bank loans (538,844) (1,342,739) current portion of non-current secured trust loans (250,000) (1,261,000) 1,441,839 1,730,822 As at 31 December 2013, the Group s secured loans were secured by the following: (i) the Group s properties with a total carrying amount of RMB7,431,510,000 (2012: RMB7,407,097,000) (notes 20, 24, 25 and 26); (i) 7,431,510,000 7,407,097, (ii) pledged time deposits of RMB618,050,000 (2012: RMB642,700,000); (ii) 618,050, ,700,000 (iii) charges over equity interests of certain subsidiaries of the (iii) Group.

185 184 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report INTEREST-BEARING LOANS (Continued) The Group s non-current loans were repayable as follows: RMB 000 RMB 000 Within 1 year 788,844 2,603,739 Over 1 year but less than 2 years 556, ,000 Over 2 years but less than 5 years 619, ,822 Over 5 years 266, ,000 2,230,683 4,334,561 The effective interest rate of the year ended 31 December 2013 was as follows: Bank loans 6.88% 6.63% Trust loans 8.75% 13.40%

186 TRADE, OTHER PAYABLES AND ADVANCE RECEIPTS 36. Group Company RMB 000 RMB 000 RMB 000 RMB 000 Payables due to related parties: Non-trade related: Dividends payable (note 48(d)) 48(d) 9,173 9,173 Subsidiaries 729, ,677 Other related parties (note 48(d)) 48(d) 2,515,962 11,897 2,525,135 21, , ,677 Trade payables 1,694,952 2,083,819 Advance receipts from customers 1,615,665 3,818,063 Other taxes payable 153,567 23,102 Dividends payable Unpaid land cost 891, ,221 Non-trade payables and accrued expenses 444, ,896 66,346 39,056 Total 7,325,317 7,207, , ,896 The payables due to related parties are unsecured, non-interest bearing and repayable on demand. The ageing analysis of trade payables at each balance sheet date is as follows: Group RMB 000 RMB 000 Within 90 days , ,453 Over 90 days and within 180 days , ,651 Over 180 days and within 365 days , ,961 Over 365 days and within 3 years , ,754 1,694,952 2,083,819

187 186 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report LONG-TERM PAYABLE 37. Group Term Initial Cost RMB 000 RMB 000 RMB 000 Long-term payable 15 years 58,453 39,935 43,067 Less: Long-term payable due within 1 year (6,000) (6,000) Long-term payable due after 1 year 33,935 37,067 The amount is repayable as follows: Group RMB 000 RMB 000 Within 1 year 6,000 6,000 Over 1 year and within 2 years 5,682 5,682 Over 2 years and within 5 years 15,296 15,296 After 5 years 12,957 16,089 39,935 43,067 Long-term payable represents construction cost payable to a contractor. The amount is non-interest bearing and repayable in 15 annual instalments of RMB6,000,000 each, starting from 1 September ,000,000

188 LONG-TERM PAYABLE (Continued) 37. Company RMB 000 RMB 000 Due to subsidiaries 428, ,025 Long-term payable represents amounts due to certain subsidiaries. The payable is interest bearing and repayable over one year but within two years. 38. SENIOR NOTES On 8 April 2011, the Company issued 13.5% senior notes due 2016 (the Notes ) with an aggregated nominal value of USD200,000,000 at a value equal to % of the face value. The Notes are listed on the Singapore Exchange Securities Trading Limited. The Notes carry interest at the rate of 13.5% per annum, payable semi-annually on 8 April and 8 October in arrears, and will mature on 8 April 2016, unless redeemed earlier % 200,000, The Company exercised its option to redeem all outstanding Notes in full on 11 November 2013 at the redemption price of USD226,016,000, or USD1, for each USD1,000 of Notes. A loss on the redemption amounting to RMB271,577,000 was recognised in the consolidated statement of comprehensive income for the year. 226,016,000 1,000 1, ,577,000 Upon completion of the redemption, the Notes were cancelled and delisted from the Singapore Exchange Securities Trading Limited.

189 188 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report SENIOR NOTES (Continued) The movements of different components of senior notes are set out below: 38. Call option Liability component of the Company Total RMB 000 RMB 000 RMB 000 As at 31 December ,270,928 1,270,928 Interests and issue cost amortised during the year 181, ,072 Interest paid during the year (176,145) (176,145) Exchange gain (3,199) (3,199) Change in fair value As at 31 December ,272,656 1,272,656 Interests and issue cost amortised during the year 150, ,405 Interests paid during the year (167,730) (167,730) Exchange gain (27,474) (27,474) Change in fair value (note 13) 13 (111,922) (111,922) Redeemed in full (1,227,857) 111,922 (1,115,935) As at 11 November 2013 and 31 December 2013 Represented by: 31 December 2013 RMB December 2012 RMB 000 Other payables accrued interests 39,056 Senior notes 1,233,600 Total 1,272,656

190 BONDS On 18 October 2013, the Company issued 4.75% bonds due 2016 (the Bonds ) with an aggregated nominal value of USD700,000,000 at a value equal to % of the face value. The Bonds are listed on the Stock Exchange of Hong Kong Limited. The Bonds carry interest at the rate of 4.75% per annum, payable semi-annually on 18 April and 18 October in arrears, and will mature on 18 October 2016, unless redeemed earlier. The net proceeds, after deducting the direct issuance costs, amounted to approximately USD692,424,000 (equivalent to RMB4,249,546,000). The Bonds have the benefit of a keepwell deed from Greenland Holding Group Company Limited, the ultimate controlling shareholder of the Company % 700,000, ,424,000 4,249,546,000 The Bonds embedded certain options as below: (i) The issuer s redemption option (redemption option No. 1) (i) 1 The Company may at any time redeem the Bonds, in whole but not in part, at a redemption price equal to the Make Whole Price as of, and accrued and unpaid interest, if any, to (but excluding), the redemption date. Make Whole Price means, with respect to a Bond at any redemption date, the amount calculated is the greater of (1) the present value of the principal amount of such Bond, plus all required remaining scheduled interest payments due on such Bond from the optional redemption date to the maturity date (but excluding accrued and unpaid interest to the option redemption date), computed using a discount rate, which the rate per annum equal to the semi-annual equivalent yield in maturity of the comparable treasury issue plus 0.5 per cent, and (2) the principal amount of such Bonds. (1) 0.5% (2) (ii) The issuer s redemption option for taxation reason (redemption option No. 2) The Bonds may be redeemed at the option of the Company in whole, but not in part, at any time, at their principal amount (together with any interest accrued to the date fixed for redemption) in the event of certain changes affecting taxes of a relevant jurisdiction. (ii) 2

191 190 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report BONDS (Continued) (iii) The holder s redemption option (redemption option No. 3) Following the occurrence of a Put Event, the holder of any Bonds will have the right, at such holder s option, to require the Issuer to redeem all, but not some only, of such holder s Bonds on the Put Event Put Date at 101% of their principal amount, together with accrued interest to the Put Event Put Date. 39. (iii) 3 101% A Put Event will be deemed to occur if: (1) there is a change of control, and (1) (2) within a period ending six months after the date notice of the change of control first becomes public (which period shall be extended so long as the Bonds are under consideration (as publicly announced within such six month period) for a possible rating downgrade), a rating downgrade occurs. (2) The redemption option No.1 held by the Company is separately accounted for at fair value at the initial recognition date and each reporting date as derivative financial instruments in accordance with the accounting policy set out in note 3(c)(iii) to the financial statements. 1 3(c) (iii) The exercise price of both redemption option No. 2 held by the Company and the redemption option No. 3 held by the bondholder is approximately equal to the amortised cost of the host contract. Hence, the redemption options No. 2 and No. 3 have risks and characteristics that are closely related to those of the host contract and are not separated from the host contract

192 BONDS (Continued) The movements of different components of Bonds are set out below: 39. Call options Liability component of the Company Total RMB 000 RMB 000 RMB 000 Net proceeds from bonds issued on 18 October ,249,546 4,249,546 Interests and issue cost amortised during the year 47,562 47,562 Exchange gain (27,905) (27,905) Change in fair value As at 31 December ,269,203 4,269,203 Represented by: 31 December 2013 RMB 000 Other payables accrued interests 44,609 Bonds 4,224,594 Total 4,269,203 Liability component of the Bonds represents the contractually determined stream of future cash flows discounted at the rate of interest determined by the market instruments of comparable credit status taken into account the business risk and financial risk of the Company. The effective interest rate of the liability component is 5.142% per annum for the year ended 31 December % At 31 December 2013, the liability component of the Bonds was repayable as follows: Represented by: 31 December 2013 RMB 000 After two years but within five years 4,224,594

193 192 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report EMPLOYEE RETIREMENT BENEFITS As stipulated by the regulations of the PRC, the Group participates in various defined contribution retirement plans organised by municipal and provincial government authorities for its employees. The Group is required to make contributions to the retirement plans at rates ranging from 20% to 22% of the salaries, wages, bonuses and certain allowances of the employees. The local government authorities are responsible for the entire pension obligations payable to retired employees % 22% The Group has no other obligations for the payment of pension benefits associated with those schemes and other post-retirement benefits beyond the annual contributions described above. 41. SHARE-BASED PAYMENTS Share award scheme The Company adopted a share award scheme (the Share Award Scheme ) on 3 December The purpose of the Share Award Scheme is to recognise and reward the contribution of the executives and employees (whether serving full-time or part-time) and directors of the Group to the growth and development of the Group through an award of the shares of the Company. Details of the Share Award Scheme were set out in the Company s 2012 annual report. 41. On 2 April 2013, the Board of Directors approved to grant 16,103,000 shares of the Company to the eligible participants, of which 400,000 shares were granted to a director and 2,000,000 shares were granted to four independent non-executive directors (500,000 shares each) respectively. The shares granted to the independent non-executive directors were vested immediately. The vesting date of the remaining newly granted shares is 31 March ,103, ,000 2,000, ,000 During the year ended 31 December 2013, certain employees resigned from the Group and 5,257,000 granted shares were forfeited. 5,257,000

194 SHARE-BASED PAYMENTS (Continued) Share award scheme (Continued) Movements in the number of shares held for the Share Award Scheme for the year ended 31 December 2013 are as follows: 41. Shares held for the Share Award Scheme (thousand) Awarded shares (thousand) Outstanding as of 1 January ,584 Purchased 11,504 Granted (i) (i) (21,911) 21,911 Forfeited 4,682 (4,682) Outstanding as of 31 December ,859 17,229 Purchased (note 42(f)) 42(f) 2,500 Granted (i) (i) (16,103) 16,103 Vested (2,000) Forfeited 5,257 (5,257) Outstanding as of 31 December ,513 26,075 (i) The weighted average fair value of the awarded shares was calculated based on the market prices of the Company s ordinary shares at the respective grant dates. (i) During the year ended 31 December 2013, an expense of RMB19.5 million (2012: RMB5.5 million) in relation to share-based payments is charged to administrative expenses in profit or loss. 19,500,000 5,500,000

195 194 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report SHARE CAPITAL 42. The Group and the Company No. of shares Amount No. of shares Amount (thousand) HKD 000 (thousand) HKD 000 Authorised: Ordinary shares of HKD0.1 each ,000,000 1,000,000 Ordinary shares of HKD0.5 each 0.5 7,000,000 3,500,000 7,000,000 3,500,000 10,000,000 1,000,000 Convertible preferred shares of HKD0.5 each 0.5 3,000,000 1,500,000 Total 10,000,000 5,000,000 10,000,000 1,000,000 The Group and the Company No. of shares Amount No. of shares Amount (thousand) RMB 000 (thousand) RMB 000 Ordinary shares, issued and fully paid: At 1 January 1,051, ,591 1,051, ,591 Bonus issue 1,233,455 98,134 Share consolidation (1,827,667) Subscription of shares 685, ,574 At 31 December 1,142, ,299 1,051, ,591 Convertible preference shares, issued and fully paid: At 1 January Bonus issue 2,971, ,377 Share consolidation (2,376,847) Subscription of shares 891, ,478 At 31 December 1,485, ,855 Total at 31 December 2,627,821 1,068,154 1,051, ,591

196 SHARE CAPITAL (Continued) (a) Authorised and issued share capital Ordinary shares The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at any general meetings of the Company. All ordinary shares rank equally with regard to the Company s residual assets. Convertible preference shares ( CPS ) The holders of CPS will not have the right to attend and vote at a general meeting (except for the windingup of the Company or for any resolution to vary or abrogate the rights or privileges of such holder or vary the restrictions to which the CPS are subject). The conversion period is any time after issue, provided that the conversion right will be suspended to the extent that it would result in the Company failing to comply with the public float requirement. Each CPS (at the option of the holder) will be convertible at any time (and without payment of any additional consideration) to ordinary shares on a one to one basis. Each CPS will confer on the holder thereof the right to receive dividend pari passu with holders of ordinary shares on the basis of the number of ordinary shares into which each CPS may be converted and on an as converted basis. On a distribution of assets on liquidation, winding up or a dissolution of the Company, the assets and funds of the Company available for distribution: (a) will first be paid to the holders of CPS pari passu among themselves in respect of the aggregate nominal amounts paid up on the CPS held by them; and (b) the remaining assets will be distributed pari passu to the holders of any class of shares (including the CPS). The CPS will be transferable without any restriction by the holders thereof. The CPS will be non-redeemable. No application will be made for the listing of the CPS on the Stock Exchange or any other stock exchange. 42. (a) (a) (b) (b) Change in authorised share capital On 5 August 2013, the extraordinary general meeting of the Company passed an ordinary resolution to increase the authorised share capital of the Company to HKD5,000,000,000 by the creation of an additional 25,000,000,000 ordinary shares and 15,000,000,000 CPS. Immediately after the increase of share capital, the authorised share capital of the Company is HKD5,000,000,000 divided into 35,000,000,000 ordinary shares of HK$0.1 each and 15,000,000,000 CPS of HKD0.1 each. (b) 25,000,000,000 15,000,000,000 5,000,000,000 5,000,000,000 35,000,000, ,000,000,

197 196 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report SHARE CAPITAL (Continued) (c) Bonus issue On 5 August 2013, the extraordinary general meeting of the Company passed an ordinary resolution to issue bonus shares (the Bonus Issue ) by way of capitalisation of an amount in the Company s share premium account. The Bonus Issue represents issue of new shares (the Bonus Shares ) on the basis of four bonus shares for every ordinary share held by the qualified shareholders on the bonus record date. Each qualified shareholder has the option to elect to receive ordinary shares and/or CPSs for all or part of its entitlement to bonus shares under the Bonus Issue. Each ordinary share entitles its holder to receive four bonus shares as bonus ordinary share and/ or bonus CPS at the holder s election. Upon completion of the Bonus Issue, the number of ordinary shares in issue increased from 1,051,128,275 ordinary shares to 2,284,582,851 ordinary shares. The number of CPSs in issue increased to 2,971,058,524 CPSs. 42. (c) 1,051,128,275 2,284,582,851 2,971,058,524 (d) Share consolidation On 5 August 2013, the extraordinary general meeting of the Company passed an ordinary resolution to consolidate every five ordinary shares or five CPSs with a nominal value of HKD0.10 each into one ordinary share or one CPS with a nominal value of HKD0.50 each. Upon completion of the consolidation, the number of ordinary shares in issue was reduced from 2,284,582,851 ordinary shares to 456,916,569 ordinary shares. The number of CPSs in issue was reduced from 2,971,058,524 CPS to 594,211,704 CPS. (d) ,284,582, ,916,569 2,971,058, ,211,704 (e) Share subscription On 27 August 2013, the subscription of share of the Company by GXIL was successfully completed. The Subscribed Shares represent approximately 60% of the entire issued share capital of the Company and approximately 60% of the voting rights of the Company as enlarged by the Subscribed Shares. The Company issued and GXIL subscribed for, 685,374,853 ordinary shares and 891,317,556 CPSs, at a price of HKD1.90 per share. The amount of proceeds from the subscription is approximately HKD2,940 million (equivalent to RMB2,333 million) after deduction of expenses. (e) 60% 60% 685,374, ,317, ,940,000,000 2,333,000,000

198 SHARE CAPITAL (Continued) (f) Shares held for Share Award Scheme During the year, the Share Award Scheme (note 41) acquired 2,500,000 shares (2012: 11,504,000 shares) of the Company through purchases on the open market. The total amount paid to acquire the shares during the year was RMB6,377,000 (2012: RMB13,596,000). 43. SHARE PREMIUM AND RESERVES (a) The Company 42. (f) 41 2,500,000 11,504,000 6,377,000 13,596, (a) Undistributable capital reserve Capital Employee Share premium redemption reserve Contributed surplus share-based compensation Accumulated losses Total RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 (note (b)) (note (c)) (note (i)) (note 41) (b) (c) (i) 41 At 1 January ,069,086 1, ,439 (16,225) 2,362,531 Equity-settled share-based transactions 5,472 5,472 Loss for the year (197,477) (197,477) At 31 December ,069,086 1, ,439 5,472 (213,702) 2,170,526 Equity-settled share-based transactions (note 41) 41 19,525 19,525 Shares allotted for Share Award Scheme (4,482) (4,482) Bonus Issue (note 42(c)) 42(c) (334,511) (334,511) Subscription of shares (note 42(e)) 42(e) 1,705,694 1,705,694 Special dividend (ii) (ii) (1,077,283) (1,077,283) Loss for the year (232,984) (232,984) At 31 December ,362,986 1, ,439 20,515 (446,686) 2,246,485 Note (i): The excess of the consolidated net assets represented by (i) the shares of the subsidiaries acquired over nominal value of the shares issued by the Company in exchange under the Reorganisation was transferred to the contributed surplus account in the Company s financial statements. Note (ii): According to the resolution, the special dividend was paid (ii) out of share premium account of the Company.

199 198 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report SHARE PREMIUM AND RESERVES (Continued) (b) Share premium The application of the share premium account is governed by the Companies Law of the Cayman Islands. Under the Companies Law of the Cayman Islands (2007 Revision), the funds in the share premium account of the Company are distributable to the shareholders of the Company provided that immediately following the date on which the dividend is proposed to be distributed, the Company will be in a position to pay off its debts as they fall due in the ordinary course of the business. 43. (b) (c) Capital redemption reserve Capital redemption reserve represents the nominal value of the shares repurchased which has been paid out of the Company s distributable reserves. (c) (d) Merger reserves The merger reserves represent the difference between the Company s share of the nominal value of the paid-up capital of the subsidiaries acquired over the nominal value of the ordinary shares issued by the Company. (d) (e) Revaluation reserve The revaluation reserve relates to property reclassified from owner-occupied to investment properties. For such reclassifications, the cumulative increase in the fair value of the property at the date of reclassification in excess of any previous impairment losses is included in the revaluation reserve. (e)

200 SHARE PREMIUM AND RESERVES (Continued) (f) PRC statutory reserves Transfers from retained earnings to PRC statutory reserves were made in accordance with the relevant PRC rules and regulations and the articles of association of the Company s subsidiaries incorporated in the PRC and were approved by the respective boards of directors. The statutory reserves consist of: 43. (f) (i) General reserve fund Transfers from retained earnings to the general reserve fund were made in accordance with the articles of association of the Company s subsidiaries and were approved by the respective boards of directors. (i) For the entity concerned, the general reserve fund can be used to cover previous years losses, if any, and may be converted into capital in proportion to equity holders existing equity holdings, provided that the balance after such conversion is not less than 25% of their registered capital. 25% (ii) Enterprise expansion fund Transfers from retained earnings to the enterprise expansion fund were made in accordance with the articles of association of the Company s subsidiaries and were approved by the respective boards of directors. (ii) For the entity concerned, the enterprise expansion fund can be used for business development purposes and for working capital purpose. This fund is non-distributable other than upon liquidation. Transfers to this fund must be made before distribution of dividends to the equity holders. (g) Translation reserve The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations. The reserve is dealt with in accordance with the accounting policy set out in note 3(b)(ii). (g) 3(b)(ii)

201 200 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report SHARE PREMIUM AND RESERVES (Continued) (h) Distributable reserve As at 31 December 2013 the aggregate amount of reserves available for distribution to equity shareholders of the Company was RMB2,225,970,000 (2012: RMB2,165,054,000). 43. (h) 2,225,970,000 2,165,054,000 (i) Capital management The Group s primary objective in managing capital is to safeguard the Group s ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders, by pricing products and services commensurate with the level of risks and by securing access to finance at a reasonable cost. (i) Consistent with industry practice, the Group monitors its capital structure on the basis of a net debt-to-adjusted-equity ratio. For this purpose the Group defines net debt as total debt (including interest-bearing loans, senior notes, long-term payable, trade, other payables and advance receipts) plus unaccrued proposed dividends, less cash and cash equivalents and restricted cash. Adjusted capital comprises all components of equity less unaccrued proposed dividends. The net debt-to-adjusted-equity ratio as at 31 December 2013 was 229% (2012: 289%). There were no changes in the Group s approach to capital management during the year. 229% 289% The Company is not subject to externally imposed capital requirements.

202 FINANCIAL GUARANTEES As at the balance sheet date, the Group has issued the following guarantees: 44. (a) The Group has arranged mortgage loan facilities for certain purchasers of property units and provided financial guarantees to secure obligations of such purchasers for repayments. The outstanding guarantees amounted to RMB506,948,000 as at 31 December 2013 (2012: RMB1,402,427,000). Such guarantees terminate upon the earlier of (i) the issuance of the real estate ownership certificate which will generally be available within six months after the buyer takes possession of the relevant properties; and (ii) the satisfaction of the mortgaged loan by the buyer of the properties. (a) 506,948,000 1,402,427,000 (i) (ii) (b) The Group has also pledged its own properties under development as collateral for borrowings of Wuxi Guolian Development (Group) Co., Ltd ( Guolian ). The maximum liability of the Group at the balance sheet date under such guarantee issued is the outstanding amount of the loans of RMB135,000,000 (2012: RMB135,000,000). (b) 135,000, ,000,000 In the opinion of directors of the Company, the fair values of the financial guarantee contracts of the Group are insignificant at initial recognition and the directors consider the possibility of default by the parties involved to be remote. Accordingly, no value has been recognised in the balance sheet as at 31 December FINANCIAL INSTRUMENTS The Group conducts its operations in the PRC and accordingly is subject to special considerations and significant risks. These include risks associated with, among others, the political, economic and legal environment, influence of national authorities over pricing regulation and competition in the industry. 45.

203 202 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report FINANCIAL INSTRUMENTS (Continued) The Group has exposure to the following risks from its use of financial instruments: 45. credit risk liquidity risk market risk (including interest rate risk and currency risk) This note presents information about the Group s exposure to each of the above risks, and the Group s objectives, policies and processes for measuring and managing risk. Management has overall responsibility for the establishment and oversight of the Group s risk management framework. Management establishes policies to identify and analyse the risks faced by the Group, to set up appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group s activities. Through training and management standards and procedures, management aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations. (a) Credit risk Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group s trade and other receivables and investments. (a) The Group s management has a credit policy in place and exposure to credit risk is monitored on an ongoing basis. The Group s credit risk is primarily attributable to trade, other receivables and advance deposits. In respect of trade and other receivables, individual credit evaluations are performed on each new customer. The Group s review includes external ratings, when available, and in some cases bank references. These evaluations focus on the customer s liquidity to make payments when due and current ability to pay, and take into account information specific to the customer as well as pertaining to the economic environment in which the customer operates. Customers are generally required to transact with the Group on a prepayment basis. The Group generally offers no credit terms to customers and does not usually obtain collateral from customers.

204 FINANCIAL INSTRUMENTS (Continued) (a) Credit risk (Continued) The Group s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The default risk of the industry and country in which customers operate also has influences on credit risk, but to a lesser extent. At the balance sheet date, the Group had a certain concentration of credit at 72% (2012: 22%) of the total trade, other receivables and advance deposits arising from the Group s deposits for land acquisition. These deposits will be transferred to the cost of properties under development upon the Group obtaining the relevant land use rights. 45. (a) 72% 22% The maximum exposure to credit risk is represented by the carrying amount of each financial asset, including derivative financial instruments, in the balance sheet after deducting any impairment allowance. Except for the financial guarantees given by the Group as set out in note 44, the Group does not provide any other guarantees which would expose the Group or the Company to credit risk. The maximum exposure to credit risk in respect of these financial guarantees at the balance sheet date is disclosed in note Further quantitative disclosures in respect of the Group s exposure to credit risk arising from trade, other receivables and advance deposits are set out in note Cash and cash equivalents and restricted cash are placed with a group of banks and financial institutions which management considers have good credit ratings. Investments are normally only in liquid securities quoted on a recognised stock exchange and management does not expect any investment counterparty to fail to meet its obligations.

205 204 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report FINANCIAL INSTRUMENTS (Continued) (b) Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group s policy is to regularly monitor its liquidity requirements and its compliance with lending covenants, to ensure that it maintains sufficient reserves of cash and adequate committed lines of funding from banks to meet its liquidity requirements in the short and longer term. 45. (b) The following table details the remaining contractual maturities at the balance sheet of the Group s non-derivative financial liabilities, which are based on contractual undiscounted cash flows (including interest payments computed using contractual rates or, if floating, based on rates current at the balance sheet date) and the earliest date the Group can be required to pay: 31 December 2013 Carrying amount Undiscounted contractual cash flow Within 1 year or on demand Within 2 years but over 1 year Within 5 years but over 2 years Over 5 years RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 Trade, other payables and advance receipts excluding advance receipts from customers and other taxes payable 5,556,085 (5,556,085) (5,348,071) (208,014) Unsecured interest-bearing loans 100,000 (105,633) (105,633) Secured interest-bearing loans 3,066,846 (3,437,999) (1,809,617) (632,336) (712,846) (283,200) Bonds 4,224,594 (4,875,996) (202,722) (202,722) (4,470,552) Long-term payable 39,935 (54,000) (6,000) (6,000) (18,000) (24,000) 12,987,460 (14,029,713) (7,472,043) (1,049,072) (5,201,398) (307,200) Financial guarantees issued: Maximum amount guaranteed (note 44) 44 (641,948) (641,948)

206 FINANCIAL INSTRUMENTS (Continued) (b) Liquidity risk (Continued) 45. (b) 31 December 2012 Carrying amount Undiscounted contractual cash flow Within 1 year or on demand Within 2 years but over 1 year Within 5 years but over 2 years Over 5 years RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 Trade, other payables and advance receipts excluding advance receipts from customers and other taxes payable 3,366,169 (3,366,169) (2,900,415) (465,754) Unsecured interest-bearing loans 250,000 (262,370) (262,370) Secured interest-bearing loans 5,354,012 (5,635,531) (3,654,740) (890,442) (768,104) (322,245) Senior notes 1,233,600 (1,980,912) (169,709) (169,709) (1,641,494) Long-term payable 43,067 (60,000) (6,000) (6,000) (18,000) (30,000) 10,246,848 (11,304,982) (6,993,234) (1,531,905) (2,427,598) (352,245) Financial guarantees issued: Maximum amount guaranteed (3,337,427) (3,337,427) (c) Interest rate risk The Group s interest rate risk arises primarily from interestbearing loans, interest rate swaps, cash and cash equivalents and restricted cash. (c) Cash and cash equivalents and restricted cash comprise mainly cash at bank, with an interest rate of 0.35% per annum as at 31 December 2013 (2012: 0.35% per annum) Pledged bank deposits and time deposits maturing after three 0.35 months are not held for speculative purposes but are placed to satisfy conditions for borrowing facilities granted to the Group and for higher yield returns than cash at bank. The Group s variable rate borrowings are exposed to a risk of change in cash flows due to changes in interest rates. The interest rates and terms of repayment of the interest-bearing loans, senior notes and bonds are disclosed in notes 35, and 39.

207 206 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report FINANCIAL INSTRUMENTS (Continued) (c) Interest rate risk (Continued) The Group manages the net exposure to interest rate risks by maintaining sufficient lines of credit to obtain acceptable lending costs and by monitoring the exposure to such risks on an ongoing basis. When appropriate and at times of interest rate uncertainty or volatility, interest rate swaps may be used to assist in the Group s management of interest rate exposure. 45. (c) (i) Interest rate profile The following table details the interest rate profile of the Group s interest-bearing borrowings at the balance sheet (i) date: Effective interest rate Effective interest rate % RMB 000 % RMB 000 Fixed rate borrowings Secured interestbearing loans 10.04% 683, % 2,007,979 Unsecured interestbearing loans 10.25% 100, % 250,000 Senior notes % 1,233,600 Bonds 5.142% 4,224,594 5,008,393 3,491,579 Variable rate borrowings Secured interestbearing loans 6.38% 2,383, % 3,346,033 Total borrowings 7,391,440 6,837,612 Fixed rate borrowings as a percentage of total borrowings 68% 51%

208 FINANCIAL INSTRUMENTS (Continued) (c) Interest rate risk (Continued) (ii) Sensitivity analysis The Group does not account for any fixed rate financial assets and liabilities at fair value through profit or loss. Therefore, a change in interest rates at the reporting date would not affect profit or loss. A change of 100 basis points in interest rates applicable to variable rate instruments at the reporting date would have increased/(decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant. The analysis is performed on the same basis as in (c) (ii) 100 Profit or (loss) 100 bp 100 bp increase decrease Equity 100 bp increase 100 bp decrease RMB 000 RMB 000 RMB 000 RMB December 2013 Variable rate instruments (17,873) 17,873 (17,873) 17, December 2012 Variable rate instruments (25,095) 25,095 (25,095) 25,095 (d) Currency risk RMB is not freely convertible into foreign currencies. All foreign exchange transactions involving RMB must take place through the People s Bank of China or other institutions authorised to buy and sell foreign exchange. The exchange rates adopted for the foreign exchange transactions are the rates of exchange quoted by the People s Bank of China and are determined largely by supply and demand. (d) The Group is exposed to foreign currency risk primarily through borrowings, bonds and senior notes that are denominated in a currency other than the functional currency of the operations to which they relate. The currencies in which these transactions primarily are denominated are HKD and USD. In respect of the monetary assets and liabilities denominated in foreign currencies, the Group ensures that the net exposures to this risk is kept to an acceptable level by buying or selling foreign currencies at spot rates where necessary to address short-term imbalances. Management does not enter into currency hedging transactions since it considers that the cost of such instruments outweighs the potential risk of exchange rate fluctuations.

209 208 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report FINANCIAL INSTRUMENTS (Continued) (d) Currency risk (Continued) (i) Exposure to currency risk The following table details the Group s exposure at the balance sheet date to currency risk arising from recognised assets or liabilities denominated in a currency other than the functional currency of the entity based on notional amounts. 45. (d) (i) 31 December 2013 HKD USD Trade, other receivables and advance deposits 1,095 Cash and cash equivalents 82,249 5,803 Restricted cash 43,999 Bonds (692,909) Trade, other payables and advance receipts (12,791) (10,816) Interest-bearing borrowings (80,625) Overall exposure 114,552 (778,547) 31 December 2012 HKD USD Trade, other receivables and advance deposits 530 7,131 Cash and cash equivalents 20,096 9,487 Restricted cash 529 Senior notes (196,261) Financial derivatives (1,096) Trade, other payables and advance receipts (2,624) (6,220) Interest-bearing borrowings (312,871) (66,100) Overall exposure (295,436) (251,963)

210 FINANCIAL INSTRUMENTS (Continued) (d) Currency risk (Continued) (i) Exposure to currency risk (Continued) The following significant exchange rates applied during the year: 45. (d) (i) Average rates Reporting date spot rate HKD USD (ii) Sensitivity analysis The following table indicates the approximate change in the Group s profit and other components of consolidated equity in response to a 5% strengthening of the RMB against the foreign currencies to which the Group had exposure at the balance sheet date. This analysis assumes that the reasonably possible change in foreign exchange rates had occurred at the balance sheet date and had been applied to each for the Group entities exposure to currency risk for financial instruments in existence at that date, and that all other variables, in (ii) 5% particular interest rates, remain constant. The analysis is performed on the same basis for Profit or (loss) RMB 000 RMB 000 HKD (3,377) 8,983 USD 178,002 59,390 A 5% weakening of the RMB against the above currencies at 31 December would have had the equal but opposite effect on the above currencies to the amounts shown above, on the basis that all other variables remain constant. 5%

211 210 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report FINANCIAL INSTRUMENTS (Continued) (e) Fair values (i) Financial instruments carried at fair value The following table presents the fair value of the Group s financial instruments measured at the end of the reporting period on a recurring basis, categorised into the three-level fair value hierarchy as defined in IFRS 13, Fair value measurement. The level into which a fair value measurement is classified is determined with reference to the observability and significance of the inputs used in the valuation technique as follows: Level 1 valuations: Fair value measured using only Level 1 inputs i.e. unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date. Level 2 valuations: Fair value measured using Level 2 inputs i.e. observable inputs which fail to meet Level 1, and not using significant unobservable inputs. Unobservable inputs are inputs for which market data are not available. Level 3 valuations: Fair value measured using significant unobservable inputs (e) (i) 13 The Group Level 1 Level 2 Level 3 Total RMB 000 RMB 000 RMB 000 RMB 000 Assets Financial derivatives The Company Level 1 Level 2 Level 3 Total RMB 000 RMB 000 RMB 000 RMB 000 Assets Financial derivatives

212 FINANCIAL INSTRUMENTS (Continued) (e) Fair values (Continued) (i) Financial instruments carried at fair value (Continued) 45. (e) (i) 2012 The Group Level 1 Level 2 Level 3 Total RMB 000 RMB 000 RMB 000 RMB 000 Assets Equity securities held for trading Other available-for-sale investment 16,436 16,436 99,000 99,000 16,436 99, ,436 Liabilities Financial derivatives The Company Level 1 Level 2 Level 3 Total RMB 000 RMB 000 RMB 000 RMB 000 Assets Financial derivatives During the year there were no significant transfers between instruments in Level 1 and Level 2.

213 212 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report FINANCIAL INSTRUMENTS (Continued) (e) Fair values (Continued) (i) Financial instruments carried at fair value (Continued) The following table gives information about fair value measurements using significant unobservable inputs (Level 3). 45. (e) (i) Significant Relationship of unobservable unobservable inputs to Valuation inputs fair value Type techniques Range The Company s Discounted cash Credit spread 3.52% to 13.47% The higher the credit spread, redemption option embedded in Senior notes flow 3.52% 13.47% the lower the option value The Company s Discounted cash Credit spread 3.52% to 3.68% The higher the credit spread, redemption option embedded in Bonds flow 3.52% 3.68% the lower the option value The movements of the balances of financial instruments measured at fair value classified in Level 3 are as follows: The Company s redemption option embedded in Bonds RMB 000 The Company s redemption option embedded in Senior Notes RMB 000 As at 1 January 2013 Change in fair value 111,922 Derecognised upon redemption (111,922) As at 31 December 2013

214 FINANCIAL INSTRUMENTS (Continued) (e) Fair values (Continued) (ii) Fair values of financial instruments carried at other than fair value The fair values of financial instruments carried at cost or amortised cost as at 31 December 2013 and 2012, together with the carrying amounts shown in the consolidated balance sheet, are as follows: 45. (e) (ii) Carrying amount Fair value Carrying amount Fair value RMB 000 RMB 000 RMB 000 RMB 000 Long-term receivable 799, , , ,597 Available-for-sale financial assets 15,432 15,432 Entrust loans 70,000 70,000 Trade, other receivables and advance deposits excluding tax prepayments 3,798,925 3,798,925 1,880,204 1,880,204 Restricted cash 749, , , ,697 Cash and cash equivalents 922, , , ,836 Trade, other payables and advance receipts excluding advance receipts from customers and other taxes payable (5,556,085) (5,556,085) (3,366,169) (3,366,169) Interest-bearing loans (3,166,846) (3,166,846) (5,604,012) (5,604,012) Long-term payable (39,935) (39,935) (43,067) (43,067) Bonds (4,224,594) (4,224,594) Senior notes (1,233,600) (1,233,600)

215 214 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report FINANCIAL INSTRUMENTS (Continued) (f) Estimation of fair values Fair value estimates are made at a specific point in time and based on relevant market information and information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates. The following methods and assumptions were used to estimate the fair value for each class of financial instruments: 45. (f) (i) Cash and cash equivalents, restricted cash, trade, other receivables and advance deposits and trade, other payables and advance receipts The carrying values approximate fair value because of the short maturities of these instruments. (i) (ii) Equity securities held for trading Fair value is based on quoted market prices at the balance sheet date without any deduction for transaction costs. (ii) (iii) Interest-bearing loans The carrying amounts of interest-bearing loans approximate their fair value based on the borrowing rate currently available for interest-bearing loans with similar terms and maturity. (iii) (iv) Long-term receivable and long-term payable The fair values of long-term receivable and long-term payable are estimated as the present value of future cash flows, discounted at the market rate of interest at the reporting date. (iv) (v) Derivative financial instruments An external independent valuation company, with appropriate recognised professional qualifications, values the Company s senior notes and bonds at each balance sheet date. Appropriate valuation methods and assumptions with reference to market conditions existing at each balance sheet date to determine the fair value of the embedded financial derivative of the senior notes and bonds that is separated from the host debt contract are adopted. (v) The Group relies on the valuations provided by financial institutions to determine the fair values of the interest rate swaps based on the discounted cash flow analysis using the applicable yield curve over the duration of the instruments. Judgment is required for the variables used in arriving at these fair values.

216 FINANCIAL INSTRUMENTS (Continued) (f) Estimation of fair values (Continued) (vi) Financial guarantees The fair value of financial guarantees issued is determined by reference to fees charged in arms length transaction for similar services, when such information is obtainable, or is otherwise estimated by reference to interest rate differentials, by comparing the actual rates charged by lenders when the guarantee is made available with the estimated rates that lenders would have charged, had the guarantees not been available, where reliable estimates of such information can be made. The basis for determining the fair value is disclosed in note (f) (vi) 44 (vii) Interest rates used for determining fair value The interest rates used to discount estimated cash flows, when applicable, are based on the government yield curve at the reporting date plus an adequate credit spread, and were as follows: (vii) Long-term receivable 7.13% 7.13% Long-term payable 6.90% 6.90% Interest-bearing loans 2.58% 13.50% 3.15% 17.00% Senior notes % Bonds 5.142% 46. OPERATING LEASE COMMITMENTS (i) Leases as lessee Non-cancellable operating lease rentals are payable as follows: 46. (i) RMB 000 RMB 000 Less than one year 29,227 46,374 Between one and five years 21,544 Total 29,227 67,918 The leases, in respect of office rental charges, run for a period within five years.

217 216 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report OPERATING LEASE COMMITMENTS (Continued) (ii) Leases as lessor The Group leases out its properties, which include investment properties and completed properties held for sale leased out on a temporary basis, under operating leases. The future minimum lease payments under non-cancellable leases are as follows: 46. (ii) RMB 000 RMB 000 Less than one year 51,645 57,259 Between one and five years 166, ,813 More than five years 176, ,087 Total 395, ,159 For the year ended 31 December 2013, RMB59,366,000 (2012: RMB50,528,000) was recognised as rental income in respect of investment properties in profit or loss. 47. CAPITAL COMMITMENTS ,366,000 50,528, RMB 000 RMB 000 Property development activities: Contracted but not provided for 7,735, ,054 Authorised but not contracted for 2,722,895 2,141,343 Total 10,458,779 2,693,397

218 RELATED-PARTY TRANSACTIONS Particulars of significant transactions between the Group and certain related parties in which a director or shareholder of the Company is in a position to exercise significant influence are as follows: 48. (a) During the year ended 31 December 2013, transactions with the following parties were considered as related-party transactions: Name of party (a) Relationship Greenland Holding Ultimate controlling shareholder of the Company since 27 August 2013, Mr. Wang Weixian Honorary Chairman of the Company; Substantial shareholder of the Company Shanghai ZhongXin Asset Management Co., Ltd. An associate of the Group until 12 December 2012 ( Shanghai ZhongXin ) Shenzhen Huibo Investment Development Company A minority equity holder of Sipo Education Limited ( Huibo ) Peninsula Shanghai (BVI) Ltd. ( Peninsula BVI ) An associate of the Group until 27 August 2013 Peninsula Waitan An associate of the Group until 27 August 2013 Shanghai Greenland Group (Taicang) Property Co., Ltd. A subsidiary controlled by Greenland Holding ( Greenland Taicang ) Shanghai Greenland Baoli Property Co., Ltd. A subsidiary controlled by Greenland Holding ( Greenland Baoli ) Shanghai Greenland Construction Engineering Co., Ltd. A subsidiary controlled by Greenland Holding ( Greenland Construction ) VWIL A subsidiary controlled by Greenland Holding Tianyuan Lifeng Group Jointly controlled group of companies of the Group Wuxi Taihu Xincheng Real Estate Development Co., Ltd. ( Taihu Xincheng ) A minority equity holder of Wuxi Xindu which was disposed of on 4 January 2013 Xu Fu Co. Limited ( Xu Fu ) A minority equity holder of Xu Bao BVI BVI CIFI Holdings (Group) Co. Ltd. ( CIFI ) Ultimate controlling shareholder of Xu Fu Shanghai Zhaozhi An associate of the Group

219 218 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report RELATED-PARTY TRANSACTIONS (Continued) (b) Non-recurring transaction During 2013, the Group acquired Xu Bao BVI and its subsidiaries from VWIL, which is a subsidiary of Greenland Holding. For details, please refer to note 9(i). 48. (b) BVI 9(i) (c) Recurring transactions (c) RMB 000 RMB 000 Receipt of accommodation services: Peninsula Waitan 2,657 2,175 Provision of entrust loan: Peninsula Waitan 50,000 Receipt of shareholder s loan: Xu Fu 1,300,770 Financing income: Peninsula Waitan 1,206 2,266 Financing expenses: Huibo 309 2,859 Receipt of leasing service: Shanghai ZhongXin 2,277 The directors of the Company are of the opinion that the above related-party transactions were conducted on normal commercial terms and were priced with reference to prevailing market prices, and in the ordinary course of business.

220 RELATED-PARTY TRANSACTIONS (Continued) (d) Balances with related parties As at 31 December, the Group had the following balances with related parties: 48. (d) RMB 000 RMB 000 Receivables due from related parties (note 30): 30 Trade balances due from related parties: Greenland Taicang 7,037 Greenland Baoli 4,446 Greenland Construction 830 Non-trade balances due from related parties: Peninsula Waitan 3,175 Mr. Wang Weixian and the companies controlled by Mr. Wang Weixian Tianyuan Lifeng Group 94,338 Shanghai Zhaozhi 26,465 26,465 38, ,137 Long-term receivable due from related parties (note 31): 31 Tianyuan Lifeng Group 799, , ,124 1,045,734 Non-trade balances due to related parties (note 36): 36 Mr. Wang Weixian and the companies controlled by Mr. Wang Weixian dividends payable 9,173 9,173 other payables 4,051 4,206 Huibo 6,691 7,691 Tianyuan Lifeng Group 650,173 VWIL 445,010 Xu Fu 1,300,770 CIFI 59,267 Greenland Holding 50,000 2,525,135 21,070

221 220 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report RELATED-PARTY TRANSACTIONS (Continued) (d) Balances with related parties (Continued) Trade and non-trade balances due from/to related parties are unsecured, interest-free and repayable on demand. 48. (d) RMB 000 RMB 000 Total liabilities associated with assets classified as held for sale: Taihu Xincheng 2,522,273 As at 31 December 2012, the assets and liabilities of Wuxi Xindu are classified as held for sale, including non-trade balance due to Taihu Xincheng RMB 000 RMB 000 Other investments entrust loans: Peninsula Waitan 50,000 (e) Key management personnel remuneration Remuneration for key management personnel, including amounts paid to the Company s directors as disclosed in note 15 and five of the highest paid to employees as disclosed in note 16, was as follows: (e) RMB 000 RMB 000 Salaries and other emoluments 25,221 19,313

222 POST BALANCE SHEET EVENTS (i) Dividends Pursuant to a resolution passed at the Board of Directors meeting held on 12 March 2014, it was resolved that dividends of HKD 0.05 per ordinary share and HKD 0.05 per convertible preference share were proposed for the year ended 31 December (i) (ii) Acquisition of land use rights and disposal of equity interests in a subsidiary On 11 December 2013, the Group, through its wholly-owned subsidiary, True Thrive Investments Limited, successfully won the bid for the land use rights of parcels of land located in Huangpu District, Shanghai, the PRC, at a total consideration of RMB5,950 million. On 14 January 2014, China Resources Land Limited whose shares are listed on the Hong Kong Stock Exchange ( China Resources ) and the Group entered into a cooperation agreement (the Cooperation Agreement ). Pursuant to the Cooperation Agreement, a wholly-owned subsidiary of China Resources would subscribe while Prosper Spring Investments Limited ( Prosper Spring ), the parent company of True Thrive, will issue one new ordinary share at the subscription price of USD1.00, representing 50% of the issued share capital as enlarged by the subscription. Upon completion of the subscription, the Group will own 50% equity interests in Prosper Spring and Prosper Spring will be a joint venture to the Group. Up to the date of this report, the subscription has been completed. (ii) True Thrive Investments Limited 5,950,000,000 True Thrive Prosper Spring Investments LimitedProsper Spring 50%1.00 Prosper Spring 50%Prosper Spring (iii) Issuance of bonds On 23 January 2014, the Company issued 5.50% bonds due 2018 (the 2014 Bonds ) with an aggregated nominal value of RMB1,500,000,000 at the face value. The 2014 Bonds are listed on the Hong Kong Stock Exchange. The 2014 Bonds carry interest at the rate of 5.5% per annum, payable semi-annually on 23 January and 23 July in arrears, and will mature on 23 January 2018, unless redeemed earlier. (iv) Facility agreement On 29 January 2014, Xu Bao (HK) Co. Limited ( Xu Bao ), the subsidiary of Xu Bao BVI, entered into facility agreements (the Facility Agreements ) with a group of financial institutions (the Lenders ). The loan facilities subject to the Facility Agreements represent: a) United States dollar tranche with an aggregate amount of USD225 million; b) Hong Kong dollar tranche with an aggregate amount of HKD741 million; and c) a facility amount of RMB1 billion. The final maturities of these facilities are three years from the date of the first utilization of each individual facility. (iii) 1,500,000, (iv) BVI a 225,000,000b) 741,000,000 c10

223 222 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report 2013 SUMMARY OF CONSOLIDATED FINANCIAL INFORMATION CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Year ended 31 December 2013 Year ended 31 December 2012 Year ended 31 December 2011 Year ended 31 December 2010 Year ended 31 December 2009 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 Revenue 5,447,768 1,766,535 5,677,523 4,271,189 3,065,441 Cost of sales (4,001,353) (1,361,577) (3,738,880) (3,003,983) (2,151,003) Gross profit 1,446, ,958 1,938,643 1,267, ,438 Other income 63,515 17, ,310 3,423 5,020 Selling and marketing costs (87,532) (94,615) (105,203) (150,186) (116,507) Administrative expenses (329,707) (316,483) (368,856) (260,446) (154,183) Other operating expenses (344,454) (571,114) (109,372) (24,005) (4,994) Net gain on acquisition of a jointly controlled entity 149,911 Net gain on disposal of equity interest in subsidiaries 214, ,499 Net gain on repurchase of convertible bonds 17,248 49,394 Results from operating activities 962,591 (425,064) 1,524,522 1,003, ,168 Finance income 99,057 99,003 38, ,851 16,914 Finance expenses (415,331) (277,226) (67,483) (61,982) (86,771) Fair value changes on financial derivatives 112, (25,209) (20,123) 50,263 Net finance (expenses)/income (203,462) (177,371) (53,755) 25,746 (19,594) Share of (losses)/profits of associates (114,096) (102,252) (68,639) 281,792 66,645 Share of losses of jointly controlled entity (48,175) (32,579) (3,333) (20,008) (Loss)/Profit before revaluation gains on investment properties and income tax Revaluation (losses)/gains on investment properties 596,858 (737,266) 1,398,795 1,290, ,219 (80,539) (65,490) (28,844) 229, ,254 (Loss)/Profit before income tax 516,319 (802,756) 1,369,951 1,519,884 1,257,473 Income tax expense (483,169) (185,604) (486,631) (618,278) (427,726) Total comprehensive income for the year 33,150 (988,360) 883, , ,747 Total comprehensive income attributable to: Equity holders of the Company 34,513 (938,248) 898, , ,520 Minority interests (1,363) (50,112) (15,000) 11, ,227 Total comprehensive income for the year 33,150 (988,360) 883, , ,747 (Loss)/Earnings per share Basic earnings per share (RMB) 0.02 (0.92) Diluted earnings per share (RMB) 0.02 (0.92)

224 223 SUMMARY OF CONSOLIDATED FINANCIAL INFORMATION (Continued) CONSOLIDATED BALANCE SHEETS 31 December December December December December 2009 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 Assets Property, plant and equipment 922, ,388 1,004, , ,144 Intangible assets 1,476 1,521 1,566 1,610 1,655 Land use rights 74,953 76,826 78,699 81,732 74,192 Other investment 2,800 35,432 14,032 13,032 13,032 Properties under development 6,832,762 4,062,629 6,618,792 3,600,904 4,235,962 Investment properties 1,719,000 1,758,000 1,651,000 1,948,000 1,640,500 Investments in associates 3, ,325 1,194,608 1,263, ,822 Interests in a jointly controlled entity 677, , , ,468 Long-term receivable 673, , , ,186 Financial derivatives ,491 Deferred tax assets 212, , , , ,969 Total non-current assets 11,121,099 9,563,838 12,323,558 9,505,657 7,455,767 Properties under development 2,205,091 2,380,515 4,452,903 4,921,467 2,963,347 Completed properties held for sale 2,651,528 2,694,340 1,533, , ,635 Other investments 165,436 10,824 16,115 1,228 Trade, other receivables and advance deposits 3,964,698 2,230,835 2,439,436 3,270, ,878 Long-term receivable with one year 125, , , ,486 Restricted cash 749, ,697 1,307,467 1,985,536 2,408,748 Cash and cash equivalents 922, ,836 1,645,026 1,514,439 3,038,945 Assets classified as held for sale 4,193,626 Total current assets 10,618,608 13,489,292 11,514,251 12,338,532 9,512,781 Total assets 21,739,707 23,053,130 23,837,809 21,844,189 16,968,548 Equity Share capital 1,068, , , , ,347 Share premium 2,362,986 2,069,086 2,069,086 2,069,086 2,071,330 Reserves 833, , , , ,498 Retained earnings 1,355,871 1,312,056 2,258,044 1,499, ,426 Total equity attributable to equity holders of the Company 5,620,184 4,278,299 5,224,714 4,418,664 3,762,601 Minority interests 86,889 31,273 81, , ,924 Total equity 5,707,073 4,309,572 5,306,099 4,526,918 4,106,525

225 224 GREENLAND HONG KONG HOLDINGS LIMITED Annual Report 2013 SUMMARY OF CONSOLIDATED FINANCIAL INFORMATION (Continued) CONSOLIDATED BALANCE SHEETS (Continued) 31 December December December December December 2009 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 Liabilities Interest bearing loans 1,725,007 3,873,190 2,077,615 1,534,694 2,135,747 Trade, other payables and advance receipts 7,325,317 7,207,334 9,512,430 10,162,183 5,592,876 Tax payable 916,405 1,187,142 1,209, , ,663 Long-term payable within one year 6,000 6,000 6,000 6,000 6,000 Total liabilities associated with assets classified as held for sale 3,188,578 Total current liabilities 9,972,729 15,462,244 12,805,279 12,582,808 8,301,286 Interest bearing loans 1,441,839 1,730,822 4,174,690 4,347,386 3,151,292 Long-term payable 33,935 37,067 39,997 42,738 45,301 Convertible bonds 902,642 Financial derivatives 890 1,742 Senior notes 4,224,594 1,233,600 1,231,418 Deferred tax liabilities 359, , , , ,502 Total non-current liabilities 6,059,905 3,281,314 5,726,431 4,734,463 4,560,737 Total liabilities 16,032,634 18,743,558 18,531,710 17,317,271 12,862,023 Total equity and liabilities 21,739,707 23,053,130 23,837,809 21,844,189 16,968,548 Net current assets/(liabilities) 645,879 (1,972,952) (1,291,028) (244,276) 1,211,495 Total assets less current liabilities 11,766,978 7,590,886 11,032,530 9,408,735 8,667,262

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