Sunac China Holdings Limited - Proxy Solicitation & Information Statement 2012

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your licensed securities dealer or registered institution in securities, bank manager, solicitor, professional accountant or other professional adviser for independent advice.

If you have sold or transferred all your shares in Sunac China Holdings Limited, you should at once hand this circular to the purchaser(s) or transferee(s) or to the bank, licensed securities dealer or registered institution in securities or other agent through whom the sale or transfer was effected for transmission to the purchaser(s) or transferee(s).

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

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CONNECTED AND MAJOR TRANSACTIONS

FORMATION OF JOINT VENTURE

AND

ACQUISITION OF PROPERTY PROJECT COMPANIES

Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders

A letter from the Board is set out on pages 5 to 18 of this circular. A letter from the Independent Board Committee is set out on page 19 of this circular. A letter from Quam Capital is set out on pages 20 to 36 of this circular.

30 October 2012

			Page
Definitions . . . . . .		. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			5
Letter from the Independent Board Committee. . . . . . . . . . . . . . . . . . . . . . . . . . .			19
Letter from Quam		Capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	20
Appendix I	–	Financial Information of the Group . . . . . . . . . . . . . . . . . . .	I-1
Appendix II	–	Accountant’s Report on the Target Companies No. 1 to
		No. 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	II-1
Appendix III	–	Accountant’s Report on the Target Company No. 9. . . . . . .	III-1
Appendix IV	–	Management Discussion and Analysis of the Target
		Companies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	IV-1
Appendix V	–	Unaudited Pro Forma Financial Information of the
		Enlarged Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	V-1
Appendix VI	–	Valuation Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	VI-1
Appendix VII	–	Reconciliation of Valuation on the Properties
		with their Carrying Values. . . . . . . . . . . . . . . . . . . . . . . . .	VII-1
Appendix VIII	–	General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	VIII-1

– i –

DEFINITIONS

In this circular, the following expressions shall have the meanings set out below unless the context requires otherwise:

“Acquisition” the acquisition of Equity Interests 1 to 9 by the JV Company or Sunac Zhidi (as the case may be) pursuant to the terms of the Framework Agreement
“Board” the board of directors of the Company
“Company” Sunac China Holdings Limited (融創中國控股有限公司), a company incorporated under the laws of the Cayman Islands with limited liability and whose shares are listed on the Stock Exchange (stock code: 1918)
“connected person(s)” shall have the meaning ascribed to it under the Listing Rules
“Consideration” an aggregate amount of RMB3,357,936,201 (after adjustment) payable by Sunac Zhidi in cash in respect of the Transactions
“Directors” the directors of the Company
“DTZ”
DTZ Debenham Tie Leung Limited, the independent property valuer of the Company
“EGM”
an extraordinary general meeting of the Company to be held to approve the Transactions if the Written Approval Waiver is not granted
“Enlarged Group” the Group as enlarged by the Acquisition
“Equity Interests”

the equity interests in Target Companies No. 1 to No. 9 held by Greentown Real Estate which would be acquired by the JV Company or Sunac Zhidi (as the case may be) pursuant to the terms of the Framework Agreement, details of which are set out in the paragraphs headed “Acquisition of nine Target Companies” and “Information on the Target Companies” in the “Letter from the Board” in this circular, and “Equity Interests 1 to 9” shall be construed as the respective equity interest in Target Companies No. 1 to No. 9

– 1 –

DEFINITIONS

“Framework Agreement” the cooperative framework agreement dated 22 June 2012 entered into between Sunac Zhidi and Greentown Real Estate in relation to, among others, the formation of the JV Company and the Acquisition

“GDP” gross domestic product
“GFA” gross floor area
“Greentown China” 綠城中國控股有限公司 (Greentown China Holdings Limited*), a company incorporated under the laws of the Cayman Islands with limited liability and whose shares are listed on the Stock Exchange (stock code: 3900)
“Greentown Real Estate” 綠城房地產集團有限公司 (Greentown Real Estate Group Co., Ltd.*), a company established in the PRC and an indirect wholly owned subsidiary of Greentown China
“Group” the Company and its subsidiaries
“Hubin Real Estate” 無錫綠城湖濱置業有限公司 (Wuxi Greentown Hubin Real Estate Co., Ltd.*), a company established in the PRC owned as to 51% by Sunac Zhidi and 49% by Greentown Real Estate
“Independent Board Committee”
an independent committee of the Board to be formed to advise the Independent Shareholders in respect of the Transactions
“Independent Shareholders”
Shareholders who are not prohibited from voting if general meeting were to be convened to approve the Transactions under the Listing Rules
“JV Company” or “Shanghai Sunac Greentown”
上海融創綠城房地產開發有限公司 (Shanghai Sunac Greentown Real Estate Development Co., Ltd.*) an equity joint venture enterprise established in the PRC by Sunac Zhidi and Greentown Real Estate in equal shares pursuant to the Framework Agreement
“JV Target Group”

Target Companies Nos. 1 to 8, being the Target Companies to be acquired by the JV Company pursuant to the Framework Agreement

“Latest Practicable Date”

25 October 2012, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein

– 2 –

DEFINITIONS

“Listing Rules” The Rules Governing the Listing of Securities on the Stock Exchange “Percentage Ratios” any of the five ratios set out in Rule 14.07 of the Listing Rules “PRC” the People’s Republic of China (excluding, for the purpose of this circular, the Hong Kong Special Administrative Region of the PRC, the Macao Special Administrative Region of the PRC and Taiwan) “Quam Capital” or “Independent Quam Capital Limited, a licensed corporation to carry out Financial Adviser” type 6 (advising on corporate finance) regulated activity under the SFO, being the independent financial adviser to the Independent Board Committee and the Independent Shareholders in relation to the Transactions “RMB” Renminbi, the lawful currency of the PRC “Share(s)” ordinary share(s) of HK$0.10 each in the share capital of the Company “Shareholders” shareholders of the Company “sq.m.” square meter(s) “Stock Exchange” The Stock Exchange of Hong Kong Limited “Sunac International” Sunac International Investment Holdings Ltd, the controlling Shareholder which is interested in approximately 51.69% of the issued share capital of the Company as at the Latest Practicable Date “Sunac Zhidi” 天津融創置地有限公司 (Tianjin Sunac Zhidi Co, Ltd.*), a company established under the laws of the PRC, which is an indirect wholly-owned subsidiary of the Company “Target Companies” Target Companies No. 1 to No. 9 to be acquired by Sunac Zhidi or the JV Company (as the case may be) from Greentown Real Estate pursuant to the terms of the Framework Agreement, details of which are set out in the paragraphs headed “Acquisition of the Target Companies” and “Information on the Target Companies” in this circular and reference to the relevant numbered Target Company in this circular shall be construed accordingly

– 3 –

DEFINITIONS

“Transactions”

“Woods Golf”

“Woods Golf Group”

“Written Approval Waiver”

the transactions contemplated under the Framework Agreement including but not limited to the proposed formation of the JV Company

上海綠城森林高爾夫𡋾墅開發有限公司 (Shanghai Greentown Woods Golf Villas Development Co., Ltd.*), or Target Company No. 9, of which Sunac Zhidi has agreed to acquire 50% equity interest

Woods Golf and its subsidiaries

the waiver from the requirement to hold a shareholders’ meeting of the Company to approve the Transactions and the acceptance of Sunac International’s written approval as Independent Shareholders’ approval in lieu of holding a general meeting pursuant to Rules 14A.43 and 14A.53 of the Listing Rules

* For identification purpose only

– 4 –

LETTER FROM THE BOARD

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Executive Directors: Mr. SUN Hongbin Mr. WANG Mengde Mr. LI Shaozhong Mr. CHI Xun Mr. SHANG Yu Mr. JING Hong

Registered office: Landmark Square 3rd Floor 64 Earth Close P.O. Box 30592 Grand Cayman KY1-1203 Cayman Islands

Non-executive Directors: Ms. HU Xiaoling Mr. ZHU Jia

Independent Non-executive Directors: Mr. POON Chiu Kwok Mr. LI Qin Mr. MA Lishan

Principal place of business in Hong Kong: 8th Floor, Gloucester Tower The Landmark 15 Queen’s Road Central Hong Kong

30 October 2012

To the Shareholders,

Dear Sir or Madam,

CONNECTED AND MAJOR TRANSACTIONS

FORMATION OF JOINT VENTURE

AND

ACQUISITION OF PROPERTY PROJECT COMPANIES

INTRODUCTION

Reference is made to the announcement of the Company dated 22 June 2012 in relation to the Acquisition.

The purpose of this circular is, inter alia, (i) to provide you with further information relating to the Acquisition, the Framework Agreement and the transactions contemplated thereunder; and (ii) to set out the opinions and recommendations of the Independent Board Committee and Quam Capital.

– 5 –

LETTER FROM THE BOARD

THE ACQUISITION

On 22 June 2012, Sunac Zhidi (a wholly-owned subsidiary of the Company) entered into the Framework Agreement with Greentown Real Estate (an indirect wholly-owned subsidiary of Greentown China), major terms of which are set out below.

FRAMEWORK AGREEMENT

Date

22 June 2012

Parties

(i) Sunac Zhidi (a wholly-owned subsidiary of the Company)
(ii) Greentown Real Estate (an indirect wholly-owned subsidiary of Greentown China)

Greentown Real Estate currently holds 49% equity interest in Hubin Real Estate, a non-wholly owned subsidiary of the Company. Greentown Real Estate is therefore a connected person of the Company.

Subject Matter

(1) Sunac Zhidi conditionally agreed to acquire, and Greentown Real Estate conditionally agreed to dispose of, an effective 50% interest in Equity Interests 1 to 8 by way of (i) the establishment of the JV Company to be owned as to 50% by Sunac Zhidi and 50% by Greentown Real Estate; and (ii) the acquisition of Equity Interests 1 to 8 by the JV Company from Greentown Real Estate; and
(2) upon formation of the JV Company, Sunac Zhidi conditionally agreed to acquire, and Greentown Real Estate conditionally agreed to dispose of, an effective 50% interest in Target Company No. 9.

Save for Target Company No. 6, Target Company No. 7 and Target Company No. 9 which would be accounted for as associated companies of the Company, all the other six Target Companies and the JV Company would be accounted for as subsidiaries of the Company upon completion of the Transactions.

The aggregate consideration (after adjustment) payable by Sunac Zhidi is RMB3,357,936,201.

Effective date of the Framework Agreement

The Framework Agreement will take effect upon the Company and Greentown China having obtained the requisite respective shareholders’ approval (as required under the Listing Rules) to the Framework Agreement and the Transactions.

– 6 –

LETTER FROM THE BOARD

Formation of the JV Company

Pursuant to the terms of the Framework Agreement, the JV Company will be established with an initial registered capital of RMB2 billion, which will be contributed in cash by Sunac Zhidi and Greentown Real Estate as to RMB1 billion and RMB1 billion, respectively. The name of the JV Company shall be 上海融創綠城房地產開發有限公司 (Shanghai Sunac Greentown Real Estate Development Co. Ltd.*).

Upon completion of the aforesaid capital contribution, the JV Company will be owned by Sunac Zhidi and Greentown Real Estate in equal shares and will be accounted for as a subsidiary of the Company.

Board composition and management of JV Company

The board of directors of the JV Company will consist of five directors, three of whom will be nominated by Sunac Zhidi and the remaining two will be nominated by Greentown Real Estate. The chairman of the JV Company will be nominated by Greentown Real Estate whereas the general manager and the legal representative of the JV Company will be nominated by Sunac Zhidi and the chief financial officer and director of treasury of the JV Company will be nominated by Greentown Real Estate and Sunac Zhidi respectively.

The JV Company will be managed and operated by the general manager who will report to the board of directors of the JV Company.

The following matters shall be approved by more than two-third of the members of the board of directors of the JV Company before they can be implemented:

(1) any plan for increase or reduction of registered capital of or issuance of any debt securities by the JV Company;
(2) any plan for merger, division, change in formation or dissolution of the JV Company; and
(3) the provision of any guarantees by the JV Company to third parties.

Save for the above, all other matters shall be approved by more than half of the members of the board of directors of the JV Company.

Management structure of the JV Company

The JV Company will set up various functional departments including human resources, costing, finance, sales, operation and design teams and other necessary functional departments for the purpose of managing Target Companies No. 1 to 8. The JV Company will provide services to manage and supervise the Target Companies through these functional departments.

– 7 –

LETTER FROM THE BOARD

Basis for determining the Consideration

The Consideration represents 50% of the Greentown Real Estate’s total entitlements in Target Companies No. 1 to 9 in the amount of RMB6,715,872,402.38 as at 30 June 2012.

The aforesaid amount of RMB6,715,872,402.38 comprises the following:

(1) the total capital of RMB2,257,405,000 contributed by Greentown Real Estate in the Target Companies;
(2) outstanding shareholders’ loans in the amount of RMB2,790,114,770.93 owing by the Target Companies to Greentown Real Estate;
(3) interest accrued on the aforesaid shareholders’ loans up to 30 June 2012 in the amount of RMB426,922,117.77; and
(4) profits of certain Target Companies attributable to Greentown Real Estate as agreed between the parties to the Framework Agreement for the period up to 30 June 2012 in the amount of RMB1,241,430,513.69.

As referred to in the announcement of the Company dated 22 June 2012 in relation to the Acquisition, the consideration shall be subject to adjustment (if any) to be agreed between Sunac Zhidi and Greentown Real Estate upon completion of the due diligence exercise to be conducted by Sunac Zhidi. With reference to the audited financial information and due diligence work performed, the Company and Greentown Real Estate mutually agreed to adjust the consideration from RMB3,372,058,712.00 to RMB3,357,936,201.19.

As part of the Transactions, Greentown Real Estate transfers a receivable from Target Company 4 to the JV Company at no cost. No adjustment to the Consideration will be made as a result of such transfer.

Payment of the Consideration

Sunac Zhidi shall pay the Consideration in cash in accordance with the following schedule:

(1) Sunac Zhidi shall place a deposit of RMB1 billion with Greentown Real Estate within 7 working days after the Framework Agreement is executed. Greentown Real Estate shall return such deposit to Sunac Zhidi if the Framework Agreement cannot become effective.
(2) The JV Company shall complete the acquisition of Equity Interests 1 to 8 and the assignment of the shareholders’ loans due from the Target Companies to Greentown Real Estate within 15 working days (or such other date as agreed upon by both parties) after its establishment. Upon completion of the aforesaid acquisition and assignment, Sunac Zhidi shall pay the remaining balance of the Consideration, i.e. RMB2,357,936,201.19, to Greentown Real Estate, upon which, Sunac Zhidi shall have obtained 50% interests in each of the JV Company and Target Company No. 9.

– 8 –

LETTER FROM THE BOARD

(3) In case if the JV Company or any of the Target Companies falls short of working capital and Sunac Zhidi and Greentown Real Estate agree to make additional contribution to the JV Company, such funding shall be provided by Sunac Zhidi and Greentown Real Estate in the proportion of 50:50.

The capital commitment of Sunac Zhidi under the Framework Agreement will be funded by internal resources of the Group.

Acquisition of the Target Companies

Upon formation of the JV Company, Greentown Real Estate shall transfer or cause to be transferred to the JV Company equity interests in the following Target Companies:

			Equity Interest
			to be transferred	Capital
			or caused to be	contributed by
Target	Name of		transferred by	Greentown Real
Company	Target	Name of	Greentown	Estate for such
No.	Company	the Project	Real Estate	Equity Interest
1	上海華浙外灘	Greentown,	51%	RMB60.5 million
	置業有限公司	Shanghai
		Bund House
	Shanghai
	Huazhe Bund	(綠城• 上海黃浦
	Real Estate	灣)
	Co., Ltd.*
2	上海綠順房地	Greentown,	100%	RMB1 billion
	產開發有限公	Shanghai Yulan
	司	Garden
	Shanghai	(綠城• 上海玉蘭
	Lvshun Real	花園)
	Estate
	Development
	Co., Ltd. *

– 9 –

LETTER FROM THE BOARD

			Equity Interest
			to be transferred	Capital
			or caused to be	contributed by
Target	Name of		transferred by	Greentown Real
Company	Target	Name of	Greentown	Estate for such
No.	Company	the Project	Real Estate	Equity Interest
3	蘇州綠城御園	Greentown,	90.5%	RMB226.25
	房地產開發有	Suzhou Majestic		million
	限公司	Mansion
	Suzhou	(綠城• 蘇州御園)
	Greentown
	Yuyuan Real
	Estate
	Development
	Co., Ltd.*
4	蘇州綠城玫瑰	Greentown,	66.67%	RMB240 million
	園房地產開發	Suzhou Rose
	有限公司	Garden
	Suzhou	(綠城• 蘇州玫瑰
	Greentown	園)
	Rose Garden
	Real Estate
	Development
	Co., Ltd.*
5	無錫綠城房地	Greentown,	85%	RMB86.7 million
	產開發有限公	Wuxi Yulan
	司	Garden
	Wuxi	(綠城• 無錫玉蘭
	Greentown	花園)
	Real Estate
	Development
	Co., Ltd.*

– 10 –

LETTER FROM THE BOARD

			Equity Interest
			to be transferred	Capital
			or caused to be	contributed by
Target	Name of		transferred by	Greentown Real
Company	Target	Name of	Greentown	Estate for such
No.	Company	the Project	Real Estate	Equity Interest
6	無錫太湖綠城	Greentown,	39%	RMB117 million
	置業有限公司	Wuxi Taihu
		Project
	Wuxi Taihu
	Greentown	(綠城• 無錫太湖
	Real Estate	項目)
	Co., Ltd.*
7	常州綠城置業	Greentown,	37%	RMB309.875
	有限公司	Changzhou		million
		Yulan Square
	Changzhou
	Greentown	(綠城• 常州玉蘭
	Real Estate	廣場)
	Co., Ltd.*
8	天津逸駿投資	Greentown,	80%	RMB8 million
	有限公司	Tianjin Azure
		Coast
	Tianjin Yijun
	Investment	(綠城• 天津藍色
	Co., Ltd.*	海岸)

– 11 –

LETTER FROM THE BOARD

In addition, Sunac Zhidi will directly acquire 50% equity interest in the following Target Company No. 9 from Greentown Real Estate upon formation of the JV Company. Greentown Real Estate will retain 50% equity interest in such Target Company upon completion of the transfer.

			Equity Interest	Equity Interest
			to be	transferred	Capital
			or caused to be		contributed by
Target	Name of		transferred by		Greentown Real
Company	Target	Name of the	Greentown Real		Estate for such
No.	Company	Project		Estate	Equity Interest
9	上海綠城森林	Greentown,		50%	RMB104.54
	高爾夫別墅開	Shanghai Rose			million
	發有限公司	Garden
	Shanghai	(綠城• 上海玫瑰
	Greentown	園)
	Woods Golf
	Villas
	Development
	Co., Ltd. *

Completion of the Acquisition

Pursuant to the Framework Agreement, the parties agreed that, as from 1 July 2012, all profits and entitlements derived from (i) Target Companies No. 1 to No. 8 shall belong to the JV Company and the equity interests in such Target Companies shall be taken as if they had already been held by the JV Company; and (ii) Target Company No. 9 shall be shared between Sunac Zhidi and Greentown Real Estate in equal shares.

Upon completion of the Acquisition, the Target Companies could be rebranded to include “Sunac” in their name.

As (i) the shareholders’ approval to the Framework Agreement and the transactions contemplated thereunder were obtained by the Company by way of written shareholders’ resolutions passed on 22 June 2012; and (ii) the shareholders’ approval to the Framework Agreement and the transactions contemplated thereunder were obtained by Greentown by way of written shareholders’ resolutions passed on 22 June 2012, the Framework Agreement had become effective as at the Latest Practicable Date. The JV Company was established on 7 August 2012. On the same date, an equity transfer agreement was entered into between Sunac Zhidi and Greentown Real Estate to transfer 50% equity interest in Target Company 9. The Consideration under the Framework Agreement was paid in full on 21 September 2012.

– 12 –

LETTER FROM THE BOARD

INFORMATION ON THE TARGET COMPANIES

Upon conducting further due diligence exercise as agreed under the Framework Agreement, the following table sets out the updated information about the Target Companies:

						Total
Target	Name of					Gross	Saleable
Company	Target	Name of	Type of		Site	Floor	floor	Project	Completion
No.	Company	Project	Project	City	Area	Area	area	Progress	Schedule
					(0,000’	(0,000’	(0,000’
					sq.m.)	sq.m.)	sq.m.)
1	上海華浙	Greentown,	High-rise	Shanghai	6.58	33.60	22.81	Phase 1	Completed in 2012
	外灘置業	Shanghai Bund	apartment,
	有限公司	House	parking space					Phases 2 to 4 –	Scheduled to be
								under	completed in 2015
	Shanghai	(綠城• 上海黃						construction
	Huazhe	浦灣)
	Bund Real							Phases 5 to 6 –	Scheduled to be
	Estate Co.,							to be	completed in 2018
	Ltd.*							commenced
2	上海綠順	Greentown,	Low-rise	Shanghai	5.82	13.45	10.37	Under	Scheduled to be
	房地產開	Shanghai Yulan	apartment,					construction	completed in 2013
	發有限公	Garden	parking space
	司
		(綠城• 上海玉
	Shanghai	蘭花園)
	Lvshun
	Real
	Estate
	Development
	Co., Ltd.*
3	蘇州綠城	Greentown,	Low-rise	Suzhou	15.57	20.94	12.06	Under	Scheduled to be
	御園房地	Suzhou	apartment,					construction	completed in 2014
	產開發有	Majestic	villa,
	限公司	Mansion	parking space
	Suzhou	(綠城• 蘇州御
	Greentown	園)
	Yuyuan
	Real
	Estate
	Development
	Co., Ltd.*

– 13 –

LETTER FROM THE BOARD

						Total
Target	Name of					Gross	Saleable
Company	Target	Name of	Type of		Site	Floor	floor	Project	Completion
No.	Company	Project	Project	City	Area	Area	area	Progress	Schedule
					(0,000’	(0,000’	(0,000’
					sq.m.)	sq.m.)	sq.m.)
4	蘇州綠城	Greentown,	Villa,	Suzhou	21.39	21.58	11.99	To be	Scheduled to be
	玫瑰園房	Suzhou Rose	parking space					commenced	completed in 2016
	地產開發	Garden
	有限公司
		(綠城• 蘇州玫
	Suzhou	瑰園)
	Greentown
	Rose
	Garden
	Real
	Estate
	Development
	Co., Ltd.*
5	無錫綠城	Greentown,	High-rise	Wuxi	18.08	53.43	51.20	Phase 1	Completed in 2009
	房地產開	Wuxi Yulan	apartment,
	發有限公	Garden	retail, parking					Phase 2	Scheduled to be
	司		space						completed in 2012
		(綠城• 無錫玉
	Wuxi	蘭花園)						Phase 3 – to be	Scheduled to be
	Greentown							commenced	completed in 2015
	Real
	Estate
	Development
	Co., Ltd.*
6	無錫太湖	Greentown,	High-rise	Wuxi	17.16	53.37	51.14	Phase 1 –	Scheduled to be
	綠城置業	Wuxi Taihu	apartment,					under	completed in 2014
	有限公司	Project	retail, parking					construction
			space
	Wuxi	(綠城• 無錫太						Phases 2 to 3 –	Scheduled to be
	Taihu	湖項目)						to be	completed in 2017
	Greentown							commenced
	Real
	Estate Co.,
	Ltd.*
7	常州綠城	Greentown,	High-rise	Changzhou 41.33		135.08	127.98	To be	Scheduled to be
	置業有限	Changzhou	apartment,					commenced	completed in 2018
	公司	Yulan Square	retail, service
			apartment,
	Changzhou	(綠城• 常州玉	parking space
	Greentown	蘭廣場)
	Real
	Estate Co.,
	Ltd.*

– 14 –

LETTER FROM THE BOARD

						Total
Target	Name of					Gross	Saleable
Company	Target	Name of	Type of		Site	Floor	floor	Project	Completion
No.	Company	Project	Project	City	Area	Area	area	Progress	Schedule
					(0,000’	(0,000’	(0,000’
					sq.m.)	sq.m.)	sq.m.)
8	天津逸駿	Greentown,	Retail	Tianjin	1.72	20.97	18.68	Phase 1 –	Scheduled to be
	投資有限	Tianjin Azure	properties,					under	completed in 2014
	公司	Coast	office					construction
			building,
	Tianjin	(綠城• 天津藍	service					Phase 2 – to be	Scheduled to be
	Yijun	色海岸)	apartments,					commenced	completed in 2015
	Investment		parking space
	Co., Ltd. *
9	上海綠城	Greentown,	Villa,	Shanghai	80.34	24.37	14.51	Phases 3 to 4	Completed in 2011
	森林高爾	Shanghai Rose	parking space
	夫別墅開	Garden						Phases 5 to 7	Scheduled to be
	發有限公								completed in 2015
	司	(綠城• 上海玫
		瑰園)
	Shanghai
	Greentown
	Woods
	Golf Villas
	Development
	Co., Ltd.*
		Total			207.99	376.79	320.74

The original purchase cost to Greentown Real Estate in respect of the equity interests in the Target Companies to be transferred was approximately RMB2,257,405,000.

Subsequent to the signing of the Framework Agreement, in July 2012, Target Company No. 2 became the winning bidder for a land parcel in Tang Town in Pudong New District, Shanghai through the listing-for-sale process. The winning bid for this land parcel amounted to RMB1,644.0 million. This land parcel has a site area of approximately 72,803 sq.m. and a planned aggregate GFA of approximately 109,204 sq.m..

In September 2012, Target Company No. 2 and Longrun Real Estate Development (Chengdu) Co., Ltd., a subsidiary of The Wharf (Holdings) Limited whose shares are listed on the Stock Exchange, became the joint winning bidder for a land parcel also in Tang Town in Pudong New District, Shanghai through the listing-for-sale process. The winning bid for this land parcel amounted to RMB834.0 million. This land parcel has a site area of approximately 60,206 sq.m. and a planned aggregate GFA of approximately 72,247 sq.m.. Fifty percent of the interest in this land parcel is attributed to Target Company No. 2.

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LETTER FROM THE BOARD

REASONS FOR AND BENEFITS OF THE TRANSACTIONS

Both the Company and Greentown China are reputed enterprises focusing on developing high-end properties, and based on their optimistic consensus on the future of China’s real estate industry and the regional development of Yangtze River Delta of which Shanghai is the heart, both parties decided to establish this platform for the development of high-end real estate. With the well complemented strengths and joint efforts of the two parties, this platform is destined to have a sustainable and steady growth.

Through the cooperation, the Company will make greater efforts in cultivating the existing four dynamic economic zones which it has carefully chosen, i.e. Beijing, Tianjin, Chongqing and South Jiangsu, so as to consolidate its leadership in the South Jiangsu area and strategically penetrate Shanghai, and then finalize its strategic layout in Yangtze River Delta. The cooperation will be a crucial strategic move of the Company and will ensure its sustainable and steady development.

INFORMATION ON THE GROUP AND GREENTOWN CHINA

The Company is a company incorporated in the Cayman Islands with limited liability, whose shares are listed on the main board of the Stock Exchange. It is a leading real estate developer in the PRC and principally engaged in the development and sale of high-end and high-quality properties in key economic cities across the PRC.

As at the Latest Practicable Date, the Group has developed or is developing high-end and high-quality property projects in four key economic regions across the PRC, namely Beijing, Tianjin, Chongqing and South Jiangsu. Sunac Zhidi is an indirect wholly-owned subsidiary of the Company and is principally engaged in property development and investment.

Greentown China is a company incorporated in the Cayman Islands with limited liability, whose shares are listed on the main board of the Stock Exchange. It is one of the leading property developers in the PRC and is primarily engaged in developing quality properties targeting middle and high income residents in the PRC. Greentown Real Estate is an indirect wholly-owned subsidiary of Greentown China, and is mainly engaged in property development.

FINANCIAL EFFECTS OF THE TRANSACTIONS ON THE COMPANY

Upon completion of the Acquisition, six of the Target Companies will become subsidiaries of the Company, namely Target Company No. 1 to No. 5 and Target Company No. 8 and their financial results will be consolidated into the Company’s consolidated financial statements. The unaudited consolidated pro forma financial information of the Enlarged Group illustrating the financial impact of the Acquisition on the assets and liabilities of the Group is set out in Appendix V to this circular.

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LETTER FROM THE BOARD

The Consideration will be paid by the Group’s internal resources. As at 31 August 2012, the Group had sufficient cash balance to pay the Consideration. Based on the current market status and the Group’s working capital forecast up to 31 December 2013, the Group will have sufficient funds from the proceeds of pre-sale/sale of the currently developed projects to pay the liabilities when they fall due. Therefore, the Directors are of the view that the Acquisition will not have any significant negative impact on the Group’s operations and liquidity.

According to the unaudited consolidated statements of the Group as at 30 June 2012, the Group had assets and liabilities of approximately RMB42,818.5 million and RMB34,653.4 million, respectively. Based on the unaudited pro forma financial information of the Enlarged Group as set out in Appendix V to this circular, assuming that the completion of the Acquisition has taken place on 30 June 2012, the unaudited consolidated pro forma assets of the Enlarged Group would be approximately RMB62,730.0 million, and the liabilities of the Enlarged Group would be approximately RMB52,313.8 million. Taking into account of the prospect and the property projects of the Target Companies, the Directors are of the view that the Acquisition will likely have a positive impact on the future financial performance of the Enlarged Group.

The pro forma financial information of the Enlarged Group has been prepared for illustrative purpose only, based on the judgements and assumptions of the Directors, and, due to its hypothetical nature, it may not give a true picture of the financial position of the Enlarged Group as at the date of completion of the Acquisition or any future date.

LISTING RULES IMPLICATIONS

Connected and Major Transactions

As stated in the Company’s announcement dated 5 January 2012, Sunac Zhidi entered into an equity transfer agreement on 5 January 2012 with Greentown Real Estate for the acquisition of 51% equity interest in Hubin Real Estate. As the aforesaid transaction was entered into within the preceding 12 month period, it would be required to be aggregated with the Transactions pursuant to Rules 14.22 and 14A.25 of the Listing Rules. Since some of the relevant Percentage Ratios (after aggregating with the previous transaction) are more than 25% but all of them are less than 100%, the Transactions constitute major transactions of the Company under the Listing Rules. As Greentown Real Estate is a connected person of the Company, the Transactions also constitute connected transactions of the Company under Chapter 14A of the Listing Rules and are subject to the approval by the Independent Shareholders in accordance with the requirements of the Listing Rules.

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LETTER FROM THE BOARD

Written Approval Waiver

To the best of Directors’ knowledge, information and belief as at the Latest Practicable Date, none of the Shareholders is materially interested in the Transactions. As such, no Shareholder is required to abstain from voting if general meeting were to be convened to approve the Transactions. The Company has applied for, and the Stock Exchange has granted to the Company, the Written Approval Waiver and accordingly, no Shareholders’ meeting will be convened for the purpose of approving the Transactions. Pursuant to Rule 14.44 and 14A.43 of the Listing Rules, the Company has obtained a written shareholder’s approval for the Transactions from Sunac International, in lieu of holding a general meeting. Sunac International was interested in 1,555,578,451 Shares, representing approximately 51.84% of the total issued share capital of the Company as at the date of the Framework Agreement.

None of the Directors has a material interest in the Transactions which prohibits him/her from voting on the Transactions and therefore no Director was required to be abstained from approving the relevant Board resolutions approving the Transactions.

Independent Board Committee and Circular

An Independent Board Committee comprising all independent non-executive Directors has been formed to advise the Independent Shareholders as to whether the terms of the Transactions are fair and reasonable and in the interests of the Company and the Shareholders as a whole, taking into account the recommendation of the Independent Financial Adviser. Quam Capital has been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in this regard.

RECOMMENDATION

The Directors consider that the Transactions have been entered into on normal commercial terms, and the terms and conditions thereof are fair and reasonable so far as the Shareholders are concerned and are in the interests of the Company and the Shareholders as a whole.

ADDITIONAL INFORMATION

Your attention is also drawn to the additional information set out in the appendices to this circular.

By order of the Board Sunac China Holdings Limited Sun Hongbin

Chairman

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

==> picture [208 x 87] intentionally omitted <==

To the Independent Shareholders,

Dear Sir or Madam,

CONNECTED AND MAJOR TRANSACTIONS

FORMATION OF JOINT VENTURE

AND

ACQUISITION OF PROPERTY PROJECT COMPANIES

We refer to the circular dated 30 October 2012 of the Company (the “ Circular ”) of which this letter forms part. Terms defined in the Circular bear the same meanings herein unless the context otherwise requires.

We have been appointed as members of the Independent Board Committee to consider and advise the Independent Shareholders as to whether, in our opinion, the terms and conditions of the Transactions are fair and reasonable so far as the Independent Shareholders are concerned and are in the interests of the Company and the Shareholders as a whole. Quam Capital has been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the Transactions.

We wish to draw your attention to the “Letter from the Board” set out on pages 5 to 18 of the Circular which contains, among other things, information about the Transactions, and the “Letter from Quam Capital” set out on pages 20 to 36 of the Circular which contains its advice in respect of the Transactions.

Having considered the reasons for and the benefits of the Transactions and the advice of Quam Capital regarding the Transactions as set out in the “Letter from Quam Capital” on pages 20 to 36 of the Circular, we consider that the terms of the Transactions are on normal commercial terms and are fair and reasonable so far as the Independent Shareholders are concerned and the Transactions are in the interests of the Company and the Shareholders as a whole.

Yours faithfully, For and on behalf of

Independent Board Committee

Poon Chiu Kwok Li Qin Ma Lishan Independent Non-executive Independent Non-executive Independent Non-Executive Director Director Director

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LETTER FROM QUAM CAPITAL

The following is the full text of a letter of advice from Quam Capital, the independent financial adviser to the Independent Board Committee and the Independent Shareholders, which has been prepared for the purpose of incorporation into this circular, setting out its advice to the Independent Board Committee and the Independent Shareholders in respect of the Transactions.

30 October 2012

To the Independent Board Committee and the Independent Shareholders Sunac China Holdings Limited

3rd Floor, Building A3 Magnetic Plaza Binshuixi Road Nankai District Tianjin The People’s Republic of China

Dear Sir or Madam,

CONNECTED AND MAJOR TRANSACTIONS FORMATION OF JOINT VENTURE AND ACQUISITION OF PROPERTY PROJECT COMPANIES

INTRODUCTION

We refer to our appointment as the independent financial adviser to the Independent Board Committee and the Independent Shareholders in respect of the Transactions, details of which are set out in the “Letter from the Board” contained in the circular issued by the Company to its shareholders dated 30 October 2012 (the “Circular”), of which this letter forms part. Terms used in this letter shall have the same meaning as defined in the Circular unless the context otherwise requires.

According to the Letter from the Board, none of the Shareholder is materially interested in the Transactions. As such, no Shareholder is required to abstain from voting if general meeting were to be convened to approve the Transactions. Sunac International, being the controlling Shareholder, was interested in 1,555,578,451 Shares, representing approximately 51.84% of the total issued share capital of the Company, as at the Latest Practicable Date. The Company has applied for, and the Stock Exchange has granted to the Company, the Written Approval Waiver and accordingly, no Shareholders’ meeting will be convened for the purpose of approving the Transactions.

Mr. Poon Chiu Kwok, Mr. Li Qin and Mr. Ma Lishan, the independent non-executive Directors, have been appointed as members of the Independent Board Committee to advise the Independent Shareholders as to whether the terms of the Transactions are in the interests of the Company and the Shareholders as a whole and are based on normal commercial terms, and are fair and reasonable so far as the Company and the Shareholders are concerned. As the Independent Financial Adviser, our role is to give an independent opinion to the Independent Board Committee and the Independent Shareholders in such regard.

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LETTER FROM QUAM CAPITAL

BASIS OF OUR RECOMMENDATION

In formulating our recommendation, we have relied on (i) the information supplied by the Company and its advisers; (ii) the opinions expressed by and the representations of the Directors and management of the Group; (iii) the information and facts contained or referred to in the Circular; and (iv) our review of the relevant public information. We have assumed that all the information provided and representations and opinions expressed to us or contained or referred to in the Circular were true, accurate and complete in all respects at the date thereof and may be relied upon. We have no reason to doubt the truth, accuracy and completeness of such information and representations provided to us by the management of the Group, the Directors and the advisers of the Company. We have also sought and received confirmation from the Directors that no material facts have been withheld or omitted from the information provided and referred to in the Circular and that all information or representations regarding the Company and the Transactions provided to us by the Company and/or the Directors and the management of the Group are true, accurate, complete and not misleading in all aspects at the time they were made and continued to be so until the date of the Circular.

We consider that we have reviewed sufficient information currently available to reach an informed view and to justify our reliance on the accuracy of the information contained in the Circular so as to provide a reasonable basis for our recommendation. We have not, however, carried out any independent verification of the information, nor have we conducted any form of in-depth investigation into the business, affairs, operations, financial position or future prospects of the Company or any of its respective subsidiaries and associates.

PRINCIPAL FACTOR AND REASONS CONSIDERED

In arriving at our recommendation in respect of the Transactions, we have taken into consideration the following principal factors and reasons:

1. Background of and reasons for entering into of the Transactions

1.1 Background and financial information of the Group

The Group is principally engaged in the development and sale of high-end and high quality properties in key economic cities across the PRC. As at the Latest Practicable Date, the Group has developed or is developing high-end and high-quality property projects in four key economic regions across the PRC, namely Beijing, Tianjin, Chongqing and South Jiangsu.

According to the annual report of the Company for the year ended 31 December 2011 (the “2011 Annual Report”), despite the stringent control policy imposed by the PRC government on the real estate industry, the Company achieved its sales target in a tough environment and recorded a contractual sales of approximately RMB19.2 billion, representing an increase of 130.5% as compared with the corresponding period of 2010. As disclosed in the 2011 Annual Report, revenue of the Group for the year ended 31 December 2011 amounted to approximately RMB10,604.0 million, represents an increase of 59.4% as compared with the corresponding

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LETTER FROM QUAM CAPITAL

period of 2010, which was mainly derived from sales of properties, property-management service income and rental income from investment properties. The net profit of the Group for the year ended 31 December 2011 increased 54.6% to RMB2,383.1 million against RMB1,541.0 million in 2010. As at 31 December 2011, the audited consolidated net assets and total borrowings of the Group amounted to approximately RMB7,405.7 million and approximately RMB11,574.6 million respectively.

According to the 2011 Annual Report, the Board believe that the PRC government will continue to enforce its real estate adjustment measures in 2012, thus the sales and financing environment for the property sector will remain the same as 2011. The Company will consider prudently entering into Shanghai market in order to seek optimization of resources allocation, strives to strengthen its position on the market and lays a solid foundation for its sustainable and steady development.

1.2 Reasons for entering into of the Transactions

On 22 June 2012, Sunac Zhidi (a wholly-owned subsidiary of the Company) enter into the Framework Agreement with Greentown Real Estate (an indirect wholly-owned subsidiary of Greentown China) pursuant to which (1) Sunac Zhidi conditionally agreed to acquire, and Greentown Real Estate conditionally agreed to dispose of, an effective 50% interest in Equity Interests 1 to 8 by way of (i) the establishment of the JV Company to be owned as to 50% by Sunac Zhidi and 50% by Greentown Real Estate; and (ii) the acquisition of Equity Interests 1 to 8 by the JV Company from Greentown Real Estate; and (2) upon formation of the JV Company, Sunac Zhidi conditionally agreed to acquire, and Greentown Real Estate conditionally agreed to dispose of, an effective 50% interest in Target Company No. 9.

As stated in the Letter from the Board, both the Company and Greentown China are reputed enterprises focusing on developing high-end properties, and based on their optimistic consensus on the future of PRC real estate industry and the regional development of Yangtze River Delta of which Shanghai is the heart, both parties decided to establish this platform for the development of high-end real estate for the two parties. The Directors believe that with the well-complemented strengths and joint efforts of the two parties, this platform is destined to have a sustainable and steady growth.

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LETTER FROM QUAM CAPITAL

Greentown Real Estate is an indirect wholly-owned subsidiary of Greentown China, the shares of which are listed on the main board of the Stock Exchange. According to the annual report of Greentown China for the year ended 31 December 2011, Greentown China recorded approximately RMB22.0 billion of revenue, represents approximately 100% year-on-year growth, and the net profit attributable to the shareholders of Greentown China and its subsidiaries was approximately RMB2.6 billion, with an audited net assets of approximately RMB17.6 billion as at 31 December 2011, represents approximately 22.1% year-on-year growth. As at 31 December 2011, Greentown China had a total of 105 property development projects with gross floor area of approximately 41.0 million square meters, mainly concentrated in Hangzhou, Zhejiang, Jiangsu and Shanghai.

2. Overview of property market in the PRC

We notice that the property projects of the Target Companies are mainly for residential use and located in Shanghai, Suzhou, Wuxi, Changzhou and Tianjin. We have researched from public domain on the information related to the residential property market in relevant provinces in the PRC. According to 上海統計局 (The Bureau of Statistics of Shanghai*), Shanghai has an area of approximately 6,340.5 square kilometers and a population of 23.5 million in 2011. GDP of Shanghai amounted to approximately RMB1,919.6 billion in 2011, representing an increase of 8.2% over the previous year. The investment in the development of residential building amount to approximately RMB139.9 billion in 2011, representing an increase of 13.7% over the previous year. The per capita disposable income of urban household amounted to approximately RMB36,230, represents an increase of 13.8% as compared to previous year.

According to 天津市統計局 (The Bureau of Statistics of Tianjin*), Tianjin has an area of approximately 11,760 square kilometers and a population of 13.5 million in 2011. GDP of Tianjin amounted to approximately RMB1,119.1 billion in 2011, representing an increase of 16.4% over the previous year. The investment in the development of residential building amount to approximately RMB108.0 billion in 2011, representing an increase of 24.6% over the previous year. The per capita disposable income of urban household amounted to approximately RMB26,921, represents an increase of 10.8% as compared to previous year.

Suzhou, Wuxi and Changzhou are located in the Jiangsu province. According to 江蘇省統計局 (The Bureau of Statistics of Jiangsu province*), Jiangsu has an area of approximately 102,600 square kilometers and a population of 79.0 million in 2011. GDP of Jiangsu amounted to approximately RMB4,911.0 billion in 2011, representing an increase of 11.0% over the previous year. The investment in the development of residential building amount to approximately RMB556.8 billion in 2011, representing an increase of 29.5% over the previous year. The per capita disposable income of urban household amounted to approximately RMB26,341, represents an increase of 14.8% as compared to previous year.

In view of the growth in GDP, investment in the development of residential building and the per capita disposable income of urban household in Shanghai, Tianjin and Jiangsu provinces, we concur with the Company’s view that it is optimistic on the future of China’s real estate industry and the regional development of Yangtze River Delta of which Shanghai is the heart.

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LETTER FROM QUAM CAPITAL

the Group as	per valuation	report	(RMB million)	1,792.8					1,181.0						1,506.4
	Capital	commitment	(RMB million)	25.6					347.4						308.2
	Saleable	floor area	(0,000’ sq.m.)	22.81					10.37						12.06
	Total gross	floor area	(0,000’ sq.m.)	33.60					13.45						20.94
		Site area	(0,000’ sq.m.)	6.58					5.82						15.57
		City		Shanghai					Shanghai						Suzhou
		Type of product		High-rise	apartment, parking	space			Low-rise apartment	parking space					Low-rise	apartment, villa,	parking space
	Name of	project		Greentown,	Shanghai	Bund House			Greentown,	Shanghai	Yulan Garden				Greentown,	Suzhou	Majestic	Mansion
	Name of Target	Company		上海華浙外灘置業	有限公司	Shanghai Huazhe	Bund Real Estate	Co., Ltd.* (Note 1)	上海綠順房地產開	發有限公司	Shanghai Lvshun	Real Estate	Development Co.,	Ltd.* (Note 2)	蘇州綠城御園房地	產開發有限公司	Suzhou Greentown	Yuyuan Real	Estate	Development Co.,	Ltd.* (Note 3)
Target	Company	No.		1					2						3

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LETTER FROM QUAM CAPITAL

the Group as	per valuation	report	(RMB million)	1,210.2							694.0						352.2						179.5
	Capital	commitment	(RMB million)	418.6							207.3						305.6						1,283.3
	Saleable	floor area	(0,000’ sq.m.)	11.99							51.20						51.14						127.98
	Total gross	floor area	(0,000’ sq.m.)	21.58							53.43						53.37						135.08
		Site area	(0,000’ sq.m.)	21.39							18.08						17.16						41.33
		City		Suzhou							Wuxi						Wuxi						Changzhou
		Type of product		Villa, parking	space						High-rise	apartment, retail,	parking space				High-rise	apartment, retail,	parking space				High-rise	apartment, retail,	service apartment,	parking space
	Name of	project		Greentown,	Suzhou Rose	Garden					Greentown,	Wuxi Yulan	Garden				Greentown,	Wuxi Taihu	Project				Greentown,	Changzhou	Yulan Square
	Name of Target	Company		蘇州綠城玫瑰園房	地產開發有限公司	Suzhou Greentown	Rose Garden Real	Estate	Development Co.,	Ltd.* (Note 4)	無錫綠城房地產開	發有限公司	Wuxi Greentown	Real Estate	Development Co.,	Ltd.* (Note 5)	無錫太湖綠城置業	有限公司	Wuxi Taihu	Greentown Real	Estate Co., Ltd.*	(Note 6)	常州綠城置業	有限公司	Changzhou	Greentown Real	Estate Co., Ltd.*	(Note 7)
Target	Company	No.		4							5						6						7

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LETTER FROM QUAM CAPITAL

Value of the	underlying	properties	attributable to	Target the Group as	Company Name of Target Name of Total gross Saleable Capital per valuation	No. Company project Type of product City Site area floor area floor area commitment report	(0,000’ sq.m.) (0,000’ sq.m.) (0,000’ sq.m.) (RMB million) (RMB million)	8 天津逸駿投資 Greentown, Retail properties, Tianjin 1.72 20.97 18.68 499.1 127.6	有限公司 Tianjin Azure office building,	Tianjin Yijun Coast service apartment,	Investment Co., parking space	Ltd.* (Note 8)	9 上海綠城森林 Greentown, Villa, parking Shanghai 80.34 24.37 14.51 353.0 1,198.0	高爾夫別墅開發 Shanghai space	有限公司 Rose Garden	Shanghai	Greentown Woods	Golf Villas	Development Co.,	Ltd.* (Note 9)	Total 207.99 376.79 320.74 3,748.1 8,241.7	Notes:	1. Underlying properties of Target Company 1 include the unsold portions of Phase I of Greentown Shanghai Bund House, Nos 1 and 2, Lane 566, South Zhongshan Road, Huangpu	District, Shanghai, the PRC, the development site for the proposed development known as Phases 2 to 4 of Greentown Shanghai Bund House, Qiu 1/1, 620 Jiefang, Dongjiadu,	Huangpu District Shanghai, the PRC, and the development site for the proposed development known as Phases 5 and 6 of Greentown Shanghai Bund House, Qiu 1/1 east of	Yuelai Street, south of East Fuxing Road, west of Doushi Street and north of Baidu Road, 631 and 632 Jiefang, Huangpu District Shanghai, the PRC.	2. Underlying property of Target Company 2 includes the under construction development of Greentown Shanghai Yulan Garden, north toTanglong Road and west to Qi’ai Road,	Tang Town, Pudong New Area, Shanghai, the PRC	3. Underlying property of Target Company 3 includes the under construction development of Greentown Suzhou Majestic Mansion, No. 99 West Hualin Street, Suzhou Industrial	Park, Suzhou, Jiangsu Province, the PRC	4. Underlying property of Target Company 4 includes the development site for the proposed development known as Greentown Suzhou Rose Garden, north of Dushu Lake, south	of Gaohe Road, Suzhou Industrial Park, Suzhou, Jiangsu Province, the PRC

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LETTER FROM QUAM CAPITAL

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LETTER FROM QUAM CAPITAL

3.1 Financial information of the Target Companies

The financial information of the Target Companies has been presented in the accountants’ reports of the JV Company and Target Company 9 as set out in Appendix II and III, respectively, to the Circular. The following tables summarises the audited financial information of the Target Companies for the three years ended 31 December 2011 and six months ended 30 June 2011 and 2012 as extracted from the Accountants’ Report of the JV Company and Target Company 9.

JV Company

The financial information of the JV Company comprise of Target Companies 1 to 8.

				For the	six months
	For the	year ended 31	December	ended 30 June
	2009	2010	2011	2011	2012
	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000
				(unaudited)
Revenue	–	–	1,333,034	–	2,382,910
Profit/(Loss) before
income tax	(26,317)	(86,161)	(420,362)	(155,574)	592,506
Net Profit/(Loss)	(20,898)	(87,682)	(510,400)	(127,833)	242,346

As shown in the summary of the JV Company’ results of operations for each of the three years ended 31 December 2011 and six months ended 30 June 2012 above, we note that the results of the JV Company fluctuated significantly during the review period. While no revenue was generated until the second half of 2011, the JV Company generated approximately RMB1.3 billion and RMB2.4 billion revenue, respectively, for the year ended 31 December 2011 and six months ended 30 June 2012. As such, the net result of the JV Company improved from net loss of approximately RMB510.4 million for the year ended 31 December 2011 to net profit of approximately RMB242.3 million for the six months ended 30 June 2012.

Revenue of the JV Company is 100% derived from sales of properties.

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LETTER FROM QUAM CAPITAL

Target Company 9

				For the	six months
	For the	year ended 31	December	ended 30 June
	2009	2010	2011	2011	2012
	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000
				(unaudited)
Revenue	1,292,818	351,856	766,364	31,266	469,135
Profit/(Loss) before
income tax	190,671	38,827	282,732	(5,506)	233,181
Net Profit/(Loss)	113,734	20,994	170,345	(5,110)	147,426

According to the above summary of financial information of the Target Company 9, notwithstanding the highly fluctuated revenue during the review period, the Target Company 9, save for the six months ended 30 June 2011, recorded net profit for each of the three years ended 31 December 2011 and six months ended 30 June 2012.

Revenue of the Target Company 9 is mainly derived from sales of properties. Despite of the lower level of revenue for 2010 and 2011 when compare to that of 2009, the net profit of Target Company 9 increased from approximately RMB113.7 million to approximately RMB170.3 million in 2011. Such increase is mainly attributable to the fluctuation of the interest income on loans to related parties during the review period due to the change of amount due from related parties resulting from the fluctuation of the proceeds from presale and bank borrowings during the review period. The finance cost of Target Company 9 was approximately RMB7.6 million, RMB131.5 million, RMB65.6 million, RMB53.1 million and RMB13.2 million for each of the three years ended 31 December 2011 and the six months ended 30 June 2011 and 2012.

As shown in the valuation report, the value of the completed properties to be acquired by the Group for sale in the PRC account for only approximately 9.0% of the total value of the properties to be acquired by the Group, the remaining properties are either under development or for future development.

In view that the completion rate of the properties is relatively low, it is expected that there is potential for development of the Target Companies.

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LETTER FROM QUAM CAPITAL

Financial position of Target Companies

The following table summarises the audited financial position of the Target Companies for the three years ended 31 December 2011 and six months ended 30 June 2012 as extracted from the Accountants’ Report of the JV Company and Target Company 9.

JV Company

				As at
		As at 31 December		30 June
	2009	2010	2011	2012
	RMB’000	RMB’000	RMB’000	RMB’000
Total assets	7,487,596	15,181,113	15,574,562	15,090,462
Total liabilities	6,805,173	13,353,249	14,173,084	13,400,738
Net Assets	682,423	1,827,864	1,401,478	1,689,724
Return on equity	N/A	N/A	N/A	N/A
Current ratio	1.52	1.41	1.31	1.22

Total assets of the JV Company mainly consist of properties under development during the review period. During the review period, the net assets of the JV Company has increased from approximately RMB682.4 million as at 31 December 2009 to approximately RMB1,689.7 million as at 30 June 2012 which was mainly attributable to the increase in properties under development and completed properties held for sale due to capitalization of construction work done in the same period.

Target Company 9

				As at
		As at 31 December		30 June
	2009	2010	2011	2012
	RMB’000	RMB’000	RMB’000	RMB’000
Total assets	2,277,433	3,949,072	1,346,167	1,613,946
Total liabilities	2,092,212	3,646,777	873,527	993,880
Net Assets	185,221	302,295	472,640	620,066
Return on equity	0.61	0.07	0.36	N/A
Current ratio	1.77	1.08	1.55	1.62

Total assets of the Target Company 9 consist mainly of properties under development, completed properties held for sale and amount due from related parties during the review period. During the review period, the net assets of the Target Company 9 has increased from approximately RMB185.2 million as at 31 December 2009 to approximately RMB620.1 million as at 30 June 2012 which was mainly attributable to the decrease in borrowing in the same period.

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LETTER FROM QUAM CAPITAL

The Target Companies have total capital commitment of approximately RMB3,748.1 million, due to the incessant increase of proceeds from presale or sale of properties of Target Companies, such capital commitment would not be a significant financial burden to the Target Companies.

Having considered that (i) the positive prospect of the real estate industry in Shanghai, Tianjin and Jiangsu provinces, where the property projects of the Target Companies are located, as discussed in section 2 above; (ii) the high-end property projects are located within the four dynamic economic zones chosen by the Company, which are in line with the Company’s development strategy; (iii) the possible synergy arising from the cooperation platform established with Greentown China; (iv) the prospect and the progress of development of the property projects of the Target Companies; and (v) the financial performance of the JV Company and the Target Company 9 throughout the three years ended 31 December 2011 and six months ended 30 June 2012, we concur with the Directors’ view that the Transactions is in the interest of the Company and the Shareholders as a whole.

4. Principal terms of the Framework Agreement

The principal terms of the Framework Agreement are set out below:

Date

22 June 2012

Parties

Sunac Zhidi (a wholly-owned subsidiary of the Company)
Greentown Real Estate (an indirect wholly-owned subsidiary of Greentown China)

Subject Matter

(1) Sunac Zhidi conditionally agreed to acquire, and Greentown Real Estate conditionally agreed to dispose of, an effective 50% interest in Equity Interests 1 to 8 by way of (i) the establishment of the JV Company to be owned as to 50% by Sunac Zhidi and 50% by Greentown Real Estate; and (ii) the acquisition of Equity Interests 1 to 8 by the JV Company from Greentown Real Estate; and
(2) upon formation of the JV Company, Sunac Zhidi conditionally agreed to acquire, and Greentown Real Estate conditionally agreed to dispose of, an effective 50% interest in Target Company No. 9.

– 31 –

LETTER FROM QUAM CAPITAL

Effective date of the Framework Agreement

Formation of JV Company

Pursuant to the terms of the Framework Agreement, the JV Company will be established with an initial registered capital of RMB2 billion, which will be contributed in cash by Sunac Zhidi and Greentown Real Estate as to RMB1 billion and RMB1 billion, respectively. The name of the JV Company shall be 上海融創綠城控股有限公司 (Shanghai Sunac Greentown Holding Company Limited*), or such other name as approved by the relevant PRC regulatory authority.

Upon completion of the aforesaid capital contribution, the JV Company will be owned by Sunac Zhidi and Greentown Real Estate in equal shares and will be accounted for as a subsidiary of the Company.

Board composition and management of JV Company

The JV Company will be managed and operated by the general manager who will report to the board of directors of the JV Company.

Further details on the terms of the Framework Agreement can be referred to in the Letter from the Board.

Consideration

According to the Letter from the Board, the consideration of RMB3,357,936,201.19 payable in cash by Sunac Zhidi in respect of the Transactions represents 50% of the Greentown Real Estate’s total entitlements in Target Companies No. 1 to 9 in the amount of approximately RMB6,715,872,402.38 as at 30 June 2012. The consideration was arrived at after taking into account the followings:

(1) the total capital of RMB2,257,405,000 contributed by Greentown Real Estate in the Target Companies;
(2) outstanding shareholders’ loan in the amount of RMB2,790,114,770.93 owing by the Target Companies to Greentown Real Estate;

– 32 –

LETTER FROM QUAM CAPITAL

(3) interest accrued on the aforesaid shareholders’ loans up to 30 June 2012 in the amount of RMB426,922,117.77; and
(4) profits of certain Target Companies attributable to Greentown Real Estate as agreed between the parties to the Framework Agreement for the period up to 30 June 2012 in the amount of RMB1,241,430,513.69.

The consideration shall be subject to adjustment (if any) to be agreed between Sunac Zhidi and Greentown Real Estate upon completion of the due diligence exercise to be conducted by Sunac Zhidi. The consideration is to be funded by the Group’s internal resources.

As disclosed in the Letter from the Board, the consideration was adjusted to RMB3,357,936,201.19 payable in cash by Sunac Zhidi in respect of the Transactions represents 50% of the Greentown Real Estate’s total entitlements in Target Companies No. 1 to 9 in the amount of approximately RMB6,715,872,402.38 as at 30 June 2012.

Analysis on the major terms of the Framework Agreement

Formation of the JV Company

As disclosed in the Letter from the Board, the Directors are of the view that the formation of the JV Company can provide a platform to the Company and Greentown China for the development of high-end real estate. With the well complemented strengths and joint efforts of the two parties, this platform is destined to have a sustainable and steady growth. In addition, the cooperation represents a crucial strategic move of the Company and would ensure its sustainable and steady development.

As advised by the management of the Company, the JV Company was incorporated in the PRC on 9 August 2012 as a limited liability company. The name of the JV Company has been ultimately approved to be 上海融創綠城房地產開發有限公司 (Shanghai Sunac Greentown Real Estate Development Co. Ltd.*). The capital contributed by Sunac Zhidi and Greentown Real Estate amounted to RMB200 million and RMB200 million respectively as at the Latest Practicable Date.

The JV Company is owned by Sunac Zhidi and Greentown Real Estate in equal shares. Sunac Zhidi will have control over the board of the JV Company. Upon completion of the Transactions, the JV Company will be accounted for as a subsidiary of the Company as Sunac Zhidi has control in the JV Company.

Having considered that (i) the interest to be obtained by Sunac Zhidi in the JV Company is proportionate to its capital contribution in the JV Company; and (ii) Sunac Zhidi has control over the board of the JV Company as three out of the five directors in the board of the JV Company will be nominated by Sunac Zhidi, we concur with the Directors and are of the view that the formation of the JV Company is in the interests of the Company and the Shareholders as a whole.

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LETTER FROM QUAM CAPITAL

The consideration

As mentioned above, the consideration for the Transactions shall be subject to adjustment. Based on the information provided by the Company, we noted that (i) the total capital contributed by Greentown Real Estate in the Target Companies amounted to RMB2,257,405,000; (ii) outstanding shareholders’ loans owing by the Target Companies to Greentown Real Estate amounted to RMB2,790,114,770.93; (iii) interest accrued on the aforesaid shareholders’ loans up to 30 June 2012 amounted to RMB426,922,117.77; and (iv) profits of certain Target Companies attributable to Greentown Real Estate as agreed between the parties to the Framework Agreement for the period up to 30 June 2012 amounted to RMB1,241,430,513.69. The total entitlements of Greentown Real Estate in the Target Companies No. 1 to 9 amounted to approximately RMB6,715,872,402.38. Therefore, 50% of Greentown Real Estate’s total entitlements would be approximately RMB3,357,936,201.19. As confirmed by the Company, the consideration for the Transactions will be adjusted downward to RMB3,357,936,201.19.

Pursuant to the supplemental agreement to the Framework Agreement, dated 9 August 2012, entered between Greentown Real Estate and Sunac Zhidi, Greentown Real Estate agreed to transfer 50% of the outstanding shareholders loan and interest accrued on such loan of approximately RMB1,608.5 million to Sunac Zhidi. As advised by the management of the Company, the outstanding shareholders loan is applied for the construction of the property projects of the Target Companies, which is repayable on demand and thus is considered to be liability nature. The Consideration net off the monetary value of the outstanding shareholders’ loans and the interest accrued on such loan of approximately RMB1,608.5 million amounted to approximately RMB1,749.4 million (the “Adjusted Consideration”).

In analyzing the reasonableness of the consideration for the Transactions, we have considered, among other things, comparing the consideration with the fair value of the underlying properties held by the Target Companies. As stated in the valuation report for the properties held by the Target Companies (the “Valuation Report”) prepared and issued by DTZ Debenham Tie Leung Limited (“DTZ”) contained in appendix VI to the Circular, the properties of the Target Companies are classified into three groups, (i) completed properties to be acquired by the Group for sale in the PRC (“Group I”); (ii) properties to be acquired by the Group under development in the PRC (“Group II”); and (iii) properties to be acquired by the Group for future development in the PRC (“Group III”). We have discussed with DTZ on the basis and assumption and methods of preparing the Valuation Report. Based on our discussion with DTZ, we consider that the methodology applied by them is in line with market practice and the underlying basis and assumptions adopted in valuing the properties of the Target Companies are fair and reasonable. According to the Valuation Report, the total value of the properties held by the Target Companies attributable to the Group as at 31 July 2012 amounted to RMB8,241.7 million.

We also noted that the net asset values as at 30 June 2012 of the JV Company and Target Company 9, without taking into account the valuation surplus, were RMB1,689.7 million and RMB620.1 million, respectively. Assuming that the respective net asset values are adjusted with the valuation surplus, the net asset values of the JV Company and Target Company 9 as at 30 June 2012 would increase to RMB3,220.7 million and RMB1,301.7 million, respectively.

– 34 –

LETTER FROM QUAM CAPITAL

Having considered that (i) the Consideration was determined based on the proportionate entitlements of Greentown Real Estate in the Target Companies No. 1 to 9; (ii) the Consideration represents a discount to the fair value of the underlying properties held by the Target Companies attributable to the Group as at 31 July 2012 of approximately RMB8,241.7 million as appraised by DTZ; and (iii) the fact that the Adjusted Consideration of approximately RMB1,749.4 million represents a discount to 50% of the total adjusted net asset value of approximately RMB2,261.2 million (after taking into account the valuation surplus) of the JV Company and Target Company 9 as at 30 June 2012, we are of the view that the basis of the Consideration which takes into account, among others, the total capital contributed and profits of certain Target Companies attributable to Greentown Real Estate and the Consideration of the Transactions are fair and reasonable so far as the Independent Shareholders are concerned.

Taking into account the discussion above, we concur with the Directors’ view that the Transactions were entered into on normal commercial terms, fair and reasonable so far as the Independent Shareholders are concerned and are in the interests of the Company and the Shareholders as a whole.

5. Financial effects of the Transactions

Net asset value

Based on the unaudited pro forma financial information of the Enlarged Group as set out in Appendix V to the Circular and further advised by the Directors, taking into account the effects of the Transactions assuming completion had taken place on 30 June 2012, the net asset value of the Group as at 30 June 2012 amounted to approximately RMB8,165.1 million. Upon completion of the Transactions, the net asset value of the Enlarged Group would increase by approximately RMB2,251.0 million. Such increase is mainly due to the consolidation of the entire equity interest of the JV Company.

Earnings

Upon completion of the Transactions, the result of the JV Company will be consolidated into the financial statement of the Group. As stated above, the JV Company has recorded profit before and after tax of approximately RMB592.5 million and RMB242.3 million, respectively, for the six months ended 30 June 2012.

Working capital and gearing

As at 30 June 2012, the cash and cash equivalent balance of the Group amounted to approximately RMB2,640.5 million and the gearing ratio (defined as net debt divided by total capital) of the Group was approximately 48.5%. According to the unaudited pro forma financial information of the Enlarged Group as set out in Appendix V to the Circular, the shortfall of cash and cash equivalent balance of the Enlarged Group is approximately RMB512.9 million, whereas the gearing ratio of the Enlarged Group is approximately 63.3%. As advised by the

– 35 –

LETTER FROM QUAM CAPITAL

management of the Company, the future operation of the Target Companies (including the possible future capital contribution) will be mainly financed by the proceeds from pre-sales of properties developed by the Target Companies. As confirmed by the Directors, taking into account that the Consideration has been settled as at the Latest Practicable Date and the financial resources available to the Enlarged Group, the Directors are of the opinion that the Enlarged Group has sufficient working capital for at least the next 12 months from the date of the circular.

RECOMMENDATION

Having taken into account the above principal factors, we are of the opinion that the Transactions was entered into in the ordinary and usual course of business, on normal commercial terms and the terms of the Framework Agreement and the Transactions are fair and reasonable so far as the Independent Shareholders are concerned and the Transactions are in the interests of the Company and the Shareholders as a whole.

Yours faithfully, For and on behalf of Quam Capital Limited Gary Mui

Managing Director

– 36 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

Financial information of the Group for each of the three years ended 31 December 2009, 2010 and 2011 and the six months ended 30 June 2012 are disclosed in the following documents which have been published on the websites of the Stock Exchange (http://www.hkexnews.hk) and the Company (http://www.sunac.com.cn):

the Company’s prospectus dated 24 September 2010 (pages I-4 to I-69);
the Company’s annual report for the year ended 31 December 2010 published on 21 March 2011 (pages 43 to 116);
the Company’s annual report for the year ended 31 December 2011 published on 18 April 2012 (pages 52 to 132); and
the Company’s interim report for the six months ended 30 June 2012 published on 25 September 2012 (pages 32 to 74).

INDEBTEDNESS

At the close of business on 31 August 2012, the Enlarged Group had total borrowings of RMB16,092.6 million, RMB14,966.6 million of which were secured or jointly secured by properties under development, completed properties held for sale, certain equity interests of the Company’s subsidiaries (including those legally transferred as collateral) and guarantee by a third party, respectively.

The Enlarged Group’s contingent liabilities at the close of business on 31 August 2012 are as follows:

RMB’000 Guarantees in respect of mortgage facilities for certain purchasers of the group entities 3,790,551

Save as aforesaid, and apart from intra-group liabilities and normal trade payables in the normal course of business, as at the close of business on 31 August 2012, the Enlarged Group did not have any debt securities, issued and outstanding or agreed to be issued, bank overdrafts, loans or other similar indebtedness, liabilities under acceptance (other than normal trade bills) or acceptance credits, debentures, mortgages, charges, hire purchase commitments, guarantees or other material contingent liabilities.

The Directors have confirmed that there have been no material changes in the indebtedness and contingent liabilities of the Enlarged Group since 31 August 2012.

– I-1 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

WORKING CAPITAL

Taking into account the expected completion of the Acquisition and the financial resources available to the Enlarged Group, including the internally generated funds and the available banking facilities, the Directors are of the opinion that the Enlarged Group has sufficient working capital for its present requirements, that is for at least the next 12 months from the date of this circular.

FINANCIAL AND TRADING PROSPECTS FOR 2012

The Directors are cautiously optimistic on the long-term prospects of the PRC property market. As a result of the continuing increase in the population and on-going and accelerated process of the urbanization, the Directors expect that the demand for residential properties will continue to increase in the PRC. In view of the increased inflation pressure, a series of administrative controls and tightened credit policy are implemented by the PRC Government. The Group will adopt a conservative approach in response to the changing market conditions so as to achieve a steady development.

The Group will continue to: (i) strive to build high quality real estates; and (ii) strengthen its core competencies in real estate development. The Group will continue to adopt a prudent and pragmatic approach in its business development by exploring appropriate business opportunities on a low cost basis as well as seeking the most efficient use of the Group’s financial resources.

Going forward, the Directors expect that the Group’s real estate development business will be a major contributor to the results of the Group and the Group will endeavour to focus its financial and human resources to further advance its business segments where its competitive strengths lie with the aim of maintaining the growth momentum of the Group.

– I-2 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANIES NO. 1 TO NO. 8

APPENDIX II

The following is the text of a report for the JV Target Group received from the Company’s reporting accountant, PricewaterhouseCoopers, Certified Public Accountants, Hong Kong, for the purpose of incorporation in this circular.

==> picture [67 x 49] intentionally omitted <==

30 October 2012

The Directors

Sunac China Holdings Limited

Dear Sirs,

We report on the combined financial information of the companies as set out in Note 1(b) of Section I below (the “JV Target Group”), which comprises the combined balance sheets of the JV Target Group as at 31 December 2009, 2010 and 2011 and 30 June 2012, and the combined statements of comprehensive income, the combined statements of changes in equity and the combined cash flow statements of the JV Target Group for each of the years ended 31 December 2009, 2010 and 2011 and the six months ended 30 June 2012 (the “Relevant Periods”) and a summary of significant accounting policies and other explanatory information. This financial information has been prepared by the directors of Sunac China Holdings Limited (the “Company”) and is set out in Sections I to II below for inclusion in Appendix II to the circular of the Company dated 30 October 2012 (the “Circular”) in connection with the proposed acquisition of the JV Target Group by the Company.

Pursuant to a cooperation framework agreement (the “Cooperation Framework Agreement”) entered into on 22 June 2012 between Tianjin Sunac Zhidi Co., Ltd. (“Sunac Zhidi”), a wholly-owned subsidiary of the Company, and Greentown Real Estate Group Co., Ltd. (“Greentown Real Estate”), Sunac Zhidi agreed to acquire 50% of the equity interests in the target companies (“Target Companies”) now comprising the JV Target Group held by Greentown Real Estate and 50% of certain amounts due to Greentown Real Estate by the Target Companies, from Greentown Real Estate. Particulars of the companies comprising the JV Target Group set out in Note 1(b) of Section I below.

The audited financial statements of the companies now comprising the JV Target Group as at the date of this report for which there are statutory audit requirements have been prepared in accordance with the relevant accounting principles generally accepted in their place of incorporation. The details of the statutory auditors of these companies are set out in Note 1(b) of Section I.

– II-1 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANIES NO. 1 TO NO. 8

APPENDIX II

The directors of Greentown Real Estate have prepared the combined financial statements of the JV Target Group for the Relevant Periods, in accordance with Hong Kong Financial Reporting Standards (“HKFRSs”) issued by the Hong Kong Institute of Certified Public Accountants (the “HKICPA”) (the “Underlying Financial Statements”). We have audited the Underlying Financial Statements in accordance with Hong Kong Standards on Auditing (the “HKSA”) issued by the HKICPA pursuant to separate terms of engagement with the Company and Greentown Real Estate.

The directors of Greentown Real Estate are responsible for the preparation of the Underlying Financial Statements that give a true and fair view in accordance with HKFRSs, and for such internal control as the directors of Greentown Real Estate determine is necessary to enable the preparation of the Underlying Financial Statements that are free from material misstatement, whether due to fraud or error.

The financial information has been prepared based on the Underlying Financial Statements, with no adjustment made thereon, and on the basis set out in Note 1(c) of Section I below.

DIRECTORS’ RESPONSIBILITY FOR THE FINANCIAL INFORMATION

The directors of the Company are responsible for the preparation of the financial information that gives a true and fair view in accordance with the basis of presentation set out in Note 1(c) of Section I below and in accordance with HKFRSs and accounting policies adopted by the Company and its subsidiaries (together, the “Group”) as set out in the annual report of the Company for the year ended 31 December 2011.

REPORTING ACCOUNTANT’S RESPONSIBILITY

Our responsibility is to express an opinion on the financial information and to report our opinion to you. We carried out our procedures in accordance with the Auditing Guideline 3.340 “Prospectuses and the Reporting Accountant” issued by the HKICPA.

OPINION

In our opinion, the financial information gives, for the purpose of this report and presented on the basis set out in Note 1(c) of Section I below, a true and fair view of the combined state of affairs of the JV Target Group as at 31 December 2009, 2010 and 2011 and 30 June 2012 and of the JV Target Group’s combined results and cash flows for the Relevant Periods then ended.

– II-2 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANIES NO. 1 TO NO. 8

APPENDIX II

REVIEW OF STUB PERIOD COMPARATIVE FINANCIAL INFORMATION

We have reviewed the stub period comparative financial information set out in Section I below included in Appendix I to the Circular which comprises the combined statement of comprehensive income, the combined statement of changes in equity and the combined cash flow statement of the JV Target Group for the six months ended 30 June 2011 and a summary of significant accounting policies and other explanatory information (the “Stub Period Comparative Financial Information”).

The directors of the Company are responsible for the preparation and presentation of the Stub Period Comparative Financial Information in accordance with the basis of presentation set out in Note 1(c) of Section I below and the accounting policies set out in Note 2 of Section I below and the accounting policies adopted by the Group as set out in the annual report of the Company for the year ended 31 December 2011.

Our responsibility is to express a conclusion on the Stub Period Comparative Financial Information based on our review. We conducted our review in accordance with Hong Kong Standard on Review Engagements 2410, “Review of Interim Financial Information Performed by the Independent Auditor of the Entity” issued by the HKICPA. A review of Stub Period Comparative Financial Information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Hong Kong Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Based on our review, nothing has come to our attention that causes us to believe that the Stub Period Comparative Financial Information, for the purpose of this report and presented on the basis set out in Note 1(c) of Section I below, is not prepared, in all material respects, in accordance with the accounting policies set out in Note 2 of Section I below.

– II-3 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANIES NO. 1 TO NO. 8

APPENDIX II

I FINANCIAL INFORMATION OF THE JV TARGET GROUP

The following is the financial information of the JV Target Group as at 31 December 2009, 2010 and 2011 and 30 June 2012 and for each of the years ended 31 December 2009, 2010 and 2011 and the six months ended 30 June 2011 and 2012 (the “Financial Information”):

Combined Balance Sheets

						As at
	Note		As at 31 December			30 June
		2009		2010	2011	2012
		RMB’000		RMB’000	RMB’000	RMB’000
ASSETS
Non-current assets
Property, plant and equipment Investments in an associate	5 30	6,744 –		11,244 34,681	10,723 90,050	7,498 90,077
Investments in a jointly controlled entity Deferred income tax assets	31 6	– 9,478		181,429 11,558	217,353 25,296	206,594 63,289

		16,222		238,912	343,422	367,458

Current assets
Properties under development Completed properties held for sale Prepayments Trade and other receivables	7 8 9 10	6,086,380 – 591,050 282,198		13,100,918 – 410,585 981,238	14,116,141 237,781 381,480 342,474	12,791,638 966,188 270,823 332,661
Restricted cash	11	323,332		4,342	55,148	157,122
Cash and cash equivalents	12	188,414		445,118	98,116	204,572
		7,471,374		14,942,201	15,231,140	14,723,004

Total assets		7,487,596		15,181,113	15,574,562	15,090,462


EQUITY
Capital and reserves attributable to equity
owners of the JV Target Group
Combined capital and other reserves Accumulated losses	13	676,300 (24,950)		1,907,423 (119,345)	1,884,311 (511,397)	1,930,211 (414,928)

		651,350		1,788,078	1,372,914	1,515,283
Non-controlling interests		31,073		39,786	28,564	174,441
Total equity		682,423		1,827,864	1,401,478	1,689,724


LIABILITIES
Non-current liabilities
Borrowings Deferred income tax liabilities	14 6	1,883,000 –		2,788,000 –	2,527,650 2,398	1,340,000 4,557

		1,883,000		2,788,000	2,530,048	1,344,557

Current liabilities
Trade and other payables Current income tax liabilities	15	4,906,006 16,167		8,966,301 18,948	8,932,980 65,606	7,917,852 374,679
Borrowings	14	–		1,580,000	2,644,450	3,763,650
		4,922,173		10,565,249	11,643,036	12,056,181

Total liabilities		6,805,173		13,353,249	14,173,084	13,400,738


Total equity and liabilities		7,487,596		15,181,113	15,574,562	15,090,462


Net current assets		2,549,201		4,376,952	3,588,104	2,666,823


Total assets less current liabilities		2,565,423		4,615,864	3,931,526	3,034,281

– II-4 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANIES NO. 1 TO NO. 8

APPENDIX II

Combined Statements of Comprehensive Income

						Six months ended	Six months ended	Six months ended
	Note	Year ended 31 December				30	June
		2009	2010	2011		2011		2012
		RMB’000	RMB’000	RMB’000		RMB’000		RMB’000
					(unaudited)
Revenue		–	–	1,333,034		–		2,382,910
Cost of sales	16	–	–	(972,134)		–		(1,620,265)
Loss on realisable value of
properties under development	7	–	–	(428,082)		–		–
Gross (loss)/profit		–	–	(67,182)		–		762,645
Selling and marketing costs	16	(13,793)	(30,416)	(47,613)		(23,257)		(17,288)
Administrative expenses	16	(11,445)	(31,362)	(36,142)		(19,321)		(18,209)
Other income	18	–	36,142	14,725		7,349		8,211
Other expenses	19	(60)	(20)	(43,600)		(873)		(12,671)
Operating (loss)/profit		(25,298)	(25,656)	(179,812)		(36,102)		722,688
Finance income	22	2,915	5,464	1,548		938		626
Finance costs	22	(3,934)	(58,956)	(225,627)		(112,812)		(120,076)
Share of (loss)/profit of associate	30	–	(324)	36		(179)		27
Share of (loss)/profit of jointly
controlled entity	31	–	(6,689)	(16,507)		(7,419)		(10,759)
(Loss)/profit before income tax		(26,317)	(86,161)	(420,362)		(155,574)		592,506
Income tax expenses	23	5,419	(1,521)	(90,038)		27,741		(350,160)
(Loss)/profit for the year/period		(20,898)	(87,682)	(510,400)		(127,833)		242,346


Total comprehensive income		(20,898)	(87,682)	(510,400)		(127,833)		242,346


*Attributable to:*
Equity owners of the JV Target
Group		(17,173)	(94,395)	(379,178)		(69,851)		96,469
Non-controlling interests		(3,725)	6,713	(131,222)		(57,982)		145,877
		(20,898)	(87,682)	(510,400)		(127,833)		242,346


Dividends	29	−	–	–		–		–

– II-5 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANIES NO. 1 TO NO. 8

APPENDIX II

Combined Statements of Changes in Equity

Owners of the JV Target Group

	Combined
	paid up					Non-
	capital of	Other	Accumulated			controlling	Total
	subsidiaries	reserves		losses	Total	interests	equity
	RMB’000	RMB’000		RMB’000	RMB’000	RMB’000	RMB’000
At 1 January 2009	112,200	–		(7,777)	104,423	34,798	139,221
Comprehensive income
Loss for the year	–	–		(17,173)	(17,173)	(3,725)	(20,898)
Transactions with owners
Capital contributions	610,000	(45,900)		–	564,100	–	564,100
At 31 December 2009	722,200	(45,900)		(24,950)	651,350	31,073	682,423
Comprehensive income
(Loss)/profit for the year	–	–		(94,395)	(94,395)	6,713	(87,682)
Transactions with owners
Capital contributions	1,008,000	223,123		–	1,231,123	2,000	1,233,123
At 31 December 2010	1,730,200	177,223		(119,345)	1,788,078	39,786	1,827,864
Comprehensive income
Loss for the year	–	–		(379,178)	(379,178)	(131,222)	(510,400)
Transactions with owners
Capital contributions	–	84,014		–	84,014	–	84,014
Transactions with non-
controlling interests	(120,000)	–		–	(120,000)	120,000	–
Statutory reserve	–	12,874		(12,874)	–	–	–
	(120,000)	96,888		(12,874)	(35,986)	120,000	84,014

– II-6 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANIES NO. 1 TO NO. 8

APPENDIX II

Owners of the JV Target Group

	Combined
	paid up					Non-
	capital of	Other	Accumulated			controlling	Total
	subsidiaries	reserves		losses	Total	interests	equity
	RMB’000	RMB’000		RMB’000	RMB’000	RMB’000	RMB’000
At 31 December 2011	1,610,200	274,111		(511,397)	1,372,914	28,564	1,401,478
Comprehensive income
Profit for the period	–	–		96,469	96,469	145,877	242,346
Transactions with owners
Capital contribution	–	45,900		–	45,900	–	45,900
At 30 June 2012	1,610,200	320,011		(414,928)	1,515,283	174,441	1,689,724


(Unaudited)
At 1 January 2011	1,730,200	177,223		(119,345)	1,788,078	39,786	1,827,864
Comprehensive income
Loss for the period	–	–		(69,851)	(69,851)	(57,982)	(127,833)
Transactions with owners
Capital contribution	–	29,308		–	29,308	–	29,308
Transactions with non-
controlling interests	(120,000)	–		–	(120,000)	120,000	–
	(120,000)	29,308		–	(90,692)	120,000	29,308
At 30 June 2011	1,610,200	206,531		(189,196)	1,627,535	101,804	1,729,339

– II-7 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANIES NO. 1 TO NO. 8

APPENDIX II

Combined Cash Flow Statements

						Six months ended	Six months ended	Six months ended
	Note	Year	ended 31 December			30	June
		2009		2010	2011	2011		2012
		RMB’000		RMB’000	RMB’000	RMB’000		RMB’000
						(unaudited)
Cash flows from operating
activities
Cash generated from/(used in)
operations	24	(2,801,752)		(4,255,158)	(501,724)	1,470,772		345,158
PRC income tax paid		(16,911)		(118,809)	(179,092)	(163,738)		(167,285)
Net cash generated from/(used in)
operating activities		(2,818,663)		(4,373,967)	(680,816)	1,307,034		177,873
Cash flows from investing
activities
Loans to related parties		(262,213)		(652,469)	(14,000)	–		–
Loans to non-controlling interests		(5,644)		(38,000)	(20,000)	–		–
Collection of loans to related
parties		–		–	671,436	71,434		134,265
Purchases of property, plant and
equipment		(2,700)		(6,707)	(2,336)	(1,680)		(349)
Proceeds from disposal of property,
plant and equipment		39		24	–	–		2,268
Net cash (used in)/generated from
investing activities		(270,518)		(697,152)	635,100	69,754		136,184
Cash flows from financing
activities
Proceeds from contributions from
owners		564,100		1,010,000	(23,750)	–		–
Proceeds from third parties’
borrowings		1,996,990		3,145,000	3,154,650	–		807,000
Proceeds from related parties’
borrowings		2,256,500		2,892,073	555,499	261,000		159,627
Proceeds from non-controlling
interests		–		–	130,000	50,000		–
Repayments of borrowings		(763,042)		(660,000)	(2,350,550)	(577,100)		(829,550)
Repayment of borrowings from
related parties		(597,666)		(637,029)	(1,251,820)	(1,056,000)		(30,930)
Repayment of borrowings from
non-controlling interests		(98,000)		(225,700)	–	–		–
Guarantee deposits for bank
borrowings	11	(4,000)		(200)	(50,928)	(50,806)		(101,717)
Interests paid		(114,077)		(196,321)	(464,387)	(213,182)		(212,031)
Net cash generated from/(used in)
financing activities		3,240,805		5,327,823	(301,286)	(1,586,088)		(207,601)
Net increase/(decrease) in cash
and cash equivalents		151,624		256,704	(347,002)	(209,300)		106,456
Cash and cash equivalents at
beginning of year/period		36,790		188,414	445,118	445,118		98,116
Cash and cash equivalents at end
of year/period	12	188,414		445,118	98,116	235,818		204,572

– II-8 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANIES NO. 1 TO NO. 8

APPENDIX II

NOTES TO THE FINANCIAL INFORMATION

1 GENERAL INFORMATION

(a) General

According to the Cooperation Framework Agreement, Sunac Zhidi agreed to acquire an effective 50% of Greentown Real Estate’s interests in its 8 property project companies as set out in note 1(b) below, of which 6 companies were previously subsidiaries, 1 company was an associate and 1 company was a jointly controlled entity of Greentown Real Estate. All the eight property project companies were managed together.

For the purpose of the transactions between Sunac Zhidi and Greentown Real Estate, the equity interest previously held by Greentown Real Estate will be injected into a new joint venture company (the “Joint Venture Company”) jointly established by Sunac Zhidi and Greentown Real Estate and in which each of Sunac Zhidi and Greentown Real Estate will hold 50% equity interest. Sunac Zhidi has effective control over the majority of board of directors of the Joint Venture Company. Upon completion of the transactions, the Joint Venture Company will become a subsidiary of the Company.

– II-9 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANIES NO. 1 TO NO. 8

APPENDIX II

(b) Companies comprising the JV Target Group	As at the date of this report, the details of the companies now comprising the JV Target Group is presented as follows:	Name of statutory auditors*	Equity	interest	held	Registered by the Relationship	Place of Date of capital JV Target Principal with the JV	Name of company incorporation incorporation (RMB million) Group activities Target Group 2009 2010 2011	Shanghai Huazhe Bund Shanghai, 26 September 2002 50 51% Real estate Subsidiary Shanghai Shenwei Shanghai Shenwei Shanghai Shenwei	Real Estate Co., Ltd. the PRC property Certified Public Certified Public Certified Public	(“Shanghai Huazhe”) development Accountants 上海申威聯合會計師 Accountants 上海申威聯合會計師 Accountants 上海申威聯合會計師	事務所事務所事務所	Shanghai Lvshun Real Shanghai, 29 January 2010 1,000 100% Real estate Subsidiary N/A Shanghai Shenwei Shanghai Shenwei	Estate Development the PRC property Certified Public Certified Public	Co., Ltd. (“Shanghai Lvshun”) development Accountants 上海申威聯合會計師事務所 Accountants 上海申威聯合會計師事務所	Suzhou Greentown Suzhou, 22 December 2009 250 90.5% Real estate Subsidiary Jiangsu Xingzhongda Jiangsu Xingzhongda Jiangsu Xingzhongda	Yuyuan Real Estate Development Co., Ltd. (“Suzhou Yuyuan”) the PRC property development CPAs Co., Ltd. 江蘇新中大會計師事務所有限公司 CPAs Co., Ltd. 江蘇新中大會計師事務所有限公司 CPAs Co., Ltd. 江蘇新中大會計師事務所有限公司	Suzhou Greentown Rose Suzhou, 7 December 2009 360 66.67% Real estate Subsidiary Jiangsu Xingzhongda Jiangsu Xingzhongda Jiangsu Xingzhongda	Garden Real Estate Development Co., Ltd. (“Suzhou Rose the PRC property development CPAs Co., Ltd. 江蘇新中大會計師事務所有限公司 CPAs Co., Ltd. 江蘇新中大會計師事務所有限公司 CPAs Co., Ltd. 江蘇新中大會計師事務所有限公司	Garden”)	Wuxi Greentown Real Wuxi, the 6 December 2007 102 85% Real estate Subsidiary Wuxi Zhongzheng Wuxi Zhongzheng Wuxi Zhongzheng	Estate Development Co., Ltd. (“Wuxi Greentown”) PRC property development CPAs Co., Ltd. 無錫中證會計師事務所有限公司 CPAs Co., Ltd. 無錫中證會計師事務所有限公司 CPAs Co., Ltd. 無錫中證會計師事務所有限公司	Tianjin Yijun Investment Tianjin, the 11 January 2008 10 80% Real estate Subsidiary Tianjin Chengtai CPAs Tianjin Yuexin Huawei Tianjin Yuexin Huawei	Co., Ltd. (“Tianjin Yijun”) PRC property development Co., Ltd. 天津誠泰有限責任會計師事務所 Certified Public Accountants 天津岳信華惟會計師 Certified Public Accountants 天津岳信華惟會計師	事務所事務所	Changzhou Greentown Changzhou, 1 November 2010 837.5 37% Real estate Jointly N/A Changzhou Jiahao Jiangsu Suya Jincheng	Real Estate Co., Ltd. (“Changzhou Greentown”) the PRC property development controlled entity C.P.A Partnership 常州嘉浩聯合會計師事務所 CPAs Co., Ltd. 江蘇蘇亞金誠會計師事務所有限公司	Wuxi Taihu Greentown Wuxi,the 25 January 2010 300 39% Real estate Associate N/A Wuxi Zhongzheng Wuxi Zhongzheng	Real Estate Co., Ltd. (“Wuxi Taihu”) PRC property development CPAs Co., Ltd. 無錫中證會計師事務所有限公司 CPAs Co., Ltd. 無錫中證會計師事務所有限公司	All entities now comprising the JV Target Group are limited liability companies and have adopted 31 December as their financial year end date.	* The English names of the statutory auditors referred to in this report represent management’s best effort at translating the Chinese names as no English names have been

– II-10 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANIES NO. 1 TO NO. 8

APPENDIX II

(c) Basis of presentation

The Financial Information has been prepared to present the combined financial position, results of operations and cash flows of Shanghai Huazhe, Shanghai Lvshun, Suzhou Yuyuan, Suzhou Rose Garden, Wuxi Greentown and Tianjin Yijun which were controlled by Greentown Real Estate during the Relevant Periods and were managed together. Changzhou Greentown and Wuxi Taihu are also accounted for using the equity method of accounting as they were managed together by Greentown Real Estate with other companies comprising the JV Target Group.

The Financial Information has been presented on a combined basis, after excluding certain intercompany income and expenses. The financial information has been prepared to present the combined balance sheets, the combined statements of comprehensive income, the combined statements of changes in equity and the combined cash flow statements of the JV Target Group for the Relevant Periods or since the respective dates of incorporation of the Target Companies, or since the date when the companies comprising the JV Target Group first came under the control of Greentown Real Estate, whichever is a shorter period.

All significant intra-group transactions and balances have been eliminated on combination.

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these combined financial information are set out below. These policies have been consistently applied to all the years/periods presented, unless otherwise stated.

2.1 Basis of preparation

The combined financial statements of the JV Target Group have been prepared in accordance with the Hong Kong Financial Reporting Standards (the “HKFRSs”). The combined financial statements have been prepared under the historical cost convention.

The preparation of financial statements in conformity with the HKFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the JV Target Group’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the combined financial statements are disclosed in Note 4.

(a) Going concern

The JV Target Group meets its day-to-day working capital requirements through its pre-sale proceeds, bank facilities and other borrowings from third parties and related parties. The current economic conditions continue to create uncertainty particularly over (a) the level of demand for the JV Target Group’s property products; and (b) the availability of bank finance for the foreseeable future. The shareholders of the Joint Venture Company have confirmed their intention to provide continuing financial support to the Joint Venture Company so as to enable the Joint Venture Company to repay its liabilities as and when they fall due and to carry on its business without a significant curtailment of operations for the foreseeable future if necessary. During the period from 30 July 2012 to 30 September 2012, the JV Target Group has received additional cash investments of RMB550 million from Sunac Zhidi and Greentown Real Estate respectively, totaling RMB1.1 billion, of which RMB0.4 billion was capital contributions and RMB0.7 billion was shareholders’ loans from Sunac Zhidi and Greentown Real Estate in proportion of their respective equity interests.

The JV Target Group’s forecasts and projections, taking into account the shareholders’ financial supporting and reasonably possible changes in trading performance, show that the JV Target Group should be able to operate within the level of its current facilities. After making enquiries, the directors of the Company and Greentown Real Estate have a reasonable expectation that the JV Target Group had adequate resources to continue in operational existence for the foreseeable future. The JV Target Group therefore continues to adopt the going concern basis in preparing its combined financial statements. Further information on the JV Target Group’s borrowings is given in Note 14 in this section.

– II-11 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANIES NO. 1 TO NO. 8

APPENDIX II

(b) New standards, amendments and interpretations which have been issued and are not yet effective have not been early adopted by the JV Target Group.

Up to the date of this report, the HKICPA has issued the following new standards, amendments and interpretations which are relevant to the JV Target Group’s operation but not yet effective for the annual accounting period beginning 1 January 2012 and which have not been early adopted by the JV Target Group:

HKAS 1 (Amendment) Presentation of financial statements (effective on or after 1 July 2012)
− The main change resulting from these amendments is a requirement for entities to group items presented in ‘other comprehensive income’ (OCI) on the basis of whether they are potentially reclassifiable to profit or loss subsequently (reclassification adjustments). The amendments do not address which items are presented in OCI.
HKFRS 7 (Amendment) Disclosures – Offsetting financial assets and financial liabilities (effective on or after 1 January 2013)
− The amendments also require new disclosure requirements which focus on quantitative information about recognised financial instruments that are offset in the statement of financial position, as well as those recognised financial instruments that are subject to master netting or similar arrangements irrespective of whether they are offset.
HKFRS 10 Consolidated financial statements (effective on or after 1 January 2013)
− The objective of IFRS/HKFRS 10 is to establish principles for the presentation and preparation of consolidated financial statements when an entity controls one or more other entity (an entity that controls one or more other entities) to present consolidated financial statements. Defines the principle of control, and establishes controls as the basis for consolidation. Set out how to apply the principle of control to identify whether an investor controls an investee and therefore must consolidate the investee. It also sets out the accounting requirements for the preparation of consolidated financial statements.
HKFRS 11 Joint arrangements (effective on or after 1 January 2013)
− HKFRS 11 is a more realistic reflection of joint arrangements by focusing on the rights and obligations of the arrangement rather than its legal form. There are two types of joint arrangement: joint operations and joint ventures. Joint operations arise where a joint operator has rights to the assets and obligations relating to the arrangement and hence accounts for its interest in assets, liabilities, revenue and expenses. Joint ventures arise where the joint operator has rights to the net assets of the arrangement and hence equity accounts for its interest. Proportional consolidation of joint ventures is no longer allowed.

– II-12 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANIES NO. 1 TO NO. 8

APPENDIX II

HKFRS 12

Disclosure of interests in other entities

(effective on or after 1 January 2013)
HKFRS 12 includes the disclosure requirements for all forms of interests in other entities, including joint arrangements, associates, special purpose vehicles and other off balance sheet vehicles
HKAS 27 (2011) Separate financial statements (effective on or after 1 January 2013)
− HKAS 27 (revised 2011) includes financial statements that are left of HKAS 27 have been included
HKAS 28 (2011) Associates and joint ventures (effective on or after 1 January 2013)
HKAS 27 (revised 2011) includes the provisions on separate financial statements that are left after the control provisions of HKAS 27 have been included in the new HKFRS 10.
HKAS 28 (revised 2011) includes the requirements for joint ventures, as well as associates, to be equity accounted following the issue of HKFRS 11.
HKFRS 13 Fair value measurements (effective on or after 1 January 2013)
− HKFRS 13 aims to improve consistency and reduce complexity by providing a precise definition of fair value and a single source of fair value measurement and disclosure requirements for use across HKFRSs. The requirements, which are largely aligned between HKFRSs and US GAAP, do not extend the use of fair value accounting but provide guidance on how it should be applied where its use is already required or permitted by other standards within HKFRSs or US GAAP.
HKAS 19 (Amendment) Employee benefits (effective on or after 1 January 2013)
− These amendments eliminate the corridor approach and calculate finance costs on a net funding basis.
HKAS 32 (Amendment) Financial instruments: Presentation – Offsetting financial assets and financial liabilities (effective on or after 1 January 2014)
The amendments clarify the requirements for offsetting financial instruments on the balance sheet: (i) The meaning of ‘currently has a legally enforceable right of set-off’; and
(ii) that some gross settlement systems may be considered equivalents to net settlement.

– II-13 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANIES NO. 1 TO NO. 8

APPENDIX II

HKFRS 9

Financial instruments

(effective on or after 1 January 2015)

HKFRS 9 is the first standard issued as part of a wider project to replace HKAS 39. HKFRS 9 retains but simplifies the mixed measurement model and establishes two primary measurement categories for financial assets: amortised cost and fair value. The basis of classification depends on the entity’s business model and the contractual cash flow characteristics of the financial asset. The guidance in HKAS 39 on impairment of financial assets and hedge accounting continues to apply.

HKFRS 7 and HKFRS 9 Mandatory effective date and transition disclosures (Amendments) (effective on or after 1 January 2015)

HKFRS 7 and HKFRS 9 (Amendments) “Mandatory effective date and transition disclosures” delay the effective date to annual periods beginning on or after 1 January 2015, and also modify the relief from restating prior periods. As part of this relief, additional disclosures on transition from HKAS 39 to HKFRS 9 are required.

The JV Target Group is in the process of making an assessment of the impact of these standards, amendments and interpretations on the Financial information of the JV Target Group upon their initial application.

2.2 Subsidiaries

2.2.1 Consolidation

Subsidiaries are all entities (including special purpose entities) over which the management team of the JV Target Group has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the management team of the JV Target Group controls another entity. The management team of the JV Target Group also assesses existence of control where it does not have more than 50% of the voting power but is able to govern the financial and operating policies by virtue of de-facto control. De-facto control may arise from circumstances such as enhanced minority rights or contractual terms between shareholders, etc.

Subsidiaries are fully consolidated from the date on which control is transferred to the management team of the JV Target Group. They are de-consolidated from the date that control ceases.

Inter-company transactions, balances, income and expenses on transactions between JV Target Group companies are eliminated. Profits and losses resulting from inter-company transactions that are recognized in assets are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the JV Target Group.

(a) Changes in ownership interests in subsidiaries without change of control

Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions – that is, as transactions with the owners in their capacity as owners. The difference between fair value of any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity.

– II-14 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANIES NO. 1 TO NO. 8

APPENDIX II

2.2.2 Separate financial statements

Investments in subsidiaries are accounted for at cost less impairment. Cost also includes direct attributable costs of investment. The results of subsidiaries are accounted for by the company on the basis of dividend and receivable.

Impairment testing of the investments in subsidiaries is required upon receiving dividends from these investments if the dividend exceeds the total comprehensive income of the subsidiary in the period the dividend is declared or if the carrying amount of the investment in the separate financial statements exceeds the carrying amount in the consolidated financial statements of the investee’s net assets including goodwill.

2.3 Associates

Associates are all entities over which the management team of the JV Target Group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting. Under the equity method, the investment is initially recognised at cost, and the carrying amount is increased or decreased to recognise the investor’s share of the profit or loss of the investee after the date of acquisition. The JV Target Group’s investment in associates includes goodwill identified on acquisition.

If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of the amounts previously recognised in other comprehensive income is reclassified to profit or loss where appropriate.

The JV Target Group’s share of post-acquisition profit or loss is recognised in the income statement, and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income with a corresponding adjustment to the carrying amount of the investment. When the JV Target Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the JV Target Group does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

The management team of the JV Target Group determines at each reporting date whether there is any objective evidence that the investment in the associate is impaired. If this is the case, the JV Target Group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognises the amount adjacent to ‘share of profit/(loss) of an associate’ in the income statement.

Profits and losses resulting from upstream and downstream transactions between the JV Target Group and its associate are recognised in the group’s financial statements only to the extent of unrelated investor’s interests in the associates. Unrealised losses are eliminated unless the transactions provides evidence of an impairment of the asset transferred. Accounting policies of associates have been changed where necessary to ensure consistency with the policies adopted by the JV Target Group.

Dilution gains and losses arising in investments in associates are recognised in the income statement.

2.4 Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the executive directors, that makes strategic decisions.

2.5 Foreign currency translation

(a) Functional and presentation currency

Items included in the financial statements of each of the JV Target Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). Since the majority of the assets and operations of the JV Target Group are located in the PRC, the combined financial statements are presented in Renminbi (“RMB”), which is the JV Target Group’s presentation currency.

– II-15 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANIES NO. 1 TO NO. 8

APPENDIX II

(b) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the consolidated income statement, except when deferred in equity as qualifying cash flow hedges and qualifying net investment hedges.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the income statement within “finance income or cost”. All other foreign exchange gains and losses are presented in the income statement within “other (losses)/gains – net”.

2.6 Property, plant and equipment

Property, plant and equipment are stated at historical cost less depreciation and any impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, only when it is probable that future economic benefits associated with the item will flow to the JV Target Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the income statement during the year in which they are incurred.

Depreciation on property, plant and equipment is calculated using the straight-line method to allocate their cost to their residual values over their estimated useful lives, as follows:

Vehicles 5 years Furniture and office equipment 5 years

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

Construction in progress represents the direct costs of construction incurred of property, plant and equipment less any impairment losses. No provision for depreciation is made on construction in progress until such time the relevant assets are completed and put into use. Construction in progress is reclassified to the appropriate category of property, plant and equipment when completed and ready for use.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within “Other gains/(losses),net” in the profit or loss.

2.7 Land use rights

All land in the PRC is state-owned and no individual land ownership right exists. The JV Target Group acquired the rights to use certain land and the premiums paid for such rights are recorded as land use rights.

Land use rights which are held for self-use are stated at cost and amortised over the use terms of 50 to 70 years using the straight-line method. Land use rights which are used for property development for sales are transferred to properties under development upon commencement of development and are measured at lower of cost and net realisable value.

2.8 Properties under development

Properties under development are stated at the lower of cost and net realisable value. Net realisable value takes into account the price ultimately expected to be realised, less applicable variable selling expenses and anticipated cost to completion.

Development cost of property comprises construction costs, land use rights cost, capitalised borrowing costs and professional fees incurred during the development period. On completion, the properties are transferred to completed properties held for sale.

– II-16 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANIES NO. 1 TO NO. 8

APPENDIX II

2.9 Completed properties held for sale

Completed properties remaining unsold as at the balance sheet dates are stated at the lower of cost and net realisable value.

Cost comprises development costs attributable to the unsold properties.

Net realisable value is determined by reference to the sale proceeds of properties sold in the ordinary course of business, less applicable variable selling expenses, or by management estimates based on prevailing marketing conditions.

2.10 Trade and other receivables

Trade receivables are amounts due from customers for properties sold or services performed in the ordinary course of business. If collection of trade and other receivables is expected in one year or less (or in the normal operating cycle of the business if longer), they are classified as current assets. If not, they are presented as non-current assets.

Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment.

2.11 Restricted cash

Restricted cash includes guarantee deposits for the JV Target Group’s bank loans and certain proceeds from pre-sale of properties according to the governmental regulations. For the guarantee deposits for bank loans, the restrictions are released when the JV Target Group repays the bank loans. For the restricted cash proceeds from pre-sale of properties, restrictions are to be released gradually in line with the progress of the properties’ development.

2.12 Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturity of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the balance sheet. Bank deposits which are restricted to use are not included in cash and cash equivalents.

2.13 Paid up capital

Capital paid up by the shareholders is classified as equity.

2.14 Trade and other payables

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.

Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

2.15 Borrowings

Borrowings are recognised initially at fair value, net of transactions costs incurred. Borrowings are subsequently carried at amortised cost; any difference between the proceeds (net of transactions costs) and the redemption value is recognised in the income statement over the year of the borrowings using the effective interest method.

Borrowings are classified as current liabilities unless the JV Target Group has an unconditional right to defer settlement of the liability for at least twelve months after the respective balance sheet date.

Borrowing costs incurred for the construction of any qualifying asset are capitalised during the year of time that is required to complete and prepare the asset for its intended use. Other borrowing costs are recognised as an expense in the year in which they are incurred.

– II-17 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANIES NO. 1 TO NO. 8

APPENDIX II

Borrowing is derecognised when, and only when the obligation specified in the contract is discharged or cancelled or expires.

2.16 Current and deferred income tax

The tax expense for the year comprises current and deferred tax. Tax is recognised in the income statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case the tax is also recognised in other comprehensive income or directly in equity, respectively.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries and associates operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation and establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred income tax is recognised, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill, the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transactions other than a business combination that at the time of the transactions affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes assets and liabilities relate to income taxes levied by the same taxation authority on either the taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

2.17 Employee benefits

In accordance with the rules and regulations in the PRC, the PRC based employees of the JV Target Group participate in various defined contribution retirement benefit plans organised by the relevant municipal and provincial governments in the PRC under which the JV Target Group and the PRC based employees are required to make monthly contributions to these plans calculated as a percentage of the employees’ salaries.

The municipal and provincial governments undertake to assume the retirement benefit obligations of all existing and future retired PRC based employees’ payable under the plans described above. Other than the monthly contributions, the JV Target Group has no further obligation for the payment of retirement and other post retirement benefits of its employees. The assets of these plans are held separately from those of the JV Target Group in independently administrated funds managed by the governments.

2.18 Provisions and contingent liabilities

Provisions for environmental restoration, restructuring costs and legal claims are recognised when: the JV Target Group has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated.

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.

Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessment of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognised as interest expense.

A contingent liability is a possible obligation that arises from past events and whose existence will only be confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the management team of the JV Target Group. It can also be a present obligation arising from past events that is not recognised because it is not probable that outflow of economic resources will be required or the amount of obligation cannot be measured reliably.

– II-18 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANIES NO. 1 TO NO. 8

APPENDIX II

A contingent liability is not recognised but is disclosed in the notes to the financial statements. When a change in the probability of an outflow occurs so that outflow is probable, it will then be recognised as a provision.

2.19 Revenue recognition

Revenue comprises the fair value of the consideration received or receivable for the sales of properties and services in the ordinary course of the JV Target Group’s activities. Revenue is shown, net of discount and after eliminating sales within the JV Target Group. Revenue is recognised as follows:

(a) Sales of properties

Revenue from sales of properties is recognised when the risks and rewards of properties are transferred to the purchasers, which is when the construction of relevant properties has been completed and the properties have been delivered to the purchasers and recoverability of related receivables is reasonably assured. Deposits and instalments received on properties sold prior to the date of revenue recognition are included in the consolidated balance sheets as advanced proceeds received from customers under current liabilities.

(b) Interest income

Interest income on bank deposits is recognized on a time proportion basis taking into account deposit balances and effective yield using the effective interest method. Interest income is reflected as finance income in the profit or loss.

2.20 Government grants

Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be received and the JV Target Group will comply with all attached conditions.

Government grants relating to property, plant and equipment are included in non-current liabilities as deferred government grants and are credited to the income statement on a straight-line basis over the expected lives of the related assets.

2.21 Leases

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the income statement on a straight-line basis over the year of the lease.

(a) The JV Target Group is the lessee

Payment made under operating leases (net of any incentives received from the lessor), are charged to the income statement on a straight-line basis over the year of the lease.

2.22 Financial guarantee liabilities

Financial guarantee liabilities are recognised initially at fair value. After initial recognition, such contracts are measured at the higher of the present value of the best estimate of the expenditure required to settle the present obligation and the amount initially recognised less cumulative amortisation.

Financial guarantee liabilities are derecognised from the balance sheet when, and only when, the obligation specified in the contract is discharged or cancelled or expired.

– II-19 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANIES NO. 1 TO NO. 8

APPENDIX II

3 FINANCIAL RISK MANAGEMENT

3.1 Financial risk factors

The JV Target Group’s activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk. The JV Target Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the JV Target Group’s financial performance.

Risk management is carried out by the central treasury department (“Group treasury”) of Greentown Real Estate under policies approved by the board of directors. JV Target Group treasury identifies, evaluates and hedges financial risks in close co-operation with the operating units. The board provides written principles for overall risk management, as well as written policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

(a) Market risk

(i) Foreign exchange risk

The JV Target Group’s normal operating activities are principally conducted in RMB since all of the operating entities are based in the PRC and most of the operating entities’ assets and liabilities were denominated in RMB. Therefore, the foreign exchange risk is low.

(ii) Cash flow and fair value interest rate risk

As the JV Target Group has no significant interest-bearing assets, the JV Target Group’s income and operating cash flows are substantially independent from changes in market interest rates.

The JV Target Group’s interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the JV Target Group to cash flow interest-rate risk which is partially offset by cash held at variable rates. Borrowings issued at fixed rates expose the JV Target Group to fair value interest-rate risk. During the Relevant Periods, the JV Target Group’s borrowings were all denominated in Renminbi.

The JV Target Group has not used any interest rate swaps to hedge its exposure to interest rate risk.

The table below sets out the JV Target Group’s exposure to interest rate risks. Included in the tables are the liabilities at carrying amounts, categorised by maturity dates.

RMB’million		Floating rates			Fixed rates		Total
	Less than	1 to 5		Less than	1 to 5
	1 year	years	Subtotal	1 year	Years	Subtotal
Borrowings
At 31 December 2009	–	1,400	1,400	–	483	483	1,883


At 31 December 2010	1,080	2,305	3,385	500	483	983	4,368


At 31 December 2011	1,580	2,283	3,863	1,064	245	1,309	5,172


At 30 June 2012	2,719	840	3,559	1,045	500	1,545	5,104

– II-20 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANIES NO. 1 TO NO. 8

APPENDIX II

As at 31 December 2009, 2010 and 2011 and 30 June 2012, if the interest rates on borrowings had been 100 basis points higher/lower with all other variables held constant, the capitalised interest would have been higher/lower by RMB12 million, RMB22 million, RMB38 million, and RMB24 million respectively.

The JV Target Group also analyses its interest rate exposure monthly by considering refinancing, renewal of existing positions and alternative financing.

(b) Credit risk

Credit risk is managed on group basis. Credit risk arises from cash and cash equivalents, restricted cash deposited with banks, other receivables due from related parties and third parties, notes receivables, as well as credit exposures to commercial customers who let space in our properties. Residential and commercial property sales are paid for through up-front cash transactions For banks and financial institutions, only independently rated parties with a minimum rating of ‘A’ are accepted. If there is no independent rating, risk control assesses the credit quality of the customer, taking into account its financial position, past experience and other factors. Sales to customers are settled in cash or using major credit cards.

With respect to banks, the larger State-owned banks in the PRC are mainly used for holding bank accounts in the JV Target Group.

Certain customers of the JV Target Group have arranged bank financing for their purchases of the properties. Certain entities of the JV Target Group have provided guarantees to secure obligations of such customers for repayments, normally up to the time when the customers obtain the legal certificates of the property ownership. Detailed disclosure of these guarantees is made in Note 26.

No credit limits were exceeded during the Relevant Periods, and management does not expect any losses from non-performance by these counterparties.

(c) Liquidity risk

Management of the JV Target Group aims to maintain sufficient cash and cash equivalents or have available funding through an adequate amount of available financing, including short-term and long-term bank borrowings to meet its construction commitments.

Due to the dynamic nature of the underlying businesses, the JV Target Group treasury maintains flexibility in funding by its ability to move cash and cash equivalents between different entities through entrusted loan arrangements.

– II-21 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANIES NO. 1 TO NO. 8

APPENDIX II

The table below analyses the JV Target Group’s financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date up to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within twelve months equal their carrying balances.

		Between	Between
	Less than	1 and 2	2 and 5
In RMB’million	1 year	years	years	Total
JV Target Group
At 31 December 2009
Borrowings	134	134	1,923	2,191
Trade and other payables (Note 15)	2,857	270	–	3,127
Financial guarantee (Note 26)	–	–	–	–


At 31 December 2010
Borrowings	189	1,340	1,628	3,157
Trade and other payables (Note 15)	4,983	61	–	5,044
Financial guarantee (Note 26)	–	–	–	–


At 31 December 2011
Borrowings	1,827	2,632	–	4,459
Trade and other payables (Note 15)	5,347	–	–	5,347
Financial guarantee (Note 26)	168	–	–	168


At 30 June 2012
Borrowings	2,964	1,433	–	4,397
Trade and other payables (Note 15)	5,881	–	–	5,881
Financial guarantee (Note 26)	340	–	–	340

Note: Trade and other payables in this analysis do not include advance proceeds from customers and the statutory liabilities including other taxes payables and payroll & welfare payables.

3.2 Capital risk management

In managing its capital risk, management considers capital to include paid up capital from equity holders and borrowings. The JV Target Group’s objective when managing capital is to safeguard its ability to continue as a going concern in order to provide returns for equity holders.

In order to maintain or adjust the capital structure, the JV Target Group may adjust the amount of dividends paid to equity holders, return capital to equity holders, or sell assets to reduce debt.

The JV Target Group actively and regularly reviews and manages its capital structure to ensure an optimal capital structure and equity holder returns, taking into consideration the future capital requirements of the JV Target Group and capital efficiency, project operating cash flows, projected capital expenditures and projected strategic investment opportunities.

Consistent with others in the industry, the JV Target Group monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings (including current and non-current borrowings as shown in the consolidated balance sheet) less cash and cash equivalents. Total capital is calculated as ‘equity’ as shown in the consolidated balance sheet, plus net debt.

– II-22 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANIES NO. 1 TO NO. 8

APPENDIX II

The gearing ratios of the JV Target Group as at 31 December 2009, 2010 and 2011 and 30 June 2012 were as follows:

		31 December	31 December	30 June
	2009	2010	2011	2012
	RMB’000	RMB’000	RMB’000	RMB’000
Total borrowings	1,883,000	4,368,000	5,172,100	5,103,650
Restricted cash	(323,332)	(4,342)	(55,148)	(157,122)
Cash and cash equivalents	(188,414)	(445,118)	(98,116)	(204,572)
Net debts	1,371,254	3,918,540	5,018,836	4,741,956
Total equity	682,423	1,827,864	1,401,478	1,689,724
Total capital	2,053,677	5,746,404	6,420,314	6,431,680
Gearing ratio	67%	68%	78%	74%

4 CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The JV Target Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below.

4.1 Construction costs estimation

In the JV Target Group, each project is divided into several phases according to the development and delivery plan. Cost of sales including construction costs specific to the phases and common costs allocable to the phases are calculated based on management best estimation of the total development costs for the whole project and the allocation to each phase at the time when the costs incurred.

4.2 Income taxes

The JV Target Group is subject to corporate income tax in the PRC. The JV Target Group recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred income tax assets and liabilities in the period in which such determination is made.

Deferred tax assets relating to certain temporary differences and tax losses are recognised when management considers to be probable that future taxable profit will be available against which the temporary differences or tax losses can be utilised. The outcome of their actual utilisation may be different.

As disclosed in Note 8, the JV Target Group has deferred tax assets from (1) the deferred deductible expenses, which are the expenses without sufficient tax documents received as at the balance sheet dates, (2) tax losses at the entity level, and (3) unpaid land appreciation tax accrued in the cost of sales in the profit or loss, which is a timing difference between the accounting profit and tax calculation.

Based on the development costs budget and the sales pricing plan, the directors are of the view that the property projects of the JV Target Group will ultimately generate profits and the deferred tax assets on the unpaid land appreciation tax is a temporary difference. Therefore, management considers that the risk over the recoverability of the deferred tax assets could only be due to a challenge of the deductibility of the expenses currently classified as temporary differences that would result in their reclassification as permanent differences.

– II-23 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANIES NO. 1 TO NO. 8

APPENDIX II

4.3 PRC land appreciation taxes

The JV Target Group is subject to land appreciation taxes in the PRC. However, since the implementation and settlement of these taxes varies among various tax jurisdictions in cities of the PRC, significant judgement is required in determining the amount of the land appreciation and its related taxes. The JV Target Group recognised these land appreciation taxes based on management’s best estimates according to its understanding of the interpretation of tax rules by various tax authorities. The final tax outcome could be different from the amounts that were initially recorded, and these differences will impact the income taxes and deferred income tax provisions in the years in which such taxes have been finalised with local tax authorities.

4.4 Provision for properties under development and completed properties held for sale

The JV Target Group assesses the carrying amounts of properties under development and completed properties held for sale based on the net realisable value of these properties, taking into account costs to completion based on past experience and net sales value based on prevailing market conditions. Provision is made when events or changes in circumstances indicate that the carrying amounts may not be realised. The assessment requires the use of judgment and estimates of future sale price of the properties. As at 31 December 2009, 2010 and 2011 and at 30 June 2012, if the estimated future sales prices had been 10% lower, the profit or loss before income tax of the JV Target Group for the Relevant Periods would have been lower by RMB0 million, RMB0 million, RMB126 million and RMB225 million.

– II-24 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANIES NO. 1 TO NO. 8

APPENDIX II

5 PROPERTY, PLANT AND EQUIPMENT

		Furniture and
	Vehicles	office equipment	Others	Total
	RMB’000	RMB’000	RMB’000	RMB’000
Year ended 31 December 2009
Opening net book amount	2,219	917	2,193	5,329
Additions	511	2,189	–	2,700
Disposals	–	(39)	–	(39)
Depreciation	(495)	(675)	(76)	(1,246)

Closing net book amount	2,235	2,392	2,117	6,744

At 31 December 2009
Costs	3,878	3,504	2,268	9,650
Accumulated depreciation	(1,643)	(1,112)	(151)	(2,906)

Net book amount	2,235	2,392	2,117	6,744


Year ended 31 December 2010
Opening net book amount	2,235	2,392	2,117	6,744
Additions	5,044	1,342	321	6,707
Disposals	(24)	–	–	(24)
Depreciation	(1,344)	(763)	(76)	(2,183)

Closing net book amount	5,911	2,971	2,362	11,244

At 31 December 2010
Costs	8,898	4,846	2,589	16,333
Accumulated depreciation	(2,987)	(1,875)	(227)	(5,089)

Net book amount	5,911	2,971	2,362	11,244


Year ended 31 December 2011
Opening net book amount	5,911	2,971	2,362	11,244
Additions	1,127	1,103	106	2,336
Depreciation	(1,672)	(967)	(218)	(2,857)

Closing net book amount	5,366	3,107	2,250	10,723

At 31 December 2011
Costs	10,025	5,949	2,695	18,669
Accumulated depreciation	(4,659)	(2,842)	(445)	(7,946)

Net book amount	5,366	3,107	2,250	10,723


Six months ended 30 June 2012
Opening net book amount	5,366	3,107	2,250	10,723
Additions	25	324	–	349
Disposals	–	–	(2,268)	(2,268)
Depreciation	(774)	(550)	18	(1,306)

Closing net book amount	4,617	2,881	–	7,498

At 30 June 2012
Costs	10,050	6,273	427	16,750
Accumulated depreciation	(5,433)	(3,392)	(427)	(9,252)

Net book amount	4,617	2,881	–	7,498


(Unaudited)
Six months ended 30 June 2011
Opening net book amount	5,911	2,971	2,362	11,244
Additions	967	607	106	1,680
Depreciation	(837)	(453)	(109)	(1,399)

Closing net book amount	6,041	3,125	2,359	11,525

At 30 June 2011
Costs	9,864	5,453	2,695	18,012
Accumulated depreciation	(3,823)	(2,328)	(336)	(6,487)

Net book amount	6,041	3,125	2,359	11,525

– II-25 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANIES NO. 1 TO NO. 8

APPENDIX II

6 DEFERRED INCOME TAX

Deferred income tax assets (“DTA”) recoverable: −within 12 months −after 12 months Deferred income tax liabilities to be settled: −within 12 months −after 12 months	2009 RMB’000 – 9,478 9,478 – – –	31 December 2010 2011 RMB’000 RMB’000 – – 11,558 25,296 11,558 25,296 – – – 2,398 – 2,398	30 June 2012 RMB’000 – 63,289 63,289 – 4,557 4,557

The movements in deferred income tax assets and liabilities are as follows:

(a) Deferred income tax assets

	Payments
	and accruals
	pending
	receipt of	Unpaid land
	sufficient tax	appreciation	Deductible
	documents	tax	tax loss	Total
	RMB’000	RMB’000	RMB’000	RMB’000
At 1 January 2009	–	–	4,059	4,059
(Charged)/credited to the profit or
loss	–	–	5,419	5,419

At 31 December 2009		–	9,478	9,478
(Charged)/credited to the profit or
loss	374	–	1,706	2,080

At 31 December 2010	374	–	11,184	11,558
(Charged)/credited to the profit or
loss	10,306	–	3,432	13,738

At 31 December 2011	10,680	–	14,616	25,296
(Charged)/credited to the profit or
loss	(3,315)	49,153	(7,845)	37,993

At 30 June 2012	7,365	49,153	6,771	63,289


(Unaudited)
At 1 January 2011	374	–	11,184	11,558
(Charged)/credited to the profit or
loss	–	–	27,741	27,741

At 30 June 2011	374	–	38,925	39,299

– II-26 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANIES NO. 1 TO NO. 8

APPENDIX II

(b) Deferred income tax liabilities

Tax expenses paid in advance RMB’000

At 1 January 2009	–
(Credited)/charged to profit or loss	–
At 31 December 2009	–
(Credited)/charged to profit or loss	–
At 31 December 2010	–
(Credited)/charged to profit or loss	2,398
At 31 December 2011	2,398
(Credited)/charged to profit or loss	2,159
At 30 June 2012	4,557

(Unaudited)
At 1 January 2011	–
(Credited)/charged to profit or loss	–
At 30 June 2011	–

7 PROPERTIES UNDER DEVELOPMENT

		31 December	31 December	30 June
	2009	2010	2011	2012
	RMB’000	RMB’000	RMB’000	RMB’000
Comprising:
Land use rights	4,815,851	10,789,845	10,768,974	10,303,812
Other development costs	465,986	1,312,170	2,382,400	1,844,447
Capitalised financial costs	804,543	998,903	1,392,849	1,071,461
Less: Provision for loss on
realisable value	–	–	(428,082)	(428,082)

	6,086,380	13,100,918	14,116,141	12,791,638

Including:
Properties under development to
be completed within 12 months	–	643,303	5,890,706	3,353,368
Properties under development to
be completed after 12 months	6,086,380	12,457,615	8,225,435	9,438,270
	6,086,380	13,100,918	14,116,141	12,791,638

The properties under development are all located in the PRC.

As at 31 December 2009, 2010 and 2011 and at 30 June 2012, certain properties under development with balance totalling RMB2,588 million, RMB7,472 million, RMB7,561 million and RMB6,983 million respectively were pledged as collaterals for the JV Target Group’s borrowings (Note 14).

– II-27 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANIES NO. 1 TO NO. 8

APPENDIX II

As at 31 December 2011, due to the real estate market downturn in Suzhou, impairment for properties under development of Suzhou Yuyuan of RMB275 million and Suzhou Rose Garden of RMB153 million are provided respectively. The carrying amount of properties under development has been reduced to their recoverable amount through recognition of an impairment loss. This loss has been included in ‘cost of goods sold’ in the income statement.

8 COMPLETED PROPERTIES HELD FOR SALE

						31 December	31 December	30 June
					2009	2010	2011	2012
					RMB’000	RMB’000	RMB’000	RMB’000
Completed	properties	held	for	sale	–	–	237,781	966,188

The completed properties held for sale are all located in the PRC.

As at 31 December 2009, 2010 and 2011 and at 30 June 2012, certain completed properties held for sale with balances totalling RMB0 million, RMB0 million, RMB0 million and RMB792 million were pledged as collaterals for the JV Target Group’s borrowings (Note 14).

9 PREPAYMENTS

		31 December		30 June
	2009	2010	2011	2012
	RMB’000	RMB’000	RMB’000	RMB’000
Prepaid business tax and surcharges	98,612	206,775	171,287	94,638
Prepaid income taxes	46,617	117,989	124,372	90,364
Prepayment for land use rights costs	445,821	85,821	85,821	85,821
	591,050	410,585	381,480	270,823

10 TRADE AND OTHER RECEIVABLES

		31 December	31 December	30 June
	2009	2010	2011	2012
	RMB’000	RMB’000	RMB’000	RMB’000
Trade receivables	–	–	–	10,228
Notes receivables	–	200	750	13,250
Amount due from related party
(Note 27)	262,223	914,704	257,295	125,699
Amount due from non-controlling
interests (Note (a))	5,644	43,698	63,800	63,851
Guarantee deposits to trust company	–	–	–	80,000
Deposits for construction	7,046	12,714	12,286	14,541
Others	7,285	9,922	8,343	25,092

	282,198	981,238	342,474	332,661

(a) The loans to non-controlling interests are investing activities paid on demand. The loans are unsecured and interest bearing with annual rates of 0% to 13.40% for the years ended 31 December 2009, 2010 and 2011 and the six months ended 30 June 2012 respectively.

(b) As at 31 December 2009, 2010 and 2011 and at 30 June 2012, the fair value of trade and other receivables approximated their carrying amounts.

– II-28 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANIES NO. 1 TO NO. 8

APPENDIX II

(c) The carrying amounts of the JV Target Group’s trade and other receivables are all denominated in RMB.
(d) The aging analysis of the JV Target Group’s trade and notes receivables is as follows:

		31 December		30 June
	2009	2010	2011	2012
	RMB’000	RMB’000	RMB’000	RMB’000
Within 90 days
– Trade receivables	–	–	–	10,228
– Notes receivables	–	200	750	13,250

The JV Target Group normally has no credit term to the customers. The trade receivables as at 30 June 2012 were receivable amount resulted from the differences between actual delivered gross floor areas (“GFA”) and the GFA agreed in the pre-sale contracts and are to be received from the customers.

Notes receivable were bank acceptance paid by certain customers, which are due within 3 months as at year/period end.

11 RESTRICTED CASH

		31 December	31 December	30 June
	2009	2010	2011	2012
	RMB’000	RMB’000	RMB’000	RMB’000
Guarantee deposits for bank loans	4,000	4,200	55,128	156,845
Restricted proceeds from pre-sale of
properties	319,332	142	20	277
	323,332	4,342	55,148	157,122


CASH AND CASH EQUIVALENTS
		31 December		30 June
	2009	2010	2011	2012
	RMB’000	RMB’000	RMB’000	RMB’000
Cash at bank and in hand
– Denominated in RMB	188,414	445,118	98,116	204,572

12 CASH AND CASH EQUIVALENTS

The JV Target Group earns interest on cash at bank, at floating bank deposit rates.

– II-29 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANIES NO. 1 TO NO. 8

APPENDIX II

13 COMBINED CAPITAL AND OTHER RESERVES

	Combined
	paid up
	capital of the	Other	Statutory
	subsidiaries	reserves	reserves	Total
	RMB’000	RMB’000	RMB’000	RMB’000
At 1 January 2009	112,200	–	–	112,200
Transactions with owners
Capital contribution	610,000	(45,900)	–	564,100
At 31 December 2009	722,200	(45,900)	–	676,300
Transactions with owners
Capital contribution	1,008,000	223,123	–	1,231,123
At 31 December 2010	1,730,200	177,223	–	1,907,423
Transactions with owners
Capital contribution	–	84,014	–	84,014
Transactions with non-controlling
interests	(120,000)	–	–	(120,000)
Statutory reserve	–	–	12,874	12,874
	(120,000)	84,014	12,874	(23,112)
At 31 December 2011	1,610,200	261,237	12,874	1,884,311
Transactions with owners
Capital contribution	–	45,900	–	45,900
At 30 June 2012	1,610,200	307,137	12,874	1,930,211


(Unaudited)
At 1 January 2011	1,730,200	177,223	–	1,907,423
Transactions with owners
Capital contribution	–	29,308	–	29,308
Transactions with non-controlling
interests	(120,000)	–	–	(120,000)

	(120,000)	29,308	–	(90,692)
At 30 June 2011	1,610,200	206,531	–	1,816,731

Note:

(a) PRC statutory reserves

In accordance with the relevant government regulations in the PRC and the provisions of the articles of association of the PRC companies now comprising the JV Target Group,10% of its net profit as shown in the accounts prepared under PRC accounting regulations is required to be appropriated to statutory common reserve, until the reserve reaches 50% of the registered capital. Appropriation of statutory reserve must be made before distribution of dividends to equity holders. This statutory reserve shall only be used to make up losses; to expand the JV Target Group entities’ production operation; or to increase the capital.

Upon approval by a resolution of an equity holders’ general meeting, the entities of the JV Target Group entities may convert this reserve into registered capital, provided that the unconverted remaining amount of reserve is not less than 25% of the registered capital.

– II-30 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANIES NO. 1 TO NO. 8

APPENDIX II

14 BORROWINGS

		31 December	31 December	30 June
	2009	2010	2011	2012
	RMB’000	RMB’000	RMB’000	RMB’000
Non-current
Secured, borrowed from:
– Banks	1,400,000	2,305,000	2,783,000	2,979,000
– Other financial institutions	483,000	483,000	1,309,100	1,044,650

	1,883,000	2,788,000	4,092,100	4,023,650
Less: Current portion of long-term
borrowings	–	–	(1,564,450)	(2,683,650)
	1,883,000	2,788,000	2,527,650	1,340,000


		31 December		30 June
	2009	2010	2011	2012
	RMB’000	RMB’000	RMB’000	RMB’000
Current
Secured, borrowed from:
– Banks	–	1,080,000	1,080,000	1,080,000
– Other financial institutions	–	500,000	–	–

Add: Current portion of long-term
borrowings	–	–	1,564,450	2,683,650
	–	1,580,000	2,644,450	3,763,650

In April 2009, Greentown Real Estate entered into an equity investment agreement with a third party trust investment company, pursuant to which, a trust fund scheme was to be established to finance the property development projects in certain Greentown Real Estate’s subsidiaries. Under this arrangement, the trust fund scheme has provided a total investment of RMB483 million to a subsidiary of the JV Target Group, Wuxi Greentown, in which RMB45.9 million was to acquire 45% equity interests of Wuxi Greentown by the trust company on behalf of the trust fund scheme from Greentown Real Estate and the remaining RMB437.1 million was a borrowing at annual interest rate of 14% to Wuxi Greentown. This borrowing has been fully repaid in January 2012.

In March 2011, another similar arrangement was made between Greentown Real Estate and another third party trust company on a total investment of RMB823.75 million in Suzhou Yuyuan, in which, RMB23.75 million was to acquire 9.5% equity interest of Suzhou Yuyuan and RMB800 million was a borrowing at annual interest rate of 9.8%. The borrowing has been repaid in October 2012.

According to the agreements between Greentown Real Estate and the trust companies on behalf of the trust fund schemes, Greentown Real Estate has the obligations to acquire back both equity interests at the same considerations at the end of the respective borrowing periods and the trust fund schemes do not bear any operating profit or loss during the borrowing periods. In substance, the above equity interests were legally transferred to the trust companies as collaterals. Therefore, the JV Target Group accounted for the respective total investments of RMB483 million and RMB823.75 million as borrowings.

As at 31 December 2009, 2010, 2011 and as at 30 June 2012, the JV Target Group’s borrowings totalling RMB1,883 million, RMB4,368 million, RMB5,172 million and RMB5,104 million respectively were secured or jointly secured by the JV Target Group’s properties under development and completed properties held for sale totalling RMB2,588 million, RMB7,472 million, RMB7,561 million and RMB7,775 million respectively, certain equity interests of the entities comprising the JV Target Group (including those legally transferred as collateral).

– II-31 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANIES NO. 1 TO NO. 8

APPENDIX II

(a) Long-term borrowings

The JV Target Group’s borrowings as at 31 December 2009, 2010, 2011 and as at 30 June 2012 were repayable as follows:

		31 December	31 December	30 June
	2009	2010	2011	2012
	RMB’000	RMB’000	RMB’000	RMB’000
Within 1 year	–	–	1,564,450	2,683,650
Between 1 and 2 years	–	1,223,000	2,527,650	1,340,000
Between 2 and 5 years	1,883,000	1,565,000	–	–
	1,883,000	2,788,000	4,092,100	4,023,650

The weighted-average effective interest rates for the year ended 31 December 2009, 2010, 2011 and the six months ended 30 June 2011 and 2012 are 7.12%, 6.79%, 7.75%, 7.48% and 8.58% respectively.

15 TRADE AND OTHER PAYABLES

		31 December	31 December	30 June
	2009	2010	2011	2012
	RMB’000	RMB’000	RMB’000	RMB’000
Trade payables	345,782	163,836	621,259	767,917
Notes payables	–	–	–	101,707
Advanced proceeds from customers	1,722,023	3,742,458	3,381,477	1,824,808
Amount due to related party
(Note 27)	2,379,984	4,661,218	4,109,081	4,334,045
Amount due to non-controlling
interests (Note (a))	373,073	146,341	277,456	282,876
Other taxes payable	53,089	177,011	201,479	209,201
Other payables	8,032	48,505	268,123	366,124
Interest payables	21,027	23,888	71,076	28,677
Payroll and welfare payables	2,996	3,044	3,029	2,497
	4,906,006	8,966,301	8,932,980	7,917,852

(a) The borrowing from non-controlling interests are financing activities received on demand.

The borrowings are unsecured and interest bearing with annual rates of 0% to 13.40% for the years ended 31 December 2009, 2010 and 2011 and the six months ended 30 June 2012 respectively.

(b) The aging analysis of the JV Target Group’s trade payables is as follows:

		31 December	31 December	30 June
	2009	2010	2011	2012
	RMB’000	RMB’000	RMB’000	RMB’000
Within 180 days	75,490	102,800	621,179	591,259
180 – 365 days	112	–	–	176,578
Over 365 days	270,180	61,036	80	80
	345,782	163,836	621,259	767,917

– II-32 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANIES NO. 1 TO NO. 8

APPENDIX II

16 EXPENSES BY NATURE

					Six months ended	Six months ended	Six months ended
		Year ended 31		December	30	June
	2009		2010	2011	2011		2012
	RMB’000		RMB’000	RMB’000	RMB’000		RMB’000
					(unaudited)
Costs of properties sold:
– Business tax and
related surcharges
(Note 17)	–		–	73,925	–		134,369
– Land use rights costs	–		–	199,829	–		521,361
– Other development
costs	–		–	695,063	–		735,772
– Capitalized finance
costs	–		–	3,317	–		228,763
Provision for loss on
realizable value of
properties under
development				428,082
Staff costs (Note 20)	6,083		14,456	15,944	8,886		9,775
Advertisement and
promotion costs	10,519		21,694	37,571	17,948		10,484
Office and travel expenses	4,652		13,004	18,489	9,160		7,911
Other tax expenses	1,175		6,620	3,971	2,979		1,101
Consulting expenses	130		847	918	587		395
Entertainment expenses	1,664		3,287	4,115	1,582		2,380
Depreciation	704		1,298	2,089	946		1,416
Others	311		572	658	490		2,035

Total cost of sales, selling
and marketing costs and
administrative expenses	25,238		61,778	1,483,971	42,578		1,655,762

17 BUSINESS TAX AND RELATED SURCHARGES

The PRC companies now comprising the JV Target Group are subject to the following sales tax and surcharges on their revenues:

Types			Tax rate Tax bases	Tax rate Tax bases
(a) Business tax			5% – Sales of		properties
(b) Urban construction and maintenance tax			7% – Business		tax	paid
(c) Education surcharge			3% – Business		tax	paid
(d) Local education surcharge			0%-2% – Business		tax	paid
(e) Anti-flood fund			0%-1% – Business		tax	paid
OTHER INCOME
						Six months ended
		Year ended 31		December		30	June
	2009		2010	2011		2011		2012
	RMB’000		RMB’000	RMB’000		RMB’000		RMB’000
						(unaudited)
Interest income on loans to
related parties	–		34,840	11,343		7,342		–
Interest income on loans to
non-controlling interests	–		1,088	3,366		–		–
Government subsidy
(Note (a))	–		–		–	–		6,455
Others	–		214	16		7		1,756

	–		36,142	14,725		7,349		8,211

18 OTHER INCOME

Note (a)

In the six months ended 30 June 2012, Tianjin Yijun received a government subsidy of RMB6.46 million from the Tianjin Binhai New Area Management Committee.

– II-33 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANIES NO. 1 TO NO. 8

APPENDIX II

19 OTHER EXPENSES

							Six months ended	Six months ended	Six months ended
		Year ended 31		December			30	June
	2009		2010		2011		2011		2012
	RMB’000		RMB’000		RMB’000		RMB’000		RMB’000
							(unaudited)
Compensation for delay of
delivery of properties	–		–		42,718		–		12,560
Others	60		20			882	873		111

	60		20		43,600		873		12,671

20 STAFF COSTS

						Six months ended	Six months ended	Six months ended
		Year ended 31		December		30	June
	2009		2010		2011	2011		2012
	RMB’000		RMB’000		RMB’000	RMB’000		RMB’000
						(unaudited)
Wages and salaries	5,182		11,029		11,988	7,163		7,826
Pension costs	398		1,186		1,309	611		761
Staff welfare costs	503		2,241		2,647	1,112		1,188

	6,083		14,456		15,944	8,886		9,775

21 DIRECTORS’ AND SENIOR MANAGEMENT’S EMOLUMENTS

(a) Directors’ and senior management’s emoluments

The Directors’ emoluments are set out below:

					Other
				Share	benefits
		Discretionary		options	including
Name of Director	Fees	Salary	bonuses	expenses	pension	Total
	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000
Year ended 31 December	2009:
Qian Xiaohua	–	–	–	–	–	–


Year ended 31 December	2010:
Qian Xiaohua	–	–	–	–	–	–
Wang Hongbin	–	–	–	–	–	–


Year ended 31 December	2011:
Qian Xiaohua	–	–	–	–	–	–
Wang Hongbin	–	–	–	–	–	–


Six months ended 30 June 2012:
Qian Xiaohua	–	–	–	–	–	–
Wang Hongbin	–	–	–	–	–	–

Note: The Directors presented in this analysis are the Directors of the newly established Joint Venture Company.

– II-34 –

APPENDIX II

ACCOUNTANT’S REPORT ON THE TARGET COMPANIES NO. 1 TO NO. 8

(b) Five highest paid individuals

The five individuals whose emoluments were the highest in the JV Target Group in each of the three years ended 31 December 2009, 2010 and 2011 and the six months ended June 30, 2011 and 2012 are not included in the analysis presented in Note 21(a) above. The emoluments payable to the five individuals for the year ended 31 December 2009, 2010 and 2011 and six months end 30 June 2011 and 2012 respectively are as follows:

						Six months ended	Six months ended	Six months ended
			Year ended 31		December	30	June
		2009		2010	2011	2011		2012
		RMB’000		RMB’000	RMB’000	RMB’000		RMB’000
						(unaudited)
Salary	and other benefit	3,136		2,672	5,276	1,299		1,252
Social	security costs	335		445	345	200		195
Total		3,471		3,117	5,621	1,499		1,447

(c) In the year ended 31 December 2009, 2010 and 2011 and the six months ended 30 June 2012, no director or any of the five highest paid individuals received any emolument from the JV Target Group as an inducement to join, upon joining the JV Target Group, or as compensation for loss of office.

22 FINANCE INCOME AND COSTS

							Six months ended	Six months ended	Six months ended
			Year ended 31		December		30	June
		2009		2010		2011	2011		2012
		RMB’000		RMB’000		RMB’000	RMB’000		RMB’000
							(unaudited)
(a)	Finance income
	– Interest income on
	bank deposits	2,915		5,464		1,548	938		626


(b)	Finance costs
	Interest expenses on
	– bank borrowings	70,732		131,586		362,652	181,332		143,050
	– borrowings from
	non-bank
	financial
	institutions	43,346		64,736		101,735	31,850		68,981
	– borrowings from
	related parties	40,152		56,994		154,473	76,215		97,001
	– borrowings from
	non-controlling
	interests	36,901		–		5,991	404		11,534

		191,131		253,316		624,851	289,801		320,566
	Less:
	Capitalised
	finance costs	(187,197)		(194,360)		(399,224)	(176,989)		(200,490)

		3,934		58,956		225,627	112,812		120,076

The annual capitalisation rate used to determine the amount of the interest incurred eligible for capitalisation in the years ended 31 December 2009, 2010 and 2011 and the six months ended 30 June 2011 and 2012 were 11.11%, 7.06%, 9.76%, 8.74% and 9.91% respectively.

– II-35 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANIES NO. 1 TO NO. 8

APPENDIX II

23 INCOME TAX EXPENSES

						Six months ended	Six months ended	Six months ended
		Year ended 31		December		30	June
	2009		2010		2011	2011		2012
	RMB’000		RMB’000		RMB’000	RMB’000		RMB’000
						(unaudited)
Corporate income tax
charge (“CIT”)
– Current income tax	–		3,601		76,323	−		163,114
– Deferred income tax	(5,419)		(2,080)		(11,340)	(27,741)		(35,834)

	(5,419)		1,521		64,983	(27,741)		127,280

Land appreciation tax
(“LAT”)	–		–		25,055	–		222,880

	(5,419)		1,521		90,038	(27,741)		350,160

(a) CIT

The tax on the JV Target Group’s profit before tax differs from the theoretical amount that would arise using the weighted average tax rate applicable to profits of the consolidated entities as follows:

							Six months ended	Six months ended	Six months ended
		Year ended 31		December			30	June
	2009		2010		2011		2011		2012
	RMB’000		RMB’000		RMB’000		RMB’000		RMB’000
							(unaudited)
(Loss)/profit before income
tax	(26,317)		(86,161)		(420,362)		(155,574)		592,506
Income tax calculated at
statutory rate of 25%	(6,579)		(21,540)		(105,091)		(38,894)		148,127
LAT deduction	–		–		(6,264)		–		(55,720)
Share of other
comprehensive income
of associate	–		81			(9)	45		(7)
Share of other
comprehensive income
of jointly controlled
entity	–		1,672		4,127		1,855		2,690
Tax losses for which no
deferred income tax
asset was recognised	983		19,959		171,663		9,223		31,866
Non-deductible expenses	177		1,349			557	30		324
	(5,419)		1,521		64,983		(27,741)		127,280

All entities comprising the JV Target Group are incorporated and operate in the PRC. The income tax provision of the JV Target Group has been calculated at the applicable tax rate of 25% and the estimated assessable profits for the years ended 31 December 2009, 2010 and 2011 and the six months ended 30 June 2012 based on existing legislations, interpretations and practices.

– II-36 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANIES NO. 1 TO NO. 8

APPENDIX II

(b) LAT

PRC LAT is levied at progressive rates ranging from 30% to 60% on the appreciation of land value, being the proceeds of sales of properties less deductible expenditures including lease charges for land use rights and all property development expenditures. LAT is included in the consolidated income statements as income tax expense.

24 CASH USED IN OPERATIONS

(Loss)/profit before income taxes Adjustments for: – Total finance costs – Gain on disposal of property, plant and equipment (“PP&E”) – Depreciation – Share of loss from associates and jointly control entities Changes in working capital – Restricted cash proceeds from pre- sale of properties – Properties under development and completed properties held for sale, net – Prepayments – Trade and other receivables – Advanced proceeds from customers – Trade and other payables Cash generated from/ (used in) operating activities	Year ended 31 December 2009 2010 2011 RMB’000 RMB’000 RMB’000 (26,317) (86,161) (420,362) 3,934 58,956 225,627 – – – 1,246 2,183 2,857 – 7,013 16,471 (319,332) 319,190 122 (3,738,429) (6,820,177) (853,780) (544,433) 298,454 153,477 49,995 (8,571) 1,330 1,722,023 2,020,435 (360,981) 49,561 (46,480) 733,515 (2,801,752) (4,255,158) (501,724)	Six months ended 30 June 2011 2012 RMB’000 RMB’000 (unaudited) (155,574) 592,506 112,812 120,076 – – 1,399 1,306 7,598 10,732 – (257) (691,409) 796,587 31,209 201,021 740,890 (124,454) 376,531 (1,556,669) 1,047,316 304,310 1,470,772 345,158

In the cash flow statement, proceeds from sale of PP&E comprise:

						Six months ended	Six months ended	Six months ended
		Year ended 31		December		30	June
	2009		2010		2011	2011		2012
	RMB’000		RMB’000		RMB’000	RMB’000		RMB’000
						(unaudited)
Net book amount (Note 5)	39		24		–	–		2,268

Proceeds from disposal
of PP&E	39		24		–	–		2,268

– II-37 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANIES NO. 1 TO NO. 8

APPENDIX II

25 COMMITMENTS

(a) Property development expenditure at the balance sheet date but not yet incurred is as follows:

		31 December	31 December	30 June
	2009	2010	2011	2012
	RMB’000	RMB’000	RMB’000	RMB’000
Property development expenditure
– Contracted but not provided for	3,362,388	1,515,282	1,498,838	1,806,092
– Authorized but not contracted	13,477,025	22,924,840	20,357,447	19,737,951

	16,839,413	24,440,122	21,856,285	21,544,043

(b) Operating lease commitments

The future aggregate minimum rental expenses on operating leases in respect of certain office buildings under non-cancellable operating leases contracts are payable in the following periods:

		31 December	31 December	30 June
	2009	2010	2011	2012
	RMB’000	RMB’000	RMB’000	RMB’000
No later than 1 year	1,915	8,890	10,591	6,495
Later than 1 year and no later
than 5 years	1,646	7,315	4,766	1,619
	3,561	16,205	15,357	8,114

26 FINANCIAL GUARANTEE

Guarantee on mortgage facilities

The JV Target Group had the following liabilities in respect of financial guarantees on mortgage facilities:

		31 December	31 December	30 June
	2009	2010	2011	2012
	RMB’000	RMB’000	RMB’000	RMB’000
Guarantees in respect of mortgage
facilities for certain purchasers of
the JV Target Group’s property
units	–	–	168,149	339,736

The JV Target Group has provided guarantees for certain customers’ bank borrowings for their purchases of the JV Target Group’s developed properties to secure obligations of such customers for repayments. Such guarantees terminate upon the earlier of (i) the transfer of the real estate ownership certificate to the purchaser which will generally occur within an average period of two to three years from the completion of the guarantee registration; or (ii) the satisfaction of mortgage loans by the purchasers of the properties.

Pursuant to the terms of the guarantees, upon default of mortgage payments by these purchasers, the JV Target Group is responsible to repay the outstanding mortgage principal together with accrued interest and penalties owed by the defaulting purchasers to the banks and the JV Target Group is entitled to take over the legal title and possession of the related properties. The JV Target Group’s guarantee period starts from the date of grant of the mortgage. The directors consider that the likelihood of default of payments by purchasers is minimal and therefore the financial guarantee measured at fair value is immaterial.

– II-38 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANIES NO. 1 TO NO. 8

APPENDIX II

27 RELATED PARTY TRANSACTIONS

The JV Target Group is controlled by Greentown Real Estate during the Relevant Periods. The ultimate controlling party of the JV Target Group is Mr. Song Weiping.

(a) Name and relationship with related parties

Name

Relationship

Greentown Real Estate Shareholder

(b) Transactions with related parties

During the years ended 31 December 2009, 2010 and 2011 and the six months ended 30 June 2011 and 2012, the JV Target Group had the following significant transactions with related parties:

								Six months ended	Six months ended	Six months ended
				Year ended 31 December				30	June
				2009		2010	2011	2011		2012
		RMB’000			RMB’000		RMB’000	RMB’000		RMB’000
								(unaudited)
(i) Borrowings from related	parties
Greentown Real Estate		2,256,500			2,892,073		555,499	261,000		159,627


(ii) Loans to related parties
Greentown Real Estate			262,213			652,469	14,000	–		–


(iii) Collection of loan to related parties
Greentown Real Estate				–		–	671,436	71,434		134,265


(iv) Repayment of borrowings from				related parties
Greentown Real Estate			597,666			637,029	1,251,820	1,056,000		30,930


(v) Interests income from related parties
Greentown Real Estate				–		34,840	11,343	7,342		–


(vi) Interests costs to related parties
Greentown Real Estate				40,152		56,994	154,473	76,215		97,001

Including:
– capitalised interests costs				36,218		–	2,043	–		15,449

– II-39 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANIES NO. 1 TO NO. 8

APPENDIX II

The borrowings/loans from/to related parties were financing activities received/paid on demand. The borrowings/loans are unsecured and interest bearing with annual rates of 0% to 13.425% for the years ended 31 December 2009, 2010 and 2011 and the six months ended 30 June 2012 respectively.

The annual weighted-average interest rate for the years ended 31 December 2009, 2010 and 2011 and the six months ended 30 June 2011 and 2012 were 2.62%, 1.62%, 3.53%, 3.56% and 2.30% respectively.

The directors of the JV Target Group are of the view that the related party transactions disclosed above were carried out at terms mutually negotiated between the JV Target Group entities and the respective related parties.

(c) Key management compensation

Key management includes directors (executive and non-executive), members of the Executive Committee, the Company Secretary and the Head of Internal Audit. Their compensation has been disclosed in Note 21 of the financial statements.

(d) Related party balances

			31 December	31 December	30 June
		2009	2010	2011	2012
		RMB’000	RMB’000	RMB’000	RMB’000
	(i) Amount due from related parties
	Greentown Real Estate	262,213	914,682	257,246	122,981


			31 December		30 June
		2009	2010	2011	2012
		RMB’000	RMB’000	RMB’000	RMB’000
	(ii) Amount due to related parties
	Greentown Real Estate	2,379,984	4,657,182	4,103,991	4,329,689


28	FINANCIAL INSTRUMENTS BY CATEGORY
			31 December		30 June
		2009	2010	2011	2012
		RMB’000	RMB’000	RMB’000	RMB’000
(a)	Loans and receivables
	Assets as per balance sheet
	Trade and other receivables	282,198	981,238	342,474	332,661
	Restricted cash	323,332	4,342	55,148	157,122
	Cash and cash equivalents	188,414	445,118	98,116	204,572


(b)	Financial liabilities at amortised costs
	Liabilities as per balance sheet
	Borrowings	1,883,000	4,368,000	5,172,100	5,103,650
	Trade and other payables excluding statutory liabilities	3,127,898	5,187,788	5,346,995	5,881,346

– II-40 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANIES NO. 1 TO NO. 8

APPENDIX II

29 DIVIDENDS

No dividend has been paid or declared by the entities of the JV Target Group in the Relevant Periods.

30 INVESTMENT IN AN ASSOCIATE

		31 December		30 June
	2009	2010	2011	2012
	RMB’000	RMB’000	RMB’000	RMB’000
Equity investment in an associate	–	34,681	90,050	90,077


Beginning of year/period	–	–	34,681	90,050
Investment in an associate (Note a)	–	35,005	55,333	–
Share of (loss)/profit of an associate	–	(324)	36	27
End of year/period	–	34,681	90,050	90,077

Note a

On 25 January 2010, Wuxi Taihu was newly established as an associate of Greentown Real Estate.

At 31 December 2010

	Country of
	incorporation	Assets	Liabilities	Revenue	Profit/(loss)		Interest
		RMB’000	RMB’000	RMB’000		RMB’000	%
Wuxi Taihu	PRC	322,200	233,274	–		(831)	39%


At 31 December 2011
		Assets	Liabilities	Revenue	Profit/(loss)		Interest
		RMB’000	RMB’000	RMB’000		RMB’000	%
Wuxi Taihu		1,636,606	1,405,709	–		92	39%


At 30 June 2012
		Assets	Liabilities	Revenue	Profit/(loss)		Interest
		RMB’000	RMB’000	RMB’000		RMB’000	%
Wuxi Taihu		1,701,096	1,470,129	–		70	39%

– II-41 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANIES NO. 1 TO NO. 8

APPENDIX II

31 INVESTMENT IN A JOINTLY CONTROLLED ENTITY

		31 December	31 December	30 June
	2009	2010	2011	2012
	RMB’000	RMB’000	RMB’000	RMB’000
Equity investment in a jointly
controlled entity	–	181,429	217,353	206,594


Beginning of year/period	–	–	181,429	217,353
Investment in a jointly controlled
entity (Note (a)	–	188,118	52,431	–
Share of (loss)/profit of a jointly
controlled entity	–	(6,689)	(16,507)	(10,759)
End of year/period	–	181,429	217,353	206,594

Note a

On 1 November 2010, Changzhou Greentown was newly established as a jointly controlled entity of Greentown Real Estate.

At 31 December 2010

	Country of
	incorporation	Assets	Liabilities	Revenue	Profit/(loss)		Interest
		RMB’000	RMB’000	RMB’000		RMB’000	%
Changzhou
Greentown	PRC	1,036,661	546,315	–		(18,079)	37%


At 31 December 2011
		Assets	Liabilities	Revenue	Profit/(loss)		Interest
		RMB’000	RMB’000	RMB’000		RMB’000	%
Changzhou Greentown		1,160,622	573,180	–		(44,612)	37%


At 30 June 2012
		Assets	Liabilities	Revenue	Profit/(loss)		Interest
		RMB’000	RMB’000	RMB’000		RMB’000	%
Changzhou Greentown		1,190,342	631,980	–		(29,079)	37%

– II-42 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANIES NO. 1 TO NO. 8

APPENDIX II

32 EVENTS AFTER THE BALANCE SHEET DATE

(a) Acquisitions of new land use rights

(1) On 25 July 2012, Shanghai Lvshun has acquired a piece of land use right in the PRC through an open tendering process. The consideration of the acquisition approximates to RMB1,644 million.
(2) On 13 September 2012, Shanghai Lvshun together with an independent third party jointly acquired a piece of land use right in PRC through an open tendering process. The consideration of the acquisition approximates to RMB834 million.
(3) On 11 October 2012, the Joint Venture Company together with a third party company jointly acquired a piece of land use right in Shanghai at the consideration of RMB2.12 billion through an open tendering process.
(b) As at 21 September 2012, Sunac Zhidi has paid RMB3,358 million to Greentown Real Estate, of which RMB1,806 million was for the acquisition of amounts due from the Target Companies to Greentown Real Estate.

– II-43 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANIES NO. 1 TO NO. 8

APPENDIX II

II SUBSEQUENT FINANCIAL STATEMENTS

No audited financial statements have been prepared by any companies comprising the JV Target Group in respect of any period subsequent to 30 June 2012 up to the date of this report.

No dividend or distribution has been declared or made by any companies comprising the JV Target Group in respect of any period subsequent to 30 June 2012.

Yours faithfully, PricewaterhouseCoopers Certified Public Accountants Hong Kong

– II-44 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANY NO. 9

APPENDIX III

The following is the text of a report for the Woods Golf Group received from the Company’s reporting accountant, PricewaterhouseCoopers, Certified Public Accountants, Hong Kong, for the purpose of incorporation in this circular.

==> picture [67 x 49] intentionally omitted <==

30 October 2012

The Directors Sunac China Holdings Limited

Dear Sirs,

We report on the financial information of Shanghai Greentown Woods Golf Villas Development Co., Ltd. (the “Woods Golf”) and its subsidiary (together, the “Woods Golf Group”), which comprises the consolidated balance sheets of Woods Golf as at 31 December 2009, 2010 and 2011 and 30 June 2012, the balance sheets of Woods Golf as at 31 December 2009, 2010 and 2011 and 30 June 2012, and the consolidated statements of comprehensive income, the consolidated statements of changes in equity and the consolidated statements of cash flows of Woods Golf for each of the years ended 31 December 2009, 2010 and 2011 and the six-month period ended 30 June 2012 (the “Relevant Periods”) and a summary of significant accounting policies and other explanatory information. This financial information has been prepared by the directors of Sunac China Holdings Limited (the “Company”) and is set out in Sections I to II below for inclusion in Appendix III to the circular of the Company dated 30 October 2012 (the “Circular”) in connection with the proposed acquisition of Woods Golf by the Company.

Woods Golf was incorporated in the People’s Republic of China (“PRC”) on 19 June 2002 as a company with limited liability.

As at the date of this report, Woods Golf has direct interest in the subsidiary as set out in Note 1 of Section I below.

The directors of Woods Golf have prepared the consolidated financial statements of Woods Golf for the Relevant Periods, in accordance with Hong Kong Financial Reporting Standards (“HKFRSs”) issued by the Hong Kong Institute of Certified Public Accountants (the “HKICPA”) (the “Underlying Financial Statements”). We have audited the Underlying Financial Statements in accordance with the Hong Kong Standards on Auditing (the “HKSA”) issued by the HKICPA pursuant to separate terms of engagement with the Company and Woods Golf.

The directors of Woods Golf are responsible for the preparation of the Underlying Financial Statements that give a true and fair view in accordance with HKFRSs, and for such internal control as the directors determine is necessary to enable the preparation of the Underlying Financial Statements that are free from material misstatement, whether due to fraud or error.

– III-1 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANY NO. 9

APPENDIX III

The financial information has been prepared based on the Underlying Financial Statements, with no adjustment made thereon.

DIRECTORS’ RESPONSIBILITY FOR THE FINANCIAL INFORMATION

The directors of the Company are responsible for the preparation of the financial information that gives a true and fair view in accordance with HKFRSs and accounting policies adopted by the Company and its subsidiaries (together, the “Group”) as set out in the annual report of the Company for the year ended 31 December 2011.

REPORTING ACCOUNTANT’S RESPONSIBILITY

OPINION

In our opinion, the financial information gives, for the purpose of this report, a true and fair view of the state of affairs of Woods Golf and of Woods Golf Group as at 31 December 2009, 2010 and 2011 and 30 June 2012 and of Woods Golf Group’s results and cash flows for the Relevant Periods then ended.

REVIEW OF STUB PERIOD COMPARATIVE FINANCIAL INFORMATION

We have reviewed the stub period comparative financial information set out in Section I below included in Appendix III to the Circular which comprises the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows of Woods Golf for the six months ended 30 June 2011 and a summary of significant accounting policies and other explanatory information (the “Stub Period Comparative Financial Information”).

The directors of the Company are responsible for the preparation and presentation of the Stub Period Comparative Financial Information in accordance with the accounting policies set out in Note 2 of Section I below and the accounting policies adopted by the Group as set out in the annual report of the Company for the year ended 31 December 2011.

Based on our review, nothing has come to our attention that causes us to believe that the Stub Period Comparative Financial Information, for the purpose of this report, is not prepared, in all material respects, in accordance with the accounting policies set out in Note 2 of Section I below.

– III-2 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANY NO. 9

APPENDIX III

I. FINANCIAL INFORMATION OF WOODS GOLF GROUP

The following is the financial information of Woods Golf and Woods Golf Group prepared by the directors of the Company as at 31 December 2009, 2010 and 2011 and 30 June 2012 and for each of the years ended 31 December 2009, 2010 and 2011 and the six months ended 30 June 2011 and 2012 (the “Financial Information”):

CONSOLIDATED BALANCE SHEETS OF WOODS GOLF

					As at
	Note	As at 31 December			30 June
		2009	2010	2011	2012
		RMB’000	RMB’000	RMB’000	RMB’000
ASSETS
Non-current assets
Property, plant and
equipment	5	21,492	20,310	18,577	18,383
Deferred income tax assets	6	11,324	−	3,105	9,432

		32,816	20,310	21,682	27,815

Current assets
Properties under
development	7	771,760	1,102,206	656,320	853,015
Completed properties held
for sale	8	303,653	74,216	268,489	239,982
Prepaid taxes	9	22,273	142,283	75,665	42,653
Trade and other
receivables	10	20,683	19,795	4,287	6,946
Amount due from related
parties	28(d)	802,253	2,491,227	312,641	410,544
Cash and cash equivalents	11	323,995	99,035	7,083	32,991
		2,244,617	3,928,762	1,324,485	1,586,131

Total assets		2,277,433	3,949,072	1,346,167	1,613,946

– III-3 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANY NO. 9

APPENDIX III

					As at
	Note	As at 31 December			30 June
		2009	2010	2011	2012
		RMB’000	RMB’000	RMB’000	RMB’000
EQUITY
Capital and reserves
attributable to equity
owner of Woods Golf
Paid-up capital		100,000	196,080	196,080	196,080
Other reserves	12	49,041	66,067	84,340	84,340
Retained earnings		36,180	40,148	192,220	339,646
Total equity		185,221	302,295	472,640	620,066


LIABILITIES
Non-current liabilities
Borrowings	14	821,670	19,229	16,670	15,338
Deferred income tax
liabilities	6	−	3,060	−	−

		821,670	22,289	16,670	15,338


Current liabilities
Advanced proceeds from
customers		194,197	738,572	438,750	268,054
Trade and other payables	13	594,827	595,297	337,586	526,312
Current income tax
liabilities		111,122	30,043	14,432	68,295
Amount due to related
parties	28(d)	370,396	206,656	41,089	115,881
Borrowings	14, 28(d)	–	2,053,920	25,000	–
		1,270,542	3,624,488	856,857	978,542

Total liabilities		2,092,212	3,646,777	873,527	993,880

Total equity and
liabilities		2,277,433	3,949,072	1,346,167	1,613,946


Net current assets		974,075	304,274	467,628	607,589


Total assets less current
liabilities		1,006,891	324,584	489,310	635,404

– III-4 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANY NO. 9

APPENDIX III

BALANCE SHEETS OF WOODS GOLF

						As at
	Note	As at 31 December				30 June
		2009	2010		2011	2012
		RMB’000	RMB’000	RMB’000		RMB’000
ASSETS
Non-current assets
Investment in a subsidiary	29	–	–		1,000	1,000
Property, plant and equipment	5	21,492	20,310		18,163	17,953
Deferred income tax assets	6	11,324	–		3,105	9,432

		32,816	20,310		22,268	28,385
Current assets
Properties under development	7	771,760	1,102,206		656,320	853,015
Completed properties held for sale	8	303,653	74,216		268,489	239,982
Prepaid taxes	9	22,273	142,283		75,665	42,653
Trade and other receivables	10	20,683	19,795		4,168	4,650
Amount due from related parties	28(d)	802,253	2,491,227		313,696	415,094
Cash and cash equivalents	11	323,995	99,035		6,625	31,490
		2,244,617	3,928,762	1,324,963		1,586,884

Total assets		2,277,433	3,949,072	1,347,231		1,615,269


EQUITY
Capital and reserves attributable
to equity owner of Woods Golf
Paid-up capital		100,000	196,080		196,080	196,080
Other reserves	12	49,041	66,067		84,340	84,340
Retained earnings		36,180	40,148		193,833	343,718
Total equity		185,221	302,295		474,253	624,138


LIABILITIES
Non-current liabilities
Borrowings	14	821,670	19,229		16,670	15,338
Deferred income tax liabilities	6	–	3,060		–	–

		821,670	22,289		16,670	15,338


Current liabilities
Advanced proceeds from customers		194,197	738,572		438,699	267,779
Trade and other payables	13	594,827	595,297		337,088	523,838
Current income tax liabilities		111,122	30,043		14,432	68,295
Amount due to related parties	28(d)	370,396	206,656		41,089	115,881
Borrowings	14, 28(d)	–	2,053,920		25,000	–
		1,270,542	3,624,488		856,308	975,793

Total liabilities		2,092,212	3,646,777		872,978	991,131


Total equity and liabilities		2,277,433	3,949,072	1,347,231		1,615,269


Net current assets		974,075	304,274		468,655	611,091


Total assets less current liabilities		1,006,891	324,584		490,923	639,476

– III-5 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANY NO. 9

APPENDIX III

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

								Six months ended	Six months ended
	Note		Year	ended 31	December			30 June
			2009	2010		2011		2011	2012
			RMB’000	RMB’000		RMB’000		RMB’000	RMB’000
							(unaudited)
Revenue	15		1,292,818	351,856		766,364		31,266	469,135
Cost of sales	16	(1,065,025)		(248,613)		(457,283)		(19,045)	(229,287)
Gross profit			227,793	103,243		309,081		12,221	239,848
Selling and marketing
costs	16		(16,930)	(19,016)		(13,773)		(5,877)	(9,816)
Administrative expenses	16		(13,268)	(9,302)		(12,340)		(5,939)	(8,052)
Other income	20		7,615	131,660		65,763		53,196	13,202
Other losses			–	(146)		(3)		–	(2)
Operating profit			205,210	206,439		348,728		53,601	235,180
Finance income	21		1,960	694		399		408	44
Finance costs	21		(16,499)	(168,306)		(66,395)		(59,515)	(2,043)
Profit/(loss) before
income tax			190,671	38,827		282,732		(5,506)	233,181
Income tax expenses	22		(76,937)	(17,833)		(112,387)		396	(85,755)
Profit/(loss) for the
year/period			113,734	20,994		170,345		(5,110)	147,426


Total comprehensive
income			113,734	20,994		170,345		(5,110)	147,426


Earnings per share for
profits attributable to
the equity owners of
Woods Golf
−Basic and diluted	23		N/A	N/A		N/A		N/A	N/A


Dividends	24		–	–		–		–	–

– III-6 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANY NO. 9

APPENDIX III

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

	Paid-up	Other	Retained
	capital	reserves	earnings	Total
	RMB’000	RMB’000	RMB’000	RMB’000
At 31 January 2009	100,000	15,268	(43,781)	71,487
Comprehensive income
Profit for the year	–	–	113,734	113,734
Transactions with owners
Statutory reserve	–	33,773	(33,773)	–
At 31 December 2009	100,000	49,041	36,180	185,221
Comprehensive income
Profit for the year		–	20,994	20,994
Transactions with owners
Capital contribution	96,080	–	–	96,080
Statutory reserve	–	17,026	(17,026)	–
At 31 December 2010	196,080	66,067	40,148	302,295
Comprehensive income
Profit for the year	–	–	170,345	170,345
Transactions with owners
Statutory reserve	–	18,273	(18,273)	–
At 31 December 2011	196,080	84,340	192,220	472,640
Comprehensive income
Profit for the period	–	–	147,426	147,426
At 30 June 2012	196,080	84,340	339,646	620,066


(Unaudited)
At 31 December 2010	196,080	66,067	40,148	302,295
Comprehensive income
(Loss) for the period	–	–	(5,110)	(5,110)
At 30 June 2011	196,080	66,067	35,038	297,185

– III-7 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANY NO. 9

APPENDIX III

CONSOLIDATED STATEMENTS OF CASH FLOWS

					Six months ended	Six months ended	Six months ended	Six months ended
	Note	Year ended 31 December			30	June
		2009	2010	2011	2011			2012
		RMB’000	RMB’000	RMB’000	RMB’000		RMB’000
					(unaudited)
Cash flows from operating
activities
Cash generated from/(used in)
operations	25	1,027,165	478,865	14,626	80,829			79,094
PRC income tax paid		(26,160)	(173,017)	(83,971)	(74,177)			(14,777)
Net cash generated from/
(used in) operating
activities		1,001,005	305,848	(69,345)	6,652			64,317
Cash flows from investing
activities
Loans to related parties		(802,247)	(1,908,657)	(267,447)	(167,701)		(465,793)
Collection of loans from
related parties		–	219,683	2,446,027	1,750,475			367,993
Purchases of property, plant
and equipment	5	(127)	(955)	(445)	(8)			(1,031)
Net cash used in investing
activities		(802,374)	(1,689,929)	2,178,135	1,582,766			(98,831)
Cash flows from financing
activities
Proceeds from shareholders		–	96,080	–	–			–
Proceeds from third parties’
borrowings		815,000	2,053,920	1,028,900	1,003,900			–
Repayments of borrowings		(321,813)	(802,441)	(3,060,379)	(2,509,065)			(26,332)
Proceeds from related parties’
borrowings		230,000	–	12,000	–			100,797
Repayment of borrowings
from related parties		(574,191)	(135,000)	–	–			(12,000)
Interests paid		(32,225)	(53,438)	(181,263)	(174,383)			(2,043)
Net cash (used in)/generated
from financing activities		116,771	1,159,121	(2,200,742)	(1,679,548)			60,422
Net increase/(decrease) in
cash and equivalents		315,402	(224,960)	(91,952)	(90,130)			25,908
Cash and cash equivalents at
beginning of year/period		8,593	323,995	99,035	99,035			7,083
Cash and cash equivalents
at end of year/period		323,995	99,035	7,083	8,905			32,991

– III-8 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANY NO. 9

APPENDIX III

NOTES TO THE FINANCIAL INFORMATION

1 GENERAL INFORMATION

(a) General information

Shanghai Greentown Woods Golf Real Estate Co., Ltd. (hereafter “Woods Golf”) is a limited liability company established in Shanghai, the People’s Republic of China (“PRC”) on 19 June 2002. The address of its registered office is No.2118 Guanghua Road, Minhang District, Shanghai, the PRC. Woods Golf is principally engaged in property development business in Shanghai, the PRC.

At the date of incorporation of Woods Golf, 綠城房地產集團有限公司 (Greentown Real Estate Group Co., Ltd.) (“Greentown Real Estate”) and Shanghai Lvyu Real Estate Development Co., Ltd. (“Shanghai Lvyu”) hold 51% and 49% equity interests of Woods Golf respectively.

On 15 October 2009, Greentown Real Estate acquired the 49% equity interest of Woods Golf from Shanghai Lvyu and Woods Golf became a wholly-owned subsidiary of Greentown Real Estate.

Woods Golf has one property project named Rose Garden which was located in Shanghai, the PRC and was developed from September 2004.

During the Relevant Periods, Woods Golf has only one subsidiary named Shanghai Greentown Rose Garden Resort Management Co., Ltd. (“Rose Garden Resort”), which was incorporated in Shanghai, the PRC on 1 August 2011. The principal activity of Rose Garden Resort is hotel management service in Shanghai, the PRC. Woods Golf’s direct interests in Rose Garden Resort during the Relevant Periods are as follows:

		Direct	equity	interest	held
					As at
	Registered	As at 31 December			30	June		Statutory	auditor
	capital	2009	2010	2011		2012	2009	2010	2011
	RMB
	million
Rose Garden	1	NA	NA	100%	100%		NA	NA	Shanghai
Resort									Saint C.P.A.
									Partnership

Rose Garden Resort is a limited liability company and has adopted 31 December as its financial year end date.

These financial statements are presented in thousands of units of Renminbi (“RMB’000”) unless otherwise

stated.

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of the consolidated financial statements of Woods Golf are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

2.1 Basis of preparation

The consolidated financial statements of Woods Golf Group have been prepared in accordance with the Hong Kong Financial Reporting Standards (the “HKFRSs”). The consolidated financial statements have been prepared under the historical cost convention.

The preparation of financial statements in conformity with the HKFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying Woods Golf Group’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the combined financial statements are disclosed in Note 4.

– III-9 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANY NO. 9

APPENDIX III

(a) New standards, amendments and interpretations which have been issued and are not yet effective have not been early adopted by Woods Golf Group.

Up to the date of issue if this report, the HKICPA has issued the following new standards, amendments and interpretations which are relevant to Woods Golf Group’s operation but not yet effective for the annual accounting period beginning 1 January 2012 and which have not been early adopted by Woods Golf Group:

HKAS 1 (Amendment)	Presentation of financial statements	Presentation of financial statements
		(effective on or after 1 July 2012)
	−	The main change resulting from these amendments is a
		requirement for entities to group items presented in
		‘other comprehensive income’ (OCI) on the basis of
		whether they are potentially reclassifiable to profit or
		loss subsequently (reclassification adjustments). The
		amendments do not address which items are presented in
		OCI.
HKFRS 7 (Amendment)	Disclosures – Offsetting financial assets and financial liabilities
		(effective on or after 1 January 2013)
	−	The amendments also require new disclosure
		requirements which focus on quantitative information
		about recognised financial instruments that are offset in
		the statement of financial position, as well as those
		recognised financial instruments that are subject to
		master netting or similar arrangements irrespective of
		whether they are offset.
HKFRS 10	Consolidated financial statements
		(effective on or after 1 January 2013)
	−	The objective of IFRS/HKFRS 10 is to establish
		principles for the presentation and preparation of
		consolidated financial statements when an entity controls
		one or more other entity (an entity that controls one or
		more other entities) to present consolidated financial
		statements. Defines the principle of control, and
		establishes controls as the basis for consolidation. Set out
		how to apply the principle of control to identify whether
		an investor controls an investee and therefore must
		consolidate the investee. It also sets out the accounting
		requirements for the preparation of consolidated financial
		statements.
HKFRS 11	Joint arrangements
		(effective on or after 1 January 2013)
	−	HKFRS 11 is a more realistic reflection of joint
		arrangements by focusing on the rights and obligations of
		the arrangement rather than its legal form. There are two
		types of joint arrangement: joint operations and joint
		ventures. Joint operations arise where a joint operator
		has rights to the assets and obligations relating to the
		arrangement and hence accounts for its interest in assets,
		liabilities, revenue and expenses. Joint ventures arise
		where the joint operator has rights to the net assets of
		the arrangement and hence equity accounts for its
		interest. Proportional consolidation of joint ventures is no
		longer allowed.

– III-10 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANY NO. 9

APPENDIX III

HKFRS 12	Disclosure of interests in other entities	Disclosure of interests in other entities
		(effective on or after 1 January 2013)
	−	HKFRS 12 includes the disclosure requirements for all
		forms of interests in other entities, including joint
		arrangements, associates, special purpose vehicles and
		other off balance sheet vehicles
HKAS 27 (2011)	Separate financial statements
		(effective on or after 1 January 2013)
	−	HKAS 27 (revised 2011) includes the provisions on
		separate financial statements that are left after the control
		provisions of HKAS 27 have been included in the new
		HKFRS 10.
HKAS 28 (2011)	Associates and joint ventures
		(effective on or after 1 January 2013)
	−	HKAS 28 (revised 2011) includes the requirements for
		joint ventures, as well as associates, to be equity
		accounted following the issue of HKFRS 11.
HKFRS 13	Fair value measurements
		(effective on or after 1 January 2013)
	−	HKFRS 13 aims to improve consistency and reduce
		complexity by providing a precise definition of fair value
		and a single source of fair value measurement and
		disclosure requirements for use across HKFRSs. The
		requirements, which are largely aligned between HKFRSs
		and US GAAP, do not extend the use of fair value
		accounting but provide guidance on how it should be
		applied where its use is already required or permitted by
		other standards within HKFRSs or US GAAP.
HKAS 19 (Amendment)	Employee benefits
		(effective on or after 1 January 2013)
	−	These amendments eliminate the corridor approach and
		calculate finance costs on a net funding basis.
HKAS 32 (Amendment)	Financial instruments: Presentation – Offsetting financial assets
		and financial liabilities
		(effective on or after 1 January 2014)
	−	The amendments clarify the requirements for offsetting
		financial instruments on the balance sheet: (i) The
		meaning of ‘currently has a legally enforceable right of
		set-off’; and (ii) that some gross settlement systems may
		be considered equivalents to net settlement.

– III-11 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANY NO. 9

APPENDIX III

HKFRS 9

Financial instruments (effective on or after 1 January 2015) − HKFRS 9 is the first standard issued as part of a wider project to replace HKAS 39. HKFRS 9 retains but simplifies the mixed measurement model and establishes two primary measurement categories for financial assets: amortised cost and fair value. The basis of classification depends on the entity’s business model and the contractual cash flow characteristics of the financial asset. The guidance in HKAS 39 on impairment of financial assets and hedge accounting continues to apply.

HKFRS 7 and HKFRS 9 Mandatory effective date and transition disclosures (Amendments) (effective on or after 1 January 2015) − HKFRS 7 and HKFRS 9 (Amendments) “Mandatory effective date and transition disclosures” delay the effective date to annual periods beginning on or after 1 January 2015, and also modify the relief from restating prior periods. As part of this relief, additional disclosures on transition from HKAS 39 to HKFRS 9 are required.

Woods Golf Group is in the process of making an assessment of the impact of these standards, amendments and interpretations on the Financial information of Woods Golf Group upon their initial application.

2.2 Subsidiaries

2.2.1 Consolidation

Subsidiaries are all entities (including special purpose entities) over which Woods Golf Group has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether Woods Golf Group controls another entity. Woods Golf Group also assesses existence of control where it does not have more than 50% of the voting power but is able to govern the financial and operating policies by virtue of de-facto control. De-facto control may arise from circumstances such as enhanced minority rights or contractual terms between shareholders, etc.

Subsidiaries are fully consolidated from the date on which control is transferred to Woods Golf Group. They are de-consolidated from the date that control ceases.

(a) Changes in ownership interests in subsidiaries without change of control

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ACCOUNTANT’S REPORT ON THE TARGET COMPANY NO. 9

APPENDIX III

2.3 Foreign currency translation

(a) Functional and presentation currency

Items included in the financial statements of each of Woods Golf Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). Since the majority of the assets and operations of Woods Golf Group are located in the PRC, the combined financial statements are presented in Renminbi (“RMB”), which is Woods Golf Group’s functional and presentation currency.

(b) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss, except when deferred in equity as qualifying cash flow hedges and qualifying net investment hedges.

2.4 Property, plant and equipment

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, only when it is probable that future economic benefits associated with the item will flow to Woods Golf Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the income statement during the year in which they are incurred. Depreciation on property, plant and equipment is calculated using the straight-line method to allocate their cost to their residual values over their estimated useful lives, as follows:

Building				20 years
Vehicles				5 years
Furniture	and	office	equipment	3-5 years

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within “Other gains/(losses)-net” in the profit or loss.

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ACCOUNTANT’S REPORT ON THE TARGET COMPANY NO. 9

APPENDIX III

2.5 Land use rights

All land in the PRC is state-owned and no individual land ownership right exists. Woods Golf Group acquired the rights to use certain land and the premiums paid for such rights are recorded as land use rights.

Land use rights which are held for self-use are stated at cost and amortised over the use terms of 70 years using the straight-line method. Land use rights which are held for development for sales are inventories and measured at lower of cost and net realisable value. Land use rights are transferred to properties under development upon the commencement of development.

2.6 Properties under development

2.7 Completed properties held for sale

Completed properties remaining unsold at the end of each reporting period are stated at the lower of cost and net realisable value.

Cost comprises development costs attributable to the unsold properties.

2.8 Impairment of investments in subsidiaries and non-financial assets

Assets that have an indefinite useful life or are not yet available for use are not subject to depreciation or amortisation and are tested annually for impairment. Assets that are subject to depreciation or amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at each reporting date.

Impairment testing of the investment in a subsidiary is required upon receiving a dividend from that subsidiary if the dividend exceeds the total comprehensive income of the subsidiary concerned in the period the dividend is declared or if the carrying amount of the subsidiary in Woods Golf’s balance sheet exceeds the carrying amount of the subsidiary’s net assets including goodwill in the consolidated balance sheet.

2.9 Trade and other receivables

Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment.

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ACCOUNTANT’S REPORT ON THE TARGET COMPANY NO. 9

APPENDIX III

2.10 Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturity of three months or less. Bank deposits which are restricted to use are not included in cash and cash equivalents.

2.11 Paid up capital

Capital contributed by the shareholders is classified as equity.

2.12 Trade and other payables

Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

2.13 Borrowings

Borrowings are classified as current liabilities unless Woods Golf Group has an unconditional right to defer settlement of the liability for at least twelve months after the respective balance sheet date.

Borrowing is derecognised when, and only when the obligation specified in the contract is discharged or cancelled or expires.

2.14 Current and deferred income tax

Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

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ACCOUNTANT’S REPORT ON THE TARGET COMPANY NO. 9

APPENDIX III

Deferred income tax is provided on temporary differences arising on investments in subsidiaries, and associates, except for deferred income tax liability where the timing of the reversal of the temporary difference is controlled by Woods Golf Group and it is probable that the temporary difference will not be reversed in the foreseeable future.

2.15 Employee benefits

In accordance with the rules and regulations in the PRC, the PRC based employees of Woods Golf Group participate in various defined contribution retirement benefit plans organised by the relevant municipal and provincial governments in the PRC under which Woods Golf Group and the PRC based employees are required to make monthly contributions to these plans calculated as a percentage of the employees’ salaries.

The municipal and provincial governments undertake to assume the retirement benefit obligations of all existing and future retired PRC based employees’ payable under the plans described above. Other than the monthly contributions, Woods Golf Group has no further obligation for the payment of retirement and other post retirement benefits of its employees. The assets of these plans are held separately from those of Woods Golf Group in independently administrated funds managed by the governments.

2.16 Revenue recognition

Revenue comprises the fair value of the consideration received or receivable for the sales of properties and services in the ordinary course of Woods Golf Group’s activities. Revenue is shown, net of discount and after eliminating sales within Woods Golf Group. Revenue is recognised as follows:

(a) Sales of properties

(b) Service income

Hotel services income is recognized when the services are provided, the total amount of revenue and costs arising from provision of the services can be estimated reliably, and it is probable that the economic benefits associated with the transactions will flow in.

(c) Interest income

Interest income is recognised using the effective interest method. When a loan or receivable is impaired, Woods Golf Group reduces the carrying amount to its recoverable amount, being the estimated future cash flow discounted at the original effective interest rate of the instrument, and continues unwinding the discount as interest income. Interest income on impaired loan or receivables is recognised using the original effective interest rate in finance income.

2.17 Dividend distribution

Dividend distribution to Woods Golf’s shareholders is recognised as liabilities in the financial statements in the period in which the dividends are approved by the company’s shareholders.

– III-16 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANY NO. 9

APPENDIX III

3 FINANCIAL RISK MANAGEMENT

3.1 Financial risk factors

Woods Golf Group’s activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk. Woods Golf Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on Woods Golf Group’s financial performance.

(a) Market risk

(i) Foreign exchange risk

Woods Golf Group’s normal operating activities are principally conducted in RMB since all of the operating entities are based in the PRC and all of the operating entities’ assets and liabilities were denominated in RMB. Therefore, the foreign exchange risk is low.

(ii) Cash flow and fair value interest rate risk

As Woods Golf Group has no significant interest-bearing assets, Woods Golf Group’s income and operating cash flows are substantially independent from changes in market interest rates.

Woods Golf Group’s interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose Woods Golf Group to cash flow interest-rate risk which is partially offset by cash held at variable rates. Borrowings issued at fixed rates expose Woods Golf Group to fair value interest-rate risk. During the Relevant Periods, Woods Golf Group’s borrowings were all denominated in Renminbi.

Woods Golf Group has not used any interest rate swaps to hedge its exposure to interest rate risk.

The table below sets out Woods Golf Group’s exposure to interest rate risks. Included in the tables are the liabilities at carrying amounts, categorised by maturity dates.

		Floating rates	Floating rates		Fixed rates
	1 to 5	Over 5		1 to 5	Over 5
	years	years	Sub-total	years	years	Sub-total	Total
	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000
Borrowings
At 31 December 2009	800,000	21,670	821,670	–	–	–	821,670

At 31 December 2010	–	19,229	19,229	2,053,920	–	2,053,920	2,073,149

At 31 December 2011	–	16,670	16,670	25,000	–	25,000	41,670

At 30 June 2012	15,338	–	15,338	–	–	–	15,338

As at 31 December 2009, 2010 and 2011 and 30 June 2012, if the interest rates on borrowings had been 100 basis points higher/lower with all other variables held constant, the interest expenses would have been higher/lower by RMB1.4 million, RMB17.1 million, RMB0.2 million, and RMB0 million respectively.

Woods Golf Group also analyses its interest rate exposure monthly by considering refinancing, renewal of existing positions and alternative financing.

– III-17 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANY NO. 9

APPENDIX III

(iii) Price risk

Woods Golf Group is not exposed to price risk because it did not have investment items.

(b) Credit risk

Credit risk is managed on group basis. Credit risk arises from cash and cash equivalents, restricted cash deposited with banks, other receivables, due from related parties and third parties, notes receivables, as well as credit exposures to commercial customers who let space in our properties. Residential and commercial property sales are paid for through up-front cash transactions. For banks and financial institutions, only independently rated parties with a minimum rating of ‘A’ are accepted. If there is no independent rating, risk control assesses the credit quality of the customer, taking into account its financial position, past experience and other factors. Sales to customers are settled in cash or using major credit cards.

With respect to banks, the larger State-owned banks in the PRC are mainly used for holding bank accounts in Woods Golf Group.

No credit limits were exceeded during the Relevant Periods, and management does not expect any losses from non-performance by these counterparties.

(c) Liquidity risk

Management of Woods Golf Group aims to maintain sufficient cash and cash equivalents or have available funding through an adequate amount of available financing, including short-term and long-term bank borrowings to meet its construction commitments.

Due to the dynamic nature of the underlying businesses, Woods Golf Group treasury maintains flexibility in funding by its ability to move cash and cash equivalents between different entities through entrusted loan arrangements.

The table below analyses Woods Golf Group’s financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date up to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within twelve months equal their carrying balances.

		Between	Between
	Less than	1 and	2 and
	1 year	2 years	5 years	Over 5 years	Total
Woods Golf Group	RMB ’million	RMB ’million	RMB ’million	RMB ’million	RMB ’million
At 31 December 2009
Borrowings	51	51	931	4	1,037
Trade and other
payables (Note 13)	256	298	–	–	554
Amount due to
related parties	370	–	–	–	370

At 31 December 2010
Borrowings	2,184	4	13	1	2,202
Trade and other
payables (Note 13)	102	454	–	–	556
Amount due to
related parties	207	–	–	–	207

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ACCOUNTANT’S REPORT ON THE TARGET COMPANY NO. 9

APPENDIX III

		Between	Between
	Less than	1 and	2 and
	1 year	2 years	5 years	Over 5 years	Total
Woods Golf Group	RMB ’million	RMB ’million	RMB ’million	RMB ’million	RMB ’million
At 31 December 2011
Borrowings	30	4	12	–	46
Trade and other
payables (Note 13)	81	238	–	–	319
Amount due to
related parties	41	–	–	–	41

At 30 June 2012
Borrowings	4	4	10	–	18
Trade and other
payables (Note 13)	368	140	–	–	508
Amount due to
related parties	116	–	–	–	116

Note: Trade and other payables in this analysis do not include the statutory liabilities including other taxes payables and payroll & welfare payables.

3.2 Capital risk management

In managing its capital risk, management considers capital to include paid up capital from equity holders and borrowings. Woods Golf Group’s objective when managing capital is to safeguard its ability to continue as a going concern in order to provide returns for equity holders.

In order to maintain or adjust the capital structure, Woods Golf Group may adjust the amount of dividends paid to equity holders, return capital to equity holders, or sell assets to reduce debt.

Consistent with others in the industry, Woods Golf Group monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings (including current and non-current borrowings as shown in the consolidated balance sheet) less cash and cash equivalents. Total capital is calculated as ‘equity’ as shown in the consolidated balance sheet, plus net debt.

The gearing ratios of Woods Golf Group as at 31 December 2009, 2010 and 2011 and 30 June 2012 were as follows:

				As at
		As at 31 December		30 June
	2009	2010	2011	2012
	RMB’000	RMB’000	RMB’000	RMB’000
Total borrowings (Note 14)	821,670	2,073,149	41,670	15,338
Cash and cash equivalents (Note 11)	(323,995)	(99,035)	(7,083)	(32,991)
Net debts	497,675	1,974,114	34,587	(17,653)
Total equity	185,221	302,295	472,640	620,066
Total capital	682,896	2,276,409	507,227	602,413


Gearing ratio	73%	87%	7%	-3%

The property project was financed from borrowings and proceeds from pre-sales of the properties from the customers. In the years ended 31 December 2009 and 2010, the project of Woods Golf was mainly financed from borrowings. While in the year ended 31 December 2011 and the six months ended 30 June 2012, the project was mainly financed from the proceeds from pre-sales of properties. Therefore, the gearing ratio decreased significantly.

– III-19 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANY NO. 9

APPENDIX III

4 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Woods Golf Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below.

4.1 Construction costs estimation

In Woods Golf Group, the project is divided into several phases according to the development and delivery plan. Cost of sales including construction costs specific to the phases and common costs allocable to the phases are calculated based on management best estimation of the total development costs for the whole project and the allocation to each phase at the time when the costs incurred.

4.2 Income taxes

Woods Golf Group is subject to corporate income tax in the PRC. Woods Golf Group recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred income tax assets and liabilities in the period in which such determination is made.

As disclosed in Note 6, Woods Golf Group has deferred tax assets from (1) the deferred deductible expenses, which are the expenses without sufficient tax documents received as at the balance sheet dates, (2) tax losses at the entity level, and (3) unpaid land appreciation tax accrued in the cost of sales in the profit or loss, which is a timing difference between the accounting profit and tax calculation.

Based on the development costs budget and the sales pricing plan, the directors are of the view that the property projects of Woods Golf Group will ultimately generate profits and the deferred tax assets on the unpaid land appreciation tax is a temporary difference. Therefore, management considers that the risk over the recoverability of the deferred tax assets could only be due to a challenge of the deductibility of the expenses currently classified as temporary differences that would result in their reclassification as permanent differences.

4.3 PRC land appreciation taxes

Woods Golf Group is subject to land appreciation taxes in the PRC. However, since the implementation and settlement of these taxes varies among various tax jurisdictions in cities of the PRC, significant judgement is required in determining the amount of the land appreciation and its related taxes. Woods Golf Group recognised these land appreciation taxes based on management’s best estimates according to its understanding of the interpretation of tax rules by various tax authorities. The final tax outcome could be different from the amounts that were initially recorded, and these differences will impact the income taxes and deferred income tax provisions in the years in which such taxes have been finalised with local tax authorities.

4.4 Provision for properties held for sale

Woods Golf Group assesses the carrying amounts of properties held for sale based on the net realisable value of these properties, taking into account costs to completion based on past experience and net sales value based on prevailing market conditions. Provision is made when events or changes in circumstances indicate that the carrying amounts may not be realised. The assessment requires the use of judgement and estimates. As at 31 December 2009, 2010 and 2011 and at 30 June 2012, no such provision need to be accrued, based on the management assessment.

– III-20 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANY NO. 9

APPENDIX III

5 PROPERTY, PLANT AND EQUIPMENT (“PPE”)

(a) Woods Golf Group

			Furniture
			and office
	Building	Vehicles	equipment	Total
	RMB’000	RMB’000	RMB’000	RMB’000
At 1 January 2009
Cost	31,141	4,398	2,169	37,708
Accumulated depreciation	(9,310)	(3,232)	(1,449)	(13,991)
Net book amount	21,831	1,166	720	23,717


Year ended 31 December 2009
Opening net book amount	21,831	1,166	720	23,717
Additions	–	–	127	127
Depreciation	(1,572)	(515)	(265)	(2,352)
Closing net book amount	20,259	651	582	21,492
At 31 December 2009
Cost	31,141	4,398	2,296	37,835
Accumulated depreciation	(10,882)	(3,747)	(1,714)	(16,343)
Net book amount	20,259	651	582	21,492


Year ended 31 December 2010
Opening net book amount	20,259	651	582	21,492
Additions	–	749	206	955
Depreciation	(1,572)	(304)	(261)	(2,137)
Closing net book amount	18,687	1,096	527	20,310
At 31 December 2010
Cost	31,141	5,147	2,502	38,790
Accumulated depreciation	(12,454)	(4,051)	(1,975)	(18,480)
Net book amount	18,687	1,096	527	20,310

– III-21 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANY NO. 9

APPENDIX III

			Furniture
			and office
	Building	Vehicles	equipment	Total
	RMB’000	RMB’000	RMB’000	RMB’000
Year ended 31 December 2011
Opening net book amount	18,687	1,096	527	20,310
Additions	–	305	140	445
Disposal	–	(40)	–	(40)
Depreciation	(1,573)	(360)	(205)	(2,138)
Closing net book amount	17,114	1,001	462	18,577
At 31 December 2011
Cost	31,141	4,133	2,622	37,896
Accumulated depreciation	(14,027)	(3,132)	(2,160)	(19,319)
Net book amount	17,114	1,001	462	18,577


Six months ended 30 June 2012
Opening net book amount	17,114	1,001	462	18,577
Additions	–	615	416	1,031
Disposal	–	–	(2)	(2)
Depreciation	(786)	(304)	(133)	(1,223)
Closing net book amount	16,328	1,312	743	18,383
At 30 June 2012
Cost	31,141	4,748	2,978	38,867
Accumulated depreciation	(14,813)	(3,436)	(2,235)	(20,484)
Net book amount	16,328	1,312	743	18,383


(Unaudited)
Six months ended 30 June 2011
Opening net book amount	18,687	1,096	527	20,310
Additions	–	–	8	8
Disposal	–	(40)	–	(40)
Depreciation	(786)	(176)	(110)	(1,072)
Closing net book amount	17,901	880	425	19,206
At 30 June 2011
Cost	31,141	3,828	2,502	37,471
Accumulated depreciation	(13,240)	(2,948)	(2,077)	(18,265)
Net book amount	17,901	880	425	19,206

Depreciation charges of Woods Golf Group for each of the year ended 31 December 2009, 2010 and 2011 and the six months ended 30 June 2012 were expensed in selling and administrative expenses in the consolidated statement of comprehensive income.

– III-22 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANY NO. 9

APPENDIX III

(b) Woods Golf

			Furniture
			and office
	Building	Vehicles	equipment	Total
	RMB’000	RMB’000	RMB’000	RMB’000
At 1 January 2009
Cost	31,141	4,398	2,169	37,708
Accumulated depreciation	(9,310)	(3,232)	(1,449)	(13,991)
Net book amount	21,831	1,166	720	23,717


Year ended 31 December 2009
Opening net book amount	21,831	1,166	720	23,717
Additions	–	–	127	127
Depreciation	(1,572)	(515)	(265)	(2,352)
Closing net book amount	20,259	651	582	21,492
At 31 December 2009
Cost	31,141	4,398	2,296	37,835
Accumulated depreciation	(10,882)	(3,747)	(1,714)	(16,343)
Net book amount	20,259	651	582	21,492


Year ended 31 December 2010
Opening net book amount	20,259	651	582	21,492
Additions	–	749	206	955
Depreciation	(1,572)	(304)	(261)	(2,137)
Closing net book amount	18,687	1,096	527	20,310
At 31 December 2010
Cost	31,141	5,147	2,502	38,790
Accumulated depreciation	(12,454)	(4,051)	(1,975)	(18,480)
Net book amount	18,687	1,096	527	20,310

– III-23 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANY NO. 9

APPENDIX III

			Furniture
			and office
	Building	Vehicles	equipment	Total
	RMB’000	RMB’000	RMB’000	RMB’000
Year ended 31 December 2011
Opening net book amount	18,687	1,096	527	20,310
Additions	–	–	21	21
Disposal	–	(40)	–	(40)
Depreciation	(1,572)	(354)	(202)	(2,128)
Closing net book amount	17,115	702	346	18,163
At 31 December 2011
Cost	31,141	3,830	2,502	37,473
Accumulated depreciation	(14,026)	(3,128)	(2,156)	(19,310)
Net book amount	17,115	702	346	18,163


Six months ended 30 June 2012
Opening net book amount	17,115	702	346	18,163
Additions	–	614	342	956
Disposal	–	–	(2)	(2)
Depreciation	(786)	(266)	(112)	(1,164)
Closing net book amount	16,329	1,050	574	17,953
At 30 June 2012
Cost	31,141	4,444	2,786	38,371
Accumulated depreciation	(14,812)	(3,394)	(2,212)	(20,418)
Net book amount	16,329	1,050	574	17,953


(Unaudited)
Six months ended 30 June 2011
Opening net book amount	18,687	1,096	527	20,310
Additions	–	–	8	8
Disposal	–	(40)	–	(40)
Depreciation	(786)	(176)	(110)	(1,072)
Closing net book amount	17,901	880	425	19,206
At 30 June 2011
Cost	31,141	3,828	2,502	37,471
Accumulated depreciation	(13,240)	(2,948)	(2,077)	(18,265)
Net book amount	17,901	880	425	19,206

As at 31 December 2009, 2010 and 2011 and at 30 June 2012, buildings with balances totalling RMB20 million, RMB19 million, RMB17 million, RMB16 million respectively were pledged as collaterals for Woods Golf Group’s borrowings (Note 14).

– III-24 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANY NO. 9

APPENDIX III

6 DEFERRED INCOME TAX ASSETS AND LIABILITIES −WOODS GOLF GROUP AND WOODS GOLF

				As at
		As at 31 December		30 June
	2009	2010	2011	2012
	RMB’000	RMB’000	RMB’000	RMB’000
Deferred income tax assets recoverable:
– within 12 months	11,324	−	3,105	9,432

Deferred income tax liabilities to be settled:
−within 12 months	−	3,060	−	−

The movements in deferred income tax assets of both Woods Golf Group and Woods Golf during the Relevant Periods are as follows:

(a) Deferred income tax assets

		Unpaid land	Deductible
	appreciation tax		tax loss	Total
		RMB’000	RMB’000	RMB’000
At 31 December 2009		11,324	−	11,324
(Charged)/Credited to the profit or loss		(11,324)	−	(11,324)
At 31 December 2010		−	−	−
(Charged)/Credited to the profit or loss		2,701	404	3,105
At 31 December 2011		2,701	404	3,105
(Charged)/Credited to the profit or loss		5,712	615	6,327
At 30 June 2012		8,413	1,019	9,432


(Unaudited)
At 31 December 2010		−	−	−
(Charged)/Credited to the profit or loss		4,024	−	4,024
At 30 June 2011		4,024	−	4,024


Deferred income tax liabilities
				Tax expenses
				paid in advance
				RMB’000
At 31 December 2009				−
(Credited)/Charged to the profit or loss				3,060
At 31 December 2010				3,060
(Credited)/Charged to the profit or loss				(3,060)
At 31 December 2011 and 30 June 2011 and 2012				−

(b) Deferred income tax liabilities

– III-25 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANY NO. 9

APPENDIX III

7 PROPERTIES UNDER DEVELOPMENT – WOODS GOLF GROUP AND WOODS GOLF

				As at
		As at 31 December		30 June
	2009	2010	2011	2012
	RMB’000	RMB’000	RMB’000	RMB’000
Comprising:
Land use rights	682,414	682,414	507,463	462,027
Other development costs	83,178	413,622	146,211	388,663
Capitalised financial costs	6,168	6,170	2,646	2,325
	771,760	1,102,206	656,320	853,015

As at 31 December 2009 and 2010, certain properties under development with balances totalling RMB610 million, RMB627 million respectively were pledged as collaterals for Woods Golf Group’s borrowings (2011 and 30 June 2012: Nil) (Note 14).

The properties under development of Woods Golf Group are all located in the PRC.

8 COMPLETED PROPERTIES HELD FOR SALE – WOODS GOLF GROUP AND WOODS GOLF

											As at
								As	at 31 December		30 June
							2009		2010	2011	2012
							RMB’000		RMB’000	RMB’000	RMB’000
Completed	properties	held	for	sale,	at	cost	303,653		74,216	268,489	239,982

As at 31 December 2009, 2010 and 2011 and at 30 June 2012, no completed properties held for sale was pledged as collaterals for Woods Golf Group’s borrowings.

The completed properties held for sale are all located in the PRC.

9 PREPAID TAXES – WOODS GOLF GROUP AND WOODS GOLF

					As at
			As at 31 December		30 June
		2009	2010	2011	2012
		RMB’000	RMB’000	RMB’000	RMB’000
Prepaid	income taxes	–	88,488	38,296	14,854
Prepaid	business taxes and surcharges	22,273	53,795	37,369	27,799
		22,273	142,283	75,665	42,653

– III-26 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANY NO. 9

APPENDIX III

10 TRADE AND OTHER RECEIVABLES

(a) Woods Golf Group

				As at
		As at 31 December		30 June
	2009	2010	2011	2012
	RMB’000	RMB’000	RMB’000	RMB’000
Trade receivables	4,000	5,000	–	–
Deposits and other receivables	16,683	14,795	4,287	6,946
	20,683	19,795	4,287	6,946

(b) Woods Golf

				As at
		As at 31 December		30 June
	2009	2010	2011	2012
	RMB’000	RMB’000	RMB’000	RMB’000
Trade receivables	4,000	5,000	–	–
Deposits and other receivables	16,683	14,795	4,168	4,650
	20,683	19,795	4,168	4,650

(a) As at 31 December 2009, 2010 and 2011 and at 30 June 2012, the fair value of trade and other receivables approximated their carrying amounts.
(b) The carrying amounts of Woods Golf Group’s trade and other receivables are all denominated in RMB.
(c) As at 31 December 2009 and 2010, trade receivables are all aged within 90 days.

– III-27 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANY NO. 9

APPENDIX III

11 CASH AND CASH EQUIVALENTS

(a) Woods Golf Group

				As at
		As at 31 December		30 June
	2009	2010	2011	2012
	RMB’000	RMB’000	RMB’000	RMB’000
Cash at bank and in hand denominated
in RMB	323,995	99,035	7,083	32,991


Woods Golf
				As at
		As at 31 December		30 June
	2009	2010	2011	2012
	RMB’000	RMB’000	RMB’000	RMB’000
Cash at bank and in hand denominated
in RMB	323,995	99,035	6,625	31,490

(b) Woods Golf

Woods Golf Group earns interest on cash at bank, at floating bank deposit rates.

12 OTHER RESERVE – WOODS GOLF GROUP AND WOODS GOLF

	Statutory
	reserve
	RMB’000
At 31 January 2009	15,268
Statutory reserve	33,773
At 31 December 2009	49,041
Capital contribution	–
Statutory reserve	17,026
At 31 December 2010	66,067
Statutory reserve	18,273
At 31 December 2011 and 30 June 2012	84,340

(Unaudited)
At 31 December 2010	66,067
Statutory reserve	−
At 30 June 2011	66,067

– III-28 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANY NO. 9

APPENDIX III

(a) PRC statutory reserves

In accordance with the relevant government regulations in the PRC and the provisions of the articles of association of the PRC companies now comprising Woods Golf Group,10% of its net profit as shown in the accounts prepared under PRC accounting regulations is required to be appropriated to statutory common reserve, until the reserve reaches 50% of the registered capital. Appropriation of statutory reserve must be made before distribution of dividends to equity holders.

This reserve shall only be used to make up losses; to expand Woods Golf Group entities’ production operation; or to increase the capital.

Upon approval by a resolution of an equity holders’ general meeting, Woods Golf Group may convert this reserve into capital, provided that the unconverted remaining amount of reserve is not less than 25% of the registered capital.

13 TRADE AND OTHER PAYABLES

(a) Woods Golf Group

				As at
		As at 31 December		30 June
	2009	2010	2011	2012
	RMB’000	RMB’000	RMB’000	RMB’000
Trade payables (Note (i))	536,051	537,540	281,826	472,082
Other taxes payable	40,893	36,096	17,970	17,395
Other payables	17,883	15,936	37,045	36,462
Interest payables	−	2,829	−	−
Payroll and welfare payables	–	2,896	745	373
	594,827	595,297	337,586	526,312

Note (i): The aging analysis of the trade payables of Woods Golf Group at each balance sheet date of the Relevant Periods is as follows:

				As at
		As at 31 December		30 June
	2009	2010	2011	2012
	RMB’000	RMB’000	RMB’000	RMB’000
Within 90 days	194,304	83,460	37,566	331,934
90-180 days	–	–	2,094	−
180-365 days	44,127	–	4,520	−
Over 365 days	297,620	454,080	237,646	140,148
	536,051	537,540	281,826	472,082

– III-29 –

APPENDIX III

ACCOUNTANT’S REPORT ON THE TARGET COMPANY NO. 9

(b) Woods Golf

				As at
		As at 31 December		30 June
	2009	2010	2011	2012
	RMB’000	RMB’000	RMB’000	RMB’000
Trade payables (Note (i))	536,051	537,540	281,437	470,456
Other taxes payable	40,893	36,096	17,970	17,395
Other payables	17,883	15,936	36,936	35,614
Interest payables	−	2,829	−	−
Payroll and welfare payables	–	2,896	745	373
	594,827	595,297	337,088	523,838

Note (i): The aging analysis of the trade payables of Woods Golf at each balance sheet date of the Relevant Periods is as follows:

				As at
		As at 31 December		30 June
	2009	2010	2011	2012
	RMB’000	RMB’000	RMB’000	RMB’000
Within 90 days	194,304	83,460	37,177	330,308
90-180 days	–	–	2,094	−
180-365 days	44,127	–	4,520	−
Over 365 days	297,620	454,080	237,646	140,148
	536,051	537,540	281,437	470,456

14 BORROWINGS – WOODS GOLF GROUP AND WOODS GOLF

					As at	As at
		As at 31 December			30 June
	2009		2010	2011	2012
	RMB’000	RMB’000		RMB’000	RMB’000
Non-current
Secured, borrowed from banks	821,670		19,229	16,670	15,338

Current
Secured, borrowed from other financial
institutions	–		500,000	–		–
Unsecured, borrowed from	–		–	–		–
– shareholders	–	1,553,920		–		–
– third parties	–		–	25,000		–
	–	2,053,920		25,000		–

Total	821,670	2,073,149		41,670	15,338

As at 31 December 2009, 2010 and 2011 and as at 30 June 2012, Woods Golf Group’s borrowings totalling RMB822 million, RMB519 million, RMB17 million and RMB15 million respectively were secured or jointly secured by Woods Golf Group’s buildings and properties under development totalling RMB640 million, RMB646 million, RMB17 million and RMB16 million (Note 5, 7).

– III-30 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANY NO. 9

APPENDIX III

(i) Long-term borrowings

The borrowings as at each of the balance sheet dates in the reporting periods were repayable as follows:

				As at
		As at 31 December		30 June
	2009	2010	2011	2012
	RMB’000	RMB’000	RMB’000	RMB’000
Between 2 and 5 years	800,000	–	–	15,338
Over 5 years	21,670	19,229	16,670	−
	821,670	19,229	16,670	15,338

(ii) As at each of the balance sheet dates in the Relevant Periods, there is no committed undrawn banking facility for Woods Golf Group and Woods Golf.
(iii) The carrying amounts of Woods Golf Group’s borrowings are denominated in RMB and approximate their fair value because the floating interest rates of the borrowings approximate the market interest rates at the balance sheet dates and accordingly, the effect of discounting is not material.

15 REVENUE

					Six months ended	Six months ended	Six months ended
		Year	ended 31 December			30	June
		2009	2010	2011	2011		2012
		RMB’000	RMB’000	RMB’000	RMB’000		RMB’000
					(unaudited)
Sales	of properties	1,292,818	351,856	766,364	31,266		465,373
Hotel	management service	–	–	–	–		3,762
		1,292,818	351,856	766,364	31,266		469,135

16 EXPENSES BY NATURE

					Six months ended	Six months ended	Six months ended
	Year ended 31		December			30	June
	2009	2010		2011	2011		2012
	RMB’000	RMB’000		RMB’000	RMB’000		RMB’000
					(unaudited)
Cost of properties sold:
– Land use rights costs	241,418	55,973		118,479	4,117		54,273
– Other development costs	568,400	131,699		290,626	9,710		140,123
– Business tax and related
surcharges (Note 17)	70,459	19,176		42,533	1,876		25,804
– Capitalised interests	184,748	41,765		5,645	3,342		9,087
Staff costs (Note 18)	10,410	9,790		5,782	2,307		5,124
Depreciation	2,352	2,137		2,138	1,072		1,223
Advertisement and promotion costs	9,665	7,321		9,652	4,199		5,318
Office and travel expenses	1,497	2,130		1,704	776		61
Entertainment expense	1,274	921		830	500		471
Consulting expenses	301	111		1,562	1,562		135
Other tax expenses	918	1,419		968	147		2,540
Others	3,781	4,489		3,477	1,253		2,996

Total cost of sales, selling and
marketing costs and administrative
expenses	1,095,223	276,931		483,396	30,861		247,155

– III-31 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANY NO. 9

APPENDIX III

17 BUSINESS TAX AND RELATED SURCHARGES

The PRC companies now comprising Woods Golf Group are subject to business tax on their revenues at the following rates:

Types	Types	Tax rate	Tax bases
(a)	Business tax	5%	– Sales of properties
			– Services income
(b)	Urban construction and maintenance tax	7%	– Business tax paid
(c)	Education surcharge	3%	– Business tax paid
(d)	Local education surcharge	0%-2%	– Business tax paid
(e)	Anti-flood fund	0%-1%	– Business tax paid

18 STAFF COSTS

				Six months ended	Six months ended	Six months ended
	Year	ended 31 December			30	June
	2009	2010	2011	2011		2012
	RMB’000	RMB’000	RMB’000	RMB’000		RMB’000
				(unaudited)
Wages and salaries	28,087	34,893	38,192	17,502		25,356
Social security costs	6,741	8,375	9,083	594		1,936
Staff welfare	3,931	4,885	5,254	2,211		1,202

	38,759	48,153	52,529	20,307		28,494
Less: Staff costs
capitalised in
properties under
development	(28,349)	(38,363)	(46,747)	(18,000)		(23,370)
Charged to profit or loss
(Note 16)	10,410	9,790	5,782	2,307		5,124

Staff costs are divided in the statement of comprehensive income as follows:

				Six months ended	Six months ended	Six months ended
	Year	ended 31 December			30	June
	2009	2010	2011	2011		2012
	RMB’000	RMB’000	RMB’000	RMB’000		RMB’000
				(unaudited)
Selling and marketing costs	3,159	6,017	513	117		2,224
Administrative expenses	7,251	3,773	5,269	2,190		2,900
	10,410	9,790	5,782	2,307		5,124

– III-32 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANY NO. 9

APPENDIX III

19 DIRECTORS’ AND SENIOR MANAGEMENT’S EMOLUMENTS

(a) Directors’ and senior management’s emoluments

The directors’ emoluments are set out below:

						Other	Compensation
						benefits	for loss of
Name of			Discretionary		Inducement	including	office as
Directors	Fees	Salary		bonuses	fees	pension	director	Total
	RMB’000	RMB’000		RMB’000	RMB’000	RMB’000	RMB’000	RMB’000
Years ended 31 December 2009:
Song Weiping	–	–		–	–	–	–	–
Shou Bainian	–	–		–	–	–	–	–
Wang Hongbin	–	–		–	–	–	–	–


Years ended 31 December 2010:
Song Weiping	–	–		–	–	–	–	–
Wang Hongbin	–	–		–	–	–	–	–
Wu Biao	–	–		–	–	–	–	–


Years ended 31 December 2011 and		six months ended 30 June 2012:
Song Weiping	–	–		–	–	–	–	–
Wang Hongbin	–	–		–	–	–	–	–
Wu Aiping	–	–		–	–	–	–	–


Six months ended 30 June 2011:
Song Weiping	–	–		–	–	–	–	–
Wang Hongbin	–	–		–	–	–	–	–
Wu Biao	–	–		–	–	–	–	–

(b) Five highest paid individuals

The five individuals whose emoluments were the highest in Woods Golf Group in each of the three years ended 31 December 2009, 2010 and 2011 and the six months ended 30 June 2011 and 2012 are not included in the analysis presented in Note 19(a) above. The emoluments payable to the five individuals for the year ended 31 December 2009, 2010 and 2011 and six months ended 30 June 2011 and 2012 respectively are as follows:

					Six months ended	Six months ended	Six months ended
		Year	ended 31 December			30	June
		2009	2010	2011	2011		2012
		RMB’000	RMB’000	RMB’000	RMB’000		RMB’000
					(unaudited)
Salary	and benefit	1,630	1,980	1,552	1,024		741
Social	security costs	314	206	354	158		168

– III-33 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANY NO. 9

APPENDIX III

The emoluments fell within the following bands:

				Six months ended	Six months ended	Six months ended
	Year	ended 31 December			30	June
	2009	2010	2011	2011		2012
Emolument bands	RMB’000	RMB’000	RMB’000	RMB’000		RMB’000
				(unaudited)
RMB0 ~ RMB1 million	5	5	5	5		5

(c) In the year ended 31 December 2009, 2010 and 2011 and the six months ended 30 June 2011 and 2012, no director or any of the five highest paid individuals received any emolument from Woods Golf Group as an inducement to join, upon joining Woods Golf Group, or as compensation for loss of office.

20 OTHER INCOME

					Six months ended	Six months ended	Six months ended
		Year	ended 31 December			30	June
		2009	2010	2011	2011		2012
		RMB’000	RMB’000	RMB’000	RMB’000		RMB’000
					(unaudited)
Interest income on loans
to related party		7,564	131,530	65,596	53,101		13,184
Others		51	130	167	95		18

		7,615	131,660	65,763	53,196		13,202


FINANCE INCOME AND	COSTS
					Six months ended
		Year	ended 31 December			30	June
		2009	2010	2011	2011		2012
		RMB’000	RMB’000	RMB’000	RMB’000		RMB’000
					(unaudited)
(i) Finance income:
Interest income on:
– Interest income on
bank deposits		(1,960)	(694)	(399)	(408)		(44)
(ii) Finance costs:
Interest expenses on:
– Bank borrowings		32,225	9,626	1,261	625		599
– Borrowings from
non-bank financial
institutions		–	25,333	21,903	21,903		–
– Borrowings from
related party		23,887	133,347	42,670	36,987		–
– Borrowings from
third party		–	–	561	–		1,444
		56,112	168,306	66,395	59,515		2,043
Less: Capitalised interests		(39,613)	–	–	–		–
		16,499	168,306	66,395	59,515		2,043

21 FINANCE INCOME AND COSTS

The annual capitalisation rate used to determine the amount of the interest incurred eligible for capitalisation at each balance sheet date in the Relevant Periods were 8.48%, 0%, 0%, 0% and 0%.

– III-34 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANY NO. 9

APPENDIX III

22 INCOME TAX EXPENSES

				Six months ended	Six months ended	Six months ended
	Year	ended 31 December			30	June
	2009	2010	2011	2011		2012
	RMB’000	RMB’000	RMB’000	RMB’000		RMB’000
				(unaudited)
Corporate income tax
(“CIT”)
– Current income tax	45,832	(7,107)	63,262	5,750		55,553
– Deferred income tax	(7,680)	14,384	(6,l65)	(7,084)		(6,327)

	38,152	7,277	57,097	(1,334)		49,226
Land appreciation tax
(“LAT”)	38,785	10,556	55,290	938		36,529

	76,937	17,833	112,387	(396)		85,755

(a) CIT

The tax on Woods Golf Group’s profit before tax differs from the theoretical amount that would arise using the weighted average tax rate applicable to profits of the consolidated entities as follows:

				Six months ended	Six months ended
	Year	ended 31 December		30	June
	2009	2010	2011	2011	2012
	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000
				(unaudited)
Profit before income tax	190,671	38,827	282,732	(5,506)	233,181

Income tax calculated at
statutory rate	47,668	9,707	70,683	(1,377)	58,295
LAT deduction	(9,696)	(2,639)	(13,823)	(235)	(9,132)
Other non-deductible
expenses	180	209	237	278	63
	38,152	7,277	57,097	(1,334)	49,226

All entities comprising Woods Golf Group are incorporated and operate in the PRC. The income tax provision of Woods Golf Group has been calculated at the applicable tax rate of 25% and the estimated assessable profits for the years ended 31 December 2009, 2010 and 2011 and the six months ended 30 June 2011 and 2012 based on existing legislations, interpretations and practices.

(b) LAT

23 EARNINGS PER SHARE

No earnings per share information is presented as Woods Golf is not a company registered with share capital hence calculation of earnings per share is not applicable.

– III-35 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANY NO. 9

APPENDIX III

24 DIVIDENDS

No dividend has been paid or declared by the board of directors.

25 CASH GENERATED FROM/(USED IN) OPERATIONS

(a) Cash generated from/(used in) operations

				Six months ended	Six months ended	Six months ended
	Year	ended 31 December			30	June
	2009	2010	2011	2011		2012
	RMB’000	RMB’000	RMB’000	RMB’000		RMB’000
				(unaudited)
Profit/(loss) before
income taxes	190,671	38,827	282,732	(5,506)		233,181
Adjustments for:
Depreciation charges	2,352	2,137	2,138	1,072		1,223
Loss on disposal of PPE	–	–	40	40		2
Changes in working capital
– Properties under
development and
completed
properties held for
sale	561,489	(68,879)	278,167	4,673		(166,145)
– Prepayments	5,527	(31,522)	16,426	53,794		9,570
– Trade and other
receivables	(14,285)	888	15,514	(5,525)		(2,762)
– Advanced proceeds
from customers	(72,450)	544,376	(299,822)	171,841		(170,696)
– Trade and other
payables	353,861	(6,962)	(280,569)	(139,560)		174,721
Cash generated
from/(used in)
operations	1,027,165	478,865	14,626	80,829		79,094

26 COMMITMENTS

Property development expenditure at the balance sheet date but not yet incurred is as follows:

				As at
		As at 31 December		30 June
	2009	2010	2011	2012
	RMB’000	RMB’000	RMB’000	RMB’000
Property development expenditure
– Contracted but not provided for	155,560	400,159	403,498	353,001
– Authorised but not contracted for	2,718,649	2,500,633	1,958,772	1,781,793

	2,874,209	2,900,792	2,362,270	2,134,794

– III-36 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANY NO. 9

APPENDIX III

27 FINANCIAL INSTRUMENTS – WOODS GOLF GROUP

		Loans and receivables	Loans and receivables
				As at
		As at 31 December		30 June
	2009	2010	2011	2012
	RMB’000	RMB’000	RMB’000	RMB’000
Assets as per balance sheets
Amount due from related parties	802,253	2,491,227	312,641	410,544
Other receivables	20,683	19,795	4,287	6,946
Cash and cash equivalents	323,995	99,035	7,083	32,991
	1,146,931	2,610,057	324,011	450,481


		Financial liabilities at amortised costs
				As at
		As at 31 December		30 June
	2009	2010	2011	2012
	RMB’000	RMB’000	RMB’000	RMB’000
Liabilities as per balance sheets
Borrowings	821,670	2,073,149	41,670	15,338
Trade and other payables other than
statutory payables	553,934	556,305	318,871	508,544
Amount due to related parties	370,396	206,656	41,089	115,881
	1,746,000	2,836,110	401,630	639,763

28 RELATED PARTY TRANSACTIONS

(a) Name and relationship with related parties

Name

Relationship

Greentown Real Estate

Shareholder

– III-37 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANY NO. 9

APPENDIX III

(b) Transactions with related parties

During the Relevant Periods, Woods Golf Group had the following significant transactions with related parties:

					Six months ended	Six months ended	Six months ended	Six months ended
		Year ended 31 December				30 June
		2009	2010	2011	2011			2012
		RMB’000	RMB’000	RMB’000	RMB’000		RMB’000
					(unaudited)
(i)	Loan to Greentown
	Real Estate	802,247	1,908,657	267,447	167,701		465,793


(ii)	Receiving of funds from
	Greentown Real Estate	–	219,683	2,446,027	1,750,475		367,993


(iii)	Borrowing from Greentown
	Real Estate (Note 16)	230,000	1,553,920	12,000	–		100,797


(iv)	Repayment of borrowing to
	Greentown Real Estate	574,191	135,000	−	–			12,000


(v)	Interest receivable from
	Greentown Real Estate	7,564	131,530	65,596	53,101			13,184


(vi)	Interest expenses payable to
	Greentown Real Estate	23,887	133,347	42,670	36,987			–

The loans to related parties were unsecured and interest bearing with annual rates of 6.565% for the years ended 31 December 2009, 2010 and 2011 and the six months ended 30 June 2012 respectively.

The borrowings from related parties were unsecured and interest bearing with annual rates of 10.980% for the years ended 31 December 2009.

The directors of Woods Golf are of the view that the related party transactions disclosed above were carried out at terms mutually negotiated between Woods Golf Group and the respective related parties.

(c) Key management compensation

– III-38 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANY NO. 9

APPENDIX III

(d) Related party balances

						As at
			As at 31 December			30 June
		2009		2010	2011	2012
		RMB’000	RMB’000		RMB’000	RMB’000
(i)	Amount due from related parties
	– Greentown Real Estate	802,247	2,491,221		312,641	410,441


(ii)	Borrowings
	– Greentown Real Estate	–	1,553,920		–	–


(iii)	Amount due to related parties
	– Greentown Real Estate	369,903		205,842	40,207	115,881


INVESTMENT IN SUBSIDIARY
						As at
			As at 31 December			30 June
		2009		2010	2011	2012
		RMB’000	RMB’000		RMB’000	RMB’000
Investment in Rose Garden Resort, at cost		–		–	1,000	1,000

29 INVESTMENT IN SUBSIDIARY

30 SIGNIFICANT SUBSEQUENT EVENTS

There are no subsequent events in Woods Golf Group during the periods from 30 June 2012 to the date of this report.

– III-39 –

ACCOUNTANT’S REPORT ON THE TARGET COMPANY NO. 9

APPENDIX III

II. SUBSEQUENT FINANCIAL STATEMENTS

No audited financial statements have been prepared by Woods Golf or its subsidiary in respect of any period subsequent to 30 June 2012 up to the date of this report. Save as disclosed in this report, no dividend or distribution has been declared or made by Woods Golf or its subsidiary in respect of any period subsequent to 30 June 2012.

Yours faithfully,

PricewaterhouseCoopers Certified Public Accountants Hong Kong

– III-40 –

MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET COMPANIES

APPENDIX IV

MANAGEMENT DISCUSSION AND ANALYSIS

Pursuant to the Framework Agreement, the Target Companies of this transactions include the followings:

An effective 50% of Greentown Real Estate owned interests in the following eight Target Companies through Shanghai Sunac Greentown (collectively the “JV Target Group”).
(1) six subsidiaries of Greentown Real Estate:
- Shanghai Huazhe Bund Real Estate Co., Ltd. (“Shanghai Huazhe”)
- Shanghai Lvshun Real Estate Development Co., Ltd. (“Shanghai Lvshun”)
- Suzhou Greentown Yuyuan Real Estate Development Co., Ltd. (“Suzhou Yuyuan”)
- Suzhou Greentown Rose Garden Real Estate Development Co., Ltd. (“Suzhou Rose Garden”)
- Wuxi Greentown Real Estate Development Co., Ltd. (“Wuxi Greentown”)
- Tianjin Yijun Investment Co., Ltd. (“Tianjin Yijun”)
(2) one jointly controlled entity of Greentown Real Estate
- Changzhou Greentown Real Estate Co., Ltd. (“Changzhou Greentown”)
(3) one associate of Greentown Real Estate
- Wuxi Taihu Greentown Real Estate Co., Ltd. (“Wuxi Taihu”)

Sunac Zhidi and Greentown Real Estate owned 50% equity interests in Shanghai Sunac Greentown respectively. Shanghai Sunac Greentown became a new subsidiary of the Company as Sunac Zhidi has control in it.

– IV-1 –

MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET COMPANIES

APPENDIX IV

50% equity interest of another previously wholly-owned subsidiary of Greentown Real Estate, Woods Golf Group. Woods Golf Group became a new associate of the Company as Greentown Real Estate has control in it.

Reference is made to the details of the nine Target Companies as set out in the section headed “LETTER FROM THE BOARD” in this circular.

Based on the structure of the Transactions and the disclosure format of the financial information about the Target Companies, comprising the JV Target Group as set out in Appendix II and the Woods Golf Group as set out in Appendix III, our analysis of the Target Companies is separate into one for the JV Target Group and one for Woods Golf Group respectively.

– IV-2 –

MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET COMPANIES

APPENDIX IV

A. THE JV TARGET GROUP

Revenue

The JV Target Group recorded a total revenue of RMB1,333.0 million for the year ended 31 December 2011 from the delivery of properties of Greentown Wuxi Yulan Garden Project. The revenue for the six months ended 30 June 2012 amounted to RMB2,382.9 million which were attributable to the deliveries of properties of Greentown Shanghai Bund House Project amounting to RMB2,299.6 million and Greentown Wuxi Yulan Garden Project amounting to RMB83.3 million.

Apart from Greentown Wuxi Yulan Garden Project and Shanghai Bund House Project which commenced to deliver properties at the end of 2011 and in the first half of 2012 respectively, all the other projects had not ever recorded any revenue from the sales of properties because they were all still in the construction stage.

The following table sets out certain details of the revenue breakdown:

					Six months ended	Six months ended	Six months ended
	Year	ended 31 December			30	June
	2009		2010	2011	2011		2012
	RMB’000		RMB’000	RMB’000	RMB’000		RMB’000
Revenue
Wuxi Yulan Garden	–		–	1,333,034	–		83,296
Shanghai Bund House	–		–	–	–		2,299,614
Total	–		–	1,333,034	–		2,382,910


GFA delivered
(sq.m.)
Wuxi Yulan Garden	–		–	117,546	–		8,309
Shanghai Bund House	–		–	–	–		36,920
Total	–		–	117,546	–		45,229


Average selling prices
(“ASP”) per sq.m.
sold (RMB)	–		–	11,341	–		52,685

– IV-3 –

MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET COMPANIES

APPENDIX IV

Cost of sales

Cost of sales during the period comprised the costs incurred in relation to direct development activities for the properties delivered during the period, such as land use rights costs, construction costs, capitalized finance costs and business tax.

The cost of sales of the JV Target Group amounted to RMB972.1 million in 2011. For the six months ended 30 June 2012 the JV Target Group recorded cost of sales of RMB1,620.3 million, of which Shanghai Bund House accounted for 96%. The fluctuations of cost of sales during the years/periods were in line with the changes of GFA of properties delivered to the customers.

Gross profit

Excluding the impact of loss on realisable value, the gross profit amounted to RMB360.9 million in 2011 with the gross profit margin of 27% all deriving from the delivery of the properties of Greentown Wuxi Yulan Garden Project.

The gross profit amounted to RMB762.6 million for the six months ended 30 June 2012 and the gross profit margin stood at 32%, which was primarily due to the delivery of Shanghai Bund House Project with higher ASP in the first half year of 2012.

Selling and marketing costs

The selling and marketing costs of the JV Target Group during the period comprised primarily the advertisement and promotion costs relating to the pre-sale of properties, sales and marketing staff costs, travel expenses, office expenses and other expenses relating to pre-sales and marketing activities. The advertisement and promotion costs were recorded as expenses immediately in the period when they took place.

The selling and marketing costs of the JV Target Group amounted to RMB13.8 million, RMB30.4 million, RMB47.6 million for the three years ended 31 December 2009, 2010 and 2011, respectively, which were primarily due to (i) the increase in the number of projects which were acquired and newly established in 2010 and (ii) increased marketing efforts on promoting property sales.

The selling and marketing costs of the JV Target Group was decreased by RMB6.0 million from RMB23.3 million for the six months ended 30 June 2011 to RMB17.3 million for the corresponding period in 2012, which was mainly due to the commencement of pre-sale of two projects, namely Greentown Suzhou Majestic Mansion and Greentown Shanghai Yulan Garden, in the first half year of 2011 when substantially more advertisement and promotion costs occurred.

– IV-4 –

MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET COMPANIES

APPENDIX IV

Administrative expenses

The administrative expenses of the JV Target Group during the period mainly included administrative staff costs, office and travel expenses, consulting expenses, taxes and other general and administrative expenses.

The administrative expenses of the JV Target Group amounted to RMB11.4 million, RMB31.4 million and RMB36.1 million for the three years ended 31 December 2009, 2010 and 2011, respectively. The fluctuations of administrative expenses were in line with the project development and promotion schedule.

The JV Target Group recorded administrative expenses of RMB18.2 million for the six months ended 30 June 2012, decreased slightly comparing to RMB19.3 million for the corresponding period in 2011.

Headcount and policy of employee remuneration

As at 30 June 2012, the number of employees in the JV Target Group was approximately 216.

The JV Target Group is required to make contribution to the social insurance contribution scheme, which includes the endowment insurance, medical insurance and unemployment insurance for the employees according to the relevant regulations in the PRC. The JV Target Group is also required to pay housing funds to the employees.

– IV-5 –

MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET COMPANIES

APPENDIX IV

Finance costs

				Six months ended	Six months ended	Six months ended
	Year ended 31 December			30 June
	2009	2010	2011	2011		2012
	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000
				(unaudited)
Finance costs
Interest expenses on
−bank borrowings	70,732	131,586	362,652	181,332	143,050
−borrowings from
non-bank financial
institutions	43,346	64,736	101,735	31,850		68,981
−borrowings from
related parties	40,152	56,994	154,473	76,215		97,001
−borrowings from
non-controlling
interests	36,901	−	5,991	404		11,534

	191,131	253,316	624,851	289,801	320,566
Less:
Capitalised finance
costs	(187,197)	(194,360)	(399,224)	(176,989)	(200,490)
	3,934	58,956	225,627	112,812	120,076

The fluctuations of finance costs during the years/period were mainly due to the changes of borrowings in line with the funding demands in different stages of the project development and the fluctuation of capitalized finance costs during the construction periods.

Share of profit/(loss) of associates

Wuxi Taihu was the JV Target Group’s only associated company, which was established in January 2010. The JV Target Group’s share of profit of associate for the year ended 31 December 2011 and for the six months ended 30 June 2012 amounted to RMB0.04 million and RMB0.03 million, respectively. However, the JV Target Group recorded a share of loss of associate of RMB0.32 million and RMB0.18 million for the year ended 31 December 2010 and for the six months ended 30 June 2011, respectively. Such fluctuations during the years and periods were basically in line with the changes in interest income arising from the amount due from the related party.

Share of loss of jointly controlled entities

The JV Target Group had only one jointly controlled entity, Changzhou Greentown, which was established in November 2010. For the year ended 31 December 2010 and 2011 and for the six months ended 30 June 2011 and 2012, the JV Target Group’s share of loss of jointly controlled entity amounted to RMB6.7 million, RMB16.5 million, RMB7.4 million and RMB10.8 million respectively. These changes were mainly due to the fluctuations of the finance cost arising from borrowings from the related party for funding its development project.

– IV-6 –

MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET COMPANIES

APPENDIX IV

Borrowings and collateral

								As at
			As	at 31 December				30 June
			2009		2010		2011	2012
			RMB’000		RMB’000	RMB’000		RMB’000
Non-current
Secured,		borrowed from:
– Banks			1,400,000		2,305,000	2,783,000		2,979,000
– Other financial institutions			483,000		483,000	1,309,100		1,044,650
Unsecured, borrowed from:
– Banks			–		–		–	–

			1,883,000		2,788,000	4,092,100		4,023,650
Less:	Current portion of long-
		term borrowings	–		–	(1,564,450)		(2,683,650)
			1,883,000		2,788,000	2,527,650		1,340,000


								As at
			As	at 31 December				30 June
			2009		2010		2011	2012
			RMB’000		RMB’000	RMB’000		RMB’000
Current
Secured,		borrowed from:
– Banks			–		1,080,000	1,080,000		1,080,000
– Other financial institutions			–		500,000		–	–
Unsecured, borrowed from:
– Banks			–		–		–	–

Add:	Current portion of long-
		term borrowings	–		–	1,564,450		2,683,650
			–		1,580,000	2,644,450		3,763,650

Total			1,883,000		4,368,000	5,172,100		5,103,650

The JV Target Group’s borrowings of RMB1,883.0 million, RMB4,368.0 million, RMB5,172.1 million and RMB5,103.7 million as at 31 December 2009, 2010 and 2011 and 30 June 2012 were jointly secured by the JV Target Group’s properties under development and completed properties held for sale amounting to RMB2,587.6 million, RMB7,471.9 million, RMB7,561.2 million and RMB7,775.4 million, respectively.

– IV-7 –

MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET COMPANIES

APPENDIX IV

Cash position

The JV Target Group operated in a capital intensive industry and had historically financed, and expected to continue to finance its working capital, capital expenditures and other capital requirements through the proceeds from pre-sale and sale of properties, borrowings from commercial banks and other funds and capital contributions from the shareholders. The JV Target Group’s short-term liquidity requirements related to servicing its debt and funding its working capital requirements and its sources of short-term liquidity included cash balances, the proceeds from pre-sale and sale of properties and new borrowings. The JV Target Group’s long-term liquidity requirements related to funds required for the development of its new property projects and repaying its long-term debts and its sources of long-term liquidity included loans and capital contributions from shareholders.

As at 31 December 2009, 2010 and 2011 and 30 June 2012, the total balances of cash and cash equivalents and restricted cash of the JV Target Group were RMB511.7 million, RMB449.5 million, RMB153.3 million and RMB361.7 million, respectively.

Foreign exchange risk

The JV Target Group mainly operates in the PRC. All transactions are principally conducted in RMB and the assets and liabilities are all denominated in RMB. Therefore, it is not exposed to material foreign exchange risk.

– IV-8 –

MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET COMPANIES

APPENDIX IV

Interest rate of borrowings

The table below sets out the JV Target Group’s exposure to interest rate risks, including the liabilities at carrying amounts (categorized by maturity dates).

			Floating rates				Fixed rates
	Less	than	1 to		Less	than	1 to
	1	year	5 years	Sub-total	1	year	5 years	Sub-total	Total
	RMB’million		RMB’million	RMB’million	RMB’million		RMB’million	RMB’million	RMB’million
Borrowings
At 31 December 2009		–	1,400	1,400		–	483	483	1,883


At 31 December 2010	1,080		2,305	3,385		500	483	983	4,368


At 31 December 2011	1,580		2,283	3,863	1,064		245	1,309	5,172


At 30 June 2012	2,719		840	3,559	1,045		500	1,545	5,104

The fluctuations in the interest rate between the financial years were mainly due to different sources of borrowings taken out by different projects, which were affected by factors such as profitability of the projects, the market conditions, as well as the timing of the funds.

The JV Target Group did not use any interest rate swaps to hedge its exposure against interest rate risk during the three years ended 31 December 2011 and six months ended 30 June 2012. The JV Target Group analyzed its interest rate exposure monthly by considering refinancing, renewal of existing positions and alternative financing.

Gearing ratios

Gearing ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings (including current and long-term borrowings) less restricted cash and cash and cash equivalent. Total capital is calculated as total equity plus net debt. As at 31 December 2009, 2010 and 2011 and 30 June 2012, the JV Target Group’ gearing ratios were 67%, 68%, 78% and 74%, respectively.

The project development of the JV Target Group was mainly financed by shareholders’ loans, external borrowings and cash proceeds from pre-sale of its properties. The fluctuations of the gearing ratio during the periods were due to the increased demands for external funds, resulting in increases in external borrowings and increases in cash proceeds generated from pre-sales.

– IV-9 –

MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET COMPANIES

APPENDIX IV

Contingent liabilities

The JV Target Group had arranged bank financings for certain purchasers of the properties developed by it and had provided guarantees to secure repayment obligations of such purchasers. Such guarantees shall terminate upon the earlier of (i) the transfer of the real estate ownership certificate to the purchasers which will generally occur within an average period of two to three years from the completion of the guarantee registration; and (ii) the satisfaction of mortgage loans by the purchasers of the properties.

Pursuant to the terms of the guarantees, upon default of mortgage payments by a purchaser, the relevant member of the JV Target Group is responsible for repaying the outstanding mortgage principal together with the outstanding accrued interest owed and certain penalty charges if the purchaser defaults his/her loans from the banks. The JV Target Group is entitled to take over the legal title and possession of the related properties in such case. The guarantee period starts from the date of grant of the mortgage. The Directors consider that the likelihood of default of payments by the purchasers is minimal and therefore the financial guarantee which measured at fair value is immaterial.

As at 31 December 2009, 2010 and 2011 and 30 June 2012, the aforementioned guaranteed customers’ bank loan balances were respectively as follows:

				As at
	As at 31 December			30 June
	2009	2010	2011	2012
	RMB’000	RMB’000	RMB’000	RMB’000
Guarantees in respect of
mortgage facilities for
customers	–	–	168,149	339,736

Material acquisition and disposal

The JV Target Group did not have any material acquisition and disposal of subsidiaries and associated companies for each of the years ended 31 December 2009, 2010 and 2011 and the six months ended 30 June 2012.

Prospects of the JV Target Group

The JV Target Group has been engaging in property development in the PRC and will continue to focus on the high-end property strategy, maintaining a fast and steady pace of development with an objective of profit-making.

Future plans for capital assets

The JV Target Group would continue to be engaged in the business of development of real estate properties after completion of the Transactions. The present properties under development will continue to be developed as planned.

– IV-10 –

MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET COMPANIES

APPENDIX IV

Expected sources of funding

The future operation of the JV Target Group will be mainly financed by the proceeds from pre-sale of properties developed by the JV Target Group.

B. WOODS GOLF GROUP

Revenue

The following table sets out certain details of the revenue breakdown:

					Six months ended	Six months ended
	Year	ended 31 December			30 June
	2009		2010	2011	2011	2012
	RMB’000		RMB’000	RMB’000	RMB’000	RMB’000
					(unaudited)
Sales of properties	1,292,818		351,856	766,364	31,266	465,373
Hotel management
services	–		–	–	–	3,762

Total	1,292,818		351,856	766,364	31,266	469,135


GFA delivered (sq.m.)	29,043		6,760	12,660	491	6,825
Average selling prices
(“ASP”) per sq.m.
sold (RMB)	44,514		52,050	60,534	63,678	68,187

The Greentown Shanghai Rose Garden Project is divided into seven Phases, of which Phase I, Phase II, Phase III and Phase IV were completed in December 2007, September 2009, December 2011 and June 2012, respectively. Upon delivery of properties, revenue from the pre-sale or sale of the properties would be recognized. The fluctuations of revenue during the three years ended 31 December 2011 and six months ended 30 June 2011 and 2012 were basically due to the delivery of GFA of different Phases during the period.

Cost of sales

Cost of sales during the period comprised the costs that Woods Golf Group incurred in relation to its direct development activities for the properties delivered during the period, such as land use rights costs, construction costs, capitalized finance costs and business tax.

The cost of sales of Woods Golf Group amounted to RMB1,065.0 million, RMB248.6 million, RMB457.3 million, RMB19.0 million and RMB229.3 million for the three years ended 31 December 2009, 2010, 2011 and six months ended 30 June 2011 and 2012, respectively. The fluctuations of cost of sales were due to the changes in GFA delivered to the customers during the relevant period.

– IV-11 –

MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET COMPANIES

APPENDIX IV

Gross profit

The gross profit of Woods Golf Group amounted to RMB227.8 million, RMB103.2 million, RMB309.1 million, RMB12.2 million and RMB239.8 million for the three years ended 31 December 2009, 2010, 2011 and six months ended 30 June 2011 and 2012, respectively. The gross profit margin was 18%, 29%, 40%, 39% and 51% for the three years ended 31 December 2009, 2010, 2011 and six months ended 30 June 2011 and 2012, respectively. The changes in gross profit and gross profit margin were in line with the changes in GFA delivered with different ASP during the relevant period.

Selling and marketing costs

The selling and marketing costs of Woods Golf Group during the period comprised primarily the advertisement and promotion costs relating to the pre-sale of the properties, sales and marketing staff costs, travel expenses, office expenses and other expenses relating to the sales and marketing. The advertisement and promotion costs were recorded as expenses immediately in the period when they took place.

The selling and marketing costs of Woods Golf Group rose to RMB19.0 million in 2010 from RMB16.9 million in 2009, which was primarily due to the increase of sales and marketing staff costs with the growth of sales performance. Selling and marketing costs decreased to RMB13.8 million in 2011 from RMB19.0 million in 2010, mainly due to the decrease in sales and marketing staff costs.

Woods Golf Group recorded a total selling and marketing costs of RMB9.8 million for the six months ended 30 June 2012, increasing substantially compared to RMB5.9 million for the corresponding period in 2011, which was primarily attributable to the increase in the advertisement and marketing costs as a result of the commencement of the presale or sale of properties.

Administrative expenses

The administrative expenses of Woods Golf Group during the period mainly included administrative staff costs, general office and travel expenses, consulting expenses, tax expenses and other general and administrative expenses.

The administrative expenses of Woods Golf Group amounted to RMB13.3 million, RMB9.3 million, RMB12.3 million, RMB5.9 million and RMB8.1 million in 2009, 2010 and 2011 and for the six months ended 30 June 2011 and 2012, respectively. The fluctuations of administrative expenses during the years were in line with the project development and promotion schedule.

– IV-12 –

MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET COMPANIES

APPENDIX IV

Number and policy of employee remuneration

As at 30 June 2012, the number of employees of Woods Golf Group was approximately 59.

Woods Golf Group is required to make contribution to the social insurance contribution scheme in the PRC, of which each of Woods Golf Group and its employees are required to make contribution to fund the endowment insurance, medical insurance and unemployment insurance at the rates promulgated by the relevant PRC laws. Woods Golf Group is also required to pay housing funds to the employees.

Finance costs

						Six months ended	Six months ended	Six months ended
		Year ended 31 December				30 June
		2009		2010	2011	2011		2012
		RMB’000	RMB’000		RMB’000	RMB’000	RMB’000
						(unaudited)
Interest expenses on:
– Bank borrowings		32,225		9,626	1,261	625		599
– Borrowings from non-
	bank financial
	institutions	–		25,333	21,903	21,903		–
– Borrowings from related
	party	23,887		133,347	42,670	36,987		–
– Borrowings from third
	party	–		–	561	–		1,444
		56,112		168,306	66,395	59,515		2,043
Less:	Capitalised interests	(39,613)		–	–	–		–
		16,499		168,306	66,395	59,515		2,043

The fluctuations of finance costs during the three years ended 31 December 2011 and six months ended 30 June 2012 were mainly due to the changes of borrowings in line with the funds demands in different stages of the project development and the fluctuation of capitalized finance costs during the construction periods.

– IV-13 –

MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET COMPANIES

APPENDIX IV

Borrowings and collateral

				As at
	As at 31 December			30 June
	2009	2010	2011	2012
	RMB’000	RMB’000	RMB’000	RMB’000
Non-current
Secured, borrowed from
banks	821,670	19,229	16,670	15,338

Current
Secured, borrowed from other
financial institutions	–	500,000	–	–
Unsecured, borrowed from	–	–	–	–
– shareholders	–	1,553,920	–	–
– third parties	–	–	25,000	–
	–	2,053,920	25,000	–
Total	821,670	2,073,149	41,670	15,338

Woods Golf Group’s borrowings of RMB821.7 million, RMB519.2 million, RMB16.7 million and RMB15.3 million as at 31 December 2009, 2010 and 2011 and 30 June 2012 were jointly secured by Woods Golf Group’s properties under development and buildings totaling RMB640.0 million, RMB646.2 million, RMB17.1 million and RMB16.3 million, respectively.

Cash position

Woods Golf Group operated in a capital intensive industry and had historically financed, and expected to continue to finance its working capital, capital expenditures and other capital requirements through the proceeds from pre-sale and sale of properties, borrowings from commercial banks and other funds providers and capital contributions from the shareholders. Woods Golf Group’s short-term liquidity requirements related to servicing its debts and funding its working capital requirements and its sources of short-term liquidity include cash balances, proceeds from pre-sale and sale of properties and new borrowings. Woods Golf Group’s long-term liquidity requirements related to funding the development of its new property projects and repaying its long-term debts and its sources of long-term liquidity include loans, capital contributions from shareholders.

– IV-14 –

MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET COMPANIES

APPENDIX IV

As at 31 December 2009, 2010 and 2011 and 30 June 2012, the total balances of cash and cash equivalents and restricted cash of Woods Golf Group were RMB324.0 million, RMB99.0 million, RMB7.1 million and RMB33.0 million, respectively.

Foreign exchange risk

Woods Golf Group mainly operates in the PRC. The transactions were principally conducted in RMB and the assets and liabilities are all denominated in RMB. Therefore, Woods Golf Group is not exposed to material foreign exchange risk.

Interest rate of the borrowings

The table below sets out Woods Golf Group’s exposure to interest rate risks, including the liabilities at carrying amounts (categorized by maturity dates).

			Floating rates				Fixed rates
	1 to		Over		1 to		Over
	5 years		5 years	Sub-total	5 years		5 years	Sub-total	Total
	RMB’000		RMB’000	RMB’000	RMB’000		RMB’000	RMB’000	RMB’000
Borrowings
At 31 December 2009	800,000		21,670	821,670		–	–	–	821,670


At 31 December 2010		–	19,229	19,229	2,053,920		–	2,053,920	2,073,149


At 31 December 2011		–	16,670	16,670	25,000		–	25,000	41,670


At 30 June 2012	15,338		–	15,338		–	–	–	15,338

The fluctuations in the interest rate between the financial years were mainly due to the different sources of borrowings taken out by different projects, which were affected by factors such as the profitability of the projects, the market conditions, as well as the timing of the funds.

Woods Golf Group did not use any interest rate swaps to hedge its exposure against interest rate risk during the three years ended 31 December 2011 and six months ended 30 June 2012. Woods Golf Group analyzed its interest rate exposure monthly by considering refinancing, renewal of existing positions and alternative financing.

– IV-15 –

MANAGEMENT DISCUSSION AND ANALYSIS OF THE TARGET COMPANIES

APPENDIX IV

Gearing ratios

Gearing ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings (including current and long-term borrowings) less restricted cash and cash and cash equivalent. Total capital is calculated as total equity plus net debt. As at 31 December 2009, 2010 and 2011 and 30 June 2012 Woods Golf Group’s gearing ratios were 73%, 87%, 7% and -3%, respectively.

The project development of Woods Golf Group was mainly financed by shareholders’ loans, external borrowings and cash proceeds from pre-sale of the properties. The fluctuations of the gearing ratio during the periods were due to the increased demands for external funds, resulting in increases in external borrowings and increases in cash proceeds from pre-sale in line with the project development and promotion schedule.

Contingent liabilities

As at 31 December 2009, 2010 and 2011 and 30 June 2012 Woods Golf Group has not arranged any bank financing for purchasers of the properties developed by Woods Golf Group and has never provided any guarantees to secure repayment obligations of such purchasers.

Material acquisition and disposal

Woods Golf Group had no material acquisition and disposal of subsidiaries and associated companies for each of the years ended 31 December 2009, 2010 and 2011 and the six months ended 30 June 2012.

Prospects of Woods Golf Group

Woods Golf Group has been engaged in the property development in the PRC for several years and will continue to focus on the high-end property strategy, maintaining a fast and steady pace of development with an objective of profit-making.

Future plans for capital assets

Woods Golf Group would continue to be engaged in the business of development of real estate properties after the completion of the Transactions. The present properties under construction would also continue to be developed as planned.

Expected sources of funding

The future operation of Woods Golf Group will be mainly financed by the proceeds from pre-sale of properties developed by Woods Golf Group.

– IV-16 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

APPENDIX V

A. Unaudited Pro Forma Financial Information

The following is an illustrative unaudited pro forma statement of assets and liabilities of the Group (“Unaudited Pro Forma Financial Information”), which has been prepared on the basis of the notes set forth below for the purpose of illustrating the effects of the Acquisition, as if it has taken place in 30 June 2012.

This Unaudited Pro Forma Financial Information has been prepared for illustrative purposes only and because of its hypothetical nature, it may not give a true picture of the financial position of the Group had the Acquisition been completed on 30 June 2012 or any future date.

										Pro forma adjustments	Pro forma adjustments	Pro forma adjustments	Pro forma adjustments
																		Transaction
									Remeasurement										costs and		Pro forma
				Carrying		Restructuring				of identifiable								settlement				financial
				value	of		of certain			assets and								of amount			information
				the JV			liability as		liabilities of the			Acquisition							due	to		of the
				Target			part of the			JV Target			of Woods					Greentown				enlarged
	The Group			Group			Transactions			Group			Golf		Reclassifications			Real Estate				Group
																			(Notes 7
	_(Note _	1)		_(Note _	2)		_(Note _	3)		_(Note _	4)		_(Note _	5)		_(Note _	6)		_and _	8)
	RMB’000			RMB’000			RMB’000			RMB’000			RMB’000			RMB’000			RMB’000			RMB’000
ASSETS
Non-current assets
Property, plant and equipment	30,988			7,498				–			–			–			–			–		38,486
Investment properties	551,500				–			–			–			–			–			–		551,500
Intangible assets (non goodwill from
MA)	310,746				–			–			–			–			–			–		310,746
Investment in a jointly controlled
entity	97,490			206,594				–		(12,171)				–			–			–		291,913
Investment in associates	977,130			90,077				–		8,880			590,975				–			–		1,667,062
Loan to associates		–			–			–			–			–			–			–		–
Deferred income tax assets	530,906			63,289				–			–			–			–			–		594,195

	2,498,760			367,458				–		(3,291)			590,975				–			–		3,453,902

Current assets
Properties under development	26,689,687		12,791,638					–		4,356,340				–			–			–	43,837,665
Completed properties held for sale	4,737,715			966,188				–			–			–			–			–		5,703,903
Amounts due from related parties	2,180,793			2,718				–			–			–		(2,718)				–		2,180,793
Amounts due from Greentown Real
Estate		–		122,981				–			–			–		(122,981)				–		–
Other receivables	271,763			206,962				–			–			–		2,718				–		481,443
Prepayment	1,609,377			270,823				–			–			–			–			–		1,880,200
Restricted cash	2,189,855			157,122				–			–			–			–			–		2,346,977
Cash and cash equivalents	2,640,510			204,572				–			–			–			–	(3,357,936)				(512,854)
	40,319,700		14,723,004					–		4,356,340				–		(122,981)		(3,357,936)			55,918,127

Total assets	42,818,460		15,090,462					–		4,353,049			590,975			(122,981)		(3,357,936)			59,372,029

– V-1 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

APPENDIX V

										Pro forma adjustments	Pro forma adjustments	Pro forma adjustments	Pro forma adjustments
																		Transaction
									Remeasurement									costs and	Pro forma
				Carrying		Restructuring				of identifiable								settlement		financial
				value	of		of certain			assets and								of amount	information
				the JV			liability as		liabilities of the			Acquisition						due to		of the
				Target			part of the			JV Target			of Woods					Greentown		enlarged
	The Group			Group			Transactions			Group			Golf		Reclassifications			Real Estate		Group
																		(Notes 7
	_(Note _	1)		_(Note _	2)		_(Note _	3)		_(Note _	4)		_(Note _	5)		_(Note _	6)	and 8)
	RMB’000			RMB’000			RMB’000			RMB’000			RMB’000			RMB’000		RMB’000		RMB’000
LIABILITIES
Non-current liabilities
Borrowings	(6,983,290)		(1,340,000)					–			–			–			–	–	(8,323,290)
Long-term payable	(161,843)				–			–			–			–			–	–		(161,843)
Deferred income tax liabilities	(2,310,073)			(4,557)				–		(2,851,816)				–			–	–	(5,166,446)

	(9,455,206)		(1,344,557)					–		(2,851,816)				–			–	–	(13,651,579)

Current liabilities
Trade and other payables	(7,419,877)		(1,750,462)					–			–			–		(4,356)		(3,500)	(9,178,195)
Advanced proceeds from customers	(11,126,476)		(1,833,345)					–			–			–			–	–	(12,959,821)
Amounts due to related parties	(627)			(4,356)				–			–			–		(143,194)		–		(148,177)
Amounts due to Greentown Real
Estate (Note 8)		–	(4,329,689)				294,909			(1,158,443)			(590,975)			270,531		3,357,936	(2,155,731)
Current income tax liabilities	(1,180,507)			(374,679)			(73,727)				–			–			–	875	(1,628,038)
Borrowings	(5,470,700)		(3,763,650)					–			–			–			–	–	(9,234,350)
	(25,198,187)		(12,056,181)				221,182			(1,158,443)			(590,975)			122,981		3,355,311	(35,304,312)

Total liabilities	(34,653,393)		(13,400,738)				221,182			(4,010,259)			(590,975)			122,981		3,355,311	(48,955,891)

Notes:

The balances represent the statement of assets and liabilities of the Group as at 30 June 2012 as extracted from the unaudited condensed interim consolidated balance sheet of the Group included in the published condensed interim report of the Company for the six months ended 30 June 2012.
The balances represent the statement of assets and liabilities as at 30 June 2012 of the JV Target Group as extracted from the Accountant’s Report included in Appendix II in the Circular.
As part of the Transactions, Greentown Real Estate transfers a receivable from Target Company 4 to the JV Company at no costs. The adjustment also includes the estimated tax impact for the transfer.
The adjustments represent the re-measurement of identifiable assets and liabilities of the JV Target Group as at 30 June 2012 based the fair value estimated by the Company with reference to properties valuation performed by an independent valuer.
The adjustment represents the Group’s investment in Woods Golf, which becomes an associate of the Group.
Reclassification of the net of amounts due from/to Greentown Real Estate, which including amount due to/from Greentown Real Estate in the target entities.
The adjustments represent the transactions costs of RMB3.5 million and the related tax effect.
The balance of amount due to Greentown Real Estate does not include the total consideration of this Transactions amounting to RMB3,358 million, which has been deducted in cash and cash equivalents. In total consideration, RMB1,749 million is for equity interest transfer and the remaining RMB1,609 million is for the Group’s acquisition of Greentown Real Estate’s amounts due from the target entities, in which RMB1,806 million is amount due to Greentown Real Estate by No.1 to No.8 target companies and RMB197 million is amount due from Greentown Real Estate by No.9 target company (Woods Golf), are to be settled upon completion of this Transactions.
The difference between the consideration and the fair value for the related equity interests in the target entities is RMB177 million, which will be recognized as an income in the consolidated financial statements of the Group for the year ending 31 December 2012, according to HKFRSs.
Since the fair values of the identifiable assets and liabilities of the Target Companies as at the date of Completion may be different from their respective fair values used in the preparation of the above unaudited pro forma financial information, the actual amount of the identifiable assets and liabilities and the income as stated in note 9 above may be different from the estimated amount shown in this Appendix.
No adjustments have been made to reflect any trading results or other transactions of the Group and the Target Companies entered into subsequent to 30 June 2012.

– V-2 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

APPENDIX V

The following is the text of a report received from PricewaterhouseCoopers, Certified Public Accountants, Hong Kong, for the purpose of incorporation in this circular.

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ACCOUNTANT’S REPORT ON UNAUDITED PRO FORMA FINANCIAL INFORMATION TO THE DIRECTORS OF SUNAC CHINA HOLDINGS LIMITED

We report on the unaudited pro forma financial information set out on pages V-1 to V-2 under the heading of “Unaudited Pro Forma Financial Information” (the “Unaudited Pro Forma Financial Information”) in Appendix V of the circular dated 30 October 2012 (the “Circular”) of Sunac China Holdings Limited (the “Company”), in connection with the proposed acquisition of the 50% equity interest in Shanghai Sunac Greentown Real Estate Development Co., Ltd., and 50% of equity interest held by Greentown Real Estate Group Co., Ltd. in Shanghai Greentown Woods Golf Villas Development Co., Ltd. (the “Acquisition”) by the Company. The Unaudited Pro Forma Financial information has been prepared by the directors of the Company, for illustrative purposes only, to provide information about how the Acquisition might have affected the relevant financial information of the Company, its subsidiaries, associated and jointly controlled entities (hereinafter collectively referred to as the “Group”). The basis of preparation of the Unaudited Pro Forma Financial Information is set out on pages V-1 to V-2 of the Circular.

Respective Responsibilities of Directors of the Company and the Reporting Accountant

It is the responsibility solely of the directors of the Company to prepare the Unaudited Pro Forma Financial Information in accordance with paragraph 4.29 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”) and Accounting Guideline 7 “Preparation of Pro Forma Financial Information for Inclusion in Investment Circulars” issued by the Hong Kong Institute of Certified Public Accountants (the “HKICPA”).

It is our responsibility to form an opinion, as required by paragraph 4.29(7) of the Listing Rules, on the Unaudited Pro Forma Financial Information and to report our opinion to you. We do not accept any responsibility for any reports previously given by us on any financial information used in the compilation of the Unaudited Pro Forma Financial Information beyond that owed to those to whom those reports were addressed by us at the dates of their issue.

– V-3 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

APPENDIX V

Basis of Opinion

We conducted our engagement in accordance with Hong Kong Standard on Investment Circular Reporting Engagements 300 “Accountants’ Reports on Pro Forma Financial Information in Investment Circulars” issued by the HKICPA. Our work, which involved no independent examination of any of the underlying financial information, consisted primarily of comparing the unadjusted unaudited consolidated statement of assets and liabilities as at 30 June 2012 as set out in the Unaudited Pro forma Financial Information with the published unaudited condensed consolidated financial information of the Company for the six months ended 30 June 2012 as set out in the 2012 interim report of the Company, considering the evidence supporting the adjustments and discussing the Unaudited Pro Forma Financial Information with the directors of the Company.

We planned and performed our work so as to obtain the information and explanations we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the Unaudited Pro Forma Financial Information has been properly compiled by the directors of the Company on the basis stated, that such basis is consistent with the accounting policies of the Group and that the adjustments are appropriate for the purposes of the Unaudited Pro Forma Financial Information as disclosed pursuant to paragraph 4.29(1) of the Listing Rules.

The Unaudited Pro Forma Financial Information is for illustrative purposes only, based on the judgments and assumptions of the directors of the Company, and, because of its hypothetical nature, does not provide any assurance or indication that any event will take place in the future and may not be indicative of the financial position of the Group as at 30 June 2012 or any future date.

– V-4 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

APPENDIX V

Opinion

In our opinion:

(a) the Unaudited Pro Forma Financial Information has been properly compiled by the directors of the Company on the basis stated;
(b) such basis is consistent with the accounting policies of the Group; and
(c) the adjustments are appropriate for the purposes of the Unaudited Pro Forma Financial Information as disclosed pursuant to paragraph 4.29(1) of the Listing Rules.

PricewaterhouseCoopers

Certified Public Accountants Hong Kong, 30 October 2012

– V-5 –

VALUATION REPORT

APPENDIX VI

The following is the text of a letter, summary of valuations and valuation certificates prepared for the purpose of incorporation in the Circular, received from DTZ Debenham Tie Leung Limited, an independent property valuer, in connection with its opinion of values of the property interest to be acquired by the Group as at 31 July 2012.

==> picture [111 x 105] intentionally omitted <==

16th Floor Jardine House 1 Connaught Place Central Hong Kong 30 October 2012

The Directors Sunac China Holdings Ltd. 3rd Floor, Building A3 Magnetic Plaza Binshuixi Road Nankai District Tianjin The People’s Republic of China

Dear Sirs,

INSTRUCTIONS, PURPOSE & DATE OF VALUATION

In accordance with your instructions for us to value the properties to be acquired by Sunac China Holdings Limited (referred to as the “Company”) and its subsidiaries (hereinafter together referred to as the “Group”) in the People’s Republic of China (the “PRC”) (as more particularly described in the valuation certificates), we confirm that we have inspected the properties, made relevant enquiries and obtained such further information as we consider necessary to provide you with our opinion of the values of such properties as at 31 July 2012 (the “date of valuation”).

DEFINITION OF MARKET VALUE

Our valuation of each of the properties represents its market value which in accordance with The HKIS Valuation Standards on Properties (First Edition 2005) published by the Hong Kong Institute of Surveyors is defined as “the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s-length transactions after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion”.

– VI-1 –

VALUATION REPORT

APPENDIX VI

VALUATION BASIS AND ASSUMPTIONS

Our valuations exclude an estimated price inflated or deflated by special terms or circumstances such as atypical financing, sale and leaseback arrangement, special considerations or concessions granted by anyone associated with the sale, or any element of special value. In valuing the properties, we have complied with the requirements set out in Chapter 5 and Practice Note 12 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, The Code on Takeovers and Mergers, Share Repurchases of Securities and Future Commission and the HKIS Valuation Standards on Properties (First Edition 2005) issued by the Hong Kong Institute of Surveyors.

In the course of our valuation of the properties in the PRC, we have assumed that, unless otherwise stated, the transferable land use rights of the properties for their respective terms at nominal annual land use fees have been granted and that any premium payable has already been fully paid.

We have relied on the information provided by the Group and the advice provided by Jincheng Tongda & Neal Law Firm, the Group’s legal adviser, regarding the title to each of the properties and the interests of the Group in the properties. In valuing the properties, we have assumed that the Group has an enforceable title to each of the properties and has free and uninterrupted rights to use, occupy or assign the properties for the whole of the respective unexpired land use term as granted.

In respect of the properties situated in the PRC, the status of titles and grant of major certificates approvals and licences, in accordance with the information provided by the Group are set out in the notes of the respective valuation certificates.

No allowance has been made in our valuations for any charges, mortgages or amounts owing on the properties nor for any expenses or taxation which may be incurred in effecting a sale. Unless otherwise stated, it is assumed that the properties are free from encumbrances, restrictions and outgoings of an onerous nature which could affect their values. In respect of the properties, we have relied on the legal opinion given to us by the Group’s legal adviser.

Our valuations are each on an entire interest basis.

For the properties situated in the PRC, we have been advised by the Group that the potential tax liabilities include Land Appreciation Tax (土地增值稅) at progressive tax rates from 30% to 60%, Business Tax (營業稅) at 5% of sales amount, related surcharge (附加稅) at 11% of Business Tax (營業稅), and Income Tax (所得稅) at 25% on profit before tax. The exact amount of tax payable upon realization of the relevant properties in the PRC will be subject to the formal tax advice issued by the relevant tax authorities at the time of disposal of relevant properties upon representation of the relevant transactions documents.

In respect of the properties to be acquired by the Group for sale and under construction in the PRC under Group I and Group II, the likelihood of the relevant tax liability being crystallized is high. As advised by the Group, the potential tax liabilities is estimated to be

– VI-2 –

VALUATION REPORT

APPENDIX VI

approximately RMB5,652.2 million would arise if such properties were to be sold at the amount of the valuation. The above amount is for indicative purpose and is calculated based on prevailing rules and information available as at the Latest Practicable Date.

In respect of the properties to be acquired by the Group for future development in the PRC under Group III, the likelihood of the relevant tax liability being crystallized is remote as the Group has no plan for the disposal of such properties yet.

METHOD OF VALUATION

In valuing the properties in Group I, which are acquired by the Group for sale in the PRC, we have used the direct comparison approach assuming sale of these properties in its existing state with the benefit of vacant possession by making reference to comparable sales transactions as available in the relevant market.

In valuing the properties in Group II and III, which are acquired by the Group under development and for future development respectively in the PRC, we have valued them on the basis that they will be developed and completed in accordance with the latest development proposals provided to us by the Group (if any). We have assumed that all consents, approvals and licences from relevant government authorities for the development proposals have been or will be obtained without onerous conditions or delays. We have also assumed that the design and construction of the developments are in compliance with the local planning and other relevant regulations and have been or will be approved by the relevant authorities. In arriving at our valuations, we have adopted the direct comparison approach by making reference to comparable sales evidence as available in the relevant market and have also taken into account the expended construction costs as well as the costs that will be expended to complete the developments. The “capital value when completed” represents our opinion of the aggregate selling prices of the development assuming that it were completed as at the date of valuation.

SOURCE OF INFORMATION

We have been provided by the Group with extracts of documents in relation to the titles to the properties. However, we have not inspected the original documents to ascertain any amendments which may not appear on the copies handed to us.

In the course of our valuation, we have relied to a very considerable extent on the information given to us by the Group in respect of the properties in the PRC and have accepted advice given by the Group on such matters as planning approvals or statutory notices, easements, tenure, identification of land and buildings, completion date of buildings, number of car parking spaces, particulars of occupancy, site and floor areas, interest attributable to the Group and all other relevant matters.

Dimensions, measurements and areas included in the valuation certificates are based on information provided to us and are therefore only approximations. We have had no reason to doubt the truth and accuracy of the information provided to us by the Group which is material to the valuations. We were also advised by the Group that no material facts have been omitted from the information provided.

– VI-3 –

VALUATION REPORT

APPENDIX VI

TITLE INVESTIGATION

We have been provided with extracts of documents relating to the titles of the properties in the PRC, but no searches have been made in respect of the properties. We have not searched the original documents to verify ownership or to ascertain any amendment which may not appear on the copies handed to us. We are also unable to ascertain the title of the properties in the PRC and we have therefore relied on the advice given by the Group regarding the Group’s interests in the PRC properties.

Unless otherwise stated, it is assumed that the properties are free from encumbrances, restrictions and outgoings of any onerous nature which could affect their values.

SITE INSPECTION

Our DTZ Shanghai office valuer Eis Yao, George Deng and Jack Sun, Tianjin Office valuer Thomas Tang inspected the exterior and, whenever possible, the interior of the properties between July 2012 and September 2012. However, no structural survey has been made, but in the course of our inspection, we did not note any serious defects. We are not, however, able to report whether the properties are free of rot, infestation or any other structural defects. No test was carried out on any of the services. Unless otherwise stated, we have not been able to carry out on-site measurements to verify the site and floor areas of the properties and we have assumed that the area shown on the documents handed to us are correct. For those properties which are under or held for future development, we have not carried out any soil investigations to determine the suitability of soil conditions and services for any future development. Moreover, we have not undertaken any environmental survey for the properties. Our valuations are prepared on the assumption that these aspects are satisfactory and that no extraordinary expenses or delays will be incurred during construction.

CURRENCY

Unless otherwise stated, all money amounts indicated herein our valuations are in Renminbi (RMB), official currency of the PRC.

We enclose herewith a summary of our valuations and our valuation certificates.

Yours faithfully,

for and on behalf of

DTZ Debenham Tie Leung Limited

Andrew K.F. Chan

Registered Professional Surveyor (GP) Registered China Real Estate Appraiser MSc., M.H.K.I.S., M.R.I.C.S. Senior Director

Note: Mr. Andrew K.F. Chan is a Registered Professional Surveyor who has over 25 years’ of experience in the valuation of properties in Hong Kong and the PRC.

– VI-4 –

VALUATION REPORT

APPENDIX VI

Summary of Valuations

			Capital value in
	Capital value in	Interest	existing state
	existing state	attributable	attributable to
	as at 31 July	to the	the Group as at
Property	2012	Group	31 July 2012
	(RMB)	(%)	(RMB)

Group I – Completed properties to be acquired by the Group for sale in the PRC

Unsold portions of Phase 1 of 1,474,000,000 25.5% 375,870,000 Greentown Shanghai Bund House, Nos. 1 and 2, Lane 566, South Zhongshan Road, Huangpu District, Shanghai, the PRC 中華人民共和國上海市黃浦區中山南路566 弄1、2號綠城 • 上海黃浦灣一期未售部分 2. Unsold portions of 292,000,000 42.5% 124,100,000 Phase 1 of Greentown Wuxi Yulan Garden situated at south of Gaolang Road, east of Lixin Avenue, Binhu District, Wuxi, Jiangsu Province, the PRC

中華人民共和國江蘇省無錫市濱湖區高浪路南側立信大道東側綠城 • 無錫玉蘭花園一期未售部分

– VI-5 –

APPENDIX VI

VALUATION REPORT

				Capital value in
		Capital value in	Interest	existing state
		existing state	attributable	attributable to
		as at 31 July	to the	the Group as at
	Property	2012	Group	31 July 2012
		(RMB)	(%)	(RMB)
3.	Unsold units of	488,000,000	50%	244,000,000
	Phases 3 and 4 of
	Greentown Shanghai
	Rose Garden,
	Lane 1555,
	Zhongqing Road,
	Minhang District,
	Shanghai,
	the PRC
	中華人民共和國上海市
	閔行區中青路1555 弄
	綠城• 上海玫瑰園
	三期及四期未售部分

	Sub-total of Group I:	2,254,000,000		743,970,000

– VI-6 –

VALUATION REPORT

APPENDIX VI

			Capital value in
	Capital value in	Interest	existing state
	existing state	attributable	attributable to
	as at 31 July	to the	the Group as at
Property	2012	Group	31 July 2012
	(RMB)	(%)	(RMB)

Group II – Properties to be acquired by the Group under development in the PRC

The under construction 2,362,000,000 50% 1,181,000,000 development of Greentown Shanghai Yulan Garden, north to Tanglong Road and west to Qi’ai Road, Tang Town, Pudong New Area, Shanghai, the PRC 中華人民共和國上海市浦東新區唐鎮西至齊愛路北至唐龍路綠城 • 上海玉蘭花園在建項目 5. The under construction 3,329,000,000 45.25% 1,506,372,500 development of Greentown Suzhou Majestic Mansion, No. 99 West Hualin Street, Suzhou Industrial Park, Suzhou, Jiangsu Province, the PRC

中華人民共和國江蘇省蘇州市蘇州工業園區西華林街99號綠城 • 蘇州御園在建項目

– VI-7 –

VALUATION REPORT

APPENDIX VI

				Capital value in
		Capital value in	Interest	existing state
		existing state	attributable	attributable to
		as at 31 July	to the	the Group as at
	Property	2012	Group	31 July 2012
		(RMB)	(%)	(RMB)
6.	The under construction	1,159,000,000	42.5%	492,575,000
	development of Phase 2 of
	Greentown Wuxi Yulan Garden
	situated at south of
	Gaolang Road,
	east of Lixin Avenue,
	Binhu District,
	Wuxi,
	Jiangsu Province,
	the PRC
	中華人民共和國
	江蘇省無錫市濱湖區
	高浪路南側立信大道東側
	綠城• 無錫玉蘭花園
	二期在建項目
7.	The under construction	463,000,000	19.5%	90,285,000
	development of Phase 1 of
	Greentown Wuxi Taihu Project
	west of Lixin Avenue and
	north of Guanshan Road,
	Binhu District,
	Wuxi,
	Jiangsu Province,
	the PRC

中華人民共和國江蘇省無錫市濱湖區立信大道西觀山路北綠城 • 無錫太湖項目一期在建項目

– VI-8 –

VALUATION REPORT

APPENDIX VI

				Capital value in
		Capital value in	Interest	existing state
		existing state	attributable	attributable to
		as at 31 July	to the	the Group as at
	Property	2012	Group	31 July 2012
		(RMB)	(%)	(RMB)
8.	The under construction	202,000,000	40%	80,800,000
	development of Phase 1 of
	Greentown Azure Coast,
	east of Binhe West Road,
	south of Wanshun North Road,
	north of Hengfu Road,
	Tanggu District,
	Tianjin,
	the PRC
	中華人民共和國
	天津市塘沽區
	濱河西路以東、
	萬順北道以南、
	橫福路以北
	綠城• 天津藍色海岸
	一期在建項目
9.	The under construction	1,908,000,000	50%	954,000,000
	development of Phases 5 to 7 of
	Greentown Shanghai
	Rose Garden,
	south to Yuanjiang Road and
	west to Shuguang Road,
	Maqiao Town,
	Minhang District,
	Shanghai,
	the PRC
	中華人民共和國
	上海市閔行區
	馬橋鎮南至元江路
	西至曙光路
	綠城• 上海玫瑰園
	五期至七期在建項目

	Sub-total of Group II:	9,423,000,000		4,305,032,500

– VI-9 –

VALUATION REPORT

APPENDIX VI

Capital value in Capital value in Interest existing state existing state attributable attributable to as at 31 July to the the Group as at Property 2012 Group 31 July 2012 (RMB) (%) (RMB)

Group III – Properties to be acquired by the Group for future development in the PRC

Development site for 5,142,000,000 25.5% 1,311,210,000 the proposed development known as Phases 2 to 4 of Greentown Shanghai Bund House, Qiu 1/1, 620 Jiefang, Dongjiadu, Huangpu District, Shanghai, the PRC

中華人民共和國上海市黃浦區董家渡街道620 街坊1/1丘綠城 • 上海黃浦灣二至四期待建項目土地

Development site for the proposed development known as Phases 5 and 6 of Greentown Shanghai Bund House, Qiu 1/1, east of Yuelai Street, south of East Fuxing Road, west of Doushi Street and north of Baidu Road, 631 and 632 Jiefang, Huangpu District, Shanghai, the PRC

415,000,000 25.5% 105,825,000

中華人民共和國上海市黃浦區悅來街東復興東路南豆市街西白渡路北 631、632街坊1/1丘綠城 • 上海黃浦灣五至六期待建項目土地

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APPENDIX VI

		Capital value in
Capital value in	Interest	existing state
existing state	attributable	attributable to
as at 31 July	to the	the Group as at
2012	Group	31 July 2012
(RMB)	(%)	(RMB)
3,631,000,000	33.33%	1,210,212,300

Property

Development site for 3,631,000,000 33.33% 1,210,212,300 the proposed development known as Greentown Suzhou Rose Garden, north of Dushu Lake, south of Gaohe Road, Suzhou Industrial Park, Suzhou, Jiangsu Province, the PRC 中華人民共和國江蘇省蘇州市蘇州工業園區獨墅湖北高和路南綠城 • 蘇州玫瑰園待建項目土地 13. Development site for 182,000,000 42.5% 77,350,000 the proposed development known as Phase 3 of Greentown Wuxi Yulan Garden situated at south of Gaolang Road, east of Lixin Avenue, Binhu District, Wuxi, Jiangsu Province, the PRC

中華人民共和國江蘇省無錫市濱湖區高浪路南側立信大道東側綠城 • 無錫玉蘭花園三期待建項目土地

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APPENDIX VI

Property

Development site for the proposed development known as Phases 2 and 3 of Greentown Wuxi Taihu Project, west of Lixin Avenue and north of Guanshan Road, Binhu District, Wuxi, Jiangsu Province, the PRC

		Capital value in
Capital value in	Interest	existing state
existing state	attributable	attributable to
as at 31 July	to the	the Group as at
2012	Group	31 July 2012
(RMB)	(%)	(RMB)
1,343,000,000	19.5%	261,885,000

中華人民共和國江蘇省無錫市濱湖區立信大道西觀山路北綠城 • 無錫太湖項目二及三期待建項目土地

Development site for the proposed development known as Phases 1 to 5 of Greentown Changzhou Yulan Square, situated at Lot A to E, West of Wuyi Road, Wujin District, Changzhou, Jiangsu Province, the PRC

970,000,000 18.5% 179,450,000

中華人民共和國江蘇省常州市武進區武宜路以西A至E地塊綠城 • 常州玉蘭廣場一至五期待建項目土地

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APPENDIX VI

Property 16. Development site for the proposed development known as Phase 2 of Greentown Tianjin Azure Coast, east of Binhe West Road, south of Wanshun North Road, north of Hengfu Road, Tanggu District, Tianjin, the PRC

		Capital value in
Capital value in	Interest	existing state
existing state	attributable	attributable to
as at 31 July	to the	the Group as at
2012	Group	31 July 2012
(RMB)	(%)	(RMB)
117,000,000	40%	46,800,000

中華人民共和國天津市塘沽區濱河西路以東萬順北道以南橫福路以北綠城 • 天津藍色海岸二期待建項目土地 Sub-total of Group III: 11,800,000,000 3,192,732,300 Grand-total of Group I to III: 23,477,000,000 8,241,734,800

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APPENDIX VI

VALUATION CERTIFICATE

Group I – Completed properties to be acquired by the Group for sale in the PRC

Capital value in Particulars of existing state as at Property Description and tenure occupancy 31 July 2012 1. Unsold portions of The property comprises the As at the date of RMB1,474,000,000 Phase 1 of unsold portions of high-rise valuation, the Greentown residential units and car parking property was vacant. (25.5% interest Shanghai Bund spaces in basement erected on a attributable to House, parcel of land with a total site the Group: Nos. 1 and 2, area of approximately 16,380 RMB375,870,000) Lane 566, sq.m. which is a portion of South Zhongshan whole land with a total site area Road, of approximately 47,050 sq.m. Huangpu District, and is known as Phase 1 of Shanghai, Greentown Shanghai Bund the PRC House. 中華人民共和國 Completed in 2012, the property 上海市黃浦區 comprises a total gross floor area 中山南路566弄 of 18,986.3 sq.m. for residential 1、2號 use and 233 unsold car parking 綠城 • 上海黃浦灣 spaces. 一期未售部分 The property is located on the west side of South Zhongshan Road, Huangpu District, which is in urban area of Shanghai. Developments nearby are mainly residential and commercial developments. The land use rights of the property have been granted for a term of 70 years due to expire on 30 August 2074 for residential use.

Notes:

(1) According to Shanghai Grant Contract of State-owned Land Use Rights No. (2004) 58 entered into between Shanghai Housing and Land Resources Bureau (the “Grantor”) and Shanghai Huazhe Bund Real Estate Co., Ltd. (上海華浙外灘置業有限公司) (the “Grantee”) on 31 August 2004, the land use rights of the property, comprising a total site area of approximately 47,050 sq.m. and a total gross floor area above ground of not more than 161,500 sq.m., have been granted to the grantee for terms of 70 years for residential use and 40 years for commercial use for a consideration of RMB44,410,000.
(2) According to Supplementary Agreement No. (2010) 4 of Shanghai Grant Contract of State-owned Land Use Rights No. (2004) 58 entered into between Shanghai Planning and Land Administration Bureau (“the Grantor”) and Shanghai Huazhe Bund Real Estate Co., Ltd. (上海華浙外灘置業有限公司) (“the Grantee”) on 10 August 2010, the Grantee had accepted a total gross floor area above ground of not more than 169,888.50 sq.m. with an additional land grant fee of RMB99,403,700.
(3) According to Certificate of Real Estate Ownership No. (2012) 001292 issued by Shanghai Housing and Land Resources Bureau on 29 May 2012, the title ownership of the property, comprising a total site area of 41,807 sq.m. and a total gross floor area of 55,906.42 sq.m., have been vested in Shanghai Huazhe Bund Real Estate Co., Ltd. (上海華浙外灘置業有限公司) for a term of 70 years for residential use due to expire on 30 August 2074.

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APPENDIX VI

(4) According to Planning Permit for Construction Use of Land No. (2004) 0144 issued by Shanghai Planning Bureau on 16 August 2004, the construction site of a parcel of land with an area of 63,360 sq. m., is in compliance with the requirements of urban planning.
(5) According to two Planning Permits for Construction Works, the construction works of the property, with a total gross floor area of 79,067.79 sq.m., is in compliance with the construction works requirements and have been approved with details as follows:

				Above	Under
				Ground	Ground	Total
				Floor	Floor	Floor
Certificate No.		Date of issue	Building	Area	Area	Area
				(sq.m.)	(sq.m.)	(sq.m.)
(2007)	5	September 2007	Block Nos. 1 and	54,812.45	3,138.60	57,951.05
01070906F02510			2 of Bund House
(2008)	24 December 2007		Basement Carpark	0.00	21,116.74	21,116.74
01080110F00103			of Phase 1 of
			Bund House

Total:				54,812.45	24,255.34	79,067.79

(6) According to the Supplementary Notice of Planning Permit for Construction Works No. (2008) 24 issued by Shanghai Planning Bureau on 5 August 2008, the construction works of Block Nos. 1 and 2 of Bund House with a adjusted under ground gross floor area of 5,441.94 sq.m., is in compliance with the construction works requirements and have been approved.
(7) According to three Permits for Commencement of Construction Works No. 0510HP0009D01 310101200503100419 to 0510HP0009D03 310101200503100419 all issued by Shanghai Construction Committee during the period between 15 June 2007 and 17 January 2008, the property with a total gross floor area of 79,067 sq.m., is in compliance with the requirements for works commencement and have been permitted.
(8) According to two Commodity Housing Pre-sale Permits Nos. (2009) 00000559 and (2010) 0000013 issued by Shanghai Housing and Land Resources Bureau between 7 August 2009 and 26 January 2010, the property with a total gross floor area of 76,453.64 sq.m., are permitted for pre-sale.
(9) According to Completion and Acceptance Certificate of Construction Works No. 2012HP0059 dated 25 April 2012, Old Area Rebuilt Project of Lot 11#, Dongjiadu Area with a total gross floor area of approximately 57,659 sq.m., was completed.
(10) As advised by the Group, a portion of the property with a gross floor area of approximately 4,190.88 sq.m. are subject to various Agreements for Sale and Purchase for a total consideration of RMB284,773,283. The total consideration aforesaid in respect of this portion of the property is reflected and included in our valuation shown above.
(11) According to Business License No. 310101000387233 dated 18 April 2012, Shanghai Huazhe Bund Real Estate Co., Ltd. (上海華浙外灘置業有限公司) was established on 26 September 2002 as a limited company with a registered capital of RMB50,000,000 for a valid operation period from 26 September 2002 to 30 September 2028.
(12) We have been provided with a legal opinion on the title to the property issued by the Group’s PRC legal adviser, which contains, inter-alias, the following information:
(i) The Certificate of Real Estate Ownership of the property is valid, legal and enforceable under the PRC laws;
(ii) Shanghai Huazhe Bund Real Estate Co., Ltd. (上海華浙外灘置業有限公司) is the sole legal land user of the property and has obtained the relevant certificates and approval from the government in respect of the construction of the property;

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APPENDIX VI

(iii) Shanghai Huazhe Bund Real Estate Co., Ltd. (上海華浙外灘置業有限公司) has the right to freely lease, transfer, mortgage and dispose of the land use rights and building ownership of the property provided that where any of the property has been mortgaged, the Group has to discharge the mortgage or obtain the mortgagee’s consent in advance;
(iv) For the property which have been contracted to be sold but the formal assignment procedures have not yet been completed, Shanghai Huazhe Bund Real Estate Co., Ltd. (上海華浙外灘置業有限公司) is required to deliver property ownerships to the corresponding purchasers upon compliance with all clauses stated in the agreements. Prior to registering the transfer of the property ownerships in the relevant government departments, the property ownerships are still vested in Shanghai Huazhe Bund Real Estate Co., Ltd. (上海華浙外灘置業有限公司). However, Shanghai Huazhe Bund Real Estate Co., Ltd. (上海華浙外灘置業有限公司) has no right to transfer, lease, mortgage or dispose of the property without prior approval from the corresponding purchasers or withdrawal of the said agreements;
(v) The property is mortgaged to 中國信達資產管理股份有限公司 (China Cinda Asset Management Co., Ltd.) for a debt of RMB500,000,000 during the period between 26 April 2012 and 25 April 2014; and
(vi) All land premium stated in the Grant Contract of State-owned Land Use Rights have been paid and settled.
(13) The status of title and grant of major approvals and licences in accordance with the information provided by the Group are as follows:

Shanghai Grant Contract of State-owned Land Use Rights	Yes
Supplementary Agreement of Shanghai Grant Contract of State-owned Land Use Rights	Yes
Certificate of Real Estate Ownership	Yes
Planning Permit for Construction Use of Land	Yes
Planning Permits for Construction Works	Yes
Supplementary Notice of Planning Permit for Construction Works	Yes
Permits for Commencement of Construction	Yes
Commodity Housing Pre-sale Permits	Yes
Completion and Acceptance Certificate of Construction Works	Yes
Business License	Yes

– VI-16 –

VALUATION REPORT

APPENDIX VI

VALUATION CERTIFICATE

Property Description and tenure
1. Unsold portions of The property comprises the Phase 1 of unsold portions of high-rise Greentown Wuxi residential units and car parking Yulan Garden spaces in basement erected on a situated at south of parcel of land with a total site Gaolang Road, area of approximately 49,672.30 east of Lixin Avenue. sq.m. which is a portion of Binhu District, whole land with a total site area Wuxi, of approximately 180,826.20 Jiangsu Province, sq.m. and is known as Phase 1 of the PRC Greentown Wuxi Yulan Garden. 中華人民共和國 Completed in 2011, the property 江蘇省無錫市 comprises a total gross floor area 濱湖區 of 22,809.31 sq.m. for residential 高浪路南側 use and 28,000.00 sq.m. for car 立信大道東側 park use. 綠城 • 無錫玉蘭花園一期未售部分 The property is located on the east side of Lixin Avenue, Binhu District, which is in urban area of Wuxi. Developments nearby are mainly residential and commercial developments.

Capital value in Particulars of existing state as at occupancy 31 July 2012 As at the date of RMB292,000,000 valuation, the property was vacant. (42.5% interest attributable to the Group: RMB124,100,000)

The land use rights of the property have been granted for terms due to expire on 31 January 2078 and 31 January 2048 for residential and commercial uses respectively.

Notes:

(1) According to State-owned Land Use Rights Certificate No. (2008) 14 issued by Wuxi Municipal Government on 3 February 2008, the land use rights of the property, comprising a total site area of approximately 49,672.30 sq.m. have been vested in Wuxi Greentown Real Estate Development Co., Ltd. for terms due to expire on 31 January 2078 and 31 January 2048 for residential and commercial uses respectively.
(2) According to Grant Contract of State-owned Land Use Rights No. (2007) 41, entered into between State-owned Land Administrative Bureau of Wuxi (the “Grantor”) and 無錫市太湖新城建設投資管理有限公司 (Wuxi Taihu New City Construction and Investment Co. Ltd.) (being a PRC state-owned enterprise) (the “Grantee”) on 6 September 2007, the Grantor has granted the land use rights of Land No. A (the property) and 2 parcels of land, namely Land No. B and Land No. C to the Grantee with the particulars as follow:

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VALUATION REPORT

APPENDIX VI

(iv) Land use term: 40 years for commercial uses; 50 years for office uses; and 70 years for residential uses

(v) Plot Ratio: 2.2 for Land No. A 4.2 for Land No. B 1.2 for Land No. C

As advised by the Group, Lands B and C are not included in this valuation as they do not belong to Wuxi Greentown Real Estate Development Co., Ltd. and therefore they are irrelevant.

(3) According to Supplementary Agreement of Grant Contract of State-owned Land Use Rights No. (2007) 41 entered into between State-owned Land Administrative Bureau of Wuxi, 無錫市太湖新城建設投資管理有限公司 (Wuxi Taihu New City Construction and Investment Co. Ltd.) and Wuxi Greentown Real Estate Development Co., Ltd. on 15 January 2008, the land use rights of the property namely Land No. A, having a site area of approximately 180,826.20 sq.m. as stated in the Grant Contract of State-owned Land Use Rights No. (2007) 41 has been transferred from Wuxi Taihu New City Construction and Investment Co. Ltd. to Wuxi Greentown Real Estate Development Co., Ltd.
(4) According to Planning Permit for Construction Use of Land No. 3202112008B0003 issued by Urban Planning Bureau of Wuxi on 3 February 2008, the property which is a portion of the construction site of a parcel of land with an area of 180,826.20 sq.m., is in compliance with the requirements of urban planning.
(5) According to Planning Permit for Construction Works No. F-3202112011B0067 dated 12 December 2011, the construction works of the property, with a total gross floor area of 187,558 sq.m., is in compliance with the construction works requirements and have been approved.
(6) According to 通過竣工綜合驗收備案的通知 (Notice for the Completion and Acceptance of Construction Works) No. (2011) 76 issued by Wuxi Construction Committee on 29 December 2011, the property with a total gross floor area of approximately 187,558.00 sq.m., were completed.
(7) As advised by the Group, a portion of the property with a gross floor area of approximately 13,991.31 sq.m. are subject to various Agreements for Sale and Purchase for a total consideration of RMB130,122,914. The total consideration aforesaid in respect of this portion of the property is reflected and included in our valuation shown above.
(8) According to Business License No. 320211000013326 dated 21 May 2010, Wuxi Greentown Real Estate Development Co., Ltd. (無錫綠城房地產開發有限公司) was established on 7 December 2007 as a limited company with a registered capital of RMB102,000,000 for a valid operation period from 07 December 2007 to 06 December 2027.
(9) We have been provided with a legal opinion on the title to the property issued by the Group’s PRC legal adviser, which contains, inter-alias, the following information:
(i) State-owned Land Use Rights Certificates of the property is valid, legal and enforceable under the PRC laws;
(ii) Wuxi Greentown Real Estate Development Co., Ltd. (無錫綠城房地產開發有限公司) is the sole legal land user of the property and has obtained the relevant certificates and approval from the government in respect of the construction of the property;
(iii) Wuxi Greentown Real Estate Development Co., Ltd. (無錫綠城房地產開發有限公司) has the right to freely lease, transfer, mortgage and dispose of the land use rights and building ownership of the property provided that where any of the property has been mortgaged, the Group has to discharge the mortgage or obtain the mortgagee’s consent in advance;

– VI-18 –

VALUATION REPORT

APPENDIX VI

(iv) For the property which have been contracted to be sold but the formal assignment procedures have not yet been completed, Wuxi Greentown Real Estate Development Co., Ltd. (無錫綠城房地產開發有限公司) is required to deliver property ownerships to the corresponding purchasers upon compliance with all clauses stated in the agreements. Prior to registering the transfer of the property ownerships in the relevant government departments, the property ownerships are still vested in Wuxi Greentown Real Estate Development Co., Ltd. (無錫綠城房地產開發有限公司). However, Wuxi Greentown Real Estate Development Co., Ltd. (無錫綠城房地產開發有限公司) has no right to transfer, lease, mortgage or dispose of the property without prior approval from the corresponding purchasers or withdrawal of the said agreements; and
(v) All land premium stated in the Grant Contract of State-owned Land Use Rights have been paid and settled.
(10) In accordance with the information provided by the Group, the status of title and grant of major approvals and licenses are as follows:

State-owned Land Use Rights Certificate	Yes
Grant Contract of State-owned Land Use Rights	Yes
Supplementary Agreement of Grant Contract of State-owned Land Use Rights	Yes
Planning Permit for Construction Use of Land	Yes
Planning Permit for Construction Works	Yes
Record for the Completion and Acceptance of Construction Works	Yes
Business License	Yes

– VI-19 –

VALUATION REPORT

APPENDIX VI

VALUATION CERTIFICATE

Property Description and tenure

Unsold units of The property comprises the Phases 3 and 4 of unsold portions of villas erected Greentown on a parcel of land with a total Shanghai Rose site area of approximately Garden, 160,817 sq.m. which is a portion Lane 1555, of whole land with a total site Zhongqing Road, area of approximately 803,351.9 Minhang District, sq.m. and is known as Phase 3 Shanghai, and 4 of Greentown Shanghai the PRC Rose Garden. 中華人民共和國 Completed between 2011 and 上海市閔行區 2012, the property comprises a 中青路1555 弄 total gross floor area of 8,022.5 綠城 • 上海玫瑰園 sq.m. for residential use. 三期及四期未售部分

Capital value in Particulars of existing state as at occupancy 31 July 2012 As at the date of RMB488,000,000 valuation, the property was vacant. (50% interest attributable to the Group: RMB244,000,000)

The property is located at Zhongqing Road, Maqiao Town, Minhang District, which is in suburban area of Shanghai. Development nearby is mainly residential development.

The land use rights of the property have been granted for a term of 70 years due to expire on 27 February 2075 for residential use.

Notes:

(1) According to Grant Contracts of State-owned Land Use Rights Nos. (2003) 64, (2006) 31, (2006) 29, (2006) 30, (2006) 32 and (2006) 33 dated between 22 April 2003 and 28 February 2006, 上海市閔行區房屋土地管理局 (Bureau of Housing and Land Management of Minhang District) has granted the land use rights of the property comprising a total site area of 803,351.9 sq.m. to Shanghai Greentown Woods Golf Villas Development Co., Ltd. (上海綠城森林高爾夫別墅開發有限公司).

– VI-20 –

VALUATION REPORT

APPENDIX VI

(2) According to five Shanghai Certificates of Real Estate Ownership, the land use rights of the land, comprising a total site area of approximately 797,783 sq.m., have been vested in Shanghai Greentown Woods Golf Villas Development Co., Ltd. (上海綠城森林高爾夫別墅開發有限公司) with details as follows:

			Expiry date of
Certificate No.	Date of issue	Location	Land use term	Site Area
				(sq.m.)
(2006) 045226	2 September 2006	1/5 Qiu, 380 Street,	29 June 2073	317,438
		Maqiao Town
(2008) 043042	17 October 2008	10/13 Qiu, 380 Street,	27 February 2076	116,885
		Maqiao Town
(2008) 043044	17 October 2008	10/14 Qiu, 380 Street,	27 February 2076	141,209
		Maqiao Town
(2008) 043041	17 October 2008	10/16 Qiu, 380 Street,	27 February 2076	105,797
		Maqiao Town
(2008) 043043	17 October 2008	10/15 Qiu, 380 Street,	27 February 2076	116,454
		Maqiao Town
			Total:	797,783

(3) According to 上海市新建住宅交付使用許可證 (Shanghai Residential Delivery Certificates) Nos. (2011) 051-1, (2011) 051-2 and (2012) 015 issued by Municipal Housing Security and Management Bureau, the with a total gross floor area of approximately 25,133.47 sq.m. has been completed.
(4) As advised by the Group, a portion of the property with a gross floor area of approximately 5,924.82 sq.m. are subject to various Agreements for Sale and Purchase for a total consideration of RMB360,831,265.6. The total consideration aforesaid in respect of this portion of the property is reflected and included in our valuation shown above.
(5) According to Business License No. 310112000362795 dated 13 April 2012, Shanghai Greentown Woods Golf Villas Development Co., Ltd. (上海綠城森林高爾夫別墅開發有限公司) was established on 19 June 2002 as a limited company with a registered capital of RMB196,080,000 for a valid operation period from 19 June 2002 to 18 June 2022.
(6) We have been provided with a legal opinion on the title to the property issued by the Group’s PRC legal adviser, which contains, inter-alias, the following information:
(i) The State-owned Land Use Rights Certificates of the property are valid, legal and enforceable under the PRC laws;
(ii) Shanghai Greentown Woods Golf Villas Development Co., Ltd. (上海綠城森林高爾夫別墅開發有限公司) is in possession of a proper legal title to the property and is entitled to transfer the property with the residual term of land use rights at no extra land premium or other onerous payment payable to the government;
(iii) All land premium, costs of public utilities, ancillary infrastructure fees and compensation to and resettlement of any original residents to make way for the proposed development have been fully settled; and
(iv) The proposed design and construction of the property have been approved by the relevant government departments.

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VALUATION REPORT

APPENDIX VI

(7) The status of title and grant of major approvals and licences in accordance with the information provided by the Group are as follows:

Grant Contracts of State-owned Land Use Rights Yes Certificates of Real Estate Ownership Yes Shanghai Residential Delivery Certificates Yes Business License Yes

– VI-22 –

VALUATION REPORT

APPENDIX VI

VALUATION CERTIFICATE

Group II – Properties to be acquired by the Group under development in the PRC

Property

Description and tenure

Capital value in Particulars of existing state as at occupancy 31 July 2012

The under Greentown Shanghai Yulan construction Garden is designed as a development of residential development and is Greentown Shanghai developed on a parcel of land Yulan Garden, with a site area of approximately north to 58,163.00 sq.m. in one phase. Tanglong Road and Upon full completion, the west to Qi’ai Road, proposed development will Tang Town, comprise apartments and car Pudong New Area, parking spaces in basement. Shanghai, the PRC The property is under construction and is scheduled to 中華人民共和國 be completed in 2013 and has the 上海市浦東新區唐鎮 planned gross floor areas as 西至齊愛路 follows: 北至唐龍路綠城 • 上海玉蘭花園 Approximate 在建項目 Planned Planned Gross Portion Floor Area (sq.m.) Apartments 89,320.85 Basements 45,170.31 Total: 134,491.16

RMB2,362,000,000

As at the date of RMB2,362,000,000 valuation, the property was under (50% interest construction. attributable to the Group: RMB1,181,000,000)

The property is located at the junction of Tanglong Road and Qi’ai Road, Tangzhen Town, Pudong New Area, which is in suburban area of Shanghai. Development nearby is mainly residential development.

The land use rights of the property have been granted for a term of 70 years due to expire on 30 January 2080 for residential use.

– VI-23 –

VALUATION REPORT

APPENDIX VI

Notes:

(1) According to Shanghai Grant Contract of State-owned Land Use Rights No. (2010) 1 entered into between Shanghai Housing and Land Resources Bureau (the “Grantor”) and Shanghai Lvshun Real Estate Group Co., Ltd. (上海綠順房地產集團有限公司) (the “Grantee”) on 27 January 2010, the land use rights of the property, having a total site area of approximately 58,163 sq.m. and a total gross floor area above ground of 87,244.50 sq.m., has been granted to the grantee for a term of 70 years for residential use for a consideration of RMB1,661,110,000.
(2) According to Supplementary Agreement No. (2010) 24 of Shanghai Grant Contract for State-owned Land Use Rights No. (2010) 1 entered into between Shanghai Housing and Land Resources Bureau (the “Grantor”), Shanghai Lvshun Real Estate Group Co., Ltd. (上海綠順房地產集團有限公司) and Shanghai Lvshun Real Estate Development Co., Ltd. (上海綠順房地產開發有限公司) on 13 April 2010, the land use rights of the property has been transferred from Shanghai Lvshun Real Estate Group Co., Ltd. (上海綠順房地產集團有限公司) to Shanghai Lvshun Real Estate Development Co., Ltd. (上海綠順房地產開發有限公司).
(3) According to two Certificates of Real Estate Ownership Nos. (2010) 032237 and (2010) 032234 issued by Shanghai Housing and Land Resources Bureau both dated 29 April 2010, the title ownership of the property, comprising a total site area of 58,163 sq.m., have been vested in Shanghai Lvshun Real Estate Development Co., Ltd. for a term of 70 years for residential use due to expire on 31 January 2080.
(4) According to Planning Permit for Construction Use of Land No. (2010) EA31011520109069 issued by Shanghai Planning Bureau on 27 April 2010, the construction site of a parcel of land with an area of 58,163 sq.m. is in compliance with the requirements of urban planning.
(5) According to two Planning Permits for Construction Works Nos. (2010) FA31011520109149 and (2010) FA31011520109269 all issued by Shanghai Planning Bureau between the period of 14 July 2010 and 1 November 2010, the construction works of the property, with a total gross floor area of 134,491.16 sq. m., are in compliance with the construction works requirements and have been approved.
(6) According to Permit for Commencement of Construction Works Nos. 1002PD0036 D01 310115201003313919 issued by Shanghai Construction Committee on 1 November 2010, the construction works of the property with a total gross floor area of 129,380 sq.m., are in compliance with the requirements for works commencement and have been permitted.
(7) According to five Commodity Housing Pre-sale Permits Nos. (2011) 0000473, (2012) 0000105, (2011) 0000472, (2011) 0000190 and (2011) 0000474 all issued by Shanghai Housing and Land Resources Bureau, the property, with a total gross floor area of 95,187.08 sq.m., has been permitted to be pre-sale.
(8) As advised by the Group, the total expended construction cost for the property as at the date of valuation was RMB499,572,900 whilst the outstanding cost for completion of the property as at the date of valuation was RMB794,887,000. We have taken into account such amounts in our valuation.
(9) As advised by the Group, a portion of the property with a gross floor area of approximately 24,878.85 sq.m. are subject to various Agreements for Sale and Purchase for a total consideration of RMB1,083,640,000. The total consideration aforesaid in respect of this portion of the property is reflected and included in our valuation shown above.
(10) The capital value when completed of the proposed development as at 31 July 2012 was approximately RMB4,092,000,000.
(11) According to Business License No. 310115001197087 dated 23 March 2010, Shanghai Lvshun Real Estate Development Co., Ltd. (上海綠順房地產開發有限公司) was established on 29 January 2010 as a limited company with a registered capital of RMB1,000,000,000 for a valid operation period from 29 January 2010 to 28 January 2020.
(12) We have been provided with a legal opinion on the title to the property issued by the Group’s PRC legal adviser, which contains, inter-alias, the following information:
(i) State-owned Land Use Rights Certificates of the property is valid, legal and enforceable under the PRC laws;

– VI-24 –

VALUATION REPORT

APPENDIX VI

(ii) For the property which have been contracted to be sold but the formal assignment procedures have not yet been completed, Shanghai Lvshun Real Estate Development Co., Ltd. (上海綠順房地產開發有限公司) is required to deliver property ownerships to the corresponding purchasers upon compliance with all clauses stated in the agreements. Prior to registering the transfer of the property ownerships in the relevant government departments, the property ownerships are still vested in Shanghai Lvshun Real Estate Development Co., Ltd. (上海綠順房地產開發有限公司). However, Shanghai Lvshun Real Estate Development Co., Ltd. (上海綠順房地產開發有限公司) has no right to transfer, lease, mortgage or dispose of the property without prior approval from the corresponding purchasers or withdrawal of the said agreements;
(iii) All land premium stated in the Contracts for Grant of Stated-owned Land Use Rights have been paid and settled;
(iv) The proposed design and construction of the property have been approved by the relevant government departments;
(v) A portion of the property is mortgaged to 中國建設銀行股份有限公司浦東分行 (Pudong Branch of China Construction Bank Corporation) with the security term from 16 December 2010 to 15 December 2013; and
(vi) Shanghai Lvshun Real Estate Development Co., Ltd. (上海綠順房地產開發有限公司) has the right to freely lease, transfer, mortgage and dispose of the land use rights and building ownership of the property provided that where any of the property has been mortgaged, the Group has to discharge the mortgage or obtain the mortgagee’s consent in advance.
(13) The status of title and grant of major approvals and licences in accordance with the information provided by the Group are as follows:

Shanghai Grant Contract of State-owned Land Use Rights	Yes
Supplementary Agreement of Shanghai Grant Contract for State-owned Land Use Rights	Yes
Certificates of Real Estate Ownership	Yes
Planning Permit for Construction Use of Land	Yes
Planning Permits for Construction Works	Yes
Permit for Commencement of Construction Works	Yes
Commodity Housing Pre-sale Permits	Yes
Business License	Yes

– VI-25 –

VALUATION REPORT

APPENDIX VI

VALUATION CERTIFICATE

Description and tenure

Property

The under Greentown Suzhou Majestic construction Mansion is designed as a development of residential development and is Greentown Suzhou developed on a parcel of land Majestic Mansion, with a site area of approximately No. 99 West 155,644.07 sq.m. in two phases. Hualin Street, Upon full completion, the Suzhou proposed development will Industrial Park, comprise 128 detached villas, 192 Suzhou, apartments and car parking spaces Jiangsu Province, in basement. the PRC

The property is under 中華人民共和國 construction and is scheduled to 江蘇省蘇州市 be completed in 2014 and has the 蘇州工業園區 planned gross floor areas as 西華林街99號 follows: 綠城 • 蘇州御園在建項目 Approximate

	Approximate
Planned	Planned Gross
Portion	Floor Area
	(sq.m.)
Villas	99,477.78
Apartments	80,965.71
Clubhouse	3,074.00
Basement Car
Parking Spaces	25,923.82
Total:	209,441.31

Capital value in Particulars of existing state as at occupancy 31 July 2012 As at the date of RMB3,329,000,000 valuation, the property was under (45.25% interest construction. attributable to the Group: RMB1,506,372,500)

The property is located at Zonger Road, Industrial Park, which is in new development area of Suzhou. Developments nearby are mainly residential and commercial developments.

The land use rights of the property have been granted for terms due to expire on 11 January 2080 and 11 January 2050 for residential use and commercial and services uses respectively.

– VI-26 –

VALUATION REPORT

APPENDIX VI

Notes:

(1) According to State-owned Land Use Rights Certificate No. (2011) 00007 dated 17 January 2011, the land use rights of the property, comprising a total site area of approximately 155,664.07 sq.m. had been vested to Suzhou Greentown Yuyuan Real Estate Development Co., Ltd. (蘇州綠城御園房地產開發有限公司) for terms due to expire on 11 January 2080 and 11 January 2050 for residential use and commercial and services uses respectively.
(2) According to Grant Contract of State-owned Land Use Rights No. 3205032009CR0061 entered into between Land and Real Estate Bureau of Suzhou Industry District (the “Grantor”) and Greentown Real Estate Group Co., Ltd. (綠城房地產集團有限公司) (the “Grantee”) on 22 September 2009, the land use rights of the property, having a total site area of approximately 155,664.07 sq.m., has been granted to the grantee for a consideration of RMB2,500,000,000.
(3) According to Supplementary Agreement of Grant Contract for State-owned Land Use Rights No. 3205032009CR0061 entered into between Land and Real Estate Bureau of Suzhou Industry Area (the “Grantor”), Greentown Real Estate Group Co., Ltd. (綠城房地產集團有限公司) and Suzhou Greentown Yuyuan Real Estate Development Co., Ltd. (蘇州綠城御園房地產開發有限公司) on 8 January 2010, the land use rights of the property has been transferred from Greentown Real Estate Group Co., Ltd. (綠城房地產集團有限公司) to Suzhou Greentown Yuyuan Real Estate Development Co., Ltd. (蘇州綠城御園房地產開發有限公司).
(4) According to Planning Permit for Construction Use of Land No. B20090009-01 issued by Suzhou Urban Planning Bureau on 22 February 2010, the construction site of a parcel of land with an area of 155,660 sq.m. is in compliance with the requirements of urban planning.
(5) According to three Planning Permits for Construction Works No. 20101393, No. 20103116 and No. 20112390 all issued by Suzhou Urban Planning Bureau between the period of 12 June 2010 and 15 November 2011, the construction works of the property, with a total gross floor area of 505,571.3 sq.m., are in compliance with the construction works requirements and have been approved.
(6) According to two Permits for Commencement of Construction Works Nos. 320594201006180101 and No. 320594201106220101 all issued by Suzhou Construction Bureau between the period of 18 June 2010 and 22 June 2011, the construction work of the property with a total gross floor area of approximately 209,441.31 sq.m., are in compliance with the requirements for works commencement and have been permitted.
(7) According to three Pre-sale Permits for Commodity Housing Nos. Sufang Yuyuan (2011) 039, Xu Sufang Yuyuan (2011) 039 and (2012) 071 all issued by Suzhou Housing and Construction Bureau, the property, with a total gross floor area of 124,489.23 sq.m., has been permitted to be pre-sale.
(8) As advised by the Group, a portion of the property with a gross floor area of approximately 18,243.52 sq.m. are subject to various Agreements for Sale and Purchase for a total consideration of RMB961,185,840. The total consideration aforesaid in respect of this portion of the property is reflected and included in our valuation shown above.
(9) As advised by the Group, the total expended construction cost for the property as at the date of valuation was RMB656,812,000 whilst the outstanding cost for completion of the property as at the date of valuation was RMB973,308,000. We have taken into account such amounts in our valuation.
(10) The capital value when completed of the proposed development as at 31 July 2012 was approximately RMB5,788,000,000.
(11) According to Business License No. 320594000150433, Suzhou Greentown Yuyuan Real Estate Development Co., Ltd. (蘇州綠城御園房地產開發有限公司) was established on 22 December 2009 as a limited company with a registered capital of RMB250,000,000.

– VI-27 –

VALUATION REPORT

APPENDIX VI

(12) We have been provided with a legal opinion on the title to the property issued by the Group’s PRC legal adviser, which contains, inter-alias, the following information:
(i) State-owned Land Use Rights Certificate of the property is valid, legal and enforceable under the PRC laws;
(ii) For the property which have been contracted to be sold but the formal assignment procedures have not yet been completed, Suzhou Greentown Yuyuan Real Estate Development Co., Ltd. (蘇州綠城御園房地產開發有限公司) is required to deliver property ownerships to the corresponding purchasers upon compliance with all clauses stated in the agreements. Prior to registering the transfer of the property ownerships in the relevant government departments, the property ownerships are still vested in Suzhou Greentown Yuyuan Real Estate Development Co., Ltd. (蘇州綠城御園房地產開發有限公司). However, Suzhou Greentown Yuyuan Real Estate Development Co., Ltd. (蘇州綠城御園房地產開發有限公司) has no right to transfer, lease, mortgage or dispose of the property without prior approval from the corresponding purchasers or withdrawal of the said agreements;
(iii) All land premium stated in the Contracts for Grant of Stated-owned Land Use Rights have been paid and settled;
(iv) A portion of the property is mortgaged to 中國工商銀行股份有限公司蘇州工業園支行 (Suzhou Industry District Branch of Industrial and Commercial Bank of China Limited) with the security term from 30 January 2011 to 21 June 2013;
(v) A portion of the property is mortgaged to 中國銀行股份有限公司蘇州工業園支行 (Suzhou Industry District Branch of Bank of China Limited) with the security term from 30 January 2011 to 30 December 2012;
(vi) A portion of the property is mortgaged to 中國農業銀行股份有限公司蘇州工業園支行 (Suzhou Industry District Branch of Agricultural Bank of China Limited) with the security term from 30 January 2011 to 28 June 2013; and
(vii) Suzhou Greentown Yuyuan Real Estate Development Co., Ltd. (蘇州綠城御園房地產開發有限公司) has the right to freely lease, transfer, mortgage and dispose of the land use rights and building ownership of the property provided that where any of the property has been mortgaged, the Group has to discharge the mortgage or obtain the mortgagee’s consent in advance.
(13) The status of title and grant of major approvals and licenses in accordance with the information provided by the Group are as follows:

State-owned Land Use Rights Certificate	Yes
Grant Contract of State-owned Land Use Rights	Yes
Supplementary Agreement of Grant Contract for State-owned Land Use Rights	Yes
Planning Permit for Construction Use of Land	Yes
Planning Permits for Construction Works	Yes
Permits for Commencement of Construction Works	Yes
Pre-sale Permits for Commodity Housing	Yes
Business License	Yes

– VI-28 –

VALUATION REPORT

APPENDIX VI

VALUATION CERTIFICATE

Description and tenure

Property

The under Greentown Wuxi Yulan Garden is construction designed as a residential and development of commercial development and is Phase 2 of developed on a parcel of land Greentown Wuxi with a site area of approximately Yulan Garden 54,540.40 sq.m. which is a situated at south of portion of whole land with a Gaolang Road, total site area of approximately east of 180,826.20 sq.m.. Lixin Avenue, Binhu District, The property comprises Phase 2 Wuxi, of Greentown Wuxi Yulan Jiangsu Province, Garden which is under the PRC construction and comprises highrise apartments and car parking

中華人民共和國 spaces in basement. 江蘇省無錫市濱湖區 The property is scheduled to be 高浪路南側 completed in 2012. 立信大道東側綠城 • 無錫玉蘭花園 Upon completion, the property 二期在建項目 will comprise the following gross floor areas:

Capital value in Particulars of existing state as at occupancy 31 July 2012 As at the date of RMB1,159,000,000 valuation, the property was under (42.5% interest construction. attributable to the Group: RMB492,575,000)

	Approximate
	Gross Floor
Planned Use	Area
	(sq.m.)
High-rise
apartments	167,987.20
Ancillary	11,386.30
Basement car
parking spaces	76,739.00
Total:	256,112.50

The property is located at the east side of Lixin Avenue, Binhu District, which is in urban area of Wuxi. Developments nearby are mainly residential and commercial developments.

The land use rights of the property have been granted for terms due to expire on 31 January 2078 and 31 January 2048 for residential and commercial uses respectively.

– VI-29 –

VALUATION REPORT

APPENDIX VI

Notes:

(1) According to State-owned Land Use Rights Certificate No. (2008) 15 issued by Wuxi Municipal Government on 3 May 2011, the land use rights of the property, comprising a total site area of approximately 84,540.40 sq.m. have been vested in Wuxi Greentown Real Estate Development Co., Ltd. for terms due to expire on 31 January 2078 and 31 January 2048 for residential and commercial uses respectively.
(2) According to Grant Contract of State-owned Land Use Rights No. (2007) 41, entered into between State-owned Land Administrative Bureau of Wuxi (the “Grantor”) and 無錫市太湖新城建設投資管理有限公司 (Wuxi Taihu New City Construction and Investment Co. Ltd.) (being a PRC state-owned enterprise) (the “Grantee”), on 6 September 2007, the Grantor has granted the land use rights of Land No. A (the property) and 2 parcels of Land No. B and Land No. C to the Grantee with the particulars as follow:

(i) Location: Core District of Taihu New City (ii) Site area: 562,289.5 sq.m. (iii) Land use: Land No. A: Commercial and residential; Land No. B: Commercial, office, entertainment and culture; and Land No. C: Commercial and office (iv) Land use term: 40 years for commercial uses; 50 years for office uses; and 70 years for residential uses (v) Plot Ratio: 2.2 for Land No. A 4.2 for Land No. B 1.2 for Land No. C

As advised by the Group, Lands B and C are not included in this valuation as they do not belong to Wuxi Greentown Real Estate Development Co., Ltd. and therefore they are irrelevant.

(3) According to Supplementary Agreement of Grant Contract of State-owned Land Use Rights No. (2007) 41 entered into between State-owned Land Administrative Bureau of Wuxi, 無錫市太湖新城建設投資管理有限公司 (Wuxi Taihu New City Construction and Investment Co. Ltd.) and Wuxi Greentown Real Estate Development Co., Ltd. on 15 January 2008, the land use rights of the property namely Land No. A, having a site area of approximately 180,826.20 sq.m. as stated in the Grant Contract of State-owned Land Use Rights No. (2007) 41 has been transferred from Wuxi Taihu New City Construction and Investment Co. Ltd. to Wuxi Greentown Real Estate Development Co., Ltd..
(4) According to Planning Permit for Construction Use of Land No. 3202112008B0003 issued by Urban Planning Bureau of Wuxi on 3 February 2008, the property which is a portion of the construction site of a parcel of land with an area of 180,826.20 sq.m., is in compliance with the requirements of urban planning.
(5) According to Planning Permit for Construction Works No. F-3202112010B0012 dated 19 April 2010, the construction works of the property, with a total gross floor area of 256,113 sq.m., is in compliance with the construction works requirements and have been approved.
(6) According to two Permits for Commencement of Construction Works Nos. 3202112010043000001A and 3202112010043000002A issued by Wuxi Municipal Urban and Rural Construction Committee on 30 January 2010, the construction works of the property with a total gross floor area of 135,097 sq.m. and 121,016 sq.m. respectively, are in compliance with the requirements for works commencement and have been permitted.
(7) According to four Pre-sale Permits for Commodity Housing Nos. (2010) 151, (2010) 160, (2011) 065 and (2010) 148 all issued by Housing and Rural Construction Bureau of Wuxi between 13 October 2010 and 29 June 2011, the property with a total gross floor area of 134,530.13 sq.m. are permitted for pre-sale.

– VI-30 –

VALUATION REPORT

APPENDIX VI

(8) As advised by the Group, the total expended construction cost for the property as at the date of valuation was RMB518,350,000 whilst the outstanding cost for completion of the property as at the date of valuation was RMB696,730,000. We have taken into account such amounts in our valuation.
(9) The capital value when completed of the proposed development as at 31 July 2012 was approximately RMB2,247,000,000.
(10) As advised by the Group, a portion of the property with a gross floor area of approximately 4,970.30 sq.m. are subject to various Agreements for Sale and Purchase for a total consideration of RMB51,520,000. The total consideration aforesaid in respect of this portion of the property is reflected and included in our valuation shown above.
(11) According to Business License No. 320211000013326 dated 21 May 2010, Wuxi Greentown Real Estate Development Co., Ltd. (無錫綠城房地產開發有限公司) was established on 7 December 2007 as a limited company with a registered capital of RMB102,000,000 for a valid operation period from 07 December 2007 to 06 December 2027.
(12) We have been provided with a legal opinion on the title to the property issued by the Group’s PRC legal adviser, which contains, inter-alias, the following information:
(i) State-owned Land Use Rights Certificates of the property is valid, legal and enforceable under the PRC laws;
(ii) Wuxi Greentown Real Estate Development Co., Ltd. (無錫綠城房地產開發有限公司) is in possession of a proper legal title to the property and is entitled to transfer the property with the residual term of land use rights at no extra land premium or other onerous payment payable to the government;
(iii) All land premium stated in the Grant Contract of State-owned Land Use Rights have been paid and settled;
(iv) The proposed design and construction of the property have been approved by the relevant government departments;
(v) The property is mortgaged to 中國銀行股份有限公司無錫分行 (Wuxi Branch of Bank of China Limited) with the security term from 3 September 2010 to 30 June 2013; and
(vi) Other than the above mentioned mortgage, the property is free from seizing, mortgage, limitation of any other rights and third party rights.
(13) In accordance with the information provided by the Group, the status of title and grant of major approvals and licenses are as follows:

State-owned Land Use Rights Certificate	Yes
Grant Contract of State-owned Land Use Rights	Yes
Supplementary Agreement of Grant Contract for State-owned Land Use Rights	Yes
Planning Permit for Construction Use of Land	Yes
Planning Permits for Construction Works	Yes
Permits for Commencement of Construction Works	Yes
Pre-sale Permits for Commodity Housing	Yes
Business License	Yes

– VI-31 –

VALUATION REPORT

APPENDIX VI

VALUATION CERTIFICATE

Property Description and tenure

The under Greentown Wuxi Taihu Project is construction designed as a residential and development of commercial development and is Phase 1 of developed on a parcel of land Greentown Wuxi with a site area of approximately Taihu Project 43,452.80 sq.m. which is a west of portion of whole land with a total Lixin Avenue and site area of approximately north of 171,572.20 sq.m.. Guanshan Road, Binhu District, The property comprises Phase 1 Wuxi, of Greentown Wuxi Taihu Project Jiangsu Province, which is under construction and the PRC comprises high-rise apartments and car parking spaces in

中華人民共和國江蘇 basement. 省無錫市濱湖區 The property is scheduled to be 立信大道西 completed in 2014. 觀山路北綠城 • 無錫太湖項目 Upon completion, the property 一期在建項目 will comprise the following gross floor areas:

Capital value in Particulars of existing state as at occupancy 31 July 2012 As at the date of RMB463,000,000 valuation, the property was under (19.5% interest construction. attributable to the Group: RMB90,285,000)

		Approximate
Planned		Planned Gross
Portion		Floor Area
		(sq.m.)
Residential		123,721.00
Ancillary
facilities		14,397.00
Basement car
parking spaces		52,538.00
Total:		190,656.00

The property is located at Wuyi Road, Wujin District, which is in urban central area of Wujin District. Developments nearby are mainly residential and commercial developments.

The land use rights of the property have been granted for terms due to expire on 12 August 2049 for commercial use, due to expire on 12 August 2079 for residential use and due to expire on 12 August 2059 for other uses.

– VI-32 –

VALUATION REPORT

APPENDIX VI

Notes:

(1) According to State-owned Land Use Rights Certificate (2010) No. 017 dated 26 April 2010, the land use rights of the property, comprising a total site area of approximately 43,452.8 sq.m., has been vested in Wuxi Taihu Greentown Real Estate Co., Ltd. (無錫太湖綠城置業有限公司) for terms due to expire on 12 August 2049 for commercial use, due to expire on 12 August 2079 for residential use and due to expire on 12 August 2059 for other uses.
(2) According to Grant Contract of State-owned Land Use Rights No. 3202012009CR0025 entered into between the People’s Republic of China Wuxi Municipal Land Resources Bureau (the “Grantor”) and Wuxi Taihu Xincheng Jianshe Investment Co., Ltd. (無錫市太湖新城建設投資管理有限公司) (the “Grantee”) on 13 August 2009, the land use rights of the property has been granted to the Grantee with the particulars as follows:

Site Area : 171,572.20 sq.m. Land Use : Residential, commercial and other uses Land Use Term : 70 years for residential use, 40 years for commercial use and 50 years for other uses Total Gross Floor Area : 377,458.8 sq.m. Land Premium : RMB1,100,000,000

(3) According to Supplementary Agreement of Grant Contract of State-owned Land Use Rights No. (2007) 41 entered into between People’s Republic of China Wuxi Municipal Land Resources Bureau, Wuxi Taihu Xincheng Jianshe Investment Co., Ltd. (無錫市太湖新城建設投資管理有限公司) and Wuxi Taihu Greentown Real Estate Co., Ltd. (無錫太湖綠城置業有限公司) on 2 February 2010, the land use rights of the property, having a site area of approximately 171,572.20 sq.m. as stated in the Grant Contract of State-owned Land Use Rights No. 3202012009CR0025 has been transferred from Wuxi Taihu Xincheng Jianshe Investment Co., Ltd. (無錫市太湖新城建設投資管理有限公司) to Wuxi Taihu Greentown Real Estate Co., Ltd. (無錫太湖綠城置業有限公司).
(4) According to Planning Permit for Construction Use of Land No. 3202112010B0009 issued by Wuxi Planning Bureau on 19 April 2010, the construction site of a parcel of land with a site area of approximately 171,572.2 sq.m., is in compliance with the urban planning requirements and has been approved.
(5) According to Planning Permit for Construction Works No. F-3202112011B0039 issued by Wuxi Planning Bureau on 1 July 2011, the construction works with a total gross floor area of approximately 190,656 sq.m. is in compliance with the urban construction requirements and is approved.
(6) According to two Permits for Commencement of Construction Works Nos. 3202112011072200003A and 3202112011072200004A all issued by Wuxi Construction Bureau on 22 July 2011, the construction works with a total gross floor area of approximately 190,656 sq.m., are in compliance with the requirements for works commencement and have been permitted.
(7) As advised by the Group, the total expended construction cost for the property as at the date of valuation was RMB70,863,000 whilst the outstanding cost for completion of the property as at the date of valuation was RMB794,917,000. We have taken into account such amounts in our valuation.
(8) The capital value when completed of the proposed development as at 31 July 2012 was approximately RMB1,571,000,000.
(9) According to Business License No. 320211000201105120141N dated 12 May 2011, Wuxi Taihu Greentown Real Estate Co., Ltd. (無錫太湖綠城置業有限公司) was established on 25 January 2010 as a limited company with a registered capital of RMB300,000,000 for a valid operation period from 25 January 2010.

– VI-33 –

VALUATION REPORT

APPENDIX VI

(10) We have been provided with a legal opinion on the title to the property issued by the Group’s PRC legal adviser, which contains, inter-alias, the following information:
(i) Wuxi Taihu Greentown Real Estate Co., Ltd. (無錫太湖綠城置業有限公司) is in possession of a proper legal title to the property and is entitled to transfer the property with the residual term of land use rights at no extra land premium or other onerous payment payable to the government;
(ii) All land premium, costs of public utilities, ancillary infrastructure fees and compensation to and resettlement of any original residents to make way for the proposed development have been fully settled;
(iii) The proposed design and construction of the property have been approved by the relevant government departments; and
(iv) The property is mortgaged to 海爾集團財務有限責任公司 (Hai Er Group Co., Ltd.) with the security term from 30 August 2011 to 29 August 2014.
(11) The status of title and grant of major approvals and licenses in accordance with the information provided by the Group are as follows:

State-owned Land Use Rights Certificate	Yes
Grant Contract of State-owned Land Use Rights	Yes
Supplementary Agreement of Grant Contract for State-owned Land Use Rights	Yes
Planning Permit for Construction Use of Land	Yes
Planning Permits for Construction Works	Yes
Permits for Commencement of Construction Works	Yes
Business License	Yes

– VI-34 –

VALUATION REPORT

APPENDIX VI

VALUATION CERTIFICATE

Property Description and tenure

The under Greentown Azure Coast is construction designed as a composite development of development and is developed on Phase 1 of a parcel of land with a site area Greentown of approximately 9,237.60 sq.m. Azure Coast, which is a portion of whole land east of with a total site area of Binhe West Road, approximately 17,160.60 sq.m.. south of Wanshun North The property comprises Phase 1 Road, of Greentown Azure Coast which north of is under construction and Hengfu Road, comprises serviced apartments, Tanggu District, offices, retail properties and car Tianjin, parking spaces in basement. the PRC

The property is scheduled to be 中華人民共和國 completed in 2014. 天津市塘沽區濱河西路以東、 Upon completion, the property 萬順北道以南、 will comprise the following gross 橫福路以北 floor areas: 綠城 • 天津藍色海岸一期在建項目

		Approximate
		Gross Floor
Planned Use		Area
		(sq.m.)
Serviced
Apartments		24,120
Offices		33,144
Retail properties		20,804
Clubhouse		1,050
Ancillary facilities		4,020
Basement car
parking spaces		23,349
Total:		106,487

Particulars of occupancy

As at the date of valuation, the property was under construction.

Capital value in existing state as at 31 July 2012

RMB202,000,000

(40% interest attributable to the Group: RMB80,800,000)

The property is located at Binhe West Road, Tanggu District, which is in Binhai New Area of Tianjin. Developments nearby are mainly residential and office developments.

The land use rights of the property have been granted for a term of 40 years due to expire on 23 November 2049 for commercial use.

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Notes:

(1) According to Tianjin Grant Contract of State-owned Land Use Rights No. 2008026 entered into between Tianjin Housing and Land Resources Bureau Tanggu Branch (the “Grantor”) and Tianjin Yijun Investment Co., Ltd. (天津逸駿投資有限公司) (the “Grantee”) on 27 March 2008, the land use rights of the property, comprising a total site area of approximately 17,160.60 sq.m., have been granted to the grantee for a land use term of 40 years with details as follows:
Site Area : 17,160.60 sq.m. (including a site area of approximately 9,237.6 sq.m. for Land No. 1 and a site area of approximately 7,923.0 sq.m. for Land No. 2)
Land Use : Commercial and services uses (including office, hotel, commercial and services apartment)
Land Use Term : 70 years for residential use, 40 years for commercial use and 50 years for others use
Plot Ratio : Not more than 9 for Land No. 1 and not more than 10.5 for Land No. 2
Land Premium : RMB64,550,000
(2) According to Real Estate Title Certificate No. 107050901063 issued by Tianjin Housing and Land Resources Bureau on 23 December 2009, the land use right of the property, comprising a total site area of 9,237.60 sq.m., have been vested in Tianjin Yijun Investment Co., Ltd. (天津逸駿投資有限公司) for a term of 40 years due to expire on 23 November 2049 for commercial use.
(3) According to Planning Permit for Construction Use of Land No. (2008) 0038 issued by Tianjin Tanggu District Planning Bureau on 6 April 2008, the construction site of a parcel of land with site area of 17,160.60 sq.m., is in compliance with the urban planning requirements and has been approved.
(4) According to Planning Permit for Construction Works No. (2011) 0019 issued by Tianjin Binhai New Area Planning Bureau dated on 6 April 2011, the construction works of the property, with a total above ground gross floor area of 83,138 sq.m. above and a total below ground gross floor area of 23,349 sq.m., are in compliance with the construction works requirements and have been approved.
(5) According to Permit for Commencement of Construction Works No. 1210731201012016 issued by Tianjin Binhai New Area Construction Committee Tanggu Branch on 5 May 2011, the construction works of the property with a total gross floor area of 106,487 sq.m., are in compliance with the requirements for works commencement and have been permitted.
(6) As advised by the Group, the total expended construction cost for the property as at the date of valuation was RMB149,600,000 whilst the outstanding cost for completion of the property as at the date of valuation was RMB596,100,000. We have taken into account such amounts in our valuation.
(7) The capital value when completed of the proposed development as at 31 July 2012 was approximately RMB1,109,000,000.
(8) According to Business License No. 120107000018093 dated 13 January 2010, Tianjin Yijun Investment Co., Ltd. (天津逸駿投資有限公司) was established on 11 January 2008 as a limited company with a registered capital of RMB10,000,000 for a valid operation period from 11 January 2008 to 10 January 2028.
(9) We have been provided with a legal opinion on the title to the property issued by the Group’s PRC legal adviser, which contains, inter-alias, the following information:
(i) The Certificate of Real Estate Ownership of the property is valid, legal and enforceable under the PRC laws;
(ii) Tianjin Yijun Investment Co., Ltd. (天津逸駿投資有限公司) is in possession of a proper legal title to the property and is entitled to transfer the property with the residual term of land use rights at no extra land premium or other onerous payment payable to the government;

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APPENDIX VI

(iii) All land premium, costs of public utilities, ancillary infrastructure fees and compensation to and resettlement of any original residents to make way for the proposed development have been fully settled; and
(iv) The proposed design and construction of the property have been approved by the relevant government departments.
(10) The status of title and grant of major approvals and licenses in accordance with the information provided by the Group are as follows:

Tianjin Grant Contract of State-owned Land Use Rights Yes Real Estate Title Certificate Yes Planning Permit for Construction Use of Land Yes Planning Permit for Construction Works Yes Permit for Commencement of Construction Works Yes Business License Yes

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VALUATION CERTIFICATE

Description and tenure

Property

The under Greentown Shanghai Rose Garden construction is designed as a luxury villa development of development and is developed on Phases 5 to 7 of a parcel of land with a site area Greentown Shanghai of approximately 325,096.90 Rose Garden, sq.m. which is a portion of whole south to land with a total site area of Yuanjiang Road and approximately 803,351.90 sq.m.. west to Shuguang Road, The property comprises Phases 5 Maqiao Town, to 7 of Greentown Shanghai Rose Minhang District, Garden which is under Shanghai, construction and comprises the PRC detached villas.

Greentown Shanghai Rose Garden is designed as a luxury villa development and is developed on a parcel of land with a site area of approximately 325,096.90 sq.m. which is a portion of whole land with a total site area of approximately 803,351.90 sq.m..

Capital value in Particulars of existing state as at occupancy 31 July 2012 As at the date of RMB1,908,000,000 valuation, the property was under (50% interest construction. attributable to the Group: RMB954,000,000)

中華人民共和國 The property is scheduled to be 上海市閔行區 completed between 2012 and 馬橋鎮南至元江路 2015. 西至曙光路綠城 • 上海玫瑰園 Upon completion, the property 五期至七期在建項目 will comprise the following gross floor areas:

		Approximate
Planned		Planned Gross
Portion		Floor Area
		(sq.m.)
Detached	Villas	53,525.82
Basement		35,226.95

Total:		88,752.77

The property is located at Zhongqing Road, Maqiao Town, Minhang District, which is in suburban area of Shanghai. Development nearby is mainly residential development.

The land use rights of the property have been granted for a term of 70 years due to expire on 30 January 2080 for residential use.

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Notes:

(1) As at the date of valuation, the State-owned Land Use Rights Certificate of portion of the property with site area of 5,568.90 sq.m. has not been obtained yet. However, for referencing purpose, we have valued the property on the assumption that all of the valid State-owned Land Use Rights Certificates of the property have been issued to the property, all land premium, related fees for the grant of the certificate and costs necessary to render the site ready for immediate development have been fully settled. As advised by the Group, the Group is applying for the outstanding State-owned Land Use Rights Certificate. As advised by the Group’s PRC legal adviser, there should be no legal obstacle in obtaining such certificate.
(2) According to Grant Contracts of State-owned Land Use Rights No. (2003) 64, (2006) 31, (2006) 29, (2006) 30, (2006) 32 and (2006) 33 dated between 22 April 2003 and 28 February 2006, 上海市閔行區房屋土地管理局 (Bureau of Housing and Land Management of Minhang District) has granted the land use rights of the property comprising a total site area of 803,351.9 sq.m. to Shanghai Greentown Woods Golf Villas Development Co., Ltd. (上海綠城森林高爾夫別墅開發有限公司).
(3) According to five Shanghai Certificates of Real Estate Ownership, the land use rights of the land, comprising a total site area of approximately 797,783 sq.m., have been vested in Shanghai Greentown Woods Golf Villas Development Co., Ltd. (上海綠城森林高爾夫別墅開發有限公司) with details as follows:

			Expiry date of
Certificate No.	Date of issue	Location	Land use term	Site Area
				(sq.m.)
(2006) 045226	2 September 2006	1/5 Qiu, 380 Street,	29 June 2073	317,438
		Maqiao Town
(2008) 043042	17 October 2008	10/13 Qiu, 380 Street,	27 February 2076	116,885
		Maqiao Town
(2008) 043044	17 October 2008	10/14 Qiu, 380 Street,	27 February 2076	141,209
		Maqiao Town
(2008) 043041	17 October 2008	10/16 Qiu, 380 Street,	27 February 2076	105,797
		Maqiao Town
(2008) 043043	17 October 2008	10/15 Qiu, 380 Street,	27 February 2076	116,454
		Maqiao Town
			Total:	797,783

(4) According to four Planning Permits for Construction Use of Land Nos. (2006) 12060410E00598 to (2006) 12060410E00601 all issued by Shanghai Minhang Planning Bureau dated on 10 April 2006, a total land area of 552,357 sq.m. has been approved to develop Greentown Rose Garden by Shanghai Greentown Woods Golf Villas Development Co., Ltd.

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APPENDIX VI

(5) According to five Planning Permits for Construction Works issued by Shanghai Minhang Planning Bureau, the construction works of portion of the property, with a gross floor area of 93,270 sq.m., are in compliance with the construction requirements and have been approved with details as follow:

				Gross Floor
Certificate No.	Date of issue	Location		Area
				(sq.m.)
(2009) FA31011220090034	6 January 2009	West of Yuanjiang Road	and	5,083
		East of Shuguang Road
(2009) FA31011220090036	6 January 2009	West of Yuanjiang Road	and	11,235
		East of Shuguang Road
(2009) FA31011220090035	6 January 2009	West of Yuanjiang Road	and	37,099
		East of Shuguang Road
(2010) FA31011220101194	29 June 2010	West of Yuanjiang Road	and	25,079
		East of Shuguang Road
(2010) FA31011220101183	25 June 2010	West of Yuanjiang Road	and	14,774
		East of Shuguang Road
			Total:	93,270

(6) According to 3 Permits for Commencement of Construction Works issued by Shanghai Minhang Construction Committee, the construction works of Greentown Rose Garden have been approved with a total gross floor area of 88,851 sq.m. with details as follow:

		Commencement	Completion	Gross Floor
Certificate No.	Date of issue	Date	Date	Area
				(sq.m.)
0601MH0054D05	1 January	1 March	25 November
310112200608110719	2009	2009	2011	16,318
9691MH0054D03	13 January	1 March	25 November
310112200608110719	2009	2009	2011	37,099
9691MH0054D01	13 January	8 March	2 December
310112200608110719	2009	2009	2011	35,434

			Total:	88,851

(7) According to Commodity Housing Pre-sale Permits Nos. (2011) 0000331, (2012) 0000252 and (2011) 0000330 issued by Shanghai Housing and Land Resources Bureau on 30 June 2012, the property with a total gross floor area of 32,925.48 sq.m. was permitted to be presold.
(8) As advised by the Group, the total expended construction cost for the property as at the date of valuation was RMB570,945,000 whilst the outstanding cost for completion of the property as at the date of valuation was RMB694,885,000. We have taken into account such amounts in our valuation.
(9) As advised by the Group, as at the date of valuation, residential portion with a total gross floor area of 2,840.22 sq.m. have been pre-sold for a total consideration of approximately RMB204,499,700. In the course of our valuation, we have taken into account the above contracted selling price of the pre-sold floor space.
(10) The capital value when completed of the proposed development as at 31 July 2012 was approximately RMB3,659,000,000.
(11) According to Business License No. 310112000362795 dated 13 April 2012, Shanghai Greentown Woods Golf Villas Development Co., Ltd. (上海綠城森林高爾夫別墅開發有限公司) was established on 19 June 2002 as a limited company with a registered capital of RMB196,080,000 for a valid operation period from 19 June 2002 to 18 June 2022.

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APPENDIX VI

(12) We have been provided with a legal opinion on the title to the property issued by the Group’s PRC legal adviser, which contains, inter-alias, the following information:
(i) The State-owned Land Use Rights Certificates of the property are valid, legal and enforceable under the PRC laws;
(ii) All land premium stated in the Grant Contract of State-owned Land Use Rights have been paid and settled;
(iii) Shanghai Greentown Woods Golf Villas Development Co., Ltd. (上海綠城森林高爾夫別墅開發有限公司) has lawfully owned the land use rights of the property;
(iv) The application for Shanghai Certificate of Real Estate Ownership is a procedural matter and there is no legal impediment or obstacle that may hinder the Group’s application for the Shanghai Certificate of Real Estate Ownership when necessary;
(v) In view that only an insignificant portion of the total site area is being affected, it is not expected to have any material adverse effect on the property project on the remaining portion of the property (for which Shanghai Certificate of Real Estate Ownership has been obtained);
(vi) The remaining portion of Shanghai Certificate of Real Estate Ownership will be obtained as soon as demolition of current buildings standing on the relevant land parcels of the property is completed (expected to be no later than the end of 2013);
(vii) Based on the Group’s inquiry with competent governmental authorities, it is unlikely that any fine or penalty will be imposed as a result of the absence of the Shanghai Certificate of Real Estate Ownership. Neither will the absence of, nor delay in obtaining, the Shanghai Certificate of Real Estate Ownership, alone will impose significant legal risk to the development of the projects, provided that the projects are proceeded in compliance with relevant laws and regulations after obtaining the Shanghai Certificate of Real Estate Ownership; and
(viii) The proposed design and construction of the property have been approved by the relevant government departments.
(13) The status of title and grant of major approvals and licenses in accordance with the information provided by the Group are as follows:

Shanghai Certificates of Real Estate Ownership	Yes (Portion)
Grant Contracts of State-owned Land Use Rights	Yes
Planning Permits for Construction Use of Land	Yes
Planning Permits for Construction Works	Yes
Permits for Commencement of Construction Works	Yes
Commodity Housing Pre-sale Permits	Yes
Business License	Yes

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APPENDIX VI

VALUATION CERTIFICATE

Group III – Properties to be acquired by the Group for future development in the PRC

Property Description and tenure
1. Development site Upon full completion, Greentown for the proposed Shanghai Bund House is a largedevelopment known scale residential development. as Phases 2 to 4 of Greentown Shanghai As advised by the Group, a highBund House, rise residential development is Qiu 1/1, planned to be developed on the 620 Jiefang, property with a total site area of Dongjiadu, approximately 30,670 sq.m. Huangpu District, which is a portion of whole land Shanghai, with a total site area of the PRC approximately 47,050 sq.m.. Phases 2 to 4 of Greentown
中華人民共和國 Shanghai Bund House is planned 上海市黃浦區 to be developed on the land. 董家渡街道620 街坊1/1丘 As advised by the Group, the 綠城 • 上海黃浦灣 proposed development is 二至四期 scheduled to be completed in 待建項目土地 2015 and has the planned gross floor areas as follows:

Capital value in Particulars of existing state as at occupancy 31 July 2012 As at the date of RMB5,142,000,000 valuation, the property was a land. (25.5% interest attributable to There were some the Group: old buildings erected RMB1,311,210,000) on the property planning demolition and resettlement.

	Approximate
Planned	Planned Gross
Portion	Floor Area
	(sq.m.)
Apartment	113,982.08
Basement	79,981.92

Total:	193,964.00

The property is located on the west side of South Zhongshan Road, Huangpu District, which is in urban area of Shanghai. Developments nearby are mainly residential and commercial developments.

The land use rights of the property have been granted for a term of 70 years due to expire on 30 August 2074 for residential use.

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Notes:

(1) As at the date of valuation, the Certificate of Real Estate Ownership of portion of the property with site area of 5,243.00 sq.m. has not been obtained yet. However, for referencing purpose, we have valued the property on the assumption that all of the valid Certificates of Real Estate Ownership of the property have been issued to the property, all land premium, related fees for the grant of the certificate and costs necessary to render the site ready for immediate development have been fully settled. As advised by the Group, the Group will apply for the Certificate of Real Estate Ownership after the demolition and resettlement works are completed. As advised by the Group’s PRC legal adviser, there should be no legal obstacle in obtaining such certificate.
(2) According to Shanghai Grant Contract of State-owned Land Use Rights No. (2004) 58 entered into between Shanghai Housing and Land Resources Bureau (the “Grantor”) and Shanghai Huazhe Bund Real Estate Co., Ltd. (上海華浙外灘置業有限公司) (the “Grantee”) on 31 August 2004, the land use rights of the property, comprising a total site area of approximately 47,050 sq.m. and a total gross floor area above ground of not more than 161,500 sq.m., have been granted to the grantee 70 years for residential use and 40 years for commercial use at a consideration of RMB44,410,000.
(3) According to Supplementary Agreement No. (2010) 4 of Shanghai Grant Contract of State-owned Land Use Rights No. (2004) 58 entered into between Shanghai Planning and Land Administration Bureau (the “Grantor”) and Shanghai Huazhe Bund Real Estate Co., Ltd. (上海華浙外灘置業有限公司) (the “Grantee”) on 10 August 2010, the Grantee had accepted a total gross floor area above ground of not more than 169,888.50 sq.m. with an additional land grant fee of RMB99,403,700.
(4) According to Shanghai Certificate of Real Estate Ownership No. (2012) 001292 issued by Shanghai Housing and Land Resources Bureau on 29 May 2012, the title ownership of the property, comprising a total site area of 41,807 sq.m. and a total gross floor area of 55,906.42 sq.m., have been vested in Shanghai Huazhe Bund Real Estate Co., Ltd. (上海華浙外灘置業有限公司) for a term of 70 years for residential use due to expire on 30 August 2074.
(5) According to Planning Permit for Construction Use of Land No. (2004) 0144 issued by Shanghai Planning Bureau on 16 August 2004, the construction site of a parcel of land with an area of 63,360 sq.m., is in compliance with the requirements of urban planning.
(6) According to Business License No. 310101000387233 dated 18 April 2012, Shanghai Huazhe Bund Real Estate Co., Ltd. (上海華浙外灘置業有限公司) was established on 26 September 2002 as a limited company with a registered capital of RMB50,000,000 for a valid operation period from 26 September 2002 to 30 September 2028.
(7) We have been provided with a legal opinion on the title to the property issued by the Group’s PRC legal adviser, which contains, inter-alias, the following information:
(i) The Certificate of Real Estate Ownership of the property is valid, legal and enforceable under the PRC laws;
(ii) Shanghai Huazhe Bund Real Estate Co., Ltd. (上海華浙外灘置業有限公司) is the sole legal land user of the property and has obtained the relevant certificates and approval from the government in respect of the construction of the property;
(iii) All land premium stated in the Grant Contract of State-owned Land Use Rights have been paid and settled;
(iv) The application for Shanghai Certificate of Real Estate Ownership is a procedural matter and there is no legal impediment or obstacle that may hinder the Group’s application for the Shanghai Certificate of Real Estate Ownership when necessary;
(v) In view that only an insignificant portion of the total site area is being affected, it is not expected to have any material adverse effect on the property project on the remaining portion of the property (for which Shanghai Certificate of Real Estate Ownership has been obtained);
(vi) The remaining portion of Shanghai Certificate of Real Estate Ownership will be obtained as soon as demolition of current buildings standing on the relevant land parcels of the property is completed (expected to be no later than the end of 2013); and

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(vii) Based on the Group’s inquiry with competent governmental authorities, it is unlikely that any fine or penalty will be imposed as a result of the absence of the Shanghai Certificate of Real Estate Ownership. Neither will the absence of, nor delay in obtaining, the Shanghai Certificate of Real Estate Ownership, alone will impose significant legal risk to the development of the projects, provided that the projects are proceeded in compliance with relevant laws and regulations after obtaining the Shanghai Certificate of Real Estate Ownership.
(8) The status of title and grant of major approvals and licenses in accordance with the information provided by the Group are as follows:

Shanghai Grant Contract of State-owned Land Use Rights Yes Supplementary Agreement of Shanghai Grant Contract of Yes State-owned Land Use Rights Shanghai Certificate of Real Estate Ownership Yes (Portion) Planning Permit for Construction Use of Land Yes Business License Yes

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APPENDIX VI

VALUATION CERTIFICATE

Property Description and tenure

Development site Upon full completion, Greentown for the proposed Shanghai Bund House is a largedevelopment scale residential development, known as and is erected on land with a Phases 5 and 6 of total site area of approximately Greentown Shanghai 18,708 sq.m.. Bund House, Qiu 1/1, east of As advised by the Group, upon Yuelai Street, completion, the property is south of planned to be developed into a East Fuxing Road, residential development with a west of total gross floor area above Doushi Street and ground of 63,000 sq.m.. north of Baidu Road, The proposed development is 631 and 632 Jiefang, scheduled to be completed in Huangpu District, 2018. Shanghai, the PRC The property is located on the west side of South Zhongshan 中華人民共和國 Road, Huangpu District, which is 上海市黃浦區 in urban area of Shanghai. 悅來街東 Developments nearby are mainly 復興東路南 residential and commercial 豆市街西 developments. 白渡路北 631、632街坊1/1丘 The land use rights of the 綠城 • 上海黃浦灣 property have been granted for a 五至六期 term of 70 years due to expire on 待建項目土地 14 September 2074 for residential use.

Capital value in Particulars of existing state as at occupancy 31 July 2012 As at the date of RMB415,000,000 valuation, the property was a land. (25.5% interest attributable to There were some old the Group: buildings erected on RMB105,825,000) the property planning demolition and resettlement.

Notes:

(1) As at the date of valuation, the Certificate of Real Estate Ownership of portion of the property with site area of 8,344.00 sq.m. has not been obtained yet. However, for referencing purpose, we have valued the property on the assumption that all of the valid Certificates of Real Estate Ownership of the property have been issued to the property, all land premium, related fees for the grant of the certificate and costs necessary to render the site ready for immediate development have been fully settled. As advised by the Group, the Group will apply for the Certificate of Real Estate Ownership after the demolition and resettlement works are completed. As advised by the Group’s PRC legal adviser, there should be no legal obstacle in obtaining such certificate.
(2) According to Shanghai Grant Contract of State-owned Land Use Rights No. (2004) 49 entered into between Shanghai Housing and Land Resources Bureau (the “Grantor”) and Shanghai Huazhe Bund Real Estate Co., Ltd. (上海華浙外灘置業有限公司) (the “Grantee”) on 24 August 2004, the land use rights of the property, comprising a total site area of approximately 10,364 sq.m. with a plot ratio of 3.39, have been granted to the grantee 70 years for residential use and 40 years for commercial use at a consideration of RMB9,670,000.
(3) According to Shanghai Grant Contract of State-owned Land Use Rights No. (2004) 48 entered into between Shanghai Housing and Land Resources Bureau (the “Grantor”) and Shanghai Huazhe Bund Real Estate Co., Ltd. (上海華浙外灘置業有限公司) (the “Grantee”) on 14 August 2004, the land use rights of the property, comprising a total site area of approximately 8,344 sq.m. with a plot ratio of 3.4, have been granted to the grantee 70 years for residential use and 40 years for commercial use at a consideration of RMB7,810,000.

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APPENDIX VI

(4) According to Shanghai Certificate of Real Estate Ownership No. (2004) 008055 issued by Shanghai Housing and Land Resources Bureau on 14 September 2004, the title ownership of portion of the property, comprising a total site area of 10,364 sq.m., have been vested in Shanghai Huazhe Bund Real Estate Co., Ltd. (上海華浙外灘置業有限公司) for a term of 70 years for residential use due to expire on 14 September 2074.
(5) According to two Planning Permits for Construction Use of Land Nos. (2004) 0111 and (2004) 008 issued by Shanghai Planning Bureau between 2 July 2004 and 6 July 2004, the construction site of the property with a total site area of approximately 18,704 sq.m., is in compliance with the requirements of urban planning.
(6) According to Business License No. 310101000387233 dated 18 April 2012, Shanghai Huazhe Bund Real Estate Co., Ltd. (上海華浙外灘置業有限公司) was established on 26 September 2002 as a limited company with a registered capital of RMB50,000,000 for a valid operation period from 26 September 2002 to 30 September 2028.
(7) We have been provided with a legal opinion on the title to the property issued by the Group’s PRC legal adviser, which contains, inter-alias, the following information:
(i) All land premium stated in the Contracts for Grant of Stated-owned Land Use Rights have been exempted;
(ii) The application for Shanghai Certificate of Real Estate Ownership is a procedural matter and there is no legal impediment or obstacle that may hinder the Group’s application for the Shanghai Certificate of Real Estate Ownership when necessary;
(iii) In view that only an insignificant portion of the total site area is being affected, it is not expected to have any material adverse effect on the property project on the remaining portion of the property (for which Shanghai Certificate of Real Estate Ownership has been obtained);
(iv) The remaining portion of Shanghai Certificate of Real Estate Ownership will be obtained as soon as demolition of current buildings standing on the relevant land parcels of the property is completed (expected to be no later than the end of 2013);
(v) Based on the Group’s inquiry with competent governmental authorities, it is unlikely that any fine or penalty will be imposed as a result of the absence of the Shanghai Certificate of Real Estate Ownership. Neither will the absence of, nor delay in obtaining, the Shanghai Certificate of Real Estate Ownership, alone will impose significant legal risk to the development of the projects, provided that the projects are proceeded in compliance with relevant laws and regulations after obtaining the Shanghai Certificate of Real Estate Ownership; and
(vi) According to Shanghai Grant Contracts of State-owned Land Use Rights No. (2004) 48 and (2004) 49, construction of the property is required to commence prior to 31 December 2005 but Shanghai Huazhe Bund Real Estate Co., Ltd. (上海華浙外灘置業有限公司) has not yet obtained the relevant approval documents in respect of the construction of the property and construction of the property and has not yet commenced. Pursuant to the Shanghai Grant Contracts of State-owned Land Use Rights No. (2004) 48 and (2004) 49, the Grantor may impose a fine on Shanghai Huazhe Bund Real Estate Co., Ltd. (上海華浙外灘置業有限公司) of less than 20% of the land premium payable if construction failed to commence within one year of the construction commencement date prescribed under the Contract for Grant of State-owned Land Use Rights and may take back the land use rights if construction failed to commence within two years of the construction commencement date prescribed under the Contract for Grant of State-owned Land Use Rights.

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(8) The status of title and grant of major approvals and licenses in accordance with the information provided by the Group are as follows:

Grant Contracts of State-owned Land Use Rights Yes Shanghai Certificate of Real Estate Ownership Yes (Portion) Planning Permits for Construction Use of Land Yes Business License Yes

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APPENDIX VI

VALUATION CERTIFICATE

Property

Description and tenure

Capital value in Particulars of existing state as at occupancy 31 July 2012

Development site Upon full completion, Greentown for the proposed Suzhou Rose Garden is a development residential development and is known as erected on land with a total site Greentown Suzhou area of approximately 213,852.71 Rose Garden, sq.m.. Phases 1 and 2 of north of Greentown Suzhou Rose Garden Dushu Lake, is planned to be developed on the south of land with a total gross floor area Gaohe Road, of 215,820 sq.m.. Suzhou Industrial Park, The proposed development is Suzhou, scheduled to be completed in Jiangsu Province, 2016. the PRC Upon completion, the proposed 中華人民共和國 development will comprise the 江蘇省蘇州市 following planned gross floor 蘇州工業園區 areas: 獨墅湖北高和路南綠城 • 蘇州玫瑰園 Planned PlannedApproximateGross 待建項目土地 Portion Floor Area (sq.m.) Villas 179,850.00 Basement Car Parking Spaces 35,970.00 Total: 215,820.00

RMB3,631,000,000

As at the date of RMB3,631,000,000 valuation, the property was a bare (33.33% interest land attributable to the Group: RMB1,210,212,300)

The property is located at Gaohe Road, Industrial Park, which is in new development area of Suzhou. Developments nearby are mainly residential and commercial developments.

The land use rights of the property have been granted for a term of 70 years for residential use and 40 years for commercial use.

Notes:

(1) As at the date of valuation, the State-owned Land Use Rights Certificate of the property has not been obtained yet. However, for referencing purpose, we have valued the property on the assumption that all of the valid State-owned Land Use Rights Certificates of the property have been issued to the property, all land premium, related fees for the grant of the certificate and costs necessary to render the site ready for immediate development have been fully settled.
(2) According to Grant Contract of State-owned Land Use Rights No. 3205032009CR0060 entered into between 蘇州市工業區國土房產局 (Land and Real Estate Bureau of Suzhou Industry District) (the “Grantor”) and Greentown Real Estate Group Co., Ltd. (綠城房地產集團有限公司) (the “Grantee”) on 22 September 2009, the land use rights of the property having a site area of approximately 213,852.71 sq.m. have been granted to the Grantee with details as follows:

(i) Site area:

213,852.71 sq.m.

(ii) Land use term: 70 years for residential use; and
40 years for commercial and services uses

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APPENDIX VI

(iii) Gross Floor area: 128,311.63 sq.m. (iv) Plot ratio: not more than 0.6 and not less not 0.4 (v) Completion Date of Construction: 22 September 2012 (vi) Land premium: RMB3,600,000,000

(3) According to Supplementary Agreement for Grant Contract of State-owned Land Use Rights No. 3205032009CR0060 dated 8 December 2009, the land use rights of the property have been transferred from Greentown Real Estate Group Co., Ltd. (綠城房地產集團有限公司) to Suzhou Greentown Rose Garden Real Estate Development Co., Ltd. (蘇州綠城玫瑰園房地產開發有限公司).
(4) According to Business License No. 320594000149388 dated 18 December 2010, Suzhou Greentown Rose Garden Real Estate Development Co., Ltd. (蘇州綠城玫瑰園房地產開發有限公司) was established on 7 December 2009 as a limited company with a registered capital of RMB360,000,000 for a valid operation period from 7 December 2009 to 7 December 2039.
(5) We have been provided with a legal opinion on the title to the property issued by the Group’s PRC legal adviser, which contains, inter-alias, the following information:
(i) The Grant Contract of State-owned Land Use Rights of the property are valid, legal and enforceable under the PRC laws;
(ii) All the land premium stated in the Grant Contract of State-owned Land Use Rights have been duly paid and settled;
(iii) A State-owned Land Use Rights Certificate No. (2012) 00105 had been obtained on 31 August 2012. According to State-owned Land Use Rights Certificate No. (2012) 00105, the land use rights of the property, comprising a total site area of 213,852.71 sq.m., has been vested in Suzhou Greentown Rose Garden Real Estate Development Co., Ltd. (蘇州綠城玫瑰園房地產開發有限公司) for a term due to expire on 21 September 2050 for commercial and services uses;
(iv) Suzhou Greentown Rose Garden Real Estate Development Co., Ltd. (蘇州綠城玫瑰園房地產開發有限公司) has the right to freely lease, transfer, mortgage and dispose of the land use rights and building ownership of the property provided that where any of the property has been mortgaged, the Group has to discharge the mortgage or obtain the mortgagee’s consent in advance;
(v) According to Grant Contract of State-owned Land Use Rights No. 3205032009CR0060, construction of the property is required to commence prior to 22 September 2010 but Suzhou Greentown Rose Garden Real Estate Development Co., Ltd. (蘇州綠城玫瑰園房地產開發有限公司) has not yet obtained the relevant approval documents in respect of the construction of the property and construction of the property and has not yet commenced. Pursuant to Grant Contract of State-owned Land Use Rights No. 3205032009CR0060, the Grantor may impose a fine on Suzhou Greentown Rose Garden Real Estate Development Co., Ltd. (蘇州綠城玫瑰園房地產開發有限公司) of less than 20% of the land premium payable if construction failed to commence within one year of the construction commencement date prescribed under the Contract for Grant of State-owned Land Use Rights and may take back the land use rights if construction failed to commence within two years of the construction commencement date prescribed under the Contract for Grant of State-owned Land Use Rights;
(vi) As advised by the Group, no fine has so far been imposed by the Grantor on the Group for failing to commence construction within one year of the construction commencement date under the Contract of the property. Neither has the Group received any notice from the Grantor indicating any intention to take back the land use rights;
(vii) A Planning Permit for Construction Use of Land had been obtained on 24 August 2012. According to Planning Permit for Construction Use of Land No. A20080001-01 issued by Planning Bureau of Suzhou Industry District, the construction site of the property with a total site area of approximately 213,900 sq.m., is in compliance with the requirements of urban planning;
(viii) A Permit for Commencement of Construction Works had been obtained on 20 September 2012. According to Permit for Commencement of Construction Works No. 320594201209200301 issued by Suzhou Industry District Construction Bureau, the construction works of the property with a total gross floor area of approximately 73,273.47 sq.m. are in compliance with the requirements for works commencement and are permitted;

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APPENDIX VI

(ix) The construction work of the property has already commenced as the Group had obtained the Commencement of Construction Work on 20 September 2010. The Group has made enquiries with the Grantor who has indicated that it will neither impose any fine nor exercise the right to take back the relevant land provided that construction work of the property has been commenced;
(x) Given that the Group has already obtained the Planning Permit for Construction Use of Land and Permit for Commencement of Construction Works, there is no significant legal risk that the Grantor will impose any fine or take the land back;
(xi) The proposed design of the property has been approved by the relevant government departments.
(6) The status of title and grant of major approvals and licenses in accordance with the information provided by the Group are as follows:

Grant Contracts of State-owned Land Use Rights Yes Supplementary Agreement for Grant Contract of State-owned Land Use Rights Yes Business License Yes

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APPENDIX VI

VALUATION CERTIFICATE

Description and tenure

Property

Upon completion, Greentown Wuxi Yulan Garden is a residential and commercial development and is erected on land with a total site area of approximately 180,826.20 sq.m..

Development site Upon completion, Greentown for the proposed Wuxi Yulan Garden is a development residential and commercial known as development and is erected on Phase 3 of land with a total site area of Greentown approximately 180,826.20 sq.m.. Wuxi Yulan Garden situated at south of The property comprises the bare Gaolang Road, land with a total site area of east of approximately 46,613.50 sq.m.. Lixin Avenue. Phase 3 of Greentown Wuxi Binhu District, Yulan Garden is planned to be Wuxi, developed on the land with a Jiangsu Province, total gross floor area of the PRC 90,626.40 sq.m..

Particulars of occupancy

As at the date of valuation, the property was a bare land.

Capital value in existing state as at 31 July 2012

RMB182,000,000

(42.5% interest attributable to the Group: RMB77,350,000)

中華人民共和國 As advised by the Group, the 江蘇省無錫市濱湖區 proposed development is 高浪路南側 scheduled to be completed in 立信大道東側 2015 and has the planned gross 綠城 • 無錫玉蘭花園 floor areas as follows: 三期待建項目土地

		Approximate
		Gross Floor
Planned Use		Area
		(sq.m.)
Residential		50,242.20
Retail properties		12,349.20
Ancillary facilities		35.00
Basement car
parking spaces		28,000.00
Total:		90,626.40

The property is located at the east side of Lixin Avenue, Binhu District, which is in urban area of Wuxi. Developments nearby are mainly residential and commercial developments.

The land use rights of the property have been granted for terms due to expire on 31 January 2078 and 31 January 2048 for residential and commercial uses respectively.

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APPENDIX VI

Notes:

(1) According to State-owned Land Use Rights Certificate No. (2008) 16 issued by Wuxi Municipal Government on 3 February 2008, the land use rights of the property, comprising a total site area of approximately 46,613.5 sq.m. have been vested in Wuxi Greentown Real Estate Development Co., Ltd. for terms due to expire on 31 January 2078 and 31 January 2048 for residential and commercial uses respectively.
(2) According to Grant Contract of State-owned Land Use Rights No. (2007) 41, entered into between State-owned Land Administrative Bureau of Wuxi (the “Grantor”) and 無錫市太湖新城建設投資管理有限公司 (Wuxi Taihu New City Construction and Investment Co. Ltd.) (being a PRC state-owned enterprise) (the “Grantee”), on 6 September 2007, the Grantor has granted the land use rights of Land No. A (the property) and 2 parcels of Land No. B and Land No. C to the Grantee with the particulars as follow:

As advised by the Group, Lands B and C are not included in this valuation as they do not belong to Wuxi Greentown Real Estate Development Co., Ltd. and therefore they are irrelevant.

(3) According to Supplementary Agreement of Grant Contract of State-owned Land Use Rights No. (2007) 41 entered into between State-owned Land Administrative Bureau of Wuxi, 無錫市太湖新城建設投資管理有限公司 (Wuxi Taihu New City Construction and Investment Co. Ltd.) and Wuxi Greentown Real Estate Development Co., Ltd. on 15 January 2008, the land use rights of the property namely Land No. A, having a site area of approximately 180,826.20 sq.m. as stated in Grant Contract of State-owned Land Use Rights No. (2007) 41 has been transferred from Wuxi Taihu New City Construction and Investment Co. Ltd. to Wuxi Greentown Real Estate Development Co. Ltd..
(4) According to Planning Permit for Construction Use of Land No. 3202112008B0003 issued by Urban Planning Bureau of Wuxi on 3 February 2008, the property which is a portion of the construction site of a parcel of land with an area of 180,826.20 sq.m., is in compliance with the requirements of urban planning.
(5) According to Business License No. 320211000013326 dated 21 May 2010, Wuxi Greentown Real Estate Development Co., Ltd. (無錫綠城房地產開發有限公司) was established on 7 December 2007 as a limited company with a registered capital of RMB102,000,000 for a valid operation period from 07 December 2007 to 06 December 2027.
(6) We have been provided with a legal opinion on the title to the property issued by the Group’s PRC legal adviser, which contains, inter-alias, the following information:
(i) State-owned Land Use Rights Certificates of the property is valid, legal and enforceable under the PRC laws;
(ii) Wuxi Greentown Real Estate Development Co., Ltd. (無錫綠城房地產開發有限公司) is the sole legal land user of the property and has obtained the relevant certificates and approval from the government in respect of the construction of the property;
(iii) All land premium stated in the Grant Contract of State-owned Land Use Rights have been paid and settled;
(iv) The property is mortgaged to 安徽國元信托有限責任有限公司 (Anhui Guoyuan Trust Co., Ltd.) with the security term from 22 June 2011 to 22 December 2012; and
(v) Other than the above mentioned mortgage, the property is free from seizing, mortgage, limitation of any other rights and third party rights.

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APPENDIX VI

(7) In accordance with the information provided by the Group, the status of title and grant of major approvals and licenses are as follows:

State-owned Land Use Rights Certificates Yes Grant Contract of State-owned Land Use Rights Yes Supplementary Agreement of Grant Contract of State-owned Land Use Rights Yes Planning Permit for Construction Use of Land Yes Business License Yes

– VI-53 –

VALUATION REPORT

APPENDIX VI

VALUATION CERTIFICATE

Property

Description and tenure

Particulars of occupancy

Capital value in existing state as at 31 July 2012

Upon full completion, Greentown Wuxi Taihu Project is a residential and commercial development and is erected on land with a total site area of approximately 171,572.20 sq.m..

Development site Upon full completion, Greentown for the proposed Wuxi Taihu Project is a development residential and commercial known as development and is erected on Phases 2 and 3 of land with a total site area of Greentown Wuxi approximately 171,572.20 sq.m.. Taihu Project, west of The property comprises the bare Lixin Avenue and land with a total site area of north of approximately 128,119.40 sq.m.. Guanshan Road, Phases 2 and 3 of Greentown Binhu District, Wuxi Taihu Project is planned to Wuxi, be developed on the land. Jiangsu Province, the PRC The proposed development is scheduled to be completed 中華人民共和國 between 2016 and 2017. 江蘇省無錫市濱湖區立信大道西觀山路北 Upon completion, the 綠城 • 無錫太湖項目 development will comprise high二及三期待建項目 rise apartments, commercial 土地 properties and car parking spaces in basement with the following planned gross floor areas:

As at the date of RMB1,343,000,000 valuation, the property was a bare (19.5% interest land. attributable to the Group: RMB261,885,000)

RMB1,343,000,000

		Approximate
Planned		Planned Gross
Portion		Floor Area
		(sq.m.)
Residential		187,964.00
Retail properties		42,727.00
Ancillary
facilities		7,908.00
Basement car
parking spaces		104,429.00
Total:		343,028.00

The property is located on the west side of Lixin Avenue, Binhu District, which is in urban area of Wuxi. Developments nearby are mainly residential and commercial developments.

– VI-54 –

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APPENDIX VI

Notes:

(1) According to two State-owned Land Use Rights Certificates Nos. (2010) 018 and (2010) 019 dated 26 April 2010, the land use rights of the property, comprising a total site area of approximately 128,119.4 sq.m., has been vested in Wuxi Taihu Greentown Real Estate Co., Ltd. (無錫太湖綠城置業有限公司) for terms due to expire on 12 August 2049 for commercial use, due to expire on 12 August 2079 for residential use and due to expire on 12 August 2059 for other uses.
(2) According to Grant Contract of State-owned Land Use Rights No. 3202012009CR0025 entered into between the People’s Republic of China Wuxi Municipal Land Resources Bureau (the “Grantor”) and Wuxi Taihu Xincheng Jianshe Investment Co., Ltd. (無錫市太湖新城建設投資管理有限公司) (the “Grantee”) on 13 August 2009, the land use rights of the property has been granted to the Grantee with the particulars as follows:

(3) According to Supplementary Agreement of Grant Contract of State-owned Land Use Rights No. (2007)41 entered into between People’s Republic of China Wuxi Municipal Land Resources Bureau, Wuxi Taihu Xincheng Jianshe Investment Co., Ltd. (無錫市太湖新城建設投資管理有限公司) and Wuxi Taihu Greentown Real Estate Co., Ltd. (無錫太湖綠城置業有限公司) on 2 February 2010, the land use rights of the property, having a site area of approximately 171,572.20 sq.m. as stated in the Grant Contract of State-owned Land Use Rights No. 3202012009CR0025 has been transferred from Wuxi Taihu Xincheng Jianshe Investment Co., Ltd. (無錫市太湖新城建設投資管理有限公司) to Wuxi Taihu Greentown Real Estate Co., Ltd. (無錫太湖綠城置業有限公司).
(4) According to Planning Permit for Construction Use of Land No. 3202112010B0009 issued by Wuxi Planning Bureau on 19 April 2010, the construction site of a parcel of land with a site area of approximately 171,572.2 sq.m., is in compliance with the urban planning requirements and has been approved.
(5) According to Business License No. 320211000201105120141N dated 12 May 2011, Wuxi Taihu Greentown Real Estate Co., Ltd. (無錫太湖綠城置業有限公司) was established on 25 January 2010 as a limited company with a registered capital of RMB300,000,000 for a valid operation period from 25 January 2010.
(6) We have been provided with a legal opinion on the title to the property issued by the Group’s PRC legal adviser, which contains, inter-alias, the following information:
(i) Wuxi Taihu Greentown Real Estate Co., Ltd. (無錫太湖綠城置業有限公司) is in possession of a proper legal title to the property and is entitled to transfer the property with the residual term of land use rights at no extra land premium or other onerous payment payable to the government;
(ii) All land premium, costs of public utilities, ancillary infrastructure fees and compensation to and resettlement of any original residents to make way for the proposed development have been fully settled; and
(iii) The property is mortgaged to 海爾集團財務有限責任公司 (Hai Er Group Co., Ltd.) with the security term from 30 August 2011 to 29 August 2014.
(7) The status of title and grant of major approvals and licenses in accordance with the information provided by the Group are as follows:

– VI-55 –

VALUATION REPORT

APPENDIX VI

VALUATION CERTIFICATE

Capital value in Particulars of existing state as at Property Description and tenure occupancy 31 July 2012 RMB 15. Development site Upon full completion, Greentown As at the date of RMB970,000,000 for the proposed Changzhou Yulan Square is a valuation, Phases 1 development composite development and is and 2 of the (18.5% interest known as erected on land with a total site property was a bare attributable to Phases 1 to 5 of area of approximately 413,251.80 land. the Group: Greentown sq.m.. RMB179,450,000) Changzhou There were some Yulan Square, Phases 1 to 5 of Greentown old structures and situated at Changzhou Yulan Square is buildings erected on Lot A to E, planned to be developed on the the remaining West of land. Upon completion, the portion of the Wuyi Road, development will comprise highproperty. Wujin District, rise apartments, hotel, commercial Changzhou, properties and car parking spaces Jiangsu Province, in basement. the PRC As advised by the Group,the 中華人民共和國 proposed development is 江蘇省常州市 scheduled to be completed 武進區 between 2014 and 2018 and has 武宜路以西A至E地 the planned gross floor areas as 塊綠城 • 常州玉蘭廣 follows: 場一至五期待建項目土地 Approximate Planned Planned Gross Portion Floor Area (sq.m.) Above ground High-rise Residential 1,030,249.00 Retail properties 29,499.92 Hotel 25,000.00 Ancillary facilities 30,991.48 Sub-total 1,115,740.40 Under ground Car Park 225,150.00 Ancillary facilities 9,865.80 Sub-total 235,015.80 Total: 1,350,756.20

The property is located at Wuyi Road, Wujin District, which is in urban central area of Wujin District. Developments nearby are mainly residential and commercial developments.

The land use rights of the property have been granted for a term of 70 years for residential use.

– VI-56 –

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APPENDIX VI

Notes:

(1) In the course of our valuation, we have ascribed no commercial value to the portion of land that the Group has not obtained a valid State-owned Land Use Rights Certificate with site area of 247,140.8 sq.m.. Had the Group obtained this portion of State-owned Land Use Rights Certificate, the capital value of this portion of property in its existing state as at date of valuation assuming that the land premium has been settled in full would be RMB1,404,000,000 (37% interest attributable to the Group: RMB259,740,000).
(2) According to State-owned Land Use Rights Certificates No. (2011) 1204747 and (2011) 1204748 both dated 30 September 2011, the land use rights of portion of the property comprising a total site area of 166,111 sq.m., have been vested in Changzhou Greentown Real Estate Co., Ltd. (常州綠城置業有限公司).
(3) According to Grant Contract of State-owned Land Use Rights No. 3204832010CR0153 dated 11 August 2010, 常州市國土資源局 (State-owned Land Resources Bureau of Changzhou Municipality) has granted the land use rights of the property comprising a site area of 75,880.5 sq.m. to Ketai Company (HK) (科泰香港有限公司) and Greentown Real Estate Group Co., Ltd. (綠城房地產集團有限公司) for a consideration of RMB383,196,525.

According to Supplementary Agreement dated 2 November 2010, the land use rights of the property have been totally transferred to Changzhou Greentown Real Estate Co., Ltd. (常州綠城置業有限公司).

(4) According to Grant Contract of State-owned Land Use Rights No. 3204832010CR0154 dated 11 August 2010, 常州市國土資源局 (State-owned Land Resources Bureau of Changzhou Municipality) has granted the land use rights of the property comprising a site area of 79,088.6 sq.m. to Ketai Company (HK) (科泰香港有限公司) and Greentown Real Estate Group Co., Ltd. (綠城房地產集團有限公司) for a consideration of RMB399,397,430.

(5) According to Grant Contract of State-owned Land Use Rights No. 3204832010CR0155 dated 11 August 2010, 常州市國土資源局 (State-owned Land Resources Bureau of Changzhou Municipality) has granted the land use rights of the property comprising a site area of 87,022.4 sq.m. to Ketai Company (HK) (科泰香港有限公司) and Greentown Real Estate Group Co., Ltd. (綠城房地產集團有限公司) for a consideration of RMB439,463,120.

(6) According to Grant Contract of State-owned Land Use Rights No. 3204832010CR0156 dated 11 August 2010, 常州市國土資源局 (State-owned Land Resources Bureau of Changzhou Municipality) has granted the land use rights of the property comprising a site area of 100,547 sq.m. to Ketai Company (HK) (科泰香港有限公司) and Greentown Real Estate Group Co., Ltd. (綠城房地產集團有限公司) for a consideration of RMB507,898,700.

(7) According to Grant Contract of State-owned Land Use Rights No. 3204832010CR0157 dated 11 August 2010, 常州市國土資源局 (State-owned Land Resources Bureau of Changzhou Municipality) has granted the land use rights of the property comprising a site area of 100,547 sq.m. to Ketai Company (HK) (科泰香港有限公司) and Greentown Real Estate Group Co., Ltd. (綠城房地產集團有限公司) for a consideration of RMB356,965,815.

(8) Pursuant to Planning Permit for Construction Use of Land No. 320400201150082 issued by Changzhou Urban Planning Bureau on 14 November 2011, the construction site of a parcel of land for the development of Greentown Yulan Square with a site area of approximately 87,022.40 sq.m., is in compliance with the urban planning requirements and has been approved.

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APPENDIX VI

(9) Pursuant to Planning Permit for Construction Works No. 320400201150151 issued by Changzhou Urban Planning Bureau on 14 October 2011, the construction works of the property, with a total gross floor area of approximately 307,574 sq.m., are in compliance with the urban construction requirements and has been approved.
(10) Pursuant to Permit for Commencement of Construction Works No. 320483201110170901 issued by Changzhou housing and urban-rural construction Bureau on 17 October 2011, the construction works of Greentown Yulan Square with a total gross floor area of approximately 307,574 sq.m. are in compliance with the requirements for works commencement and are permitted.
(11) According to Commodity Housing Pre-sale Permit No. (2012) 056 issued by Changzhou Housing and Land Resources Bureau on 31 July 2012, the property with a total gross floor area of 49,529.87 sq.m., are permitted for pre-sale.
(12) According to Business License No. 320000400004377 dated 22 July 2011, Changzhou Greentown Real Estate Co., Ltd. (常州綠城置業有限公司) was established on 1 November 2010 as a limited company with a registered capital of RMB837,500,000 for a valid operation from 1 November 2010 to 31 October 2030.
(13) We have been provided with a legal opinion on the title to the property issued by the Group’s PRC legal adviser which contains, inter-alia, the following information:
(i) The Grant Contracts of State-owned Land Use Rights, its supplementary agreements and the relevant development approvals are valid, legal and enforceable under the PRC laws;
(ii) State-owned Land Use Rights Certificates of the property is valid, legal and enforceable under the PRC laws;
(iii) The Group is currently preparing for the application of the remaining portion of State-owned Land Use Rights Certificate of the property. The application for State-owned Land Use Rights Certificate is a procedural matter and does not involve significant amount of time, work or costs and there is no legal impediment or obstacle that may hinder the Group’s application for the State-owned Land Use Rights Certificate when necessary;
(iv) Based on the Group’s inquiry with the Grantor, it is unlikely that any fine or penalty will be imposed as a result of the absence of the State-owned Land Use Rights Certificate for such an insignificant portion of the property. Neither will the absence of, or delaying in obtaining, the State-owned Land Use Rights Certificate alone will impose significant legal risk to the development of the projects, provided that the projects are proceeded in compliance with relevant laws and regulations after obtaining such land use right certificates;
(v) Changzhou Greentown Real Estate Co., Ltd. (常州綠城置業有限公司) is the legal land user of the property;
(vi) Portion of land premium stated in the Grant Contract of State-owned Land Use Rights have been paid and settled;
(vii) Changzhou Greentown Real Estate Co., Ltd. (常州綠城置業有限公司) has no legal impediment to obtain the remaining State-owned Land Use Rights Certificates and is entitled to sell, transfer, mortgage and lease the land use rights of the property; and
(viii) Changzhou Greentown Real Estate Co., Ltd. (常州綠城置業有限公司) has the right to occupy, use, lease, transfer, mortgage or otherwise dispose of the land use rights and building ownership of the property within the land use term.
(14) The status of title and grant of major approvals and licenses in accordance with the information provided to us by the Group are as follows:

State-owned Land Use Rights Certificates	Yes (Portion)
Grant Contracts of State-owned Land Use Rights	Yes
Supplementary Agreements of Grant Contract of State-owned Land Use Rights	Yes
Planning Permit for Construction Use of Land	Yes
Planning Permit for Construction Works	Yes
Permit for Commencement of Construction Works	Yes
Commodity Housing Pre-sale Permit	Yes
Business License	Yes

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VALUATION REPORT

APPENDIX VI

VALUATION CERTIFICATE

Property Description and tenure

Particulars of occupancy

Capital value in existing state as at 31 July 2012

Development site Upon full completion, Greentown for the proposed Tianjin Azure Coast is a development composite development and is known as erected on land with a total site Phase 2 of area of approximately 17,160.60 Greentown Tianjin sq.m.. Azure Coast, east of The property comprises the bare Binhe West Road, land with a total site area of south of approximately 7,923.00 sq.m.. Wanshun North Phase 2 of Greentown Tianjin Road, Azure Coast is planned to be north of developed on the land. Hengfu Road, Tanggu District, As advised by the Group, the Tianjin, property is planned to be the PRC developed into a composite development including serviced 中華人民共和國 apartments, hotel and other 天津市塘沽區 ancillary. 濱河西路以東萬順北道以南 As advised by the Group, the 橫福路以北 proposed development is 綠城 • 天津藍色海岸 scheduled to be completed in 二期 2015 and has the planned gross 待建項目土地 floor areas as follows:

As at the date of RMB117,000,000 valuation, the property was a bare (40% interest land. attributable to the Group: RMB46,800,000)

RMB117,000,000

		Approximate
		Gross Floor
Planned Use		Area
		(sq.m.)
Serviced		24,957
apartments
Clubhouse		52,819
Ancillary facilities		13,024
Basement
carparking
spaces		12,400
Total:		103,200

The property is located at Binhe West Road, Tanggu District, which is in Binhai New Area of Tianjin. Developments nearby are mainly residential and office developments.

The land use rights of the property have been granted for a term of 40 years due to expire on 23 November 2049 for commercial use.

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APPENDIX VI

Notes:

(1) According to Tianjin Grant Contract of State-owned Land Use Rights No. 2008026 entered into between Tianjin Housing and Land Resources Bureau Tanggu Branch (the Grantor) and Tianjin Yijun Investment Co., Ltd. (天津逸駿投資有限公司) (the Grantee) on 27 March 2008, the land use rights of the property, comprising a total site area of approximately 17,160.60 sq.m., have been granted to the grantee for a land use term of 40 years with details as follows:

Site Area : 17,160.60 sq.m. (including a site area of approximately 9,237.6 sq.m. for Land No. 1 and a site area of approximately 7,923.0 sq.m. for Land No. 2) Land Use : Commercial and services uses (including office, hotel, commercial and services apartment) Land Use Term : 70 years for residential use, 40 years for commercial use and 50 years for others use Plot Ratio : Not more than 9 for Land No. 1 and not more than 10.5 for Land No. 2 Land Premium : RMB64,550,000

(2) According to Real Estate Title Certificate No. 107050901062 issued by Tianjin Housing and Land Resources Bureau on 23 December 2009, the land use right of the property, comprising a total site area of 7,923.0 sq.m., have been vested in Tianjin Yijun Investment Co., Ltd. (天津逸駿投資有限公司) for a term of 40 years due to expire on 23 November 2049 for commercial use.
(3) According to Planning Permit for Construction Use of Land No. (2008) 0038 issued by Tianjin Tanggu District Planning Bureau on 6 April 2008, the construction site of a parcel of land with site area of 17,160.60 sq.m., is in compliance with the urban planning requirements and has been approved.
(4) According to Business License No. 120107000018093 dated 13 January 2010, Tianjin Yijun Investment Co., Ltd. (天津逸駿投資有限公司) was established on 11 January 2008 as a limited company with a registered capital of RMB10,000,000 for a valid operation period from 11 January 2008 to 10 January 2028.
(5) We have been provided with a legal opinion on the title to the property issued by the Group’s PRC legal adviser, which contains, inter-alias, the following information:
(i) The Certificate of Real Estate Ownership of the property is valid, legal and enforceable under the PRC laws;
(ii) Tianjin Yijun Investment Co., Ltd. (天津逸駿投資有限公司) is in possession of a proper legal title to the property and is entitled to transfer the property with the residual term of land use rights at no extra land premium or other onerous payment payable to the government; and
(iii) All land premium, costs of public utilities, ancillary infrastructure fees and compensation to and resettlement of any original residents to make way for the proposed development have been fully settled.
(6) The status of title and grant of major approvals and licenses in accordance with the information provided by the Group are as follows:

Tianjin Grant Contract of State-owned Land Use Rights Yes Real Estate Title Certificate Yes Planning Permit for Construction Use of Land Yes Business License Yes

– VI-60 –

RECONCILIATION OF VALUATION ON THE PROPERTIES WITH THEIR CARRYING VALUES

APPENDIX VII

DTZ Debenham Tie Leung Limited , an independent firm of professional valuer, has valued the property interests held by the Target Companies No.1 to No.9 as at 31 July 2012. The text of the letter, summary of valuation and the valuation certificate are set out in Appendix VI to this circular.

The reconciliation between valuation of the property interests held by the Target Companies No.1 to No.9 as at 31 July 2012 and the net book value of such property interest as at 30 June 2012 is as follow:

	RMB’000
Net book value of the property interests of Target Companies No.1
to No.5 and Target Company No.8 as at 30 June 2012 as
presented in the accountant’s report set out in appendix II:
– Properties under development	12,791,638
– Completed properties held for sale	966,188
	13,757,826
Valuation surplus for the property interests of Target Companies
No.1 to No.5 and Target Company No.8	4,356,340
Valuation of the property interests of Target Companies No.1 to
No.5 and Target Company No.8 as at 30 June 2012	18,114,166
Movements for period from 1 July 2012 to 31 July 2012
– Additions	99,674
– Delivery to third parties of properties held for sale	(37,448)
Valuation surplus for the property interests of Target Companies
No.1 to No.5 and Target Company No.8 for period from 1 July
2012 to 31 July 2012	128,608
Valuation of the property interests held by Target Companies No.6,
No.7 and No.9 as at 31 July 2012	5,172,000
Valuation of the property interests of the Target Companies as at 31
July 2012	23,477,000

– VII-1 –

GENERAL INFORMATION

APPENDIX VIII

1 RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Group. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

2 DIRECTORS’ AND CHIEF EXECUTIVE’S INTERESTS AND SHORT POSITIONS IN SHARES, UNDERLYING SHARES AND DEBENTURES

As at the Latest Practicable Date, the interests and short positions of the Directors and the chief executives of the Company in the Shares, underlying shares and debentures of the Company or its associated corporations (within the meanings of Part XV of the SFO) which were 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 have taken or deemed to have taken under such provisions of the SFO), or which were required to be recorded in the register to be kept by the Company pursuant to Section 352 of the SFO or is otherwise required to be notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers (the “Model Code”) contained in the Listing Rules were as follows:

(a) Interest in Shares of the Company and/or associated corporation

			Number of	Approximate
		Relevant company	shares of the	percentage of
		(including associated	relevant	interest in the
Name of Director	Nature of Interest	corporations)	company(1)	relevant company
Mr. Sun Hongbin	Interest in a	The Company	1,555,578,451(L)	51.69%
	controlled
	corporation(2)
	Beneficial interest	Sunac International		100%

Notes:

(1) The letter “L” denotes the person’s long position in such Shares.
(2) Mr. Sun is the beneficial owner of 100% of the issued share capital of Sunac International and is deemed to be interested in the Shares held by Sunac International.
(3) Sunac International is our holding company and therefore an “associated corporation” of our Company within the meaning of Part XV of the SFO.

– VIII-1 –

GENERAL INFORMATION

APPENDIX VIII

(b) Interest in the underlying shares of our Company

			Approximate
			percentage of
			interest in the
Name of Director	Nature of Interest	Number of shares	company
Mr. Sun Hongbin	Beneficial interest(1)	6,600,000	0.21%
Mr. Wang Mengde	Beneficial interest(1)	6,900,000	0.23%
Mr. Li Shaozhong	Beneficial interest(1)	7,100,000	0.24%
Mr. Jing Hong	Beneficial interest(1)	7,400,000	0.24%
Mr. Chi Xun	Beneficial interest(1)	7,200,000	0.24%
Mr. Shang Yu	Beneficial interest(1)	6,800,000	0.23%

Note:

(1) The interests in the underlying shares are in relation to the options granted under the Pre-IPO Share Option Scheme and the Post-IPO Share Option Scheme.

Save as disclosed above, as at the Latest Practicable Date, so far as was known to the Directors and the chief executive of the Company, no other person had interests or short positions in the Shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which 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 have taken or deemed to have taken under such provisions of the SFO); or were required, pursuant to Section 352 of the SFO, to be recorded in the register referred to therein; or were required, pursuant to the Model Code, to be notified to the Company and the Stock Exchange.

3 SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors had entered, or proposed to enter into, a service contract with any member of the Group which is not expiring or determinable by the Group within one year without payment of compensation, other than statutory compensation.

4 COMPETING BUSINESS

As at the Latest Practicable Date, none of the Directors or their respective associates had any competing interests in a business which competes or is likely to compete with the business of the Group (as would be required to be disclosed under Rule 8.10 of the Listing Rules if each of them were a controlling shareholder).

– VIII-2 –

GENERAL INFORMATION

APPENDIX VIII

5 DIRECTORS’ INTERESTS IN ASSETS AND CONTRACTS

As at the Latest Practicable Date, none of the Directors has had any direct or indirect interest in any assets which have since 31 December 2011 (being the date to which the latest published audited financial statements of the Company were made up) been acquired or disposed of by or leased to or are proposed to be acquired or disposed of by or leased to any member of the Group.

There is no contract or arrangement subsisting at the Latest Practicable Date in which any of the Directors is materially interested and which is significant in relation to the business of the Group.

6 LITIGATION

As at the Latest Practicable Date, none of the members of the Group is engaged in any litigation or arbitration of material importance and no litigation or claim of material importance is known to the Directors to be pending or threatened against any member of the Group.

7 MATERIAL ADVERSE CHANGES

As at the Latest Practicable Date, the Directors are not aware of any material adverse change in the financial or trading position of the Group since 31 December 2011, the date to which the latest published audited financial statements of the Group were made up.

8 EXPERTS

(a) The following is the qualification of the experts (the “Experts”) who have given opinions or advices which are contained in this circular:

Name Qualifications Quam Capital a licensed corporation to carry out type 6 (advising on corporate finance) regulated activity under the SFO PricewaterhouseCoopers Certified public accountants DTZ Independent property valuers

(b) As at the Latest Practicable Date, none of the Experts has any shareholding, directly or indirectly, in any member of the Group or any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.
(c) As at the Latest Practicable Date, each of the Experts has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its letter, statements and references to its name in the form and context in which they are included. Such letter and statements from the Experts are given as of the date of this circular for incorporation herein.

– VIII-3 –

GENERAL INFORMATION

APPENDIX VIII

(d) As at the Latest Practicable Date, none of the Experts has any interest, direct or indirect, in any assets which have been acquired or disposed of by or leased to any member of the Group, nor which are proposed to be acquired or disposed of by or leased to any member of the Group since 31 December 2011, the date to which the latest published audited financial statements of the Group were made up.

9 MATERIAL CONTRACTS

Saved as disclosed below, no material contracts (not being contract entered into in the ordinary course of business carried out by the Group), have been entered into by any member of the Group within the two years immediately preceding the date of this circular:

(a) Packaged equity transfer agreement dated 19 December 2010 entered into between Chongqing Yuneng Real Estate, Sunac Zhidi, Beijing Guoxin, Chongqing Yuneng, Tianjin Ying Xin Xinheng Investment Consultancy Limited* (天津盈鑫信恒投資諮詢有限公司), Chongqing Shangshan and APEV Property Management, pursuant to which each party agreed that, Sunac Zhidi shall purchase from Chongqing Yuneng Real Estate its 40% equity interest in each of Chongqing Yuneng and APEV Property Management through a listing-for-sale process organized by Chongqing United Assets and Equity Exchange for a cash consideration of RMB319,848,000 and RMB1.00, respectively; Chongqing Yuneng shall transfer its 85% equity interest and 14% equity interest in Chongqing Shangshan to Chongqing Yuneng Real Estate and Beijing Guoxin for a cash consideration of RMB18,242,330 and RMB3,004,614 respectively; and APEV Property Management shall transfer its 1% equity interest in Chongqing Shangshan for a cash consideration of RMB214,615 to Beijing Guoxin;
(b) Equity transfer agreement dated 21 December 2010 entered into between Chongqing Yuneng Real Estate (an Independent Third Party) and Sunac Zhidi, pursuant to which Chongqing Yuneng Real Estate transferred its 40% equity interest in Chongqing Yuneng to Sunac Zhidi for a cash consideration of RMB319,848,000;
(c) Equity transfer agreement dated 21 December 2010 entered into between Chongqing Yuneng Real Estate and Sunac Zhidi, pursuant to which Chongqing Yuneng Real Estate transferred its 40% equity interest in APEV Property Management to Sunac Zhidi for a cash consideration of RMB1.00;
(d) Equity transfer agreement dated 21 December 2010 entered into between Chongqing Yuneng and Chongqing Yuneng Real Estate pursuant to which Chongqing Yuneng transferred its 85% equity interest in Chongqing Shangshan to Chongqing Yuneng Real Estate for a cash consideration of RMB18,242,300;
(e) Equity transfer agreement dated 21 December 2010 entered into between Chongqing Yuneng and Beijing Guoxin pursuant to which Chongqing Yuneng transferred its 14% equity interest in Chongqing Shangshan to Beijing Guoxin for a cash consideration of RMB3,004,614;

– VIII-4 –

GENERAL INFORMATION

APPENDIX VIII

(f) Equity transfer agreement dated 21 December 2010 entered into between APEV Property Management and Beijing Guoxin pursuant to which APEV Property Management transferred its 1% equity interest in Chongqing Shangshan to Beijing Guoxin for a cash consideration of RMB214,615;
(g) Equity transfer agreement dated 22 December 2010 entered into between Chongqing Yuneng and Beijing Guoxin pursuant to which Chongqing Yuneng transferred its 14% equity interest in Chongqing Shangshan to Beijing Guoxin for a cash consideration of RMB3,004,614;
(h) Equity transfer agreement dated 22 December 2010 entered into between Chongqing Yuneng Real Estate and Chongqing Yuneng pursuant to which Chongqing Yuneng transferred its 85% equity interest in Chongqing Shangshan to Chongqing Yuneng Real Estate for a cash consideration of RMB18,242,300;
(i) Equity transfer agreement dated 1 January 2011 entered into between Chongqing Yuneng Real Estate and Sunac Zhidi, pursuant to which Chongqing Yuneng Real Estate transferred its 40% equity interest in APEV Property Management to Sunac Zhidi for a cash consideration of RMB1.00;
(j) Equity transfer agreement dated 1 January 2011 entered into between Chongqing Yuneng Real Estate and Sunac Zhidi, pursuant to which Chongqing Yuneng Real Estate transferred its 40% equity interest in Chongqing Yuneng to Sunac Zhidi for a cash consideration of RMB319,848,000;
(k) Equity transfer agreement dated 25 April 2011 entered into between Beijing Zhuzong Real Estate Development Co., Ltd. (北京住總房地產開發有限公司) (“Beijing Zhuzong”) and Sunac Zhidi, pursuant to which Beijing Zhuzong transferred its 40% equity interest in Beijing Sunac Foundation Real Estate Co., Ltd. (北京融創基業地產有限公司) (“Sunac Foundation”) (a wholly-owned subsidiary of the Company) to Sunac Zhidi for a cash consideration of RMB8,000,000;
(l) Cooperation agreement dated 31 May 2011 entered into among Sunac Zhidi, Sunac Foundation, Daye Trust Corporation Limited (大業信託有限責任公司) (“Daye Trust”) (an Independent Third Party) and China Oriental Assets Management Co., Ltd. (中國東方資產管理公司) (“Oriental Assets”) (the largest shareholder of Daye Trust), pursuant to which Daye Trust and Sunac Zhidi agreed to cooperate for the establishment of the trust scheme by Daye Trust to raise funds from the public of an aggregate amount of RMB600,000,000 for the purpose of capital injection into Sunac Foundation for the residential development project in respect of Changping District in Beijing (“Daye Trust Scheme”);
(m) Cooperation agreement dated 20 June 2011 entered into among Sunac Zhidi, Chongqing Sunac Foundation Real Estate Development Co., Ltd.* (重慶融創基業房地產開發有限公司) (“Chongqing Foundation”) (an indirect wholly-owned

– VIII-5 –

GENERAL INFORMATION

APPENDIX VIII

subsidiary of the Company), Chongqing Sunac Shangfeng Real Estate Co., Ltd. (重慶融創尚峰置業有限公司) (“Chongqing Shangfeng”) (a wholly-owned subsidiary of the Company) and Xinhua Trust Holding Limited (新華信託股份有限公司) (“Xinhua Trust”) (an Independent Third Party), pursuant to which the parties agreed to cooperate for the establishment of the trust scheme by Xinhua Trust to raise funds from the public of an aggregate amount of between RMB550,000,000 and RMB600,000,000 for the purpose of capital injection into Chongqing Shangfeng for the residential development project in respect of Lushan Town in Chongqing (“Xinhua Trust Scheme”);

(n) Capital increase agreement dated 20 June 2011 entered into among Xinhua Trust, Chongqing Foundation and Chongqing Shangfeng, pursuant to which, Xinhua Trust agreed to, upon establishment of the Xinhua Trust Scheme, contribute the fund of an amount between RMB550,000,000 and RMB600,000,000 raised through the Xinhua Trust Scheme to the increase of the registered capital of Chongqing Shangfeng;
(o) Capital increase agreement dated 20 June 2011 entered into among Sunac Zhidi, Sunac Foundation and Daye Trust, pursuant to which Daye Trust agreed to contribute the sum of RMB600,000,000, raised from holders of preferential trust units under the Daye Trust Scheme, towards the registered capital of Sunac Foundation, of which RMB196,000,000 would be contributed to the registered capital of Sunac Foundation and the balance into the capital reserve fund of Sunac Foundation;
(p) Preferential trust transfer agreement dated 20 June 2011 entered into among Sunac Zhidi, Daye Trust and Oriental Assets, pursuant to which Sunac Zhidi agreed to acquire the rights and benefits of holders of preferential trust units under the Daye Trust Scheme from Daye Trust at a consideration of (i) RMB600 million plus a return of 17% per annum by no later than 17 months after the establishment of the Daye Trust Scheme; or (ii) RMB600 million plus a return of 23% per annum if the acquisition did not take place after expiry of 17th-month period resulting the term of the Daye Trust Scheme automatically extends for another 29 months (collectively, the “Purchase Undertaking”);
(q) Equity transfer agreement dated 20 June 2011 entered into between Sunac Zhidi and Daye Trust, pursuant to which Daye Trust agreed to transfer the 49% equity interest in Sunac Foundation to Sunac Zhidi upon fulfillment of the Purchase Undertaking by Sunac Zhidi at nil consideration;
(r) Cooperation framework agreement dated 7 September 2011 entered into between Sunac Zhidi and Poly (Tianjin) Real Estate Development Co., Ltd. (保利(天津) 房地產開發有限公司) (“Poly Tianjin”), an Independent Third Party, pursuant to which Sunac Zhidi and Poly Tianjin agreed to establish an equity joint venture enterprise in the PRC, Tianjin Poly Sunac Investment Company Limited (天津保利融創投資有限公司) (“Poly Sunac”), in the shareholdings of 49% and 51%, respectively, to engage in property development in the PRC. Poly Tianjin and Sunac Zhidi agreed to make cash contributions of RMB1,020,000,000 and RMB980,000,000, respectively, to the registered capital of Poly Sunac;

– VIII-6 –

GENERAL INFORMATION

APPENDIX VIII

(s) Equity Transfer Agreement dated 27 September 2011 entered into between Beijing Shougang and Sunac Zhidi, pursuant to which Beijing Shougang agreed to transfer the 50% equity interest in Shougang Sunac to Sunac Zhidi for a cash consideration of RMB1.45 billion;
(t) Co-operation framework agreement dated 15 November 2011 entered into among Sunac Zhidi, Sunac Yingrun (an indirect wholly-owned subsidiary of the Company) and Daye Trust, where Sunac Zhidi is required to subscribe 200 million subordinated trust units of the Trust Fund Scheme for a total subscription price of RMB200 million by way of debt. Sunac Yingrun is also required to subscribe subordinated trust units, of such amount equal to no less than 10% of the total number of units in the Trust Fund Scheme for RMB1 per trust unit, which would be settled in cash;
(u) Equity transfer agreement dated 5 January 2012 entered into between Sunac Zhidi and Greentown Real Estate, pursuant to which Sunac Zhidi had agreed to acquire, and Greentown Real Estate had agreed to dispose of 51% equity interest in Hubin Real Estate, at a cash consideration of RMB51 million;
(v) Equity cooperative agreement dated 21 March 2012 entered into among Daye Trust, Sunac Zhidi and Tianjin Sunac Mingxiang Investment Development Co. Ltd.* (天津融創名翔投資發展有限公司) (an indirect wholly-owned subsidiary of the Company) (“Sunac Mingxiang”), pursuant to which the key terms in respect of the investment in Sunac Mingxiang to be made by the Trust Fund Scheme were set out, the parties also agreed to enter into the Equity Transfer Agreement, the Account Receivable Transfer Agreement, the Repayment Agreement and other ancillary agreements on the same day to implement the terms of the equity cooperative agreement;
(w) Equity transfer agreement dated 21 March 2012 entered into between Daye Trust and Sunac Zhidi, pursuant to which Daye Trust has agreed to acquire 49.5586% of Sunac Mingxiang (“Equity Transfer”) for a cash consideration of RMB594,703,200 from Sunac Zhidi. (“Equity Transfer Agreement”);
(x) Account receivable transfer agreement dated 21 March 2012 entered into among Daye Trust, Sunac Zhidi and Sunac Mingxiang, Sunac Zhidi agreed to assign an account receivable of a principal amount of RMB200 million originally due from Sunac Mingxiang to Sunac Zhidi before completion of this agreement (“Account Receivable”) to Daye Trust. (“Account Receivable Transfer Agreement”);
(y) Repayment Agreement dated 21 March 2012 entered into between Sunac Mingxiang and Daye Trust, pursuant to which Sunac Mingxiang agreed to repay the Account Receivable to Daye Trust, where an amount of RMB23.0 million of the Account Receivable shall be repaid within 12 months of the date of establishment of the Trust Fund Scheme and the balance to be settled on the earlier of: (i) the date when Sunac Zhidi has paid the consideration for the Equity Transfer in full after exercising the first right of refusal aforesaid; (ii) the date when Sunac Zhidi renounces the first right of refusal; or (iii) the third anniversary of the date of establishment of the Trust Fund Scheme. (“Repayment Agreement”);

– VIII-7 –

GENERAL INFORMATION

APPENDIX VIII

(z) Pledge agreements dated 21 March 2012 entered into between Sunac Zhidi and Daye Trust, pursuant to which a security over land use rights of two parcels of land located in Nankai District in Tianjin were created in favour of Daye Trust;
(aa) Pledge agreement dated 21 March 2012 entered into between Sunac Zhidi and Daye Trust, pursuant to which a security over the Group’s 49.5586% equity interest in Sunac Mingxiang was created in favour of Daye Trust;
(bb) Framework Agreement dated 22 June 2012 entered into between Sunac Zhidi and Greentown Real Estate, pursuant to which: (1) Sunac Zhidi conditionally agreed to acquire, and Greentown Real Estate conditionally agreed to dispose of, an effective 50% interest in Equity Interests 1 to 8 by way of (i) the establishment of the JV Company to be owned as to 50% by Sunac Zhidi and 50% by Greentown Real Estate; and (ii) the acquisition of Equity Interests 1 to 8 by the JV Company from Greentown Real Estate; and (2) upon formation of the JV Company, Sunac Zhidi conditionally agreed to acquire, and Greentown Real Estate conditionally agreed to dispose of, an effective 50% interest in Target Company No. 9;
(cc) Equity transfer agreement dated 7 August 2012 entered into between Sunac Zhidi and Greentown Real Estate, pursuant to which Greentown Real Estate agreed to transfer 50% equity interest in Target Company No. 9 to Sunac Zhidi; and
(dd) Land development cooperative framework agreement dated 10 October 2012 entered into between Shanghai Lvshun Real Estate Development Co., Ltd., a subsidiary of Shanghai Sunac Greentown and Longrun Property Development (Chengdu) Co., Ltd. (龍潤房地產(成都)有限公司), an independent third party, pursuant to which both parties agreed to jointly make land biddings on an equal shares basis and establish a joint venture company for project development after the successful bidding.

10 MISCELLANEOUS

(a) The registered office of the Company is at Landmark Square, 3rd Floor, 64 Earth Close P.O. Box 30592, Grand Cayman KY1-1203, Cayman Islands, and the head office and the principal place of business in Hong Kong is at 8th Floor, Gloucester Tower, The Landmark, 15 Queen’s Road Central, Hong Kong.
(b) The branch share registrar and transfer office of the Company in Hong Kong is Computershare Hong Kong Investor Services Limited located at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong.
(c) The joint company secretaries of the Company are Mr. Huang Shuping and Ms. Ma Sau Kuen Gloria. Ms. Ma Sau Kuen Gloria is is a fellow member of the Hong Kong Institute of Chartered Secretaries and the Institute of Chartered Secretaries and Administrators in the United Kingdom.

– VIII-8 –

GENERAL INFORMATION

APPENDIX VIII

(d) The English text of this circular shall prevail over the Chinese text.

11 DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents of the Group are available for inspection during normal business hours at the principal place of business of the Company in Hong Kong at 8th Floor, Gloucester Tower, The Landmark, 15 Queen’s Road Central, Hong Kong, except public holidays, up to and including for 14 days from the date of this circular:

(a) the memorandum and articles of association of the Company;
(b) the material contracts referred to in the paragraph headed “Material Contracts” in this appendix;
(c) the Framework Agreement;
(d) the letter from the Independent Financial Adviser, the text of which is set out in the section headed “Letter from Quam Capital” of this circular;
(e) the accountant’s reports on the Target Companies, the text of which is set out in Appendix II to this circular;
(f) the report from PricewaterhouseCoopers on unaudited pro forma financial information of the Enlarged Group, the text of which is set out in Appendix IV to this circular;
(g) the annual reports of the Company for the two financial years ended 31 December 2010 and 31 December 2011 respectively and the interim report of the Company for the six months ended 30 June 2012;
(h) a valuation report from DTZ in relation to the property interests held by the Target Companies as at 31 July 2011;
(i) the letters of consent as referred to in the paragraph headed “Experts” in this appendix; and
(j) this circular.

– VIII-9 –

AI assistant

Sunac China Holdings Limited — Proxy Solicitation & Information Statement 2012

50266_rns_2012-10-29_3e51f47e-7d58-412b-89f8-7502886aad2e.pdf

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

CONNECTED AND MAJOR TRANSACTIONS

FORMATION OF JOINT VENTURE

AND

ACQUISITION OF PROPERTY PROJECT COMPANIES

CONTENTS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

CONNECTED AND MAJOR TRANSACTIONS

FORMATION OF JOINT VENTURE

AND

ACQUISITION OF PROPERTY PROJECT COMPANIES

INTRODUCTION

THE ACQUISITION

FRAMEWORK AGREEMENT

Date

Parties

Subject Matter

Effective date of the Framework Agreement

Formation of the JV Company

Board composition and management of JV Company

Management structure of the JV Company

Basis for determining the Consideration

Payment of the Consideration

Acquisition of the Target Companies

LETTER FROM THE BOARD

Completion of the Acquisition

INFORMATION ON THE TARGET COMPANIES

LETTER FROM THE BOARD

LETTER FROM THE BOARD

REASONS FOR AND BENEFITS OF THE TRANSACTIONS

INFORMATION ON THE GROUP AND GREENTOWN CHINA

FINANCIAL EFFECTS OF THE TRANSACTIONS ON THE COMPANY

LETTER FROM THE BOARD

LISTING RULES IMPLICATIONS

Connected and Major Transactions

Written Approval Waiver

Independent Board Committee and Circular

RECOMMENDATION

ADDITIONAL INFORMATION

CONNECTED AND MAJOR TRANSACTIONS

FORMATION OF JOINT VENTURE

AND

ACQUISITION OF PROPERTY PROJECT COMPANIES

Independent Board Committee

CONNECTED AND MAJOR TRANSACTIONS FORMATION OF JOINT VENTURE AND ACQUISITION OF PROPERTY PROJECT COMPANIES

INTRODUCTION

BASIS OF OUR RECOMMENDATION

PRINCIPAL FACTOR AND REASONS CONSIDERED

1. Background of and reasons for entering into of the Transactions

1.1 Background and financial information of the Group

LETTER FROM QUAM CAPITAL

1.2 Reasons for entering into of the Transactions

LETTER FROM QUAM CAPITAL

2. Overview of property market in the PRC

3.1 Financial information of the Target Companies

JV Company

Financial position of Target Companies

JV Company

Target Company 9

4. Principal terms of the Framework Agreement

Date

Parties

Subject Matter

Effective date of the Framework Agreement

Formation of JV Company

Board composition and management of JV Company

Consideration

Analysis on the major terms of the Framework Agreement

The consideration

5. Financial effects of the Transactions

Net asset value

Earnings

Working capital and gearing

LETTER FROM QUAM CAPITAL

Sunac China Holdings Limited Proxy Solicitation & Information Statement 2012