CHINA VANKE CO., LTD. * 萬 科 企 業 股 份 有 限 公 司

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1 Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, 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 announcement. CHINA VANKE CO., LTD. * 萬 科 企 業 股 份 有 限 公 司 (a joint stock company incorporated in the People s Republic of China with limited liability) (Stock code: 2202) Announcement of Resolutions Approved at the Fifth Meeting of the Seventeenth Board of Directors This announcement is made pursuant to Rule 13.10B of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited. The written notice of the fifth meeting (the Meeting ) of the seventeenth board (the Board ) of directors (the Directors ) of China Vanke Co., Ltd. (the Company ) was sent to all the Directors of the Company by on 13 March The Meeting was held in the afternoon of 30 March 2015 at Vanke Center, No. 33 Huanmei Road, Dameisha, Yantian District, Shenzhen. The Meeting required the presence of 11 Directors, and 11 Directors and/or their authorised representatives were present at the Meeting. Independent Director Hua Sheng was not able to attend the Meeting in person due to business engagements and authorised Independent Director Zhang Liping to attend the Meeting and vote on his behalf at the Meeting. Director Sun Jianyi was not able to attend the Meeting in person due to business engagements and authorised Director Yu Liang to attend the Meeting and vote on his behalf at the Meeting. Director Wei Bin was not able to attend the Meeting in person due to business engagements and authorised Director Chen Ying to attend the Meeting and vote on his behalf at the Meeting.The convention of the Meeting was in compliance with the requirements of the relevant rules and the Company s Articles of Association. The following resolutions considered at the Meeting, the resolution regarding continued cooperation with China Resources was approved with 8 voted in favour, 0 voted against and 0 abstained, with Director Qiao Shibo, Director Wei Bin and Director Chen Ying, being connected directors, abstained from voting. Other resolutions were approved with 11 voted in favour, 0 voted against and 0 abstained. The resolutions approved at the Meeting include: 1

2 1. The resolution in relation to the appropriation and write-off of the provision for diminution in asset value for the year 2014 was considered and approved As at the end of 2014, the total amount of provisions for diminution in asset value of the Company amounted to RMB1,177,072,100, representing an increase of RMB779,630,900 from that at the end of Included in the aforesaid total amount of provisions was a provision for bad debts of RMB418,682,700, representing an increase of RMB15,885,300 from that at the end of 2013, and a provision for diminution in value of project inventory of RMB763,745,600, which were made during the year under review. The new provision for bad debts were bad debts provision made for accounts receivable and other receivables arising in the normal course of business. The provision for diminution in value of project inventory was made by the Company based on the prevailing market conditions and the actual sales performance of the projects, through carrying out diminution in value tests on all the development projects. Details on the provision for diminution in value of inventory by project are as follows: Project Longwan Garden, Wenzhou Sea and Cloud Terrace, Yantai Stratford, Tangshan The Paradiso, Fushun Southern Hill Metropolis, Urumqi Golden Paradise, Urumqi Provision made during the year under review Total 763,745, (Unit: RMB) Type 404,229, Completed, construction in 105,090, Completed, construction in, to be developed 83,068, Completed 87,170, Completed, construction in 55,207, Construction in 28,979, Construction in 2. The 2014 audited financial report was considered and approved 3. The special remarks on the deposit and use of proceeds raised from previous fund-raising exercises during 2014 was considered and approved 4. The internal control self-assessment report for the year 2014 was considered and approved 5. The proposal on profit appropriation and dividend distribution for the year 2014 was considered and approved Profit appropriation and dividend distribution are based on the Company s profit available for appropriation. Details on the Group s consolidated and the Company s profit available for appropriation for the year 2014 in accordance with the PRC Accounting Standards are as follows: 2

3 Profit after taxation available for appropriation Include: Net profit for 2014 Profit available for appropriation at the start of the year Allocation of dividend for 2013 The Group s consolidated (Unit: RMB) The Company 47,936,205, ,342,487, ,745,454, ,886,732, ,706,888, ,971,892, (4,516,137,256.79) (4,516,137,256.79) According to the relevant rules and requirements of the Company s Articles of Association and considering all kinds of shareholders interests and the Company s development needs, the Board will submit to the general meeting the following profit appropriation proposal for the year 2014: 1. to appropriate 10% of the net profit of the Company to statutory surplus reserve; 2. to appropriate 40% of the net profit of the Company to discretionary surplus reserve; 3. to appropriate 50% of the net profit of the Company and the unappropriated profit of the previous year for dividend distribution fund; The allocation of the profit available for appropriation for the year 2014 is as follows: (Unit: RMB) As a As a percentage of The Company percentage of the Group s the Company s consolidated net profit for the year net profit for the year Net profit for ,886,732, % 75.49% Transfer to statutory surplus reserve 1,188,673, % 7.55% Transfer to discretionary surplus reserve 4,754,692, % 30.20% Transfer to dividend distribution fund for ,943,366, % 37.75% Profit available for appropriation at the beginning 455,755, of the year Distribution of cash dividend for 2014* 5,518,753, % 35.05% Retained profit for appropriation for the following 880,367, financial year *Calculated based on the total number of shares of the Company as at the end of 2014 Dividend distribution proposal: Based on the total share capital as at the record date for dividend distribution, a cash dividend of RMB5.0 (including tax) will be distributed for every 10 existing shares held. 3

4 Based on the Company s total number of shares of 11,037,507,242 at the end of 2014, the total amount of cash dividends for distribution for 2014 will be RMB5,518,753,621.00, representing 35.05% of the Group s consolidated net profit for The independent Directors unanimously were of the view that the preparation of the Company s proposals on the profit appropriation and dividend distribution for the year 2014 was in compliance with the Company s Articles of Association and the relevant requirements, and took into account the interests of various types of shareholders. The independent Directors unanimously agreed to submit the relevant proposals to the general meeting for consideration. 6. The resolution regarding the reappointment of certified public accountants for the year 2015 was considered and approved The Board agreed to submit the following resolution to the 2014 annual general meeting for consideration: (1) to continue to appoint KPMG Huazhen Certified Public Accountants to audit the 2015 financial statements of the Company prepared in accordance with the PRC Accounting Standards, and prepare an internal control audit report in accordance with the requirements of the PRC regulatory bodies., (2) to appoint KPMG Certified Public Accountants to audit the Company s 2015 financial statements prepared in accordance with the International Financial Reporting Standards. The remuneration for the auditing services will be RMB10.50 million, which will not cover auditing services such as auditing and financing rating support for subsidiaries and associates. The Company will not be responsible for travelling expenses or any other expenses. The independent Directors unanimously agreed on the relevant matters. 7. The 2014 annual report and its summary, and the 2014 annual results announcement were considered and approved 8. The corporate social responsibility report for the year 2014 was considered and approved 9. The resolution regarding continued cooperation with China Resources was considered and approved The Board agreed to propose to the shareholders of the general meeting to consider authorising the Board to determine, within the scope as set out below, the continued cooperation with China Resources (Holdings) Co., Limited and its connected companies (collectively China Resources ), including entering into loan agreements with China Resources Bank of Zhuhai Co., Ltd., using the trust funds under China Resources SZITIC Trust Co., Ltd. and the funds under Harvest Capital Partners Limited, joint investment with China Resources SZITIC Trust Co., Ltd. and Harvest Capital Partners Limited, and joint project development with China Resources Land Limited and its connected companies. The aggregate amount of the loans, capital from the funds and joint investment within a year shall not be more than RMB17.6 billion (i.e. not more than 20% of the Company s audited net assets value as at the end of 2014). The terms of the said cooperation shall be based on the principles of fair trade and normal commercial terms, which include: 1. The cost of capital of the loan obtained from China Resources Bank of Zhuhai Co., 4

5 Ltd. shall not be higher than that under the terms of cooperation with other commercial banks. 2. The project company jointly established with China Resources SZITIC Trust Co., Ltd. or Harvest Capital Partners Limited shall be an equity joint venture, with each party holding the same type of shares carrying the same voting rights, while gains and risks shall be shared between the parties. 3. The cost of debt financing from China Resources SZITIC Trust Co., Ltd. or Harvest Capital Partners Limited shall be determined with reference to the prevailing market price and the characteristics of the projects and the terms of such financing shall not be worse than the terms from an independent third party. Regarding joint project development, the conditions for cooperation are set out as follows: 1. Scope of cooperation: including joint participation in bidding for projects for development at open auctions, the Company s participation in the development of projects acquired by China Resources, and China Resources participation in the development of projects acquired by the Company. 2. Principles for cooperation: for joint participation in bidding for projects, both parties will participate in and finance a bid in proportion to an agreed percentage share of equity. The risks and interests shall be shared between both parties. In the event that the Company participates in the development of projects acquired by China Resources or China Resources participates in the development of projects acquired by the Company, the market price of the projects will be assessed by a third party appraisal company before the commencement of cooperation. Both parties will cooperate based on the market price. 3. Type of management: the project company is solely responsible for the overall operation management of the project and has the authority to make the final decision with respect to operation management. Both parties will appoint management personnel to the project company according to their expertise. 4. Special requirement: all the projects proposed for cooperation shall be submitted to the Board for consideration. When considering the relevant resolution, approvals of over two-thirds of all of the Directors (except for those directors connected to China Resources) and over two-thirds of all of the independent Directors are required. If the cooperation is not approved, the Company shall not be held responsible or liable for compensation for any loss or damage suffered by China Resources. The granted authority is valid from the date on which the resolution is approved by shareholders at the general meeting until the conclusion of the 2016 annual general meeting. The independent Directors of the Company had given a written prior approval before the Board s consideration of the said resolution, and agreed to submit the matters in relation to the cooperation to the Board for consideration. All the independent Directors unanimously are of the view that the continued cooperation on financing and cooperation on project development between the Company and China Resources will enable the Company to better utilise its shareholders resources and broaden its financing channels, which will facilitate the Company s expansion and enhance return on assets. The matters in relation to the cooperation and the related decision making process are in compliance with the relevant requirements of the Company Law, the Securities Law, the 5

6 Rules Governing Listing of Stocks on the Shenzhen Stock Exchange and Company s Articles of Association. The cooperation is in the interests of the Company and its shareholders as a whole, and does not prejudice the interests of the Company and other shareholders, especially the small and medium shareholders and non-connected shareholders. 10. The resolution in relation to grant of general mandate to issue bonds was considered and approved for submission to the general meeting for consideration The Board resolved to propose to the general meeting to consider to authorize the Company to issue bonds within the limit of RMB15 billion, details of which are as follows: 1. Size of issue: not more than RMB15 billion 2. Type of bonds: including but not limited to corporate bonds, medium-term notes, perpetual bonds, short-term commercial papers, super short-term commercial papers and asset-backed notes in domestic and overseas markets, or a combination of the aforesaid products 3. Time of issue: can be in one batch or in batches or certain types of bonds 4. Issue method: to authorize the Board (or its delegate) to determine in accordance with market conditions at the time of issue 5. Coupon rate: to authorize the Board (or its delegate) to determine in accordance with market conditions at the time of issue using reasonable and legitimate methods 6. Duration: the maturity period for ordinary bonds shall not be more than 10 years (including 10 years); to propose to the general meeting to authorize the Board to determine the maturity period for perpetual bonds or bonds similar to perpetual bonds 7. Use of proceeds: proceeds to be used to meet the Company s production and operation requirements, to adjust debt structure, to replenish working capital and/or for project investment A resolution will be proposed at the general meeting to authorize the Board and/or its delegate to deal with matters in relation to the above-mentioned at sole discretion ( the General Mandate ), details of which are as follows: 1. to authorise the Board and/or its delegate to determine the specific type of bonds to be issued by the Company within the limit of issuance, including but not limited to corporate bonds, medium-term notes, short-term commercial papers, super short-term commercial papers and asset-backed notes in domestic and overseas markets; 2. to authorise the Board and/or its delegate to determine the use of proceeds based on the actual needs of the Company within the aforesaid scope; 3. to authorise the Board and/or its delegate to determine, based on the Company's production and operation, capital expenditure requirements as well as market conditions, the specific terms, conditions and all relevant matters in connection with each bonds issuance, including but not limited to the principal, coupon rate, duration, time of issue, targeted investores, issue method, whether in batches and the number of batches, whether to set out terms for sell-back and the terms for redemption, issuing and placing arrangement; 4. to authorise the Board and/or its delegate, according to the actual needs of the issuance of bonds, to engage agencies, including but not limited to lead underwriter, rating agency, law firm, bond custodian; to negotiate, sign and amend all relevant contracts and agreements; to sign all necessary legal documents relating to each bond issuance; and to follow all necessary procedures, such as application, registration and 6

7 filing, as well as trading in respect of each bond issuance with the relevant regulatory authorities on behalf of the Company; 5. to authorise the Board and/or its delegate to deal with other matters in relation to the issuance of bonds which are not mentioned above; 6. to authorise the Board delegating Mr. Yu Liang, the director and president of the Company, or his authorized representative(s), within the scope of the General Mandate, to determine specific matters relating to such issuance and to deal with specific matters relating to issuance of bonds at sole discretion; 7. the General Mandate set out in this resolution shall remain effective within 24 months commencing from the date on which this resolution is approved by shareholders at the general meeting. If the Board and/or its delegate is determined to carry out the issuance within the effective period of the General Mandate and the Company has obtained the approval, permission or registration of the issuance from the relevant regulatory authorities during the effective period of the General Mandate, the Company is allowed to complete the issuance so far as such approval, permission or registration remains valid. 11. The resolution regarding the convention of the 2014 annual general meeting was considered and approved A separate announcement will be made on the notice of the 2014 annual general meeting. 12. The resolution regarding the amendments on the details of project co-investment scheme was considered and approved To promote the optimization of regional investment planning, increase employees motivation, raise the level of participation in projects, create greater value for the Company and its shareholders, the Company expanded the range of staff that are required to join the co-investment scheme, and arrange for additional co-investment for assignment in projects for different staff accordingly. Based on the original plan, the Company has also increased the upper limit for additional co-investment for assignment. Affected by the aforementioned, the total amount of the additional co-investment for assignment arranged by the Company increased from no more than 5% of the peak capital shortfall of the project to no more than 8% of the peak capital shortfall of the project. Shenzhen, the PRC, 30 March 2015 By order of the Board China Vanke Co., Ltd. * Tan Huajie Company Secretary As at the date of this announcement, the executive Directors are Mr. WANG Shi, Mr. YU Liang and Mr. WANG Wenjin; the non-executive Directors are Mr. QIAO Shibo, Mr. SUN Jianyi, Mr. WEI Bin and Mr. CHEN Ying; and the independent non-executive Directors are Mr. ZHANG Liping, Mr. HUA Sheng, Ms. LAW Elizabeth and Mr. HAI Wen. *for identification purpose only 7