Stock Code: 000505, 200505 Stock Abbr.: *STZJ, *STZJB Announcement No.: 2013-021
HaiNan Pearl River Holdings Co., Ltd.
Abstract of the 2013 Semi-annual Report
1. Important reminders
（1）
This abstract is based on the full text of the semi-annual report. For more details, investors are suggested to
read the full text disclosed at the same time with this abstract on http://www.cninfo.com.cn, the website of
Shenzhen Stock Exchange or any other website designated by CSRC.
This report is prepared in both Chinese and English. Should there be any discrepancy between the two
versions, the Chinese version shall prevail.
（2）Company profile
Stock abbreviation *STZJ, *STZJB Stock code 000505, 200505
Stock exchange listed with Shenzhen Stock Exchange
For contact Company Secretary Securities Affairs Representative
Name Yu Cuihong Yu Cuihong
Tel. 0898-68583723 0898-68583723
Fax 0898—68581026 0898—68581026
E-mail hnpearlriver@21cn.net hnpearlriver@21cn.net
2. Financial highlights and change of shareholders
（1）Financial highlights
Does the Company adjust retrospectively or restate accounting data of previous years due to change of the
accounting policy or correction of any accounting error?
□ Yes √ No
Reporting period Same period of last year YoY +/-（％）
Operating revenues (RMB Yuan) 107,223,021.13 108,341,956.20 -1.03%
Net profit attributable to
shareholders of the Company (RMB -64,455,008.65 -37,734,798.44 -70.81%
Yuan)
Net profit attributable to
shareholders of the Company after
-72,879,625.27 -59,037,643.78 -23.45%
extraordinary gains and losses (RMB
Yuan)
Net cash flows from operating
-43,861,109.19 -35,592,424.56 -23.23%
activities (RMB Yuan)
Basic EPS (RMB Yuan/share) -0.15 -0.09 -70.81%
Diluted EPS (RMB Yuan/share) -0.15 -0.09 -70.81%
Weighted average ROE (%) -33.76% -9.93% -23.83%
As at the end of the As at the end of last
YoY +/-（％）
reporting period year
Total assets (RMB Yuan) 1,398,816,127.89 1,424,764,273.52 -1.82%
Net assets attributable to
shareholders of the Company (RMB 144,215,702.94 237,625,634.44 -39.31%
Yuan)
1
（2） Shareholdings of the top 10 shareholders
Total number of
shareholders at the end of 40,363
the reporting period
Shareholdings of the top 10 shareholders
Shareholdin Total shares Pledged or frozen shares
Name of Nature of Number of restricted shares
g percentage held at the Status of Number of
shareholder shareholder held
(%) period-end shares shares
Beijing
Wanfa Real
State-owned
Estate 26.36% 112,479,478 Pledged 20,000,000
corporation
Development
Co., Ltd.
Domestic
Zhang
natural 0.46% 1,949,250
Xiaoxia
person
Domestic
Chen
natural 0.43% 1,827,900
Mingwei
person
Domestic
Hu Zhengxiu natural 0.37% 1,600,000
person
Domestic
Wang Defu natural 0.36% 1,540,100
person
Domestic
Ou Lei natural 0.35% 1,500,000
person
Beijing CICC Domestic
Xinbo Asset non-state-ow
0.34% 1,464,419
Management ned
Center, LLP corporation
Domestic
Liang Bijun natural 0.33% 1,408,463
person
Domestic
Nanhua
non-state-ow
Finance Co., 0.3% 1,299,500 1,299,500
ned
Ltd.
corporation
Domestic
Sheng Fubo natural 0.28% 1,191,895
person
Among shareholders above, there exists no related-party relationship between the
Explanation on associated
principal shareholder and other shareholders of the Company. Nor they are parties
relationship or/and persons
with concerted action as prescribed in the Information Disclosure Administrative
acting in concert among the
Methods for Changes in Shareholding of Shareholders of Listed Companies. And it
above-mentioned
is unknown whether there is related-party relationship among other shareholders
shareholders:
and whether they are prescribed parties with concerted action.
The Company’s shareholder Wang Defu held 0 shares via the common securities
Shareholders taking part in
account and 1,540,100 shares via the client credit trading guarantee securities
margin financing and
account of China Minzu Securities Co., Ltd., so he actually held 1,540,100 shares
securities lending (if any)
in total.
2
（3）Change of the controlling shareholder or the actual controller
Change of the controlling shareholder in the reporting period
□ Applicable √ Inapplicable
Change of the actual controller in the reporting period
□ Applicable √ Inapplicable
3. Discussion and analysis by the management
1. The key task for this year is the Phase III development of the Wuhan Meilin Qingcheng Project. So far,
the reply approving to initiate the project has been obtained. A detailed geological exploration, the
relocation & clean-up, the trial of foundation piles and so on have been completed. According to the
planning documents (WGDZ (2003) No. 271 and WTJQZ [2003] No. 073), as a way to expand the project
land, the Company will transfer the 1.33-hectare land adjacent to the development land of Xudong Village
to the undertaker of the “Urban Village Transformation” Project of Xudong Village so as to get a
development land parcel of almost the same area on the east of the development land of the Phase III,
which has been approved by the relevant government body. Construction of the Phase III will start as soon
as the land transfer and expansion formalities are completed.
2. Progress of the Shijiazhuang Luquan new countryside construction project:
In the first half of the year, evaluation of the enterprises to be relocated from the Land Parcel No. 1 was
completed, marking the steady progressing of the relocation. The planning was submitted for approval and
the municipal plan was analyzed. The planning was deepened and the final plan for house types and
elevations was confirmed, marking the basic accomplishment of the preliminary design. Meanwhile, the
construction drawing was partially begun. When the funds arrive, the Company will immediately start
making compensations and collecting back land so as to run ahead of the schedule in the second half of the
year.
3. About the Mulin Town special railway and coal wholesale market construction project:
The government is regulating the coal industry and shutting down some high-pollution enterprises. And the
Company has been waiting for the governmental department to grant a coal operation license. The relevant
project and production line construction thus cannot proceed as scheduled. The land where the project is
located is temporarily put aside. According to the latest policy, the government has stopped granting coal
operation licenses. Since this June, the Company and its partner Zhonghe Investment Co., Ltd. have
officially initiated the project. Meanwhile, the Company has entrusted its partner to conduct coal trading
with some major customers, which will help accumulate experience and expand marketing channels for the
subsequent independent operation and at the same time will help achieve some investment gains in this
stage.
4. About the Hubei Yunxi Iron Mine Project: A detailed investigation has been carried out on the Dujiawan
Iron Mine and the relevant files have been kept. Currently, the Company is working on the specific plan for
mining and mine construction. The detailed geological investigation into the Zhaojiayuan Mine has almost
come to an end. Relevant equipment has been procured and all the production lines have been installed and
debugged. The mine is now capable of producing 0.4 million tons of high-purity iron ore per year. In the
first half of the year, partial mining and high-purity iron ore production started. However, the original
power supply of the mine cannot meet the current need from mining and production equipment, so the
Company has to alter and expand the power supply system. Meanwhile, relocation of over 80 households in
the mine lags behind the schedule for the reason of compensation. Therefore, the Zhaojiayuan Mine fails to
reach the expected mining scale, with a considerable decrease of the expected production volume.
Currently, the Company is working on power supply expansion, relocation compensation, etc, which are
expected to complete in this October. By that time, mass mining and production can begin.
5. For the first half of the year, HaiNan Pearl River Property & Hotel Management Co., Ltd. achieved
operating revenues of RMB 65.5060 million, up RMB 14.5390 from the same period of last year; bore
operating costs of RMB 66.5179 million; paid a business tax of RMB 4.6138 million and made a loss about
RMB 1.20 million. The loss was mainly because the labor cost went up RMB 7.1602 million from a year
earlier.
6. The hotel and tourist service business grew steadily, generating a business income of RMB 34.76 million,
representing a year-on-year increase. Days Hotel & Suites Sanya Resort Management Co., Ltd. continued
to enhance internal management and adopted multiple marketing methods. For the first half of the year, it
3
achieved operating revenues of RMB 21.96 million and net profit of RMB 6.46 million (depreciation
excluded).
Mudanjiang Pearl River Wanjia Travel Investment and Development Group Co., Ltd. achieved operating
revenues of RMB 12.8088 million for the first half of the year. After the last winter, it conducted various
marketing activities for the Snow Village in the summer as a key task for this year and designed many
travel themes. Meanwhile, it enhanced targeted promotion, provided various services to meet various travel
needs of clients and promoted the recognition of the Snow Village in summer.
In the second half of the year, it will enhance the combination of tourist products of the Snow Village, carry
out tourism management and tourist spot protection according to the new Tourism Law, improve promotion
and management of the Snow Village and do a good job in the winter.
4. Matters related to financial reporting
(1) Explain change of the accounting policy, accounting estimate and measurement methods as
compared with the financial reporting of last year
N/A
(2) Explain retrospective restatement due to correction of significant accounting errors in the
reporting period
N/A
(3) Explain change of the consolidation scope as compared with the financial reporting of last year
N/A
(4) Explanation of the Board of Directors and the Supervisory Committee concerning the
“non-standard audit report” issued by the CPAs firm for the reporting period
N/A
4
Hainan Pearl River Holding Company Limited
Consolidated Balance Sheet
30 Jun 2013
Expressed in Renminbi
Items Notes 30-Jun-13 31-Dec-12
Current assets:
Monetary funds V.1 55,812,269.33 65,762,871.33
Financial assets held for trading
Notes receivable
Accounts receivable V.2 17,279,796.94 9,889,336.96
Prepayments V.3 163,972,326.82 148,283,887.61
Interest receivable
Dividend receivable V.4 3,235,015.00 260,015.00
Other receivables V.5 319,805,498.42 314,281,649.69
Inventories V.6 111,776,232.18 109,749,172.81
Non-current asset due within 1 year
Other current assets V.7 3,000,000.00
Total current assets 674,881,138.69 648,226,933.40
Non-current assets:
Available-for-sale financial assets V.8 235,009,797.10 273,616,360.90
Held-to-maturity securities
Long-term receivables
Long-term equity investments V.10 50,251,220.27 50,758,716.34
Investment real estates V.11 24,563,708.95 25,308,707.14
Fixed assets V.12 322,743,377.86 334,321,547.26
Construction in progress V.13 38,242,894.28 34,908,625.06
Engineering material V.14 606,206.60 606,206.60
Disposal of fixed assets
Bearer biological assets
Oil and gas assets
Intangible assets V.15 31,196,752.06 31,636,550.86
Expense on research and development
Goodwill
Long-term prepayments V.16 21,321,032.08 25,380,625.96
Deferred income tax assets
Other non-current asset
Total non-current assets 723,934,989.20 776,537,340.12
Total assets 1,398,816,127.89 1,424,764,273.52
Corporate representative:Zheng Qing Chief Accountant:Chen Binglian Accounting Supervisor: Yang Daoliang
5
Hainan Pearl River Holding Company Limited
Consolidated Balance Sheet
30 Jun 2013
Expressed in Renminbi
Items Notes 30-Jun-13 31-Dec-12
Current liabilities:
Short-term loans V.20 1,000,000.00 210,000,000.00
Financial liabilities held for trading
Notes payable
Accounts payable V.21 20,182,697.91 20,503,123.52
Accounts received in advance V.22 17,343,165.61 19,033,810.90
Accrued payroll V.23 8,098,733.59 9,181,755.84
Taxes payable V.24 -1,279,122.86 2,205,732.91
Interest payable V.25 115,390,264.64 112,552,231.11
Dividend payable V.26 3,213,302.88 3,213,302.88
Other payables V.27 676,950,850.28 379,871,030.04
Non-current liabilities due within 1 year V.28 31,000,000.00 28,000,000.00
Other current liabilities
Total current liabilities 871,899,892.05 784,560,987.20
Non-current liabilities:
Long-term borrowings V.29 330,000,000.00 341,000,000.00
Bonds payable
Long-term payables
Special payables
Accrued liabilities
Deferred income tax liabilities V.17 37,949,548.40 47,601,189.35
Other non-current liabilities
Total non-current liabilities 367,949,548.40 388,601,189.35
Total liabilities 1,239,849,440.45 1,173,162,176.55
Owner's equity:
Share capital V.30 426,745,404.00 426,745,404.00
Capital surplus V.31 492,991,234.32 521,946,157.17
Less:treasury stock
Surplus reserves V.32 109,487,064.39 109,487,064.39
Undistributed profits V.33 -885,007,999.77 -820,552,991.12
Foreign currency translation differences
Total owner's equity attributable to parent
144,215,702.94 237,625,634.44
company
Minority interests 14,750,984.50 13,976,462.53
Total owner's equity 158,966,687.44 251,602,096.97
Total liabilities and owner's equity 1,398,816,127.89 1,424,764,273.52
Corporate representative:Zheng Qing Chief Accountant:Chen Binglian Accounting Supervisor: Yang Daoliang
6
Hainan Pearl River Holding Company Limited
Balance Sheet
30 Jun 2013
Expressed in Renminbi
Items Notes 30-Jun-13 31-Dec-12
Current assets:
Monetary funds 959,747.89 2,641,297.45
Financial assets held for trading
Notes receivable
Accounts receivable XI.1 3,075,649.21 2,341,351.09
Prepayments 50,718,379.00 50,196,666.00
Interest receivable
Dividend receivable 3,235,015.00 260,015.00
Other receivables XI.2 583,095,477.09 557,322,758.74
Inventories 4,824,035.45 4,824,035.45
Non-current asset due within 1 year
Other current assets
Total current assets 645,908,303.64 617,586,123.73
Non-current assets:
Available-for-sale financial assets 235,009,797.10 273,616,360.90
Held-to-maturity securities
Long-term receivables
Long-term equity investments XI.3 299,607,675.57 300,108,192.64
Investment real estates 7,442,195.63 7,593,413.93
Fixed assets 16,595,572.64 17,446,366.12
Construction in progress
Engineering material
Disposal of fixed assets
Bearer biological assets
Oil and gas assets
Intangible assets 1,529,208.78 1,553,040.60
Expense on research and development
Goodwill
Long-term prepayments 12,431,856.62 16,324,363.64
Deferred income tax assets
Other non-current asset
Total non-current assets 572,616,306.34 616,641,737.83
Total assets 1,218,524,609.98 1,234,227,861.56
Corporate representative:Zheng Qing Chief Accountant:Chen Binglian Accounting Supervisor: Yang Daoliang
7
Hainan Pearl River Holding Company Limited
Balance Sheet
30 Jun 2013
Expressed in Renminbi
Items Notes 30-Jun-13 31-Dec-12
Current liabilities:
Short-term loans 1,000,000.00 210,000,000.00
Financial liabilities held for trading
Notes payable
Accounts payable 2,482,949.70 2,482,949.70
Accounts received in advance 190,080.00 59,400.00
Accrued payroll 464,313.88 546,010.23
Taxes payable -1,548,915.25 -1,615,110.81
Interest payable 82,842,102.73 81,573,212.53
Dividend payable 3,213,302.88 3,213,302.88
Other payables 538,364,645.71 295,396,790.14
Non-current liabilities due within 1 year
Other current liabilities
Total current liabilities 627,008,479.65 591,656,554.67
Non-current liabilities:
Long-term borrowings 193,000,000.00 178,000,000.00
Bonds payable
Long-term payables
Special payables
Accrued liabilities
Deferred income tax liabilities 37,151,157.63 46,802,798.58
Other non-current liabilities
Total non-current liabilities 230,151,157.63 224,802,798.58
Total liabilities 857,159,637.28 816,459,353.25
Owner's equity:
Share capital 426,745,404.00 426,745,404.00
Capital surplus 496,007,573.86 524,962,496.71
Less:treasury stock
Surplus reserves 109,487,064.39 109,487,064.39
Undistributed profits -670,875,069.55 -643,426,456.79
Total owner's equity 361,364,972.70 417,768,508.31
Total liabilities and owner's equity 1,218,524,609.98 1,234,227,861.56
Corporate representative:Zheng Qing Chief Accountant:Chen Binglian Accounting Supervisor: Yang Daoliang
8
Hainan Pearl River Holding Company Limited
Consolidated Income Statement
Year ended 30 June 2013
Expressed in Renminbi
Items Notes Jan.-Jun. 2013 Jan.-Jun. 2012
I.Total operating income 107,223,021.13 108,341,956.20
Including：operating income V.34 107,223,021.13 108,341,956.20
II.Total operating cost 175,386,515.27 161,706,751.41
Including：operating cost V.34 77,839,912.45 74,969,155.92
Operating taxes and extras V.35 6,360,287.19 8,907,927.55
Sales expenses V.36 4,606,945.20 4,879,658.11
General and administrative expenses V.37 46,741,079.54 53,000,592.30
Financial expenses V.38 40,873,236.02 29,066,735.26
Loss of devaluation of assets V.40 -1,034,945.13 -9,117,317.73
Add:Changing income of fair value
Investment income V.39 2,556,516.93 18,113,290.90
Including: investment income on affiliated company and
-507,496.07 -429,464.28
joint venture
III.Operating profit -65,606,977.21 -35,251,504.31
Add: Non-operating income V.41 73,275.60 72,889.50
Less: Non-operating expenses V.42 71,307.30 126,353.94
Including: disposal loss of non-current asset 15,533.81
IV.Total profit -65,605,008.91 -35,304,968.75
Less: income tax V.43 175,477.77 1,777,028.96
V.Net profit -65,780,486.68 -37,081,997.71
Net profit attributable to parent company's owner -64,455,008.65 -37,734,798.44
Profit and loss of minority interests -1,325,478.03 652,800.73
VI.Earnings per share
i.Basic earnings per share V.44 -0.15 -0.09
ii.Diluted earnings per share V.44 -0.15 -0.09
VII.Other comprehensive income V.45 -28,954,922.85 52,031,961.59
VIII.Total comprehensive income -94,735,409.53 14,949,963.88
Including: Total comprehensive income attributed to the
-93,409,931.50 14,297,163.15
owners of parent company
Total comprehensive income attributed to miniority interests -1,325,478.03 652,800.73
Corporate representative:Zheng Qing Chief Accountant:Chen Binglian Accounting Supervisor: Yang Daoliang
9
Hainan Pearl River Holding Company Limited
Income Statement
Year ended 30 June 2013
Expressed in Renminbi
Items Notes Jan.-Jun. 2013 Jan.-Jun. 2012
I.Total operating income XI.4 581,744.40 579,338.20
Less:Operating costs XI.4 177,796.80 177,796.80
Operating taxes and extras 32,577.68 32,330.94
Sales expenses 1,267.00
General and administrative expenses 11,022,129.41 10,762,024.79
Financial expenses 29,584,045.68 16,037,614.63
Loss of devaluation of assets -10,228,962.52 -3,276,546.96
Add:Changing income of fair value
Investment income XI.5 2,563,495.93 110,513,290.90
Including: investment income on affiliated company and joint
-500,517.07 -429,464.28
venture
II.Operating profit -27,442,346.72 87,358,141.90
Add: Non-operating income 0.19
Less: Non-operating expenses 6,266.23 15.06
Including: disposal loss of non-current asset
III.Total profit -27,448,612.76 87,358,126.84
Less: income tax
IV.Net profit -27,448,612.76 87,358,126.84
V.Earnings per share
i.Basic earnings per share
ii.Diluted earnings per share
VI.Other comprehensive income -28,954,922.85 52,031,961.59
VII.Totalcomprehensive income -56,403,535.61 139,390,088.43
Corporate representative:Zheng Qing Chief Accountant:Chen Binglian Accounting Supervisor: Yang Daoliang
10
Hainan Pearl River Holding Company Limited
Consolidated Cash Flow Statement
Year ended 30 June 2013
Expressed in Renminbi
Items Notes Jan.-Jun. 2013 Jan.-Jun. 2012
I.Cash flows from operating activities:
Cash received from sales of goods or rendering of services 101,651,207.81 90,839,597.75
Refunds of taxes
Cash received relating to other operating activities V.46(1) 12,470,630.71 11,113,568.62
Subtotal of cash inflows 114,121,838.52
101,953,166.37
Cash paid for goods and services 39,030,611.99 31,480,717.55
Cash paid to and on behalf of employees
60,918,149.26 52,599,524.79
Payments of all types of taxes 12,428,181.55 12,674,520.81
Cash paid relating to other operating activities V.46(2)
45,606,004.91 40,790,827.78
Subtotal of cash outflows 157,982,947.71 137,545,590.93
Net cash flows from operating activities V.47(1) -43,861,109.19
-35,592,424.56
II.Cash flows from investing activities:
Cash received from return of investments
26,000,000.00 43,000,000.00
Cash received from return on investments 89,013.00 -
Net cash received from the sale of fixed assets, intangible assets and other
long-term assets 412,838.50 21,469,320.27
Net cash received from selling subsidiary company and joint venture
- -
Cash received relating to other investing activities V.46(3) 5,647,661.11 5,200,000.00
Subtotal of cash inflows
32,149,512.61 69,669,320.27
Cash paid to acquire fixed assets, intangible assets and other long-term
assets 12,850,561.55 79,987,813.71
Cash paid to acquire investments
33,000,000.00 3,000,000.00
Net cash paid to purchase subsidiary company and joint venture
Cash paid relating to other investing activities V.46(4)
Subtotal of cash outflows
45,850,561.55 82,987,813.71
Net cash flows from investing activities -13,701,048.94 -13,318,493.44
III.Cash flows from financing activities:
Cash received from investments by others 2,100,000.00
Cash received from borrowings 338,000,000.00
357,600,000.00
Cash received relating to other financing activities 1,000,000.00 -
Subtotal of cash inflows 341,100,000.00
357,600,000.00
Cash repayments of amounts borrowed 250,000,000.00 268,000,000.00
Cash paid for distribution of dividends or profits and for interest expenses
30,280,968.25 24,762,536.25
Cash paid relating to other financing activities V.46(5) 13,207,475.62 4,359,000.00
Subtotal of cash outflows 293,488,443.87
297,121,536.25
Net cash flows from financing activities 47,611,556.13 60,478,463.75
IV.Effect of foreign exchange rate changes on cash
V.Net increase in cash and cash equivalents -9,950,602.00 11,567,545.75
Add:balance of cash and cash equivalents at the beginning of the year 65,762,871.33 52,507,843.73
VI.Balance of cash and cash equivalents at the end of the year 55,812,269.33 64,075,389.48
Corporate representative:Zheng Qing Chief Accountant:Chen Binglian Accounting Supervisor: Yang Daoliang
11
Hainan Pearl River Holding Company Limited
Cash Flow Statement
Year ended 30 June 2013
Expressed in Renminbi
Items Notes Jan.-Jun. 2013 Jan.-Jun. 2012
I.Cash flows from operating activities:
Cash received from sales of goods or rendering of services 552,850.00 -
Refunds of taxes
Cash received relating to other operating activities 54,149,190.80 6,150,211.50
Subtotal of cash inflows
54,702,040.80 6,150,211.50
Cash paid for goods and services
Cash paid to and on behalf of employees 2,897,272.40 2,432,405.76
Payments of all types of taxes 728,405.54 291,624.04
Cash paid relating to other operating activities
9,026,338.42 7,370,972.46
Subtotal of cash outflows 12,652,016.36 10,095,002.26
Net cash flows from operating activities XI.6
42,050,024.44 -3,944,790.76
II.Cash flows from investing activities:
Cash received from return of investments 26,000,000.00 43,000,000.00
Cash received from return on investments 89,013.00 -
Net cash received from the sale of fixed assets, intangible assets and other
long-term assets - 20,932,029.27
Net cash received from selling subsidiary company and joint venture - -
Cash received relating to other investing activities 5,647,661.11 5,200,000.00
Subtotal of cash inflows 31,736,674.11 69,132,029.27
Cash paid to acquire fixed assets, intangible assets and other long-term
assets 34,007.00 83,157.00
Cash paid to acquire investments 90,499,500.00 57,250,000.00
Net cash paid to purchase subsidiary company and joint venture
Cash paid relating to other investing activities
Subtotal of cash outflows
90,533,507.00 57,333,157.00
Net cash flows from investing activities -58,796,832.89 11,798,872.27
III.Cash flows from financing activities:
Cash received from investments by others
Cash received from borrowings 286,000,000.00 241,000,000.00
Cash received relating to other financing activities
Subtotal of cash inflows 286,000,000.00 241,000,000.00
Cash repayments of amounts borrowed 238,000,000.00 220,000,000.00
Cash paid for distribution of dividends or profits and for interest expenses 23,427,265.49 16,253,321.92
Cash paid relating to other financing activities 9,507,475.62 859,000.00
Subtotal of cash outflows
270,934,741.11 237,112,321.92
Net cash flows from financing activities 15,065,258.89 3,887,678.08
IV.Effect of foreign exchange rate changes on cash
V.Net increase in cash and cash equivalents -1,681,549.56 11,741,759.59
Add:balance of cash and cash equivalents at the beginning of the year 2,641,297.45 515,955.59
VI.Balance of cash and cash equivalents at the end of the year 959,747.89 12,257,715.18
Corporate representative:Zheng Qing Chief Accountant:Chen Binglian Accounting Supervisor: Yang Daoliang
12
Hainan Pearl River Holding Company Limited
Consolidated Statement of Changes in Equity
Year ended 30 June 2013
Expressed in Renminbi
30 June 2013
Items Total owner's equity attributable to parent company
Minority Total owner's
Share capital Capital reserves Less:treasury Surplus Undistributed Others interests equity
stock reserves profits
I.Amount at the end of last year 426,745,404.00 521,946,157.17 109,487,064.39 -820,552,991.12 13,976,462.53 251,602,096.97
1.Amount because the change of accounting policy
2.Amount because correction of accounting error
II.Amount at the beginning of this year 426,745,404.00 521,946,157.17 109,487,064.39 -820,552,991.12 13,976,462.53 251,602,096.97
III.Increment and decrement of this year -28,954,922.85 -64,455,008.65 774,521.97 -92,635,409.53
1.Net profit -64,455,008.65 -1,325,478.03 -65,780,486.68
2.Profit and loss through owner's equity directly -28,954,922.85 -28,954,922.85
(1) Net changing amount of fair value of available-for-sale financial assets -28,954,922.85 -28,954,922.85
(2) Influence of other owner's equity change of invested enterprise under
equity method
(3) Relating income tax effect through owner's equity items
(4) Other
Subtotal of above 1 and 2 -28,954,922.85 -64,455,008.65 -1,325,478.03 -94,735,409.53
3.Owners invest or reduce capital 2,100,000.00 2,100,000.00
(1) Owners invest capital 2,100,000.00 2,100,000.00
(2) Share-based payment recorded into owner's equity
(3) Other
4. Profit distribution
(1) Draw surplus reserves
(2) Draw common risk provision
(3) Distribute to owners (shareholders)
(4) Other
5. Inner rotation within owner's equity
(1) Capital reserves transfer to share capital
(2) Surplus reserves transfer to share capital
(3) Surplus reserves offset loss
(4) Other
IV.Amount at the end of this year 426,745,404.00 492,991,234.32 109,487,064.39 -885,007,999.77 14,750,984.50 158,966,687.44
Corporate representative: Zheng Qing Chief Accountant: Chen Binglian Accounting Supervisor: Yang Daoliang
13
Hainan Pearl River Holding Company Limited
Consolidated Statement of Changes in Equity
Year ended 30 June 2013
Expressed in Renminbi
30 June 2012
Items Total owner's equity attributable to parent company Minority Total owner's
interests equity
Share capital Capital reserves Less:treasury Surplus Undistributed Others
stock reserves profits
I.Amount at the end of last year 426,745,404.00 530,451,655.97 109,487,064.39 -693,679,376.16 26,674,626.16 399,679,374.36
1.Amount because the change of accounting policy
2.Amount because correction of accounting error
II.Amount at the beginning of this year 426,745,404.00 530,451,655.97 109,487,064.39 -693,679,376.16 26,674,626.16 399,679,374.36
III.Increment and decrement of this year 52,031,961.59 -37,734,798.44 -11,947,199.27 2,349,963.88
1.Net profit -37,734,798.44 652,800.73 -37,081,997.71
2.Profit and loss through owner's equity directly 52,031,961.59 52,031,961.59
(1) Net changing amount of fair value of available-for-sale financial assets 52,031,961.59 52,031,961.59
(2) Influence of other owner's equity change of invested enterprise
under equity method
(3) Relating income tax effect through owner's equity items
(4) Other
Subtotal of above 1 and 2 52,031,961.59 -37,734,798.44 652,800.73 14,949,963.88
3.Owners invest or reduce capital
(1) Owners invest capital
(2) Share-based payment recorded into owner's equity
(3) Other
4. Profit distribution 12,600,000.00 12,600,000.00
(1) Draw surplus reserves
(2) Draw common risk provision
(3) Distribute to owners (shareholders) 12,600,000.00 12,600,000.00
(4) Other
5. Inner rotation within owner's equity
(1) Capital reserves transfer to share capital
(2) Surplus reserves transfer to share capital
(3) Surplus reserves offset loss
(4) Other
IV.Amount at the end of this year 426,745,404.00 582,483,617.56 109,487,064.39 -731,414,174.60 14,727,426.89 402,029,338.24
Corporate representative: Zheng Qing Chief Accountant: Chen Binglian Accounting Supervisor: Yang Daoliang
14
Hainan Pearl River Holding Company Limited
Statement of Changes in Equity
Year ended 30 June 2013
Expressed in Renminbi
30 June 2013
Items Less:treasury Surplus
Share capital Capital reserves Undistributed profits Total owner's equity
stock reserves
I.Amount at the end of last year 426,745,404.00 524,962,496.71 109,487,064.39 -643,426,456.79 417,768,508.31
1.Amount because the change of accounting policy
2.Amount because correction of accounting error
II.Amount at the beginning of this year 426,745,404.00 524,962,496.71 109,487,064.39 -643,426,456.79 417,768,508.31
III.Increment and decrement of this year -28,954,922.85 -27,448,612.76 -56,403,535.61
1.Net profit -27,448,612.76 -27,448,612.76
2.Profit and loss through owner's equity directly -28,954,922.85 -28,954,922.85
(1) Net changing amount of fair value of available-for-sale financial assets -28,954,922.85 -28,954,922.85
(2) Influence of other owner's equity change of invested enterprise under equity
method
(3) Relating income tax effect through owner's equity items
(4) Other
Subtotal of above 1 and 2 -28,954,922.85 -27,448,612.76 -56,403,535.61
3.Owners invest or reduce capital
(1) Owners invest capital
(2) Share-based payment recorded into owner's equity
(3) Other
4. Profit distribution
(1) Draw surplus reserves
(3) Distribute to owners (shareholders)
(4) Other
5. Inner rotation within owner's equity
(1) Capital reserves transfer to share capital
(2) Surplus reserves transfer to share capital
(3) Surplus reserves offset loss
(4) Other
6. Others
IV.Amount at the end of this year 426,745,404.00 496,007,573.86 109,487,064.39 -670,875,069.55 361,364,972.70
Corporate representative: Zheng Qing Chief Accountant: Chen Binglian Accounting Supervisor: Yang Daoliang
15
Hainan Pearl River Holding Company Limited
Statement of Changes in Equity
Year ended 30 June 2013
Expressed in Renminbi
30 June 2012
Items Less:treasury Undistributed
Share capital Capital reserves Surplus reserves Total owner's equity
stock profits
I.Amount at the end of last year 426,745,404.00 533,467,995.51 109,487,064.39 -684,380,391.30 385,320,072.60
1.Amount because the change of accounting policy
2.Amount because correction of accounting error
II.Amount at the beginning of this year 426,745,404.00 533,467,995.51 109,487,064.39 -684,380,391.30 385,320,072.60
III.Increment and decrement of this year 52,031,961.59 87,358,126.84 139,390,088.43
1.Net profit 87,358,126.84 87,358,126.84
2.Profit and loss through owner's equity directly 52,031,961.59 52,031,961.59
(1) Net changing amount of fair value of available-for-sale financial assets 52,031,961.59 52,031,961.59
(2) Influence of other owner's equity change of invested enterprise under equity
method
(3) Relating income tax effect through owner's equity items
(4) Other
Subtotal of above 1 and 2 52,031,961.59 87,358,126.84 139,390,088.43
3.Owners invest or reduce capital
(1) Owners invest capital
(2) Share-based payment recorded into owner's equity
(3) Other
4. Profit distribution
(1) Draw surplus reserves
(3) Distribute to owners (shareholders)
(4) Other
5. Inner rotation within owner's equity
(1) Capital reserves transfer to share capital
(2) Surplus reserves transfer to share capital
(3) Surplus reserves offset loss
(4) Other
6. Others
IV.Amount at the end of this year 426,745,404.00 585,499,957.10 109,487,064.39 -597,022,264.46 524,710,161.03
Corporate representative: Zheng Qing Chief Accountant: Chen Binglian Accounting Supervisor: Yang Daoliang
16
Hainan Pearl River Holding Company Limited Notes on Semi-annual Report 2013
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the Six Months ended 30 June 2013
(All amounts are stated in RMB Yuan unless otherwise stated)
I. General information
Hainan Pearl River Holding Company Limited, referred to as ‘the Company’ or ‘Pearl River
Holding’, grew out of the lawful re-registration by the original Hainan Pearl River Industry
Company Limited on January 11 1992. The re-registration was based on the document of Qiong Fu
Ban [1992] No.1 issued by the General Office of Hainan People’s Government and City
Management Office Qiong Yin [1992] No. 6 issued by the People’s Bank of Hainan province. By
the time when the re-registration took place, the Company issued a total amount of 81,880,000
shares, among which 60,793,600 shares were folded from the predecessor’s net assets while the rest
amount, 21,086,400 shares, were newly issued and were listed on Shenzhen Stock Exchange
according to the document of securities administration office [1992] No. 83 issued by the People's
Bank of China in December 1992. The parent company of the Pearl River Holding, the Guangjiang
Industrial Company held the amount of 36,393,600 shares in 1992, equivalent to a shareholding
ratio of 44.45%. The business license registration number is 20128455-6 and the company is
defined as belonging to the real estate industry.
On 25th March 1993, approved by the Hainan joint-stock system pilot leading group office with the
supporting document of Qiong joint-stock office [1993] No.028 and the Shenzhen special economic
zone branch of the People’s Bank of China with the corresponding document of Shen People’s
Bank Fu [1993] No.099, the company increased its share capital by stock-for stock: five new shares
for every ten shares held plus two freely delivered new shares. As a result, the share capital
increased to 139,196,000 shares, of which the shareholder, Guangzhou Pearl River Industrial
Company occupied 48,969,120 shares, holding an equity stake of 35.18%.
In 1994, the equity capital was raised to the amount of 278,392,000 shares through delivering 10
new free shares for every 10 shares held. Guangzhou Pearl River Industrial Company occupied
97,938,240 shares, holding an equity stake of 35.18%.
In 1995, based on the approval stated at the document of Shenzhen BanFu [1995] No. 45 and
Shenzhen BanFu [1995] No.12, the company issued 50 million B shares. An incremental share
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Hainan Pearl River Holding Company Limited Notes on Semi-annual Report 2013
capital was thus followed based on the fact that every 1.5 new shares were generated for every ten
B shares, resulting in the amount of 377,650,800 shares outstanding in total. Guangzhou Pearl
River Industrial Company occupied 112,628,876 shares, holding an equity stake of 29.82%.
In 1999, 112,628,976 shares that were held by the Guangzhou Pearl River Industrial Group Co.,
Company were transferred to Beijing Wanfa Real Estate Development Company. Consequently,
Beijing Wanfa Real Estate Development Company became the first majority shareholder, holding
the amount of 112,628,976 shares, which accounts for 29.82% of the total outstanding shares of the
company.
On 10th January 2000, with the Business License for Legal Person issued by the Hainan
Administrative Bureau for Industry and Commerce and the registration number 4600001006830
obtained, the name of the company was formally changed to Hainan Pearl River Holding Company
Limited.
August 17, 2006, with the implementation of equity division reform, an incremental of share capital
to the total amount of 49.094604 million shares took place since additional shares were delivered to
all shareholders based on a 10：1.3（1.3 free new shares for every 10 held）distribution regime. The
total amount of shares outstanding was thus increased to 426,745,404 shares with the Wanfa Real
Estate Development Company occupying 107,993,698 shares, taking up the ownership percentage
of 25.31%. In 2007 and 2009, non-circulation stock shareholders paid back consideration for
reform of the shareholder structure; the corresponding value was respectively 3,289,780 and
1,196,000 shares of stock. Beijing Wanfa Real Estate Development Company held an amount of
112,479,478 shares at the end of 2009, which was equivalent to an equity stake of 26.36%. In 2010,
the controlling shareholder Beijing Wanfa Real Estate Development Stock Limited Company
changed its name to Beijing Wanfa Real Estate Development Limited Liability Company. By the
end of June, this dominant shareholder held an amount of 112,479,478 shares, equivalent to an
ownership percentage of 26.36%.
Registered capital: RMB 426,745,400 Yuan
The business license number: 4600001006830
Office address: 29/F., Dihao Building, Pearl River Plaza, Binhai Avenue, Haikou, Hainan, the PRC.
Corporate representative: Zheng Qing
The operation scope: Industrial investment, tropical farming, aquaculture, real estate development
and management, hotel investment and management, material supply, construction equipment
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Hainan Pearl River Holding Company Limited Notes on Semi-annual Report 2013
purchasing, leasing, hardware, chemical, trade of household items, decoration, vehicle parking, and
high-tech investment projects, investment in environmental protection projects, investment advice.
The company mainly engaged in real estate development and property management, which belong
to real estate aspect.
The Company's basic organizational structure: General meeting of shareholders is the highest organ
of power. Board of directors is the executing agency. Supervisory board is the Company's internal
auditing agency. General Manager is responsible for the Company's daily operational management.
There are General Manager Office, Securities Department, and Tourism Real Estate Department,
Financial Department, Management Department, Auditing Department and others in the Company.
II. Accounting policies, accounting estimates and error correction of previous years
1． Preparation basis of financial statement
Preparation of the financial statements is based on going concern postulate. Recognition and
measurement comply with actual transactions or events, and the Company prepares financial
statements on these bases.
2. Announcement about compliance with Accounting Standards for Business Enterprises
The Company’s financial statements are prepared in accordance with the requirements of the
Accounting Standards for Business Enterprises, and they fairly and completely present the
financial position, operation results, cash flow and other relevant information of the Company.
3. Accounting year
Accounting year of the Group is the calendar year from January 1 to December 31. This report
covers the period from January 1, 2011 to December 31, 2011.
4. Reporting currency
The Company’s reporting and presentation currency is Renminbi (“RMB”).
5. Consolidation Basis
(1) Merge of the enterprises under the uniform control
As there is the merge of the enterprises under the common control, the accrual basis shall be
used. The assets, liabilities (except the adjustment caused by complying with various
accounting policies) of the merged party shall be measured as their book value at the merging
date. The difference between the price of the book value on merge (or face value of the total
- 19 -
Hainan Pearl River Holding Company Limited Notes on Semi-annual Report 2013
issued shares) and obtained book value of net assets, shall adjust the capital surplus, and as
the capital surplus is offset, the retained earnings shall be adjusted. The pre-merger net profit
incurred by the merged party, shall be attributed to consolidated income statement.
(2) Merge of enterprises under the non-uniform control
As there is the merge of the enterprises under the non-uniform control, the purchasing
principal to be adopted by the Company. On the purchasing date, the consolidating cost is
determined by the fair values of the assets, occurred or payable liabilities, and the issued
equity securities, which are paid for purchasing. Meanwhile, the assets, liabilities and the
contingent liabilities of the vendor are determined at their fair values.
The excess amount between the consolidating cost and the fair value of the net assets of the
vendor entity shall be recognized as goodwill in the consolidated balance sheet; the balance
of the consolidating cost and the fair value of the net assets of the vendor shall be included
in the current profit and loss.
The operating result shall be consolidated from the acquisition date until the termination of
the control.
6. The standard for consolidation financial statement preparation
All subsidiaries of the company are in the scope of the consolidation.
The company prepares the consolidated financial statements in accordance with the
“Accounting standard for Business Enterprises No. 33- Consolidated financial statement”.
7. Cash and Cash equivalents
Cash refers to cash on hand and demand deposits. “Cash equivalents” refer to short-term,
highly liquid investments that are readily convertible to known amounts of cash and which
are subject to an insignificant risk on change in value.
8. Foreign currency transactions
Foreign currency (currency other than the reporting currency) transactions are translated into
reporting currency at spot exchange rates prevailing on the day in which the transactions take
place. Monetary items are adjusted according to spot exchange rates at the balance sheet date.
The exchange balance on foreign currency shall be capitalized and recorded into the cost of
relevant assets if it is eligible for capitalization; other exchange balance on foreign currency
shall be recorded into current profit and loss. Foreign currency non-monetary items measured
with history cost are translated into reporting currency at spot exchange rates on the
- 20 -
Hainan Pearl River Holding Company Limited Notes on Semi-annual Report 2013
occurrence date. Foreign currency non-monetary items measured with fair value are
translated into reporting currency at spot exchange rates of fair value confirming date; the
difference is recorded as the changes in the profit and loss of fair value.
Monetary assets and liabilities denominated in foreign currencies at the balance sheet date
are restated into the reporting currency using the spot exchange rates at that date. Among the
equity items, all items are translated into reporting currency at spot exchange rates on the
occurrence date except the item of undistributed profits. Income Statement items are
translated into reporting currency at spot exchange rate on the occurrence date. The exchange
difference from translation of financial statements denominated in foreign currency is
included in the equity and presented individually.
9. Financial Instruments
(1) Classification of financial assets and financial liabilities
Financial assets shall be classified into the following four categories when they are initially
recognized: the financial assets which are measured at their fair values and the variation of
which is recorded into the profits and losses of the current period, including transactional
financial assets and the financial assets which are measured at their fair values and of which
the variation is included in the current profits and losses; held-to-maturity investments;
loans and account receivables; available-for-sale financial assets.
Financial liabilities shall be classified into the following two categories when they are
initially recognized: the financial liabilities which are measured at their fair values and of
which the variation is included in the current profits and losses, including transactional
financial liabilities and the designated financial liabilities which are measured at their fair
values and of which the variation is included in the current profits and losses; and other
financial liabilities.
(2) Recognition and measurement of financial instruments
When an enterprise becomes a party to a financial instrument, it shall recognize a financial
asset or financial liability. The financial assets and financial liabilities initially recognized
by an enterprise except loans and account receivables shall be measured at their fair values;
loans and account receivables initially recognized by an enterprise shall be measured at
price in the contract or agreement. For the financial assets and liabilities measured at their
fair values and of which the variation is recorded into the profits and losses of the current
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Hainan Pearl River Holding Company Limited Notes on Semi-annual Report 2013
period, the transaction expenses thereof shall be directly recorded into the profits and losses
of the current period; for other categories of financial assets and financial liabilities, the
transaction expenses thereof shall be included into the initially recognized amount.
An enterprise shall make subsequent measurement on its financial assets according to their
fair values, and may not deduct the transaction expenses that may occur when it disposes of
the said financial asset in the future. However, those under the following circumstances
shall be excluded: a. The investments held until their maturity, loans and accounts
receivable shall be measured on the basis of the post-amortization costs by adopting the
actual interest rate method; b. The equity whose fair value cannot be measured reliably, and
the derivative financial assets which are connected with the said equity instrument and must
be settled by delivering the said equity instrument shall be measured on the basis of their
costs.
An enterprise shall make subsequent measurement on its financial liabilities on the basis of
the post-amortization costs by adopting the actual interest rate method, with the exception
of those under the following circumstances: a. For the financial liabilities measured at their
fair values and of which the variation is recorded into the profits and losses of the current
period, they shall be measured at their fair values, and none of the transaction expenses may
be deducted, which may occur when the financial liabilities are settled in the future. b. For
the derivative financial liabilities, which are connected to the equity instrument for which
there is no quotation in the active market and whose fair value cannot be reliably measured,
and which must be settled by delivering the equity instrument, they shall be measured on
the basis of their costs. c. For the financial guarantee contracts which are not designated as a
financial liability measured at its fair value and the variation thereof is recorded into the
profits and losses of the current period, and for the commitments to grant loans which are
not designated to be measured at the fair value and of which the variation is recorded into
the profits and losses of the current period and which will enjoy an interest rate lower than
that of the market, a subsequent measurement shall be made after they are initially
recognized according to the higher one of the following: the best estimation required to pay
when carrying out the prevailing obligations, and initially recognized amount deducting
accumulative amortization which adopts the actual interest rate method.
(3) Recognition and measurement of transfer of financial assets
- 22 -
Hainan Pearl River Holding Company Limited Notes on Semi-annual Report 2013
Where an enterprise has transferred nearly all of the risks and rewards related to the
ownership of the financial asset to the transferee, it shall stop recognizing the financial asset.
If it retained nearly all of the risks and rewards related to the ownership of the financial
asset, it shall not stop recognizing the financial asset. Where an enterprise does not transfer
or retain nearly all of the risks and rewards related to the ownership of a financial asset, it
shall deal with it according to the circumstances as follows, respectively: a. If it gives up its
control over the financial asset, it shall stop recognizing the financial asset; b. If it does not
give up its control involvement in the transferred financial asset, recognize the related
financial asset and recognize the relevant liability accordingly.
If the transfer of an entire financial asset satisfies the conditions for stopping recognition,
the difference between the amounts of the following 2 items shall be recorded in the profits
and losses of the current period: a. The book value of the transferred financial asset; b. The
sum of consideration received from the transfer, and the accumulative amount of the
changes of the fair value originally recorded in the owner's equities. If the transfer of partial
financial asset satisfies the conditions to stop the recognition, the entire book value of the
transferred financial asset shall, between the portion whose recognition has been stopped
and the portion whose recognition has not been stopped, be apportioned according to their
respective relative fair value, and the difference between the amounts of the following 2
items shall be included into the profits and losses of the current period : a. The book value
of the portion whose recognition has been stopped; b. The sum of consideration of the
portion whose recognition has been stopped, and the portion of the accumulative amount of
the changes in the fair value originally recorded in the owner's equities which is
corresponding to the portion whose recognition has been stopped.
(4) Determination of the fair value of main financial assets and financial liabilities
As for the financial assets or financial liabilities for which there is an active market, the
quoted prices in the active market shall be used to determine the fair values thereof.
Where there is no active market for a financial instrument, the enterprise concerned shall
adopt value appraisal techniques to determine its fair value. The value appraisal techniques
mainly include the prices adopted by the parties, who are familiar with the condition, in the
latest market transaction upon their own free will, the current fair value obtained by
referring to other financial instruments of the same essential nature, the cash flow
- 23 -
Hainan Pearl River Holding Company Limited Notes on Semi-annual Report 2013
capitalization method and the option pricing model, etc. As for the financial assets initially
obtained or produced at source and the financial liabilities assumed, the fair value thereof
shall be determined on the basis of the transaction price of the market.
(5) Impairment of financial assets
An enterprise shall carry out an inspection, on the balance sheet day, on the carrying amount
of the financial assets other than those measured at their fair values and of which the
variation is recorded into the profits and losses of the current period. An impairment test
shall be made on the financial assets with significant single amounts. With regard to the
financial assets with insignificant single amounts, they shall be included in a combination of
financial assets with similar credit risk features so as to carry out an impairment-related test.
Where, upon independent test, the financial asset (including those financial assets with
significant single amounts and those with insignificant amounts) has not been impaired, it
shall be included in a combination of financial assets with similar risk features so as to
conduct another impairment test.
Where a financial asset measured on the basis of post-amortization costs is impaired, the
carrying amount of the said financial asset shall be written down to the current value of the
predicted future cash flow (excluding the loss of future credits not yet occurred), and the
amount as written down shall be recognized as loss of the impairment of the asset. Where
there is a very small gap between the predicted future cash flow of a short-term account
receivable item and the current value thereof, the predicted future cash flow is not required
to be capitalized when determining the relevant impairment-related losses. Where an equity
instrument investment for which there is no quoted price in the active market and whose fair
value cannot be reliably measured, or a derivative financial asset which is connected with
the equity instrument and which must be settled by delivering the equity instrument, suffers
from any impairment, the gap between the carrying amount of the equity instrument
investment or the derivative financial asset and the current value of the future cash flow of
similar financial assets capitalized according to the returns ratio of the market at the same
time shall be recognized as impairment-related losses. Where available-for-sale financial
assets are impaired due to significant drop of fair value and the drop is not temporary, the
accumulative losses arising from the decrease of the fair value of the owner’s equity which
was directly included shall be transferred out and recorded into the profits and losses of the
- 24 -
Hainan Pearl River Holding Company Limited Notes on Semi-annual Report 2013
current period.
10. Accounts receivable and bad debts
(1) Measurement method and the percentage of bad debts
Measurement method of bad debts: accounted with allowance method.
At the end of the period, impairment test shall be made on individual accounts receivable
with significant amounts. If there is objective evidence that they have been impaired, bad
debt loss shall be recognized and provision for bad debts shall be made base on the
differences between book values and the present value of future cash flows.
For those individual accounts receivable without significant amounts at the end of the period,
along with those accounts receivable that have been tested individually but not impaired, the
Company classifies them in line with similar credit risk characteristics into several groups,
and make a specific percentage of bad debts provision on the accounts receivable balances at
balance sheet date. On the basis of the actual loss rate of receivable accounts, with same or
similar credit risk characteristics of accounts receivable package in previous year, the
Company also considers current situation and determine the percentage of bad debt
provision.
Here is the Company’s bad debts provision policy:
Percentage of Accounts Percentage of Others
Ages
Receivable (%) Receivable (%)
Within 1 year (including 1 year, same as
2 2
following)
1 year to 2 years 5 5
2 years to 3 years 10 10
3 years to 4 years 20 20
4 years to 5 years 30 30
Over 5 years 50 50
There is strong evidence that accounts receivable can’t be recovered or little possibility of
recovery (it is unable to pay in the short term due to bankruptcy, insolvent, serious shortage
of cash flow, serious natural disasters and etc. ) as well as other evidences of occurring loss,
the Company can make full provision for the accounts receivable.
(2) The accounts receivable meeting the following criteria are recognized as bad debts:
For accounts receivable that are surely uncollectible, such as they can be written off as bad
debts after the approval of the general meeting of shareholders or the board of directors.
- 25 -
Hainan Pearl River Holding Company Limited Notes on Semi-annual Report 2013
11. Inventories
(1) Inventories include: development cost (constructing development product), development
product, finished goods, low-value consumable supplies and etc. All inventories are calculated
at actual cost when acquire. The issue of inventories is calculated according to individual
cognizance method. The low–value consumable supplies are amortized at one time. Inventories
stock physical count system: perpetual inventory method
Measurement method of land used for development: the land used for development is included
in “Inventories - development cost”.
Public facilities costs: public facilities such as schools, as well as public facilities fees acquired
by government departments, the cost is included in "development costs" and its apportionment
and detailed calculation are in accordance with calculation objects and cost items.
(2) For inventories at balance sheet date, the evaluation criteria should base on the lower value
between costs and net values that can be converted into cash. When net values that can be
converted into cash are lower than costs, provision for impairment loss of inventories shall be
made and recorded into current profit and loss.
12. Long-term equity investment
(1) The initial cost of the long-term equity investment
For the business combination under the same control, it shall, on the date of merger, regard
the share of the book value of the owner's equity of the merged enterprise as the initial cost of
the long-term equity investment. For the business combination not under same control, the
initial cost of long-term equity investment is fair value of assets paid, liabilities undertaken,
the equity securities issued by the Company, and includes all direct expenses and future
events that will influence combination cost.
Besides the long-term equity investments formed by the business combination, the initial cost
of a long-term equity investment obtained by other means shall be ascertained in accordance
with the provisions as follows: The initial cost of a long-term equity investment obtained by
making payment in cash shall be the purchase cost which is actually paid; the initial cost of a
long-term equity investment obtained on the basis of issuing equity securities shall be the fair
value of the equity securities issued; the initial cost of a long-term equity investment of an
investor shall be the value stipulated in the investment contract or agreement.
(2) Subsequent measurement
- 26 -
Hainan Pearl River Holding Company Limited Notes on Semi-annual Report 2013
The Company uses cost method for the following conditions: a long-term equity investment
where the investing enterprise can exercise control over the investee, or the investing
enterprise does not have joint control or significant influence over the investee, the
investment is not quoted in an active market and its fair value can’t be reliably measured.
For a long-term equity investment where the investing enterprise can exercise control over
the investee, the investing enterprise shall make an adjustment by employing the equity
method when it works out consolidated financial statements. When adopting cost method,
the dividends or profits declared to distribute by the invested entity shall be recognized as
the current investment income. The investment income recognized by the investing
enterprise shall be limited to the amount received from the accumulative net profits that
arise after the invested entity has accepted the investment. Where the amount of profits or
cash dividends obtained by the investing entity exceeds the aforesaid amount, it shall be
regarded as recovery of initial investment cost.
A long-term equity investment of the investing enterprise that does joint control or
significant influences over the invested entity shall be measured by employing the equity
method. If the initial cost of a long-term equity investment is more than the investing
enterprise' attributable share of the fair value of the invested entity's identifiable net assets
for the investment, the initial cost of the long-term equity investment may not be adjusted.
If the initial cost of a long-term equity investment is less than the investing enterprise'
attributable share of the fair value of the invested entity's identifiable net assets for the
investment, the difference shall be included in the current profits and losses and the cost of
the long-term equity investment shall be adjusted simultaneously. After an investing
enterprise obtains a long-term equity investment, it shall, in accordance with the attributable
share of the net profits or losses of the invested entity, recognize the investment profits or
losses and adjust the book value of the long-term equity investment. Where any change is
made to the owner's equity other than the net profits and losses of the invested entity, the
book value of the long-term equity investment shall be adjusted and be included in the
owner's equity.
The Company should have impairment test for any long-term equity investment on very
balance sheet date. When the estimated value in use is less than its book value, it will be
treated as impairment loss. And this loss should be transferred into current profit and loss
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Hainan Pearl River Holding Company Limited Notes on Semi-annual Report 2013
account; meanwhile, the company should set up provision for the long-term equity
investment impairment loss. To any long-term equity investments, which are measured by
cost method, there is no price or its fair value cannot be measured reliably, the impairment
loss of these investments should be the difference between the book value and the present
value of the future cash flow calculated by using current market rate of similar financial
asset.
For other long-term equity investment, where any evidence shows that there is possible
assets impairment, the impairment provision is made according to relevant regulations and
methods.
(3) Recognition basis of joint control and significant influences
The term "joint control" refers to the control over an economic activity in accordance with
the contracts and agreements, which does not exist unless the investing parties of the
economic activity with one an assent on sharing the control power over the relevant
important financial and operating decisions. The term "significant influences" refers to the
power to participate in making decisions on the financial and operating policies of an
enterprise, but not to control or do joint control together with other parties over the
formulation of these policies.
(4) Disposal of long-term equity investment
When disposing of a long-term equity investment, the difference between its book value and
the actual purchase price shall be included in the current profits and losses. If any change
other than the net profits and losses of the invested entity occurs and is included in the
owner's equity, the portion previously included in the owner's equity shall, when disposing
of a long-term equity investment measured by employing the equity method, be transferred
to the current profits and losses according to a certain proportion.
13. Investment property
The term "investment property" refers to the real estates held for generating rent and/or
capital appreciation, including: the right to use any land which has already been rented; the
right to use any land which is held and prepared for transfer after appreciation; and the right
to use any building which has already been rented. The initial measurement of the investment
property shall be made at its cost. An enterprise shall make a follow-up measurement to the
investment real estate through the cost pattern. For buildings which have already been rented,
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Hainan Pearl River Holding Company Limited Notes on Semi-annual Report 2013
the Company calculates depreciation as the same method of fixed assets. For the right to use
any land, it is amortized with straight-line method according to the serviceable life. At the
balance sheet date, where any evidence shows that there is possible assets impairment, the
impairment provision is made.
14. Fixed assets
(1) Recognition of fixed assets
Fixed assets are tangible assets that are held for use in production or supply of goods or
services, for rental to others, or for administrative purpose, and have useful lives more than
one accounting year.
The expected discard expenses should be taken into consideration in the ascertainment of the
cost of a fixed asset.
(2) The category and depreciation method of fixed assets
Fixed assets include buildings and structures, vehicles, general equipments, specific
equipments and other equipments. Straight-line method is in used to calculate the
depreciation of fixed assets. The estimated useful lives, expected residual value and annual
depreciation rate of various types fixed assets are listed as follows:
Estimated useful lives Expected residual value Annual depreciation rate
Category
(years) (%) (%)
Buildings & Houses 25 5 3.8
Motor Vehicle 5 5 19.0
General equipments 10 5 9.5
Specific equipments 5 5 19.0
Other equipments 5 5 19.0
Depreciation shall be made for the fixed assets on a monthly basis. Fixed assets increased
this month shall make depreciation from next month; fixed assets decreased this month shall
stop making depreciation from next month.
The company shall, at least at the end of each year, have a check on the useful life, expected
residual value and the depreciation method of the fixed assets, and adjust them when
necessary.
At the balance sheet date, where any evidence shows that there is possible assets impairment,
the impairment provision is made according to Notes II. 17.
(3) Idle fixed assets
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Hainan Pearl River Holding Company Limited Notes on Semi-annual Report 2013
Fixed assets that are not used for six months continuously due to underemployment or natural
disasters are identified as idle fixed assets (except for seasonal break).
The depreciation method of idle fixed assets is consistent with other fixed assets.
(4) Fixed assets under financing lease
When one or more of the following criteria are met, a lease shall be classified as a financial
lease:
a. the lease transfers ownership of the leased asset to the lessee by the end of the lease term;
b. the lessee has the option to purchase the leased asset at a price that is expected to be
sufficiently lower than the fair value at the date the option becomes exercisable such that,
at the inception of the lease, it is reasonably certain that the option will be exercised by the
lessee;
c. the lease term is for the major part of the useful life of the leased asset even if title is not
transferred;
d. in the case of the lessee, at the inception of the lease the present value of the minimum
lease payments amounts to substantially all of the fair value of the leased asset; in the case
of lesser, at the inception of the lease the present value of the minimum lease receipts
amounts to substantially all of the fair value of the leased asset;
e. the leased assets are of a specialized nature such that only the lessee can use them without
major modifications being made.
Fixed assets under financing lease shall be recorded at the lower one of the fair value of the
leased asset and the present value of the minimum lease payments. The depreciation method
is consistent with fixed assets of the Company.
15. Construction in progress
Construction in progress (“CIP”) includes all costs incurred during the preparation period
before commencement of construction and until the asset is ready for its intended use.
These costs include direct materials, direct labour, equipment for installation, construction
and installation charges, management fees, gain or loss on trial run production and borrowing
costs which are qualified for capitalization.
CIP is transferred to fixed assets when the asset is ready for its intended use.
At the balance sheet date, where any evidence shows that there is possible CIP impairment,
the impairment provision is made according to Notes II.17.
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Hainan Pearl River Holding Company Limited Notes on Semi-annual Report 2013
16. Borrowing Costs
Borrowing costs are interest and other related costs incurred by the Company in connection
with the borrowing of funds, and include interest, amortization of discounts or premiums
related to borrowings, ancillary costs incurred in connection with the arrangement of
borrowings, and exchange differences arising from foreign currency borrowings. Borrowing
costs that are directly attributable to the acquisition, construction or production of a
qualifying asset shall be capitalized as part of the cost of that asset. The amounts of other
borrowing costs incurred shall be recognized as an expense in the period in which they are
incurred.
Qualifying assets are assets (fixed assets, investment property, inventories, etc.) that
necessarily take a substantial period of time for acquisition, construction or production to get
ready for their intended use or sale. The capitalization of borrowing costs can commence
only when all of the following conditions are satisfied: (1) expenditures for the asset are
being incurred; (2) borrowing costs are being incurred; (3) activities relating to the
acquisition, construction or production of the asset that are necessary to prepare the asset for
its intended use or sale have commenced.
When the qualified asset under acquisition and construction or production is ready for the
intended use or sale, the capitalization of the borrowing costs shall be ceased; then the
borrowing costs incurred shall be recorded into the profits and losses of the current period.
Borrowing costs due to loans from real estate development are recorded into development
cost before the completion of the project and recorded into current profit and loss after the
completion of the project. Borrowing costs are recorded into development cost and amortized
quarterly.
Where the acquisition and construction or production of a qualified asset is interrupted
abnormally and the interruption period lasts for more than 3 months, the capitalization of the
borrowing costs shall be suspended. The borrowing costs incurred during such period shall
be recognized as expenses, and shall be recorded into the profits and losses of the current
period.
During the capitalization period, the amount of interest to be capitalized for each accounting
period shall be determined as follows:
(1) for a specific-purpose borrowing, the amount of interest to be capitalized shall be the
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Hainan Pearl River Holding Company Limited Notes on Semi-annual Report 2013
actual interest expense incurred for the period less temporary deposit’s interest or investment
income;
(2) Where funds are borrowed under general-purpose borrowings, the Company shall
determine the amount of interest to be capitalized by applying a capitalization rate to the
weighted average of the excess amounts of cumulative expenditures on the asset over and
above the amounts of specific-purpose borrowings. The capitalization rate shall be the
weighted average of the interest rates applicable to the general-purpose borrowings.
17. Intangible assets
The term "intangible assets" refers to the identifiable non-monetary assets possessed or
controlled by enterprises which have no physical shape. If it is unable to forecast the period
when the intangible asset can bring economic benefits to the enterprise, it shall be regarded
as an intangible asset with uncertain service life. The intangible assets shall be initially
measured according to its cost. If it is unable to determine the expected realization pattern
reliably, intangible assets shall be amortized by the straight-line method. An enterprise shall,
at least at the end of each year, check the service life and the amortization method of
intangible assets with limited service life, and adjust them when necessary. Intangible assets
with uncertain service life may not be amortized. An enterprise shall check the service life of
intangible assets with uncertain service life during each accounting period. Where any
evidence shows that there is possible assets impairment, the impairment provision is made.
18. Long-term prepaid expenses
Long-term prepaid expenses mainly include spending paid with the benefit period of more
than one year (excluding the year period) such as car parking fees, housing renovation fees,
etc. Long-term prepaid expenses shall be amortized the costs over the duration of the project
beneficiary.
19. Contingencies liabilities
The obligation pertinent to a Contingencies shall be recognized as accrued liabilities when
the following conditions are satisfied simultaneously: (1) That obligation is a current
obligation of the enterprise; (2) It is likely to cause any economic benefit to flow out of the
enterprise as a result of performance of the obligation; (3) The amount of the obligation can
be measured in a reliable way. The estimated debts shall be initially measured in accordance
with the best estimate of the necessary expenses for the performance of the current
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Hainan Pearl River Holding Company Limited Notes on Semi-annual Report 2013
obligation.
20. Revenue recognition
(1) Revenue from the sale of goods shall be recognized only when all of the following
conditions are satisfied:
a. the enterprise has transferred to the buyer the significant risks and rewards of ownership of
the goods;
b. the enterprise retains neither continuing managerial involvement to the degree usually
associated with ownership nor effective control over the goods sold;
c. the amount of revenue can be measured reliably;
d. it is probable that the associated economic benefits will flow to the enterprise;
e. the associated costs incurred or to be incurred can be measured reliably.
Real estate sales revenue: the Company can recognize real estate sales revenue after the
completion and acceptance of the property, signing sale contract, acquiring payment proof from
buyer and delivery. When the buyer receives written delivery notice and has no warrant to
refuse to accept it, the sales revenue is realized after delivery limit closed of delivery notice. For
the development project consigned by other, as well as in accordance with “Accounting
Standards for Business Enterprises -Construction Contract", the revenue shall be recognized in
light of the percentage-of- completion method. The percentage-of- completion is determined by
the proportion of finished workload.
(2) Rendering of services
When the outcome of a transaction involving the rendering of services can be estimated
reliably at the balance sheet date (including: the amount of revenue can be measured
reliably; it is probable that the associated economic benefits will flow to the enterprise; the
stage of completion of the transaction can be measured reliably; the costs incurred and to be
incurred for the transaction can be measured reliably), revenue associated with the
transaction shall be recognized using the percentage of completion method, and the stage of
completion of the transaction is recognized according to the proportion of the cost having
taken place occupied the estimated total cost.
When the outcome of a transaction involving the rendering of services cannot be estimated
reliably at the balance sheet date: when the costs incurred are expected to be recoverable,
revenue shall be recognized to the extent of costs incurred and an equivalent amount shall
be charged to profit or loss as service costs; when the costs incurred are not expected to be
- 33 -
Hainan Pearl River Holding Company Limited Notes on Semi-annual Report 2013
recoverable, the costs incurred shall be recognized in profit or loss for the current period
and no service revenue shall be recognized.
The revenue of property management service is recognized when following conditions are
satisfied: the property management service has been offered; the associated economic
benefits will flow to the enterprise; the associated costs can be measured reliably.
(3) Use by others of enterprise assets
Revenue arising from the use by others of enterprise assets shall be recognized only when
both of the following conditions are satisfied: it is probable that the associated economic
benefits will flow to the enterprise; the amount of the revenue can be measured reliably. The
amount of interest shall be determined according to the length of time for which the
enterprise’s currency fund is used by others and the effective interest rate. The amount of
royalties shall be determined according to the period and method of charging as stipulated
in the relevant contract or agreement.
21. Government grants
Government grants shall be recognized at fair value on the conditions that the Company can
receive the grant and comply with the conditions attaching to the grant. For a government
grant related to income, if the grant is a compensation for related expenses or losses to be
incurred by the Company in subsequent period, the grant shall be recognized as deferred
income, and recognized in profit or loss over the periods in which the related costs are
recognized. A government grant related to an asset shall be recognized as deferred income,
and evenly amortized to profit or loss over the useful life of the related asset.
22. Recognition of deferred income tax assets and liabilities
(1) The Company shall recognize the deferred income tax assets arising from a deductible
temporary difference to the extent of the amount of the taxable income which it is most
likely to obtain and which can be deducted from the deductible temporary difference.
However, the deferred income tax assets, which are arising from the initial recognition
of assets or liabilities during a transaction which is simultaneously featured by the
following, shall not be recognized:
(i) This transaction is not business combination; and
(ii) At the time of transaction, the accounting profits will not be affected, nor will the
taxable amount (or the deductible loss) be affected.
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Hainan Pearl River Holding Company Limited Notes on Semi-annual Report 2013
(2) Where the deductible temporary difference related to the investments of the subsidiary
companies, associated enterprises and joint enterprises can meet the following
requirements simultaneously, the enterprise shall recognize the corresponding deferred
income tax assets:
(i) The temporary differences are likely to be reversed in the expected future; and
(ii) It is likely to acquire any amount of taxable income tax that may be used for making
up the deductible temporary differences.
(iii) As for any deductible loss or tax deduction that can be carried forward to the next
year, the corresponding deferred income tax assets shall be determined to the extent
that the amount of future taxable income to be offset by the deductible loss or tax
deduction to be likely obtained.
(3) Recognition of deferred income tax liabilities
Except for the deferred income tax liabilities arising from the following transactions, an
enterprise shall recognize the deferred income tax liabilities arising from all taxable
temporary differences:
(i) The initial recognition of business reputation;
(ii) The initial recognition of assets or liabilities arising from the following transactions
which are simultaneously featured by the following:
(a) The transaction is not business combination;
(b) At the time of transaction, the accounting profits will not be affected, nor will the
taxable amount (or the deductible loss) be affected.
(4) The income taxes of the current period and deferred income tax of an enterprise shall be
treated as income tax expenses or incomes, and shall be recorded into the current profits and
losses, excluding the income taxes incurred under the following circumstances:
(i) The business combination; and
(ii) The transactions or events directly recognized as the owner's rights and interests.
(5) Impairment on the deferred income tax assets
On the balance sheet date, the carry amounts of the deferred income tax assets shall be
reviewed.
23. Maintenance fund
The Company’s property management company receives and manages public maintenance
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Hainan Pearl River Holding Company Limited Notes on Semi-annual Report 2013
fund consigned by owners, and charges to “agency fund”. The fund is used in the
maintenance and update of the common apparatus and common position of the house and
communal facilities of property management region.
24. Quality assurance reserve funds
Construction party should remain quality assurance reserve funds according to the amount in
the construction contract, and list in "accounts payable". The funds should be paid according
to the actual conditions and contract after guarantee period.
25. Changes of accounting policies and accounting estimates and error correction
(1) Changes of accounting policies
When the company first time adopted Accounting Standards for Business Enterprises, it
continued to use primary Accounting System for Business Enterprises for preparation
consolidated financial statements-recover parent’s shareholding of surplus reserves, because
the Accounting Standards for Business Enterprises cannot make it clear whether recover
parent’s shareholding of surplus reserves. The period change the accounting policies that not
to recover parent’s shareholding of surplus reserves in consolidated statements. The changes
of accounting policies increased the undistributed profit at the beginning of the year 2010 by
4,690,421.49 and decreased surplus reserves by 4,690,421.49.
(2) Notes for accounting estimates of previous period
Not applicable.
26. Changes of accounting estimates and error correction of previous period
Not applicable.
III. Taxation
The main taxes include: business tax, city construction and maintenance tax, education fee, income
tax and etc. The tax rates are as following:
Category Rate Taxable base
Revenue of house property sale and lease, property
Business tax 5%
management income and etc.
City construction and maintenance tax 5%, 7% Business tax and value-added tax
Education fee 3% Business tax and value-added tax
Income tax 25% Taxable income
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Hainan Pearl River Holding Company Limited Notes on Semi-annual Report 2013
IV. Business combinations and consolidation financial statements
The Company shall include all subsidiaries within the scope of consolidation.
The consolidated financial statements shall be prepared by parent based on the financial statements
of the parent and its subsidiaries, using other related information and after adjusting the long-term
equity investments in subsidiaries using the equity method according to “Accounting Standard for
Business Enterprises No.33—Consolidated Financial Statements”.
1. Subsidiaries established by the Company
Amount
Registered invested
Voting Consolidated
Registered capital Principal Holding by the Minority
Subsidiary’s name rights (Yes or No)
address (RMB activities proportion Company interest
proportion (RMB 0’000)
0’000) (RMB
0’000)
Hainan Pearl
River
Properties
Properties and Hainan
500 and Hotels 98% 98% 490 Yes 15.58
Hotels Haikou
Management
Management Co.,
Ltd.
Hainan Pearl
River Gardens
Hainan
Environmental 100 engineering 100% 100% 100 Yes
Haikou
Projects Co., construction
Ltd.
Hainan Pearl
River Estate Hainan Cleaning
50 100% 100% 50 Yes
Cleaning Haikou projects
Company
Hainan Pearl
River Estate Mechanical
Hainan
Machine 150 and electrical 100% 100% 150 Yes
Haikou
Engineering products sales
Company
Hainan Pearl
Real Estate
River Estate Hainan
100 Marketing 100% 100% 100 Yes
Marketing Co., Haikou
Planning
Ltd.
Sanya Wanjia
Hotel Hainan
12,000 Hotel service 100% 100% 12,000 Yes
Management Co., Sanya
Ltd.
Hubei Pearl River
Real estate
Real Estate
Hubei development
Development Co.,
Wuhan
6,500
and
88% 88% 5,720 Yes 1,185.02
Ltd.
management
Wuhan Pearl
River Meilin
Hubei
Hotels 50 Service 100% 100% 50 Yes
Wuhan
Management Co.,
Ltd.
Hainan Pearl
River Real estate
Enterprises development
Shanghai 4,000 100% 100% 4,000 Yes
Holding Co., and
Ltd. Shanghai management
Real Estate Co.
Beijing Jiubo
Cultural and
Culture
Beijing 500 sports 100% 100% 500 Yes
Development Co.,
services
Ltd.
Mudanjiang Pearl
River Tourism
Hotel
Investment and Mudanjiang 6,000 100% 100% 6,000 Yes
management
Development
Group Limited
Mudanjiang
Wanjia Star Hotel Mudanjiang 50 Hotel service 100% 100% 50 Yes
Co., Ltd.
- 37 -
Hainan Pearl River Holding Company Limited Notes on Semi-annual Report 2013
Amount
Registered invested
Voting Consolidated
Registered capital Principal Holding by the Minority
Subsidiary’s name rights (Yes or No)
address (RMB activities proportion Company interest
proportion (RMB 0’000)
0’000) (RMB
0’000)
Mudanjiang
Jingbohu Wanjia Mudanjiang 50 Hotel service 100% 100% 50 Yes
Hotel Co., Ltd.
Shanghai Sea
Pearl Property Property
Shanghai US $ 20 50% 50% 83 Yes 35.70
Management Co., management
Ltd.
Hebei
Real estate
zhengshiqinghui
Hebei development
Real Estate
Shijiazhuang
1,000
and property
51% 51% 510 Yes 28.77
Development Co.,
services
Ltd.
Heilongjiang
Longshi Pear Film base and
Culture Haerbin 700 Cultural 70% 70% 490 Yes 210.03
Communication training
Co., Ltd.
2. The subsidiaries acquired by the business combination under non-uniform
control
Registered
Voting
Subsidiary’s Business Registered Principal capital Holding Consolidated
rights
name category address activities (RMB proportion (Yes or No)
proportion
0’000)
Hailin Wanjia
Snowtown Hailin of
Limited Hotel
Holiday Hotel Heilongjiang 2,000 100.00 100.00 Yes
Liability service
Management Province
Co., Ltd.
V. Notes to significant items of the consolidated financial statements
1. Monetary funds
（1）Monetary funds disclosed by categories
Items Jun 30, 2013 Jan 1, 2013
Cash 515,406.33 1,343,203.42
Bank deposit 55,103,676.59 64,325,194.75
Other monetary funds 193,186.41 94,473.16
Total 55,812,269.33 65,762,871.33
Note: There were no access-restricted funds for the final balance, neither were those funds that have been deposited
abroad or may bring potential recovery risks.
2. Accounts receivable
(1) Accounts receivable listed by categories
June 30, 2013 January 1, 2013
Bad Debt Bad Debt
Categories Amounts Amounts
Provision Provision
Ratio Ratio Ratio Ratio
Amounts Amounts Amounts Amounts
(%) (%) (%) (%)
- 38 -
Hainan Pearl River Holding Company Limited Notes on Semi-annual Report 2013
June 30, 2013 January 1, 2013
Bad Debt Bad Debt
Categories Amounts Amounts
Provision Provision
Ratio Ratio Ratio Ratio
Amounts Amounts Amounts Amounts
(%) (%) (%) (%)
1.Significant accounts receivable
and bad debts accounted 7,761,707.60 27.72 7,761,707.60 100.00 7,761,707.60 38.01 7,761,707.60 100.00
individually
2.Bad debt accounted by the
combinations
Age Combinations 17,728,160.29 63.33 951,150.69 5.37 10,663,566.80 52.23 775,879.84 7.28
Combined Subtotal 17,728,160.29 63.33 951,150.69 5.37 10,663,566.80 52.23 775,879.84 7.28
3.Other unimportant receivables
but bad debts accounted 2,504,183.02 8.95 2,001,395.68 79.92 1,992,330.02 9.76 1,990,680.02 99.92
individually
Total 27,994,050.91 100 10,714,253.97 —— 20,417,604.42 100.00 10,528,267.46 ——
(2) Aging analysis
June 30, 2013 January 1, 2013
Ages
Balance Proportion (%) Bad debts Balance Proportion (%) Bad debts
Within 1 year 14,546,496.47 82.06 290,929.93 8,041,123.18 75.42 160,822.45
1-2 years 1,537,771.95 8.67 76,888.60 1,322,599.05 12.40 66,129.96
2-3 years 448,784.45 2.53 44,878.45 104,737.15 0.98 10,473.72
3-4 years 106,000.00 0.60 21,200.00 106,000.00 0.99 21,200.00
4-5 years 136,500.00 0.77 40,950.00 136,500.00 1.28 40,950.00
Over 5 years 952,607.42 5.37 476,303.71 952,607.42 8.93 476,303.71
Total 17,728,160.29 100.00 951,150.69 10,663,566.80 100.00 775,879.84
(3) The top five debtors’ ending total balance. Details are as follows:
Relationship Proportion of total
Owned
Name with Ages accounts receivable
amount
the company (%)
Hunan Railway Lianchuang Within 1
Unrelated Client 6,453,682.00 23.05
Technology Development Co., LTD year
Hainan racing entertainment Co.,
Unrelated Client 2,406,158.00 over 5 years 8.6
LTD
Hainan Baoping company Unrelated Client 2,218,494.43 over 5 years 7.92
Hainan centaline property agency Unrelated Client 2,090,069.77 over 5 years 7.47
Haikou Shengdeya decoration Within 1
Unrelated Client 1,971,907.05 7.04
engineering Co., LTD year
total 15,140,311.25 54.08
(4) At the end of this reporting period, none of the amount of accounts receivable was
owed to related parties.
3. Prepayments
(1) Aging analysis
- 39 -
Hainan Pearl River Holding Company Limited Notes on Semi-annual Report 2013
June 30, 2013 January 1, 2013
Ages
Balance Proportion (%) Balance Proportion (%)
Within 1 year 59,214,888.48 36.11 87,955,758.27 59.32
1-2 years 52,287,464.28 31.89 7,858,155.28 5.30
2-3 years 50,014,551.10 30.50 50,017,551.10 33.73
Over 3 years 2,455,422.96 1.50 2,452,422.96 1.65
Total 163,972,326.82 100 148,283,887.61 100
(2) Top five units of prepayments
Company’s Name Relationship Amounts Ages Unsettled reason
Heilongjiang Province Mudanjiang Within 1 The project is not
Unrelated Client 62,975,000.00
Forestry Engineering Company year complete yet.
Haikou Hongzhou Real Estate Pre-paid property
Unrelated Client 50,000,000.00 2-3 years
Development Co., Ltd purchase payment
The project is not
Dahailin Forestry Bureau Unrelated Client 5,396,469.00 1-2 years
complete yet.
Heilongjiang Xinzheng Within 1
Unrelated Client 3,300,000.00 Guarantee term is undue
Investment&Guarantee Co., Ltd year
Within 1 Pre-paid relocation
Unrelated Client 3,000,000.00
South luoling village council year compensation payment
Total 124,671,469.00
Note: The 50 million Yuan prepayment made to the Haikou Hongzhou Real Estate Development
Company was the payment required by the contract of ‘supplementary agreement of the
implementation of the 3rd phase of Longzhu project’. Under this contract, the company is obliged to
make the payment of RMB 50 million Yuan after the completion of the 150,000 square office
building. In addition to that, the Company has signed another ‘guarantee contract’ with Hainan
Hongzhou Real Estate Group Co.,Ltd, which is the parent company of the Haikou Hongzhou Real
Estate Development company. Based on this contract, the Group will use its own land and property
as security.
（3 ）The yearend balance did not contain any debt owned by major shareholders who
own more than 5% of the Company’s share capital.
4. Dividends receivable
(1) Details of dividends receivable
Items Jan 1, 2013 Increment Decrement Jun 30, 2013
Hainan Pearl River Guanzhuang Co., Ltd. 260,015.00 260,015.00
Southwest securities Co., Ltd. 3,064,013.00 89,013.00 2,975,000.00
Total 260,015.00 3,064,013.00 89,013.00 3,235,015.00
(2) Dividends receivable exceed one year
Ending Impairment
Invested company Age Reason
balance loss
Hainan Pearl River The investee confronts the problem of
4-5years 260,015.00 None
Guanzhuang Co., Ltd. tight budget.
- 40 -
Hainan Pearl River Holding Company Limited Notes on Semi-annual Report 2013
Ending Impairment
Invested company Age Reason
balance loss
Total 260,015.00
5. Other receivables
(1) Others receivable listed by categories
Jun 30, 2013 Jan 1, 2013
Bad Debt Bad Debt
Categories Amounts Amounts
Provision Provision
Ratio Ratio Ratio Ratio
Amounts Amounts Amounts Amounts
(%) (%) (%) (%)
1. Significant others
receivable and bad debts 25,978,479.90 7.12 25,978,479.90 100.00 28,278,479.90 7.84 25,978,479.90 91.87
accounted individually
2. Bad debt accounted by
the combinations
Age Combinations 333,067,568.30 91.27 14,797,696.23 4.44 325,199,118.19 90.18 15,993,873.77 4.91
Combined Subtotal 333,067,568.30 91.27 14,797,696.23 4.44 325,199,118.19 90.18 15,993,873.77 4.91
3. Other unimportant
receivables but bad debts 5,861,321.82 1.61 4,325,695.47 73.80 7,126,854.84 1.98 4,350,449.57 69.26
accounted individually
Total 364,907,370.02 100.00 45,101,871.60 360,604,452.93 100.00 46,322,803.24
Note: Details about related party’s transaction refer to ‘Notes VI. 5. (3)’.
(2) Aging analysis
Jun 30, 2013 Jan 1, 2013
Ages
Balance Proportion (%) Bad debts Balance Proportion (%) Bad debts
Within 1 year 139,934,968.29 42.02 2,798,699.37 103,336,115.00 31.78 2,066,722.30
1-2 years 178,040,494.19 53.45 8,902,024.71 206,378,826.84 63.46 10,318,941.35
2-3 years 10,834,629.54 3.25 1,083,462.95 10,324,919.34 3.17 1,032,491.93
3-5 years 383,303.14 0.12 76,660.63 2,531.21 0.00 506.24
4-5 years 1,190.00 0.00 357.00 15,754.78 0.00 4,726.44
Over 5 years 3,872,983.14 1.16 1,936,491.57 5,140,971.02 1.58 2,570,485.51
Total 333,067,568.30 100.00 14,797,696.23 325,199,118.19 100.00 15,993,873.77
（3）Top five units of others receivable
Relationship with Proportion of total
Name Owned amount Ages
the company Other receivable (%)
Public Investment Co., Ltd（note1） Unrelated Party 151,000,000.00 1-2 years 41.38
Beijing Kangtai Xingye Investment Co.,Ltd（note2） Unrelated Party 100,000,000.00 1-2 years 27.40
Within 1
China Great Land Holdings Ltd（note3） Unrelated Party 30,000,000.00 8.22
year
Hainan Pearl River Guanzhuang Co., Ltd. Unrelated Party 8,375,331.68 1-3 years: 2.30
Over 5
Shenzhen Yinxiang Computer Co., Ltd Unrelated Party 6,482,625.00 1.78
years
Note1: On 3rd January 2011, the proposal of ‘the private railway sidings for Mulin town as well as coal wholesale market
construction cooperation project’ was signed between Public Investment Co., Ltd and the Company. On 28th June 2011, the project
supplementary agreement was signed, which stipulates the joint investment of the the private railway sidings for Mulin town as well
as coal wholesale market construction project. Under the agreement, staged financing is required from both parties while the upper
limit investment amount for the Pearl River Holding is RMB140 million. With regard to the project income distribution, the
- 41 -
Hainan Pearl River Holding Company Limited Notes on Semi-annual Report 2013
company enjoys a 60% of the return while the partner enjoys the rest 40% during the transition period. Once the transition period
ends, the Company has the priority to choose whether or not to participate in the operating management and enjoying earnings
through ownership investment. If the Company chooses to quit the project investment, the Public Investment Corporation must
promise an annual investment return no less than 25% of the aggregate investment. Consistent with agreement, the Company has
already made the payment of RMB 140 million to the designated account of the Public Investment Corporation. The Beijing branch
investment & consultation firm which belongs to the Company will supervise the use of the funds all the way from the project
approval, construction to project management. In 2012, the two parties signed supplementary agreement that increase investment
37 million in coal labouratory and lignite purification production line. In March 2013, a memorandum(2) agreed Public Investment
Co., Ltd to pay investment income 5 million comes from Sep 1,2012 to Feb 28,2013 according to prior income distribution terms.
Other way, the project has no progress because the coal business license has not been gained, so Public Investment Co., Ltd agreed
to return investment principal 26 million. By the end of June 30, 2013,the money was obtained.
Note2: On 18th July 2011, the Company has signed a cooperation proposal together with Beijing Kangtai Xingye
Investment Co., Ltd and the natural person, Lijun Gu. Under the proposal, a project company will be co-founded by
the capital rejection of RMB70 million from the natural person and the capped capital contribution of RMB 64
million from the Company. That is, the natural person, Lijun Gu holds an equity stake of 60%, the Company occupied
40%. The project company is responsible for the development and sales of the iron and ore resources at Dujiawan
magnetite iron ore and Zhaojiayuan iron ore located at Shiyan city, Hubei province. The company has already made a
payment of RMB 60 million to the designated account of Beijing Kangtai Xingye Investment Company. Lijun Gu
and the Beijing Kangtai Xingye Investment Company uses their respective 70% ownership holding rights in Yuxi
Shengying mining industry limited liability company as the pledged collateral to the Company.
Note3: The company and China Great Land Holdings Ltd(Hereinafter referred to as CGL) signed Memorandum and Co-operation F
rame Agreement individually In May and August 2013. Dual parties agreed that develop land located in Sanya litchi ditch Industrial
Park Hairun Road No. 20 ,which owned by CGL’s subsidiary of Sanya Pearl River Guanzhuang Co., Ltd..The company acquired 51
% shareholding at the cost of 30 million. These cash should be paid for pre-development costs including solving land licence 、
relocation and so on. The company is responsible for organize project company to change the nature of land use and land obtain stat
e-owned land transfer procedures after CGL clean off factory and equipment. After this, the company will pay 20 million to buy ano
ther 29% shareholding . Two parties cooperate on the development of the real estate project.
6. Inventories
(1) Inventories category
Jun 30, 2013 Jan 1, 2013
Items Ending Provision for Ending Provision for
Book value Book value
Balance Inventory Balance Inventory
Raw materials 2,773,234.57 2,773,234.57 4,027,601.00 4,027,601.00
Low-value
consumption 695,002.02 695,002.02 778,636.32 778,636.32
goods:
Finished goods 394,089.98 394,089.98 481,055.90 481,055.90
Constructing
development 60,347,584.83 60,347,584.83 55,244,449.87 55,244,449.87
product
Development
69,561,556.87 22,156,987.01 47,404,569.86 71,226,465.81 22,156,987.01 49,069,478.80
products
Consumptive
biological 161,750.92 161,750.92 147,950.92 147,950.92
assets
Total 133,933,219.19 22,156,987.01 111,776,232.18 131,906,159.82 22,156,987.01 109,749,172.81
(2) Inventories impairment provision
- 42 -
Hainan Pearl River Holding Company Limited Notes on Semi-annual Report 2013
Decrement
Items 1 Jan,2013 Increment 30 Jun,2013
Transfer back Write off
Development
22,156,987.01 22,156,987.01
product
Total 22,156,987.01 22,156,987.01
Note: For this reporting period, the 5th floor of skirt building in Pearl River Square has been rented out to the public.
The development products were categorized into investment real estate and the corresponding impairment was
transferred into the investment real estate.
7. Other current assets
Items June 30, 2013 January 1, 2013
The trust plans investment 3,000,000.00
Total 3,000,000.00
8. Available for sales financial assets
Available for sales financial assets listed by categories
Items Fair value at Jun 30,2013 Fair value at Jan 1,2013
Available for sales equity instrument 235,009,797.10 273,616,360.90
Total 235,009,797.10 273,616,360.90
Note: The Company holds 30,640,130 shares of stock of Southwest Securities. The yearend book value is RMB
39,127,562.13 while the market price is RMB 7.76 per share.
9. Joint investment and joint venture investment
Joint venture investment
Percentage Percentage
Registration legal Business Registered of equity of vote right
Name Nature
address representative Character capital
interest（%） （%）
Sanya Wanjia
Limited Entertainment
Enterprises Sanya, Hainan Qing Zheng 100,000,000.00 40 40
liability Service
Holding Co., Ltd
Beijing Found
Limited Entertainment
Vision Media Co., Beijing Qing Zheng 3,000,000.00 49 49
liability Service
Ltd.
Beijing Sunshine
Tiansheng
Limited Property
Property Beijing Qing Zheng 5,000,000.00 30 30
liability Management
Management
Co., Ltd.
Ending
Ending
Ending Balance Balance of Operating
Name Balance of Net Net profit
of Total Assets Total Income
Assets
Liabilities
Sanya Wanjia Enterprises Holding
91,180,844.78 1,189,930.60 89,990,914.18 -1,251,292.67
Co., Ltd
Beijing Found Vision Media Co.,
6,311,546.53 3,380,006.00 2,931,540.53 3,634,200.00 -14,242.85
Ltd.
- 43 -
Hainan Pearl River Holding Company Limited Notes on Semi-annual Report 2013
Ending
Ending
Ending Balance Balance of Operating
Name Balance of Net Net profit
of Total Assets Total Income
Assets
Liabilities
Beijing Sunshine Tiansheng
10,434,498.45 5,922,943.80 4,511,554.65
Property Management Co., Ltd.
10. Long-term Equity Investment
Percentag
Initial Percentage Current
Accounting Beginning Increase or Ending e of vote Impairment loss
Name investment of equity impairm
Method Balance decrease Balance right provision
Cost interest（%） ent loss
（%）
Sanya Wanjia Enterprises Holding
Equity
Co., Ltd. 40,000,000.00 36,496,882.74 -500,517.07 35,996,365.67 40 40
Method
Beijing Found Vision Media Co., Equity
1,470,000.00 1,443,433.86 -6,979.00 1,436,454.86 49 49
Ltd. Method
Beijing Sunshine Tiansheng Equity
1,500,000.00 1,407,089.84 1,407,089.84 30 30
Property Management Co., Ltd. Method
Subtotal for Equity Method 42,970,000.00 39,347,406.44 -507,496.07 38,839,910.37
Hainan Pearl River Guanzhuang
Cost Method 426,315.00 426,315.00 426,315.00 1.33 1.33
Co., Ltd
Hainan Tongsheng Ports Co., Ltd Cost Method 6,000,000.00 6,000,000.00 6,000,000.00 15 15 6,000,000.00
Hainan Chamber of Commerce Cost Method 500,000.00 500,000.00 500,000.00 6.67 6.67 500,000.00
Network Science and Technology
Cost Method 10,000,000.00 10,000,000.00 10,000,000.00 10 10 10,000,000.00
Investment Co.
Hainan Huadi Pearl River
Cost Method 160,000.00 160,000.00 160,000.00 2 2
Foundation Engineering Co., Ltd.
Guangzhou Pearl River Investment
Cost Method 18,177,240.29 18,177,240.29 18,177,240.29 9.4785 9.4785 7,352,245.39
Management Co., Ltd
Hainan Nanyang Shipping
Cost Method 1,680,000.00 1,680,000.00 1,680,000.00 1,680,000.00
Industrial Company Limited
Subtotal for Cost Method 36,943,555.29 36,943,555.29 0.00 36,943,555.29 25,532,245.39
Total 79,913,555.29 76,290,961.73 -507,496.07 75,783,465.66 25,532,245.39
11. Investment real estates
Items 1 Jan,2013 Increment Decrement 30 Jun,2013
I. Original value 34,136,579.92 214,708.52 33,921,871.40
Buildings and structures 34,136,579.92 214,708.52 33,921,871.40
II. Accumulated depreciation and amortization 5,394,945.18 582,349.56 52,059.89 5,925,234.85
Buildings and structures 5,394,945.18 582,349.56 52,059.89 5,925,234.85
III. Impairment provision 3,432,927.60 3,432,927.60
Buildings and structures 3,432,927.60 3,432,927.60
IV. Book value 25,308,707.14 24,563,708.95
Buildings and structures 25,308,707.14 24,563,708.95
Note: The corresponding depreciation costs for this reporting period was RMB 584,729.27 Yuan.
12. Fixed assets
Items 1 Jan,2013 Increment Decrement 30 Jun,2013
I. Original value 480,087,946.63 2,096,702.45 268,638.00 481,916,011.08
Buildings & Houses 330,766,320.66 330,766,320.66
Motor Vehicle 40,084,486.63 1,233,027.55 187,867.00 41,129,647.18
General equipment 56,706,072.65 56,706,072.65
Other equipments 52,531,066.69 863,674.90 80,771.00 53,313,970.59
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Hainan Pearl River Holding Company Limited Notes on Semi-annual Report 2013
Items 1 Jan,2013 Increment Decrement 30 Jun,2013
II. Accumulated
138,267,103.45 13,576,038.19 169,804.34 151,673,337.30
depreciation
Buildings & Houses 56,767,161.14 6,125,494.03 62,892,655.17
Motor Vehicle 15,139,722.56 2,598,759.58 109,607.49 17,628,874.65
General equipment 30,058,111.90 1,770,942.96 31,829,054.86
Other equipments 36,302,107.85 3,080,841.62 60,196.85 39,322,752.62
III. Impairment provision 7,499,295.92 7,499,295.92
Buildings & Houses 7,499,295.92 7,499,295.92
Motor Vehicle
General equipment
Other equipments
IV. Book value 334,321,547.26 322,743,377.86
Buildings & Houses 266,499,863.60 260,374,369.57
Motor Vehicle 24,944,764.07 23,500,772.53
General equipment 26,647,960.75 24,877,017.79
Other equipments 16,228,958.84 13,991,217.97
Note: The depreciation cost of this period was RMB13,576,038.19Yuan.
13. Construction in progress
30 Jun,2013 1 Jan,2013
Project name Ending Impairment Ending Impairment
Book value Book value
Balance loss provision Balance loss provision
Central heating
6,449,989.00 6,449,989.00 6,361,888.00 6,361,888.00
station of Snow town
Little Train 550 5,648,964.09 5,648,964.09 5,648,964.09 5,648,964.09
Little Train 400 4,180,000.00 4,180,000.00 4,180,000.00 4,180,000.00
Earlier stage of Snow
2,194,595.49 2,194,595.49 2,194,595.49 2,194,595.49
town Project
Studio project of
955,000.00 955,000.00 955,000.00 955,000.00
Er’long Mountain
Snow town
680,000.00 680,000.00 680,000.00 680,000.00
impression
Ski Equipment
building project of 286,100.00 286,100.00 286,100.00 286,100.00
yangcao Mountain
Forest Park area
250,000.00 250,000.00 250,000.00 250,000.00
projects
National Forest Park
200,000.00 200,000.00 200,000.00 200,000.00
Of Snow town
Expansion project of
96,000.00 96,000.00 96,000.00 96,000.00
Snow town
Family hotel of Snow
1,882,621.50 1,882,621.50 654,800.50 654,800.50
town
Indirect cost 15,358,172.20 15,358,172.20 13,339,824.98 13,339,824.98
Ski Equipment
building project of 41,452.00 41,452.00 41,452.00 41,452.00
double peak
Fire-fighting
equipment of Staff 20,000.00 20,000.00 20,000.00 20,000.00
Residence
Total 38,242,894.28 38,242,894.28 34,908,625.06 34,908,625.06
- 45 -
Hainan Pearl River Holding Company Limited Notes on Semi-annual Report 2013
14. Engineering Materials
Items 1 Jan 2013 Increment Decrement 30 Jun 2013
Special equipment 606,206.60 606,206.60
Total 606,206.60 606,206.60
15. Intangible assets
Items 1 Jan 2013 Increment Decrement 30 Jun 2013
I. Original value 38,768,063.93 154,700.00 38,922,763.93
Software 1,841,378.28 1,841,378.28
Land use right 34,839,553.65 154,700.00 34,994,253.65
Shanghai house use right 695,732.00 695,732.00
Zhenghe membership of Sanya
Hongzhou International 480,000.00 480,000.00
Yacht Club
Golf membership of Nanli Lake 911,400.00 911,400.00
II.Accumulative amortization 6,220,113.07 594,498.80 6,814,611.87
Software 753,330.60 133,076.37 886,406.97
Land use right 5,129,724.53 444,215.97 5,573,940.50
Shanghai house use right 272,146.74 6,957.32 279,104.06
Zhenghe membership of Sanya
Hongzhou International 64,911.20 10,249.14 75,160.34
Yacht Club
Golf membership of Nanli Lake
III. Total impairment loss provision 911,400.00 911,400.00
Golf membership of Nanli Lake 911,400.00 911,400.00
IV. Carrying amount 31,636,550.86 —— —— 31,196,752.06
Software 1,088,047.68 —— —— 954,971.31
Land use right 29,709,829.12 —— —— 29,420,313.15
Shanghai house use right 423,585.26 416,627.94
Zhenghe membership of Sanya
Hongzhou International 415,088.80 —— —— 404,839.66
Yacht Club
Golf membership of Nanli Lake —— ——
Note: 1. The amortization of this year is 594,498.80 Yuan.
2. The yearend land use right used as mortgage or collateral holds a book value of 27,947,204.46Yuan. More
details are explained at “Note V.19”.
16. Long-term prepayments
Items 1 Jan 2013 Increment Amortization Other decrements 30 Jun 2013
Decoration 3,546,102.26 5,700.00 421,526.38 3,130,275.88
Ski rental fee 3,900,000.00 450,000.00 3,450,000.00
Technical service
373,325.33 70,002.00 303,323.33
fee
Financial
15,750,000.00 939,835.62 4,768,524.48 11,921,311.14
consulting fee
- 46 -
Hainan Pearl River Holding Company Limited Notes on Semi-annual Report 2013
Items 1 Jan 2013 Increment Amortization Other decrements 30 Jun 2013
Advertisement fee
251,533.37 30,799.98 220,733.39
of Snow town
Rental fee of
599,833.33 61,000.02 538,833.31
fishpond
Use fee of Ski
959,831.67 920,000.00 123,276.64 1,756,555.03
Course
Total 25,380,625.96 1,865,535.62 5,925,129.50 0.00 21,321,032.08
17. Deferred income tax asset and deferred income tax liability
(1) Identified deferred income tax liability
Items 30 Jun 2013 1 Jan 2013
Deferred income tax liability： 37,949,548.40 47,601,189.35
Changes on the fair value of available for sales
37,151,157.63 46,802,798.58
financial assets credited to capital reserves
Difference between fair value and the book value of net
798,390.77 798,390.77
assets of purchased unit as business combination
(2) Unrecognized deferred income tax asset
Items 30 Jun 2013 1 Jan 2013
Deductible temporary differences 115,348,981.49 116,383,926.62
Deductible losses 200,433,437.16 200,433,437.16
Total 315,782,418.65 316,817,363.78
18. Assets impairment provision
Decrement
Items 1 Jan 2013 Increment Transfer Write Other 30 Jun 2013
back off Decrement
Bad debt provision 56,851,070.70 109,249.32 1,144,194.45 55,816,125.57
Inventories impairment provision 22,156,987.01 22,156,987.01
long-term equity investment impairment
25,532,245.39 25,532,245.39
provision
Investment property impairment
3,432,927.60 3,432,927.60
provision
Fixed assets impairment provision 7,499,295.92 7,499,295.92
Intangible assets impairment provision 911,400.00 911,400.00
Total 116,383,926.62 109,249.32 1,144,194.45 115,348,981.49
19. Assets with restricted ownership
Items Assets name Amount Remark
Current
assets:
Development 21/F, Longzhu It has been mortgaged for loan 15 million Yuan
1,048,080.60
product Building (Haikou Property right certificate No. 17606).
Development It has been mortgaged for loan 20 million Yuan
6/F,Dijing Building 3,775,954.85
product (Property right certificate No. 21126).
Underground 2th It has been mortgaged for loan 50 million Yuan
Development
parking garage in 24,981,790.84
product (Property right certificate No. 012780、075211).
Shanghai
Investment
real estates:
- 47 -
Hainan Pearl River Holding Company Limited Notes on Semi-annual Report 2013
Items Assets name Amount Remark
West of fifth floor, It has been mortgaged to the Mortgagee for loan 18
Buildings and
Podium Building Of 7,442,195.63 million Yuan (Haikou Property right certificate No.
structures
Pearl River Square 17815).
Buildings and East skirt building It has been mortgaged for loan 50 million Yuan
4,919,287.58
structures in Shanghai (Property right certificate No. 012780、075211).
Underground 1th It has been mortgaged for loan 50 million Yuan
Buildings and
parking garage in 5,899,449.92
structures (Property right certificate No. 012780、075211).
Shanghai
Fixed assets:
Main Building of It has been mortgaged to the Bank of China Hainan
Buildings and
Days Hotel & Suites 172,396,767.27 Yeshumeng branch for loan 110 million Yuan (Contract
structures
Sanya Resort No.G004-1).
It has been mortgaged to the Bank of China Hainan
Buildings and Hotel Villa A, B &
8,105,611.77 Yeshumeng branch for loan 110 million Yuan (Contract
structures C
No.G004-1).
It has been mortgaged to Heilongjiang Xinzheng
Hailin Wanjia
Investment Guarantee Group Co., Ltd for loan 110
Buildings and Snowtown Holiday
63,718,476.55 million Yuan (Property right certificate No as follow
structures Hotel& Staff
No:23141202100002, 23141202100003,
Residence
23141202100006, 23141202100007).
29/F, Imperial
Buildings and it has been mortgaged to the Mortgagee for loan 15
Mansion of Pearl 3,978,925.34
structures million Yuan (Property right certificate No. 21093).
River Square
22/F, Longzhu
Buildings and Mansion & it has been mortgaged to the Mortgagee for loan 15
1,040,976.48
structures Northeast of the million Yuan (Property right certificate No. 17606).
third floor
Intangible
assets:
Main Building of It has been mortgaged to the Bank of China Hainan
Land use rights Days Hotel & Suites 25,296,098.72 Yeshumeng branch for loan 110 million Yuan (Contract
Sanya Resort No.G004-2).
It has been mortgaged to the Bank of China Hainan
Hotel Villa A, B &
Land use rights 1,529,208.78 Yeshumeng branch for loan 110 million Yuan (Contract
C
No.G004-2).
Hailin Wanjia It has been mortgaged to Heilongjiang Xinzheng
Snowtown Holiday Investment Guarantee Group Co., Ltd for loan 110
Land use rights 1,121,896.96
Hotel& Staff million Yuan (Property right certificate NO as follow:
Residence No. 25100044, 25100058, 25100322,25100323).
3. Pledged
assets
Available for 29.75 millions It has been mortgaged to Beijing Xinxing Real Estate
sales financial Shares of Southwest 228,182,500.00 Development corporation for the loan of 230 million
assets Security Yuan.
Total 553,437,221.29
Note: Assets with restricted ownership are mainly used for guarantee of bank loans.
20. Short-term loan
1. Short-term loan disclosed by categories
Category Jun 30, 2013 Jan 1, 2013
Guaranteed loans
Pledge loans 210,000,000.00
Other loans 1,000,000.00
Total 1,000,000.00 210,000,000.00
21. Accounts payable
Ages Jun 30, 2013 Jan 1, 2013
- 48 -
Hainan Pearl River Holding Company Limited Notes on Semi-annual Report 2013
Ending Balance Percentage (%) Opening Balance Percentage (%)
Within 1 year 5,318,760.74 26.35 6,406,466.62 31.25
1 to 2 years 236,634.03 1.17 314,342.09 1.53
2 to 3 years 5,270,389.06 26.11 6,223,495.32 30.35
3 years and more 9,356,914.08 46.37 7,558,819.49 36.87
Total 20,182,697.91 100.00 20,503,123.52 100.00
Note: The end of this reporting period did not contain debt owned by any major shareholders who own more than 5%
of the Company’s share capital. And there were no related parties involved for the final balance.
22. Accounts received in advance
Jun 30, 2013 Jan 1, 2013
Ages
Ending Balance Percentage (%) Opening Balance Percentage (%)
Within 1 year 16,703,337.50 96.31 18,175,760.12 95.49
Over 1 year 639,828.11 3.69 858,050.78 4.51
Total 17,343,165.61 100.00 19,033,810.90 100.00
Note:The end of this reporting period did not contain debt owned by any major shareholders who own more than 5%
of the Company’s share capital. And the yearend balance excluded any related party.
23. Accrued payroll
Items Jan 1, 2013 Increment Decrement Jun 30, 2013
I. Salary, bonus, allowance 2,721,294.54 50,680,804.12 52,339,479.83 1,062,618.83
II. Employee Welfare expenses 5,436,113.42 5,436,113.42
III. Social insurance 5,830,579.18 5,830,579.18
Where:1)Medical insurance 1,964,773.44 1,964,773.44
2)Supplementary medical insurance
3) Endowment insurance 3,351,950.83 3,351,950.83
4)annuity
5) Unemployment insurance 266,449.04 266,449.04
6) Working accident insurance 119,638.81 119,638.81
7) Maternity insurance 127,767.06 127,767.06
IV. Housing accumulation fund 866,959.56 866,959.56
V. Labor union fees& Employee education fees 6,460,461.30 1,343,307.81 767,654.35 7,036,114.76
VI. Non-monetary welfares
VII. Compensation for dismissal 23,400.00 23,400.00
VIII.Others
Total 9,181,755.84 64,181,164.09 65,264,186.34 8,098,733.59
24. Taxes payable
Items Jun 30, 2013 Jan 1, 2013
VAT -150,726.70 -112,925.00
Individual income tax 59,037.38 68,706.10
- 49 -
Hainan Pearl River Holding Company Limited Notes on Semi-annual Report 2013
Items Jun 30, 2013 Jan 1, 2013
City construction and maintenance tax 88,404.92 128,660.39
Corporate income tax -1,040,381.61 -383,007.76
Property tax 138,132.54 168,966.90
Business tax 708,402.61 1,571,990.12
Land use tax 79,762.62 79,762.62
Increment tax on land value -1,292,728.42 528,297.19
Educational surtax -84,196.10 -48,416.93
Others 215,169.90 203,699.28
Total -1,279,122.86 2,205,732.91
25. Interest payable
Item Jun 30, 2013 Jan 1, 2013
Long-term loan
Short-term loan 4,937,222.23
Company loan 104,764,243.15 96,988,987.39
Entrusted loan 10,449,888.49 10,449,888.49
Others 176,133.00 176,133.00
Total 115,390,264.64 112,552,231.11
Note: Details refer to Note VI.4.
26. Dividend payable
Investor Jun 30, 2013 Jan 1, 2013
Dividend payable of institutional shares 3,213,302.88 3,213,302.88
Total 3,213,302.88 3,213,302.88
Note: The listed dividend payable was generated from previous years but has been unable to reach the relevant
creditorswhose details have not been retained.
27. Other payables
Jun 30, 2013 Jan 1, 2013
Age Percentage Percentage
Ending Balance Opening Balance
(%) (%)
Within 1 year 380,618,732.38 56.23 91,185,835.59 24.00
1 to 2 years 22,629,215.63 3.34 14,463,245.93 3.81
2 to 3 years 29,744,041.88 4.39 28,936,036.85 7.62
3 years and more 243,958,860.39 36.04 245,285,911.67 64.57
Total 676,950,850.28 100.00 379,871,030.04 100.00
Note 1: Among the balance of the period end, there are loans of shareholders holdingover 5% of the Company’s
equity (including 5%). Details refer to “Notes VI. Related party relationship and transactions”.
2: Other payables over 3 years are mainly caused by the loan from the shareholders. Details refer to “Notes
- 50 -
Hainan Pearl River Holding Company Limited Notes on Semi-annual Report 2013
VI.Related party relationship and transactions”.
28. Non-current liabilities due within one year
1. Disclose by category
Category Jun 30, 2013 Jan 1, 2013
Long-term loans due within one year 31,000,000.00 28,000,000.00
Total 31,000,000.00 28,000,000.00
2. Details related to long-term loans due within one year
Category Jun 30, 2013 Jan 1, 2013
Pledge loans 18,000,000.00 15,000,000.00
Mortgage loans 13,000,000.00 13,000,000.00
Total 31,000,000.00 28,000,000.00
29. Long-term borrowings
(1). Long-term borrowings listed by categories
Category Jun 30, 2013 Jan 1, 2013
Pledge loans 98,000,000.00 110,000,000.00
Mortgage loans 263,000,000.00 259,000,000.00
Less: Long-term loans due within one
year 31,000,000.00 28,000,000.00
Total 330,000,000.00 341,000,000.00
(2). Loan details
Loan staring Loan due Interest rate
Lender Currency Jun 30, 2013 Jan 1, 2013
date date (%)
Chongqing
International
2012-9-27 2014-9-26 RMB 13% 193,000,000.00 178,000,000.00
Trust Co.,
Ltd
Bank of
10%
China,
upward-floating
Haikou 2009-8-2 2009-8-2 RMB 70,000,000.00 81,000,000.00
of benchmark
Yeshumen
interest rate
Branch
Construction
10%
Bank of
upward-floating
China 2012-1-12 2019-1-11 RMB 98,000,000.00 110,000,000.00
of benchmark
Mudanjiang
interest rate
Branch
Total 361,000,000.00 369,000,000.00
(3). Mortgage loan details
Lender Loan amount Mortgagor/mortgage
There properties owned by
Bank of China, Haikou Yeshumen
70,000,000.00 SanyaWanjia Hotel Management Co.,
Branch
Ltd
Hotel Villa A, B & C owned by
Chongqing International Trust Co., Ltd 193,000,000.00 company
- 51 -
Hainan Pearl River Holding Company Limited Notes on Semi-annual Report 2013
Total 263,000,000.00
(4). Guaranteed loan details
Lender Loan amount Mortgagor/mortgage
China construction bank Mudanjiang Heilongjiang Xinzheng Guarantee
98,000,000.00
Branch CO.,Ltd.
Total 98,000,000.00
30. Share capital
Unit: share
Increment or decrement (+,-)
Items Jan 1, 2013 issued Jun 30, 2013
Bonus Surplus
new others subtotal
issue converted
shares
1. Unlisted
1,325,131.00 1,325,131.00
shares
State owned shares
Other domestic
1,325,131.00 1,325,131.00
shares
Including:Domestic
1,299,500.00 1,299,500.00
corporate shares
Domestic natural
25,631.00 25,631.00
person shares
2.Listed shares 425,420,273.00 425,420,273.00
A shares 360,445,273.00 360,445,273.00
B shares 64,975,000.00 64,975,000.00
3. Total shares 426,745,404.00 426,745,404.00
31. Capital surplus
Items Jan 1, 2013 Increment Decrement Jun 30, 2013
Capital reserve spill price 224,960,139.16 224,960,139.16
Others capital surplus 296,986,018.01 268,031,095.16
-Including: Old capital surplus converted into 109,300,017.82 109,300,017.82
-Changes on fair value of available for sales
187,686,000.19 9,651,640.95 38,606,563.80 158,731,077.34
financial assets
Total 521,946,157.17 9,651,640.95 38,606,563.80 492,991,234.32
Note: The closing balance is lower than the opening balance was caused by the fall of fair value of the Southwest
Securities（600369）holding by the company.
32. Surplus reserves
Items Jun 30, 2013 Jan 1, 2013
Statutory surplus reserve 71,852,236.46 71,852,236.46
General surplus reserve 37,634,827.93 37,634,827.93
Total 109,487,064.39 109,487,064.39
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Hainan Pearl River Holding Company Limited Notes on Semi-annual Report 2013
33. Undistributed profits
Items Amounts allocation proportion
Non-adjusted ending balance of the year 2011 -820,552,991.12
Adjusted opening balance of the year 2012
Add: Net profit attributed to the owners of the
-64,455,008.65
parent company
Less：Statutory surplus reserve
Random surplus reserve
Common risk provision
Dividend payable of Ordinary shares
Share capital converted from dividend of
ordinary shares
Undistributed profit at the end of period -885,007,999.77
Note: Details of opening balance adjustment refer to ‘Notes II’
34. Operating income and operating costs
(1) Operating income
Items Jan.–Jun, 2013 Jan.–Jun, 2012
Main operating business income 105,260,371.31 106,738,188.00
Other operating business income 1,962,649.82 1,603,768.20
Total 107,223,021.13 108,341,956.20
(2) Operating costs
Items Jan.–Jun, 2013 Jan.–Jun, 2012
Main operating business costs 77,050,709.29 74,091,449.93
Other operating business costs 789,203.16 877,705.99
Total 77,839,912.45 74,969,155.92
(3) The details of main operating businesses were as follows according to products:
Jan.–Jun, 2013 Jan.–Jun, 2012
Items Main operating Main operating Main operating Main operating
business income business costs business income business costs
Real estate sales 3,036,947.00 1,664,908.94 22,880,211.00 11,265,104.81
Property
management 66,975,789.68 59,681,900.63 52,229,168.34 47,199,383.70
services
Tourist hotel
35,247,634.63 15,703,899.72 31,628,808.66 15,626,961.42
services
(4) The details of main operating businesses were as follows according to regions:
Jan.–Jun, 2013 Jan.–Jun, 2012
Location Main operating Main operating Main operating Main operating
business income business costs business income business costs
Hubei 3,342,296.00 1,950,397.51 23,204,485.40 11,545,548.88
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Hainan Pearl River Holding Company Limited Notes on Semi-annual Report 2013
Heilongjiang 13,034,764.00 5,970,500.52 10,655,348.89 5,768,063.03
Hainan 87,413,512.61 69,113,795.26 71,616,099.07 56,766,608.22
Shanghai 1,469,798.70 16,016.00 1,262,254.64 11,229.80
Beijing
Total 105,260,371.31 77,050,709.29 106,738,188.00 74,091,449.93
35. Operating taxes and extras
Items Jan.–Jun, 2013 Jan.–Jun, 2012
City construction and maintenance tax 375,280.57 379,196.85
Education fee 160,834.53 162,512.93
Business tax 5,361,151.06 5,417,097.82
Land value-added tax 247,261.79 2,557,474.78
Others 215,759.24 391,645.17
Total 6,360,287.19 8,907,927.55
36. Operating expenses
Items Jan.–Jun, 2013 Jan.–Jun, 2012
Payroll expense 2,585,706.55 1,807,759.95
Hotel operating expense 70,683.48 710,022.24
Consignment commission charge 57,376.00 322,782.00
Advertising fees 455,438.35 414,620.00
other selling expenses 1,437,740.82 1,624,473.92
合计 4,606,945.20 4,879,658.11
37. General and administrative expenses
Items Jan.–Jun, 2013 Jan.–Jun, 2012
Payroll expense 14,392,651.97 13,497,289.33
Depreciation expense 13,089,878.88 13,526,583.63
Business entertainment 3,995,242.19 5,618,596.22
Taxation expenses 1,356,446.42 1,382,836.82
Other expenses 13,906,860.08 18,975,286.30
Total 46,741,079.54 53,000,592.30
38. Financial expenses
Items Jan.–Jun, 2013 Jan.–Jun, 2012
Interest exchange 36,249,972.87 30,404,530.84
Less: interest revenue 4,510,235.18 3,116,505.15
Foreign exchange loss
Less: exchange gain
Others 9,133,498.33 1,778,709.57
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Hainan Pearl River Holding Company Limited Notes on Semi-annual Report 2013
Total 40,873,236.02 29,066,735.26
39. Investment income
Items Jan.–Jun, 2013 Jan.–Jun, 2012
Long-term equity investment income accounted by Costs
Method
Long-term equity investment income accounted by Equity
-507,496.07 -429,464.28
Method
Investment income of disposal Long-term equity
18,542,755.18
investment
Dividend income from available for sale financial assets 3,064,013.00
Total 2,556,516.93 18,113,290.90
40. Impairment Loss of Assets
Items Jan.–Jun, 2013 Jan.–Jun, 2012
Bad debts impairment loss -1,034,945.13 -9,117,317.73
Inventories impairment loss
Total -1,034,945.13 -9,117,317.73
41. Non-operating income
Items Jan.–Jun, 2013 Jan.–Jun, 2012
Gain on disposal of non-current assets 29,888.92 60,773.50
Gains on debt restructure
Others 43,386.68 12,116.00
Total 73,275.60 72,889.50
42. Non-operating expenses
Items Jan.–Jun, 2013 Jan.–Jun, 2012
Loss on disposal of fixed assets 15,533.81
Donation 10,000.00 110,000.00
Fine expenditures
Others 45,773.49 16,353.94
Total 71,307.30 126,353.94
43. Income tax
Items Jan.–Jun, 2013 Jan.–Jun, 2012
Income tax this year 175,477.77 1,777,028.96
Deferred income tax
Total 175,477.77 1,777,028.96
44. Earnings per share and diluted earnings per share calculation procedure
Jan.–Jun,
Item Code Jan.–Jun, 2013
2012
Net profits that belong to the common shareholders during P0 -64,455,008.65 -37,734,798.44
- 55 -
Hainan Pearl River Holding Company Limited Notes on Semi-annual Report 2013
Jan.–Jun,
Item Code Jan.–Jun, 2013
2012
the reporting period
Extraordinary profits and losses that belong to the common
A 8,424,616.62 21,302,845.34
shareholders during the reporting period
Net profits that belong to the common shareholders during
the reporting period after taking off the effect of P1=P0-A -72,879,625.27 -59,037,643.78
extraordinary profits and losses
Total number of shares of opening balance S0 426,745,404.00 426,745,404.00
Incremental shares caused by the transfer of surplus to share
capital or stock dividend distribution during the reporting S1
period
Incremental shares caused by issuing new shares or
Si
debt-equity conversion
Number of shares increased from the next month until the
Mi
end of the reporting period
Number of shares reduced caused by repurchasing during
Sj
the reporting period
Number of shares reduced from the next month until the
Mj
end of the reporting period
Shrinking number of shares during the reporting period Sk
Total months during the reporting period M0 6.00 6.00
S=S0+S1+Si*Mi/M0
The weighted average of the common stock issued 426,745,404.00 426,745,404.00
-Sj*Mj/M0-Sk
Earnings per share before taking off extraordinary profits
Y1=P0/S
and losses -0.15 -0.09
Earnings per share after taking off extraordinary profits
Y2=P1/S
and losses -0.17 -0.14
The weighted average of the incremental common stocks
C
caused by warrants, stock options, and convertible bonds
The effects on the net profits that belong to the common
B1
shareholders imposed by dilution issues
The effects on the net profits that belong to the common
shareholders after taking off the impacts of extraordinary B2
profits and losses imposed by dilution issues
Diluted earnings per share before taking off the effect of
Y3=(P0+B1)/(S+C)
extraordinary profits and losses -0.15 -0.09
Diluted earnings per share after taking off the effect of
Y4=(P1+B1+B2)/(S+C)
extraordinary profits and losses -0.17 -0.14
45. Other consolidated income
Items Jan.–Jun, 2013 Jan.–Jun, 2012
Profits and losses generated by available for
-38,606,563.80 83,946,040.00
sale financial assets
Deduce: income tax impacts caused by
-9,651,640.95 20,986,510.00
available for sale financial assets
- 56 -
Hainan Pearl River Holding Company Limited Notes on Semi-annual Report 2013
Items Jan.–Jun, 2013 Jan.–Jun, 2012
Pre-recorded in other comprehensive income
10,927,568.41
into net profit or loss
Total -28,954,922.85 52,031,961.59
46. Information of cash flow statement
(1) Cash received relating to other operating activities
Items Jan.–Jun, 2013
Funds received from Mudanjiang forestry engineering company 362,751.34
Utility Bills 5,056,515.35
The rent deposit, repair fund 2,946,921.20
Other monetary exchanges between enterprises 1,838,527.73
Take back provisions 102,632.00
Interest income 37,348.64
Others 2,125,934.45
Total 12,470,630.71
(2) Cash paid relating to other operating activities
Items Jan.–Jun, 2013
Funds paid to Beijing Kangqiao Yangguang Asset Management Company 12,500,000.00
Funds paid to Beijing Kunzhida Advisory Services Limited 3,200,000.00
Funds paid to Zhong Shi Investment CO.,Ltd. 1,000,000.00
Other monetary exchanges between enterprises 4,069,441.62
The payment of rent deposit, repair fund etc 1,810,882.54
On behalf of clients to pay Public Utility Fee 4,898,718.15
Other fees 14,518,621.93
Provisions payment 856,625.86
Other expensives 2,751,714.81
Total 45,606,004.91
(3)Cash received relating to other investing activities
Items Jan.–Jun, 2013
Interest income 5,647,661.11
Total 5,647,661.11
(4) Cash received relating to other financing activities
Items Jan.–Jun, 2013
Loans from others 1,000,000.00
Total 1,000,000.00
- 57 -
Hainan Pearl River Holding Company Limited Notes on Semi-annual Report 2013
(4) Cash paid relating to other financing activities
Jan.–Jun,
Items
2013
Mudanjiang Pearl River Tourism Investment and Development Group Limited paid for financing
2,700,000.00
collateral charge
Financing consultant charge 1,939,835.62
Loans overdue penalty 5,512,500.00
Other finance charges 3,055,140.00
Total 13,207,475.62
47. Supplementary information of cash flow statement
(1) Supplementary information
Items Jan.–Jun, 2013 Jan.–Jun, 2012
1．Reconciliation of net profit to cash flows from operating activities:
Net profit -65,780,486.68 -37,081,997.71
Add: Provision for assets impairment -1,034,945.13 -9,117,317.73
Depreciation of fixed assets, production biological assets, petroleum and
14,158,387.75 14,579,936.17
natural gas
Amortization of intangible assets 594,498.80 584,381.87
Amortization of long-term prepayments 5,925,129.50 1,247,804.01
Losses on disposal of fixed assets, intangible assets and other long-term
-177,845.19 -268,623.60
assets
Losses on scrapping of fixed assets 13,301.71
Losses on fair value change
Financial expenses 35,886,689.11 28,834,593.64
Investment losses -2,556,516.93 -18,113,290.90
Decrease in deferred income tax assets
Increase in deferred income tax liabilities
Decrease in inventories -2,027,059.37 10,265,558.68
Decrease in operating receivables 132,737,701.82 -23,659,153.37
Increase in operating payables -161,599,964.58 -2,864,315.62
Others
Net cash flows from operating activities -43,861,109.19 -35,592,424.56
2．Significant investing and financing activities that non-cash receipts and
payments
Conversion of debt into capital
Convertible bonds to be expired within one year
Fixed assets under finance lease
3．Net increase in cash and cash equivalents
Cash at the end of the period 55,812,269.33 64,075,389.48
Less: Cash at the beginning of the period 65,762,871.33 52,507,843.73
Add: Cash equivalents at the end of the period
Less: Cash equivalents at the beginning of the period
- 58 -
Hainan Pearl River Holding Company Limited Notes on Semi-annual Report 2013
Items Jan.–Jun, 2013 Jan.–Jun, 2012
Net increase in cash and cash equivalents -9,950,602.00 11,567,545.75
(2) Cash and cash equivalents
Items Jan.–Jun, 2013 Jan.–Jun, 2012
1. Cash 55,812,269.33 65,762,871.33
Including: Cash on hand 515,406.33 1,343,203.42
Bank deposit paid at any time 55,103,676.59 64,325,194.75
Other monetary funds paid at any time 193,186.41 94,473.16
2. cash equivalents
3. Cash and cash equivalents at the end of year 55,812,269.33 65,762,871.33
VI. Related party relationship and transactions
1. Parent company and ultimate controller:
Relationship Voting
Registered Organization Principal Registered Holding
Name with the rights
address code operating capital proportion
Company proportion
Beijing Wangfa
Real estate The first 280
Real Estate
Beijing 60003715-7 development largest million 26.36% 26.36%
Development
and operation shareholder Yuan
Holdings Co., Ltd
2. Information about subsidiaries
Details refer to “Note IV. 1. Subsidiaries established by the Company”.
3. Information about joint venture and affiliate of the Company
Details refer to ‘Note V.9.Long-term equity investment’.
4. Other related parties
Relationship with
Name Organization code
the Company
Beijing ZhongjiaYangguang energy technology (group) Co., Ltd. With same controller 722611348
BeijingYulongJisheng Real Estate Development Co., Ltd. With same controller 72266773-9
5. Transactions of related parties
(1) Internal transactions have already been offset.
(2) Fund calling between related parties
In May 2013, the company obtained five months period loans of 230 million from Beijing
Xinxing Real Estate Development corporation with 29,750,000 shares of Southwest
Securities(SH.600369) shares as collateral. The annual rate is 7%. The company had the cash to
repay loans 210 million and interest owe to Chongqing International Trust Co., LTD.
- 59 -
Hainan Pearl River Holding Company Limited Notes on Semi-annual Report 2013
By June 30, 2013, the total amount of loan principal that Beijing Xinxing Real Estate
Development corporation has been made to the Pearl River Holding has a balance of RMB
338,967,912.90 Yuan with RMB 36,900,358.25 Yuan of interest payable on balance. The total
amount of loan principal that the controlling shareholder Beijing Wanfa Real Estate
Development Corporation has been made to the Pearl River Holding has a balance of RMB
62,025,000.00 Yuan with interest payable on balance of RMB26,448,824.86 Yuan.
By June 30, 2013, the total amount of loan principal that Beijing Xinxing Real Estate
Development corporation has been made to Sanya Wanjia Hotel Management Co., Ltd has a
balance of RMB 32,030,000.00 Yuan with RMB31,242,167.96 Yuan of interest payable on
balance. The total amount of loan principal that Beijing Wanfa Real Estate Development
corporation has been made to Sanya Wanjia Hotel Management Co., Ltd has a balance of RMB
19,700,000.00 Yuan with interest payable on balance of RMB 10,172,892.08 Yuan.
For the loans listed between related parties, the total amount of interest expensed carried for this
reporting period was RMB 7,775,255.76 Yuan with interest payable on balance of RMB
104,764,243.15 Yuan. The interest rate for the loans listed above is based on the People’s Bank
of China’s benchmark interest rate for one-year loan with currency stated in RMB.
(3) Balances of related party receivable and payable
Items Company Name Jun 30, 2013 Jan 1, 2013
Other Beijing ZhongjiaYangguang energy
payables: technology (group) Co., Ltd. 1,578,068.58 1,113,268.02
Beijing Xinxing Real Estate Development
Company 370,997,912.90 140,997,912.90
Beijing Wangfa Real Estate Development
Holdings Co., Ltd 81,725,000.00 81,725,000.00
Beijing YulongJisheng Real Estate
Development Co., Ltd. 1,500,000.00 1,500,000.00
Interest Beijing Wangfa Real Estate Development
payable: Holdings Co., Ltd. 36,621,716.94 34,239,791.95
Beijing Xinxing Real Estate Development
Company 68,142,526.21 62,749,195.44
Total 560,565,224.63 322,325,168.31
VII. Contingent events
Other guarantee issues please refer to Note.V.19.
VIII. Commitments
Nothing need to disclose.
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Hainan Pearl River Holding Company Limited Notes on Semi-annual Report 2013
IX. Non-adjusting events after the balance sheet date
Nothing need to disclose.
X. Other important events
Nothing need to disclose.
XI. Notes to significant items of the parent company’s financial statements
1. Accounts receivable
(1) Detailed information
Jun 30, 2013 Jan 1, 2013
Items Proportio Bad debt Proporti Bad debt
Balance n Bad debts ratio Balance on Bad debts ratio
(%) (%) (%) (%)
1 Individual with
7,761,707.60 64.77 7,761,707.60 100.00
significant amount 7,761,707.60 58.25 7,761,707.60 100.00
2 Bad debt accounted by
the combinations
Age Combinations 3,664,694.67 589,045.46
27.50 16.07 2,915,410.87 23.18 574,059.78 19.69
Combined Subtotal 3,664,694.67 589,045.46
27.50 16.07 2,915,410.87 23.18 574,059.78 19.69
3 Other unimportant
1,898,690.60 1,898,690.60
receivables 14.25 100.00 1,898,690.60 15.10 1,898,690.60 100.00
Total
13,325,092.87 100.00 10,249,443.66 12,575,809.07 100.00 10,234,457.98
(2) Age analysis
Jun 30, 2013 Jan 1, 2013
Age Bad Debts
Amounts Amounts Bad Debts Provision
Provision
Within 1 year 2,304,587.25 62.89 46,091.75 1,555,303.45
1 to 2 years 100,000.00 2.73 5,000.00 100,000.00
2 to 3 years 100,000.00 2.73 10,000.00 100,000.00
3 to 4 year 106,000.00 2.89 21,200.00 106,000.00
4 to 5 years 101,500.00 2.77 30,450.00 101,500.00
5 years and more 952,607.42 25.99 476,303.71 952,607.42
Total 3,664,694.67 100.00 589,045.46 2,915,410.87
2. Other receivables
(1) Detailed information
Jun 30, 2013 Jan 1, 2013
Items Bad
Proportio Bad debt Propo
debt
Balance n Bad debts ratio Balance rtion Bad debts
ratio
(%) (%) (%)
(%)
1. Individual with
significant 24,978,380.89 4.00 24,978,380.89 100.00 77,278,380.89 12.70 34,477,855.47 44.62
amount
2. Bad debt accounted by
the
combinations
Age Combinations 295,838,220.46 47.40 12,084,012.65 4.08 292,350,649.61 48.04 12,815,010.44 4.38
In scope of consolidated
299,278,786.02 47.95 233,952,547.64 38.44
statements
- 61 -
Hainan Pearl River Holding Company Limited Notes on Semi-annual Report 2013
subtotal 595,117,006.48 95.35 12,084,012.65 2.03 526,303,197.25 86.48 12,815,010.44 2.43
3. Other unimportant
4,025,845.72 0.65 3,963,362.46 98.45 5,010,884.80 0.82 3,976,838.29 79.36
receivables
Total 624,121,233.09 100 41,025,756.00 608,592,462.94 100 51,269,704.20
(2) Aging analysis
Jun 30, 2013 Jan 1, 2013
Age Amounts Amounts
Bad Debt Bad Debt
Ratio Provision Ratio Provision
Amounts Amounts
(%) (%)
Within 1 year 110,366,533.58 37.31 2,206,011.29 80,231,301.62 27.44 1,604,626.03
1 to 2 years 175,091,258.54 59.18 8,754,562.93 201,738,919.65 69.01 10,086,945.98
2 to 3 years 10,166,939.34 3.44 1,016,693.93 10,166,939.34 1,016,693.93
3 to 4 year
4 to 5 years
5 years and more 213,489.00 0.07 106,744.50 213,489.00 0.07 106,744.50
Total 295,838,220.46 100.00 12,084,012.65 292,350,649.61 100.00 12,815,010.44
3. Long-term equity investment
Percentage Percentage
Initial
Accounting Beginning Increase or Ending of equity of vote Impairment
Name investment
Method Balance decrease Balance interest right loss provision
Cost
（%） （%）
Hainan Pearl River
Cost
Property & Hotel 4,900,000.00 4,900,000.00 4,900,000.00 98 98
Method
Management Co., Ltd.
Sanya Wanjia Hotel Equity
120,000,000.00 120,000,000.00 120,000,000.00 100 100
Management Co., Ltd. Method
Sanya Wanjia Enterprises Cost
40,000,000.00 36,496,882.74 -500,517.07 35,996,365.67 40 40
Holding Co., Ltd. Method
Hubei Pearl River Real
Estate Development Co., Cost
57,200,000.00 57,200,000.00 57,200,000.00 88 88
Ltd. Method
Hainan Pearl River
Enterprises Holding Co., Cost
40,000,000.00 40,000,000.00 40,000,000.00 100 100 40,000,000.00
Ltd. Shanghai Real Method
Estate Co.
Beijing Jiubo Culture Cost
5,000,000.00 5,000,000.00 5,000,000.00 100 100
Development Co., Ltd. Method
Mudanjiang Pearl River
Cost
Hotel Management Co., 60,000,000.00 60,000,000.00 60,000,000.00 100 100
Method
Ltd.
Hainan Pearl River Cost
426,315.00 426,315.00 426,315.00 1.33 1.33
Guanzhuang Co., Ltd Method
Hainan Tongsheng Ports Cost
6,000,000.00 6,000,000.00 6,000,000.00 15 15 6,000,000.00
Co., Ltd Method
Hainan Chamber of Cost
500,000.00 500,000.00 500,000.00 6.67 6.67 500,000.00
Commerce Method
Network Science and
Cost
Technology Investment 10,000,000.00 10,000,000.00 10,000,000.00 10 10 10,000,000.00
Method
Co.
Hainan Huadi Pearl River
Cost
Foundation Engineering 160,000.00 160,000.00 160,000.00 2 2
Method
Co., Ltd.
Guangzhou Pearl River
Cost
Investment Management 18,177,240.29 18,177,240.29 18,177,240.29 9.48 9.48 7,352,245.39
Method
Co., Ltd
Hainan Nanyang
Cost
Shipping Industrial 1,680,000.00 1,680,000.00 1,680,000.00 1,680,000.00
Method
Company Limited
Hebei zhengshiqinghui
Cost
Real Estate Development 5,100,000.00 5,100,000.00 5,100,000.00 51 51
Co., Ltd. Method
Total 369,143,555.29 365,640,438.03 -500,517.07 365,139,920.96 65,532,245.39
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Hainan Pearl River Holding Company Limited Notes on Semi-annual Report 2013
4. Operating income and operating costs
(1) Operating income
Items Jan.–Jun, 2013 Jan.–Jun, 2012
Main operating business income
Other operating business income 581,744.40 579,338.20
Total 581,744.40 579,338.20
(2) Operating costs
Items Jan.–Jun, 2013 Jan.–Jun, 2012
Main operating business costs
Other operating business costs 177,796.80 177,796.80
Total 177,796.80 177,796.80
5. Investment income
Items Jan.–Jun, 2013 Jan.–Jun, 2012
Income from cost accounting method investment 92,400,000.00
Income from equity accounting method investment -500,517.07 -429,464.28
Income from disposal sellable financial assets 18,542,755.18
Dividend income from available for sale financial assets 3,064,013.00
Total 2,563,495.93 110,513,290.90
6. Supplementary information of cash flow statement
Items Jan.–Jun, 2013 Jan.–Jun, 2012
1．Reconciliation of net profit to cash flows from operating activities:
Net profit -27,448,612.76 87,358,126.84
Add: Provision for assets impairment -10,228,962.52 -3,276,546.96
Depreciation of fixed assets, production biological assets, petroleum and natural
1,036,018.78 1,095,111.06
gas
Amortization of intangible assets 23,831.82 23,831.82
Amortization of long-term prepayments 4,832,342.64
Losses on disposal of fixed assets, intangible assets and other long-term assets
Losses on scrapping of fixed assets
Losses on fair value change
Financial expenses 24,807,495.67 16,000,625.80
Investment losses -2,563,495.93 -110,513,290.90
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Hainan Pearl River Holding Company Limited Notes on Semi-annual Report 2013
Items Jan.–Jun, 2013 Jan.–Jun, 2012
Decrease in deferred income tax assets
Increase in deferred income tax liabilities
Decrease in inventories
Decrease in operating receivables 60,245,837.86 5,854,963.42
Increase in operating payables -8,654,431.12 -487,611.84
Others 0.00
Net cash flows from operating activities 42,050,024.44 -3,944,790.76
2．Significant investing and financing activities that non-cash receipts and
payments
Conversion of debt into capital
Convertible bonds to be expired within one year
Fixed assets under finance lease
3．Net increase in cash and cash equivalents
Cash at the end of the period 959,747.89 12,257,715.18
Less: Cash at the beginning of the period 2,641,297.45 515,955.59
Add: Cash equivalents at the end of the period
Less: Cash equivalents at the beginning of the period
Net increase in cash and cash equivalents -1,681,549.56 11,741,759.59
XII. Supplementary information
1. According to “Information disclosure requirement No.1 for the companies issuing securities publicly –
Non-recurring Profit and Loss [2008]” issued by China Securities Regulatory Commission ([2008] No. 43), the
amount of non-recurring profit and loss is as follows (profit is “+”, loss is “-”):
Jan.–Jun,
Items
2013
Profit and loss on disposal of non-current assets 14,355.11
Fund occupation fee from non-financial enterprises included in the current profit and loss 5,352,253.44
Revenue generated from obtaining subsidiaries, associates and joint venture investment as the
investment cost less than the fair value of identifiable net assets
Gains from disposal of available for sale financial assets excluded effective hedging with operating
Others non-operating income and expenses excluded as above -12,386.81
Other non-operating income and costs 3,064,013.00
Income tax impact -4,195.63
Equity impacts of minority interests -2,186.25
Total 8,424,616.62
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Hainan Pearl River Holding Company Limited Notes on Semi-annual Report 2013
2. Earnings per share
Earnings per share
Profit of this year Basic earnings per share Diluted earnings per share
Jan.–Jun, 2013 Jan.–Jun, 2012 Jan.–Jun, 2013 Jan.–Jun, 2012
Net profit attributable to common
-0.15 -0.09 -0.15 -0.09
shareholders
Net profit excluding non-recurring Profit
and Loss attributable to common -0.17 -0.14 -0.17 -0.14
shareholders
3 Abnormal issues and its related explanations for major accounting statements
(1) Balance sheet
Rate of
Item Jun 30, 2013 Jan 1, 2013 Explanations
change
Increased Property services and hotel revenue
Receivables
17,279,796.94 9,889,336.96 74.73% from subsidiaries
Dividends Declaration of dividends from Southwest
receivable 3,235,015.00 260,015.00 1144.16% Securities CO.,LTD.
Other current The subsidiary purchase collective fund trust
assets 3,000,000.00 100.00% plans
Return loans from Chongqing International
Short-term loans
1,000,000.00 210,000,000.00 -99.52% Trust Company
Other payables 676,950,850.28 379,871,030.04 78.21% Obtain loans from others
Taxes payable -1,279,122.86 2,205,732.91 -157.99% To pay the relevant taxes
(2) Income statement
Rate of
Item Jan.–Jun, 2013 Jan.–Jun, 2012 Explanations
change
Financial expenses 40,873,236.02 29,066,735.26 40.62% Increased financing fees
Loss of devaluation of
-1,034,945.13 -9,117,317.73 88.65% Withdraw the accounts receivable
assets
Disposal of available for sale
Investment income 2,556,516.93 18,113,290.90 -85.89%
financial assets in prior year
Other comprehensive Disposal of available for sale
-28,954,922.85 52,031,961.59 -155.65%
income financial assets in prior year
Net cash flows from
47,611,556.13 60,478,463.75 -21.28% Decrease the loans
financing activities
XIII. Approval of the financial statements
The financial statements have been approved by the board of directors of the Company in August 26
2013
Based on the Articles of Association, the financial statements would be submitted to General
Conference of Shareholders.
Hainan Pearl River Holding Company Limited
August 28,2013
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Hainan Pearl River Holding Company Limited Notes on Semi-annual Report 2013
Legal representative: Accounting Supervisor: Chief Accountant:
Signature: Signature: Signature:
Date: Date: Date:
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