Stock Code: 000505, 200505 Stock Abbr.: ZJKG, ZJB Announcement No.:
HaiNan Pearl River Holdings Co., Ltd.
Abstract of the 2014 Semi-annual Report
1. Important reminders
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.
Company profile
Stock abbreviation ZJKG, ZJB 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
Same period of last
Reporting period YoY +/-
year
Operating revenues (RMB Yuan) 124,684,500.79 107,223,021.13 16.29%
Net profit attributable to
shareholders of the Company -76,849,759.83 -64,455,008.65 -19.23%
(RMB Yuan)
Net profit attributable to
shareholders of the Company after
-77,979,104.27 -72,879,625.27 -7.00%
extraordinary gains and losses
(RMB Yuan)
Net cash flows from operating
-156,748,554.81 -43,861,109.19 -257.37%
activities (RMB Yuan)
Basic EPS (RMB Yuan/share) -0.18 -0.15 -19.27%
Diluted EPS (RMB Yuan/share) -0.18 -0.15 -19.27%
Weighted average ROE -104.13% -33.76% -70.37%
As at the end of the As at the end of last
YoY +/-
reporting period year
Total assets (RMB Yuan) 1,446,617,800.51 1,237,713,804.04 16.88%
Net assets attributable to
shareholders of the Company 30,884,007.58 116,714,215.59 -73.54%
(RMB Yuan)
(2) Shareholdings of the top 10 common shareholders
Total number of common
shareholders at the end of 41,267
the reporting period
Shareholdings of the top 10 common shareholders
Total Pledged or frozen
Shareholdi shares shares
Name of Nature of Number of restricted
ng held at the
shareholder shareholder shares held Status of Number
percentage period-en
shares of shares
d
Beijing
Wanfa Real State-owne
112,479,4
Estate d 26.36%
78
Developme corporation
nt Co., Ltd.
Dong Domestic
0.71% 3,050,000
Xiaojuan individual
Domestic
Xu Zhen 0.67% 2,856,124
individual
Domestic
Pan Xinran 0.49% 2,071,599
individual
Zhang Domestic
0.46% 1,949,250
Xiaoxia individual
Hu Domestic
0.43% 1,845,500
Zhengxiu individual
Chen Domestic
0.43% 1,827,900
Mingwei individual
Domestic
Liu Min 0.36% 1,551,300
individual
Guangzhou
Angyang
Computing Non-state-o
Network wned 0.35% 1,488,300
Science & corporation
Technology
Co., Ltd.
Domestic
Li Hong 0.33% 1,400,500
individual
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
relationship or/and persons
parties with concerted action as prescribed in the Information Disclosure
acting in concert among
Administrative Methods for Changes in Shareholding of Shareholders of Listed
the above-mentioned
Companies. And it is unknown whether there is related-party relationship among
shareholders:
other shareholders and whether they are prescribed parties with concerted action.
(3) Shareholdings of the top 10 preferred share holders
□ Applicable √ Inapplicable
No preferred shares for the reporting period.
(4) Change of the controlling shareholder or the actual controller
Change of the controlling shareholder in the reporting period
□ Applicable √ Inapplicable
The controlling shareholder did not change in the reporting period.
Change of the actual controller in the reporting period
□ Applicable √ Inapplicable
The actual controller did not change in the reporting period.
3. Discussion and analysis by the management
During the reporting period, the Company made great efforts to promote each business such as real
estate, property management, tourist hotel service, as well as tried hard to avoid the market risks and to
timely adjust the operation strategy and to strive for the sustainable development of the enterprise
according to the planed development strategy of the Company.
1. As for the real estate business: Phase III of Hubei Meiling Qingcheng Project had received the starting
capital of the previous development, with the work of the Phase III and the design had completed, the
previous preparation work of the project implementation had all ready, as well as the biding work of the
major engineering had finished that the Company tried hard to realize the construction in the second half
year after receiving the construction funds and to make contribution for the listed companies with the
profits realized from the sales in 2015;
After the efforts of multiple parties, the land ownership problem left over by history of “the Real Estate
Development Project of the Original Tubular Pile Land” had been solved, with the Sanya Municipal
Bureau of Land and Resources had specified confirmed the execution basis of the transaction of the land
certification of the project. The Company is paying close attention on handling the land certification and
developing the planning and adjustment of the project as well as the previous work of the bid, auction
and listing of the land.
2. As for the hotel service: the China Snow Town and hotels operated by Mudanjiang Tourist
Development Group. From Jan. to Mar. is the “golden” season of Snow Town operation, so the
Company deeply dig out the market potential, made great efforts to develop the market resources, tried
hard to develop the marketing work in order to gain the favorable achievement the sales revenue of
RMB 2.4 million. In the middle of Apr., the hotels stopped operation and carried out the appropriate
settlement of the stay or leave of majority of the personnel. At the same time the Company organized the
staffs to development the external connection, in order to expand the customer group for the Winter sales
of the Snow Town and to do well in the preparation of the Winter operation.
The operation of the Days Hotel & Suite Sanya Resort faced unusual fierce market competition, and
owning to the impact from the overseas Southeast Asia Market on the Sanya Market, the in-flow tourists
of the island reduced obviously, while the increased number of the rooms of the newly opened hotels
were far more exceed the requirements with each hotel competed to grasp the clients resources through
reducing the price, thus made the market competition incredible fierce. And due to the operation year of
the hotels which attributed to the Company were more than 5 years, the hardware facility and the fitment
environment had not process any strong competition power any more. The hotels basically maintain the
balance of payments through various promotion methods such as reducing the price. The operation
revenue of the first half year was of RMB 17.74 million and the realized profits of RMB 2.45 million
(excluding depreciation).
3. Property management: in the first half of this year, the Company completed its operating income
RMB 78.8019 million, expense of operating cost was RMB 79.0393 million, paid business tax RMB
4.6127 million, profited RMB -349,400. In the first half of 2014, the income increased RMB 13.2959
million and the profit norm had a sharp loss-mitigation compared to that in the same period of last year.
Financial situation improved .The main reason for the losses were: Rigid cost rose sharply. Employee in
the minimum wage and employee social security tax base continuously increased, which lead to the
labor cost of employee a big radial growth compared to that in the same period of previous years. This
showed that Property Company still faces a great risk of management and financial pressure.
4. Progress of investment project in previous period: Yunxi Iron Ore Project and Mulin Town Coal
Logistics Project can not profit in expected, the Company’s financial pressure of operating was larger. In
2014 the Company decided to timely adjust investment strategy.
(1) Mulin Town Coal Logistics Project：Due to the coal market price continued to fall, the government
continued to regulate the coal industry; in order to response the government’s appeal and seek the
Company's future development prospect. The Company decided to recover the investment to the coal
trade and the construction of the coal water slurry production line, and researched and utilized the
benefits of existing land resources as the exclusive warehousing logistics base, actively cooperated with
domestic famous enterprises in the field of agriculture, logistics. As of the first half of 2014, the
Company successively recovered RMB 70 million investment fund of the project.
(2) Yunxi Iron Ore Project: Zhaojiayuan Mine Lot: in the first half of 2014, due to the terrain weather
and other factors, the reconstruction project of electric power can not be completed timely; at present,
the infrastructure construction and the equipment installation of transformer substation had been
completed. Line tower had also been completed. It is expected by the end of the year that the electricity
can be used. Residents in the mine lot were moving gradually; residents had great effects to the
production of the mine lot transacted the relocation in prior, which including the compensation to fruit
trees in fields and graveyard. In the first half of this year, the Company can not raise enough capital to
pay the tax of resource, and failed to meet the requirements of mining scale and organizing production.
Dujiawan mine lot was under the design of related production line according to the geological data. The
financing gap of the implementation of follow-up investment plan was still large.
(3) Shijiazhuang Luquan new village construction project was in conformity with the national
urbanization policy, however, the present difficult was that how to solve the problem of compensation
for farmers in the bad local investment environment, meanwhile completed the project in all kinds of
examination and approval procedures and the uncertainty of the above work faced so far. The Company
actively communicated and negotiated with the local government and the villagers, focusing on solving
contradiction in the village, solving the petitioning problem and completed land acquisition. The
Company strived for the proper solutions as soon as possible.
4. Matters related to financial reporting
(1) Explain change of the accounting policies, accounting estimates and measurement methods as compared with
the financial reporting of last year
□ Applicable √ Inapplicable
The accounting policies, accounting estimates or measurement methods did not change in the reporting period.
(2) Explain retrospective restatement due to correction of significant accounting errors in the reporting period
□ Applicable √ Inapplicable
No correction of significant accounting errors in the reporting period.
(3) Explain change of the consolidation scope as compared with the financial reporting of last year
□ Applicable √ Inapplicable
The consolidation scope did not change in the reporting period.
(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
□ Applicable √ Inapplicable
Hainan Pearl River Holding Company Limited
Consolidated Balance Sheet
30 Jun 2014
Expressed in Renminbi
Items Notes 30-Jun-14 31-Dec-13
Current assets:
Monetary funds V.1 78,992,211.94 62,362,242.69
Financial assets held for trading
Notes receivable
Accounts receivable V.2 13,383,521.91 13,143,175.36
Prepayments V.3 165,823,877.97 91,018,812.99
Interest receivable
Dividend receivable V.4 1,190,015.00 260,015.00
Other receivables V.5 274,024,371.58 287,625,206.34
Inventories V.6 274,697,883.46 118,546,684.93
Non-current asset due within 1 year
Other current assets
Total current assets 808,111,881.86 572,956,137.31
Non-current assets:
Available-for-sale financial assets V.7 66,262,500.00 76,957,500.00
Held-to-maturity securities
Long-term receivables
Long-term equity investments V.9 47,591,677.97 48,179,838.13
Investment real estates V.10 23,174,924.24 23,984,418.97
Fixed assets V.11 438,434,579.09 452,747,443.22
Construction in progress V.12 10,231,354.09 10,188,964.09
Engineering material V.13 606,206.60 606,206.60
Disposal of fixed assets
Bearer biological assets
Oil and gas assets
Intangible assets V.14 31,227,779.35 31,185,913.86
Expense on research and development
Goodwill
Long-term prepayments V.15 20,976,897.31 20,907,381.86
Deferred income tax assets
Other non-current asset
Total non-current assets 638,505,918.65 664,757,666.73
Total assets 1,446,617,800.51 1,237,713,804.04
Corporate representative:Zheng Qing Chief Accountant:Yang Daoliang Accounting Supervisor: Yang Daoliang
Hainan Pearl River Holding Company Limited
Consolidated Balance Sheet
30 Jun 2014
Expressed in Renminbi
Items Notes 30-Jun-14 31-Dec-13
Current liabilities:
Short-term loans
Financial liabilities held for trading
Notes payable
Accounts payable V.19 35,451,717.99 34,758,922.28
Accounts received in advance V.20 21,932,963.59 23,843,858.07
Accrued payroll V.21 9,200,366.70 10,764,089.33
Taxes payable V.22 7,186,740.99 8,600,877.07
Interest payable V.23 120,217,697.90 101,140,724.11
Dividend payable V.24 3,213,302.88 3,213,302.88
Other payables V.25 747,852,961.77 555,911,820.21
Non-current liabilities due within 1 year V.26 242,471,973.56 228,000,000.00
Other current liabilities
Total current liabilities 1,187,527,725.38 966,233,593.95
Non-current liabilities:
Long-term borrowings V.27 197,333,333.36 129,000,000.00
Bonds payable
Long-term payables
Special payables
Accrued liabilities
Deferred income tax liabilities V.16 11,838,490.76 14,512,240.76
Other non-current liabilities
Total non-current liabilities 209,171,824.12 143,512,240.76
Total liabilities 1,396,699,549.50 1,109,745,834.71
Owner's equity:
Share capital V.28 426,745,404.00 426,745,404.00
Capital surplus V.29 379,524,002.61 387,545,252.61
Less:treasury stock
Surplus reserves V.30 109,487,064.39 109,487,064.39
Undistributed profits V.31 -884,872,463.42 -807,063,505.41
Foreign currency translation differences
Total owner's equity attributable to parent company 30,884,007.58 116,714,215.59
Minority interests 19,034,243.43 11,253,753.74
Total owner's equity 49,918,251.01 127,967,969.33
Total liabilities and owner's equity 1,446,617,800.51 1,237,713,804.04
Corporate representative:Zheng Qing Chief Accountant:Yang Daoliang Accounting Supervisor: Yang Daoliang
Hainan Pearl River Holding Company Limited
Balance Sheet
30 Jun 2014
Expressed in Renminbi
Items Notes 30-Jun-14 31-Dec-13
Current assets:
Monetary funds 293,288.99 1,650,620.37
Financial assets held for trading
Notes receivable
Accounts receivable XI.1 2,932,074.77 2,437,957.05
Prepayments 50,000,000.00 50,000,000.00
Interest receivable
Dividend receivable 1,190,015.00 260,015.00
Other receivables XI.2 598,199,158.84 599,990,581.53
Inventories 4,824,035.45 4,824,035.45
Non-current asset due within 1 year
Other current assets
Total current assets 657,438,573.05 659,163,209.40
Non-current assets:
Available-for-sale financial assets 66,262,500.00 76,957,500.00
Held-to-maturity securities
Long-term receivables
Long-term equity investments XI.3 298,568,556.70 298,915,199.18
Investment real estates 7,139,759.03 7,290,977.33
Fixed assets 15,339,931.66 16,056,715.04
Construction in progress
Engineering material
Disposal of fixed assets
Bearer biological assets
Oil and gas assets
Intangible assets 1,481,545.14 1,505,376.96
Expense on research and development
Goodwill
Long-term prepayments 3,658,215.30 9,127,521.96
Deferred income tax assets
Other non-current asset
Total non-current assets 392,450,507.83 409,853,290.47
Total assets 1,049,889,080.88 1,069,016,499.87
Corporate representative:Zheng Qing Chief Accountant:Yang Daoliang Accounting Supervisor: Yang Daoliang
Hainan Pearl River Holding Company Limited
Balance Sheet
30 Jun 2014
Expressed in Renminbi
Items Notes 30-Jun-14 31-Dec-13
Current liabilities:
Short-term loans
Financial liabilities held for trading
Notes payable
Accounts payable 2,482,949.70 2,482,949.70
Accounts received in advance 199,138.50 61,875.00
Accrued payroll 478,708.53 781,412.78
Taxes payable 7,003,780.80 6,966,593.30
Interest payable 74,618,597.92 61,988,940.20
Dividend payable 3,213,302.88 3,213,302.88
Other payables 416,430,783.07 403,455,124.29
Non-current liabilities due within 1 year 196,805,306.92 197,000,000.00
Other current liabilities
Total current liabilities 701,232,568.32 675,950,198.15
Non-current liabilities:
Long-term borrowings
Bonds payable
Long-term payables
Special payables
Accrued liabilities
Deferred income tax liabilities 11,101,875.00 13,775,625.00
Other non-current liabilities
Total non-current liabilities 11,101,875.00 13,775,625.00
Total liabilities 712,334,443.32 689,725,823.15
Owner's equity:
Share capital 426,745,404.00 426,745,404.00
Capital surplus 382,540,342.15 390,561,592.15
Less:treasury stock
Surplus reserves 109,487,064.39 109,487,064.39
Undistributed profits -581,218,172.98 -547,503,383.82
Total owner's equity 337,554,637.56 379,290,676.72
Total liabilities and owner's equity 1,049,889,080.88 1,069,016,499.87
Corporate representative:Zheng Qing Chief Accountant:Yang Daoliang Accounting Supervisor: Yang Daoliang
Hainan Pearl River Holding Company Limited
Consolidated Income Statement
Year ended 30 June 2014
Expressed in Renminbi
Items Notes Jan.-Jun. 2014 Jan.-Jun. 2013
I.Total operating income 124,684,500.79 107,223,021.13
Including：operating income V.32 124,684,500.79 107,223,021.13
II.Total operating cost 204,537,920.01 175,386,515.27
Including：operating cost V.32 91,756,158.00 77,839,912.45
Operating taxes and extras V.33 7,305,149.15 6,360,287.19
Sales expenses V.34 2,422,952.48 4,606,945.20
General and administrative expenses V.35 54,558,020.91 46,741,079.54
Financial expenses V.36 50,842,648.58 40,873,236.02
Loss of devaluation of assets V.38 -2,347,009.11 -1,034,945.13
Add:Changing income of fair value
Investment income V.37 393,349.34 2,556,516.93
Including: investment income on affiliated company and
-588,160.16 -507,496.07
joint venture
III.Operating profit -79,460,069.88 -65,606,977.21
Add: Non-operating income V.39 71,348.21 73,275.60
Less: Non-operating expenses V.40 503,810.93 71,307.30
Including: disposal loss of non-current asset 453.21 15,533.81
IV.Total profit -79,892,532.60 -65,605,008.91
Less: income tax V.41 135,935.72 175,477.77
V.Net profit -80,028,468.32 -65,780,486.68
Net profit attributable to parent company's owner -76,849,759.83 -64,455,008.65
Profit and loss of minority interests -3,178,708.49 -1,325,478.03
VI.Earnings per share
i.Basic earnings per share V.42 -0.18 -0.15
ii.Diluted earnings per share V.42 -0.18 -0.15
VII.Other comprehensive income V.43 -8,021,250.00 -28,954,922.85
VIII.Total comprehensive income -88,049,718.32 -94,735,409.53
Including: Total comprehensive income attributed to the
-84,871,009.83 -93,409,931.50
owners of parent company
Total comprehensive income attributed to miniority interests -3,178,708.49 -1,325,478.03
Corporate representative:Zheng Qing Chief Accountant:Yang Daoliang Accounting Supervisor: Yang Daoliang
Hainan Pearl River Holding Company Limited
Income Statement
Year ended 30 June 2014
Expressed in Renminbi
Items Notes Jan.-Jun. 2014 Jan.-Jun. 2013
I.Total operating income XI.4 508,457.76 581,744.40
Less:Operating costs XI.4 177,796.80 177,796.80
Operating taxes and extras 21,753.66 32,577.68
Sales expenses
General and administrative expenses 9,340,894.41 11,022,129.41
Financial expenses 31,069,436.77 29,584,045.68
Loss of devaluation of assets -5,803,950.68 -10,228,962.52
Add:Changing income of fair value
Investment income XI.5 583,357.52 2,563,495.93
Including: investment income on affiliated company
-346,642.48 -500,517.07
and joint venture
II.Operating profit -33,714,115.68 -27,442,346.72
Add: Non-operating income 0.19
Less: Non-operating expenses 673.48 6,266.23
Including: disposal loss of non-current asset
III.Total profit -33,714,789.16 -27,448,612.76
Less: income tax
IV.Net profit -33,714,789.16 -27,448,612.76
V.Earnings per share
i.Basic earnings per share
ii.Diluted earnings per share
VI.Other comprehensive income -8,021,250.00 -28,954,922.85
VII.Totalcomprehensive income -41,736,039.16 -56,403,535.61
Corporate representative:Zheng Qing Chief Accountant:Yang Daoliang Accounting Supervisor: Yang Daoliang
Hainan Pearl River Holding Company Limited
Consolidated Cash Flow Statement
Year ended 30 June 2014
Expressed in Renminbi
Items Notes Jan.-Jun. 2014 Jan.-Jun. 2013
I.Cash flows from operating activities:
Cash received from sales of goods or rendering of services 129,259,671.62 101,651,207.81
Refunds of taxes
Cash received relating to other operating activities V.44(1) 17,928,270.73 12,470,630.71
Subtotal of cash inflows 147,187,942.35 114,121,838.52
Cash paid for goods and services 181,406,361.68 39,030,611.99
Cash paid to and on behalf of employees 77,094,698.25 60,918,149.26
Payments of all types of taxes 11,079,690.36 12,428,181.55
Cash paid relating to other operating activities V.44(2) 34,355,746.87 45,606,004.91
Subtotal of cash outflows 303,936,497.16 157,982,947.71
Net cash flows from operating activities V.45(1) -156,748,554.81 -43,861,109.19
II.Cash flows from investing activities:
Cash received from return of investments 36,060,000.00 26,000,000.00
Cash received from return on investments 37,638.27
89,013.00
Net cash received from the sale of fixed assets, intangible assets and other long-term assets 1,301,297.50 412,838.50
Net cash received from selling subsidiary company and joint venture
Cash received relating to other investing activities V.44(3) 13,871.23 5,647,661.11
Subtotal of cash inflows 37,412,807.00 32,149,512.61
Cash paid to acquire fixed assets, intangible assets and other long-term assets 72,778,177.60 12,850,561.55
Cash paid to acquire investments 24,700,000.00 33,000,000.00
Net cash paid to purchase subsidiary company and joint venture
Cash paid relating to other investing activities
Subtotal of cash outflows 97,478,177.60 45,850,561.55
Net cash flows from investing activities -60,065,370.60 -13,701,048.94
III.Cash flows from financing activities:
Cash received from investments by others 10,000,000.00 2,100,000.00
Cash received from borrowings 301,650,000.00 338,000,000.00
Cash received relating to other financing activities 1,000,000.00
Subtotal of cash inflows 311,650,000.00 341,100,000.00
Cash repayments of amounts borrowed 43,394,693.08 250,000,000.00
Cash paid for distribution of dividends or profits and for interest expenses 18,338,912.26 30,280,968.25
Cash paid relating to other financing activities V.44(4) 16,472,500.00 13,207,475.62
Subtotal of cash outflows 78,206,105.34 293,488,443.87
Net cash flows from financing activities 233,443,894.66 47,611,556.13
IV.Effect of foreign exchange rate changes on cash
V.Net increase in cash and cash equivalents 16,629,969.25 -9,950,602.00
Add:balance of cash and cash equivalents at the beginning of the year 62,362,242.69 65,762,871.33
VI.Balance of cash and cash equivalents at the end of the year 78,992,211.94 55,812,269.33
Corporate representative:Zheng Qing Chief Accountant:Yang Daoliang Accounting Supervisor: Yang Daoliang
.
Hainan Pearl River Holding Company Limited
Cash Flow Statement
Year ended 30 June 2014
Expressed in Renminbi
Items Notes Jan.-Jun. 2014 Jan.-Jun. 2013
I.Cash flows from operating activities:
Cash received from sales of goods or rendering of services 787,456.75 552,850.00
Refunds of taxes
Cash received relating to other operating activities 4,830,485.21 54,149,190.80
Subtotal of cash inflows 5,617,941.96 54,702,040.80
Cash paid for goods and services
Cash paid to and on behalf of employees 3,061,780.17 2,897,272.40
Payments of all types of taxes 444,798.05 728,405.54
Cash paid relating to other operating activities 8,511,195.12 9,026,338.42
Subtotal of cash outflows 12,017,773.34 12,652,016.36
Net cash flows from operating activities XI.6 -6,399,831.38 42,050,024.44
II.Cash flows from investing activities:
Cash received from return of investments 36,060,000.00 26,000,000.00
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
Net cash received from selling subsidiary company and joint venture
Cash received relating to other investing activities 5,647,661.11
Subtotal of cash inflows 36,060,000.00 31,736,674.11
Cash paid to acquire fixed assets, intangible assets and other long-term assets
34,007.00
Cash paid to acquire investments 28,200,000.00 90,499,500.00
Net cash paid to purchase subsidiary company and joint venture
Cash paid relating to other investing activities
Subtotal of cash outflows 28,200,000.00 90,533,507.00
Net cash flows from investing activities 7,860,000.00 -58,796,832.89
III.Cash flows from financing activities:
Cash received from investments by others
Cash received from borrowings 21,300,000.00 286,000,000.00
Cash received relating to other financing activities
Subtotal of cash inflows 21,300,000.00 286,000,000.00
Cash repayments of amounts borrowed 9,394,693.08 238,000,000.00
Cash paid for distribution of dividends or profits and for interest expenses 9,970,306.92 23,427,265.49
Cash paid relating to other financing activities 4,752,500.00 9,507,475.62
Subtotal of cash outflows 24,117,500.00 270,934,741.11
Net cash flows from financing activities -2,817,500.00 15,065,258.89
IV.Effect of foreign exchange rate changes on cash
V.Net increase in cash and cash equivalents -1,357,331.38 -1,681,549.56
Add:balance of cash and cash equivalents at the beginning of the year 1,650,620.37 2,641,297.45
VI.Balance of cash and cash equivalents at the end of the year 293,288.99 959,747.89
Corporate representative:Zheng Qing Chief Accountant:Yang Daoliang Accounting Supervisor: Yang Daoliang
Hainan Pearl River Holding Company Limited
Consolidated Statement of Changes in Equity
Year ended 30 June 2014
Expressed in Renminbi
30 June 2014
Items Total owner's equity attributable to parent company
Minority interests Total owner's
Less:treasury Undistributed equity
Share capital Capital reserves stock Surplus reserves profits Others
I.Amount at the end of last year 426,745,404.00 387,545,252.61 109,487,064.39 -807,063,505.41 11,253,753.74 127,967,969.33
1.Amount because the change of accounting policy
2.Amount because correction of accounting error
II.Amount at the beginning of this year 426,745,404.00 387,545,252.61 109,487,064.39 -807,063,505.41 11,253,753.74 127,967,969.33
III.Increment and decrement of this year -8,021,250.00 -77,808,958.01 7,780,489.69 -78,049,718.32
1.Net profit -76,849,759.83 -3,178,708.49 -80,028,468.32
2.Profit and loss through owner's equity directly -8,021,250.00 -8,021,250.00
(1) Net changing amount of fair value of available-for-sale financial assets -8,021,250.00 -8,021,250.00
(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 -8,021,250.00 -76,849,759.83 -3,178,708.49 -88,049,718.32
3.Owners invest or reduce capital 10,000,000.00 10,000,000.00
(1) Owners invest capital 10,000,000.00 10,000,000.00
(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 -959,198.18 959,198.18
(1) Capital reserves transfer to share capital
(2) Surplus reserves transfer to share capital
(3) Surplus reserves offset loss
(4) Other -959,198.18 -959,198.18
IV.Amount at the end of this year 426,745,404.00 379,524,002.61 109,487,064.39 -884,872,463.42 19,034,243.43 49,918,251.01
Corporate representative: Zheng Qing Chief Accountant: Yang Daoliang Accounting Supervisor: Yang Daoliang
Hainan Pearl River Holding Company Limited
Consolidated Statement of Changes in Equity
Year ended 30 June 2014
Expressed in Renminbi
30 June 2013
Total owner's equity attributable to parent company
Items Minority
interests Total owner's equity
Share capital Capital reserves Less:treasury Surplus reserves Undistributed profits Others
stock
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:Yang Daoliang Accounting Supervisor: Yang Daoliang
Hainan Pearl River Holding Company Limited
Statement of Changes in Equity
Year ended 30 June 2014
Expressed in Renminbi
30 June 2014
Items
Share capital Capital reserves Less:treasury stock Surplus reserves Undistributed profits Total owner's equity
I.Amount at the end of last year 426,745,404.00 390,561,592.15 109,487,064.39 -547,503,383.82 379,290,676.72
1.Amount because the change of accounting policy
2.Amount because correction of accounting error
II.Amount at the beginning of this year 426,745,404.00 390,561,592.15 109,487,064.39 -547,503,383.82 379,290,676.72
III.Increment and decrement of this year -8,021,250.00 -33,714,789.16 -41,736,039.16
1.Net profit -33,714,789.16 -33,714,789.16
2.Profit and loss through owner's equity directly -8,021,250.00 -8,021,250.00
(1) Net changing amount of fair value of available-for-sale financial assets -8,021,250.00 -8,021,250.00
(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 -8,021,250.00 -33,714,789.16 -41,736,039.16
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 426,745,404.00 382,540,342.15 109,487,064.39 -581,218,172.98 337,554,637.56
Corporate representative: Zheng Qing Chief Accountant: Yang Daoliang Accounting Supervisor: Yang Daoliang
Hainan Pearl River Holding Company Limited
Statement of Changes in Equity
Year ended 30 June 2014
Expressed in Renminbi
30 June 2013
Items
Share capital Capital reserves Less:treasury stock Surplus reserves Undistributed profits Total owner's equity
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: Yang Daoliang Accounting Supervisor: Yang Daoliang
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the Six Months ended 30 June 2014
(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 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 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, 2014 to June 30, 2014.
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 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 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
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
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 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 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)
Percentage of Accounts Percentage of Others
Ages
Receivable (%) Receivable (%)
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.
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
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 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, 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
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.
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 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 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 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.
(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 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 24%, 25% Taxable income
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
Registered Amount
Consolidated
Registered capital Holding Voting rights invested by Minority
Subsidiary’s name Principal activities (Yes or No)
address (RMB proportion proportion the Company interest
(RMB 0’000)
0’000) (RMB 0’000)
Hainan Pearl River Properties and
Hainan
Properties and Hotels 500 Hotels 98% 98% 490 Yes 18.12
Haikou
Management Co., Ltd. Management
Hainan Pearl River
Gardens
Environmental Projects Hainan
100 engineering 100% 100% 100 Yes
Co., Haikou
construction
Ltd.
Hainan Pearl River Estate Hainan
50 Cleaning projects 100% 100% 50 Yes
Cleaning Company Haikou
Hainan Pearl River Estate Mechanical and
Hainan
Machine Engineering 150 electrical products 100% 100% 150 Yes
Haikou
Company sales
Real Estate
Hainan Pearl River Estate Hainan
100 Marketing 100% 100% 100 Yes
Marketing Co., Ltd. Haikou
Planning
Sanya Wanjia Hotel
Hainan Sanya 12,000 Hotel service 100% 100% 12,000 Yes
Management Co., Ltd.
Hubei Pearl River Real
Real estate
Estate Development Co.,
Hubei Wuhan 6,500 development and 79.2% 79.2% 7,222 Yes 2,230.53
Ltd.
management
Wuhan Pearl River Meilin
Hotels Management Co., Hubei Wuhan 50 Service 100% 100% 50 Yes
Ltd.
Hainan Pearl River
Real estate
Enterprises Holding Co.,
Shanghai 4,000 development and 100% 100% 4,000 Yes
Ltd. Shanghai Real Estate
management
Co.
Beijing Jiubo Culture Cultural and sports
Beijing 500 100% 100% 500 Yes
Development Co., Ltd. services
Mudanjiang Pearl River
Tourism Investment and
Mudanjiang 6,000 Hotel management 100% 100% 6,000 Yes
Development Group
Limited
Mudanjiang Wanjia Star
Mudanjiang 50 Hotel service 100% 100% 50 Yes
Hotel Co., Ltd.
Mudanjiang Jingbohu
Mudanjiang 50 Hotel service 100% 100% 50 Yes
Wanjia Hotel Co., Ltd.
Shanghai Sea Pearl
Property
Property Management Co., Shanghai US $ 20 50% 50% 83 Yes 13.41
management
Ltd.
Hebei zhengshiqinghui Real estate
Hebei
Real Estate Development 1,000 development and 51% 51% 510 Yes -346.99
Shijiazhuang
Co., Ltd. property services
Heilongjiang Longshi Pear
Film base and
Culture Communication Haerbin 700 70% 70% 490 Yes -11.65
Cultural training
Co., Ltd.
2. The subsidiaries acquired by the business combination under non-uniform
control
Registered
Subsidiary’s Business Registered Principal capital Holding Voting rights Consolidated
name category address activities (RMB proportion proportion (Yes or No)
0’000)
Hailin Wanjia
Snowtown Hailin of
Limited
Holiday Hotel Heilongjiang Hotel service 2,000 100.00 100.00 Yes
Liability
Management Co., Province
Ltd.
V. Notes to significant items of the consolidated financial statements
1. Monetary funds
（1）Monetary funds disclosed by categories
Items Jun 30, 2014 Jan 1, 2014
Cash 398,779.35 1,846,467.14
Bank deposit 78,572,320.59 60,472,057.43
Other monetary funds 21,112.00 43,718.12
Total 78,992,211.94 62,362,242.69
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, 2014 January 1, 2014
Bad Debt Bad Debt
Categories Amounts Amounts
Provision Provision
Ratio Ratio Ratio Ratio
Amounts Amounts Amounts Amounts
(%) (%) (%) (%)
1.Significant accounts receivable and bad
7,761,707.60 32.38 7,761,707.60 100.00 7,761,707.60 32.68 7,761,707.60 100.00
debts accounted individually
2.Bad debt accounted by the combinations
Age Combinations 14,218,465.21 59.32 849,783.18 5.98 13,992,481.70 58.91 855,886.34 6.12
Combined Subtotal 14,218,465.21 59.32 849,783.18 5.98 13,992,481.70 58.91 855,886.34 6.12
3.Other unimportant receivables but bad
1,990,680.02 8.30 1,975,840.14 99.25 1,997,260.02 8.41 1,990,680.02 99.67
debts accounted individually
Total 23,970,852.83 100.00 10,587,330.92 ----- 23,751,449.32 100.00 10,608,273.96 -----
(2) Aging analysis
June 30, 2014 January 1, 2014
Ages
Balance Proportion (%) Bad debts Balance Proportion (%) Bad debts
Within 1 year 9,886,618.35 69.54 197,732.37 9,883,909.62 70.63 197,678.20
1-2 years 2,460,264.89 17.30 123,013.24 1,999,315.02 14.29 99,965.75
2-3 years 867,831.40 6.10 86,783.14 1,109,412.49 7.93 110,941.25
3-4 years 104,737.15 0.74 20,947.43 104,737.15 0.75 20,947.43
4-5 years 141,000.00 0.99 42,300.00 106,000.00 0.76 31,800.00
Over 5 years 758,013.42 5.33 379,007.00 789,107.42 5.64 394,553.71
Total 14,218,465.21 100.00 849,783.18 13,992,481.70 100.00 855,886.34
(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 3,416,614.08 14.25
Technology Development Co., LTD year
Hainan racing entertainment Co.,
Unrelated Client 2,406,158.00 over 5 years 10.04
LTD
Hainan Baoping company Unrelated Client 2,218,494.43 over 5 years 9.25
Hainan centaline property agency Unrelated Client 2,090,069.77 over 5 years 8.72
Within 1
Hainan dragon film studio Unrelated Client 1,433,425.11 5.98
year
(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
June 30, 2014 January 1, 2014
Ages
Balance Proportion (%) Balance Proportion (%)
Within 1 year 105,557,969.66 63.65 31,811,764.68 34.95
1-2 years 3,709,643.00 2.24 6,424,312.00 7.06
2-3 years 5,056,081.00 3.05 421,412.00 0.46
Over 3 years 51,500,184.31 31.06 52,361,324.31 57.53
Total 165,823,877.97 100 91,018,812.99 100
(2) Top five units of prepayments
Company’s Name Relationship Amounts Ages Unsettled reason
Heilongjiang Mudanjiang forestry engineering Unrelated Within 1
77,593,493.68 The project is not complete yet.
company Client year
Unrelated Pre-paid property purchase
Haikou Hongzhou Real Estate Development Co., Ltd 50,000,000.00 2-3 years
Client payment
Hubei Tianxiang Geotechnical engineering Co., Unrelated Within 1
12,093,042.07 The project is not complete yet.
LTD Client year
Unrelated
Dahailin Forestry Bureau 4,596,469.00 1-2 years The project is not complete yet.
Client
Unrelated Within 1 Pre-paid land
Hubei Changyou Property Co.,Ltd. 4,000,000.00
Client year purchase payment
Note: In August 22, 2013, the company and Haikou HongZhou Land Company Ltd. (referred to as HongZhou Land), Haikou HongZhou
Coastal Construction Company Ltd. (referred to as the HongZhou Construction), Haikou HongZhou Real Estate Group Co.,Ltd. (referred
to as HongZhou Group) signed the "supplementary agreement on the implementation of Haikou Hongzhou Center Project of the original
six agreements". The HongZhou Land’s original contract right and obligation is inherited by HongZhou Construction.The guarantee
contract that signed by HongZhou Group keep effective. Based on this contract, HongZhou 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, 2014 Increment Decrement Jun 30, 2014
Hainan Pearl River Guanzhuang Co., Ltd. 260,015.00 260,015.00
Items Jan 1, 2014 Increment Decrement Jun 30, 2014
Southwest securities Co., Ltd. 930,000.00 930,000.00
Total 260,015.00 930,000.00 1,190,015.00
(2) Dividends receivable exceed one year
Ending Impairment
Invested company Age Reason
balance loss
Hainan Pearl River Guanzhuang Co., The investee confronts the problem of tight
4-5years 260,015.00 None
Ltd. budget.
Total 260,015.00
5. Other receivables
(1) Others receivable listed by categories
Jun 30, 2014 Jan 1, 2014
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 7.92 25,978,479.90 100.00 25,978,479.90 7.55 25,978,479.90 100.00
accounted individually
2. Bad debt accounted by the combinations
Age Combinations 289,545,766.09 88.24 23,747,652.71 8.20 306,993,480.14 89.23 25,980,046.96 8.46
Combined Subtotal 289,545,766.09 88.24 23,747,652.71 8.20 306,993,480.14 89.23 25,980,046.96 8.46
3. Other unimportant receivables but bad debts
12,612,506.46 3.84 4,386,248.26 34.78 11,091,693.24 3.22 4,479,920.08 40.39
accounted individually
Total 328,136,752.45 100.00 54,112,380.87 ----- 344,063,653.28 100.00 56,438,446.94 -----
Note: Details about related party’s transaction refer to ‘Notes VI. 5. (3)’.
(2) Aging analysis
Jun 30, 2014 Jan 1, 2014
Ages
Balance Proportion (%) Bad debts Balance Proportion (%) Bad debts
Within 1 year 50,465,466.42 17.41 1,009,309.33 45,511,171.10 14.82 910,223.54
1-2 years 88,023,931.50 30.40 4,401,196.58 82,995,640.54 27.04 4,149,782.03
2-3 years 135,232,653.71 46.71 13,523,265.37 163,181,682.67 53.15 16,318,168.27
3-5 years 10,325,919.34 3.57 2,065,183.87 10,167,939.34 3.31 2033587.87
4-5 years 1,000.00 0.01 300.00 1,190.00 0.01 357.00
Over 5 years 5,496,795.12 1.90 2,748,397.56 5,135,856.49 1.67 2,567,928.25
Total 289,545,766.09 100.00 23,747,652.71 306,993,480.14 100.00 25,980,046.96
（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 107,000,000.00 1-3 years 32.64
Beijing Kangtai Xingye Investment Co.,Ltd（note2） Unrelated Party 102,500,000.00 1-3 years 31.27
Within 1
Unrelated Party 30,000,000.00 9.15
China Great Land Holdings Ltd（note3） year
Hainan Pearl River Guanzhuang Co., Ltd. Unrelated Party 9,414,831.68 1-4 years: 2.87
Shenzhen Yinxiang Computer Co., Ltd Unrelated Party 6,482,625.00 Over 5 years 1.98
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. 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. As the project is not carried out as
planned, the Company withdraw the investment of RMB70 million.
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: In May 2013, the Company has signed a cooperation proposal together with China Great Land Holdings Ltd. According with the
proposal, the Company plan to development the land located in litchi ditch No. 20 Hairun Road Industrial Park Sanya. The land is belong
to the Sanya pearl Co., Ltd. which is subsidiary of China Great Land Holdings Ltd.
6. Inventories
(1) Inventories category
Jun 30, 2014 Jan 1, 2014
Items Provision for Provision for
Ending Balance Book value Ending Balance Book value
Inventory Inventory
Raw materials 2,715,261.35 2,715,261.35 3,118,811.25 3,118,811.25
Low-value
consumption 662,824.83 662,824.83 659,503.83 659,503.83
goods:
Finished goods 505,644.42 505,644.42 647,642.85 647,642.85
Constructing
development 227,160,700.65 227,160,700.65 69,126,316.25 69,126,316.25
product
Development
65,330,786.48 21,726,889.27 43,603,897.21 66,559,549.10 21,726,889.27 44,832,659.83
products
Consumptive
49,555.00 49,555.00 161,750.92 161,750.92
biological assets
Total 296,424,772.73 21,726,889.27 274,697,883.46 140,273,574.20 21,726,889.27 118,546,684.93
(2) Inventories impairment provision
Decrement
Items 1 Jan,2013 Increment 30 Jun,2013
Transfer back Write off
Development product 21,726,889.27 21,726,889.27
Total 21,726,889.27 21,726,889.27
7. 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 66,262,500.00 76,957,500.00
Total 66,262,500.00 76,957,500.00
Note: The Company holds 7,750,000 shares of stock of Southwest Securities. At the end of period, market price is RMB 8.55 per share.
8. Joint investment and joint venture investment
Joint venture investment
Percentage of Percentage of
Registration Business
Name Nature legal representative Registered capital equity interest vote right
address Character
（%） （%）
Sanya Wanjia
Limited Entertainment
Enterprises Holding Sanya, Hainan Qing Zheng 100,000,000.00 40 40
liability Service
Co., Ltd
Beijing Found Vision Limited Entertainment
Beijing Qing Zheng 3,000,000.00 49 49
Media Co., Ltd. liability Service
Ending Balance
Ending Balance of Ending Balance of Operating
Name of Total Net profit
Total Assets Net Assets Income
Liabilities
Sanya Wanjia Enterprises Holding Co., Ltd 88,605,720.49 1,212,603.51 87,393,116.98 14,166.66 -866,606.21
Beijing Found Vision Media Co., Ltd. 3,827,216.65 1,331,050.80 2,496,165.85 -492,893.22
9. Long-term Equity Investment
Percentage of Percentage of Current
Accounting Initial investment equity vote right Impairment loss
Name Beginning Balance Increase or decrease Ending Balance impairment
Method Cost provision
interest（%） （%） loss
Sanya Wanjia Enterprises
Equity
Holding Co., Ltd. 40,000,000.00 35,303,889.28 -346,642.48 34,957,246.80 40 40
Method
Beijing Found Vision Media Equity
1,470,000.00 1,464,638.95 -241,517.68 1,223,121.27 49 49
Co., Ltd. Method
Subtotal for Equity Method 41,470,000.00 36,768,528.23 -588,160.16 36,180,368.07
Hainan Pearl River
Cost Method 426,315.00 426,315.00 426,315.00 1.33 1.33
Guanzhuang Co., Ltd
Hainan MaCun Port 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
Cost Method 500,000.00 500,000.00 500,000.00 6.67 6.67 500,000.00
Commerce
Network Science and
Cost Method 10,000,000.00 10,000,000.00 10,000,000.00 10 10 10,000,000.00
Technology Investment Co.
Hainan Huadi Pearl River
Foundation Engineering Co., Cost Method 160,000.00 160,000.00 160,000.00 2 2
Ltd.
Guangzhou Pearl River
Investment Management Co., Cost Method 18,177,240.29 18,177,240.29 18,177,240.29 9.4785 9.4785 7,352,245.39
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 36,943,555.29 25,532,245.39
Total 25,532,245.39
78,413,555.29 73,712,083.52 -588,160.16 73,123,923.36
10. Investment real estates
Items 1 Jan,2014 Increment Decrement 30 Jun,2014
I. Original value 33,921,871.40 322,062.78 33,599,808.62
Buildings and structures 33,921,871.40 322,062.78 33,599,808.62
II. Accumulated depreciation and amortization 6,504,524.83 574,870.55 87,438.60 6,991,956.78
Buildings and structures 6,504,524.83 574,870.55 87,438.60 6,991,956.78
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 23,984,418.97 23,174,924.24
Buildings and structures 23,984,418.97 23,174,924.24
Note: The corresponding depreciation costs for this reporting period was RMB 574,870.55 Yuan.
11. Fixed assets
Items 1 Jan,2014 Increment Decrement 30 Jun,2014
I. Original value 628,211,096.49 2,234,692.66 166,687.31 630,279,101.84
Items 1 Jan,2014 Increment Decrement 30 Jun,2014
Buildings & Houses 463,351,301.88 986,190.00 464,337,491.88
Motor Vehicle 41,609,833.29 620,448.06 57,078.00 42,173,203.35
General equipment 69,078,962.65 154,990.00 69,233,952.65
Other equipments 54,170,998.67 473,064.60 109,609.31 54,534,453.96
II. Accumulated
depreciation 167,964,357.35 16,547,298.21 166,428.73 184,345,226.83
Buildings & Houses 72,686,693.91 8,641,691.21 81,328,385.12
Motor Vehicle 20,901,662.70 2,471,182.04 74,378.23 23,298,466.51
General equipment 33,879,252.88 2,452,477.96 36,331,730.84
Other equipments 40,496,747.86 2,981,947.00 92,050.50 43,386,644.36
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 452,747,443.22 —— —— 438,434,579.09
Buildings & Houses 383,165,312.05 —— —— 375,509,810.84
Motor Vehicle 20,708,170.59 —— —— 18,874,736.84
General equipment 35,199,709.77 —— —— 32,902,221.81
Other equipments 13,674,250.81 —— —— 11,147,809.60
Note: The depreciation cost of this period was RMB16,547,298.21 Yuan.
12. Construction in progress
30 Jun,2014 1 Jan,2014
Project name Impairment loss Impairment loss
Ending Balance Book value Ending Balance Book value
provision provision
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
360,000.00 360,000.00 360,000.00 360,000.00
town Project
The service center of
42,390.00 42,390.00
Snow town
Total 10,231,354.09 10,231,354.09 10,188,964.09 10,188,964.09
13. Engineering Materials
Items 1 Jan 2014 Increment Decrement 30 Jun 2014
Special equipment 606,206.60 606,206.60
Total 606,206.60 606,206.60
14. Intangible assets
Items 1 Jan 2014 Increment Decrement 30 Jun 2014
I. Original value 39,513,463.93 655,182.00 40,168,645.93
Software 1,858,978.28 120,000.00 1,978,978.28
Land use right 35,567,353.65 441,282.00 36,008,635.65
Shanghai house use right 695,732.00 695,732.00
Zhenghe membership of Sanya Hongzhou
International 480,000.00 480,000.00
Yacht Club
Items 1 Jan 2014 Increment Decrement 30 Jun 2014
Golf membership of Nanli Lake 911,400.00 911,400.00
Right of trade mark 93,900.00 93,900.00
II.Accumulative amortization 7,416,150.07 613,316.51 8,029,466.58
Software 980,066.37 136,820.33 1,116,886.70
Land use right 6,064,612.84 458,507.22 6,523,120.06
Shanghai house use right 286,061.38 6,957.32 293,018.70
Zhenghe membership of Sanya Hongzhou
International 85,409.48 10,249.14 95,658.62
Yacht Club
Golf membership of Nanli Lake
Right of trade mark 782.50 782.50
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 31,185,913.86 —— —— 31,227,779.35
Software 878,911.91 —— —— 862,091.58
Land use right 29,502,740.81 —— —— 29,485,515.59
Shanghai house use right 409,670.62 402,713.30
Zhenghe membership of Sanya Hongzhou
International 394,590.52 —— —— 384,341.38
Yacht Club
Golf membership of Nanli Lake —— ——
Right of trade mark —— —— 93,117.50
Note: 1. The amortization of this year is613,316.51 Yuan.
2. The yearend land use right used as mortgage or collateral holds a book value of 27,080,041.74Yuan. More details are explained
at “Note V.19”.
15. Long-term prepayments
Items 1 Jan 2014 Increment Amortization Other decrements 30 Jun 2014
Decoration 5,733,050.18 6,880.00 803,843.11 4,936,087.07
Ski rental fee 3,000,000.00 450,000.00 2,550,000.00
Technical service
fee 233,321.33 70,002.00 163,319.33
Financial
consulting fee 7,998,594.64 5,332,396.50 2,666,198.14
Consulting fee 8,000,000.00 799,999.98 7,200,000.02
Advertisement fee
of Snow town 189,933.41 30,799.98 159,133.43
Rental fee of
fishpond 1,115,537.23 140,713.02 974,824.21
Use fee of Ski
1,566,945.07
Course 189,609.96 1,377,335.11
Facility of
Yangcao mountain 590,000.00 60,000.00 530,000.00
Er’long Mountain
Compensation fee
of Movie city
Entertainment
Area 480,000.00 60,000.00 420,000.00
Total 20,907,381.86 8,006,880.00 7,937,364.55 20,976,897.31
16. Deferred income tax asset and deferred income tax liability
(1) Identified deferred income tax liability
Items 30 Jun 2014 1 Jan 2014
Deferred income tax liability： 11,838,490.76 14,512,240.76
Changes on the fair value of available for sales financial assets
11,101,875.00 13,775,625.00
credited to capital reserves
Difference between fair value and the book value of net assets of
736,615.76 736,615.76
purchased unit as business combination
(2) Unrecognized deferred income tax asset
Items 30 Jun 2014 1 Jan 2014
Deductible temporary differences 123,802,469.97 126,149,479.08
Deductible losses 291,718,256.59 291,718,256.59
Total 415,520,726.56 417,867,735.67
17. Assets impairment provision
Decrement
Items 1 Jan 2014 Increment Other 30 Jun 2014
Transfer back Write off
Decrement
Bad debt provision 67,046,720.90 698,337.80 3,045,346.91 64,699,711.79
Inventories impairment provision 21,726,889.27 21,726,889.27
long-term equity investment impairment provision 25,532,245.39 25,532,245.39
Investment property impairment provision 3,432,927.60 3,432,927.60
Fixed assets impairment provision 7,499,295.92 7,499,295.92
Intangible assets impairment provision 911,400.00 911,400.00
Total 126,149,479.08 698,337.80 3,045,346.91 123,802,469.97
18. Assets with restricted ownership
Assets by categories Opening balance Increment Decrement Ending balance
Inventory 29,805,826.29 29,805,826.29
Investment real estates 17,840,718.65 420,214.48 17,420,504.17
Fixed assets 243,373,907.64 6,068,190.51 237,305,717.13
Intangible assets 27,513,623.10 433,581.36 27,080,041.74
Available for sales financial
76,957,500.00 10,695,000.00 66,262,500.00
assets
Total 395,491,575.68 17,616,986.35 377,874,589.33
Note: Assets with restricted ownership are mainly used for guarantee of loans, the details as follow:
Ending balance
Financing
Item Amount Investment Available for
nature Intangible
Inventory real Fixed assets sales Total
assets
estates financial assets
Personal loans Other payable 106,000,000.00 29,805,826.29 17,420,504.17 4,450,970.56 51,677,301.02
Related parties
Other payable
loans 60,000,000.00 66,262,500.00 66,262,500.00
Long-term
Bank loans
borrowing 339,805,306.92 232,854,746.57 27,080,041.74 259,934,788.31
Total ——
505,805,306.92 29,805,826.29 17,420,504.17 237,305,717.13 27,080,041.74 66,262,500.00 377,874,589.33
19. Accounts payable
Jun 30, 2014 Jan 1, 2014
Ages
Ending Balance Percentage (%) Opening Balance Percentage (%)
Jun 30, 2014 Jan 1, 2014
Ages
Ending Balance Percentage (%) Opening Balance Percentage (%)
Within 1 year 20,238,527.05 57.09 19,738,267.37 56.79
1 to 2 years 1,577,319.53 4.45 1,278,939.80 3.68
2 to 3 years 79,916.08 0.23 92,912.70 0.27
3 years and more 13,555,955.33 38.24 13,648,802.41 39.27
Total 35,451,717.99 100.00 34,758,922.28 100.00
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.
20. Accounts received in advance
Jun 30, 2014 Jan 1, 2014
Ages
Ending Balance Percentage (%) Opening Balance Percentage (%)
Within 1 year 13,845,088.08 63.12 15,729,154.21 65.97
Over 1 year 8,087,875.51 36.88 8,114,703.86 34.03
Total 21,932,963.59 100.00 23,843,858.07 100.00
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.
21. Accrued payroll
Items Jan 1, 2014 Increment Decrement Jun 30, 2014
I. Salary, bonus, allowance 3,974,036.99 63,262,552.21 65,377,010.21 1,859,578.99
II. Employee Welfare expenses 2,947,120.57 2,947,120.57 -
III. Social insurance 7,209,847.50 7,209,847.50 -
Where:1)Medical insurance 2,054,981.21 2,054,981.21
2)Supplementary medical insurance 4,526,791.92 4,526,791.92
3) Endowment insurance 327,308.32 327,308.32
4)annuity 145,484.20 145,484.20
5) Unemployment insurance 155,281.85 155,281.85
6) Working accident insurance 2,054,981.21 2,054,981.21
7) Maternity insurance 4,526,791.92 4,526,791.92
IV. Housing accumulation fund 1,035,213.18 1,012,845.18 22,368.00
V. Labor union fees& Employee education fees 6,789,134.86 1,176,657.26 648,289.89 7,317,502.23
VI. Non-monetary welfares
VII. Compensation for dismissal 3,200.00 3,200.00
VIII.Others 917.48 917.48
Total 10,764,089.33 75,634,590.72 77,198,313.35 9,200,366.70
22. Taxes payable
Items Jun 30, 2014 Jan 1, 2014
VAT -316,814.73 -1,050.00
Individual income tax 97,530.12 106,398.68
City construction and maintenance tax 662,578.12 670,388.88
Corporate income tax -454,228.53 106,407.40
Items Jun 30, 2014 Jan 1, 2014
Property tax -190,703.28 59,855.90
Business tax 8,883,230.07 9,174,503.29
Land use tax 149,017.06 104,086.03
Increment tax on land value -2,190,743.75 -2,179,863.60
Educational surtax 160,633.46 173,862.51
Others 386,242.45 386,287.98
Total 7,186,740.99 8,600,877.07
23. Interest payable
Item Jun 30, 2014 Jan 1, 2014
Long-term loan 5,400,622.69
Short-term loan
Company loan 104,191,053.72
90,514,702.62
Entrusted loan 10,449,888.49
10,449,888.49
Others 176,133.00
176,133.00
Total 120,217,697.90 101,140,724.11
Note: Details refer to Note VI.4.
24. Dividend payable
Investor Jun 30, 2014 Jan 1, 2014
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.
25. Other payables
Jun 30, 2014 Jan 1, 2014
Age
Ending Balance Percentage (%) Opening Balance Percentage (%)
Within 1 year 387,152,594.88 51.77 268,313,547.37 48.27
1 to 2 years 73,634,093.94 9.85 6,490,744.36 1.17
2 to 3 years 27,886,886.64 3.73 22,260,721.81 4.00
3 years and more 259,179,386.31 34.66 258,846,806.67 46.56
Total 747,852,961.77 100.00 555,911,820.21 100.00
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 VI.Related party relationship
and transactions”.
26. Non-current liabilities due within one year
1. Disclose by category
Category Jun 30, 2014 Jan 1, 2014
Long-term loans due within one year 242,471,973.56 228,000,000.00
Total 242,471,973.56 228,000,000.00
2. Details related to long-term loans due within one year
Category Jun 30, 2014 Jan 1, 2014
Pledge loans
Mortgage loans 34,666,666.64 210,000,000.00
Guaranteed loans 207,805,306.92 18,000,000.00
Total 242,471,973.56 228,000,000.00
27. Long-term borrowings
(1). Long-term borrowings listed by categories
Category Jun 30, 2014 Jan 1, 2014
Pledge loans
Mortgage loans 259,805,306.92 262,000,000.00
Guaranteed loans 180,000,000.00 95,000,000.00
Less: Long-term loans due within one year 242,471,973.56 228,000,000.00
Total 197,333,333.36 129,000,000.00
(2). Loan details
Loan staring Loan due
Lender Currency Interest rate (%) Jun 30, 2014 Jan 1, 2014
date date
Chongqing International Trust Co., Ltd 2012-9-27 2014-9-26 RMB 13% 196,805,306.92197,000,000.00
10% upward-floating of
Bank of China, Haikou Yeshumen Branch 2009-8-2 2009-8-2 RMB 63,000,000.00 65,000,000.00
benchmark interest rate
Construction Bank of China Mudanjiang 10% upward-floating of
2012-1-12 2019-1-11 RMB 80,000,000.00 95,000,000.00
Branch benchmark interest rate
Industrial and Commercial Bank of China 10% upward-floating of
2014-3-31 2020-3-30 RMB 100,000,000.00
Mudanjiang Taiping Road Branch benchmark interest rate
Total 439,805,306.92357,000,000.00
(3). Mortgage loan details
Lender Loan amount Mortgagor/mortgage
Bank of China, Haikou Yeshumen Branch 63,000,000.00There properties owned by SanyaWanjia Hotel Management Co., Ltd
Chongqing International Trust Co., Ltd 196,805,306.92 Hotel Villa A, B & C owned by company
Total 259,805,306.92
(4). Guaranteed loan details
Lender Loan amount Mortgagor/mortgage
China construction bank Mudanjiang Branch 80,000,000.00Heilongjiang Xinzheng Guarantee CO.,Ltd.
Industrial and Commercial Bank of China Mudanjiang
Mengneng International Energy Development Co. Ltd.
Taiping Road Branch 100,000,000.00
Total 180,000,000.00
28. Share capital
Unit: share
Items Jan 1, 2014 Increment or decrement (+,-) Jun 30, 2014
issued
Bonus Surplus
new others subtotal
issue converted
shares
1. Unlisted shares 1,325,131.00 1,325,131.00
State owned shares
Other domestic shares 1,325,131.00 1,325,131.00
Including:Domestic
1,299,500.00 1,299,500.00
corporate shares
Domestic natural person
25,631.00 25,631.00
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
29. Capital surplus
Items Jan 1, 2014 Increment Decrement Jun 30, 2014
Capital reserve spill price 224,960,139.16 224,960,139.16
Others capital surplus 162,585,113.45 2,673,750.00 10,695,000.00 154,563,863.45
-Including: Old capital surplus converted into 109,300,017.82 109,300,017.82
-Changes on fair value of available for sales financial assets 53,285,095.63 2,673,750.00 10,695,000.00 45,263,845.63
Total 387,545,252.61 2,673,750.00 10,695,000.00 379,524,002.61
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.
30. Surplus reserves
Items Jun 30, 2014 Jan 1, 2014
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
31. Undistributed profits
Items Amounts allocation proportion
Non-adjusted ending balance of the year 2011 -807,063,505.41
Adjusted opening balance of the year 2012
Add: Net profit attributed to the owners of the parent
-76,849,759.83
company
Less：Statutory surplus reserve
Random surplus reserve
Common risk provision
Dividend payable of Ordinary shares
Share capital converted from dividend of ordinary shares 959,198.18
Undistributed profit at the end of period -884,872,463.42
Note: Details of opening balance adjustment refer to ‘Notes II’
32. Operating income and operating costs
(1) Operating income
Items Jan.–Jun, 2014 Jan.–Jun, 2013
Main operating business income 122,167,333.83 105,260,371.31
Other operating business income 2,517,166.96 1,962,649.82
Total 124,684,500.79 107,223,021.13
(2) Operating costs
Items Jan.–Jun, 2014 Jan.–Jun, 2013
Main operating business costs 90,849,665.61 77,050,709.29
Other operating business costs 906,492.39 789,203.16
Total 91,756,158.00 77,839,912.45
(3) The details of main operating businesses were as follows according to products:
Jan.–Jun, 2014 Jan.–Jun, 2013
Items Main operating business Main operating business Main operating business Main operating business
income costs income costs
Real estate sales 2,916,880.00 1,228,762.62 3,036,947.00 1,664,908.94
Property management
80,129,140.46 71,410,997.10 66,975,789.68 59,681,900.63
services
Tourist hotel services 39,121,313.37 18,209,905.89 35,247,634.63 15,703,899.72
Tota 122,167,333.83 90,849,665.61 105,260,371.31 77,050,709.29
(4) The details of main operating businesses were as follows according to regions:
Jan.–Jun, 2014 Jan.–Jun, 2013
Location Main operating business Main operating business Main operating business Main operating business
income costs income costs
Hainan 96,494,491.74 79,825,294.93 87,413,512.61 69,113,795.26
Heilongjiang 20,929,516.99 8,683,310.54 13,034,764.00 5,970,500.52
Hubei 3,409,886.00 1,541,122.05 3,342,296.00 1,950,397.51
Shanghai 1,327,239.10 799,938.09 1,469,798.70 16,016.00
Beijing 6,200.00
Total 122,167,333.83 90,849,665.61 105,260,371.31 77,050,709.29
33. Operating taxes and extras
Items Jan.–Jun, 2014 Jan.–Jun, 2013
City construction and maintenance tax 436,395.75 375,280.57
Education fee 187,026.75 160,834.53
Business tax 6,234,225.04 5,361,151.06
Land value-added tax 378,202.62 247,261.79
Others 69,298.99 215,759.24
Total 7,305,149.15 6,360,287.19
34. Operating expenses
Items Jan.–Jun, 2014 Jan.–Jun, 2013
Payroll expense 1,691,622.27 2,585,706.55
Hotel operating expense 68,367.68 70,683.48
Consignment commission charge 57,376.00
Items Jan.–Jun, 2014 Jan.–Jun, 2013
Advertising fees 127,105.00 455,438.35
other selling expenses 535,857.53 1,437,740.82
合计 2,422,952.48 4,606,945.20
35. General and administrative expenses
Items Jan.–Jun, 2014 Jan.–Jun, 2013
Payroll expense 16,347,061.33 14,392,651.97
Depreciation expense 16,043,305.56 13,089,878.88
Business entertainment 4,674,833.29 3,995,242.19
Taxation expenses 1,548,053.40 1,356,446.42
Other expenses 15,944,767.33 13,906,860.08
Total 54,558,020.91 46,741,079.54
36. Financial expenses
Items Jan.–Jun, 2014 Jan.–Jun, 2013
Interest exchange 38,522,591.99 36,249,972.87
Less: interest revenue 1,042,636.62 4,510,235.18
Foreign exchange loss
Less: exchange gain
Others 13,362,693.21 9,133,498.33
Total 50,842,648.58 40,873,236.02
37. Investment income
Items Jan.–Jun, 2014 Jan.–Jun, 2013
Long-term equity investment income accounted by Costs Method
Long-term equity investment income accounted by Equity Method -588,160.16 -507,496.07
Investment income of disposal Long-term equity investment
Dividend income from available for sale financial assets 930,000.00 3,064,013.00
Others 51,509.50
Total 393,349.34 2,556,516.93
38. Impairment Loss of Assets
Items Jan.–Jun, 2014 Jan.–Jun, 2013
Bad debts impairment loss -2,347,009.11 -1,034,945.13
Inventories impairment loss
Total -2,347,009.11 -1,034,945.13
39. Non-operating income
Items Jan.–Jun, 2014 Jan.–Jun, 2013
Gain on disposal of non-current assets 1,163.87 29,888.92
Gains on debt restructure
Others 70,184.34 43,386.68
Total 71,348.21 73,275.60
40. Non-operating expenses
Items Jan.–Jun, 2014 Jan.–Jun, 2013
Loss on disposal of non-current assets 453.21 15,533.81
Donation 10,000.00
Losses on write-off of assets 211,311.35
Fine expenditures 6,279.42
Others 285,766.95 45,773.49
Total 503,810.93 71,307.30
41. Income tax
Items Jan.–Jun, 2014 Jan.–Jun, 2013
Income tax this year 135,935.72 175,477.77
Deferred income tax
Total 135,935.72 175,477.77
42. Earnings per share and diluted earnings per share calculation procedure
Jan.–Jun,
Item Code Jan.–Jun, 2014
2013
Net profits that belong to the common shareholders during
P0 -76,849,759.83 -64,455,008.65
the reporting period
Extraordinary profits and losses that belong to the common
A 1,129,344.44 8,424,616.62
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 -77,979,104.27 -72,879,625.27
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 6
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 -0.18 -0.15
and losses
Earnings per share after taking off extraordinary profits
Y2=P1/S -0.18 -0.17
and losses
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) -0.18 -0.15
extraordinary profits and losses
Jan.–Jun,
Item Code Jan.–Jun, 2014
2013
Diluted earnings per share after taking off the effect of
Y4=(P1+B1+B2)/(S+C) -0.18 -0.17
extraordinary profits and losses
43. Other consolidated income
Items Jan.–Jun, 2014 Jan.–Jun, 2013
Profits and losses generated by available for sale
-10,695,000.00 -38,606,563.80
financial assets
Deduce: income tax impacts caused by available for
-2,673,750.00 -9,651,640.95
sale financial assets
Pre-recorded in other comprehensive income into net
profit or loss
Total -8,021,250.00 -28,954,922.85
44. Information of cash flow statement
(1) Cash received relating to other operating activities
Items Jan.–Jun, 2014
Other monetary exchanges between enterprises 6,873,231.00
Utility Bills 6,057,527.47
The rent deposit, repair fund 3,020,058.00
Take back provisions 240,947.97
Interest income 165,489.37
Others 1,571,016.92
Total 17,928,270.73
(2) Cash paid relating to other operating activities
Items Jan.–Jun, 2014
Repayment of loans 4,000,000.00
Other monetary exchanges between enterprises 4,471,186.33
The payment of rent deposit, repair fund etc 2,820,772.64
On behalf of clients to pay Public Utility Fee 5,998,618.25
Other fees 14,980,242.69
Provisions payment 986,964.14
Other expensives 1,097,962.82
Total 34,355,746.87
(3)Cash received relating to other investing activities
Items Jan.–Jun, 2014
Interest income 13,871.23
Total 13,871.23
(4) Cash paid relating to other financing activities
Items Jan.–Jun, 2014
Financing consultant charge 16,472,500.00
Total 16,472,500.00
45. Supplementary information of cash flow statement
(1) Supplementary information
Items Jan.–Jun, 2014 Jan.–Jun, 2013
1．Reconciliation of net profit to cash flows from operating activities:
Net profit -80,028,468.32 -65,780,486.68
Add: Provision for assets impairment -2,347,009.11 -1,034,945.13
Depreciation of fixed assets, production biological assets, petroleum and natural gas 17,122,168.76 14,158,387.75
Amortization of intangible assets 613,316.51 594,498.80
Amortization of long-term prepayments 7,937,364.55 5,925,129.50
Losses on disposal of fixed assets, intangible assets and other long-term assets -1,062,443.98 -177,845.19
Losses on scrapping of fixed assets -22,905.82 13,301.71
Losses on fair value change
Financial expenses 45,460,020.20 35,886,689.11
Investment losses -393,349.34 -2,556,516.93
Decrease in deferred income tax assets
Increase in deferred income tax liabilities
Decrease in inventories -146,004,410.53 -2,027,059.37
Decrease in operating receivables 46,247,983.51 132,737,701.82
Increase in operating payables -44,270,821.24 -161,599,964.58
Others
Net cash flows from operating activities -156,748,554.81 -43,861,109.19
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 78,992,211.94 55,812,269.33
Less: Cash at the beginning of the period 62,362,242.69 65,762,871.33
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 16,629,969.25 -9,950,602.00
(2) Cash and cash equivalents
Items Jan.–Jun, 2014 Jan.–Jun, 2013
1. Cash 78,992,211.94 55,812,269.33
Including: Cash on hand 398,779.35 515,406.33
Bank deposit paid at any time 78,572,320.59 55,103,676.59
Other monetary funds paid at any time 21,112.00 193,186.41
2. cash equivalents
3. Cash and cash equivalents at the end of year 78,992,211.94 55,812,269.33
VI. Related party relationship and transactions
1. Parent company and ultimate controller:
Registered Organization Principal Relationship with Registered Holding Voting rights
Name
address code operating the Company capital proportion proportion
Beijing Wangfa Real Real estate
The first largest 280 million
Estate Development Beijing 60003715-7 development and 26.36% 26.36%
shareholder Yuan
Holdings Co., Ltd operation
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
5. Transactions of related parties
(1) Internal transactions have already been offset.
(2) Fund calling between related parties
On May 27,2013, the Pearl River Holding has borrowed RMB 230,000,000.00 from Beijing Xinxing Real Estate
Development general company approved by the board of directors as well as pledged 29.75 millions Shares of
Southwest Security to the company. By end of the reporting period the company returned the loan principal of
RMB 170,000,000 and RMB 8347,499.11 of interest, the balance of loans 60,000,000 is extended to June 30, 2014.
The remaining 7,750,000 shares of Southwest Securities were pledged to Beijing Xinxing Real Estate
Development general company.
By June 30, 2014, 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 RMB168,967,912.90 Yuan with RMB 24,199,954.39
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
58,825,000.00 Yuan with interest payable on balance of RMB 25,525,101.22Yuan.
By June 30, 2014, the total amount of loan principal that Beijing Xinxing Real Estate Development general
company has been made to Sanya Wanjia Hotel Management Co., Ltd has a balance of RMB 32,030,000.00 Yuan
with RMB 33,275,806.04 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 11,371,308.74Yuan.
For the loans listed between related parties, the total amount of interest expensed carried for this reporting period
was RMB 8,822,467.77Yuan with interest payable on balance of RMB 94,372,170.39Yuan. 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, 2014 Jan 1, 2014
Other payables:
Beijing Xinxing Real Estate Development Company 200,997,912.90 200,997,912.90
Beijing Wangfa Real Estate Development Holdings Co., Ltd 78,525,000.00 78,525,000.00
Beijing ZhongjiaYangguang energy technology (group) Co., Ltd. 2,566,739.77 2,079,419.19
Interest payable:
Beijing Wangfa Real Estate Development Holdings Co., Ltd. 36,896,409.96 34,514,484.97
Beijing Xinxing Real Estate Development Company 57,475,760.43 51,035,217.65
Total 376,461,823.06 367,152,034.71
VII. Contingent events
Other guarantee issues please refer to Note.V.18.
VIII. Commitments
Nothing need to disclose.
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, 2014 Jan 1, 2014
Items Bad debt Proportio Bad debt
Proportion
Balance Bad debts ratio Balance n Bad debts ratio
(%)
(%) (%) (%)
1 Individual with significant
7,761,707.60 59.43 7,761,707.60 100 7,761,707.60 59.43 7,761,707.60 100
amount
2 Bad debt accounted by
the combinations
Age Combinations 3,400,468.18 26.04 468,393.41 13.77 2,917,008.79 22.33 479,051.74 16.42
Combined Subtotal 3,400,468.18 26.04 468,393.41 13.77 2,917,008.79 22.33 479,051.74 16.42
3 Other unimportant
1,898,690.60 14.54 1,898,690.60 100 1,898,690.60 14.54 1,898,690.60 100
receivables
Total 13,060,866.38 100 10,128,791.61 12,577,406.99 100 10,139,449.94
(2) Age analysis
Jun 30, 2014 Jan 1, 2014
Age
Amounts Bad Debts Provision Amounts Bad Debts Provision
Within 1 year 2,280,709.76 45,614.20 1,754,901.37 35,098.03
1 to 2 years 102,000.00 5,100.00 102,000.00 5,100.00
2 to 3 years 100,000.00 10,000.00 100,000.00 10,000.00
3 to 4 year 100,000.00 20,000.00 100,000.00 20,000.00
4 to 5 years 106,000.00 31,800.00 106,000.00 31,800.00
5 years and more 711,758.42 355,879.21 754,107.42 377,053.71
Total 3,400,468.18 468,393.41 2,917,008.79 479,051.74
2. Other receivables
(1) Detailed information
Jun 30, 2014 Jan 1, 2014
Items Bad debt Proportio Bad debt
Proportion
Balance Bad debts ratio Balance n Bad debts ratio
(%)
(%) (%) (%)
1. Individual with significant
amount
21,378,380.89 3.32 21,378,380.89 100.00 24,178,380.89 3.72 24,178,380.89 100.00
2. Bad debt accounted by the
combinations
Age Combinations 253,240,055.77 39.36 19,845,575.98 7.84 281,636,174.98 43.26 22,814,242.48 8.10
In scope of consolidated
statements
364,475,331.75 56.65 339,619,797.96 52.17
subtotal 617,715,387.52 96.01 19,845,575.98 3.21 621,255,972.94 95.43 22,814,242.48 3.67
3. Other unimportant
receivables
4,299,431.13 0.67 3,970,083.83 92.34 5,543,560.75 0.85 3,994,709.68 72.06
Total 643,393,199.54 100.00 45,194,040.70 ——- 650,977,914.58 100.00 50,987,333.05 ——-
(2) Aging analysis
Jun 30, 2014 Jan 1, 2014
Age Amounts Amounts
Bad Debt Bad Debt
Ratio Provision Ratio Provision
Amounts Amounts
(%) (%)
Within 1 year 33,070,022.89 13.06 661,400.46 31,441,342.10 11.16 628,826.96
1 to 2 years 78,698,346.00 31.08 3,934,917.30 78,723,146.00 27.95 3,936,157.30
2 to 3 years 131,091,258.54 51.77 13,109,125.85 161,091,258.54 57.20 16,109,125.85
3 to 4 year 10,166,939.34 4.01 2,033,387.87 10166939.34 3.61 2033387.87
4 to 5 years
5 years and more 213,489.00 0.08 106,744.50 213,489.00 0.08 106,744.50
Total 253,240,055.77 100.00 19,845,575.98 281,636,174.98 100.00 22,814,242.48
3. Long-term equity investment
Initial Percentage of
Accounting Beginning Increase or Ending Percentage of equity Impairment loss
Name investment vote right
Method Balance decrease Balance interest（%） provision
Cost （%）
Hainan Pearl River Property &
Cost Method 4,900,000.00 4,900,000.00 4,900,000.00 98 98
Hotel Management Co., Ltd.
Hubei Pearl River Real Estate
Cost Method 57,200,000.00 57,200,000.00 57,200,000.00 88 88
Development Co., Ltd.
Sanya Wanjia Hotel Management
Cost Method 120,000,000.00 120,000,000.00 120,000,000.00 100 100
Co., Ltd.
Hainan Pearl River
Holding company. Shanghai Real Cost Method 40,000,000.00 40,000,000.00 40,000,000.00 100 100 40,000,000.00
Estate Co. ,Ltd
Mudanjiang Pearl River Hotel
Cost Method 60,000,000.00 60,000,000.00 60,000,000.00 100 100
Management Co., Ltd.
Beijing Jiubo Culture Development
Cost Method 5,000,000.00 5,000,000.00 5,000,000.00 100 100
Co., Ltd.
Hebei zhengshiqinghui Real Estate
Cost Method 5,100,000.00 5,100,000.00 5,100,000.00 51 51
Development Co., Ltd.
Hainan Pearl River Guanzhuang
Cost Method 426,315.00 426,315.00 426,315.00 1.33 1.33
Co., Ltd
Hainan MacunPorts 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 9.48 9.48 7,352,245.39
Management Co., Ltd
Hainan Nanyang Shipping Industrial
Cost Method 1,680,000.00 1,680,000.00 1,680,000.00 1,680,000.00
Company Limited
Sanya Wanjia Enterprises Holding
Equity Method 40,000,000.00 35,303,889.28 -346,642.48 34,957,246.80 40 40
Co., Ltd.
Initial Percentage of
Accounting Beginning Increase or Ending Percentage of equity Impairment loss
Name investment vote right
Method Balance decrease Balance interest（%） provision
Cost （%）
Total 369,143,555.29 364,447,444.57 -346,642.48 364,100,802.09 65,532,245.39
4. Operating income and operating costs
(1) Operating income
Items Jan.–Jun, 2014 Jan.–Jun, 2013
Main operating business income
Other operating business income 508,457.76 581,744.40
Total 508,457.76 581,744.40
(2) Operating costs
Items Jan.–Jun, 2014 Jan.–Jun, 2013
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, 2014 Jan.–Jun, 2013
Income from cost accounting method investment
Income from equity accounting method investment -346,642.48 -500,517.07
Income from disposal sellable financial assets
Dividend income from available for sale financial assets 930,000.00 3,064,013.00
Total 583,357.52 2,563,495.93
6. Supplementary information of cash flow statement
Items Jan.–Jun, 2014 Jan.–Jun, 2013
1．Reconciliation of net profit to cash flows from operating activities:
Net profit -33,714,789.16 -27,448,612.76
Add: Provision for assets impairment -5,803,950.68 -10,228,962.52
Depreciation of fixed assets, production biological assets, petroleum and natural gas 868,001.68 1,036,018.78
Amortization of intangible assets 23,831.82 23,831.82
Amortization of long-term prepayments 5,469,306.66 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 25,732,991.38 24,807,495.67
Investment losses -583,357.52 -2,563,495.93
Decrease in deferred income tax assets
Items Jan.–Jun, 2014 Jan.–Jun, 2013
Increase in deferred income tax liabilities
Decrease in inventories
Decrease in operating receivables 1,965,106.69 60,245,837.86
Increase in operating payables -356,972.25 -8,654,431.12
Others
Net cash flows from operating activities -6,399,831.38 42,050,024.44
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 293,288.99 959,747.89
Less: Cash at the beginning of the period 1,650,620.37 2,641,297.45
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 -1,357,331.38 -1,681,549.56
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 “-”):
Items Jan.–Jun, 2014
Profit and loss on disposal of non-current assets 710.66
Fund occupation fee from non-financial enterprises included in the current profit and loss 633,556.16
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 -433,173.38
Other non-operating income and costs 930,000.00
Less:Income tax impact 2,493.85
Equity impacts of minority interests -744.85
Total 1,129,344.44
2. Earnings per share
Earnings per share
Profit of this year Basic earnings per share Diluted earnings per share
Jan.–Jun, 2014 Jan.–Jun, 2013 Jan.–Jun, 2014 Jan.–Jun, 2013
Net profit attributable to common shareholders -0.18 -0.15 -0.18 -0.15
Net profit excluding non-recurring Profit and Loss
-0.18 -0.17 -0.18 -0.17
attributable to common shareholders
3 Abnormal issues and its related explanations for major accounting statements
(1) Balance sheet
Rate of
Item Jun 30, 2014 Jan 1, 2014 Explanations
change
Increases expenditure in construction of the snow town and Meiling Green
Prepayments 165,823,877.97 91,018,812.99 82.19%
Town project.
Dividend
1,190,015.00 260,015.00 357.67% Received dividends from Southwest Securities CO.,LTD.
receivable
Hubei Pearl River Real Estate increase investment in real estate of Meiling
Inventories 274,697,883.46 118,546,684.93 131.72%
Green Town.
Other payables 747,852,961.77 555,911,820.21 34.53% Increased borrowing from related parties
Long-term The subsidiary obtained a loan from Industrial Commercial Bank of China
197,333,333.36 129,000,000.00 52.97%
borrowings Ltd Mudanjiang Taiping Road Branch.
The subsidiary Hubei Pearl River Real Estate obtain equity investment
Minority interests 19,034,243.43 11,253,753.74 69.14%
from minority.
(2) Income statement
Item Jan.–Jun, 2014 Jan.–Jun, 2013 Rate of change Explanations
Decrease in salary cost because of reduce
Sales expenses 2,422,952.48 4,606,945.20 -47.41%
sales staff.
Loss of devaluation of
-2,347,009.11 -1,034,945.13 -126.78% Withdraw the accounts receivable
assets
Received dividends from Southwest
Investment income 393,349.34 2,556,516.93 -84.61%
Securities CO.,LTD.
Minority increase equity ratio in Hubei
Profit and loss of minority
-3,178,708.49 -1,325,478.03 -139.82% Pearl River Real Estate, and the losses go
interests
up.
Hubei Pearl River Real Estate increase
Net cash flows from -156,748,554.81 -43,861,109.19 -257.37% cash payment in real estate of Meiling
operating activities Green Town.
Net cash flows from
-60,065,370.60 -13,701,048.94 -338.40% Repay the loans.
investing activities
XIII. Approval of the financial statements
The financial statements have been approved by the board of directors of the Company in August 27 2014.
Based on the Articles of Association, the financial statements would be submitted to General Conference of
Shareholders.
Hainan Pearl River Holding Company Limited
August 27,2014
