HaiNan Pearl River Holdings Co., Ltd.
Abstract of the 2015 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 changes in shareholders
(1) Financial highlights
Does the Company adjust retrospectively or restate accounting data of previous years due to change of the accounting policy or
correction of any accounting error?
□ Yes √ No
Reporting period Same period of last year YoY +/-
Operating revenues (RMB Yuan) 136,117,829.19 124,684,500.79 9.17%
Net profit attributable to
shareholders of the Company (RMB 21,492,625.03 -76,849,759.83 127.97%
Yuan)
Net profit attributable to
shareholders of the Company after
-103,796,313.13 -77,979,104.27 -33.11%
extraordinary gains and losses (RMB
Yuan)
Net cash flows from operating
-94,962,794.82 -156,748,554.81 39.42%
activities (RMB Yuan)
Basic EPS (RMB Yuan/share) 0.05 -0.18 127.98%
Diluted EPS (RMB Yuan/share) 0.05 -0.18 127.98%
As at the end of the As at the end of last
YoY +/-
reporting period year
Total assets (RMB Yuan) 1,588,084,330.14 1,645,436,644.78 -3.49%
Net assets attributable to
shareholders of the Company (RMB -88,070,500.20 15,564,470.40 -665.84%
Yuan)
(2) Shareholdings of the top 10 common shareholders
Unit: share
Total number of common
shareholders at the end of the 40,122
reporting period
Shareholdings of the top 10 common shareholders
Total Pledged or frozen shares
common
Name of Nature of Shareholdin Number of restricted
shares held Status of Number of
shareholder shareholder g percentage common shares held
at the shares shares
period-end
Beijing
Wanfa Real
State-owned
Estate 26.36% 112,479,478
corporation
Development
Co., Ltd.
Li Leon Zhan Foreign
2.38% 10,158,806
Wei individual
Yao Xiu Foreign
2.06% 8,777,329
Guang individual
Domestic
Yao Liyuan 0.46% 1,963,376
individual
Zhang Domestic
0.46% 1,949,250
Xiaoxia individual
Domestic
Lu Yusheng 0.39% 1,649,750
individual
Domestic
Wang Jianjun 0.37% 1,599,910
individual
Chen Domestic
0.36% 1,523,704
Mingwei individual
Zhongrong
International
Trust Co.,
Ltd.-Rongxia
Other
ng No. 4
0.34% 1,440,800
Structural
Securities
Investment
Assembled
Funds Trust
South China Domestic
Financial non-state-ow
0.30% 1,299,500 1,299,500
Holdings ned
Limited corporation
Explanation on associated Among the shareholders above, there exists no related-party relationship between
relationship or persons the principal shareholder and other shareholders of the Company. Nor they are
acting in concert among the parties with concerted action as prescribed in the Information Disclosure
above-mentioned Administrative Methods for Changes in Shareholding of Shareholders of Listed
shareholders Companies. And it is unknown whether there is related-party relationship among
other shareholders and whether they are prescribed parties with concerted action.
Shareholder Wang Jianjun holds 1,599,910 shares in the Company through a client
account of collateral securities for margin trading in Nanjing Securities Co., Ltd.
Shareholders taking part in
And shareholder Ren Yuhua holds a total of 1,230,700 shares in the Company, with
securities margin trading (if
30,700 shares through a common securities account and 1,200,000 shares through
any)
a client account of collateral securities for margin trading in China Galaxy
Securities Co., Ltd.
(3) Shareholdings of the top 10 preference shareholders
□ Applicable √ Inapplicable
No preference shares in 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
In the first half of 2015, we still faced great difficulties in our operation due to the strong pressure for us to repay
the principals and interest of the mature loans previously secured, the rising labor cost in our property and hotel
services, the fierce competition on the regional market, etc.
Up to 30 Jun. 2015, our un-audited total assets were RMB 1,588,084,330.14 and net assets attributable to our
shareholders were RMB -88,070,500.20. For Jan.-Jun. 2015, we achieved operating revenues of RMB
136,117,829.19 and net profits of RMB 18,641,274.06, of which the net profits attributable to the owners of the
Company (without subsidiaries) were RMB 21,492,625.03 and the minority shareholders’ income was RMB
-2,851,350.97.
I. Operation review for the reporting period
1. During the reporting period, the progress of the major structures of the 38# building, 39# building and 40#
building of Phase III of Hubei Meiling Qingcheng Project had respectively reached the 27th floor, 24th floor and 21st
floor; the progress of the brickwork and the secondary structure had respectively reached the 15th floor, 10th floor
and 8th floor; the waterproof engineering and backfill engineering of the basement had completed; the completed
amount of the main project was of RMB 63 million and the accumulative completed amount was of RMB 93
million. There were 446 sets of the residences of 41,950 square meters in the 39th building and 40th building of the
opening quotation of the first period and there were 234 sets completed the subscription on the day of opening as
well as the amount of the tentative contract of the purchase letter was about of RMB 230 million that acquired the
favorable performance of the opening quotation.
2. The business season of the Snow Town of the controlling shareholder, Mudanjiang Tourist Development Group
in 2015 was from Jan. to Mar. and since Apr., the Group went out of business after the snow season. The realized
operating income of the business season of the first half year was of RMB 22.5036 million with the realized net
profits of RMB 12.5404 million and within the reporting period, the Group continued to invest of about RMB 30
million for the construction of the comprehensive service center project of the Days Resort in Snow Town which
had not completed the capping of the major structures with the secondary structure being executing.
3. Property management: the property management company the Company attributed to was facing larger financial
risks and capital pressure. Owning to part of the “migrant bird type” project was in the property income recycling
slack season, part of the income of the first half year delayed the recycling. Meanwhile the lowest wage standards
and the payment base of the employees' social security had constantly been up-regulated, which caused the labor
cost of the employees increased sharply compared to the same period of the previous years. The property company
of the first half year of 2015 had completed the operating income of RMB 94.1058 million, the expense of
operating cost of RMB 94.5869 million, the paid business tax of RMB 5.4576 million and the realized profits of
RMB -0.4852 million as well as there were 86 management projects of the property company and its subsidiaries
and branch companies with the comprehensive management area of about 7.50 million square meter, of which
there were 67 residence projects and 14 office projects. In terms of the structure of the project, the percentage of
the residence projects was of 80%, while under the situation of the unraised property fee of more than ten years but
the operating cost increased by twofoldness, the profit sources of the residence projects became smaller even was
in the loss state.
4. Progress of the projects invested in previous period:
The coal logistics project of Mulin Town had changed the plan as used the land lot for developing the solar power
generation and the greenhouse agriculture projects, during the reporting period, had completed project approval,
now the Company is applying project approval procedures, etc to the relevant departments.
Yunxi iron mines project: Owning to the continuous low level of the market price of the powdered iron, the
Company temporary slowed down the original plan of mining area production line construction and equipment
installation. During the reporting period, the Company and the cooperation party strengthen the management of
mining area, contacted with many steel mills, inspection, straighten out and establish sales channel. In line with the
market condition, adjusted production line construction and mineral detailed survey schedule of mining area of
Zhao courtyard and Dujiawan. Due to the iron ores grade of Zhao courtyard was lower than Dujiawan, in line with
the analysis of market condition, planed to transfer the production equipment invested to Dujiawan, the iron ore
grade had larger competitiveness in the market. Meanwhile, considering the influence of the continuous low level
of the domestic market price of iron ore, the Company actively seeks project transfer or introduces strategic
investors to develop the project in common.
During the reporting period, the land certificate for the industrial land of the Real Estate Development Project on a
Former Tubular Pile Factory had been completed, so far, the Company is waiting for the land certificate issued by
Land Departments. The planning and design of project will be conducted after the adjustment of regulatory detailed
planning in the area issued by the Sanya government.
5. During the reporting period, in order to relieve capital pressure of repaying capital with interest of the loan in
previous period due in reporting period, the Company had sold its holding of 7,750,000 shares of Southwest
Securities which obtained investment income RMB 120 million, which was the Company’s main profit sources in
the first half of the year .
4. Matters related to financial reporting
(1) Explain any changes in the accounting policies, accounting estimates and measurement methods as compared with the
financial reporting of last year
□ Applicable √ Inapplicable
No such cases in the reporting period.
(2) Explain any retrospective restatement due to correction of significant accounting errors in the reporting period
□ Applicable √ Inapplicable
No such cases in the reporting period.
(3) Explain any changes in the consolidation scope as compared with the financial reporting of last year
□ Applicable √ Inapplicable
No such cases 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
Unit：RMB
ASSETS Note(VIII) 30 June 2015 1 January 2015
Current assets —— ——
Currency Funds 136,016,986.29 97,404,192.62
Provision of settlement fund
Funds lent
Financial assets at fair value through profit or loss
Derivative financial assets
Notes receivable
Accounts receivable 14,168,842.98 12,378,292.44
Advances to suppliers 136,033,295.38 128,625,359.78
Interest receivable
Dividends receivable 260,015.00 260,015.00
Other receivables 261,993,360.85 238,352,004.55
Buying back the sale of financial assets
Inventories 439,605,383.59 386,635,994.05
Including:Raw material
Finished goods
Reclassified to assets held for sale
Current portion of non-current assets
Other current assets 3,000,000.00
Total current assets 991,077,884.09 863,655,858.44
Non-current assets —— ——
Available-for-sale financial assets 11,411,309.90 184,158,809.90
Held-to-maturity investments
Long-term receivables
Long-term equity investments 35,756,366.33 35,961,754.63
Investment property 21,446,645.11 22,228,615.23
Fixed assets original cos 425,779,641.92 436,892,954.81
Less:Accumulated depreciation
Fixed assets--net value 425,779,641.92 436,892,954.81
Less:Fixed assets provision for impairment
Fixed assets--net book value 425,779,641.92 436,892,954.81
Construction in progress 60,094,357.34 57,013,898.46
Construction materials 393,706.60 393,706.60
Fixed assets pending for disposal
Productive biological assets
Oil and gas assets
Intangible assets 30,076,762.69 30,660,800.67
Development disbursements
Goodwill
Long-term prepaid expenses 10,465,816.16 12,888,406.04
Deferred tax assets
Other non-current assets 1,581,840.00 1,581,840.00
Total non-current assets 597,006,446.05 781,780,786.34
Total assets 1,588,084,330.14 1,645,436,644.78
The accompanying notes form an integral part of the financial statements.
Legal representative:Zheng Qing Principal in charge of accounting:Yang Daoliang Head of the accounting department: wuxiukun
Hainan Pearl River Holding Company Limited
Consolidated Balance Sheet
Unit：RMB
ASSETS Note(VIII) 30 June 2015 1 January 2015
Current liabilities —— ——
Short-term borrowings 19,000,000.00 19,000,000.00
Financial liabilities at fair value through profit or loss
Derivative financial assets
Notes payable
Accounts payable 22,096,077.65 58,578,620.48
Advances from customers 25,640,247.62 28,572,757.37
Employee benefits payable 11,018,533.61 9,689,999.71
Including:Accrued payroll 11,018,533.61 9,689,999.71
Taxes payable 7,662,634.49 4,603,277.48
Including:Taxes payable 7,662,634.49 4,603,277.48
Interest payable 147,867,697.79 122,400,850.73
Dividends payable 3,213,302.88 3,213,302.88
Other payables 598,376,630.20 780,359,522.08
Current portion of non-current liabilities 386,098,907.05 249,471,973.56
Other current liabilities
Total current liabilities 1,220,974,031.29 1,275,890,304.29
Non-current liabilities —— ——
Long-term borrowings 453,866,666.68 327,303,532.52
Bonds payable
Long-term payable
Grants payable
Provisions
Deferred income
Deferred tax liabilities 674,902.10 23,187,756.33
Other non-current liabilities
Total non-current liabilities 454,541,568.78 350,491,288.85
Total liabilities 1,675,515,600.07 1,626,381,593.14
Equity —— ——
Share capital 426,745,404.00 426,745,404.00
Capital reserve 334,690,837.45 334,690,837.45
Less:Treasury Share
Other comprehensive income 125,127,595.63
Surplus reserve 109,487,064.39 109,487,064.39
Including:Statutory surplus reserve
Provision for general risks
Retained earnings -958,993,806.04 -980,486,431.07
Equity attributable to parent company -88,070,500.20 15,564,470.40
*Minority interests 639,230.27 3,490,581.24
Total owner's equity -87,431,269.93 19,055,051.64
Total liabilities and owner's equity 1,588,084,330.14 1,645,436,644.78
The accompanying notes form an integral part of the financial
Legal representative:Zheng Qing Principal in charge of accounting:Yang Daoliang Head of the accounting department: wu xiu kun
Hainan Pearl River Holding Company Limited
Consolidated Income Statement
Unit：RMB
ITEM Note 30 June 2015 30 June 2014
I. Revenue 136,117,829.19 124,684,500.79
Including：Operating income 136,117,829.19 124,684,500.79
II.Total cost 226,073,509.86 204,537,920.01
Including：Operating cost 100,737,341.87 91,756,158.00
Interest expenses
Handling charges and commissions expenses
Business taxes and surcharges 7,631,999.47 7,305,149.15
Selling expenses 2,806,121.97 2,422,952.48
Administrative expenses 48,527,378.52 54,558,020.91
Including:research and development expenses
Finance expenses 65,550,902.11 50,842,648.58
Including: Interest expenses
Interest income
Net loss on foreign exchange
Impairment losses of assets 819,765.92 -2,347,009.11
Others
Add：Gain on fair-value changes（“-”for loss）
Investment income（“-”for loss） 124,137,366.75 393,349.34
Including：investment income from associates and joint ventures -205,388.30 -588,160.16
Gain or loss on foreign exchange ( "-"for loss)
III.Operating profits（“－”for loss） 34,181,686.08 -79,460,069.88
Add：Non-operating income 508,533.86 71,348.21
Including：Gains on disposal of non-current assets 12,073.95 1,163.87
Gains from exchange of non-monetary assets
Government grants
Gains from debt restructuring
Less：Non-operating expenses 194,835.62 503,810.93
Including：Losses on disposal of non-current assets 453.21
Losses from exchange of non-monetary assets
Losses from debt restructuring
IV.Profit before tax（“－”for loss） 34,495,384.32 -79,892,532.60
Less：Income tax expenses 15,854,110.26 135,935.72
V.Net profit（“－”for loss） 18,641,274.06 -80,028,468.32
Net profit attributable to owners of the Company 21,492,625.03 -76,849,759.83
*Profit/loss attributable to minority shareholders -2,851,350.97 -3,178,708.49
VI.Post-tax net value of other comprehensive income
Post-tax net value of other comprehensive income attributable to owners of the Company -125,127,595.63 -8,021,250.00
(I) Other comprehensive income that will not be reclassified subsequently to profit or loss -125,127,595.63 -8,021,250.00
(II) Other comprehensive income that will be reclassified subsequently to profit or loss
i.Other comprehensive incomes that be able to reclassify as profit under equity method.
ii.Gain or loss from fair-value changes on available for sale financial assets -125,127,595.63 -8,021,250.00
iii.Reclassify held-to-maturity investment to hold-to-sale financial assets gain or loss
iv. The effective cash flow hedgeing gain or loss
v. Translation differences arising on translation of financial statements denominated in foreign currencies
Post-tax net value of other comprehensive income attributable to minority shareholders
VII.Total comprehensive income attributable to: -106,486,321.57 -88,049,718.32
Owners of the Company -103,634,970.60 -84,871,009.83
*Minority shareholders -2,851,350.97 -3,178,708.49
VIII.Earnings per share
i.Basic earnings per share 0.05 -0.18
ii.Diluted earnings per share 0.05 -0.18
The accompanying notes form an integral part of the financial statements.
Legal representative:Zheng Qing Principal in charge of accounting:Yang Daoliang Head of the accounting department: wu xiu kun
Hainan Pearl River Holding Company Limited
Consolidated Statement of Changes in Owners’ Equity
2015-6-30
Attributable to the parent company
Note
Other Less Provisi O
ITEM (VIII Other Speciali Minority
equity :trea on for Retained th Total owner's equity
) Paid-in capital Capital reserve comprehensive zed Surplus reserve Sub-total interests
instru sury general earnings er
shar income reserve
ments risks s
es
1 2 3 4 5 6 7 8 9 1 11 12 13
0
I.Closing balance of the preceding year 426,745,404.00 334,690,837.45 125,127,595.63 109,487,064.39 -980,486,431.07 15,564,470.40 3,490,581.24 19,055,051.64
Add:Changes in accounting policies — — — — — — — — — — — — —
Corrections of errors in Prior Period — — — — — — — — — — — — —
Others - - - - - - - - - - - - -
II.Opening balance of the current year 426,745,404.00 334,690,837.45 125,127,595.63 109,487,064.39 -980,486,431.07 15,564,470.40 3,490,581.24 19,055,051.64
III.Changes for the year -125,127,595.63 21,492,625.03 -103,634,970.60 -2,851,350.97 -106,486,321.57
(I) Total comprehensive income -125,127,595.63 21,492,625.03 -103,634,970.60 -2,851,350.97 -106,486,321.57
(II) Capital contribution and
withdrawals by owners
i.Capital contributions from owners
ii.Capital contribute from other
- - - - - - - - - - - - -
equity instrument holders
iii.Share-based payment recorded in
- - - - - - - - - - - - -
owner's equity
iv.Others
( III).Profits distribution - - - - - - - - - - - - -
i.Appropriation to surplus reserve - - - - - - - - - - - - -
Including:Statutory surplus reserve - - - - - - - - - - -
Optional surplus reserve - - - - - - - - - - - - -
ii.Appropriation of provision for
- - - - - - - - - - - - -
general risks
iii.Profit distribution to equity owners - - - - - - - - - - - - -
iv.Others - - - - - - - - - - - - -
(V).Transfer within owner's equity - - - - - - - - - - - - -
i.Capital reserve transferred to paid-in
- - - - - - - - - - -
capital
ii.Surplus reserve transferred to paid-in
- - - - - - - - - - - - -
capital
iii.Recover of loss by surplus reserve - - - - - - - - - - - - -
iv.Others - - - - - - - - - -
IV. Closing balance of the year 426,745,404.00 334,690,837.45 109,487,064.39 -958,993,806.04 -88,070,500.2 639,230.27 -87,431,269.93
The accompanying notes form an integral part of the financial statements.
Legal representative:Zheng Qing Principal in charge of accounting:Yang Daoliang Head of the accounting department: wu xiu kun
Hainan Pearl River Holding Company Limited
Consolidated Statement of Changes in Owners’ Equity
2014-6-30
Attributable to the parent company
Note
Other Less Provisi O
ITEM (VIII Other Speciali Minority Total owner's
equity :trea on for Retained th
) Paid-in capital Capital reserve comprehensive zed Surplus reserve Sub-total interests equity
instru sury general earnings er
shar income reserve
ments risks s
es
1 2 3 4 5 6 7 8 9 1 11 12 13
0
I.Closing balance of the preceding year 426,745,404.00 - 334,260,156.98 - 53,285,095.63 - 109,487,064.39 - -807,063,505.41 - 116,714,215.59 11,253,753.74 127,967,969.33
Add:Changes in accounting policies
Corrections of errors in Prior Period
Others
II.Opening balance of the current year 426,745,404.00 - 334,260,156.98 - 53,285,095.63 - 109,487,064.39 - -807,063,505.41 - 116,714,215.59 11,253,753.74 127,967,969.33
III.Changes for the year - - - -8,021,250.00 - - - -77,808,958.01 - -85,830,208.01 7,780,489.69 -78,049,718.32
(I) Total comprehensive income - - - -8,021,250.00 - - -76,849,759.83 - -84,871,009.83 -3,178,708.49 -88,049,718.32
(II) Capital contribution and
- - - - - - - - - 10,000,000.00 10,000,000.00
withdrawals by owners
i.Capital contributions from owners - - - - - - - - - 10,000,000.00 10,000,000.00
ii.Capital contribute from other
- - - - - - - - - -
equity instrument holders
iii.Share-based payment recorded in
- - - - - - - - - -
owner's equity
iv.Others - - - - - - - - -
( III).Profits distribution - - - - - - - - -959,198.18 - -959,198.18 959,198.18 -
i.Appropriation to surplus reserve - - - - - - - - - - - - -
Including:Statutory surplus reserve - - - - - - - - - - -
Optional surplus reserve - - - - - - - - - - - - -
ii.Appropriation of provision for
- - - - - - - - - - - - -
general risks
iii.Profit distribution to equity owners - - - - - - - - - - - - -
iv.Others - - - - - - - - -959,198.18 - -959,198.18 959,198.18 -
(V).Transfer within owner's equity - - - - - - - - - - - - -
i.Capital reserve transferred to paid-in
- - - - - - - - - - - - -
capital
ii.Surplus reserve transferred to paid-in
- - - - - - - - - - - - -
capital
iii.Recover of loss by surplus reserve - - - - - - - - - - - - -
iv.Others - - - - - - - - - - - - -
IV. Closing balance of the year 426,745,404.00 - 334,260,156.98 - 45,263,845.63 - 109,487,064.39 - -884,872,463.42 - 30,884,007.58 19,034,243.43 49,918,251.01
The accompanying notes form an integral part of the financial statements.
Legal representative:Zheng Qing Principal in charge of accounting:Yang Daoliang Head of the accounting department: wu xiu kun
Hainan Pearl River Holding Company Limited
Consolidated Cash Flow Statement
Unit：RMB
ITEM Note(VIII) 30 June 2015 30 June 2014
Ⅰ.Cash flows from operating activities： —— ——
Cash received from sales and services 131,025,358.54 129,259,671.62
Tax refunds
Net cash from other operating activities 23,284,389.75 17,928,270.73
Sub-total of cash inflows from operating activities 154,309,748.29 147,187,942.35
Cash paid for goods and services 108,549,739.93 181,406,361.68
Cash paid to and on behalf of employees 84,422,863.01 77,094,698.25
Payment of taxes and surcharges 13,664,710.40 11,079,690.36
Other cash payments relating to operating activities 42,635,229.77 34,355,746.87
Sub-total of cash outflows from operating activities 249,272,543.11 303,936,497.16
Net cash flows from operating activities -94,962,794.82 -156,748,554.81
Ⅱ.Cash flows frow investing activities： ——
Cash receipts from withdraw of investments 139,371,794.42 36,060,000.00
Cash received from investment income 37,638.27
Net cash from disposal of fixed assets, intangible assets and other long-term assets 439,810.00 1,301,297.50
Net cash received from disposal of subsidiaries and other business units
Other cash receipts relating to investing activities 13,871.23
Sub-total of cash inflows from investing activities 139,811,604.42 37,412,807.00
Cash paid for fixed assets, intangible assets and other long-term assets 5,131,894.84 72,778,177.60
Cash payments for investments 3,000,000.00 24,700,000.00
Net cash paid for acquiring subsidiaries and other business units
Net cash used in other investing activities
Sub-total of cash outflows from investing activities 8,131,894.84 97,478,177.60
Net cash flows from investing activities 131,679,709.58 -60,065,370.60
Ⅲ.Cash flows from financing activities： ——
Cash proceeds from investments by others 10,000,000.00
Including：cash received by subsidiaries from minority shareholders' investment 10,000,000.00 3
Cash received from borrowings 380,748,000.00 301,650,000.00
Cash received from issuance of bonds
Cash receipts related to other financing activities
Sub-total of cash inflows from financing activities 380,748,000.00 311,650,000.00
Cash repayments for debts 327,745,062.26 43,394,693.08
Cash payments for distribution of dividends, profit and interest expenses 39,602,363.55 18,338,912.26
Including: dividends or profit paid by subsidiaries to minority shareholders
Other cash payments relating to financing activities 11,504,695.28 16,472,500.00
Sub-total of cash outflows from financing activities 378,852,121.09 78,206,105.34
Net cash flows from financing activities 1,895,878.91 233,443,894.66
Ⅳ.Effect of foreign exchange rate changes on cash and cash equivalents -
Ⅴ.Net increase in cash and cash equivalents 38,612,793.67 16,629,969.25
Add: beginning balance of cash and cash equivalents 97,404,192.62 62,362,242.69
Ⅵ. Ending balance of cash and cash equivalents 136,016,986.29 78,992,211.94
The accompanying notes form an integral part of the financial statements.
Legal representative:Zheng Qing Principal in charge of accounting:Yang Daoliang Head of the accounting department: wu xiu kun
Hainan Pearl River Holding Company Limited
Balance Sheet of the Company
Unit：RMB
ASSETS Note(XIII) 30 June 2015 1 January 2015
Current assets： —— ——
Cash and cash equivalent 2,050,073.81 2,034,649.76
Provision of settlement fund
Funds lent
Financial assets at fair value through profit or loss
Derivative financial assets
Notes receivable
Accounts receivable 3,250,306.83 3,435,478.16
Advances to suppliers 50,555,660.00 50,240,000.00
Interest receivable
Dividends receivable 260,015.00 260,015.00
Other receivables 739,888,971.54 818,584,850.46
Buying back the sale of financial assets
Inventories 4,824,035.45 4,824,035.45
Including:Raw material
Finished goods
Reclassified to assets held for sale
Current portion of non-current assets
Other current assets
Total current assets 800,829,062.63 879,379,028.83
Non-current assets： ——
Available-for-sale financial assets 11,411,309.90 184,158,809.90
Held-to-maturity investments
Long-term receivables
Long-term equity investments 293,759,491.38 293,884,905.62
Investment property 6,837,322.43 6,988,540.73
Fixed assets original cos
Less:Accumulated depreciation
Fixed assets--net value
Less:Fixed assets provision for impairment
Fixed assets--net book value 14,014,760.68 14,623,874.13
Construction in progress
Construction materials
Fixed assets pending for disposal
Productive biological assets
Oil and gas assets
Intangible assets 1,433,881.50 1,457,713.32
Development disbursements
Goodwill
Long-term prepaid expenses 745,790.84 855,107.00
Deferred tax assets
Other non-current assets
Total non-current assets 328,202,556.73 501,968,950.70
Total assets 1,129,031,619.36 1,381,347,979.53
The accompanying notes form an integral part of the financial
statements.
Legal representative:Zheng Qing Principal in charge of accounting:Yang Daoliang Head of the accounting department: wu xiu kun
Hainan Pearl River Holding Company Limited
Balance Sheet of the Company(Continued)
Unit：RMB
ASSETS Note(XIII) 30 June 2015 1 January 2015
Current liabilities： —— ——
Short-term borrowings
Financial liabilities at fair value through profit or loss
Derivative financial assets
Notes payable
Accounts payable 2,482,949.70 2,482,949.70
Advances from customers 37,790.04 98,945.30
Financial assets sold for repurchase
Employee benefits payable 715,232.26 674,051.54
Including:Accrued payroll 715,232.26 674,051.54
Welfare benefits payable
Including:Staff and workers' bonus and selfare
Taxes and surcharges payable 8,263,087.21 2,995,939.00
Including:Taxes payable 8,263,087.21 2,995,939.00
Interest payable 89,539,512.11 75,566,328.92
Dividends payable 3,213,302.88 3,213,302.88
Other payables 364,990,503.55 576,422,782.11
Cession insurance premiums payable
Provision for insurance contracts
Funds received as agent of stock exchange
Funds received as stock underwrite sale
Reclassified to liabilities held for sale
Current portion of non-current liabilities 326,908,839.42 196,805,306.92
Other current liabilities
Total current liabilities 796,151,217.17 858,259,606.37
Non-current liabilities： ——
Long-term borrowings 34,200,000.00 130,303,532.50
Bonds payable
Long-term payable
Grants payable
Provisions
Deferred tax liabilities 22,512,854.23
Other non-current liabilities
Total non-current liabilities 34,200,000.00 152,816,386.73
Total liabilities 830,351,217.17 1,011,075,993.10
Equity： —— ——
Share capital 426,745,404.00 426,745,404.00
Capital reserve 337,276,496.52 337,276,496.52
Less:Treasury Share
Other comprehensive income 125,127,595.63
Surplus reserve 109,487,064.39 109,487,064.39
Including:Statutory surplus reserve
Provision for general risks
Retained earnings -574,828,562.72 -628,364,574.11
Total owner's equity 298,680,402.19 370,271,986.43
Total liabilities and owner's equity 1,129,031,619.36 1,381,347,979.53
The accompanying notes form an integral part of the financial statements.
Legal representative:Zheng Qing Principal in charge of accounting:Yang Daoliang Head of the accounting department: wu xiu kun
Hainan Pearl River Holding Company Limited
Income Statement of the Company
Unit：RMB
ITEM Note(XIII) 30 June 2015 30 June 2014
I. Revenue 512,071.26 508,457.76
Including：Operating income 512,071.26 508,457.76
II.Total cost
Including：Operating cost 177,796.80 177,796.80
Business taxes and surcharges 21,956.02 21,753.66
Selling expenses
Administrative expenses 8,057,788.45 9,340,894.41
Including:research and development expenses
Finance expenses 47,714,085.92 31,069,436.77
Including: Interest expenses
Interest income
Net loss on foreign exchange
Impairment losses of assets 10,925.50 -5,803,950.68
Others
Add：Gain on fair-value changes（“-”for loss）
Investment income（“-”for loss） 124,217,340.81 583,357.52
Including：Investment income from associates and joint ventures -125,414.24 -346,642.48
Gain or loss on foreign exchange ( "-"for loss)
III.Operating profits（“－”for loss） 68,746,859.38 -33,714,115.68
Add：Non-operating income
Including：Gains on disposal of non-current assets
Gains from exchange of non-monetary assets
Government grants
Gains from debt restructuring
Less：Non-operating expenses 577.22 673.48
Including：Losses on disposal of non-current assets
Losses from exchange of non-monetary assets
Losses from debt restructuring
IV.Profit before tax（“－”for loss） 68,746,282.16 -33,714,789.16
Less：Income tax expenses 15,210,270.77
V.Net profit（“－”for loss） 53,536,011.39 -33,714,789.16
VI.Post-tax net value of other comprehensive income -125,127,595.63 -8,021,250.00
(I) Other comprehensive income that will not be reclassified subsequently to profit
or loss
(II) Other comprehensive income that will be reclassified subsequently to profit or
loss
i.Other comprehensive incomes that be able to reclassify as profit under equity
method.
ii.Gain or loss from fair-value changes on available for sale financial assets
iii.Reclassify held-to-maturity investment to hold-to-sale financial assets gain or
loss
iv. The effective cash flow hedgeing gain or loss
v. Translation differences arising on translation of financial statements denominated
in foreign currencies
VII.Total comprehensive income -71,591,584.24 -41,736,039.16
The accompanying notes form an integral part of the financial statements.
Legal representative:Zheng Qing Principal in charge of accounting:Yang Daoliang Head of the accounting department: wu xiu kun
Hainan Pearl River Holding Company Limited
Cash Flow Statement of the Company
Unit：RMB
ITEM Note(XIII) 30 June 2015 30 June 2014
Ⅰ.Cash flows from operating activities： —— ——
Cash received from sales and services 1,269,936.85 787,456.75
Tax refunds
Net cash from other operating activities 152,644,738.55 4,830,485.21
Sub-total of cash inflows from operating activities 153,914,675.40 5,617,941.96
Cash paid for goods and services
Cash paid to and on behalf of employees 3,092,486.56 3,061,780.17
Payment of taxes and surcharges 258,008.24 444,798.05
Other cash payments relating to operating activities 55,872,045.25 8,511,195.12
Sub-total of cash outflows from operating activities 59,222,540.05 12,017,773.34
Net cash flows from operating activities 94,692,135.35 -6,399,831.38
Ⅱ.Cash flows frow investing activities： —— ——
Cash receipts from withdraw of investments 139,371,794.42 36,060,000.00
Cash received from investment income
Net cash from disposal of fixed assets, intangible assets and other long-term assets
Net cash received from disposal of subsidiaries and other business units
Other cash receipts relating to investing activities
Sub-total of cash inflows from investing activities 139,371,794.42 36,060,000.00
Cash paid for fixed assets, intangible assets and other long-term assets 6,199.00
Cash payments for investments 30,066,000.00 28,200,000.00
Net increase of pledged loans
Net cash paid for acquiring subsidiaries and other business units
Net cash used in other investing activities
Sub-total of cash outflows from investing activities 30,072,199.00 28,200,000.00
Net cash flows from investing activities 109,299,595.42 7,860,000.00
Ⅲ.Cash flows from financing activities： —— ——
Cash proceeds from investments by others
Including：cash received by subsidiaries from minority shareholders' investment
Cash received from borrowings 80,748,000.00 21,300,000.00
Cash received from issuance of bonds
Cash receipts related to other financing activities
Sub-total of cash inflows from financing activities 80,748,000.00 21,300,000.00
Cash repayments for debts 260,505,000.00 9,394,693.08
Cash payments for distribution of dividends, profit and interest expenses 18,880,311.44 9,970,306.92
Including: dividends or profit paid by subsidiaries to minority shareholders
Other cash payments relating to financing activities 5,338,995.28 4,752,500.00
Sub-total of cash outflows from financing activities 284,724,306.72 24,117,500.00
Net cash flows from financing activities -203,976,306.72 -2,817,500.00
Ⅳ.Effect of foreign exchange rate changes on cash and cash equivalents -
Ⅴ.Net increase in cash and cash equivalents 15,424.05 -1,357,331.38
Add: beginning balance of cash and cash equivalents 2,034,649.76 1,650,620.37
Ⅵ. Ending balance of cash and cash equivalents 2,050,073.81 293,288.99
The accompanying notes form an integral part of the financial statements.
Legal representative:Zheng Qing Principal in charge of accounting:Yang Daoliang Head of the accounting department: wu xiu kun
Hainan Pearl River Holding Company Limited
Statement of Changes in Owners’ Equity of the Company
Unit
：
RM
2015-6-30
Note(XIII
ITEM Other Provisi
) Other equity Less:treas Specialized Retained Total owner's
Paid-in capital Capital reserve comprehensive Surplus reserve on for Others
instruments ury shares reserve earnings equity
income general
1 2 3 4 5 6 7 8 9 10 11
426,745,404.0
I.Closing balance of the preceding year 337,276,496.52 125,127,595.63 109,487,064.39 -628,364,574.11 370,271,986.43
0
Add:Changes in accounting policies
Corrections of errors in Prior Period
Others
426,745,404.0
II.Opening balance of the current year 337,276,496.52 125,127,595.63 109,487,064.39 -628,364,574.11 370,271,986.43
0
III.Changes for the year -125,127,595.63 53,536,011.39 -71,591,584.24
(I) Total comprehensive income -125,127,595.63 53,536,011.39 -71,591,584.24
(II) Capital contribution and withdrawals by owners - - - - - - - - - - -
i.Capital contributions from owners - - - - - - - - - -
ii.Capital contribute from other equity instrument holders - - - - - - - - - - -
iii.Share-based payment recorded in owner's equity - - - - - - - - - - -
iv.Others - - - - - - - - - -
( III).Profits distribution - - - - - - - - - - -
i.Appropriation to surplus reserve - - - - - - - - - - -
Including:Statutory surplus reserve - - - - - - - - -
Optional surplus reserve - - - - - - - - - - -
ii.Appropriation of provision for general risks - - - - - - - - - - -
iii.Profit distribution to equity owners - - - - - - - - - - -
iv.Others - - - - - - - - - - -
(V).Transfer within owner's equity - - - - - - - - - - -
i.Capital reserve transferred to paid-in capital - - - - - - - - - - -
ii.Surplus reserve transferred to paid-in capital - - - - - - - - - - -
iii.Recover of loss by surplus reserve - - - - - - - - - - -
iv.Others - - - - - - - - -
426,745,404.0
IV. Closing balance of the year 337,276,496.52 109,487,064.39 -574,828,562.72 298,680,402.19
0
The accompanying notes form an integral part of the
financial statements.
Legal representative:Zheng Qing Principal in charge of accounting:Yang Daoliang Head of the accounting department:: wu xiu kun
Hainan Pearl River Holding Company Limited
Statement of Changes in Owners’ Equity of the Company
2014-6-30
Note(XIII
ITEM
) Other Less:treas Other Specialized Provisi Retained Total owner's
Paid-in capital Capital reserve Surplus reserve Others
equity ury shares comprehensive reserve on for earnings equity
1 2 3 4 5 6 7 8 9 10 11
I.Closing balance of the preceding year 426,745,404.00 - 337,276,496.52 - 53,285,095.63 - 109,487,064.39 - -547,503,383.82 - 379,290,676.72
Add:Changes in accounting policies — — — — — — — — — — —
Corrections of errors in Prior Period — — — — — — — — — — —
Others - - - - - - - - - - -
II.Opening balance of the current year 426,745,404.00 - 337,276,496.52 - 53,285,095.63 - 109,487,064.39 - -547,503,383.82 - 379,290,676.72
III.Changes for the year - - - - -8,021,250.00 - - - -33,714,789.16 - -41,736,039.16
(I) Total comprehensive income - - - - -8,021,250.00 - - -33,714,789.16 - -41,736,039.16
(II) Capital contribution and withdrawals by owners - - - - - - - - - - -
i.Capital contributions from owners - - - - - - - - - - -
ii.Capital contribute from other equity instrument holders - - - - - - - - - - -
iii.Share-based payment recorded in owner's equity - - - - - - - - - - -
iv.Others - - - - - - - - - -
( III).Profits distribution - - - - - - - - - - -
i.Appropriation to surplus reserve - - - - - - - - - - -
Including:Statutory surplus reserve - - - - - - - - -
Optional surplus reserve - - - - - - - - - - -
ii.Appropriation of provision for general risks - - - - - - - - - - -
iii.Profit distribution to equity owners - - - - - - - - - - -
iv.Others - - - - - - - - - - -
(V).Transfer within owner's equity - - - - - - - - - - -
i.Capital reserve transferred to paid-in capital - - - - - - - - - - -
ii.Surplus reserve transferred to paid-in capital - - - - - - - - - - -
iii.Recover of loss by surplus reserve - - - - - - - - - - -
iv.Others - - - - - - - - - - -
IV. Closing balance of the year 426,745,404.00 - 337,276,496.52 - 45,263,845.63 - 109,487,064.39 - -581,218,172.98 - 337,554,637.56
The accompanying notes form an integral part of the
financial statements.
Legal representative:Zheng Qing Principal in charge of accounting:Yang Daoliang Head of the accounting department:；wu xiu kun
Hainan Pearl River Holdings Limited.
Foot-notes to Financial Statements
(January 1—June 30, 2015)
I. Basic Information of the Company
(1) Registered address, history of the Company and address of its headquarters
Hainan Pearl River Holdings Limited. (hereinafter referred to as “the Company ” or “Company” or “Pearl River Holdings”) is a limited
liability company reincorporated by Hainan Pearl River Industrial Corporation on January 11, 1992, in accordance with No.1 Document
of the People's Government of Hainan Province (1992), and No.6 Document of Hainan People's Bank of China (1992), with total stocks
issued of 81,880,000 shares, among which, total stocks exchanged from former net assets of 60,793,600 shares, and total newly-issued
stocks of 21,086,400 shares. The Company is named as Hainan Pearl River Industrial Holdings Co., Ltd. Registration number of the
Company’s business license is 20128455-6. The parent company, Guangzhou Pearl River Industrial Co., Ltd., holds 36,393,600 shares,
occupying 44.45%. In accordance with the No.83 document issued by Securities Management Office of People's Bank of China in
December, 1992, newly-issued 21,086,400 shares came on the market at Shenzhen Securities Exchange. The Company is engaged in
real estate.
On March 25, 1993, in accordance with No.28 document of Hainan Stock-holding System Pilot Leading Group and No.99 document of
Shenzhen Special Economic Zone Branch of People's Bank of China, the Company increases its equities according to the ratio of 10:5:2.
After transfer, its capital stock is 139,196,000 shares. At the end of 1993, its shareholder, Guangzhou Pearl River Industrial Company
held 48,969,120 shares, occupying 35.18%.
In 1994, equities were increased according to the ratio of 10:10, after transfer, its total amount of capital stock is 278,392,000 shares. Its
shareholder, Guangzhou Pearl River Industrial Development Co., Ltd., held 97,938,240 shares, occupying 35.18%.
In 1995, share B of 50,000,000 shares was issued upon approval in accordance with No.45 and No.12 document of Shenzhen Securities
Office (1995). Equities were increased according to the shareholding ratio of 10:1.5 based on the increased share B. After transfer, the
Company held 377,650,800 shares, its parent company, Guangzhou Pearl River Industrial Company held 112,628,976 shares, occupying
29.82%.
In 1999, Guangzhou Pearl River Group Co., Ltd transferred 112,628,976 shares to Beijing Wanfa Real Estate Development Co., Ltd.
After the stock transfer in June, 1999, Beijing Wanfa Real Estate Development Co., Ltd. held 112,628,976 shares of the Company,
occupying 29.82% of total shares of the Company, and became a shareholder of the Company.
On January 10, 2000, the Company was renamed as Hainan Pearl River Holdings Limited., and was issued the business license by
Industrial & Commercial Administration Bureau of Hainan Province.
On August 17, 2006, an equity reform program of the Company was executed, the Company increased its equities according to the ratio
of 10:1.3 to all shareholders, with increased equities of 49,094,604 shares. Former holders of non-tradable shares assigned the increased
equities to shareholders of circulation stock A. Beijing Wanfa Real Estate Development Co., Ltd paid advanced money for consideration
shares of non-circulation shareholders whose opinions were not given explicitly. After transfer, total amount of capital stock was
426,745,404 shares, the shareholder, Beijing Wanfa Real Estate Development Co., Ltd., held 107,993,698 shares, occupying 25.31%. In
2007, holders of non-tradable shares repaid equity division consideration of 3,289,780 shares. In 2009, holders of non-tradable shares
repaid equity division consideration of 1,196,000 shares. In 2010, the shareholder, Beijing Wanfa Real Estate Development Co., Ltd.,
was renamed as Beijing Wanfa Real Estate Development Co., Ltd., and held 112,479,478 shares of the Company on June 30, 2015,
occupying 26.36%.
Registered capital: 42,674,540,000 yuan
Enterprise Registration number: 460000000159355
Legal representative: Zheng Qing
Registered address: 29/F, Dihao Building, Pearl River Square, Binhai Street, Haikou
Office address: 29/F, Dihao Building, Pearl River Square, Binhai Street, Haikou
Parent company is Beijing Wanfa Real Estate Development Co., Ltd., the final actual controller is Beijing Xinxing Real Estate
Development Company.
(2) Business scope
Industrial investment; real estate development; hotel investment and management; material supply; construction equipment procurement,
leasing; investment consultation.
(3) Nature of businesses and main business activities of the Company
The Company and its subsidiaries are mainly engaged in real estate development, hotel management and property management.
(4) Corporate architecture
Basic organizational structure of the Company: General meeting of stockholders shall be the high authority of Company. Board of
directors shall be the executive body of general meeting of stockholders. Board of supervisors shall be internal supervision body of the
Company. General manager is responsible for the Company’s daily operation and management. The Company is divided into
departments like general manager office, bond department, tourism and real estate department, financial department, management
department and audit department.
On May 6, 2010, Beijing Investment Consultation Branch of Hainan Pearl River Holdings Limited was incorporated, with a registration
number of 110107012835520. Address: Suite 5078, Block 3, 3 Xijing Road, Badachu High-tech Park, Shijingshan District, Beijing.
Business scope includes investment consultation, hotel investment and management.
On October 22, 2012, Heilongjiang Subsidiary of Hainan Pearl River Holdings Limited was incorporated, with a registration number of
2301016100100936. Address: 34 Nongxiao Street, Xiangfang District, Harbin. Business scope: industrial investment, hotel investment
and management, construction equipment procurement, leasing, indoor and outdoor decoration, high-tech project investment, computer
network investment, communication project investment, high-tech technical product development and application, environmental
project investment.
(5) Approval and issuance of financial statement
The financial statement was approved by all directors of the Company and issued on August 27, 2015.
II. Scope of merger financial statement
There are 18 subjects incorporated to the merger financial statement in this period, including:
Holding
Voting rights
Subsidiary’s name Subsidiary type Order proportion
proportion （%）
（%）
Hainan Pearl River Properties and Hotels Management
Holding 2 98 98
Co., Ltd.
Hainan Pearl River Environmental Projects Co.,Ltd.
Holding 3 100 100
Hainan Pearl River Estate Cleaning Company Wholly 3 100 100
Hainan Pearl River Estate Machine Engineering Company Wholly 3 100 100
Hainan Pearl River Estate Marketing Co., Ltd. Wholly 3 100 100
Sanya Wanjia Hotel Management Co., Ltd. Wholly 2 100 100
Holding
Voting rights
Subsidiary’s name Subsidiary type Order proportion
proportion （%）
（%）
Hubei Pearl River Real Estate Development Co., Ltd. Holding 2 89.2 89.2
Wuhan Pearl River Meilin Hotels Management Co., Ltd. Wholly 3 100 100
Hainan Pearl River Holding( Shanghai )Real Estate
Wholly 2 100 100
Co.,Ltd.
Beijing Jiubo Culture Development Co., Ltd. Wholly 2 100 100
Mudanjiang Pearl River Wanjia Tourism Investment
Wholly 2 100 100
Development Group
Hailin Wanjia Xuexiang holiday Hotel Plaza Limited Wholly 3 100 100
Mudanjiang Jingbohu Wanjia Hotel Co., Ltd. Wholly 3 100 100
Mudanjiang Wanjia Star Hotel Co., Ltd. Wholly 3 100 100
Heilongjiang Longshi Pearl River Culture Communication
Holding 3 70 70
Co., Ltd
Harbin Wanjia Travel Agent Wholly 3 100 100
Hebei Zhengshi Qinghui Real Estate Development Co.,
Holding 2 51 51
Ltd.
Shanghai Sea Pearl Property Management Co., Ltd. Holding 2 50 50
There is no change in subjects incorporated into the merger financial statement in this period, compared to the previous period.
III. Compiling foundation of the financial statement
(1) Compiling foundation of the financial statement
The Company affirms and calculate, based on continuous operation, in accordance with actual transaction and matters, Accounting
Standards for Business Enterprises——Basic Principles and Detailed Accounting Standards for Business Enterprises, Application
Guide to Accounting Standards for Business Enterprises, Interpretation of Accounting Standards for Business Enterprises and other
related regulations issued by the Ministry of Finance (hereinafter collectively referred to as “Accounting Standards for Business
Enterprises”), on this basis, in accordance with No.15 Company Information Disclosure, Preparation and Reporting Standard of
Securities Issuance——General Provisions of the Financial Statement issued by China Securities Regulatory Commission (revised in
2014), the financial statement is prepared.
(2) Continuous operation
There is not major doubt about sustainable operation capacity of the Company within 12 months from the end of the report period.
IV. Important accounting policies and accounting estimate
(1) Comply with Accounting Standards for Business Enterprises
The financial statement prepared by the Company complies with requirements of Accounting Standards for Business Enterprises,
reflects related information like financial condition, operating results and cash flow during the report period of the Company in a true
and complete manner.
(2) Accounting period
The accounting fiscal year of the Company begins on January 1 and ends on December 31 of the Gregorian calendar.
(3) Bookkeeping base currency
The Company shall adopt Renminbi as its bookkeeping base currency.
(4) Accountant arrangement method of business merger under the same control and under different controls
1． That articles, principles and economic influences of all deals during business merger are in line with the one or several
cases listed as follows shall be realized in steps, accounting treatment shall be conducted by taking several transactions as
package deals:
i. Theses transactions are concluded by taking influences into consideration;
ii. Theses transactions, on the whole, may realize a complete business result;
iii. The occurrence of a transaction lies in that of at least a transaction;
iv. A transaction is not economic when it is taken into consideration alone, but it is economic when it is taken into consideration
with other dealings.
2． Business merger under the same control
1) Individual financial statement
Where the merger consideration consists of paying cash, transferring non-cash assets, assumption of debts or issuing equity securities,
on the merger date, shares stated in the book value in the merger financial statement of the final controller in accordance with ownership
interests of the party to be merged shall be the initial cost of investment of long-term equity investment. Based on balance between
initial cost of investment of long-term equity investment and merger consideration, capital reserves are adjusted; where capital reserves
are not sufficient for writing-off, retained earnings will be adjusted. Where there is any contingent consideration, and estimated
liabilities or assets shall be affirmed. Based on the balance between the amount of estimated liabilities or assets and subsequent
contingent consideration, capital reserves (capital premium or capital stock premium) shall be adjusted. Where capital reserves are
insufficient, retained earnings shall be adjusted.
Where business merger is realized through several sales which belong to package deals, all deals shall be regarded as that of obtaining
the right of control, and accounting treatment shall be executed; where sales are not package deals, at the date of obtaining the right of
control, initial cost of investment of long-term equity investment, balance between long-term equity investment book value before the
merger and sums of book value when new payment consideration of stocks is obtained on the merger date, capital reserves shall be
adjusted; where capital reserves are insufficient for writing-off, retained earnings shall be adjusted. In respect of the equity investment
held before the merger date, other comprehensive incomes ascertained through business accounting pursuant to equity law or
determined by financial instruments and checked through measurement standards would not immediately be handled through accounting
treatment method. They would be handled through accounting treatment method on the same basis of handling related capital or liability
of the unit to be invested; Other changes in ownership interests except for net profit or loss, other comprehensive incomes and profits
among net capital of the unit to be invested determined through accounting pursuant to equity law, shall not be handled through
accounting method immediately, and shall be transferred to profit and loss in the current period.
All related fees incurred during the merger, including audit fee, appraisal fee and legal service fee paid for sake of merger, shall be
calculated into current profits and losses during the merger; capital reserves shall be written off based on transaction fee related to equity
instruments which are deemed as merger consideration. Where capital reserves are not sufficient for the writing off, surplus public
accumulation and undistributed profit shall be written off in succession; transaction fee related to equity instruments which are deemed
as merger consideration, shall be calculated to initial affirmation amount of debt instruments.
Where there is merger financial statement among combined parties, based on ownership interests owned by the parent company in
merger financial statement of the combined parties on the merger date, initial cost of investment of long-term equity investment shall be
determined.
2) Merger financial statement
Assets and liabilities obtained by combining parties in business merger shall be calculated, in accordance with the book value of
ownership interests of combined parties in the merger financial statement of the final controller on the merger date.
Where business merger is realized through several times of deals which belong to package deal, all deals shall be deemed as those of
obtaining the right of control for the accounting treatment; where deals do not belong to the package deal, in respect of long-term equity
investment held by the combining parties before the business merger, on the date when it is obtained, in consideration of related profit
and loss, other comprehensive incomes and change in other ownership interests when combining parties and combined parties are under
the same final control before the merger date , retained earnings or current profits and losses at the beginning of the term shall be written
off in the period of comparative statement.
Where accounting policy adopted by all the parties to be merged is not in consistency with that of the Company, the Company on the
merger date shall, in accordance with the Company accounting policy, adjust and ascertain pursuant to Accounting Standards for
Business Enterprises.
3． Business merger under different controls
In consideration of business merger under different controls, combined cost refers to assets paid, liabilities incurred or assumed and
issued equity instruments or fair value of debt instruments for sake of obtaining the right of control of the acquiree on the purchase date.
Where future matters which may influence combined cost may be arranged in the merger contract, and the estimated matters on the
purchase date are likely to happen and influenced amount of the combined cost may be reliably calculated, they shall also be calculated
to combined cost.
Brokerage fees like audit, legal service and evaluation and consultation and other relevant management fees incurred for sake of
business merger of the Company, when they are incurred, shall be calculated to current profits and losses; transaction cost of equity
instruments or debt instruments issued as merger consideration by the Company, shall be calculated to initial affirmation amount of
equity instruments or debt instruments.
The difference between the cost of acquisition and fair value of net assets of business share is confirmed as purchased goodwill. Where
the cost of acquisition is less than fair value of net assets of the party to be purchased, after rechecking, the difference between the cost
of acquisition and fair value of net assets of the party to be purchased, shall be calculated to current profits and losses.
Where the business combinations not under the same control realized in steps through several swap transactions belong to package deal,
all deals which shall be deemed as those of obtaining right of control and shall be handled through accounting treatment method; where
the deals do not belong to package deal, relevant accounting treatment shall be conducted by separating individual financial statement
from merger financial statement:
(1) In respect of individual financial statements, where equity investment held before the merger date is calculated in accordance
with the equity law, sum of book value of equity investment held by the acquiree before the purchase date and newly increased cost of
investment on the purchase date, shall be deemed as initial cost of investment; where other comprehensive incomes from equity
investment held before the purchase date is calculated and ascertained based on equity law. The investment would be handled through
accounting treatment method on the same basis of handling related capital or liability of the unit to be invested.
Where equity investment held before the merger date is ascertained through financial instruments and calculated based on calculation
principles, sum of fair value of equity investment on the merger date and newly increased cost of investment, shall be deemed as initial
cost of investment on the merger date. Balance between fair value of the originally held equity rights and the book value as well as
accumulated changes in fair value calculated to other comprehensive incomes shall be transferred to the current income from investment
on the merger date.
(2) When merging the financial statement, the acquiree’s stock rights owned before the purchase date shall be recalculated
according to the fair value of the stock rights on the purchase date. Balance between fair value and its book value shall be calculated to
the current income from investment; where equity rights held by the acquiree before the purchase date refer to other comprehensive
incomes checked pursuant to the equity law, they, together with relevant other comprehensive incomes, shall be transferred to the
income from investment in the period to which the purchase date is subordinate.
(5) Preparation method of merger financial statement
Merger range of merger financial statement of the Company shall be determined based on the control and all the subsidiaries (including
a body controlled by the parent company) shall be incorporated to the merger financial statement.
All the subsidiaries’ accounting policy and accounting period incorporated to merger scope of the financial statement shall be in line
with those of the Company. Where there is any inconsistency of accounting policy and accounting period adopted by subsidiaries with
those of the Company, when preparing merger financial statement, necessary adjustment shall be conducted in accordance with the
Company’s accounting policy and accounting period.
Merger financial statement shall be prepared by the Company according to other related documents, based on financial statement of the
Company and its subsidiaries.
When merging the financial statement, influence of internal dealings between the Company and its subsidiaries and among all
subsidiaries on merger balance sheet, consolidated statement of income, consolidated statement of cash flow and statement of changes in
stockholders' equity accounts, shall be offset.
Where the losses of the current period of minority shareholders at the subsidiaries exceed shares of ownership interests owned by
minority shareholders at the beginning of the term of subsidiaries, the balance still shall write off minority equity.
During the report period, where subsidiaries and businesses are increased due to business merger under the same control, opening
balance of the merger balance sheet shall be adjusted; subsidiaries’ income, fee and profit from the beginning of business merger to the
end of report period shall be incorporated to consolidated statement of income; subsidiaries’ cash flow from the beginning of business
merger to the end of report period shall be incorporated to consolidated statement of cash flow.
During the report period, where subsidiaries and businesses are increased due to business merger not under the same control, opening
balance of the merger balance sheet shall not be adjusted; subsidiaries’ income, fee and profit from the purchase date of businesses to the
end of report period shall be incorporated to consolidated statement of income; subsidiaries’ cash flow from the purchase date of
businesses to the end of report period shall be incorporated to consolidated statement of cash flow.
During the report period, the Company may handle its subsidiaries and businesses, subsidiaries’ income, fee and profit from the
beginning of businesses to the treatment date shall be incorporated to consolidated statement of income; the subsidiaries’ cash flow from
the beginning of businesses to the treatment date shall be incorporated to consolidated statement of cash flow.
Where the Company, due to handling part of equity investment, loses right of control for former subsidiaries, when merging financial
statement, residual equity shall be recalculated, in accordance with the fair value at the date when right of control is lost. Sum of
consideration obtained when handling equity rights and residual equity fair value, minuses the balance of shares of net assets owned by
the former subsidiaries calculated from the purchase date in accordance with the former proportion of shareholding. The final value shall
be calculated to income from investment when right of control is lost. Other comprehensive incomes related to equity investment for the
former subsidiaries, shall be transferred as the current income from investment when right of control is lost.
(6) Classification of joint venturing arrangement and accountant arrangement method of joint operation
1． Classification of joint venturing arrangement
The Company, in accordance with structure, form of law as well as articles and other related truths and circumstances in the joint
venturing arrangement, divides joint venturing arrangement into joint operation and cooperative enterprises.
Joint venturing arrangement which is not realized through individual subjects, shall be classified as joint operation; joint venturing
arrangement realized through individual subjects, shall be often classified as cooperative enterprises; joint venturing arrangement which
meets one of the following requirements and is in compliance with relevant laws and regulations as proven by hard evidences, shall be
classified as joint operation:
（1） Form of law in the joint venturing arrangement shows that, the party of joint venturing is entitled to rights and shall
assume obligations for related assets and liabilities in the arrangement.
（2） In accordance with contract articles provided in the joint venturing arrangement, the party of joint venturing is entitled to
rights and shall assume obligations for related assets and liabilities in the arrangement.
（3） Other related truths and circumstances show that, the party of joint venturing is entitled to rights and shall assume
obligations for related assets and liabilities in the arrangement, for example, the party of joint venturing is entitled to almost all the
output related to joint venturing arrangement, and the clearing off of liabilities in the arrangement shall continue to rely on the support
from the party of joint venturing.
2． Accountant arrangement method of joint operation
The Company determines the following items related to the Company in profit shares in joint operation, accounting treatment shall be
conducted in accordance with relevant Accounting Standards for Business Enterprises:
（1） Assets solely owned, and assets jointly owned according to the shares;
（2） Liabilities solely owned, and liabilities jointly assumed according to the shares;
（3） Ascertain to sell income from shares of joint operation;
（4） Income from selling output of joint operation according to its shares;
（5） Fee incurred alone, and fee incurred in joint operation according to its shares.
Where the Company invests or sell assets during the period of joint operation, the Company, before selling the assets during the period
of joint operation (except for businesses facilitated by the assets) to a third party, shall ascertain part of profits and losses which are
owned by other participants of the joint operation. In respect of the loss in impairment of asset, where assets invested or sold are in line
with No.8 Document of Accounting Standards for Business Enterprises——Impairment of Asset, the Company shall ascertain the loss in
full.
The Company, before selling the assets purchased during the period of joint operation (except for businesses facilitated by the assets) to
a third party, shall ascertain part of profits and losses which are owned by other participants of the joint operation. In respect of the loss
in impairment of asset, where assets purchased are in line with No.8 Document of Accounting Standards for Business
Enterprises——Impairment of Asset, the Company shall ascertain the losses based on its shares.
The Company shall not be entitled to joint control of common operation. Where the Company is entitled to relevant assets under the
joint operation ans assumes related liabilities under the joint operation, accounting treatment shall be carried out in accordance with the
aforesaid principles, otherwise, accounting treatment shall be carried out in accordance with related regulations of Accounting Standards
for Business Enterprises.
(7) Determination standard of cash and cash equivalents
When preparing the cash flow statement, cash on hand and deposits which can be paid at any time shall be affirmed as cash. The term
"cash equivalents " refers to short-term (begin from the purchase date and due within 3 months) and highly liquid investments that are
readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value.
(8) Discounting of foreign currency transaction and foreign currency statements
1． foreign currency transaction
When foreign currency transaction is initially ascertained, it shall be discounted to Renminbi according to the spot rate on the
transaction date which is deemed as discounting exchange rate.
Foreign currency monetary items shall be discounted based on the sport rate on the balance sheet date, exchange balance incurred shall
be calculated to current profits and losses, except for exchange balance incurred due to foreign currency loans related to construction
capital in line with capitalization which shall be handled according to the principle of capitalization of borrowing costs. Foreign
currency non-monetary items calculated based on historic cost, shall be discounted based on the sport rate on the transaction date, and
its bookkeeping base currency amount shall not be changed.
Foreign currency non-monetary items calculated based on fair value, shall be discounted based on the sport rate on the date when fair
value is determined. Exchange balance incurred shall be deemed as profit or loss from changes in fair value and shall be calculated to
current profits and losses. Where they belong to foreign currency non-monetary items available for sale, exchange balance incurred shall
be calculated to other comprehensive incomes.
2． Discounting of foreign currency financial statement
Assets and liabilities stated in the balance sheet shall be discounted based on the sport rate on the balance sheet date; in respect of
ownership interests, except for “undistributed profit”, other projects shall be discounted according to the sport rate when they are
incurred. Income and fee stated in the income statement shall be discounted based on the sport rate on the transaction date. Discounting
balance in the foreign currency financial statement incurred according to the aforesaid discounting method, shall be calculated to other
comprehensive incomes.
When handling overseas operation, discounting balance in the foreign currency financial statement related to overseas operation and
listed in items of other comprehensive incomes in the balance sheet, shall be transferred to current profits and losses from items of other
comprehensive incomes; in case of overseas operation, according to the ratio of treatment, discounting balance in the foreign currency
financial statement shall be calculated and transferred to current profits and losses.
(9) Financial instruments
Financial instruments consist of financial assets, financial liability and equity instrument.
1． Classification of financial instruments
Managers, in accordance with contract articles of the issued financial instruments and economic essence reflected therefrom rather than
form of law, based on purposes of obtaining financial assets and assuming financial liability, divide financial assets and financial
liability into different types: financial assets calculated based on fair value and whose changes shall be calculated into current profits and
losses (or financial liability); held-to-maturity investment; receivables; financial assets available for sale; other financial liability.
2． Recognition basis and calculation methods of financial instruments
（1） financial assets calculated based on fair value and whose changes shall be calculated into current profits and losses (or
financial liability)
（1）financial assets or financial liability calculated based on fair value and whose changes shall be calculated into current profits
and losses (or financial liability), consist of tradable financial assets or financial liability, and financial assets or financial liability
calculated based on fair value and whose changes shall be calculated into current profits and losses (or financial liability).
Tradable financial assets or financial liability refers to those meeting one of the following requirements:
1) The purpose of obtaining financial assets or financial liability is to sell, repurchase and redeem within a short period;
2) Belong to part of identifiable financial instrument portfolio under centralized management. Any objective evidence proves that
the Company recently manages the portfolio through profiting method in the short term;
3) Belong to derivative financial instruments, except for derivatives which are designated as effective hedging instruments, which
are under financial guarantee contract, which are related to equity investment that is not quoted on an active market and whose fair value
cannot be measured reliably and shall go through to the settlement of derivative financial instruments.
Only by meeting one of the following requirements, can financial assets or financial liability be referred to as financial assets or
financial liability: financial assets or financial liability calculated based on fair value and whose changes shall be calculated into current
profits and losses at the beginning of the calculation.
1) The regulation can remove or obviously reduce inconsistency of related profits or losses in terms of affirmation or calculation,
due to different calculation basis of financial assets or financial liability;
2) As stated in official written documents related to risk management or investment strategy, the financial assets portfolio, financial
liability portfolio, or portfolio of financial assets and financial liability, shall be managed, estimated and reported to key managers based
on fair value;
3) mixed tools including one or several embedded derivatives, only when there is no important change in cash flow of mixed tools
caused by embedded derivatives, or embedded derivatives shall not be separated from related mixed tools;
4) including mixed tools of embedded derivatives which require separation but fail to be calculated separately when they are
obtained or at the subsequent balance sheet date.
In respect of financial assets or financial liability calculated based on fair value and whose changes shall be calculated into current
profits and losses when they are obtained, fair value shall be (deducting cash dividends which are reported but fail to be issued or
debenture interests which are not obtained during the period of interest payment) regarded as initial affirmation amount. Relevant
transaction cost shall be calculated to current profits and losses. When holding such amount, interests or cash dividends obtained shall
be affirmed as the income from investment, changes in fair value shall be calculated to current profits and losses at the end of the term.
Balance between fair value and initial amount when entering an item in an account shall be confirmed as income from investment, while
profit and loss of changes in fair value shall be adjusted.
（2） receivables
In respect of obligation receivable formed when the Company sells products or provides service, and creditor's rights of debt instrument
of other enterprises held by the Company, excluding those have quoted price on the active market, including receivables and other
receivables, contract or agreement amount collected from the buyer shall be deemed as initial affirmation amount; in respect of those
with the nature of financing, they shall be affirmed in accordance with their present values.
When redeeming or treating such receivables, balance of amount obtained and receivables book value shall be calculated to current
profits and losses.
（3） Held-to-maturity investment
Held-to-maturity investment refers to non-derivative financial assets featured by fixed due date, fixed recoverable amount which may be
affirmed, while the Company has specific intentions and capacity to hold it to maturity.
When obtaining held-to-maturity investment, sum of fair value (deducting debenture interests which are not obtained during the period
of interest payment) and relevant transaction cost shall be deemed as initial affirmation amount. When holding such investment,
interests income shall be calculated in accordance with amortized cost and actual interest rate, and shall be calculated to income from
investment. Actual interest rate shall be affirmed when it is obtained, and shall not be changed during the expected period of existence or
suitable shorter period. When treating such investment, balance between amount obtained and book value shall be calculated to income
from investment.
Where the amount after treatment or reclassification of held-to-maturity investment to other types of financial assets is larger than the
total amount of all held-to-maturity investment before it is sold or reclassified, the Company, after the treatment or reclassification, shall
immediately reclassify remaining held-to-maturity investment as financial assets available for sale; at the date of reclassification,
balance between the invested book value and the fair value shall be calculated to other comprehensive incomes, and shall be transferred
when there is a decrease in value of financial assets available for sale or determination is terminated, it shall be calculated to current
profits and losses, except for the following circumstances:
1) Sales date and reclassification date is close to due date or redemption date of the investment (for example, within 3 months
before maturity), and changes in market interest rate have not remarkable influence on fair value of the investment.
2) In accordance with the mode of payment as stated in the contract, the enterprise has already taken back all initial principals.
3) Sales or reclassification are caused by independent events which are not controlled by the Company, whose repeated events
would not occur and which are difficult to estimate in a reasonable way.
（4） Financial assets available for sale
Financial assets available for sale refer to financial assets which are deemed as non-derivative financial assets available for sale when
they are initially affirmed, and those excluding other financial assets.
In respect of financial assets available for sale, sum of fair value (deducting cash dividends which are reported but fail to be issued or
debenture interests which are not obtained during the period of interest payment) and relevant transaction cost shall be deemed as initial
affirmation amount when they are obtained. Interests obtained when holding such financial assets or cash dividends shall be affirmed as
income from investment. Profit or loss formed by changes in fair value of financial assets available for sale, except for balance of
exchanges formed by impairment loss and monetary financial assets of foreign currency, shall be directly calculated to other
comprehensive incomes. When treating financial assets available for sale, balance between amount obtained and financial assets book
value shall be calculated to profit and loss on investments; meanwhile, amount related to accumulated amount of changes in fair value
which shall be directly calculated to other comprehensive incomes shall be transferred, and shall be calculated to profit and loss on
investments.
In respect of equity instrument investment which has no quoted price at the active market and whose fair value may not be reliably
calculated, and derivative financial assets which are related to the equity instrument and shall be calculated through paying the equity
instrument, shall be calculated based on the cost.
（5） Other financial liability
Sum of fair value and relevant transaction cost shall be deemed as initial affirmation amount. Subsequent calculation shall be carried out
based on the amortized cost.
3． Recognition basis and calculation method of financial assets transfer
When transfer of financial assets occurs at the Company, if almost all the risks and rewards under the financial assets ownership are
transferred to the party to be transferred, determination of the financial assets shall be terminated; if almost all the risks and rewards
under the financial assets ownership are reserved, determination of the financial assets shall not be terminated.
When judging whether transfer of financial assets meets the aforesaid requirements of termination of determination of financial assets,
principle that substance is more important than the form shall be utilized. The Company shall divide transfer of financial assets into
overall and partial transfer of financial assets. Where transfer of financial assets meets the requirements of termination of affirmation,
balance of the following two amounts shall be calculated to current profits and losses:
(1) Book value of the transferred financial assets;
(2) Sum of consideration received due to transfer and accumulated amount of changes in fair value which shall be directly
calculated to ownership interests (involving the transferred financial assets are financial assets available for sale).
Where partial transfer of financial assets meets requirements of termination of determination, financial assets overall book value of
financial assets transferred whose recognition has yet to be stopped, shall be amortized according to respective relative fair value, and
balance of the following two amounts shall be calculated to current profits and losses:
(1) Book value stated in the part of termination of determination;
(2) Sum of consideration whose recognition has stopped and amount (involving the transferred financial assets are financial assets
available for sale) whose recognition has stopped in the accumulative amount of changes in fair value which shall be directly calculated
to ownership interests.
Where the transfer of financial assets may not meet the requirements of termination of determination, determination of the financial
assets shall be continued, consideration received shall be determined as a financial liability.
4． Requirements for termination of determination of financial liability
Where all or part of current obligations under financial liability are terminated, determination of all or part of financial liability shall be
terminated; where the Company signs an agreement with a creditor, it shall assume a new financial liability in lieu of the current
financial liability. Where there is substantial change in contract articles of new financial liability and current financial liability,
determination of current financial liability shall be terminated, new financial liability shall be, at the same time, determined.
Where there is substantial modification in all or part of contract articles of the current financial liability, determination of all or part of
current financial liability shall terminated. Meanwhile, financial liability after articles are modified shall be determined as a new
financial liability 。
Where financial liability terminates its affirmation completely or partly, balance between financial liability book value which terminates
the affirmation and paid consideration (including the transferred non-cash assets or new financial liability), shall be calculated to current
profits and losses.
Where the Company may repurchase part of financial liability, at the repurchase date, in accordance with relative fair values which
continue to be affirmed or terminate to be affirmed, book value of the financial liability shall be allotted. Balance between book value
assigned to the part of termination of affirmation and the paid consideration (including the transferred non-cash assets or new financial
liability), shall be calculated to current profits and losses.
5． Determination method of financial assets and financial liability fair value
In respect of financial assets and financial liability which are measured through fair value and financial assets or financial liability on the
active market, the fair value shall be ascertained based on the quoted price at the active market; in respect of financial assets or financial
liability which are not on the active market, the fair value shall be ascertained through the valuation technique (including referring to
prices in recent market dealings of all parties who are familiar with the situations and are willing to trade, current fair value of other
financial instruments which are same on the substantial basis, cash flow discounting method and options pricing model); in respect of
initial obtained or derivative financial assets or assumed financial liability, market transaction price shall be deemed as the basis for
ascertaining the fair value.
6． Calculation and withdrawal of financial assets (excluding receivables) provision for diminution in value
Book value shall be checked of financial capitals measured through fair value except for financial capitals whose changes are calculated
to current profit and loss, where any objective evidence proves that there is decrease in value of the financial assets, provision for
diminution in value shall be withdrawn.
Objective basis of decrease in value of financial assets includes but not limited to:
（1） the issuer or the debtor has serious financial difficulties;
（2） the debtor breaches contract articles, including paying interests or any infringement of agreement or overdue principal;
（3） The creditor, in consideration of economic or legal factors, makes a concession to the debtor who has financial
difficulties;
（4） the debtor may go bankrupt or carry out other financial recombination;
（5） Where there are important financial difficulties for the issuer, financial assets failed to be transacted at the active market;
（6） Whether cash flow of certain assets in one group of financial assets decreases could not be identified, but it is found after
comprehensive evaluation based on open data, estimated cash flow in the group of financial assets decreases and can be calculated, for
example, the debtor’s payment capacity in the group of financial assets gradually worsens, or unemployment rate in the country or area
where the debtor is seated increases, price of guaranty at the area obviously declines and industry is sluggish;
（7） Due to remarkable changes in technical, market, economic or legal environment of equity instrument issued and managed,
investors of equity instrument may fail to withdraw cost of investment;
（8） There is serious or non-temporary fall in fair value invested by the equity instrument;
Detailed methods of decrease in value of financial assets are listed as follows:
(1) Provision for diminution in value of financial assets available for sale
The Company evaluates impairment loss in all financial assets available for sale based on specific identification method on the balance
sheet date, of which: objective evidence of decrease in value of investment in equity instrument available for sale includes serious or
non-temporary fall in fair value invested by the equity instrument. Detailed quantitative criteria are: where the fair value of equity
instrument investment on the balance sheet date is 50% (including 50%) lower than its cost, or the phenomena that the value is lower
than its initial cost of investment lasts for more than 1 year (including 1 year), decrease in value occurs; wherethe fair value of equity
instrument investment on the balance sheet date is 20% (including 20%) higher than its cost, but fails to reach 50% of the cost, the
Company may take into overall consideration other relevant factors like price volatility, and judges whether there is decrease in value in
investment of the equity instrument.
The aforesaid “cost ” shall be determined in accordance with initial cost obtained from equity instrument investment available for sale,
deducting the principal withdrawn and amortization amount, impairment loss calculated to profits and losses; “fair value ” shall be
determined in accordance with closing price of securities exchange at the end of the term.
When there in decrease in value of financial assets available for sale, even though the financial assets do not terminate the affirmation,
the Company transfers accumulating losses which shall be directly calculated to other comprehensive incomes caused by the decrease in
fair value, they shall be calculated to current profits and losses. The transferred accumulating losses equal to initial cost obtained from
financial assets available for sale, deducting balance among the principal withdrawn and amortization amount, current fair value, and
impairment loss calculated to profits and losses.
(2) Provision for diminution in value of held-to-maturity investment
In respect of held-to-maturity investment, where a decrease in value can be ascertained according to objective evidences, impairment
loss shall be calculated and determined in accordance with balance between the book value and the present value of the estimated cash
flow in the future; after withdrawing, if any evidence shows that its value is restored, the former impairment loss ascertained shall be
withdrawn, and calculated to current profits and losses, but the book value withdrawn shall not exceed amortized cost of the financial
assets at the date of withdrawal, suppose provision for diminution in value may not be withdrawn.
(10) Receivables
1． Receivables in which bad-debt provision shall be calculated and withdrawn and their single amount is major
Determination standard of receivables in which single amount is major and bad-debt provision shall be calculated and withdrawn in
single amount: detailed standard of major single amount: balance at the end of the term surpasses 1 million yuan (including 1 million
yuan).
Methods of calculation of bad-debt provision of receivables in which single amount is large: when test of decrease in value is conducted
in a single manner, bad-debt provision shall be calculated and withdrawn in accordance with the balance between estimated cash flow
value and the book value, and shall be calculated to current profits and losses. Where decrease in value of receivables doesn’t occur after
the single test, bad-debt provision shall be calculated and withdrawn based on the related portfolio.
2． Receivables in which bad-debt provision shall be calculated and withdrawn based on the portfolio
(1) Determination basis of characteristic portfolio of credit risks
In respect of receivables of related parties among enterprises in the business merger range of Pearl River Holdings, bad-debt provision
shall not be withdrawn according to the principle, where any hard evidence proves that it shall not be withdrawn or the possibility to
withdraw is small, bad-debt provision shall be withdrawn according to its unrecoverable amount.
In respect of receivables whose single amount is not major at the end of the term, and not in the merger financial statement scope of
Pearl River Holdings merger financial statement, bad-debt provision shall be calculated and withdrawn based on aging analysis method,
together with receivables whose values are not decreased after single testing.
(2) Methods of calculation determined in accordance with characteristic portfolio of credit risks
Bad-debt provision shall be withdrawn based on the aging analysis method:
Percentage of Accounts Percentage of Others Receivable
Ages
Receivable (%) (%)
Within 1 year (including 1 year, same as following) 2 2
1 year to 2 years 5 5
Percentage of Accounts Percentage of Others Receivable
Ages
Receivable (%) (%)
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
1． Receivables in which their single amount is not major but bad-debt provision shall be calculated and withdrawn in
single amount
Reasons for calculating and withdrawing bad-debt provision in single amount are: objective evidences show that the Company may not
collect the fund in accordance with former articles of receivables.
Methods of calculation of bad-debt provision: it shall be calculated and withdrawn in accordance with balance between estimated cash
flow value of receivables in the future and the book value.
(11) Inventory
1. Classification of inventories
Inventories mainly include real estate development project, development cost, raw materials, goods in stock, low-value consumables,
and others.
Real estate development products include real estate product under construction and development, completed product, and proposed
development land. The actual cost of real estate development is composed by land transfer fee, expenditure of infrastructure,
expenditure of construction and installation engineering, borrowing cost incurred before the completion of the development project, and
other relevant costs incurred in the process of development.
Development cost refers to the property that has not been built based on the purpose of sales; proposed development land refers to
purchased land that will be developed into a completed development product; development product refers to the property that has been
completed and is ready for sales. When the project is developed overall, the proposed land is transferred into the development cost;
when the project is developed in stages, such land is transferred into the development cost and the undeveloped land is recognized as
proposed development land.
2. Valuation method of inventory
Specific identification method is used to recognize the actual cost of inventory when the real estate development product inventory is
sold. Other inventories are accounted by weighted average method.
3. Determination basis of inventory net realizable value and provision method of inventory provision for loss
At the end of the period, inventory is measured based on the costs and net realizable value, whichever is lower. The provision of
allowance of inventory valuation is made on the basis a single inventory cost is higher than the difference of its net realizable value. Net
realizable value, according to the daily activities, is recognized by deducting the to-be incurred costs, estimated sales costs, and relevant
taxes from the estimated sales price of inventory.
When factors that caused deduction of prior inventory value disappear, the deducted amount is resumed, and originally accrued
depreciation provision is returned. The amount returned is recorded into current income statement.
4. Inventory system
Perpetual inventory system is used.
5. Amortization method of low-value consumption goods and packing materials
One-off write-off method is used.
6. Accounting method for developed land
Together with the entire real estate development project, the costs may distinguish the object of burden sharing. Generally, it is
recognized as commercial housing cost based on the actual shared area.
7. Accounting method for public facility costs
Public facility unavailable for involuntary transfer: the standard distribution is recognized as commercial housing cost subject to the
benefit ratio.
Public facility available for involuntary transfer: each facility project is recognized as the object of cost accounting. All costs incurred
are accumulated.
8. Accounting method for maintenance fund
According to the relevant provisions of the site the development project is located, when selling (pre-selling) the development product,
the maintenance fund collected from the purchaser are recognized as the development cost of the project and paid to the fund
administrative department.
9. Accounting method for quality bond
Quality bond refers to fess reserved from the construction cost of the contractor according to the provisions of the construction contract.
The maintenance fees incurred from the warranty period of the development product are written down as quality bond; upon the
expiration of the agreed warranty period, the balance of the quality bond is returned to the contractor.
(12) Long-term equity investment
1. Recognition of investment costs
(a) The accounting policies for long-term equity investment formed from enterprise consolidation are listed in Appendix IV/ (IV)
accounting method for enterprise consolidation under the same or not under the same control.
(2) Long-term equity investment acquired by other methods
The initial investment cost of a long-term equity investment obtained by making payment in cash is the purchase cost which is actually
paid. The initial investment cost consists of the expenses directly relevant to the obtainment of the long-term equity investment, taxes
and other necessary expenses.
The initial investment cost of a long-term equity investment obtained on the basis of issuing equity securities is the fair value of the
equity securities issued; the trading costs incurred from the issuance or acquisition of equity instrument that can be directly attributed to
equity transaction are deducted from equity.
On the premise that the non-monetary asset swap is provided with commercial substance and the fair value of swap-in asset or swap-out
asset can be reliably measured, the long-term equity investment from non-monetary asset swap is recognized as its initial investment
cost based on the fair value of its swap-out asset, unless otherwise the convincing evidence provides that the fair value of swap-in asset
is more reliable; the non-monetary asset swap failed to meet the above premises are recognized as the initial investment cost of swap-in
long-term equity investment by the book value of the swap-in asset and relevant taxes payable.
The initial investment cost of long-term equity investment acquired from debt reorganization is recognized based on the fair value.
2. Recognition of subsequent measurement and profit and loss
(1) Cost method
Cost method is used for long-term equity investment that the company is able to control the investee. The price of a long-term equity
investment measured by employing the cost method is included at its initial investment cost. If there are additional investments or
disinvestments, the cost of the long-term equity investment is adjusted.
The dividends in cash or profits declared to distribute by the investee are recognized as the investment income of the current period
except for the dividends in cash or profits that have been declared but not issued in the actually paid payment or consideration upon
acquisition of the investment.
(2) Equity method
Equity method is used to measure the long-term equity investment in joint ventures and associates; for equity investment in the joint
venture that indirectly held by risk investment institutions, mutual funds, trust companies or similar subject including unit-linked
insurance funds, the fair value is used for measurement and its change is recognized as profit or loss.
Where the initial investment cost of a long-term equity investment is larger than the investing enterprise' attributable share of the fair
value of the investee's identifiable net assets for the investment, the initial cost of the long-term equity investment may not be adjusted;
where the initial cost of a long-term equity investment is smaller than the investing enterprise' attributable share of the fair value of the
investee's identifiable net assets for the investment, the difference is recognized at profits and losses of the current period.
After acquisition of long-term equity investment, the profit or loss on investment and other comprehensive income are recognized as
investment income and other comprehensive income, respectively, according to net profit or loss of the investee that should be entitled
to or shared and the book value of the long-term equity investments is adjusted. The company calculates its share according to the
profits and cash dividends distribution declared by investee and writes off against the book value of long-term equity investments
accordingly; for other changes in shareholders equity of the investee except for net income, other comprehensive income and profit
distribution, the book value of long-term equity investment is adjusted and recognized as shareholders equity.
The company, on the ground of the fair value of all identifiable assets of the investee when it obtains the investment, recognizes the
identifiable asset of the net profit and loss of the investee after it adjusts the net profit of the investee. The unrealized internal
transactions between the company and its joint ventures or associates are calculated based on the share ratio. The part attribute to the
company is written down. The investment profit and loss is recognized based on it.
Where the company intends to share the losses of the investee, the following sequence is followed: first of all, write-down the book
value of long-term equity investment; secondly, if the book value of long-term equity investment is insufficient to write-down, further
recognize the investment loss subject to the limitation of the book value of long-term equity investment of net investment contributed by
the investee substantively and write-down the book value of long-term payable; lastly, based on the above mentioned methods,
according to the investment contract or agreement, where the company is still required to undertake additional obligations, recognize the
estimated debt subject to the expected obligations and record it in the investment loss of the current period.
Where profit is realized by the investee in future period, after deduction of the share amount of unconfirmed loss by the company,
write-down the book balance of the confirmed estimated liability in contrary to the above order processing, recover the book value of
the long-term equity and long-term equity investment that substantially from the net investment made to the investee, and recover the
recognition of investment returns.
3. Conversion of accounting method for long-term equity investment
(1) Conversion from fair value measurement to equity accounting method
Where the equity investment, originally holding by the company in the investee that has not control, joint control or significant influence
and recognized and measured based on financial instrument, is able to levy significant influence on the investee or implement joint
control but not constitute control due to additional investment and other reasons, the sum obtained by plus the newly increased
investment cost to the fair value of the originally held equity investment recognized in accordance with the provisions of Accounting
Standards for Enterprises No. 22–Recognition and Measurement of Financial Instruments is regarded as the initial investment cost for
conversion of equity method.
Where the originally held equity investment is classified as available-for-sale financial asset, the difference between its fair value and
the book value as well as the accumulated change in fair value that originally recognized as other comprehensive income is measured
using equity method.
Where the initial investment cost is less than the difference of the fair value share of net identifiable asset on the additional investment
date in the investee recognized based on the calculation of new shareholding ratio after additional investment, adjust the book value of
long-term equity investment and recognize it as non-operating revenue in the current period.
(2) Conversion from fair value measurement or equity method to cost method
Where the equity investment originally holding by the company in the investee that has not control, joint control or significant influence
and recognized and measured based on financial instrument, or the original long-term equity investment in joint ventures and associates
are able to implement control on the investee not under the same control due to additional investment and other reasons, when
formulating the individual financial statements, the sum obtained by plus the newly increased investment cost to the book value of
original equity investment is regarded as the initial investment cost for cost method.
For other comprehensive income measured and recognized by using equity method, the disposal of the equity investment that originally
held before the acquisition date is measured subject to the accounting method for the directly disposal of the related assets and liabilities
by the investee.
The equity investment that originally held before the acquisition date is measured according to the relevant provisions of Accounting
Standards for Enterprises No. 22–Recognition and Measurement of Financial Instruments. The accumulative change in fair value
originally recognized as other comprehensive income is transferred into the profit and loss of the current period by using cost method.
(3) Conversion from equity method to fair value measurement
Where the joint control or significant influence on the investee is lost due to the disposal of partial equity investment, the residual equity
after such disposal is measured in accordance with the provisions of Accounting Standards for Enterprises No. 22–Recognition and
Measurement of Financial Instruments. The difference between the fair value on the date of losing and the book value is recognized as
the profit and loss of the current period.
The original equity investment’s other comprehensive income, measured and confirmed by using equity method, is measured on the
same basis that the invenstee directly disposes the relevant assets and liabilities upon the termination of the use of equity method.
(4) Conversion from cost method to equity method
Where the company loses its control of an investee due to the disposal of partial equity investment, when formulating the individual
financial statements, if the residual equity after such disposal is able to implement common control or levy significant influence on the
investee, the equity method is used for measurement. Accordingly, such residual equity is deemed as being adjusted by using equity
method upon acquisition.
(5) Conversion from cost method to fair value measurement
Where the company loses its control of an investee due to the disposal of partial equity investment, when formulating the individual
financial statements, if the residual equity after such disposal is unable to implement common control or levy significant influence on
the investee, the relevant provisions of Accounting Standards for Enterprises No. 22 – Recognition and Measurement of Financial
Instruments are applied as the accounting method. Accordingly, difference between the fair value on the date of losing and the book
value is recognized as the profit and loss of the current period.
4. Disposal of long-term equity investment
For the disposal of the long-term equity investment, the difference between the book value and the actual acquisition price is recognized
as the profit and loss of the current period. The long-term equity investment measured by using equity method, when disposal such
investment, is measured on the same basis that the invenstee directly disposes the relevant assets and liabilities subject to the part of
other comprehensive income originally recognized according to the corresponding ratio.
Where the disposal of the equity investment of the company’s subsidiaries in aspects of the terms, conditions and economic effect of all
transactions meets one or more conditions listed below, the multiple deal matters are measured as package deals:
(1) These deals are established simultaneously or taking into consideration of the mutual influence;
(2) These deals may entirety realize complete commercial results;
(3) The occurrence of a deal depends on the occurrence of at least one deal;
(4) A deal itself is not economic but is economic when considering it jointly with other deals.
If the loss of the controlling of an original subsidiary due to the disposal of partial equity investment or other reasons is not classified as
package deal, the accounting methods for individual financial statements and consolidated financial statements are distinguished:
(1) In individual financial statements, the different between the book value of the disposed equity and its actual acquisition price is
recognized as the profit and loss of the current period. If the residual equity after such disposal is able to implement common control or
levy significant influence on the investee, such residual equity is deemed as being adjusted by using equity method upon acquisition; if
the residual equity after such disposal is unable to implement common control or levy significant influence on the investee, the relevant
provisions of Accounting Standards for Enterprises No. 22 – Recognition and Measurement of Financial Instruments are applied as the
accounting method. Accordingly, the difference between the fair value on the date of losing and the book value is recognized as the
profit and loss of the current period.
(2) In consolidated financial statements, for all deals concluded before losing controlling in a subsidiary, where there is a difference
between each disposal price and the disposal of the share of net assets that continuously calculated from the purchase date or
consolidation date of the long-term equity investment corresponding to the investment, the capital reserve (equity premium) is adjusted.
If the capital reserve is insufficient to write-down, adjust the retained earnings; when losing the control in a subsidiary, the residual
equity is re-measured subject to the fair value on the date of losing. The difference, obtained from deducting the share of net assets
continuously calculated from the purchase date of the original subsidiary subject to the original shareholding ratio from the sum between
the consideration acquired from disposal of equity and the fair value of the residual equity, is recorded as the investment income of the
current period when the control is lost. At the same time, the goodwill is written down. Other comprehensive income relating to original
subsidiary equity investment is transferred into the investment income of the current period when the control is lost.
If the deals of disposal of the equity investment of a subsidiary company until the loss of the control are package deals, all deals are
regarded as one to dispose the equity investment of the subsidiary and cause accounting processing against the deals losing the control.
Distinguish the individual financial statements and the consolidated financial statements for relevant accounting process:
(1) In individual financial statements, the difference between each disposal price before losing the control and the disposal of book
value of the long-term equity investment corresponding to the investment is recognized as other comprehensive income and transferred
into the profit and loss of the current period when the control is lost.
(2) In consolidated financial statements, the difference between each disposal price before losing the control and the disposal of the
share of net assets of the subsidiary corresponding to the investment is recognized as other comprehensive income and transferred into
the profit and loss of the current period when the control is lost.
5. Criterion for common control and significant influence
If the company participants in the arrangement of collective control with other parties in accordance with the relevant agreement and has
the right to make decisions on significant influence regarding to the return of the arrangement, and it is only regarded as existence upon
the approval by the participating party through sharing the controlling, in this case, the company is deemed as common control of a
certain arrangement with other parties. Such arrangement is joint arrangement.
Joint arrangement is achieved through sole subject. When judging the company has rights against the net assets of such sole subject
according to the relevant agreement, such sole subject, as a joint venture, is measured by using equity method. If the company has not
rights against the net assets of such sole subject according to the relevant agreement, on the basis that such sole subject acts as a joint
operation party, the company recognizes the items relating to joint operation benefits and causes accounting process according to
relevant provisions of the accounting standards for enterprises.
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. The company judges
the significant influence on the investee by one or more following circumstances and comprehensively considering all facts and
conditions: (1) Representative has been designated to the board of directors or similar authority of the investee; (2) participating in the
process of investee in financial and operating policy formulation; (3) any significant deal has been established with the investee; (4)
management personnel has been designated to the investee; (5) has provided key technical data to the investee.
(13) Investment real estate
The term "investment real estate" refers to the real estate held for generating rent and/or capital appreciation, or a combination of both. It
includes 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 investment real estates of the company are recognized subject to its costs. The cost of an investment real estate by acquisition
consists of the acquisition price, relevant taxes, and other expenses directly relegated to the asset; the cost of a self-built investment real
estate composes of the necessary expenses for building the asset to the hoped condition for use.
The subsequent measurement of the investment real estate by using cost method is depreciated or amortized subject to its estimated
service life and net residual rate against the constructions and land use right. Its estimated service life, net residual rate, and annul
depreciation (amortization) rate are as below:
Category Estimated useful lives (years) Expected residual value (%) Annual depreciation rate (%)
Buildings and structures 25 5.00% 3.80%
If the usages of an investment real estate are for self-use, from the date of change, the company converses the investment real estate into
fixed assets or intangible assets. If the usages changes into generating rent or capital appreciation, from the date of change, the company
converses the fixed assets or intangible assets into investment real estate. When conversing, the book value before such conversion is
recognized as the value after conversion.
If an investment real estate is disposed of, or if it withdraws permanently from use and if no economic benefit will be obtained from the
disposal, the recognition of it as an investment real estate is terminated. When the company sells, transfers or discards any investment
real estate, or when any investment real estate of the company is damaged or destroyed, the company deducts the book value of the
investment real estate as well as the relevant taxes from the disposal income, and recognizes it as the profit and loss of the current
period.
(14) Fixed assets
1. Recognition conditions for fixed assets
The term "fixed assets" refers to the tangible assets held for the sake of producing commodities, rendering labor service, renting or
business management and their useful life is in excess of one fiscal year. No fixed asset may be recognized unless it simultaneously
meets the conditions as follows:
(1) The economic benefits pertinent to the fixed asset are likely to flow into the enterprise; and
(2) The cost of the fixed asset can be measured reliably.
2. Initial Measurement
The initial measurement of a fixed asset is made at its cost. Of which, the cost of a purchased fixed asset consists of the purchase price,
the relevant taxes, and other expenses that bring the fixed asset to the expected conditions for use and that may be relegated to the fixed
asset. The cost of a self-constructed fixed asset is formed by the necessary expenses incurred for bringing the asset to the expected
conditions for use. The cost invested to a fixed asset by the investor is ascertained in accordance with the value as stipulated in the
investment contract or agreement, other than those of unfair value as stipulated in the contract or agreement. If the payment for a fixed
asset is delayed beyond the normal credit conditions and it is of financing nature in effect, the cost of the fixed asset is ascertained based
on the current value of the purchase price. The difference between the actual payment and the current value of the purchase price is
recognized as the profit and loss of the current period within the credit period, unless it is capitalized.
3. Subsequent measurement and disposal
(1) Depreciation
Provision of depreciation of fixed assets is provided subject to the deduction of estimated residual value from its recorded value within
the estimated useful life period. The depreciation amount of the fixed assets that the provision of impairment reserve was provided is
recognized in the future period by deduction the book value of impairment reserve in accordance with the available service years.
The service life and estimated residual value of fixed assets are recognized subject to the nature and use of its. At the end of each year,
the service life, estimated residual value, and depreciation of the fixed assets are checked. If it has difference with the original forecast
amount, the corresponding adjustment is made.
The depreciation method, life, and annual depreciation rate of fixed assets are as below:
Depreciation method Estimated useful lives Expected residual value Annual depreciation rate
Category
(years) (%) (%)
Buildings and Life average method
25 5.00% 3.80%
structures
Vehicles Life average method 5 5 19.0
General equipments Life average method 10 5 9.5
Other equipments Life average method 5 5 19.0
(2) Subsequent expenses
If the subsequent expenses related to a fixed asset meet the recognition conditions of these Standards, they are recognized as the cost of
fixed asset; otherwise, they are recognized as the profit and loss of the current period.
(3) Disposal
If the fixed assets that have been disposed or will not be expected to generate economic benefit through its use or disposal, the fixes
assets are derecognized. When the company sells, transfers or discards any fixed asset, or when any fixed asset of the company is
damaged or destroyed, the company deducts the book value and relevant taxes from the disposal income, and recognizes it as the profit
and loss of the current period.
(15) Construction in process
1. Category
The construction in process constructed by the company is measured based on the actual cost. Actual cost is composed by all necessary
expenses incurred before the constructions are ready for its intended use, including cost of construction, material cost, labor cost,
relevant taxes, capitalized borrowing costs and indirect costs that should be distributed. The company’s construction in process is
measured based on project classification.
2. Standard and time of conversion of construction in process into fixed asset
The construction in process project is recognized as fixed asset subject to all expenses incurred before the constructions are ready for its
intended use. Where a fixed asset built by the company has reached the expected use condition but the final accounts of the as-built
project have not been settled, from the day when the fixed asset reaches the expected use condition, values estimated according to the
construction budget and cost or the actual construction cost is assigned to the fixed asset, and the fixed asset is depreciated under the
fixed asset depreciation provisions of these Rules. The adjustment of original temporary estimation value is made after the final
accounts of the as-built project are settled according to the actual costs. The amount of depreciation already made may not be adjusted.
(16) Borrowing costs
1. Recognition principle of capitalization of borrowing costs
The company’s borrowing costs incurred are directly attributable to the construction production of assets eligible for capitalization. The
capitalization of borrowing costs is initiated when the conditions are met and it is recognized as the relevant asset costs; other borrowing
costs are recognized as the profit and loss of the current period upon occurrence based on the costs incurred.
Capitalization-based eligible asset refers to the fixed assets, investment in real estate, inventory and other assets that could only reach
the estimated state of use or sales after a long period of time construction or production activity.
Capitalization is made when the following conditions are met:
(1) The asset disbursements have already incurred, which shall include the cash, transferred non-cash assets or interest bearing
debts paid for the acquisition and construction or production activities for preparing assets eligible for capitalization;
(2) The borrowing costs has already incurred; and
(3) The acquisition and construction or production activities which are necessary to prepare the asset for its intended use or sale
have already started.
2. Period of capitalization
The capitalization period refers to the period from the commencement to the cessation of capitalization of the borrowing costs,
excluding the period of suspension of capitalization of the borrowing costs.
When the qualified asset under acquisition and construction or production is ready for the intended use or sale, the capitalization of the
borrowing costs is ceased.
When the qualified asset under construction or production is completed respectively and can be used independently, the capitalization of
such borrowing costs is ceased.
When each part of the asset under and construction or production is completed respectively, but could only be ready for the intended use
or sale after the complete of the overall construction, the capitalization of the borrowing costs is ceased upon the completion of the
overall construction.
3. Period of capitalization cease
Where the acquisition and construction or production of a qualified asset is interrupted abnormally and the interruption period lasts for
more than three months, the capitalization of the borrowing costs is suspended; if the interruption is a necessary step for making the
qualified asset under acquisition and construction or production ready for the intended use or sale, the capitalization of the borrowing
costs is continued. The borrowing costs incurred during such period are recognized as expenses, and recorded into the profit and loss of
the current period, till the acquisition and construction or production of the asset restarts.
4. Calculation method for capitalization amount
For the interest (less revenue from interest of unused borrowing costs deposited in the bank or investment income from temporary
investment) ancillary expense incurred to a specifically borrowed loan, construction or production is ready for the intended use or sale
are capitalized at the incurred amount upon occurrence.
Where a general borrowing is used for the acquisition and construction or production of assets eligible for capitalization, the company
calculates and determines the to-be-capitalized amount of interests on the general borrowing by multiplying the weighted average asset
disbursement of the part of the accumulative asset disbursements (based on the average amount at the end of each month) minus the
general borrowing by the capitalization rate of the general borrowing used.
Where there is any discount or premium, the amount of discounts or premiums that shall be amortized during each accounting period are
determined by the real interest rate method, and an adjustment is made to the amount of interests in each period.
(17) Biological assets
Biological assets are classified into consumptive biological assets and productive biological assets. The term “consumptive biological
asset” includes edible biological asset and animal feeding.
No biological asset may be recognized unless it satisfies the following conditions simultaneously:
(1) The enterprise possesses or controls this biological asset due to past transaction or event;
(2)The economic benefits or service potential related to this biological asset is likely to flow into the company; and
(3) The cost of this biological asset can be measured reliably.
(18) Intangible assets and development expenditure
Intangible assets refer to identifiable non-monetary assets without physical form holding or controlled by the company, including the
purchased software, and land use right, etc.
1. Initial measurement
The cost of outsourcing intangible assets includes the purchase price, relevant taxes and other necessary expenditures directly
attributable to intangible assets for the expected purpose. Where the payment of purchase price for intangible assets is delayed beyond
the normal credit conditions, which is of financing intention, the cost of intangible assets is recognized on the basis of the current value
of the purchase price.
2. Subsequent measurement
The company analyzes and judges the service life of intangible assets, when it obtains intangible assets. The intangible assets with
limited service life are amortized by using straight line method during the period of bringing economic benefits to the company. The
year of land use right is subject to the content stated on the Land Certificate.
The company checks the service life and the amortization method of intangible assets with limited service life at the end of each year.
Where the service life and the amortization method of intangible assets are different from those before, the years and method of the
amortization is changed.
After checking, the service life and the amortization method of intangible assets at the end of the period has no difference.
(19) Long-term asset impairment
The company, on the day of balance sheet, makes a judgment on whether there is any sign of possible assets impairment. Where any
evidence shows that there is possible assets impairment, the recoverable amount of the assets is estimated on the basis of a single asset;
if such estimation is difficult, the recoverable amount of the assets is estimated on the basis of the asset group.
The recoverable amount is determined in light of the higher one of the net amount of the fair value of the assets minus the disposal
expenses and the current value of the expected future cash flow of the assets.
Where the measurement result of the recoverable amount indicates that an asset's recoverable amount is lower than its book value, the
book value of the asset is written down to the recoverable amount, and the reduced amount is recognized as the loss of asset impairment
and be recorded as the profit or loss of the current period. Simultaneously, a provision for the asset impairment is made accordingly.
Once any loss of asset impairment is recognized, it shall not be reversed in the future accounting periods.
After the loss of asset impairment has been recognized, the depreciation or amortization expenses of the impaired asset is adjusted
accordingly in the future periods so as to amortize the post-adjustment book value of the asset systematically (deducting the expected
net salvage value) within the residual service life of the asset.
The intangible assets with uncertained goodwill and service life formed from enterprise consolidation are tested of the impairment
annually regardless of any sign of impairment.
Goodwill combination and other related asset combination or asset group combination are tested of the impairment. When making an
impairment test on the relevant asset groups or combination of asset groups containing goodwill, if any evidence shows that the
impairment of asset groups or combinations of asset groups is possible, the company first makes an impairment test on the asset groups
or combinations of asset groups not containing goodwill, calculates the recoverable amount, compares it with the relevant book value
and recognize the corresponding impairment loss. The company then further makes an impairment test of the asset groups or
combinations of asset groups containing goodwill, and compares the book value of these asset groups or combinations of asset groups
(including the book value of the goodwill apportioned thereto) with the recoverable amount. Where the recoverable amount of the
relevant assets or combinations of the asset groups is less than the book value thereof, it recognizes the impairment loss of the goodwill.
(20) Long-term deferred costs
Long-term deferred costs refer to all costs incurred which will be borne in the current period and the future periods with over one year of
attribution period. It is amortized by using natural method.
(21) Employee benefits
The term "employee benefits" refers to all kinds of remunerations and other relevant disbursements given by the company in exchange
of the employees' services. It consists with short-term remuneration, welfare issued after dismiss, dismiss welfare, and other long-term
employee welfare.
1. Short-term remuneration
Short-term remuneration refers to employee benefits which shall be paid in full within twelve months after the end of the annual
reporting period of the related services provided by the employees, except for welfare issued after dismiss and dismiss welfare. During
the accounting period the service is provided, the company recognizes the short-term remuneration payable as liability and stated it into
the relevant asset costs and fees according to the beneficiary of such service.
2. Welfare issued after dismiss
Welfare issued after dismiss refers to all kinds of remuneration and welfare provided by the company after employee’s retirement or the
termination of the labor relations in order to acquire employee’s service, except for short-term remuneration and dismiss welfare. It is
classified as defined contribution plan and defined benefit plan.
The defined contribution plan mainly refers to basic social endowment insurance and unemployment insurance implemented by local
labor and social security offices. During the accounting period the service is provided by the employees, the amounts payable calculated
based on defined contribution plan is recognized as liability and stated into the profit and loss of the current period or the relevant asset
costs.
The company will have no other payment obligation after the regular payment of the above mentioned items in according with the
national standards.
3. Dismiss welfare
Dismiss welfare refers to the compensation paid by the company to the employee who terminates the labor relations with the company
before the expiration of the labor contract or in order to encourage the employee to accept downsizing. It is recognized as the profit and
loss of the current period upon occurrence.
4. Other long-term employee welfare
Other long-term employee welfare refers to all other employee benefits beyond short-term remuneration, welfare issued after dismiss
and dismiss welfare.
The accounts payable of other long-term employee welfare meeting the conditions of defined contribution plan is recognized as liability
during the accounting period the service is provided by the employees and stated as the profit and loss of the current period or the
relevant asset costs.
(22) Estimated liabilities
1. Recognition standard
The obligation pertinent to contingencies is recognized as an estimated debt when the following conditions are satisfied simultaneously:
That obligation is a current obligation of the enterprise;
It is likely to cause any economic benefit to flow out of the enterprise as a result of performance of the obligation; and
The amount of the obligation can be measured in a reliable way.
2. Measurement method
The estimated debts are initially measured in accordance with the best estimate of the necessary expenses for the performance of the
current obligation.
To determine the best estimate, the company takes into full consideration of the risks, uncertainty, time value of money, and other factors
pertinent to the contingencies. If the time value of money is of great significance, the best estimate is recognized after discounting the
relevant future outflow of cash.
The best estimate is conducted in accordance with the following situations, respectively:
If there is a sequencing range (or sequencing range) for the necessary expenses and if all the outcomes within this range are equally
likely to occur, the best estimate shall be determined in accordance with the middle estimate within the range.
If there is not a sequencing range (or sequencing range) for the necessary expenses, or although there is a sequencing range and all the
outcomes within this range are not likely to occur, when the contingencies concern a single item, it is recognized in the light of the most
likely outcome; when the contingencies concern two or more items, the best estimate is calculated and determined in accordance with all
possible outcomes and the relevant probabilities.
When all or some of the expenses necessary for the liquidation of an estimated debts of an enterprise is expected to be compensated by a
third party, the compensation is separately recognized as an asset only when it is virtually certain that the reimbursement will be
obtained.
(23) Revenue
1. Specific standards of judgement for recognition time of revenue from selling goods
The realization of revenues from selling goods is recognized, if the company has transferred to the buyer the significant risks and
rewards of ownership of the goods; the company retains neither continuing managerial involvement which usually relates to the
ownership nor exerts effective control over the goods sold; the relevant amount of revenue can be measured reliably; the economic
benefits related to the transaction will flow into the company; and the relevant costs incurred or to be incurred can be measured reliably.
Revenue from real estate sales: where the real estate is completed and passes the acceptance, and the sales contract is signed, the
revenue from sales is achieved when purchase certificate of the buyer is acquired and the project is delivered for use. The buyer has no
reason to refuse to accept the house upon the receipt of the house deliver notice. The revenue is recognized as realization after the
completion of the deliver use period as described in the written notice.
2. Recognition basis for revenue from alienation of assets use right
When the relevant economic benefits are likely to flow into the company and the amount of revenues can be measured in a reliable way,
the revenue from alienation of assets use right may be recognized, if:
(1) Interest revenue: it is measured and confirmed in accordance with the length of time for which the company's cash is used by
others and the actual interest rate;
(2) Revenue from property lease: it is measured by using straight line method within the effective release period according to the
contract or agreement signed between the company with the lessee.
3. Recognition basis and method of revenue from labor
If the property management is provided in property management service, on the balance sheet date, and the results of labor deal can be
reliably estimated, the total revenue from labor is recognized according to the received or receivable price as prescribed in contract or
agreement.
The reliable estimation of the results of labor deal means satisfying the following conditions:
(1) The relevant amount of revenue can be measured in a reliable way;
(2) The relevant economic benefits may flow into the enterprise;
(3) The schedule of completion under the transaction can be confirmed in a reliable way; and
(4) The costs incurred or to be incurred in the transaction can be measured in a reliable way.
If the company cannot, on the date of the balance sheet, measure the result of a transaction concerning the providing of labor services in
a reliable way, it is conducted in accordance with the following circumstances, respectively:
(1) If the cost of labor services incurred is expected to be compensated, the revenue from the providing of labor services is
recognized in accordance with the amount of the cost of labor services incurred, and the cost of labor services shall be carried forward at
the same amount; or
(2) If the cost of labor services incurred is not expected to compensate, the cost incurred are included in the current profits and
losses, and no revenue from the providing of labor services may be recognized.
(24) Deferred income tax assets and deferred income tax liability
The deferred income tax assets and deferred income tax liability are recognized based on the difference (temporary difference) of book
value according to the tax bases of assets and liabilities. On the balance sheet date, the applicable tax rate of deferred income tax assets
and deferred income tax liability are measured during the liability period of estimated recovery of such assets or liabilities.
1. Recognition basis of deferred income tax assets
The company recognizes the deferred income tax liabilities 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, are not recognized: (1) this transaction is not business combination; (2) at the time of
transaction, the accounting profits will not be affected, nor will the taxable amount be affected.
Where the deductible temporary difference related to the investments in joint enterprises can meet the following requirements
simultaneously, the company recognizes the corresponding deferred income tax assets: the temporary differences are likely to be
reversed in the expected future; and it is likely to acquire any amount of taxable income tax that may be used for making up the
deductible temporary differences.
2. Recognition basis of deferred income tax liability
The company recognizes the taxable temporary difference in the current period and previous period that is payable but not been paid as
the deferred income tax liability, including but not limited to:
(1) It is formed from the initial recognition of business reputation;
(2) The transaction is not business combination, and at the time of transaction, the accounting profits will not be affected, nor will
the taxable amount (or the deductible loss) be affected;
(3) The taxable temporary differences related to the investments of subsidiary companies and joint enterprises are recognized as
corresponding deferred income tax liabilities. However, those that can simultaneously meet the following conditions shall be excluded:
the investing enterprise can control the time of the reverse of temporary differences; and the temporary differences are unlikely to be
reversed in the excepted future.
3. The net amount of deferred income tax assets and deferred income tax liabilities are listed after offset when the following
conditions are met:
(1) The company has the legal rights of income tax assets and income tax liabilities of the period settled by net amount;
(2) The deferred income tax assets and deferred income tax liabilities are levied by the same taxation department against the same
tax subject or different tax subjects. However, during the reverse period of each important deferred income tax asset and deferred
income tax liability in future, the deferred income tax assets and deferred income tax liabilities of the period of all involved tax subject
intentions are settled by net amount, or the assets acquisition and liability liquidation are made simultaneously.
(25) Lease
The "finance lease" refers to a lease that has transferred in substance all the risks and rewards related to the ownership of an asset. The
ownership of it may or may not eventually be transferred. All others are classified as operating lease.
Accounting process of operating lease:
(1) The rental paid by the company for the assets rented in is recognized as costs of the current period by using straight line method
without deduction of the entire rent free period. The initial direct costs paid by the company relating to lease deal are recognized as costs
of the current period.
When the lessor bears the costs relating to a lease that should be borne by the company, the company deducts such amount from the total
rental. The amount after such deduction is shared within the lease period and recognized as costs of the current period.
(2) The rental paid by the company for the assets rented out is recognized as revenue by using straight line method without
deduction of the entire rent free period. The initial direct costs paid by the company relating to lease deal are recognized as costs of the
current period; if such amount is large, it is capitalized. During the entire lease period, it is recorded in the profit and loss of the current
period on the same basis of the revenue from lease.
When the company bears the costs relating to a lease that should be borne by the lessor, the amount after such deduction is shared within
the lease period and distributed within the lease period.
(26) Changes in significant accounting policies and accounting estimates
1. Changes in accounting policies
There is no any change in the applicable accounting policies in this reporting period.
2. Changes in accounting estimates
There is no any change in accounting estimates in this reporting period.
V. Tax
(I) Main tax types and tax rate
Category Taxable base Rate
Value-added tax Sales of goods or rendering of taxable services 17%
Business tax Revenue of house property sale and lease, property management income and etc. 5%
Business tax Revenue of culture and sports 3%
Business tax Revenue of entertainment 20%
City construction and maintenance
Business tax and value-added tax 5%, 7%
tax
Education fee Business tax and value-added tax 3%
Income tax Taxable income 10%, 25%
Statement on tax rate of different income tax payer:
Except for the company subsidiary Mudanjiang City Jingbo Lake Pearl River Wanjia Hotel Co., Ltd, the tax rate of enterprise income
tax of the company and its other subsidiaries in the first half year is 25%.
The subsidiary Mudanjiang City Jingbo Lake Pearl River Wanjia Hotel Co., Ltd is a small-scale and low-profit enterprise. Its income
tax is recorded based on 50%, less 20% income tax rate for tax payment.
VI. Notes to the main items in the consolidated financial statements
(Unless otherwise indicated, all figures are stated in RMB)
1. Currency Funds
Items 30 June 2015 1 January 2015
Cash 688,023.10 1,255,008.79
Bank deposit 135,302,351.70 96,091,882.06
Other monetary funds 26,611.49 57,301.77
Total 136,016,986.29 97,404,192.62
The funds whose remittance is restricted are as follows:
Items 30 June 2015 1 January 2015
Fixed deposit or call deposit used for guarantee 20,000,000.00 20,000,000.00
Items 30 June 2015 1 January 2015
Total 20,000,000.00 20,000,000.00
As of June 30, 2015, RMB 20 million Yuan bank fixed deposit receipt of the company is mortgaged to acquire RMB 19
million Yuan short-term borrowing from China Industrial International Trust Ltd. The duration is from December
3, 2014 to December 3, 2015.
2. Accounts receivable
(1) Disclosure of accounts receivable by categories:
30 June 2015 1 January 2015
Bad Debt Bad Debt
Categories Amounts Amounts
Provision Provision
Ratio Ratio Ratio Ratio
Amounts Amounts Amounts Amounts
(%) (%) (%) (%)
1.Significant accounts receivable and bad debts
7,761,707.60 31.00 7,761,707.60 100.00 7,761,707.60 33.54 7,761,707.60 100.00
accounted individually
2.Bad debt accounted by the combinations 15,197,409.36 60.69 1,166,087.85 7.67 13,384,482.99 57.83 1,012,770.55 7.57
3.Other unimportant receivables but bad debts
2,082,251.02 8.31 1,944,729.55 93.40 1,997,260.02 8.63 1,990,680.02 99.67
accounted individually
Total 25,041,367.98 100.00 10,872,525.00 ---- 23,143,450.61 100.00 10,765,158.17 ----
(2) Accounts receivable for which bad debt provision has been assessed by portfolios：
Accounts receivable portfolios for which bad debt provision has been assessed using the aging analysis approach:
30 June 2015 1 January 2015
Ages
Balance Proportion (%) Bad debts Balance Proportion (%) Bad debts
Within 1 year 9,323,098.36 61.35 186,461.97 7,894,072.87 58.98 157,881.46
1-2 years 1,638,687.31 10.78 81,934.37 2,455,484.98 18.35 122,774.26
2-3 years 2,342,327.12 15.41 234,232.71 1,381,714.43 10.32 138,171.44
3-4years 846,083.85 5.57 169,216.77 705,715.14 5.27 141,143.03
4-5years 146,821.65 0.97 44,046.50 104,737.15 0.78 31,421.15
Over 5 years 900,391.07 5.92 450,195.53 842,758.42 6.30 421,379.21
Total 15,197,409.36 100.00 1,166,087.85 13,384,482.99 100.00 1,012,770.55
(3) Accounts receivable for which bad debt provision has been assessed individually
Accounts receivable that are individually significant and for which bad debt provision has been assessed individually
Bad Debt
Name Ending Balance Provision Proportion (%) Reason
Hainan centaline property agency 2,406,158.00 2,406,158.00 100 Irrecoverable
Hainan Baoping company 2,218,494.43 2,218,494.43 100 Irrecoverable
Hainan dragon film studio 2,090,069.77 2,090,069.77 100 Irrecoverable
Hainan racing entertainment Co.,
1,046,985.40 1,046,985.40 100 Irrecoverable
LTD
Total 7,761,707.60 7,761,707.60
Accounts receivable that are individually insignificant and for which bad debt provision has been assessed individually
Bad Debt
Name Ending Balance Provision
Proportion (%) Reason
Haikou Peijie clothing company 497,520.00 497,520.00 100.00 Irrecoverable
Hainan International silver city Real
451,712.00 451,712.00 100.00 Irrecoverable
estate company
Haikou Jingye trading development
250,000.00 250,000.00 100.00 Irrecoverable
company
Hainan Jinhe Real estate company 119,446.00 119,446.00 100.00 Irrecoverable
Bad Debt
Name Ending Balance Provision
Proportion (%) Reason
Hainan Qiongshan Tianxin Pawn
112,116.50 112,116.50 100.00 Irrecoverable
Investment company
Amount less than one hundred thousand
651,456.52 513,935.05 78.89 Irrecoverable
yuan
Total 2,082,251.02 1,944,729.55
(4) Bad debt provision, recovery or reverse
The provision amount of bad debt is RMB 107,366.83 Yuan.
(5) Outstanding amount due from shareholders holding 5% (including) or more in the account receivable as at the end of the year
（6）As at 30June 2015, the top 5 accounts receivable by customer are summariesd as below:
Proportion of total
Bad Debt
Name Owned amount accounts receivable
Provision
(%)
Hainan racing entertainment Co., LTD 2,406,158.00 9.61 2,406,158.00
Xinhe(Zhengzhou) home buying Co., LTD 2,247,282.00 8.97 44,945.64
Hainan Baoping company 2,218,494.43 8.86 2,218,494.43
Hainan Zhongyuan tenement agency company 2,090,069.77 8.35 2,090,069.77
Hunan railway lianchuang technology development
2,052,660.68 8.20 41,053.21
company
Total 11,014,664.88 43.99 6,800,721.05
3. Advances to suppliers
(1) Aging analysis
30 June 2015 1 January 2015
Ages
Balance Proportion (%) Balance Proportion (%)
Within 1 year 69,231,626.51 50.89 64,433,201.92 50.10
1-2 years 7,763,757.45 5.71 6,456,359.45 5.02
2-3 years 1,482,058.33 1.09 5,907,269.00 4.59
Over 3 years 57,555,853.09 42.31 51,828,529.41 40.29
Total 136,033,295.38 100 128,625,359.78 100.00
(2) Top five units of prepayments
Proportion of total
Company’s Name Amounts Ages Unsettled reason
prepayments
Haikou Hongzhou Real Estate Development Pre-paid property purchase
50,000,000.00 36.76 4-5 years
Unrelated Client payment
Hubei Tianxiang Geotechnical engineering Co., Within 1 The project is not complete
32,635,068.94 23.99
LTD year yet.
Within 1
Wuhan HuaTao real estate brokerage co., LTD 13,000,000.00 9.56 Sales no settlement fee
year
Mudanjiang in heilongjiang province forestry Within 1 The project is not complete
9,882,912.33 7.27
engineering company year yet.
Within 1 Pre-paid compensation for
8,338,082.92 6.13
Jiangsu nantong ErJian group co., LTD year demolition
Total 113,856,064.19 ——
Note: In accordance with the agreements of Supplementary Agreement on Implementation of Phase III of Longzhu Project signed
between the company with Haikou Hongzhou Industry Development Co., Ltd (hereinafter referred to as Hongzhou Industry), the
company advances the payment of RMB 50 million Yuan as the advance payment for the 15000 m2 office building after the qualified
acceptance of Longzhu Phase III Project and filing. On August 22, 2013, the company signed Supplementary Agreement on Original Six
Agreements of Implementation of Haikou Hongzhou Center Project with Hongzhou Industry, Haikou Hongzhou Binhai Construction
Co., Ltd (hereinafter referred to as Binhai Construction), and Haikou Hongzhou Industry Group Co., Ltd (hereinafter referred to as
Hongzhou Group) to allow Binhai Construction inherit the powers, obligations and legal liabilities of Haikou Hongzhou Center Project
that was shared and borne by Hongzhou Industry. The original Gurantee Agreement signed between the company with Hongzhou Group
will be valid further. Hongzhou Group sumbits the company with the Certificate of Land and House Ownership for the underground
land of Hongzhou Eadry Resort Hotel Time Mansion located at Yuya Road, Hedong District, Sanya City for management.
（3）No outstanding amount due from shareholders holding 5% (including) or more in the advanced payment as at the end of the period
4、Dividend receivable
Items 1 January 2015 Increases Decreases 30 June 2015
Within 1 year
Over 1 year 260,015.00 260,015.00
Hainan Pearl River Guanzhuang
260,015.00 260,015.00
Co., Ltd.
合 计 260,015.00 260,015.00
5、Other receivables
(1) Disclosure of other receivables by categories:
30 June 2015 1 January 2015
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 7.82 25,978,479.90 100.00 25,978,479.90 8.44 25,978,479.90 100.00
accounted
individually
2. Bad debt
accounted by the 295,217,386.00 88.89 40,044,554.83 13.56 273,693,362.45 88.93 39,026,674.80 14.26
combinations
3. Other
unimportant
receivables but
10,935,878.69 3.29 4,115,349.01 37.63 8,106,146.85 2.63 4,420,829.95 54.54
bad debts
accounted
individually
Total 332,131,744.59 100.00 70,138,383.74 307,777,989.20 100.00 69,425,984.65
(2) Other receivables for which bad debt provision has been assessed by portfolios：
Other receivables portfolios for which bad debt provision has been assessed using the aging analysis approach:
30 June 2015 1 January 2015
Ages
Balance Proportion (%) Bad debts Balance Proportion (%) Bad debts
Within 1 year 36,902,935.74 2.00 738,058.71 16,615,861.48 2.00 332,317.22
1-2 years 37,445,821.33 5.00 1,872,291.07 40,137,294.33 5.00 2,006,864.72
2-3 years 80,862,739.18 10.00 8,086,273.92 80,522,251.84 10.00 8,052,225.18
3-4years 128,734,739.57 20.00 25,746,947.91 125,133,739.57 20.00 25,026,747.92
4-5 years 10,172,959.34 30.00 3,051,887.80 10,167,939.34 30.00 3,050,381.80
Over 5 years 1,098,190.84 50.00 549,095.42 1,116,275.89 50.00 558,137.96
Total 295,217,386.00 40,044,554.83 273,693,362.45 39,026,674.80
(3) Other receivables for which bad debt provision has been assessed individually
Other receivables that are individually significant and for which bad debt provision has been assessed individually
Bad Debt Proportion
Name Closing Balance Reason
Provision (%)
Shenzhen Yinxiang computer Co., LTD 6,482,625.00 6,482,625.00 100 Irrecoverable
Dingjia International Co., LTD 2,725,702.71 2,725,702.71 100 Irrecoverable
Hainan Enxin Industry Co., LTD 2,314,592.00 2,314,592.00 100 Irrecoverable
Hainan Zhongda Industrial Corporation 2,210,779.10 2,210,779.10 100 Irrecoverable
Dabao cement plant 1,901,383.56 1,901,383.56 100 Irrecoverable
Golden light industrial Corporation 1,752,100.00 1,752,100.00 100 Irrecoverable
Shenzhen city Zhuce Real estate company 1,550,278.23 1,550,278.23 100 Irrecoverable
Shenzhen State Development&
1,409,934.28 1,409,934.28 100 Irrecoverable
Investment Corporation
Haikou city industrial development
1,392,430.00 1,392,430.00 100 Irrecoverable
trading company
Xinhua dawn Airline decoration company 1,208,804.70 1,208,804.70 100 Irrecoverable
Hainan deepsea Real Estate Co., LTD 1,029,850.32 1,029,850.32 100 Irrecoverable
Sanya city land and property management
1,000,000.00 1,000,000.00 100 Irrecoverable
Authority
HainanYangtz River travel industry 1,000,000.00 1,000,000.00 100 Irrecoverable
Total 25,978,479.90 25,978,479.90
Other receivables that are individually insignificant and for which bad debt provision has been assessed individually
Bad Debt Proportion
Name Closing Balance Reason
Provision (%)
Staff reserve fund 4,553,932.92 91,078.66 2 Irrecoverable
Hainan Development Bank 440,000.00 440,000.00 100 Irrecoverable
Hainan Sanli Industrial and Trading
283,478.62 283,478.62 100 Irrecoverable
Company
Others 5,658,467.15 3,300,791.73 58.33 Irrecoverable
Total 10,935,878.69 4,115,349.01
(4) Bad debt provision in this year is RMB712,399.09.
(5) No outstanding amount due from shareholders holding 5% (including) or more in the other receivable as at the end of the period
(6) Top five units of others receivable
Proportion of total
Relationship with
Name Owned amount Ages Other receivable
the company
(%)
Public Investment Co., Ltd Unrelated Party 100,400,000.00 2-4years 30.23
Beijing Kangtai Xingye Investment Co.,Ltd Unrelated Party 102,500,000.00 2-4years 30.86
Singapore Great land holdings Co.,Ltd Unrelated Party 30,000,000.00 1-2years 9.03
Lionview Global Iinvestmens ltd. Unrelated Party 15,907,437.88 1-4years 4.79
Shenzhen Yinxiang Computer Co., Ltd Unrelated Party 6,482,625.00 Over 5 years 1.95
Total 255,290,062.88
Note: In 2011, the company signed Agreement on Cooperative Construction Project of Special Line of Daqin Railway Mulin
County Line and Coal Wholesale Market and project supplementary agreement with Zhonghe Investment Co., Ltd (hereinafter referred
to as Zhonghe Investment) to reach the agreements on jointly investment in development of the special railway line and coal wholesale
market. Both parties contribute investment by installments subject to the construction schedule. The company's total investment amount
is not more than RMB 140 million Yuan. During the transition period, the company’s Beijing investment consulting sub-branch is
responsible for supervision Zhonghe Investment in using the certificate and seal. In 2012, a supplementary agreement was signed by
both parties to additionally contribute RMB 37 million Yuan to the project. Since the project initiation and production line construction
work have not been developed actually, RMB 40 million Yuan and RMB 36.6 million Yuan were recovered in 2013 and 2014,
respectively. In 2014, Zhonghe Investment mortgaged the project land and real estate to the company.
The current account between the company with Beijing Kangtai Industry Investment Co., Ltd (hereinafter referred to as Kangtai
Industry) is cooperative project amount. In 2011, the company signed Cooperation Agreement with Kangtai Industry and Gu Li, the
natural person to agree the contribution of RMB 70 million yuan by Kangtai Industry and Gu Li and not than RMB 64 million Yuan by
the company in order to establish a project company in charge of the development and sales of the iron ore resources from two plant,
namely Dujiawan magnetite, located at Cangfang Village, Xiangkou Township, Yunxi Town, Shiyan City, Hebei Province, and
westsourthen Zhaojiayuan iron ore. The pledge mortgage provided by Kangtai Industry includes 70% equity in Yunxi Shengying
Mining Industry Co., Ltd, 10% equity in Zhongjia Sunshine Energy Technology (Group) Co., Ltd as well as 70% equity holding by Gu
Li in Yunxi Jinyuan Mining Industry Co., Ltd, to the company. In 2012, the three parties signed supplementary agreement based on the
actual investment process to agree an additional investment of RMB 36 million Yuan which will be used for the reconstruction of the
production line of the two mining areas and newly construction of more production lines.
The company signed agreements with Singapore Great Land Holdings Ltd (hereinafter referred to as Singapore Great Land) in May and
August 2013, respectively to develop No. 20 block located at No. 20, Hairun Road, Lizigou Industry Park Area, Sanya City with the
cooperation of the subsidiary of Singapore Great Land, namely Sanyan Pearl River Pipe Pile Co., Ltd. RMB 30 million Yuan paid by
the company is assigned to Singapore Great Land for 51% equity in the project company. At present, the certificate of land use right is
under processing.
6、Inventories
(1) Inventories category
30 June 2015 1 January 2015
Items Provision for Provision for
Closing Balance Book value Closing Balance Book value
Inventory Inventory
Raw materials 2,233,797.20 3,598,674.74 3,598,674.74
2,233,797.20
Low-value
consumption 561,055.58 579,452.60 579,452.60
561,055.58
goods:
Finished goods 535,158.48 594,248.15 594,248.15
535,158.48
Constructing
development 397,200,650.93 397,200,650.93 338,221,729.16 338,221,729.16
product
Development
60,763,618.48 21,726,889.27 39,036,729.21 65,330,786.48 21,726,889.27 43,603,897.21
products
Consumptive
37,992.19 37,992.19 37,992.19
biological assets 37,992.19
Total 461,332,272.86 21,726,889.27 439,605,383.59 408,362,883.32 21,726,889.27 386,635,994.05
At the end of the period, the book value of inventory used for mortgage is RMB 409,567,152.03 Yuan. See Notes 45.
(2) Inventories impairment provision
Decrement
Items 1 January 2015 Increment 30 June 2015
Transfer back Write off
Development product 21,726,889.27 21,726,889.27
Total 21,726,889.27 21,726,889.27
7、Other current assets
Items 30 June 2015 1 January 2015
Hwabao Trust Co., Ltd. 3,000,000.00
Total 3,000,000.00
The subsidiary Hainan Pearl River Industry Co., ltd Shanghai Real Estate Company signed Contract of Cash Profit Increase Trust Plan
with Hwabao Trust Co., Ltd to subscribe RMB 3 million Yuan shares.
8、Available-for-sale financial assets
（1）Categories of available-for-sale financial assets
Items 30 June 2015 1 January 2015
Available for sales equity instrument:
Measured at fair value model 172,747,500.00
Measured at cost model 11,411,309.90 11,411,309.90
Total 11,411,309.90 184,158,809.90
Note: The Company holds 7,750,000 shares of stock of Southwest Securities.
9、Long-term Equity Investment
Item Accounting Method Beginning Balance Increase or decrease Closing Balance
Investments in joint
venture
Sanya Wanjia
Enterprises Holding
Equity Method 34,464,905.62 -125,414.24 34,339,491.38
Co., Ltd.
Beijing Found Vision
Equity Method 1,496,849.01 -79,974.06 1,416,874.95
Media Co., Ltd.
Total 35,961,754.63 -205,388.30 35,756,366.33
The long-term equity investment has no restrains on the ability to transfer funds to the investment enterprise.
10、Investment property
Items 1 January 2015 Increment Decrement 30 June 2015
I. Original value 32,711,928.57 322,062.78 32,389,865.79
Buildings and structures 32,711,928.57 322,062.78 32,389,865.79
II. Accumulated depreciation and amortization 7,402,113.93 561,964.03 102,056.69 7,862,021.27
Buildings and structures 7,402,113.93 561,964.03 102,056.69 7,862,021.27
III. Impairment provision 3,081,199.41 3,081,199.41
Buildings and structures 3,081,199.41 3,081,199.41
IV. Book value 22,228,615.23 —— —— 21,446,645.11
Buildings and structures 22,228,615.23 —— —— 21,446,645.11
Note: At the end of the period, the book value of assets used for mortgage is RMB 16,580,622.64 Yuan. See Notes 45.
11、Fixed assets
Items 1 January 2015 Increment Decrement 30 June 2015
I. Original value 644,521,294.49 5,559,538.84 197,185.68 649,883,647.65
Items 1 January 2015 Increment Decrement 30 June 2015
Buildings and structures 479,604,129.64 4,567,168.00 484,171,297.64
Vehicles 68,714,821.84 362,163.00 38,534.00 69,038,450.84
General equipments 41,296,266.29 362,704.84 158,651.68 41,500,319.45
Other equipments 54,906,076.72 267,503.00 55,173,579.72
II. Accumulated depreciation 200,129,043.76 16,664,919.15 189,253.10 216,604,709.81
Buildings and structures 90,538,619.96 9,036,577.95 99,575,197.91
Vehicles 38,320,333.35 2,461,611.82 38,534.00 40,743,411.17
General equipments 26,486,343.65 2,128,002.34 150,719.10 28,463,626.89
Other equipments 44,783,746.80 3,038,727.04 47,822,473.84
III. Impairment provision 7,499,295.92 —— —— 7,499,295.92
Buildings and structures 7,499,295.92 —— —— 7,499,295.92
Vehicles —— ——
General equipments —— ——
Other equipments —— ——
IV. Book value 436,892,954.81 —— —— 425,779,641.92
Buildings and structures 381,566,213.76 —— —— 377,096,803.81
Vehicles 30,394,488.49 —— —— 28,295,039.67
General equipments 14,809,922.64 —— —— 13,036,692.56
Other equipments 10,122,329.92 —— —— 7,351,105.88
Note: The book value of fixed assets used for mortgage at the end of the period is RMB 277,307,830.99 Yuan. See Notes 45.
The original value of fixed assets that have been fully depreciated but is still being used at the end of the period is RMB 72,877,834.86
Yuan.
12、Construction in progress
30 June 2015 1 January 2015
Project name Impairment loss Impairment loss
Closing Balance Book value Closing Balance Book value
provision provision
Little Train 550 5,648,964.09 1,800,000.00 3,848,964.09 5,648,964.09 1,800,000.00 3,848,964.09
Little Train 400 4,180,000.00 1,200,000.00 2,980,000.00 4,180,000.00 1,200,000.00 2,980,000.00
Earlier stage of Snow
360,000.00 360,000.00
town Project 360,000.00 360,000.00
Comprehensive service
52,905,393.25 52,905,393.25 49,824,934.37 49,824,934.37
center of Snow Town
Total 63,094,357.34 3,000,000.00 60,094,357.34 60,013,898.46 3,000,000.00 57,013,898.46
The changes of major construction in progress
Beginning Transferred to fixed Other Closing
Project name Increment
balance assets decrement Balance
Comprehensive service center of Snow
49,824,934.37 3,080,458.88 52,905,393.25
Town
Total 49,824,934.37 3,080,458.88 52,905,393.25
13、Construction materials
Items 30 June 2015 1 January 2015
Special equipment 393,706.60 393,706.60
Total 393,706.60 393,706.60
14、Intangible assets
Items 1 January 2015 Increment Decrement 30 June 2015
I. Original value 40,195,865.93 21,300.00 40,217,165.93
Software 2,006,198.28 21,300.00 2,027,498.28
Land use right 36,008,635.65 36,008,635.65
trademark right 93,900.00 93,900.00
other 2,087,132.00 2,087,132.00
II.Accumulative amortization 8,623,665.26 605,337.98 9,229,003.24
Software 1,274,327.66 124,929.30 1,399,256.96
Land use right 6,937,976.32 458,507.22 7,396,483.54
trademark right 5,477.50 4,695.00 10,172.50
other 405,883.78 17,206.46 423,090.24
III. Total impairment loss provision 911,400.00 911,400.00
other 911,400.00 911,400.00
IV. Carrying amount 30,660,800.67 — — 30,076,762.69
Software 731,870.62 — — 628,241.32
Land use right 29,070,659.33 — — 28,612,152.11
trademark right 88,422.50 — — 83,727.50
other 769,848.22 — — 752,641.76
Note: The book value of land use right of the mortgage or pledge at the end of the period is RMB 26,909,936.53 Yuan. See Notes 45.
15、Long-term prepaid expenses
Other
Items 1 January 2015 Increment Amortization 30 June 2015
decrements
Decoration 7,712,318.88 31,950.00 1,454,714.94 6,289,553.94
Ski rental fee 2,100,000.00 450,000.00 1,650,000.00
Technical service fee 93,317.33 70,002.00 23,315.33
Financial consulting fee
Advertisement fee of Snow town 33,107.49 30,799.98 2,307.51
Rental fee of fishpond 873,537.23 139,413.00 734,124.23
Use fee of Ski Course 1,156,125.11 189,609.96 966,515.15
Facility of Yangcao mountain 560,000.00 60,000.00 500,000.00
Er’long Mountain Compensation
fee of Movie city Entertainment 360,000.00 60,000.00 300,000.00
Area
Total 12,888,406.04 31,950.00 2,454,539.88 10,465,816.16
16、Deferred tax asset and deferred tax liability
（1） Deferred tax assets or deferred tax liabilities that are presented at the net amount after offset and correspondingly deductible or
taxable temporary differences
Taxable temporary Deferred tax liabilities at Taxable temporary Deferred tax liabilities at
Items differences at the end of the the end of the reporting differences at the beginning the beginning of the
reporting period period of the reporting period reporting period
Changes in fair value
The difference between the
carrying amount of the net
assets and he fair value of 2,699,608.38 674,902.10 2,699,608.38 674,902.10
the identifiable net assets
which recognized in
Taxable temporary Deferred tax liabilities at Taxable temporary Deferred tax liabilities at
Items differences at the end of the the end of the reporting differences at the beginning the beginning of the
reporting period period of the reporting period reporting period
business combinations
Total 2,699,608.38 674,902.10 2,699,608.38 674,902.10
（2） Details of offsetting deferred tax assets and deferred tax liabilities
30 June 2015 1 January 2015
Items Offset amount of deferred Deferred tax assets or Deferred tax assets and Offset deferred tax assets
tax assets and liabilities liabilities liabilities at the beginning or liabilities
15,210,270.77
Deferred tax assets
Deferred tax liabilities 674,902.10 15,210,270.77 23,187,756.33
（3） Details of unrecognized deferred tax assets
Items 30 June 2015 1 January 2015
Deductible temporary differences 142,761,938.73 141,942,172.81
Deductible losses 346,331,500.27 380,511,206.66
Total 489,093,439.00 522,453,379.47
（4） Deductible losses for which no deferred tax assets are recognized will expire in the following
Years
Item 30 June 2015 1 January 2015
2015 10,046,033.98 44,225,740.37
2016 56,453,161.41 56,453,161.41
2017 98,393,343.38 98,393,343.38
2018 89,577,493.21 89,577,493.21
2019 91,861,468.29 91,861,468.29
Total 346,331,500.27 380,511,206.66
17、Other non-current assets
Item 30 June 2015 1 January 2015
Properties 1,581,840.00 1,581,840.00
Total 1,581,840.00 1,581,840.00
Note:on September 20, 2014, Mudanjiang Minzhen Real Estate Development Co., Ltd (hereinafter referred to as Minzhen Company),
Mudanjiang Jingbo Lake Scenic Environmental Property Management Co., Ltd (hereinafter referred to as Environmental Property
Management Company), and the subsidiary Mudanjiang Wan Jia Zhi Xing Hotel Co., Ltd signed debt repayment agreement. Due to the
debt relationship among the three parties, through negotiation, the three parties concluded an agreement: RMB 1,581,840.00 Yuan
(131.82 m2 x 12,000 Yuan) is used to offset RMB 1,019,340.00 Yuan lease compensation amount owned by Environmental Property
Management Company against the company’s subsidiary by virtue of D12 # brick villa of Shang Jing Chuan Shuo of Jingbo Lake
Community developed by Minzhen Company. RMB 562,500.00 Yuan difference is recognized as the profit and loss of the current period.
18、Provision of asset impairment
Current year Current year
increases decreases
Items 1 January 2015 30 June 2015
Current year
Others Reversal Write off Others
accrued
Bad debt provision 80,191,142.82 833,802.08 14,036.16 81,010,908.74
Current year Current year
increases decreases
Items 1 January 2015 30 June 2015
Current year
Others Reversal Write off Others
accrued
Provision for decline
in value of 21,726,889.27 21,726,889.27
inventories
Provision for
impairment losses of
25,532,245.39 25,532,245.39
available-for-sale
financial assets
Provision for
impairment losses of 3,081,199.41 3,081,199.41
investment properties
Provision for
impairment losses of 7,499,295.92 7,499,295.92
fixed assets
Provision for
impairment losses of
3,000,000.00 3,000,000.00
construction in
progress
Provision for
impairment losses of 911,400.00 911,400.00
intangible assets
Total 141,942,172.81 833,802.08 14,036.16 142,761,938.73
19、Short-term borrowings
（1） Short-term loan disclosed by categories
Category 30 June 2015 1 January 2015
Pledged loans 19,000,000.00 19,000,000.00
Total 19,000,000.00 19,000,000.00
（2） Pledge loans
loan enterprise Loan balance 抵押物
Xingye International Trust Mudanjiang Pearl River Wanjia Tourism Investment Development Group pledge the deposits
19,000,000.00
Co., Ltd certificate of RMB20 million as security for this loans.
Total 19,000,000.00
20、Accounts payable
（1） Details of accounts payable are as follows:
Item 30 June 2015 1 January 2015
Construction 12,491,318.55 45,579,235.43
Materials 105,344.00 1,496,150.14
Tourism 451,846.00 1,245,815.50
Investments 5,000,000.00 5,000,000.00
Deposits 676,134.45 574,545.37
Suppliers 1,796,795.79 602,405.96
Others 1,574,638.86 4,080,468.08
Total 22,096,077.65 58,578,620.48
（2） Significant accounts payable aging more than a year
Company name Closing Balance The reason of outstanding borrowings
Lin Deying、Chen Guanwen 5,000,000.00 Acquisitions of Snow Days hotel
Supervision company 3,572,235.33 The company not request
Total 8,572,235.33
21、Advances from customers
（1） Details of advances are as follows:
Item 30 June 2015 1 January 2015
The rents of garage 13,661,197.50 13,904,770.50
Tourism 31,100.00 2,447,854.00
Heating fees 2,699,451.17
Cooperative operation 50,000.00 2,579,910.00
Advances from customers 1,571,634.57 133,353.85
Property fees 8,066,008.51 3,959,916.97
Others 2,260,307.04 2,847,500.88
Total 25,640,247.62 28,572,757.37
（2） Significant advances aging more than a year
Item Closing Balance The reason of outstanding borrowings
Hubei Pearl River Real Estate Development Co., Ltd. receive
The rents of garage 13,661,197.50
carport rents in advance.
Total 13,661,197.50
22、Employee benefits payable
（1） Details of employee benefits payable are as follows
Items 1 January 2015 Increment Decrement 30 June 2015
Short term employee benefits payable 9,683,578.02 11,017,791.61
78,695,074.77 77,360,861.18
Defined contribution plans payable 6,421.69
5,435,125.69 5,440,805.38 742.00
Termination benefits payable
10,000.00 10,000.00 -
Total 9,689,999.71 11,018,533.61
84,140,200.46 82,811,666.56
（2） Short term employee benefits payable
Items Opening balance Increment Decrement Closing Balance
Salary, bonus, allowance 2,130,234.10 70,038,294.33 2,954,051.22
70,862,111.45
Employee Welfare expenses 2,820,887.84
2,820,887.84 -
Social insurance 2,344.32 2,757,220.88
2,754,876.56 -
Including: Medical insurance 2,038.52 2,396,762.02
2,394,723.50 -
Employment injury insurance 178.42 171,061.84
170,883.42 -
Maternity insurance 127.38 189,397.02
189,269.64 -
Items Opening balance Increment Decrement Closing Balance
Housing accumulation fund 10,974.00 828,363.80 46,039.20
863,429.00
Labor union fees& Employee
7,540,025.60 879,365.33 8,013,691.19
education fees 1,353,030.92
Other short-term payment 36,729.00 4,010.00
40,739.00
Total 9,683,578.02 77,360,861.18 11,017,791.61
78,695,074.77
（3） Defined contribution plans payable
Items Opening balance Increment Decrement Closing Balance
Basic endowment insurance 5,912.06 5,077,584.91 5,083,496.97 0.00
Unemployment insurance 509.63 357,540.78 357,308.41 742.00
Total 6,421.69 5,435,125.69 5,440,805.38 742.00
23、Taxes payable
Items 30 June 2015 1 January 2015
VAT -431,121.60
Individual income tax 128,893.75 175,810.93
City construction and maintenance tax 751,042.91 430,008.45
Corporate income tax -350,158.18 -39,062.10
Property tax -617,237.74 -141,625.39
Business tax 10,132,855.27 5,757,820.60
Land use tax 170,091.31
Increment tax on land value -2,546,889.32 -2,126,579.42
Educational surtax 438,777.74 75,613.91
Others 156,471.66 301,199.19
Total 7,662,634.49 4,603,277.48
24、Interest payable
Item 30 June 2015 1 January 2015
Interests on long-term loans 36,550,278.36 18,376,036.74
Interests on loans from other companies 99,941,397.94 93,156,857.01
Interests on entrusted loans 10,449,888.49 10,449,888.49
Others 926,133.00 418,068.49
Total 147,867,697.79 122,400,850.73
25、Dividend payable
Investor 30 June 2015 1 January 2015
Payable to institutional shareholders 3,213,302.88 3,213,302.88
Total 3,213,302.88 3,213,302.88
26、Other payables
Items 30 June 2015 1 January 2015
Items 30 June 2015 1 January 2015
Borrowings 470,885,047.61 627,784,756.31
Land transfer payment 43,000,000.00 43,000,000.00
Agency fund from properties
14,257,732.10 26,485,268.25
management
Suppliers 298,790.00 12,280,414.57
accrued expenses 6,031,465.18 7,916,400.00
Decoration quality warranty 4,033,910.69 5,167,661.14
Maintenance funds 260,589.00 2,559,260.74
Others 59,609,095.62 55,165,761.07
Total 598,376,630.20 780,359,522.08
27、Current portion of non-current liabilities
Category 30 June 2015 1 January 2015
Long-term loans due within one year 386,098,907.05 249,471,973.56
Total 386,098,907.05 249,471,973.56
28、Long-term borrowings
（1） Categories of long-term borrowings
Category 30 June 2015 1 January 2015
Pledged loans 164,303,532.50 130,303,532.50
Mortgaged loans 524,805,306.92 277,805,306.92
Guaranteed loans 150,856,734.31 168,666,666.66
Less: Long-term loans due within one year 386,098,907.05 249,471,973.56
Total 453,866,666.68 327,303,532.52
（2） Pledged loans details
Lender Closing balance The pledge
The Company pledge 79.2% of interest in Hubei Pearl River Real Estate
Development Co., Ltd. as a security.
Guotai Yuanxin Asset Management Ltd. 164,303,532.50
The ultimate control party, Beijing Xinxing Real Estate Development Co., Ltd,
assume joint and several liability for the loan.
Total 164,303,532.50
（3） Mortgaged loan details
Lender Closing balance Mortgages
Chongqing International Trust Co., Ltd 54,000,000.00Three properties owned by Sanya Wanjia Hotel Management Co., Ltd
Bank of China, Haikou Yeshumen Branch 196,805,306.92The same as above
Ten properties owned by Mudanjiang Pearl River Wanjia Tourism Inves
China Citic Bank Haerbin Branch 24,000,000.00
tment Development Group
Pudong Shanghai Development Bank Wuhan
250,000,000.00Merrill lynch qingcheng mountain three phase of the project
branch
Total 524,805,306.92
（4） Guaranteed loan details
Lender Closing balance Guarantor
China construction bank Mudanjiang Branch 67,523,400.99Heilongjiang Xinzheng Guarantee Co., Ltd.
Industrial and Commercial Bank of China
83,333,333.32Mengneng International Energy Exploitation Co., Ltd.
Mudanjiang Branch
Total 150,856,734.31
29、Share capital
Increment or decrement (+,-)
Items 1 January 2015 issued 30 June 2015
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
30、Capital reserve
Items 1 January 2015 Increase Decrease 30 June 2015
Capital premium 225,390,819.63 225,390,819.63
Others capital reserve 109,300,017.82 109,300,017.82
Total 334,690,837.45 334,690,837.45
31、Other comprehensive income
Amount for the current period
Less：Net amount
included in other Post-tax net
Post-tax net
comprehensive amount
Item 1 January 2015 Before-tax amount income in the prior Less：income tax
amount belonging
belonging to
30 June 2015
to parent company
for the current period periods that is minority
owners
transferred to shareholders
profit or loss for
the period
I.Net amount included in other
comprehensive income that
can be transferred to profit or
loss in the future
Including : Gains (losses)
arising from available-for-sale 125,127,595.63 125,127,595.63
financial assets
Total 125,127,595.63 125,127,595.63
32、Surplus reserves
Items 30 June 2015 1 January 2015
Statutory surplus reserve 71,852,236.46 71,852,236.46
General surplus reserve 37,634,827.93 37,634,827.93
Items 30 June 2015 1 January 2015
Total 109,487,064.39 109,487,064.39
33、Retained earnings
Items Amounts
Non-adjusted Closing Balance of the year 2013 -980,486,431.07
Adjusted opening balance of the year 2014
Add: Net profit attributed to the owners of the parent company 21,492,625.03
Less：Statutory surplus reserve
Random surplus reserve
Common risk provision
Dividend payable of Ordinary shares
Share capital converted from dividend of ordinary shares
Undistributed profit at the end of period -958,993,806.04
34、Operating income and operating costs
（1） Operating income
Items Jan.–Jun, 2015 Jan.–Jun, 2014
Main operating business income 125,940,552.56 122,167,333.83
Other operating business income 10,177,276.63 2,517,166.96
Total 136,117,829.19 124,684,500.79
（2） Operating costs
Items Jan.–Jun, 2015 Jan.–Jun, 2014
Main operating business costs 98,834,069.35 90,849,665.61
Other operating business costs 1,903,272.52 906,492.39
Total 100,737,341.87 91,756,158.00
（3） The details of main operating businesses were as follows according to products:
Jan.–Jun, 2015 Jan.–Jun, 2014
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
Property management
95,547,448.69 85,885,239.27 80,129,140.46 71,410,997.10
services
Tourist hotel services 30,393,103.87 12,948,830.08 39,121,313.37 18,209,905.89
Tota 125,940,552.56 98,834,069.35 122,167,333.83 90,849,665.61
（4） Income and costs of principal operations analysed by regions are set out below:
Jan.–Jun, 2015 Jan.–Jun, 2014
Location Main operating business Main operating business Main operating business Main operating business
income costs income costs
Hainan 109,822,764.56 92,811,348.53 96,494,491.74 79,825,294.93
Heilongjiang 14,326,957.30 4,895,210.17 20,929,516.99 8,683,310.54
Hubei 349,224.00 310,731.36 3,409,886.00 1,541,122.05
Hebei 0.00 0.00 0.00 0.00
Shanghai 1,441,606.70 816,779.29 1,327,239.10 799,938.09
Beijing 0.00 0.00 6,200.00 0.00
Total 125,940,552.56 98,834,069.35 122,167,333.83 90,849,665.61
35、Business taxes and surcharges
Items Jan.–Jun, 2015 Jan.–Jun, 2014
City construction and maintenance tax 476,412.41 436,395.75
Education fee 204,176.76 187,026.75
Business tax 6,805,891.46 6,234,225.04
Land value-added tax 9,200.00 378,202.62
Others 136,318.84 69,298.99
Total 7,631,999.47 7,305,149.15
36、Selling expenses
Items Jan.–Jun, 2015 Jan.–Jun, 2014
Payroll expense 1,114,145.29 1,691,622.27
Sales agent 0.00 0.00
Hotel operating expense 0.00 68,367.68
Advertising fees 1,144,346.31 127,105.00
other selling expenses 547,630.37 535,857.53
Total 2,806,121.97 2,422,952.48
37、Administrative expenses
Items Jan.–Jun, 2015 Jan.–Jun, 2014
Payroll expense 15,493,989.52 16,347,061.33
Depreciation expense 16,106,092.25 16,043,305.56
Business entertainment 3,441,034.93 4,674,833.29
Taxation expenses 1,682,603.42 1,548,053.40
Other expenses 11,803,658.40 15,944,767.33
Total 48,527,378.52 54,558,020.91
38、Finance expenses
Items Jan.–Jun, 2015 Jan.–Jun, 2014
Interest exchange 53,473,422.46 38,522,591.99
Less: interest revenue 1,752,443.40 1,042,636.62
Foreign exchange loss
Less: exchange gain
Others 10,325,036.25 13,362,693.21
Items Jan.–Jun, 2015 Jan.–Jun, 2014
Total 65,550,902.11 50,842,648.58
39、Impairment Loss of Assets
Items Jan.–Jun, 2015 Jan.–Jun, 2014
Bad debts impairment loss 819,765.92 -2,347,009.11
Inventories impairment loss
Total 819,765.92 -2,347,009.11
40、Investment income
Items Jan.–Jun, 2015 Jan.–Jun, 2014
Long-term equity investment income accounted by Costs Method
Long-term equity investment income accounted by Equity Method -205,388.30 -588,160.16
Disposal of investment income for the sale of financial assets 124,342,755.05
Dividend income from available for sale financial assets 930,000.00
Others 51,509.50
Total 124,137,366.75 393,349.34
41、Non-operating income
Items Jan.–Jun, 2015 Jan.–Jun, 2014
Gain on disposal of non-current assets 12,073.95 1,163.87
Gains on debt restructure
Liquidated damages 43,773.33
Others 452,686.58 70,184.34
Total 508,533.86 71,348.21
42、Non-operating expenses
Items Jan.–Jun, 2015 Jan.–Jun, 2014
Loss on disposal of non-current assets 453.21
Donation 1,100.00
Losses on write-off of assets
211,311.35
Fine expenditures
175,648.42
6,279.42
Others 18,087.20 285,766.95
Total 194,835.62 503,810.93
43、Income tax expenses
Items Jan.–Jun, 2015 Jan.–Jun, 2014
Income tax this year 643,839.49 135,935.72
Deferred income tax 15,210,270.77
Total 15,854,110.26 135,935.72
44、Notes to cash flow statements
(1) Cash received relating to other operating activities
Items Jan.–Jun, 2015 Jan.–Jun, 2014
Current account received from Harbin Jiangshan International Travel Service 3,642,340.00
Current account received from Beijing Yuantong Rongtong Asset Management Co., Ltd 2,500,000.00
Current account received from Beijing Timestar Culture Communication Co., Ltd 205,000.00
Current account received from Chen Jilin 400,000.00
Current account received from Chen Jiqiang 5,000,000.00
Current account received from Xie Lin 200,000.00
Other current account 3,680,000.00 1,473,231.00
Deposit of electricity decoration lease, maintenance fund, and customer license handling, and
4,023,600.00 3,020,058.00
handover tax
Collection on behalf of customer of water, electricity, waste treatment, gas, heating, and
7,001,038.50 6,057,527.47
television fees.
Fund of disbursement returned by employee 436,528.39 240,947.97
Bank deposit interest received 447,100.97 165,489.37
Other 1,148,781.89 1,571,016.92
Total 23,284,389.75 17,928,270.73
(2) Cash paid relating to other operating activities
Items Jan.–Jun, 2015 Jan.–Jun, 2014
Current account received from Xie Lin 200,000.00
Current account received from Beijing Yuantong Rongtong Asset Management Co.,
17,300,000.00
Ltd
Current account received from Tan Lu 4,000,000.00
Other current account 3,400,000.00 4,471,186.33
Deposit of electricity decoration lease, maintenance fund, and customer license
3,023,000.00 2,820,772.64
handling, and handover tax
Collection on behalf of customer of water, electricity, waste treatment, gas, heating,
3,619,893.57 5,998,618.25
and television fees.
Management cost expense 12,008,726.54 14,060,931.68
Operating cost expense 1,180,341.32 721,793.47
Non-operating expense 158,017.54 36,388.87
Payment of fund of disbursement 290,735.74 986,964.14
Bank handling fee 280,936.05 197,517.54
Other 1,173,579.01 1,061,573.95
Total 42,635,229.77 34,355,746.87
(3) Cash received relating to other investing activities
Items Jan.–Jun, 2015 Jan.–Jun, 2014
Interest income 13,871.23
Total 13,871.23
(4) Cash paid relating to other financing activities
Items Jan.–Jun, 2015 Jan.–Jun, 2014
Financing service fee 11,446,555.28 16,472,500.00
Handling fee of entrusted loan 58,140.00
Total 11,504,695.28 16,472,500.00
45、Supplementary information of cash flow statement
(1) Supplementary information
Items Jan.–Jun, 2015 Jan.–Jun, 2014
1．Reconciliation of net profit to cash flows from operating activities:
Net profit 18,641,274.06 -80,028,468.32
Add: Provision for assets impairment 819,765.92 -2,347,009.11
Depreciation of fixed assets, production biological assets, petroleum and natural gas 17,226,883.18 17,122,168.76
Amortization of intangible assets 605,337.98 613,316.51
Amortization of long-term prepayments 2,454,539.88 7,937,364.55
Losses on disposal of fixed assets, intangible assets and other long-term assets -204,803.91 -1,062,443.98
Losses on scrapping of fixed assets -7,067.42 -22,905.82
Losses on fair value change
Financial expenses 65,403,843.97 45,460,020.20
Investment losses -124,137,366.75 -393,349.34
Decrease in deferred income tax assets 15,210,270.77
Increase in deferred income tax liabilities
Decrease in inventories -46,689,362.00 -146,004,410.53
Decrease in operating receivables 46,525,715.08 46,247,983.51
Increase in operating payables -90,811,825.58 -44,270,821.24
Others
Net cash flows from operating activities -94,962,794.82 -156,748,554.81
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 136,016,986.29 78,992,211.94
Less: Cash at the beginning of the period 97,404,192.62 62,362,242.69
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 38,612,793.67 16,629,969.25
(2) Cash and cash equivalents
Items Jan.–Jun, 2015 Jan.–Jun, 2014
1. Cash 116,016,986.29 77,404,192.62
Including: Cash on hand 688,023.10 1,255,008.79
Bank deposit paid at any time 115,302,351.70 76,091,882.06
Other monetary funds paid at any time 26,611.49 57,301.77
2. cash equivalents
3. Cash and cash equivalents at the end of year 116,016,986.29 77,404,192.62
46、Assets with ownership restricted
Assets by categories Closing Balance Restricted reasons
Assets by categories Closing Balance Restricted reasons
Monetary fund 20,000,000.00 Security for borrowings
Inventory 409,567,152.03 Security for borrowings
Investment real estates 16,580,622.64 Security for borrowings
Fixed assets 277,307,830.99 Security for borrowings
Intangible assets 26,909,936.53 Security for borrowings
Total 750,365,542.19
． VII.Shares and rights in other companies
1. Subsidiaries
（1） Group Composition
Equity interest held (%)
Place of Nature of
Company name Place of operation Accounting method
registration business
Direct Indirect
Hainan Pearl River Properties and Hotels Property
Hainaa、Zhenzhou Haikou,Hainan 98.00 set-up
Management Co., Ltd. management
Property
Hainan Pearl River Environmental Projects Co.,Ltd. Haikou,Hainan Haikou,Hainan 100.00 set-up
management
Hainan Pearl River Estate Property
Haikou,Hainan Haikou,Hainan 100.00 set-up
Cleaning Company management
Hainan Pearl River Estate
Property
Machine Engineering Haikou,Hainan Haikou,Hainan 100.00 set-up
management
Company
Hainan Pearl River Estate Real estate
Haikou,Hainan Haikou,Hainan 100.00 set-up
Marketing Co., Ltd. development
Sanya Wanjia Hotel
Sanya,Hainan Sanya,Hainan Hotel service 100.00 set-up
Management Co., Ltd.
Real estate
Hubei Pearl River Real Estate Development Co., Ltd. Wuhan, Hubei Wuhan, Hubei 89.20 set-up
development
Wuhan Pearl River Meilin Hotels Management Co.,
Wuhan, Hubei Wuhan, Hubei Hotel service 100.00 set-up
Ltd.
Hainan Pearl River Real estate
Shanghai Shanghai 100.00 set-up
Holding( Shanghai )Real Estate Co.,Ltd. development
Cultural and
Beijing Jiubo Culture Development Co., Ltd. Beijing Beijing sports 100.00 set-up
services
Hotel
Mudanjiang Pearl River Wanjia Tourism Investment
Mudanjiang City Mudanjiang City service、 100.00 set-up
Development Group
tourism
Business combinations
Hailin Wanjia Snowtown Holiday Hotel Management involving enterprises
Mudanjiang City Mudanjiang City Hotel service 100.00
Co., Ltd. not under common
control
Mudanjiang Jingbohu Wanjia Hotel Co., Ltd. Mudanjiang City Mudanjiang City Hotel service 100.00 set-up
Mudanjiang Wanjia Star Hotel Co., Ltd. Mudanjiang City Mudanjiang City Hotel service 100.00 set-up
Operation of
Heilongjiang Longshi Pearl River Culture Harbin Harbin Movie and 70.00 set-up
Communication Co., Ltd TV
Harbin Harbin Tourism 100.00 set-up
Harbin Wanjia Travel Agent
Hebei Zhengshi Qinghui Real Estate Development Real estate
Shijiazhuang Shijiazhuang 51.00 set-up
Co., Ltd. development
Property
Shanghai Sea Pearl Property Management Co., Ltd. Shanghai Shanghai 50.00 set-up
management
（2） Significant non wholly owned subsidiaries
Current P/L attributable Current dividend
Proportion of Closing balance of
Company name to minority payements to
minority(%) minority interest
shareholders minority
Hainan Pearl River Properties and Hotels
Management Co., Ltd.
2.00 -22,430.44 179,892.94
Hubei Pearl River Real Estate Development Co., Ltd. 10.80 -534,855.34 10,883,333.30
Current P/L attributable Current dividend
Proportion of Closing balance of
Company name to minority payements to
minority(%) minority interest
shareholders minority
Heilongjiang Longshi Pearl River Culture Communication
Co., Ltd
30.00 -1,035,175.94 -4,514,154.67
Hebei Zhengshi Qinghui Real Estate Development Co., Ltd. 49.00 -1,271,886.66 -6,089,522.08
Shanghai Sea Pearl Property Management Co., Ltd. 50.00 12,997.41 179,680.78
Total ----- -2,851,350.97 639,230.27
（3） The financial information of significant non wholly owned subsidiaries
Closing balance
Company name
Non-current Non-current
Current assets Total assets Current liabilities Total liabilities
assets liabilities
Hainan Pearl River Properties
and Hotels 77,712,829.22 3,333,406.73 81,046,235.95 72,051,588.74 72,051,588.74
Management Co., Ltd.
Hubei Pearl River Real Estate 12,182,974.6 686,504,665.4 250,000,000.0
Development Co., Ltd. 674,321,690.86 335,736,161.53 585,736,161.53
1 7 0
Heilongjiang Longshi Pearl
River Culture Communication 6,358,071.23 4,811,948.69 11,170,019.92 26,217,202.16 26,217,202.16
Co., Ltd
Hebei Zhengshi Qinghui Real
Estate Development Co., Ltd.
28,031,088.64 727,627.65 28,758,716.29 41,186,312.37 41,186,312.37
Shanghai Sea Pearl Property
Management Co., Ltd.
2,138,742.41 5,385.21 2,144,127.62 1,784,766.07 1,784,766.07
Continued:
Opening balance
Company name
Non-current Non-current
Current assets Total assets Current liabilities Total liabilities
assets liabilities
Hainan Pearl River
Properties and Hotels 75,411,751.89 3,661,263.74 79,073,015.63 68,956,846.41 68,956,846.41
Management Co., Ltd.
Hubei Pearl River Real
Estate Development Co., 400,473,121.91 7,384,351.67 407,857,473.58 302,136,757.70 302,136,757.70
Ltd.
Heilongjiang Longshi Pearl
River Culture 4,159,517.17 5,830,346.04 9,989,863.21 21,586,458.98 21,586,458.98
Communication Co., Ltd
Hebei Zhengshi Qinghui
Real Estate Development 27,955,312.68 936,459.15 28,891,771.83 38,723,680.86 38,723,680.86
Co., Ltd.
Shanghai Sea Pearl Property
Management Co., Ltd.
1,848,964.75 7,276.92 1,856,241.67 1,522,874.93 1,522,874.93
Continued:
30 June 2015
Company name Total
Net cash flows from
Operating income Net profit comprehensive
investing activities
income
Hainan Pearl River Properties and Hotels
94,105,841.99 -4,361,051.32
Management Co., Ltd. -1,121,522.01 -1,121,522.01
Hubei Pearl River Real Estate Development Co., Ltd. 732,797.00 -203,987,668.35
-4,952,211.94 -4,952,211.94
Heilongjiang Longshi Pearl River Culture Communication
Co., Ltd 3,826,013.00 6,086,333.18
-3,450,586.47 -3,450,586.47
Hebei Zhengshi Qinghui Real Estate Development Co.,
-236,750.04
Ltd. -2,595,687.05 -2,595,687.05
Shanghai Sea Pearl Property Management Co., Ltd. 1,441,606.70 25,994.81 25,994.81 289,777.66
Continued:
30 June 2015
Company name Total
Net cash flows from
Operating income Net profit comprehensive
investing activities
income
Hainan Pearl River Properties and Hotels
Management Co., Ltd. -3,244,664.90
78,801,901.36 -349,464.52 -349,464.52
Hubei Pearl River Real Estate Development Co., Ltd. -146,835,264.80
3,888,886.00 -3,663,074.53 -3,663,074.53
30 June 2015
Company name Total
Net cash flows from
Operating income Net profit comprehensive
investing activities
income
Heilongjiang Longshi Pearl River Culture Communication
Co., Ltd -437,187.95
236,435.00 -3,538,712.12 -3,538,712.12
Hebei Zhengshi Qinghui Real Estate Development Co., Ltd. -348,460.53
- -2,786,003.77 -2,786,003.77
Shanghai Sea Pearl Property Management Co., Ltd. 221,315.35
1,327,239.10 33,911.59 33,911.59
2. Details of transactions which the subsidiaries still be controlled although proportion of minority changed
（1） The details of change in proportion of minority
（2） The effect of equity attributable to parent company and minority interests
3. Equity in joint ventures or associates
（1） Significant associates
Equity interest held (%)
Place of Nature of
Name Place of operation
registration business
Accounting method
Direct Direct
Real estate
Sanya Wanjia Industrial Co. Ltd Sanya Sanya development
40 Equity method
（2） Financial information of Significant associates
30 Jun 2015 1 Jan 2015
Item
Sanya Wanjia Industrial Co. Ltd Sanya Wanjia Industrial Co. Ltd
Current asset 86,539,175.69 86,917,723.70
Non-current asset 581,665.81 583,410.85
Total asset 87,120,841.50 87,501,134.55
Current liability 1,272,113.05 1,338,870.51
Non-current liability
Total liability 1,272,113.05 1,338,870.51
Minority interests
Equity attributable to parent company 85,848,728.45 86,162,264.04
Net assets share calculated according to proportion
34,339,491.38 34,464,905.62
of shareholding
Net book value of the equity investment in
34,339,491.38 34,464,905.62
associates
Continued:
30 Jun 2015 1 Jan 2015
Item
Sanya Wanjia Industrial Co. Ltd Sanya Wanjia Industrial Co. Ltd
Operating income 0.00 14,166.66
Net profit -313,535.59 -866,606.21
Other comprehensive income
Total comprehensive income -313,535.59 -866,606.21
（3） Financial information of not significant associates
Item 30 Jun 2015 1 Jan 2015
Net book value of the equity investment in associates 1,416,874.95 1,496,849.01
calculated according to proportion of shareholding: — —
Net profit -79,974.06 -241,517.68
Other comprehensive income
Total comprehensive income -79,974.06 -241,517.68
4、Undetermined warranty relating to joint venture
There is no warranty matter to be disclosed.
5、Contingent liabilities relating to joint venture or associates
There are no contingent matters.
VIII. Disclosure of risk relating to financial instrument
The operating business of the company faces the following financial risks: credit risk, liquidity risk and market risk (mainly of interest
rate risk). The company's overall risk management plan is aimed for the unpredictability of financial markets, striving to reduce the
potential adverse effects on financial results.
(I) Credit risk
The company's credit risk mainly comes from monetary funds, accounts receivable, other receivables, and financial asset available for
sales. The management has formulated appropriate credit policy and continuously monitors the credit risk exposure.
The monetary fund’s holding by the company mainly deposit in the commercial banks and other financial institutions. The management
believes that such commercial banks have higher goodwill and asset status, and the credit risk is relative low. The company adopts quota
policy to evade credit risk to any financial institution.
For accounts receivable and other receivable, the company sets the relevant policies to control credit risk exposure. The company
assesses the credit qualification and sets the corresponding credit period based on customer’s financial status, from the possibility of a
third party to obtain guarantees, credit history and other factors. The company periodically monitors customer credit record. For the
customer with bad credit records, the company issues written notice for prompt payment, shortens the credit period or cancel the credit
period in order to ensure the company's overall credit risk in the controllable range.
The biggest credit risk exposure the company undertook is the book value of each financial asset in the balance sheet. In addition to the
financial guarantee listed in the notes, the company had not provided any guarantee that may generate credit risk to the company.
(II) Liquidity risk
Liquidity risk refers to the risk that the company is unable to timely access to adequate funds, meet the needs of business development
or pay debts and other payment obligations.
The company’s finance department continuously monitors its short-term and long-term capital requirements in order to ensure the
maintenance of sufficient cash reserves; at the same time, supervises the compliance of the provisions of loan agreement, acquires
sufficient reserve fund guarantee from major financial institutions in order to meet the demands of short-term and long-term funds.
As at 30 June 2015, the financial assets and liabilities of the Company are analyzed by their maturity date below at their undiscounted
contractual cash flows :
30 Jun 2015
Item
Net book value Carrying amount Within 1year 1 to 2 years 2 to 5 years Over 5 years
Currency Funds 136,016,986.29 136,016,986.29 136,016,986.29
Accounts
14,168,842.98 25,041,367.98 25,041,367.98
receivable
30 Jun 2015
Item
Net book value Carrying amount Within 1year 1 to 2 years 2 to 5 years Over 5 years
Other receivables 261,993,360.85 332,131,744.59 332,131,744.59
Available-for-sale
11,411,309.90 36,943,555.29 36,943,555.29
financial assets
Subtotal 423,590,500.02 530,133,654.15 530,133,654.15
Short-term
19,000,000.00 19,000,000.00 19,000,000.00
borrowings
Accounts payable 22,096,077.65 22,096,077.65 22,096,077.65
Other payables 598,376,630.20 598,376,630.20 598,376,630.20
Long-term
839,965,573.73 839,965,573.73 386,098,907.05 177,866,666.64 276,000,000.04
borrowings
Subtotal 1,479,438,281.58 1,479,438,281.58 1,025,571,614.90 177,866,666.64 276,000,000.04
Continued:
1 Jan 2015
Item
Net book value Carrying amount Within 1year 1 to 2 years 2 to 5 years Over 5 years
Currency Funds 97,404,192.62 97,404,192.62 97,404,192.62
Accounts
12,378,292.44 23,143,450.61 23,143,450.61
receivable
Other receivables 238,352,004.55 307,777,989.20 307,777,989.20
Available-for-sale
184,158,809.90 209,691,055.29 209,691,055.29
financial assets
Subtotal 532,293,299.51 638,016,687.72 638,016,687.72
Short-term
19,000,000.00 19,000,000.00 19,000,000.00
borrowings
Accounts payable 58,578,620.48 58,578,620.48 58,578,620.48
Other payables 780,359,522.08 780,359,522.08 780,359,522.08
Long-term
576,775,506.08 576,775,506.08 249,471,973.56 183,970,199.18 135,000,000.04 8,333,333.30
borrowings
Subtotal 1,434,713,648.64 1,434,713,648.64 1,107,410,116.12 183,970,199.18 135,000,000.04 8,333,333.30
(III) Market risks
1. Foreign exchange risk
N/A
1. Interest rate risk
The company's interest rate risk is mainly from bank borrowing. The financial liabilities of floating rate make the company to face the
interest rate risk of cash flow. The financial liabilities of fixed interest rate make the company to face the interest rate risk of fair value.
The ratio of fixed interest rate and floating interest rate contract is recognized according to the market environment.
As of June 30, 2015, the long-term debt bearing with interest is Renminbi-denominated floating interest rate contract. The amount is
RMB 478,856,734.31 Yuan; the Renminbi-denominated fixed-rate contract is amounted to RMB 705,771,752.32 Yuan.
IX. Fair value
(I) Financial instrument measured by fair value
The overall fair value is classified into three levels on the basis of important input value of the lowest level from the three when
measuring the fair value. The definitions of the three levels are:
Level 1: the un-adjusted quotation in the active market of the same assets or liabilities acquired on the measurement date;
Level 2: observable input values, directly or indirectly, relating to the related assets or liabilities beyond the values of the first level;
The input values of the second level include: 1) similar assets or liabilities quotations in the active market; 2) the same or similar assets
or liabilities in non-active market; 3) other observable input values other than the quotation, including interest rates, yield curve, implied
volatility and credit spreads that are observable during the normal quotation interval; 4) input values of market validation.
Level 3: un-observable input values of the related assets and liabilities.
(II) Measurement of fair value at the end of period
1. Sustainable measurement of fair value
There is no financial instrument of fair value measurement at the end of this period.
(III) Recognition basis for continuous measurement the market price of fair value of the first level
The continuous measurement of the market price of fair value of the first level is the closing price at the ending time in the active market
on the exchange.
(IV) Fair value of financial assets and financial liabilities not measured by fair value
It mainly includes accounts receivable, short-term loan, accounts payable, non-current liabilities due within one year, long-term loan,
and equity investment that has no active market, quotation and its fair value cannot be reliably measured.
The company’s management believes that the difference between the book value of the financial assets and liabilities not measured by
the fair value and the fair value is small.
． X、Related party relationship and transactions
(I).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 Estate Real estate
The first largest 28,012.89
Development Holdings Co., Beijing 60003715-7 development and 26.36% 26.36%
shareholder million Yuan
Ltd operation
The ultimate controller of the company is Beijing Xinxing Real Estate Development Corporation.
(II)Information about subsidiaries
Details refer to “Note X. 1. Subsidiaries”.
(III) Information about joint venture and associates of the Company
Details refer to “Note X. 2. Equity in joint ventures or associates”.
(IV)Transactions of related parties
1. Internal transactions have already been offset.
2. Rendering services
Related party Nature of related transaction 30 Jun- 2015 30 Jun- 2014
Beijing Zhongjia Sunny Energy Technology
Rent services 120,000.00 120,000.00
(Company) Co., Ltd.
Total 120,000.00 120,000.00
3. Guarantees provided
Guarantee
Beginning date of Maturity date of
Guarantor Amount
guarantee contract guarantee contract
obligation
expired
Beijing Xinxing Real Estate Development corporation 164,303,532.50 2014/9/15 2018/5/28 No
Beijing Zhongjia Sunny Energy Technology (Company)
2013/9/12 2016/9/12 No
Co., Ltd. 27,000,000.00
Total 191,303,532.50
4. Interbank borrowing among related parties
(1) As of June 30, 2015, the balance of borrowing principle lent by the company from Beijing Xinxing Real Estate Development
Corporation is RMB 123,967,912.9 Yuan and the balance of interest payable is RMB 25,237,119.56 Yuan.
(2) As of June 30, 2015, the balance of borrowing principle lent by the company from Beijing Wanfa Real Estate Development Co.,
Ltd is RMB 58,825,000.00 Yuan and the balance of interest payable is RMB 27,132,902.85 Yuan.
(3) As of June 30, 2015, the balance of borrowing principle lent by the subsidiary Sanya Wanjia Hotel Management Co., Ltd from
Beijing Xinxing Real Estate Development Corporation is RMB 32,030,000.00 Yuan, and the balance of interest payable is RMB
34,201,072.68 Yuan; the balance of borrowing principle lent from Beijing Wanfa Real Estate Development Co., Ltd is RMB
19,700,000.00 Yuan and the balance of interest payable is RMB 11,925,070.3 Yuan.
The one-year RMB loan benchmark interest rate released by the People's Bank of China is applied for the above borrowing interest rate
which will be changed along with its alteration. The provision of borrowing interest of the above related parties during the reporting
period is RMB 5,339,308.38 Yuan and the balance of interest payable is RMB 98,496,165.39 Yuan.
5. Remuneration of key management (10,000 Yuan)
Item Amount of this period Amount of last period
Remuneration of key management 76.47 76.47
6. Balances of related party receivable and payable
Items Company Name 30 Jun- 2015 1 Jan- 2015
Other
Beijing Xinxing Real Estate Development General company 155,997,912.90 140,997,912.90
payables
Other
Beijing Wangfa Real Estate Development Holdings Co., Ltd 78,525,000.00 78,525,000.00
payables
Other
Beijing Zhongjia Yangguang energy technology (Company) Co., Ltd. 3,541,380.93 3,054,060.35
payables
Total 238,064,293.83 222,576,973.25
Interest
Beijing Xinxing Real Estate Development General company 59,438,192.24 56,253,903.29
payable
Interest
Beijing Wangfa Real Estate Development Holdings Co., Ltd. 39,057,973.15 36,902,953.72
payable
Total 98,496,165.39 93,156,857.01
XI. Guarantee and contingencies
(I) Key guarantee
The company has not guarantee matters to be disclosed.
(II) Contingencies existing on the balance sheet date
There are no contingencies o be disclosed.
XII. Events after the balance sheet date
(I) Profit distribution
According to the 16th session of the seventh board of meeting, there is no profit distribution plan in the first half year of 2015.
(II) Statement on other events after the balance sheet date
Except for the above mentioned events after the balance sheet date, as of the reporting date, there is no other undisclosed key event after
the balance sheet date.
XIII. Other significant matters
The operating funds of the company as of June 30, 2015 are RMB - 229.89 million Yuan. Of which, RMB - 88.07 million Yuan is
attributable to shareholders’ equity of the parent company; RMB 21.49 million Yuan net profit is attributable to the parent company of
the first half year of 2015. The company's will speed up the development progress of the projects in future, dispose existing assets, and
expand the financing channels and major shareholder’s continued support in order to improve the company's profitability and to enhance
the company's future ability to contiguous operation.
XIV.Notes to significant items of the parent company’s financial statements
1. Accounts receivable
（1） Disclosure of accounts receivable by categories:
30 Jun- 2015 1 Jan- 2015
Items Proportio Bad debt Proportio Bad debt
Balance n Bad debts ratio Balance n Bad debts ratio
(%) (%) (%) (%)
1.Significant accounts receivable and
bad debts 7,761,707.60 57.71 7,761,707.60 100.00 7,761,707.60 56.89 7,761,707.60 100.00
accounted individually
2.Bad debt accounted by the
3,789,176.65 28.17 538,869.82 14.22 3,983,002.62 29.19 547,524.46 13.75
combinations
3.Other unimportant receivables but bad
debts 1,898,690.60 14.12 1,898,690.60 100.00 1,898,690.60 13.92 1,898,690.60 100.00
accounted individually
Total 13,449,574.85 100.00 10,199,268.02 13,643,400.82 100.00 10,207,922.66 ——
（2） Accounts receivable for which bad debt provision has been assessed by portfolios：
Accounts receivable portfolios for which bad debt provision has been assessed using the aging analysis approach:
30 Jun- 2015 1 Jan- 2015
Age Bad Debts Bad Debts
Amounts Amounts
Provision Provision
Within 1 year 1,972,676.78 39,453.54 2,007,232.28 40,144.65
1 to 2 years 706,741.45 35,337.07 866,011.92 43,300.60
2 to 3 years 102,000.00 10,200.00 102,000.00 10,200.00
3 to 4 year 100,000.00 20,000.00 100,000.00 20,000.00
4 to 5 years 100,000.00 30,000.00 100,000.00 30,000.00
5 years and more 807,758.42 403,879.21 807,758.42 403,879.21
Total 3,789,176.65 538,869.82 3,983,002.62 547,524.46
（3） Accounts receivable for which bad debt provision has been assessed individually
Accounts receivable that are individually significant and for which bad debt provision has been assessed individually
Bad Debt
Name Ending Balance Provision Proportion (%) Reason
Hainan racing entertainment Co., LTD 2,406,158.00 2,406,158.00 17.89 Irrecoverable
Hainan Baoping company 2,218,494.43 2,218,494.43 16.49 Irrecoverable
Hainan centaline property agency 2,090,069.77 2,090,069.77 15.54 Irrecoverable
Haikou hidden which stores management
1,760,515.28 35,210.31 13.09 Irrecoverable
company
Lionview Global Investments Ltd. 1,118,500.00 354,330.00 8.32 Irrecoverable
Bad Debt
Name Ending Balance Provision
Proportion (%) Reason
Total 9,593,737.48 7,104,262.51 Irrecoverable
2. Other receivables
（1） Disclosure of other receivables by categories:
30 Jun- 2015 1 Jan- 2015
Items Bad debt
Proportion Proportion Bad debt ratio
Balance Bad debts ratio Balance Bad debts
(%) (%) (%)
(%)
1. Individual with significant
amount 36,793,380.89 4.58 21,378,380.89 58.10 35,343,380.89 4.01 21,378,380.89 60.49
2. Bad debt accounted by the
combinations
Age Combinations 247,279,547.08 30.80 37,537,018.89 15.18 246,340,004.64 27.95 37,512,008.05 15.23
In scope of consolidated
statements 514,363,800.05 64.07 595,170,501.36 67.52
subtotal 761,643,347.13 94.87 37,537,018.89 4.93 841,510,506.00 95.47 37,512,008.05 4.46
3. Other unimportant
receivables
4,338,158.93 0.54 3,970,515.63 91.53 4,597,298.84 0.52 3,975,946.33 86.48
Total 802,774,886.95 99.99 62,885,915.41 —— 881,451,185.73 100.00 62,866,335.27 ——
（2） Other receivables for which bad debt provision has been assessed by portfolios：
Aging analysis Other receivables portfolios for which bad debt provision has been assessed using the aging analysis approach:
30 Jun- 2015 1 Jan- 2015
Age Amounts Amounts
Bad Debt Bad Debt
Ratio Provision Ratio Provision
Amounts Amounts
(%) (%)
Within 1 year 2,266,314.20 0.92 45,326.28 1,435,771.76 0.58 28,715.44
1 to 2 years 31,443,200.00 12.72 1,572,160.00 31,393,200.00 12.74 1,569,660.00
2 to 3 years 78,693,146.00 31.82 7,869,314.60 78,693,146.00 31.94 7,869,314.60
3 to 4 year 124,496,458.54 50.35 24,893,391.71 124,437,458.54 50.51 24,887,491.71
4 to 5 years 10,166,939.34 4.11 3,050,081.80 10,166,939.34 4.13 3,050,081.80
5 years and more 213,489.00 0.09 106,744.50 213,489.00 0.09 106,744.50
Total 247,279,547.08 0.92 37,537,018.89 246,340,004.64 100.00 37,512,008.05
（3） Other receivables for which bad debt provision has been assessed individually
Other receivables that are individually significant and for which bad debt provision has been assessed individually
Bad Debt Proportion
Name Closing Balance Provision Reason
(%)
Hainan Pearl River
17,297,525.99 1,882,525.99 11% Estimated
Holding( Shanghai )Real Estate Co.,Ltd
Dingjia International Co., LTD 2,725,702.71 2,725,702.71 100% Irrecoverable
Hainan Enxin Industry Co., LTD 2,314,592.00 2,314,592.00 100% Irrecoverable
Hainan Zhongda Industrial Corporation 2,210,779.10 2,210,779.10 100% Irrecoverable
Dabao cement plant 1,901,383.56 1,901,383.56 100% Irrecoverable
Golden light industrial Corporation 1,752,100.00 1,752,100.00 100% Irrecoverable
Shenzhen city Zhuce Real estate company 1,550,278.23 1,550,278.23 100% Irrecoverable
Shenzhen State Development& Investment
1,409,934.28 1,409,934.28 100% Irrecoverable
Corporation
Haikou city industrial development trading
1,392,430.00 1,392,430.00 100% Irrecoverable
company
Bad Debt Proportion
Name Closing Balance Reason
Provision (%)
Xinhua dawn Airline decoration company 1,208,804.70 1,208,804.70 100% Irrecoverable
Hainan deepsea Real Estate Co., LTD 1,029,850.32 1,029,850.32 100% Irrecoverable
HainanYangtz River travel industry 1,000,000.00 1,000,000.00 100% Irrecoverable
Sanya city land and property management
1,000,000.00 1,000,000.00 100% Irrecoverable
Authority
Total 36,793,380.89 21,378,380.89
Other receivables that are individually insignificant and for which bad debt provision has been assessed individually
Bad Debt
Name Closing Balance Provision Proportion (%) Reason
Hainan Development Bank 440,000.00 440,000.00 100 Irrecoverable
Hainan Sanli Industrial and Trading
283,478.62 283,478.62 100 Irrecoverable
Company
Others 3,614,680.31 3,247,037.01 89.83 Estimated
Total 4,338,158.93 3,970,515.63
（4） Bad debt provision in this year is RMB19,580.14.
（5） As at 30 June 2015, the top 5 other receivables by customer are summariesd as below:
Proportion of
Relationship
total Bad Debt
Name with Owned amount Ages
Other Provision
the company
receivable (%)
Mudanjiang Pearl River Wanjia Tourism
Related Party 247,810,841.55 Within 3years 30.87
Investment Development Company
Sanya Wanjia Hotel
Unrelated Party 128,027,245.51 Within 5years 15.95
Management Co., Ltd.
Public Investment Co., Ltd Related Party 100,400,000.00 2-4years 12.51 16,380,000.00
Beijing Kangtai Xingye Investment Co.,Ltd Unrelated Party 100,000,000.00 2-4years 12.46 16,000,000.00
Hubei Pearl River Real Estate Development
Related Party 94,168,132.42 Within 1year 11.73
Co., Ltd.
Total 670,406,219.48 32,380,000.00
3. Long-term equity investments
（1） Categories of Long-term equity investments
Item 1 Jan- 2015 Increases Decreases 30 Jun- 2015
Investments in subsidiaries 299,420,000.00 299,420,000.00
Investments in joint venture
Investment in associates 34,464,905.62 125,414.24 34,339,491.38
Subtotal 333,884,905.62 125,414.24 333,759,491.38
less：provision for impairment of long-term equity investments 40,000,000.00 40,000,000.00
Total 293,884,905.62 293,759,491.38
（2） Subsidiaries
Original Provision Closing balance on
Name investment 1 Jan- 2015 Increases Decreases 30 Jun- 2015 for provision
cost impairment
Hainan Pearl River
Properties and Hotels 4,900,000.00 4,900,000.00 4,900,000.00
Management Co., Ltd.
Original Provision Closing balance on
Name investment 1 Jan- 2015 Increases Decreases 30 Jun- 2015 for provision
cost impairment
Hubei Pearl River Real Estate Development Co., Ltd. 64,420,000.00 64,420,000.00 64,420,000.00
Sanya Wanjia Hotel
120,000,000.00 120,000,000.00 120,000,000.00
Management Co., Ltd.
Hainan Pearl River
40,000,000.00 40,000,000.00 40,000,000.00 40,000,000.00
Holding( Shanghai )Real Estate Co.,Ltd.
Mudanjiang Pearl River Wanjia Tourism Investment Development
60,000,000.00 60,000,000.00 60,000,000.00
Company
Beijing Jiubo Culture Development Co., Ltd. 5,000,000.00 5,000,000.00 5,000,000.00
Hebei Zhengshi Qinghui Real Estate Development Co., Ltd. 5,100,000.00 5,100,000.00 5,100,000.00
Total 299,420,000.00 299,420,000.00 299,420,000.00 40,000,000.00
（3） Associates
Movement
Adjustment on
Name 1 Jan- 2015 Investment income
Increases in Decreases in other
investment investment
recognized under
comprehensive
equity method
income
Sanya Wanjia Industrial Co. Ltd 34,464,905.62 -125,414.24
Total 34,464,905.62 -125,414.24
Continued:
Movement
Closing
Name Announcing 30 Jun- 2015 balance on
other equity
cash dividends Provision Others provision
changes
or profits
Sanya Wanjia Industrial Co. Ltd 34,339,491.38
Total 34,339,491.38
4. Operating income and operating costs
(1) Operating income
Items Jan.–Jun, 2015 Jan.–Jun, 2014
Other operating business income 512,071.26 508,457.76
Total 512,071.26 508,457.76
(2) Operating costs
Items Jan.–Jun, 2015 Jan.–Jun, 2014
Other operating business costs 177,796.80 177,796.80
Total 177,796.80 177,796.80
5. Investment income
Items Jan.–Jun, 2015 Jan.–Jun, 2014
Long-term equity investment income accounted by Cost Method
Long-term equity investment income accounted by Equity Method -125,414.24 -346,642.48
Items Jan.–Jun, 2015 Jan.–Jun, 2014
Investment income accounted by held for trading financial assets
Investment income accounted by available for sale financial assets 930,000.00
Investment income of disposal held for trading financial assets
Investment income of disposal available for sale financial assets 124,342,755.05
Other
Total 124,217,340.81 583,357.52
IV.Supplementary information
1. Breakdown of non-recurring profit or loss
Items Jan.–Jun, 2015
Profit and loss on disposal of non-current assets 12,073.95
Fund occupation fee from non-financial enterprises included in the current profit and loss 632,253.44
In addition to the normal operation of the same business related effective hedging business, holding the fair
value of financial assets transaction, transaction financial liabilities generated by the movement of the profit
124,342,755.05
and loss, and the disposal of trading financial assets, financial liabilities held for trading and available for sale
financial assets to obtain investment income
Investment income from disposal of available-for-sale financial assets
Others non-operating income and expenses excluded as above 301,624.29
Other non-operating income and costs
Tax effects -659.95
Effects attributable to minority interests (after tax) 428.52
Total 125,288,938.16
2. Return on equity (ROE) and earnings per share ("EPS")
Weighted average return on Earnings per share
net assets (%) Basic earnings per share Diluted earnings per share
Net profit attributable to ordinary
0.00 0.05 0.05
shareholders of the Company
Net profit after deduction of
non-recurring profits or losses
0.00 -0.24 -0.24
attributable to ordinary shareholders
of the Company
3. Abnormal financial statements items ("F/S items") and description of reasons
（1） Balance sheet
Rate of
Item 30 Jun- 2015 1 Jan- 2015 Explanations
change
Caused by the cash acquired from the borrowing of this period and
136,016,986.29 39.64% the increased of the house pre-sale amount of the subsidiary Hubei
97,404,192.62
Money funds 珠江
Other operating The purpose of financial products in this period by the main
3,000,000.00 100.00%
assets - subsidiary Shanghai Real Estate Company
Financial assets
11,411,309.90 184,158,809.90 -93.80%
available for sales Disposal of southwest securities in this period
The payment of engineering costs in this period by the subsidiary
22,096,077.65 -62.28%
Accounts payable 58,578,620.48 Hebei 珠江
Provision of the relevant tax due to the disposal of southwest
7,662,634.49 66.46%
Tax payable 4,603,277.48 securities in this period
Non-operating Long-term borrowing in this period which will be expired within
386,098,907.05 249,471,973.56 54.77%
liability due within one year
Rate of
Item 30 Jun- 2015 1 Jan- 2015 Explanations
change
one year
Long-term
453,866,666.68 327,303,532.52 38.67%
borrowing The increased in borrowing costs of the subsidiary Hebei 珠江
Deferred income tax Transfer of deferred income tax liability to investment income due
-97.09%
liability 674,902.10 23,187,756.33 to the disposal of southwest securities in this period
Other comprehensive Transfer of other comprehensive income to investment income due
125,127,595.63 -100.00%
income - to the disposal of southwest securities in this period
Minority
-81.69%
shareholders income 639,230.27 3,490,581.24 Loss of the subsidiary
（2） Income statement
Rate of
Item Jan.–Jun, 2015 Jan.–Jun, 2014 Explanations
change
Investment
31459.06% Disposal of southwest securities in this period
income 124,137,366.75 393,349.34
Reverse of the profit in this period to the deductible loss deferred income tax asset
11562.95%
Income tax fees 15,854,110.26 135,935.72 recognized in last year
Other
Transfer of other comprehensive income to investment income due to disposal of
comprehensive -125,127,595.6 -1459.95%
-8,021,250.00 southwest securities in this period
income 3
Net amount of
cash flow
Decrease in investment in this period in Phase III of Mei Lin Qing Cheng Project of
generated from -156,748,554.8 39.42%
-94,962,794.82 the subsidiary Hebei Pearl River
operating 1
activities
Net amount of
cash flow
generated from 319.23% Disposal of southwest securities investment in this period
131,679,709.58 -60,065,370.60
investment
activities
Net amount of
cash flow
generated from -99.19% Repayment of the borrowing in this period
1,895,878.91 233,443,894.66
financing
activities
Hainan Pearl River Holding Company Limited
29 August 2015
