HaiNan Pearl River Holdings Co., Ltd.
Abstract of Semi-annual Report 2016
1. Important notes
The 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 the Abstract on http://www.cninfo.com.cn, the website of the Shenzhen Stock Exchange or any other websites designated by
the CSRC.
The Abstract has been prepared in both Chinese and English. Should there be any discrepancies or misunderstandings between the two
versions, the Chinese version shall prevail.
Corporate profile
*ST Pearl River A, *ST
Stock name Stock code 000505, 200505
Pearl River B
Stock exchange Shenzhen Stock Exchange
Contact information Board Secretary Securities 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 shareholder changes
(1) Financial highlights
Whether the Company performs any retroactive adjustments to or restatements of its accounting data of last year due to change in accounting
policies or correction of accounting errors
□ Yes √ No
Reporting Period Same period of last year +/- (%)
Operating revenues (RMB) 149,032,528.40 136,117,829.19 9.49%
Net profit attributable to shareholders of
-47,370,594.88 21,492,625.03 -320.40%
the Company (RMB)
Net profit attributable to shareholders of
the Company excluding exceptional -85,764,505.67 -103,796,313.13 17.37%
profit and loss (RMB)
Net cash flows from operating activities
161,345,565.54 -94,962,794.82 269.90%
(RMB)
Basic earnings per share (RMB/share) -0.11 0.05 -320.00%
Diluted earnings per share (RMB/share) -0.11 0.05 -320.00%
Weighted average return on equity (%) 0.00% 0.00% 0.00%
As at the end of the
As at the end of last year +/- (%)
Reporting Period
Total assets (RMB) 1,790,195,248.41 1,714,444,000.65 4.42%
Net assets attributable to shareholders of
-264,507,464.03 -217,136,869.15 -21.82%
the Company (RMB)
(2) Shareholdings of the top 10 ordinary shareholders
Unit: share
Total number of ordinary
shareholders at the end of the 35,610
Reporting Period
Shareholdings of the top 10 ordinary shareholders
Number of Pledged or frozen shares
Name of Nature of Shareholdin Number of restricted ordinary
ordinary
shareholder shareholder g percentage shares held Status Number
shares held
Beijing Wanfa
Real Estate State-owned
26.36% 112,479,478
Development corporation
Co., Ltd.
Li Leon Zhan Foreign
2.63% 11,215,043
Wei individual
Yao Xiu Foreign
2.31% 9,850,128
Guang individual
Chongqing
International
Trust Co.,
Domestic
Ltd.—Yuxin
non-state-ow
Innovation 1.83% 7,827,463
ned
Advantage
corporation
No. 11
Assembled
Funds Trust
Domestic
Chen Huanan 0.66% 2,802,117
individual
Domestic
Xu Zhen 0.58% 2,462,300
individual
Beijing Shen
Zhou Mu
Investment
Domestic
Fund
non-state-ow
Management 0.55% 2,343,818
ned
Co.,
corporation
Ltd.—Hongy
an Shen Zhou
Mu Fund
Foreign
Yao Liyuan 0.47% 2,005,600
individual
Zhang Domestic
0.46% 1,949,250
Xiaoxia individual
Beijing Shen
Zhou Mu
Investment
Fund Domestic
Management non-state-ow
0.42% 1,795,300
Co., ned
Ltd.—Shangs corporation
han Shen
Zhou Mu No.
5 Securities
Investment
Fund
Among shareholders above, there exists no related-party relationship between the principal
shareholder and other shareholders of the Company. Nor they are parties with concerted action
Related or act-in-concert
as prescribed in the Information Disclosure Administrative Methods for Changes in
parties among the shareholders
Shareholding of Shareholders of Listed Companies. And it is unknown whether there is
above
related-party relationship among other shareholders and whether they are prescribed parties
with concerted action.
(3) Shareholdings of the top 10 preference shareholders
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(4) Change of the controlling shareholder or the actual controller
Change of the controlling shareholder in the Reporting Period
□ Applicable √ Not applicable
No such cases in the Reporting Period.
Change of the actual controller in the Reporting Period
□ Applicable √ Not applicable
No such cases in the Reporting Period.
3. Discussion and analysis by the management
In the first half of 2016, we carried out a series of plans to maintain our listed position. We initiated the
procedure for transferring equity interests of our hotel in Sanya, beefed up the construction and marketing
of our Meilin Qingcheng Phase III project in the Hubei Province, acquired the Huilong Shanzhuang real
estate project in Chengde, Hebei Province, and repaid the loans from Chongqing International Trust Co.,
Ltd. and the Bank of China. Meanwhile, all our subsidiaries worked hard to increase income and reduce
expenditure. However, due to the fact that these measures were still in progress, we have failed to turn
around for the first half of the year.
As at 30 June 2016, our unaudited total assets stood at RMB1.79 billion, and the unaudited net assets
attributable to our shareholders stood at RMB-263 million. For January-June 2016, we achieved operating
revenues of RMB149 million and net profit of RMB-46.61 million.
A. Operation review for the Reporting Period：
a. During the Reporting Period, the sales of Phase III of Hubei Meiling Qingcheng Project was quite well
that totally completed the sales area of 21,133 square meter with 210 sets of commercial residential
buildings and sales volume of RMB285.01 million. There were 33 underground parking spaces of Phase I
rented with the rental of RMB5.47 million. And the Company expected to realize the recognition plan of
the sales revenue at the year-begin of RMB750 million.
b. The business season of the Snow Town of the controlling shareholder, Mudanjiang Tourist
Development Group in 2016 was from January to March and since April, 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
RMB14.2779 million with the required revenues from transferring the subsidiary Longshi Zhujiang of
RMB38.1556 million and the net profits of RMB23.9142 million as well as realized the safety without
accidents work target in the aspects such as the staffs, vehicles, equipments facilities and fire fighting.
The operating income of Days Hotel and Suites Sanya Resort of the first half year in Y2016 was of
RMB12.3896 million with the gross margin of RMB1.6 million. Owing to the tourists resources
competition of the hotels in Sanya became fiercer and fiercer and the equipments as well as the facilities
of the hotel getting older and older, the Company had decided to transfer the hotel in whole.
c. Property management: up to the end of June, the management projects of the property company
involved with the areas such as Haikou, Qionghai, Wenchang, Lingao, Baoting, Sanya, Changsha, Wuhan,
Nanning, Zhengzhou and so on with 86 management projects, over 7.5 million square meter
comprehensive management area, of which there were 66 residential 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. The
property company realized the operating income of RMB117.1001 million of the first half year in Y2016,
with the operating cost of RMB117.1597 million, the sales tax of RMB11.5184 million and the realized
profits of RMB-0.1014 million.
d. For repaying the schuldenberg for Chongqing ITIC, the Board of Directors of the Company approved to
execute the public listing and transfer of the equities of Sanya Wanjia Hotel Management Co., Ltd. on 29
January 2016 and approved to sale three villa properties which attributed to the Company on 16 June 2016.
On 23 June 2016, the equity evaluation report received the verification from Beijing State Capital Office
with the equity evaluation value of RMB68.4 million. And the Company executed the preliminary listing
since 20 July 2016 in China Beijing Equity Exchange, of which the preliminary quotation had completed
at present with the listing procedures were being managing.The listing events of the Company were
expected to be completetd in the middle of September in 2016. If the equity transfer of Sanya Hotel and
the sales of three villas could be completed with the transfer procedures done before the year-end of 2016,
would increase the net profits and the net assets by RMB0.16 billion for the Company in Y2016.
e. 26 April 2016, the Board of Director of the Company approved transferring investment of the coal
logistics project of Mulin Town into purchase of Chengde Huilong Town project. Pearl River Holdings
and Zhonghe Investment Co., Ltd. in 2012 was unable to continue, due to the change of state policies to
the energy and significant change in the coal market, the Company through several negotiations with
Zhonghe Investment Co., Ltd., Zhonghe Investment Co., Ltd. agreed to transfer 60% of its holding of
100% equity of Chengde Dongda Property Development Co., Ltd. (Chengde Huilong Town project) to the
Company, and used to deduct the investment income to our Company. On 20 May 2016, the Company had
completed the purchase of 60% equity of Chengde Dongda Property Development Co., Ltd. The Company
will raise construction fund of the project together with the bank and financial institutions, and continued
to complete the construction of Huilong Town project. The property development project is expected to
bring continuous profits for recent three years.
f. From 3 May 2015, under the leading of Beijing State Capital Office, the substantial shareholder and
actual controller Beijing Xinxing Company and Beijing Grain Group started to conduct significant assets
recombination, the stock of the Company suspended since 3 May 2016. The significant assets
recombination including three transactions: significant asset replacement, purchase assets by issuing
shares and related mechanism of financing. Due to the head of Beijing Xinxing Property Development Co.,
Ltd. and Beijing Grain Group are all under the control of Beijing State Capital Office, the significant
assets recombination was related transaction. On 29 July 2016, the Board of the Company reviewed and
approved the preplan of recombination. At present, the audit, recognition of the evaluation of the relevant
assets and the reply to the SZSE were under processing.
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 √ Not applicable
No such cases in the Reporting Period.
(2) Explain any retroactive restatements due to correction of significant accounting errors in the Reporting Period
□ Applicable √ Not applicable
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 √ Not applicable
No such cases in the Reporting Period.
(4) Explanation of the Board of Directors and the Board of Supervisors concerning the “non-standard” auditor’s
report issued by the CPAs firm for the Reporting Period
□ Applicable √ Not applicable
Hainan Pearl River Holding Company Limited
Consolidated Balance Sheet
Unit：RMB
ASSETS Note(VII) 30 June 2016 31 December 2015
Current assets —— ——
Currency Funds 1 143,110,210.79 205,762,131.54
Provision of settlement fund
Funds lent
Financial assets at fair value through profit or loss
Derivative financial assets
Notes receivable
Accounts receivable 2 24,294,222.61 17,161,981.62
Advances to suppliers 3 174,617,724.95 108,236,943.90
Interest receivable
Dividends receivable 4 260,015.00 260,015.00
Other receivables 5 228,052,885.48 256,036,391.03
Buying back the sale of financial assets
Inventories 6 642,409,074.77 531,145,489.05
Reclassified to assets held for sale
Current portion of non-current assets
Other current assets 7 4,000,000.00
Total current assets 1,216,744,133.60 1,118,602,952.14
Non-current assets —— ——
Available-for-sale financial assets 8 11,411,309.90 11,411,309.90
Held-to-maturity investments
Long-term receivables
Long-term equity investments 9 35,049,837.38 35,284,761.64
Investment property 10 19,785,327.64 20,890,800.30
Fixed assets 11 391,923,929.89 409,326,778.05
Construction in progress 12 81,307,762.39 79,403,655.02
Construction materials 13 393,706.60 393,706.60
Fixed assets pending for disposal
Productive biological assets
Oil and gas assets
Intangible assets 14 28,608,452.96 29,519,153.74
Development disbursements
Goodwill
Long-term prepaid expenses 15 3,388,948.05 8,029,043.26
Deferred tax assets
Other non-current assets 17 1,581,840.00 1,581,840.00
Total non-current assets 573,451,114.81 595,841,048.51
Total assets 1,790,195,248.41 1,714,444,000.65
The accompanying notes form an integral part of the financial statements.
Legal representative: zhengqing Principal in charge of accounting: liyan Head of the accounting department:wuxiukun
Hainan Pearl River Holding Company Limited
Consolidated Balance Sheet
Unit：RMB
ASSETS Note(VII) 30 June 2016 31 December 2015
Current liabilities —— ——
Short-term borrowings
Financial liabilities at fair value through profit or loss
Derivative financial assets
Notes payable
Accounts payable 19 67,235,402.17 24,313,483.40
Advances from customers 20 754,711,163.32 428,054,670.19
Employee benefits payable 21 12,908,152.22 13,353,268.66
Taxes payable 22 -33,545,360.10 -5,255,663.63
Interest payable 23 212,107,203.95 178,429,980.05
Dividends payable 24 3,213,302.88 3,213,302.88
Other payables 25 546,272,136.93 561,278,959.68
Current portion of non-current liabilities 26 287,761,902.11 353,287,364.69
Other current liabilities
Total current liabilities 1,850,663,903.48 1,556,675,365.92
Non-current liabilities —— ——
Long-term borrowings 27 215,500,000.00 390,333,333.34
Bonds payable
Long-term payable
Grants payable
Provisions
Deferred income
Deferred tax liabilities 16 613,562.37 629,227.79
Other non-current liabilities
Total non-current liabilities 216,113,562.37 390,962,561.13
Total liabilities 2,066,777,465.85 1,947,637,927.05
Equity —— ——
Share capital 28 426,745,404.00 426,745,404.00
Capital reserve 29 334,690,837.45 334,690,837.45
Less:Treasury Share
Other comprehensive income 0.00
Surplus reserve 30 109,487,064.39 109,487,064.39
Provision for general risks
Retained earnings 31 -1,135,430,769.87 -1,088,060,174.99
Equity attributable to parent company -264,507,464.03 -217,136,869.15
*Minority interests -12,074,753.41 -16,057,057.25
Total owner's equity -276,582,217.44 -233,193,926.40
Total liabilities and owner's equity 1,790,195,248.41 1,714,444,000.65
The accompanying notes form an integral part of the financial statements.
Legal representative: zhengqing Principal in charge of accounting: liyan Head of the accounting department:wuxiukun
Hainan Pearl River Holding Company Limited
Consolidated Income Statement
Unit：RMB
ITEM Note(VII) Jan.-Jun. 2016 Jan.-Jun. 2015
I. Revenue 149,032,528.40 136,117,829.19
Including：Operating income 32 149,032,528.40 136,117,829.19
II.Total cost 237,320,083.66 226,073,509.86
Including：Operating cost 32 122,029,925.99 100,737,341.87
Interest expenses
Handling charges and commissions expenses
Business taxes and surcharges 33 10,405,923.57 7,631,999.47
Selling expenses 34 8,871,001.02 2,806,121.97
Administrative expenses 35 45,226,141.70 48,527,378.52
Including:research and development expenses
Finance expenses 36 48,791,814.72 65,550,902.11
Including: Interest expenses
Interest income
Net loss on foreign exchange
Impairment losses of assets 37 1,995,276.66 819,765.92
Others
Add：Gain on fair-value changes（“-”for loss） -
Investment income（“-”for loss） 38 37,928,898.30 124,137,366.75
Including：investment income from associates and joint ventures -234,924.26 -205,388.30
Gain or loss on foreign exchange ( "-"for loss)
III.Operating profits（“－”for loss） -50,358,656.96 34,181,686.08
Add：Non-operating income 39 2,651,492.34 508,533.86
Including：Gains on disposal of non-current assets 2,555,707.19 12,073.95
Gains from exchange of non-monetary assets
Government grants
Gains from debt restructuring
Less：Non-operating expenses 40 3,278,378.77 194,835.62
Including：Losses on disposal of non-current assets 131,916.10
Losses from exchange of non-monetary assets
Losses from debt restructuring
IV.Profit before tax（“－”for loss） -50,985,543.39 34,495,384.32
Less：Income tax expenses 41 183,697.96 15,854,110.26
V.Net profit（“－”for loss） -51,169,241.35 18,641,274.06
Net profit attributable to owners of the Company -47,370,594.88 21,492,625.03
*Profit/loss attributable to minority shareholders -3,798,646.47 -2,851,350.97
VI.Post-tax net value of other comprehensive income - -125,127,595.63
Post-tax net value of other comprehensive income attributable to owners of the Company - -125,127,595.63
(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 - -125,127,595.63
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 0.00 -125,127,595.63
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: -51,169,241.35 -106,486,321.57
Owners of the Company -47,370,594.88 -103,634,970.60
*Minority shareholders -3,798,646.47 -2,851,350.97
VIII.Earnings per share
i.Basic earnings per share -0.11 0.05
ii.Diluted earnings per share -0.11 0.05
The accompanying notes form an integral part of the financial statements.
Legal representative: zhengqing Principal in charge of accounting: liyan Head of the accounting department:wuxiukun
Hainan Pearl River Holding Company Limited
Consolidated Cash Flow Statement
Unit：RMB
ITEM Note(VII) Jan.-Jun. 2016 Jan.-Jun. 2015
Ⅰ.Cash flows from operating activities： —— ——
Cash received from sales and services 479,504,679.10 131,025,358.54
Tax refunds
Net cash from other operating activities 42 40,079,903.61 23,284,389.75
Sub-total of cash inflows from operating activities 519,584,582.71 154,309,748.29
Cash paid for goods and services 187,434,195.91 108,549,739.93
Cash paid to and on behalf of employees 101,699,085.20 84,422,863.01
Payment of taxes and surcharges 45,957,728.39 13,664,710.40
Other cash payments relating to operating activities 42 23,148,007.67 42,635,229.77
Sub-total of cash outflows from operating activities 358,239,017.17 249,272,543.11
Net cash flows from operating activities 161,345,565.54 -94,962,794.82
Ⅱ.Cash flows frow investing activities： —— ——
Cash receipts from withdraw of investments 12,000,000.00 139,371,794.42
Cash received from investment income 8,271.82 -
Net cash from disposal of fixed assets, intangible assets and other long-term
4,849,613.03 439,810.00
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 16,857,884.85 139,811,604.42
Cash paid for fixed assets, intangible assets and other long-term assets 3,287,207.48 5,131,894.84
Cash payments for investments 8,000,000.00 3,000,000.00
Net cash paid for acquiring subsidiaries and other business units
Net cash used in other investing activities 42 123,352.41 -
Sub-total of cash outflows from investing activities 11,410,559.89 8,131,894.84
Net cash flows from investing activities 5,447,324.96 131,679,709.58
Ⅲ.Cash flows from financing activities.Cash flows from financing activities： —— ——
Cash proceeds from investments by others
Including：cash received by subsidiaries from minority shareholders' investment
Cash received from borrowings 43,968,657.29 380,748,000.00
Cash received from issuance of bonds
Cash receipts related to other financing activities
Sub-total of cash inflows from financing activities 43,968,657.29 380,748,000.00
Cash repayments for debts 254,610,856.00 327,745,062.26
Cash payments for distribution of dividends, profit and interest expenses 14,499,908.50 39,602,363.55
Including: dividends or profit paid by subsidiaries to minority shareholders
Other cash payments relating to financing activities 42 4,302,704.04 11,504,695.28
Sub-total of cash outflows from financing activities 273,413,468.54 378,852,121.09
Net cash flows from financing activities -229,444,811.25 1,895,878.91
Ⅳ.Effect of foreign exchange rate changes on cash and cash equivalents - -
Ⅴ.Net increase in cash and cash equivalents -62,651,920.75 38,612,793.67
Add: beginning balance of cash and cash equivalents 205,762,131.54 97,404,192.62
Ⅵ. Ending balance of cash and cash equivalents 143,110,210.79 136,016,986.29
The accompanying notes form an integral part of the financial statements.
Legal representative: zhengqing Principal in charge of accounting: liyan Head of the accounting department:wuxiukun
Hainan Pearl River Holding Company Limited
Consolidated Statement of Changes in Owners’ Equity
Unit：RMB
Jan.-Jun.2016
Attributable to the parent company
ITEM Note(VII) Provision Minority Total owner's
Other Other Speciali
Less:treasu for Retained interests equity
Paid-in capital equity Capital reserve comprehensive zed Surplus reserve Others Sub-total
ry shares general earnings
instruments income reserve
risks
1 2 3 4 5 6 7 8 9 10 11 12 13
I.Closing balance of the preceding year - - - - 109,487,064.39 - - -233,193,926.40
426,745,404.00 334,690,837.45 -1,088,060,174.99 -217,136,869.15 -16,057,057.25
Add:Changes in accounting policies — — — — — — — — — — — — —
Corrections of errors in Prior Period — — — — — — — — — — — — —
Others - - - - - - - - - - - - -
II.Opening balance of the current year - - - - 109,487,064.39 - - -233,193,926.40
426,745,404.00 334,690,837.45 -1,088,060,174.99 -217,136,869.15 -16,057,057.25
III.Changes for the year - - - - - - - - -47,370,594.88 - 3,982,303.84 -43,388,291.04
-47,370,594.88
(I) Total comprehensive income - - - - - - -47,370,594.88 - -51,169,241.35
-47,370,594.88 -3,798,646.47
(II) Capital contribution and withdrawals by owners - - - - - - - - - - - 7,780,950.31 7,780,950.31
i.Capital contributions from owners - - - - - - - - - - - -
ii.Capital contribute from other equity instrument
- - - - - - - - - - - - -
holders
iii.Share-based payment recorded in owner's
- - - - - - - - - - - - -
equity
iv.Others - - - - - - - - - - 7,780,950.31 7,780,950.31
( 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 - - - - 109,487,064.39 - - -276,582,217.44
426,745,404.00 334,690,837.45 -1,135,430,769.87 -264,507,464.03 -12,074,753.41
The accompanying notes form an integral part of the financial statements.
Legal representative: zhengqing Principal in charge of accounting: liyan Head of the accounting department:wuxiukun
Hainan Pearl River Holding Company Limited
Consolidated Statement of Changes in Owners’ Equity
Unit：RMB
Jan.-Jun.2015
Attributable to the parent company
ITEM Note(VII) Provision Minority Total owner's
Other Other Speciali
Less:treasu for Retained interests equity
Paid-in capital equity Capital reserve comprehensive zed Surplus reserve Others Sub-total
ry shares general earnings
instruments income reserve
risks
1 2 3 4 5 6 7 8 9 10 11 12 13
I.Closing balance of the preceding year 426,745,404.00 334,690,837.45 109,487,064.39 -980,486,431.07 15,564,470.40 3,490,581.24 19,055,051.64
125,127,595.63
Add:Changes in accounting policies - - - - - - - - - -
Corrections of errors in Prior Period - - - - - - - - - - - - -
Others - - - - - - - - - - - - -
II.Opening balance of the current year - - - 109,487,064.39 - -980,486,431.07 - 15,564,470.40 3,490,581.24 19,055,051.64
426,745,404.00 334,690,837.45 125,127,595.63
III.Changes for the year - - - - - - - 21,492,625.03 - -106,486,321.57
-125,127,595.63 -103,634,970.60 -2,851,350.97
(I) Total comprehensive income - - - - - - 21,492,625.03 - -106,486,321.57
-125,127,595.63 -103,634,970.60 -2,851,350.97
(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 - - - - 109,487,064.39 - -958,993,806.04 - 639,230.27 -87,431,269.93
426,745,404.00 334,690,837.45 -88,070,500.20
The accompanying notes form an integral part of the financial statements.
Legal representative: zhengqing Principal in charge of accounting: liyan Head of the accounting department:wuxiukun
Hainan Pearl River Holding Company Limited
Balance Sheet of the Company
Unit：RMB
ASSETS Note(XVII) 30 June 2016 31 December 2015
Current assets： —— ——
Cash and cash equivalent 614,094.31 479,720.71
Provision of settlement fund
Funds lent
Financial assets at fair value through profit or loss
Derivative financial assets
Notes receivable
Accounts receivable 1 1,746,148.46 1,701,828.46
Advances to suppliers 130,530,000.00 50,277,830.00
Interest receivable
Dividends receivable 260,015.00 260,015.00
Other receivables 2 691,973,462.93 684,683,017.06
Buying back the sale of financial assets
Inventories 4,824,035.45 4,824,035.45
Reclassified to assets held for sale
Current portion of non-current assets
Other current assets
Total current assets 829,947,756.15
742,226,446.68
Non-current assets： —— ——
Available-for-sale financial assets 11,411,309.90 11,411,309.90
Held-to-maturity investments
Long-term receivables
Long-term equity investments 3 293,072,507.30 293,231,762.82
Investment property 6,534,885.83 6,686,104.13
Fixed assets 11,279,913.56 13,311,762.29
Construction in progress
Construction materials
Fixed assets pending for disposal
Productive biological assets
Oil and gas assets
Intangible assets 1,386,217.86 1,410,049.68
Development disbursements
Goodwill
Long-term prepaid expenses 335,622.00 604,524.68
Deferred tax assets
Other non-current assets
Total non-current assets 324,020,456.45
326,655,513.50
Total assets 1,153,968,212.60 1,068,881,960.18
The accompanying notes form an integral part of the financial statements.
Legal representative: zhengqing Principal in charge of accounting: liyan Head of the accounting department:wuxiukun
Hainan Pearl River Holding Company Limited
Balance Sheet of the Company(Continued)
Unit：RMB
ASSETS Note(XVII) 30 June 2016 31 December 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 538,896.41 38,896.41
Financial assets sold for repurchase
Employee benefits payable 1,102,872.24 1,050,861.22
Including:Accrued payroll 1,102,872.24 1,050,861.22
Welfare benefits payable
Including:Staff and workers' bonus and selfare
Taxes and surcharges payable 10,387,085.61 7,576,662.32
Including:Taxes payable 10,387,085.61 7,576,662.32
Interest payable 158,942,005.70 126,077,364.57
Dividends payable 3,213,302.88 3,213,302.88
Other payables 605,653,472.85 430,555,824.81
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 196,805,306.92 272,856,962.92
Other current liabilities
Total current liabilities 979,125,892.31 843,852,824.83
Non-current liabilities： —— ——
Long-term borrowings
Bonds payable
Long-term payable
Grants payable
Provisions
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities - -
Total liabilities 979,125,892.31 843,852,824.83
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
Surplus reserve 109,487,064.39 109,487,064.39
Provision for general risks
Retained earnings -698,666,644.62 -648,479,829.56
Total owner's equity 174,842,320.29 225,029,135.35
Total liabilities and owner's equity 1,153,968,212.60 1,068,881,960.18
The accompanying notes form an integral part of the financial statements.
Legal representative: zhengqing Principal in charge of accounting: liyan Head of the accounting department:wuxiukun
Hainan Pearl River Holding Company Limited
Income Statement of the Company
Unit：RMB
ITEM Note(XVII) Jan.-Jun. 2016 Jan.-Jun. 2015
I. Revenue 620,935.59 512,071.26
Including：Operating income 4 620,935.59 512,071.26
II.Total cost 51,302,567.04 55,982,552.69
Including：Operating cost 4 173,367.05 177,796.80
Business taxes and surcharges 4,203,229.46 21,956.02
Selling expenses
Administrative expenses 8,249,999.98 8,057,788.45
Including:research and development expenses
Finance expenses 38,649,091.37 47,714,085.92
Including: Interest expenses
Interest income
Net loss on foreign exchange
Impairment losses of assets 26,879.18 10,925.50
Others
Add：Gain on fair-value changes（“-”for loss）
Investment income（“-”for loss） 5 -159,255.52 124,217,340.81
Including：Investment income from associates and joint ventures -159,255.52 -125,414.24
Gain or loss on foreign exchange ( "-"for loss)
III.Operating profits（“－”for loss） -50,840,886.97 68,746,859.38
Add：Non-operating income 2,456,114.61
Including：Gains on disposal of non-current assets 2,456,114.61
Gains from exchange of non-monetary assets
Government grants
Gains from debt restructuring
Less：Non-operating expenses 1,802,042.70 577.22
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） -50,186,815.06 68,746,282.16
Less：Income tax expenses 15,210,270.77
V.Net profit（“－”for loss） -50,186,815.06 53,536,011.39
VI.Post-tax net value of other comprehensive income - -125,127,595.63
(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 - -125,127,595.63
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
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 -50,186,815.06 -71,591,584.24
The accompanying notes form an integral part of the financial statements.
Legal representative: zhengqing Principal in charge of accounting: liyan Head of the accounting department:wuxiukun
Hainan Pearl River Holding Company Limited
Cash Flow Statement of the Company
Unit：RMB
ITEM Note(XVII) Jan.-Jun. 2016 Jan.-Jun. 2015
Ⅰ.Cash flows from operating activities： —— ——
Cash received from sales and services 12,455,200.00 1,269,936.85
Tax refunds
Net cash from other operating activities 136,609,030.88 152,644,738.55
Sub-total of cash inflows from operating activities 149,064,230.88 153,914,675.40
Cash paid for goods and services 76,485,200.00
Cash paid to and on behalf of employees 3,292,324.17 3,092,486.56
Payment of taxes and surcharges 2,107,925.47 258,008.24
Other cash payments relating to operating activities 6,410,947.28 55,872,045.25
Sub-total of cash outflows from operating activities 88,296,396.92 59,222,540.05
Net cash flows from operating activities 60,767,833.96 94,692,135.35
Ⅱ.Cash flows frow investing activities： —— ——
Cash receipts from withdraw of investments 8,000,000.00 139,371,794.42
Cash received from investment income
Net cash from disposal of fixed assets, intangible assets and other long-term assets 3,060,360.00
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 11,060,360.00 139,371,794.42
Cash paid for fixed assets, intangible assets and other long-term assets 26,549.00 6,199.00
Cash payments for investments 13,330,000.00 30,066,000.00
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 13,356,549.00 30,072,199.00
Net cash flows from investing activities -2,296,189.00 109,299,595.42
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 27,585,780.73 80,748,000.00
Cash received from issuance of bonds
Cash receipts related to other financing activities
Sub-total of cash inflows from financing activities 27,585,780.73 80,748,000.00
Cash repayments for debts 78,870,856.00 260,505,000.00
Cash payments for distribution of dividends, profit and interest expenses 6,875,492.05 18,880,311.44
Including: dividends or profit paid by subsidiaries to minority shareholders
Other cash payments relating to financing activities 176,704.04 5,338,995.28
Sub-total of cash outflows from financing activities 85,923,052.09 284,724,306.72
Net cash flows from financing activities -58,337,271.36 -203,976,306.72
Ⅳ.Effect of foreign exchange rate changes on cash and cash equivalents - -
Ⅴ.Net increase in cash and cash equivalents 134,373.60 15,424.05
Add: beginning balance of cash and cash equivalents 479,720.71 2,034,649.76
Ⅵ. Ending balance of cash and cash equivalents 614,094.31 2,050,073.81
The accompanying notes form an integral part of the financial statements.
Legal representative: zhengqing Principal in charge of accounting: liyan Head of the accounting department:wuxiukun
Hainan Pearl River Holding Company Limited
Statement of Changes in Owners’ Equity of the Company
Unit：RMB
Jan.-Jun.2016
ITEM Note(XVII) Other Provision
Paid-in capital Other equity Capital reserve Less:treasury comprehensive Specialized Surplus reserve for general Retained earnings Others Total owner's
instruments shares income reserve risks 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 - - - 109,487,064.39 - -648,479,829.56 - 225,029,135.35
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 - - - 109,487,064.39 - -648,479,829.56 - 225,029,135.35
III.Changes for the year - - - - - - - - -50,186,815.06 - -50,186,815.06
(I) Total comprehensive income - - - - 0.00 - - -50,186,815.06 - -50,186,815.06
(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 - - - 109,487,064.39 - -698,666,644.62 - 174,842,320.29
The accompanying notes form an integral part of the financial statements.
Head of the accounting department:
Legal representative:: zhengqing Principal in charge of accounting: yiyan wuxiukun
Hainan Pearl River Holding Company Limited
Statement of Changes in Owners’ Equity of the Company
Unit：RMB
Jan.-Jun.2016
ITEM Note(XVII) Other Provision
Paid-in capital Other equity Capital reserve Less:treasury comprehensive Specialized Surplus reserve for general Retained earnings Others Total owner's
instruments shares income reserve risks equity
1 2 3 4 5 6 7 8 9 10 11
I.Closing balance of the preceding year 426,745,404.00 337,276,496.52 125,127,595.63 109,487,064.39 -628,364,574.11 370,271,986.43
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 - 125,127,595.63 - 109,487,064.39 - -628,364,574.11 - 370,271,986.43
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 - - - - - - - - - - -
IV. Closing balance of the year 426,745,404.00 - 337,276,496.52 - - - 109,487,064.39 - -574,828,562.72 - 298,680,402.19
The accompanying notes form an integral part of the financial statements.
Head of the accounting department:
Legal representative: zhengqing Principal in charge of accounting: liyan wuxiukun
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
I． General information
Hainan Pearl River Holding Company Limited, referred to as ‘the Company’ or ‘Pearl River
Holding’, grew out of the lawful re-registration by the original Hainan Pearl River Industry
Company Limited on January 11 1992. The re-registration was based on the document of Qiong
Fu Ban [1992] No.1 issued by the General Office of Hainan People’s Government and City
Management Office Qiong Yin [1992] No. 6 issued by the People’s Bank of Hainan province. By
the time when the re-registration took place, the Company issued a total amount of 81,880,000
shares, among which 60,793,600 shares were folded from the predecessor’s net assets while the
rest amount, 21,086,400 shares, were newly issued and were listed on Shenzhen Stock Exchange
according to the document of securities administration office [1992] No. 83 issued by the People's
Bank of China in December 1992. The parent company of the Pearl River Holding, the
Guangjiang Industrial Company held the amount of 36,393,600 shares in 1992, equivalent to a
shareholding ratio of 44.45%. The business license registration number is 20128455-6 and the
company is defined as belonging to the real estate industry.
On 25th March 1993, approved by the Hainan joint-stock system pilot leading group office with
the supporting document of Qiong joint-stock office [1993] No.028 and the Shenzhen special
economic zone branch of the People’s Bank of China with the corresponding document of Shen
People’s Bank Fu [1993] No.099, the company increased its share capital by stock-for stock: five
new shares for every ten shares held plus two freely delivered new shares. As a result, the share
capital increased to 139,196,000 shares, of which the shareholder, Guangzhou Pearl River
Industrial Company occupied 48,969,120 shares, holding an equity stake of 35.18%.
In 1994, the equity capital was raised to the amount of 278,392,000 shares through delivering 10
new free shares for every 10 shares held. Guangzhou Pearl River Industrial Company occupied
97,938,240 shares, holding an equity stake of 35.18%.
In 1995, based on the approval stated at the document of Shenzhen BanFu [1995] No. 45 and
Shenzhen BanFu [1995] No.12, the company issued 50 million B shares. An incremental share
capital was thus followed based on the fact that every 1.5 new shares were generated for every ten
B shares, resulting in the amount of 377,650,800 shares outstanding in total. Guangzhou
Pearl River Industrial Company occupied 112,628,876 shares, holding an equity stake of 29.82%.
In 1999, 112,628,976 shares that were held by the Guangzhou Pearl River Industrial Group Co.,
Company were transferred to Beijing Wanfa Real Estate Development Company. Consequently,
Beijing Wanfa Real Estate Development Company became the first majority shareholder, holding
the amount of 112,628,976 shares, which accounts for 29.82% of the total outstanding shares of
the company.
On 10th January 2000, with the Business License for Legal Person issued by the Hainan
Administrative Bureau for Industry and Commerce and the registration number 4600001006830
obtained, the name of the company was formally changed to Hainan Pearl River Holding
Company Limited.
August 17, 2006, with the implementation of equity division reform, an incremental of share
capital to the total amount of 49.094604 million shares took place since additional shares were
delivered to all shareholders based on a 10 ： 1.3 （ 1.3 free new shares for every 10 held ）
distribution regime. The total amount of shares outstanding was thus increased to 426,745,404
shares with the Wanfa Real Estate Development Company occupying 107,993,698 shares, taking
Notes on the Financial Statements Page 1
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
up the ownership percentage of 25.31%. In 2007 and 2009, non-circulation stock shareholders
paid back consideration for reform of the shareholder structure; the corresponding value was
respectively 3,289,780 and 1,196,000 shares of stock. Beijing Wanfa Real Estate Development
Company held an amount of 112,479,478 shares at the end of 2009, which was equivalent to an
equity stake of 26.36%. In 2010, the controlling shareholder Beijing Wanfa Real Estate
Development Stock Limited Company changed its name to Beijing Wanfa Real Estate
Development Limited Liability Company. At the end of 2011, this dominant shareholder held an
amount of 112,479,478 shares, equivalent to an ownership percentage of 26.36%.
Registered capital: RMB 426,745,400 Yuan
The business license number: 4600001006830
Office address: 29/F., Dihao Building, Pearl River Plaza, Binhai Avenue, Haikou, Hainan, the
PRC.
Corporate representative: Zheng Qing
The operation scope: Industrial investment, tropical farming, aquaculture, real estate development
and management, hotel investment and management, material supply, construction equipment
purchasing, leasing, hardware, chemical, trade of household items, decoration, vehicle parking,
and high-tech investment projects, investment in environmental protection projects, investment
advice. The company mainly engaged in real estate development and property management, which
belong to real estate aspect.
The Company's basic organizational structure: General meeting of shareholders is the highest
organ of power. Board of directors is the executing agency. Supervisory board is the Company's
internal auditing agency. General Manager is responsible for the Company's daily operational
management.
There are General Manager Office, Securities Department, and Tourism Real Estate Department,
Financial Department, Management Department, Auditing Department and others in the Company.
II． Preparation basis of simulated financial statement
Preparation of the financial statements is based on going concern postulate. Recognition and
measurement comply with actual transactions or events, and the Company prepares financial
statements on these bases.
III． Accounting policies, accounting estimates and error correction of previous years
1. Announcement about compliance with Accounting Standards for Business Enterprises
The Company’s financial statements are prepared in accordance with the requirements of the
Accounting Standards for Business Enterprises, and they fairly and completely present the
financial position, operation results, cash flow and other relevant information of the Company.
2. Accounting year
Accounting year of the Group is the calendar year from January 1 to December 31. This report
covers the period from January 1, 2016 to June 30, 2016.
Notes on the Financial Statements Page 2
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
3. Reporting currency
The Company’s reporting and presentation currency is Renminbi (“RMB”).
4. Business combinations
5.1. Where a business combination achieved in stages, such multiple transactions accounted as a
package deal if one or more following conditions are satisfied:
i. such transactions made simultaneously or after consider each other's effect;
ii. only such transactions made in whole,a complete commercial result achieved;
iii. one transactions made depend upon at least one other transaction;
iv. one transactions is not commercial invidually,but when consider with other
transactions,it is commercial.
5.2. Business combinations involving enterprises under common control
（1）separate financial statement
The consideration is the cash given, non-montary assets transferred,liabilities incurred or assumed,
and equity securities issued by the acquirer in exchange for control of the acquiree.The initial cost
of the long-term equity investment is the share of the consolidated financial statements, at the
acquisition date, of ultimate controlling parties’s net assets.The difference between the initial cost
of the long-term equity investment obtained and the consideration paid for the combination is
adjusted to the share premium in capital reserve. If the share premium is not sufficient to absorb
the difference, any excess shall be adjusted against retained earnings. If there is contingent
consideration and need to recognize contingent assets or liabilities, the difference between
amounts of the contingent assets or liabilities and the subsequent settlement price is adjusted to the
share premium in capital reserve. If the share premium is not sufficient to absorb the difference,
any excess shall be adjusted against retained earnings.
Where a business combination involving enterprises under common control is achieved in stages
that involve multiple transactions, if such transaction is a package deal,the all transactions are
accounted as a package deal to obtain control power. If not, at the acquisition date, the difference
between the initial cost of the long-term equity investment and the aggregate of the carrying
amount of the long-term equity investment held before acquisition date and the new consideration
paied in order to achieve futher equity is adjusted to the share premium in capital reserve. If the
share premium is not sufficient to absorb the difference, any excess shall be adjusted against
retained earnings. As for the other comprehensive income relating to the equity held in the
acquiree before the acquisition date are not accounted untill dispose such investment.when
disposed, adopt the basis,which is same to investee dispose related assets or liabilities,to
accounted. The other comprehensive income recognized on the changes of other owner’s equity
except for net profit, other comprehensive income and dividend declared are not accounted untill
transferred to investment income when dispose such investment.
Costs directly attributable to the combination are included in profit or loss in the period in which
they are incurred. Transaction costs associated with the issue of equity for the business
combination are adjusted to the share premium in capital reserve. If the share premium is not
sufficient to absorb the difference, any excess shall be successively adjusted against surplus
reserve and retained earnings.
Transaction costs associated with the issue of debt securities for the business combination are
included in the initially recognized amounts of the debt securities.
Notes on the Financial Statements Page 3
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
If the combined parties praparied consolidated financial statements, the initial cost of the
long-term equity investment is determined on the basis of owner’s equity attributed to parent
company.
（2）consolidated financial statements
The assets and liabilities obtained by the absorbing party in a business combination are measured
at the carrying amount.
Where a business combination involving enterprises under common control is achieved in stages
that involve multiple transactions, if such transaction is a package deal,the all transactions are
accounted as one tansaction to obtain control power.
If not, the long-term equity investment held by absorbing party before acquisition date and the
profit or loss, other comprehensive income and other equity changes recognized from the later of
the acquisition date and the date on which absorbing party or combined party ultimately controlled
by same party to combining date offset beginning retained earnings of comparative financial
statements and current P/L respectively.
Where the accounting policy adopted by the combined party is different from that adopted by the
combining party, the combining party shall, according to accounting policy it adopts, adjust the
relevant items in the financial statements of the absorbing party, and shall, pursuant to the present
Standard, recognize them on the basis of such adjustment.
5.3. Business combinations not involving enterprises under common control
The cost of combination is the aggregate of the fair values, at the acquisition date, of the assets
given, liabilities incurred or assumed, and equity securities issued by the acquirer in exchange for
control of the acquiree.
The intermediary expenses incurred by the acquirer in respect of auditing, legal services, valuation
and consultancy services, etc. and other associated administrative expenses attributable to the
business combination are recognized in profit or loss when they are incurred. Transaction costs
associated with the issue of equity or debt securities for the business combination are included in
the initially recognised amounts of the equity or debt securities.
Where the cost of combination exceeds the acquirer's interest in the fair value of the acquiree's
identifiable net assets, the difference is treated as an asset and recognized as goodwill, which is
measured at cost on initial recognition. Where the cost of combination is less than the acquirer's
interest in the fair value of the acquiree's identifiable net assets, the acquirer firstly reassesses the
measurement of the fair values of the acquiree's identifiable assets, liabilities and contingent
liabilities and measurement of the cost of combination. If after that reassessment, the cost of
combination is still less than the acquirer's interest in the fair value of the acquiree's identifiable
net assets, the acquirer recognizes the remaining difference immediately in profit or loss for the
current period.
Where a business combination not involving enterprises under common control is achieved in
stages that involve multiple transactions, the cost of combination is the sum of the consideration
paid at the acquisition date and the fair value of the equity in the acquiree held before the
acquisition. The equity held in the acquiree before the acquisition date is remeasured at its fair
value at the acquisition date, with any difference between its fair value and its carrying amount
being recognized as investment income, and the other comprehensive income relating to the equity
held in the acquiree before the acquisition date being transferred to investment income.
Notes on the Financial Statements Page 4
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
5. Preparation of consolidated financial statements
The scope of consolidation in the consolidated financial statements is determined on the basis of
control. All subsidiaries(including separate entities controled parent company) should be included
in the consolidated financial statements.
In preparing the consolidated financial statements, where the accounting policies and the
accounting periods of the Company and subsidiaries are inconsistent, the financial statements of
the subsidiaries are adjusted in accordance with the accounting policies and the accounting period
of the Company.
The consolidated financial statements are prepared on the basis of the financial statements of the
Company and all of its subsidiaries.
All significant intra-group balances and transactions are eliminated on consolidation.
When the amount of loss for the period attributable to the minority shareholders of a subsidiary
exceeds the minority shareholders' portion of the opening balance of shareholders' equity of the
subsidiary, the excess amount is still allocated against minority interests.
For a subsidiary that is acquired in a business combination involving enterprises under common
control, it is included in the consolidated financial statements from the date when it, together with
the Company, comes under common control of the ultimate controlling party.
Their operating results and cash flows from the beginning of the current reporting period are
included in the consolidated income statement and consolidated statement of cash flows, as
appropriate.
For a subsidiary acquired through a business combination not involving enterprises under common
control, the operating results and cash flows from the acquisition date (the date when control is
obtained) are included in the consolidated income statement and consolidated statement of cash
flows, as appropriate, and no adjustment is made to the opening balances and comparative figures
in the consolidated financial statements.
For a subsidiary disposed of by the Company, the operating results and cash flows before the date
of disposal (the date when control is lost) are included in the consolidated income statement and
consolidated statement of cash flows, as appropriate.
When the company loses control over a subsidiary due to disposal of equity investment or other
reason, any retained interest is re-measured at its fair value at the date when control is lost. The
difference between (i) the aggregate of the consideration received on disposal and the fair value of
any retained interest and (ii) the share of the former subsidiary's net assets cumulatively calculated
from the acquisition date according to the original proportion of ownership interests is recognized
as investment income in the period in which control is lost. Other comprehensive income
associated with investment in the former subsidiary is reclassified to investment income in the
period in which control is lost.
6. Cash and Cash equivalents
Cash refers to cash on hand and demand deposits. “Cash equivalents” refer to short-term, highly
liquid investments that are readily convertible to known amounts of cash and which are subject to
an insignificant risk on change in value.
Notes on the Financial Statements Page 5
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
7. Foreign currency transactions
8.1. Transactions denominated in foreign currencies
A foreign currency transaction is recorded, on initial recognition, by applying the spot exchange
rate on the date of the transaction.
At the balance sheet date, foreign currency monetary items are translated into RMB using the spot
exchange rates at the balance sheet date. Exchange differences arising from the differences
between the spot exchange rates prevailing at the balance sheet date and those on initial
recognition or at the previous balance sheet date are recognised in profit or loss for the period,
except the exchange differences related to a specific-purpose borrowing denominated in foreign
currency that qualify for capitalisation are capitalised as part of the cost of the qualifying asset
during the capitalisation period.
Foreign currency non-monetary items measured at historical cost are translated to the amounts in
functional currency at the spot exchange rates on the dates of the transactions; the amounts in
functional currency remain unchanged.
Foreign currency non-monetary items measured at fair value are re-translated at the spot exchange
rate on the date the fair value is determined. Difference between the re-translated functional
currency amount and the original functional currency amount is treated as changes in fair value
including changes of exchange rate and is recognized in profit and loss or as other comprehensive
income included in capital reserve.The difference arising on available for sale non-monetary items
is recognized in other comprehensive income.
8.2. Translation of financial statements denominated in foreign currencies
For the purpose of preparing the consolidated financial statements, financial statements of a
foreign operation are translated from the foreign currency into RMB using the following method:
assets and liabilities on the balance sheet are translated at the spot exchange rate prevailing at the
balance sheet date; shareholders' equity items except for retained earnings are translated at the spot
exchange rates at the dates on which such items arose; all items in the income statement as well as
items reflecting the distribution of profits are translated at the spot exchange rates on the dates of
the transactions;The difference between the translated assets and the aggregate of liabilities and
shareholders' equity items is separately presented as the exchange differences arising on
translation of financial statements denominated in foreign currencies under the shareholders'
equity in the balance sheet.
On disposal of the Company's entire interest in a foreign operation , the Company transfers the
accumulated translation differences that relating to translation of the financial statements of that
foreign operation, presented in comprehensive income, to profit or loss in the period in which the
disposal occurs. As for part disposal ,the Company transfers the accumulated translation
differences that relating to translation of the financial statements to profit or loss in the period in
proportion to the weight of part disposal interest in a foreign operation.
8. Financial Instruments
Financial Instruments comprises financial assets,financial liabilities and equity instruments.
9.1. Classification of financial assets and financial liabilities
Financial instruments are classified into the following categories at initial recognition: financial
assets(or liabilities) at fair value through profit or loss, entrusted loans, receivables,
available-for-sale financial assets and held-to-maturity investments, other financial liabilities. The
classification of financial assets depends on not only commercial substance in contract but also the
Company’s intention and ability to hold the financial assets.
Notes on the Financial Statements Page 6
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
9.2. Recognition and measurement
（3）Financial assets(or liabilities) at fair value through profit or loss ("FVTPL")
Financial assets or financial liabilities at FVTPL include financial assets or financial liabilities
held for trading and those designated as at fair value through profit or loss.
A financial asset or financial liabilities is classified as held for trading if one of the following
conditions is satisfied:
(i) It has been acquired principally for the purpose of selling in the near term; or
(ii) On initial recognition it is part of a portfolio of identified financial instruments that the Group
manages together and there is objective evidence that the Company has a recent actual pattern
of short-term profit-taking; or
(iii) It is a derivative that is not designated and effective as a hedging instrument, or a financial
guarantee contract, or a derivative that is linked to and must be settled by delivery of an
unquoted equity instrument (without a quoted price in an active market) whose fair value
cannot be reliably measured.
A financial asset or financial liabilities may be designated as at FVTPL upon initial recognition
only when one of the following conditions is satisfied:
(i) Such designation eliminates or significantly reduces a measurement or recognition
inconsistency that would otherwise result from measuring assets (or liabilities)or recognizing
the gains or losses on them on different bases; or
(ii) The financial asset(or liabilities) forms part of a group of financial assets (or liabilities)or a
group of financial assets and financial liabilities, which is managed and its performance is
evaluated on a fair value basis, in accordance with the Company's documented risk
management or investment strategy, and information about the grouping is reported to key
management personnel on that basis;
(iii) Hybrid instruments associated with embedded derivatives,except for embedded derivatives
have not significant impact on cash flow of hybrid instrument ,or obviously embedded
derivatives should not be spilt from hybrid instrument.
(iv) Hybrid instruments associated with embedded derivatives,which are needed to split but not
measurend separately at initial acquisition date or at subsequent balance sheet date.
For financial assets and financial liabilities at FVTPL are initially measured at fair value, and
transaction costs are immediately recognized in profit or loss. Financial assets or financial
liabilities at FVTPL are subsequently measured at fair value. Any gains or losses arising from
changes in the fair value and any dividend or interest income earned on the financial assets are
recognized in profit or loss.
When dispose,the difference between fair value and initial cost are rcognized in investment
income; besides,adjust gain or loss from fair-value changes.
（4）Receivables
Accounts receivable arising from sale of goods or rendering of services are initially recognised at
fair value of the contractual payments from the buyers or service recipients.
Notes on the Financial Statements Page 7
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
Receivables are classified into the following categories: receivable, other receivables, notes
receivable,advances to suppliers and long-term receivables.
When the Comapny recover or dispose the accounts receivable, the difference between the
proceeds received from the transaction and their carrying amounts is recognised in profit or loss
for the current period.
（5）Entrusted loans
Entrusted loans are recognized at the actual amounts that lent out by financial institutes as an
agent. And the interest is accounted on the accrual basis. If the previously recognized interest is
overdue but not recover, cease to accrue and reverse it.
Entrusted loans are subsequently measured at lower of carrying amount and recoverable amount
on the individual basis at the half year or whole year ended date.
（6）Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets with fixed or determinable
payments and fixed maturity dates that the Company's management has the positive intention and
ability to hold to maturity.Held-to-maturity investments are initially measured at fair value, and
transaction costs are included in their initial recognized amounts.
Held-to-maturity investments are subsequently measured at amortized cost using the effective
interest method. effective interest determined at acquisition date and keep remain unchanged in
estimated period or appropriate shorter period.Gain or loss arising from DE recognition,
impairment or amortization is recognized in profit or loss. When dispose,the difference between
proceeds received from the transaction and their carrying amounts are rcognized in investment
income.
（7）Available-for-sale financial assets
Available-for-sale financial assets include non-derivative financial assets that are designated on
initial recognition as available for sale, and financial assets that are not classified as financial
assets at fair value through profit or loss, loans and receivables or held-to-maturity investments.
Available-for-sale financial assets are initially measured at fair value, and transaction costs are
included in their initial recognized amounts. Interests obtained and the dividends declared by the
investee during the period in which the available-for-sale financial assets are held, are recognized
in investment gains.
Available-for-sale financial assets are subsequently measured at fair value, and gains or losses
arising from changes in the fair value are recognized as other comprehensive income, except that
impairment losses and exchange differences related to amortized cost of monetary financial assets
denominated in foreign currencies are recognized in profit or loss, until the financial assets are
derecognized, at which time the gains or losses are released and recognized in profit or loss.
9.3. Transfer of financial assets
The Company derecognizes a financial asset if the financial asset has been transferred and
substantially all the risks and rewards of ownership of the financial asset is transferred to the
transferee; If not,continue to recognize as a financial asset.
When determine whether the transfer of financial assets satisfies DE recognition criteria or not,the
substance over form should be taken into consideration
Notes on the Financial Statements Page 8
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
For a transfer of a financial asset in its entirety that satisfies the DE recognition criteria, the
difference between (1) the carrying amounts of the financial asset transferred; and (2) the sum of
the consideration received from the transfer and any cumulative gain or loss that has been
recognized in other comprehensive income is recognized in profit or loss.
If a part of the transferred financial asset qualifies for derecognition, the carrying amount of the
transferred financial asset is allocated between the part that continues to be recognized and the part
that is derecognized, based on the respective fair values of those parts. The difference between (1)
the carrying amount allocated to the part derecognized; and (2) the sum of the consideration
received for the part derecognized and any cumulative gain or loss allocated to the part
derecognized which has been previously recognized in other comprehensive income, is recognized
in profit or loss.
If a transfer of a financial asset are not satisfies the DE recognition criteria, such financial asset
continuing involved in the transferred financial asset and recognizes consideration as an financial
liability.
9.4. Derecognition of financial liabilities
The Company derecognizes a financial liability (or part of it) only when the underlying present
obligation (or part of it) is discharged. An agreement between the Company (an existing borrower)
and an existing lender to replace the original financial liability with a new financial liability with
substantially different terms is accounted for as an extinguishment of the original financial liability
and the recognition of a new financial liability. When the Company derecognizes a financial
liability or a part of it, it recognizes the difference between the carrying amount of the financial
liability (or part of the financial liability) derecognized and the consideration paid (including any
non-cash assets transferred or new financial liabilities assumed) in profit or loss.
If the Company buy back part of financial liability,the carrying amounts of financial liability
should be allocated between the derecognized parts and continuing recognized parts in proportion
to ratio of its fair value.The difference between the carrying amount of part of the financial
liability derecognized and the consideration paid (including any non-cash assets transferred or new
financial liabilities assumed) is recognized in profit or loss.
9.5. Basis for fair values of the financial assets and financial liabilities
The fair value of financial assets and financial liabilities traded on active markets are determined
with reference to quoted market bid prices; The fair value of other financial assets and financial
liabilities (excluding derivative instruments) are determined in accordance with generally accepted
pricing models based on
discounted cash flow analysis or using prices from observable current market transactions; The
fair value of initial acquired or derivative instruments are determined with reference to quoted
market prices.
9.6. Impairment of financial assets(except for receivables)
The Company assesses at each balance sheet date the carrying amounts of financial assets other
than those at fair value through profit or loss. If there is objective evidence that a financial asset is
impaired, the Company determines the amount of any impairment loss.
Objective evidence that a financial asset is impaired includes the following observable events:
（1） Significant financial difficulty of the issuer or obligor;
Notes on the Financial Statements Page 9
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
（2） A breach of contract by the borrower, such as a default or delinquency in interest or
principal payments;
（3） The Comapny, for economic or legal reasons relating to the borrower's financial difficulty,
granting a concession to the borrower;
（4） It becoming probable that the borrower will enter bankruptcy or other financial
reorganizations;
（5） The disappearance of an active market for that financial asset because of financial
difficulties of the issuer;
（6） Upon an overall assessment of a group of financial assets, observable data indicates that
there is a measurable decrease in the estimated future cash flows from the group of
financial assets since the initial recognition of those assets, although the decrease cannot yet
be identified with the individual financial assets in the group. Such observable data includes:
-Adverse changes in the payment status of borrower in the group of assets; Economic
conditions in the country or region of the borrower which may lead to a failure to pay the
group of assets;
（7） Significant adverse changes in the technological, market, economic or legal environment in
which the issuer operates, indicating that the cost of the investment in the equity instrument
may not be recovered by the investor;
（8） A significant or prolonged decline in the fair value of an investment in an equity instrument
below its cost;
The method for impairment loss of financial assets are set out below:
（1） Impairment of available-for-sale financial assets：
The Company assesses the available-for-sale equity instruments individually for impairment at
balance sheet date. If the fair value of the equity instruments are reduced to 50%(or over 50%) of
the cost or less than its cost and lasts more than one year, the impairment is recognized. If the the
fair value of the equity instruments at the balance sheet date are less than 20% but more than 50%
of the cost, the Company determines the impairment loss taking into account other related factors
such as price fluctuation.
When an available-for-sale financial asset is impaired, the cumulative loss arising from decline in
fair value previously recognized directly in capital reserve is reclassified from the capital reserve
to profit or loss. The amount of the cumulative loss that is reclassified from capital reserve to
profit or loss is the difference between the acquisition cost (net of any principal repayment and
amortization) and the current fair value, less any impairment loss on that financial asset previously
recognized in profit or loss.
If, subsequent to the recognition of an impairment loss on available-for-sale financial assets, there
is objective evidence of a recovery in value of the financial assets which can be related objectively
to an event occurring after the impairment is recognized, the previously recognized impairment
loss is reversed. The amount of reversal of impairment loss on available-for-sale equity
instruments is recognized as other comprehensive income, while the amount of reversal of
impairment loss on available-for-sale debt instruments is recognized in profit or loss.
But for the impairment loss incurred on an investment in unquoted equity instrument (without a
quoted price in an active market) whose fair value cannot be reliably measured, or on a derivative
Notes on the Financial Statements Page 10
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
financial asset that is linked to and must be settled by delivery of such an unquoted equity
instrument, the impairment loss on such financial asset is not reversed once it is recognized.
（2） Impairment of held-to-maturity investments：
If there is objective evidence that a held-to-maturity investments is impaired, the difference
between carrying amounts and present value of estimated future cash flows is recognized as an
impairment loss in profit or loss. If there is objective evidence of a recovery in value of a
held-to-maturity investments which can be related objectively to an event occurring after the
impairment is recognized, the previously recognized impairment loss is reversed. However, the
reversal is made to the extent that the carrying amount of the held-to-maturity investments at the
date the impairment is reversed does not exceed what the amortized cost would have been had the
impairment not been recognized.
9.7. Offsetting financial assets and financial liabilities
Where the Company has a legal right that is currently enforceable to set off the recognized
financial assets and financial liabilities, and intends either to settle on a net basis, or to realize the
financial asset and settle the financial liability simultaneously, a financial asset and a financial
liability shall be offset and the net amount is presented in the balance sheet. Except for the above
circumstances, financial assets and financial liabilities shall be presented separately in the balance
sheet and shall not be offset.
9. Receivables
(1) Measurement method and the percentage of bad debts
Measurement method of bad debts: accounted with allowance method.
At the end of the period, impairment test shall be made on individual accounts receivable with
significant amounts. If there is objective evidence that they have been impaired, bad debt loss shall
be recognized and provision for bad debts shall be made base on the differences between book
values and the present value of future cash flows.
For those individual accounts receivable without significant amounts at the end of the period,
along with those accounts receivable that have been tested individually but not impaired, the
Company classifies them in line with similar credit risk characteristics into several groups, and
make a specific percentage of bad debts provision on the accounts receivable balances at balance
sheet date. On the basis of the actual loss rate of receivable accounts, with same or similar credit
risk characteristics of accounts receivable package in previous year, the Company also considers
current situation and determine the percentage of bad debt provision.
Here is the Company’s bad debts provision policy:
Percentage of Accounts Percentage of Others
Ages
Receivable (%) Receivable (%)
Within 1 year (including 1 year, same as
2 2
following)
1 year to 2 years 5 5
2 years to 3 years 10 10
3 years to 4 years 20 20
4 years to 5 years 30 30
Over 5 years 50 50
Notes on the Financial Statements Page 11
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
There is strong evidence that accounts receivable can’t be recovered or little possibility of
recovery (it is unable to pay in the short term due to bankruptcy, insolvent, serious shortage of
cash flow, serious natural disasters and etc. ) as well as other evidences of occurring loss, the
Company can make full provision for the accounts receivable.
(2) The accounts receivable meeting the following criteria are recognized as bad debts:
For accounts receivable that are surely uncollectible, such as they can be written off as bad debts
after the approval of the general meeting of shareholders or the board of directors.
10.Inventories
(1) Inventories include: development cost (constructing development product), development
product, finished goods, low-value consumable supplies and etc. All inventories are calculated at
actual cost when acquire. The issue of inventories is calculated according to individual cognizance
method. The low–value consumable supplies are amortized at one time. Inventories stock physical
count system: perpetual inventory method
Measurement method of land used for development: the land used for development is included in
“Inventories - development cost”.
Public facilities costs: public facilities such as schools, as well as public facilities fees acquired by
government departments, the cost is included in "development costs" and its apportionment and
detailed calculation are in accordance with calculation objects and cost items.
(2) For inventories at balance sheet date, the evaluation criteria should base on the lower value
between costs and net values that can be converted into cash. When net values that can be
converted into cash are lower than costs, provision for impairment loss of inventories shall be
made and recorded into current profit and loss.
11.Long-term equity investment
12.1. Determination of investment cost
（1） For a long-term equity investment acquired through a business combination, please refer to
Notes“ IV-4” in detail.
（2） Long-term equity investment acquired through other ways
The initial cost of a long-term equity investment obtained by making payment in cash shall be the
purchase cost which is actually paid. The initial cost consists of the expenses directly relevant to
the obtainment of the long term equity investment, taxes and other necessary expenses.
The initial cost of a long-term equity investment obtained on the basis of issuing equity securities
shall be the fair value of the equity securities issued. Transaction cost of issuing or obtaining
equity directly attributed to euity transaction can subtract from equity.
If the transaction is commercial in nature and fair values of both the assets received and
surrendered can be reliably measured, the fair value of the assets surrendered shall be the basis for
the determination of the cost of the assets received, unless there is any exact evidence showing
that the fair value of the assets received is more reliable.Where any non-monetary assets
transaction does not meet the conditions as prescribed in above, the carrying value and relevant
payable taxes of the assets surrendered shall be the initial cost of a long-term investment obtained.
The initial cost of a long-term equity investment obtained by debt restructuring shall be
Notes on the Financial Statements Page 12
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
ascertained on the basis of fair value.
12.2. Subsequent measurement and recognition of profit or loss
（1） A long-term equity investment accounted for using the cost method
For long-term equity investments over which the Company can exercise control, the Company
accounts for such long-term equity investments using the cost method. Under the cost method, a
long-term equity investment is measured at initial investment cost. Except for cash dividends or
profits already declared but not yet paid that are included in the price or consideration actually
paid upon acquisition of the long-term equity investment, investment income is recognized in the
period in accordance with the attributable share of cash dividends or profit distributions declared
by the investee.
（2） A long-term equity investment accounted for using the equity method
TheCompany accounts for investment in associates and joint ventures using the equity method. An
associate is an entity over which the Group has significant influence and a joint venture is an
entity over which the Group exercises joint control along with other investors.
Under the equity method, where the initial investment cost of a long-term equity investment
exceeds the Group's share of the fair value of the investee's identifiable net assets at the time of
acquisition, no adjustment is made to the initial investment cost. Where the initial investment cost
is less than the Comany's share of the fair value of the investee's identifiable net assets at the time
of acquisition, the difference is recognized in profit or loss for the period, and the cost of the
longterm equity investment is adjusted accordingly.
For long-term equity investments accounted for using the equity method, the Company recognises
the investment income and other comprehensive income according to its share of net profit or loss
and other comprehensive income of the investee, and the cost of the longterm equity investment is
adjusted accordingly.The Company discontinues recognising its share of net losses of an investee
after the carrying amount of the long-term equity investment together with any long-term interests
that, in substance, form part of the investor’s net investment in the investee are reduced to zero.
However, if the Company has obligations for additional losses and the criteria with respect to
recognition of provisions under the accounting standards on contingencies are satisfied, the
Company continues recognising the investment losses and the provisions. For changes in owners’
equity of the investee other than those arising from its net profit or loss, other comprehensive
income, and profit distribution, the Company adjusts the book value of the investment and records
capital surplus accordingly. The carrying amount of the investment is reduced by the Company’s
share of the profit distribution or cash dividends declared by an investee. The unrealised profits or
losses arising from the intra-company transactions amongst the Company and its investees are
eliminated in proportion to the Company’s equity interest in the investees, and then based on
which the investment gains or losses are recognised. For the loss on the intra-company transaction
amongst the Company and its investees attributable to asset impairment,any unrealised loss is not
eliminated.
12.3. Basis for determing existence of control, jointly control or significant influence over
investees
Control is the power to govern the financial and operating policies of the investee so as to obtain
benefits from its operating activities. In determining whether the Company is able to exercise
control over the investee, the effect of potential voting rights over the investee is considered, such
as convertible debts and warrants currently exercisable, etc.
Significant influence is the power to participate in the financial and operating policy decisions of
the investee, but is not control or joint control over those policies.
Notes on the Financial Statements Page 13
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
12.4. The transfer of accounting methods
According to CAS No.22 – Financial Instrument Recognition and Measurement, if the investor
can exert significant influence on the investee or implement co-control but not solely-control, the
cost of long-term investment shall be the fair value plus the newly invested cost.
Where equity investment disposed part of equity and lose control over investee,the inveator can
exert significant influence on the investee or implement co-control but not solely-control, the cost
of long-term investment shall be changed to use equity-method and adjust the resudal equity
investments as accounted with equity-method from acquisition date.
12.5. Disposal of long-term equity investments
On disposal of a long term equity investment, the difference between the proceeds actually
received and receivable and the carrying amount is recognized in profit or loss for the period. For
a long-term equity investment accounted for using the equity method, the amount included in the
shareholders' equity attributable to the percentage interest disposed is transferred to profit or loss
for the period.
12.6. Impairment of long-term equity investments
The Group reviews the long-term equity investments at each balance sheet date to determine
whether there is any indication that they have suffered an impairment loss. If an impairment
indication exists, the recoverable amounts are estimated. Recoverable amount refers to the higher
of net realizable value(fair value less disposal cost) and present value of expected future cash flow.
If such recoverable amount is less than its carrying amount, a provision for impairment losses in
respect of the deficit is recognized in profit or loss for the period.
Once an impairment loss is recognized for a long-term equity investment, it will not be reversed in
any subsequent period.
12.Investment property
The term "investment property" refers to the real estates held for generating rent and/or capital
appreciation, including: the right to use any land which has already been rented; the right to use
any land which is held and prepared for transfer after appreciation; and the right to use any
building which has already been rented. The initial measurement of the investment property shall
be made at its cost. An enterprise shall make a follow-up measurement to the investment real
estate through the cost pattern. For buildings which have already been rented, the Company
calculates depreciation as the same method of fixed assets. For the right to use any land, it is
amortized with straight-line method according to the serviceable life. At the balance sheet date,
where any evidence shows that there is possible assets impairment, the impairment provision is
made.
13.Fixed assets
(1) Recognition of fixed assets
Fixed assets are tangible assets that are held for use in production or supply of goods or services,
for rental to others, or for administrative purpose, and have useful lives more than one accounting
year.
The expected discard expenses should be taken into consideration in the ascertainment of the cost
of a fixed asset.
(2) The category and depreciation method of fixed assets
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Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
Fixed assets include buildings and structures, vehicles, general equipments, specific equipments
and other equipments. Straight-line method is in used to calculate the depreciation of fixed assets.
The estimated useful lives, expected residual value and annual depreciation rate of various types
fixed assets are listed as follows:
Estimated useful lives Expected residual value Annual depreciation rate
Category
(years) (%) (%)
Buildings and
25 5 3.8
structures
Vehicles 5 5 19.0
General equipments 10 5 9.5
Other equipments 5 5 19.0
Depreciation shall be made for the fixed assets on a monthly basis. Fixed assets increased this
month shall make depreciation from next month; fixed assets decreased this month shall stop
making depreciation from next month.
The company shall, at least at the end of each year, have a check on the useful life, expected
residual value and the depreciation method of the fixed assets, and adjust them when necessary.
At the balance sheet date, where any evidence shows that there is possible assets impairment, the
impairment provision is made according to Notes II. 17.
(3) Idle fixed assets
Fixed assets that are not used for six months continuously due to underemployment or natural
disasters are identified as idle fixed assets (except for seasonal break).
The depreciation method of idle fixed assets is consistent with other fixed assets.
(4) Fixed assets under financing lease
When one or more of the following criteria are met, a lease shall be classified as a financial lease:
a. the lease transfers ownership of the leased asset to the lessee by the end of the lease term;
b. the lessee has the option to purchase the leased asset at a price that is expected to be sufficiently
lower than the fair value at the date the option becomes exercisable such that, at the inception of
the lease, it is reasonably certain that the option will be exercised by the lessee;
c. the lease term is for the major part of the useful life of the leased asset even if title is not
transferred;
d. in the case of the lessee, at the inception of the lease the present value of the minimum lease
payments amounts to substantially all of the fair value of the leased asset; in the case of lesser, at
the inception of the lease the present value of the minimum lease receipts amounts to substantially
all of the fair value of the leased asset;
e. the leased assets are of a specialized nature such that only the lessee can use them without major
modifications being made.
Notes on the Financial Statements Page 15
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
Fixed assets under financing lease shall be recorded at the lower one of the fair value of the leased
asset and the present value of the minimum lease payments. The depreciation method is consistent
with fixed assets of the Company.
14.Construction in progress
Construction in progress (“CIP”) includes all costs incurred during the preparation period before
commencement of construction and until the asset is ready for its intended use. These costs
include direct materials, direct labour, equipment for installation, construction and installation
charges, management fees, gain or loss on trial run production and borrowing costs which are
qualified for capitalization.
CIP is transferred to fixed assets when the asset is ready for its intended use.
At the balance sheet date, where any evidence shows that there is possible CIP impairment, the
impairment provision is made according to Notes II.17.
15.Borrowing Costs
Borrowing costs are interest and other related costs incurred by the Company in connection with
the borrowing of funds, and include interest, amortization of discounts or premiums related to
borrowings, ancillary costs incurred in connection with the arrangement of borrowings, and
exchange differences arising from foreign currency borrowings. Borrowing costs that are directly
attributable to the acquisition, construction or production of a qualifying asset shall be capitalized
as part of the cost of that asset. The amounts of other borrowing costs incurred shall be recognized
as an expense in the period in which they are incurred.
Qualifying assets are assets (fixed assets, investment property, inventories, etc.) that necessarily
take a substantial period of time for acquisition, construction or production to get ready for their
intended use or sale. The capitalization of borrowing costs can commence only when all of the
following conditions are satisfied: (1) expenditures for the asset are being incurred; (2) borrowing
costs are being incurred; (3) activities relating to the acquisition, construction or production of the
asset that are necessary to prepare the asset for its intended use or sale have commenced.
When the qualified asset under acquisition and construction or production is ready for the intended
use or sale, the capitalization of the borrowing costs shall be ceased; then the borrowing costs
incurred shall be recorded into the profits and losses of the current period. Borrowing costs due to
loans from real estate development are recorded into development cost before the completion of
the project and recorded into current profit and loss after the completion of the project. Borrowing
costs are recorded into development cost and amortized quarterly.
Where the acquisition and construction or production of a qualified asset is interrupted abnormally
and the interruption period lasts for more than 3 months, the capitalization of the borrowing costs
shall be suspended. The borrowing costs incurred during such period shall be recognized as
expenses, and shall be recorded into the profits and losses of the current period.
During the capitalization period, the amount of interest to be capitalized for each accounting
period shall be determined as follows:
(1) for a specific-purpose borrowing, the amount of interest to be capitalized shall be the actual
interest expense incurred for the period less temporary deposit’s interest or investment income;
(2) Where funds are borrowed under general-purpose borrowings, the Company shall determine
the amount of interest to be capitalized by applying a capitalization rate to the weighted average of
Notes on the Financial Statements Page 16
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
the excess amounts of cumulative expenditures on the asset over and above the amounts of
specific-purpose borrowings. The capitalization rate shall be the weighted average of the interest
rates applicable to the general-purpose borrowings.
16.Intangible assets
The term "intangible assets" refers to the identifiable non-monetary assets possessed or controlled
by enterprises which have no physical shape. If it is unable to forecast the period when the
intangible asset can bring economic benefits to the enterprise, it shall be regarded as an intangible
asset with uncertain service life. The intangible assets shall be initially measured according to its
cost. If it is unable to determine the expected realization pattern reliably, intangible assets shall be
amortized by the straight-line method. An enterprise shall, at least at the end of each year, check
the service life and the amortization method of intangible assets with limited service life, and
adjust them when necessary. Intangible assets with uncertain service life may not be amortized. An
enterprise shall check the service life of intangible assets with uncertain service life during each
accounting period. Where any evidence shows that there is possible assets impairment, the
impairment provision is made.
17.Long-term prepaid expenses
Long-term prepaid expenses mainly include spending paid with the benefit period of more than
one year (excluding the year period) such as car parking fees, housing renovation fees, etc.
Long-term prepaid expenses shall be amortized the costs over the duration of the project
beneficiary.
18.Contingencies liabilities
The obligation pertinent to a Contingencies shall be recognized as accrued liabilities when the
following conditions are satisfied simultaneously: (1) That obligation is a current obligation of
the enterprise; (2) It is likely to cause any economic benefit to flow out of the enterprise as a result
of performance of the obligation; (3) The amount of the obligation can be measured in a reliable
way. The estimated debts shall be initially measured in accordance with the best estimate of the
necessary expenses for the performance of the current obligation.
19.Revenue recognition
20.1. Revenue from sale of goods
Revenue from sale of goods is recognised when (1) the Group has transferred to the buyer the
significant risks and rewards of ownership of the goods; (2) the Group retains neither continuing
managerial involvement to the degree usually associated with ownership nor effective control over
the goods sold; (3) the amount of revenue can be measured reliably; (4) it is probable that the
associated economic benefits will flow to the Group; and (5) the associated costs incurred or to be
incurred can be measured reliably.
Where the receivable is delayed beyond the normal credit conditions, which is of financing
intention, the revenue shall be determined on the basis of the fair value of the contract or
agreement price.
Real estate sales revenue: the Company can recognize real estate sales revenue after the
completion and acceptance of the property, signing sale contract, acquiring payment proof from
buyer and delivery. When the buyer receives written delivery notice and has no warrant to refuse
to accept it, the sales revenue is realized after delivery limit closed of delivery notice. For the
development project consigned by other, as well as in accordance with “Accounting Standards
Notes on the Financial Statements Page 17
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
for Business Enterprises -Construction Contract", the revenue shall be recognized in light of the
percentage-of- completion method. The percentage-of- completion is determined by the
proportion of finished workload.
Revenue from rendering of services
When the outcome of a transaction involving the rendering of services can be estimated reliably,
revenue associated with the transaction shall be recognized by reference the stage of completion
of the transaction at the reporting date. The stage of completion of the transaction is recognized
according to the proportion of the cost having taken place occupied the estimated total cost.
The outcome of a transaction can be estimated reliably when all the following conditions are
satisfied:
the amount of revenue can be measured reliably;
it is probable that the associated economic benefits will flow to the enterprise;
the stage of completion of the transaction can be measured reliably;
the costs incurred and to be incurred for the transaction can be measured reliably
When the outcome of a transaction involving the rendering of services cannot be estimated
reliably at the balance sheet date: when the costs incurred are expected to be recoverable,
revenue shall be recognized to the extent of costs incurred and an equivalent amount shall be
charged to profit or loss as service costs; when the costs incurred are not expected to be
recoverable, the costs incurred shall be recognized in profit or loss for the current period and no
service revenue shall be recognized.
The revenue of property management service is recognized when following conditions are
satisfied: the property management service has been offered; the associated economic benefits
will flow to the enterprise; the associated costs can be measured reliably.
Transfer of asset with buy-back condition
The company determined whether sale of goods or transfer of assets with buy-back condition in
contract is satisfy criterias of revenue recognition or not according to clauses of agreement. If it
is a financing transaction, revenue are not be recorded. The amount of buy-back price after sales
price is recognized in financial cost during the term of buy-back.
Government grants
Government grants shall be recognized at fair value on the conditions that the Company can
receive the grant and comply with the conditions attaching to the grant. For a government grant
related to income, if the grant is a compensation for related expenses or losses to be incurred by
the Company in subsequent period, the grant shall be recognized as deferred income, and
recognized in profit or loss over the periods in which the related costs are recognized. A
government grant related to an asset shall be recognized as deferred income, and evenly
amortized to profit or loss over the useful life of the related asset.
Recognition of deferred income tax assets and liabilities
(1) The Company shall recognize the deferred income tax assets arising from a deductible
temporary difference to the extent of the amount of the taxable income which it is most likely to
obtain and which can be deducted from the deductible temporary difference. However, the
deferred income tax assets, which are arising from the initial recognition of assets or liabilities
during a transaction which is simultaneously featured by the following, shall not be recognized:
Notes on the Financial Statements Page 18
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
(i) This transaction is not business combination; and
(ii) At the time of transaction, the accounting profits will not be affected, nor will the taxable
amount (or the deductible loss) be affected.
(2) Where the deductible temporary difference related to the investments of the subsidiary
companies, associated enterprises and joint enterprises can meet the following requirements
simultaneously, the enterprise shall recognize the corresponding deferred income tax assets:
(i) The temporary differences are likely to be reversed in the expected future; and
(ii) It is likely to acquire any amount of taxable income tax that may be used for making up the
deductible temporary differences.
(iii) As for any deductible loss or tax deduction that can be carried forward to the next year, the
corresponding deferred income tax assets shall be determined to the extent that the amount of
future taxable income to be offset by the deductible loss or tax deduction to be likely obtained.
(3) Recognition of deferred income tax liabilities
Except for the deferred income tax liabilities arising from the following transactions, an
enterprise shall recognize the deferred income tax liabilities arising from all taxable temporary
differences:
(i) The initial recognition of business reputation;
(ii) The initial recognition of assets or liabilities arising from the following transactions which
are simultaneously featured by the following:
(a) The transaction is not business combination;
(b) At the time of transaction, the accounting profits will not be affected, nor will the taxable
amount (or the deductible loss) be affected.
(4) The income taxes of the current period and deferred income tax of an enterprise shall be
treated as income tax expenses or incomes, and shall be recorded into the current profits and
losses, excluding the income taxes incurred under the following circumstances:
(i) The business combination; and
(ii) The transactions or events directly recognized as the owner's rights and interests.
(5) Impairment on the deferred income tax assets
On the balance sheet date, the carry amounts of the deferred income tax assets shall be reviewed.
Maintenance fund
The Company’s property management company receives and manages public maintenance fund
consigned by owners, and charges to “agency fund”. The fund is used in the maintenance and
update of the common apparatus and common position of the house and communal facilities of
property management region.
Quality assurance reserve funds
Construction party should remain quality assurance reserve funds according to the amount in the
construction contract, and list in "accounts payable". The funds should be paid according to the
actual conditions and contract after guarantee period.
Changes of accounting policies and accounting estimates and error correction
IV． Changes of significant accounting policies and accounting estimates and prior error
correction
Notes on the Financial Statements Page 19
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
1. Changes of accounting policies
No alteration of accounting policies occurred in the report period.
2. Changes in accounting estiminations
No alteration of accounting estiminations occurred in the report period.
3. Corrections of previous period critical errors
No corrections of previous period critical errors occurred in the report period.
V.Taxation
The main taxes include: business tax, city construction and maintenance tax, education fee,
income tax and etc. The tax rates are as following:
Category Rate Taxable base
3%、5%、6%、
Value-added tax 11%、13%、 Sales of goods or rendering of taxable services
17%
Revenue of house property sale and lease,
Business tax 5%
property management income and etc.
Business tax 3% Revenue of culture and sports
Business tax 20% Revenue of entertainment
City construction and maintenance tax 5%, 7% Business tax and value-added tax
Education fee 3% Business tax and value-added tax
Income tax 10%, 25% Taxable income
Note: For the year 30,June 2016, except that income tax of companies in Shanghai Sea Pearl
Property Management Co., Ltd is levied at 10% of taxable income, the income tax of other
companies is levied at 25% of taxable income.
VI.Business combinations and consolidation financial statements
The Company shall include all subsidiaries within the scope of consolidation.
The consolidated financial statements shall be prepared by parent based on the financial
statements of the parent and its subsidiaries, using other related information and after adjusting the
long-term equity investments in subsidiaries using the equity method according to “Accounting
Standard for Business Enterprises No.33—Consolidated Financial Statements”.
Notes on the Financial Statements Page 20
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
1. Subsidiaries established by the Company
Amount
Registe
Voting invested
red Holding
Registere rights by the
Subsidiary’s name capital Principal activities proporti
d address proportio Company
(RMB on
n (RMB
0’000)
0’000)
Hainan Pearl River
Hainan Properties and
Properties and Hotels 500 98% 98% 490
Haikou Hotels Management
Management Co., Ltd.
Hainan Pearl River Gardens
Hainan
Environmental Projects 100 engineering 100% 100% 100
Haikou
Co.,Ltd. construction
Hainan Pearl River Estate Hainan
50 Cleaning projects 100% 100% 50
Cleaning Company Haikou
Hainan Pearl River Estate Mechanical and
Hainan
Machine Engineering 150 electrical products 100% 100% 150
Haikou
Company sales
Sanya Wanjia Hotel Hainan
12,000 Hotel service 100% 100% 12,000
Management Co., Ltd. Sanya
Real estate
Hubei Pearl River Real Estate Hubei
7,222 development and 89.2% 89.2% 6,442
Development Co., Ltd. Wuhan
management
Wuhan Pearl River Meilin
Hubei
Hotels Management Co., 50 Service 100% 100% 50
Wuhan
Ltd.
Hainan Pearl River Real estate
Holding( Shanghai )Real Shanghai 4,000 development and 100% 100% 4,000
Estate Co.,Ltd. management
Beijing Jiubo Culture Cultural and sports
Beijing 500 100% 100% 500
Development Co., Ltd. services
Mudanjiang Pearl River
Mudanjia
Wanjia Tourism Investment 6,000 Hotel management 100% 100% 6,000
ng
Development Group
Mudanjiang Wanjia Star Mudanjia
50 Hotel service 100% 100% 50
Hotel Co., Ltd. ng
Mudanjiang Jingbohu Wanjia Mudanjia
50 Hotel service 100% 100% 50
Hotel Co., Ltd. ng
Harbin Wanjia Travel Agent Harbin 30 touring 100% 100% 30
Shanghai Sea Pearl Property US Property
Shanghai 50% 50% 83
Management Co., Ltd. $ 20 management
Notes on the Financial Statements Page 21
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
Amount
Registe
Voting invested
red Holding
Registere rights by the
Subsidiary’s name capital Principal activities proporti
d address proportio Company
(RMB on
n (RMB
0’000)
0’000)
Hebei Real estate
Hebei Zhengshi Qinghui Real Shijiazhu 1,000 development and 51% 51% 510
Estate Development Co., Ltd. ang property services
Hailin Wanjia Snowtown Heilongji
Holiday Hotel Management ang 2,000
Co., Ltd. Hailin
Note： Included in the scope of consolidated financial statements to reduce 2 units in the final :
Heilongjiang Longshi Pearl River Culture Communication Co., Ltd. and Hainan Pearl River Estate
Marketing Co., Ltd.The Heilongjiang Longshi Pearl River Culture Communication Co., Ltd.
complete equity delivery procedure on 16 May 2016.The Hainan Pearl River Estate Marketing
Co., Ltd complete the cancellation procedures for industry and commerce on 9 March 2016.
VII.Notes to significant items of the consolidated financial statements
（All amounts are stated in RMB Yuan unless otherwise stated）
Note 1 Currency Funds
Items Closing Balance Opening Balance
Cash in treasury 787,971.21 620,470.49
Bank deposit 142,306,678.57 205,111,692.83
Other monetary funds 15,561.01 29,968.22
Total 143,110,210.79 205,762,131.54
Note 2 Accounts receivable
1) Disclosure of category details of accounts receivable:
Closing Balance
Categories Book Balance Provision for Bad Account
Ratio Rate Chargeable Book Value
Amounts Amounts
(%) （%）
Accounts receivable with
significant single amount
7,761,707.60 21.65 7,761,707.60 100.00 -
and individual provision
for bad debts
Accounts receivable with
combinational
withdrawal of the bad 26,042,287.59 72.65 1,800,096.98 6.91 24,242,190.61
debt provision by credit
risks characteristics
Notes on the Financial Statements Page 22
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
Closing Balance
Categories Book Balance Provision for Bad Account
Ratio Rate Chargeable Book Value
Amounts Amounts
(%) （%）
Accounts receivable with
non-significant single
2,042,724.02 5.70 1,990,692.02 97.45 52,032.00
amount and individual
provision for bad debts
Total 35,846,719.21 100.00 11,552,496.60 ---- 24,294,222.61
Continued：
Opening Balance
Categories Book Balance Provision for Bad Account
Ratio Rate Chargeable Book Value
Amounts Amounts
(%) （%）
Accounts receivable with
significant single amount
7,761,707.60 27.46 7,761,707.60 100.00
and individual provision for
bad debts
Accounts receivable with
combinational withdrawal
of the bad debt provision 18,244,347.09 64.54 1,353,019.47 7.42 16,891,327.62
by credit risks
characteristics
Accounts receivable with
non-significant single
2,261,420.02 8.00 1,990,766.02 88.03 270,654.00
amount and individual
provision for bad debts
Total 28,267,474.71 100.00 11,105,493.09 ----- 17,161,981.62
Description of categories of accounts receivable：
(1) Accounts receivable with significant single amount and individual provision for bad debts at
the end of period:
Closing Balance
Name Rate
Accounts Provision for Reasons of
Chargeable
Receivable Bad Account Withdrawal
（%）
Hainan dragon film studio 1,046,985.40 1,046,985.40 100.00 Irrecoverable
Hainan Baoping company 2,218,494.43 2,218,494.43 100.00 Irrecoverable
Hainan racing entertainment
2,406,158.00 2,406,158.00 100.00 Irrecoverable
Co., LTD
Hainan centaline property
2,090,069.77 2,090,069.77 100.00 Irrecoverable
agency
Total 7,761,707.60 7,761,707.60 -----
Notes on the Financial Statements Page 23
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
(2) Accounts receivable in the combination which adopts aging analysis method to determine
provision for bad debt:
Closing Balance
Aging
Accounts Receivable Provision for Bad Account Rate Chargeable（%）
Within 1 year 20,689,480.39 413,789.61 2.00
1－2 years 593,462.12 29,673.11 5.00
2－3 years 918,322.22 91,832.23 10.00
3－4 years 1,378,817.39 275,763.48 20.00
4－5 years 1,102,372.05 330,711.62 30.00
Over 5 years 1,359,833.42 679,916.71 50.00
Total 26,042,287.59 1,821,686.75 -----
Continued：
Opening Balance
Aging
Accounts Receivable Provision for Bad Account Rate Chargeable（%）
Within 1 year 12,701,815.74 254,036.31 2.00
1－2 years 1,307,984.56 65,399.23 5.00
2－3 years 1,515,278.05 151,527.81 10.00
3－4 years 1,187,553.93 237,510.79 20.00
4－5 years 606,560.39 181,968.12 30.00
Over 5 years 925,154.42 462,577.21 50.00
Total 18,244,347.09 1,353,019.47 -----
(3) Accounts receivable with non-significant single amount and individual provision for bad debts
at the end of period:
Closing Balance
Name Accounts Provision for Bad Rate Reasons of
Receivable Account Chargeable（%） Withdrawal
Haikou Peijie clothing
497,520.00 497,520.00 100.00 Irrecoverable
company
Hainan International silver
451,712.00 451,712.00 100.00 Irrecoverable
city Real estate company
Haikou Jingye trading
250,000.00 250,000.00 100.00 Irrecoverable
development company
Hainan Jinhe Real estate
119,446.00 119,446.00 100.00 Irrecoverable
company
Hainan Qiongshan Tianxin
112,116.50 112,116.50 100.00 Irrecoverable
Pawn Investment company
Withdrawn as per
Amount below RMB100000 the estimated
611,929.52 559,897.52 91.50
(23 units) non-recoverable
amount
Notes on the Financial Statements Page 24
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
Closing Balance
Name Accounts Provision for Bad Rate Reasons of
Receivable Account Chargeable（%） Withdrawal
Total 2,042,724.02 1,990,692.02 -----
2) Situation of the current bad debt provision withdrawn, recovered or reversed:
The amount of current bad debt provision withdrawn was RMB 447,003.51 yuan.
3) There is no money owed by the shareholders who hold more than 5% (5% is included) of
voting shares of the Company in the closing accounts receivable.
4) Top 5 units of accounts receivable of the closing balance gathered on the basis of parties
which owe the money:
Ratio in Closing
Amount of Bad Account
Name Closing Balance
Accounts Provisions Withdrawn
Receivable (%)
Hainan racing entertainment Co.,
2,406,158.00 6.71 2,406,158.00
LTD
Hainan Baoping company 2,218,494.43 6.19 2,218,494.43
Hainan Zhongyuan tenement agency
2,090,069.77 5.83 2,090,069.77
company
Hunan Railway Lianchuang
9,265,804.60 25.85 185,316.09
Technology Development Co., Ltd.
Sino (Zhengzhou) Real Estate Co.,
3,525,276.00 9.83 81,205.68
Ltd.
Total 19,505,802.80 54.41 6,981,243.97
Note 3 Advance payment
1) Advance payment is listed as per the aging.
Closing Balance
Aging Accounts Paid in Provision for Bad
Ratio （%）
Advance Account
Within 1 year 107,624,351.42 59.24
1－2 years 890,814.18 0.49
2－3 years 112,794.95 0.06
Over 3 years 73,039,925.40 40.21 7,050,161.00
Total 181,667,885.95 100.00 7,050,161.00
Continued：
Opening Balance
Aging Accounts Paid in Provision for Bad
Ratio （%）
Advance Account
Within 1 year 50,234,581.47 43.57
1－2 years 881,530.07 0.77
2－3 years 6,437,794.95 5.58 5,800,000.00
Over 3 years 57,733,198.41 50.08 1,250,161.00
Notes on the Financial Statements Page 25
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
Opening Balance
Aging Accounts Paid in Provision for Bad
Ratio （%）
Advance Account
Total 115,287,104.90 100.00 7,050,161.00
2) Description on the reasons why the advance payment whose aging is more than one year
and amount is significant fails to be timely settled accounts
Reasons why to fail to be settled
Name Closing Balance Aging
timely
Haikou citic hongzhou coastal
50,000,000.00 over 5 years Not check and accept the house
construction co., Ltd
Advance payment for the construction
Dahailin Forestry Bureau 4,596,469.00 4-5 years
cost
Guangdong Angyang Technology
1,189,800.00 over 3 years Non-completion of engineering
Development Co., Ltd.
Sanya is the cast gen and travel trade
763,785.18 1-2 years Advance payment for the materials
co., LTD
Harbin Chaoyang Tianxia Culture
500,000.00 over 3 years Money for the electronic devices
Transmission Co., Ltd.
Beijing Putian Yihua Technology 500,000.00 over 3 years Advance payment for the materials
Total 57,550,054.18
3) Top 5 units of advance payments of the closing balance gathered on the basis of parties for
which the Company prepaid:
Ratio in the
total
Closing Advance Reasons why to be
Name advance
Balance Payment Time outstanding
payment
(%)
The money for the
Beijing science and technology
80,530,000.00 44.33 Within 1 year procurement advance
development co., Ltd
payment is
The house under the
Haikou citic hongzhou coastal advance payment is not
50,000,000.00 27.52 over 5 years
construction co., Ltd checked and accepted
temporarily
The money for the
Heilongjiang Mudanjiang Forestry construction under the
8,339,855.99 4.59 over 1 years
Engineering Company advance payment is
outstanding temporarily
The money for the Sales
Wuhai Huatao Real Estate Brokers
7,510,000.00 4.13 over 1 years agency fee settlement
Co., Ltd.
not settlement
The money for the
construction under the
Firsta decorated Beijing co., Ltd 4,941,737.78 2.72 over 1 years
advance payment is
outstanding temporarily
Total 151,321,593.77 83.30
4) Other descriptions on advance payment
According to the Arrangement agreed upon “Supplementary Agreement of Execution of Longzhu
Phase-III Project” made by between the Company and Haikou Real Estate Development Co., Ltd.
(hereinafter referred to as “Hongzhou Real Estate”), the Company prepaid with RMB50 million
Notes on the Financial Statements Page 26
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
yuan for purchasing Longzhu Phase-III Project----Office Building covering 15000 square meters
with the qualified acceptance. On August 22, 2013, the Company and Hongzhou Real Estate,
Haikou HongZhou Coastal Construction Co., Ltd. (hereinafter referred to as “HongZhou
Construction”), Haikou HongZhou Real Estate Group Co.,Ltd. (hereinafter referred to as
“HongZhou Group”) signed "Supplementary Agreement on the Implementation of Original Six
Agreements in Haikou Hongzhou Center Project ". The rights, obligations and legal
responsibilities owned by HongZhou Real Estate in the original contract are inherited by
HongZhou Construction. The original guarantee contract signed by between the Company and
HongZhou Group shall continue to keep effective. HongZhou Group handed over the land and
housing ownership certificate of basement of Times Mansion of Sanya HongZhou Aiderui Hotel
located in Yuya Road, Hedong District, Sanya City to the Company for being held in trust. As at
December 31, 2015, the second planning of this project had been approved, the construction plan
is in preparation at present, it is estimated to start the construction at the end of 2016.
5) There is no money owed by the shareholders who hold more than 5% (5% is included) of
voting shares of the Company in the closing accounts paid in advance.
Note 4 Dividends receivable
Investee Closing Balance Opening Balance
Hainan PEARL RIVER
260,015.00 260,015.00
Tube-pile Co., Ltd.
Total 260,015.00 260,015.00
Note 5 Other receivables
1) Disclosure of category details of other receivables
Closing Balance
Categories Book Balance Provision for Bad Account
Ratio Rate Chargeable Book Value
Amounts Amounts
(%) （%）
Other receivables with
significant single amount and
31,978,479.90 9.69 31,978,479.90 100.00
individual provision for bad
debts
Other receivables with
combinational withdrawal of
290,550,767.22 88.06 64,171,558.00 22.09 226,379,209.22
the bad debt provision by
credit risks characteristics
Other receivables with
non-significant single amount
7,399,227.84 2.24 5,725,551.58 77.38 1,673,676.26
and individual provision for
bad debts
Total 329,928,474.96 99.99 101,875,589.48 ----- 228,052,885.48
Notes on the Financial Statements Page 27
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
Continued：
Opening Balance
Book Balance Provision for Bad Account
Categories
Rate Book Value
Ratio Chargeable
Amounts Amounts
(%)
（%）
Other receivables with
significant single amount and
25,978,479.90 7.40 25,978,479.90 100.00
individual provision for bad
debts
Other receivables with
combinational withdrawal of
317,243,239.62 90.34 64,708,352.54 20.40 252,534,887.08
the bad debt provision by
credit risks characteristics
Other receivables with
non-significant single amount
7,922,155.40 2.26 4,420,651.45 55.80 3,501,503.95
and individual provision for
bad debts
Total 351,143,874.92 100.00 95,107,483.89 ----- 256,036,391.03
Description of categories of other receivables：
（1） Other receivables with significant single amount and individual provision for bad
debts at the end of period:
Closing Balance
Name Provision for Rate Reasons of
Other Receivables
Bad Account Chargeable（%） Withdrawal
Hainan Yangtze River Travel 1,000,000.00 1,000,000.00 100.00 Irrecoverable
Xinhua Liming Aviation
1,208,804.70 1,208,804.70 100.00 Irrecoverable
Decoration Company
Dabao Cement Factory 1,901,383.56 1,901,383.56 100.00 Irrecoverable
Hainan Shenhai Real Estate
1,029,850.32 1,029,850.32 100.00 Irrecoverable
Co., Ltd.
Shenzhen State-Investment
1,409,934.28 1,409,934.28 100.00 Irrecoverable
Securities Co., Ltd.
Shenzhen Zhuce Real Estate
1,550,278.23 1,550,278.23 100.00 Irrecoverable
Company
Sanya Land and Housing
1,000,000.00 1,000,000.00 100.00 Irrecoverable
Administration
Jinguang Real Estate
1,752,100.00 1,752,100.00 100.00 Irrecoverable
Company
Dingjia International Co.,
2,725,702.71 2,725,702.71 100.00 Irrecoverable
Ltd.
Hainan Zhongda Real Estate
2,210,779.10 2,210,779.10 100.00 Irrecoverable
Company
Hainan Enxin Industry Co.,
2,314,592.00 2,314,592.00 100.00 Irrecoverable
Ltd.
Notes on the Financial Statements Page 28
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
Closing Balance
Name Provision for Rate Reasons of
Other Receivables
Bad Account Chargeable（%） Withdrawal
Haikou Industrial
Development Import and 1,392,430.00 1,392,430.00 100.00 Irrecoverable
Export Co., Ltd.
Shenzhen Yinxiang
6,482,625.00 6,482,625.00 100.00 Irrecoverable
Computers Co., Ltd.
Hainan Macun Port
6,000,000.00 6,000,000.00 100.00 Irrecoverable
Company
Total 31,978,479.90 31,978,479.90 -----
（2） Other receivables in the combination which adopts aging analysis method to
determine provision for bad debt:
Closing Balance
Aging Provision for Bad
Other Receivables Rate Chargeable（%）
Account
Within 1 year 30,024,764.50 600,495.29 2.00
1－2 years 11,726,501.13 586,325.06 5.00
2－3 years 29,495,156.54 2,949,515.65 10.00
3－4 years 81,219,807.75 16,243,961.55 20.00
4－5 years 126,255,041.04 37,876,512.31 30.00
Over 5 years 11,829,496.26 5,914,748.14 50.00
Total 290,550,767.22 64,171,558.00 -----
Continued：
Opening Balance
Aging Provision for Bad
Other Receivables Rate Chargeable（%）
Account
Within 1 year 50,759,123.93 1,015,182.50 2.00
1－2 years 10,927,487.54 546,374.38 5.00
2－3 years 38,628,684.84 3,862,868.48 10.00
3－4 years 80,510,988.51 16,102,197.70 20.00
4－5 years 125,133,739.57 37,540,121.87 30.00
Over 5 years 11,283,215.23 5,641,607.61 50.00
Total 317,243,239.62 64,708,352.54 -----
（3） Other receivables with non-significant single amount and individual provision for
bad debts at the end of period
Notes on the Financial Statements Page 29
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
Closing Balance
Name Other Provision for Rate Chargeable
Reasons of Withdrawal
Receivables Bad Account （%）
Reserve fund ,personal social
security borrowed by the 1,346,656.20 26,933.12 2.00 Management assertion
employees
Sell Dabao cement on a
560,610.00 560,610.00 100.00 Irrecoverable
commission basis
Hainan Development Bank 440,000.00 440,000.00 100.00 Irrecoverable
Hainan Sanli Industry and
283,478.62 283,478.62 100.00 Irrecoverable
Trade Company
Chamber of Commerce of
270,000.00 270,000.00 100.00 Irrecoverable
Hainan Province
Telephone rate of customers
268,542.54 268,542.54 100.00 Irrecoverable
of PEARL RIVER Square
China Construction Sixth
Engineering Division Group, 260,335.00 260,335.00 100.00 Irrecoverable
Ltd
Huazhou Jianan Company 200,000.00 200,000.00 100.00 Irrecoverable
PEARL RIVER
184,911.62 184,911.62 100.00 Irrecoverable
Advertisement Company
Initial installation charge of
156,271.60 156,271.60 100.00 Irrecoverable
telephone
Withdrawal of
Amount below RMB150000 non-recoverable amount
3,428,422.26 3,074,469.08 89.68
（87 units） according to the
estimate
Total 7,399,227.84 5,725,551.58 -----
2) Situation of the current bad debt provision withdrawn, recovered or reversed:
The amount of current bad debt provision withdrawn was RMB 6,768,105.59 yuan.
3) There is no money owed by the shareholders who hold more than 5% (5% is included) of
voting shares of the Company in the closing other receivables.
4) Top 5 units of other receivables of the closing balance gathered on the basis of parties
which owe the money:
Ratio in
Closing Closing
Nature of Amount of Balance of
Name Closing Balance Aging
Money Other Bad Debt
Receivables Provisions
(%)
Payment for the
Public Investment Co., Ltd 100,400,000.00 3-5 years 30.43 26,420,000.00
project
Payment for the
Beijing Kangtai Xingye Investment project and
102,500,000.00 3-5 years 31.07 26,000,000.00
Co.,Ltd intercourse
funds
Payment for the
Singapore Great Land Holdings project and
67,951,701.88 1-5 years 20.60 9,319,843.71
Co.,Ltd intercourse
funds
Shenzhen Yinxiang Computers Intercourse Over 5
6,482,625.00 1.96 6,482,625.00
Co., Ltd. funds years
Notes on the Financial Statements Page 30
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
Ratio in
Closing Closing
Nature of Amount of Balance of
Name Closing Balance Aging
Money Other Bad Debt
Receivables Provisions
(%)
Within 1
Hainan living department store The owner owes 3,240,753.61
year
0.98 89,472.52
Total 280,575,080.49 85.04 68,311,941.23
In 2011, “Agreement on Special Railway Sidings for Mulin Town as well as Coal Wholesale
Market Construction Cooperation Project” and supplementary agreement of project were signed
by between the Company and Zhonghe Investment Co., Ltd. (hereinafter referred to as “Zhonghe
Investment”), which stipulate the joint investment of both parties in the special railway sidings for
Mulin town as well as coal wholesale market construction project. Under the agreement, the
staged financing is required from both parties, of which covers the upper limit investment amount
for the PEARL RIVER Holding is RMB140 million. The Beijing Branch of Investment &
Consultation Firm which belongs to the Company will supervise the use of license and official
seal of Zhonghe Investment. Both parties signed the supplementary agreement of investment in
2012, which stipulates an additional increase of RMB37 million yuan contributed by the Company.
As the project is not approved and initiated and production line is not carried out really, the
Company recovered the investment of RMB40 million yuan in 2013 and RMB36.6 million in
2014. Zhonghe Investment mortgaged the project land and real estate to the Company in 2014, but
no registration of mortgage was carried out.
The main intercourse funds between the Company and Beijing Kangtai Xingye Investment Co.,
Ltd. (hereinafter referred to as “Kangtai Xingye”) consist of the money for cooperation of project.
In 2011, the Company has signed a Cooperation Agreement together with Beijing Kangtai Xingye
Investment Co., Ltd. and the natural person, GU Lijun. Under this agreement, a project company
will be co-founded by the capital contribution of RMB70 million from the natural person and the
capped capital contribution of RMB64 million from the Company, with responsibility for the
development and sales of the iron and ore resources at Dujiawan Magnetite Iron Ore and
Zhaojiayuan Iron Ore located at Shiyan City, Hubei Province. Kangtai Xingye used its own 70%
of equities holding in Yuxi Shengying Mining, Zhongjia Sun Energy Technology (Group) Co.,
Ltd. used its own 10% of equities holding in Yuxi Shengying Mining and Natural Person, GU
Notes on the Financial Statements Page 31
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
Lijun used his own 70% of equities holding in Yuxi Shengying Mining as the pledged collateral to
the Company, but no registration of pledge was carried out. In 2012, according to the progress of
investment in the project, three parties signed a Supplementary Agreement which stipulated an
additional increase of investment of RMB36 million from the Company, those investments would
be used for the upgrading of production lines in above-mentioned two mining areas and building
more production lines.
In May 2013 and August 2013, the Company has signed a Cooperation Agreement together with
Singapore Great Land Holdings Ltd. (hereinafter referred to as “Singapore Great Land”),
According to this Agreement, the Company planned to develop the Land No. 20 owned by Sanya
PEARL RIVER Tube-pipe Co., Ltd. and located in Lizhigou Industrial Park, Hairun Road, Sanya
City. The Company has paid with RMB50 million for planning to become the assignee of 80%
equities in the project company owned by Singapore Great Land. In June 2015, the use certificate
of this land was issued. At present, all parties are discussing for the procedures of transferring
ownership.
Note 6 Inventories
1) Classification of inventories
Closing Balance Opening Balance
Items Book Balance Provision for Book Value Book Balance Provision for Book Value
Fall in Price Fall in Price
Raw
1,934,289.39 1,934,289.39 3,842,806.40 3,842,806.40
materials
Low-value
consumption 368,586.95 368,586.95 468,875.07 468,875.07
goods:
Finished
336,527.00 336,527.00 481,325.15 481,325.15
goods
Constructing
development 618,569,588.54 17,439,325.19 601,130,263.35 505,152,399.54 17,439,325.19 487,713,074.35
product
Development
60,332,670.16 21,726,889.27 38,605,780.89 60,332,670.16 21,726,889.27 38,605,780.89
products
Consumptive
biological 33,627.19 33,627.19 33,627.19 33,627.19
assets
Total 681,575,289.23 39,166,214.46 642,409,074.77 570,311,703.51 39,166,214.46 531,145,489.05
The closing book value of inventories used for the guarantee was RMB 106,500,759.37 yuan, the
details are set forth in Note 44
Notes on the Financial Statements Page 32
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
2) Provision for fall in price of inventories
Current Increase Current Decrease
Opening Closing
Categories Amount
Balance Amount Amount Balance
Other Written Other
Withdrawn Reversed
Off
Products
21,726,889.27 21,726,889.27
Developed
Constructing
development 17,439,325.19 17,439,325.19
product
Total 39,166,214.46 39,166,214.46
3) Description on capitalization of borrowing cost included in the closing balance of
inventories
Current Decrease Capitalization rate
Name of Opening Current Closing of capitalized
Inventory Balance Increase Decrease of Other Balance amount confirmed
Sales Decrease in this period (%)
Meilin
Qingcheng（Phase 67,446,185.56 7,186,859.93 - - 58,338,205.49 4.42%
III）
Total 67,446,185.56 7,186,859.93 - - 58,338,205.49 4.42%
4) Development Cost
Estimated
Total Investment
Name of Project Starting Time Completion Closing Balance Opening Balance
Estimated
Time
Wuhan Meilin
April 2013 June 2016 640,000,000.00 601,130,263.35 487,713,074.35
Qingcheng, Phase III
Hebei New
17,439,325.19 17,439,325.19
Residential Project
Total 640,000,000.00 618,569,588.54 505,152,399.54
Phase III of Meilin Qingcheng of Hubei Real Estate owned by the subsidiary covers 18138 square
meters of land area and 73363 square meters of construction area.
New Residential Project of Hebei Real Estate owned by the subsidiary is located in Luoling
Community, Luquan City, Shijiazhuang City, covers 1000 acres of land area and about 1600000
square meters of construction area, it is planned to cover 400000 square meters of construction
area in Phase I with a building period of 3-5 years, no any progress was carried out because the
relocation plan is not completed.
5) Products Developed
Completion Opening Current Closing
Name of Project Current Increase
Time Balance Decrease Balance
Wuhan Meilin August
497,649.84 497,649.84
Qingcheng, Phase I 2006
Wuhan Meilin September
7,117,653.91 7,117,653.91
Qingcheng, Phase II 2009
Haikou Dijing Building,
In 1995 5,315,696.54 5,315,696.54
6 floors
Notes on the Financial Statements Page 33
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
Completion Opening Current Closing
Name of Project Current Increase
Time Balance Decrease Balance
Haikou Longzhu
In 2004 1,598,659.60 1,598,659.60
Building, 21 floors
Garage of Haikou
6,919,373.98 6,919,373.98
PEARL RIVER Square
Garage of Haikou
In 2004 2,664,000.00 2,664,000.00
Longzhu Building
Rear Cubicle of 954,436.94 954,436.94
Underground Garage of
35,265,199.35 35,265,199.35
Shanghai Rose Garden
Total 60,332,670.16 60,332,670.16
6) Consumptive Biological Assets
Item Closing Balance Opening Balance
Meat Animals 33,627.19 33,627.19
Total 33,627.19 33,627.19
Note 7 Other current assets
Item Closing Balance Opening Balance
Hua bao Trust co.,LTD 4,000,000.00
Total 4,000,000.00
Note: The subsidiaries of Hainan Pearl River Industrial Co., Ltd. Shanghai real estate company
signed a "cash and increased profits by the collection of Funds Trust Scheme funds trust
contract"with Warburg trust limited liability company, share subscription RMB 4 million yuan
Note 8 Available-for-sale financial assets
1) Information of available-for-sale financial assets
Closing Balance Opening Balance
Item Book Balance Impairment Book Value Book Balance Impairment Book Value
Provision Provision
Available-f
or-sale
equity
instruments
：
Measured
at fair value
Measured
29,263,555.29 17,852,245.39 11,411,309.90 35,263,555.29 23,852,245.39 11,411,309.90
at the cost
Total 29,263,555.29 17,852,245.39 11,411,309.90 35,263,555.29 23,852,245.39 11,411,309.90
2) Available-for-sale financial assets measured at the fair value at the end of report period
There is no available-for-sale financial assets measured at the fair value at the end of reportperiod.
Notes on the Financial Statements Page 34
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
3) Equity instruments measured at the cost at the end of report period
Ratio of shares Book Balance
held in the
Investee Opening Current Current Closing
investee
(%) Balance Increase Decrease Balance
Hainan PEARL RIVER Tube-pipe
Co., Ltd. 1.33 426,315.00 426,315.00
Chamber of Commerce of Hainan
Province 6.67 500,000.00 500,000.00
Zhong Wang Cu Technology
Investment Co., Ltd. 10.00 10,000,000.00 10,000,000.00
Hainan Great Land PEARL
RIVER Foundation Work Co., Ltd. 2.00 160,000.00 160,000.00
Guangzhou PEARL RIVER
Investment Management Co., Ltd. 9.4785 18,177,240.29 18,177,240.29
Hainan Nanyang Ships Industry
Co., Ltd. 0.66 0.00
Hainan Macun Port Company 15.00 6,000,000.00 6,000,000.00
Total 35,263,555.29 6,000,000.00 29,263,555.29
Continued：
Impairment Provision
Current Cash
Investee Opening Current Current Closing Bonus
Balance Increase Decrease Balance
Hainan PEARL RIVER Tube-pipe
Co., Ltd.
Chamber of Commerce of Hainan
Province 500,000.00 500,000.00
Zhong Wang Cu Technology
Investment Co., Ltd. 10,000,000.00 10,000,000.00
Hainan Great Land PEARL RIVER
Foundation Work Co., Ltd.
Guangzhou PEARL RIVER
Investment Management Co., Ltd. 7,352,245.39 7,352,245.39
Hainan Nanyang Ships Industry
Co., Ltd. 0.00
Hainan Macun Port Company 6,000,000.00 6,000,000.00
Total 23,852,245.39 6,000,000.00 17,852,245.39
Notes on the Financial Statements Page 35
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
Note 9 Long-term Equity Investment
Current Increase or Decrease
Opening Investment Adjustment of
Investee Additional Contribution Results Other
Balance
Contribution Reduced Recognized by Comprehensive
Equity Method Income
1. Associated Enterprises
Sanya Wanjia Industry Co.,
33,811,762.82 -159,255.52
Ltd.
Beijing Viewpoint Discovery
1,472,998.82 -75,668.74
Media Co., Ltd.
Sub-total 35,284,761.64 -234,924.26
Total 35,284,761.64 -234,924.26
Continued：
Current Increase or Decrease
Closing
Declared to Closing Balance of
Investee Change of Impairment
grant cash Balance Impairment
Other Provision Other
dividends or Reserve
Equities Withdrawn
profits
1. Associated Enterprises
Sanya Wanjia Industry Co.,
33,652,507.30
Ltd.
Beijing Viewpoint Discovery
1,397,330.08
Media Co., Ltd.
Sub-total 35,049,837.38
Total 35,049,837.38
The Company’s long-term equity investment does not the situation that the capacity of remitting
funds to the other companies is restricted.
Note 10 Investment-based real estate
1) Information of investment-based real estate
Houses and Construction in
Item Land Use Right Total
buildings Progress
1. Book Value
1.1 Opening Balance 32,389,865.79 32,389,865.79
1.2 Current Increase
1.3 Current Decrease 858,834.08 858,834.08
（1）Disposal 858,834.08 858,834.08
1.4 Closing Balance 31,531,031.71 31,531,031.71
2. Accumulative
Depreciation
(Amortization)
2.1 Opening Balance 8,417,866.08 8,417,866.08
2.2 Current Increase 551,085.46 551,085.46
Notes on the Financial Statements Page 36
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
Houses and Construction in
Item Land Use Right Total
buildings Progress
（ 1 ） Amount
Withdrawn or 551,085.46 551,085.46
Amortized
2.3 Current Decrease 304,446.88 304,446.88
（1）Disposal 304,446.88 304,446.88
2.4 Closing Balance 8,664,504.66 8,664,504.66
3. Impairment
Provision
3.1 Opening Balance 3,081,199.41 3,081,199.41
3.2 Current Increase
3.3 Current Decrease
（1）Disposal
3.4 Closing Balance 3,081,199.41 3,081,199.41
4. Book Value
4.1 Closing Book Value 19,785,327.64 19,785,327.64
4.2 Opening Book
20,890,800.30 20,890,800.30
Value
2) Description on investment-based real estate
The closing book value of assets mortgaged was RMB15,739,646.26 yuan, the details are set
forth in Note 44.
Note 11 Original value and depreciation of fixed assets
1) Information of fixed assets
Houses and Common Other
Item Transportation Total
buildings Equipments Equipments
1. Totality of
Original Book
Value
1.1 Opening
484,171,297.64 67,638,005.65 36,370,053.11 54,509,261.26 642,688,617.66
Balance
1.2 Current
8,030.00 198,700.00 548,077.31 754,807.31
Increase
（1）Purchase 8,030.00 198,700.00 548,077.31 754,807.31
（2）Transferred in
from Construction
in Progress
（ 3 ） Other
Transfer-in
1.3 Current
3,407,368.69 16,430,430.43 5,518,890.23 6,772,202.16 32,128,891.51
Decrease
（ 1 ） Disposal or
3,407,368.69 16,430,430.43 5,518,890.23 5,787,366.86 31,144,056.21
Scrap
（ 2 ） Other
- - - 984,835.30 984,835.30
Transfer-out
1.4 Closing
480,763,928.95 51,215,605.22 31,049,862.88 48,285,136.41 611,314,533.46
Balance
2. Accumulative
Depreciation
Notes on the Financial Statements Page 37
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
Houses and Common Other
Item Transportation Total
buildings Equipments Equipments
2.1 Opening
108,533,367.07 42,330,717.73 27,975,750.89 47,022,708.00 225,862,543.69
Balance
2.2 Current
9,053,737.00 2,460,312.56 2,964,764.06 176,840.17 14,655,653.79
Increase
（ 1 ） Amount
9,053,737.00 2,457,365.01 2,964,764.06 176,840.17 14,652,706.24
Withdrawn
2.3 Current
2,836,738.54 15,383,909.16 4,584,177.15 5,822,064.98 28,626,889.83
Decrease
（ 1 ） Disposal or
2,836,738.54 15,383,909.16 4,584,177.15 5,455,968.80 28,260,793.65
Scrap
（ 2 ） Other
366,096.18 366,096.18
Transfer-out
2.4 Closing
114,750,365.53 29,407,121.13 26,356,337.80 41,377,483.19 211,891,307.65
Balance
3. Impairment
Reserve
3.1 Opening
7,499,295.92 7,499,295.92
Balance
3.2 Current
Increase
3.3 Current
Decrease
3.4 Closing
7,499,295.92 7,499,295.92
Balance
4. Totality of Book
Value
4.1 Closing Book
358,514,267.50 21,808,484.09 4,693,525.08 6,907,653.22 391,923,929.89
Value
4.2 Opening Book
368,138,634.65 25,307,287.92 8,394,302.22 7,486,553.26 409,326,778.05
Value
2) Other descriptions on fixed assets
（1） The closing book value of assets used for the guarantee was RMB 263,115,406.80 yuan,
the details are set forth in Note 44.
(2) The closing original value of fixed assets that continued to work after being depreciated
fully was RMB42,464,170.02 yuan.
Note 12 Construction in progress
1) Information of construction in progress
Closing Balance Opening Balance
Item Book Impairment Book Book Impairment Book
Balance Reserve Value Balance Reserve Value
Snow Town
5,648,964.09 2,650,000.00 2,998,964.09 5,648,964.09 2,400,000.00 3,248,964.09
Train 550
Snow Town
4,180,000.00 1,766,000.00 2,414,000.00 4,180,000.00 1,600,000.00 2,580,000.00
Train 400
Early Stage of
360,000.00 360,000.00 - 360,000.00 360,000.00
Snow Town
Snow Town
75,894,798.30 - 75,894,798.30 73,214,690.93 73,214,690.93
Integrated
Notes on the Financial Statements Page 38
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
Closing Balance Opening Balance
Item Book Impairment Book Book Impairment Book
Balance Reserve Value Balance Reserve Value
Service Center
Total 86,083,762.39 4,776,000.00 81,307,762.39 83,403,655.02 4,000,000.00 79,403,655.02
2) Current change of important constructions in progress
Current amount
Opening Current
Item transferred into Other Decrease Closing Balance
Balance Increase
fixed assets
Snow Town
Integrated Service 73,214,690.93 2,680,107.37 75,894,798.30
Center
Total 73,214,690.93 2,680,107.37 75,894,798.30
Continued：
Ratio of
Budget investment Including： Current
Progress of Accumulative
(10 in the Current Capitalization Sources of
Item Construction Interest
thousand construction Interest Rate of Funds
(%) Capitalized
yuan) in the Capitalized Interest (%)
budget (%)
Snow Town
Borrowing
Integrated 10,605.84 72.00 16,158,756.11 2,591,467.37 3.18% from the
Bank
Service Center
Total 10,605.84 72.00 —— 16,158,756.11 2,591,467.37 3.18%
3) Information of withdrawal of impairment provision of construction in progress in this
report period
Current Amount
Item Reasons of Withdrawal
Withdrawn
Snow Town Train 550 250,000.00 The progress of project starting fails to reach the
expectation, which causes the reduction of use value
Snow Town Train 400 166,000.00 of assets
Early Stage of Snow Town 360,000.00 The scheme design termination
Total 776,000.00
Note 13 Materials for the construction
Item Closing Balance Opening Balance
Devices with Special Uses 393,706.60 393,706.60
Total 393,706.60 393,706.60
Notes on the Financial Statements Page 39
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
Note 14 Intangible Assets
1) Information of intangible assets
Trademark
Item Software Land Use Right Other Total
Right
1. Totality of
Original Book
Value
1.1 Opening
2,048,798.28 36,008,635.65 93,900.00 2,087,132.00 40,238,465.93
Balance
1.2 Current
37,547.17 37,547.17
Increase
（1）Purchase 37,547.17 37,547.17
1.3 Current
15,920.00 695,732.00 711,652.00
Decrease
1.4 Closing
2,070,425.45 36,008,635.65 93,900.00 1,391,400.00 39,564,361.10
Balance
2. Accumulative
Depreciation
2.1 Opening
1,497,757.23 7,854,990.76 14,867.50 440,296.70 9,807,912.19
Balance
2.2 Current
81,678.64 458,507.22 4,695.00 13,727.80 558,608.66
Increase
（ 1 ） Amount
81,678.64 448,194.90 4,695.00 13,727.80 548,296.34
Withdrawn
2.3 Current
4,643.39 317,369.32 322,012.71
Decrease
2.4 Closing
1,574,792.48 8,313,497.98 19,562.50 136,655.18 10,044,508.14
Balance
3. Impairment
Reserve
3.1 Opening
911,400.00 911,400.00
Balance
3.2 Current
Increase
3.3 Current
Decrease
3.4 Closing
911,400.00 911,400.00
Balance
4. Totality of Book
Value
4.1 Closing Book
495,632.97 27,695,137.67 74,337.50 343,344.82 28,608,452.96
Value
4.2 Opening Book
551,041.05 28,153,644.89 79,032.50 735,435.30 29,519,153.74
Value
2) Description of intangible assets
The closing book value of land use rights used for the guarantee or mortgage was RMB
26,024,578.81yuan, the details are set forth in Note 44.
Note 15 Long-term deferred expenses
Opening Current Current Other Closing
Item
Balance Increase Amortization Decrease Balance
Decoration and Reform 4,818,919.52 1,212,877.28 2,497,394.99 1,108,647.25
Lease of Snow Park 1,200,000.00 450,000.00 750,000.00
Notes on the Financial Statements Page 40
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
Opening Current Current Other Closing
Item
Balance Increase Amortization Decrease Balance
Publicity of Snow Town 66,733.49 30,799.98 35,933.51
Use of Fish Pool in Snow Town 544,885.02 139,413.00 405,472.02
Use of Small Skiing Park in
808,505.23 189,609.96 618,895.27
Snow Town
Use of Facilities of Yangcao
350,000.00 60,000.00 290,000.00
Mountain
Use of Recreation Facility of
Cinema City in Erlong 240,000.00 60,000.00 180,000.00
Mountain
Total 8,029,043.26 2,142,700.22 2,497,394.99 3,388,948.05
Note 16 Deferred tax assets/deferred tax liabilities
1) Deferred tax liabilities not offset
Closing Balance Opening Balance
Item Taxable Temporary Deferred Tax Taxable Temporary Deferred Tax
Differences Liabilities Differences Liabilities
Variation of Fair Value of
Available-for-Sale Financial
Assets
The difference between the
carrying amount of the net assets
and the fair value of the
2,454,249.48 613,562.37 2,516,911.15 629,227.79
identifiable net assets
recognized in business
combinations
Total 2,454,249.48 613,562.37 2,516,911.15 629,227.79
2) Deferred tax assets/deferred tax liabilities presented in the net amount after the offsetting
Closing balance of Opening offset Opening balance of
Closing offset amount
deferred tax assets or amount of deferred deferred tax assets or
Item of deferred tax assets
liabilities after the tax assets and liabilities after the
and liabilities
offsetting liabilities offsetting
Deferred Tax Assets
Deferred Tax
613,562.37 629,227.79
Liabilities
3) Details of deductible temporary difference of deferred tax assets not recognized
Item Closing Balance Opening Balance
Provision for Asset Impairment 193,764,602.26 191,773,493.16
Deductible Losses 443,668,594.90 377,242,517.95
Total 637,433,197.16 569,016,011.11
It is uncertain whether to obtain the sufficient taxable income in the future, so we did not
recognize the deferred tax assets in relevant to the deductible temporary difference and deductible
Notes on the Financial Statements Page 41
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
loss.
4) Deductible losses for which no deferred tax assets are recognized will expire in the
following
Item Closing Balance Opening Balance Remark
2016 43,504,057.87 43,504,057.87
2017 70,183,647.33 70,183,647.33
2018 73,280,356.39 73,280,356.39
2019 98,440,117.30 98,440,117.30
2020 109,230,149.28 91,834,339.06
2021 49,030,266.73
Total 443,668,594.90 377,242,517.95
Note 17 Other Non-current Assets
Category and Item Closing Balance Opening Balance
Properties 1,581,840.00 1,581,840.00
Total 1,581,840.00 1,581,840.00
Note: on September 20, 2014, an Agreement on Debt Offset was signed by between Mudanjiang
Mingzhen Real Estate Development Co., Ltd. (hereinafter referred to as “Mingzhen Company”),
Mudanjiang Jingbo Lake Scenery Environmental Production Property Management Co., Ltd.
(hereinafter referred to as “Environmental Protection Property Company”) and our subsidiary
Mudanjiang Wanjia Star Hotel Co., Ltd.. Because the above-mentioned three parties have the debt
relation with each other, three parties reach an Agreement as follows: Mingzhen Company used its
Shangjing Chuanshuo D12# brick-concrete villa (located in Jingbo Lake Town) with a value of
RMB1,581,840.00 (131.82 square meters x RMB12 thousand) offsetting the compensation for the
lease of RMB1,019,340.00 that Environmental Protection Property Company owed the Company,
of which covered a difference of RMB562,500.00 that had been recognized in the income for the
year 2014, but no procedure of ownership transfer was carried out as December 31, 2015.
Note 18 Provision of asset impairment
Closing
Current Increase Current Decrease
Opening Balance
Item
Balance Current Current Current Current
Withdrawal Transfer-in Reverse Transfer-out
Bad debt provision 113,263,137.98 7,246,937.31 27,660.65 4,167.56 120,478,247.08
Provision for decline in value of
39,166,214.46 - 39,166,214.46
inventories
Provision for impairment of
23,852,245.39 - 6,000,000.00 17,852,245.39
available-for-sale financial assets
Provision for impairment of
3,081,199.41 - 3,081,199.41
investment-based real estate
Notes on the Financial Statements Page 42
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
Closing
Current Increase Current Decrease
Opening Balance
Item
Balance Current Current Current Current
Withdrawal Transfer-in Reverse Transfer-out
Provision for impairment of fixed
7,499,295.92 - 7,499,295.92
assets
Provision for impairment of
4,000,000.00 776,000.00 4,776,000.00
construction in progress
Provision for impairment of
911,400.00 - 911,400.00
intangible assets
Total 191,773,493.16 8,022,937.31 27,660.65 6,004,167.56 193,764,602.26
Note 19 Accounts Payable
Item Closing Balance Opening Balance
Accounts Payable for the
50,734,520.24 8,603,542.20
Construction
Accounts Payable for the Materials 6,254,501.97 6,290,670.38
Final Payment of Investment 5,000,000.00 5,000,000.00
Deposit 1,174,934.45 1,178,601.33
Intercourse Payment for Suppliers 3,376,792.10 2,582,997.37
Other 694,653.41 657,672.12
Total 67,235,402.17 24,313,483.40
Significant accounts payable with aging of more than one year
Name Closing Balance Reasons of Outstanding Accounts
Final Payment for Desi Hotel in
Lin Deying, Chen Guanwen 5,000,000.00
Snow Town
Supervision Company 3,572,235.33 No Urging Payment by Counterpart
Heilongjiang Juncheng Wood
2,073,495.01 Financial Strain
Manufacturing Co., Ltd.
Mudanjiang Longxiang Boiler
1,425,651.00 Financial Strain
Installation Co., Lt.
Total 12,071,381.34
Note 20 Accounts Received in Advance
1) Information of accounts received in advance
Item Closing Balance Opening Balance
Lease of Garage 19,245,501.17 13,271,791.17
Tourist Team 2,611,333.20
Heating 1,615,580.49
Cooperative Operation 400,000.00 3,151,256.99
Pre-deposit for Consumption 1,605,117.84 223,528.25
Property Management 13,520,433.90 9,972,544.08
Notes on the Financial Statements Page 43
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
Item Closing Balance Opening Balance
Supporting of Heating Facilities 3,154,530.45
Houses in Pre-sell 719,879,774.00 393,459,984.00
Other 60,336.41 594,121.56
Total 754,711,163.32 428,054,670.19
2) Significant accounts received in advance with aging of more than one year
Name Closing Balance Reasons of Outstanding Accounts
Accounts received in advance with pending to
Taxi Garage 12,884,718.17 be transferred in （ Hubei Pearl River received
the rent in advance）
Total 12,884,718.17
Note 21 Remunerations payable for employees
1) List of remunerations payable for employees
Item Opening Balance Current Increase Current Decrease Closing Balance
Short-term Wage 13,280,321.02 91,818,925.75 92,220,430.29 12,878,816.48
Post-employment Benefit -
Defined Contribution Plans 68,947.64 6,769,465.22 6,809,077.12 29,335.74
Payable
Dismiss Welfare 4,000.00 15,700.00 19,700.00
Total 13,353,268.66 98,604,090.97 99,049,207.41 12,908,152.22
2) List of Short-term Wage
Item Opening Balance Current Increase Current Decrease Closing Balance
Salary, Reward, Allowance
4,398,887.58 82,644,756.98 83,585,205.23 3,458,439.33
and Subsidy
Employee Services and
3,285,651.86 3,285,651.86
Benefits
Social Insurance Charges 31,211.98 3,340,914.33 3,358,855.38 13,270.93
Including ： Basic Medical
26,420.72 2,823,266.95 2,838,512.15 11,175.52
Insurance
Employment Injury
3,131.84 181,504.40 183,239.30 1,396.94
Insurance
Maternity Insurance 1,659.42 202,823.78 203,784.73 698.47
Other 133,319.20 133,319.20
Housing Fund 92,438.40 914,012.70 971,947.50 34,503.60
Union Funds and Staff
8,757,783.06 1,621,289.88 1,006,470.32 9,372,602.62
Training Expense
Short-term Absence from
12,300.00 12,300.00
Duty Paid
Other Short-term Wage
Total 13,280,321.02 91,818,925.75 92,220,430.29 12,878,816.48
Notes on the Financial Statements Page 44
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
3) List of Defined Contribution Plans
Item Opening Balance Current Increase Current Decrease Closing Balance
Basic Endowment Insurance 65,696.80 6,390,219.73 6,427,977.73 27,938.80
Unemployment Insurance 3,250.84 379,245.49 381,099.39 1,396.94
Total 68,947.64 6,769,465.22 6,809,077.12 29,335.74
Note 22 Taxes Payable
Item Closing Balance Opening Balance
Value added tax 382,371.13
Individual income tax -21,639,530.80 -908,809.20
City construction and
-1,416,429.93 -33,603.19
maintenance tax
Corporate income tax -3,974,963.92 505,401.42
Property tax 1,527,658.82 617,550.29
Business tax 273,906.73 93,587.79
Land use tax -8,114,779.09 -5,878,951.29
Increment tax on land value 346,088.02 260,668.02
Educational surtax -1,106,727.10 -163,049.32
Others 177,046.04 251,541.85
Total -33,545,360.10 -5,255,663.63
Note: The debit balance of current taxes payable mainly includes the taxes paid in advance for
the houses resold by Bubei Pearl River Real Estate Company.
Note 23 Interest Payable
Item Closing Balance Opening Balance
Interest on Long-term Loans
88,548,041.37 59,153,440.18
under Straight Mortgage
Interest on Loans from Other Companies 110,665,858.87 104,399,517.62
Interest on Entrusted Loans 10,449,888.49 12,437,889.25
Others 2,443,415.22 2,439,133.00
Total 212,107,203.95 178,429,980.05
Note 24 Dividends Payable
Reasons why not to be
Item Closing Balance Opening Balance
paid over one year
Dividends payable for the legal person 3,213,302.88 3,213,302.88 Suspend payment
Total 3,213,302.88 3,213,302.88
Notes on the Financial Statements Page 45
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
Note 25 Other Payables
1) Other payables presented as per the nature of accounts
Nature of Account Closing Balance Opening Balance
Borrowing 402,857,649.92 420,603,739.10
Payment for land transfer 43,741,510.75 43,000,000.00
Collection for property management 45,149,561.20 53,147,608.29
Money owned by the suppliers 3,934,276.29 1,854,276.29
Accrued Expenses 6,418,338.19 5,568,338.41
Deposit for Quality of Decoration 7,927,465.21 8,415,340.21
Maintenance Fund 3,014,488.35 2,956,074.81
Funds Raised for Houses 1,770,000.00 2,770,000.00
Risk Funds of Employees 1,190,387.57 1,136,920.09
Working Fund of Water and Electricity 6,053,932.19 4,514,698.79
Sincerity gold 10,000,000.00
Others 14,214,527.26 17,311,963.69
Total 546,272,136.93 561,278,959.68
2) Significant other payables with aging of more than one year
Reasons of Outstanding
Name Closing Balance
Accounts
Beijing Xinxing Real Estate
156,897,912.90 The borrowing is not expired
Development General company
Beijing Wangfa Real Estate Development
78,525,000.00 The borrowing is not expired
Holdings Co., Ltd
Chongqing international trust co., LTD 21,981,589.12 Financial Strain
Wuhan Zhongsenhua Century Real Accounts Received in Advance
43,000,000.00
Estate Development Co., Ltd. for Land Transfer
Henan letter and home water utilities 20,912,299.82 Financial Strain
Haikou CITIC Hong Chau Coastal
12,275,933.34 The borrowing is not expired
Construction Co., Ltd.
Total 333,592,735.18
Note 26 Non-current liabilities matured within one year
Item Closing Balance Opening Balance
Long-term Borrowing Matured Within
287,761,902.11 353,287,364.69
One Year
Including：Pledged Loan 76,051,656.00
Mortgage Loan 222,805,306.92 229,805,306.92
Guaranteed Loan 64,956,595.19 47,430,401.77
Total 287,761,902.11 353,287,364.69
Notes on the Financial Statements Page 46
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
Note 27 Long-term Borrowing
1) Classification of long-term borrowing
Category Closing Balance Opening Balance
Pledged Loan 76,051,656.00
Mortgage Loan 363,805,306.92 523,805,306.92
Guaranteed Loan 139,456,595.19 143,763,735.11
Sub-total 503,261,902.11 743,620,698.03
Less ： Long-term Borrowing Matured
287,761,902.11 353,287,364.69
Within One Year
Total 215,500,000.00 390,333,333.34
2) Long-term borrowings with large amount
Starting Ending
Closing Opening
Lender Date of Date of Currency Interest Rate
Balance Balance
Borrowing Borrowing
Chongqing International
2012-9-27 2016-4-28 RMB 21.42% 196,805,306.92 196,805,306.92
Trust Co., Ltd.
Guotai Yuanxin Assets
2014-9-15 2016-3-15 RMB 10.86% - 76,051,656.00
Management Co., Ltd.
The benchmark
Harbin Branch of China
2014-10-30 2019-3-30 RMB interest rate has a 24,000,000.00 24,000,000.00
CITIC Bank
float by 10%
Mudanjian Taiping Road The benchmark
Branch of Industrial & 2014-3-28 2020-3-20 RMB interest rate has a 81,456,595.19 81,763,735.11
Commercial Bank of China float by 10%
The benchmark
Mudanjiang Branch of China
2012-1-12 2019-1-11 RMB interest rate has a 58,000,000.00 62,000,000.00
Construction Bank
float by 10%
The benchmark
Haikou Yeshumen Branch of
2009-8-2 2019-8-2 RMB interest rate has a 43,000,000.00 53,000,000.00
Bank of China
float by 10%
The benchmark
Wuhan Branch of Shanghai
2015-1-20 2018-1-19 RMB interest rate has a - 150,000,000.00
Pudong Development Bank
float by 20%
The benchmark
Wuhan Branch of Shanghai
2015-6-24 2018-6-23 RMB interest rate has a 100,000,000.00 100,000,000.00
Pudong Development Bank
float by 20%
Total 503,261,902.11 743,620,698.03
3) Mortgage Loan：
Lender Balance of Loan Pledge
Bank of China, Haikou Yeshumen
196,805,306.92 Three properties owned by Sanya Wanjia Hotel
Branch
Management Co., Ltd and the company has property in
Chongqing International Trust Co.,
43,000,000.00 Sanya
Ltd
Ten properties owned by Mudanjiang Pearl River Wanjia
China Citic Bank Haerbin Branch 24,000,000.00
Tourism Investment Development Group
Wuhan Branch of Shanghai Pudong
100,000,000.00 The Meilin Qingcheng（Phase III）owened by Hubei Pearl
Development Bank River Real Estate Development Co., Ltd.
Total 363,805,306.92 —
Notes on the Financial Statements Page 47
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
4) Guaranteed Loan：
Lender Balance of Loan Guarantor
China construction bank
58,000,000.00 Heilongjiang Xinzheng Guarantee Co., Ltd.
Mudanjiang Branch
Industrial and Commercial Bank of
81,456,595.19 Mengneng International Energy Exploitation Co., Ltd.
China Mudanjiang Branch
Total 139,456,595.19
5)Other descriptions on long-term borrowing
The interest rate of long-term borrowing is ranged from 7.04% to 21.42%.
Note 28 Capital stock
Current Increase（+）or Decrease（－）
Issuance Bonus
Opening Capitalization Closing
Item
Balance of New Shares of Public Other Sub-total Balance
Reserve Fund
Shares
1 ． Shares with conditions
limited to sell
(1) Shares held by the state
(2) Shares held by the
state-owned artificial persons
(3) Shares held by other
1,325,131.00 1,325,131.00
domestic enterprises
Including：
Shares held by the domestic
1,299,500.00 1,299,500.00
legal persons
Shares held by the domestic
25,631.00 25,631.00
natural persons
(4). Shares held by the foreign
companies
Including：
Shares held by the foreign
legal persons
Shares held by the foreign
natural persons
Total shares with conditions
1,325,131.00 1,325,131.00
limited to sell
2．Outstanding shares without
conditions limited to sell
(1) Common Share in RMB 360,445,273.00 360,445,273.00
(2) Foreign Shares Listed at
64,975,000.00 64,975,000.00
Home
(3) Foreign Shares Listed at
Oversea
(4) Others
Notes on the Financial Statements Page 48
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
Current Increase（+）or Decrease（－）
Issuance Bonus
Opening Capitalization Closing
Item
Balance of New Shares of Public Other Sub-total Balance
Reserve Fund
Shares
Total shares without
425,420,273.00 425,420,273.00
conditions limited to sell
Total 426,745,404.00 426,745,404.00
Note 29 Capital reserve
Current Current Closing
Item Opening Balance
Increase Decrease Balance
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
Note 30 Surplus Reserve
Item Opening Balance Current Increase Current Decrease Closing Balance
Statutory surplus
71,852,236.46 71,852,236.46
reserve
General surplus
37,634,827.93 37,634,827.93
reserve
Total 109,487,064.39 109,487,064.39
Note 31 Undistributed profits
Ratio of Withdrawal or
Item Amount
Undistributed Amount (%)
Undistributed Profits at the End of Previous Period
-1,088,060,174.99 —
Before Adjustment
Total Amount of Undistributed Profits at the
—
Beginning of Adjustment Period (+/-)
Undistributed Profits at the Beginning of Period
-1,088,060,174.99 —
After Adjustment
Plus: Current Net Profits Attributive to the Owners
-47,370,594.88 —
of the Parent Company
Less: Appropriation of Statutory Surplus Reserve
Withdrawn
Appropriation of Discretionary Surplus Reserve
Plus：Surplus Reserve Made up for Losses
Other Internal Carry-over of Owner’s Equity
Closing Undistributed Profit -1,135,430,769.87
Notes on the Financial Statements Page 49
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
Note 32 Operating income and operating cost
1) Operating income and operating cost
Item Current Amount Previous Amount
Income Cost Income Cost
Main Business 139,890,677.66 119,343,421.77 125,940,552.56 98,834,069.35
Other Business 9,141,850.74 2,686,504.22 10,177,276.63 1,903,272.52
Total 149,032,528.40 122,029,925.99 136,117,829.19 100,737,341.87
2) Main Business（Accounted as per Industries）
Current Amount Previous Amount
Industry
Operating Income Operating Cost Operating Income Operating Cost
Real Estate
Development
Property
118,897,725.42 108,945,720.20 95,547,448.69 85,885,239.27
Management
Tourist Hotel 20,992,952.24 10,397,701.57 30,393,103.87 12,948,830.08
Total 139,890,677.66 119,343,421.77 125,940,552.56 98,834,069.35
3) Main Business（Accounted as per Regions）
Current Amount Previous Amount
Region
Operating Income Operating Cost Operating Income Operating Cost
Hainan 129,263,957.43 114,904,019.82 109,822,764.56 92,811,348.53
Heilongjiang 8,258,678.00 3,126,864.51 14,326,957.30 4,895,210.17
Hubei 570,446.04 385,963.46 349,224.00 310,731.36
Shanghai 1,797,596.19 926,573.98 1,441,606.70 816,779.29
Total 139,890,677.66 119,343,421.77 125,940,552.56 98,834,069.35
Note 33 Business tax and surcharges
Item Current Amount Previous Amount
Business Tax 5,376,975.72 6,805,891.46
Urban Maintenance & Construction Tax 442,857.90 476,412.41
Education Surcharges 253,712.29 204,176.76
Increment Tax on Land Value 4,205,515.05 9,200.00
Notes on the Financial Statements Page 50
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
Item Current Amount Previous Amount
Other Taxes 126,862.61 136,318.84
Total 10,405,923.57 7,631,999.47
Note 34 Selling expenses
Item Current Amount Previous Amount
Employees’ Wages 405,220.67 1,114,145.29
Advertisement 1,392,667.57 1,144,346.31
Repair 140,530.00
Selling Service 6,690,000.00 -
Others 242,582.78 547,630.37
Total 8,871,001.02 2,806,121.97
Note 35 Administrative expenses
Item Current Amount Previous Amount
Employees’ Wages 13,206,958.52 15,493,989.52
Depreciation 14,189,830.37 16,106,092.25
Business Entertainment 2,728,763.69 3,441,034.93
Business Travel 1,526,947.44 1,592,768.54
Tax 1,793,692.10 1,682,603.42
Amortization of intangible assets and long-term
2,602,040.00 2,670,407.66
deferred expenses
Repair 328,378.88 577,886.60
Insurance 817,666.46
Consulting fees, service charges 2,343,637.99 410,000.00
Traffic 2,153,757.83 2,244,310.77
Office and office supplies 413,401.22 556,518.87
Property management, water and electricity, heating
1,820,962.03 1,612,223.90
costs
Others 1,300,105.17 2,139,542.06
Total 45,226,141.70 48,527,378.52
Notes on the Financial Statements Page 51
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
Note 36 Financial expenses
Category Current Amount Previous Amount
Interest Expense 45,230,435.59 53,473,422.46
Less: Interest Income 3,616,128.15 1,752,443.40
Financial Consultant
Financing Expenses 6,800,478.63 13,433,655.28
Others 377,028.65 396,267.77
Total 48,791,814.72 65,550,902.11
Note 37 Loss on assets impairment
Item Current Amount Previous Amount
Loss on Bad Debts 7,219,276.66 819,765.92
Loss of Impairment of Construction in Progress 776,000.00
Impairment losses on available for sale financial
-6,000,000.00
assets
Total 1,995,276.66 819,765.92
Note 38 Investment income
1) Details of investment income
Item Current Amount Previous Amount
Investment Income from the Long-term
-234,924.26 -205,388.30
Equity Measured Under Equity Method
me from the Disposal of Long-term Equity 38,155,550.74 -
Investment Income from the Disposal of
Long-term Equity
Investment Income from the Disposal of
Financial Assets Which Are Measured at
Their Fair Values and of Which the Variation
Is Included in the Current Profits and Losses
Investment Income from the
Available-for-sale Financial Assets, etc.
Investment Income from the Disposal of
- 124,342,755.05
Available-for-sale Financial Assets
Others 8,271.82 -
Total 37,928,898.30 124,137,366.75
Notes on the Financial Statements Page 52
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
Note 39 Non-operating income
Amount Recorded in
Item Current Amount Previous Amount Current Extraordinary
Gain and Loss
Total Gain on the Disposal of
2,555,707.19 12,073.95 2,555,707.19
Non-current Assets
Including: Gain on the Disposal of
2,462,319.87 12,073.95 2,462,319.87
Fixed Assets
Gain on the Disposal of Intangible
93,387.32 - 93,387.32
Assets
Gain on Debt Restructuring
Gain on Inventory Profit
Income from Compensation for
- 43,773.33 -
Breach of Contract
Others 95,785.15 452,686.58 95,785.15
Total 2,651,492.34 508,533.86 2,651,492.34
Note 40 Non-operating cost
Amount Recorded in
Item Current Amount Previous Amount Current Extraordinary
Gain and Loss
Total Loss on the Disposal of
131,916.10 2,497,989.19
Non-current Assets
Including: Loss on the Disposal of
131,916.10 2,497,989.19
Fixed Assets
Amount Paid for Donation 1,100.00
Loss on Scrap and Damage of Assets 2,456,199.23 90,126.14
Expenditure for Penalty 69,714.35 69,714.35
Expenditure for Compensation,
500,032.27 175,648.42 500,032.27
Penalty and Fine
Others 120,516.82 18,087.20 120,516.82
Total 3,278,378.77 194,835.62 3,278,378.77
Notes on the Financial Statements Page 53
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
Note 41 Income tax expenses
1) List of income tax expenses
Item Current Amount Previous Amount
Current Income Tax Expenses 199,363.38 643,839.49
Deferred Income Tax Expenses -15,665.42 15,210,270.77
Total 183,697.96 15,854,110.26
2) Accounting profits and adjustment process of the income tax expenses
Item Current Amount
Total Profits -50,985,543.39
Income Tax Expenses Calculated at the Statutory/Applicable Tax Rate -12,746,385.85
Influence of Different Tax Rate Adopted by the Subsidiaries
Influence of Adjustment of Previous Income Tax
Influence of the Other Non-taxable Income
Influence of the Non-deducible Cost, Expense and Loss 18,107,402.30
Influence of the Deducible Loss of the Previous Deferred Income Tax Assets
Not Recognized
Current Influence of the Deducible Temporary Difference or the Deducible
-5,191,256.75
Loss of the Current Deferred Income Tax Assets Not Recognized
Recognition of Deferred Tax Assets of Previous Deducible Loss
Other 13,938.26
Income Tax Expenses 183,697.96
Note 42 Notes to cash flow statement
1) Other cash received relating to operating activities
Item Current Amount Previous Amount
Intercourse funds received from Beijing
12,300,000.00 2,500,000.00
Yuanrongtong Assets Management Co., Ltd.
Intercourse funds received from Beijing era
205,000.00
model culture media Co., Ltd.
Intercourse funds received from Xie Ruilong - 200,000.00
Intercourse funds received from Cheng
300,000.00
Shuxian
Intercourse funds received from Chen Jilin 100,000.00
Notes on the Financial Statements Page 54
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
Item Current Amount Previous Amount
Intercourse funds received from Li Peng 11,500,000.00 -
Intercourse funds received from Rent deposit,
maintenance fund and client's payment and 3,500,000.00 4,023,600.00
transfer tax
Intercourse funds received from Collecting
customer's water and electricity, garbage 5,502,810.13 7,001,038.50
disposal, heating gas, viewing fee, etc.
Staff petty cash refund - 436,528.39
Others intercourse funds 3,400,000.00 3,680,000.00
Non-operating income 65,141.94
Interest income 389,354.93 447,100.97
Intercourse funds received from Hailin city
1,237,761.89 -
Changting town snow hostel Scenic Area
Intercourse funds received from Harbin
- 3,642,340.00
Jiangshan International Travel Agency
Others 1,784,834.72 1,148,781.89
Total 40,079,903.61 23,284,389.75
2) Other cash paid relating to operating activities
Item Current Amount Previous Amount
Intercourse funds paid for Beijing
11,948,840.00 17,300,000.00
Yuanrongtong Assets Management Co., Ltd.
Intercourse funds paid for Shan Dong Hui Yu 3,000,000.00
Intercourse funds paid for Xie Lin - 200,000.00
Intercourse funds paid for Cheng Shuxian 300,000.00
Other Intercourse Funds 3,400,000.00
Intercourse funds paid for Rent deposit,
maintenance fund and client's payment and 3,023,000.00
transfer tax
Intercourse funds paid for Collecting
customer's water and electricity, garbage 3,619,893.57
disposal, heating gas, viewing fee, etc.
Expenditure for administration 4,533,549.75 12,008,726.54
Expenditure for Selling 1,185,538.64 1,180,341.32
Non-operating Cost 583,275.43 158,017.54
Reserve Funds Paid 632,304.85 290,735.74
Bank Commission 338,768.84 280,936.05
Others 625,730.16 1,173,579.01
Total 23,148,007.67 42,635,229.77
Notes on the Financial Statements Page 55
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
3) Other cash paided to investment activities
Item Current Amount Previous Amount
the cash outflow of Disposal subsidiary 123,352.41
Total 123,352.41
4) Other cash payments relating to financing activities
Item Current Amount Previous Amount
Service Charge for Financing 4,302,704.04 11,446,555.28
Commission loan fee 58,140.00
Total 4,302,704.04 11,504,695.28
Note 43 Supplementary information of cash flow statement
1) Supplementary information of cash flow statement
Item Current Amount Previous Amount
1. Cash Flow to Adjust the Net Profit into the Operating
Activities
Net Profit -51,169,241.35 18,641,274.06
Plus: Provision for Asset Impairment 1,995,276.66 819,765.92
Depreciation of Fixed Assets, Consumption of Oil and Gas
15,164,316.52 17,226,883.18
Assets and Depreciation of Productive Biological Assets
Amortization of Intangible Assets 559,669.98 605,337.98
Amortization of Long-term Deferred Expenses 2,142,700.22 2,454,539.88
Loss on the Disposal of Fixed Assets, Intangible Assets
-3,224,684.28 -204,803.91
and Other Long-term Assets (Income is Marked as “-”)
Loss on the Discarding of Fixed Assets (Income is
2,500,181.85 -7,067.42
Marked as “-”)
Loss on the Variation of Fair Value (Income is Marked as
“-”)
Financial Expenses (Income is Marked as “-”) 48,936,433.19 65,403,843.97
Investment Loss (Income is Marked as “-”) -37,928,898.30 -124,137,366.75
Notes on the Financial Statements Page 56
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
Item Current Amount Previous Amount
Decrease in Deferred Income Tax Assets (Increase is
- 15,210,270.77
Marked as “-”)
Increase in Deferred Income Tax Liabilities (Decrease is
-15,665.42 -
Marked as “-”)
Decrease in Inventory (Increase is Marked as “-”) -102,163,618.46 -46,689,362.00
Decrease in Operating Items Receivable (Increase is
-114,889,161.41 46,525,715.08
Marked as “-”)
Increase in Operating Items Payable (Decrease is Marked
399,438,256.34 -90,811,825.58
as “-”)
Other
Net Cash Flow from Operating Activities 161,345,565.54 -94,962,794.82
2. Significant Investment and Financing Activities without
Cash Receipts and Payments
Conversion of Debt Into Capital
Convertible Bonds Maturing Within One Year
Fixed Assets Acquired Under Financial Lease
3. Change in Cash and Cash Equivalent
Closing Balance of the Cash 143,110,210.79 136,016,986.29
Less: Opening Balance of the Cash 205,762,131.54 97,404,192.62
Plus: Closing Balance of the Cash Equivalent
Less: Opening Balance of the Cash Equivalent
Net Increase of Cash and Cash Equivalent -62,651,920.75 38,612,793.67
2) Composition of cash and cash equivalent
Item Closing Balance Opening Balance
1. Cash 143,110,210.79 205,762,131.54
1.1 Cash in Stock 787,971.21 620,470.49
Notes on the Financial Statements Page 57
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
Item Closing Balance Opening Balance
Bank Deposit Available for Immediate Payment 142,315,051.10 205,111,692.83
Other Currency Available for Immediate Payment 7,188.48 29,968.22
2. Cash Equivalent
Including: Bond Investment Maturing Within Three
Months
3. Balance of Closing Cash and Cash Equivalent 143,110,210.79 205,762,131.54
Including: Restricted Cash and Cash Equivalent Used by
the Subsidiaries of the Parent Company or the Group
Note 44 Assets with restriction on ownership or use right
Item Balance Reason of Restriction
Inventories 106,500,759.37 Borrowing on Mortgage
Investment-based Borrowing on Mortgage
15,739,646.26
Real Estate
Fixed Assets 263,115,406.80 Borrowing on Mortgage
Intangible Assets 26,024,578.81 Borrowing on Mortgage
Total 411,380,391.24
Notes on the Financial Statements Page 58
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
VIII. Change of Consolidation Scope
1、Disposal of Subsidiary
Difference
between
Disposal Price
Proporti
and Net Value
on of Time of
Subsidiar Price for Equity Disposal Determination Basis for of Such
Equity Losing
y’s Name Disposal Pattern Time of Losing Control Subsidiary
Disposal Control
Indicated on
(%)
Consolidated
Financial
Statement
Heilongji
ang
Equity Transfer
Longshi
Agreement; Articles of
Pearl
Agreed May 16, Association; Resolution
River 20,000,000.00 70% 38,155,550.74
transfer 2016 of Shareholder’s Meeting;
Culture
Resolution of Director’s
Communi
Meeting
cation
Co., Ltd.
Note: as at this date, the Company has fully transferred the 70% share of Heilongjiang Longshi
Pearl River Culture Communication Co., Ltd.
2、Other Causes for Change of Consolidation Scope
Hainan Pearl River Estate Marketing Co., Ltd, a third layer subsidiary of the Company, which
stop project operation because of poor management, has been approved to be cancelled as stated in
the Resolution of shareholder’s meeting held on February 22, 2016.
Ⅸ. Equities in other entities
1) Equities in the subsidiary
(1) Composition of the Company
Equity interest
Place of Place of Nature of held (%) Accounting
Company name
operation registration business method
Direct Indirect
Hainan Pearl River Properties and Hotels Hainaa 、 Property
Management Co., Ltd. Zhenzhou
Haikou,Hainan
management 98.00 set-up
Hainan Pearl River Environmental Property
Projects Co.,Ltd.
Haikou,Hainan Haikou,Hainan
management 100.00 set-up
Hainan Pearl River Estate Property
Cleaning Company
Haikou,Hainan Haikou,Hainan
management 100.00 set-up
Hainan Pearl River Estate
Property
Machine Engineering Haikou,Hainan Haikou,Hainan
management 100.00 set-up
Company
Notes on the Financial Statements Page 59
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
Equity interest
Place of Place of Nature of held (%) Accounting
Company name
operation registration business method
Direct Indirect
Sanya Wanjia Hotel Hotel
Management Co., Ltd.
Sanya,Hainan Sanya,Hainan
service 100.00 set-up
Hubei Pearl River Real Estate Real estate
Development Co., Ltd.
Wuhan, Hubei Wuhan, Hubei
development 89.20 set-up
Wuhan Pearl River Meilin Hotels
Hotel
Management Co., Wuhan, Hubei Wuhan, Hubei
service 100.00 set-up
Ltd.
Hainan Pearl River Real estate
Holding( Shanghai )Real Estate Co.,Ltd.
Shanghai Shanghai
development 100.00 set-up
Cultural and
Beijing Jiubo Culture Development Co.,
Ltd.
Beijing Beijing sports 100.00 set-up
services
Hotel
Mudanjiang Pearl River Wanjia Tourism Mudanjiang Mudanjiang
Investment Development Group City City
service 、 100.00 set-up
tourism
Business
combinations
Hailin Wanjia Snowtown Holiday Hotel Mudanjiang Mudanjiang Hotel involving
Management Co., Ltd. City City service 100.00 enterprises not
under common
control
Mudanjiang Jingbohu Wanjia Hotel Co., Mudanjiang Mudanjiang Hotel
Ltd. City City service 100.00 set-up
Mudanjiang Mudanjiang Hotel
Mudanjiang Wanjia Star Hotel Co., Ltd.
City City service 100.00 set-up
Harbin Wanjia Travel Agent Harbin Harbin Tourism 100.00 set-up
Hebei Zhengshi Qinghui Real Estate Real estate
Development Co., Ltd.
Shijiazhuang Shijiazhuang
development 51.00 set-up
Shanghai Sea Pearl Property Property
Management Co., Ltd.
Shanghai Shanghai
management 50.00 set-up
1 Significant non-wholly-owned subsidiaries
Current P/L Current Closing
Proportion
attributable to dividend balance of Company
Company name of
minority payements to minority name
minority(%)
shareholders minority interest
Hainan Pearl River Properties and Hotels
Management Co., Ltd. 2.00 -6,081.95 195,534.64
Hubei Pearl River Real Estate
Development Co., Ltd.
10.80 -1,398,463.99 8,085,153.09
Hebei Zhengshi Qinghui Real Estate
Development Co., Ltd.
49.00 -1,269,368.31 -20,905,834.82
Shanghai Sea Pearl Property
Management Co., Ltd.
50.00 235,757.25 550,393.68
Total ----- -2,438,157.00 -12,074,753.41
② Main Financial Information of the Significant Non-wholly-owned Subsidiaries
Unit：Yuan
Closing balance
Company name
Non-current Current Non-current
Current assets Total assets Total liabilities
assets liabilities liabilities
Hainan Pearl
River
Properties and
86,912,358.46 3,210,121.07 90,122,479.53 80,345,747.70 80,345,747.70
Hotels
Management
Co., Ltd.
Hubei Pearl
River Real
1,225,047,484.21 11,462,953.90 1,236,510,438.11 1,061,650,212.95 100,000,000.00 1,161,650,212.95
Estate
Development
Notes on the Financial Statements Page 60
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
Closing balance
Company name
Non-current Current Non-current
Current assets Total assets Total liabilities
assets liabilities liabilities
Co., Ltd.
Hebei
Zhengshi
Qinghui Real
2,902,391.91 285,344.26 3,187,736.17 45,852,705.19 45,852,705.19
Estate
Development
Co., Ltd.
Shanghai Sea
Pearl Property
3,255,873.39 15,770.75 3,271,644.14 2,170,856.78 2,170,856.78
Management
Co., Ltd.
Continued：
Opening balance
Company name
Non-current Current Non-current Total
Current assets Total assets
assets liabilities liabilities liabilities
Hainan Pearl River
Properties and Hotels 102,021,965.09 3,497,651.59 105,519,616.68 95,438,786.84 95,438,786.84
Management Co., Ltd.
Hubei Pearl River Real
Estate Development 1,026,454,667.86 11,777,968.10 1,038,232,635.96 700,424,068.58 250,000,000.00 950,424,068.58
Co., Ltd.
Hebei Zhengshi
Qinghui Real Estate 2,896,046.09 518,796.15 3,414,842.24 43,489,263.69 43,489,263.69
Development Co., Ltd.
Shanghai Sea Pearl
Property Management 2,602,195.07 10,688.30 2,612,883.37 1,983,610.50 1,983,610.50
Co., Ltd.
Continued：
Year 2015
Company name Total Net cash flows
Operating
Net profit comprehensive from investing
income
income activities
Hainan Pearl River Properties and Hotels
Management Co., Ltd. 117,100,129.23 -304,098.01 -304,098.01 -16,640,735.33
Hubei Pearl River Real Estate Development
Co., Ltd. 957,519.04 -12,948,342.22 -12,948,342.22 118,558,721.37
Hebei Zhengshi Qinghui Real Estate
Development Co., Ltd. -2,590,547.57 -2,590,547.57 -70,898.18
Shanghai Sea Pearl Property Management Co.,
Ltd. 1,797,596.19 471,514.49 471,514.49 661,708.32
Continued：
Year 2014
Company name Total Net cash flows
Operating
Net profit comprehensive from investing
income
income activities
Hainan Pearl River Properties and Hotels
Management Co., Ltd.
94,105,841.99 -1,121,522.01 -1,121,522.01 -4,361,051.32
Hubei Pearl River Real Estate Development
Co., Ltd. 732,797.00 -4,952,211.94 -4,952,211.94 -203,987,668.35
Hebei Zhengshi Qinghui Real Estate
Development Co., Ltd. - -2,595,687.05 -2,595,687.05 -236,750.04
Shanghai Sea Pearl Property Management Co.,
Ltd. 1,441,606.70 25,994.81 25,994.81 289,777.66
Notes on the Financial Statements Page 61
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
2) Transactions that the shares of the owners’ equities in the subsidiary changed but still
control such subsidiary
(1) Description on the change of shares of owners’ equities in the subsidiary
There is no the change of shares of the owners’ equities in the Company at the end of report
period.
(2) Influence of such transaction on the minority shareholders’ equities and owners’ equities
attributive to the parent company
There is no transaction with influence on the minority shareholders’ equities and owners’ equities
attributive to the parent company at the end of report period.
3) Equities in the cooperative enterprises or associated enterprises
(1) Significant cooperative enterprises or associated enterprises
Equity interest held (%)
Place of Place of Nature of
Name operation registration business
Accounting method
Direct Direct
Real estate Sanya Wanjia
Sanya Wanjia Industrial Co.
Sanya Sanya developme 40 Industrial Co.
Ltd nt Ltd
(2) Main financial information of significant cooperative enterprises
Closing balance Opening balance
Item Sanya Wanjia Industrial Sanya Wanjia Industrial
Co. Ltd Co. Ltd
Current asset 84,886,484.53 85,241,163.90
Non-current asset 580,129.40 580,373.54
Total asset 85,466,613.93 85,821,537.44
Current liability 1,335,345.69 1,292,130.39
Non-current liability
Total liability 1,335,345.69 1,292,130.39
Minority interests
Equity attributable to parent company 84,131,268.24 84,529,407.05
Net assets share calculated according to proportion of
33,652,507.30 33,811,762.82
shareholding
Net book value of the equity investment in associates 33,652,507.30 33,811,762.82
Continued：
Year 2015 Year 2014
Item Sanya Wanjia Industrial Sanya Wanjia Industrial
Co. Ltd Co. Ltd
Operating income 17,766.67
Net profit -398,138.81 -313,535.59
Notes on the Financial Statements Page 62
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
Year 2015 Year 2014
Item Sanya Wanjia Industrial Sanya Wanjia Industrial
Co. Ltd Co. Ltd
Other comprehensive income
Total comprehensive income -398,138.81 -313,535.59
(3) Summary of financial information of insignificant cooperative enterprises or associated
enterprises
Item 31 December 2014/ Year 2014 31 December 2013/ Year 2013
Net book value of the equity investment
1,397,330.08 1,472,998.82
in associates
calculated according to proportion of
— —
shareholding:
Net profit -154,426.00 -79,974.06
Other comprehensive income
Total comprehensive income -154,426.00 -79,974.06
(4) Unrecognized commitment relating to cooperative enterprises or associated enterprises
There is no commitment needing to be disclosed in the Company.
(5) Contingent liabilities relating to cooperative enterprises or associated enterprises
There is no contingency needing to be disclosed in the Company.
X. Disclosure of risks related to the financial instruments
The Company's activities expose it to a variety of financial risks: credit risk, liquidity risk and
market risk (primarily interest rate risk),. The Company's overall risk management program
focuses on the unpredictability of financial markets and seeks to minimize potential adverse
effects on the Company's financial performance.
1) Credit risk
The Company’s credit risk mainly arises from the monetary funds, accounts receivable,
available-for-sale financial assets, etc. The management has formulated the appropriate credit
policy and will continuously monitor the exposure of those credit risks.
The Company’s monetary funds are mainly deposited in the financial institutions such as
commercial bank, etc., the Company’s management believe that those commercial banks have
bigger credit and conditions of assets with lower risk of credit. The Company adopts the policy
of quota for avoiding the credit risk of any financial institution.
The Company expects that there is no significant credit risk associated with cash at bank since
they are deposited at state-owned banks and other medium or large size listed banks.
Management does not expect that there will be any significant losses from non-performance by
these counterparties.
In regard with the accounts receivable and other receivables, the Company has policies to control
Notes on the Financial Statements Page 63
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
the credit exposure on those accounts receivable and other receivables. The Company assesses
the credit quality of and sets credit limits on its customers by taking into account their financial
position, the availability of guarantee from the third parties, their credit history and other factors
such as current market conditions. The credit history of the customers is regularly monitored by
the Company. In respect of customers with a poor credit history, the Company will use written
payment reminders, or shorten or cancel credit periods, to ensure the overall credit risk of the
Company is limited to a controllable extent.
The biggest credit exposure faced by the Company is the book value of each asset in the balance
sheet. Except for the Company’s guarantee stated in Notes, the Company does not provide any
guarantee possible to make the Company face the credit risk.
2) Liquidity risk
Liquidity risk refers to the risk that the Company fails to obtain the sufficient capital to meet
operational needs or pay for the due debts and other obligations.
The Company’s finance department monitors rolling forecasts of the Company's short-term and
long-term liquidity requirements to ensure it has sufficient cash and securities that are readily
convertible to cash to meet operational needs, while maintaining sufficient headroom on its
undrawn committed borrowing facilities from major financial institution so that the Company does
not breach borrowing limits or covenants on any of its borrowing facilities to meet the short-term
and long-term liquidity requirements.
As at 30 June 2016, the financial assets and liabilities of the Company are analyzed by their
maturity date below at their undiscounted contractual cash flows :
30 June 2016
Item
Net book value Carrying amount Within 1year 1 to 2 years 2 to 5 years Over 5years
Currency Funds 143,110,210.79 143,110,210.79 143,110,210.79
Accounts
24,294,222.61 35,846,719.21 35,846,719.21
receivable
Other receivables 228,052,885.48 329,928,474.96 329,928,474.96
Available-for-sale
11,411,309.90 29,263,555.29 29,263,555.29
financial assets
Subtotal 406,868,628.78 538,148,960.25 538,148,960.25
Short-term
borrowings
Accounts payable 67,235,402.17 67,235,402.17 67,235,402.17
Other payables 546,272,136.93 546,272,136.93 546,272,136.93
Long-term
503,261,902.11 503,261,902.11 287,761,902.11 41,583,333.30 173,916,666.70
borrowings
Subtotal 1,116,769,441.21 1,116,769,441.21 901,269,441.21 41,583,333.30 173,916,666.70
Continued：
Notes on the Financial Statements Page 64
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
31 December 2015
Item
Over 5
Net book value Carrying amount Within 1year 1 to 2 years 2 to 5 years
years
Currency Funds 205,762,131.54 205,762,131.54 205,762,131.54
Accounts
17,161,981.62 28,267,474.71 28,267,474.71
receivable
Other receivables 256,036,391.03 351,143,874.92 351,143,874.92
Available-for-sale
11,411,309.90 35,263,555.29 35,263,555.29
financial assets
Subtotal 490,371,814.09 620,437,036.46 620,437,036.46
Short-term
borrowings
Accounts payable 24,313,483.40 24,313,483.40 24,313,483.40
Other payables 561,278,959.68 561,278,959.68 561,278,959.68
Long-term
743,620,698.03 743,620,698.03 353,287,364.69 140,666,666.68 249,666,666.66
borrowings
Subtotal 1,329,213,141.11 1,329,213,141.11 938,879,807.77 140,666,666.68 249,666,666.66
3) Market risk
(1) Risk from exchange rate
None.
(2) Interest rate risk
The Company's interest rate risk arises from the borrowings from bank. Financial liabilities
issued at floating rates expose the Company to cash flow interest rate risk. The Company
determines the relative proportions of its fixed rate and floating rate contracts depending on the
prevailing market conditions.
For the year ended 30 June 2016, the amount of interest rates contract on the floating rate for
long-term borrowings amounted to RMB541,879,508.09, the amount of interest rates contract on
the fixed rate for long-term borrowings amounted to RMB293,830,746.92.
XI. Fair Value
1) Financial instruments measured at fair value
There is no financial instrument measured at fair value in the Company
2) Financial instruments measured at fair value at the end of report period
There is no financial instrument measured at fair value at the end of report period
3) Basis of determination of market price for the items measured at fair value
There is no financial instrument measured at fair value in the Company.
4) Information of fair value of financial assets and liabilities not measured at fair value
The financial assets and liabilities not measured at fair value include: the accounts receivable,
short-term borrowing, accounts payable, non-current liabilities and long-term borrowings matured
within one year, investment in equities that are not quoted in active market and whose fair value
cannot be measured reliably.
Notes on the Financial Statements Page 65
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
The Company’s management gives a view that the difference between the book value of
above-mentioned financial assets and liabilities not measured at fair value and the fair value is
very small.
XII. Related party relationship and transactions
1) Information of parent company of the Company
Voting
Real estate Holding
Registered Registered
Name development and rights
address capital proportion
operation proportion
Beijing Wangfa Real Estate
Development Holdings Co., Ltd Beijing 28,012.89 26.36 26.36
The Company’s ultimate controller is Beijing Xinxing Real Estate Development Company.
2) The information of the Company’s subsidiaries is set forth in Note 7-1 “Equities in the
Subsidiaries”.
3) The information of the Company’s cooperative enterprises and associated enterprises is
set forth in Note 7-3 “Equities in the cooperative enterprises and associated enterprises”
4) Information of Other Related Parties
Relationship between other related party and the
Name of Other Related Party
Company
Beijing Zhongjia Yangguang energy technology (Company)
With same controller
Co., Ltd.
5) Transactions with related parties
(1) In regard with any subsidiary that has the control relationship with the Company and
has been included in the Company’s consolidated financial statements, its intercourse
transaction and the transaction with the parent company has been offset.
(2) Relation of sales of goods and rendering of service
Nature of related
Related party Year 2015 Year 2014
transaction
Beijing Zhongjia Sunny Energy
Rent services 120,000.00
Technology (Company) Co., Ltd.
Total 120,000.00
(3) Information of related guarantee
When the Company is the guarantor:
Beginning date Guarantee
Maturity date of
Guarantor Amount of guarantee guarantee obligation
contract contract expired
Beijing Zhongjia Sunny Energy
15,100,000.00 2013/9/12 2016/9/12 No
Technology (Company) Co., Ltd.
Total 15,100,000.00
(4) Fund calling between related parties
Notes on the Financial Statements Page 66
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
As at 30 June 2016, the total amount of loan principal that Beijing Xinxing Real Estate
Development corporation has been made to the Pearl River Holding has a balance of
RMB124,867,912.90 with interest payable of RMB 31,669,464.73.
As at 30 June 2016,the total amount of loan principal that the controlling shareholder Beijing
Wanfa Real Estate Development Corporation has been made to the Pearl River Holding has a
balance of RMB 58,825,000.00 with interest payable of RMB29,815,322.86.
As at 30 June 2016, the total amount of loan principal that Beijing Xinxing Real Estate
Development general company has been made to Sanya Wanjia Hotel Management Co., Ltd has
a balance of RMB 32,030,000.00 with interest payable of RMB35,782,553.93. The total amount
of loan principal that Beijing Wanfa Real Estate Development corporation has been made to
Sanya Wanjia Hotel Management Co., Ltd has a balance of RMB 19,700,000.00 with interest
payable of RMB12,808,068.08.
For the loans listed between related parties, the total amount of interest carried for this
reporting period was RMB5,675,891.98, and the balance of interest payable is
RMB110,075,409.60Yuan.
(5) Remuneration of key management personnel (10 thousand yuan)
Item Current Amount Previous Amount
Key management personnel salary 59.62 76.47
(6) Accounts payable for related parties
（1）Accounts payable for related parties by the Company
Items Company Name 31 December 2015 31 December 2014
Other Beijing Xinxing Real Estate Development
156,897,912.90 156,497,912.90
payables General company
Other Beijing Wangfa Real Estate Development
78,525,000.00 78,525,000.00
payables Holdings Co., Ltd
Other Beijing Zhongjia Yangguang energy
3,970,021.00 3,970,021.00
payables technology (Company) Co., Ltd.
Total 239,392,933.90 238,992,933.90
Interest Beijing Xinxing Real Estate Development
67,452,018.66 63,512,510.75
payable General company
Interest Beijing Wangfa Real Estate Development
42,623,390.94 40,887,006.87
payable Holdings Co., Ltd.
Other
Total 110,075,409.60 104,399,517.62
payables
XIII. Commitments and Contingency
1）Significant commitments
There is no commitment needing to be disclosed in the Company.
2) Contingency incurred after the balance sheet
Notes on the Financial Statements Page 67
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
1、On February of 2016, The company received the Haikou Municipal Public Security Bureau and
the Sanya Municipal Public Security Bureau issued to the company on the seizure of the
company's real estate notice. As the result of the company through Hainan Zhuye Investment
Management Co., Ltd.to Lv Gengying,Ma Xiaonan,Wang Hongying,Zhang Hua,Wen
Xiaosheng,Shi Xuyun,Pu Ding,Wo Zhongli,Li Ming,Wang Xiaoning 's personal loans and to the
company owned property for mortgage.The company of Hainan Zhuye Investment Management
Co., Ltd. deposits on suspicion of illegal from the public in early 2016.Criminal investigation by
the public security organs. These loans have been involved in the case of public security organs
and case processing. Involved in the mortgage property were seized. At present, the company
temporarily unable to continue to fulfill the obligations of repayment. After the case is concluded.
The company will perform the relevant obligations under the judgment results. Up to the reporting
date. The total amount of the loan amounted to 43,525,440.00 yuan
2、Hainan Pearl River Property Mangement Co., Ltd., a second-layer subsidiary of the Company,
sued Haikou Zanglong Market Management Co., Ltd. and Hainan Baihuifeng Market Co., Ltd. to
recover the property service fee and utilities amounting to RMB 2,127,800. As the owner, the
Company is sued with joint responsibility. As at this date, the trial is still pending.
3、On March 23 of 2016, Haikou Zanglong Market Management Co., Ltd. sued the Company for
unilaterally termination of the Property Tenancy Agreement for a compensation of RMB
3,000,000. And the Company lodged a countersuit against Haikou Zanglong Market Management
Co., Ltd. for its material breach of agreement to recover rents and penalty of RMB 2,061,400. As
at this date, the case hasn’t been on trial yet.
4、On November 3 of 2014, Hainan Fangyuan Law Firm filed a lawsuit against the Company for
dispute on ownership of #57, #61, #62, #63 and #64 (formerly known as #101-105) parking space,
requesting handling of the ownership certificate of those parking spaces. As at this date, the trial is
still pending.
5 、 Hainan Pearl River Industrial Co., Ltd. Shanghai Office, a second-layer subsidiary of the
Company, signed a Borrowing Contract of RMB 50,000,000 with creditor Wu Haoyan on
collateral of the property and parking space of Shanghai Office. In the first half of 2015, the
Company repaid the principal of RMB 50,000,000 to the account of Beijing Yuanrongtong Assets
Management Co., Ltd. as indicated in Wu Haoyan’s payment instruction. But Beijing
Yuanrongtong Assets Management Co., Ltd. didn’t forward said sum of money to Wu Haoyan
because of a dispute between them, so Wu Haoyan sued against Shanghai Office for sealing up its
assets on the ground of no repayment from the Company. As at this date, the case is pending, but
the mortgaged assets has been sealed up.
XIV. Events after the balance sheet
Notes on the Financial Statements Page 68
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
1) Information of profit distribution
There was no profit distribution plan in 30 June 2016 because of the losses.
2) Information of other events after the balance sheet date
The Company will transfer the 100% shares of Sanya Wanjia Hotel Management Co., Ltd. in
public at Beijing Property Rights Trading Center, and the first listed price will not be lower than
its assessed value. This matter has been approved at the 19th round of meeting of the seventh
director’s meeting. This transaction won’t constitute reorganization of material assets, and said
share is not involved in major disputes, litigation or arbitration concerning said assets, neither
involved in sealing up, freezing up or other judicial measures. The transfer price hasn’t confirmed
yet at present.
XVI.Other significant events
1.The Company’s working fund is RMB-63,391.98 yuan at the end of 30 June 2016, of which
covered RMB-26,450.75 yuan attributive to the shareholders’ equities of parent company, the net
profit attributive to the shareholders’ equities of parent company was RMB -4,737.06 yuan in 30
June 2016. The Company will improve profitability and the ability to continuous operation
through following ways: to speed up the development of real estates, dispose the available-for sale
financial assets, exploit the financing channel and obtain financial support of significant
shareholders.
2. On April 26 of 2016, the Company signed Agreement on Transfer of 60% Shares of Chengde
Dongda Property Development Co., Ltd. with Zonghe Investment Co., Ltd. and Li Yuqiang,
specifying transfer of 60% shares of Chengde Dongda Property Development Co., Ltd. held by Li
Yuqiang to the Company at the price of RMB 30,000,000, to cover the debt of RMB 30,000,000 of
Zonghe Investment Co., Ltd.. Later on July 4 of 2016, a supplementary agreement to said
Agreement was signed, indicating that after becoming a shareholder of Chengde Dongda Property
Development Co., Ltd., the Company shall promise that Chengde Dongda Property Development
Co., Ltd. would pay RMB 150,000,000 to Li Yuqiang prior to July 19 of 2016, and the rest debt of
RMB 300,000,000 would be paid off prior to August 19 of 2016, and that if Chengde Dongda
Property Development Co., Ltd. deferred payment over one month, Li Yuqiang has the right to
unilaterally suspend said Agreement and its supplementary agreement, and the Company shall
unconditionally return the share of Chengde Dongda Property Development Co., Ltd. to Li
Yuqiang. As at this date, Chengde Dongda Property Development Co., Ltd. hasn’t repaid RMB
150,000,000 to Li Yuqiang as scheduled.
3. The Company is planning for reorganization of material assets, which includes: replacement of
material assets, issue of shares, and purchase of assets and supporting financing. Object of said
transaction is 100% shares of Beijing Grain Co., Ltd. held by Beijing Grain Group and other
Notes on the Financial Statements Page 69
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
stakeholders. As at this date, Preliminary Program on Replacement of Material Assets & Issue of
Shares & Purchase of Assets and Supporting Financing & Affiliate Transaction has been approved
at the 30th round of the 7th director’s meeting of the Company.
4. On July 19 of 2016, Beijing Wanfa Real Estate Development Co. Ltd. signed Shares Transfer
Agreement with Beijing Grain Group to transfer the 26.36% shares of the Company it held to
Beijing Grain Group. This matter has been approved by the state owned assets supervision and
Administration Commission of the State Council. But it has not completed the transfer of equity
procedures as at this date.
XVII. Notes to significant items of the parent company’s financial statements
Note 1 Accounts receivable
1) Disclosure of category details of accounts receivable:
Closing Balance
Book Balance Provision for Bad Account
Categories
Rate Book Value
Ratio
Amounts Amounts Chargeabl
(%)
e（%）
Accounts receivable with
significant single amount
7,761,707.60 65.03 7,761,707.60 100.00 -
and individual provision for
bad debts
Accounts receivable with
combinational withdrawal
of the bad debt provision 2,254,961.81 18.89 529,613.35 23.49 1,725,348.46
by credit risks
characteristics
Accounts receivable with
non-significant single
1,919,490.60 16.08 1,898,690.60 98.92 20,800.00
amount and individual
provision for bad debts
Total 11,936,160.01 100.00 10,190,011.55 1,746,148.46
Continued：
Opening Balance
Book Balance Provision for Bad Account
Categories
Rate Book Value
Ratio
Amounts Amounts Chargeabl
(%)
e（%）
Accounts receivable with
significant single amount
7,761,707.60 65.27 7,761,707.60 100.00
and individual provision for
bad debts
Accounts receivable with
combinational withdrawal
of the bad debt provision 2,230,961.81 18.76 529,133.35 23.72 1,701,828.46
by credit risks
characteristics
Accounts receivable with
non-significant single 1,898,690.60 15.97 1,898,690.60 100.00
amount and individual
Notes on the Financial Statements Page 70
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
Opening Balance
Book Balance Provision for Bad Account
Categories
Rate Book Value
Ratio Chargeabl
Amounts Amounts
(%)
e（%）
provision for bad debts
Total 11,891,360.01 100.00 10,189,531.55 — 1,701,828.46
Description of categories of accounts receivable：
(1) Accounts receivable with significant single amount and individual provision for bad debts at
the end of period:
Closing Balance
Rate
Name Accounts Provision for Bad Charge
Reasons of Withdrawal
Receivable Account able
（%）
Hainan racing entertainment Irrecoverable
2,406,158.00 2,406,158.00 100.00
Co., LTD
Hainan Baoping company 2,218,494.43 2,218,494.43 100.00 Irrecoverable
Hainan centaline property 100.00 Irrecoverable
2,090,069.77 2,090,069.77
agency
Hainan dragon film studio 1,046,985.40 1,046,985.40 100.00 Irrecoverable
Total 7,761,707.60 7,761,707.60 —
(2) Accounts receivable with non-significant single amount and individual provision for bad debts
at the end of period:
Closing Balance
Rate
Name Accounts Provision for Bad Charge
Reasons of Withdrawal
Receivable Account able
（%）
Haikou Peijie clothing
497,520.00 497,520.00 100.00 Irrecoverable
company
Hainan International silver city
451,712.00 451,712.00 100.00 Irrecoverable
Real estate company
Haikou Jingye trading
250,000.00 250,000.00 100.00 Irrecoverable
development company
Hainan Jinhe Real estate
119,446.00 119,446.00 100.00 Irrecoverable
company
Hainan Qiongshan Tianxin
112,116.50 112,116.50 100.00 Irrecoverable
Pawn Investment company
Amount less than one hundred
488,696.10 467,896.10 95.74 Irrecoverable
thousand yuan ( total of 19 )
Total 1,919,490.60 1,898,690.60 —
Notes on the Financial Statements Page 71
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
(2) Accounts receivable in the combination which adopts aging analysis method to determine
provision for bad debt:
Closing Balance
Aging Provision for Bad
Accounts Receivable Rate Chargeable（%）
Account
Within 1 year 966,807.39 19,336.15 2.00
1－2 years 96,000.00 4,800.00 5.00
2－3 years 100,000.00 10,000.00 10.00
3－4 years 102,000.00 20,400.00 20.00
4－5 years 100,000.00 30,000.00 30.00
Over 5 years 890,154.42 445,077.20 50.00
Total 2,254,961.81 529,613.35 —
Continued：
Opening Balance
Aging Provision for Bad
Accounts Receivable Rate Chargeable（%）
Account
Within 1 year 942,807.39 18,856.14 2.00
1－2 years 96,000.00 4,800.00 5.00
2－3 years 100,000.00 10,000.00 10.00
3－4 years 102,000.00 20,400.00 20.00
4－5 years 100,000.00 30,000.00 30.00
Over 5 years 890,154.42 445,077.21 50.00
Total 2,230,961.81 529,133.35 —
2) Situation of the current bad debt provision withdrawn, recovered or reversed:
The amount of current bad debt provision reversed was RMB 480.00 yuan.
3) There is no money owed by the shareholders who hold more than 5% (5% is included) of
voting shares of the Company in the closing accounts receivable.
4) Top 5 units of accounts receivable of the closing balance gathered on the basis of parties
which owe the money:
Ratio in Closing
Amount of Bad Account Provisions
Name Closing Balance
Accounts Withdrawn
Receivable (%)
Hainan racing entertainment Co.,
2,406,158.00 20.16 2,406,158.00
LTD
Hainan Baoping company 2,218,494.43 18.59 2,218,494.43
Hainan Zhongyuan tenement agency
2,090,069.77 17.51 2,090,069.77
company
Singapore China holding co., LTD 1,190,500.00 9.97 403,850.00
Hainan Longzhu Cinema City 1,046,985.40 8.77 1,046,985.40
Notes on the Financial Statements Page 72
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
Ratio in Closing
Amount of Bad Account Provisions
Name Closing Balance
Accounts Withdrawn
Receivable (%)
Total 8,952,207.60 75.00 8,165,557.60
5） There is no account receivable from the related party at the end of report period.
Note 2 Other Receivables
1) Disclosure of category details of other receivables
Closing Balance
Book Balance Provision for Bad Account
Categories
Rate Book Value
Ratio Chargeabl
Amounts Amounts
(%)
e（%）
Other receivables with
significant single amount and
92,743,380.89 11.81 27,378,380.89 29.52 65,365,000.00
individual provision for bad
debts
Other receivables with
combinational withdrawal of
the bad debt provision by
credit risks characteristics
Combination 1 ： Aging
269,012,314.93 34.26 61,930,858.57 23.02 207,081,456.36
Combination
Combination 2 ：
Receivables in the
419,094,317.92 419,094,317.92
inter-companies in range of
consolidation
Totality of Combination 688,106,632.85 87.63 61,930,858.57 23.02 626,175,774.28
Other receivables with
non-significant single amount
4,417,591.24 0.56 3,984,902.59 90.21 432,688.65
and individual provision for
bad debts
Total 785,267,604.98 100.00 93,294,142.05 691,973,462.93
Continued：
Opening Balance
Book Balance Provision for Bad Account
Categories
Rate Book Value
Ratio
Amounts Amounts Chargeabl
(%)
e（%）
Combination 1 ： Aging
88,243,380.89 11.43 21,378,380.89 24.23 66,865,000.00
Combination
Combination 2 ：
Receivables in the
inter-companies in range of
consolidation
Totality of Combination 268,711,768.54 34.81 61,917,347.64 23.04 206,794,420.9
Other receivables with
non-significant single amount
410,950,908.14 53.24 410,950,908.14
and individual provision for
bad debts
Notes on the Financial Statements Page 73
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
Opening Balance
Book Balance Provision for Bad Account
Categories
Rate Book Value
Ratio Chargeabl
Amounts Amounts
(%)
e（%）
Total 679,662,676.68 88.05 61,917,347.64 9.11 617,745,329.04
Combination 1 ： Aging
4,044,702.36 0.52 3,972,014.34 98.20 72,688.02
Combination
Combination 2 ：
Receivables in the
771,950,759.93 100.00 87,267,742.87 —— 684,683,017.06
inter-companies in range of
consolidation
Description of categories of other receivables：
(1) Other receivables with significant single amount and individual provision for bad debts at the
end of period:
Closing Balance
Name Rate
Other Provision for Reasons of
Chargeable
Receivables Bad Account Withdrawal
（%）
Hainan macun port harbor company 6,000,000.00 6,000,000.00 100.00 Irrecoverable
Hainan Yangtze River Travel 1,000,000.00 1,000,000.00 100.00 Irrecoverable
Xinhua Liming Aviation Decoration Irrecoverable
1,208,804.70 1,208,804.70 100.00
Company
Dabao Cement Factory 1,901,383.56 1,901,383.56 100.00 Irrecoverable
Hainan Shenhai Real Estate Co., Ltd. 1,029,850.32 1,029,850.32 100.00 Irrecoverable
Shenzhen State-Investment Securities Irrecoverable
1,409,934.28 1,409,934.28 100.00
Co., Ltd.
Shenzhen Zhuce Real Estate Company 1,550,278.23 1,550,278.23 100.00 Irrecoverable
Sanya Land and Housing Administration 1,000,000.00 1,000,000.00 100.00 Irrecoverable
Jinguang Real Estate Company 1,752,100.00 1,752,100.00 100.00 Irrecoverable
Dingjia International Co., Ltd. 2,725,702.71 2,725,702.71 100.00 Irrecoverable
Hainan Zhongda Real Estate Company 2,210,779.10 2,210,779.10 100.00 Irrecoverable
Hainan Enxin Industry Co., Ltd. 2,314,592.00 2,314,592.00 100.00 Irrecoverable
Haikou Industrial Development Import
1,392,430.00 1,392,430.00 100.00 Irrecoverable
and Export Co., Ltd.
Withdrawn as per
Shanghai Real Estate Company of Hainan the estimated
67,247,525.99 1,882,525.99 2.80
PEARL RIVER Inustry Co., Ltd. non-recoverable
amount
Total 92,743,380.89 27,378,380.89 —
(2) Other receivables with non-significant single amount and individual provision for bad debts at
the end of period
Notes on the Financial Statements Page 74
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
Closing Balance
Name Rate
Other Provision for
Chargea Reasons of Withdrawal
Receivables Bad Account
ble（%）
Sell Dabao cement on a
560,610.00 560,610.00 100.00 Irrecoverable
commission basis
Hainan Development Bank 440,000.00 440,000.00 100.00 Irrecoverable
Hainan Sanli Industry and
283,478.62 283,478.62 100.00 Irrecoverable
Trade Company
Chamber of Commerce of
270,000.00 270,000.00 100.00 Irrecoverable
Hainan Province
Telephone rate of customers of
268,542.54 268,542.54 100.00 Irrecoverable
PEARL RIVER Square
China Construction Sixth
Engineering Division Group, 260,335.00 260,335.00 100.00 Irrecoverable
Ltd
Huazhou Jianan Company 200,000.00 200,000.00 100.00 Irrecoverable
PEARL RIVER Advertisement
184,911.62 184,911.62 100.00 Irrecoverable
Company
Initial installation charge of
156,271.60 156,271.60 100.00 Irrecoverable
telephone
Amount below RMB150000 Withdrawal of non-recoverable
1,793,441.86 1,360,753.21 75.87 amount according to the
（31 units）
estimate
Total 4,417,591.24 3,984,902.59 —
(3) Other receivables in the combination which adopts aging analysis method to determine
provision for bad debt:
Closing Balance
Aging Provision for Bad
Other Receivables Rate Chargeable（%）
Account
Within 1 year 22,714,882.05 454,297.64 2.00
1－2 years 1,343,200.00 67,160.00 5.00
2－3 years 31,393,200.00 3,139,320.00 10.00
3－4 years 78,743,146.00 15,748,629.20 20.00
4－5 years 124,437,458.54 37,331,237.56 30.00
Over 5 years 10,380,428.34 5,190,214.17 50.00
Total 269,012,314.93 61,930,858.57 —
Continued：
Opening Balance
Aging Provision for Bad
Other Receivables Rate Chargeable（%）
Account
Within 1 year 22,414,335.66 448,286.72 2.00
1－2 years 1,393,200.00 69,660.00 5.00
2－3 years 31,393,200.00 3,139,320.00 10.00
Notes on the Financial Statements Page 75
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
Opening Balance
Aging Provision for Bad
Other Receivables Rate Chargeable（%）
Account
3－4 years 78,693,146.00 15,738,629.20 20.00
4－5 years 124,437,458.54 37,331,237.56 30.00
Over 5 years 10,380,428.34 5,190,214.16 50.00
Total 268,711,768.54 61,917,347.64 —
(4) No bad account provision is withdrawn for the accounts receivable in the inter-company
included in the range of consolidation.
2) Situation of the current bad debt provision withdrawn, recovered or reversed
The amount of current bad debt provision withdrawn was RMB 6,026,399.18 yuan.
3) Category of other receivables under the natures of accounts
Item Closing Balance Opening Balance
Investment 250,400,000.00 250,400,000.00
Intercourse Funds with Related
486,341,843.91 479,698,434.13
Parties
Borrowing, interest 17,951,701.88 16,981,016.24
Other 30,574,059.19 24,871,309.56
Total 785,267,604.98 771,950,759.93
4) There is no money owed by the shareholders who hold more than 5% (5% is included) of
voting shares of the Company in the closing other receivables.
5) Top 5 units of other receivables of the closing balance gathered on the basis of parties
which owe the money:
Ratio in
Closing Closing
Nature
Closing Amount of Balance of
Name of Aging
Balance Other Bad Debt
Money
Receivables Provisions
(%)
Mudanjiang Pearl
River Wanjia
Tourism Borrow
228,962,841.55 1-5 years 29.16
Investment ing
Development
Group
Interco
Within one year
Sanya Wanjia Hotel urse
(10,179,479.46yuan)、
Management Co., Funds, 141,305,145.51 17.99
1-5 years
Ltd. Borrow
（131,125,666.05yuan）
ings
Public Investment Money 100,400,000.00 3-5 years 12.79 26,420,000.00
Notes on the Financial Statements Page 76
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
Ratio in
Closing Closing
Nature
Closing Amount of Balance of
Name of Aging
Balance Other Bad Debt
Money
Receivables Provisions
(%)
Co., Ltd for
Projec
t
Comb
inatio
n
Money
for
Beijing Kangtai Cooper
Xingye Investment 100,000,000.00 3-5 years 12.73 26,000,000.00
Co.,Ltd ation
with
Project
Singapore Great Interco Within one year
Land Holdings urse 67,951,701.88 (22,714,024.00yuan)、 8.65 9,319,843.71
Co.,Ltd Funds 1-5 years（45,237,677.88yuan
Total 638,619,688.94 81.32 61,739,843.71
6) There is no other accounts receivable from the related parties
Note 3 Long-term Equity Investment
Closing Balance Opening Balance
Nature of
Book Impairment Book Impairment
Money Book Value Book Value
Balance Provision Balance Provision
Investment in
299,420,000.00 40,000,000.00 259,420,000.00 299,420,000.00 40,000,000.00 259,420,000.00
subsidiaries
Investment in
associated 33,652,507.30 33,652,507.30 33,811,762.82 33,811,762.82
companies
Total 333,072,507.30 40,000,000.00 293,072,507.30 333,231,762.82 40,000,000.00 293,231,762.82
1) Investment in subsidiaries
Current Closing
Initial
Opening Current Current Closing Impairment Balance of
Investee Investment
Balance Increase Decrease Balance Provision Impairment
Cost
Withdrawn Provision
Notes on the Financial Statements Page 77
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
Current Closing
Initial
Opening Current Current Closing Impairment Balance of
Investee Investment
Balance Increase Decrease Balance Provision Impairment
Cost
Withdrawn Provision
Hainan PEARL
RIVER Property
and Hotel 4,900,000.00 4,900,000.00 4,900,000.00
Management Co.,
Ltd.
Hubei PEARL
RIVER Real
Estate 64,420,000.00 64,420,000.00 64,420,000.00
Development Co.,
Ltd.
Sanya Wanjia
Hotel
120,000,000.00 120,000,000.00 120,000,000.00
Management Co.,
Ltd.
Shanghai Real
Estate Company
of Hainan PEARL 40,000,000.00 40,000,000.00 40,000,000.00 40,000,000.00
RIVER Industry
Co., Ltd.
Mudanjiang Pearl
River Wanjia
Tourist
60,000,000.00 60,000,000.00 60,000,000.00
Investment
Development
Group Co., Ltd.
Beijing Jiubo
Culture
5,000,000.00 5,000,000.00 5,000,000.00
Development Co.,
Ltd.
Hebei Zhengshi
Qinghui Real
Estate 5,100,000.00 5,100,000.00 5,100,000.00
Development Co.,
Ltd.
Total 299,420,000.00 299,420,000.00 299,420,000.00 40,000,000.00
2) Investment in cooperative enterprises and associated enterprises
Current Increase or Decrease
Opening Investment Adjustment of
Investee Additional Contribution Results Other
Balance
Contribution Reduced Recognized by Comprehensiv
Equity Method e Income
1. Associated Enterprises
Sanya Wanjia Industry Co.,
33,811,762.82 -159,255.52
Ltd.
Total 33,811,762.82 -159,255.52
Continued：
Notes on the Financial Statements Page 78
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
Current Increase or Decrease
Closing
Declared to Closing Balance of
Investee Change of Impairment
grant cash Balance Impairmen
Other Provision Other
dividends or t Reserve
Equities Withdrawn
profits
1. Associated Enterprises
Sanya Wanjia Industry Co.,
33,652,507.30
Ltd.
Total 33,652,507.30
Note 4 Operating income and operating cost
1) Operating income and operating cost
Current Amount Previous Amount
Item
Income Cost Income Cost
Other Business 620,935.59 173,367.05 512,071.26 177,796.80
Note 5 Investment income
Item Current Amount Previous Amount
Investment Income from the Long-term Equity Measured
-159,255.52 -125,414.24
Under Equity Method
Made during the period of tradable financial assets
investment returns
Made during the period of available for sale financial
assets investment returns
Disposal of tradable financial assets investment returns
Disposal of available for sale financial assets investment
124,342,755.05
returns
Total -159,255.52 124,217,340.81
XVIII. Supplementary information
1) Breakdown of non-recurring profit or loss
Items Amount Description
Profit and loss on disposal of non-current assets 2,423,791.09
Fund occupation fee from non-financial enterprises included in the current
838,294.10
profit and loss
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
and loss, and the disposal of trading financial assets, financial liabilities
held for trading and available for sale financial assets to obtain investment
income
Notes on the Financial Statements Page 79
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
Items Amount Description
Others non-operating income and expenses excluded as above -3,050,677.52
Other non-operating income and costs 38,155,550.74
Tax effects -1,696.96
Effects attributable to minority interests (after tax) -25,255.42
Total 38,393,910.79
2) Return on equity (ROE) and earnings per share ("EPS")
Earnings per share
Weighted average return on
Profit During Report Period Basic earnings per Diluted earnings per
net assets (%)
share share
Net profit attributable to ordinary
0.00 -0.11 -0.11
shareholders of the Company
Net profit after deduction of non-recurring
profits or losses attributable to ordinary 0.00 -0.20 -0.20
shareholders of the Company
3) Abnormal financial statements items ("F/S items") and description of reasons
(1) Consolidated balance sheet of consolidated financial statements
Closing Opening Ratio of
Item Reason of Change
Balance Balance Change
Mainly due to the reduction in the current
Currency Funds 143,110,210.79 205,762,131.54 -30.45%
financing
Mainly due to Hainan property management
Accounts receivable 24,294,222.61 17,161,981.62 41.56% company property management services due to
the increase in property management services
Advances to The main line of the increase in the advance of
174,617,724.95 108,236,943.90 61.33%
suppliers food trade
Mainly due to the Longshi company no longer
Long term prepaid
3,388,948.05 8,029,043.26 -57.79% included in the merger, reducing the cost of
expenses
long-term prepaid expenses due
Mainly due to the Hu Bei company the
Accounts payable 67,235,402.17 24,313,483.40 176.54%
increase in Engineering
Advances from Mainly due to the Hubeicompany ,the increase
754,711,163.32 428,054,670.19 76.31%
customers of the advance payment
Mainly due to hubei property company opens
Taxes payable -33,545,360.10 -5,255,663.63 -538.27%
to booking a house money to prepay taxes
Current portion of
non-current 215,500,000.00 390,333,333.34 -44.79% Mainly due to the repayment of part of the loan
liabilities
Mainly due to the Longshi company no longer
Minority interests -12,074,753.41 -16,057,057.25 24.80%
included in the merger
(2) Consolidated Profit Statement and Cash Flow Statement
Closing Opening Ratio of
Item Reason of Change
Balance Balance Change
Business taxes and Mainly due to paid to the Pearl River square
10,405,923.57 7,631,999.47 36.35%
surcharges land value-added tax
Notes on the Financial Statements Page 80
Hainan Pearl River Holding Company Limited
Notes on the Financial Statements for the half year of 2016
Mainly due to the hubei province Pearl River
Selling expenses 8,871,001.02 2,806,121.97 216.13%
company the leads to increased sales agency fee
Mainly due to the subsidiary of Mudanjiang
Impairment Loss of million Ka Tourism Investment Development
1,995,276.66 819,765.92 143.40%
Assets Group Co., Ltd. in the construction of the
provision for impairment
Mainly due to a lot of cash on the transfer of
Investment income 37,928,898.30 124,137,366.75 -69.45% Southwest Securities,but no such item in this
period
Non-operating Mainly due to the Income from disposal of
2,651,492.34 508,533.86 421.40%
income fixed assets
Mainly due to part of the fixed assets due to the
income tax expenses 3,278,378.77 194,835.62 1582.64%
application of scrap
Net Profit/loss
attributable to Mainly due to the reversal of deferred income
183,697.96 15,854,110.26 -98.84%
minority tax assets confirmation
shareholders
Other Mainly due to a lot of cash on the transfer of
comprehensive -125,127,595.63 100.00% Southwest Securities,but no such item in this
income period
Mainly due to the increase of money for presale
Net cash flows from of houses of Meilin Qingcheng Phase III
161,345,565.54 -94,962,794.82 269.90%
investing activities project in subsidiary , Hubei Pearl River Real
Estate Development Co., Ltd
Mainly due to a lot of cash on the transfer of
Net cash flows from
5,447,324.96 131,679,709.58 -95.86% Southwest Securities,but no such item in this
investing activities
period
Net cash flows from -12202.29 Mainly due to the period of financing is
-229,444,811.25 1,895,878.91
financing activities % reduced, return the loan
Hainan Pearl River Holding Company Limited
31August 2016
Notes on the Financial Statements Page 81
