HAINAN PEARL RIVER HOLDINGS CO., LTD.
ANNUAL REPORT 2016
I Important information
This Abstract is based on the full text of the Annual Report. In order for a full understanding of the operating
results, financial condition and future development planning of the Company, investors are kindly reminded to read
the full text carefully on the media designated by the China Securities Regulatory Commission (the “CSRC”).
This Annual Report and its abstract have been prepared in both Chinese and English. Should there be any
discrepancies or misunderstandings between the two versions, the Chinese version shall prevail.
All directors attended in person the board meeting for the review of this Report.
The Board of Directors and the Supervisory Board have given a detailed explanation on the relevant matters, which
investors are kindly reminded to read carefully.
The Company plans not to distribute cash dividends or bonus shares or convert capital reserve into share capital.
II Company profile
1. Stock profile
Stock name *ST Pearl River A, *ST Pearl River B Stock code 000505, 200505
Stock exchange Shenzhen Stock Exchange
Contact information Board Secretary Securities Representative
Name Zhao Yinhu
Jing Liang Building, 16 East Third Ring Middle Road,
Office address
Chaoyang District, Beijing
Fax 010-51672010
Tel. 010-51672029
E-mail 593374748@qq.com
2. Brief introduction to the main business or products in this Reporting Period
The Company's main business includes real estate development, hotel tourism, property management. It has a total of 15
subsidiaries and 2 branches.
Real estate development business: in 2016, the country's macroscopic environment had a good trend as a whole, which
effectively promoted the rise of both volume and price of the national real estate market. In 2016, although the growth rate
of the domestic economy slowed down, but the overall trend was stable, and the fundamental indicators performed well.
The supply side of the real estate industry had outstanding reform achievements. Under such situation, the Company's real
estate development business was progressed smoothly. By 31 Dec. 2016, Meilin Qingcheng Phase III project achieved to
contract 699 orders, with contracted area of 67,417.31 square meters; real estate development business achieved operating
income of RMB 661,692,200, with net profit of RMB 88,625,600.
Property management business: in 2016, the market competition of property management industry is fierce. Under the
situation that there was no large rising space for property costs and there was a rapid growth for management cost, the profit
margin of property management was low generally. In 2016, the Company's property management business operated
smoothly. The property company achieved the operating income of RMB 260,442,100 and the net profit of RMB
-2,644,800. By now, the regions of projects under the Company's management have involved Haikou, Qionghai, Wenchang,
Lingao, Baoting, Sanya, Changsha, Wuhan, Nanning, Zhengzhou, etc. The main serving project types involve residence,
office buildings, passenger stations of high-speed railway, schools, government compound, shopping malls, gymnasiums
and so on. Among them, there are 67 residential projects, 14 office projects and 3 other types. Seen from the project
structure, residential projects accounts for 80%. Under the situation that the property costs have not been raised for many
years and the operating costs increase rapidly, the profitable space of residential projects is increasingly tight or even in a
loss state.
Hotel tourism business: the Company's holding subsidiary, Mudanjiang Pearl River Wanjia Tourism Group Co., Ltd is
mainly responsible for the construction and operation of Chinese snow village. At present, it has invested a total of RMB
400 million to promote the scenic spot construction work of the snow village, and it has completed the work successively,
such as the \"Overall Development Plan from Snow Village to Taipinggou\", acquisition of Xuesongge Hotel, acquisition of
Xueyuan Hotel, construction of Yangcaoshan highway, scenic sightseeing entertainment and other traffic vehicle acquisition,
construction of Yongan staff's living area, construction of ski equipment hall for the skiing resort and other work. It has
greatly improved and perfected each tourism and basic facility of the snow village, and the passenger flow of the snow
village has been rapidly increased year by year. However, in recent years, because that the Company invests too much for
the construction of each basic and tourism facility of the snow village, and the financing cost is higher, and the projects in
construction are gradually converted into fixed assets, which generate larger depreciation expense, it is difficult to achieve
profitability from the current income scale.
Days Hotel and Suites Sanya Resort has 180 rooms totally. It is located in the seaside of Sanya coast and has superior
geographical position. However, under the impact of slowdown in domestic economic growth, downturn of Sanya tourism
market, fierce market competition and other factors, as well as the aging of the hotel's room facilities, the rise of labor costs
and commodity prices, the rise of energy costs, etc., it directly causes the increase of the hotel's operating costs.
Considering the financial pressure and the subsequent development of the Company, the Company has sold 100% of the
stock right of Sanya Wanjia Hotel Management Co., Ltd which the Company holds and sold 3 villa real estates which are
under its name and are located in No. 212, Sanya Bay Road, Sanya City, Hainan province. The transfer registration
formality was completed on 26 Dec. 2016.
Considering the predicament and financial pressure of the subsequent development of the Company's real estate business,
the Company will actively promote asset restructuring to achieve the transformation and upgrading.
3. Key financial results
(1) Key financial results for the past three years
Indicate by tick mark whether the Company performed any retroactive adjustments to or restatement of its accounting data
due to changes of accounting policies or correction of accounting errors.
□ Yes √ No
Unit: RMB
2016 2015 +/-%
Operating revenues 969,140,915.32 267,068,750.88 262.88% 238,904,161.09
Net profit attributable to shareholders of the
73,300,570.54 -107,573,743.92 168.14% -173,422,925.66
Company
Net profit attributable to shareholders of the
-134,994,571.34 -237,953,658.00 43.27% -179,382,026.46
Company before exceptional profit and loss
Net cash flows from operating activities 257,914,814.62 259,599,625.38 -0.65% -243,681,708.74
Basic earnings per share (RMB/share) 0.17 -0.25 168.00% -0.41
Diluted earnings per share (RMB/share) 0.17 -0.25 168.00% -0.41
Weighted average return on equity (%) 0.00% 0.00% -262.21%
December 31, 2016 December 31, 2015 +/-% December 31, 2014
Total assets 1,385,469,635.17 1,714,444,000.65 -19.19% 1,645,436,644.78
Net assets attributable to shareholders of the
65,088,302.88 -217,136,869.15 129.98% 15,564,470.40
Company
(2) Key financial results by quarter
Unit: RMB
1Q 2Q 3Q 4Q
Operating revenues 80,025,245.10 69,007,283.30 68,143,078.33 751,965,308.59
Net profit attributable to shareholders of the
-38,541,192.11 -8,829,402.77 -43,420,775.53 164,091,940.95
Company
Net profit attributable to shareholders of the
-38,415,455.62 -47,349,050.05 -44,205,595.65 -5,024,470.02
Company before exceptional profit and loss
Net cash flows from operating activities 124,823,160.52 36,522,405.02 11,839,497.76 84,729,751.32
Indicate by tick mark whether there are any material differences between the financial indicators above or their summations
and those which have been disclosed in quarterly or semi-annual reports.
□ Yes √ No
4. Share capital and shareholders
(1) Numbers of common shareholders and preference shareholders with resumed voting rights as well as
shareholdings of top ten shareholders
Unit: share
Total number Total number of
of common Total number of preference
Total number of shareholders preference shareholders with
common at the prior shareholders resumed voting
33,468 31,930 0
shareholders at month-end with resumed rights at the prior
the period-end before the voting rights at month-end before
disclosure of the period-end the disclosure of
this Report this Report
Top 10 shareholders
Pledged or frozen shares
Shareholding Number of
Name of Nature of Total shares held at the
percentage restricted shares
shareholder shareholder period-end Status Number
(%) held
Beijing Grain
Group Co., 28.95% 123,561,963
Ltd.
Li Sheryn Foreign
2.90% 12,380,000
Zhan Ming individual
Li Leon Foreign
1.98% 8,455,000
Zhan Wei individual
Bank of
China—Harv
est Service Domestic
Value-added non-state-ow
0.61% 2,595,200
Industry ned
Securities corporation
Investment
Fund
Dong Domestic
0.60% 2,560,400
Xueliang individual
Xu Zhen Domestic 0.58% 2,478,000
individual
Domestic
Yang Shuling 0.57% 2,449,100
individual
Foreign
Yao Liyuan 0.46% 1,953,100
individual
Zhang Foreign
0.46% 1,949,250
Xiaoxia individual
Fenghe Value Domestic
Securities non-state-ow
0.45% 1,904,300
Investment ned
Fund corporation
Among shareholders above, there exists no related-party relationship between the principal shareholder and
Related or acting-in-concert other shareholders of the Company. Nor they are parties with concerted action as prescribed in the
parties among the Information Disclosure Administrative Methods for Changes in Shareholding of Shareholders of Listed
shareholders above Companies. And it is unknown whether there is related-party relationship among other shareholders and
whether they are prescribed parties with concerted action.
Shareholders conducting
securities margin trading (if N/A
any)
(2) Number of preference shareholders and shareholdings of top ten of them
□ Applicable √ Not applicable
No preference shareholders in this Reporting Period.
(3) Ownership and control relations between the actual controller and the Company
State-owned Assets Supervision and Administration
Commission of Beijing Municipal Government
100%
Beijing Grain Group Co., Ltd.
28.95%
HaiNan Pearl River Holdings Co., Ltd.
5. Corporate bonds
Does the Company have any corporate bonds publicly offered and listed on the stock exchange, which were undue before
the approval date of this Report or were due but could not be redeemed in full?
No.
III Performance discussion and analysis
1. Performance review for this Reporting Period
Is the Company subject to any disclosure requirements for special industries?
Yes. For the Company engages in real estate, it is subject to the Guideline No. 3 of the Shenzhen Stock Exchange on
Information Disclosure by Industry—for Listed Companies Engaging in Real Estate.
A. Promoted the restructuring work solidly
The Company’s audited net profit was negative in two consecutive fiscal years of 2014 and 2015. Until 31 Dec. 2015, the
audited net asset was negative, and the Company’s stock had implemented the delisting risk warning since April 26 Apr.
2016. Considering the subsequent development dilemma of the Company’s real estate development business and the fund
pressure brought by the huge borrowings, the Company made the operation and management, actively promoted the major
asset restructuring work with BGG, and tried to realize the transformation and upgrading.
The Company received China Securities Regulatory Commission (CSRC) Administrative Licensing Application Acceptance
Notice issued by CSRC (hereinafter referred to as “CSRC”) on 30 Nov. 2016, CSRC reviewed the administrative licensing
application material of Hainan Pearl River Holdings Co., Ltd. Listed Company Issuing Stock Buying Asset Approval
submitted by the Company legally, and accepted the administrative licensing application; For the CSRC Administrative
Licensing Project Review One Feedback Opinion Notice issued by CSRC received on 23 Dec. 2016, the Company
gradually implemented the related problems according to the requirement in the notice along with the related intermediary
agency, and submitted the related materials to CSRC Administrative Licensing Accepting Department within the prescribed
term.
B. Business operating situation
Firstly, the real estate sales went well. The Company’s real estate development business mainly came from Hubei Wuhan
Meilin Qingcheng Project Phase III. There were 725 sets of housing with the area of 69993.64 m2. Until 31 Dec. 2016, 699
sets had been signed for purchase with the signing area of 67417.31m2, and the housing sales rate reached 97%; The
contract signing amount was RMB 858.41 million, and the actual total collection was RMB 839.68 million with the
collecting rate of 98%; 545 sets of housing had been transferred with the area of 52656 m2. In 2016, the real estate
development business realized the business income of RMB 661.6922 million with the net profit of RMB 88.6256 million.
Secondly, the property management business was operated steadily. The Company’s property management business
was steady with increase, while the profit margin was low. In 2016, the property company completed the business income
of RMB 260.4421 million with the net profit of RMB -2.6448 million. Until now, the Company’s management project
region involved Haikou, Qionghai, Wenchang, Lingao, Baoting, Sanya, Changsha, Wuhan, Nanning, Zhengzhou and others.
The main served project type involved residential, office building, high-speed passenger station, school, government agency
compound, shopping mall, stadium and others. 67 residential projects, 14 office projects and 3 other types were included.
Seen from the project structure, the residential projects accounted for 80%. Under the situation that the property
management fee was not increased for many years and the operating cost was increased rapidly, the profit space of
residential project was tighter even it was in a loss. Due to the market competition motivation, the Company’s advantage
was faded gradually, the market development was stagnated, the structural adjustment was slow, and it influenced the
Company’s business profitability. In recent three years, although the Company’s scale and income were increased, the
profitability was low, and the Company’s business prospect was poor.
Thirdly, the hotel service business was continued in downturn. The Company’s subsidiary Mudanjiang Pearl River
Wanjia Tourism Group Company was mainly responsible for the construction and operation of Chinese snow hometown. In
2016, it completed the business income of RMB 19.8894 million with the net profit of RMB 4.6188 million (including
disposing 70% equity return of Heilongjiang Longshi Pearl River Media Co., Ltd.). In order to mitigate the fund pressure,
Mudanjiang Pearl River Wanjia Tourism Group Company and Harbin Jiangshan International Travel Service Co., Ltd.
reached the cooperation operating agreement of Erlongshan Film and Television Base and “Snow Hometown Impression”
restaurant, and realized the continuous operation of two projects; strengthened the propaganda force with the use of Ctrip,
Tongcheng Net and other online recruiting platform, improved the occupancy rate and market awareness. However, for the
Company invested great on the infrastructure and tourism facility construction in Snow Hometown in recent years, the
financing cost was higher, the transferring of projects being built successively into the fixed asset generated large
depreciation cost, and it was hard to realize the profit seen from the current income scale.
Although Sanya Wanjia Hotel was located in Sanya Bay Beach with the superior location, the hotel’s operating cost was
increased influenced by the downturn tourism market and fierce market competition and other factors in Sanya added with
the aging facility in the guest room and rising management fee in the hotel. Considering the Company’s fund pressure and
subsequent development, the Company sold all holding 100% equity of Sanya Wanjia Hotel Management Co., Ltd. and
three villa properties located in No.212, Sanya Bay Road, Sanya City, and completed the transfer registration procedure on
26 Dec. 2016.
C. Invested project progress situation
a. Mulin Town Coal Logistics Project: In 2011, the Company and Zhonghe Investment Co.,Ltd. Signed Cooperation
Agreement on the Construction of Daqin Railway Mulin Town Railway Special Line and Coal Wholesale Market and
project supplementary agreement, and agreed that both parties shall invest and cooperate to develop and construct Daqin
railway Mulin Town Railway special line and coal wholesale market construction project. For the project establishment and
production line construction were not carried out, RMB 40 million were collected in 2013, and RMB 36.6 million were
collected in 2014. In 2014, Zhonghe Investment Co., Ltd. mortgaged the project land and property to the Company, while
the mortgage registration formality was not handled. On 31 Dec. 2016, both parties signed the agreement, terminated the
cooperation of the project and collected the investment fund. Until the date of the report, the phase-I fund of RMB 10
million had been collected according to the agreement.
b. Yunxi Iron Ore Project: In 2011, the Company signed Cooperation Agreement with Kangtai Xingye and natural person
Gu Liyun to set up a project Company jointly and responsible for the development and sales of the iron ore resources in
Dujiawan magnetite ore located in Cangfang Village, Xiangkou Town, Yunxi County, Shiyan City, Hubei Province and
Zhaojiayuan iron ore in southwestern part. In recent years, for the price of iron essence pink was not stable, the Company’s
original mining production line construction and equipment installation plan did not achieve great progress. Currently, the
Company is actively handling the mining license.
c. Sanya Pearl River Pile Project: The Company signed the agreement with China Great Land Holdings Ltd. (D 50) in
May and August, 2013 and intended to cooperate to develop the plots in No.20, Hairun Road, Lizhigou Industrial Park,
Sanya City owed by Sanya Pearl River Pile Co., Ltd., a subsidiary of China Great Land Holdings Ltd.. The Company has
paid 50 million yuan to transfer 80% equity of the project Company held by China Great Land Holdings Ltd.. In June, 2015,
the land using right certificate of the project plot had been obtained. Currently, the project Company’s equity held by China
Great Land Holdings Ltd. had been transferred to Shijing International Investment Co., Ltd., Shijing International
Investment Co., Ltd. bears the transferring obligation of the equity, and the equity transferring procedure had been started.
d. Shijiazhuang Luquan Luoling Community Project: For Luquan was transferred from city to district, the approval
authority was adjusted, and the whole planning shall be conducted according to the overall arrangement of Shijiazhuang.
The change had a huge impact on Luquan Luoling Community project. Added with the huge project scale and huge starting
fund demand, the project had been suspended.
D. Asset disposal situation
Considering the Company’s subsequent development and fund demand, the Company had disposed part asset: In order to
reduce the operating fund pressure, the Company completed the transferring of 70% equity of the subsidiary Company of
Heilongjiang Longshi Pearl River Cultural Communication Co., Ltd. in May 2016; To alleviate the fund pressure to pay the
principal and interests of the loan in the early stage, the Company sold 100% equity of Sanya Wanjia Hotel Management
Co., Ltd. and three villas property located in No.212, Sanya Bay Road, Sanya City, Hainan Province. The net income of
RMB 152.85 million was obtained to dispose the two above assets.
2. Significant changes in the main business in this Reporting Period
□ Yes √ No
3. Products contributing over 10% of the main business revenue or profit
√ Applicable □ Not applicable
Unit: RMB
Operating Gross profit Operating revenue: Operating profit: Gross profit
Product Operating profit
revenue margin YoY +/-% YoY +/-% margin: YoY +/-%
Sale of real estate 659,767,504.00 143,335,532.14 34.33% 63,339.18% 341.31% -24.23%
Property management 263,353,193.00 -1,725,490.81 5.64% 30.01% -199.31% -5.14%
services
Tourism hotel service 32,576,252.00 -14,293,480.59 40.54% -29.98% 73.50% -8.10%
4. Seasonal or periodic characteristics in the operating performance that need special attention
□ Yes √ No
5. Significant YoY changes in the operating revenues, operating costs and net profit attributable to the common
shareholders or their composition
√ Applicable □ Not applicable
The operating revenues, operating costs and total net profit attributable to common shareholders of this Reporting Period
changed significantly from last year mainly because of the property sales revenue from the Wuhan Meilin Qingcheng Phase
III project of controlled subsidiary Hubei Pearl River Real Estate Development Co., Ltd., as well as the transfer of the
100% equity interests of Sanya Wanjia Hotel Management Co., Ltd. and the three villas at 212 Sanya Bay Road, Sanya City,
Hainan Province.
6. Possibility of listing suspension or termination
□ Applicable √ Not applicable
7. Issues related to the financial report
(1) YoY changes in accounting policies, accounting estimations and measurement methods
No changes.
(2) Retroactive restatements due to correction of significant accounting errors in this Reporting Period
No such cases.
(3) YoY changes in the scope of the consolidated financial statements
√ Applicable □ Not applicable
Three entities were excluded from the consolidated financial statements for this Reporting Period, namely, Sanya Wanjia
Hotel Management Co., Ltd., Heilongjiang Longshi Pearl River Media Co., Ltd. and HaiNan Pearl River Real Estate
Marketing Co., Ltd. The formalities for the transfer of equity interests of Sanya Wanjia Hotel Management Co., Ltd. were
went through on December 15, 2016; the formalities for the transfer of equity interests of Heilongjiang Longshi Pearl River
Media Co., Ltd. were went through on May 16, 2016; and the cancellation of HaiNan Pearl River Real Estate Marketing
Co., Ltd. was registered with the industrial and commercial administration on March 9, 2016.
HaiNan Pearl River Holdings Co., Ltd.
April 28, 2017
Hainan Pearl River Holding Company Limited
Consolidated Balance Sheet
Unit：RMB
ASSETS Note(VII) 31 December 2016 31 December 2015
Current assets ——
Currency Funds 1 246,504,351.39 205,762,131.54
Provision of settlement fund
Funds lent
Financial assets at fair value through profit or loss
Derivative financial assets
Notes receivable
Accounts receivable 2 16,084,139.32 17,161,981.62
Advances to suppliers 3 67,598,789.02 108,236,943.90
Interest receivable 4 2,710,880.79
Dividends receivable 5 260,015.00 260,015.00
Other receivables 6 350,870,047.05 256,036,391.03
Buying back the sale of financial assets
Inventories 7 297,867,807.05 531,145,489.05
Reclassified to assets held for sale
Current portion of non-current assets
Other current assets 8 8,714,139.07
Total current assets 990,610,168.69 1,118,602,952.14
Non-current assets ——
Available-for-sale financial assets 9 30,824,994.90 11,411,309.90
Held-to-maturity investments
Long-term receivables
Long-term equity investments 10 33,866,644.98 35,284,761.64
Investment property 11 19,244,780.80 20,890,800.30
Fixed assets 12 220,409,931.29 409,326,778.05
Construction in progress 13 78,169,695.02 79,403,655.02
Construction materials 14 393,706.60
Fixed assets pending for disposal
Productive biological assets
Oil and gas assets
Intangible assets 15 3,692,130.10 29,519,153.74
Development disbursements
Goodwill
Long-term prepaid expenses 16 2,083,962.89 8,029,043.26
Deferred tax assets 4,985,486.50
Other non-current assets 18 1,581,840.00 1,581,840.00
Total non-current assets 394,859,466.48 595,841,048.51
Total assets 1,385,469,635.17 1,714,444,000.65
The accompanying notes form an integral part of the financial statements.
Legal representative: Wang Chunli Principal in charge of accounting:Guan Ying Head of the accounting department:Wu Xiukun
Hainan Pearl River Holding Company Limited
Consolidated Balance Sheet
Unit：RMB
ASSETS Note(VII) 31 December 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 20 77,627,005.61 24,313,483.40
Advances from customers 21 365,746,868.16 428,054,670.19
Employee benefits payable 22 12,392,816.29 13,353,268.66
Taxes payable 23 84,404,890.27 -5,255,663.63
Interest payable 24 86,294,850.36 178,429,980.05
Dividends payable 25 3,213,302.88 3,213,302.88
Other payables 26 541,823,806.30 561,278,959.68
Current portion of non-current liabilities 27 78,710,181.59 353,287,364.69
Other current liabilities
Total current liabilities 1,250,213,721.46 1,556,675,365.92
Non-current liabilities ——
Long-term borrowings 28 73,666,666.66 390,333,333.34
Bonds payable
Long-term payable
Grants payable
Provisions
Deferred income
Deferred tax liabilities 17 597,896.93 629,227.79
Other non-current liabilities
Total non-current liabilities 74,264,563.59 390,962,561.13
Total liabilities 1,324,478,285.05 1,947,637,927.05
Equity ——
Share capital 29 426,745,404.00 426,745,404.00
Capital reserve 30 543,615,438.94 334,690,837.45
Less:Treasury Share
Other comprehensive income
Surplus reserve 31 109,487,064.39 109,487,064.39
Provision for general risks
Retained earnings 32 -1,014,759,604.45 -1,088,060,174.99
Equity attributable to parent company 65,088,302.88 -217,136,869.15
Minority interests -4,096,952.76 -16,057,057.25
Total owner's equity 60,991,350.12 -233,193,926.40
Total liabilities and owner's equity 1,385,469,635.17 1,714,444,000.65
The accompanying notes form an integral part of the financial statements.
Legal representative: Wang Chunli Principal in charge of accounting:Guan Ying Head of the accounting department:Wu Xiukun
Hainan Pearl River Holding Company Limited
Consolidated Income Statement
Unit：RMB
ITEM Note(VII) 2016
I. Revenue 33 969,140,915.32 267,068,750.88
Including：Operating income 969,140,915.32 267,068,750.88
II.Total cost 1,053,602,849.25 505,692,539.18
Including：Operating cost 33 705,844,141.38 208,475,239.56
Interest expenses
Handling charges and commissions expenses
Business taxes and surcharges 34 87,047,635.88 15,324,879.59
Selling expenses 35 21,903,094.54 13,150,025.48
Administrative expenses 36 102,937,990.79 94,718,847.46
Including:research and development expenses
Finance expenses 37 78,742,377.49 122,512,226.74
Including: Interest expenses
Interest income
Net loss on foreign exchange
Impairment losses of assets 38 57,127,609.17 51,511,320.35
Others
Add：Gain on fair-value changes（“-”for loss）
Investment income（“-”for loss） 39 210,928,088.57 126,095,109.54
Including：investment income from associates and joint ventures -1,418,116.66 -676,992.99
Gain or loss on foreign exchange ( \"-\"for loss)
III.Operating profits（“－”for loss） 126,466,154.64 -112,528,678.76
Add：Non-operating income 40 23,803,424.50 3,501,882.36
Including：Gains on disposal of non-current assets 23,054,861.71 2,823,852.83
Gains from exchange of non-monetary assets
Government grants
Gains from debt restructuring
Less：Non-operating expenses 41 15,616,543.79 1,390,348.78
Including：Losses on disposal of non-current assets 2,658,077.72 163,533.87
Losses from exchange of non-monetary assets
Losses from debt restructuring
IV.Profit before tax（“－”for loss） 134,653,035.35 -110,417,145.18
Less：Income tax expenses 42 57,173,310.63 16,704,237.23
V.Net profit（“－”for loss） 77,479,724.72 -127,121,382.41
Net profit attributable to owners of the Company 73,300,570.54 -107,573,743.92
*Profit/loss attributable to minority shareholders 4,179,154.18 -19,547,638.49
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 be reclassified subsequently to profit or loss -
i.Gain or loss from fair-value changes on available for sale financial assets -125,127,595.63
Post-tax net value of other comprehensive income attributable to minority shareholders
VII.Total comprehensive income attributable to: 77,479,724.72 -252,248,978.04
Owners of the Company 73,300,570.54 -232,701,339.55
*Minority shareholders 4,179,154.18 -19,547,638.49
VIII.Earnings per share
i.Basic earnings per share 0.17 -0.25
ii.Diluted earnings per share 0.17 -0.25
The accompanying notes form an integral part of the financial statements.
Legal representative: Wang Chunli Principal in charge of accounting:Guan Ying Head of the accounting department:Wu Xiukun
Hainan Pearl River Holding Company Limited
Consolidated Cash Flow Statement
Unit：RMB
ITEM Note(VII) 2016
Ⅰ.Cash flows from operating activities： ——
Cash received from sales and services 921,600,873.15 636,569,142.23
Tax refunds
Net cash from other operating activities 43 104,839,323.64 80,892,208.19
Sub-total of cash inflows from operating activities 1,026,440,196.79 717,461,350.42
Cash paid for goods and services 233,477,869.66 194,452,388.19
Cash paid to and on behalf of employees 205,975,286.61 171,129,990.94
Payment of taxes and surcharges 96,277,956.02 38,655,500.55
Other cash payments relating to operating activities 43 232,794,269.88 53,623,845.36
Sub-total of cash outflows from operating activities 768,525,382.17 457,861,725.04
Net cash flows from operating activities 257,914,814.62 259,599,625.38
Ⅱ.Cash flows frow investing activities： ——
Cash receipts from withdraw of investments 295,667,698.51 181,932,294.42
Cash received from investment income 104,787.15 129,347.48
Net cash from disposal of fixed assets, intangible assets and other long-term assets 4,849,613.03 2,781,032.92
Net cash received from disposal of subsidiaries and other business units 275,414,593.69
Other cash receipts relating to investing activities
Sub-total of cash inflows from investing activities 576,036,692.38 184,842,674.82
Cash paid for fixed assets, intangible assets and other long-term assets 2,975,987.73 25,302,379.04
Cash payments for investments 42,370,000.00 27,500,000.00
Net cash paid for acquiring subsidiaries and other business units
Net cash used in other investing activities
Sub-total of cash outflows from investing activities 45,345,987.73 52,802,379.04
Net cash flows from investing activities 530,690,704.65 132,040,295.78
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 319,564,838.82 462,078,169.48
Cash received from issuance of bonds
Cash receipts related to other financing activities
Sub-total of cash inflows from financing activities 319,564,838.82 462,078,169.48
Cash repayments for debts 1,037,370,082.54 621,640,859.80
Cash payments for distribution of dividends, profit and interest expenses 25,344,191.06 74,430,974.77
Including: dividends or profit paid by subsidiaries to minority shareholders
Other cash payments relating to financing activities 43 9,713,864.64 29,288,317.15
Sub-total of cash outflows from financing activities 1,072,428,138.24 725,360,151.72
Net cash flows from financing activities -752,863,299.42 -263,281,982.24
Ⅳ.Effect of foreign exchange rate changes on cash and cash equivalents -
Ⅴ.Net increase in cash and cash equivalents 35,742,219.85 128,357,938.92
Add: beginning balance of cash and cash equivalents 205,762,131.54 77,404,192.62
Ⅵ. Ending balance of cash and cash equivalents 241,504,351.39 205,762,131.54
The accompanying notes form an integral part of the financial statements.
Legal representative: Wang Chunli Principal in charge of accounting:Guan Ying Head of the accounting department:Wu Xiukun
Hainan Pearl River Holding Company Limited
Consolidated Statement of Changes in Owners’ Equity
Unit：RMB
Attributable to the parent company
Note Other Other
ITEM Less:treasury Specialized Provision for Minority Total owner's
(VII) Paid-in capital equity Capital reserve comprehensive Surplus reserve Retained earnings Others Sub-total
shares reserve general risks interests equity
instruments income
1 2 3 4 5 6 7 8 9 10 11 12
I.Closing balance of the preceding year 426,745,404.00 - 334,690,837.45 - - 109,487,064.39 -1,088,060,174.99 -16,057,057.25 -233,193,926.40
Add:Changes in accounting policies — — — — — — — — — — — — —
Corrections of errors in Prior Period — — — — — — — — — — — — —
Others - - - - - - - - - - - - -
II.Opening balance of the current year 426,745,404.00 - 334,690,837.45 - - - 109,487,064.39 - -1,088,060,174.99 - -217,136,869.15 -16,057,057.25 -233,193,926.40
III.Changes for the year - - 208,924,601.49 - - - - 73,300,570.54 - 282,225,172.03 11,960,104.49 294,185,276.52
(I) Total comprehensive income - - - - - - 73,300,570.54 - 73,300,570.54 4,179,154.18 77,479,724.72
(II) Capital contribution and
- - 208,924,601.49 - - - - - - - 208,924,601.49 7,780,950.31 216,705.551.80
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 - - 208,924,601.49 - - - - - - - 208,924,601.49 7,780,950.31 216,705.551.80
( 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 - 543,615,438.94 - - - 109,487,064.39 - -1,014,759,604.45 - 65,088,302.88 -4,096,952.76 60,991,350.12
The accompanying notes form an integral part of the financial statements.
Legal representative: Wang Chunli Principal in charge of accounting:Guan Ying Head of the accounting department:Wu Xiukun
Hainan Pearl River Holding Company Limited
Consolidated Statement of Changes in Owners’ Equity
Unit：RMB
Attributable to the parent company
Note Other Other Provision
ITEM Less:treasury Specialized Minority Total owner's
(VII) Paid-in capital equity Capital reserve comprehensive Surplus reserve for general Retained earnings Others Sub-total
shares reserve interests equity
instruments income risks
1 2 3 4 5 6 7 8 9 10 11 12
I.Closing balance of the preceding year 426,745,404.00 334,690,837.45 125,127,595.63 109,487,064.39 -980,486,431.07 3,490,581.24 19,055,051.64
Add:Changes in accounting policies - - -
Corrections of errors in Prior Period - - - - - -
Others - - - - - - - - - - - - -
II.Opening balance of the current year 426,745,404.00 - 334,690,837.45 - 125,127,595.63 - 109,487,064.39 - -980,486,431.07 - - 3,490,581.24 19,055,051.64
III.Changes for the year -125,127,595.63 -107,573,743.92 -19,547,638.49 -252,248,978.04
(I) Total comprehensive income -125,127,595.63 -107,573,743.92 -19,547,638.49 -252,248,978.04
(II) Capital contribution and
withdrawals by owners
i.Capital contributions
from owners
ii.Capital contribute from
other equity instrument holders
iii.Share-based payment
recorded in owner's equity
iv.Others
( III).Profits distribution
i.Appropriation to surplus reserve
Including:Statutory surplus reserve
Optional surplus reserve
ii.Appropriation of provision
for general risks
iii.Profit distribution to equity owners
iv.Others
(V).Transfer within owner's equity
i.Capital reserve transferred to
paid-in capital
ii.Surplus reserve transferred to
paid-in capital
iii.Recover of loss by surplus reserve
iv.Others
IV. Closing balance of the year 426,745,404.00 - 334,690,837.45 - - - 109,487,064.39 - -1,088,060,174.99 - -16,057,057.25 -233,193,926.40
The accompanying notes form an integral part of the financial statements.
Legal representative: Wang Chunli Principal in charge of accounting:Guan Ying Head of the accounting department:Wu Xiukun
Hainan Pearl River Holding Company Limited
Balance Sheet of the Company
Unit：RMB
ASSETS Note(XV) 31 December 2016 31 December 2015
Current assets： 9.5
Cash and cash equivalent 33,952,786.37 479,720.71
Provision of settlement fund
Funds lent
Financial assets at fair value through profit or loss
Derivative financial assets
Notes receivable
Accounts receivable 1 1,032,085.83 1,701,828.46
Advances to suppliers 50,000,000.00 50,277,830.00
Interest receivable
Dividends receivable 260,015.00 260,015.00
Other receivables 2 591,785,222.60 684,683,017.06
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 681,854,145.25 742,226,446.68
Non-current assets： ——
Available-for-sale financial assets 30,824,994.90 11,411,309.90
Held-to-maturity investments
Long-term receivables
Long-term equity investments 3 101,713,800.55 293,231,762.82
Investment property 6,383,667.53 6,686,104.13
Fixed assets 4,019,513.64 13,311,762.29
Construction in progress
Construction materials
Fixed assets pending for disposal
Productive biological assets
Oil and gas assets
Intangible assets 1,410,049.68
Development disbursements
Goodwill
Long-term prepaid expenses 278,707.32 604,524.68
Deferred tax assets
Other non-current assets
Total non-current assets 143,220,683.94 326,655,513.50
Total assets 825,074,829.19 1,068,881,960.18
The accompanying notes form an integral part of the financial statements.
Legal representative: Wang Chunli Principal in charge of accounting:Guan Ying Head of the accounting department:Wu Xiukun
Hainan Pearl River Holding Company Limited
Balance Sheet of the Company(Continued)
Unit：RMB
ASSETS Note(XV) 31 December 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 38,896.41 38,896.41
Financial assets sold for repurchase
Employee benefits payable 1,224,801.48 1,050,861.22
Including:Accrued payroll 1,224,801.48 1,050,861.22
Welfare benefits payable
Including:Staff and workers' bonus and selfare
Taxes and surcharges payable 27,537,449.60 7,576,662.32
Including:Taxes payable 27,537,449.60 7,576,662.32
Interest payable 82,468,756.03 126,077,364.57
Dividends payable 3,213,302.88 3,213,302.88
Other payables 650,471,361.88 430,555,824.81
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 272,856,962.92
Other current liabilities
Total current liabilities 767,437,517.98 843,852,824.83
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 767,437,517.98 843,852,824.83
Equity： ——
Share capital 426,745,404.00 426,745,404.00
Capital reserve 546,201,098.01 337,276,496.52
Less:Treasury Share
Other comprehensive income
Surplus reserve 109,487,064.39 109,487,064.39
Provision for general risks
Retained earnings -1,024,796,255.19 -648,479,829.56
Total owner's equity 57,637,311.21 225,029,135.35
Total liabilities and owner's equity 825,074,829.19 1,068,881,960.18
The accompanying notes form an integral part of the financial statements.
Legal representative:Wang Chunli Principal in charge of accounting:Guan Ying Head of the accounting department:Wu Xiukun
Hainan Pearl River Holding Company Limited
Income Statement of the Company
Unit：RMB
ITEM Note(XV) 2016
I. Revenue 4 1,237,868.46 1,683,542.77
Including：Operating income 1,683,542.77
II.Total cost 313,819,331.95 131,555,244.94
Including：Operating cost 4 324,585.35 355,593.60
Business taxes and surcharges 4,502,377.57 114,815.95
Selling expenses 1,040.00
Administrative expenses 35,889,607.02 16,099,972.91
Including:research and development expenses
Finance expenses 56,156,435.09 90,600,805.99
Including: Interest expenses
Interest income
Net loss on foreign exchange
Impairment losses of assets 216,946,326.92 24,383,016.49
Others
Add：Gain on fair-value changes（“-”for loss）
Investment income（“-”for loss） 5 -53,010,262.27 125,989,612.25
Including：Investment income from associates and joint ventures -1,417,962.27 -653,142.80
Gain or loss on foreign exchange ( \"-\"for loss)
III.Operating profits（“－”for loss） -365,591,725.76 -3,882,089.92
Add：Non-operating income 23,252,023.56 0.02
Including：Gains on disposal of non-current assets 22,961,274.39
Gains from exchange of non-monetary assets
Government grants
Gains from debt restructuring
Less：Non-operating expenses 7,216,288.83 1,022,894.78
Including：Losses on disposal of non-current assets 1,338,107.60 104,747.98
Losses from exchange of non-monetary assets
Losses from debt restructuring
IV.Profit before tax（“－”for loss） -349,555,991.03 -4,904,984.68
Less：Income tax expenses 26,760,434.60 15,210,270.77
V.Net profit（“－”for loss） -376,316,425.63 -20,115,255.45
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 -376,316,425.63 -145,242,851.08
The accompanying notes form an integral part of the financial statements.
Legal representative: Wang Chunli Principal in charge of accounting:Guan Ying Head of the accounting department:Wu Xiukun
Hainan Pearl River Holding Company Limited
Cash Flow Statement of the Company
Unit：RMB
ITEM Note(XV) 2016
Ⅰ.Cash flows from operating activities： ——
Cash received from sales and services 13,505,200.00 1,777,540.85
Tax refunds
Net cash from other operating activities 174,590,150.16 306,136,722.36
Sub-total of cash inflows from operating activities 188,095,350.16 307,914,263.21
Cash paid for goods and services 12,355,200.00
Cash paid to and on behalf of employees 7,324,417.07 5,296,572.50
Payment of taxes and surcharges 20,099,942.52 1,814,708.72
Other cash payments relating to operating activities 166,429,789.70 58,842,160.39
Sub-total of cash outflows from operating activities 206,209,349.29 65,953,441.61
Net cash flows from operating activities -18,113,999.13 241,960,821.60
Ⅱ.Cash flows frow investing activities： ——
Cash receipts from withdraw of investments 295,667,698.51 141,671,794.42
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 277,332,301.49
Other cash receipts relating to investing activities
Sub-total of cash inflows from investing activities 576,060,360.00 141,671,794.42
Cash paid for fixed assets, intangible assets and other long-term assets 31,189.00 6,199.00
Cash payments for investments 46,409,933.33 57,788,000.00
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 46,441,122.33 57,794,199.00
Net cash flows from investing activities 529,619,237.67 83,877,595.42
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 248,315,780.73 102,528,000.00
Cash received from issuance of bonds
Cash receipts related to other financing activities
Sub-total of cash inflows from financing activities 248,315,780.73 102,528,000.00
Cash repayments for debts 714,932,856.00 380,857,787.33
Cash payments for distribution of dividends, profit and interest expenses 10,827,232.97 38,610,941.59
Including: dividends or profit paid by subsidiaries to minority shareholders
Other cash payments relating to financing activities 587,864.64 10,452,617.15
Sub-total of cash outflows from financing activities 726,347,953.61 429,921,346.07
Net cash flows from financing activities -478,032,172.88 -327,393,346.07
Ⅳ.Effect of foreign exchange rate changes on cash and cash equivalents -
Ⅴ.Net increase in cash and cash equivalents 33,473,065.66 -1,554,929.05
Add: beginning balance of cash and cash equivalents 479,720.71 2,034,649.76
Ⅵ. Ending balance of cash and cash equivalents 33,952,786.37 479,720.71
The accompanying notes form an integral part of the financial statements.
Legal representative: Wang Chunli Principal in charge of accounting:Guan Ying Head of the accounting department:Wu Xiukun
Hainan Pearl River Holding Company Limited
Statement of Changes in Owners’ Equity of the Company
Unit：RMB
Note
ITEM Other Provision
Other equity Less:treasury Specialized Retained Total owner's
(XV) Paid-in capital Capital reserve comprehensive Surplus reserve for general Others
instruments shares reserve earnings equity
income risks
1 2 3 4 5 6 7 8 9 10
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 - - 208,924,601.49 - - - - - -376,316,425.63 - -167,391,824.14
(I) Total comprehensive income - - - - - - -376,316,425.63 - -376,316,425.63
(II) Capital contribution and withdrawals by owners - - 208,924,601.49 - - - - - - - 208,924,601.49
i.Capital contributions from owners - - - - - - - - - -
ii.Capital contribute from other equity instrument holders - - - - - - - - - - -
iii.Share-based payment recorded in owner's equity - - - - - - - - - - -
iv.Others - - 208,924,601.49 - - - - - - - 208,924,601.49
( 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 - 546,201,098.01 - - - 109,487,064.39 - -1,024,796,255.19 - 57,637,311.21
The accompanying notes form an integral part of the financial statements.
Legal representative: Wang Chunli Principal in charge of accounting:Guan Ying Head of the accounting department:Wu Xiukun
Hainan Pearl River Holding Company Limited
Statement of Changes in Owners’ Equity of the Company
Unit：RMB
Note
ITEM Other Provision
Other equity Less:treasury Specialized Retained Total owner's
(XV) Paid-in capital Capital reserve comprehensive Surplus reserve for general Others
instruments shares reserve earnings equity
income risks
1 2 3 4 5 6 7 8 9 10
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 - - - -20,115,255.45 - -145,242,851.08
(I) Total comprehensive income - - - -125,127,595.63 - -20,115,255.45 - -145,242,851.08
(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 - -648,479,829.56 - 225,029,135.35
The accompanying notes form an integral part of the financial statements.
Legal representative: Wang Chunli Principal in charge of accounting:Guan Ying Head of the accounting department:Wu Xiukun
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
Hainan PEARL RIVER Holding Company Limited
Notes on the Financial Statements for the Year 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 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%.
September 2, 2016, the original controlling shareholder of Beijing Wanfa Real Estate Development Co., Ltd will be held by
112,479,478 shares all transferred to the Beijing Grain Group Co., Ltd., 2016 September after the transfer of equity is completed, the
Beijing Grain Group Co., Ltd. held 112,479,478 shares, accounting for 26.36% of the total number of shares. In November 2016,
based on the confidence in the reorganization of the major assets and the future development of the Company, Beijing Grain Group
Co., Ltd. decided to adopt the centralized bidding method to increase its holdings through the secondary market, holding 123,561,963
shares, Accounting for 28.95% of the total number of shares, becoming the largest shareholder of the Company.
Registered capital: RMB 426,745,400 Yuan
Unified social credit code: 914600002012845568
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
Legal representative: Wang Chunli
Registered address: 29/F., Dihao Building, Pearl River Plaza, Binhai Avenue, Haikou, Hainan, the PRC.
Office adress: 29/F., Dihao Building, Pearl River Plaza, Binhai Avenue, Haikou, Hainan, the PRC.
The parent company of Beijing grain group co., LTD
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's business nature and the main business activities: 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.
Hainan Peapl River Holding Company Limited Beijing Investment Consulting Branch was established on May 6, 2010, and the
unified social credit code is 91110107554875351W. The address is: Room 5078, Building 3, No. 3, Xijing Road, High-tech Park,
Badachu, Shijing Mountain District, Beijing City. The business scope includes investment consulting, hotel investment and
management; construction equipment purchasing and leasing; the sales of construction materials, hardware and electrical equipment,
furniture, plastics, daily necessities, leather products, rubber cavity products, feed, the packed seed that will not be sub-packed again,
the grain, beans, potatoes, flowers, grass and other decorative plants, chemical fertilizer, non-metallic ore, metal products, metal ore,
metal materials, and the import and export of goods; the salary point system and development application of high-tech products. (“1.
Without the approval of the relevant department, it is prohibited from using public mode to raise funds; 2. It is prohibited from
publically carrying out security products and financial derivative instrument transaction activities; 3. It is prohibited from issuing
loans; 4. It is prohibited from providing guarantee for other enterprises, except the invested enterprise; 5. It is prohibited from making
commitment to the investor about no damage of investment principal or the minimum income”; for the projects that shall be legally
approved, the business activities can be carried out as per the approved contents after being approved by the relevant department.)
Hainan Peapl River Holding Company Limited Heilongjiang Branch was established on October 22, 2012, and the unified social
credit code is 91230110598492651P. The address is: No. 34, Nongxiao Street, Xiangfang District, Harbin City. The business scope
includes: industrial investment, hotel investment and management, construction equipment purchasing, leasing, indoor and outdoor
decoration, high-tech project investment, computer network investment, communication project investment, high-tech product
development and application as well as environmental protection project investment. (For projects that require the administrative
licensing, they shall be operated with the license) (For projects that shall be legally approved, the business activities can be carried
out after being approved by the relevant department.)The approval of the financial statements reported: the financial statements by
the company all the directors are submitted on April 26, 2017.
II． The scope of consolidated financial statements
This period into the body of the scope of consolidated financial statements, a total of 15 units, specific include:
Shareholding ratio Proportion of voting rights
Company name Abbreviation Unit type Level
（%） （%）
Hainan Pearl River Property Hotel Pearl River
Management Co., Ltd Holdings 2 98.00 98.00
Property
Hainan Pearl River Landscaping Co., Landscaping
Ltd Wholly 3 100.00 100.00
Company
Hainan Pearl River Property Cleaning Cleaning
Co., Ltd Wholly 3 100.00 100.00
Company
Hainan Pearl River Property Electrical Electrical and
and Mechanical Engineering Company Mechanical Wholly 3 100.00 100.00
Company
Hubei Pearl River Real Estate
Development Co., Ltd Hubei Property Holdings 2 89.20 89.20
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
Shareholding ratio Proportion of voting rights
Company name Abbreviation Unit type Level
（%） （%）
Wuhan Zhujiang Meilin Hotel
Management Co., Ltd Meilin Hotel Wholly 3 100.00 100.00
Hainan Pearl River Industrial Co., Ltd. Shanghai
Wholly 100.00 100.00
Shanghai real estate company Property
Beijing Jiubo Culture Development Co.,
Jiubo Culture Wholly 100.00 100.00
Ltd
Mudanjiang City Zhujiang Wanjia
Mudanjiang
Tourism Investment Development Wholly 100.00 100.00
Group
Group Co., Ltd
Xuexiang
Hailin Wanjia Xuexiang Resort Hotel Wholly 100.00 100.00
Resort
Mudanjiang Jingpo Lake Zhujiang Jingpo Lake
Wholly 100.00 100.00
Wanjia Hotel Co., Ltd Hotel
Mudanjiang
Mudanjiang Wanjia Star Hotel Co., Ltd Wholly 100.00 100.00
Hotel
Harbin Wanjia Travel Service Co., Ltd Travel Wholly 3 100.00 100.00
Hebei Zhengshi Qinghui Real Estate
Hebei Property Holdings 51.00 51.00
Development Co., Ltd
Shanghai Pearl Property Management
Pearl Property Holdings 50.00 50.00
Co., Ltd
At the end of the period, 3 companies were decreased within the range of the combined financial statement: SanyaWanjia Hotel
Management Co., Ltd., Heilongjiang LongshiZhujiang Cultural Transmission Co., Ltd., and Hainan Zhujiang Real Estate Marketing
Plan Co., Ltd. SanyaWanjia Hotel Management Co., Ltd. completed the equity delivery procedures on December 15, 2016;
Heilongjiang LongshiZhujiang Cultural Transmission Co., Ltd. completed the equity delivery procedures on May 16, 2016; Hainan
Zhujiang Real Estate Marketing Plan Co., Ltd. completed the industrial and commercial cancellation procedures on March 9, 2016.
III． Preparation basis of simulated financial statement
1. Preparation basis of simulated financial statement
On the basis of continuous operation, the company has conducted confirmation and measurement as per the actually occurred
transaction and affairs, the Enterprise Accounting Criterion—Basic Criterion and the specific enterprise accounting criterion, the
enterprise accounting criterion application guide, the enterprise accounting criterion explanation and other relevant regulations
(hereinafter collectively referred to as “the enterprise accounting criterion”), and then on this basis, it has also compiled the financial
statement in combination with No. 15 Information Disclosure Formulation and Report Regulations of Companies with Public Issue
of Securities—General Regulations for Financial Report (Revised in 2014).
2. Going concern
The company since the final 12 months there is no ability to continue as a going concern our company serious doubts about the items
or situations.
IV． 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.
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
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 December 31, 2016.
3. Reporting currency
The Company’s reporting and presentation currency is Renminbi (“RMB”).
4. Business combinations
4.1. 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.
4.2. 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.
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
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
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.
4.3. 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. In the merger agreement on a future event that is
likely to affect the combination costs make a contract, if estimated future matters are likely to occur and the influence of the amount
on the combination costs can be reliably measured, are also included in the combination costs.
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.
In case that the merger of enterprises under different controls that is realized by steps through several times of exchange transaction
belongs to a package deal, each transaction shall be subject to accounting treatment as the transaction that has obtained the control
right; in case that it doesn’t belong to a package deal, the individual financial statements and the consolidated financial statements
shall be distinguished and subject to the relevant accounting treatment respectively:
（1）In the individual financial statements, in case that the equity investment held before the date of merger is checked as per the
equity method, the sum of the book value of the acquiree’s equity investment held before the date of purchasing and the newly
increased investment cost on the date of purchasing shall be regarded as the initial investment cost of such investment; other
comprehensive incomes checked and confirmed through adopting the equity method for the equity investment held before the date of
purchasing shall be subject to accounting treatment when disposing the investment through adopting the basis for the direct disposal
of relevant assets or debts of the invested unit.
In case that the equity investment held before the date of merger isconfirmed by financial instrument and checked as per the
measurement standard, the sum of the fair value of the equity investment on the date of merger and the newly increased investment
cost shall be regarded as the initial investment cost on the date of merger. The balance between the fair value and book value of
original equity held and accumulativefair value changesincluded in other comprehensive incomes shall be transferred into the
investment income of the current period on the date of merger.
（2）In the consolidated financial statements, to hold the equity of the acquiree before on the acquisition date. 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.
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.
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
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. Jointly operated arrangement classification and joint management accounting processing method
1. Jointly operated arrangement classification
According to the structure and legal form of jointly operated arrangement and the terms, other relevant facts and situations agreed
injointly operated arrangement, the company will divide jointly operated arrangement into joint management and joint venture.
The jointly operated arrangement not reached by separate subject is divided into joint management; the jointly operated arrangement
reached by separate subject is usually divided into joint venture; but the concrete evidence shows that the jointly operated
arrangement that meets the any one of the following conditions and the relevant laws and regulations is divided into joint
management:
(1) The legal form of jointly operated arrangement shows that the joint venture shall enjoy the right and under the obligation for the
relevant assets and liabilitiesin arrangementrespectively.
(2) The contract terms of jointly operated arrangement agree that the joint venture shall enjoy the right and under the obligation for
the relevant assets and liabilitiesin arrangementrespectively.
(3) The other relevant facts and situations show that the joint venture shall enjoy the right and under the obligation for the relevant
assets and liabilitiesin arrangementrespectively, and for instance, the joint venture enjoys almost all outputs related to jointly operated
arrangement, and the liquidation of the liabilitiesin arrangement depends on the support from the joint venture continuously.
2. Joint management accounting processing method
The company confirms the following items related to quantum of interest in joint management, and conducts accounting processing
according to the regulations of Accounting Standards for Business Enterprises:
(1) Confirm the asset held solely and the asset held jointly as per share;
(2) Confirm the liability borne solely and the liability borne jointly as per share;
(3) Confirm the income from selling the enjoyed joint management output share;
(4) Confirm the income from selling the joint management output as per share;
(5) Confirm the expense incurred solely and the expense incurred by joint management as per share.
The company outputs or sells the asset to joint management (except the asset constitutes the business), and before the joint
management sells the asset to the third party, the part belonging to other participants in the profit and lossincurred by the deal is only
confirmed. In case that the asset output or sold conforms to the asset impairment loss specified in Accounting Standards for Business
Enterprises No.8 -- Asset Impairment, the company shall confirm the full loss.
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
Before the company purchases the asset from joint management (except the asset constitutes the business) and sells the asset to the
third party, the part belonging to other participants in the profit and lossincurred by the deal is only confirmed. In case that the asset
purchased conforms to the asset impairment loss specified in Accounting Standards for Business Enterprises No.8 -- Asset
Impairment, the company shall confirm the part loss as per share.
The company shall not enjoy the joint control for joint management, and if the company enjoys the relevant assets of joint
management and undertake the relevant liabilities of joint management, the accounting processing shall still be conducted according
to the above principle; otherwise, the accounting processing shall be conducted according to the regulations of Accounting Standards
for Business Enterprises.
7. Cash and Cash equivalents
Cash refers to cash on hand and demand deposits. “Cash equivalents” refer to short-term, highly liquid investments that are readily
convertible to known amounts of cash and which are subject to an insignificant risk on change in value.
8. Foreign currency transactions
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.
9. 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.
9.2. Recognition and measurement
（1）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
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
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.
（2）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.
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.
（3）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.
（4）Available-for-sale financial assets
Available-for-sale financial assets include non-derivative financial assets that are designated on initial recognition as available for
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
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.
（5）Othere financial liabilities
According to its fair value and the associated transaction cost the sum as the amount of initial recognition. Is follow-up measurement
with the amortized cost.
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
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:
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
（1） Significant financial difficulty of the issuer or obligor;
（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;
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;
（6） 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;
（7） 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 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.
10. Receivables
(1) Receivables with major single amount and provision for bad debts withdrawn
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
1. The confirmation standard of receivables with major single amount and provision for bad debts: the specific standard of major
single amount: the ending balance is up to more than RMB 1,000,000 (including RMB 1,000,000).
2. The withdrawing method of provision for bad debts for receivables with major single amount: separately conduct the impairment
test, and include the provision for bad debts into the current profit and loss according to the balance between the present value and
book value of the expected future cash flow. The receivables without impairment in separate test shall be included into the
corresponding combination of provision for bad debts.
(2) Receivables with provision for bad debts withdrawn as per combination
(1) Determination basis of the credit risk feature combination
In principle, there is no provision for bad debts for receivables of the related parties between enterprises within the consolidation
scope of the Pearl River holdings, and if the concrete evidence shows that receivables can not be withdrawn or receivables are less
likely to be withdrawn, then the provision for bad debts shall be withdrawn as per uncollectible amount.
For receivables without major ending amount and consolidated financial statement of Pearl River holdings, similar to receivables
without impairmentafter separate test, the provision for bad debts shall be withdrawn by aging analysis method.
(2) The withdrawing method confirmed according to credit risk feature combination: the provision for bad debts is withdrawn by
aging analysis method.
Percentage of Accounts Receivable Percentage of Others Receivable
Ages
(%) (%)
Within 1 year (including 1 year, same as following) 2
1 year to 2 years 5
2 years to 3 years 10
3 years to 4 years 20
4 years to 5 years 30
Over 5 years 50
(3) Receivables with not major single amount but provision for bad debts withdrawn
The reason for withdrawing provision for bad debts: the objective evidence shows that the company can not withdraw money
according to the original terms of receivables.
The withdrawing method of provision for bad debts: withdrawing according to the balance between the present value and book value
of the expected future cash flow of receivables.
11. Inventories
(1) Inventories include: development cost (constructing development product), development product, finished goods, low-value
consumable supplies and etc.
The real estate development products include real estate under construction development product, completiondevelopment product
and the land to be developed, etc.. The actual cost of real estate development products includes landtransfer fee, auxiliary
facilitiesexpenditure, building installation engineeringexpenditure, loan expense incurred by project development before completion
and other related expenses in development.
The development cost refers to the real estate that has not been built for the purpose of sales; the land to be developed refers to the
purchased land that is developed into the completiondevelopment product; thedevelopment product refers to the real estate that has
been built for sale. When the integrated development is carried out, the land to be developed is transferred into the development cost;
when the phased developmentis carried out, the part land developed by stage is transferred into the development cost, and the
undeveloped land still remains in the land to be developed.
(2) Inventory valuation method：Real estate development product inventory when individual recognition method is used to determine
its actual cost, other inventory issued by weighted average method.
(3)The determination of net realisable value basis and inventory write-down provision method: The ending inventory shall be
measured according to the lower of cost and net realizable value. The inventory falling price reserves shall be withdrawn according to
the balance between the inventory cost and net realizable value. The net realizable value shall be confirmed according to the
estimated sale priceminus the estimated cost, selling expenses and related taxes after completion.
In case that the influence factors of the previous write-downinventory value have disappeared, the write-down amount is recovered
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
and returned back within the originally withdrawn inventory falling price reserves, and the returned amount is included into the
current profit and loss.
(4) Stock inventory system: Uses the perpetual inventory system.
(5) The amortization method of low-value consumables and packaging: the low-value consumables adopt one-time reselling method.
(6)The accounting method of land development: for the integrated developmentproject, in case that the expense bearing object can be
distinguished, generally, the commercial housing cost is calculated according to the actual area.
(7)The accounting method of public supporting facilities expense
The public supporting facilities that can not be transferred with compensation: included into the commercial housing cost according
to the benefit ratio;
The public supporting facilities that can be transferred with compensation: taking the supporting facilities as the cost accounting
object, to collect the cost.
(8) The accounting method of maintenance funds
According to the local relevant regulations, when the development product is sold (presold), the development cost charged from the
purchaser or withdrawn and included by the company is paid to the maintenance fund management department.
(9) The accounting method of quality deposit
The quality deposit is reserved from the project funds of construction unit according to the construction contract. The maintenance
cost incurred during the warranty period of development product writes off the quality deposit; after the warranty period expires, the
quality deposit balance will be returned to the construction unit.
12. 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 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
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
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. The transfer of accounting methods
(1) Fair value measurement to equity method accounting
As for the equity investment held by the company without control, joint control or significance on the invested unit and conducting
accounting treatment according to financial instrument confirmation and measurement regulations, if it may exert significance or
joint control (without control) on the invested unit due to increased investment, the fair value of original equity investment
(established in accordance with Accounting Standards for Business Enterprises No. 22 – Confirmation and Measurement of Financial
Instruments) and added investment cost will be regarded as initial investment cost accounted based on equity method.
If the original equity investment is classified as available-for-sale financial assets, the balance between fair value and book value as
well as the accumulative fair value changes included into other comprehensive incomes will be transferred to current profits and
losses measured based on equity method.
The balance between the initial investment cost accounted with equity method and the fair value of recognizable net assets on
additional investment date (invested unit) determined and calculated based on the new shareholding ratio after additional investment
will be used to adjust the book value of long-term equity investment and included into current non-operating income.
（2）Fair value measurement or equity method accounting is converted to cost method accounting
As for the equity investment held by the company without control, joint control or significant influence on the invested unit and
conducting accounting treatment according to financial instrument confirmation and measurement regulations, or as for the long-term
equity investment of associated enterprise and joint venture held by the company, if it can control the invested unit not under the
same control due to increased investment, the book value of original equity investment plus additional investment will be regarded as
initial investment cost accounted with cost method while preparing individual financial statement.
The equity investment held before purchase date is included into other comprehensive incomes upon accounting with equity method
will be disposed with the same method as disposing the relevant assets or liabilities.
If the equity investment held before purchase date is disposed according to Accounting Standards for Business Enterprises No. 22 –
Confirmation and Measurement of Financial Instruments, the changes in accumulative fair value included into other comprehensive
incomes will be transferred into current profits and losses upon measurement with cost method.
（3）Equity method accounting is converted to fair value measurement
If the company loses joint control or significant influence on the invested unit due to disposing part of equity investment, the
remaining equity will be measured according to Accounting Standards for Business Enterprises No. 22--Recognition and
Measurement of Financial Instruments. The balance between fair value and book value will be included into current profits and
losses on the date losing joint control or significant influence.
The original equity investment is included into other comprehensive incomes upon end up terminating accounting with equity
method will be disposed with the same method as disposing the relevant assets or liabilities.
（4）Cost method is converted to equity method.
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
If the company loses control to the invested unit due to disposing equity part of investment, and the remaining equity may exert joint
control or significant influence on the invested unit while preparing individual financial statement, it will be measured and adjusted
with equity method.
（5）Cost method is converted to fair value measurement
If the company loses control to the invested unit due to disposing part of equity investment, and the remaining equity may not exert
joint control or significance on the invested unit while preparing individual financial statement, the accounting treatment will be
conducted in accordance with Accounting Standards for Business Enterprises No. 22 – Confirmation and Measurement of Financial
Instruments. The balance between fair value and book value will be included into current profits and losses on the date losing control.
12.4. 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.
When the clause, condition and the economic impact of making equity investment in subsidiaries is subject to one or more of the
following conditions, conduct accounting treatment by taking the multiple transactions as a package deal:
(1) These transactions are considered to be made at the same time or in the case of considering mutual influence;
(2) These transactions only as a whole can achieve a complete business result;
(3) The occurrence of a transaction depends on the occurrence of at least other one transaction;
(4) One transaction alone is not economic, but when being considered together with other transactions, it is economic.
When the company loses its control rights over the original subsidiary because of the disposal of part equity investment or other
reasons other than package deal, a distinction shall be made between individual financial statement and the consolidated financial
statement to conduct the accounting treatment:
(1) As for the disposed equity in individual financial statement, the balance between book value and actual value will be included into
current profits and losses. In case of disposed residual equity with joint control and significant impact on the invested unit, calculate
with equity method, and adjust the residual equity with equity method since the time of obtaining; In case of the disposed residual
equity being not able to jointly control or have a significant influence on the invested unit, conduct accounting treatment according to
relevant regulations in Accounting Standard for Business Enterprises No. 22 — Recognition and Measurement of Financial
Instruments, and account the balance between the fair value on the date losing control and book value into current profits and losses.
(2) In consolidated financial statement, for the balance between each transaction, disposal price and disposed long-term equity
investment before losing control rights to subsidiary and the corresponding net asset share calculated since the date of purchasing or
merging the subsidiary, adjust capital reserve (capital stock premium), and adjust retained earnings for those capital reserves
insufficient for offset; In case of losing control rights to subsidiary, re-calculate residual equity according to fair value on the date of
losing control rights. The difference of sum of the acquired consideration from equity disposal and fair value of residual equities
deducting the shares of net assets continuously calculated from the purchase date of original subsidiary enjoyed upon calculation as
per original shareholding proportion shall be included into the current investment incomes of losing the control rights with goodwill
offset. For other comprehensive income associated with the equity investment of the original subsidiary, it should be converted into
investment income when losing the control rights.
If the transaction disposing subsidiary equity investment until losing control rights belongs to package deal, the transaction will
conduct accounting treatment as a transaction disposing subsidiary equity investment and losing control rights. Accounting treatment
will be conducted separately on individual financial statement and consolidated financial statement;
(1) In individual financial statement, the balance of long-term equity investment book value when disposing price and stock will be
confirmed as other comprehensive income before loss of control rights, and when the control rights lose, the other comprehensive
income concurrently transferred to current profits and losses.
(2) In consolidated financial statement, the balance of net asset shares of subsidiaries when disposing price and investment will be
confirmed as other comprehensive income before loss of control rights, and when the control rights lose, the other comprehensive
income concurrently transferred to current profits and losses.
12.5. Judgment standard of joint control and significant influence
If the company controls certain arrangement together with other participators as agreed and makes decision on activities with
significant influence, the decision may exist upon consent of participators sharing control rights. It will be deemed as the company
controlling the arrangement with other participators. The arrangement refers to joint-operation arrangement.
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
If joint- operation arrangement is reached by independent entity and the company is entitled to the net assets of the independent
entity as agreed, the independent entity will be regarded as joint venture and be accounted with equity method. If the company is not
entitled to the net assets of the independent entity, the independent entity will be regarded as joint operation. The company confirms
the items related to joint operation share and conduct accounting treatment in accordance with Accounting Standards for Business
Enterprises.
The term \"significant influence\" means investors having the power to participate in the decision of financial and operating policies to
invested unit, but not to control or jointly control the formulation of these policies together with other parties. The company judges to
have significant influence on the invested unit by means of one or several circumstances as follows and upon considering all facts
and conditions. (1) Representatives have been appointed in the board of directors or equivalent authorities of the investees; (2)
Participate in making financial and operation policy of the invested unit; (3) Conduct important deals with the invested unit; (4) Send
administrative staff to the invested units; (5) Provide key technical data for the invested units.
13. Investment property
The term \"investment property\" refers to the real estates held for generating rent and/or capital appreciation, including: the right to
use any land which has already been rented; the right to use any land which is held and prepared for transfer after appreciation; and
the right to use any building which has already been rented. The initial measurement of the investment property shall be made at its
cost. An enterprise shall make a follow-up measurement to the investment real estate through the cost pattern. For buildings which
have already been rented, the Company calculates depreciation as the same method of fixed assets. For the right to use any land, it is
amortized with straight-line method according to the serviceable life. At the balance sheet date, where any evidence shows that there
is possible assets impairment, the impairment provision is made.
Listed as follows:
Category Estimated useful lives（Year） Rate of expected net salvage value rate of depreciation (amortization)
Building 25 5.00% 3.80%
In case that the purpose of investment property is changed as self-use, the investment property shall be converted into fixed assets or
intangible assets since the date of changing. In case that the purpose of the self-use real estates is changed as earning rent or capital
gain, fixed assets or intangible assets shall be converted into investment property since the date of changing. In case of conversion,
the book value before conversion should be recognized as the entry value after conversion.
If an investment property is disposed, or if it withdraws permanently from use and it is predicted that no economic benefit will be
obtained from the disposal, this investment real estate should be derecognized. The amount as the book value and relevant taxes are
deducted from the disposal income obtained from the sale investment real estate, transfer, discard or damage of the investment
property shall be included in the current profit and loss.
14. Fixed assets
(1) Recognition of fixed assets
Fixed assets are tangible assets that are held for use in production or supply of goods or services, for rental to others, or for
administrative purpose, and have useful lives more than one accounting year.
The expected discard expenses should be taken into consideration in the ascertainment of the cost of a fixed asset. (1) the economic
benefits associated with the fixed assets are likely to flow into the enterprise; (2) the cost of the fixed asset can be measured reliably.
(2) Initial measurement of fixed assets
The fixed assets of the company shall be measured initially in accordance with its cost. Where the costs of outsourcing fixed assets
include the purchasing price, import tariff and other relevant taxes as well as other expenditures incurred before letting fixed asset
reach the expected serviceable conditions which can directly belong to this asset. The cost of self-built fixed assets is constituted by
the necessary expenditures spent before that property reaches the predetermined serviceable status. As for fixed assets invested by
investors, the entry value thereof equals to the value agreed in investment contracts or agreements. But, should the agreed value in
contracts or agreements is not fair, fair value should be used as the entry value. If the fixed asset is purchased at a price beyond
normal credit conditions and delay in payment, and substantially has financing nature, the cost of the fixed asset shall be confirmed
based on the current value of the acquisition price. The balances between the cost actually paid and the present value of the purchase
price will be included in current profit and loss during the credit period except the part that should be capitalized.
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
(3)The category and depreciation method of fixed assets
（1）Depreciation of fixed assets
The depreciation of fixed assets is calculated and withdrawn within in the predicted service life according to its entry value less the
predicted net residual value. For fixed assets withdrawing impairment reserve, depreciation amount is determined according to book
value deducted impairment reserves and durable years in future.
The company shall determine the fixed asset service life and anticipated net residual value according to the nature and use condition
of the fixed assets.At the end of the year, the company shall recheck the service life, anticipated net residual value and depreciation
method of the fixed assets. In case of difference from the original estimation, the corresponding adjustment shall be made.
Depreciable life and yearly depreciation rate of various fixed assets, are listed as follow:
Estimated useful lives
Category Expected residual value (%) Annual depreciation rate (%)
(years)
Buildings and structures 25 5 3.80
Vehicles 5 5 19.00
General equipments 10 5 9.50
Other equipments 5 5 19.00
(2) Fixed assets subsequent expenses
In case that the subsequent expenditure related to fixed assets conforms to recognition conditions of fixed assets, they shall be
accounted into fixed assets cost; If the fixed assets do not conform to the confirmation criteria, it shall be reckoned into the current
profits and losses.
(3) Disposal of fixed assets
When the fixed assets are disposed or cannot be expected to produce economic interests through use or disposal, the asset shall be
derecognized. The amount as the book value and relevant taxes are deducted from the disposal income obtained from the sale of
fixed assets, transfer, discard or damage of the investment property shall be included in the current profit and loss.
15. Construction in progress
Construction in progress (“CIP”) includes all costs incurred during the preparation period before commencement of construction and
until the asset is ready for its intended use. These costs include direct materials, direct labour, equipment for installation,
construction and installation charges, management fees, gain or loss on trial run production and borrowing costs which are qualified
for capitalization.
CIP is transferred to fixed assets when the asset is ready for its intended use.
At the balance sheet date, where any evidence shows that there is possible CIP impairment, the impairment provision is made
according to Notes II.17.
16. Borrowing Costs
Borrowing costs are interest and other related costs incurred by the Company in connection with the borrowing of funds, and include
interest, amortization of discounts or premiums related to borrowings, ancillary costs incurred in connection with the arrangement of
borrowings, and exchange differences arising from foreign currency borrowings. Borrowing costs that are directly attributable to the
acquisition, construction or production of a qualifying asset shall be capitalized as part of the cost of that asset. The amounts of other
borrowing costs incurred shall be recognized as an expense in the period in which they are incurred.
Qualifying assets are assets (fixed assets, investment property, inventories, etc.) that necessarily take a substantial period of time for
acquisition, construction or production to get ready for their intended use or sale. The capitalization of borrowing costs can
commence only when all of the following conditions are satisfied: (1) expenditures for the asset are being incurred; (2) borrowing
costs are being incurred; (3) activities relating to the acquisition, construction or production of the asset that are necessary to prepare
the asset for its intended use or sale have commenced.
When the qualified asset under acquisition and construction or production is ready for the intended use or sale, the capitalization of
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
the borrowing costs shall be ceased; then the borrowing costs incurred shall be recorded into the profits and losses of the current
period. Borrowing costs due to loans from real estate development are recorded into development cost before the completion of the
project and recorded into current profit and loss after the completion of the project. Borrowing costs are recorded into development
cost and amortized quarterly.
Where the acquisition and construction or production of a qualified asset is interrupted abnormally and the interruption period lasts
for more than 3 months, the capitalization of the borrowing costs shall be suspended. The borrowing costs incurred during such
period shall be recognized as expenses, and shall be recorded into the profits and losses of the current period.
During the capitalization period, the amount of interest to be capitalized for each accounting period shall be determined as follows:
(1) for a specific-purpose borrowing, the amount of interest to be capitalized shall be the actual interest expense incurred for the
period less temporary deposit’s interest or investment income;
(2) Where funds are borrowed under general-purpose borrowings, the Company shall determine the amount of interest to be
capitalized by applying a capitalization rate to the weighted average of the excess amounts of cumulative expenditures on the asset
over and above the amounts of specific-purpose borrowings. The capitalization rate shall be the weighted average of the interest rates
applicable to the general-purpose borrowings.
17. Intangible assets
The term \"intangible assets\" refers to the identifiable non-monetary assets possessed or controlled by enterprises which have no
physical shape. If it is unable to forecast the period when the intangible asset can bring economic benefits to the enterprise, it shall be
regarded as an intangible asset with uncertain service life. The intangible assets shall be initially measured according to its cost. If it
is unable to determine the expected realization pattern reliably, intangible assets shall be amortized by the straight-line method. An
enterprise shall, at least at the end of each year, check the service life and the amortization method of intangible assets with limited
service life, and adjust them when necessary. Intangible assets with uncertain service life may not be amortized. An enterprise shall
check the service life of intangible assets with uncertain service life during each accounting period. Where any evidence shows that
there is possible assets impairment, the impairment provision is made.
18. Long-term prepaid expenses
Long-term prepaid expenses mainly include spending paid with the benefit period of more than one year (excluding the year period)
such as car parking fees, housing renovation fees, etc. Long-term prepaid expenses shall be amortized the costs over the duration of
the project beneficiary.
19. Contingencies liabilities
The obligation pertinent to a Contingencies shall be recognized as accrued liabilities when the following conditions are satisfied
simultaneously: (1) That obligation is a current obligation of the enterprise; (2) It is likely to cause any economic benefit to flow out
of the enterprise as a result of performance of the obligation; (3) The amount of the obligation can be measured in a reliable way. The
estimated debts shall be initially measured in accordance with the best estimate of the necessary expenses for the performance of the
current obligation.
20. Revenue recognition
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 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
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
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:
(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:
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
(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
V． Changes of significant accounting policies and accounting estimates and prior error correction
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
Sales of goods, taxable services income and taxable
Value-added tax 3%、5%、6%、11%、13%、17% services revenue (business reform pilot areas
applicable taxable services income)
Real estate sales revenue, rental, property
Business tax 5%
management income
Business tax 3% Cultural and sports income
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
Category Rate Taxable base
Sales of goods, taxable services income and taxable
Value-added tax 3%、5%、6%、11%、13%、17% services revenue (business reform pilot areas
applicable taxable services income)
Business tax 20% Entertainment industry income
City construction and maintenance tax 5%、7% Payable turnover tax
Education fee 3% Payable turnover tax
Local education fee is attached 1.5%、2% Payable turnover tax
Income tax 10%、25% Taxable income
According to 70% of the original value of the
property tax 1.2%、8%、12%
property (or rental income) for the tax base
Land value - added tax 1.5% According to the amount of income
Different taxable income tax rate Description:
The three-tier subsidiary Shanghai Pearl Property Management Co., Ltd. and Wuhan Zhujiang Meilin Hotel Management Co., Ltd.
belong to the small profit-making enterprise, the applicable enterprise income tax rate is 10%, the Company and other subsidiaries
applicable corporate income tax rate of 25%.
VI.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 1,305,777.52 620,470.49
Bank deposit 240,190,186.44 205,111,692.83
Other monetary funds 5,008,387.43 29,968.22
Total 246,504,351.39 205,762,131.54
The restricted monetary fund details are as follows:
Project Closing Balance Opening Balance
CDS used for hypothecation deposit and notice deposit 5,000,000.00
Total 5,000,000.00
Note: as of December 31, 2016, this company limited monetary fund is a subsidiary of Hubei of pledge of property to Shanghai
pudong development bank loan margin.
Note 2 Accounts receivable
1) Disclosure of category details of accounts receivable:
Closing Balance
Categories Book Balance Provision for Bad Account
Rate Chargeable Book Value
Amounts Ratio(%) Amounts
（%）
Accounts receivable with
significant single amount and 8,856,207.60 31.23 8,856,207.60 100.00
individual provision for bad debts
Accounts receivable with
combinational withdrawal of the
17,480,913.67 61.64 1,396,774.35 7.99 16,084,139.32
bad debt provision by credit risks
characteristics
Accounts receivable with
non-significant single amount and 2,022,991.02 7.13 2,022,991.02 100.00
individual provision for bad debts
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
Closing Balance
Categories Book Balance Provision for Bad Account
Rate Chargeable Book Value
Amounts Ratio(%) Amounts
（%）
Total 28,360,112.29 100.00 12,275,972.97 ----- 16,084,139.32
Continued：
Opening Balance
Categories Book Balance Provision for Bad Account
Rate Chargeable Book Value
Amounts Ratio(%) Amounts
（%）
Accounts receivable with
significant single amount and 7,761,707.60 27.46 7,761,707.60 100.00
individual provision for bad debts
Accounts receivable with
combinational withdrawal of the
18,244,347.09 64.54 1,353,019.47 7.42 16,891,327.62
bad debt provision by credit risks
characteristics
Accounts receivable with
non-significant single amount
2,261,420.02 8.00 1,990,766.02 88.03 270,654.00
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 Accounts Provision for Reasons of
Rate Chargeable（%）
Receivable Bad Account Withdrawal
Hainan racing entertainment Co.,
2,406,158.00 2,406,158.00 100.00 Irrecoverable
LTD
Hainan Baoping company 2,218,494.43 2,218,494.43 100.00 Irrecoverable
Hainan Zhongyuan tenement Irrecoverable
2,090,069.77 2,090,069.77 100.00
agency company
Singapore China holding Co., Irrecoverable
1,094,500.00 1,094,500.00 100.00
LTD
Hainan dragon film studio 1,046,985.40 1,046,985.40 100.00 Irrecoverable
Total 8,856,207.60 8,856,207.60 -----
(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 7,946,820.54 158,936.42 2.00
1－2 years 5,856,250.85 292,812.55 5.00
2－3 years 824,727.71 82,472.78 10.00
3－4 years 1,271,562.90 254,312.58 20.00
4－5 years 912,679.10 273,803.73 30.00
Over 5 years 668,872.57 334,436.29 50.00
Total 17,480,913.67 1,396,774.35 -----
Continued：
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
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 Provision for Rate Chargeable
Accounts Receivable Reasons of Withdrawal
Bad Account （%）
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 Irrecoverable
250,000.00 250,000.00 100.00
development company
Hainan Jinhe Real estate Irrecoverable
119,446.00 119,446.00 100.00
company
Hainan Qiongshan Tianxin Irrecoverable
112,116.50 112,116.50 100.00
Pawn Investment company
Amount below RMB100000 Irrecoverable
592,196.52 592,196.52 100.00
(18households)
Total 2,022,991.02 2,022,991.02 -----
2) Situation of the current bad debt provision withdrawn, recovered or reversed:
The amount of current bad debt provision withdrawn was RMB1,170,479.88yuan.
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 Receivable (%) Withdrawn
Hunan Railway Lianchuang
Technology Development 3,646,668.90 12.86 72,933.38
Co., Ltd.
Sino (Zhengzhou) Real Estate
3,525,276.00 12.43 155,866.08
Co., Ltd.
Hainan racing entertainment
2,406,158.00 8.48 2,406,158.00
Co., LTD
Hainan Baoping company 2,218,494.43 7.82 2,218,494.43
Hainan Zhongyuan tenement
2,090,069.77 7.37 2,090,069.77
agency company
Total 13,886,667.10 48.96 6,943,521.66
Note 3 Advance payment
1) Advance payment is listed as per the aging.
Closing Balance
Aging
Accounts Paid in Advance Ratio （%） Provision for Bad Account
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
Closing Balance
Aging
Accounts Paid in Advance Ratio （%） Provision for Bad Account
Within 1 year 3,196,725.55 4.28
1－2 years 8,121,038.47 10.88
2－3 years 570,000.00 0.76
Over 3 years 62,761,186.00 84.08 7,050,161.00
Total 74,648,950.02 100.00 7,050,161.00
Continued：
Opening Balance
Aging
Accounts Paid in Advance Ratio （%） Provision for Bad 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
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
Name Closing Balance Aging Reasons why to fail to be settled timely
Haikou Hongzhou Real Estate
50,000,000.00 over 3years Not check and accept the house
Development Unrelated Client
Heilongjiang province mudanjiang
8,068,538.47 1-2years Advance payment for the construction cost
forest engineering company
Dahailin Forestry Bureau 4,596,469.00 over 3 years Advance payment for the construction cost
Hebei in implementing investment over 3 years
4,000,000.00 Project shutdown
co., LTD
Hebei mountain building materials over 3 years
2,800,000.00 Project shutdown
co., LTD
Total 69,465,007.47
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 Advance
Name Closing Balance total advance Payment Reasons why to be outstanding
payment (%) Time
The house under the advance
Haikou Hongzhou Coastal over 5
50,000,000.00 66.98 payment is not checked and accepted
Construction Co., Ltd. years
temporarily
Within 1
Heilongjiang Mudanjiang
8,489,855.99 11.37 yea、 The payment is finished in advance
Forestry Engineering Company
1-2years
Advance payment for the
Dahailin Forestry Bureau 4,596,469.00 6.16 4-5years
construction cost
Hebei in implementing Project shutdown
4,000,000.00 5.36 3-5years
investment co., LTD
Hebei mountain building Project shutdown
2,800,000.00 3.75 3-4years
materials co., LTD
Total 69,886,324.99 93.62
4) Other descriptions on advance payment
According to the Arrangement agreed upon “Supplementary Agreement of Execution of Longzhu Phase-III Project” made by
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
between the Company and Haikou Real Estate Development Co., Ltd. (hereinafter referred to as “Hongzhou Real Estate”), the
Company prepaid with RMB50 million 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, 2016, 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 Interest receivable
Item Closing Balance Opening Balance
Enterprise loan interest 2,710,880.79
Total 2,710,880.79
Note 5 Dividends receivable
Investee Closing Balance Opening Balance
Hainan PEARL RIVER Tube-pile Co., Ltd. 260,015.00 260,015.00
Total 260,015.00 260,015.00
Note 6 Other receivables
1) Disclosure of category details of other receivables
Closing Balance
Categories Book Balance Provision for Bad Account
Book Value
Amounts Ratio(%) Amounts Rate Chargeable（%）
Other receivables with
significant single amount and
53,159,496.14 10.51 53,159,496.14 100.00
individual provision for bad
debts
Other receivables with
combinational withdrawal of
448,284,617.33 88.62 97,418,770.28 21.73 350,865,847.05
the bad debt provision by
credit risks characteristics
Other receivables with
non-significant single amount
4,391,560.82 0.87 4,387,360.82 99.90 4,200.00
and individual provision for
bad debts
Total 505,835,674.29 100.00 154,965,627.24 ----- 350,870,047.05
Continued：
Opening Balance
Categories Book Balance Provision for Bad Account
Book Value
Amounts Ratio(%) Amounts Rate Chargeable（%）
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
Opening Balance
Categories Book Balance Provision for Bad Account
Book Value
Amounts Ratio(%) Amounts Rate Chargeable（%）
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 Reasons of
Other Receivables Rate Chargeable（%）
Bad Account Withdrawal
Singapore China holding co.,
16,981,016.24 16,981,016.24 100.00 Irrecoverable
LTD
Shenzhen Yinxiang Computers
6,482,625.00 6,482,625.00 100.00 Irrecoverable
Co., Ltd.
Hainan macun port harbor Irrecoverable
6,000,000.00 6,000,000.00 100.00
company
Beijing kun of consulting Irrecoverable
3,200,000.00 3,200,000.00 100.00
services co., LTD
Dingjia International Co., Ltd. 2,725,702.71 2,725,702.71 100.00 Irrecoverable
Hainan Enxin Industry Co., Ltd. 2,314,592.00 2,314,592.00 100.00 Irrecoverable
Hainan Zhongda Real Estate
2,210,779.10 2,210,779.10 100.00 Irrecoverable
Company
Dabao Cement Factory 1,901,383.56 1,901,383.56 100.00 Irrecoverable
Jinguang Real Estate Company 1,752,100.00 1,752,100.00 100.00 Irrecoverable
Shenzhen Zhuce Real Estate
1,550,278.23 1,550,278.23 100.00 Irrecoverable
Company
Shenzhen State-Investment
1,409,934.28 1,409,934.28 100.00 Irrecoverable
Securities Co., Ltd.
Haikou Industrial Development
1,392,430.00 1,392,430.00 100.00 Irrecoverable
Import and Export Co., Ltd.
Xinhua Liming Aviation
1,208,804.70 1,208,804.70 100.00 Irrecoverable
Decoration Company
Hainan Shenhai Real Estate Co.,
1,029,850.32 1,029,850.32 100.00 Irrecoverable
Ltd.
Hainan Yangtze River Travel 1,000,000.00 1,000,000.00 100.00 Irrecoverable
Sanya Land and Housing
1,000,000.00 1,000,000.00 100.00 Irrecoverable
Administration
Beijing jardine spring catering
1,000,000.00 1,000,000.00 100.00 Irrecoverable
co., LTD
Total 53,159,496.14 53,159,496.14 -----
（2） Other receivables in the combination which adopts aging analysis method to determine provision for bad debt:
Aging Closing Balance
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
Other Receivables Provision for Bad Account Rate Chargeable（%）
Within 1 year 190,264,261.72 3,805,285.26 2.00
1－2 years 22,129,825.90 1,106,491.30 5.00
2－3 years 497,956.54 49,795.66 10.00
3－4 years 31,339,904.84 6,267,980.97 20.00
4－5 years 79,185,585.34 23,755,675.60 30.00
Over 5 years 124,867,082.99 62,433,541.49 50.00
Total 448,284,617.33 97,418,770.28 -----
Continued：
Opening Balance
Aging
Other Receivables Provision for Bad Account Rate Chargeable（%）
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
Closing Balance
Name Other Provision for
Rate Chargeable（%） Reasons of Withdrawal
Receivables Bad Account
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
1,767,411.44 1,763,211.44 99.76
（49units） amount according to the estimate
Total 4,391,560.82 4,387,360.82 -----
2) Situation of the current bad debt provision withdrawn, recovered or reversed:
The amount of current bad debt provision withdrawn was RMB59,858,143.35 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.
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
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 Closing Balance of
Name Nature of Money Aging Amount of Other
Balance Bad Debt Provisions
Receivables (%)
Payment for the
Beijing Kangtai Xingye 4-5years、
project and 102,500,000.00 20.26 42,470,000.00
Investment Co.,Ltd over 5 years
intercourse funds
Payment for the 4-5years、
Public Investment Co., Ltd 100,400,000.00 19.85 42,800,000.00
project over 5 years
Beijing science and
Within 5
technology development co., Intercourse funds 112,720,000.00 22.28 2,254,400.00
years
LTD
Lion king international Payment for the 1-2years、
50,000,000.00 9.88 7,000,000.00
investment co., LTD project 3-4years
Singapore Great Land 1-5years 、
Intercourse funds 16,981,016.24 3.36 16,981,016.24
Holdings Co.,Ltd over 5year
Total 382,601,016.24 75.63 111,505,416.24
In 2016, the company and Beijing Runshun Science and Technology Development Co., Ltd. (hereinafter referred to as “Runshun
Science and Technology”) signed the grain trade purchase agreement and paid the prepayment of RMB 112,720, 000 and later the
eighth board of directors of the company held the 8th meeting in order to solve the competition between controlling shareholders and
company and cancel the grain trade business. Agreed by both sides, the item above-mentioned will be returned on the beforeof
September 30, 2017.
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. On
December 31, 2016, the two sides signed agreement, the termination of the project cooperation and recovery of the investment fund.
As of this report, is according to the agreement to recover the first instalment of 10 million yuan.
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 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 September 2016, 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. Agreement on December 31, 2017 Du Guwan iron ore or zhao courtyard iron ore mining administrative
licensing (mining) under the condition of continue to perform the original agreement, otherwise the company out of the original
project cooperation agreement, and to the public before June 30, And on June 30 2018 bear the payment obligation of investment
fund and fund cost to the company. By the financial report, KTS industrial company is entrusted agencies actively deal with mining
license. Note 7 inventories
1) Classification of inventories
Items Closing Balance Opening Balance
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
Provision for Provision for
Book Balance Book Value Book Balance Book Value
Fall in Price Fall in Price
Raw materials 2,780,859.54 2,780,859.54 3,842,806.40 3,842,806.40
Low-value
355,982.90 355,982.90 468,875.07 468,875.07
consumption goods:
Finished goods 347,003.84 347,003.84 481,325.15 481,325.15
Constructing
development product
42,701,132.90 17,439,325.19 25,261,807.71 505,152,399.54 17,439,325.19 487,713,074.35
Development
290,815,415.14 21,726,889.27 269,088,525.87 60,332,670.16 21,726,889.27 38,605,780.89
products
Consumptive
33,627.19 33,627.19 33,627.19 33,627.19
biological assets
Total 337,034,021.51 39,166,214.46 297,867,807.05 570,311,703.51 39,166,214.46 531,145,489.05
The closing book value of inventories used for the guarantee was RMB29,805,826.29 yuan, the details are set forth in Note 45
2) Provision for fall in price of inventories
Current Increase Current Decrease
Opening Amount Closing
Categories Amount Amount
Balance Withdra Other Other Balance
Reversed Written Off
wn
Products Developed 21,726,889.27 21,726,889.27
Constructing
development product
17,439,325.19 17,439,325.19
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 of
Name of Opening Current capitalized amount
Decrease of Other Closing Balance
Inventory Balance Increase confirmed in this
Sales Decrease period (%)
Meilin Qingcheng
67,446,185.56 9,918,010.97 62,151,819.82 15,212,376.71 8.52
（Phase III）
Total 67,446,185.56 9,918,010.97 62,151,819.82 15,212,376.71 8.52
4) Development Cost
Starting Estimated Total Investment
Name of Project Closing Balance Opening Balance
Time Completion Time Estimated
Wuhan Meilin
April 2013 June 2016 640,000,000.00 25,261,807.71 487,713,074.35
Qingcheng
Hebei New
17,439,325.19 17,439,325.19
Residential Project
Total 640,000,000.00 42,701,132.90 505,152,399.54
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. On December 5, 2016 in hubei province real estate company merrill lynch qingcheng mountain
phase three project has obtained a certificate of completion inspection and acceptance for the record and start making a room
formalities on December 7th.
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
Name of Project Current Decrease Closing Balance
Time Balance Increase
Wuhan Meilin
August 2006 497,649.84 497,649.84
Qingcheng, Phase I
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
Completion Opening Current
Name of Project Current Decrease Closing Balance
Time Balance Increase
Wuhan Meilin
September 2009 7,117,653.91 7,117,653.91
Qingcheng, Phase II
Haikou Dijing Building,
In 1995 5,315,696.54 5,315,696.54
6 floors
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
Wuhan Meilin December
663,740,097.52 433,257,352.54 230,482,744.98
Qingcheng, Phase III
Total 60,332,670.16 663,740,097.52 433,257,352.54 290,815,415.14
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 8 Other current assets
Category and content Closing Balance Opening Balance
Prepaid Taxes 8,714,139.07
Total 8,714,139.07
Note: other current assets prepay taxes for subsidiary of HuBei house opens to booking the relevant taxes involved in the pearl river
real estate company.
Note 9 Available-for-sale financial assets
1) Information of available-for-sale financial assets
Closing Balance Opening Balance
Item Impairment Impairment
Book Balance Book Value Book Balance Book Value
Provision Provision
Available-for-sale
equity instruments：
Measured at fair
value
Measured at the
49,263,555.29 18,438,560.39 30,824,994.90 35,263,555.29 23,852,245.39 11,411,309.90
cost
Total 49,263,555.29 18,438,560.39 30,824,994.90 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.
3) Equity instruments measured at the cost at the end of report period
Ratio of shares held Book Balance
Investee in the investee Opening Current Current Closing
(%) Balance Increase Decrease Balance
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
Investee Ratio of shares held Book Balance
in the investee
Hainan pearl river pipe pile co.,
426,315.00 426,315.00
LTD 1.33
Hainan province chamber of
500,000.00 500,000.00
commerce 6.67
China to promote science and
10,000,000.00 10,000,000.00
technology investment co., LTD 10.00
Hainan China pearl river basic
160,000.00 160,000.00
engineering co., LTD 1.07
Guangzhou pearl river investment
18,177,240.29 18,177,240.29
management co., LTD 9.48
Hainan macun port harbor
15.00 6,000,000.00 6,000,000.00
company
HuaQing emerging construction
engineering management 20.00
(Beijing) co., LTD
Chongqing long jinbao network
13.559 20,000,000.00 20,000,000.00
technology co., LTD
Shenzhen fortis loan financial
20.00
services co., LTD
Total 35,263,555.29 20,000,000.00 6,000,000.00 49,263,555.29
Continued：
Impairment Provision
Current Cash
Investee Opening Current Current
Closing Balance Bonus
Balance Increase Decrease
Hainan pearl river pipe pile co.,
426,315.00 426,315.00
LTD
Hainan province chamber of
500,000.00 500,000.00
commerce
China to promote science and
10,000,000.00 10,000,000.00
technology investment co., LTD
Hainan China pearl river basic
160,000.00 160,000.00
engineering co., LTD
Guangzhou pearl river investment
7,352,245.39 7,352,245.39
management co., LTD
Hainan macun port harbor
6,000,000.00 6,000,000.00
company
HuaQing emerging construction
engineering management (Beijing)
co., LTD
Chongqing long jinbao network
technology co., LTD
Shenzhen fortis loan financial
services co., LTD
Total 23,852,245.39 586,315.00 6,000,000.00 18,438,560.39
Note: the company to HuaQing emerging construction engineering management (Beijing) co., LTD. 20% stake, and the shenzhen co.,
LTD. 20% stake in fortis credit financial services are subscribed stage, not actual investment.
Note 10 Long-term Equity Investment
Current Increase or Decrease
Investment
Investee Opening Balance Additional
Contribution Results Adjustment of Other
Contributio
Reduced Recognized by Comprehensive Income
n
Equity Method
1. Associated Enterprises
Sanya Wanjia Industry Co.,
33,811,762.82 -1,417,962.27
Ltd.
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
Current Increase or Decrease
Investment
Investee Opening Balance Additional
Contribution Results Adjustment of Other
Contributio
Reduced Recognized by Comprehensive Income
n
Equity Method
Beijing Viewpoint Discovery
1,472,998.82 -154.39
Media Co., Ltd.
Sub-total 35,284,761.64 -1,418,116.66
Total 35,284,761.64 -1,418,116.66
Continued：
Current Increase or Decrease
Declared to Closing Balance of
Investee Change of Impairmen Closing Balance
grant cash Impairment Reserve
Other t Provision Other
dividends
Equities Withdrawn
or profits
1. Associated Enterprises
Sanya Wanjia Industry Co.,
32,393,800.55
Ltd.
Beijing Viewpoint Discovery
1,472,844.43
Media Co., Ltd.
Sub-total 33,866,644.98
Total 33,866,644.98
The Company’s long-term equity investment does not the situation that the capacity of remitting funds to the other companies is
restricted.
Note 11 Investment-based real estate
1) Information of investment-based real estate
Construction in
Item Houses and buildings Land Use Right Total
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 1,091,632.30 1,091,632.30
（ 1 ） Amount
Withdrawn or 1,091,632.30 1,091,632.30
Amortized
2.3 Current Decrease 304,446.88 304,446.88
（1）Disposal 304,446.88 304,446.88
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
Construction in
Item Houses and buildings Land Use Right Total
Progress
2.4 Closing Balance 9,205,051.50 9,205,051.50
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 19,244,780.80 19,244,780.80
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 RMB15,319 ,431.78yuan, the details are set forth in Note 45.
Note 12 Original value and depreciation of fixed assets
1) Information of fixed assets
Houses and Common
Item Transportation Other Equipments Total
buildings Equipments
1. Totality of Original
Book Value
1.1 Opening Balance 484,171,297.64 67,638,005.65 36,370,053.11 54,509,261.26 642,688,617.66
1.2 Current Increase 8,030.00 808,484.56 2,314,054.89 3,130,569.45
（1）Purchase 8,030.00 808,484.56 2,314,054.89 3,130,569.45
（2）Transferred in from
Construction in Progress
（3）Other Transfer-in
1.3 Current Decrease 232,065,777.88 46,145,164.15 7,109,394.23 28,249,325.93 313,569,662.19
（1）Disposal or Scrap 13,361,409.41 16,811,621.43 6,335,192.23 5,893,307.86 42,401,530.93
（2）Other Transfer-out 218,704,368.47 29,333,542.72 774,202.00 22,356,018.07 271,168,131.26
1.4 Closing Balance 252,105,519.76 21,500,871.50 30,069,143.44 28,573,990.22 332,249,524.92
2. Accumulative
Depreciation
2.1 Opening Balance 108,533,367.07 42,330,717.73 27,975,750.89 47,022,708.00 225,862,543.69
2.2 Current Increase 18,062,595.77 4,870,156.73 2,937,201.59 2,916,346.53 28,786,300.62
（1）Amount Withdrawn 18,062,595.77 4,870,156.73 2,937,201.59 2,916,346.53 28,786,300.62
2.3 Current Decrease 80,490,824.75 38,842,547.77 5,934,705.67 25,040,468.41 150,308,546.60
（1）Disposal or Scrap 6,044,879.06 15,706,809.81 5,359,664.05 5,540,477.95 32,651,830.87
（2）Other Transfer-out 74,445,945.69 23,135,737.96 575,041.62 19,499,990.46 117,656,715.73
2.4 Closing Balance 46,105,138.09 8,358,326.69 24,978,246.81 24,898,586.12 104,340,297.71
3. Impairment Reserve
3.1 Opening Balance 7,499,295.92 7,499,295.92
3.2 Current Increase
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
Houses and Common
Item Transportation Other Equipments Total
buildings Equipments
3.3 Current Decrease
3.4 Closing Balance 7,499,295.92 7,499,295.92
4. Totality of Book Value
4.1 Closing Book Value 198,501,085.75 13,142,544.81 5,090,896.63 3,675,404.10 220,409,931.29
4.2 Opening Book Value 368,138,634.65 25,307,287.92 8,394,302.22 7,486,553.26 409,326,778.05
2) Other descriptions on fixed assets
（1） The closing book value of assets used for the guarantee was RMB 105,179,978.79 yuan, the details are set forth in Note 45.
(2) The closing original value of fixed assets that continued to work after being depreciated fully was RMB50,155,923.49 yuan.
Note 13 Construction in progress
1) Information of construction in progress
Closing Balance Opening Balance
Item Book Impairment Book Impairment
Book Value Book Value
Balance Reserve Balance Reserve
Snow Town Train
5,648,964.09 3,000,000.00 2,648,964.09 5,648,964.09 2,400,000.00 3,248,964.09
550
Snow Town Train
4,180,000.00 2,000,000.00 2,180,000.00 4,180,000.00 1,600,000.00 2,580,000.00
400
Early Stage of
360,000.00 360,000.00 360,000.00 360,000.00
Snow Town
Snow Town
Integrated Service 73,340,730.93 73,340,730.93 73,214,690.93 73,214,690.93
Center
Total 83,529,695.02 5,360,000.00 78,169,695.02 83,403,655.02 4,000,000.00 79,403,655.02
2) Current change of important constructions in progress
Opening Current Current amount transferred
Item Other Decrease Closing Balance
Balance Increase into fixed assets
Snow Town
Integrated Service 73,214,690.93 126,040.00 73,340,730.93
Center
Total 73,214,690.93 126,040.00 73,340,730.93
Continued：
Ratio of
Budget investment Including：
Progress of Accumulativ Current
(10 in the Current
Item Construction e Interest Capitalization Rate of Sources of Funds
thousan constructio Interest
(%) Capitalized Interest (%)
d yuan) n in the Capitalized
budget (%)
Snow Town
Integrated 10,605.84 69.15 13,567,288.74 Bank loan
Service Center
Total 10,605.84 69.15 —— 13,567,288.74 Bank loan
3) Information of withdrawal of impairment provision of construction in progress in this report period
Item Current Amount Withdrawn Reasons of Withdrawal
Snow Town Train 550 600,000.00 The progress of project starting fails to reach the
expectation, which causes the reduction of use value of
Snow Town Train 400 400,000.00 assets
Early Stage of Snow Town
360,000.00 The design is terminated
（L.chinensis mountain）
Total 1,360,000.00
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
Note 14 Materials for the construction
Item Closing Balance Opening Balance
Devices with Special Uses 393,706.60
Total 393,706.60
Note 15 Intangible Assets
1) Information of intangible assets
Item Software Land Use Right Trademark Right Other Total
1. Totality of Original
Book Value
1.1 Opening Balance 2,048,798.28 36,008,635.65 93,900.00 2,087,132.00 40,238,465.93
1.2 Current Increase 46,090.86 46,090.86
（1）Purchase 46,090.86 46,090.86
1.3 Current Decrease 6,403.42 1,839,022.44 695,732.00 2,541,157.86
1.4 Other Decrease 611,849.61 30,342,484.00 480,000.00 31,434,333.61
1.5Closing Balance 1,476,636.11 3,827,129.21 93,900.00 911,400.00 6,309,065.32
2. Accumulative
Depreciation
2.1 Opening Balance 1,497,757.23 7,854,990.76 14,867.50 440,296.70 9,807,912.19
2.2 Current Increase 162,404.94 913,042.47 9,390.00 23,976.94 1,108,814.35
（1）Amount Withdrawn 162,404.94 913,042.47 9,390.00 23,976.94 1,108,814.35
2.3 Current Decrease 472,664.43 317,369.32 790,033.75
2.4 Other Decrease 468,293.25 7,805,960.00 146,904.32 8,421,157.57
2.5 Closing Balance 1,191,868.92 489,408.80 24,257.50 1,705,535.22
3. Impairment Reserve
3.1 Opening Balance 911,400.00 911,400.00
3.2 Current Increase
3.3 Current Decrease
3.4 Other Decrease
3.5 Closing Balance 911,400.00 911,400.00
4. Totality of Book Value
4.1 Closing Book Value 284,767.19 3,337,720.41 69,642.50 3,692,130.10
4.2 Opening Book Value 551,041.05 28,153,644.89 79,032.50 735,435.30 29,519,153.74
2) Description of intangible assets
The closing book value of land use rights used for the guarantee or mortgage was RMB 1,682,989.91 yuan, the details are set forth in
Note 45.
Note 16Long-term deferred expenses
Opening Current Current Other
Item Closing Balance
Balance Increase Amortization Decrease
Decoration and Reform 4,818,919.52 30,800.00 993,308.30 3,122,926.19 733,485.03
Lease of Snow Park 1,200,000.00 900,000.00 300,000.00
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
Opening Current Current Other
Item Closing Balance
Balance Increase Amortization Decrease
Snow publicity expenses 66,733.49 61,599.96 5,133.53
Snow fish pond royalties 544,885.02 278,826.00 266,059.02
Snow ski resort fee 808,505.23 379,219.92 429,285.31
L.chinensis mountain facilities fee
350,000.00 120,000.00 230,000.00
Erlong studio amusement facilities
fee 240,000.00 120,000.00 120,000.00
Total 8,029,043.26 30,800.00 2,852,954.18 3,122,926.19 2,083,962.89
Note 17 Deferred tax assets/deferred tax liabilities
1) Deferred tax assets not offset
Closing Balance Opening Balance
Item Taxable Temporary Taxable Temporary
Deferred Tax assets Deferred Tax assets
Differences Differences
Real estate enterprises in accordance
with the pre - sale income is expected to 19,941,945.99 4,985,486.50
pay gross income tax
Total 19,941,945.99 4,985,486.50
2) Deferred tax liabilities not offset
Closing Balance Opening Balance
Item Taxable Temporary Deferred Tax Taxable Temporary Deferred Tax
Differences Liabilities Differences Liabilities
Changes in fair value of available - for -
sale financial assets
The difference between the fair value of
the acquiree's identifiable net assets and
2,391,587.72 597,896.93 2,516,911.15 629,227.79
its carrying amount of the net assets
recognized by the business combination
Total 2,391,587.72 597,896.93 2,516,911.15 629,227.79
3) Deferred income tax assets or liabilities as set out in the net amount after offsetting.
The final amount Offset the ending Deferred tax assets
Offset the balance at the beginning of
set-off deferred balance of deferred and liabilities at the
Item deferred income tax assets and
income tax assets income tax assets or beginning of the
liabilities
and liabilities liabilities amount of set-off
Deferred Tax Assets 4,985,486.50
Deferred Tax Liabilities 597,896.93 629,227.79
4) Unconfirmed deferred income tax assets detail the deductible temporary differences
Item Closing Balance Opening Balance
Asset impairment loss 248,748,431.39 191,773,493.16
Deductible losses 212,595,502.92 240,435,653.16
Total 461,343,934.31 432,209,146.32
The deferred income tax assets related to deductible temporary differences and deductible losses are not recognized as a result of the
availability of sufficient taxable income in the future.
5) The deductible loss of unrecognized deferred income tax assets will expire in the following years
Item Closing Balance Opening Balance Remark
2016 10,718,790.30
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
Item Closing Balance Opening Balance Remark
2017 42,354,802.90 42,360,745.56
2018 52,373,550.83 55,726,415.40
2019 45,704,368.46 58,985,428.21
2020 45,826,297.05 72,644,273.69
2021 26,336,483.68
Total 212,595,502.92 240,435,653.16
Note 18 Other Non-current Assets
Category and Item Closing Balance Opening Balance
villa 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, 2016.
Note 19 Provision of asset impairment
Current Increase Current Decrease Closing Balance
Opening
Item Current Current Current Current
Balance
Withdrawal Transfer-in Reverse Transfer-out
Bad debt provision 113,263,137.98 61,181,294.17 152,670.94 174,291,761.21
Provision for decline in value of
39,166,214.46 39,166,214.46
inventories
Provision for impairment of
23,852,245.39 586,315.00 6,000,000.00 18,438,560.39
available-for-sale financial assets
Provision for impairment of
3,081,199.41 3,081,199.41
investment-based real estate
Provision for impairment of fixed
7,499,295.92 7,499,295.92
assets
Provision for impairment of
4,000,000.00 1,360,000.00 5,360,000.00
construction in progress
Provision for impairment of
911,400.00 911,400.00
intangible assets
Total 191,773,493.16 63,127,609.17 6,152,670.94 248,748,431.39
Note 20Accounts Payable
Item Closing Balance Opening Balance
Accounts Payable for the
64,695,314.44 8,603,542.20
Construction
Accounts Payable for the Materials 6,403,644.98 6,290,670.38
Investment not paying 5,000,000.00 5,000,000.00
The deposit 1,528,008.58 1,178,601.33
Supplier payments 2,582,997.37
Other 37.61 657,672.12
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
Item Closing Balance Opening Balance
Total 77,627,005.61 24,313,483.40
Significant accounts payable with aging of more than one year
Name Closing Balance Reasons of Outstanding Accounts
Lin Deying, guan-wen Chen 5,000,000.00 Snow deiss hotel buy the balance payment
Hainan pearl river industrial
engineering construction 3,572,235.33 Each other dept.
supervision company
Mudanjiang Long Yang boiler
1,425,651.00 Money is tight
installation co., LTD
Total 9,997,886.33
Note 21 Accounts Received in Advance
1) Information of accounts received in advance
Item Closing Balance Opening Balance
Lease of Garage 26,697,103.84 13,271,791.17
Tourist Team 2,611,333.20
Heating 1,673,048.13 1,615,580.49
Cooperative Operation 2,487,649.01 3,151,256.99
Pre-deposit for Consumption 1,317,010.23 223,528.25
Property Management 16,857,732.88 9,972,544.08
Supporting of Heating Facilities 174,789.00 3,154,530.45
Houses in Pre-sell 316,499,198.66 393,459,984.00
Other 40,336.41 594,121.56
Total 365,746,868.16 428,054,670.19
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
The taxi such 12,486,966.00 be transferred in （ Hubei PEARL RIVER
received the rent in advance）
Total 12,486,966.00
Note 22 Remunerations payable for employees
1) List of remunerations payable for employees
Current Other
Item Opening Balance Current Decrease Closing Balance
Increase reductions
Short-term Wage 13,280,321.02 195,225,468.42 194,937,800.51 1,330,208.51 12,237,780.42
Post-employment Benefit -
Defined Contribution 68,947.64 14,216,939.72 14,285,887.36
Plans Payable
Dismiss Welfare 4,000.00 1,029,858.56 878,822.69 155,035.87
Total 13,353,268.66 210,472,266.70 210,102,510.56 1,330,208.51 12,392,816.29
2) List of Short-term Wage
Opening Current Current Other Closing
Item
Balance Increase Decrease reductions Balance
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
Opening Current Current Other Closing
Item
Balance Increase Decrease reductions Balance
Salary, Reward, Allowance 2,624,422.78
4,398,887.58 175,811,055.07 176,555,488.38 1,030,031.49
and Subsidy
Employee Services and
6,922,348.91 6,922,348.91
Benefits
Social Insurance Charges 31,211.98 7,097,945.77 7,129,157.75
Including ： Basic Medical
26,420.72 6,231,478.75 6,257,899.47
Insurance
Employment Injury
3,131.84 388,872.61 392,004.45
Insurance
Maternity Insurance 1,659.42 465,571.41 467,230.83
Other 12,023.00 12,023.00
Housing Fund 92,438.40 1,984,810.36 2,050,948.36 26,300.40
Union Funds and Staff 9,587,057.24
8,757,783.06 3,378,307.41 2,248,856.21 300,177.02
Training Expense
Short-term Absence from
Duty Paid
Other Short-term Wage 31,000.90 31,000.90
Total 13,280,321.02 195,225,468.42 194,937,800.51 1,330,208.51 12,237,780.42
3) List of Defined Contribution Plans
Item Opening Balance Current Increase Current Decrease Closing Balance
Basic Endowment Insurance 65,696.80 13,559,453.06 13,625,149.86
Unemployment Insurance 3,250.84 657,486.66 660,737.50
Total 68,947.64 14,216,939.72 14,285,887.36
Note 23 Taxes Payable
Item Closing Balance Opening Balance
VAT 601,975.02
Business tax 1,037,501.70 -908,809.20
Urban maintenance and construction tax 222,121.34 -33,603.19
corporate income tax 51,998,909.07 505,401.42
property tax 586,772.39 617,550.29
land holding tax 65,717.04 93,587.79
Land value - added tax 29,383,815.46 -5,878,951.29
Personal Income Tax 380,075.07 260,668.02
Education surcharge 60,702.24 -163,049.32
other 67,300.94 251,541.85
Total 84,404,890.27 -5,255,663.63
Note:The enterprise income tax balance of this year is mainly caused by the calculated and withdrawn enterprise income tax of this
company and the subsidiary Bubei Real Estate; The land VAT balance of this year is mainly caused by the calculated and withdrawn
land VAT due to carry-over pre-sale of the subsidiary Hubei Real Estate Luxurious Green Phase III.
Note 24 Interest Payable
Item Closing Balance Opening Balance
Instalment payments due debt, long-term
59,153,440.18
loan interest
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
Item Closing Balance Opening Balance
Enterprise loan interest 75,668,828.87 104,399,517.62
Entrust loan interest 10,449,888.49 12,437,889.25
Other interest 176,133.00 2,439,133.00
Total 86,294,850.36 178,429,980.05
Note 25 Dividends Payable
Reasons why not to be paid over
Item Closing Balance Opening Balance
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
Note 26 Other Payables
1) Other payables presented as per the nature of accounts
Nature of Account Closing Balance Opening Balance
Borrowing 353,508,342.24 420,603,739.10
Payment for land transfer 43,000,000.00 43,000,000.00
Collection for property management 46,986,947.42 53,147,608.29
Money owned by the suppliers 47,024,723.13 1,854,276.29
Accrued Expenses 7,394,338.41 5,568,338.41
Deposit for Quality of Decoration 7,773,945.21 8,415,340.21
Maintenance Fund 9,566,749.16 2,956,074.81
Funds Raised for Houses 150,000.00 2,770,000.00
Risk Funds of Employees 1,057,677.88 1,136,920.09
Working Fund of Water and Electricity 6,781,072.84 4,514,698.79
Deferred compensation 1,140,466.00
Others 17,439,544.01 17,311,963.69
Total 541,823,806.30 561,278,959.68
2) Significant other payables with aging of more than one year
Name Closing Balance Reasons of Outstanding Accounts
Wuhan Zhong Senhua Century Real Estate Advance payment of land, in January
43,000,000.00
Development Co., Ltd 2017 have been paid
Heilongjiang Province is a security
29,038,439.07 Financial tension
company
Letter and (Zhengzhou) Real Estate Co.,
18,740,795.93 Electricity and collection
Ltd.
Shanghai frost Xiong Investment
16,680,400.00 Loan is not due
Management Center (limited partnership)
Beijing Xinxing Real Estate Development
16,565,541.25 Loan is not due
Corporation
Sanya Wanjia Hotel Management Co., Ltd 8,453,551.99 Unsettlement
Total 132,478,728.24
Note 27 Non-current liabilities matured within one year
Item Closing Balance Opening Balance
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
Item Closing Balance Opening Balance
Long-term Borrowing Matured Within
78,710,181.59 353,287,364.69
One Year
Including：Pledged Loan 76,051,656.00
Mortgage Loan 15,000,000.00 229,805,306.92
Guaranteed Loan 63,710,181.59 47,430,401.77
Total 78,710,181.59 353,287,364.69
Note 28 Long-term Borrowing
1) Classification of long-term borrowing
Category Closing Balance Opening Balance
Pledged Loan 5,000,000.00 76,051,656.00
Mortgage Loan 24,000,000.00 523,805,306.92
Guaranteed Loan 123,376,848.25 143,763,735.11
Sub-total 152,376,848.25 743,620,698.03
Less ： Long-term Borrowing Matured
78,710,181.59 353,287,364.69
Within One Year
Total 73,666,666.66 390,333,333.34
2) Long-term borrowings with large amount
Starting Ending
Currenc Closing
Lender Date of Date of Interest Rate Opening Balance
y Balance
Borrowing Borrowing
Chongqing International
2012-9-27 2016-4-28 RMB 21.42% 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.
Harbin Branch of China The benchmark interest
2014-10-30 2019-3-30 RMB 24,000,000.00 24,000,000.00
CITIC Bank rate has a float by 10%
Mudanjian Taiping Road
The benchmark interest
Branch of Industrial & 2014-3-28 2020-3-20 RMB 81,456,595.19 81,763,735.11
rate has a float by 10%
Commercial Bank of China
Mudanjiang Branch of China The benchmark interest
2012-1-12 2019-1-11 RMB 41,920,253.06 62,000,000.00
Construction Bank rate has a float by 10%
Haikou Yeshumen Branch of The benchmark interest
2009-8-2 2019-8-2 RMB 53,000,000.00
Bank of China rate has a float by 10%
Wuhan Branch of Shanghai The benchmark interest
2015-1-20 2018-1-19 RMB 150,000,000.00
Pudong Development Bank rate has a float by 20%
Wuhan Branch of Shanghai The benchmark interest
2015-6-24 2018-6-23 RMB 5,000,000.00 100,000,000.00
Pudong Development Bank rate has a float by 20%
Total 152,376,848.25 743,620,698.03
3) Pledged Loan：
Lender Balance of Loan Pledge
Shanghai Pudong Development Bank Co., Ltd. The 5 million deposit are subsidiary of Hubei Pearl River
5,000,000.00
Wuhan Branch Real Estate Development Co., Ltd
Total 5,000,000.00
Note:Because the subsidiary Hubei Real Estate sells the house property of Luxurious Green Phase III, Shanghai Pudong
Development Bank Co., Ltd. Wuhan Branch needs to remove the limitation of collateral of original mortgage, then signs the pledge
agreement with the Hubei Real Estate Company, the collateral is cash deposit of RMB 5 million of the Hubei Real Estate Company.
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
4) Mortgage Loan：
Loan unit Borrowing Balance Collateral
Subsidiary of mudanjiang group owns ten home stay facility
Citic bank Harbin branch 24,000,000.00
property in snow and snow impression of the hotel property
Total 24,000,000.00 —
5) Guaranteed loan
Loan unit Loan balance Guarantor
China construction bank co., LTD. Mudanjiang Heilongjiang province xin investment guarantee group co.,
41,920,253.06
branch LTD
The industrial and commercial bank of China co., The company and to the international energy development co.,
81,456,595.19
LTD. Mudanjiang taiping road sub-branch LTD
Total 123,376,848.25
6) Other descriptions on long-term borrowing
The interest rate of long-term borrowings is 5.22% to 21.42%. As of the date of the audit report, Chongqing International Trust Co.,
Ltd., Guotai Yuanxin Asset Management Co., Ltd. and Bank of China Haikou City, palm branch of the loan has been paid off,
Shanghai Pudong Development Bank Co., Ltd. Wuhan Branch has also borrowed 245 million yuan.
Note 29 Capital stock
Current Increase（+）or Decrease（－）
Opening Issuance of Bonus Capitalization of Closing
Item
Balance Public Reserve Other Sub-total Balance
New Shares Shares
Fund
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
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
Current Increase（+）or Decrease（－）
Opening Issuance of Bonus Capitalization of Closing
Item
Balance Public Reserve Other Sub-total Balance
New Shares Shares
Fund
(4) Others
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 30 Capital reserve
Item Opening Balance Current Increase Current Decrease Closing Balance
Capital premium 225,390,819.63 225,390,819.63
The original system of capital
109,300,017.82 109,300,017.82
reserves transferred
Others capital reserve 208,924,601.49 208,924,601.49
Total 334,690,837.45 208,924,601.49 543,615,438.94
Note: the current capital reserves increase is due to the disposal of Wan Jia hotel management co., LTD, a subsidiary of sanya
disposal price higher than the evaluation value.
Note 31 Surplus Reserve
Item Opening Balance Current Increase Current Decrease Closing Balance
Statutory surplus reserve 71,852,236.46 71,852,236.46
General surplus reserve 37,634,827.93 37,634,827.93
Total 109,487,064.39 109,487,064.39
Note 32 Undistributed profits
Ratio of Withdrawal or Undistributed
Item Amount
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
73,300,570.54 —
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 -1,014,759,604.45
Note 33 Operating income and operating cost
1) Operating income and operating cost
Item Current Amount Previous Amount
Income Cost Income Cost
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
Item Current Amount Previous Amount
Income Cost Income Cost
Main Business 955,696,948.32 701,125,474.51 250,119,981.56 205,045,049.88
Other Business 13,443,967.00 4,718,666.87 16,948,769.32 3,430,189.68
Total 969,140,915.32 705,844,141.38 267,068,750.88 208,475,239.56
2) Main Business（Accounted as per Industries）
Current Amount Previous Amount
Industry
Operating Income Operating Cost Operating Income Operating Cost
Real Estate Development 659,767,503.67 433,257,352.54 1,040,000.00 430,948.32
Property Management 263,353,192.81 248,497,588.85 202,558,443.43 180,721,057.60
Tourist Hotel 32,576,251.84 19,370,533.12 46,521,538.13 23,893,043.96
Total 955,696,948.32 701,125,474.51 250,119,981.56 205,045,049.88
3) Main Business（Accounted as per Regions）
Current Amount Previous Amount
Region
Operating Income Operating Cost Operating Income Operating Cost
Hainan 280,402,443.94 259,667,173.63 226,446,070.03 193,847,256.65
Heilongjiang 11,225,267.37 5,489,423.90 19,150,974.10 8,495,354.49
Hubei 660,419,643.88 433,942,801.66 1,646,950.00 1,187,524.63
Shanghai 3,649,593.13 2,026,075.32 2,875,987.43 1,514,914.11
Total 955,696,948.32 701,125,474.51 250,119,981.56 205,045,049.88
Note 34 Business tax and surcharges
Item Current Amount Previous Amount
Business Tax 33,049,375.45 13,500,000.98
Urban Maintenance & Construction Tax 3,245,817.15 872,189.34
Education Surcharges 2,327,993.20 659,133.48
Increment Tax on Land Value 45,045,123.53 159,410.87
Other Taxes 3,379,326.55 134,144.92
Total 87,047,635.88 15,324,879.59
In accordance with CK (2016) No. 22 Document published by the Ministry of Finance in Dec. 2016, the \"Business Taxes and
Surcharges\" item name is adjusted as \"Taxes and Surcharges\" item after fully trying out the change from business tax to value-added
tax, the item accountings the relevant taxes and fees of enterprise activities, such as consumption tax, urban maintenance and
construction tax, resource tax, extra charges of education funds and property tax, land use tax, vehicle and vessel tax, stamp tax, in
accordance with Article 12 of ASBE, it conducts the adjustment on relevant items of 2016 annual income statement according to new
requirements specified. This company's other taxes and fees mainly include stamp tax, property tax, land use tax and vehicle and
vessel tax, etc.
Note 35 Selling expenses
Item Current Amount Previous Amount
Employees’ Wages 1,078,219.37 1,010,655.98
Advertisement 1,825,544.95 2,468,062.48
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
Item Current Amount Previous Amount
Repair 1,818,105.00 343,437.70
Selling Service 16,690,000.00 8,300,000.00
Others 491,225.22 1,027,869.32
Total 21,903,094.54 13,150,025.48
Note 36 Administrative expenses
Item Current Amount Previous Amount
Employees’ Wages 30,393,027.21 29,933,763.34
Depreciation 27,783,336.49 30,879,887.41
Business Entertainment 4,562,181.34 5,442,356.09
Business Travel
3,009,801.24 3,483,705.62
Tax 3,733,781.48
Amortization of Intangible Assets 1,091,846.77 1,158,408.83
Repair 1,764,671.50 2,114,758.02
Insurance 1,159,846.66 484,506.98
Employment of Intermediary Organ 20,814,129.05 2,149,359.87
Amortization of Expenses for Depreciation 1,388,414.00 2,104,853.97
Traffic 1,097,603.13 273,326.11
Office 1,619,870.11 917,685.22
Lease 1,050,842.66 2,017,718.00
Service 1,148,985.16 530,580.00
Lawsuit 1,339,645.14 48,794.00
Meeting 1,565,331.40 216,059.67
Information disclosure fee 687,547.17
Other 2,460,911.76 9,229,302.85
Total 102,937,990.79 94,718,847.46
Note 37 Financial expenses
Category Current Amount Previous Amount
Interest Expense 73,702,928.83 102,893,101.33
Less: Interest Income 3,785,586.00 7,189,912.27
Financial Consultant 7,907,727.19 12,246,707.53
Financing Expenses 246,394.04 13,739,137.15
Others 670,913.43 823,193.00
Total 78,742,377.49 122,512,226.74
Note 38 Loss on assets impairment
Item Current Amount Previous Amount
Loss on Bad Debts 61,181,294.17 33,071,995.16
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
Item Current Amount Previous Amount
Loss on Fall in Price of Inventories 17,439,325.19
Loss of Impairment of Construction in Progress 1,360,000.00 1,000,000.00
Loss on available - for - sale financial assets -5,413,685.00
Total 57,127,609.17 51,511,320.35
Note 39 Investment income
1) Details of investment income
Item Current Amount Previous Amount
Long - term equity investment income from equity
-1,418,116.66 -676,992.99
method
Disposal of long-term equity investment generated
212,241,418.08
investment income
Disposal of available-for-sale financial assets 126,642,755.05
other 104,787.15 129,347.48
Total 210,928,088.57 126,095,109.54
Note 40 Non-operating income
Amount Recorded in Current
Item Current Amount Previous Amount
Extraordinary Gain and Loss
Total Gain on the Disposal of
23,054,861.71 2,823,852.83 23,054,861.71
Non-current Assets
Including: Gain on the Disposal of
22,961,474.39 2,823,852.83 22,961,474.39
Fixed Assets
Gain on the Disposal of Intangible
93,387.32 93,387.32
Assets
Gain on Inventory Profit 3,749.60 3,749.60
Income from Compensation for
24,200.00 24,200.00
Breach of Contract
Others 720,613.19 678,029.53 720,613.19
Total 23,803,424.50 3,501,882.36 23,803,424.50
Note 41 Non-operating cost
Amount Recorded in Current
Item Current Amount Previous Amount
Extraordinary Gain and Loss
Loss on disposal of non - current
2,658,077.72 163,533.87 2,658,077.72
assets
Among them: loss of fixed assets
2,651,674.30 163,533.87 2,651,674.30
disposal
Disposal of intangible assets 6,403.42 6,403.42
Donations 11,000.00 100.00 11,000.00
Asset scrapped, loss of damage 344.00 344.00
Compensation, liquidated damages 12,718,930.47 12,718,930.47
othes 228,191.60 1,226,714.91 228,191.60
Total 15,616,543.79 1,390,348.78 15,616,543.79
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
Note 42 Income tax expenses
1) List of income tax expenses
Item Current Amount Previous Amount
Current Income Tax Expenses 62,190,127.99 1,539,640.77
Deferred Income Tax Expenses -5,016,817.36 15,164,596.46
Total 57,173,310.63 16,704,237.23
2) Accounting profits and adjustment process of the income tax expenses
Item Current Amount
Total Profits 134,653,035.35
Income Tax Expenses Calculated at the Statutory/Applicable Tax Rate 33,663,258.83
Influence of Different Tax Rate Adopted by the Subsidiaries -20,642.06
Influence of Adjustment of Previous Income Tax 209,259.02
Influence of the Other Non-taxable Income 354,529.17
Influence of the Non-deducible Cost, Expense and Loss 64,839,959.83
Influence of the Deducible Loss of the Previous Deferred Income Tax Assets Not
Recognized
Current Influence of the Deducible Temporary Difference or the Deducible Loss of the
-37,482,862.07
Current Deferred Income Tax Assets Not Recognized
Recognition of Deferred Tax Assets of Previous Deducible Loss -4,358,861.23
Other -31,330.86
Income Tax Expenses 57,173,310.63
Note 43 Notes to cash flow statement
1) Other cash received relating to operating activities
Item Current Amount Previous Amount
Received the Beijing round of the Asset Management
17,600,000.00 3,700,000.00
Limited
Other transactions 31,703,007.64 33,925,437.23
Non-operating income 175,318.88 128,591.56
Interest income 689,801.35 1,698,855.55
Received from Shanghai seeking Shu Investment
10,000,000.00 13,861,000.00
Management Center (limited partnership) transactions
Received from the town of Hailin Chang Tingzhen Yaxue
1,274,955.89 2,610,000.00
Station Scenic Area
Received from Harbin Jiangshan International Travel
1,150,000.00
Service
To recover the time deposit for pledge 20,000,000.00
Guangzhou Nanyi Cereals and Oils Co., Ltd 13,890,000.00
Li Peng 10,500,000.00
Zhangjiagang Free Trade Zone Taiwan to win Trade Co.,
3,500,000.00
Ltd.
Beijing science and technology development co., LTD 3,000,000.00
Shandong HuiYu modern agriculture co., LTD 3,000,000.00
Beijing Le ge yi science and technology co., LTD
1,580,000.00
Intercourse funds
Shanghai row boat investment management center 1,000,000.00
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
Item Current Amount Previous Amount
Other 6,926,239.88 3,818,323.85
Total 104,839,323.64 80,892,208.19
2) Other cash paid relating to operating activities
Item Current Amount Previous Amount
To pay the Beijing round of the Asset Management
7,448,840.00 1,100,000.00
Limited Intercourse funds
Pay the new network of Beijing Communication
1,120,000.00
Technology Co., Ltd Intercourse funds
Beijing Runshun Technology Development Co., Ltd 115,210,000.00
Enlightenment (hainan) investment management co.,
10,000,000.00
LTD
Jinan shock your trade co., LTD 8,000,000.00
WuHan hua real estate brokerage co., LTD 5,000,000.00
Shandong HuiYu modern agriculture co., LTD 3,000,000.00
JunCheng wood co., LTD 2,200,000.00
Other transactions 27,890,247.69 15,043,646.88
Management expenses 33,702,236.85 26,908,152.43
Operating expenses 3,912,079.43 4,657,357.71
Operating expenses 8,949,492.41 188,605.06
Payment of spare money 1,324,723.06 603,737.66
Bank fees 593,330.86 559,680.75
other 5,563,319.58 3,442,664.87
Total 232,794,269.88 53,623,845.36
3) Other cash received relating to investment activities
Item Current Amount Previous Amount
Payment of financing services 4,713,864.64 29,288,317.15
Pledge of margin 5,000,000.00
Total 9,713,864.64 29,288,317.15
Note 44 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 77,479,724.72 -127,121,382.41
Plus: Provision for Asset Impairment 57,127,609.17 51,511,320.35
Depreciation of Fixed Assets, Consumption of Oil and Gas
29,877,932.92 33,139,913.17
Assets and Depreciation of Productive Biological Assets
Amortization of Intangible Assets 1,108,814.35 1,184,246.93
Amortization of Long-term Deferred Expenses 2,852,954.18 4,891,312.78
Loss on the Disposal of Fixed Assets, Intangible Assets
-21,159,699.81 -2,866,142.74
and Other Long-term Assets (Income is Marked as “-”)
Loss on the Discarding of Fixed Assets (Income is 344.00
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
Item Current Amount Previous Amount
Marked as “-”)
Loss on the Variation of Fair Value (Income is Marked as
“-”)
Financial Expenses (Income is Marked as “-”) 70,520,993.46 102,893,101.33
Investment Loss (Income is Marked as “-”) -210,928,088.57 -126,095,109.54
Decrease in Deferred Income Tax Assets (Increase is
-4,985,486.50 15,210,270.77
Marked as “-”)
Increase in Deferred Income Tax Liabilities (Decrease is
-31,330.86 -45,674.31
Marked as “-”)
Decrease in Inventory (Increase is Marked as “-”) 241,847,929.43 -140,569,459.31
Decrease in Operating Items Receivable (Increase is
-430,591,125.86 -248,976,725.86
Marked as “-”)
Increase in Operating Items Payable (Decrease is Marked
444,794,243.99 696,443,954.22
as “-”)
Other
Net Cash Flow from Operating Activities 257,914,814.62 259,599,625.38
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 241,504,351.39 205,762,131.54
Less: Opening Balance of the Cash 205,762,131.54 77,404,192.62
Plus: Closing Balance of the Cash Equivalent
Less: Opening Balance of the Cash Equivalent
Net Increase of Cash and Cash Equivalent 35,742,219.85 128,357,938.92
2) Composition of cash and cash equivalent
Item Closing Balance Opening Balance
1. Cash 241,504,351.39 205,762,131.54
1.1 Cash in Stock 1,305,777.52 620,470.49
Bank Deposit Available for Immediate Payment 240,190,186.44 205,111,692.83
Other Currency Available for Immediate Payment 8,387.43 29,968.22
2. Cash Equivalent
Including: Bond Investment Maturing Within Three
Months
3. Balance of Closing Cash and Cash Equivalent 241,504,351.39 205,762,131.54
Including: Restricted Cash and Cash Equivalent Used by
the Subsidiaries of the Parent Company or the Group
Note 45 Assets with restriction on ownership or use right
Item Balance Reason of Restriction
Inventories 29,805,826.29 Borrowing on Mortgage
Investment-based Real Estate 15,319,431.78 Borrowing on Mortgage
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
Item Balance Reason of Restriction
Fixed Assets 105,179,978.79 Borrowing on Mortgage
Intangible Assets 1,682,989.91 Borrowing on Mortgage
Currency Funds 5,000,000.00 Borrowing on Pledge
Total 156,988,226.77
VII. Merge scope change
1) The disposal of subsidiary
The difference between the
Equity disposal price and the
The time
Subsidiary Equity disposal Equity The basis for determining disposal of the consolidated
of loss of
name disposal price ratio disposal the time of loss of control financial statements at the
control
(%) level of the net assets of the
subsidiary
Heilongjiang
Equity Transfer Agreement;
Long as the
Articles of Association;
Pearl River Agreemen
20,000,000.00 70% 2016.5.16 Resolutions of Shareholders' 38,155,550.74
Culture t transfer
Meeting; Resolutions of the
Communicati
Board of Directors
on Co., Ltd
Property rights trading contract;
Sanya Wanjia property delisting information;
Hotel Listed state-owned assets assessment
277,332,301.49 100% 2016.12.15 383,010,468.83
Management transfer project filing; SASAC approved
Co., Ltd approval; shareholders meeting
resolution; board resolution
Note: As of the date of reporting, the 70% equity of Heilongjiang Longshizhujiang Culture Spreading Co., Ltd. and
DaysHotelSuitesSanya Hotel Management Co., Ltd. 100% equity of held by this company have been fully transferred.
2) Changes of merger scope for other reasons
The project of this company's Level-III subsidiary Hainan Pearl River Real Estate Marketing and Planning Co., Ltd. was stopped due
to bad management, the resolution of Shareholders' Meeting on Feb. 22, 2016 agreed to clearing and cancel the subsidiary, and the
certificate of industrial and commercial cancellation was obtained on Mar. 9, 2016.
VIII. Equities in other entities
1) Equities in the subsidiary
(1) Composition of the Company
Equity interest held
Place of Place of Nature of (%) Accounting
Company name
operation registration business method
Direct Indirect
Hainan Pearl River
Hainan, Property set-up
Property Hotel Hainan Haikou 98.00
Zhengzhou management
Management Co., Ltd
Hainan Pearl River
Property set-up
Greening Engineering Hainan Haikou Hainan Haikou 100.00
management
Co., Ltd
Hainan Pearl River
Property set-up
Property Cleaning Co., Hainan Haikou Hainan Haikou 100.00
management
Ltd
Hainan Pearl River
Property Electrical and Property set-up
Hainan Haikou Hainan Haikou 100.00
Mechanical Engineering management
Company
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
Equity interest held
Place of Place of Nature of (%) Accounting
Company name
operation registration business method
Direct Indirect
Hubei Pearl River Real
Estate Development Co., Wuhan, Hubei Wuhan, Hubei estate 89.20 set-up
Ltd
Wuhan Zhujiang Meilin
Hotel Management Co., Wuhan, Hubei Wuhan, Hubei Hotel 100.00 set-up
Ltd
Hainan Pearl River
Industrial Co., Ltd. set-up
Shanghai Shanghai estate 100.00
Shanghai real estate
company
Beijing Jiubo Culture
Beijing Beijing culture 100.00 set-up
Development Co., Ltd
Mudanjiang City
Zhujiang Wanjia Tourism
Mudanjiang Mudanjiang Hotel, travel 100.00 set-up
Investment Development
Group Co., Ltd
Hailin Wanjia Xuexiang
Mudanjiang Mudanjiang Hotel 100.00 set-up
Resort Hotel
Mudanjiang Jingpo Lake
Zhujiang Wanjia Hotel Mudanjiang Mudanjiang Hotel 100.00 set-up
Co., Ltd
Business
combinations
Mudanjiang Wanjia Star involving
Mudanjiang Mudanjiang Hotel 100.00
Hotel Co., Ltd enterprises not
under common
control
Harbin Wanjia Travel
Harbin Harbin tourism 100.00 set-up
Service Co., Ltd
Hebei Zhengshi Qinghui
Real Estate Development Shijiazhuang Shijiazhuang estate 51.00 set-up
Co., Ltd
Shanghai Pearl Property Property
Shanghai Shanghai 50.00 set-up
Management Co., Ltd management
(2)ant non-wholly-owned subsidiaries
Current
Closing balance
Proportion of Current P/L attributable dividend
Company name of minority Note
minority(%) to minority shareholders payements to
interest
minority
Hainan Pearl River Properties and
2.00 -52,896.94 148,719.65
Hotels Management Co., Ltd.
Hubei Pearl River Real Estate
10.80 9,571,854.82 19,055,471.90
Development Co., Ltd.
Hebei Zhengshi Qinghui Real
49.00 -3,981,949.08 -23,618,415.59
Estate Development Co., Ltd.
Shanghai Sea Pearl Property
50.00 2,634.84 317,271.28
Management Co., Ltd.
Total ----- 5,539,643.64 -4,096,952.76
(3)Main Financial Information of the Significant Non-wholly-owned Subsidiaries
Closing balance
Company
name Non-current Non-current
Current assets Total assets Current liabilities Total liabilities
assets liabilities
Hainan Pearl
River Properties
103,809,739.5
and Hotels 100,602,853.49 3,206,886.08 96,373,756.84 96,373,756.84
Management
Co., Ltd.
Hubei Pearl 936,796,523.40 15,943,287.84 952,739,811.2 771,305,685.50 5,000,000.00 776,305,685.50
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
Closing balance
Company
name Non-current Non-current
Current assets Total assets Current liabilities Total liabilities
assets liabilities
River Real
Estate
Development
Co., Ltd.
Hebei Zhengshi
Qinghui Real
Estate 5,439.60 107,189.63 112,629.23 48,313,477.37 48,313,477.37
Development
Co., Ltd.
Shanghai Sea
Pearl Property
2,956,358.12 13,012.80 2,969,370.92 2,334,828.37 2,334,828.37
Management
Co., Ltd.
Continued：
Opening balance
Company name Non-current Current Non-current
Current assets Total assets Total liabilities
assets liabilities liabilities
Hainan Pearl
River
Properties and
102,021,965.09 3,497,651.59 105,519,616.68 95,438,786.84 95,438,786.84
Hotels
Management
Co., Ltd.
Hubei Pearl
River Real
Estate 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
Development
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
2,602,195.07 10,688.30 2,612,883.37 1,983,610.50 1,983,610.50
Management
Co., Ltd.
Continued：
Company name Total comprehensive Net cash flows from investing
Operating income Net profit
income activities
Hainan Pearl River Properties and
Hotels 260,442,083.97 -2,644,847.11 -2,644,847.11 -4,389,570.73
Management Co., Ltd.
Hubei Pearl River Real Estate
661,692,167.46 88,625,558.36 88,625,558.36 270,378,933.94
Development Co., Ltd.
Hebei Zhengshi Qinghui Real Estate
-8,126,426.69 -8,126,426.69 -77,650.49
Development Co., Ltd.
Shanghai Sea Pearl Property
3,649,593.13 5,269.68 5,269.68 365,479.52
Management Co., Ltd.
Continued：
Company name Operating Total comprehensive Net cash flows from
Net profit
income income investing activities
Hainan Pearl River Properties and
199,669,731.00 -35,339.38 -35,339.38 13,824,129.54
Hotels
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
Company name Operating Total comprehensive Net cash flows from
Net profit
income income investing activities
Management Co., Ltd.
Hubei Pearl River Real Estate
2,584,929.33 -17,912,148.50 -17,912,148.50 -6,644,521.74
Development Co., Ltd.
Hebei Zhengshi Qinghui Real Estate
-30,242,512.42 -30,242,512.42 -331,216.15
Development Co., Ltd.
Shanghai Sea Pearl Property
2,875,987.43 295,906.13 295,906.13 760,230.32
Management Co., Ltd.
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
Place of Equity interest held (%)
Place of Nature of Accounting
Name
operation registration business method
Direct Direct
Sanya Wanjia Industrial Real estate
Sanya Sanya 40 equity method
Co. Ltd development
(2) Main financial information of significant cooperative enterprises
Closing balance Opening balance
Item
Sanya Wanjia Industrial Co. Ltd Sanya Wanjia Industrial Co. Ltd
Current asset 4,215,581.28 4,596,024.44
Non-current asset 78,410,198.72 81,225,513.00
Total asset 82,625,780.00 85,821,537.44
Current liability 1,641,278.62 1,292,130.39
Non-current liability
Total liability 1,641,278.62 1,292,130.39
Minority interests
Equity attributable to parent company 80,984,501.38 84,529,407.05
Net assets share calculated according to proportion of
32,393,800.55 33,811,762.82
shareholding
Net book value of the equity investment in associates 32,393,800.55 33,811,762.82
Continued：
Item Year 2016 Year 2015
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
Sanya Wanjia Industrial Co. Ltd Sanya Wanjia Industrial Co. Ltd
Operating income 37,562.79 35,533.33
Net profit -3,544,905.67 -1,632,856.99
Other comprehensive income
Total comprehensive income -3,544,905.67 -1,632,856.99
(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 in
1,472,844.43 1,472,998.82
associates
calculated according to proportion of shareholding: —
Net profit -154.39 -48,673.85
Other comprehensive income
Total comprehensive income -154.39 -48,673.85
(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.
IX. 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 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.
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
As at 31 December 2016, the financial assets and liabilities of the Company are analyzed by their maturity date below at their
undiscounted contractual cash flows :
31 December 2016
Item Net book Carrying
Within 1year 1 to 2 years 2 to 5 years Over 5years
value amount
Currency Funds 246,504,351.39 246,504,351.39 246,504,351.39
Accounts receivable 16,084,139.32 28,360,112.29 28,360,112.29
Other receivables 350,870,047.05 505,835,674.29 505,835,674.29
Available-for-sale
30,824,994.90 49,263,555.29 49,263,555.29
financial assets
Subtotal 644,283,532.66 829,963,693.26 829,963,693.26
Accounts payable 77,627,005.61 77,627,005.61 77,627,005.61
Other payables 541,823,806.30 541,823,806.30 541,823,806.30
Long-term
152,376,848.25 152,376,848.25 78,710,181.59 37,666,666.64 36,000,000.02
borrowings
Subtotal 771,827,660.16 771,827,660.16 698,160,993.50 37,666,666.64 36,000,000.02
Continued：
31 December 2015
Item
Carrying Over 5
Net book value Within 1year 1 to 2 years 2 to 5 years
amount 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
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 31 December 2016, the amount of interest rates contract on the floating rate for long-term
borrowings amounted to RMB152,376,848.25, the amount of interest rates contract on the fixed rate for long-term
borrowings amounted to RMB321,318,142.37.
X. Fair Value
1) Financial instruments measured at fair value
There is no financial instrument measured at fair value in the Company
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
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.
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.
XI. Related party relationship and transactions
1) Information of parent company of the Company
Registered Real estate development Registered Holding Voting rights
Name
address and operation capital proportion proportion
Investment
Beijing Grain Group Co., Ltd Beijing 90,000.00 28.95 28.95
management
The company's ultimate control is Beijing grain group co., LTD.
2) The information of the Company’s subsidiaries is set forth in Note 8-1 “Equities in the Subsidiaries”.
3) The information of the Company’s cooperative enterprises and associated enterprises is set forth in Note 8-3 “Equities in
the cooperative enterprises and associated enterprises”
4) Information of Other Related Parties
Name of Other Related Party Relationship between other related party and the Company
Beijing Zhongjia Yangguang energy technology (Company) Co., Ltd. With same controller
Beijing Xinxing Real Estate Development Corporation The parent company of the original controlling shareholder
Beijing Wanfa Real Estate Development Co., Ltd The original controlling shareholder
Mudanjiang City Development and Construction Co., Ltd With same controller
Sanya Wanjia Industrial Co., Ltd Associates
Sanya Wanjia Hotel Management Co., Ltd With same controller
Heilongjiang Long as Culture Communication Co., Ltd With same controller
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 2016 Year 2015
transaction
Beijing Zhongjia Sunny Energy
Rent services 240,000.00
Technology (Company) Co., Ltd.
Total 240,000.00
(3) Related party assets transfer, debt restructuring
Nature of related
Related party Year 2016 Year 2015
transaction
Rounds of Beijing real estate
Equity transfer 277,332,301.49
development co., LTD
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
Rounds of Beijing real estate
Fixed assets transfer 35,000,000.00
development co., LTD
Total 312,332,301.49
(4) Information of related guarantee
When the Company is the guarantor:
Beginning date of Maturity date of
Guarantor Amount Guarantee obligation expired
guarantee contract guarantee contract
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
As at 31 December 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 RMB84,778,095.18with interest payable of
RMB38,227,058.49.
As at 31 December 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 0.00 with
interest payable of RMB38,227,058.49.
As at 31 December 2016, the balance of borrowings and principal and interest of the Company to Beijing Grain
Group Co., Ltd. was RMB 150,746,266.66.
(5) Remuneration of key management personnel (10 thousand yuan)
Item Current Amount Previous Amount
Key management personnel salary 149.95 154.90
(6) Accounts payable for related parties
（1）Accounts payable for related parties by the Company
Items Company Name 31 December 2016 31 December 2014
Other Beijing Xinxing Real Estate Development General
84,778,095.18 156,497,912.90
payables company
Other Beijing Wangfa Real Estate Development Holdings Co.,
78,525,000.00
payables Ltd
Other Beijing Zhongjia Yangguang energy technology
3,586,021.00 3,970,021.00
payables (Company) Co., Ltd.
Other Mudanjiang city development and construction co.,
70,000.00
payables LTD
Other Sanya Wan Jia industrial co., LTD
1,133,732.83
payables
Other Sanya Wan Jia hotel management co., LTD
10,187,745.63
payables
Other Beijing grain group co., LTD
150,746,266.66
payables
Other Heilongjiang Long as Culture Communication Co., Ltd
2,225,224.84
payables
Total 252,727,086.14 238,992,933.90
Beijing Wangfa Real Estate Development Holdings Co.,
Other receivables 35,000,000.00
Ltd
Total 35,000,000.00
Beijing Xinxing Real Estate Development General
Interest payable 33,615,676.05 63,512,510.75
company
Beijing Wangfa Real Estate Development Holdings Co.,
Interest payable 38,227,058.49 40,887,006.87
Ltd.
Total 71,842,734.54 104,399,517.62
Interest payable Heilongjiang Long as Culture Communication Co., Ltd 2,710,880.79
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
Items Company Name 31 December 2016 31 December 2014
Total 2,710,880.79
XII. Commitments and Contingency
1) Significant commitments
Not
2) Contingency incurred after the balance sheet
a)On Nov. 3, 2014, Hainan Fangyuan Law Firm submitted a case to the court in terms of ownership dispute of No. 57, 61, 62, 63 and
64 (original No. 101-105) parking lots of this company's underground parking garage in the Pearl River Plaza, and requested to
handle the ownership certificate of parking lots. As of the date of audit report, the case has been tried, but has not been judged.
b)On Apr. 2, 2015, this company borrowed RMB 20,280,000 from the individual Zhanghua through Hainan Zhuye Investment
Management Co., Ltd. and handled the collateral registration formalities. On Apr. 24, 2015, Hainan Zhuye Investment Management
Co., Ltd. transferred the RMB 60,000 of debt in the borrowing of this company and Zhang Hua to Lin Xiaolian through signing
Credit and Debt Transfer Agreement, and Hainan Zhuye Investment Management Co., Ltd. issued Letter of Guarantee at the same
time and agreed to bear the joint and several guarantee responsibility. When the borrowing term has expired, because Hainan Zhuye
Investment Management Co., Ltd. is suspected of being involved in illegally absorbing public deposit an has been registered by the
public security organs for an investigation, then it temporarily fails to continuously perform the repayment obligations. Now Lin
Xiaolianpersonnaly brings a borrowing contract dispute lawsuit to Hualong District People's Court of Longkou, Hainan. As of the
date of audit report, the case's first-instance judgment has been dismissed, and will be tried again after the criminal case of Hainan
Zhuye Investment Management Co., Ltd. is tried.
XIII. Events after the balance sheet
1) Information of profit distribution
According to the eighth board resolution of the 22nd session of the company, there was no profit distribution plan in 2016 because of
the losses.
2)Information of other events after the balance sheet date
Approved by financial report quoted, nothing else to explain events occurring after the date of the balance sheet.
XIV.Other significant events
1）Guaranty events
The subsidiary company – Zhujiang Wanjia Tourism Investment Development Group Co., Ltd. in Mudanjiang City applied to
Mudanjiang Branch of CCB for RMB 110,000,000 loans and entrusted Xinzheng Investment Guarantee Group Co., Ltd. in
Heilongjiang Province to provide guarantee. The company provided the credit counter guarantee for Xinzheng Investment Guarantee
Group Co., Ltd. in Heilongjiang Province, and the counter guarantee amount is RMB 45,000,000. By the end of March, 2017,
Zhujiang Wanjia Tourism Investment Development Group Co., Ltd. in Mudanjiang City had repaid the above full loans, and the
company had relieved the counter guarantee responsibility for Xinzheng Investment Guarantee Group Co., Ltd. in Heilongjiang
Province.
2）Other events
(1)This company is planning a major asset restructuring, the matter had been approved by the State-owned Assets Supervision and
Administration Commission of Peoples Government of Beijing Municipality on Jul. 21, 2016. The restructuring includes three
transactions: Major asset replacement, purchases of assets through issuing shares and supporting financing. The transaction object is
BGG Co., Ltd. and 100% equity of BGG Co., Ltd. held by other relevant parties. As of the date of audit report, Major Asset Replace,
Purchases of Assets through Issuing Shares and Raising Supporting Fund Cum Associated Transaction Plan has been adopted
through the Resolution of this Company's 30th Section of 7th Board Meeting, the Proposal on Meeting the Conditions of Major Asset
Replace, Purchases of Assets through Issuing Shares and Raising Supporting Fund has been adopted by the Resolution of this
Company's 2nd Section of 2016 Extraordinary Shareholders' Meeting.
(2)On Jul. 19, 2016, Beijing Wanfa Real Estate Development Co., Ltd. and BGG Co., Ltd. signed Equity Transfer Agreement, the
Beijing Wanfa Real Estate Development Co., Ltd. will transfer its held 112,479,478 shares of all stocks of this company accounting
for 26.36% of the listed company's total share number to the BGG Co., Ltd. The equity transfer matter has been approved by
State-owned Assets Supervision and Administration Commission of the State Council, the equity transfer formalities had been
completed on Sep. 5, 2016, currently, the actual controller has been changed as BGG Co., Ltd.
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
(3)This company signed trade contracts of purchasing chestnut, corn and soybean meal, etc. And issued commercial acceptance bills
for the development of main agricultural product trade business.In order to resolve horizontal competitions between controlling
shareholders and listed company, maintain the interests of listed company and medium and small shareholders, the company's new
management decided to cancel the above-mentioned grain trade business and will take back all commercial acceptance bills issued.
The above matters have been adopted through the Resolution of this Company's 8th Section of 8th Board Meeting. As of the date of
audit report, the above trade contract has been cancelled, the commercial acceptance bills have been taken back. This company
promised that it will not make any form of endorsement transfer for the commercial acceptance bill not in excess of presentment for
payment term.
(4)This company's subsidiary Hubei Pearl River Real Estate Development Co., Ltd. Signed an agreement with Hubei Supply and
Marketing XudongMinsheng Plaza Real Estate Co., Ltd. on Dec. 4, 2016 to transfer the legally-owned land plot located in No. 20,
Fangji Road, Hongshan District, Wuhan City to Hubei Supply and Marketing XudongMinsheng Plaza Real Estate Co., Ltd., The
transfer area is about 13560m2 with a transfer price of RMB 135,000,000, the payment has been received, the handover formalities
have not been handled.
XV. 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
Categories Book Balance Provision for Bad Account
Book Value
Amounts Ratio(%) Amounts Rate Chargeable（%）
Accounts receivable with
significant single amount
8,856,207.60 74.15 8,856,207.60 100.00
and individual provision for
bad debts
Accounts receivable with
combinational withdrawal
of the bad debt provision 1,187,881.81 9.95 155,795.98 13.12 1,032,085.83
by credit risks
characteristics
Accounts receivable with
non-significant single
1,898,690.60 15.90 1,898,690.60 100.00
amount and individual
provision for bad debts
Total 11,942,780.01 100.00 10,910,694.18 — 1,032,085.83
Continued：
Opening Balance
Categories Book Balance Provision for Bad Account
Book Value
Amounts Ratio(%) Amounts Rate Chargeable（%）
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
provision for bad debts
Total 11,891,360.01 100.00 10,189,531.55 — 1,701,828.46
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
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 Accounts Provision for Bad Rate
Reasons of Withdrawal
Receivable Account Chargeable（%）
Hainan racing entertainment Estimates cannot be brought back
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 Estimates cannot be brought back
Hainan centaline property Estimates cannot be brought back
2,090,069.77 2,090,069.77 100.00
agency
Singapore China holding co., Estimates cannot be brought back
1,094,500.00 1,094,500.00 100.00
LTD
Hainan dragon film studio 1,046,985.40 1,046,985.40 100.00 Estimates cannot be brought back
Total 8,856,207.60 8,856,207.60 — Estimates cannot be brought back
(2) 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 Chargeable
Reasons of Withdrawal
Receivable Account （%）
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
467,896.10 467,896.10 100.00 Irrecoverable
thousand yuan ( total of 13 )
Total 1,898,690.60 1,898,690.60 —
(3) 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 51,420.00 1,028.40 2.00
1－2 years 918,807.39 45,940.37 5.00
2－3 years 10.00
3－4 years 20.00
4－5 years 30.00
Over 5 years 217,654.42 108,827.21 50.00
Total 1,187,881.81 155,795.98 —
Continued：
Opening Balance
Aging
Accounts Receivable Provision for Bad Account Rate Chargeable（%）
Within 1 year 942,807.39 18,856.14 2.00
1－2 years 96,000.00 4,800.00 5.00
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
Opening Balance
Aging
Accounts Receivable Provision for Bad Account Rate Chargeable（%）
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 RMB721,162.63 .
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 Receivable (%) Withdrawn
Hainan racing entertainment Co.,
2,406,158.00 20.15 2,406,158.00
LTD
Hainan Baoping company 2,218,494.43 18.58 2,218,494.43
Hainan Zhongyuan tenement agency
2,090,069.77 17.50 2,090,069.77
company
Singapore China holding co., LTD 1,094,500.00 9.16 1,094,500.00
Hainan Longzhu Cinema City 1,046,985.40 8.77 1,046,985.40
Total 8,856,207.60 74.16 8,856,207.60
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
Categories Book Balance Provision for Bad Account
Book Value
Amounts Ratio(%) Amounts Rate Chargeable（%）
Other receivables with
significant single amount and
408,838,943.39 49.22 139,476,136.40 34.12 269,362,806.99
individual provision for bad
debts
Other receivables with
combinational withdrawal of
the bad debt provision by
credit risks characteristics
Combination 1 ： Aging
417,682,205.01 95,367,093.30 322,315,111.71
Combination
Combination 2 ：
Receivables in the
107,303.90 107,303.90
inter-companies in range of
consolidation
Totality of Combination 417,789,508.91 50.30 95,367,093.30 22.83 322,422,415.61
Other receivables with
non-significant single amount
3,963,362.46 0.48 3,963,362.46 100.00
and individual provision for
bad debts
Total 830,591,814.76 100.00 238,806,592.16 ----- 591,785,222.60
Continued：
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
Opening Balance
Categories Book Balance Provision for Bad Account
Book Value
Amounts Ratio(%) Amounts Rate Chargeable（%）
Other receivables with
significant single amount and
88,243,380.89 11.43 21,378,380.89 24.23 66,865,000.00
individual provision for bad
debts
Other receivables with
combinational withdrawal of
the bad debt provision by
credit risks characteristics
Combination 1 ： Aging
268,711,768.54 61,917,347.64 206,794,420.90
Combination
Combination 2 ：
Receivables in the
410,950,908.14 410,950,908.14
inter-companies in range of
consolidation
Totality of Combination 679,662,676.68 88.05 61,917,347.64 9.11 617,745,329.04
Other receivables with
non-significant single amount
4,044,702.36 0.52 3,972,014.34 98.20 72,688.02
and individual provision for
bad debts
Total 771,950,759.93 100.00 87,267,742.87 —— 684,683,017.06
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
Other Receivables Provision for Bad Account Rate Chargeable（%） Reasons of Withdrawal
Hainan Yangtze River Irrecoverable
1,000,000.00 1,000,000.00
Travel
Xinhua Liming Irrecoverable
Aviation Decoration 1,208,804.70 1,208,804.70
Company
Dabao Cement Irrecoverable
1,901,383.56 1,901,383.56
Factory
Hainan Shenhai Real Irrecoverable
1,029,850.32 1,029,850.32
Estate Co., Ltd.
Shenzhen Irrecoverable
State-Investment 1,409,934.28 1,409,934.28
Securities Co., Ltd.
Shenzhen Zhuce Real Irrecoverable
1,550,278.23 1,550,278.23
Estate Company
Sanya Land and Irrecoverable
Housing 1,000,000.00 1,000,000.00
Administration
Jinguang Real Estate Irrecoverable
1,752,100.00 1,752,100.00
Company
Dingjia International Irrecoverable
2,725,702.71 2,725,702.71
Co., Ltd.
Hainan Zhongda Real Irrecoverable
2,210,779.10 2,210,779.10
Estate Company
Hainan Enxin Irrecoverable
2,314,592.00 2,314,592.00
Industry Co., Ltd.
Haikou Industrial Irrecoverable
Development Import 1,392,430.00 1,392,430.00
and Export Co., Ltd.
Hainan macun port Irrecoverable
6,000,000.00 6,000,000.00
harbor company
Singapore China Irrecoverable
16,981,016.24 16,981,016.24
holding co., LTD
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
Closing Balance
Name
Other Receivables Provision for Bad Account Rate Chargeable（%） Reasons of Withdrawal
Hainan pearl river According to the
industrial co., LTD., expected amount
68,810,525.99 1,882,525.99 2.74
Shanghai real estate provision shall not
company withdraw
Mudanjiang city pearl According to the
river Wan Jia tourism expected amount
investment 246,195,408.23 70,855,952.42 28.78 provision shall not
development group withdraw
co., LTD
Hebei is the pure real According to the
estate development expected amount
47,726,138.03 22,732,273.67 47.63
co., LTD provision shall not
withdraw
Beijing nine on According to the
culture development expected amount
3,630,000.00 1,528,513.18 42.11
co., LTD provision shall not
withdraw
Total 408,838,943.39 139,476,136.40 —
(2) Other receivables with non-significant single amount and individual provision for bad debts at the end of period
Closing Balance
Name Provision for Bad Reasons of
Other Receivables Rate Chargeable（%）
Account Withdrawal
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
1,339,213.08 1,339,213.08 100.00 Irrecoverable
（23 units）
Total 3,963,362.46 3,963,362.46 —
(3) Other receivables in the combination which adopts aging analysis method to determine provision for bad debt:
Closing Balance
Aging
Other Receivables Provision for Bad Account Rate Chargeable（%）
Within 1 year 166,613,450.01 3,332,269.00
1－2 years 20,000,000.00 1,000,000.00
2－3 years
3－4 years 30,085,000.00 6,017,000.00
4－5 years 77,370,266.00 23,211,079.80
Over 5 years 123,613,489.00 61,806,744.50
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
Closing Balance
Aging
Other Receivables Provision for Bad Account Rate Chargeable（%）
Total 417,682,205.01 95,367,093.30 -----
Continued：
Opening Balance
Aging
Other Receivables Provision for Bad Account Rate Chargeable（%）
Within 1 year 22,414,335.66 448,286.72
1－2 years 1,393,200.00 69,660.00
2－3 years 31,393,200.00 3,139,320.00
3－4 years 78,693,146.00 15,738,629.20
4－5 years 124,437,458.54 37,331,237.56
Over 5 years 10,380,428.34 5,190,214.16
Total 268,711,768.54 61,917,347.64 —
In the company portfolio, except that the subsidiaries, such as Mudanjiang River Group Company, Jiubo Company and
HebeiZhengshiQinghui Company within the scope of company merger conduct calculation and withdrawal of the bad-debt reserves,
the accounts receivable among the companies within other merger scope do not conduct the calculation and withdrawal of bad-debt
reserves.
2) Situation of the current bad debt provision withdrawn, recovered or reversed
The amount of current bad debt provision withdrawn was RMB151,538,849.29.
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 Parties 403,157,641.37 479,698,434.13
Borrowing, Interest 16,981,016.24 16,981,016.24
Other 160,053,157.15 24,871,309.56
Total 830,591,814.76 771,950,759.93
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
Nature of Closing Balance of
Name Closing Balance Aging Amount of Other
Money Bad Debt Provisions
Receivables (%)
Mudanjiang Pearl
River Wanjia Tourism 1-5years 、over 5
Investment
Borrowing 246,195,408.23 29.64 70,855,952.42
years
Development Group
Beijing science and
technology Intercourse
112,720,000.00 Within 1 year 13.57 2,254,400.00
development co., Funds
LTD
Money for
Public Investment 4-5years、over 5
Co., Ltd
Project 100,400,000.00 12.09 42,800,000.00
years
Combination
Beijing Kangtai Money for 100,000,000.00 4-5years、over 5 12.04 42,000,000.00
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
Ratio in Closing
Nature of Closing Balance of
Name Closing Balance Aging Amount of Other
Money Bad Debt Provisions
Receivables (%)
Xingye Investment Cooperation years
Co.,Ltd with Project
Hainan pearl river
industrial co., LTD., Intercourse 1-5 years、over 5
68,810,525.99 8.28 1,882,525.99
Shanghai real estate Funds years
company
Total 628,125,934.22 75.62 159,792,878.41
Note 3 Long-term Equity Investment
Closing Balance Opening Balance
Nature of Money Impairment Impairment
Book Balance Book Value Book Balance Book Value
Provision Provision
Investment in
179,420,000.00 110,100,000.00 69,320,000.00 299,420,000.00 40,000,000.00 259,420,000.00
subsidiaries
Investment in
associated 32,393,800.55 32,393,800.55 33,811,762.82 33,811,762.82
companies
Total 211,813,800.55 110,100,000.00 101,713,800.55 333,231,762.82 40,000,000.00 293,231,762.82
1) Investment in subsidiaries
Current Impairment Closing Balance of
Initial Investment Current Current Closing
Investee Opening Balance Provision Impairment
Cost Increase Decrease Balance
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.
120,000,000.00 120,000,000.00
Management Co.,
Ltd.
Hainan pearl river
industrial co.,
LTD., Shanghai 40,000,000.00 40,000,000.00 40,000,000.00 40,000,000.00
real estate
company
Mudanjiang
PEARL RIVER
Wanjia Tourist
60,000,000.00 60,000,000.00 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 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 5,100,000.00 5,100,000.00
Development Co.,
Ltd.
Total 299,420,000.0 299,420,000.00 120,000,000. 179,420,000.0 70,100,000.00 110,100,000.00
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
Current Impairment Closing Balance of
Initial Investment Current Current Closing
Investee Opening Balance Provision Impairment
Cost Increase Decrease Balance
Withdrawn Provision
00
2) Investment in cooperative enterprises and associated enterprises
Current Increase or Decrease
Investee Opening Balance Investment Results
Additional Contribution Adjustment of Other
Recognized by Equity
Contribution Reduced Comprehensive Income
Method
1. Associated Enterprises
Sanya Wanjia Industry Co.,
33,811,762.82 -1,417,962.27
Ltd.
Total 33,811,762.82 -1,417,962.27
Continued：
Current Increase or Decrease
Closing Balance of
Declared to grant Impairment Closing
Investee Change of Impairment
cash dividends or Provision Other Balance
Other Equities Reserve
profits Withdrawn
1. Associated Enterprises
Sanya Wanjia Industry 32,393,800
Co., Ltd. .55
32,393,800
Total
.55
Note 4 Operating income and operating cost
1) Operating income and operating cost
Current Amount Previous Amount
Item
Income Cost Income Cost
Other Business 1,237,868.46 324,585.35 1,683,542.77 355,593.60
Total 1,237,868.46 324,585.35 1,683,542.77 355,593.60
Note 5 Investment income
Item Current Amount Previous Amount
Investment Income from the Long-term Equity Measured Under
-1,417,962.27 -653,142.80
Equity Method
Disposal of available for sale financial assets investment returns 126,642,755.05
Disposing of a long-term equity investment of investment gains -51,592,300.00
Total -53,010,262.27 125,989,612.25
XVI. Supplementary information
1) Breakdown of non-recurring profit or loss
Items Amount Description
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
Items Amount Description
Profit and loss on disposal of non-current assets 20,396,783.99
Fund occupation fee from non-financial enterprises included in the current
3,181,935.37
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
Others non-operating income and expenses excluded as above -12,209,903.28
Enterprise restructuring charges -17,131,886.78
Other satisfies the definition of non-recurring gains and losses and losses
212,241,418.08
of the project
Income tax influence the forehead 1,257,728.05
Rights and interests of minority shareholders influence the forehead (after
559,066.45
tax)
Total 208,295,141.88
2) Return on equity (ROE) and earnings per share (\"EPS\")
Earnings per share
Weighted average return on
Profit During Report Period
net assets (%)
Basic earnings per share Diluted earnings per share
Net profit attributable to ordinary
0.17 0.17
shareholders of the Company
Net profit after deduction of non-recurring
profits or losses attributable to ordinary -0.32 -0.32
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
This is mainly caused by the carry-over cost of Luxurious Green
prepayments 67,598,789.02 108,236,943.90 -37.55% Phase III engineering cost repaid by the subsidiary Hubei Real
Estate.
This is mainly caused by the increase of intercourse funds
Other receivables 2,710,880.79 100.00% between the company and Beijing Runshun Technology Co.,
Ltd.
This is mainly caused by the carry-over cost after the house
inventory 350,870,047.05 256,036,391.03 37.04% delivery of Luxurious Green Phase III of the subsidiary HuBei
Pearl River.
This is mainly caused by the accepting the relevant taxes of
Other liquid assets 297,867,807.05 531,145,489.05 -43.92%
Hubei property.
Available for sale This is mainly caused by the newly-increased foreign investment
8,714,139.07 100.00%
financial assets of the subsidiary.
Fixed assets 30,824,994.90 11,411,309.90 170.13% This is mainly caused by the subsidiary's asset sale.
This is mainly caused by the merger scope changes caused due
Intangible assets 220,409,931.29 409,326,778.05 -46.15% to the equity disposal of the original subsidiary Sanya Hotel
Company.
This is mainly caused by the merger scope changes caused due
Long-term prepaid
3,692,130.10 29,519,153.74 -87.49% to the equity disposal of the original subsidiary LONGSEE
expenses
MEDIA.
This is mainly caused by the company qingcheng mountain
Deferred tax assets 2,083,962.89 8,029,043.26 -74.04%
period III accepting the income tax property advance of Hubei.
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
Closing Opening Ratio of
Item Reason of Change
Balance Balance Change
This is mainly caused by the increase of the
Accounts payable 4,985,486.50 100.00% provisionally-estimated late engineering cost of the subsidiary
Hubei Pearl Reviver Real Estate.
This is mainly caused by the subsidiary's preparation of
calculating the assets devalue, the enterprise income tax
calculated and withdrawn due to disposal of equity without
Payable taxes 77,627,005.61 24,313,483.40 219.28%
pre-tax deduction, and the land increase tax and enterprise
income tax calculated and withdrawn due to the subsidiary
Hubei Real Estate delivering house to confirm income cost.
This is mainly caused by the merger scope changes caused due
to the subsidiary repaying the financing interest of Chongqing
Interest payable 84,404,890.27 -5,255,663.63 1705.98%
Trust and the equity disposal of the original subsidiary Sanya
Hotel Company.
This is mainly caused by the merger scope changes caused due
Non-current
to the subsidiary repaying the loan overdued within a year and
liabilities due within 86,294,850.36 178,429,980.05 -51.64%
the equity disposal of the original subsidiary Sanya Hotel
one year
Company.
Long-term This is mainly caused by the subsidiary Hubei Real Estate
78,710,181.59 353,287,364.69 -77.72%
borrowing Company to repay bank borrowing.
This is mainly caused by the consideration of the equity disposal
Capital reserves 73,666,666.66 390,333,333.34 -81.13% of the original subsidiary Sanya Hotel Company higher than
appraisal value.
Rights and interests
This is mainly caused by the subsidiary Hubei Real Estate
of minority 543,615,438.94 334,690,837.45 62.42%
Company's profits for the year.
shareholders
(2) Consolidated Profit Statement and Cash Flow Statement
Closing Opening Ratio of
Item Reason of Change
Balance Balance Change
This is mainly caused by the subsidiary Hubei Real Estate
Operating income 969,140,915.32 267,068,750.88 262.88%
delivering Luxurious Green Phase III to confirm income.
This is mainly caused by the subsidiary Hubei Real Estate
Operating cost 705,844,141.38 208,475,239.56 238.57%
delivering Luxurious Green Phase III to carry-over cost.
Taxes and This is mainly caused by the subsidiary Hubei Real Estate
87,047,635.88 15,324,879.59 468.02%
surcharges delivering Luxurious Green Phase III to accrued taxes.
This is mainly caused by the increase of the sales agency fee of the
sales expense 21,903,094.54 13,150,025.48 66.56%
subsidiary Hubei Pearl Reviver.
This is mainly caused by the interest no longer paid due to the
Financial expenses 78,742,377.49 122,512,226.74 -35.73%
company repaying the expired borrowing.
This is mainly caused by the equity disposal of the original
Investment 210,928,088.57 126,095,109.54 67.28% subsidiary Sanya Hotel Company to realize the investment returns
in the merger level.
Non-operating This is mainly caused by the profits obtained due to the disposal of
23,803,424.50 3,501,882.36 579.73%
income non-current assets.
This is mainly caused by the compensation paid by the company
Operating expenses 15,616,543.79 1,390,348.78 1023.21% and deferred compensation paid by the subsidiary Heubei Real
Estate Company.
This is mainly caused by the subsidiary's preparation of calculating
the assets devalue, the enterprise income tax calculated and
withdrawn due to disposal of equity without pre-tax deduction, and
Income tax expense 57,173,310.63 16,704,237.23 242.27%
the land increase tax and enterprise income tax calculated and
withdrawn due to the subsidiary Hubei Real Estate delivering
house to confirm income cost.
Minority gains and This is mainly caused by the subsidiary Hubei Real Estate
4,179,154.18 -19,547,638.49 121.38%
losses Company's profits.
Other This is mainly caused by southwest securities carry forward other
-125,127,595.63 100.00%
comprehensive comprehensive income by the transfer of the previous period, this
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016
Closing Opening Ratio of
Item Reason of Change
Balance Balance Change
This is mainly caused by the subsidiary Hubei Real Estate
Operating income 969,140,915.32 267,068,750.88 262.88%
delivering Luxurious Green Phase III to confirm income.
income period due to this business.
Net cash flows from This is mainly caused by the disposal of cashes received by the
530,690,704.65 132,040,295.78 301.92%
investing activities subsidiary Sanya Hotel Company in the current period.
Net cash flows from This is mainly caused by the company to repay most of foreign
-752,863,299.42 -263,281,982.24 -185.95%
financing activities borrowing.
Hainan Pearl River Holding Company Limited
28 April , 2017
