HAINAN PEARL RIVER HOLDINGS COMPANY LIMITED
SEMI-ANNUAL REPORT
I Important Notes
This Abstract is based on the full text of the Semi-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”).
The semi-annual financial report is unaudited.
The Company has no plans to distribute cash dividends or bonus shares and convert capital reserve into share capital.
This Abstract has been prepared in both Chinese and English. Should there be any discrepancies or misunderstandings
between the two versions, the Chinese version shall prevail.
II Company Profile
1. Stock Profile
Stock name Pearl River A, 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
Office address
Middle Road, Chaoyang District, Beijing
Tel. 010-51672029
E-mail 593374748@qq.com
2. Key Consolidated Financial Results
Indicate by tick mark whether the Company needs to retroactively adjust or restate any of its accounting data.
□ Yes √ No
Reporting Period Same period of last year +/- (%)
Operating revenues (RMB) 393,836,785.57 149,032,528.40 164.26%
Net profit attributable to shareholders of
17,226,146.52 -47,370,594.88 136.36%
the Company (RMB)
Net profit attributable to shareholders of
the Company before exceptional gains and 18,603,896.70 -85,764,505.67 121.69%
losses (RMB)
Net cash from operating activities (RMB) -69,730,210.02 161,345,565.54 -143.22%
Basic earnings per share (RMB/share) 0.04 -0.11 136.36%
Diluted earnings per share (RMB/share) 0.04 -0.11 136.36%
Weighted average return on equity (%) 23.37% 0.00% 23.37%
End of Reporting Period End of last year +/- (%)
Total assets (RMB) 1,126,499,389.90 1,385,469,635.17 -18.69%
Net assets attributable to shareholders of
82,314,449.40 65,088,302.88 26.47%
the Company (RMB)
3. Shareholders and Their Holdings at Period-End
Unit: share
Total number of preference
Total number of common shareholders with resumed
32,668
shareholders at period-end voting rights at period-end (if
any)
Top 10 shareholders
Name of Nature of Shareholding Total shares Pledged or frozen shares
Restricted shares held
shareholder shareholder percentage held Status Number
Beijing Grain State-owned
28.95% 123,561,963
Group Co., Ltd. corporation
Li Sheryn Zhan Foreign
4.90% 20,909,400
Ming individual
Domestic
Dong Xueliang 0.67% 2,844,041
individual
Domestic
Mei Jianying 0.61% 2,583,803
individual
Domestic
Xu Zhen 0.57% 2,425,500
individual
Domestic
Yang Shuling 0.47% 2,000,000
individual
Foreign
Yao Liyuan 0.46% 1,950,000
individual
Domestic
Zhang Xiaoxia 0.46% 1,949,250
individual
Domestic
Wang Xiaoxing 0.43% 1,836,500
individual
Domestic
Jiao Qingling 0.41% 1,770,759
individual
Among shareholders above, there exists no related-party relationship between the primaryl
shareholder and other shareholders of the Company. Neither are parties with concerted action
Related or acting-in-concert
as prescribed in the Information Disclosure Administrative Methods for Changes in Shareholding
parties among shareholders
of Shareholders of Listed Companies. And it is unknown whether there is related-party
above
relationship among other shareholders and whether they are belong to prescribed parties with
concerted action.
Shareholders conducting Shareholder Dong Xueliang held 600,000 shares in the Company through his account of
securities margin trading (if any) collateral securities for margin trading and held 2,244,041 shares in the Company through his
common stock account in China Galaxy Securities Co., Ltd..
4. Change of Controlling Shareholder or Actual Controller in Reporting Period
The controlling shareholder remained the same in the Reporting Period.
The actual controller remained the same in the Reporting Period.
5. Number of Preference Shareholders and Shareholdings of Top 10 of Them
No preference shareholders in the Reporting Period.
6. 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 Reporting Period
In the first half of 2017, the Company proactively carried forward its reorganization program while paying adequate
attention to its other operations. As a result, for this period, the Company achieved, on a consolidated basis, operating
revenues of RMB393.8368 million and net profit of RMB20.5404 million.
(1) Carrying forward the reorganization program solidly
The significant assets restructuring of the Company and Beijing Grain Group Co., Ltd. (BGG) are in the orderly process of
promotion. On the first half year of 2017, the Company studied the related questions and feedback carefully and
implemented them term by term according to Notice about the First Feedback of Administrative License Projects Review
of CSRC and Notice about the Second Feedback of Administrative License Projects Review of CSRC. The Company replied
the listed questions according to the requirements of feedback, and updated and revised related materials, such as audit
report, assessment report, preparation for review report, and reorganization report, etc. This significant assets
restructuring was conditionally passed by listed companies’ mergers and restructuring review committee of CSRC on June
28. On July 28, this significant assets restructuring acquired The Approval about Checking and Approving HaiNan Pearl
River Holdings Co., Ltd. to Issue Shares to Purchase Assets and Raise Supporting Funds to Companies, like BGG, etc.
Recently, the Company is conducting the delivery work of this significant assets restructuring.
(2) Operation Review
Firstly, the property sells well. In the first half of 2017, even though the real estate market of Wuhan, Hubei was
influenced by a series of finance and policies such as purchase restriction, monitoring of house price and tighter mortgage
loan, the sales of real estate still went well for the decrease of pusher. Thus, the sales of Meilin Qingcheng Phase III Project
of Wuhan, Hubei went smoothly. In the first half of 2017, the real estate development business generated operating
revenue of RMB235.7708 million and net profits of RMB32.9709 million.
Secondly, the property management runs smoothly. The property management business of the Company runs smoothly
with no efficient optimization for project structures and relatively low profit margin. The operating revenue and net
profits generated from property management are respectively RMB147.2127 million and RMB-1.4795 million for the first
half of 2017. There are a total of 86 management projects covering over 7,600,000m2 including 14 office projects and 66
residential projects accounting for 80% most of which are old projects. With the aging facilities, the rapid increase of
operating cost without rising of property fees for many years further compresses the profit space of property
management business.
Thirdly, the hotel service business remains distressed. The Company’s subsidiary Mudanjiang Tourism Group is mainly in
charge of the construction and operation of Snow Land. Because of the large investment by the Company recently in
infrastructure and tourism facilities of Snow Land, high financing cost and gradual transfer of constructions in progress
into fixed assets generating great depreciation expense, it is difficult to make profits in a short time. In the first half of
2017, the operating revenue and net profits generated by hotel & tourism service are respectively RMB10.8533 million
and RMB-10.9509 million.
2. Matters Related to Financial Report
(1) Changes in Accounting Policies, Accounting Estimations and Measurement Methods Compared to Last
Accounting Period
No such cases.
(2) Retroactive Restatements due to Correction of Significant Accounting Errors in Reporting Period
No such cases.
(3) Changes in Scope of Consolidated Financial Statements Compared to Last Accounting Period
No such cases.
Hainan Pearl River Holding Company Limited
Consolidated Balance Sheet
Unit:RMB
ASSETS Note(VII) 30 June 2017 31 December 2016
Current assets ——
Currency Funds 167,840,121.26 246,504,351.39
Provision of settlement fund
Funds lent
Financial assets at fair value through profit or loss
Derivative financial assets
Notes receivable
Accounts receivable 20,229,593.44 16,084,139.32
Advances to suppliers 85,382,747.88 67,598,789.02
Interest receivable 2,710,880.79 2,710,880.79
Dividends receivable 260,015.00 260,015.00
Other receivables 300,245,043.39 350,870,047.05
Buying back the sale of financial assets
Inventories 158,016,371.89 297,867,807.05
Reclassified to assets held for sale
Current portion of non-current assets
Other current assets 14,411,010.80 8,714,139.07
Total current assets 749,095,784.45 990,610,168.69
Non-current assets ——
Available-for-sale financial assets 30,824,994.90 30,824,994.90
Held-to-maturity investments
Long-term receivables
Long-term equity investments 32,771,272.56 33,866,644.98
Investment property 15,801,889.83 19,244,780.80
Fixed assets 213,188,579.04 220,409,931.29
Construction in progress 78,501,913.02 78,169,695.02
Construction materials
Fixed assets pending for disposal
Productive biological assets
Oil and gas assets
Intangible assets 3,619,565.30 3,692,130.10
Development disbursements
Goodwill
Long-term prepaid expenses 1,113,550.80 2,083,962.89
Deferred tax assets - 4,985,486.50
Other non-current assets 1,581,840.00 1,581,840.00
Total non-current assets 377,403,605.45 394,859,466.48
Total assets 1,126,499,389.90 1,385,469,635.17
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 (Continued)
Unit:RMB
ASSETS Note(VII) 30 June 2017 31 December 2016
Current liabilities ——
Short-term borrowings
Financial liabilities at fair value through profit or loss
Derivative financial assets
Notes payable
Accounts payable 66,826,515.71 77,627,005.61
Advances from customers 230,886,723.58 365,746,868.16
Employee benefits payable 13,303,711.44 12,392,816.29
Taxes payable 43,455,350.36 84,404,890.27
Interest payable 84,670,716.84 86,294,850.36
Dividends payable 3,213,302.88 3,213,302.88
Other payables 606,193,379.59 541,823,806.30
Current portion of non-current liabilities 78,710,181.59
Other current liabilities
Total current liabilities 1,048,549,700.40 1,250,213,721.46
Non-current liabilities ——
Long-term borrowings 5,000,000.00 73,666,666.66
Bonds payable
Long-term payable
Grants payable
Provisions
Deferred income
Deferred tax liabilities 597,896.93 597,896.93
Other non-current liabilities
Total non-current liabilities 5,597,896.93 74,264,563.59
Total liabilities 1,054,147,597.33 1,324,478,285.05
Equity ——
Share capital 426,745,404.00 426,745,404.00
Capital reserve 543,615,438.94 543,615,438.94
Less:Treasury Share
Other comprehensive income
Surplus reserve 109,487,064.39 109,487,064.39
Provision for general risks
Retained earnings -997,533,457.93 -1,014,759,604.45
Equity attributable to parent company 82,314,449.40 65,088,302.88
Minority interests -9,962,656.83 -4,096,952.76
Total owner's equity 72,351,792.57 60,991,350.12
Total liabilities and owner's equity 1,126,499,389.90 1,385,469,635.17
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) 2017(January -- June )
I. Revenue 393,836,785.57 149,032,528.40
Including:Operating income 393,836,785.57 149,032,528.40
II.Total cost 364,005,163.14 237,320,083.66
Including:Operating cost 288,602,024.02 122,029,925.99
Interest expenses
Handling charges and commissions expenses
Business taxes and surcharges 16,524,745.23 10,405,923.57
Selling expenses 6,598,207.36 8,871,001.02
Administrative expenses 49,041,651.89 45,226,141.70
Including:research and development expenses
Finance expenses 7,378,082.80 48,791,814.72
Including: Interest expenses
Interest income
Net loss on foreign exchange
Impairment losses of assets -4,139,548.16 1,995,276.66
Others
Add:Gain on fair-value changes(“-”for loss)
Investment income(“-”for loss) -1,095,372.42 37,928,898.30
Including:investment income from associates and joint ventures -1,095,372.42 -234,924.26
Gain or loss on foreign exchange ( \"-\"for loss)
III.Operating profits(“-”for loss) 28,736,250.01 -50,358,656.96
Add:Non-operating income 623,290.84 2,651,492.34
Including:Gains on disposal of non-current assets 168,799.75 2,555,707.19
Gains from exchange of non-monetary assets
Government grants
Gains from debt restructuring
Less:Non-operating expenses 1,617,428.07 3,278,378.77
Including:Losses on disposal of non-current assets 19,264.12 131,916.10
Losses from exchange of non-monetary assets
Losses from debt restructuring
IV.Profit before tax(“-”for loss) 27,742,112.78 -50,985,543.39
Less:Income tax expenses 7,201,670.33 183,697.96
V.Net profit(“-”for loss) 20,540,442.45 -51,169,241.35
Net profit attributable to owners of the Company 17,226,146.52 -47,370,594.88
*Profit/loss attributable to minority shareholders 3,314,295.93 -3,798,646.47
VI.Post-tax net value of other comprehensive income -
Post-tax net value of other comprehensive income attributable to owners of the Company
(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
Post-tax net value of other comprehensive income attributable to minority shareholders
VII.Total comprehensive income attributable to: 20,540,442.45 -51,169,241.35
Owners of the Company 17,226,146.52 -47,370,594.88
*Minority shareholders 3,314,295.93 -3,798,646.47
VIII.Earnings per share
i.Basic earnings per share 0.04 -0.11
ii.Diluted earnings per share 0.04 -0.11
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) 2017(January -- June )
Ⅰ.Cash flows from operating activities: ——
Cash received from sales and services 261,403,951.89 479,504,679.10
Tax refunds
Net cash from other operating activities 28,064,358.46 40,079,903.61
Sub-total of cash inflows from operating activities 289,468,310.35 519,584,582.71
Cash paid for goods and services 78,618,001.87 187,434,195.91
Cash paid to and on behalf of employees 111,663,682.62 101,699,085.20
Payment of taxes and surcharges 84,700,876.79 45,957,728.39
Other cash payments relating to operating activities 84,215,959.09 23,148,007.67
Sub-total of cash outflows from operating activities 359,198,520.37 358,239,017.17
Net cash flows from operating activities -69,730,210.02 161,345,565.54
Ⅱ.Cash flows frow investing activities: ——
Cash receipts from withdraw of investments 10,000,000.00 12,000,000.00
Cash received from investment income 8,271.82
Net cash from disposal of fixed assets, intangible assets and other long-term assets 43,616,812.51 4,849,613.03
Net cash received from disposal of subsidiaries and other business units
Other cash receipts relating to investing activities 49,136.10
Sub-total of cash inflows from investing activities 53,665,948.61 16,857,884.85
Cash paid for fixed assets, intangible assets and other long-term assets 354,834.72 3,287,207.48
Cash payments for investments 8,000,000.00
Net cash paid for acquiring subsidiaries and other business units
Net cash used in other investing activities 123,352.41
Sub-total of cash outflows from investing activities 354,834.72 11,410,559.89
Net cash flows from investing activities -62,245,134.00 5,447,324.96
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 208,957,725.27 43,968,657.29
Cash received from issuance of bonds
Cash receipts related to other financing activities
Sub-total of cash inflows from financing activities 208,957,725.27 43,968,657.29
Cash repayments for debts 256,353,451.20 254,610,856.00
Cash payments for distribution of dividends, profit and interest expenses 13,129,408.07 14,499,908.50
Including: dividends or profit paid by subsidiaries to minority shareholders
Other cash payments relating to financing activities 1,720,000.00 4,302,704.04
Sub-total of cash outflows from financing activities 271,202,859.27 273,413,468.54
Net cash flows from financing activities -62,245,134.00 -229,444,811.25
Ⅳ.Effect of foreign exchange rate changes on cash and cash equivalents -
Ⅴ.Net increase in cash and cash equivalents -78,664,230.13 -62,651,920.75
Add: beginning balance of cash and cash equivalents 246,504,351.39 205,762,131.54
Ⅵ. Ending balance of cash and cash equivalents 167,840,121.26 143,110,210.79
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
2017(January -- June )
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 - 543,615,438.94 - - 109,487,064.39 -1,014,759,604.45 -4,096,952.76 60,991,350.12
Add:Changes in accounting policies — — — — — — — — — — — — —
Corrections of errors in Prior Period — — — — — — — — — — — — —
Others - - - - - - - - - - - - -
II.Opening balance of the current 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
III.Changes for the year - - - - - - 17,226,146.52 - 17,226,146.52 -5,865,704.07 11,360,442.45
(I) Total comprehensive income - - - - - - 17,226,146.52 - 17,226,146.52 3,314,295.93 20,540,442.45
(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 - - - - - - - - - - - 9,180,000.00 9,180,000.00
i.Appropriation to surplus reserve - - - - - - - - - - - -
Including:Statutory surplus reserve - - - - - - - - - 9,180,000.00 9,180,000.00
Optional surplus reserve - - - - - - - - - - - - -
ii.Appropriation of provision for
- - - - - - - - - - - -
general risks
iii.Profit distribution to equity owners - - - - - - - - - - - - -
iv.Others - - - - - - - - - - - 7,780,950.31 7,780,950.31
(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 - -997,533,457.93 - 82,314,449.40 -9,962,656.83 72,351,792.57
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:treasu Specialized Provision for Minority Total owner's
(VII) Paid-in capital equity Capital reserve comprehensive Surplus reserve Retained earnings Others Sub-total
ry 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 - -16,057,057.25 -233,193,926.40
-217,136,869.15
III.Changes for the year -47,370,594.88 282,225,172.03 3,982,303.84 -43,388,291.04
(I) Total comprehensive income -47,370,594.88 73,300,570.54 -3,798,646.47 -51,169,241.35
(II) Capital contribution and
208,924,601.49 7,780,950.31 7,780,950.31
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 7,780,950.31 7,780,950.31
( III).Profits distribution -233,193,926.40
-233,193,926.40 -233,193,926.40
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 - -1,135,430,769.87 - -168,105,623.52 -12,074,753.41 -276,582,217.44
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) 30 June 2017 31 December 2016
Current assets: ——
Cash and cash equivalent 6,748,196.36 33,952,786.37
Provision of settlement fund
Funds lent
Financial assets at fair value through profit or loss
Derivative financial assets
Notes receivable
Accounts receivable 1 1,016,974.23 1,032,085.83
Advances to suppliers 50,000,000.00 50,000,000.00
Interest receivable
Dividends receivable 260,015.00 260,015.00
Other receivables 2 539,854,746.94 591,785,222.60
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 602,703,967.98 681,854,145.25
Non-current assets: ——
Available-for-sale financial assets 30,824,994.90 30,824,994.90
Held-to-maturity investments
Long-term receivables
Long-term equity investments 100,784,906.50 101,713,800.55
Investment property 6,232,449.23 6,383,667.53
Fixed assets 3,792,790.35 4,019,513.64
Construction in progress
Construction materials
Fixed assets pending for disposal
Productive biological assets
Oil and gas assets
Intangible assets
Development disbursements
Goodwill
Long-term prepaid expenses 185,859.30 278,707.32
Deferred tax assets
Other non-current assets
Total non-current assets 141,821,000.28 143,220,683.94
Total assets 744,524,968.26 825,074,829.19
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) 30 June 2017 31 December 2016
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 1,446,129.33 1,224,801.48
Including:Accrued payroll 1,224,801.48
Welfare benefits payable
Including:Staff and workers' bonus and selfare
Taxes and surcharges payable 1,048,322.24 27,537,449.60
Including:Taxes payable 27,537,449.60
Interest payable 82,468,756.03 82,468,756.03
Dividends payable 3,213,302.88 3,213,302.88
Other payables 526,544,809.35 650,471,361.88
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
Other current liabilities
Total current liabilities 617,243,165.94 767,437,517.98
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 617,243,165.94 767,437,517.98
Equity: ——
Share capital 426,745,404.00 426,745,404.00
Capital reserve 546,201,098.01 546,201,098.01
Less:Treasury Share
Other comprehensive income
Surplus reserve 109,487,064.39 109,487,064.39
Provision for general risks
Retained earnings -955,151,764.08 -1,024,796,255.19
Total owner's equity 127,281,802.32 57,637,311.21
Total liabilities and owner's equity 744,524,968.26 825,074,829.19
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) 2017(January -- June ) 2016
I. Revenue 2,857.14 620,935.59
Including:Operating income 2,857.14 620,935.59
II.Total cost 4,438,420.05 51,302,567.04
Including:Operating cost 151,218.30 173,367.05
Business taxes and surcharges 67,528.32 4,203,229.46
Selling expenses
Administrative expenses 7,823,134.52 8,249,999.98
Including:research and development expenses
Finance expenses 2,014,415.03 38,649,091.37
Including: Interest expenses
Interest income
Net loss on foreign exchange
Impairment losses of assets -5,617,876.12 26,879.18
Others
Add:Gain on fair-value changes(“-”for loss)
Investment income(“-”for loss) 74,891,105.95 -159,255.52
Including:Investment income from associates and joint ventures -928,894.05 -159,255.52
Gain or loss on foreign exchange ( \"-\"for loss)
III.Operating profits(“-”for loss) 70,455,543.04 -50,840,886.97
Add:Non-operating income 920.00 2,456,114.61
Including:Gains on disposal of non-current assets 2,456,114.61
Gains from exchange of non-monetary assets
Government grants
Gains from debt restructuring
Less:Non-operating expenses 811,971.93 1,802,042.70
Including:Losses on disposal of non-current assets 1,802,042.70
Losses from exchange of non-monetary assets
Losses from debt restructuring
IV.Profit before tax(“-”for loss) 69,644,491.11 -50,186,815.06
Less:Income tax expenses
V.Net profit(“-”for loss) 69,644,491.11 -50,186,815.06
VI.Post-tax net value of other comprehensive income - -
(I) Other comprehensive income that will not be reclassified subsequently to profit or loss
(II) Other comprehensive income that will be reclassified subsequently to profit or loss -
i.Other comprehensive incomes that be able to reclassify as profit under equity method.
ii.Gain or loss from fair-value changes on available for sale financial assets
iii.Reclassify held-to-maturity investment to hold-to-sale financial assets gain or loss
iv. The effective cash flow hedgeing gain or loss
v. Translation differences arising on translation of financial statements denominated in foreign currencies
VII.Total comprehensive income 69,644,491.11 -50,186,815.06
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) 2017(January -- June )
Ⅰ.Cash flows from operating activities: ——
Cash received from sales and services - 12,455,200.00
Tax refunds
Net cash from other operating activities 15,082,818.77 136,609,030.88
Sub-total of cash inflows from operating activities 15,082,818.77 149,064,230.88
Cash paid for goods and services 76,485,200.00
Cash paid to and on behalf of employees 2,803,476.91 3,292,324.17
Payment of taxes and surcharges 26,529,602.12 2,107,925.47
Other cash payments relating to operating activities 5,574,741.83 6,410,947.28
Sub-total of cash outflows from operating activities 34,907,820.86 88,296,396.92
Net cash flows from operating activities -19,825,002.09 60,767,833.96
Ⅱ.Cash flows frow investing activities: ——
Cash receipts from withdraw of investments 10,000,000.00 8,000,000.00
Cash received from investment income
Net cash from disposal of fixed assets, intangible assets and other long-term assets 35,000,000.00 3,060,360.00
Net cash received from disposal of subsidiaries and other business units
Other cash receipts relating to investing activities 49,136.10
Sub-total of cash inflows from investing activities 45,049,136.10 11,060,360.00
Cash paid for fixed assets, intangible assets and other long-term assets 26,549.00
Cash payments for investments 13,330,000.00
Net increase of pledged loans
Net cash paid for acquiring subsidiaries and other business units
Net cash used in other investing activities
Sub-total of cash outflows from investing activities - 13,356,549.00
Net cash flows from investing activities 45,049,136.10 -2,296,189.00
Ⅲ.Cash flows from financing activities: ——
Cash proceeds from investments by others
Including:cash received by subsidiaries from minority shareholders' investment
Cash received from borrowings 29,000,000.00 27,585,780.73
Cash received from issuance of bonds
Cash receipts related to other financing activities
Sub-total of cash inflows from financing activities 29,000,000.00 27,585,780.73
Cash repayments for debts 78,049,598.52 78,870,856.00
Cash payments for distribution of dividends, profit and interest expenses 1,659,125.50 6,875,492.05
Including: dividends or profit paid by subsidiaries to minority shareholders
Other cash payments relating to financing activities 1,720,000.00 176,704.04
Sub-total of cash outflows from financing activities 81,428,724.02 85,923,052.09
Net cash flows from financing activities -52,428,724.02 -58,337,271.36
Ⅳ.Effect of foreign exchange rate changes on cash and cash equivalents -
Ⅴ.Net increase in cash and cash equivalents -27,204,590.01 134,373.60
Add: beginning balance of cash and cash equivalents 33,952,786.37 479,720.71
Ⅵ. Ending balance of cash and cash equivalents 6,748,196.36 614,094.31
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
2017 (January -- June )
Note Provision
ITEM Other
Other equity Less:treasury Specialized Surplus for Retained Total owner's
(XV) Paid-in capital Capital reserve comprehensive Others
instruments shares reserve reserve general earnings equity
income
risks
1 2 3 4 5 6 7 8 9 10 11
I.Closing balance of the preceding year 426,745,404.00 546,201,098.01 109,487,064.39 57,637,311.21
-1,024,796,255.19
Add:Changes in accounting policies
Corrections of errors in Prior Period
Others -
II.Opening balance of the current year 426,745,404.00 546,201,098.01 109,487,064.39 57,637,311.21
-1,024,796,255.19
III.Changes for the year - - - - - - - - 69,644,491.11 - 69,644,491.11
(I) Total comprehensive income - - - - - - 69,644,491.11 - 69,644,491.11
(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 - 546,201,098.01 - - - 109,487,064.39 - -955,151,764.08 - 127,281,802.32
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 Provision
ITEM Other
Other equity Less:treasury Specialized Surplus for Retained Total owner's
(XV) Paid-in capital Capital reserve comprehensive Others
instruments shares reserve reserve general 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 - - - - - - - -50,186,815.06 - -50,186,815.06
(I) Total comprehensive income - - - 0.00 - -50,186,815.06 - -50,186,815.06
(II) Capital contribution and withdrawals by owners - - - - - - - - - -
i.Capital contributions from owners - - - - - - - - - - -
ii.Capital contribute from other equity instrument holders - - - - - - - - - - -
iii.Share-based payment recorded in owner's equity - - - - - - - - - - -
iv.Others - - - - - - - - - -
( III).Profits distribution - - - - - - - - - - -
i.Appropriation to surplus reserve - - - - - - - - - - -
Including:Statutory surplus reserve - - - - - - - - -
Optional surplus reserve - - - - - - - - - - -
ii.Appropriation of provision for general risks - - - - - - - - - - -
iii.Profit distribution to equity owners - - - - - - - - - - -
iv.Others - - - - - - - - - - -
(V).Transfer within owner's equity - - - - - - - - - - -
i.Capital reserve transferred to paid-in capital - - - - - - - - - - -
ii.Surplus reserve transferred to paid-in capital - - - - - - - - - - -
iii.Recover of loss by surplus reserve - - - - - - - - - - -
iv.Others - - - - - - - - - - -
IV. Closing balance of the year 426,745,404.00 - 337,276,496.52 - - - 109,487,064.39 - -698,666,644.62 - 174,842,320.29
The accompanying notes form an integral part of the financial statements.
Legal representative: Wang Chunli Principal in charge of accounting: Guan Ying Head of the accounting department:Wu Xiukun
Hainan Pearl River Holding Company Limited
Notes on the Semi-anual Financial Report 2017
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
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 August 23, 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 Proportion of
Company name Abbreviation Unit type Level
ratio(%) voting rights(%)
Hainan Pearl River Property
Hotel Management Co., Ltd Pearl River Property Holdings 2 98.00 98.00
Hainan Pearl River
Landscaping Co., Ltd Landscaping Company Wholly 3 100.00 100.00
Hainan Pearl River Property
Cleaning Co., Ltd Cleaning Company Wholly 3 100.00 100.00
Hainan Pearl River Property
Electrical and
Electrical and Mechanical Wholly 100.00 100.00
Mechanical Company
Engineering Company
Hubei Pearl River Real
Estate Development Co., Hubei Pearl River Holdings 2 89.20 89.20
Ltd
Wuhan Zhujiang Meilin
Hotel Management Co., Ltd Meilin Hotel Wholly 3 100.00 100.00
Shanghai Rongxin Real
Shanghai Realty Wholly 100.00 100.00
Estate Co., Ltd
Shareholding Proportion of
Company name Abbreviation Unit type Level
ratio(%) voting rights(%)
Beijing Jiubo Culture
Jiubo Culture Wholly 100.00 100.00
Development Co., Ltd
Mudanjiang City Pearl River
Wanjia Tourism Investment Mudanjiang
Wholly 100.00 100.00
Development Group Co., TourismGroup
Ltd
Hailin City Wanjia Xuexiang
Xuexiang Resort Wholly 100.00 100.00
Resort Hotel
Mudanjiang City Jingpo
Lake Zhujiang Wanjia Hotel Jingpo Lake Hotel Wholly 3 100.00 100.00
Co., Ltd
Mudanjiang City Wanjia
Mudanjiang Hotel Wholly 100.00 100.00
Star Hotel Co., Ltd
Harbin Wanjia Travel
Travel Service Wholly 100.00 100.00
Service Co., Ltd
Hebei Zhengshi Qinghui
Real Estate Development Hebei Realty Holdings 2 51.00 51.00
Co., Ltd
Shanghai Pearl Property
Pearl Property Holdings 50.00 50.00
Management Co., Ltd
At the end of this period, the subsidiary corporation Hainan Pearl River Industrial Co., Ltd.
Shanghai real estate company, approved by the Shanghai Administration for Industry &
Commerce, changes his name into Shanghai Rongxin Real Estate Co., Ltd. The shareholding ratio
and voting rights remain the same. The scope of consolidation financial statements remains the
same, either.
III. The basis for the formulation of financial statement
1. The basis for the formulation of 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.
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, 2017 to June 30, 2017.
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 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. Methods for the formulation of consolidated financial statements
The scope of consolidation in the consolidated financial statements is determined on the basis of
control. All subsidiaries(including separate entities controled parent company) should be included
in the consolidated financial statements.
In preparing the consolidated financial statements, where the accounting policies and the
accounting periods of the Company and subsidiaries are inconsistent, the financial statements of
the subsidiaries are adjusted in accordance with the accounting policies and the accounting
period of the Company.
The consolidated financial statements are prepared on the basis of the financial statements of
the Company and all of its subsidiaries.
All significant intra-group balances and transactions are eliminated on consolidation.
When the amount of loss for the period attributable to the minority shareholders of a subsidiary
exceeds the minority shareholders' portion of the opening balance of shareholders' equity of the
subsidiary, the excess amount is still allocated against minority interests.
For a subsidiary that is acquired in a business combination involving enterprises under common
control, it is included in the consolidated financial statements from the date when it, together
with the Company, comes under common control of the ultimate controlling party.
Their operating results and cash flows from the beginning of the current reporting period are
included in the consolidated income statement and consolidated statement of cash flows, as
appropriate.
For a subsidiary acquired through a business combination not involving enterprises under
common control, the operating results and cash flows from the acquisition date (the date when
control is obtained) are included in the consolidated income statement and consolidated
statement of cash flows, as appropriate, and no adjustment is made to the opening balances and
comparative figures in the consolidated financial statements.
For a subsidiary disposed of by the Company, the operating results and cash flows before the
date of disposal (the date when control is lost) are included in the consolidated income
statement and consolidated statement of cash flows, as appropriate.
When the company loses control over a subsidiary due to disposal of equity investment or other
reason, any retained interest is re-measured at its fair value at the date when control is lost. The
difference between (i) the aggregate of the consideration received on disposal and the fair value
of any retained interest and (ii) the share of the former subsidiary's net assets cumulatively
calculated from the acquisition date according to the original proportion of ownership interests
is recognized as investment income in the period in which control is lost. Other comprehensive
income associated with investment in the former subsidiary is reclassified to investment income
in the period in which control is lost.
6. 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.
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 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 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:
(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
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 Percentage of Others
Ages
Receivable (%) Receivable (%)
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 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 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.
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.
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:
rate of
Estimated Rate of expected
Category depreciation
useful lives(Year) net salvage value
(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.
(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 Expected residual value Annual depreciation rate
Category
(years) (%) (%)
Buildings and
25 5 3.80
structures
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 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
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:
(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
3%、5%、6%、 and taxable services revenue (business
Value-added tax
11%、13%、17% reform pilot areas applicable taxable
services 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
property tax According to 70% of the original value of
1.2%、8%、12% the 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 786,233.90 1,305,777.52
Bank deposit 162,045,485.08 240,190,186.44
Other monetary funds 5,008,402.28 5,008,387.43
Total 167,840,121.26 246,504,351.39
The restricted monetary fund details are as follows:
Project Closing Balance Opening Balance
CDS used for hypothecation
5,000,000.00 5,000,000.00
deposit and notice deposit
Total 5,000,000.00 5,000,000.00
Note: as of June 31, 2017, this company limited monetary fund is a subsidiary of Hubei of pledge
of property to Shanghai pudong development bank loan margin. See note 44.
Note 2 Accounts receivable
1) Disclosure of category details of accounts receivable:
Closing Balance
Categories Book Balance Provision for Bad Account
Ratio Rate Chargeable Book Value
Amounts Amounts
(%) (%)
Accounts receivable with
significant single amount
8,856,207.60 26.72% 8,856,207.60 100.00%
and individual provision
for bad debts
Accounts receivable with
combinational
withdrawal of the bad 22,259,256.35 67.17% 2,029,662.91 9.12% 20,229,593.44
debt provision by credit
risks characteristics
Accounts receivable with
non-significant single
2,022,991.02 6.10% 2,022,991.02 100.00%
amount and individual
provision for bad debts
Total 33,138,454.97 100.00% 12,908,861.53 ----- 20,229,593.44
Continued:
Opening Balance
Categories Book Balance Provision for Bad Account
Ratio Rate Chargeable Book Value
Amounts Amounts
(%) (%)
Accounts receivable with
8,856,207.60 31.23% 8,856,207.60 100.00%
significant single amount
Opening Balance
Categories Book Balance Provision for Bad Account
Ratio Rate Chargeable Book Value
Amounts Amounts
(%) (%)
and individual provision for
bad debts
Accounts receivable with
combinational withdrawal
of the bad debt provision 17,480,913.67 61.64% 1,396,774.35 7.99% 16,084,139.32
by credit risks
characteristics
Accounts receivable with
non-significant single
2,022,991.02 7.13% 2,022,991.02 100.00%
amount and individual
provision for bad debts
Total 28,360,112.29 100.00% 12,275,972.97 16,084,139.32
Description of categories of accounts receivable:
(1) Accounts receivable with significant single amount and individual provision for bad debts at
the end of period:
Closing Balance
Name Rate
Accounts Provision for Reasons of
Chargeable
Receivable Bad Account Withdrawal
(%)
Hainan racing entertainment
1,046,985.40 1,046,985.40 100.00% Irrecoverable
Co., LTD
Hainan Baoping company 2,218,494.43 2,218,494.43 100.00% Irrecoverable
Hainan Zhongyuan tenement Irrecoverable
agency company 2,406,158.00 2,406,158.00 100.00%
Singapore China holding co., Irrecoverable
LTD 2,090,069.77 2,090,069.77 100.00%
Hainan dragon film studio Irrecoverable
1,094,500.00 1,094,500.00 100.00%
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 11,361,453.65 227,229.07 2.00%
1-2 years 5,135,048.9 256,752.44 5.00%
2-3 years 2,084,911.46 208,491.14 10.00%
3-4 years 824,727.71 164,945.54 20.00%
4-5 years 1,271,562.90 381,468.87 30.00%
Over 5 years 1,581,551.67 790,775.84 50.00%
Total 22,259,256.35 2,029,662.91 -----
Continued:
Opening 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 -----
(3) Accounts receivable with non-significant single amount and individual provision for bad debts
at the end of period:
Closing Balance
Name Accounts Provision for Bad Rate Reasons of
Receivable Account Chargeable(%) Withdrawal
Haikou Peijie clothing
497,520.00 497,520.00 100.00% Irrecoverable
company
Hainan International silver city
451,712.00 451,712.00 100.00% Irrecoverable
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 592,196.52 592,196.52 100.00% Irrecoverable
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 RMB632,888.56yuan.
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
Bad Account
Name Closing Balance Amount of Accounts
Provisions Withdrawn
Receivable (%)
Hunan Railway Lianchuang
5,052,919.43 15.25% 101,058.39
Technology Development Co., Ltd.
Sino (Zhengzhou) Real Estate Co.,
3,525,276.00 10.64% 155,866.08
Ltd.
Hainan racing entertainment Co., LTD 2,406,158.00 7.26% 2,406,158.00
Dahailin forestry bureau 2,547,615.17 7.69% 140,406.64
Nanning wiing asset management co.
2,499,750.00 7.54% 49,995.00
LTD
Total 16,031,718.60 48.38% 2,853,484.11
Note 3 Advance payment
1) Advance payment is listed as per the aging.
Closing Balance
Aging Accounts Paid in Provision for Bad
Ratio (%)
Advance Account
Within 1 year 20,659,366.89 22.35
1-2 years 8,492,355.99 9.19
2-3 years
Over 3 years 63,281,186.00 68.46 7,050,161.00
Total 92,432,908.88 100.00 7,050,161.00
Continued:
Opening Balance
Aging Accounts Paid in Provision for Bad
Ratio (%)
Advance 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
2) Description on the reasons why the advance payment whose aging is more than one year
and amount is significant fails to be timely settled accounts
Reasons why to fail to be settled
Name Closing Balance Aging
timely
Not check and accept the
Haikou Hongzhou Real Estate
50,000,000.00 over 3years
Development Unrelated Client house
Advance payment for the
Heilongjiang province mudanjiang
8,068,538.47 1-2years
forest engineering company construction cost
Advance payment for the
Dahailin Forestry Bureau 4,596,469.00 over 3 years
construction cost
over 3 years
Hebei in implementing investment Project shutdown
4,000,000.00
co., LTD
over 3 years
Hebei mountain building materials Project shutdown
2,800,000.00
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 total
Advance Reasons why to be
Name Closing Balance advance
Payment Time outstanding
payment
(%)
The house under the
advance payment is
Haikou Hongzhou Coastal
50,000,000.00 54.09 over 5 years not checked and
Construction Co., Ltd.
accepted
temporarily
Advance payment
Jiangsu nantong erjian group co.
Within 1 yea for the construction
LTD
9,002,522.00 9.74% cost
Advance payment
Heilongjiang Mudanjiang Forestry Within 1 yea、
8,489,855.99 9.18 for the construction
Engineering Company 1-2years
cost
Advance payment
Dahailin Forestry Bureau 4,596,469.00 4.97 4-5years for the construction
cost
Advance payment
Wuhan changyou construction
4,100,745.70 4.44% Within 1 yea for the construction
materials co. LTD
cost
Total 76,189,592.69 82.43%
4) Other descriptions on advance payment
According to the Arrangement agreed upon “Supplementary Agreement of Execution of Longzhu
Phase-III Project” made by between the Company and Haikou Real Estate Development Co., Ltd.
(hereinafter referred to as “Hongzhou Property”), 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 Property, 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 of June 30, 2017, the second planning of the
project has been approved. As of the date of issue of this financial reporting, the design of the
construction plan is under way and the cleaning of the site has been completed.
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 2,710,880.79
Total 2,710,880.79 2,710,880.79
Note 5 Dividends receivable
Investee Closing Balance Opening Balance
Hainan PEARL RIVER Tube-pile
260,015.00 260,015.00
Co., Ltd.
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
Ratio Rate Chargeable Book Value
Amounts Amounts
(%) (%)
Other receivables with
significant single amount and
53,159,496.14 11.80% 53,159,496.14 100.00
individual provision for bad
debts
Other receivables with
combinational withdrawal of
390,597,483.22 86.71% 92,603,389.79 23.71 297,994,093.43
the bad debt provision by
credit risks characteristics
Other receivables with
non-significant single amount
6,681,254.55 1.48% 4,430,304.59 66.31 2,250,949.96
and individual provision for
bad debts
Total 450,438,233.91 100.00% 150,193,190.52 300,245,043.39
Continued:
Opening Balance
Book Balance Provision for Bad Account
Categories
Rate Book Value
Ratio
Amounts Amounts 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
Description of categories of other receivables:
(1) Other receivables with significant single amount and individual provision for bad
debts at the end of period:
Closing Balance
Name Provision for Rate Reasons of
Other Receivables
Bad Account Chargeable(%) Withdrawal
Singapore China holding co., LTD 16,981,016.24 16,981,016.24 100.00 Irrecoverable
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:
Closing Balance
Aging Provision for Bad
Other Receivables Rate Chargeable(%)
Account
Within 1 year 124,293,186.00 2,499,833.59 2.01
1-2 years 39,366,728.18 1,968,336.43 5.00
2-3 years 1,120,940.33 112,094.03 10.00
3-4 years 30,485,856.54 6,097,171.31 20.00
4-5 years 78,711,060.84 23,613,318.25 30.00
Over 5 years 116,619,711.33 58,312,636.17 50.00
Total 390,597,483.22 92,603,389.78 -----
Continued:
Opening Balance
Aging Provision for Bad
Other Receivables Rate Chargeable(%)
Account
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 -----
(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
268,542.54 268,542.54 100.00 Irrecoverable
of PEARL RIVER Square
China Construction Sixth
Engineering Division Group, 260,335.00 260,335.00 100.00 Irrecoverable
Ltd
Huazhou Jianan Company 200,000.00 200,000.00 100.00 Irrecoverable
PEARL RIVER 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
Withdrawal of
Amount below RMB150000 4,057,105.17 1,806,155.21 non-recoverable
44.52%
(49units) amount according to
the estimate
Total -----
6,681,254.55 4,430,304.59
2) Situation of the current bad debt provision withdrawn, recovered or reversed:
The amount of current bad debt provision withdrawn was RMB4,772,436.72 yuan.
3) There is no money owed by the shareholders who hold more than 5% (5% is included) of
voting shares of the Company in the closing other receivables.
4) Top 5 units of other receivables of the closing balance gathered on the basis of parties
which owe the money:
Ratio in
Closing Closing
Nature of Amount of Balance of
Name Closing Balance Aging
Money Other Bad Debt
Receivables Provisions
(%)
Payment for the
4-5years、
Beijing Kangtai Xingye Investment project and
102,500,000.00 over 5 22.76 43,050,000.00
Co.,Ltd intercourse
years
funds
Beijing runshun technology Intercourse
97,720,000.00 1-2years 21.70 1,954,400.00
development co. LTD funds
Payment for the
4-5years、
project and
Public Investment Co., Ltd 90,400,000.00 over 5 20.07 37,800,000.00
intercourse
years
funds
Lion king international investment Payment for the 1-2years、
50,000,000.00 11.10 7,000,000.00
co., LTD project 3-4years
1-5years、
Singapore Great Land Holdings Intercourse
16,981,016.24 over 3.77 16,981,016.24
Co.,Ltd funds
5year
Total 382,601,016.24 79.39 106,785,416.24
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 112,720 Ten thousand yuan, 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. The above mentioned
payments will be returned by September 30, 2017, and the amount of the above mentioned
amount will be 15 million yuan as of the date of this report. 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 parties jointly signed the Supplementary Agreement III of Cooperation
Agreement, which specified that original agreement shall be continued to perform if
administrative examination and approval permissions (mining permit) of Dujiawan Iron Mine or
Zhaojiayuan Iron Mine were obtained as of December 31, 2017, otherwise the company would
withdraw from the project as stipulated in original cooperation agreement, and fulfill the
obligation of the payment of investment amount and fees for the possession of funds as of June
30, 2018. As of the date of financial statement, Kangtai Industrial Co., Ltd. was entrusting relevant
agencies with the application for mining permit.In May 2013 and August 2013, the Company has
signed a Cooperation Agreement together with Singapore Great Land Holdings Ltd. (hereinafter
referred to as “Singapore Great Land”), According to this Agreement, the Company planned to
develop the Land No. 20 owned by Sanya PEARL RIVER Tube-pipe Co., Ltd. and located in Lizhigou
Industrial Park, Hairun Road, Sanya City. The Company has paid with RMB50 million for planning
to become the assignee of 80% equities in the project company owned by Singapore Great Land.
In June 2015, the use certificate of this land was issued. At present, all parties are discussing for
the procedures of transferring ownership. At present, Singapore to hold the equity of the project
company has transferred to lion king international investment co., LTD., shall be borne by the lion
king on international investment co., LTD. Of the equity transfer of obligations and has begun the
equity transfer procedures.
Note 7 inventories
1) Classification of inventories
Closing Balance Opening Balance
Items Book Balance Provision for Book Value Book Balance Provision for Book Value
Fall in Price Fall in Price
Raw
550,085.67 550,085.67 2,780,859.54 2,780,859.54
materials -
Low-value
consumption 354,012.90 354,012.90 355,982.90 355,982.90
goods: -
Finished
333,330.38 333,330.38 347,003.84 347,003.84
goods -
Constructing
development 42,701,132.90 17,439,325.19 25,261,807.71 42,701,132.90 17,439,325.19 25,261,807.71
product
Development
153,210,397.31 21,726,889.27 131,483,508.04 290,815,415.14 21,726,889.27 269,088,525.87
products
Consumptive
biological 33,627.19 33,627.19 33,627.19 33,627.19
assets -
Total 197,182,586.35 39,166,214.46 158,016,371.89 337,034,021.51 39,166,214.46 297,867,807.05
The closing book value of inventories used for the guarantee was RMB 4,824,035.45 yuan, the
details are set forth in Note 44
2) Provision for fall in price of inventories
Current Increase Current Decrease
Opening Closing
Categories Amount
Balance Amount Amount Balance
Other Written Other
Withdrawn Reversed
Off
Products
21,726,889.27 21,726,889.27
Developed
Constructing
development 17,439,325.19 17,439,325.19
product
Total 39,166,214.46 39,166,214.46
3) Description on capitalization of borrowing cost included in the closing balance of inventories
Current Decrease Capitalization rate
of capitalized
Name of Opening Current Closing
Decrease of Other amount
Inventory Balance Increase Balance
Sales Decrease confirmed in this
period (%)
Meilin Qingcheng
(Phase III) 15,212,376.71 - 11,314,634.08 636,000.00 3,261,742.63
Total
15,212,376.71 - 11,314,634.08 636,000.00 3,261,742.63
4) Development Cost
Estimated
Total Investment
Name of Project Starting Time Completion Closing Balance Opening Balance
Estimated
Time
Wuhan Meilin April 2013 June 2016 640,000,000.00 25,261,807.71 25,261,807.71
Estimated
Total Investment
Name of Project Starting Time Completion Closing Balance Opening Balance
Estimated
Time
Qingcheng
Hebei New
17,439,325.19 17,439,325.19
Residential Project
Total 640,000,000.00 42,701,132.90 42,701,132.90
Phase III of the subsidiary Meilin Qingcheng of Hubei Pearl River covers 18138 square meters of
land area and 73363 square meters of construction area. On December 5, 2016, Phase III of Meilin
Qingcheng has obtained a certificate of completion inspection and acceptance for the record and
start making a room formalities on December 7.
New Residential Project of the subsidiary Hebei Real Estate is located in Luoling Community,
located in Luquan City, Shijiazhuang City, covers 1000 acres of land area and about 1600000
square meters of construction area, it is planned to cover 400,000 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 Current Closing
Name of Project
Time Balance Increase Decrease Balance
Wuhan Meilin
August 2006 497,649.84 388,204.44 109,445.40
Qingcheng, Phase I
Wuhan Meilin September
7,117,653.91 7,117,653.91
Qingcheng, Phase II
Haikou Dijing Building, 6
In 1995 5,315,696.54 5,315,696.54
floors
Haikou Longzhu Building,
1,598,659.60 1,598,659.60
21 floors
Garage of Haikou PEARL
6,919,373.98 6,919,373.98
RIVER Square
Garage of Haikou
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
230,482,744.98 137,216,813.39 93,265,931.59
Qingcheng, Phase III
Total 65,330,786.48 137,605,017.83 153,210,397.31
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 14,411,010.8 8,714,139.07
Category and content Closing Balance Opening Balance
Total 14,411,010.8 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 Book Balance Impairment Book Value Book Balance Impairment Book Value
Provision Provision
Available-fo
r-sale
equity
instruments
:
Measured
at fair value
Measured
49,263,555.29 18,438,560.39 30,824,994.90 49,263,555.29 18,438,560.39 30,824,994.90
at the cost
Total 49,263,555.29 18,438,560.39 30,824,994.90 49,263,555.29 18,438,560.39 30,824,994.90
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 Book Balance
held in the
Investee Opening Current Current Closing
investee
(%) Balance Increase Decrease Balance
Hainan pearl river pipe pile co.,
1.33 426,315.00 426,315.00
LTD
Hainan province chamber of
6.67 500,000.00 500,000.00
commerce
China to promote science and
10.00 10,000,000.00 10,000,000.00
technology investment co., LTD
Hainan China pearl river basic
1.07 160,000.00 160,000.00
engineering co., LTD
Guangzhou pearl river
9.48 18,177,240.29 18,177,240.29
investment management co., LTD
HuaQing emerging construction
engineering management 20.00
(Beijing) co., LTD
Chongqing long jinbao network
13.559
technology co., LTD 20,000,000.00 20,000,000.00
Shenzhen fortis loan financial
20.00
services co., LTD
Total 49,263,555.29 49,263,555.29
Continued:
Impairment Provision
Current Cash
Investee Opening Current Current Closing Bonus
Balance Increase Decrease Balance
Hainan pearl river pipe pile co., LTD 426,315.00 426,315.00
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
engineering co., LTD 160,000.00 160,000.00
Guangzhou pearl river investment
7,352,245.39 7,352,245.39
management co., LTD
Hainan macun port harbor
company
HuaQing emerging construction
engineering management (Beijing)
co., LTD
Chongqing long jinbao network
technology co., LTD
Shenzhen fortis loan financial
services co., LTD
Total 18,438,560.39 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
Opening Investment Adjustment of
Investee Additional Contribution Results Other
Balance
Contribution Reduced Recognized by Comprehensive
Equity Method Income
1. Associated Enterprises
Sanya Wanjia Industry Co.,
Ltd. 32,393,800.55 - - -928,894.05
Beijing Viewpoint Discovery
Media Co., Ltd. 1,472,844.43 - - -166,478.37
Sub-total
33,866,644.98 - - -1,095,372.42
Total
33,866,644.98 - - -1,095,372.42
Continued:
Current Increase or Decrease
Declared to Closing Balance
Investee Change of Impairment Closing Balance of Impairment
grant cash
Other Provision Other Reserve
dividends or
Equities Withdrawn
profits
1. Associated Enterprises
Sanya Wanjia Industry Co.,
31,464,906.50
Ltd.
Current Increase or Decrease
Declared to Closing Balance
Investee Change of Impairment Closing Balance of Impairment
grant cash
Other Provision Other Reserve
dividends or
Equities Withdrawn
profits
Beijing Viewpoint Discovery
1,306,366.06
Media Co., Ltd.
Sub-total 32,771,272.56
Total 32,771,272.56
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
Houses and Construction in
Item Land Use Right Total
buildings Progress
1. Book Value
1.1 Opening Balance 31,531,031.71 31,531,031.71
- -
1.2 Current Increase
1.3 Current Decrease 4,830,941.70 4,830,941.70
- -
(1)Disposal 4,830,941.70 4,830,941.70
- -
1.4 Closing Balance 26,700,090.01 26,700,090.01
- -
2. Accumulative
Depreciation
(Amortization)
2.1 Opening Balance 9,205,051.50 9,205,051.50
- -
2.2 Current Increase 488,873.68 488,873.68
- -
( 1 ) Amount
Withdrawn or 488,873.68 488,873.68
- -
Amortized
2.3 Current Decrease 1,876,924.41 1,876,924.41
- -
(1)Disposal 1,876,924.41 1,876,924.41
- -
2.4 Closing Balance
7,817,000.77 - - 7,817,000.77
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
Houses and Construction in
Item Land Use Right Total
buildings Progress
3.4 Closing Balance 3,081,199.41 3,081,199.41
4. Book Value
4.1 Closing Book Value 15,801,889.83 15,801,889.83
- -
4.2 Opening Book
19,244,780.80 19,244,780.80
Value - -
2) Description on investment-based real estate
The closing book value of assets mortgaged was RMB6,232,449.23yuan, the details are set forth in
Note 44.
Note 12 Original value and depreciation of fixed assets
1) Information of fixed assets
Houses and Common Other
Item Transportation Total
buildings Equipments Equipments
1. Totality of
Original Book Value
1.1 Opening
252,105,519.76 21,500,871.50 30,069,143.44 28,573,990.22 332,249,524.92
Balance
1.2 Current
185,535.90 165,498.82 351,034.72
Increase - -
(1)Purchase 185,535.90 165,498.82 351,034.72
- -
(2)Transferred in
from Construction
in Progress
( 3 ) Other
Transfer-in
1.3 Current
172,569.84 258,979.00 431,548.84
Decrease - -
( 1 ) Disposal or
172,569.84 258,979.00 431,548.84
Scrap - -
( 2 ) Other
Transfer-out
1.4 Closing Balance 252,105,519.76 21,500,871.50 30,082,109.50 28,480,510.04 332,169,010.80
2. Accumulative
Depreciation
2.1 Opening
46,105,138.09 8,358,326.69 24,978,246.81 24,898,586.12 104,340,297.71
Balance
2.2 Current
Increase 4,663,993.85 997,730.58 1,102,734.96 780,670.21 7,545,129.60
( 1 ) Amount
Withdrawn 4,663,993.85 997,730.58 1,102,734.96 780,670.21 7,545,129.60
2.3 Current
Decrease - - 155,492.63 248,798.84 404,291.47
( 1 ) Disposal or
Scrap - - 155,492.63 248,798.84 404,291.47
( 2 ) Other
Transfer-out - - - - -
2.4 Closing Balance 50,769,131.94 9,356,057.27 25,925,489.14 25,430,457.49 111,481,135.84
3. Impairment
Reserve -
Houses and Common Other
Item Transportation Total
buildings Equipments Equipments
3.1 Opening
7,499,295.92 7,499,295.92
Balance
3.2 Current
Increase - - - - -
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
193,837,091.90 12,144,814.23 4,156,620.36 3,050,052.55 213,188,579.04
Value
4.2 Opening Book
198,501,085.75 13,142,544.81 5,090,896.63 3,675,404.10 220,409,931.29
Value
2) Other descriptions on fixed assets
(1) The closing book value of assets used for the guarantee was RMB3,076,944.63yuan, the
details are set forth in Note 44.
(2) The closing original value of fixed assets that continued to work after being depreciated
fully was RMB51,642,081.97yuan.
Note 13 Construction in progress
1) Information of construction in progress
Closing Balance Opening Balance
Item Book Impairmen Book Book Impairmen Book
Balance t Reserve Value Balance t Reserve Value
Snow Town
5,648,964.09 3,000,000.00 2,648,964.09 5,648,964.09 3,000,000.00 2,648,964.09
Train 550
Snow Town
4,180,000.00 2,000,000.00 2,180,000.00 4,180,000.00 2,000,000.00 2,180,000.00
Train 400
Early Stage of
360,000.00 360,000.00 360,000.00 360,000.00
Snow Town - -
Snow Town
Integrated 73,672,948.93 73,672,948.93 73,340,730.93 73,340,730.93
Service Center - -
Total 83,861,913.02 5,360,000.00 78,501,913.02 83,529,695.02 5,360,000.00 78,169,695.02
2) Current change of important constructions in progress
Current
amount
Opening Current
Item transferred Other Decrease Closing Balance
Balance Increase
into fixed
assets
Snow Town
Integrated Service 73,340,730.93 332,218.00 73,672,948.93
Center - -
Total 73,340,730.93 332,218.00 73,672,948.93
- -
Continued:
Ratio of
Budget investment Including: Current
Progress of Accumulative
(10 in the Current Capitalization Sources of
Item Constructio Interest
thousan constructio Interest Rate of Funds
n (%) Capitalized
d yuan) n in the Capitalized Interest (%)
budget (%)
Snow Town
Integrated 10,605.84 69.46 13,567,288.74
Service Center
Total 10,605.84 69.46 —— 13,567,288.74
Note 14Intangible Assets
1) Information of intangible assets
Trademark
Item Software Land Use Right Other Total
Right
1. Totality of
Original Book Value
1.1 Opening
1,448,739.53 3,827,129.21 93,900.00 911,400.00 6,281,168.74
Balance
1.2 Current
8,800.00 8,800.00
Increase - - -
(1)Purchase 8,800.00 8,800.00
- - -
1.3 Current
Decrease - - - - -
1.4 Other Decrease 1,457,539.53 3,827,129.21 93,900.00 911,400.00 6,289,968.74
1.5Closing Balance
-
2. Accumulative
Depreciation
2.1 Opening
1,163,972.34 489,408.80 24,257.50 1,677,638.64
Balance -
2.2 Current
36,564.90 40,104.90 4,695.00 81,364.80
Increase -
( 1 ) Amount
36,564.90 40,104.90 4,695.00 81,364.80
Withdrawn -
2.3 Current
Decrease - - - - -
2.4 Other Decrease
-
2.5 Closing Balance 1,200,537.24 529,513.70 28,952.50 1,759,003.44
-
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
Trademark
Item Software Land Use Right Other Total
Right
4.1 Closing Book
Value 257,002.29 3,297,615.51 64,947.50 - 3,619,565.30
4.2 Opening Book
Value 284,767.19 3,337,720.41 69,642.50 - 3,692,130.10
Note 15Long-term deferred expenses
Opening Current Current Other Closing
Item
Balance Increase Amortization Decrease Balance
Decoration and Reform 733,485.03 216,255.60 517,229.43
- -
Lease of Snow Park 300,000.00 300,000.00
- - -
Snow publicity expenses
5,133.53 5,133.53
- - 0.00
Snow fish pond royalties
266,059.02 139,413.00 126,646.02
- -
Snow ski resort fee
429,285.31 189,609.96 239,675.35
- -
L. chinensis mountain facilities
fee 230,000.00 60,000.00 170,000.00
- -
Erlong studio amusement
facilities fee 120,000.00 60,000.00 60,000.00
- -
Total 2,083,962.89 970,412.09 1,113,550.80
- -
Note 16 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
19,941,945.99 4,985,486.50
income is expected to 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 its 2,391,587.72 597,896.93 2,391,587.72 597,896.93
carrying amount of the net
assets recognized by the
Closing Balance Opening Balance
Item Taxable Temporary Deferred Tax Taxable Temporary Deferred Tax
Differences Liabilities Differences Liabilities
business combination
Total 2,391,587.72 597,896.93 2,391,587.72 597,896.93
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
set-off deferred balance of deferred and liabilities at the the beginning of
Item
income tax assets income tax assets or beginning of the deferred income tax
and liabilities liabilities amount of set-off assets and liabilities
Deferred Tax Assets 4,985,486.50
Deferred Tax Liabilities 597,896.93 597,896.93
4) Unconfirmed deferred income tax assets detail the deductible temporary differences
Item Closing Balance Opening Balance
Asset impairment loss 244,608,883.23 248,748,431.39
Deductible losses 192,055,060.47 212,595,502.92
Total 436,663,943.70 461,343,934.31
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
2017 21,814,360.45 42,354,802.90
2018 52,373,550.83 52,373,550.83
2019 45,704,368.46 45,704,368.46
2020 45,826,297.05 45,826,297.05
2021 26,336,483.68 26,336,483.68
合 计 192,055,060.47 212,595,502.92
Note 17Other 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 June 30, 2017.
Note 18Provision of asset impairment
Closing
Current Increase Current Decrease
Balance
Opening
Item Current
Balance Current Current Current
Transfer-ou
Withdrawal Transfer-in Reverse
t
Bad debt provision
174,291,761.21 1,516,307.63 - 5,655,855.79 - 170,152,213.05
Provision for decline in value of
inventories 39,166,214.46 - - - - 39,166,214.46
Provision for impairment of
available-for-sale financial assets 18,438,560.39 - - - - 18,438,560.39
Provision for impairment of
investment-based real estate 3,081,199.41 - - - - 3,081,199.41
Provision for impairment of
fixed assets 7,499,295.92 - - - - 7,499,295.92
Provision for impairment of
construction in progress 5,360,000.00 - - - - 5,360,000.00
Provision for impairment of
intangible assets 911,400.00 - - - - 911,400.00
Total
248,748,431.39 1,516,307.63 - 5,655,855.79 - 244,608,883.23
Note 19Accounts Payable
Item Closing Balance Opening Balance
Accounts Payable for the
54,020,418.10 64,695,314.44
Construction
Accounts Payable for the Materials 6,593,171.80 6,403,644.98
Investment not paying 5,000,000.00 5,000,000.00
The deposit 1,205,232.30 1,528,008.58
Other 7,693.51 37.61
Total 66,826,515.71 77,627,005.61
Significant accounts payable with aging of more than one year
Name Closing Balance Reasons of Outstanding Accounts
Snow deiss hotel buy the balance
Lin Deying, guan-wen Chen 5,000,000.00
payment
Hainan pearl river industrial
engineering construction 3,572,235.33 Money is tight
supervision company
Mudanjiang Long Yang boiler
1,425,651.00 Money is tight
installation co., LTD
Total 9,997,886.33
Note 20Accounts Received in Advance
1) Information of accounts received in advance
Item Closing Balance Opening Balance
Lease of Garage 27,288,955.50 26,697,103.84
Heating - 1,673,048.13
Cooperative Operation 35,382.03 2,487,649.01
Pre-deposit for Consumption 659,368.63 1,317,010.23
Property Management 19,318,276.01 16,857,732.88
Supporting of Heating Facilities 174,789.00 174,789.00
Houses in Pre-sell 183,368,166.00 316,499,198.66
Other 41,786.41 40,336.41
Total 230,886,723.58 365,746,868.16
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 27,288,955.50 be transferred in (Hubei PEARL RIVER received
the rent in advance)
Total 27,288,955.50
Note 21 Remunerations payable for employees
1) List of remunerations payable for employees
Opening Current Other Closing
Item Current Increase
Balance Decrease reductions Balance
Short-term Wage 12,237,780.42 110,348,589.72 109,387,183.53 13,199,186.61
Post-employment
Benefit - Defined
Contribution Plans - 6,936,500.47 6,936,500.47 -
Payable
Dismiss Welfare 155,035.87 121,870.30 172,381.34 104,524.83
Total 12,392,816.29 117,406,960.49 116,496,065.34 13,303,711.44
2) List of Short-term Wage
Opening Current Current Other Closing
Item
Balance Increase Decrease reductions Balance
Salary, Reward,
2,624,422.78 99,490,263.03 99,226,008.85 2,888,676.96
Allowance and Subsidy
Employee Services and
4,373,409.14 4,373,409.14
Benefits -
Social Insurance Charges 3,491,656.04 3,491,656.04
- -
Including:Basic Medical
3,049,618.58 3,049,618.58
Insurance - -
Employment Injury
195,705.66 195,705.66
Insurance - -
Maternity Insurance 232,518.52 232,518.52
Opening Current Current Other Closing
Item
Balance Increase Decrease reductions Balance
- -
Other 13,813.28 13,813.28
- -
Housing Fund 26,300.40 1,003,496.10 1,029,796.50
-
Union Funds and Staff
9,587,057.24 1,989,765.41 1,266,313.00 10,310,509.65
Training Expense
Total 12,237,780.42 110,348,589.72 109,387,183.53 13,199,186.61
3) List of Defined Contribution Plans
Item Opening Balance Current Increase Current Decrease Closing Balance
Basic Endowment Insurance 6,720,336.16 6,720,336.16
- -
Unemployment Insurance 216,164.31 216,164.31
- -
Total 6,936,500.47 6,936,500.47
- -
Note 22 axes Payable
Item Closing Balance Opening Balance
VAT 696,501.06 601,975.02
Business tax 1,037,501.70 1,037,501.70
Urban maintenance and
193,848.31 222,121.34
construction tax
corporate income tax 166,941.28 51,998,909.07
property tax 620,853.31 586,772.39
land holding tax 5,349.84 65,717.04
Land value - added tax 40,291,508.75 29,383,815.46
Personal Income Tax 139,316.63 380,075.07
Education surcharge 53,627.67 60,702.24
other 249,901.81 67,300.94
Total 43,455,350.36 84,404,890.27
Note: the balance of land value added tax is mainly the land value added tax of the subsidiary of
the subsidiary of hubei real estate merrill lynch.
Note 23Interest Payable
Item Closing Balance Opening Balance
Enterprise loan interest 74,044,695.35 75,668,828.87
Entrust loan interest 10,449,888.49 10,449,888.49
Other interest 176,133.00 176,133.00
Total 84,670,716.84 86,294,850.36
Note 24 Dividends Payable
Reasons why not to be
Item Closing Balance Opening Balance
paid over one year
Dividends payable for the legal person 3,213,302.88 3,213,302.88 Suspend payment
Total 3,213,302.88 3,213,302.88
Note 25 Other Payables
1) Other payables presented as per the nature of accounts
Nature of Account Closing Balance Opening Balance
Borrowing 491,987,919.32 353,508,342.24
Payment for land transfer 43,000,000.00
-
Collection for property management 22,404,362.60 46,986,947.42
Money owned by the suppliers 43,499,279.07 47,024,723.13
Accrued Expenses 7,218,926.06 7,394,338.41
Deposit for Quality of Decoration 10,317,063.21 7,773,945.21
Maintenance Fund 5,084,849.49 9,566,749.16
Funds Raised for Houses 2,270,000.00 150,000.00
Risk Funds of Employees 1,233,332.51 1,057,677.88
Working Fund of Water and Electricity 7,204,250.70 6,781,072.84
Deferred compensation 1,140,466.00
Others 14,973,396.63 17,439,544.01
Total 606,193,379.59 541,823,806.30
2) Significant other payables with aging of more than one year
Reasons of Outstanding
Name Closing Balance
Accounts
Beijing Xinxing Real Estate Development Loan is not due
84,778,095.18
Corporation
Xinhe (zhengzhou) real estate co. LTD 18,740,795.93 Electricity and collection
Shanghai frost Xiong Investment Loan is not due
Management Center (limited 17,998,000.00
partnership)
Sanya wanjia hotel management co. LTD 11,404,670.60 No settlement
Mudanjiang construction engineering Financial tension
7,000,000.00
group co. LTD
Dahailin forestry bureau 6,842,000.00 Financial tension
Haikou drainage collection 4,646,827.79 Handling of sewage charges
Total 151,410,389.50
Note 26 Non-current liabilities matured within one year
Item Closing Balance Opening Balance
Long-term Borrowing Matured Within 78,710,181.59
One Year
Including:Pledged Loan
Item Closing Balance Opening Balance
Mortgage Loan 15,000,000.00
Guaranteed Loan 63,710,181.59
Total 78,710,181.59
Note 27 Long-term Borrowing
1) Classification of long-term borrowing
Category Closing Balance Opening Balance
Pledged Loan 5,000,000.00 5,000,000.00
Mortgage Loan 24,000,000.00
-
Guaranteed Loan 123,376,848.25
-
Sub-total 5,000,000.00 152,376,848.25
Less : Long-term Borrowing Matured
78,710,181.59
Within One Year -
Total 5,000,000.00 73,666,666.66
2) Long-term borrowings with large amount
Starting Ending
Closing Opening
Lender Date of Date of Currency Interest Rate
Balance Balance
Borrowing Borrowing
The benchmark
Harbin Branch of China CITIC
2014-10-30 2019-3-30 RMB interest rate has a 24,000,000.00
Bank
float by 10%
Mudanjian Taiping Road The benchmark
Branch of Industrial & 2014-3-28 2020-3-20 RMB interest rate has a
81,456,595.19
Commercial Bank of China float by 10%
The benchmark
Mudanjiang Branch of China
2012-1-12 2019-1-11 RMB interest rate has a 41,920,253.06
Construction Bank
float by 10%
The benchmark
Wuhan Branch of Shanghai
2015-6-24 2018-6-23 RMB interest rate has a 5,000,000.00 5,000,000.00
Pudong Development Bank
float by 20%
Total 5,000,000.00 152,376,848.25
3) Pledged Loan:
Lender Balance of Loan Pledge
Shanghai Pudong Development The 5 million deposit are subsidiary of Hubei Pearl River
5,000,000.00
Bank Co., Ltd. Wuhan Branch Real Estate Development Co., Ltd
Total 5,000,000.00
e Company, the collateral is cash deposit of RMB 5 million of the Hubei Real Estate Company.
4) Other descriptions on long-term borrowing
The long-term borrowing rate was 5.39% to 5.9%. As of the financial reporting date, the loans of
the Harbin branch of citic bank, the bank of China industrial and commercial bank of China and
the bank of mudanjiang branch of construction bank have been paid off.
Note 28 Capital stock
Current Increase(+)or Decrease(-)
Issuance Bonus
Opening Capitalization Closing
Item
Balance of New Share of Public Other Sub-total Balance
Reserve Fund
Shares s
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 - - - -25,631.00 -25,631.00 1,299,500.00
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 -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 - - - -25,631.00 -25,631.00 1,299,500.00
limited to sell
2 . Outstanding shares
without conditions limited
to sell
(1) Common Share in RMB 360,445,273.00 25,631.00 25,631.00 360,470,904.00
(2) Foreign Shares Listed at
64,975,000.00 64,975,000.00
Home
(3) Foreign Shares Listed at
Oversea
(4) Others
Total shares without
425,420,273.00 - -- - 25,631.00 25,631.00 425,445,904.00
conditions limited to sell
Total 426,745,404.00 - - - - - 426,745,404.00
Note 29 Capital reserve
Current Current
Item Opening Balance Closing Balance
Increase Decrease
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
Current Current
Item Opening Balance Closing Balance
Increase Decrease
Total 543,615,438.94 543,615,438.94
Note 30 Surplus Reserve
Item Opening Balance Current Increase Current Decrease Closing Balance
Statutory surplus
71,852,236.46 71,852,236.46
reserve
General surplus
37,634,827.93 37,634,827.93
reserve
Total 109,487,064.39 109,487,064.39
Note 31 Undistributed profits
Ratio of Withdrawal or
Item Amount
Undistributed Amount (%)
Undistributed Profits at the End of Previous Period
—
Before Adjustment -1,014,759,604.45
Total Amount of Undistributed Profits at the
—
Beginning of Adjustment Period (+/-)
Undistributed Profits at the Beginning of Period
—
After Adjustment -1,014,759,604.45
Plus: Current Net Profits Attributive to the Owners
—
of the Parent Company 17,226,146.52
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 -997,533,457.93
Note 32Operating income and operating cost
1) Operating income and operating cost
Item Current Amount Previous Amount
Income Cost Income Cost
Main Business 380,199,673.96 283,157,510.17 139,890,677.66 119,343,421.77
Other Business 13,637,111.61 5,444,513.85 9,141,850.74 2,686,504.22
Total 393,836,785.57 288,602,024.02 149,032,528.40 122,029,925.99
2) Main Business(Accounted as per Industries)
Current Amount Previous Amount
Industry
Operating Income Operating Cost Operating Income Operating Cost
Real Estate
Development 225,675,181.93 137,605,017.83 - -
Property
Management 147,212,684.42 142,317,526.88 118,897,725.42 108,945,720.20
Current Amount Previous Amount
Industry
Operating Income Operating Cost Operating Income Operating Cost
Tourist Hotel
7,311,807.61 3,234,965.46 20,992,952.24 10,397,701.57
Total
380,199,673.96 283,157,510.17 139,890,677.66 119,343,421.77
3) Main Business(Accounted as per Regions)
Current Amount Previous Amount
Region
Operating Income Operating Cost Operating Income Operating Cost
Hainan
145,542,234.96 141,134,119.14 129,263,957.43 114,904,019.82
Heilongjiang
6,949,447.43 2,995,608.34 8,258,678.00 3,126,864.51
Hubei
226,037,542.11 137,844,374.95 570,446.04 385,963.46
Shanghai
1,670,449.46 1,183,407.74 1,797,596.19 926,573.98
Total
380,199,673.96 283,157,510.17 139,890,677.66 119,343,421.77
Note 33 Business tax and surcharges
Item Current Amount Previous Amount
Business Tax - 5,376,975.72
Urban
Maintenance &
Construction Tax 1,286,031.12 442,857.90
Education
Surcharges 869,796.78 253,712.29
Increment Tax on
Land Value 14,045,896.99 4,205,515.05
Other Taxes 323,020.34 126,862.61
Total 16,524,745.23 10,405,923.57
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 34 Selling expenses
Item Current Amount Previous Amount
Employees’ Wages 651,115.08 405,220.67
Advertisement 562,182.00 1,392,667.57
Repair 49,000.00 140,530.00
Selling Service 4,910,000.00 6,690,000.00
Others 425,910.28 242,582.78
Total 6,598,207.36 8,871,001.02
Note 35 Administrative expenses
Item Current Amount Previous Amount
Employees’ Wages
19,764,096.35 13,206,958.52
Depreciation
7,073,122.82 14,189,830.37
Business Entertainment
1,410,828.86 2,728,763.69
Business Travel
1,165,859.09 1,526,947.44
Tax
1,793,692.10
Amortization of Intangible Assets
1,051,776.89 2,602,040.00
Repair
440,517.23 328,378.88
Insurance
706,117.18 817,666.46
Consultation fee, service charge, audit fee 11,222,874.99 2,343,637.99
Traffic
536,146.30 2,153,757.83
Office
211,066.64 413,401.22
Property management, utilities, heating fee
1,523,212.00 1,820,962.03
Lease
2,843,565.44
Other
1,092,468.10 1,300,105.17
Total 49,041,651.89 45,226,141.70
Note 36Financial expenses
Category Current Amount Previous Amount
Interest Expense 7,671,493.40 45,230,435.59
Less: Interest Income 1,330,070.14 3,616,128.15
Financial Consultant 773,584.91
Financing Expenses 6,800,478.63
-
Others 263,074.63 377,028.65
Category Current Amount Previous Amount
Total 7,378,082.80 48,791,814.72
Note 37 Loss on assets impairment
Item Current Amount Previous Amount
Loss on Bad Debts -4,139,548.16 7,219,276.66
Loss of Impairment of Construction in Progress
- 776,000.00
Loss on available - for - sale financial assets -6,000,000.00
-
Total -4,139,548.16 1,995,276.66
Note 38 Investment income
1) Details of investment income
Item Current Amount Previous Amount
Long - term equity investment income from equity
-1,095,372.42 -234,924.26
method
Disposal of long-term equity investment generated
investment income 38,155,550.74
-
other
- 8,271.82
Total -1,095,372.42 37,928,898.30
Note 39 Non-operating income
Amount Recorded in
Item Current Amount Previous Amount Current Extraordinary
Gain and Loss
Total Gain on the Disposal of
Non-current Assets 168,799.75 2,555,707.19 168,799.75
Including: Gain on the Disposal of
Fixed Assets 168,799.75 2,462,319.87 168,799.75
Gain on the Disposal of Intangible
Assets - 93,387.32 -
Others
454,491.09 95,785.15 454,491.09
Total
623,290.84 2,651,492.34 623,290.84
Note 40 Non-operating cost
Amount Recorded in
Item Current Amount Previous Amount Current Extraordinary
Gain and Loss
Loss on disposal of non - current
assets 19,264.12 131,916.10 19,264.12
Among them: loss of fixed assets
disposal 19,264.12 131,916.10 19,264.12
Amount Recorded in
Item Current Amount Previous Amount Current Extraordinary
Gain and Loss
Asset scrapped, loss of damage
- 2,456,199.23 -
Compensation, liquidated damages
Donations 852,793.17 569,746.62 852,793.17
othes
745,370.78 120,516.82 745,370.78
Total
1,617,428.07 3,278,378.77 1,617,428.07
Note 41 Income tax expenses
1) List of income tax expenses
Item Current Amount Previous Amount
Current Income Tax Expenses 2,216,183.83 199,363.38
Deferred Income Tax Expenses 4,985,486.50 -15,665.42
Total 7,201,670.33 183,697.96
2) Accounting profits and adjustment process of the income tax expenses
Item Current Amount
Total Profits 27,742,112.78
Income Tax Expenses Calculated at the Statutory/Applicable Tax Rate 6,935,528.20
Influence of Adjustment of Previous Income Tax
Influence of the Non-deducible Cost, Expense and Loss 2,419,787.22
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 Current Deferred Income Tax Assets Not Recognized -7,329,732.09
Recognition of Deferred Tax Assets of Previous Deducible Loss
Other 5,176,087.00
Income Tax Expenses 7,201,670.33
Note 42 Notes to cash flow statement
1) Other cash received relating to operating activities
Item Current Amount Previous Amount
Received payment from Beijing runshun
technology development co., LTD 15,000,000.00
Received from Beijing yuanrongtong asset
management co., LTD 12,300,000.00
I received the payment from li peng
11,500,000.00
Received from Beijing emerging real estate
development corporation 7,160,000.00
I received the money from the yayxuyi stack
Item Current Amount Previous Amount
scenic spot in the changting town of hailin 1,237,761.89
Received cheng shuxian exchange
300,000.00
Received from Chen jilin
100,000.00
Other exchanges
441,203.98 3,400,000.00
To collect and renovate the rent, maintenance
fund and customer's fees and tax 3,035,457.52 3,500,000.00
Collect water and electricity, garbage disposal,
heating gas, TV viewing fee, etc 1,472,647.25 5,502,810.13
Other
955,049.71 2,239,331.59
Total
28,064,358.46 40,079,903.61
2) Other cash paid relating to operating activities
Item Current Amount Previous Amount
To return the land transfer intention gold of
wuhan middle China century real estate
development co., LTD 43,000,000.00
Pay Beijing yuanrongtong asset management
co., LTD 11,948,840.00
Beijing emerging real estate development
corporation 6,800,000.00
Other related parties
962,345.10
Payment of huiyu payment in shandong
3,000,000.00
Pay Ms. Cheng shuxian
300,000.00
Pay for water and electricity renovation and
rent deposit, maintenance fund and customer
handling fees and tax payment 7,216,742.86
Payment of deferred housing penalty and area
difference 2,149,096.00
We will pay for water and electricity, garbage
disposal, heating gas and TV viewing fee 348,816.16
Overhead expenses
20,346,084.13 4,533,549.75
Other daily expenses and spare cash
2,665,652.99 2,739,887.76
other
727,221.85 625,730.16
Total
84,215,959.09 23,148,007.67
3) Other cash received relating to investment activities
Item Current Amount Previous Amount
Received funds for occupation 49,136.10
Total 49,136.10
4) Payment of other cash related to financing activities
Item Current Amount Previous Amount
Disposal of cash outflows from subsidiaries 123,352.41
Total 123,352.41
5、Payment of other cash related to financing activities
Item Current Amount Previous Amount
Pay the financial consultant fee
1,720,000.00
Payment of financing service fee
4,302,704.04
Total
1,720,000.00 4,302,704.04
Note 43 Supplementary information of cash flow statement
1) Supplementary information of cash flow statement
Item Current Amount Previous Amount
1. Cash Flow to Adjust the Net Profit into the Operating
Activities
Net Profit
20,540,442.45 -51,169,241.35
Plus: Provision for Asset Impairment
-4,139,548.16 1,995,276.66
Depreciation of Fixed Assets, Consumption of Oil and Gas
Assets and Depreciation of Productive Biological Assets 8,034,003.28 15,164,316.52
Amortization of Intangible Assets
81,364.80 559,669.98
Amortization of Long-term Deferred Expenses
970,412.09 2,142,700.22
Loss on the Disposal of Fixed Assets, Intangible Assets and
Other Long-term Assets (Income is Marked as “-”) -5,636,646.05 -3,224,684.28
Loss on the Discarding of Fixed Assets (Income is
Marked as “-”) 1,108.20 2,500,181.85
Loss on the Variation of Fair Value (Income is Marked as
“-”) - -
Financial Expenses (Income is Marked as “-”)
6,150,568.35 48,936,433.19
Investment Loss (Income is Marked as “-”)
1,095,372.42 -37,928,898.30
Decrease in Deferred Income Tax Assets (Increase is
Marked as “-”) 4,985,486.50 -
Increase in Deferred Income Tax Liabilities (Decrease is
Marked as “-”) - -15,665.42
Decrease in Inventory (Increase is Marked as “-”)
139,851,435.16 -102,163,618.46
Decrease in Operating Items Receivable (Increase is
Marked as “-”) 7,014,675.01 -114,889,161.41
Increase in Operating Items Payable (Decrease is Marked
as “-”) -248,678,884.07 399,438,256.34
Item Current Amount Previous Amount
Other
- -
Net Cash Flow from Operating Activities
-69,730,210.02 161,345,565.54
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
167,840,121.26 143,110,210.79
Less: Opening Balance of the Cash
246,504,351.39 205,762,131.54
Plus: Closing Balance of the Cash Equivalent
- -
Less: Opening Balance of the Cash Equivalent
- -
Net Increase of Cash and Cash Equivalent
-78,664,230.13 -62,651,920.75
2) Composition of cash and cash equivalent
Item Closing Balance Opening Balance
1. Cash
162,840,121.26 241,504,351.39
1.1 Cash in Stock
786,233.90 1,305,777.52
Bank Deposit Available for Immediate Payment
162,045,485.08 240,190,186.44
Other Currency Available for Immediate Payment
8,402.28 8,387.43
2. Cash Equivalent
Including: Bond Investment Maturing Within Three
Months
3. Balance of Closing Cash and Cash Equivalent
162,840,121.26 241,504,351.39
Including: Restricted Cash and Cash Equivalent Used by
the Subsidiaries of the Parent Company or the Group
Note 44Assets with restriction on ownership or use right
Item Balance Reason of Restriction
Currency Funds 5,000,000.00 Borrowing on Mortgage
Inventories 4,824,035.45 Borrowing on Mortgage
Investment-based Borrowing on Mortgage
6,232,449.23
Real Estate
Fixed Assets 3,076,944.63 Borrowing on Mortgage
Total 19,133,429.31
VII. Merge scope change
The merger scope has not changed during this reporting period
VIII. Equities in other entities
1) Equities in the subsidiary
(1) Composition of the Company
Equity interest
Place of Place of Nature of held (%) Accounting
Company name
operation registration business Indirec method
Direct
t
Hainan Pearl River Property
Property Hotel Hainan,
Hainan Haikou managemen 98.00 set-up
Management Co., Ltd Zhengzhou
t
Hainan Pearl River Property
Greening Engineering 100.0
Hainan Haikou Hainan Haikou managemen set-up
Co., Ltd
t
Hainan Pearl River Property
Property Cleaning Co., 100.0
Hainan Haikou Hainan Haikou managemen set-up
Ltd
t
Hainan Pearl River Property
Property Electrical and
Hainan Haikou Hainan Haikou managemen 100.00 set-up
Mechanical Engineering
Company t
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
Mudanjiang Wanjia Star combination
Mudanjiang Mudanjiang Hotel 100.00
Hotel Co., Ltd s involving
enterprises
Equity interest
Place of Place of Nature of held (%) Accounting
Company name
operation registration business Indirec method
Direct
t
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
Property
Shanghai Pearl Property
Shanghai Shanghai managemen 50.00 set-up
Management Co., Ltd
t
(2)ant non-wholly-owned subsidiaries
Current P/L Current Closing
Proportion
attributable to dividend balance of
Company name of Note
minority payements to minority
minority(%)
shareholders minority interest
Hainan Pearl River Properties and
Hotels
Management Co., Ltd. -29,941.85 118,777.80
Hubei Pearl River Real Estate
10.8
Development Co., Ltd. 4,468,420.17 9,180,000.00 14,343,892.07
Hebei Zhengshi Qinghui Real
Estate Development Co., Ltd. -1,132,972.17 -24,751,387.76
Shanghai Sea Pearl Property
Management Co., Ltd. 8,789.78 326,061.06
Total -----
3,314,295.93 9,180,000.00 -9,962,656.83
(3)Main Financial Information of the Significant Non-wholly-owned Subsidiaries
Closing balance
Company
name Non-current Current Non-current Total
Current assets Total assets
assets liabilities liabilities liabilities
Hainan Pearl
River
Properties
102,078,910.95 3,009,653.45 105,088,564.40 99,149,674.50 99,149,674.50
and Hotels
Managemen
t Co., Ltd.
Hubei Pearl
River Real
Estate 422,470,230.16 10,487,341.26 432,957,571.42 295,147,842.52 5,000,000.00 300,147,842.52
Developmen
t Co., Ltd.
Hebei
Zhengshi
Qinghui Real
4,376.10 103,106.04 107,482.14 50,620,518.39 50,620,518.39
Estate
Developmen
t Co., Ltd.
Shanghai 2,804,641.19 10,454.52 2,815,095.71 2,162,973.60 2,162,973.60
Closing balance
Company
name Non-current Current Non-current Total
Current assets Total assets
assets liabilities liabilities liabilities
Sea Pearl
Property
Managem
ent Co.,
Ltd.
Continued:
Opening balance
Company
name Non-current Current Non-current Total
Current assets Total assets
assets liabilities liabilities liabilities
Hainan Pearl
River
Properties
100,602,853.49 3,206,886.08 103,809,739.57 96,373,756.84 96,373,756.84
and Hotels
Managemen
t Co., Ltd.
Hubei Pearl
River Real
Estate 936,796,523.40 15,943,287.84 952,739,811.24 771,305,685.50 5,000,000.00 776,305,685.50
Developmen
t Co., Ltd.
Hebei
Zhengshi
Qinghui Real
5,439.60 107,189.63 112,629.23 48,313,477.37 48,313,477.37
Estate
Developmen
t 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
Managemen
t Co., Ltd.
Continued:
Closing balance
Company name Total
Net cash flows from
Operating income Net profit comprehensive
investing activities
income
Hainan Pearl River Properties and
Hotels
Management Co., Ltd. 145,542,234.96 -1,497,092.83 -1,497,092.83 552,082.24
Hubei Pearl River Real Estate
Development Co., Ltd. 226,838,984.15 41,375,603.16 41,375,603.16 -39,220,031.55
Hebei Zhengshi Qinghui Real Estate
Development Co., Ltd. -2,312,188.11 -2,312,188.11 -1,063.50
Shanghai Sea Pearl Property
Management Co., Ltd. 1,670,449.46 17,579.56 17,579.56 -151,716.93
Continued:
Opening balance
Company name Total Net cash flows
Operating
Net profit comprehensive from investing
income
income activities
Opening balance
Company name Total Net cash flows
Operating
Net profit comprehensive from investing
income
income activities
Hainan Pearl River Properties and
Hotels
Management Co., Ltd. 117,100,129.23 -304,098.01 -304,098.01 -16,640,735.33
Hubei Pearl River Real Estate
Development Co., Ltd. 957,519.04 -12,948,342.22 -12,948,342.22 118,558,721.37
Hebei Zhengshi Qinghui Real Estate
Development Co., Ltd. -2,590,547.57 -2,590,547.57 -70,898.18
Shanghai Sea Pearl Property
Management Co., Ltd. 1,797,596.19 471,514.49 471,514.49 661,708.32
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
Nature
Plac of held (%)
re Accounti
Name e of bu
gistrati ng method
operation siness Dir Dir
on
ect ect
Real
Sanya Wanjia Industrial equity
estate
Sanya Sanya
Co. Ltd develop method
ment
(2) Main financial information of significant cooperative enterprises
Closing balance Opening balance
Item Sanya Wanjia Industrial Sanya Wanjia Industrial
Co. Ltd Co. Ltd
Current asset 4,354,532.36 4,215,581.28
Non-current asset 76,699,398.26 78,410,198.72
Total asset 81,053,930.62 82,625,780.00
Closing balance Opening balance
Item Sanya Wanjia Industrial Sanya Wanjia Industrial
Co. Ltd Co. Ltd
Current liability 2,391,664.36 1,641,278.62
Non-current liability
Total liability 2,391,664.36 1,641,278.62
Minority interests
Equity attributable to parent company 78,662,266.26 80,984,501.38
Net assets share calculated according to proportion
31,464,906.50 32,393,800.55
of shareholding
Net book value of the equity investment in
31,464,906.50 32,393,800.55
associates
Continued:
Year 2017 Year 2016
Item Sanya Wanjia Industrial Sanya Wanjia Industrial
Co. Ltd Co. Ltd
Operating income 19,796.10 17766.67
Net profit -2,322,235.12 -398,138.81
Other comprehensive income
Total comprehensive income -2,322,235.12 -398,138.81
(3) Summary of financial information of insignificant cooperative enterprises or associated
enterprises
Item 31 December 2014/ Year 2014 31 December 2013/ Year 2013
Net book value of the equity investment
1,306,366.06 1,472,844.43
in associates
calculated according to proportion of
—
shareholding:
Net profit -166,478.37 -75,668.74
Other comprehensive income
Total comprehensive income -166,478.37 -75,668.74
(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.
As at 30June 2017, the financial assets and liabilities of the Company are analyzed by their maturity date below at
their undiscounted contractual cash flows :
30 Juner 2017
Item Net book Carrying Over
Within 1year 1 to 2 years 2 to 5 years
value amount 5years
Currency Funds 167,840,121.26 167,840,121.26 167,840,121.26
Accounts
receivable 20,229,593.44 33,138,454.97 33,138,454.97
Other receivables 300,245,043.39 450,438,233.91 450,438,233.91
30 Juner 2017
Item Net book Carrying Over
Within 1year 1 to 2 years 2 to 5 years
value amount 5years
Available-for-sale
financial assets 30,824,994.90 49,263,555.29 49,263,555.29
Subtotal 519,139,752.99 700,680,365.43 700,680,365.43
Accounts payable 66,826,515.71 66,826,515.71 66,826,515.71
Other payables 606,193,379.59 606,193,379.59 606,193,379.59
Long-term
borrowings 5,000,000.00 5,000,000.00 5,000,000.00
Subtotal 678,019,895.30 678,019,895.30 678,019,895.30
Continued:
31 December 2016
Over
Item Carrying
Net book value Within 1year 1 to 2 years 2 to 5 years
amount
years
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-fo
r-sale
financial
assets 30,824,994.90 49,263,555.29 49,263,555.29
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
borrowings 152,376,848.25 152,376,848.25 78,710,181.59 37,666,666.64 36,000,000.02
Subtotal 771,827,660.16 771,827,660.16 698,160,993.50 37,666,666.64 36,000,000.02
3) Market risk
(1) Risk from exchange rate
None.
(2) Interest rate risk
The Company's interest rate risk arises from the borrowings from bank. Financial liabilities issued
at floating rates expose the Company to cash flow interest rate risk. The Company determines the
relative proportions of its fixed rate and floating rate contracts depending on the prevailing
market conditions.
For the year ended 30 June2017, the amount of interest rates contract on the floating rate for
long-term borrowings amounted to RMB184,000,000.00, the amount of interest rates contract on
the fixed rate for long-term borrowings amounted to RMB245,590,202.29.
X. Fair Value
1) Financial instruments measured at fair value
There is no financial instrument measured at fair value in the Company
2) Financial instruments measured at fair value at the end of report period
There is no financial instrument measured at fair value at the end of report period
3) Basis of determination of market price for the items measured at fair value
There is no financial instrument measured at fair value in the Company.
4) Information of fair value of financial assets and liabilities not measured at fair value
The financial assets and liabilities not measured at fair value include: the accounts receivable,
short-term borrowing, accounts payable, non-current liabilities and long-term borrowings
matured within one year, investment in equities that are not quoted in active market and whose
fair value cannot be measured reliably.
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
Real estate Holding Voting
Registered Registered
Name development and proportio rights
address capital
operation n 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
Relationship between other related party and the
Name of Other Related Party
Company
Beijing Zhongjia Yangguang energy technology (Company)
With same controller
Co., Ltd.
Beijing Xinxing Real Estate Development Corporation The parent company of the original controlling
shareholder
Relationship between other related party and the
Name of Other Related Party
Company
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
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 2017 Year 2016
transaction
Sanya Wanjia Hotel Management Hotel services 2,754,012.00
Co., Ltd
Provide asset
Beijing Xinxing Real Estate
Development Corporation
management 1,200,000.00
services
Total 3,954,012.00
(3) Related party assets transfer, debt restructuring
Nature of related
Related party Year 2017 Year 2016
transaction
Beijing wanfa real estate Equity transfer
development co. LTD 277,332,301.49
Beijing wanfa real estate Transfer of fixed
development co. LTD 35,000,000.00
assets
Total
312,332,301.49
(4) Information of related guarantee
When the Company is the guarantor:
Beginning date Maturity date
Guarantee
Guarantor Amount of guarantee of
obligation
guarantee
contract expired
contract
Beijing Zhongjia Sunny Energy Technology
9,400,000.00 2013/9/12 2016/9/12 No
(Company) Co., Ltd.
Total 9,400,000.00
(5) Fund calling between related parties
As at 30 June 2017, 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
RMB54,680,395.18with interest payable of RMB33,801,954.73.
As at 30 June 2017,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 of June 30, 2017, the principal balance of the company's borrowings to Beijing grain group co.,
ltd. is RMB179,000,000.00, with the interest balance of RMB4,182,283.33
(6) Remuneration of key management personnel (10 thousand yuan)
Item Current Amount Previous Amount
Key management personnel salary 61.43 59.62
(7) Accounts payable for related parties
(1)Accounts payable for related parties by the Company
Items Company Name 31 December 2017 31 December 2014
Other Beijing Xinxing Real Estate Development
payables General Company 54,680,395.18 84,778,095.18
Other Beijing Zhongjia Yangguang Energy
payables Technology ( Group) Co., Ltd. 3,586,021.00 3,586,021.00
Other Mudanjiang City Development &
payables Construction Co., Ltd 70,000.00 70,000.00
Other Sanya Wanjia Industrial Co., Ltd
payables 1,133,732.83 1,133,732.83
Other Sanya Wan Jia Hotel Management Co., Ltd
payables 9,635,737.42 10,187,745.63
Other Beijing Grain Group Co., Ltd
payables 183,182,283.33 150,746,266.66
Other Heilongjiang Longshi Culture Communication
payables Co., Ltd 2,225,224.84
Total
252,288,169.76 252,727,086.14
Other Beijing Wangfa Real Estate Development
receivables Holdings Co., Ltd 35,000,000.00
Total
35,000,000.00
Interest Beijing Xinxing Real Estate Development
payable General company 33,801,954.73 33,615,676.05
Interest Beijing Wangfa Real Estate Development Co.,
payable Ltd. 38,227,058.49 38,227,058.49
Total
72,029,013.22 71,842,734.54
Interest Heilongjiang Long as Culture Communication
receivable Co., Ltd 2,710,880.79
Total
- 2,710,880.79
XII. Commitments and Contingency
1) Significant commitments
Not
2) Contingency incurred after the balance sheet
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 company's 18th board resolution, no profit distribution is made during this
period.
2)Information of other events after the balance sheet date
a)On November 3, 2014, Hainan Fangyuan Law Firm lodged a lawsuit on the dispute over the
property rights of the company’s Parking Space 57, 61, 62, 63, 64 (formerly Parking Space
101-105) of the Pearl Square Underground Parking Lot to the court, requiring to obtain the
ownership certificates of the parking spaces. As of the issuance date of the financial statement, the
first trial of the case was handed down, requiring the company to transfer the ownerships of above
five parking spaces to Hainan Fangyuan Law Firm, but the company refused to accept the verdict
and is now preparing materials to appeal to the Hainan Province Haikou City Intermediate
People's Court.
b) In September 2013, the company borrowed 27 million Yuan from Lv Gengying via Hainan
Zhuyei Investment Management Co., Ltd., and went through registration procedures of mortgaged
property. On November 20, 2015, the company signed Agreement on the Transfer of Creditor's
Rights and Debts with Shi Xuyun, Pu Ding, Lv Gengying and Hainan Zhuyei Investment
Management Co., Ltd., to transfer 9.4 million Yuan of debts that it borrowed from Lv Gengying to
Shi Xuyun (4.7 million Yuan) and Pu Ding (4.7 million Yuan). The term of the loan has expired, as
Hainan Zhuyei Investment Management Co., Ltd. was suspected of illegal pooling of public
deposits and was investigated by the public security bureau and therefore temporarily could not
continue to fulfill its repayment obligation, Shi Xuyun and Pu Ding filed a lawsuit to the Hainan
Province Haikou City People's Court on the dispute over loan contract, and was dismissed in the
first trial. However, Shi Xuyun and Pu Ding refused to accept the verdict and lodged a lawsuit to
the Hainan Province Haikou City Intermediate People's Court. As of the issuance date of the
financial statement, the second trial maintained the verdict made during the first trial, i.e., to
rejected their claim and hear the case after the completion of the trial of criminal case of Hainan
Zhuyei Investment Management Co., Ltd.
XIV. Other significant events
1)Guaranty events
There is no external guarantee of this report period
2)Other events
a)The company is planning on major asset reorganization, which was approved by the
State-owned Assets Supervision and Administration Commission of the Beijing Municipal
People's Government on July 21, 2016. The reorganization programme involves three transactions,
such as major asset replacement, issuance of shares, purchase of assets and supporting financing.
The subject of the transactions is 100% shares of Beijing Grain Stock Co. Ltd held by BGG and
other related parties. As of the issuance date of the financial statement, the company received On
the Approval of Hainanzhujiangkonggu Co., Ltd to Issue Shares and Purchase and Raise
Supporting Funds to BGG and other related parties issued by China Securities Regulatory
Commission (CSRC License No. [2017]1391).
b)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 13560 ㎡ with a transfer price of 135million RMB. The payment has
been received. In case of the complex transfer processes dealing with Land Use Certificate, the
Planning and Design, Asset Evaluation and Government approveal, 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
Book Balance Provision for Bad Account
Categories
Rate Book Value
Ratio
Amounts Amounts Chargeabl
(%)
e(%)
Closing Balance
Book Balance Provision for Bad Account
Categories
Rate Book Value
Ratio
Amounts Amounts Chargeabl
(%)
e(%)
Accounts receivable with
significant single amount
8,856,207.60 74.25% 8,856,207.60 100.00%
and individual provision for -
bad debts
Accounts receivable with
combinational withdrawal
of the bad debt provision 1,172,461.81 9.83% 155,487.58 13.26%
1,016,974.23
by credit risks
characteristics
Accounts receivable with
non-significant single
1,898,690.60 15.92% 1,898,690.60 100.00%
amount and individual -
provision for bad debts
Total 11,927,360.01 10,910,385.78 1,016,974.23
Continued:
Opening Balance
Book Balance Provision for Bad Account
Categories
Rate Book Value
Ratio
Amounts Amounts Chargeabl
(%)
e(%)
Accounts receivable with
significant single amount
8,856,207.60 74.16% 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%
by credit risks 1,032,085.83
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 10,910,694.18 1,032,085.83
Description of categories of accounts receivable:
(1) Accounts receivable with significant single amount and individual provision for bad debts at
the end of period:
Closing Balance
Name Rate
Accounts Provision for
Chargeabl Reasons of Withdrawal
Receivable Bad Account
e(%)
Estimates cannot
Hainan dragon film studio 100.00%
1,046,985.40 1,046,985.40 be brought back
Estimates cannot
Hainan Baoping company 100.00%
2,218,494.43 2,218,494.43 be brought back
Hainan racing entertainment 100.00% Estimates cannot
Closing Balance
Name Rate
Accounts Provision for
Chargeabl Reasons of Withdrawal
Receivable Bad Account
e(%)
Co., LTD 2,406,158.00 2,406,158.00 be brought back
Hainan centaline property Estimates cannot
100.00%
agency be brought back
2,090,069.77 2,090,069.77
Singapore China holding co., Estimates cannot
100.00%
LTD 1,094,500.00 1,094,500.00 be brought back
Total —
8,856,207.60 8,856,207.60
(2) Accounts receivable with non-significant single amount and individual provision for bad debts
at the end of period:
Closing Balance
Name Rate
Accounts Provision for Bad
Chargea Reasons of Withdrawal
Receivable Account
ble(%)
Management
Haikou Peijie clothing company 497,520.00 497,520.00 100.00%
identification
Hainan International silver city 100.00% Management
451,712.00 451,712.00
Real estate company identification
Haikou Jingye trading 100.00% Management
250,000.00 250,000.00
development company identification
Hainan Jinhe Real estate 100.00% Management
119,446.00 119,446.00
company identification
Hainan Qiongshan Tianxin 100.00% Management
112,116.50 112,116.50
Pawn Investment company identification
Amount less than one hundred 100.00% Management
467,896.10 467,896.10
thousand yuan identification
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 Provision for Bad
Accounts Receivable Rate Chargeable(%)
Account
Within 1 year 2.00%
36,000.00 720.00
1-2 years 5.00%
918,807.39 45,940.37
2-3 years 10.00%
- -
3-4 years 20.00%
- -
4-5 years 30.00%
- -
Over 5 years 50.00%
Closing Balance
Aging Provision for Bad
Accounts Receivable Rate Chargeable(%)
Account
217,654.42 108,827.21
Total -----
1,172,461.81 155,487.58
Continued:
Opening Balance
Aging Provision for Bad
Accounts Receivable Rate Chargeable(%)
Account
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 —
2) Situation of the current bad debt provision withdrawn, recovered or reversed:
The amount of current bad debt provision reversed was RMB308.4 .
3) There is no money owed by the shareholders who hold more than 5% (5% is included) of
voting shares of the Company in the closing accounts receivable.
4) Top 5 units of accounts receivable of the closing balance gathered on the basis of parties
which owe the money:
Ratio in Closing
Amount of Bad Account Provisions
Name Closing Balance
Accounts Withdrawn
Receivable (%)
Hainan racing entertainment Co., LTD 2,406,158.00 20.17% 2,406,158.00
Hainan Baoping company 2,218,494.43 18.60% 2,218,494.43
Hainan Zhongyuan tenement agency
2,090,069.77 17.52% 2,090,069.77
company
Singapore China holding co., LTD 1,094,500.00 9.18% 1,094,500.00
Hainan Longzhu Cinema City 1,046,985.40 8.78% 1,046,985.40
Total 8,856,207.60 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
Book Balance Provision for Bad Account
Categories
Rate Book Value
Ratio
Amounts Amounts Chargeabl
(%)
e(%)
Closing Balance
Book Balance Provision for Bad Account
Categories
Rate Book Value
Ratio
Amounts Amounts Chargeabl
(%)
e(%)
Other receivables with
significant single amount and
53.18% 139,476,136.40 33.93%
individual provision for bad 411,091,072.35 271,614,935.95
debts
Other receivables with
combinational withdrawal of
the bad debt provision by -
credit risks characteristics
Combination 1 : Aging
Combination 357,846,097.75 89,749,525.58 268,096,572.17
Combination 2 :
Receivables in the
inter-companies in range of 143,238.82 - 143,238.82
consolidation
Totality of Combination 46.31% 25.07%
357,989,336.57 89,749,525.58 268,239,810.99
Other receivables with
non-significant single amount
0.51% 100.00%
and individual provision for 3,963,362.46 3,963,362.46 -
bad debts
Total 100.00% 233,189,024.44
773,043,771.38 539,854,746.94
Continued:
Opening Balance
Book Balance Provision for Bad Account
Categories
Rate Book Value
Ratio
Amounts Amounts Chargeabl
(%)
e(%)
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
Description of categories of other receivables:
(1) Other receivables with significant single amount and individual provision for bad debts at the
end of period:
Closing Balance
Name Rate
Provision for Bad Reasons of
Other Receivables Chargeable
Account Withdrawal
(%)
Mudanjiang city pearl According to the
river wanjia tourism
investment expected amount
development group provision shall not
co. LTD
246,195,408.23 70,855,952.42 28.78% withdraw
Shanghai rongxin real According to the
estate co. LTD
expected amount
provision shall not
68,810,525.99 1,882,525.99 2.74% withdraw
Hebei zhengshi According to the
qinghui real estate
development co. LTD expected amount
provision shall not
49,928,266.99 22,732,273.67 45.53% withdraw
Singapore CHINA
Irrecoverable
GREAT LAND HOLD 16,981,016.24 16,981,016.24 100.00%
Hainan marcun port
company Irrecoverable
6,000,000.00 6,000,000.00 100.00%
Ding jia international
co. LTD Irrecoverable
2,725,702.71 2,725,702.71 100.00%
Hainan entrust
industry co. LTD Irrecoverable
2,314,592.00 2,314,592.00 100.00%
Hainan zhongda
industrial corporation Irrecoverable
2,210,779.10 2,210,779.10 100.00%
Great treasure cement
factory Irrecoverable
1,901,383.56 1,901,383.56 100.00%
Jinguang industrial
Irrecoverable
company 1,752,100.00 1,752,100.00 100.00%
Beijing jiubo According to the
cultural development
co. LTD expected amount
provision shall not
3,680,000.00 1,528,513.18 41.54% withdraw
Shenzhen pearl real
estate company Irrecoverable
1,550,278.23 1,550,278.23 100.00%
Shenzhen guoan
securities co. LTD Irrecoverable
1,409,934.28 1,409,934.28 100.00%
Haikou industrial
development import
Irrecoverable
and export trade co.
LTD 1,392,430.00 1,392,430.00 100.00%
Xinhua dawn aviation
decoration company Irrecoverable
1,208,804.70 1,208,804.70 100.00%
Hainan deep-sea
property co. LTD Irrecoverable
1,029,850.32 1,029,850.32 100.00%
Hainan Yangtze river
travel industry Irrecoverable
1,000,000.00 1,000,000.00 100.00%
Closing Balance
Name Rate
Provision for Bad Reasons of
Other Receivables Chargeable
Account Withdrawal
(%)
Land property
administration of Irrecoverable
sanya city 1,000,000.00 1,000,000.00 100.00%
Total —
411,091,072.35 139,476,136.40
(2) Other receivables with non-significant single amount and individual provision for bad debts at
the end of period
Closing Balance
Name Rate
Other Provision for
Chargea Reasons of Withdrawal
Receivables Bad Account
ble(%)
Sell Dabao cement on a
560,610.00 560,610.00 100.00 Irrecoverable
commission basis
Hainan Development Bank 440,000.00 440,000.00 100.00 Irrecoverable
Hainan Sanli Industry and
283,478.62 283,478.62 100.00 Irrecoverable
Trade Company
Chamber of Commerce of
270,000.00 270,000.00 100.00 Irrecoverable
Hainan Province
Telephone rate of customers of
268,542.54 268,542.54 100.00 Irrecoverable
PEARL RIVER Square
China Construction Sixth
260,335.00 260,335.00 100.00 Irrecoverable
Engineering Division Group, 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(23
1,339,213.08 1,339,213.08 100.00 Irrecoverable
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 Provision for Bad
Other Receivables Rate Chargeable(%)
Account
Within 1 year 2.00%
104,409,283.75 2,087,520.28
1-2 years 5.00%
32,373,620.00 1,618,681.00
2-3 years
- -
3-4 years 20.00%
30,000,000.00 6,000,000.00
4-5 years 30.00%
77,455,266.00 23,236,579.80
Over 5 years 50.00%
113,607,928.00 56,806,744.50
Total -----
Closing Balance
Aging Provision for Bad
Other Receivables Rate Chargeable(%)
Account
357,846,097.75 89,749,525.58
Continued:
Opening Balance
Aging Provision for Bad
Other Receivables Rate Chargeable(%)
Account
Within 1 year 166,613,450.01 3,332,269.00 2.00%
1-2 years 20,000,000.00 1,000,000.00 5.00%
2-3 years
3-4 years 30,085,000.00 6,017,000.00 20.00%
4-5 years 77,370,266.00 23,211,079.80 30.00%
Over 5 years 123,613,489.00 61,806,744.50 50.00%
Total 417,682,205.01 95,367,093.30 -----
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 RMB5,617,567.72
3) Category of other receivables under the natures of accounts
Item Closing Balance Opening Balance
Investment 240,400,000.00 250,400,000.00
Recievable Related Parties 368,683,164.43 403,157,641.37
Borrowing and Interest 16,981,016.24 16,981,016.24
Other Recievable 103,720,000.00 118,720,000.00
Deposit 7,334,364.05 7,334,364.05
Mortgage Guarantee 5,917,801.10 5,917,801.10
Dividends Receivable 1,849,934.28 1,849,934.28
Other 28,157,491.28 26,231,057.72
Total 773,043,771.38 830,591,814.76
4) There is no money owed by the shareholders who hold more than 5% (5% is included) of
voting shares of the Company in the closing other receivables.
5) Top 5 units of other receivables of the closing balance gathered on the basis of parties which
owe the money:
Ratio in
Closing Closing
Nature of Amount of Balance of Bad
Name Closing Balance Aging
Money Other Debt
Receivables Provisions
(%)
Mudanjiang Pearl
River Wanjia Tourism 1-5years 、over 5
Borrowing 246,195,408.23 31.85% 70,855,952.42
Investment years
Development Group
Money for
Beijing Kangtai
Project 4-5years、over 5
Xingye Investment 12.94% 42,000,000.00
Combinatio 100,000,000.00 years
Co.,Ltd
n
Beijing runshun
Intercourse
technology 1-2years 12.64% 1,954,400.00
Funds 97,720,000.00
development co. LTD
Money for
Zhonghe investment Cooperatio 4-5years、over 5
11.69% 37,800,000.00
co. LTD n with 90,400,000.00 years
Project
Shanghai rongxin real Intercourse 1-5 years、over 5
estate co. LTD 8.90% 1,882,525.99
Funds 68,810,525.99 years
Total 78.02% 154,492,878.41
603,125,934.22
Note 3 Long-term Equity Investment
Closing Balance Opening Balance
Nature of
Impairment Impairment
Money Book Balance Book Value Book Balance Book Value
Provision Provision
Investment in
subsidiaries 179,420,000.00 110,100,000.00 69,320,000.00 179,420,000.00 110,100,000.00 69,320,000.00
Investment in
associated
companies 31,464,906.50 - 31,464,906.50 32,393,800.55 - 32,393,800.55
Total
210,884,906.50 110,100,000.00 100,784,906.50 211,813,800.55 110,100,000.00 101,713,800.55
1) Investment in subsidiaries
Current The
Current Impairmen Impairment
Initial Opening Current Closing t Provision Prepares the
Investee Increas
Investment Cost Balance Decrease Balance Withdrawn
e Ending
Balance
Shanghai rongxin
real estate co. LTD 40,000,000.00 40,000,000.00 40,000,000.00 40,000,000.00
Hainan pearl river
property hotel
management co. 4,900,000.00 4,900,000.00 4,900,000.00
LTD
Current The
Current Impairmen Impairment
Initial Opening Current Closing t Provision Prepares the
Investee Increas
Investment Cost Balance Decrease Balance Withdrawn
e Ending
Balance
Hubei zhujiang real
estate development
co. LTD 64,420,000.00 64,420,000.00 64,420,000.00
Mudanjiang wanjia
tourism investment
development group 60,000,000.00 60,000,000.00 60,000,000.00 60,000,000.00
co. LTD
Beijing jiubo cultural
development co.
LTD 5,000,000.00 5,000,000.00 5,000,000.00 5,000,000.00
Hebei zhengshi
qinghui real estate
development co. 5,100,000.00 5,100,000.00 5,100,000.00 5,100,000.00
LTD
Total
179,420,000.00 179,420,000.00 179,420,000.00 110,100,000.00
2) Investment in cooperative enterprises and associated enterprises
Current Increase or Decrease
Opening Investment Adjustment of
Investee Additional Contribution Results Other
Balance
Contribution Reduced Recognized by Comprehensiv
Equity Method e Income
1. Associated Enterprises
2. Sanya Wanjia Industry Co.,
Ltd. 32,393,800.55 -928,894.05
Total
32,393,800.55 - - -928,894.05
Continued:
Current Increase or Decrease
Closing
Declared to Balance of
Investee Change of Impairment Closing Balance
grant cash Impairme
Other Provision Other
dividends or nt Reserve
Equities Withdrawn
profits
3. Associated Enterprises
Sanya Wanjia Industry Co.,
Ltd. 31,464,906.50
Total
31,464,906.50 -
Note 4 Operating income and operating cost
1) Operating income and operating cost
Current Amount Previous Amount
Item
Income Cost Income Cost
Other Business 620,935.59 173,367.05
2,857.14 151,218.30
Total
2,857.14 151,218.30 620,935.59 173,367.05
Note 5 Investment income
Item Current Amount Previous Amount
Investment Income from the Long-term Equity Measured Under
Equity Method -928,894.05 -159,255.52
Other
75,820,000.00 -
Total
74,891,105.95 -159,255.52
XVI. Supplementary information
1) Breakdown of non-recurring profit or loss
Items Amount Description
Profit and loss on disposal of non-current assets 149,535.63
Fund occupation fee from non-financial enterprises included in the
1,031,643.09
current 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 -1,143,672.86
Enterprise restructuring charges -1,367,924.53
Other satisfies the definition of non-recurring gains and losses and losses
of the project
Income tax influence the forehead 41,265.54
Rights and interests of minority shareholders influence the forehead
(after tax) 6,065.97
Total -1,377,750.18
2) Return on equity (ROE) and earnings per share (\"EPS\")
Earnings per share
Weighted average return on
Profit During Report Period Basic earnings per Diluted earnings per
net assets (%)
share share
Net profit attributable to ordinary
23.37% 0.04 0.04
shareholders of the Company
Net profit after deduction of
non-recurring profits or losses attributable 25.24% 0.04 0.04
to ordinary shareholders of the Company
3) Abnormal financial statements items (\"F/S items\") and description of reasons
(1) Consolidated balance sheet of consolidated financial statements
December 31, Ratio of
Item June 30, 2017 Reason of Change
2016 Change
Monetary fund The principal is to repay the loan of this period
and to return the advanced payment of
-31.91%
167,840,121.26 246,504,351.39 Zhongsenhua by the subsidiary Hubei Pearl
River.
inventory The principal is to carry forward cost of the
-46.95% unsold inventory of homes by the subsidiary
158,016,371.89 297,867,807.05 Hubei Pearl River.
Other current assets The principal is the prepaid related taxes and
65.38%
14,411,010.80 8,714,139.07 fees of the subsidiary Hubei Pearl River.
Long-term deferred The principal is caused by the amortization of
expenses -46.57%
1,113,550.80 2,083,962.89 this period.
Deferred tax assets The principal is to transfer back to deferred
-100.00% income tax assets by the subsidiary Hubei Pearl
- 4,985,486.50 River.
Advance payment The principal is from the income from the sales
-36.87%
230,886,723.58 365,746,868.16 of the subsidiary Hubei Pearl River.
Payable taxes The principal is to pay enterprise income tax
-48.52% and to pay the related taxes and fees of Hubei
43,455,350.36 84,404,890.27 Pearl River.
Non-current
The principal is to return the loan from the
liabilities due within -100.00%
- 78,710,181.59 subsidiary Mudanjiang Tourism Group.
one year
Long-term The principal is to return the loan from the
borrowing -93.21%
5,000,000.00 73,666,666.66 subsidiary Mudanjiang Tourism Group.
Minority interests The principal is to make dividends by the
-143.17%
-9,962,656.83 -4,096,952.76 subsidiary Hubei Pearl River.
(2) Consolidated Profit Statement and Cash Flow Statement
January to June January to June Ratio of
Item Reason of Change
2017 2016 Change
The principal is to gain the income of the
Operating
393,836,785.57 149,032,528.40 164.26% housing sales by the subsidiary Hubei Pearl
income
River.
The principal is to gain the income of the
Operating
288,602,024.02 122,029,925.99 136.50% housing sales by the subsidiary Hubei Pearl
cost
River.
The principal is to provision related taxes and
Taxes and
16,524,745.23 10,405,923.57 58.80% frees of the housing sales by the subsidiary
surcharges
Hubei Pearl River.
Financial The principal is to repay the loan and to reduce
7,378,082.80 48,791,814.72 -84.88%
expenses the financial cost in this period
Impairment The principal is to withdraw the partial
-4,139,548.16 1,995,276.66 -307.47%
of assets receivables depreciated.
The principal is to transfer the shareholders of
the subsidiary Heilongjiang Hongshi owed by
Investment -1,095,372.42 37,928,898.30 -102.89%
Mudanjiang Tourism Group in the previous
period.
Non-operati The principal is to deal with fixed assets to
623,290.84 2,651,492.34 -76.49%
ng income generate income in the previous period
Operating The principal is to apply for scrap part of fixed
1,617,428.07 3,278,378.77 -50.66%
expenses assets in the previous period.
The principal is to provision income taxes by the
Income tax
7,201,670.33 183,697.96 3820.39% subsidiaries Hubei Pearl River and Zhujiang
expense
Property.
Minority
The principal is to make a profit by the
gains and 3,314,295.93 -3,798,646.47 187.25%
subsidiary Hubei Pearl River.
losses
Net cash
flow
generated The principal is that prepaid housing funds of
-69,730,210.02 161,345,565.54 -143.22%
by Hubei Pearl River reduces in this period.
operating
activities
Net cash
flow
The principal is to withdraw the partial
generated
53,311,113.89 5,447,324.96 878.67% investment and sell some fixed assets to receive
by
cash
investment
activities
Net cash
The principal is to receive the payback of the
flows from
-62,245,134.00 -229,444,811.25 72.87% loan for the increase in borrowing in this period.
financing
activities
Legal representative: Wang Chunli
Principal in charge of accounting: Guan Ying
Head of the accounting department: Wu Xiukun
Hainan Pearl River Holding Company Limited
25 August 2017