| ORGANIZATION AND NATURE OF OPERATIONS |
1. ORGANIZATION AND NATURE OF OPERATIONS
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The accompanying consolidated financial statements include the financial statements of Giant
Interactive Group, Inc. (the “Company” or “Giant Interactive”), its subsidiaries and the VIE
subsidiary, collectively referred to as the “Group”. |
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Giant Interactive was incorporated in the Cayman Islands on July 26, 2006 and became the
holding company of the Group. |
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The Group is engaged in the development and operation of online games in the People’s Republic
of China (the “PRC”). The Group primarily develops and operates online games through its
subsidiary, Zhengtu Information, and its VIE subsidiary, Giant Network. |
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Details of the Company’s subsidiaries are as follows: |
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Date of |
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Place of |
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Percentage of |
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incorporation/ |
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incorporation/ |
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shareholding/ |
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| Subsidiary |
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establishment |
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establishment |
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ownership |
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Principal activities |
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Shanghai Giant Network
Technology Co., Ltd.
(“Giant Network”)
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November 14, 2004 |
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PRC |
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— |
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Internet content provider |
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Eddia International
Group Limited
(“Eddia International”)
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July 26, 2006 |
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British Virgin Islands (“BVI”) |
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100.00 |
% |
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Investment holding |
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Shanghai Zhengtu
Information Technology
Co., Ltd.
(“Zhengtu Information”)
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September 6, 2006 |
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PRC |
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100.00 |
% |
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Online game development and maintenance |
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Giant Interactive (Hong
Kong) Limited (“Giant
HK”)
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December 22, 2008 |
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Hong Kong |
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100.00 |
% |
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Investment holding |
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Zhuhai Zhengtu
Information Technology
Co., Ltd. (“Zhuhai
Zhengtu”)
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February 19, 2009 |
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PRC |
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100.00 |
% |
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Online game research and development |
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Hangzhou Snow Wolf
Software Co., Ltd.
(“Snow Wolf Software”)
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Acquired on May 18, 2009 |
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PRC |
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51.07 |
% |
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Online game research and development |
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Shanghai Zhengduo
Information Technology
Co., Ltd. (“Zhengduo
Information”)
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July 8, 2009 |
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PRC |
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100.00 |
% |
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Online game development and maintenance |
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Shanghai Jujia Network
Technology Co., Ltd.
(“Jujia Network”)
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October 20, 2009 |
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PRC |
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51.00 |
% |
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Online game research and development |
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Shanghai Juhuo Network
Technology Co., Ltd.
(“Juhuo Network”)
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November 4, 2009 |
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PRC |
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51.00 |
% |
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Online game development and maintenance |
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Shanghai Juhe Network
Technology Co., Ltd.
(“Juhe Network”)
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November 4, 2009 |
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PRC |
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51.00 |
% |
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Online game research and development |
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Wuxi Giant Network
Technology Co., Ltd.
(“Wuxi Network”)
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December 28, 2009 |
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PRC |
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- |
* |
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Online game research and development |
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Shanghai Juyan Network
Technology Co., Ltd.
(“Juyan Network”)
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January 4, 2010 |
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PRC |
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51.00 |
% |
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Online game research and development |
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Date of |
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Place of |
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Percentage of |
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incorporation/ |
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incorporation/ |
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shareholding/ |
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| Subsidiary |
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establishment |
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establishment |
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ownership |
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Principal activities |
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Shanghai Juxi Network
Technology Co., Ltd.
(“Juxi Network”)
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January 21, 2010
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PRC
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51.00 |
% |
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Online game
research and
development |
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Shanghai Juxian
Network Technology
Co., Ltd. (“Juxian
Network”)
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January 25, 2010
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PRC
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51.00 |
% |
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Online game
research and
development |
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Chengdu Jufan Network
Technology Co., Ltd.
(“Jufan Network”)
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March 29, 2010
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PRC
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51.00 |
% |
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Online game
research and
development |
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Shanghai Zhengju
Information Technology
Co., Ltd.
(“Zhengju Information”)
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April 28, 2010
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PRC
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—* |
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Online game
research and
development |
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Shanghai Juquan
Network Technology
Co., Ltd. (“Juquan
Network”)
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May 19, 2010
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PRC
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51.00 |
% |
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Online game
research and
development |
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Wuxi Tiema Network
Technology Co., Ltd.
(“Tiema Network”)
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June 3, 2010
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PRC
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—* |
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Online game
research and
development |
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Shanghai Juxin Network
Technology Co., Ltd.
(“Juxin Network”)
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October 9, 2010
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PRC
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—* |
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Online game
research and
development |
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Beijing Juren Zhengtu
Information Technology
Co., Ltd. (“Juren
Zhengtu Information”)
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October 13, 2010
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PRC
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—* |
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Online game
research and
development |
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Beijing Julun Network
Information Technology
Co., Ltd. (“Julun
Network”)
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Acquired on
November 19, 2010
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PRC
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—* |
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Online game
research and
development |
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Shanghai Haoji Network
Technology Co., Ltd.
(“Haoji Network”)
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Acquired on
November 24, 2010
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PRC
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—* |
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Online game
research and
development |
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These are all subsidiaries of Giant Network. |
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In September 2006, in contemplation of an initial public offering, the Group completed a
reorganization (the “Reorganization”) which was necessary to comply with PRC law and
regulations that restrict foreign ownership of a company that provides Internet content
services, which includes operating online games. |
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As part of the Reorganization, Mr. Yuzhu Shi, his immediate family and the other eighteen
individual shareholders of Giant Network through their respective BVI holding companies,
established the Company and Eddia International. Mr. Yuzhu Shi and his immediate family,
through their BVI holding companies, Union Sky Holding Co., Ltd. and Vogel Holding Group
Limited, are the controlling shareholders of the Company since incorporation. Subsequently, on
September 6, 2006, Eddia International established Zhengtu Information, a wholly-owned foreign
enterprise, which entered into a series of agreements with Giant Network. Pursuant to these
agreements, Giant Network transferred most of its employees and operating assets, including the
rights to operate its online game, ZT Online, to Zhengtu Information, except for certain assets
that an online game operator must own to be an Internet license holder. In return, Zhengtu
Information exclusively provides certain technical and consulting services and software
licenses to Giant Network in exchange for fees, which can be adjusted at the Company’s
discretion, through its direct ownership interest in Zhengtu Information as well as provide
financial support to Giant Network, as necessary. As a result of these agreements, the Company
is considered the primary beneficiary of Giant Network (see Note 2) and accordingly, Giant
Network’s results of operation and financial condition are consolidated in the financial
statements of the Group. |
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On January 4, January 21, January 25, March 29, and May 19, 2010, Zhengduo Information
established Juyan Network, Juxi Network, Juxian Network, Jufan Network and Juquan Network with
51% equity interest respectively. |
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On April 28 and October 9, 2010, Giant Network established Zhengju Information and Juxin
Network with 100% equity interest and 51% equity interest, respectively. |
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On June 3 and October 13, 2010, Wuxi Network established Tiema Network and Juren Zhengtu
Information with 51% equity interest and 100% equity interest, respectively. |
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On November 19 and November 24, 2010, Giant Network acquired Julun Network and Haoji Network,
two of online game research and development companies, with 100% equity interest and 50% equity
interest, respectively. Giant Network has veto rights in regards to Haoji Network’s operating
and financial decisions. |
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On December 6, 2010, Zhengtu Information, Giant Network and Shanghai Juyan Network Technology
jointly established Beijing Huayi Juren Information Technology Co., Ltd (“Huayi Juren
Information”) with 51%, 34% and 15% equity interest, respectively. The registered capital of
Huayi Juren Information was RMB 25,000,000. The Group was the controlling shareholder with 85%
equity interest. On December 31, 2010, Zhengtu Information sold its 51% equity interest in
Huayi Juren Information to Huayi Brothers Media Corporation (“Huayi”) and as a result, Huayi Juren
Information was deconsolidated (See Note 5). |
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