Hainan Dadonghai Tourism Centre(Holdings) Co., Ltd.
Financial Report & Statement
Semi-Annual 2019
Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd.
Financial Report & Financial Statement
(1 January 2019 to 30 June 2019)
| Content | Page | ||
| I | Financial statement | ||
| Balance Sheet | 3-6 | ||
| Profit Statement | 7-8 | ||
| Statement of Cash Flow | 9-10 | ||
| Statement of Changes in Owners’ Equity | 11-14 | ||
| II | Notes to Financial Statement | 15-47 |
Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd.
Consolidated Balance Sheet(Expressed in Renminbi unless otherwise stated)
Item
| Item | 2019-6-30 | 2018-12-31 |
| Current assets: | ||
| Monetary funds | 16,110,895.95 | 15,364,355.30 |
| Transactional financial assets | ||
| Notes receivable | ||
| Accounts receivable | 155,986.88 | 426,434.87 |
| Receivables Financing | ||
| Advance payment | 396,882.60 | |
| Insurance receivable | ||
| Other receivables | 1,242,181.64 | 458,242.73 |
| Including: Interests receivable | ||
| Dividends receivable | ||
| Inventories | 191,693.57 | 221,390.19 |
| Non-current assets maturing within one year | ||
| Other current assets | 2,125,619.16 | 1,846,219.79 |
| Total current assets | 20,223,259.80 | 18,316,642.88 |
| Non-current assets: | ||
| Finance asset available for sales | ||
| Held-to-maturity investment | ||
| Long-term account receivable | ||
| Long-term equity investments | ||
| Investment property | 8,147,218.65 | 8,384,480.43 |
| Fixed assets | 34,997,520.16 | 36,497,869.65 |
| Construction in progress | ||
| Intangible assets | 21,799,055.46 | 22,205,249.04 |
| Goodwill | ||
| Long-term deferred expenses | 2,240,879.25 | 2,792,876.07 |
| Other non-current assets | ||
| Total non-current assets | 67,184,673.52 | 69,880,475.19 |
| Total assets | 87,407,933.32 | 88,197,118.07 |
Legal Representative: Yuan Xiaoping Accounting Principal: Fu ZongrenThe Accounting Firm’s Principal: Fu Zongren
Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd.
Consolidated Balance Sheet (Cont’)(Expressed in Renminbi unless otherwise stated)
Current liabilities:
| Current liabilities: | 2019-6-30 | 2018-12-31 |
| Short-term borrowings | ||
| Transactional financial liability | ||
| Notes payable | ||
| Accounts payable | 1,077,017.43 | 1,607,835.81 |
| Account received in advance | 779,681.12 | 1,291,293.05 |
| Employee compensation payable | 1,827,967.06 | 2,841,262.35 |
| Taxes and surcharges payable | 745,943.66 | 450,861.87 |
| Other account payable | 2,942,968.71 | 2,727,483.66 |
| Including: Interest payable | ||
| Other current liabilities | ||
| Total current liabilities | 7,373,577.98 | 8,918,736.74 |
| Non-current liabilities: | ||
| Long-term borrowings | ||
| Bonds payable | ||
| Long-term payables | ||
| Long-term employee compensation payable | ||
| Estimated liabilities | 1,489,685.04 | 1,489,685.04 |
| Deferred income | ||
| Total non-current liabilities | 1,489,685.04 | 1,489,685.04 |
| Total liabilities | 8,863,263.02 | 10,408,421.78 |
| Owners 'equity: | ||
| Share capital | 364,100,000.00 | 364,100,000.00 |
| Other equity instrument | ||
| Capital reserves | 54,142,850.01 | 54,142,850.01 |
| Surplus reserves | ||
| Undistributed profit | -339,698,179.71 | -340,454,153.72 |
| Total equity attributable to owners of parent company | 78,544,670.30 | 77,788,696.29 |
| Minority’s equity | ||
| Total owners 'equity | 78,544,670.30 | 77,788,696.29 |
| Total liabilities and owners 'equity | 87,407,933.32 | 88,197,118.07 |
Legal Representative: Yuan Xiaoping Accounting Principal: Fu Zongren
The Accounting Firm’s Principal: Fu Zongren
Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd.
Balance sheet of parent company(Expressed in Renminbi unless otherwise stated)
Item
| Item | 2019-6-30 | 2018-12-31 |
| Current assets: | ||
| Monetary funds | 15,610,097.59 | 14,864,055.73 |
| Transactional financial assets | ||
| Notes receivable | ||
| Accounts receivable | 155,986.88 | 426,434.87 |
| Receivables Financing | ||
| Advance payment | 396,882.60 | |
| Insurance receivable | ||
| Other receivables | 1,242,181.64 | 458,242.73 |
| Including: Interests receivable | ||
| Dividends receivable | ||
| Inventories | 191,693.57 | 221,390.19 |
| Non-current assets maturing within one year | ||
| Other current assets | 2,125,619.16 | 1,846,219.79 |
| Total current assets | 19,722,461.44 | 17,816,343.31 |
| Non-current assets: | ||
| Finance asset available for sales | ||
| Held-to-maturity investment | ||
| Long-term account receivable | ||
| Long-term equity investments | 1,000,000.00 | 1,000,000.00 |
| Investment property | 8,147,218.65 | 8,384,480.43 |
| Fixed assets | 34,997,520.16 | 36,497,869.65 |
| Construction in progress | ||
| Intangible assets | 21,799,055.46 | 22,205,249.04 |
| Goodwill | ||
| Long-term deferred expenses | 2,240,879.25 | 2,792,876.07 |
| Other non-current assets | ||
| Total non-current assets | 68,184,673.52 | 70,880,475.19 |
| Total assets | 87,907,134.96 | 88,696,818.50 |
Legal Representative: Yuan Xiaoping Accounting Principal: Fu Zongren
The Accounting Firm’s Principal: Fu Zongren
Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd.Balance sheet of parent company (Cont’)(Expressed in Renminbi unless otherwise stated)
Current liabilities:
| Current liabilities: | 2019-6-30 | 2018-12-31 |
| Short-term borrowings | ||
| Transactional financial liability | ||
| Notes payable | ||
| Accounts payable | 1,077,017.43 | 1,607,835.81 |
| Account received in advance | 779,681.12 | 1,291,293.05 |
| Employee compensation payable | 1,827,967.06 | 2,841,262.35 |
| Taxes and surcharges payable | 745,943.66 | 450,861.87 |
| Other account payable | 3,442,669.14 | 3,226,952.36 |
| Including: Interest payable | ||
| Other current liabilities | ||
| Total current liabilities | 7,873,278.41 | 9,418,205.44 |
| Non-current liabilities: | ||
| Long-term borrowings | ||
| Bonds payable | ||
| Long-term payables | ||
| Long-term employee compensation payable | ||
| Estimated liabilities | 1,489,685.04 | 1,489,685.04 |
| Deferred income | ||
| Total non-current liabilities | 1,489,685.04 | 1,489,685.04 |
| Total liabilities | 9,362,963.45 | 10,907,890.48 |
| Owners 'equity: | ||
| Share capital | 364,100,000.00 | 364,100,000.00 |
| Other equity instrument | ||
| Capital reserves | 54,142,850.01 | 54,142,850.01 |
| Less: Inventory shares | ||
| Other comprehensive income | ||
| Surplus reserve | ||
| Retained profit | -339,698,678.50 | -340,453,921.99 |
| Total owner’s equity | 78,544,171.51 | 77,788,928.02 |
| Total liabilities and owner’s equity | 87,907,134.96 | 88,696,818.50 |
Legal Representative: Yuan Xiaoping Accounting Principal: Fu ZongrenThe Accounting Firm’s Principal: Fu Zongren
Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd.
Consolidated Profit Statement(Expressed in Renminbi unless otherwise stated)
Item
| Item | Semi-annual of 2019 | Semi-annual of 2018 |
| I. Total operating income | 14,241,961.04 | 16,173,929.32 |
| Including: Operating income | 14,241,961.04 | 16,173,929.32 |
| Interest income | ||
| II. Total operating const | 13,646,017.49 | 14,891,558.76 |
| Including: Operating cost | 5,514,477.93 | 6,000,063.36 |
| Taxes and surcharges | 383,479.50 | 716,520.90 |
| Sales expenses | 2,809,991.94 | 2,800,956.10 |
| Administrative expenses | 5,071,800.21 | 5,356,455.21 |
| Financial expenses | -133,732.09 | 17,563.19 |
| Including: Interest expenses | ||
| Interest income | 152,697.12 | 22,729.87 |
| Add: Investment income (Loss is listed with “-”) | ||
| Losses of devaluation of asset (Loss is listed with “-”) | ||
| III. Operating profits ("-" for losses) | 595,943.55 | 1,282,370.56 |
| Plus: non-operating income | 160,030.46 | 273.00 |
| Less: non-operating expenses | 477.98 | |
| IV. Total profits ("-" for total losses) | 755,974.01 | 1,282,165.58 |
| Less: income tax expenses | ||
| V. Net profit (Net loss is listed with “-”) | 755,974.01 | 1,282,165.58 |
| (i) Classify by business continuity | ||
| 1.continuous operating net profit (net loss listed with ‘-”) | 755,974.01 | 1,282,165.58 |
| (ii) Classify by ownership | ||
| 1.Net profit attributable to owner’s of parent company | 755,974.01 | 1,282,165.58 |
| VI. Net amount of other comprehensive income after-tax | ||
| VII. Total comprehensive income | 755,974.01 | 1,282,165.58 |
| Total comprehensive income attributable to owners of parent company | 755,974.01 | 1,282,165.58 |
| Total comprehensive income attributable to minority | ||
| VIII. Earnings per share: | ||
| (i) Basic earnings per share | 0.0021 | 0.0035 |
(ii) Diluted earnings per share
| (ii) Diluted earnings per share | 0.0021 | 0.0035 |
Legal Representative: Yuan Xiaoping Accounting Principal: Fu ZongrenThe Accounting Firm’s Principal: Fu Zongren
Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd.
Profit statement of parent Company(Expressed in Renminbi unless otherwise stated)
| Item | Semi-annual of 2019 | Semi-annual of 2018 |
| I. Operating income | 14,241,961.04 | 16,173,929.32 |
| Less: Operating cost | 13,645,516.28 | 14,891,558.76 |
| Taxes and surcharges | 383,479.50 | 716,520.90 |
| Sales expenses | 2,809,991.94 | 2,800,956.10 |
| Administrative expenses | 5,071,800.21 | 5,356,455.21 |
| Financial expenses | -133,233.30 | 17,563.19 |
| Including: interest expenses | ||
| Interest income | 151,938.33 | 22,729.87 |
| Add: other income | ||
| Investment income (Loss is listed with “-”) | ||
| Losses of devaluation of asset (Loss is listed with “-”) | ||
| II. Operating profits ("-" for losses) | 595,444.76 | 1,282,370.56 |
| Plus: non-operating income | 160,030.46 | 273.00 |
| Less: non-operating expenses | 477.98 | |
| III. Total profits ("-" for total losses) | 755,475.22 | 1,282,165.58 |
| Less: income tax expenses | ||
| IV. Net profit ("-" for net loss) | 755,475.22 | 1,282,165.58 |
| (i) continuous operating net profit (net loss listed with ‘-”) | 755,475.22 | 1,282,165.58 |
| V. Net amount of other comprehensive income after-tax | ||
| (i) Other comprehensive income items which will not be reclassified subsequently to profit of loss | ||
| 1.Changes of the defined benefit plans that re-measured | ||
| 2.Other comprehensive income under equity method that cannot be transfer to gain/loss | ||
| (ii) Other comprehensive income items which will be reclassified subsequently to profit or loss | ||
| 1.Other comprehensive income under equity method that can transfer to gain/loss | ||
| 2.Change of fair value of other debt investment |
3.gain/loss of fair value changes for available-for-sale
financial assets
| 3.gain/loss of fair value changes for available-for-sale financial assets | ||
| VII. Total comprehensive income | 755,475.22 | 1,282,165.58 |
| VII. Earnings per share: | ||
| (i) Basic earnings per share | 0.0021 | 0.0035 |
| (ii) Diluted earnings per share | 0.0021 | 0.0035 |
Legal Representative: Yuan Xiaoping Accounting Principal: Fu ZongrenThe Accounting Firm’s Principal: Fu Zongren
Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd.
Consolidated Cash Flow Statement(Expressed in Renminbi unless otherwise stated)
| Item | Semi-annual of 2019 | Semi-annual of 2018 |
| I. Cash flows from operating activities | ||
| Cash received from sale of goods and rendering of services | 14,988,120.25 | 17,460,137.72 |
| Cash received from other operating activities | 1,105,441.88 | 684,152.64 |
| Sub-total of cash inflows from operating activities | 16,093,562.13 | 18,144,290.36 |
| Cash paid for goods purchased and services received | 4,468,726.47 | 5,026,699.13 |
| Cash paid to and on behalf of employees | 6,921,639.62 | 6,741,602.32 |
| Cash paid for taxes and surcharges | 1,139,283.59 | 1,590,739.15 |
| Cash paid for other operating activities | 2,294,495.80 | 1,674,572.16 |
| Sub-total of cash outflows from operating activities | 14,824,145.48 | 15,033,612.76 |
| Net cash flows from operating activities | 1,269,416.65 | 3,110,677.60 |
| II. Cash flows from investing activities | ||
| Cash received from disposal of investments | ||
| Net cash received from disposal of fixed, intangible and other long-term assets | 68,670.00 | |
| Other cash received concerning investing activities | ||
| Sub-total of cash inflows from investing activities | 68,670.00 | |
| Cash paid to acquire and construct fixed assets, intangible assets and other long-term assets | 591,546.00 | 1,040,626.12 |
| Cash paid for other investing activities | ||
| Sub-total of cash outflows from investing activities | 591,546.00 | 1,040,626.12 |
| Net cash flows from investing activities | -522,876.00 | -1,040,626.12 |
| III. Cash flows from financing activities | ||
| Cash received from loans | ||
| Sub-total of cash inflows from financing activities |
Cash paid for settling debts
| Cash paid for settling debts | ||
| Cash paid for other financing activities | ||
| Sub-total of cash outflows from financing activities | ||
| Net cash flows from financing activities | ||
| IV. Effect of fluctuation on exchange rate on cash and cash equivalents | ||
| V. Net increase in cash and cash equivalents | 746,540.65 | 2,070,051.48 |
| Plus: balance of cash and cash equivalents at the beginning of the period | 15,364,355.30 | 9,681,607.16 |
| VI. Balance of cash and cash equivalents at the end of the period | 16,110,895.95 | 11,751,658.64 |
Legal Representative: Yuan Xiaoping Accounting Principal: Fu ZongrenThe Accounting Firm’s Principal: Fu Zongren
Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd.Cash flow statement of parent Company(Expressed in Renminbi unless otherwise stated)
| Item | Semi-annual of 2019 | Semi-annual of 2018 |
| I. Cash flows from operating activities | ||
| Cash received from sale of goods and rendering of services | 14,988,120.25 | 17,460,137.72 |
| Cash received from other operating activities | 1,104,683.09 | 684,152.64 |
| Sub-total of cash inflows from operating activities | 16,092,803.34 | 18,144,290.36 |
| Cash paid for goods purchased and services received | 4,468,726.47 | 5,026,699.13 |
| Cash paid to and on behalf of employees | 6,921,639.62 | 6,741,602.32 |
| Cash paid for taxes and surcharges | 1,139,261.99 | 1,590,739.15 |
| Cash paid for other operating activities | 2,294,257.40 | 1,674,572.16 |
| Sub-total of cash outflows from operating activities | 14,823,885.48 | 15,033,612.76 |
| Net cash flows from operating activities | 1,268,917.86 | 3,110,677.60 |
| II. Cash flows from investing activities | ||
| Cash received from disposal of investments | ||
| Net cash received from disposal of fixed, intangible and other long-term assets | 68,670.00 | |
| Other cash received concerning investing activities | ||
| Sub-total of cash inflows from investing activities | 68,670.00 | |
| Cash paid to acquire and construct fixed assets, intangible assets and other long-term assets | 591,546.00 | 1,040,626.12 |
| Cash paid for other investing activities | 1,000,000.00 | |
| Sub-total of cash outflows from investing activities | 591,546.00 | 2,040,626.12 |
| Net cash flows from investing activities | -522,876.00 | -2,040,626.12 |
III. Cash flows from financing activities
| III. Cash flows from financing activities | ||
| Cash received from loans | ||
| Sub-total of cash inflows from financing activities | ||
| Cash paid for settling debts | ||
| Cash paid for other financing activities | ||
| Sub-total of cash outflows from financing activities | ||
| Net cash flows from financing activities | ||
| IV. Effect of fluctuation on exchange rate on cash and cash equivalents | ||
| V. Net increase in cash and cash equivalents | 746,041.86 | 1,070,051.48 |
| Plus: balance of cash and cash equivalents at the beginning of the period | 14,864,055.73 | 9,681,607.16 |
| VI. Balance of cash and cash equivalents at the end of the period | 15,610,097.59 | 10,751,658.64 |
Legal Representative: Yuan Xiaoping Accounting Principal: Fu ZongrenThe Accounting Firm’s Principal: Fu Zongren
Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd.Consolidated Statement of Changes in Owners’ Equity
(Expressed in Renminbi unless otherwise stated)
| Item | Semi-annual of 2019 | ||||||||||||||
| Equity attributable to owners of parent company | Minority’s equity | Total owner's equity | |||||||||||||
| Share capital | Other equity instrument | Capital reserve | Less: treasury stock | Other comprehensive income | Special reserve | Surplus reserves | General risk provision | Undistributed profit | Other | Subtotal | |||||
| Preferred stock | Perpetual capital se | Other | |||||||||||||
curities
| curities | |||||||||||||||
| I. Balance as at the end of last year | 364,100,000.00 | 54,142,850.01 | -340,454,153.72 | 77,788,696.29 | 77,788,696.29 | ||||||||||
| Plus: Changes in accounting policies | |||||||||||||||
| Error correction of the last period | |||||||||||||||
| II. Balance as at the beginning of year | 364,100,000.00 | 54,142,850.01 | -340,454,153.72 | 77,788,696.29 | 77,788,696.29 | ||||||||||
| III. Increases/decreases in the period | 755,974.01 | 755,974.01 | 755,974.01 | ||||||||||||
| (i) Total comprehensive income | 755,974.01 | 755,974.01 | 755,974.01 | ||||||||||||
| (ii) Capital contributed or reduced by owners | |||||||||||||||
| 1.Common shares invested by shareholders | |||||||||||||||
| 2. Capital invested by holders of other equity instruments | |||||||||||||||
| 3. Amount reckoned into owners equity with share-based payment | |||||||||||||||
| 4. Other | |||||||||||||||
| (III) Profit distribution | |||||||||||||||
| 1. Withdrawal of surplus reserves | |||||||||||||||
| 2. Withdrawal of general risk provisions | |||||||||||||||
| 3. Distribution for owners (or shareholders) | |||||||||||||||
| (IV) Internal carry-forward of owners' equity | |||||||||||||||
| 1. Conversion of capital reserves into paid-in capital (or share capital) | |||||||||||||||
| 2. Surplus reserves conversed to capital (share capital) | |||||||||||||||
| 3. Remedying loss with surplus reserve | |||||||||||||||
| (V) Special reserves | |||||||||||||||
| 1. Withdrawal in the period |
2. Use in the period
| 2. Use in the period | |||||||||||||||
| (VI) Others | |||||||||||||||
| IV. Balance as at the end of the period | 364,100,000.00 | 54,142,850.01 | -339,698,179.71 | 78,544,670.30 | 78,544,670.30 |
Legal Representative: Yuan Xiaoping Accounting Principal: Fu ZongrenThe Accounting Firm’s Principal: Fu Zongren
Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd.Consolidated Statement of Changes in Owners’ Equity (Cont’)
(Expressed in Renminbi unless otherwise stated)
| Item | Semi-annual of 2018 | ||||||||||||||
| Equity attributable to owners of parent company | Minority’s equity | Total owner's equity | |||||||||||||
| Share capital | Other equity instrument | Capital reserve | Less: treasury stock | Other comprehensive income | Special reserve | Surplus reserves | General risk provision | Undistributed profit | Other | Subtotal | |||||
| Preferred stock | Perpetual capital securities | Other | |||||||||||||
| I. Balance as at the end of last year | 364,100,000.00 | 54,142,850.01 | -341,107,435.91 | 77,135,414.10 | 77,135,414.10 | ||||||||||
| Plus: Changes in | |||||||||||||||
accounting policies
| accounting policies | |||||||||||||||
| Error correction of the last period | |||||||||||||||
| II. Balance as at the beginning of year | 364,100,000.00 | 54,142,850.01 | -341,107,435.91 | 77,135,414.10 | 77,135,414.10 | ||||||||||
| III. Increases/decreases in the period | 1,282,165.58 | 1,282,165.58 | 1,282,165.58 | ||||||||||||
| (i) Total comprehensive income | 1,282,165.58 | 1,282,165.58 | 1,282,165.58 | ||||||||||||
| (ii) Capital contributed or reduced by owners | |||||||||||||||
| 1.Common shares invested by shareholders | |||||||||||||||
| 2. Capital invested by holders of other equity instruments | |||||||||||||||
| 3. Amount reckoned into owners equity with share-based payment | |||||||||||||||
| 4. Other | |||||||||||||||
| (III) Profit distribution | |||||||||||||||
| 1. Withdrawal of surplus reserves | |||||||||||||||
| 2. Withdrawal of general risk provisions | |||||||||||||||
| 3. Distribution for owners (or shareholders) | |||||||||||||||
| (IV) Internal carry-forward of owners' equity | |||||||||||||||
| 1. Conversion of capital reserves into paid-in capital (or share capital) | |||||||||||||||
| 2. Surplus reserves conversed to capital (share capital) | |||||||||||||||
| 3. Remedying loss with surplus reserve | |||||||||||||||
| (V) Special reserves | |||||||||||||||
| 1. Withdrawal in the period | |||||||||||||||
| 2. Use in the period | |||||||||||||||
| (VI) Others | |||||||||||||||
| IV. Balance as at the end of the period | 364,100,000.00 | 54,142,850.01 | -339,825,270.33 | 78,417,579.68 | 78,417,579.68 |
Legal Representative: Yuan Xiaoping Accounting Principal: Fu ZongrenThe Accounting Firm’s Principal: Fu Zongren
Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd.
Change of owners’ equity of parent company(Expressed in Renminbi unless otherwise stated)
| Item | Semi-annual of 2019 |
Share capital
| Share capital | Other equity instrument | Capital reserve | Less: treasury stock | Other comprehensive income | Special reserve | Surplus reserves | Undistributed profit | Other | Total owner's equity | |||
| Preferred stock | Perpetual capital securities | Other | ||||||||||
| I. Balance at the end of the last year | 364,100,000.00 | 54,142,850.01 | -340,454,153.72 | 77,788,696.29 | ||||||||
| Add: Changes of accounting policy | ||||||||||||
| Error correction of the last period | ||||||||||||
| Other | ||||||||||||
| II. Balance at the beginning of this year | 364,100,000.00 | 54,142,850.01 | -340,454,153.72 | 77,788,696.29 | ||||||||
| III. Increase/ Decrease in this year (Decrease is listed with “-”) | 755,475.22 | 755,475.22 | ||||||||||
| (i) Total comprehensive income | 755,475.22 | 755,475.22 | ||||||||||
| (ii) Owners’ devoted and decreased capital | ||||||||||||
| 1.Common shares invested by shareholders | ||||||||||||
| 2. Capital invested by holders of other equity instruments | ||||||||||||
| 3. Amount reckoned into owners equity with share-based payment | ||||||||||||
| 4. Other | ||||||||||||
| (III) Profit distribution | ||||||||||||
| 1. Withdrawal of surplus reserves | ||||||||||||
| 2. Distribution for owners (or shareholders) | ||||||||||||
| 3. Other | ||||||||||||
| (IV) Carrying forward internal owners’ equity | ||||||||||||
| 1. Capital reserves conversed to capital (share capital) | ||||||||||||
| 2. Surplus reserves conversed to capital (share capital) | ||||||||||||
| 3. Remedying loss with surplus | ||||||||||||
reserve
| reserve | ||||||||||||
| (V) Reasonable reserve | ||||||||||||
| 1. Withdrawal in the report period | ||||||||||||
| 2. Usage in the report period | ||||||||||||
| (VI)Others | ||||||||||||
| IV. Balance at the end of the report period | 364,100,000.00 | 54,142,850.01 | -339,698,678.50 | 78,544,171.51 |
Legal Representative: Yuan Xiaoping Accounting Principal: Fu ZongrenThe Accounting Firm’s Principal: Fu Zongren
Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd.Change of owners’ equity of parent company (Cont’)
(Expressed in Renminbi unless otherwise stated)
| Item | Semi-annual of 2018 | |||||||||||
| Share capital | Other equity instrument | Capital reserve | Less: treasury stock | Other comprehensive income | Special reserve | Surplus reserves | Undistributed profit | Other | Total owner's equity | |||
| Preferred stock | Perpetual capital securities | Other | ||||||||||
| I. Balance at the end of the last year | 364,100,000.00 | 54,142,850.01 | -341,107,435.91 | 77,135,414.10 | ||||||||
| Add: Changes of accounting policy | ||||||||||||
| Error correction of the last period | ||||||||||||
| Other | ||||||||||||
| II. Balance at the beginning of this year | 364,100,000.00 | 54,142,850.01 | -341,107,435.91 | 77,135,414.10 | ||||||||
| III. Increase/ Decrease in this year (Decrease is listed with “-”) | 1,282,165.58 | 1,282,165.58 | ||||||||||
| (i) Total comprehensive income | 1,282,165.58 | 1,282,165.58 | ||||||||||
| (ii) Owners’ devoted and decreased capital | ||||||||||||
| 1.Common shares invested by shareholders | ||||||||||||
2. Capital invested by holders of other
equity instruments
| 2. Capital invested by holders of other equity instruments | ||||||||||||
| 3. Amount reckoned into owners equity with share-based payment | ||||||||||||
| 4. Other | ||||||||||||
| (III) Profit distribution | ||||||||||||
| 1. Withdrawal of surplus reserves | ||||||||||||
| 2. Distribution for owners (or shareholders) | ||||||||||||
| 3. Other | ||||||||||||
| (IV) Carrying forward internal owners’ equity | ||||||||||||
| 1. Capital reserves conversed to capital (share capital) | ||||||||||||
| 2. Surplus reserves conversed to capital (share capital) | ||||||||||||
| 3. Remedying loss with surplus reserve | ||||||||||||
| (V) Reasonable reserve | ||||||||||||
| 1. Withdrawal in the report period | ||||||||||||
| 2. Usage in the report period | ||||||||||||
| (VI)Others | ||||||||||||
| IV. Balance at the end of the report period | 364,100,000.00 | 54,142,850.01 | -339,825,270.33 | 78,417,579.68 |
Legal Representative: Yuan Xiaoping Accounting Principal: Fu ZongrenThe Accounting Firm’s Principal: Fu Zongren
Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd.
NOTES TO FINANCIAL STATEMENT
SEMI-ANNUAL 2019
1. Company basic information
1.1 Company Profile
Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd. (hereinafter referred to as “the Company”),was founded as a standardized LLC on April 26, 1993, reorganized and incorporated on the basis ofthe former Hainan Sanya Dadonghai Tourism Centre Development Ltd. and approved by the HainanProvincial Stock System Experimentation Leading Team Office with a document of Qiong Gu Ban Zi[1993] No. 11. On May 6, 1996, the Company underwent a restructuring and a corresponding divisionunder the approval of the Hainan Provincial Securities Administration Office with a document ofQiong Zheng Ban [1996] No. 58. On October 8, 1996 and January 28, 1997, the Company, with dulyapproval, went public by issuing 80 million shares of B stock and 14 million shares of A stockrespectively on Shenzhen Security Exchange. On June 20, 2007, the Company experienced a reform
of non-tradable shares, through which non-tradable share holders of the Company got circulating rightof their shares by paying shares to tradable share holders, and tradable share holders got paid threeshares for every ten of their shares. The Company operates business in the industry of tourism andcatering services.As at 30 June 2019, the Company's accumulative total issued capital was 364.1 million shares and theCompany's registered capital was RMB 364.1 million. Legal representative: Yuan Xiaoping. Unifiedsocial credit code: 91460000201357188U. Domicile: Dadonghai, Hedong District, Sanya. Businessscope: Accommodation and catering industry (limited to branches); photography; flower bonsai,knitwear, general merchandise, hardware, chemical products (except franchised operations), dailynecessities, industrial means of production (except franchised operations), metal materials, machineryequipment; sales of train, bus, vehicle tickets on an agent basis etc. The Company's largestshareholder is Luoniushan Co., Ltd.
1.2 Scope to the consolidated financial statements
Scope of the consolidated financial statement for the period has no changes, the subsidiaryincluded into the Company's scope of consolidated financial statements is as follows:
Name
| Name | Relationship with the Company |
| Hainan Wengao Tourist Resources Development Co., Ltd. | A wholly-owned subsidiary |
The financial statements were approved by the board of directors of the Company on 8 August2019 for disclosure.
2. Basis of preparation of the financial statements
2.1. Preparation basis
Based on going concern and according to actually occurred transactions and events, the Company preparedfinancial statements in accordance with the Accounting Standards for Business Enterprises — BasicStandards and the specific accounting standards, Application Guidance to the Accounting Standards forBusiness Enterprises, the interpretation of the Accounting Standards for Business Enterprises and otherrelevant provisions (hereinafter referred to collectively as the "Accounting Standards for BusinessEnterprises"), as well as the disclosure provisions of the Rules for the Compilation and Submission ofInformation Disclosure by Companies Offering Securities to the Public No.15 - General Requirements forFinancial Reports (Revised in 2014).
2.2. Going concern
The Company currently has sufficient working capital and normal operating conditions. It is estimated thatthe operating activities of the Company will continue in the next 12 months.
3. Significant accounting policies and accounting estimates
Main accounting policies and accounting estimates have no changes in the period
3.1. Statement on compliance with the Accounting Standards for Business EnterprisesThe financial statements prepared by the Company comply with the requirements of the AccountingStandards for Business Enterprises, and truly and completely present the financial position, operatingresults, cash flows of the Company and other related information.
3.2. Accounting period
The accounting year is from January 1 to December 31 in calendar year.
3.3. Operating cycle
The Company's operating cycle is 12 months.
3.4. Reporting currency
The Company adopts RMB as its reporting currency.
3.5. Scope of consolidation (aggregation) of financial statements
As of 30 June 2018, the scope of consolidation (aggregation) of financial statement including theindependent accounting of the non-legal person -South China Grand Hotel of Hainan Dadonghai TourismCentre (Holdings) Co., Ltd
3.6. Recognition criteria of cash and cash equivalents
For the purpose of preparing the statement of cash flows, the term “cash” refers to the cash on hand andthe unrestricted deposit. The term “cash equivalents” refers to short-term (maturing within three monthsfrom acquisition) and highly liquid investments that are readily convertible to known amounts of cash andwhich are subject to an insignificant risk of change in value.
3.7. Foreign currency transactions and conversion for statement in foreign languagesForeign currency transactions are converted into RMB for recording purpose at the spot exchange rate onthe date when the transaction occurs.
Balances of foreign currency monetary items are measured at the spot exchange rate on the balance sheetdate. The exchange difference arising wherefrom shall be included in the current profit and loss, exceptthat those exchange differences arising from the special borrowings of foreign currency related to theacquired and constructed assets qualified for capitalization shall be dealt with according to the principle ofborrowing cost capitalization. Foreign currency non-monetary items measured at historical costs shall stillbe converted at the spot exchange rates on the date when the transactions occur, and the amount infunctional currency shall remain unchanged. Foreign currency non-monetary items measured at fair valueshall be translated at the spot exchange rates on the date when the fair value is determined. The exchangedifference arising wherefrom shall be included in the current profit and loss or capital reserves.
3.8. Financial instruments
Financial instruments include financial assets, financial liabilities and equity instruments.
1) Classification of financial instruments
Financial assets and liabilities are classified into the following categories according to the purpose ofacquisition: financial assets or financial liabilities measured at fair value and whose variation is included inthe current profit and loss, including financial assets or financial liabilities held for trading and financialassets or financial liabilities directly designated to be measured at fair value through current profit and loss,held-to-maturity investments, accounts receivables, available-for-sale financial assets and other financialliabilities, etc.
2) Recognition basis and measurement method of financial instruments
1) Financial assets (financial liabilities) measured at fair value and whose variation is included in thecurrent profit and lossFinancial assets (financial liabilities) are initially recorded at fair values when acquired (deducting cashdividends that have been declared but not distributed and bond interests that have matured but not beendrawn). Relevant transaction expenses are included in the current profit and loss.
The interests or cash dividends to be received during the holding period are recognized as investmentincome. Change in fair values is included in the current profit and loss at the end of the period.
Difference between the fair value and initial book-entry value is recognized as investment income upondisposal; meanwhile, adjustment is made to gains or losses from changes in fair values.
2) Held-to-maturity investments
Held-to-maturity investments are initially recorded at fair values plus the related trade expenses whenacquired (deducting bond interests that have matured but not been drawn).
The interest revenue calculated at amortization cost and effective interest rate (nominal interest rate isadopted when the difference between the actual interest rate and the nominal interest rate is minor) duringthe holding period is recognized as investment income. Effective interest is recognized when obtained, andremains unchanged in the predictable holding period or applicable shorter period.
The difference between the amount received and the book value of the investment is included in theinvestment profit and loss upon disposal.
3) Accounts receivable
For creditor’s rights receivable arising from external sales of goods or rendering of service by theCompany and other creditor's rights of other enterprises (excluding liability instruments quoted in anactive market) held by the Company, including accounts receivable, other receivables, notes receivableand prepayments, etc., the initial recognition amount shall be the contract price or agreement pricereceivable from purchasing party. Accounts receivable with financing nature are initially recognized attheir present values.
The difference between the amount received and the book value of the accounts receivable is included inthe current profit and loss upon recovery or disposal.
4) Available-for-sale financial assets
Available-for-sale financial assets are initially recorded at fair values plus the related trade expenses whenacquired (deducting cash dividends that have been declared but not been paid or bond interests that havematured but not been drawn).
The interests or cash dividends to be received during the holding period are recognized as investmentincome. It is measured in fair value at the end of the period and change in fair values is included in othercomprehensive income at the end of the period. However, the equity instrument investments unquoted inan active market and whose fair value cannot be measured reliably, and the derivative financial assetswhich are connected with the said equity instrument and must be settled by delivering the said equityinstrument shall be measured on the costs basis.
The difference between the amount received and the book value of the financial asset is included in theinvestment profit and loss upon disposal. Meanwhile, the corresponding part of fair value accumulatedchange accounted as other comprehensive income is transferred into investment profit or loss.
5) Other financial liabilities
Other financial liabilities are initially recognized at the sum of fair value and transaction expenses andsubsequently measured at amortized costs.
3) Recognition basis and measurement method of transfer of financial assetsWhen transfer of financial assets occurs, if nearly all of the risks and rewards of ownership of the financialassets have been transferred to the transferee, the Company derecognizes the financial assets; if nearly allof the risks and rewards of ownership of the financial assets are retained, the Company shall notderecognize the financial assets.
The principle of substance over form is adopted to determine whether the transfer of a financial assetsatisfies the criteria as described above for derecognition of a financial asset. The Company shall classifythe transfer of a financial asset into the entire transfer and the partial transfer of financial asset. If the entiretransfer of financial asset satisfies the criteria for derecognition, the difference between the amounts of thefollowing two items shall be included in the current profit and loss:
1) The book value of the transferred financial asset;
2) The sum of the consideration received from the transfer and the accumulated amount of the changes infair value originally and directly included in owners’ equity (the situation where the financial assettransferred is an available-for-sale financial asset is involved in)
If the partial transfer of financial asset satisfies the criteria for derecognition, the entire book value of thetransferred financial asset shall be split into the derecognized and recognized part according to theirrespective fair value and the difference between the amounts of the following two items shall be includedin the current profit and loss:
1) The book value of derecognized part;
2) The sum of the consideration for the derecognized part and the portion of derecognition correspondingto the accumulated amount of the changes in fair value originally and directly included in owners’ equity(the situation where the financial asset transferred is an available-for-sale financial asset is involved in).
If the transfer of financial assets does not meet the derecognition criteria, the financial assets shall continueto be recognized, and the consideration received will be recognized as a financial liability.
4) Derecognition criteria of financial liabilities
A financial liability shall be totally or partly derecognized if its present obligations are totally or partlydissolved. Where the Company enters into an agreement with a creditor so as to substitute the existingfinancial liabilities with any new financial liability, and the new financial liability is substantially differentfrom the contractual stipulations regarding the existing financial liability, it shall derecognize the existingfinancial liability, and shall at the same time recognize a new financial liability.
Where substantial revisions are made to some or all of the contractual stipulations of the existing financial
liability, the Company shall derecognize the existing financial liability totally or partly, and at the sametime recognize the financial liability with revised contractual stipulations as a new financial liability.
Upon total or partial derecognition of financial liabilities, the difference between the book value of thefinancial liabilities derecognized and the consideration paid (including non-cash assets surrendered or newfinancial liabilities assumed) shall be included in the current profit and loss.
Where the Company redeems part of its financial liabilities, it shall, on the redemption date, allocate theentire book value of whole financial liabilities according to the comparative fair value of the part thatcontinues to be recognized and the de-recognized part. The difference between the book value allocated tothe derecognized part and the considerations paid (including non-cash assets surrendered and the newfinancial liabilities assumed) shall be included in the current profit and loss.
5) Method of determining the fair value of financial assets and financial liabilitiesFor financial instruments with active market, their fair values are determined with quoted market price.For financial instruments without active market, their fair values are determined by using valuationtechnique. During the valuation, the Company use valuation techniques that are appropriate in thecircumstances and for which sufficient data and other information are available to measure fair value,select inputs that are consistent with the characteristics of the asset or liability that market participantswould take into account in a transaction for the asset or liability, and give priority to the use of relevantobservable inputs. Unobservable inputs are only adopted when relevant observable inputs cannot beobtained or are impracticable to obtain.
6) Providing of impairment provision on financial assets (exclude receivable accounts)The Company performs inspection on the book value of financial assets apart from those financial assetsmeasured at fair value through current profit and loss on the balance sheet date. Impairment provision isrequired if objective evidences of impairment occurs to the financial assets.
1) Impairment provision of available-for-sale financial assets:
If there is a serious decline in fair value of the available-for-sale financial assets at the end of the period, orsuch decline is not temporary after considering various factors, the impairment shall be confirmed, theaccumulated losses due to decreases in fair value previously included in owner’s equity shall be reversed,and the impairment loss shall be recognized.
If, in a subsequent period, the carrying amount of available-for-sale debt instruments investments increases
and the increase can be related objectively to an event occurring after the impairment was recognized, thepreviously recognized impairment losses are reversed, included in current profit or loss.
The impairment losses of available-for-sale equity instruments cannot be reversed through profit or loss.
2) Impairment provision of held-to-maturity investment:
Measurement of held-to-maturity investment impairment loss is governed by measurement of accountreceivables impairment loss.
3.9. Account receivable
1) Account receivable with individually significant amount and with bad debt provision accrualindependently
Basis and standard for "individuallysignificant"
| Basis and standard for "individually significant" | Top 5 accounts receivable and other receivables by individual amount at the end of the year |
| Methods for provision for bad debts of receivables with individually significant amount: | The Company will separately conduct an impairment test on an individual basis and the allowance for bad debts will be made at the lower of the present value of the expected future cash flow and the book value thereof and included in current profit and loss. Those do not impair after the separate test shall be included into corresponding portfolio for provision for bad debts. If separate test indicates that there is impairment of receivables, they shall not be included the receivables portfolio with similar risk credit characteristics for an impairment test. |
2) Receivables with bad debt provision accrual by credit portfolio:
| Portfolio | Methods for provision for bad debts | |
| Receivables provided for bad debts on a portfolio basis | Aging analysis | |
| Aging | Provision ratio for receivables | Proportion ratio for other receivables |
| Within 1 year (inclusive) | 0.00% | 0.00% |
| 1-2 years | 5.00% | 5.00% |
| 2-3 years | 15.00% | 15.00% |
| 3-4 years | 25.00% | 25.00% |
| 4-5 years | 50.00% | 50.00% |
| Over 5 years | 100.00% | 100.00% |
3) Accounts receivable with individually insignificant amounts and individualallowance for bad debt
Reasons for separate provision of allowancefor bad debts
| Reasons for separate provision of allowance for bad debts | At the end of the year, there are objective evidences showing that the individual balances below top five are impaired; for example, the debtor is dissolved, bankrupts or dies, and therefore the receivables cannot be recovered after the bankruptcy property or the estate is repaid. |
| Provision method of allowance for bad debts | if there is an objective evidence that the impairment on receivables has occurred, such receivables shall be separated from relevant portfolio to conduct impairment test separately, based on which the impairment losses are recognized. Receivables other than accounts receivable and other receivables are subject to impairment provision by using the specific identification methods. |
3.10. Inventories
1) Classification
Inventories are classified into: raw materials, stock commodities, low-cost consumables, good materials,fuel, etc.
2) Valuation method of inventories dispatched
Stock commodity is accounted for at the selling price and the difference between the purchase and saleprices are adjusted on a monthly basis by using the integrated price difference rate. The purchase andstorage of all materials of inventories is measured at actual cost, and by using the first-in first-out methodwhen applied for use. Low-cost consumables are amortized at lump-sum method when applied for use.
3) Determining basis of the net realizable value of inventories and method for inventory impairmentprovisionAfter the comprehensive inventory count at the end of the period, provisions for inventory depreciation reserveare made or adjusted at the lower of their costs or net realizable values.For merchandise inventories for direct sale, including stock commodities, goods in progress and materialsfor sale, during normal operations, their net realizable values are recognized at the estimated selling pricesminus the estimated selling expenses and the relevant taxes and surcharges; for material inventories heldfor production, their net realizable values are recognized at the estimated selling prices of finished goodsminus estimated costs until completion, estimated selling expenses and relevant taxes and surcharges.The provisions for inventory depreciation reserve are made on an individual basis at the end of the period;for inventories with large quantities and relatively low unit prices, the provisions for inventorydepreciation reserve are made on a category basis. For inventories related to the product portfoliosmanufactured and sold in the same area, and of which the final usage or purpose is identical or similarthereto, and which is difficult to separate from other items for measurement purposes, the provisions forinventory depreciation reserve are made on a portfolio basis.Where the previous factors affecting the written-down of the value of inventory have disappeared, theamount of write-down shall be resumed and be reversed from the original provision for inventorydevaluation with the reversal being included in current profit and loss.
4) Inventory system
The perpetual inventory system is adopted for accounting.
5) Amortization methods for low-cost consumables and packaging materials
1) Low-cost consumables are amortized at lump-sum method;
2) Packaging materials: lump-sum write-off method.
3.11. Long-term equity investments
1) Judgment criteria for common control and significant influence
Joint control refers to the control shared over an arrangement in accordance with the relevant stipulations,and the decision-making of related activities of the arrangement should not be made before the partysharing the control right agrees the same. Where the Company exercises joint control over the investeetogether with other parties to the joint venture and enjoys the right on the investee's net assets, the investeeis a joint venture of the Company.Significant influence refers to the power to participate in making decisions on the financial and operatingpolicies of an enterprise, such as appointing representative to the board of directors or similar organs ofauthority of the investee, but not the power to control the investee, or jointly control, the formulation ofsuch policies with other parties. Where an investor is able to have significant influences on an investee, theinvestee shall be the Company's associate.
2) Determining of initial investment cost
1) Long-term equity investment acquired from business combination
Business combination under the common control: if the Company pays a consideration to the combinee incash, by transferring non-cash assets or by assuming debts, the share of book value of its owners' equity inthe combinee in the consolidated financial statements of the ultimate controlling party shall be regarded,on the merger date, as the initial investment cost of the long-term equity investment. If there is a differencebetween the initial investment cost of the long-term equity investment and the total of book values of thepaid cash, transferred non-cash assets and of assumed debts as well as the face value of issued share, thedifference shall be used to adjust the share premium in the capital reserve; and if the share premium in thecapital reserve is insufficient to be offset, retained earnings shall be adjusted.In case the Company can exercise control over the investee under common control for additionalinvestment or other reasons, the initial investment cost of long-term equity investments is recognized atthe share of book value of net asset of the acquiree after the combination in the consolidated financialstatements of the ultimate controller on the combination date. The stock premium should be adjusted at thedifference between the initial investment cost of long-term equity investments on the combination date andthe book value of long-term equity investments before the combination plus the book value ofconsideration paid for additional shares; if there is no sufficient stock premium for write-downs, theretained earnings are adjusted.
Business combination not under the common control: the Company recognizes the combination costdetermined on the combination date as the initial cost of long-term equity investments. Where theCompany can control the investee not under common control from additional investments, the initialinvestment cost should be changed to be accounted for under the cost method and recognized at the sum ofthe book value of equity investments originally held and newly increased investment cost. Under businesscombination not under the common control, the auditing, legal services, consulting and other intermediaryfees and other related administrative expenses for business combination will be included into current profitand loss upon occurrence; the transaction costs for the issuance of equity securities or debt securities shallbe included into the initial recognition amount of equity securities or debt securities.
2) Long-term equity investments obtained by other means
For long-term equity investments acquired from making payments in cash, the initial cost is the actuallypaid purchase cost.For long-term equity investments acquired from issuance of equity securities, the initial investment cost isthe fair value of the issued equity securities.If the exchange of non-monetary assets has commercial substance and the fair values of assets traded outand traded in can be measured reliably, the initial cost of long-term equity investment traded in withnon-monetary assets are determined based on the fair values of the assets traded out and the relevant taxesand surcharges payable unless there is any conclusive evidence that the fair values of the assets traded inare more reliable; if the exchange of non-monetary assets does not meet the above criteria, the book valueof the assets traded out and the relevant taxes and surcharges payable are recognized as the initial cost oflong-term equity investment traded in.For long-term equity investment acquired from debt restructuring, the initial cost is determined based onthe fair value.
3. Subsequent measurements and recognition of gain or loss
1) Long-term equity investment under cost method
Long-term equity investments in subsidiaries are accounted for under the cost method. Except for theactual price paid for acquisition of investment or the cash dividends or profits contained in theconsideration which have been declared but not yet distributed, the Company recognizes the investmentincome in the current year at the cash dividends or profits declared by the investee.
2) Long-term equity investment accounted for in the equity method
The Company's long-term equity investments in associates and joint ventures are accounted for by usingthe equity method. If the initial cost is more than the share of the fair value of the investee' identifiable netasset to which the Company shall be entitled when investing, the initial cost of the long-term equityinvestment will not be adjusted. If the initial cost of a long-term equity investment is less than the share ofthe fair value of the investee's identifiable net asset to which the Company shall be entitled when investing,the difference shall be included in the current profit or loss.
The Company respectively recognizes the investment income and other comprehensive income accordingto the shares of net profit or loss and other comprehensive income realized by the investee that shouldenjoyed or assumed by the Company, and adjusts the book value of long-term equity investment;according to the profit declared to be distributed by the investee or the part shall be enjoyed cash dividendscalculation, to reduce the book value of long-term equity investment correspondingly; for other changesinowners' equity excepting for ex all profit or loss of the investee, other comprehensive income and profitdistribution, the book value of long-term equity investment shall be adjusted and included in the owners'equity.
When recognizing the share of net profit or loss of the investee that the Company shall enjoy, based on fairvalue of various identifiable assets and others of the investee on acquisition and according to accountingpolicies and accounting periods of the Company, the Company shall recognize such share after makingadjustments to net profit of the investee. When holding the investment, the investee should prepare theconsolidated financial statements, it shall account for the investment income based on the net profit, othercomprehensive income and the changes in other owner's equity attributable to the investee.The Company shall write off the part of incomes from internal unrealized transactions between theCompany and associates and joint ventures which are attributable to the Company according to thecorresponding ratio and recognize the profit and loss on investments on such basis. Where the losses frominternal transactions between the Company and the investee fall into the scope of assets impairment loss,the full amount of such losses should be recognized. For transactions on investments or sales of assetsbetween the Company and associates and joint ventures, where such assets constitute business, they shouldbe accounted for according to the relevant policies.
When the Company recognizes its share of loss incurred to the investee, treatment shall be done in thefollowing sequence: firstly, the book value of the long-term equity investment shall be reduced; secondly,where the book value thereof is insufficient to cover the share of losses, investment losses are recognizedto the extent of book value of other long-term equities which form net investment in the investee insubstance and the book value of long term receivables shall be reduced. Finally, after all the abovetreatments, if the Company is still responsible for any additional liability in accordance with the provisionsstipulated in the investment contracts or agreements, provisions are recognized and included into currentinvestment loss according to the obligations estimated to undertake. An investing party shall recognize thenet loss incurred by the invested entity until the book value of the long-term equity investment and otherlong-term interests which substantially form the net investment in the invested entity are reduced to zero,unless the investing party is obliged to undertake extra losses. If the invested entity realizes any net profitlater, the investing party shall, after the amount of its attributable share of profits offsets its attributableshare of the unrecognized losses, resume recognizing its attributable share of profits.
3) Disposal of long-term equity investments
For disposal of long-term equity investments, the difference between the book value and the actual priceshall be included into the current profit or loss.
Where a long-term equity investment is accounted for under the equity method, accounting treatmentshould be made on the part which is originally included in other comprehensive income according tocorresponding ratio by using the same basis for the investee to directly dispose of the relevant assets orliabilities when the investments are disposed of. Owner's equity recognized from the investee's changes inother owner's equity other than net profit or loss, other comprehensive income and profit distributionshould all transferred to the current profit and loss in proportion.
In case the joint control or significant influence over the investee is lost for disposing part of equityinvestments or other reasons, the remaining equity will be changed to be accounted for according to therecognition and measurement principles of financial instruments. The difference between the fair valueand the book value on the date of the loss of joint control or significant influence should be included in thecurrent profit and loss. As to other comprehensive income recognized based on measurement of theoriginal equity investment under the equity method, accounting treatment shall be made on the same basisas would be required if the investee had directly disposed of the assets or liabilities related thereto whenmeasurement under the equity method is terminated. Owner's equity recognized from the investee'schanges in other owner's equity other than net profit or loss, other comprehensive income and profitdistribution should all transferred to the current profit and loss when the equity method confirmed is nolonger adopted.
Where the Company loses the control over the investee due to disposal of partial equity investments orother reasons, when it prepares separate financial statements, the remaining equity after disposal that canjointly control or have significant influence on the investee will be measured at the equity method, and theremaining equity should be deemed to have been adjusted at equity method on acquisition;If the remaining equity after disposal cannot exercise joint control or significant influence on the investee,such investments should be accounted for according to the provisions on the recognition and measurementof financial instruments and the difference between fair value and book value on the date of loss of thecontrol should be included in the current profit and loss.
Where the disposed equities are acquired by the enterprise combination due to the reasons such asadditional investment, the remaining equities after the disposal are calculated based on the cost method orequity method in preparing the individual financial statements, and other comprehensive income and otherowners' equity recognized because of the equity method adopted for the calculation of the equityinvestment held prior to the purchase date are carried forward in proportion; the remaining equities afterthe disposal are changed to be made in accordance with the relevant provisions in the recognition andmeasurement criteria of financial instruments while other comprehensive income and other owners' equity
are carried forward in full.
3.12. Investment property
Measurement modeMeasured by cost methodDepreciation or amortization methodInvestment properties are properties to earn rentals or for capital appreciation or both. Examples includeland leased out under operating leases, land held for long-term capital appreciation, buildings leased outunder operating leases, (including buildings that have been constructed or developed for future lease outunder operating leases, and buildings that are being constructed or developed for future lease out underoperating leases).The Company measures the existing investment properties by using the cost model. For investmentproperty measured by using the cost model, the buildings for lease shall be depreciated by using policiesthe same as used for fixed assets of the Company, and the land use rights for lease shall be amortized byusing the same policies as applicable to intangible assets.
3.13. Fixed assets
1) Recognition criteria of fixed assets
Fixed assets refer to the tangible assets held for the purpose of producing commodities, rendering services,renting or business management with useful lives exceeding one year. Fixed assets are recognized whenthey simultaneously meet the following conditions:
(1) It is probable that the economic benefits relating to the fixed assets will flow into the Company; and
(2) The costs of the fixed asset can be measured reliably.
2) Depreciation method of fixed assets
Asset type
| Asset type | Depreciation method | Year for depreciation | Residual value rate | Yearly depreciation rate |
| Houses and buildings | Straight-line method | 20-40 | 5 | 4.75-2.37 |
| Mechanical equipment | Straight-line method | 8-20 | 5 | 11.87-4.75 |
| Entertainment equipment | Straight-line method | 5-16 | 5 | 19-5.93 |
| Transportation equipment | Straight-line method | 7-12 | 5 | 13.57-7.91 |
3.14. Construction in progress
The book-entry values of the fixed assets are stated at total expenditures incurred before reaching workingcondition for their intended use. For construction in progress that has reached working conditions for its
intended use but for which the completion of settlement has not been handled, it shall be transferred intofixed assets at the estimated value according to the project budget, construction price or actual cost, etc.from the date when it reaches the working conditions for its intended use. The fixed assets shall bedepreciated in accordance with the Company’s policy on fixed asset depreciation. Adjustment shall bemade to the originally and provisionally estimated value based on the actual cost after the completion ofsettlement is handled, but depreciation already provided will not be adjusted.
3.15 Borrowing costs
1) Recognition principles of capitalization of borrowing costs
Borrowing costs include the interest of borrowings, the amortization of discount or premium, auxiliaryexpenses, exchange differences incurred by foreign currency borrowings, etc.The borrowing costs incurred to the Company and directly attributable to the acquisition and constructionor production of assets eligible for capitalization should be capitalized and recorded into relevant assetcosts; other borrowing costs should be recognized as costs according to the amount incurred and beincluded into the current profit and loss.Assets eligible for capitalization refer to fixed assets, investment property, inventories and other assetswhich may reach their intended use or sale status only after long-time acquisition and construction orproduction activities.Borrowing costs may be capitalized only when all the following conditions are met at the same time:
1) Asset disbursements, which include those incurred by cash payment, the transfer of non-cash assets orthe undertaking of interest-bearing debts for acquiring and constructing or producing assets eligible forcapitalization, have already been incurred;
2) Borrowing costs have already been incurred;
3) Purchase, construction or manufacturing activities that are necessary to prepare the assets for theirintended use are in progress.
2) Capitalization period of borrowing costs
Capitalization period refers to the period from commencement of capitalization of borrowing costs to itscessation; period of suspension for capitalization is excluded.Capitalization of borrowing costs should cease when the acquired and constructed or produced assetseligible for capitalization have reached the working condition for their intended use or sale.When some projects among the acquired and constructed or produced assets eligible for capitalization arecompleted and can be used separately, the capitalization of borrowing costs of such projects should beceased.If all parts of the acquired and constructed or produced assets are completed but the assets cannot be usedor sold externally until overall completion, the capitalization of borrowing costs should be ceased at thetime of overall completion of the said assets.
3) Period of suspension for capitalization
If the acquisition and construction or production activities of assets eligible for capitalization areabnormally interrupted and such condition lasts for more than three months, the capitalization ofborrowing costs should be suspended; if the interruption is necessary procedures for the acquired,constructed or produced assets eligible for capitalization to reach the working conditions for its intendeduse or sale, the borrowing costs continue to be capitalized. Borrowing costs incurred during theinterruption are recognized as the current profit and loss and continue to be capitalized until the acquisition,construction or production of the asset restarts.
4) Calculation of capitalization amount of borrowing costs
As for special borrowings borrowed for acquiring and constructing or producing assets eligible forcapitalization, borrowing costs of special borrowing actually incurred in the current period less the interestincome of the borrowings unused and deposited in bank or return on temporary investment should berecognized as the capitalization amount of borrowing costs.As for general borrowings used for acquiring and constructing or producing assets eligible forcapitalization, the interest of general borrowings to be capitalized should be calculated by multiplying theweighted average of asset disbursements of the part of accumulated asset disbursements exceeding specialborrowings at end of each month by the capitalization rate of used general borrowings. The capitalizationrate is calculated by weighted average interest rate of general borrowings.As for borrowings with discount or premium, the to-be-amortized discount or premium in each accountingperiod should be recognized by effective interest rate method, and the interest for each period should beadjusted.
3.16. Intangible assets
1) Valuation method of intangible assets
1) The Company initially measures intangible assets at cost on acquisition;
The costs of externally purchased intangible assets include purchase prices, relevant taxes and surchargesand other directly attributable expenditures incurred to prepare the assets for their intended use. If thepayment for an intangible asset is delayed beyond the normal credit conditions and it is of the financingnature, the cost of the intangible asset shall be determined on the basis of the current value of the purchaseprice.For an intangible asset obtained in debt restructuring by a debtor for the settlement of relevant liability, thebook-entry value shall be initially recognized based on the fair value of the intangible asset. Differencebetween the book value of restructured debts and the fair value of the intangible asset used for debt off-setshall be included in the current profit or loss;On the premise that non-monetary assets trade is of commercial nature and the fair value of the assetstraded in or out can be measured reliably, the intangible assets traded in with non-monetary assets shouldbe recognized at the fair value of the assets traded out, unless any unambiguous evidence indicates that thefair value of the assets traded in is more reliable; as to the non-monetary assets trade not meeting theaforesaid premise, the book value of the assets traded out and related taxes and surcharges payable shouldbe recognized as the cost of the intangible assets, with gains or losses not recognized.
For intangible assets acquired from business combination under common control, the initial book value areinitially recognized at the book value of the combinee; for intangible assets acquired from businesscombination not under common control, the initial book value are initially recognized at the fair value.Costs of intangible assets developed internally and independently include: the costs of materials and laborservices used to develop the intangible assets, the registration fee, the amortization of other patents andfranchise used in the process of development, the interest expenses meeting the condition for capitalization,and other direct expenses for preparing the intangible assets for their intended use.
2) Subsequent measurement
The useful lives of the intangible assets are analyzed and determined on their acquisition.For intangible assets with definite useful lives, the Company shall adopt the straight-line method foramortization within the period during which they can bring economic benefits to the Company; where theperiod during which they can bring economic benefits to the Company cannot be forecast, those intangibleassets shall be deemed as assets with indefinite lives and no amortization will be made.
2) Estimates of useful lives of intangible assets with definite useful lives
Item
| Item | Estimated useful lives | Basis |
| Land use rights | 50 years | Use term for the land use right title |
3) Judgment basis for intangible assets with indefinite useful lives
As at the balance sheet date, the Company has no intangible assets with indefinite useful lives.
3.17. Impairment of long-term assets
For the long-term equity investments, investment properties, fixed assets, construction in progress,intangible assets, and other long-term assets measured at cost model, if there are signs of impairment, animpairment test will be conducted on the balance sheet date. If impairment test results indicate that therecoverable amounts of the assets are lower than their book value, the provision for impairment is madebased on the differences, which are recognized as impairment losses. The recoverable amounts ofintangible assets are the higher of their fair values less costs to sell and the present values of the futurecash flows expected to be derived from the assets. The assets impairment provision is calculated and madeon an individual basis. If it is difficult for the Company to estimate the recoverable amount of theindividual asset, the recoverable amount of an asset group to which the said asset belongs to will bedetermined. Asset group is the minimum combination of assets that can independently generate cashinflows.After the losses from asset impairment are recognized, they are not reversed in subsequent periods.
3.18. Long-term deferred expenses
Long-term deferred expenses refer to various expenses which have been already incurred but will be bornin the reporting period and in the future with an amortization period of over one year.
1) Amortization method
Long-term deferred expenses are evenly amortized over the beneficial period
2) Amortization period
Item
| Item | Amortization period |
| Hotel exterior decoration | 4-year |
| Fire stairs renovation | 4-year |
| C FLOOR ROOM RENOVATION | 5-year |
| Villa renovation | 5-year |
| Swimming pool renovation | 5-year |
3.19. Employee compensation
1) Accounting method for short-term compensation
During the accounting period when employees serve the Company, the actual short-term compensation isrecognized as liabilities and included in current profit and loss or costs associated with assets.The appropriate amount of employee compensation payable will be determined during the accountingperiod when the employees provide services for the Company based on the medical insurance, work injuryinsurance and maternity insurance and other social insurance and housing fund paid by the Company foremployees, as well as trade union funds and employee education funds withdrawn according to provisionsat the accrual basis and accrual ratio.The employee benefits in the non-monetary form shall be measured at fair value.
2) Accounting method for post-employment benefits
The Company will pay basic old-age insurance and unemployment insurance in accordance with relevantprovisions of the local government for employees. During the accounting period when they provideservices for the Company, the amount payable will be calculated at the basis and proportion specified bylocal authorities, recognized as a liability and charged into current profit and loss or costs associated withassets.
3) Accounting method for dismiss welfare
Where the Company cannot unilaterally withdraw the dismissal welfare offered in view of the cancellationof the labor relation plan or the layoff proposal, or recognizes the cost or expenses as to the restructuringinvolving the payment of dismissal welfare (whichever is earlier), the employee compensation arisingfrom the dismissal welfare should be recognized as the liabilities and charged to the current profit or loss.
3.20. Estimated liabilities
When the Company is involved in litigation, debt guarantees, loss-making contract, reorganization matters,if such matters are likely to be satisfied by delivery of assets or provision of services in the future and theamount can be measured reliably, they shall be recognized as estimated liabilities.
1) Recognition criteria for estimated liabilities
When an obligation relating to a contingency meets all the following conditions at the same time, it is
recognized as an estimated liability:
1) Such obligation is a present obligation of the Company;
2) The performance of such obligation may well cause outflows of economic benefits from the Company;and
3) The amount of such obligation can be measured reliably.
2) Measurement method of estimated liabilities
The estimated liabilities of the Company are initially measured as the best estimate of expenses requiredfor the performance of relevant present obligations.When the Company determines the best estimate, it should have a comprehensive consideration of riskswith respect to contingencies, uncertainties and the time value of money. If the time value of money issignificant, the best estimates will be determined after discount of relevant future cash outflows.The best estimates shall be treated as follows in different circumstances:
If there is continuous range (or interval) for the necessary expenses, and probabilities of occurrence of allthe outcomes within this range are equal, the best estimates will be determined at the average amount ofupper and lower limits within the range.If there is no continuous range (or interval) for the necessary expenses, or probabilities of occurrence of allthe outcomes within this range are unequal despite such a range exists, in case that the contingencyinvolves a single item, the best estimate shall be determined at the most likely outcome; if the contingencyinvolves two or more items, the best estimate should be determined according to all the possible outcomeswith their relevant probabilities.When all or part of the expenses necessary for the settlement of estimated liabilities of the Company areexpected to be compensated by a third party, the compensation shall be separately recognized as an assetonly when it is virtually certain to be received. The compensation recognized shall not exceed the bookvalue of the estimated liabilities.
3.21. Revenue
1) Recognition and measurement principles for revenues from sale of goods
1) General recognition and measurement principles for revenue from sales of goodsIncome from sales of goods is recognized when the Company has transferred to the buyer the significantrisks and rewards of ownership of the goods; the Company retains neither continuous management rightsassociated with ownership of the goods sold nor effective control over the goods sold; the relevant amountof income can be measured reliably; it is highly likely that the economic benefits associated with thetransaction will flow into the Company; and the relevant amount of cost incurred or to be incurred can bemeasured reliably.
2) Recognition criteria and time of revenue from sale of goods of the CompanyIn the provision of hotel housing services at the same time, the Company provides goods to customers andwill prepare daily sales list after confirming with the Rooms Department and the hotel front desk. Basedon the sales list, the finance department confirms that the major risks and rewards of ownership of thegoods have been transferred to the customer and then the sales revenue is recognized.
2) Recognition and measurement principles of revenue from rendering of service
1) For the hotel rooms, catering (breakfast) and other services to be provided by the Company, after theyare provided, and the Company checks with the sales department and the front check, the Company willprepare the daily sales reports and accounts receivable list to the finance department, which will review thesame, after which, the revenue will be recognized.
2) For the revenue from restaurants and venues contracted out, they will be recognized in accordance withthe period stipulated in the contract or agreement and the collection timing.
3) Recognition basis for revenue from transfer of right to use assets
When the economic benefit related to the transaction is probably to flow into the Company and therelevant revenue can be reliably measured, the revenue from transfer of the asset use right is determined asfollows: the revenue from transferring use right of assets shall be recognized based on the followingcircumstances:
1) The amount of interest income is determined based on the time and effective interest rate for others touse the monetary funds of the Company.
2) The amount of revenue from usage is determined based on the charging time and method as agreed inrelevant contract or agreement.
3.22. Government subsidies
1) Judgment criteria and accounting method for government subsidies related to assetsSet off the book value of related assets or be recognized as deferred income. Government subsidies relatedto assets are recognized as deferred income to be evenly distributed over the useful lives of the relevantassets and shall be recorded in current profit or loss by stages in a reasonable and systematic manner.Government subsidies measured in nominal amounts, are directly included in current profits and losses.Where relevant assets are sold, transferred, scraped or damaged before the end of their lives, balance of theunallocated deferred income is transferred to the current profit and loss on asset disposal.
2) Judgment criteria and accounting method for government subsidies related to income
1) To be used as compensation for future costs, expenses or losses are recognized as deferred income andare recorded in current profits and losses or used to write off the related costs where the relevant costs,expenses or losses are recognized.
2) To be used to compensate the related costs, expenses or losses incurred by the Company are directlyincluded in current profit and loss or used to write off the related costs.
3) Accounting treatment will be conducted for government subsidies that at the same time include thoseassociated with assets and income by different parts: if it is difficult to distinguish, they will be deemed asgovernment subsidies associated with income.
3.23. Major accounting policies and estimates changes
The Company’s major accounting policies and estimates have no changes in the period
4. Taxation
Major tax types and tax rates applicable to the Company
Taxation type
| Taxation type | Basis of tax assessment | Tax rate |
| Value added tax (VAT) | Output VAT is calculated based on taxable sales revenue and service revenue calculated in accordance with tax laws and VAT payable or taxable sales revenue shall be the difference after deducting the input VAT deductible in the same period | 5%、6%、9%、13% |
| Urban maintenance and construction tax | Levied based on VAT payable | 7% |
| Education surtax | Levied based on VAT payable | 3% |
| Local educational surcharge | Levied based on VAT payable | 2% |
| Housing property tax | Remaining value after deducting 30% from the original value of the house (including the occupied land price) and rental income | 1.2%、12% |
| Land use tax | Land area | |
| Enterprise income tax | Levied based on taxable income | 25% |
5. Notes to the items of financial statements
(The monetary unit refers to RMB/CNY unless specified)
5.1 Monetary fund
| Item | Ending balance | Beginning balance |
| Stock cash | 476,191.77 | 347,782.65 |
| Bank Deposit | 15,634,704.18 | 15,016,572.65 |
| Other monetary fund | ||
| Total | 16,110,895.95 | 15,364,355.30 |
5.2 Accounts receivable
1) Accounts receivable by type
| Type | Ending balance | Beginning balance | ||||
| Book balance | Provision for bad debts | Book value | Book balance | Provision for bad debts | Book value | |
Amount
| Amount | Proportion % | Amount | Accrual ratio | Amount | Proportion % | Amount | Accrual ratio | |||
| Accounts receivable with significant single amount subject to provision for bad debts on a single basis | ||||||||||
| Accounts receivable with provision for bad debts based on portfolios | 230,062.48 | 100.% | 74,075.60 | 32.20% | 155,986.88 | 500,510.47 | 100.% | 74,075.60 | 14.80% | 426,434.87 |
| Accounts receivable with insignificant single amount but accrued for provision of bad debt on a single basis | ||||||||||
| Total | 230,062.48 | 100.% | 74,075.60 | 32.20% | 155,986.88 | 500,510.47 | 100.% | 74,075.60 | 14.80% | 426,434.87 |
Accounts receivable accrued for provision of bad debt by aging analysis method in portfolio:
| Aging | Ending balance | ||
| Accounts receivable | Provision for bad debts | Accrual ratio | |
| Within 1 year | 139,108.68 | ||
| 1-2 years | 566.00 | 28.30 | 5.00% |
| 2-3 years | 785.00 | 117.75 | 15.00% |
| 3-4 years | 18,633.00 | 4,658.25 | 25.00% |
| 4-5 years | 3,397.00 | 1,698.50 | 50.00% |
| More than five years | 67,572.80 | 67,572.80 | 100.00% |
| Total | 230,062.48 | 74,075.60 | 20.47% |
2) Top five accounts receivable in terms of ending balance collected by the debtor
| Name | Relationship | Book balance | Aging | Proportion in |
with theCompany
| with the Company | total accounts receivable (%) |
| Shanghai Hecheng International Travel Service Co., Ltd. | Non related party | 35,788.40 | Within 1 year | 15.56% |
| Yangpu Huayu Road and Bridge Technology Co., Ltd. | Non related party | 18,633.00 | More than five years | 8.10% |
| Guangzhou Institute of Design | Non related party | 38,980.00 | More than five years | 16.94% |
| Shenzhen Tenpay Technology Co., Ltd. | Non related party | 46,621.46 | Within 1 year | 20.26% |
| Tianjin Watermelon Tourism Limited Liability Company | Non related party | 24,414.82 | Within 1 year | 10.61% |
| Total | 164,437.68 | 71.47% |
5.3 Advance payment、
1)Disclosure of advance payment by account age
| Aging | Ending balance | Beginning balance | ||
| Amount | Proportion | Amount | Proportion | |
| Within 1 year | 396,882.60 | 100.00% | 39,960.01 | 100.00% |
| Total | 396,882.60 | 100.00% | 39,960.01 | 100.00% |
2) Top five advances payment in terms of the ending balance collected by the prepaid object
| Unit | Ending balance | Proportion in total ending balance |
| Shenzhen J&J Space Design Co., Ltd. | 213,592.23 | 53.82% |
| Sanya Shengxiang Mechatronics Engineering Co., Ltd. | 110,415.00 | 27.82% |
| Hainan Haolong Fire Engineering Co., Ltd. | 58,925.37 | 14.85% |
| Sanya Xingcai Electrical Co., Ltd. | 13,230.00 | 3.33% |
| Business Daily of International Tourism Island | 720.00 | 0.18% |
| Total | 396,882.60 |
5.4 Other receivable
| Item | Ending balance | Beginning balance |
| Interest receivable | ||
| Dividend receivable | ||
| Other account receivable | 1,242,181.64 | 458,242.73 |
| Total | 1,242,181.64 | 458,242.73 |
1) Other account receivable disclosed by nature
Nature
| Nature | Ending book balance | Opening book balance |
| Utility bills | 206,254.34 | 185,368.69 |
| Petty cash | 838,955.14 | 133,411.23 |
| Attorney fee | 77,534.25 | 77,534.25 |
| Court cost | 62,970.00 | |
| Social insurance and housing provident funds | 57,803.91 | 63,264.56 |
| Deposit | 600.00 | 600.00 |
| Total | 1,244,117.64 | 460,178.73 |
2) Other receivables with provision for bad debts made by aging analysis method
| Aging | Ending balance | ||
| Accounts receivable | Provision for bad debts | Accrual ratio | |
| Within 1 year | 1,241,881.64 | ||
| 1-2 years | |||
| 2-3 years | |||
| 3-4 years | |||
| 4-5 years | 600.00 | 300.00 | 50.00% |
| More than five years | 1,636.00 | 1,636.00 | 100.00% |
| Total | 1,244,117.64 | 1,936.00 | |
3) Top five other accounts receivable in terms of ending balance collected by the debtor
| Name | Nature | Ending balance | Aging | Proportion in total other receivables | Ending balance of provision for bad debts |
| Wen Ping | Petty cash | 710,000.00 | Within 1 year | 57.07% | |
| Hainan New Concept Law Firm | Attorney fee | 77,534.25 | Within 1 year | 6.23% | |
| Peng Guoxing | Utility bills | 70,422.98 | Within 1 year | 5.66% | |
| Sanya Suburbs People’s Court | Court cost | 62,970.00 | Within 1 year | 5.06% | |
| Guo Yubo | Petty cash | 60,369.61 | Within 1 year | 4.85% | |
| Total | 981,296.84 | 78.88% |
5.5 Inventories
1) category of inventories
Item
| Item | Ending balance | Beginning balance | ||||
| Book balance | Provision for price decline | Book value | Book balance | Provision for price decline | Book value | |
| Raw materials | 836,342.72 | 683,941.58 | 152,401.14 | 870,043.52 | 725,731.58 | 144,311.94 |
| Finished goods | 22,771.38 | 11,102.41 | 11,668.97 | 22,771.38 | 11,102.41 | 11,668.97 |
| Food and beverage | 12,526.82 | 12,526.82 | 43,935.10 | 43,935.10 | ||
| Fuel | 15,096.64 | 15,096.64 | 21,474.18 | 21,474.18 | ||
| Total | 886,737.56 | 695,043.99 | 191,693.57 | 958,224.18 | 736,833.99 | 221,390.19 |
2) Provision for inventory depreciation
| Item | Beginning balance | Increase in the period | Decrease in the period | Ending balance | ||
| Accrual | Others | Reversal or write-off | Others | |||
| Raw materials | 725,731.58 | 41,790.00 | 683,941.58 | |||
| Finished goods | 11,102.41 | 11,102.41 | ||||
| Total | 736,833.99 | 41,790.00 | 695,043.99 | |||
5.6 Other current assets
| Item | Ending balance | Beginning balance |
| Enterprise income tax paid in advance | 1,702,702.80 | 1,702,702.80 |
| Input tax to be deducted | 385,035.78 | 103,556.98 |
| Prepaid pending expenses | 37,880.58 | 39,960.01 |
| Total | 2,125,619.16 | 1,846,219.79 |
5.7 Investment property
| Item | Houses and buildings | Land use rights | Total |
| I. Original book value | |||
| 1.Beginning balance | 18,856,504.44 | 5,662,740.59 | 24,519,245.03 |
| 2.Increase in the period | |||
| 3.Decrease in the period | |||
| 4.Ending balance | 18,856,504.44 | 5,662,740.59 | 24,519,245.03 |
| II. Accumulated depreciation and accumulated amortization |
1.Beginning balance
| 1.Beginning balance | 10,607,583.54 | 2,219,726.45 | 12,827,309.99 |
| 2.Increase in the period | 209,091.78 | 28,170.00 | 237,261.78 |
| （1) Accrual or amortization | 209,091.78 | 28,170.00 | 237,261.78 |
| 4.Ending balance | 10,816,675.32 | 2,247,896.45 | 13,064,571.77 |
| III. Provision for impairment | |||
| 1.Beginning balance | 1,404,400.47 | 1,903,054.14 | 3,307,454.61 |
| 2.Increase in the period | |||
| 3、Decrease in the period | |||
| 4.Ending balance | 1,404,400.47 | 1,903,054.14 | 3,307,454.61 |
| IV. Book value | |||
| 1.Ending book value | 6,635,428.65 | 1,511,790.00 | 8,147,218.65 |
| 2.Opening book value | 6,844,520.43 | 1,539,960.00 | 8,384,480.43 |
5.8 Fixed assets
| Item | Houses and buildings | Mechanical equipment | Transportation equipment | Electronic equipment | Other equipment | Total |
| I. Original book value | ||||||
| 1.Beginning balance | 136,789,501.82 | 11,033,550.54 | 2,345,074.91 | 2,664,528.39 | 1,926,451.84 | 154,759,107.50 |
| 2.Increase in the period | 20,635.87 | 20,101.94 | 40,737.81 | |||
| 1) Purchase | 20,635.87 | 20,101.94 | 40,737.81 | |||
| 3.Decrease in the period | 1,420,474.00 | 619,394.00 | 193,633.45 | 2,233,501.45 | ||
| 1) Disposal or scrap | 1,420,474.00 | 619,394.00 | 193,633.45 | 2,233,501.45 | ||
| 4.Ending balance | 136,789,501.82 | 9,613,076.54 | 2,345,074.91 | 2,065,770.26 | 1,752,920.33 | 152,566,343.86 |
| II. Accumulated depreciation | ||||||
| 1.Beginning balance | 72,499,344.50 | 7,970,060.88 | 1,587,022.54 | 1,938,853.10 | 1,224,791.47 | 85,220,072.49 |
| 2.Increase in the period | 1,087,717.44 | 143,758.48 | 82,783.92 | 87,864.93 | 87,053.97 | 1,489,178.74 |
| 1)Accrual | 1,087,717.44 | 143,758.48 | 82,783.92 | 87,864.93 | 87,053.97 | 1,489,178.74 |
| 3.Decrease in the period | 1,008,698.30 | 595,910.37 | 173,760.82 | 1,778,369.49 | ||
| 1) Disposal or scrap | 1,008,698.30 | 595,910.37 | 173,760.82 | 1,778,369.49 |
4.Ending balance
| 4.Ending balance | 73,587,061.94 | 7,105,121.06 | 1,669,806.46 | 1,430,807.66 | 1,138,084.62 | 84,930,881.74 |
| III. Provision for impairment | ||||||
| 1.Beginning balance | 31,072,788.17 | 1,968,377.19 | 33,041,165.36 | |||
| 2.Increase in the period | ||||||
| 3.Decrease in the period | 403,223.40 | 403,223.40 | ||||
| 1) Disposal or scrap | 403,223.40 | 403,223.40 | ||||
| 4.Ending balance | 31,072,788.17 | 1,565,153.79 | 32,637,941.96 | |||
| IV. Book value | ||||||
| 1.Ending book value | 32,129,651.71 | 942,801.69 | 675,268.45 | 634,962.60 | 614,835.71 | 34,997,520.16 |
| 2.Opening book value | 33,217,369.15 | 1,095,112.47 | 758,052.37 | 725,675.29 | 701,660.37 | 36,497,869.65 |
5.9 Intangible assets
| Item | Land use rights | Patent right | Total |
| I. Original book value | |||
| 1.Beginning balance | 81,653,137.15 | 81,653,137.15 | |
| 2.Increase in the period | |||
| （1) Purchase | |||
| （2) Internal research and development | |||
| （3) Increase from business combinations | |||
| 3.Decrease in the period | |||
| (1)Disposal | |||
| 4.Ending balance | 81,653,137.15 | 81,653,137.15 | |
| II. Accumulated amortization | |||
| 1.Beginning balance | 32,007,051.27 | 32,007,051.27 | |
| 2.Increase in the period | 406,193.58 | 406,193.58 | |
| （1)Accrual | 406,193.58 | 406,193.58 | |
| 3.Decrease in the period | |||
| (1)Disposal |
4.Ending balance
| 4.Ending balance | 32,413,244.85 | 32,413,244.85 | |
| III. Provision for impairment | |||
| 1.Beginning balance | 27,440,836.84 | 27,440,836.84 | |
| 2.Increase in the period | |||
| （1)Accrual | |||
| 3.Decrease in the period | |||
| (1)Disposal | |||
| 4.Ending balance | 27,440,836.84 | 27,440,836.84 | |
| IV. Book value | |||
| 1.Ending book value | 21,799,055.46 | 21,799,055.46 | |
| 2.Opening book value | 22,205,249.04 | 22,205,249.04 |
5.10 Long-term deferred expenses
| Item | Beginning balance | Increase in the period | Amortization in the period | Other decreased | Ending balance |
| Maintenance fee for main engine system of the central AC | 50,116.50 | 50,116.50 | |||
| Renovation of guest rooms in Building-B | 486,974.57 | 292,184.70 | 194,789.87 | ||
| Fire stairs renovation in Building-A | 45,695.20 | 8,567.82 | 37,127.38 | ||
| Renovation of guest rooms in Building-C, villa and swimming pool | 2,260,206.30 | 301,360.80 | 1,958,845.50 | ||
| Total | 2,792,876.07 | 50,116.50 | 602,113.32 | 2,240,879.25 |
5.11 Accounts payable
| Item | Ending balance | Beginning balance |
| Payment for purchase | 170,266.19 | 687,690.30 |
| Accounts payable provisionally estimated | 660,218.61 | 534,359.35 |
| Service charges | 155,368.88 | |
| Payment for projects | 14,274.10 | 134,274.10 |
| Elevator maintenance fee | 31,670.00 | 31,670.00 |
| Advertisement fees | 30,500.30 | 31,195.28 |
| Consignment sales | 22,335.90 | |
| Other | 1,093.00 | 10,942.00 |
| Water rate | 52,428.54 |
Natural gas fee
| Natural gas fee | 23,398.40 | |
| Washing charge | 93,168.29 | |
| Total | 1,077,017.43 | 1,607,835.81 |
5.12 Account received in advance
1) Presentation of account received in advance
| Item | Ending balance | Beginning balance |
| Room and meal charge | 779,681.12 | 1,291,293.05 |
| Total | 779,681.12 | 1,291,293.05 |
2) Significant account received in advance with aging more than one year
| Item | Ending balance | Reasons for failure of repayment or carry-forward |
| Guangzhou Nanbu Holiday International Travel Service Co., Ltd. Sanya Branch | 101,244.00 | Unsettled |
| Hainan Xiangyuan Tourism Development Co., Ltd. | 39,851.00 | Unsettled |
| PEGAS Zheng Qingbo | 32,243.02 | Unsettled |
| Hainan Qiongzhong Ecological Investment Guarantee Co., Ltd. | 22,926.00 | Unsettled |
| Sanya City Public Security Fire Brigade | 19,420.88 | Unsettled |
| Total | 215,684.90 |
5.13 Employee compensation payable
1) Presentation of employee compensation payable
| Item | Beginning balance | Increase in the period | Decrease in the period | Ending balance |
| 1. Short-term employee benefits | 2,841,262.35 | 6,031,396.03 | 7,044,691.32 | 1,827,967.06 |
| 2. Post-employment benefits - defined contribution plans | 547,368.99 | 547,368.99 | ||
| 3. Termination benefits | ||||
| 4. Other benefits due within one year | ||||
| Total | 2,841,262.35 | 6,578,765.02 | 7,592,060.31 | 1,827,967.06 |
2) Short-term employee benefits
Item
| Item | Beginning balance | Increase in the period | Decrease in the period | Ending balance |
| 1.Salary, bonus, allowance and subsidy | 1,762,269.70 | 4,759,360.01 | 5,722,074.66 | 799,555.05 |
| 2.Employee welfare | 759,981.75 | 759,981.75 | ||
| 3.Social insurance premium | 255,539.72 | 255,539.72 | ||
| Of which: including: medical insurance expenses | 236,205.39 | 236,205.39 | ||
| Work injury insurance expenses | 4,568.36 | 4,568.36 | ||
| Maternity insurance | 14,765.97 | 14,765.97 | ||
| 4.Housing provident funds | 90,050.00 | 90,050.00 | ||
| 5.Labor union expenditures and employee education expenses | 1,078,992.65 | 166,464.55 | 217,045.19 | 1,028,412.01 |
| 6.Short-term paid absences | ||||
| 7. Short-term profit sharing plan | ||||
| Total | 2,841,262.35 | 6,031,396.03 | 7,044,691.32 | 1,827,967.06 |
3) Details of defined contribution plans
| Item | Beginning balance | Increase in the period | Decrease in the period | Ending balance |
| 1.Basic endowment insurance expenses | 532,614.48 | 532,614.48 | ||
| 2.Unemployment insurance expenses | 14,754.51 | 14,754.51 | ||
| Total | 547,368.99 | 547,368.99 |
5.14 Tax payable
| Item | Ending balance | Beginning balance |
| Value added tax (VAT) | 565,131.47 | 146,863.56 |
| Individual income tax | 25,850.99 | -0.02 |
| Urban maintenance and construction tax | 2,108.62 | 761.67 |
| Housing property tax | 97,050.95 | 194,101.69 |
| Land use tax | 54,295.47 | 108,590.92 |
| Education surtax | 903.68 | 326.42 |
| Local education surtax | 602.48 | 217.63 |
Total
| Total | 745,943.66 | 450,861.87 |
5.15 Other account payable
| Item | Ending balance | Beginning balance |
| Interest payable | ||
| Dividend payable | ||
| Other account payable | 2,942,968.71 | 2,727,483.66 |
| Total | 2,942,968.71 | 2,727,483.66 |
1) Presentation of other account payable by nature
| Item | Ending balance | Beginning balance |
| Employee dormitory rental fees, etc. | 975,525.11 | 971,723.12 |
| Margin | 20,000.00 | 890,958.75 |
| Audit fee | 285,003.21 | 285,003.21 |
| Quality guarantee deposit for projects | 204,180.90 | 190,344.00 |
| Employee deposit | 86,520.00 | 165,700.90 |
| Payment for projects | 161,111.03 | 162,569.78 |
| Funds collected and remitted | 793,268.57 | 36,408.47 |
| Individual current amounts | 1,315.34 | 1,364.00 |
| Electric charges withheld | 24,494.55 | 23,411.43 |
| Announcement fee | 391,550.00 | |
| Total | 2,942,968.71 | 2,727,483.66 |
2) Other significant account payable with aging of over one year
| Item | Ending balance | Reasons for failure of repayment or carry-forward |
| Yangpu Jinyu Industrial Co., Ltd. | 627,000.00 | Unsettled |
| Hong Kong Deloitte & Touche LLP | 285,003.21 | Unsettled |
| Sanya Shuxin Housing Waterproof Engineering Co., Ltd. | 170,000.00 | Unsettled |
| China Building Decoration Company Hainan Branch | 161,111.03 | Unsettled |
| Total | 1,243,114.24 | -- |
5.16 Estimated liabilities
Item
| Item | Ending balance | Beginning balance | Reasons |
| Offering guarantee external | |||
| Pending action | |||
| Other | 1,489,685.04 | 1,489,685.04 | Provisions for arrears of electricity tariffs |
| Total | 1,489,685.04 | 1,489,685.04 |
Other note:
On May 26,2016，the Company received lawyer’s letter of Hainan Yunfan law firm which is entrusted byHainan Power Grid Co., LTD Sanya Power Supply Bureau (hereinafter referred to as the "Sanya Power SupplyBureau"), the letter claims that Sanya Power Supply Bureau found that the Company’s subsidiarySouth ChinaGrand Hotel of Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd’s the amount of CT is different with itsmarketing management system record. The inconformity time is July, 2006, and the hotel’s CT is changing onApril, 2016. Therefore, undercounted electricity consumption amount is10,313,373.00 kilowatt-hours, andestimated cost is7,200,165.75 Yuan as various electricity prices and charges.
According to the file “Law Advisory Opinion about Retroactive Power (Charge) Dispute betweenSouth ChinaGrand Hotel andSanya Power Supply Bureau”issued by Beijing Junhe (Haikou) Law Firm on December 20,2016, which claims thatSanya Power Supply Bureau has responsibility for CT to purchase, install, enseal,unseal and change, therefore, the responsibility of the guilty party forundercounted electricity consumption ofSouth China Grand Hotel isSanya Power Supply Bureau. According to the one hundred and thirty-five item of“General Rule of Civil Law”, this item claims that limitation of action is two years if accuser request people'scourt’s protection, except situations provided by law. The Company has withheld theundercounted electricityconsumption cost in 2016 which is about1,489,685.04 Yuan during the period from April, 2014 to April, 2016.
5.17 Share capital
| Item | Beginning balance | Increase or decrease (＋, －) | Ending balance | ||||
| Issuance of new shares | Share donation | Public reserve transferred to shares | Others | Sub-total | |||
| Total shares | 364,100,000.00 | 364,100,000.00 | |||||
5.18 Capital reserves
| Item | Beginning balance | Increase in the period | Decrease in the period | Ending balance |
| Capital premium (share premium) | 33,336,215.58 | 33,336,215.58 |
Other capital reserves
| Other capital reserves | 20,806,634.43 | 20,806,634.43 | ||
| Total | 54,142,850.01 | 54,142,850.01 |
5.19 Undistributed profits
| Item | Current period | Last period |
| Undistributed profits at the end of last year before adjustment | -340,454,153.72 | -341,107,435.91 |
| Total undistributed profit at beginning of the adjustment period (+ for increased, - for decreased) |
| Undistributed profits at the beginning of the year after adjustment | -340,454,153.72 | -341,107,435.91 |
| Plus: net profit attributable to owner of parent company in Period | 755,974.01 | 1,282,165.58 |
| Less: appropriation of statutory surplus reserves |
| Appropriation of discretionary surplus reserve |
| Appropriation of general risk reserve |
| Ordinary share dividends payable |
| Ordinary share dividends transferred to share capital | ||
| Undistributed profit as at the end of the period | -339,698,179.71 | -339,825,270.33 |
5.20 Operating income and operating cost
| Item | Current period | Last period | ||
| Income | Cost | Income | Cost | |
| Main business | 14,241,961.04 | 5,514,477.93 | 16,173,929.32 | 6,000,063.36 |
| Other business | ||||
| Total | 14,241,961.04 | 5,514,477.93 | 16,173,929.32 | 6,000,063.36 |
5.21 Taxes and surcharges
| Item | Current period | Last period |
| Consumption tax |
| Urban maintenance and construction tax | 31,410.84 | 37,515.65 |
| Education surtax | 22,436.31 | 26,796.89 |
| Resource tax |
Housing property tax
| Housing property tax | 215,587.50 | 431,174.78 |
| Land use tax | 108,590.94 | 217,181.82 |
| Vehicle and vessel use tax | 5,220.00 | 3,669.06 |
| Stamp tax | 233.91 | 182.70 |
| Total | 383,479.50 | 716,520.90 |
5.22 Sales expenses
| Item | Current period | Last period |
| Staff wages and benefits | 1,834,677.00 | 1,841,236.40 |
| Social workers insurance expenses | 302,950.00 | 285,734.45 |
| Depreciation | 259,401.60 | 256,486.12 |
| Utility bills | 99,980.13 | 84,101.36 |
| Repair charges | 95,930.17 | 58,716.18 |
| Other expenses | 217,053.04 | 274,681.59 |
| Total | 2,809,991.94 | 2,800,956.10 |
5.23 Administrative expenses
| Item | Current period | Last period |
| Staff wages and benefits | 2,789,891.55 | 2,809,454.64 |
| Social workers insurance expenses | 321,053.70 | 266,303.18 |
| Entertainment expenses | 219,787.57 | 496,075.07 |
| Travelling expenses | 149,081.98 | 68,678.82 |
| Amortization for the depreciation and land use right | 567,140.44 | 550,590.01 |
| Announcement fee and agency charge | 655,420.00 | 656,245.72 |
| Other expenses | 369,424.97 | 509,107.77 |
| Total | 5,071,800.21 | 5,356,455.21 |
5.24 Financial expenses
| Item | Current period | Last period |
| Handling charges | 18,965.03 | 40,293.06 |
| Less: interest income | -152,697.12 | -22,729.87 |
| Total | -133,732.09 | 17,563.19 |
5.25 Non-operating income
Item
| Item | Current period | Last period | Amount included in non-recurring profit and loss in the current period |
| Other | 160,030.46 | 273.00 | 160,030.46 |
| Total | 160,030.46 | 273.00 |
5.26 Non-operating expenses
| Item | Current period | Last period | Amount included in non-recurring profit and loss in the current period |
| Loss from disposal of non-current assets | 477.98 | ||
| Total | 477.98 |
5.27 Notes to statement of cash flow
1) Other cash receipts related to operating activities
| Item | Current period | Last period |
| Interest income | 152,697.12 | 22,729.87 |
| Other | 952,744.76 | 661,422.77 |
| Total | 1,105,441.88 | 684,152.64 |
2) Cash paid for other operating activities
| Item | Current period | Last period |
| Social intercourse fees | 221,362.57 | 497,075.07 |
| Intermediary audit fee | 400,000.00 | 400,000.00 |
| Announcement fee | 238,420.00 | 220,000.00 |
| Travelling expenses | 151,940.09 | 72,159.01 |
| Promotion fee | 92,705.15 | 109,649.14 |
| Repair charges | 211,454.36 | 163,503.73 |
| Other expenses | 978,613.63 | 212,185.21 |
| Total | 2,294,495.80 | 1,674,572.16 |
5.28 Supplementary information to statement of cash flows
1) Supplementary information to statement of cash flows
| Item | Current period | Last period |
(1) Net profit adjusted to cash flows from operating activities
| (1) Net profit adjusted to cash flows from operating activities | -- | -- |
| Net profit | 755,974.01 | 1,282,165.58 |
| Plus: provision for asset impairment | ||
| Depreciation of fixed assets, gas and oil assets and productive biological assets | 1,726,440.52 | 1,799,584.50 |
| Amortization of intangible assets | 434,363.58 | 434,363.58 |
| Amortization of long-term deferred expenses | 602,113.32 | 609,770.58 |
| Loss on disposals of fixed assets, intangible assets and other long-term assets | ||
| Loss on write-off of fixed assets ("-" for gains) | 477.98 | |
| Losses from the changes in fair value ("-" for gains) | ||
| Financial expenses ("-" for gains) | ||
| Investments loss ("-" for gains) | ||
| Decrease in deferred income tax assets ("-" for increases) | ||
| Increase in deferred income tax liabilities ("-" for decreases) | ||
| Decrease in inventories ("-" for increases) | 29,696.62 | -37,615.58 |
| Decrease in operating receivables ("-" for increases) | -513,490.92 | -326,357.40 |
| Increase in operating payables ("-" for decreases) | -1,765,680.48 | -651,711.64 |
| Others | ||
| Net cash flows from operating activities | 1,269,416.65 | 3,110,677.60 |
| 2. Significant investing and financing activities not involving cash receipts and payments | -- | -- |
| Conversion of debt into capital | ||
| Convertible corporate bonds maturing within one year | ||
| Fixed assets under financial lease | ||
| 3. Net changes in cash and cash equivalents | -- | -- |
| Ending balance of cash | 16,110,895.95 | 10,751,658.64 |
| Less: Beginning balance of cash | 15,364,355.30 | 9,681,607.16 |
| Plus: Ending balance of cash equivalents | ||
| Less: Beginning balance of cash equivalents |
Net increase in cash and cash equivalents
| Net increase in cash and cash equivalents | 746,540.65 | 1,070,051.48 |
2) Breakdown of cash and cash equivalents
In RMB/CNY
| Item | Ending balance | Beginning balance |
| 1. Cash | 16,110,895.95 | 15,364,355.30 |
| Including: Stock cash | 476,191.77 | 347,782.65 |
| Bank deposit available for payment at any time | 15,634,704.18 | 15,016,572.65 |
| Other monetary funds available for payment at any time | ||
| Deposits in the central bank available for payment | ||
| Deposits with banks and other financial institutions | ||
| Loans to banks and other financial institutions | ||
| 2. Cash equivalents | ||
| Including: Bond investment due within three months | ||
| 3. Ending balance of cash and cash equivalents | 16,110,895.95 | 15,364,355.30 |
6. Changes of consolidation range
Enterprise consolidation under the same control
6.1. Enterprise consolidation under the same control in current period
In RMB/CNY
| Combined party | Equity ratio obtained in combination | Basis of combined under the same control | Combination date | Standard to determine the combination date | Income of the combined party from period-begin of combination to the combination date | Net profit of the combined party from period-begin of combination to the combination date | Income of the combined party during the comparison period | Net profit of the combined party during the comparison period |
| Hainan Wengao Tourist Resources | 100.00% | A wholly-owne | 8 June 2018 | Establishment | 0.00 | 498.79 | 0.00 | 0.00 |
Development Co., Ltd.
| Development Co., Ltd. | d subsidiary | date |
6.2 Combined cost
| Combined cost | |
| --Cash | 500,798.36 |
| --Book value of the non-cash assets | 499,700.43 |
6.3 Book value of the assets/liabilities from combined party at date of combination
| Item | Combining date | Period-end of last period |
| Assets: | ||
| Monetary Fund | 500,798.36 | 1,000,000.00 |
| Account receivable | 499,700.43 | |
| Net assets | 1,000,498.79 | 1,000,000.00 |
| Less: minority’s interest | ||
| Net assets obtained | 1,000,498.79 | 1,000,000.00 |
7.Risks relating to financial instruments
The Company faces a variety of financial risks in business process: credit risk, market risk and liquidityrisk. The Company’s Board of Directors is overall responsible for risk management objectives anddetermining policies, and bears the ultimate responsibility for risk management objectives and policies, butthe board has authorized the Company’s enterprise management department to design and executive theprocedure which could guarantee the effective implementation of risk management objectives and policies.The Company’s internal auditors will audit the policies and procedures of risk management as well, andwill report the discovery to Audit Committee.The overall objective of the Company’s risk management is to set the risk management policies to reducerisks as possible without giving excessive influence to competitiveness and strain capacity of theCompany.
7.1 Credit risk
Credit risk is the risk of financial loss on one party of a financial instrument due to the failure of anotherparty to meet its obligations. The Company mainly faces credit risk generated from customers throughcredit sales. The Company will understand and assess the credit risk of the new customer before signing
the new contract. The Company makes credit rating for existing customers and aging analysis of accountsreceivable to ensure the Company’s overall credit risk falls within a controllable range.
7.2 Market risk
Market risk is the risk of financial instruments’ fair value and future cash flow fluctuating due to change ofmarket price, including currency risk, interest risk and other pricing risk.
7.3 Liquidity risk
Liquidity risk is the risk that an enterprise may encounter deficiency of funds in fulfilling the obligationswhen paying cash or settle in way of other financial assets. The policy of the Company is to ensure thereare enough cash to pay back mature debts. The liquidity risk is centralized controlled by the Company’saccounting department. The accounting department ensures the Company to possess enough cash to payback the debts in all reasonable foreseeable circumstances through monitor the balance of cash, monitorthe securities that can be converted into cash at any time and rolling forecasts of future cash flows intwelve months.
8. Related parties and related party transactions
8.1 Parent company
Parent company
| Parent company | Registered place | Nature of Business | Registered Capital (RMB 0’000) | Shareholding ratio in the Company (%) | Voting ratio in the Company (%) |
| Luoniushan Co., Ltd. | Haikou City | Plant and culturing | 115,115.00 | 17.55% | 19.80% |
Note: As of 30 June 2019, Luoniushan Co., Ltd. (hereinafter referred to as Luoniushan) and its wholly-ownedsubsidairy Hainan Ya’anju Property Service Co., Ltd. holds 72,091,780 shares of the Company under A-stock,totally takes 19.80% in total share capital of the Compamy, and it is the first largest shareholder of theCompany.
8.2. Related party transactions
8.2.1 Transaction with goods purchasing, labor service offering/receiving concerned
| Related party | Contents of related party transactions | The Period | Last period |
| Luoniushan Co., Ltd. | Housing & catering costs | 125,150.00 | 176,779.00 |
| Total | 125,150.00 | 176,779.00 |
2) Receivables and payables of related parties
Name
| Name | Related party | Ending balance | Beginning balance | ||
| Book balance | Bad debt provision | Book balance | Bad debt provision | ||
| Account receivable | Luoniushan Co., Ltd. | 6,387.00 | 13,153.00 | ||
9. Commitment and contingency
9.1 Important commitments
The Company has no commitments that need to disclosed up to balance sheet date
2. Contingencies
Major contingency on balance sheet date
On 26 May 2016, the Company received lawyer’s letter of Hainan Yunfan law firm which isentrusted by Hainan Power Grid Co., LTD Sanya Power Supply Bureau (hereinafter referredto as the "Sanya Power Supply Bureau"), the letter claims that Sanya Power Supply Bureaufound that the Company’s subsidiarySouth China Grand Hotel of Hainan DadonghaiTourism Centre (Holdings) Co., Ltd’s the amount of CT is different with its marketingmanagement system record. The inconformity time is July 2006, and the hotel’s CT ischanging on April 2016. Therefore, undercounted electricity consumption amount is10,313,373.00 kilowatt-hours, and estimated cost is7,200,165.75 Yuanas various electricityprices and charges.
According to the file “Law Advisory Opinion about Retroactive Power (Charge) DisputebetweenSouth China Grand Hotel andSanya Power Supply Bureau”issued by BeijingJunhe (Haikou) Law Firm on December 20, 2016, which claims thatSanya Power SupplyBureau has responsibility for CT to purchase, install, enseal, unseal and change, therefore,the responsibility of the guilty party forundercounted electricity consumption of SouthChina Grand Hotel isSanya Power Supply Bureau. According to the one hundred andthirty-five item of “General Rule of Civil Law”, this item claims that limitation of action istwo years if accuser request people's court’s protection, except situations provided by law.The Company has withheld theundercounted electricity consumption cost in 2016 which isabout1,489,685.04 Yuan during the period from April, 2014 to April, 2016. The event has nofurther progress up to 30 June 2019.
10. Event after balance sheet date
The Company has no major events after balance sheet date up to balance sheet date
11. Notes to other significant events
1. Correction of accounting errors in previous period
1) Retrospective restatement method
There is no correction of accounting errors using retrospective restatement method in previousperiod.
2) Prospective application method
There is no correction of accounting errors using prospective application method in previous period
2. Others
In accordance with the requirements of the Regulatory Guidelines of Listed Companies No. 4 - ActualController, Shareholders, Related Parties, Purchaser and Commitments and Fulfillment of ListedCompanies (CSRC Announcement No. [2013] 55) of China Securities Regulatory Commission, on June 7,2014, Luoniushan Co., Ltd. (hereinafter referred to as “Luoniushan”) sent out the Letter about Changingthe Commitments of Luoniushan Co., Ltd. to Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd. tothe Company, and made commitments that Luoniushan shall actively seek reorganization party toreorganize the assets of Dadonghai within three years from the date the Company’s general meeting ofshareholders considered and approved this commitment. The above matters have been considered andapproved by the general meeting of shareholders of Dadonghai on June 27, 2014.
On February 22, 2017, the Company received from Luoniushan a Letter on Progress in the Planning ofCommitment Implementation, in which Luoniushan intended to transfer 100% of the equity it held in theIndustrial Company, a wholly-owned subsidiary (specifically, the Industrial Company will first be transferredwith part of financial assets equity held by Luniushan and of 6.91% equity of Sanya Rural Commercial BankCo., Ltd.) to the Company, the transaction was made in cash with transaction amount of about RMB300 million.The proposal was not adopted at the 11th extraordinary meeting of the eighth board of directors of the Companydue to the Company's lack of sufficient debt repayment ability.
On June 23, 2017, Luoniushan issued to the Company a Letter on Change in Term of Commitment byLuoyunshan Co., Ltd. to Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd., extending Luoniushan'sperformance period of the above restructuring commitment of the Company by 6 months, whichmeans thedeadline for the fulfillment of reorganization commitment was changed to December 27, 2017.As thereorganization would take a certain amount of time, on November29, 2017, Luoniushan again applied toextend the performance period of the reorganization commitment for two years, that is, the performancedeadline of the reorganization commitment was changed from December 27, 2017 to December 26, 2019,which was not approved at the fourth extraordinary general meeting of shareholders of the Company in2017.
12. Note on financial statement of parent company
1、Accounts receivable
1) 、Accounts receivable by type
Type
| Type | Ending balance | Beginning balance | ||||||||
| Book balance | Provision for bad debts | Book value | Book balance | Provision for bad debts | Book value | |||||
| Amount | Proportion % | Amount | Accrual ratio | Amount | Proportion % | Amount | Accrual ratio | |||
| Accounts receivable with significant single amount subject to provision for bad debts on a single basis | ||||||||||
| Accounts receivable with provision for bad debts based on portfolios | 230,062.48 | 100% | 74,075.60 | 32.20% | 155,986.88 | 500,510.47 | 100% | 74,075.60 | 14.80% | 426,434.87 |
| Accounts receivable with insignificant single amount but accrued for provision of bad debt on a single basis | ||||||||||
| Total | 230,062.48 | 100% | 74,075.60 | 32.20% | 155,986.88 | 500,510.47 | 100% | 74,075.60 | 14.80% | 426,434.87 |
Released by account age
| Aging | Ending balance |
| Within 1 year (inclusive) | 139,108.68 |
| 1-2 years | 566.00 |
| 2-3 years | 785.00 |
3-4 years
| 3-4 years | 18,633.00 |
| 4-5 years | 3,397.00 |
| More than five years | 67,572.80 |
| Total | 230,062.48 |
2)Provision, reversal or recovery of provision for bad debts in the period
| Type | Beginning balance | Amount changed in the period | Ending balance | ||
| Accrual | Reversal or switch-back | Charge off | |||
| Based on portfolios | 74,075.60 | 74,075.60 | |||
| Total | 74,075.60 | 74,075.60 | |||
3) Top five accounts receivable in terms of ending balance collected by the debtor
| Name | Relationship with the Company | Book balance | Aging | Proportion in total amount of accounts receivable (%) |
| Shanghai Hecheng International Travel Service Co., Ltd. | Non related party | 35,788.40 | Within 1 year | 15.56% |
| Yangpu Huayu Road and Bridge Technology Co., Ltd. | Non related party | 18,633.00 | More than five years | 8.10% |
| Guangzhou Institute of Design | Non related party | 38,980.00 | More than five years | 16.94% |
| Shenzhen Tenpay Technology Co., Ltd. | Non related party | 46,621.46 | Within 1 year | 20.26% |
| Tianjin Watermelon Tourism Limited Liability Company | Non related party | 24,414.82 | Within 1 year | 10.61% |
| Total | 164,437.68 | 71.47% |
2. Other account receivable
| Item | Ending balance | Beginning balance |
| Interest receivable | ||
| Dividends Receivable | ||
| Other account receivable | 1,242,181.64 | 458,242.73 |
| Total | 1,242,181.64 | 458,242.73 |
1) Other account receivable disclosed by nature
| Nature | Ending book balance | Opening book |
balance
balanceUtility bills
| Utility bills | 206,254.34 | 185,368.69 |
| Petty cash | 838,955.10 | 133,411.23 |
| Attorney fee | 77,534.25 | 77,534.25 |
| Court cost | 62,970.00 | |
| Social insurance and housing provident funds | 57,803.91 | 63,264.56 |
| Deposit | 600.00 | 600.00 |
| Total | 1,244,117.64 | 460,178.73 |
2) Released by account age
| Aging | Ending balance |
| Within 1 year (inclusive) | 1,241,881.64 |
| 1-2 years | |
| 2-3 years | |
| 3-4 years | |
| 4-5 years | 600.00 |
| More than five years | 1,636.00 |
| Total | 1,244,117.64 |
3) Provision, reversal or recovery of provision for bad debts in the period
| Type | Beginning balance | Amount changed in the period | Ending balance | ||
| Accrual | Reversal or switch-back | Charge off | |||
| Based on portfolios | 1,936.00 | 1,936.00 | |||
| Total | 1,936.00 | 1,936.00 | |||
4) Released by account age
| Name | Nature | Ending balance | Aging | Proportion in total amount of other accounts receivable at period-end | Provision for bad debts Ending balance |
| Wen Ping | Petty cash | 710,000.00 | Within 1 year | 57.16% | |
| Hainan New Concept Law Firm | Attorney fee | 77,534.25 | Within 1 year | 6.23% | |
| Peng Guoxing | Utility bills | 70,422.98 | Within 1 year | 5.66% |
Sanya Suburbs People’s Court
| Sanya Suburbs People’s Court | Court cost | 62,970.00 | Within 1 year | 5.06% | |
| Guo Yubo | Petty cash | 60,369.61 | Within 1 year | 4.85% | |
| Wen Ping | Petty cash | 710,000.00 | Within 1 year | 57.16% | |
| Total |
3. Long-term equity investment
| Item | Ending balance | Beginning balance | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
| Investment for subsidiary | 1,000,000.00 | 1,000,000.00 | 1,000,000.00 | 1,000,000.00 | ||
| Total | 1,000,000.00 | 1,000,000.00 | 1,000,000.00 | 1,000,000.00 | ||
Investment for subsidiary
| Invested enterprise | Beginning balance | Increase in the period | Decrease in the period | Ending balance | Impairment provision in current period | Ending balance of impairment provision |
| Hainan Wengao Tourist Resources Development Co., Ltd. | 1,000,000.00 | 1,000,000.00 | ||||
| Total | 1,000,000.00 | 1,000,000.00 |
4. Operating income and cost
| Item | Current period | Last period | ||
| Income | Cost | Income | Cost | |
| Main business | 14,241,961.04 | 5,514,477.93 | 16,173,929.32 | 6,000,063.36 |
| Other business | ||||
| Total | 14,241,961.04 | 5,514,477.93 | 16,173,929.32 | 6,000,063.36 |
13. Supplementary information
1. Details of current non-recurring profits and losses
| Item | Amount | Note |
| Other income | 160,030.46 | Clean up the long-term unpaid payable |
Total
| Total | 160,030.46 |
2. Return on net assets and earnings per share
| Profit during the reporting period | Weighted average return on net assets (%) | Earnings per share (RMB) | |
| Basic earnings per share | Diluted earnings per share | ||
| Net profits attributable to ordinary shareholders of the Company | 0.97% | 0.0021 | 0.0021 |
| Net profits attributable to ordinary shareholders of the Company after deduction of non-recurring profits or losses | 0.76% | 0.0016 | 0.0016 |
3. Accounting difference between IFRS and CAS
There are no accounting differences between IFRS and CAS.(No text)
HAINAN DADONGHAI Tourism Centre (HOLDINGS) CO., LTD
8 August 2019