Section X Financial Report
HAINAN DADONGHAI TOURISM CENTER
(HOLDINGS) CO., LTD
Financial Report and Financial Statement
Semi-Annual 2017
HAINAN DADONGHAI TOURISM CENTER (HOLDINGS) CO.,
LTD
Financial Report and Financial Statement
（Jan. 1, 2017- Jun. 30, 2017）
Content Page
I. Financial Statement
Balance Sheet 1-2
Profit Statement 3
Statement of Cash Flow 4
Statement of Changes in Owners’ Equity 5-6
II. Notes to Financial Statement 1-48
HAINAN DADONGHAI TOURISM CENTER (HOLDINGS) CO., LTD
Balance Sheet
June 30, 2017
(Expressed in Renminbi unless otherwise stated)
Assets Note V Ending balance Beginning balance
Current assets:
Monetary funds (I) 10,108,175.91 27,210,248.01
Financial assets measured at fair value through rofit or
loss for the current period
Derivative financial assets
Notes receivable
Accounts receivable (II) 337,187.05 690,444.72
Prepayments (III) 38,660.36 58,783.23
Interests receivable
Dividends receivable
Other receivables (IV) 316,384.24 174,103.52
Inventories (V) 253,215.05 219,179.72
Assets classified as held for sale
Non-current assets maturing within one year (VI) 292,184.72 584,369.42
Other current assets (VII) 11,020,867.76 1,876,449.22
Total current assets 22,366,675.09 30,813,577.84
Non-current assets:
Available-for-sale financial assets (VIII)
Held-to-maturity investments
Long-term receivables
Long-term equity investments (IX)
Investment property (X) 9,096,265.77 9,333,527.55
Fixed assets (XI) 39,264,470.61 40,395,680.91
Construction in progress (XII) 978,211.64
Project materials
Disposal of fixed assets
Productive biological assets
Oil and gas assets
Intangible assets (XIII) 23,423,829.78 23,830,023.36
Development expenses
Goodwill
Long-term deferred expenses (XIV) 1,071,343.97 1,071,343.97
Deferred income tax assets
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Other non-current assets
Total non-current assets 73,834,121.77 74,630,575.79
Total assets 96,200,796.86 105,444,153.63
The accompanying notes to the financial statements are an integral part of the financial statements.
Legal Representative: Accounting Principal: The Accounting Firm’s Principal:
报表第 2 页
HAINAN DADONGHAI TOURISM CENTER (HOLDINGS) CO., LTD
Balance Sheet (continued)
June 30, 2017
(Expressed in Renminbi unless otherwise stated)
Liabilities and owners 'equity Note V Ending balance Beginning balance
Current liabilities:
Short-term borrowings
Financial liabilities measured at fair value through profit
or loss for the current period
Derivative financial liabilities
Notes payable
Accounts payable (XVI) 2,042,988.73 1,967,565.51
Accounts received in advance (XVII) 1,246,924.32 1,894,524.28
Employee benefits payable (XVIII) 1,799,762.38 2,148,514.36
Taxes and surcharges payable (XIX) 539,524.00 582,944.27
Interests payable
Dividends payable
Other payables (XX) 13,086,243.15 23,084,504.73
Liabilities classified as held for sale
Non-current liabilities maturing within one year
Other current liabilities
Total current liabilities 18,715,442.58 29,678,053.15
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: preferred shares
Perpetual capital securities
Long-term payables
Long-term employee benefits payable
Special payables
Estimated liabilities (XXI) 1,489,685.04 1,489,685.04
Provisions
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities 1,489,685.04 1,489,685.04
Total liabilities 20,205,127.62 31,167,738.19
Owners 'equity:
Share capital (XXII) 364,100,000.00 364,100,000.00
Other equity instruments
Including: preferred shares
Perpetual capital securities
Capital reserves (XXIII) 54,142,850.01
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54,142,850.01
Less: treasury stock
Other comprehensive income
Special reserves
Surplus reserves
General risk reserves
Undistributed profit (XXIV) -342,247,180.77 -343,966,434.57
Total owners 'equity 75,995,669.24 74,276,415.44
Total liabilities and owners 'equity 96,200,796.86 105,444,153.63
The accompanying notes to the financial statements are an integral part of the financial statements.
Legal Representative: Accounting Principal: The Accounting Firm’s Principal:
HAINAN DADONGHAI TOURISM CENTER (HOLDINGS) CO., LTD
Profit Statement
Semi-Annual 2017
(Expressed in Renminbi unless otherwise stated)
Item Note V Current period Last period
I. Operating income (XXV) 15,096,273.42 12,062,797.60
Less: operating cost (XXV) 5,256,112.51 4,460,023.31
Business taxes and surcharges (XXVI) 754,244.27 566,956.63
Selling expenses (XXVII) 2,458,144.93 2,099,035.74
Administrative expenses (XXVIII) 5,089,450.57 4,989,443.77
Financial expenses (XXIX) -180,672.66 -204,752.54
Losses from asset impairment (XXX)
Plus: gains from changes in fair value ("-" for losses)
Investment income ("- " for loss)
Including: income from investments in associates and
joint ventures
II. Operating profits ("-" for losses) 1,718,993.80 152,090.69
Plus: non-operating income (XXXI) 260.00 77,406.00
Including: Gains from disposal of non-current assets
Less: non-operating expenses
Including: Loss on disposal of non-current assets
III. Total profits ("-" for total losses) 1,719,253.80 229,496.69
Less: income tax expenses 57,374.17
IV. Net profit ("-" for net loss) 1,719,253.80 172,122.52
V. Net after-tax of other comprehensive income
(I) Other comprehensive income items which will not be
reclassified subsequently to profit of loss
1. Changes as a result of remeasurement of net
defined benefit plan liability or asset
2. Share of the other comprehensive income of
报表第 4 页
the investee accounted for using equity method
which will not be reclassified subsequently to
profit and loss
(II) Other comprehensive income items which will be
reclassified subsequently to profit or loss
1. Share of the other comprehensive income of
the investee accounted for using equity method
which will be reclassified subsequently to
profit or loss
2. Gains or losses arising from changes in fair
value of available-for-sale financial assets
3. Gains or losses arising from reclassification of
held-to-maturity investment as
available-for-sale financial assets
4. The effect hedging portion of gains or losses
arising from cash flow hedging instruments
5. Translation differences arising on translation of
foreign currency financial statements
6. Others
VI. Total comprehensive income 1,719,253.80 172,122.52
VII. Earnings per share: X. (II)
(I) Basic earnings per share 0.0047 0.0005
(II) Diluted earnings per share 0.0047 0.0005
Legal Representative: Accounting Principal: The Accounting Firm’s Principal:
HAINAN DADONGHAI TOURISM CENTER (HOLDINGS) CO., LTD
Statement of Cash Flow
Semi-Annual 2017
(Expressed in Renminbi unless otherwise stated)
Item Note V Current period Last period
I. Cash flows from operating activities
Cash received from sale of goods and rendering of services 15,736,183.76 12,211,146.88
Refunds of taxes and surcharges 4,801.73
Cash received from other operating activities (XXXII) 677,415.38 545,761.73
Sub-total of cash inflows from operating activities 16,413,599.14 12,761,710.34
Cash paid for goods purchased and services received 3,826,391.38 3,278,812.89
Cash paid to and on behalf of employees 5,608,808.99 4,775,931.92
Cash paid for taxes and surcharges 1,610,025.50 1,706,387.86
Cash paid for other operating activities (XXXII) 2,137,300.17 1,546,880.23
Sub-total of cash outflows from operating activities 13,182,526.04 11,308,012.90
Net cash flows from operating activities 3,231,073.10 1,453,697.44
II. Cash flows from investing activities
Cash received from disposal of investments
报表第 5 页
Cash received from returns on investments
Net cash received from disposal of fixed assets, intangible assets
and other long-term assets
Net cash received from disposal of subsidiaries and other business
units
Cash received from other investing activities
Sub-total of cash inflows from investing activities
Cash paid to acquire and construct fixed assets, intangible assets
1,333,145.20 410,799.00
and other long-term assets
Cash paid for investments 9,000,000.00 9,000,000.00
Net cash paid to acquire subsidiaries and other business units
Cash paid for other investing activities
Sub-total of cash outflows from investing activities 10,333,145.20 9,410,799.00
Net cash flows from investing activities -10,333,145.20 -9,410,799.00
III. Cash flows from financing activities
Cash from absorption of investments
Cash received from borrowings
Cash received from bonds issue
Cash received from other financing activities (XXXII) 19,810,000.00
Sub-total of cash inflows from financing activities 19,810,000.00
Cash paid for debt repayments
Cash paid for distribution of dividends and profits or payment of
interests
Cash paid for other financing activities 29,810,000.00
Sub-total of cash outflows from financing activities (XXXII) 29,810,000.00
Net cash flows from financing activities -10,000,000.00
IV. Effect of fluctuation on exchange rate on cash and cash
equivalents
V. Net increase in cash and cash equivalents -17,102,072.10 -7,957,101.56
Plus: balance of cash and cash equivalents at the beginning of the
27,210,248.01 19,782,392.26
period
VI. Balance of cash and cash equivalents at the end of the period 10,108,175.91 11,825,290.70
The accompanying notes to the financial statements are an integral part of the financial statements.
Legal Representative: Accounting Principal: The Accounting Firm’s Principal:
报表第 6 页
HAINAN DADONGHAI TOURISM CENTER (HOLDINGS) CO., LTD
Statement of Changes in Owners' Equity
Semi-Annual 2017
(Expressed in Renminbi unless otherwise stated)
Current period
Other Other
equity instrument compreh
Speci
Item Less: ensive
Perpetua Capital al Surplus Undistributed Total owner's
Share capital treasury income
Preferre l capital reserve reser reserves profit equity
Other stock
d stock securitie ve
s
I. Balance as at the end of last year 364,100,000.00 54,142,850.01 -343,966,434.57 74,276,415.44
Plus: Changes in accounting policies
Correction of accounting errors in prior
periods
Others
II. Balance as at the beginning of year 364,100,000.00 54,142,850.01 -343,966,434.57 74,276,415.44
III. Increases/decreases in the period (“-” for
1,719,253.80 1,719,253.80
decreases)
(I) Total comprehensive income 1,719,253.80 1,719,253.80
(II) Capital contributed or reduced by owners
1. Ordinary shares contributed by owners
2. Contributions from holders of other equity
instruments
3.Amounts of share-based payments
recognized in owners’ equity
4.Others
(III) Profit distribution
1. Withdrawal of surplus reserves
2. Profit distributed to owners (or
shareholders)
3. Others
(IV) Internal carry-forward of owners' equity
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1. Conversion of capital reserves into paid-in
capital (or share capital)
2. Conversion of surplus reserves into paid-in
capital (or share capital)
3. Making up losses with surplus reserves
4. Others
(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 -342,247,180.77 75,995,669.24
The accompanying notes to the financial statements are an integral part of the financial statements.
Legal representative: Accounting Principal: The Accounting Firm’s Principal:
报表第 8 页
HAINAN DADONGHAI TOURISM CENTER (HOLDINGS) CO., LTD
Statement of Changes in Owners' Equity (continued)
Semi-Annual 2017
(Expressed in Renminbi unless otherwise stated)
Last period
Other Other
equity instrument compreh
ensive Specia Surplu
Item Perpet Less:
income l s Undistributed Total owner's
Share capital ual Capital reserve treasur
Preferre reserv reserv profit equity
capital Other y stock
d stock e es
securiti
es
I. Balance as at the end of last year 364,100,000.00 54,142,850.01 -341,305,382.08 76,937,467.93
Plus: Changes in accounting policies
Correction of accounting errors in prior
periods
Others
II. Balance as at the beginning of year 364,100,000.00 54,142,850.01 -341,305,382.08 76,937,467.93
III. Increases/decreases in the period (“-” for 172,122.52 172,122.52
decreases)
(I) Total comprehensive income 172,122.52 172,122.52
(II) Capital contributed or reduced by owners
1. Ordinary shares contributed by owners
2. Contributions from holders of other equity
instruments
3.Amounts of share-based payments
recognized in owners’ equity
4.Others
(III) Profit distribution
1. Withdrawal of surplus reserves
2. Profit distributed to owners (or
shareholders)
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3. Others
(IV) Internal carry-forward of owners' equity
1. Conversion of capital reserves into paid-in
capital (or share capital)
2. Conversion of surplus reserves into paid-in
capital (or share capital)
3. Making up losses with surplus reserves
4. Others
(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 -341,133,259.56 77,109,590.45
The accompanying notes to the financial statements are an integral part of the financial statements.
Legal representative: Accounting Principal: The Accounting Firm’s Principal:
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海南大东海旅游中心股份有限公司
2017 年半年度财务报告
财务报表附注
HAINAN DADONGHAI TOURISM CENTER (HOLDINGS) CO.,
LTD
NOTES TO FINANCIAL STATEMENT
SEMI-ANNUAL 2017
1. Company basic information
1.1 Company profile
Hainan Dadonghai Tourism Center (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 of the former Hainan Sanya Dadonghai Tourism Center
Development Ltd. and approved by the Hainan Provincial 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 division under the approval of
the Hainan Provincial Securities Administration Office with a document of Qiong Zheng Ban
[1996] No. 58. On October 8, 1996 and January 28, 1997, the Company, with duly approval,
went public by issuing 80 million shares of B stock and 14 million shares of A stock
respectively 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 right of their shares by paying shares to tradable share holders, and tradable share
holders got paid three shares for every ten of their shares. The Company operates business in
the industry of tourism and catering services.
As of June 30, 2017, the Company’s total capital stock is 364,100,000 shares. The Company’s
registered capital is RMB 364.1 million. The legal representative is Li Yuanbin. The
registration number of its Business License for Enterprise Legal Person (Duplicate) is
4600001003983. The legal registerred residence is Dadonghai, Hedong District, Sanya. Its
scope of business includes: accommodation and catering industry (limited to those operated
by branches); photography; operation of ornamental plant bonsai, knitwear and textiles,
general merchandise, hardware and electrical equipment, chemical products (excluding those
require specialized licenses), daily necessities, industrial means of production (excluding
those require specialized licenses), metal materials and machinery equipment; commission
sale of plane, bus, train and ship tickets (items in require of administrative permission shall be
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海南大东海旅游中心股份有限公司
2017 年半年度财务报告
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operated under license). The Company’s largest shareholder is the Hainan Luoniushan
(Holdings) Co., Ltd.
These financial statements have been approved by all directors of the Company on August 17,
2017 for disclosure.
1.2 Scope of consolidation (aggregation) of financial statements
Until June 30, 2017, the scope of consolidation (aggregation) of financial statements as below:
Company Name Relationship
South China Grand Hotel of Hainan Dadonghai Tourism Center
(Holdings) Co., Ltd (hereinafter referred to as “South China Subsidiary
Grand Hotel”)
The consolidate (Summarize) financial statement range in the period and its changes found
more in the “VI Change of Consolidate Range” in Note
2 Basis of preparation for financial statements
2.1 Basis of preparation
Based on going concern, according to actually occurred transactions and events, the
Company prepares its financial statements in accordance with the Accounting Standards
for Business Enterprises – Basic Standards and concrete accounting standards,
Accounting Standards for Business Enterprises – Application Guidelines, Accounting
Standards for Business Enterprises – Interpretations and other relevant provisions
(collectively known as “Accounting Standards for Business Enterprises”), as well as the
disclosure requirements of Regulation on the Preparation of Information Disclosure of
Companies Issuing Public Shares No.15 - General Requirements for Financial Reports (as
revised in 2014) by the China Securities Regulatory Commission.
2.2 Going concern
The Company is currently operating normal, net cash flows from operating activities is
positive, the Company is expected to continue operate as going concern in the next twelve
months.
3 Principal accounting policies and estimates
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2017 年半年度财务报告
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3.1 Statement on compliance with Accounting Standards for Business
Enterprises
The financial statements prepared by the Company meet the requirements of the
Accounting Standards for Business Enterprises and truly and completely reflect the
Company’s financial position, and its operating results, cash flows 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 operating cycle of the Company is twelve months.
3.4 Functional currency
RMB is adopted as the functional currency.
3.5 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 and the unrestricted deposit. The term “cash equivalents” refers to
short-term (maturing within three months from acquisition) and highly liquid investments
that are readily convertible to known amounts of cash and which are subject to an
insignificant risk of change in value.
3.6 Foreign currency transactions
Foreign currency transactions are converted into RMB for recording purpose at the spot
exchange rate on the date when the transaction occurs.
Balances of foreign currency monetary items are measured at the spot exchange rate on
the balance sheet date. The exchange difference arising therefrom shall be included in the
current profit and loss, except that those exchange differences arising from the special
borrowings of foreign currency related to the acquired and constructed assets qualified for
capitalization shall be dealt with according to the principle of borrowing cost
capitalization. Foreign currency non-monetary items measured at historical costs shall
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2017 年半年度财务报告
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still be converted at the spot exchange rates on the date when the transactions occur, and
the amount in functional currency shall remain unchanged. Foreign currency
non-monetary items measured at fair value shall be translated at the spot exchange rates
on the date when the fair value is determined. The exchange difference arising therefrom
shall be included in the current profit and loss or capital reserves.
3.7 Financial instruments
Financial instruments include financial assets, financial liabilities and equity instruments.
3.7.1 Classification of financial instruments
Financial assets and liabilities are classified into the following categories according
to the purpose of acquisition: financial assets or financial liabilities measured at fair
value and whose variation is included in the current profit and loss, including
financial assets or financial liabilities held for trading and financial assets 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 financial liabilities, etc.
3.7.2 Recognition basis and measurement method of financial instruments
(1) Financial assets (financial liabilities) measured at fair value and whose
variation is included in the current profit and loss
Financial assets (financial liabilities) are initially recorded at fair values when
acquired (deducting cash dividends that have been declared but not distributed
and bond interests that have matured but not been drawn). 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 investment income. 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 upon disposal; meanwhile, adjustment is made to gains or
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2017 年半年度财务报告
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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 when acquired (deducting bond interests that have
matured but not been drawn).
The interest revenue calculated at amortization cost and effective interest rate
(nominal interest rate is adopted when the difference between the actual
interest rate and the nominal interest rate is minor) during the holding period is
recognized as investment income. Effective interest is recognized when
obtained, and remains 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 the investment profit and loss upon disposal.
(3) Accounts receivable
For creditor’s rights receivable arising from external sales of goods or
rendering of service by the Company and other creditor's rights of other
enterprises (excluding liability instruments quoted in an active market) held by
the Company, including accounts receivable, other receivables, notes
receivable and prepayments, etc., the initial recognition amount shall be the
contract price or agreement price receivable from purchasing party. Accounts
receivable with financing nature are initially recognized at their present values.
The difference between the amount received and the book value of the
accounts receivable is included in the 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 when acquired (deducting cash dividends that have been
declared but not been paid or bond interests that have matured but not been
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2017 年半年度财务报告
财务报表附注
drawn).
The interests or cash dividends to be received during the holding period are
recognized as investment income. It is measured in fair value at the end of the
period and change in fair values is included in other comprehensive income at
the end of the period. However, the equity instrument investments unquoted in
an active market and whose fair value cannot be measured reliably, and the
derivative financial assets which are connected with the said equity instrument
and must be settled by delivering the said equity instrument shall be measured
on the costs basis.
The difference between the amount received and the book value of the
financial asset is included in the investment profit and loss upon disposal.
Meanwhile, the corresponding part of fair value accumulated change 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 and subsequently measured at amortized costs.
3.7.3 Recognition basis and measurement method of transfer of financial assets
When transfer of financial assets occurs, if nearly all of the risks and rewards of
ownership of the financial assets have been transferred to the transferee, the
Company derecognizes the financial assets; if nearly all of the risks and rewards of
ownership of the financial assets are retained, the Company shall not derecognize
the financial assets.
The principle of substance over form is adopted to determine whether the transfer
of a financial asset satisfies the criteria as described above for derecognition of a
financial asset. The Company shall classify the transfer of a financial asset into the
entire transfer and the partial transfer of financial asset. If the entire transfer of
financial asset satisfies the criteria for derecognition, the difference between the
amounts of the following two items shall be included in the current profit and loss:
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海南大东海旅游中心股份有限公司
2017 年半年度财务报告
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(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 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 partial transfer of financial asset satisfies the criteria for derecognition, the
entire book value of the transferred financial asset shall be split into the
derecognized and recognized part according to their respective fair value and the
difference between the amounts of the following two items shall be included in 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 corresponding to 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 continue to be recognized, and the consideration received
will be recognized as a financial liability.
3.7.4 Derecognition criteria of financial liabilities
A financial liability shall be totally or partly derecognized if its present obligations
are totally or partly dissolved. Where the Company enters into an agreement with a
creditor so as to substitute the existing financial liabilities with any new financial
liability, and the new financial liability is substantially different from the
contractual stipulations regarding the existing financial liability, it shall
derecognize the existing financial 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
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of the existing financial liability, the Company shall derecognize the existing
financial liability totally or partly, and at the same time 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 the financial liabilities derecognized and the consideration paid
(including non-cash assets surrendered or new financial 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 the entire book value of whole financial liabilities
according to the comparative fair value of the part that continues to be recognized
and the de-recognized part. The difference between the book value allocated to the
derecognized part and the considerations paid (including non-cash assets
surrendered and the new financial liabilities assumed) shall be included in the
current profit and loss.
3.7.5 Method of determining the fair value of financial assets and financial
liabilities
For 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 valuation technique. During the valuation, the
Company use valuation techniques that are appropriate in the circumstances 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 participants would take into account in a transaction for the asset or liability,
and give priority to the use of relevant observable inputs. Unobservable inputs are
only adopted when relevant observable inputs cannot be obtained or are
impracticable to obtain.
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3.7.6 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 assets measured at fair value through current profit and loss on the
balance sheet date. Impairment provision is required 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, or such decline is not temporary after considering
various factors, the impairment shall be confirmed, the accumulated 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, the previously
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 account receivables impairment loss.
3.8 Provision for bad debts of receivables
3.8.1 Provision for bad debts of account receivables that are individually significant:
Assessment basis or standard of amount individually significant: top five accounts
receivable and other receivables in terms of individual amount at the end of the
year.
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Method of provision for bad debts of accounts receivable that are individually
significant: after separate impairment test, provision for bad debts shall be made at
the difference of present value of estimated future cash flows in short of their book
values, and shall be include in current profit and loss. For accounts receivable with
no impairment found after separate tests, they shall be included in corresponding
portfolios for provisions for bad debts. For accounts receivable with confirmed
impairment losses after separate tests, they shall not be included in portfolios of
accounts receivable with similar credit risk features for impairment tests.
3.8.2 Provision for bad debts of accounts receivable made on the basis of
portfolio:
Basis of determining portfolio
Aging portfolio Length of the aging
Method of making provision for bad debts on the basis of portfolio
Aging portfolio Aging analysis method
Proportions of provision for bad debts on the basis of aging analysis in portfolios
are as follows:
Proportion of provision for Proportion of provision for other
Aging
account receivable (%) receivables (%)
Within 1 year (including 1 year)
1-2 years 5 5
2-3 years 15 15
3-4 years 25 25
4-5 years 50 50
More than five years 100 100
3.8.3 Accounts receivable that are individually insignificant but with bad debt
provision provided on an individual basis:
Reason for bad debt provision provided on an individual basis: For account
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receivable with an individual balance lower than the top five at the end of the year
and with objective evidence showing it may be impaired, and for uncollectible
accounts receivable arising from repeal and liquidation of debtor after taking legal
clearance procedures, their provision for bad debts shall be provided on an
individual basis.
Method of provision for bad debt: For accounts receivable with objective evidence
showing they may be impaired, they shall be separate from relevant portfolios and
separately tested for impairment to recognize the impairment losses.
Other remarks: provision for impairment of accounts receivable, excluding debts
receivable and other receivables, shall be made at the specific identification
method.
3.8.4 Reversal of bad debt provisions
If there is evidence showing that the value of the account receivable has been
recovered, and that the recovery is objectively related to events after recognition of
the loss, the originally recognized impairment loss should be reversed and included
in current profit and loss. However, the book values after such reversal shall not
exceed the amortized costs of the account receivable on the reversal date, assuming
there is no provision for impairment.
3.9 Inventories
3.9.1 Classification of inventories
Inventories are classified into raw materials, stock commodities, low-cost
consumables, food materials, fuels, etc.
3.9.2 Measurement method of dispatched inventories
Stock commodities are measured at selling price and their purchase and sale price
differential are amortized over every month at the method of comprehensive
differential. The purchasing and storage of stock materials are measured at actual
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cost, and at the first-in-first-out method when fetched for use. Low-cost
consumables are amortized in full when fetched for use.
3.9.3 Determination basis of net realizable values of inventories and provision
method of inventory depreciation reserve
After the comprehensive inventory count at the end of the period, provisions for
inventory depreciation reserve are made or adjusted at the lower of their costs or net
realizable values.
In normal operation process, for merchandise inventories for direct sale, including
stock commodities and materials for sale, their net realizable values are determined
at the estimated selling prices minus the estimated selling expenses and relevant
taxes and surcharges; for inventories held to execute sales contract or service
contract, their net realizable values are calculated on the basis of contract price. If
the quantities of inventories specified in sales contracts are less than the quantities
held by the Company, the net realizable value of the excess portion of inventories
shall be based on general selling prices.
At the end of the period, provisions for inventory depreciation reserve are made on
an individual basis. For inventories with large quantity and low unit price, the
provisions for inventory depreciation reserve are made on a category basis. For
inventories related to the product portfolios manufactured and sold in the same area,
and of which the final usage or purpose is identical or similar thereto, and which is
difficult to separate from other items for measurement purposes, the provisions for
inventory depreciation reserve shall be made on a portfolio basis.
If any factor rendering write-downs of the inventories has been eliminated, the
amounts written down are recovered and reversed from the inventory depreciation
reserve, which has been provided for. The reversed amounts are included into the
current profit and loss.
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3.9.4 Inventory system
Perpetual inventory system is adopted.
3.9.5 Amortization method of low-cost consumables and packaging materials
(1) Low-cost consumables are amortized at lump-sum method;
(2) Packaging materials are amortized at lump-sum method.
3.10 Long-term equity investments
3.10.1 Determination basis of joint control or significant influence over the investee
Joint control is the relevant agreed sharing of control over an arrangement, and the
arranged relevant activity must be decided under unanimous consent of the parties
sharing control. When the Company and other joint parties do joint control and
have rights to the net assets over an investee, the investee shall be the Company’s
joint venture.
Significant influence is the power to participate in the financial and operating policy
decisions of the investee but is not control or joint control over those polices (such as
has a representative in the Board or similar authority organ under the name of the
invested unit). When an investing enterprise is able to have significant influences on
an investee, the investee shall be its associate.
3.10.2 Determination of investment cost
(1) Long-term equity investments acquired from business combinations
For business combination under common control: if the Company makes
payment in cash, transfer non-cash assets or bear debts and issues equity
securities as the consideration for the business combination, the book value of
the owners’ equity of the combinee obtained is recognized as the initial cost of
the long-term equity investment on the combination date. The difference
between the initial investment cost and the carrying amount of cash paid,
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non-cash assets transferred, liabilities assumed and par value of share issued
shall be adjusted to the stock premium in the capital reserved; if there is no
sufficient premium in the capital reserve for write-downs, the retained earnings
are adjusted.
When exercising control over an investee under common control due to
additional investment or other reasons, the initial investment cost of the
long-term equity investment shall be determined by the absorbing party’s share
of the net assets of the party being absorbed in the consolidated financial
statements of the ultimate controlling party at combination date. The difference
between the initial investment cost of the long-term equity investment at
combination date and the sum of the total of the carrying amount of equity
investment held by the acquirer before the combination date and the newly
increased investment on the combination date shall be adjusted to share
premium. If the balance of share premium is not sufficient, any excess shall be
adjusted to retained earnings.
For business combination not under common control, the Company recognizes
the combination cost determined on the combination date as the initial cost of
long-term equity investment. When exercising control over an investee not
under common control due to additional investment or other reasons, in
stand-alone financial statements, the investor shall change to the cost method
and use the carrying amount of the previously-held equity investment, together
with the additional investment cost, as the initial investment cost under the cost
method. The audit, legal, valuation and consulting fees, other intermediary fees,
and related administrative fees paid by the absorbing party or acquirer for the
business combination, shall be recognized in profit or loss as incurred; the cost
of issuing equity securities or debt securities as the combination consideration
shall be included in the initial cost of the equity securities or debt securities.
(2) Long-term equity investments acquired by other means
For long-term equity investments acquired from making payments in cash, the
initial cost is the actually paid purchase cost.
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For long-term equity investments acquired from issuance of equity securities,
the initial cost is the fair value of the issued equity securities.
If the exchange of non-monetary assets has commercial substance, and the fair
values of assets traded out and traded in can be measured reliably, the initial
cost of long-term equity investment traded in with non-monetary assets are
determined based on the fair values of the assets traded out together with
relevant taxes unless there is any conclusive evidence that the fair values of the
assets traded in are more reliable. If the exchange of non-monetary assets does
not meet the above criteria, the book value of the assets traded out and relevant
taxes are recognized as the initial cost of long-term equity investment traded in.
For long-term equity investment acquired from debt restructuring, the initial
cost is determined based on the fair value.
3.10.3 Subsequent measurement and recognition of profit or loss
(1) Long-term equity investment adopting cost method
Long-term equity investments of the Company in its subsidiaries are accounted
for at cost method, except for the actual price paid for acquisition of
investment or the cash dividends or profits contained in the consideration
which have been declared but not yet distributed, the Company recognizes the
proportion it shall enjoy in the cash dividends or profits declared by the
investee as current investment income.
(2) Long-term equity investment adopting equity method
A long-term equity investment in an associate or a joint venture shall be
accounted for using the equity method. If the cost of initial investment is in
excess of the proportion of the fair value of the net identifiable assets in the
investee when the investment is made, the difference will not be adjusted to the
initial cost of long-term equity investment; if the cost of initial investment is in
short of the proportion of the fair value of the net identifiable assets in the
investee when the investment is made, the difference will be included in the
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current profit and loss.
The Company recognizes the share of the investee’s net profits or losses, as
well as its share of the investee’s other comprehensive income, as investment
income or losses and other comprehensive income, and adjusts the carrying
amount of the investment accordingly. The carrying amount of the investment
shall be reduced by the portion of any profit distributions or cash dividends
declared by the investee that is attributable to the investor. The investor’s share
of the investee’s owners’ equity changes, other than those arising from the
investee’s net profit or loss, other comprehensive income or profit distribution,
would be recognized in the investor’s equity, and the carrying amount of the
long-term equity investment shall be adjusted accordingly.
The Company recognizes its share of the investee’s net profits or losses after
making appropriate adjustments based on the fair values of the investee’s
identifiable net assets at the acquisition date according to the Company’s
accounting policies and accounting period. When holding the investment, if the
investee is capable of providing consolidated financial statements, the profit or
loss shall be measured based on the net profit, other comprehensive income
and other changes in owners’ equity attributed to the Company recorded in the
consolidated financial statements.
The unrealized profits or losses resulting from transactions between the
Company and its associate or joint venture are eliminated in proportion to the
Company’s equity interest in the investee, based on which investment income
or losses shall be recognised. Any losses resulting from transactions between
the investor and the investee, which are attributable to asset impairment shall
be recognized in full. The transactions of investing or selling assets between
the Company and its associate or joint venture are accounted for under relevant
accounting policies when the asset constitutes a business.
When the Company confirms that it should share losses of the investee,
treatment shall be done in following sequence: firstly, the book value of the
long-term equity investment shall be reduced; secondly, where the book value
is insufficient to cover the share of losses, investment losses are recognized to
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the extent of book value of long-term equity which form net investment in the
investee in substance and the book value of long-term equity shall be reduced;
finally, after all the above treatments, if the Company is still responsible for
any additional liabilities in accordance with the provisions stipulated in the
investment contracts or agreements, estimated liabilities are recognized and
included into current investment loss according to the obligations estimated to
undertake. If the investee achieves profit in subsequent periods, the treatment is
in the reversed sequence described above, i.e. after deduct any unrecognized
investment losses, reduce book value of estimated liabilities recognized, restore
book values of other long-term equity which form net investment in the
investee in substance, and of long-term equity investment, and recognize
investment income at the same time.
(3) Disposal of long-term equity investment
On disposal of a long-term equity investment, the difference between the
proceeds actually received and the carrying amount shall be recognized in
profit or loss for the current period.
For a long-term equity investment accounted for using the equity method, any
other comprehensive income previously recognized shall be accounted for on
the same basis as would have been required if the investee had directly
disposed of the related assets or liabilities on a por-rata basis upon the disposal
of the equity investment. The owners’ equity recognised due to the investor’s
share of the investee’s owners’ equity changes, other than those arising from
the investee’s net profit or loss, other comprehensive income or profit
distribution, is included in current profit or loss on a pro-rata basis.
When the Company can no longer exercise joint control of or significant
influence over an investee due to partial disposal of equity investment or other
reasons, the remaining equity investment shall be accounted for in accordance
with “Accounting Standard for Business Enterprises No.22-Financial
Instruments: Recognition and Measurement”. The difference between the fair
value and the carrying amount at the date of the loss of joint control or
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significant influence shall be charged to profit or loss for the current period.
When the previously-held equity investment is accounted for under the equity
method, any other comprehensive income previously recognized shall be
accounted for on the same basis as would have been required if the investee
had directly disposed of the related assets or liabilities for the current period
upon discontinuation of the equity method. The owners’ equity recognised due
to the investor’s share of the investee’s owners’ equity changes, other than
those arising from the investee’s net profit or loss, other comprehensive income
or profit distribution, is transferred to current profit or loss upon
discontinuation of the equity method.
When no longer exercise control over an investee due to partial disposal of
equity investment or other reasons, and with the retained interest, still has joint
control of , or significant influence over, the investee, when preparing the
individual financial statements, the Company shall change to the equity method
and adjust the remaining equity investment as if the equity method had been
applied from the date of the first acquisition. If the Company can not exercise
joint control of or significant influence over the investee after partial disposal
of equity investment, the remaining equity investment shall be accounted for in
accordance with “Accounting Standard for Business Enterprises
No.22-Financial Instruments: Recognition and Measurement”, and the
difference between the fair value and carrying amount at the date of the loss of
control shall be charged to profit or loss for the current period.
The equity investment disposed was obtained over additional investment or
other reasons through business combination, when preparing the individual
financial statements, and the remaining equity investment accounted on cost
method or equity method, the other comprehensive income and other owner’s
equity recognized due to the equity investment held before acquisition date was
accounted for under the equity method are carried forward on a pro-rata basis;
when the remaining equity investment is accounted for in accordance with
“Accounting Standard for Business Enterprises No. 22 – Financial Instruments:
Recognition and Measurement”, the other comprehensive income and other
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owner’s equity are totally carried forward.
3.11 Investment property
Investment property refers to possessing real estate for gaining rent or capital
appreciation, or both, including the rental of the land use right, possession and
prepare to value-added after the transfer of the land use rights and the rental of
buildings leased (Including rental buildings after completion of construction or
development activities or in the development processing).
Investment property is measured at their actual cost in the Company. Due to
the method of determining is actual cost model for investment property-its
method of provision for depreciation policy is same with fixed assets’ when the
investment properties are constructions or buildings, its method of provision
for amortization policy is same with Intangible assets’ when the investment
property is land usage right.
3.12 Fixed assets
3.12.1 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 will only be recognized when all the following
criteria are satisfied:
(1) It is probable that the economic benefits relating to the fixed assets will flow
into the Company;
(2) The costs of the fixed assets can be measured reliably.
3.12.2 Classification of fixed assets
Fixed assets are classified into buildings and constructions, machinery equipment,
transportation equipment, electronic entertainment equipment, other equipment and
Improvement.
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3.12.3 Initial measurement of fixed assets
Fixed assets are initially measured at their actual cost when acquired.
The costs of a purchased fixed asset are determined at the purchase price, the
relevant taxes, and the traffic expenses, loading and unloading fees, installation
fees and professional service fees arising from preparing the fixed asset for its
intended use.
If the payment for a fixed asset is delayed beyond the normal credit conditions and
it is of financing nature in effect, the costs of the fixed asset shall be determined
based on the present value of the purchase price.
The cost of a self-constructed fixed asset shall be formed by the necessary expenses
incurred for preparing the asset for its intended use.
The fixed assets which the debtor uses to pay back the debt in debt restructuring
should be recognized at the fair value of the fixed assets. The difference between
the book value of restructured debts and the fair value of fixed assets used to pay
back the debt should be recorded into current profit and loss;
On the premise that non-monetary asset trade is of commercial nature and the fair
value of the asset traded in or out can be measured reliably, the fixed asset traded in
with non-monetary asset should be recognized at the fair value of the asset traded
out, unless any unambiguous evidence indicates that the fair value of the asset
traded in is more reliable; as to the non-monetary asset trade not meeting the
aforesaid premise, the book value of the asset traded out and related taxes and
surcharges payable should be recognized as the cost of the fixed asset, with gains or
losses not recognized.
As for the book-entry value, the fixed assets acquired from the absorption and
merger of an enterprise under common control are recognized at the book value of
the merged enterprise; the fixed assets acquired from the absorption and merger of
an enterprise not under common control are recognized at the fair value.
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The book-entry value of a fixed asset acquired under financing lease is measured at
the asset’s fair value on the commencement date of the lease or the present value of
the minimum lease payment, whichever is lower.
3.12.4 Method of provision for impairment of fixed assets
The fixed assets are depreciated at straight-line-method, and the depreciation rates
are determined as follows based on the category, estimated economic useful lives
and estimated residual values (5% of original values):
Estimated net residual Annual depreciation
Estimated useful life
Category rate rate
(Year)
(%) (%)
Buildings and
20-40 5 4.75-2.37
constructions
Machinery equipment 8-20 5 11.87-4.75
Electronic
entertainment 5-16 5 19-5.93
equipment
Transportation
7-12 5 13.57-7.91
equipment
Other equipment 8 5 11.87
Improvement 5 19
3.13 Construction in progress
The initial book values of the fixed assets are stated at total expenditures incurred before
construction in progress reaches the working condition 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 into fixed
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. And
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the fixed assets shall be depreciated in accordance with the Company’s policy on fixed
asset depreciation. Adjustment shall be made to the originally and provisionally estimated
value based on the actual cost after the completion of settlement is handled, but
depreciation already provided will not be adjusted.
3.14 Borrowing costs
3.14.1 Recognition principles of capitalization of borrowing costs
Borrowing costs include the interest of borrowings, the amortization of discount or
premium, auxiliary expenses, exchange differences incurred by foreign currency
borrowings, etc.
The borrowing costs incurred to the Company and directly attributable to the
acquisition and construction or production of assets eligible for capitalization
should be capitalized and recorded into asset costs; other borrowing costs should be
recognized as costs according to the amount incurred and be included into current
profit and loss.
Assets eligible for capitalization refer to fixed assets, investment property,
inventories and other assets which may reach their intended use or sale status only
after long-time acquisition and construction or production 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 or the undertaking of interest-bearing debts for
acquiring and constructing or producing assets eligible for capitalization, have
already been incurred;
(2) Borrowing costs have already been incurred;
(3) The acquisition and construction or production activities which are necessary
to prepare the assets for their intended use or sale have already been started.
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3.14.2 Capitalization period of borrowing costs
Capitalization period refers to the period from the beginning of capitalization to the
cease of capitalization, excluding the period of capitalization suspension of
borrowing costs.
Capitalization of borrowing costs should be ceased when the acquired and
constructed or produced assets eligible for capitalization have reached their
intended use or sale condition.
When some projects among the acquired and constructed or produced assets
eligible for capitalization are completed and can be used separately, the
capitalization of borrowing costs of such projects should be ceased.
If all parts of the acquired and constructed or produced assets are completed but the
assets cannot be used or sold externally until overall completion, the capitalization
of borrowing costs should be ceased at the time of overall completion of the said
assets.
3.14.3 Period of capitalization suspension
If the acquisition and construction or production activities of assets eligible for
capitalization are interrupted abnormally and this condition lasts for more than
three months, the capitalization of borrowing costs should be suspended; if the
interruption is necessary for the acquisition and construction or production to
prepare the assets for their intended use or sale, the capitalization of borrowing
costs should continue. The borrowing costs incurred during interruption are
recognized in the current profit and loss, and the capitalization of borrowing costs
continues after the restart of the acquisition and construction or production
activities of the assets.
3.14.4 Calculation method of capitalization amount of borrowing costs
As for special borrowings borrowed for acquiring and constructing or producing
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assets eligible for capitalization, borrowing costs of special borrowing actually
incurred in the current period less the interest income of the loans unused and
deposited in bank or return on temporary investment should be recognized as the
capitalization amount of borrowing costs.
As for general borrowings used for acquiring and constructing or producing assets
eligible for capitalization, the interest of general borrowings to be capitalized
should be calculated by multiplying the weighted average of asset disbursements of
the part of accumulated asset disbursements exceeding special borrowings at the
end of every month by the capitalization rate of used general borrowings. The
capitalization rate is calculated by weighted average interest rate of general loans.
As for borrowings with discount or premium, the to-be-amortized discount or
premium in each accounting period should be recognized by effective interest rate
method, and the interest for each period should be adjusted.
3.15 Intangible assets
3.15.1 Measurement method of intangible assets
(1) The Company initially measures intangible assets at cost on acquisition;
The cost of an externally acquired intangible asset comprises its purchase price,
related taxes and surcharges and any other directly attributable expenditure of
preparing the asset for its intended use. If the deferred payment of purchase
price of intangible assets exceeding normal credit terms is substantially of
financial nature, the cost of intangible assets should be recognized at the
present value of the purchase price.
The intangible assets which the debtor uses to pay back the debt in debt
restructuring should be recognized at the fair value of the intangible assets. The
difference between the book value of restructured debts and the fair value of
intangible assets used to pay back the debt should be recorded into the current
profit and loss;
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On the premise that non-monetary assets trade is of commercial nature and the
fair value of the assets traded in or out can be measured reliably, the intangible
assets traded in by the trade of non-monetary assets should be recognized at the
fair value of the assets traded out, unless any unambiguous evidence indicates
that the fair value of the assets traded in is more reliable; as to the
non-monetary assets trade not meeting the aforesaid premise, the book value of
the assets traded out and related taxes payable should be recognized as the cost
of the intangible assets traded in, with gains or losses not recognized.
The intangible assets obtained by the absorption and merger of an enterprise
under common control are recognized at the book value of the merged
enterprise; the intangible assets obtained by the absorption and merger of an
enterprise not under common control are recognized at the fair value.
Costs of intangible assets developed internally and independently include: the
costs of materials and labor services used to develop the intangible assets, the
registration fee, the amortization of other patents and franchise used in the
process of development, the interest of capitalization, and other direct expenses
for preparing the intangible assets for their intended use.
(2) Subsequent measurement
The useful life of intangible asset is analyzed on acquisition.
As for intangible assets with limited useful lives, straight-line amortization
method is adopted in the period when the intangible assets generate economic
benefit for enterprise; if the period when the intangible assets generate
economic benefit for enterprise cannot be forecasted, the intangible assets
should be deemed as those with indefinite useful lives and should not be
amortized.
3.15.2 Estimation of useful life of intangible assets with limited useful life
Item Estimated useful life Basis
Land use right 50 years Validity term of land use certificate
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The useful lives and amortization method of intangible assets with limited useful
lives are reviewed at the end of each period.
Upon review, the useful lives and amortization method of the intangible assets as at
the end of the year are not different from those estimated before.
3.15.3 Determination basis of intangible assets with indefinite useful lives
As at the balance sheet date, the Company has no intangible assets with indefinite
useful lives.
3.16 Impairment of long-term assets
If there is any indication that the long-term assets such as long-term equity investment,
investment properties accounted through cost pattern, fixed assets, construction in
progress, intangible assets etc. may be impaired at the balance sheet date, an impairment
test would be implemented. If the result of impairment test indicates the recoverable
amounts of the long-term assets are lower than their book values, the difference between
the recoverable amounts and book values is recognized as impairment loss, provisions for
impairment of the long-term assets are made. The recoverable amounts of the long-term
assets are the higher of their fair values less costs to disposal and the present values of the
estimated future cash flows of the long-term assets. The provision for impairment is
recognized and calculated on the individual basis. If it is difficult to estimate the
recoverable amount of the individual asset, the Company estimates the recoverable
amount of the asset group that the individual asset belongs to. The asset group is the
minimum asset group which can generate cash flows independently.
The mentioned impairment loss will not be reversed in subsequent accounting period
once it had been recognized.
3.17 Long-term deferred expenses
Long-term deferred expenses are various expenses already incurred, which shall be
amortized over current and subsequent periods with the amortization period exceeding
one year.
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3.17.1 Amortization method
Long-term deferred expenses are evenly amortized over the beneficial period.
3.17.2 Amortization period
Item Amortization period
Hotel exterior wall decoration 4 years
3.18 Employee compensation
3.18.1 Short-term employee benefits
The Company recognizes, in the accounting period in which an employee provides
service, actually occurred short-term employee benefits as a liability, with a
corresponding charge to current profit or loss or relevant cost of assets.
Payments made by the Company of social security contributions for employees,
and union running costs and employee education costs provided in accordance with
relevant requirements, in the accounting period in which employees provide
services, is calculated according to prescribed bases and percentages of provision in
determining the amount of employee benefits.
Employee benefits which are non-monetary benefits are measured at fair value.
3.18.2 Termination benefits
When the Company cannot unilaterally withdraw the offer of termination benefits
because of an employment termination plan or a curtailment proposal, or when the
Company recognizes costs or expenses related to a restructuring that involves the
payment of termination benefits (the earlier is adopted), the employee benefits
liabilities caused by termination benefits are recognized and included in current
profit or loss.
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3.18.3 Post-employment benefits
Payments made by the Company of basic endowment insurance and unemployment
insurance in accordance with relevant requirements of local government, in the
accounting period in which employees provide services, is calculated according to
prescribed bases and percentages of provision of local requirements in determining
the amount payable, is recognized as a liability, with a corresponding charge to
current profit or loss or relevant cost of assets.
3.19 Estimated liabilities
When the Company is involved in proceedings, debt guarantees, onerous contracts
and reorganization events, if such events may require delivery of assets or
rendering of services in the future and the amounts of such events can be reliably
measured, estimated liabilities are recognized.
3.19.1 Recognition criteria of estimated liabilities
The Company recognizes the estimated liabilities when obligations related to
contingencies satisfy all the following conditions:
(1) The obligation is a present obligation of the Company;
(2) The performance of the obligation is likely to result in outflow of economic
benefits from the Company; and
(3) The amount of the obligation can be measured reliably.
3.19.2 Measurement method of estimated liabilities
The estimated liabilities of the Company are initially measured as the best estimate
of expenses required for the performance of relevant present obligations.
The Company, when determining the best estimate, has had a comprehensive
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consideration of risks with respect to contingencies, uncertainties and the time
value of money. If the time value of money is significant, the best estimate shall be
determined after discounting the relevant future outflow of cash.
The best estimate shall be accounted as follows in different circumstances:
If there is continuous range (or interval) for the necessary expenses, and
probabilities of occurrence of all the outcomes within this range are equal, the best
estimate shall be determined at the average amount of upper and lower limits
within the range.
If there is no continuous range (or interval) for the necessary expenses, or
probabilities of occurrence of all the outcomes within this range are unequal despite
such a range exists, the outcomes within this range are unequally likely to occur, in
case that the contingency involves a single item, the best estimate shall be
determined at the most likely outcome; if the contingency involves two or more
items, the best estimate should be determined according to all the possible
outcomes with their relevant probabilities.
When all or part of the expenses necessary for the settlement of an estimated
liability of the Company is expected to be compensated by a third party, the
compensation should be separately recognized as an asset only when it is virtually
certain that the compensation will be received. The amount recognized for the
compensation should not exceed the book value of the estimated liability.
3.20 Revenue
3.20.1 Recognition and measurement principles of revenue from sales of goods
(1) Overall recognition and measurement principles of revenue from sales of
goods
When the Company has transferred significant risks and rewards of ownership
of the goods to the buyer; the Company retains neither continuous management
rights associated with ownership of the goods sold nor effective control over
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the goods sold; the relevant amount of revenue can be measured reliably; it is
highly likely that the economic benefits associated with the transaction will
flow into the enterprise, and the relevant amount of cost incurred or to be
incurred can be measured reliably, revenue from sales of goods shall be
recognized.
(2) Recognition criteria of revenue from selling goods and specific recognition
timing criteria of revenue of the Company
The Company provides hotel accommodation service as well as goods. After
the recognition of both housekeeping department and hotel reception desk, the
daily business report is established. The accounting department makes sure the
significant risks and rewards of ownership of the goods have been transferred
to the client, the selling revenue is recognized.
3.20.2 Recognition and measurement principles of revenue from providing labor
services
(1) The hotel room service, catering (breakfast) service etc. of the Company, after
the hotel room service, catering (breakfast) service etc. had provided, and each
consumption department had checked with the receptionist, the daily business
report and detailed report of account receivables are established, and the
reports are submitted to accounting department, which recognizes the revenue
after examining the daily reports.
(2) Revenue from outsourced restaurant and site rental is recognized according to
contract or agreement time period and time of collecting.
3.20.3 Recognition basis of revenue from transferring the use right of assets
The economic benefits related to the transaction may flow into entities and the
amount of revenue can be reliably measured. The amount of revenue from
transferring use right of assets is recognized as follows in different circumstances:
(1) The amount of interest income is determined by the time and effective interest
rate for others to use the monetary fund of the Company.
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(2) The amount of revenue from usage is determined according to the charging
time and method as agreed in relevant contract or agreement.
3.21 Government subsidies
3.21.1 Types
Government subsidies are monetary assets and non-monetary assets acquired free
of charge by the Company from the government. Government subsidies are
classified into government subsidies related to assets and government subsidies
related to income.
3.21.2 Accounting treatment
Government subsidies related to acquisition and construction of fixed assets,
intangible assets and other long-term assets are recognized as deferred income, and
included in non-operating income by stages within the useful life of the assets
acquired and constructed;
If government subsidies related to income are used to compensate the enterprise’s
relevant expenses or losses in future periods, such government subsidies should be
recognized as deferred income on acquisition and be included into the current
non-operating income in the period of recognizing relevant expenses; if
government subsidies related to income are used to compensate the enterprise’s
relevant expenses or losses incurred, such government subsidies are directly
included into the current non-operating income on acquisition.
3.22 Deferred income tax assets and deferred income tax liabilities
Deductible temporary differences are recognized as deferred income tax assets to
the extent that it shall not exceed future taxable income possibly available to be
against the deductible temporary difference.
Deductible temporary differences are recognized as deferred income tax liabilities
except in special circumstances.
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Special circumstances in which deferred income tax assets or deferred income tax
liabilities shall not be recognized include: the initial recognition of goodwill; other
transactions or matters excluding business combinations, which affect neither
accounting profits nor the taxable income (or deductible losses) when occurred.
If the Company has the legal right of netting and intends to settle in net amount or
to obtain assets and discharge liabilities simultaneously, the income tax assets and
income tax liabilities of the Company for the current period shall be presented
based on the net amount after offset.
When the Company has the legal rights to balance income tax assets and income
tax liabilities in current period with net settlement, and deferred income tax assets
and deferred income tax liabilities are related to the income tax which imposed on
the same taxpaying subject by the same tax collection authority or to different
taxpaying subjects, but, in each important future period in connection with the
reverse of deferred income tax assets and liabilities, the involved taxpaying subject
intends to balance income tax assets and liabilities in current period with net
settlement at the time of obtaining assets and discharging liabilities, deferred
income tax assets and deferred income tax liabilities of the Company shall be
presented based on the net amount after offset.
3.23 Operating lease
3.22.1 Accounting of leased assets
Lease fees paid by the Company for leased asset shall be amortized at straight-line
method over the whole lease period (including rent-free period) and shall be
included in the current expenses. Initial direct costs related to lease transactions
paid by the Company shall be included in the current expenses.
If the expense related to the lease which shall be paid by the Company is assumed
by the lessor of the asset, such expenses shall be deducted from total lease fees, and
residual lease fees shall be amortized over the lease period and included in the
current expenses.
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3.23.2 Accounting of leasing assets
Lease fees received by the Company from leasing assets shall be amortized at
straight-line method over the whole lease period (including rent-free period), and
shall be recognized as lease income. Initial direct costs related to lease transactions
paid by the Company shall be included in the current expenses; if the amount is
large, it shall be capitalized, and shall be included in the current income by stages
within the whole lease period on same basis for recognition of lease income.
If the expenses related to the lease which shall be paid by the lessee are borne by
the Company, such expenses shall be deducted from total lease income by the
Company, and residual lease fees shall be amortized over the lease period.
3.24 Adjustments for changes in principal accounting policies and
estimates
3.24.1 Adjustments for changes in accounting policies
There are no changes in principal accounting policies for the Company during the
reporting period.
3.24.2 Adjustments for changes in accounting estimates
There are no changes in principal accounting estimates for the Company during the
reporting period.
4 Taxation
Major tax types and tax rates applicable to the Company
Taxation type Basis of tax assessment Tax rate
Differential section of VAT calculated on
revenue from sale of goods and service
5%, 6%, 11%, 17%
Value added tax (VAT) deduct VAT paid in current period in
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accordance with tax law
Levy by taxable business revenue
Business tax 5%
Urban maintenance and Levy by the taxable business tax and VAT
7%
construction tax
Levy by the taxable business tax and VAT
Education surcharge 3%
Levy by the taxable business tax and VAT
Local education surcharge 2%
Remaining value after deducting 30% of
the original value of houses (including
Property tax 1.2%, 12%
land price), Rental income
Land use tax Land area 18 yuan/㎡
Levy by taxable income
Enterprise income tax 25%
Other explanation: In accordance with the “Fully Implementation of the Pilot Proposals for
the Change from Business Tax to Value-Added Tax” (Cai Shui [2016] No.36) issued by
Ministry of Finance and SAT, the proposals for the change from business tax to VAT will
carry out since 1 May 2016, the Company pay the VAT with rate of 5%, 6%, 11% and 17%
respectively for different business revenue.
5 Notes to the main items of financial statements
5.1 Monetary funds
Item Ending balance Beginning balance
Cash 329,071.51 273,523.86
Bank Deposit 9,779,104.40 26,936,724.15
Total 10,108,175.91 27,210,248.01
The main reason for the decrease in bank deposits is to pay RMB 10 million to
Luoniushan Group Co., Ltd. and pay RMB 9 million to Wuhan Aierjia Technology
Development Co., Ltd. for the creditors’ investment.
Other notes: The closing balance is unsecured, unfrozen or doesn’t have other restrictions
on realization or the funds deposit in the overseas, or have potential recovery risks.
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5.2 Accounts receivable
5.2.1 Accounts receivable by type
Ending balance Beginning balance
Book balance Provision for bad debts Book balance Provision for bad debts
Type Book Book
Proporti Proporti Proporti Proporti
Amount Amount Value Amount Amount Value
on on on on
Accounts receivable
with large single
amount and accrued 1,466,400.49 57.13% 1,466,400.49 100.00% 1,466,400.49 50.22% 1,466,400.49 100.00%
for provision of bad
debt on a single basis
Accounts receivable
accrued for provision
1,100,308.71 42.87% 763,121.66 69.36% 337,187.05 1,453,566.38 49.78% 763,121.66 52.50% 690,444.72
of bad debt by
portfolio
Accounts receivable
with insignificant single
amount but accrued for
provision of bad debt
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Ending balance Beginning balance
Book balance Provision for bad debts Book balance Provision for bad debts
Type Book Book
Proporti Proporti Proporti Proporti
Amount Amount Value Amount Amount Value
on on on on
on a single basis
Total 2,566,709.20 100.00% 2,229,522.15 86.86% 337,187.05 2,919,966.87 100.00% 2,229,522.15 76.35% 690,444.72
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(1) Accounts receivable with large single amount and accrued for provision of bad debt
on a single basis as at June 30, 2017
Ending balance
Content of accounts
Provision for Proportion of
receivable (By Company) Book balance Reason for provision
bad debts provision (%)
Over five years, the bill
Sanya Power Supply signing expenses was
775,304.98 775,304.98 100.00%
Company un-collectable for
personnel changes
Over five years, the bill
Hainan Hong Kong & Macao signing expenses was
464,563.21 464,563.21 100.00%
International Tourism Ltd. un-collectable for bills
un-recognized
Over five years, the bill
signing expenses was
Sanya City Council reception 101,652.32 101,652.32 100.00%
un-collectable for
personnel changes
LLC SOUTH CROSS
124,879.98 124,879.98 100.00%
TRAVELINN Had declared bankruptcy
Total 1,466,400.49 1,466,400.49
(2) Accounts receivable accrued for provision of bad debt by aging analysis method in
portfolio:
Ending balance
Aging
Accounts receivable Provision for bad debts Proportion of provision
Within 1 year 298,461.50
1-2 years 18,633.00 931.65 5.00%
2-3 years 5,262.00 789.30 15.00%
3-4 years 6,942.00 1,735.50 25.00%
4-5 years 22,690.00 11,345.00 50.00%
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More than five
748,320.21 748,320.21 100.00%
years
Total 1,100,308.71 763,121.66 69.36%
5.2.2 Situation of withdrawing or write-off for bad debts provision of accounts
receivable in current period
No situation of withdrawing or write-off for bad debts provision of accounts
receivable in current period.
5.2.3 Top five accounts receivable
Relationship Proportion in total
Name with the Book balance Aging accounts receivable
(%)
Company
Sanya Power Supply Non related More than five
775,304.98 30.21%
Company years
party
Hainan Hong Kong &
Non related
Macao International 464,563.21 More than five 18.10%
Tourism Ltd. party years
LLC SOUTH CROSS Non related
124,879.98 2-3 years 4.87%
TRAVELINN
party
Reception centre of
Non related
Sanya Municipal 101,652.32 More than five 3.96%
Committee party years
Hainan Baoping Travel Non related More than five
46,798.32 1.82%
Agency years
party
Total 1,513,198.81 58.95%
5. 3 Prepayments
5.3.1 Aging analysis of repayment
Ending balance Beginning balance
Aging
Book balance Proportion Book balance Proportion
Within 1 year
38,660.36 100.00% 58,783.23 100.00%
Total 38,660.36 100.00% 58,783.23 100.00%
Other explanation: prepayment including the insurance expenses, fuel costs and
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book allowance etc.
5.3.2 Top five prepayment collected by objects at ending balance
Proportion in total
Name Book balance
prepayment (%)
Sunshine Property Insurance Co., LTD Hainan
19,445.29 50.30%
Branch
China Petrochemical Marketing Co. Ltd Sanya
9,036.31 23.37%
Branch
China Post Group Corporation Sanya Branch 5,400.00 13.97%
Sanya Daily Office 4,778.76 12.36%
Total 38,660.36 100.00%
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5.4 Other receivables
5.4.1 Other receivables by type:
Ending balance Beginning balance
Book balance Provision for bad debts Book balance Provision for bad debts
Type Book Book
Proportio Proporti Proportio
Amount Proportion Amount Value Amount Amount Value
n on n
Other receivables with large
single amount and accrued 77,363,143.3
77,363,143.31 98.67% 77,363,143.31 100.00% 98.85% 77,363,143.31 100.00%
1
for provision of bad debt on a
single basis
Other receivables accrued for
174,103.5
provision of bad debt by 1,045,483.05 1.33% 729,098.81 69.74% 316,384.24 903,202.33 1.15% 729,098.81 80.72%
2
portfolio
Other receivables with
insignificant single amount
but accrued for provision of
bad debt on a single basis
78,266,345.6 100.00 174,103.5
Total 78,408,626.36 100.00% 78,092,242.12 99.60% 316,384.24 78,092,242.12 99.78%
4 % 2
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(1) Other receivables with large single amount and accrued for provision of bad debt on a
single basis as at period-end
Other Ending balance
receivables (By Provision for Proportion of
Book balance Reason for provision
Company) bad debts provision
Hainan Over five years account age,
Dadonghai 54,767,945.15 54,767,945.15 100.00% un-collectable for debtor has
Hotel Co., Ltd. abnormal operation
Cash dividends
distributed in 16,899,000.00 16,899,000.00 100.00% un-collectable
1994-1996
Hainan Hong
Over five years account age,
Kong & Macao
4,145,704.16 4,145,704.16 100.00% un-collectable for mis-listing the
International
Tourism Ltd. contract income on account
Guangdong The bonus money before 1996,
Jinma Tourism 1,200,494.00 1,200,494.00 100.00% un-collectable for equity change with
Ltd. Shenzhen Difu
un-collectable for the trustee fee paid
Shareholder 350,000.00 350,000.00 100.00% on behalf of other shareholders while
custody fee listing
Total 77,363,143.31 77,363,143.31
(2) Other receivables accrued for provision of bad debt by aging analysis method in
portfolio:
Beginning balance
Aging Proportion of provision
Accounts receivable Provision for bad debts
(%)
Within 1 year 298,329.64
1-2 years 18,468.00 923.40 5.00
2-3 years 600.00 90.00 15.00
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Beginning balance
Aging Proportion of provision
Accounts receivable Provision for bad debts
(%)
More than five years 728,085.41 728,085.41 100.00
Total 1,045,483.05 729,098.81
5.4.2 Provision for bad debts accrued, regain or switch back in the Period
No provision for bad debts accrued, regain or switch back in the Period.
5.4.3 Other receivables by fund quality
Fund quality Ending book balance Beginning book balance
Original relevant companies fund
54,767,945.15 54,767,945.15
accounts
Contracting profit receivable 4,145,704.16 4,145,704.16
Distributing dividends receivable 18,099,494.00 18,099,494.00
Guarantee deposit 563,818.99 563,818.99
Advance money for custody fee 350,000.00 350,000.00
Other fund accounts 245,477.64 23,114.20
Petty money 78,772.22 78,772.22
Utilities 92,411.70 164,165.49
Money from invested items 30,500.00 30,500.00
Personal social security 、
29,502.50 37,831.43
Accumulation fund
Project funds 3,700.00 3,700.00
Cash deposit for invoices 1,300.00 1,300.00
Total 78,408,626.36 78,266,345.64
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5.4.4 Top five other account receivables collected by arrears party at ending balance
Proportion in Ending
Nature of Ending
Company name Aging total other balance of bad
money balance
receivables debt provision
Hainan Dadonghai Hotel Current More than
54,767,945.15 69.85% 54,767,945.15
Co., Ltd. accounts five years
Dividends
distributed
Cash dividends More than
and ought to 16,899,000.00 21.55% 16,899,000.00
distributed in 1994-1996 five years
be
recovered
Hainan Hong Kong &
Current More than
Macao International 4,145,704.16 5.29% 4,145,704.16
accounts five years
Tourism Ltd.
Guangdong Jinma More than
Dividends 1,200,494.00 1.53% 1,200,494.00
Tourism Ltd. five years
More than
Shareholder custody fee Custody fee 350,000.00 0.45% 350,000.00
five years
Total -- 77,363,143.31 -- 98.67% 77,363,143.31
5.5 Inventories
5.5.1 Classification of inventories
Ending balance Beginning balance
Item Book Depreciatio Depreciatio
Book value Book balance Book value
balance n reserve n reserve
Stock materials 923,401.41 742,966.17 180,435.24 876,822.10 742,966.17 133,855.93
Stock
22,771.38 11,102.41 11,668.97 22,771.38 11,102.41 11,668.97
commodities
Food and
39,315.16 39,315.16 52,660.42 52,660.42
beverages
Fuels 21,795.68 21,795.68 20,994.40 20,994.40
Total 1,007,283.63 754,068.58 253,215.05 973,248.30 754,068.58 219,179.72
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5.5.2 Inventory depreciation reserve
Provision in Period Decrease in Period
Category of Beginning
Withdrawi Reversal or Ending balance
inventories balance Other Other
ng Write-off
Stock
742,966.17 742,966.17
materials
Stock
11,102.41 11,102.41
commodities
Total 754,068.58 754,068.58
5.6 Non-current liabilities maturing within one year
Item Ending balance Beginning balance Remarks
Long-term deferred expenses Hotel exterior
needed to be amortised within one 292,184.72 584,369.42 wall
year decoration
Total 292,184.72 584,369.42
5.7 Other current assets
Beginning Remarks
Item Ending balance
balance
Prepay corporate income tax 1,702,702.80 1,702,702.80
Prepay VAT 318,164.96 173,746.42
Debt investment Wuhan Aierjia
Technology
9,000,000.00
Development Co.,
Ltd.
Total 11,020,867.76 1,876,449.22
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5.8 Available-for-sale financial assets
5.8.1 Available-for-sale financial assets
Ending balance Beginning balance
Item Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
Available-for-sale debts
Available-for-sale equity
5,000,000.00 5,000,000.00 5,000,000.00 5,000,000.00
instruments.
Of which:
Measured at fair value
Measured at cost 5,000,000.00 5,000,000.00 5,000,000.00 5,000,000.00
Total 5,000,000.00 5,000,000.00 5,000,000.00 5,000,000.00
5.8.2 Available-for-sale financial assets measured at cost at the end of the period
Book balance Provision for impairment Shareho Cash
lding divid
Decr
Incre
ratio in ends
Increa Decrea ease
Item Beginning Ending Beginning ase in Ending
investee in
se in se in in
balance balance balance Perio balance
(%) Peri
Period Period Perio
d
od
d
Shenzhen
Difu
Investment &
5,000,000.00 5,000,000.00 5,000,000.00 5,000,000.00 14.28
Development
Ltd
Total
5,000,000.00 5,000,000.00 5,000,000.00 5,000,000.00
5.9 Long-term equity investments
5.9.1 The classification of long-term equity investment is as follows:
Ending balance Beginning balance
Investee Provision for Book Provision for Book
Book balance Book balance
impairment Value impairment Value
财务报表附注第 45 页
海南大东海旅游中心股份有限公司
2017 年半年度财务报告
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Ending balance Beginning balance
Investee Provision for Book Provision for Book
Book balance Book balance
impairment Value impairment Value
Hubei Jingsha Dadonghai Club Ltd. 4,566,207.42 4,566,207.42 4,566,207.42 4,566,207.42
Sanya Shun’an Casino 5,150,166.84 5,150,166.84 5,150,166.84 5,150,166.84
Total 9,716,374.26 9,716,374.26 9,716,374.26 9,716,374.26
财务报表附注第 46 页
海南大东海旅游中心股份有限公司
2017 年半年度财务报告
财务报表附注
5.9.2 Details of long-term equity investment
Remark on Provisi
Shareholdi Cash
Accoun Voting ratio different ratios on for
Investment Beginning Increase in Decrease Ending ng ratio in Provision for dividen
Investee ting in investee of shareholding impair
costs balance Period in Period balance investee impairment ds in
Method (%) and voting in ment in
(%) Period
investee Period
Hubei
Jingsha
4,566,207.42 4,566,207.42 4,566,207.42 91.00 91.00 4,566,207.42
Dadonghai Cost
Club Ltd. method
Sanya
Shun’an Cost 5,150,166.84 5,150,166.84 5,150,166.84 70.00 70.00 5,150,166.84
Casino method
Subtotal of
9,716,374.26 9,716,374.26 9,716,374.26 9,716,374.26
cost method
财务报表附注第 47 页
海南大东海旅游中心股份有限公司
2017 年半年度财务报告
财务报表附注
5.10 Investment real estate
Investment real estate by cost measurement
Houses and
Item Land use right Total
buildings
I. Original book value:
1. Beginning balance 18,856,504.44 5,662,740.59 24,519,245.03
2. Increase in Period
(1) Purchase
(2) Transfer from fixed assets\intangible
assets
(3) Increase in business merger
3. Decrease in Period
(1) Disposal
(2) Other transfer
4. Ending balance 18,856,504.44 5,662,740.59 24,519,245.03
II. Accumulated depreciation and
accumulated amortization
1. Beginning balance 9,771,216.42 2,107,046.45 11,878,262.87
2. Increase in Period 209,091.78 28,170.00 237,261.78
(1) Withdraw or amortize
3. Decrease in Period
(1) Disposal
(2) Other transfer
4. Ending balance 9,980,308.20 2,135,216.45 12,115,524.65
III. Depreciation reserve
1. Beginning balance 1,404,400.47 1,903,054.14 3,307,454.61
2. Increase in Period
(1) Withdraw
3. Decrease in Period
(1) Disposal
(2) Other transfer
4. Ending balance 1,404,400.47 1,903,054.14 3,307,454.61
IV．Book value
财务报表附注第 48 页
海南大东海旅游中心股份有限公司
2017 年半年度财务报告
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Houses and
Item Land use right Total
buildings
1. Book value at the end of the period 7,471,795.77 1,624,470.00 9,096,265.77
2. Book value at the beginning of the period 7,680,887.55 1,652,640.00 9,333,527.55
5.11 Fixed assets
5.11.1 Fixed assets
Buildings and Electronic
Item Machines Vehicles Others Total
Constructions Equipments
I. Original book value:
136,564,783.1 2,091,322.7 2,585,268.9 1,703,389.4 156,086,235.2
1.Beginning balance 13,141,471.00
5 7 2 5 9
2. Increase in
253,752.14 -16,489.74 14,423.30 251,685.70
Period
(1) Purchase 253,752.14 6,758.12 14,423.30 274,933.56
(2) transfer in of
-23,247.86 -23,247.86
the construction project
(3) the increase in
business combination
3. Decrease in Period
(1) Disposal or
scrap
136,564,783.1 2,345,074.9 2,568,779.1 1,717,812.7 156,337,920.9
4.Ending balance 13,141,471.00
5 1 8 5 9
II. Accumulated
depreciation
1,252,935.7 1,447,909.8
1.Beginning balance 68,185,246.92 9,092,676.08 2,111,146.45 82,089,914.95
0 0
2. Increase in Period 1,066,956.49 138,639.24 87,765.30 51,597.85 37,937.12 1,382,896.00
(1) Withdraw 1,066,956.49 138,639.24 87,765.30 51,597.85 37,937.12 1,382,896.00
3. Decrease in Period
(1) Disposal or
scrap
1,340,701.0 2,162,744.3 1,485,846.9
4.Ending balance 69,252,203.41 9,231,315.32 83,472,810.95
0 0 2
财务报表附注第 49 页
海南大东海旅游中心股份有限公司
2017 年半年度财务报告
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Buildings and Electronic
Item Machines Vehicles Others Total
Constructions Equipments
III．Depreciation reserve
1.Beginning balance 31,072,788.17 2,527,851.26 33,600,639.43
2. Increase in Period
(1) Withdraw
3. Decrease in Period
(1) Disposal or
scrap
4.Ending balance 31,072,788.17 2,527,851.26 33,600,639.43
IV．Book value of fixed
assets
(1) Book value at the end 1,004,373.9
36,239,791.57 1,382,304.42 406,034.88 231,965.83 39,264,470.61
of the period 1
(2) Book value at the
37,306,748.06 1,520,943.66 838,387.07 474,122.47 255,479.65 40,395,680.91
beginning of the period
Other explanation: no temporary idle fixed assets at end of the period, and no fixed
assets mortgage or guarantee
5.12 Construction in process
Ending balance Beginning balance
Provisio Provision
Item
n for Book for Book
Book balance Book Value
impairm balance impairme Value
ent nt
Reconstruction of
805,644.64 805,644.64
swinging pool
Hatchway of the
100,000.00 100,000.00
sightseeing elevator
Reconstruction of
46,800.00 46,800.00
high-voltage metering
cubicle
25,767.00 25,767.00
Reconstruction of fire
财务报表附注第 50 页
海南大东海旅游中心股份有限公司
2017 年半年度财务报告
财务报表附注
Ending balance Beginning balance
Provisio Provision
Item
n for Book for Book
Book balance Book Value
impairm balance impairme Value
ent nt
stair in Building A
Total 978,211.64 978,211.64
5.13 Intangible assets
Item Land use right Total
I. Original book value
81,653,137.15 81,653,137.15
1. Beginning balance
2. Increase in the period
3. Decrease in the period
81,653,137.15 81,653,137.15
4. Ending balance
II. Accumulated amortization
30,382,276.95 30,382,276.95
1. Beginning balance
406,193.58 406,193.58
2. Increase in the period
3. Decrease in the period
30,788,470.53 30,788,470.53
4. Ending balance
III. Depreciation reserve
27,440,836.84 27,440,836.84
1. Beginning balance
2. Increase in the period
3. Decrease in the period
27,440,836.84 27,440,836.84
4. Ending balance
IV. Booking value
23,423,829.78 23,423,829.78
1. Ending book value
23,830,023.36 23,830,023.36
2. Beginning book value
财务报表附注第 51 页
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2017 年半年度财务报告
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Note: The provision for impairment of intangible assets was the excess of the book value
over the marker price of the lands at Oceanside which was restricted for use under the
plan of Sanya Municipal Government.
5.14 Long-term deferred expenses
Beginning balance Ending balance
Long-term
Long-term Long-term Increase in Amortization Long-term
Item prepaid
deferred prepaid expenses Period in Period deferred
expenses due
expenses due within a year expenses
within a year
Hotel exterior
wall coating 1,071,343.97 584,369.42 292,184.70 1,071,343.97 292,184.72
project
Total 1,071,343.97 584,369.42 292,184.70 1,071,343.97 292,184.72
5.15 Provision for assets impairment
Decrease in Period
Beginning Increase in
Item Revers Ending balance
balance Period Write-off
al
Provision for bad debts 80,321,764.27 80,321,764.27
Inventory depreciation reserve 754,068.58 754,068.58
Provision for impairment of
available-for-sale financial 5,000,000.00 5,000,000.00
assets
Provision for impairment of
9,716,374.26 9,716,374.26
long-term equity investments
Provision for impairment of
33,600,639.43 33,600,639.43
fixed assets
Provision for impairment of
27,440,836.84 27,440,836.84
intangible assets
Impairment provision of
3,307,454.61 3,307,454.61
investment real estate
财务报表附注第 52 页
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Decrease in Period
Beginning Increase in
Item Revers Ending balance
balance Period Write-off
al
Total 160,141,137.99 160,141,137.99
5.16 Accounts payable
5.16.1 Details of accounts payable are as follows:
Item Ending balance Beginning balance
Within 1 year (including 1 year) 801,070.51 856,048.21
1-2 years (including 2 years) 329,718.70 199,317.78
2-3 years (including 3 years) 334,316.59 334,316.59
Over 3 years 577,882.93 577,882.93
Total 2,042,988.73 1,967,565.51
5.16.2 Accounts payable with major amount and aging of over one year
Item Ending balance Reason
Purchase amount recorded
Provisional estimation 719,013.26
without invoice issued
Total
719,013.26 /
5.17 Accounts received in advance
5.17.1 Accounts received in advance
Item Ending balance Beginning balance
Within 1 year (including 1 year) 625,072.93 1,272,672.89
1-2 years (including 2 years) 141,408.02 141,408.02
2-3 years (including 3 years) 65,874.80 65,874.80
Over 3 years 414,568.57 414,568.57
Total 1,246,924.32 1,894,524.28
财务报表附注第 53 页
海南大东海旅游中心股份有限公司
2017 年半年度财务报告
财务报表附注
5.17.2 Accounts received in advance with major amount and aging of over one year
Outstanding or carry-over
Item Ending balance
reasons
Guangzhou South Holiday International Travel
101,244.00 No settlement
Service Co., Ltd. Sanya Branch
Hainan QiongZhong Ecological Investment
31,314.00 No settlement
Guarantee Co., Ltd.
Beijing Yualuxincheng Management Consulting
30,540.00 No settlement
Co., Ltd.
PEGAS Zheng Qingbo 32,243.02 No settlement
Sanya Public Security Fire Control Team 19,420.88 No settlement
Total 214,761.90
5.18 Employee compensation payable
5.18.1 Classification of employee compensation payable
Increase in Decrease in Beginning
Item Ending balance
Period Period balance
Short-term employee benefits 2,148,514.36 5,388,428.75 5,737,180.73 1,799,762.38
Post-employment benefits -
470,188.05 470,188.05
defined contribution plans
Termination benefits
Other benefits due within one
year
Total 2,148,514.36 5,858,616.80 6,207,368.78 1,799,762.38
5.18.2 Short-term employee benefits
Item Beginning Increase in Decrease in Ending balance
财务报表附注第 54 页
海南大东海旅游中心股份有限公司
2017 年半年度财务报告
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balance Period Period
(1) Salary, bonus, allowance and
1,299,545.99 4,273,089.74 4,695,482.96 877,152.77
subsidy
(2) Employee welfare 674,073.97 674,073.97
(3) Social insurance premium 222,048.79 222,048.79
Of which: including: medical
198,783.08 198,783.08
insurance expenses
Work injury insurance expenses 10,135.79 10,135.79
Maternity insurance 13,129.92 13,129.92
(4) Housing provident funds 69,293.32 59,593.32 9,700.00
(5) Labor union expenditures and
848,968.37 149,922.93 85,981.69 912,909.61
employee education expenses
(6) Short-term paid absences
Total 2,148,514.36 5,388,428.75 5,737,180.73 1,799,762.38
5.18.3 Details of defined contribution plans
Beginning Increase in Decrease in
Item Ending balance
balance Period Period
Basic endowment insurance
455,465.02 455,465.02
expenses
Unemployment insurance expenses 14,723.03 14,723.03
Total 470,188.05 470,188.05
5.19 Taxes and surcharges payable
Item Ending balance Beginning balance
VAT 205,157.45 228,923.41
Individual income tax 1.14
Urban maintenance and
4,842.25 6,505.86
construction tax
Educational surtax 2,075.24 2,788.22
财务报表附注第 55 页
海南大东海旅游中心股份有限公司
2017 年半年度财务报告
财务报表附注
Item Ending balance Beginning balance
Local educational surtax 1,383.50 1,858.82
Property tax 199,326.91 234,032.26
Land use tax 108,590.91 108,588.06
Stamp tax 246.50
18,147.74
Security for disabled person
539,524.00 582,944.27
Total
Other explanation: in line with relevant regulation of accounting rules of business
enterprise, the business income tax prepaid in previous at period-end will re-classified to
other current assets for calculation
5.20 Other payables
5.20.1 Other payables by fund quality
Fund quality Ending balance Beginning balance
Fine for rule-breaking operation
19,810,000.00
on the stock of the Company
Audit fee 285,003.21 285,003.21
Project funds 327,589.46 317,277.05
Agency fund 30,884.66 139,319.74
Quality retention money 35,731.15 230,096.75
Guarantee deposit 333,000.00 350,600.90
membership of Board director,
40,506.98 214,506.98
the board of supervisors
Personal fund accounts 67,918.27 73,752.85
Other fund accounts 11,144,451.10 1,001,405.96
Deposit and rental 821,158.32 662,541.29
Total 13,086,243.15 23,084,504.73
Other explanation: the fine 19,810,000.00 Yuan for illegal stock operation of the Company
are paid to CSRC on 20 February 2017
财务报表附注第 56 页
海南大东海旅游中心股份有限公司
2017 年半年度财务报告
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5.20.2 Other payables with large amount and aging of over one year
Reason for
Company name Ending balance Remark
non-repayment
Hong Kong Deloitte & Touche
285,003.21 No settlement
LLP
Sanya Shuxin Building
170,000.00 No settlement
Waterproofing Co. Ltd
China Building Decoration
161,111.03 No settlement
Company Hannan Branch
Total 616,114.24
5.21 Estimates liabilities
Item Ending balance Beginning balance
Accrual the un-payment electricity
1,489,685.04 1,489,685.04
account
Total 1,489,685.04 1,489,685.04
Other explanation: See Note IX
5.22 Share capital
Unit: share
Before this change Increase or decrease (＋, －) After this change
Share
capital
Item Proporti Shares converte Proportio
Amount New issue Others Sub-total Amount
on (%) granted d from n (%)
reserve
fund
1. Restricted shares 10,455,687 2.87 10,455,687 2.87
(1) State shareholding
财务报表附注第 57 页
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2017 年半年度财务报告
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Before this change Increase or decrease (＋, －) After this change
Share
capital
Item Proporti Shares converte Proportio
Amount New issue Others Sub-total Amount
on (%) granted d from n (%)
reserve
fund
(2) State-owned legal
2,369,400 0.65 2,369,400 0.65
person shareholding
(3) Other domestic capital
8,085,000 2.22 8,085,000 2.22
shareholding
Including: domestic legal
7,953,000 2.18 7,953,000 2.18
person shareholding
Domestic natural person
132,000 0.04 132,000 0.04
shareholding
(4) Foreign capital
shareholding
Including: overseas legal
person shareholding
Overseas natural person
shareholding
(5) Senior officers shares 1,287 1,287
2. Unrestricted shares 353,644,313 97.13 353,644,313 97.13
(1) RMB ordinary shares 265,644,313 72.96 265,644,313 72.96
(2) Foreign shares listed in
88,000,000 24.17 88,000,000 24.17
China
(3) Foreign shares listed
overseas
(4). Others
3. Total shares 364,100,000 100.00 364,100,000 100.00
财务报表附注第 58 页
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2017 年半年度财务报告
财务报表附注
5.23 Capital reserves
Item Beginning balance Increase in Period Decrease in Period Ending balance
Capital (share capital)
33,336,215.58 33,336,215.58
premium
Other capital reserves 20,806,634.43 20,806,634.43
Total 54,142,850.01 54,142,850.01
5.24 Undistributed profits
Item The Period Last period
Undistributed profits as at June 30, 2016 -343,966,434.57 -341,305,382.08
Plus: net profit attributable to owner of
1,719,253.80 172,122.52
parent company in Period
Less: appropriation of statutory surplus
reserves
Appropriation of discretionary surplus
reserve
Appropriation of reserve funds
Appropriation of enterprise expansion funds
Appropriation of bonus and welfare funds
Appropriation of general risk reserve
Ordinary share dividends payable
Ordinary share dividends transferred to
share capital
Undistributed profits as at June 30, 2016 -342,247,180.77 -341,133,259.56
5.25 Operating income and operating cost
5.25.1 Operating income and operating cost
The Period Last period
Item
Income Cost Income Cost
财务报表附注第 59 页
海南大东海旅游中心股份有限公司
2017 年半年度财务报告
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The Period Last period
Item
Income Cost Income Cost
Operating income 13,518,444.89 5,018,862.48 10,836,467.50 4,222,761.53
Operating cost 1,577,828.53 237,250.03 1,226,330.10 237,261.78
15,096,273.42 5,256,112.51 12,062,797.60 4,460,023.31
Total
Other explanation: The current operating income increased by 25.15% compared with the previous
year, of which the main operating income increased by 20.34% compared with the previous year,
mainly due to the increase of Russian tourists in the current period. The main operating costs
increased by 17.85% compared with the previous year, mainly due to the increase in food and
beverage consumption brought by the increase of passenger traffic in the report period.
5.25.2 Primary business (by industry)
The Period Last period
Name of industry
Operating income Operating cost Operating income Operating cost
Tourism, catering and
15,096,273.42 5,256,112.51 12,062,797.60 4,460,023.31
service industry
Total 15,096,273.42 5,256,112.51 12,062,797.60 4,460,023.31
5.25.3 Primary business (by products)
The Period Last period
Name of products
Operating income Operating cost Operating income Operating cost
Guest room income 11,676,662.38 4,079,275.81 9,811,796.58 3,668,041.91
Catering and entertainment
1,841,782.51 939,586.67 1,024,670.92 554,719.62
income
Rental income 1,577,828.53 237,250.03 1,226,330.10 237,261.78
Total 15,096,273.42 5,256,112.51 12,062,797.60 4,460,023.31
财务报表附注第 60 页
海南大东海旅游中心股份有限公司
2017 年半年度财务报告
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5.25.4 Primary business (by region)
The Period Last period
Name of region
Operating income Operating cost Operating income Operating cost
Hainan region 15,096,273.42 5,256,112.51 12,062,797.60 4,460,023.31
Total 15,096,273.42 5,256,112.51 12,062,797.60 4,460,023.31
5.26 Business tax and surcharges
Item The Period Last period
Urban maintenance and
52,296.64 40,719.96
construction tax
Educational surtax 37,289.14 29,085.71
Property tax 441,630.64
Land use tax 217,184.65
4,980.00
Vehicle and vessel use tax
Stamp tax 863.20
Business tax 497,150.96
Total 754,244.27 566,956.63
Other explanation:
1. Due to the increase of property tax, land use tax, travel tax, stamp tax and others, the Ministry
of Finance issued Accounting Regulations for Value-added Tax (CS No. [2016] 22) on
December 3, 2016, which reclassifies the property tax, land use tax, travel tax, and stamp tax
generated from the business operation since May 1, 2016 to the “taxes and additional” project,
and the taxes and dues occurred before May 1, 2016 shall not be adjusted. The comparative
data shall not be adjusted.
2. According to the Notice on Comprehensively Launching the Pilot of Business Tax to
Value-added Tax (CS No.[ 2016] 36) of the Ministry of Finance and the State Administration
of Taxation, because the business tax to value-added tax policy has been comprehensively
launched since May 1, 2016.
财务报表附注第 61 页
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财务报表附注
5.27 Selling expenses
Item The Period Last period
1,532,804.73 1,257,447.17
Staff wages and benefits
224,176.69 217,223.10
Social workers insurance expenses
Depreciation 245,942.02 272,774.51
Water and electricity fees 83,061.58 95,815.71
Repair charges 65,649.32 57,227.50
Other expenses 306,510.59 198,547.75
Total 2,458,144.93 2,099,035.74
5.28 Administrative expenses
Item The Period Last period
Staff wages and benefits 2,450,309.99 2,069,711.09
325,482.11 250,843.95
Social workers insurance expenses
Taxes 646,738.02
Business entertainment 402,028.00 295,348.47
Travel expenses 97,189.95 87,737.20
Social labor insurance premium 406,193.58 406,193.58
Other expenses 1,408,246.94 1,232,871.46
Total 5,089,450.57 4,989,443.77
5.29 Financial expenses
Type The Period Last period
Interest expenses
Less: interest income -204,780.17 -258,930.94
Gains or losses on exchange
Handling charges 24,107.51 54,178.40
财务报表附注第 62 页
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Total -180,672.66 -204,752.54
5.30 Losses on assets impairment
Item The Period Last period
Losses on bad debt
Losses on inventory depreciation
Losses on impairment of other
current assets
Losses on impairment of
long-term equity investments
Loss on fixed asset impairment
Loss on intangible asset
impairment
Total
Other explanation: there no loss of impairment of fix assets occurred in the period and last
period
5.30 Non-operating income
Non-operating income by items
Amount included in current
Item The Period Last period
non-recurring profits or losses
Total gains on disposal of
non-current assets
Including: gain on disposal
of fixed assets
Gain on disposal of
intangible assets
Income from compensation 64,926.00
Others 260.00 12,480.00
Total 260.00 77,406.00
财务报表附注第 63 页
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5.32 Notes to statement of cash flow
5.32.1 Other cash receipts related to operating activities
Item The Period Last period
Compensation for articles in the guest
77,406.00
rooms
204,780.17 258,930.94
Interest income
472,635.21 209,424.79
Other income
677,415.38 545,761.73
Total
5.32.2 Cash paid for other operating activities
Item The Period Last period
Business entertainment expenses 402,028.00 295,848.47
Audit fee 400,000.00 390,000.00
Announcement fee 60,000.00 60,000.00
Traveling expenses 109,715.87 95,971.20
Promotion expenses 21,162.60 5,312.00
Repair charge 100,191.70 71,380.30
Directors and supervisors membership dues 354,000.00 234,000.00
Others 690,202.00 394,368.26
Total 2,137,300.17 1,546,880.23
5.32.3 Cash received with other financing activities concerned
Item The Period Last period
19,810,000.00
LUONIUSHAN Group Co. Ltd.
Total 19,810,000.00
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5.32.4 Cash paid for other financing activities
Item The Period Last period
LUONIUSHAN Group Co. Ltd. 10,000,000.00
CSRC 19,810,000.00
Total 29,810,000.00
5.33 Supplementary information to statement of cash flows
5.33.1 Supplementary information to statement of cash flows
Item The Period Last period
(1) Net profit adjusted to cash flows from operating activities
Net profit 1,719,253.80 172,122.52
Plus: provision for asset impairment
Depreciation of fixed assets, gas and oil assets and productive
1,591,987.78 1,764,713.08
biological assets
Amortization of intangible assets 434,363.58 434,363.58
Amortization of long-term deferred expenses 292,184.70 266,250.00
Loss on disposals of fixed assets, intangible assets and other
long-term assets ("-" for gains)
Loss on write-off of fixed assets ("-" for gains)
Losses from the changes in fair value ("-" for gains)
Financial expenses ("-" for gains)
Investments loss ("-" for gains)
Loss from debts restructuring ("-" for gains)
Decrease in deferred income tax assets ("-" for increases)
Increase in deferred income tax liabilities ("-" for decreases)
Decrease in inventories ("-" for increases) -34,035.33 -17,511.97
Decrease in operating receivables ("-" for increases) 159,732.97 -290,307.05
Increase in operating payables ("-" for decreases) -932,414.40 -875,932.72
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Item The Period Last period
Others (Projected liabilities)
Net cash flows from operating activities 3,231,073.10 1,453,697.44
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 10,108,175.91 11,825,290.70
Less: Beginning balance of cash 27,210,248.01 19,782,392.26
Plus: Ending balance of cash equivalents
Less: Beginning balance of cash equivalents
Net increase in cash and cash equivalents -17,102,072.10 -7,957,101.56
5.33.2 Breakdowns of cash and cash equivalents:
Item Ending balance Beginning balance
1. Cash 10,108,175.91 27,210,248.01
Including: cash on hand 329,071.51 273,523.86
Bank deposit available for payment at any time 9,779,104.40 26,936,724.15
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 10,108,175.91 27,210,248.01
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6Business combination and consolidated financial statements
6.1 Scope of consolidation (aggregation) of financial statements
The scope of consolidation (aggregation) of financial statements covers the headquarter
of the Company and the subsidiary South China Grand Hotel of Hainan Dadonghai
Tourism Center (Holdings) Co., Ltd., which is subject to independent accounting.
6.2 Changes in scope of consolidation (aggregation) of financial
statements:
There is no change in scope of consolidation (aggregation) of the financial statements of
the Company in the year.
7 Risks relating to financial instruments
The Company faces a variety of financial risks in business process: credit risk, market
risk and liquidity risk. The Company’s Board of Directors is overall responsible for risk
management objectives and determining policies, and bears the ultimate responsibility for
risk management objectives and policies, but the board has authorized the Company’s
enterprise management department to design and executive the procedure 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, and will report the discovery to Audit Committee.
The overall objective of the Company’s risk management is to set the risk management
policies to reduce risks as possible without giving excessive influence to competitiveness
and strain capacity of the Company.
7.1 Credit risk
Credit risk is the risk of financial loss on one party of a financial instrument due to the
failure of another party to meet its obligations. The Company mainly faces credit risk
generated from customers through credit 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 accounts receivable to ensure
the Company’s overall credit risk falls within a controllable range.
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7.2 Market risk
Market risk is the risk of financial instruments’ fair value and future cash flow
fluctuating due to change of market 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 obligations when paying cash or settle in way of other financial assets.
The policy of the Company is to ensure there are enough cash to pay back mature
debts. The liquidity risk is centralized controlled by the Company’s accounting
department. The accounting department ensures the Company to possess enough cash
to pay back the debts in all reasonable foreseeable circumstances through monitor the
balance of cash, monitor the securities that can be converted into cash at any time and
rolling forecasts of future cash flows in twelve months.
8 Related parties and related party transactions
8.1 The largest shareholder of the Company
Registered Ultimate
Name of Relationship Nature Shareholding
Business Registered Legal Capital Voting ratio in the controller
parent with the of ratio in the
Type place representative (RMB Company (%) of the
company Company Business Company (%)
0’000) Company
Hainan
Plant
LuoNiu
Luoniushan The largest Listed Haikou and
Xu Zili 115,151.00 16.90 16.90 Shan
Co., Ltd. shareholder company City culturing
Holding
business
Group
Note: As of June 30, 2016, Luoniushan Co., Ltd., as the largest shareholder, held
61,515,400 shares (16.90% of the total share capital of the Company).
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8.2 Related party transactions
8.2.1 Sale of goods/rendering of labor services
Contents Pricing method The Period Last period
of related and Proportion Proportion
Related party party decision-making in similar in similar
Amount Amount
transactio procedure of transactions transaction
ns related transaction (%) s (%)
Luoniushan Accommo
Market price 252,303.00 1.67% 20,672.00 0.17%
Co., Ltd. dation
8.2.2 Receivables and payables of related parties
Name Related party Ending balance Beginning balance
Accounts receivable Luoniushan Co., Ltd. 51,896.00 10,668.00
8.2.3 Remuneration of key management
Name The Period (RMB ’0,000) Last period (RMB ’0,000)
Remuneration of key management 73.15 64.58
9 Contingencies
At May 26,2016，the Company received lawyer’s letter of Hainan Yunfan law firm which
is entrusted by Hainan Power Grid Co., LTD Sanya Power Supply Bureau (hereinafter
referred to as the "Sanya Power Supply Bureau"), the letter claims that Sanya Power
Supply Bureau found that the Company’s subsidiary South China Grand Hotel of Hainan
Dadonghai Tourism Center (Holdings) Co., Ltd’s the amount of CT is different with its
marketing management system record. The inconformity time is July, 2006, and the
hotel’s CT is changing on April, 2016. Therefore, undercounted electricity consumption
amount is 10,313,373.00 kilowatt-hours, and estimated cost is 7,200,165.75 Yuan as
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various electricity prices and charges.
According to the file “Law Advisory Opinion about Retroactive Power (Charge) Dispute
between South China Grand Hotel and Sanya Power Supply Bureau” issued by Beijing
Junhe (Haikou) Law Firm at December 20, 2016, which claims that Sanya Power Supply
Bureau has responsibility for CT to purchase, install, enseal, unseal and change, therefore,
the responsibility of the guilty party for undercounted electricity consumption of South
China Grand Hotel is Sanya 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's court’s protection, except situations provided by
law. The Company has withheld the undercounted electricity consumption cost in 2016
which is about 1,489,685.04 Yuan during the period from April, 2014 to April, 2016.
10 Commitments
There are no commitments required to be disclosed by the Company.
11 Notes to other significant events
11.1 Correction of accounting errors in previous period
11.1.1 Retrospective restatement method
There is no correction of accounting errors using retrospective restatement method in
previous period.
11.1.2 Prospective application method
There is no correction of accounting errors using prospective application method in previous period
11.2 Others
In accordance with the requirements of the Regulatory Guidelines of Listed Companies No. 4 -
Actual Controller, Shareholders, Related Parties, Purchaser and Commitments and Fulfillment of
Listed Companies (CSRC Announcement No. [2013] 55) of China Securities Regulatory
Commission, on June 7, 2014, Luoniushan Co., Ltd. (hereinafter referred to as “Luoniushan”) sent
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out the Letter about Changing the Commitments of Luoniushan Co., Ltd. to Hainan Dadonghai
Tourism Centre (Holdings) Co., Ltd. to the Company, and made commitments that Luoniushan
shall actively seek reorganization party to reorganize the assets of Dadonghai within three years
from the date the Company’s general meeting of shareholders considered and approved this
commitment. The above matters have been considered and approved by the general meeting of
shareholders of Dadonghai on June 27, 2014.
On February 22, 2017, the company received the Letter about the Progress of Planning and
Preparing for the Fulfillment of Commitments from the largest shareholder Luoniushan,
Luoniushan planned to transfer 100% equity stake it held in the wholly-owned subsidiary -
Industrial Corporation (thereinto, Industrial Corporation shall firstly plan to accept the transfer of
some equity stake of financial assets held by Luoniushan, tentatively confirmed as 6.91% equity
stake of Sanya Rural Commercial Bank, which is subject to the transaction object confirmed by
ultimate negotiation) to the Company, the means of transaction is expected to be cash offer, and
the transaction amount is approximately RMB 300 million. At present, the work is being
promoted.
13 Supplementary information
13.1 Details of current non-recurring profits and losses
Item The Period Introduction
Profits or losses from disposal of non-current assets
Tax refunded, reduced or exempted with unauthorized approval or
without formal documents of approval
Government subsidies included into current profits and losses (other
than government subsidies related closely to enterprise business and
granted by quota or quantity according to national unified standard)
Fund occupancy expenses collected from non-financial enterprises
and accounted into current profit and loss
Gains from differences between the investment costs of acquiring of
subsidiaries, joint ventures or associates and the share of fair value
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Item The Period Introduction
of identifiable net assets of the investees at such investment
Gains or losses from non-monetary assets exchange
Gains or losses from commissioned investment or management on
assets
Provisions for asset impairment due to force majeure, such as
natural disasters
Gain or loss from debt restructuring
Enterprise reorganizing expenses, such as employee
accommodation costs and integration expenses
Gains or losses from excess over fair value due to obvious unfair
transaction price
Current net gains or losses of subsidiaries acquired through business
combination under common control from the beginning of current
period till the date of consolidation
Gains or losses incurred by contingencies irrelevant to the
Company’s normal business
Gains or losses from changes in fair value of financial assets or
liabilities held for trading, as well as investment income from
disposal of financial assets or liabilities held for trading and
available-for-sale financial assets, other than those in valid hedging
businesses related to the Company’s normal businesses
Reversal of provisions for impairment of accounts receivable tested
for impairment independently
Gains or losses from external consigned loans
Gains or losses from external consigned loans
Effect on current profit and losses of one-off adjustments for current
profit and loss in accordance with the requirements of laws and
regulations regarding taxation or accounting
Trustee fee obtained from entrusted operations
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Item The Period Introduction
Other non-operating income and expense other than the
abovementioned ones
Effect of income tax
Effect of minority interest (after tax)
Total
13.2 Return on net assets and earnings per share
Weighted average Earnings per share (RMB)
Profit during the reporting period return on net Basic earnings Diluted earnings
assets (%) per share per share
Net profits attributable to ordinary shareholders
2.29% 0.0047 0.0047
of the Company
Net profits attributable to ordinary shareholders
of the Company after deduction of non-recurring 2.29% 0.0047 0.0047
profits or losses
13.3 Accounting difference between IFRS and CAS
There are no accounting differences between IFRS and CAS.
HAINAN DADONGHAI TOURISM CENTER (HOLDINGS) CO., LTD
17August 2017
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