司公限有份股心中游旅海东大南海 2018 文全告报度年年
Stock Code: 000613, 200613 Short Form of the Stock: Dadonghai -A, Dadonghai -B
海南大东海旅游中心股份有限公司
Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd.
Annual Report 2018
Disclosure Date: 26 February 2019
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司公限有份股心中游旅海东大南海 2018 文全告报度年年
Section I. Important Notice, Contents and Paraphrase
Important Notice:
Board of Directors, Supervisory Committee, all directors, supervisors and senior executives of
Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd. (hereinafter referred to as the
Company) hereby confirm that there are no any fictitious statements, misleading statements, or
important omissions carried in this report, and shall take all responsibilities, individual and/or
joint, for the reality, accuracy and completion of the whole contents.
Yuan Xiaoping, Principal of the Company, Fu Zongren, person in charge of accounting works
and Fu Zongren, person in charge of accounting organ (accounting principal) hereby confirm
that the Financial Report of 2018 Annual Report is authentic, accurate and complete
All directors are attending the Board Meeting for Report deliberation.
The Company has no plan of cash dividends carried out, bonus issued and capitalizing of
common reserves either.
Concerning the forward-looking statements with future planning involved in the Report, they
do not constitute a substantial commitment for investors. Investors are advised to exercise
caution of investment risks.
Content
Section I Important Notice, Contents and Paraphrase..........................................................................2
Section II Company Profile and Main Finnaical Indexes.................................................................... 4
Section III Summary of Company Business........................................................................................ 8
Section IV Discussion and Analysis of Operation............................................................................... 9
Section V Important Events................................................................................................................18
Section VI Particular about Changes in shares and shareholders.......................................................27
Section VII Preferred Stock................................................................................................................33
Section VIII Particulars about Directors, Supervisors, Senior Executives and Employees...............34
Section IX Corporate Governance..................................................................................................... 39
Section X Corporate Bond................................................................................................................. 45
Section XI Financial Report............................................................................................................... 46
Section XII Documents available for reference............................................................................... 118
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司公限有份股心中游旅海东大南海 2018 文全告报度年年
Paraphrase
Items Refers to Contents
CSRC Refers to China Securities Regulation Commission
SSE Refers to Shenzhen Stock Exchange
Company Law Refers to Company Law of The People’s Republic of China
Securities Law Refers to Securities Law of The People’s Republic of China
Rules of Listing Refers to Rules of Shenzhen Stock Exchange for the Listing of Stocks
Company or the Company Refers to Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd.
Article of Association of Hainan Dadonghai Tourism Centre
Article of Association Refers to
(Holdings) Co., Ltd.
Shareholders’ General Meeting of Hainan Dadonghai Tourism
Shareholders’ General Meeting Refers to
Centre (Holdings) Co., Ltd.
Board Refers to Board of Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd.
Supervisory Committee of Hainan Dadonghai Tourism Centre
Supervisory Committee Refers to
(Holdings) Co., Ltd.
Luoniushan Refers to Luoniushan Co., Ltd.
Yuan Refers to CNY/RMB
In the reporting period, the reporting period Refers to 1 January 2018 to 31 December 2018
Major Risk Warning
Concerning the forward-looking statements with future planning involved in the Report, they do not
constitute a substantial commitment for investors. Investors are advised to exercise caution of
investment risks.
Securities Times, Hong Kong Commercial Daily and Juchao Website (www.cninfo.com.cn) are the
media for information disclosure appointed by the Company for year of 2019, all information under
the name of the Company disclosed on the above said media shall prevail.
The report is prepared in bilingual versions of Chinese and English respectively, in the event of any
discrepancy in understanding the two aforementioned versions, the Chinese version shall prevail.
Investors are advised to exercise caution of investment risks.
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司公限有份股心中游旅海东大南海 2018 文全告报度年年
Section II Company Profile and Main Finnaical Indexes
I. Company information
Short form of the stock Dadonghai -A, Dadonghai -B Stock code 000613, 200613
Short form of the Stock
N/A
after changed
Stock exchange for listing Shenzhen Stock Exchange
Name of the Company (in
Chinese)
司公限有份股心中游旅海东大南海
Short form of the Company
(in Chinese)
海东大
Foreign name of the
Hainan Dadonghai Tourism Centre (Holdings) Co.,Ltd.
Company
Foreign name of short form
DADONGHAI
of the Company
Legal representative Yuan Xiaoping
Registrations add. Dadonghai Sanya
Code for registrations add 572021
Offices add. Dadonghai Sanya
Codes for office add. 572021
Company website ——
Email hnddhhn@21cn.com
II. Person/Way to contact
Secretary of the Board Rep. of security affairs
Name Wang Hongjuan
Contact add. Dadonghai Sanya
Tel. 0898-88219921
Fax. 0898-88214998
E-mail hnddhhn@21cn.com
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司公限有份股心中游旅海东大南海 2018 文全告报度年年
III. Information disclosure and preparation place
Newspaper appointed for information disclosure Securities Times, Hong Kong Commercial Daily
Website for annual report publish appointed by
http://www.cninfo.com.cn
CSRC
Preparation place for annual report Security department of the Company
IV. Registration changes of the Company
Organization code Unified social credit code 91460000201357188U
Changes of main business since
No changes
listing
1. The Company listed A-stock in January 1997, and 96.327 million A-stock shares are
held by Hainan Dadonghai Tourism Centre Group Co., ltd., a 26.46% in total share capital
of the Company and is the first majority shareholder of the Company also.
2. On 25 December 1998, the shares held by Hainan Dadonghai Tourism Centre Group
Co., ltd were transfer to Sanya ABC through the courts of justice, and after obtained the
shares in December 1998, Sanya ABC entrust wholly-owned subordinate enterprise Sanya
Bank-Agriculture Industrial Development Corp. to hold the aforesaid shares, than the first
majority shareholder of the Company comes to Sanya Bank-Agriculture Industrial
Development Corp.
3. On 12 December 2000, the aforesaid equity was stripped to name of China Greatwall
Previous changes for controlling
Assets Management Corporation, the first majority shareholder of the Company.
shareholders
4. On 19 September 2001, China Greatwall Assets Management Corporation entered into
“Equity Transfer Agreement” with Haikou Food Co., Ltd for 60 million shares transfer;
and gained approval of [2002] No.: 430 from Ministry of Finance dated 18 October 2002,
than the first majority shareholder of the Company comes to Haikou Food Co., Ltd.
5. On 24 April 2008, Haikou Agriculture & Industry & Trade Luoniushan Co., Ltd.
entered into the “Statement”, confirmed that the 60 million shares held by Haikou Food
Co., Ltd. were under the name of Haikou Agriculture & Industry & Trade Luoniushan
Co., Ltd., the shares’ ownership have been transfer dated 29 January 2010. Therefore,
Haikou Agriculture & Industry & Trade Luoniushan Co., Ltd. comes to the first majority
shareholder of the Company.
V. Other relevant information
CPA engaged by the Company
Name of CPA BDO CHINA Shu Lun Pan Certified Public Accountants LLP
Offices add. for CPA 4# Building, No. 61, Nanjing Rd.(E), Shanghai
Signing Accountants Li Jinhua, Zhu Meirong
Sponsor engaged by the Company for performing continuous supervision duties in reporting period
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司公限有份股心中游旅海东大南海 2018 文全告报度年年
□ Applicable √ Not applicable
Financial consultant engaged by the Company for performing continuous supervision duties in reporting period
□ Applicable √ Not applicable
VI. Main accounting data and financial indexes
Whether it has retroactive adjustment or re-statement on previous accounting data
□ Yes √ No
2018 2017 Changes over last year 2016
Operating income (RMB) 29,515,592.33 27,906,564.23 5.77% 21,708,883.51
Net profit attributable to shareholders of the listed company
653,282.19 2,858,998.66 -77.15% -2,661,052.49
(RMB)
Net profit attributable to shareholders of the listed company
816,346.09 779,389.74 4.74% -4,072,689.97
after deducting non-recurring gains and losses (RMB)
Net cash flow arising from operating activities (RMB) 6,783,893.26 5,127,288.47 32.31% 2,766,372.02
Basic earnings per share (RMB/Share) 0.0018 0.0079 -77.22% -0.0073
Diluted earnings per share (RMB/Share) 0.0018 0.0079 -77.22% -0.0073
Return on Equity 0.84% 3.78% -2.94% -3.52%
Changes over end of
End of 2018 End of 2017 End of 2016
last year
Total assets (RMB) 88,197,118.07 87,466,661.80 0.84% 105,444,153.63
Net assets attributable to shareholder of listed company
77,788,696.29 77,135,414.10 0.85% 74,276,415.44
(RMB)
VII. Difference of the accounting data under accounting rules in and out of China
1. Difference of the net profit and net assets disclosed in financial report, under both IAS (International
Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √ Not applicable
The Company had no difference of the net profit or net assets disclosed in financial report, under either IAS (International
Accounting Standards) or Chinese GAAP (Generally Accepted Accounting Principles) in the period.
2. Difference of the net profit and net assets disclosed in financial report, under both foreign accounting
rules and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √ Not applicable
The Company had no difference of the net profit or net assets disclosed in financial report, under either foreign accounting rules or
Chinese GAAP (Generally Accepted Accounting Principles) in the period.
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司公限有份股心中游旅海东大南海 2018 文全告报度年年
VIII. Quarterly main financial index
In RMB
Second Fourth
First quarter Third quarter
quarter quarter
Operating income 9,888,991.83 6,284,937.49 5,799,836.91 7,541,826.10
Net profit attributable to shareholders of the listed company 1,973,425.41 -691,259.83 -687,050.10 58,166.71
Net profit attributable to shareholders of the listed company after
1,973,903.39 -691,532.83 -687,050.10 221,025.63
deducting non-recurring gains and losses
Net cash flow arising from operating activities 2,610,752.60 499,925.00 1,585,973.61 2,087,242.05
Whether there are significant differences between the above-mentioned financial index or its total number and the relevant financial
index disclosed in the company’s quarterly report and semi-annual report
□Yes √ No
IX. Items and amounts of extraordinary profit (gains)/loss
√Applicable □ Not applicable
In RMB
Item 2018 2017 2016 Note
Gains/losses from the disposal of non-current asset (including the write-off
-29,691.26 -30,016.43 380,866.43 -
that accrued for impairment of assets)
Capital occupation fees charged by non financial enterprises recorded in the
805,825.24 961,165.05 -
current profits and losses
Other non-operating income and expenditure except for the aforementioned
-133,372.64 1,303,800.11 69,606.00 -
items
Total -163,063.90 2,079,608.92 1,411,637.48 --
Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for Companies
Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according to
the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their
Securities to the Public --- Extraordinary Profit/loss, explain reasons
□ Applicable √ Not applicable
In reporting period, the Company has no particular about items defined as recurring profit (gain)/loss according to the lists of
extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to
the Public --- Extraordinary Profit/loss
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司公限有份股心中游旅海东大南海 2018 文全告报度年年
Section III Summary of Company Business
I. Main businesses of the company in the reporting period
Whether the company needs to comply with the disclosure requirements of the particular industry
No
The company's main business is hotel accommodation and catering services. Procurement of goods is mainly the goods and materials
necessary for hotel and catering operations by taking the principle of low price and fine quality, some goods are purchased by
directly signing purchase contracts with suppliers, and some good are purchased by procurement agents. The operation are mainly
including the network billing and overseas travel agency team, and supplemented by the individual travelers of non-internet
marketing and business and the tourists from travel agencies. The hotel is located at the central zone of Dadonghai scenic spot in
Sanya City, Hainan Province, and it has become a member of the nationwide famous hotels because of the convenient transportation,
beautiful environment, long history, and rich culture. However, in recent years, the local high-, middle- and low-grade hotels or
guesthouses numerously emerge, resulting in the supply much larger than the market demand, the industry competition is rather
fierce, and the pressure of decline in business remains.
II. Major changes in main assets
1. Major changes in main assets
Major assets Note of major changes
Monetary funds increased mainly including the 6.78 million Yuan cash flow increased from operation
Monetary funds
activities and 1.1 million Yuan cash declined from investment activities
Notes Receivable and Notes Receivable and accounts receivable declined mainly because the collection for receivables are
Accounts Receivable increased in the period
Other receivables Other receivables increased mainly due to the growth of utilities receivables, attorney fee and petty cash
Non-current assets due within one year declined mainly because in line with the new accounting statement,
Non-current assets due
the long-term un-amortization expenses which expected to be amortized within one year was listed under
within one year
the item of long-term un-amortization expenses
2. Main overseas assets
□ Applicable √ Not applicable
III. Core Competitiveness Analysis
Whether or not the Company complies with disclosure requirement of the special industry
No
The company takes hotel accommodation and catering services as the principle works, locates at Dadonghai bay which is one of the
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司公限有份股心中游旅海东大南海 2018 文全告报度年年
China “Top 40 scenery” and the only AAAA scenic spot open for free in Sanya and has the maximum passenger flow volume in
Sanya City, and is about a 5-minute drive from downtown of Sanya City and about a 30-munite drive from Sanya Phoenix Airport.
The hotel is only tens of meters distant from the sea level, possesses beautiful landscaping full of blooming flowers all the year round,
and enjoys exceptional geography, natural environmental advantages. The hotel has opened for more than two decades which is one
of the oldest hotels in Sanya and has received many domestic and foreign heads of state and national leaders. In the recent years, the
company has comprehensively upgraded and rebuilt the hotel’s software and hardware facilities, further improved the hotels internal
and external business environment, and effectively enhanced the business competitiveness. Currently, the management of the
company’s hotel is still in the front rank among hotels in the same area, with the same scale, and at the same level.
In the future work, the company will keep trying to improve the hotel’s internal and external business environment, strengthen the
sales efforts and the staff construction, and further improve the operational capability. During the reporting period, the company's
core competence had no significant change.
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司公限有份股心中游旅海东大南海 2018 文全告报度年年
Section IV Discussion and Analysis of Operation
I. Introduction
During the reporting period, the company realized main business income of 29,515,600 Yuan, increased by
1,609,000 Yuan compared with the same period last year, an increase of 5.77%; operating profit of 816,300 Yuan,
decreased by 768,900 Yuan compared with the same period last year, a decrease of 48.50%; net non-operating
income of 163,100 Yuan, decreased by 1,436,800 Yuan compared with the same period last year, a decrease of
112.80%; net profit of 653,300 Yuan, decreased by 2,205,700 Yuan compared with the same period last year, a
decrease of 77.15%.
During the reporting period, the Company focus on market-oriented and use marketing strategy in a flexible way
to exploited the sales channel, meanwhile, strengthening enterprise culture construction as well as the employee
team-building, making efforts to improve product’s quality, strictly controlling the cost management, perfect the
Company’s internal control system in order to reduce the risks and consumptions for more income earns and less
expenditure costs, we completed the operation targets that formulated at beginning of the year basically. Main
works are as:
1. Market-oriented, use marketing strategy in a flexible way to exploit the sales channel
During the reporting period, the Company actively expanded the network market, the Russian market and the
southwest, north, east and southern China markets in addition to further consolidating its existing customer bases
oriented by markets with flexible utilization of marketing strategies. Besides, increasing cooperation was made
by the Company with domestic and foreign well-known travel agencies, sales network platforms and direct-sale
travel agencies in the first and second tier cities. The Company also conducted implementation of sales
incentives and sales mechanism involving every staff, to increase the market share in terms of sales. During the
reporting period, the revenue of the Company from overseas sales, network sales, meeting teams and individual
visitors from travel agencies increased significantly over the same period of last year. The revenue from its major
operating business was RMB27.9066 million, representing a year-on-year increase of 28.55% as compared to the
revenue of RMB6.1977 million of previous year.
2. People-oriented, strengthen the enterprise with high-quality, strive to improve product quality and enhance the
competitive-ness of enterprises
In reporting period, in line with the Human-Oriented employment ideality, we continuously enriched the culture
life for employees, create a harmonious working environment and strengthen the construction of enterprise culture
and staff-building. At the same time, create new management mechanism, motivate and mobilized the enthusiasm,
initiative and creativity of the staff. Based on the management ideal of “strengthen the enterprise with
high-quality”, we constantly strengthen the hotel management and carried out skill training in pre-job for their
basic information and the after-job for business ability improvement. Enhance the service standards and
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司公限有份股心中游旅海东大南海 2018 文全告报度年年
consciousness, as well as the sense of responsibility and quality, effectively improved the service quality and
management standards, and improving the quality of the hotel and comprehensive competitiveness.
3. Strictly curb the costs and budget management, improve internal control mechanism, reducing risks and
consumptions, increase revenue and reduce expenditures, safety in production to maximize the interest of the
enterprise
During the reporting period, the Company continued to focus on financial management, improve the procurement
management system, strengthen management of procurement cost control and budget management, adopt
diversified means to obtain procurement price inquiry, such as network price inquiry, the hotel industry price
inquiry and other measures, obtain cost inquiry from over three suppliers to select the best one, control operating
costs in a scientific manner, strictly control various expense and expenditures, frequent inspection and repair to
prevent waste of resources, which enabled the Company to effectively improve the reasonableness of procurement
cost and cost effectiveness. Besides, human resources cost was effectively brought down due to optimized organ
establishment and personnel distribution. At the same time, the Company continued to improve the internal control
system, strengthen regulation and implementation of internal control system, strengthen the effective
implementation of internal control work, reduce risks and consumption, increase revenue and control expenditures,
emphasize production safety and improve operational efficiency, to ensure the operation safety and thus maximize
the interests of the Company as a whole.
In 2019, the Company continues to consolidate and expand sales channels, improve the hotel’s quality and service
standards, and enhance the comprehensive competitiveness, to laying out a solid foundation for sustained, stable
and healthy development of the Company.
II. Main business analysis
1. Introduction
See the “I-Introduction” in “Discussion and Analysis of Operation”
2. Revenue and cost
(1) Constitute of operation revenue
In RMB
2018 2017
Increase/decrease
Ratio in operation Ratio in operation
Amount Amount y-o-y
revenue revenue
Total of operation
29,515,592.33 100% 27,906,564.23 100% 5.77%
revenue
According to industries
Tourism catering 26,442,049.47 89.59% 24,691,592.86 88.48% 7.09%
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司公限有份股心中游旅海东大南海 2018 文全告报度年年
service
Other business 3,073,542.86 10.41% 3,214,971.37 11.52% -4.40%
According to products
Room revenue 22,731,299.15 77.02% 21,103,123.09 75.62% 7.72%
Catering
entertainment 3,710,750.32 12.57% 3,588,469.77 12.86% 3.41%
revenue
Other business 3,073,542.86 10.41% 3,214,971.37 11.52% -4.40%
According to region
Hainan area 29,515,592.33 100.00% 27,906,564.23 100.00% 5.77%
(2) About the industries, products, or regions accounting for over 10% of the company’s operating income
or operating profit
√Applicable □ Not applicable
Whether or not the Company complies with disclosure requirement of the special industry
No
In RMB
Increase/decrea
Increase/decrea Increase/decrea
Operating Gross profit se of gross
Operating cost se of operating se of operating
revenue ratio %） （ profit ratio
revenue y-o-y cost y-o-y
y-o-y %
） （
According to industries
Tourism catering
26,442,049.47 11,280,674.54 57.34 1,750,456.61 615,278.51 1.00
service
Other business 3,073,542.86 474,523.56 84.56 -141,428.51 0.00 -1.00
According to products
Room revenue 22,731,299.15 9,307,117.61 59.06 1,628,176.06 548,753.23 1.00
Catering
entertainment 3,710,750.32 1,973,556.93 46.82 122,280.55 66,525.28 0.00
revenue
Other business 3,073,542.86 474,523.56 84.56 -141,428.51 0.00 -1.00
According to region
Hainan area 29,515,592.33 11,755,198.10 60.17 1,609,028.10 615,278.51 0.00
Under circumstances of adjustment in reporting period for statistic scope of main business data, adjusted main business based on
latest one year’s scope of period-end
□ Applicable √ Not applicable
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司公限有份股心中游旅海东大南海 2018 文全告报度年年
(3) Income from physical sales larger than income from labors
□ Yes √ No
(4) Fulfillment of the company’s signed significant sales contracts up to this reporting period
□ Applicable √ Not applicable
(5) Constitute of operation cost
Products classification
In RMB
2018 2017 Increase/de
Products Item Ratio in operation Ratio in operation crease
Amount Amount
cost cost y-o-y
Tourism catering
Raw material 1,973,556.93 16.79% 1,907,031.65 17.12% 3.49%
service
Tourism catering
Salary welfare 2,092,195.74 17.80% 1,891,709.80 16.98% 10.86%
service
Tourism catering Water and
1,355,721.99 11.53% 1,564,778.83 14.05% -13.36%
service electricity
Tourism catering
Depreciation 2,160,828.69 18.38% 2,009,886.94 18.04% 7.51%
service
Tourism catering
Repair cost 1,319,951.97 11.23% 964,425.22 8.66% 36.86%
service
Tourism catering Knitted and
170,130.34 1.53% -100.00%
service Cotton Goods
Tourism catering
Washing fee 680,236.96 5.79% 594,068.64 5.33% 14.50%
service
Tourism catering
Total cost 11,280,674.54 95.96% 10,665,396.03 95.74% 5.77%
service
(6) Whether the changes in the scope of consolidation in Reporting Period
√ Yes □ No
Changes of consolidated scope
Subsidiary included in consolidated scope in the period
Name Combined by Net assets at Current net profit Established on
period-end
Hainan Wengao Tourism Resources New 999,768.27 -231.73 2018.6.6
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司公限有份股心中游旅海东大南海 2018 文全告报度年年
Development Co., Ltd. establishment
(7) Major changes or adjustment in business, product or service of the Company in Reporting Period
□ Applicable √ Not applicable
(8) Major sales and main suppliers
Major sales client of the Company
Total top five clients in sales (RMB) 17,703,242.98
Proportion in total annual sales volume for top five clients 59.98%
Ratio of related parties in annual total sales among the top five
0.00%
clients
Information of top five clients of the Company
‘ Name Sales (RMB) Proportion in total annual sales
Sanya Haolide International Travel
1 6,626,716.00 22.45%
Service Co., Ltd.
Sanya Youyi International Travel Agency
2 5,408,974.00 18.33%
Co., Ltd.
Shanghai Hecheng International Travel
3 2,424,883.40 8.22%
Service Co., Ltd.
Alipay (China) Network Technology Co.,
4 2,074,558.58 7.03%
Ltd.
Sanya Shengda International Travel
5 1,168,111.00 3.96%
Agency Co., Ltd.
Total -- 17,703,242.98 59.98%
Other situation of main clients
□ Applicable √ Not applicable
Main suppliers of the Company
Total purchase amount from top five suppliers (RMB) 7,105,892.26
Proportion in total annual purchase amount for top five suppliers 82.48%
Ratio of related parties in annual total sales among the top five suppliers 0.00%
Information of top five suppliers of the Company
Serial Name Sales (RMB) Proportion in total annual sales
Sanya Yunfang Food Distribution Co.,
1 2,840,267.06 32.97%
Ltd.
Sanya Power Supply Bureau of Hainan
2 2,494,649.67 28.96%
Power Grid
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司公限有份股心中游旅海东大南海 2018 文全告报度年年
3 Sanya Zhengzhuang Industrial Co., Ltd. 695,109.80 8.07%
4 Sanya Sino French Water Co., Ltd. 662,067.33 7.68%
Sanya Changfeng Ocean Natural Gas
5 413,798.40 4.80%
Supply Co., Ltd.
Total -- 7,105,892.26 82.48%
Other notes of main suppliers of the Company
□ Applicable √ Not applicable
3. Expenses
In RMB
Increase/decreas
2018 2017 Note of major changes
e y-o-y
Sales expense 5,619,079.95 5,124,503.55 9.65% The salary expenses increased
Management expense 10,133,021.97 9,665,525.83 4.84% The salary expenses increased
Financial expense -188,278.60 -249,176.18 -24.44% Income of saving interests declined
4. R&D expenses
□ Applicable √ Not applicable
5. Cash flow
In RMB
Item 2018 2017 Y-o-y changes
Subtotal of cash in-flow from
33,598,344.85 30,557,863.93 9.95%
operation activity
Subtotal of cash out-flow from
26,814,451.59 25,430,575.46 5.44%
operation activity
Net cash flow from operation
6,783,893.26 5,127,288.47 32.31%
activity
Subtotal of cash in-flow from
9,840,550.00 -100.00%
investment activity
Subtotal of cash out-flow from
1,101,145.12 32,496,479.32 -96.61%
investment activity
Net cash flow from investment
-1,101,145.12 -22,655,929.32 -95.14%
activity
Subtotal of cash in-flow from
19,810,000.00 -100.00%
financing activity
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司公限有份股心中游旅海东大南海 2018 文全告报度年年
Subtotal of cash out-flow from
19,810,000.00 -100.00%
financing activity
Net increased amount of cash
5,682,748.14 -17,528,640.85 132.42%
and cash equivalent
Main reasons for y-o-y major changes in aspect of relevant data
√Applicable □ Not applicable
1. Cash in-flow from operating activities increased 9.95% from a year earlier, mainly because revenue from operation increased
dramatically and sales return increased correspondingly;
2. Cash out-flow from operating activities increased 5.54% from a year earlier, mainly because sales volume increased dramatically,
and purchasing business and salary expenses increased;
3. Net cash flow from operating activity increased 32.31% from a year earlier, mainly because cash in-flow over the out-flow from
operating activities in the period;
4. Cash in-flow from investment activity declined 100% from a year earlier, mainly due to the principal of 9 million Yuan creditors’
investment in the year and collection of fund possession cost;
5. Cash out-flow from investment activity declined 96.61% from a year earlier, mainly because paid CSRC fines last year and
creditor’s investment payment;
6. Net cash flow from investment activity declined 95.14% on a y-o-y basis, mainly because paid CSRC fines last year and obtained
the fund possession cost for creditors’ investment;
7. Cash in-flow from financing activity declined 100% on a y-o-y, mainly because a 19.81 million Yuan intercourse fund from
Luoniushan Group Co., Ltd. was achieved last year;
8. Cash out-flow from financing activity declined 100% on a y-o-y, mainly due to the payment of 19.81 million Yuan intercourse
fund from Luoniushan Group Co., Ltd. last year;
9. Net increased amount of cash and cash equivalent increased 132.42% from a year earlier, mainly because the cash increased 5.68
million Yuan in the period while there was a decline of 17.53 million Yuan cash last year
Reasons of major difference between the cash flow of operation activity in report period and net profit of the Company
□ Applicable √ Not applicable
III. Analysis of the non-main business
√Applicable □ Not applicable
In RMB
Amount Ratio in total profit Note Whether be sustainable
Switch back of the bad debt
Asset impairment -13,656.55 -2.09% Un-sustainability
provision
Non-operating
273.00 0.04% Other revenue Un-sustainability
income
Non-business The overdue fine and loss from fixed
163,336.90 25.00% Un-sustainability
expenditure assets disposal
16
司公限有份股心中游旅海东大南海 2018 文全告报度年年
IV. Assets and liability
1. Major changes of assets composition
In RMB
End of 2018 End of 2017
Ratio in Ratio in Ratio
Notes of major changes
Amount total Amount total changes
assets assets
Net increase of cash flow arising from
Monetary fund 15,364,355.30 17.42% 9,681,607.16 11.07% 6.35%
operation activities
Account
426,434.87 0.48% 594,130.89 0.68% -0.20% Collection of the receivables increased
receivable
Inventory 221,390.19 0.25% 227,005.11 0.26% -0.01% In normal changes
Investment real
8,384,480.43 9.51% 8,859,003.99 10.13% -0.62% In normal changes
estate
Fix assets 36,497,869.65 41.38% 39,088,708.83 44.69% -3.31% In normal changes
2. Assets and liability measured by fair value
□ Applicable √ Not applicable
3. Assets right restriction till end of reporting period: Nil
V. Investment
1. Overall situation
√Applicable □ Not applicable
Investment in the same period of last
Investment in the reporting (RMB) Changes
year ( RMB)
1,000,000.00 9,000,000.00 88.89%
2. The major equity investment obtained in the reporting period
√Applicable □ Not applicable
In RMB
Way Inves Share Capit Progres Inc Gain/ Laws
Main Inves Prod Discl Discl
of tment holdi al Partn s till om loss uit
Investee busin tment uct osure osure
inves amou ng resou er end of e in the invol
ess term type date index
tment nt ratio rces balance est perio ved
17
司公限有份股心中游旅海东大南海 2018 文全告报度年年
sheet im d (Y/N
date ate )
d
Hainan
Wengao
Deve Self
Tourism Newl
lopm raise Touri Investm
Resource y 1,000
100.0 Long sm ent 0.0 -231. 2018-
ent of ,000. d N/A N
s establ 0% -term produ complet 0 73 06-07
touris 00 capit ct ed
Develop ished
m al
ment Co.,
Ltd.
1,000
0.0 -231.
Total -- -- ,000. -- -- -- -- -- -- -- -- --
0 73
00
3. The major non-equity investment doing in the reporting period
□ Applicable √ Not applicable
4. Financial assets investment
(1) Securities investment
□ Applicable √ Not applicable
The company had no securities investment in the reporting period.
(2) Derivative investment
□ Applicable √ Not applicable
The Company has no derivatives investment in the reporting period.
5. Application of raised proceeds
□ Applicable √ Not applicable
The Company has no application of raised proceeds in the reporting period.
(1) Overall application of raised proceeds
□ Applicable √ Not applicable
(2) Situation of committed project of raised proceed
□ Applicable √ Not applicable
18
司公限有份股心中游旅海东大南海 2018 文全告报度年年
(3) The changed project of raised proceeds
□ Applicable √ Not applicable
VI. Sales of major assets and equity
1. Sales of major assets
□ Applicable √ Not applicable
The Company had no sales of major assets in the reporting period.
2. Sales of major equity
□ Applicable √ Not applicable
VII. Analysis of main holding company and stock-jointly companies
√ Applicable □Not applicable
Particular about main subsidiaries and stock-jointly companies net profit over 10%
In RMB
Company Main Register Total Operating Operating
Type Net Assets Net profit
name business capital assets revenue profit
Hainan
Wengao
Tourism
Tourism
Subsidiary developme 1000000 999,768.27 999,768.27 0.00 -231.73 -231.73
Resources
nt
Development
Co., Ltd.
Notes of holding and shareholding companies
□ Applicable √ Not applicable
Explanation on main holding and share-holding enterprise: Hainan Wengao Tourism Resources Development Co., Ltd. is in the
process of establishment without operational not yet
VIII. Structured vehicle controlled by the Company
□ Applicable √ Not applicable
IX. Future Development Prospects
1. Industrial development trend and competition facing the Company
Sanya is the only tropical seaside city in China with a world-leading eco-environment, and has a wonderful air
quality that can be numbered in China, it owns an abound marine resources with unique resource advantage.
19
司公限有份股心中游旅海东大南海 2018 文全告报度年年
Sanya has a geographical position advantage and under the help of preferential policy of duty-free for the
internationalization of tourism island, with the improvement of people’s life quality in recent years, and
enhancement of tourism consumption consciousness as well as the smog air and cold climate outside the island,
the tourism market prospects has a good trend in Hainan. However, in reporting period, with the slow growth of
global economic, and vigorous development in the tourist attractions in and around the country, the consumption
costs in Sanya comes more and more expensive, the tourist diversion and the supply far greater than the demand
while home inn hotel rapidly expanding blindly, the market competition comes more and more intensify. In
addition, with the soaring operation costs and expenditures for the salary of hospitality industry in Sanya and
shrinking operation profit, the hotel industry faced a downward pressure on operation.
In the future work, the company will continue to strengthen the updating and transformation of the hotel’s
equipment and facilities, improve and upgrade the hardware and software equipments and facilities and the quality
of internal and external business environment, enhance the construction of enterprise culture and staff teams,
improve service level and service quality, actively expand the sales channels, make full use of the internet
platform, expand the sales network, increase the market share, and further improve the management level and core
competitiveness.
2. Future development plans and operation plan for year of 2019
(1) Market-oriented, continues to improve the quality management of the software equipment and facilities in the
Hotel, enhancing the hotel brand image, expanding market channel, and center with enterprises performance,
making the brand more bigger and stronger droved by pioneer and invent.
(2) Continue to expand financing channels, enrich the industrial construction, widen the company size, increased
more profit points in order to strengthen the sustainability, stable and healthily of the operation.
(3) Continue to strengthen the standard management of internal control, perfect the corporate governance structure,
standardize the management and operation, and effectively control the risks.
3. Fund demands and use plan required for the future development of the Company
The Company utilizes owned funds or financing methods to raise the funds demanded for development, and
completes the development planning of the Company.
4. The risks may cause adverse effects on the future development strategy and realization of operation target of
the Company
(1) Marco Policy risks
In order to normalize and optimize tourism market or further to promote clear-party construction, related
departments may further issue some relative policies. While these polices may cause restrain and effect on
regional tourism development. Main business income may be affected since we are engaged in tourism service.
Countermeasures: The Company will further to improve the hard and soft equipments and facilities of the hotel
while expanding the business scope, and win more market shares via high-class service and comfortable
environment so as to ensure the main business income level.
(2) Natural disaster risks
In recent years, various natural disasters take place frequently, Hainan Island belongs to oceanic climate, where
has high incidence of disastrous weather in summer. If Sanya becomes the landing place of typhoon, it may cause
20
司公限有份股心中游旅海东大南海 2018 文全告报度年年
great damages to the facilities of the Company and affect the Company’s normal operation.
Countermeasures: The Company will strengthen the construction and maintenance for infrastructure, continue to
buy property insurances, positively adopt effective prevention measures, and improve the ability of resisting
natural disasters.
(3) Risks of HR
Demand for talent in aspect of hotel sales and management are increasingly due to the constantly rise of hotel
industry, flow of hotel talented people comes more widespread and more frequent, we may face the risks of
development restrained from brain drain.
Countermeasure: we will continue to improved the talent introduction, training system, incentive mechanism,
remuneration and welfare as well as insurance mechanism, strive to attract talent, cultivate them and retain them.
Meanwhile, strengthen staff quality and skills as well as the management ability, further putting more efforts in
enterprise culture construction, enhance the cohesion in the Company, and guarantee a stable of the core
management and skill technicians.
(4) Operational risks of main business
With the ceaseless development of global tourist industry constantly and ceaseless rising of high-class,
middle-class and low-class hotels, the tourist sources keep shunting, and the competition of tourism service
industry in Sanya becomes increasingly fierce. While the main business of the Company is just a small-scale hotel,
as the main business is single and the business scope is limited, the tourist market conditions and tourist quantity
directly make significant affects on the company performance.
Countermeasure: made a scientific management and decision-making procedures, strengthen the awareness of risk
prevention, building and improving relevant mechanism and regulized the management in the Company.
Furthermore, increase the sales ability, on base of the former sales network, continues to exploit foreign high-end
tourism market under the superior geographical location and environment for improving the occupancy rate.
Besides, continues to exploit financing channel, expanding operation projects, enrich the industrial structure for
increasing the profit increasing point.
X. Reception of research, communication and interview
1. In the report period, reception of research, communication and interview
√Applicable □ Not applicable
Time Way Type Basic situation index of investigation
Telephone
Investor Mr./Ms. Liu from Guangdong, operation performance of the 3Q and
2018-10-11 communi Individual
cation disclosure date, no materials required
Telephone
Investor Mr./Ms. Zhang from Shanghai, progress of the Lawyer’s Letter received
2018-10-23 communi Individual
cation by the Company and without any material required
Telephone
Investor Mr./Ms. Hua from Beijing, share-merger reform performance by the
2018-11-15 communi Individual
cation majority shareholders and no material required
Telephone
2018-11-22 Individual Investor Mr./Ms. Fang from Shenzhen, material lawsuit of the Company and no
communi
21
司公限有份股心中游旅海东大南海 2018 文全告报度年年
cation material required
Telephone
Investor Mr./Ms. Dong from Zhejiang, annual operation performance of the
2018-12-05 communi Individual
cation Company and no material required
Telephone
Investor Mr./Ms. He from Shaanxi, annual operation performance of the
2018-12-26 communi Individual
cation Company and material lawsuits without material required
Reception (times) 23
Number of hospitality 0
Number of individual reception 23
Number of other reception 0
Disclosed, released or let out major undisclosed
No
information
22
司公限有份股心中游旅海东大南海 2018 文全告报度年年
Section V. Important Events
I. Profit distribution plan of common stock and capitalizing of common reserves plan
Formulation, Implementation and Adjustment of common stock Profit Distribution Policy Especially Cash Dividend policy during
the Reporting Period
□ Applicable √ Not applicable
Profit distribution plan (pre-plan) of common stock and capitalizing of common reserves plan (pre-plan) in latest three years
(including the reporting period)
According to the auditing reports issued by certified public accountants, the net income realized in nearly three
years (including the reporting period) was used to make up the losses in the previous year; the undistributed profit
during this reporting remained a minus. The Company did not take profit allocation nor capitalization of capital
reserve during the reporting period.
Cash dividend of common stock in latest three years (including the reporting period)
In RMB
Ratio of the
Ratio of the
total cash
Ratio of the cash bonus
bonus (other
Net profit cash bonus in by other
ways
attributable net profit ways in net
Proportion included) in
to common attributable profit
for cash net profit
Amount for stock to common attributable Total cash
bonus by attributable
Year for cash bonus shareholders stock to common bonus(other
other to common
bonus shares (tax of listed shareholders stock ways
ways(i.e. stock
included) company in of listed shareholders included)
share shareholders
consolidation company of listed
buy-backs) of listed
statement for contained in company
company
bonus year consolidation contained in
contained in
statement consolidation
consolidation
statement
statement
2018 0.00 653,282.19 0.00% 0.00 0.00% 0.00 0.00%
2017 0.00 2,858,998.66 0.00% 0.00 0.00% 0.00 0.00%
-2,661,052.4
2016 0.00 0.00% 0.00 0.00% 0.00 0.00%
9
The Company gains profits in reporting period and the retained profit of common stock shareholders provided by parent company is
positive but no plan of cash dividend proposed of common stock
□ Applicable √ Not applicable
23
司公限有份股心中游旅海东大南海 2018 文全告报度年年
II. Profit distribution plan and capitalizing of common reserves plan for the Period
□ Applicable √ Not applicable
The Company has no plans of cash dividend distributed, no bonus shares and has no share converted from capital reserve either for
the year.
III. Implementation of commitment
1. Commitments completed in Period and those without completed till end of the Period from actual
controller, shareholders, related parties, purchaser and companies
√Applicable □ Not applicable
Type
of
Commi Comm
Implemen
Commitments Promise com Content of commitments tment itment
tation
date term
mitm
ents
On May 30, 2007, Luoniushan Co., Ltd. made
commitments in the Company’s "Instructions
for reform of non-tradable shares" (Revision)
Com and "Instructions for reform of non-tradable The
mitm
shares" (Abstract of revision) that in view of original
ents
for Dadonghai Company’s losses in successive plans of
Luoniush 6
Commitments for Share years and on the verge of delisting, in order to 2017-0 material
an Co., month
Share Merger Reform Merg reverse the company's business difficulties, 6-27 assets
Ltd s
er improve profitability and recover the reorganiza
Refor continuous business capacity, Luoniushan Co., tion was
m Ltd., the controlling shareholder of Dadonghai terminated
Company made commitments to actively seek
restructuring parties to reorganize the assets of
Dadonghai Company at the appropriate time.
Commitments in report of
acquisition or equity change
Commitments in assets
reorganization
Commitments make in initial
public offering or re-financing
Equity incentive commitment
Other commitments for medium
and small shareholders
Completed on time (Y/N) N
If the commitments is not The Company's stock commenced suspension of trading from the opening session on 15 February 2017
24
司公限有份股心中游旅海东大南海 2018 文全告报度年年
fulfilled on time, shall explain as it planned to fulfill its commitments. On 13 August 2017, 12 proposals relating to Material Asset
the specify reason and the next Acquisition and Connected Transaction Report (Plan) of Hainan Dadonghai Tourism Centre (Holdings)
work plan Co., Ltd. were denied at the 11th extraordinary general meeting of the 8th session of board of directors
of the Company. On 15 August 2017, the Company announced to terminate this restructuring relating
to material assets acquisition, and the stock of the Company commenced trading since 17 August 2017.
On December 4, 2017, the board of directors and the board of supervisors of the company reviewed
and approved the Proposal on the Change of Commitment Period of the First Majority Shareholder of
the Company. Luoniushan Co., Ltd., the company’s first majority shareholder planned for a two-year
extension for the time limit of the company’s restructuring commitment since December 27, 2017, that
is, the deadline for the implementation of the restructuring commitment was changed to December 26,
2019. On December 22, 2017, the company’s fourth extraordinary shareholders’ meeting in 2017 did
not approve the proposal.
On January 31, 2018, the company received the Notice on Planning for Suspension of Major Events
sent by Luoniushan Co., Ltd., the company’s largest shareholder, to plan and prepare the major issues
related to the company. Upon application by the company, the company’s stock (stock short name:
Dadonghai A, Dadonghai B, stock code: 000613, 200613) was suspended since the opening on January
31, 2018. Upon application by the company, the company’s stock resumed trading on February 8, 2018,
and was transferred to the major asset restructuring since the opening on February 14, 2018.
On June 25, 2018, the company held the third interim meeting of the ninth board of directors which
reviewed and approved the Proposal on Terminating the Planning for Major Asset Restructuring. After
careful study, the board of directors of the company decided to terminate the planning for this major
asset restructuring.
2. Concerning assts or project of the Company, which has profit forecast, and reporting period still in
forecasting period, explain reasons of reaching the original profit forecast
□ Applicable √ Not applicable
IV. Non-operational fund occupation from controlling shareholders and its related party
□ Applicable √ Not applicable
No non-operational fund occupation from controlling shareholders and its related party in period.
V. Explanation from Board of Directors, Supervisory Committee and Independent Directors
(if applicable) for “Qualified Opinion” that issued by CPA
□ Applicable √ Not applicable
VI. Particulars about the changes in aspect of accounting policy, estimates and calculation
method compared with the financial report of last year
√Applicable □ Not applicable
1. Change of accounting policy
25
司公限有份股心中游旅海东大南海 2018 文全告报度年年
On 15 June 2018, the Notice of the Ministry of Fiance on Revising and Issuing the Format of General
Corporate Enterprise Financial Statements for 2018 (CK [2018] No.15) was issued by the Ministry of
Fiance, the financial statement format for general corporate enterprise are revised. Main influence for the
above mentioned Revised of the Company are:
Content and reaosn for accounting policy changed Approval Items and amount being affected
procedures
(1) Under the balance sheet: “Note receivable”Resolution of “Note receivable” and “Account receivable” are together listed
and “Account receivable” are together listed as the Board as “Note receivable & account receivable”, current balance
“Note receivable & account receivable”;”Note amounted as 426,434.87 Yuan, while 594,130.89 Yuan
payable” and “Account payable” are together listed listed last period;
as “Note payable & account payable”; ”Interest ”Note payable” and “Account payable” are together listed as
receivable” and “Dividend receivable” are included “Note payable & account payable”, current balance amounted
under the “Other receivables”; “Interest payable” as1, 607,835.81 Yuan while 2,161,172.26 Yuan listed last period.
and “Dividend payable” are included under the “Interest payable” and “Dividend payable” are included under the
“Other payables”;”Fixed assets disposal” is “Other payables”; ”Fixed assets disposal” is included under the
included under the “Fixed assets”; “Engineering “Fixed assets”; “Engineering materials” is included under the
materials” is included under the “Construction in “Construction in progress”; “Special payables” is included under
progress”; “Special payables” is included under the the “Long-term payables”, there were no amount listed in the
“Long-term payables”. The comparative data period and last period
should be adjusted correspondingly
(2)Added item of “R&D expenses” under the profit Resolution of The R&D expenses included under original “Administration
statement, the R&D expenses included under the Board expenses” was re-classified as “R&D expenses” for counting
original “Administration expenses” was independently; no amount occurred in the period and last period
re-classified as “R&D expenses” for counting
independently; added “Including: interest
expenses” and “Interest revenue” under the
financial expenses. The comparative data should be
adjusted correspondingly
(3) Added item of “Change amount of defined Resolution of Added item of “Change amount of defined benefit plans that
benefit plans that carry forward retained earnings”the Board carry forward retained earnings” under the statement of change of
under the statement of change of owners’ equity. owners’ equity, no amount occurred in the period and last period
The comparative data should be adjusted
correspondingly
2. Change of accounting estimates
Major accounting estimates have no changes in the reporting period.
3. Change of calculation method
Major calculation method has no changes in the reporting period
26
司公限有份股心中游旅海东大南海 2018 文全告报度年年
VII. Major accounting errors within reporting period that needs retrospective restatement
□ Applicable √ Not applicable
No major accounting errors within reporting period that needs retrospective restatement for the Company in the period.
VIII. Compare with last year’s financial report; explain changes in consolidation statement’s
scope
√ Applicable □Not applicable
Changes of consolidated scope
Subsidiary included in consolidated scope in the period
Name Comibed by Net assets at Current net profit Establihsed on
period-end
Hainan Wengao Tourism Resources New 999,768.27 -231.73 2018.6.6
Development Co., Ltd. establishment
IX. Appointment and non-reappointment (dismissal) of CPA
Accounting firm appointed
Name of domestic accounting firm BDO CHINA Shu Lun Pan Certified Public Accountants LLP
Remuneration for domestic accounting firm (in 10 thousand
39
Yuan)
Continuous life of auditing service for domestic accounting
8
firm
Name of domestic CPA Li Jinhua, Zhu Meirong
Continuous fixed number of year for the auditing service
First auditing
provided by CPA in domestic CPA Firms
Re-appointed accounting firms in this period
□Yes √No
Appointment of internal control auditing accounting firm, financial consultant or sponsor
√Applicable □ Not applicable
On 1 February 2018, the Company holding the 16th meeting of 8th session of the Board, and decided to appointed
BDO CHINA Shu Lun Pan Certified Public Accountants LLP as the auditing institute of the internal control for
year of 2018 and the decision has been deliberated and approved in general meeting of 2017. During the period,
auditing fee 80,000 Yuan in total has been paid to the institute for internal control auditing.
X. Particular about suspended and delisting after annual report disclosed
□ Applicable √ Not applicable
27
司公限有份股心中游旅海东大南海 2018 文全告报度年年
XI. Bankruptcy reorganization
□ Applicable √ Not applicable
No bankruptcy reorganization for the Company in reporting period
XII. Significant lawsuits and arbitrations of the Company
√Applicable □ Not applicable
Whether
Litigation Execution of
Basic Situation Amount to Form Litigation
(Arbitration) Litigation Date of
of Litigation Involved an (Arbitration) Disclosure Index
Trial Results (Arbitration) Disclosure
(Arbitration) (Yuan) Estimated Progress
and Impact Judgment
Liability
The plaintiff, The first
China Cinda The first instance
Asset instance has judgment
Management been decided. dismissed the
Co., Ltd. Hainan On January 24, claim of the
Branch, sued the 2019, the plaintiff China
defendants, company Cinda Asset
Hainan received the Management
Dadonghai Petition for Co., Ltd. Hainan
Tourism Center Appeal from Announcement on
Branch, and the
(Holdings) Co., the plaintiff Significant Litigation
case acceptance
Ltd. and Sanya Hainan Cinda. (Announcement No.:
fee and property
Yueya Real The plaintiff 2019-001) and
preservation
Estate Hainan Cinda (Announcement No.:
application fee
January 5,
Development refused to 2019-003) published
3,431.17 N were borne by N/A 2019,
Corporation, for accept the first by Securities Times,
China Cinda
January
a financial loan instance Hong Kong
Asset
31, 2019
contract dispute, judgment and Commercial Daily
Management
appealing to appealed to the and
Co., Ltd. Hainan
Hainan Hainan Higher www.cninfo.com.cn.
Branch. The
Dadonghai People’s Court. judgment of the
Tourism Center As of the first instance has
(Holdings) Co., disclosure date no impact on the
Ltd. to repay the of this report, company, and
loan of 5 million the second the second
Yuan and the instance has instance has not
loan interest of not yet been yet been heard.
29,311,700 Yuan heard. Therefore, the
temporarily impact of the
calculated to litigation on the
28
司公限有份股心中游旅海东大南海 2018 文全告报度年年
April 30, 2018, company's
Sanya Yueya current profit
Real Estate and future profit
Development is uncertain.
Corporation
assumes the joint
and several
liability, and the
two defendants
bear litigation
costs. In the
course of the
litigation, the
plaintiff added
the company as a
co-defendant and
required the
court to order the
company to
assume joint and
several liability
for the above
debts of Hainan
Dadonghai
Tourism Center
(Holdings) Co.,
Ltd.
XIII. Penalty and rectification
□ Applicable √ Not applicable
No penalty and rectification for the Company in reporting period.
XIV. Integrity of the company and its controlling shareholders and actual controllers
□ Applicable √ Not applicable
XV. Implementation of the company’s stock incentive plan, employee stock ownership plan or
other employee incentives
□ Applicable √ Not applicable
During the reporting period, the company has no stock incentive plan, employee stock ownership plan or other employee incentives
that have not been implemented.
29
司公限有份股心中游旅海东大南海 2018 文全告报度年年
XVI. Major related transaction
1. Related transaction with routine operation concerned
√Applicable □Not applicable
Whet
Tradi
her
Relat ng
ed over
Propo limit Availab
Type Conte transa the Clearin Date
Relat rtion
of nt of Pricin ction appro g form le
Relati ed in appro of Index of
Related relate relate g amou for
onshi transa simila ved similar
party d d princi nt ved related disclos disclosure
p ction r
transa transa ple (in 10 (in 10 transac market
price transa limite ure
ction ction thous tion
ctions thous price
and d or
Yuan) and
not
Yuan)
(Y/N)
Same Same
as the as the
First
transac transact
Luoniush major Consu Acco Mark Mark
1.23 tion ion
an Co., ity mptio mmod et et 34.55 0 Yes - -
% with with
Ltd. share n ation price price
non-rel non-rel
holder
ated ated
party party
Total -- -- 34.55 -- 0 -- -- -- -- --
Detail of sales return with major
N/A
amount involved
Report the actual implementation of
the daily related transactions which
were projected about their total N/A
amount by types during the reporting
period
Reasons for major differences
between trading price and market N/A
reference price
2. Related transactions by assets acquisition and sold
□ Applicable √ Not applicable
No related transactions by assets acquisition and sold for the Company in reporting period
3. Related transactions of mutual investment outside
□ Applicable √ Not applicable
No main related transactions of mutual investment outside for the Company in reporting period
30
司公限有份股心中游旅海东大南海 2018 文全告报度年年
4. Contact of related credit and debt
□ Applicable √ Not applicable
No contact of related credit or debt for the Company in the reporting period
5. Other significant related transactions
□ Applicable √ Not applicable
The company had no other significant related transactions in reporting period.
XVII. Significant contract and implementations
1. Trusteeship, contract and leasing
(1) Trusteeship
□ Applicable √ Not applicable
No trusteeship for the Company in reporting period
(2) Contract
□ Applicable √ Not applicable
No contract for the Company in reporting period
(3) Leasing
√Applicable □ Not applicable
Note of leasing
Item Tenant Lease life Term of lease
B/F of the Hotel Ma Ming (Hainan Hangpai Food Co., 5 years 2016-01-01 to 2020-12-31
Ltd. )
Shopping mall –B/F Xu Jipeng 3 years 2016-11-15 to 2019-11-14
A/F ground floor Chen Junwei 3 years 2016-03-01 to 2019-02-28
Seaside stall and wood Sanya Leda Food Management Co., 5 years 2018-01-01 to 2022-12-31
house Ltd.
Seaside locker room Zhong Zhengao 3 years 2016-12-01 to 2019-11-30
Multi-functional meeting Sanya Haolide International Travel 5 years 2017-10-01 to 2022-09-30
room Agency Co., Ltd.
Gains/losses to the Company from projects that reached over 10% in total profit of the Company in reporting period
√Applicable □ Not applicable
Name Name of the Leasing Leasing Lease Lease Leasin Basis The Wheth Associat
of lessor leasing party assets assets start termina g for impact of er be ion
31
司公限有份股心中游旅海东大南海 2018 文全告报度年年
involved date tion incom deter leasing related relation
in the date e minin income on transa
amount (in (in 10 g the the ctions
10 thousa leasin company
thousand nd g
Yuan) Yuan) inco
me
The Ma Ming B/F
(Hainan restauran 2016-01 2020-1 Contr Increase
Compan 1,886 75.6 No N/A
Hangpai Food t in first -01 2-31 act income
y Co., Ltd. ) floor
The Sanya Leda Seaside
Food stall and 2018-01 2022-1 Contr Increase
Compan 653 145 No N/A
Management wood -01 2-31 act income
y Co., Ltd. house
The
Seaside Contr
Zhong 2016-12 2019-11 Increase
Compan locker 10 36 No N/A
Zhengao -01 -30 act income
y room
Sanya
Haolide Multi-fu
The
International nctional 2017-10 2022-0 Contr Increase
Compan 190 30 No N/A
Travel meeting -01 9-30 act income
y
Agency Co., room
Ltd.
2. Major Guarantee
□Applicable √ Not applicable
The Company had no guarantee in the reporting period.
(1) Guarantee
Nil
(2) Guarantee outside against the regulation
□ Applicable √ Not applicable
3. Entrust others to cash asset management
(1) Trust financing
□ Applicable √ Not applicable
The Company had no trust financing in the reporting period.
32
司公限有份股心中游旅海东大南海 2018 文全告报度年年
(2) Entrusted loans
□ Applicable √ Not applicable
The company had no entrusted loans in the reporting period.
4. Other material contracts
□ Applicable √ Not applicable
No other material contracts for the Company in reporting period
XVIII. Social responsibility
1. Social responsibilities
Nil
2. Execution of social responsibility of targeted poverty alleviation
(1) Precision poverty alleviation program
(2) Annual precision poverty alleviation
(3) Accuracy of poverty alleviation
Nil
(4) Follow-up targeted poverty alleviation plans
Nil
Listed company and its subsidiary belongs to the key pollution enterprise listed by Department of Environmental Protection
No
The Company mainly engaged in the hotel accommodation and catering services which has less garbage and small sewage discharge,
and we has strictly waste and sewage disposal rules according to the requirement of relevant government
XIX. Explanation on other significant events
√Applicable □ Not applicable
1. The Lawyer’s Letter received by the Company 1: by preliminary accounting from Sanya Power Bureau, the
10313373 Kwh electricity was understated under the name of South China Hotel from July 2006 to April 2016.
Found more in “Notice of Lawyer’s Letter received by Hainan Dadonghai Tourism Center (Holdings) Co., Ltd.”
(Notice No.: 2016-016) released on Securities Times, Hong Kong Commercial Daily and Juchao Website dated 31
May 2016. The Company is communicated and negotiates with Sanya Power Bureau in the above mentioned
event without negotiation results so far.
33
司公限有份股心中游旅海东大南海 2018 文全告报度年年
2. The company received the Lawyer’s Letter: Main contents of the Lawyer’s Letter: the financial loan dispute
between the company’s joint stock company, Hainan Dadonghai Tourism Center (Holdings) Co., Ltd. (hereinafter
referred to as “Dadonghai Holdings”), and its original creditor, China Construction Bank Sanya Branch
(hereinafter referred to as “CCB Sanya Branch”), its new creditor China Cinda Asset Management Co., Ltd.
Hainan Branch (hereinafter referred to as “Hainan Cinda”) currently makes the right to recover, the two debts
include the principal of 1.1 million Yuan and interest of 5,598,300 Yuan temporarily calculated to April 30, 2018,
totaling 6,698,300 Yuan and the principal of 5 million Yuan and interest of 29,311,700 Yuan temporarily
calculated to April 30, 2018, totaling 34,311,700 Yuan. If Dadonghai Holdings is incapable of handling the
liquidation, Hainan Cinda will claim that the company should be jointly and severally liable for the above debts of
Dadonghai Holdings. For details, please refer to the Announcement of Hainan Dadonghai Tourism Center
(Holdings) Co., Ltd. on Receiving the Lawyer’s Letter that the company published on Securities Times, Hong
Kong Commercial Daily and www.cninfo.com.cn on August 10, 2018 (Announcement No.: 2018-052). For the
above-mentioned case of principal of 5 million Yuan, the court dismissed the plaintiff’s claim in the first instance,
but the plaintiff Hainan Cinda refused to accept the first instance judgment and appealed to Hainan Higher
People’s Court, and the second instance has not yet been heard as of the disclosure date of this report. For the case
of principal of 1.1 million Yuan, it is reported that the plaintiff has applied to the court for withdrawal of the
lawsuit.
3. Significant litigation: The plaintiff, China Cinda Asset Management Co., Ltd. Hainan Branch, sued the
defendants, Hainan Dadonghai Tourism Center (Holdings) Co., Ltd. and Sanya Yueya Real Estate Development
Corporation, for a financial loan contract dispute, appealing to Hainan Dadonghai Tourism Center (Holdings) Co.,
Ltd. to repay the loan of 5 million Yuan and the loan interest of 29,311,700 Yuan temporarily calculated to April
30, 2018, Sanya Yueya Real Estate Development Corporation assumes the joint and several liability, and the two
defendants bear litigation costs.
In the course of the litigation, the plaintiff added the company as a co-defendant and required the court to order
the company to assume joint and several liability for the above debts of Hainan Dadonghai Tourism Center
(Holdings) Co., Ltd. For details, please refer to the Announcement on the Significant Litigation that the company
published on Securities Times, Hong Kong Commercial Daily and www.cninfo.com.cn on November 22, 2018
(Announcement No.: 2018-061).
On January 3, 2019, the company received the Civil Judgment (2018) No.Q02MC76 from the Intermediate
People’s Court Sanya. The judgment dismissed the claim of the plaintiff China Cinda Asset Management Co., Ltd.
Hainan Branch, and the case acceptance fee and property preservation application fee were borne by China Cinda
Asset Management Co., Ltd. Hainan Branch. For details, please refer to the Announcement on the Progress of
Significant Litigation that the company published on Securities Times, Hong Kong Commercial Daily and
www.cninfo.com.cn on January 5, 2019 (Announcement No.: 2019-001). On January 24, 2019, the company
received the Petition for Appeal from the plaintiff Hainan Cinda, the plaintiff Hainan Cinda refused to accept the
first instance judgment and appealed to Hainan Higher People’s Court, for details, please refer to the
Announcement on the Progress of Significant Litigation that the company published on Securities Times, Hong
Kong Commercial Daily and www.cninfo.com.cn on January 31, 2019 (Announcement No.: 2019-003), and the
second instance has not yet been heard as of the disclosure date of this report.
XX. Significant event of subsidiary of the Company
□ Applicable √ Not applicable
34
司公限有份股心中游旅海东大南海 2018 文全告报度年年
Section VI. Particulars about Changes in Shares and Shareholders
I. Changes in Share Capital
1. Changes in Share Capital
In Share
Before the Change Increase/Decrease in the Change (+, -) After the Change
Capit
B alizat
New
on ion
share
Proporti us of Subtota
Amount s Others Amount Proportion
on sh publi l
issue
ar c
d
es reser
ve
I. Restricted shares 10,454,400 2.87% 0 0 10,454,400 2.87%
1. State-owned shares
2. State-owned corporate
2,323,200 0.64% 0 0 2,323,200 0.64%
shares
8,131,200 2.23% 8,131,200 2.23%
3. Other domestic shares
Including: Domestic
7,821,000 2.15% 79,200 79,200 7,900,200 2.17%
legal person shares
Domestic natural person
310,200 0.09% -79,200 -79,200 231,000 0.06%
shares
II. Unrestricted shares 353,645,600 97.13% 0 0 353,645,600 97.13%
265,645,600 72.96% 0 0 265,645,600 72.96%
1. RMB common shares
2.Domestically listed
88,000,000 24.17% 0 0 88,000,000 24.17%
foreign shares
III. Total shares 364,100,000 100.00% 0 0 364,100,000 100.00%
Reasons for share changed
√ Applicable □ Not applicable
And during the follow-up process of non-tradable shares reform, relevant shares are released in line with relevant
regulations and some of the shareholders are repaying the advance money for another, thus the share structure of
the Company changed in the Period while total shares remain the same.
Approval of share changed
□ Applicable √ Not applicable
Ownership transfer of share changes
35
司公限有份股心中游旅海东大南海 2018 文全告报度年年
□ Applicable √ Not applicable
Implementation progress of the share repurchases
□ Applicable √ Not applicable
Implementation progress of the reduction of repurchases shares by centralized bidding
□ Applicable √ Not applicable
Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to common
shareholders of Company in latest year and period
□ Applicable √ Not applicable
Other information necessary to disclose or need to disclosed under requirement from security regulators
□ Applicable √ Not applicable
2. Changes of restricted shares
√ Applicable □ Not applicable
In Share
Numbe Number
Number of
Number of r of of new
shares
shares shares shares Restriction
Shareholders’ name restricted Released date
restricted at release restricte reasons
at
Period-begin d in the d in the
Period-end
Year Year
Legal
After remove
commitment
Zheng Youxiong 46,200 0 0 46,200 restricted procedures
in share
complete
reform
Legal
After remove
commitment
Xiao Tiefeng 132,000 0 -39,600 92,400 restricted procedures
in share
complete
reform
Legal
After remove
commitment
Sanya Real Estate Valuation Agent 924,000 0 0 924,000 restricted procedures
in share
complete
reform
Legal
After remove
Hainan Hong Kong-Macao International commitment
924,000 0 0 924,000 restricted procedures
Trade Development Co., Ltd. in share
complete
reform
Legal
After remove
Haikou Dongfang Urban credit commitment
924,000 0 0 924,000 restricted procedures
Cooperative in share
complete
reform
Hainan Branch of Bank of
924,000 0 0 924,000 Legal After remove
Communications Co., Ltd.
36
司公限有份股心中游旅海东大南海 2018 文全告报度年年
commitment restricted procedures
in share complete
reform
Legal
After remove
commitment
Shenyang Jin’an Industrial Corporation 831,600 0 0 831,600 restricted procedures
in share
complete
reform
Legal
After remove
commitment
Sanya Wangli Building Materials Sales 92,400 0 0 92,400 restricted procedures
in share
complete
reform
Legal
After remove
Guangzhou Company of Hainan commitment
660,000 0 0 660,000 restricted procedures
International Investment Co., Ltd. in share
complete
reform
Legal
After remove
Southern Industrial and Trading commitment
660,000 0 0 660,000 restricted procedures
Corporation in share
complete
reform
Legal
After remove
commitment
Guangzhou Dongzhan Industrial Co. LTD 924,000 0 0 924,000 restricted procedures
in share
complete
reform
Legal
After remove
commitment
Sanya Zhongxing Development Co., Ltd. 2,541,000 0 0 2,541,000 restricted procedures
in share
complete
reform
Legal
After remove
commitment
Hainan Dadonghai Tourism Co. 739,200 0 0 739,200 restricted procedures
in share
complete
reform
Legal
After remove
commitment
Ma Xiaoping 132,000 0 -39,600 92,400 restricted procedures
in share
complete
reform
Legal
After remove
Yangpu Tongrong Investment commitment
0 0 79,200 79,200 restricted procedures
Management Consulting Co., Ltd. in share
complete
reform
Total 10,454,400 0 0 10,454,400 -- --
37
司公限有份股心中游旅海东大南海 2018 文全告报度年年
II. Securities issuance and listing
1. Security offering (without preferred stock) in reporting Period
□ Applicable √ Not applicable
2. Changes of total shares and shareholders structure as well as explanation on changes of assets and
liability structure
□ Applicable √ Not applicable
3. Existing internal staff shares
□ Applicable √ Not applicable
III. Particulars about shareholder and actual controller of the Company
1. Amount of shareholders of the Company and particulars about shares holding
In Share
Total
Total preference
common Total preference
shareholders with
stock shareholders
Total common stock voting rights
shareholders with voting
shareholders in 44,014 40,589 0 recovered at end 0
at end of last rights recovered
reporting period-end of last month
month before at end of
before annual
annual report reporting period
report disclosed
disclosed
Particulars about shares held above 5% by shareholders or top ten shareholders
Number of share
Propo Number of Amount of Amount of
Changes in pledged/frozen
rtion shares held restricted un-restricte
Nature of
Full name of Shareholders of report State
shareholder at shares d shares
shares
period of Amount
held period-end held held
share
Domestic non
17.55 Pled
Luoniushan Co., Ltd. state-owned 63,885,980 0 0 63,885,980 63,885,980
% ged
corporate
Domestic nature Pled
Yang Meiqin 4.47% 16,279,028 16,279,028 0 16,279,028 15,910,000
person ged
Domestic nature
Pan Anjie 4.01% 14,593,598 14,593,598 0 14,593,598
person
Hainan Ya’an Residence Property Domestic non 2.25% 8,205,800 0 0 8,205,800
38
司公限有份股心中游旅海东大南海 2018 文全告报度年年
Service Co., Ltd. state-owned
corporate
Domestic nature
Chen Jinlian 2.13% 7,766,400 7,766,400 0 7,766,400
person
HGNH International Asset
Management Co., Ltd – Foreign corporate 1.23% 4,495,902 -3,831,600 0 4,495,902
customer deposit
Domestic nature Pled
Pan Aiping 1.13% 4,110,738 4,110,738 0 4,110,738 4,090,000
person ged
Domestic nature
Zhang Fengxiu 1.07% 3,901,372 0 0 3,901,372
person
China Investment Securities
(HK) Co., Ld. – customer Foreign corporate 0.99% 3,622,300 -1,100,000 0 3,622,300
deposit
Feishang Group Limited Foreign corporate 0.86% 3,122,800 3,122,800 0 3,122,800
Strategy investors or general legal person becomes
N/A
top 10 shareholders due to rights issued
Among the above shareholders, Hainan Ya’an Residence Property Service Co., Ltd. is
the wholly-owned subsidiary of Luoniushan Co., Ltd; Yang Meiqin, Pan Anjie, Chen
Explanation on associated relationship or accordant Jinlian and Pan Aiping are the persons acting in concert; the Company is unknown
action among the aforesaid shareholders whether there exists associated relationship or belongs to the consistent actor regulated
by the Management Measure of Information Disclosure on Change of Shareholding for
Listed Company among the other shareholders.
Particular about top ten shareholders with un-restrict shares held
Amount of Type of shares
Shareholders’ name un-restrict shares
Type Amount
held at Period-end
Luoniushan Co., Ltd. 63,885,980 RMB common share 63,885,980
Yang Meiqin 16,279,028 Domestically listed foreign share 16,279,028
Pan Anjie 14,593,598 Domestically listed foreign share 14,593,598
Hainan Ya An Ju Property Services Co., Ltd. 8,205,800 RMB common share 8,205,800
Chen Jinlian 7,766,400 Domestically listed foreign share 7,766,400
HGNH International Asset Management Co., Ltd –
4,495,902 RMB common share 4,495,902
customer deposit
Pan Aiping 4,110,738 Domestically listed foreign share 4,110,738
Zhang Fengxiu 3,901,372 RMB common share 3,901,372
China Investment Securities (HK) Co., Ld. –
3,622,300 RMB common share 3,622,300
customer deposit
39
司公限有份股心中游旅海东大南海 2018 文全告报度年年
Feishang Group Limited 3,122,800 Domestically listed foreign share 3,122,800
Among the above shareholders, Hainan Ya’an Residence Property Service Co., Ltd. is the
Expiation on associated relationship or consistent wholly-owned subsidiary of Luoniushan Co., Ltd. Yang Meiqin, Pan Anjie, Chen Jinlian
actors within the top 10 un-restrict shareholders and and Pan Aiping are the persons acting in concert; the Company is unknown whether there
between top 10 un-restrict shareholders and top 10 exists associated relationship or belongs to the consistent actor regulated by the
shareholders Management Measure of Information Disclosure on Change of Shareholding for Listed
Company among the other shareholders.
Explanation on shareholders involving margin
business about top ten common stock shareholders N/A
with un-restrict shares held
Whether top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held have a buy-back
agreement dealing in reporting period
□ Yes √ No
The top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held of the Company have no
buy-back agreement dealing in reporting period.
2. Controlling shareholder of the Company
Nature of controlling shareholders: community collective holding
Type of controlling shareholders: legal person
Legal
person/pers
Date of Organization
Controlling shareholders on in Main operation business
foundation code
charge of
the unit
Planting and breeding industry; initiating industry;
real estate development and management; building
decoration works; sales of agricultural and animal
by-products, aquatic products and feed
processing(operates only for branch with voucher);
Unified social
machinery and automobile and motorcycle parts,
1987-12-1 credit code electronic products, metal materials (except for the
Luoniushan Co., Ltd. Xu Zili
9 914600002840 monopoly), chemical products (except for the
monopoly), household appliances, modern office
89747P
supplies, stationery, daily necessities, building
materials, sales of agricultural and native products;
the development and construction of trading market;
leasing services; warehousing services; collecting and
remitting water and electricity costs.
Equity of other
domestic/oversea listed
Found more details in full text of Annual Report 2018 of Luoniushan Co., Ltd.(Short form of the
company control by
stock: Luoniushan, Stock code: 000735)
controlling shareholder as well
as stock-joint in report period
Changes of controlling shareholders in reporting period
□ Applicable √ Not applicable
The Company had no changes of controlling shareholders in reporting period
40
司公限有份股心中游旅海东大南海 2018 文全告报度年年
3. Actual controller of the Company
Nature of actual controller: domestic natural person
Type of actual controller: natural person
Relationship with the Whether obtained right of residence of other
Name of actual controller Nationality
actual controller countries or regions or not
Xu Zili Xu Zili himself P.R.C No
Xu Zili, male, was born in 1966, is a senior engineer with a master degree. He successively
served as Vice President of Hubei Huangshi Mine Bureau Machinery; General Manager of
Haikou Animal Husbandry Machinery Engineering Co., Ltd.; Chairman of Tianjin Baodi
Main profession and title Agricultural Technology Co., Ltd.; he also served as standing committee of the Haikou 13th
CPPCC; Vice Chairman and General Manager of the Company from August 2006 to November
2011; serves as Chairman of the Company since November 2011; now he takes as the 7th
CPPCC member of Hainan Province.
Listed company in and out of
China controlled in past N/A
decades
Changes of actual controller in reporting period
□ Applicable √ Not applicable
No changes of actual controllers for the Company in reporting period.
Property right and controlling relationship between the actual controller and the Company is as follow:
41
司公限有份股心中游旅海东大南海 2018 文全告报度年年
Actual controller controlling the Company by entrust or other assets management
□ Applicable √ Not applicable
4. Particulars about other legal person shareholders with over 10% shares held
□ Applicable √ Not applicable
5. Limitation and reducing the holdings of shares of controlling shareholders, actual controllers,
restructuring side and other commitment subjects
□ Applicable √ Not applicable
42
司公限有份股心中游旅海东大南海 2018 文全告报度年年
Section VII. Preferred Stock
□ Applicable √ Not applicable
The Company had no preferred stock in the Period.
43
司公限有份股心中游旅海东大南海 2018 文全告报度年年
Section VIII. Particulars about Directors, Supervisors, Senior
Executives and Employees
I. Changes of shares held by directors, supervisors and senior executives
Amou Amou
Share
nt of nt of Share
s held Othe
shares shares s held
at r
increa decrea at
Working Start dated perio chan
End date of perio
Title Sex Age of office sed in sed in
Name status office term d-beg ges
term d-end
this this
in (shar
period period (Shar
(Shar e)
(Share (Share e)
e)
) )
Chairman, Post-leavi
Li Yuanbin M 68 2001-10-25 2018-02-27 0 0 0 0 0
General Manager ng
Independent Post-leavi
Zhao Man F 66 2014-05-22 2018-02-27 0 0 0 0 0
Director ng
Leng Independent Post-leavi
M 63 2014-05-22 2018-02-27 0 0 0 0 0
Mingquan Director ng
Post-leavi
Liu Juntao Director M 50 2002-06-16 2018-02-27 0 0 0 0 0
ng
Wang Post-leavi
Supervisor F 52 2011-06-16 2018-02-27 0 0 0 0 0
Jialing ng
Yuan Chairman/Gener Currently
M 55 2018-02-28 2021-02-27 0 0 0 0 0
Xiaoping al Manager in office
Tang Independent Currently
M 54 2014-05-22 2021-02-27 0 0 0 0 0
Guoping Director in office
Independent Currently
Wu Tao M 40 2018-02-28 2021-02-27 0 0 0 0 0
Director in office
Tang Currently
Director M 39 2018-02-28 2021-02-27 0 0 0 0 0
Shanrong in office
Chairman of
Huang Currently
supervisory M 49 2002-06-16 2021-02-27 0 0 0 0 0
Wencai in office
committee
Currently
ZhangXuli Supervisor F 35 2018-02-28 2021-02-27 0 0 0 0 0
in office
44
司公限有份股心中游旅海东大南海 2018 文全告报度年年
Currently
Chen Gang Supervisor M 52 2016-07-29 2021-02-27 0 0 0 0 0
in office
Person in charge Currently
Fu Zongren M 51 2015-04-15 2021-02-27 0 0 0 0 0
of finance in office
Deputy General Currently
Ding Qin M 47 2018-8-10 2021-02-27 0 0 0 0 0
Manager in office
Director/Vice
Wang president Currently
F 42 2008-04-27 2021-02-27 0 0 0 0 0
Hongjuan /secretary of the in office
Board
Total -- -- -- -- -- -- 0 0 0 0 0
II. Changes of directors, supervisors and senior executives
√ Applicable□ Not applicable
Name Title Type Date Reasons
Chairman/General
Li Yuanbin Post-leaving for office-term expired 2018-02-27 Office-term expired
Manager
Independent
Zhao Man Post-leaving for office-term expired 2018-02-27 Office-term expired
Director
Independent
Leng Mingquan Post-leaving for office-term expired 2018-02-27 Office-term expired
Director
Liu Juntao Director Post-leaving for office-term expired 2018-02-27 Office-term expired
Wang Jialing Supervisor Post-leaving for office-term expired 2018-02-27 Office-term expired
III. Post-holding
Professional background, major working experience and present main responsibilities of directors, supervisors and senior executive
in the Company
Director
Mr. Yuan Xiaoping, was born in July 1963, Han nationality, holds the college degree, the Chinese CPA, senior
accountant, the auditor and he is the member of communist party of China. He was appointed as the system
accounting and deputy director in the supply & marketing cooperative of Nanchong Sichuan; he took as the
project manager of Hainan Congxin Accounting Firm and assistant of GM and CFO in Luoniushan Company.
He also served as the director, CFO, Deputy General Manager, the acting GM, deputy chairman and secretary of
the party committee in Haikou Water Group Co., Ltd. as well as the director of Hainan Yedao Co., Ltd. from 2006
to 2017. Mr. Yuan serves as Chainman and GM of the Company since March 2018.
Mr. Tang Shanrong, was born in November 1979, holds the Master degree, a senior engineer. He was appointed
45
司公限有份股心中游旅海东大南海 2018 文全告报度年年
as secretary of the president in Luoniushan Co., Ltd., the General Manager of Hainan Luoniushan Environment
Protection Co., Ltd, the Chairman of Hainan Luoniushan Agricultural Sci-Tech Co., Ltd., the assistant president
and GM of the administration department in Luoniushan Co., Ltd. Mr. Tang serves as vice president of
Luoniushan Co., Ltd. since June 2016, at the same time, he is the member of standing committee of the 14th
CPPCC of Haikou, member of the standing committee of the 6th Hainan Youth Federation and director of Haikou
Youth Entrepreneurship & employment promotion Association. He serves as director of the Company since March
2018.
Ms. Wang Hongjuan, was born in Feb. 1976, Han nationality, Undergraduate Degree, an attorney; she served as
representative of securities affairs of the Company since 2004 and serves as secretary of the Board since 2008 and
deputy GM of the Company since 2014. Ms. Wang serves as Director of the Company since 2016.
Independent Director
Mr. Tang Guoping, was born in August 1964, Han nationality, he was graduated from Zhongnan University of
Economics and Law, holds the doctoral degree and he is the accounting professor, doctoral supervisor and Chinese
CPA. He was awarded as the “Master of Accounting” by the Ministry of Finance, the “Outstanding Young Teacher
Funding Program” of the Ministry of Education, the famous teacher of Hubei Province, the young and
middle-aged experts with outstanding contributions in Hubei Province, the academic leaders of the cross-century
discipline of the Ministry of Finance, won the second prize of the Second Humanities and Social Sciences
Research Achievement Award of Colleges and Universities issued by the Ministry of Education. The second prize,
and won the third prize of outstanding teaching achievements issued by the Hubei Provincial People’s
Government and other awards and honors. He used to be the deputy dean of the Accounting School, the director
of the Accounting Master Education Center, the executive vice president of the Graduate School, and the dean of
the MBA College of Zhongnan University of Economics and Law. He is also the head of the second revision
research group for the Accounting Law of the Ministry of Finance, a member of the first session of the ASBE
Advisory Committee of the Ministry of Finance, the director and senior member of the Accounting Society of
China, and the vice chairman of the Environmental Accounting Professional Committee of the Accounting Society
of China. He is the vice chairman of China Association of Chief Financial Officers of Hubei Province and serves
as an independent director of Myhome Real Estate, Lens Technology and Shenzhuangzong. In 2012, he obtained
the independent director qualification certificate and has been an independent director of the company since May
2014.
Mr. Wu Tao, born in September 1978, holds a master’s degree. He used to be the senior manager, business director
and internal audit committee of Guojin Securities Investment Banking Department. From 2011 to 2014, he served
as the deputy general manager and secretary of the board of directors of Shanghai RENLE Science & Technology
Co., Ltd. Since 2014, he has been serving as the vice chairman and vice president of Shanghai Huantao
Investment Management Co., Ltd. In 2017, he obtained an independent director qualification certificate. Since
March 2018, he has been serving as an independent director of the company.
46
司公限有份股心中游旅海东大南海 2018 文全告报度年年
Supervisor
Mr. Huang Wencai: was born in Jan. 1969, undergraduate degree, Mr. Huang once held the position of vice
director of Haikou meat association factory, director of Haikou food Co. Ltd. and assistant of general manager of
Haikou food Co. Ltd., deputy GM of Haikou Luoniushan Food Processing Co., Ltd. and currently held the post of
deputy GM of Hainan Luoniushan Meat Co., Ltd.; he held the position of Chairman of Supervisory Committee of
the Company since 2002.
Ms. Zhang Xuli, born in November 1983, holds a master’s degree, is a certified management consultant and an
intermediate economist. From 2009 to 2015, she served as a senior consultant and project manager of Beijing
Industrial Development Consulting Co., Ltd. Since December 2015, she has been serving as the investment
director and person in charge of Luoniushan (Beijing) Investment Co., Ltd. Since March 2018, she has been
serving as a shareholder supervisor of the company.
Mr. Chen Gang, was born in September 1966, the Han nationality, a junior accountant. He worked as accountant
in Hainan Sanya Phoenix Co., Ltd. from February 1988 to June 1989, worked as chief accountant in Sanya
Hardware Electrical Mall from July 1989 to September 1992, and serves as cost accounting, chief accountant,
deputy GM and GM of the financial dept. in the Company since October 1992. He serves as staff supervisor of the
Company since August 2016.
Senior executives
Mr. Ding Qin, born in May 1971, Han nationality, holds a master’s degree, studied in Central South University
from 1988 to 1992 and graduated as a bachelor of industrial trade, and studied and graduated as a postgraduate
from Hainan University from 2005 to 2008, majoring in agricultural extension. From 1998 to 2006, he served as
the general manager at Hainan Huacui Palm Garden Co., Ltd.; from 2010 to 2013, he served as the executive
general manager of the fixed income department of Heaven-Sent Capital Management Group Co., Ltd (Shanghai);
from 2013 to 2017, he was appointed as the general manager of Wuhan East Lake Innovation Investment
Management Co., Ltd.; and he serves as the assistant general manager of the company since April 2018. Since
August 2018, he serves as the deputy general manager of the company.
Mr. Fu Zongren, was born in February 1967, intermediate accountant, served as financial manager of the
Company, financial controller of Sanya Yalong Bay Universal Resort, and general manager of Financial
Management Center of Hainan Sunup Group, and serves as the financial administrator of the Company since
April 2015.
Post-holding in shareholder’s unit
√ Applicable□ Not applicable
47
司公限有份股心中游旅海东大南海 2018 文全告报度年年
Whether
obtained
Position in
Start dated of office End date of office remuneration
Name Shareholder’s unit shareholder’s
term term from
unit
shareholder’s unit
(Y/N)
Tang Shanrong Luoniushan Co., Ltd. Vice president 2016-06-01 2019-5-31 Y
Post-holding in other unit
□ Applicable√ Not applicable
Punishment of securities regulatory authority in recent three years to the company’s current and outgoing directors, supervisors and
senior management during the reporting period
□ Applicable√ Not applicable
IV. Remuneration for directors, supervisors and senior executives
Decision-making procedures, recognition basis and payment for directors, supervisors and senior executives
1. Pursuant to the Company's Articles of Association, the pay of directors, supervisor personnel are approved by
general meeting after the review of the board of directors and board of supervisors respectively; the pay of senior
management is approved by the board. Directors, supervisors and senior managers get their payment
corresponding to their post provided by the general meeting and the board meeting.
2. In line with performance of their duties, directors, independent directors and supervisors should receive the
reimbursement from the Company on travel expense and Articles of Association implementation expense.
Remuneration for directors, supervisors and senior executives in reporting period
In 10 thousand Yuan
Whether
Total remuneration obtained
Se A Post-holding obtained from the remuneration
Name Title
x ge status Company (before from related
taxes) party of the
Company (Y/N)
Currently in
Yuan Xiaoping Chairman/General Manager M 55 43 N
office
Currently in
Tang Shanrong Director M 39 0 N
office
Director/Vice president Currently in
Wang Hongjuan F 42 37.45 N
/secretary of the Board office
Currently in
Tang Guoping Independent Director M 54 0.8 N
office
48
司公限有份股心中游旅海东大南海 2018 文全告报度年年
Currently in
Wu Tao Independent Director M 40 0 N
office
Chairman of supervisory Currently in
Huang Wencai M 49 0.4 N
committee office
Currently in
ZhangXuli Supervisor F 35 0 N
office
Currently in
Chen Gang Supervisor M 52 7.6 N
office
Currently in
Fu Zongren Person in charge of finance M 51 31.25 N
office
Currently in
Ding Qin Vice president M 47 23.4 N
office
Li Yuanbin Chairman/General Manager M 68 Post-leaving 15.18 N
Zhao Man Independent Director F 66 Post-leaving 0.8 N
Leng Mingquan Independent Director M 63 Post-leaving 0.8 N
Liu Juntao Director M 50 Post-leaving 0.8 N
Wang Jialing Supervisor F 52 Post-leaving 1.54 N
Total -- -- -- -- 163.02 --
Delegated equity incentive for directors, supervisors and senior executives in reporting period
□ Applicable√ Not applicable
V. Particulars of workforce
1. Number of staff, professional composition and education background
The number of current employees of parent company (people) 143
The number of current employees of main subsidiaries (people) 0
Total number of current employees (people) 143
The total number of current employees to receive pay (people) 143
The total number of retired staff and workers that the parent
0
company and main subsidiaries need to bear the costs (people)
Professional composition
Category of professional composition Number of professional composition (people)
Production staff 78
Salesman 6
Technical staff 22
Financial staff 12
49
司公限有份股心中游旅海东大南海 2018 文全告报度年年
Administrative staff 25
Total 143
Education background
Category of education Number (people)
Graduate student 1
Undergraduate 8
Junior college above 30
High shool and below 104
Total 143
2. Remuneration policy
The compensation of company’s employees includes wages, bonuses, and benefits, which take the principle of
distributing according to the work, giving priority to efficiency and taking count of equity simultaneously, wage
increase adapting to the company’s business development and benefits improvement, optimizing the labor
allocation, pay level agreeing with the local average in the same industry. Set or adjust the wage standards in
accordance with the job valuation result, the local pay level in the same industry, the company’s annual operation
target and operational budget, and the individual performance.
3. Training programs
Strengthen the training of senior executives by combining the voluntary organization of training and the external
training, widen the thought, and enhance the decision-making ability and modern operation and management
ability. Strengthen the training of middle management, improve the overall quality of managers, improve the
knowledge structure, and enhance the comprehensive management capability, innovation capability and
implementation capability. Strengthen the training of professional and technical personnel, improve the theoretical
level of technology and professional skills, and enhance the technological innovation, technical transformation
capability. Strengthen the technical training of hotel service staff, constantly improve the professional skills and
service skills of service staff, and enhance the ability to strictly fulfill their responsibilities. Strengthen the cultural
training, improve the cultural level of personnel at all levels, and enhance the overall cultural quality of the staff
team.
4. Labor outsourcing
□ Applicable√ Not applicable
50
司公限有份股心中游旅海东大南海 2018 文全告报度年年
Section IX. Corporate Governance
I. Corporate governance of the Company
During reporting period, the Company further completed governance structure and system, perfected internal
control mechanism and system construction and normalized corporate operation, strictly in accordance with
relative rules and regulations of the Company Law, Securities Law and Listing Rules of Shenzhen Stock
Exchange. Till end of reporting period, governance structure of the Company is basically in line with requirement
of the Governance Rules of Listed Company.
1. During the reporting period, the Company’s general meeting, board meeting and supervisors meeting exercised
the decision rights, execution rights and supervision rights respectively with clear responsibilities, mutual restrict,
operation specification and effective operation. The procedures of meeting holding, proposal review, and
decision-making in these three meetings were in compliance with relevant provisions. The board meeting
comprises strategy and development committee, audit committee, nomination committee, remuneration and
appraisal committee, who carry out smoothly their duties accordingly to their working conditions, providing a
strong support for the board meeting’s major scientific management decision.
2. In strict accordance with the requirements of Rules Governing the Listing of Stock, directors performed its
duties with honest, trust, diligence and independence, protected the legitimate rights and interests of minority
shareholders with loyalty to their interests; Supervisors effectively supervised and checked independent directors,
senior management and their financial situations.
Is there any difference between the actual condition of corporate governance and relevant regulations about corporate governance for
listed company from CSRC?
□Yes √ No
There are no differences between the actual condition of corporate governance and relevant regulations about corporate governance
for listed company from CSRC.
II. Independency of the Company relative to controlling shareholders’ in aspect of businesses,
personnel, assets, organization and finance
Statement of Five Independences between the Company and the Controlling Shareholders
1. Business Independence: the Company business operates independently with integrated structure, and is free
from horizontal competition with controlling shareholders. The controlling shareholders do not intervene the
Company’s operation either directly or indirectly.
2. Personnel Independence, the Company is independent on controlling shareholders in the aspects of labor,
personnel and Remuneration management.
3. Assets Independence: the Company has proprietary rights and control rights on its assets. Controlling
shareholders occupy no assets or funds of the listed company.
4. Institution Independence: the company's board of directors and board of supervisors, managers and other
51
司公限有份股心中游旅海东大南海 2018 文全告报度年年
internal institutions operate independently and manage independently with integrated structures.
5. Financial Independence: the Company has an independent financial sector, and sets up independent accounting
system and financial management system. The Company opens independent bank accounts and pay independent
taxes to laws without controlling shareholders’ intervention.
III. Horizontal competition
□ Applicable√ Not applicable
IV. In the report period, the Company held annual shareholders’ general meeting and
extraordinary shareholders’ general meeting
1. Annual Shareholders’ General Meeting in the report period
Ratio of
Session of investor Date of
Type Date Index of disclosure
meeting participati disclosure
on
The “Resolution Notice of Annual Shareholders’
Annual
General Meeting of 2017” (No.: 2018-016) published
Shareholders
AGM 37.76% 2018-02-27 2018-02-28 on Securities Times, Hong Kong Commercial Daily and
General Meeting
Juchao website (http://www.cninfo.com.cn) dated 28
2017
Feb. 2018
2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore
□ Applicable √ Not applicable
V. Responsibility performance of independent directors
1. The attending of independent directors to Board meetings and general meeting
The attending of independent directors to Board Meeting & general meeting
Times of
Board
Times of Absent the Times of
Indepen meeting Times of
Times of attending the Times of Meeting for the attend the
dent supposed to entrusted
Presence Board Meeting by Absence second time in general
Director attend in the presence
communication a row (Y/N) meeting
report
period
Zhao
1 1 0 0 0 N 0
Man
52
司公限有份股心中游旅海东大南海 2018 文全告报度年年
Leng
Mingqu 1 1 0 0 0 N 0
an
Tang
7 2 5 0 0 N 1
Guoping
Wu Tao 6 1 5 0 0 N 1
Explanation on absent the board meeting for the second time in a row
Nil
2. Objection for relevant events from independent directors
Independent directors come up with objection about Company’s relevant matters
□Yes √No
No objections arising from the independent directors on relevant events of the Company during the Period
3. Other explanation about responsibility performance of independent directors
The opinions from independent directors have been adopted
√Yes □No
Explanation on advice that accepted/not accepted from independent directors
It is suggested that the Company should strengthen the introduction of foreign capital, introduce excellent assets
and diversify the current single business portfolio in addition to focusing on its major operations.
VI. Duty performance of the special committees under the board during the reporting period
The board meeting comprises four special committees, who carry out smoothly their duties accordingly to their
working conditions, providing a strong support for the board meeting’s major scientific management decision.
Each special committee performed their duties as follows:
1. Audit Committee
During the reporting period, the audit committee audited the first quarter and the three quarter financial report of
2018, and the 2018 semi-annual financial report. In the process of annual financial report auditing 2018 process,
audit committee members worked in accordance with the relevant requirements by faithfully performing audit
committee’s responsibilities:
Before the entrance of annual examination certified public accountants, the audit committee members listened to
the management statements of the Company's operating condition in 2018 and the financial status as well as the
report on annual financial report audit work arrangement of 2018, communicated with annual examination
certified public accountants about issues such as personnel structure of the working group, audit plan, risk
judgment, annual audit focus and so on; In early January 2018, in annual report audit process, audit committee
members listened to the work report by annual examination certified public accountants and the company
management; In early February 2018, audit committee members reviewed submitted financial and accounting
reports. The financial and accounting reports audited was formatted strictly to Accounting Standards for Business
53
司公限有份股心中游旅海东大南海 2018 文全告报度年年
Enterprises and Accounting System for Business Enterprises, and this report fairly reflected the Company’s assets,
liabilities, rights and interests and operating situation without significant errors and omissions. The annual audit
report of 2018 by audit institutions was agreed to be submitted to the board.
The Company's board of directors regarded that the external auditors BDO China Shu Lun Pan Certified Public
Accountants LLP faithfully performed the audit responsibility, and suggested to renew as the Company’s annual
financial audit of 2019.
2. Remuneration committee
During the reporting period, the remuneration committee members of the Company board carried out their duties
strictly to relevant regulations, inspected remuneration policies and programs for directors, supervisors and senior
managers, and appraised the performance of directors, supervisors and senior management according to senior
manager remuneration appraisal. By the end of the reporting period, the Company has not implemented option
scheme.
3. Strategy committee
During the reporting period, the board strategy committee put forward valuable opinions on decision-making such
as development planning and investment decisions, thus enhanced the scientific decision-making and core
competitiveness of the Company, improved the Company’s efficiency of major investment decisions and decision
quality.
4. Nomination committee
During the reporting period, in view of the expiration of the term of the directors of the eighth session of the board
of directors, nominated by the company’s largest shareholder Luoniushan Co., Ltd. and deliberated by the eighth
session of the board of directors, the board nomination committee reviewed and nominated Mr. Tang Guoping, Mr.
Wu Tao, Mr. Yuan Xiaoping, Mr. Tang Shanrong and Ms. Wang Hongjuan as candidates for the ninth session of
the board of directors of the company for a term of three years. Among them, Mr. Tang Guoping and Mr. Wu Tao
were candidates for independent directors of the ninth session of the board of directors of the company and were
approved by the company’s 2017 annual general meeting of shareholders.
In view of the expiration of the term of the company’s general manager and other senior executives, the
nomination committee reviewed and agreed to engage Mr. Yuan Xiaoping as the general manager of the company
for a term of three years. Mr. Fu Zongren was reappointed as the company’s financial controller for a period of
three years, and Ms. Wang Hongjuan was reappointed as the company’s deputy general manager and secretary of
the board of directors and securities affairs representative for a period of three years, which was reviewed and
approved by the company’s first extraordinary meeting of the ninth board of directors.
In accordance with the company’s development needs, the nomination committee reviewed and agreed to engage
Ding Qin as the deputy general manager of the company, and the employment period was consistent with the term
of the ninth board of directors of the company, which was also reviewed and approved at the second meeting of
the ninth board of directors of the company.
VII. Works from Supervisory Committee
The Company has risks in reporting period that found in supervisory activity from supervisory committee
□ Yes √ No
Supervisory committee has no objection about supervision events in reporting period
54
司公限有份股心中游旅海东大南海 2018 文全告报度年年
VIII. Examination and incentives of senior management
1. Pursuant to People-oriented Principle, the Company employs outstanding persons in long-term, and admits the
best candidates on the premise of openness, fairness, justice. Those who pass trial comprehensive appraisal and be
nominated by general managers and approved by the board meeting can be employed as senior management of the
Company.
2. The Company adopts a clear appraisal system in which assessment methods are made to the performance and
duty fulfillment of senior management. Assessments are carried out monthly and annually by the same level and
higher level and the results are taken as factors for post lift and rewards and punishment of senior management.
3. The company sets up effective incentive mechanism, including material incentives and spiritual incentives. The
clear rewards and punishments, balance between remuneration and work performance, survival of fittest
encourage senior management to make constantly progress and improve their own comprehensive ability which in
turn help the Company develop rapidly.
IX. Internal Control
1. Details of major defects in IC appraisal report that found in reporting period
□ Yes √ No
2. Self-appraisal Report of Internal Control
Disclosure date of full internal
2019-02-26
control appraisal report
Disclosure index of full internal Relevant information found in Appraisal Report of Internal Control for 2018 published on Juchao
control appraisal report Website dated 26 February 2019
The ratio of the total assets of units
included in the scope of evaluation
accounting for the total assets on 100.00%
the company's consolidated
financial statements
The ratio of the operating income
of units included in the scope of
evaluation accounting for the 100.00%
operating income on the company's
consolidated financial statements
Defects Evaluation Standards
Category Financial Reports Non-financial Reports
Major deficiencies: fraud of directors, Major deficiencies: the company is lack of
supervisors and senior management; material democratic decision-making process; the
Qualitative criteria
misstatements are found in current financial company’s decision-making process leads to
statements by the certified public accountant major mistakes; the company violates the state
55
司公限有份股心中游旅海东大南海 2018 文全告报度年年
but are not found in the process of internal laws and regulations and is severely punished;
control; It’s found that the significant serious brain drain of the company’s senior
internal control deficiencies that had been management personnel and senior technical staff;
discovered and reported to the management frequent negative news on media covering a wide
were not yet corrected within the stipulated range and the negative effects are not eliminated;
time; the audit committee’s supervision has the company’s significant business is lack of
no effect on the company’s external financial system control or systematic-ness is invalid; the
reports and internal control over financial major deficiencies and significant deficiencies of
reporting. the company’s internal controls have not been
rectified and reformed; the company is punished
Significant deficiencies: the selection and by CSRC or warned by stock exchange.
application of accounting policies are not in Significant deficiencies: the company has
accordance with the GAAP; anti-fraud democratic decision-making process which is not
program and control measures have not been complete; the company’s decision-making process
established; the accounting treatment of leads to general mistakes; the company violates
unusual or special transactions has no the enterprise internal regulations which causes
appropriate control mechanisms or have not losses; serious brain drain of the company’s
implemented the control mechanisms and business personnel in key positions; negative
has no appropriate compensatory controls; news on media affecting local areas; the
the control to period-end financial reporting company’s significant business system has
process has one or more deficiencies and deficiencies; the significant deficiencies and
cannot reasonably ensure that the general deficiencies of the company’s internal
organizational financial statements are true controls have not been rectified and reformed
and accurate. General deficiencies: deficiencies that out of the
General deficiencies: deficiencies that out of recognition of major and significant deficiencies
the recognition of major and significant should be recognized as general deficiencies
deficiencies should be recognized as general
deficiencies
Major deficiencies: After considering the
compensating control measures and the
actual deviation rate, the overall impact level
of the deficiency is higher than the
Major deficiencies: direct property loss is more
significance level (10% of the total profit).
than 100000 Yuan ;
Significant deficiencies: After considering
Significant deficiencies: direct property loss
the compensating control measures and the
Quantitative standard ranged from 1 Yuan to 100000 Yuan;
actual deviation rate, the overall impact level
General deficiencies: direct property loss is lower
of the deficiency is lower than the
than 10000 Yuan
significance level (10% of the total profit),
but higher than the generality level (5% of
the total profit).
General deficiencies: After considering the
56
司公限有份股心中游旅海东大南海 2018 文全告报度年年
compensating control measures and the
actual deviation rate, the overall impact level
of the deficiency is lower than the generality
level (5% of the total profit).
Amount of significant defects in
0
financial reports
Amount of significant defects in
0
non-financial reports
Amount of important defects in
0
financial reports
Amount of important defects in
0
non-financial reports
X. Auditing report of internal control
√ Applicable□ Not applicable
Deliberations in Internal Control Audit Report
57
司公限有份股心中游旅海东大南海 2018 文全告报度年年
To All Shareholders of Hainan Dadonghai Tourism Center (Holdings) Co., Ltd.:
In accordance with Audit Guideline for Enterprise Internal Control and relevant requirement of the practicing standards of
Chinese Certified Public Accountant, we audited the effective-ness of the financial report’s internal control for Hainan Dadonghai
Tourism Center (Holdings) Co., Ltd. (the Company) dated 31 December 2018.
I. As for responsibility of internal control
The Company established and improved and implemented internal control effectively pursuit to Basic Norms of Enterprises
Internal Control, Supporting Guidelines for Enterprise Internal Control and Evaluation Guild lines for Enterprises Internal
Control, and board of the director is responsible for evaluating its effectiveness.
II. Auditor’s responsibilities
Our responsibility is to express an opinion on the effectiveness of internal control for the financial statements based on our audit.
And disclosed major deficits of noted internal control without financial statement concerned.
III. Inherent feature of internal control
The internal control has an inherent limitation, and exist mistakes that cannot prevent and being discovered. Moreover, the
internal control might be inappropriate due to the changes of conditions, or fails to follow the controlling policies and procedures,
to speculate future effectiveness of the internal control in line with the auditing result has a certain risks.
IV. Auditing opinion: in our opinion
The Company, in line with Basic Norms of Enterprises Internal Control and relevant regulations, shows an effectiveness internal
control of financial report in all major aspects dated 31 December 2018.
BDO CHINA Shu Lun Pan CPA LLP Certified Public Accountant of China:
Certified Public Accountant of China:
ShanghaiChina 24 February 2019
Disclosure details of audit report of
Disclosed
internal control
Disclosure date of audit report of
2019-02-26
internal control (full-text)
Index of audit report of internal Relevant information found in Self-appraisal Report of Internal Control for 2017
control (full-text) published on Juchao Website dated 26 February 2019.
Opinion type of auditing report of
Standard unqualified
IC
whether the non-financial report
No
had major defects
Carried out modified opinion for internal control audit report from CPA
□Yes √ No
The internal control audit report, issued by CPA, has concerted opinion with self-evaluation report, issued from the Board
√ Yes □ No
58
司公限有份股心中游旅海东大南海 2018 文全告报度年年
Section X. Corporation bonds
Whether or not the Company public offering corporation bonds in stock exchange, which undue or without payment in full at
maturity on the approval date for annual report disclosed
No
59
Section XI. Financial Report
I. Audit report
Type of audit opinion Standard unqualified opinion
Signing date of audit report 2019-02-24
Name of audit institute BDO CHINA Shu Lun Pan Certified Public Accountants LLP
PCPAR [2019] No. ZA10112
Document serial of audit report
Name of the CPA Li Jinhua, Zhu Meirong
Auditor’s Report
To all shareholders of Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd.,
I. Opinion
We have audited the financial statements of Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd. (hereinafter referred to as "the
Company"), which comprise the consolidated and parent Company’s balance sheet of 31 December 2018 and profit statement, and
cash flow statement, and statement on changes of shareholders’ equity for the year ended, and notes to the financial statements for the
year ended.
In our opinion, the attached financial statements are prepared in accordance with the provisions of the Accounting Standings for
Enterprises in all major respects, it fairly reflects the consolidate and parent company’s financial status as of 31 December 2018
under the name of Dadonghai well we the operation results and cash flow for the year of 2018
II. Basis for Our Opinion
We conducted our audit in accordance with the Auditing Standards for Certified Public Accountants in China. Our responsibilities
under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our
report. According to the Code of Ethics for Chinese CPA, we are independent of the Company in accordance with the Code of Ethics
for Chinese CPA and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
III. Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial
statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and
in forming our opinion thereon, and we do not provide a separate opinion on these matters. The key audit matters that we identified
in the audit are as follows:
Key audit mattes Countermeasures
Recognition of room income
The Company had operating For room sales revenue, we understood and evaluated the management's design of internal controls
income of RMB 29,515,600
in sales processes from approval of contracts to the accounting of sales revenue and tested the
in 2018, of which room
income was RMB effectiveness of the implementation of key control points.
22,731,300, accounting for
Via sample inspection of contracts and management interviews, we tested the timing point of
77.01% of operating income.
As income is a key significant risks and remuneration related to room revenue recognition, and thus assessed the
performance indicator of Company's income recognition policies.
Dadonghai Holdings, which
causes intrinsic risks that the In addition, we implemented the following procedures in respect of room revenue by using
income may be recognized in sampling:
an incorrect period or be
manipulated to achieve the (1) Analyze income and gross profit margin in combination with the type of income, and judge
target or expected level, we whether there is any abnormal fluctuation in the income amount in the current period.
identify the room revenue of
Dadonghai Holdings as a key
audit matter. (2) Choose samples from reservation records and check-in records of rooms, check the samples
against the contracts, accounting records, invoice issuance and payment receipts related to the
corresponding sales, and pay special attention to whether the samples before and after the balance
sheet date are included in the correct accounting period to assess whether room revenue is
confirmed during the appropriate period.
(3) With respect to new customers and those bringing large amount of income in the current
period, implement the external confirmation of incurred amounts and the balances, and analyzed the
authenticity thereof in combination with the collection of payments and occupancy situation. At the
same time, inquire the business information of some customers to further confirm the authenticity of
transactions therewith.
IV. Other information
The management of the Company (hereinafter referred to as Managers) is responsible for the other information. The other
information comprises information of the Company's annual report in 2018, but excludes the financial statements and our auditor's
report.
Our opinion on the financial statements does not cover the other information and we do not and will not express any form of
assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in
doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in
the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of this auditor's report, we
conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report
in this regard.
V. Responsibilities of Management and Those Charged with Governance for the Financial Statements
The Company's management is responsible for preparing the financial statements in accordance with the requirements of Accounting
Standards for Business Enterprises to achieve a fair presentation, and for designing, implementing and maintaining internal control
that is necessary to ensure that the financial statements are free from material misstatements, whether due to frauds or errors.
In preparing the financial statements, management of the Company is responsible for assessing the Company's ability to continue as a
going concern, disclosing matters related to going concern and using the going concern basis of accounting unless management either
intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company's financial reporting process.
VI. Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with the audit standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial
statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the
audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for
our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as
fraud may involve collusion, forgery, omissions, misrepresentations, or the override of internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the
circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures
made by management of the Company.
(4) Conclude on the appropriateness of using the going concern assumption by the management of the Company, and conclude,
based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant
doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to
draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future
events or conditions may cause the Company to cease to continue as a going concern.
(5) Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the
financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
(6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the
Company to express an opinion on the financial statements. We in charge of the guidance, supervision and enforcement of the
group’s auditing and bear all liability for the opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and
significant audit matters, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in
the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our
auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.
BDO CHINA Shu Lun Pan Certified Public Accountant of China:
Certified Public Accountants LLP (Engagement partner)
Certified Public Accountant of China:
ShanghaiChina 24 Feburay 2019
II. Financial Statement
Expressed in Renminbi unless otherwise stated
1. Consolidated balance sheet
Prepared by HAINAN DADONGHAI TOURISM CENTER (HOLDINGS) CO., LTD.
2018-12-31
In RMB
Item Closing Balance Opening Balance
Current assets:
Monetary funds 15,364,355.30 9,681,607.16
Settlement funds
Lending funds
Financial assets measured by fair value and with variation reckoned into
current gains/losses
Derivative financial assets
Notes receivable & account receivables 426,434.87 594,130.89
Including: Notes receivable
Accounts receivable 426,434.87 594,130.89
Prepayments 49,530.21
Insurance receivable
Reinsurance receivables
Contract reserve of reinsurance receivable
Other receivables 458,242.73 139,561.29
Including: Interest receivable
Dividends receivable
Purchase restituted finance asset
Inventories 221,390.19 227,005.11
Assets held for sale
Non-current assets maturing within one year 1,173,597.68
Other current assets 1,846,219.79 1,957,863.56
Total current assets 18,316,642.88 13,823,295.90
Non-current assets:
Loans and payments on behalf
Available-for-sale financial assets
Held-to-maturity investments
Long-term receivables
Long-term equity investments
Investment real estate 8,384,480.43 8,859,003.99
Fixed assets 36,497,869.65 39,088,708.83
Construction in progress
Productive biological assets
Oil and natural gas assets
Intangible assets 22,205,249.04 23,017,636.20
Research and development costs
Goodwill
Long-term deferred expenses 2,792,876.07 2,678,016.88
Deferred tax assets
Other non-current assets
Total non-current assets 69,880,475.19 73,643,365.90
Total assets 88,197,118.07 87,466,661.80
Current liabilities
Short-term borrowings
Loan from central bank
Absorbing deposit and interbank deposit
Capital borrowed
Financial liability measured by fair value and with variation reckoned into
current gains/losses
Derivative financial liability
Notes payable & account payable 1,607,835.81 2,161,172.26
Accounts received in advance 1,291,293.05 1,271,174.12
Selling financial asset of repurchase
Commission charge and commission payable
Wage payable 2,841,262.35 2,459,015.93
Taxes payable 450,861.87 539,023.76
Other accounts payable 2,727,483.66 2,411,176.59
Including: Interest payable
Dividend payable
Reinsurance payable
Insurance contract reserve
Security trading of agency
Security sales of agency
Liability held for sale
Non-current liabilities due within 1 year
Other current liabilities
Total current liabilities 8,918,736.74 8,841,562.66
Non-current liabilities:
Long-term loans
Bonds payable
Including: preferred stock
Perpetual capital securities
Long-term account payable
Long-term wages payable
Projected liabilities 1,489,685.04 1,489,685.04
Deferred income
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities 1,489,685.04 1,489,685.04
Total liabilities 10,408,421.78 10,331,247.70
Owners’ equity:
Share capital 364,100,000.00 364,100,000.00
Other equity instrument
Including: preferred stock
Perpetual capital securities
Capital public reserve 54,142,850.01 54,142,850.01
Less: Inventory shares
Other comprehensive income
Reasonable reserve
Surplus reserve
Provision of general risk
Retained profit -340,454,153.72 -341,107,435.91
Total owner’s equity attributable to parent Company 77,788,696.29 77,135,414.10
Minority interests
Total owner’s equity 77,788,696.29 77,135,414.10
Total liabilities and owner’s equity 88,197,118.07 87,466,661.80
Legal Representative: Yuan Xiaoping Accounting Principal:Fu Zongren
Accounting Firm’s Principal: Fu Zongren
2. Balance sheet of parent company
In RMB
Item Closing Balance Opening Balance
Current assets:
Monetary funds 14,864,055.73 9,681,607.16
Financial assets measured by fair value and with variation reckoned into
current gains/losses
Derivative financial assets
Notes receivable & account receivables 426,434.87 594,130.89
Including: Notes receivable
Accounts receivable 426,434.87 594,130.89
Prepayments 49,530.21
Other receivables 458,242.73 139,561.29
Including: Interest receivable
Dividends receivable
Inventories 221,390.19 227,005.11
Assets held for sale
Non-current assets maturing within one year 1,173,597.68
Other current assets 1,846,219.79 1,957,863.56
Total current assets 17,816,343.31 13,823,295.90
Non-current assets:
Available-for-sale financial assets
Held-to-maturity investments
Long-term receivables
Long-term equity investments 1,000,000.00
Investment real estate 8,384,480.43 8,859,003.99
Fixed assets 36,497,869.65 39,088,708.83
Construction in progress
Productive biological assets
Oil and natural gas assets
Intangible assets 22,205,249.04 23,017,636.20
Research and development costs
Goodwill
Long-term deferred expenses 2,792,876.07 2,678,016.88
Deferred tax assets
Other non-current assets
Total non-current assets 70,880,475.19 73,643,365.90
Total assets 88,696,818.50 87,466,661.80
Current liabilities
Short-term borrowings
Financial liability measured by fair value and with variation reckoned into
current gains/losses
Derivative financial liability
Notes payable & accounts payable 1,607,835.81 2,161,172.26
Accounts received in advance 1,291,293.05 1,271,174.12
Wage payable 2,841,262.35 2,459,015.93
Taxes payable 450,861.87 539,023.76
Other accounts payable 3,226,952.36 2,411,176.59
Including: Interest payable
Dividend payable
Liability held for sale
Non-current liabilities due within 1 year
Other current liabilities
Total current liabilities 9,418,205.44 8,841,562.66
Non-current liabilities:
Long-term loans
Bonds payable
Including: preferred stock
Perpetual capital securities
Long-term account payable
Long-term wages payable
Projected liabilities 1,489,685.04 1,489,685.04
Deferred income
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities 1,489,685.04 1,489,685.04
Total liabilities 10,907,890.48 10,331,247.70
Owners’ equity:
Share capital 364,100,000.00 364,100,000.00
Other equity instrument
Including: preferred stock
Perpetual capital securities
Capital public reserve 54,142,850.01 54,142,850.01
Less: Inventory shares
Other comprehensive income
Reasonable reserve
Surplus reserve
Retained profit -340,453,921.99 -341,107,435.91
Total owner’s equity 77,788,928.02 77,135,414.10
Total liabilities and owner’s equity 88,696,818.50 87,466,661.80
Legal Representative: Yuan Xiaoping Accounting Principal:Fu Zongren
Accounting Firm’s Principal: Fu Zongren
3. Consolidated profit statement
In RMB
Item Current Period Last Period
I. Total operating income 29,515,592.33 27,906,564.23
Including: Operating income 29,515,592.33 27,906,564.23
Interest income
Insurance gained
Commission charge and commission income
II. Total operating cost 28,699,246.24 27,127,174.49
Including: Operating cost 11,755,198.10 11,139,919.59
Interest expense
Commission charge and commission expense
Cash surrender value
Net amount of expense of compensation
Net amount of withdrawal of insurance contract reserve
Bonus expense of guarantee slip
Reinsurance expense
Taxes and extras 1,393,881.37 1,434,692.20
Sales expenses 5,619,079.95 5,124,503.55
Administration expenses 10,133,021.97 9,665,525.83
R&D expenses
Financial expenses -188,278.60 -249,176.18
Including: interest expenses
Interest income 232,899.41 291,701.13
Losses of devaluation of asset -13,656.55 11,709.50
Add: other income
Investment income (Loss is listed with “-”) 805,825.24
Including: Investment income on affiliated Company and joint venture
Changing income of fair value(Loss is listed with “-”)
Exchange income (Loss is listed with “-”)
Income on disposal of assets (Loss is listed with “-”)
III. Operating profit (Loss is listed with “-”) 816,346.09 1,585,214.98
Add: Non-operating income 273.00 1,303,800.11
Less: Non-operating expense 163,336.90 30,016.43
IV. Total Profit (Loss is listed with “-”) 653,282.19 2,858,998.66
Less: Income tax
V. Net profit (Net loss is listed with “-”) 653,282.19 2,858,998.66
(i) continuous operating net profit (net loss listed with ‘-”) 653,282.19 2,858,998.66
(ii) termination of net profit (net loss listed with ‘-”)
Net profit attributable to owner’s equity of parent Company 653,282.19 2,858,998.66
Minority shareholders’ gains and losses
VI. Net after-tax of other comprehensive income
Net after-tax of other comprehensive income attributable to owners of parent
company
(I) Other comprehensive income items which will not be reclassified
subsequently to profit of loss
1. Changes of the defined benefit plans that re-measured
2. Other comprehensive income under equity method that cannot be
transfer to gain/loss
(II) Other comprehensive income items which will be reclassified
subsequently to profit or loss
1. Other comprehensive income under equity method that can transfer to
gain/loss
2. 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. Other
Net after-tax of other comprehensive income attributable to minority shareholders
VII. Total comprehensive income 653,282.19 2,858,998.66
Total comprehensive income attributable to owners of parent Company 653,282.19 2,858,998.66
Total comprehensive income attributable to minority shareholders
VIII. Earnings per share:
(i) Basic earnings per share 0.0018 0.0079
(ii) Diluted earnings per share 0.0018 0.0079
As for the enterprise combination under the same control, the net profit achieved by the combined party before consolidation was 0
Yuan in the period while 0 Yuan achieved last period
Legal Representative: Yuan Xiaoping Accounting Principal:Fu Zongren
Accounting Firm’s Principal: Fu Zongren
4. Profit statement of parent Company
In RMB
Item Current Period Last Period
I. O operating income 29,515,592.33 27,906,564.23
Less: Operating cost 11,755,198.10 11,139,919.59
Taxes and extras 1,393,596.37 1,434,692.20
Sales expenses 5,619,079.95 5,124,503.55
Administration expenses 10,132,404.17 9,665,525.83
R&D expenses
Financial expenses -187,607.53 -249,176.18
Including: interest expenses
Interest income 232,116.34 291,701.13
Losses of devaluation of asset -13,656.55 11,709.50
Add: other income
Investment income (Loss is listed with “-”) 805,825.24
Including: Investment income on affiliated Company and joint
venture
Changing income of fair value(Loss is listed with “-”)
Income on disposal of assets (Loss is listed with “-”)
II. Operating profit (Loss is listed with “-”) 816,577.82 1,585,214.98
Add: Non-operating income 273.00 1,303,800.11
Less: Non-operating expense 163,336.90 30,016.43
III. Total Profit (Loss is listed with “-”) 653,513.92 2,858,998.66
Less: Income tax
IV. Net profit (Net loss is listed with “-”) 653,513.92 2,858,998.66
(i) continuous operating net profit (net loss listed with ‘-”) 653,513.92 2,858,998.66
(ii) termination of net profit (net loss listed with ‘-”)
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 of the defined benefit plans that re-measured
2. Other comprehensive income under equity method that cannot
be transfer to gain/loss
(II) Other comprehensive income items which will be reclassified
subsequently to profit or loss
1. Other comprehensive income under equity method that can
transfer to gain/loss
2. 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. Other
VI. Total comprehensive income 653,513.92 2,858,998.66
VII. Earnings per share:
(i) Basic earnings per share 0.0018 0.0079
(ii) Diluted earnings per share 0.0018 0.0079
Legal Representative: Yuan Xiaoping Accounting Principal:Fu Zongren
Accounting Firm’s Principal: Fu Zongren
5. Consolidated cash flow statement
In RMB
Item Current Period Last Period
I. Cash flows arising from operating activities:
Cash received from selling commodities and providing labor services 31,632,073.56 29,475,377.07
Net increase of customer deposit and interbank deposit
Net increase of loan from central bank
Net increase of capital borrowed from other financial institution
Cash received from original insurance contract fee
Net cash received from reinsurance business
Insured savings and net increase of investment
Net increase of amount from disposal financial assets that measured by fair value
and with variation reckoned into current gains/losses
Cash received from interest, commission charge and commission
Net increase of capital borrowed
Net increase of returned business capital
Write-back of tax received
Other cash received concerning operating activities 1,966,271.29 1,082,486.86
Subtotal of cash inflow arising from operating activities 33,598,344.85 30,557,863.93
Cash paid for purchasing commodities and receiving labor service 9,249,110.15 8,848,190.06
Net increase of customer loans and advances
Net increase of deposits in central bank and inter-bank
Cash paid for original insurance contract compensation
Cash paid for interest, commission charge and commission
Cash paid for bonus of guarantee slip
Cash paid to/for staff and workers 11,949,737.94 10,028,995.69
Taxes paid 2,481,200.14 2,678,621.46
Other cash paid concerning operating activities 3,134,403.36 3,874,768.25
Subtotal of cash outflow arising from operating activities 26,814,451.59 25,430,575.46
Net cash flows arising from operating activities 6,783,893.26 5,127,288.47
II. Cash flows arising from investing activities:
Cash received from recovering investment 9,000,000.00
Cash received from investment income 830,000.00
Net cash received from disposal of fixed, intangible and other long-term assets 10,550.00
Net cash received from disposal of subsidiaries and other units
Other cash received concerning investing activities
Subtotal of cash inflow from investing activities 9,840,550.00
Cash paid for purchasing fixed, intangible and other long-term assets 1,101,145.12 4,186,479.32
Cash paid for investment 9,000,000.00
Net increase of mortgaged loans
Net cash received from subsidiaries and other units
Other cash paid concerning investing activities 19,310,000.00
Subtotal of cash outflow from investing activities 1,101,145.12 32,496,479.32
Net cash flows arising from investing activities -1,101,145.12 -22,655,929.32
III. Cash flows arising from financing activities:
Cash received from absorbing investment
Including: Cash received from absorbing minority shareholders’ investment by
subsidiaries
Cash received from loans
Cash received from issuing bonds
Other cash received concerning financing activities 19,810,000.00
Subtotal of cash inflow from financing activities 19,810,000.00
Cash paid for settling debts
Cash paid for dividend and profit distributing or interest paying
Including: Dividend and profit of minority shareholder paid by subsidiaries
Other cash paid concerning financing activities 19,810,000.00
Subtotal of cash outflow from financing activities 19,810,000.00
Net cash flows arising from financing activities
IV. Influence on cash due to fluctuation in exchange rate
V. Net increase of cash and cash equivalents 5,682,748.14 -17,528,640.85
Add: Balance of cash and cash equivalents at the period -begin 9,681,607.16 27,210,248.01
VI. Balance of cash and cash equivalents at the period -end 15,364,355.30 9,681,607.16
6. Cash flow statement of parent Company
In RMB
Item Current Period Last Period
I. Cash flows arising from operating activities:
Cash received from selling commodities and providing labor services 31,632,073.56 29,475,377.07
Write-back of tax received
Other cash received concerning operating activities 2,465,488.22 1,082,486.86
Subtotal of cash inflow arising from operating activities 34,097,561.78 30,557,863.93
Cash paid for purchasing commodities and receiving labor service 9,249,110.15 8,848,190.06
Cash paid to/for staff and workers 11,949,737.94 10,028,995.69
Taxes paid 2,480,915.14 2,678,621.46
Other cash paid concerning operating activities 3,134,204.86 3,874,768.25
Subtotal of cash outflow arising from operating activities 26,813,968.09 25,430,575.46
Net cash flows arising from operating activities 7,283,593.69 5,127,288.47
II. Cash flows arising from investing activities:
Cash received from recovering investment 9,000,000.00
Cash received from investment income 830,000.00
Net cash received from disposal of fixed, intangible and other long-term
10,550.00
assets
Net cash received from disposal of subsidiaries and other units
Other cash received concerning investing activities
Subtotal of cash inflow from investing activities 9,840,550.00
Cash paid for purchasing fixed, intangible and other long-term assets 1,101,145.12 4,186,479.32
Cash paid for investment 9,000,000.00
Net cash received from subsidiaries and other units
Other cash paid concerning investing activities 1,000,000.00 19,310,000.00
Subtotal of cash outflow from investing activities 2,101,145.12 32,496,479.32
Net cash flows arising from investing activities -2,101,145.12 -22,655,929.32
III. Cash flows arising from financing activities:
Cash received from absorbing investment
Cash received from loans
Cash received from issuing bonds
Other cash received concerning financing activities 19,810,000.00
Subtotal of cash inflow from financing activities 19,810,000.00
Cash paid for settling debts
Cash paid for dividend and profit distributing or interest paying
Other cash paid concerning financing activities 19,810,000.00
Subtotal of cash outflow from financing activities 19,810,000.00
Net cash flows arising from financing activities
IV. Influence on cash due to fluctuation in exchange rate
V. Net increase of cash and cash equivalents 5,182,448.57 -17,528,640.85
Add: Balance of cash and cash equivalents at the period -begin 9,681,607.16 27,210,248.01
VI. Balance of cash and cash equivalents at the period -end 14,864,055.73 9,681,607.16
7. Consolidate change of owners’ equity
Current period
In RMB
Current period
Owners’ equity attributable to the parent Company
Other equity
instrument Provi
Less: Mino
Perpe Other Reaso Surp sion Total
Item Capital Inven rity
Share tual compreh nable lus of Retained owners’
Prefe public tory inter
capital capit Ot ensive reserv rese gener profit equity
rred reserve share ests
al her income e rve al
stock s
secur risk
ities
I.
Balance
at the 364,100, 54,142,8 -341,107, 77,135,4
end of 000.00 50.01 435.91 14.10
the last
year
Add:
Changes
of
accounti
ng
policy
Error
correctio
n of the
last
period
Enterpris
e
combine
under
the same
control
Other
II.
Balance
at the 364,100, 54,142,8 -341,107, 77,135,4
beginnin 000.00 50.01 435.91 14.10
g of this
year
III.
Increase/
Decrease
in this
653,282.1 653,282.
year
9 19
(Decreas
e is
listed
with “-”)
(i) Total
compreh 653,282.1 653,282.
ensive 9 19
income
(ii)
Owners’
devoted
and
decrease
d capital
1.Comm
on
shares
invested
by
owners
2.
Capital
invested
by
holders
of other
equity
instrume
nts
3.
Amount
reckoned
into
owners
equity
with
share-ba
sed
payment
4. Other
(III)
Profit
distributi
on
1.
Withdra
wal of
surplus
reserves
2.
Withdra
wal of
general
risk
provisio
ns
3.
Distribut
ion for
owners
(or
sharehol
ders)
4. Other
(IV)
Carrying
forward
internal
owners’
equity
1.
Capital
reserves
converse
d to
capital
(share
capital)
2.
Surplus
reserves
converse
d to
capital
(share
capital)
3.
Remedyi
ng loss
with
surplus
reserve
4.
Change
amount
of
defined
benefit
plans
that
carry
forward
retained
earnings
5. Other
(V)
Reasona
ble
reserve
1.
Withdra
wal in
the
report
period
2. Usage
in the
report
period
(VI)Othe
rs
IV.
Balance
at the
364,100, 54,142,8 -340,454, 77,788,6
end of
000.00 50.01 153.72 96.29
the
report
period
Last Period
In RMB
Last Period
Owners’ equity attributable to the parent Company
Other equity
instrument Provi
Less: Mino
Perpe Other Reaso Sur sion Total
Item Capital Inven rity
Share tual compreh nable plus of Retained owners’
Prefe public tory inter
capital capit Ot ensive reserv rese gener profit equity
rred reserve share ests
al her income e rve al
stock s
secur risk
ities
I.
Balance
at the 364,100, 54,142,8 -343,966, 74,276,4
end of 000.00 50.01 434.57 15.44
the last
year
Add:
Changes
of
accounti
ng
policy
Error
correctio
n of the
last
period
Enterpris
e
combine
under
the same
control
Other
II.
Balance
at the 364,100, 54,142,8 -343,966, 74,276,4
beginnin 000.00 50.01 434.57 15.44
g of this
year
III.
Increase/
Decrease
in this
2,858,998 2,858,99
year
.66 8.66
(Decreas
e is
listed
with “-”)
(i) Total
compreh 2,858,998 2,858,99
ensive .66 8.66
income
(ii)
Owners’
devoted
and
decrease
d capital
1.Comm
on
shares
invested
by
owners
2.
Capital
invested
by
holders
of other
equity
instrume
nts
3.
Amount
reckoned
into
owners
equity
with
share-ba
sed
payment
4. Other
(III)
Profit
distributi
on
1.
Withdra
wal of
surplus
reserves
2.
Withdra
wal of
general
risk
provisio
ns
3.
Distribut
ion for
owners
(or
sharehol
ders)
4. Other
(IV)
Carrying
forward
internal
owners’
equity
1.
Capital
reserves
converse
d to
capital
(share
capital)
2.
Surplus
reserves
converse
d to
capital
(share
capital)
3.
Remedyi
ng loss
with
surplus
reserve
4.
Change
amount
of
defined
benefit
plans
that
carry
forward
retained
earnings
5. Other
(V)
Reasona
ble
reserve
1.
Withdra
wal in
the
report
period
2. Usage
in the
report
period
(VI)Othe
rs
IV.
Balance
at the
364,100, 54,142,8 -341,107, 77,135,4
end of
000.00 50.01 435.91 14.10
the
report
period
8. Change of owners’ equity of parent company
Current period
In RMB
Current period
Other equity
Less: Other Surpl
instrument Capital Reason Total
Item Share Invent comprehe us Retained
Prefer Perpet public able owners’
capital Oth ory nsive reser profit
red ual reserve reserve equity
er shares income ve
stock capital
securit
ies
I. Balance
at the end 364,100,00 54,142,85 -341,107,4 77,135,41
of the last 0.00 0.01 35.91 4.10
year
Add:
Changes
of
accountin
g policy
Error
correction
of the last
period
Other
II.
Balance at
the 364,100,00 54,142,85 -341,107,4 77,135,41
beginning 0.00 0.01 35.91 4.10
of this
year
III.
Increase/
Decrease
in this 653,513.9
653,513.92
year 2
(Decrease
is listed
with “-”)
(i) Total
comprehe 653,513.9
653,513.92
nsive 2
income
(ii)
Owners’
devoted
and
decreased
capital
1.Commo
n shares
invested
by
owners
2. Capital
invested
by holders
of other
equity
instrument
s
3. Amount
reckoned
into
owners
equity
with
share-base
d payment
4. Other
(III) Profit
distributio
n
1.
Withdraw
al of
surplus
reserves
2.
Distributio
n to
owners (or
shareholde
rs)
3. Other
(IV)
Carrying
forward
internal
owners’
equity
1. Capital
reserves
conversed
to capital
(share
capital)
2. Surplus
reserves
conversed
to capital
(share
capital)
3.
Remedyin
g loss with
surplus
reserve
4. Change
amount of
defined
benefit
plans that
carry
forward
retained
earnings
5. Other
(V)
Reasonabl
e reserve
1.
Withdraw
al in the
report
period
2. Usage
in the
report
period
(VI)Other
s
IV.
Balance at
364,100,00 54,142,85 -340,453,9 77,788,92
the end of
0.00 0.01 21.99 8.02
the report
period
Last period
In RMB
Last period
Other equity instrument
Perpet Less: Other Surpl
Capital Reason Total
Item Share Prefer ual Invent comprehen us Retained
Oth public able owners’
capital red capital ory sive reser profit
er reserve reserve equity
stock securit shares income ve
ies
I. Balance
at the end 364,100,00 54,142,85 -343,966,43 74,276,41
of the last 0.00 0.01 4.57 5.44
year
Add:
Changes
of
accounting
policy
Error
correction
of the last
period
Other
II. Balance
at the
364,100,00 54,142,85 -343,966,43 74,276,41
beginning
0.00 0.01 4.57 5.44
of this
year
III.
Increase/
2,858,998.6 2,858,998
Decrease
6 .66
in this
year
(Decrease
is listed
with “-”)
(i) Total
comprehe 2,858,998.6 2,858,998
nsive 6 .66
income
(ii)
Owners’
devoted
and
decreased
capital
1.Commo
n shares
invested
by
owners
2. Capital
invested
by holders
of other
equity
instrument
s
3. Amount
reckoned
into
owners
equity
with
share-base
d payment
4. Other
(III) Profit
distributio
n
1.
Withdrawa
l of
surplus
reserves
2.
Distributio
n to
owners (or
shareholde
rs)
3. Other
(IV)
Carrying
forward
internal
owners’
equity
1. Capital
reserves
conversed
to capital
(share
capital)
2. Surplus
reserves
conversed
to capital
(share
capital)
3.
Remedyin
g loss with
surplus
reserve
4. Change
amount of
defined
benefit
plans that
carry
forward
retained
earnings
5. Other
(V)
Reasonabl
e reserve
1.
Withdrawa
l in the
report
period
2. Usage
in the
report
period
(VI)Others
IV.
Balance at
364,100,00 54,142,85 -341,107,43 77,135,41
the end of
0.00 0.01 5.91 4.10
the report
period
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd.
Notes to the Financial Statements
For the Year Ended December 31, 2018
1. Company profile
1.1 weivrevO
Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd. (hereinafter referred to as the "Company")
is a standardized company limited by shares established on April 26, 1993 and restructured from
Hainan Sanya Dadonghai Tourism Centre Development Co., Ltd. with the approval of Hainan
Shareholding System Pilot Group office via its Document Qiong Gu Ban Zi [1993] No.11. On
May 6, 1996, the Company was reorganized and separated with the reply of Hainan Securities
Management Office by its Document Qiong Zheng Ban [1996] No.58. On October 8, 1996 and
January 28, 1997, the Company was approved to respectively issue 80 million B shares and 14
million A shares on Shenzhen Stock Exchange and list for sales. On June 20, 2007, the Company
carried out the split share structure reform. The non-tradable shareholders of the Company paid
shares to the tradable shareholders for obtaining the circulation rights, and the tradable
shareholders got 3 shares for every 10 shares. The Company belongs to tourism and catering
service industry.
As at December 31, 2018, the Company's accumulative total issued capital was 364.1 million
shares and the Company's registered capital was RMB 364.1 million. Legal representative: Yuan
Xiaoping. Unified social credit code: 91460000201357188U. Domicile: Dadonghai, Hedong
District, Sanya. Business scope: Accommodation and catering industry (limited to branches);
photography; flower bonsai, knitwear, general merchandise, hardware and electrical equipment,
chemical products (except franchised operations), daily necessities, industrial means of production
(except franchised operations), metal materials, machinery equipment; sales of train, bus and
vehicle tickets on an agent basis, etc. The Company's largest shareholder is Luoniushan Co., Ltd.
The financial statements were approved by all directors of the Company for disclosure on
February 24, 2018.
1.2 Scope to the consolidated financial statements
As at December 31, 2018, the subsidiary included into the Company's scope of consolidated
financial statements is as follows:
Name Relationship with the Company
Hainan Wengao Tourist Resources Development A wholly-owned subsidiary of the
Co., Ltd. Company
See “Note 6. Changes in the scope of consolidation" and “Note 7. Equity in other entities" for
details of the scope of consolidated financial statements in 2018 and changes thereof.
2. Basis for the preparation of the financial statements
2.1 Preparation basis
Based on going concern and according to actually occurred transactions and events, the Company
prepared financial statements in accordance with the Accounting Standards for Business
Enterprises — Basic Standards and the specific accounting standards, the Accounting Standards
for Business Enterprises - Application Guidance, the Accounting Standards for Business
Enterprises - Interpretation and other relevant provisions, issued by the Ministry of Finance,
(hereinafter referred to collectively as the "Accounting Standards for Business Enterprises"), as
well as the disclosure provisions of the Rules for the Compilation and Submission of Information
Disclosure by Companies Offering Securities to the Public No.15 - General Requirements for
Financial Reports (Revised in 2014).
Notes to the Financial Statements Page 1
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
2.2 Going concern
The Company currently has sufficient working capital and normal operating conditions. It is
estimated that the operating activities of the Company will still continue in the next 12 months.
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3.1 Statement on compliance with the Accounting Standards for Business Enterprises
The financial statements prepared by the Company meet requirements of the Accounting
Standards for Business Enterprises, and truly and completely reflect the Company’s financial
position, operation results and cash flows and other relevant information in the reporting period.
3.2 Accounting period
The accounting year is from January 1 to December 31 in calendar year.
3.3 Operating cycle
The Company's operating cycle is 12 months.
3.4 Functional currency
RMB is adopted as the functional currency.
3.5 Accounting treatment methods for business combinations under and not under common
control
Business combination under common control: The assets and liabilities acquired by the Company
in business combinations are measured at book values of assets and liabilities of the combinee
(including the goodwill arising from the acquisition of the combinee by the ultimate controller) in
the consolidated financial statements of the ultimate controller on the combination date. The stock
premium in the capital reserves is adjusted according to the difference between the book value of
the net assets acquired in business combination and the book value of the consideration paid for
the combination (or total par value of shares issued). If there is no sufficient stock premium in the
capital reserves for write-downs, the retained earnings shall be adjusted.
Business combination not under common control: The Company shall, on the acquisition date,
measure the assets surrendered and liabilities incurred or assumed by the Company for a business
combination at their fair values. The difference between the fair value and their book value shall
be included in the current profit or loss. The Company shall recognize the difference of the
combination costs in excess of the fair value of the identifiable net assets acquired from the
acquiree as goodwill. The Company shall recognize the difference of the combination costs in
short of the fair value of the identifiable net assets acquired from the acquiree in the current profit
or loss after review.
The auditing, legal services, consulting and other intermediary service fees as well as other
relevant direct expenses for business combination will be included in the current profit or loss at
occurrence; the transaction costs for the issue of equity securities shall be used to write down
equities.
3.6 Preparation methods of consolidated financial statements
3.6.1 Scope of consolidation
The scope of consolidated financial statements of the Company is determined on the basis
of control, and all its subsidiaries (including the investee's partible part that is under
control of the Company) shall be included in the consolidated financial statements.
Notes to the Financial Statements Page 2
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
3.6.2 Procedures of consolidation
The Company prepares the consolidated financial statements based on financial
statements of itself and its subsidiaries and according to other relevant information. Upon
preparation of consolidated financial statements, the Company shall deem the whole
group as a whole accounting entity, and reflects the overall financial position, operating
results and cash flows of the group in accordance with relevant requirements for
recognition, measurement and presentation as stated in the Accounting Standards for
Business Enterprises as well as uniform accounting policies.
All the subsidiaries within the consolidation scope of consolidated financial statements
shall adopt the same accounting policies and accounting periods as those of the Company.
If the accounting policies or accounting periods of a subsidiary are different from those of
the Company, the consolidated financial statements of the subsidiary, upon preparation of
consolidated financial statements, shall be adjusted according to the accounting policies
and accounting periods of the Company. For the subsidiaries acquired through business
combination not under the same control, adjustments to their financial statements shall be
made based on the fair values of net identifiable assets on the acquisition date. For a
subsidiary acquired through business combination under common control, adjustment to
its financial statements shall be made based on the book values of its assets and liabilities
(including goodwill formed in the acquisition of the subsidiary by its ultimate controller)
as presented in the financial statements of the ultimate controller.
The share of owners' equity, current net profits and losses, and current comprehensive
income of subsidiaries attributable to minority owners shall be respectively and
separately listed under the owner's equity item of a consolidated balance sheet, the net
profit item of a consolidated income statement, and the total comprehensive income in a
consolidated income statement. Where the current losses shared by a minority
shareholder of a subsidiary exceeds the balances arising from the shares enjoyed by the
minority shareholder in the owners' equity of the subsidiary at the beginning of the period,
minority equity shall be written down accordingly.
(1) Increase of subsidiaries or business
During the reporting period, if the Company acquired subsidiaries or business from
the business combination under common control, the beginning balance in the
consolidated statement of financial position shall be adjusted; the revenue, expenses
and profits of the newly acquired subsidiaries or business from the beginning to the
end of the reporting period shall be included into the consolidated income statement;
the cash flows of the newly acquired subsidiaries or business from the beginning to
the end of the reporting period shall be included in the consolidated statement of cash
flow. Relevant items in the comparative financial statements of the subsidiaries shall
be adjusted accordingly, as if the reporting entity after the business combination
exists at the time when the ultimate controller has the control power.
Where control can be exercised on the investee under the common control for
additional investment or other reasons, adjustment will be made as if all parties
involved in the combination exist at the beginning of the control by the ultimate
controller. Equity investments held before the control over the combined party is
obtained, the related gains and losses, other comprehensive income as well as other
changes in net assets recognized from the later of the date when the original equity is
obtained or the date when the acquirer and the acquiree are under the same control, to
the combination date will respectively write down the retained earnings or current
profit or loss in the comparative statements.
Notes to the Financial Statements Page 3
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
During the reporting period, if the Company increased subsidiaries or business from
business combinations not under common control, the beginning balance in the
consolidated balance sheet shall not be adjusted; the revenue, expenses and profits of
the subsidiaries or business from the acquisition date to the end of the reporting
period shall be included in the consolidated income statement; cash flows of the
subsidiaries and business from the acquisition date to the end of the reporting period
shall be included in the consolidated statement of cash flows.
Where the Company can control the investee not under common control from
additional investments, it shall re-measure equity of the acquiree held before the
acquisition date at the fair value of such equity on the acquisition date and include the
difference of the fair value and book value in the investment income in the year.
Where equity of the acquiree held before the acquisition date involves in other
comprehensive income accounted for under equity method and other changes in
owners' equity other than net profits or losses, other comprehensive income and profit
distribution, the relevant other comprehensive income and other changes in owners'
equity shall be transferred to investment income in the year which the acquisition
date falls in, except for other comprehensive income from changes arising from
re-measurement of net liabilities or net assets of defined benefit plan by the investee.
(2) Disposal of subsidiaries or business
General method of treatment
During the reporting period, where the Company disposes of any subsidiary or
business, the revenues, expenses and profits of the subsidiary or business from
the beginning period to the disposal date shall be included in the consolidated
income statement; cash flows of the subsidiary or business from the beginning
period to the disposal date shall be included in the consolidated statement of cash
flows.
When the Company loses the control over the investee due to disposal of partial
equity investment or other reasons, the remaining equity investment after the
disposal will be re-measured by the Company at its fair value on the date of loss
of the control. The difference of the sum of the consideration acquired from
disposal of equities and the fair value of the remaining equities less the sum of
the share calculated at the original shareholding ratio in net assets of the original
subsidiary which are continuously calculated as of the acquisition date or the
combination date and goodwill shall be included in the investment income of the
period in which the control is lost. Other comprehensive incomes associated with
the equity investments of the original subsidiary, or the changes in owners' equity
other than net profit or loss, other comprehensive income and profit distribution,
are transferred into investment income of the period when the control is lost,
except for other comprehensive income from the change in net liability or net
asset due to the investor's re-measurement of defined benefit plan.
Where the Company loses the control of any subsidiary due to the decline in its
shareholding ratio in the subsidiary, caused by the increase of investment in the
subsidiary by other investors, the accounting treatment shall be conducted
according to the above principles.
Notes to the Financial Statements Page 4
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
2 Disposal of subsidiaries by stages
If the control is lost due to disposal of the equities in subsidiaries through
multiple transactions by stages, and the terms, conditions and economic impact of
the transactions related to the enterprise's disposal of its investment in the
subsidiaries meet one or more of the following circumstances, it usually indicates
that multiple transactions should be included in a package deal and subject to
accounting processing as below:
i. These transactions are concluded at the same time or under the consideration
of mutual effect;
ii. These transactions as a whole can reach a complete business result;
iii. The occurrence of a transaction depends on the occurrence of at least one
other transaction;
iv. A single transaction is uneconomical but is economical when considered
together with other transactions.
Where various transactions of disposal of equity investments in subsidiaries until
loss of the control belong to a package deal, accounting treatment shall be made
by the Company on the transactions as a transaction to dispose subsidiaries and
lose the control; however, the difference between each disposal cost and net asset
share in the subsidiaries corresponding to each disposal of investments before
loss of the control should be recognized as other comprehensive income in the
consolidated financial statements and should be transferred into the current profit
or loss at the loss of the control.
Where various transactions of disposal of equity investments in subsidiaries until
loss of the control do not belong to a package deal, before the loss of the control,
accounting treatment shall be made according to the relevant policies for partial
disposal of equity investments in the subsidiary without losing control; at the loss
of the control, accounting treatment shall be made according to general treatment
methods for disposal of subsidiaries.
(3) Purchase of minority interest of subsidiaries
The share premium in the capital reserves under the consolidated balance sheet will
be adjusted at the difference between the long-term equity investment acquired by the
Company for the purchase of minority interest and the share of net assets calculated
constantly from the acquisition date (or combination date) according to the newly
increased shareholding ratio. Where the share premium is insufficient to offset,
retained earnings will be adjusted.
(4) Partial disposal of equity investments in subsidiaries without losing control
The share premium in the capital reserves under the consolidated balance sheet will
be adjusted at the difference between the proceeds achieved from the partial disposal
of long-term equity investments in subsidiaries and the share of net assets of
subsidiaries attributable to the Company corresponding to the disposal of long-term
equity investments and calculated constantly from the acquisition date or
combination date, without losing the control. Where the share premium is insufficient
to write down, the retained earnings will be adjusted.
Notes to the Financial Statements Page 5
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
3.7 Classification and accounting treatment of joint venture arrangements
Joint venture arrangements are classified into joint operation and joint venture.
Joint operation refers the joint venture arrangement where the Company is a joint venturer and
enjoys assets relevant the joint venture arrangement and assumes liabilities relevant to the same.
The Company recognizes the following items related to its share of benefits in the joint operation
and conduct accounting treatment in accordance with relevant accounting standards for business
enterprises:
(1) assets peculiar to the Company and assets jointly owned by the Company based on shares
held;
(2) liabilities undertaken by the Company solely and liabilities jointly undertaken by the
Company based on shares held;
(3) revenue from the sales of output share enjoyed by the Company in the joint operation;
(4) revenue from the sales of the joint operation output based on the shares held by the Company;
and
(5) separate costs, and costs for the joint operation based on the shares held by the Company.
3.8 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 of the Company. 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 subject to an insignificant risk of change in
value.
3.9 Foreign currency transactions
Foreign currency transactions are translated into RMB for recording purpose at the spot exchange
rate prevailing on the transaction date.
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 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 still be converted at the spot exchange rates when the
transactions occur, and the amount in functional currency shall remain unchanged. Foreign
currency non-monetary items measured at fair value shall be conversed 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.
3.10 Financial instruments
Financial instruments include financial assets, financial liabilities and equity instruments.
3.10.1 Classification of financial instruments
At the initial recognition, financial assets and financial liabilities are classified into:
financial assets or financial liabilities measured at fair value through the current profit or
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 the current
profit or loss; held-to-maturity investments; receivables; available-for-sale financial
assets; and other financial liabilities, etc.
Notes to the Financial Statements Page 6
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
3.10.2 Recognition basis and measurement method of financial instruments
(1) Financial assets measured at fair value through current profit and loss (financial
liabilities)
Financial assets (financial liabilities) amount are initially recorded at fair values when
acquired (deducting cash dividends that have been declared but not distributed or
bond interest that has matured but not been drawn), and relevant transaction expenses
are included in the current profit or loss.
The interest or cash dividends to be received during the holding period shall be
recognized as investment income. Change in fair values is included in the current
profit or loss at the end of the period.
The difference between the fair value and the initial book-entry value is recognized as
investment income upon disposal; meanwhile, adjustments are made to profits or
losses from changes in fair values.
(2) Held-to-maturity investments
Held-to-maturity investments are initially recognized at the sum of the fair value
(deducting bond interest that has matured but not been drawn) and relevant
transaction costs.
During the period of holding the investment, the interest income is calculated and
recognized according to the amortized costs and effective interest rate (nominal
interest rate if the difference between the effective interest rate and the nominal
interest rate is small), and included in the investment income. The effective interest
rates are determined upon acquisition and remain unchanged during the expected
remaining period, or a shorter period if applicable.
Upon disposal, the difference between the purchase price obtained and the book value
of the investment is included in investment income.
(3) Receivables
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, advance to suppliers and
others, the initial recognition amount shall be the contract price or agreement price
receivable from purchasing party; for those with financing nature, they are initially
recognized at their present values.
Upon recovery or disposal, the difference between the purchase price obtained and
the book value of the receivables is included in current profit or loss.
(4) Available-for-sale financial assets
Amount of available-for-sale financial assets is initially recognized at the sum of the
fair value (deducting net of cash dividends declared but not yet paid or bond interest
that has matured but not been drawn) and related transaction expenses at acquisition.
The interest or cash dividend obtained during the holding period is recognized as
investment income. At the end of the period, available-for-sale financial assets are
measured at fair value, and the change in fair value is recognized in other
comprehensive income. However, for an equity instrument investment that has no
quoted price in an active market and whose fair value cannot be reliably measured,
and for derivative financial asset linked to the said equity instrument investment and
settled by delivery of the same equity instrument, they are measured at cost.
Notes to the Financial Statements Page 7
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
Difference between the proceeds and the book value of the financial assets is
recognized as investment income upon disposal; meanwhile, amount of disposal
corresponding to the accumulated change in fair value which is originally and
directly included in other comprehensive income shall be transferred out and
recognized as the profit and loss on investments.
(5) Other financial liabilities
Other financial liabilities are initially recognized at the sum of fair value and
transaction expenses. The subsequent measurement is based on amortized costs.
3.10.3 Recognition basis and measurement method of the transfer of financial assets
When transfer of financial assets occurs, if nearly all of the risks and rewards related to
the 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 related to the
ownership of the financial assets are retained, the Company shall not derecognize the
financial assets.
In determining whether the transfer of a financial asset meets the above de-recognition
condition of financial assets, the principle of substance over form will be adopted. The
Company divides the transfer of financial assets into overall transfer and partial transfer.
Where the entire transfer of the financial asset meets the de-recognition conditions, the
difference of the following two amounts will be included in the current profit or loss:
(1) the book value of the transferred financial asset;
(2) the sum of consideration received from the transfer, and the accumulated change
amount of fair value originally recorded in owners' equity (the financial assets
involved in the transfer are available-for-sale financial assets).
Where partial transfer of financial assets meets the de-recognition conditions, the entire
book value of the financial assets transferred will be allocated between the derecognized
part and the recognized part based on the relative fair value, and the difference between
the following two amounts will be included in current profit or loss:
(1) the book value of the derecognized part;
(2) the sum of the consideration for the derecognized part and the portion of
de-recognition corresponding to the accumulated amount of the changes in fair value
originally and directly included in owners' equity (the financial asset involved in the
transfer are available-for-sale financial assets).
If the transfer of financial assets does not meet the de-recognition criteria, the financial
assets shall continue to be recognized, and the consideration received shall be recognized
as a financial liability.
3.10.4 De-recognition criteria of financial liabilities
Where the present obligations of financial liabilities have been discharged in whole or in
part, the financial liability is derecognized or any part thereof shall be derecognized; if
the Company signs an agreement with creditors to replace the existing financial liabilities
by undertaking new financial liabilities, and the new financial liabilities are substantially
different from the existing ones in terms of contract terms, the existing financial liabilities
shall be derecognized, and at the same time, the new financial liability shall be
recognized.
Notes to the Financial Statements Page 8
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
Where substantive changes are made to the contract terms of existing financial liability in
whole or in part, the existing financial liabilities or part thereof will be derecognized, and
the financial liability the terms of which have been modified will be recognized as a new
financial liability.
Where financial liabilities are derecognized in whole or in part, the difference between
the book value of the financial liabilities derecognized and the consideration paid
(including non-cash assets transferred out or new financial liabilities borne) shall be
included in the current profit or 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 or loss.
3.10.5 Determination method of the fair value of financial assets and financial liabilities
The fair value of a financial instrument, for which there is an active market, is the prices
quoted for it therein. The fair value of a financial instrument, for which there is no active
market, is determined by using valuation techniques. At the time of valuation, the
Company adopts the techniques that are applicable in the current situation and supported
by enough available data and other information, selects the input values that are
consistent with the features of assets or liabilities as considered by market participants in
relevant asset or liability transactions, and gives priority to use relevant observable inputs.
Unobservable inputs are used only under the circumstance when it is impossible or
unobservable inputs to obtain relevant observable inputs.
3.10.6 Test method and accounting treatment for impairment of financial assets
(excluding receivables)
Except for the financial assets measured at fair values through current profit or loss, the
book value of financial assets on the balance sheet date should be checked. If there is
objective evidence that a financial asset is impaired, provision for impairment shall be
made.
(1) Provision for impairment of available-for-sale financial assets:
If the fair value of available-for-sale financial assets has significantly declined at the
end of the period, or it is expected that the trend of decrease in value is
non-temporary after considering of various relevant factors, the impairment shall be
recognized, and accumulated losses from decreases in fair value originally and
directly included in owners’ equity shall be all transferred out and recognized as
impairment loss.
For available-for-sale debt instruments whose impairment losses have been
recognized, if their fair values rise in the subsequent accounting period and such rise
is objectively related to the matters occurring after the recognition of impairment loss,
the previously recognized impairment loss shall be reversed and recorded into the
current profit or loss.
Impairment losses on available-for-sale equity instruments shall not be reversed
through profit or loss.
(2) Provision for impairment of held-to-maturity investments:
Measurement of provision for impairment loss on held-to-maturity investments is
treated in accordance with the measurement method of impairment loss on accounts
receivable.
Notes to the Financial Statements Page 9
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
3.11 Provision for bad debts of accounts receivable
3.11.1 Provision for bad debts of receivables with individually significant amount
Judgment basis or amount standard for "individually significant amount": top five
accounts receivable and other receivables in terms of their individual amount at the end of
the year.
Method of making provision for bad debts of an receivable with individually significant
amount: the impairment test is carried out on an individual basis, and the bad debts is
provided based on the difference between its present value of the future cash flow and its
book value and is included in the current profit and loss; if it is proved to be impaired
after the test, it is classified into the corresponding portfolio for provision for bad debts.
Receivables whose impairment losses have been recognized in the test are no longer
included in the portfolio of receivables with similar credit risk characteristics for
impairment testing.
3.11.2 Receivable with provision for bad debt based on portfolio
Determination basis of portfolio:
Aging portfolio Length of aging
Method of making provision for bad debt based on portfolio
Aging portfolio Aging analysis method
Proportions of provisions for bad debts made by aging analysis method are as follows:
Proportion of provision for Proportion of provision
Aging
accounts receivable (%) for other receivables (%)
Within 1 year (inclusive)
1-2 years 5 5
2-3 years 15 15
3-4 years 25 25
4-5 years 50 50
Over 5 years 100 100
3.11.3 Accounts receivable with individually insignificant amount and individual
provision for bad debts:
Reasons for individual provision for bad debts: the individual ending balance of the
receivable is less than the top five, is proved to be possibly impaired for reasons such as
the debtor’s withdrawal, bankruptcy or death, and cannot be recovered with the
bankruptcy property or settled estate.
Method of making provision for bad debts: If there is an objective evidence that the
impairment on receivables has occurred, such receivables shall be separated from relevant
portfolio to conduct impairment test separately, based on which the impairment losses are
recognized.
The receivables of subsidiaries within the scope of consolidation are accrued for
impairment according to the individual recognition method.
For receivables other than accounts receivable and other receivables, the provision for
impairment is made based on the individual recognition method.
3.11.4 Reversal of bad debts
Notes to the Financial Statements Page 10
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
If there is objective evidence that the value of the receivable has been recovered and is
related to the events that occurred after the recognition of the loss, the previously
recognized impairment loss is reversed and recognized in profit or loss. However, the
book value after the reversal shall not exceed the amortized cost of the receivable on the
reversal date, assuming no provision for impairment.
3.12 Inventories
3.12.1 Classification of inventories
The inventories are classified into: raw materials, commodity stocks, low-value
consumables, food materials, fuels, etc.
3.12.2 Measurement of inventories dispatched
The commodity stocks are accounted for based on their selling prices, and the difference
between the commodity purchasing price and the selling price is adjusted monthly by the
comprehensive spread rate method. The inventory materials are measured at actual cost
when purchased and warehoused, and measured using the first-in first-out method when
applied for use and dispatched. Low-value consumables are amortized on a one-off basis
when applied for use.
3.12.3 Determining basis of the net realizable value of inventories and method for
inventory depreciation reserve
After the comprehensive check of the inventories at the end of the period, the inventory
depreciation reserves are provided or adjusted at their costs or net realizable values,
whichever are lower.
For inventories for direct sale, including commodity stocks and materials for sale, their
net realizable values shall be recognized at the estimated selling prices minus the
estimated selling expenses and the relevant taxes and surcharges in the normal operation
process. 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 held by the
Company are more than the quantities ordered in sales contracts, the net realizable value
of the excess portion of inventories shall be based on general selling prices.
The provisions for inventory depreciation reserve are made on an individual basis at the
end of the period; for inventories with large quantities and relatively low unit prices, the
provisions for 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 are made on a portfolio basis.
Where the previous factors affecting the written-down of the value of inventory have
disappeared, the amount of write-down shall be resumed and be reversed from the
original provision for inventory devaluation with the reversal being included in current
profit and loss.
3.12.4 Inventory system
Perpetual inventory system is adopted.
3.12.5 Amortization method for low-cost consumables and packaging materials
(1) Low-cost consumables are amortized in a lump sum;
(2) Packaging materials are amortized in a lump sum.
Notes to the Financial Statements Page 11
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
3.13 Long-term equity investment
3.13.1 Judgment criteria for joint control and significant influence
Joint control refers to the control shared over an arrangement in accordance with the
relevant stipulations, and the decision-making of related activities of the arrangement
should not be made before the party sharing the control right agrees the same. Where the
Company exercises joint control over the investee together with other parties to the joint
venture and enjoys the right on the investee's net assets, the investee is a joint venture of
the Company.
Significant influence refers to the power to participate in making decisions on the
financial and operating policies of an enterprise, such as appointing representative to the
board of directors or similar organs of authority of the investee, but not the power to
control the investee, or jointly control, the formulation of such policies with other parties.
Where an investing enterprise is able to have significant influences on an investee, the
investee is its associate.
3.13.2 Determination of initial investment cost
(1) Long-term equity investments acquired through business combination
Business combination under common control: if the Company pays a consideration to
the combinee in cash, by transferring non-cash assets or by assuming debts and
issuing equity securities, the share of book value of its owners' equity in the combinee
in the consolidated financial statements of the ultimate controller shall be recognized,
on the combination date, as the initial cost of the long-term equity investment. If
there is a difference between the initial investment cost of the long-term equity
investment and the total of book values of the paid cash, transferred non-cash assets
and of assumed debts as well as the face value of issued share, the difference shall be
used to adjust the share premium in the capital reserve; and if the share premium in
the capital reserve is insufficient to be offset, retained earnings shall be adjusted.
For long-term equity investments acquired from business combinations under
common control, the investment initial cost thereof shall be recognized at the share of
book value of the combinee's net assets in the consolidated financial statements of the
ultimate controller on the combination date. The stock premium should be adjusted at
the difference between the initial investment cost of long-term equity investments on
the combination date and the sum of the book value of long-term equity investments
before the combination and the book value of consideration newly paid for additional
shares; if there is no sufficient stock premium to be written down, the retained
earnings are adjusted.
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 investments. Where the Company can control the investee not under common
control from additional investments, the initial investment cost should be changed to
be accounted for under the cost method and recognized at the sum of the book value
of equity investments originally held and newly increased investment cost. The
intermediary service charges, including audit, legal service, evaluation and
consultancy fees and other relevant general and administrative expenses incurred for
business combination shall be charged to current profit and loss when they are
incurred. Transaction expenses incurred for issuance of equity or debt securities as
consideration for business combination shall be included in the initial recognition
amount of those equity securities or debt securities.
Notes to the Financial Statements Page 12
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
(2) Long-term equity investments acquired by other means
For long-term equity investments acquired from cash payment, the initial investment
cost is the actually paid purchasing cost.
For the long-term equity investments acquired through issuing the equity securities,
the fair value of equity securities issued shall be recognized as the initial investment
cost.
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 initial cost of a
long-term equity investment traded in with non-monetary asset should be determined
according to the fair value of the asset traded out and relevant taxes and surcharges
payable, 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 relevant taxes and
surcharges payable should be recognized as the initial cost of the long-term equity
investment.
For long-term equity investment acquired from debt restructuring, the initial
investment cost is determined based on the fair value.
3.13.3 Subsequent measurements and recognition of profit or loss
(1) Long-term equity investments accounted for under cost method
Long-term equity investments of the Company in its subsidiaries are accounted for by
the 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 current investment income based on
the cash dividends or profits enjoyed by the Company and declared to be distributed
by the investee.
(2) Long-term equity investments accounted for under the equity method
The Company's long-term equity investments in its associates and joint ventures are
calculated under 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 current profit and loss.
The Company shall, in accordance with its attributable share of the net profit or loss
and other comprehensive income realized by the investee, respectively recognize the
investment income and other comprehensive income and simultaneously adjust the
book value of the long-term equity investment. The Company shall, in the light of the
profits or cash dividends that the investee declares to distribute, reduce the book
value of the long-term equity investment correspondingly. As to any change in
owners' equity of the investee other than net profit or loss, other comprehensive
income and profit distribution, the Company shall adjust the book value of the
long-term equity investment and include such change into the owners' equity.
When recognizing the attributable share of net profit or loss of the investee, the
Company shall, based on the fair value of identifiable net asset of the investee when
it obtains the investment, recognize its attributable share of the net profit or loss of
the investee after the adjustment according to the Company's accounting policy and
accounting period. When holding the investment, the investee should prepare the
consolidated financial statements, it shall account for the investment income based on
Notes to the Financial Statements Page 13
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
the net profit, other comprehensive income and the changes in other owner's equity
attributable to the investee.
The Company calculates its attributable profit or loss of internal transactions that are
not realized arising among itself, associates and joint ventures based on its
attributable percentage and offset it, and determines the investment income on that
basis. Unrealized internal transaction loss incurred between the Company and the
investee shall be recognized in full amount if such loss belongs to the asset
impairment. For the asset investment or sale transactions with associated enterprises
or joint ventures, the accounting treatment should be carried out in accordance with
the relevant policies if the asset forms a part of the Company's business.
When the Company confirms that it should share losses of the investee, treatment
shall be done in following sequence: first, writing down the book value of long-term
equity investments. Secondly, if the book value of the long-term equity investments is
insufficient to be offset, the Company shall continue to recognize the investment loss
to the extent of the book value of long-term interests which substantially form the net
investment in the investee and offset the book value of the long-term receivable items
and other items. Finally, after all the above treatments, if the Company is still
responsible for any additional liability in accordance with the provisions stipulated in
the investment contracts or agreements, provisions are recognized and included into
current investment loss according to the obligations estimated to undertake. If the
investee achieves profit in subsequent periods, the Company shall, after deducting
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 according to the
reversed sequence described above, and recognize investment income at the same
time.
(3) Disposal of long-term equity investments
For the disposal of long-term equity investments, the difference between the book
value and the actual price thereof shall be included in the current profit or loss.
Where a long-term equity investment is accounted for under the equity method,
accounting treatment should be made on the part which is originally included in other
comprehensive income according to corresponding ratio by using the same basis for
the investee to directly dispose of the relevant assets or liabilities when the
investments are disposed of. Owner's equity recognized from changes in other
owner's equity of the investee other than net profit and loss, other comprehensive
income and the profit distribution should be included in the current profit and loss
according to the proportion.
In case the joint control or significant influence over the investee is lost for disposing
part of equity investments or other reasons, the remaining equity will be changed to
be accounted for according to the recognition and measurement principles of
financial instruments, while the difference between the fair value and the book value
on the date of the loss of joint control or significant influence should be included in
the current profit or loss. As to other comprehensive income recognized based on
measurement of the original equity investment under the equity method, accounting
treatment shall be made on the same basis as would be required if the investee had
directly disposed of the assets or liabilities related thereto when measurement under
the equity method is terminated. Owner's equity recognized from the investee's
changes in other owner's equity other than net profit or loss, other comprehensive
income and profit distribution should all transferred to the current profit and loss
when the equity method is no longer adopted.
Where the Company loses the control over the investee due to disposal of partial
equity investments or other reasons, when it prepares separate financial statements,
Notes to the Financial Statements Page 14
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
the remaining equity after disposal that can jointly control or have significant
influence on the investee will be measured at the equity method, and the remaining
equity should be deemed to have been adjusted at equity method on acquisition.
If the remaining equity after disposal cannot exercise joint control or significant
influence over the investee, such remaining equity shall be subject to the accounting
treatment according to the recognition and measurement standards of financial
instruments, and the difference between its fair value and book value on the date
when control losses is included in current profit or loss.
Where the equity disposed of are acquired through business combination as a result
of additional investment and other reasons, if the remaining equities after disposal are
calculated under the cost method or equity method upon preparation of separate
financial statements, other comprehensive income and other owners' equities
recognized in equity investments held before the acquisition date as a result of
employment of equity method for accounting shall be carried forward pro rata; if the
remaining equities after disposal are calculated according to the provisions on
Recognition and Measurement of Financial Instruments, other comprehensive income
and other owners' equities will all be carried forward.
3.14 Investment properties
The investment properties refer to the properties held for earning rentals or/and capital
appreciation, including leased land use right, land use right held for transfer upon appreciation,
and leased building (including self-built buildings or buildings developed for renting or buildings
under construction or development for future renting).
The Company measures the existing investment properties by using the cost model. For
investment property measured by using the cost model, the buildings for lease shall be depreciated
by using policies the same as used for fixed assets of the Company, and the land use rights for
lease shall be amortized by using the same policies as applicable to intangible assets.
3.15 Fixed assets
3.15.1 Recognition criteria of fixed assets
Fixed assets refer to tangible assets held for the purpose of producing commodities,
providing services, renting or business management with useful lives exceeding one year.
Fixed assets are recognized when they simultaneously meet the following conditions:
(1) It is probable that the economic benefits relating to the fixed assets will flow into the
Company; and
(2) The costs of the fixed assets can be measured reliably.
3.15.2 Classification of fixed assets
Fixed assets can be classified into: buildings and constructions, electronic equipment,
transport equipment, electronic entertainment equipment, other equipment and decoration
improvements.
3.15.3 Initial measurement of fixed assets
Fixed assets shall be initially measured at actual costs on acquisition.
The costs of externally acquired fixed assets shall be determined by their purchase prices,
related taxes and surcharges and any attributable transport expenses, loading and
unloading expenses, installation expenses and professional service expenses incurred to
prepare the fixed assets for its serviceable condition.
If the payment for a fixed asset is delayed beyond the normal credit conditions and it is of
the financing nature, the cost of the fixed asset shall be determined on the basis of the
current value of the purchase price.
Notes to the Financial Statements Page 15
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
Costs of self-built fixed assets consist of necessary expenditures incurred before
preparing the asset to reach the condition for its intended use.
For fix assets obtained in debt restructuring by debtors for the settlement of his liabilities,
their book-entry value should be initially stated based on their fair values. Differences
between the book values and the fair values of the fix assets are included in the current
profit and loss;
If the exchange of non-monetary assets has commercial substance, and the fair value of
these assets can be measured reliably, the book-entry value of fixed assets traded in is
determined on the basis of the fair value of the fixed assets traded out unless there is any
conclusive evidence that the fair value of the assets traded in is more reliable; if the
exchange of non-monetary assets does not meet the above criteria, the cost of the fixed
assets traded in should be the book value of the assets traded out and relevant taxes and
surcharges payable, and no profit or loss shall be recognized.
For fixed assets acquired from business combination under common control, their
book-entry values are recognized at the book values of the combinee; for fixed assets
acquired from business combination not under common control, their book-entry values
are recognized at the fair value.
The Company shall state the assets acquired under finance lease at the lower of the book
value of the leased assets on the lease beginning date or the present value of the minimum
lease payments.
3.15.4 Provision method for depreciation of fixed assets
Fixed assets are depreciated based on the straight-line method, their depreciation rates are
determined based on category of fixed asset, estimated economic useful live and residual
values (5% of the original value) as follows:
Estimated net Annual
Estimated useful
Asset type residual value depreciation
lives (year)
rate (%) rate (%)
Buildings and constructions 20-40 5 4.75-2.37
Machinery equipment 8-20 5 11.87-4.75
Electronic entertainment equipment 5-16 5 19-5.93
Transportation equipment 7-12 5 13.57-7.91
Other equipment 8 5 11.87
3.16 Construction in progress
The book-entry values of the fixed assets are stated at total expenditures incurred before reaching
working condition for their intended use. Where a construction in progress reaches the working
condition for its intended use but the final account for completion is not made yet, it shall be
transferred into fixed assets from the date when it reaches the working condition for intended use
at the estimated value according to the project budget, construction price or actual cost, and the
depreciation of the said fixed assets shall be accrued according to the Company's depreciation
policies applicable to fixed assets. After the final account for completed project is done, the
Company adjusts the original estimated value of the fixed asset in accordance with the actual cost,
but does not adjust the provision for such depreciation that had been accrued.
Notes to the Financial Statements Page 16
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
3.17 Borrowing costs
3.17.1 Recognition principles of capitalization of borrowing costs
Borrowing costs include interest thereon, amortization of discounts or premiums,
ancillary expenses and exchange differences incurred on account of 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 relevant asset costs; other borrowing costs should be recognized as
costs according to the amount incurred and be included into current profit and loss.
Assets meeting the capitalization requirements refer to fixed assets, investment properties
and inventories, etc. that need to be purchased, constructed or produced for a long time to
be available for intended use or sale.
Borrowing costs may be capitalized only when all the following conditions are met:
(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; and
(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.
3.17.2 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 cease when the acquired and constructed or
produced assets eligible for capitalization have reached the working condition for their
intended use or sale.
When some projects among the acquired and constructed or produced assets eligible for
capitalization are completed and can be used separately, the capitalization of borrowing
costs of such assets should be ceased.
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.
3.17.3 Period of capitalization suspension
If the acquisition, construction or production activities of assets eligible for capitalization
are abnormally interrupted and such condition lasts for more than three months, the
capitalization of borrowing costs should be suspended; if the interruption is necessary
procedures for the acquired, constructed or produced assets eligible for capitalization to
reach the working conditions for their intended use or sale, the borrowing costs continue
to be capitalized. Borrowing costs incurred during the interruption are recognized as the
current profit or loss and continue to be capitalized until the acquisition, construction or
production of the assets restarts.
Notes to the Financial Statements Page 17
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
3.17.4 Calculation method of capitalization amount of borrowing costs
As for special borrowings for acquiring, constructing or producing assets eligible for
capitalization, borrowing costs of special borrowings actually incurred in the current
period less the interest income from undrawn borrowings deposited in the bank or
investment income from 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 end of each month by
the capitalization rate of used general borrowings. The capitalization rate is calculated by
weighted average interest rate of general borrowings.
Where there are discounts or premiums on borrowings, amounts of discounts or
premiums shall be amortized in each accounting period at the effective interest method,
and the amount of interest for each accounting period should be adjusted.
3.18 Intangible assets
3.18.1 Measurement of intangible assets
(1) The Company initially measures intangible assets at cost on acquisition:
The costs of externally purchased intangible assets include purchase prices, relevant
taxes and surcharges and other directly attributable expenditures incurred to prepare
the assets for their intended uses. If the payment for an intangible asset is delayed
beyond the normal credit conditions and it is of the financing nature, the cost of the
intangible asset shall be determined on the basis of the present value of the purchase
price.
The intangible assets acquired 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 included in the current profit or
loss;
On the premise that non-monetary assets trade is of commercial nature and the fair
value of the assets traded in or out can be measured reliably, the book-entry values of
intangible assets traded in with non-monetary assets should be recognized at the fair
value of the assets traded out, unless any unambiguous evidence indicates that the fair
values of the assets traded in are 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 and surcharges payable should be recognized as the cost of the intangible assets
traded in, and no profit or loss will be recognized.
For intangible assets acquired from business combination under common control,
their book-entry values are recognized at the book values of the combinee; for
intangible assets acquired from business combination not under common control,
their book-entry values 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 expenses meeting the condition for capitalization, and other
direct expenses for preparing the intangible assets for their intended use.
Notes to the Financial Statements Page 18
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
(2) Subsequent measurement
The useful lives of the intangible assets are analyzed and determined on acquisition.
Intangible assets with definite useful lives shall be amortized with the straight-line
method within the period when the intangible assets generate economic benefits for
the Company; if the said period cannot be forecast, the intangible assets shall be
deemed as those with indefinite useful lives and shall not be amortized.
3.18.2 Estimate of the useful life of the intangible assets with definite useful lives
Estimated useful
Item Basis
life
Useful life prescribed in the Certificate of
Land use right 50 years Land Use Right
At the end of each reporting period, the Company shall review the useful lives and
amortization method of intangible assets with definite useful lives.
Upon review, the useful lives and amortization methods of the intangible assets at the end
of the year are not different from those estimated before.
3.18.3 Determination basis of intangible assets with indefinite useful lives
As at the balance sheet date, the Company had no intangible assets with indefinite useful
life.
3.19 Long-term assets impairment
For the long-term equity investments, investment properties, fixed assets, construction in progress,
intangible assets, and other long-term assets measured at cost model, if there are signs of
impairment, an impairment test will be conducted on the balance sheet date. If the result of the
impairment test shows that the recoverable amount of the asset is lower than its book value, the
provision for impairment shall be made and included in impairment loss. The recoverable amount
is determined at the higher of the net of the fair value less disposal costs and the present value of
the expected future cash flows. Provision for assets impairment is made on individual asset basis.
If it is difficult to estimate the recoverable amount of the individual asset, the Group shall estimate
the recoverable amount of the asset group that the individual asset belongs to. The asset group is
the minimum asset group that can independently generate the cash inflow.
The above asset impairment loss shall not be reversed in subsequent accounting periods once
recognized.
3.20 Long-term deferred expenses
Long-term deferred expenses refer to various expenses which have been already incurred but will
be borne in the reporting period and in the future with an amortization period of over one year.
3.20.1 Amortization method
Long-term deferred expenses are amortized evenly over the beneficial period.
3.20.2 Amortization years
Item Amortization years
Hotel exterior decoration 4 years
Fire stairs renovation 4 years
Renovation of guest rooms in Building C 5 years
Villa renovation 5 years
Swimming pool renovation 5 years
Notes to the Financial Statements Page 19
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
3.21 Employee compensation
3.21.1 Short-term compensation
During the accounting period in which employees provide service to the Company, the
short-term remuneration actually incurred is recognized as liabilities and included into the
current profit or loss or the assets-related cost.
The social insurance premium and the housing provident fund paid by the Company for
its employees, together with the labor union expenditures and employee education drew
as required are used to calculate and determine the relevant employee compensation
amount based on the prescribed accrual basis and accrual proportion during the
accounting period in which the employees provide services to the Company.
Employee benefits in the non-monetary form shall be measured at fair value.
3.21.2 Dismissal welfare
When the Company fails to unilaterally withdraw the dismissal benefits offered due to the
termination of the labor relation plan or layoff proposal, or confirms the costs or fees
associated with the reorganization involving the payment of the dismissal benefits
(whichever is earlier), the employee compensation liabilities arising from the
confirmation of dismissal benefits are included in the current profit or loss.
3.21.3 Post-employment benefits
The Company pays the basic endowment insurance premiums and unemployment
insurance for employees according to the relevant provisions of the local governments.
During the accounting period when employees serve the Company, the paid amount
which is calculated based on the payment base and proportion as stipulated in the
provisions of the local place is recognized as liabilities and included in the current profit
or loss or assets-related assets cost.
3.22 Estimated liabilities
When the Company involves 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, such events are recognized as
estimated liabilities.
3.22.1 Recognition criteria of estimated liabilities
When an obligation relating to a contingency meets all the following conditions at the
same time, it is recognized as an estimated liability:
(1) Such obligation is a present obligation of the Company;
(2) The performance of this obligation may very probably lead to the flow of economic
interests out of the Company; and
(3) The amount of the obligation can be measured reliably.
3.22.2 Measurement method of estimated liabilities
Estimated liabilities of the Company are initially measured as the best estimate of
expenses required for the performance of the relevant present obligations.
When determining the best estimates, the Company comprehensively considers the risks,
uncertainties, time value of money, and other factors relating to the contingencies. If the
time value of money is significant, the best estimates will be determined after discount of
relevant future cash outflows.
The best estimates shall be treated as follows in different circumstances:
Notes to the Financial Statements Page 20
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
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 should 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 although such a range exists,
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
estimates 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 estimated liabilities of the
Company are expected to be compensated by a third party, the compensation shall be
separately recognized as an asset only when it is virtually certain to be received. The
compensation recognized shall not exceed the book value of the estimated liabilities.
3.23 Revenue
3.23.1 Recognition and measurement principles for revenue from sale of goods
(1) General recognition and measurement principles for revenue from sales of goods
Revenue from sales of goods is recognized when the Company has transferred to the
buyer the significant risks and rewards of ownership of the goods; the Company
retains neither continuous management rights associated with ownership of the goods
sold nor effective control over the goods sold; the relevant amount of income can be
measured reliably; it is highly likely that the economic benefits associated with the
transaction will flow into the Company; and the relevant amount of cost incurred or
to be incurred can be measured reliably.
(2) Recognition criteria of revenue from sale of goods of the Company and specific
judgment criteria of recognition time
In the provision of hotel housing services at the same time, the Company provides
goods to customers and will prepare daily sales list after confirming with the Rooms
Department and the hotel front desk. Based on the sales list, the finance department
confirms that the major risks and rewards of ownership of the goods have been
transferred to the customer and then the sales revenue is recognized.
3.23.2 Recognition and measurement principles of revenue from rendering of service
(1) For the hotel rooms, catering (breakfast) and other services to be provided by the
Company, after they are provided, and the Company checks with the sales
department and the front check, the Company will prepare the daily sales reports and
accounts receivable list to the finance department, which will review the same, after
which, the revenue will be recognized.
(2) For the revenue from restaurants and venues contracted out, they will be recognized
in accordance with the period stipulated in the contract or agreement and the
collection timing.
3.23.3 Recognition of revenue from transferring use right of assets
When the economic benefits relating to the transactions is possible to flow into the
Company and the amount of revenue can be measured reliably, revenues should be
recognized. Revenues from transfer of right to use assets are recognized under the
following circumstances:
(1) Interest income is determined based on the time when the monetary funds are lent
and the effective rate.
(2) The amount of revenues from usage is determined based on the charging time and
Notes to the Financial Statements Page 21
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
method as agreed in relevant contract or agreement.
3.24 Government grants
3.24.1 Type
Government grants refer to the monetary or non-monetary assets obtained by the
Company from the government for free. Government grants are divided into asset-related
government grants and income-related government grants.
Asset-related government grants refer to government grants obtained by the Company for
forming long-term assets by acquisition, construction or other manners. Income-related
government grants refer to government grants excluding the asset-related government
grants.
3.24.2 Recognition time and measurement
Government grants can be recognized when simultaneously meeting the following
conditions:
1) The enterprise can meet conditions attached to government grants; and
2) The enterprise can receive government grants.
If a government grant is a monetary asset, it shall be measured at the amount received or
receivable. Government grants shall be measured at receivables when there is strong
evidence at the end of the period that such grants comply with the relevant conditions
prescribed by the financial support policies and the financial support funds are expected
to be received. Other financial grants shall be confirmed according to the amount of
money received.
If government grants are non-monetary assets, they shall be measured at its fair value;
and if the fair value cannot be obtained in a reliable way, they shall be measured at a
nominal amount.
3.24.3 Accounting treatment
(1) Asset-related government grants
shall be used to offset the book value of relevant assets or recognized as deferred
income. If asset-related government grants are recognized as deferred income, they
shall be included in profit or loss by stages by a reasonable and systematic method
within the useful lives of relevant assets. Government grants measured at the nominal
amount are directly included in the current profit or loss.
Where relevant assets are sold, transferred, scraped or damaged before the end of
their lives, balance of the relevant unallocated deferred income is transferred to the
current profit and loss on asset disposal.
(2) Accounting treatment will be conducted for government grants associated with
income in accordance with the following provisions:
1) government grants associated with income that are used to recover relevant costs
or losses of the enterprise in subsequent period are recognized as deferred
income and included in the current profit or loss when relevant costs or losses
are recognized;
2) If government grants related to income are used to compensate the relevant costs
and losses that have occurred, such government grants should be directly
included in the current profit or loss.
3) Where both the asset-related government grants and income-related government
Notes to the Financial Statements Page 22
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
grants are covered, the accounting treatment should be done respectively by
distinguishing the asset-related government grants and income-related
government grants; if it is difficult to distinguish, these government grants will
be classified into the income-related government grants as a whole.
(3) Any government grant related to the daily activities of an enterprise shall be
included into other income in accordance with the business nature. Government
grants unrelated to the daily activities of enterprises shall be recorded as
non-operating revenues and expenditures.
3.25 Deferred tax assets and deferred tax liabilities
Deferred tax assets are recognized for deductible temporary differences to the extent that it shall
not exceed the taxable income probably obtained in future period that can be used for deducting
the deductible temporary differences.
Taxable temporary differences are recognized as deferred tax liabilities in addition to special
circumstances.
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.
When the Company has the statutory right to do settlement with the net amounts, and has the
intention to do so or the recovery of assets and the settlement of liabilities are achieved
simultaneously, the Company shall present its current income tax assets and current income tax
liabilities at the net amounts as the result of one offsetting another.
When the Company has the legal rights to balance income tax assets and income tax liabilities for
the current period with net settlement, and deferred income tax assets and deferred income tax
liabilities are related to the income tax which are imposed on the same taxpaying subject by the
same tax collection authority or on 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 for the current period with
net settlement at the time of obtaining assets and discharging liabilities, deferred income tax assets
and deferred income tax liabilities shall be presented based on the net amount after offset.
3.26 Operating lease
3.26.1 Accounting treatment of assets leased
The rental fees paid for the asset leased by the Company will be amortized over the entire
lease term without deducting rent-free period according to the straight-line method and
included in the expenses for the current period. The initial direct costs related to the lease
transactions paid by the Company are included in the current expenses.
When assets lessor bears costs related to the lease borne by the Company, the Company
shall deduct the part of expenses from the total rents and amortize the rents after
deduction over the lease term and include them in current expenses.
Notes to the Financial Statements Page 23
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
3.26.2 Accounting treatment of leasing-out 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 relating to lease transactions incurred by
the Company shall be recognized as the current expenses; if the amounts are significant,
they shall be capitalized and included in the current income on the same basis as the
recognition of lease income.
When the Company bears costs related to the lease borne by the leasee, the Company
shall deduct the part of expenses from the total rents and amortize the rents after
deduction over the lease term.
3.27 Changes in significant accounting policies and accounting estimates
3.27.1 Changes in accounting policies
The Ministry of Finance promulgated the Circular of the Ministry of Finance on Revising
and Issuing the 2018 Versions of General Corporate Financial Statement Templates (Cai
Kuai [2018] No.15) on June 15, 2018 and revised the general corporate financial
statement templates. Main impacts of the Company's implementation of the above
provisions are as follows:
Procedures for
Content of and reason for Name and amount of affected
examination
changes in accounting policies report item
and approval
"Notes receivable" and "accounts
receivable" are merged into
"notes receivable and accounts
receivable" for presentation, and
(1) In the balance sheet, "notes the amount in the current period
receivable" and "accounts is RMB 426,434.87 and the
receivable" shall be merged amount in the last period is RMB
into "notes receivable and 594,130.89; "notes payable" and
accounts receivable" for "accounts payable" are merged
presentation; "notes payable" into "notes payable and accounts
and "accounts payable" shall payable" for presentation, and the
be merged into "notes payable amount in the current period is
and accounts payable" for RMB 1,607,835.81 and the
presentation; "interest amount in the last period is RMB
receivable" and "dividends 2,161,172.26.
receivable" shall be merged
into "other receivables" for “Interest receivable” and
presentation; "interest payable" “dividends receivable” are
and "dividends payable" shall included in “other receivables”
be merged into "other for presentation; “interest
payables" for presentation; payable” and “dividends payable”
"disposal of fixed assets" shall are included in “other payables”
be merged into "fixed assets" for presentation; “disposal of
for presentation; "project fixed assets” is included in “fixed
materials" shall be merged into assets” for presentation; “project
"construction in progress" for materials” is included in
progress; "special payable" “construction in progress” for
shall be merged into presentation; “special payables”
"long-term payables" for is included in “long-term
presentation. The comparative Resolution of payables” for presentation. There
data shall be adjusted the Board of is no balance in the current period
accordingly. Directors and the last period.
Notes to the Financial Statements Page 24
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
Procedures for
Content of and reason for Name and amount of affected
examination
changes in accounting policies report item
and approval
The research and development
(2) In the income statement, expenses originally included in
the item "research and item “general and administrative
development expenses" shall expenses" shall be reclassified
be added, and the "research into item "research and
and development expenses" development expenses" for
originally under the "general separate presentation. There was
and administrative expenses" no research and development
shall be reclassified into the expense occurred in the current
"research and development and the prior period; items
expenses" for separate "interest cost" and "interest
presentation; in the income revenue" shall be added under
statement, the items item "financial expenses" for
"Including: interest expenses" presentation. There was no
and "interest income" shall be interest cost occurred in the
added under the item current and the prior period; the
"financial expenses". The Resolution of interest revenue was RMB
comparative data shall be the Board of 232,899.41 in 2018 and RMB
adjusted accordingly. Directors 291,701.13 in 2017.
In the statement of changes in
owners' equity, the item "change
(3) In the statement of changes in the defined benefit plan carried
in owners' equity, the item forward to retained earnings" is
"change in the defined benefit added. There is no change in the
plan carried forward to defined benefit plan carried
retained earnings" shall be Resolution of forward to retained earnings
added. The comparative data the Board of occurred in the current period and
shall be adjusted accordingly. Directors the last period.
3.27.2 Changes in accounting estimates
There was no change in the principal accounting estimates of the Company during the
reporting period.
noitaxaT .4
Major tax types and tax rates applicable to the Company
Taxes Basis for tax assessment Tax rate
Output VAT is calculated based on taxable sales revenue
and service revenue calculated in accordance with tax
laws and VAT payable or taxable sales revenue shall be 5%, 6%, 10%,
the difference after deducting the input VAT deductible 11%, 16%,
Value added tax (VAT) in the same period 17%
Urban maintenance and
construction tax Levied based on VAT payable 7%
Education surtax Levied based on VAT payable 3%
Local education surtax Levied based on VAT payable 2%
Remaining value after deducting 30% from the original
value of the house (including the occupied land price),
Housing property tax and rent revenue 1.2%, 12%
Notes to the Financial Statements Page 25
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
Taxes Basis for tax assessment Tax rate
Land use tax Land area RMB 18 / m2
Enterprise income tax Levied based on the taxable income 25%
Remark: According to the Document Cai Shui [2018] No.32, as of May 1, 2018, the tax rate for VAT
taxable sales or imported goods of a taxpayer shall be respectively adjusted to 16% and 10% from the
original 17% and 11%.
stnemetats laicnanif eht fo smeti niam eht ot setoN .5
5.1 Monetary funds
Balance as at Balance as at
Item
December 31, 2018 January 1, 2018
Cash on hand 347,782.65 264,156.33
Bank deposits 15,016,572.65 9,417,450.83
Total 15,364,355.30 9,681,607.16
Remark: there are no amounts restricted for use due to mortgage or freeze, deposited in overseas
institutions, and having potential risk in recovery.
5.2 Notes receivable and accounts receivable
Balance as at Balance as at
Item
December 31, 2018 January 1, 2018
Notes receivable
Accounts receivable 426,434.87 594,130.89
Total 426,434.87 594,130.89
Notes to the Financial Statements Page 26
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
5.2.1 Disclosure of accounts receivable by category
Balance as at December 31, 2018 Balance as at January 1, 2018
Book balance Provision for bad debts Book balance Provision for bad debts
Category
Proportion of Book value Proportion of Book value
Amount Proportion (%) Amount Amount Proportion (%) Amount
provision (%) provision (%)
Account receivables with individually
significant amount and individual provision
for bad debts
Accounts receivable with provision for bad
debts made by portfolio 500,510.47 100.00 74,075.60 14.80 426,434.87 662,651.14 100.00 68,520.25 10.34 594,130.89
Accounts receivable with individually insignificant
amount and individual provision for bad debts
Total 500,510.47 100.00 74,075.60 426,434.87 662,651.14 100.00 68,520.25 594,130.89
Notes to the Financial Statements Page 27
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
In portfolio, accounts receivable with the provision for bad debts made by the aging
analysis method:
Balance as at December 31, 2018
Aging Accounts Provision for Proportion of
receivable bad debts provision (%)
Within 1 year 409,556.67
1-2 years 566.00 28.30 5.00
2-3 years 785.00 117.75 15.00
3-4 years 18,633.00 4,658.25 25.00
4-5 years 3,397.00 1,698.50 50.00
Over 5 years 67,572.80 67,572.80 100.00
Total 500,510.47 74,075.60
5.2.2 Provision, reversal or recovery of provision for bad debts in 2018
The provision for bad debts made in 2018 amounted to RMB 5,555.35.
5.2.3 Top five accounts receivable in terms of their balance as at December 31, 2018
collected by the debtor
Balance as at December 31, 2018
Name of entity Accounts Proportion in the total Provision for
receivable accounts receivable (%) bad debts
Shanghai Hecheng International Travel
Service Co., Ltd. 256,931.20 51.33
Beijing Tongcheng Huading International
Travel Service Co., Ltd. Suzhou Branch 101,510.00 20.28
Guangzhou Institute of Design 38,980.00 7.79 38,980.00
Yangpu Huayu Road and Bridge
Technology Co., Ltd. 18,633.00 3.72 4,658.25
Tianjin Watermelon Tourism Limited
Liability Company 14,376.24 2.87
Total 430,430.44 85.99 43,638.25
5.3 Advances to suppliers
5.3.1 Advances to suppliers presented by aging
Balance as at December 31, 2018 Balance as at January 1, 2018
Aging
Book balance Proportion (%) Book balance Proportion (%)
Within 1 year 49,530.21 100.00
Total 49,530.21 100.00
Remark: advances to suppliers are prepaid amounts for newspapers and software
maintenance. In 2018, advances to suppliers were reclassified into item "other current
assets" for presentation.
5.4 Other receivables
Balance as at Balance as at
Item
December 31, 2018 January 1, 2018
Interest receivable
Dividends receivable
Notes to the Financial Statements Page 28
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
Balance as at Balance as at
Item
December 31, 2018 January 1, 2018
Other receivables 458,242.73 139,561.29
Total 458,242.73 139,561.29
Notes to the Financial Statements Page 29
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
5.4.1 Other receivables disclosed by category:
Balance as at December 31, 2018 Balance as at January 1, 2018
Book balance Provision for bad debts Book balance Provision for bad debts
Category
Proportion Proportion of Book value Proportion Proportion of Book value
Amount Amount Amount Amount
(%) provision (%) (%) provision (%)
Other receivables with individually significant
amount and individual provision for bad debts
Other receivables with provision for bad debts made
by portfolio 460,178.73 100.00 1,936.00 0.42 458,242.73 160,709.19 100.00 21,147.90 13.16 139,561.29
Other receivables with individually insignificant
amount and individual provision for bad debts
Total 460,178.73 100.00 1,936.00 458,242.73 160,709.19 100.00 21,147.90 139,561.29
Notes to the Financial Statements Page 30
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
In portfolio, other receivables with provision for bad debts made by the aging analysis
method:
Balance as at December 31, 2018
Aging Provision for Proportion of
Book balance
bad debts provision (%)
Within 1 year 457,942.73
1-2 years
2-3 years
3-4 years
4-5 years 600.00 300.00 50.00
Over 5 years 1,636.00 1,636.00 100.00
Total 460,178.73 1,936.00
5.4.2 Provision, reversal or recovery of provision for bad debts in 2018
The provision for bad debts made in 2018 amounted to RMB -19,211.90.
5.4.3 Classification of other receivables by the nature of payment
Book balance as at Book balance as at
Nature of payment
December 31, 2018 January 1, 2018
Utility bills 185,368.69 70,809.03
Petty cash 133,411.23 49,281.48
Attorney fee 77,534.25
Individual social insurance and
provident funds 63,264.56 40,018.68
Deposit 600.00 600.00
Total 460,178.73 160,709.19
5.4.4 Top five other receivables in terms of their ending balance collected by the debtor
Proportion in the Balance of
Balance as at total balance of provision for
Nature of
Name of entity December Aging other receivables bad debts as at
payment
31, 2018 as at December December 31,
31, 2018 (%) 2018
Hainan Hangpai Catering Co., Ltd. Utility bills 113,176.77 Within 1 year 24.59
Hainan New Concept Law Firm Attorney fee 77,534.25 Within 1 year 16.85
Yang Yunhui Petty cash 48,331.50 Within 1 year 10.50
Peng Guoxing Utility bills 41,589.36 Within 1 year 9.04
Wen Ping Petty cash 30,000.00 Within 1 year 6.52
Total 310,631.88 67.50
5.5 Inventories
5.5.1 Classification of inventories
Balance as at December 31, 2018 Balance as at January 1, 2018
Item Provision for Provision for
Book balance inventory Book value Book balance inventory Book value
depreciation depreciation
Raw materials 870,043.52 725,731.58 144,311.94 880,621.58 735,181.58 145,440.00
Food and drinks 43,935.10 43,935.10 45,640.74 45,640.74
Notes to the Financial Statements Page 31
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
Balance as at December 31, 2018 Balance as at January 1, 2018
Item Provision for Provision for
Book balance inventory Book value Book balance inventory Book value
depreciation depreciation
Commodity stocks 22,771.38 11,102.41 11,668.97 22,771.38 11,102.41 11,668.97
Fuel 21,474.18 21,474.18 24,255.40 24,255.40
Total 958,224.18 736,833.99 221,390.19 973,289.10 746,283.99 227,005.11
Notes to the Financial Statements Page 32
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
5.5.2 Provision for inventory depreciation
Balance as at Increase in 2018 Decrease in 2018 Balance as at
Category of inventory January 1, Reversal or December 31,
Provision Others Others
2018 write-off 2018
Raw materials 735,181.58 9,450.00 725,731.58
Stock commodities 11,102.41 11,102.41
Total 746,283.99 9,450.00 736,833.99
Remark: The reason for write-off is that a batch of hotel bathrobes were subject to loss
reporting as they can no longer be used due to long-term storage.
5.6 Non-current assets maturing within one year
Balance as at Balance as at
Item Remarks
December 31, 2018 January 1, 2018
Hotel exterior repair,
and transformation of
Long-term deferred expenses to be amortized guest rooms, swimming
within one year 1,173,597.68 pools and others
Total 1,173,597.68
Remark: The reason for the decrease of the ending balance, compared with the beginning balance,
was that such item was included in item "long-term deferred expenses" for amortization.
5.7 Other current assets
Balance as at Balance as at
Item
December 31, 2018 January 1, 2018
Prepaid enterprise income tax 1,702,702.80 1,702,702.80
Input tax to be deducted 103,556.98 255,160.76
Prepaid deferred expenses 39,960.01
Total 1,846,219.79 1,957,863.56
5.8 Investment properties
Investment properties measured at cost
Buildings and Land use
Item Total
constructions rights
1. Original book value
(1) Beginning balance 18,856,504.44 5,662,740.59 24,519,245.03
(2) Increase in 2018
- Purchase
- Transfer from inventories/fixed
assets/construction in progress
- Increase from business combinations
(3) Decrease in 2018
- Disposal
(4) Ending balance 18,856,504.44 5,662,740.59 24,519,245.03
2. Accumulated depreciation and
accumulated amortization
(1) Beginning balance 10,189,399.98 2,163,386.45 12,352,786.43
Notes to the Financial Statements Page 33
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
Buildings and Land use
Item Total
constructions rights
(2) Increase in 2018 418,183.56 56,340.00 474,523.56
- Provision or amortization 418,183.56 56,340.00 474,523.56
(3) Decrease in 2018
- Disposal
(4) Ending balance 10,607,583.54 2,219,726.45 12,827,309.99
3. Provision for impairment
(1) Beginning balance 1,404,400.47 1,903,054.14 3,307,454.61
(2) Increase in 2018
- Provision
(3) Decrease in 2018
- Disposal
(4) Ending balance 1,404,400.47 1,903,054.14 3,307,454.61
4. Book balance
(1) Book value as at December 31, 2018 6,844,520.43 1,539,960.00 8,384,480.43
(2) Book value as at January 1, 2018 7,262,703.99 1,596,300.00 8,859,003.99
5.9 Fixed assets
5.9.1 Fixed assets and disposal of fixed assets
Balance as at Balance as at
Item
December 31, 2018 January 1, 2018
Fixed assets 36,497,869.65 39,088,708.83
Disposal of fixed assets
Total 36,497,869.65 39,088,708.83
5.9.2 Fixed assets details
Buildings and Machinery Electronic Other
Item Vehicles Total
constructions equipment equipment equipment
1. Original book
value
(1) Beginning
balance 136,789,501.82 13,279,932.54 2,345,074.91 2,623,443.45 2,059,888.17 157,097,840.89
(2) Increase in 2018 3,200.00 305,254.81 117,668.67 426,123.48
- Purchase 3,200.00 82,783.15 117,668.67 203,651.82
- Transfer from
construction in
progress 222,471.66 222,471.66
(3) Decrease in 2018 2,249,582.00 264,169.87 251,105.00 2,764,856.87
- Disposal or
write-off 2,249,582.00 264,169.87 251,105.00 2,764,856.87
(4) Ending balance 136,789,501.82 11,033,550.54 2,345,074.91 2,664,528.39 1,926,451.84 154,759,107.50
2. Accumulated
amortization
(1) Beginning 70,320,351.57 9,371,050.71 1,415,798.92 2,012,775.79 1,288,515.64 84,408,492.63
Notes to the Financial Statements Page 34
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
Buildings and Machinery Electronic Other
Item Vehicles Total
constructions equipment equipment equipment
balance
(2) Increase in 2018 2,178,992.93 288,053.85 171,223.62 178,391.32 170,609.68 2,987,271.40
- Provision 2,178,992.93 288,053.85 171,223.62 178,391.32 170,609.68 2,987,271.40
(3) Decrease in 2018 1,689,043.68 252,314.01 234,333.85 2,175,691.54
- Disposal or
write-off 1,689,043.68 252,314.01 234,333.85 2,175,691.54
(4) Ending balance 72,499,344.50 7,970,060.88 1,587,022.54 1,938,853.10 1,224,791.47 85,220,072.49
3. Provision for
impairment
(1) Beginning
balance 31,072,788.17 2,527,851.26 33,600,639.43
(2) Increase in 2018
- Provision
(3) Decrease in 2018 559,474.07 559,474.07
- Disposal or
write-off 559,474.07 559,474.07
(4) Ending balance 31,072,788.17 1,968,377.19 33,041,165.36
4. Book value
(1) Book value as at
December 31, 2018 33,217,369.15 1,095,112.47 758,052.37 725,675.29 701,660.37 36,497,869.65
(2) Book value as at
January 1, 2018 35,396,362.08 1,381,030.57 929,275.99 610,667.66 771,372.53 39,088,708.83
Remark: there were no temporarily idle fixed assets, and no secured or guaranteed fixed
assets as at the end of the period.
5.10 Construction in progress
5.10.1 Construction in progress and project materials
Balance as at Balance as at
Item
December 31, 2018 January 1, 2018
Construction in progress
Project materials
Total
Notes to the Financial Statements Page 35
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
5.10.2 Construction in progress details
Proportion of
Amount Transfer into Including:
accumulative Accumulated Capitalization
Balance as at transferred long-term Balance as at Project capitalization
Increase in project capitalization rate of the Sources of
Project name Budget January 1, into fixed deferred December progress amount of
2018 investments amount of interest in funds
2018 assets in expenses in 31, 2018 (%) the interest
in the budget interest 2018 (%)
2018 2018 in 2018
(%)
Hotel video
surveillance system
project 222,471.66 222,471.66 Self-raised
latoT 222,471.66 222,471.66
Notes to the Financial Statements Page 36
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
5.11 Intangible assets
Item Land use rights Total
1. Original book value
(1) Beginning balance 81,653,137.15 81,653,137.15
(2) Increase in 2018
- Purchase
- Internal research and development
(3) Decrease in 2018
- Disposal
- Transfer into investment properties
(4) Ending balance 81,653,137.15 81,653,137.15
2. Accumulated amortization
(1) Beginning balance 31,194,664.11 31,194,664.11
(2) Increase in 2018 812,387.16 812,387.16
- Provision 812,387.16 812,387.16
(3) Decrease in 2018
- Disposal
- Transfer into investment properties
(4) Ending balance 32,007,051.27 32,007,051.27
3. Provision for impairment
(1) Beginning balance 27,440,836.84 27,440,836.84
(2) Increase in 2018
- Provision
(3) Decrease in 2018
- Disposal
- Transfer into investment properties
(4) Ending balance 27,440,836.84 27,440,836.84
4. Book value
(1) Book value as at December 31, 2018 22,205,249.04 22,205,249.04
(2) Book value as at January 1, 2018 23,017,636.20 23,017,636.20
5.12 Long-term deferred expenses
Increase in 2018
Transfer of
Balance as at long-term Amount of Balance as at
Amortization
Item January deferred Other other December
in 2018
1, 2018 expenses increases decreases 31, 2018
maturing within
one year
Hotel exterior decoration 486,974.55 584,369.42 584,369.40 486,974.57
Reconstruction of fire-fighting stairway 45,695.16 17,135.68 17,135.64 45,695.20
Swimming pool reconstruction 224,969.28 59,991.81 59,991.81 224,969.28
Reconstruction of guest rooms in Building 721,297.31 192,345.95 192,345.95 721,297.31
Notes to the Financial Statements Page 37
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
Increase in 2018
Transfer of
Balance as at long-term Amount of Balance as at
Amortization
Item January deferred Other other December
in 2018
1, 2018 expenses increases decreases 31, 2018
maturing within
one year
C
Villa reconstruction 1,199,080.58 319,754.82 153,145.41 358,041.10 1,313,939.71
Total 2,678,016.88 1,173,597.68 153,145.41 1,211,883.90 2,792,876.07
Note: RMB 1,173,597.68 of long-term deferred expenses maturing within one year are transferred
in. See Note 5.6 for details.
Notes to the Financial Statements Page 38
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
5.13 Notes payable and accounts payable
Balance as at Balance as at
Item
December 31, 2018 January 1, 2018
Notes payable
Accounts payable 1,607,835.81 2,161,172.26
Total 1,607,835.81 2,161,172.26
5.13.1 Presentation of accounts payable by item
Balance as at Balance as at
Item
December 31, 2018 January 1, 2018
Payment for purchase 687,690.30 945,061.67
Accounts payable provisionally estimated 534,359.35 738,044.28
Service charges 155,368.88 139,336.50
Payment for projects 134,274.10 197,246.60
Elevator maintenance fee 31,670.00 44,270.00
Advertisement fees 31,195.28 53,200.74
Consignment sales 22,335.90 22,335.90
Others 10,942.00 21,676.57
Total 1,607,835.81 2,161,172.26
5.13.2 Significant accounts payable with aging over one year:
Reasons for
Balance as at
Item repayment failure
December 31, 2018
or carry-forward
Hainan Huanyu Decoration Design
Engineering Co., Ltd. 134,274.10 Unsettlement
Total 134,274.10
5.14 Advance from customers
5.14.1 Presentation of advances from customers
Balance as at Balance as at
Item
December 31, 2018 January 1, 2018
Room and meal fees 1,291,293.05 1,271,174.12
Total 1,291,293.05 1,271,174.12
5.14.2 Significant advances from customers with aging over one year
Reasons for
Balance as at
Item repayment failure
December 31, 2018
or carry-forward
Guangzhou Nanbu Holiday International
Travel Service Co., Ltd. Sanya Branch 101,244.00 Unsettlement
Hainan Xiangyuan Tourism Development
Co., Ltd. 58,745.00 Unsettlement
PEGAS Zheng Qingbo 32,243.02 Unsettlement
Notes to the Financial Statements Page 39
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
Reasons for
Balance as at
Item repayment failure
December 31, 2018
or carry-forward
Hainan Qiongzhong Ecological
Investment Guarantee Co., Ltd. 27,519.00 Unsettlement
Sanya City Public Security Fire Brigade 19,420.88 Unsettlement
Total 239,171.90
Notes to the Financial Statements Page 40
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
5.15 Employee compensation payable
5.15.1 Classification of employee compensation payable
Balance as at Balance as at
Increase in Decrease in
Item January 1, December 31,
2018 2018
2018 2018
Short-term compensation 2,459,015.93 12,365,770.71 11,983,524.29 2,841,262.35
Post-employment benefits -
defined contribution plans 1,113,426.25 1,113,426.25
Dismissal welfare
Other benefits maturing within
one year
Total 2,459,015.93 13,479,196.96 13,096,950.54 2,841,262.35
5.15.2 Presentation of short-term compensation
Balance as at Balance as at
Increase in Decrease in
Item January 1, December 31,
2018 2018
2018 2018
(1) Salaries, bonuses, allowances
and subsidies 1,473,572.82 9,935,610.90 9,653,334.08 1,755,849.64
(2) Employee welfare expenses 1,411,271.17 1,411,271.17
(3) Social insurance premiums 502,820.66 502,820.66
Including: medical insurance
premiums 460,760.31 460,760.31
Work-related injury insurance
premiums 13,028.21 13,028.21
Maternity insurance premiums 29,032.14 29,032.14
(4) Housing provident funds 168,065.00 168,065.00
(5) Labor union expenditures and
employee education funds 985,443.11 348,002.98 248,033.38 1,085,412.71
(6) Short-term compensated
absences
(7) Short-term profit-sharing plan
Total 2,459,015.93 12,365,770.71 11,983,524.29 2,841,262.35
5.15.3 Presentation of defined contribution plans
Balance as at Balance as at
Increase in Decrease in
Item January 1, December 31,
2018 2018
2018 2018
Basic endowment insurance
premiums 1,087,369.88 1,087,369.88
Unemployment insurance
premiums 26,056.37 26,056.37
Total 1,113,426.25 1,113,426.25
5.16 Taxes and surcharges payable
Notes to the Financial Statements Page 41
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
Balance as at Balance as at
Taxes and surcharges
December 31, 2018 January 1, 2018
Value added tax (VAT) 146,863.56 222,989.34
Housing property tax 194,101.69 194,101.74
Land use tax 108,590.92 108,590.91
Urban maintenance and construction tax 761.67 7,782.70
Educational surtax 326.42 3,335.43
Local education surtax 217.63 2,223.64
Individual income tax -0.02
Total 450,861.87 539,023.76
5.17 Other payables
Balance as at Balance as at
Item
December 31, 2018 January 1, 2018
Interest payable
Dividends payable
Other payables 2,727,483.66 2,411,176.59
Total 2,727,483.66 2,411,176.59
5.17.1 Presentation of other payables by nature
Balance as at Balance as at
Item
December 31, 2018 January 1, 2018
Employee dormitory rental fees, etc. 971,723.12 742,742.74
Margin 890,958.75 711,046.99
Audit fee 285,003.21 285,003.21
Quality guarantee deposit for projects 190,344.00 193,066.10
Employee deposit 165,700.90 166,200.90
Project funds 162,569.78 162,569.78
Funds collected and remitted 36,408.47 100,036.07
Individual current amounts 1,364.00 29,810.80
Electric charges withheld 23,411.43 20,700.00
Total 2,727,483.66 2,411,176.59
5.17.2 Other significant payables with aging over one year
Balance as at Reasons for
Item December 31, repayment failure
2018 or carry-forward
Yangpu Jinyu Industrial Co., Ltd. 627,000.00 Unsettlement
Hong Kong Deloitte & Touche LLP 285,003.21 Unsettlement
Sanya Shuxin Housing Waterproof
Engineering Co., Ltd. 170,000.00 Unsettlement
Notes to the Financial Statements Page 42
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
Balance as at Reasons for
Item December 31, repayment failure
2018 or carry-forward
China Building Decoration Company Hainan
Branch 161,111.03 Unsettlement
Total 1,243,114.24
5.18 Estimated liabilities
Balance as at Balance as at
Item
December 31, 2018 January 1, 2018
Provisions for arrears of electricity tariffs 1,489,685.04 1,489,685.04
Total 1,489,685.04 1,489,685.04
Note: See Note 10 for details.
5.19 Share capital
Changes in 2018 ("+" for increase and "-" for decrease)
Balance as at Balance as at
Conversion of
Item January 1, Issuance of Share December 31,
reserves into Others Sub-total
2018 new shares donation 2018
share
Total shares 364,100,000.00 364,100,000.00
Notes to the Financial Statements Page 43
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
5.20 Capital reserves
Balance as at Balance as at
Increase Decrease
Item January 1, December 31,
in 2018 in 2018
2018 2018
Capital premium (share premium) 33,336,215.58 33,336,215.58
Other capital reserves 20,806,634.43 20,806,634.43
Total 54,142,850.01 54,142,850.01
5.21 Undistributed profit
Item Year 2018 Year 2017
Undistributed profit as at the end of the previous period
before adjustment -341,107,435.91 -343,966,434.57
Total adjustment to undistributed profit as at the
beginning of the year ("+" for increase and "-" for
decrease)
Undistributed profit as at the beginning of the year after
adjustment -341,107,435.91 -343,966,434.57
Plus: net profit attributable to owners of the parent
company in the current period 653,282.19 2,858,998.66
Less: withdrawal of statutory surplus reserves
Withdrawal of discretionary surplus reserves
Withdrawal of general risk reserves
Common stock dividends payable
Common stock dividends transferred to share capital
Undistributed profit as at the end of the period -340,454,153.72 -341,107,435.91
5.22 Operating revenue and operating cost
5.22.1 Operating revenue and operating cost
Year 2018 Year 2017
Item
Revenue Cost Revenue Cost
Primary business 26,442,049.47 11,280,674.54 24,691,592.86 10,665,396.03
Other business 3,073,542.86 474,523.56 3,214,971.37 474,523.56
Total 29,515,592.33 11,755,198.10 27,906,564.23 11,139,919.59
Note: Other business income mainly refers to house rental income.
5.22.2 Primary business (by industry)
Year 2018 Year 2017
Industry name
Operating revenue Operating cost Operating revenue Operating cost
Tourism and catering
services 26,442,049.47 11,280,674.54 24,691,592.86 10,665,396.03
Total 26,442,049.47 11,280,674.54 24,691,592.86 10,665,396.03
5.22.3 Primary business (by product)
Product Name Year 2018 Year 2017
Notes to the Financial Statements Page 44
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
Operating revenue Operating cost Operating revenue Operating cost
Room income 22,731,299.15 9,307,117.61 21,103,123.09 8,758,364.38
Catering
entertainment income 3,710,750.32 1,973,556.93 3,588,469.77 1,907,031.65
Total 26,442,049.47 11,280,674.54 24,691,592.86 10,665,396.03
Notes to the Financial Statements Page 45
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
5.22.4 Primary business (by region)
Year 2018 Year 2017
Name of region
Operating revenue Operating cost Operating revenue Operating cost
Hainan 26,442,049.47 11,280,674.54 24,691,592.86 10,665,396.03
Total 26,442,049.47 11,280,674.54 24,691,592.86 10,665,396.03
5.23 Taxes and surcharges
Item Year 2018 Year 2017
Housing property tax 862,349.51 872,805.50
Land use tax 434,363.69 434,366.47
Urban construction tax 42,817.66 68,334.72
Educational surtax 18,350.43 28,958.58
Local education surtax 12,233.60 19,786.33
Stamp tax 851.70 2,760.60
Vehicle and vessel use tax 3,669.06 7,680.00
Disabled security funds 19,245.72
Total 1,393,881.37 1,434,692.20
5.24 Selling expenses
Item Year 2018 Year 2017
Employee compensation 3,136,915.23 2,740,921.77
Social insurance premiums 590,896.77 507,289.20
Depreciation 519,700.72 493,761.97
Welfare expenses 393,492.00 392,059.00
Repair charges 246,435.46 205,614.06
Utility bills 173,016.68 166,983.08
Labor union expenditures and employee education funds 110,092.08 95,932.28
Housing provident funds 59,985.00 46,950.00
Other expenses 388,546.01 474,992.19
Total 5,619,079.95 5,124,503.55
5.25 General and administrative expenses
Item Year 2018 Year 2017
Salaries and welfares 5,724,279.10 5,402,093.17
Amortization of site use rights 812,387.16 812,387.16
Entertainment expenses 680,606.62 715,630.35
Social labor insurance premium 670,247.63 610,092.44
Agency fee 468,000.00 400,000.00
Depreciation 306,741.99 271,883.34
Announcing fees 280,218.00 328,688.00
Travel expenses 244,926.48 206,199.69
Notes to the Financial Statements Page 46
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
Item Year 2018 Year 2017
Housing provident funds 72,005.00 65,065.84
Membership expenses of the board of directors and the
board of supervisors 30,556.00 9,535.00
Disabled security funds 36,433.27
Other expenses 843,053.99 807,517.57
Total 10,133,021.97 9,665,525.83
Notes to the Financial Statements Page 47
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
5.26 Financial expenses
Item Year 2018 Year 2017
Interest expenses
Less: interest income 232,899.41 291,701.13
Profit or loss on exchange
Handling charges 44,620.81 42,524.95
Total -188,278.60 -249,176.18
5.27 Asset impairment loss
Item Year 2018 Year 2017
Losses from bad debts -13,656.55 11,709.50
Losses from depreciation of inventories
Total -13,656.55 11,709.50
5.28 Investment income
Breakdown of investment income
Item Year 2018 Year 2017
Income from other creditors' investment 805,825.24
Total 805,825.24
5.29 Non-operating revenue
Details of non-operating revenue by items
Amount included in
the current
Item Year 2018 Year 2017
non-recurring profit
or loss
Debt write-off 1,303,540.11
Others 273.00 260.00 273.00
Total 273.00 1,303,800.11 273.00
5.30 Non-operating expenses
Amount included in
the current
Item Year 2018 Year 2017
non-recurring profit
or loss
Losses from the damage and scrapping
of non-current assets 29,691.26 30,016.43 29,691.26
Overdue fines 133,645.64 133,645.64
Total 163,336.90 30,016.43 163,336.90
5.31 Notes to items of statement of cash flows
5.31.1 Cash received from other operating activities
Item Year 2018 Year 2017
Notes to the Financial Statements Page 48
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
Item Year 2018 Year 2017
Water, electrical and gas fees collected 1,406,063.94 684,442.21
Interest income 232,899.41 291,701.13
Security deposit for venue rental 25,500.00 75,000.00
Loan repayment by employees 252,257.44
Social security premium collected 15,515.52
Others 49,550.50 15,828.00
Total 1,966,271.29 1,082,486.86
Notes to the Financial Statements Page 49
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
5.31.2 Cash paid for other operating activities
Item Year 2018 Year 2017
Social intercourse fees 713,655.45 730,464.44
Intermediary service charges 400,000.00 400,000.00
Announcement fee 268,218.00 220,000.00
Expenses for business trips 235,245.87 181,369.69
Posts costs 42,387.66 27,493.61
Repair charges 316,876.61 291,287.80
Promotion fee 94,988.06 75,167.49
Costs of listing on the Shenzhen Stock Exchange 80,000.00 80,000.00
Fuel, water, electricity and gas charges 277,581.11 274,909.12
Office expenses 17,609.79 11,553.14
Financial expenses 44,620.81 42,524.95
Property insurance premiums 29,191.53 49,740.21
Membership expenses of the board of directors
and the board of supervisors 30,556.00 9,535.00
Lawyer fee 150,000.00
Other expenses 433,472.47 388,168.08
Fines paid for illegal operation of the Company's
stocks 500,000.00
Labor insurance premiums, housing provident
fund paid for individuals 592,554.72
Total 3,134,403.36 3,874,768.25
5.31.3 Cash paid for other investing activities
Item Year 2018 Year 2017
Fines and confiscated amounts for illegal
operation of the Company's stocks 19,310,000.00
Total 19,310,000.00
5.31.4 Cash received from other financing activities
Item Year 2018 Year 2017
Luoniushan Group Co., Ltd. 19,810,000.00
Total 19,810,000.00
5.31.5 Cash paid for other financing activities
Item Year 2018 Year 2017
Luoniushan Group Co., Ltd. 19,810,000.00
Total 19,810,000.00
5.32 Supplementary information to the statement of cash flows
5.32.1 Supplementary information to the statement of cash flows
Notes to the Financial Statements Page 50
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
Supplementary information Year 2018 Year 2017
1. Net profit adjusted to cash flows from
operating activities
Net profit 653,282.19 2,858,998.66
Plus: provision for impairment of assets -13,656.55 11,709.50
Depreciation of fixed assets, depletion of oil and
gas assets, and depreciation of productive
biological assets 3,405,454.96 3,193,715.81
Amortization of intangible assets 868,727.16 868,727.16
Amortization of long-term deferred expenses 1,211,883.90 733,104.44
Losses from disposal of fixed assets, intangible
assets and other long-term assets ("-" for gains) 29,172.48 30,016.43
Losses from write-off of fixed assets ("-" for
gains) 518.78
Losses from changes in fair value (“-” for gains)
Financial expenses ("-" for gains)
Investment losses ("-" for gains) -805,825.24
Decreases in deferred income tax assets ("-" for
increases)
Increases in deferred income tax liabilities ("-"
for decreases)
Decreases in inventories ("-" for increases) 15,064.92 -40.80
Decreases in operating payables (“-” for
increases) 23,845.11 14,283.36
Increases in operating payables ("-" for
decreases) 589,600.31 -1,777,400.85
Others
Net cash flow from operating activities 6,783,893.26 5,127,288.47
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 acquired under financing leases
3. Net changes in cash and cash equivalents
Ending balance of cash 15,364,355.30 9,681,607.16
Less: beginning balance of cash 9,681,607.16 27,210,248.01
Plus: ending balance of cash equivalents
Less: beginning balance of cash equivalents
Net increase in cash and cash equivalents 5,682,748.14 -17,528,640.85
5.32.2 Breakdowns of cash and cash equivalents
Balance as at Balance as at
Item
December 31, 2018 January 1, 2018
Notes to the Financial Statements Page 51
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
Balance as at Balance as at
Item
December 31, 2018 January 1, 2018
I. Cash 15,364,355.30 9,681,607.16
Including: cash on hand 347,782.65 264,156.33
Unrestricted cash at bank 15,016,572.65 9,417,450.83
Other unrestricted monetary funds
Deposits with central bank available for
payments
Deposits in banks and other financial
institutions
Loans to banks and other financial
institutions
II. Cash equivalents
Including: bond investments maturing
within three months
III. Beginning balance of cash and cash
equivalents 15,364,355.30 9,681,607.16
Including: cash and cash equivalents
restricted in use of the parent company or
subsidiaries of the Group
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The subsidiaries newly included in the consolidation scope in 2018
Reason for Net assets as at Net profit in Date of
Name
consolidation December 31, 2018 2018 establishment
Hainan Wengao Tourist Resources Development Co., Ltd. Newly established 999,768.27 -231.73 2018.6.6
seititne rehto ni stseretni dna sthgiR .7
Equity in subsidiaries
Structure of the enterprise group
Principal place of Business Shareholding ratio (%) Method of
Name of subsidiary Registration place
business nature Direct Indirect acquisition
Block B, Main Building,
Hainan Dadonghai Tourism
Centre (Holdings) Co., Ltd., Leasing and
No. 2, Yuhai Road, Jiyang commercial
Hainan Wengao Tourist Resources District, Sanya City, Hainan service Newly
Development Co., Ltd. Sanya, Hainan Province industries 100.00 established
8. stnemurtsni laicnanif ot detaler sksiR
During its business operation, the Company faces various financial risks, including credit risks, market
risks and liquidity risks. The Board of Directors of the Company takes full responsibilities for
determining the risk management objects and policies and bearing the ultimate liabilities for that,
however, the Board of Directors has authorized the management department of the Company to design
and implement the process capable of ensuring the effective implementation of the risk management
objects and policies. The Board of Directors reviews the effectiveness of the enforced procedures and the
rationality of risk management objectives and policies by the reports submitted by the management
department of the Company. The internal auditors of the Company also will audit the risk management
policies and procedures, and report the relevant facts to the audit committee.
Notes to the Financial Statements Page 52
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
The overall objective of risk management of the Company is to prepare the risk management policies
ensuring the risk under control as far as possibility without affecting the Company's business
development goals.
8.1 Credit risk
Credit risk refers to a risk that one party to the financial instruments suffers financial losses due to
the failure of the other party in performing the obligations. The Company mainly faces customer
credit risks caused by sales on account. Before signing a new contract, the Company will
understand and assess credit risks of the new customer. The Company rates the credit of existing
customers and analyzes the aging of accounts receivable to ensure that the Company's overall
credit risk is within the controllable range.
8.2 Market risk
Market risk associated with financial instruments refers to the risk that fair value or future cash
flows of financial instruments fluctuate due to variations in market prices, and it includes
exchange rate risk, interest rate risk and other price risks.
8.3 Liquidity risk
Liquidity risk refers to a risk that an enterprise suffers funds shortage in performing the
obligations of settlement in cash or other financial assets. The policy of the Company is to ensure
that there is sufficient cash for the payment of the matured debts. Liquidity risk is under
centralized control of the financial department of the Company. The financial department monitors
cash balance and readily realizable and marketable securities and makes rolling forecast on cash
flows of the next 12 months to ensure that the Company has sufficient funds to repay debts in all
cases of reasonable prediction.
Notes to the Financial Statements Page 53
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
ssnnooiittccaassnnaarrtt yyttrraapp ddeettaalleerr ddnnaa sseeiittrraapp ddeettaalleeRR .9
9.1 The largest shareholder of the Company
Ratio of
Registered Shareholding voting
Name of the capital
Related party Type of Registration Legal Business ratio in the right in
largest
relationships enterprise place representative nature Company the
shareholder
(RMB'0,000) (%) Company
(%)
Planting
and
Luoniushan The largest Listed breeding
Co., Ltd. shareholder company Haikou Xu Zili industry 115,151.00 19.80 19.80
Remark: as at December 31, 2018, Luoniushan Co., Ltd. (hereinafter referred to as "Luoniushan")
and its wholly-owned subsidiary Hainan Ya'anju Property Services Co., Ltd. held a total of
72,092,000 A shares of the Company, accounting for 19.80 % of the Company's total share capital,
so it is the Company's largest shareholder.
9.2 Related party transactions
9.2.1 Sales of goods and rendering of labor services
Pricing and Year 2018 Year 2017
Content of decision-making Proportion Proportion
Related party related-party process of in similar in similar
Amount Amount
transaction related-party transaction transaction
transactions (%) (%)
Room and meal
Luoniushan Co., Ltd. fees Market price 325,905.66 1.23 787,474.00 3.19
9.2.2 Receivables and payables of the related party
Balance as at Balance as at
Item name Related party
December 31, 2018 January 1, 2018
Accounts
receivable Luoniushan Co., Ltd. 13,153.00 166,412.00
9.2.3 Key management personnel emoluments
Year 2018 Year 2017
Item name
(RMB'0,000) (RMB'0,000)
Key management personnel emoluments 163.02 188.57
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10.1 The Company owed the electricity bill to the Sanya Power Supply Bureau. On May 26, 2016, the
Company received a lawyer letter from Hainan Yunfan Law Firm entrusted by Sanya Power
Supply Bureau of Hainan Power Grid Co., Ltd. (hereinafter referred to as "Sanya Power Supply
Bureau"), saying that Sanya Power Supply Bureau found, in verifying electricity consumption by
South China Hotel, a subsidiary of the Company, that the current transformer (CT) installed in
the distribution center metering counters in South China Hotel installed was inconsistent with the
record in the marketing management system file of Sanya Power Supply Bureau, and the
duration of the inconsistence was from July 2006 when South China Hotel changed its electricity
consumption measuring device to April 2016. According to the statistics, electricity consumption
of 10313373 KWH was measured in short, which was estimated to be valued at RMB
7,200,165.75 according to the electricity prices and surcharge rates in the years.
According to the Legal Consultation Advice on Electricity Quantity (Electricity Charge) Claiming
Dispute between South China Hotel and Sanya Power Supply Bureau issued by Beijing Junhe
(Haikou) Law Firm on December 20, 2016, as all electricity consumption metering devices are
purchased, installed, sealed, opened and replaced by Sanya Power Supply Bureau Responsible, the
short measurement of electricity charge from South China Hotel for many years was due to the
Notes to the Financial Statements Page 54
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
fault of Sanya Power Supply Bureau, and was irrelevant to South China Hotel. Pursuant to Article
135 of the General Principles of Civil Law: "Except as otherwise stipulated by law, the limitation
of action regarding applications to a people's court for protection of civil rights shall be two years.,
the Company accrued an amount of RMB 1,489,685.04 for the electricity charge for electricity
quantity measured in short during two years from April 2014 to April 2016. As at December 31,
2018, no further progress was made on this matter.
10.2 China Cinda Asset Management Co., Ltd. Hainan Branch (hereinafter referred to as “Hainan
Cinda”) sued the Company for the case on joint liability of Dadonghai Group's loan principal and
interest. Hainan Dadonghai Tourism Centre Group Co., Ltd. (hereinafter referred to as
“Dadonghai Group”) and the People’s Construction Bank Sanya Branch (hereinafter referred to
as “CCB Sanya Branch”) signed a loan contract "(95) GLZ No.20" on December 25, 1995.
Sanya Yueya Real Estate Development Corporation (hereinafter referred to as “Yueya
Company”) assumed the guarantee responsibility for the loan. The loan principal was RMB 5
million and the interest and overdue penalty interest was agreed. The loan period was from
December 25, 1995 to December 25, 1996.Later, the creditor's right was transferred to Hainan
Xinda from CCB Sanya Branch in 1999. Hainan Xinda, as a new creditor, has the right to
recover the principal and interest of the inheritable creditor's rights. As at April 30, 2018, the
defendant Dadonghai Group still failed to repay the loan as agreed, and Yueya Company has not
fulfilled the guarantee obligation of the above loan contract. Therefore, Hainan Xinda filed a
lawsuit with the Intermediate People's Court Sanya, requesting that Dadonghai Group will repay
the principal and interest of RMB 34,131,700 to the plaintiff, and Yueya Company will assume
the joint guarantee responsibility for settlement. In the course of the trial, Hainan Xinda applied
for the addition of the Company as the co-defendant of the case on the ground that the Company
as the "shareholder" of Dadonghai Group failed to make contribution, requesting the Company to
assume the joint guarantee responsibility for settlement for the above debts of Dadonghai Group.
On January 3, 2019, the Company received the civil judgment of the Intermediate People's Court
Sanya [(2018) Q02MC No.76], rejecting the claim of the plaintiff Hainan Xinda. The case
acceptance fee and property preservation application fee were borne by Hainan Xinda. The
plaintiff Hainan Xinda refused to accept the first-instance judgment and has filed an appeal. At
present, the case is still under trial.
stnemtimmoC .11
According to the requirements of the China Securities Regulatory Commission (hereinafter referred to as
"CSRC") on the Guidelines for the Supervision of Listed Companies No.4--Commitments of and
Performance of Commitments by Actual Controllers, Shareholders, Related Parties, Acquirers of Listed
Companies and Listed Companies (Announcement of the China Securities Regulatory Commission
[2013] No.55), on June 7, 2014, Luoniushan Co., Ltd.(hereinafter referred to as “Luoniushan”) issued a
Letter regarding the Change of Luoniushan Co., Ltd.’s Commitment to Hainan Dadonghai Tourism
Centre (Holdings) Co., Ltd. to the Company, committing that, within three years from the date when the
change of such commitment is reviewed and adopted at the Company's general meeting, Luoniushan
will actively seek restructuring party who will conduct the asset restructuring on the Company. The
above matters were reviewed and approved by the board of shareholders of the Company on June 27,
2014.
On June 23, 2017, Luoniushan issued a Letter regarding the Change of Luoniushan Co., Ltd.’s
Commitment Duration to Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd., and extended the
implementation period of the above restructuring commitment made by Luoniushan to the Company,
that is, the deadline for the implementation period of the restructuring commitment was changed to
December 27, 2017.
As of December 31, 2018, no further progress was made on the above-mentioned asset restructuring
commitments.
Notes to the Financial Statements Page 55
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
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On February 24, 2019, as resolved at the 4th meeting of the 9th board of directors of the Company, the
Company does not intend to make profit distribution or convert capital reserve into share capital.
stneve tnacifingis rehtO .31
13.1 Correction of accounting errors in previous periods
13.1.1 Retroactive restatement method
There was no correction of accounting errors in prior periods made under the
retrospective restatement method during the reporting period.
13.1.2 Prospective application method
There was no correction of accounting errors in prior period under the prospective
application method adopted during the current reporting period.
13.2 Miscellaneous
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14.1 Notes receivable and accounts receivable
Balance as at Balance as at
Item
December 31, 2018 January 1, 2018
Notes receivable
Accounts receivable 426,434.87 594,130.89
Total 426,434.87 594,130.89
Notes to the Financial Statements Page 56
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
14.1.1 Disclosure of accounts receivable by category
Balance as at December 31, 2018 Balance as at January 1, 2018
Book balance Provision for bad debts Book balance Provision for bad debts
Category
Proportion Proportion of Book value Proportion Proportion of Book value
Amount Amount Amount Amount
(%) provision (%) (%) provision (%)
Account receivables with individually significant
amount and individual provision for bad debts
Accounts receivable with provision for bad debts
made by portfolio 500,510.47 100.00 74,075.60 14.80 426,434.87 662,651.14 100.00 68,520.25 10.34 594,130.89
Accounts receivable with individually insignificant amount
and individual provision for bad debts
Total 500,510.47 100.00 74,075.60 426,434.87 662,651.14 100.00 68,520.25 594,130.89
Notes to the Financial Statements Page 57
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
In portfolio, accounts receivable with the provision for bad debts made by the aging
analysis method:
Balance as at December 31, 2018
Aging Proportion
Accounts Provision for
of provision
receivable bad debts
(%)
Within 1 year 409,556.67
1-2 years 566.00 28.30 5.00
2-3 years 785.00 117.75 15.00
3-4 years 18,633.00 4,658.25 25.00
4-5 years 3,397.00 1,698.50 50.00
Over 5 years 67,572.80 67,572.80 100.00
Total 500,510.47 74,075.60
14.1.2 Provision, reversal or recovery of bad debt reserves in current period
The amount of provision for bad debts accrued in current period was RMB 5,555.35.
14.1.3 Top five of accounts receivable in terms of their ending balance collected by the
debtor
Balance as at December 31, 2018
Name of entity Proportion in the
Accounts Provision for
total accounts
receivable bad debts
receivable (%)
Shanghai Hecheng International
Travel Service Co., Ltd. 256,931.20 51.33
Beijing Tongcheng Huading
International Travel Service
Co., Ltd. Suzhou Branch 101,510.00 20.28
Guangzhou Institute of Design 38,980.00 7.79 38,980.00
Yangpu Huayu Road and
Bridge Technology Co., Ltd. 18,633.00 3.72 4,658.25
Tianjin Watermelon Tourism
Limited Liability Company 14,376.24 2.87
Total 430,430.44 85.99 43,638.25
14.2 Other receivables
Balance as at Balance as at
Item
December 31, 2018 January 1, 2018
Interest receivable
Dividends receivable
Other receivables 458,242.73 139,561.29
Total 458,242.73 139,561.29
Notes to the Financial Statements Page 58
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
14.2.1 Disclosure of other receivables by category:
Balance as at December 31, 2018 Balance as at January 1, 2018
Book balance Provision for bad debts Book balance Provision for bad debts
Category Book
Proportion Proportion of Proportion Proportion of Book value
Amount Amount value Amount Amount
(%) provision (%) (%) provision (%)
Other receivables with individually significant
amount and individual provision for bad debts
Other receivables with provision for bad debts made
by portfolio 460,178.73 100.00 1,936.00 0.42 458,242.73 160,709.19 100.00 21,147.90 13.16 139,561.29
Other receivables with individually insignificant
amount and individual provision for bad debts
Total 460,178.73 100.00 1,936.00 458,242.73 160,709.19 100.00 21,147.90 139,561.29
Notes to the Financial Statements Page 59
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
In portfolio, other receivables with provision for bad debts made by the aging analysis
method:
Balance as at December 31, 2018
Aging Provision for Proportion of
Book balance
bad debts provision (%)
Within 1 year 457,942.73
1-2 years
2-3 years
3-4 years
4-5 years 600.00 300.00 50.00
Over 5 years 1,636.00 1,636.00 100.00
Total 460,178.73 1,936.00
14.2.2 Provision, reversal or recovery of bad debt reserves in 2018
The amount of provision for bad debts accrued in current period was RMB -19,211.90.
14.2.3 Classification of other receivables by nature of payment
Book balance as at Book balance as at
Nature of payment
December 31, 2018 January 1, 2018
Utility bills 185,368.69 70,809.03
Petty cash 133,411.23 49,281.48
Attorney fee 77,534.25
Social insurance and housing
provident funds 63,264.56 40,018.68
Deposit 600.00 600.00
Total 460,178.73 160,709.19
14.2.4 Top five other receivables in terms of their ending balance collected by the debtor
Proportion in
Balance of
the total balance
Balance as at provision for
of other
Name of entity Nature of payment December Aging bad debts as at
receivables as at
31, 2018 December 31,
December
2018
31, 2018 (%)
Hainan Hangpai Catering Co.,
Ltd. Utility bills 113,176.77 Within 1 year 24.59
Hainan New Concept Law
Firm Attorney fee 77,534.25 Within 1 year 16.85
Yang Yunhui Petty cash 48,331.50 Within 1 year 10.50
Peng Guoxing Utility bills 41,589.36 Within 1 year 9.04
Wen Ping Petty cash 30,000.00 Within 1 year 6.52
Total 310,631.88 67.50
14.3 Long-term equity investments
Item Balance as at December 31, 2018 Balance as at January 1, 2018
Notes to the Financial Statements Page 60
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
Provision Provision
Book Book Book
for Book value for
balance balance value
impairment impairment
Investment in subsidiaries 1,000,000.00 1,000,000.00
Investment in associates and joint
ventures
Total 1,000,000.00 1,000,000.00
Investment in subsidiaries
Balance of the
Provision for
Balance as at Increase in Decrease in Balance as at provision for
Investee impairment
January 1, 2018 2018 2018 December 31, 2018 impairment as at
made in 2018
December 31, 2018
Hainan Wengao Tourist
Resources 1,000,000.00 1,000,000.00
Development Co., Ltd.
Total 1,000,000.00 1,000,000.00
14.4 Operating revenue and operating cost
14.4.1 Operating revenue and operating costs
Year 2018 Year 2017
Item
Revenue Cost Revenue Cost
Primary business 26,442,049.47 11,280,674.54 24,691,592.86 10,665,396.03
Other businesses 3,073,542.86 474,523.56 3,214,971.37 474,523.56
Total 29,515,592.33 11,755,198.10 27,906,564.23 11,139,919.59
Remark: Revenue from other businesses mainly refers to house rental income.
14.4.2 Primary business (by industry)
Year 2018 Year 2017
Industry name Operating Operating
Operating cost Operating cost
revenue revenue
Tourism and catering
services 26,442,049.47 11,280,674.54 24,691,592.86 10,665,396.03
Total 26,442,049.47 11,280,674.54 24,691,592.86 10,665,396.03
14.4.3 Primary business (by product)
Year 2018 Year 2017
Product name Operating Operating
Operating cost Operating cost
revenue revenue
Room income 22,731,299.15 9,307,117.61 21,103,123.09 8,758,364.38
Catering entertainment
income 3,710,750.32 1,973,556.93 3,588,469.77 1,907,031.65
Total 26,442,049.47 11,280,674.54 24,691,592.86 10,665,396.03
14.4.4 Primary business (by region)
Region name Year 2018 Year 2017
Notes to the Financial Statements Page 61
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
Operating Operating
Operating cost Operating cost
revenue revenue
Hainan 26,442,049.47 11,280,674.54 24,691,592.86 10,665,396.03
Total 26,442,049.47 11,280,674.54 24,691,592.86 10,665,396.03
noitamrofni yratnemelppuS .51
15.1 Breakdown of current non-recurring profits and losses
Item Amount in 2018 Remark
Profit or loss from disposal of non-current assets -29,691.26
Tax returns, deduction and exemption approved beyond
the authority or without official approval documents
Government grants included in the current profit or loss
(except for government grants closely related to the
enterprise business, obtained by quota or quantity at
unified state standards)
Expenses for using funds charged from non-financial
enterprises and included in the current profit or loss
Gains from the difference between the investment costs
of acquisition of subsidiaries, associates and joint
ventures and share in the fair value of the net
identifiable assets of the investee when investing
Profit or loss on exchange of non-monetary assets
Profit or loss on entrusting others to invest in or manage
assets
Various provision of asset impairment made due to
force majeure, such as natural disasters
Profit or loss on debt restructuring
Enterprise reorganizing expenses, such as employee
accommodation costs and integration expenses, etc.
Profit or loss on transactions made at unfair transaction
price in excess of their fair value
Current net profit or loss of the subsidiary generated
from the business combination under common control
from the beginning of the period to the combination
date
Profit or loss on contingencies irrelevant to normal
business operation of the Company
Profit or loss on changes in fair values of financial
assets held for trading and financial liabilities held for
trading and investment income obtained from disposal
of financial assets held for trading, financial liabilities
held for trading and available-for-sale financial assets,
except for effective hedging operations associated with
the Company's normal operations
Reversal of provision for impairment of receivables
subject to separate impairment test
Profit or loss from the external entrusted loans
Notes to the Financial Statements Page 62
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
Item Amount in 2018 Remark
Profit or loss on changes in fair value of investment
properties subsequently measured by adopting the fair
value model
Effect on current profit or loss due to one-off
adjustment thereto in accordance with the requirements
of laws and regulations regarding taxation or
accounting
Income from trustee fees charged for entrusted
operation
Other non-operating revenue and expenses except for
the above-mentioned items -133,372.64
Affected amount of income tax
Affected amount of minority equity (after tax)
Total -163,063.90
Notes to the Financial Statements Page 63
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2018
15.2 Rate of return on net assets and earnings per share
Weighted average Earnings per share (RMB)
Profit during the reporting period rate of return on Basic earnings Diluted earnings
net assets (%) per share per share
Net profit attributable to ordinary shareholders of the
Company 0.8434 0.0018 0.0018
Net profit attributable to ordinary shareholders of the
Company after deducting the non-recurring profit or
loss 1.0539 0.0022 0.0022
15.3 Accounting data difference between the domestic and overseas accounting standards
There was no accounting data difference between the domestic and overseas accounting standards.
Section XII. Documents available for references
I. Financial statement with signature and seal of legal person, person in charge of accounting works and person in
charge of accounting organ (accountant in charge);
II. Original audit report seal with accounting firms and signature and seal from CPA;
III. The original manuscripts of all documents and announcements of the Company publicly disclosed on
Securities Times and Hong Kong Commercial Daily during the report period.
The above said documents are prepared in the security department of the Company.
Board of Directors of
HAINAN DADONGHAI TOURISM CENTER (HOLDINGS) CO., LTD.
Chairman: Yuan Xiaoping
24 February 2019
Notes to the Financial Statements Page 64
