司公限有份股心中游旅海东大南海 2021 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 2021
Disclosure Date: April 30, 2022
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司公限有份股心中游旅海东大南海 2021 文全告报度年年
Section I. Important Notice, Contents and Interpretation
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.
Statement of objection by the directors, supervisors and senior executive
Name Title Content & Causes
In view of the audit report on the financial report of the Company is unable to express an
opinion from the BDO Shu Lun Pan Certified Public Accountants LLP, due to the
Indepen
Wu epidemic in Shanghai, I was unable to visit the site to further understand and verify the
dent
Tao matters related to the financial report of 2021, I can not make a judgment on the factual
Director
data stated in the documents as Financial Report of 2021, the Proposal of Annual Report
of 2021 and Proposal of the Q1 of 2022, and thereof abstain from voting.
During the auditing by BDO Shu Lun Pan Certified Public Accountants LLP, the guest
room revenue, revenue from moon cake sales and sales of alcohol could not be
Zhang Indepen recognized, and the identified internal control failures, going concern issues, which are
Yuany dent currently unresolved. I am unable to obtain the sufficient and appropriate evidence to
uan Director guarantee the truthfulness, accuracy and completeness of the contents involved in
Financial Report of 2021, the Proposal of Annual Report of 2021 and Proposal of the Q1
of 2022.
Independent director Wu Tao and Zhang Yuanyuan cannot guarantee the truthfulness,
accuracy and completeness of the contents of annual report, the investors are advised to pay
special attention to them.
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 2021 Annual Report is authentic, accurate and complete.
All directors are attending the Board Meeting for Report deliberation.
BDO Shu Lun Pan Certified Public Accountants LLP issued an audit report with disclaimer
of opinions for the the Company. Well-explanation are required by the BOD and BOS,
investors are advised to read it carefully.
The Company received an audit report of the internal control issued by BDO Shu Lun Pan
Certified Public Accountants LLP with negative opinions. Investors are advised to pay
attention to the non-standard audit opinion reminder and reminder of major defects in
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司公限有份股心中游旅海东大南海 2021 文全告报度年年
internal control
Concerning the forward-looking statements with future planning and development strategic
involved in the Report, they do not constitute a substantial commitment for investors.
Investors and the person concerned should maintain adequate risk awareness, furthermore,
differences between the plans, forecast and commitments should be comprehended.
Main risks factors that the Company faced including macro policy risk, natural disaster risks,
HR resource risk, main business operation risks and delisting risk, etc. Investors are advised
to read relevant risks warnings carefully.
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.
The Company has no plan of cash dividends carried out, bonus issued and capitalizing of
common reserves either.
Investors are advised to carry out rational investment and pay attention to the risks of
investment.
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司公限有份股心中游旅海东大南海 2021 文全告报度年年
Content
Section I Important Notice, Contents and Interpretation..................................................................... 2
Section II Company Profile and Main Financial Indexes.................................................................... 7
Section III Management Discussion and Analysis............................................................................. 12
Section IV Corporate Governance......................................................................................................26
Section V Enviornmental and Social Responsibility..........................................................................49
Section VI Important Events.............................................................................................................. 50
Section VII Particular about Changes in shares and shareholders..................................................... 59
Section VIII Preferred Stock.............................................................................................................. 67
Section IX Corporate Bond................................................................................................................ 68
Section X Financial Report................................................................................................................ 69
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司公限有份股心中游旅海东大南海 2021 文全告报度年年
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 carrying the seal of the CPA and signature & seal of the accountants;
III. Original copies of all documents and announcements that publicly disclosed on Securities Times, Hong Kong
Commercial Daily and Jucao Website websites during the reporting period.
The above documents are kept in the Company
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司公限有份股心中游旅海东大南海 2021 文全告报度年年
Interpretation
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 Governing the Listing of stocks on Shenzhen Stock Exchange
Company or the Company Refers to Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd.
Article of Association of Hainan Dadonghai Tourism Centre (Holdings)
Article of Association Refers to
Co., Ltd.
Shareholders’ General Meeting of Hainan Dadonghai Tourism Centre
Shareholders’ General Meeting Refers to
(Holdings) Co., Ltd.
Board of Directors of Hainan Dadonghai Tourism Centre (Holdings)
Board of Directors (BOD) Refers to
Co., Ltd.
Board of Supervisory of Hainan Dadonghai Tourism Centre (Holdings)
Board of Supervisory (BOS) Refers to
Co., Ltd.
Luoniushan, the largest shareholder Refers to Luoniushan Co., Ltd.
Yuan Refers to CNY/RMB
In the reporting period, the reporting
Refers to 1 January 2021 to 31 December 2021
period
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司公限有份股心中游旅海东大南海 2021 文全告报度年年
Section II Company Profile and Main Financial Indexes
I. Company information
*ST Dadonghai -A,
Short form of the stock Stock code 000613, 200613
*ST Dadonghai -B
Short form of the Stock after
N/A
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 Company Hainan Dadonghai Tourism Centre (Holdings) Co.,Ltd.
Foreign name of short form of
DADONGHA
the Company
Legal representative Yuan Xiaoping
Registrations add. Dadonghai Sanya
Code for registrations add 572021
Historical changes on the
N/A
registration address
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 2021 文全告报度年年
III. Information disclosure and preparation place
Website of the Stock Exchange where the annual
www.cninfo.com.cn
report of the Company disclosed
Media and Website where the annual report of the
Securities Times, Hong Kong Commercial Daily
Company disclosed
Preparation place for annual report Office of the Company
IV. Registration changes of the Company
Organization code Unified social credit code 91460000201357188U
Changes of main business since listing No changes
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
Previous changes for controlling
Great-wall Assets Management Corporation, the first majority shareholder of the
shareholders
Company.
4. On 19 September 2001, China Great-wall 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, Luoniushan Co., Ltd. entered into the “Statement”, confirmed
that the 60 million shares held by Haikou Food Co., Ltd. were held on behalf of
Luoniushan Co., Ltd., the shares’ ownership have been transfer dated 29 January
2010. Therefore, 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 Shu Lun Pan Certified Public Accountants LLP
Offices add. for CPA 4/F, No. 61 Nanjing Rd. (E), Shanghai
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司公限有份股心中游旅海东大南海 2021 文全告报度年年
Signatory Accountants Li Jinhua, Ma Lei
Sponsor engaged by the Company for performing continuous supervision duties in reporting period
□ 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
Changes over last
2021 2020 2019
year (+,-)
Operating income (RMB) 30,234,468.57 15,511,989.37 94.91% 25,935,405.44
Net profit attributable to
shareholders of the listed -2,011,048.59 -11,567,888.97 82.62% 756,721.46
company (RMB)
Net profit attributable to
shareholders of the listed
company after deducting -4,259,354.16 -12,134,958.36 64.90% -1,078,091.71
non-recurring gains and losses
(RMB)
Net cash flow arising from
13,215,529.32 -6,729,267.98 296.39% 4,713,661.51
operating activities (RMB)
Basic earnings per share
-0.0055 -0.0318 82.70% 0.0021
(RMB/Share)
Diluted earnings per share
-0.0055 -0.0318 82.70% 0.0021
(RMB/Share)
Weighted average ROE -2.95% -15.91% 12.96% 0.97%
Changes over end of
Year-end of 2021 Year-end of 2020 Year-end of 2019
last year (+,-)
Total assets (RMB) 85,889,553.90 97,441,339.20 -11.86% 87,521,184.25
Net assets attributable to
shareholder of listed company 69,621,810.65 66,918,714.99 4.04% 78,486,603.96
(RMB)
The lower of the company’s net profit before or after deduction of non-recurring profit (gain)/loss for the last three financial years is
negative, and the audit report for the latest year indicates that there is uncertainty about the company’s ability to continue as a going
concern
□Yes √No
The lower of the net profit before or after deduction of non-recurring profit (gain)/loss is negative
√Yes □ No
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司公限有份股心中游旅海东大南海 2021 文全告报度年年
Item 2021 2020 Note
Rental income, service income and
Operating income (RMB) 30,234,468.57 15,511,989.37
liquor moon cake income
Amount deducted from Rental income, service income and
6,491,016.36 2,118,095.25
operating income (RMB) liquor moon cake income
Operating income after
23,743,452.21 13,393,894.12 Recurring income
deduction (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.
VIII. Quarterly main financial index
Unit: RMB
Q1 Q2 Q3 Q4
Operating income 8,054,448.89 10,014,645.61 6,746,937.08 5,418,436.99
Net profit attributable to shareholders of the listed
1,004,933.52 -195,403.83 -994,208.55 -1,826,369.73
company
Net profit attributable to shareholders of the listed
company after deducting non-recurring gains and 836,723.88 -1,357,340.21 -1,280,416.67 -2,458,321.16
losses
Net cash flow arising from operating activities 5,054,131.04 5,566,343.01 2,424,426.94 -1,574,001.05
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
In the course of the audit for the year of 2021, it was found that in accordance with the Q&A Announcement No.1 on Information
Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss (2008), Rules Governing the Stock of
Listing on Shenzhen Stock Exchange, and Self-regulatory Guidelines for Listed Companies on the Shenzhen Stock Exchange No.1-
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司公限有份股心中游旅海东大南海 2021 文全告报度年年
Business Conduct and other relevant regulations, most of the above new operating items are non-recurring gain/loss deduction or
operation income deductions, the Company corrects the accounting errors in the recognition of the above incomes. Therefore, there is
a difference between the financial indicators for the semi-annual report 2021 and Q3 financial indicators and the disclosed data.
IX. Items and amounts of extraordinary/non-recurring profit (gains)/loss
√Applicable □ Not applicable
Unit: RMB
Item 2021 2020 2019 Note
Gains/losses from the disposal of non-current asset
(including the write-off that accrued for impairment -75.20 -148,457.47 2,151.45
of assets)
Mainly including
Governmental subsidy calculated into current gains government discount,
and losses (except for the government subsidies that VAT input tax credit,
are closely related to the normal operation of the subsidies for replacing
843,734.25 817,825.34 292,643.89
Company and that continued to enjoy based on the training with
certain standards of fixed or quantitative in line with works, job
the national policies ) stabilization subsidy,
etc.
Other non-operating income and expenditure except
1,540,017.83
for the aforementioned items
Other gains/losses items that meet the definition of
1,404,646.52 -102,298.48
extraordinary gains/losses
Total 2,248,305.57 567,069.39 1,834,813.17 --
Details of other gains/losses items that meets the definition of non-recurring gains/losses:
□ Applicable √ Not applicable
There are no other gains/losses items that meet the definition of non-recurring gains/losses in the Company.
Explain 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
□ Applicable √ Not applicable
There are no 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 2021 文全告报度年年
Section III Management Discussion and Analysis
I. Industry of the Company during the reporting period
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, with the continuous increase in the number of
local hotels, family hotels, and home-stays, as well as the impact of force majeure and uncertain factors such as
the COVID-19 epidemic, supply has far exceeded demand, industry competition has become increasingly fierce,
and operating pressure remains unabated.
II.Main businesses of the company engaged in during the Period
The Company is located in Sanya, Hainan Province, and mainly engaged in the hotel accommodation and catering
services, belonging to the tourism service industry. The reporting period is the year of COVID-19, epidemic
around the country has been repeated, tourism industry and services have been deeply affected.
III. Core Competitiveness Analysis
The Company takes hotel accommodation and catering services as the principle works, locates at Dadonghai bay
which is one of the 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 2021 文全告报度年年
IV. Main business analysis
1. Introduction
During the reporting period, the company realized the main business income of 30,234,500 yuan, an increase of
14,722,400 yuan compared with last year, increased by 94.91%; the operating profit loss was 1,974,900 yuan, a
decrease of 934,200 yuan compared with last year, the loss decreased by 82.56%; The net non-operating income
and expenditure was -36,100 yuan, a decrease of 103,800 yuan compared with last year; the net profit loss was
2,011,000 yuan, a decrease of 10,380,500 yuan compared with last year, the loss decreased by 83.77%.
During the reporting period, under the severe impact of the COVID pandemic, the company increased investment
and carried out decoration and renovation of the main equipment and facilities of the hotel. The main tasks were
as follows:
1. Increased the construction of hotel software and hardware equipment and facilities, improved product quality
and enhanced competitiveness
During the reporting period, the hotel rooms and lobby could not meet the market demand due to aging. Taking
advantage of the off-season during the pandemic, the company has carried out comprehensive design, decoration
and renovation of the Building B, Building B annex, Building C, parking lot, and landscaping of the hotel, and
comprehensively updated and transformed the corresponding equipment and facilities, greatly increased the scale
of guest rooms, and improved the quality and comprehensive competitiveness of hotel products.
2. Continued to be market-oriented and actively expanded marketing channels
During the reporting period, the company continued to be market-oriented and flexible in its marketing
mechanism. While further consolidating old customers, it strengthened cooperation with various well-known
online sales platforms, domestic and overseas travel agencies, and direct sales travel agencies in first- and
second-tier cities, actively expanded the network market, southwest, North China and South China markets, which
effectively increased the sales of network, conference teams and individual travelers of travel agencies, and filled
the stagnant overseas tourist source market affected by the COVID-19 pandemic to a certain extent.
3. Conducted strict cost control, standardized business management, improved internal control system, and
maximized corporate interests
During the reporting period, the company continued to strengthen the cost control management of procurement
and the budget management, diversified procurement cost inquiry channels, scientifically controlled operating
costs, strictly and reasonably controlled various expenses, conducted frequent inspections and repairs, eliminated
waste of resources, and increased the reasonable degree of procurement costs and the revenue cost effectiveness.
The company also strengthened the financial business management, and cleaned up and wrote off the long-term
unaccounted payables in the operation process according to relevant regulations. At the same time, the company
continued to improve the internal control system, strengthened the standardization and implementation of internal
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司公限有份股心中游旅海东大南海 2021 文全告报度年年
control work, strengthened the effective implementation of internal control work, reduced risks and consumption,
increased revenue and reduced expenditure, and ensured safe production, which effectively improved operating
efficiency and maximized corporate interests.
In 2022, 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.
2. Revenue/income and cost
(1)Constitute of operating income
Unit: RMB
2021 2020
Increase/decrease
Ratio in operating Ratio in operating
Amount Amount y-o-y (+,-)
income income
Total operating
30,234,468.57 100% 15,511,989.37 100% 94.91%
income
According to industries
Tourism service 30,234,468.57 100.00% 15,511,989.37 100.00% 94.91%
According to products
Accommodation
19,660,567.65 65.03% 11,721,046.96 75.56% 67.74%
service income
Catering service
4,082,884.56 13.50% 1,672,847.16 10.78% 144.07%
income
Commodity sales
3,535,541.68 11.69%
income
Other business
2,955,474.68 9.78% 2,118,095.25 13.65% 39.53%
income
According to region
Hainan area 30,234,468.57 100.00% 15,511,989.37 100.00% 94.91%
According to sales model
Comprehensive 30,234,468.57 100.00% 15,511,989.37 100.00% 94.91%
2. The industries, products, regions or sales model accounting for over 10% of the Company’s operating
revenue or operating profit
√Applicable □ Not applicable
Unit: RMB
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司公限有份股心中游旅海东大南海 2021 文全告报度年年
Increase/decrea
Increase/decrea Increase/decrea
Operating Gross profit se of gross
Operating cost se of operating se of operating
income ratio profit ratio
income y-o-y cost y-o-y
y-o-y
According to industries
Tourism
30,234,468.57 18,436,047.07 39.02% 94.91% 44.39% 21.34%
service
According to products
Accommodatio
n service 19,660,567.65 13,746,192.15 30.08% 67.74% 21.54% 26.57%
income
Catering
4,082,884.56 1,987,860.18 51.31% 144.07% 101.95% 10.15%
service income
Commodity
3,535,541.68 2,227,471.18 37.00%
sales income
Other business
2,955,474.68 474,523.56 83.94% 39.53% 0.00% 6.34%
income
According to region
According to sales model
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
(3) Income from physical sales larger than income from labors
□ Yes √ No
(4) Performance of the material sales contract and major procurement contracts that signed by the
Company up to the reporting period
□ Applicable √Not applicable
(5) Constitute of operation cost
Industry and products classification
Unit: RMB
2021 2020 Increase/decr
Industry
Item Ratio in operation Ratio in operation ease y-o-y
classification Amount Amount
cost cost (+,-)
Tourism service 18,436,047.07 100.00% 12,768,462.84 100.00% 44.39%
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司公限有份股心中游旅海东大南海 2021 文全告报度年年
Unit: RMB
2021 2020 Increase/decr
Product
Item Ratio in Ratio in ease y-o-y
classification Amount Amount
operation cost operation cost (+,-)
Accommodatio
13,746,192.15 74.56% 11,309,594.77 88.57% 21.54%
n service costs
Catering
1,987,860.18 10.78% 984,344.51 7.71% 101.95%
service costs
Commodity
2,227,471.18 12.08%
sales costs
Other business
474,523.56 2.57% 474,523.56 3.72% 0.00%
costs
Explanation
Nil
(6) Whether the changes in the scope of consolidation in Reporting Period
□ Yes √ No
(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) 14,299,350.40
Proportion in total annual sales volume for top five clients 47.29%
Ratio of related parties in annual total sales among the top five clients 8.61%
Information of top five clients of the Company
Serial Name Sales (RMB) Proportion in total annual sales
Shanghai Hecheng International Travel
1 8,242,281.20 27.26%
Service Co., Ltd.
2 Haikou Xindecheng Engineering Co., Ltd. 2,787,660.00 7.61%
3 Luoniushan Food Group Co., Ltd. 2,300,000.00 7.61%
Hainan Lvzong International Travel
4 485,503.00 1.61%
Agency Co., Ltd.
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司公限有份股心中游旅海东大南海 2021 文全告报度年年
5 Hainan Luoniushan Co., Ltd. 301,906.20 1.00%
Total -- 14,299,350.40 47.29%
Other situation of main clients
√Applicable □Not applicable
Among the top 5 clients in above, Luoniushan Food Group Co., Ltd and Luoniushan Co., Ltd has a related relationship with the
Company, other clients has no relationship with the Company.
Main suppliers of the Company
Total purchase amount from top five suppliers (RMB) 5,845,555.50
Proportion in total annual purchase amount for top five suppliers 73.67%
Ratio of related parties in annual total sales among the top five
0.00%
suppliers
Information of top five suppliers of the Company
Serial Suppliers Purchase amount (RMB) Percentage of total annual procurement
Sanya Yunwang Food Distribution Co.,
1 2,551,935.48 32.16%
Ltd.
Sanya Power Supply Bureau of Hainan
2 1,925,779.59 24.27%
Power Grid
3 Sanya Zhengzhuang Industrial Co., Ltd. 633,206.72 7.98%
4 Sanya Sino French Water Co., Ltd. 409,100.22 5.16%
5 Haina Chenggong Cleaning Co., Ltd. 325,533.49 4.10%
Total -- 5,845,555.50 73.67%
Other notes of main suppliers of the Company
√Applicable □Not applicable
Among the top five clients, there is no relationship with the Company
3. Expenses
Unit: RMB
Increase/decreas
2021 2020 Note of major changes
e y-o-y (+,-)
Sales expense 5,422,194.59 4,853,722.93 11.71%
Management expense 7,984,445.20 9,026,426.56 -11.54%
The interest declined for the drop of
Financial expense 247,565.02 435,449.46 -43.15%
loan balance
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司公限有份股心中游旅海东大南海 2021 文全告报度年年
4. R&D expenses
□ Applicable √ Not applicable
5. Cash flow
Unit: RMB
Item 2021 2020 Increase/decrease y-o-y (+,-)
Subtotal of cash in-flow from
36,148,684.34 16,246,729.46 122.50%
operation activity
Subtotal of cash out-flow from
22,933,155.02 22,975,997.44 -0.19%
operation activity
Net cash flow arising from
13,215,529.32 -6,729,267.98 296.39%
operating activities
Subtotal of cash in-flow from
4,710,662.67 8,300.00 56,654.97%
investment activity
Subtotal of cash out-flow from
5,674,367.05 13,741,025.28 -58.70%
investment activity
Net cash flow arising from
-963,704.38 -13,732,725.28 -142.03%
investment activity
Subtotal of cash in-flow from
19,791,474.22 -100.00%
financing activity
Subtotal of cash out-flow from
10,491,583.80 3,827,961.10 174.08%
financing activity
Net cash flow arising from
-10,491,583.80 15,963,513.12 -165.72%
financing activity
Net increase of cash and cash
1,760,241.14 -4,498,480.14 355.48%
equivalent
Main reasons for y-o-y major changes in aspect of relevant data
√ Applicable □ Not applicable
1.After the epidemic, with recovery of the tourism industry, operation business of the Company has a dramatically growth during the
reporting period, together with new business, the net cash flow arising from operation activities increased significantly.
2. The engineering quality guarantee fund was paid by the Company during the reporting period, which has obvious declined over
that of payment last year, the net cash flow arising from investment activities drops dramatically accordingly.
3. The Company obtained loans from the bank last year, by comparison, the net cash flow arising from financing activities declined
dramatically.
Reasons of major difference between the cash flow of operation activity in report period and net profit of the Company
√ Applicable □ Not applicable
The net cash flow arising from operation activities during the reporting period was 13.0449 million yuan, net profit of the Company
18
司公限有份股心中游旅海东大南海 2021 文全告报度年年
has 2.011 million yuan loss, mainly including the follow reasons:
1. During the reporting period, with the recovery and development of China's economy after the pandemic, the tourism industry has
recovered to a certain extent. However, the repeated outbreaks of pandemic deeply affected the tourism industry.
2. The company is small in scale and its business is relatively single, and the company's hotel operating costs have remained high.
Affected by the repeated pandemics, the gross profit of operating income could not cover the costs and expenses, resulting in losses.
V. Analysis of the non-main business
□ Applicable √ Not applicable
VI. Analysis of assets and liability
1. Major changes of assets composition
Unit: RMB
Year-end of 2021 Year-begin of 2021 Ratio
Ratio in Ratio in changes Note of major changes
Amount Amount
total assets total assets (+,-)
Mainly due to the net increase in
cash flow during the reporting
period, monetary fund at end of the
period increased by 60% compared
with the beginning of the year.
Monetary funds 4,684,700.89 5.45% 2,924,459.75 3.00% 2.45% Secondly, total assets at end of the
period decreased from that of year
begin, than the ratio of monetary
funds in total assets increased
dramatically compared with that of
year begin.
Mainly due to the account receivable
at end of the period decreased by
33% over that of beginning of the
year, secondly, total assets at end
Account
287,068.29 0.33% 429,303.32 0.44% -0.11% of the period decreased from that of
receivable
year begin, than the ratio of account
receivable in total assets have a
slight decrease from the beginning of
the year
Mainly due to the inventory at end of
Inventory 179,862.40 0.21% 2,009,928.83 2.06% -1.85% the period decreased by 91% over
that of beginning of the year,
19
司公限有份股心中游旅海东大南海 2021 文全告报度年年
secondly, total assets at end of the
period decreased from that of year
begin, than the ratio of inventory in
total assets have a significant
decrease from the beginning of the
year
Mainly due to the investment real
estate at end of the period decreased
by 6% over that of beginning of the
year, secondly, total assets at end
Investment real
6,960,909.75 8.10% 7,435,433.31 7.63% 0.47% of the period decreased from that of
estate
year begin, than the ratio of
investment real estate in total assets
have a slight increase from the
beginning of the year
Mainly due to the fix assets at end of
the period decreased by 10% over
that of beginning of the year,
31,279,819.9 34,694,023.7 secondly, total assets at end of the
Fix assets 36.42% 35.61% 0.81%
9 5 period decreased from that of year
begin, than the ratio of fix assets in
total assets have a slight increase
from the beginning of the year
Mainly because total assets at end of
the period decreased compared with
Contract the beginning of the year, than the
1,035,422.63 1.21% 626,285.33 0.64% 0.57%
liability increase of liabilities takes higher
ratio in total assets compared with
the beginning of the year
The repayment of long-term loans
during the reporting period makes
Long-term
3,295,280.42 3.84% 9,893,757.94 10.15% -6.31% the ratio of long-term loans in total
loans
assets declined compared with the
beginning of the year
Foreign assets account for a relatively high proportion
□ Applicable √Not applicable
2. Assets and liability measured by fair value
□ Applicable √ Not applicable
20
司公限有份股心中游旅海东大南海 2021 文全告报度年年
3. Assets right restriction till end of reporting period
The Company borrowed from Industrial Bank Co., Ltd. Haikou Branch for a time limit from April 23, 2020 to April 9, 2023 by
mortgaging the property with a total area of 1,446.00 square meters and an appraised value of 39,263,245.00 yuan under the
Company's name, the ending balance of mortgage loan was 6,594,519.18 yuan.
The property ownership certificate No. San Tu Fang (2013) Zi No. 07799, Villa-San Tu Fang (2013) Zi No. 07801, Villa-San Tu
Fang (2013) Zi No. 07798, Villa-San Tu Fang (2013) ) Zi No. 07796, and Villa-San Tu Fang (2013) Zi No. 07800 under the
Company's name, with a total area of 1446.00 square meters, provided mortgage guarantees (Mortgage Contract No: XYQ SYYYB
(Mortgage) Zi 2020 No. 001) for the Company’s borrowings from Industrial Bank Co., Ltd. Haikou Branch (Contract No.: XYQ
SYYYB (Flow Loan) ) Zi 2020 No. 001).
VII. Investment analysis
1. Overall situation
□ Applicable √ Not applicable
2. The major equity investment obtained in the reporting period
□ Applicable √ Not applicable
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.
21
司公限有份股心中游旅海东大南海 2021 文全告报度年年
VIII. 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
IX. Analysis of main controlling company and stock-jointly companies
□ Applicable √ Not applicable
The Company has no important controlling stock-jointly companies that should be disclosed during the reporting period
X. Structured vehicle controlled by the Company
□ Applicable √ Not applicable
XI. Future Development Prospects
1. Development trend of the industry in which the company is located and market competition pattern faced by 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.
Sanya has a geographical position advantage, and under the preferential policy support for the internationalization
of tourist island, off-shore duty-free and Hainan Free Trade Port/Free Trade Zone, 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, During
the reporting period, the COVID-19 epidemic had a impact, the global economic had a downturn, and the tourist
attractions across the country and neighboring countries had an increase, tourists had a diversion, and the number
of local hotels, family hotels and home-stays had continuous increases, supply far exceeds the demand, and the
market is becoming more competitive. Combined with the increasing level of local consumption, and soaring
operation costs and expenses from the staff wages in hotel industry, operation profit shrink, the downward
pressure on overall operation of the hotel industry continues to increase.
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 equipment 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
22
司公限有份股心中游旅海东大南海 2021 文全告报度年年
competitiveness.
2. Future development plans and operation plan for year of 2022
(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 driven by pioneer and invent.
(2) Continue to expand financing channels, actively promote the restructuring works, 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) 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 equipment 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
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
23
司公限有份股心中游旅海东大南海 2021 文全告报度年年
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 continuous development of global tourism industry, the continuous rise of high and low grade hotels, the
continuous diversion of global tourist sources, as well as the impact of force majeure uncertainties such as the
COVID-19, the number of local hotels and guesthouse rooms is increasing, and the industry competition is
becoming more and more fierce. Furthermore, 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 standardized 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, actively promote restructuring, expanding operation projects,
enrich the industrial structure for increasing the profit increasing point.
(5) Delisting risk
The net profit attributable to shareholders of the listed company in audited Annual Report 2021 of the Company is
negative and the operation revenue is less than 100 million yuan, furthermore, the audit report on 2021 financial
report was issued with disclaimer of opinions. Stock of the Company (Stock code: 000613, 200613; Short form of
the Stock: *ST Donghai A, *ST Donghai B) was terminated by Shenzhen Stock Exchange due to triggering the
mandatory delisting conditions for financial category.
XII. In the report period, reception of research, communication and interview
√ Applicable □ Not applicable
Basic
situatio
Receptio Reception Main content of the discussion and n index
Reception time Way Reception object
n site type information provided of
investi
gation
Telephone Investor Mr./Ms.
The Operation performance of the 3Q and
2021-10-11 communic Individual Zhang from -
company disclosure date, no materials required
ation Shanghai
24
司公限有份股心中游旅海东大南海 2021 文全告报度年年
Telephone Investor Mr./Ms. Operation performance of the Company and
The
2021-10-27 communic Individual Li from relevant question with delisting risk -
company
ation Shenzhen concerned, and no materials required
Telephone Commitments of share reform perform by the
The Investor Mr./Ms.
2021-11-05 communic Individual first majority shareholder of the Company, -
company Lin from Hainan
ation and no material required
Telephone Investor Mr./Ms. Impact of repeated epidemic on the
The
2021-11-18 communic Individual Zhang from company’s operation and no material -
company
ation Hubei required
Telephone Investor Mr./Ms.
The Annual operation performance of the
2021-11-30 communic Individual Chen from -
company Company and no materials required
ation Beijing
Telephone Investor Mr./Ms. Annual operation performance of the
The
2021-12-06 communic Individual Liu from company and impact of the new regulations -
company
ation Guangdong on the company, no material required
Telephone Investor Mr./Ms.
The Impact of the new regulations on the
2021-12-16 communic Individual Peng from -
company company, no material required
ation Shanghai
Telephone Investor Mr./Ms. Annual operation performance of the
The
2021-12-29 communic Individual Deng from company and impact of the new regulations -
company
ation Chengdu on the company, no material required
25
司公限有份股心中游旅海东大南海 2021 文全告报度年年
Section IV. Corporate Governance
I. Corporate governance of the Company
During reporting period, the Company further completed governance structure, established and improved the
internal control management and controlling system, improving the standard operation of the Company by strictly
in accordance with relative rules and regulations of the Company Law, Securities Law, Governance Rules of
Listed Companies, Rules Governing the Stock of Listing on Shenzhen Stock Exchange and Operational
Guidelines for Listing Companies on Shenzhen Stock Exchange. During the reporting period, the Three Meetings,
specific committee of the Board, independent directors and management of the Company all have clear
responsibilities and standardized procedures, all powers can be exercised effectively and normally.
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 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.
Whether there are significant differences between the actual state of corporate governance and laws, administrative regulations and
the provision with governance concerned for listed companies issued by CSRC
□Yes √ No
There are no significant differences between the actual state of corporate governance and laws, administrative regulations and the
provision with governance concerned for listed companies issued by CSRC
II. Independence of the Company relative to controlling shareholder and the actual controller
in ensuring the Company’s assets, personnel, finance, organization and businesses
1. Business Independence: the Company business operates independently with integrated structure, and is free
from horizontal competition with controlling shareholders. No intervention directly or indirectly of the Company
by controlling shareholders been found;
26
司公限有份股心中游旅海东大南海 2021 文全告报度年年
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
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 General Meeting in the report period
Ratio of
Session of investor Date of
Type Date Resolution
meeting participati disclosure
on
Deliberated and approved the follow proposals including:
Report on Works of BOD for year of 2020, Report on
Annual
Works of BOS for year of 2020,Financial Statement
General
AGM 20.03% 2021-06-25 2021-06-26 Report for year of 2020, Plans of Profit Distribution for
Meeting of
year of 2020, Plan on Provision and Write-off of the
2020
Assets Impairment, Annual Report of 2020 and
Re-appointment of the Accounting Firm
First Extraor
Extraordinar dinary
Deliberated and approved the General Election of the
y General General 19.87% 2021-07-05 2021-07-06
BOD and General Election of the BOS
Meeting of Meetin
2021 g
Second Extraor
Extraordinar dinary
Deliberated and approved the Termination of Major
y General General 8.71% 2021-08-16 2021-08-17
Assets Restructuring
Meeting of Meetin
2021 g
27
司公限有份股心中游旅海东大南海 2021 文全告报度年年
2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore
□ Applicable √ Not applicable
V. Directors, supervisors and senior executives
(i) Basic information
Amoun
Amount Share Reason
Shares t of
of s held s for
Wor held at shares Other
shares at increas
king Se A Start dated of End date of period increas change
Name Title decrease period e or
statu x ge office term office term -begin ed in s
d in this -end decreas
s (Share this (share)
period (share e of
) period
(Share) ) shares
(Share)
Curr
Yuan Chairman ently
M
Xiaopi /General in 58 2018-02-28 2024-07-04 0 0 0 0 0 -
ale
ng Manager offic
e
Offi
Tang Independ
ce M
Guopin ent 58 2014-05-22 2021-07-04 0 0 0 0 0 -
leavi ale
g Director
ng
Curr
Independ ently
Wu M
ent in 43 2018-02-28 2024-07-04 0 0 0 0 0 -
Tao ale
Director offic
e
Curr
Tang ently
M
Shanro Director in 42 2018-02-28 2024-07-04 0 0 0 0 0 -
ale
ng offic
e
Chairman
of Offi
Huang superviso ce M
52 2002-06-16 2021-07-04 0 0 0 0 0 -
Wencai ry leavi ale
committe ng
e
Chairman Curr Fe
Zhang
of ently ma 38 2018-02-28 2024-07-04 0 0 0 0 0 -
Xuli
superviso in le
28
司公限有份股心中游旅海东大南海 2021 文全告报度年年
ry offic
committe e
e
Offi
Chen Superviso ce M
55 2016-07-29 2021-07-05 0 0 0 0 0 -
Gang r leavi ale
ng
Offi
Wang Fe
ce
Hongju Director ma 45 2016-08-30 2021-07-04 0 0 0 0 0 -
leavi
an le
ng
Curr
Yang ently Fe
Xiangy Director in ma 37 2021-07-05 2024-07-04 0 0 0 0 0 -
a offic le
e
Curr
Zhang Independ ently Fe
Yuany ent in ma 46 2021-07-05 2024-07-04 0 0 0 0 0 -
uan Director offic le
e
Curr
ently
Wang Superviso M
in 35 2021-07-05 2024-07-04 0 0 0 0 0 -
Qian r ale
offic
e
Curr
ently Fe
Wen Superviso
in ma 42 2021-07-06 2024-07-05 0 0 0 0 0 -
Ping r
offic le
e
Curr
Fu Person in ently
M
Zongre charge of in 54 2015-04-15 2024-07-04 0 0 0 0 0 -
ale
n finance offic
e
Curr
副 ently
Ding M
General in 50 2018-08-10 2024-07-04 0 0 0 0 0 -
Qin ale
Manager offic
e
29
司公限有份股心中游旅海东大南海 2021 文全告报度年年
Curr
deputy
Wang ently Fe
GM/Secre
Hongju in ma 45 2008-04-27 2024-07-04 0 0 0 0 0 -
tary of the
an offic le
Board
e
Total -- -- -- -- -- -- 0 0 0 0 0 --
During the reporting period, whether there was any departure of directors and supervisors and dismissal of Senior Executives
□ Yes √No
Changes of directors, supervisors and senior executives
√ Applicable □ Not applicable
Name Title Type Date Reasons
Office leaving
Tang Guoping Independent Director 2021-07-04 Office term expires
for term expires
Chairman of Office leaving
Huang Wencai 2021-07-04 Office term expires
supervisory committee for term expires
Office leaving
Chen Gang Supervisor 2021-07-04 Office term expires
for term expires
Wang Office leaving
Director 2021-07-04 Office term expires
Hongjuan for term expires
2. Post-holding
Professional background, major working experience and present main responsibilities of directors, supervisors and
senior executive in the Company
Director
Mr. Yuan Xiaoping, born in 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 Chairman and GM of the Company since March 2018.
Mr. Tang Shanrong, born in 1979, holds the Master degree, a senior engineer. He was appointed 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 the Company since June
30
司公限有份股心中游旅海东大南海 2021 文全告报度年年
2016; She served as chairman of real estate branch of Luoniushan Co., Ltd. since June 2018; at the same time, he
served as Vice President of China Rural Youth Enrichment Leaders Association, and he is the member of standing
committee of the 14th CPPCC of Haikou, member of the standing committee of the 6th Hainan Youth Federation,
vice chairman of the 8th Haikou Youth League and director of Haikou Youth Entrepreneurship & employment
promotion Association. He serves as director of the Company since March 2018.
Ms. Yang Xiangya, born in 1984, bachelor degree, an Certified Public Accountant, Tax Accountant and US
Certified Management Accountant (CMA). she previously worked in Huaneng Nanshan Power Plant, China Audit
Asia Pacific Certified Public Accountants LLP Hainan Branch and Sanya Urban Investment & Development Co.,
Ltd. She served as General Manager of the Financial Department of Luoniushan Co., Ltd from October 2012 to
August 2018. Ms. Yang serves as the CFO of Luoniushan Co., Ltd since August 2018 and Director of the
Company since July 2021.
Independent Director
Mr. Wu Tao, born in 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. From March 2014 to September 2018, he has been serving as the vice chairman and vice president of
Shanghai Huantao Investment Management Co., Ltd. Since August 2015 to the present, he has been a supervisor
of Shanghai Hemin Investment Management Co., Ltd., from September 2018 to March 2020, he served as the
general manager of Shanghai Mingxi Dongsen Investment Co., Ltd., since September 2020, he has served as
independent director of Heilongjiang Traditional Chinese Medicine 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.
Ms. Zhang Yuanyuan, born in 1975, bachelor degree, an Chinese Certified Public Accountant. She served as the
audit manager in Deloitte & Touche Huayong CPA from 1999 to 2006. Ms. Zhang serves as the CFO of Bohai
Industrial Investment Fund Management Co., Ltd since 2007. and obtained the qualification certificate of
Independent Directors from SSE in November 2021. she serves as the Independent Director of the Company since
July 2021.
Supervisor
Ms. Zhang Xuli, born in 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. From December 2015 to September 2020, she has been serving as the
investment director and GM of Luoniushan (Beijing) Investment Co., Ltd. Now he served as Director and General
Manager of Hainan (Tanniu) Wenchang Chicken Co., Ltd., and since March 2018, she has been serving as a
31
司公限有份股心中游旅海东大南海 2021 文全告报度年年
shareholder supervisor of the Company.
Mr. Wang Qian, born in 1986, holds a master’s degree, and owns the legal professional qualification certificate
and the professional qualification certificate of tax accountant. Mr. Wang worked as the assistant lawyer of the
Aklea Societe D’avocats Shanghai Representative Office (France) from July 2011 to September 2012, and served
as the legal counsel of Axten Avocats Associes Shanghai Representative Office (France) from March 2018 to July
1019 and from June of 2020 to July 2020; and also served as the legal expert of Alibaba Cloud Computing Co.,
Ltd from July to October of 2020. Mr. Wang serves as the legal counsel of Dorsey & Whitney LLP Shanghai
Representative Office (USA) since May 2021, and the Staff Supervisor of the Company since July 2021.
Ms. Wen Ping, born in 1979, Han nationality, a college degree and has no permanent residency abroad. She
worked in front office of the Sanya Resort Intime Hotel from January 2000 to October 2006, worked as the
manager of HR department of Sanya Eadry Resort Hotel from November 2006 to November 2011, the manager of
HR department of Sanya South China Hotel from 2013 to 2015. Mr. Wen serves as the office director of the
Company since May 2016 and works as the Staff Supervisor of the Company since July 2021.
Senior executives
Mr. Ding Qin, born in 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, born in 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 he is the person in charge of finance of the Company since April 2015.
Ms. Wang Hongjuan, born in 1976, Han nationality, Undergraduate Degree, has a lawyer qualification. Ms.
Wang obtained the qualification certificate of the Secretary of the Board from SSE in April 7, 2007. She worked
as the Director, Supervisor and Office director of the Company. And she is the securities affairs representative of
the Company since 2004 and secretary of the Board of the Company since 2008, and she serves as the Deputy
General Manager of the Company since 2014.
Post-holding in shareholder’s unit
√ Applicable □ Not applicable
Whether
Position in Start dated of office
Name Shareholder’s unit End date of office term obtained
shareholder’s unit term
remuneration from
32
司公限有份股心中游旅海东大南海 2021 文全告报度年年
shareholder’s unit
(Y/N)
Tang President's
Luoniushan Co., Ltd. 2006-08-01 2014-03-01 Y
Shanrong Secretary
Hainan Luoniushan
Tang
Energy Environmental General Manager 2009-09-01 2014-02-01 Y
Shanrong
Protection Co., Ltd.
Hainan Luoniushan
Tang
Agricultural Technology Chairman 2011-10-01 2014-02-01 Y
Shanrong
Co., Ltd.
Assistant to the
President and
Tang General Manager
Luoniushan Co., Ltd. 2014-03-01 2016-08-01 Y
Shanrong of the
Administration
Department
Tang
Luoniushan Co., Ltd. Vice president 2016-08-01 Y
Shanrong
Tang Real Estate Branch of
Chairman 2018-06-01 Y
Shanrong Luoniushan Co., Ltd.
Investment
Luoniushan (Beijing)
Zhang Xuli director, General 2015-12-01 2020-09-01 Y
Investment Co., Ltd.
Manager
Hainan (Tanniu)
Director, General
Zhang Xuli Wenchang Chicken Co., 2020-11-25 Y
Manager
Ltd.
GM of Finance
Yang Xiangya Luoniushan Co., Ltd. 2012-10-01 2018-08-01 Y
Dept.
Yang Xiangya Luoniushan Co., Ltd. CFO 2018-08-01 Y
Explanation
on
post-holding
N/A
in
shareholder’s
unit
Post-holding in other unit
√ Applicable □ Not applicable
Position in Start dated of office End date of office Whether
Name Other unit
other unit term term obtained
33
司公限有份股心中游旅海东大南海 2021 文全告报度年年
remuneration from
other unit (Y/N)
Deputy General
Shanghai RENLE Science & Manager,
Wu Tao 2011-01-01 2014-01-01 Y
Technology Co., Ltd Secretary of the
Board
Vice Chairman,
Shanghai Huantao Investment
Wu Tao deputy 2014-03-01 2018-09-01 Y
Management Co., Ltd
president
Shanghai Hemin Investment
Wu Tao Supervisor 2015-08-01 N
Management Co., Ltd
Shanghai Mingxi Dongsen General
Wu Tao 2018-09-01 2020-03-01 Y
Investment Co., Ltd Manager
Heilongjiang Traditional Chinese Independent
Wu Tao 2020-09-01 Y
Medicine Co., Ltd. Director
Zhang
Deloitte & Touche Huayong CPA Audit manager 1999-01-01 2006-01-01 Y
Yuanyuan
Zhang Bohai Industrial Investment Fund
CFO 2007-01-01 Y
Yuanyuan Management Co., Ltd
Wang Aklea Societe D’avocats Shanghai Assistant
2011-07-01 2012-09-01 Y
Qian Representative Office (France) lawyer
Wang Axten Avocats Associes Shanghai
Legal counsel 2018-03-01 2019-07-01 Y
Qian Representative Office (France)
Wang Alibaba Cloud Computing Co.,
Legal expert 2020-07-01 2020-10-01 Y
Qian Ltd
Wang Dorsey & Whitney LLP Shanghai
Legal counsel 2021-05-01 Y
Qian Representative Office (USA)
Explanatio
n on
post-holdi N/A
ng in other
unit
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
3. 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
34
司公限有份股心中游旅海东大南海 2021 文全告报度年年
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
Unit: 10,000 yuan
Whether
Total obtained
remuneration remuneration
Post-holding
Name Title Sex Age obtained from from related
status
the Company party of the
(before taxes) Company
(Y/N)
Yuan
Chairman, General Currently in
Xiaopin Male 58 50.13 N
Manager office
g
Tang
Currently in
Shanron Director Male 42 4.8 Y
office
g
Currently in
Wu Tao Independent Director Male 43 4.8 N
office
Zhang Currently in
Supervisor Female 38 2.4 Y
Xuli office
Ding Currently in
Deputy General Manager Male 50 30.39 N
Qin office
Fu
Currently in
Zongre Person in charge of finance Male 54 30.88 N
office
n
Huang
Supervisor Male 52 Office leaving 2.4 Y
Wencai
Chen
Supervisor Male 52 Office leaving 12.25 N
Gang
Tang
Guopin Independent Director Male 58 Office leaving 4.8 N
g
Wang
deputy GM, Secretary of Currently in
Hongju Female 45 40.41 N
the Board office
an
35
司公限有份股心中游旅海东大南海 2021 文全告报度年年
Zhang
Currently in
Yuanyu Independent Director Female 46 0 N
office
an
Wang Currently in
Supervisor Male 35 0 N
Qian office
Yang
Currently in
Xiangy Director manager Female 37 0 Y
office
a
Wen Currently in
Supervisor Female 42 8.2 N
Ping office
Total -- -- -- -- 191.46 --
VI. Responsibility performance of directors during the reporting period
1. The board of directors during the reporting period
Session of Date of Disclosure
Meeting resolutions
meeting meeting date
Deliberated and approved the company's 2020 Annual Work Report of the Board of
Directors, 2020 Annual Financial Report, 2020 Annual Profit Distribution Plan,
Proposal on the Provision and Write-off of Assets Impairment, Proposal on the
Company's Annual Report in 2020, The Company's Internal Control Evaluation Report
th
The 12 Session 2021-04-2 in 2020, the Company's Investor Relations Management Work Plan for 2021, Proposal
2021-04-24
th
of 9 BOD 2 on Renewing the Appointment of Accounting Firms, Proposal on the Change of
Accounting Policies, and Proposal on the Implementation of Delisting Risk Warning of
the Company's Stock Trading, Proposal on the Expectation of the Company's Daily
Related Transactions in 2021 and Proposal on Convening the Company's 2020 Annual
General Meeting of Shareholders.
The 13th Session 2021-04-2
2021-04-24 Deliberated and approved the First Quarterly Report of 2021
th
of 9 BOD 2
Deliberated and approved the company's Proposal on the Company's Eligibility for
Issuing Shares and Paying Cash to Purchase Assets and Raising Supporting Funds,
Proposal on the Company's Issuing Shares and Paying Cash to Purchase Assets and
Raising Supporting Funds, Proposal on Issuing Shares and Paying Cash to Purchase
The 6th
Assets and Raising Supporting Funds to Constitute Related Transactions, Plan and
Extraordinary 2021-05-1
2021-05-14 Summary on the Company's Share Issuance, and Paying Cash to Purchase Assets and
Meeting of 9th 3
Raising Supporting Funds and Related Transactions, Proposal on Issuing Shares and
BOD
Paying Cash for Asset Purchase Agreement between Hainan Dadonghai Tourism Centre
(Holdings) Co.,Ltd., Liu Chungang, Yi Jianhua, Chengdu Tanxue Education Consulting
Service Partnership (limited partnership) and Chengdu Langzhong Xingcheng
Education Consulting Service Partnership (limited partnership), Share Subscription
36
司公限有份股心中游旅海东大南海 2021 文全告报度年年
Agreement Between Hainan Dadonghai Tourism Centre (Holdings) Co.,Ltd. and
Luoniushan Group Co.,Ltd. on Non-public Issuance of Shares to Raise Supporting
Funds, Proposal on the Stock Price Fluctuation Before Suspension of Trading Not
Meeting the Relevant Standards of Article V in the Document No. 128 “Notice On
Regulating the Information Disclosure of Listed Companies and the Behaviors of
Related Parties”, Proposal on this Transaction Does Not Constitute the Reorganization
and Listing under Article 13 of the Measures for the Administration of Major Assets
Reorganization of Listed Companies, and Proposal on the Completeness and
Compliance of the Legal Procedures for this Transaction and the Validity of Submitted
Legal Documents, Proposal Regarding This Transaction Compliant with Article IV of
the Regulations on Several Issues Concerning the Restructuring of Major Assets of
Listed Companies, Proposal on the Relevant Subjects of this Transaction Absent from
the Article 13 of the Temporary Provisions on Strengthening Supervision of Abnormal
Stock Trading Related to Material Assets Reorganization of Listed Companies, Proposal
on This Transaction Compliant with Opinions on the Applicability of Articles 14 and 44
of the Measures for the Administration of Major Asset Restructurings of Listed
Companies ——Opinions on the Application of Securities and Futures Law No. 12,
Proposal on the Relevant Regulations of the “Relevant Questions and Answers on the
Issuance of Shares by Listed Companies to Purchase Assets and Raise Supporting Funds
at the Same Time”, and Proposal on This Transaction Compliant with the Article 43 of
the Administrative Measures for the Major Asset Restructuring of Listed Companies,
Proposal on Confidentiality Measures and Confidentiality System Adopted in this
Transaction, and Proposal on Temporarily Not Holding an Extraordinary General
Meeting of Shareholders.
The 7th
Extraordinary 2021-06-1 Deliberated and approved the General Election of the BOD and Convening the First
2021-06-17
Meeting of 9th 6 Extraordinary Meeting of 2021 for Shareholders
BOD
The 1st
Deliberated and approved the Election of the Chairman of 10th BOD, Election of the
Extraordinary 2021-07-0
2021-07-10 Members of Specific Committee of 10th BOD and Appointment of GM and other Senior
Meeting of 10th 9
Executive of the Company
BOD
The 2nd
Extraordinary 2021-07-2 Deliberated and approved the Termination of the Material Assets Reorganization and
2021-07-30
th
Meeting of 10 9 Convening the Second Extraordinary Meeting of 2021 for Shareholders
BOD
The 1st Session of 2021-08-1
2021-08-21 Deliberated and approved the Semi-Annual Report of 2021
th
10 BOD 9
The 2nd Session of 2021-10-2
2021-10-23 Deliberated and approved the Third Quarterly Report of 2021
th
10 BOD 1
37
司公限有份股心中游旅海东大南海 2021 文全告报度年年
2. The attending of directors to Board meetings and shareholders general meeting
The attending of directors to Board Meeting and Shareholders General Meeting
Times of Times of Absent the
Times of
Board meeting attending the Times of Meeting for
Times of Times of attend the
Director supposed to Board Meeting entrusted the second
Presence Absence general
attend in the by presence time in a row
meeting
report period communication (Y/N)
Wu Tao 8 2 6 0 0 N 3
Zhang
4 0 4 0 0 N 1
Yuanyuan
Tang
8 2 6 0 0 N 3
Shanrong
Yuan
8 2 6 0 0 N 3
Xiaoping
Yang
4 0 4 0 0 N 1
Xiangya
Tang
4 2 2 0 0 N 2
Guoping
Wang
4 2 2 0 0 N 2
Hongjuan
Explanation of absent the Board Meeting for the second time in a row
Nil
3. Objection for relevant events from directors
Directors come up with objection about Company’s relevant matters
□ Yes √ No
No directors come up with objection about Company’s relevant matters in the Period
4. Other explanation about responsibility performance of directors
The opinions from directors have been adopted
√ Yes □ No
Director's statement to the Company that a proposal has been or has not been adopted
Main business of the Company is single and small with weak in risk resistance. It is recommended that, while strengthening the main
business, the Company should continue to look for a suitable project for assets restructuring. Enrich the industrial structure, increase
the main business revenue and profit growth points, enhance the ability to withstand the risks and competitions.
38
司公限有份股心中游旅海东大南海 2021 文全告报度年年
VII. The special committees under the board during the reporting period
Specific
Num circumsta
ber Other nces of
Committee of Important comments performa the
Members Date of Meeting content
name meet and suggestions made nce of objection
meeting
ings duties (if
held applicable
)
Main business of the
Company is single
and small with weak
in risk resistance. It is
recommended that,
while strengthening
the main business,
Yuan the Company should
Xiaoping, Tang continue to look for a
Strategy 2021-07-0
Shanrong, 1 suitable project for N/A N/A
Committee 9
Zhang assets restructuring.
Yuanyuan Enrich the industrial
structure, increase the
main business
revenue and profit
growth points,
enhance the ability to
withstand the risks
and competitions.
2021-04-2 Work of Audit for
N/A N/A N/A
0 year of 2020
2021-04-2 Financial report of
Zhang N/A N/A N/A
0 the Q1 of 2021
Audit Yuanyuan, Wu
4 Financial report of
Committee Tao , Yang 2021-08-1
the Semi-annual N/A N/A N/A
Xiangya 7
Report of 2021
2021-10-1 Financial report of
N/A N/A N/A
9 the Q3 of 2021
Wu Tao , Appointment of GM
Nomination Zhang 2021-07-0 and other Senior
1 N/A N/A N/A
Committee Yuanyuan, 7 Executive of the
Tang Shanrong Company
Tang
Remuneratio Events regarding
Shanrong,
n and 2021-04-2 remuneration
Zhang 1 N/A N/A N/A
Appraisal 0 appraisal for year of
Yuanyuan, Wu
Committee 2021
Tao
39
司公限有份股心中游旅海东大南海 2021 文全告报度年年
VIII. Works from BOS
The Company has risks in reporting period that found in supervisory activity from BOS
□ Yes √ No
BOS has no objection about supervision events in reporting period
IX. Particulars of workforce
1. Number of staff, professional composition and education background
Employee in-post of the parent Company at period-end
118
(people)
Employee in-post of main Subsidiaries at period-end (people) 0
The total number of current employees at period-end (people) 118
The total number of current employees to receive pay (people) 118
Retired employee’ s expenses borne by the parent Company
0
and main Subsidiaries (people)
Professional composition
Category of professional composition Number of professional composition (people)
Production staff 63
Salesman 6
Technical staff 17
Financial staff 12
Administrative staff 20
Total 118
Education background
Category of education Number (people)
Graduate student 1
Undergraduate 15
Junior college above 35
High school and below 67
Total 118
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
40
司公限有份股心中游旅海东大南海 2021 文全告报度年年
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
X. Profit distribution plan 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
The Company is profitable during the reporting period and the parent company has positive profit available for distribution to
shareholders without cash dividend distribution plan proposed
□ Applicable √ Not applicable
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.
XI. Implementation of the company’s stock incentive plan, employee stock ownership plan or
other employee incentives
□ Applicable √ Not applicable
41
司公限有份股心中游旅海东大南海 2021 文全告报度年年
During the reporting period, the company has no stock incentive plan, employee stock ownership plan or other employee incentives
that have not been implemented.
XII. Establishment of the internal control mechanism and implementation during the
reporting period
1. Establishment and implementation of the internal control
Found more in the “Self-appraisal Report of Internal Control for 2021” released on the same date of the Report disclosed
2. Details of major defects in IC appraisal report that found in reporting period
□ Yes √ No
Potential
impact of
When the Rectification measures Responsible
the defect Rectifi
defect Detailed description of the defect implemented or to be Rectificati person for
on cation
occurred implemented on time rectification
financial effect
report
The defects in the
company's performance
The company's performance forecast are due to the
forecast control defects. On January reduction of transactions
25, 2022, the company released the that are not of the nature of
2021 annual performance forecast business. In this regard, the
announcement. It was expected that board of directors is highly
the net profit attributable to the concerned, and requires the
parent company of the listed company to release the
General
company in 2021 would be 2.7 announcement of the
Manager and
million yuan to 3.1 million yuan. revision of the performance Being
2022-04-2 Person in
2022-04-25 The company's audited net profit forecast as soon as rectifie
5 charge of
attributable to the parent company possible, orders the d
finance of the
in 2021 was -2.01 million yuan, and company's related financial
Company
there was a major difference personnel to introspect
between the performance forecast deeply and strengthen the
and the company's actual profit in financial professional
2021. This matter indicates that the study, and requires the
company has major defects in the company to improve the
internal control related to the relevant management
forecast of operating performance. system and improve the
corporate internal control
standard system.
2022-04-25 The company's internal control Due to the serious impact 2022-04-2 General Being
42
司公限有份股心中游旅海东大南海 2021 文全告报度年年
system is imperfect, the company of the COVID-19 5 Manager and rectifie
has not established an internal audit pandemic, the company did Person in d
functional department, and the not set up an internal audit charge of
company's board of supervisors has functional department in finance of the
not played its supervisory and order to save labor costs Company
administrative functions. and reduce expenses. The
company will establish an
internal audit functional
department in a timely
manner to improve the
functional department
system.
The tenant check-in registration
system is not effectively
General
implemented, the tenant registration
The company will strictly Manager and
information in the Westsoft system Being
implement the daily 2022-04-2 Person in
2022-04-25 is incomplete, and the number of rectifie
reconciliation system with 5 charge of
registered tenants is quite different d
the Westsoft system. finance of the
from the number of occupants
Company
queried by the public security
information system.
The ERP business system, the
Westsoft system and the financial
The company will integrate General
system are not integrated, the
of ERP business system, Manager and
various business systems are not Being
Westsoft system and 2022-04-2 Person in
2022-04-25 connected, and excessive manual rectifie
financial system, and 5 charge of
control may lead to fraudulent d
effectively implement finance of the
behavior, making the internal
them. Company
control of the enterprise unable to
guarantee the effect.
Corresponding internal control was
not established in a timely and
effective manner for the
development of new business. The
The company will establish General
company launched the wine and
an internal control system Manager and
moon cake sales business in the Being
for the new business 2022-04-2 Person in
2022-04-25 current period. The company did rectifie
system to effectively 5 charge of
not establish a corresponding d
control the risks that may finance of the
internal control system, and the
exist in each link. Company
relevant control did not leave a
control track, so it was unable to
provide actual audit evidence of
business occurrences in a timely
43
司公限有份股心中游旅海东大南海 2021 文全告报度年年
and effective manner.
There is the behavior of sales staff
collecting and paying on behalf of
others, and the incompatible duties
of sales and collection should be The company will strictly General
separated from each other. There implement the separation Manager and
Being
are some sales staff collecting and system for sales and 2022-04-2 Person in
2022-04-25 rectifie
paying for guest rooms and moon cashiers, and improve the 5 charge of
d
cake sales, and the company has scientific and rationality of finance of the
not established an effective control post setting. Company
system to prevent, discover and
correct this behavior which may
lead to the risk of fraud.
XIII. Management and control of the subsidiaries during the reporting period
Problems
Integration Countermeasure Solution Follow-up
Name Progress encountered in
plan taken progress resolution plan
integration
Hainan Wengao
Tourism Resources
- - - - - -
Development Co.,
Ltd.
XIV. Self-Appraisal Report of Internal Control and Audit Report of Internal Control
1. Self-appraisal Report of Internal Control
Disclosure date of full internal control
2022-04-30
appraisal report
Disclosure index of full internal control Relevant information found in Appraisal Report of Internal Control for 2021 published on
appraisal report Juchao Website dated 30 April 2022
The ratio of the total assets of units
included in the scope of evaluation
accounting for the total assets on the 100.00%
company's consolidated financial
statements
The ratio of the operating income of
units included in the scope of evaluation
accounting for the operating income on 100.00%
the company's consolidated financial
statements
44
司公限有份股心中游旅海东大南海 2021 文全告报度年年
Defects Evaluation Standards
Category Financial Reports Non-financial Reports
Major deficiencies: the company is lack of
democratic decision-making process; the
Major deficiencies: fraud of directors,
company’s decision-making process leads to
supervisors and senior management;
major mistakes; the company violates the
material misstatements are found in
state laws and regulations and is severely
current financial statements by the
punished; serious brain drain of the
certified public accountant but are not
company’s senior management personnel
found in the process of internal control;
and senior technical staff; frequent negative
It’s found that the significant internal
news on media covering a wide range and
control deficiencies that had been
the negative effects are not eliminated; the
discovered and reported to the
company’s significant business is lack of
management were not yet corrected within
system control or systematic-ness is invalid;
the stipulated time; the audit committee’s
the major deficiencies and significant
supervision has no effect on the company’s
deficiencies of the company’s internal
external financial reports and internal
controls have not been rectified and
control over financial reporting.
reformed; the company is punished by
Significant deficiencies: the selection and
CSRC or warned by stock exchange.
application of accounting policies are not
Qualitative criteria Significant deficiencies: the company has
in accordance with the GAAP; anti-fraud
democratic decision-making process which
program and control measures have not
is not complete; the company’s
been established; the accounting treatment
decision-making process leads to general
of unusual or special transactions has no
mistakes; the company violates the
appropriate control mechanisms or have
enterprise internal regulations which causes
not implemented the control mechanisms
losses; serious brain drain of the company’s
and has no appropriate compensatory
business personnel in key positions; negative
controls; the control to period-end
news on media affecting local areas; the
financial reporting process has one or
company’s significant business system has
more deficiencies and cannot reasonably
deficiencies; the significant deficiencies and
ensure that the organizational financial
general deficiencies of the company’s
statements are true and accurate.
internal controls have not been rectified and
General deficiencies: deficiencies that out reformed
of the recognition of major and significant
General deficiencies: deficiencies that out of
deficiencies should be recognized as
the recognition of major and significant
general deficiencies
deficiencies should be recognized as general
deficiencies
Major deficiencies: After considering the
Major deficiencies: direct property loss is
compensating control measures and the
more than 100,000 Yuan;
actual deviation rate, the overall impact
Quantitative standard Significant deficiencies: direct property loss
level of the deficiency is higher than the
ranged from 1 Yuan to 100,000 Yuan;
significance level (10% of the total profit).
General deficiencies: direct property loss is
Significant deficiencies: After considering
45
司公限有份股心中游旅海东大南海 2021 文全告报度年年
the compensating control measures and the lower than 10,000 Yuan
actual deviation rate, the overall impact
level of the deficiency is lower than the
significance level (10% of the total profit),
but higher than the generality level (5% of
the total profit).
General deficiencies: After considering the
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
6
financial reports
Amount of significant defects in
0
non-financial reports
Amount of important defects in financial
6
reports
Amount of important defects in
0
non-financial reports
2. Audit report of internal control
√ Applicable □ Not applicable
Deliberations in Internal Control Audit Report
In our opinion, as a result of the material defects described above and the effect on achievement of the controlling objects, the
Company did not maintain, in all material respects, effective internal control over the financial report as of December 31, 2021, in
accordance with the Basic Standards of Internal Control for Business Enterprise and relevant regulations.
Disclosure details of audit report of
Disclosure
internal control
Disclosure date of audit report of
2022-04-30
internal control (full-text)
Index of audit report of internal Found more in the “Appraisal Report of Internal Control for year of 2021” published on
control (full-text) Juchao Website date April 30, 2022.
Opinion type of auditing report of IC Negative opinions
whether the non-financial report had
No
major defects
Carried out modified opinion for internal control audit report from CPA
√Yes □No
Explanation on modified opinions for the audit report of internal control issued by CPA
46
司公限有份股心中游旅海东大南海 2021 文全告报度年年
To the whole shareholders of Hainan Dadonghai Tourism Centre(Holdings) Co., Ltd:
We have audited the effectiveness of the internal control over financial report of Hainan Dadonghai Tourism
Centre (Holdings) Co., Ltd. (hereinafter referred to as the Company) as of December 31, 2021, in accordance with
the Guidelines on Auditing Internal Control over Business Enterprises and relevant requirement of the Chinese
Standards for Certified Public Accountants.
I. Corporate responsibility for the internal control
The responsibility of the BOD is to establish and effectively implement the internal control and evaluate their
effectiveness in line with the Basic Standard of Internal Control for Business Enterprises, the Guidelines for
Application of Enterprise Internal Control and Guidelines for the Evaluation of Enterprise Internal Control.
II. Responsibility of a CPA
Internal controls are inherently limited and there is a possibility that misstatements cannot be prevented and
detected. In addition, changes in circumstances may cause internal control to become inappropriate, or to reduce
the degree of compliance with control policies and procedures, it is risky to speculate on the effectiveness of
future internal control based on internal control audit results.
III. Inherent limitations of internal control
Internal controls are inherently limited and there is a possibility that misstatements cannot be prevented and
detected. In addition, changes in circumstances may cause internal control to become inappropriate, or to reduce
the degree of compliance with control policies and procedures, it is risky to speculate on the effectiveness of
future internal control based on internal control audit results.
IV. Matters leading to adverse opinions
A major defect is a control defect or a combination of multiple control defects that exists in internal control and
may result in failure to prevent, discover and correct material misstatements in the financial statements in a timely
manner.
During the internal control audit, we found that the internal control of your company's financial reporting has the
following major defects:
As stated in the Basis for Unable to Express an Opinion section of out audit report on the 2021 annual financial
statement of Dadonghai, management of Dadonghai did not provide complete records and supporting evidence
relating to the revenue from guest room of South China Hotel, revenue from sales of moon cake and sales of
alcoholic beverages recognized in 2021, the internal control over relevant financial reports has material defects
being found.
V. Audit opinion on internal control over financial reporting
We believe that due to the above-mentioned major defects and their impact on the achievement of control
objectives, your company failed to maintain effective internal control over financial reporting in all material
aspects as of December 31, 2021 in accordance with the Basic Norms for Enterprise Internal Control and related
regulations .
47
司公限有份股心中游旅海东大南海 2021 文全告报度年年
VI. Audit opinion on internal control over financial reporting
We believe that due to the above-mentioned major defects and their impact on the achievement of control
objectives, your company failed to maintain effective internal control over financial reporting in all material
aspects as of December 31, 2021 in accordance with the Basic Norms for Enterprise Internal Control and related
regulations .
The internal control audit report, issued by CPA, has concerted opinion with self-evaluation report, issued from the Board
√ Yes □ No
XV. Self-examination and rectification of the special actions on governance
The Company strictly follow the relevant requirements of the special actions on governance, conducts self-examination on issues
related to corporate governance, and completes rectification of the problems found timely.
48
司公限有份股心中游旅海东大南海 2021 文全告报度年年
Section V. Environmental and Social Responsibility
I. Major environmental
The listed Company and its subsidiary whether belongs to the key sewage units released from environmental protection department
□Yes √ No
Administrative punishment for environmental problems during the reporting period: nil
Other environmental information disclosed refer to key polluters: nil
Measures taken to reducing the carbon emissions during the reporting period and their effectiveness
□Applicable √Not applicable
Reasons for not disclosing other environmental information
II. Social responsibility
Nil
III. Consolidating and expanding the achievements of poverty alleviation and rural
revitalization
The Company has not carried out relevant works during the reporting period due to operational difficulties.
49
司公限有份股心中游旅海东大南海 2021 文全告报度年年
Section VI. Important Events
I. 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
Commitme Commitm Implementa
Commitments Promise commit Content of commitments
nt date ent term tion
ments
On May 30, 2007, Luoniushan
Co., Ltd. made commitments in
the Company’s "Instructions for
reform of non-tradable shares"
(Revision) and "Instructions for
reform of non-tradable shares"
(Abstract of revision) that in view
The original
Commi of Dadonghai Company’s losses in
plans of
tments successive years and on the verge
for material
Commitments for Luoniushan of delisting, in order to reverse the
Share 2017-06-27 6 months assets
Share Merger Reform Co., Ltd. company's business difficulties,
Merger reorganizati
improve profitability and recover
Reform on was
the continuous business capacity,
terminated
Luoniushan Co., Ltd., the
controlling shareholder of
Dadonghai 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
50
司公限有份股心中游旅海东大南海 2021 文全告报度年年
commitment
Other commitments for
medium and small
shareholders
Completed on time
N
(Y/N)
The Company's stock commenced suspension of trading from the opening session on 15 February 2017
as it planned to fulfill its commitments. On 13 August 2017, proposals relating to the transaction as
Material Asset Acquisition and Connected Transaction Report (Plan) of Hainan Dadonghai Tourism
Centre (Holdings) Co., Ltd. were denied at the 11th extraordinary general meeting of the 8th 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
If the commitments is to the company. Upon application by the company, the company’s stock was suspended since the
not fulfilled on time, opening on January 31, 2018. Upon application by the company, the company’s stock resumed trading
shall explain the on February 8, 2018, and was transferred to the major asset restructuring since the opening on February
specify reason and the 14, 2018.
next work plan 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.
On April 27, 2021, trading of the stock of the Company has been suspended since the opening of the
market due to the planning of shares issuing for assets procurement, and the stock of the Company
resume from the opening of the market on May 14, 2021. On May 13, 2021, the “Share Issuing and
Purchasing Assets with Cash & Raise Matching Funds & Plans of Related Transaction and its Summary”
and proposal with the transaction concerned are deliberated and approved at the 6th extraordinary
meeting of 9th BOD.
The second extraordinary meeting of 10th BOD and second extraordinary meeting of 10th BOS were held
on July 29, 2021 to deliberated and approved the “Proposal on Termination of Major Assets
Reorganization”. After prudent study, BOD and BOS of the Company decided to terminated the major
assets reorganization. And the proposal was approved by the second extraordinary shareholders general
meeting of 2021 held on August 16, 2021.
At present, the company has no information that should be disclosed but not disclosed.
51
司公限有份股心中游旅海东大南海 2021 文全告报度年年
2. Concerning assets 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
II. 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.
III. External guarantee out of the regulations
□ Applicable √ Not applicable
No external guarantee out of the regulations occurred in the period.
IV. Statement on the latest “Non-standard audit report” by BOD
□Applicable √Not applicable
V. Explanation from Board of Directors, Supervisory Committee and Independent Directors
(if applicable) for “Non-standard audit report” that issued by CPA
√Applicable □ Not applicable
Found more on the “Specialized Description by the BOD on Matters Concerning the Non-standard Audit Opinions for 2021 on the
Audit Report”, “Specialized Description by the BOS on Matters Concerning the Non-standard Audit Opinions for 2021 on the Audit
Report” and “Specialized Description by the BOS on Matters Concerning the Non-standard Audit Opinions for 2021 on the Audit
Report” on Juchao Website dated April 30, 2022.
VI. Explanation of the changes in accounting polices, accounting estimates or correction of
significant accounting errors compared with the financial report of the previous year
□Applicable √Not applicable
The Company had no changes in accounting policies, accounting estimates or correction of significant accounting errors during the
reporting period.
VII. Compare with last year’s financial report; explain changes in consolidation statement’s
scope
□Applicable √Not applicable
No changes in consolidation statement scope in the reporting period
VIII. Appointment and non-reappointment (dismissal) of CPA
Accounting firm appointed
52
司公限有份股心中游旅海东大南海 2021 文全告报度年年
Name of domestic accounting firm BDO 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
11
firm
Name of domestic CPA Li Jinhua, Ma Lei
Continuous fixed number of year for the auditing service
4
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
IX. Particular about delisting after annual report disclosed
√Applicable □ Not applicable
The net profit attributable to shareholders of the listed company in audited Annual Report 2021 of the Company is negative and the
operation revenue is less than 100 million yuan, furthermore, the audit report on 2021 financial report was issued with disclaimer of
opinions. Stock of the Company (Stock code: 000613, 200613; Short form of the Stock: *ST Donghai A, *ST Donghai B) was
terminated by Shenzhen Stock Exchange due to triggering the mandatory delisting conditions for financial category.
X. Bankruptcy reorganization
□ Applicable √Not applicable
No bankruptcy reorganization for the Company in reporting period
XI. Significant lawsuits and arbitration of the Company
√Applicable □ Not applicable
Whether
Amount
to form Execution of
Basic situation of involved Litigation Litigation
an litigation Date of
litigation (in 10 (arbitration) (arbitration) trial Disclosure index
estimate (arbitration) disclosure
(arbitration) thousand progress results and impact
d judgment
Yuan)
liability
Hainan Dadonghai The court of The company has The
Announcement on
Tourism Centre first instance company
applied to the Significant
Group Co., Ltd. ruled against has applied
borrowed 2.76 the court for for court Litigation
731 N 2019-06-04
million yuan and company’s enforcement, but enforcement (Announcement
4.55 million yuan claim, and there is no result , which is No.: 2019-017,
from Hainan the company yet. Hainan still
No.:2020-021,
Dadonghai Tourism filed an pending.
53
司公限有份股心中游旅海东大南海 2021 文全告报度年年
Centre (Holdings) appeal. The Dadonghai No.: 2020-025
Co., Ltd. on October court of Tourism Centre and No.:
16, 1996 and second Group Co., Ltd. 2020-027)
December 26, 1996 instance
has not repaid the published on
respectively. And the ruled to
loan to the Securities Times,
company filed a revoke the
lawsuit in court for judgment of company, and the Hong Kong
the 7.31 million first instance, company is Commercial Daily
yuan outstanding. supporting currently unable and
the
to determine the www.cninfo.com.
company’s
impact of this cn.
claim. The
company has litigation on the
applied for company's current
court or future profits.
enforcement,
which is still
pending.
XII. Penalty and rectification
□ Applicable √Not applicable
No penalty and rectification for the Company in reporting period.
XIII. Integrity of the Company and its controlling shareholders and actual controllers
□Applicable √Not applicable
XIV. Major related transaction
1. Related transaction with routine operation concerned
√Applicable □ Not applicable
Whet
Tradi
her
ng
Related over Cleari Avail
Propo limit
Type Conte Rela transac the ng able Date Index
rtion
of nt of Pricin ted tion appro form
Relati in appro simila of of
Related relate relate g trans amount for
onshi simila ved
party d d princi actio (in 10 ved relate r disclo discl
p r
transa transa ple n thousa (in 10 d
transa limite marke sure osure
ction ction price nd transa
ctions thous
Yuan) d or ction t price
and
not
Yuan)
(Y/N)
First Provid Same
Luoniu Bank
Consu e Mark Mar 8.86
shan major 267.77 250 Y Trans as the
mptio servic et ket %
Co., ity fer transa
es and
54
司公限有份股心中游旅海东大南海 2021 文全告报度年年
Ltd. share n sell price price ction
produ
holder with
cts
non-r
elated
party
Total -- -- 267.77 -- 250 -- -- -- -- --
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
There was no related transactions by assets acquisition and sold for the Company in reporting period
3. Related transactions of mutual investment outside
□ Applicable √ Not applicable
There were no main related transactions of mutual investment outside for the Company in reporting period
4. Contact of related credit and debt
□ Applicable √ Not applicable
There was no contact of related credit or debt for the Company in the reporting period
5. Contact with the related finance companies
□ Applicable √Not applicable
There are no deposits, loans, credits or other financial business between the finance companies with associated relationship and
related parties
6. Transactions between the finance company controlled by the Company and related parties
□ Applicable √ Not applicable
There are no deposits, loans, credits or other financial business between the finance companies controlled by the Company and
related parties
55
司公限有份股心中游旅海东大南海 2021 文全告报度年年
7. Other major related transaction
□ Applicable √Not applicable
No other major related transaction in the Period.
XV. Significant contract and implementations
1. Trusteeship, contract and leasing
(1) Trusteeship
□ Applicable √ Not applicable
There was no trusteeship for the Company in reporting period
(2) Contract
□ Applicable √ Not applicable
There was no contract for the Company in reporting period
(3) Leasing
√Applicable □ Not applicable
Note of leasing
Item Tenant Lease life Term of lease
Shopping mall –Building Li Fuming 3 years 2019-11-01 to 2022-10-31
B in Hotel
Ground floor of Hotel A Li Fuming 3 years 2019-02-28 to 2022-02-27
Seaside stall and wood Sanya Leda Food Management Co., Ltd. 5 years 2018-01-01 to 2022-12-31
house
Multi-functional meeting Beijing Zhonghui Shengye Group Co., Ltd. 5 years 2021-09-01 to 2024-08-31
room
Projects that bring profit and losses to the Company to more than 10% of the total profit in the reporting period
√Applicable □ Not applicable
Leasing The
assets impact Whether
Leasing Basis for
Name of involved of be
Name Lease Lease income determin Associat
the Leasing in the leasing related
of start terminati (in 10 ing the ion
leasing assets amount income transacti
lessor date on date thousand leasing relation
party (in 10 on the ons
Yuan) income
thousand compan (Y/N)
Yuan) y
Sanya Seaside Increase
The 653 2018-01 2022-12 120 Contract N N/A
Leda stall and income
56
司公限有份股心中游旅海东大南海 2021 文全告报度年年
Compa Food wood -01 -31
Manage house
ny ment Co.,
Ltd.
2. Major Guarantee
□Applicable √ Not applicable
The Company had no guarantee in the reporting period.
3. Entrust others to cash asset management
(1) Trust financing
□ Applicable √ Not applicable
The Company had no trust financing in the reporting period.
(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 in the period.
XVI. Explanation on other significant events
√Applicable □ Not applicable
1. Receipt of “Lawyer’s Letter” from Sanya Power Bureau: by preliminary accounting from Sanya Power Bureau, the 10,313,373
Kwh electricity was understated under the name of South China Hotel from July 2006 to April 2016. The Company is still
communicating and negotiating with Sanya Power Bureau on relevant matters, and there is no result of the negotiation yet.
2. On April 27, 2021, trading of the stock of the Company has been suspended since the opening of the market due to the planning of
shares issuing for assets procurement, and the stock of the Company resume from the opening of the market on May 14, 2021. On
May 13, 2021, the “Share Issuing and Purchasing Assets with Cash & Raise Matching Funds & Plans of Related Transaction and its
Summary” and proposal with the transaction concerned are deliberated and approved at the 6th extraordinary meeting of 9th BOD. In
view of the recent market environment and impact of regulatory policies, the second extraordinary meeting of 10th BOD and second
extraordinary meeting of 10th BOS were held on July 29, 2021 to deliberated and approved the “Proposal on Termination of Major
Assets Reorganization”. After prudent study, BOD and BOS of the Company decided to terminated the major assets reorganization,
found more in the Announcement on Termination of the Major Assets Reorganization (Notice No.: 2021-057) published by the
Company dated July 30, 2021. And the proposal was approved by the second extraordinary shareholders general meeting of 2021
held on August 16, 2021, found more in the Resolution of Second Extraordinary Shareholders General Meeting of 2021 (Notice
No.: 2021-060) published by the Company dated August 17, 2021.
57
司公限有份股心中游旅海东大南海 2021 文全告报度年年
3. The net profit attributable to shareholders of the listed company in audited Annual Report 2021 of the Company is negative and the
operation revenue is less than 100 million yuan, furthermore, the audit report on 2021 financial report was issued with disclaimer of
opinions. Stock of the Company (Stock code: 000613, 200613; Short form of the Stock: *ST Donghai A, *ST Donghai B) was
terminated by Shenzhen Stock Exchange due to triggering the mandatory delisting conditions for financial category.
XVII. Significant event of subsidiary of the Company
□Applicable √Not applicable
58
司公限有份股心中游旅海东大南海 2021 文全告报度年年
Section VII. Changes in Shares and Particulars about Shareholders
I. Changes in Shares
1. Changes in shares
Unit: Share
Increase/Decrease in the Change (+,
Before the Change After the Change
-)
B
New o Capitali
share n zation Sub
Proportio Oth
Amount s us of tota Amount Proportion
n ers
issue sh public l
d ar reserve
es
I. Restricted shares 9,220,200 2.53% 0 0 0 0 0 9,220,200 2.53%
1. State-owned shares
2. State-owned legal
1,399,200 0.38% 0 0 0 0 0 1,399,200 0.38%
person’s shares
3. Other domestic shares 7,821,000 2.15% 0 0 0 0 0 7,821,000 2.15%
Including: Domestic legal
7,821,000 2.15% 0 0 0 0 0 7,821,000 2.15%
person’s shares
Domestic natural person’s
shares
4. Foreign shares
Including: Foreign legal
person’s shares
Foreign natural person’s
shares
II. Unrestricted shares 354,879,800 97.47% 0 0 0 0 0 354,879,800 97.47%
1. RMB ordinary shares 266,879,800 73.30% 0 0 0 0 0 266,879,800 73.30%
2. Domestically listed
88,000,000 24.17% 0 0 0 0 0 88,000,000 24.17%
foreign shares
3. Overseas listed foreign
shares
4. Others
59
司公限有份股心中游旅海东大南海 2021 文全告报度年年
III. Total shares 364,100,000 100.00% 0 0 0 0 0 364,100,000 100.00%
Reasons for share changed
□ Applicable √ Not applicable
Approval of share changed
□ Applicable √ Not applicable
Ownership transfer of share changes
□ 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
Unit: Share
Number
Number of Number of new Number of
of shares
shares shares shares Restriction
Shareholders’ name released Released date
restricted at restricted in the restricted at reasons
in the
Period-begin Year Period-end
Year
Legal
Shenyang Jin’an Industrial
831,600 0 0 831,600 commitment in 9999-01-01
Corporation
share reform
Legal
Sanya Wangli Building
92,400 0 0 92,400 commitment in 9999-01-01
Materials Sales
share reform
Legal
Sanya Zhongxing
2,541,000 0 0 2,541,000 commitment in 9999-01-01
Development Co., Ltd.
share reform
Legal
Sanya Real Estate Valuation
924,000 0 0 924,000 commitment in 9999-01-01
Agent
share reform
Legal
Southern Industrial and
660,000 0 0 660,000 commitment in 9999-01-01
Trading Corporation
share reform
Legal
Hainan Branch of Bank of
924,000 0 0 924,000 commitment in 9999-01-01
Communications Co., Ltd.
share reform
60
司公限有份股心中游旅海东大南海 2021 文全告报度年年
Guangzhou Company of Legal
Hainan International 660,000 0 0 660,000 commitment in 9999-01-01
Investment Co., Ltd. share reform
Legal
Hainan Dadonghai Tourism
739,200 0 0 739,200 commitment in 9999-01-01
Co.
share reform
Legal
Haikou Dongfang Urban
924,000 0 0 924,000 commitment in 9999-01-01
credit Cooperative
share reform
Legal
Haiguotou Industrial Co.,
924,000 0 0 924,000 commitment in 9999-01-01
Ltd.
share reform
Total 9,220,200 0 0 9,220,200 -- --
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
Unit: Share
Total preference
Total common
Total common shareholders Total preference shareholders
stock shareholders
stock shareholders with voting with voting rights recovered at
26,426 at end of last month 24,020 0 0
in reporting rights recovered end of last month before annual
before annual report
period-end at end of report disclosed
disclosed
reporting period
Particulars about shares held above 5% by shareholders or top ten shareholders
Full name of Nature of Proport Number of Changes in Amount of Amount of Information of
61
司公限有份股心中游旅海东大南海 2021 文全告报度年年
Shareholders shareholder ion of shares held report period restricted un-restricted shares
shares at shares held shares held pledged,
held period-end tagged or
frozen
State
Amo
of
unt
share
Domestic non
Luoniushan Co., Ltd. state-owned 17.55% 63,885,980 0 0 63,885,980
corporate
Domestic nature
Yang Meiqin 4.47% 16,279,028 0 0 16,279,028
person
Domestic nature
Pan Anjie 4.01% 14,593,598 0 0 14,593,598
person
Hainan Ya’an Domestic non
Residence Property state-owned 2.25% 8,205,800 0 0 8,205,800
Service Co., Ltd. corporate
Domestic nature
Pan Aiping 1.64% 5,972,013 1861275 0 5,972,013
person
Domestic nature
Chen Jinlian 1.14% 4,166,400 -3600000 0 4,166,400
person
Lhasa Xingqing Domestic non
Network Technology state-owned 1.03% 3,760,000 3760000 0 3,760,000
Co., Ltd. corporate
Domestic nature
Pan Guoping 0.99% 3,600,000 3600000 0 3,600,000
person
Domestic nature
Hu Jing 0.97% 3,523,600 3,523,600 0 3,523,600
person
Domestic nature
Lu Zhangfu 0.89% 3,251,944 3,251,944 0 3,251,944
person
Strategy investors or general legal person
becomes top 10 shareholders due to rights N/A
issued
Among the above mentioned shareholders, Hainan Ya An Ju Property Service Co., Ltd. is the
wholly-owned subsidiary of Luoniushan Co., Ltd.; Yang Meiqin, Pan Anjie, Chen Jinlian, Pan
Explanation on associated relationship or
Aiping and Pan Guoping are the persons acting in concert; the Company is unknown whether
accordant action among the aforesaid
there 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.
Description of the above shareholders in
relation to delegate/entrusted voting rights N/A
and abstention from voting rights.
62
司公限有份股心中游旅海东大南海 2021 文全告报度年年
Special note on the repurchase account
among the top 10 shareholders (if N/A
applicable) (see note 10)
Particular about top ten shareholders with un-restrict shares held
Amount of un-restrict shares held at Type of shares
Shareholders’ name
Period-end Type Amount
Luoniushan Co., Ltd. 63,885,980 RMB common share 63,885,980
Domestically listed foreign
Yang Meiqin 16,279,028 16,279,028
share
Domestically listed foreign
Pan Anjie 14,593,598 14,593,598
share
Hainan Ya An Ju Property
8,205,800 RMB common share 8,205,800
Service Co., Ltd.
Domestically listed foreign
Pan Aiping 5,972,013 5,972,013
share
Domestically listed foreign
Chen Jinlian 4,166,400 4,166,400
share
Lhasa Xingqing Network
3,760,000 RMB common share 3,760,000
Technology Co., Ltd.
Domestically listed foreign
Pan Guoping 3,600,000 3,600,000
share
Hu Jing 3,523,600 RMB common share 3,523,600
Lu Zhangfu 3,251,944 RMB common share 3,251,944
Among the above mentioned shareholders, Hainan Ya An Ju Property Service Co., Ltd. is the
Expiation on associated relationship or
wholly-owned subsidiary of Luoniushan Co., Ltd.; Yang Meiqin, Pan Anjie, Chen Jinlian, Pan
consistent actors within the top 10
Aiping and Pan Guoping are the persons acting in concert; the Company is unknown whether
un-restrict shareholders and between top 10
there exists associated relationship or belongs to the consistent actor regulated by the
un-restrict shareholders and top 10
Management Measure of Information Disclosure on Change of Shareholding for Listed
shareholders
Company among the other shareholders.
Explanation on shareholders involving
margin business about top ten common
N/A
stock shareholders 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.
63
司公限有份股心中游旅海东大南海 2021 文全告报度年年
2. Controlling shareholder (The largest shareholder) of the Company
Nature of controlling shareholders: community collective holding
Type of controlling shareholders: legal person
Legal
Controlling shareholders (The person/perso Date of Organization
Main operation business
largest shareholder) n in charge of foundation code
the unit
Livestock rearing, sale of livestock,
livestock acquisition, R&D of bio-feed;
real estate development and operation;
leasing services, warehousing services,
collect and pay utilities bills on behalf
Unified social
of the customers (general operating
December 19, credit code
Luoniushan Co., Ltd. Xu Zili items are operates independently,
1987 91460000284089
licensed operating items with relevant
747P
license or approval documents to
operate) (items subject to approval in
line with the laws, subject to approval
of the relevant authority before business
activities can be carried out)
Equity of other domestic/oversea
listed company control by Found more details in full text of Annual Report 2021 of Luoniushan Co., Ltd. (Short form of
controlling shareholder as well as the stock: Luoniushan, Stock code: 000735)
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.
3. Actual controller and persons acting in concert
Nature of actual controller: domestic natural person
Type of actual controller: natural person
Name of actual Relationship with the actual Whether obtained right of residence of other
Nationality
controller 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
Main profession and
Husbandry Machinery Engineering Co., Ltd.; Chairman of Tianjin Baodi Agricultural Technology Co.,
title
Ltd.; Vice Chairman and General Manager of Luoniushan co., Ltd. from August 2006 to November
2011; serves as Chairman of Luoniushan co., Ltd. since November 2011; Chairman and President of
64
司公限有份股心中游旅海东大南海 2021 文全告报度年年
th
Luoniushan co., Ltd. since July 2021; now he takes as the 7 CPPCC member of Hainan Province.
Listed company in and
out of China controlled N/A
in past 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
Actual controller controlling the Company by entrust or other assets management
□Applicable √Not applicable
4. The total number of shares pledged by controlling shareholders or the first majority shareholder and its
persons acting in concert accounts for 80% of the shares held by them
□ Applicable √Not applicable
65
司公限有份股心中游旅海东大南海 2021 文全告报度年年
5. Particulars about other legal person shareholders with over 10% shares held
□ Applicable √Not applicable
6. Limitation and reducing the holdings of shares of controlling shareholders, actual controllers,
restructuring side and other commitment subjects
□ Applicable √Not applicable
IV. The specific implementation of shares buy-back during the reporting period
Implementation progress of shares buy-back
□ Applicable √ Not applicable
Implementation progress of the reduction of repurchases shares by centralized bidding
□Applicable √Not applicable
66
司公限有份股心中游旅海东大南海 2021 文全告报度年年
Section VIII. Preferred Stock
□ Applicable √ Not applicable
The Company had no preferred stock in the Period.
67
司公限有份股心中游旅海东大南海 2021 文全告报度年年
Section IX. Corporate Bonds
□Applicable √Not applicable
68
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Section X. Financial Report
I. Audit report
Type of audit opinion Unable to express opinions
Signing date of audit report April 28, 2022
BDO CHINA Shu Lun Pan Certified Public Accountants
Name of audit institute
(LLP)
Document serial of audit report PCPAR [2022] No.
Name of the CPA Li Jinhua, Ma Lei
Auditor’s Report
To all shareholders of Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd.
I. Unable to express an opinion
We have been engaged to 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 2021 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.
We do not express an audit opinion on the accompanying financial statement of Dadonghai due to the
materiality of the matters described in the Basis for Disclaimer of Opinion section, we were unable to
obtained sufficient appropriate audit evidence to form a basis for out audit opinion on the financial
statement.
II. Basis for Disclaimer of Opinion
(i)Guest room revenue
The revenue from guest room is recognized as 19.6606 million yuan for year of 2021. We found that the
number of room occupancy registered in the business system of South China Hotel, the branch of
Dadonghai, in 2021 was 3,718 more than the number of room occupancy recorded by the public security
authority’s information; and the third-party payment platform records show the existence of multiple
payments from the same payer and payments from hotel sales staff. Management of Dadonghai did not
provide supporting evidence for these discrepancies and circumstances, therefore, we were unable to obtain
sufficient and appropriate audit evidence regarding the room revenue and related costs and expenses of
Dadonghai for 2021.
(ii)Revenue from sales of moon cake.
The revenue from moon cake sales are recognized as 1,073,400 yuan for year of 2021. We found that the
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, 2021
main customers of moon cake sales are mainly the enterprises and individuals who have business dealings
or related party relationship with Dadonghai. Management of Dadonghai failed to provide complete records
and supporting evidence of the flows of bills, logistics and funds related to the production and sales of
moon cake, therefore, we were unable to obtain sufficient and appropriate audit evidence regarding the
revenue from sales of moon cake and the related costs and expenses mentioned above.
(iii) Revenue from sales of alcohol
The revenue from sales of alcohol are recognized as 2,462,200 yuan for year of 2021, customer is the
supplier of Dadonghai. Management of Dadonghai failed to provide complete logistics records related to
the sales of alcohol and failure to provide supporting evidence as to the commercial reasonableness of the
transaction and the fairness of the transaction price. Therefore, we were unable to obtain sufficient and
appropriate audit evidence regarding the revenue from sales of alcohol beverages and the related costs and
expenses mentioned above.
(iv)Going concern
As described in Note (II)-2 of the financial statement, Dadonghai has suffered losses for two consecutive
years and has triggered the risks of mandatory delisting, and the operation will be materially affected. We
are not in a position to judge the appropriateness of the adoption of the going concern assumption for the
preparation of the financial statement of 2021.
III. 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 (if applicable)
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.
IV. Auditor's Responsibilities for the Audit of the Financial Statements
Our responsibility is to perform the audit of the financial statement of Dadonghai in accordance with the
Chinese CPA auditing standard in order to issue an audit report. However, we were unable to obtain
sufficient appropriate audit evidence to form the basis for our audit opinion due to the matters described in
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, 2021
section of “basis for disclaimer of opinion”.
In accordance with the Code of Ethics for Certified Public Accountants in China, we are independent of
Dadonghai and have fulfilled our other responsibilities with respect to professional ethics.
BDO CHINA Shu Lun Pan Certified Public Accountant of China: Li
Jinhua
Certified Public Accountants (LLP) （（（（
Project Partner ））））
Certified Public Accountant of China:
Ma Lei
ShanghaiChina 28 April 2022
II. Financial Statement
Expressed in Renminbi unless otherwise stated
1. Consolidated Balance Sheet
Prepared by HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
December 31, 2021
Unit: RMB/CNY
Item December 31, 2021 December 31, 2020
Current assets:
Monetary funds 4,684,700.89 2,924,459.75
Settlement provisions
Capital lent
Trading financial assets
Derivative financial assets
Note receivable
Account receivable 287,068.29 429,303.32
Receivable financing
Accounts paid in advance
Insurance receivable
Reinsurance receivables
Contract reserve of reinsurance receivable
Other account receivable 504,530.57 432,560.55
Including: Interest receivable
Dividend receivable
Buying back the sale of financial assets
Inventories 179,862.40 2,009,928.83
Contractual assets
Assets held for sale
Non-current asset due within one year
Other current assets 3,549,962.34 3,977,452.24
Total current assets 9,206,124.49 9,773,704.69
Non-current assets:
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, 2021
Loans and payments on behalf
Debt investment
Other debt investment
Long-term account receivable
Long-term equity investment
Investment in other equity instrument
Other non-current financial assets
Investment real estate 6,960,909.75 7,435,433.31
Fixed assets 31,279,819.99 34,694,023.75
Construction in progress
Productive biological asset
Oil and gas asset
Right-of-use assets
Intangible assets 19,768,087.56 20,580,474.72
Expense on Research and Development
Goodwill
Long-term expenses to be apportioned 18,674,612.11 24,957,702.73
Deferred income tax asset
Other non-current asset
Total non-current asset 76,683,429.41 87,667,634.51
Total assets 85,889,553.90 97,441,339.20
Current liabilities:
Short-term loans
Loan from central bank
Capital borrowed
Trading financial liability
Derivative financial liability
Note payable
Account payable 795,626.05 808,710.46
Accounts received in advance
Contractual liability 1,035,422.63 626,285.33
Selling financial asset of repurchase
Absorbing deposit and interbank deposit
Security trading of agency
Security sales of agency
Wage payable 2,169,216.61 2,595,861.40
Taxes payable 335,949.69 366,892.96
Other account payable 3,776,914.63 6,167,763.36
Including: Interest payable
Dividend payable
Commission charge and commission payable
Reinsurance payable
Liability held for sale
Non-current liabilities due within one year 3,307,522.82 6,621,497.94
Other current liabilities 62,125.36 37,577.12
Total current liabilities 11,482,777.79 17,224,588.57
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, 2021
Non-current liabilities:
Insurance contract reserve
Long-term loans 3,295,280.42 9,893,757.94
Bonds payable
Including: Preferred stock
Perpetual capital securities
Lease liability
Long-term account payable
Long-term wages payable
Accrual liability 1,489,685.04 1,489,685.04
Deferred income
Deferred income tax liabilities
Other non-current liabilities 1,914,592.66
Total non-current liabilities 4,784,965.46 13,298,035.64
Total liabilities 16,267,743.25 30,522,624.21
Owner’s equity:
Share capital 364,100,000.00 364,100,000.00
Other equity instrument
Including: Preferred stock
Perpetual capital securities
Capital public reserve 58,856,994.26 54,142,850.01
Less: Inventory shares
Other comprehensive income
Reasonable reserve
Surplus public reserve
Provision of general risk
Retained profit -353,335,183.61 -351,324,135.02
Total owner’ s equity attributable to parent company 69,621,810.65 66,918,714.99
Minority interests
Total owner’ s equity 69,621,810.65 66,918,714.99
Total liabilities and owner’ s equity 85,889,553.90 97,441,339.20
Legal Representative: Yuan Xiaoping
Accounting Principal: Fu Zongren
Accounting Firm’s Principal: Fu Zongren
2. Balance sheet of parent company
Unit: RMB/CNY
Item December 31, 2021 December 31, 2020
Current assets:
Monetary funds 4,684,083.20 2,923,474.26
Trading financial assets
Derivative financial assets
Note receivable
Account receivable 287,068.29 429,303.32
Receivable financing
Accounts paid in advance
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, 2021
Other account receivable 504,530.57 432,560.55
Including: Interest receivable
Dividend receivable
Inventories 179,862.40 2,009,928.83
Contractual assets
Assets held for sale
Non-current assets maturing within one year
Other current assets 3,549,962.34 3,977,452.24
Total current assets 9,205,506.80 9,772,719.20
Non-current assets:
Debt investment
Other debt investment
Long-term receivables
Long-term equity investments 1,000,000.00 1,000,000.00
Investment in other equity instrument
Other non-current financial assets
Investment real estate 6,960,909.75 7,435,433.31
Fixed assets 31,279,819.99 34,694,023.75
Construction in progress
Productive biological assets
Oil and natural gas assets
Right-of-use assets
Intangible assets 19,768,087.56 20,580,474.72
Research and development costs
Goodwill
Long-term deferred expenses 18,674,612.11 24,957,702.73
Deferred income tax assets
Other non-current assets
Total non-current assets 77,683,429.41 88,667,634.51
Total assets 86,888,936.21 98,440,353.71
Current liabilities:
Short-term borrowings
Trading financial liability
Derivative financial liability
Notes payable
Account payable 795,626.05 808,710.46
Accounts received in advance
Contractual liability 1,035,422.63 626,285.33
Wage payable 2,169,216.61 2,595,861.40
Taxes payable 335,949.69 366,892.96
Other accounts payable 3,776,914.63 7,167,232.06
Including: Interest payable
Dividend payable
Liability held for sale
Non-current liabilities due within one year 3,307,522.82 6,621,497.94
Other current liabilities 1,061,594.06 37,577.12
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, 2021
Total current liabilities 12,482,246.49 18,224,057.27
Non-current liabilities:
Long-term loans 3,295,280.42 9,893,757.94
Bonds payable
Including: Preferred stock
Perpetual capital securities
Lease liability
Long-term account payable
Long term employee compensation payable
Accrued liabilities 1,489,685.04 1,489,685.04
Deferred income
Deferred income tax liabilities
Other non-current liabilities 1,914,592.66
Total non-current liabilities 4,784,965.46 13,298,035.64
Total liabilities 17,267,211.95 31,522,092.91
Owners’ equity:
Share capital 364,100,000.00 364,100,000.00
Other equity instrument
Including: Preferred stock
Perpetual capital securities
Capital public reserve 58,856,994.26 54,142,850.01
Less: Inventory shares
Other comprehensive income
Special reserve
Surplus reserve
Retained profit -353,335,270.00 -351,324,589.21
Total owner’s equity 69,621,724.26 66,918,260.80
Total liabilities and owner’s equity 86,888,936.21 98,440,353.71
3. Consolidated profit statement
Unit: RMB/CNY
Item 2021 2020
I. Total operating income 30,234,468.57 15,511,989.37
Including: Operating income 30,234,468.57 15,511,989.37
Interest income
Insurance gained
Commission charge and commission income
II. Total operating cost 32,739,437.93 27,583,513.78
Including: Operating cost 18,436,047.07 12,768,462.84
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
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, 2021
Reinsurance expense
Tax and extras 649,186.05 499,451.99
Sales expense 5,422,194.59 4,853,722.93
Administrative expense 7,984,445.20 9,026,426.56
R&D expense
Financial expense 247,565.02 435,449.46
Including: Interest expenses 217,383.75 551,742.76
Interest income 23,759.18 155,036.56
Add: Other income 473,123.33 817,825.34
Investment income (Loss is listed with “-”)
Including: Investment income on affiliated company and
joint venture
The termination of income recognition for financial
assets measured by amortized cost
Exchange income (Loss is listed with “-”)
Net exposure hedging income (Loss is listed with “-”)
Income from change of fair value (Loss is listed with
“-”)
Loss of credit impairment (Loss is listed with “-”) 56,914.17 -63,433.95
Losses of devaluation of asset (Loss is listed with “-”)
Income from assets disposal (Loss is listed with “-”)
III. Operating profit (Loss is listed with “-”) -1,974,931.86 -11,317,133.02
Add: Non-operating income 368,104.68 286,427.86
Less: Non-operating expense 404,221.41 537,183.81
IV. Total profit (Loss is listed with “-”) -2,011,048.59 -11,567,888.97
Less: Income tax expense
V. Net profit (Net loss is listed with “-”) -2,011,048.59 -11,567,888.97
(i) Classify by business continuity
1.continuous operating net profit (net loss listed with ‘-”) -2,011,048.59 -11,567,888.97
2.termination of net profit (net loss listed with ‘-”)
(ii) Classify by ownership
1.Net profit attributable to owner’s of parent company -2,011,048.59 -11,567,888.97
2.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
3.Change of fair value of investment in other equity
instrument
4.Fair value change of enterprise's credit risk
5. Other
(ii) Other comprehensive income items which will be
reclassified subsequently to profit or loss
1.Other comprehensive income under equity method
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, 2021
that can transfer to gain/loss
2.Change of fair value of other debt investment
3.Amount of financial assets re-classify to other
comprehensive income
4.Credit impairment provision for other debt
investment
5.Cash flow hedging reserve
6.Translation differences arising on translation of
foreign currency financial statements
7.Other
Net after-tax of other comprehensive income attributable to
minority shareholders
VII. Total comprehensive income -2,011,048.59 -11,567,888.97
Total comprehensive income attributable to owners of parent
-2,011,048.59 -11,567,888.97
Company
Total comprehensive income attributable to minority
shareholders
VIII. Earnings per share:
(i) Basic earnings per share -0.0055 -0.0318
(ii) Diluted earnings per share -0.0055 -0.0318
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
Unit: RMB/CNY
Item 2021 2020
I. Operating income 30,234,468.57 15,511,989.37
Less: Operating cost 18,436,047.07 12,768,462.84
Taxes and surcharge 649,186.05 499,451.99
Sales expenses 5,422,194.59 4,853,722.93
Administration expenses 7,984,445.20 9,026,226.56
R&D expenses
Financial expenses 247,197.22 435,195.45
Including: Interest expenses 217,383.75 551,742.76
Interest income 23,759.18 155,020.57
Add: Other income 473,123.33 817,825.34
Investment income (Loss is listed with “-”)
Including: Investment income on affiliated Company and
joint venture
The termination of income recognition for financial
assets measured by amortized cost (Loss is listed with “-”)
Net exposure hedging income (Loss is listed with “-”)
Changing income of fair value (Loss is listed with “-”)
Loss of credit impairment (Loss is listed with “-”) 56,914.17 -63,433.95
Losses of devaluation of asset (Loss is listed with “-”)
Income on disposal of assets (Loss is listed with “-”)
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, 2021
II. Operating profit (Loss is listed with “-”) -1,974,564.06 -11,316,679.01
Add: Non-operating income 368,104.68 286,427.86
Less: Non-operating expense 404,221.41 537,183.81
III. Total Profit (Loss is listed with “-”) -2,010,680.79 -11,567,434.96
Less: Income tax
IV. Net profit (Net loss is listed with “-”) -2,010,680.79 -11,567,434.96
(i) continuous operating net profit (net loss listed with ‘-”) -2,010,680.79 -11,567,434.96
(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
3.Change of fair value of investment in other equity
instrument
4.Fair value change of enterprise's credit risk
5. Other
(ii) Other comprehensive income items which will be
reclassified subsequently to profit or loss
1.Other comprehensive income under equity method
that can transfer to gain/loss
2.Change of fair value of other debt investment
3.Amount of financial assets re-classify to other
comprehensive income
4.Credit impairment provision for other debt
investment
5.Cash flow hedging reserve
6.Translation differences arising on translation of
foreign currency financial statements
7.Other
VI. Total comprehensive income -2,010,680.79 -11,567,434.96
VII. Earnings per share:
(i) Basic earnings per share -0.0055 -0.0318
(ii) Diluted earnings per share -0.0055 -0.0318
5. Consolidated cash flow statement
Unit: RMB/CNY
Item 2021 2020
I. Cash flows arising from operating activities:
Cash received from selling commodities and providing labor
34,458,394.76 15,291,982.42
services
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
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, 2021
Net increase of insured savings and investment
Cash received from interest, commission charge and
commission
Net increase of capital borrowed
Net increase of returned business capital
Net cash received by agents in sale and purchase of securities
Write-back of tax received 568.93
Other cash received concerning operating activities 1,689,720.65 954,747.04
Subtotal of cash inflow arising from operating activities 36,148,684.34 16,246,729.46
Cash paid for purchasing commodities and receiving labor
7,479,478.48 8,610,462.77
service
Net increase of customer loans and advances
Net increase of deposits in central bank and interbank
Cash paid for original insurance contract compensation
Net increase of capital lent
Cash paid for interest, commission charge and commission
Cash paid for bonus of guarantee slip
Cash paid to/for staff and workers 11,334,389.52 11,285,378.24
Taxes paid 1,011,740.98 778,432.92
Other cash paid concerning operating activities 3,107,546.04 2,301,723.51
Subtotal of cash outflow arising from operating activities 22,933,155.02 22,975,997.44
Net cash flows arising from operating activities 13,215,529.32 -6,729,267.98
II. Cash flows arising from investing activities:
Cash received from recovering investment
Cash received from investment income
Net cash received from disposal of fixed, intangible and other
400.00 8,300.00
long-term assets
Net cash received from disposal of subsidiaries and other
units
Other cash received concerning investing activities 4,710,262.67
Subtotal of cash inflow from investing activities 4,710,662.67 8,300.00
Cash paid for purchasing fixed, intangible and other long-term
5,674,367.05 13,741,025.28
assets
Cash paid for investment
Net increase of mortgaged loans
Net cash received from subsidiaries and other units obtained
Other cash paid concerning investing activities
Subtotal of cash outflow from investing activities 5,674,367.05 13,741,025.28
Net cash flows arising from investing activities -963,704.38 -13,732,725.28
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 19,791,474.22
Other cash received concerning financing activities
Subtotal of cash inflow from financing activities 19,791,474.22
Cash paid for settling debts 9,897,716.28 3,299,238.76
Cash paid for dividend and profit distributing or interest 593,867.52 528,722.34
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, 2021
paying
Including: Dividend and profit of minority shareholder paid
by subsidiaries
Other cash paid concerning financing activities
Subtotal of cash outflow from financing activities 10,491,583.80 3,827,961.10
Net cash flows arising from financing activities -10,491,583.80 15,963,513.12
IV. Influence on cash and cash equivalents due to fluctuation in
exchange rate
V. Net increase of cash and cash equivalents 1,760,241.14 -4,498,480.14
Add: Balance of cash and cash equivalents at the period
2,924,459.75 7,422,939.89
-begin
VI. Balance of cash and cash equivalents at the period -end 4,684,700.89 2,924,459.75
6. Cash flow statement of parent Company
Unit: RMB/CNY
Item 2021 2020
I. Cash flows arising from operating activities:
Cash received from selling commodities and providing labor
34,458,394.76 15,291,982.42
services
Write-back of tax received 568.93
Other cash received concerning operating activities 1,690,088.45 954,731.05
Subtotal of cash inflow arising from operating activities 36,149,052.14 16,246,713.47
Cash paid for purchasing commodities and receiving labor
7,479,478.48 8,610,462.77
service
Cash paid to/for staff and workers 11,334,389.52 11,285,378.24
Taxes paid 1,011,740.98 778,385.12
Other cash paid concerning operating activities 3,107,546.04 2,301,253.51
Subtotal of cash outflow arising from operating activities 22,933,155.02 22,975,479.64
Net cash flows arising from operating activities 13,215,897.12 -6,728,766.17
II. Cash flows arising from investing activities:
Cash received from recovering investment
Cash received from investment income
Net cash received from disposal of fixed, intangible and
400.00 8,300.00
other long-term assets
Net cash received from disposal of subsidiaries and other
units
Other cash received concerning investing activities 4,710,262.67
Subtotal of cash inflow from investing activities 4,710,662.67 8,300.00
Cash paid for purchasing fixed, intangible and other
5,674,367.05 13,741,025.28
long-term assets
Cash paid for investment
Net cash received from subsidiaries and other units obtained
Other cash paid concerning investing activities
Subtotal of cash outflow from investing activities 5,674,367.05 13,741,025.28
Net cash flows arising from investing activities -963,704.38 -13,732,725.28
III. Cash flows arising from financing activities:
Cash received from absorbing investment
Cash received from loans 19,791,474.22
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, 2021
Other cash received concerning financing activities
Subtotal of cash inflow from financing activities 19,791,474.22
Cash paid for settling debts 9,897,716.28 3,299,238.76
Cash paid for dividend and profit distributing or interest
593,867.52 528,722.34
paying
Other cash paid concerning financing activities
Subtotal of cash outflow from financing activities 10,491,583.80 3,827,961.10
Net cash flows arising from financing activities -10,491,583.80 15,963,513.12
IV. Influence on cash and cash equivalents due to fluctuation in
exchange rate
V. Net increase of cash and cash equivalents 1,760,608.94 -4,497,978.33
Add: Balance of cash and cash equivalents at the period
2,923,474.26 7,421,452.59
-begin
VI. Balance of cash and cash equivalents at the period -end 4,684,083.20 2,923,474.26
7. Consolidate change of owners’ equity
Current period
Unit: RMB/CNY
2021
Owners’ equity attributable to the parent Company
Other
equity
instru
ment O
P
P t
r
e L h
o
r e e M
v
p s r R i
i
e s e n
S s
t : c a o
u i
u o s r
P r o
a I m o i
r p n
l n p n t
e l
v r a O y
f u o
Item c e e b t Total owners’
e s f
a Capital n h l h i equity
Share capital r O Retained profit Subtotal
p reserve t e e e n
r t r g
i o n r t
e h e e
t r s r e
d e s n
a y i e r
r e e
l v s e
s r r
s e e s
t v a
s h r t
o e l
e a i v s
c r n e
c r
k e c
u i
r s o
s
i m
k
t e
i
e
s
I. The ending balance of -351,324,135.0
364,100,000.00 54,142,850.01 66,918,714.99 66,918,714.99
the previous year 2
Add: Changes of
accounting policy
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, 2021
Error correction of the
last period
Enterprise combine under
the same control
Other
II. The beginning balance -351,324,135.0
364,100,000.00 54,142,850.01 66,918,714.99 66,918,714.99
of the current year 2
III. Increase/ Decrease in
the period (Decrease is 4,714,144.25 -2,011,048.59 2,703,095.66 2,703,095.66
listed with “-”)
(i) Total comprehensive
-2,011,048.59 -2,011,048.59 -2,011,048.59
income
(ii) Owners’ devoted and
decreased capital
1.Common shares
invested by shareholders
2. Capital invested by
holders of other equity
instruments
3. Amount reckoned into
owners equity with
share-based payment
4. Other
(iii) Profit distribution
1. Withdrawal of surplus
reserves
2. Withdrawal of general
risk provisions
3. Distribution for owners
(or shareholders)
4. Other
(iv) Carrying forward
internal owners’ equity
1. Capital reserves
conversed to capital
(share capital)
2. Surplus reserves
conversed to capital
(share capital)
3. Remedying loss with
surplus reserve
4. Carry-over retained
earnings from the defined
benefit plans
5. Carry-over retained
earnings from other
comprehensive income
6. Other
(v) Reasonable reserve
1. Withdrawal in the
report period
2. Usage in the report
period
(vi) Others 4,714,144.25 4,714,144.25 4,714,144.25
IV. Balance at the end of 364,100,000.00 58,856,994.26 -353,335,183.6 69,621,810.65 69,621,810.65
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, 2021
the period 1
Last Period
Unit: RMB/CNY
2020
Total
Mino
owne
rity
Owners’ equity attributable to the parent Company rs’
intere
equit
sts
y
Other
equity
instru
ment O
P
P t
r
e L h
o
r e e
v
p s r R
i
e s e
S s
t : c a
u i
u o s
P r o
a I m o
r p n
Item l n p n
e l
v r a O
f u o
c e e b t
e s f
a n h l h
Share capital r O Capital reserve Retained profit Subtotal
p t e e e
r t r g
i o n r
e h e e
t r s r
d e s n
a y i e
r e e
l v s
s r r
s e e
t v a
s h r
o e l
e a i v
c r n e
c r
k e c
u i
r s o
s
i m
k
t e
i
e
s
I. The ending balance of
364,100,000.00 54,142,850.01 -339,756,246.05 78,486,603.96 78,486,603.96
the previous year
Add: Changes of
accounting policy
Error correction of the
last period
Enterprise combine
under the same control
Other
II. The beginning
balance of the current 364,100,000.00 54,142,850.01 -339,756,246.05 78,486,603.96 78,486,603.96
year
III. Increase/ Decrease in
-11,567,888.9
the period (Decrease is -11,567,888.97 -11,567,888.97
7
listed with “-”)
(i) Total comprehensive -11,567,888.9
-11,567,888.97 -11,567,888.97
income 7
(ii) Owners’ devoted and
decreased capital
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, 2021
1.Common shares
invested by shareholders
2. Capital invested by
holders of other equity
instruments
3. Amount reckoned into
owners equity with
share-based payment
4. Other
(iii) Profit distribution
1. Withdrawal of surplus
reserves
2. Withdrawal of general
risk provisions
3. Distribution for
owners (or shareholders)
4. Other
(iv) Carrying forward
internal owners’ equity
1. Capital reserves
conversed to capital
(share capital)
2. Surplus reserves
conversed to capital
(share capital)
3. Remedying loss with
surplus reserve
4. Carry-over retained
earnings from the
defined benefit plans
5. Carry-over retained
earnings from other
comprehensive income
6. Other
(v) Reasonable reserve
1. Withdrawal in the
report period
2. Usage in the report
period
(vi) Others
IV. Balance at the end of
364,100,000.00 54,142,850.01 -351,324,135.02 66,918,714.99 66,918,714.99
the period
8. Change of owners’ equity of parent company
Current period
Unit: RMB/CNY
2021
Other L O R S
equity e O
t e u
Item instru s t
Capital h a r Total owners’
Share capital ment s Retained profit h
reserve e s p equity
P P O : e
r o l r
r e t
e r h I n u
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, 2021
f p e n c a s
e e r v
o b
r t e
r u n m l r
e a t p e e
d l o r s
r
e r e
s c y
t a h e r
o p s e s v
c i h n e e
k t a
s r
a r
l e i v
s v e
s e
e
c
u i
r n
i c
t
o
i
e m
s e
I. The ending balance of the previous year 364,100,000.00 54,142,850.01 -351,324,589.21 66,918,260.80
Add: Changes of accounting policy
Error correction of the last period
Other
II. The beginning balance of the current year 364,100,000.00 54,142,850.01 -351,324,589.21 66,918,260.80
III. Increase/ Decrease in the period (Decrease is
4,714,144.25 -2,010,680.79 2,703,463.46
listed with “-”)
(i) Total comprehensive income -2,010,680.79 -2,010,680.79
(ii) Owners’ devoted and decreased capital
1.Common shares invested by shareholders
2. Capital invested by holders of other equity
instruments
3. Amount reckoned into owners equity with
share-based payment
4. Other
(iii) Profit distribution
1. Withdrawal of surplus reserves
2. Distribution for owners (or shareholders)
3. Other
(iv) Carrying forward internal owners’ equity
1. Capital reserves conversed to capital (share
capital)
2. Surplus reserves conversed to capital (share
capital)
3. Remedying loss with surplus reserve
4. Carry-over retained earnings from the defined
benefit plans
5. Carry-over retained earnings from other
comprehensive income
6. Other
(v) Reasonable reserve
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, 2021
1. Withdrawal in the report period
2. Usage in the report period
(vi) Others 4,714,144.25 4,714,144.25
IV. Balance at the end of the period 364,100,000.00 58,856,994.26 -353,335,270.00 69,621,724.26
Last period
Unit: RMB/CNY
2020
Other
equity O
instru t
ment h
P e
e L r R
r e e
p s c a S
e s u
t : o s r
u m o
P p
a I p n
r l
l n r a
e
v u O
f e e b
c s t
Item e n h l Total owners’
Share capital a
r O Capital reserve t e e Retained profit h
p equity
r t o r e
i n
e h r e r
t
d e y s r s
a
r i e
l e
s s v s
t h r
s e e
o a v
e r r
c e
c e i v
k
u s n e
r
c
i
t o
i m
e e
s
I. The ending balance of the previous year 364,100,000.00 54,142,850.01 -339,757,154.25 78,485,695.76
Add: Changes of accounting policy
Error correction of the last period
Other
II. The beginning balance of the current year 364,100,000.00 54,142,850.01 -339,757,154.25 78,485,695.76
III. Increase/ Decrease in the period (Decrease -11,567,434.9
-11,567,434.96
is listed with “-”) 6
-11,567,434.9
(i) Total comprehensive income -11,567,434.96
6
(ii) Owners’ devoted and decreased capital
1.Common shares invested by shareholders
2. Capital invested by holders of other equity
instruments
3. Amount reckoned into owners equity with
share-based payment
4. Other
(iii) Profit distribution
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, 2021
1. Withdrawal of surplus reserves
2. Distribution for owners (or shareholders)
3. Other
(iv) Carrying forward internal owners’ equity
1. Capital reserves conversed to capital (share
capital)
2. Surplus reserves conversed to capital (share
capital)
3. Remedying loss with surplus reserve
4. Carry-over retained earnings from the defined
benefit plans
5. Carry-over retained earnings from other
comprehensive income
6. Other
(v) Reasonable reserve
1. Withdrawal in the report period
2. Usage in the report period
(vi) Others
IV. Balance at the end of the period 364,100,000.00 54,142,850.01 -351,324,589.21 66,918,260.80
1. Company profile
1.1 Overview
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, 2021, 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
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, 2021
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 Luo Niu Shan Co., Ltd.
The financial statements were approved by all directors of the Company for disclosure on
April **, 2022.
1.2 Scope to the consolidated financial statements
As at December 31, 2021, the subsidiary included into the Company's scope of consolidated
financial statements is as follows:
Subsidiary Name
Hainan Wengao Tourist Resources Development Co., Ltd. (hereinafter referred to as
"the Wengao Tourism")
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 2021 and changes thereof.
2. Basis for the preparation of the financial statements
2.1 Preparation basis
The Company prepared financial statements in accordance with the Accounting Standards
for Business Enterprises — Basic Standards and concrete 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
Compilation Rules for Information Disclosure by Companies Offering Securities to the
Public No.15 – General Provision of Financial Report issued by the China Securities
Regulatory Commission (CSRC).
2.2 Going concern
The company achieved operating revenue of 30.2345 million in 2021, net profit attributable
to the parent company was -20.10 million, and net profit after deducting non-recurring
gains and losses was -4.2594 million yuan. The company has suffered losses for nearly two
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, 2021
consecutive years, and the delisting risk triggered by the company's stock will have a
significant impact on the company's operation. May affect the company's ability to continue
as a going concern.
3. Prime accounting policies and accounting estimates
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 consolidated and
the Company s financial position as of December 31, 2021 as well as operation results and
’
cash flows for the year 2021.
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 (including the
goodwill arising from the acquisition of the combined party by the ultimate controller)
acquired by the Company in business combinations are measured at book values of assets
and liabilities of the combined party 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 under different control: the cost of merger is the fair value of the
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, 2021
assets, liabilities incurred or assumed and equity securities issued by the purchaser in order
to obtain the control of the purchaser on the purchase date. The acquiring entity shall
recognize the positive balance between the combination costs and the fair value of the
identifiable net assets it obtains from the acquired entity as goodwill; The acquiring entity
shall recognize the negative balance between the combination costs and the fair value of the
identifiable net assets it obtains from the acquired entity as profit or loss of the current
period. The identifiable assets, liabilities and contingent liabilities obtained by the purchaser
in the merger meeting the recognition conditions shall be measured at fair value on the
purchase date.
The expenses directly related to the enterprise merger shall be recorded into the current
profit or loss when incurred. The transaction cost of issuing equity securities or debt
securities for the purpose of business merger shall be included in the initial recognized
amount of equity securities or debt securities.
3.6 Preparation methods of consolidated financial statements
3.6.1 Scope of consolidation
The scope of consolidated financial statements shall be determined on the basis of
control, and the scope of consolidated financial statements shall be including the
Company and all its subsidiaries.
Control exists when the investor has all of following: power over the investee;
exposure, or rights, to variable returns from its involvement with the investee and
has the ability to affect those returns through its power over the investee.
3.6.2 Procedures of consolidation
The Company regards the whole enterprise group as an accounting subject and
prepares consolidated financial statements in accordance with the unified
accounting policy, reflecting the overall financial situation, operating results and
cash flow of the enterprise group. The Company and subsidiaries, subsidiaries
between the impact of internal transactions to offset. If the internal transaction
indicates that the relevant assets have impairment losses, the full recognition of this
part of the loss. If the accounting policy adopted by the subsidiary company and
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, 2021
the accounting period are inconsistent with the company, the necessary adjustments
shall be made in accordance with the Company's accounting policy and accounting
period when preparing the consolidated financial statements.
The owner's equity of the subsidiary, the current net profit and loss and the share of
the minority shareholders in the current comprehensive income are listed
separately under the owner's equity item in the consolidated balance sheet, the net
profit item in the consolidated profit table and the total comprehensive income item
in the consolidated profit table. The current loss shared by the minority
shareholders of the subsidiary exceeds the balance formed by the minority
shareholders' share in the initial owner's equity of the subsidiary, thus reducing the
equity of several shareholders.
(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 operating results
and cash flows of the subsidiary or business from the beginning to the end of
the reporting period shall be included in the consolidated financial statements.
The beginning of the consolidated financial statements and 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, the equity investment held before the
control over the combined party has been 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.
During the reporting period, the consolidated financial statements shall be
incorporated into the consolidated financial statements on the basis of the fair
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, 2021
value of identifiable assets, liabilities and contingent liabilities as determined
on the date of purchase, as a result of the consolidation of subsidiaries or
businesses not under common control.
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. Other comprehensive income and other changes in owner's
equity under equity method accounting which can be re-classified into profit
and loss after the share of the buyer held before the purchase date are
converted into the current investment income of the purchase date.
(2) Disposal of subsidiaries
General method of treatment
When the control right of the investee is lost due to the disposal of part of
the equity investment or other reasons, the remaining equity investment
after disposal shall be remeasured according to its fair value on the date of
loss of 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 income related to the equity investment of the original
subsidiary company, which can be reclassified into profit or loss in the
future, and other owner's equity changes under the accounting of equity
method, which can be reclassified into profit or loss, are converted into
current investment income when losing control right.
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
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, 2021
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':
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.
If each transaction is a package deal, the transaction shall be treated as a
transaction dealing with the subsidiary and losing control. Before the loss
of control, the difference between the disposal price and the share of the
net assets of the subsidiary corresponding to the disposal investment shall
be recognized as other comprehensive income in the consolidated financial
statements and transferred to the gains and losses of the current period of
loss of control when the control is lost.
If each transaction is not a package deal, prior to the loss of control, the
equity investment of the subsidiary shall be partially disposed of without
loss of control; in the event of loss of control, Accounting treatment shall
be carried out according to the general treatment method of the disposal
subsidiary.
(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
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, 2021
The share premium in the capital reserves under the consolidated balance sheet
will be adjusted at the difference between the disposal price 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. Where the share premium is insufficient
to write down, the retained earnings will be adjusted.
3.7 Classification of joint venture arrangements and accounting treatment for joint
operations
The joint venture arrangement is divided into joint operation and joint venture.
Joint operation refers to the joint venture arrangement in which the joint venture party
enjoys the assets related to the arrangement and bears the liabilities related to the
arrangement.
The Company confirms the following items relating to the share of interests in joint
operations:
(1) To recognize the assets held separately by the Company and the assets held jointly in
accordance with its share;;
(2) To recognize the liabilities undertaken by the Company solely and liabilities jointly
undertaken by the Company based on shares held;
(3) To recognize the revenue from the sales of output share enjoyed by the Company in
the joint operation;
(4) To recognize the revenue from the sales of the joint operation output based on the
shares held by the Company; and
(5) To recognize the separate costs, and costs for the joint operation based on the shares
held by the Company.
The Company's investment in the joint venture using equity method accounting, see this
note "3.13 Long-term equity investment".
3.8 Recognition criteria of cash and cash equivalents
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, 2021
Cash refers to the cash on hand of the company and the deposits available for payment at
any time. Cash equivalents refer to the investments held by the company with short term,
highly liquid investments that are readily convertible into known amounts of cash and are
subject to an insignificant risk of change in value
3.9 Foreign currency business and translation of foreign currency statements
3.9.1 Foreign currency transactions
Foreign currency business uses the spot exchange rate on the date of transaction as the
conversion rate to convert the foreign currency amount into RMB.
The balance of foreign currency monetary items on the balance sheet date is converted
at the spot exchange rate on the balance sheet date, and the exchange difference arising
therefrom shall be included in the current profit or 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
3.9.2 Translation of foreign currency statements
The assets and liabilities items in the balance sheet shall be translated at the spot
exchange rate on the balance sheet date; The owners' equity items, except the
"undistributed profit" items, are translated at the spot rate at the time of
occurrence. Income and expense items in the income statement shall be translated at
the spot exchange rate on the date of transaction.
When disposing an overseas operation, the balance of translation in foreign currency
financial statements related to the overseas operation shall be transferred from the
owner's equity item to the profit or loss of the disposal period.
3.10 Financial instruments
When the Company becomes a party to a financial instrument contract, it recognizes a
financial asset, financial liability or equity instrument.
3.10.1 Classification of financial instruments
According to the business model of the Company's management of financial assets
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, 2021
and the characteristics of the contractual cash flow of financial assets, financial
assets are classified at the time of initial recognition as: financial assets measured
at amortized cost, financial assets measured at fair value and recorded in other
comprehensive income and financial assets measured at fair value and recorded in
the profits and losses of the current period.
The Company will meet the following conditions and not designated as fair value
measurement and its changes into the current profit or loss of financial assets,
classified as amortized cost measurement of financial assets:
- The business model is aimed at collecting contract cash flows;
- Contract cash flows are payments only for principal and interest based on
outstanding principal amounts.
The Company will also meet the following conditions and is not designated as fair
value measurement and its changes into the current profit or loss of financial assets,
classified as fair value measurement and its changes into other comprehensive
income financial assets (debt instruments):
- The business model targets both the collection of contract cash flows and the sale
of the financial asset;
- Contract cash flows are payments only for principal and interest based on
outstanding principal amounts.
For non-transactional equity investment, the Company may irrevocably designate it
at the time of initial recognition as a financial asset measured at fair value and
recorded in other comprehensive income (equity instrument). The designation is
made on the basis of a single investment, and the relevant investment conforms to
the definition of equity instruments from the issuer's point of view.
In addition to the above financial assets measured at amortized cost and at fair
value and recorded in other comprehensive income, The Company classifies all
remaining financial assets as financial assets measured at fair value and recorded in
the profits and losses of the current period. At the time of initial recognition, if
accounting mismatches can be eliminated or significantly reduced, The Company
may irrevocably designate financial assets that should be classified as amortized
cost or measured at fair value and whose changes are included in other
comprehensive income as financial assets measured at fair value and recorded in
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, 2021
the profits and losses of the current period.
Financial liabilities are classified at the time of initial recognition as: financial
liabilities measured at fair value and recorded in current profits and losses and
financial liabilities measured at amortized cost.
Financial liabilities that meet one of the following conditions may be designated at
the time of initial measurement as financial liabilities measured at fair value and
whose changes are recorded into the profits and losses of the current period:
1) This designation can eliminate or significantly reduce accounting mismatches.
2) Manage and evaluate the financial liability portfolio or financial assets and
financial liabilities portfolio on the basis of fair value according to the enterprise
risk management or investment strategy specified in the official written document,
and report to key managers on this basis within the enterprise.
3) The financial liability contains embedded derivatives that need to be split
separately.
In accordance with the above conditions, such financial liabilities designated by the
company mainly include: (specific description of the designated situation)
3.10.2 Recognition basis and measurement method of financial instruments
)1( Financial assets measured at amortized costs
Financial assets measured at amortized cost include notes receivable, accounts
receivable, other receivables, long-term receivables, debt investment, etc., are initially
measured at fair value, and the related transaction costs are included in the initial
recognition amount; Accounts receivable that do not contain significant financing
components and accounts receivable that the Company has decided not to consider
financing components for more than one year are initially measured at the contract
transaction price.
Interest calculated by the actual interest rate method during the holding period is
recorded into the current profit or loss.
Upon recovery or disposal, the difference between the obtained price and the book
value of the financial asset is recorded into the current profit or loss.
(2) Financial assets (debt instruments) measured at fair value and whose changes are
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, 2021
included in other comprehensive income
Financial assets (debt instruments) measured at fair value and whose changes are
included in other comprehensive income, including receivables financing, other debt
investments, etc., shall be measured at fair value, and the relevant transaction costs
shall be included in the initial recognized amount. The financial asset is subsequently
measured at fair value, and changes in fair value are included in other comprehensive
gains and losses except interest, impairment losses or gains and gains and exchange
gains calculated using the real interest rate method.
Upon termination of recognition, the accumulated gains or losses previously recorded
in other comprehensive income shall be transferred from other comprehensive income
and recorded in the current profits and losses.
(3) Financial assets (equity instruments) measured at fair value and whose changes are
included in other consolidated income
Financial assets (equity instruments) measured at fair value and whose changes are
included in other comprehensive income, including investments in other equity
instruments, shall be initially measured at fair value, and relevant transaction costs
shall be included in the initial recognized amount. The financial assets are measured
according to the fair value, and whose changes of the fair value are included in other
comprehensive income. The dividends obtained are recorded in the current profits and
losses.
Upon termination of recognition, accumulated gains or losses previously recorded in
other comprehensive earnings are transferred from other comprehensive earnings and
recorded in retained earnings.
(4) Financial assets measured at fair value and whose changes are included in the
current profits and losses
Financial assets measured at fair value and whose changes are included in the current
profits and losses, including trading financial assets, derivative financial assets, other
non-current financial assets, etc., shall be measured at fair value, and the relevant
transaction expenses shall be included in the current profits and losses. The financial
assets are measured at fair value, and changes in fair value are included in the current
profit or loss.
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, 2021
(5) Financial liabilities measured at fair value and whose changes are included in the
current profit or loss
Financial liabilities measured at fair value and whose changes are included in the
current profits and losses include transactional financial liabilities and derivative
financial liabilities, which are initially measured at fair value, and the relevant
transaction expenses are included in the current profit or loss. The financial liability is
measured at fair value, and changes in fair value are included in the current profit or
loss.
Upon termination of recognition, the difference between the book value and the
consideration price is recorded in the current profits and losses.
(6) Financial liabilities measured at amortization costs
Financial liabilities measured at amortization costs include short-term borrowings,
notes payable, accounts payable, other payables, long-term borrowings, bonds payable,
long-term payables, and shall be initially measured at fair value, and related transaction
costs are included in the initial recognized amount.
The interest calculated using the actual interest rate method during the holding period
is included in the current profits and losses.
Upon termination of recognition, the difference between the consideration price and the
book value of the financial liability shall be recorded in the current profits and losses.
3.10.3 Financial asset termination recognition and financial asset transfer
Upon meeting one of the following conditions, the Company terminates the
recognition of financial assets:
- Termination of contractual rights to collect cash flows from financial assets;
- Financial assets have been transferred and almost all risks and rewards of
ownership of financial assets have been transferred to the transferee;
- Financial assets have been transferred and although the Company has neither
transferred nor retained almost all risks and rewards in the ownership of financial
assets, it has not retained control over financial assets.
In the event of a transfer of financial assets, if almost all risks and rewards in the
ownership of financial assets are retained, the recognition of the financial assets
shall not be terminated.
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, 2021
In judging whether the transfer of financial assets meets the above conditions for
the termination of financial assets, the principle of substance over form is adopted.
The company distinguishes the transfer of financial assets into the overall transfer
of financial assets and partial transfer. If the transfer of financial assets as a whole
meets the conditions for termination of recognition, the difference between the
following two amounts shall be recorded into the profits or losses of the current
period:
(1) The book value of the financial assets transferred;
(2) The sum of the consideration received as a result of the transfer and the
cumulative amount of the change in fair value that was originally directly included
in the owner's equity (where the financial assets involved in the transfer are
financial assets (debt instruments) measured at fair value and whose changes are
included in other comprehensive income.
If the partial transfer of financial assets meets the conditions for termination of
recognition, the book value of the transferred financial assets as a whole shall be
apportioned according to their relative fair value between the termination of
recognition and the non-termination of recognition, The difference between the
following two amounts shall be recorded into the profits and losses of the current
period:
(1) To terminate the book value of the recognized portion;
(2) The consideration of the termination of the recognition portion corresponds to
the sum of the amount of the termination of the recognition portion (where the
transferred financial assets are financial assets (debt instruments) measured at fair
value and whose changes are included in other comprehensive income) in the
cumulative amount of the change in fair value originally directly included in the
shareholders' equity.
If the transfer of financial assets does not meet the conditions for termination of
recognition, the financial asset shall continue to be recognized, and the
consideration received shall be recognized as a financial liability.
3.10.4 De-recognition of financial liabilities
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, 2021
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.
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
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, 2021
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
The Company estimates the expected credit losses of financial assets measured at amortized cost,
financial assets (debt instruments) measured at fair value and whose changes are included in other
comprehensive income, financial guarantee contracts, etc. individually or in combination.
Taking into account the reasonable and reliable information about past events, current situation and
prediction of future economic conditions, and taking the risk of default as the weight, the Company
calculates the probability weighted amount of the present value of the difference between the cash
flow receivable under the contract and the cash flow expected to be received, and recognizes the
expected credit loss.
If the credit risk of the financial instrument has increased significantly since the initial confirmation,
the Company measures its loss preparation at the amount equivalent to the expected credit loss of the
financial instrument for the whole life of the financial instrument; If the credit risk of the financial
instrument has not increased significantly since the initial confirmation, the Company measures its
loss preparation at the amount equivalent to the expected credit loss of the financial instrument for the
next 12 months. The resulting increase or reversal of loss preparation shall be recorded as impairment
loss or gain in the current profit or loss.
The Company compares the risk of default of financial instruments on the balance sheet date with the
risk of default on the initial recognition date to determine the relative change of default risk during
the expected duration of financial instruments, so as to evaluate whether the credit risk of financial
instruments has increased significantly since the initial recognition. Usually more than 30 days
overdue, the Company believes that the credit risk of the financial instrument has increased
significantly, unless there is conclusive evidence that the credit risk of the financial instrument has not
increased significantly since the initial confirmation.
If the credit risk of a financial instrument is low on the balance sheet date, the Company considers
that the credit risk of the financial instrument has not increased significantly since the initial
recognition.
If there is objective evidence that a financial asset has been devalued, the Company shall make
provision for the impairment of the financial asset on a single basis.
For accounts receivable, whether or not it contains significant financing elements, the Company is
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, 2021
prepared to measure losses in accordance with the expected credit loss for the entire life span. For the
existence of objective evidence to show the existence of impairment, as well as other accounts
receivable applicable to the individual evaluation of the impairment test, to confirm the expected
credit loss, and make a single impairment provision. For accounts receivable without objective
evidence of impairment or when a single financial asset is unable to assess the expected credit loss at
reasonable cost, the company divides the accounts receivable into several portfolios according to the
characteristics of credit risk. The basis for determining the portfolio is as follows:
Portfolio Name Basis
Account Receivables Portfolio 1 External Customers for Account Receivables
Consolidated Related Party Customers for
Account Receivables Portfolio 2
Account Receivables
For the account receivables divided into portfolios, the Company refers to the history of credit loss
experience, combined with the current situation and the forecast of the future economic situation, to
prepare tables of aging of account receivables and comparison tables of expected credit loss rate of
the entire duration, and to calculate the expected credit loss
For lease receivables, long-term receivables formed by the Company through the sale
of goods or the provision of services, the Company chooses to always measure its loss
provisions at an amount equal to the expected credit loss for the entire duration.
For other receivables, if the credit risk has not significantly increased since the initial
recognition, it is in the first stage. The Company shall measure the loss provision
according to the expected credit loss in the next 12 months. If the credit risk has
increased significantly since the initial recognition, but the credit impairment has not
occurred, it is in the second stage. If the credit impairment has occurred since the initial
recognition, it is in the third stage. The Company shall measure the loss provision
according to the expected credit loss of the instrument throughout its life.
The Company divides other receivables into several portfolios based on the credit risk
characteristics. The basis for determining the portfolio is as follows:
Portfolio Name Basis
Deposit, Security Deposit and Reserve
Other Receivables Portfolio 1
Receivables
Receivables of Advance Payment for Another
Other Receivables Portfolio 2
Party
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, 2021
Portfolio Name Basis
Other Receivables Portfolio 3 Other Account Receivables
For other receivables divided into portfolios, the Company refers to historical
experience in credit loss, combined with the current situation and forecasted future
economic situation, and by default risk exposure and the credit loss rate within next 12
months or the whole duration, to calculate the expected credit losses.
3.11 Inventories
3.11.1 Classification of inventories
The inventories are classified into: raw materials, commodity stocks, low-value
consumables, food materials, fuels, etc.
3.11.2 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.
3.11.3 Determining basis of the net realizable value of inventories and method for
inventory depreciation reserve
On the balance sheet date, inventory should be measured according to the lower
cost and net realizable value. When the inventory cost is higher than its net
realizable value, a provision for decline in value of inventories is made. Net
realizable value refers to the estimated selling price of inventory in daily activities
minus the estimated cost to be incurred at the time of completion, the estimated
sales expenses and the amount of related taxes and fees.
Inventory of goods directly used for sale, such as finished goods, goods in stock
and materials used for sale, to determine the net realizable value in the normal
course of production and operation at the estimated selling price of the inventory
minus the estimated sales expenses and related taxes; inventory of materials
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, 2021
requiring processing to determine the net realizable value in the normal course of
production and operation at the estimated selling price of the finished product
minus the estimated costs to be incurred at the time of completion, estimated sales
expenses and related taxes; The net realizable value of inventory held for the
execution of a sales contract or a labor contract is calculated on the basis of the
contract price. If the quantity of inventory held is more than the quantity ordered in
the sales contract, the net realizable value of excess inventory is calculated on the
basis of general sales price.
If the factors affecting the previous write-down of inventory value have
disappeared, resulting in the net realizable value of inventory being higher than its
book value, the original provision for decline in value is reversed and the reversal
is included in profit or loss for the period.
3.11.4 Inventory system
The Group maintains a perpetual inventory system.
3.11.5 Amortization method for low-cost consumables and packaging materials
(1) Low-cost consumables are amortized using the immediate write-off method;
(2) Packaging materials are amortized using the immediate write-off method.
3.12 Contractual assets
3.12.1 Methods and criteria for the recognition of contract assets
The Company lists contract assets or contractual liabilities in the balance sheet
according to the relationship between performance obligations and customer
payments. The Company's right to receive consideration (and depends on factors
other than the passage of time) for the transfer of goods or services to customers is
listed as a contract asset. Contract assets and contractual liabilities under the same
contract are shown in net terms. The Company's right to collect consideration from
customers unconditionally (depending on the passage of time only) is shown
separately as accounts receivables.
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, 2021
3.12.2 Methods of determining expected credit loss of contract assets and accounting
treatment
The method of determining the expected credit loss of the contract assets and the
method of accounting treatment are detailed in the test method and accounting
treatment method of the impairment of the financial assets in note 3(10) and 6"
3.13 Long-term equity investment
3.13.1 Judgment criteria for joint control and significant influence
Joint control refers to the common control of an arrangement according to the
relevant agreement, and the related activities of the arrangement must be agreed by
the participants who share the control right before they can make decisions. If the
company, together with other partners, exercises joint control over the invested unit
and has the right to the net assets of the invested unit, the invested unit shall be the
joint venture of the company.
Significant influence refers to the power to participate in the decision-making of
the financial and operating policy decisions of the investee, but it cannot control or
jointly control the formulation of these policies with other parties. If the Company
can exert great influence on the investee, the investee shall be a joint venture of the
company.
3.13.2 Determination of initial investment cost
(1) Long-term equity investments resulting from merger
For the long-term equity investment of the subsidiary formed by the merger under
the same control, the initial investment cost of the long-term equity investment is
based on the share of the book value of the owner's equity of the merged party in
the consolidated financial statements of the final controlling party on the merger
date. The difference between the initial investment cost of long-term equity
investment and the book value of payment consideration is adjusted to adjust the
equity premium in the capital reserve; when the equity premium in the capital
reserve is insufficient, the retained earnings are adjusted. If the invested entity
under the same control can be controlled due to additional investment and other
reasons, the initial investment cost of the long-term equity investment recognized
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, 2021
in accordance with the above principles is the difference between the book value of
the long-term equity investment before the merger and the book value of the new
consideration of the shares further obtained on the date of the merger, the equity
premium is adjusted, when the equity premium in the capital reserve is insufficient,
the retained earnings are adjusted.
For the long-term equity investment of subsidiaries formed by the merger of
enterprises not under common control, the combined cost determined on the
purchase date is taken as the initial investment cost of the long-term equity
investment. If the investee not under the common control can be controlled due to
additional investment and other reasons, the initial investment cost shall be taken
as the sum of the original equity investment book value plus the new investment
cost.
(2) Long-term equity investments obtained by means other than merger
Long-term equity investments obtained by cash payment are based on the actual
purchase price as the initial investment cost.
The long-term equity investment obtained by issuing equity securities shall be
regarded as the initial investment cost according to the fair value of issuing equity
securities.
3.13.3 Subsequent measurements and recognition of profit or loss
(1) Long-term equity investments accounted for under cost method
The Company's long-term equity investment in subsidiaries is accounted for by
cost method unless the investment meets the conditions for holding for sale. In
addition to the actual payment of the investment or the declared but not yet
issued cash dividends or profits contained in the consideration, the company
shall recognize the current investment income in accordance with the cash
dividend or profit declared by the investee.
(2) Long-term equity investments accounted for under the equity method
The long-term equity investment of joint venture and joint venture shall be
accounted by equity method. When the initial investment cost of a long-term
equity investment exceeds the Group's share of the fair value of the investee's
identifiable net assets at the time of acquisition, no adjustment is made to the
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, 2021
initial investment cost. Where the initial investment cost is less than the
Group's share of the fair value of the investee's identifiable net assets at the
time of acquisition, the difference is recognized in profit or loss for the period,
and the cost of the long-term equity investment is adjusted accordingly.
The Company shall recognize the investment income and other combined
income according to the net profit or loss realized by the invested unit and the
share of other combined income, and adjust the book value of the long-term
equity investment. The carrying amount of the investment shall be reduced by
the portion of any profit distributions or cash dividends declared by the
investee that is distributed to the investing enterprise. The investing enterprise
shall adjust the carrying amount of the long-term equity investment for other
changes in owners' equity of the investee (other than net profits or losses, other
comprehensive income and profit distribution), and include the corresponding
adjustment in owners' equity.
When recognizing the share of the net profit or loss of the investee, other
comprehensive income and other owner's equity changes, it shall be based on
the fair value of the identifiable net assets of the invested unit at the time of
obtaining the investment, and shall be confirmed after adjusting the net profit
and other comprehensive income of the investee in accordance with the
accounting policy and accounting period of the company.
The unrealized internal transaction gains and losses between the Company and
the joint venture and the joint venture shall be offset by the portion attributable
to the Company calculated in proportion to the amount to be enjoyed, and the
investment income shall be recognized on this basis, except where the assets
invested or sold constitute business. If the unrealized internal transaction loss
with the invested unit belongs to the impairment loss of assets, the full amount
shall be confirmed.
The net loss of a company to a joint venture or a joint venture shall, in addition
to the obligation to bear additional losses, be reduced to zero by the book value
of the long-term equity investment and other long-term interests that
essentially constitute the net investment in the joint venture or joint venture. If
the joint venture or joint venture realizes net profit after the joint venture or
joint venture, the Company shall restore the confirmed income sharing amount
after the income sharing amount makes up for the unrecognized loss share
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, 2021
amount.
(3) Disposal of long-term equity investments
Disposal of long-term equity investment, its book value and the actual acquisition
price difference is accounted into the current profit or loss.
Where long-term equity investment accounted by part of the disposal equity
method is still accounted for by the equity method, the other comprehensive
income recognized by the original equity method is carried forward according to
the corresponding proportion on the same basis as the assets or liabilities directly
disposed of by the invested unit, and the other owner's equity changes are
transferred to the current profit or loss proportionally.
In case the joint control or significant influence over the investee is lost for
disposing part of equity investments or other reasons, other comprehensive income
recognized by the original equity investment due to the use of equity accounting
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, and other comprehensive income changes should all
transferred to the current profit or loss when the equity method is no longer
adopted.
Where the control of the investee has been lost due to the disposal of part of the
equity investment and other reasons, when preparing the individual financial
statements, the remaining equity can be jointly controlled or significantly affected
by the invested unit, and shall be accounted for according to the equity method,
and adjusted by equity method accounting when the remaining equity is regarded
as acquired. Other comprehensive income recognized prior to obtaining the control
of the invested unit shall be carried forward proportionally on the same basis as the
assets or liabilities directly disposed of by the invested unit, and transferred to the
profits and losses of the current period due to the changes in other owners' equity
recognized by equity method accounting; If the surplus equity cannot exercise joint
control or exert significant influence on the invested unit, it shall be recognized as
a financial asset, and the difference between the fair value and the book value on
the date of loss of control shall be recorded into the profits and losses of the current
period. All other comprehensive income and other changes in owners' equity
confirmed before the acquisition of the control right of the invested entity shall be
carried forward.
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, 2021
Where the subsidiary equity investment is disposed of step by step through
multiple transactions until the loss of control is a package deal, each transaction is
treated as a transaction that disposes of the subsidiary equity investment and loses
control. The difference between the price of each disposal before the loss of control
and the book value of the disposed equity to the entitled long-term equity
investment is first recognized as other comprehensive income in individual
financial statements, and then transferred to the current profit or loss of the loss of
control at the time of loss of control. If it is not a package deal, each transaction
shall be treated separately.
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 subsequent expenditure related to investment real estate is included in the cost of
investment real estate when the relevant economic benefits are likely to flow in and its cost
can be reliably measured; otherwise, it is recorded into the profits and losses of the current
period when it occurs
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 Identification and initial measurement 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
Notes to the Financial Statements Page 42
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
(2) The costs of the fixed assets can be measured reliably.
Fixed assets are initially measured at cost, taking into account the impact of
expected disposal costs.
Subsequent expenditures related to fixed assets are included in the cost of fixed
assets when the economic benefits associated with them are likely to flow in and
their costs can be reliably measured; for the replaced part, the book value is
terminated; all other subsequent expenditures are recorded at the time of
occurrence into the current profit or loss
3.15.2 Depreciation method
Depreciation of fixed assets is classified by the method of average life, and the
depreciation rate is determined according to the category of fixed assets, the
expected useful life and the estimated net residual value rate. For the fixed assets
with impairment provisions, the depreciation amount shall be determined in the
future period according to the book value after deducting the impairment
preparation and according to the useful life. If the service life of each component of
fixed assets is different or the economic benefits are provided to the enterprise in
different ways, different depreciation rates or depreciation methods are selected to
calculate depreciation separately.
Depreciation methods, depreciation life, residual value rate and annual depreciation
rate of all types of fixed assets are 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 5 5 19.00
3.15.3 Fixed assets disposal
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, 2021
Termination of recognition of fixed assets when they are disposed of or are not
expected to generate economic benefits through use or disposal. The amount of
disposal income of fixed assets sold, transferred, scrapped or damaged after
deducting its book value and related taxes and fees shall be recorded into the
profits and losses of the current period
3.16 Construction in progress
Construction in progress shall be measured at the actual cost incurred. Actual costs include
construction costs, installation costs, capitalized borrowing costs, and other expenditures
necessary to bring the work in progress to a predetermined serviceable condition. When the
project under construction reaches the predetermined usable state, it shall be turned into
fixed assets and be depreciated from the following month.
3.17 Borrowing costs
3.17.1 Recognition principles of capitalization of borrowing costs
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 or 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.
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.
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
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, 2021
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.
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.
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.
3.17.4 Calculation method of capitalization amount of borrowing costs
For special loans borrowed for the purchase or production of assets that meet the
capitalization conditions, the borrowing costs actually incurred in the current
period shall be specially borrowed, less the amount of interest income earned by
the unused loan funds deposited in the bank or investment income obtained by
temporary investment to determine the capitalized amount of the borrowing costs.
For a general loan occupied for the purchase or production of assets that meet the
capitalization conditions, the amount of borrowing expenses to be capitalized shall
be calculated according to the weighted average of the cumulative asset
expenditure exceeding the part of the special loan multiplied by the capitalization
Notes to the Financial Statements Page 45
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
rate of the general loan occupied. The capitalization rate is determined by the
weighted average real interest rate of the general loan.
During the capitalization period, the exchange difference between the principal and
interest of the foreign currency special loan shall be capitalized and included in the
cost of the assets eligible for capitalization. The exchange difference between the
principal and interest of foreign currency loans other than foreign currency special
loans is recorded into the current profit or loss.
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.
(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 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
Item Amortization method Basis
useful life
Straight-line Useful life prescribed in the
Land use right 50 years
amortization method Certificate of Land Use Right
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.
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, 2021
3.19 Long-term assets impairment
Long-term equity investment, investment real estate measured by cost model, fixed assets,
construction projects in progress, right of use assets, intangible assets with limited useful
life, oil and gas assets and other long-term assets, if there are signs of impairment on the
balance sheet date, carry out impairment tests. If the impairment test results show that the
recoverable amount of the asset is lower than its book value, the impairment provision shall
be made according to its difference and included in the impairment loss. The recoverable
amount is the higher between the fair value of the asset minus the disposal cost and the
present value of the expected future cash flow of the asset. The asset impairment provision
is calculated and confirmed on the basis of a single asset. If it is difficult to estimate the
recoverable amount of a single asset, the recoverable amount of the asset group is
determined by the asset group to which the asset belongs. The asset group is the smallest
portfolio that can independently generate cash inflows.
For the goodwill formed by the merger of the enterprise, the intangible assets with uncertain
service life, and the intangible assets that have not reached the usable state, whether or not
there are signs of impairment, at least at the end of each year, the impairment test is carried
out.
The Company conducts a goodwill impairment test, and the carrying value of the goodwill
formed by the business merger shall be allocated to the relevant asset groups in a reasonable
manner from the date of purchase; If it is difficult to apportion to the relevant asset group, it
shall be apportioned to the relevant asset group combination. The relevant asset group or
combination of asset groups is the asset group or combination of asset groups that can
benefit from the synergies of the enterprise merger.
Goodwill in the relevant asset groups or combination of group assets impairment tests, such
as the asset group or combination of group assets related to goodwill there are signs of
impairment, first, impairment tests are carried out on the asset group or combination of
asset groups that do not contain goodwill, calculation of recoverable amount, and compared
with the related book value, confirm the corresponding impairment loss. And goodwill of
the asset group or combination of group assets impairment test, comparing its book value
and recoverable amount, such as the recoverable amount is lower than the book value, the
amount of impairment loss first deduction allocation to the asset group or combination of
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, 2021
group assets in the book value of the goodwill, according to the asset group or combination
of group assets all assets except goodwill in the book value of the proportion, the book
value of the assets in proportion to offset each other. Once the above assets impairment loss
is recognized, it will not be carried back in future accounting periods.
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, Decoration and renovation of Building A 5 years
B Building Renovation Project 5 years
Landscape reconstruction 5 years
Staff quarters renovation 5 years
Villa renovation 5 years
Swimming pool renovation, Pavement modification projects 5 years
Roof waterproofing projects 5 years
3.21 Contractual liabilities
The Company lists contract assets or contractual liabilities in the balance sheet according to
the relationship between performance obligations and customer payments. The Company s ’
obligations to transfer goods or provide services to customers that have received or
receivable customer consideration are listed as contractual liabilities. Contract assets and
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, 2021
contractual liabilities under the same contract are shown in net terms.
3.22 Employee compensation
3.22.1 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.
The employee welfare expenses incurred by the Company shall be recorded into
the current profit or loss or related asset cost according to the actual amount
incurred at the time of actual occurrence, in which the non-monetary benefits shall
be measured at fair value.
3.22.2 Dismissal welfare
(1) Defined contribution plans
The Company shall pay the basic endowment insurance and unemployment
insurance for its employees in accordance with the relevant regulations of the local
government. During the accounting period in which the employees provide
services to the Company, the amount to be paid shall be calculated on the basis and
proportion of the local regulations, and be recognized as liabilities, and included in
the current profit or loss or related asset costs. In addition, the Company also
participated in the enterprise annuity plan / supplementary pension insurance fund
approved by the relevant state departments. The Company pays to the annuity plan
/ local social insurance institution according to a certain proportion of the total
Notes to the Financial Statements Page 49
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
salary of the staff and workers, and the corresponding expenses are included in the
current profit or loss or the related asset cost.
(2) Defined benefit plans
According to the formula determined by the law of expected accumulative welfare
units, the company will attribute the welfare obligations generated by the
established benefit plan to the period during which the employee provides services,
and record them into the current profit or loss or the cost of related assets.
The deficit or surplus resulting from the present value of the defined benefit plan
obligations minus the fair value of the defined benefit plan assets is recognized as
the net liability or net asset of a defined benefit plan. If there is a surplus in the
defined benefit plan, the company shall measure the net assets of the defined
benefit plan by the lower of the surplus and the asset ceiling.
All defined benefit plan obligations, including those expected to be paid within 12
months of the end of the employee's annual reporting period for the provision of
services, are discounted by the market rate of return on Treasury bonds or
high-quality corporate bonds in the active market that matches the duration and
currency of the defined benefit plan obligations on the balance sheet date.
The service costs incurred by the defined benefit plan and the net interest on the net
liabilities or net assets of the defined benefit plan are recorded in the current profits
and losses or the costs of related assets. The changes caused by the net liabilities or
net assets of the defined benefit plan shall be accounted for in other comprehensive
income, and shall not be transferred back to the profits and losses in the subsequent
accounting period. Upon the termination of the original defined benefit plan, all the
parts previously accounted for in other comprehensive income shall be carried
forward to the undistributed profit within the scope of equity.
When establishing the settlement of the benefit plan, the difference between the
present value of the obligation of the established benefit plan and the settlement
Notes to the Financial Statements Page 50
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
price determined on the settlement date shall be used to confirm the settlement
gains or losses.
3.22.3 Post-employment benefits
If the Company provides dismissal benefits to employees, the employee's salary
liabilities arising from the dismissal benefits shall be recognized as early as
possible in either of the following two categories, and shall be included in the
profits and losses of the current period: when the Company cannot unilaterally
withdraw the dismissal benefits provided by the termination of the labor relations
plan or the reduction proposal; when the company recognizes the costs or expenses
associated with the reorganization involving the payment of dismissal benefits.
3.23 Estimated liabilities
3.23.1 Recognition criteria for expected liabilities
When the obligations related to litigation, debt guarantee, loss contract,
reorganization and other contingencies meet the following conditions at the same
time, the company shall recognize them as estimated liabilities:
(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.
3.23.2 Measurement methods of various estimated liabilities
The estimated liabilities of the Company are initially measured according to the
best estimate of the expenditure required to perform relevant current obligations.
When determining the best estimate, the Company comprehensively considers the
risks, uncertainties, time value of money and other factors related to contingencies.
If the time value of money has a significant impact, the best estimate is determined
by discounting the relevant future cash outflow.
If there is a continuous range of required expenditure and the possibility of various
results within this range is the same, the best estimate shall be determined
Notes to the Financial Statements Page 51
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
according to the middle value within this range; In other cases, the best estimate
shall be treated as follows:
if the contingency involves a single item, it shall be determined according to the
most likely amount.
if the contingency involves multiple projects, it shall be determined according to
various possible results and relevant probability calculation.
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.
The Company reviews the book value of the estimated liabilities on the balance
sheet date, and if there is conclusive evidence that the book value cannot reflect the
current best estimate, the book value shall be adjusted according to the current best
estimate.
3.24 Revenue
3.24.1 Accounting policies used for revenue recognition and measurement
The Company has fulfilled its performance obligation in the contract, that is, to
recognize revenue when the customer acquires control of the relevant goods or
services. Access to control of related goods or services means that it can dominate
the use of the goods or services and obtain almost all the economic benefits from
them.
If the contract contains two or more performance obligations, the Company shall,
on the commencement date of the contract, apportion the transaction price to each
individual performance obligation in accordance with the relative proportion of the
individual selling price of the goods or services promised by each individual
performance obligation. The Company measures its income according to the
transaction price apportioned to each individual performance obligation.
Transaction price refers to the amount of consideration that the company is
expected to be entitled to receive for the transfer of goods or services to customers,
excluding the amount collected on behalf of third parties and the amount expected
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
to be returned to customers. The Company according to the terms of the contract,
combined with its previous practice to determine the transaction price, and in
determining the transaction price, consider the variable consideration, the major
financing components existing in the contract, non-cash consideration, payable
customer consideration and other factors. The Company shall determine the
transaction price containing variable consideration at a amount not exceeding the
amount of the cumulative recognized income most likely not to be significantly
reversed when the relevant uncertainty is eliminated. If there is a significant
financing component in the contract, the Company shall determine the transaction
price in accordance with the amount payable in cash upon the assumption that the
customer acquires control of the goods or services, the difference between the
transaction price and the contract consideration shall be amortized by the real
interest rate method during the contract period.
If one of the following conditions is met, the performance obligation shall be
fulfilled within a certain period of time; otherwise, the performance obligation
shall be fulfilled at a certain time:
The customer acquires and consumes the economic benefits of the Company's
performance at the same time.
The customer can control the goods under construction during the performance
of the Company.
The goods produced in the course of the Company's performance have
irreplaceable uses, and the Company has the right to collect money for the
cumulative performance portion completed so far throughout the contract period.
For performance obligations performed within a certain period of time, the
Company shall recognize the income according to the performance schedule within
that period, except where the performance schedule cannot be reasonably
determined. The Company considers the nature of goods or services, using the
output method or input method to determine the progress of performance. When
the performance schedule cannot be reasonably determined, the cost that has been
incurred is expected to be compensated, and the company recognizes the income
according to the cost amount that has been incurred until the performance schedule
can be reasonably determined.
For performance obligations at a certain point, the Company recognizes revenue at
the time when the customer acquires control of the relevant goods or services. In
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, 2021
determining whether the customer has obtained control over the goods or services,
the Company considers the following signs:
The Company has a current payment right n respect of the goods or services,
that is, the customer has the current payment obligation for the goods or services.
The Company has transferred the legal ownership of the goods to the customer,
that is, the customer has the legal ownership of the goods.
The Company has transferred the goods to customers, that is, customers have
physical possession of the goods.
The Company has transferred the main risk and reward in the ownership of the
commodity to the customer, that is, the customer has obtained the main risk and
reward in the ownership of the commodity.
The customer has accepted the goods or services, etc.
3.24.2 Specific principles for revenue recognition
The revenue sources of hotel business include guest rooms, catering, commodity
sales, entertainment services, etc. The revenue from guest room, catering and
entertainment services is recognized at the end of the service. The revenue from the
sale of goods is recognized as revenue when the control of goods is transferred to
the customer, that is, when the goods are delivered to the customer and there is no
non-performing obligation affecting the customer's receipt, the revenue is
recognized.
3.25 Contract costs
Contract cost includes contract performance cost and contract acquisition cost.
If the costs incurred by the Company for the performance of the contract do not fall within
the scope of the relevant standards, such as inventory, fixed assets or intangible assets, it
shall be recognized as an asset as the contract performance cost when the following
conditions are met:
The cost is directly related to a current or expected contract.
This cost increases the company's future resources for performance obligations.
The cost is expected to be recovered.
If the incremental cost incurred by the Company in order to obtain the contract is expected
to be recovered, it shall be recognized as an asset as the contract acquisition cost.
Notes to the Financial Statements Page 54
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
The assets related to the contract cost shall be amortized on the same basis as the
recognition of the goods or services income related to the asset; however, if the
amortization period of the contract acquisition cost does not exceed one year, the Company
shall account for the profits and losses of the current period at the time of occurrence
If the book value of the assets related to the contract cost is higher than the difference
between the following two items, the Company shall make provision for the impairment of
the excess part and shall confirm the impairment loss of the assets:
1) The remaining consideration is expected to be obtained as a result of the transfer of
goods or services related to the asset;
2) Estimated costs to be incurred for the transfer of the relevant goods or services.
If the factors for impairment in the previous period change later and the above-mentioned
difference is higher than the book value of the asset, the company shall reverse the
impairment provision originally withdrawn and account for the profits and losses of the
current period. However, the book value of the transferred assets does not exceed the
carrying value of the asset on the reversal date if no provision for impairment is assumed.
3.26 Government Grants
3.26.1 Type
Government grants are non-reciprocal transfers of monetary or non-monetary assets
from the government to the Group, which are divided into asset related government
subsidies and income related government subsidies.
Government grants related to assets refer to the government grants obtained by the
Company for the purchase and construction or the formation of long-term assets in
other ways. Government grants related to income refer to government grants other than
those related to assets.
The Company divides government grants into income related specific standards as
follows:
If the subsidy object is not clearly specified in the government documents, the
judgment basis for the company to classify the government subsidy as asset related or
income related is as follows:
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, 2021
Disclosure requirements: disclose the specific criteria for distinguishing between assets
related government grants and income related government grants. If the government
document does not specify the subsidy object, it is also necessary to explain the
judgment basis for dividing the government subsidy into asset related or income
related.
3.26.2 Point of confirm
Government grants are recognized when the Company can meet the attached
conditions and receive them.
3.26.3 Accounting treatments
Government grants related to assets shall offset the book value of relevant assets or be
recognized as deferred income. If it is recognized as deferred income, it shall be
included in the current profit or loss by stages according to a reasonable and systematic
method within the service life of relevant assets (if it is related to the daily activities of
the company, it shall be included in other income; if it is not related to the daily
activities of the Company, it shall be included in non-operating income);
Government grants related to income, which are used to compensate the relevant costs,
expenses or losses of the Company in the future, are recognized as deferred income,
and are included in the current profit or loss (those related to the daily activities of the
company are included in other income; those unrelated to the daily activities of the
company are included in non-operating income) or offset the relevant costs, expenses
or losses during the period when the relevant costs, expenses or losses are recognized;
Those used to compensate the relevant costs, expenses or losses incurred by the
company shall be directly included in the current profits and losses (those related to the
daily activities of the company shall be included in other income; those unrelated to the
daily activities of the company shall be included in non-operating income) or offset the
relevant costs, expenses or losses.
The discount interest of policy preferential loans obtained by the Company shall be
subject to accounting treatment according to the following two situations:
(1) If the finance allocates the discount funds to the lending bank and the lending bank
Notes to the Financial Statements Page 56
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
provides loans to the company at the policy preferential interest rate, the company
takes the actually received loan amount as the entry value of the loan, and calculates
the relevant borrowing costs according to the loan principal and the policy preferential
interest rate.
(2) If the finance directly allocates the discount funds to the company, the company
will offset the relevant borrowing costs with the corresponding discount.
3.27 Deferred tax assets and deferred tax liabilities
Income tax includes current income tax and deferred income tax. In addition to the income
tax arising from the merger of the enterprise and the transactions or events directly included
in the owner's equity (including other comprehensive income), the company shall include
the current income tax and deferred income tax into the profits and losses of the current
period.
Deferred income tax assets and deferred income tax liabilities are recognized on the basis of
the difference (temporary difference) between the tax basis of assets and liabilities and their
book value.
For deductible temporary difference recognition deferred income tax assets, the amount of
taxable income that is likely to be obtained in future periods to offset deductible temporary
differences is limited. For deductible losses and tax credits that can be carried forward for
subsequent years, the corresponding deferred income tax assets are recognized to the extent
that the future taxable income that is likely to be used to offset deductible losses and tax
credits is obtained.
For taxable temporary differences, deferred income tax liabilities are recognized except in
special cases.
Special cases where deferred income tax assets or deferred income tax liabilities are not
recognized include:
Initial recognition of goodwill;
A transaction or event that is neither a merger of an enterprise nor an event that affects
the accounting profit or taxable income (or deductible loss) at the time of its occurrence.
The deferred income tax liability is recognized for taxable temporary differences related to
the investment of subsidiaries, associated enterprises and joint ventures unless the Company
can control the time when the temporary difference is reversed and the temporary difference
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
is likely not to be reversed in the foreseeable future. Deferred income tax assets are
recognized for deductible temporary differences related to the investment of subsidiaries,
associated enterprises and joint ventures when the temporary differences are likely to be
reversed in the foreseeable future and are likely to receive taxable income in the future to
offset deductible temporary differences.
On the balance sheet date, for deferred income tax assets and deferred income tax liabilities,
according to the provisions of the tax law, according to the expected recovery of related
assets or liquidation of related liabilities during the applicable tax rate measurement.
On the balance sheet date, the company reviews the book value of deferred income tax
assets. If the future period is likely to be unable to obtain sufficient taxable income to offset
the benefits of deferred income tax assets, the book value of deferred income tax assets is
written down. Where sufficient taxable income is likely to be obtained, the amount of the
write-down is reversed.
The current income tax assets and the current income tax liabilities are reported as net offset
when they have the statutory right to settle on a net basis and are intended to settle on a net
basis or to obtain assets and liabilities at the same time.
On the balance sheet date, deferred income tax assets and deferred income tax liabilities are
shown as net offsets when the following conditions are met:
The tax payer has the legal right to settle current income tax assets and current income
tax liabilities by net;
Deferred income tax assets and deferred income tax liabilities are related to the income
tax levied by the same tax collection and management department on the same tax payer or
to different tax payer, but in each future period of transfer of important deferred income tax
assets and liabilities, The tax payer intends to net settle current income tax assets and
liabilities or obtain assets and liabilities at the same time..
3.28 Lease
Accounting policy from January 1, 2021
A contract is lease if the lessor conveys the right to control the use of an identified asset to
lessee for a period of time in exchange for consideration.
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A
contract is, or contains, a lease if the contract conveys the right to control the use of an
identified asset for a period of time in exchange for consideration.
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, 2021
If the contract contains multiple separate leases at the same time, the Company will divide
the contract and conduct accounting treatment for each separate lease. If the contract
contains both the leased part and the non-leased part, the lessee and the lessor shall divide
the leased part and the non-leased part.
The Company chooses to adopt a simplified method for all leases and does not evaluate
whether there is a lease change or re-evaluate the lease classification if rent reduction,
deferred payment and other rental concessions reached on existing lease contracts directly
caused by COVID-19 and the following conditions are met:
The lease consideration after the concession is reduced or basically unchanged
compared with that before the concession, where the lease consideration is not discounted
or discounted according to the discount rate before the concession;
The concession only applies to lease payments payable before June 30, 2022. An
increase in lease payments payable after June 30, 2022 does not affect the fulfillment of this
condition. A decrease in lease payments payable after June 30, 2022 does not satisfy this
condition;
Other terms and conditions of the lease are determined to be unchanged after a
comprehensive consideration of qualitative and quantitative factors.
3.28.1 The Company acts as the lessee
(1) Right-of-use assets
On the commencement date of the lease term, the Company recognizes a
right-of-use asset except for the short-term lease and the low-value asset lease. The
right-of-use asset is initially measured at cost. The cost includes:
The initial measurement amount of the lease liability;
The lease payment paid at or before the beginning of the lease period is
automatically deducted if there is a rental incentive;
Costing an initial direct cost to the company;
The company participates in the cost of dismantling and removing the leased
asset, restoring the leased asset to its site, or restoring the leased asset to the state
agreed on in the lease terms, excluding costs incurred for the production of
inventory.
The Company shall subsequently use the straight-line method to depreciate the
assets of the right-of-use asset. Where the ownership of the leased asset can be
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, 2021
reasonably determined at the end of the lease term, the Company shall calculate
depreciation during the remaining service life of the leased asset. Otherwise, the
leased asset shall be depreciated during the period during which the lease term is
shorter than the remaining useful life of the leased asset.
The Company determines whether the assets of the right-of-use asset have been
impaired in accordance with the principles stated in the note "3.19 Impairment of
Long-term Assets", and conducts accounting treatment for the recognized
impairment losses.
(2) Lease liabilities
On the commencement date of the lease term, the Company recognizes lease
liabilities for leases other than short-term leases and leases of low-value
assets. Lease liabilities are initially measured at the present value of outstanding
lease payments. Lease payments include:
Buy a fixed payment (including substantial fixed payment). If there is a lease
incentive, the amount related to lease incentive is deducted.
A variable rental payment, depending on an index or ratio;
Lending a payment that is expected to be paid based on the guaranteed residual
provided by the company;
Buy a deal the exercise price of an option, if the company is reasonably certain
that it will exercise the option;
A party pays to exercise a termination option if the lease term reflects that the
company will exercise the termination option.
The Company uses the lease embedded interest rate as the discount rate, but if the
lease embedded interest rate cannot be reasonably determined, the Company's
incremental borrowing rate is used as the discount rate.
The company calculates the interest expense of the leased debt in each period of
the lease term according to the fixed periodic interest rate, and records it into the
profit or loss of the current period or the cost of related assets.
Variable lease payments not included in the measurement of lease liabilities are
included in current profit or loss or the cost of related assets when actually
incurred.
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, 2021
After the beginning of the lease term, if any of the following circumstances occur,
the Company shall re-measure the lease liabilities and adjust the corresponding
use-right assets. If the book value of the use-right assets has been reduced to zero,
but the lease liabilities still need to be further reduced, the balance shall be
recorded into the current profit or loss:
In the event of a change in the evaluation of the purchase option, renewal option
or termination option, or if the actual exercise of the aforementioned option is
inconsistent with the original evaluation, the Company recalculates the lease
liability at the present value of the modified lease payment and the revised
discount rate;
In the event of a change in the substantial fixed payment amount, a change in the
estimated amount payable in the guarantee residual value or a change in the index
or ratio used to determine the lease payment amount, the Company recalculates
the lease liability according to the present value calculated from the changed lease
payment amount and the original discount rate. However, changes in lease
payments are due to changes in floating interest rates and present value is
calculated using the revised discount rate.
(3) Short-term lease and lease of low-value assets
The Company chooses not to recognize the right to use assets and lease liabilities
for short-term leasing and low-value asset leasing, and records the relevant lease
payments into current profits and losses or related asset costs in each period of the
lease term according to the straight-line method. A short-term lease is a lease for a
period of not more than 12 months and does not include a purchase option on the
commencement date of the lease. Low-value asset lease refers to the lease with a
lower value when a single leased asset is a brand-new asset. Where a company
subleases or intends to sublease the leased asset, the original lease is not a
low-value asset lease.
(4) Lease change
If the lease changes and the following conditions are met, the company will treat
the lease change as a separate lease for accounting treatment:
Buying a lease change expands the scope of the lease by adding access to one or
more leased assets;
The added consideration costs the same amount as the single price of the
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, 2021
extended part of the lease, adjusted for the circumstances of the contract.
If the lease change is not accounted for as a separate lease, on the effective date of
the lease change, the Company shall re-apportion the consideration of the contract
after the change, re-determine the lease term, and re-measure the lease liability
according to the present value calculated from the lease payment after the change
and the revised discount rate.
If the lease change results in the narrowing of the lease scope or shortening of the
lease term, the Company shall correspondingly reduce the book value of the right
to use assets and record the profits or losses related to the partial or complete
termination of the lease into the current profit or loss. If other lease changes result
in the re-measurement of lease liabilities, the company shall adjust the book value
of the right to use assets accordingly.
(5) Rent concessions related to COVID-19
The Company does not evaluate whether there is a lease change or not for those
who adopt the reduction method of COVID-19-related rent concessions. The
company will continue to calculate the interest expense of the lease liability and
include it in the current profit or loss at the discount rate consistent with that
before the concession, and continue to depreciate the right to use assets in
accordance with the method consistent with that before the concession. In case of
rent reduction, the Company will regard the reduced rent as the variable lease
payment amount. When the original rent payment obligation is relieved by a
concession agreement, the company will reduce the cost or expense of relevant
assets according to the amount of the undiscounted or discounted rate before the
concession, and adjust the lease liability accordingly. In case of delayed payment
of rent, the company shall write off the leasing liabilities confirmed at the earlier
stage when actually paying the rent.
For short-term leases and leases of low-value assets, the Company continues to
include the original contract rent in the cost or expense of the related assets in the
same manner as before the concession. If rent reduction occurs, the Company will
treat the reduced rent as variable lease payment, and write down the cost or
expense of related assets during the reduction period. If the payment of rent is
delayed, the Company shall recognize the rent payable as payables during the
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, 2021
original payment period and deduct the confirmed payables in the earlier period
when the actual payment is made.
3.28.2 The Company acts as the lessor
On the lease commencement date, the Company divides the lease into finance lease
and operating lease. Finance lease refers to a lease in which virtually all risks and
rewards related to the ownership of the leased asset are transferred regardless of
whether the ownership is eventually transferred. The term "operating lease" refers
to leases other than financial leases. When the company acts as a sublessee, it
classifies subleases based on the use-right assets generated from the original lease.
(1) Operating lease accounting treatment
The rental income of operating lease shall be recognized as rental income in
accordance with the straight-line method during each period of the lease
term. The Company capitalizes the initial direct expenses incurred in connection
with the operating lease and apportion them into the current profit or loss during
the lease term on the same basis as rental income recognition. Variable lease
payments not included in lease receipts are included in current profit or loss when
actually incurred. If an operating lease is changed, the company will treat it as a
new lease for accounting treatment from the effective date of the change, and the
amount of lease receipts received in advance or receivable related to the lease
before the change will be regarded as the amount of new lease receipts.
(2) Financial lease accounting treatment
On the lease commencement date, the Company recognizes the finance lease
receivables and terminates the recognition of finance lease assets. When the
Company makes initial measurement of the financial lease receivables, the net
lease investment will be recorded as the value of the financial lease
receivables. The net lease investment is the sum of the unsecured residual value
and the present value of the lease receipts not yet received at the commencement
date of the lease term, discounted at the lease embedded interest rate.
The company calculates and recognizes the interest income for each period of the
lease term based on a fixed periodic interest rate. The recognition of termination
and impairment of the receivable finance lease shall be accounted for in
accordance with this note"3.10 financial instruments".
Variable lease payments not included in the net lease investment measurement are
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, 2021
included in the current profit or loss when actually incurred.
If the finance lease changes and simultaneously meets the following conditions, the
Company will treat the change as a separate lease for accounting treatment:
The change expands the scope of the lease by adding the right to use one or more
of the leased assets;
The increased consideration is equivalent to the amount of the separate price for
the extended portion of the lease adjusted for the circumstances of the contract.
If the change of finance lease is not accounted for as a separate lease, the Company
will deal with the changed lease under the following circumstances:
If the change takes effect on the commencement date of the lease, the lease will
be classified as an operating lease, and the Company will treat it as a new lease
from the effective date of the lease change, and take the net lease investment
before the effective date of the lease change as the carrying value of the leased
asset;
If the change is effective on the commencement date of the lease, the lease would
be classified as a finance lease, the accounting treatment of the Company is in
accordance with the policy of modifying or renegotiating the contract in this note
“3.10 Financial Instruments”.
(3) Rent concessions related to COVID-19
The Company continues to recognize the original contract rent as rental income in
the same manner as before the concession in respect of operating leases that adopt
the SIMPLIFIED method of COVID-19-related rent concession; If rent reduction
occurs, the company will treat the reduced rent as variable lease payment and
deduct the lease income during the reduction period. In case of delayed collection
of rent, the company shall recognize the rent payable as receivable during the
original collection period and deduct the receivable confirmed in the earlier
period when it is actually received.
The Company continues to calculate interest and recognize lease income at the
same discount rate as before the concession for financial leases that use the
COVID-19 related rent concession simplification method. If rent reduction occurs,
the Company will regard the reduced rent as the variable lease payment amount.
When the company waives the right to collect original rent after reaching a
Notes to the Financial Statements Page 64
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
concession agreement, the company will deduct the original lease income
according to the amount of the undiscounted or discounted forward discount rate,
and the insufficient part will be included in the investment income. Meanwhile,
the receivable finance lease will be adjusted accordingly. In case of delayed
collection of rent, the company shall deduct the finance lease receivable
confirmed in the earlier period when it actually receives the rent.
Accounting policies prior to January 1, 2021
Lease is divided into financing lease and operating lease. Finance lease refers to the lease that
essentially transfers all risks and rewards related to the ownership of assets. Operating lease
refers to lease other than finance lease.
The Company chooses to adopt a simplified method for all leases and does not evaluate
whether there is a lease change or re-evaluate the lease classification if rent reduction, deferred
payment and other rental concessions reached on existing lease contracts directly caused by
COVID-19 and the following conditions are met:
The lease consideration after the concession is reduced or basically unchanged compared
with that before the concession, where the lease consideration is not discounted or
discounted according to the discount rate before the concession;
The concession applies only to lease payments payable before June 30, 2021. An increase in
lease payments payable after June 30, 2021 does not affect the satisfaction of this condition.
A decrease in lease payments payable after June 30, 2021 does not satisfy this
condition; other terms and conditions of the lease are determined to be unchanged after a
comprehensive consideration of qualitative and quantitative factors.
3.28.1 Accounting treatment of operating lease
(1) 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.
The Company continues to include original contract rents in the cost or expense of the
Notes to the Financial Statements Page 65
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
related assets in the same manner as before the concession for operating leases that
use the simplified method of COVID-19-related rent concessions. If rent
reduction occurs, the company will treat the reduced rent as contingent rent and
record it into profit or loss during the reduction period. If the payment of rent is
delayed, the Company shall recognize the rent payable as payables during the
original payment period and deduct the confirmed payables in the earlier period
when the actual payment is made.
(2) 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.
The Company continues to recognize the original contract rent as lease income in
accordance with the same method as before the concession for operating leases that adopt the
simplified method of COVID-19-related rent concession; If rent reduction occurs, the company will
treat the reduced rent as contingent rent and deduct the rental income during the reduction period. In
case of delayed collection of rent, the company shall recognize the rent payable as receivable during
the original collection period and deduct the receivable confirmed in the earlier period when it is
actually received.
3.28.2 Accounting treatment of finance lease
(1) Financial leased assets: on the start date of leasing, the Company takes the lower of the fair value
of the leased assets and the present value of the minimum lease payment as the book value of the
leased assets, takes the minimum lease payment as the book value of the long-term
payable, and the difference as the unrecognized financing expenses. The Company
adopts the effective interest rate method to amortize the unrecognized financing
Notes to the Financial Statements Page 66
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
expenses during the lease period and record them into financial expenses. The
initial direct expenses incurred by the Company shall be included in the value of
the leased assets.
For finance leases that use a simplified method of COVID-19-related rent
concession, the Company continues to recognize the unrecognized financing cost
as the current financing charge according to the discount rate before the concession,
and continues to depreciate the leased assets in accordance with the method before
concession. For rent reduction or exemption, the Company will treat the reduced
rent as contingent rent, and record it into the current profit or loss and adjust the
long-term payables accordingly when the original rent payment obligation is
discharged through a concession agreement, or included in the current profit or loss
according to the discount rate before concession, and adjust the unrecognized
financing expenses; If the payment of rent is delayed, the Company shall offset the
long-term accounts payable recognized in the previous period at the time of actual
payment.
(2) Financial leasing assets: the Company shall, at the beginning of the lease,
recognize the difference between the sum of the receivable financial leasing
payments, the unsecured residual value and its present value as unrealized
financing income, which shall be recognized as lease income within the period of
receiving the rent in the future. The initial direct expenses incurred by the company
in connection with the lease transaction shall be included in the initial
measurement of the finance lease receivable and shall reduce the amount of income
recognized during the lease term.
The Company continues to recognize unrealized financing gains as lease income at
the lease embedded rate consistent with prior to the concession for finance leases
that employ the COVID-19 related rent concession simplification method. Of rent
reduction, the company will rent reduction as or have the rent, in the concession
agreement when give up the right of the original rental charge, write down the
original confirmation of rental income, lack of write-downs part included in
investment income, at the same time adjust long-term receivables, or according to
the concession of former discount rate discount recorded into the profits and losses
of the current and adjust the unrealized financing income. In case of delayed
Notes to the Financial Statements Page 67
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
collection of rent, the company shall deduct the long-term receivables confirmed in
the earlier period when it actually receives the rent.
3.29 Termination of business
Termination of business is a separately identifiable component that meets one of the
following conditions and has been disposed of by the Company or placed by the Company
as a holding for sale:
(1) The component represents a separate principal business or a separate principal area of
business.
(2) The component is part of a related plan to dispose of a separate principal business or a
separate principal area of business.
(3) The component is a subsidiary acquired exclusively for resale.
The profit or loss from continuing operation and the profit or loss from discontinuing
operation are separately presented in the profit statement. Operating gains and losses, such
as impairment loss and reversal amount, and disposal gains and losses of terminated
operations are reported as profit or losses of terminated operations. For the termination of
operation reported in the current period, the Company will present the information
originally presented as profit or loss from continuing operation as profit or loss from
termination of operation for the comparable accounting period in the current financial
statements.
3.30 Changes in significant accounting policies and accounting estimates
3.30.1 Changes in accounting policies
(1) Implementation of accounting Standards for Business Enterprises No. 21 - Leasing (revised
in 2018)
In 2018, the Ministry of Finance revised the Accounting Standards for Business Enterprises No.
21 - Leases (referred to as the "New Lease Standards"). The company will implement the new
lease guidelines on January 1, 2021. Under the revised criteria, the Company elects not to
reassess whether a contract is a lease or includes a lease on the first performance date of a
contract that has existed prior to the first performance date.
The company acts as the lessee
The Company elects to adjust the amount of retained earnings and other relevant items in
the financial statements at the beginning of the year of the first implementation of the new
Notes to the Financial Statements Page 68
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
lease rule based on the cumulative impact of the first implementation of the new lease rule
without adjusting the comparable period information.
For operating leases that exist prior to the first execution, the Company on the first
execution date measures the lease liabilities at the present value discounted at the
incremental borrowing rate of the Japan Company based on the remaining lease payments
and chooses one of the following two methods to measure the use-right assets for each
lease:
- Assuming that the book value of the new lease criteria is applied from the commencement
date of the lease term, the company's incremental borrowing rate on the first
implementation date is used as the discount rate.
- An amount equal to the lease liability, adjusted as necessary for the prepaid rent.
For operating leases prior to the first execution date, the Company shall, in conjunction
with the application of the above method, choose one or more of the following simplified
treatments for each lease:
1) Leases completed within 12 months after the first execution will be treated as short-term
leases;
2) When measuring lease liabilities, leases with similar characteristics adopt the same
discount rate;
3) The measurement of the right to use assets does not include the initial direct expenses;
4) If there is a renewal option or termination option, the lease term shall be determined
according to the actual exercise of the option prior to the first exercise date and other latest
circumstances;
5) As an alternative to the impairment test of the right to use assets, evaluate whether the
contract including the lease is a loss contract prior to the first execution date in accordance
with "3.23 Estimated Liabilities" in this note, and adjust the right to use assets according to
the amount of loss provisions recorded in the balance sheet prior to the first execution date;
6) Lease changes occurring before the first implementation date will not be retroactively
adjusted. Accounting treatment will be conducted according to the final arrangement of
lease changes and the new lease standards.
In measuring lease liabilities, the Company uses the lessee's incremental borrowing rate as
of January 1, 2021 to discount lease payments.
For the existing financial leases before the first execution date, the Company measures the
right to use assets and lease liabilities respectively according to the original book value of
the financial lease in assets and the financial lease payable on the first execution date.
Notes to the Financial Statements Page 69
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
The company acts as the lessor
For subleases classified as operating leases prior to the first execution date and still existing
after the first execution date, the Company will re-evaluate them on the first execution date
based on the remaining contract terms and terms of the original leases and subleases and
classify them in accordance with the provisions of the new lease criteria. If it is reclassified
as a finance lease, the company will treat it as a new finance lease.
Except for subleases, the Company does not need to adjust its leases as lessors in
accordance with the new lease criteria. The company will conduct accounting treatment in
accordance with the new lease standard since the first implementation date.
The implementation of the above new leasing standards has not had a significant impact on
the company's financial position and operating results.
(2) Implementation of interpretation of Accounting Standards for Business Enterprises No.
14
The Ministry of Finance issued interpretation of Accounting Standards for Business
Enterprises No. 14 (Accounting [2021] No. 1, hereinafter referred to as "Interpretation No.
14") on February 2, 2021, effective as of the date of promulgation. The relevant businesses
newly added from January 1, 2021 to the implementation date shall be adjusted according
to Interpretation No. 14.
1 Government and social capital cooperation (PPP) project contract
Interpretation No. 14 is applicable to PPP project contracts that meet the "dual
characteristics" and "dual control" described in the interpretation at the same time. For
relevant PPP project contracts that are implemented before December 31, 2020 and have
not been completed by the implementation date, retrospective adjustment shall be made. If
retrospective adjustment is not feasible, it shall be applied from the beginning of the earliest
period of retrospective adjustment, and the cumulative impact shall be adjusted to the
retained earnings at the beginning of the year on the implementation date and other relevant
items in the financial statements, the information of comparable periods shall not be
adjusted. The implementation of this provision has not had a significant impact on the
financial status and operating results of the company.
② Benchmark interest rate reform
Interpretation No. 14 has made simplified accounting treatment provisions for the change of
the determination basis of cash flows related to financial instrument contracts and lease
Notes to the Financial Statements Page 70
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
contracts due to the reform of benchmark interest rates.
According to the interpretation, the businesses related to the benchmark interest rate reform
before December 31, 2020 shall be retroactively adjusted, except that the retroactive
adjustment is not feasible, and there is no need to adjust the data of the previous
comparative financial statements. On the implementation date of the interpretation, the
difference between the original book value and the new book value of financial assets and
financial liabilities shall be included in the opening retained earnings or other
comprehensive income of the annual reporting period on the implementation date of the
interpretation. The implementation of this provision has not had a significant impact on the
financial status and operating results of the Company.
(3) Implement the Notice on Adjusting the Scope of Application of the Provisions on
Accounting Treatment of Rent Concessions Related to the COVID-19
On June 19, 2020, the Ministry of Finance issued the Regulations on Accounting Treatment
of Rent Concessions Related to the COVID-19 (Caikuai [2020] No. 10). For rent
concessions directly caused by the COVID-19 that meet the conditions, enterprises can
choose to adopt simplified methods for accounting treatment.
On May 26, 2021, the Ministry of Finance issued the Notice on Adjusting the Scope of
Application of the Provisions on Accounting Treatment of Rent Concessions Related to the
COVID-19 (Caikuai [2021] No. 9), which will come into force on May 26, 2021, The scope
of application of the rent reduction related to the COVID-19, which is allowed to adopt the
simplified method in the provisions on accounting treatment of rent reduction related to the
COVID-19 epidemic, is adjusted from "the reduction is only for the lease payments payable
before June 30, 2021" to "the reduction is only for the lease payments payable before June
30, 2022", and other applicable conditions remain unchanged.
The Company has adopted the simplified method for accounting treatment of all lease
contracts that meet the conditions before the adjustment of the scope of application, and
also adopted the simplified method for accounting treatment of similar lease contracts that
meet the conditions after the adjustment of the scope of application, and retroactively
adjusted the relevant lease contracts that have adopted the accounting treatment of lease
change before the issuance of the notice, but did not adjust the data of the comparative
Notes to the Financial Statements Page 71
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
financial statements in the previous period; The relevant rent concessions that have not been
accounted for in accordance with the provisions of the notice between January 1, 2021 and
the implementation date of the notice shall be adjusted according to the notice.
The implementation of this provision has not had a significant impact on the financial status
and operating results of the company.
3.30.2 Changes in accounting estimates
There was no change in the principal accounting estimates of the Company during
the reporting period.
4. Taxation
4.1 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 5% 6% 9%
、 、 、
Value added tax (VAT)
VAT payable or taxable sales revenue shall be the difference 13%
after deducting the input VAT deductible in the current period
Urban maintenance and
Levied based on VAT payable 7%
construction tax
Education surtax Levied based on VAT payable 3%
Local education surcharge Levied based on VAT payable 2%
Remaining value after deducting 30% from the original value
House property tax of the house (including the occupied land price), and rent 1.2%, 12%
revenue
Land use tax Land area RMB 18 / m2
Corporate income tax Levied based on the taxable income 25% 20%
、
If there are different tax payers of enterprise income tax rate, the disclosure statement
Notes to the Financial Statements Page 72
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Company Name Enterprise Income Tax Rate
Hainan Dadonghai Tourism Centre Holdings Co., Ltd. 25%
Hainan Wengao Tourism Resources Development Co. LTD 20%
4.2 Tax preference
4.2.1 According to the announcement of the Ministry of Finance and the State Administration
of Taxation No. 7 of 2021 on the continuation of the preferential tax policies for
responding to the epidemic, the income from hotel accommodation and catering
services provided by the company is exempted from value-added tax, and the
preferential tax policies will be implemented until March 31, 2021.
4.2.2 According to the announcement of the Ministry of Finance and the State Administration
of Taxation No. 87 of 2019 on clarifying the policy of value-added tax addition and
deduction in the life service industry, taxpayers in the life service industry are allowed
to add 15% of the current deductible input tax to offset the tax payable from October 1,
2019 to December 31, 2021.
4.2.3 According to the Notice on Implementing the Preferential Tax Reduction Policy for
Small and Micro-sized Enterprises (Caishui [2019] No.13) issued by the Ministry of
Finance and the State Administration of Taxation, the property tax and urban land use
tax of the Company shall be halved in 2021. The subsidiary of the Company, Wengao
Tourism, is a small and low-profit enterprise, enjoying the preferential income tax
policy of reducing the taxable income amount by 25% and paying the enterprise
income tax at the tax rate of 20%.
5. Notes to the main items of the financial statements
5.1 Monetary funds
Balance as at December 31, Balance as at December 31,
Item
2021 2020
Cash on hand 210,798.68 179,111.10
Bank deposits 4,473,902.21 2,745,348.65
Notes to the Financial Statements Page 73
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Balance as at December 31, Balance as at December 31,
Item
2021 2020
Total 4,684,700.89 2,924,459.75
Total amount of money deposited abroad
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 Accounts receivable
5.2.1 Accounts receivable shall be disclosed according to the age of accounts
Balance as at December 31, Balance as at December
Aging
2021 31, 2020
Within 1 year 269,894.53 479,847.53
1 year to 2 years 7,461.89 19,092.00
2 years to 3 years 19,092.00 2,259.00
3 years to 4 years 2,259.00 566.00
4 years to 5 years 120.00 785.00
Above 5 years 90,243.80 89,458.80
Sub-total 389,071.22 592,008.33
Less: bad-debt provision 102,002.93 162,705.01
Total 287,068.29 429,303.32
Notes to the Financial Statements Page 74
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
5.2.2 Accounts receivable shall be classified and disclosed according to the expected credit loss method
Balance as at December 31, 2021 Balance as at December 31, 2020
Book balance Provision for bad debts Book balance Provision for bad debts
Proportion Proportion
Category
Proportion of Book value Proportion of Book value
Amount Amount Amount Amount
(%) provision (%) provision
(%) (%)
Estimate credit losses
on an individual basis
Estimated credit losses
389,071.22 100.00 102,002.93 26.22 287,068.29 592,008.33 100.00 162,705.01 27.48 429,303.32
on a portfolio basis
Total 389,071.22 100.00 102,002.93 287,068.29 592,008.33 100.00 162,705.01 429,303.32
Notes to the Financial Statements Page 75
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Notes to the Financial Statements Page 76
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Provision for bad debts by portfolio:
In portfolio, accounts receivable with the provision for bad debts made by the aging analysis method:
Balance as at December 31, 2021
Aging Proportion of provision
Accounts receivable Provision for bad debts
(%)
Within 1 year 269,894.53 4,395.18 1.63
1-2 years 7,461.89 1,876.02 25.14
2-3 years 19,092.00 4,799.99 25.14
3-4 years 2,259.00 567.94 25.14
4-5 years 120.00 120.00 100.00
Over 5 years 90,243.80 90,243.80 100.00
Total 389,071.22 102,002.93
5.2.3 Provision, reversal or recovery of provision for bad debts in 2021
Balance as at Changes in 2021 Balance as at
Category December 31, December 31,
Provision Reverse Write off
2020 2021
Account receivables 162,705.01 -60,702.08 102,002.93
Total 162,705.01 -60,702.08 102,002.93
5.2.4 Top five accounts receivable in terms of their balance as at December 31,
2021 collected by the debtor
Balance as at December 31, 2021
Name of entity Accounts Proportion in the total Provision for
receivable accounts receivable (%) bad debts
Shanghai Hecheng International Agency
159,477.11 40.99 2,597.08
Service Co., Ltd.
Guangzhou Design Institute 38,980.00 10.02 38,980.00
Yangpu Huayu Road & bridge Technology Co.,
18,633.00 4.79 18,633.00
Ltd.
Haikou XinDeCheng Construction and
14,300.00 3.68 232.87
Installation Engineering Co., Ltd.
Notes to the Financial Statements Page 77
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Balance as at December 31, 2021
Name of entity Accounts Proportion in the total Provision for
receivable accounts receivable (%) bad debts
China International Travel Service Limited,
13,540.20 3.48 13,540.20
Head Office
Total 244,930.31 62.96 73,983.15
5.3 Other receivables
Balance as at December 31,
Item Balance as at December 31, 2021
2020
Interest receivable
Dividends receivable
Other receivables 504,530.57 432,560.55
Total 504,530.57 432,560.55
5.3.1 Other receivables
(1) Other receivables disclosed by aging analysis:
Balance as at December 31,
Aging Balance as at December 31, 2021
2020
Within 1 year 352,074.52 444,074.24
1 year to 2 years 174,594.55 26,836.90
2 years to 3 years 20,000.00
3 years to 4 years
4 years to 5 years
Above 5 years 2,236.00 2,236.00
Sub-total 548,905.07 473,147.14
Less: bad-debt provision 44,374.50 40,586.59
Total 504,530.57 432,560.55
Notes to the Financial Statements Page 78
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Notes to the Financial Statements Page 79
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
(2) Disclosure is classified according to the expected credit loss method:
Balance as at December 31, 2021 Balance as at December 31, 2020
Book balance Provision for bad debts Book balance Provision for bad debts
Proportion Proportion
Category
Proportion of Book value Proportion of Book value
Amount Amount Amount Amount
(%) provision (%) provision
(%) (%)
Estimate credit losses on an
individual basis
Estimated credit losses on a
548,905.07 100.00 44,374.50 8.08 504,530.57 473,147.14 100.00 40,586.59 8.58 432,560.55
portfolio basis
Total 548,905.07 100.00 44,374.50 504,530.57 473,147.14 100.00 40,586.59 432,560.55
Notes to the Financial Statements Page 80
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Notes to the Financial Statements Page 81
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Provision for bad debts by portfolio
Balance as at December 31, 2021
Name Proportion of
Other receivables Provision for bad debts
provision (%)
Deposits and petty cash receivables
239,969.08 11,998.46 5.00
portfolio
Advance payment receivables
180,885.17 25,973.50 14.36
portfolio
Other receivables portfolio 128,050.82 6,402.54 5.00
Total 548,905.07 44,374.50
）））） （（（（
3 stbed dab rof noisivorP
First stage Second stage Third stage
Expected credit
Expected credit loss for the whole
Expected credit
Provision for bad debts loss for the whole duration (credit Total
loss in next 12
duration (no credit impairment has
months
impairment) occurred)
Balance as at December 31.
22,766.34 17,820.25 40,586.59
2020
Balance as at December 31.
22,766.34 17,820.25 40,586.59
2020 in current period
--Transfer in second stage
--Transfer in third stage
--Reverse to second stage
--Reverse to first stage
Provision in current period 3,787.91 3,787.91
Reverse in current period
Sell-off in current period
Notes to the Financial Statements Page 82
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
First stage Second stage Third stage
Expected credit
Expected credit loss for the whole
Expected credit
Provision for bad debts loss for the whole duration (credit Total
loss in next 12
duration (no credit impairment has
months
impairment) occurred)
Write-off in current period
Other changes
Balance as at December 31.
26,554.25 17,820.25 44,374.50
2021
Other receivables account balance changes as follows:
First stage Second stage Third stage
Expected credit
loss for the
Expected credit
Expected credit whole duration
Book balance loss for the whole Total
loss in next 12 (credit
duration (no credit
months impairment has
impairment)
occurred)
Balance as at December
455,326.89 17,820.25 473,147.14
31. 2020
Balance as at December
455,326.89 17,820.25 473,147.14
31. 2020 in current period
--Transfer in second stage
--Transfer in third stage
--Reverse to second stage
--Reverse to first stage
Increase in current period 2,334,336.56 2,334,336.56
Notes to the Financial Statements Page 83
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
First stage Second stage Third stage
Expected credit
loss for the
Expected credit
Expected credit whole duration
Book balance loss for the whole Total
loss in next 12 (credit
duration (no credit
months impairment has
impairment)
occurred)
Directly write down in
2,258,578.63 2,258,578.63
current period
Derecognition in current
period
Other changes
Balance as at December
531,084.82 17,820.25 548,905.07
31. 2021
(4) Provision, reversal or recovery of provision for bad debts in 2021
Balance as at Changes in 2021 Balance as at
Category December 31, December 31,
Provision Reverse Write-off
2020 2021
Other receivables 40,586.59 3,787.91 44,374.50
Total 40,586.59 3,787.91 44,374.50
(5) Classification of other receivables by the nature of payment
Book balance as at Book balance as at
Nature of payment
December 31, 2021 December 31, 2020
Utility bills 176,435.17 189,577.27
Security deposits 156,500.00 156,500.00
Petty cash 87,319.08 56,812.68
Notes to the Financial Statements Page 84
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Book balance as at Book balance as at
Nature of payment
December 31, 2021 December 31, 2020
Individual social insurance and provident funds 64,050.82 59,657.19
Consulting service fee 60,000.00
Deposits 600.00 600.00
Elevator installation fee 10,000.00
Others 4,000.00
Total 548,905.07 473,147.14
(6) Top five other receivables in terms of their ending balance collected by the
debtor
Proportion in the Balance of
Balance as
total balance of provision for
Nature of at
Name of entity Aging other receivables bad debts as
payment December
as at December at December
31, 2021
31, 2021 (%) 31, 2021
Labor Security
Security
Supervision Detachment 156,500.00 1 to 2 years 28.51 7,825.00
deposits
of Sanya
Health center Utility bills 102,599.56 Within 1 year 18.69 5,129.98
Hainan Zhongzhida Consulting
60,000.00 Within 1 year 10.93 3,000.00
Technology Co., Ltd. service fee
Hut stores Utility bills 26,822.64 Within 1 year 4.89 1,341.13
Taian Chen Petty cash 20,000.00 Within 1 year 3.64 1,000.00
Total 365,922.20 66.66 18,296.11
5.4 Inventories
5.4.1 Classification of inventories
Item Balance as at December 31, 2021 Balance as at December 31, 2020
Notes to the Financial Statements Page 85
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Provision for
inventory
depreciation/
Provision for
Book Provision for
Book value Book balance inventory Book value
balance impairment of
depreciation
contract
performance
costs
Raw
457,566.55 308,493.17 149,073.38 551,974.20 310,260.94 241,713.26
materials
Commodity
22,771.38 11,102.41 11,668.97 1,754,063.48 11,102.41 1,742,961.07
stocks
Fuel 19,120.05 19,120.05 25,254.50 25,254.50
Total 499,457.98 319,595.58 179,862.40 2,331,292.18 321,363.35 2,009,928.83
5.4.2 Provision for inventory depreciation
Balance as at Increase in 2021 Decrease in 2021 Balance as at
Item December 31, Reversal or December 31,
Provision Others Others
2020 write-off 2021
Raw materials 310,260.94 1,767.77 308,493.17
Commodity
11,102.41 11,102.41
stocks
Total 321,363.35 1,767.77 319,595.58
5.5 Other current assets
Balance as at December 31, Balance as at December 31,
Item
2021 2020
Prepaid enterprise income tax 1,702,702.80 1,702,702.80
Input tax to be deducted 1,756,697.11 2,219,513.16
Prepaid for newspaper, insurance, etc. 90,562.43 52,719.06
Prepaid individual income tax 2,517.22
Total 3,549,962.34 3,977,452.24
Notes to the Financial Statements Page 86
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
5.6 Investment properties
5.6.1 Investment properties measured at cost
Buildings and
Item Land use rights Total
constructions
1. Original book value
(1) Balance as at December 31, 2020 18,856,504.44 5,662,740.59 24,519,245.03
(2) Increase in 2021
- Purchase
- Transfer from inventories/fixed
assets/construction in progress
- Increase from business combinations
(3) Decrease in 2021
- Disposal
(4) Ending balance 18,856,504.44 5,662,740.59 24,519,245.03
2. Accumulated depreciation and accumulated
amortization
(1) Balance as at December 31, 2020 11,443,950.66 2,332,406.45 13,776,357.11
(2) Increase in 2021 418,183.56 56,340.00 474,523.56
- Provision or amortization 418,183.56 56,340.00 474,523.56
(3) Decrease in 2021
- Disposal
(4) Ending balance 11,862,134.22 2,388,746.45 14,250,880.67
3. Provision for impairment
(1) Balance as at December 31, 2020 1,404,400.47 1,903,054.14 3,307,454.61
(2) Increase in 2021
- Provision
(3) Decrease in 2021
- Disposal
Notes to the Financial Statements Page 87
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Buildings and
Item Land use rights Total
constructions
(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, 2021 5,589,969.75 1,370,940.00 6,960,909.75
(2) Book value as at December 31, 2020 6,008,153.31 1,427,280.00 7,435,433.31
5.7 Fixed assets
5.7.1 Fixed assets and disposal of fixed assets
Balance as at December Balance as at December
Item
31, 2021 31, 2020
Fixed assets 31,279,819.99 34,694,023.75
Disposal of fixed assets
Total 31,279,819.99 34,694,023.75
5.7.2 Fixed assets details
Buildings and Machinery Electronic Other
Item Vehicles Total
constructions equipment equipment equipment
1. Original book
value
(1) Balance as at
December 31, 136,789,501.82 10,179,078.30 1,742,065.57 1,891,499.07 4,070,039.35 154,672,184.11
2020
(2) Increase in
250,232.71 21,492.18 271,724.89
2021
- Purchase 250,232.71 21,492.18 271,724.89
- Transfer from
construction in
progress
-Increase in
Notes to the Financial Statements Page 88
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Buildings and Machinery Electronic Other
Item Vehicles Total
constructions equipment equipment equipment
mergers
(3) Decrease in
59,500.00 59,500.00
2021
- Disposal or
59,500.00 59,500.00
write-off
(4) Ending balance 136,789,501.82 10,179,078.30 1,682,565.57 2,141,731.78 4,091,531.53 154,884,409.00
2. Accumulated
amortization
(1) Balance as at
December 31, 76,850,214.26 7,460,001.06 1,253,748.18 731,406.88 1,044,848.02 87,340,218.40
2020
(2) Increase in
2,175,434.88 349,802.64 88,957.20 336,395.20 732,363.53 3,682,953.45
2021
- Provision 2,175,434.88 349,802.64 88,957.20 336,395.20 732,363.53 3,682,953.45
(3) Decrease in
56,524.80 56,524.80
2021
- Disposal or
56,524.80 56,524.80
write-off
(4) Ending balance 79,025,649.14 7,809,803.70 1,286,180.58 1,067,802.08 1,777,211.55 90,966,647.05
3. Provision for
impairment
(1) Balance as at
December 31, 31,072,788.17 1,565,153.79 32,637,941.96
2020
(2) Increase in
2021
- Provision
(3) Decrease in
Notes to the Financial Statements Page 89
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Buildings and Machinery Electronic Other
Item Vehicles Total
constructions equipment equipment equipment
2021
- Disposal or
write-off
(4) Ending balance 31,072,788.17 1,565,153.79 32,637,941.96
4. Book value
(1) Book value as
at December 31, 26,691,064.51 804,120.81 396,384.99 1,073,929.70 2,314,319.98 31,279,819.99
2021
(2) Book value as
at December 31, 28,866,499.39 1,153,923.45 488,317.39 1,160,092.19 3,025,191.33 34,694,023.75
2020
Remark: the Company name right number three huts and character (2013) no.
07799, the villa - three huts and character (2013) no. 07801, the villa - three huts
and character (2013) no. 07798, the villa - three huts and character (2013) no.
07796, the villa - three huts and no. 07800 (2013) word, total area of 1446.00
square meters of housing, are the mortgage (mortgage contract no. :Xingyinqiong
SYYYB (mortgage) 2020 No. 001) of the Company borrowed from Industrial
Bank co., LTD. Haikou branch (contract number: xing silver Joan SYYYB (flow)
borrow words 2020 no. 001) . See Note 5.18 for details.
5.8 Construction in progress
5.8.1 Construction in progress and project materials
Balance as at December 31, Balance as at December
Item
2021 31, 2020
Construction in progress
Project materials
Total
5.8.2 Change of important construction in progress in the year of 2021
Notes to the Financial Statements Page 90
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Amount
Balance as at Other amount Balance as at
Increase in transferred into
Project name December 31, reduction in December 31,
2021 fixed assets in
2020 2021 2021
2021
Curtain
transformation of 82,916.55 82,916.55
villa
Total 82,916.55 82,916.55
5.9 Intangible assets
5.9.1 Intangible assets details
Item Land use rights Total
1. Original book value
(1) Balance as at December 31, 2020 81,653,137.15 81,653,137.15
(2) Increase in 2021
- Purchase
- Internal research and development
-Increase in merger
(3) Decrease in 2021
- Disposal
- Invalidation and derecognition amount
(4) Ending balance 81,653,137.15 81,653,137.15
2. Accumulated amortization
(1) Balance as at December 31, 2020 33,631,825.59 33,631,825.59
(2) Increase in 2021 812,387.16 812,387.16
- Provision 812,387.16 812,387.16
(3) Decrease in 2021
- Disposal
- Invalidation and derecognition amount
Notes to the Financial Statements Page 91
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Item Land use rights Total
(4) Ending balance 34,444,212.75 34,444,212.75
3. Provision for impairment
(1) Balance as at December 31, 2020 27,440,836.84 27,440,836.84
(2) Increase in 2021
- Provision
(3) Decrease in 2021
- Disposal
- Invalidation and derecognition amount
(4) Ending balance 27,440,836.84 27,440,836.84
4. Book value
(1) Book value as at December 31, 2021 19,768,087.56 19,768,087.56
(2) Balance as at December 31, 2020 20,580,474.72 20,580,474.72
5.10 Long-term deferred expenses
Balance as at Amounts of Balance as at
Increase in Amortization in
Item December 31, other December 31,
2021 2021
2020 decreases 2021
B building guest
room renovation 14,149,911.76 2,920,114.45 436,906.54 10,792,890.77
project
Building A Fire
Stair Renovation 11,423.92 11,423.92
Project
Swimming pool
104,985.68 59,991.80 44,993.88
reconstruction
Reconstruction of
guest rooms in 336,605.45 192,345.93 144,259.52
Building C
Villa 613,171.97 82,916.55 365,585.13 330,503.39
Notes to the Financial Statements Page 92
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Balance as at Amounts of Balance as at
Increase in Amortization in
Item December 31, other December 31,
2021 2021
2020 decreases 2021
reconstruction
Building A
7,160,831.38 1,868,043.00 5,292,788.38
renovation project
Pavement
modification 345,134.02 90,034.92 255,099.10
project
Roof
waterproofing 296,073.35 74,018.40 222,054.95
project
Staff dormitory
526,177.78 131,544.48 394,633.30
renovation project
Landscape
1,413,387.42 96,741.74 312,740.34 1,197,388.82
greening project
Total 24,957,702.73 179,658.29 6,025,842.37 436,906.54 18,674,612.11
5.11 Accounts payable
5.11.1 Presentation of accounts payable
Balance as at December Balance as at December
Item
31, 2021 31, 2020
Payment for purchase 655,108.86 586,111.30
Labor service 124,442.26 134,562.18
Project payments 14,274.10 14,274.10
Consignment sales 1,093.00 1,093.00
Provisional estimate of accounts payable 707.83 72,669.88
Total 795,626.05 808,710.46
5.11.2 Significant accounts payable with aging over one year:
Notes to the Financial Statements Page 93
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Balance as at December Reasons for repayment
Item
31, 2021 failure or carry-forward
Hainan Huanyu Decoration Design Engineering Co.,
14,274.10 Unsettlement
LTD
Total 14,274.10
5.12 Contractual liabilities
5.12.1 Presentation of contractual liabilities
Balance as at December Balance as at December
Item
31, 2021 31, 2020
Room and meal fees 1,035,422.63 626,285.33
Total 1,035,422.63 626,285.33
5.13 Employee compensation payable
5.13.1 Presentation of employee compensation payable
Balance as at Balance as at
Item December 31, Increase in 2021 Decrease in 2021 December 31,
2020 2021
Short-term compensation 2,595,861.40 10,294,067.85 10,720,712.64 2,169,216.61
Post-employment benefits
- defined contribution 1,019,812.71 1,019,812.71
plans
Dismissal welfare
Other benefits maturing
within one year
Total 2,595,861.40 11,313,880.56 11,740,525.35 2,169,216.61
5.13.2 Presentation of short-term compensation
Notes to the Financial Statements Page 94
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Balance as at Balance as at
Item December 31, Increase in 2021 Decrease in 2021 December 31,
2020 2021
(1) Salaries, bonuses,
1,378,009.71 8,083,962.87 8,629,686.72 832,285.86
allowances and subsidies
(2) Employee welfare
1,201,224.97 1,201,224.97
expenses
(3) Social insurance
534,615.88 534,615.88
premiums
Including: medical
525,358.23 525,358.23
insurance premiums
Work-related injury
9,257.65 9,257.65
insurance premiums
Maternity insurance
premiums
(4) Housing provident
200,842.00 200,842.00
funds
(5) Labor union
expenditures and 1,217,851.69 273,422.13 154,343.07 1,336,930.75
employee education funds
(6) Short-term
compensated absences
(7) Short-term
profit-sharing plan
Total 2,595,861.40 10,294,067.85 10,720,712.64 2,169,216.61
5.13.3 Presentation of defined contribution plans
Balance as at Balance as at
Increase in Decrease in
Item December 31, December 31,
2021 2021
2020 2021
Basic endowment insurance 988,907.30 988,907.30
Notes to the Financial Statements Page 95
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Balance as at Balance as at
Increase in Decrease in
Item December 31, December 31,
2021 2021
2020 2021
premiums
Unemployment insurance premiums 30,905.41 30,905.41
Enterprise annuity payment
Total 1,019,812.71 1,019,812.71
5.14 Taxes and surcharges payable
Balance as at December Balance as at December
Taxes and surcharges
31, 2021 31, 2020
Value added tax (VAT) 147,174.90 146,530.24
Housing property tax 115,125.11 120,439.32
Land use tax 54,295.48 54,295.47
Individual income tax 18,008.86 37,465.26
Urban maintenance and construction tax 783.46 738.33
Educational surtax 337.14 316.43
Local education surtax 224.74 210.95
Stamp duty 6,896.96
Total 335,949.69 366,892.96
5.15 Other payables
Balance as at December Balance as at December
Item
31, 2021 31, 2020
Interest payable
Dividends payable
Other payables 3,776,914.63 6,167,763.36
Total 3,776,914.63 6,167,763.36
Notes to the Financial Statements Page 96
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
5.15.1 Other payables
(1) Presentation of other payables by nature
Balance as at December Balance as at December
Item
31, 2021 31, 2020
Engineering and quality retention money 1,496,286.74 4,605,450.06
Transactions with other units 916,083.75
Security deposits 534,056.76 295,089.81
Staff dormitory rental fee, etc 485,471.17 1,013,939.39
Employee deposits 166,500.90 87,820.00
On behalf of collection or payment 157,309.22 142,856.24
Expected telephone bill 21,206.09 22,607.86
Total 3,776,914.63 6,167,763.36
5.16 Non-current liabilities due within one year
Balance as at December Balance as at December
Item
31, 2021 31, 2020
Long-term borrowing due within one year - principal 3,299,238.76 6,598,477.52
Long-term borrowing due within one year – accrual
8,284.06 23,020.42
interest payable
Total 3,307,522.82 6,621,497.94
Note: See Note 5.18 for details.
5.17 Other current liabilities
Balance as at December Balance as at December
Item
31, 2021 31, 2020
Tax to be exported 62,125.36 37,577.12
Total 62,125.36 37,577.12
Notes to the Financial Statements Page 97
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
5.18 Long-term loans
Balance as at December Balance as at December
Item
31, 2021 31, 2020
Mortgage loan 3,295,280.42 9,893,757.94
Total 3,295,280.42 9,893,757.94
Note: The mortgage loan of RMB 3,295,280.42 is the loan of the Company from the Haikou
Branch of Industrial Bank Co., Ltd., the term of which is from April 23, 2020 to April 9,
2023, and the mortgage guarantee is made on the property with the total area of 1,446.00
square meters under the Company's name and the assessed value of RMB 39,263,245.00
(see Note 5.7 for details). The ending balance of the mortgage loan was RMB 6,594,519.18, of
which RMB 3,299,238.76 will be repaid in 2022 and reclassified as a non-current liability due
within one year.
5.19 Estimated liabilities
Balance as at Balance as at Balance as at
Increase in Decrease
Item December January 1, December Reason
2021 in 2021
31, 2020 2021 31, 2021
Provisions for
Make provisions
arrears of
1,489,685.04 1,489,685.04 1,489,685.04 for electricity
electricity
bills
tariffs
Total 1,489,685.04 1,489,685.04 1,489,685.04
Note: See Note 10.2 for details.
5.20 Other non-current liabilities
Balance as at December 31, Balance as at December 31,
Item
2021 2020
Notes to the Financial Statements Page 98
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Balance as at December 31, Balance as at December 31,
Item
2021 2020
Projects paid over one year 1,914,592.66
Total 1,914,592.66
5.21 Share capital
Changes in 2021 ("+" for increase and "-" for decrease)
Balance as at Balance as at
Issuance Conversion
Item December 31, Share December 31,
of new of reserves Others Sub-total
2020 donation 2021
shares into share
Total shares 364,100,000.00 364,100,000.00
5.22 Capital reserves
Balance as at Balance as at
Increase in Decrease
Item December 31, December 31,
2021 in 2021
2020 2021
Capital premium (share premium) 33,336,215.58 33,336,215.58
Other capital reserves 20,806,634.43 4,714,144.25 25,520,778.68
Total 54,142,850.01 4,714,144.25 58,856,994.26
Note: the increase of RMB 4,714,144.25 in the current period is that the income from guest
rooms, catering and moon cakes without commercial substance is included in the capital
reserve according to equity transactions.
5.23 Undistributed profit
Item Year 2021 Year 2020
Undistributed profit as at the end of the previous period before
-351,324,135.02 -339,756,246.05
adjustment
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 -351,324,135.02 -339,756,246.05
Notes to the Financial Statements Page 99
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Item Year 2021 Year 2020
Plus: net profit attributable to owners of the parent company in the
-2,011,048.59 -11,567,888.97
current period
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 -353,335,183.61 -351,324,135.02
5.24 Operating revenue and operating cost
5.24.1 Operating revenue and operating cost
Year 2021 Year 2020
Item
Revenue Cost Revenue Cost
Primary business 23,743,452.21 15,734,052.33 13,393,894.12 12,293,939.28
Other business 6,491,016.36 2,701,994.74 2,118,095.25 474,523.56
Total 30,234,468.57 18,436,047.07 15,511,989.37 12,768,462.84
Note: Other business income mainly refers to place, house rental income, and sales
of moon cakes and wines income.
5.25 Taxes and surcharges
Item Year 2021 Year 2020
Housing property tax 406,896.00 311,241.75
Land use tax 217,181.88 162,886.41
Urban construction tax 10,306.97 8,408.98
Vehicle and vessel use tax 6,420.00 4,219.00
Educational surtax 4,417.27 3,500.57
Local education surtax 2,944.83 2,333.70
Notes to the Financial Statements Page 100
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Item Year 2021 Year 2020
Stamp tax 1,019.10 6,861.58
Total 649,186.05 499,451.99
5.26 Selling expenses
Item Year 2021 Year 2020
Employee salaries 2,824,131.53 2,808,385.87
Depreciation 679,893.66 642,976.97
Social insurance premiums 563,292.94 163,017.79
Employee benefits 387,651.00 320,143.00
Utility bills 240,113.31 138,757.23
Repair charges 172,122.54 179,321.67
Operating supplies 159,848.99 88,404.28
Labor union expenditures and employee education funds 94,420.89 98,293.62
Promotion fees 87,238.40 83,877.78
Housing provident funds 62,430.00 59,940.00
Fuel fees 55,741.87 85,834.41
Amortization of low-cost consumables 23,710.57 104,355.92
Other expenses 71,598.89 80,414.39
Total 5,422,194.59 4,853,722.93
5.27 General and administrative expenses
Item Year 2021 Year 2020
Salaries and welfares 4,553,778.01 5,429,878.64
Amortization of intangible assets 812,387.16 812,387.16
Social labor insurance premium 697,273.14 227,119.89
Agency fee 411,100.00 400,000.00
Depreciation 331,710.13 303,927.32
Notes to the Financial Statements Page 101
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Item Year 2021 Year 2020
Announcing fee 287,346.00 223,900.00
Travel expenses 200,098.53 194,199.16
Business entertainment expenses 170,797.45 518,279.26
Funds for labor union and staff education 133,671.67 143,177.14
Housing provident funds 108,322.00 98,257.00
Repair charge 100,382.09 142,208.97
Promotion fees 10,321.19 54,570.96
Legal fee 122,884.81
Attorney fee 83,000.00
Listing fee 47,748.00
Other expenses 167,257.83 224,888.25
Total 7,984,445.20 9,026,426.56
5.28 Financial expenses
Item Year 2021 Year 2020
Interest expenses 217,383.75 551,742.76
Including: interest expense for lease liabilities
Less: interest income 23,759.18 155,036.56
Profit or loss on exchange
Handling charges 53,940.45 38,743.26
Total 247,565.02 435,449.46
5.29 Other income
Item Year 2021 Year 2020
Deducted input tax 402,655.21 25,614.48
Government grants 66,975.79 152,593.62
Refund individual income tax commission 3,492.33
Direct reduction of VAT 639,617.24
Notes to the Financial Statements Page 102
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Item Year 2021 Year 2020
Total 473,123.33 817,825.34
Government grants included in other income
Grant item Year 2021 Year 2020 Related to assets/related to income
Steady post subsidies 15,975.79 2,593.62 Income
The Human Resources Development
Bureau of Sanya provides subsidies to 51,000.00 Income
workers for training
Support fund for market development of
150,000.00 Income
inbound tourism
Total 66,975.79 152,593.62
5.30 Credit impairment loss
Item Year 2021 Year 2020
Account receivable bad debt loss -60,702.08 52,939.18
Other receivable bad debt loss 3,787.91 10,494.77
Total -56,914.17 63,433.95
5.31 Non-operating income
Amount booked into
Item Year 2021 Year 2020 current non-recurring
profits and losses
Transfer of consumption card balance to
367,288.68 367,288.68
non-operating income
Gain on the destruction of non-current
400.00 227.50 400.00
assets
Other 286,200.36
Compensation 416.00 416.00
Notes to the Financial Statements Page 103
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Amount booked into
Item Year 2021 Year 2020 current non-recurring
profits and losses
Total 368,104.68 286,427.86 368,104.68
5.32 Non-operating expenses
Amount booked into
Item Year 2021 Year 2020 current non-recurring
profits and losses
Overdue fine 822.60 1,046.33 822.60
Loss of non-current assets damaged and
475.20 148,457.47 475.20
scrapped
Termination indemnity and
387,680.01
compensation
Cost of donated moon cakes 402,923.61 402,923.61
Total 404,221.41 537,183.81 404,221.41
5.33 Items in the statement of cash flows
5.33.1 Other cash received in connection with business activities
Item Year 2021 Year 2020
Receive government subsidies 864,503.69
Charge for rent, water, electricity and gas 692,363.93 360,916.50
Interest income 23,745.03 155,036.56
Income support fund for overseas tourism market
150,000.00
development
Others 109,108.00 288,793.98
Total 1,689,720.65 954,747.04
Notes to the Financial Statements Page 104
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
5.33.2 Other cash paid in connection with business activities
Item Year 2021 Year 2020
Moon cakes 455,303.68
Agency fee 421,000.00 400,000.00
Announcing fees and related fees 332,346.00 72,000.00
Return the balance of consumption 317,179.14
Postage 312,958.54 17,705.99
Staff loan 302,977.00 291,688.22
Repair fees 197,188.13 260,141.62
Travel expenses 145,642.34 109,137.68
Online sales Service fee 116,560.70
Fuel, utilities, natural gas 55,580.00 138,757.23
Entertainment expenses 16,572.50 228,639.04
Finance charges 7,395.26 38,743.26
Security deposits 156,500.00
Promotion fees 75,088.14
Shenzhen Stock Exchange listing fee 47,748.00
Premiums for property insurance 42,072.87
Attorney fees 30,000.00
Office expenses 11,087.05
Other 426,842.75 382,414.41
Total 3,107,546.04 2,301,723.51
5.33.3 Receiving other cash related to investment activities
Item Year 2021 Year 2020
The income from guest rooms, catering and moon cakes
without commercial substance shall be included in the 4,710,262.67
capital reserve income according to the equity transaction
Total 4,710,262.67
Notes to the Financial Statements Page 105
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
5.34 Supplementary information to the statement of cash flows
5.34.1 Supplementary information to the statement of cash flows
Supplementary information Year 2021 Year 2020
1. Net profit adjusted to cash flows from operating activities
Net profit -2,011,048.59 -11,567,888.97
Plus: Credit impairment loss -56,914.17 63,433.95
Provision for impairment of assets
Depreciation of fixed assets 4,101,137.01 3,843,709.02
Depletion of oil and gas assets
Depreciation of use-right assets
Amortization of intangible assets 868,727.16 868,727.16
Amortization of long-term deferred expenses 6,025,842.37 3,603,947.43
Losses from disposal of fixed assets, intangible assets and other
long-term assets ("-" for gains)
Losses from write-off of fixed assets ("-" for gains) 75.20 148,457.47
Losses from changes in fair value ( -”“ for gains)
Financial expenses ("-" for gains) 579,131.16 551,742.76
Investment losses ("-" for gains)
Decreases in deferred income tax assets ("-" for increases)
Increases in deferred income tax liabilities ("-" for decreases)
Decreases in inventories ("-" for increases) 1,830,066.43 -1,450,609.59
Decreases in operating receivables ( -
”“ for increases) 792,447.65 -1,699,666.53
Increases in operating payables ("-" for decreases) 1,086,065.10 -1,091,120.68
Others
Net cash flow from operating activities 13,215,529.32 -6,729,267.98
2. Significant investing and financing activities not involving
cash receipts and payments
Conversion of debt into capital
Notes to the Financial Statements Page 106
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Supplementary information Year 2021 Year 2020
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 4,684,700.89 2,924,459.75
Less: beginning balance of cash 2,924,459.75 7,422,939.89
Plus: ending balance of cash equivalents
Less: beginning balance of cash equivalents
Net increase in cash and cash equivalents 1,760,241.14 -4,498,480.14
5.34.2 Breakdowns of cash and cash equivalents
Balance as at Balance as at
Item
December 31, 2021 December 31, 2020
I. Cash 4,684,700.89 2,924,459.75
Including: cash on hand 210,798.68 179,111.10
Unrestricted cash at bank 4,473,902.21 2,745,348.65
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 4,684,700.89 2,924,459.75
Including: cash and cash equivalents restricted in use of the
parent company or subsidiaries of the Group
5.35 Restricted ownership or right of use assets
Balance as at December
Item Reason of restriction
31, 2021
Notes to the Financial Statements Page 107
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Balance as at December
Item Reason of restriction
31, 2021
Fixed assets 4,107,631.28 Mortgage
Total 4,107,631.28
Notes: see note 5.7 for details.
6. Change of the consolidation scope
The scope of the merger of the Company for the current period is unchanged.
7. Rights and interests in other entities
7.1 Equity in subsidiaries
7.1.1 Structure of the enterprise group
Principal place Business Shareholding ratio (%) Method of
Name of subsidiary Registration place
of business nature Direct Indirect acquisition
Block B, Main Building,
Hainan Wengao Hainan Dadonghai Tourism Leasing and
Tourist Resources Centre (Holdings) Co., Ltd., commercial Newly
Sanya, Hainan 100.00
Development Co., No. 2, Yuhai Road, Jiyang service established
Ltd. District, Sanya City, Hainan industries
Province
8. Risks related to financial instruments
The Company faces various financial risks in the process of operation: credit risk, liquidity risk
and market risk. The above financial risks and the risk management policies adopted by the
company to reduce these risks are as follows:
The board of directors is responsible for planning and establishing the Company's risk
management structure, formulating the company's risk management policies and relevant
guidelines, and supervising the implementation of risk management measures. The Company has
formulated risk management policies to identify and analyze the risks faced by the company.
These risk management policies clearly specify specific risks, covering market risk, credit risk,
liquidity risk management and many other aspects. The Company regularly evaluates the changes
in the market environment and the Company's business activities to decide whether to update the
Notes to the Financial Statements Page 108
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
risk management policy and system. The risk management of the Company shall be carried out in
accordance with the risk management policy approved by the board of directors. The risk
management committee identifies, evaluates and avoids relevant risks through close cooperation
with other business departments of the Company. The internal audit department of the Company
conducts regular audit on risk management control and procedures, and reports the audit results to
the audit committee of the Company.
The Company disperses the risks of financial instruments through appropriate diversified
investment and business portfolio, and reduces the risks concentrated in a single industry, specific
regions or specific counterparties by formulating corresponding risk management policies.
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 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.
The Company's various financial liabilities are shown below in terms of undiscounted
contractual cash flows as due dates:
Item Balance as at December 31, 2021
Notes to the Financial Statements Page 109
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
3 month to 1 Overdue
Within 1 year Above 5
1-3 months 1-5 years Total
month (including 1 years
year)
Long-term
loans
(including
long-term 3,299,238.76 3,295,280.42 6,594,519.18
loans with
maturity of 1
year)
Long-term
loans 8,284.06 8,284.06
(interest)
Total 3,307,522.82 3,295,280.42 6,602,803.24
Balance as at December 31, 2020
3 month to 1
Item Within 1 year Above 5
1-3 months 1-5 years Overdue Total
month (including 1 years
year)
Long-term
loans
(including
long-term 6,598,477.52 9,893,757.94 16,492,235.46
loans with
maturity of 1
year)
Long-term
23,020.42 23,020.42
loans
Notes to the Financial Statements Page 110
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Balance as at December 31, 2020
3 month to 1
Item Within 1 year Above 5
1-3 months 1-5 years Overdue Total
month (including 1 years
year)
(interest)
Total 23,020.42 6,598,477.52 9,893,757.94 16,515,255.88
8.3 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.
The interest rate risk of the Company refers to the risk that the fair value of financial
instruments or future cash flows will fluctuate due to changes in market interest rates.
The interest rate risk that the Company faces mainly comes from the bank's long-term loan.
The details of external borrowings of the Company on December 31, 2021 are as follows
Balance as at Including: Including:
Balance as at
Item December 31, Ending interest Beginning
January 1, 2021
2021 payable interest payable
Long-term loans due within 1
3,307,522.82 8,284.06 6,621,497.94 23,020.42
year
Long-term loans 3,295,280.42 9,893,757.94
Total 6,602,803.24 8,284.06 16,515,255.88 23,020.42
9. Related parties and related party transactions
9.1 The largest shareholder of the Company
Notes to the Financial Statements Page 111
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Ratio of
Registered Shareholding voting
Name of the Related
Type of Registration Legal Business capital ratio in the right in
largest party
enterprise place representative nature Company the
shareholder relationships
(RMB'0,000) (%) Company
(%)
Planting
Luo Niu
The largest Listed and
Shan Co., Haikou Xu Zili 115,151.00 17.55 19.80
shareholder company breeding
Ltd.
industry
Remark: as at December 31, 2021, Luo Niu Shan 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 The subsidiaries of the Company
For details of the company's subsidiaries, please refer to the note "7 Rights and interests in other
entities".
9.3 Related party transactions
9.3.1 Related party transactions of purchasing and selling commodities, providing
and receiving labor services
Purchase of goods / acceptance of labor services
Content of related-party
Related party Year 2021 Year 2020
transaction
Luo Niu Shan Co., Ltd. Warehouse service 4,382.59
Sales of goods / provision of labor services
Content of related-party
Related party Year 2021 Year 2020
transaction
Luo Niu Shan Co., Ltd. Room and related services 2,304,335.00 54,352.40
Notes to the Financial Statements Page 112
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Content of related-party
Related party Year 2021 Year 2020
transaction
Luo Niu Shan Co., Ltd. Sales of moon cakes 373,329.60
9.3.2 Key management personnel emoluments
Item name Year 2021 (RMB'0,000) Year 2020(RMB'0,000)
Key management personnel emoluments 185.41 195.32
9.4 Receivables and payables of the related party
9.4.1 Accounts Receivables
Balance as at December Balance as at
Item name Related party
31, 2021 December 31, 2020
Accounts receivable Luo Niu Shan Co., Ltd. 3,378.00
10. Commitments or Contingencies
10.1 Commitments
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, Luo Niu Shan 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
Notes to the Financial Statements Page 113
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
restructuring commitment was changed to December 27, 2017.
As of December 31, 2021, no further progress was made on the above-mentioned asset
restructuring commitments.
10.2 Contingencies
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 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, 2021, no further
progress was m .rettam siht no eda
11. Post balance sheet events
11.1 Other explanations of events after the balance sheet date
On January 25, 2022, the Company announced the performance forecast announcement for
2021. It is estimated that the net profit attributable to the parent company of the listed
company in 2021 will be RMB 2.7 million to RMB 3.1 million. The audited net profit
Notes to the Financial Statements Page 114
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
attributable to the parent company in 2021 is RMB - 2.01 million, and the performance
forecast is significantly different from the actual profit of the Company in 2021.
12. Other significant events
12.1 Correction of accounting errors in previous periods
12.1.1 Retroactive restatement method
There was no correction of accounting errors in prior periods made under the
retrospective restatement method during the reporting period.
12.1.2 Prospective application method
There was no correction of accounting errors in prior period under the prospective
application method adopted during the current reporting period.
12.2 Miscellaneous
The Company announced on June 3, 2019 that Hainan Dadonghai Tourism Center Group
Co., Ltd. (hereinafter referred to as "Dadonghai Group") borrowed 2.76 million yuan and
4.55 million yuan from the Company on October 16, 1996 and December 26, 1996
respectively. The two loans totaling 7.31 million yuan have not been repaid yet. The
Company filed a lawsuit with the People's Court of the Suburb of Sanya City, Hainan
Province (hereinafter referred to as the "Court") to request the defendant Dadonghai Group
to repay the loan of 7.31 million yuan to the Company.
On October 9, 2020, the Company received the Civil Judgment (2020) No. 1629 of
Qiong02 Minzhong issued by the Intermediate People's Court of Sanya City. It is ordered
that Dadonghai Group shall repay the loan of 7.31 million yuan to the Company within 10
days from the effective date of this judgment. At present, the case has applied to the court
for enforcement. As of the date of issuance of the audit report, there has been no substantive
progress.
13. Notes to main items of financial statements of the parent company
13.1 Accounts receivable
13.1.1 Accounts receivable shall be disclosed according to the age of accounts
Notes to the Financial Statements Page 115
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Balance as at December 31, Balance as at December 31,
Aging
2021 2020
Within 1 year 269,894.53 479,847.53
1 year to 2 years 7,461.89 19,092.00
2 years to 3 years 19,092.00 2,259.00
3 years to 4 years 2,259.00 566.00
4 years to 5 years 120.00 785.00
Above 5 years 90,243.80 89,458.80
Sub-total 389,071.22 592,008.33
Less: bad-debt provision 102,002.93 162,705.01
Total 287,068.29 429,303.32
Notes to the Financial Statements Page 116
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
13.1.2 Accounts receivable shall be classified and disclosed according to the expected credit loss method
Balance as at December 31, 2021 Balance as at December 31, 2020
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 (%)
Estimate credit
losses on an
individual basis
Estimated credit
losses on a 389,071.22 100.00 102,002.93 26.22 287,068.29 592,008.33 100.00 162,705.01 27.48 429,303.32
portfolio basis
Total 389,071.22 100.00 102,002.93 287,068.29 592,008.33 100.00 162,705.01 429,303.32
Notes to the Financial Statements Page 117
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Provision for bad debts by portfolio:
In portfolio, accounts receivable with the provision for bad debts made by the aging analysis method:
Balance as at December 31, 2021
Aging Proportion of provision
Accounts receivable Provision for bad debts
(%)
Within 1 year 269,894.53 4,395.18 1.63
1-2 years 7,461.89 1,876.02 25.14
2-3 years 19,092.00 4,799.99 25.14
3-4 years 2,259.00 567.94 25.14
4-5 years 120.00 120.00 100.00
Over 5 years 90,243.80 90,243.80 100.00
Total 389,071.22 102,002.93
13.1.3 Provision, reversal or recovery of bad debt reserves in 2021
Balance as at Changes in 2021 Balance as at
Category December 31, December 31,
Provision Reverse Write off
2020 2021
Account receivables 162,705.01 -60,702.08 102,002.93
Total 162,705.01 -60,702.08 102,002.93
13.1.4 Top five accounts receivable in terms of their balance as at December 31,
2021 collected by the debtor
Balance as at December 31, 2020
Proportion in the
Name of entity Accounts Provision for bad
total accounts
receivable debts
receivable (%)
Shanghai Hecheng International Agency
159,477.11 40.99 2,597.08
Service Co., Ltd.
Guangzhou Design Institute 38,980.00 10.02 38,980.00
Notes to the Financial Statements Page 118
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Balance as at December 31, 2020
Proportion in the
Name of entity Accounts Provision for bad
total accounts
receivable debts
receivable (%)
Yangpu Huayu Road & bridge Technology
18,633.00 4.79 18,633.00
Co., Ltd.
Haikou XinDeCheng Construction and
14,300.00 3.68 232.87
Installation Engineering Co., Ltd.
China International Travel Service Limited,
13,540.20 3.48 13,540.20
Head Office
Total 244,930.31 62.96 73,983.15
13.2 Other receivables
Balance as at December 31, Balance as at December 31,
Item
2021 2020
Interest receivable
Dividends receivable
Other receivables 504,530.57 432,560.55
Total 504,530.57 432,560.55
13.2.1 Accounts receivable shall be disclosed according to the age of accounts
Balance as at December 31, Balance as at December 31,
Aging
2021 2020
Within 1 year 352,074.52 444,074.24
1 year to 2 years 174,594.55 26,836.90
2 years to 3 years 20,000.00
3 years to 4 years
4 years to 5 years
Above 5 years 2,236.00 2,236.00
Notes to the Financial Statements Page 119
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Balance as at December 31, Balance as at December 31,
Aging
2021 2020
Sub-total 548,905.07 473,147.14
Less: bad-debt provision 44,374.50 40,586.59
Total 504,530.57 432,560.55
Notes to the Financial Statements Page 120
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
13.2.2 Other receivable shall be classified and disclosed according to the expected credit loss method
Balance as at December 31, 2021 Balance as at December 31, 2020
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 (%)
Estimate credit
losses on an
individual basis
Estimated credit
losses on a portfolio 548,905.07 100.00 44,374.50 8.08 504,530.57 473,147.14 100.00 40,586.59 8.58 432,560.55
basis
Total 548,905.07 100.00 44,374.50 504,530.57 473,147.14 100.00 40,586.59 432,560.55
Notes to the Financial Statements Page 121
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Notes to the Financial Statements Page 122
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Provision for bad debts is made on a combined basis:
Balance as at December 31, 2021
Name Proportion of
Other receivables Provision for bad debts
provision (%)
Deposits and petty cash receivables
239,969.08 11,998.46 5.00
portfolio
Receivable advance payment portfolio 180,885.17 25,973.50 14.36
Other receivables portfolio 128,050.82 6,402.54 5.00
Total 548,905.07 44,374.50
13.2.3 Provision for bad debts
First stage Second stage Third stage
Expected credit
Expected credit loss loss for the whole
Provision for bad debts Expected credit loss for the whole duration (credit Total
in next 12 months duration (no credit impairment has
impairment) occurred)
Balance as at December 31,
22,766.34 17,820.25 40,586.59
2020
Balance as at December 31,
22,766.34 17,820.25 40,586.59
2020 in current period
--Transfer in second stage
--Transfer in third stage
--Reverse to second stage
--Reverse to first stage
Provision in current period 3,787.91 3,787.91
Reverse in current period
Sell-off in current period
Notes to the Financial Statements Page 123
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
First stage Second stage Third stage
Expected credit
Expected credit loss loss for the whole
Provision for bad debts Expected credit loss for the whole duration (credit Total
in next 12 months duration (no credit impairment has
impairment) occurred)
Write-off in current period
Other changes
Balance as at December 31.
26,554.25 17,820.25 44,374.50
2021
Other receivables account balance changes as follows:
First stage Second stage Third stage
Expected credit
Expected credit loss for the whole
Book balance Expected credit loss loss for the whole duration (credit Total
in next 12 months duration (no credit impairment has
impairment) occurred)
Balance as at December 31.
455,326.89 17,820.25 473,147.14
2020
Balance as at December 31.
455,326.89 17,820.25 473,147.14
2020 in current period
--Transfer in second stage
--Transfer in third stage
--Reverse to second stage
--Reverse to first stage
Increase in current period 2,334,336.56 2,334,336.56
Notes to the Financial Statements Page 124
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
First stage Second stage Third stage
Expected credit
Expected credit loss for the whole
Book balance Expected credit loss loss for the whole duration (credit Total
in next 12 months duration (no credit impairment has
impairment) occurred)
Directly write down in
2,258,578.63 2,258,578.63
current period
De-recognition in current
period
Other changes
Balance as at December 31.
531,084.82 17,820.25 548,905.07
2021
13.2.4 Provision, reversal or recovery of bad debt reserves in 2021
Balance as at Changes in 2021 Balance as at
Category December 31, December 31,
Provision Reverse Write off
2020 2021
Account receivables 40,586.59 3,787.91 44,374.50
Total 40,586.59 3,787.91 44,374.50
13.2.5 Classification of other receivables by nature of payment
Book balance as at December Book balance as at
Nature of payment
31, 2021 December 31, 2020
Utility bills 176,435.17 189,577.27
Security deposits 156,500.00 156,500.00
Petty cash 87,319.08 56,812.68
Social insurance and housing provident funds 64,050.82 59,657.19
Consulting service fee 60,000.00
Notes to the Financial Statements Page 125
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Book balance as at December Book balance as at
Nature of payment
31, 2021 December 31, 2020
Deposit 600.00 600.00
Elevator installation fee 10,000.00
Others 4,000.00
Total 548,905.07 473,147.14
13.2.6 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 bad
Name of entity Nature of payment December 31, Aging other receivables debts as at
2021 as at December December 31,
31, 2021 (%) 2021
Labor Security Supervision
Security deposits 156,500.00 1-2 years 28.51 7,825.00
Detachment of Sanya
Health center Utility bills 102,599.56 Within 1 year 18.69 5,129.98
Hainan Zhongzhida Technology
Consulting service fee 60,000.00 Within 1 year 10.93 3,000.00
Co., Ltd
Hut stores Utility bills 26,822.64 Within 1 year 4.89 1,341.13
Taian Chen Petty cash 20,000.00 Within 1 year 3.64 1,000.00
Total 365,922.20 66.66 18,296.11
13.3 Long-term equity investments
Item Balance as at December 31, 2021 Balance as at December 31, 2020
Book Provision for Book value Book balance Provision Book value
Notes to the Financial Statements Page 126
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
balance impairment for
impairment
Investment in subsidiaries 1,000,000.00 1,000,000.00 1,000,000.00 1,000,000.00
Investment in associates and
joint ventures
Total 1,000,000.00 1,000,000.00 1,000,000.00 1,000,000.00
13.3.1 Investment in subsidiaries
13.4 Operating revenue and operating cost
13.4.1 Operating revenue and operating costs
Year 2021 Year 2020
Item
Revenue Cost Revenue Cost
Primary business 23,743,452.21 15,734,052.33 13,393,894.12 12,293,939.28
Other businesses 6,491,016.36 2,701,994.74 2,118,095.25 474,523.56
Total 30,234,468.57 18,436,047.07 15,511,989.37 12,768,462.84
Remark: Revenue from other businesses mainly refers to place and house rental income,
and sales of moon cakes and wines income.
14. Supplementary information
14.1 Breakdown of current non-recurring profits and losses
Item Amount in 2021 Remark
Gain or loss from disposal of non-current assets -75.20
Tax returns, deduction and exemption approved beyond the authority or
without official approval documents
Notes to the Financial Statements Page 127
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Item Amount in 2021 Remark
Government grants included in the current profit or loss (except for
government grants closely related to the enterprise business, obtained 843,734.25
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
Gain or loss on exchange of non-monetary assets
Gain 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
Gain or loss on debt restructuring
Enterprise reorganizing expenses, such as employee accommodation
costs and integration expenses, etc.
Gain 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
Gain or loss on contingencies irrelevant to normal business operation of
the Company
Gain 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 and
contractual assets to separate impairment test
Gain or loss from the external entrusted loans
Notes to the Financial Statements Page 128
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Item Amount in 2021 Remark
Gain 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
-36,041.53
above-mentioned items
Other profit and loss items that meet the definition of non-recurring
profit and loss 1,440,688.05
Sub-total 2,248,305.57
Affected amount of income tax
Affected amount of minority equity (after tax)
Total 2,248,305.57
14.2 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
-3.0511 -0.0055 -0.0055
Company
Net profit attributable to ordinary shareholders of the
-6.4621 -0.0120 -0.0120
Company after deducting the non-recurring profit or loss
14.3 Accounting data difference between the domestic and overseas accounting standards
There was no accounting data difference between the domestic and overseas accounting standards.
Board of Directors of
Notes to the Financial Statements Page 129
HAINAN DADONGHAI TOURISM CENTRE (HOLDINGS) CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd.
Chairman: Yuan Xiaoping
28 April 2022
Notes to the Financial Statements Page 130
