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大东海A(000613)公告正文

大东海B:2019年半年度报告(英文版) 查看PDF原文

公告日期:2019年08月10日
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. Semi-Annual Report 2019 (Full-text) Disclosure Date: 10August 2019 Section I. Important Notice, Contents and Paraphrase Important Notice: Board of Directors, Supervisory Committee, all directors, supervisors and senior executives of Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd. (hereinafter referred to as the Company) hereby confirm that there are no any fictitious statements, misleading statements, or important omissions carried in this report, and shall take all responsibilities, individual and/or joint, for the reality, accuracy and completion of the whole contents. Yuan Xiaoping, Principal of the Company, Fu Zongren, person in charger of accounting works and Fu Zongren, person in charge of accounting organ (accounting principal) hereby confirm that the Financial Report of 2019 Semi-Annual Report is authentic, accurate and complete. All directors are attending the Board Meeting for Report deliberation. The Company has no plan of cash dividends carried out, bonus issued and capitalizing of common reserves either. Concerning the forward-looking statements with future planning involved in the Report, they do not constitute a substantial commitment for investors. Investors are advised to exercise caution of investment risks. Content Semi-Annual Report 2019...... 1 Section I Important Notice adn Paraphrase......2 Section II Company Profile and Main Finnaical Indexes...... 5 Section III Summary of Company Business...... 8 Section IV Discussion andAnalysis of Operation...... 10 Section V Important Events......16 Section VI Changes in shares and particular about shareholders...... 27 Section VII Preferred Stock......31 Section VIII Particulars about Directors, Supervisors and Senior Executives......32 Section IX Corporate Bonds......33 Section X Financial Report...... 34 Section XI Documents available for reference......121 Paraphrase Items Refers to Contents CSRC Refers to China Securities Regulation Commission SSE Refers to Shenzhen Stock Exchange Company Law Refers to Company Law of The People’s Republic of China Securities Law Refers to Securities Law of The People’s Republic of China Company, the Company Refers to Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd. Article ofAssociation Refers to Article ofAssociation of Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd. Shareholders’General Meeting Refers to Shareholders’General Meeting of Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd. Board Refers to Board of Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd. Supervisory Committee Refers to Supervisory Committee of Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd. Yuan Refers to CNY/RMB Risk Warning Securities Times, Hong Kong Commercial Daily and Juchao Website (www.cninfo.com.cn) are the media for information disclosure appointed by the Company for year of 2019, all information under the name of the Company disclosed on the above said media shall prevail. The report is prepared in bilingual versions of Chinese and English respectively, in the event of any discrepancy in understanding the two aforementioned versions, the Chinese version shall prevail. Investors are advised to exercise caution of investment risks. Section II. Company Profile and Main Financial Indexes I. Company information Short form of the stock Da donghai-A, Dadonghai-B Stock code 000613, 200613 Short form of the Stock after N/A changed Stock exchange for listing Shenzhen Stock Exchange Name of the Company (in Chinese) 海南大东海旅游中心股份有限公司 Short form of the Company (in 大东海 Chinese) Foreign name of the Company Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd Foreign name of short form of the DADONGHAI Company Legal representative Yuan Xiaoping 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 III. Others 1. Way of contact Whether registrations address, offices address and codes as well as website and email of the Company changed in reporting period or not □Applicable √ Not applicable Registrations address, offices address and codes as well as website and email of the Company have no change in reporting period, found more details inAnnual Report 2018. 2. Information disclosure and preparation place Whether information disclosure and preparation place changed in reporting period or not □Applicable √ Not applicable The newspaper appointed for information disclosure, website for semi-annual report publish appointed by CSRC and preparation place for semi-annual report have no change in reporting period, found more details inAnnual Report 2018. IV. Main accounting data and financial indexes Whether it has retroactive adjustment or re-statement on previous accounting data □ Yes √ No Current period Same period Increase/decrease in this report of last year y-o-y Operating revenue (RMB) 14,241,961.04 16,173,929.32 -11.94% Net profit attributable to shareholders of the listed company 755,974.01 1,282,165.58 -41.04% (RMB) Net profit attributable to shareholders of the listed company 595,943.55 1,282,370.56 -53.53% after deducting non-recurring gains and losses (RMB) Net cash flow arising from operating activities (RMB) 1,269,416.65 3,110,677.60 -59.19% Basic earnings per share (RMB/Share) 0.0021 0.0035 -40.00% Diluted earnings per share (RMB/Share) 0.0021 0.0035 -40.00% Weighted average ROE (%) 0.97% 1.65% -0.68% End of current End of last Increase/decrease in this period period report-end over that of last period-end Total assets (RMB) 87,407,933.32 88,197,118.07 -0.89% Net assets attributable to shareholder of listed company 78,544,670.30 77,788,696.29 0.97% (RMB) V. 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 (GenerallyAcceptedAccounting 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 (GenerallyAcceptedAccounting Principles) in the period. VI. Items and amounts of extraordinary profit (gains)/loss √Applicable □ Not applicable In RMB Item Amount Note Other 160,030.46 Clean up long-term unpaid payable Total 160,030.46 -- Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according to the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss, explain reasons □Applicable √ Not applicable In reporting period, the Company has no particular about items defined as recurring profit (gain)/loss according to the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss Section III. Summary of Company Business I. Main businesses of the company in the reporting period Whether the company needs to comply with the disclosure requirements of the particular industry No The company's main business is hotel accommodation and catering services. Procurement of goods is mainly the goods and materials necessary for hotel and catering operations by taking the principle of low price and fine quality, some goods are purchased by directly signing purchase contracts with suppliers, and some good are purchased by procurement agents. The operation are mainly including the network billing and overseas travel agency team, and supplemented by the individual travelers of non-internet marketing and business and the tourists from travel agencies. The hotel is located at the central zone of Dadonghai scenic spot in Sanya City, Hainan Province, and it has become a member of the nationwide famous hotels because of the convenient transportation, beautiful environment, long history, and rich culture. However, in recent years, the local high-, middle- and low-grade hotels or guesthouses numerously emerge, resulting in the supply much larger than the market demand, the industry competition is rather fierce, and the pressure of decline in business remains. II. Major changes in main assets 1. Major changes in main assets Major assets Note of major changes Account receivable Decreased 0.27 million Yuan over that of year beginning, mainly because funds returned increased in reporting period Other receivables Increased 0.78 million Yuan over that of year beginning, mainly because the petty cash and court fee increased at end of the period 2. Main overseas assets □Applicable √ Not applicable III. Core Competitiveness Analysis Whether or not the Company complies with disclosure requirement of the special industry No The company takes hotel accommodation and catering services as the principle works, locates at Dadonghai bay which is one of the 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-minute 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. Section IV. Discussion andAnalysis of Operation I. Introduction During the reporting period, the company realized main business income of 14,242,000 Yuan, decreased by 1,932,000 Yuan compared with the same period last year, a decrease of 11.94%; net profit of 756,000 Yuan, decreased by 526,200 Yuan compared with the same period last year, a decrease of 41.04%. During the reporting period, the Company focus on market-oriented and use marketing strategy in a flexible way to exploited the sales channel, meanwhile, strengthening enterprise culture construction as well as the employee team-building, making efforts to improve product’s quality, strictly controlling the cost management, perfect the Company’s internal control system in order to reduce the risks and consumption for more income earns and less expenditure costs, we completed the operation targets that formulated at beginning of the year basically. Main works are as: 1. Market-oriented, use marketing strategy in a flexible way to exploit the sales channel During the reporting period, the Company actively expanded the network market, the Russian market and the southwest, north, east and southern China markets in addition to further consolidating its existing customer bases oriented by markets with flexible utilization of marketing strategies. Besides, increasing cooperation was made by the Company with domestic and foreign well-known travel agencies, sales network platforms and direct-sale travel agencies in the first and second tier cities. The Company also conducted implementation of sales incentives and sales mechanism involving every staff, to increase the market share in terms of sales. 2. People-oriented, strengthen the enterprise with high-quality, strive to improve product quality and enhance the competitive-ness of enterprises In reporting period, in line with the Human-Oriented employment ideality, we continuously enriched the culture life for employees, create a harmonious working environment and strengthen the construction of enterprise culture and staff-building.At the same time, create new management mechanism, motivate and mobilized the enthusiasm, initiative and creativity of the staff. Based on the management ideal of “strengthen the enterprise with high-quality”, we constantly strengthen the hotel management and carried out skill training in pre-job for their basic information and the after-job for business ability improvement. Enhance the service standards and consciousness, as well as the sense of responsibility and quality, effectively improved the service quality and management standards, and improving the quality of the hotel and comprehensive competitiveness. 3. Strictly curb the costs and budget management, improve internal control mechanism, reducing risks and consumption, increase revenue and reduce expenditures, safety in production to maximize the interest of the enterprise During the reporting period, the Company continued to focus on financial management, improve the procurement management system, strengthen management of procurement cost control and budget management, adopt diversified means to obtain procurement price inquiry, such as network price inquiry, the hotel industry price inquiry and other measures, obtain cost inquiry from over three suppliers to select the best one, control operating costs in a scientific manner, strictly control various expense and expenditures, frequent inspection and repair to prevent waste of resources, which enabled the Company to effectively improve the reasonableness of procurement cost and cost effectiveness. Besides, human resources cost was effectively brought down due to optimized organ establishment and personnel distribution. At the same time, the Company continued to improve the internal control system, strengthen regulation and implementation of internal control system, strengthen the effective implementation of internal control work, reduce risks and consumption, increase revenue and control expenditures, emphasize production safety and improve operational efficiency, to ensure the operation safety and thus maximize the interests of the Company as a whole. In the second half of 2019, the Company continues to consolidate and expand sales channels, improve the hotel’s quality and service standards, and enhance the comprehensive competitiveness, to laying out a solid foundation for sustained, stable and healthy development of the Company. II. Main business analysis See the “I-Introduction” in “Discussion andAnalysis of Operation” Change of main financial data on a y-o-y basis In RMB Same period Y-o-y Current period of last year increase/de Reasons for changes crease Operation revenue 14,241,961.04 16,173,929.32 -11.94% The main building of the hotel is decorating and renovating since May The dining room was closed for decoration Operation cost 5,514,477.93 6,000,063.36 -8.09% due to the decoration in main building of the hotel Sales expenses 2,809,991.94 2,800,956.10 0.32% Normal changes Administrative expenses 5,071,800.21 5,356,455.21 -5.31% Wages expenses declined Financial cost -133,732.09 17,563.19 -861.43% Increase in interest on deposits Net cash flow arising from 1,269,416.65 3,110,677.60 -59.19% Decrease in operating income operation activities Net cash flow arising from -522,876.00 -1,040,626.12 -74.38% More account paid for projects at same investment activities period of last year Net increase of cash and cash 746,540.65 2,070,051.48 -63.94% Decrease in operating income equivalent Major changes on profit composition or profit resources in reporting period □Applicable √Not applicable No changes on profit composition or profit resources in reporting period Constitution of main business In RMB Increase/decrea Increase/decrea Increase/decrea Operating Operating Gross profit se of operating se of operating se of gross revenue cost ratio revenue y-o-y cost y-o-y profit ratio y-o-y According to industries Tourism catering 14,241,961.04 5,514,477.93 61.28% -11.94% -8.09% -2.58% service According to products Room revenue 11,108,639.78 4,532,724.45 59.20% -12.55% -2.84% -6.43% Catering entertainment 1,562,368.88 744,491.70 52.35% -18.28% -32.16% 22.89% revenue Rental revenue 1,570,952.38 237,261.78 84.90% 0.78% 0.00% 0.14% According to region 14,241,961.04 5,514,477.93 61.28% -11.94% -8.09% -2.58% III. Analysis of the non-main business √Applicable □ Not applicable In RMB Amount Ratio in total profit Note Whether be sustainable Non operating 160,030.46 21.17% Clean up long-term unpaid payable No sustainable income IV. Assets and liability 1. Major changes of assets composition In RMB Current period-end Same period-end last year Ratio Ratio in total Ratio in total change Notes of major changes Amount assets Amount assets s Monetary fund 16,110,895.95 18.43% 11,751,658.64 13.36% 5.07% Continuous net increase in cash since last year Account 155,986.88 0.18% 266,236.51 0.30% -0.12% Return of the receivables receivable increased Inventory 191,693.57 0.22% 264,620.69 0.30% -0.08% Normal changes Investment real 8,147,218.65 9.32% 9,621,742.21 9.80% -0.48% Depreciation amortization estate Fix assets 34,997,520.16 40.04% 38,017,199.39 43.22% -3.18% Depreciation Other account 1,242,181.64 1.42% 800,136.44 0.91% 0.51% Advance payment increased receivable Other current 2,125,619.16 2.43% 2,195,699.54 2.50% -0.07% Normal changes assets Long-term amortization 2,240,879.25 2.56% 2,678,016.88 3.04% -0.48% Amortization expenses 2. Assets and liability measured by fair value □Applicable √ Not applicable 3. Assets right restriction till end of reporting period Nil V. Investment 1. Overall situation √Applicable □ Not applicable Current investment amount (RMB) Same period of last year (RMB) Changes (+,-) 1,000,000.00 1,000,000.00 0.00% 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 Period VI. Sales of major assets and equity 1. Sales of major assets □Applicable √ Not applicable The Company had no sales of major assets in the reporting period. 2. Sales of major equity □Applicable √ Not applicable VII. Analysis of main holding company and stock-jointly companies □Applicable √ Not applicable The Company had no information of main holding company and stock-jointly companies disclosed in the reporting period. VIII. Structured vehicle controlled by the Company □Applicable √ Not applicable IX. Prediction of business performance from January – September 2019 Estimation on accumulative net profit from the beginning of the year to the end of next report period to be loss probably or the warning of its material change compared with the corresponding period of the last year and explanation on reason □Applicable √ Not applicable X. Risks and countermeasures (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 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 improve 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 managers and skill technicians. (4) Operational risks of main business With the ceaseless development of global tourist industry constantly and ceaseless rising of high-class, middle-class and low-class hotels, the tourist sources keep shunting, and the competition of tourism service industry in Sanya becomes increasingly fierce. While the main business of the Company is just a small-scale hotel, as the main business is single and the business scope is limited, the tourist market conditions and tourist quantity directly make significant affects on the company performance. Countermeasure: made a scientific management and decision-making procedures, strengthen the awareness of risk prevention, building and improving relevant mechanism and 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, we continued to develop financing channels, expanding operation projects, enrich the industrial structure for increasing the profit increasing point. Section V. Important Events I. In the report period, the Company held annual general meeting and extraordinary shareholders’ general meeting 1. Annual General Meeting in the report period Session of Type Ratio of investor Date Date of disclosure Index of disclosure meeting participation The “Resolution Notice of Annual General AGM of Annual Meeting of 2018” (No.: 2019-012) published on 2018 general 31.66% 2019-3-22 2019-3-23 Securities Times, Hong Kong Commercial Daily meeting and Juchao website (http://www.cninfo.com.cn) dated 23 March 2019 respectively 2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore □Applicable √ Not applicable II. Profit distribution and capitalization of capital reserves in 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 semi-annual year III. 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 Commit Comm Commitments Promise commitme Content of commitments ment itment Implement date term ation nts On May 30, 2007, Luoniushan Co., Ltd. made The Commitm commitments in the Company’s "Instructions original Luonius ents for for reform of non-tradable shares" (Revision) 6 plans of Commitments for han Share and "Instructions for reform of non-tradable 2017-06 month material Share Merger Reform Co., Merger shares" (Abstract of revision) that in view of -27 s assets Ltd Reform Dadonghai Company’s losses in successive reorganizat years and on the verge of delisting, in order to ion was reverse the company's business difficulties, terminated improve profitability and recover the continuous business capacity, 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 commitment Other commitments for medium and small shareholders Completed on time N (Y/N) The company’s stock has been suspended since the opening on February 15, 2017 due to the planning and fulfillment commitments of Luoniushan. On August 13, 2017, the consideration of the 11th interim meeting of the eighth board of directors of the company failed to approve the “Proposal on Major Asset Purchase and Related Transaction Report (Plan) of Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd.” and other 11 proposals. On August 15, 2017, the company issued an announcement to terminate this major asset restructuring, and the company’s stock resumed trading on August 17th. Currently, the company has no information that should be disclosed but not disclosed. If the commitments is On December 4, 2017, the board of directors and the board of supervisors of the company reviewed and not fulfilled on time, approved the Proposal on the Change of Commitment Period of the First Majority Shareholder of the shall explain the specify Company. Luoniushan Co., Ltd., the company’s first majority shareholder planned for a two-year extension reason and the next for the time limit of the company’s restructuring commitment since December 27, 2017, that is, the work plan deadline for the implementation of the restructuring commitment was changed to December 26, 2019. On December 22, 2017, the company’s fourth extraordinary shareholders’ meeting in 2017 did not approve the proposal. On January 31, 2018, the company received the Notice on Planning for Suspension of Major Events sent by Luoniushan Co., Ltd., the company’s largest shareholder, to plan and prepare the major issues related to the company. Upon application by the company, the company’s stock (stock short name: Dadonghai A, Dadonghai B, stock code: 000613, 200613) was suspended since the opening on January 31, 2018. Upon application by the company, the company’s stock resumed trading on February 8, 2018, and was transferred to the major asset restructuring since the opening on February 14, 2018. On June 25, 2018, the company held the third interim meeting of the ninth board of directors which reviewed and approved the Proposal on Terminating the Planning for Major Asset Restructuring. After careful study, the board of directors of the company decided to terminate the planning for this major asset restructuring. IV. Engagement and non-reappointment of CPA Whether the semi-annual report was audited or not □Yes √ No The semi-annual report of the Company had no audited. V. Explanation from the Board and Supervisory Committee for “Qualified Opinion” from the CPA □Applicable √ Not applicable VI. Explanation on “Qualified Opinion” of previous year from the Board □Applicable √ Not applicable VII. Bankruptcy reorganization □Applicable √ Not applicable In reporting period, the Company has no bankruptcy reorganization occurred. VIII. Lawsuits Significant lawsuits and arbitration of the Company √Applicable □ Not applicable Whet her Executi to Litigation on of Date Amount Form (Arbitratio Litigati of Basic Situation of Involve an Litigation (Arbitration) Progress n) Trial on Disc Disclosure Index Litigation (Arbitration) d Esti Results (Arbitra losur (Yuan) mate and Impact tion) e d Judgme Liabi nt lity The plaintiff, China The plaintiff, China Cinda Asset The first 2018 Announcement on CindaAsset Management 3,431.1 No Management Co., Ltd. Hainan instance N/A -11- Significant Co., Ltd. Hainan Branch, 7 Branch, sued the defendants, Hainan judgment 22; Litigation sued the defendants, Dadonghai Tourism Centre (Holdings) dismissed 2019 (Announcement Hainan Dadonghai Co., Ltd. and Sanya Yueya Real Estate the claim -1-5; No.: 2018-061) Tourism Centre Development Corporation, for a of the 2019 published by (Holdings) Co., Ltd. and financial loan contract dispute, plaintiff -1-3 Securities Times, Sanya Yueya Real Estate appealing to Hainan Dadonghai China 1; Hong Kong Development Tourism Centre (Holdings) Co., Ltd. Cinda 2019 Commercial Daily Corporation, for a to repay the loan of 5 million yuan Asset -4-2 and financial loan contract and the loan interest of 29,311,700 Manageme www.cninfo.com.c dispute, appealing to yuan temporarily calculated to April nt Co., n. Hainan Dadonghai 30, 2018, Sanya Yueya Real Estate Ltd. Announcement on Tourism Centre Development Corporation assumes Hainan Significant (Holdings) Co., Ltd. to the joint and several liability, and the Branch, Litigation Progress repay the loan of 5 two defendants bear litigation costs. In and the (Announcement million Yuan and the loan the course of the litigation, the case No.: 2019-001) interest of 29,311,700 plaintiff added the company as a acceptance published by Yuan temporarily co-defendant and required the court to fee and Securities Times, calculated toApril 30, order the company to assume joint and property Hong Kong 2018, Sanya Yueya Real several liability for the above debts of preservatio Commercial Daily Estate Development Hainan Dadonghai Tourism Centre n and Corporation assumes the (Holdings) Co., Ltd. For the application www.cninfo.com.c joint and several liability, above-mentioned case of principal of fee were n. and the two defendants 5 million yuan, the verdict of Civil borne by Announcement on bear litigation costs. In Judgment (2018) No.Q02MC76 from China Significant the course of the the Intermediate People’s Court Sanya Cinda Litigation Progress litigation, the plaintiff dismissed the claim of the plaintiff Asset (Announcement added the company as a China Cinda Asset Management Co., Manageme No.: 2019-003) co-defendant and Ltd. Hainan Branch, and the case nt Co., published by required the court to acceptance fee and property Ltd. Securities Times, order the company to preservation application fee were Hainan Hong Kong assume joint and several borne by China Cinda Asset Branch. Commercial Daily liability for the above Management Co., Ltd. Hainan The and debts of Hainan Branch. The plaintiff Hainan Cinda judgment www.cninfo.com.c Dadonghai Tourism refused to accept the first-instance of the first n. Centre (Holdings) Co., judgment and appealed to the Hainan instance Announcement on Ltd. Higher People’s Court. On March 28, has no Significant 2019, the verdict of Civil Judgment impact on Litigation Progress (2019) No.QMZ96 from Hainan the (Announcement Higher People’s Court dismissed the company,T No.: 2019-013) appeal and upheld the original he second published by judgment; the second-instance case instance Securities Times, acceptance fee was borne by Hainan upheld the Hong Kong Cinda; this judgment is the final first-instan Commercial Daily judgment. ce and judgment, www.cninfo.com.c therefore, the lawsuit n. had no effect on the company’s current profit and future profit. The company Hainan Dadonghai has written Tourism Centre Group off the Co., Ltd. borrowed 2.76 borrowing million yuan and 4.55 s of the million yuan from case in full Hainan Dadonghai amount in Announcement on Tourism Centre 2008. At Significant (Holdings) Co., Ltd. on present, Litigation October 16, 1996 and On June 3, 2019, the company the case (Announcement December 26, 1996 received the "Notice of Accepting has not No.: 2019-017) respectively. The two Case" (2019) No. Q0271MC5185 been 2019 published by borrowings totaled 7.31 731 No issued by the court, and the court has heard, and N/A -06- Securities Times, million yuan and haven’t accepted the case. At present, the case the 04 Hong Kong been repaid yet. The has not yet been heard. company Commercial Daily company submitted a is unable and "Civil Complaint" and to judge www.cninfo.com.c related evidence the impact n. materials to the Sanya of this Suburban People's Court lawsuit on (hereinafter referred to as the the "Court"). company's current profit or future profit. Other lawsuits √Applicable □ Not applicable Amoun Whethe Litigation Execution Date t r to Litigation (Arbitration) of of Discl Basic Situation of Litigation (Arbitration) Involv Form (Arbitration Trial Results Litigation Discl osure ed an ) Progress and Impact (Arbitratio osure Index (Yuan) Estimat n) ed Judgment Liabilit y On May 31, 2018, the Sanya Local Taxation Bureau Social Security Fee Collection and Administration Bureau issued On July 7, a notice of payment deadline for social insurance 2019, the premiums to the company's South China Hotel, ordering company At present, the company's South China Hotel to pay the unpaid social received the case has insurance premiums and late payment fees and interest the "Notice not been from January 1, 2012 to December 31, 2012 of totaling of heard, and 286,200.36 yuan. On May 17, 2018, the Sanya Local Accepting the company Taxation Bureau deducted the money from the deposit of Cases" is unable to the company's South China Hotel. According to the issued by judge the agreement of the "Responsibility Letter of the Target 28.62 No the court, impact of N/A - - Management of South China Hotel" signed by South and the this lawsuit China Hotel and Sun Hongjie, Sun Hongjie should be court has on the responsible for the social insurance premium incurred accepted company's from May 1, 2011 to April 30, 2016. The unpaid social the case. At current ’ insurancepremium occurred during Sun Hongjie s target present, the profit or management responsibility, and Sun Hongjie should case has future profit. undertake the payment. So far, Sun Hongjie has not repaid not yet the advance payment to the company's South China Hotel. been heard. To this end, the company's South China Hotel appealed to the court. IX. Penalty and rectification □Applicable √ Not applicable The Company has no penalty and rectification in the Period X. Integrity of the company and its controlling shareholders and actual controllers □Applicable √ Not applicable XI. Implementation of the company’s stock incentive plan, employee stock ownership plan or other employee incentives □Applicable √ Not applicable During the reporting period, the company has no stock incentive plan, employee stock ownership plan or other employee incentives that have not been implemented. XII. Major related transaction 1. Related transaction with routine operation concerned √Applicable □Not applicable Tradi Whet Relate ng her Da d Propo limit over Availab te Inde Type Conte Relate transa rtion the Clearin Relati of nt of Pricin d ction in appro appro g form le of x of Relate onshi relate relate g transa amou simila ved for similar dis discl d party p d d princi ction nt (in r ved related transa transa ple price 10 transa (in 10 limite transact market clo osur ction ction thousa ctions thousa ion price sur e nd d or Yuan) nd not e Yuan) (Y/N) Same as Same First the as the Luoniu majori Consu Acco transact shan Marke Marke transact ion Co., ty mptio mmod t price t price 12.52 0.88% 0 Y ion with with Ltd. shareh n ation non-rel non-rel older ated ated party party Total -- -- 12.52 -- 0 -- -- -- -- -- Detail of sales return with major amount involved N/A Report the actual implementation of the daily related transactions which were projected about their total amount by N/A types during the reporting period Reasons for major differences between trading price and market Not applicable reference price 2. Related transactions by assets acquisition and sold □Applicable √ Not applicable No related transactions by assets acquisition and sold for the Company in reporting period 3. Related transactions of mutual investment outside □Applicable √ Not applicable No main related transactions of mutual investment outside for the Company in reporting period 4. Contact of related credit and debt □Applicable √ Not applicable No contact of related credit or debt for the Company in the reporting period 5. Other material related transactions □Applicable √Not applicable The Company has no other material related transactions in the period XIII. Non-business capital occupying by controlling shareholders and its related parties □Applicable √ Not applicable No non-business capital occupied by controlling shareholders and its related parties in Period XIV. Major contract and implantation 1. Trusteeship, contract and leasing (1) Trusteeship □Applicable √ Not applicable The Company had no trusteeship in the reporting period. (2) Contract □Applicable √ Not applicable The Company had no contract in the reporting period. (3) Leasing √Applicable □ Not applicable Note of leasing Item Tenant Lease life Term of lease B/F of the Hotel Ma Ming (Hainan Hangpai Food Co., Ltd.) 5 years 2016-01-01 to 2020-12-31 Shopping mall –B/F Xu Jipeng 3 years 2016-11-15 to 2019-11-14 A/F ground floor Chen Junwei 3 years 2016-03-01 to 2019-02-28 Seaside stall and wood house Sanya Leda Food Management Co., Ltd. 5 years 2018-01-01 to 2022-12-31 Seaside locker room Zhong Zhengao 3 years 2016-12-01 to 2019-11-30 Multi-functional meeting room Sanya Haolide International Travel Agency Co., Ltd. 5 years 2017-10-01 to 2022-09-30 Gains/losses to the Company from projects that reached over 10% in total profit of the Company in reporting period √Applicable □ Not applicable Leasing Leasin Basis The Whet assets g for impact her Asso involved Lease income determi of be ciatio Name of Name of the Leasing in the Lease start terminatio (in 10 ning leasing relate n lessor leasing party assets amount date n date thousa the income d relati (in 10 nd leasing on the trans on thousand income compan actio Yuan) Yuan) y ns The Ma Ming B/F 2016-01-0 2020-12-3 Contrac Compan (Hainan Hangpai restaurant 1,886 37.8 Increase No N/A Food Co., Ltd.) in first 1 1 t income y floor The Sanya Leda Seaside 2018-01-0 2022-12-3 Contrac Compan Food stall and 653 72.5 Increase No N/A Management wood 1 1 t income y Co., Ltd. house The Seaside 2016-12-0 2019-11-3 Contrac Compan Zhong Zhengao locker 10 18 Increase No N/A room 1 0 t income y The Sanya Haolide Multi-fun Compan International ctional 190 2017-10-0 2022-09-3 15 Contrac Increase No N/A Travel Agency meeting 1 0 t income y Co., Ltd. room 2. Major Guarantee □Applicable √ Not applicable The Company had no guarantee in the reporting period. 3. Other material contracts √Applicable □ Not applicable The The N Trans The The book assesse a actio Whet The name of name Date value d m The n her Relev perfo the of the Contr of of the value of e base Prici price Relat ance rman Date Index contract contract act contr assets the of date ng (in ed relati ce by of of ing ed objec act involve assets ev eval Princ 10 Trans onshi the discl discl compan compan t signi d in the involve al uati iple thous actio p end osure osure y y ng contrac d in the ua on and ns or of the t(in 10 contract tio yuan) not term thousan (in 10 n d yuan) thousan in d yuan) sti tut io n Hainan Deco The Dadong ration pro Haikou proje hai Xindec ct of Non- jec Tourism heng t Constru the correl Centre ction Build 2019- N/ Mark ative pro (Holdin and - - - et 890 No cee - - Installat ing-A 05-10 A relati gs) Co., ion of price onshi din Ltd Engine g ering South p South Co., Chin nor China Ltd. ma Hotel a lly Hotel Note: The contract does not constitute a major contract matter. The 4th meeting of the Ninth Board of Directors of the Company reviewed and approved the “Proposal on the decoration and renovation of the Building A of the South China Hotel”. At the same time, the board of directors has authorized the company to handle matters including, but not limited to, bidding for the matter and signing of relevant contracts. XV. Social responsibility 1. Major environmental protection Listed company and its subsidiary belong to the key pollution enterprise listed by Department of Environmental Protection: No 2. Execution of social responsibility of targeted poverty alleviation: Nil XVI. Explanation on other significant events √Applicable □ Not applicable 1. The Lawyer’s Letter received by the Company: by preliminary accounting from Sanya Power Bureau, the 10313373 Kwh electricity was understated under the name of South China Hotel from July 2006 to April 2016. The Company is communicated and negotiates with Sanya Power Bureau in the above mentioned event without negotiation results so far. 2. The company received the Lawyer’s Letter: Main contents of the Lawyer’s Letter: the financial loan dispute between the company’s joint stock company, Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd. (hereinafter referred to as “Dadonghai Holdings”), and its original creditor, China Construction Bank Sanya Branch (hereinafter referred to as “CCB Sanya Branch”), its new creditor China Cinda Asset Management Co., Ltd. Hainan Branch (hereinafter referred to as “Hainan Cinda”) currently makes the right to recover, the two debts include: (1) the principal of 1.1 million Yuan and interest of 5,598,300 Yuan temporarily calculated to April 30, 2018, totaling 6,698,300 Yuan, and Hainan Cinda is reported to have dropped the case. (2)the principal of 5 million Yuan and interest of 29,311,700 Yuan temporarily calculated to April 30, 2018, totaling 34,311,700 Yuan. If Dadonghai Holdings is incapable of handling the liquidation, Hainan Cinda will claim that the company should be jointly and severally liable for the above debts of Dadonghai Holdings. During the reporting period, the first instance ruling rejected Hainan Cinda’s claim and the final judgment of the second instance shall be upheld by the judgment of the first instance. XVII. Significant event of subsidiary of the Company □Applicable √ Not applicable Section VI. Particulars about Changes in Shares and Shareholders I. Changes in Share Capital 1. Changes in Share Capital In Share Before the Change Increase/Decrease in the Change After the Change (+, -) B o n Capital S Proportio New u ization Ot u Amount n shares s of her bt Amount Proportion issued s public s ot h reserve al ar es I. Restricted shares 10,454,400 2.87% 0 0 10,454,400 2.87% 1. State-owned shares 2. State-owned corporate 2,323,200 0.64% 0 0 2,323,200 0.64% shares 3. Other domestic shares 8,131,200 2.23% 0 0 8,131,200 2.23% Including: Domestic 7,900,200 2.17% 0 0 7,900,200 2.17% legal person shares Domestic natural person 231,000 0.06% 0 0 231,000 0.06% shares II. Unrestricted shares 353,645,600 97.13% 0 0 353,645,600 97.13% 1. RMB common shares 265,645,600 72.96% 0 0 265,645,600 72.96% 2.Domestically listed 88,000,000 24.17% 0 0 88,000,000 24.17% foreign shares III. Total shares 364,100,000 100.00% 0 0 364,100,000 100.00% Reasons for share changed □Applicable √ Not applicable Approval of share changed □Applicable √ Not applicable Ownership transfer of share changes □Applicable √ Not applicable Implementation progress of the share repurchases □Applicable √ Not applicable Implementation progress of the reduction of repurchases shares by centralized bidding □Applicable √ Not applicable Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to common shareholders of Company in latest year and period □Applicable √ Not applicable Other information necessary to disclose or need to disclosed under requirement from security regulators □Applicable √ Not applicable 2. Changes of restricted shares □Applicable √ Not applicable II. Securities issuance and listing □Applicable √ Not applicable III. Amount of shareholders of the Company and particulars about shares holding In Share Total common stock Total preference shareholders with voting rights recovered at end of shareholders in reporting 36,595 reporting period 0 period-end Particulars about common shares held above 5% by shareholders or top ten common shareholders Number of share Number of Amount pledged/fr Proporti common Changes of Amount of ozen Full name of Shareholders Nature of on of shares held in report restricted un-restricted A shareholder shares held at period shares shares held State m period-end held of o share u nt 6 Domestic non Pled 3, Luoniushan Co., Ltd. state-owned 17.55% 63,885,980 0 0 63,885,980 ged 8 corporate 8 5, 9 8 0 Yang Meiqin Domestic nature 4.47% 16,279,028 0 0 16,279,028 person PanAnjie Domestic nature 4.01% 14,593,598 0 0 14,593,598 person Hainan Ya’an Residence Property Domestic non Service Co., Ltd. state-owned 2.25% 8,205,800 0 0 8,205,800 corporate Chen Jinlian Domestic nature 2.13% 7,766,400 0 0 7,766,400 person HGNH International Asset Management Co., Ltd – Foreign corporate 1.23% 4,495,902 0 0 4,495,902 customer deposit PanAiping Domestic nature 1.13% 4,110,738 0 0 4,110,738 person China Investment Securities (HK) Co., Ld. – customer Foreign corporate 0.99% 3,622,300 0 0 3,622,300 deposit Zhang Fengxiu Domestic nature 0.90% 3,291,372 -610000 0 3,291,372 person Shenwan Hongyuan Securities Foreign corporate 0.84% 3,056,390 0 0 3,056,390 (Hong Kong) Co., Ltd. Strategy investors or general legal person becomes top N/A 10 common shareholders due to rights issued Among the above shareholders, Hainan Ya’an Residence Property Service Co., Ltd. is the wholly-owned subsidiary of Luoniushan Co., Ltd; Yang Meiqin, Pan Explanation on associated relationship or accordant Anjie, Chen Jinlian and Pan Aiping are the persons acting in concert; the action among the aforesaid shareholders Company is unknown whether there exists associated relationship or belongs to the consistent actor regulated by the Management Measure of Information Disclosure on Change of Shareholding for Listed Company among the other shareholders. Particular about top ten shareholders with un-restrict common shares held Amount of Type of shares un-restrict Shareholders’name common shares held at Type Amount Period-end Luoniushan Co., Ltd. 63,885,980 RMB common share 63,885,980 Yang Meiqin 16,279,0 Domestically listed foreign 16,279,028 28 share PanAnjie 14,593,5 Domestically listed foreign 14,593,598 98 share Hainan Ya’an Residence Property Service Co., Ltd. 8,205,80 RMB common share 8,205,800 0 Chen Jinlian 7,766,40 Domestically listed foreign 7,766,400 0 share HGNH International Asset Management Co., Ltd – 4,495,90 RMB common share 4,495,902 customer deposit 2 PanAiping 4,110,73 Domestically listed foreign 4,110,738 8 share China Investment Securities (HK) Co., Ld. – customer 3,622,30 RMB common share 3,622,300 deposit 0 Zhang Fengxiu 3,291,37 RMB common share 3,291,372 2 Shenwan Hongyuan Securities (Hong Kong) Co., Ltd. 3,056,39 Domestically listed foreign 3,056,390 0 share Among the above shareholders, Hainan Ya’an Residence Property Service Co., Expiation on associated relationship or consistent Ltd. is the wholly-owned subsidiary of Luoniushan Co., Ltd. Yang Meiqin, Pan actors within the top 10 un-restrict common stock Anjie, Chen Jinlian and Pan Aiping are the persons acting in concert; the shareholders and between top 10 un-restrict common Company is unknown whether there exists associated relationship or belongs to stock shareholders and top 10 common stock the consistent actor regulated by the Management Measure of Information shareholders Disclosure on Change of Shareholding for Listed Company among the other shareholders. Explanation on shareholders involving margin business about top ten common stock shareholders N/A with un-restrict shares held Whether top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held have a buy-back agreement dealing in reporting period □ Yes √ No The top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held of the Company have no buy-back agreement dealing in reporting period. IV. Changes of controlling shareholders or actual controller Changes of controlling shareholders in reporting period □Applicable √ Not applicable Changes of controlling shareholders had no change in reporting period. Changes of actual controller in reporting period □Applicable √ Not applicable Changes of actual controller in reporting period had no change in reporting period. Section VII. Preferred Stock □Applicable √ Not applicable The Company had no preferred stock in the Period. Section VIII. Particulars about Directors, Supervisors, Senior Executives and Employees I. Changes of shares held by directors, supervisors and senior executives □Applicable √ Not applicable No change of shares held by directors, supervisors and senior executives, found more details inAnnual Report 2018. II. Changes of directors, supervisors and senior executives □Applicable √ Not applicable No changes of directors, supervisors and senior executives, found more details inAnnual Report 2018. Section IX. Corporate Bond Whether the Company has a corporation bonds that issuance publicly and listed on stock exchange and without due on the date when semi-annual report approved for released or fail to cash in full on due No Section X. Financial Report I. Audit report Whether the semi annual report is audited □ Yes √ No The company's semi annual financial report has not been audited. II. Financial Statement Expressed in Renminbi unless otherwise stated 1. Balance sheet Prepared by HAINAN DADONGHAI Tourism Centre (HOLDINGS) CO., LTD. In RMB Item 2019-6-30 2018-12-31 Current assets: Monetary funds 16,110,895.95 15,364,355.30 Settlement provisions Capital lent Transactional financial assets Financial assets measured by fair value and with variation reckoned into current gains/losses Derivative financial assets Note receivable Account receivable 155,986.88 426,434.87 Receivable financing Accounts paid in advance 396,882.60 Insurance receivable Reinsurance receivables Contract reserve of reinsurance receivable Other account receivable 1,242,181.64 458,242.73 Including: Interest receivable Dividend receivable Buying back the sale of financial assets Inventories 191,693.57 221,390.19 Contractual assets Assets held for sale Non-current asset due within one year Other current assets 2,125,619.16 1,846,219.79 Total current assets 20,223,259.80 18,316,642.88 Non-current assets: Loans and payments on behalf Debt investment Finance asset available for sales Other debt investment Held-to-maturity investment Long-term account receivable Long-term equity investment Investment in other equity instrument Other non-current financial assets Investment real estate 8,147,218.65 8,384,480.43 Fixed assets 34,997,520.16 36,497,869.65 Construction in progress Productive biological asset Oil and gas asset Right-of-use assets Intangible assets 21,799,055.46 22,205,249.04 Expense on Research and Development Goodwill Long-term expenses to be apportioned 2,240,879.25 2,792,876.07 Deferred income tax asset Other non-current asset Total non-current asset 67,184,673.52 69,880,475.19 Total assets 87,407,933.32 88,197,118.07 Current liabilities: Short-term loans Loan from central bank Capital borrowed Transactional financial liability Financial liability measured by fair value and with variation reckoned into current gains/losses Derivative financial liability Note payable Account payable 1,077,017.43 1,607,835.81 Accounts received in advance 779,681.12 1,291,293.05 Selling financial asset of repurchase Absorbing deposit and interbank deposit Security trading of agency Security sales of agency Wage payable 1,827,967.06 2,841,262.35 Taxes payable 745,943.66 450,861.87 Other account payable 2,942,968.71 2,727,483.66 Including: Interest payable Dividend payable Commission charge and commission payable Reinsurance payable Contractual liability Liability held for sale Non-current liabilities due within one year Other current liabilities Total current liabilities 7,373,577.98 8,918,736.74 Non-current liabilities: Insurance contract reserve Long-term loans 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 Total non-current liabilities 1,489,685.04 1,489,685.04 Total liabilities 8,863,263.02 10,408,421.78 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 54,142,850.01 54,142,850.01 Less: Inventory shares Other comprehensive income Reasonable reserve Surplus public reserve Provision of general risk Retained profit -339,698,179.71 -340,454,153.72 Total owner’s equity attributable to parent company 78,544,670.30 77,788,696.29 Minority interests Total owner’s equity 78,544,670.30 77,788,696.29 Total liabilities and owner’s equity 87,407,933.32 88,197,118.07 Legal Representative: Yuan Xiaoping Accounting Principal:Fu Zongren Accounting Firm’s Principal: Fu Zongren 2. Balance sheet of parent company In RMB Item 2019-6-30 2018-12-31 Current assets: Monetary funds 15,610,097.59 14,864,055.73 Transactional financial assets Financial assets measured by fair value and with variation reckoned into current gains/losses Derivative financial assets Note receivable Account receivable 155,986.88 426,434.87 Receivable financing Accounts paid in advance 396,882.60 Other account receivable 1,242,181.64 458,242.73 Including: Interest receivable Dividend receivable Inventories 191,693.57 221,390.19 Contractual assets Assets held for sale Non-current assets maturing within one year Other current assets 2,125,619.16 1,846,219.79 Total current assets 19,722,461.44 17,816,343.31 Non-current assets: Debt investment Available-for-sale financial assets Other debt investment Held-to-maturity investments 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 8,147,218.65 8,384,480.43 Fixed assets 34,997,520.16 36,497,869.65 Construction in progress Productive biological assets Oil and natural gas assets Right-of-use assets Intangible assets 21,799,055.46 22,205,249.04 Research and development costs Goodwill Long-term deferred expenses 2,240,879.25 2,792,876.07 Deferred income tax assets Other non-current assets Total non-current assets 68,184,673.52 70,880,475.19 Total assets 87,907,134.96 88,696,818.50 Current liabilities Short-term borrowings Transactional financial liability Financial liability measured by fair value and with variation reckoned into current gains/losses Derivative financial liability Notes payable Account payable 1,077,017.43 1,607,835.81 Accounts received in advance 779,681.12 1,291,293.05 Contractual liability Wage payable 1,827,967.06 2,841,262.35 Taxes payable 745,943.66 450,861.87 Other accounts payable 3,442,669.14 3,226,952.36 Including: Interest payable Dividend payable Liability held for sale Non-current liabilities due within one year Other current liabilities Total current liabilities 7,873,278.41 9,418,205.44 Non-current liabilities: Long-term loans 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 Total non-current liabilities 1,489,685.04 1,489,685.04 Total liabilities 9,362,963.45 10,907,890.48 Owners’equity: Share capital 364,100,000.00 364,100,000.00 Other equity instrument Including: preferred stock Perpetual capital securities Capital public reserve 54,142,850.01 54,142,850.01 Less: Inventory shares Other comprehensive income Special reserve Surplus reserve Retained profit -339,698,678.50 -340,453,921.99 Total owner’s equity 78,544,171.51 77,788,928.02 Total liabilities and owner’s equity 87,907,134.96 88,696,818.50 3. Consolidated profit statement In RMB Item Semi-annual of Semi-annual of 2018 2019 I. Total operating income 14,241,961.04 16,173,929.32 Including: Operating income 14,241,961.04 16,173,929.32 Interest income Insurance gained Commission charge and commission income II. Total operating cost 13,646,017.49 14,891,558.76 Including: Operating cost 5,514,477.93 6,000,063.36 Interest expense Commission charge and commission expense Cash surrender value Net amount of expense of compensation Net amount of withdrawal of insurance contract reserve Bonus expense of guarantee slip Reinsurance expense Tax and extras 383,479.50 716,520.90 Sales expense 2,809,991.94 2,800,956.10 Administrative expense 5,071,800.21 5,356,455.21 R&D expense Financial expense -133,732.09 17,563.19 Including: Interest expenses Interest income 152,697.12 22,729.87 Add: other income 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 “-”) 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 “-”) Losses of devaluation of asset (Loss is listed with “-”) Income from assets disposal (Loss is listed with “-”) III. Operating profit (Loss is listed with “-”) 595,943.55 1,282,370.56 Add: Non-operating income 160,030.46 273.00 Less: Non-operating expense 477.98 IV. Total profit (Loss is listed with “-”) 755,974.01 1,282,165.58 Less: Income tax expense V. Net profit (Net loss is listed with “-”) 755,974.01 1,282,165.58 (i) Classify by business continuity 1.continuous operating net profit (net loss listed with ‘-”) 755,974.01 1,282,165.58 2.termination of net profit (net loss listed with ‘-”) (ii) Classify by ownership 1.Net profit attributable to owner’s of parent company 755,974.01 1,282,165.58 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 that can transfer to gain/loss 2.Change of fair value of other debt investment 3.gain/loss of fair value changes for available-for-sale financial assets 4.Amount of financial assets re-classify to other comprehensive income 5.Gain/loss of held-to-maturity investments that re-classify to available-for-sale financial asset 6.Credit impairment provision for other debt investment 7.Cash flow hedging reserve 8.Translation differences arising on translation of foreign currency financial statements 9.Other Net after-tax of other comprehensive income attributable to minority shareholders VII. Total comprehensive income 755,974.01 1,282,165.58 Total comprehensive income attributable to owners of parent Company 755,974.01 1,282,165.58 Total comprehensive income attributable to minority shareholders VIII. Earnings per share: (i) Basic earnings per share 0.0021 0.0035 (ii) Diluted earnings per share 0.0021 0.0035 As for the enterprise combination under the same control, the net profit achieved by the combined party before consolidation was 0 Yuan in the period while 0 Yuan achieved last period Legal Representative: Yuan Xiaoping Accounting Principal:Fu Zongren Accounting Firm’s Principal: Fu Zongren 4. Profit statement of parent Company In RMB Item Semi-annual of Semi-annual of 2019 2018 I. Operating income 14,241,961.04 16,173,929.32 Less: Operating cost 13,645,516.28 14,891,558.76 Taxes and surcharge 383,479.50 716,520.90 Sales expenses 2,809,991.94 2,800,956.10 Administration expenses 5,071,800.21 5,356,455.21 R&D expenses Financial expenses -133,233.30 17,563.19 Including: interest expenses Interest income 151,938.33 22,729.87 Add: other income Investment income (Loss is listed with “-”) 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 “-”) Losses of devaluation of asset (Loss is listed with “-”) Income on disposal of assets (Loss is listed with “-”) II. Operating profit (Loss is listed with “-”) 595,444.76 1,282,370.56 Add: Non-operating income 160,030.46 273.00 Less: Non-operating expense 477.98 III. Total Profit (Loss is listed with “-”) 755,475.22 1,282,165.58 Less: Income tax IV. Net profit (Net loss is listed with “-”) 755,475.22 1,282,165.58 (i)continuous operating net profit (net loss listed with ‘-”) 755,475.22 1,282,165.58 (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.gain/loss of fair value changes for available-for-sale financial assets 4.Amount of financial assets re-classify to other comprehensive income 5.Gain/loss of held-to-maturity investments that re-classify to available-for-sale financial asset 6.Credit impairment provision for other debt investment 7.Cash flow hedging reserve 8.Translation differences arising on translation of foreign currency financial statements 9.Other VI. Total comprehensive income 755,475.22 1,282,165.58 VII. Earnings per share: (i) Basic earnings per share 0.0021 0.0035 (ii) Diluted earnings per share 0.0021 0.0035 5. Consolidated cash flow statement In RMB Item Semi-annual of Semi-annual of 2019 2018 I. Cash flows arising from operating activities: Cash received from selling commodities and providing labor services 14,988,120.25 17,460,137.72 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 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 Other cash received concerning operating activities 1,105,441.88 684,152.64 Subtotal of cash inflow arising from operating activities 16,093,562.13 18,144,290.36 Cash paid for purchasing commodities and receiving labor service 4,468,726.47 5,026,699.13 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 financial assets held for transaction purposes 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 6,921,639.62 6,741,602.32 Taxes paid 1,139,283.59 1,590,739.15 Other cash paid concerning operating activities 2,294,495.80 1,674,572.16 Subtotal of cash outflow arising from operating activities 14,824,145.48 15,033,612.76 Net cash flows arising from operating activities 1,269,416.65 3,110,677.60 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 long-term assets 68,670.00 Net cash received from disposal of subsidiaries and other units Other cash received concerning investing activities Subtotal of cash inflow from investing activities 68,670.00 Cash paid for purchasing fixed, intangible and other long-term assets 591,546.00 1,040,626.12 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 591,546.00 1,040,626.12 Net cash flows arising from investing activities -522,876.00 -1,040,626.12 III. Cash flows arising from financing activities Cash received from absorbing investment Including: Cash received from absorbing minority shareholders’investment by subsidiaries Cash received from loans Cash received from issuing bonds Other cash received concerning financing activities Subtotal of cash inflow from financing activities Cash paid for settling debts Cash paid for dividend and profit distributing or interest paying Including: Dividend and profit of minority shareholder paid by subsidiaries Other cash paid concerning financing activities Subtotal of cash outflow from financing activities Net cash flows arising from financing activities IV. Influence on cash and cash equivalents due to fluctuation in exchange rate V. Net increase of cash and cash equivalents 746,540.65 2,070,051.48 Add: Balance of cash and cash equivalents at the period -begin 15,364,355.30 9,681,607.16 VI. Balance of cash and cash equivalents at the period -end 16,110,895.95 11,751,658.64 6. Cash flow statement of parent Company In RMB Item Semi-annual of Semi-annual of 2019 2018 I. Cash flows arising from operating activities: Cash received from selling commodities and providing labor services 14,988,120.25 17,460,137.72 Write-back of tax received Other cash received concerning operating activities 1,104,683.09 684,152.64 Subtotal of cash inflow arising from operating activities 16,092,803.34 18,144,290.36 Cash paid for purchasing commodities and receiving labor service 4,468,726.47 5,026,699.13 Cash paid to/for staff and workers 6,921,639.62 6,741,602.32 Taxes paid 1,139,261.99 1,590,739.15 Other cash paid concerning operating activities 2,294,257.40 1,674,572.16 Subtotal of cash outflow arising from operating activities 14,823,885.48 15,033,612.76 Net cash flows arising from operating activities 1,268,917.86 3,110,677.60 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 long-term assets 68,670.00 Net cash received from disposal of subsidiaries and other units Other cash received concerning investing activities Subtotal of cash inflow from investing activities 68,670.00 Cash paid for purchasing fixed, intangible and other long-term assets 591,546.00 1,040,626.12 Cash paid for investment 1,000,000.00 Net cash received from subsidiaries and other units obtained Other cash paid concerning investing activities Subtotal of cash outflow from investing activities 591,546.00 2,040,626.12 Net cash flows arising from investing activities -522,876.00 -2,040,626.12 III. Cash flows arising from financing activities Cash received from absorbing investment Cash received from loans Cash received from issuing bonds Other cash received concerning financing activities Subtotal of cash inflow from financing activities Cash paid for settling debts Cash paid for dividend and profit distributing or interest paying Other cash paid concerning financing activities Subtotal of cash outflow from financing activities Net cash flows arising from financing activities IV. Influence on cash and cash equivalents due to fluctuation in exchange rate V. Net increase of cash and cash equivalents 746,041.86 1,070,051.48 Add: Balance of cash and cash equivalents at the period -begin 14,864,055.73 9,681,607.16 VI. Balance of cash and cash equivalents at the period -end 15,610,097.59 10,751,658.64 7. Consolidate change of owners’ equity Current period In RMB Semi-annual of 2019 Owners’equity attributable to the parent Company Minority Total owners’ Item interests equity Other Capital L O R S P o Share capital equity reserve e t e u r Retained profit t Subtotal instru h ment s h a r o e P s e s p v r e : r o l i r n u s p I c a s i e n o b o t v m l r n P u e p e e r a n r s o e l t e r e f f o h e r e c r e s v g r a y n e e e r p O s r n e i t s i v e d t h h v e r a e a e a s l r r l t e i o s s n r c e c i k c o s u m k r e i t i e s I. Balance at the end of 364,100,000.00 54,142,850.01 -340,454,153.72 77,788,696.29 77,788,696.29 the last year Add: Changes of accounting policy Error correction of the last period Enterprise combine under the same control Other II. Balance at the 364,100,000.00 54,142,850.01 -340,454,153.72 77,788,696.29 77,788,696.29 beginning of this year III. Increase/ Decrease in this year (Decrease is 755,974.01 755,974.01 755,974.01 listed with “-”) (i) Total comprehensive 755,974.01 755,974.01 755,974.01 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 IV. Balance at the end of 364,100,000.00 54,142,850.01 -339,698,179.71 78,544,670.30 78,544,670.30 the report period Last Period In RMB Semi-annual of 2018 M in Item or Total owners’ Owners’equity attributable to the parent Company it equity y in te re st s Other equity instru O ment t P P h r e L e o r e r R v p s e i e s c a S s t : o s u i P u m o r o r a I p n p n e l n r a l f v e b u o o e c e h l s f t Share capital r a O Capital public n e e Retained profit h Subtotal r p t reserve t n r g e e i h o s r e e r d t e r i e s n a r y v s e e s l e e r r t s r v a o s h i v e l c e a n e k c r c r u e o i r s m s i e k t i e s I. Balance at the end 364,100,000.00 54,142,850.01 -341,107,435.91 77,135,414.10 77,135,414.10 of the last year Add: Changes of accounting policy Error correction of the last period Enterprise combine under the same control Other II. Balance at the 364,100,000.00 54,142,850.01 -341,107,435.91 77,135,414.10 77,135,414.10 beginning of this year III. Increase/ Decrease in this year (Decrease 1,282,165.58 1,282,165.58 1,282,165.58 is listed with “-”) (i) Total comprehensive 1,282,165.58 1,282,165.58 1,282,165.58 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 plans5 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 364,100,000.00 54,142,850.01 -339,825,270.33 78,417,579.68 78,417,579.68 of the report period 8. Change of owners’ equity of parent company Current period In RMB Semi-annual of 2019 Other equity instru O ment t P h e L e r e r R p s e e s c a S t : o s u P u m o r r a I p n p e l n r a l f v e b u O e c e h l s t Item Share capital r a O Capital public n e e Retained profit h Total owners’ r p t reserve t n r e equity e i h o s r e r d t e r i e s a r y v s e s l e e r t s r v o s h i v e c e a n e k c r c u e o r s m i e t i e s I. Balance at the end of the last year 364,100,000.00 54,142,850.01 -340,454,153.72 77,788,696.29 Add: Changes of accounting policy Error correction of the last period Other II. Balance at the beginning of this year 364,100,000.00 54,142,850.01 -340,454,153.72 77,788,696.29 III. Increase/ Decrease in this year (Decrease is 755,475.22 755,475.22 listed with “-”) (i) Total comprehensive income 755,475.22 755,475.22 (ii) Owners’devoted and decreased capital 1.Common shares invested by shareholders 2. Capital invested by holders of other equity instruments 3. Amount reckoned into owners equity with share-based payment 4. Other (III) Profit distribution 1. Withdrawal of surplus reserves 2. Distribution for owners (or shareholders) 3. Other (IV) Carrying forward internal owners’equity 1. Capital reserves conversed to capital (share capital) 2. Surplus reserves conversed to capital (share capital) 3. Remedying loss with surplus reserve .4 Carry-over retained earnings from the defined .benefit plans5 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 report period 364,100,000.00 54,142,850.01 -339,698,678.50 78,544,171.51 Last period In RMB Semi-annual of 2018 Other O equity L t instru e h R ment s e e P s r a S e : s u P r c o r r p I o n p e e n m a l f t v p b u O e u e r l s t Item Share capital r a O Capital n e e Provision of h Total owners’ r l t reserve t h r general risk e equity e h o e r e r d c e r n e s a r y s s e s p i e r t i s v r v o t h e v e c a a e k l r i e n s s c e o c m u e r i t i e s I. Balance at the end of the last year 364,100,000.00 54,142,850.01 -341,107,435.91 77,135,414.10 Add: Changes of accounting policy Error correction of the last period Other II. Balance at the beginning of this year 364,100,000.00 54,142,850.01 -341,107,435.91 77,135,414.10 III. Increase/ Decrease in this year (Decrease is 1,282,165.58 1,282,165.58 listed with “-”) (i) Total comprehensive income 1,282,165.58 1,282,165.58 (ii) Owners’devoted and decreased capital 1.Common shares invested by shareholders 2. Capital invested by holders of other equity instruments 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 plans5 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 report period 364,100,000.00 54,142,850.01 -339,825,270.33 78,417,579.68 III. Company profile 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 June 30, 2019, the Company's accumulative total issued capital was 364.1 million shares and the Company's registered capital was RMB 364.1 million. Legal representative: Yuan Xiaoping. Unified social credit code: 91460000201357188U. Domicile: Dadonghai, Hedong District, Sanya. Business scope: Accommodation and catering industry (limited to branches); photography; flower bonsai, knitwear, general merchandise, hardware and electrical equipment, chemical products (except franchised operations), daily necessities, industrial means of production (except franchised operations), metal materials, machinery equipment; sales of train, bus and vehicle tickets on an agent basis, etc. The Company's largest shareholder is Luoniushan Co., Ltd. The financial statements were approved by all directors of the Company for disclosure onAugust 8, 2019. 2. Scope to the consolidated financial statements Scope of the consolidated financial statement for the period has no changes and as at 30 June 2019, the subsidiary included into the Company's scope of consolidated financial statements is as follows: Name Relationship with the Company Hainan Wengao Tourist Resources Development Co., Ltd. Awholly-owned subsidiary IV. Basic for the preparation of the financial statements 1. Preparation basis Based on going concern and according to actually occurred transactions and events, the Company prepared financial statements in accordance with the Accounting Standards for Business Enterprises — Basic Standards and the specific accounting standards, the Accounting Standards for Business Enterprises - Application Guidance, the Accounting Standards for Business Enterprises - Interpretation and other relevant provisions, issued by the Ministry of Finance, (hereinafter referred to collectively as the "Accounting Standards for Business Enterprises"), as well as the disclosure provisions of the Rules for the Compilation and Submission of Information Disclosure by Companies Offering Securities to the Public No.15 - General Requirements for Financial Reports (Revised in 2014). 2. Going concern The Company currently has sufficient working capital and normal operating conditions. It is estimated that the operating activities of the Company will still continue in the next 12 months. V. Significant accounting policies and accounting estimates Specific accounting policies and estimation attention: The main accounting policies and accounting estimates of the Company had no change. 1. Statement on compliance with the Accounting Standards for Business Enterprises The financial statements prepared by the Company comply with the requirements of the Accounting Standards for Business Enterprises, and truly and completely present the financial position, operating results, cash flows of the Company and other related information. 2. Accounting period The accounting year is from January 1 to December 31 in calendar year. 3. Operating cycle The Company's operating cycle is 12 months. 4. Reporting currency The Company adopts RMB as its reporting currency. 5. Accounting Treatment Method for Business Combinations (under the same/different control) Business combination under common control: The assets and liabilities acquired by the Company in business combinations are measured at book values of assets and liabilities of the combinee (including the goodwill arising from the acquisition of the combinee by the ultimate controller) in the consolidated financial statements of the ultimate controller on the combination date. The stock premium in the capital reserves is adjusted according to the difference between the book value of the net assets acquired in business combination and the book value of the consideration paid for the combination (or total par value of shares issued). If there is no sufficient stock premium in the capital reserves for write-downs, the retained earnings shall be adjusted. Business combination not under common control: The Company shall, on the acquisition date, measure the assets surrendered and liabilities incurred or assumed by the Company for a business combination at their fair values. The difference between the fair value and their book value shall be included in the current profit or loss. The Company shall recognize the difference of the combination costs in excess of the fair value of the identifiable net assets acquired from the acquiree as goodwill. The Company shall recognize the difference of the combination costs in short of the fair value of the identifiable net assets acquired from the acquiree in the current profit or loss after review. The auditing, legal services, consulting and other intermediary service fees as well as other relevant direct expenses for business combination will be included in the current profit or loss at occurrence; the transaction costs for the issue of equity securities shall be used to write down equities. 6. Preparation methods of consolidated financial statements 1)Scope of consolidation The scope of consolidated financial statements of the Company is determined on the basis of control, and all its subsidiaries (including the investee's partible part that is under control of the Company) shall be included in the consolidated financial statements. 2)Procedures of consolidation The Company prepares the consolidated financial statements based on financial statements of itself and its subsidiaries and according to other relevant information. Upon preparation of consolidated financial statements, the Company shall deem the whole group as a whole accounting entity, and reflects the overall financial position, operating results and cash flows of the group in accordance with relevant requirements for recognition, measurement and presentation as stated in the Accounting Standards for Business Enterprises as well as uniform accounting policies. All the subsidiaries within the consolidation scope of consolidated financial statements shall adopt the same accounting policies and accounting periods as those of the Company. If the accounting policies or accounting periods of a subsidiary are different from those of the Company, the consolidated financial statements of the subsidiary, upon preparation of consolidated financial statements, shall be adjusted according to the accounting policies and accounting periods of the Company. For the subsidiaries acquired through business combination not under the same control, adjustments to their financial statements shall be made based on the fair values of net identifiable assets on the acquisition date. For a subsidiary acquired through business combination under common control, adjustment to its financial statements shall be made based on the book values of its assets and liabilities (including goodwill formed in the acquisition of the subsidiary by its ultimate controller) as presented in the financial statements of the ultimate controller. The share of owners' equity, current net profits and losses, and current comprehensive income of subsidiaries attributable to minority owners shall be respectively and separately listed under the owner's equity item of a consolidated balance sheet, the net profit item of a consolidated income statement, and the total comprehensive income in a consolidated income statement. Where the current losses shared by a minority shareholder of a subsidiary exceeds the balances arising from the shares enjoyed by the minority shareholder in the owners' equity of the subsidiary at the beginning of the period, minority equity shall be written down accordingly. (1) Increase of subsidiaries or business During the reporting period, if the Company acquired subsidiaries or business from the business combination under common control, the beginning balance in the consolidated statement of financial position shall be adjusted; the revenue, expenses and profits of the newly acquired subsidiaries or business from the beginning to the end of the reporting period shall be included into the consolidated income statement; the cash flows of the newly acquired subsidiaries or business from the beginning to the end of the reporting period shall be included in the consolidated statement of cash flow. Relevant items in the comparative financial statements of the subsidiaries shall be adjusted accordingly, as if the reporting entity after the business combination exists at the time when the ultimate controller has the control power. Where control can be exercised on the investee under the common control for additional investment or other reasons, adjustment will be made as if all parties involved in the combination exist at the beginning of the control by the ultimate controller. Equity investments held before the control over the combined party is obtained, the related gains and losses, other comprehensive income as well as other changes in net assets recognized from the later of the date when the original equity is obtained or the date when the acquirer and the acquiree are under the same control, to the combination date will respectively write down the retained earnings or current profit or loss in the comparative statements. During the reporting period, if the Company increased subsidiaries or business from business combinations not under common control, the beginning balance in the consolidated balance sheet shall not be adjusted; the revenue, expenses and profits of the subsidiaries or business from the acquisition date to the end of the reporting period shall be included in the consolidated income statement; cash flows of the subsidiaries and business from the acquisition date to the end of the reporting period shall be included in the consolidated statement of cash flows. Where the Company can control the investee not under common control from additional investments, it shall re-measure equity of the acquiree held before the acquisition date at the fair value of such equity on the acquisition date and include the difference of the fair value and book value in the investment income in the year. Where equity of the acquiree held before the acquisition date involves in other comprehensive income accounted for under equity method and other changes in owners' equity other than net profits or losses, other comprehensive income and profit distribution, the relevant other comprehensive income and other changes in owners' equity shall be transferred to investment income in the year which the acquisition date falls in, except for other comprehensive income from changes arising from re-measurement of net liabilities or net assets of defined benefit plan by the investee. (2) Disposal of subsidiaries or business ①General method of treatment During the reporting period, where the Company disposes of any subsidiary or business, the revenues, expenses and profits of the subsidiary or business from the beginning period to the disposal date shall be included in the consolidated income statement; cash flows of the subsidiary or business from the beginning period to the disposal date shall be included in the consolidated statement of cash flows. When the Company loses the control over the investee due to disposal of partial equity investment or other reasons, the remaining equity investment after the disposal will be re-measured by the Company at its fair value on the date of loss of the control. The difference of the sum of the consideration acquired from disposal of equities and the fair value of the remaining equities less the sum of the share calculated at the original shareholding ratio in net assets of the original subsidiary which are continuously calculated as of the acquisition date or the combination date and goodwill shall be included in the investment income of the period in which the control is lost. Other comprehensive incomes associated with the equity investments of the original subsidiary, or the changes in owners' equity other than net profit or loss, other comprehensive income and profit distribution, are transferred into investment income of the period when the control is lost, except for other comprehensive income from the change in net liability or net asset due to the investor's re-measurement of defined benefit plan. Where the Company loses the control of any subsidiary due to the decline in its shareholding ratio in the subsidiary, caused by the increase of investment in the subsidiary by other investors, the accounting treatment shall be conducted according to the above principles. ②Disposal of subsidiaries by stages If the control is lost due to disposal of the equities in subsidiaries through multiple transactions by stages, and the terms, conditions and economic impact of the transactions related to the enterprise's disposal of its investment in the subsidiaries meet one or more of the following circumstances, it usually indicates that multiple transactions should be included in a package deal and subject to accounting processing as below: i. These transactions are concluded at the same time or under the consideration of mutual effect; ii. These transactions as a whole can reach a complete business result; iii.The occurrence of a transaction depends on the occurrence of at least one other transaction; iv.Asingle transaction is uneconomical but is economical when considered together with other transactions. Where various transactions of disposal of equity investments in subsidiaries until loss of the control belong to a package deal, accounting treatment shall be made by the Company on the transactions as a transaction to dispose subsidiaries and lose the control; however, the difference between each disposal cost and net asset share in the subsidiaries corresponding to each disposal of investments before loss of the control should be recognized as other comprehensive income in the consolidated financial statements and should be transferred into the current profit or loss at the loss of the control. Where various transactions of disposal of equity investments in subsidiaries until loss of the control do not belong to a package deal, before the loss of the control, accounting treatment shall be made according to the relevant policies for partial disposal of equity investments in the subsidiary without losing control; at the loss of the control, accounting treatment shall be made according to general treatment methods for disposal of subsidiaries. (3) Purchase of minority interest of subsidiaries The share premium in the capital reserves under the consolidated balance sheet will be adjusted at the difference between the long-term equity investment acquired by the Company for the purchase of minority interest and the share of net assets calculated constantly from the acquisition date (or combination date) according to the newly increased shareholding ratio. Where the share premium is insufficient to offset, retained earnings will be adjusted. (4) Partial disposal of equity investments in subsidiaries without losing control The share premium in the capital reserves under the consolidated balance sheet will be adjusted at the difference between the proceeds achieved from the partial disposal of long-term equity investments in subsidiaries and the share of net assets of subsidiaries attributable to the Company corresponding to the disposal of long-term equity investments and calculated constantly from the acquisition date or combination date, without losing the control. Where the share premium is insufficient to write down, the retained earnings will be adjusted. 7. Classification and accounting treatment of joint venture arrangements Joint venture arrangements are classified into joint operation and joint venture. Joint operation refers the joint venture arrangement where the Company is a joint venturer and enjoys assets relevant the joint venture arrangement and assumes liabilities relevant to the same. The Company recognizes the following items related to its share of benefits in the joint operation and conduct accounting treatment in accordance with relevant accounting standards for business enterprises: (1) assets peculiar to the Company and assets jointly owned by the Company based on shares held; (2) liabilities undertaken by the Company solely and liabilities jointly undertaken by the Company based on shares held; (3) revenue from the sales of output share enjoyed by the Company in the joint operation; (4) revenue from the sales of the joint operation output based on the shares held by the Company; and (5) separate costs, and costs for the joint operation based on the shares held by the Company. 8. Recognition criteria of cash and cash equivalents For the purpose of preparing the statement of cash flows, the term “cash” refers to the cash on hand and the unrestricted deposit of the Company. The term “cash equivalents” refers to short-term (maturing within three months from acquisition) and highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value. 9. Foreign currency business and foreign currency statement conversion Foreign currency transactions will be translated at the spot exchange rate on the transaction date and be accounted for at RMB. The balance of foreign currency monetary items are translated at the spot exchange rate on the balance sheet date and the exchange differences arising therefrom shall be included in the current profit and loss, except those exchange differences arising from the special borrowings of foreign currency related to the acquired and constructed assets qualified for capitalization that will be capitalized at the borrowing expenses. Foreign currency non-monetary items measured at historical costs shall still be converted at the spot exchange rates when the transactions occur, without changing the functional currency amount. Foreign currency non-monetary items measured at fair value shall be translated at the spot exchange rates on the day when the fair value is determined. The exchange difference arising therefrom is included in the current profit and loss or capital reserves. 10. Financial instruments Financial instruments include financial assets, financial liabilities and equity instruments. 1) Classification of financial instruments Upon initial recognition, financial assets and financial liabilities are classified into: financial assets or financial liabilities measured at fair value through current profit and loss, including financial assets or financial liabilities held for trading and financial assets or financial liabilities directly designated to be measured at fair value through current profit and loss; held-to-maturity investments; receivables; available-for-sale financial assets; and other financial liabilities, etc. 2) Recognition and measurement of financial instruments (1) Financial assets (financial liabilities) measured at fair value through current profit and loss Financial assets (financial liabilities) measured at fair value through current profit and loss are initially recognized at the fair value upon acquisition (net of cash dividends declared but not yet paid or bond interest due but not yet received) and the related transaction costs are included in current profit and loss. The interests or cash dividends to be received during the holding period are recognized as investment income. Change in fair values is included in the current profit and loss at the end of the period. The difference between the fair value and the initial book-entry value is recognized as investment income upon disposal; meanwhile, adjustments are made to profits or losses from changes in fair values. (2) Held-to-maturity investments Held-to-maturity investments are initially recognized at the sum of the fair value (net of bond interest due but not yet received) and related transaction costs upon acquisition. The interest income is calculated and recognized according to amortized costs and effective interest rates (as per coupon rates if the difference between effective interest rates and coupon rates is small) during the holding period, and is included in the investment income. The effective interest rates are determined upon acquisition and remain unchanged during the expected remaining period, or a shorter period if applicable. Upon disposal, the difference between the purchase price obtained and the book value of the investment is recognized in investment income. (3) Receivables For creditor’s rights receivable arising from external sales of goods or rendering of service by the Company and other creditor's rights of other enterprises (excluding liability instruments quoted in an active market) held by the Company, including accounts receivable, other receivables, notes receivable, prepayment and others, the initial recognition amount shall be the contract price or agreement price receivable from purchasing party; for those with financing nature, they are initially recognized at their present values. Upon recovery or disposal, the difference between the purchase price obtained and the book value of the receivables is recognized in current profit and loss. (4) Available-for-sale financial assets Financial assets (financial liabilities) measured at fair value through current profit and loss are initially recognized at the fair value and related transaction expenses upon acquisition (net of cash dividends declared but not yet paid or bond interest due but not yet received). The interests or cash dividends to be received during the holding period are recognized as investment income. The interest or cash dividends should be measured at fair value and their changes in fair value should be included in other comprehensive income. However, for an equity instrument investment that has no quoted price in an active market and whose fair value cannot be reliably measured, and for derivative financial asset linked to the said equity instrument investment and settled by delivery of the same equity instrument, they shall be measured at cost. Difference between the proceeds and the book value of the financial assets is recognized as investment profit or loss upon disposal; meanwhile, amount of disposal corresponding to the accumulated change in fair value which is originally and directly included in other comprehensive income shall be transferred out and recognized as investment gains or losses. (5) Other financial liabilities Other financial liabilities are initially recognized at the sum of fair value and transaction expenses, and subsequently measured at amortized costs. Subsequent measurement is conducted at the amortized cost. 3) Recognition and measurement of transfer of financial assets When a financial assets transfer occurs, the financial assets will be derecognized when substantially all the risks and rewards on the ownership of the financial assets have been transferred to the transferee; and they will not be derecognized if substantially all the risks and rewards on the ownership of the financial assets have been retained. When determining whether the transfer of a financial asset meets the above de-recognition criteria of financial assets, the Company adopts the principle of substance over form. The Company classifies the transfer of a financial asset into the entire transfer and the partial transfer of financial asset. Where the entire transfer of the financial asset meets the de-recognition conditions, the difference of the following two amounts will be included in current profit and loss: (1) The book value of the transferred financial asset; (2) The sum of the consideration received from the transfer and the accumulated amount of the changes in fair value originally and directly included in owners’ equity (the situation where the financial asset transferred is an available-for-sale financial asset is involved in). If the partial transfer of financial asset satisfies the criteria for de-recognition, the entire book value of the transferred financial asset shall be split into the derecognized and recognized part according to their respective fair value and the difference between the amounts of the following two items shall be included in the current profit and loss: (1) The book value of the derecognized part; (2) The sum of the consideration for the derecognized part and the portion of de-recognition corresponding to the accumulated amount of the changes in fair value originally and directly included in owners’ equity (the situation where the financial asset transferred is an available-for-sale financial asset is involved in). If the transfer of financial assets does not meet the de-recognition criteria, the financial assets shall continue to be recognized, and the consideration received will be recognized as a financial liability. 4) De-recognition criteria of financial liabilities Where the present obligations of financial liabilities have been discharged in whole or in part, the financial liability is derecognized or any part thereof will 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 will be derecognized, and at the same time, the new financial liability will 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 is 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) will be included into current profit and loss. Where the Company repurchases part of a financial liability, the entire book value of the financial liability shall be split into the derecognized part and continuously-recognized part according to their respective relatively fair values on the repurchase date. The difference between the book value of the derecognized part and the consideration paid (including non-cash assets transferred out or new financial liabilities assumed) shall be included in the current profit and loss. 5) Method of determining 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. Fair value of a financial instrument having no active market shall be determined by using valuation techniques. At the time of valuation, the Company adopts the techniques that are applicable in the current situation and supported by enough available data and other information, selects the input values that are consistent with the features of assets or liabilities as considered by market participants in relevant asset or liability transactions, and gives priority to use relevant observable inputs. The unobservable inputs are used only under the circumstance when it is impossible or unobservable inputs to obtain relevant observable inputs. 6) Testing and accounting methods of impairment of financial assets (excluding receivables) Except for the financial assets measured at fair values through current profit and loss, the book value of financial assets on the balance sheet date should be checked. If there is objective evidence that a financial asset is impaired, provision for impairment shall be made. (1) Impairment provision for available-for-sale financial assets: If the fair value of available-for-sale financial assets has significantly declined at the end of the period, or it is expected that the trend of decrease in value is non-temporary after considering various relevant factors, the impairment shall be recognized, and accumulated losses from decreases in fair value originally and directly included in owners’equity shall be all transferred out and recognized as impairment loss. For available-for-sale debt instruments whose impairment losses have been recognized, if their fair values rise in the subsequent accounting period and such rise is objectively related to the matters occurring after the recognition of impairment loss, the previously recognized impairment loss shall be reversed and recorded into the current profit and loss. Impairment losses on available-for-sale equity instruments shall not be reversed through profit or loss. (2) Impairment provision for held-to-maturity investments: Measurement of impairment losses on held-to-maturity investments is treated in accordance with the measurement method for impairment losses on receivables. 11. Note receivable 12.Account receivable (1) Account receivable with individually significant amount and with bad debt provision accrual independently Basis and standard for "individuallyTop 5 accounts receivable and other receivables by individual amount at the end of the year significant" The Company will separately conduct an impairment test on an individual basis and the Methods for provision for bad debtsallowance for bad debts will be made at the lower of the present value of the expected future of receivables with individuallycash flow and the book value thereof and included in current profit and loss. Those do not significant amount: impair after the separate test shall be included into corresponding portfolio for provision for bad debts. If separate test indicates that there is impairment of receivables, they shall not be included the receivables portfolio with similar risk credit characteristics for an impairment test. (2) Receivables provided for bad debts on a portfolio basis Portfolio Methods for provision for bad debts Account age Age of the account Accrual method for bad debt provision by portfolio Account age Aging analysis Account age Provision ratio for receivables Proportion ratio for other receivables Within 1 year (inclusive) 0.00% 0.00% 1-2 years 5.00% 5.00% 2-3 years 15.00% 15.00% Over 3 years 3-4 years 25.00% 25.00% 4-5 years 50.00% 50.00% Over 5 years 100.00% 100.00% (3) Accounts receivable with individually insignificant amounts and individual allowance for bad debt Reasons for separate At the end of the year, there are objective evidences showing that the individual balances below top five provision of allowance for are impaired; for example, the debtor is dissolved, bankrupts or dies, and therefore the receivables bad debts cannot be recovered after the bankruptcy property or the estate is repaid. if there is an objective evidence that the impairment on receivables has occurred, such receivables shall Provision method of be separated from relevant portfolio to conduct impairment test separately, based on which the allowance for bad debts impairment losses are recognized. Receivables other than accounts receivable and other receivables are subject to impairment provision by using the specific identification methods. (4) Reversal of bad debt provision If there is objective evidence that the value of the receivable has been recovered and is objectively related to the matters occurred after the recognition of the loss, the previously recognized impairment loss shall be reversed and included in the current profit or loss. However, the book value after the reversal does not exceed the amortized cost of the receivable on the reversal date, assuming no provision for impairment. 13. Receivables financing 14.Other account receivable Determination and accounting treatment of the expected credit loss for other account receivable: nil 15. Inventories Does the Company need to comply with the disclosure requirement of the special industry Nil 16. Contract assets 17.Contract costs 18. Assets held for sale 19. Investment in debt obligations 20. Other investment in debt obligations 21. Long-term account receivable 22. Long-term equity investment 1) Judgment criteria for common control and significant influence Joint control refers to the control shared over an arrangement in accordance with the relevant stipulations, and the decision-making of related activities of the arrangement should not be made before the party sharing the control right agrees the same. Where the Company exercises joint control over the investee together with other parties to the joint venture and enjoys the right on the investee's net assets, the investee is a joint venture of the Company. Significant influence refers to the power to participate in making decisions on the financial and operating policies of an enterprise, such as appointing representative to the board of directors or similar organs of authority of the investee, but not the power to control the investee, or jointly control, the formulation of such policies with other parties. Where an investor is able to have significant influences on an investee, the investee shall be the Company's associate. 2) Determining of initial investment cost (1) Long-term equity investment acquired from business combination Business combination under the common control: if the Company pays a consideration to the combinee in cash, by transferring non-cash assets or by assuming debts, the share of book value of its owners' equity in the combinee in the consolidated financial statements of the ultimate controlling party shall be regarded, on the merger date, as the initial investment cost of the long-term equity investment. If there is a difference between the initial investment cost of the long-term equity investment and the total of book values of the paid cash, transferred non-cash assets and of assumed debts as well as the face value of issued share, the difference shall be used to adjust the share premium in the capital reserve; and if the share premium in the capital reserve is insufficient to be offset, retained earnings shall be adjusted. In case the Company can exercise control over the investee under common control for additional investment or other reasons, the initial investment cost of long-term equity investments is recognized at the share of book value of net asset of the acquiree after the combination in the consolidated financial statements of the ultimate controller on the combination date. The stock premium should be adjusted at the difference between the initial investment cost of long-term equity investments on the combination date and the book value of long-term equity investments before the combination plus the book value of consideration paid for additional shares; if there is no sufficient stock premium for write-downs, the retained earnings are adjusted. Business combination not under the common control: the Company recognizes the combination cost determined on the combination date as the initial cost of long-term equity investments. Where the Company can control the investee not under common control from additional investments, the initial investment cost should be changed to be accounted for under the cost method and recognized at the sum of the book value of equity investments originally held and newly increased investment cost. Under business combination not under the common control, the auditing, legal services, consulting and other intermediary fees and other related administrative expenses for business combination will be included into current profit and loss upon occurrence; the transaction costs for the issuance of equity securities or debt securities shall be included into the initial recognition amount of equity securities or debt securities. (2) Long-term equity investments obtained by other means For long-term equity investments acquired from making payments in cash, the initial cost is the actually paid purchase cost. For long-term equity investments acquired from issuance of equity securities, the initial investment cost is the fair value of the issued equity securities. If the exchange of non-monetary assets has commercial substance and the fair values of assets traded out and traded in can be measured reliably, the initial cost of long-term equity investment traded in with non-monetary assets are determined based on the fair values of the assets traded out and the relevant taxes and surcharges payable unless there is any conclusive evidence that the fair values of the assets traded in are more reliable; if the exchange of non-monetary assets does not meet the above criteria, the book value of the assets traded out and the relevant taxes and surcharges payable are recognized as the initial cost of long-term equity investment traded in. For long-term equity investment acquired from debt restructuring, the initial cost is determined based on the fair value. 3) Subsequent measurements and recognition of gain or loss (1) Long-term equity investment under cost method Long-term equity investments in subsidiaries are accounted for under the cost method. Except for the actual price paid for acquisition of investment or the cash dividends or profits contained in the consideration which have been declared but not yet distributed, the Company recognizes the investment income in the current year at the cash dividends or profits declared by the investee. (2) Long-term equity investment accounted for in the equity method The Company's long-term equity investments in associates and joint ventures are accounted for by using the equity method. If the initial cost is more than the share of the fair value of the investee' identifiable net asset to which the Company shall be entitled when investing, the initial cost of the long-term equity investment will not be adjusted. If the initial cost of a long-term equity investment is less than the share of the fair value of the investee's identifiable net asset to which the Company shall be entitled when investing, the difference shall be included in the current profit or loss. The Company respectively recognizes the investment income and other comprehensive income according to the shares of net profit or loss and other comprehensive income realized by the investee that should enjoyed or assumed by the Company, and adjusts the book value of long-term equity investment; according to the profit declared to be distributed by the investee or the part shall be enjoyed cash dividends calculation, to reduce the book value of long-term equity investment correspondingly; for other changesin owners' equity excepting for ex all profit or loss of the investee, other comprehensive income and profit distribution, the book value of long-term equity investment shall be adjusted and included in the owners' equity. When recognizing the share of net profit or loss of the investee that the Company shall enjoy, based on fair value of various identifiable assets and others of the investee on acquisition and according to accounting policies and accounting periods of the Company, the Company shall recognize such share after making adjustments to net profit of the investee. When holding the investment, the investee should prepare the consolidated financial statements, it shall account for the investment income based on the net profit, other comprehensive income and the changes in other owner's equity attributable to the investee. The Company shall write off the part of incomes from internal unrealized transactions between the Company and associates and joint ventures which are attributable to the Company according to the corresponding ratio and recognize the profit and loss on investments on such basis. Where the losses from internal transactions between the Company and the investee fall into the scope of assets impairment loss, the full amount of such losses should be recognized. For transactions on investments or sales of assets between the Company and associates and joint ventures, where such assets constitute business, they should be accounted for according to the relevant policies. When the Company recognizes its share of loss incurred to the investee, treatment shall be done in the following sequence: firstly, the book value of the long-term equity investment shall be reduced; secondly, where the book value thereof is insufficient to cover the share of losses, investment losses are recognized to the extent of book value of other long-term equities which form net investment in the investee in substance and the book value of long term receivables shall be reduced. Finally, after all the above treatments, if the Company is still responsible for any additional liability in accordance with the provisions stipulated in the investment contracts or agreements, provisions are recognized and included into current investment loss according to the obligations estimated to undertake. An investing party shall recognize the net loss incurred by the invested entity until the book value of the long-term equity investment and other long-term interests which substantially form the net investment in the invested entity are reduced to zero, unless the investing party is obliged to undertake extra losses. If the invested entity realizes any net profit later, the investing party shall, after the amount of its attributable share of profits offsets its attributable share of the unrecognized losses, resume recognizing its attributable share of profits. (3) Disposal of long-term equity investments For disposal of long-term equity investments, the difference between the book value and the actual price shall be included into the current profit or loss. Where a long-term equity investment is accounted for under the equity method, accounting treatment should be made on the part which is originally included in other comprehensive income according to corresponding ratio by using the same basis for the investee to directly dispose of the relevant assets or liabilities when the investments are disposed of. Owner's equity recognized from the investee's changes in other owner's equity other than net profit or loss, other comprehensive income and profit distribution should all transferred to the current profit and loss in proportion. In case the joint control or significant influence over the investee is lost for disposing part of equity investments or other reasons, the remaining equity will be changed to be accounted for according to the recognition and measurement principles of financial instruments. The difference between the fair value and the book value on the date of the loss of joint control or significant influence should be included in the current profit and loss. As to other comprehensive income recognized based on measurement of the original equity investment under the equity method, accounting treatment shall be made on the same basis as would be required if the investee had directly disposed of the assets or liabilities related thereto when measurement under the equity method is terminated. Owner's equity recognized from the investee's changes in other owner's equity other than net profit or loss, other comprehensive income and profit distribution should all transferred to the current profit and loss when the equity method confirmed is no longer adopted. Where the Company loses the control over the investee due to disposal of partial equity investments or other reasons, when it prepares separate financial statements, the remaining equity after disposal that can jointly control or have significant influence on the investee will be measured at the equity method, and the remaining equity should be deemed to have been adjusted at equity method on acquisition; If the remaining equity after disposal cannot exercise joint control or significant influence on the investee, such investments should be accounted for according to the provisions on the recognition and measurement of financial instruments and the difference between fair value and book value on the date of loss of the control should be included in the current profit and loss. Where the disposed equities are acquired by the enterprise combination due to the reasons such as additional investment, the remaining equities after the disposal are calculated based on the cost method or equity method in preparing the individual financial statements, and other comprehensive income and other owners' equity recognized because of the equity method adopted for the calculation of the equity investment held prior to the purchase date are carried forward in proportion; the remaining equities after the disposal are changed to be made in accordance with the relevant provisions in the recognition and measurement criteria of financial instruments while other comprehensive income and other owners' equity are carried forward in full. 23. Investment property Measurement mode Measured by cost method Depreciation or amortization method Investment properties are properties to earn rentals or for capital appreciation or both. Examples include land leased out under operating leases, land held for long-term capital appreciation, buildings leased out under operating leases, (including buildings that have been constructed or developed for future lease out under operating leases, and buildings that are being constructed or developed for future lease out under operating leases). 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. 24. Fixed assets (1) Recognition criteria 1)Fixed assets refer to tangible assets held for the purpose of producing commodities, providing services, renting or business management with useful lives exceeding one year. Fixed assets are recognized when they simultaneously meet the following conditions: (1) It is probable that the economic benefits relating to the fixed assets will flow into the Company; and (2) The costs of the fixed assets can be measured reliably. 2) Classification: Fixed assets can be classified into: buildings and constructions, electronic equipment, transport equipment, electronic entertainment equipment, other equipment and decoration improvements. 3)Initial measurement of fixed assets Fixed assets shall be initially measured at actual costs on acquisition. The costs of externally acquired fixed assets shall be determined by their purchase prices, related taxes and surcharges and any attributable transport expenses, loading and unloading expenses, installation expenses and professional service expenses incurred to prepare the fixed assets for its serviceable condition. If the payment for a fixed asset is delayed beyond the normal credit conditions and it is of the financing nature, the cost of the fixed asset shall be determined on the basis of the current value of the purchase price. Costs of self-built fixed assets consist of necessary expenditures incurred before preparing the asset to reach the condition for its intended use. For fix assets obtained in debt restructuring by debtors for the settlement of his liabilities, their book-entry value should be initially stated based on their fair values. Differences between the book values and the fair values of the fix assets are included in the current profit and loss; If the exchange of non-monetary assets has commercial substance, and the fair value of these assets can be measured reliably, the book-entry value of fixed assets traded in is determined on the basis of the fair value of the fixed assets traded out unless there is any conclusive evidence that the fair value of the assets traded in is more reliable; if the exchange of non-monetary assets does not meet the above criteria, the cost of the fixed assets traded in should be the book value of the assets traded out and relevant taxes and surcharges payable, and no profit or loss shall be recognized. For fixed assets acquired from business combination under common control, their book-entry values are recognized at the book values of the combinee; for fixed assets acquired from business combination not under common control, their book-entry values are recognized at the fair value. The Company shall state the assets acquired under finance lease at the lower of the book value of the leased assets on the lease beginning date or the present value of the minimum lease payments. (2) Depreciation method of fixed assets Asset type Depreciation method Year for depreciation Residual value rate Yearly depreciation rate Houses and buildings Straight-line method 20-40 5% 4.75%-2.37% Mechanical equipment Straight-line method 8-20 5% 11.87%-4.75% Entertainment Straight-line method 5-16 5% 19%-5.93% equipment Transportation Straight-line method 7-12 5% 13.57%-7.91% equipment Other equipment Straight-line method 8 5% 11.87% (3) Reorganization basis, valuation and depreciation method for financial lease assets 25. Construction in progress The Company need to comply with the disclosure requirement under Industry Information Disclosure Guidelines of the Shenzhen Stock Exchange No.2 - Listed Companies Engaged in Related Business of Solid Mineral Resources The book-entry values of the fixed assets are stated at total expenditures incurred before reaching working condition for their intended use. For construction in progress that has reached working conditions for its intended use but for which the completion of settlement has not been handled, it shall be transferred into fixed assets at the estimated value according to the project budget, construction price or actual cost, etc. from the date when it reaches the working conditions for its intended use. The fixed assets shall be depreciated in accordance with the Company’s policy on fixed asset depreciation. Adjustment shall be made to the originally and provisionally estimated value based on the actual cost after the completion of settlement is handled, but depreciation already provided will not be adjusted. The total amount of expenditure incurred by the project under construction before the construction of the asset reaches the expected usable condition is recorded as the entry value of the fixed assets. If the project under construction of fixed assets has reached the expected usable condition, but has not yet completed the final settlement of the project, it will be transferred to the fixed value by the estimated value according to the project budget, cost or actual cost of the project from the date of the scheduled usable condition, and will be accrued the depreciation of fixed assets according to the Company's fixed assets depreciation policy, after the completion of final accounts, the original temporary valuation shall be adjusted according to the actual cost, but the original depreciation amount will not be adjusted. 26. Borrowing costs 1)Recognition principles of capitalization of borrowing costs Borrowing costs include the interest of borrowings, the amortization of discount or premium, auxiliary expenses, exchange differences incurred by foreign currency borrowings, etc. The borrowing costs incurred to the Company and directly attributable to the acquisition and construction or production of assets eligible for capitalization should be capitalized and recorded into relevant asset costs; other borrowing costs should be recognized as costs according to the amount incurred and be included into the current profit and loss. Assets eligible for capitalization refer to fixed assets, investment property, inventories and other assets which may reach their intended use or sale status only after long-time acquisition and construction or production activities. Borrowing costs may be capitalized only when all the following conditions are met at the same time: (1) Asset disbursements, which include those incurred by cash payment, the transfer of non-cash assets or the undertaking of interest-bearing debts for acquiring and constructing or producing assets eligible for capitalization, have already been incurred; (2) Borrowing costs have already been incurred; (3) Purchase, construction or manufacturing activities that are necessary to prepare the assets for their intended use are in progress. 2) Capitalization period of borrowing costs Capitalization period refers to the period from commencement of capitalization of borrowing costs to its cessation; period of suspension for capitalization is excluded. Capitalization of borrowing costs should cease when the acquired and constructed or produced assets eligible for capitalization have reached the working condition for their intended use or sale. When some projects among the acquired and constructed or produced assets eligible for capitalization are completed and can be used separately, the capitalization of borrowing costs of such projects should be ceased. If all parts of the acquired and constructed or produced assets are completed but the assets cannot be used or sold externally until overall completion, the capitalization of borrowing costs should be ceased at the time of overall completion of the said assets. 3)Period of suspension for capitalization If the acquisition and 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 its intended use or sale, the borrowing costs continue to be capitalized. Borrowing costs incurred during the interruption are recognized as the current profit and loss and continue to be capitalized until the acquisition, construction or production of the asset restarts. 4) Calculation of capitalization amount of borrowing costs As for special borrowings borrowed for acquiring and constructing or producing assets eligible for capitalization, borrowing costs of special borrowing actually incurred in the current period less the interest income of the borrowings unused and deposited in bank or return on temporary investment should be recognized as the capitalization amount of borrowing costs. As for general borrowings used for acquiring and constructing or producing assets eligible for capitalization, the interest of general borrowings to be capitalized should be calculated by multiplying the weighted average of asset disbursements of the part of accumulated asset disbursements exceeding special borrowings at end of each month by the capitalization rate of used general borrowings. The capitalization rate is calculated by weighted average interest rate of general borrowings. As for borrowings with discount or premium, the to-be-amortized discount or premium in each accounting period should be recognized by effective interest rate method, and the interest for each period should be adjusted. 27. Biological assets 28. Oil-and-gas assets 29. Right-of-use assets 30. Intangible assets (1) Valuation method, useful lives and impairment 1)Valuation method of intangible assets (1) The Company initially measures intangible assets at cost on acquisition; The costs of externally purchased intangible assets include purchase prices, relevant taxes and surcharges and other directly attributable expenditures incurred to prepare the assets for their intended use. If the payment for an intangible asset is delayed beyond the normal credit conditions and it is of the financing nature, the cost of the intangible asset shall be determined on the basis of the current value of the purchase price. For an intangible asset obtained in debt restructuring by a debtor for the settlement of relevant liability, the book-entry value shall be initially recognized based on the fair value of the intangible asset. Difference between the book value of restructured debts and the fair value of the intangible asset used for debt off-set shall be included in the current profit or loss; On the premise that non-monetary assets trade is of commercial nature and the fair value of the assets traded in or out can be measured reliably, the intangible assets traded in with non-monetary assets should be recognized at the fair value of the assets traded out, unless any unambiguous evidence indicates that the fair value of the assets traded in is more reliable; as to the non-monetary assets trade not meeting the aforesaid premise, the book value of the assets traded out and related taxes and surcharges payable should be recognized as the cost of the intangible assets, with gains or losses not recognized. For intangible assets acquired from business combination under common control, the initial book value are initially recognized at the book value of the combinee; for intangible assets acquired from business combination not under common control, the initial book value are initially recognized at the fair value. Costs of intangible assets developed internally and independently include: the costs of materials and labor services used to develop the intangible assets, the registration fee, the amortization of other patents and franchise used in the process of development, the interest expenses meeting the condition for capitalization, and other direct expenses for preparing the intangible assets for their intended use. (2) Subsequent measurement The useful lives of the intangible assets are analyzed and determined on their acquisition. For intangible assets with definite useful lives, the Company shall adopt the straight-line method for amortization within the period during which they can bring economic benefits to the Company; where the period during which they can bring economic benefits to the Company cannot be forecast, those intangible assets shall be deemed as assets with indefinite lives and no amortization will be made. 2) Estimates of useful lives of intangible assets with definite useful lives Item Estimated useful lives Basis Land use rights 50 years Use term for the land use right title The useful life and amortization method of intangible assets with limited useful life are reviewed at the end of each period. Upon review, the useful lives and amortization method of the intangible assets as at the end of the year were not different from those estimated before. 3)Judgment basis for intangible assets with indefinite useful lives As at the balance sheet date, the Company has no intangible assets with indefinite useful lives. (2) Accounting policy of internal R&D expenditures 31. Impairment of long-term assets For the long-term equity investments, investment properties, fixed assets, construction in progress, intangible assets, and other long-term assets measured at cost model, if there are signs of impairment, an impairment test will be conducted on the balance sheet date. If impairment test results indicate that the recoverable amounts of the assets are lower than their book value, the provision for impairment is made based on the differences, which are recognized as impairment losses. The recoverable amounts of intangible assets are the higher of their fair values less costs to sell and the present values of the future cash flows expected to be derived from the assets. The assets impairment provision is calculated and made on an individual basis. If it is difficult for the Company to estimate the recoverable amount of the individual asset, the recoverable amount of an asset group to which the said asset belongs to will be determined. Asset group is the minimum combination of assets that can independently generate cash inflows. After the losses from asset impairment are recognized, they are not reversed in subsequent periods. 32. Long-term deferred expenses Long-term deferred expenses refer to various expenses which have been already incurred but will be born in the reporting period and in the future with an amortization period of over one year. 1) Amortization method Long-term deferred expenses are evenly amortized over the beneficial period 2) Amortization period Item Amortization period Hotel exterior decoration 4 years Fire stairs renovation 4 years C FLOOR ROOM RENOVATION 5 years Villa renovation 5 years Swimming pool renovation 5 years 33. Contract liabilities 34. Employee compensation (1) Accounting method for short-term compensation During the accounting period when employees serve the Company, the actual short-term compensation is recognized as liabilities and included in current profit and loss or costs associated with assets. The appropriate amount of employee compensation payable will be determined during the accounting period when the employees provide services for the Company based on the medical insurance, work injury insurance and maternity insurance and other social insurance and housing fund paid by the Company for employees, as well as trade union funds and employee education funds withdrawn according to provisions at the accrual basis and accrual ratio. The employee benefits in the non-monetary form shall be measured at fair value. (2)Accounting method for dismissal welfare When the Company fails to unilaterally withdraw the dismissal benefits offered due to the termination of the labor relation plan or layoff proposal, or confirms the costs or fees associated with the reorganization involving the payment of the dismissal benefits (whichever is earlier), the employee compensation liabilities arising from the confirmation of dismissal benefits are included in the current profit or loss. (3) Accounting method for post-employment benefits The Company pays the basic endowment insurance premiums and unemployment insurance for employees according to the relevant provisions of the local governments. During the accounting period when employees serve the Company, the paid amount which is calculated based on the payment base and proportion as stipulated in the provisions of the local place is recognized as liabilities and included in the current profit or loss or assets-related assets cost. (4) Accounting method for other long-term employee welfare 35. Lease liability 36. Estimated liabilities When the Company is involved in litigation, debt guarantees, loss-making contract, reorganization matters, if such matters are likely to be satisfied by delivery of assets or provision of services in the future and the amount can be measured reliably, they shall be recognized as estimated liabilities. 1) Recognition criteria for estimated liabilities When an obligation relating to a contingency meets all the following conditions at the same time, it is recognized as an estimated liability: (1) Such obligation is a present obligation of the Company; (2) The performance of such obligation may well cause outflows of economic benefits from the Company; and (3) The amount of such obligation can be measured reliably. 2) Measurement method of estimated liabilities The estimated liabilities of the Company are initially measured as the best estimate of expenses required for the performance of relevant present obligations. When the Company determines the best estimate, it should have a comprehensive consideration of risks with respect to contingencies, uncertainties and the time value of money. If the time value of money is significant, the best estimates will be determined after discount of relevant future cash outflows. The best estimates shall be treated as follows in different circumstances: If there is continuous range (or interval) for the necessary expenses, and probabilities of occurrence of all the outcomes within this range are equal, the best estimates will be determined at the average amount of upper and lower limits within the range. If there is no continuous range (or interval) for the necessary expenses, or probabilities of occurrence of all the outcomes within this range are unequal despite such a range exists, in case that the contingency involves a single item, the best estimate shall be determined at the most likely outcome; if the contingency involves two or more items, the best estimate should be determined according to all the possible outcomes with their relevant probabilities. When all or part of the expenses necessary for the settlement of 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. 37. Share-based payment 38. Other financial instrument as preferred stock and perpetual bond etc. 39. Revenue Does the Company need to comply with the disclosure requirement of the special industry No Whether the new revenue standards been implemented □Yes √No 40. Government grants 1) Type Government grants refer to the monetary or non-monetary assets obtained by the Company from the government for free. Government grants are divided into asset-related government grants and income-related government grants. Asset-related government grants refer to government grants obtained by the Company for forming long-term assets by acquisition, construction or other manners. Income-related government grants refer to government grants excluding the asset-related government grants. 2)Recognition time and measurement Government grants can be recognized when simultaneously meeting the following conditions: 1) The enterprise can meet conditions attached to government grants; and 2) The enterprise can receive government grants. If a government grant is a monetary asset, it shall be measured at the amount received or receivable. Government grants shall be measured at receivables when there is strong evidence at the end of the period that such grants comply with the relevant conditions prescribed by the financial support policies and the financial support funds are expected to be received. Other financial grants shall be confirmed according to the amount of money received. If government grants are non-monetary assets, they shall be measured at its fair value; and if the fair value cannot be obtained in a reliable way, they shall be measured at a nominal amount. 3)Accounting treatment A-Asset-related government grants shall be used to offset the book value of relevant assets or recognized as deferred income. If asset-related government grants are recognized as deferred income, they shall be included in profit or loss by stages by a reasonable and systematic method within the useful lives of relevant assets. Government grants measured at the nominal amount are directly included in the current profit or loss. Where relevant assets are sold, transferred, scraped or damaged before the end of their lives, balance of the relevant unallocated deferred income is transferred to the current profit and loss on asset disposal. B- Accounting treatment will be conducted for government grants associated with income in accordance with the following provisions: a) government grants associated with income that are used to recover relevant costs or losses of the enterprise in subsequent period are recognized as deferred income and included in the current profit or loss when relevant costs or losses are recognized; b) If government grants related to income are used to compensate the relevant costs and losses that have occurred, such government grants should be directly included in the current profit or loss. c)Where both the asset-related government grants and income-related government grants are covered, the accounting treatment should be done respectively by distinguishing the asset-related government grants and income-related government grants; if it is difficult to distinguish, these government grants will be classified into the income-related government grants as a whole. C-Any government grant related to the daily activities of an enterprise shall be included into other income in accordance with the business nature. Government grants unrelated to the daily activities of enterprises shall be recorded as non-operating revenues and expenditures. 41. Deferred tax assets and deferred tax liabilities Deferred tax assets are recognized for deductible temporary differences to the extent that it shall not exceed the taxable income probably obtained in future period that can be used for deducting the deductible temporary differences. Taxable temporary differences are recognized as deferred tax liabilities in addition to special circumstances. Special circumstances in which deferred income tax assets or deferred income tax liabilities shall not be recognized include: the initial recognition of goodwill; other transactions or matters excluding business combinations, which affect neither accounting profits nor the taxable income (or deductible losses) when occurred. When the Company has the statutory right to do settlement with the net amounts, and has the intention to do so or the recovery of assets and the settlement of liabilities are achieved simultaneously, the Company shall present its current income tax assets and current income tax liabilities at the net amounts as the result of one offsetting another. When the Company has the legal rights to balance income tax assets and income tax liabilities for the current period with net settlement, and deferred income tax assets and deferred income tax liabilities are related to the income tax which are imposed on the same taxpaying subject by the same tax collection authority or on different taxpaying subjects, but, in each important future period in connection with the reverse of deferred income tax assets and liabilities, the involved taxpaying subject intends to balance income tax assets and liabilities for the current period with net settlement at the time of obtaining assets and discharging liabilities, deferred income tax assets and deferred income tax liabilities shall be presented based on the net amount after offset. 42. Lease (1) Accounting treatment of operating lease 1) Accounting treatment of assets leased The rental fees paid for the asset leased by the Company will be amortized over the entire lease term without deducting rent-free period according to the straight-line method and included in the expenses for the current period. The initial direct costs related to the lease transactions paid by the Company are included in the current expenses. When assets lessor bears costs related to the lease borne by the Company, the Company shall deduct the part of expenses from the total rents and amortize the rents after deduction over the lease term and include them in current expenses. 2)Accounting treatment of leasing-out assets Lease fees received by the Company from leasing assets shall be amortized at straight-line method over the whole lease period including rent-free period, and shall be recognized as lease income. Initial direct costs relating to lease transactions incurred by the Company shall be recognized as the current expenses; if the amounts are significant, they shall be capitalized and included in the current income on the same basis as the recognition of lease income. When the Company bears costs related to the lease borne by the leasee, the Company shall deduct the part of expenses from the total rents and amortize the rents after deduction over the lease term. (2) Accounting treatment of finance lease 43. Other principal accounting policies and accounting estimates 44. Changes to principal accounting policies and accounting estimates (1) Changes in principal accounting policies □Applicable√Not applicable (2) Changes in principal accounting estimates □Applicable√Not applicable (3)Adjustment on relevant items of financial statement at begging of the year when initially implemented the new financial instruments standards, new revenue standards and new leasing standards □Applicable√Not applicable (4) Explanation of the retrospective adjustment on comparative data in the prior period while implemented new financial instruments standards and new leasing standards for the first time □Applicable√Not applicable 45. Other VI.Taxation 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 Value added tax calculated in accordance with tax laws and VAT payable or taxable sales 5%, 6%, 9%, 10%, 13% (VAT) revenue shall be the difference after deducting the input VAT deductible in the same period Urban maintenance Levied based on VAT payable 7% and construction tax Enterprise income Levied based on the taxable income 25% tax Education surtax Levied based on VAT payable 3% Local education Levied based on VAT payable 2% surtax Housing property Remaining value after deducting 30% from the original value of the house 1.2%, 12% tax (including the occupied land price), and rent revenue Land use tax Land area RMB 18 / m2 Disclose reasons for different taxpaying body: Nil 2. Tax preference 3. Other VII. Notes to the items of financial statements 1.Monetary Fund In RMB/CNY Item Ending balance Beginning balance Cash on hand 476,191.77 347,782.65 Bank deposits 15,634,704.18 15,016,572.65 Total 16,110,895.95 15,364,355.30 Other explanation: nil 2. Trading securities: nil 3. Derivative financial assets: nil 4. Note receivable: nil 5. Accounts receivable (1)Disclosure of account receivables by category In RMB/CNY Ending balance Beginning balance Book balance Provision for bad Book balance Provision for bad Category debt Book value debt Book value Amount Proporti Amount Provisio Amount Proporti Amount Provisi on n ratio on on ratio Accounts receivable with provision for bad debts based on single item Accounts receivable with provision for bad 230,062.48 100.00% 74,075.60 32.20% 155,986.88 500,510.47 100.00% 74,075.60 14.80% 426,434.87 debts based on portfolios Total 230,062.48 100.00% 74,075.60 32.20% 155,986.88 500,510.47 100.00% 74,075.60 14.80% 426,434.87 Provision for bad debts based on single item: nil Provision for bad debt based on portfolios: nil If the provision for bad debts of accounts receivable is made in accordance with the general model of expected credit losses, please refer to the disclosure of other receivables to disclose the related information on bad debts: □Applicable√Not applicable Released by account age In RMB/CNY Account age Ending balance Within 1 year (inclusive) 139,108.68 1-2 years 566.00 2-3 years 785.00 3-4 years 18,633.00 4-5 years 3,397.00 Over 5 years 67,572.80 Total 230,062.48 (2)Provision, reversal or recovery of provision for bad debts in the period Provision for bad debt in the period In RMB/CNY Beginning Amount changed in the period Category balance Accrual Reversal or Charge off Ending balance switch-back Based on portfolios 74,075.60 74,075.60 Total 74,075.60 74,075.60 Including the major amount that reversal or switch-back in the period: nil (3)Account receivable actually charge off in the period: nil (4)Top five accounts receivable in terms of ending balance collected by the debtor Name Relationship with Book balance Account age Proportion in total amount of the Company accounts receivable(%) Shanghai Hecheng International Travel Non-related party 35,788.40 Within 1 year 15.56% Service Co., Ltd. Yangpu Huayu Road and Bridge Non-related party 18,633.00 Over 5 years 8.10% Technology Co., Ltd. Guangzhou Institute of Design Non-related party 38,980.00 Over 5 years 16.94% Shenzhen Tenpay Technology Co., Ltd. Non-related party 46,621.46 Within 1 year 20.26% Tianjin Watermelon Tourism Limited Non-related party 24,414.82 Within 1 year 10.61% Liability Company Total 164,437.68 71.47% (5)Account receivable that are terminated due to financial assets transfer: nil (6)Assets and liabilities resulted by account receivable transfer and continues involvement : nil 6. Receivable financing: nil 7. Advance payment (1)Disclosure of advance payment by account age In RMB/CNY Ending balance Beginning balance Account age Amount Proportion Amount Proportion Within 1 year 396,882.60 100.00% 39,960.01 100.00% Total 396,882.60 -- 39,960.01 -- Explanation on reasons of failure to settle on important advance payment with age over one year: Nil (2)Top five advances payment in terms of the ending balance collected by the prepaid object Shenzhen J&J Space Design Co., Ltd. 213,592.23 53.82% Sanya Shengxiang Mechatronics Engineering Co., Ltd. 110,415.00 27.82% Hainan Haolong Fire Engineering Co., Ltd. 58,925.37 14.85% Sanya Xingcai Electrical Co., Ltd. 13,230.00 3.33% Business Daily of International Tourism Island 720.00 0.18% Total 396,882.60 Other explanation: nil 8. Other receivable In RMB/CNY Item Ending balance Beginning balance Other receivable 1,242,181.64 458,242.73 Total 1,242,181.64 458,242.73 (1)Interest receivable: Nil (2)Dividend receivable: Nil (3)Other account receivables 1)Other account receivable disclosed by nature In RMB/CNY Nature Ending book balance Opening book balance Utility bills 206,254.34 185,368.69 Petty cash 838,955.14 133,411.23 Attorney fee 77,534.25 77,534.25 Court cost 62,970.00 Social insurance and housing provident funds 57,803.91 63,264.56 Deposit 600.00 600.00 Total 1,244,117.64 460,178.73 2)Provision for bad debt: nil Change of the book balance for major amount changed in loss provision □Applicable√Not applicable Released by account age In RMB/CNY Account age Ending balance Within 1 year (inclusive) 1,241,881.64 4-5 years 600.00 Over 5 years 1,636.00 Total 1,244,117.64 3)Provision, reversal or recovery of provision for bad debts in the period Provision for bad debt in the period In RMB/CNY Amount changed in the period Category Beginning balance Accrual Reversal or Ending balance switch-back Based on portfolios 1,936.00 1,936.00 Total 1,936.00 1,936.00 Including major amount reversal or switch-back in the period: nil 4)Other receivables actually charge off in the period: nil 5)Top five other accounts receivable in terms of ending balance collected by the debtor In RMB/CNY Name Nature Ending Account Proportion in total amount of other Ending balance of balance age accounts receivable at period-end provision for bad debt Wen Ping Petty cash 710,000.00 Within 1 57.16% 0.00 year Hainan New Concept Attorney fee 77,534.25 Within 1 6.23% 0.00 Law Firm year Peng Guoxing Utility bills 70,422.98 Within 1 5.66% 0.00 year Sanya Suburbs People’s Court cost 62,970.00 Within 1 5.06% 0.00 Court year Guo Yubo Petty cash 60,369.61 Within 1 4.85% 0.00 year Total -- 981,296.84 -- 78.88% 0.00 6)Account receivables related to government subsidies: Nil 7)Other receivable for termination of confirmation due to the transfer of financial assets: Nil 8)The amount of assets and liabilities that are transferred other receivable and continued to be involved: Nil 9. Inventories Whether the new revenue standards been implemented □Yes √No (1)category of inventories In RMB/CNY Ending balance Beginning balance Item Book balance Provision for Book value Book balance Provision for Book value price decline price decline Raw materials 836,342.72 683,941.58 152,401.14 870,043.52 725,731.58 144,311.94 Finished goods 22,771.38 11,102.41 11,668.97 22,771.38 11,102.41 11,668.97 Food and 12,526.82 12,526.82 43,935.10 43,935.10 beverage Fuel 15,096.64 15,096.64 21,474.18 21,474.18 Total 886,737.56 695,043.99 191,693.57 958,224.18 736,833.99 221,390.19 Does the Company comply with the disclosure requirement of “Information Disclosure Guidelines of Shenzhen Stock Exchange No.4–Listed Companies Engaged in Seed Industry and Planting Business” or not No (2)Provision for inventory depreciation In RMB/CNY Beginning Increase in the period Decrease in the period Item balance Accrual Others Reversal or Others Ending balance write-off Raw materials 725,731.58 41,790.00 683,941.58 Finished goods 11,102.41 11,102.41 Total 736,833.99 41,790.00 695,043.99 (3) Explanation on capitalization of borrowing costs at ending balance of inventory: Nil (4) Assets completed without unsettlement from construction contract at period-end: Nil 10. Contract assets: nil 11. Assets held for sale: nil 12. Non-current assets maturing within one year: nil 13. Other current assets Whether the new revenue standards been implemented □Yes √No In RMB/CNY Item Ending balance Beginning balance Enterprise income tax paid in advance 1,702,702.80 1,702,702.80 Input tax to be deducted 385,035.78 103,556.98 Prepaid pending expenses 37,880.58 39,960.01 Total 2,125,619.16 1,846,219.79 Other explanation: nil 14. Creditors investment: nil 15. Other creditors investment: nil 16. Long-term account receivable: nil 17. Long-term equity investment: nil 18. Investment in other equity instrument: nil 19. Other non-current financial assets: nil 20. Investment property (1)Investment properties measured at cost √Applicable□Not applicable In RMB/CNY Item Houses and buildings Land use rights Construction in Total process I. Original book value 1.Beginning balance 18,856,504.44 5,662,740.59 24,519,245.03 2.Increase in the period (1)Outsourcing (2)Transfer from inventories/fixed assets/construction in process (3)Increase from business combinations 3.Decrease in the period (1)Disposal (2)Other transfer-out 4.Ending balance 18,856,504.44 5,662,740.59 24,519,245.03 II.Accumulated depreciation and accumulated amortization 1.Beginning balance 10,607,583.54 2,219,726.45 12,827,309.99 2.Increase in the period 209,091.78 28,170.00 237,261.78 (1)Accrual or amortization 209,091.78 28,170.00 237,261.78 3.Decrease in the period (1)Disposal (2)Other transfer-out 4.Ending balance 10,816,675.32 2,247,896.45 13,064,571.77 III. Provision for impairment 1.Beginning balance 1,404,400.47 1,903,054.14 3,307,454.61 2.Increase in the period (1)Accrual 3. Decrease in the period (1)Disposal (2)Other transfer-out 4.Ending balance 1,404,400.47 1,903,054.14 3,307,454.61 IV. Book value 1.Ending book value 6,635,428.65 1,511,790.00 8,147,218.65 2.Opening book value 6,844,520.43 1,539,960.00 8,384,480.43 (2)Investment real estate measured by fair value □Applicable√Not applicable (3)Investment real estate without property certification held: Nil 21. Fixed assets In RMB/CNY Item Ending balance Beginning balance Fixed assets 34,997,520.16 36,497,869.65 Total 34,997,520.16 36,497,869.65 (1) Fixed assets details In RMB/CNY Item Houses and Mechanical Transportatio Electronic Other Total buildings equipment n equipment equipment equipment : I.Original book value 1.Beginning balance 136,789,501.82 11,033,550.54 2,345,074.91 2,664,528.39 1,926,451.84 154,759,107.50 2.Increase in the period 20,635.87 20,101.94 40,737.81 (1)Purchase 20,635.87 20,101.94 40,737.81 (2)Transfer from construction in process (3)Increase from business combinations 3.Decrease in the period 1,420,474.00 619,394.00 193,633.45 2,233,501.45 (1)Disposal or scrap 1,420,474.00 619,394.00 193,633.45 2,233,501.45 4.Ending balance 136,789,501.82 9,613,076.54 2,345,074.91 2,065,770.26 1,752,920.33 152,566,343.86 II.Accumulated depreciation 1.Beginning balance 72,499,344.50 7,970,060.88 1,587,022.54 1,938,853.10 1,224,791.47 85,220,072.49 2.Increase in the period 1,087,717.44 143,758.48 82,783.92 87,864.93 87,053.97 1,489,178.74 (1)Accrual 1,087,717.44 143,758.48 82,783.92 87,864.93 87,053.97 1,489,178.74 3.Decrease in the period 1,008,698.30 595,910.37 173,760.82 1,778,369.49 (1)Disposal or scrap 1,008,698.30 595,910.37 173,760.82 1,778,369.49 4.Ending balance 73,587,061.94 7,105,121.06 1,669,806.46 1,430,807.66 1,138,084.62 84,930,881.74 III. Provision for impairment 1.Beginning balance 31,072,788.17 1,968,377.19 33,041,165.36 2.Increase in the period (1)Accrual 3.Decrease in the period 403,223.40 403,223.40 (1)Disposal or scrap 403,223.40 403,223.40 4.Ending balance 31,072,788.17 1,565,153.79 32,637,941.96 IV. Book value 1.Ending book value 32,129,651.71 942,801.69 675,268.45 634,962.60 614,835.71 34,997,520.16 2.Opening book value 33,217,369.15 1,095,112.47 758,052.37 725,675.29 701,660.37 36,497,869.65 (2) Temporarily idle fixed assets: Nil (3) Fixed assets acquired by financing lease: Nil (4) Fixed assets acquired by operating lease: Nil (5) Certificate of title un-completed: Nil (6) Disposal of fixed assets: Nil 22. Construction in process: Nil 23. Productive biological asset (1)Measured by cost □Applicable√Not applicable (2)Measured by fair value □Applicable√Not applicable 24. Oil and gas assets □Applicable√Not applicable 25. Right-of-use assets: Nil 26. Intangible assets (1)Intangible assets In RMB/CNY Item Land use rights Patent right Non-patents Total technology I. Original book value 1.Beginning balance 81,653,137.15 81,653,137.15 2.Increase in the period (1)Purchase (2)Internal research and development (3)Increase from business combinations 3.Decrease in the period (1)Disposal 4.Ending balance 81,653,137.15 81,653,137.15 II.Accumulated amortization 1.Beginning balance 32,007,051.27 32,007,051.27 2.Increase in the 406,193.58 406,193.58 period (1)Accrual 406,193.58 406,193.58 3.Decrease in the period (1)Disposal 4.Ending balance 32,413,244.85 32,413,244.85 III. Provision for impairment 1.Beginning balance 27,440,836.84 27,440,836.84 2.Increase in the period (1)Accrual 3.Decrease in the period (1)Disposal 4.Ending balance 27,440,836.84 27,440,836.84 IV. Book value 1.Ending book value 21,799,055.46 21,799,055.46 2.Opening book value 22,205,249.04 22,205,249.04 Ratio of the intangible assets from internal R&D in balance of intangible assets at period-end was 0%. (2)Land use rights without certificate of ownership: Nil 27. Development expenditure: Nil 28. Goodwill: Nil 29. Long-term deferred expenses In RMB/CNY Item Beginning Increase in the Amortization in Other decreased Ending balance balance period the period Maintenance fee for main engine 50,116.50 50,116.50 system of the centralAC Renovation of guest rooms in 486,974.57 292,184.70 194,789.87 Building-B Fire stairs renovation in Building-A 45,695.20 8,567.82 37,127.38 Renovation of guest rooms in 2,260,206.30 301,360.80 1,958,845.50 Building-C, villa and swimming pool Total 2,792,876.07 50,116.50 602,113.32 2,240,879.25 Other explanation: nil 30. Deferred income tax assets and deferred income tax liabilities: Nil 31. Other non-current assets Whether the new revenue standards been implemented □Yes √No Other explanation: nil 32. Short-term loans: Nil 33. Trading financial liability: nil 34. Derivative financial liability: nil 35. Notes payable: Nil 36. Accounts payable (1)Presentation of accounts payable In RMB/CNY Item Ending balance Beginning balance Payment for purchase 170,266.19 687,690.30 Accounts payable provisionally 660,218.61 534,359.35 estimated Service charges 93,168.29 155,368.88 Payment for projects 14,274.10 134,274.10 Elevator maintenance fee 31,670.00 31,670.00 Advertisement fees 30,500.30 31,195.28 Consignment sales 22,335.90 Other 1,093.00 10,942.00 Water rate 52,428.54 Natural gas fee 23,398.40 Total 1,077,017.43 1,607,835.81 (2)Major account payable with over one year account age: nil 37. Advances from customers Whether the new revenue standards been implemented □Yes √ No (1)Presentation of advances from customers In RMB/CNY Item Ending balance Beginning balance Room and meal charge 779,681.12 1,291,293.05 Total 779,681.12 1,291,293.05 (2)Significant advances from customers with aging more than one year In RMB/CNY Item Ending balance Reasons for failure of repayment or carry-forward Guangzhou Nanbu Holiday International Travel 101,244.00 Unsettled Service Co., Ltd. Sanya Branch Hainan Xiangyuan Tourism Development Co., Ltd. 39,851.00 Unsettled PEGAS Zheng Qingbo 32,243.02 Unsettled Hainan Qiongzhong Ecological Investment Guarantee 22,926.00 Unsettled Co., Ltd. Sanya City Public Security Fire Brigade 19,420.88 Unsettled Total 215,684.90 -- (3)Projects settlement without unfinished at period-end from construction contract: Nil 38. Contract liability: nil 39. Employee compensation payable (1)Classification of employee compensation payable In RMB/CNY Item Beginning balance Increase in the Decrease in the period Ending balance period I. Short-term compensation 2,841,262.35 6,031,396.03 7,044,691.32 1,827,967.06 II. Post-employment benefits - 547,368.99 547,368.99 defined contribution plans Total 2,841,262.35 6,578,765.02 7,592,060.31 1,827,967.06 (2)Presentation of short-term compensation In RMB/CNY Item Beginning balance Increase in the Decrease in the period Ending balance period 1. Salaries, bonuses, 1,762,269.70 4,759,360.01 5,722,074.66 799,555.05 allowances and subsidies 2. Employee welfare expenses 759,981.75 759,981.75 3. Social insurance premiums 255,539.72 255,539.72 Including: medical 236,205.39 236,205.39 insurance premiums Work-related 4,568.36 4,568.36 injury insurance premiums Maternity 14,765.97 14,765.97 insurance premiums 4. Housing provident funds 90,050.00 90,050.00 5. Labor union expenditures 1,078,992.65 166,464.55 217,045.19 1,028,412.01 and employee education funds Total 2,841,262.35 6,031,396.03 7,044,691.32 1,827,967.06 (3)Presentation of defined contribution plans In RMB/CNY Item Beginning balance Increase in the period Decrease in the period Ending balance 1. Basic endowment 532,614.48 532,614.48 insurance premiums 2. Unemployment 14,754.51 14,754.51 insurance premiums Total 547,368.99 547,368.99 Other explanation: nil 40. Taxes payable In RMB/CNY Item Ending balance Beginning balance Value added tax (VAT) 565,131.47 146,863.56 Individual income tax 25,850.99 -0.02 Urban maintenance and construction tax 2,108.62 761.67 Housing property tax 97,050.95 194,101.69 Land use tax 54,295.47 108,590.92 Education surtax 903.68 326.42 Local education surtax 602.48 217.63 Total 745,943.66 450,861.87 Other explanation: nil 41. Other account payable In RMB/CNY Item Ending balance Beginning balance Other account payable 2,942,968.71 2,727,483.66 Total 2,942,968.71 2,727,483.66 (1)Interest payable: Nil (2)Dividend payable: Nil (3)Other account payable 1)Presentation of other account payable by nature In RMB/CNY Item Ending balance Beginning balance Employee dormitory rental fees, etc. 975,525.11 971,723.12 Margin 20,000.00 890,958.75 Audit fee 285,003.21 285,003.21 Quality guarantee deposit for projects 204,180.90 190,344.00 Employee deposit 86,520.00 165,700.90 Payment for projects 161,111.03 162,569.78 Funds collected and remitted 793,268.57 36,408.47 Individual current amounts 1,315.34 1,364.00 Electric charges withheld 24,494.55 23,411.43 Announcement fee 391,550.00 Total 2,942,968.71 2,727,483.66 2)Other significant account payable with aging of over one year In RMB/CNY Item Ending balance Reasons for failure of repayment or carry-forward Yangpu Jinyu Industrial Co., Ltd. 627,000.00 Unsettled Hong Kong Deloitte & Touche LLP 285,003.21 Unsettled Sanya Shuxin Housing Waterproof 170,000.00 Unsettled Engineering Co., Ltd. China Building Decoration Company 161,111.03 Unsettled Hainan Branch Total 1,243,114.24 -- Other explanation: nil 42. Liability held for sale: Nil 43. Non-current liability due within one year: Nil 44. Other current liability: Nil 45. Long-term loans: Nil 46. Bond payable: Nil 47. Lease liability: nil 48. Long-term account payable: nil 49. Long-term employee payable: nil 50. Estimated liabilities Whether the new revenue standards been implemented □Yes √No In RMB/CNY Item Ending balance Beginning balance Reasons Other 1,489,685.04 1,489,685.04 Provisions for arrears of electricity tariffs Total 1,489,685.04 1,489,685.04 -- Other explanation, including important assumptions and estimation for the major accrual liability: nil 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 fromApril 2014 toApril 2016. 51. Deferred income: nil 52. Other non-current liability: nil Whether the new revenue standards been implemented □Yes √No 53. Share capital In RMB/CNY Changes ( "+" for increase and "-" for decrease) Beginning Issuance Public Ending balance balance of new Share reserve Others Sub-total shares donation transferred to shares Total shares 364,100,000.00 364,100,000.00 Other explanation: nil 54. Other equity instrument: nil 55. Capital reserves In RMB/CNY Item Beginning balance Increase in the period Decrease in the period Ending balance Capital premium 33,336,215.58 33,336,215.58 (share premium) Other capital reserves 20,806,634.43 20,806,634.43 Total 54,142,850.01 54,142,850.01 Other explanation, including changes in the period and reasons: nil 56. Treasury stock: nil 57. Other consolidated income: nil 58. Reasonable reserve: nil 59. Surplus reserves: nil 60. Undistributed profits In RMB/CNY Item Current period Last period Undistributed profits at the end of last year before adjustment -340,454,153.72 -341,107,435.91 Undistributed profits at the beginning of the year after adjustment -340,454,153.72 -341,107,435.91 Plus: net profit attributable to owners of the parent company in current period 755,974.01 1,282,165.58 Undistributed profit as at the end of the year -339,698,179.71 -339,825,270.33 Details about adjusting the retained profits at the beginning of the period: 1) The retroactive adjustments to Accounting Standards for Business Enterprises and its relevant new regulations affect the retained profits at the beginning of the period amounting to 0 Yuan. 2) The changes in accounting policies affect the retained profits at the beginning of the period amounting to 0 Yuan. 3) The major accounting error correction affects the retained profits at the beginning of the period amounting to 0 Yuan 4) Merge scope changes caused by the same control affect the retained profits at the beginning of the period amounting to 0 Yuan. 5) Other adjustments affect the retained profits at the beginning of the period amounting to 0 Yuan 61. Operating income and operating costs In RMB/CNY Item Current period Last period Income Cost Income Cost Main business 14,241,961.04 5,514,477.93 16,173,929.32 6,000,063.36 Total 14,241,961.04 5,514,477.93 16,173,929.32 6,000,063.36 Whether the new revenue standards been implemented □Yes √No Other explanation: nil 62. Taxes and surcharges In RMB/CNY Item Current period Last period Urban maintenance and construction tax 31,410.84 37,515.65 Education surtax 22,436.31 26,796.89 Housing property tax 215,587.50 431,174.78 Land use tax 108,590.94 217,181.82 Vehicle and vessel use tax 5,220.00 3,669.06 Stamp tax 233.91 182.70 Total 383,479.50 716,520.90 Other explanation: nil 63. Sales expenses In RMB/CNY Item Current period Last period Staff wages and benefits 1,834,677.00 1,841,236.40 Social workers insurance expenses 302,950.00 285,734.45 Depreciation 259,401.60 256,486.12 Utility bills 99,980.13 84,101.36 Repair charges 95,930.17 58,716.18 Other expenses 217,053.04 274,681.59 Total 2,809,991.94 2,800,956.10 Other explanation: nil 64. Administrative expenses In RMB/CNY Item Current period Last period Staff wages and benefits 2,789,891.55 2,809,454.64 Social workers insurance expenses 321,053.70 266,303.18 Entertainment expenses 219,787.57 496,075.07 Travelling expenses 149,081.98 68,678.82 Amortization for the depreciation and 567,140.44 550,590.01 land use right Announcement fee and agency charge 655,420.00 656,245.72 Other expenses 369,424.97 509,107.77 Total 5,071,800.21 5,356,455.21 Other explanation: nil 65. R&D expenses: nil 66. Financial expenses In RMB/CNY Item Current period Last period Handling charges 18,965.03 40,293.06 Less: interest income -152,697.12 -22,729.87 Total -133,732.09 17,563.19 Other explanation: nil 67. Other income: nil 68. Investment income: nil 69. Net open hedging benefits: nil 70. Gains from fair value changes: nil 71. Credit impairment loss: nil 72. Losses on assets impairment: nil Whether the new revenue standards been implemented □Yes √No 73. Income from assets disposal: nil 74. Non-operating income In RMB/CNY Item Current period Last period Amount included in non-recurring profit and loss in the current period Other 160,030.46 273.00 160,030.46 Total 160,030.46 273.00 160,030.46 Government subsidies reckoned into current gains/losses: nil 75. Non-operating expenses In RMB/CNY Item Current period Last period Amount included in non-recurring profit and loss in the current period Gains/losses from non-current assets scrapping 477.98 Total 477.98 Other explanation: nil 76. Income tax expenses (1)Statement of income tax expenses: nil (2)Adjustment process of accounting profit and income tax expenses In RMB/CNY Item Current period Total profit 755,974.01 Make up the annual losses of previous years 755,974.01 Other explanation: nil 77. Other comprehensive income See Note 78. Notes to items of the cash flow statement (1)Cash received from other operating activities In RMB/CNY Item Current period Last period Interest income 152,697.12 22,729.87 Other expenses 952,744.76 661,422.77 Total 1,105,441.88 684,152.64 Explanation: nil (2)Cash paid for other operating activities In RMB/CNY Item Current period Last period Social intercourse fees 221,362.57 497,075.07 Intermediary audit fee 400,000.00 400,000.00 Announcement fee 238,420.00 220,000.00 Travelling expenses 151,940.09 72,159.01 Promotion fee 92,705.15 109,649.14 Repair charges 211,454.36 163,503.73 Other expenses 978,613.63 212,185.21 Total 2,294,495.80 1,674,572.16 Explanation: nil (3) Cash received from other investment activities: nil (4) Cash paid for other investing activities: nil (5)Cash received from other financing activities: nil (6)Cash paid for other financing activities: nil 79. Supplementary information to statement of cash flows (1)Supplementary information to statement of cash flows In RMB/CNY Item Current period Last period .1Net profit adjusted to cash flows from operating activities -- -- Net profits 755,974.01 1,282,165.58 Depreciation of fixed assets, depreciation and depletion of oil 1,698,270.52 1,799,584.50 and gas assets and depreciation of productive biological assets Amortization of intangible assets 434,363.58 434,363.58 Amortization of long-term fees to apportioned 602,113.32 609,770.58 Loss from fixed assets scrapping ("-" for gains) 477.98 Decreases in inventories ("-" for increases) 29,696.62 -37,615.58 Decreases in operating receivables ("-" for increases) -513,490.92 -326,357.40 Increases in operating payable ("-" for decreases) -1,737,510.48 -651,711.64 Net cash flows from operating activities 1,269,416.65 3,110,677.60 2. Significant investing and financing activities not involving -- -- cash receipts and payments 3. Net changes in cash and cash equivalents -- -- Balance of cash at the end of the period 16,110,895.95 11,751,658.64 Less: balance of cash at the beginning of the period 15,364,355.30 9,681,607.16 Net increase in cash and cash equivalents 746,540.65 2,070,051.48 (2) Net cash payment for the acquisition of a subsidiary of the current period: nil (3) Net cash received from the disposal of subsidiaries: nil (4) Breakdown of cash and cash equivalents In RMB/CNY Item Ending balance Beginning balance I. Cash 16,110,895.95 15,364,355.30 Including: cash on hand 476,191.77 347,782.65 Unrestricted bank deposits 15,634,704.18 15,016,572.65 III. Ending balance of cash and cash equivalents 16,110,895.95 15,364,355.30 Other explanation: nil 80. Notes for the statement of owners equity changes Explain the items and adjusted amounted which have adjusted in “Other” of last year’s ending balance: nil 81. Assets with ownership or use right restricted: nil 82. Item of foreign currency (1)Item of foreign currency: nil (2)Explanation on foreign operational entity, including as for the major foreign operational entity, disclosed main operation place, book-keeping currency and basis for selection; if the book-keeping currency changed, explain reasons □Applicable√Not applicable 83. Hedging Released the items and relevant instruments by types, and qualitative and quantitative information for hedge risks: nil 84. Government subsidy (1)Government subsidy: nil (2)Refund of government subsidy □Applicable √Not applicable Other explanation: nil 85. Other VIII. Changes of consolidation range 1. Enterprise consolidation not under the same control (1)Enterprise consolidation not under the same control in current period: nil (2) Combination costs and goodwill: nil (3) Identifiable assets/liabilities of the purchasee on the date of purchase: nil (4) Gain/loss from the equity re-measured at fair value held before purchasing date: nil Enterprise combined step by step through multi-dealings and obtained controlling rights in the Period □Yes √No (5)Explanation on combined consideration or the identifiable assets and liabilities’ fair value of the purchased party on purchasing date or at the end of the current period of merger, which is impossible to determine in a reasonable way: (6)Other explanation: nil 2. Enterprise consolidation under the same control (1)Enterprise consolidation under the same control in current period In RMB/CNY Income of the Net profit of Income combined the of the Net profit Equity Standar party from combined combin of the ratio Basis of d to period-begin party from ed party combined Combined party obtained in combined Combinatio determi of period-begin during party combinatio under the n date ne the combination of the during the n same control combina to the combination compari comparison tion date combination to the son period date combination period date Hainan Wengao A Establis Tourist Resources 100.00% wholly-owne 8 June 2018 hment 0.00 498.79 0.00 0.00 Development d subsidiary date Co., Ltd. Other explanation: nil (2)Combined cost In RMB/CNY Combined cost Cash 500,798.36 Book value of the non-cash assets 499,700.43 Explanation on contingent consideration and changes: nil Other explanation: nil (3) Book value of the assets/liabilities from combined party at date of combination In RMB/CNY Combining date Period-end of last period Monetary Fund 500,798.36 1,000,000.00 Account receivable 499,700.43 Net assets 1,000,498.79 1,000,000.00 Net assets obtained 1,000,498.79 1,000,000.00 Contingent liabilities assumed by the merged party in a business combination: nil Other explanation: nil 3. Counter purchase Basic information of transactions, basis of transactions constituting counter purchase, whether assets and liabilities reserved by listed companies constituting business and their basis, confirmation of combined cost, the amount occurred when adjusting rights and interests in accordance with equity transaction and its calculation: Nil 4. Disposal of subsidiaries Losing controlling rights while dispose subsidiary on one-time □Yes √No Dispose subsidiary step by step through multi-dealings and losing controlling rights in the Period □Yes √No 5. Changes of combination scope Other reasons contributed the changes for combination scope (e.g. new subsidiary established, liquidate subsidiary etc.): nil 6. Other IX. Equity in other entity 1. Equity in the subsidiary (1)Composition of enterprise Main Registration Share-holding ratio Gaining Subsidiary operation place Business nature Directly In-directly method place Hainan Wengao Hainan Tourist Resources Province, Sanya City, Industrial 100.00% Cash Development Co., China China development investment Ltd. An explanation for the shareholding ratio differing from the share of the voting rights in the subsidiaries:nil The basis for holding half or below of the voting rights but still controlling the investee, and holding more than half of the voting rights but not controlling the investee:nil The basis for important structured entities and controls which are included in the scope of consolidation:nil The basis for determining the company as an agent or as a principal:nil Other explanation: nil (2) Major non-wholly-owned subsidiary: nil (3) Main financial information of the major non-wholly-owned subsidiary: nil (4) Major restriction on using the group’s assets and paying off debts for the group: nil (5) Financial and other supports provided to the structured entity that included in consolidate financial statement scope: nil 2. Changes in the owner's equity share of the subsidiary and the transaction is still controlled subsidiary (1)Changes in owners’ equity in subsidiary: nil (2)Impact on minority shareholders’ equity and owners’ equity attributable to parent company from the transaction: nil 3. Equity in arrangement of joint venture or associated enterprises (1)Major joint venture or associated enterprise: nil (2)Financial information of the major joint venture: nil (3)Financial information of the major associated enterprise: nil (4)Summary of financial information for un-important joint venture and associated enterprise: nil (5)Explanation of the major restriction on the ability of transferring funds to the Company from joint venture or associated enterprise: nil (6)Excess loss from joint venture or associated enterprise: nil (7)Unconfirmed commitments related to joint venture investment: nil (8)Contingent liabilities relating to the investment in joint venture or associated enterprise: nil 4. Important common management: nil 5. Equity in structured entities not included in the consolidated financial statements: nil 6. Other X. Risks related to financial instruments XI. Fair value disclosures 1. Ending fair value of the assets and liabilities measured by fair value: nil 2. Recognized basis for the market price sustaining and non-persistent measured by fair value on first-order: nil 3. The qualitative and quantitative information for the valuation technique and critical parameter that sustaining and non-persistent measured by fair value on second-order: nil 4. The qualitative and quantitative information for the valuation technique and critical parameter that sustaining and non-persistent measured by fair value on third-order: nil 5. Sensitivity analysis of non-observable parameters and adjustment information between the opening book value and ending book value that sustaining measured by fair value on third-order: nil 6. If there are conversion between different orders that sustaining measured by fair value, explain the conversion cause and policy of determining the time point for conversion: nil 7. The valuation technical change and reasons occurred in the period: nil 8. The fair value of financial assets/liabilities that not measured under the fair value: nil 9. Other: nil XII. Related parties and related-party transactions 1. Parent company Registere Nature of Registered Shareholding ratio in the Parent company d place Business Capital Voting ratio in the Company Company Luoniushan Co., Ltd. Haikou Plant and 1151.51 million 17.55% 19.80% City culturing Yuan Note: As of 30 June 2019, Luoniushan Co., Ltd. (hereinafter referred to as Luoniushan) and its wholly-owned subsidiary Hainan Ya’anju Property Service Co., Ltd. holds 72.092 million shares of the Company under A-stock, totally takes 19.80% in total share capital of the Company, and it is the first largest shareholder of the Company. Ultimate controlling party of the Company is Luoniushan Co., Ltd. Other explanation: nil 2. Subsidiary of the Enterprise Found more in Notes 3. Joint venture and associated enterprise: nil 4. Other related party: nil 5. Related transaction (1)Transaction with goods purchasing ,labor service offering/receiving concerned Purchasing goods/received labor service: nil Sales of goods/provided labor service: In RMB/CNY Related party Content Current period Last period Luoniushan Co., Ltd. Room and meal charge 125,150.00 176,779.00 Explanation: nil (2)Associated trusteeship management/contract and trusteeship/outsourcing: nil (3)Related-party lease: nil (4)Related-party guarantee: nil (5)Related-party funds lending: nil (6)Related-party asset transfer and debt restructuring: nil (7)Key management compensation: nil (8)Other related transactions: nil 6. Related party’s account receivable/payable (1)Receivable In RMB/CNY Ending balance Beginning balance Item Related party Book balance Provision for bad Book balance Provision for bad debt debt Account Luoniushan Co., Ltd. 6,387.00 13,153.00 receivable (2)Payable: nil 7. Related party’s commitment 8. Other XIII. Share-based payment 1. Share-based payment □Applicable√Not applicable 2. Settled by equity □Applicable√Not applicable 3. Settled by cash □Applicable√Not applicable 4. Modification and termination of share-base payment 5. Other XIV. Commitments and contingencies 1. Material commitments Major commitments on balance sheet date The Company has no commitments that need to disclosed up to balance sheet date 2. Contingencies (1) Major contingencies on balance sheet date , OnMay 26,2016 the Company received lawyer’s letter of Hainan Yunfan law firm which is entrusted by Hainan Power Grid Co., LTD Sanya Power Supply Bureau (hereinafter referred to as the "Sanya Power Supply Bureau"), the letter claims that Sanya Power Supply Bureau found that the Company’s subsidiary South China Grand Hotel of Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd’s the amount of CT is different with its marketing management system record. The inconformity time is July, 2006, and the hotel’s CT is changing on April, 2016. Therefore, undercounted electricity consumption amount is 10,313,373.00 kilowatt-hours, and estimated cost is 7,200,165.75 Yuan as various electricity prices and charges. (2) For no major contingencies disclosed, explain reasons The Company has no major contingencies should be disclosed 3. Other XV. Event after balance sheet date 1. Major non-adjustment events: nil 2. Profit distribution: nil 3. Sales return: nil 4. Explanation on other events after balance sheet date: nil XVI. Other significant events 1. Correction of accounting errors in previous periods: nil 2. Debt reorganization 3.Assets exchange (1)Non-monetary assets exchange (2)Other assets exchange 4. Annuity plan 5. Termination of operation: nil 6. Segment information (1)Basis of determination and accounting policy for the reportable segment (2)Financial information of reportable segment: nil (3)Where there is no reportable segment, or the total assets and liabilities for such segment can not be released, the reasons shall be explained (4)Other explanation 7. Major trading and items shows influence on investors’ decision-making 8. Other In accordance with the requirements of the Regulatory Guidelines of Listed Companies No. 4 - Actual Controller, Shareholders, Related Parties, Purchaser and Commitments and Fulfillment of Listed Companies (CSRC Announcement No. [2013] 55) of China Securities Regulatory Commission, on June 7, 2014, Luoniushan Co., Ltd. (hereinafter referred to as “Luoniushan”) sent out the Letter about Changing the Commitments of Luoniushan Co., Ltd. to Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd. to the Company, and made commitments that Luoniushan shall actively seek reorganization party to reorganize the assets of Dadonghai within three years from the date the Company’s general meeting of shareholders considered and approved this commitment. The above matters have been considered and approved by the general meeting of shareholders of Dadonghai on June 27, 2014. On February 22, 2017, the Company received from Luoniushan a Letter on Progress in the Planning of Commitment Implementation, in which Luoniushan intended to transfer 100% of the equity it held in the Industrial Company, a wholly-owned subsidiary (specifically, the Industrial Company will first be transferred with part of financial assets equity held by Luniushan and of 6.91% equity of Sanya Rural Commercial Bank Co., Ltd.) to the Company, the transaction was made in cash with transaction amount of about RMB300 million. The proposal was not adopted at the 11th extraordinary meeting of the eighth board of directors of the Company due to the Company's lack of sufficient debt repayment ability. On June 23, 2017, Luoniushan issued to the Company a Letter on Change in Term of Commitment by Luoyunshan Co., Ltd. to Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd., extending Luoniushan's performance period of the above restructuring commitment of the Company by 6 months, whichmeans the deadline for the fulfillment of reorganization commitment was changed to December 27, 2017.As the reorganization would take a certain amount of time, on November29, 2017, Luoniushan again applied to extend the performance period of the reorganization commitment for two years, that is, the performance deadline of the reorganization commitment was changed from December 27, 2017 to December 26, 2019, which was not approved at the fourth extraordinary general meeting of shareholders of the Company in 2017. XVII. Note on financial statement of parent company 1. Accounts receivable (1)Disclosure of account receivables by category In RMB/CNY Ending balance Beginning balance Book balance Provision for bad Book balance Provision for bad Category debt Book value debt Book Amount Ratio Amount Accrual Amount Ratio Amount Accrual value ratio ratio Accounts receivable with provision for bad debts based on single item Accounts receivable with provision for 230,062.48 100.00% 74,075.60 32.20% 155,986.88 500,510.47 100.00% 74,075.60 14.80% 426,434.87 bad debts based on portfolios Total 230,062.48 100.00% 74,075.60 32.20% 155,986.88 500,510.47 100.00% 74,075.60 14.80% 426,434.87 If the bad debt provision of receivable are accrual on general model of expected credit losses, relevant bad debt provision should released reference to the disclosure methods for other account receivable: □Applicable√Not applicable Released by account age In RMB/CNY Account age Ending balance Within 1 year (inclusive) 139,108.68 1-2 years 566.00 2-3 years 785.00 3-4 years 18,633.00 4-5 years 3,397.00 Over 5 years 67,572.80 Total 230,062.48 (2)Provision, reversal or recovery of provision for bad debts in the period Provision for bad debt in the period In RMB/CNY Beginning Amount changed in the period Category balance Accrual Reversal or Charge off Ending balance switch-back Based on portfolios 74,075.60 74,075.60 Total 74,075.60 74,075.60 Including the major amount that reversal or switch-back in the period: nil (3)Account receivable actually charge off in the period: nil (4)Top five accounts receivable in terms of ending balance collected by the debtor Name Relationship with Book balance Account age Proportion in total amount of the Company accounts receivable(%) Shanghai Hecheng International Travel Non-related party 35,788.40 Within 1 year 15.56% Service Co., Ltd. Yangpu Huayu Road and Bridge Non-related party 18,633.00 Over 5 years 8.10% Technology Co., Ltd. Guangzhou Institute of Design Non-related party 38,980.00 Over 5 years 16.94% Shenzhen Tenpay Technology Co., Ltd. Non-related party 46,621.46 Within 1 year 20.26% Tianjin Watermelon Tourism Limited Non-related party 24,414.82 Within 1 year 10.61% Liability Company Total 164,437.68 71.47% (5)Account receivable that at terminated due to the financial assets transfer (6)Assets and liabilities resulted by account receivable transfer and continues involvement : nil Other explanation: nil 2. Other account receivable In RMB/CNY Item Ending balance Beginning balance Other account receivable 1,242,181.64 458,242.73 Total 1,242,181.64 458,242.73 (1) Interest receivable 1) Category: nil 2) Significant overdue interest: nil 3)Provision for bad debt □Applicable√Not applicable (2) Dividend receivable 1)Category: nil 2)Significant dividend receivable with over one year account age: nil 3)Provision for bad debt □Applicable√Not applicable (3)Other account receivable 1)Released by nature In RMB/CNY Nature Ending book balance Opening book balance Utility bills 206,254.34 185,368.69 Petty cash 838,955.14 133,411.23 Attorney fee 77,534.25 77,534.25 Social insurance and housing provident 57,803.91 63,264.56 funds Deposit 600.00 600.00 Court cost 62,970.00 Total 1,244,117.64 460,178.73 2)Provision for bad debt: nil Change of the book balance for major amount changed in loss provision □Applicable√Not applicable Released by account age In RMB/CNY Account age Ending balance Within 1 year (inclusive) 1,241,881.64 4-5 years 600.00 Over 5 years 1,636.00 Total 1,244,117.64 3)Provision, reversal or recovery of provision for bad debts in the period Provision for bad debt in the period In RMB/CNY Category Beginning balance Amount changed in the period Ending balance Accrual Reversal or switch-back Based on portfolios 1,936.00 1,936.00 Total 1,936.00 1,936.00 Including major provision for bad debt reversal or switch-back in the period: nil 4)Other account receivable actually charge off in the period: nil 5)Top five other accounts receivable in terms of ending balance collected by the debtor In RMB/CNY Account Proportion in total Ending balance of Name Nature Ending balance age amount of other accounts provision for bad receivable at period-end debt Wen Ping Petty cash 710,000.00 Within 1 57.07% 0.00 year Hainan New Concept Attorney fee 77,534.25 Within 1 6.23% 0.00 Law Firm year Peng Guoxing Utility bills 70,422.98 Within 1 5.66% 0.00 year Sanya Suburbs People’s Court cost 62,970.00 Within 1 5.06% 0.00 Court year Guo Yubo Petty cash 60,369.61 Within 1 4.85% 0.00 year Total -- 981,296.84 -- 78.88% 0.00 6)Account receivables related to government subsidies: Nil 7)Other receivable for termination of confirmation due to the transfer of financial assets: Nil 8)The amount of assets and liabilities that are transferred other receivable and continued to be involved: Nil 3. Long-term equity investment In RMB/CNY Ending balance Beginning balance Item Book balance Impairment Book value Book balance Impairment Book value provision provision Investment for 1,000,000.00 1,000,000.00 1,000,000.00 1,000,000.00 subsidiary Total 1,000,000.00 1,000,000.00 1,000,000.00 1,000,000.00 (1)Investment for subsidiary In RMB/CNY Invested Beginning Increase Decrease Ending Impairment Ending balance of enterprise balance in the in the balance provision in current impairment period period period provision Hainan Wengao Tourist Resources 1,000,000.00 1,000,000.00 Development Co., Ltd. Total 1,000,000.00 1,000,000.00 (2)Investment for joint venture and associated enterprise: nil (3)Other explanation: nil 4. Operating income and cost In RMB/CNY Item Current period Last period Income Cost Income Cost Main business 14,241,961.04 5,514,477.93 16,173,929.32 6,000,063.36 Total 14,241,961.04 5,514,477.93 16,173,929.32 6,000,063.36 Whether the new revenue standards been implemented □Yes √No Other explanation: nil 5. Investment income: nil 6. Other XVIII. Supplementary information 1. Details of current non-recurring profits and losses √Applicable□Not applicable In RMB/CNY Item Amount Note Other 160,030.46 Clean up the long-term unpaid payable Total 160,030.46 -- Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according to the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss, explain reasons □Applicable√Not applicable 2. Return on equity (ROE) and earnings per share (EPS) Weighted Earnings per share Profit during the reporting period average ROE Basic Diluted EPS(RMB/Share) EPS(RMB/Share) Net profits attributable to ordinary shareholders of the 0.97% 0.0021 0.0021 Company Net profits attributable to ordinary shareholders of the Company after deduction of non-recurring profits or 0.76% 0.0016 0.0016 losses 3.Accounting difference between IFRS and CAS (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 (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 (3)Explanation on data differences under the accounting standards in and out of China; as for the differences adjustment audited by foreign auditing institute, listed name of the institute 4. Other Section XI. Documents available for references I. Text of Semi-Annual Report 2019 with signature of the legal person; II. 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); III. The original manuscripts of all documents and announcements of the Company publicly disclosed on website appointed by CSRC; IV. Other relevant documents The above said documents are prepared in the security department of the Company Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd. Chairman: Yuan Xiaoping 8August 2019
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