*ST东海B(200613)2005年年度报告摘要（英文版）

海南大东海旅游中心股份有限公司 Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd. Annual Report Summary (Overseas) For the Year of 2005 Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd. 2005 Annual Report Summary §1 Important Declaration 1.1 The Board of Directors and the Supervisory Committee of Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd. (hereinafter referred to as the Company) and its directors, supervisors and senior executives guarantee that there are no significant omissions, fictitious or misleading statements carried in the Report and we will accept individual and joint responsibilities for the truthfulness, accuracy and completeness of the Report. This summary is abstracted from the completed text of Annual Report 2005, for details of the report please go to the complete text. 1.2 No Director(s), supervisor(s) and senior executive(s) declares disagreement on the truthfulness, accuracy and completeness. 1.3 Director(s) absented the board meeting Name of the Director Reason of absent Consignee He Lanping Due to work Zhao Man 1.4 Hainan Chongxin CPA and Grant Thornton CPA issued auditing reports respectively with “Unqualified audit opinion with explanation paragraph”. 1.5 Mr. Li Yuanbin, the Chairman of the Board, and Ms. Wu Yuanyuan, the General Manager, and Mr. Chen Liurong, the Chief Financial Officer declares: the Financial Statement in the report is secured for its truthfulness and completeness. §2 Company Profile 2.1 Company Profile Stock ID *ST Donghai A, *ST Donghai B Stock Code 000613、200613 Stock Exchange Shenzhen Stock Exchange Registered address: Dadonghai Sanya Registered address and office address Office address: Dadonghai Sanya For registered address: 572021 Post Code For office address: 572021 Website http://www.cninfo.com.cn Email. hnddht@21cn.com 2.2 Liaison people Secretary of the Board Representative of Stock Affairs Name Wu Congfeng Wang Hongjuan Address Dadonghai Sanya Dadonghai Sanya Tel. 0898-88219888 Ext. 8264 0898-88219888 Ext. 8264 Fax. 0898-88212298 0898-88212298 Email. hnddht@21cn.com hnddht@21cn.com §3 Financial Highlights 3.1 Major accounting data In RMB’000 2005 2004 Increase/decrease (%) 2003 Major business turnover 14,789 13,354 10.75 13,333 Gross profit 8,039 (12,279) 165.47 (54,752) Net profit 8,039 (12,279) 165.47 (54,752) Net profit deducted non-recurring (9,325) (14,081) 33.78 (17,318) gain/loss Net Cash flow generated by business 6,907 1,630 323.74 (3,873) operation End of 2005 End of 2004 Increase/decrease (%) End of 2003 Gross Assets 159,273 147,388 8.06 154,934 Shareholders’ Equity (Exclude (46,864) (54,903) 14.64 (42,624) Minority Shareholders’ Equity) 3.2 Major financial indexes In RMB 2005 2004 Increase/decrease (%) 2003 Earnings per share 0.02 -0.03 150.00 -0.15 Earnings per share (Note) 0.02 -0.03 150.00 -0.15 Net earnings / capital ratio - - - - Net earnings / capital ratio basing on net profit after deducting of non-recurring - - - - gain/loss (%) Net Cash flow per share generated by (0.03) 0.01 -400.00 -0.01 business operation End of End of End of Increase/decrease (%) 2005 2004 2003 Net asset per share (0.13) -0.15 13.33 -0.12 Net asset per share, adjusted (0.13) -0.15 13.33 -0.12 Non-recurring gain and loss items √ applicable □ not applicable In RMB’000 Non-recurring gain and loss items Amount None business income / expense (net) 17,364 Total 17,364 3.3 Diversity between the international and domestic accounting standards √Applicable □ Non-applicable In RMB’000 (loss)/gain of the year Net value of (liability)/ assets Diversity between the international and Year ended Dec. 31 at Dec. 31 domestic accounting standards 2005 2004 2005 2004 Financial Statement under China 7,494 (14,213) (46,864) (54,905) Accounting Standard Influence of adjustment under IAS Interests of common reserves of legal items and reducing of other payables transferred to the profit of current year 545 1,934 - Re-presented amount 8,039 (12,279) (46,864) (54,905) §4 Changes in Share Capital & Particulars about Shareholders 4.1 Table of capital share movement In thousand shares Before the change Changed (+,-) After the changed Amount Proportion Sub-total Amount Proportion I. None negotiable shares 231,000,000 63.44% 0 231,000,000 63.44% 1. Promoter’s shares 109,857,000 30.17% 0 109,857,000 30.17% Incl. State-owned shares 36,327,000 9.98% 0 36,327,000 9.98% Domestic legal person shares 73,530,000 20.20% 0 73,530,000 20.20% Overseas legal person shares 0 0.00% 0 0 0.00% Others 0 0.00% 0 0 0.00% 2. Legal person shares placed 121,143,000 33.27% 0 121,143,000 33.27% 3. Employees’ shares 0 0.00% 0 0 0.00% 4. Preference shares or others 0 0.00% 0 0 0.00% II. Negotiable shares 133,100,000 36.56% 0 133,100,000 36.56% 1. Common shares in RMB 45,100,000 12.39% 0 45,100,000 12.39% 2. Foreign shares in domestic 88,000,000 24.17% 0 88,000,000 24.17% market 3. Foreign shares in overseas 0 0.00% 0 0 0.00% market 4. Others 0 0.00% 0 0 0.00% III. Total of capital shares 364,100,000 100.00% 0 364,100,000 100.00% 4.2 Top Ten Shareholders and Top Ten Negotiable Share Holders In thousand shares Total shareholders at the end of the report period 18,914 Top Ten Shareholders Proportion of Total number shares Non-circulatin Pledged or Full name of shareholder Nature of shareholders shares held (%) held g shares held frozen shares Haikou Grocery Co., Ltd. Legal person share 16.48 60,000 60,000 60,000 China Great Wall Assets Management State-owned share 9.98 36,327 36,327 0 Co., Ltd. Hainan Shanya Yinnong Industrial Legal person share 2.72 9,900 9,900 0 Development Co., Ltd. Huaxia Securities Co., Ltd. Legal person share 1.81 6,600 6,600 6,600 Shanghai Jingxian Investment Co., Ltd. Legal person share 1.37 4,973 4,973 0 China International Trade Trust & State-owned share 1.09 3,960 3,960 0 Investment Co., Ltd. Hainan Chuangye Venture Capital Co., State-owned share 1.07 3,894 3,894 0 Ltd. Sanya Zhongxing Development Co., Legal person share 1.00 3,630 3,630 0 Ltd. Yangpu Jinyu Industrial Co., Ltd. Legal person share 0.92 3,366 3,366 0 China Agriculture Bank Haikou Jinmao State-owned share 0.91 3,300 3,300 0 Branch Top Ten Shareholders of Negotiable Shares Full name of shareholder Negotiable shares held at the end of report term Share categories (A, B, H or others) LIU ZILI 1,880 B shares XIANG XING LIANG 1,068.85 B shares LIU RONG 884 B shares LI ZHAO 785 B shares LI CHUN XIANG 761.39 B shares LI JING ZHI 761.39 B shares JIANG JIAN JUN 740 B shares LIU YU QIN 701.6 B shares ZHANG TING 696.115 A shares HAN TIE FU 622.9 B shares th The first shareholder and the 7 shareholder – Hainan Chuangye Venture Capital Co., Ltd. Notes to relationship or “action in are related parties; they are under the controlling of Hainan Chuangye Venture Capital Co., concert” among the top ten shareholders.Ltd. None of the other shareholders are regarded as acting in concerts in accordance with the rules of information disclosure on change of shareholding._ 4.3 Change in Controlling Shareholder and the Actual Controller 4.3.1 Change in Controlling Shareholder and the Actual Controller □applicable √ not applicable 4.3.2 Particulars about Controlling Shareholder and the Actual Controller The controlling shareholder: Haikou Grocery Co., Ltd. Date of incorporation: August 28, 1998 Legal representative: Fan Pingyue Registered capital: RMB113,693,900 Major business: processing of animal and meat products, vending of frozen Grocerys and side products of agriculture, refrigeration stoking, real-estate developing The practical controlling party: Zhong Wenkui Nationality: China Obtain resident right in other nation or region: No Occupation in latest 5 years: real-estate investment, enterprise investment, business operation and management Profile of the practical controller: Mr. Zhong Wenkui, 49 of age, major background: use to be the vice chairman of Haikou Xingao Refrigeration Co., Ltd., currently he is the chairman of Hainan Juye Education Investment Co., Ltd. 4.3.3 Controlling relationship chart Zhong Wenkui 35% Hainan Chuangye Venture Capital Co., LTd. 69.4% 69.4％ Haikou Grocery Co., Ltd. 16.48％ Hainan Dadonghai Tourism Center (Holdings) Co., Ltd. §5 Directors, Supervisors and Senior Executives 5.1 Changes in Shares Held by Directors, Supervisors and Senior Executives Total payments Drawing from drew from the the shareholding Shares held at Shares held at Cause of company or the Name Position Sex Age Job term Company in the year-begin year-end change relevant report period company (RMB’0000) (Yes/No) Jun.16 2005 – No Li Yuanbin Director, Chairman M 55 0 0 _ 6.80 Jun. 16 2008 Jun.16 2005 – Yes Zheng Jirong Vice Chairman M 45 2,673 2,673 _ 0.80 Jun. 16 2008 Huang Director & Deputy Jun.16 2005 – Yes M 35 0 0 _ 0.80 Qingwang GM Jun. 16 2008 Jun.16 2005 – Yes Fu Cai Director 34 0 0 _ 0.80 Jun. 16 2008 Jun.16 2005 – No Liu Juntao Director M 37 0 0 _ 0.80 Jun. 16 2008 Jun.16 2005 – No Li Wei Director M 44 0 0 _ 2.67 Jun. 16 2008 Independent Jun.16 2005 – No Zhao Man F 53 0 0 _ 1.20 Director Jun. 16 2008 Leng Independent Jun.16 2005 – No M 50 0 0 _ 0.80 Mingquan Director Jun. 16 2008 Independent Jun.16 2005 – No He Lanping F 48 0 0 _ 0.00 director Jun. 16 2008 Chairman of Yes Jun.16 2005 – Huang Wencai Supervisory M 36 0 0 _ 0.80 Jun. 16 2008 Committee Jun.16 2005 – No Yan Jianhua Supervisor M 43 0 0 _ 10.00 Jun. 16 2008 Wang Jun.16 2005 – No Supervisor F 29 0 0 _ 0.00 Hongjuan Jun. 16 2008 Apr.13 2004 – No Wu Yuanyuan General Manager F 30 0 0 _ 6.00 Jun. 16 2008 Vice General Jun.1, 2002 – No Chen Liurong M 41 0 0 _ 5.62 Manager Jun. 16 2008 Secretary of the Apr.13 2004 – No Wu Congfeng M 33 0 0 _ 6.42 Board Jun. 16 2008 Total - - - - 2,673 2,673 - 43.51 - §6 Report of the Board 6.1 Overall business situation in the report term The Company is only one listed company with co-existing of A and B share, and takes tourism services as the main business. The main business scopes of the Company are: development and management of real-estate, lodgings and catering, tourism services, proxy in sales of locomotive and ship tickets, etc. In recent year, with the rapid development of Hainan tourism, the traveling market ifn Sanya is exuberant day by day. In 2005, the Company comprehensively adjust the ideas of work and management; on the one hand, the Company established complete management rule, fully strengthened the interior management, implemented increase of production but savings, increased income but reduced expenses, successfully resisted the attack of typhoon, and reduced the losses caused by it; on anther hand, the Company enlarged the transformation investment on hotel, renewed the operation facility, improved the operation environment, promoted the competitive forces, fully utilized the geographic position and environment superiority of the hotels of the Company, held the chances of One Hundred Anniversary of Golden Chicken Film Festival, Carnival of Hainan Island and Miss World, held all opportunities to improve the profit-gaining ability of main operation, which all made large growth of the hotel management. At the same time, the Company completed effectively the reorganization of part of debts and optimization of hotel management, reduced the burden of part of interest, created new growth of profit and made foundations for turning losses into gains for the Company in the report period. However, with the newly-increasing of star hotels and family hotels in Sanya, the supply of guest room sharply increased, the malign competitions by cutting prices in hotel industry became more intense, which all cause the price on room service management glided down year by year. Under the larger growth of guest room reception, the income from main operation just realized growth of 11%. In the report period, the Company realized income from main operation amounting to RMB 14,789,000 with a increase of 10.75% over the same period of last year; the profit from main operation amounting to RMB 13,967,000 with a increase of 14.88% over the same period of last year; net profits amounting to RMB 8,039,000 with a increase of 165.47% over the same period of last year. Because the main business of the Company had no substantive changed, the main reorganization of debts have not completed, the financial expense on annual interest amounted to RMB 8,360,000. Excluding the non-recurring losses and gains, the Company gained losses amounting to RMB 9,320,000 with a decrease of RMB 4,760,000 over last year. 6.2 Principal businesses classified based on industries/products In RMB’000 Distribution on industries Increase/decrease of Major business cost On industry or Major business Major business Gross profit ratio Gross profit ration major business increased/decreased product turnover cost % increased/decreased turnover (%) over corresponding term Hotel 14,789 9 94.44 10.75 -31.27 3.39 Including: related transactions Distribution on products Hotel 14,789 9 94.44 10.75 -31.27 3.39 Including: related transactions Principle of pricing the relatedOn market price transactions Statement on the necessity and None continuousness of related transactions 6.3 Major businesses distribution on regions In RMB’000 Regions Major business turnover Increase/decrease of major business turnover (%) Sanya 14,789 10.75 6.4 Application of the raised proceeds □Applicable √Inapplicable Particulars about the changed projects □Applicable √Inapplicable 6.5 Particulars about non-raised capital projects □Applicable √Inapplicable 6.6 Explanation of the Board of Directors on the “Qualified Opinion” made by the Certified Public Accountants √Applicable □Inapplicable In 2005 Certified Public Accountants issued unqualified audit report with explanatory paragraph Auditing organ thought, the aforesaid financial report has reflected the financial situation dated October 31, 2005 and profit and cash flow ended as of the disclosed date based on International Financial Report Standards with authentic and just & sound. Otherwise, the CPAs presented no qualified opinion so submit to pay attention to statement of attachment II, the net current liability and net liability of the Company respectively amounted to RMB 154,807,000 and RMB 46,864,000 on October 31, 2005. These condition and other items in statement of attachment II showed material uncertain elements existed or which would impact on capacity of the Company’s sustainable operation. Board of Director of the Company made statement on explanatory in auditing report: Through negotiation with major creditor, the Company nowadays has won compromise and supporter from major creditor, the Company made agreement with Sanya Branch of Agricultural Bank that temporarily not carrying out judicial recourse of implementation of loan mortgage before March 8, 2007; would made intention of debts rephrasing with Haikou Office of China Cinda Assets Management Corporation. In 2006, through debts rephrasing, and connected with Share Merger Reform as well as measures of self-financed assets, bid for investments, and the Company would enhance input of hotel reconstruction so as to lift the competitive power of hotel. In view of the above, we thought that the financial condition of the Company would appear essential improvement, it is favorable to realize positive of operation capital and shareholders’ equity, short-term liquidity and other financial indexes turned well too. After implementation of the said debts rephrasing and Share Merger Reform, short-term liquidity of the Company would be improved and sustainable operation capacity of the Company would be secured. 6.7 The preplan on the profit distribution and capitalization of capital public reserve of the Board of Directors □Applicable √Inapplicable The Company did not appropriate share distribution preplan though the Company achieved the profit in the report period. √Applicable □Inapplicable After being audited by Hainan Chongxin CPA and Grant Thornton CPA, the net profits the Company realized in 2005 amounted to RMB 8,039,000; with carrying forward the undistributed profit amounting to RMB-466,457,000 in 2004, the profit distributable to the shareholders this year amounted to RMB-458,418,000. Because the Company gained profits this year, the accumulative undistributed profit was minus. The Board of Directors of the Company planned that it did not conduct profit distribution this year, and did not covert capital reserve into shares. Examined by the 1st meeting of the 5th Board of Directors, the pre-plan on profit distribution of 2005 was as follows: Because the Company gained profits this year, the accumulative undistributed profit was minus. The Board of Directors of the Company planned that it did not conduct profit distribution this year, and did not covert capital reserve into shares. The said pre-plan should be submitted to 2005 Annual Shareholders’ General Meeting. §7. Significant Events 7.1 Purchase of assets □Applicable √Inapplicable 7.2 Sales of assets √Applicable □Inapplicable In ten thousand Contribution to Assets net profit of the ownership Debts and Gains Company of the Related involved in the Liabilities and Explain Transaction assets sold from transacti assets involved in The assets sold Date of sales sales price losses principle of parties the on or transferred or the assets from pricing year-beginning not not transferred or sales to the date of not sales Operation Hainan Enbi right of land Joint Industrial Oct., 22, 2005 1,800.00 1,101.00 1,101.00 No Yes Yes and its partial negotiation Co., Ltd. attachment Influence on consistence of business and stability of managers caused by the issues interfered in purchase and sale The said capital transfer modified the financial situation of the Company which became the main profit resource of the Company’s turning loss into gain, and lay the foundation for sustainable development and operation of the Company 7.3 Significant guarantee □Applicable √Inapplicable 7.4 Significant related transactions 7.4.1 Related transactions related to the routine operation □Applicable √Inapplicable 7.4.2 Current related credits and liabilities □Applicable √Inapplicable Use of funds and plan on paying off the debt □ Applicable √Inapplicable The plan could be settled down use of funds before the end of 2006 totally or not □Yes □No √Inapplicable 7.5 Entrusted assets □Applicable √Inapplicable 7.6 Implementation of commitment items 7.6.1 The Schedule for the Share Merger Reform Through inquiring shareholders of non-tradable shares, it estimated that the Company would enter into procedure of Share Merger Reform on June 30, 2006. 7.6.2 Other Commitments □Applicable √Inapplicable 7.7 Significant lawsuit and arbitration □Applicable √Inapplicable §8. Report of the Supervisory Committee √Applicable □Inapplicable I. Meetings of the Supervisory Committee held in the report period and decisions made In the report period, Supervisory Committee of the Company held three meetings, with details as follows: (I) The 9th meeting of the 4th Supervisory Committee On April 11, 2005, the meeting examined and approved Work Report of the Supervisory Committee 2004, Annual Report 2004 and Summary of the Annual Report, Proposal on Election of Changes on Supervisory Committee and Nominating Shareholder Representative as Supervisors of the 5th Supervisory Committee, Opinions on Explanations on Matters Concerned in Auditor’s Report by Board of Directors, Proposal on Revision on Rules and Procedure of the Supervisory Committee. The relevant resolutions were published on Securities Times, Hong Kong Commercial Daily and www.cninfo.com.cn dated on April 13, 2006. (II) Extraordinary meeting of the 5th Supervisory Committee It was held on June 16, 2005, the meeting examined and approved the Proposal on Election on Chairman of the 5th Supervisory Committee, and the relevant resolutions were published on Securities Times, Hong Kong Commercial Daily and www.cninfo.com.cn dated on June 17, 2005. (III) The 1st meeting of the the 5th Supervisory Committee It was held on August 4, 2005, the meeting examined and approved the Semi-Annual Report 2005 and Summary, and the relevant resolutions were published on Securities Times, Hong Kong Commercial Daily and www.cninfo.com.cn dated on August 6, 2005. II. Independent opinions of the Supervisory Committee 1. Operation of the Company according to law According to relevant State laws and regulations, the Supervisory Committee of the Company supervised the holding procedures and resolutions of the Shareholders’ General Meeting and the Board of Directors, implementation of the resolutions of the Shareholders’ General Meeting by the Board, implementation of duties of the senior executives and the management system of the Company, and believed that, the information disclosure was timely and accurate, the directors and senior executives of the Company could perform strictly according to the national laws, regulations and Articles of Association, strictly implemented all the resolutions of shareholders’ general meeting; there were no behaviors against laws, regulations or Articles of Association of the Company, nor behaviors that had done harm to the interest of the Company. 2. Inspection of the financial status of the Company In the report period, Supervisory Committee of the Company aperiodically inspected and supervised the financial statements, operations and other important activities of the Company; examined the various financial reports, annual final account; meanwhile, checked the implementation of the financial systems and management rules and no behaviors against the relevant regulations. In the report period, Supervisory Committee of the Company aperiodically inspected and supervised the financial statements, operations and other important activities of the Company; examined the various financial reports, annual final account; meanwhile, checked the implementation of the financial systems and management rules and no behaviors against the relevant regulations. Hainan Chongxin CPA and Grant Thornton CPA respectively audited the 2005 financial report of the Company and issued the unqualified with explanatory paragraph of modified report. The Supervisory Committee believed that the Financial Report 2005 of the Company could truly reflect the financial status and operation achievement of the Company, and the auditor’s report was fair, objective, true and faithful. 3. Use of the latest raised fund of the Company The latest issues of shares of the Company happened in 1997, of which small amount was invested in the commitment project, others were appropriated by the original largest shareholder. At present, the total amount was withdrawn the bad account and the project was stopped. 4. In the report period, the procedures on purchase of asset of the Company was legal, and the transaction was reasonable, there were no harm to the equity of the shareholder, losses of assets of the Company. §9. Financial Report 9.1 Auditors’ opinion 9.1.1 Auditors' report To the members of Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd. (incorporated in the People's Republic of China with limited liability) We have audited the accompanying balance sheet of Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd. (the "Company") as of 31 December 2005, and the related statements of income, cash flows and statement of changes in equity for the year then ended. The financial statements as set out on pages 2 to 31 are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements give a true and fair view of the financial position of the Company as at 31 December 2005 and of its profit and cash flows for the year then ended in accordance with International Financial Reporting Standards. Without qualifying our opinion, we draw attention to note 2 to the financial statements which indicates that the Company reported net current liabilities of RMB154,807,000 and net liabilities of RMB46,864,000 as at 31 December 2005. These conditions, along with other matters as set out in note 2, indicate the existence of a material uncertainty which may cast significant doubt about the Company's ability to continue as a going concern. Grant Thornton Certified Public Accountants Hong Kong 19 April 2006 Income Statement For the year ended 31 December 2005 Notes 2005 2004 RMB'000 RMB'000 Revenue 6 14,789 13,354 Cost of sales (822) (1,196) Gross profit 13,967 12,158 Other income 7 17,451 2,268 Selling expenses (8,780) (10,361) General and administrative expenses (6,313) (7,453) Profit / (Loss) from operations 8 16,325 (3,388) Net finance costs 9 (8,286) (8,891) Profit / (Loss) before taxation 8,039 (12,279) Income tax expense 10 - - Profit / (Loss) for the year 8,039 (12,279) Earning / (Loss) per share (RMB Fen) 11 2.21 (3.37) 9.1.2 Balance sheet As of 31 December 2005 Notes 2005 2004 RMB'000 RMB'000 ASSETS AND LIABILITIES Non-current assets Property, plant and equipment 12 87,349 91,738 Land use right 13 35,039 35,907 122,388 127,645 Current assets Land exchange right 14 8,670 9,251 Inventories 15 360 370 Trade and other receivables 16 21,898 3,136 Tax recoverable 2,818 4,630 Cash at banks and in hand 3,139 2,356 36,885 19,743 Current liabilities Trade and other payables 95,574 96,281 Borrowings 17 96,118 105,348 191,692 201,629 Net current liabilities (154,807) (181,886) Non-current liabilities Borrowings 17 14,445 662 Net liabilities (46,864) (54,903) EQUITY Equity attributable to equity holders of the Company Share capital 18 364,100 364,100 Reserves 19 (410,964) (419,003) Capital deficits (46,864) (54,903) 9.1.3 Statement of changes in equity for the year ended 31 December 2005 Equity attributable to equity holders of the Company Share Capital Accumulated capital reserve losses Total RMB'000 RMB'000 RMB'000 RMB'000 Balance at 1 January 2004 364,100 47,454 (454,178) (42,624) Loss for the year - - (12,279) (12,279) Total recognised income and expense for the year - - (12,279) (12,279) Balance at 31 December 2004 and at 1January 2005 364,100 47,454 (466,457) (54,903) Profit for the year - - 8,039 8,039 Total recognised income and expense for the year - - 8,039 8,039 Balance at 31 December 2005 364,100 47,454 (458,418) (46,864) 9.1.4 Cash flow statement for the year ended 31 December 2005 2005 2004 RMB'000 RMB'000 Cash flows from/(used in) operating activities Profit / (Loss) before taxation 8,039 (12,279) Adjustments for : Depreciation 4,599 4,606 Amortisation of land use right 868 869 Impairment charge 860 192 Loss on disposal of property, plant and equipment - 396 Impairment provision write back (17,419) - Loss on disposal of farms' operation right 990 - Interest income (4) (2) Interest expense 8,290 8,893 Operating profit before changes in working capital 6,223 2,675 (Increase)/Decrease in trade and other receivables (22) 486 Decrease in inventories 10 242 Decrease in tax recoverable 1,812 838 Decrease in trade and other payables (1,086) (2,611) Cash generated from operations 6,937 1,630 Interest paid (30) - Net cash generated from operating activities 6,907 1,630 Cash flows from investing activities Purchases of property, plant and equipment (210) (708) Proceeds from disposal of property, plant and equipment - 751 Net proceeds from disposal of farms' operation right 15,510 - Interest received 4 2 Net cash generated from investing activities 15,304 45 Cash flows from financing activities Repayment of bank loans and other loan (3,000) (35) Capital element of finance lease liability (194) (223) Advance to a lender (18,100) - Interest element of finance lease payment (134) (134) Net cash used in financial activities (21,428) (392) Net increase in cash and cash equivalents 783 1,283 Cash and cash equivalents at 1 January 2,356 1,073 Cash and cash equivalents at 31 December 3,139 2,356 9.3 Explanation on changes of accounting policy, accounting estimation and settlement compared with the latest annual report □Applicable √Inapplicable 9.4 Contents, correct amount, reason and its influence of significant accounting errors □Applicable √Inapplicable 9.5 Explanation on change of consolidated scope compared with the latest annual report □Applicable √Inapplicable Board of directors of Hainan Dadonghai Turism Center (Holdings) Co., Ltd. April 20, 2006