司公限有份股心中游旅海东大南海 2018 文全告报度年半年 Stock Code: 000613, 200613 Short Form of the Stock: Dadonghai-A, Dadonghai-B 海南大东海旅游中心股份有限公司 Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd. Semi-Annual Report 2018 (Full-text) Disclosure Date: 11 August 2018 1 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 Section I. Important Notice, Contents and Paraphrase Important Notice: Board of Directors, Supervisory Committee, all directors, supervisors and senior executives of Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd. (hereinafter referred to as the Company) hereby confirm that there are no any fictitious statements, misleading statements, or important omissions carried in this report, and shall take all responsibilities, individual and/or joint, for the reality, accuracy and completion of the whole contents. Yuan Xiaoping, Principal of the Company, Fu Zongren, person in charger of accounting works and Fu Zongren, person in charge of accounting organ (accounting principal) hereby confirm that the Financial Report of 2018 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 2018................................................................................................................ 2 Section I Important Notice adn Paraphrase.......................................................................................... 2 Section II Company Profile and Main Finnaical Indexes.................................................................... 4 Section III Summary of Company Business........................................................................................ 6 Section IV Discussion and Analysis of Operation............................................................................... 7 Section V Important Events................................................................................................................12 Section VI Changes in shares and particular about shareholders.......................................................18 Section VII Preferred Stock................................................................................................................22 Section VIII Particulars about Directors, Supervisors and Senior Executives...................................23 Section IX Corporate Bonds...............................................................................................................25 Section X Financial Report................................................................................................................ 26 Section XI Documents available for reference...................................................................................77 2 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 Paraphrase Items Refers to Contents CSRC Refers to China Securities Regulation Commission SSE Refers to Shenzhen Stock Exchange Company Law Refers to Company Law of The People’s Republic of China Securities Law Refers to Securities Law of The People’s Republic of China Company, the Company Refers to Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd. Article of Association Refers to Article of Association of Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd. Shareholders’ General Meeting of Hainan Dadonghai Tourism Centre (Holdings) Shareholders’ General Meeting Refers to 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 2018, 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 Finnaical Indexes I. Company information Short form of the stock Da donghai-A, Dadonghai-B Stock code 000613, 200613 3 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 Short form of the Stock after N/A changed Stock exchange for listing Shenzhen Stock Exchange Name of the Company (in Chinese) 司公限有份股心中游旅海东大南海 Short form of the Company (in Chinese) 海东大 Foreign name of the Company Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd Foreign name of short form of 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 in Annual Report 2017. 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 in Annual Report 2017. IV. Main accounting data and financial indexes Whether it has retroactive adjustment or re-statement on previous accounting data 4 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 □ Yes √ No Same period Increase/decrease in this report Current period of last year y-o-y Operating revenue (RMB) 16,173,929.32 15,096,273.42 7.14% Net profit attributable to shareholders of the listed company 1,282,165.58 1,719,253.80 -25.42% (RMB) Net profit attributable to shareholders of the listed company 1,282,370.56 1,718,993.80 -25.40% after deducting non-recurring gains and losses (RMB) Net cash flow arising from operating activities (RMB) 3,110,677.60 3,231,073.10 -3.73% Basic earnings per share (RMB/Share) 0.0035 0.0047 -25.53% Diluted earnings per share (RMB/Share) 0.0035 0.0047 -25.53% Weighted average ROE (%) 1.65% 2.29% -0.64% Increase/decrease in this End of current End of last report-end over that of last period period period-end Total assets (RMB) 87,966,932.27 87,466,661.80 0.57% Net assets attributable to shareholder of listed company 78,417,579.68 77,135,414.10 1.66% (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 (Generally Accepted Accounting Principles) in the period. 2. Difference of the net profit and net assets disclosed in financial report, under both foreign accounting rules and Chinese GAAP (Generally Accepted Accounting Principles) □ Applicable √ Not applicable The Company had no difference of the net profit or net assets disclosed in financial report, under either foreign accounting rules or Chinese GAAP (Generally Accepted Accounting Principles) in the period. VI. Items and amounts of extraordinary profit (gains)/loss √Applicable □ Not applicable In RMB Item Amount Note Gains/losses from the disposal of non-current asset (including the -477.98 Loss from fixed assets disposal write-off that accrued for impairment of assets) 5 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 Other non-operating income and expenditure except for the 273.00 Refund of vehicle tolls aforementioned items Total -204.98 -- 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 6 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 Section III. Summary of Company Business I. Main businesses of the company in the reporting period Whether the company needs to comply with the disclosure requirements of the particular industry No The company's main business is hotel accommodation and catering services. Procurement of goods is mainly the goods and materials necessary for hotel and catering operations by taking the principle of low price and fine quality, some goods are purchased by directly signing purchase contracts with suppliers, and some good are purchased by procurement agents. The operation is mainly including the network sales, and supplemented by the 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 Decreased 0.33 million Yuan over that of year beginning, mainly because funds returned Account receivable increased in reporting period Increased 0.66 million Yuan over that of year beginning, mainly because utilities payable from Other receivables leasers increased at end of the Period and staff borrowings increased also Non current assets due within Decreased 0.46 million Yuan over that of year beginning, mainly because the long-term one year amortization expenses due within one year are amortized by month 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 7 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 Sanya City, and is about a 5-minute drive from downtown of Sanya City and about a 30-munite drive from Sanya Phoenix Airport. The hotel is only tens of meters distant from the sea level, possesses beautiful landscaping full of blooming flowers all the year round, and enjoys exceptional geography, natural environmental advantages. The hotel has opened for more than two decades which is one of the oldest hotels in Sanya and has received many domestic and foreign heads of state and national leaders. In the recent years, the company has comprehensively upgraded and rebuilt the hotel’s software and hardware facilities, further improved the hotels internal and external business environment, and effectively enhanced the business competitiveness. Currently, the management of the company’s hotel is still in the front rank among hotels in the same area, with the same scale, and at the same level. In the future work, the company will keep trying to improve the hotel’s internal and external business environment, strengthen the sales efforts and the staff construction, and further improve the operational capability. During the reporting period, the company's core competence had no significant change. 8 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 Section IV. Discussion and Analysis of Operation I. Introduction During the reporting period, the company realized main business income of 16,173,900 Yuan, increased by 1,077,700 Yuan compared with the same period last year, an increase of 7.14%; net profit of 1,281,600 Yuan, decreased by 437,600 Yuan compared with the same period last year, a decrease of 25.45%. During the reporting period, the Company keeps innovating in new market development and use marketing strategy in a flexible way to develop the sales channel, acquiring a large number of guest sources from Russian by making use of the favorable geographical advantage and environmental advantages. Moreover, we put more efforts in renovation and reforming of the equipment and facilities, strengthen skill training for the employees in order to improve the product quality. Strictly controlling the cost management, perfect the Company’s internal control system in order to earn and less expenditure costs, we completed the operation targets that formulated at beginning of the year basically. Main works are as: 1. Actively expand market, broaden marketing channels, and flexibly utilize marketing strategy to strive for a large number of Russian customers. During the reporting period, the company continued to increase the sales efforts of network marketing channels, strengthen the cooperation with the domestic leading travel network companies, such as Ctrip, Tuniu, Alitrip, Asiatravel, CFHC Tmall, etc., and make the best of network channels and e-commerce platforms to expand network marketing. Take advantage of hotel location, and flexibly utilize the marketing strategies to cooperate with Russian tourist suppliers including Haolide International Travel Agency, Youyi International Travel Agency and Shengda SinoTrip etc. to win a large number of Russian customers. During the reporting period, the company achieved main business income of RMB 15,096,300, an increase of RMB 3,033,500 compared with the same period last year, and rate of increase was 25.15%. 2. Continue to strengthen the training of service skills so as to improve the quality of hotel products and enhance the product competitiveness. The human resources mobility in the hotel industry is rather large, and the service skill training is becoming increasingly important. The company adheres to the “people-oriented” business philosophy, strengthens the business service skill training, enhances the corporate culture construction, constantly enriches the employees’ cultural life, and creates a harmonious working environment. The company also constantly strengthens the service skill training to improve the quality and market competitiveness of the company’s hotel products. 3. Adhere to the strict cost control, intensify the budget management and performance evaluation mechanism, continuously complete the internal control system, and improve the operational management efficiency. During the reporting period, the company focused on expanding its operations, strengthened the procurement cost control management, adopted performance evaluation mechanism and budget management, and took measures 9 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 such as online price inquiry and hotel industry price inquiry to implement the diversification of procurement cost inquiry channels, and shopped around for scientific control of operating costs. At the same time, the company continued to improve the internal control system, strengthen the internal control work norms, intensify the effective implementation of internal control work, increase revenues and reduce expenditures, and adhere to the safety production, which effectively improved the management efficiency, ensured the company’s operation safety, and maximized the enterprises benefits. In the second half of 2018, 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 and Analysis of Operation” Change of main financial data on a y-o-y basis In RMB Y-o-y Same period Current period increase/de Reasons for changes of last year crease Operation revenue 16,173,929.32 15,096,273.42 7.14% Operation cost 6,000,063.36 5,256,112.51 14.15% Sales expenses 2,800,956.10 2,458,144.93 13.95% Administrative expenses 5,356,455.21 5,089,450.57 5.25% Interest income declined in the Period and Financial cost 17,563.19 -180,672.66 109.72% last year’s interest are higher than the Period Net cash flow arising from 3,110,677.60 3,231,073.10 -3.73% operation activities At same period of last year, creditors’ Net cash flow arising from -2,040,626.12 -10,333,145.20 80.25% investment and renovation investment have investment activities major amount occurred Net cash flow arising from The contact account paid to Luoniushan -10,000,000.00 100.00% financing activities Group The net increase of cash in the period Net increase of cash and cash increased 1.04 million Yuan, while there was 1,070,051.48 -17,102,072.10 106.26% equivalent 17.1 million Yuan declined at same period of last year 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 10 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 In RMB Increase/decrea Increase/decrea Increase/decrea Operating Operating Gross profit se of gross se of operating se of operating revenue cost ratio profit ratio revenue y-o-y cost y-o-y y-o-y According to industries Tourism catering 16,173,929.32 6,000,063.36 62.90% 7.14% 14.15% -3.50% service According to products Room revenue 12,703,332.00 4,665,442.06 63.27% 8.79% 14.37% -2.75% Catering entertainment 1,911,816.00 1,097,359.52 42.60% 3.80% 16.79% -13.03% revenue Rental revenue 1,558,781.00 237,262.00 84.78% -1.21% 0.00% -0.21% According to region Hainan area 16,173,929.32 6,000,063.36 62.90% 7.14% 14.15% -3.50% III. Analysis of the non-main business □ Applicable √ Not applicable IV. Assets and liability 1. Major changes of assets composition In RMB Current period-end Same period-end last year Ratio in Ratio in Ratio Notes of major changes Amount total Amount total changes assets assets The cash flow growth during end of last Monetary fund 10,751,658.64 12.22% 10,108,175.91 10.51% 1.71% period to reporting period-end Account Fund return from receivables increased in 266,236.51 0.30% 337,187.05 0.35% -0.05% receivable the period Inventory 264,620.69 0.30% 253,215.05 0.26% 0.04% Increase of inventory in normal changes Investment real Mainly due to the depreciation and 8,621,742.21 9.80% 9,096,265.77 9.46% 0.34% estate amortization Long-term The registered capital invested for 1,000,000.00 1.14% 1.14% equity wholly-owned subsidiary 11 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 investment Fixed assets purchasing and routine Fix assets 38,017,199.39 43.22% 39,264,470.61 40.82% 2.40% depreciation Construction in Construction in process has carry-over at 978,211.64 1.02% -1.02% process same period of last year Mainly because utilities payable from Other account 800,136.44 0.91% 316,384.24 0.33% 0.58% leasers increased and staff borrowings receivable increased also Non current Mainly because the long-term assets due 716,972.51 0.82% 292,184.72 0.30% 0.52% amortization expenses due within one within one year year are amortized by month Other current Creditor’s investment of 9 million Yuan 2,195,699.54 2.50% 11,020,867.76 11.46% -8.96% assets at same period of last year Long-term The renovation expenses have carry-over amortization 2,678,016.88 3.04% 1,071,343.97 1.11% 1.93% last year 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 9,000,000.00 -88.89% 2. The major equity investment obtained in the reporting period √Applicable □ Not applicable In RMB Way Inves Pr Progres Inc Laws Shar Capit Inves Gain/l Main of tmen od s till om uit Disclo Discl Inves ehold al Partn tmen oss in busin inves t uct end of e involv sure osure tee ing resou er t the ess tmen amou typ balance esti ed date index ratio rces term period t nt e sheet mat (Y/N) 12 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 date ed Haina n Weng ao Devel Touri opme Newl Registra sm nt of y 1,000 Self Tr 100.0 30-y tion is 0.0 2018- 2018- Reso touris estab ,000. raise N/A av 0.00 No 0% ear complet 0 06-07 046 urces m lishe 00 d el ed Devel resou d opme rces nt Co., Ltd. 1,000 0.0 Total -- -- ,000. -- -- -- -- -- -- 0.00 -- -- -- 0 00 3. The major non-equity investment doing in the reporting period □ Applicable √ Not applicable 4. Financial assets investment (1) Securities investment □ Applicable √ Not applicable The company had no securities investment in the reporting period. (2) Derivative investment □ Applicable √ Not applicable The Company has no derivatives investment in the 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. 13 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 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 2018 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 equipments and facilities of the hotel while expanding the business scope, and win more market shares via high-class service and comfortable environment so as to ensure the main business income level. (2) Natural disaster risks In recent years, various natural disasters take place frequently, Hainan Island belongs to oceanic climate, where has high incidence of disastrous weather in summer. If Sanya becomes the landing place of typhoon, it may cause great damages to the facilities of the Company and affect the Company’s normal operation. Countermeasures: The Company will strengthen the construction and maintenance for infrastructure, continue to buy property insurances, positively adopt effective prevention measures, and improve the ability of resisting natural disasters. (3) Risks of HR Demand for talent in aspect of hotel sales and management are increasingly due to the constantly rise of hotel industry, flow of hotel talented people comes more widespread and more frequent; we may face the risks of development restrained from brain drain. Countermeasure: we will continue to improved the talent introduction, training system, incentive mechanism, remuneration and welfare as well as insurance mechanism, strive to attract talent, cultivate them and retain them. Meanwhile, strengthen staff quality and skills as well as the management ability, further putting more efforts in 14 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 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. 15 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 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 Ratio of investor Type Date Date of disclosure Index of disclosure meeting participation The “Resolution Notice of Annual General Meeting of 2017” (No.: Annual 2018-016) published on Securities AGM of general 37.76% 2018-02-27 2018-02-28 Times, Hong Kong Commercial Daily 2017 meeting and Juchao website (http://www.cninfo.com.cn) dated 28 February 2018 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 Implement Commitments Promise commitme Content of commitments ment itment ation date term nts On May 30, 2007, Luoniushan Co., Ltd. made The Commitm Luonius ents for commitments in the Company’s "Instructions original 6 Commitments for han Share for reform of non-tradable shares" (Revision) 2017-06 plans of month Share Merger Reform Co., and "Instructions for reform of non-tradable -27 material Merger s Ltd Reform shares" (Abstract of revision) that in view of assets Dadonghai Company’s losses in successive reorganizat 16 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 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 17 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 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 arbitrations of the Company □ Applicable √ Not applicable The Company has no significant lawsuits and arbitrations in reporting period Other lawsuits □ Applicable √ Not applicable 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 18 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 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 Whet Tradi her Relate ng Da d over Propo limit Availab te Inde Type Conte transa the Clearin Relate rtion of nt of Pricin ction appro g form le of x of Relati d in appro Relate relate relate g amou for onshi transa simila ved similar dis discl d party d d princi nt ved related p ction r transa transa ple (in 10 (in 10 transact market clo osur price transa limite ction ction thousa ion ctions thousa price sur e nd d or Yuan) nd e not Yuan) (Y/N) Same Same as as the First the Luoniu transact majori Consu Acco transact shan Marke Marke ion ty mptio mmod 17.68 1.09% 0 Y ion with Co., t price t price with shareh n ation non-rel Ltd. non-rel older ated ated party party Total -- -- 17.68 -- 0 -- -- -- -- -- Detail of sales return with major N/A amount involved Report the actual implementation of the daily related transactions which were projected about their total N/A amount by types during the reporting period Reasons for major differences between trading price and market Not applicable reference price 19 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 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 20 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 Item Tenant Lease life Term of lease B/F of the Hotel Ma Ming (Hainan Hangpai Food Co., 5 years 2016-01-01 to 2020-12-31 Ltd.) Shopping mall –B/F Xu Jipeng 3 years 2016-11-15 to 2019-11-14 A/F ground floor Chen Junwei 3 years 2016-03-01 to 2019-02-28 Seaside stall and wood Sanya Leda Food Management Co., 5 years 2018-01-01 to 2022-12-31 house Ltd. Seaside locker room Zhong Zhengao 3 years 2016-12-01 to 2019-11-30 Multi-functional meeting Sanya Haolide International Travel 5 years 2017-10-01 to 2022-09-30 room Agency Co., Ltd. Gains/losses to the Company from projects that reached over 10% in total profit of the Company in reporting period √Applicable □ Not applicable Leasing The Whet Leasin Basis assets impact her g for Asso involved of be Lease income determi ciatio Name of Name of the Leasing in the Lease start leasing relate terminatio (in 10 ning n lessor leasing party assets amount date income d n date thousa the relati (in 10 on the trans nd leasing on thousand compan actio Yuan) income Yuan) y ns The B/F Ma Ming 2016-01-0 2020-12-3 Contrac restaurant Increase Compan (Hainan Hangpai 1,886 37.8 No N/A in first 1 1 t income y Food Co., Ltd. ) floor The Sanya Leda Seaside Food stall and 2018-01-0 2022-12-3 Contrac Increase Compan 653 72.5 No N/A Management wood 1 1 t income y Co., Ltd. house The Seaside 2016-12-0 2019-11-3 Contrac Increase Compan Zhong Zhengao locker 10 18 No N/A 1 0 t income y room Sanya Haolide Multi-fun The International ctional 2017-10-0 2022-09-3 Contrac Increase Compan 190 15 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. 21 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 3. Other material contracts □ Applicable √ Not applicable No other material contracts for the Company in reporting period XV. Social responsibility 1. Major environmental protection Listed company and its subsidiary belongs to the key pollution enterprise listed by Department of Environmental Protection Not applicable 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. Found more in “Notice of Lawyer’s Letter received by Hainan Dadonghai Tourism Center (Holdings) Co., Ltd.” (Notice No.: 2016-016) released on Securities Times, Hong Kong Commercial Daily and Juchao Website dated 31 May 2016. The Company is communicated and negotiates with Sanya Power Bureau in the above mentioned event without negotiation results so far. 2 、 The Lawyer ’ s Letter received by the Company: concerning the dispute on financial loans between joint stock enterprise- Hainan Dadonghai Tourism Center Group Co., Ltd. (hereinafter referred to as Dadonghai Group) and original creditor- Sanya Branch of People ’ s Construction Bank of China (hereinafter referred to as Sanya Branch of PCBC), the new creditor- Hainan Branch of China Cinda Asset Management Corp. (hereinafter referred to as Hainan Cinda) now exercise the right of recourse, which including two debts: the 1.1 million Yuan principal and its interest of 5.5983 million Yuan temporary reckoned till 30 April 2018, totally amounted as 6.6983 million Yuan; the 5 million Yuan principal and its interest of 29.3117 million Yuan temporary reckoned till 30 April 2018, totally amounted as 34.3117 million Yuan. Hainan Cinda claims that the Company shall assume joint and several liabilities for the above mentioned debts if Dadonghai Group in condition of liquidation. Found more in “ Notice of Lawyer ’ s Letter received by Hainan Dadonghai Tourism Center (Holdings) Co., Ltd ” (Notice No.: 2018-052) released on Securities Times, Hong Kong Commercial Daily and Juchao Website dated 10 August 2018. Recently, the Company exercise checking and understanding on the abovementioned events involved in Lawyer s Letter. ’ XVII. Significant event of subsidiary of the Company √Applicable □ Not applicable On May 11, 2018, the company held the 2nd interim meeting of the ninth board of directors which deliberated and approved the Proposal on Investment in Establishing a Wholly-owned Subsidiary, and agreed the company to fund and set up a wholly-owned subsidiary, Hainan Wengao Tourism Resources Development Co., Ltd., with its own 22 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 funds of RMB 1 million. See details on the Announcement on the Resolution of the Second Interim Meeting of the Ninth Board of Directors (Announcement No.: 2018-040) and the Announcement on the Investment in Establishing a Wholly-owned Subsidiary (Announcement No.: 2018-043) that the company disclosed on the Securities Times, Hong Kong Commercial Daily and www.cninfo.com.cn on May 12, 2018. On June 6, 2018, the wholly-owned subsidiary has completed the industrial and commercial registration procedures and obtained the Business License issued by Sanya Administration for Industry and Commerce of Hainan Province, see details on the Announcement on the Progress of Investment in Establishing a Wholly-owned Subsidiary that the company disclosed on the Securities Times, Hong Kong Commercial Daily and www.cninfo.com.cn on June 7, 2018 (Announcement No.: 2018-046). 23 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 Section VI. Particulars about Changes in Shares and Shareholders I. Changes in Share Capital 1. Changes in Share Capital In Share Before the Change Increase/Decrease in the Change (+, -) After the Change Capitaliz New Ot Proportio Bonus ation of Subt Proporti Amount shares her Amount n shares public otal on issued s reserve I. Restricted shares 10,454,400 2.87% 0 0 10,454,400 2.87% 1. State-owned shares 2. State-owned corporate 2,323,200 0.64% 0 0 2,323,200 0.64% shares 8,131,200 2.23% 0 0 8,131,200 2.23% 3. Other domestic shares Including: Domestic 7,821,000 2.15% 0 0 7,821,000 2.15% legal person shares Domestic natural person 310,200 0.09% 0 0 310,200 0.09% shares II. Unrestricted shares 353,645,600 97.13% 0 0 353,645,600 97.13% 265,645,600 72.96% 0 0 265,645,600 72.96% 1. RMB common shares 2.Domestically listed 88,000,000 24.17% 88,000,000 24.17% foreign shares III. Total shares 364,100,000 100.00% 0 0 364,100,000 100.00% Reasons for share changed √ Applicable □ Not applicable And during the follow-up process of non-tradable shares reform, relevant shares are released in line with relevant regulations and some of the shareholders are repaying the advance money for another, thus the share structure of the Company changed in the Period while total shares remain the same. Approval of share changed □ Applicable √ Not applicable Ownership transfer of share changes □ Applicable √ Not applicable 24 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to common shareholders of Company in latest year and period □ Applicable √ Not applicable Other information necessary to disclose or need to disclosed under requirement from security regulators □ Applicable √ Not applicable 2. Changes of restricted shares √ Applicable □ Not applicable In Share Number Number Number of of of new Number of shares shares shares shares Restriction Shareholders’ name restricted at Released date released restricte restricted at reasons Period-begi in the d in the Period-end n Year Year Legal After relevant reimbursement Ma Xiaoping 132,000 0 0 132,000 commitment in and unrestricted procedures share reform completed x Legal After relevant reimbursement Zheng Youxiong 46,200 0 0 46,200 commitment in and unrestricted procedures share reform completed x Legal After relevant reimbursement Xiao Tiefeng 132,000 0 0 132,000 commitment in and unrestricted procedures share reform completed x Legal After relevant reimbursement Sanya Real Estate Valuation Agent 924,000 0 0 924,000 commitment in and unrestricted procedures share reform completed x Hainan Hong Kong-Macao Legal After relevant reimbursement International Trade Development 924,000 0 0 924,000 commitment in and unrestricted procedures Co., Ltd. share reform completed x Legal After relevant reimbursement Haikou Dongfang Urban credit 924,000 0 0 924,000 commitment in and unrestricted procedures Cooperative share reform completed x Legal After relevant reimbursement Hainan Branch of Bank of 924,000 0 0 924,000 commitment in and unrestricted procedures Communications Co., Ltd. share reform completed x Legal After relevant reimbursement Shenyang Jin’an Industrial 831,600 0 0 831,600 commitment in and unrestricted procedures Corporation share reform completed x Sanya Wangli Building Materials Legal After relevant reimbursement 92,400 0 0 92,400 Sales commitment in and unrestricted procedures 25 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 share reform completed x Legal After relevant reimbursement Guangzhou Company of Hainan 660,000 0 0 660,000 commitment in and unrestricted procedures International Investment Co., Ltd. share reform completed x Legal After relevant reimbursement Southern Industrial and Trading 660,000 0 0 660,000 commitment in and unrestricted procedures Corporation share reform completed x Legal After relevant reimbursement Guangzhou Dongzhan Industrial 924,000 0 0 924,000 commitment in and unrestricted procedures Co. LTD share reform completed x Legal After relevant reimbursement Sanya Zhongxing Development 2,541,000 0 0 2,541,000 commitment in and unrestricted procedures Co., Ltd. share reform completed x Legal After relevant reimbursement Hainan Dadonghai Tourism Co. 739,200 0 0 739,200 commitment in and unrestricted procedures share reform completed x Total 10,454,400 0 0 10,454,400 -- -- 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 shareholders in reporting Total preference shareholders with voting 46,487 0 period-end rights recovered at end of reporting period 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 Nature of on of Full name of Shareholders 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 Domestic non Luoniushan Co., Ltd. state-owned 17.55% 63,885,980 0 0 63,885,980 corporate 26 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 Domestic nature Pan Guoping 8.24% 29,989,791 -890000 29,989,791 person HGNH International Asset Management Co., Ltd – Foreign corporate 2.29% 8,327,502 0 0 8,327,502 customer deposit Domestic non Hainan Ya’an Residence Property state-owned 2.25% 8,205,800 0 0 8,205,800 Service Co., Ltd. corporate China Investment Securities (HK) Co., Ld. – customer Foreign corporate 1.30% 4,722,300 0 0 4,722,300 deposit Domestic nature Zhang Fengxiu 1.07% 3,901,372 0 0 3,901,372 person Domestic nature Ouyang Chunlin 0.92% 3,360,000 0 0 3,360,000 person CITRINE CAPITAL LIMITED Foreign corporate 0.90% 3,265,200 0 0 3,265,200 Domestic nature Hu Jianguo 0.82% 2,993,940 -3233700 0 2,993,940 person Domestic nature Sun Huiming 0.79% 2,888,690 0 0 2,888,690 person 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. The Company is Explanation on associated relationship or accordant unknown whether there exists associated relationship or belongs to the consistent action among the aforesaid shareholders 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 Type Amount held at Period-end Luoniushan Co., Ltd. 63,885,980 RMB common share 63,885,980 Pan Guoping 29,989,791 Domestically listed foreign share 29,989,791 HGNH International Asset Management Co., Ltd – 8,327,502 RMB common share 8,327,502 customer deposit Hainan Ya’an Residence Property Service Co., Ltd. 8,205,800 RMB common share 8,205,800 27 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 China Investment Securities (HK) Co., Ld. – customer 4,722,300 RMB common share 4,722,300 deposit Zhang Fengxiu 3,901,372 RMB common share 3,901,372 Ouyang Chunlin 3,360,000 RMB common share 3,360,000 CITRINE CAPITAL LIMITED 3,265,200 Domestically listed foreign share 3,265,200 Hu Jianguo 2,993,940 RMB common share 2,993,940 Sun Huiming 2,888,690 Domestically listed foreign share 2,888,690 Expiation on associated relationship or consistent Among the above shareholders, Hainan Ya’an Residence Property Service Co., actors within the top 10 un-restrict common stock Ltd. is the wholly-owned subsidiary of Luoniushan Co., Ltd. The Company is shareholders and between top 10 un-restrict common unknown whether there exists associated relationship or belongs to the consistent stock shareholders and top 10 common stock actor regulated by the Management Measure of Information Disclosure on shareholders 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. 28 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 Section VII. Preferred Stock □ Applicable √ Not applicable The Company had no preferred stock in the Period. 29 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 Section VIII. Particulars about Directors, Supervisors, Senior Executives and Employees I. Changes of shares held by directors, supervisors and senior executives √Applicable □ Not applicable Amoun Number of Number of t of Amount Shares Number of Shares restricted restricted shares of shares held at restricted held at shares shares Workin increas decrease period- shares Name Title period-b delegated delegated g status ed in d in this end delegated at egin at in the this period (Share period-end (Share) period-begi period period (Share) ) (Share) n (Share) (Share) (Share) Yuan Currentl Chairman, Xiaopin General y in 0 0 0 0 0 0 0 Manager g office Tang Currentl Shanron Director y in 0 0 0 0 0 0 0 g office Currentl Tang Independent y in 0 0 0 0 0 0 0 Guoping Director office Currentl Independent Wu Tao y in 0 0 0 0 0 0 0 Director office Currentl Zhang Supervisor y in 0 0 0 0 0 0 0 Xuli office Leave Li Chairman, General the 0 0 0 0 0 0 0 Yuanbin Manager office Leave Zhao Independent the 0 0 0 0 0 0 0 Man Director office Leng Independent Leave 0 0 0 0 0 0 0 Mingqua Director the 30 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 n office Leave Liu Director the 0 0 0 0 0 0 0 Juntao office Director & Vice Currentl Wang Hongjua president & y in 0 0 0 0 0 0 0 n secretary of office the Board Currentl Huang Supervisor y in 0 0 0 0 0 0 0 Wencai office Leave Wang Supervisor the 0 0 0 0 0 0 0 Jialing office Currentl Fu CFO y in 0 0 0 0 0 0 0 Zongren office Currentl Chen Supervisor y in 0 0 0 0 0 0 0 Gang office Total -- -- 0 0 0 0 0 0 0 II. Changes of directors, supervisors and senior executives √Applicable □ Not applicable Name Title Type Data Reason Chairman, The office term of 8th BOD expired, and serves as chairman of the 9th Yuan Xiaoping General Be elected 2018-02-28 Manager BOD in the Company. And was appointed as GM The office term of 8th BOD expired, and serves as Director of the 9th Tang Shanrong Director Be elected 2018-02-28 BOD in the Company. Independent The office term of 8th BOD expired, and serves as Independent Director Tang Guoping Be elected 2018-02-28 Director of the 9th BOD in the Company. Independent The office term of 8th BOD expired, and serves as Independent Director Wu Tao Be elected 2018-02-28 Director of the 9th BOD in the Company. The office term of 8th supervisory committee expired, and serves as Stockholder' Huang Wencai Be elected 2018-02-28 shareholder supervisory/chairman of the supervisory committee of the 9th s Supervisor BOD in the Company. Staff The office term of 8th supervisory committee expired, and serves as staff Chen Gang Be elected 2018-02-28 Supervisor supervisor of the 9th supervisory committee in the Company. 31 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 Stockholder' The office term of 8th supervisory committee expired, and serves as Zhang Xuli Be elected 2018-02-28 s Supervisor shareholder supervisor of the 9th supervisory committee in the Company. Office Chairman, leaving for Li Yuanbin General 2018-02-27 Office leaving for term expired Manager term expired Office Independent leaving for 2018-02-27a Zhao Man Office leaving for term expired Director term ppoi expired Office Independent leaving for Leng Mingquan 2018-02-27 Office leaving for term expired Director term expired Office leaving for Liu Juntao Director 2018-02-27 Office leaving for term expired term expired Office Staff leaving for Wang Jialing 2018-02-27 Office leaving for term expired Supervisor term expired Director & Vice The office term of 8th BOD expired, and serves as Director of the 9th Wang Hongjuan president & Be elected 2018-02-28 BOD in the Company. And was re-appointed as deputy GM/Secretary of secretary of the Board/Securities affairs representative the Board Appointm Fu Zongren CFO 2018-03-06 Re-appointed as person in charge of fiancé in the Company ent 32 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 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 33 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 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 CENTER (HOLDINGS) CO., LTD. 2018-06-30 In RMB Item Closing Balance Opening Balance Current assets: Monetary funds 10,751,658.64 9,681,607.16 Settlement funds Lending funds Financial assets measured by fair value and with variation reckoned into current gains/losses Derivative financial liability Notes receivable Accounts receivable 266,236.51 594,130.89 Prepayments 43,206.84 49,530.21 Insurance receivable Reinsurance receivables Contract reserve of reinsurance receivable Interest receivable Dividends receivable Other receivables 800,136.44 139,561.29 Purchase restituted finance asset Inventories 264,620.69 227,005.11 Assets held for sale 34 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 Non-current assets maturing within one year 716,972.51 1,173,597.68 Other current assets 2,195,699.54 1,957,863.56 Total current assets 15,038,531.17 13,823,295.90 Non-current assets: Loans and payments on behalf Available-for-sale financial assets Held-to-maturity investments Long-term receivables Long-term equity investments 1,000,000.00 Investment real estate 8,621,742.21 8,859,003.99 Fixed assets 38,017,199.39 39,088,708.83 Construction in progress Project materials Disposal of fixed assets Productive biological assets Oil and natural gas assets Intangible assets 22,611,442.62 23,017,636.20 Research and development costs Goodwill Long-term deferred expenses 2,678,016.88 2,678,016.88 Deferred tax assets Other non-current assets Total non-current assets 72,928,401.10 73,643,365.90 Total assets 87,966,932.27 87,466,661.80 Current liabilities Short-term borrowings Loan from central bank Absorbing deposit and interbank deposit Capital borrowed Financial liability measured by fair value and with variation reckoned into current gains/losses Derivative financial liability Notes payable Accounts payable 1,651,770.31 2,161,172.26 Accounts received in advance 1,057,513.07 1,271,174.12 Selling financial asset of repurchase 35 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 Commission charge and commission payable Wage payable 1,984,463.35 2,459,015.93 Taxes payable 471,349.26 539,023.76 Interest payable Dividend payable Other accounts payable 2,894,571.56 2,411,176.59 Reinsurance payables Insurance contract reserve Security trading of agency Security sales of agency Liability held for sale Non-current liabilities due within 1 year Other current liabilities Total current liabilities 8,059,667.55 8,841,562.66 Non-current liabilities: Long-term loans Bonds payable Including: preferred stock Perpetual capital securities Long-term account payable Long-term wages payable Special accounts payable Projected liabilities 1,489,685.04 1,489,685.04 Deferred income Deferred income tax liabilities Other non-current liabilities Total non-current liabilities 1,489,685.04 1,489,685.04 Total liabilities 9,549,352.59 10,331,247.70 Owners’ equity: Share capita 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 36 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 Surplus reserve Provision of general risk Retained profit -339,825,270.33 -341,107,435.91 Total owner’s equity attributable to parent Company 78,417,579.68 77,135,414.10 Minority interests Total owner’s equity 78,417,579.68 77,135,414.10 Total liabilities and owner’s equity 87,966,932.27 87,466,661.80 Legal Representative: Yuan Xiaoping Accounting Principal: Fu Zongren Accounting Firm’s Principal: Fu Zongren 2. Profit statement In RMB Item Current Period Last Period I. Total operating income 16,173,929.32 15,096,273.42 Including: Operating income 16,173,929.32 15,096,273.42 Interest income Insurance gained Commission charge and commission income II. Total operating cost 14,891,558.76 13,377,279.62 Including: Operating cost 6,000,063.36 5,256,112.51 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 Operating tax and extras 716,520.90 754,244.27 Sales expenses 2,800,956.10 2,458,144.93 Administration expenses 5,356,455.21 5,089,450.57 Financial expenses 17,563.19 -180,672.66 Losses of devaluation of asset 37 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 Add: Changing income of fair value(Loss is listed with “-”) Investment income (Loss is listed with “-”) Including: Investment income on affiliated Company and joint venture Exchange income (Loss is listed with “-”) Income on disposal of assets (Loss is listed with “-”) Other income III. Operating profit (Loss is listed with “-”) 1,282,370.56 1,718,993.80 Add: Non-operating income 273.00 260.00 Less: Non-operating expense 477.98 IV. Total Profit (Loss is listed with “-”) 1,282,165.58 1,719,253.80 Less: Income tax V. Net profit (Net loss is listed with “-”) 1,282,165.58 1,719,253.80 (i) continuous operating net profit (net loss listed with ‘-”) (ii) termination of net profit (net loss listed with ‘-”) Net profit attributable to owner’s equity of parent Company 1,282,165.58 1,719,253.80 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 as a result of re-measurement of net defined benefit plan liability or asset 2. Share of the other comprehensive income of the investee accounted for using equity method which will not be reclassified subsequently to profit and loss (II) Other comprehensive income items which will be reclassified subsequently to profit or loss 1. Share of the other comprehensive income of the investee accounted for using equity method which will be reclassified subsequently to profit or loss 2. Gains or losses arising from changes in fair value of available-for-sale financial assets 3. Gains or losses arising from reclassification of held-to-maturity investment as available-for-sale financial assets 4. The effect hedging portion of gains or losses arising from 38 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 cash flow hedging instruments 5. Translation differences arising on translation of foreign currency financial statements 6. Other Net after-tax of other comprehensive income attributable to minority shareholders VII. Total comprehensive income 1,282,165.58 1,719,253.80 Total comprehensive income attributable to owners of parent 1,282,165.58 1,719,253.80 Company Total comprehensive income attributable to minority shareholders VIII. Earnings per share: (i) Basic earnings per share 0.0035 0.0047 (ii) Diluted earnings per share 0.0035 0.0047 Legal Representative: Yuan Xiaoping Accounting Principal: Fu Zongren Accounting Firm’s Principal: Fu Zongren 3. Cash flow statement In RMB Item Current Period Last Period I. Cash flows arising from operating activities: Cash received from selling commodities and providing labor services 17,460,137.72 15,736,183.76 Net increase of customer deposit and interbank deposit Net increase of loan from central bank Net increase of capital borrowed from other financial institution Cash received from original insurance contract fee Net cash received from reinsurance business Insured savings and net increase of investment Net increase of amount from disposal financial assets that measured by fair value and with variation reckoned into current gains/losses Cash received from interest, commission charge and commission Net increase of capital borrowed Net increase of returned business capital Write-back of tax received 39 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 Other cash received concerning operating activities 684,152.64 677,415.38 Subtotal of cash inflow arising from operating activities 18,144,290.36 16,413,599.14 Cash paid for purchasing commodities and receiving labor service 5,026,699.13 3,826,391.38 Net increase of customer loans and advances Net increase of deposits in central bank and interbank Cash paid for original insurance contract compensation Cash paid for interest, commission charge and commission Cash paid for bonus of guarantee slip Cash paid to/for staff and workers 6,741,602.32 5,608,808.99 Taxes paid 1,590,739.15 1,610,025.50 Other cash paid concerning operating activities 1,674,572.16 2,137,300.17 Subtotal of cash outflow arising from operating activities 15,033,612.76 13,182,526.04 Net cash flows arising from operating activities 3,110,677.60 3,231,073.10 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 Net cash received from disposal of subsidiaries and other units Other cash received concerning investing activities Subtotal of cash inflow from investing activities Cash paid for purchasing fixed, intangible and other long-term assets 1,040,626.12 1,333,145.20 Cash paid for investment 1,000,000.00 Net increase of mortgaged loans Net cash received from subsidiaries and other units Other cash paid concerning investing activities 9,000,000.00 Subtotal of cash outflow from investing activities 2,040,626.12 10,333,145.20 Net cash flows arising from investing activities -2,040,626.12 -10,333,145.20 III. Cash flows arising from financing activities: Cash received from absorbing investment Including: Cash received from absorbing minority shareholders’ investment by subsidiaries Cash received from loans Cash received from issuing bonds Other cash received concerning financing activities 19,810,000.00 Subtotal of cash inflow from financing activities 19,810,000.00 40 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 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 29,810,000.00 Subtotal of cash outflow from financing activities 29,810,000.00 Net cash flows arising from financing activities -10,000,000.00 IV. Influence on cash due to fluctuation in exchange rate V. Net increase of cash and cash equivalents 1,070,051.48 -17,102,072.10 Add: Balance of cash and cash equivalents at the period -begin 9,681,607.16 27,210,248.01 VI. Balance of cash and cash equivalents at the period -end 10,751,658.64 10,108,175.91 Legal Representative: Yuan Xiaoping Accounting Principal: Fu Zongren Accounting Firm’s Principal: Fu Zongren 4. Statement on Changes of Owners’ Equity Current period In RMB Current Period Owners’ equity attributable to the parent Company L O P e t r R M s h o e i s e v a S n : r i s u o s o r r I c i n p i n o o a l t v m n b u y Other e p Item l s Total owners’ equity n r o Share capital Capital reserve e Retained profit i equity instru t e f r n ment o h r e t r e g e s e y n e s e r s n e r e s i e r v s h v r v e t a e a e s r l e i s n r 41 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 c i o s m k e P e r p e t u P a r l e f c e a r p O r i t e t h d a e l r s t s o e c c k u r i t i e s I. Balance at the end of the last 364,100,000.00 54,142,850.01 -341,107,435.91 77,135,414.10 year Add: Changes of accounting policy Error correction of the last period Enterprise combine under the same control Other II. Balance at the beginning of this 364,100,000.00 54,142,850.01 -341,107,435.91 77,135,414.10 year III. Increase/ Decrease in this year 1,282,165.58 1,282,165.58 (Decrease is 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 42 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 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. 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 364,100,000.00 54,142,850.01 -339,825,270.33 78,417,579.68 period Last Period In RMB Last Period Owners’ equity attributable to the parent Company Other L O R P M equity e t e r i instru s h a S o n ment s e s u v o P P : r o r i r r e n p s i e r I c a l i t f p n o b u o y Item e e v m l s n Total owners’ Share capital r t O Capital reserve e p e Retained profit i equity r u t n r r o n e a h t e r e f t d l e o h e s e r r e s e g r s c y n e r e e t a s r v n s o p s i v e e t c i h v e r s k t a e a 43 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 a r l l e i s n r s c i e o s c m k 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 -343,966,434.57 74,276,415.44 Add: Changes of accounting policy Error correction of the last period Enterprise combine under the same control Other II. Balance at the beginning of this 364,100,000.00 54,142,850.01 -343,966,434.57 74,276,415.44 year III. Increase/ Decrease in this year 1,719,253.80 1,719,253.80 (Decrease is listed with “-”) (i) Total comprehensive income 1,719,253.80 1,719,253.80 (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. Other 44 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 (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 364,100,000.00 54,142,850.01 -342,247,180.77 75,995,669.24 period Legal Representative: Yuan Xiaoping Accounting Principal: Fu Zongren Accounting Firm’s Principal: Fu Zongren III. Company profile 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, 2018, the Company's accumulative total issued capital was 364.1 million shares and the Company's registered capital was RMB 364.1 million. Legal representative: Li Yuanbin. 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, chemical products (except franchised operations), daily necessities, industrial means of production (except franchised operations), metal materials, machinery equipment; sales of train, bus, vehicle tickets on an agent basis etc. The Company's largest shareholder is Luoniushan Co., Ltd. The financial statements were approved by the board of directors of the Company on August 9, 2018 for disclosure. As at June 30, 2018, the subsidiaries included into the Company's scope of consolidated financial statements are as follows: Name Relationship with the Company Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd. South China Hotel (hereinafter referred to as "the South China Branch 45 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 Hotel") IV. Basis of 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, Application Guidance to the Accounting Standards for Business Enterprises, the interpretation of the Accounting Standards for Business Enterprises and other relevant provisions (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 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. 46 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 5. Accounting Treatment Method for Business Combinations (under the same/different control) 6. Preparation method for consolidated financial statement 7. Joint arrangement classification and accounting treatment for joint operations 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. 10.1 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. 10.2 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 47 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 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. 48 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 10.3 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. 10.4 De-recognition criteria of financial liabilities Where the present obligations of financial liabilities have been discharged in whole or in part, the financial liability is derecognized or any part thereof 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 49 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 consideration paid (including non-cash assets transferred out or new financial liabilities assumed) shall be included in the current profit and loss. 10.5 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. 10.6 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. Accounts receivable (1) Account receivable with individually significant amount and with bad debt provision accrual independently Basis and standard for "individually Top 5 accounts receivable and other receivables by individual amount at the end of the significant" year The Company will separately conduct an impairment test on an individual basis and the Methods for provision for bad debts of allowance for bad debts will be made at the lower of the present value of the expected receivables with individually significant future cash flow and the book value thereof and included in current profit and loss. Those amount: do not impair after the separate test shall be included into corresponding portfolio for 50 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 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 with bad debt provision accrual by credit portfolio: Portfolio Methods for provision for bad debts Aging analysis Receivables provided for bad debts on a portfolio basis Provisions for bad debts made by aging analysis method are as follows: √ Applicable □ Not applicable Aging 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% 3-4 years 25.00% 25.00% 4-5 years 50.00% 50.00% Over 5 years 100.00% 100.00% In combination, withdrawal proportion of bad debt provision based on balance proportion □ Applicable √ Not applicable In combination, withdrawal proportion of bad debt provision based on other methods: □ Applicable √ Not applicable (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 provision of allowance for top five are impaired; for example, the debtor is dissolved, bankrupts or dies, and therefore the bad debts receivables 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 be separated from relevant portfolio to conduct impairment test separately, Provision method of based on which the impairment losses are recognized. allowance for bad debts Receivables other than accounts receivable and other receivables are subject to impairment provision by using the specific identification methods. 12. Inventories Does the Company need to comply with the disclosure requirement of the special industry No 51 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 1. Classification Inventories are classified into: raw materials, stock commodities, low-cost consumables, good materials, fuel, etc. 2. Valuation method of inventories dispatched Stock commodity is accounted for at the selling price and the difference between the purchase and sale prices are adjusted on a monthly basis by using the integrated price difference rate. The purchase and storage of all materials of inventories is measured at actual cost, and by using the first-in first-out method when applied for use. Low-cost consumables are amortized at lump-sum method when applied for use. 3. Determining basis of the net realizable value of inventories and method for inventory impairment provision After the comprehensive inventory count at the end of the period, provisions for inventory depreciation reserve are made or adjusted at the lower of their costs or net realizable values. For merchandise inventories for direct sale, including stock commodities, goods in progress and materials for sale, during normal operations, their net realizable values are recognized at the estimated selling prices minus the estimated selling expenses and the relevant taxes and surcharges; for material inventories held for production, their net realizable values are recognized at the estimated selling prices of finished goods minus estimated costs until completion, estimated selling expenses and relevant taxes and surcharges. The provisions for inventory depreciation reserve are made on an individual basis at the end of the period; for inventories with large quantities and relatively low unit prices, the provisions for inventory depreciation reserve are made on a category basis. For inventories related to the product portfolios manufactured and sold in the same area, and of which the final usage or purpose is identical or similar thereto, and which is difficult to separate from other items for measurement purposes, the provisions for inventory depreciation reserve are made on a portfolio basis. Where the previous factors affecting the written-down of the value of inventory have disappeared, the amount of write-down shall be resumed and be reversed from the original provision for inventory devaluation with the reversal being included in current profit and loss. 4. Inventory system The perpetual inventory system is adopted for accounting. 5. Amortization methods for low-cost consumables and packaging materials (1) Low-cost consumables are amortized at lump-sum method; (2) Packaging materials: lump-sum write-off method. 52 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 13. Assets held for sale 14. Long-term equity investments 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 53 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 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 54 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 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 55 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 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. 56 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 15. 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. 16. Fixed assets (1) Recognition criteria of fixed assets Fixed assets refer to the tangible assets held for the purpose of producing commodities, rendering services, renting or business management with useful lives exceeding one year. Fixed assets 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 asset can be measured reliably. (2) Depreciation method of fixed assets Yearly depreciation Asset type Depreciation method Year for depreciation Residual value rate 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 57 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 (3) Reorganization basis, valuation and depreciation method for financial lease assets 17. Construction in progress The book-entry values of the fixed assets are stated at total expenditures incurred before reaching working condition for their intended use. 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. 18. 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. 58 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 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. 19. Biological assets: Nil 20. Oil-and-gas assets: Nil 21. 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; 59 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 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. 60 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 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 22. 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. 23. 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 61 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 24. 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 post-employment benefits The Company will pay basic old-age insurance and unemployment insurance in accordance with relevant provisions of the local government for employees. During the accounting period when they provide services for the Company, the amount payable will be calculated at the basis and proportion specified by local authorities, recognized as a liability and charged into current profit and loss or costs associated with assets. (3) Accounting method for dismiss welfare Where the Company cannot unilaterally withdraw the dismissal welfare offered in view of the cancellation of the labor relation plan or the layoff proposal, or recognizes the cost or expenses as to the restructuring involving the payment of dismissal welfare (whichever is earlier), the employee compensation arising from the dismissal welfare should be recognized as the liabilities and charged to the current profit or loss. (4) Accounting method for other long-term employee welfare 25. 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; 62 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 (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. 26. share-based payment 27. Other financial instrument as preferred stock and perpetual bond etc. 28. Revenue Does the Company need to comply with the disclosure requirement of the special industry? Nil 1. Recognition and measurement principles for revenues from sale of goods (1) General recognition and measurement principles for revenue from sales of goods Income from sales of goods is recognized when the Company has transferred to the buyer the significant risks and rewards of ownership of the goods; the Company retains neither continuous management rights associated with ownership of the goods sold nor effective control over the goods sold; the relevant amount of income can be measured reliably; it is highly likely that the economic benefits associated with the transaction will flow into the 63 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 Company; and the relevant amount of cost incurred or to be incurred can be measured reliably. (2) Recognition criteria and time of revenue from sale of goods of the Company In the provision of hotel housing services at the same time, the Company provides goods to customers and will prepare daily sales list after confirming with the Rooms Department and the hotel front desk. Based on the sales list, the finance department confirms that the major risks and rewards of ownership of the goods have been transferred to the customer and then the sales revenue is recognized. 2. Recognition and measurement principles of revenue from rendering of service (1) For the hotel rooms, catering (breakfast) and other services to be provided by the Company, after they are provided, and the Company checks with the sales department and the front check, the Company will prepare the daily sales reports and accounts receivable list to the finance department, which will review the same, after which, the revenue will be recognized. (2) For the revenue from restaurants and venues contracted out, they will be recognized in accordance with the period stipulated in the contract or agreement and the collection timing. 3. Recognition basis for revenue from transfer of right to use assets When the economic benefit related to the transaction is probably to flow into the Company and the relevant revenue can be reliably measured, the revenue from transfer of the asset use right is determined as follows: the revenue from transferring use right of assets shall be recognized based on the following circumstances: (1) The amount of interest income is determined based on the time and effective interest rate for others to use the monetary funds of the Company. (2) The amount of revenue from usage is determined based on the charging time and method as agreed in relevant contract or agreement. 29. Government subsidies (1) Judgment criteria and accounting method for government subsidies related to assets Set off the book value of related assets or be recognized as deferred income. Government subsidies related to assets are recognized as deferred income to be evenly distributed over the useful lives of the relevant assets and shall be recorded in current profit or loss by stages in a reasonable and systematic manner. Government subsidies measured in nominal amounts, are directly included in current profits and losses. Where relevant assets are sold, transferred, scraped or damaged before the end of their lives, balance of the unallocated deferred income is transferred to the current profit and loss on asset disposal. (2) Judgment criteria and accounting method for government subsidies related to income 1) To be used as compensation for future costs, expenses or losses are recognized as deferred income and are 64 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 recorded in current profits and losses or used to write off the related costs where the relevant costs, expenses or losses are recognized. 2) To be used to compensate the related costs, expenses or losses incurred by the Company are directly included in current profit and loss or used to write off the related costs. 3) Accounting treatment will be conducted for government subsidies that at the same time include those associated with assets and income by different parts: if it is difficult to distinguish, they will be deemed as government subsidies associated with income. 30. Deferred income tax assets and deferred income tax liabilities Deferred income tax assets are recognized for deductible temporary differences to the extent that it shall not exceed the taxable income probably obtained in future period to be against the deductible temporary difference. Taxable temporary differences are recognized as deferred tax liabilities except in special circumstances. Special circumstances in which deferred assets or deferred tax liabilities cannot 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 right for netting of current income tax assets and current income tax liabilities and the income tax assets and income tax liabilities are related to the income tax levied on the same taxpayer by the same tax administrative department or are related to different taxpayers but, within each future period of reversal of important income tax assets and income tax liabilities, the taxpayers involved intend to settle current income tax assets and current income tax liabilities or acquire assets and liquidate liabilities at the same time, the Company's income tax assets and income tax liabilities shall be presented at the net amount after the offset. 31. 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 recorded in the current expenses. When the lessor bears the lease related expenses which shall be undertook by the Company, the Company shall deduct this part of the expense from the rent and amortize the net amount over the lease term and charge into current costs or expenses. 65 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 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 material, they shall be capitalized and included in the current income on the same basis as the recognition of lease income. When the Company bears the lease related expenses which should be undertook by the lessee, the Company shall deduct this part of expense from the rent income, and amortize the net amount over the lease term. (2) Accounting treatment of finance lease 32. Other principal accounting policies and accounting estimates 33. 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 34. Other VI. Taxation 1. Major tax types and tax rates Taxes Basis for tax assessment Tax rate Output VAT is calculated based on taxable sales revenue and service revenue calculated in accordance with tax laws and VAT payable or taxable 5%, 6%, 11% and Value added tax(VAT) sales revenue shall be the difference after deducting the input VAT 17% deductible in the same period Urban maintenance and Levied based on VAT payable 7% construction tax Enterprise income tax Levied based on taxable income 25% Education surtax Levied based on VAT payable 3% Local educational Levied based on VAT payable 2% surcharge 66 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 Remaining value after deducting 30% from the original value of the house Housing property tax 1.2%, 12% (including the occupied land price) and rental income Land use tax Land area 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 383,507.23 264,156.33 Bank deposits 3,368,151.41 9,417,450.83 Other monetary funds 7,000,000.00 Total 10,751,658.64 9,681,607.16 Other explanation 2. Financial assts measured by fair value and with its variation reckoned into current gains/losses: Nil 3. Derivative financial assets □ Applicable √ Not applicable 4. Note receivable: Nil 5. Accounts receivable (1) Disclosure of account receivables by category In RMB/CNY Ending balance Beginning balance Category Book balance Provision for bad debt Book balance Provision for bad debt Book Book value Proportio Provisio Proportio Provision value Amount Amount Amount Amount n n ratio n ratio Accounts receivable 334,756.76 100.00% 68,520.25 20.47% 266,236.51 662,651.14 100.00% 68,520.25 10.34% 594,130.89 with 67 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 provision for bad debts based on portfolios 1,000.00 Total 334,756.76 100.00% 68,520.25 20.47% 266,236.51 662,651.14 68,520.25 10.34% 594,130.89 % Account receivable with single significant amount and withdrawal bad debt provision separately at period-end: □ Applicable √ Not applicable In the portfolio, accounts receivable with the allowance for bad debts made under the aging analysis method: √ Applicable □ Not applicable In RMB/CNY Ending balance Aging Accounts receivable Provision for bad debt Provision proportion Within 1 year Subtotal within 1 year 244,368.96 1-2 years 785.00 39.25 5.00% 2-3 years 18,633.00 2,794.95 15.00% 3-4 years 3,397.00 849.25 25.00% 4-5 years 5,472.00 2,736.00 50.00% Over 5 years 62,100.80 62,100.80 100.00% Total 334,756.76 68,520.25 20.47% Explanation on combination determines: In combination, withdrawal proportion of bad debt provision based on balance proportion for account receivable □ Applicable √ Not applicable In combination, withdrawal proportion of bad debt provision based on other methods for account receivable: (2) Provision, reversal or recovery of provision for bad debts in 2018: Nil (3) Accounts receivable actually written off in 2018: Nil (4) Top five accounts receivable in terms of ending balance collected by the debtor Relationship with the Proportion in total amount of Name of entity Book balance Aging Company accounts receivable (%) Shanghai Hecheng International Non-related party 96,490.00 Within 1 year 28.82% Travel Service Co., Ltd. Luoniushan Co., Ltd. Non-consolidated 65,420.00 Within 1 year 19.54% 68 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 related party Guangzhou Institute of Design Non-related party 38,980.00 Over 5 years 11.64% Beijing Tongcheng Huading Non-related party 35,479.00 Within 1 year 10.60% International Travel Agency Co., Ltd. Tianjin Watermelon Tourism Limited Non-related party 33,104.96 Within 1 year 9.89% Liability Company Total 269,473.96 80.50% (5) Account receivable derecognition due to financial assets transfer (6) Assets and liabilities resulted by account receivable transfer and continues involvement Other note: Nil 6. Advances to suppliers (1) Advances to suppliers presented by aging In RMB/CNY Ending balance Beginning balance Aging Amount Proportion Amount Proportion Within 1 year 43,206.84 100.00% 49,530.21 100.00% Total 43,206.84 -- 49,530.21 -- Explanation on reasons of failure to settle on important advance payment with age over one year: Nil (2) Top five advances to suppliers in terms of the ending balance collected by the prepaid object Prepaid object Ending balance Proportion in total ending balance of advance to suppliers (%) Sunshine Property Insurance Co., Ltd. Hainan 18,322.73 42.41 Branch Sinopec Petrochemical Sales Co., Ltd. Hainan 12,103.50 28.01 Sanya Branch China Post Group Corporation Sanya Branch 5,400.00 12.50 Sanya Daily 4,864.87 11.26 Hangzhou Xiruan Technology Co., Ltd. 2,515.74 5.82 Total 43,206.84 100.00 69 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 7. Interest receivable: Nil 8. Dividend receivable: Nil 9. Other receivables (1) Other receivables disclosed by category In RMB/CNY Ending balance Beginning balance Provision for bad Provision for bad Book balance Book balance debt debt Category Book Book Provisi value Provision value Proport Amoun on Amo Proport Amount Amount proportio ion t proport unt ion n ion Other receivables with provision 100.00 21,147. 800,13 160,7 100.00 21,147. 139,561. 821,284.34 2.57% 13.16% for bad debts % 90 6.44 09.19 % 90 29 based on portfolio 100.00 21,147. 800,13 160,7 100.00 21,147. 139,561. Total 821,284.34 2.57% 13.16% % 90 6.44 09.19 % 90 29 Other receivables with insignificant single amount but with individual provision for bad debts at period-end □ Applicable √ Not applicable Other receivables with provision for bad debts made by aging analysis method in portfolios: √ Applicable □ Not applicable In RMB/CNY Ending balance Aging Other receivables Provision for bad debt Provision proportion Within 1 year Subtotal within 1 year 799,686.44 3-4 years 600.00 150.00 25.00% Over 5 years 20,997.90 20,997.90 100.00% Total 821,284.34 21,147.90 Explanations on combination determine: In combination, withdrawal proportion of bad debt provision based on balance proportion for other account receivable: □ Applicable √ Not applicable In combination, withdrawal proportion of bad debt provision based on other methods for other account receivable: 70 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 □ Applicable √ Not applicable (2) Provision, reversal or recovery of provision for bad debts in 2018: Nil (3) Other receivables actually written off in 2018: Nil (4) Classification of other receivables by the nature of payment In RMB/CNY Nature of Payment Book balance as at June 30, 2018 Book balance as at January 1, 2018 Deposit 600.00 600.00 Petty cash 20,000.00 49,281.48 Water and electricity expenses 197,820.63 70,809.03 Social insurance and housing provident 28,120.04 40,018.68 funds Staff borrowings 288,543.31 Sun Hongjie 286,200.36 Total 821,284.34 160,709.19 (5) Top 5 other receivables at ending balance by arrears party Proportion in total other Ending balance of Name Nature Ending balance Age receivables bad debt provision Within 1 Sun Hongjie Advance payment 286,200.36 34.85% year Within 1 Wen Ping Advance payment 185,292.04 22.56% year Hainan Hangpai Water and Within 1 110,620.65 13.47% Catering Co., Ltd. electricity fee year Staff borrowings Within 1 Yang Yunhui ready for 65,525.00 year 7.98% settlement Water and Within 1 Peng Guoxing 54,649.64 6.65% electricity fee year Total -- 702,287.69 -- 85.51% 71 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 (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 10. Inventories (1) Classification of inventory In RMB/CNY Ending balance Beginning balance Item Provision for Provision for Book balance Book value Book balance Book value price decline price decline Stocked 925,333.68 735,181.58 190,152.10 880,621.58 735,181.58 145,440.00 materials Stock 22,771.38 11,102.41 11,668.97 22,771.38 11,102.41 11,668.97 commodities Food and 38,544.22 38,544.22 45,640.74 45,640.74 beverage Fuel 24,255.40 24,255.40 24,255.40 24,255.40 Total 1,010,904.68 746,283.99 264,620.69 973,289.10 746,283.99 227,005.11 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 Increase in the period Decrease in period Category of Beginning Ending balance inventories balance Reversal or Provision Others Others write-off Raw materials 735,181.58 735,181.58 Stock 11,102.41 11,102.41 commodities Total 746,283.99 746,283.99 72 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 (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 11. Assets held for sale: Nil 12. Non-current assets maturing within one year In RMB/CNY Item Ending balance Beginning balance Long-term unamortized expenses amortized within one year 716,972.51 1,173,597.68 Total 716,972.51 1,173,597.68 Other explanation: Nil 13. Other current assets In RMB/CNY Item Ending balance Beginning balance Prepaid enterprise income tax 1,702,702.80 1,702,702.80 Input tax to be deducted 492,996.74 255,160.76 Total 2,195,699.54 1,957,863.56 Other explanation: Nil 14. Available-for-sale-financial assets: Nil 15. Investment held-to-maturity: Nil 16. Long-term receivables: Nil 17. Long-term equity investment In RMB/CNY Changes (+,-) Ending Gain/lo Other Cash Accrual balance Begin ss of Addition Negati compre dividen of of ning investm Other Ending Investee al ve hensive d or impair impair balan ent equity Other balance investme invest income profit ment ment ce recogni changes nt ment adjustm distribu provisi provisi zed by ent ted on on Equity I. Joint venture 73 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 Hainan Wengao Tourism Resource 1,000,00 1,000,0 s 0.00 00.00 Develop ment Co., Ltd. 1,000,00 1,000,0 Subtotal 0.00 00.00 II. Affiliated companies 1,000,00 1,000,0 Total 0.00 00.00 Other note 18. Investment property (1) Investment properties measured at cost √ Applicable □ Not applicable In RMB/CNY Buildings and Construction in Item Land use rights Total constructions process 1. Original book value 1.Beginning balance 18,856,504.44 5,662,740.59 24,519,245.03 2.Increase in the period (1) Purchase (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 74 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 4.Ending balance 18,856,504.44 5,662,740.59 24,519,245.03 II. Accumulated depreciation and accumulated amortization 1.Beginning balance 10,189,399.98 2,163,386.45 12,352,786.43 2.Increase in the 209,091.78 28,170.00 237,261.78 period (1) Provision or 209,091.78 28,170.00 237,261.78 amortization 3.Decrease in the period (1) Disposal (2) Other transfer-out 4.Ending balance 10,398,491.76 2,191,556.45 12,590,048.21 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) Provision 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. Closing book value 7,053,612.21 1,568,130.00 8,621,742.21 2. Opening book 7,262,703.99 1,596,300.00 8,859,003.99 value 75 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 (2) Investment real estate measured by fair value □ Applicable √ Not applicable (3) Investment real estate without property certification held: Nil 19. Fixed assets (1) Fixed assets details In RMB/CNY Houses and Mechanical Transportation Electronic Item Other equipment Total buildings equipment equipment equipment I. Original book value: 1.Beginning balance 136,789,501.82 13,279,932.54 2,345,074.91 2,623,443.45 2,059,888.17 157,097,840.89 2.Increase in the 3,200.00 274,545.79 111,006.47 388,752.26 period (1) Purchase 3,200.00 274,545.79 111,006.47 388,752.26 (2) Transfer from construction in process (3) Increase from business combinations 3.Decrease in the 12,800.00 12,800.00 period (1) Disposal or scrap 12,800.00 12,800.00 4.Ending balance 136,789,501.82 13,283,132.54 2,345,074.91 2,885,189.24 2,170,894.64 157,473,793.15 II. Accumulated depreciation 1.Beginning balance 70,320,351.57 9,371,050.71 1,415,798.92 2,012,775.79 1,288,515.64 84,408,492.63 2.Increase in the 1,066,369.14 144,249.45 85,613.46 81,819.17 81,732.50 1,459,783.72 period (1) Provision 1,066,369.14 144,249.45 85,613.46 81,819.17 81,732.50 1,459,783.72 3.Decrease in the 12,322.02 12,322.02 period (1) Disposal or 12,322.02 12,322.02 scrap 76 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 4.Ending balance 71,386,720.71 9,515,300.16 1,501,412.38 2,082,272.94 1,370,248.14 85,855,954.33 III. Provision for impairment 1.Beginning balance 31,072,788.17 2,527,851.26 33,600,639.43 2.Increase in the period (1) Provision 3.Decrease in the period (1) Disposal or scrap 4.Ending balance 31,072,788.17 2,527,851.26 33,600,639.43 IV. Book value 1. Ending book value 34,329,992.94 1,239,981.12 843,662.53 802,916.30 800,646.50 38,017,199.39 2. Opening book 35,396,362.08 1,381,030.57 929,275.99 610,667.66 771,372.53 39,088,708.83 value (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 20. Construction in progress: Nil 21. Engineering material: Nil 22. Disposal of fixed assets: Nil 23. Productive biological asset (1) Measured by cost □ Applicable √ Not applicable 77 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 (2) Measured by fair value □ Applicable √ Not applicable 24. Oil and gas assets □ Applicable √ Not applicable 25. Intangible assets (1) Intangible assets In RMB/CNY Non-patents Item Land use rights Patent right 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 31,194,664.11 31,194,664.11 2.Increase in the 406,193.58 406,193.58 period (1) Provision 406,193.58 406,193.58 3.Decrease in the period 78 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 (1) Disposal 4.Ending balance 31,600,857.69 31,600,857.69 III. Provision for impairment 1.Beginning balance 27,440,836.84 27,440,836.84 2.Increase in the period (1) Provision 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 22,611,442.62 22,611,442.62 2. Opening book value 23,017,636.20 23,017,636.20 Ratio of the intangible assets from internal R&D in balance of intangible assets at period-end was. (2) Land use rights without certificate of ownership: Nil 26. Development expenditure: Nil 27. Goodwill: Nil 28. Long-term deferred expenses In RMB/CNY Increase in the Amortization in Item Beginning balance Other decreased Ending balance period the period Hotel exterior 486,974.55 486,974.55 decoration Fire stairs 45,695.16 45,695.16 renovation Swimming pool 224,969.28 224,969.28 renovation C FLOOR ROOM 721,297.31 721,297.31 79 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 RENOVATION Villa renovation 1,199,080.58 1,199,080.58 Total 2,678,016.88 2,678,016.88 Other explanation: Nil 29. Deferred income tax assets and deferred income tax liabilities: Nil 30. Other non-current assets: Nil 31. Short-term loans: Nil 32. Financial liability measured by fair value and with its variation reckoned into current gains/losses: Nil 33. Derivative financial liability □ Applicable √ Not applicable 34. Notes payable: Nil 35. Accounts payable (1) Presentation of accounts payable by aging In RMB/CNY Item Ending balance Beginning balance Inventory temporary warehousing 700,275.98 738,044.28 Sanya Yunwang Food Distribution Co., 449,301.47 743,186.25 Ltd. Hainan Huanyu Decoration Design 134,274.10 134,274.10 Engineering Co., Ltd. Sanya Zhengzhuang Industrial Co., Ltd. 111,340.86 115,247.50 Sanya Sino French Water 56,002.63 47,698.36 Other 66,274.13 248,420.63 Over 3 years 134,301.14 134,301.14 Total 1,651,770.31 2,161,172.26 (2) Major payables with over one year account age In RMB/CNY 80 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 36. Advances from customers (1) Presentation of advances from customers In RMB/CNY Item Ending balance Beginning balance Room and meal charge 1,057,513.07 1,271,174.12 Total 1,057,513.07 1,271,174.12 (2) Significant advances from customers with aging more than one year In RMB/CNY Reasons for failure of Item Ending balance repayment or carry-forward Guangzhou Nanbu Holiday International Travel Service Co., Ltd. Sanya 101,244.00 Unsettled Branch PEGAS ZHENG QINGBO 32,243.02 Unsettled Hainan Qiongzhong Ecological Investment Guarantee Co., Ltd. 27,519.00 Unsettled Sanya Public Security Fire Brigade 19,420.88 Unsettled Tianhong Group Wuzhizhou Project Department 9,894.00 Unsettled Total 190,320.90 -- (3) Projects settlement without unfinished at period-end from construction contract: Nil 37. Employee compensation payable (1) Classification of employee compensation payable In RMB/CNY Beginning Item Increase in the period Decrease in the period Ending balance balance I. Short-term compensation 2,459,015.93 6,463,131.41 6,937,683.99 1,984,463.35 II. Post-employment benefits - 499,680.13 499,680.13 defined contribution plans Total 2,459,015.93 6,962,811.54 7,437,364.12 1,984,463.35 (2) Short-term compensation In RMB/CNY 81 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 Beginning Item Increase in the period Decrease in the period Ending balance balance 1. Salary, bonus, allowance and 1,479,102.46 5,272,790.73 5,774,948.39 976,944.80 subsidies 2. Employee welfare 714,640.46 714,640.46 3. Social insurance premiums 224,827.47 224,827.47 Including: Medical insurance 204,995.27 204,995.27 premiums Work-related injury insurance 7,021.13 7,021.13 premiums Maternity insurance premiums 12,811.07 12,811.07 4. Housing provident funds 78,478.00 65,620.00 12,858.00 5. Labor union funds and 979,913.47 172,394.75 157,647.67 994,660.55 employee education funds Total 2,459,015.93 6,463,131.41 6,937,683.99 1,984,463.35 (3) Presentation of defined contribution plan In RMB/CNY Item Beginning balance Increase in the period Decrease in period Ending balance 1. Basic endowment 486,869.06 486,869.06 premiums 2. Unemployment 12,811.07 12,811.07 insurance premium Total 499,680.13 499,680.13 Other explanation: Nil 38. Taxes payable In RMB/CNY Item Ending balance Beginning balance Value added tax (VAT) 147,972.15 222,989.34 Individual income tax -0.01 Urban maintenance and construction tax 839.27 7,782.70 Education surtax 359.68 3,335.43 Local educational surcharge 239.80 2,223.64 Security for disabled person 19,245.72 Land use tax 108,590.91 108,590.91 Housing property tax 194,101.74 194,101.74 82 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 Total 471,349.26 539,023.76 Other explanation: nil 39. Interest payable: Nil 40. Dividend payable: Nil 41. Other payables (1) Presentation of other payables by nature In RMB/CNY Item Ending balance Beginning balance Security deposit 868,000.00 711,046.99 Staff dormitory rental fees, etc. 528,000.00 521,534.64 Audit fees 285,003.21 285,003.21 Quality guarantee deposit for projects 123,029.67 193,066.10 Employee deposits 86,520.00 166,200.90 Project funds 331,111.03 162,569.78 Funds collected and remitted 68,346.68 100,036.07 Petty cash 28,446.80 Electric charges withheld 20,472.00 20,700.00 Individual current amounts 1,364.00 Announcement charge withholding 441,208.10 221,208.10 Other 142,880.87 Total 2,894,571.56 2,411,176.59 (2) Other significant payables with aging of over one year In RMB/CNY Item Ending balance Reason for non-repayment or carry-over Hong Kong Deloitte & Touche LLP 285,003.21 Reason for non-repayment Sanya Shuxin Housing Waterproof Engineering Limited 170,000.00 Reason for non-repayment China Building Decoration Company Hainan Branch 161,111.03 Reason for non-repayment Total 616,114.24 -- Other explanation: Nil 83 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 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. Long-term account payable 48. Long-term employee payable: nil 49. Special payable: nil 50. Estimated liabilities In RMB 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: On May 26, 2016, the Company received lawyer’s letter of Hainan Yunfan law firm which is entrusted by Hainan Power Grid Co., LTD Sanya Power Supply Bureau (hereinafter referred to as the "Sanya Power Supply Bureau"), the letter claims that Sanya Power Supply Bureau found that the Company’s subsidiary South China Grand Hotel of Hainan Dadonghai Tourism Center (Holdings) Co., Ltd’s the amount of CT is different with its marketing management system record. The inconformity time is July, 2006, and the hotel’s CT is changing on April, 2016. Therefore, undercounted electricity consumption amount is 10,313,373.00 kilowatt-hours, and estimated cost is 7,200,165.75 Yuan as various electricity prices and charges. According to the file “Law Advisory Opinion about Retroactive Power (Charge) Dispute between South China Grand Hotel and Sanya Power Supply Bureau” issued by Beijing Junhe (Haikou) Law Firm at December 20, 2016, which claims that Sanya Power Supply Bureau has responsibility for CT to purchase, install, enseal, unseal and change, therefore, the responsibility of the guilty party for undercounted electricity consumption of South China Grand Hotel is Sanya Power Supply Bureau. According to the one hundred and thirty-five item of “General Rule of Civil Law”, this item claims that limitation of action is two years if accuser request people's court’s protection, except situations provided by law. The Company has withheld the undercounted electricity consumption cost in 2016 which is about 1,489,685.04 Yuan during the period from April, 2014 to April, 2016. 84 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 51. Deferred income: nil 52. Other non-current liability: nil 53. Share capital In RMB Changes ( "+" for increase and "-" for decrease) Beginning Public reserve Ending balance balance Issuance of Share Sub-tota transferred to Others new shares donation l shares Total 364,100,000.00 364,100,000.00 shares Other explanation: nil 54. Other equity instrument: nil 55. Capital reserves In RMB Item Beginning balance Increase in 2017 Decrease in 2017 Ending balance Capital premium (share 33,336,215.58 33,336,215.58 premium) Other capital reserves 20,806,634.43 20,806,634.43 Total 54,142,850.01 54,142,850.01 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 Item Current period Last period Undistributed profits at the end of last year before adjustment -341,107,435.91 -343,966,434.57 Undistributed profits at the beginning of the year after adjustment -341,107,435.91 -343,966,434.57 Plus: net profit attributable to owners of the parent company in current period 1,282,165.58 1,719,253.80 85 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 Undistributed profit as at the end of the year -339,825,270.33 -342,247,180.77 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 Current period Last period Item Income Cost Income Cost Main business 14,615,148.37 5,762,801.58 13,518,444.89 5,018,862.48 Other business 1,558,780.95 237,261.78 1,577,828.53 237,250.03 Total 16,173,929.32 6,000,063.36 15,096,273.42 5,256,112.51 62. Taxes and surcharges In RMB Item Current period Last period Urban maintenance and construction tax 37,515.65 52,296.64 Educational surtax 26,796.89 37,289.14 Property tax 431,174.78 441,630.64 Land use tax 217,181.82 217,184.65 Vehicle and vessel use tax 3,669.06 4,980.00 Stamp tax 182.70 863.20 Total 716,520.90 754,244.27 Other explanation: nil 63. Sales expenses In RMB Item Current period Last period 1,841,236.40 1,532,804.73 Staff wages and benefits 285,734.45 224,176.69 Social workers insurance expenses Depreciation 256,486.12 245,942.02 86 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 Water and electricity fees 84,101.36 83,061.58 Repair charges 58,716.18 65,649.32 Other expenses 274,681.59 306,510.59 Total 2,800,956.10 2,458,144.93 Other explanation: nil 64. Administrative expenses In RMB Item Current period Last period Salaries and welfares 2,809,454.64 2,630,309.99 Social insurance premium 266,303.18 325,482.11 Entertainment expenses 496,075.07 402,028.00 Travelling expenses 68,678.82 97,189.95 Amortization for the depreciation and land use right 550,590.01 552,843.49 Announcement fee and agency charge 656,245.72 640,800.00 Other 509,107.77 440,797.03 Total 5,356,455.21 5,089,450.57 Other explanation: nil 65. Financial expenses In RMB Item Current period Last period Handling charges 40,293.06 24,107.51 Less: interest income -22,729.87 -204,780.17 Total 17,563.19 -180,672.66 Other explanation: nil 87 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 66. Losses on assets impairment: nil 67. Gains from fair value changes: nil 68. Investment income: nil 69. Income from assets disposal: nil 70. Other income: nil 71. Non-operating income In RMB Amount included in non-recurring profit and loss Item Current period Last period in the current period Other 273.00 260.00 273.00 Total 273.00 260.00 273.00 Government subsidies reckoned into current gains/losses: nil 72. Non-operating expenses In RMB Amount included in non-recurring Item Current period Last period profit and loss in the current period Loss of non-current assets disposal 477.98 -477.98 Total 477.98 -477.98 Other explanation: nil 73. Income tax expenses: nil 74. Other comprehensive income See Note 75. Notes to items of the cash flow statement (1) Cash received from other operating activities In RMB Item Current period Last period Interest income 22,729.87 204,780.17 88 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 Other 661,422.77 472,635.21 Total 684,152.64 677,415.38 Explanation: nil (2) Cash paid for other operating activities In RMB Item Current period Last period Social intercourse fees 497,075.07 402,028.00 Intermediary audit charges 400,000.00 400,000.00 Announcing fees 220,000.00 60,000.00 Travelling expenses 72,159.01 109,715.87 Promotion fee 26,619.18 21,162.60 Repair charges 98,889.97 100,191.70 Membership expenses of directors and supervisors 354,000.00 Other 359,828.93 690,202.00 Total 1,674,572.16 2,137,300.17 Explanation: nil (3) Cash received from other investment activities: nil (4) Cash paid for other investing activities In RMB Item Current period Last period Wuhan AiEjia Co., Ltd 9,000,000.00 Total 9,000,000.00 Explanation: nil (5) Cash received from other financing activities In RMB Item Current period Last period Luoniushan Group Co., Ltd. 19,810,000.00 Total 19,810,000.00 Explanation: nil 89 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 (6) Cash paid for other financing activities In RMB Item Current period Last period Luoniushan Group Co., Ltd. 10,000,000.00 CSRC 19,810,000.00 Total 29,810,000.00 Explanation: nil 76. Supplementary information to statement of cash flows (1) Supplementary information to statement of cash flows In RMB Item Current period Last period 1. Net profit adjusted to cash flows from operating activities -- -- Net profits 1,282,165.58 1,719,253.80 Depreciation of fixed assets, depreciation and depletion of oil and gas assets and depreciation of productive biological 1,799,584.50 1,591,987.78 assets Amortization of intangible assets 434,363.58 434,363.58 Amortization of long-term fees to apportioned 609,770.58 292,184.70 Loss from fixed assets scrapping ("-" for gains) 477.98 Decreases in inventories ("-" for increases) -37,615.58 -34,035.33 Decreases in operating receivables ("-" for increases) -326,357.40 159,732.97 Increases in operating payables ("-" for decreases) -651,711.64 -932,414.40 Net cash flows from operating activities 3,110,677.60 3,231,073.10 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 10,751,658.64 10,108,175.91 Less: balance of cash at the beginning of the period 9,681,607.16 27,210,248.01 Net increase in cash and cash equivalents 1,070,051.48 -17,102,072.10 90 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 (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 Item Ending balance Beginning balance I. Cash 10,751,658.64 9,681,607.16 Including: cash on hand 383,507.23 264,156.33 Unrestricted bank deposits 10,368,151.41 9,417,450.83 III. Ending balance of cash and cash equivalents 10,751,658.64 9,681,607.16 Other explanation: nil 77. 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 78. Assets with ownership or use right restricted: nil 79. 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 80. Hedging Released the items and relevant instruments by types, and qualitative and quantitative information for hedge risks: nil 91 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 81. Other VIII. Changes of consolidation range 1. Enterprise consolidation not under the same control: nil 2. Enterprise consolidation under the same control: 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 At end of the period, wholly-owned subsidiary Hainan Wengao Tourism Resources Development Co., Ltd. included in combination scope 6. Other IX. Equity in other entity 1. Equity in the subsidiary: nil 2. Changes in the owner's equity share of the subsidiary and the transaction is still controlled subsidiary: nil 3. Equity in arrangement of joint venture or associated enterprises: nil 4. Important common management: nil 5. Equity in structured entities not included in the consolidated financial statements Relevant examination: nil Hainan Wengao Tourism Resources Development Co., Ltd. is a wholly-owned subsidiary invested and established by the company in 92 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 June 2018. It has just completed the registration procedures and has not yet started operation. During the reporting period, no significant expenses and expenditures incurred, its financial status and operating results did not have a significant impact on the company, Hainan Wengao Tourism Resources Development Co., Ltd. was not included in the consolidated financial statements of the company during the reporting period 6. Other X. Risks related to financial instruments XI. Fair value disclosures: nil XII. Related parties and related-party transactions 1. Parent company Registered Registered Capital Shareholding ratio Voting ratio in the Parent company Nature of Business place in the Company Company 1151.15 million Luoniushan Co., Ltd. Haikou City Plant and culturing 17.55% 19.80% Yuan Note As of 30 June 2018, Luoniushan Co., Ltd. (hereinafter referred to as Luoniushan) and its wholly-owned subsidiary Hainan Ya’anju Property Service Co., Ltd. holds 72,091,780 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: Other note: nil 2. Subsidiary of the Enterprise Found more in Notes 3. Cooperative enterprise and joint venture Found more in Notes Other cooperative enterprise or joint ventures which has related transaction with the Company in the period or occurred previous: Nil 93 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 4. Other related party: nil 5. Related transaction: nil 6. Receivable/payable items of related parties (1) Receivable In RMB Ending balance Beginning balance Item Related party Provision for bad Provision for bad Book balance Book balance debt debt Account Luoniushan Co., Ltd. 65,420.00 166,412.00 receivable (2) Payable item: nil 7. Commitments of related party 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 94 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 Nil 2. Contingencies (1) Major contingencies on balance sheet date On May 26,2016 , the Company received lawyer’s letter of Hainan Yunfan law firm which is entrusted by Hainan Power Grid Co., LTD Sanya Power Supply Bureau (hereinafter referred to as the "Sanya Power Supply Bureau"), the letter claims that Sanya Power Supply Bureau found that the Company’s subsidiary South China Grand Hotel of Hainan Dadonghai Tourism Center (Holdings) Co., Ltd’s the amount of CT is different with its marketing management system record. The inconformity time is July, 2006, and the hotel’s CT is changing on April, 2016. Therefore, undercounted electricity consumption amount is 10,313,373.00 kilowatt-hours, and estimated cost is 7,200,165.75 Yuan as various electricity prices and charges. According to the file “Law Advisory Opinion about Retroactive Power (Charge) Dispute between South China Grand Hotel and Sanya Power Supply Bureau” issued by Beijing Junhe (Haikou) Law Firm on December 20, 2016, which claims that Sanya Power Supply Bureau has responsibility for CT to purchase, install, enseal, unseal and change, therefore, the responsibility of the guilty party for undercounted electricity consumption of South China Grand Hotel is Sanya Power Supply Bureau. According to the one hundred and thirty-five item of “General Rule of Civil Law”, this item claims that limitation of action is two years if accuser request people's court’s protection, except situations provided by law. The Company has withheld the undercounted electricity consumption cost in 2016 which is about 1,489,685.04 Yuan during the period from April, 2014 to April, 2016. The event has no further progress up to 31 December 2017. (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 95 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 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: nil 3. Assets replacement: nil 4. Annuity plan: nil 5. Termination of operation: nil 6. Segment information: nil 7. Major trading and items shows influence on investors’ decision-making: nil 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 96 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 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: nil 2. Other receivables: nil 3. Long-term equity investment: nil 4. Operation income and operation cost: nil 5. Investment income: nil 6. Other: nil XVIII. Supplementary information 1. Details of current non-recurring profits and losses √ Applicable □ Not applicable In RMB Item Amount Note Profits or losses from disposal of non-current assets -477.98 Loss from fixed assets scrapping Other non-operating income and expense other than the 273.00 Refund of vehicle tolls abovementioned ones Total -204.98 -- 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 97 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 2. Return on net assets and earnings per share Earnings per share (RMB) Weighted Profit during the reporting period average return Basic earnings per Diluted earnings per on net assets (%) share share Net profits attributable to ordinary shareholders of the 1.65% 0.0035 0.0035 Company Net profits attributable to ordinary shareholders of the 1.65% 0.0035 0.0035 Company after deduction of non-recurring profits or 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 98 司公限有份股心中游旅海东大南海 2018 文全告报度年半年 Section XI. Documents available for references I. Text of Semi-Annual Report 2018 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 CENTER (HOLDINGS) CO., LTD. Chairman: Yuan Xiaoping 9 August 2018 99