Short Form of the Stock: Dadonghai-A, Dadonghai-B Stock Code: 000613, 200613 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 2015 (Full Text) Disclosure Date: 25 July 2015 司公限有份股心中游旅海东大南海 2015 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. All directors are attended the Board Meeting for Report deliberation. The Company has no plans of cash dividend distributed, no bonus shares and has no share converted from capital reserve either. Li Yuanbin, principal of the Company, Fu Zongren, person in charger of accounting works and Liu Xianghai, person in charge of accounting organ (accounting principal) hereby confirm that the Financial Report of Semi-Annual Report 2015 is authentic, accurate and complete. Concerning the forward-looking statements with future planning involved in the Semi-Report, they do not constitute a substantial commitment for investors. Investors are advised to exercise caution of investment risks. Content Semi-Annual Report 2015 ...................................................................................................................1 Section I Important Notice, Contents and Paraphrase .........................................................................1 Section II Company Profile..................................................................................................................3 Section III Accounting data and summary of finnaical indexes ..........................................................4 Section IV Report of the Board of Directors .......................................................................................6 Section V Important Events ................................................................................................................... Section VI Changes in shares and particular about shareholders .......................................................... Section VII Preferred Stock……………………………………………………………………….. Section VIII Directors, Supervisors and Senior Executives .............................................................15 Section IX Financial Report................................................................................................................... Section X Documents Available for Reference .................................................................................... 1 司公限有份股心中游旅海东大南海 2015 告报度年半年 Paraphrase Items Refers to Definition 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 of Hainan Dadonghai Tourism Centre Article of Association Refers to (Holdings) Co., Ltd. Shareholders’ General Meeting of Hainan Dadonghai Shareholders’ General Meeting Refers to Tourism Centre (Holdings) Co., Ltd. Board of Directors of Hainan Dadonghai Tourism Centre Board of Directors Refers to (Holdings) Co., Ltd. Supervisory Committee of Hainan Dadonghai Tourism Supervisory Committee Refers to Centre (Holdings) Co., Ltd. Yuan Refers to RMB/CNY 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 2015, 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. 2 司公限有份股心中游旅海东大南海 2015 告报度年半年 Section II Company profile I. Company Profile Short form for share Dadonghai-A , Dadonghai-B Code for share 000613, 200613 Short form for share after the N/A change Listing stock exchange Shenzhen Stock Exchange Chinese name of the Company 司公限有份股心中游旅海东大南海 Abbr. of Chinese name of the Company 海东大 English name of the Company Hainan Dadonghai Tourism Centre (Holdings) Co.,Ltd. Abbr. of English name of the DADONGHAI Company Legal Representative Li Yuanbin II. Contact person and ways Secretary of the Board Rep. of securities affairs Name Wang Hongjuan Contact adds. 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 has no change in reporting period, found more details in Annual Report 2014. 2. Information disclosure and preparation place Whether information disclosure and preparation place changed in reporting period or not □ Applicable √ Not applicable 3 司公限有份股心中游旅海东大南海 2015 告报度年半年 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 2014. 3. Registration changes of the Company Whether registration has changed in reporting period or not □ Applicable √ Not applicable Date/place for registration of the Company, registration number for enterprise legal license, number of taxation registration and organization code have no change in reporting period, found more details in Annual Report 2014. 4 司公限有份股心中游旅海东大南海 2015 告报度年半年 Section III. Accounting data and summary of financial indexes I. Main accounting data and financial indexes Whether it has retroactive adjustment or re-statement on previous accounting data for accounting policy changed and accounting error correction or not □Yes √ No Increase/decrease in this report Current period Same period of last year y-o-y Operating revenue (RMB) 8,421,296.50 11,686,452.00 -27.94% Net profit attributable to shareholders of -3,391,966.64 -848,458.96 -299.78% the listed company(RMB) Net profit attributable to shareholders of the listed company after deducting -4,797,114.00 -907,687.13 -428.50% non-recurring gains and losses(RMB) Net cash flow arising from operating 830,910.41 14,916.68 5,470.34% activities(RMB) Basic earnings per share (RMB/Share) -0.0093 -0.0023 -304.35% Diluted earnings per share (RMB/Share) -0.0093 -0.0023 -304.35% Weighted average ROE (%) -4.10% -1.04% -294.23% Increase/decrease in this End of current period End of last period report-end over that of last period-end Total assets (RMB) 109,920,311.47 114,080,998.28 -3.65% Net assets attributable to shareholder of 81,023,367.69 84,415,334.33 -4.02% listed company(RMB) II. 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 In RMB Net profit attributable to shareholders of listed Net assets attributable to shareholders of listed company company Amount in this period Amount in last period Amount at period-end Amount at 5 司公限有份股心中游旅海东大南海 2015 告报度年半年 period-begin Chinese GAAP -3,391,966.64 -848,458.96 81,023,367.69 84,415,334.33 Items and amount adjusted by IAS By IAS -3,391,966.64 -848,458.96 81,023,367.69 84,415,334.33 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 In RMB Net profit attributable to shareholders of listed Net assets attributable to shareholders of listed company company Amount at Amount in this period Amount in last period Amount at period-end period-begin Chinese GAAP -3,391,966.64 -848,458.96 81,023,367.69 84,415,334.33 Items and amount adjusted by foreign accounting rules By foreign accounting rules -3,391,966.64 -848,458.96 81,023,367.69 84,415,334.33 3. Reasons for the differences of accounting data under accounting rules in and out of China No differences. III. Items and amounts of extraordinary profit (gains)/loss √Applicable □Not applicable In RMB Item Amount Note Losses 2,075.60 Yuan from disposal of fixed Gains/losses from the disposal of non-current asset (including the 164,123.86 assets, the bad debt provision accrual 166,199.46 write-off that accrued for impairment of assets) Yuan has been written back. Mainly because the second largest shareholders Other non-operating income and expenditure except for the 1,241,023.50 gains 1,194,445.50 Yuan from short-swing trading aforementioned items which is belongs to the Company Total 1,405,147.36 -- 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 6 司公限有份股心中游旅海东大南海 2015 告报度年半年 extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss 7 司公限有份股心中游旅海东大南海 2015 告报度年半年 Section IV. Report of the Board of Directors I. Introduction During the reporting period, the Company experienced intensified operation decline due to the continuous depress of the overall economic conditions and tourism market as well as our internal operating adjustments. In front of the severe operating difficulties, the Company implemented lots of countermeasures, including increasing cooperation with tourism agencies, network distributors and tourism resorts to share resources; strengthening our internal control management, saving energy and reducing consumption, expanding revenue sources, controlling costs and expenses, and stopping waste; updating software and hardware, enhancing management on internal and external operating environment, updating certain rooms and facilities in batches during the low seasons, so as to further improve our service quality and management. Through these measures, the Company tried its best to prevent operation decline conquering such disadvantages. In reporting Period, operation revenue of the Company amounting to RMB 8.4213 million, decreased RMB 3.2652 million over same period of last year with 27.94% down; operation profit gains RMB -4.6309 million, more RMB 3.7232 million loss from a year earlier with 410.19% declined; net non-operating income and expenses amounting to RMB 1.2389 million, increased RMB 1.1797 million form a year earlier with 1991.82% up; net profit was RMB -3.392 million, more RMB 2.5435 million loss from a year earlier with 299.78% up. The profit structure or profit resource of the Company has no major chanegd in the Period II. Main business analysis Y-o-y changes of main financial data In RMB Y-o-y Same period of Current period increase/de Reasons for changes last year crease Operation revenue 8,421,296.50 11,686,452.00 -27.94% The hotel rates and letting rate declined in the Period Mainly due to the company had taken back the Operation cost 271,303.89 5,336.51 4,983.92% breakfast managing rights of Chinese restaurant of current year and restaurant cost increase Mainly due to the rising prices in the Period, the Sales expenses 6,139,828.47 5,924,967.97 3.63% expenses increased Mainly due to the rising prices in the Period, the Administrative expenses 6,399,160.26 5,961,388.09 7.34% expenses increased Mainly because the declined of credit card and the Financial cost -63,474.74 48,005.23 -232.22% increase of bank deposit interest income Net cash flow arising from Mainly due to the account receivable collected and 830,910.41 14,916.68 5,470.34% operation activities revenue from abusive share trading by the shareholders 8 司公限有份股心中游旅海东大南海 2015 告报度年半年 with over 5 percent shares held Net cash flow arising from Mainly due to the decrease of disposal of fixed assets -26,327.00 -159,200.00 83.46% investment activities in the Period Mainly due to the account receivable collected and Net increase of cash and cash 804,583.41 -144,283.32 657.64% revenue from abusive share trading by the shareholders equivalent with over 5 percent shares held Major changes on profit composition or profit resources in reporting period □ Applicable √ Not applicable No major changes on profit composition or profit resources occurred in reporting period The future development and planning extended to reporting period that published in disclosure documents as prospectus, private placing memorandum and recapitalize statement □ Applicable √ Not applicable No future development and planning extended to reporting period that published in disclosure documents as prospectus, private placing memorandum and recapitalize statement Review on the previous business plan and its progress during reporting period During the reporting period, as affected by the continuous depress of the overall economic conditions and tourism market, our internal operation management adjustment, upgrade of certain hotel facilities as well as increase in costs and expenses, the Company adopted actions accordingly to complete its operating target determined at the beginning of the year, which included adjusting operating strategies, insisting on market-oriented demand, intensifying sales resources based on economic benefits and effectively improving service quality. III. Constitution of main business In RMB Increase or Increase or Increase or decrease of decrease of decrease of gross Operating Operating cost Gross profit ratio operating revenue operating cost profit ratio over revenue over same period over same period same period of of last year of last year last year According to industries Tourism & 8,421,296.50 271,303.89 96.78% -27.94% 4,983.92% -3.18% catering According to products Tourism & 8,421,296.50 271,303.89 96.78% -27.94% 4,983.92% -3.18% catering According to region Hainan Province 8,421,296.50 271,303.89 96.78% -27.94% 4,983.92% -3.18% IV. Core competitive-ness analysis In the reporting period, the Company’s core competitive-ness had no major changes, and more details can be found in Annual Report 2014. 9 司公限有份股心中游旅海东大南海 2015 告报度年半年 V. Investment analysis 1. Equity investment outside (1) Investment outside √Applicable □Not applicable Investment outside Investment in the same period of last year Investment in the reporting period (RMB) Changes (RMB) 19,216,374.26 24,716,374.26 -22.25% Invested company Proportion of equity in invested company Name Main business for listed company Shenzhen Difu Investment & Development Investment, business, material supply and 14.28% Ltd marketing Sanya Xiangyu E-Business Co., Ltd. E-business, software etc. 18.00% Hubei Jingsha Dadonghai Club Ltd. Entertainment industry 91.00% Sanya Shun’an Casino Entertainment industry 70.00% (2) Holding the equity of financial enterprise □ Applicable √ Not applicable The company had not held the equity of financial enterprise in the reporting period-end. (3) Securities investment □ Applicable √ Not applicable The Company has no securities investment in the Period (4)Explanation on equity of other listed company held □ Applicable √ Not applicable The Company had no equity of other listed company held in Period. 2. Trust financing, investment of derivatives and entrustment loan (1) Trust financing □ Applicable √ Not applicable The Company has no trust financing in the Period 10 司公限有份股心中游旅海东大南海 2015 告报度年半年 (2) Investment of derivatives □ Applicable √ Not applicable The Company has no derivatives investment in the Period (3) Entrustment loan □ Applicable √ Not applicable The Company has no entrustment loan in the Period 3. Application of raised proceeds □ Applicable √ Not applicable The company had no application of raised proceeds in the reporting period. 4. Main subsidiaries and joint-stock companies analysis □ Applicable √ Not applicable No main subsidiaries or joint-stock companies in Period. 5. Major project invested by non-raised funds □ Applicable √ Not applicable No major project invested by non-raised funds in Period. VI. Prediction of business performance from January – September 2015 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 VII. Explanation from the Board and Supervisory Committee for “Qualified Opinion” from the CPA of this year’s □ Applicable √ Not applicable VIII. Explanation on “Qualified Opinion” of previous year from the Board □ Applicable √ Not applicable IX. Implementation of profit distribution in reporting period Implementation or adjustment of profit distribution plan in reporting period, cash dividend plan and shares converted from capital reserve in particular □ Applicable √ Not applicable Previous year’s profit distribution plan was no profit distribution and shares converted from capital reserve either 11 司公限有份股心中游旅海东大南海 2015 告报度年半年 X. 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 XI. In the report period, reception of research, communication and interview √Applicable □Not applicable Time Place Way Type Reception Contents discussed and material provided Telephone Investor in Company Operation situation of the Company in the 2015-04-08 communicati Individual Shanghai headquarters first quarter, no material provided on (Surname Han) Telephone Investor in Advance money payment for share Company 2015-05-15 communicati Individual Guangdong merger reform and un-lock issues, no headquarters on (Surname Wang) material acquired Telephone Investor in Whether the Company has information Company 2015-06-26 communicati Individual Shenzhen that should be disclosed without released, headquarters on (Surname Zhou) no material acquired 12 司公限有份股心中游旅海东大南海 2015 告报度年半年 Section V. Important Events I. Corporate governance During the report period, the Company strictly follows the requirements of “Corporation Law”, "Securities Law", "Listing Rules of Shenzhen Stock Exchange Stock ", and other relevant laws and regulations, establishes and improves the corporate governance system, improves the corporate governance structure, and promotes the company’s standard operation, there is no difference between the actual state of corporate governance and the requirements of relevant provisions of China Securities Regulatory Commission. During the reporting period, the general meeting, board of directors and board of supervisors of the Company exercised their rights of decision-making, execution and supervision separately with clearly defined terms of reference, under which, the three authority organs ran in standardized and effective way with each being balanced by the other two. The convening procedure, proposal consideration procedure and decision-making procedure of the three organs all met relevant requirements. The Directors performed their duties on an honest, diligent and independent basis in strict accordance to the Listing Rules, which was in the interest of the Company and the shareholders as a whole, with the legal interest of the minority shareholders protected as well. Our supervisors made independent and effective supervision and review on the directors, senior management and their financial condition. The Company will continue to improve the corporate governance, seriously fulfill the obligation of information disclosure, strengthen the management to information disclosure, maintain the principle of fairness about the information disclosure, strengthen the investor relations management, and protect the legitimate rights and interests of all investors. II. 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 III. Question from media □ Applicable √ Not applicable No universal questioned by media in reporting period IV. Bankruptcy reorganization □ Applicable √ Not applicable In reporting period, the Company has no bankruptcy reorganization occurred. 13 司公限有份股心中游旅海东大南海 2015 告报度年半年 V. Transaction in assets 1. Assets acquisition □ Applicable √ Not applicable The Company did not purchased assets in the Period 2. Sales of assets □ Applicable √ Not applicable The Company did not sell assets in the Period 3. Business combination □ Applicable √ Not applicable The Company has no business combined in the Period VI. Implementation of the company’s equity incentive and the effects □ Applicable √ Not applicable No equity incentive in reporting period VII. Insignificant related transactions 1. Related transaction with daily operation concerned □ Applicable √ Not applicable No related transaction with daily operation concerned in Period. 2. Related transaction incurred by purchase or sales of assets □ Applicable √ Not applicable No related transaction incurred by purchase or sales of assets in Period 3. Related transaction from jointly investment outside □ Applicable √ Not applicable No related transaction from jointly investment outside occurred in Period 4. Credits and liability of related party √Applicable □Not applicable Whether exist non-operating contact of related credit and debt or not √Yes □No Related party claims receivable: Whether Balance of The newly The amount of Current Balance at Related Resulted exist period-begin added recovery in Interest interest period-end Related party relationship reason non-operatio (in 10 amount in Period rate (in 10 (in 10 nal capital thousand Period (in 10 thousand thousand thousand 14 司公限有份股心中游旅海东大南海 2015 告报度年半年 occupying Yuan) (in 10 Yuan) Yuan) Yuan) thousand Yuan) First Luoniushan Co., Consumpti majority No 0.47 1.27 1.48 0.00% 0 0.26 Ltd on shareholder Influence on operation result and financial statue of the No influence Company from related credit and debts Related party debt payable: no 5. Other related transactions √Applicable □Not applicable In reporting Period, lodging and beverage consumption amounting to 12700 Yuan from the first majority shareholder Luoniushan Co., Ltd., presenting 0.15% in similar trading amount, the trading price refers to the amrket price, and the settlement way was same as the non-related transactions VIII. 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 IX. 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 The Company had no leasing in the reporting period. 15 司公限有份股心中游旅海东大南海 2015 告报度年半年 2. Guarantee □ Applicable √ Not applicable The Company had no guarantee in the reporting period. 3. Other material contracts □ Applicable √ Not applicable The Company had no other material contracts in the reporting period. 4. Other material transactions □ Applicable √ Not applicable The Company had no other material transactions in the reporting period. X. Commitments made by the Company or shareholders holding above 5% shares of the Company in reporting period or occurred in the previous reporting period but continued to reporting period √Applicable □Not applicable Commitmen Commitme Commitments Accepter Contents Implementation t time nt period Seeking No appropriate First majority restructuring Commitments for restructuring side shareholder side actively for 2014-06-27 In 3 years Share Merger Reform has been found so Luoniushan Co., Ltd assets far. reorganization Commitments in report of acquisition or equity change Commitments in assets reorganization Commitments make in Initial public offering or re-financing Other commitments for minority shareholders Implemented commitments on time(Y/N) N Detail reasons for un-complement and further N/A plan XI. 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. XII. Penalty and rectification √Applicable □Not applicable 16 司公限有份股心中游旅海东大南海 2015 告报度年半年 Classify by Conclusi Title/Name Type Cause survey Disclosure date Disclosure index on punishment Shareholde The “Notice of Short-swing trading by Pan rs with Short-swing Second largest shareholder” No.: 2015-009 Other N/A 2015-03-18 Guoping over 5% trading released on Securities Times, Hong Kong shares held Commercial Daily and Juchao Website Directors, supervisors, senior executives and shareholders with over 5% shares held suspected trading irregularities and the Company released the particular about taken back improprieties incomes √Applicable □Not applicable Name of shareholders with over 5% shares Time to taken back the improprieties Improprieties incomes (RMB) held incomes Pan Guoping 2015-03-17 1,194,445.50 XIII. Risk disclosure of delisting with laws and rules violated □ Applicable √ Not applicable The Company has no delisting risks with laws and rules violated in Period XIV. Explanation on other significant events □ Applicable √ Not applicable The Company had no explanation on other significant events in the reporting period. 17 司公限有份股心中游旅海东大南海 2015 告报度年半年 Section VI. Changes in Shares and Particulars about Shareholders I. Changes in shares In share Before change Increase/decrease in this time (+ , - ) After change Capitali zation New Bonus Amount Ratio of Other Subtotal Amount Ratio issue share public reserve I. Restricted shares 15,535,200 4.27% 15,535,200 4.27% 1. State-owned shares 2. State-owned corporate 3,029,400 0.83% -660,000 -660,000 2,369,400 0.65% shares 12,505,800 3.44% 660,000 660,000 13,165,800 3.62% 3. Other domestic shares Including: Domestic 12,373,800 3.40% 198,000 198,000 12,571,800 3.46% legal person shares Domestic natural person 132,000 0.04% 462,000 462,000 594,000 0.16% shares II. Unrestricted shares 348,564,800 95.73% 348,564,800 95.73% 260,564,800 71.56% 260,564,800 71.56% 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% 364,100,000 100.00% Reasons for share changed √Applicable □Not applicable In the process of subsequent work of share-trading reform of the Company, according to relevant regulations the release procedures were in process and part of the shareholders handling the payment of account paid in advance. Thus, the share structure changes in the report period but retained the same in total share capital. Approval of share changed □ Applicable √ Not applicable Ownership transfer of share changed □ Applicable √ Not applicable Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to 18 司公限有份股心中游旅海东大南海 2015 告报度年半年 common shareholders of Company in latest year and period □ Applicable √ Not applicable Other information necessary to disclose for the Company or need to disclosed under requirement from security regulators □ Applicable √ Not applicable Explanation on changes in aspect of total shares, shareholders structures as well as structure of assets and liability of the Company □ Applicable √ Not applicable II. Number of shares and shares held In share Total preference shareholders with Total common shareholders at period-end 28,181 voting rights recovered at end of 0 reporting period Particulars about shares held above 5% by common shareholders or top ten common shareholders Number of Number of share Proporti Amount of Amount of common Changes in pledged/frozen Nature of on of restricted unrestricted Shareholders shares held reporting shareholder shares common common State of at period Amount held shares held shares held share period-end Domestic Luoniushan Co., Ltd. non-state-owned 16.81% 61,190,270 0 0 61,190,270 legal person Domestic nature Pan Guoping 8.48% 30,879,791 0 0 30,879,791 Pledged 30,000,000 person Overseas First Shanghai Securities Limited 1.69% 6,166,198 6,166,198 0 6,166,198 legal person Domestic Yangpu Tongrong Investment non-state-owned 1.27% 4,618,800 198,000 4,618,800 0 Management Consultation Co., Ltd. legal person Overseas CITRINE CAPITAL LIMITED 0.90% 3,265,200 0 0 3,265,200 legal person Penghua Asssets- Galaxy Securities-Essence Qiansheng Other 0.82% 2,993,420 2,993,420 0 2,993,420 Future Management (SZ) Co., Ltd. Domestic nature Sun Huiming 0.78% 2,833,890 2,833,890 0 2,833,890 person Domestic nature Li Shuyang 0.70% 2,549,200 2,549,200 0 2,549,200 person 19 司公限有份股心中游旅海东大南海 2015 告报度年半年 Domestic Sanya Zhongxing Development non-state-owned 0.70% 2,541,000 0 2,541,000 0 Co., Ltd. legal person Domestic Sanya Rural Credit Cooperative non-state-owned 0.63% 2,310,000 0 0 2,310,000 legal person Strategy investors or general corporate becomes top 10 N/A common shareholders due to rights issued The Company is unknown whether there exists associated relationship or belongs to Explanation on associated relationship among the the consistent actor regulated by the Management Measure of Information aforesaid shareholders Disclosure on Change of Shareholding for Listed Company among the other shareholders. Particular about top ten common shareholders with un-restrict shares held Amount of unrestricted common shares held at Type of shares Shareholders period-end Type Amount RMB common Luoniushan Co., Ltd. 61,190,270 61,190,270 share Domestically Pan Guoping 30,879,791 30,879,791 listed foreign share Domestically First Shanghai Securities Limited 6,166,198 6,166,198 listed foreign share Domestically CITRINE CAPITAL LIMITED 3,265,200 3,265,200 listed foreign share Penghua Asssets- Galaxy Securities-Essence RMB common 2,993,420 2,993,420 Qiansheng Future Management (SZ) Co., Ltd. share Domestically Sun Huiming 2,833,890 2,833,890 listed foreign share RMB common Li Shuyang 2,549,200 2,549,200 share RMB common Sanya Rural Credit Cooperative 2,310,000 2,310,000 share Domestically CREDIT SUISSE AG SINGAPORE BRANCH 1,961,575 1,961,575 listed foreign share RMB common CITIC Securities Co., Ltd. 1,890,622 1,890,622 share Expiation on associated relationship or consistent The Company is unknown whether there exists associated relationship or belongs to actors within the top 10 un-restrict common the consistent actor regulated by the Management Measure of Information shareholders and between top 10 un-restrict common Disclosure on Change of Shareholding for Listed Company among the other shareholders and top 10 common shareholders shareholders. 20 司公限有份股心中游旅海东大南海 2015 告报度年半年 Explanation on top ten common shareholders Li Shuyang holds 2,549,200 A-Share of the Dadonghai through the client credit involving margin business guarantee account under the name of Hengtai Securities Co., Ltd. Whether top ten common shareholders or top ten common shareholders with un-restrict shares held have a buy-back agreement dealing in reporting period □ Yes √ No The top ten common shareholders or top ten common shareholders with un-restrict shares held of the Company have no buy-back agreement dealing in reporting period. III. 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. IV. Share holding increasing plan proposed or implemented in reporting period from shareholder of the Company and its concerted action person □ Applicable √Not applicable As far as the Company know, there are no share holding increasing plan proposed or implemented in Period from shareholder of the Company and its concerted action person 21 司公限有份股心中游旅海东大南海 2015 告报度年半年 Section VII. Preferred Stock □ Applicable √ Not applicable The Company had no preferred stock in the reporting. 22 司公限有份股心中游旅海东大南海 2015 告报度年半年 Section VIII. Directors, Supervisors and Senior Executives I. Changes of shares held by directors, supervisors and senior executives □ Applicable √ Not applicable Shares held by directors, supervisors and senior executives have no changes in reporting period, found more details in Annual Report 2014. II. Resignation and dismissal of directors, supervisors and senior executives √Applicable □Not applicable Name Title Type Date Reason Chen Zhen CFO Leave the post 2015-04-01 Resignation Person in charge Fu Zongren Engagement 2015-04-15 Engagement of finance 23 司公限有份股心中游旅海东大南海 2015 告报度年半年 Section IX. Financial Report I. Audit reports Whether the semi-annual report was audited or not □ Yes √ No The financial report of this semi-annual report was unaudited II. Financial statements Units in Notes of Financial Statements is RMB 1. Balance sheet Prepared by: Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd. 2015-06-30 In RMB Item Closing balance Opening balance Current assets: Monetary funds 23,354,872.95 22,550,289.54 Settlement funds Lending funds Financial liability measured by fair value and with variation reckoned into current gains/losses Derivative financial liability Notes receivable Accounts receivable 456,843.54 2,632,379.02 Prepayments 38,026.00 40,778.52 Insurance receivable Reinsurance receivables Contract reserve of reinsurance receivable Interest receivable Dividends receivable Other receivables 303,919.60 332,661.26 Purchase restituted finance asset Inventories 308,746.25 307,057.29 24 司公限有份股心中游旅海东大南海 2015 告报度年半年 Divided into assets held for sale Non-current assets maturing within one year 49,090.84 196,354.90 Other current assets Total current assets 24,511,499.18 26,059,520.53 Non-current assets: Loans and payments on behalf Available-for-sale financial assets 4,500,000.00 4,500,000.00 Held-to-maturity investments Long-term receivables Long-term equity investments Investment real estate Fixed assets 54,123,058.19 56,301,360.07 Construction in progress Project materials Disposal of fixed assets Productive biological assets Oil and natural gas assets Intangible assets 26,785,754.10 27,220,117.68 Research and development costs Goodwill Long-term deferred expenses Deferred tax assets Other non-current assets Total non-current assets 85,408,812.29 88,021,477.75 Total assets 109,920,311.47 114,080,998.28 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 25 司公限有份股心中游旅海东大南海 2015 告报度年半年 Accounts payable 2,120,545.16 2,390,345.19 Accounts received in advance 1,179,821.60 1,360,245.91 Selling financial asset of repurchase Commission charge and commission payable Wage payable 3,448,554.78 3,451,674.05 Taxes payable -1,535,805.59 -1,155,972.31 Interest payable Dividend payable Other accounts payable 23,683,827.83 23,619,371.11 Reinsurance payables Insurance contract reserve Security trading of agency Security sales of agency Divided into liability held for sale Non-current liabilities due within 1 year Other current liabilities Total current liabilities 28,896,943.78 29,665,663.95 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 Deferred income Deferred income tax liabilities Other non-current liabilities Total non-current liabilities Total liabilities 28,896,943.78 29,665,663.95 Owners’ equity: Share capita 364,100,000.00 364,100,000.00 Other equity instrument 26 司公限有份股心中游旅海东大南海 2015 告报度年半年 Including: preferred stock Perpetual capital securities Capital public reserve 54,142,850.01 54,142,850.01 Less: Inventory shares Other comprehensive income Reasonable reserve Surplus reserve Provision of general risk Retained profit -337,219,482.32 -333,827,515.68 Total owner’s equity attributable to parent Company 81,023,367.69 84,415,334.33 Minority interests Total owner’s equity 81,023,367.69 84,415,334.33 Total liabilities and owner’s equity 109,920,311.47 114,080,998.28 Legal Representative: Li Yuanbin Accounting Principal: Fu Zongren Accounting Firm’s Principal: Liu Xianghai 2. Profit statement In RMB Item Current Period Last Period I. Total operating income 8,421,296.50 11,686,452.00 Including: Operating income 8,421,296.50 11,686,452.00 Interest income Insurance gained Commission charge and commission income II. Total operating cost 13,052,211.04 12,594,139.13 Including: Operating cost 271,303.89 5,336.51 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 471,592.62 654,441.33 27 司公限有份股心中游旅海东大南海 2015 告报度年半年 Sales expenses 6,139,828.47 5,924,967.97 Administration expenses 6,399,160.26 5,961,388.09 Financial expenses -63,474.74 48,005.23 Losses of devaluation of asset -166,199.46 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 “-”) III. Operating profit (Loss is listed with “-”) -4,630,914.54 -907,687.13 Add: Non-operating income 1,241,023.50 60,567.76 Including: Disposal earnings of non-current asset Less: Non-operating expense 2,075.60 1,339.59 Including: Disposal loss of non-current asset 2,075.60 1,339.59 IV. Total Profit (Loss is listed with “-”) -3,391,966.64 -848,458.96 Less: Income tax V. Net profit (Net loss is listed with “-”) -3,391,966.64 -848,458.96 Net profit attributable to owner’s equity of parent Company -3,391,966.64 -848,458.96 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 28 司公限有份股心中游旅海东大南海 2015 告报度年半年 held-to-maturity investment as available-for-sale financial assets 4. The effect hedging portion of gains or losses arising from cash flow hedging instruments 5. Translation differences arising on translation of foreign currency financial statements 6. Other Net after-tax of other comprehensive income attributable to minority shareholders VII. Total comprehensive income -3,391,966.64 -848,458.96 Total comprehensive income attributable to owners of parent -3,391,966.64 -848,458.96 Company Total comprehensive income attributable to minority shareholders VIII. Earnings per share: (i) Basic earnings per share -0.0093 -0.0023 (ii) Diluted earnings per share -0.0093 -0.0023 Legal Representative: Li Yuanbin Accounting Principal: Fu Zongren Accounting Firm’s Principal: Liu Xianghai 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 10,868,413.03 12,145,114.03 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 29 司公限有份股心中游旅海东大南海 2015 告报度年半年 Write-back of tax received Other cash received concerning operating activities 1,871,202.02 147,264.33 Subtotal of cash inflow arising from operating activities 12,739,615.05 12,292,378.36 Cash paid for purchasing commodities and receiving labor service 2,990,680.12 2,563,586.97 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 4,985,952.00 5,246,096.51 Taxes paid 1,611,875.83 1,465,661.88 Other cash paid concerning operating activities 2,320,196.69 3,002,116.32 Subtotal of cash outflow arising from operating activities 11,908,704.64 12,277,461.68 Net cash flows arising from operating activities 830,910.41 14,916.68 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 4,200.00 assets Net cash received from disposal of subsidiaries and other units Other cash received concerning investing activities Subtotal of cash inflow from investing activities 4,200.00 Cash paid for purchasing fixed, intangible and other long-term assets 26,327.00 163,400.00 Cash paid for investment Net increase of mortgaged loans Net cash received from subsidiaries and other units Other cash paid concerning investing activities Subtotal of cash outflow from investing activities 26,327.00 163,400.00 Net cash flows arising from investing activities -26,327.00 -159,200.00 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 30 司公限有份股心中游旅海东大南海 2015 告报度年半年 Other cash received concerning financing activities Subtotal of cash inflow from financing activities Cash paid for settling debts Cash paid for dividend and profit distributing or interest paying Including: Dividend and profit of minority shareholder paid by subsidiaries Other cash paid concerning financing activities Subtotal of cash outflow from financing activities Net cash flows arising from financing activities IV. Influence on cash due to fluctuation in exchange rate V. Net increase of cash and cash equivalents 804,583.41 -144,283.32 Add: Balance of cash and cash equivalents at the period -begin 22,550,289.54 6,835,685.46 VI. Balance of cash and cash equivalents at the period -end 23,354,872.95 6,691,402.14 31 司公限有份股心中游旅海东大南海 2015 告报度年半年 4. Statement on Changes of Owners’ Equity Current Period In RMB Current Period Owners’ equity attributable to the parent Company Other Item Provision equity instrument Less: Other Minority Total owners’ Capital Reasonable Surplus of Share capital Perpetual Inventory comprehensive Retained profit interests equity Preferred reserve reserve reserve general capital Other shares income stock risk securities I. Balance at the end of the last year 364,100,000.00 54,142,850.01 -333,827,515.68 84,415,334.33 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 -333,827,515.68 84,415,334.33 year III. Increase/ Decrease in this year -3,391,966.64 -3,391,966.64 (Decrease is listed with “-”) (i) Total comprehensive income -3,391,966.64 -3,391,966.64 (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 32 司公限有份股心中游旅海东大南海 2015 告报度年半年 (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 -337,219,482.32 81,023,367.69 period 33 司公限有份股心中游旅海东大南海 2015 告报度年半年 Last Period In RMB Last Period Owners’ equity attributable to the parent Company Other Item Provision equity instrument Less: Other Minority Total owners’ Capital Reasonable Surplus of Share capital Perpetual Inventory comprehensive Retained profit interests equity Preferred reserve reserve reserve general capital Other shares income stock risk securities I. Balance at the end of the last year 364,100,000.00 54,142,850.01 -336,331,002.15 81,911,847.86 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 -336,331,002.15 81,911,847.86 year III. Increase/ Decrease in this year -848,458.96 -848,458.96 (Decrease is listed with “-”) (i) Total comprehensive income -848,458.96 -848,458.96 (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 34 司公限有份股心中游旅海东大南海 2015 告报度年半年 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 -337,179,461.11 81,063,388.90 period 35 司公限有份股心中游旅海东大南海 2015 告报度年半年 III. Company profile Hainan Dadonghai Tourism Center (Holdings) Co., Ltd. (hereinafter referred to as “the Company”), was founded as a standardized LLC on April 26, 1993, reorganized and incorporated on the basis of the former Hainan Sanya Dadonghai Tourism Center Development Ltd. and approved by the Hainan Provincial Stock System Experimentation Leading Team Office with a document of Qiong Gu Ban Zi [1993] No. 11. On May 6, 1996, the Company underwent a restructuring and a corresponding division under the approval of the Hainan Provincial Securities Administration Office with a document of Qiong Zheng Ban [1996] No. 58. On October 8, 1996 and January 28, 1997, the Company, with duly approval, went public by issuing 80 million shares of B stock and 14 million shares of A stock respectively on Shenzhen Security Exchange. On June 20, 2007, the Company experienced a reform of non-tradable shares, through which non-tradable share holders of the Company got circulating right of their shares by paying shares to tradable share holders, and tradable share holders got paid three shares for every ten of their shares. The Company operates business in the industry of tourism and catering services. As of June 30, 2015, the Company’s total capital stock is 364,100,000 shares. The Company’s registered capital is RMB 364.1 million. The legal representative is Li Yuanbin. The registration number of its Business License for Enterprise Legal Person (Duplicate) is 4600001003983. The legal registered residence is Dadonghai, Hedong District, Sanya. Its scope of business includes: accommodation and catering industry (limited to those operated by branches); photography; operation of ornamental plant bonsai, knitwear and textiles, general merchandise, hardware and electrical equipment, chemical products (excluding those require specialized licenses), daily necessities, industrial means of production (excluding those require specialized licenses), metal materials and machinery equipment; commission sale of plane, bus, train and ship tickets (items in require of administrative permission shall be operated under license). (I) The scope of consolidated financial statements The scope of consolidated financial statements including the Company headquarter and South China Grand Hotel with Independent accountability. (II) changes of the scope of consolidated financial statements Scope of the collected financial statement for the year has no changed IV. Basis of preparation for financial statements 1. Basis of preparation Based on going concern, according to actually occurred transactions and events, the Company prepares its financial statements in accordance with the Accounting Standards for Business Enterprises – Basic Standards and 36 司公限有份股心中游旅海东大南海 2015 告报度年半年 concrete accounting standards, Accounting Standards for Business Enterprises – Application Guidelines, Accounting Standards for Business Enterprises – Interpretations and other relevant provisions (collectively known as “Accounting Standards for Business Enterprises”), as well as the disclosure requirements of Regulation on the Preparation of Information Disclosure of Companies Issuing Public Shares No.15 - General Requirements for Financial Reports (as revised in 2014) by the China Securities Regulatory Commission. 2 Going concern The Company is currently operating normal, net cash flows from operating activities is positive, the Company is expected to continue operate as going concern in the next twelve months. V. Principal accounting policies and estimates Tips of accounting policies and estimates: Nil 1. Statement on compliance with Accounting Standards for Business Enterprises The financial statements prepared by the Company meet the requirements of the Accounting Standards for Business Enterprises and truly and completely reflect the Company’s financial position as at December 31, 2014, and its operating results, cash flows and other related information for the year then ended. 2. Accounting period The accounting year is from January 1 to December 31 in calendar year. 3. Operating cycle The operating cycle of the Company is twelve months. 4. Functional currency RMB is adopted as the functional currency. 5. Accounting treatment for business combinations under the same control and those not under the same control Nil 6. Methods for preparation of consolidated financial statements Nil 7. Accounting treatment for joint venture and joint operation Nil 37 司公限有份股心中游旅海东大南海 2015 告报度年半年 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. 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 business and foreign currency transactions Foreign currency transactions are converted into RMB for recording purpose at the spot exchange rate on the date when the transaction occurs. Balances of foreign currency monetary items are measured at the spot exchange rate on the balance sheet date. The exchange difference arising there from shall be included in the current profit and loss, except that those exchange differences arising from the special borrowings of foreign currency related to the acquired and constructed assets qualified for capitalization shall be dealt with according to the principle of borrowing cost capitalization. Foreign currency non-monetary items measured at historical costs shall still be converted at the spot exchange rates on the date when the transactions occur, and the amount in functional currency shall remain unchanged. Foreign currency non-monetary items measured at fair value shall be translated at the spot exchange rates on the date when the fair value is determined. The exchange difference arising there from shall be included in the current profit and loss or capital reserves. 10. Financial instruments Financial instruments include financial assets, financial liabilities and equity instruments. 1. Classification of financial instruments Financial assets and liabilities are classified into the following categories according to the purpose of acquisition: financial assets or financial liabilities measured at fair value and whose variation is included in the 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, accounts receivables, available-for-sale financial assets and other financial liabilities, etc. 2. Recognition basis and measurement method of financial instruments (1) Financial assets (financial liabilities) measured at fair value and whose variation is included in the current profit and loss Financial assets (financial liabilities) are initially recorded at fair values when acquired (deducting cash dividends that have been declared but not distributed and bond interests that have matured but not been drawn). Relevant transaction expenses are included in the 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. 38 司公限有份股心中游旅海东大南海 2015 告报度年半年 Difference between the fair value and initial book-entry value is recognized as investment income upon disposal; meanwhile, adjustment is made to gains or losses from changes in fair values. (2) Held-to-maturity investments Held-to-maturity investments are initially recorded at fair values plus the related trade expenses when acquired (deducting bond interests that have matured but not been drawn). The interest revenue calculated at amortization cost and effective interest rate (nominal interest rate is adopted when the difference between the actual interest rate and the nominal interest rate is minor) during the holding period is recognized as investment income. Effective interest is recognized when obtained, and remains unchanged in the predictable holding period or applicable shorter period. The difference between the amount received and the book value of the investment is included in the investment profit and loss upon disposal. (3) Accounts receivable 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 and prepayments, etc., the initial recognition amount shall be the contract price or agreement price receivable from purchasing party. Accounts receivable with financing nature are initially recognized at their present values. The difference between the amount received and the book value of the accounts receivable is included in the current profit and loss upon recovery or disposal. (4) Available-for-sale financial assets Available-for-sale financial assets are initially recorded at fair values plus the related trade expenses when acquired (deducting cash dividends that have been declared but not been paid or bond interests that have matured but not been drawn). The interests or cash dividends to be received during the holding period are recognized as investment income. It is measured in fair value at the end of the period and change in fair values is included in other comprehensive income at the end of the period. However, the equity instrument investments unquoted in an active market and whose fair value cannot be measured reliably, and the derivative financial assets which are connected with the said equity instrument and must be settled by delivering the said equity instrument shall be measured on the costs basis. The difference between the amount received and the book value of the financial asset is included in the investment profit and loss upon disposal. Meanwhile, the corresponding part of fair value accumulated change accounted as other comprehensive income is transferred into investment profit or loss. (5) Other financial liabilities 39 司公限有份股心中游旅海东大南海 2015 告报度年半年 Other financial liabilities are initially recognized at the sum of fair value and transaction expenses and subsequently measured at amortized costs. 3. Recognition basis and measurement method of transfer of financial assets When transfer of financial assets occurs, if nearly all of the risks and rewards of ownership of the financial assets have been transferred to the transferee, the Company derecognizes the financial assets; if nearly all of the risks and rewards of ownership of the financial assets are retained, the Company shall not derecognize the financial assets. The principle of substance over form is adopted to determine whether the transfer of a financial asset satisfies the criteria as described above for derecognition of a financial asset. The Company shall classify the transfer of a financial asset into the entire transfer and the partial transfer of financial asset. If the entire transfer of financial asset satisfies the criteria for derecognition, 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 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 derecognition, 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 derecognized part; (2) The sum of the consideration for the derecognized part and the portion of derecognition 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 derecognition criteria, the financial assets shall continue to be recognized, and the consideration received will be recognized as a financial liability. 4. Derecognition criteria of financial liabilities A financial liability shall be totally or partly derecognized if its present obligations are totally or partly dissolved. Where the Company enters into an agreement with a creditor so as to substitute the existing financial liabilities with any new financial liability, and the new financial liability is substantially different from the contractual stipulations regarding the existing financial liability, it shall derecognize the existing financial liability, and shall at the same time recognize a new financial liability. Where substantial revisions are made to some or all of the contractual stipulations of the existing financial liability, the Company shall derecognize the existing financial liability totally or partly, and at the same time recognize the financial liability with revised contractual stipulations as a new financial liability. 40 司公限有份股心中游旅海东大南海 2015 告报度年半年 Upon total or partial derecognition of financial liabilities, the difference between the book value of the financial liabilities derecognized and the consideration paid (including non-cash assets surrendered or new financial liabilities assumed) shall be included in the current profit and loss. Where the Company redeems part of its financial liabilities, it shall, on the redemption date, allocate the entire book value of whole financial liabilities according to the comparative fair value of the part that continues to be recognized and the de-recognized part. The difference between the book value allocated to the derecognized part and the considerations paid (including non-cash assets surrendered and the new financial liabilities assumed) shall be included in the current profit and loss. 5. Method of determining the fair value of financial assets and financial liabilities For financial instruments with active market, their fair values are determined with quoted market price. For financial instruments without active market, their fair values are determined by using valuation technique. During the valuation, the company use valuation techniques that are appropriate in the circumstances and for which sufficient data and other information are available to measure fair value, select inputs that are consistent with the characteristics of the asset or liability that market participants would take into account in a transaction for the asset or liability, and give priority to the use of relevant ovservable inputs. Unobservable inputs are only adopted when relevant observable inputs cannot be obtained or are impracticable to obtain. 6. Providing of impairment provision on financial assets (exclude receivable accounts) The Company performs inspection on the book value of financial assets apart from those financial assets measured at fair value through current profit and loss on the balance sheet date. Impairment provision is required if objective evidences of impairment occurs to the financial assets. (1) Impairment provision of available-for-sale financial assets: If there is a serious decline in fair value of the available-for-sale financial assets at the end of the period, or such decline is not temporary after considering various factors, the impairment shall be confirmed, the accumulated losses due to decreases in fair value previously included in owner’s equity shall be reversed, and the impairment loss shall be recognized. If, in a subsequent period, the carrying amount of available-for-sale debt instruments investments increases and the increase can be related objectively to an event occurring after the impairment was recognized, the previously recognized impairment losses are reversed, included in current profit or loss. The impairment losses of available-for-sale equity instruments cannot be reversed through profit or loss. (2) Impairment provision of held-to-maturity investment: Measurement of held-to-maturity investment impairment loss is governed by measurement of account receivables impairment loss. 41 司公限有份股心中游旅海东大南海 2015 告报度年半年 11. Accounts receivable (1) Provision for bad debts of account receivables that are individually significant Assessment basis or standard of amount Top five accounts receivable and other receivables in terms of individual amount at the individually significant end of the year. After separate impairment test, provision for bad debts shall be made at the difference of present value of estimated future cash flows in short of their book values, and shall be Method of provision for bad debts of include in current profit and loss. For accounts receivable with no impairment found accounts receivable that are individually after separate tests, they shall be included in corresponding portfolios for provisions for significant bad debts. For accounts receivable with confirmed impairment losses after separate tests, they shall not be included in portfolios of accounts receivable with similar credit risk features for impairment tests. (2) Provision for bad debts of accounts receivable made on the basis of portfolio Portfolio Provision for bad debts Aging portfolio Aging analysis method Proportions of provision for bad debts on the basis of aging analysis in portfolios: √Applicable □Not applicable Proportion of provision for account Proportion of provision for other Aging receivable receivables Within 1 year (including 1 year) 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% More than five years 100.00% 100.00% In portfolio, adopting balance percentage method for bad debt provision □ Applicable √ Not applicable In portfolio, adopting other method for bad debt provision □ Applicable √ Not applicable (3) Accounts receivable that are individually insignificant but with bad debt provision provided on an individual basis Reason for bad debt For account receivable with an individual balance lower than the top five at the end of the year and provision provided on an with objective evidence showing it may be impaired, and for uncollectible accounts receivable individual basis arising from repeal and liquidation of debtor after taking legal clearance procedures, their provision 42 司公限有份股心中游旅海东大南海 2015 告报度年半年 for bad debts shall be provided on an individual basis. For accounts receivable with objective evidence showing they may be impaired, they shall be Method of provision for bad separate from relevant portfolios and separately tested for impairment to recognize the impairment debt losses. 12. Inventories 1. Classification of inventories Inventories are classified into raw materials, stock commodities, low-cost consumables, food materials, fuels, etc. 2. Measurement method of dispatched inventories Stock commodities are measured at selling price and their purchase and sale price differential are amortized over every month at the method of comprehensive differential. The purchasing and storage of stock materials are measured at actual cost, and at the first-in-first-out method when fetched for use. Low-cost consumables are amortized in full when fetched for use. 3. Determination basis of net realizable values of inventories and provision method of inventory depreciation reserve 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. In normal operation process, for merchandise inventories for direct sale, including stock commodities and materials for sale, their net realizable values are determined at the estimated selling prices minus the estimated selling expenses and relevant taxes and surcharges; for inventories held to execute sales contract or service contract, their net realizable values are calculated on the basis of contract price. If the quantities of inventories specified in sales contracts are less than the quantities held by the Company, the net realizable value of the excess portion of inventories shall be based on general selling prices. At the end of the period, provisions for inventory depreciation reserve are made on an individual basis. For inventories with large quantity and low unit price, 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 shall be made on a portfolio basis. If any factor rendering write-downs of the inventories has been eliminated, the amounts written down are recovered and reversed from the inventory depreciation reserve, which has been provided for. The reversed amounts are included into the current profit and loss. 4. Inventory system Perpetual inventory system is adopted. 5. Amortization method of low-cost consumables and packaging materials 43 司公限有份股心中游旅海东大南海 2015 告报度年半年 (1) Low-cost consumables are amortized at lump-sum method; (2) Packaging materials are amortized at lump-sum method. 13. Divided into assets held for sale 14. Long-term equity investments 1. Determination basis of joint control or significant influence over the investee Joint control is the relevant agreed sharing of control over an arrangement, and the arranged relevant activity must be decided under unanimous consent of the parties sharing control. When the company and other joint parties do joint control and have rights to the net assets over an investee, the investee shall be the company’s joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those polices. When an investing enterprise is able to have significant influences on an investee, the investee shall be its associate. 2. Determination of initial investment cost (1) Long-term equity investments acquired from business combinations For business combination under common control: if the company makes payment in cash, transfer non-cash assets or bear debts and issues equity securities as the consideration for the business combination, the book value of the owners’ equity of the combinee obtained is recognized as the initial cost of the long-term equity investment on the combination date. The difference between the initial investment cost and the carrying amount of cash paid, non-cash assets transferred, liabilities assumed and par value of share issued shall be adjusted to the stock premium in the capital reserved; if there is no sufficient premium in the capital reserve for write-downs, the retained earnings are adjusted. When exercising control over an investee under common control due to additional investment or other reasons, the initial investment cost of the long-term equity investment shall be determined by the absorbing party’s share of the net assets of the party being absorbed in the consolidated financial statements of the ultimate controlling party at combination date. The difference between the initial investment cost of the long-term equity investment at combination date and the sum of the total of the carrying amount of equity investment held by the acquirer before the combination date and the newly increased investment on the combination date shall be adjusted to share premium. If the balance of share premium is not sufficient, any excess shall be adjusted to retained earnings. For business combination not under common control, the Company recognizes the combination cost determined on the combination date as the initial cost of long-term equity investment. When exercising control over an investee not under common control due to additional investment or other reasons, in stand-alone financial statements, the investor shall change to the cost method and use the carrying amount of 44 司公限有份股心中游旅海东大南海 2015 告报度年半年 the previously-held equity investment, together with the additional investment cost, as the initial investment cost under the cost method. The audit, legal, valuation and consulting fees, other intermediary fees, and related administrative fees paid by the absorbing party or acquirer for the business combination, shall be recognized in profit or loss as incurred; the cost of issuing equity securities or debt securities as the combination consideration shall be included in the initial cost of the equity securities or debt securities. (2) Long-term equity investments acquired 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 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 together with relevant taxes 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 relevant taxes 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 measurement and recognition of profit or loss (1) Long-term equity investment adopting cost method Long-term equity investments of the Company in its subsidiaries are accounted for at 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 proportion it shall enjoy in the cash dividends or profits declared by the investee as current investment income. (2) Long-term equity investment adopting equity method A long-term equity investment in an associate or a joint venture shall be accounted for using the equity method. If the cost of initial investment is in excess of the proportion of the fair value of the net identifiable assets in the investee when the investment is made, the difference will not be adjusted to the initial cost of long-term equity investment; if the cost of initial investment is in short of the proportion of the fair value of the net identifiable assets in the investee when the investment is made, the difference will be included in the current profit and loss. The Company recognizes the share of the investee’s net profits or losses, as well as its share of the investee’s other 45 司公限有份股心中游旅海东大南海 2015 告报度年半年 comprehensive income, as investment income or losses and other comprehensive income, and adjusts the carrying amount of the investment accordingly. The carrying amount of the investment shall be reduced by the portion of any profit distributions or cash dividends declared by the investee that is attributable to the investor. The investor’s share of the investee’s owners’ equity changes, other than those arising from the investee’s net profit or loss, other comprehensive income or profit distribution, would be recognized in the investor’s equity, and the carrying amount of the long-term equity investment shall be adjusted accordingly. The Company recognizes its share of the investee’s net profits or losses after making appropriate adjustments based on the fair values of the investee’s identifiable net assets at the acquisition date according to the Company’s accounting policies and accounting period. When holding the investment, if the investee is capable of providing consolidated financial statements, the profit or loss shall be measured based on the net profit, other comprehensive income and other changes in owners’ equity attributed to the company recorded in the consolidated financial statements. The unrealized profits or losses resulting from transactions between the company and its associate or joint venture are eliminated in proportion to the company’s equity interest in the investee, based on which investment income or losses shall be recognized. Any losses resulting from transactions between the investor and the investee, which are attributable to asset impairment shall be recognized in full. The transactions of investing or selling assets between the company and its associate or joint venture are accounted for under relevant accounting policies when the asset constitutes a business. When the Company confirms that it should share losses of the investee, treatment shall be done in following sequence: firstly, the book value of the long-term equity investment shall be reduced; secondly, where the book value is insufficient to cover the share of losses, investment losses are recognized to the extent of book value of long-term equity which form net investment in the investee in substance and the book value of long-term equity shall be reduced; finally, after all the above treatments, if the Company is still responsible for any additional liabilities in accordance with the provisions stipulated in the investment contracts or agreements, estimated liabilities are recognized and included into current investment loss according to the obligations estimated to undertake. If the investee achieves profit in subsequent periods, the treatment is in the reversed sequence described above, i.e. after deduct any unrecognized investment losses, reduce book value of estimated liabilities recognized, restore book values of other long-term equity which form net investment in the investee in substance, and of long-term equity investment, and recognize investment income at the same time. (3) Disposal of long-term equity investment On disposal of a long-term equity investment, the difference between the proceeds actually received and the carrying amount shall be recognized in profit or loss for the current period. For a long-term equity investment accounted for using the equity method, any other comprehensive income 46 司公限有份股心中游旅海东大南海 2015 告报度年半年 previously recognized shall be accounted for on the same basis as would have been required if the investee had directly disposed of the related assets or liabilities on a por-rata basis upon the disposal of the equity investment. The owners’ equity recognized due to the investor’s share of the investee’s owners’ equity changes, other than those arising from the investee’s net profit or loss, other comprehensive income or profit distribution, is included in current profit or loss on a pro-rata basis. When the Company can no longer exercise joint control of or significant influence over an investee due to partial disposal of equity investment or other reasons, the remaining equity investment shall be accounted for in accordance with “Accounting Standard for Business Enterprises No.22-Financial Instruments: Recognition and Measurement”. The difference between the fair value and the carrying amount at the date of the loss of joint control or significant influence shall be charged to profit or loss for the current period. When the previously-held equity investment is accounted for under the equity method, any other comprehensive income previously recognized shall be accounted for on the same basis as would have been required if the investee had directly disposed of the related assets or liabilities for the current period upon dis-countinuation of the equity method. The owners’ equity recognized due to the investor’s share of the investee’s owners’ equity changes, other than those arising from the investee’s net profit or loss, other comprehensive income or profit distribution, is transferred to current profit or loss upon discontinuation of the equity method. When no longer exercise control over an investee due to partial disposal of equity investment or other reasons, and with the retained interest, still has joint control of, or significant influence over, the investee, when preparing the individual financial statements, the Company shall change to the equity method and adjust the remaining equity investment as if the equity method had been applied from the date of the first acquisition. If the Company can not exercise joint control of or significant influence over the investee after partial disposal of equity investment, the remaining equity investment shall be accounted for in accordance with “Accounting Standard for Business Enterprises No.22-Financial Instruments: Recognition and Measurement”, and the difference between the fair value and carrying amount at the date of the loss of control shall be chared to profit or loss for the current period. The equity investment disposed was obtained over additional investment or other reasons through business combination, when preparing the individual financial statements, and the remaining equity investment accounted on cost method or equity method, the other comprehensive income and other owner’s equity recognized due to the equity investment held before acquisition date was accounted for under the equity method are carried forward on a pro-rata basis; when the remaining equity investment is accounted for in accordance with “Accounting Standard for Business Enterprises No. 22 – Financial Instruments: Recognition and Measurement”, the other comprehensive income and other owner’s equity are totally carried forward. 47 司公限有份股心中游旅海东大南海 2015 告报度年半年 15. Investment real estate Measurement model of investment real estate Not applicable 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 will only be recognized when all the following criteria are satisfied: (1) it is probable that the economic benefits relating to the fixed assets will flow into the Company; (2)the costs of the fixed assets can be measured reliably. Classification of fixed assets: Fixed assets are classified into buildings and constructions, machinery equipment, transportation equipment, electronic entertainment equipment, other equipment and Improvement. Fixed assets are initially measured at their actual cost when acquired. The costs of a purchased fixed asset are determined at the purchase price, the relevant taxes, and the traffic expenses, loading and unloading fees, installation fees and professional service fees arising from preparing the fixed asset for its intended use. If the payment for a fixed asset is delayed beyond the normal credit conditions and it is of financing nature in effect, the costs of the fixed asset shall be determined based on the present value of the purchase price. The cost of a self-constructed fixed asset shall be formed by the necessary expenses incurred for preparing the asset for its intended use. The fixed assets which the debtor uses to pay back the debt in debt restructuring should be recognized at the fair value of the fixed assets. The difference between the book value of restructured debts and the fair value of fixed assets used to pay back the debt should be recorded into current profit and loss; On the premise that non-monetary asset trade is of commercial nature and the fair value of the asset traded in or out can be measured reliably, the fixed asset traded in with non-monetary asset should be recognized at the fair value of the asset traded out, unless any unambiguous evidence indicates that the fair value of the asset traded in is more reliable; as to the non-monetary asset trade not meeting the aforesaid premise, the book value of the asset traded out and related taxes and surcharges payable should be recognized as the cost of the fixed asset, with gains or losses not recognized. As for the book-entry value, the fixed assets acquired from the absorption and merger of an enterprise under common control are recognized at the book value of the merged enterprise; the fixed assets acquired from the absorption and merger of an enterprise not under common control are recognized at the fair value. (2) Method of provision for impairment of fixed assets Category Depreciated Depreciable life Residuals rate Annual depreciation 48 司公限有份股心中游旅海东大南海 2015 告报度年半年 rate(%) Buildings and straight-line-method 20-40 5% 4.75%-2.37% constructions Machinery equipment straight-line-method 8-20 5% 11.87%-4.75% Electronic 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% Improvement straight-line-method 5 5% 19% (3) Recognition basis, pricing and depreciation method for fixed assets under financing lease The book-entry value of a fixed asset acquired under financing lease is measured at the asset’s fair value on the commencement date of the lease or the present value of the minimum lease payment, whichever is lower. 17. Construction in progress The initial book values of the fixed assets are stated at total expenditures incurred before construction in progress reaches the 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. And 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. Criteria for recognition of capitalized borrowing costs Borrowing costs refers to the interests incurred on borrowings borrowing interests, amortization of discounts or premiums, ancillary costs and exchange differences arising from foreign currency borrowings, etc. For borrowing costs incurred by the Group that are directly attributable to the acquisition, construction or production of assets qualified for capitalization, the costs will be capitalized and included in the costs of the related assets. Other borrowing costs shall be recognized as expense in the period in which they are incurred and included in profit or loss for the current period. Qualifying assets are assets (fixed assets, investment property, inventories, etc.) that necessarily takes a substantial period of time for acquisition, construction or production to get ready for their intended use or sale. 49 司公限有份股心中游旅海东大南海 2015 告报度年半年 Capitalization of borrowing costs begins when the following three conditions are fully satisfied: (1) Expenditures for the assets (including cash paid, transferred non-currency assets or holding debt liability for the acquisition, construction or production of assets qualified for capitalization) have been incurred; (2) Borrowing costs have been incurred; (3) Acquisition, construction or production that is necessary to enable the asset reach its intended usable or saleable condition have commenced. 2. Capitalization period of borrowing costs The capitalization period shall refer to the period between the commencement and the cessation of capitalization of borrowing costs, excluding the period in which capitalization of borrowing costs is temporarily suspended. Capitalization of borrowing costs shall be suspended during periods in which the qualifying asset under acquisition and construction or production ready for the intended use or sale. If part of an asset being acquired, constructed or produced has been completed respectively and put into use individually, capitalization of such part of borrowing costs should be suspended. If different parts of the assets acquired, constructed or produced are completed separately, but such asset will not be ready for the intended use or sale until all parts have been completed, then the borrowing costs will be capitalized until the completion of all parts of the said asset. 3. Suspension of capitalization period Capitalization of borrowing costs shall be suspended during periods in which the acquisition, construction or production of a qualifying asset is interrupted abnormally, when the interruption is for a continuous period of more than 3 months; if the interruption is a necessary step for making the qualifying asset under acquisition and construction or production ready for the intended use or sale, the capitalization of the borrowing costs shall continue. The borrowing costs incurred during such period shall be recognized as profits and losses of the current period, until the acquisition and construction or production of the asset resumes. 4. Calculation of capitalization of borrowing costs In respect of special borrowings borrowed in for acquisition and production of assets qualified for capitalization, the capitalization of borrowing costs shall be determined with the borrowing costs actually occurred in respect of the special borrowings during the current period less the interest income derived from the un-applied borrowing funds as bank savings or the investment income arising from temporary investment with such borrowing funds. In respect of general borrowings occupied for acquisition and production of assets qualified for capitalization, the 50 司公限有份股心中游旅海东大南海 2015 告报度年半年 to-be-capitalized amount of interests on the general borrowing shall be calculated and determined by multiplying the weighted average asset disbursement (based on the average for each month end) of the part of the accumulative asset disbursements minus the specifically borrowed loans by the capitalization rate of the general borrowing used. The capitalization rate shall be calculated and determined according to the weighted average interest rate of the general borrowing. Where there is any discount or premium for the borrowings, the amount of discounts or premiums that shall be amortized during each accounting period shall be determined based on the effective interest method and an adjustment shall be made to the amount of interests in each period. 19. Biological assets 20. Oil-and-gas assets 21. Intangible assets (1) Measurement, service life and impairment test 1. Measurement method of intangible assets (1) The Company initially measures intangible assets at cost on acquisition; The cost of an externally acquired intangible asset comprises its purchase price, related taxes and surcharges and any other directly attributable expenditure of preparing the asset for its intended use. If the deferred payment of purchase price of intangible assets exceeding normal credit terms is substantially of financial nature, the cost of intangible assets should be recognized at the present value of the purchase price. The intangible assets which the debtor uses to pay back the debt in debt restructuring should be recognized at the fair value of the intangible assets. The difference between the book value of restructured debts and the fair value of intangible assets used to pay back the debt should be recorded into the current profit and 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 by the trade of 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 payable should be recognized as the cost of the intangible assets traded in, with gains or losses not recognized. The intangible assets obtained by the absorption and merger of an enterprise under common control are recognized at the book value of the merged enterprise; the intangible assets obtained by the absorption and merger of an enterprise not under common control are recognized at the fair value. 51 司公限有份股心中游旅海东大南海 2015 告报度年半年 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 of capitalization, and other direct expenses for preparing the intangible assets for their intended use. (2) Subsequent measurement The useful life of intangible asset is analyzed on acquisition. As for intangible assets with limited useful lives, straight-line amortization method is adopted in the period when the intangible assets generate economic benefit for enterprise; if the period when the intangible assets generate economic benefit for enterprise cannot be forecasted, the intangible assets should be deemed as those with indefinite useful lives and should not be amortized. 2. Estimation of useful life of intangible assets with limited useful life Item Estimated useful life Basis Land use right 50 years Validity term of land use certificate The useful lives and amortization method of intangible assets with limited useful lives 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 are not different from those estimated before. 3. Determination basis of 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 for internal research and development spending 22. Impairment of long-term assets If there is any indication that the long-term assets such as long-term equity investment, investment properties accounted through cost pattern, fixed assets, construction in progress, intangible assets etc. may be impaired at the balance sheet date, an impairment test would be implemented. If the result of impairment test indicates the recoverable amounts of the long-term assets are lower than their book values, the difference between the recoverable amounts and book values is recognized as impairment loss, provisions for impairment of the long-term assets are made. The recoverable amounts of the long-term assets are the higher of their fair values less costs to disposal and the present values of the estimated future cash flows of the long-term assets. The provision for impairment is recognized and calculated on the individual basis. If it is difficult to estimate the recoverable amount of the individual asset, the Company estimates the recoverable amount of the asset group that the individual asset belongs to. The asset group is the minimum asset group which can generate cash flows independently. 52 司公限有份股心中游旅海东大南海 2015 告报度年半年 The mentioned impairment loss will not be reversed in subsequent accounting period once it had been recognized. 23. Long-term deferred expenses Long-term deferred expenses are various expenses already incurred, which shall be amortized over current and subsequent periods with the amortization period exceeding one year. 1. Amortization method Long-term deferred expenses are evenly amortized over the beneficial period. 2. Amortization period Item Amortization period Hotel exterior wall decoration 4 years 24. Employee compensation (1) Short-term employee benefits The Company recognizes, in the accounting period in which an employee provides service, actually occurred short-term employee benefits as a liability, with a corresponding charge to current profit or loss or relevant cost of assets. Payments made by the Company of social security contributions for employees, and union running costs and employee education costs provided in accordance with relevant requirements, in the accounting period in which employees provide services, is calculated according to prescribed bases and percentages of provision in determining the amount of employee benefits. Employee benefits which are non-monetary benefits are measured at fair value. (2) Post-employment benefits Payments made by the Company of basic endowment insurance and unemployment insurance in accordance with relevant requirements of local government, in the accounting period in which employees provide services, is calculated according to prescribed bases and percentages of provision of local requirements in determining the amount payable, is recognized as a liability, with a corresponding charge to current profit or loss or relevant cost of assets. (3) Termination benefits When the Company cannot unilaterally withdraw the offer of termination benefits because of an employment termination plan or a curtailment proposal, or when the Company recognizes costs or expenses related to a 53 司公限有份股心中游旅海东大南海 2015 告报度年半年 restructuring that involves the payment of termination benefits (the earlier is adopted), the employee benefits liabilities caused by termination benefits are recognized and included in current profit or loss. (4) Accounting method for other long-term employee benefits Nil 25. Estimated liabilities When the Company is involved in proceedings, debt guarantees, onerous contracts and reorganization events, if such events may require delivery of assets or rendering of services in the future and the amounts of such events can be reliably measured, estimated liabilities are recognized. 1. Recognition criteria of estimated liabilities The Company recognizes the estimated liabilities when obligations related to contingencies satisfy all the following conditions: (1) The obligation is a present obligation of the Company; (2) The performance of the obligation is likely to result in outflow of economic benefits from the Company; and (3) The amount of the 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. The Company, when determining the best estimate, has had 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 estimate shall be determined after discounting the relevant future outflow of cash. The best estimate shall be accounted 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 estimate shall 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, the outcomes within this range are unequally likely to occur, 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 an estimated liability of the Company is expected 54 司公限有份股心中游旅海东大南海 2015 告报度年半年 to be compensated by a third party, the compensation should be separately recognized as an asset only when it is virtually certain that the compensation will be received. The amount recognized for the compensation should not exceed the book value of the estimated liability. 26. Share-based payment 27. Other financial instrument as preferred stock and perpetual capital securities 28. Revenue 1. Recognition and measurement principles of revenue from sales of goods (1) Overall recognition and measurement principles of revenue from sales of goods When the Company has transferred significant risks and rewards of ownership of the goods to the buyer; 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 revenue can be measured reliably; it is highly likely that the economic benefits associated with the transaction will flow into the enterprise; and the relevant amount of cost incurred or to be incurred can be measured reliably, revenue from sales of goods shall be recognized. (2) Recognition criteria of revenue from selling goods and specific recognition timing criteria of revenue of the Company The Company provides hotel accommodation service as well as goods. After the recognition of both housekeeping department and hotel reception desk, the daily business report is established. The accounting department makes sure the significant risks and rewards of ownership of the goods have been transferred to the client, the selling revenue is recognized. 2. Recognition and measurement principles of revenue from providing labor services (1) The hotel room service, catering (breakfast) service etc. of the Company, after the hotel room service, catering (breakfast) service etc. had provided, and each consumption department had checked with the receptionist, the daily business report and detailed report of account receivables are established, and the reports are submitted to accounting department, which recognizes the revenue after examining the daily reports. (2) Revenue from outsourced restaurant and site rental is recognized according to contract or agreement time period and time of collecting. 3. Recognition basis of revenue from transferring the use right of assets The economic benefits related to the transaction may flow into entities and the amount of revenue can be reliably measured. The amount of revenue from transferring use right of assets is recognized as follows in different circumstances: (1) The amount of interest income is determined by the time and effective interest rate for others to use the 55 司公限有份股心中游旅海东大南海 2015 告报度年半年 monetary funds of the Company. (2) The amount of revenue from usage is determined according to the charging time and method as agreed in relevant contract or agreement. 29. Government subsidies (1) Recognition basis and accounting treatment for government subsidies related to assets Government subsidies related to acquisition and construction of fixed assets, intangible assets and other long-term assets are recognized as deferred income, and included in non-operating income by stages within the useful life of the assets acquired and constructed (2) Recognition basis and accounting treatment for government subsidies related to income If government subsidies related to income are used to compensate the enterprise’s relevant expenses or losses in future periods, such government subsidies should be recognized as deferred income on acquisition and be included into the current non-operating income in the period of recognizing relevant expenses; if government subsidies related to income are used to compensate the enterprise’s relevant expenses or losses incurred, such government subsidies are directly included into the current non-operating income on acquisition. 30. Deferred income tax assets and deferred income tax liabilities Deductible temporary differences are recognized as deferred income tax assets to the extent that it shall not exceed future taxable income possibly available to be against the deductible temporary difference. Deductible temporary differences are recognized as deferred income tax liabilities except in special circumstances. Special circumstances in which deferred income tax assets or deferred income tax liabilities shall not be recognized include: the initial recognition of goodwill; other transactions or matters excluding business combinations, which affect neither accounting profits nor the taxable income (or deductible losses) when occurred. If the Company has the legal right of netting and intends to settle in net amount or to obtain assets and discharge liabilities simultaneously, the income tax assets and income tax liabilities of the Company for the current period shall be presented based on the net amount after offset. When the Company has the legal rights to balance income tax assets and income tax liabilities in current period with net settlement, and deferred income tax assets and deferred income tax liabilities are related to the income tax which imposed on the same taxpaying subject by the same tax collection authority or to different tax paying subjects, but, in each important future period in connection with the reverse of deferred income tax assets and liabilities, the involved tax paying subject intends to balance income tax assets and liabilities in current period with net settlement at the time of obtaining assets and discharging liabilities, deferred income tax assets and 56 司公限有份股心中游旅海东大南海 2015 告报度年半年 deferred income tax liabilities of the Company shall be presented based on the net amount after offset. 31. Leasing (1) Accounting of operating lease 1. Accounting of leased assets Lease fees paid by the Company for leased asset shall be amortized at straight-line method over the whole lease period (including rent-free period) and shall be included in the current expenses. Initial direct costs related to lease transactions paid by the Company shall be included in the current expenses. If the expense related to the lease which shall be paid by the Company is assumed by the lessor of the asset, such expenses shall be deducted from total lease fees, and residual lease fees shall be amortized over the lease period and included in the current expenses. 2. Accounting of leasing 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 related to lease transactions paid by the Company shall be included in the current expenses; if the amount is large, it shall be capitalized, and shall be included in the current income by stages within the whole lease period on same basis for recognition of lease income. If the expenses related to the lease which shall be paid by the lessee are borne by the Company, such expenses shall be deducted from total lease income by the Company, and residual lease fees shall be amortized over the lease period. (2) Accounting treatment of finance lease 32. Other significant accounting policies and estimate 33. Significant accounting policies and changes of accounting estimate (1) Changes of major accounting policies □ Applicable √ Not applicable (2) Changes of major accounting estimate □ Applicable √ Not applicable 57 司公限有份股心中游旅海东大南海 2015 告报度年半年 34. Other VI. Taxation 1. Major tax types and tax rates Taxation type Basis of tax assessment Tax rate Value added tax (VAT) Revenue from sale of goods 3% Business tax Operating income 5% Urban maintenance and construction tax Turnover tax 7% Enterprise income tax Income tax payable 25% Education surcharge Turnover tax 3% Local education surcharge Turnover tax 2% Remaining value after deducting 30% of Property tax the original value of houses (including land 1.2% price) Land use tax Land area RMB 18/m2 As for the taxpaying body with different tax rate for enterprise income tax, disclosed explanations: Nil 2. Tax preference Nil 3. Other Nil VII. Notes to the main items of financial statements 1. Monetary funds In RMB Item Ending balance Opening balance Cash 585,363.82 346,943.61 Bank deposit 22,769,509.13 22,203,345.93 Total 23,354,872.95 22,550,289.54 Other explanation: Nil 58 司公限有份股心中游旅海东大南海 2015 告报度年半年 2. Financial assets measured by fair value and with variations reckoned into current gains/losses Nil 3. Derivative financial assets □ Applicable √ Not applicable 4. Notes receivables Nil 5. Accounts receivable (1) Accounts receivable by type In RMB Ending balance Opening balance Book balance Provision for bad debts Book balance Provision for bad debts Type Proportio Provisio Book value Proport Provisio Book value Amount Amount Amount Amount n ratio n ratio n ion Accounts receivable with large single amount and 1,464,505.49 55.35% 1,464,505.49 100.00% 1,464,505.49 29.36% 1,464,505.49 100.00% accrued for provision of bad debt on a single basis Accounts receivable accrued for 1,181,406.20 44.65% 724,562.66 61.33% 456,843.54 3,523,141.14 70.64% 890,762.12 25.28% 2,632,379.02 provision of bad debt by portfolio Total 2,645,911.69 100.00% 2,189,068.15 456,843.54 4,987,646.63 2,355,267.61 2,632,379.02 Accounts receivable with large single amount and accrued for provision of bad debt on a single basis at period-end: √ Applicable □ Not applicable In RMB Ending balance Accounts receivable (by unit) Accounts receivable Provision for bad debts Provision ratio Reason for provision Sanya Power Supply Expected unrecoverable 773,409.98 773,409.98 100.00% Company due to long account age Hainan Hong Kong & Macao Expected unrecoverable 464,563.21 464,563.21 100.00% International Tourism Ltd. due to long account age Sanya City Council reception 101,652.32 101,652.32 100.00% Expected unrecoverable 59 司公限有份股心中游旅海东大南海 2015 告报度年半年 due to long account age LLC SOUTH CROSS 124,879.98 124,879.98 100.00% Had declared bankruptcy TRAVELINN Total 1,464,505.49 1,464,505.49 -- -- Accounts receivable accrued for provision of bad debt by aging analysis method in portfolio: √ Applicable □ Not applicable In RMB Ending balance Aging Accounts receivable Provision for bad debts Provision ratio Within 1 year Within 1 year (1-year include) 318,986.82 0.00% Subtotal within one year 318,986.82 0.00% 1 - 2 years 25,842.26 1,292.11 5.00% 2 - 3 years 55,782.20 8,367.33 15.00% 3 - 4 years 22,459.00 5,614.75 25.00% 4 - 5 years 98,094.91 49,047.46 50.00% Over 5 years 660,241.01 660,241.01 100.00% Total 1,181,406.20 724,562.66 Portfolio recognized: Accounts receivable accrued for provision of bad debt by percentage of balance in portfolio: □ Applicable √ Not applicable Accounts receivable accrued for provision of bad debt by other methods in portfolio: Nil (2) Provision for bad debts accrued, regain or switch back in the Period In the Period, 0.00Yuan accrued for provision of bad debts; provision for bad debts regains or switch back in the Period amounting to RMB 166,199.46. . Including significant provision for bad debts regains or switch back in the Period: Nil (3) Account receivables actually cancel after verification in Period Nil (4) Top five account receivables collected by arrears party at ending balance Nil 60 司公限有份股心中游旅海东大南海 2015 告报度年半年 (5) Account receivables recognition terminated due to transfer of financial assets Nil (6) Account receivables transferred and assets & liability formed by its continuous involvement Nil 6. Prepayments (1) Aging analysis of repayment In RMB Ending balance Opening balance Aging Amount Proportion (%) Amount Proportion (%) Within 1 year 38,026.00 100.00% 40,778.52 100.00% Total 38,026.00 -- 40,778.52 -- Reasons for significant repayment with over one year age without settle: Nil (2) Top five prepayment collected by objects at ending balance Nil 7. Interest receivables Nil 8. Dividend receivables Nil 9. Other receivables (1) Other receivables by type: In RMB Ending balance Opening balance Book balance Provision for bad debts Book balance Provision for bad debts Type Proportion Provision Book value Proportio Provisio Book value Amount Amount Amount Amount ratio n ratio (%) n (%) Other 77,363,143.31 98.68% 77,363,143.31 100.00% 0.00 77,363,143.31 98.64% 77,363,143.31 100.00% 0.00 61 司公限有份股心中游旅海东大南海 2015 告报度年半年 receivable s with large single amount and accrued for provision of bad debt on a single basis Other receivable s accrued for 1,035,943.53 1.32% 732,023.93 70.66% 303,919.60 1,064,685.19 1.36% 732,023.93 68.75% 332,661.26 provision of bad debt by portfolio Total 78,399,086.84 1,000.00% 78,095,167.24 303,919.60 78,427,828.50 100.00% 78,095,167.24 332,661.26 Other receivables with large single amount and accrued for provision of bad debt on a single basis at period-end: √ Applicable □ Not applicable In RMB Ending balance Other receivables (by unit) Other receivables Provision for bad debts Provision ratio Reason for provision Hainan Dadonghai Hotel Co., 54,767,945.15 54,767,945.15 100.00% Unrecoverable Ltd. Cash dividends distributed in 16,899,000.00 16,899,000.00 100.00% Unrecoverable 1994-1996 Hainan Hong Kong & Macao 4,145,704.16 4,145,704.16 100.00% Unrecoverable International Tourism Ltd. Guangdong Jinma Tourism 1,200,494.00 1,200,494.00 100.00% Unrecoverable Ltd. 62 司公限有份股心中游旅海东大南海 2015 告报度年半年 Shareholder custody fee 350,000.00 350,000.00 100.00% Unrecoverable Total 77,363,143.31 77,363,143.31 -- -- Other receivables accrued for provision of bad debt by aging analysis method in portfolio: √ Applicable □ Not applicable In RMB Ending balance Aging Other receivables Provision for bad debts Provision ratio Within 1 year Within 1 year 280,057.38 0.00% Subtotal within one year 280,057.38 0.00% 1-2 years 21,000.00 1,050.00 5.00% 2-3 years 4,235.61 635.34 15.00% 3-4 years 288.70 72.17 25.00% 4-5 years 190.85 95.43 50.00% More than five years 1,035,943.53 732,023.93 100.00% Portfolio recognized: Nil Other accounts receivable accrued for provision of bad debt by percentage of balance in portfolio: □ Applicable √ Not applicable Other accounts receivable accrued for provision of bad debt by other methods in portfolio: □ Applicable √ Not applicable (2) Provision for bad debts accrued, regain or switch back in the Period Nil (3) Other account receivables actually cancel after verification in Period Nil (4) Other account receivables category by nature of money In RMB Nature of money Ending book balance Beginning book balance Other every receivable and temporary 78,399,086.84 78,427,828.50 payments Total 78,399,086.84 78,427,828.50 63 司公限有份股心中游旅海东大南海 2015 告报度年半年 (5) Top five other account receivables collected by arrears party at ending balance Nil (6) Account receivables with government subsidies involved Nil (7) Other account receivables recognition terminated due to transfer of financial assets Nil (8) Other account receivables transferred and assets & liability formed by its continuous involvement Nil 10. Inventories (1) Classification of inventories In RMB Ending balance Opening balance Item Depreciation Depreciation Book balance Book value Book balance Book value reserve reserve Raw materials 973,477.24 747,043.57 226,433.67 967,441.05 747,043.57 220,397.48 Stock 22,771.38 11,102.41 11,668.97 22,771.38 11,102.41 11,668.97 commodities Food and 38,332.89 38,332.89 56,723.64 56,723.64 beverage Fuels 32,310.72 32,310.72 18,267.20 18,267.20 Total 1,066,892.23 758,145.98 308,746.25 1,065,203.27 758,145.98 307,057.29 (2) Inventory depreciation reserve In RMB Increased in the Period Decreased in the Period Item Opening balance Reversing or Ending balance Accrual Other Other write-off Raw materials 747,043.57 747,043.57 Stock 11,102.41 11,102.41 commodities 64 司公限有份股心中游旅海东大南海 2015 告报度年半年 Total 758,145.98 758,145.98 (3) Explanation on inventories with capitalization of borrowing costs included at ending balance Nil (4) Assets unsettled formed by construction contract which has completed at period-end Nil 11. Divided into assets held for sale Nil 12. Non-current assets maturing within one year In RMB Item Ending balance Opening balance Long-term differed expenses needed to be 49,090.84 196,354.90 amortized within one year Total 49,090.84 196,354.90 Other explanation: Nil 13. Other non-current assets Nil 14. Available-for-sale financial assets (1) Available-for-sale financial assets In RMB Ending balance Opening balance Item Provision for Provision for Book balance Book value Book balance Book value impairment impairment Available-for-sale equity 9,500,000.00 5,000,000.00 4,500,000.00 9,500,000.00 5,000,000.00 4,500,000.00 instrument: Measured at cost 9,500,000.00 5,000,000.00 4,500,000.00 9,500,000.00 5,000,000.00 4,500,000.00 Total 9,500,000.00 5,000,000.00 4,500,000.00 9,500,000.00 5,000,000.00 4,500,000.00 65 司公限有份股心中游旅海东大南海 2015 告报度年半年 (2) Available-for-sale financial assets measured at fair value at period-end Nil (3) Available-for-sale financial assets measured at cost at the end of the period In RMB Book balance Provision for impairment Shareholdin Cash Unit Beginning Increa Decre Ending Beginning Incre Decre Ending g ratio in dividends balance sed ased balance balance ased ased balance investee (%) in 2014 Shenzhen Difu Investment & 5,000,000.00 5,000,000.00 5,000,000.00 5,000,000.00 14.28% 0.00 Development Ltd Sanya Xiangyu 4,500,000.00 4,500,000.00 18.00% 0.00 E-business Ltd. Total 9,500,000.00 9,500,000.00 5,000,000.00 5,000,000.00 -- (4) Changes of impairment of available-for-sale financial assets in Period Available-for-sale equity Available-for-sale debt Type Total instrument instrument Opening balance of 5,000,000.00 5,000,000.00 impairment accrual Accrual in the Period Including: transfer-in from other comprehensive income Decreased in the Period Including: switch-back while fair value goes up after the Period Ending balance of 5,000,000.00 5,000,000.00 impairment accrual (5) Fair value of the available-for-sale equity instrument drops significantly or not contemporarily without depreciation reserves accrued Nil 66 司公限有份股心中游旅海东大南海 2015 告报度年半年 15. Held-to-maturity investment Nil 16. Long-term account receivables Nil 17. Long-term equity investments In RMB Changes in the Period Investme Addi nt Adjustme Cash Impairment tiona Capit gains/loss nt of Provision Opening Other dividend Ot Ending provision at Investee l al es other for balance equity or profit he balance ending inves reduc recognize comprehe impairme changes declare to r balance tmen tion d by nsive nt losses issue t equity income method I. Joint venture Hubei Jingsha Dadonghai Club 4,566,207.42 4,566,207.42 4,566,207.42 Ltd. Sanya Shun’an 5,150,166.84 5,150,166.84 5,150,166.84 Casino Subtotal 9,716,374.26 9,716,374.26 9,716,374.26 II. Associated enterprise Total 9,716,374.26 9,716,374.26 9,716,374.26 Other explanation: Nil 18. Investment real estate Nil 19. Fixed assets (1) Fixed assets In RMB Item Buildings and Constructions Total 67 司公限有份股心中游旅海东大南海 2015 告报度年半年 I. Original book value 1.Opening balance 155,421,287.59 186,646,178.12 2.Increased in the Period 26,327.00 (1) Purchase 26,327.00 (2)Transferred from construction in progress (3) Increased due to enterprise merger 3.Decreased in the Period 13,440.00 (1) Disposal or scrap 13,440.00 4.Ending balance 155,421,287.59 186,659,065.12 II. Accumulated depreciation 1.Opening balance 72,118,907.64 95,910,171.41 2.Increased in the Period 1,686,146.04 2,202,553.28 (1) Withdraw 1,686,146.04 2,202,553.28 3.Decreased in the Period 11,364.40 (1) Disposal or scrap 11,364.40 4.Ending balance 73,805,053.68 98,101,360.29 III. Depreciation reserves 1.Opening balance 31,685,159.76 34,434,646.64 2.Increased in the Period (1) Withdraw 3.Decreased in the Period (1) Disposal or scrap 4.Ending balance 31,685,159.76 34,434,646.64 IV. Book value 1. Ending book value 49,931,074.15 54,123,058.19 2 Beginning book value 51,617,220.19 56,301,360.07 68 司公限有份股心中游旅海东大南海 2015 告报度年半年 (2) Fixed assets temporarily idled In RMB Accumulated Provision for Item Original book value Book value Remark depreciation impairment 24 inches Shanrui cup 153,919.64 5,433.83 140,788.83 7,696.98 Furniture cleaning 20,322.04 5,434.94 13,871.00 1,016.10 machine Four heads coffee 7,758.14 2,070.23 5,300.00 387.91 machine Thermal cabinet 26,202.02 6,917.92 17,974.00 1,310.10 Milk shaker 9,221.94 184.00 9,037.94 VIP card stamping and 13,286.80 266.00 13,020.80 coloring machine (3) Fixed assets rented by finance leases Nil (4) Fixed assets leased in the operating leases Nil (5) Fixed assets without certificate of title completed Nil 20. Construction in process Nil 21. Engineering materials Nil 22. Disposal of fixed assets Nil 23. Productive biological assets Nil 69 司公限有份股心中游旅海东大南海 2015 告报度年半年 24. Oil-and-gas assets □ Applicable √ Not applicable 25. Intangible assets (1) Intangible assets In RMB Non-patent Item Land use right Patent right Total technology I. Original book value 1.Opening balance 87,315,277.74 87,315,277.74 2.Increased in the Period (1) Purchase (2) internal R&D (3) Increased due to enterprise merger 3.Decreased in the Period (1)disposal 4.Ending balance 87,315,277.74 87,315,277.74 II. . Accumulated depreciation 1.Opening balance 30,751,269.08 30,751,269.08 2.Increased in the 434,363.58 434,363.58 Period (1) Accrual 434,363.58 434,363.58 3.Decreased in the Period (1)disposal 4.Ending balance 31,185,632.66 31,185,632.66 III. Depreciation reserves 70 司公限有份股心中游旅海东大南海 2015 告报度年半年 1.Opening balance 29,343,890.98 29,343,890.98 2.Increased in the Period (1) Accrual 3.Decreased in the Period (1)disposal 4.Ending balance 29,343,890.98 29,343,890.98 IV. Book value 1. Ending book value 26,785,754.10 26,785,754.10 2 Beginning book value 27,220,117.68 27,220,117.68 (2) Land use right without certificate of title completed Nil 26. Development expenditure Nil 27. Goodwill Nil 28. Long-term deferred expenses Nil 29. Deferred income assets/liabilities Nil 30 .Other non-current assets Nil 31 .Short-term loans Nil 71 司公限有份股心中游旅海东大南海 2015 告报度年半年 33. Derivative financial liabilities □ Applicable √ Not applicable 34. Note payable Nil 35. Accounts payable (1) Details of accounts payable are as follows In RMB Item Ending balance Opening balance Within 1 year (including 1 year) 528,780.02 798,580.05 1-2 years (including 2 years) 562,577.83 562,577.83 2-3 years (including 3 years) 145,272.00 145,272.00 Over 3 years 883,915.31 883,915.31 Total 2,120,545.16 2,390,345.19 (2) Accounts payable with major amount and aging of over one year In RMB Item Ending balance Reasons for fail to payment or carry-over Temporarily estimated for storage, no need Temporarily estimated 663,611.83 to paid Sanya Longhu Park Tourist Area 474,254.38 Payment of contacts Sanya Dafeng Agricultural Comprehensive 247,723.91 Payment of contacts Development Co., Ltd. Total 1,385,590.12 -- Other explanation: Nil 36.Accounts received in advance (1)Accounts received in advance In RMB Item Ending balance Opening balance Within 1 year (including 1 year) 681,140.99 861,565.30 1-2 years (including 2 years) 48,544.76 48,544.76 72 司公限有份股心中游旅海东大南海 2015 告报度年半年 2-3 years (including 3 years) 77,206.88 77,206.88 Over 3 years 372,928.97 372,928.97 Total 1,179,821.60 1,360,245.91 )))) (((( 2 Accounts received in advance with major amount and aging of over one year Nil (3) Assets settled formed by construction contract which has un-completed at period-end Nil 37.Employee compensation payable (1)Classification of employee compensation payable In RMB Item Opening balance Increase in the period Decrease in the period Ending balance I. Short-term employee 3,451,674.05 4,982,832.73 4,985,952.00 3,448,554.78 benefits Total 3,451,674.05 4,982,832.73 4,985,952.00 3,448,554.78 (2) Short-term employee benefits In RMB Item Opening balance Increase in the period Decrease in the period Ending balance 1.Salary, bonus, allowance and 2,639,512.64 3,153,482.66 3,211,756.79 2,581,238.51 subsidy 2.Employee welfare 996,684.61 996,684.61 3.Social insurance premium 660,723.77 660,723.77 Of which : including: medical 191,927.01 191,927.01 insurance expenses Work injury insurance 11,473.40 11,473.40 expenses Maternity insurance 17,459.34 17,459.34 4.Housing provident funds 53,582.60 53,582.60 5.Labor union expenditures and employee education 812,161.41 118,359.09 63,204.23 867,316.27 expenses Total 3,451,674.05 4,982,832.73 4,985,952.00 3,448,554.78 73 司公限有份股心中游旅海东大南海 2015 告报度年半年 (3) Details of defined contribution plans Nil 38 .Taxes and surcharges payable In RMB Item Ending balance Opening balance VAT 135,982.62 135,982.62 Business tax 27,599.80 86,744.38 Enterprise income tax -1,702,702.80 -1,702,702.80 Individual income tax 16.52 Urban maintenance and construction tax 1,931.98 6,072.11 Educational surtax 1,379.99 4,337.22 Property tax 204,986.70 Land use tax 2.82 108,590.94 Total -1,535,805.59 -1,155,972.31 Other notes: Nil 39. Interest payable Nil 40. Dividend payable Nil 41 .Other payables )))) (((( 1 Other payables by items In RMB Item Ending balance Opening balance Within 1 year (including 1 year) 924,920.85 860,464.13 1-2 years (including 2 years) 142,349.99 142,349.99 2-3 years (including 3 years) 299,546.18 299,546.18 74 司公限有份股心中游旅海东大南海 2015 告报度年半年 Over 3 years 22,317,010.81 22,317,010.81 Total 23,683,827.83 23,619,371.11 (2) Other payables with large amount and aging of over one year In RMB Item Ending balance Reason for non-repayment or carryover China Securities Regulatory Commission 19,810,000.00 Financial difficulty Sun Hongjie 1,000,000.00 Guarantee deposit Hong Kong Deloitte & Touche LLP 285,003.21 Audit fees Fu Yumei 227,780.23 Deposit Total 21,322,783.44 -- Other notes: Nil 42. Divided into liability held for sale Nil 43. Non-current liability due within one year Nil 44. Other current liability Nil 45. Long-term loans (1) Classification of long-term loans Nil 46. Bond payable Nil 47. Long-term payable Nil 75 司公限有份股心中游旅海东大南海 2015 告报度年半年 48. Long-term employee salary payable Nil 49. Specific payable Nil 50. Estimates liabilities Nil 51. Deferred income Nil 52. Other non-current liability Nil 53 .Share capital In RMB Increase or decrease (+, - ) Opening Share capital Ending balance balance New issue Shares granted converted from Others Sub-total reserve fund Total shares 364,100,000.00 364,100,000.00 Other notes: Nil 76 司公限有份股心中游旅海东大南海 2015 告报度年半年 54. Other equity instruments (1) Other financial instruments of outstanding preferred stock, perpetual capital societies etc. at period-end Nil (2)Changes of the statement of financial instruments of outstanding preferred stock, perpetual capital societies etc. at period-end Nil 55 .Capital reserves In RMB Item Opening balance Increase in the period Decrease in the period Ending balance Capital (share capital) 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 and reasons in the Period: Nil 56. Treasury stock Nil 57. Other comprehensive income Nil 58. Reasonable reserves Nil 59. Surplus reserves Nil 60 .Undistributed profits In RMB 77 司公限有份股心中游旅海东大南海 2015 告报度年半年 Item The period Last period Undistributed profit of last period-end before -336,331,002.15 -336,331,002.15 adjustment Undistributed profit of period-begin after -333,827,515.68 -336,331,002.15 adjustment Plus: net profit attributable to owner of parent -3,391,966.64 -848,458.96 company in the period Undistributed profits of period-end -337,219,482.32 -337,179,461.11 Adjustment of undistributed profit at period-begin: 1) For the retroactive adjustment based on Accounting Standards for Business Enterprises and other relevant regulations, affected undistributed profit at period-begin of 0 Yuan 2) For changes of accounting policies, affected undistributed profit at period-begin of 0 Yuan 3) For correction on major accounting errors, affected undistributed profit at period-begin of 0 Yuan 4) For changes of consolidation scope from same controlling, affected undistributed profit at period-begin of 0 Yuan 5) Other adjustment totally affected undistributed profit at period-begin of 0 Yuan 61 .Operating income and operating cost In RMB Amount as the period Amount as last period Item Income Cost Income Cost Main business 8,421,296.50 271,303.89 11,686,452.00 5,336.51 Total 8,421,296.50 271,303.89 11,686,452.00 5,336.51 62 .Business tax and surcharges In RMB Item Amount as the period Amount as last period Business tax 421,064.84 584,322.61 Urban maintenance and construction tax 29,474.54 40,902.59 Educational surtax 21,053.24 29,216.13 Total 471,592.62 654,441.33 Other notes: Nil 63 .Selling expenses In RMB 78 司公限有份股心中游旅海东大南海 2015 告报度年半年 Item Amount as the period Amount as last period Sales expense 6,139,828.47 5,924,967.97 Total 6,139,828.47 5,924,967.97 Other notes: Nil 64 .Administrative expenses In RMB Item Amount as the period Amount as last period Administrative expenses 6,399,160.26 5,961,388.09 Total 6,399,160.26 5,961,388.09 Other notes: Nil 65 .Financial expenses In RMB Item Amount as the period Amount as last period Less: interest income 90,199.32 22,530.32 Handling charges 26,724.58 70,535.55 Total -63,474.74 48,005.23 Other notes: Nil 66. Losses on assets impairment In RMB Item Amount as the period Amount as last period I. Losses on bad debt -166,199.46 Total -166,199.46 Other notes: Nil 79 司公限有份股心中游旅海东大南海 2015 告报度年半年 67. Gains from changes of fair value Nil 68. Gains on investment Nil 69 .Non-operating incomes In RMB Amount included in current Item Amount as the period Amount as last period non-recurring profits or losses Income from compensation 40,666.00 46,027.00 40,666.00 Others 1,200,357.50 14,540.76 1,200,357.50 Total 1,241,023.50 60,567.76 1,241,023.50 Government subsidy reckoned into current gains/losses Nil : 70. Non-operating expenses In RMB Amount included in current Item Amount as the period Amount as last period non-recurring profits or losses Total losses on disposal of 2,075.60 1,339.59 non-current assets Including: loss on disposal of 2,075.60 1,339.59 fixed assets Total 2,075.60 1,339.59 Other notes: Nil 71 .Income tax expenses Nil 72 .Other comprehensive income More details can be seen in Note. 80 司公限有份股心中游旅海东大南海 2015 告报度年半年 73. Notes to statement of cash flows )))) (((( 1 Other cash receipts related to operating activities In RMB Item Amount as the period Amount as last period Income from violation short-swing trading 1,197,462.50 Compensation for articles in the guest 40,666.00 45,917.00 rooms Interest income 90,199.32 22,530.32 Others income 542,874.20 78,817.01 Total 1,871,202.02 147,264.33 Notes of other cash receipts related to operating activities: Nil )))) (((( 2 Cash paid for other operating activities In RMB Item Amount as the period Amount as last period Sales expense, administration expense 1,616,691.51 1,793,810.07 Financial expense 26,724.58 68,881.15 Other 676,780.60 1,139,425.10 Total 2,320,196.69 3,002,116.32 Notes of cash paid for other operating activities: Nil (3) Cash received with other investment activities concerned Nil (4) Cash paid for other investment activities Nil (5) Cash received with other financing activities concerned Nil (6) Cash paid for other financing activities Nil 81 司公限有份股心中游旅海东大南海 2015 告报度年半年 74 .Supplementary information to statement of cash flows )))) (((( 1 Supplementary information to statement of cash flows In RMB Supplementary information Amount as the period Amount as last period 1.Net profit adjusted to cash flows from operating activities -- -- Net profit -3,391,966.64 -848,458.96 Plus: provision for asset impairment -166,199.46 Depreciation of fixed assets, gas and oil assets and productive biological 2,202,553.28 2,414,315.37 assets Amortization of intangible assets 434,363.58 447,470.52 Amortization of long-term deferred expenses 147,264.06 197,264.04 Loss on disposals of fixed assets, intangible assets and other long-term 2,075.60 1,339.59 assets ("-" for gains) Decrease in inventories ("-" for increases) -1,688.96 2,552.65 Decrease in operating receivables ("-" for increases) 2,309,506.86 -164,666.53 Increase in operating payables ("-" for decreases) -704,997.91 -2,034,900.00 Net cash flows from operating activities 830,910.41 14,916.68 2. Significant investing and financing activities not involving cash receipts -- -- and payments 3. Net changes in cash and cash equivalents -- -- Ending balance of cash 23,354,872.95 6,691,402.14 Less: Beginning balance of cash 22,550,289.54 6,835,685.46 Net increase in cash and cash equivalents 804,583.41 -144,283.32 (2) Net cash paid for subsidiary obtained in Period Nil (3) Net cash received from disposal of subsidiary in Period Nil 82 司公限有份股心中游旅海东大南海 2015 告报度年半年 (4) Breakdowns of cash and cash equivalents In RMB Item Ending balance Opening balance I. Cash 23,354,872.95 22,550,289.54 Including: cash on hand 585,363.82 346,943.61 Bank deposit available for payment at any 22,769,509.13 22,203,345.93 time III. Ending balance of cash and cash 23,354,872.95 22,550,289.54 equivalents Other notes: Nil 75. Notes on items of changes of owner’s equity Name and adjusted amount on “Other” at balance of year-end of last year: Nil 76. Assets with ownership or right-to-use restricted Nil 77. Foreign currency monetary items (1) Foreign currency monetary items Nil (2) Explanation on foreign operational entity, as for major foreign operational entity, disclosed foreign main operation land, book-keeping currency and basis; and disclosed reasons if the book-keeping currency changed □ Applicable √ Not applicable 78. Hedging Disclose hedging items by type of hedging as well as relevant arbitrage tool, qualitative and quantitative information for arbitrage project: Nil 79. Other Nil 83 司公限有份股心中游旅海东大南海 2015 告报度年半年 VIII. Changes of consolidation scope 1. Enterprise consolidation not under the same control Nil 2. Enterprise consolidation under the same control Nil 3. Counter purchase Nil 4. Disposal of subsidiaries Losing controlling rights while dispose subsidiary on one-time □Yes √No Dispose subsidiary step by step through multi-dealings and losing controlling rights in the Period □Yes √No 5. Changes of combination scope Other reasons contributed the changes for combination scope (e.g. new subsidiary established, liquidate subsidiary etc.): Nil 6. Other Nil IX. Equity in other entity 1. Equity in subsidiaries Nil 2. Trading that has changes in owner’s equity in subsidiaries, and still controls the subsidiary Nil 3. Equity in joint venture or affiliated enterprise Nil 84 司公限有份股心中游旅海东大南海 2015 告报度年半年 4. Important joint operation Nil 5. Equity in structuring body that out of the consolidated financial statement scope Explanation on structuring body that out of the consolidated financial statement scope: Nil 6. Other Nil X. The risk associated with financial instruments Nil XI. Disclosure of fair value Nil XII. Related parties and related party transactions 1. The parent enterprise of the Company Nil 2. The subsidiary of the Company Nil 3. Joint-venture and affiliated enterprise of the Company Nil 4. Other related parties Name Relationship with the Company Luoniushan Co., Ltd. The largest shareholder Other notes As of December 31, 2014, Luoniushan Co., Ltd., as the largest shareholder, held 61,190,300 shares (16.81% of the total share capital of the Company). 85 司公限有份股心中游旅海东大南海 2015 告报度年半年 5. Related party transactions (1) Sale of goods/rendering of labor services/labor service offering Sale of goods/rendering of labor services: Nil Goods sold and labor service offering In RMB Contents of related party Related party Amount as the period Amount as last period transactions Luoniushan Co., Ltd. Accommodation 12,670.66 51,935.70 Notes of sale of goods/rendering of labor services/labor service offering: Nil (2) Related trusteeship/contract and delegated administration/outsourcing Nil (3) Related leasing Nil (4) Related guarantee Nil (5) Borrowed funds of related party Nil (6) Related party’s assets transfer and debt reorganization Nil (7) Remuneration of key management Nil (8) Other related transactions Nil 6. Receivables and payables of related parties Nil 86 司公限有份股心中游旅海东大南海 2015 告报度年半年 7. Related party commitment Nil 8. Other Nil XIII. Share-base payment 1. Overall performance of share-base payment □ Applicable√ Not applicable 2. Share-base payment settled by equity □ Applicable√ Not applicable 3. Share-base payment settled by cost □ Applicable√ Not applicable 4. Modification and termination of share-base payment Nil 5. Other Nil XIV. Commitments and contingencies 1. Material commitments Major commitments on balance sheet date 2. Contingencies (1) Major contingencies on balance sheet date Nil (2) For no major contingencies disclosed, explain reasons The Company has no major contingencies should be disclosed 87 司公限有份股心中游旅海东大南海 2015 告报度年半年 3. Other Nil XV. Event after balance sheet date 1. Major non-adjustment events Nil 2. Profit distribution Nil 3. Sales return Nil 4. Explanation on other events after balance sheet date Nil XVI. Other significant events 1 .Correction of accounting errors in previous period Nil 2. Debt reorganization Nil 3. Assets replacement Nil 4. Annuity plan Nil 5. Termination of operation Nil 6. Segment information Nil 88 司公限有份股心中游旅海东大南海 2015 告报度年半年 7. Major trading and items shows influence on investors’ decision-making Nil 8. Other The Letters of Responsibility signed between the Company and Mr. Sun Hongjie, concerned with the target management for South China Hotel, has prematurely terminated, dated 10th May 2015 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 Remark 89 司公限有份股心中游旅海东大南海 2015 告报度年半年 Gains/losses from the disposal of Losses 2,075.60 Yuan from disposal of fixed assets, the bad debt 164,123.86 non-current asset provision accrual 166,199.46 Yuan has been written back. Other non-operating income and expense Mainly because the second largest shareholders gains 1,194,445.50 1,241,023.50 other than the abovementioned ones Yuan from short-swing trading which is belongs to the Company Total 1,405,147.36 -- Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according to the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss, explain reasons □ Applicable √ Not applicable 2. REO and earnings per share Earnings per share Profits during report period Weighted average ROE Diluted EPS Basic EPS (Yuan/share) (Yuan/share) Net profits belong to common stock -4.10% -0.0093 -0.0093 stockholders of the Company Net profits belong to common stock stockholders of the Company after deducting -5.80% -0.0131 -0.0131 nonrecurring gains and losses 3. 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 In RMB Net profit Net assets Amount as the period Amount as last period Ending balance Beginning balance Chinese GAAP -3,391,966.64 -848,458.96 81,023,367.69 84,415,334.33 Items and amount adjusted by IAS: IAS -3,391,966.64 -848,458.96 81,023,367.69 84,415,334.33 (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 Name of foreign accounting rules: 90 司公限有份股心中游旅海东大南海 2015 告报度年半年 In RMB Net profit Net assets Amount as the period Amount as last period Ending balance Opening balance Chinese GAAP -3,391,966.64 -848,458.96 81,023,367.69 84,415,334.33 Items and amount adjusted by foreign accounting rules: By foreign accounting -3,391,966.64 -848,458.96 81,023,367.69 84,415,334.33 rules (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 Nil 4. Other Nil 91 司公限有份股心中游旅海东大南海 2015 告报度年半年 Section X. Documents available for references I. Text of Semi-annual report 2015 with the signature of corporate of the Company. 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. Text of the file and draft of the announcement under the name of the Company that released on website appointed by CSRC in reporting period. IV. Other relevant files The above said documents are prepared in the security department of the Company. HAINAN DADONGHAI TOURISM CENTER (HOLDINGS) CO., LTD. Chairman: Li Yuanbin 23 July 2015 92