必读>定期报告

*ST东海B:2017年年度报告(英文版)

来源:证券时报

司公限有份股心中游旅海东大南海                   2017 文全告报度年年

Stock Code: 000613, 200613     Short Form of the Stock: *ST Donghai-A, *ST Donghai-B

海南大东海旅游中心股份有限公司

Hainan   Dadonghai Tourism Centre (Holdings)          Co., Ltd.

Annual Report 2017

Disclosure Date: 1 February 2018

1

司公限有份股心中游旅海东大南海                     2017 文全告报度年年

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.

Li Yuanbin, Principal of the Company, Fu Zongren, person in charger of accounting works and

Fu Zongren, person in charge of accounting organ (accounting principal) hereby confirm that

the Financial Report of 2017 Annual Report is authentic, accurate and complete.

All directors are attending the Board Meeting for Report deliberation.

The Company has no plan of cash dividends carried out, bonus issued and capitalizing of

common reserves either.

Concerning the forward-looking statements with future planning involved in the Report, they

do not constitute a substantial commitment for investors. Investors are advised to exercise

caution of investment risks.

2

司公限有份股心中游旅海东大南海                                    2017 文全告报度年年

Content

Section I Important Notice, Contents and Paraphrase..........................................................................2

Section II Company Profile and Main Finnaical Indexes.................................................................... 4

Section III Summary of Company Business........................................................................................ 8

Section IV Discussion and Analysis of Operation............................................................................... 9

Section V Important Events................................................................................................................18

Section VI Particular about Changes in shares and shareholders.......................................................26

Section VII Preferred Stock................................................................................................................31

Section VIII Particulars about Directors, Supervisors, Senior Executives and Employees...............32

Section IX Corporate Governance..................................................................................................... 36

Section X Corporate Bond................................................................................................................. 41

Section XI Financial Report............................................................................................................... 42

Section XII Documents available for reference............................................................................... 110

3

司公限有份股心中游旅海东大南海                                  2017  文全告报度年年

Paraphrase

Items           Refers to                 Contents

CSRC                      Refers to China Securities Regulation Commission

SSE                       Refers to Shenzhen Stock Exchange

Company Law                   Refers to Company Law of The People’s Republic of China

Securities Law                 Refers to Securities Law of The People’s Republic of China

Rules of Listing                Refers to Rules of Shenzhen Stock Exchange for the Listing of Stocks

Company or 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 Tourism

Shareholders’ General Meeting         Refers to

Centre (Holdings) Co., Ltd.

Board                     Refers to Board of Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd.

Supervisory Committee of Hainan Dadonghai Tourism Centre

Supervisory Committee             Refers to

(Holdings) Co., Ltd.

Luoniushan                   Refers to Luoniushan Co., Ltd.

Yuan                      Refers to CNY/RMB

In the reporting period, the reporting period Refers to 1 January 2017 to 31 December 2017

4

司公限有份股心中游旅海东大南海                           2017 文全告报度年年

Section II Company Profile and Main Finnaical Indexes

I. Company information

Short form of the stock   *ST Donghai-A, *ST Donghai-B     Stock code     000613, 200613

Short form of the Stock

N/A

after changed

Stock exchange for listing Shenzhen Stock Exchange

Name of the Company (in

Chinese)

司公限有份股心中游旅海东大南海

Short form of the Company

(in Chinese)

海东大

Foreign name of the

Hainan Dadonghai Tourism Centre (Holdings) Co.,Ltd.

Company

Foreign name of short form

DADONGHAI

of the Company

Legal representative     Li Yuanbin

Registrations add.     Dadonghai Sanya

Code for registrations add 572021

Offices add.         Dadonghai Sanya

Codes for office add.    572021

Company website       ---

Email            hnddhhn@21cn.com

II. Person/Way to contact

Secretary of the Board     Rep. of security affairs

Name                   Wang Hongjuan

Contact add.               Dadonghai Sanya

Tel.                   0898-88219921

Fax.                   0898-88214998

E-mail                  hnddhhn@21cn.com

5

司公限有份股心中游旅海东大南海                                    2017 文全告报度年年

III. Information disclosure and preparation place

Newspaper appointed for information disclosure     Securities Times, Hong Kong Commercial Daily

Website for annual report publish appointed by

http://www.cninfo.com.cn

CSRC

Preparation place for annual report           Security department of the Company

IV. Registration changes of the Company

Organization code             Unified social credit code 91460000201357188U

Changes of main business since listing   No changes

1. The Company listed A-stock in January 1997, and 96.327 million A-stock shares are

held by Hainan Dadonghai Tourism Centre Group Co., ltd., a 26.46% in total share

capital of the Company and is the first majority shareholder of the Company also.

2. On 25 December 1998, the shares held by Hainan Dadonghai Tourism Centre Group

Co., ltd were transfer to Sanya ABC through the courts of justice, and after obtained the

shares in December 1998, Sanya ABC entrust wholly-owned subordinate enterprise

Sanya Bank-Agriculture Industrial Development Corp. to hold the aforesaid shares,

than the first majority shareholder of the Company comes to Sanya Bank-Agriculture

Industrial Development Corp.

3. On 12 December 2000, the aforesaid equity was stripped to name of China Greatwall

Previous changes   for controlling Assets Management Corporation, the first majority shareholder of the Company.

shareholders               4. On 19 September 2001, China Greatwall Assets Management Corporation entered

into “Equity Transfer Agreement” with Haikou Food Co., Ltd for 60 million shares

transfer; and gained approval of [2002] No.: 430 from Ministry of Finance dated 18

October 2002, than the first majority shareholder of the Company comes to Haikou

Food Co., Ltd.

5. On 24 April 2008, Haikou Agriculture & Industry & Trade Luoniushan Co., Ltd.

entered into the “Statement”, confirmed that the 60 million shares held by Haikou Food

Co., Ltd. were under the name of Haikou Agriculture & Industry & Trade Luoniushan

Co., Ltd., the shares’ ownership have been transfer dated 29 January 2010. Therefore,

Haikou Agriculture & Industry & Trade Luoniushan Co., Ltd. comes to the first

majority shareholder of the Company.

V. Other relevant information

CPA engaged by the Company

Name of CPA             BDO CHINA Shu Lun Pan Certified Public Accountants LLP

Offices add. for CPA         4# Building, No. 61, Nanjing Rd.(E), Shanghai

Signing Accountants         Zhu Jianqing, Liu Zebo

Sponsor engaged by the Company for performing continuous supervision duties in reporting period

6

司公限有份股心中游旅海东大南海                                   2017 文全告报度年年

□ Applicable   √ Not applicable

Financial consultant engaged by the Company for performing continuous supervision duties in reporting period

□ Applicable   √ Not applicable

VI. Main accounting data and financial indexes

Whether it has retroactive adjustment or re-statement on previous accounting data

□ Yes √ No

2017       2016       Changes over last year       2015

Operating income (RMB)           27,906,564.23  21,708,883.51             28.55%   15,885,922.90

Net profit attributable to shareholders

2,858,998.66  -2,661,052.49             207.44%   -7,477,866.40

of the listed company (RMB)

Net profit attributable to shareholders

of the listed company after deducting     779,389.74   -4,072,689.97             119.14%   -9,474,005.29

non-recurring gains and losses (RMB)

Net cash flow arising from operating

5,127,288.47   2,766,372.02             85.34%   -1,745,526.28

activities (RMB)

Basic earnings per share (RMB/Share)       0.0079     -0.0073             208.22%       -0.0205

Diluted    earnings   per   share

0.0079     -0.0073             208.22%       -0.0205

(RMB/Share)

Return on Equity                  3.78%     -3.52%             207.39%       -9.27%

End of 2017   End of 2016   Changes over end of last year   End of 2015

Total assets (RMB)             87,466,661.80 105,444,153.63             -17.05%   104,887,596.60

Net assets attributable to shareholder

77,135,414.10  74,276,415.44              3.85%   76,937,467.93

of listed company (RMB)

VII. Difference of the accounting data under accounting rules in and out of China

1. Difference of the net profit and net assets disclosed in financial report, under both IAS (International

Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)

□ Applicable √ Not applicable

The Company had no difference of the net profit or net assets disclosed in financial report, under either IAS (International

Accounting Standards) or Chinese GAAP (Generally Accepted Accounting Principles) in the period.

2. Difference of the net profit and net assets disclosed in financial report, under both foreign accounting

rules and Chinese GAAP (Generally Accepted Accounting Principles)

□ Applicable √ Not applicable

The Company had no difference of the net profit or net assets disclosed in financial report, under either foreign accounting rules or

7

司公限有份股心中游旅海东大南海                                       2017 文全告报度年年

Chinese GAAP (Generally Accepted Accounting Principles) in the period.

VIII. Quarterly main financial index

In RMB

Fourth

First quarter   Second quarter   Third quarter

quarter

Operating income                       9,383,454.29     5,712,819.13     5,239,573.04   7,570,717.77

Net profit attributable to shareholders of the listed

2,410,257.23     -691,003.43     -1,478,166.83   2,617,911.69

company

Net profit attributable to shareholders of the listed

company after deducting non-recurring gains and        2,410,257.23     -691,003.43     -1,478,166.83   538,302.77

losses

Net cash flow arising from operating activities        2,609,325.33       621,747.77     -917,735.98   2,813,951.35

Whether there are significant differences between the above-mentioned financial index or its total number and the relevant financial

index disclosed in the company’s quarterly report and semi-annual report

□Yes √ No

IX. Items and amounts of extraordinary profit (gains)/loss

√Applicable  □ Not applicable

In RMB

Item                2017       2016       2015           Note

Gains/losses from the disposal of non-current asset

Loss from fixed assets

(including the write-off that accrued for impairment     -30,016.43    380,866.43   -90,560.75

disposal

of assets)

Capital occupation fees charged by non financial                                Net income from creditors’

805,825.24     961,165.05   422,000.00

enterprises recorded in the current profits and losses                             investment

Debt written off from

Other non-operating income and expenditure except

1,303,800.11     69,606.00   1,664,699.64   receivables and account paid

for the aforementioned items

in advance

Total                           2,079,608.92   1,411,637.48  1,996,138.89           --

Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for Companies

Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according to

the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their

Securities to the Public --- Extraordinary Profit/loss, explain reasons

□ Applicable  √ Not applicable

In reporting period, the Company has no particular about items defined as recurring profit (gain)/loss according to the lists of

extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to

the Public --- Extraordinary Profit/loss.

8

司公限有份股心中游旅海东大南海                                   2017 文全告报度年年

Section III Summary of Company Business

I. Main businesses of the company in the reporting period

Whether the company needs to comply with the disclosure requirements of the particular industry

No

The company's main business is hotel accommodation and catering services. Procurement of goods is mainly the goods and materials

necessary for hotel and catering operations by taking the principle of low price and fine quality, some goods are purchased by

directly signing purchase contracts with suppliers, and some good are purchased by procurement agents. The operation are mainly

including the network billing and overseas travel agency team, and supplemented by the individual travelers of non-internet

marketing and business and the tourists from travel agencies. The hotel is located at the central zone of Dadonghai scenic spot in

Sanya City, Hainan Province, and it has become a member of the nationwide famous hotels because of the convenient transportation,

beautiful environment, long history, and rich culture. However, in recent years, the local high-, middle- and low-grade hotels or

guesthouses numerously emerge, resulting in the supply much larger than the market demand, the industry competition is rather

fierce, and the pressure of decline in business remains.

II. Major changes in main assets

1. Major changes in main assets

Major assets                       Note of major changes

Decreased for the irrevocable investments as long-term un-payment written off, which

Equity assets

have been approved by the Board and shareholders general meeting

Monetary funds               Decreased for paying the fines to CSRC

Decreased for the irrevocable receivables written off, which have been approved by the

Other receivables

Board and shareholders general meeting

Non current assets due within one year   Increased due to the decoration and renovation for C/F and villa and swimming pool

Long-term deferred expenses         Increased due to the decoration and renovation for C/F and villa and swimming pool

2. Main overseas assets

□ Applicable √ Not applicable

III. Core Competitiveness Analysis

Whether or not the Company complies with disclosure requirement of the special industry

No

The company takes hotel accommodation and catering services as the principle works, locates at Dadonghai bay which is one of the

China “Top 40 scenery” and the only AAAA scenic spot open for free in Sanya and has the maximum passenger flow volume in

9

司公限有份股心中游旅海东大南海                                     2017 文全告报度年年

Sanya City, and is about a 5-minute drive from downtown of Sanya City and about a 30-munite drive from Sanya Phoenix Airport.

The hotel is only tens of meters distant from the sea level, possesses beautiful landscaping full of blooming flowers all the year round,

and enjoys exceptional geography, natural environmental advantages. The hotel has opened for more than two decades which is one

of the oldest hotels in Sanya and has received many domestic and foreign heads of state and national leaders. In the recent years, the

company has comprehensively upgraded and rebuilt the hotel’s software and hardware facilities, further improved the hotels internal

and external business environment, and effectively enhanced the business competitiveness. Currently, the management of the

company’s hotel is still in the front rank among hotels in the same area, with the same scale, and at the same level.

In the future work, the company will keep trying to improve the hotel’s internal and external business environment, strengthen the

sales efforts and the staff construction, and further improve the operational capability. During the reporting period, the company's

core competence had no significant change.

10

司公限有份股心中游旅海东大南海                             2017 文全告报度年年

Section IV Discussion and Analysis of Operation

I. Introduction

During the reporting period, the company realized main business income of 27,906,600 Yuan, increased by

6,197,700 Yuan compared with the same period last year, an increase of 28.55%; investment income of 805,800

Yuan, decreased by 585,100 Yuan compared with the same period last year, an decrease of 42.70%; operating

profit of 1,585,200 Yuan, increased by 4,267,000 Yuan compared with the same period last year, an increase of

159.11%; net non-operating income of 1,273,800 Yuan, increased by 1,253,100 Yuan compared with the same

period last year, an increase of 6053.62%; net profit of 2,859,000 Yuan, increased by 5,520,100 Yuan compared

with the same period last year, an increase of 207.44%.

During the reporting period, the Company focus on market-oriented and use marketing strategy in a flexible way

to exploited the sales channel, meanwhile, strengthening enterprise culture construction as well as the employee

team-building, making efforts to improve product’s quality, strictly controlling the cost management, perfect the

Company’s internal control system in order to reduce the risks and consumptions for more income earns and less

expenditure costs, we completed the operation targets that formulated at beginning of the year basically. Main

works are as:

1. Market-oriented, use marketing strategy in a flexible way to exploite the sales channel

During the reporting period, the Company actively expanded the network market, the Russian market and the

southwest, north, east and southern China markets in addition to further consolidating its existing customer bases

oriented by markets with flexible utilization of marketing strategies. Besides, increasing cooperation was made

by the Company with domestic and foreign well-known travel agencies, sales network platforms and direct-sale

travel agencies in the first and second tier cities. The Company also conducted implementation of sales

incentives and sales mechanism involving every staff, to increase the market share in terms of sales. During the

reporting period, the revenue of the Company from overseas sales, network sales, meeting teams and individual

visitors from travel agencies   increased significantly over the same period of last year. The revenue from its

major operating business was RMB27.9066 million, representing a year-on-year increase of 28.55% as compared

to the revenue of RMB6.1977 million of previous year.

2. People-oriented, strengthen the enterprise with high-quality, strive to improve product quality and enhance the

competitive-ness of enterprises

In reporting period, in line with the Human-Oriented employment ideality, we continuously enriched the culture

life for employees, create a harmonious working environment and strengthen the construction of enterprise culture

and staff-building. At the same time, create new management mechanism, motivate and mobilized the enthusiasm,

initiative and creativity of the staff. Based on the management ideal of “strengthen the enterprise with

high-quality”, we constantly strengthen the hotel management and carried out skill training in pre-job for their

11

司公限有份股心中游旅海东大南海                                   2017 文全告报度年年

basic information and the after-job for business ability improvement. Enhance the service standards and

consciousness, as well as the sense of responsibility and quality, effectively improved the service quality and

management standards, and improving the quality of the hotel and comprehensive competitiveness.

3. Strictly curb the costs and budget management, improve internal control mechanism, reducing risks and

consumptions, increase revenue and reduce expenditures, safety in production to maximize the interest of the

enterprise

During the reporting period, the Company continued to focus on financial management, improve the procurement

management system, strengthen management of procurement cost control and budget management, adopt

diversified means to obtain procurement price inquiry, such as network price inquiry, the hotel industry price

inquiry and other measures, obtain cost inquiry from over three suppliers to select the best one, control operating

costs in a scientific manner, strictly control various expense and expenditures, frequent inspection and repair to

prevent waste of resources, which enabled the Company to effectively improve the reasonableness of procurement

cost and cost effectiveness. Besides, human resources cost was effectively brought down due to optimized organ

establishment and personnel distribution. At the same time, the Company continued to improve the internal control

system, strengthen regulation and implementation of internal control system, strengthen the effective

implementation of internal control work, reduce risks and consumption, increase revenue and control expenditures,

emphasize production safety and improve operational efficiency, to ensure the operation safety and thus maximize

the interests of the Company as a whole.

In 2018, the Company continue to consolidate and expand sales channels, improve the hotel’s quality and service

standards, and enhance the comprehensive competitiveness, to laying out a solid foundation for sustained, stable

and healthy development of the Company.

II. Main business analysis

1. Introduction

See the “I-Introduction” in “Discussion and Analysis of Operation”

2. Revenue and cost

(1) Constitute of operation revenue

In RMB

2017                   2016

Increase/decrease

Ratio in operation            Ratio in operation

Amount                   Amount                   y-o-y

revenue                 revenue

Total of operation

27,906,564.23         100%     21,708,883.51       100%         28.55%

revenue

According to industries

12

司公限有份股心中游旅海东大南海                                    2017  文全告报度年年

Tourism catering

24,691,592.86        88.48%      19,117,791.52       88.06%         29.15%

service

Other business       3,214,971.37         11.52%      2,591,091.99       11.94%         24.08%

According to products

Room revenue        21,103,123.09        75.62%      16,914,028.50       77.91%         24.77%

Catering

entertainment        3,588,469.77        12.86%       2,203,763.02       10.15%         62.83%

revenue

Other business       3,214,971.37         11.52%      2,591,091.99       11.94%         24.08%

According to region

Hainan area         27,906,564.23        100.00%     21,708,883.51      100.00%         28.55%

(2) About the industries, products, or regions accounting for over 10% of the company’s operating income

or operating profit

√Applicable □ Not applicable

Whether or not the Company complies with disclosure requirement of the special industry

No

In RMB

Increase/decrea

Increase/decrea Increase/decrea

Operating             Gross profit                       se of gross

Operating cost             se of operating se of operating

revenue               ratio                         profit ratio

revenue y-o-y   cost y-o-y

y-o-y

According to industries

Tourism catering

24,691,592.86   10,665,396.03       56.81%       29.16%      10.02%       15.24%

service

Other business     3,214,971.37    474,523.56       85.24%       24.08%     -15.93%       8.98%

According to products

Room revenue     21,103,123.09   8,758,364.38       58.50%       24.77%       2.30%       18.46%

Catering

entertainment     3,588,469.77   1,907,031.65       46.86%       62.83%      68.37%       -3.60%

revenue

Other business     3,214,971.37    474,523.56       85.24%       24.08%     -15.93%       8.98%

According to region

Hainan area     27,906,564.23   11,139,919.59       60.08%       28.55%       8.59%       13.91%

Under circumstances of adjustment in reporting period for statistic scope of main business data, adjusted main business based on

latest one year’s scope of period-end

□ Applicable √ Not applicable

13

司公限有份股心中游旅海东大南海                                     2017 文全告报度年年

(3) Income from physical sales larger than income from labors

□ Yes √ No

(4) Fulfillment of the company’s signed significant sales contracts up to this reporting period

□ Applicable √ Not applicable

(5) Constitute of operation cost

Industry classification

Industry classification

In RMB

2017                 2016

Increase/decr

Industries       Item             Ratio in operation          Ratio in operation

Amount                 Amount                ease y-o-y

cost                 cost

Tourism catering

Raw material  1,907,031.65         17.12% 1,132,620.87       11.04%      68.37%

service

Tourism catering     Salary

1,891,709.80         16.98% 1,526,437.63       14.88%      23.93%

service         welfare

Tourism catering     Water and

1,564,778.83         14.05% 2,909,128.71       28.36%     -46.21%

service         electricity

Tourism catering

Depreciation  2,009,886.94         18.04% 2,271,348.02       22.14%     -11.51%

service

Tourism catering

Repair cost   964,425.22         8.66%   713,218.96         6.95%     35.22%

service

Knitted and

Tourism catering

Cotton      170,130.34         1.53%    2,640.00         0.03%   6,344.33%

service

Goods

Tourism catering

Washing fee   594,068.64         5.33%   471,750.30         4.60%     25.93%

service

Tourism catering

Total cost   10,665,396.03         95.74% 9,693,974.20       94.50%      10.02%

service

Note

1. Raw material increased mainly due to the growth of catering entertainment income;

2. Salary welfare increased mainly because business from guest rooms growth and the bonus for emoloyees increased;

3. Water and electricity decreased mainy because the electricity fee for previsou years are understated by Sanya Power Supply

Bureau;

4. Repari costs increased mainly due to the redecoration and renovation in the hotel during period;

5. Knitted and Cotton Goods decreased mainly because we changed the cotton and knitted goods for the guest rooms;

5. Knitted and Cotton Goods declined mainly because we change the hotel linen for guest room in Period;

14

司公限有份股心中游旅海东大南海                                  2017 文全告报度年年

6. Washing fee increased mainly due to the growth of business.

(6) Whether the changes in the scope of consolidation in Reporting Period

□ Yes √ No

(7) Major changes or adjustment in business, product or service of the Company in Reporting Period

□ Applicable √ Not applicable

(8) Major sales and main suppliers

Major sales client of the Company

Total top five clients in sales (RMB)                                       15,423,782.42

Proportion in total annual sales volume for top five clients                              55.27%

Ratio of related parties in annual total sales among the top

0.00%

five clients

Information of top five clients of the Company

Serial               Name                 Sales (RMB)   Proportion in total annual sales

1       Sanya Youyi International Travel Agency Co., Ltd.       4,913,440.00               17.61%

2       Sanya Haolide International Travel Service Co., Ltd.     4,157,223.00               14.90%

Shanghai Hecheng International Travel Service Co.,

3                                      2,598,649.42                 9.31%

Ltd.

4       ANEX TOUR                           2,184,663.00                 7.83%

5       Shenzhen Choi Fu Tong Technology Co.,Ltd           1,569,807.00                 5.63%

Total                 --                 15,423,782.42               55.27%

Other situation of main clients

□ Applicable √ Not applicable

Main suppliers of the Company

Total purchase amount from top five suppliers (RMB)                                6,742,744.65

Proportion in total annual purchase amount for top five suppliers                           76.20%

Ratio of related parties in annual total sales among the top five

0.00%

suppliers

Information of top five suppliers of the Company

Serial             Name                Sales (RMB)     Proportion in total annual sales

1       Sanya Yunfang Food Distribution Co., Ltd.          2,842,833.72               32.13%

Sanya Power Supply Bureau of Hainan

2                                      2,273,594.35               25.70%

Power Grid

15

司公限有份股心中游旅海东大南海                                      2017  文全告报度年年

3      Sanya Zhengzhuang Industrial Co., Ltd.               635,943.55                   7.19%

4      Sinofrench Water Supply Co., Ltd.                 602,845.23                   6.81%

Sanya Changfeng Marine Gas Supply and

5                                       387,527.80                   4.38%

Gas Supply Co., Ltd.

Total                 --                  6,742,744.65                   76.20%

Other notes of main suppliers of the Company

□ Applicable √ Not applicable

3. Expenses

In RMB

Increase/decre

2017           2016                       Note of major changes

ase y-o-y

Sales                                    Sales business increased, thus the expenses increased

5,124,503.55       4,931,333.26     3.92%

expense                                   correspondingly

Management

9,665,525.83       9,374,635.91     3.10%   The salary expenses increased

expense

Financial                                  Handling charge from the bank decreased and interest

-249,176.18       -193,645.29     28.68%

expense                                   income from savings increased

4. R&D expenses

□ Applicable √ Not applicable

5. Cash flow

In RMB

Item                     2017         2016       Y-o-y changes

Subtotal of cash in-flow from operation activity               30,557,863.93    23,114,982.69       32.20%

Subtotal of cash out-flow from operation activity               25,430,575.46    20,348,610.67       24.97%

Net cash flow from operation activity                     5,127,288.47    2,766,372.02       85.34%

Subtotal of cash in-flow from investment activity               9,840,550.00   14,920,000.00       -34.04%

Subtotal of cash out-flow from investment activity              32,496,479.32    10,258,516.27       216.78%

Net cash flow from investment activity                   -22,655,929.32     4,661,483.73       -586.02%

Subtotal of cash in-flow from financing activity               19,810,000.00

Subtotal of cash out-flow from financing activity               19,810,000.00

Net increased amount of cash and cash equivalent               -17,528,640.85     7,427,855.75       -335.99%

Main reasons for y-o-y major changes in aspect of relevant data

16

司公限有份股心中游旅海东大南海                                       2017 文全告报度年年

√Applicable   □ Not applicable

1. Cash in-flow from operating activities increased 32.20% from a year earlier, mainly because revenue from operation increased

dramatically and sales return increased correspondingly;

2. Cash out-flow from operating activities increased 24.97% from a year earlier, mainly because sales volume increased dramatically,

and purchasing business and salary expenses increased as well as the find for CSRC are paid in the period;

3. Net cash flow from operating activity increased 85.34% from a year earlier, mainly because cash in-flow over the out-flow from

operating activities in the period;

4. Cash in-flow from investment activity decreased 34.04% from a year earlier, mainly because equity of Sanya Xiangyu E-Business

are paid with revenue earns last year;

5. Cash out-flow from investment activity increased 216.78% from a year earlier, mainly because fine for CSRC are paid in the

period;

6. Net cash flow from investment activity decreased 586.02% from a year earlier, mainly because paying the fine to CSRC in the

period and received revenue from equity transfer in first half year of 2017;

7. Net increased amount of cash and cash equivalent decreased 335.99% from a year earlier, mainly because paying the fine to CSRC

in the period.

Reasons of major difference between the cash flow of operation activity in report period and net profit of the Company

□ Applicable √ Not applicable

III. Analysis of the non-main business

√Applicable   □ Not applicable

In RMB

Ratio in total

Amount                        Note           Whether be sustainable

profit

Have a certain

Investment income         805,825.24       28.19%  Income from debt investment

sustainability

Assets impairment losses from

Asset impairment           11,709.50       0.41%                         Un-sustainability

provision for bad debts

The account payable with long-term

Non-operating income       1,303,800.11       45.60%                        Un-sustainability

credit in book are written off

IV. Assets and liability

1. Major changes of assets composition

In RMB

End of 2017             End of 2016

Ratio     Notes of major

Ratio in total             Ratio in total

Amount                 Amount               changes      changes

assets                 assets

Paying the fine to

Monetary fund     9,681,607.16       11.07%    27,210,248.01      25.81%     -14.74%

CSRC

17

司公限有份股心中游旅海东大南海                               2017 文全告报度年年

Account

594,130.89     0.68%     690,444.72       0.65% 0.03%  In normal changes

receivable

Inventory       227,005.11     0.26%     219,179.72       0.21% 0.05%  In normal changes

Investment real

8,859,003.99     10.13%   9,333,527.55       8.85% 1.28%  In normal changes

estate

Fix assets     39,088,708.83     44.69%   40,395,680.91      38.31% 6.38%  In normal changes

2. Assets and liability measured by fair value

□ Applicable √ Not applicable

3. Assets right restriction till end of reporting period

Nil

V. Investment

1. Overall situation

√Applicable □ Not applicable

Investment in the same period of last

Investment in the reporting (RMB)                             Changes

year ( RMB)

9,000,000.00               9,000,000.00               0.00%

2. The major equity investment obtained in the reporting period

□ Applicable √ Not applicable

3. The major non-equity investment doing in the reporting period

□ Applicable √ Not applicable

4. Financial assets investment

(1) Securities investment

□ Applicable √ Not applicable

The company had no securities investment in the reporting period.

(2) Derivative investment

□ Applicable √ Not applicable

18

司公限有份股心中游旅海东大南海                                 2017 文全告报度年年

The Company has no derivatives investment in the reporting period.

5. Application of raised proceeds

□ Applicable √ Not applicable

The Company has no application of raised proceeds in the reporting period.

VI. Sales of major assets and equity

1. Sales of major assets

□ Applicable √ Not applicable

The Company had no sales of major assets in the reporting period.

2. Sales of major equity

□ Applicable √ Not applicable

VII. Analysis of main holding company and stock-jointly companies

□ Applicable √ Not applicable

The Company had no information of main holding company and stock-jointly companies disclosed in the reporting period.

VIII. Structured vehicle controlled by the Company

□ Applicable √ Not applicable

IX. Future Development Prospects

1. Industrial development trend and competition facing the Company

Sanya is the only tropical seaside city in China with a world-leading eco-environment, and has a wonderful air

quality that can be numbered in China, it owns an abound marine resources with unique resource advantage.

Sanya has a geographical position advantage and under the help of preferential policy of duty-free for the

internationalization of tourism island, with the improvement of people’s life quality in recent years, and

enhancement of tourism consumption consciousness while haze air environment outside the island, the tourism

market prospects has a good trend in Hainan. However, in reporting period, the whole world has a slump in

economic resurgence, the tourism market lack of vitality, and the supply far greater than the demand while home

inn hotel rapidly expanding blindly, the market competition comes more and more intensify. In addition, with the

soaring operation costs and expenditures for the salary of hospitality industry in Sanya and shrinking operation

profit, the hotel industry faced a downward pressure on operation.

In the future work, the company will continue to strengthen the updating and transformation of the hotel’s

equipment and facilities, improve and upgrade the hardware and software equipments and facilities and the quality

of internal and external business environment, enhance the construction of enterprise culture and staff teams,

19

司公限有份股心中游旅海东大南海                            2017 文全告报度年年

improve service level and service quality, actively expand the sales channels, make full use of the internet

platform, expand the sales network, increase the market share, and further improve the management level and core

competitiveness.

2. Future development plans and operation plan for year of 2018

(1) Market-oriented, continues to improve the quality management of the software equipment and facilities in the

Hotel, enhancing the hotel brand image, expanding market channel, and center with enterprises performance,

making the brand more bigger and stronger droved by pioneer and invent.

(2) Continue to expand financing channels, enrich the industrial construction, widen the company size, increased

more profit points in order to strengthen the sustainability, stable and healthily of the operation.

(3) Continue to strengthen the standard management of internal control, perfect the corporate governance structure,

standardize the management and operation, and effectively control the risks.

3. Fund demands and use plan required for the future development of the Company

The Company utilizes owned funds or financing methods to raise the funds demanded for development, and

completes the development planning of the Company.

4. The risks may cause adverse effects on the future development strategy and realization of operation target of

the Company

(1) Marco Policy risks

In order to normalize and optimize tourism market or further to promote clear-party construction, related

departments may further issue some relative policies. While these polices may cause restrain and effect on

regional tourism development. Main business income may be affected since we are engaged in tourism service.

Countermeasures: The Company will further to improve the hard and soft equipments and facilities of the hotel

while expanding the business scope, and win more market shares via high-class service and comfortable

environment so as to ensure the main business income level.

(2) Natural disaster risks

In recent years, various natural disasters take place frequently, Hainan Island belongs to oceanic climate, where

has high incidence of disastrous weather in summer. If Sanya becomes the landing place of typhoon, it may cause

great damages to the facilities of the Company and affect the Company’s normal operation.

Countermeasures: The Company will strengthen the construction and maintenance for infrastructure, continue to

buy property insurances, positively adopt effective prevention measures, and improve the ability of resisting

natural disasters.

(3) Risks of HR

Demand for talent in aspect of hotel sales and management are increasingly due to the constantly rise of hotel

industry, flow of hotel talented people comes more widespread and more frequent, we may face the risks of

development restrained from brain drain.

Countermeasure: we will continue to improved the talent introduction, training system, incentive mechanism,

remuneration and welfare as well as insurance mechanism, strive to attract talent, cultivate them and retain them.

Meanwhile, strengthen staff quality and skills as well as the management ability, further putting more efforts in

20

司公限有份股心中游旅海东大南海                                   2017 文全告报度年年

enterprise culture construction, enhance the cohesion in the Company, and guarantee a stable of the core

management and skill technicians.

(4) Operational risks of main business

With the ceaseless development of global tourist industry constantly and ceaseless rising of high-class,

middle-class and low-class hotels, the tourist sources keep shunting, and the competition of tourism service

industry in Sanya becomes increasingly fierce. While the main business of the Company is just a small-scale hotel,

as the main business is single and the business scope is limited, the tourist market conditions and tourist quantity

directly make significant affects on the company performance.

Countermeasure: made a scientific management and decision-making procedures, strengthen the awareness of risk

prevention, building and improving relevant mechanism and regulized the management in the Company.

Furthermore, increase the sales ability, on base of the former sales network, continues to exploit foreign high-end

tourism market under the superior geographical location and environment for improving the occupancy rate.

Besides, continues to exploit financing channel, expanding operation projects, enrich the industrial structure for

increasing the profit increasing point.

X. Reception of research, communication and interview

1. In the report period, reception of research, communication and interview

√Applicable  □ Not applicable

Time         Way     Type             Basic situation index of investigation

Telephone           Investor Mr./Ms/ Huang from Shenzhen ask about the commitment

2017-10-17       communica  Individual

from majority shareholders, no material provided

tion

Telephone           Investor Mr./Ms/ Zhang from Beijing ask about the operation assets

2017-10-21       communica  Individual

and 3Q performance , no any material provided

tion

Telephone           Investor Mr./Ms/ Wang from Shanghai ask about the commitment from

2017-11-08       communica  Individual

majority shareholders, no material provided

tion

Telephone           Investor Mr./Ms/ Li from Beijing ask about the listing of staff shares,

2017-11-28       communica  Individual

no any material provided

tion

Telephone           Investor Mr./Ms/ Lu from Hebei ask about the performance of 2017, no

2017-12-15       communica  Individual

any material provided

tion

Reception (times)                                                         27

Number of hospitality                                                       0

Number of individual reception                                                  27

Number of other reception                                                     0

Disclosed, released or let out major undisclosed

No

information

21

司公限有份股心中游旅海东大南海                                      2017 文全告报度年年

Section V. Important Events

I. Profit distribution plan of common stock and capitalizing of common reserves plan

Formulation, Implementation and Adjustment of common stock Profit Distribution Policy Especially Cash Dividend policy during

the Reporting Period

□ Applicable √ Not applicable

Profit distribution plan (pre-plan) of common stock and capitalizing of common reserves plan (pre-plan) in latest three years

(including the reporting period)

According to the auditing reports issued by certified public accountants, the net income realized in nearly three

years (including the reporting period) was used to make up the losses in the previous year; the undistributed profit

during this reporting remained a minus. The Company did not take profit allocation nor capitalization of capital

reserve during the reporting period.

Cash dividend of common stock in latest three years (including the reporting period)

In RMB

Ratio in net profit

attributable to

Net profit attributable to common                 Amount

Year for   Amount for                         common stock               Proportion for

stock shareholders of listed                 for cash

bonus   cash bonus (tax                      shareholders of listed            cash bonus by

company in consolidation                   bonus by

shares     included)                       company contained in             other ways

statement for bonus year                   other ways

consolidation

statement

2017           0.00             2,858,998.66            0.00%     0.00          0.00%

2016           0.00            -2,661,052.49            0.00%     0.00          0.00%

2015           0.00            -7,477,866.40            0.00%     0.00          0.00%

The Company gains profits in reporting period and the retained profit of common stock shareholders provided by parent company is

positive but no plan of cash dividend proposed of common stock

□ Applicable √ Not applicable

II. Profit distribution plan and capitalizing of common reserves plan for the Period

□ Applicable √ Not applicable

The Company has no plans of cash dividend distributed, no bonus shares and has no share converted from capital reserve either for

the year.

22

司公限有份股心中游旅海东大南海                                       2017 文全告报度年年

III. Implementation of commitment

1. Commitments completed in Period and those without completed till end of the Period from actual

controller, shareholders, related parties, purchaser and companies

√Applicable □ Not applicable

Type

of                                Com

Promis                               Commitm   mitm Impleme

Commitments                comm        Content of commitments

e                                ent date   ent  ntation

itment                                term

s

On May 30, 2007, Luoniushan Co., Ltd.

made commitments in the Company’s

"Instructions for reform of non-tradable

shares" (Revision) and "Instructions for

The

reform of non-tradable shares" (Abstract

original

Comm   of revision) that in view of Dadonghai

itment                                    plans of

s for   Company’s losses in successive years and

Luoniu                                         material

Share   on the verge of delisting, in order to           6

Commitments for             shan                               2017-06-2      assets

Merge   reverse    the  company's  business        mont

Share Merger Reform           Co.,                               7          reorgani

r     difficulties, improve profitability and          hs

Ltd                                           zation

Refor   recover the continuous business capacity,

was

m     Luoniushan Co., Ltd., the controlling

terminat

shareholder   of Dadonghai Company

ed

made commitments to actively seek

restructuring parties to reorganize the

assets of Dadonghai Company at the

appropriate time.

Commitments   in    report of

acquisition or equity change

Commitments     in    assets

reorganization

Commitments make in initial

public offering or re-financing

Equity incentive commitment

Other commitments for medium

and small shareholders

Completed on time (Y/N)         No

If the commitments is not        The Company's stock commenced suspension of trading from the opening session on 15

fulfilled on time, shall explain     February 2017 as it planned to fulfill its commitments. On 13 August 2017, 12 proposals relating

the specify reason and the next     to Material Asset Acquisition and Connected Transaction Report (Plan) of Hainan Dadonghai

work plan                Tourism Centre (Holdings) Co., Ltd. were denied at the 11th extraordinary general meeting of the

23

司公限有份股心中游旅海东大南海                                   2017 文全告报度年年

8th session of board of directors of the Company. On 15 August 2017, the Company announced to

terminate this restructuring relating to material assets acquisition, and the stock of the Company

commenced trading since 17 August 2017. up to date, there is no information which should be

disclosed by the Company and which is not disclosed yet.

2. Concerning assts or project of the Company, which has profit forecast, and reporting period still in

forecasting period, explain reasons of reaching the original profit forecast

□ Applicable √ Not applicable

IV. Non-operational fund occupation from controlling shareholders and its related party

□ Applicable √ Not applicable

No non-operational fund occupation from controlling shareholders and its related party in period.

V. Explanation from Board of Directors, Supervisory Committee and Independent Directors

(if applicable) for “Qualified Opinion” that issued by CPA

□ Applicable  √ Not applicable

VI. Particulars about the changes in aspect of accounting policy, estimates and calculation

method compared with the financial report of last year

√Applicable  □ Not applicable

1. Change of accounting policy

According to the Notice from the Ministry of Finance on Issuing and Amending the "Enterprise Accounting

Standards No. 16 - Government Subsidy” (CK[2017]15), any enterprise applying Enterprise Accounting

Standards is required to implement the notice since 12 June 2017, and future applicable method shall be adopted

with respect to the government subsidies existed on 1 January 2017. Any enterprise applying Enterprise

Accounting Standards is required to implement the "Enterprise Accounting Standards No. 42 - Non-current

Assets Held for Sale, Disposal Group and Discontinuing Operation” issued in 2017 since 28 May 2017, and

future applicable method shall be adopted with respect to the non-current assets held for sale, disposal group and

discontinuing operation existed as of the date of implementation. On 25 December 2017, the Ministry of Finance

issued the Notice on Amending the General Formatting of Enterprise Financial Statement (CK[2017]30) to make

amendment to the general formatting of financial statements, which was applicable to the financial statements

prepared for 2017 and other future accounting periods.

The above changes in accounting policies have no effect on the amount reported in the financial statements of the

Company.

2. Change of accounting estimates

Major accounting estimates have no changes in the reporting period.

24

司公限有份股心中游旅海东大南海                                   2017 文全告报度年年

VII. Major accounting errors within reporting period that needs retrospective restatement

□ Applicable  √ Not applicable

No major accounting errors within reporting period that needs retrospective restatement for the Company in the period.

VIII. Compare with last year’s financial report; explain changes in consolidation statement’s

scope

□ Applicable  √ Not applicable

No changes in consolidation statement’s scope for the Company in the period.

IX. Appointment and non-reappointment (dismissal) of CPA

Accounting firm appointed

Name of domestic accounting firm                   BDO CHINA Shu Lun Pan Certified Public Accountants LLP

Remuneration for domestic accounting firm (in 10 thousand

39

Yuan)

Continuous life of auditing service for domestic accounting firm   7

Name of domestic CPA                         Zhu Jianqing, Liu Zebo

Re-appointed accounting firms in this period

□Yes √No

Appointment of internal control auditing accounting firm, financial consultant or sponsor

√Applicable □ Not applicable

On 29 March 2017, the Company holding the 12th meeting of 8th session of the Board, and decided to appointed

BDO CHINA Shu Lun Pan Certified Public Accountants LLP as the auditing institute of the internal control for

year of 2017 and the decision has been deliberated and approved in general meeting of 2017. During the period,

auditing fee 80,000 Yuan in total has been paid to the institute for internal control auditing.

X. Particular about suspended and delisting after annual report disclosed

□ Applicable √ Not applicable

XI. Bankruptcy reorganization

□ Applicable  √ Not applicable

No bankruptcy reorganization for the Company in reporting period

XII. Significant lawsuits and arbitrations of the Company

□Applicable   √Not applicable

No significant lawsuits and arbitrations occurred in the reporting period

25

司公限有份股心中游旅海东大南海                                     2017   文全告报度年年

XIII. Penalty and rectification

□ Applicable √ Not applicable

No penalty and rectification for the Company in reporting period.

XIV. Integrity of the company and its controlling shareholders and actual controllers

□ Applicable √ Not applicable

XV. Implementation of the company’s stock incentive plan, employee stock ownership plan or

other employee incentives

□ Applicable √ Not applicable

During the reporting period, the company has no stock incentive plan, employee stock ownership plan or other employee incentives

that have not been implemented.

XVI. Major related transaction

1. Related transaction with routine operation concerned

√Applicable □Not applicable

Whet

Tradi

her

Relat         ng

ed             over   Cleari Avail

Propo   limit

Type   Conte            transa             the   ng   able   Date   Index

Relat        rtion

of     nt of Pricin       ction       appro        form

Relati                  ed         in         appro       simila    of   of

Related       relate   relate   g         amou                   for

onshi                 transa       simila   ved

party         d     d   princi         nt              ved   relate   r    disclo discl

p                   ction         r

transa   transa  ple        (in 10       (in 10         d

price       transa        limite      marke    sure  osure

ction   ction           thous                  transa

ctions   thous

and             d or   ction t price

Yuan)         and

not

Yuan)

(Y/N)

Same   Same

as the as the

First

Luoniu                                                 transa transa

major   Consu   Acco   Mark   Mark

shan                                   2.82             ction  ction

ity   mptio   mmod   et    et    78.75           0 Yes

Co.,                                     %           with   with

share   n     ation  price   price

Ltd.                                                 non-r  non-r

holder

elated elated

party  party

Total                     --    -- 78.75   --       0   --   --   --     --   --

Detail of sales return with major

N/A

amount involved

Report the actual implementation of

the daily related transactions which   N/A

were projected about their total

26

司公限有份股心中游旅海东大南海                                       2017   文全告报度年年

amount     by  types during   the

reporting period

Reasons for major differences

between trading price and market         N/A

reference price

2. Related transactions by assets acquisition and sold

□ Applicable    √ Not applicable

No related transactions by assets acquisition and sold for the Company in reporting period

3. Related transactions of mutual investment outside

□ Applicable    √ Not applicable

No main related transactions of mutual investment outside for the Company in reporting period

4. Contact of related credit and debt

√Applicable     □ Not applicable

There are non-operational contact of related credit and debts in the Company

√ Yes □No

Related party claims receivable

Nil

Debt payable to related parties

The newly

The amount

Balance of    added                 Current    Balance at

of recovery

Resulte     period-beg   amount in               interest   period-end

Related       Related                             in Period  Interest

d     in (in 10    Period                 (in 10     (in 10

party      relationship                           (in 10   rate

reason     thousand     (in 10                 thousand   thousand

thousand

Yuan)     thousand                 Yuan)     Yuan)

Yuan)

Yuan)

Luoniushan               Capital

Group Co.,     Related party   exchan           0     1,981     1,981                    0

Ltd.                  ge

Influence on operation result

and financial statue of the       N/A

Company from related debts

5. Other significant related transactions

□ Applicable    √ Not applicable

27

司公限有份股心中游旅海东大南海                                     2017 文全告报度年年

The company had no other significant related transactions in reporting period.

XVII. Significant contract and implementations

1. Trusteeship, contract and leasing

(1) Trusteeship

□ Applicable   √ Not applicable

No trusteeship for the Company in reporting period

(2) Contract

□ Applicable   √ Not applicable

No contract for the Company in reporting period

(3) Leasing

√Applicable   □ Not applicable

Note of leasing

Item                   Tenant             Lease life     Term of lease

B/F of the Hotel       Ma Ming (Hainan Hangpai Food Co.,       5 years   2016-01-01 to 2020-12-31

Ltd. )

Shopping mall –B/F           Xu Jipeng             3 years   2016-11-15 to 2019-11-14

A/F ground floor             Chen Junwei            3 years   2016-03-01 to 2019-02-28

Seaside stall and wood    Sanya Leda Food Management Co.,       5 years   2018-01-01 to 2022-12-31

house                   Ltd.

Seaside locker room          Zhong Zhengao            3 years   2016-12-01 to 2019-11-30

Multi-functional meeting   Sanya Haolide International Travel     5 years   2017-10-01 to 2022-09-30

room                  Agency Co., Ltd.

Gains/losses to the Company from projects that reached over 10% in total profit of the Company in reporting period

√Applicable   □ Not applicable

Leasing

assets               Leasin

The

involved                   g  Basis for         Wheth   Asso

impact of

Name     Name of         in the   Lease    Lease   income  determinin          er be  ciatio

Leasing                                  leasing

of     the leasing       amount   start  terminati    (in 10   g the           related   n

assets                                 income on

lessor     party          (in 10   date     on date   thousan   leasing          transac relati

the

thousan                   d   income           tions   on

company

d                 Yuan)

Yuan)

28

司公限有份股心中游旅海东大南海                              2017 文全告报度年年

Ma Ming     B/F

The

(Hainan     restaura       2016-01   2020-12-           Increase

Compa   Hangpai     nt in    1,886             75.6 Contract         No   N/A

-01     31             income

ny     Food Co.,   first

Ltd. )     floor

The    Sanya Leda   Seaside

Food      stall and       2018-01   2022-12-           Increase

Compa                   653             145  Contract         No   N/A

Manageme    wood         -01     31             income

ny     nt Co., Ltd.  house

The

Seaside       2016-12   2019-11-

Zhong                                     Increase

Compa           locker     10             36  Contract         No   N/A

Zhengao               -01     30             income

room

ny

Sanya

Haolide     Multi-fu

The

Internationa  nctional       2017-10   2022-09-           Increase

Compa                   190              30  Contract         No   N/A

l Travel    meeting       -01     30             income

ny

Agency     room

Co., Ltd.

2. Major Guarantee

□Applicable √ Not applicable

The Company had no guarantee in the reporting period.

3. Entrust others to cash asset management

(1) Trust financing

□ Applicable √ Not applicable

The Company had no trust financing in the reporting period.

(2) Entrusted loans

□ Applicable  √ Not applicable

The company had no entrusted loans in the reporting period.

4. Other material contracts

□ Applicable  √ Not applicable

No other material contracts for the Company in reporting period

29

司公限有份股心中游旅海东大南海                                   2017 文全告报度年年

XVIII. Social responsibility

1. Social responsibilities

Nil

2. Execution of social responsibility of targeted poverty alleviation

(1) Precision poverty alleviation program

(2) Annual precision poverty alleviation

(3) Accuracy of poverty alleviation

(4) Follow-up targeted poverty alleviation plans

Nil

3. Environmental protection

Listed company and its subsidiary belongs to the key pollution enterprise listed by Department of Environmental Protection

No

Nil

XIX. Explanation on other significant events

√Applicable □ Not applicable

1. On 8 March 2001, the Company received a written decision of administrative penalty ZJFZi [2001] No.3 “Penalty Decision on

Hainan Dadonghai Tourism Center (Holdings) Co., Ltd. in Violation of Securities Laws and Regulations” from CSRC for false profit

and rule-violation. Penalty including confiscate their illegal income of 19.31 million Yuan and impose a fine of 0.5 million Yuan. On

20 February 2017, the Company paid the penalty in full to CSRC.

2. The Lawyer’s Letter received by the Company: by preliminary accounting from Sanya Power Bureau, the 10313373 Kwh

electricity was understated under the name of South China Hotel from July 2006 to April 2016. Found more in “Notice of Lawyer’s

Letter received by Hainan Dadonghai Tourism Center (Holdings) Co., Ltd.”   (Notice No.: 2016-016) released on Securities Times,

Hong Kong Commercial Daily and Juchao Website dated 31 May 2016. The Company is communicated and negotiates with Sanya

Power Bureau in the above mentioned event without negotiation results so far.

XX. Significant event of subsidiary of the Company

□ Applicable √ Not applicable

30

司公限有份股心中游旅海东大南海                                     2017 文全告报度年年

Section VI. Particulars about Changes in Shares and Shareholders

I. Changes in Share Capital

1. Changes in Share Capital

In Share

Before the Change     Increase/Decrease in the Change (+, -)      After the Change

Capita

Bon  lizatio

New

Propor       us   n of                       Proportio

Amount         shares           Others   Subtotal   Amount

tion       shar public                         n

issued

es  reserv

e

I. Restricted shares       10,455,687   2.87%                -1,287    -1,287  10,454,400     2.87%

1. State-owned shares

2. State-owned corporate

2,369,400 0.65%               -46,200   -46,200   2,323,200     0.64%

shares

8,086,287 2.22%                44,913   44,913   8,131,200     2.23%

3. Other domestic shares

Including: Domestic

7,953,000 2.18%               -132,000   -132,000   7,821,000     2.15%

legal person shares

Domestic natural person

133,287  0.04%               176,913   176,913     310,200   0.09%

shares

97.13

II. Unrestricted shares     353,644,313                     1,287    1,287  353,645,600    97.13%

%

72.96

265,644,313                     1,287    1,287  265,645,600    72.96%

1. RMB common shares                 %

2.Domestically     listed           24.17

88,000,000                         0     0  88,000,000    24.17%

%

foreign shares

100.00

III. Total shares        364,100,000                         0     0 364,100,000   100.00%

%

Reasons for share changed

√ Applicable   □ Not applicable

And during the follow-up process of non-tradable shares reform, relevant shares are released in line with relevant

regulations and some of the shareholders are repaying the advance money for another, thus the share structure of

the Company changed in the Period while total shares remain the same.

Approval of share changed

□ Applicable √ Not applicable

31

司公限有份股心中游旅海东大南海                                   2017 文全告报度年年

Ownership transfer of share changes

□ Applicable √ Not applicable

Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to common

shareholders of Company in latest year and period

□ Applicable √ Not applicable

Other information necessary to disclose or need to disclosed under requirement from security regulators

□ Applicable √ Not applicable

2. Changes of restricted shares

√ Applicable □ Not applicable

In Share

Number of   Number

shares    of   Number of   Number of

restricted  shares  new shares    shares     Restriction

Shareholders’ name                                           Released date

at   released  restricted  restricted at   reasons

Period-beg   in the  in the Year  Period-end

in     Year

Legal

After remove restricted

Xiao Tiefeng            132,000     0       0   132,000   commitment in

procedures complete

share reform

Legal

Sanya Real Estate Valuation                                       After remove restricted

924,000     0       0   924,000   commitment in

Agent                                                  procedures complete

share reform

Hainan Hong Kong-Macao                                 Legal

After remove restricted

International Trade         924,000     0       0   924,000   commitment in

procedures complete

Development Co., Ltd.                                  share reform

Legal

Haikou Dongfang Urban                                          After remove restricted

924,000     0       0   924,000   commitment in

credit Cooperative                                           procedures complete

share reform

Legal

Hainan Branch of Bank of                                         After remove restricted

924,000     0       0   924,000   commitment in

Communications Co., Ltd.                                         procedures complete

share reform

Legal

Shenyang Jin’an Industrial                                       After remove restricted

831,600     0       0   831,600   commitment in

Corporation                                               procedures complete

share reform

Legal

Sanya Wangli Building                                          After remove restricted

92,400     0       0    92,400   commitment in

Materials Sales                                             procedures complete

share reform

Guangzhou Company of                                   Legal

After remove restricted

Hainan International        660,000     0       0   660,000   commitment in

procedures complete

Investment Co., Ltd.                                   share reform

32

司公限有份股心中游旅海东大南海                                   2017 文全告报度年年

Legal

Southern Industrial and                                         After remove restricted

660,000   0         0   660,000  commitment in

Trading Corporation                                           procedures complete

share reform

Legal

Guangzhou Dongzhan                                           After remove restricted

924,000   0         0   924,000  commitment in

Industrial Co. LTD                                           procedures complete

share reform

Legal

Sanya Zhongxing                                             After remove restricted

2,541,000   0         0  2,541,000 commitment in

Development Co., Ltd.                                         procedures complete

share reform

Legal

Hainan Dadonghai Tourism                                        After remove restricted

739,200   0         0   739,200  commitment in

Co.                                                   procedures complete

share reform

Legal

After remove restricted

Ma Xiaoping             132,000   0         0   132,000  commitment in

procedures complete

share reform

Legal

After remove restricted

Zheng Youxiong             46,200 0         0   46,200  commitment in

procedures complete

share reform

Total               10,454,400   0         0 10,454,400     --           --

II. Securities issuance and listing

1. Security offering (without preferred stock) in reporting Period

□ Applicable √ Not applicable

2. Changes of total shares and shareholders structure as well as explanation on changes of assets and

liability structure

□ Applicable √ Not applicable

3. Existing internal staff shares

□ Applicable √ Not applicable

III. Particulars about shareholder and actual controller of the Company

1. Amount of shareholders of the Company and particulars about shares holding

In Share

Total common            Total common         Total preference         Total preference

21,624             21,624                 0                 0

stock shareholders         stock             shareholders           shareholders with

33

司公限有份股心中游旅海东大南海                                     2017  文全告报度年年

in reporting           shareholders at          with voting            voting rights

period-end             end of last month         rights recovered         recovered at end of

before annual           at end of             last month before

report disclosed         reporting period         annual report

disclosed

Particulars about shares held above 5% by shareholders or top ten shareholders

Number of

share

Amoun

pledged/fr

Number of           t of   Amount of

Proportio          Changes                   ozen

Nature of     n of   shares held         restrict   un-restricte

Full name of Shareholders                             in report                     A

shareholder   shares      at           ed     d shares

held             period                State   m

period-end         shares     held

of   o

held

share   u

nt

Domestic non

Luoniushan Co., Ltd.       state-owned      17.55%   63,885,980   2370610       0 63,885,980

corporate

Domestic nature

Pan Guoping                        8.48%   30,879,791   0           0 30,879,791

person

HGNH International Asset

Management Co., Ltd –       Foreign corporate   2.29%     8,327,502 2468200       0  8,327,502

customer deposit

First Shanghai Securities

Foreign corporate   2.28%     8,297,473 -1255325       0  8,297,473

Limited

Domestic non

Hainan Ya’an Residence Property

state-owned       2.25%     8,205,800 8205800       0  8,205,800

Service Co., Ltd.

corporate

Domestic nature

Jiang Shuntou                       1.80%     6,570,600 6570600       0  6,570,600

person

Domestic nature

Hu Jianguo                         1.71%     6,227,640 564700        0  6,227,640

person

Domestic non

Wan Hua Tianzhi Investment

state-owned       1.45%     5,277,400 5277400       0  5,277,400

and Development Co., Ltd.

corporate

China Investment Securities

(HK) Co., Ld. – customer     Foreign corporate   1.30%     4,722,300 1090000       0  4,722,300

deposit

Domestic nature

Zhang Fengxiu                       1.07%     3,901,372 0           0  3,901,372

person

34

司公限有份股心中游旅海东大南海                                     2017 文全告报度年年

Strategy investors or general legal person becomes

N/A

top 10 shareholders due to rights issued

Among the above shareholders, Hainan Ya’an Residence Property Service

Co., Ltd. is the wholly-owned subsidiary of Luoniushan Co., Ltd. The

Explanation on associated relationship or accordant   Company is unknown whether there exists associated relationship or belongs

action among the aforesaid shareholders         to the consistent actor regulated by the Management Measure of Information

Disclosure on Change of Shareholding for Listed Company among the other

shareholders.

Particular about top ten shareholders with un-restrict shares held

Amount of un-restrict shares        Type of shares

Shareholders’ name

held at Period-end         Type        Amount

RMB common

Luoniushan Co., Ltd.                               63,885,980                63,885,980

share

Domestically listed

Pan Guoping                                    30,879,791                30,879,791

foreign share

HGNH International Asset Management Co., Ltd –                         RMB common

8,327,502                 8,327,502

customer deposit                                         share

Domestically listed

First Shanghai Securities Limited                         8,297,473                 8,297,473

foreign share

RMB common

Hainan Ya’an Residence Property Service Co., Ltd.                 8,205,800                 8,205,800

share

RMB common

Jiang Shuntou                                   6,570,600                 6,570,600

share

RMB common

Hu Jianguo                                     6,227,640                 6,227,640

share

RMB common

Wan Hua Tianzhi Investment and Development Co., Ltd.                5,277,400                 5,277,400

share

China Investment Securities (HK) Co., Ld. – customer                      RMB common

4,722,300                 4,722,300

deposit                                             share

RMB common

Zhang Fengxiu                                   3,901,372                 3,901,372

share

Among the above shareholders, Hainan Ya’an Residence Property

Service Co., Ltd. is the wholly-owned subsidiary of Luoniushan Co., Ltd.

Expiation on associated relationship or consistent actors

The Company is unknown whether there exists associated relationship or

within the top 10 un-restrict shareholders and between

belongs to the consistent actor regulated by the Management Measure of

top 10 un-restrict shareholders and top 10 shareholders

Information Disclosure on Change of Shareholding for Listed Company

among the other shareholders.

Explanation on shareholders involving margin business

N/A

about top ten common stock shareholders with

35

司公限有份股心中游旅海东大南海                                     2017  文全告报度年年

un-restrict shares held

Whether top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held have a buy-back

agreement dealing in reporting period

□ Yes √ No

The top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held of the Company have no

buy-back agreement dealing in reporting period.

2. Controlling shareholder of the Company

Nature of controlling shareholders: community collective holding

Type of controlling shareholders: legal person

Legal

person/person   Date of  Organizatio

Controlling shareholders                                  Main operation business

in charge of   foundation   n code

the unit

Planting and breeding industry; initiating

industry; real estate development and

management; building decoration works;

sales of agricultural and animal by-products,

aquatic products and feed

Unified     processing(operates only for branch with

voucher); machinery and automobile and

social credit  motorcycle parts, electronic products, metal

1987-12-1

Luoniushan Co., Ltd.           Xu Zili            code       materials (except for the monopoly),

9

914600028    chemical products (except for the

monopoly)), household appliances, modern

4089747P

office supplies, stationery, daily necessities,

building materials, sales of agricultural and

native products; the development and

construction of trading market; leasing

services; warehousing services; collecting

and remitting water and electricity costs.

Equity of other domestic/oversea

listed   company   control  by  Found more details in full text of Annual Report 2017 of Luoniushan Co., Ltd.(Short form

controlling shareholder as well as    of the stock: Luoniushan, Stock code: 000735)

stock-joint in report period

Changes of controlling shareholders in reporting period

□ Applicable √ Not applicable

The Company had no changes of controlling shareholders in reporting period

3. Actual controller of the Company

Nature of actual controller: domestic natural person

Type of actual controller: natural person

Whether obtained right of residence of other countries or

Name of actual controller          Nationality

regions or not

Xu Zili                     P.R.C           No

36

司公限有份股心中游旅海东大南海                                   2017 文全告报度年年

Xu Zili, male, was born in 1966, is a senior engineer with a master degree. He

successively served as Vice President of Hubei Huangshi Mine Bureau Machinery;

General Manager of Haikou Animal Husbandry Machinery Engineering Co., Ltd.;

Chairman of Tianjin Baodi Agricultural Technology Co., Ltd.; he also served as

Main profession and title

standing committee of the Haikou 13th CPPCC; Vice Chairman and General Manager of

the Company from August 2006 to November 2011; serves as Chairman of the

Company since November 2011; now he takes as the 7th CPPCC member of Hainan

Province.

Listed company in and out of China

N/A

controlled in past decades

Changes of actual controller in reporting period

□ Applicable √ Not applicable

No changes of actual controllers for the Company in reporting period.

Property right and controlling relationship between the actual controller and the Company is as follow:

Actual controller controlling the Company by entrust or other assets management

□ Applicable √ Not applicable

37

司公限有份股心中游旅海东大南海                       2017 文全告报度年年

4. Particulars about other legal person shareholders with over 10% shares held

□ Applicable √ Not applicable

5. Limitation and reducing the holdings of shares of controlling shareholders, actual controllers,

restructuring side and other commitment subjects

□ Applicable √ Not applicable

38

司公限有份股心中游旅海东大南海                 2017 文全告报度年年

Section VII. Preferred Stock

□ Applicable √ Not applicable

The Company had no preferred stock in the Period.

39

司公限有份股心中游旅海东大南海                                    2017 文全告报度年年

Section VIII. Particulars about Directors, Supervisors, Senior

Executives and Employees

I. Changes of shares held by directors, supervisors and senior executives

Amount     Amount         Shares

Shares                   Other

of shares   of shares        held at

held at                   chang

Working         Start dated                 increase    decreased        period

End date of

Title         Sex Age  of office         period-be                   es

Name           status               office term         d in this    in this         -end

term

gin                     (share

period     period         (Share

(Share)                    )

(Share)     (Share)          )

Li     Chairman,   Currently

General         M   67 2001-10-25   2017-05-22       0       0        0     0     0

Yuanbin   Manager   in office

Zhao    Independent  Currently

F   65 2014-05-22   2017-05-22       0       0        0     0     0

Man     Director   in office

Tang    Independent  Currently

M   53 2014-05-22   2017-05-22       0       0        0     0     0

Guoping   Director   in office

Leng    Independent  Currently

M   62 2014-05-22   2017-05-22       0       0        0     0     0

Mingquan   Director   in office

Liu            Currently

Director         M   49 2002-06-16   2017-05-22       0       0        0     0     0

Juntao           in office

Chairman

Huang   of       Currently

M   48 2002-06-16   2017-05-22       0       0        0     0     0

Wencai   supervisory  in office

committee

Wang           Currently

Supervisor         F   51 2011-06-16   2017-05-22       0       0        0     0     0

Jialing          in office

Person in

Fu             Currently

charge of         M   50 2015-04-15   2017-05-22       0       0        0           0

Zongren          in office

finance

Director &

Vice

Wang           Currently

president &        F   41 2008-04-27   2017-05-22       0       0        0     0     0

Hongjuan         in office

secretary of

the Board

Chen           Currently

Supervisor         M   52 2016-07-29   2017-05-22    1287         0        0     0   1287

Gang           in office

40

司公限有份股心中游旅海东大南海                               2017 文全告报度年年

Total       --       -- --  --    --      --     1287     0       0   0   1287

II. Changes of directors, supervisors and senior executives

□ Applicable √ Not applicable

III. Post-holding

Professional background, major working experience and present main responsibilities in Company of directors, supervisors and

senior executive

Directors

Mr. Li Yuanbin: born in June 1950, Han nationality, Master degree, MBA degree, senior engineer. He once held

the position of Chairman of Board of Haikou Haiyuan Co. Ltd and Yangpu Tiandi Sunshine Industry Co., Ltd,

director and general manager of the Company, now he is chairman of the Board and general manager, vice

chairman of Hainan Entrepreneurs’ Association, and permanent member of Hainan Federation of Industry

Chamber of Industry & Commerce and Vice-president of Hainan Provincial Association for Beverages Hotels and

Food, and Vice-president of Hubei Commerce Association in Hainan Province.

Mr. Liu Juntao: born in Oct. 1968, Han nationality, EMBA of China Europe International Business School. Mr.

Liu once held the position of deputy director of Construction Bank branch, secretary of the Board of Director of

Luoniushan Co. Ltd., Deputy General Manager of the Company and Deputy General Manager of Softto Co., Ltd.,

assistant president and Secretary of the Board of Tianmao Industry Group Co., Ltd., currently holds the post of

Assistant President of AXA Insurance Co., Ltd. and serve as director of the Company since 2002.

Ms. Wang Hongjuan, was born in Feb. 1976, Han nationality, Undergraduate Degree, an attorney; she served as

representative of securities affairs of the Company since 2004 and serves as secretary of the Board since 2008 and

deputy GM of the Company since 2014. and serves as Director of the Company since 2016.

Independent Directors

Ms. Zhao Man, born in February 1952, member of the CPC, Doctor of Economic, a professor and doctorial tutor.

Professional affiliations so far: member of social sciences commission of the Ministry of Education, committee of

experts member of the MHRSS, committee of experts member of the Ministry of Civil Affairs, director of

academic council of the Center for Social Security Study of Wuhan University, the key research center for social

sciences by CECC, standing director of The China Association for Labor Studies, standing director of China

Social Insurance Association, member of Advisory Committee of Hubei Provincial Peoples Government,

decision-support expert of CPC Hubei Provincial Committee, consultant expert of budget expert group for the

Wuhan People’s Congress Standing Committee and member of Expert Consultation Committee of CPC Hubei

Provincial Committee Organization Department. Now she serves as independent director of Hubei Kaile

Technology Co., Ltd. , Mayinglong Pharmaceutical Group Co., Ltd., and Wuhan Mingde Biological Technologies

41

司公限有份股心中游旅海东大南海                           2017 文全告报度年年

Co., Ltd. and she took post as independent director of the Company since May 2014.

Mr. Tang Guoping, born in August 1964, graduated from Zhongnan University of Economics and Law. Hold

Doctor Degree, a professor, Chinese CPA and member of CPC. He serves as professor in Zhongnan University of

Economics and Law-School of Accounting, the director of Chinese Accounting Society, and serves as

independent director of Cabio Biotechnology (Wuhan) Co., Ltd., Shengang Securities Co., Ltd., Shenzhen

ShenZhuangZong Decoration Co., Ltd., and Wuhan Boiler Co., Ltd. He participated in (2012) the China

Securities Regulatory Commission independent director training, and obtained the post qualification. He serves as

independent directors of the Company since May 2014.

Mr. Leng Mingquan, born in April 1955, on-job graduate and Master of Administration. He was secretary and

section chief of CPC Suizhou Municipal propaganda Department and director of Haikou Office of the Suizhou

Government. Now he serves as executive vice president, secretary and legal representative of the Confederation of

Hainan Enterprise and Hainan Association of Entrepreneurs; executive chairman of Hainan labor relations

tripartie meeting; inspector of Hainan Procuratorate; police-style inspector of Hainan Provincial Public Security

Department; specially-invited inspector of Hainan Provincial Supervision Department; member of Hainan

Provincial Literature Dederation; member of Hainan Federation of Social Science; member of Hainan Provincial

Arbitration Committee; director of Hainan Enterprise Credit Evaluation Administration; Chairman of Hainan

Dashun Movie & TV Cultural Communication Co., Ltd.; independent director of Nanyang Shipping Group Co.,

Ltd. He serves as independent directors of the Company since May 2014.

Supervisors

Mr. Huang Wencai: was born in Jan. 1969, undergraduate degree, Mr. Huang once held the position of vice

director of Haikou meat association factory, director of Haikou food Co. Ltd. and assistant of general manager of

Haikou food Co. Ltd., deputy GM of Haikou Luoniushan Food Processing Co., Ltd. and currently held the post of

deputy GM of Hainan Luoniushan Meat Co., Ltd.; he held the position of Chairman of Supervisory Committee of

the Company since 2002.

Ms. Wang Jialing: was born in February 1966, once served as accountant of financial dept of the Company; serves

as deputy manager of the financial department of the Company. She serves as staff supervisor of the Company

since 2011.

Mr. Chen Gang, born in September 1966, the Han nationality, a junior accountant. He worked as accountant in

Hainan Sanya Phoenix Co., Ltd. from February 1988 to June 1989, worked as chief accountant in Sanya

Hardware Electrical Mall from July 1989 to September 1992, and serves as cost accounting, chief accountant,

deputy GM and GM of the financial dept. in the Company since October 1992. He serves as staff supervisor of the

42

司公限有份股心中游旅海东大南海                                   2017 文全告报度年年

Company since August 2016.

Senior executives

Mr. Fu Zongren, born in February 1967, intermediate accountant, served as financial manager of the Company,

financial controller of Sanya Yalong Bay Universal Resort, and general manager of Financial Management Center

of Hainan Sunup Group, and serves as the financial administrator of the Company since April 2015.

Post-holding in shareholder’s unit

□ Applicable √ Not applicable

Post-holding in other unit

□ Applicable √ Not applicable

Punishment of securities regulatory authority in recent three years to the company’s current and outgoing directors, supervisors and

senior management during the reporting period

□ Applicable √ Not applicable

IV. Remuneration for directors, supervisors and senior executives

Decision-making procedures, recognition basis and payment for directors, supervisors and senior executives

1. Pursuant to the Company's Articles of Association, the pay of directors, supervisor personnel are approved by

general meeting after the review of the board of directors and board of supervisors respectively; the pay of senior

management is approved by the board. Directors, supervisors and senior managers get their payment

corresponding to their post provided by the general meeting and the board meeting.

2. In line with performance of their duties, directors, independent directors and supervisors should receive the

reimbursement from the Company on travel expense and Articles of Association implementation expense.

Remuneration for directors, supervisors and senior executives in reporting period

In 10 thousand Yuan

Total remuneration obtained         Whether

Post-hold

Name       Title       Sex Age         from the Company (before     remuneration obtained from

ing status

taxes)         related party of the Company

Li

Chairman     &           Currently

Yuanbi             M     67                     67.1 No

CEO                  in office

n

Zhao   Independent              Currently

F     65                     4.8 No

Man    Director               in office

Tang

Independent              Currently

Guopin             M     53                     4.8 No

Director               in office

g

Leng

Independent              Currently

Mingq              M     62                     4.8 No

Director               in office

uan

43

司公限有份股心中游旅海东大南海                                  2017 文全告报度年年

Liu                         Currently

Director     M      49                     4.8 No

Juntao                       in office

Director,

Wang

Secretary of the           Currently

Hongju              F      41                    44.48 No

Board and              in office

an

Deputy GM

Huang                       Currently

Supervisor     M      48                     2.4 No

Wencai                       in office

Chen                        Currently

Supervisor     M      51                    11.78 No

Gang                        in office

Wang                        Currently

Supervisor     F      51                     9.77 No

Jialing                       in office

Fu

Currently

Zongre     CFO        M      50                    33.84 No

in office

n

Total         --       --   --     --               188.57         --

Delegated equity incentive for directors, supervisors and senior executives in reporting period

□ Applicable √ Not applicable

V. Particulars of workforce

1. Number of staff, professional composition and education background

The number of current employees of parent company (people)                                 145

The number of current employees of main subsidiaries

0

(people)

Total number of current employees (people)                                         145

The total number of current employees to receive pay (people)                               145

The total number of retired staff and workers that the parent

company and main subsidiaries need to bear the costs                                   0

(people)

Professional composition

Category of professional composition            Number of professional composition (people)

Production staff                                                      80

Salesman                                                           6

Technical staff                                                       22

Financial staff                                                       12

Administrative staff                                                    25

44

司公限有份股心中游旅海东大南海                               2017 文全告报度年年

Total                                                       145

Education background

Category of education                    Number (people)

Graduate student                                                   3

Undergraduate                                                     6

Junior college above                                                 30

High shool and below                                                106

Total                                                       145

2. Remuneration policy

The compensation of company’s employees includes wages, bonuses, and benefits, which take the principle of

distributing according to the work, giving priority to efficiency and taking count of equity simultaneously, wage

increase adapting to the company’s business development and benefits improvement, optimizing the labor

allocation, pay level agreeing with the local average in the same industry. Set or adjust the wage standards in

accordance with the job valuation result, the local pay level in the same industry, the company’s annual operation

target and operational budget, and the individual performance.

3. Training programs

Strengthen the training of senior executives by combining the voluntary organization of training and the external

training, widen the thought, and enhance the decision-making ability and modern operation and management

ability. Strengthen the training of middle management, improve the overall quality of managers, improve the

knowledge structure, and enhance the comprehensive management capability, innovation capability and

implementation capability. Strengthen the training of professional and technical personnel, improve the theoretical

level of technology and professional skills, and enhance the technological innovation, technical transformation

capability. Strengthen the technical training of hotel service staff, constantly improve the professional skills and

service skills of service staff, and enhance the ability to strictly fulfill their responsibilities. Strengthen the cultural

training, improve the cultural level of personnel at all levels, and enhance the overall cultural quality of the staff

team.

4. Labor outsourcing

□ Applicable  √ Not applicable

45

司公限有份股心中游旅海东大南海                                   2017 文全告报度年年

Section IX. Corporate Governance

I. Corporate governance of the Company

During reporting period, the Company further completed governance structure and system, perfected internal

control mechanism and system construction and normalized corporate operation, strictly in accordance with

relative rules and regulations of the Company Law, Securities Law and Listing Rules. Till end of reporting period,

governance structure of the Company is basically in line with requirement of the Governance Rules of Listed

Company.

1. During the reporting period, the Company’s general meeting, board meeting and supervisors meeting exercised

the decision rights, execution rights and supervision rights respectively with clear responsibilities, mutual restrict,

operation specification and effective operation. The procedures of meeting holding, proposal review, and

decision-making in these three meetings were in compliance with relevant provisions. The board meeting

comprises strategy and development committee, audit committee, nomination committee, remuneration and

appraisal committee, who carry out smoothly their duties accordingly to their working conditions, providing a

strong support for the board meeting’s major scientific management decision.

2. In strict accordance with the requirements of Rules Governing the Listing of Stock, directors performed its

duties with honest, trust, diligence and independence, protected the legitimate rights and interests of minority

shareholders with loyalty to their interests; Supervisors effectively supervised and checked independent directors,

senior management and their financial situations.

Is there any difference between the actual condition of corporate governance and relevant regulations about corporate governance for

listed company from CSRC?

□Yes √ No

There are no differences between the actual condition of corporate governance and relevant regulations about corporate governance

for listed company from CSRC.

II. Independency of the Company relative to controlling shareholders’ in aspect of businesses,

personnel, assets, organization and finance

Statement of Five Independences between the Company and the Controlling Shareholders

1. Business Independence: the Company business operates independently with integrated structure, and is free

from horizontal competition with controlling shareholders. The controlling shareholders do not intervene the

Company’s operation either directly or indirectly.

2. Personnel Independence, the Company is independent on controlling shareholders in the aspects of labor,

personnel and Remuneration management.

3. Assets Independence: the Company has proprietary rights and control rights on its assets. Controlling

shareholders occupy no assets or funds of the listed company.

4. Institution Independence: the company's board of directors and board of supervisors, managers and other

46

司公限有份股心中游旅海东大南海                                 2017 文全告报度年年

internal institutions operate independently and manage independently with integrated structures.

5. Financial Independence: the Company has an independent financial sector, and sets up independent accounting

system and financial management system. The Company opens independent bank accounts and pay independent

taxes to laws without controlling shareholders’ intervention.

III. Horizontal competition

□ Applicable √ Not applicable

IV. In the report period, the Company held annual shareholders’ general meeting and

extraordinary shareholders’ general meeting

1. Annual Shareholders’ General Meeting in the report period

Ratio of

Session of         investor           Date of

Type            Date                     Index of disclosure

meeting         participati        disclosure

on

The “Resolution Notice of Annual Shareholders’ General Meeting

Annual

Annual general                     2017-04-2   of 2016” (No.: 2017-027) published on Securities Times, Hong

general    26.37%   2017-04-21

meeting 2016                       2       Kong Commercial Daily and Juchao website

meeting

(http://www.cninfo.com.cn) dated 22 April 2017 respectively

First       Extraord

The “Resolution Notice of First Extraordinary Shareholders

Extraordinary   inary

2017-05-1   Meeting of 2017” (No.: 2017-038) published on Securities Times,

Shareholders   sharehol    9.48%   2017-05-12

3       Hong Kong Commercial Daily and Juchao website

Meeting of    ders

(http://www.cninfo.com.cn) dated 13 May 2017 respectively

2017       meeting

Second      Extraord

The “Resolution Notice of Second Extraordinary Shareholders

Extraordinary   inary

2017-07-1   Meeting of 2017” (No.: 2017-057) published on Securities Times,

Shareholders   sharehol    9.47%   2017-07-12

3       Hong Kong Commercial Daily and Juchao website

Meeting of    ders

(http://www.cninfo.com.cn) dated 13 July 2017 respectively

2017       meeting

Third       Extraord

The “Resolution Notice of Third Extraordinary Shareholders

Extraordinary   inary

2017-11-1   Meeting of 2017” (No.: 2017-087) published on Securities Times,

Shareholders   sharehol   29.28%   2017-11-10

1       Hong Kong Commercial Daily and Juchao website

Meeting of    ders

(http://www.cninfo.com.cn) dated 11 September 2017 respectively

2017       meeting

Fourth      Extraord

The “Resolution Notice of Fourth Extraordinary Shareholders

Extraordinary   inary

2017-12-2   Meeting of 2017” (No.: 2017-095) published on Securities Times,

Shareholders   sharehol   22.79%   2017-12-22

3       Hong Kong Commercial Daily and Juchao website

Meeting of    ders

(http://www.cninfo.com.cn) dated 23 December 2017 respectively

2017       meeting

47

司公限有份股心中游旅海东大南海                                     2017 文全告报度年年

2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore

□ Applicable   √ Not applicable

V. Responsibility performance of independent directors

1. The attending of independent directors to Board meetings and general meeting

The attending of independent directors to Board Meeting

Name of     Times of Board

Times of       Times of

independ   meeting supposed     Times of                       Times of   Absent the Meeting for the

attending by     entrusted

ent     to attend in the   Presence                       Absence    second time in a row (Y/N)

communication     presence

director     report period

Zhao

12       1         11         0      0 No

Man

Tang

12       1         11         0      0 No

Guoping

Leng

Mingqua              12       1         11         0      0 No

n

Times for attending general

meeting   from   independent                                                     5

directors

2. Objection for relevant events from independent directors

Independent directors come up with objection about Company’s relevant matters

√ Yes □No

Name of independent           Objection from independent directors                Objection items

director

Major assets purchasement and Report of Related        The major assets restructuring has major risks, the

Zhao Man           Transactions (Plan) and etc.                 Company do not have enough debt repayment

capacity

Major assets purchasement and Report of Related        Currently, the plan has many risks in

Transactions (Plan) and etc.                 implementation, the Company do not has

Tang Guoping                                        correspondingly payment ability. Though we need

the restructures for future development, relevant

risks are unable to control

Major assets purchasement and Report of Related        Immature conditions

Leng Mingquan

Transactions (Plan) and etc.

Explanation on       Found more in “Resolution Notice of 11th extraordinary meeting of 8th BOD” (Notice No.: 2017-066) released

objections from       on Securities Times, Hong Kong Commercial Daily and Juchao Website dated 14 August 2017

independent directors

48

司公限有份股心中游旅海东大南海                            2017 文全告报度年年

3. Other explanation about responsibility performance of independent directors

The opinions from independent directors have been adopted

√ Yes □ No

Explanation on advice that accepted/not accepted from independent directors

It is suggested that the Company should strengthen the introduction of foreign capital, introduce excellent assets

and diversify the current single business portfolio in addition to focusing on its major operations. The Company's

stock commenced suspension of trading from the opening session on 15 February 2017 as it planned to fulfill its

commitments. On 13 August 2017, 12 proposals relating to Material Asset Acquisition and Connected Transaction

Report (Plan) of Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd. were denied at the 11th extraordinary

general meeting of the 8th session of board of directors of the Company. On 15 August 2017, the Company

announced to terminate this restructuring relating to material assets acquisition, and the stock of the Company

commenced trading since 17 August 2017.

VI. Duty performance of the special committees under the board during the reporting period

The board meeting comprises four special committees, who carry out smoothly their duties accordingly to their

working conditions, providing a strong support for the board meeting’s major scientific management decision.

Each special committee performed their duties as follows:

1. Audit Committee

During the reporting period, the audit committee audited the first quarter and the three quarter financial report of

2017, and the 2017 semi-annual financial report. In the process of annual financial report auditing 2017 process,

audit committee members worked in accordance with the relevant requirements by faithfully performing audit

committee’s responsibilities:

Before the entrance of annual examination certified public accountants, the audit committee members listened to

the management statements of the Company's operating condition in 2017 and the financial status as well as the

report on annual financial report audit work arrangement of 2017, communicated with annual examination

certified public accountants about issues such as personnel structure of the working group, audit plan, risk

judgment, annual audit focus and so on; In early January 2017, in annual report audit process, audit committee

members listened to the work report by annual examination certified public accountants and the company

management; In late January 2017, audit committee members reviewed submitted financial and accounting reports.

The financial and accounting reports audited was formatted strictly to Accounting Standards for Business

Enterprises and Accounting System for Business Enterprises, and this report fairly reflected the Company’s assets,

liabilities, rights and interests and operating situation without significant errors and omissions. The annual audit

report of 2017 by audit institutions was agreed to be submitted to the board.

The Company's board of directors regarded that the external auditors Lixin Certified Public Accountants (special

ordinary partnership) faithfully performed the audit responsibility, and suggested to renew as the Company’s

annual financial audit of 2018.

2. Remuneration committee

49

司公限有份股心中游旅海东大南海                                   2017 文全告报度年年

During the reporting period, the remuneration committee members of the Company board carried out their duties

strictly to relevant regulations, inspected remuneration policies and programs for directors, supervisors and senior

managers, and appraised the performance of directors, supervisors and senior management according to senior

manager remuneration appraisal. By the end of the reporting period, the Company has not implemented option

scheme.

3. Strategy committee

During the reporting period, the board strategy committee put forward valuable opinions on decision-making such

as development planning and investment decisions, thus enhanced the scientific decision-making and core

competitiveness of the Company, improved the Company’s efficiency of major investment decisions and decision

quality.

4. Nomination committee

During the reporting period, the company did not have the nomination.

VII. Works from Supervisory Committee

The Company has risks in reporting period that found in supervisory activity from supervisory committee

□ Yes √ No

Supervisory committee has no objection about supervision events in reporting period

VIII. Examination and incentives of senior management

1. Pursuant to People-oriented Principle, the Company employs outstanding persons in long-term, and admits the

best candidates on the premise of openness, fairness, justice. Those who pass trial comprehensive appraisal and be

nominated by general managers and approved by the board meeting can be employed as senior management of the

Company.

2. The Company adopts a clear appraisal system in which assessment methods are made to the performance and

duty fulfillment of senior management. Assessments are carried out monthly and annually by the same level and

higher level and the results are taken as factors for post lift and rewards and punishment of senior management.

3. The company sets up effective incentive mechanism, including material incentives and spiritual incentives. The

clear rewards and punishments, balance between remuneration and work performance, survival of fittest

encourage senior management to make constantly progress and improve their own comprehensive ability which in

turn help the Company develop rapidly.

IX. Internal Control

1. Details of major defects in IC appraisal report that found in reporting period

□ Yes √ No

2. Appraisal Report of Internal Control

Disclosure date of full internal control evaluation report        2018-02-01

Disclosure index of full internal control evaluation report       Relevant information found in Self-evaluation Report of

50

司公限有份股心中游旅海东大南海                                         2017 文全告报度年年

Internal Control for 2017 published on Juchao Website dated 1

February 2018.

The ratio of the total assets of units included in the scope of evaluation

accounting for the total assets on the company's consolidated financial                                   100.00%

statements

The ratio of the operating income of units included in the scope of

evaluation accounting for the operating income on the company's                                       100.00%

consolidated financial statements

Defects Evaluation Standards

Category                Financial Reports                   Non-financial Reports

Major deficiencies: the company is lack of democratic

Major deficiencies: fraud of directors,

decision-making     process;   the   company’s

supervisors   and   senior   management;

decision-making process leads to major mistakes; the

material misstatements are found in current

company violates the state laws and regulations and is

financial statements by the certified public

severely   punished; serious  brain drain  of the

accountant but are not found in the process

company’s senior management personnel and senior

of internal control; the supervision of the

technical staff; frequent negative news on media

audit committee to the company’s external

covering a wide range and the negative effects are not

financial reports and internal control of

eliminated; the company’s significant business is lack

financial reports is invalid.

of system control or systematic-ness is invalid; the

Significant deficiencies: the selection and

major deficiencies and significant deficiencies of the

application of accounting policies are not in

company’s internal controls have not been rectified and

accordance with the GAAP; anti-fraud

reformed; the company is punished by CSRC or

program and control measures have not

Qualitative criteria                                   warned by stock exchange.

been established; the accounting treatment

Significant deficiencies: the company has democratic

of unusual or special transactions has no

decision-making process which is not complete; the

appropriate control mechanisms or have not

company’s decision-making process leads to general

implemented the control mechanisms and

mistakes; the company violates the enterprise internal

has no appropriate compensatory controls;

regulations which causes losses; serious brain drain of

the control to period-end financial reporting

the company’s business personnel in key positions;

process has one or more deficiencies and

negative news on media affecting local areas; the

cannot   reasonably   ensure   that   the

company’s   significant   business  system   has

organizational financial statements are true

deficiencies; the significant deficiencies and general

and accurate.

deficiencies of the company’s internal controls have

General deficiencies: other internal control

not been rectified and reformed;

deficiencies do not constitute major or

General deficiencies: other internal control deficiencies

significant deficiencies.

do not constitute major or significant deficiencies.

Major deficiencies:   misstatements ≥ 10%    Major deficiencies:   misstatements ≥ direct property

of total profits;                   loss of 100,000 Yuan;

Quantitative standard        Significant deficiencies: 5% of total profits     Significant deficiencies: direct property loss of 10,000

≤ misstatements <10% of total profits;       Yuan ≤ misstatements < direct property loss of 100,000

General deficiencies: misstatements <5% of      Yuan;

51

司公限有份股心中游旅海东大南海                                       2017 文全告报度年年

total profits.                  General deficiencies: misstatements < direct property

loss of 10,000 Yuan.

Amount of significant defects in

0

financial reports

Amount of significant defects in

0

non-financial reports

Amount of important defects in

0

financial reports

Amount of important defects in

0

non-financial reports

X. Auditing report of internal control

√Applicable □ Not applicable

Deliberations in Internal Control Audit Report

To All Shareholders of Hainan Dadonghai Tourism Center (Holdings) Co., Ltd.:

In accordance with Audit Guideline for Enterprise Internal Control and relevant requirement of the practicing standards of Chinese

Certified Public Accountant, we audited the effective-ness of the financial report’s internal control for Hainan Dadonghai Tourism

Center (Holdings) Co., Ltd. (the Company) dated 31 December 2017.

I. As for responsibility of internal control

The Company established and improved and implemented internal control effectively pursuit to Basic Norms of Enterprises Internal

Control, Supporting Guidelines for Enterprise Internal Control and Evaluation Guild lines for Enterprises Internal Control, and board of

the director is responsible for evaluating its effectiveness.

II. Auditor’s responsibilities

Our responsibility is to express an opinion on the effectiveness of internal control for the financial statements based on our audit. And

disclosed major deficits of noted internal control without financial statement concerned.

III. Inherent feature of internal control

The internal control has an inherent limitation, and exist mistakes that can not prevent and being discovered. Moreover, the internal

control might be inappropriate due to the changes of conditions, or fails to follow the controlling policies and procedures, to speculate

future effectiveness of the internal control in line with the auditing result has a certain risks.

IV. Auditing opinion: in our opinion

The Company, in line with Basic Norms of Enterprises Internal Control and relevant regulations, shows an effectiveness internal control

of financial report in all major aspects dated 31 December 2017.

BDO CHINA Shu Lun Pan                  Certified Public Accountant of China: Zhu Jianqing

Certified Public Accountants LLP

Certified Public Accountant of China: Liu Zebo

Shanghai, China                               30 January 2018

Disclosure details of audit report of

Disclosed

internal control

Disclosure date of audit report of     2018-02-01

52

司公限有份股心中游旅海东大南海                                   2017 文全告报度年年

internal control (full-text)

Index of audit report of internal   Relevant information found in Self-evaluation Report of Internal Control for 2017 published on

control (full-text)           Juchao Website dated 1 February 2018.

Opinion type of auditing report of IC Standard unqualified

whether the non-financial report had

No

major defects

Carried out modified opinion for internal control audit report from CPA

□Yes √ No

The internal control audit report, issued by CPA, has concerted opinion with self-evaluation report, issued from the Board

√ Yes □ No

53

司公限有份股心中游旅海东大南海                               2017 文全告报度年年

Section X. Corporation bonds

Whether or not the Company public offering corporation bonds in stock exchange, which undue or without payment in full at

maturity on the approval date for annual report disclosed

No

54

司公限有份股心中游旅海东大南海                                        2017

文全告报度年年

Section XI. Financial Report

I. Audit report

Type of audit opinion                       Standard unqualified opinion

Signing date of audit report                    2018-01-30

Name of audit institute                       BDO CHINA Shu Lun Pan Certified Public Accountants LLP

Document serial of audit report                   PCPAR [2018] No.10037

Name of the CPA                           Zhu Jianqing, Liu Zebo

Auditor’s Report

To all shareholders of Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd.,

I.  Opinion

We have audited the financial statements of Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd. (hereinafter referred to as "the

Company"), which comprise the balance sheet as at December 31, 2017, and the income statement, the statement of cash flows and

the statement of changes in owners' equity for the year then ended and notes to the financial statements.

In our opinion, the attached financial statements are prepared, in all material respects, in accordance with Accounting Standards for

Business Enterprises and present fairly the financial position of the Company as at December 31, 2017 and its operating results and

cash flows for the year then ended.

II.   Basis for Our Opinion

We conducted our audit in accordance with the Auditing Standards for Certified Public Accountants in China. Our responsibilities

under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our

report. According to the Code of Ethics for Chinese CPA, we are independent of the Company in accordance with the Code of Ethics

for Chinese CPA and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the

audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

III.   Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial

statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and

in forming our opinion thereon, and we do not provide a separate opinion on these matters. The key audit matters that we identified

in the audit are as follows:

(I)   Recognition of room income

1.   Factual description

The Company had operating income of RMB27,906,600 in 2017, of which room income was RMB21,103,100, accounting for

75.62% of operating income. According to Note 5.20 of the financial statements of the Company, the room income recognition

process of the Company isas follows:

(1)  For travel agencies and individual guests, make advance collection of payments from them or pre-authorization; recognize

55

司公限有份股心中游旅海东大南海                                         2017

文全告报度年年

income of each day after 0:00 of the night of such day after confirmation with the Room Department and the hotel front desk.

(2)   For websites under agreements,  ① guests who book rooms via websites with agreements with the Company shall make

advance payment of room fees and deposits when they check in and pay the related website service fees according to a certain

proportion set out in the agreements and after check by the finance department with the websites. Income of the current day shall be

recognized after 00:00 according to the consumption situation after deducting service charges. ② for guests who book rooms through

websites with agreements with the Company and pay room fees to the websites, income of the current day shall be recognized after

00:00 according to the consumption situation and listed as accounts receivable which shall be settled and collected before the fifth

day of each month after checking with the websites.

(3) For oriented guests, stay in account and make advance collection of payments at the time of check-in according to agreements,

recognize income of the current day after 00:00 of each night according to consumption situation, and make regular reconciliation,

settlement and collection.

Xiruan system will automatically generate daily sales statements for the above business, which shall be audited by examining

personnel before submitted to the financial department to prepare accounting vouchers.

2.     How our audit addressed the matter

For room sales revenue, we understood and evaluated the management's design of internal controls in sales processes from approval

of contracts to the accounting of sales revenue and tested the effectiveness of the implementation of key control points.

Via sample inspection of contracts and management interviews, we tested the timing point of significant risks and remuneration

related to room revenue recognition, and thus assessed the Company's income recognition policies.

In addition, we implemented the following procedures in respect of room revenue by using sampling:

(1)   Analyze income and gross profit margin in combination with the type of income, and judge whether there is any abnormal

fluctuation in the income amount in the current period.

(2)   Choose samples from reservation records and check-in records of rooms, check the samples against the contracts, accounting

records, invoice issuance and payment receipts related to the corresponding sales, and pay special attention to whether the samples

before and after the balance sheet date are included in the correct accounting period to assess whether room revenue is confirmed

during the appropriate period.

(3)   With respect to new customers and those bringing large amount of income in the current period, implement the external

confirmation of incurred amounts and the balances, and analyzed the authenticity thereof in combination with the collection of

payments and occupancy situation. At the same time, inquire the business information of some customers to further confirm the

authenticity of transactions therewith.

(II)   Non-operating income due to write-off of long-term investment and current account

1.   Factual description

According to the Proposal on Write-off of Long-term Investments and Current Accounts" resolved at the 12th extraordinary meeting

of the eighth board of directors of the Company and the fifth extraordinary meeting of the eighth board of supervisors of the

Company, and as resolved at the third extraordinary general meeting of shareholders of the Company in 2017, the Company wrote off

original book value of long-term equity investment of RMB 9,716,374.26 in 2017, and provided for the provision for impairment of

RMB 9,716,374.26;wrote off original book value of available-for-sale financial assets of RMB 5,000,000.00, and provided for the

provision for impairment of RMB 5,000,000.00;wrote off a total of 205 sums of accounts receivable with original book value of

RMB80,243,805.62, and provided for the provision for bad debt of RMB80,243,805.62;wrote off a total of 201 sums of accounts

56

司公限有份股心中游旅海东大南海                                         2017

文全告报度年年

payable with original book value of RMB1,303,540.11. The write-offs resulted in increase in the Company's non-operating income

by RMB1,303,540.11 in 2017.

2.   How our audit addressed the matter

(1) We understood the Company's internal control system on write-off of assets and liabilities to judge whether the write-off

process complied with the requirements. We collected relevant resolutions of the meetings of the board of directors and the third

extraordinary general meeting of shareholders and media and website announcements.

(2) For long-term equity investments, available-for-sale financial assets and claims and debts, we traced the original situations and

collected relevant information to verify the authenticity thereof, and verified the relevant information of the investees and the

creditors and debtors through the Enterprise Credit Information Publicity System and the enterprise verification system. Each of the

written-off long-term equity investments, available-for-sale financial assets and claims and debts had aging of more than 5 years.

(3) We noticed that Hainan Dongfang Guoxin Law Firm issued the Legal Opinion on Time Limitation for Proceedings on Part of

Accounts Payable of Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd. in respect of the above-mentioned written-off payables,

in which the law firm believed that the above 201 sums of payables have exceeded the statutory time limitations, and the relevant

creditors have lost their debt recovery right and the right to win. To this end, we conducted necessary communication with Hainan

Dongfang Guoxin Law Firm in respect of the relevant situation on the said write-offs of accounts payable.

IV.   Other information

The management of the Company is responsible for the other information. The other information comprises information of the

Company's annual report in 2017, but excludes the financial statements and our auditor's report.

Our opinion on the financial statements does not cover the other information and we do not and will not express any form of

assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in

doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in

the audit, or otherwise appears to be materially misstated.

If, based on the work we have performed on the other information that we obtained prior to the date of this auditor's report, we

conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report

in this regard.

V.   Responsibilities of Management and Those Charged with Governance for the Financial Statements

The Company's management is responsible for preparing the financial statements in accordance with the requirements of Accounting

Standards for Business Enterprises to achieve a fair presentation, and for designing, implementing and maintaining internal control

that is necessary to ensure that the financial statements are free from material misstatements, whether due to frauds or errors.

In preparing the financial statements, management of the Company is responsible for assessing the Company's ability to continue as a

going concern, disclosing matters related to going concern and using the going concern basis of accounting unless management either

intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

57

司公限有份股心中游旅海东大南海                                           2017

文全告报度年年

Those charged with governance are responsible for overseeing the Company's financial reporting process.

VI.   Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material

misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high

level of assurance, but is not a guarantee that an audit conducted in accordance with the audit standards will always detect a material

misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the

aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial

statements.

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the

audit. We also:

(1) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and

perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for

our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as

fraud may involve collusion, forgery, omissions, misrepresentations, or the override of internal control.

(2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the

circumstances.

(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures

made by management of the Company.

(4) Conclude on the appropriateness of using the going concern assumption by the management of the Company, and conclude,

based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant

doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to

draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to

modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future

events or conditions may cause the Company to cease to continue as a going concern.

(5) Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the

financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

(6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the

Company to express an opinion on the financial statements and bear all liability for the opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and

significant audit matters, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding

independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our

independence, and where applicable, related safeguards.

58

司公限有份股心中游旅海东大南海                                       2017

文全告报度年年

From the matters communicated with those charged with governance, we determine those matters that were of most significance in

the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our

auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we

determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be

expected to outweigh the public interest benefits of such communication.

BDO CHINA Shu Lun Pan                 Certified Public Accountant of China:Zhu Jianqing

Certified Public Accountants LLP

Certified Public Accountant of China:Liu Zebo

Shanghai, China                         30 August 2018

II. Financial Statement

Expressed in Renminbi unless otherwise stated

1. Balance sheet

Prepared by HAINAN DADONGHAI TOURISM CENTER (HOLDINGS) CO., LTD.

2017-12-31

In RMB

Item                    Closing Balance     Opening Balance

Current assets:

Monetary funds                                     9,681,607.16     27,210,248.01

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                                 594,130.89      690,444.72

Prepayments                                      49,530.21       58,783.23

Insurance receivable

Reinsurance receivables

Contract reserve of reinsurance receivable

Interest receivable

Dividends receivable

Other receivables                                   139,561.29      174,103.52

59

司公限有份股心中游旅海东大南海                            2017

文全告报度年年

Purchase restituted finance asset

Inventories                           227,005.11   219,179.72

Assets held for sale

Non-current assets maturing within one year           1,173,597.68   584,369.42

Other current assets                       1,957,863.56   1,876,449.22

Total current assets                         13,823,295.90  30,813,577.84

Non-current assets:

Loans and payments on behalf

Available-for-sale financial assets

Held-to-maturity investments

Long-term receivables

Long-term equity investments

Investment real estate                     8,859,003.99   9,333,527.55

Fixed assets                          39,088,708.83  40,395,680.91

Construction in progress

Project materials

Disposal of fixed assets

Productive biological assets

Oil and natural gas assets

Intangible assets                       23,017,636.20  23,830,023.36

Research and development costs

Goodwill

Long-term deferred expenses                   2,678,016.88   1,071,343.97

Deferred tax assets

Other non-current assets

Total non-current assets                       73,643,365.90  74,630,575.79

Total assets                             87,466,661.80 105,444,153.63

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

60

司公限有份股心中游旅海东大南海                     2017

文全告报度年年

reckoned into current gains/losses

Derivative financial liability

Notes payable

Accounts payable                 2,161,172.26   1,967,565.51

Accounts received in advance           1,271,174.12   1,894,524.28

Selling financial asset of repurchase

Commission charge and commission payable

Wage payable                   2,459,015.93   2,148,514.36

Taxes payable                   539,023.76   582,944.27

Interest payable

Dividend payable

Other accounts payable              2,411,176.59  23,084,504.73

Reinsurance payables

Insurance contract reserve

Security trading of agency

Security sales of agency

Liability held for sale

Non-current liabilities due within 1 year

Other current liabilities

Total current liabilities               8,841,562.66  29,678,053.15

Non-current liabilities:

Long-term loans

Bonds payable

Including: preferred stock

Perpetual capital securities

Long-term account payable

Long-term wages payable

Special accounts payable

Projected liabilities               1,489,685.04   1,489,685.04

Deferred income

Deferred income tax liabilities

Other non-current liabilities

Total non-current liabilities             1,489,685.04   1,489,685.04

Total liabilities                   10,331,247.70  31,167,738.19

61

司公限有份股心中游旅海东大南海                             2017

文全告报度年年

Owners’ equity:

Share capita                          364,100,000.00   364,100,000.00

Other equity instrument

Including: preferred stock

Perpetual capital securities

Capital public reserve                     54,142,850.01   54,142,850.01

Less: Inventory shares

Other comprehensive income

Reasonable reserve

Surplus reserve

Provision of general risk

Retained profit                        -341,107,435.91   -343,966,434.57

Total owner’s equity attributable to parent Company         77,135,414.10   74,276,415.44

Minority interests

Total owner’s equity                         77,135,414.10   74,276,415.44

Total liabilities and owner’s equity                 87,466,661.80   105,444,153.63

Legal Representative: Li Yuanbin

Accounting Principal: Fu Zongren

Accounting Firm’s Principal: Fu Zongren

2. Profit statement

In RMB

Item           Current Period       Last Period

I. Total operating income                    27,906,564.23       21,708,883.51

Including: Operating income                 27,906,564.23       21,708,883.51

Interest income

Insurance gained

Commission charge and commission income

II. Total operating cost                     27,127,174.49       25,781,573.48

Including: Operating cost                 11,139,919.59       10,258,440.62

Interest expense

Commission charge and commission expense

62

司公限有份股心中游旅海东大南海                             2017

文全告报度年年

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                 1,434,692.20   1,412,039.97

Sales expenses                      5,124,503.55   4,931,333.26

Administration expenses                 9,665,525.83   9,374,635.91

Financial expenses                    -249,176.18     -193,645.29

Losses of devaluation of asset               11,709.50       -1,230.99

Add: Changing income of fair value(Loss is listed with “-”)

Investment income (Loss is listed with “-”)       805,825.24   1,390,918.55

Including: Investment income on affiliated Company and

joint venture

Exchange income (Loss is listed with “-”)

Income on disposal of assets (Loss is listed with “-”)

Other income

III. Operating profit  (Loss is listed with “-”)          1,585,214.98   -2,681,771.42

Add: Non-operating income                     1,303,800.11     69,606.00

Including: Disposal earnings of non-current asset

Less: Non-operating expense                     30,016.43      48,887.07

Including: Disposal loss of non-current asset         30,016.43      48,887.07

IV. Total Profit (Loss is listed with “-”)             2,858,998.66   -2,661,052.49

Less: Income tax

V. Net profit (Net loss is listed with “-”)             2,858,998.66   -2,661,052.49

(i) continuous operating net profit (net loss listed with ‘-”)

(ii)  termination of net profit  (net loss listed with ‘-”)

Net profit attributable to owner’s equity of parent Company   2,858,998.66   -2,661,052.49

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

63

司公限有份股心中游旅海东大南海                              2017

文全告报度年年

1. Changes as a result of re-measurement of net defined

benefit plan liability or asset

2. Share of the other comprehensive income of the

investee accounted for using equity method which will not be

reclassified subsequently to profit and loss

(II) Other comprehensive income items which will be

reclassified subsequently to profit or loss

1. Share of the other comprehensive income of the

investee accounted for using equity method which will be

reclassified subsequently to profit or loss

2. Gains or losses arising from changes in fair value of

available-for-sale financial assets

3. Gains or losses arising from reclassification of

held-to-maturity investment as available-for-sale financial assets

4. The effect hedging portion of gains or losses arising

from 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                     2,858,998.66   -2,661,052.49

Total comprehensive income attributable to owners of parent

2,858,998.66   -2,661,052.49

Company

Total comprehensive income attributable to minority

shareholders

VIII. Earnings per share:

(i) Basic earnings per share                     0.0079       -0.0073

(ii) Diluted earnings per share                    0.0079       -0.0073

Legal Representative: Li Yuanbin

Accounting Principal: Fu Zongren

Accounting Firm’s Principal: Fu Zongren

3. Cash flow statement

In RMB

64

司公限有份股心中游旅海东大南海                                     2017

文全告报度年年

Item                   Current Period    Last Period

I. Cash flows arising from operating activities:

Cash received from selling commodities and providing labor services       29,475,377.07  22,525,732.45

Net increase of customer deposit and interbank deposit

Net increase of loan from central bank

Net increase of capital borrowed from other financial institution

Cash received from original insurance contract fee

Net cash received from reinsurance business

Insured savings and net increase of investment

Net increase of amount from disposal financial assets that measured by fair

value and with variation reckoned into current gains/losses

Cash received from interest, commission charge and commission

Net increase of capital borrowed

Net increase of returned business capital

Write-back of tax received                                         4,801.73

Other cash received concerning operating activities                1,082,486.86     584,448.51

Subtotal of cash inflow arising from operating activities               30,557,863.93  23,114,982.69

Cash paid for purchasing commodities and receiving labor service         8,848,190.06   5,520,980.68

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                        10,028,995.69   9,341,192.06

Taxes paid                                     2,678,621.46   2,515,054.34

Other cash paid concerning operating activities                  3,874,768.25   2,971,383.59

Subtotal of cash outflow arising from operating activities               25,430,575.46  20,348,610.67

Net cash flows arising from operating activities                    5,127,288.47   2,766,372.02

II. Cash flows arising from investing activities:

Cash received from recovering investment                     9,000,000.00   9,000,000.00

Cash received from investment income                         830,000.00     961,165.05

Net cash received from disposal of fixed, intangible and other long-term

10,550.00   4,929,753.50

assets

Net cash received from disposal of subsidiaries and other units

65

司公限有份股心中游旅海东大南海                                   2017

文全告报度年年

Other cash received concerning investing activities                         29,081.45

Subtotal of cash inflow from investing activities                 9,840,550.00   14,920,000.00

Cash paid for purchasing fixed, intangible and other long-term assets     4,186,479.32   1,258,516.27

Cash paid for investment                           9,000,000.00   9,000,000.00

Net increase of mortgaged loans

Net cash received from subsidiaries and other units

Other cash paid concerning investing activities               19,310,000.00

Subtotal of cash outflow from investing activities                 32,496,479.32   10,258,516.27

Net cash flows arising from investing activities                 -22,655,929.32   4,661,483.73

III. Cash flows arising from financing activities:

Cash received from absorbing investment

Including: Cash received from absorbing minority shareholders’ investment

by subsidiaries

Cash received from loans

Cash received from issuing bonds

Other cash received concerning financing activities             19,810,000.00

Subtotal of cash inflow from financing activities                 19,810,000.00

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               19,810,000.00

Subtotal of cash outflow from financing activities                 19,810,000.00

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                   -17,528,640.85   7,427,855.75

Add: Balance of cash and cash equivalents at the period -begin        27,210,248.01   19,782,392.26

VI. Balance of cash and cash equivalents at the period -end             9,681,607.16   27,210,248.01

66

司公限有份股心中游旅海东大南海                                  2017 文全告报度年年

Current period

Current Period

Owners’ equity attributable to the parent Company

Provision

Less:   Other                                   Minority  Total owners’

Other                                       Reasonable Surplus of

Inventory comprehensive                      Retained profit interests equity

Item             equity instrument                                 reserve   reserve general

Capital     shares   income

Share capital                                                       risk

reserve

Perpetual

Preferred

capital   Other

stock

securities

I. Balance at

the end of the  364,100,000.00                  54,142,850.01                                     -343,966,434.57       74,276,415.44

last year

Add:

Changes  of

accounting

policy

Error

correction of

the last period

Enterprise

combine

under   the

same control

Other

II. Balance at

364,100,000.00                  54,142,850.01                                     -343,966,434.57       74,276,415.44

the beginning

67

司公限有份股心中游旅海东大南海    2017 文全告报度年年

of this year

III. Increase/

Decrease   in

this    year                             2,858,998.66 2,858,998.66

(Decrease is

listed with “-”)

(i)   Total

comprehensive                               2,858,998.66 2,858,998.66

income

(ii) Owners’

devoted and

decreased

capital

1.Common

shares

invested   by

shareholders

2.   Capital

invested   by

holders   of

other  equity

instruments

3.   Amount

reckoned into

owners equity

with

share-based

payment

4. Other

(III)   Profit

distribution

68

司公限有份股心中游旅海东大南海    2017 文全告报度年年

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

69

司公限有份股心中游旅海东大南海                                 2017 文全告报度年年

1. Withdrawal

in the report

period

2. Usage in the

report period

(VI)Others

IV. Balance at

the end of the  364,100,000.00                 54,142,850.01                                   -341,107,435.91       77,135,414.10

report period

4. Statement on Changes of Owners’ Equity

In RMB

Last Period

Last Period

Minority  Total owners’

Owners’ equity attributable to the parent Company

interests equity

Item             Other

Provision

equity instrument                 Less:    Other

Capital                    Reasonable Surplus of

Share capital        Perpetual               Inventory  comprehensive                   Retained profit

Preferred            reserve                    reserve   reserve general

capital   Other          shares   income

stock                                                 risk

securities

I. Balance at

the end of the 364,100,000.00                  54,142,850.01                                   -341,305,382.08       76,937,467.93

last year

Add:

Changes   of

accounting

70

司公限有份股心中游旅海东大南海            2017 文全告报度年年

policy

Error

correction of

the last period

Enterprise

combine under

the   same

control

Other

II. Balance at

the beginning    364,100,000.00   54,142,850.01                -341,305,382.08 76,937,467.93

of this year

III. Increase/

Decrease   in

this    year                                   -2,661,052.49   -2,661,052.49

(Decrease is

listed with “-”)

(i)   Total

comprehensive                                     -2,661,052.49   -2,661,052.49

income

(ii) Owners’

devoted and

decreased

capital

1.Common

shares

invested   by

shareholders

71

司公限有份股心中游旅海东大南海    2017 文全告报度年年

2.   Capital

invested  by

holders   of

other  equity

instruments

3.   Amount

reckoned into

owners equity

with

share-based

payment

4 Other

(III)   Profit

distribution

1. Withdrawal

of   surplus

reserves

2. Withdrawal

of general risk

provisions

3. Distribution

for owners (or

shareholders)

4. Other

(IV) Carrying

forward

internal

owners’ equity

1.   Capital

reserves

conversed to

72

司公限有份股心中游旅海东大南海            2017 文全告报度年年

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   364,100,000.00   54,142,850.01                -343,966,434.57 74,276,415.44

report period

73

司公限有份股心中游旅海东大南海                                 2017 文全告报度年年

III. Company profile

Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd. (hereinafter referred to as the "Company") is a

standardized company limited by shares established on April 26, 1993 and restructured from Hainan Sanya

Dadonghai Tourism Centre Development Co., Ltd. with the approval of Hainan Shareholding System Pilot Group

office via its Document Qiong Gu Ban Zi [1993] No.11.On May 6, 1996, the Company was reorganized and

separated with the reply of Hainan Securities Management Office by its Document Qiong Zheng Ban [1996]

No.58.On October 8, 1996 and January 28, 1997,the Company was approved to respectively issue 80 million B

shares and 14 million A shares on Shenzhen Stock Exchange and list for sales. On June 20, 2007, the Company

carried out the split share structure reform. The non-tradable shareholders of the Company paid shares to the

tradable shareholders for obtaining the circulation rights, and the tradable shareholders got 3 shares for every 10

shares. The Company belongs to tourism and catering service industry.

As at December 31, 2017, the Company's accumulative total issued capital was 364.1 million shares and the

Company's registered capital was RMB 364.1 million. Legal representative: Li Yuanbin. Unified social credit code:

91460000201357188U.Domicile: Dadonghai, Hedong District, Sanya. Business scope: Accommodation and

catering industry (limited to branches); photography; flower bonsai, knitwear, general merchandise, hardware,

chemical products (except franchised operations), daily necessities, industrial means of production (except

franchised operations), metal materials, machinery equipment; sales of train, bus, vehicle tickets on an agent basis

etc. The Company's largest shareholder is Luoniushan Co., Ltd.

The financial statements were approved by the board of directors of the Company on January 30, 2018 for

disclosure.

As at December 31, 2017, the subsidiaries included into the Company's scope of consolidated financial statements

are as follows:

Name                    Relationship with the Company

Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd. South

China Hotel (hereinafter referred to as "the South China

Hotel")                           Branch

IV. Basis of preparation of the financial statements

1.Preparation basis

Based on going concern and according to actually occurred transactions and events, the Company prepared

financial statements in accordance with the Accounting Standards for Business Enterprises — Basic Standards and

the specific accounting standards, Application Guidance to the Accounting Standards for Business Enterprises, the

interpretation of the Accounting Standards for Business Enterprises and other relevant provisions (hereinafter

referred to collectively as the "Accounting Standards for Business Enterprises"), as well as the disclosure

provisions of the Rules for the Compilation and Submission of Information Disclosure by Companies Offering

Securities to the Public No.15 - General Requirements for Financial Reports (Revised in 2014).

2 Going concern

74

司公限有份股心中游旅海东大南海                           2017 文全告报度年年

The Company currently has sufficient working capital and normal operating conditions. It is estimated that the

operating activities of the Company will continue in the next 12 months.

v. setamitse gnitnuocca dna seicilop gnitnuocca tnacifingiS

Does the Company need to comply with the disclosure requirement of the special industry

No

Specific accounting policies and estimation attention:

Nil

1. Statement on compliance with the Accounting Standards for Business Enterprises

The financial statements prepared by the Company comply with the requirements of the Accounting Standards for

Business Enterprises, and truly and completely present the financial position, operating results, cash flows of the

Company and other related information.

2. Accounting period

The accounting year is from January 1 to December 31 in calendar year.

3. Operating cycle

The Company's operating cycle is 12 months.

Note: when the operating cycle is different from 12 months, and such opering cycle is the classification standards

for assets and liability mobility, explain the cycle and determination basis.

4. Reporting currency

The Company adopts RMB as its reporting currency.

5. Accounting Treatment Method for Business Combinations (under the same/different control)

6. Preparation method for consolidated financial statement

7. Joint arrangement classification and accounting treatment for joint operations

8. Recognition criteria of cash and cash equivalents

For the purpose of preparing the statement of cash flows, the term “cash” refers to the cash on hand and the

unrestricted deposit of the Company. The term “cash equivalents” refers to short-term (maturing within three

months from acquisition) and highly liquid investments that are readily convertible to known amounts of cash and

which are subject to an insignificant risk of change in value.

9. Foreign currency business and foreign currency statement conversion

Foreign currency transactions will be translated at the spot exchange rate on the transaction date and be accounted

for at RMB.

75

司公限有份股心中游旅海东大南海                              2017 文全告报度年年

The balance of foreign currency monetary items are translated at the spot exchange rate on the balance sheet date

and the exchange differences arising therefrom shall be included in the current profit and loss, except those

exchange differences arising from the special borrowings of foreign currency related to the acquired and

constructed assets qualified for capitalization that will be capitalized at the borrowing expenses. Foreign currency

non-monetary items measured at historical costs shall still be converted at the spot exchange rates when the

transactions occur, without changing the functional currency amount. Foreign currency non-monetary items

measured at fair value shall be translated at the spot exchange rates on the day when the fair value is determined.

The exchange difference arising therefrom is included in the current profit and loss or capital reserves.

Note: explain the follow items as the determination of conversion rate while foreign currency trade occurred, the

conversion method for foreign currency monetary items in balance sheet date, the treatment for exchange gains or

losses as well we the accounting treatment for foreign currency statement translation

10. Financial instruments

Financial instruments include financial assets, financial liabilities and equity instruments.

10.1 Classification of financial instruments

Upon initial recognition, financial assets and financial liabilities are classified into: financial assets or financial

liabilities measured at fair value through current profit and loss, including financial assets or financial liabilities

held for trading and financial assets or financial liabilities directly designated to be measured at fair value through

current profit and loss; held-to-maturity investments; receivables; available-for-sale financial assets; and other

financial liabilities, etc.

10.2 Recognition and measurement of financial instruments

(1)   Financial assets (financial liabilities) measured at fair value through current profit and loss

Financial assets (financial liabilities) measured at fair value through current profit and loss are initially recognized

at the fair value upon acquisition (net of cash dividends declared but not yet paid or bond interest due but not yet

received) and the related transaction costs are included in current profit and loss.

The interests or cash dividends to be received during the holding period are recognized as investment income.

Change in fair values is included in the current profit and loss at the end of the period.

The difference between the fair value and the initial book-entry value is recognized as investment income upon

disposal; meanwhile, adjustments are made to profits or losses from changes in fair values.

(2)   Held-to-maturity investments

Held-to-maturity investments are initially recognized at the sum of the fair value (net of bond interest due but not

yet received) and related transaction costs upon acquisition.

The interest income is calculated and recognized according to amortized costs and effective interest rates (as per

coupon rates if the difference between effective interest rates and coupon rates is small) during the holding period,

and is included in the investment income. The effective interest rates are determined upon acquisition and remain

unchanged during the expected remaining period, or a shorter period if applicable.

Upon disposal, the difference between the purchase price obtained and the book value of the investment is

76

司公限有份股心中游旅海东大南海                              2017 文全告报度年年

recognized in investment income.

(3)   Receivables

For creditor’s rights receivable arising from external sales of goods or rendering of service by the Company and

other creditor's rights of other enterprises (excluding liability instruments quoted in an active market) held by the

Company, including accounts receivable, other receivables, notes receivable, prepayment and others, the initial

recognition amount shall be the contract price or agreement price receivable from purchasing party; for those with

financing nature, they are initially recognized at their present values.

Upon recovery or disposal, the difference between the purchase price obtained and the book value of the

receivables is recognized in current profit and loss.

(4)   Available-for-sale financial assets

Financial assets (financial liabilities) measured at fair value through current profit and loss are initially recognized

at the fair value and related transaction expenses upon acquisition (net of cash dividends declared but not yet paid

or bond interest due but not yet received).

The interests or cash dividends to be received during the holding period are recognized as investment income. The

interest or cash dividends should be measured at fair value and their changes in fair value should be included in

other comprehensive income. However, for an equity instrument investment that has no quoted price in an active

market and whose fair value cannot be reliably measured, and for derivative financial asset linked to the said

equity instrument investment and settled by delivery of the same equity instrument, they shall be measured at cost.

Difference between the proceeds and the book value of the financial assets is recognized as investment profit or

loss upon disposal; meanwhile, amount of disposal corresponding to the accumulated change in fair value which

is originally and directly included in other comprehensive income shall be transferred out and recognized as

investment gains or losses.

(5)   Other financial liabilities

Other financial liabilities are initially recognized at the sum of fair value and transaction expenses, and

subsequently measured at amortized costs. Subsequent measurement is conducted at the amortized cost.

10.3 Recognition and measurement of transfer of financial assets

When a financial assets transfer occurs, the financial assets will be derecognized when substantially all the risks

and rewards on the ownership of the financial assets have been transferred to the transferee; and they will not be

derecognized if substantially all the risks and rewards on the ownership of the financial assets have been retained.

When determining whether the transfer of a financial asset meets the above de-recognition criteria of financial

assets, the Company adopts the principle of substance over form. The Company classifies the transfer of a

financial asset into the entire transfer and the partial transfer of financial asset. Where the entire transfer of the

financial asset meets the de-recognition conditions, the difference of the following two amounts will be included

in current profit and loss:

(1)   The book value of the transferred financial asset;

(2)   The sum of the consideration received from the transfer and the accumulated amount of the changes in fair

value originally and directly included in owners’ equity (the situation where the financial asset transferred is an

available-for-sale financial asset is involved in).

77

司公限有份股心中游旅海东大南海                               2017 文全告报度年年

If the partial transfer of financial asset satisfies the criteria for de-recognition, the entire book value of the

transferred financial asset shall be split into the derecognized and recognized part according to their respective fair

value and the difference between the amounts of the following two items shall be included in the current profit

and loss:

(1)   The book value of the derecognized part;

(2)   The sum of the consideration for the derecognized part and the portion of de-recognition corresponding to

the accumulated amount of the changes in fair value originally and directly included in owners’ equity (the

situation where the financial asset transferred is an available-for-sale financial asset is involved in).

If the transfer of financial assets does not meet the de-recognition criteria, the financial assets shall continue to be

recognized, and the consideration received will be recognized as a financial liability.

10.4 De-recognition criteria of financial liabilities

Where the present obligations of financial liabilities have been discharged in whole or in part, the financial

liability is derecognized or any part thereof will be derecognized; if the Company signs an agreement with

creditors to replace the existing financial liabilities by undertaking new financial liabilities, and the new financial

liabilities are substantially different from the existing ones in terms of contract terms, the existing financial

liabilities will be derecognized, and at the same time, the new financial liability will be recognized.

Where substantive changes are made to the contract terms of existing financial liability in whole or in part, the

existing financial liabilities or part thereof will be derecognized, and the financial liability the terms of which have

been modified will be recognized as a new financial liability.

Where financial liabilities are derecognized is whole or in part, the difference between the book value of the

financial liabilities derecognized and the consideration paid (including non-cash assets transferred out or new

financial liabilities borne) will be included into current profit and loss.

Where the Company repurchases part of a financial liability, the entire book value of the financial liability shall be

split into the derecognized part and continuously-recognized part according to their respective relatively fair

values on the repurchase date. The difference between the book value of the derecognized part and the

consideration paid (including non-cash assets transferred out or new financial liabilities assumed) shall be

included in the current profit and loss.

10.5 Method of determining the fair value of financial assets and financial liabilities

The fair value of a financial instrument, for which there is an active market, is the prices quoted for it therein. Fair

value of a financial instrument having no active market shall be determined by using valuation techniques. At the

time of valuation, the Company adopts the techniques that are applicable in the current situation and supported by

enough available data and other information, selects the input values that are consistent with the features of assets

or liabilities as considered by market participants in relevant asset or liability transactions, and gives priority to

use relevant observable inputs. The unobservable inputs are used only under the circumstance when it is

impossible or unobservable inputs to obtain relevant observable inputs.

10.6 Testing and accounting methods of impairment of financial assets (excluding receivables)

Except for the financial assets measured at fair values through current profit and loss, the book value of financial

assets on the balance sheet date should be checked. If there is objective evidence that a financial asset is impaired,

78

司公限有份股心中游旅海东大南海                                     2017 文全告报度年年

provision for impairment shall be made.

(1)Impairment provision for available-for-sale financial assets:

If the fair value of available-for-sale financial assets has significantly declined at the end of the period, or it is

expected that the trend of decrease in value is non-temporary after considering various relevant factors, the

impairment shall be recognized, and accumulated losses from decreases in fair value originally and directly

included in owners’ equity shall be all transferred out and recognized as impairment loss.

For available-for-sale debt instruments whose impairment losses have been recognized, if their fair values rise in

the subsequent accounting period and such rise is objectively related to the matters occurring after the recognition

of impairment loss, the previously recognized impairment loss shall be reversed and recorded into the current

profit and loss.

Impairment losses on available-for-sale equity instruments shall not be reversed through profit or loss.

(2) Impairment provision for held-to-maturity investments:

Measurement of impairment losses on held-to-maturity investments is treated in accordance with the measurement

method for impairment losses on receivables.

11. Accounts receivable

(1) Account receivable with individually significant amount and with bad debt provision accrual

independently

Basis and standard for "individually   Top 5 accounts receivable and other receivables by individual amount at the end of the

significant"               year

The Company will separately conduct an impairment test on an individual basis and the

allowance for bad debts will be made at the lower of the present value of the expected

Methods for provision for bad debts of  future cash flow and the book value thereof and included in current profit and loss. Those

receivables with individually significant do not impair after the separate test shall be included into corresponding portfolio for

amount:                 provision for bad debts. If separate test indicates that there is impairment of receivables,

they shall not be included the receivables portfolio with similar risk credit characteristics

for an impairment test.

(2) Receivables with bad debt provision accrual by credit portfolio:

Portfolio                       Methods for provision for bad debts

Aging analysis

Receivables provided for bad debts on a portfolio basis

Provisions for bad debts made by aging analysis method are as follows:

√ Applicable □ Not applicable

Aging             Provision ratio for receivables       Proportion ratio for other receivables

Within 1 year (inclusive)                           0.00%                     0.00%

79

司公限有份股心中游旅海东大南海                                     2017 文全告报度年年

1-2 years                                    5.00%                    5.00%

2-3 years                                   15.00%                    15.00%

3-4 years                                   25.00%                    25.00%

4-5 years                                   50.00%                    50.00%

Over 5 years                                 100.00%                   100.00%

In combination, withdrawal proportion of bad debt provision based on balance proportion

□ Applicable √ Not applicable

In combination, withdrawal proportion of bad debt provision based on other methods:

□ Applicable √ Not applicable

(3) Accounts receivable with individually insignificant amounts and individual allowance for bad debt

Reasons for separate       At the end of the year, there are objective evidences showing that the individual balances below

provision of allowance for   top five are impaired; for example, the debtor is dissolved, bankrupts or dies, and therefore the

bad debts            receivables cannot be recovered after the bankruptcy property or the estate is repaid.

if there is an objective evidence that the impairment on receivables has occurred, such

receivables shall be separated from relevant portfolio to conduct impairment test separately,

Provision method of

based on which the impairment losses are recognized.

allowance for bad debts

Receivables other than accounts receivable and other receivables are subject to impairment

provision by using the specific identification methods.

12. Inventories

Does the Company need to comply with the disclosure requirement of the special industry

No

1. Classification

Inventories are classified into: raw materials, stock commodities, low-cost consumables, good materials, fuel, etc.

2. Valuation method of inventories dispatched

Stock commodity is accounted for at the selling price and the difference between the purchase and sale prices are

adjusted on a monthly basis by using the integrated price difference rate. The purchase and storage of all materials

of inventories is measured at actual cost, and by using the first-in first-out method when applied for use. Low-cost

consumables are amortized at lump-sum method when applied for use.

3. Determining basis of the net realizable value of inventories and method for inventory impairment

provision

After the comprehensive inventory count at the end of the period, provisions for inventory depreciation reserve are

made or adjusted at the lower of their costs or net realizable values.

For merchandise inventories for direct sale, including stock commodities, goods in progress and materials for sale,

during normal operations, their net realizable values are recognized at the estimated selling prices minus the

estimated selling expenses and the relevant taxes and surcharges; for material inventories held for production,

80

司公限有份股心中游旅海东大南海                             2017 文全告报度年年

their net realizable values are recognized at the estimated selling prices of finished goods minus estimated costs

until completion, estimated selling expenses and relevant taxes and surcharges.

The provisions for inventory depreciation reserve are made on an individual basis at the end of the period; for

inventories with large quantities and relatively low unit prices, the provisions for inventory depreciation reserve

are made on a category basis. For inventories related to the product portfolios manufactured and sold in the same

area, and of which the final usage or purpose is identical or similar thereto, and which is difficult to separate from

other items for measurement purposes, the provisions for inventory depreciation reserve are made on a portfolio

basis.

Where the previous factors affecting the written-down of the value of inventory have disappeared, the amount of

write-down shall be resumed and be reversed from the original provision for inventory devaluation with the

reversal being included in current profit and loss.

4. Inventory system

The perpetual inventory system is adopted for accounting.

5.Amortization methods for low-cost consumables and packaging materials

(1)   Low-cost consumables are amortized at lump-sum method;

(2)   Packaging materials: lump-sum write-off method.

13. Assets held for sale

14. Long-term equity investments

1. Judgment criteria for common control and significant influence

Joint control refers to the control shared over an arrangement in accordance with the relevant stipulations, and the

decision-making of related activities of the arrangement should not be made before the party sharing the control

right agrees the same. Where the Company exercises joint control over the investee together with other parties to

the joint venture and enjoys the right on the investee's net assets, the investee is a joint venture of the Company.

81

司公限有份股心中游旅海东大南海                             2017 文全告报度年年

Significant influence refers to the power to participate in making decisions on the financial and operating policies

of an enterprise, such as appointing representative to the board of directors or similar organs of authority of the

investee, but not the power to control the investee, or jointly control, the formulation of such policies with other

parties. Where an investor is able to have significant influences on an investee, the investee shall be the

Company's associate.

2. Determining of initial investment cost

(1)   Long-term equity investment acquired from business combination

Business combination under the common control: if the Company pays a consideration to the combinee in cash,

by transferring non-cash assets or by assuming debts, the share of book value of its owners' equity in the combinee

in the consolidated financial statements of the ultimate controlling party shall be regarded, on the merger date, as

the initial investment cost of the long-term equity investment. If there is a difference between the initial

investment cost of the long-term equity investment and the total of book values of the paid cash, transferred

non-cash assets and of assumed debts as well as the face value of issued share, the difference shall be used to

adjust the share premium in the capital reserve; and if the share premium in the capital reserve is insufficient to be

offset, retained earnings shall be adjusted.

In case the Company can exercise control over the investee under common control for additional investment or

other reasons, the initial investment cost of long-term equity investments is recognized at the share of book value

of net asset of the acquiree after the combination in the consolidated financial statements of the ultimate controller

on the combination date. The stock premium should be adjusted at the difference between the initial investment

cost of long-term equity investments on the combination date and the book value of long-term equity investments

before the combination plus the book value of consideration paid for additional shares; if there is no sufficient

stock premium for write-downs, the retained earnings are adjusted.

Business combination not under the common control: the Company recognizes the combination cost determined

on the combination date as the initial cost of long-term equity investments. Where the Company can control the

investee not under common control from additional investments, the initial investment cost should be changed to

be accounted for under the cost method and recognized at the sum of the book value of equity investments

originally held and newly increased investment cost. Under business combination not under the common control,

the auditing, legal services, consulting and other intermediary fees and other related administrative expenses for

business combination will be included into current profit and loss upon occurrence; the transaction costs for the

issuance of equity securities or debt securities shall be included into the initial recognition amount of equity

securities or debt securities.

(2)   Long-term equity investments obtained by other means

For long-term equity investments acquired from making payments in cash, the initial cost is the actually paid

purchase cost.

For long-term equity investments acquired from issuance of equity securities, the initial investment cost is the fair

value of the issued equity securities.

82

司公限有份股心中游旅海东大南海                               2017 文全告报度年年

If the exchange of non-monetary assets has commercial substance and the fair values of assets traded out and

traded in can be measured reliably, the initial cost of long-term equity investment traded in with non-monetary

assets are determined based on the fair values of the assets traded out and the relevant taxes and surcharges

payable unless there is any conclusive evidence that the fair values of the assets traded in are more reliable; if the

exchange of non-monetary assets does not meet the above criteria, the book value of the assets traded out and the

relevant taxes and surcharges payable are recognized as the initial cost of long-term equity investment traded in.

For long-term equity investment acquired from debt restructuring, the initial cost is determined based on the fair

value.

3. Subsequent measurements and recognition of gain or loss

(1) Long-term equity investment under cost method

Long-term equity investments in subsidiaries are accounted for under the cost method. Except for the actual price

paid for acquisition of investment or the cash dividends or profits contained in the consideration which have been

declared but not yet distributed, the Company recognizes the investment income in the current year at the cash

dividends or profits declared by the investee.

(2) Long-term equity investment accounted for in the equity method

The Company's long-term equity investments in associates and joint ventures are accounted for by using the

equity method. If the initial cost is more than the share of the fair value of the investee' identifiable net asset to

which the Company shall be entitled when investing, the initial cost of the long-term equity investment will not be

adjusted. If the initial cost of a long-term equity investment is less than the share of the fair value of the investee's

identifiable net asset to which the Company shall be entitled when investing, the difference shall be included in

the current profit or loss.

The Company respectively recognizes the investment income and other comprehensive income according to the

shares of net profit or loss and other comprehensive income realized by the investee that should enjoyed or

assumed by the Company, and adjusts the book value of long-term equity investment; according to the profit

declared to be distributed by the investee or the part shall be enjoyed cash dividends calculation, to reduce the

book value of long-term equity investment correspondingly; for other changesin owners' equity excepting for ex

all profit or loss of the investee, other comprehensive income and profit distribution, the book value of long-term

equity investment shall be adjusted and included in the owners' equity.

When recognizing the share of net profit or loss of the investee that the Company shall enjoy, based on fair value

of various identifiable assets and others of the investee on acquisition and according to accounting policies and

accounting periods of the Company, the Company shall recognize such share after making adjustments to net

profit of the investee. When holding the investment, the investee should prepare the consolidated financial

statements, it shall account for the investment income based on the net profit, other comprehensive income and

the changes in other owner's equity attributable to the investee.

83

司公限有份股心中游旅海东大南海                               2017 文全告报度年年

The Company shall write off the part of incomes from internal unrealized transactions between the Company and

associates and joint ventures which are attributable to the Company according to the corresponding ratio and

recognize the profit and loss on investments on such basis. Where the losses from internal transactions between

the Company and the investee fall into the scope of assets impairment loss, the full amount of such losses should

be recognized. For transactions on investments or sales of assets between the Company and associates and joint

ventures, where such assets constitute business, they should be accounted for according to the relevant policies.

When the Company recognizes its share of loss incurred to the investee, treatment shall be done in the following

sequence: firstly, the book value of the long-term equity investment shall be reduced; secondly, where the book

value thereof is insufficient to cover the share of losses, investment losses are recognized to the extent of book

value of other long-term equities which form net investment in the investee in substance and the book value of

long term receivables shall be reduced. Finally, after all the above treatments, if the Company is still responsible

for any additional liability in accordance with the provisions stipulated in the investment contracts or agreements,

provisions are recognized and included into current investment loss according to the obligations estimated to

undertake. An investing party shall recognize the net loss incurred by the invested entity until the book value of

the long-term equity investment and other long-term interests which substantially form the net investment in the

invested entity are reduced to zero, unless the investing party is obliged to undertake extra losses. If the invested

entity realizes any net profit later, the investing party shall, after the amount of its attributable share of profits

offsets its attributable share of the unrecognized losses, resume recognizing its attributable share of profits.

(3) Disposal of long-term equity investments

For disposal of long-term equity investments, the difference between the book value and the actual price shall be

included into the current profit or loss.

Where a long-term equity investment is accounted for under the equity method, accounting treatment should be

made on the part which is originally included in other comprehensive income according to corresponding ratio by

using the same basis for the investee to directly dispose of the relevant assets or liabilities when the investments

are disposed of. Owner's equity recognized from the investee's changes in other owner's equity other than net

profit or loss, other comprehensive income and profit distribution should all transferred to the current profit and

loss in proportion.

In case the joint control or significant influence over the investee is lost for disposing part of equity investments or

other reasons, the remaining equity will be changed to be accounted for according to the recognition and

measurement principles of financial instruments. The difference between the fair value and the book value on the

date of the loss of joint control or significant influence should be included in the current profit and loss. As to

other comprehensive income recognized based on measurement of the original equity investment under the equity

method, accounting treatment shall be made on the same basis as would be required if the investee had directly

84

司公限有份股心中游旅海东大南海                             2017 文全告报度年年

disposed of the assets or liabilities related thereto when measurement under the equity method is terminated.

Owner's equity recognized from the investee's changes in other owner's equity other than net profit or loss, other

comprehensive income and profit distribution should all transferred to the current profit and loss when the equity

method confirmed is no longer adopted.

Where the Company loses the control over the investee due to disposal of partial equity investments or other

reasons, when it prepares separate financial statements, the remaining equity after disposal that can jointly control

or have significant influence on the investee will be measured at the equity method, and the remaining equity

should be deemed to have been adjusted at equity method on acquisition;

If the remaining equity after disposal cannot exercise joint control or significant influence on the investee, such

investments should be accounted for according to the provisions on the recognition and measurement of financial

instruments and the difference between fair value and book value on the date of loss of the control should be

included in the current profit and loss.

Where the disposed equities are acquired by the enterprise combination due to the reasons such as additional

investment, the remaining equities after the disposal are calculated based on the cost method or equity method in

preparing the individual financial statements, and other comprehensive income and other owners' equity

recognized because of the equity method adopted for the calculation of the equity investment held prior to the

purchase date are carried forward in proportion; the remaining equities after the disposal are changed to be made

in accordance with the relevant provisions in the recognition and measurement criteria of financial instruments

while other comprehensive income and other owners' equity are carried forward in full.

15. Investment property

Measurement mode

Measured by cost method

Depreciation or amortization method

Investment properties are properties to earn rentals or for capital appreciation or both. Examples include land

leased out under operating leases, land held for long-term capital appreciation, buildings leased out under

operating leases, (including buildings that have been constructed or developed for future lease out under operating

leases, and buildings that are being constructed or developed for future lease out under operating leases).

The Company measures the existing investment properties by using the cost model. For investment property

measured by using the cost model, the buildings for lease shall be depreciated by using policies the same as used

for fixed assets of the Company, and the land use rights for lease shall be amortized by using the same policies as

applicable to intangible assets.

85

司公限有份股心中游旅海东大南海                                 2017 文全告报度年年

16. Fixed assets

(1) Recognition criteria of fixed assets

Fixed assets refer to the tangible assets held for the purpose of producing commodities, rendering services, renting

or business management with useful lives exceeding one year. Fixed assets are recognized when they

simultaneously meet the following conditions:

(1)  It is probable that the economic benefits relating to the fixed assets will flow into the Company; and

(2)  The costs of the fixed asset can be measured reliably.

(2) Depreciation method of fixed assets

Yearly depreciation

Asset type    Depreciation method    Year for depreciation   Residual value rate

rate

Houses and buildings Straight-line method  20-40           5             4.75-2.37

Mechanical equipment Straight-line method  8-20            5             11.87-4.75

Entertainment

Straight-line method  5-16            5             19-5.93

equipment

Transportation

Straight-line method  7-12            5             13.57-7.91

equipment

Other equipment    Straight-line method  8             5             11.87

(3) Reorganization basis, valuation and depreciation method for financial lease assets

17. Construction in progress

Does the Company need to comply with the disclosure requirement of the special industry

No

The book-entry values of the fixed assets are stated at total expenditures incurred before reaching working

condition for their intended use. For construction in progress that has reached working conditions for its intended

use but for which the completion of settlement has not been handled, it shall be transferred into fixed assets at the

estimated value according to the project budget, construction price or actual cost, etc. from the date when it

reaches the working conditions for its intended use. The fixed assets shall be depreciated in accordance with the

Company’s policy on fixed asset depreciation. Adjustment shall be made to the originally and provisionally

estimated value based on the actual cost after the completion of settlement is handled, but depreciation already

provided will not be adjusted.

18. Borrowing costs

1. Recognition principles of capitalization of borrowing costs

86

司公限有份股心中游旅海东大南海                              2017 文全告报度年年

Borrowing costs include the interest of borrowings, the amortization of discount or premium, auxiliary expenses,

exchange differences incurred by foreign currency borrowings, etc.

The borrowing costs incurred to the Company and directly attributable to the acquisition and construction or

production of assets eligible for capitalization should be capitalized and recorded into relevant asset costs; other

borrowing costs should be recognized as costs according to the amount incurred and be included into the current

profit and loss.

Assets eligible for capitalization refer to fixed assets, investment property, inventories and other assets which may

reach their intended use or sale status only after long-time acquisition and construction or production activities.

Borrowing costs may be capitalized only when all the following conditions are met at the same time:

(1)   Asset disbursements, which include those incurred by cash payment, the transfer of non-cash assets or the

undertaking of interest-bearing debts for acquiring and constructing or producing assets eligible for capitalization,

have already been incurred;

(2)   Borrowing costs have already been incurred;

(3)   Purchase, construction or manufacturing activities that are necessary to prepare the assets for their

intended use are in progress.

2. Capitalization period of borrowing costs

Capitalization period refers to the period from commencement of capitalization of borrowing costs to its cessation;

period of suspension for capitalization is excluded.

Capitalization of borrowing costs should cease when the acquired and constructed or produced assets eligible for

capitalization have reached the working condition for their intended use or sale.

When some projects among the acquired and constructed or produced assets eligible for capitalization are

completed and can be used separately, the capitalization of borrowing costs of such projects should be ceased.

If all parts of the acquired and constructed or produced assets are completed but the assets cannot be used or sold

externally until overall completion, the capitalization of borrowing costs should be ceased at the time of overall

completion of the said assets.

3. Period of suspension for capitalization

If the acquisition and construction or production activities of assets eligible for capitalization are abnormally

interrupted and such condition lasts for more than three months, the capitalization of borrowing costs should be

suspended; if the interruption is necessary procedures for the acquired, constructed or produced assets eligible for

capitalization to reach the working conditions for its intended use or sale, the borrowing costs continue to be

capitalized. Borrowing costs incurred during the interruption are recognized as the current profit and loss and

continue to be capitalized until the acquisition, construction or production of the asset restarts.

4. Calculation of capitalization amount of borrowing costs

As for special borrowings borrowed for acquiring and constructing or producing assets eligible for capitalization,

borrowing costs of special borrowing actually incurred in the current period less the interest income of the

borrowings unused and deposited in bank or return on temporary investment should be recognized as the

capitalization amount of borrowing costs.

As for general borrowings used for acquiring and constructing or producing assets eligible for capitalization, the

87

司公限有份股心中游旅海东大南海                         2017 文全告报度年年

interest of general borrowings to be capitalized should be calculated by multiplying the weighted average of asset

disbursements of the part of accumulated asset disbursements exceeding special borrowings at end of each month

by the capitalization rate of used general borrowings. The capitalization rate is calculated by weighted average

interest rate of general borrowings.

As for borrowings with discount or premium, the to-be-amortized discount or premium in each accounting period

should be recognized by effective interest rate method, and the interest for each period should be adjusted.

19. Biological assets

20. Oil-and-gas assets

21. Intangible assets

(1) Valuation method, useful lives and impairment

1 ....

Valuation method of intangible assets

(1)       The Company initially measures intangible assets at cost on acquisition;

The costs of externally purchased intangible assets include purchase prices, relevant taxes and surcharges and

other directly attributable expenditures incurred to prepare the assets for their intended use. If the payment for an

intangible asset is delayed beyond the normal credit conditions and it is of the financing nature, the cost of the

intangible asset shall be determined on the basis of the current value of the purchase price.

For an intangible asset obtained in debt restructuring by a debtor for the settlement of relevant liability, the

book-entry value shall be initially recognized based on the fair value of the intangible asset. Difference between

the book value of restructured debts and the fair value of the intangible asset used for debt off-set shall be

included in the current profit or loss;

On the premise that non-monetary assets trade is of commercial nature and the fair value of the assets traded in or

out can be measured reliably, the intangible assets traded in with non-monetary assets should be recognized at the

fair value of the assets traded out, unless any unambiguous evidence indicates that the fair value of the assets

traded in is more reliable; as to the non-monetary assets trade not meeting the aforesaid premise, the book value of

the assets traded out and related taxes and surcharges payable should be recognized as the cost of the intangible

assets, with gains or losses not recognized.

For intangible assets acquired from business combination under common control, the initial book value are

initially recognized at the book value of the combinee; for intangible assets acquired from business combination

not under common control, the initial book value are initially recognized at the fair value.

Costs of intangible assets developed internally and independently include: the costs of materials and labor services

used to develop the intangible assets, the registration fee, the amortization of other patents and franchise used in

the process of development, the interest expenses meeting the condition for capitalization, and other direct

expenses for preparing the intangible assets for their intended use.

88

司公限有份股心中游旅海东大南海                                      2017 文全告报度年年

(2)   Subsequent measurement

The useful lives of the intangible assets are analyzed and determined on their acquisition.

For intangible assets with definite useful lives, the Company shall adopt the straight-line method for amortization

within the period during which they can bring economic benefits to the Company; where the period during which

they can bring economic benefits to the Company cannot be forecast, those intangible assets shall be deemed as

assets with indefinite lives and no amortization will be made.

2. Estimates of useful lives of intangible assets with definite useful lives

Item               Estimated useful lives                  Basis

Land use rights                     50 years              Use term for the land use right title

The useful life and amortization method of intangible assets with limited useful life are reviewed at the end of

each period.

Upon review, the useful lives and amortization method of the intangible assets as at the end of the year were not

different from those estimated before.

3. Judgment basis for intangible assets with indefinite useful lives

As at the balance sheet date, the Company has no intangible assets with indefinite useful lives.

Note: explain the measurement of intangible assets. Explain the estimation condition for use of life, while the intangible assets have

limited service life. If the intangible assets have uncertain use of life, explain the judgment basis and procedures for use of life

(2) Accounting policy of internal R&D expenditures

22. Impairment of long-term assets

For the long-term equity investments, investment properties, fixed assets, construction in progress, intangible

assets, and other long-term assets measured at cost model, if there are signs of impairment, an impairment test will

be conducted on the balance sheet date. If impairment test results indicate that the recoverable amounts of the

assets are lower than their book value, the provision for impairment is made based on the differences, which are

recognized as impairment losses. The recoverable amounts of intangible assets are the higher of their fair values

less costs to sell and the present values of the future cash flows expected to be derived from the assets. The assets

impairment provision is calculated and made on an individual basis. If it is difficult for the Company to estimate

the recoverable amount of the individual asset, the recoverable amount of an asset group to which the said asset

belongs to will be determined. Asset group is the minimum combination of assets that can independently generate

cash inflows.

After the losses from asset impairment are recognized, they are not reversed in subsequent periods.

23. Long-term deferred expenses

Long-term deferred expenses refer to various expenses which have been already incurred but will be born in the

reporting period and in the future with an amortization period of over one year.

1. Amortization method

Long-term deferred expenses are evenly amortized over the beneficial period

2. Amortization period

89

司公限有份股心中游旅海东大南海                              2017 文全告报度年年

Item                        Amortization period

Hotel exterior decoration                                             4 年

Fire stairs renovation                                               4 年

C FLOOR ROOM RENOVATION                                               5 年

Villa renovation                                                  5 年

Swimming pool renovation                                              5 年

24. Employee compensation

(1) Accounting method for short-term compensation

During the accounting period when employees serve the Company, the actual short-term compensation is

recognized as liabilities and included in current profit and loss or costs associated with assets.

The appropriate amount of employee compensation payable will be determined during the accounting period

when the employees provide services for the Company based on the medical insurance, work injury insurance and

maternity insurance and other social insurance and housing fund paid by the Company for employees, as well as

trade union funds and employee education funds withdrawn according to provisions at the accrual basis and

accrual ratio.

The employee benefits in the non-monetary form shall be measured at fair value.

(2) Accounting method for post-employment benefits

Where the Company cannot unilaterally withdraw the dismissal welfare offered in view of the cancellation of the

labor relation plan or the layoff proposal, or recognizes the cost or expenses as to the restructuring involving the

payment of dismissal welfare (whichever is earlier), the employee compensation arising from the dismissal

welfare should be recognized as the liabilities and charged to the current profit or loss.

(3) Accounting method for dismiss welfare

The Company will pay basic old-age insurance and unemployment insurance in accordance with relevant

provisions of the local government for employees. During the accounting period when they provide services for

the Company, the amount payable will be calculated at the basis and proportion specified by local authorities,

recognized as a liability and charged into current profit and loss or costs associated with assets.

(4) Accounting method for other long-term employee welfare

25. Estimated liabilities

When the Company is involved in litigation, debt guarantees, loss-making contract, reorganization matters, if such

90

司公限有份股心中游旅海东大南海                             2017 文全告报度年年

matters are likely to be satisfied by delivery of assets or provision of services in the future and the amount can be

measured reliably, they shall be recognized as estimated liabilities.

1. Recognition criteria for estimated liabilities

When an obligation relating to a contingency meets all the following conditions at the same time, it is recognized

as an estimated liability:

(1)   Such obligation is a present obligation of the Company;

(2) The performance of such obligation may well cause outflows of economic benefits from the Company; and

(3)   The amount of such obligation can be measured reliably.

2. Measurement method of estimated liabilities

The estimated liabilities of the Company are initially measured as the best estimate of expenses required for the

performance of relevant present obligations.

When the Company determines the best estimate, it should have a comprehensive consideration of risks with

respect to contingencies, uncertainties and the time value of money. If the time value of money is significant, the

best estimates will be determined after discount of relevant future cash outflows.

The best estimates shall be treated as follows in different circumstances:

If there is continuous range (or interval) for the necessary expenses, and probabilities of occurrence of all the

outcomes within this range are equal, the best estimates will be determined at the average amount of upper and

lower limits within the range.

If there is no continuous range (or interval) for the necessary expenses, or probabilities of occurrence of all the

outcomes within this range are unequal despite such a range exists, in case that the contingency involves a single

item, the best estimate shall be determined at the most likely outcome; if the contingency involves two or more

items, the best estimate should be determined according to all the possible outcomes with their relevant

probabilities.

When all or part of the expenses necessary for the settlement of estimated liabilities of the Company are expected

to be compensated by a third party, the compensation shall be separately recognized as an asset only when it is

virtually certain to be received. The compensation recognized shall not exceed the book value of the estimated

liabilities.

26. share-based payment

Nil

27. Other financial instrument as preferred stock and perpetual bond etc.

Nil

91

司公限有份股心中游旅海东大南海                            2017 文全告报度年年

28. Revenue

Does the Company need to comply with the disclosure requirement of the special industry

Nil

1. Recognition and measurement principles for revenues from sale of goods

(1)  General recognition and measurement principles for revenue from sales of goods

Income from sales of goods is recognized when the Company has transferred to the buyer the significant risks and

rewards of ownership of the goods; the Company retains neither continuous management rights associated with

ownership of the goods sold nor effective control over the goods sold; the relevant amount of income can be

measured reliably; it is highly likely that the economic benefits associated with the transaction will flow into the

Company; and the relevant amount of cost incurred or to be incurred can be measured reliably.

(2)  Recognition criteria and time of revenue from sale of goods of the Company

In the provision of hotel housing services at the same time, the Company provides goods to customers and will

prepare daily sales list after confirming with the Rooms Department and the hotel front desk. Based on the sales

list, the finance department confirms that the major risks and rewards of ownership of the goods have been

transferred to the customer and then the sales revenue is recognized.

2. Recognition and measurement principles of revenue from rendering of service

(1)  For the hotel rooms, catering (breakfast) and other services to be provided by the Company, after they are

provided, and the Company checks with the sales department and the front check, the Company will prepare the

daily sales reports and accounts receivable list to the finance department, which will review the same, after which,

the revenue will be recognized.

(2)  For the revenue from restaurants and venues contracted out, they will be recognized in accordance with the

period stipulated in the contract or agreement and the collection timing.

3. Recognition basis for revenue from transfer of right to use assets

When the economic benefit related to the transaction is probably to flow into the Company and the relevant

revenue can be reliably measured, the revenue from transfer of the asset use right is determined as follows: the

revenue from transferring use right of assets shall be recognized based on the following circumstances:

(1)  The amount of interest income is determined based on the time and effective interest rate for others to use

the monetary funds of the Company.

(2)  The amount of revenue from usage is determined based on the charging time and method as agreed in

relevant contract or agreement.

29. Government subsidies

(1) Judgment criteria and accounting method for government subsidies related to assets

Set off the book value of related assets or be recognized as deferred income. Government subsidies related to

assets are recognized as deferred income to be evenly distributed over the useful lives of the relevant assets and

92

司公限有份股心中游旅海东大南海                             2017 文全告报度年年

shall be recorded in current profit or loss by stages in a reasonable and systematic manner. Government subsidies

measured in nominal amounts, are directly included in current profits and losses.

Where relevant assets are sold, transferred, scraped or damaged before the end of their lives, balance of the

unallocated deferred income is transferred to the current profit and loss on asset disposal.

(2) Judgment criteria and accounting method for government subsidies related to income

1)   To be used as compensation for future costs, expenses or losses are recognized as deferred income and are

recorded in current profits and losses or used to write off the related costs where the relevant costs, expenses or

losses are recognized.

2)   To be used to compensate the related costs, expenses or losses incurred by the Company are directly

included in current profit and loss or used to write off the related costs.

3)   Accounting treatment will be conducted for government subsidies that at the same time include those

associated with assets and income by different parts: if it is difficult to distinguish, they will be deemed as

government subsidies associated with income.

30.    Deferred income tax assets and deferred income tax liabilities

Deferred income tax assets are recognized for deductible temporary differences to the extent that it shall not

exceed the taxable income probably obtained in future period to be against the deductible temporary difference.

Taxable temporary differences are recognized as deferred tax liabilities except in special circumstances.

Special circumstances in which deferred assets or deferred tax liabilities cannot be recognized include: the initial

recognition of goodwill; other transactions or matters excluding business combinations, which affect neither

accounting profits nor the taxable income (or deductible losses) when occurred.

When the Company has the statutory right to do settlement with the net amounts, and has the intention to do so or

the recovery of assets and the settlement of liabilities are achieved simultaneously, the Company shall present its

current income tax assets and current income tax liabilities at the net amounts as the result of one offsetting

another.

When the Company has the legal right for netting of current income tax assets and current income tax liabilities

and the income tax assets and income tax liabilities are related to the income tax levied on the same taxpayer by

the same tax administrative department or are related to different taxpayers but, within each future period of

reversal of important income tax assets and income tax liabilities, the taxpayers involved intend to settle current

income tax assets and current income tax liabilities or acquire assets and liquidate liabilities at the same time, the

Company's income tax assets and income tax liabilities shall be presented at the net amount after the offset.

93

司公限有份股心中游旅海东大南海                                   2017 文全告报度年年

31. Lease

(1) Accounting treatment of operating lease

1. Accounting treatment of assets leased

The rental fees paid for the asset leased by the Company will be amortized over the entire lease term without

deducting rent-free period according to the straight-line method and included in the expenses for the current

period. The initial direct costs related to the lease transactions paid by the Company are recorded in the current

expenses.

When the lessor bears the lease related expenses which shall be undertook by the Company, the Company shall

deduct this part of the expense from the rent and amortize the net amount over the lease term and charge into

current costs or expenses.

2. Accounting treatment of leasing-out assets

Lease fees received by the Company from leasing assets shall be amortized at straight-line method over the whole

lease period including rent-free period, and shall be recognized as lease income. Initial direct costs relating to

lease transactions incurred by the Company shall be recognized as the current expenses; if the amounts are

material, they shall be capitalized and included in the current income on the same basis as the recognition of lease

income.

When the Company bears the lease related expenses which should be undertook by the lessee, the Company shall

deduct this part of expense from the rent income, and amortize the net amount over the lease term.

(2) Accounting treatment of finance lease

32. Other principal accounting policies and accounting estimates

33. Changes to principal accounting policies and accounting estimates

(1) Changes in principal accounting policies

√ Applicable □ Not applicable

Changes of accounting policies and reasons               Approval procedures     Note

The Accounting Standards for Business Enterprises No.16 - Government Subsidies (Cai Kuai [2017]               The

No.15) issued and revised by the Ministry of Finance have been implemented by enterprises adopting             above-mentio

the Accounting Standards for Business Enterprises since June 12, 2017; therefore, for the government             ned changes in

subsidies on January 1, 2017, the prospective application method shall apply for their accounting N/A            accounting

treatment; the Accounting Standards for Business Enterprises No.42 - Held-for-sale Non-current               policies have

Assets and Disposal Group and Termination of Operation issued by the Ministry of Finance in 2017               no impacts on

have been implemented by enterprises adopting the Accounting Standards for Business Enterprises               those figures

94

司公限有份股心中游旅海东大南海                                    2017 文全告报度年年

since May 28, 2017; therefore, for the held-for-sale non-current assets and disposal group and                 listed in the

termination of operation existing on the implementation date, the prospective application method                 Company’s

shall be applied for accounting treatment. On December 25, 2017, the Ministry of Finance issued the               financial

Circular of the Ministry of Finance on Revising the Format of General Financial Statements (Cai                 statements

Kuai [2017] No.30), which revised the format of general financial statements, and applied to the

financial statements in 2017 and afterwards.

(2) Changes in principal accounting estimates

□ Applicable √ Not applicable

34. Other

VI. Taxation

1. Major tax types and tax rates

Taxes                    Basis for tax assessment                     Tax rate

Output VAT is calculated based on taxable sales revenue and service revenue

Value added                                                 5%, 6%, 11% and

calculated in accordance with tax laws and VAT payable or taxable sales revenue

tax(VAT)                                                   17%

shall be the difference after deducting the input VAT deductible in the same period

Urban

maintenance and   Levied based on VAT payable                              7%

construction tax

Enterprise

Levied based on taxable income                             25%

income tax

Business tax     Levied based on the taxable business income                      5%

Education surtax   Levied based on VAT payable                              3%

Local educational

Levied based on VAT payable                              2%

surcharge

Housing property   Remaining value after deducting 30% from the original value of the house

1.2%, 12%

tax         (including the occupied land price) and rental income

Land use tax     Land area

Disclose reasons for different taxpaying body

Nil

2. Tax preference

3. Other

VII. Notes to the items of financial statements

95

司公限有份股心中游旅海东大南海                                     2017 文全告报度年年

1. Monetary Fund

In RMB/CNY

Item                   Ending balance              Beginning balance

Cash on hand                                 264,156.33                 273,523.86

Bank deposits                              9,417,450.83                 26,936,724.15

Total                                  9,681,607.16                 27,210,248.01

Other explanation: Nil

Remark: there are no amounts restricted for use due to mortgage or freeze, deposited in overseas institutions, and have potential risk

in recovery.

2. Financial assts measured by fair value and with its variation reckoned into current gains/losses

Nil

3. Derivative financial assets

□ Applicable √ Not applicable

4. Note receivable

Nil

5. Accountsreceivable

(1) Disclosure of account receivables by category

In RMB/CNY

Ending balance                         Beginning balance

Book balance      Provision for bad debt            Book balance      Provision for bad debt

Category

Book value                         Provisi Book value

Proportio           Provisio                 Proportio

Amount           Amount                  Amount           Amount     on

n              n ratio                  n

ratio

Accounts

receivable

with

significan

100.00

t single                                       1,466,400.49   50.22%   1,466,400.49

%

amount

subject to

provision

for bad

96

司公限有份股心中游旅海东大南海                                  2017 文全告报度年年

debts on a

single

basis

Accounts

receivable

with

provision                                                            52.50

662,651.14 100.00%   68,520.25   10.34%   594,130.89   1,453,566.38   49.78%   763,121.66        690,444.72

for bad                                                               %

debts

based on

portfolios

76.35

Total       662,651.14 100.00%   68,520.25   10.34%   594,130.89   2,919,966.87   100.00%  2,229,522.15        690,444.72

%

Account receivable with single significant amount and withdrawal bad debt provision separately at period-end:

□ Applicable √ Not applicable

In the portfolio, accounts receivable with the allowance for bad debts made under the aging analysis method:

√ Applicable □ Not applicable

In RMB/CNY

Ending balance

Aging

Accounts receivable       Provision for bad debt     Provision proportion

Within 1 year

Subtotal within 1 year               572,263.34

1-2 years                         785.00               39.25              5.00%

2-3 years                       18,633.00             2,794.95             15.00%

3-4 years                        3,397.00              849.25            25.00%

4-5 years                        5,472.00             2,736.00             50.00%

Over 5 years                     62,100.80             62,100.80            100.00%

Total                        662,651.14             68,520.25

Explanation on combination determines:

In combination, withdrawal proportion of bad debt provision based on balance proportion for account receivable

□ Applicable √ Not applicable

In combination, withdrawal proportion of bad debt provision based on other methods for account receivable:

Nil

(2) Provision, reversal or recovery of provision for bad debts in 2017

The provision for bad debts amounts to RMB15, 211.00 in 2017; re-versal or recovery of provision for bad debts amounts to RMB

97

司公限有份股心中游旅海东大南海                                   2017 文全告报度年年

Including major re-versal or recovery of provision for bad debts amounts to RMB in the period: Nil

(3) Accounts receivable actually written off in 2017

In RMB/CNY

Item                            Written-off amount

Accounts receivable                                                  2,176,212.90

Including major receivables written-off:

In RMB/CNY

Nature of

Written-off   Reasons for   Write-off procedures     Whether it is due to the

Name of entity     accounts

amount     written-off     performed       related party transactions

receivable

Approval of the board

Power supply      Room and                     of directors and the

775,304.98  Irrecoverable               No

company       meal charge                    general meeting of

shareholders

Approval of the board

Room and                     of directors and the

HMIT                   464,563.21  Irrecoverable               No

meal charge                    general meeting of

shareholders

Approval of the board

Room and                     of directors and the

Southern Cross               124,879.98  Irrecoverable               No

meal charge                    general meeting of

shareholders

Approval of the board

Sanya Municipal

Room and                     of directors and the

Party Committee              101,652.32  Irrecoverable               No

meal charge                    general meeting of

Reception Office

shareholders

Approval of the board

Hainan Baoping     Room and                     of directors and the

46,798.32  Irrecoverable               No

Travel Agency     meal charge                    general meeting of

shareholders

Approval of the board

Other 157       Room and                     of directors and the

663,014.09  Irrecoverable               No

companies       meal charge                    general meeting of

shareholders

Total           --      2,176,212.90     --         --              --

Explanation:

In accordance with the “Plan of Underwriting Long-term Investment and Intercourse Funds”, deliberated and

approved by 12th extraordinary meeting of 8th BOD held on 25 October 2017 and the 3rd extraordinary general

shareholders meeting dated 10 November 2017, the long-term equity investment, which have totally provision

previsous year, and the financial assets availabel for sale and some of the creditors rights are been wirtten off in

98

司公限有份股心中游旅海东大南海                                       2017 文全告报度年年

the period. Meanwhile, part of the long-term unpayable are underwirtten. Among the account underwirtten, the

long-term equtiy investment amounted as 9,716,374.26 Yuan, financial assets availabel for sale amounted as

5,000,000.00 Yuan, account receivable amounted as 2,176,212.90 Yuan, other receivables amounted as

78,067,592.72 Yuan, account payables amounted as 375,553.60 Yuan, account received in advance amounted as

251,057.21 Yuan and other payables amounted as 676,929.30. Non-operating revenue arising from the

underwiritng amounted as 1,303,540.11 Yuan.

(4) Top five accounts receivable in terms of ending balance collected by the debtor

Relationship with the    Book             Proportion in total amount of

Name of entity                               Aging

Company      balance(RMB)           accounts receivable (%)

Shanghai   Hecheng   International  Non-related party       280,668.00 Within 1 year             42.36

Travel Service Co., Ltd.

Luoniushan Co., Ltd.             Non-consolidated       166,412.00 Within 1 year             25.11

related party

Guangzhou Institute of Design        Non-related party       38,980.00 Over 5 years              5.88

Tianjin Watermelon Tourism Limited     Non-related party       33,072.94 Within 1 year             4.99

Liability Company

Yilong    Network     Information  Non-related party       25,581.00 Within 1 year             3.86

Technology Co., Ltd.

Total                         544,713.94                    82.20

(5) Account receivable derecognition due to financial assets transfer

Nil

(6) Assets and liabilities resulted by account receivable transfer and continues involvement

Nil

6. Advances to suppliers

(1) Advances to suppliers presented by aging

In RMB/CNY

Ending balance                   Beginning balance

Aging

Amount           Proportion        Amount           Proportion

Within 1 year                 49530.21          100.00%          58783.23         100.00%

1-2 years

2-3 years

99

司公限有份股心中游旅海东大南海                                    2017 文全告报度年年

Over 3 years

Total                   49530.21       --               58783.23         --

Explanation on reasons of failure to settle on important advance payment with age over one year:

Nil

(2) Top five advances to suppliers in terms of the ending balance collected by the prepaid object

Prepaid object          Ending balance    Proportion in total ending balance of advance to

(RMB)               suppliers (%)

China Post Group Corporation Sanya Branch         10,800.00                         21.80

Sinopec Petrochemical Sales Co., Ltd. Hainan       10,098.85                         20.39

Sanya Branch

Hangzhou Xiruan Technology Co., Ltd.           10,062.90                         20.32

Sanya Daily                         9,729.73                         19.64

Sunshine Property Insurance Co., Ltd. Hainan        8,838.73                         17.85

Branch

Total                 49,530.21                         100.00

7. Interest receivable

Nil

8. Dividend receivable

Nil

9. Other receivables

(1) Other receivables disclosed by category

In RMB/CNY

Ending balance                       Beginning balance

Provision for bad                   Provision for bad

Book balance                       Book balance

debt                           debt

Category                               Book                           Book

Provisi

value                  Provision    value

Proport  Amoun    on          Amo   Proport

Amount                                    Amount   proportio

ion    t    proport         unt   ion

n

ion

Other receivables                                 77,36

98.85   77,363,

with significant                                 3,143               100.00%

%   143.31

single amount and                                  .31

100

司公限有份股心中游旅海东大南海                                        2017 文全告报度年年

individual

allowance for bad

debts

Other receivables

with provision for           100.00 21,147.   13.16   139,56   903,2       729,098           174,103.

160,709.19                             1.15%           80.72%

bad debts based on             %    90     %      1.29   02.33           .81             52

portfolio

78,26

100.00 21,147.   13.16   139,56       100.00   78,092,           174,103.

Total           160,709.19                         6,345                99.78%

%    90     %      1.29          %    242.12             52

.64

Other receivables with insignificant single amount but with individual provision for bad debts at period-end

□ Applicable √ Not applicable

Other receivables with provision for bad debts made by aging analysis method in portfolios:

√ Applicable □ Not applicable

In RMB/CNY

Ending balance

Aging

Other receivables         Provision for bad debt         Provision proportion

Within 1 year

Subtotal within 1 year               139,111.29

3-4 years                       600.00                 150.00               25.00%

Over 5 years                     20,997.90             20,997.90               100.00%

Total                       150,709.19             21,147.90                14.03%

Explanations on combination determine:

In combination, withdrawal proportion of bad debt provision based on balance proportion for other account receivable:

□ Applicable √ Not applicable

In combination, withdrawal proportion of bad debt provision based on other methods for other account receivable:

□ Applicable √ Not applicable

(2) Provision, reversal or recovery of provision for bad debts in 2017

The provision for bad debts in 2017 amounted to RMB-3,501.50.reversal or recovery of provision for bad debts amounted to RMB

Including major amount reversal or recovery: Nil

(3) Other receivables actually written off in 2017

In RMB/CNY

Item                             Written-off amount

Other receivables                                                     78,067,592.72

Including major written-off other receivables:

101

司公限有份股心中游旅海东大南海                                2017 文全告报度年年

In RMB/CNY

Whether it is

Write-off

Nature of other  Written-off   Reasons for             due to the

Name of entity                                procedures

receivables    amount     written-off             related party

performed

transactions

Approval of the

board of

Hainan Dadonghai Tourism   Arrears and litigation          Irrecoverab directors and

54,767,945.15                   Yes

Company           advances                 le      the general

meeting of

shareholders

Approval of the

Dividends to be

board of

recovered due to

94-98 dividends distributed                       Irrecoverab directors and

punishment by the China 16,899,000.00                   Yes

in cash                                 le      the general

Securities Regulatory

meeting of

Commission

shareholders

Approval of the

board of

Contract revenue

Irrecoverab directors and

HMIT             originally falsely     4,145,704.16                   Yes

le      the general

included

meeting of

shareholders

Approval of the

board of

Guangdong Jinma Tourism   Dividends receivable           Irrecoverab directors and

1,200,494.00                   No

Co., Ltd.           and interest thereon           le      the general

meeting of

shareholders

Approval of the

board of

Shareholders custodian          Irrecoverab directors and

Shareholders custodian fees               350,000.00                    No

fees                   le      the general

meeting of

shareholders

Approval of the

board of

Consumption amounts           Irrecoverab directors and

Other 36 companies                    704,449.41                    No

and deposits               le      the general

meeting of

shareholders

Total                   --     78,067,592.72    --       --          --

Explanation: Nil

102

司公限有份股心中游旅海东大南海                                 2017 文全告报度年年

(4) Classification of other receivables by the nature of payment

In RMB/CNY

Nature of Payment       Book balance as at December 31, 2017     Book balance as at January 1, 2017

Current accounts between original

54,767,945.15

related entities

Contract profit receivable                                           4,145,704.16

Declared dividends receivable                                         16,899,000.00

Equity transaction amount                                            1,200,494.00

Deposit                                   600.00                563,818.99

Custody fee advances                                               350,000.00

Other current accounts                                               23,114.20

Petty cash                               49,281.48                 78,772.22

Water and electricity expenses                     70,809.03                164,165.49

Shared amounts                                                   30,500.00

Social insurance and housing provident

40,018.68                 37,831.43

funds

Project funds                                                    3,700.00

Deposit for invoices                                                 1,300.00

Total                                 160,709.19               78,266,345.64

(5) Top 5 other receivables at ending balance by arrears party

Nil

(6) Account receivables related to government subsidies

Nil

(7) Other receivable for termination of confirmation due to the transfer of financial assets

Nil

(8) The amount of assets and liabilities that are transferred other receivable and continued to be involved

Nil

10. Inventories

Whether the Company needs to comply with disclosure requirement of real estate industry

No

103

司公限有份股心中游旅海东大南海                                   2017 文全告报度年年

(1) Classification of inventory

In RMB/CNY

Ending balance                     Beginning balance

Item               Provision for                      Provision for

Book balance             Book value     Book balance             Book value

price decline                      price decline

Stocked

880,621.58    735,181.58    145,440.00     876,822.10    742,966.17     133,855.93

materials

Stock

22,771.38     11,102.41     11,668.97      22,771.38     11,102.41     11,668.97

commodities

Food and

45,640.74             45,640.74      52,660.42              52,660.42

beverage

Fuel           24,255.40             24,255.40      20,994.40              20,994.40

Total           973,289.10    746,283.99    227,005.11     973,248.30    754,068.58     219,179.72

Does the Company comply with the disclosure requirement of “Information Disclosure Guidelines of Shenzhen Stock Exchange

No.4  – Listed Companies Engaged in Seed Industry and Planting Business”  or not

(2) Provision for inventory depreciation

In RMB/CNY

Increase in 2017           Decrease in 2017

Category of    Beginning

Ending balance

inventories     balance                       Reversal or

Provision     Others                 Others

write-off

Raw materials       742,966.17                         7,784.59             735,181.58

Stock

11,102.41                                           11,102.41

commodities

Total           754,068.58                         7,784.59             746,283.99

(3) Explanation on capitalization of borrowing costs at ending balance of inventory

(4) Assets completed without unsettlement from construction contract at period-end

Nil

11. Assets held for sale

Nil

12. Non-current assets maturing within one year

In RMB/CNY

104

司公限有份股心中游旅海东大南海                                       2017 文全告报度年年

Item                  Ending balance                Beginning balance

Long-term unamortized expenses

1,173,597.68                   584,369.42

amortized within one year

Total                                       1,173,597.68                   584,369.42

Other explanation: Hotel exterior repair, and transformation of guest rooms, swimming pools and others

13. Other current assets

In RMB/CNY

Item                  Ending balance                Beginning balance

Prepaid enterprise income tax                           1,702,702.80                   1,702,702.80

Input tax to be deducted                             255,160.76                    173,746.42

Total                                       1,957,863.56                   1,876,449.22

Other explanation: nil

14. Available-for-sale-financial assets

(1) Available-for-sale financial assets

In RMB/CNY

Ending balance                     Beginning balance

Item         Book     Provision for                      Provision for

Book value   Book balance                Book value

balance    impairment                       impairment

Available-for-sale

5,000,000.00      5,000,000.00

equity instruments:

Measured at cost                                   5,000,000.00      5,000,000.00

Total                                         5,000,000.00      5,000,000.00

(2) Available-for-sale financial assets measured at fair value at December 31, 2017

Nil

))))3333(((( Available-for-sale financial assets measured at cost at December 31, 2017

In RMB/CNY

Book balance                 Provision for impairment

P           Incre                Sharehold   Cash

Incre                                     Peri   ing ratio dividen

Investee          Period         Decrease in  e    Period     ase    Decrease in         in the   d in

ase in                                    od-

beginning         2017    r   beginning    in     2017          investee   2017

2017                                     end

i           2017

105

司公限有份股心中游旅海东大南海                                 2017 文全告报度年年

o

d

-

e

n

d

Shenzhen Difu

Investment

5,000,000.00    5,000,000.00     5,000,000.00     5,000,000.00       14.28%

Development

Co., Ltd.

Total          5,000,000.00    5,000,000.00     5,000,000.00     5,000,000.00         --

(4) Changes of impairment in Period

Nil

(5) where the fair value of equity instruments available for sale drops significantly or not contemporarily at

period-end, without impairment provision is made

Nil

15. Investment held-to-maturity

(1) Details of investment held-to-maturity

In RMB/CNY

Ending balance                   Beginning balance

Item       Book   Provision for

Book value   Book balance     v         Book value

balance impairment

Hubei Jingsha

Dadonghai Club                              4,566,207.42   4,566,207.42

Co., Ltd.

Sanya Shun’an

Entertainment                               5,150,166.84   5,150,166.84

Center

Total                                   9,716,374.26   9,716,374.26

106

司公限有份股心中游旅海东大南海                                   2017 文全告报度年年

(2) Major investment held-to-maturity at period-end

nil

(3) Investment held-to-maturity re-classify in the period

Other explanation

In accordance with the “Plan of Underwriting Long-term Investment and Intercourse Funds”, deliberated and approved by 12th

extraordinary meeting of 8th BOD held on 25 October 2017 and the 3rd extraordinary general shareholders meeting dated 10

November 2017, the long-term equity investment, which have totally provision previsous year, and the financial assets availabel for

sale and some of the creditors rights are been wirtten off in the period. Meanwhile, part of the long-term unpayable are underwirtten.

Among the account underwirtten, the long-term equtiy investment amounted as 9,716,374.26 Yuan, financial assets availabel for sale

amounted as 5,000,000.00 Yuan, account receivable amounted as 2,176,212.90 Yuan, other receivables amounted as 78,067,592.72

Yuan, account payables amounted as 375,553.60 Yuan, account received in advance amounted as 251,057.21 Yuan and other

payables amounted as 676,929.30. Non-operating revenue arising from the underwiritng amounted as 1,303,540.11 Yuan.

16. Long-term receivables

Nil

17. Long-term equity investment

Nil

18. Investment property

(1) Investment properties measured at cost

√ Applicable □ Not applicable

In RMB/CNY

Buildings and                   Construction in

Item                     Land use rights                      Total

constructions                     process

1. Original book value

1.Beginning

18,856,504.44       5,662,740.59                     24,519,245.03

balance

2.Increase in 2017

(1) Purchase

(2) Transfer

from inventories/fixed

assets/construction in

process

(3) Increase from

107

司公限有份股心中游旅海东大南海             2017 文全告报度年年

business combinations

3.Decrease in

2017

(1) Disposal

(2) Other

transfer-out

4.Ending balance    18,856,504.44 5,662,740.59       24,519,245.03

II. Accumulated

depreciation and

accumulated

amortization

1.Beginning

9,771,216.42 2,107,046.45       11,878,262.87

balance

2.Increase in 2017     418,183.56   56,340.00        474,523.56

(1) Provision or

418,183.56   56,340.00        474,523.56

amortization

3.Decrease in

2017

(1) Disposal

(2) Other

transfer-out

4.Ending balance    10,189,399.98 2,163,386.45       12,352,786.43

III. Provision for

impairment

1.Beginning

1,404,400.47 1,903,054.14       3,307,454.61

balance

2.Increase in 2017

(1) Provision

3. Decrease in

2017

(1) Disposal

(2) Other

108

司公限有份股心中游旅海东大南海                               2017 文全告报度年年

transfer-out

4.Ending balance      1,404,400.47      1,903,054.14                   3,307,454.61

IV. Book value

1. Closing book

7,262,703.99      1,596,300.00                   8,859,003.99

value

2. Opening book

7,680,887.55      1,652,640.00                   9,333,527.55

value

(2) Investment real estate measured by fair value

□ Applicable √ Not applicable

(3) Investment real estate without property certification held

Nil

19. Fixed assets

))))1111(((( Fixed assets details

In RMB/CNY

Houses and   Mechanical   Transportation Electronic

Item                                       Other equipment   Total

buildings    equipment   equipment   equipment

I. Original book value:

1.Beginning balance     136,564,783.15 13,141,471.00   2,091,322.77 2,585,268.92   1,703,389.45 156,086,235.29

2.Increase in 2017       224,718.67   138,461.54   253,752.14   258,270.53    623,373.72   1,498,576.60

(1) Purchase           224,718.67   138,461.54   253,752.14   258,270.53    623,373.72   1,498,576.60

(2) Transfer from

construction in process

(3) Increase from

business combinations

3.Decrease in 2017                               220,096.00    266,875.00   486,971.00

(1) Disposal or scrap                              220,096.00    266,875.00   486,971.00

4.Ending balance       136,789,501.82 13,279,932.54   2,345,074.91 2,623,443.45   2,059,888.17 157,097,840.89

II. Accumulated

depreciation

109

司公限有份股心中游旅海东大南海                             2017 文全告报度年年

1.Beginning balance   68,185,246.92 9,092,676.08  1,252,935.70   2,111,146.45 1,447,909.80 82,089,914.95

2.Increase in 2017    2,135,104.65  278,374.63     162,863.22  110,942.10   88,247.65   2,775,532.25

(1) Provision       2,135,104.65  278,374.63     162,863.22  110,942.10   88,247.65   2,775,532.25

3.Decrease in 2017                             209,312.76   247,641.81   456,954.57

(1) Disposal or

209,312.76   247,641.81   456,954.57

scrap

4.Ending balance     70,320,351.57 9,371,050.71  1,415,798.92   2,012,775.79 1,288,515.64 84,408,492.63

III. Provision for

impairment

1.Beginning balance   31,072,788.17 2,527,851.26                          33,600,639.43

2.Increase in 2017

(1) Provision

3.Decrease in 2017

(1) Disposal or scrap

4.Ending balance     31,072,788.17 2,527,851.26                          33,600,639.43

IV. Book value

1. Ending book value   35,396,362.08 1,381,030.57     929,275.99  610,667.66   771,372.53  39,088,708.83

2. Opening book

37,306,748.06 1,520,943.66     838,387.07  474,122.47   255,479.65  40,395,680.91

value

(2)Temporarily idle fixed assets

Nil

(3) Fixed assets acquired by financing lease

Nil

(4) Fixed assets acquired by operating lease

Nil

110

司公限有份股心中游旅海东大南海                                       2017   文全告报度年年

(5) Certificate of title un-completed

Nil

20. Construction in progress

(1) Construction in progress

In RMB/CNY

Ending balance                     Beginning balance

Item         Book   Impairmen                         Impairment

Book value     Book balance                Book value

balance   t provision                        provision

C FLOOR ROOM

RENOVATION

Villa renovation

Swimming pool

renovation

C/F SIGHTSEEING

ELEVATOR SHAFT

PROJECT

High-pressure metering

cabinet

A/F fire stairs renovation

project

(2) Major construction in progress changed in the period

In RMB/CNY

B                             E

e                             n  Proporti

Accu

gi                            d   on of             Includin

mulate         Capital

n                             i  accumul               g:

B                        Transfer into               d           ization

ni                            n   ative             capitaliz

u               Transfer into   long-term           Project capital         rate of Sourc

Item         n                             g  project             ation

d     Increase in 2017 fixed assets in   deferred           progres ization         the   es of

Name          g                             b  investme           amount

g                 2017     expenses in            s   amoun         interes funds

b                             al  nts in             of the

et                         2017                  t of          t of

al                            a   the             interest

interes         2017

a                             n   budget            in 2017

t

n                             c   (%)

ce                            e

C FLOOR

ROOM                 961,729.74            961,729.74         100%                    Other

RENOVATION

111

司公限有份股心中游旅海东大南海                         2017 文全告报度年年

Villa renovation           1,598,774.11         1,598,774.11    100%           Other

Swimming pool

299,959.04          299,959.04     100%           Other

renovation

C/F

SIGHTSEEING

ELEVATOR               166,485.00   166,485.00           100%           Other

SHAFT

PROJECT

High-pressure

46,800.00  46,800.00           100%           Other

metering cabinet

A/F fire stairs

renovation                68,542.72         68,542.72     100%           Other

project

Total                3,142,290.61   213,285.00 2,929,005.61 --   --           --

(3) The provision for impairment of construction in progress

Nil

21. Engineering material

Nil

22. Disposal of fixed assets

Nil

23. Productive biological asset

(1) Measured by cost

□ Applicable √ Not applicable

(2) Measured by fair value

□ Applicable √ Not applicable

24. Oil and gas assets

□ Applicable √ Not applicable

112

司公限有份股心中游旅海东大南海                       2017 文全告报度年年

25. Intangible assets

(1) Intangible assets

In RMB/CNY

Non-patents

Item       Land use rights Patent right                 Total

technology

I. Original book value

1.Beginning balance     81,653,137.15                       81,653,137.15

2.Increase in 2017

(1) Purchase

(2) Internal research

and development

(3) Increase from

business combinations

3.Decrease in 2017

(1) Disposal

4.Ending balance       81,653,137.15                       81,653,137.15

II. Accumulated

amortization

1.Beginning balance     30,382,276.95                       30,382,276.95

2.Increase in 2017       812,387.16                         812,387.16

(1) Provision        812,387.16                         812,387.16

3.Decrease in 2017

(1) Disposal

4.Ending balance       31,194,664.11                        31,194,664.11

III. Provision for

impairment

1.Beginning balance     27,440,836.84                       27,440,836.84

2.Increase in 2017

(1) Provision

113

司公限有份股心中游旅海东大南海                                    2017 文全告报度年年

3.Decrease in 2017

(1) Disposal

4.Ending balance       27,440,836.84                                   27,440,836.84

IV. Book value

1. Ending book value     23,017,636.20                                   23,017,636.20

2. Opening book value     23,830,023.36                                   23,830,023.36

Ratio of the intangible assets from internal R&D in balance of intangible assets at period-end was.

(2) Land use rights without certificate of ownership

Nil

26. Development expenditure

Nil

27. Goodwill

(1) Original book value of goodwill

Nil

(2) Goodwill depreciation reserves

Nil

28. Long-term deferred expenses

In RMB/CNY

Amortization in

Item     Beginning balance   Increase in 2017               Other decreased     Ending balance

2017

Hotel exterior

1,071,343.97       584,369.42       584,369.42     584,369.42       486,974.55

decoration

Fire stairs

68,542.72         5,711.88       17,135.68     45,695.16

renovation

Swimming pool

299,959.04        14,997.95       59,991.81     224,969.28

renovation

C FLOOR ROOM

961,729.74        48,086.48     192,345.95       721,297.31

RENOVATION

Villa renovation                 1,598,774.11        79,938.71     319,754.82     1,199,080.58

114

司公限有份股心中游旅海东大南海                                 2017 文全告报度年年

Total            1,071,343.97   3,513,375.03      733,104.44     1,173,597.68     2,678,016.88

Other explanation: Nil

29. Deferred income tax assets and deferred income tax liabilities

Nil

30. Other non-current assets

Nil

31. Short-term loans

(1) Types of short-term loans

Nil

(2) Overdue short-term loans without payment

Nil

32. Financial liability measured by fair value and with its variation reckoned into current gains/losses

Nil 无

33. Derivative financial liability

□ Applicable √ Not applicable

34. Notes payable

Nil

35. Accounts payable

(1) Presentation of accounts payable by aging

In RMB/CNY

Item                Ending balance             Beginning balance

Within 1 year (inclusive)                       2,026,871.12                 856,048.21

1-2 years (including 2 years)                                           199,317.78

2-3 years (including 3 years)                                           334,316.59

Over 3 years                              134,301.14                 577,882.93

115

司公限有份股心中游旅海东大南海                                     2017 文全告报度年年

Total                                 2,161,172.26                 1,967,565.51

(2) Major payables with over one year account age

Whether it is

Amount   Reasons for   Write-off procedures     due to the

Companies       Nature

written-off written-off     performed       related party

transactions

Approval of the board of

Feiying Advertisement

Advertising fees 70,000.00   Unpayable  directors and the general      No

Company

meeting of shareholders

Central air                 Approval of the board of

Yuexin Technology Company

conditioning   56,204.00   Un-payable directors and the general      No

in Tianhe District, Guangzhou

repair costs                 meeting of shareholders

Central air                 Approval of the board of

Hainan Lvleng Environmental

conditioning   40,000.00   Un-payable directors and the general      No

Engineering Co., Ltd.

repair costs                 meeting of shareholders

Sanya Kaida Electrical                           Approval of the board of

Air conditioning

Installation Engineering             16,262.00   Un-payable directors and the general      No

repair costs

Company                              meeting of shareholders

Approval of the board of

Guangzhou Huashang Suigang Costs of purchase

15,622.50   Un-payable directors and the general      No

Equipment Co., Ltd.     of goods

meeting of shareholders

Costs of agent               Approval of the board of

Other 50 sums of amounts

sales of   177,465.10 Un-payable   directors and the general      No

written off

commodities                 meeting of shareholders

Total                375,553.60

In accordance with the “Plan of Underwriting Long-term Investment and Intercourse Funds”, deliberated and

approved by 12th extraordinary meeting of 8th BOD held on 25 October 2017 and the 3rd extraordinary general

shareholders meeting dated 10 November 2017, the long-term equity investment, which have totally provision

previsous year, and the financial assets availabel for sale and some of the creditors rights are been wirtten off in

the period. Meanwhile, part of the long-term unpayable are underwirtten. Among the account underwirtten, the

long-term equtiy investment amounted as 9,716,374.26 Yuan, financial assets availabel for sale amounted as

5,000,000.00 Yuan, account receivable amounted as 2,176,212.90 Yuan, other receivables amounted as

78,067,592.72 Yuan, account payables amounted as 375,553.60 Yuan, account received in advance amounted as

251,057.21 Yuan and other payables amounted as 676,929.30. Non-operating revenue arising from the

underwiritng amounted as 1,303,540.11 Yuan.

116

司公限有份股心中游旅海东大南海                                     2017  文全告报度年年

Hainan Dongfang Guoxin Law Firm issued the Legal Opinion on Time Limitation for Proceedings on Part of

Accounts Payable of Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd. in respect of the above-mentioned

written-off payables, in which the law firm believed that the above 201 sums of payables have exceeded the

statutory time limitations, and the relevant creditors have lost their debt recovery right and the right to win.

36. Advances from customers

(1) Presentation of advances from customers

In RMB/CNY

Item                 Ending balance               Beginning balance

Room and meal charge                          1,271,174.12                   601,642.54

Total                                 1,271,174.12                   601,642.54

(2) Significant advances from customers with aging more than one year

In RMB/CNY

Reasons for failure of repayment or

Item                 Ending balance

carry-forward

Guangzhou Nanbu Holiday International Travel

101,244.00  Unsettled

Service Co., Ltd. Sanya Branch

PEGAS ZHENG QINGBO                             32,243.02  Unsettled

Hainan Qiongzhong Ecological Investment

27,519.00  Unsettled

Guarantee Co., Ltd.

Sanya Public Security Fire Brigade                     19,420.88  Unsettled

Tianhong Group Wuzhizhou Project Department                 9,894.00  Unsettled

Total                                   190,320.90             --

(2) Projects settlement without unfinished at period-end from construction contract

Details of written-off advances from customers:

Nature of                                    Whether it is due to

Written-off    Reasons for     Write-off procedures

Name of entity    accounts                                     the related party

amount (RMB)    written-off       performed

receivable                                     transactions

Beijing Hualu

Xinchen                   Room charge received/ Approval of the board of

Room and

Management             30,540.00   not pressing for   directors and the general      No

meal charge

Consultants                      payment     meeting of shareholders

Limited

Haikou Tourism    Room and            Room charged    Approval of the board of

16,563.00                                 No

Company Sanya   meal charge           overpaid / not pressing directors and the general

117

司公限有份股心中游旅海东大南海                                    2017 文全告报度年年

Branch                       for payment     meeting of shareholders

Room charge received/ Approval of the board of

Room and

Tiange Media           16,136.00    not pressing for   directors and the general    No

meal charge

payment     meeting of shareholders

Room charged     Approval of the board of

Room and

Ou Xin’en             9,900.00   overpaid / not pressing directors and the general     No

meal charge

for payment     meeting of shareholders

Room charge received/ Approval of the board of

Room and

Huang Meijun             9,030.00    not pressing for   directors and the general    No

meal charge

payment     meeting of shareholders

Room and          Room charge received/ Approval of the board of

Other 109

meal charge 168,888.21   not pressing for   directors and the general    No

companies

etc.              payment     meeting of shareholders

251,057.21

37. Employee compensation payable

(1) Classification of employee compensation payable

In RMB/CNY

Beginning

Item                   Increase in 2017     Decrease in 2017     Ending balance

balance

I. Short-term compensation     2,148,514.36       11,327,332.60       11,016,831.03       2,459,015.93

II. Post-employment benefits -

959,762.24        959,762.24

defined contribution plans

Total                2,148,514.36       12,287,094.84       11,976,593.27       2,459,015.93

(2) Short-term compensation

In RMB/CNY

Beginning

Item                   Increase in 2017     Decrease in 2017     Ending balance

balance

1. Salary, bonus, allowance and

1,299,545.99       8,991,213.87        8,817,187.04       1,473,572.82

subsidies

2. Employee welfare                      1,435,569.87        1,435,569.87

3. Social insurance premiums                   446,351.07        446,351.07

Including: Medical insurance

400,502.18        400,502.18

premiums

Work-related injury insurance

20,172.08         20,172.08

premiums

118

司公限有份股心中游旅海东大南海                                 2017 文全告报度年年

Maternity insurance premiums                 25,676.81         25,676.81

4. Housing provident funds                 139,505.32        139,505.32

5. Labor union funds and

848,968.37      314,692.47        178,217.73         985,443.11

employee education funds

Total                2,148,514.36    11,327,332.60       11,016,831.03       2,459,015.93

(3) Presentation of defined contribution plan

In RMB/CNY

Item        Beginning balance   Increase in 2017     Decrease in 2017     Ending balance

1. Basic endowment

932,432.88        932,432.88

premiums

2. Unemployment

27,329.36         27,329.36

insurance premium

Total                           959,762.24        959,762.24

Other explanation: nil

38. Taxes payable

In RMB/CNY

Item               Ending balance             Beginning balance

Value added tax(VAT)                         222,989.34                228,923.41

Individual income tax                                                 1.14

Urban maintenance and construction tax                 7,782.70                 6,505.86

Housing property tax                         194,101.74                234,032.26

Land use tax                             108,590.91                108,588.06

Education surtax                             3,335.43                 2,788.22

Local educational surcharge                       2,223.64                 1,858.82

Stamp tax                                                     246.50

Total                                 539,023.76                582,944.27

Other explanation: nil

39. Interest payable

Nil

40. Dividend payable

Nil

119

司公限有份股心中游旅海东大南海                                 2017  文全告报度年年

41. Other payables

(1) Presentation of other payables by nature

In RMB/CNY

Item               Ending balance             Beginning balance

Staff dormitory rental fees, etc.                   742,742.74                1,001,405.96

Security deposit                           711,046.99                 662,541.29

Audit fees                               285,003.21                 285,003.21

Quality guarantee deposit for projects                 193,066.10                 230,096.75

Employee deposits                           166,200.90                 350,600.90

Project funds                             162,569.78                 317,277.05

Funds collected and remitted                     100,036.07                 139,319.74

Petty cash                               28,446.80

Electric charges withheld                       20,700.00

Individual current amounts                       1,364.00                 73,752.85

Fines and confiscated amount for illegal

19,810,000.00

operation of the Company's stocks

Membership expenses of directors and

214,506.98

supervisors

Total                                2,411,176.59               23,084,504.73

(2) Other significant payables with aging of over one year

In RMB/CNY

Item               Ending balance         Reason for non-repayment or carry-over

Hong Kong Deloitte & Touche LLP                    285,003.21  Reason for non-repayment

Sanya Shuxin Housing Waterproof

170,000.00  Reason for non-repayment

Engineering Limited

China Building Decoration Company

161,111.03  Reason for non-repayment

Hainan Branch

Total                                 616,114.24           --

Other explanation

Details of written-off other payables:

Whether it is

Written-off

Nature of other          Reasons for     Write-off procedures    due to the

Name of entity                amount9RM

payables             written-off       performed       related party

B)

transactions

Automatic fire alarm linkage    Ruled to assume 107,589.46 Unable to be paid due Approval of the board of      No

120

司公限有份股心中游旅海东大南海                                   2017 文全告报度年年

system engineering   several litigation fees         to long-term aging   directors and the general

meeting of shareholders

Approval of the board of

Ruled to assume           Unable to be paid due

Litigation costs                104,554.00             directors and the general   No

several litigation fees         to long-term aging

meeting of shareholders

Approval of the board of

Hainan Tiange Law Firm                     Unable to be paid due

Agreed litigation agent 100,680.60               directors and the general   No

(Huang Wenmei)                         to long-term aging

meeting of shareholders

Approval of the board of

Unable to be paid due

83,558.94              directors and the general   Yes

Current account from/to         to long-term aging

Binhai holiday villa     prior related parties                     meeting of shareholders

Approval of the board of

Unable to be paid due

57,680.00              directors and the general   Yes

to long-term aging

Su Guohua           Directors allowance                       meeting of shareholders

Approval of the board of

Unable to be paid due

222,866.30             directors and the general   No

to long-term aging

Other 27 companies       Consignment                           meeting of shareholders

Total                   676,929.30

Other explanation: nil

42. Liability held for sale

Nil

43. Non-current liability due within one year

Nil

44. Other current liability

Nil

45. Long-term loans

Nil

46. Bond payable

Nil

121

司公限有份股心中游旅海东大南海                                     2017 文全告报度年年

47. Long-term account payable

Nil

48. Long-term employee payable

Nil

49. Special payable

Nil

50. Estimated liabilities

In RMB/CNY

Item          Ending balance (RMB)         Beginning balance           Reasons

Provisions for arrears of

Other                       1,489,685.04           1,489,685.04

electricity tariffs

Total                       1,489,685.04           1,489,685.04           --

Other explanation, including important assumptions and estimation for the major accrual liability:

On May 26, 2016, the Company received lawyer’s letter of Hainan Yunfan law firm which is entrusted by Hainan Power Grid Co.,

LTD Sanya Power Supply Bureau (hereinafter referred to as the "Sanya Power Supply Bureau"), the letter claims that Sanya Power

Supply Bureau found that the Company’s subsidiary South China Grand Hotel of Hainan Dadonghai Tourism Center (Holdings) Co.,

Ltd’s the amount of CT is different with its marketing management system record. The inconformity time is July, 2006, and the

hotel’s CT is changing on April, 2016. Therefore, undercounted electricity consumption amount is 10,313,373.00 kilowatt-hours, and

estimated cost is 7,200,165.75 Yuan as various electricity prices and charges.

According to the file “Law Advisory Opinion about Retroactive Power (Charge) Dispute between South China Grand Hotel and

Sanya Power Supply Bureau” issued by Beijing Junhe (Haikou) Law Firm at December 20, 2016, which claims that Sanya Power

Supply Bureau has responsibility for CT to purchase, install, enseal, unseal and change, therefore, the responsibility of the guilty

party for undercounted electricity consumption of South China Grand Hotel is Sanya Power Supply Bureau. According to the one

hundred and thirty-five item of “General Rule of Civil Law”, this item claims that limitation of action is two years if accuser request

people's court’s protection, except situations provided by law. The Company has withheld the undercounted electricity consumption

cost in 2016 which is about 1,489,685.04 Yuan during the period from April, 2014 to April, 2016.

51. Deferred income

Nil

122

司公限有份股心中游旅海东大南海                                     2017 文全告报度年年

52. Other non-current liability

Nil

53. Share capital

In RMB/CNY

Changes in 2017 ( "+" for increase and "-" for decrease)

Beginning                      Public

Issuance                                 Ending balance

balance             Share     reserve

of new                     Others   Sub-total

donation   transferred to

shares

shares

Total shares   364,100,000.00                                           364,100,000.00

Other explanation: nil

54. Other equity instrument

Nil

55. Capital reserves

In RMB/CNY

Item          Beginning balance     Increase in 2017     Decrease in 2017      Ending balance

Capital premium

33,336,215.58                                 33,336,215.58

(share premium)

Other capital reserves         20,806,634.43                                 20,806,634.43

Total                 54,142,850.01                                 54,142,850.01

Other explanation, including changes in the period and reasons: nil

56. Treasury stock

Nil

57. Other consolidated income

Nil

58. Reasonable reserve

Nil

59. Surplus reserves

Nil

123

司公限有份股心中游旅海东大南海                                       2017 文全告报度年年

60. Undistributed profits

In RMB/CNY

Item                    Year 2017                 Year 2016

Undistributed profits at the end of last year

-343,966,434.57             -341,305,382.08

before adjustment

Undistributed profits at the beginning of the

-343,966,434.57             -341,305,382.08

year after adjustment

Plus: net profit attributable to owners of the

2,858,998.66               -2,661,052.49

parent company in current period

Undistributed profit as at the end of the year                -341,107,435.91             -343,966,434.57

Details about adjusting the retained profits at the beginning of the period:

1) The retroactive adjustments to Accounting Standards for Business Enterprises and its relevant new regulations affect the retained

profits at the beginning of the period amounting to 0 Yuan.

2) The changes in accounting policies affect the retained profits at the beginning of the period amounting to 0 Yuan.

3) The major accounting error correction affects the retained profits at the beginning of the period amounting to 0 Yuan

4) Merge scope changes caused by the same control affect the retained profits at the beginning of the period amounting to 0 Yuan.

5) Other adjustments affect the retained profits at the beginning of the period amounting to 0 Yuan

61. Operating income and operating costs

In RMB/CNY

Year 2017                       Year 2016

Item

Income           Cost           Income             Cost

Primary business           24,691,592.86       10,665,396.03       19,117,791.52         9,693,974.20

Other businesses           3,214,971.37         474,523.56         2,591,091.99         564,466.42

Total                27,906,564.23       11,139,919.59       21,708,883.51         10,258,440.62

62. Taxes and surcharges

In RMB/CNY

Item                   Year 2017                    Year 2016

Urban maintenance and construction tax                     68,334.72                   72,627.03

Education surtax                                28,958.58                   31,080.92

Housing property tax                             872,805.50                  482,833.44

Land use tax                                 434,366.47                  289,572.87

Vehicle and vessel use tax                           7,680.00

Stamp tax                                    2,760.60                   11,718.17

Business tax                                                         503,486.90

Local educational surcharge                           19,786.33                   20,720.64

124

司公限有份股心中游旅海东大南海                2017 文全告报度年年

Total                       1,434,692.20       1,412,039.97

Other explanation:

63. Sales expenses

In RMB/CNY

Item       Year 2017         Year 2016

Employee compensation               3,783,152.25       3,278,439.52

Depreciation                    493,761.97         573,232.60

Repair charges                   205,614.06         157,060.17

Water and electricity expenses           166,983.08         188,186.48

Other expenses                   474,992.19         734,414.49

Other                       5,124,503.55       4,931,333.26

Other explanation: nil

64. Administrative expenses

In RMB/CNY

Item       Year 2017         Year 2016

Salaries and welfares               5,402,093.17       4,580,727.09

Amortization of site use rights           812,387.16         812,387.16

Entertainment expenses               715,630.35         738,590.98

Social insurance premium              610,092.44         525,680.35

Agency fees                     400,000.00         404,696.00

Announcing fees                   328,688.00         240,345.40

Depreciation                    271,883.34         270,946.41

Travelling expenses                 206,199.69         212,223.67

Disabled security funds               36,433.27

Membership expenses of directors and

9,535.00         312,947.50

supervisors

Other expenses                   872,583.41         853,184.15

Taxes                                     422,907.20

Total                       9,665,525.83       9,374,635.91

Other explanation: nil

65. Financial expenses

In RMB/CNY

125

司公限有份股心中游旅海东大南海                       2017 文全告报度年年

Item             Year 2017           Year 2016

Interest expense

Less: interest income                     291,701.13          275,296.73

Gains or losses on exchange

Handling charges                         42,524.95           81,651.44

Total                            -249,176.18           -193,645.29

Other explanation: nil

66. Losses on assets impairment

In RMB/CNY

Item             Year 2017           Year 2016

I. Losses on bad debt                      11,709.50           -1,230.99

Total                              11,709.50           -1,230.99

Other explanation: nil

67. Gains from fair value changes

Nil

68. Investment income

In RMB/CNY

Item             Year 2017          Year 2016

Investment income acquired from disposal

of the available-for-sale financial assets and                        429,753.50

others

Income from other creditors' investment              805,825.24         961,165.05

Total                               805,825.24        1,390,918.55

Other explaination:nil

69. Income from assets disposal

Nil

70. Other income

Nil

71. Non-operating income

In RMB/CNY

126

司公限有份股心中游旅海东大南海                                  2017 文全告报度年年

Amount included in non-recurring

Item            Year 2017         Year 2016

profit and loss in the current period

Compensation income                             64,926.00

Debt write-offs                 1,303,540.11                          1,303,540.11

Other                         260.00        4,680.00                 260.00

Total                       1,303,800.11       69,606.00              1,303,800.11

Government subsidies reckoned into current gains/losses: nil

72. Non-operating expenses

In RMB/CNY

Amount included in

Item            Year 2017          Year 2016       non-recurring profit and loss in

the current period

Total losses from disposal of

30,016.43         48,887.07

non-current assets

Including: losses from

30,016.43         48,887.07               30,016.43

disposal of fixed assets

Total                        30,016.43         48,887.07               30,016.43

Other explanation: nil

73. Income tax expenses

(1) Statement of income tax expenses

Nil

(2) Adjustment on accounting profit and income tax expenses

In RMB/CNY

Item                         Current Period

Total profit                                                   2,858,998.66

Other explanation: nil

74. Other comprehensive income

See Note

75. Notes to items of the cash flow statement

)1( Cash received from other operating activities

In RMB/CNY

127

司公限有份股心中游旅海东大南海                    2017 文全告报度年年

Item            Year 2017         Year 2016

Water, electrical and gas fees collected          684,442.21

Interest income                       291,701.13         275,296.73

Security deposit and rent for lease of site         75,000.00         244,000.00

Agent collection of social security

15,515.52         11,615.09

insurance premiums

Income from compensation for articles

8.00

in rooms

Others                           15,828.00         53,528.69

Total                           1,082,486.86        584,448.51

Explanation: nil

(2) Cash paid for other operating activities

In RMB/CNY

Item            Year 2017         Year 2016

Social intercourse fees                   730,464.44         641,721.21

Paid fines for illegal operation of the

500,000.00

Company's stocks

Intermediary audit charges                 400,000.00         404,696.00

Announcing fees                       220,000.00         240,345.40

Travelling expenses                     181,369.69         205,293.67

Promotion fee                        75,167.49         116,318.27

Costs of listing on the Shenzhen Stock

80,000.00         80,000.00

Exchange

Repair charges                       291,287.80         79,354.40

Fuel, electricity, gas charges               274,909.12         62,767.95

Office expenses                       11,553.14         31,066.70

Posts costs                         27,493.61         30,171.22

Financial expenses                     42,524.95         81,651.44

Property insurance premiums                 49,740.21

Membership expenses of directors and

9,535.00         12,947.50

supervisors

Price adjustment funds                                 156,797.00

Labor insurance premiums, housing

592,554.72         553,990.56

provident fund paid by individuals

Other expenses                       388,168.08         274,262.27

Total                           3,874,768.25       2,971,383.59

Explanation: nil

)3( Cash received from other investment activities

128

司公限有份股心中游旅海东大南海                         2017 文全告报度年年

In RMB/CNY

Item                Year 2017           Year 2016

VAT received from debt investment

29,081.45

income

Total                                               29,081.45

Explanation: nil

(4) Cash paid for other investing activities

In RMB/CNY

Item                Year 2017         Year 2016

Fines and confiscated amounts for illegal

19,310,000.00

operation of the Company's stocks

Total                               19,310,000.00

Explanation: nil

(5) Cash received from other financing activities

In RMB/CNY

Item                Year 2017           Year 2016

Luoniushan Group Co., Ltd.                     19,810,000.00

Total                               19,810,000.00

Explanation: nil

(6) Cash paid for other financing activities

In RMB/CNY

Item                Year 2017           Year 2016

Luoniushan Group Co., Ltd.                     19,810,000.00

Total                               19,810,000.00

Explanation: nil

76. Supplementary information to statement of cash flows

(1) Supplementary information to statement of cash flows

In RMB/CNY

Item               Year 2017         Year 2016

1. Net profit adjusted to cash flows from operating

--           --

activities

Net profits                             2,858,998.66       -2,661,052.49

Plus: provision for assets impairment                 11,709.50         -1,230.99

129

司公限有份股心中游旅海东大南海                             2017 文全告报度年年

Depreciation of fixed assets, depreciation and

depletion of oil and gas assets and depreciation of           3,193,715.81         3,533,710.59

productive biological assets

Amortization of intangible assets                    868,727.16           868,727.16

Amortization of long-term fees to apportioned              733,104.44           593,014.30

Loss from disposal of fixed assets, intangible assets

30,016.43            48,887.07

and other long-term assets ("-" for gains)

Investment losses ("-" for gains)                    -805,825.24         -1,390,918.55

Decreases in inventories ("-" for increases)                 -40.80           -1,104.29

Decreases in operating receivables ("-" for

14,283.36           555,543.09

increases)

Increases in operating payables ("-" for decreases)          -1,777,400.85         -268,888.91

Other                                                 1,489,685.04

Net cash flows from operating activities                5,127,288.47         2,766,372.02

2. Significant investing and financing activities not

--             --

involving cash receipts and payments

3. Net changes in cash and cash equivalents           --             --

Balance of cash at the end of the period                9,681,607.16         27,210,248.01

Less: balance of cash at the beginning of the period         27,210,248.01         19,782,392.26

Net increase in cash and cash equivalents             -17,528,640.85           7,427,855.75

(2) Net cash payment for the acquisition of a subsidiary of the current period

Nil

(3) Net cash received from the disposal of subsidiaries

Nil

(4) Breakdown of cash and cash equivalents

In RMB/CNY

Item               Ending balance         Beginning balance

I. Cash                                 9,681,607.16         27,210,248.01

Including: cash on hand                         264,156.33           273,523.86

Unrestricted bank deposits                  9,417,450.83         26,936,724.15

III. Ending balance of cash and cash

9,681,607.16         27,210,248.01

equivalents

Other explanation: nil

130

司公限有份股心中游旅海东大南海                                      2017  文全告报度年年

77. Notes for the statement of owners equity changes

Explain the items and adjusted amounted which have adjusted in   “ Other ” of last year s ending balance: nil

78. Assets with ownership or use right restricted

Nil

79. Item of foreign currency

□ Applicable √ Not applicable

80. Hedging

Released the items and relevant instruments by types, and qualitative and quantitative information for hedge risks : nil

81. Other

Nil

VIII. Changes of consolidation range

1. Enterprise consolidation not under the same control

(1) Enterprise consolidation not under the same control in reporting period

Nil

(2) Consolidation cost and goodwill

Nil

(3) Identifiable assets, liability of the acquiree on purchasing date

Nil

(4) Gains or losses of the equity held before purchasing date, arising from re-measured by fair value

Realized enterprise combine step by step through multi-trading and dealing obtained controlling rights in Period

□Yes  √No

(5) On purchasing date or current combine period, fails to determine the combination consideration or

’’’’

acquiree s fair value of identifiable assets and liabilities rationally

Nil

131

司公限有份股心中游旅海东大南海                                  2017 文全告报度年年

(6) Other notes

Nil

2. Enterprise consolidation under the same control

Nil

3. Counter purchase

Basic information of transactions, basis of transactions constituting counter purchase, whether assets and liabilities reserved by listed

companies constituting business and their basis, confirmation of combined cost, the amount occurred when adjusting rights and

interests in accordance with equity transaction and its calculation: Nil

4. Disposal of subsidiaries

Losing controlling rights while dispose subsidiary on one-time

□ Yes  √No

Dispose subsidiary step by step through multi-dealings and losing controlling rights in the Period

□ Yes  √No

5. Changes of combination scope

Other reasons contributed the changes for combination scope (e.g. new subsidiary established, liquidate subsidiary etc.):

Nil

6. Other

Nil

IX. Equity in other entity

1. Equity in the subsidiary

Nil

2. Changes in the owner's equity share of the subsidiary and the transaction is still controlled subsidiary

Nil

132

司公限有份股心中游旅海东大南海                             2017 文全告报度年年

3. Equity in arrangement of joint venture or associated enterprises

Nil

4. Important common management

Nil

5. Equity in structured entities not included in the consolidated financial statements

Relevant examination: nil

6. Other

Nil

X. Risks related to financial instruments

The Company faces all kinds of financial risks in the operating process: Credit risks, market risks and liquidity

risks. The Board of Directors of the Company takes full responsibilities for determining the risk management

objects and policies and bearing the ultimate liabilities for that, however, the Board of Directors has authorized the

management department of the Company to design and implement the process capable of ensuring the effective

implementation of the risk management objects and policies. The Board of Directors reviews the effectiveness of

the enforced procedures and the rationality of risk management objectives and policies by the reports submitted by

the management department of the Company. The internal auditors of the Company also will audit the risk

management policies and procedures, and report the relative facts to the audit committee.

The overall objective of risk management of the Company is to prepare the risk management policies ensuring the

risk under control as far as possibility without affecting the Company's business development goals.

i.Credit risk

Credit risk refers to a risk that one party to the financial instruments suffers financial losses due to the failure of

the other party in performing the obligations The Company mainly faces customer credit risks caused by sales on

account. Before signing a new contract, the Company will understand and assess credit risks of the new customer.

The Company rates the credit of existing customers and analyzes the aging of accounts receivable to ensure that

the Company's overall credit risk is within the controllable range.

ii.   Market risk

Market risk associated with financial instruments refers to the risk that fair value or future cash flows of financial

instruments fluctuate due to variations in market prices, and it includes exchange rate risk, interest rate risk and

other price risks.

iii.   Liquidity risk

Liquidity risks refer to the risks of capital shortage occurred when enterprises perform the obligations of

settlement in cash or other financial assets. The policy of the Company is to ensure that there are sufficient cash

133

司公限有份股心中游旅海东大南海                                   2017 文全告报度年年

for the payment of the matured debts. Liquidity risk is under centralized control of the financial department of the

Company. The financial department monitors cash balance and readily realizable and marketable securities and

makes rolling forecast on cash flows of the next 12 months to ensure that the Company has sufficient funds to

repay debts in all cases of reasonable prediction.

XI. Fair value disclosures

Nil

XII. Related parties and related-party transactions

1. Parent company

Registered                                      Ratio of voting

Shareholding ratio

Parent company             Nature of business   Registered capital               right in the

place                           in the Company

Company

Luoniushan Co., Ltd.   Haikou       Crop farming     115,151.00           17.55%         19.80%

Explanation:

As at December 31, 2017, Luoniushan Co., Ltd. (hereinafter referred to as "Luoniushan") and its wholly-owned subsidiary Hainan

Ya'anju Property Services Co., Ltd. held a total of 72,091,780 A shares of the Company, accounting for 19.80% of the total share

capital of the Company, and being the largest shareholder of the Company.

Other explanation: nil

2. Subsidiary of the Enterprise

Found more in Notes

3. Cooperative enterprise and joint venture

Nil

4. Other related party

Nil

5. Related-party transactions

(1) Goods purchasing, labor service providing and receiving

Goods purchasing/labor service receiving

In RMB/CNY

Related party     Contents of   Year 2017                              Year 2016

Transaction amount    Whether over the

related-party

134

司公限有份股心中游旅海东大南海                                     2017 文全告报度年年

transaction             authorized     amount authorized

or not

Room and meal

Luoniushan Co., Ltd.              787,474.00              Yes                 29,566.04

charge

Sales of goods/ rendering of services

In RMB/CNY

Contents of related-party

Related party                          Year 2017             Year 2016

transaction

Luoniushan Co., Ltd.       Room and meal charge             787,474.00               29,566.04

Explanation: nil

(2) Related trusteeship management/contract & entrust management/ outsourcing

Nil

(3) Related lease

Nil

(4) Related guarantee

Nil

(5) Related party’s borrowed funds

Nil

(6) Related party’s assets transfer and debt reorganization

Nil

(7) Key management personnel emoluments

In RMB/CNY

Item                   Year 2017                 Year 2016

Key management personnel emoluments                   1,885,719.39                 1,161,900.00

(8) Other related transactions

Nil

135

司公限有份股心中游旅海东大南海                                 2017 文全告报度年年

6. Receivable/payable items of related parties

(1) Receivable

In RMB/CNY

Ending balance             Beginning balance

Item        Related party             Provision for bad             Provision for bad

Book balance               Book balance

debt                   debt

Account

Luoniushan Co., Ltd.   166,412.00                 10,668.00

receivable

(2) Payable item

Nil

7. Commitments of related party

Nil

8. Other

Nil

XIII. Share-based payment

1. Share-based payment

□ Applicable √ Not applicable

2. Settled by equity

□ Applicable √ Not applicable

3. Settled by cash

□ Applicable √ Not applicable

136

司公限有份股心中游旅海东大南海                                     2017 文全告报度年年

4. Modification and termination of share-base payment

5. Other

XIV. Commitments and contingencies

1. Material commitments

Major commitments on balance sheet date

Nil

2. Contingencies

(1) Major contingencies on balance sheet date

On May 26, 2016, the Company received a lawyer letter from Hainan Yunfan Law Firm entrusted by Sanya Power Supply Bureau of

Hainan Power Grid Co., Ltd. (hereinafter referred to as "Sanya Power Supply Bureau"), saying that Sanya Power Supply Bureau

found, in verifying electricity consumption by South China Hotel, a subsidiary of the Company, that the current transformer (CT)

installed in the distribution center metering counters in South China Hotel installed was inconsistent with the record in themarketing

management system file of Sanya Power Supply Bureau, and the duration of the inconsistence was from July 2006 when South China

Hotel changed its electricity consumption measuring device to April 2016.According to the statistics, electricity consumption

of10313373 KWH was measured in short, which was estimated to be valued at RMB7,200,165.75 according to the electricity prices

and surcharge rates in the years.

According to the Legal Consultation Advice on Electricity Quantity (Electricity Charge) Claiming Dispute between South China

Hotel and Sanya Power Supply Bureau issued by Beijing Junhe (Haikou) Law Firm on December 20, 2016, as all electricity

consumption metering devices are purchased, installed, sealed, opened and replaced by Sanya Power Supply Bureau Responsible, the

short measurement of electricity charge from South China Hotel for many years was due to the fault of Sanya Power Supply Bureau,

and was irrelevant to South China Hotel.Pursuant to Article 135 of the General Principles of Civil Law: "Except as otherwise

stipulated by law, the limitation of action regarding applications to a people's court for protection of civil rights shall be two years.,

the Company accrued an amount of RMB1,489,685.04 for the electricity charge for electricity quantity measured in short during two

years from April 2014 to April 2016.As at December 31, 2017, no further progress was made on this matter.

(2) For no major contingencies disclosed, explain reasons

The Company has no major contingencies should be disclosed

137

司公限有份股心中游旅海东大南海                                 2017 文全告报度年年

3. Other

XV. Event after balance sheet date

1. Major non-adjustment events

Nil

2. Profit distribution

Nil

3. Sales return

Nil

4. Explanation on other events after balance sheet date

On January 28, 2018, as resolved at the 16th meeting of the 8th board of directors of the Company, the Company does not intend to

make profit distribution or convert capital reserve into share capital.

XVI. Other significant events

1. Correction of accounting errors in previous periods

Nil

2. Debt reorganization

3. Assets replacement

(1) Non-monetary assets replacement

138

司公限有份股心中游旅海东大南海                                   2017 文全告报度年年

(2) Others assets replacement

4. Annuity plan

5. Termination of operation

6. Segment information

Nil

7. Major trading and items shows influence on investors’ decision-making

8. Other

According to the requirements of the Guidelines for the Supervision of Listed Companies No.4 -- Commitments of and Performance

of Commitments by Actual Controllers, Shareholders, Related Parties, Acquirers of Listed Companies and Listed Companies

(Announcement of the China Securities Regulatory Commission [2013] No.55) issued by the China Securities Regulatory

Commission (CSRC), on June 7, 2014, Luoyunshan Co., Ltd. (hereinafter referred to as "Luoniushan") issued to the Company a

Letter on Change in Commitment by Luoyunshan Co., Ltd. to Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd.and undertakes

in the letter that within three years from the date when the general meeting of shareholders of the Company reviewed and approved

the change in the commitment, Luoniushan will actively seek reorganization party to reorganize assets of the Company. Such matter

were reviewed and approved by the general meeting of shareholders of the Company on June 27, 2014.

On February 22, 2017, the Company received from Luoniushan a Letter on Progress in the Planning of Commitment Implementation,

in which Luoniushan intended to transfer 100% of the equity it held in the Industrial Company, a wholly-owned subsidiary

(specifically, the Industrial Company will first be transferred with part of financial assets equity held by Luniushan and of 6.91%

equity of Sanya Rural Commercial Bank Co., Ltd.) to the Company, the transaction was made in cash with transaction amount of

about RMB300 million. The proposal was not adopted at the 11th extraordinary meeting of the eighth board of directors of the

Company due to the Company's lack of sufficient debt repayment ability.

On June 23, 2017, Luoniushan issued to the Company a Letter on Change in Term of Commitment by Luoyunshan Co., Ltd. to

Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd., extending Luoniushan's performance period of the above restructuring

commitment of the Company by 6 months, whichmeans the deadline for the fulfillment of reorganization commitment was changed

to December 27, 2017.As the reorganization would take a certain amount of time, on November29, 2017, Luoniushan again applied

to extend the performance period of the reorganization commitment for two years, that is, the performance deadline of the

reorganization commitment was changed from December 27, 2017 to December 26, 2019, which was not approved at the fourth

extraordinary general meeting of shareholders of the Company in 2017.

According to the Proposal on Write-off of Long-term Investments and Current Accounts reviewed and adopted at the 12th interim

meeting of the 8th board of directors of the Company on October 25, 2017 and the third extraordinary general meeting of

shareholders of the Company for 2017 on November 10, 2017, the Company wrote off long-term equity investment and

available-for-sale financial assets for which provision for impairment was provided for in full and part of claims; and wrote off part

of accounts payable which were unable to be paid, including: writing off long-term equity investment of RMB9,716,374.26,

available-for-sale financial assets of RMB5,000,000.00, accounts receivable of RMB 2,176,212.90, other receivables of

RMB78,067,592.72, accounts payable of RMB375,553.60, advance from customers of RMB 251,057.21, other payables of

RMB676,929.30.Non-operating income arising from the write-offs amounted to RMB 1,303,540.11.

On October 20, 2017, Hainan Dongfang Guoxin Law Firm issued a Legal Opinion on Time Limitation for Proceedings on Part of

Accounts Payable of Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd. for the above-mentioned written-off payables,

139

司公限有份股心中游旅海东大南海                               2017   文全告报度年年

confirming that the above 201 sums of payables have exceeded the statutory time limitation, and the relevant creditors have lost their

debt recovery right and the right to win.

XVII. Note on financial statement of parent company

1. Accounts receivable

)))) ((((

1     Disclosure of account receivables by category

Nil

Account receivable with single significant amount and withdrawal bad debt provision separately at period-end: :

□ Applicable √ Not applicable

In the portfolio, accounts receivable with the allowance for bad debts made under the aging analysis method:

□ Applicable √ Not applicable

In combination, withdrawal proportion of bad debt provision based on balance proportion for account receivable   :

□ Applicable √ Not applicable

In combination, withdrawal proportion of bad debt provision based on other methods for account receivable:  :

(2) Provision for bad debts accrued, regain 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

(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

Other explanation: nil

2. Other receivables

(1) Other receivables by type

Nil

Other receivables with insignificant single amount but with individual provision for bad debts :

□ Applicable √ Not applicable

Other receivables with provision for bad debts made by aging analysis method in portfolios: :

140

司公限有份股心中游旅海东大南海                                 2017  文全告报度年年

□ Applicable √ Not applicable

In combination, withdrawal proportion of bad debt provision based on balance proportion for other account receivable:   :

□ Applicable √ Not applicable

In combination, withdrawal proportion of bad debt provision based on other methods for other account receivable:   :

□ Applicable √ Not applicable

(2) Provision for bad debts accrued, regain or switch back in the Period:

Nil

3. Long-term equity investment:

Nil

4. Operation income and operation cost

Nil

5. Investment income

Nil

6. Other

nil

XVIII. Supplementary information

....1111 Breakdown of non-recurring profits and losses in 2017

√ Applicable □ Not applicable

In RMB/CNY

Item                     Amount              Remark

Profits or losses from disposal of non-current assets            -30,016.43 Loss from fixed assets disposal

Expenses for using funds charged from non-financial

805,825.24  Net income from creditors’ investment

enterprises and included in the current profit or loss

Other non-operating income and expenses except for                    Debt written off from receivables and

1,303,800.11

the above-mentions items                                 account paid in advance

Total                                   2,079,608.92           --

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

141

司公限有份股心中游旅海东大南海                             2017 文全告报度年年

□ Applicable √ Not applicable

2     Return on net assets and earnings per share

....

Yield rate of        Earnings per share

Profit for the reporting period      net weighted

Basic earnings per   Diluted earnings per

average assets

share (RMB/Share)   share(RMB/Share)

Net profit attributable to ordinary shareholders of the

3.78%         0.0079         0.0079

Company

Net profit attributable to ordinary shareholders of the

1.03%         0.0021         0.0021

Company after deducting the non-recurring profit and loss

3. Accounting data difference between the domestic and overseas accounting standards

(1) Difference of the net profit and net assets disclosed in financial report, under both IAS (International

Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)

□ Applicable √ Not applicable

(2) Difference of the net profit and net assets disclosed in financial report, under both foreign accounting

rules and Chinese GAAP (Generally Accepted Accounting Principles)

□ Applicable √ Not applicable

(3) Explanation on data differences under the accounting standards in and out of China; as for the

differences adjustment audited by foreign auditing institute, listed name of the institute

4. Other

142

司公限有份股心中游旅海东大南海                             2017

文全告报度年年

Section XII. Documents available for references

I. Financial statement with signature and seal of legal person, person in charge of accounting

works and person in charge of accounting organ (accountant in charge);

II. Original audit report seal with accounting firms and signature and seal from CPA;

III. The original manuscripts of all documents and announcements of the Company publicly

disclosed on Securities Times and Hong Kong Commercial Daily during the report period.

The above said documents are prepared in the security department of the Company.

Board of Directors of

HAINAN DADONGHAI TOURISM CENTER (HOLDINGS) CO., LTD.

Chairman: Li Yuanbin

30 January 2018

143