HAINAN JINGLIANG
HOLDINGS CO., LTD
Annual Report 2017
APRIL 13,2018
HAINAN JINGLIANG HOLDINGS CO., LTD.
ANNUAL REPORT 2017
Part I Important Notes
This Abstract is based on the full text of the Annual Report of Hainan Jingliang Holdings Co., Ltd.
(together with its consolidated financial report and subsidiaries, the “Company”, except where the
context otherwise requires). In order for a full understanding of the Company’s operating results,
financial condition and future development planning, investors should carefully read the full text
which has been disclosed together with this Abstract on the media designated by the China
Securities Regulatory Commission (the “CSRC”).
This Abstract has been prepared in both Chinese and English. Should there be any discrepancies
or misunderstandings between the two versions, the Chinese version shall prevail.
All the Company’s Directors have attended in person the Board meeting for the review of this
Report.
No-standard auditor’s modified opinion:
□ Applicable √ Not applicable
Proposal on cash and/or share dividend, and capital reserve transferred into share capital for
common shareholders for the Reporting Period, which has been considered and approved by the
Board:
□ Applicable √ Not applicable
The Company plans not to distribute cash or share dividend and transfer capital reserve into share
capital for the Reporting Period.
Proposal on cash and/or share dividend for preferred shareholders for the Reporting Period, which
has been considered and approved by the Board:
□ Applicable √ Not applicable
Part II Company Profile
1. Stock Profile
Stock name JLKG, JL-B Stock symbol 000505, 200505
Stock exchange Shenzhen Stock Exchange
Contact information Board Secretary SecuritiesRepresentative
Name Zhao Yinhu
Jing Liang Building, No. 16 East Third
Office address Ring Middle Road, Chaoyang District,
Beijing
Fax 010-51672010
Tel. 010-51672029
E-mail address 593374748@qq.com
2. Brief Introduction to Main Business Scope or Products in Reporting Period
During the Reporting Period, the Company completed a significant asset restructuring, and its
main business scope has changed from real estate development, resort hotel operation and
property management to vegetable oil processing, food production and land restoration. It runs its
oils and oilseeds processing and trading business primarily in Beijing City, Tianjin City and Hebei
Province under the brands of “Gu Chuan”, “Lv Bao”, “Gu Bi”, “Huo Niao” and “Tian Yi”, with
the main products being soybean oil, rapeseed oil, sunflower seed oil and sesame oil and paste,
among others. As for its food production business, it primarily develops, produces and markets
snack food and bread under the brands of “Xiaowangzi”, “MS Dong”, “Jianqiang De Tudou” and
“Gu Chuan”, among others, with the main products being potato chips, cakes and pastries and
bread.
In 2017, under a market environment that oil and oilseed prices fell sharply in the first half of the
year and fluctuated low in the second half of the year, in its oils and oilseeds business division, the
Company made innovation in operation mode, optimization in product structure and enhancement
in fine management. A total of 1.6777 million tons of oils and oilseeds were sold during the
Reporting Period, generating revenue of RMB6.587 billion (a 29.78% year-over-year increase)
with net income attributable to the Company (as the parent company) before non-recurring gains
and losses being RMB80.55 million (a 21.64% year-over-year increase). Firstly, new
breakthroughs in oil processing were achieved. In terms of oil processing, the Company focused
on lean management by means of 6s, comprehensive budget management, risk prevention and
control system construction to comprehensively enhance the operation level, keep improving
quality and efficiency. The annual processing volume exceeded 1 million tons with an operation
rate of 83.33%, being at the forefront of the industry. Secondly, brand product structure was
gradually optimized. The series of brands including “Gu Chuan”, “Lv Bao”, “Gu Bi”, “Huo Niao”
and “Tian Yi” focusing on high value-added products promote continuous optimization of product
structure.. The Company increased produce R&D, gathered marketing resources and strengthened
assessment incentives, and thus achieved substantial growth in sales of high value-added products
such as sesame oil, rapeseed oil and flax seed oil, etc., of which sales of sesame oil increased by
23.18% year-on-year. Thirdly, steady progress had been made in the trade reserve. In terms of oil
and oilseeds trade, the Company adhered to the sales model of combination of futures trading and
actual transactions strengthened market judgment, made innovation in operation and prevented
business risks, thus achieved an annual trade volume of oils and oilseeds amounted to 424,000
tons, an increase of 59.81% year-over-year, covering more than 12 varieties such as soybean,
rapeseed oil and flaxseed. Regarding oil reserve, the Company adhered strictly to the rules and
regulations and strengthened the standardized management. There were no accidents throughout
the year, and 60,000 tons of storage was successfully completed in-out-stock.
In 2017, facing the adverse conditions of fierce competition in the end market and rising price on
raw and auxiliary materials in its food processing business, the Company got over both internal
and external difficulties, achieving sales revenue of RMB829 million for the year (a
year-over-year increases of 5.73%) with net income attributable to the Company (as the parent
company) before non-recurring gains and losses being RMB70.6663 million (a 50.08%
year-over-year increase). Firstly, the snack food business maintained a rapid growth. In terms of
snack food business, the Company adhered to the development model of “Differentiated
Asymmetric Competitive Strategy” and “Professional Manufacturing + Cultural Innovation +
Internet Gene”, focusing on the three major categories of potato, puffed food and pastry. This
business division centered on product R&D, intensified fine management and laid stress on
channel expansion, and thus achieved annual sales revenue of RMB771 million, an increase of
5.47% year-over-year. The Company owned 1,470 clients with a reasonable layout including
comprehensive channels, terminal channels, circulation channels and special channels to sell
products to all regions in the country. The sales revenue of main products \"MS Dong\" and
\"Jianqiang De Tudou\" accounted for 32.7% of the total sales revenue, playing a significant role in
strategic driving effect. The newly introduced \"Dai Bu’Er\", \"12 Constellations\" and \"Daily
Walnut\" also won a good market response with a sales revenue accounting for 29% of the total,
playing an important role in stimulating the market. Secondly, the bread processing business was
ready for expansion. The Company actively expanded the retail market of bread business and
enriched the product structure to reversed the downward trend in previous years, and sales in KFC
and retail channels increased by 8.5% and 44% respectively, building a base for the next step, that
is, on the one hand, the cooperation with the Wumart Group in capital level entered the
substantive stage. The two parties had signed a strategic cooperation agreement, and the bread
products would be available for sale in the 350 stores of Wumart in Beijing. On the other hand, the
expansion of the baking industry would be carried out in an orderly manner, and stores would be
opened in Tianjin and Beijing. Moreover, the ERP system and institutional mechanisms would be
established for standardization.
On December 13, 2017, the Board of Directors of the Company convened the 22nd meeting of the
8th session to discuss and approve the “Proposal on Signing Project Cooperative Agreements and
Launching Projects for Land Rehabilitation and Agricultural Industrialization”, and the Company
began to get involved in the field of land restoration. In 2017, the Central No. 1 Document “The
Central Committee of the Communist Party of China and the State Council’s Opinions on
Deepening the Structural Supply Side Reform on Agriculture and Accelerating the New
Development of Agriculture and Rural Area” clearly clarified that “the increased cultivated land
by land remediation is allowed to be adjusted within the province as an indicator of compensatory
balance for supplementing cultivated land, and the gains from the adjustment of the targets can be
obtained according to regulations or contracts”. The Company cooperates with the government
and professional land remediation companies to start with compensatory balance indicators, which
can guarantee stable profits and rapid entry into the field of land restoration, building a base for
the next step in the expansion of the land restoration industry chain.
3. Key Financial Information
(1) Key Financial Information of Past Three Years
Indicate by tick mark whether there is any retrospectively restated data in the table below.
√ Yes □ No
Reasons for retrospective restatements:
Business merger under the same control.
Unit: RMB
2017-over-2016
2016
change
Before Restated Restated Before Restated
Sales revenue 7,917,639,044.13 969,140,915.32 8,723,491,657.31 -9.24% 267,068,750.88 13,959,307,849.28
Net income
attributable to
shareholders of 129,603,167.36 73,300,570.54 197,319,239.01 -34.32% -107,573,743.92 -20,028,834.34
the listed
company
Net income
attributable to
shareholders of
the listed
company 63,818,849.21 -134,994,571.34 -72,109,287.22 225.52% -237,953,658.00 -236,415,787.81
before
nonrecurring
gains and
losses
Net cash flows
from operating -1,379,507,779.66 257,914,814.62 948,330,160.14 -245.47% 259,599,625.38 1,052,914,971.80
activities
Basic earnings
per share 0.2 0.17 0.31 -35.48% -0.25 -0.03
(RMB/share)
Diluted
earnings per
0.2 0.17 0.31 -35.48% -0.25 -0.03
share
(RMB/share)
Weighted
average return 5.01% 0.00% 6.96% -1.95% 0.00% 0.00%
on equity (%)
Change of
December 31,
December 31, December 31, 2016 2017 over December 31, 2015
2017 December 31,
Before Restated Restated Before Restated
Total assets 6,082,383,851.23 1,385,469,635.17 5,007,343,324.00 21.47% 1,714,444,000.65 6,921,922,664.53
Equity
attributable to
shareholders of 2,101,342,683.37 65,088,302.88 1,383,081,876.55 51.93% -217,136,869.15 984,066,397.14
the listed
company
Notes: ① Sales revenue of 2016 is higher than that of 2017 primarily because the sales revenue
of January-May 2016 includes revenue of RMB1.865 billion from the grain trading business
(transferred at the end of May 2016) and there was no such business in the current period.
② Net income attributable to shareholders of the listed company of 2017 is lower than that of
2016 primarily because the Company earned net income of RMB152.85 million in 2016 from
disposal of its equity investments in Heilongjiang Longshi Pearl River Media Co., Ltd. and Days
Hotel & Suites Sanya Resort as well as three villas in Sanya City, Hainan Province.
③ Cash used in operating activities is of a large amount because in the oil and oilseed business,
the Company purchased a large quantity of soybeans in the international market at the end of 2017
according to its production and operation plan for 2018, which had been made upon careful
analyses on the international and domestic markets.
(2) Key Financial Information by Quarter
Unit: RMB
Q1 Q2 Q3 Q4
Sales revenue 1,545,437,876.41 1,737,124,400.52 2,232,700,520.70 2,402,376,246.50
Net income attributable to
shareholders of the listed 29,668,391.83 30,000,740.02 42,164,080.63 27,769,954.88
company
Net income attributable to
shareholders of the listed
13,757,116.56 18,420,025.56 10,579,084.33 21,062,622.76
company before nonrecurring
gains and losses
Net cash flows from operating
-124,811,091.49 -564,681,487.32 -305,046,738.32 -384,968,462.53
activities
Indicate by tick mark whether any of the financial data in the table above or their summations
differs materially from what have been disclosed in the Company’s quarterly or semi-annual
reports.
□ Yes √ No
4. Share Capital and Shareholder Information
(1) Numbers of Common Shareholders and Preferred Shareholders with Resumed Voting
Rights as well as Shareholdings of Top 10 Shareholders
Unit: share
Preferred
Common Preferred
shareholders with
Common shareholders at shareholders
resumed voting
shareholders at 30,241 month-end prior 33,650 with resumed 0
rights at month-end
period-end to disclosure of voting rights at
prior to disclosure of
this Report period-end
this Report
Top 10 shareholders
Shareholding Pledged or frozen shares
Name of Nature of
percentage at Shares Restricted shares
shareholder shareholder Status Shares
period-end (%)
BEIJING GRAIN
State-owned
GROUP CO., 42.06% 288,439,561 164,877,598
juridical person
LTD.
BEIJING
STATE-OWNED
CAPITAL
State-owned
OPERATION 7.07% 48,510,460 48,510,460
juridical person
AND
MANAGEMENT
CENTER
CHINA
DEVELOPMENT State-owned
3.33% 22,828,451 22,828,451
BANK CAPITAL juridical person
CO., LTD.
GOLD
BUFFALO
RUNYING Domestic
(TIANJIN) non-state-owned 3.33% 22,828,451 22,828,451
EQUITY juridical person
INVESTMENT
FUND (L.P.)
LI SHERYN Foreign natural
3.30% 22,620,168 0
ZHAN MING person
Domestic
MEI JIANYING 0.38% 2,597,803 0
natural person
Domestic
XU ZHEN 0.37% 2,518,300 0 Frozen 1,550,000
natural person
ZHANG Domestic
0.28% 1,949,250 0
XIAOXIA natural person
WANG Domestic
0.27% 1,836,500 0
XIAOXING natural person
Domestic
ZHONG YI 0.25% 1,730,083 0
natural person
Beijing State-Owned Capital Operation And Management Center owns 100% of Beijing
Related or acting-in-concert parties
Grain Group Co., Ltd., and Beijing Grain Group Co., Ltd. is a shareholder of the Company
among shareholders above (a 42.06% holding). Apart from that, the Company does not know whether there are any
other related parties or acting-in-concert parties among the top 10 shareholders.
1. Shareholder Wang Xiaoxing holds 1,836,500 shares in the Company through his account
Shareholders conducting securities of collateral securities for margin trading in Soochow Securities Co., Ltd.
margin trading (if any) 2. Shareholder Zhong Yi holds 1,730,083 shares in the Company through his account of
collateral securities for margin trading in Fortune Securities Co., Ltd.
(2) Number of Preferred Shareholders and Shareholdings of Top 10 of Them
No preferred shareholders in the Reporting Period.
(3) Ownership and Control Relations between Actual Controller and the Company
State-owned Assets Supervision and
Administration Commission of People’s
Government of Beijng Municipality
100%
Beijing Grain Group Co., Ltd.
42.06%
Hainan Jingliang Holdings Co., Ltd.
5. Corporate Bonds
The Company has no corporate bonds publicly offered and listed on the stock exchange, which
were undue before the date of this Report’s approval or were due but could not be redeemed in
full.
Part III Company Performance Discussion and Analysis
1. Business Review for Reporting Period
(1) Overall Performance
In face of the increasingly unfavorable market and industry environments, the Company pursued
progress amid stability. For 2017, the Company recorded sales revenue of RMB7.918 billion, with
net income attributable to its shareholders being RMB129.6 million and earnings per share
RMB0.20. By operating division, the oils division generated sales revenue of RMB6.587 billion (a
29.78% year-over-year increase) with net income attributable to the Company (as the parent
company) before non-recurring gains and losses being RMB80.55 million (a 21.64%
year-over-year increase); and the food processing division generated sales revenue of RMB829
million (a year-over-year increases of 5.73%) with net income attributable to the Company (as the
parent company) before non-recurring gains and losses being RMB70.6663 million (a 50.08%
year-over-year increase).
Beijing Jingliang Food Co., Ltd., a swapped-in asset of the Company, registered sales revenue of
RMB7.453 billion and net income attributable to the Company (as the parent company) before
non-recurring gains and losses of RMB0.157 billion, over-fulfilling its 2017 annual income
commitment of RMB0.13 billion.
(2) Major Work Done
① Successful completion of reorganization
After the hard work of the reorganized parties, the reorganization of the Company and Beijing
Grain Group was completed successfully. On July 31, 2017, the Company received the “Approval
of Permitting Hainan Pearl River Holdings Co., Ltd. to Purchase Assets of Beijing Grain Group
Co., Ltd. and Raise Supporting Funds by Issuing Shares” (CSRC Approval [2017] No. 1391). On
September 30, 2017, major asset swaps were completed, in which 100% of purchased assets were
placed into listed companies and 93.46% of the sales of assets were completed. On November 15,
2017, the issuance of shares for asset purchase and supporting funds raise were completed.
② Steady growth of oils and oilseeds business
Under a market environment that oil and oilseed prices fell sharply in the first half of the year and
fluctuated low in the second half of the year, in its oils and oilseeds business division, the
Company made innovation in operation mode, optimization in product structure and enhancement
in fine management. A total of 1.6777 million tons of oils and oilseeds were sold during the
Reporting Period, generating revenue of RMB6.587 billion (a 29.78% year-over-year increase)
with net income attributable to the Company (as the parent company) before non-recurring gains
and losses being RMB80.55 million (a 21.64% year-over-year increase). Firstly, new
breakthroughs in oil processing were achieved. In terms of oil processing, the Company focused
on lean management by means of 6s, comprehensive budget management, risk prevention and
control system construction to comprehensively enhance the operation level, keep improving
quality and efficiency. The annual processing volume exceeded 1 million tons with an operation
rate of 83.33%, being at the forefront of the industry. Secondly, brand product structure was
gradually optimized. The series of brands including “Gu Chuan”, “Lv Bao”, “Gu Bi”, “Huo Niao”
and “Tian Yi” increased product R&D focusing on high value-added products. The Company
gathered marketing resources and strengthened assessment incentives to promote continuous
optimization of product structure, and thus achieved substantial growth in sales of high
value-added products such as sesame oil, rapeseed oil and flaxseed oil, etc., of which sales of
sesame oil increased by 23.18% year-over-year. Thirdly, steady progress had been made in the
trade reserve. In terms of oil and oilseed trade, the Company adhered to the sales model of
combination of futures trading and actual transactions strengthened market judgment, made
innovation in operation and prevented business risks, thus achieved an annual trade volume of oils
and oilseeds amounted to 424,000 tons, an increase of 59.81% year-over-year, covering more than
12 varieties such as soybean, rapeseed oil and flaxseed. Regarding oil reserve, the Company
adhered strictly to the rules and regulations and strengthened the standardized management. There
were no accidents throughout the year, and 60,000 tons of storage was successfully completed
in-out-stock.
③ Rapid development of food processing business
Facing the adverse conditions of fierce competition in the end market and rising raw and auxiliary
materials in its food processing business, the Company got over both internal and external
difficulties, achieving sales revenue of RMB829 million for the year (a year-over-year increases of
5.73%) with net income attributable to the Company (as the parent company) before non-recurring
gains and losses being RMB70.6663million (a 50.08% year-over-year increase). Firstly, the snack
food business maintained a rapid growth. In terms of snack food business, the Company adhered
to the development model of “Differentiated Asymmetric Competitive Strategy” and “Professional
Manufacturing + Cultural Innovation + Internet Gene”, focusing on the three major categories of
potato, puffed food and pastry. This business division centered on product R&D, intensified fine
management and laid stress on channel expansion, and thus achieved annual sales revenue of
RMB771 million, an increase of 5.47% year-over-year. The Company owned 1,470 clients with a
reasonable layout including comprehensive channels, terminal channels, circulation channels and
special channels to sell products to all regions in the country. The sales revenue of main products
\"MS Dong\" and \"Jianqiang De Tudou\" accounted for 32.7% of the total sales revenue, playing a
significant role in strategic driving effect. The newly introduced \"Dai Bu’Er\", \"12 Constellations\"
and \"Daily Walnut\" also won a good market response with a sales revenue accounting for 29% of
the total, playing an important role in stimulating the market. Secondly, the bread processing
business was ready for expansion. The Company actively expanded the retail market of bread
business and enriched the product structure to reversed the downward trend in previous years, and
sales in KFC and retail channels increased by 8.5% and 44% respectively, building a base for the
next step, that is, on the one hand, the cooperation with the Wumart Group in capital level entered
the substantive stage. The two parties had signed a strategic cooperation agreement, and the bread
products would be available for sale in the 350 stores of Wumart in Beijing. On the other hand, the
expansion of the baking industry would be carried out in an orderly manner, and stores would be
opened in Tianjin and Beijing. Moreover, the ERP system and institutional mechanisms would be
established for standardization.
④ Increase of corporate influence
The influence of the Company in the industry keeps increasing with economic efficiency, business
expansion and publicity and promotion. The \"Gu Chuan\" brand owned by the Company won the
honor of most influential brand in Beijing. Zhejiang Xiaowangzi Food Share Co., Ltd., a
subsidiary of the Company, was assessed the “National Leading Food Enterprise of the Food
Industry for 2016-2017” by the China Food Industry Association. Firstly, the Company got
involved in the field of land restoration. In accordance with development strategy, the Company
established cooperation with Tangshan Caofeidian Agricultural Development Group and the
government of Yaowan Town, Xinyi City, Jiangsu Province to set up Beijing Grain (Caofeidian)
Agricultural Development Co., Ltd. and Beijing Grains Lands Construction and Operation (Xinyi)
Co., Ltd. respectively to gain stable profits through land restoration following up the land
increase/decrease linking policy, and built a good base for the company profit growth in the next
step. Secondly, the Company keeps expanding the business area. In terms of oil business, with the
help of coordinated development of Beijing, Tianjin and Hebei, the Company cooperated with
Hebei Grain Industry Group Co., Ltd. to establish Beijing Grain (Hebei) Oil Co., Ltd., which
became an important fulcrum for the brand products layout of the Company in the Shijiazhuang
market. At present, the marketing layout of oil business is basically formed in Beijing, Tianjin and
Shijiazhuang, radiating to the whole region of Beijing, Tianjin and Hebei. With regards to snack
food business, the Company had held six large-scale marketing and promotion conferences in
Chuntang of Chengdu, Emeishan, Xi’an, Dalian, Huangshan and Chongqing, as well as more than
60,000 sales terminal promotion activities, further deepening the marketing channels covering the
whole country. Thirdly, the Company kept improving the brand image. Relying on the excellent
performance of the grain and oil products in the Beijing market and the recognition of consumers,
the Gu Chuan brand won the honor of most influential brand in the 8th Beijing Influence
Evaluation among the tens of thousands of participants. The two super IPs of snack foods have
achieved initial success: “MS Dong” has become a hot product by internet communications such
as WeChat, micro-blog, microfilm and Internet novels, while the “Jianqiang De Tudou” brand
targeted young consumers. The products will be given cultural connotation by series of animations
and related preparations have already been started. The improvement of brand image has further
enhanced the promotion of product marketing.
2. Material Change in Main Business Scope in Reporting Period
√ Yes □ No
During the Reporting Period, the Company completed a significant asset restructuring, and its
main business scope has changed from real estate development, resort hotel operation and
property management to vegetable oil processing, food production and land restoration.
3. Product Categories Contributing over 10% of Main Business Revenue or Income
√ Applicable □ Not applicable
Unit: RMB
YoY change in YoY change in
Product Operating Gross margin YoY change in
Sales revenue operating gross margin
category income percentage sales revenue
income percentage
Oils and
6,587,444,233.67 326,022,728.20 4.95% 29.78% 12.07% -0.78%
oilseeds
Food
829,093,442.40 248,082,750.24 29.92% 5.73% 7.82% 0.58%
processing
4. Business Seasonality to which Special Attention should Be Paid
□ Yes √ No
5. Material YoY Changes in Sales Revenue, Cost of Sales and Net Income Attributable to
Common Shareholders or Their Composition
√ Applicable □ Not applicable
(1) Sales revenue and cost of sales decrease primarily because the sales revenue and cost of sales
of January-May 2016 include revenue and cost of 14 grain trading subsidiaries (all transferred at
the end of May 2016) and there was no such business in the current period. (2) Net income
attributable to shareholders of the listed company decreases primarily because the Company
earned net income of RMB152.85 million in 2016 from disposal of its equity investments in
Heilongjiang Longshi Pearl River Media Co., Ltd. and Days Hotel & Suites Sanya Resort as well
as three villas in Sanya City, Hainan Province.
6. Possibility of Listing Suspension or Termination
□ Applicable √ Not applicable
7. Matters Related to Financial Reporting
(1) YoY Changes in Accounting Policies, Accounting Estimates or Measurement Methods
√ Applicable □ Not applicable
The Company’s asset and business structures have changed significantly upon the completion of a
significant asset restructuring. In order to provide a more objective, truer and fairer reflection of
its financial condition and operating results, based on its business size and features, and referring
to the corresponding accounting estimates of comparable listed companies in the same industry,
the Company has adjusted its accounting estimates regarding the allowance ratios on doubtful
receivable accounts, as well as the depreciable lives and yearly depreciation rates of property,
plant and equipment. For further information, see the Announcement on Changes to Allowance
Ratios on Doubtful Receivable Accounts, as well as Depreciable Lives and Yearly Depreciation
Rates of Property, Plant and Equipment on www.cninfo.com.cn.
As the Ministry of Finance issued during the Reporting Period the Accounting Standard No. 42 for
Business Enterprises—Non-Current Assets and Disposal Groups Classified as Held for Sale and
Discontinued Operations, the revised Accounting Standard No. 16 for Business
Enterprises—Government Subsidies, and the Notice on Revising and Issuing Format of Financial
Statements of General Enterprises, the adoption of these new regulations by the Company has
incurred changes to its accounting policies. For further information, see the Announcement on
Accounting Policy Changes on www.cninfo.com.cn.
(2) Retrospective Restatements due to Correction of Material Accounting Errors in
Reporting Period
□ Applicable √ Not applicable
No such cases.
(3) YoY Changes in Scope of Consolidated Financial Statements
√ Applicable □ Not applicable
Material changes have occurred to the scope of the Company’s consolidated financial statements
of the Reporting Period due to a significant asset restructuring. 18 new entities are included and 16
former entities are excluded compared to 2016. This is because the swapped-in assets were
accounted for as business mergers under the same control, and the financial statements of 2016
were retrospectively adjusted accordingly. On May 31, 2016, in order to eradicate the horizontal
competition between Jingliang Food’s 14 trading subsidiaries and Beijing Grain Group, as
approved by the State-owned Assets Supervision and Administration Commission of People’s
Government of Beijing Municipality, Jingliang Food transferred its holdings in the 14 trading
companies (Beijing Jingliang Xingye Trading Co., Ltd., Beijing Jingliang Jinfeng Grain and Oil
Trading Co., Ltd., etc.) to Beijing Grain Group. As such, the Company’s consolidated financial
statements included the aforesaid 14 trading companies for January-May 2016. July 31, 2017 was
the settlement day for the Company’s mater asset restructuring. According to the relevant
restructuring agreements, since the settlement day, certain of the Company’s former subsidiaries
(Shanghai Real Estate, Jiubo Culture, Mudanjiang Group, Pearl River Property Management,
Hubei Real Estate, Hebei Real Estate, etc.) would no longer be included in the Company’s
consolidated financial statements. As for equity investments swapped out, they would no longer
be consolidated since the settlement day and the opening amounts of the balance sheets would not
be adjusted.
Consolidated Balance Sheet
December 31st, 2017
Preparation Unit: Hainan Jingliang Holdings Co., Ltd. Monetary Unit: RMB
Items Notes Ending Balance Beginning Balance
Current assets:
Currency fund VI. 1 1,014,438,663.43 652,870,239.91
Financial assets that are measured at fair value
and whose changes are included in the current
profit and loss
Derivative financial assets VI. 2 176,699,298.60 66,667,426.60
Notes receivable
Accounts receivable VI. 3 75,165,127.11 83,520,131.60
Prepayment VI. 4 912,843,489.70 132,969,364.73
Interest receivable VI. 5 2,657,591.11 4,178,348.79
Dividends receivable VI. 6 260,015.00
Other receivables VI. 7 73,064,548.76 357,055,607.58
Inventory VI. 8 1,393,958,764.07 775,376,454.78
Held-for-sale assets
Non-current assets due within one year VI. 9 51,000,000.00
Other current assets VI. 10 165,867,238.70 424,782,623.76
Total Current Assets 3,865,694,721.48 2,497,680,212.75
Non-current assets:
Available-for-sale financial assets VI. 11 20,000,000.00 30,824,994.90
Held-to-maturity investment
Long-term receivables
Long-term equity investment VI. 12 174,589,701.74 171,465,314.90
Investment real estate VI. 13 35,008,852.62 49,490,079.75
Fixed assets VI. 14 1,333,410,146.38 1,508,710,556.28
Project under construction VI. 15 12,737,673.01 109,410,883.57
Engineering material
Disposal of fixed assets
Productive biological asset
Oil and gas assets
Intangible assets VI. 16 398,844,032.07 403,202,499.05
Development expenditure
Business reputation VI. 17 191,394,422.51 191,394,422.51
Long-term unamortized expenses VI. 18 33,247,595.28 29,082,767.56
Deferred income tax assets VI. 19 14,179,072.07 11,562,156.93
Other non-current assets VI. 20 3,277,634.07 4,519,435.80
Total Non-Current Assets 2,216,689,129.75 2,509,663,111.25
Total Assets 6,082,383,851.23 5,007,343,324.00
Consolidated Balance Sheet（Continued）
December 31st, 2017
Preparation Unit: Hainan Jingliang Holdings Co., Ltd. Monetary Unit: RMB
Items Notes Ending Balance Beginning Balance
Current liabilities:
Short-term borrowing VI. 21 2,007,171,362.73 62,681,281.00
Financial assets that are measured at fair value and whose
changes are included in the current profit and loss
Derivative financial assets
Notes payable VI. 22 83,154,229.20 35,358,929.55
Accounts payable VI. 23 317,538,928.27 461,294,581.74
Account collected in advance VI. 24 212,124,147.38 586,907,614.36
Employee pay payable VI. 25 30,762,031.53 44,574,235.79
Tax payable VI. 26 36,855,139.18 130,157,235.63
Interest payable VI. 27 86,064,211.31 90,011,566.90
Dividends payable VI. 28 3,397,317.01 3,397,317.01
Other payables VI. 29 451,938,294.35 680,347,428.44
Held-for-sale liabilities
Non-current liabilities due within one year VI. 30 117,210,181.59
Other current liabilities VI. 31 90,215,292.43
Total Current Liability 3,319,220,953.39 2,211,940,372.01
Non-current liability:
Long-term loan VI. 32 73,666,666.66
Bonds payable
Including: Preferred shares
Perpetual capital securities
Long-term account payable VI. 33 801,625.20
Long-term employee pay payable VI. 34 26,791,209.91 14,310,251.15
Special accounts payable VI. 35 1,153,176.66
Anticipation liabilities
Deferred income VI. 36 78,961,972.67 81,063,077.48
Deferred income tax liabilities VI. 19 56,185,676.15 67,598,052.00
Other non-current liabilities
Total Non-Current Liabilities 162,740,483.93 237,791,223.95
Total Liabilities 3,481,961,437.32 2,449,731,595.96
Stockholder's Equity
Capital stock VI. 37 685,790,364.00 426,745,404.00
Other equity instruments
Including: Preferred shares
Perpetual capital securities
Capital surplus VI. 38 1,592,541,582.73 1,381,337,052.83
Minus: Treasury stock
Other comprehensive incomes
Special reserves
Earned surplus VI. 39 122,122,436.98 122,122,436.98
Undistributed profit VI. 40 -299,111,700.34 -547,123,017.26
The total shareholders' equity that owned by the parent
2,101,342,683.37 1,383,081,876.55
company
Minority stockholder's interest 499,079,730.54 1,174,529,851.49
Total Shareholder's Equity 2,600,422,413.91 2,557,611,728.04
Total Liabilities and Stockholders' Equity 6,082,383,851.23 5,007,343,324.00
Legal Representative：Wang Guofeng; Director in charge of the accountancy：Guan Ying; Director of the Accounting：Liu Quanli
Consolidated Statement of Income
In 2017
Preparation Unit: Hainan Jingliang Holdings Co., Ltd. Monetary Unit: RMB
Amount of Current
Items Notes Amount of Prior Period
Period
I Gross Revenue 7,917,639,044.13 8,723,491,657.31
Including: Operating income VI. 41 7,917,639,044.13 8,723,491,657.31
II Total Operating Cost 7,693,317,738.97 8,632,663,681.18
Including: Operating cost VI. 41 7,181,328,452.58 7,847,504,299.63
Taxes and surcharges VI. 42 48,329,859.31 106,165,952.86
Selling expense VI. 43 184,694,169.58 217,477,816.21
Administration expense VI. 44 236,344,350.73 294,730,442.44
Financial expense VI. 45 32,018,799.28 101,660,683.50
Assets impairment loss VI. 46 10,602,107.49 65,124,486.54
Plus: Fair value variable income (the
VI. 47 12,934,641.69 35,975,331.06
loss shall be filled in with \"-\")
Income from investment (the loss
VI. 48 25,583,710.12 251,240,702.96
shall be filled in with \"-\")
Including: the investment income
12,343,020.80 9,809,321.53
of joint venture and cooperative enterprise
Asset disposal income (the loss
VI. 49 -6,770.67 17,918,094.06
shall be filled in with \"-\")
Other incomes VI. 50 15,139,922.81
III Operating Profit（the loss shall be
277,972,809.11 395,962,104.21
filled in with \"-\"）
Plus: Non-business income VI. 51 25,718,245.18 76,266,318.02
Minus: Non-business expenditure VI. 52 19,040,592.81 30,248,373.63
IV Total Profit（the total loss shall be
284,650,461.48 441,980,048.60
filled in with \"-\"）
Minus: Income tax expense VI. 53 75,954,170.72 128,589,026.01
V Net Profit （the net loss shall be filled
208,696,290.76 313,391,022.59
in with \"-\"）
i Classification according to the Business
Continuity:
1. Continuous operating net profit (the net
195,974,221.49 232,484,589.36
loss shall be filled in with \"-\")
2. Discontinued operating net profit (the
12,722,069.27 80,906,433.23
net loss shall be filled in with \"-\")
i i Classification according to the
Attribution of the Ownership:
1. Minority interest income (the net loss
79,093,123.40 116,071,783.58
shall be filled in with \"-\")
2. The net profit that attributed to the
parent company's shareholders (the net loss 129,603,167.36 197,319,239.01
shall be filled in with \"-\")
VI After-Tax Net Amount of Other
Comprehensive Incomes
The after-tax net amount of other
comprehensive incomes that attributed to
the shareholders of the parent company
i Other comprehensive incomes that
cannot be reclassified into the profit and
loss
1. Remeasure the variations in net
liabilities or net assets of a defined benefit
plan
2. The share of other comprehensive
incomes that can not be reclassified into
the profit and loss by the units of
investment under the equity method
ii Other comprehensive incomes that will
be reclassified into the profit and loss
1. The share of other comprehensive
incomes that will be reclassified into the
profit and loss by the units of investment
under the equity method
2. The variable profit and loss of fair
value for available-for-sale financial assets
3. The reclassification of held-to-maturity
investment is the profit or loss of
available-for-sale financial assets
4. The effective part of the profit and loss
of a cash-flow hedge
5. Translation difference of financial
statements in foreign currency
6. Others
The after-tax net amount of other
comprehensive incomes that attributed to
minority shareholders
VII Total Comprehensive Income 208,696,290.76 313,391,022.59
Total comprehensive income that
attributed to the shareholders of the parent 129,603,167.36 197,319,239.01
company
Total comprehensive income that
79,093,123.40 116,071,783.58
attributed to minority shareholders
VIII Earnings per Share:
i Basic EPS 0.20 0.31
ii Diluted EPS 0.20 0.31
Legal Representative：Wang Guofeng; Director in charge of the accountancy：Guan Ying; Director of the Accounting：Liu Quanli
Consolidated Statement of Cash Flow
In 2017
Preparation Unit: Hainan Jingliang Holdings Co., Ltd. Monetary Unit: RMB
Amount of Current
Items Notes Amount of Prior Period
Period
I Cash Flow Generated During the
Operating Activities:
Cash received from selling goods and
8,251,911,188.11 9,931,688,535.62
providing services
Refund of tax and levies 10,710,699.86 11,591,402.06
Cash received relating to other
VI. 54 1,181,639,304.13 960,589,597.39
operating activities
Sub-Total of Cash Inflow from
9,444,261,192.10 10,903,869,535.07
Operating Activities
Cash paid for purchasing goods and
8,790,585,364.38 7,891,283,396.75
receiving labor services
Cash paid to employee and for
390,806,974.57 480,498,870.07
employee
Tax payments 296,671,364.50 274,849,040.78
Other cash payments related to
VI. 54 1,345,705,268.31 1,308,908,067.33
business activities
Sub-Total of Cash Outflows from
10,823,768,971.76 9,955,539,374.93
Operating Activities
Net Amount of Cash Flow Generated
-1,379,507,779.66 948,330,160.14
During the Operating Activities
II Cash Flow Generated During the
Investment Activities:
Cash received from recouping the
933,048,283.00 1,919,284,681.51
capital outlay
Cash received from the returns on
21,904,165.76 4,736,279.20
investments
Net cash received from the disposal
of fixed assets, intangible assets and other 43,733,447.51 5,258,982.89
long term assets recovery
Net cash received from the disposal
-181,590,429.61 401,260,323.09
of subsidiaries and other business entities
Other cash received relating to
VI. 54 49,136.10
investing activities
Sub-Total of Cash Inflow from
817,144,602.76 2,330,540,266.69
Investment Activities
Cash paid for the construction of
fixed assets, intangible assets and other 42,495,582.86 105,593,394.60
long term assets
Cash paid for investment 1,298,701,195.80 2,043,867,856.00
Net cash received from the payment
204,524,900.00
of subsidiaries and other business entities
Other cash paid relating to
investment activities
Sub-Total of Cash Outflows from
1,545,721,678.66 2,149,461,250.60
Investment Activities
Net Amount of Cash Flow Generated
-728,577,075.90 181,079,016.09
During the Investment Activities
III Cash Flow Generated During the
Financial Activities:
Cash received by absorbing
805,020,812.32
investment
Including: Cash received by
absorbing the investments of minority 8,748,313.76
shareholders by the subsidiaries.
Cash received from obtaining the
2,566,546,770.86 1,027,483,119.82
loans
Cash received from the issuance of
bonds
Other cash received relating to the
VI. 54 973,018,281.64
financial activities
Sub-Total of Cash Inflows from
3,371,567,583.18 2,000,501,401.46
Financial Activities
Cash paid for the repayments of debts 690,254,732.20 3,278,654,815.27
Cash paid for the distribution of
dividends, profits, or cash payments for 64,780,406.38 64,810,405.05
interests
Including: the dividends and profits
that paid by the subsidiaries to the minority
shareholders
Other cash paid relating to the
VI. 54 1,979,044.96 175,478,292.91
financial activities
Sub-Total of Cash Outflows from
757,014,183.54 3,518,943,513.23
Financial Activities
Net Amount of Cash Flow Generated
2,614,553,399.64 -1,518,442,111.77
During the Financial Activities
IV Effect of Exchange Rate Movement
2,492,271.54 1,183,694.57
on Cash and Cash Equivalents
V Net Additional Amount of Cash and
508,960,815.62 -387,849,240.97
Cash Equivalents
Plus: the balance of cash and cash
505,477,847.81 893,327,088.78
equivalents in the beginning of the period
VI Balance of Cash and Cash
1,014,438,663.43 505,477,847.81
Equivalents in the End of the Period
Legal Representative：Wang Guofeng; Director in charge of the accountancy：Guan Ying; Director of the Accounting：Liu Quanli
Consolidated Statement of Changes in Stockholder's Equity
In 2017
Preparation Unit: Hainan Jingliang Holdings Co., Ltd. Monetary Unit: RMB
Amount of Current Period
Stockholder's Equity that Attributed to the Parent Company
Other Equity Instruments
Items Other Total
Minority
Minus: Comp Spec Prepara Stockholder's
Earned Undistributed Equity
Capital Stock Capital Surplus Treasu rehens ial tion for Subtotal Equity
Perpetual Surplus Profit
Preferre Others ry ive Rese General
Capital
d Shares Stock Incom rves Risk
Securities
es
I Balance at the End of Last
426,745,404.00 1,381,337,052.83 122,122,436.98 -547,123,017.26 1,383,081,876.55 1,174,529,851.49 2,557,611,728.04
Year
Plus: changes in accounting
policies
Prior period errors correction
Business merger under the
-1,312,383,054.76 118,408,149.56 -1,193,974,905.20 -1,193,974,905.20
same control
Others
II Balance at the Beginning of
426,745,404.00 68,953,998.07 122,122,436.98 -428,714,867.70 189,106,971.35 1,174,529,851.49 1,363,636,822.84
this Year
III Amount of Changes in
Increase and Decrease of this
259,044,960.00 1,523,587,584.66 129,603,167.36 1,912,235,712.02 -675,450,120.95 1,236,785,591.07
Period (the decrease shall be
filled in with \"-\")
i Total Comprehensive
129,603,167.36 129,603,167.36 79,093,123.40 208,696,290.76
Income
ii Shareholder Investment
259,044,960.00 1,523,587,584.66 1,782,632,544.66 -632,300,428.15 1,150,332,116.51
and Capital Reduction
1. The common stock invested
259,044,960.00 1,496,058,401.52 1,755,103,361.52 46,450,000.00 1,801,553,361.52
by the shareholders
2. The assets invested by other
equity instrument holders
3. The amount of share-based
payment that included in the
stockholder's equity
4. Others 27,529,183.14 27,529,183.14 -678,750,428.15 -651,221,245.01
iii Distribution of Profits -6,944,385.43 -6,944,385.43
1. Withdraw surplus reserves
2. Withdraw general risk
preparation
3. Distribution to shareholders -6,944,385.43 -6,944,385.43
4. Others
iv Internal Transfer of
-115,298,430.77 -115,298,430.77
Shareholders' Equity
1. Capital reserves are
transferred to paid-in capital (or
capital stock)
2. Surplus reserves are
transferred to paid-in capital (or
capital stock)
3. Surplus reserves cover losses
4. Others -115,298,430.77 -115,298,430.77
V Special Reserves
1. Withdrawal of current period
2、Usage of current period
VI Others
IV Balance at the End of this
685,790,364.00 1,592,541,582.73 122,122,436.98 2,101,342,683.37 499,079,730.54 2,600,422,413.91
Year -299,111,700.34
Legal Representative：Wang Guofeng; Director in charge of the accountancy：Guan Ying; Director of the Accounting：Liu Quanli
Consolidated Statement of Changes in Stockholder's Equity (Continued)
In 2017
Preparation Unit: Hainan Jingliang Holdings Co., Ltd. Monetary Unit: RMB
Amount of Last Period
Stockholder's Equity that Attributed to the Parent Company
Other Equity Instruments
Items Total
Other
Minus: Speci Minority Equity Stockholder's
Compre Earned Undistributed
Capital Stock Capital Surplus Treasury al Subtotal Equity
Perpetual hensive Surplus Profit
Preferred Others Stock Reser
Capital Incomes
Shares ves
Securities
I Balance at the End of Last
426,745,404.00 334,690,837.45 109,487,064.39 -1,088,060,174.99 -217,136,869.15 -16,057,057.25 -233,193,926.40
Year
Plus: changes in
accounting policies
Prior period errors correction
Business merger under the
837,721,613.89 12,635,372.59 343,617,918.72 1,193,974,905.20 1,178,626,804.25 2,372,601,709.45
same control
Others
II Balance at the Beginning
426,745,404.00 1,172,412,451.34 122,122,436.98 -744,442,256.27 976,838,036.05 1,162,569,747.00 2,139,407,783.05
of this Year
III Amount of Changes in
Increase and Decrease of this
208,924,601.49 197,319,239.01 406,243,840.50 11,960,104.49 418,203,944.99
Period (the decrease shall be
filled in with \"-\")
i Total Comprehensive
197,319,239.01 197,319,239.01 4,179,154.18 201,498,393.19
Income
ii Shareholder Investment
208,924,601.49 208,924,601.49 7,780,950.31 216,705,551.80
and Capital Reduction
1. The common stock invested
by the shareholders
2. The assets invested by other
equity instrument holders
3. The amount of share-based
payment that included in the
stockholder's equity
4. Others 208,924,601.49 208,924,601.49 7,780,950.31 216,705,551.80
iii Distribution of Profits
1. Withdraw surplus reserves
2. Withdraw general risk
preparation
3. Distribution to shareholders
4. Others
iv Internal Transfer of
Shareholders' Equity
1. Capital reserves are
transferred to paid-in capital (or
capital stock)
2. Surplus reserves are
transferred to paid-in capital (or
capital stock)
3. Surplus reserves cover
losses
4. Others
V Special Reserves
1. Withdrawal of current
period
2、Usage of current period
VI Others
IV Balance at the End of this
426,745,404.00 1,381,337,052.83 122,122,436.98 -547,123,017.26 1,383,081,876.55 1,174,529,851.49 2,557,611,728.04
Year
Legal Representative：Wang Guofeng; Director in charge of the accountancy：Guan Ying; Director of the Accounting：Liu Quanli
Balance Sheet
December 31st, 2017
Preparation Unit: Hainan Jingliang Holdings Co., Ltd. Monetary Unit: RMB
Items Notes Ending Balance Beginning Balance
Current assets:
Currency fund 15,360,177.32 33,952,786.37
Financial assets that are measured at fair
value and whose changes are included in the
current profit and loss
Derivative financial assets
Notes receivable
Accounts receivable XV. 1 109,389.00 1,032,085.83
Prepayment 50,000,000.00
Interest receivable
Dividends receivable 260,015.00
Other receivables XV. 2 60,576,292.62 591,785,222.60
Inventory 4,824,035.45 4,824,035.45
Held-for-sale assets
Non-current assets due within one year
Other current assets 2,905,667.38
Total Current Assets 83,775,561.77 681,854,145.25
Non-current assets:
Available-for-sale financial assets 20,000,000.00 30,824,994.90
Held-to-maturity investment
Long-term receivables
Long-term equity investment XV. 3 2,336,639,964.05 101,713,800.55
Investment real estate 6,081,230.93 6,383,667.53
Fixed assets 3,589,144.87 4,019,513.64
Project under construction
Engineering material
Disposal of fixed assets
Productive biological asset
Oil and gas assets
Intangible assets
Development expenditure
Business reputation
Long-term unamortized expenses 278,707.32
Deferred income tax assets
Other non-current assets
Total Non-Current Assets 2,366,310,339.85 143,220,683.94
Total Assets 2,450,085,901.62 825,074,829.19
Balance Sheet (Continued)
December 31st, 2017
Preparation Unit: Hainan Jingliang Holdings Co., Ltd. Monetary Unit: RMB
Items Notes Ending Balance Beginning Balance
Current liabilities:
Short-term borrowing
Financial assets that are measured at fair value and
whose changes are included in the current profit and loss
Derivative financial assets
Notes payable
Accounts payable 2,482,949.70 2,482,949.70
Account collected in advance 38,896.41 38,896.41
Employee pay payable 2,017,684.57 1,224,801.48
Tax payable 2,557,993.95 27,537,449.60
Interest payable 82,468,756.03 82,468,756.03
Dividends payable 3,213,302.88 3,213,302.88
Other payables 363,827,970.43 650,471,361.88
Held-for-sale liabilities
Non-current liabilities due within one year
Other current liabilities
Total Current Liability 456,607,553.97 767,437,517.98
Non-current liability:
Long-term loan
Bonds payable
Including: Preferred shares
Perpetual capital securities
Long-term account payable
Long-term employee pay payable
Special accounts payable
Anticipation liabilities
Deferred income
Deferred income tax liabilities
Other non-current liabilities
Total Non-Current Liabilities
Total Liabilities 456,607,553.97 767,437,517.98
Stockholder's Equity
Capital stock 685,790,364.00 426,745,404.00
Other equity instruments
Including: Preferred shares
Perpetual capital securities
Capital surplus 2,173,387,468.71 546,201,098.01
Minus: Treasury stock
Other comprehensive incomes
Special reserves
Earned surplus 109,487,064.39 109,487,064.39
Undistributed profit -975,186,549.45 -1,024,796,255.19
Total Shareholder's Equity 1,993,478,347.65 57,637,311.21
Total Liabilities and Stockholders' Equity 2,450,085,901.62 825,074,829.19
Legal Representative：Wang Guofeng; Director in charge of the accountancy：Guan Ying; Director of the Accounting：Liu Quanli
Statement of Income
In 2017
Preparation Unit: Hainan Jingliang Holdings Co., Ltd. Monetary Unit: RMB
Items Notes Amount of Current Period Amount of Prior Period
I Operating Income XV. 4 2,857.14 1,237,868.46
Minus: Operating cost XV. 4 302,436.60 324,585.35
Taxes and surcharges 1,201,827.31 4,502,377.57
Selling expense
Administration expense 29,147,752.63 35,889,607.02
Financial expense -6,912,084.36 56,156,435.09
Assets impairment loss 834,972.20 216,946,326.92
Plus: Fair value variable income (the loss shall
be filled in with \"-\")
Income from investment (the loss
XV. 5 74,749,139.55 -53,010,262.27
shall be filled in with \"-\")
Including: the investment income of
-1,070,860.45 -1,417,962.27
joint venture and cooperative enterprise
Asset disposal income (the loss
-3,744.70 21,623,166.79
shall be filled in with \"-\")
Other incomes
II Operating Profit（the loss shall be filled in
50,173,347.61 -343,968,558.97
with \"-\"）
Plus: Non-business income 277,830.06 290,749.17
Minus: Non-business expenditure 841,471.93 5,878,181.23
III Total Profit（the total loss shall be filled in
49,609,705.74 -349,555,991.03
with \"-\"）
Minus: Income tax expense 26,760,434.60
IV Net Profit （the net loss shall be filled in
49,609,705.74 -376,316,425.63
with \"-\"）
i Continuous operating net profit (the net loss
49,609,705.74 -376,316,425.63
shall be filled in with \"-\")
ii Discontinued operating net profit (the net
loss shall be filled in with \"-\")
V After-Tax Net Amount of Other
Comprehensive Incomes
i Other comprehensive incomes that cannot be
reclassified into the profit and loss
1. Remeasure the variations in net liabilities or
net assets of a defined benefit plan
2. The share of other comprehensive incomes
that can not be reclassified into the profit and
loss by the units of investment under the equity
method
ii Other comprehensive incomes that will be
reclassified into the profit and loss
1. The share of other comprehensive incomes
that will be reclassified into the profit and loss
by the units of investment under the equity
method
2. The variable profit and loss of fair value for
available-for-sale financial assets
3. The reclassification of held-to-maturity
investment is the profit or loss of
available-for-sale financial assets
4. The effective part of the profit and loss of a
cash-flow hedge
5. Translation difference of financial
statements in foreign currency
6. Others
VI Total Comprehensive Income 49,609,705.74 -376,316,425.63
Legal Representative：Wang Guofeng; Director in charge of the accountancy：Guan Ying; Director of the Accounting：Liu Quanli
Statement of Cash Flow
In 2017
Preparation Unit: Hainan Jingliang Holdings Co., Ltd. Monetary Unit: RMB
Amount of Current
Items Notes Amount of Prior Period
Period
I Cash Flow Generated During the Operating Activities:
Cash received from selling goods and providing services 12,505,200.00
Refund of tax and levies
Cash received relating to other operating activities XV. 36 24,572,737.14 175,590,150.16
Sub-Total of Cash Inflow from Operating Activities 24,572,737.14 188,095,350.16
Cash paid for purchasing goods and receiving labor
12,355,200.00
services
Cash paid to employee and for employee 10,014,435.27 7,324,417.07
Tax payments 28,508,145.12 20,099,942.52
Other cash payments related to business activities XV. 36 100,011,431.48 166,429,789.70
Sub-Total of Cash Outflows from Operating Activities 138,534,011.87 206,209,349.29
Net Amount of Cash Flow Generated During the
-113,961,274.73 -18,113,999.13
Operating Activities
II Cash Flow Generated During the Investment Activities:
Cash received from recouping the capital outlay 10,000,000.00 573,000,000.00
Cash received from the returns on investments
Net cash received from the disposal of fixed assets,
35,000,000.00 3,060,360.00
intangible assets and other long term assets recovery
Other cash received relating to investing activities XV. 36 49,136.10
Sub-Total of Cash Inflow from Investment Activities 45,049,136.10 576,060,360.00
Cash paid for the construction of fixed assets,
31,189.00
intangible assets and other long term assets
Cash paid for investment 366,447,600.00 46,409,933.33
Other cash paid relating to investment activities
Sub-Total of Cash Outflows from Investment Activities 366,447,600.00 46,441,122.33
Net Amount of Cash Flow Generated During the
-321,398,463.90 529,619,237.67
Investment Activities
III Cash Flow Generated During the Financial
Activities:
Cash received by absorbing investment 386,874,898.56
Cash received from obtaining the loans 110,000,000.00 248,315,780.73
Cash received from the issuance of bonds
Other cash received relating to the financial activities
Sub-Total of Cash Inflows from Financial Activities 496,874,898.56 248,315,780.73
Cash paid for the repayments of debts 76,469,598.52 714,932,856.00
Cash paid for the distribution of dividends, profits, or
1,659,125.50 10,827,232.97
cash payments for interests
Other cash paid relating to the financial activities XV. 36 1,979,044.96 587,864.64
Sub-Total of Cash Outflows from Financial Activities 80,107,768.98 726,347,953.61
Net Amount of Cash Flow Generated During the
416,767,129.58 -478,032,172.88
Financial Activities
IV Effect of Exchange Rate Movement on Cash and
Cash Equivalents
V Net Additional Amount of Cash and Cash Equivalents -18,592,609.05 33,473,065.66
Plus: the balance of cash and cash equivalents in the
33,952,786.37 479,720.71
beginning of the period
VI Balance of Cash and Cash Equivalents in the End of
15,360,177.32 33,952,786.37
the Period
Legal Representative：Wang Guofeng; Director in charge of the accountancy：Guan Ying; Director of the Accounting：Liu Quanli
Statement of Changes in Stockholder's Equity
In 2017
Preparation Unit: Hainan Jingliang Holdings Co., Ltd. Monetary Unit: RMB
Amount of Current Period
Other Equity Instruments Minus: Other
Items Special Earned Undistributed Total Stockholder's
Capital Stock Preferred Perpetual Capital Surplus Treasury Comprehensiv
Others Reserves Surplus Profit Equity
Shares Capital Securities Stock e Incomes
I Balance at the End of Last Year 426,745,404.00 546,201,098.01 109,487,064.39 -1,024,796,255.19 57,637,311.21
Plus: changes in accounting policies
Prior period errors correction
Others
II Balance at the Beginning of this Year 426,745,404.00 546,201,098.01 109,487,064.39 -1,024,796,255.19 57,637,311.21
III Amount of Changes in Increase and Decrease of this Period
(the decrease shall be filled in with \"-\") 259,044,960.00 1,627,186,370.70 49,609,705.74 1,935,841,036.44
i Total Comprehensive Income 49,609,705.74 49,609,705.74
ii Shareholder Investment and Capital
259,044,960.00 1,627,186,370.70 1,886,231,330.70
Reduction
1. The common stock invested by the shareholders 259,044,960.00 1,496,058,401.52 1,755,103,361.52
2. The assets invested by other equity instrument holders
3. The amount of share-based payment that included in the
stockholder's equity
4. Others 131,127,969.18 131,127,969.18
iii Distribution of Profits
1. Withdraw surplus reserves
2. Withdraw general risk preparation
3. Distribution to shareholders
4. Others
iv Internal Transfer of Shareholders' Equity
1. Capital reserves are transferred to paid-in
capital (or capital stock)
2. Surplus reserves are transferred to paid-in
capital (or capital stock)
3. Surplus reserves cover losses
4. Others
V Special Reserves
1. Withdrawal of current period
2、Usage of current period
VI Others
IV Balance at the End of this Year 685,790,364.00 2,173,387,468.71 109,487,064.39 -975,186,549.45 1,993,478,347.65
Legal Representative：Wang Guofeng; Director in charge of the accountancy：Guan Ying; Director of the Accounting：Liu Quanli
Statement of Changes in Stockholder's Equity (Continued)
In 2017
Preparation Unit: Hainan Jingliang Holdings Co., Ltd. Monetary Unit: RMB
Amount of Last Period
Other Equity Instruments
Items Minus: Other
Perpetual Special Earned Undistributed Total Stockholder's
Capital Stock Preferred Capital Surplus Treasury Comprehensi
Capital Others Reserves Surplus Profit Equity
Shares Stock ve Incomes
Securities
I Balance at the End of Last Year 426,745,404.00 546,201,098.01 109,487,064.39 -648,479,829.56 433,953,736.84
Plus: changes in accounting policies
Prior period errors correction
Others
II Balance at the Beginning of this Year 426,745,404.00 546,201,098.01 109,487,064.39 -648,479,829.56 433,953,736.84
III Amount of Changes in Increase and Decrease of this
-376,316,425.63 -376,316,425.63
Period (the decrease shall be filled in with \"-\")
i Total Comprehensive Income -376,316,425.63 -376,316,425.63
ii Shareholder Investment and Capital Reduction
1. The common stock invested by the shareholders
2. The assets invested by other equity instrument
holders
3. The amount of share-based payment that
included in the stockholder's equity
4. Others
iii Distribution of Profits
1. Withdraw surplus reserves
2. Withdraw general risk preparation
3. Distribution to shareholders
4. Others
iv Internal Transfer of Shareholders' Equity
1. Capital reserves are transferred to paid-in capital (or
capital stock)
2. Surplus reserves are transferred to paid-in capital (or
capital stock)
3. Surplus reserves cover losses
4. Others
V Special Reserves
1. Withdrawal of current period
2、Usage of current period
VI Others
IV Balance at the End of this Year 426,745,404.00 546,201,098.01 109,487,064.39 -1,024,796,255.19 57,637,311.21
Legal Representative：Wang Guofeng; Director in charge of the accountancy：Guan Ying; Director of the Accounting：Liu Quanli
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Hainan Jingliang Holdings Co., Ltd.
Notes to 2017 Financial Statements
(Unless otherwise specified, the unit of amount is CNY)
I. Basic Situation of the Company
(I) Place of Registration, Organizational Form and Headquarters Address
Hainan Jingliang Holdings Co., Ltd. (hereinafter referred to as \"the Company\" or \"Jingliang Holdings\") is a
company limited by shares re-incorporated from Hainan Pearl River Industrial Development Holdings Co., Ltd. on
January 11, 1992 approved by Hainan Provincial People's Government Office (1992) No. 1 Letter and People's
Bank of China Hainan Branch (1992) No. 6 Document. When re-incorporated, the Company issued a total of
81,880,000 shares, including 60,793,600 shares converted from the original company's net assets and 21,086,400
newly-issued shares, and the company name was Hainan Pearl River Industrial Development Holdings Co., Ltd.
The business license registration number of the Company was 20128455-6, and the parent company Guangzhou
Pearl River Industrial Development Holdings Co., Ltd. held 36,393,600 shares, accounting for 44.45%. Approved
by the People's Bank of China Securities Regulatory Office (1992) No. 83 Document, 21,086,400 additional shares
were listed for trading on the Shenzhen Stock Exchange in December 1992. The industry involved is real estate.
On March 25, 1993, Hainan Shareholding System Experiment Leading Group Office No. 028 Letter and People's
Bank of China Shenzhen Special Economic Zone Branch (1993) No. 099 Reply, the Company increased its
original share capital to 139,196,000 shares by allotting 5 shares and donating 2 shares per 10 shares. At the end of
1993, the controlling shareholder Guangzhou Pearl River Industrial Development Holdings Co., Ltd. held
48,969,120 shares, accounting for 35.18%.
In 1994, it increased its original share capital to 278,392,000 shares by allotting 10 shares per 10 shares. The
controlling shareholder Guangzhou Pearl River Industrial Development Holdings Co., Ltd. held 97,938,240 shares,
accounting for 35.18%.
In 1995, approved by Shenzhen Securities Office (1995) No. 45 and (1995) No. 12 Documents, 50,000,000 B
shares was issued. After the issuance of B shares, it increased its share capital to 377,650,800 shares by allotting
1.5 shares per 10 shares. The parent company Guangzhou Pearl River Industrial Development Holdings Co., Ltd.
held 112,628,976 shares, accounting for 29.82%.
In 1999, Guangzhou Pearl River Industrial Development Holdings Co., Ltd. transferred 112,628,976 shares to
Beijing Wanfa Real Estate Development Co., Ltd. After the equity transfer was completed in June 1999, Beijing
Wanfa Real Estate Development Co., Ltd. held 112,628,976 shares in the Company, accounting for 29.82% of the
total number of shares in the Company and making it become the controlling shareholder of the Company.
On January 10, 2000, the Company's name was changed to Hainan Pearl River Holdings Co., Ltd., and Industrial
and Commercial Administration Bureau of Hainan Province replaced the Business License for Legal Person.
On August 17, 2006, the Company implemented the split-share reform plan. The Company increased a total of
49,094,604 shares to all shareholders by donating 1.3 shares per 10 shares. The original holders of non-tradable
shares transferred the increased shares to the holders of tradable A shares. Beijing Wanfa Real Estate Development
Co., Ltd. paid a price to the holders of non-tradable shares who did not express their opinions clearly for such
shares. The total share capital was increased to 426,745,404 shares. The original controlling shareholder Beijing
Wanfa Real Estate Development Co., Ltd. held 107,993,698 shares, accounting for 25.31%. In 2007, the holders of
non-tradable shares repaid a price for 3,289,780 non-tradable shares. In 2009, the holders of non-tradable shares
repaid a price for 1,196,000 non-tradable shares.
On September 2, 2016, the original controlling shareholder Beijing Wanfa Real Estate Development Co., Ltd.
transferred its 112,479,478 shares to Beijing Grain Group Co., Ltd. (hereinafter referred to as “BGG”). After the
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
equity transfer was completed in September 2016, Beijing Grain Group Co., Ltd. held 112,479,478 shares in the
Company, accounting for 26.36% of the total number of shares. In November 2016, Beijing Grain Group Co., Ltd.
decided to increase its shareholding to 123,561,963 shares through concentrated bidding in the secondary market
based on its confidence in the major assets reorganization targets and the Company's future development,
accounting for 28.95% of the total number of shares and making it become the largest shareholder of the Company.
The Company determined that July 31, 2017 was the delivery date of major assets according to the major assets
reorganization plan and the delivery agreement. On September 14, 2017, pursuant to the resolution of the
Company's second extraordinary general meeting of shareholders held on November 18, 2016 and the approval of
(2017) No. 1391 Reply on the Issuance of Shares Made by Hainan Pearl River Holdings Co., Ltd. to Beijing Grain
Group Co., Ltd., etc. for Purchase of Assets and Raising of Supporting Funds issued by the China Securities
Regulatory Commission on July 28, 2017: 1) The Company issued 210,079,552 shares to the original shareholders
of Beijing Jingliang Food Co., Ltd. (hereinafter referred to as \"Jingliang Food\") for purchase of assets on the basis
of transaction price difference between assets proposed to be placed in and out (the transaction price difference is
169,954.36 Yuan). The nominal value per share was CNY 1.00 and the issue price was CNY 8.09 per share. 2) The
Company's private placement of additional 48,965,408 shares to BGG was the supporting funds raised from the
purchase of assets through issuance of shares. The nominal value per share issued by the Company was CNY 1.00
and the issue price was CNY 8.82 per share. After this issuance, the registered capital was CNY 685,790,364.00
and the share capital was CNY 685,790,364.00, accounting for 42.06% of the total number of shares and making it
became the Company's largest shareholder. Shareholder BGG subscribed its shares with monetary funds.
On March 10, 2018, the Company completed the procedures for business registration of changes such as company
name, legal representative, registered capital and business scope, and obtained the Business License for Legal
Person approved and replaced by the Industrial and Commercial Administration Bureau of Hainan Province. The
relevant information after changes is listed as follows:
Company Name: Hainan Jingliang Holdings Co., Ltd.
Unified Social Credit Code: 914600002012845568
Company Type: Company Limited by Shares (listed, state-controlled)
Registered Address: Floor 29, Dihao Building, Zhujiang Plaza, Binhai Avenue, Haikou City, China
Office Address: Floor 29, Dihao Building, Zhujiang Plaza, Binhai Avenue, Haikou City, China
Legal Representative: Wang Guofeng
Registered Capital: CNY 685,790,364
Date of Establishment: March 22, 1988
Business Period: from March 22, 1988 to September 20, 2025
The parent company is Beijing Grain Group Co., Ltd.
(II) Company's Business Nature and Major Business Activities
1. Business Scope
The industry where the Company is involved is manufacturing-agricultural and sideline food processing industry.
Its business scope mainly includes: production and sales of food, beverages, oils and fats, oil plants and their
by-products, vegetable protein and its products, organic fertilizers, microbial fertilizers, and agricultural fertilizers;
land consolidation, soil rehabilitation; comprehensive agricultural development, animal husbandry and aquaculture,
production and sales of agricultural equipment; computer network technology, investment in communications
projects, research and development and application of high-tech products; investment and consulting of
environmental protection projects; animation, graphic design, goods and technology import and export trade; lease
of self-owned houses. (The general business items may be managed independently, and the licensed business items
shall be managed with the relevant permits or approval documents) (The projects requiring legal approval shall be
subject to the approval by the relevant department before the business activities are carried out).
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
2. Business Nature and Major Business Activities
The company and its subsidiaries are mainly engaged in the processing, production and sales of food, agricultural
and sideline products and snack food.
3. Basic Organizational Structure
Company's basic organizational structure: The General Meeting of Shareholders is the Company's highest authority,
the Board of Directors is the executive body of the General Meeting of Shareholders, the Board of Supervisors is
the Company's internal supervisory body, and the General Manager is responsible for the Company's daily
operations and management. The company has Board of Directors Office, Board of Supervisors Office,
Comprehensive Affairs Department, Securities Affairs Department, Strategic Investment Department, Finance
Department (Settlement Center), Internal Risk Control Department, Human Resources Department, Party Affairs
Department and Discipline Inspection & Supervision Department.
On May 6, 2010, Hainan Pearl River Holdings Co., Ltd. Beijing Investment Advisory Branch was established, and
its unified social credit code was 91110107554875351W. Address: Room 5078, Building 3, No. 3, Xijing Road,
Badachu Hi-Tech Park, Shijingshan District, Beijing. Its business scope includes investment consulting, hotel
investment and management; procurement and leasing of construction equipment; sales of building materials,
hardware and electrical equipment, furniture, plastics, daily necessities, leather products, rubber products, feed,
packaged seeds requiring no repacking, grains, beans, potatoes, flowers, grass and ornamental plants, fertilizers,
non-metallic ores, metal products, metallic ores and metal materials; import and export of goods; research and
development and application of high-tech products. (“1. No funds can be publicly raised without the approval of
the relevant department; 2. No trading activities in securities products and financial derivatives can be publicly
conducted; 3. No loans can be granted; 4. No guarantees can be provided for other companies than the invested
company; 5. The investor shall not be promised that the investment principal will not be lost or the minimum
income; The projects requiring legal approval shall be subject to the approval by the relevant department before
the business activities are carried out.)
On October 22, 2012, Hainan Pearl River Holdings Co., Ltd. Heilongjiang Branch was established, and its unified
social credit code was 91230110598492651P. Address: No. 34, Nongxiao Street, Xiangfang District, Harbin City.
Business scope: industrial investment, hotel investment and management, procurement and leasing of construction
equipment, indoor and outdoor decoration, high-tech project investment, computer network investment, investment
in communications projects, development and application of high-tech products and investment in environmental
protection projects. (The projects requiring administrative licensing and approval shall be operated with relevant
permits) (The projects requiring legal approval shall be subject to the approval by the relevant department before
the business activities are carried out). On December 9, 2017, in order to optimize capital structure, reduce cost of
operation and management, and improve management efficiency, the Company reviewed and passed the Proposal
on Cancellation of Hainan Pearl River Holdings Co., Ltd. Heilongjiang Branch at the 22nd meeting of its 8th
Board of Directors to agree to cancel its Heilongjiang Branch and authorize its management to handle related
cancellation procedures. As of the issuance date of the audit report, the Company has not completed related
procedures for business cancellation of Heilongjiang Branch.
(III) Approval and Issuance of Financial Reports
This financial statement was approved and issued by the Board of Directors of the Company on April 11, 2018.
(IV) Scope of Consolidated Financial Statements
A total of 18 subsidiaries were included in the consolidation scope of the Company in 2017. For details, see VIII
Equity in Other Entities in the Notes. From the previous period, additional 18 subsidiaries are included into and 16
original subsidiaries are excluded from the consolidation scope of the Company in the current period. For details,
see VII Changes in the Consolidation Scope in the Notes.
Due to the implementation of asset reorganization, the Company's consolidation scope in the current period has
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
undergone major changes. The placed-in assets should be accounted according to the business combination under
the same control, and the statements for the same period of the previous year have been adjusted retrospectively
under the same control. The equity belonging to the placed-out assets should no longer be included in the
consolidation scope on the delivery date (disposal date), and the opening balance of the balance sheet should not
be adjusted.
II. Preparation Basis of Financial Statements
1. Preparation Basis
The Company's financial statements should be prepared based on the going-concern assumption and actual
occurrence of transactions and events in accordance with the Accounting Standards for Business Enterprises and
their application guide and interpretation as well as other relevant regulations promulgated by the Ministry of
Finance (collectively referred to as Accounting Standards for Business Enterprises). In addition, the Company also
discloses relevant financial information in accordance with the Rules for Disclosure, Preparation and Presentation
of Information by Companies That Offer Securities Publicly No. 15 - General Provisions on Financial Reports
(revised in 2014) issued by the China Securities Regulatory Commission.
According to the relevant provisions of the Accounting Standards for Business Enterprises the Company’s
accounting is based on the accrual basis. Except for certain financial instruments, these financial statements are
based on historical costs. Non-current assets held for sale should be valued based on the lower between the fair
value less estimated expenses and the original book value when they meet the conditions for holding for sale. If the
assets are impaired, corresponding provisions for impairment shall be made according to relevant regulations.
2. Going Concern
The financial statements are presented on a going-concern basis, and the Company has the going-concern
capability for at least 12 months from the end of the report period.
III. Statement of Compliance with the Accounting Standards for Business Enterprises
The financial statement prepared by the Company complies with the requirements of the Accounting Standards for
Business Enterprises, and reflect the Company's consolidation and the parent company's financial position as of
December 31, 2017, the Company's consolidation and the parent company's operating results, consolidation and
cash flow in 2017 and other relevant information truly and completely.
IV. Important Accounting Policies and Accounting Estimates
1. Accounting Periods
The Company's accounting periods are divided into annual accounting periods and interim accounting periods. An
interim accounting period is a report period shorter than a complete fiscal year. The Company's fiscal year shall
adopt the calendar year, that is, from January 1 to December 31 every year.
2. Business Cycle
The Company uses 12 months as a business cycle and as a standard for the liquidity categorization of assets and
liabilities.
3. Bookkeeping Base Currency
The Company uses Renminbi as the bookkeeping base currency.
The Company's overseas subsidiary, BGG (Singapore) International Trading Co., Ltd. determines the United States
dollar as its bookkeeping base currency according to the currency used in the main economic environment where it
operates.
4. Accounting Treatment Methods for Business Combination under the Same Control and Not Under the
Same Control
Business combination refers to a transaction or event in which two or more separate companies are combined to
form a single reporting entity. Business combination are divided into ones under the same control and ones not
under the same control.
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
(1) Business combination under the same control
A business combination under the same control means that the participating companies are ultimately controlled by
the same party or parties before and after the business combination and such control is not temporary. In a business
combination under the same control, the party that obtains control over other participating companies on the
combining date is the combining party, and the other participating companies are the combined parties. The
combining date refers to the date on which the combining party obtains control over the combined party actually.
Assets and liabilities acquired by the combining party shall be measured at the book value of the combining party
in the combined party on the combining date. The difference in book value between the net assets obtained by the
combining party and the consideration paid for combination (or the total par value of issued shares shall be
adjusted into the capital reserve (share premium); if the capital reserve (share premium) is insufficient to offset it,
it shall be adjusted into the retained earnings.
The direct expenses incurred by the combining party for business combination shall be recorded into the current
profit and loss as incurred.
(2) Business combination not under the same control
A business combination not under the same control means that the participating companies are not controlled by
the same party or parties before and after the business combination. In a business combination not under the same
control, the party that obtains control over other participating companies on the purchasing date is the purchasing
party, and the other participating companies are the purchased parties. The purchasing date refers to the date on
which the purchasing party obtains control over the purchased party actually.
For a business combination not under the same control, the combination cost includes the assets paid by the
purchasing party on the purchasing date to obtain control over the purchased party, the liabilities incurred or
undertaken and the fair value of issued equity securities, intermediary fees incurred by the business combination
for auditing, legal services, assessment and consulting as well as other administrative expenses are recorded into
the current profit and loss as incurred. The transaction cost of equity securities or debt securities issued by the
purchasing party as a consideration for combination is recorded into the initial recognition cost of equity securities
or debt securities. The contingent consideration involved is included into the combination cost based on its fair
value at the purchasing date. If the contingent consideration needs to be adjusted in case of any new or further
evidence of existing circumstances on the purchasing date within 12 months after the purchasing date, the
consolidated goodwill shall be adjusted accordingly. The combination cost incurred and the net identifiable assets
obtained by the purchasing party in the combination shall be measured at the fair value at the purchasing date. The
excess of the combination cost over the fair value of net identifiable assets obtained by the purchased party on the
purchasing date shall be recognized as goodwill. If the combination cost is less than the fair value of net
identifiable assets obtained by the purchasing party in the combination, the fair value of net identifiable assets,
liabilities and contingent liabilities obtained by the purchasing party and the combination cost shall be reviewed
first. If the combination cost is still less than the fair value of net identifiable assets obtained by the purchasing
party in the combination, the difference shall be recorded into the current profit and loss.
If any deductible temporary differences obtained by the purchasing party from the purchased party are not
recognized because they do not meet the conditions for recognition of deferred income tax assets on the purchase
date and if any new or further information indicating that the relevant circumstances as of the purchasing date have
already existed is obtained within 12 months after the purchasing date and it is expected that the economic benefits
brought by such deductible temporary differences can be achieved, they shall be recognized as relevant deferred
income tax assets, and the goodwill shall also be reduced. If the goodwill is insufficient to offset, the differences
shall be recognized as the current profit and loss; except for the above circumstances, the recognized deferred
income tax assets related to the business combination shall be recorded into the current profit and loss.
For a business combination not under the same control achieved through step-by-step implementation of multiple
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
transactions, these multiple transactions shall be determined for a “package deal” according to the Notice of the
Ministry of Finance on Issuing No. 5 Interpretations on Accounting Standards for Business Enterprises ([2012] No.
19) and the judgment standards for \"package deal\" in Article 51 of the Accounting Standards for Business
Enterprises No. 33 - Consolidated Financial Statements (see IV, 5 (2) in the Notes). In case of a \"package deal\", its
accounting treatment shall be made according to the descriptions in the preceding paragraphs of this section and IV,
13 Long-term Equity Investment. If it is not a \"package deal\", related accounting treatment shall be made based on
the distinction between individual financial statements and consolidated financial statements:
In the individual financial statements, the sum of book value of the equity investment held in the purchased party
prior to the purchasing date and new investment cost on the purchasing date shall be taken as the initial cost of
such investment; where the equity investment held in the purchased party prior to the purchasing date involves
other comprehensive income, the other comprehensive income related to the disposal of such investment shall be
accounted on the same basis as that of direct disposal of relevant assets or liabilities by the purchased party (that is,
except for the corresponding changes accounted by the equity method and resulting from re-measurement of net
liabilities or net assets for defined benefit plans by the purchased party, the remainder shall be transferred into the
current investment income).
In the consolidated financial statements, the equity investment held in the purchased party prior to the purchasing
date shall be re-measured at the fair value of such equity on the purchasing date, and the difference between its fair
value and its book value shall be recorded into the current investment income; where the equity investment held in
the purchased party prior to the purchasing date involves other comprehensive income, the other comprehensive
income related to the disposal of such investment shall be accounted on the same basis as that of direct disposal of
relevant assets or liabilities by the purchased party (that is, except for the corresponding changes accounted by the
equity method and resulting from re-measurement of net liabilities or net assets for defined benefit plans by the
purchased party, the remainder shall be transferred into the current investment income).
5. Preparation Basis of Consolidated Financial Statements
(1) Principle of determining the scope of consolidated financial statements
The scope of consolidated financial statements is determined on the basis of control. Control means that the
Company has the power over the investee, gets variable return by participating in related activities of the investee
and has the ability to influence the amount of the return by its power over the investee. The scope of consolidation
includes the Company and all its subsidiaries. Subsidiaries are those entities controlled by the Company.
The Company will conduct a reassessment once the changes in relevant facts and circumstances have caused
changes in the relevant factors involved in the above definition of control.
(2) Preparation methods of consolidated financial statements
From the date of obtaining actual control of net assets and production and business decisions of its subsidiary, the
Company begins to include this subsidiary in the scope of consolidation; and the Company ceases to include it in
the scope of consolidation from the date of loss of actual control. For subsidiaries disposed, the operating results
and cash flows before the disposal date have been appropriately included into the consolidated income statement
and the consolidated cash flow statement; for subsidiaries disposed during the current period, the opening balance
of the consolidated balance sheet is not be adjusted. For subsidiaries added by business combination not under the
same control, the operating results and cash flows after the purchasing date have been appropriately included into
the consolidated income statement and the consolidated cash flow statement, while the opening balance and
comparison of the consolidated balance sheet is not be adjusted. For subsidiaries added by business combination
under the same control, the operating results and cash flows from the beginning of the current period to the
combining date have been appropriately included into the consolidated income statement and the consolidated cash
flow statement, while the comparison of the consolidated balance sheet is adjusted.
If the accounting policies or accounting periods adopted by the subsidiaries are inconsistent with those adopted by
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
the Company when preparing the consolidated financial statements, necessary adjustments shall be made to the
financial statements of the subsidiaries in accordance with the Company's accounting policies and accounting
periods. For subsidiaries acquired by business combination not under the same control, their financial statements
are adjusted based on the fair value of net identifiable assets on the purchasing date.
All significant balances, transactions and unrealized profits within the Company shall be offset when the
consolidated financial statements are prepared.
The subsidiary's shareholders' equity and current net profit and loss not owned by the Company shall be separately
presented as Minority Equity and Minority Interest Income under shareholders' equity and net profit items in the
consolidated financial statements. The minority equity in the current net profit and loss of the subsidiary shall be
presented as Minority Equity under the net profit item in the consolidated income statement. If the subsidiary’s
loss shared by minority shareholders exceeds its initial shareholders’ equity shared by minority shareholders, the
minority equity shall still be offset.
When the control over the original subsidiary is lost due to the disposal of part of the equity investment or other
reasons, the remaining equity shall be re-measured based on its fair value on the date of loss of control. The
difference between the sum of consideration obtained by disposal of the equity and fair value of the remaining
equity and the original subsidiary's net assets that would have been calculated at the original shareholding ratio
from the purchasing date shall be included into the investment income for the current period of loss of control.
Other comprehensive income related to the original subsidiary's equity investment shall be accounted on the same
basis as that of direct disposal of relevant assets or liabilities by the purchased party as of the date of loss of control
(that is, except for the changes resulting from re-measurement of net liabilities or net assets for defined benefit
plans by the original subsidiary the remainder shall be transferred into the current investment income).
Subsequently, the remaining equity shall be measured in accordance with relevant regulations such as Accounting
Standards for Business Enterprises No. 2 - Long-term Equity Investment and Accounting Standards for Enterprises
No. 22 - Recognition and Measurement of Financial Instruments, and for more details, see IV, 13 Long-term
Equity Investment or IV, 9 Financial Instruments in the Notes.
If the Company disposes the equity investment in a subsidiary through multiple transactions until it loses control, it
needs to distinguish whether all these transactions through which the Company disposes the equity investment in
the subsidiary until it loses control belong to a package deal. Where the terms, conditions and economic impact of
all transactions for disposal of the equity investment in the subsidiary are consistent with one or more of the
following circumstances, it usually indicates that all these transactions should be accounted as a package deal: ①
These transactions are established at the same time or in consideration of mutual influence; ② These transactions
can achieve a complete business outcome as a whole ; ③ The occurrence of a transaction depends on the
occurrence of at least one other transaction; ④ A transaction alone is not economical, but when other transactions
are considered together, it is economical. If these transactions do not belong to a package deal, each of them should
be accounted, as the case may be, based on the applicable principles of Partial Disposal of Long-Term Equity
Investment in the Subsidiary without Loss of Control (for details, see IV, 13, (2) ④ in the Notes) and Loss of
Control over the Original Subsidiary Due To Partial Disposal of Equity Investment or Other Reasons (see the
previous paragraph). If all these transactions through which the Company disposes the equity investment in the
subsidiary until it loses control belong to a package deal, they shall be accounted as a deal for disposal of the
equity investment in the subsidiary until the loss of control; however, the difference in share of the net assets of the
subsidiary corresponding to each disposal of investment and each disposal of consideration before the loss of
control shall be recognized as other comprehensive income in the consolidated financial statements, and shall be
transferred into the current profit and loss on the date of loss of control.
6. Classification of Joint Arrangements and Accounting Methods for Joint Operations
Joint Arrangement refers to an arrangement that is jointly controlled by two or more parties. The Company
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
classifies joint arrangements into joint operations and joint ventures based on the rights and commitments it has
enjoyed in joint arrangements. Joint Operation refers to a joint arrangement where the Company enjoys its relevant
assets and bears its relevant liabilities. Joint Venture refers to a joint arrangement where the Company only enjoys
rights to its relevant net assets.
The Company’s investment in joint ventures shall be accounted by the equity method, and shall be treated for
accounting in accordance with the accounting policies described in IV, 13(2) ② Long-term Equity Investment
Accounted by the Equity Method in the Notes.
As a party to joint operations, the Company shall confirm the assets and liabilities that it holds or assumes alone,
assets and liabilities that that it holds or assumes jointly according to its share, income generated from sales of the
joint operating products that it shares, revenue generated from sales of the joint operations according to its share,
expenses incurred by it alone and expenses incurred in the joint operations based on its share.
When the Company, as a party to joint operations, invests or sells assets (these assets does not constitute a business,
the same below) to, or purchase assets from a joint operation, the Company shall only confirm the portion of profit
and loss arising from this transaction that belongs to other parties to such joint operation before such assets are
sold to a third party. If such assets meet the assets impairment loss stipulated in the Accounting Standards for
Business Enterprises No. 8 - Asset Impairment, etc., where the Company invests or sell assets to a joint operation,
it shall fully confirm the loss; where the Company purchases assets from a joint operation, it shall confirm the loss
according to its share.
7. Determination Standards for Cash and Cash Equivalents
The Company's cash and cash equivalents include cash on hand, deposits that can be used for payment at any time
and short-term (usually due within three months from the purchase date) 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.
8. Translation of Foreign Currency Transactions and Foreign Currency Statements
(1) Translation methods for foreign currency transactions
Any of the Company's foreign currency transaction shall be translated into its bookkeeping base currency at the
time of initial recognition at the spot exchange rate on the transaction date. However, any foreign currency
exchange business or any transaction involving foreign currency exchange of the Company shall be translated into
its bookkeeping base currency at the actual exchange rate.
(2) Translation methods for foreign currency monetary items and foreign currency non-monetary items
At the balance sheet date, foreign currency monetary items shall be translated at the spot exchange rate on the
balance sheet date. All resulting exchange differences, with an exception that the exchange differences arising from
specific foreign currency borrowings related to the purchase and construction of assets that meet the conditions for
capitalization are treated based on the principle of capitalization of borrowing costs and that the exchange
differences arising from changes in book balances other than amortized costs for available-for-sale foreign
currency monetary items are included in other comprehensive income, shall be recorded into the current profit and
loss.
Non-monetary foreign currency items measured at historical cost shall be still measured at the bookkeeping base
currency amount translated at the spot exchange rate on the transaction date. Non-monetary foreign currency items
measured at fair value shall be translated at the spot exchange rate on the date when the fair value is determined.
The difference between the translated bookkeeping base currency amount and the original bookkeeping base
currency amount shall be treated as fair value changes (including changes in exchange rate) and recorded into the
current profit and loss or recognized as other comprehensive income.
(3) Translation methods of foreign currency financial statements
In the preparation of consolidated financial statements involving foreign operations, if any foreign currency
monetary item constitutes a net investment in foreign operations in essence, the currency translation difference
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
arising from changes in exchange rate shall be recognized into other comprehensive income as “difference on
translation of foreign currency financial statements”, and shall be recorded into the current profit and loss at the
time of disposal of foreign operations.
The foreign currency financial statements of foreign operations shall be translated into RMB ones by the following
methods: asset and liability items in the balance sheet shall be translated at the spot exchange rate on the balance
sheet date; except for “undistributed profits” in the owner’s equity items, other items shall be translated at the spot
exchange rate at the time of occurrence; Income and expense items in the income statement shall be translated
based on the transaction date. The undistributed profits at the beginning of the year are the translated undistributed
profit at the end of the previous year; the undistributed profits at the end of the year are calculated and presented
item by item according to the distribution of translated profits; the difference between the asset items and the sum
of liabilities items and shareholders' equity items after translation shall be recognized into the other comprehensive
income as difference on translation of foreign currency financial statements. When foreign operations are disposed
and the control over them is lost, the differences on translation of foreign currency financial statements related to
the foreign operations that are presented under the shareholders' equity items in the balance sheet shall be
transferred into the current profit and loss, either in whole or in proportion to the disposal of such foreign
operations.
Foreign currency cash flows and cash flows of overseas subsidiaries shall be translated at the current average
exchange rate on the date of occurrence of cash flows. The impact of changes in exchange rate on cash shall be
treated as a reconciling item and presented separately in the cash flow statement.
The opening balance and actual amount in the previous period shall be presented at the translated amount of
financial statements for the previous period.
When the control over foreign operations is lost due to disposal of the entire owner’s equity of the Company in
foreign operations, disposal of part of the equity investment or other reasons, the differences on translation of
foreign currency financial statements related to the foreign operations that are presented under the shareholders'
equity items in the balance sheet and assigned to the parent company shall be transferred into the current profit and
loss.
When the disposal of part of the equity investment or other reasons result in a reduction in the proportion of the
equity in foreign operations without loss of control over foreign operations, the difference on translation of foreign
currency financial statements related to the disposed foreign operations will be attributed to the minority equity
and will not be transferred into the current profit and loss. When disposing partial equity in overseas operations as
associated enterprises or joint ventures, the differences on translation of foreign currency financial statements
related to the foreign operations shall be transferred into the current profit and loss in proportion to the disposal of
such foreign operations.
9. Financial Instruments
When the Company becomes a party to a financial instrument contract, it recognizes a financial asset or financial
liability. Financial assets and liabilities are measured at fair value at the time of initial recognition. For financial
assets and liabilities that are measured at fair value and whose changes are recorded into the current profit and loss,
relevant transaction costs are directly recorded into the current profit and loss; for other financial assets and
liabilities, relevant transaction costs are recorded in the initial recognition amount.
(1) Determination methods for financial assets and liabilities
Fair value refers to the price that a market participant needs to pay for selling an asset or transferring a liability in
an orderly transaction occurring on the measurement date. The Company measures the fair values of financial
assets and financial liabilities at the prices in major markets. In the absence of major markets, the fair values of
financial assets and financial liabilities are measured at the prices in most favorable markets by using applicable
valuation techniques supported by sufficient available data and other information. Input values used in fair value
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
measurement are divided into three levels, that is, first-level input values are the unadjusted prices quoted in the
active market for the same assets or liabilities that can be obtained on the measurement date; second-level input
values are the directly or indirectly observable ones of the relevant assets or liabilities in addition to first-level
input values; third-level input values are the unobservable ones of the relevant assets or liabilities. The Company
prefers to use the first-level input values, and finally use the third-level input values. The level of a fair value
measurement result is determined by the lowest level of the input value that is of great significance to the overall
fair value measurement.
(2) Classification, recognition and measurement of financial assets
The regular purchase and sale of financial assets shall be recognized for accounting and derecognition on the
transaction date basis. Financial assets are divided into financial assets that are measured at fair value and whose
changes are recorded into the current profit and loss, held-to-maturity investments, loans and receivables and
available-for-sale financial assets.
① Financial assets that are measured at fair value and whose changes are recorded into the current profit and loss
They include trading financial assets and designated financial assets that are measured at fair value and whose
changes are recorded into the current profit and loss.
Trading financial assets refer to those financial assets that meet one of the following conditions: A. the purpose of
obtaining such financial asset is for sale in the short term; B. as part of an identifiable financial instrument
portfolio that is subject to centralized management, and there is objective evidence to prove that the Company has
recently managed the portfolio by using a short-term profit method; C. derivatives excluding those derivatives
designated as effective hedging instruments, derivatives under financial guarantee contracts and derivatives that
are linked to investments in equity instruments that are not quoted in an active market and whose fair value cannot
be reliably measured and must be settled by delivery of these equity instruments.
Only when one of the following conditions is met, financial assets can be designated as financial assets that are
measured at fair value and whose changes are recorded into the current profit and loss at the time of initial
recognition: A. this designation can eliminate or significantly reduce the inconsistencies in the recognition or
measurement of relevant gains or losses due to the different measurement basis for financial assets; B. the formal
written documents on risk management or investment strategies have stated that the portfolio of financial assets or
the portfolio of financial assets and financial liabilities in which the financial assets are located is managed,
evaluated and reported to key management personnel on a fair value basis;
Financial assets that are measured at fair value and whose changes are recorded into the current profit and loss are
subsequently measured at fair value. Gains or losses arising from fair value changes and any dividends and interest
income related to such financial assets shall be recorded into the current profit or loss.
① Financial assets that are measured at fair value and whose changes are recorded into the current profit and loss
They include trading financial assets and designated financial assets that are measured at fair value and whose
changes are recorded into the current profit and loss. All financial assets that are measured at fair value and whose
changes are recorded into the current profit and loss are trading financial assets
Trading financial assets refer to those financial assets that meet one of the following conditions: A. the purpose of
obtaining such financial asset is for sale in the short term; B. as part of an identifiable financial instrument
portfolio that is subject to centralized management, and there is objective evidence to prove that the Company has
recently managed the portfolio by using a short-term profit method; C. derivatives excluding those derivatives
designated as effective hedging instruments, derivatives under financial guarantee contracts and derivatives that
are linked to investments in equity instruments that are not quoted in an active market and whose fair value cannot
be reliably measured and must be settled by delivery of these equity instruments.
Trading financial assets are subsequently measured at fair value. Gains or losses arising from fair value changes
and any dividends and interest income related to such financial assets shall be recorded into the current profit or
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
loss.
② Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets that have fixed maturity dates, fixed or
determinable recovery costs and that the Company has clear intention and ability to hold to maturity.
Held-to-maturity investments are subsequently measured at amortized cost by the effective interest method. Gains
or losses arising from derecognition, impairment and amortization are recorded into the current profit and loss.
Effective interest method refers to the calculation method for the amortized cost and the interest income or
expenses for each period according to the actual interest rate of a financial asset or financial liability (including a
group of financial assets or financial liabilities). Actual interest rate refers to the interest rate used for translation of
future cash flow of a financial asset or financial liability during the expected duration or applicable shorter period
into its current book value.
When calculating the actual interest rate, the Company may estimate the future cash flow on the basis of all
contract terms of a financial asset or financial liability (regardless of future credit losses), in consideration of all
fees, transaction costs and discounts or premiums paid or received by the parties to a financial asset or liability
contract as part of the actual interest rate.
③ Loans and receivables
Loans and receivables refer to non-derivative financial assets that are not quoted in an active market and have
fixed or determinable recovery costs. The financial assets classified by the Company as loans and receivables
include notes receivable, accounts receivable, interest receivable, dividends receivable and other receivables.
Loans and receivables are subsequently measured at amortized cost by the effective interest method. Gains or
losses arising from derecognition, impairment and amortization are recorded into the current profit and loss.
④ Available-for-sale financial assets
Available-for-sale financial assets include non-derivative financial assets designated as available for sale at the
time of initial recognition and other financial assets other than those that are measured at fair value and whose
changes are recorded into the current profit and loss, loans and receivables and held-to-maturity investments.
The final cost of available-for-sale debt instrument investment is determined by the amortized cost method, which
is equal to the amount of the initial recognition amount minus the repaid principal, plus or minus the accumulated
amount formed by amortization of the difference between initial recognition amount and due amount by the
effective interest method, deducting the amount of impairment loss that has occurred. The final cost of an
available-for-sale investment in equity instruments is its initial acquisition cost.
Available-for-sale financial assets are subsequently measured at fair value. Gains or losses arising from fair value
changes, except that impairment losses and currency translation differences of foreign currency monetary financial
assets related to amortized costs shall be recorded into the current profit and loss, are recognized into other
comprehensive income, and then are transferred and recorded into the current profit and loss when these
available-for-sale financial assets are derecognized. However, investments in equity instruments that are not
quoted in an active market and whose fair value cannot be reliably measured and derivative financial assets that
are linked to these equity instruments and must be settled by delivery of these equity instruments are subsequently
measured at cost.
The interest obtained during the period when the available-for-sale financial assets are held and the cash dividends
declared by the investee shall be included into the investment income.
(3) Impairment of financial assets
The Company may check the book values of financial assets other than financial assets that are measured at fair
value and whose changes are recorded into the current profit and loss at each balance sheet date. If there is
objective evidence to prove that these financial assets are impaired, the Company should make provisions for
impairment.
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
The Company conducts separate impairment tests on financial assets of individual significant amount, and
performs impairment tests for financial assets of no individual significant amount separately or in a portfolio of
financial assets with similar credit risk characteristics. Financial assets that have not been impaired shall be
included in the portfolio of financial assets with similar credit risk characteristics for individual impairment tests
whether they have individual significant amounts or not. Financial assets that have been individually recognized
for impairment losses shall not be included in the portfolio of financial assets with similar credit risk
characteristics for impairment tests.
① Impairment of held-to-maturity investments, loans and receivables
The book values of financial assets measured at cost or amortized cost are written down to the present values of
estimated future cash flows. The write-down amount is recognized as impairment loss and included into the
current profit and loss. After the Company recognizes the impairment loss on a financial asset, if there is objective
evidence to prove that the value of such financial asset has been restored and is objectively related to the matters
occurring after the loss is recognized, the previously recognized impairment loss will be reversed. The book value
of such financial asset after the reverse shall not exceed its amortized cost at the reverse date under the assumption
that no provision for impairment is made.
② Impairment of available-for-sale financial assets
When there are comprehensive related factors to prove that the decline in the fair value of an available-for-sale
investment in equity instruments is serious or other-than-temporary, it indicates that such available-for-sale
investment in equity instruments has been impaired. Among them, “serious decline” refers to the cumulative
decline in fair value by over 20%; “other-than-temporary decline” refers to the continuous decline in fair value for
more than 12 months. The basis for determining the period of continuous decline is:
a. Serious financial difficulties occurring to the issuer or the debtor;
b. The debtor violates the terms of the contract, such as default or overdue payment of interest or principal;
c. The creditor makes concessions to the debtor who has financial difficulties due to economic or legal
considerations;
d. The debtor is likely to close down or perform other financial restructuring;
e. Due to the significant financial difficulties of the issuer, the financial assets cannot continue to be traded in an
active market;
f. It is impossible to identify whether the cash flow of an asset in a group of financial assets has been reduced, but
based on an overall assessment of the open data, it is found that the estimated future cash flows of this group of
financial assets have been reduced and measurable since the initial recognition. For examples, the debtor’s ability
to pay for this group of financial assets deteriorates gradually, or the unemployment rate in the country or region
where the debtor is located increases, the price of the collateral in its area drops significantly, and the industry
where it belongs is in recession;
g. There are major adverse changes in the technology, market or legal environment where the issuer of such equity
instrument operates, so that the equity instrument investor may not be able to recover the investment cost;
h. The fair value of such investment in equity instruments has suffered a serious or other-than-temporary decline;
i. Other objective evidence proving that the financial asset has been impaired:
When an available-for-sale financial asset is impaired, the accumulated loss that has been originally recorded into
other comprehensive income due to a decline in fair value shall be transferred and recorded into the current profit
and loss. The accumulated loss transferred is equal to the amount of the initial acquisition cost of such asset
deducting the recovered principal and amortized amount, the current fair value and the impairment loss that had
been included into the profit and loss.
After the Company recognizes an impairment loss, if there is objective evidence to prove that the value of such
financial asset has been restored and is objectively related to the matters occurring after the loss is recognized, the
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
previously recognized impairment loss will be reversed, and the impairment loss of the available-for-sale
investment in equity instruments will be reversed and recognized as other comprehensive income, and the
impairment loss of available-for-sale debt instrument will be reversed and recorded into the current profit and loss.
The impairment losses of investments in equity instruments that are not quoted in an active market and whose fair
value cannot be reliably measured or derivative financial assets that are linked to these equity instruments and
must be settled by delivery of these equity instruments are not reversed.
(4) Recognition basis and measurement methods for transfer of financial assets
A financial asset that meets one of the following conditions is derecognized: ① the contractual right to receive the
cash flow of such financial asset is terminated; ② this financial asset has been transferred, and almost all the risks
and rewards of its ownership are transferred to the transferee; ③ this financial asset has been transferred. Although
the Company neither transfers nor retains almost all the risks and rewards of ownership of this financial asset, it
has given up control of it.
If the Company neither transfers nor retains almost all the risks and rewards of ownership of a financial asset, and
does not give up control of it, it shall recognize the relevant financial asset in accordance with the degree of
continuous involvement in the transferred financial asset, and shall recognize the relevant liability accordingly. The
degree of continuous involvement in the transferred financial asset refers to the level of risk that the Company
faces when the value of such financial asset changes.
If the overall transfer of a financial asset meets the conditions for derecognition, the difference between the book
value of such transferred financial asset and the sum of consideration received due to the transfer and cumulated
amount of fair value changes originally recorded into other comprehensive income shall be recorded into the
current profit and loss.
If the partial transfer of a financial asset meets the conditions for derecognition, the book value of such transferred
financial asset shall be apportioned between its derecognized part and recognized part according to their relative
fair values, and the difference between the sum of consideration received due to the transfer and accumulated
amount of fair value changes that have been originally recorded into other comprehensive income and shall be
apportioned to the derecognized part and the aforesaid book value is recorded into the current profit and loss.
If the Company transfers any financial asset sold with recourse or its own financial asset with endorsement, it must
determine whether almost all the risks and rewards of ownership of such financial asset have been transferred. If
almost all the risks and rewards of ownership of such financial asset has been transferred to the transferee, the
financial asset is derecognized; if all the risks and rewards of ownership of such financial asset are retained, the
financial asset is not derecognized; If all the risks and rewards of ownership of such financial asset are neither
transferred nor retained, it shall continue to determine whether the Company retains control over such asset, and
shall conduct accounting treatment based on the principles described in the preceding paragraphs.
(5) Classification and measurement of financial liabilities
Financial liabilities are divided into financial liabilities that are measured at fair value and whose changes are
recorded into the current profit and loss and other financial liabilities. Financial liabilities are measured at fair
value at the time of initial recognition. For financial liabilities that are measured at fair value and whose changes
are recorded into the current profit and loss, relevant transaction costs are directly recorded into the current profit
and loss; for other financial liabilities, relevant transaction costs are recorded in the initial recognition amount.
① Financial liabilities that are measured at fair value and whose changes are recorded into the current profit and
loss
The classification conditions for trading financial liabilities and those financial liabilities that are designated to be
measured at fair value at initial recognition and whose changes are recorded into the current profit and loss and for
trading financial assets and those financial assets that are designated to be measured at fair value at initial
recognition and whose changes are recorded into the current profit and loss are consistent.
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Financial liabilities that are measured at fair value and whose changes are recorded into the current profit and loss
are subsequently measured at fair value. Gains or losses arising from fair value changes and any dividends and
interest income related to such financial liabilities shall be recorded into the current profit or loss.
② Other financial liabilities
The derivative financial assets that are linked to the investments in equity instruments that are not quoted in an
active market and whose fair value cannot be reliably measured and must be settled by delivery of these equity
instruments are subsequently measured at cost. Other financial liabilities are subsequently measured at amortized
cost by the effective interest method. Gains or losses arising from derecognition or amortization will be recorded
into the current profit and loss.
③ Financial guarantee contracts and loan commitments
Any financial guarantee contract not for a financial liability that is measured at fair value and whose changes are
recorded into the current profit and loss or any commitment not for a loan at an interest rate which is lower than
the market interest rate, that is measured at fair value and whose changes are recorded into the profit and loss, shall
be initially recognized at fair value, and shall be subsequently measured at the higher between the amount
recognized in accordance with the Accounting Standards for Business Enterprises No. 13 Contingencies and the
initial recognition amount deducting the accumulated amortization amount determined in accordance with the
principles of the Accounting Standards for Business Enterprises No. 14 - Revenues.
(6) Derecognition of financial liabilities
If all or part of the current obligations of a financial liability has been relieved, all or part of such financial liability
shall be derecognized. When the Company (the debtor) and its creditor enter into an agreement to replace the
existing financial liabilities with new ones and there are substantial differences in terms between the existing
financial liabilities and new ones, the existing financial liabilities should be derecognized and new ones shall be
recognized at the same time.
If a financial liability is derecognized in whole or in part, 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) should be recorded into the current profit and loss.
(7) Derivatives and embedded derivatives
Derivatives are initially measured at fair value on the date of signing of the relevant contract, and are subsequently
measured at fair value. Except for derivatives that are designated as highly effective hedging instruments and that
any gains or losses arising from their fair value changes are recognized and recorded into the profit and loss
according to the nature of hedging relationship and the requirements of hedge accounting, the fair value changes of
other derivatives are recorded into the current profit and loss
For any hybrid instruments containing embedded derivatives not designed as financial assets or financial liabilities
that are measured at fair value and whose changes are recorded into the current profit and loss, there is no close
relationship between these embedded derivatives and their master contracts in terms of economic characteristics
and risks. Moreover, for separately existing instruments as with embedded derivatives and in accordance with the
definition of derivatives, the embedded derivatives are split from the hybrid instruments and treated as separate
derivative financial instruments. If it is not possible to measure the embedded derivatives separately at the time of
acquisition or on the subsequent balance sheet date, the entire hybrid instrument shall be designated as a financial
asset or financial liability that is measured at its fair value and whose changes are charged to profit or loss for the
current period.
(8) Offset of financial assets and financial liabilities
When the Company has the statutory right to offset a recognized financial asset and a recognized financial liability,
is currently able to implement such statutory right and plans to conduct netting settlement or realization of such
financial asset and liquidation of such financial liability, such financial asset and financial liability shall be
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
presented in the balance sheet at the amount after offset by each other. In addition, financial assets and financial
liabilities shall be separately presented in the balance sheet and not be offset by each other.
(9) Equity instruments
Equity instruments refer to contracts that demonstrate the ownership of the Company's remaining equity in the
assets deducting all liabilities. The Company's issuance (including refinancing), repurchase, sales or cancellation
of an equity instrument shall be treated as changes in equity. The Company does not recognize the fair value
changes of any equity instrument. Transaction costs related to equity transactions are deducted from equity.
The Company conducts various allocations to holders of equity instruments (excluding stock dividends) to reduce
shareholders' equity. The Company does not recognize the amount of fair value changes of any equity instrument.
10. Receivables
The Company regards the following conditions as the confirmation standard for the bad debt losses of receivables:
the cancellation of debtors, bankruptcy, insolvency, inability to pay off debts, serious cash flow shortages, serious
natural disasters, etc., leading to production suspension and failure to pay off debts for a foreseeable time; The
overdue debt-units have not fulfilled their debt-service obligations for over 5 years; other solid evidence shows
that it is unlikely that they will indeed be recoverable or recoverable.
The allowance method is adopted for the possible bad debt losses, and the impairment test is conducted at the end
of the year either by itself or in combination, and provision for bad debts is accrued and recorded in the current
profit and loss. However, receivables (including dividends receivable) between the internal units of the Group,
public maintenance funds and house sale funds deposited in the housing fund management center, deposit deposits
and margin deposits, and backup deposits formed by employee borrowings of the unit, etc. shall not be included
into bad debts. For those receivables with conclusive evidence that they cannot be recovered, they will be written
off as bad-debt losses after being approved by the company according to the prescribed procedures, and the
bad-debt provisions drawn off will be written off.
1. Individual accounts receivable with significant amount and bad debt provision
Receivables with a single amount exceeding 10 million yuan or a single amount
Judgment basis or amount standard of
exceeding 5% of the total amount of the relevant accounts are considered as
single item amount
significant receivables
Severe single amount and withdrawal
Provision for bad debts based on the difference between the present value of its
method for single provision for bad
future cash flow and its book value
debts
2. Bad debt provision accounts receivable by portfolio
Basis to determine the portfolio
The aging of accounts receivable is divided into portfolio
Account aging portfolio
according to credit risk characteristics
Receivables (including dividends receivable) between the ultimate According to relationship with receivables and transaction
controlling party and its subordinate units partners
Depositing public maintenance funds and house sales funds from the According to the nature of receivables
Housing Fund Management Center
Deposit/Margin Portfolio According to the nature of receivables
The loan balance formed by the employee’s borrowing According to the affiliation of the accounts receivable with the
transaction object
Withdrawal method for provision for bad debts by portfolio
Account aging portfolio Aggregate bad debt provision according to account age
analysis
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Receivables (including dividends receivable) between the ultimate
No bad debts
controlling party and its subordinate units
Depositing public maintenance funds and house sales funds from the
No bad debts
Housing Fund Management Center
Deposit/Margin Portfolio No bad debts
The loan balance formed by the employee’s borrowing No bad debts
(1) The proportion of bad debt provisions for accounts receivable using aging analysis method is as
follows:
Account Age Accounts receivable ratio (%) Other receivable ratio (%)
Within the credit period 0
Within 1 year (credit period to 1 year) 2
1-2 years 5
2-3 years 20
3-4 years 50
4-5 years 80
More than 5 years 100
(2) The proportion of bad debt provisions for accounts receivable using other methods:
Portfolio name Bad debt provision ratio (%)
Receivables (including dividends receivable) between the ultimate No bad debts
controlling party and its subordinate units
Depositing public maintenance funds and house sales funds from the No bad debts
Housing Fund Management Center
Deposit/Margin Portfolio No bad debts
The loan balance formed by the employee’s borrowing No bad debts
3. Receivables with insignificant single amounts but with separate provision for bad debts
Reason for single provision for bad Individual accounts with insignificant amounts and provision for bad debts according to
debts portfolio that cannot reflect the risk characteristics of accounts receivable
Provision for bad debts according to the difference between the present value of its future cash
Bad debt preparation method
flow and its book value
4. Return of Bad Debts
If there is objective evidence that the value of the receivable has been recovered and it is objectiv ely related
to the matters that occurred after the loss was confirmed, the previously recognized impairment loss is
reversed and charged to the current profit or loss. However, the book value after the reversal does not exceed
the amortized cost of the receivables on the reversal date assuming no provision for impairment.
11. Inventory
(1) Classification of inventory
Inventories mainly include raw materials, turnover materials, finished products, development costs, inventory
items, materials in transit, etc.
(2) How to obtain and issue inventory
Inventories are valued at the actual cost when acquired; at the time of inventory issuance, the actual cost of issuing
inventory is determined using the weighted average method.
(3)Confirmation of the net realizable value of inventories and withdrawal method for falling prices
The inventory at the end of the period is calculated based on the principle of low cost and net realizable value. For
the reason that the inventory is damaged due to being damaged, wholly or partially obsolete, or the selling price is
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
lower than the cost, etc., the unrecoverable part of the cost is estimated and the inventory depreciation reserve is
withdrawn. The inventory depreciation reserve for the inventories is extracted based on the difference between the
cost of the individual inventory item and its net realizable value.
The net realizable value of the inventories is determined based on the estimated selling price of the inventories
minus the estimated selling expenses and relevant taxes.
After the provision for decline in value of inventories is made, if the influencing factors of the previous
write-down of inventories have disappeared and the net realizable value of inventories is higher than their book
value, they shall be reversed within the amount of provision for falling price of inventories that has been accrued
and the amount transferred back. Including current profit and loss.
(4) The inventory system is a perpetual inventory system.
(5) Amortization method for low-value consumables and packages
Low-value consumables shall be amortized according to one-off amortization method/sub-amortization method
at the time of use; packaging materials shall be amortized according to one amortization method/separate
amortization method at the time of use.
12. Assets Held for Sales
If the company recovers its book value mainly through sale (including non-monetary asset exchange with
commercial substance, the same below) instead of continuing to use a non-current asset or disposal group, it will
be classified as held for sale. The specific criteria are to meet the following conditions at the same time: a
non-current asset or disposal group can be sold immediately under the current conditions based on the practice of
selling such assets or disposal groups in similar transactions; The company has already made a resolution on the
sale plan and obtained a certain purchase commitment; it is expected that the sale will be completed within one
year. Among them, a disposal group refers to a group of assets that are disposed of as a whole through sale or other
means in a transaction, and the liabilities directly related to these assets transferred in the transaction. If the asset
group or combination of asset groups to which the disposal group belongs apportions the goodwill obtained in the
business combination in accordance with the Accounting Standards for Enterprises No. 8 - Asset Impairment, the
disposal group shall include the goodwill allocated to the disposal group.
The initial measurement of the company or re-measurement on the balance sheet date is divided into non-current
assets held for sale and disposal group. If the book value is higher than the fair value minus the net amount after
the sale expense, the book value shall be reduced to the net amount after the fair value less the sale expense. The
amount of write-down is recognized as impairment loss of assets and included in the current profit and loss. At the
same time, provision for impairment of assets held for sale is made. For the disposal group, the recognized
impairment loss of assets first offsets the book value of the goodwill in the disposal group, and then the proportion
is offset against the applicable non-current assets held in the disposal group for the book value of various
non-current assets stipulated in Accounting Standard for Business Enterprises No. 42 – Non-current Assets for
Sales, Disposal Group and Terminal Operation (hereinafter referred to as “the holding of the sales standard”). If
the net value of the fair value of the disposal group held for sale on the balance sheet date is less than the sale price,
the previously written down amount shall be restored. After the assets are classified as held for sale, the amount of
impairment loss of assets confirmed by the non-current assets that meet the measurement criteria for holding the
sales standard shall be reversed. The reversed amount shall be included in the current profit and loss, and shall be
calculated according to the disposal group except for goodwill. The proportion of the book value of various
non-current assets applicable to the measurement and measurement standards of the held-for-sale rule shall be
proportionally increased to its book value. The carrying amount of the goodwill that has been eliminated and the
non-current assets that are subject to the measurement criteria for the holding of the sales standard for sale are not
allowed to be reversed before the assets are recognized as held for sale.
Non-current assets held for sale or non-current assets in the disposal group are not subject to depreciation or
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
amortization. Interest and other expenses of liabilities in the disposal group held for sale continue to be confirmed.
When a non-current asset or disposal group no longer meets the classification criteria for the held-for-sale category,
the company will no longer divide it into the held-for-sale category or remove the non-current assets from the
disposal group that holds the sale for sale. And it is measured by the lower of the following two: (1) The book
value before being classified as held for sale shall be adjusted according to the depreciation, amortization or
impairment that should have been recognized under the assumption that it is not classified as a held-for-sale
category; (2) recoverable amount.
13. Long-term Equity Investment
The long-term equity investment referred to in this part refers to the long-term equity investment that the company
has control, joint control or significant influence on the invested entity. The company's long-term equity
investments that do not have control, joint control, or significant influence over the investee are accounted for as
available-for-sale financial assets or financial assets measured at fair value through profit or loss. The accounting
policies are detailed in the Note IV 9 Financial Instruments.
Joint control means that the company has common control over an arrangement in accordance with relevant
agreements, and related activities of the arrangement must be unanimously agreed by the parties that share the
right of control. Significant influence means that the company has the power to participate in making decisions on
the financial and operating policies of the invested company, but it cannot control or jointly control the formulation
of these policies with other parties.
(1) Determination of investment costs
For the long-term equity investment acquired by the business combination under the same control, the share of the
book value of the equity of the merged party's shareholders in the ultimate controller's consolidated financial
statements at the merger date shall be taken as the initial investment cost of the long-term equity investment. The
difference between the initial investment cost of the long-term equity investment and the cash paid, the non-cash
assets transferred, and the carrying amount of the debt assumed to adjust the capital reserve; If the capital reserve
is insufficient to reduce, the retained earnings shall be adjusted. For the issue of equity securities as the merger
consideration, the share of the book value in the ultimate controller’s consolidated financial statements based on
the equity of the merged party’s shareholders at the merger date is taken as the initial investment cost of the
long-term equity investment. In accordance with the total face value of the shares issued as the share capital, the
difference between the initial investment cost of the long-term equity investment and the total face value of the
shares issued shall be adjusted to the capital reserve. If the capital reserve is insufficient to reduce, the retained
earnings shall be adjusted. Through multiple transactions to obtain the shares of the merged party under the same
control in a step-by-step manner and eventually form a business combination under the same control, whether they
belong to a “package deal” to be dealt with respectively: In the case of a “package deal”, each transaction is treated
as a transaction that obtains control rights. In the case it is not a “package deal”, the share of the book value of the
shareholder’s equity of the merged party in the consolidated financial statements of the ultimate controller is taken
as the initial investment cost of the long-term equity investment. The difference between the initial investment cost
of the long-term equity investment and the book value of the long-term equity investment before the merger plus
the book value of the new payment consideration for the shares on the merger date shall be adjusted to the capital
reserve; If the capital reserve is insufficient to reduce, the retained earnings shall be adjusted. Any other
comprehensive income recognized by the equity investment held prior to the merger date that is accounted for
using the equity method or is available-for-sale financial assets will not be subject to accounting treatment for the
time being.
For long-term equity investments acquired by business combinations not under common control, the initial cost of
long-term equity investment is the cost of acquisition on the purchase date. The merger costs include assets paid by
the purchaser, liabilities incurred or assumed, and the sum of fair value of the equity securities issued. If you
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
acquire the equity of the purchased party through multiple transactions, and eventually form a business
combination not under the same control, and they should be dealt with according to whether they are in a “package
deal” respectively: In the case of a “package deal”, each transaction is treated as a transaction that obtains control
rights. If it does not belong to a \"package deal,\" the original investment cost of the long-term equity investment
calculated according to the cost method shall be calculated according to the sum of the book value of the original
held equity investment and the new investment cost. Where the originally held equity is accounted for using the
equity method, related comprehensive income shall not be accounted for temporarily. Where the original equity
investment is an available-for-sale financial asset, the difference between its fair value and its carrying amount,
and the accumulated fair value changes previously recognized in other comprehensive income are transferred to
profit or loss for the current period.
Aggregate expenses such as auditing, legal services, assessment and consulting, etc. incurred by the combining
party or the purchaser for the business combination shall be recorded into the current profit and loss when
incurred.
Except for the long-term equity investment formed by the business combination, other equity investments are
initially measured at cost. The cost will vary depending on the way in which the long-term equity investment is
obtained, and will be swapped out in accordance with the cash purchase price actually paid by the company, the
fair value of the equity securities issued by the company, the value of the investment contract or agreement, and
the exchange of non-monetary assets. The fair value of the asset or the original book value and the fair value of the
long-term equity investment itself are determined. The costs, taxes, and other necessary expenses that are directly
related to the acquisition of long-term equity investments are also included in the investment costs. The cost of
long-term equity investment is the original held equity investment determined in accordance with the Accounting
Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments if the
additional investment can significantly affect the invested entity or jointly control it but does not constitute control.
The fair value plus the sum of new investment costs.
(2) Subsequent measurement and recognition of profit and loss
The long-term equity investment that has common control over the invested entity (except for constituting a
common operator) or significant influence is accounted for using the equity method. In addition, the company's
financial statements use the cost method to account for long-term equity investments that can control the investee.
① Long-term equity investment accounted for by cost method
When using the cost method, the long-term equity investment is measured at the initial investment cost, and the
cost of the long-term equity investment is adjusted by adding or withdrawing the investment. Except for the actual
payment for the investment or the cash dividend or profit included in the consideration that has been announced
but not yet issued, the current investment income shall be recognized in accordance with the cash dividend or
profit declared to be released by the investee.
② Long-term equity investment accounted for by the equity method
When using the equity method of accounting, the initial investment cost of long-term equity investment is greater
than the fair value share of the identifiable net assets of the investee when investing, and the initial investment cost
of long-term equity investment shall not be adjusted; Where the initial investment cost is less than the fair value
share of the identifiable net assets of the investee when the initial investment cost is less than the investment, the
difference is included in the current profit or loss and the cost of the long-term equity investment is adjusted.
When using the equity method of accounting, investment income and other comprehensive income are recognized
separately based on the net profit or loss realized by the investee and the share of other comprehensive income that
should be shared. At the same time, the book value of long-term equity investment shall be adjusted; the portion of
the book value of long-term equity investment shall be reduced correspondingly in accordance with the portion of
the profit or cash dividend declared to be distributed by the invested entity; For other changes in the owners’ equity
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
of the invested entity other than the net profit or loss, other comprehensive income and profit distribution, the book
value of the long-term equity investment is adjusted and included in the capital reserve. When confirming that they
should enjoy the share of the net profits and losses of the investee, the net profits of the investee shall be adjusted
after confirmation based on the fair value of the identifiable assets of the investee at the time of acquisition. If the
investee adopts an accounting policy and the accounting period is inconsistent with that of the company, the
financial statements of the investee shall be adjusted in accordance with the accounting policies and accounting
periods of the company and based on which the investment income and other comprehensive income will be
confirmed. For the transactions between the company and its associated companies and joint ventures, the assets
sold or sold do not constitute a business, and the unrealized gains and losses from internal transactions are
calculated based on the proportion of shares that are attributable to the company and offset. On this basis, the
investment gains and losses are confirmed. However, if the unrealized internal transaction losses incurred by the
company and the invested entity belong to the impairment loss of the transferred assets, they shall not be offset. If
the company constitutes a business with assets invested by a joint venture or an associate, and the investor obtains
a long-term equity investment but does not obtain control, the fair value of the investment is used as the initial
investment cost of the new long-term equity investment. The difference between the cost and the book value of the
investment business is fully accounted for in the current period profit or loss. Where the assets sold by the
company to a joint venture or an associate constitute a business, the difference between the consideration obtained
and the book value of the business is fully recorded in the current profit or loss. If the assets purchased by the
company from its associates and joint ventures constitute a business, it shall be accounted for in accordance with
the Accounting Standards for Business Enterprises No. 20 - Merger of Enterprises and shall fully confirm the gains
or losses associated with the transactions.
When it is confirmed that the net losses incurred by the invested entity should be shared, the book value of the
long-term equity investment and other long-term equity that actually constitutes the net investment of the invested
entity shall be reduced to zero. In addition, if the company is obligated to bear additional losses to the investee, it
shall recognize the estimated liabilities according to the expected obligations and include the current investment
losses. If the invested entity realizes a net profit in the subsequent period, the Company will resume recognizing
the share of its share of profits after the amount of its share of profits offsets the share of unrecognized losses.
For long-term equity investments in associates and joint ventures that have been held prior to the Company's first
implementation of the new accounting standards, if there is a debit difference in the equity investment related to
the investment, the amount that is amortized on a straight-line basis over the original remaining period is included
in the current profit or loss.
③ Acquisition of minority interest
When preparing the consolidated financial statements, the difference between the new long-term equity investment
for the acquisition of minority equity and the share of net assets that should be continuously calculated by the
subsidiary since the purchase date (or the merger date) based on the new shareholding ratio is calculated. If the
capital reserve is adjusted and the capital reserve is insufficient to offset, the retained earnings shall be adjusted.
④ Disposal of long-term equity investment
In the consolidated financial statements, the parent company partially disposes of the long-term equity investment
in the subsidiary without losing control, and the difference between the disposal price and the disposal of the
long-term equity investment and the subsidiary's net assets are included in the shareholders' equity; If the parent
company partially disposes of the long-term equity investment in the subsidiary resulting in the loss of control over
the subsidiary, it shall be dealt with in accordance with the relevant accounting policies described in Notes 4, 5,
and (2) Method for Compiling the Consolidated Financial Statements.
For the disposal of long-term equity investment under other circumstances, the difference between the book value
and the actual purchase price of the disposing equity shall be included in the current profits and losses.
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
For long-term equity investments accounted for using the equity method, the remaining equity after disposal is still
accounted for using the equity method. At the time of disposal, other comprehensive income components
originally recorded in shareholders' equity shall be accounted for on the same basis as the investee's direct disposal
of the relevant assets or liabilities. The owner’s equity recognized as a result of changes in the owners’ equity other
than net profit or loss, other comprehensive income, and profit distribution of the investee is transferred in profit or
loss for the current period.
Long-term equity investments accounted for using the cost method, remaining equity after disposal are still
accounted for using the cost method. Before the acquisition of control over the investee, other comprehensive
income recognized through equity method accounting or confirmation of financial instruments and measurement
standards shall be accounted for on the same basis as the investee's direct disposal of the relevant assets or
liabilities; and carry forward the profit and loss of the current period in proportion; The change in owners’ equity
other than net profit or loss, other comprehensive income, and profit distribution of the investee’s net assets as a
result of using the equity method of accounting is carried forward in proportion to the current profit or loss.
If the company disposes of part of the equity investment and loses control over the invested entity, when the
individual financial statements are prepared, if the remaining equity after disposal can exert joint control or
significant influence on the investee, it shall be accounted for using the equity method, and the equity shall be
accounted for using the equity method to adjust the remaining equity as if it were obtained; If the remaining equity
after disposal cannot implement joint control or exert significant influence on the invested entity, it shall be subject
to accounting treatment in accordance with the relevant provisions of the criteria for recognition and measurement
of financial instruments. The difference between the fair value and the book value at the date of loss of control is
included in the current profit or loss. Before the company obtains control over the investee, other comprehensive
income that is recognized by using equity method accounting or financial instrument recognition and measurement
criteria accounting. When accounting for the invested entity is lost, the same basis as the investee’s direct disposal
of the relevant assets or liabilities is used for accounting treatment. Changes in the owners’ equity other than the
net profit or loss, other comprehensive income, and profit distribution of the investee’s net assets that are
accounted for using the equity method of accounting are carried forward to the current profit or loss when they
lose control of the investee. Among them, the residual equity after disposal is accounted for using the equity
method, and other comprehensive income and other owners' equity are carried forward in proportion; If the
remaining equity after disposal is changed to the accounting treatment based on the recognition and measurement
standards of financial instruments, all other comprehensive income and other owner's equity shall be carried
forward.
If the company disposes of part of the equity investment and loses the joint control or significant influence on the
investee, the remaining equity after disposal shall be calculated according to the criteria for the confirmation and
measurement of financial instruments, and the fair value on the date of loss of joint control or significant influence.
The difference between the book value is included in the current profit and loss. The other comprehensive income
recognized in the original equity investment accounted for using the equity method is accounted for on the same
basis as the investee’s direct disposal of the relevant assets or liabilities when the use of the equity method is
terminated. The owner’s equity recognized as a result of changes in the owners’ equity other than the net profit or
loss, other comprehensive income, and profit distribution of the investee is transferred to the current investment
income when the equity method is terminated.
The company disposes of the equity investment in the subsidiary company through multiple transactions until it
loses control. If the above transaction belongs to a package transaction, the transaction will be treated as a
transaction that handles the equity investment in the subsidiary company and loses control. Before the loss of
control rights, the difference between the book value of the long-term equity investment corresponding to each
disposal price and the equity that was disposed of is first recognized as other comprehensive income, and then
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
transferred to the current loss and gain of loss of control right when the control right is lost.
14. Real Estate for Investment
Investment property refers to real estate held to earn rent or capital appreciation, or both, including land use rights
that have been leased, land use rights that are held and prepared for transfer after appreciation, buildings that have
been leased, etc. In addition, if the vacant building that the company holds in preparation for operating the lease, if
the board of directors (or similar organization) makes a written resolution. It is clearly stated that it will be used for
operating leases and that the intentions of the holdings will not change in the short term. They are also presented as
investment real estate.
Investment real estate is initially measured at cost. Subsequent expenditures related to investment real estate shall
be included in the cost of investment real estate if the economic benefits associated with the asset are likely to flow
in and its cost can be reliably measured. Other follow-up expenses are included in the current profit or loss when
they occur.
The Company adopts a cost model for the subsequent measurement of investment real estates, and depreciates or
amortizes them in accordance with policies that are consistent with the use of buildings or land use rights.
For details of the impairment test method and withdrawal method of impairment provision for investment real
estate, please refer to Note IV.20 Long-term Asset Impairment.
When the self-use real estate or inventory is converted into investment real estate or investment real estate is
converted into self-use real estate, the book value before conversion shall be taken as the converted entry value.
When the investment real estate is disposed of or permanently withdrawn from use and it is expected that no
economic benefit can be obtained from its disposal, the recognition of the investment real estate shall be
terminated. The income from disposal of investment real estate sold, transferred, scrapped or damaged is deducted
from its book value and related taxes and expenses and charged to profit or loss for the current period.
15. Fixed Assets
(1) Conditions to determine fixed assets
Fixed assets refer to tangible assets that are held for the purpose of producing goods, providing labor service,
renting or business management and have a service life of more than one accounting year. Fixed assets are only
recognized when their economic benefits are likely to flow into the company and their costs can be reliably
measured. Fixed assets are initially measured at cost and taking into account the impact of the estimated cost of
disposal.
(2) Depreciation methods for various types of fixed assets
From the next month after the fixed assets have reached the expected usable status, depreciation is applied within
the useful life using the straight-line method. The useful life, estimated net residual value and annual depreciation
rate of various types of fixed assets are as follows:
Depreciation period Residual Annual depreciation rate
Category Depreciation method
(years) rate(%) (%)
Buildings Annual average method 8-50 5 1.90-12.00
Electronic equipment Annual average method 3-10 4、5 9.50—32.00
Mechanical equipment Annual average method 5-28 4、5 3.39—19.20
Transportation Annual average method
5-10 4、5 9.50—19.20
equipment
Office equipment Annual average method 3-10 4、5 9.50-32.00
Other equipment Annual average method 5-28 4、5 3.39—19.20
The expected net salvage value is the amount of the estimated disposal expenses that the company currently
receives from the disposal of the asset, assuming that the estimated useful life of the fixed asset is full and at the
end of its useful life.
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
(3) Impairment test method of fixed assets and withdrawal method of impairment provision
For the details of impairment test method and withdrawal method of impairment provision for fixed assets, please
refer to Note IV.20 Long-term Asset Impairment.
(4) Identification basis and pricing method of financing lease fixed assets
A finance lease is a lease that transfers substantially all the risks and rewards associated with the ownership of an
asset. Ownership may or may not eventually transfer ownership. Fixed assets leased by financial leases are
depreciated by using the same policy as self-owned fixed assets. If it is reasonable to determine the ownership of
the leased asset when the lease term expires, depreciation shall be made within the useful life of the leased asset. If
it is impossible to reasonably determine that the ownership of the leased asset can be obtained upon the expiration
of the lease term, the depreciation will be made within the shorter of the lease term and the useful life of the leased
asset.
(5) Other Instructions
Subsequent expenditures related to fixed assets, if the economic benefits associated with the fixed assets are likely
to flow in and their costs can be reliably measured, are included in the cost of fixed assets and the recognition of
the book value of the replaced part is terminated. Other subsequent expenditures other than this are included in
profit or loss for the current period when incurred.
The fixed assets are derecognized when the fixed assets are disposed or if no economic benefits are expected to
result from the use or disposal. The difference between the proceeds from disposal of fixed assets sold, transferred,
scrapped or damaged after deducting their book value and relevant taxes and fees is included in the current profits
and losses.
The company reviews the useful life, estimated net residual value, and depreciation method of fixed assets at least
at the end of the year. If any change occurs, it will be treated as changes in accounting estimates.
16. Construction in Progress
Construction in progress costs are determined based on actual project expenditures, including project expenditures
incurred during construction, capitalized borrowing costs and other related expenses before the project reaches its
expected usable condition. Construction in progress is carried over to fixed assets after it reaches its intended
usable condition.
For details of the impairment test method and impairment provision method for construction in progress, please
refer to Note IV.20 Long-term Asset Impairment.
17. Borrowing Costs
Borrowing costs include interest on borrowings, amortization of discounts or premiums, ancillary expenses, and
exchange differences arising from foreign currency borrowings. Borrowing costs that can be directly attributable to
the acquisition, construction or production of assets that meet the conditions for capitalization; Capitalization
commences when capital expenditures have already occurred, borrowing costs have been incurred, and the
acquisition, construction or production activities necessary to bring the assets to their intended use or sale status
have commenced; When the assets constructed or produced that comply with the capitalization conditions reach
the state of intended use or sale, the capitalization shall be stopped. The remaining borrowing costs are recognized
as expenses in the current period.
The actual interest expenses incurred in the current period of the special borrowings shall be capitalized after
deducting the interest income earned by the undisbursed borrowing funds from the bank or the investment income
obtained from the temporary investment. The general borrowings are determined based on the weighted average of
the accumulated asset expenditures that exceed the portion of the special borrowings multiplied by the
capitalization rate of the general borrowings used to determine the amount of capitalization. The capitalization rate
is determined based on the weighted average interest rate of the general borrowings.
During the capitalization period, the exchange differences in foreign currency specific borrowings are all
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
capitalized; exchange differences on foreign currency general borrowings are recognized in profit or loss for the
current period.
Assets eligible for capitalization refer to assets such as fixed assets, investment real estate, inventory, etc. which
require a considerable period of time for acquisition or construction or production activities to be ready for use or
sale.
If the assets eligible for capitalization are abnormally interrupted in the process of acquisition, construction or
production and the interruption lasts for more than 3 months, the capitalization of the borrowing costs shall be
suspended until the acquisition, construction or production of the assets resumes.
18. Intangible Assets
(1) Intangible Assets
Intangible assets are identifiable non-monetary assets that are owned or controlled by the company and have no
physical shape.
Intangible assets are initially measured at cost. Expenditures related to intangible assets are included in the cost of
intangible assets if the relevant economic benefits are likely to flow into the company and their costs can be
reliably measured. Expenditure for other items other than this is included in profit or loss for the current period
when incurred.
Land use rights acquired are usually accounted for as intangible assets. For the self-development and construction
of buildings and other buildings, the related land use rights expenditures and building construction costs are
accounted for as intangible assets and fixed assets, respectively. For purchased houses and buildings, the relevant
price will be allocated between the land use rights and the buildings. If it is difficult to allocate them reasonably,
they will be treated as fixed assets.
Intangible assets with limited useful lives are available to be amortized over their original useful lives less their
estimated net residual value and the accumulative amount of accrued impairment losses from their expected useful
lives from the moment they are available for use. Intangible assets with indefinite useful lives are not amortized.
At the end of the period, the service life and amortization method of the intangible assets with limited service life
are reviewed, and if any changes occur, they are treated as changes in accounting estimates. In addition, the service
life of an intangible asset with an indefinite useful life is reviewed. If there is evidence that the period during
which the intangible asset brings economic benefits to the enterprise is foreseeable, the useful life of the intangible
asset is estimated and it is based on intangible assets with a limited useful life. The amortization policy is
amortized.
(2) Research and development expenditure
The expenditures of the company's internal research and development projects are divided into research phase
expenditures and development phase expenditures.
Expenditure for the research phase is included in profit or loss for the current period when incurred.
Expenditure in the development phase that satisfies the following conditions at the same time is recognized as
intangible assets. Expenditure at the development stage that does not satisfy the following conditions is included in
the current profit and loss:：
① It is technically feasible to complete this intangible asset so that it can be used or sold;
② Have the intention to complete the intangible assets and use or sell them;
③ The ways in which intangible assets generate economic benefits, including the existence of a market in
which intangible assets can be used to prove the existence of a market for the products produced using
the intangible assets, and intangible assets can be used internally, which can prove its usefulness;
④ Sufficient technical, financial and other resources to support the development of the intangible assets
and the ability to use or sell the intangible assets;
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
⑤ Expenditure attributable to the development stage of this intangible asset can be reliably measured.
If it is not possible to distinguish between research phase expenditures and development phase expenditures, all
R&D expenditures incurred will be charged to the current profit or loss.
(3) Impairment test method of intangible assets and withdrawal method of impairment provision
For details of the impairment test method and withdrawal method of impairment provision for intangible assets,
please refer to Note IV.20 Long-term Asset Impairment.
19. Long-term Expenses to be Apportioned
Long-term expenses to be apportioned are various expenses that have already occurred but should be burdened by
the reporting period and subsequent periods with a time limit of more than one year. The company's long-term
expenses to be apportioned mainly include renovation and land lease fees. Long-term expenses are amortized on a
straight-line basis over the expected benefit period.
20. Long-term Asset Impairment
For non-current non-financial assets such as fixed assets, construction in progress, intangible assets with limited
service life, investment real estate measured in cost mode, and long-term equity investments in subsidiaries, joint
ventures, and associates. The company judges whether there is any indication of impairment on the balance sheet
date. If there is any indication of impairment, its recoverable amount is estimated and an impairment test is
conducted. Goodwill, intangible assets with an indefinite useful life, and intangible assets that have not yet reached
their usable status are tested for impairment annually, regardless of whether there is any indication of impairment.
If the impairment test result shows that the recoverable amount of the asset is lower than its book value, the
difference shall be withdrawn and accounted for as impairment loss. The recoverable amount is the higher of the
fair value of the assets less the disposal expenses and the present value of the estimated future cash flow of the
assets. The fair value of an asset is determined based on the price of the sales agreement in an arm's length
transaction. If there is no sales agreement but there is an active market for assets, the fair value is determined based
on the buyer's bid for the asset; If there is no sales agreement and an active market for assets, the fair value of the
asset is estimated based on the best available information. Disposal expenses include legal fees related to the
disposition of assets, related taxes, handling expenses, and direct expenses incurred in bringing assets into a
saleable state. The present value of the expected future cash flow of the assets is determined by the amount of
discounted cash flow selected in accordance with the estimated future cash flow generated during the continuous
use and final disposal of the assets. The impairment provision for assets is calculated and confirmed on the basis of
individual assets. If it is difficult to estimate the recoverable amount of a single asset, the asset group to which the
asset belongs should be used to determine the recoverable amount of the asset group. Asset groups are the smallest
portfolio of assets that can generate independent cash inflows.
Goodwill separately listed in the financial statements shall be allocated to the asset group or combination of asset
groups that are expected to benefit from the synergies of the business combination when performing the
impairment test. If the test result shows that the recoverable amount of the asset group or combination of asset
groups that includes the allocated goodwill is lower than its book value, the corresponding impairment loss is
recognized. The amount of impairment loss is written off against the book value of goodwill allocated to the asset
group or group of asset groups. According to the proportion of the carrying value of other assets except for
goodwill in the asset group or group of assets, the book value of other assets is offset proportionately.
Once the impairment loss of the above assets is confirmed, it will not be transferred back to the part where the
value is recovered.
21. Employees’ Salary
The employee compensation of the company mainly includes short-term employee compensation,
post-employment benefits, dismissal benefits, and other long-term employee benefits. Among them:
The short-term salary mainly includes wages, bonuses, subsidies and subsidies, workers' welfare, medical
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
insurance, birth insurance, industrial injury insurance, housing accumulation fund, trade union funds and staff
education funds, non-monetary welfare and so on. During the accounting period of the employees providing
service to the company, the company recognized the actual short-term employees' pay as liabilities and included
the cost of the profit and loss of the current period or the related assets. The non-monetary welfare is measured in
accordance with the fair value.
Post-employment benefits include basic pension insurance, unemployment insurance and annuity.
Post-employment benefits plan includes setting up the deposit plan and setting up the benefit plan. By setting up
the deposit plan, the corresponding deposit amount should be included in the relevant asset cost or current profit
and loss when it occurs. (1) The reserve plan is recognized as a liability based on the fixed fee paid to an
independent fund, and it is included in the current profit and loss or related assets cost. (2) Set up the benefit plan,
and adopt the expected accumulative welfare unit method to carry out the accounting treatment. Specifically, the
company will set the welfare obligation set by the benefit plan as the final value of the departure time according to
the formula determined by the expected cumulative welfare unit method. Later, it belongs to the period of
providing services for employees, and it is included in the current profit and loss or related assets cost.
To release the labor relations with the employees prior to the expiry of the employee labor contract, or to offer
compensation for the employees’ willingness to accept the reduction, when the company cannot unilaterally
withdraw the termination benefits provided by the dissolution of the labor relationship plan or the reduction
proposal, Both the company and the company confirm the costs related to the restructuring related to the
disbursement and dismemberment benefits as soon as possible, and confirm the employees' remuneration liabilities
resulting from the dismissal benefits and include them in the current profits and losses. However, if the dismissal
welfare is not expected to be fully paid within 12 months after the end of the annual reporting period, it shall be
treated as other long-term employee compensation.
The employee's internal retirement plan is treated on the same principle as the above-mentioned retirement benefits.
The Company will include the salaries of the internally retired staff and the social insurance premiums to be paid
during the period from the employee's suspension of service to the normal retirement date, and shall be recorded in
the current profit or loss (the dismissing welfare) when they meet the conditions for confirming the estimated
liabilities.
If the other long-term employee benefits provided by the company to employees are in compliance with the
defined contribution plan, it shall be accounted for in accordance with the defined contribution plan. In addition, it
shall be accounted for in accordance with the defined benefit plan.
22. Estimated Liabilities
When obligations related to contingent events meet the following conditions, they are confirmed as estimated
liabilities: (1) this obligation is the current obligation assumed by the company; (2) The performance of this
obligation may result in the outflow of economic benefits; (3) The amount of this obligation can be reliably
measured.
On the balance sheet date, considering the risks, uncertainties, and time value of money related to contingencies,
the estimated liabilities shall be measured in accordance with the best estimate of the required expenditure for the
performance of the current obligation.
If all or part of the expenses required for the liquidation of estimated liabilities are expected to be compensated by
a third party, the amount of compensation shall be recognized as an asset separately when it is basically determined
to be receivable, and the amount of compensation confirmed does not exceed the book value of the estimated
liability.
(1) Loss Contract
A loss contract is a contract in which the inevitable occurrence of contractual obligations exceeds the expected
economic benefits. If the contract to be executed becomes a loss-making contract and the obligation resulting from
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
the loss-making contract satisfies the conditions for recognizing the above-mentioned estimated liability, the
portion of the contracted asset that exceeds the recognized impairment loss (if any) of the contracted asset is
recognized as the estimated liability.
(2) Reorganization Obligations
For a reorganization plan that is detailed, formal, and has been announced to the public, the amount of the
estimated liability is determined based on the direct expenses related to the reorganization, provided that the
aforementioned conditions for confirming the estimated liabilities are met. For the obligation to re-sell part of the
business, only when the company promises to sell part of the business (that is, when a binding sales agreement is
signed), will it confirm the obligations related to the reorganization.
23. Share Payment
(1) Accounting treatment of share payments
Share payment is a transaction that grants equity instruments or assumes liabilities determined on the basis of
equity instruments in order to obtain services provided by employees or other parties. Share payments are divided
into equity-settled share-based payments and cash-settled share payments.
① Equity-settled share payments
Equity-settled share payments used to exchange services provided by employees shall be measured at the fair
value of the equity instruments granted to employees on the grant date. The amount of this fair value shall be based
on the best estimate of the number of equity instruments that are exercisable during the waiting period when the
services within the waiting period are completed or the specified performance conditions are only available. When
it is calculated according to the straight-line method, the relevant costs or expenses are included/when the vesting
right is immediately available after granting, relevant costs or expenses are included on the grant date, and the
capital reserve is increased correspondingly.
During the waiting period, on each balance sheet date, the Company makes the best estimate based on the latest
information on changes in the number of viable employees, and revises the number of equity instruments that are
expected to be exercised. The above estimated impact is included in the current period related costs or expenses,
and capital reserves are adjusted accordingly.
If the fair value of the other party's services can be reliably measured, the fair value of the other party's services on
the date of acquisition will be measured. If the fair value of other party's services cannot be reliably measured, but
the fair value of the equity instrument can be measured reliably, the fair value measurement of the equity
instrument at the date of service acquisition shall be included in the relevant costs or expenses, and the
shareholders' equity shall be increased correspondingly.
② Cash-settled share payment
Cash-settled share-based payments are measured at the fair value of the liabilities assumed by the company on the
basis of shares or other equity instruments. If the right is exercised immediately after granting, relevant costs or
expenses are included on the grant date, and liabilities are increased accordingly; If it is necessary to complete the
services during the waiting period or to achieve the required performance conditions, then on each balance sheet
date of the waiting period, based on the best estimate of the vesting condition, the fair value of the liabilities
assumed by the company shall be calculated. The services obtained during the current period are included in costs
or expenses and the liabilities are increased accordingly.
On each balance sheet date and settlement date prior to the settlement of the relevant liabilities, the fair value of
the liability is re-measured and the change is recorded in the current profit or loss.
(2)Relevant accounting treatment of modifying and terminating the share payment plan
When the company makes changes to the share payment plan, if the revision increases the fair value of the equity
instruments granted, the increase in services will be confirmed in accordance with the increase in the fair value of
the equity instruments. The increase in the fair value of equity instruments refers to the difference between the fair
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
value of the equity instruments before and after the modification on the date of modification. If the amendment
reduces the total fair value of the share payment or adopts other methods that are unfavorable to the employees, it
will continue to account for the services obtained as if the change never occurred unless the company cancelled
some or all of the granted instruments.
During the waiting period, if the granted equity instrument is cancelled, the company will treat the cancelled equity
instrument as accelerating exercise, and immediately recognize the amount that should be confirmed in the
remaining waiting period in the current profit and loss and confirm the capital reserve. If the employee or other
party can choose to meet the non-vesting condition but is not satisfied within the waiting period, the company will
treat it as cancellation of the granted equity instrument.
(3) Accounting treatment of share payment transactions involving the company’s shareholders or actual controllers
In respect of the company’s share-based payment transactions with the shareholders or actual controllers of the
company, one of the settlement company and the receiving service company is within the company. Another
accounting treatment in the company's consolidated financial statements outside the company is as follows:
①If a settlement company settles its equity instrument, the share payment transaction shall be treated as
equity-settled share-based payment; In addition, this will be treated as a cash settled share payment.
If the settlement company is an investor in a service enterprise, it shall be recognized as a long-term equity
investment in the service enterprise in accordance with the fair value of the equity instrument of the grant date or
the fair value of the liability it is assumed to bear. Capital reserve (other capital reserve) or liabilities shall also be
recognized. .
②If the receiving service enterprise has no settlement obligation or has granted its own equity instruments to the
employees of the enterprise, the share payment transaction shall be treated as equity-settled share payment; If the
receiving service company has a settlement obligation and the company’s employee is not its own equity
instrument, the share payment transaction is treated as cash settled share payment.
If the share-based payment transaction between the companies within the company is not the same as the service
enterprise and the settlement enterprise, the confirmation and measurement of the share-based payment transaction
in the individual financial statements of the receiving service enterprise and the settlement enterprise shall follow
the above principles.
24. Preferred Stock, Perpetual Debt and Other Financial Instruments
(1) The difference between perpetual debt and preferred stock, etc.
The financial instruments issued by the company, such as perpetual bonds and preferred shares, meet the following
conditions as equity instruments:
①The financial instruments do not include contractual obligations to deliver cash or other financial assets to other
parties or to exchange financial assets or financial liabilities with other parties under potentially adverse
conditions;
②If the financial instrument is required to be settled or can be settled with the company's own equity instruments
in the future, if the financial instrument is not a derivative instrument, it does not include the contractual obligation
to deliver a variable amount of its own equity instrument for settlement; If it is a derivative, the company can only
settle the financial instrument by using a fixed amount of its own equity instruments to exchange a fixed amount of
cash or other financial assets.
Except for the financial instruments that can be classified as equity instruments under the above conditions, other
financial instruments issued by the company should be classified as financial liabilities.
Where the financial instrument issued by the company is a compound financial instrument, it is recognized as a
liability based on the fair value of the liability component, and is recognized as “other equity instrument” after the
actual amount received minus the fair value of the liability component. The transaction costs incurred for the
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
issuance of a compound financial instrument are apportioned between the liability component and the equity
component in proportion to their respective share of the total issue price.
(2) Accounting methods for perpetual debt, preferred stock, etc.
Financial instruments classified as financial liabilities, such as perpetual bonds and preferred stock, related interest,
dividends (or dividends), gains or losses, and gains or losses arising from redemptions or refinancing, except for
borrowings eligible for capitalization expenses (see Note IV.17 Loaning Expenses) are included in the current
profits and losses.
For financial instruments classified as equity instruments, such as perpetual bonds and preferred shares, the
company treats them as a change in equity (including refinancing), repurchase, sale, or cancellation, and related
transaction costs are also deducted from equity. The Company's distribution to holders of equity instruments is
treated as profit distribution.
The company does not confirm the fair value changes of equity instruments.
25. Revenue
(1) Product sales revenue
The transfer of the major risks and rewards of the ownership of the goods to the buyer has neither retained the
continuation management rights usually associated with the ownership nor implemented effective control over the
sold goods, and the amount of income can be reliably measured. The relevant economic benefits are likely to flow
into the company, and when the related costs that have occurred or will occur can be reliably measured, the
realization of the sales revenue of the goods is confirmed.
(2)Revenue from Providing Labor
When the results of the provision of labor services can be reliably estimated, the labor revenue provided by the
percentage of completion method is recognized on the balance sheet date. The progress of the completion of the
service transaction is determined by the ratio of the completed service measurement/provided labor service to the
total labor service provision/cost of labor service incurred to the estimated total cost.
The ability to reliably estimate the outcome of a labor transaction is to satisfy: ①The amount of income can be
measured reliably; ②The related economic benefits are likely to flow into the company;③The degree of
completion of the transaction can be reliably determined;④The costs that have occurred and will occur in the
transaction can be reliably measured.
If the results of the provision of labor services cannot be reliably estimated, the labor service income provided
shall be recognized according to the amount of labor costs that have occurred and is expected to be compensated,
and the incurred service costs shall be recognized as current expenses. If the labor costs that have already occurred
cannot be compensated if they are not expected to be compensated, the revenue will not be recognized.
If the contract or agreement signed between the company and other companies includes the sale of goods and the
provision of labor services, if the sales of goods and the provision of labor services can be distinguished and
measured separately, the sale of goods and the provision of labor services shall be handled separately; If the selling
goods part and the labor service part cannot be distinguished, or if they can be distinguished but cannot be
measured separately, the contract shall be treated as sales goods.
(4)Revenue from Usage Expense
According to relevant contracts or agreements, revenue is recognized on an accrual basis.
(5)Revenue from Interest
Revenue from interest is calculated based on the time and actual interest rate of others using the company’s
currency funds.
26. Government Grant
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
The government grant refers to the company's free acquisition of monetary assets and non-monetary assets from
the government, excluding the capital invested by the government as an investor and enjoying the corresponding
owner's equity. Government grants are divided into asset-related government grants and income-related
government grants. The company defines the government grant acquired for the construction or other forms of
long-term assets as the government subsidy related to the assets; The remaining government grants are defined as
income-related government grants. If the government document does not specify the target of the grant, the grant
will be divided into income-related government grant and asset-related government grant in the following ways: (1)
Where a government document specifies the specific project for which the subsidy is targeted, the relative
proportion of the amount of expenditure that forms the asset and the amount of expenditure included in the
expense shall be divided according to the budget of the specific project; The division ratio shall be reviewed on
each balance sheet date, and changes shall be made when necessary; (2) The government documents only make a
general statement on the use, and do not specify a specific item as a government grant related to income. If the
government grant is a monetary asset, it shall be measured according to the amount received or receivable. If a
government grant is a non-monetary asset, it shall be measured at its fair value; If the fair value cannot be reliably
obtained, it shall be measured at the nominal amount. Government grants measured at nominal amounts are
directly charged to profit or loss for the current period.
The Company usually confirms and measures the actual amount of government subsidies when it is actually
received. However, for the end of the period there are conclusive evidence that can meet the relevant conditions of
the financial support policy requirements are expected to receive financial support funds in accordance with the
amount receivable. The government grant measured in accordance with the amount receivable shall meet the
following conditions at the same time: (1) The amount of the loan receivable has been confirmed by the authorized
government department, or it can be reasonably measured according to the relevant provisions of the officially
announced fiscal fund management method, and it is expected that there will be no significant uncertainty in its
amount. (2) It is based on the financial support projects that have been officially released by the local financial
department and that are voluntarily disclosed in accordance with the regulations of the Government Information
Disclosure Regulations and the administrative measures for fiscal funds. And the management approach should be
inclusive (any company that meets the specified conditions can apply), rather than specifically for a specific
business; (3) The relevant grant approval has clearly promised the time limit for the payment, and the payment of
this amount is guaranteed by the corresponding financial budget, so it can be reasonably guaranteed that it can be
received within the prescribed time limit; (4) According to the company and the specific circumstances of the
subsidy, other relevant conditions that should be met.
Government grants related to assets are recognized as deferred income and are charged to the profit or loss of the
current period or the carrying amount of the relevant assets in a reasonable and systematic manner over the useful
life of the relevant assets. If a government grant related to income is used to compensate for the related costs or
losses in the subsequent period, it shall be recognized as deferred income, and shall be recorded in the current
profit or loss or the relevant cost in the period in which the relevant cost, expense or loss is recognized; For the
compensation of related costs or losses that have occurred, they shall be directly included in the current profits and
losses or offset the relevant costs.
At the same time, it includes government grants related to the asset-related portion and the income-related portion,
and separates different parts for accounting treatment. If it is difficult to distinguish, categorize it as a government
grant related to income.
The government grants related to the daily activities of the company are included in other income or used to reduce
the related costs in accordance with the substance of the economic business; Government grants that are not related
to daily activities are counted in non-operating income and expenditure.
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
When a confirmed government grant needs to be returned, if there is a related deferred income balance, the
relevant deferred income is offset against the carrying amount. The book value of the assets adjusted government
grants adjusted to the excess of the current profit or loss or the write-down of the carrying amount of the relevant
assets at initial recognition; if it belongs to other situations, it shall be directly included in the current profits and
losses.
27. Deferred income tax assets / deferred income tax liabilities
(1) Current income tax
On the balance sheet date, the current income tax liabilities (assets) in current and previous period shall be
measured in the expected income tax payable (or refundable) calculated according to the tax law. The taxable
income which is the basis of calculating current income tax expense is calculated after the pre-tax accounting
profit during the report period is adjusted correspondingly according to the tax law
(2) Deferred income tax assets and deferred income tax liabilities
For the temporary differences arising from the balance between the book value of some asset and liability items
and its tax basis, and the balance between the book value of items that cannot be taken as asset and liability
recognition but can determine its tax basis according to the tax law and the tax basis, the balance sheet liability
method is adopted to recognize deferred income tax assets and deferred income tax liabilities.
For taxable temporary differences related to the initial recognition of goodwill, and the initial recognition of assets
or liabilities caused in transaction that is not business merger or does not affect the accounting profit and taxable
income (or deductible loss), the related deferred income tax liabilities will not be recognized. In addition, for
taxable temporary differences related to the investment in subsidiaries, affiliated enterprises and joint ventures, if
the Company can control the time of the reverse of temporary differences, and such temporary differences cannot
be reserved in the foreseeable future, the related deferred income tax liabilities will also not be recognized. Except
for the above exceptions, the Company recognizes deferred income tax liabilities arising from all other taxable
temporary differences.
For deductable temporary differences related to the initial recognition of assets or liabilities caused in transaction
that is not business merger or does not affect the accounting profit and taxable income (or deductible loss), the
related deferred income tax assets will not be recognized. In addition, for deductable temporary differences related
to the investment in subsidiaries, affiliated enterprises and joint ventures, if the temporary differences cannot be
reserved in the foreseeable future, or the taxable income for deducting deductable temporary differences cannot be
obtained in the future, the related deferred income tax assets will not be recognized. Except for the above
exceptions, the Company recognizes deferred income tax assets arising from all other deductable temporary
differences within the limit of taxable income that can be obtained to deduct the temporary differences.
For the deductible loss and tax deduction that can be carried forward in subsequent years, the Company recognizes
corresponding deferred income tax assets within the limit of future taxable income that can be obtained to deduct
the deductible loss and tax deduction
On the balance sheet date, the deferred income tax assets and deferred income tax liabilities shall be measured in
applicable tax rate during expected recovery of related assets or liquidation of related liabilities according to the
tax law.
On the balance sheet date, the Company re-checks the book value of deferred income tax assets, and if enough
taxable income cannot be obtained in the future to deduct the benefits arising from deferred income tax assets, then
the book value of deferred income tax assets will be written down. When enough taxable income can be obtained,
the write-down amount will be reserved.
(3) Income tax expense
The income tax expense includes current income tax and deferred income tax.
Except the current income tax and deferred income tax related to the transactions and events that are recognized as
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
other comprehensive income or are directly reckoned in shareholders' equity, and the book value of deferred
income tax arising from business merger for adjusting the goodwill are reckoned in other comprehensive income
or shareholders' equity, the rest current income tax and deferred income tax expenses or benefits are reckoned in
the current profit and loss,
(4) Offset of income tax
When the Company has the legal right of net settlement and intends to conduct the net settlement or the acquisition
of assets and liquidation of liabilities are conducted at the same time, the current income tax assets and current
income tax liabilities of the Company are presented as per the net amount after offset.
When the Company has the legal right of net settlement of current income tax assets and current income tax
liabilities, and the deferred income tax assets and deferred income tax liabilities are related to the income tax
levied by the same tax collection bureau on the same tax subject or different tax subjects, but during the reverse of
each important deferred income tax assets and liabilities in the future, the tax subjects involved intend to conduct
net settlement of current income tax assets and liabilities or the acquisition of assets and liquidation of liabilities
are conducted at the same time, the deferred income tax assets and liabilities of the Company are presented as per
the net amount after offset.
28. Leasing
The financial leasing means transfer of all risks and remuneration related to the ownership of assets in essence, and
its ownership can be transferred or cannot be transferred finally. The other leasing other than financial leasing is
operating leasing.
(1) The Company as a lessee records the operating leasing business
The rental payment of operating leasing during the lease term is reckoned in the related asset cost or current profit
and loss according to the straight-line method. The initial direct cost is reckoned in current profit and loss, or the
rent occurring actually is reckoned in current profit and loss.
(2) The Company as a lessor records the operating leasing business
The rental income of operating leasing during the lease term is recognized as the current profit and loss according
to the straight-line method. The larger initial direct cost is capitalized when it occurs, which is reckoned in current
profit and loss according to the basic installment of recognized rental income during the lease term; other smaller
initial direct cost is reckoned in current profit and loss when it occurs, or the rent occurring actually is reckoned in
current profit and loss.
(3) The Company as a lessee records the financial leasing business
On the lease commencement date, the less of the fair value of leasing assets and the present value of minimum
lease payment is taken as the recording value of leasing assets, and the minimum lease payment is taken as the
recording value of long-term payable, and its balance is taken as unrecognized financing expense. In addition, the
initial direct costs attributable to leasing items occurring in the process of leasing negotiation and signing the
leasing contract can also be reckoned in the value of leasing assets. The balances after the minimum lease payment
deducts unrecognized financing expense are respectively presented in long-term liability and long-term liability
due within one year
For the unrecognized financing expense, the effective interest rate method is adopted to calculate the recognized
current financing expense within the lease term, or the rent occurring actually is reckoned in current profit and
loss.
(4) The Company as a lessor records the financial leasing business
On the lease commencement date, the sum of the minimum lease payment and initial direct cost is taken as the
booking value of financial leasing receivables, and meanwhile, the unguaranteed residual value is recorded; the
balance between the sum of the minimum lease payment, initial direct cost and unguaranteed residual value and
the sum of present values is recognized as unrealized financing income. The balances after the financial leasing
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
receivables deduct unrealized financing incomes are respectively presented in long-term liability and long-term
liability due within one year
For the unrealized financing income, the effective interest rate method is adopted to calculate the recognized
current financing income within the lease term, or the rent occurring actually is reckoned in current profit and loss.
29. Other important accounting policies and accounting estimates
(1) Discontinued operation
The discontinued operation means a component that meets one of the following conditions, has been disposed by
the Company or classified to be available-for-sale or in business and can be distinguish separately when the
financial statements are prepared: ① the component represents a main independent business or a main operating
area; ② the component is a part of planning to dispose a main independent business or a main operating area;
③the component is just for reselling subsidiaries available.
(2) Hedging accounting
To avoid the commodity price risk in spot goods operation, the Company appoints the commodity futures contract
as hedging instrument. For the commodity futures hedging meeting specified conditions, the Company adopts the
following hedging accounting methods stipulated in the Temporary Provisions for the Accounting Treatment of
Commodity Futures Hedging Business (CK [2015] No.18) to deal with it from January 1, 2016, and the
above-mentioned hedging accounting method will not be executed for this kind of business.
The Company adopts the fair value hedging.
At the beginning of the hedging, the Company specifies the hedging relationship in writing, including recording
the relation between the hedging instrument and hedged item, and the risk management goal and hedging strategy;
the nature and quantity of hedged items; the nature and quantity of hedging instruments; the nature and recognition
of hedging risks; hedging type (fair value hedging or cash flow hedging); the evaluation on hedging effectiveness,
including the economic relation between the hedged item and hedging instrument, hedging ratio and source of
hedging unavailability; the date of starting to specify the hedging relationship, etc. In addition, the Company will
evaluate the existing hedging relationship on the balance sheet date or when major changes in relevant situations
affect the requirements of hedging effectiveness, to confirm whether the hedging relationship shall be terminated,
or whether the quantity of specified hedged items or hedging instruments shall be adjusted, so as to maintain the
hedging ratio meeting the requirements of hedging effectiveness (namely, “rebalance”).
If the Company cannot specify the established hedging relationship because of the change in risk management goal,
or the hedging instrument is closed out or delivered, or the risk exposure of hedged items is lost, or the hedging
relationship does not meet the application conditions of the hedging accounting after rebalance is considered (if
applicable), then the hedging relationship will be terminated.
Fair value hedging
For the fair value hedging, the Company reckons the profit or loss arising from the change in fair value of the
hedging instrument in the current profit and loss during the hedging relationship existence. If the hedged item is
inventory, the Company reckons the change in fair value of the hedged item in the current profit and loss and
adjusts the book value of the hedged item during the hedging relationship existence. If the hedged item is definite
undertaking, the hedged item is recognized as one asset or liability arising from changes in accumulated fair values
after the hedging relationship is specified, and reckoned in the profit or loss of corresponding period.
When hedging relationship is terminated, if the hedged item is inventory, the Company will transfer out the book
value of the hedged item and reckon it in the selling cost when selling the inventory; if the hedged item is definite
undertaking of purchasing commodities, the Company will transfer out the assets or liabilities arising from
changes in accumulated fair values of the hedged item and reckon them in the initial inventory cost when
confirming the relevant inventory; if the hedged item is definite undertaking of selling commodities, the Company
will transfer out the assets or liabilities arising from changes in accumulated fair values of the hedged item and
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
reckon them in the sales revenue when selling.
30. Changes in important accounting policy and accounting estimate
(1) Change in accounting policy
1. Description of change in important accounting policy
On May 10, 2017, Ministry of Finance punished revised Accounting Standards for Business Enterprises No.16 -
Governmental Subsidy (CK [2017] No.15), and the prospective application method was adopted to handle the
governmental subsidy in January 1, 2017 and that obtained later; according to the Notice of Ministry of Finance
about Revising and Printing the General Enterprise Financial Report Format (CK [2017] No.30), the “income
from asset disposal” item was added in the income statement, and the comparative statement was adjusted
correspondingly. The Company implemented above related criterion and notice and handled it according to
relevant regulations when preparing the financial statement in 2017. Through resolution of the 8th board of
directors in 25th meeting on April 11, 2018, the Company started to execute above two accounting standards
according to the time required by Ministry of Finance.
2. Name of affected items in current financial statements before the presentation
① Changes in governmental subsidy accounting and disclosure
Before 2017, the Company recognized the asset-related governmental subsidy as deferred income, and reckoned it
in non-operating income according to the principle of equal division within the service life of related assets; if the
income-related governmental subsidy was used for compensating related expenses and losses later, it would be
recognized as deferred income and reckoned in non-operating income during the confirmation of related expenses;
for compensating related expenses and losses that had occurred, it would be reckoned in non-operating income
directly.
After 2017, according to the revised Accounting Standards for Business Enterprises No.16 - Governmental Subsidy,
the Company will recognize the asset-related governmental subsidy as deferred income and reckon it in profit and
loss by period according to the reasonable and systematic method within the service life of related assets; if the
income-related governmental subsidy is used for compensating related expenses or losses later, it will be
recognized as deferred income and reckoned in current profit and loss during the confirmation of related cost
expenses or losses; for compensating related expenses or losses that have occurred, it will be reckoned in current
profit and loss directly. When the governmental subsidy is recognized as income, the governmental subsidy related
to the daily activities of the Company will be reckoned in other income, and the governmental subsidy irrelevant to
the daily activities of the Company will be reckoned in non-operating income.
② Increase the disclosure of income from asset disposal
Before 2017, the profit or loss from disposal of long-term assets such as fixed assets and intangible assets was in
accounting and presentation of non-operating income and expense, and according to the Notice of Ministry of
Finance about Revising and Printing the General Enterprise Financial Report Format (CK [2017] No.30), the
“income from asset disposal” item was added in the income statement for accounting and disclosing the profit and
loss from disposal of long-term assets such as fixed assets and intangible assets, and the comparative statement
was adjusted correspondingly. According to the regulations of the notice, the profit and loss from disposal of assets
presented in financial statement of this year was RMB -6,770.67; the non-operating income and expense of RMB
-6,770.67 was reduced; meanwhile, the comparative financial statement in 2016 was presented again; the income
from disposal of assets of RMB 17,918,094.06 was increased; the non-operating income and expense of RMB
17,918,094.06 was reduced, and the adjustment had no impact on the total profit.
(2) Change in accounting estimate
① Change in accounting estimate of counting and drawing proportion of bad-debt provision for receivables
Before change: confirmation standard of receivables with significant single amount and individually counting and
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
drawing bad-debt provision: the closing balance is more than RMB one million (including). The counting and
drawing proportion of bad-debt provision for receivables by combination is as follows:
Counting and drawing Counting and drawing proportion
Account age
proportion of receivables (%) of other receivables (%)
Within 1 year (including 1 year) 2
1-2 years (including 2 years) 5
2-3 years (including 3 years) 10
3-4 years (including 4 years) 20
4-5 years (including 5 years) 30
More than 5 years 50
After change: judgment basis of significant single amount or amount standard: receivables with the balance of
more than RMB 10 million, and other receivables with the balance of more than RMB 10 million (or the
receivable balance accounts for more than 5% of receivables, and the other receivable balance accounts for more
than 5% of other receivables). The counting and drawing proportion of bad-debt provision for receivables by
combination is as follows:
In the combination, the aging analysis method is adopted to count and draw the bad-debt provision:
Counting and drawing proportion Counting and drawing proportion
Account age
of receivables (%) of other receivables (%)
Within 1 year (including 1 year)
In which: within the credit period 0
Credit period-1 year (including 1 year) 2
1-2 years 5
2-3 years 20
3-4 years 50
4-5 years 80
More than 5 years 100
Note: the amount of bad debt affected by change in accounting estimate in this year is RMB 1,232,893.80.
② Change in accounting estimate of depreciation period of fixed assets and annual depreciation rate
Before change: the depreciation period of fixed assets and annual depreciation rate are as follows:
Depreciation period Ratio of residual Annual depreciation
Category Depreciation method
(year) value (%) rate (%)
House and building Straight-line method 25 5.00% 3.80%
Transportation equipment Straight-line method 5 5.00% 19.00%
General equipment Straight-line method 10 5.00% 9.50%
Other equipment Straight-line method 5 5.00% 19.00%
After change: the depreciation period of fixed assets and annual depreciation rate are as follows:
Annual
Depreciation Depreciation period Ratio of residual
Category depreciation rate
method (year) value (%)
(%)
House and building Straight-line method 8-50 5 1.90-12.00
Electronic equipment Straight-line method 3-10 4、5 9.50—32.00
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Annual
Depreciation Depreciation period Ratio of residual
Category depreciation rate
method (year) value (%)
(%)
Machinery equipment Straight-line method 5-28 4、5 3.39—19.20
Transportation equipment Straight-line method 5-10 4、5 9.50—19.20
Office equipment Straight-line method 3-10 4、5 9.50-32.00
Other equipment Straight-line method 5-28 4、5 3.39—19.20
31. Significant accounting judgment and estimate
In the process of accounting policy application, the Company needs to judge, estimate and assume the book values
of report items that cannot be calculated accurately because of inherent uncertainty of operating activities.
Considering other related factors, these judgments, estimates and assumptions are made based on past experience
of the Company's management, and they will affect the incomes, expenses, assets and liabilities and balance sheet
date or disclosure of liabilities. However, there may be differences between the actual results caused by uncertainty
of these estimates and the current estimates of the Company’s management, resulting in major adjustments on
book amounts of affected assets or liabilities in the future
The Company reviews the above-mentioned judgments, estimates and assumptions on the basis of going concern
regularly. If the change in accounting estimate only affects the current change, the influence number will be
confirmed in current period; if it affects both current and future changes, then the influence number will be
confirmed in current period and future.
On the balance sheet date, the important fields where the Company needs to judge, estimate and assume the
amounts of items in financial statement are as follows:
(1) Counting and drawing of bad-debt provisions
The Company adopts the allowance method to calculate the bad debt loss according to the accounting policy of
receivables. The impairment of receivables is based on evaluating the collectability of receivables. The
identification of impairment of receivables requires the judgment and estimate of the management. The differences
between the actual results and previous estimates will affect the book value of receivables and counting and
drawing or reverse of bad-debt provisions of receivables during estimate change.
(2) Inventory falling price reserves
The Company calculates as per the lower of the cost and net realizable value according to the inventory accounting
policy, and for the old and unsalable inventories with the cost higher than net realizable value, the inventory falling
price reserves are counted and drawn. The inventory impairment to net realizable value is based on evaluating the
salability and net realizable value of inventories. The identification of inventory impairment requires the
management to make judgment and estimate on the basis of obtaining concrete evidences and considering the
purpose of inventory, the influence of matters after the balance sheet date and other factors. The differences
between the actual results and previous estimates will affect the book value of inventories and counting and
drawing or reverse of inventory falling price reserves during estimate change.
(3) Fair value of financial instruments
For financial instruments not existing in active trading market, the Company can determine its fair value according
to various valuation methods. The valuation methods include discounted cash flow model analysis, etc.. The
Company needs to estimate the future cash flow, credit risk, market volatility and correlation, etc. during valuation,
and selects the appropriate discount rate. These assumptions are of uncertainty, and their changes will affect the
fair value of financial instruments.
(4) Impairment of available-for-sale financial assets
The Company greatly depends on the judgment and assumption of the management to determine whether
available-for-sale financial assets are impaired and the impairment loss needs to be confirmed in income statement.
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
In the process of judgment and assumption, the Company needs to evaluate the degree and duration of the fair
value lower than the cost, and the financial situation of the invested object and the short-term business outlook,
including industry condition, technical change, credit rating, default rate and the risk of the counterparty.
(5) Provision for impairment of long-term assets
The Company judges whether the non-current assets except for financial assets may be impaired on the balance
sheet date. For intangible assets with uncertain service life, in addition to impairment test conducted every year,
when the impairment indication exists, the impairment test is also conducted. For non-current assets except for
financial assets, when there are indications that the book amount is unrecoverable, the impairment test is
conducted.
When the book value of assets or asset group is higher than the recoverable amount, namely, the higher of the net
amount after the fair value minus disposal expense and the present value of the expected future cash flow, it shows
that the impairment occurs.
The net amount after the fair value minus disposal expense is confirmed with reference to the sales agreement
price of assets in fair trade or observable market price minus the incremental cost directly attributable to the
disposal of assets.
The Company needs to make significant judgment on the yield, selling price and operating cost of assets (or asset
group) and the discount rate used for calculating the present value when predicting the present value of future cash
flow. The Company will use all obtained related data when estimating the recoverable amount, including the
predictions on the yield, selling price and operating cost made according to reasonable and supportable
assumptions.
The Company tests whether the goodwill is impaired every year at least. It is required to predict the present value
of future cash flow of asset group or its combination with goodwill. The Company needs to predict the future cash
flow of asset group or its combination, and select the appropriate discount rate to determine the present value of
future cash flow.
(6) Depreciation and amortization
The Company calculates the depreciation and amortization within the service life according to the straight-line
method after considering the residual values of investment real estate, fixed assets and intangible assets. The
Company re-checks the service life regularly to determine the amount of depreciation and amortization reckoned
in every report period. The service life is determined by the Company according to the past experience of similar
assets and combining with expected technological updating. If the previous estimate has a major change, then the
depreciation and amortization expenses will be adjusted in the future.
(7) Deferred income tax assets
Within the limit of enough taxable profit to deduct the loss, the Company confirms the deferred income tax assets
according to all unused tax losses. The Company’s management is required to use a lot of judgments to estimate
the occurrence time and amount of future taxable profit, combining with the tax planning strategy, to determine the
amount of deferred income tax assets.
(8) Income tax
The final tax treatment and calculation of part of transactions are of certain uncertainty in normal business
activities of the Company. Whether part of items can be disbursed before tax requires the approval of the tax
authority. If there are differences between the final results of these tax matters and the amount estimated originally,
then the differences will affect the current income tax and deferred income tax during final recognition.
(9) Internal retirement benefit and supplemental retirement benefit
The internal retirement benefit and supplemental retirement benefit expenses and amount of liabilities are
determined according to various assumptions. These assumptions include the discount rate, average growth rate of
medical expenses, subsidy growth rate of early retirement personnel and retiree and other factors. The differences
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
between the actual results and assumptions will be confirmed and included into the current expense during
occurrence. Although the management thinks it has adopted reasonable assumptions, the changes in actual
empirical values and assumptions will still affect the internal retirement benefit and supplemental retirement
benefit expenses and the balance of liabilities.
(10) Fair value measurement
Some assets and liabilities of the Company are calculated in financial statement according to the fair value. The
board of directors of the Company has established the Valuation Committee (led by CFO of the Company), in
order to determine the appropriate valuation technique and input value for fair value measurement. The Company
adopts obtained observable market data when estimating the fair value of some assets or liabilities. In case of
failing to get the first level of input value, the Company will employ the third-party qualified appraisers to conduct
the valuation. The Valuation Committee cooperates closely with external qualified appraisers, to determine the
appropriate valuation technique and the input value of related models. CFO submits the Valuation Committee’s
findings to the board of directors of the Company every quarter so as to give the reasons for fluctuation of fair
value of related assets and liabilities. The information about valuation technique and input value adopted in the
process of determining the fair value of various assets and liabilities is disclosed in Note X.
V. Tax
1. Main tax type and tax rate
Tax type Taxation basis Tax rate
The balance is VAT after incomes from selling goods, taxable
VAT labor service income and taxable service income calculated 3%, 5%, 6%, 11%, 13%, 17%
according to the tax law minus current deductable input VAT.
Urban maintenance and
Tax levying according to VAT paid actually 7%
construction tax
Tax levying according to VAT and consumption tax paid
Education surcharges 3%
actually
Tax levying according to VAT and consumption tax paid
Local education surcharges 2%
actually
Corporate income tax According to taxable income 10%, 25%
According to 70% of original value of house property (or
House property tax rental income) as the tax base; according to the deduction of 1.2%, 8%, 12%
30% of original value of house property
Land value increment tax According to the house payment 1.5%
Description of the income tax rates and tax subjects of different enterprises:
Tax subject Income tax rate
Linan Chunmanyuan Agricultural Development Co., Ltd. 10%
BGG Singapore International Trading Co., Ltd. 0%
2. Tax preference and approval
The four-level subsidiary of the Company, Hangzhou Linan Angel Food Co., Ltd. is a welfare enterprise. It
enjoyed the VAT immediate levy and refund preferential policy of RMB 35,000 per person per year for the
disabled in 2015 and January to April, 2016, and the VAT limit immediate levy and refund preferential policy in
the Notice about the Preferential Policy of Promoting the Employment VAT for the Disabled (CS [2016] No.52) in
May, 2016.
The four-level subsidiary of the Company, Hangzhou Linan Angel Food Co., Ltd. complies with the relevant
regulations of the Notice about the Preferential Policy of Corporate Income Tax for Employment of the Disabled
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
(CS [2009] No.70) issued by Ministry of Finance and State Administration of Taxation: if the enterprise arranges
the disabled, on the basis of deduction of salary of disabled workers, the tax can be deducted from full salary of
disabled workers paid when calculating the taxable income.
The two-level subsidiary of the Company, BGG Singapore International Trading Co., Ltd. levies according to the
territorial principle. Except for individual cases, the tax needs to be paid for the incomes in or from Singapore. If
the operation and management of the Company is conducted in Singapore, the Company should be taken as a
resident enterprise in Singapore. The standard corporate tax in Singapore is 17%, and the new company enjoys tax
exemption in full in the first three consecutive audit years, less than SGD 100,000: tax rate 0; SGD
100,001-300,000: tax rate 8.5%; more than SGD 300,000: tax rate 17%.
VI. Notes to items of consolidated financial statement
Unless otherwise specified, in the following noted items (including notes to major items of the financial statement):
the beginning of the year refers to January 1, 2017; the end of the period refers to December 31, 2017; the current
period refers to Year 2017; and the previous period refers to Year 2016.
1. Monetary funds
Items Balance at end of the period Balance at beginning of the year
Cash on hand 119,766.22 1,359,814.42
Cash in bank 937,214,125.42 553,213,251.10
Other monetary funds 77,104,771.79 98,297,174.39
Total 1,014,438,663.43 652,870,239.91
The restricted monetary funds are as follows:
Items Balance at end of the period Balance at beginning of the year
Time deposit or call deposit for pledge 49,330,000.00
Futures margin 93,062,392.10
Total 142,392,392.10
2. Derivative financial assets
Items Balance at end of the period Balance at beginning of the year
Futures contract 176,699,298.60 66,667,426.60
Total 176,699,298.60 66,667,426.60
Note: (1) In order to avoid the risk of commodity prices during spot trading, the company designated commodity
futures contracts as hedging instruments to meet the requirement of specified conditions for commodity futures
hedging. The company has adopted the following hedging accounting method prescribed in the Interim Provisions
on Accounting Treatment of Hedging Business for Commodity Futures (CH [2015] No. 18) as of January 1, 2016,
and will not adopt hedge accounting method mentioned above any more.
(2) The company's derivative financial assets are soybean oil and soybean meal futures contracts purchased by the
company.
(3) As of December 31, 2017, the third-level subsidiary has pledged the warehouse receipt as deposit in futures
company to the exchange, covering an amount of RMB 10,493,000.00, which is a restricted asset.
3. Accounts receivable
(1) Accounts receivable disclosed on a category basis
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Balance at end of the period
Category Book balance Bad debt provisions
Book value
Amount Ratio (%) Amount Ratio (%)
Accounts receivable with large amount and
separately-accrued bad debt provision
Accounts receivable with bad debt provision accrued
based on credit risk characteristics portfolio
Portfolio 1 – Accounts receivable analyzed based on
72,814,580.29 482,408.18 72,332,172.11
aging
Portfolio 2- Accounts receivable of Related parties 2,832,955.00 2,832,955.00
Total Portfolio 75,647,535.29 99.45 482,408.18 0.64 75,165,127.11
Accounts receivable with small amount and
420,575.29 0.55 420,575.29 100.00
separately-accrued bad debt provision
Total 76,068,110.58 100.00 902,983.47 __ 75,165,127.11
(Continued)
Balance at beginning of the year
Category Book balance Bad debt provisions Book value
Amount Ratio (%) Amount Provision ratio (%)
Accounts receivable with large amount and
separately-accrued bad debt provision
Including: 1- Accounts receivable of Related parties 17,606,991.96 17,606,991.96
2- Accounts receivable of other units 8,856,207.60 8,856,207.60
Total amount of signal items with large amount 26,463,199.56 27.30 8,856,207.60 33.47 17,606,991.96
Accounts receivable with bad debt provision accrued
based on credit risk characteristics portfolio
Portfolio 1 - Accounts receivable analyzed based on
68,029,415.90 2,116,276.26 65,913,139.64
aging
Total Portfolio 68,029,415.90 70.18 2,116,276.26 3.11 65,913,139.64
Accounts receivable with small amount and
2,443,566.31 2.52 2,443,566.31 100.00
separately-accrued bad debt provision
Total 96,936,181.77 100.00 13,416,050.17 __ 83,520,131.60
①Accounts receivable in the portfolio with bad debt provision accrued based on aging analysis method
Balance at end of the period
Aging
Accounts receivable Bad debt provisions Provision ratio (%)
Within 1 year
Including: within credit period 63,757,518.38
Credit period - 1 year (including 1 year) 8,010,976.05 160,219.52
1-2 years 534,198.10 26,709.91
2-3 years 167,345.26 33,469.05
3-4 years 107,802.00 53,901.00
4-5 years 143,159.00 114,527.20
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Balance at end of the period
Aging
Accounts receivable Bad debt provisions Provision ratio (%)
Over 5 years 93,581.50 93,581.50
Total 72,814,580.29 482,408.18 __
Continued:
Balance at beginning of the year
Aging
Accounts receivable Bad debt provisions Provision ratio (%)
Within 1 year
Including: within credit period 40,531,256.32 421.94
Credit period - 1 year (including 1
16,777,186.79 571,066.85 2/5
year)
1-2 years 6,313,060.52 338,493.52 5/10
2-3 years 1,297,209.67 176,969.17 10/20
3-4 years 1,401,816.40 319,439.33 20/50
4-5 years 964,057.30 299,492.83 30/80
Over 5 years 744,828.90 410,392.62 50/100
Total 68,029,415.90 2,116,276.26 __
(2) Bad debt provision for accrual, recovery or reversal in current period
The bad debts provision accrued in this period was -115,087.71 yuan.
(3) Assets disposal in the current period
Items Reduced original value due to assets disposal
Accounts receivable original value due to assets disposal 28,233,692.29
Total 28,233,692.29
Including: major assets disposal indication:
If the cost is
Nature of
Write-off incurred due to
Unit name accounts Reasons for writing off
amount a related
receivable
transaction?
Hunan Railway Lianchuang Technology Material assets
Property costs 3,646,668.90 No
Development Company reorganization and disposal
Material assets
Xinhe (Zhengzhou) Real Estate Co., Ltd. Property costs 3,525,276.00 No
reorganization and disposal
Material assets
Hainan Racing Entertainment Co., Ltd. Housing fund 2,406,158.00 No
reorganization and disposal
Material assets
Hainan Baoping Company Housing fund 2,218,494.43 No
reorganization and disposal
Material assets
Hainan Zhongyuan Property Agency Housing fund 2,090,069.77 No
reorganization and disposal
Material assets
Dahailin Forestry Bureau Heating cost 1,938,167.31 No
reorganization and disposal
Reception Center of Dahailin Forestry Heating cost 974,470.00 Material assets No
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
If the cost is
Nature of
Write-off incurred due to
Unit name accounts Reasons for writing off
amount a related
receivable
transaction?
Bureau reorganization and disposal
Total 16,799,304.41
(4) Top 5 Accounts receivable of balance at end of the period classified based on the debtors
Balance of accounts Proportion of balance of Balance of bad debt
Debtor name receivable at end of accounts receivable at provisions at end of
the period end of the period (%) the period
Guangdong Huamei Oil&Fat Co. LTD. 17,460,839.09 22.95
Beijing Wumart Business Group Co., Ltd. 15,745,236.80 20.70 51,961.02
Misimi Restaurant Management (Tianjin)
4,962,924.73 6.52 70,588.97
Co., Ltd.
Shanghai Laiyifen Co., Ltd. 3,652,963.82 4.80
Jinjiang Metro Cash & Carry Co., Ltd. 2,868,179.67 3.77
Total 44,690,144.11 58.74 122,549.99
4、Prepayments
(1) Prepayments are listed by age
Balance at end of the period Balance at beginning of the year
Aging
Amount Ratio (%) Amount Ratio (%)
Within 1 year 912,778,989.71 99.99 68,533,060.76 48.95
1-2 years 64,499.99 0.01 8,155,278.97 5.82
2-3 years 570,000.00 0.41
Over 3 years 62,761,186.00 44.82
Total 912,843,489.70 — 140,019,525.73 —
Note: 7,050,161.00 yuan of bad debts provision accrued in the previous year is included in the balance at
beginning of year RMB 140,019,525.73. The net book value at the beginning of the period is 132,969,364.73
yuan.
(2) Top 5 prepayment of balance at end of the period classified based on the debtors
Balance at end of Proportion of prepayment
Unit name
the period balance at end of the period (%)
Sinograin Oil&Fat Co. LTD. 566,987,397.77 62.11
Trading Coordination Center of State Administration of Grain 91,354,120.86 10.01
GLENCORE AGRICULTURE B.V. 83,154,229.20 9.11
Hebei Grease repository Ltd 29,300,000.00 3.21
Sinograin Tianjin Wuqing Repository 27,289,080.00 2.99
Total 798,084,827.83 87.43
5. Interest receivable
(1) Interest receivable classification
Items Balance at end of the period Balance at beginning of the year
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Items Balance at end of the period Balance at beginning of the year
Time deposit 2,657,591.11 1,467,468.00
Interest on corporate borrowing 2,710,880.79
Total 2,657,591.11 4,178,348.79
6. Dividends receivable
Project (or invested company) Balance at end of the period Balance at beginning of the year
Hainan Zhujiang Tubular Pile Co., Ltd. 260,015.00
Total 260,015.00
7. Other accounts receivable
Disclosure of other accounts receivable by category
Balance at end of the period
Book balance Bad debt provisions
Category
Provision ratio Book value
Amount Ratio (%) Amount
(%)
Other accounts receivable with large
amount and separately-accrued bad debt
provision
Other accounts receivable with bad debt
provision accrued based on credit risk
characteristics portfolio
Portfolio 1 - Accounts receivable analyzed
75,440,422.35 3,271,112.88 72,169,309.47
based on aging
Portfolio 2- Accounts receivable of
200.00 200.00
Related parties
Total Portfolio 75,440,622.35 98.80 3,271,112.88 4.34 72,169,509.47
Other accounts receivable with small
amount and separately-accrued bad debt 919,039.29 1.20 24,000.00 2.61 895,039.29
provision
Total 76,359,661.64 100.00 3,295,112.88 __ 73,064,548.76
(Continued)
Balance at beginning of the year
Book balance Bad debt provisions
Category
Provision Book value
Amount Ratio (%) Amount ratio (%)
Other accounts receivable with large amount and
separately-accrued bad debt provision
Including: 1- Accounts receivable of other units 53,159,496.14 53,159,496.14
Total amount of signal items with large amount 53,159,496.14 10.38 53,159,496.14 100.00
Other accounts receivable with bad debt provision accrued
based on credit risk characteristics portfolio
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Balance at beginning of the year
Book balance Bad debt provisions
Category
Provision Book value
Amount Ratio (%) Amount ratio (%)
Portfolio 1 - Accounts receivable analyzed based on aging 452,694,414.78 97,526,256.53 355,168,158.25
Total Portfolio 452,694,414.78 88.39 97,526,256.53 21.54 355,168,158.25
Other accounts receivable with small amount and
6,306,529.63 1.23 4,419,080.30 70.07 1,887,449.33
separately-accrued bad debt provision
Total 512,160,440.55 100.00 155,104,832.97 __ 357,055,607.58
① Other accounts receivable in the portfolio with bad debt provision accrued based on aging analysis method
Balance at end of the period
Aging
Other accounts receivable Bad debt provisions Provision ratio (%)
Within 1 year
Including: within credit period 7,649,440.63
Credit period - 1 year
5,371,206.90 107,424.14
(including 1 year)
1-2 years 62,361,774.82 3,118,088.74
2-3 years 3,000.00 600.00
3-4 years
4-5 years 50,000.00 40,000.00
Over 5 years 5,000.00 5,000.00
Total 75,440,422.35 3,271,112.88 __
Continued:
Balance at beginning of the year
Aging
Other accounts receivable Bad debt provisions Provision ratio (%)
Within 1 year
Including: within credit period 3,602,861.56 57,383.61
Credit period - 1 year
190,823,127.62 3,827,850.90 2/5
(including 1 year)
1-2 years 22,370,295.89 1,128,928.30 5/10
2-3 years 497,956.54 49,795.66 10/20
3-4 years 31,339,904.84 6,267,980.97 20/50
4-5 years 79,190,585.34 23,758,175.60 30/80
Over 5 years 124,869,682.99 62,436,141.49 50/100
Total 452,694,414.78 97,526,256.53 __
② Other accounts receivable with bad debt provision accrued by the related parties in the portfolio
Balance at end of the period
Name of portfolio Other accounts Bad debt Provision ratio
receivable provisions (%)
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Balance at end of the period
Name of portfolio Other accounts Bad debt Provision ratio
receivable provisions (%)
BGG (Hong Kong) International Trade Co., Ltd. 200.00
Total 200.00
(2) Bad debt provision for accrual, recovery or reversal in current period
The bad debts provision accrued in this period was 2,621,995.29 yuan.
(3) Assets disposal in the current period
Items Reduced original value due to assets disposal
Other accounts receivable due to assets disposal and writing off 707,311,680.90
Total 707,311,680.90
Including: major assets disposal indication:
If the cost is
Write-off incurred due to
Unit name Nature of funds Reasons for writing off
amount a related
transaction
Material assets reorganization
Zhonghe Investment Co., Ltd. Project funds 90,400,000.00 No
and disposal
Beijing Kangtai Xingye Project & Current Material assets reorganization
102,500,000.00 No
Investment Co., Ltd. account and disposal
Lionview Global Investment Material assets reorganization
Project 50,000,000.00 No
Ltd. and disposal
Material assets reorganization
CHINA GREAT LAND HOLD Current account 17,829,105.34 No
and disposal
Beijing Runshun Technology Material assets reorganization
Current account 41,780,000.00 No
Development Co., Ltd. and disposal
Total 302,509,105.34
(4) Classification of other accounts receivable based on nature of funds
Book balance at beginning
Nature of funds Book balance at end of the period
of the period
Current account of related parties 200.00
Reserve (employees, departments) 214,904.46 44,419.00
Margin, deposit 1,777,074.61 2,759,866.35
Current account of the units 72,031,790.95 1,423,036.35
Current account of the individuals 53,306.67
Amount due from employees 380,963.06 1,047,359.61
Tax refund receivable 1,901,402.00 996,002.00
Other accounts receivable of previous subsidiaries 505,835,674.29
Other payments 19.89 54,082.95
Total 76,359,661.64 512,160,440.55
(5) Top 5 other accounts receivable of balance at end of the period classified based on the debtors
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Proportion of balance of Bad debt provisions
Nature of Balance at end
Unit name Aging other accounts receivable Balance at end of
funds of the period
at end of the period (%) the period
Beijing Runshun Technology Current
55,940,000.00 1-2 years 73.26 2,797,000.00
Development Co., Ltd. account
Zhangjiagang Free Trade Zone Current
4,500,000.00 1-2 years 5.89 225,000.00
Taiying Trade Co., Ltd. account
Beijing Yangu Grain & Oil Current Within 3
3,994,626.33 5.23
Trading Company account months
Misimi Restaurant
Current
Management (Tianjin) Co., 3,362,879.27 Within 1 year 4.40 37,511.95
account
Ltd.
Sanya Wanjia Hotel Current
1,768,933.18 1-2 years 2.32 86,026.62
Management Co., Ltd. account
Total — 69,566,438.78 — 91.10 3,145,538.57
8. Inventory
(1) Classification of inventory
Balance at end of the period
Items Inventory falling price
Book balance Book value
reserves
Raw materials 368,354,117.16 173,907.66 368,180,209.50
Revolving material 3,027,491.97 3,027,491.97
Merchandise inventory 632,073,799.20 3,065,580.89 629,008,218.31
Developed products 16,497,730.12 11,673,694.67 4,824,035.45
Goods in transit 140,113,625.93 140,113,625.93
Commissioned processing 615,202.96 7,520.05 607,682.91
Reserve oil round storage 248,197,500.00 248,197,500.00
Total 1,408,879,467.34 14,920,703.27 1,393,958,764.07
(Continued)
Balance at beginning of the year
Items
Book balance Falling price reserve Book value
Raw materials 246,352,662.81 246,352,662.81
Revolving material 3,371,857.03 3,371,857.03
Merchandise inventory 234,447,016.86 3,226,601.64 231,220,415.22
Cost of development 42,701,132.90 17,439,325.19 25,261,807.71
Developed products 290,815,415.14 21,726,889.27 269,088,525.87
Others 81,186.14 81,186.14
Total 817,769,270.88 42,392,816.10 775,376,454.78
(2) Inventory falling price reserve
Items Balance at Increase in the current period Decrease in the current period Balance at end
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
beginning of the of the period
Accrual Other Revert or resell Other
year
Raw materials 173,907.66 173,907.66
Merchandise inventory 3,226,601.64 2,055,241.01 2,216,261.76 3,065,580.89
Commissioned
7,520.05 7,520.05
processing
Developed products 21,726,889.27 5,234,010.48 15,287,205.08 11,673,694.67
Cost of development 17,439,325.19 17,439,325.19
Total 42,392,816.10 7,470,679.20 2,216,261.76 32,726,530.27 14,920,703.27
(3) The basis for the accrual of inventory falling price reserves and the reason for the reversal or resell in the
current period
① Raw materials: Packings in raw materials are accrued as impairment provision because they are idle for too
long.
② Merchandise inventory and Commissioned processing and Developed products:. The net realizable value at the
end of the period is lower than the inventory cost, and the provision for impairment is calculated. Merchandise
inventory will be sold in the current period, and the sale price of inventory will be sold off.
③ Other decreases in the current period are reorganized and disposed inventories.
（4）A description of the Inventory
The book value of inventory used for mortgage at end of the period is RMB 4,824,035.45, as detailed in VI, 56.
9. Non-current assets due within one year
Balance at end of the Balance at beginning
Items Note
period of the year
Financial products that expire within one year 51,000,000.00
Total 51,000,000.00
10. Other current assets
Items Balance at end of the period Balance at beginning of the year
Financial products 106,000,000.00 341,300,400.00
Prepaid taxes 455,289.48 8,714,139.07
Deductible VAT input tax 59,411,949.22 38,397,184.06
Changes in fair value of hedging item 36,131,183.22
Others 239,717.41
Total 165,867,238.70 424,782,623.76
11. Available-for-sale financial assets
(1) Available-for-sale financial assets
Balance at end of the period Balance at beginning of the year
Items Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
Available-for-sale
30,500,000.00 10,500,000.00 20,000,000.00 49,263,555.29 18,438,560.39 30,824,994.90
equity instruments
Including: Measured
30,500,000.00 10,500,000.00 20,000,000.00 49,263,555.29 18,438,560.39 30,824,994.90
by cost
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Balance at end of the period Balance at beginning of the year
Items Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
Total 30,500,000.00 10,500,000.00 20,000,000.00 49,263,555.29 18,438,560.39 30,824,994.90
(2) Available-for-sale financial assets measured by cost at end of the period
Book balance
Invested units Increase in the Decrease in the
Year Begin. Period End
current period current period
Hainan Zhujiang Tubular Pile Co., Ltd. 426,315.00 426,315.00
Hainan General Chamber of Commerce 500,000.00 500,000.00
Zhongwang Cuke Technology Investment Co., Ltd. 10,000,000.00
10,000,000.00
Hainan Huadi Zhujiang Foundation Engineering
160,000.00 160,000.00
Co., Ltd.
Guangzhou Zhujiang Investment Management Co.,
18,177,240.29 18,177,240.29
Ltd.
Huaqing Xinxing Construction Project Management
(Beijing) Co., Ltd.（Note ①）
Chongqing Longjinbao Network Technology Co.,
20,000,000.00 20,000,000.00
Ltd.
Shenzhen Futongdai Financial Services Co., Ltd.
（Note ②）
Total 49,263,555.29 18,763,555.29 30,500,000.00
Continued:
Provision for impairment Proportion
of shares Current
Increase in Decrease in
Invested units held in cash
Year Begin the current the current Period End
invested bonus
period period
units (%)
Hainan Zhujiang Tubular Pile Co.,
426,315.00 426,315.00 1.33
Ltd.
Hainan General Chamber of
500,000.00 500,000.00 6.67
Commerce
Zhongwang Cuke Technology
10,000,000.00 10.00
Investment Co., Ltd. 10,000,000.00
Hainan Huadi Zhujiang Foundation
160,000.00 160,000.00 1.07
Engineering Co., Ltd.
Guangzhou Zhujiang Investment
7,352,245.39 7,352,245.39 9.48
Management Co., Ltd.
Huaqing Xinxing Construction
Project Management (Beijing) Co., 20.00
Ltd.
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Provision for impairment Proportion
of shares Current
Increase in Decrease in
Invested units held in cash
Year Begin the current the current Period End
invested bonus
period period
units (%)
Chongqing Longjinbao Network
10.96
Technology Co., Ltd.
Shenzhen Futongdai Financial
20.00
Services Co., Ltd.
Total 18,438,560.39 7,938,560.39 10,500,000.00 —
Note: ①As of the financial reporting date, Huaqing Xinxing Construction Project Management (Beijing) Co.,
Ltd. has not yet started operation.
②As of the date of this financial report, Shenzhen Futongdai Financial Services Co., Ltd. has agreed that the
company's capital reduction is still under way.
12、Long-term equity investment
Changes in this period
Balance at Investment gains Other
Changes
Invested units beginning of the Additional Reduced and losses comprehensive
in other
year investment investment recognized under income
equity
the equity method adjustment
I. Cooperative enterprises
Beijing Zhengda Feed Co., Ltd. 47,378,437.06 11,557,639.12
Sanya Wanjia Industrial Co.,
32,393,800.55 -1,070,860.45
Ltd.
Beijing Discovery Vision Media
1,472,844.43 -177,150.57
Co., Ltd.
Subtotal 81,245,082.04 10,309,628.10
II. joint venture
Sinograin (Tianjin) Storage &
90,220,232.86 2,033,392.70 23,400,000.00
Logistics Co., Ltd.
Subtotal 90,220,232.86 2,033,392.70 23,400,000.00
Total 171,465,314.90 12,343,020.80 23,400,000.00
(Continued)
Changes in this period Balance of
Declaring Provision for Balance at end impairment
Invested units
distribution of cash impairment Others of the period provision at end of
dividends or profits accrued the period
I.Cooperative enterprises
Beijing Zhengda Feed Co.,
58,936,076.18
Ltd. (50%)
Sanya Wanjia Industrial Co.,
-31,322,940.10
Ltd.
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Changes in this period Balance of
Declaring Provision for Balance at end impairment
Invested units
distribution of cash impairment Others of the period provision at end of
dividends or profits accrued the period
Beijing Discovery Vision
-1,295,693.86
Media Co., Ltd.
Subtotal -32,618,633.96 58,936,076.18
II. joint venture
Sinograin (Tianjin) Storage &
115,653,625.56
Logistics Co., Ltd.
Subtotal 115,653,625.56
Total -32,618,633.96 174,589,701.74
13. Investment real estate
(1) Investment real estate adopting cost measurement mode
Construction in
Items Houses, buildings Land use rights Total
progress
I. Original book value
1. Balance at beginning of the year 65,752,949.46 65,752,949.46
2. Increase in the current period
3. Decrease in the current period 23,118,329.83 23,118,329.83
(1) Other transfer-out 23,118,329.83 23,118,329.83
4. Balance at end of the period 42,634,619.63 42,634,619.63
II. Accumulated depreciation & amortization
1. Balance at beginning of the year 13,181,670.30 13,181,670.30
2. Increase in the current period 1,620,113.86 1,620,113.86
(1) Accrual or amortization 1,620,113.86 1,620,113.86
3. Decrease in the current period 7,629,860.87 7,629,860.87
(1) Other transfer-out 7,629,860.87 7,629,860.87
4. Balance at end of the period 7,171,923.29 7,171,923.29
III. Provision for impairment
1. Balance at beginning of the year 3,081,199.41 3,081,199.41
2. Increase in the current period
3. Decrease in the current period 2,627,355.69 2,627,355.69
(1) Other transfer-out 2,627,355.69 2,627,355.69
4. Balance at end of the period 453,843.72 453,843.72
IV. Book value
1. Book value at end of the period 35,008,852.62 35,008,852.62
2. Book value at beginning of the year 49,490,079.75 49,490,079.75
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
(2) Amount of investment real estate without property ownership certificate and the reason for failure to obtain
such certificate
Items Book value Reason for failure to obtain the property ownership certificate
House buildings 436,642.45 Affiliated houses without property ownership certificate
(3) A description of the Investment real estate
The book value of investment real estate used for mortgage at end of the period is RMB
6,081,230.93, as detailed in VI, 56.
14. Fixed assets
(1) Fixed assets
Houses and Mechanical Transportation Electronic Office
Items Other equipment Total
buildings equipment Equipment equipment equipment
I. Original book value
1. Balance at
1,236,143,116.54 292,983,928.06 48,407,424.08 10,268,136.85 22,806,015.06 386,818,973.73 1,997,427,594.32
beginning of the year
2. Increase in the
70,591,038.96 51,812,574.66 414,280.30 2,179,199.96 689,971.47 3,853,501.44 129,540,566.79
current period
(1) Purchase 1,038,448.73 9,971,844.57 253,923.30 2,019,400.70 366,188.47 3,633,943.44 17,283,749.21
(2) Construction in
12,228,994.23 18,322,178.09 30,551,172.32
progress transfer-in
(3) Other transfer-out 57,323,596.00 23,518,552.00 160,357.00 159,799.26 323,783.00 219,558.00 81,705,645.26
3. Decrease in the
235,709,028.28 2,294,920.63 24,857,459.61 153,037.57 21,500,871.50 27,854,610.02 312,369,927.61
current period
(1) Disposal or scrap 7,000.00 2,294,920.63 807,342.17 153,037.57 38,794.37 3,301,094.74
(2) Other transfer-out 235,702,028.28 24,050,117.44 21,500,871.50 27,815,815.65 309,068,832.87
4. Balance at end of
1,071,025,127.22 342,501,582.09 23,964,244.77 12,294,299.24 1,995,115.03 362,817,865.15 1,814,598,233.50
the period
II. Accumulated
depreciation
1. Balance at
229,593,941.82 84,775,164.08 35,456,042.84 5,851,799.20 9,008,913.88 114,961,177.24 479,647,039.06
beginning of the year
2. Increase in the
35,931,924.87 24,654,428.43 1,364,554.47 2,004,487.98 325,681.02 23,876,789.46 88,157,866.23
current period
(1) Accrual 35,931,924.87 24,654,428.43 1,364,554.47 2,004,487.98 325,681.02 23,876,789.46 88,157,866.23
3. Decrease in the
40,713,533.58 1,843,095.61 20,030,790.74 144,004.93 8,358,326.69 24,378,050.46 95,467,802.01
current period
(1) Disposal or scrap 4,639.59 1,843,095.61 770,618.63 144,004.93 31,692.73 2,794,051.49
(2) Other transfer-out 40,708,893.99 19,260,172.11 8,358,326.69 24,346,357.73 92,673,750.52
4. Balance at end of
224,812,333.11 107,586,496.90 16,789,806.57 7,712,282.25 976,268.21 114,459,916.24 472,337,103.28
the period
III. Provision for
impairment
1. Balance at
7,594,745.13 1,472,079.04 5.50 3,169.31 9,069,998.98
beginning of the year
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Houses and Mechanical Transportation Electronic Office
Items Other equipment Total
buildings equipment Equipment equipment equipment
2. Increase in the
109,094.18 109,094.18
current period
3. Decrease in the
4,360.41 320,574.10 5.50 3,169.31 328,109.32
current period
4. Balance at end of
7,590,384.72 1,260,599.12 8,850,983.84
the period
IV. Book value
1. Book value at end
838,622,409.39 233,654,486.07 7,174,438.20 4,582,016.99 1,018,846.82 248,357,948.91 1,333,410,146.38
of the period
2. Book value at
998,954,429.59 206,736,684.94 12,951,375.74 4,413,168.34 13,797,101.18 271,857,796.49 1,508,710,556.28
beginning of the year
(2) Temporarily idle fixed assets
Items Original book value Accumulated depreciation Provision for impairment Book value
Houses and buildings 326,474.79 210,140.73 100,010.32 16,323.74
Mechanical equipment 9,639,063.63 6,802,819.20 1,251,345.56 1,584,898.87
Transportation tools 70,000.00 67,200.00 2,800.00
Electronic equipment 42,529.05 40,341.05 2,188.00
Office equipment 135,863.29 98,746.85 37,116.44
Other equipment 15,484.53 14,533.06 332.04 619.43
Total 10,229,415.29 7,233,780.89 1,351,687.92 1,643,946.48
(3) Fixed assets without property ownership certificate
Items Book value Reason for failure to obtain the property ownership certificate
Failure to obtain the property ownership certificate is because the fixed
House buildings 1,953,950.03 assets is used for storage of special equipment and sundries and used as the
other supporting house for operation.
House buildings 15,594,518.14 Property ownership certificate handling procedure is in process.
Total 17,548,468.17
(4) A description of the Fixed assets
The book value of fixed assets used for mortgage at end of the period is RMB 3,173,896.16, as detailed in VI, 56.
15. Construction in progress
(1) Construction in progress
Balance at end of the period Balance at beginning of the year
Items Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
Equipment installation
12,436,003.53 2,436,003.53 30,550,403.37 30,550,403.37
engineering
Technical renovation 301,669.48 301,669.48 690,785.18 690,785.18
Snow Country train No. 550 5,648,964.09 3,000,000.00 2,648,964.09
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Balance at end of the period Balance at beginning of the year
Items Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
Snow Country train No. 400 4,180,000.00 2,000,000.00 2,180,000.00
Snow Country in the early
360,000.00 360,000.00
period
Snow Country
Comprehensive Service 73,340,730.93 73,340,730.93
Center
Total 12,737,673.01 12,737,673.01 114,770,883.57 5,360,000.00 109,410,883.57
(2) Changes of important projects under construction in the current period
Balance at Increase in the Amount of fixed Other decrease in
Balance at end
Name of project beginning of the current period assets transferred -in amount during this
of the period
year Amount during this period period
Grain & Oil project in Tianjin 1,484,243.56 1,484,243.56
Second factory walnut cake
6,012,364.65 1,013,117.03 2,719,079.23 5,745.00 4,300,657.45
production line
2 sets of molding equipment 1,960,000.00 980,000.00 980,000.00
2 sets of ovens 4,700,000.00 2,350,000.00 2,350,000.00
Food conveyor line 881,000.00 881,000.00
Second factory baked potato
386,309.72 949,405.80 233,000.00 1,102,715.52
production line
Snow Country Comprehensive
73,340,730.93 73,340,730.93
Service Center
Total 88,764,648.86 1,962,522.83 6,282,079.23 73,346,475.93 11,098,616.53
16. Intangible assets
(1) Intangible assets
Items Software Land use rights Trademark right Others Total
I. Original book value
1. Balance at beginning of the year 4,808,630.43 307,784,769.21 154,025,646.68 911,400.00 467,530,446.32
2. Increase in the current period 65,810.06 14,209,383.76 909,453.32 15,184,647.14
(1) Purchase 65,810.06 65,810.06
(3) Others 14,209,383.76 909,453.32 15,118,837.08
3. Decrease in the current period 1,464,906.11 3,832,251.40 93,900.00 249,000.00 5,640,057.51
(1) Disposal
(2) Others 1,464,906.11 3,832,251.40 93,900.00 249,000.00 5,640,057.51
4. Balance at end of the period 3,409,534.38 318,161,901.57 154,841,200.00 662,400.00 477,075,035.95
II. Accumulated amortization
1. Balance at beginning of the year 2,948,208.90 36,169,042.83 24,299,295.54 63,416,547.27
2. Increase in the current period 577,819.44 6,651,125.40 8,618,556.09 15,847,500.93
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Items Software Land use rights Trademark right Others Total
(1) Accrual 576,839.83 6,378,341.27 7,713,606.96 14,668,788.06
(2) Others 979.61 272,784.13 904,949.13 1,178,712.87
3. Decrease in the current period 1,180,138.92 491,047.90 24,257.50 1,695,444.32
(1) Others 1,180,138.92 491,047.90 24,257.50 1,695,444.32
4. Balance at end of the period 2,345,889.42 42,329,120.33 32,893,594.13 77,568,603.88
III. Provision for impairment
1. Balance at beginning of the year 911,400.00 911,400.00
2. Increase in the current period
3. Decrease in the current period 249,000.00 249,000.00
(1) Disposal 249,000.00 249,000.00
4. Balance at end of the period 662,400.00 662,400.00
IV. Book value
1. Book value at end of the period 1,063,644.96 275,832,781.24 121,947,605.87 398,844,032.07
2. Book value at beginning of the year 1,860,421.53 271,615,726.38 129,726,351.14 403,202,499.05
17. Goodwill
Decrease in the
Balance at Increase in the current period
Name of invested units or matters current period Balance at end
beginning of the
creating goodwill Created due to of the period
year Others Disposal Others
business combination
Acquired Equity of Zhejiang
191,394,422.51 191,394,422.51
Xiaowangzi Food Share Co.,Ltd.
Total 191,394,422.51 191,394,422.51
Note: Creation of goodwill of the company mainly lies in acquisition of equity of Zhejiang Xiaowangzi Food
Share Co.,Ltd.
(2) The process and parameter for impairment testing of goodwill, and confirmation method of impairment loss of
goodwill
The company determined all the assets of Zhejiang Xiaowangzi Food Share Co.,Ltd. as an assets group, which is
able to recover amount calculated as per present value of future cash flow of the assets group based on the cash
flow forecast in the next 5 years. In the impairment test, the key data such as estimated selling price, sales cost, and
other related expenses of the products used in the cash flow forecast are determined based on the company's
historical experience and forecasts of market development. The discount rate used for cash flow forecast is
determined by reference to the time value of the current market currency and the specific risk of the relevant assets
group. The company’s test of the recoverable amount of the above goodwill indicates that there has been no
impairment loss on goodwill.
18、Long-term deferred expenses
Balance at Deferred expenses Other
Increase in the Balance at end
Items beginning of in the current decrease in
current period of the period
the year period amount
Renovation costs incurred by the original
733,485.03 278,707.32 454,777.71
subsidiary
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Balance at Deferred expenses Other
Increase in the Balance at end
Items beginning of in the current decrease in
current period of the period
the year period amount
Reconstruction of of Majuqiao Plant of
17,535,559.18 676,613.19 16,858,945.99
Guchuan Edible oil Company
Eisen Lvbao house reconstruction 287,330.77 48,543.18 238,787.59
Lin'an Chunman Garden land rental fee 5,422,464.00 112,968.00 5,309,496.00
Decoration of office buildings of Guchuan
3,753,450.72 3,753,450.72
Edible oil Company
Suzhou Gongfujia Animation Production 8,737,864.10 8,737,864.10
Payment to Hualian Store for decoration fee 424,244.97 28,283.00 395,961.97
Macao Center shop decoration fee 466,320.40 31,088.04 435,232.36
Peace Joy City decoration fee 1,322,174.59 88,144.96 1,234,029.63
Longde Plaza Store fire protection
39,239.64 1,962.00 37,277.64
engineering cost
Rental fees of Snow Country 300,000.00 300,000.00
Snow country publicity costs 5,133.53 5,133.53
Snow Country pond usage fee 266,059.02 266,059.02
Snow Country ski resort fee 429,285.31 429,285.31
Yangcao Hill facility usage fee 230,000.00 230,000.00
Fees for use of amusement facilities at
120,000.00 120,000.00
Erlongshan Movie and Television City
Total 29,082,767.56 10,989,843.70 5,019,760.41 1,805,255.57 33,247,595.28
Note: See XIII. Commitments and Contingencies, 1. Major Commitments.
19. Deferred income tax assets/liabilities
(1) Details of deferred income tax assets without offsetting
Balance at end of the period Balance at beginning of the year
Items Deductible temporary Deferred income deductible temporary
Deferred income tax assets
difference tax assets difference
Provision for assets
5,601,872.74 1,400,468.18 6,061,788.11 1,515,447.03
impairment
Deductible loss 4,693,778.62 1,173,444.66 3,862,160.70 965,540.18
Changes in fair value of
financial assets measured 18,363,036.93 4,590,759.23 251,032.88 62,758.22
at fair value
Deferred income 1,800,000.00 450,000.00 2,250,000.00 562,500.00
Payroll payable 26,257,600.00 6,564,400.00 13,581,700.00 3,395,425.00
Anticipated loss 300,000.00 75,000.00
House payment received
19,941,945.99 4,985,486.50
in advance
Total 56,716,288.29 14,179,072.07 46,248,627.68 11,562,156.93
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
(2) Details of liabilities for deferred income tax assets without offsetting
Balance at end of the period Balance at beginning of the year
Items Taxable temporary Deferred income tax Taxable temporary Deferred income tax
differences liabilities differences liabilities
Valuation of financial instruments and
16,734,404.50 4,183,601.13 49,166,483.22 12,291,620.81
derivative financial instruments
The difference between the fair value
of the identifiable net assets and its net
208,008,300.08 52,002,075.02 221,225,724.76 55,306,431.19
book assets of the acquire recognized
by the business combination
Total 224,742,704.58 56,185,676.15 270,392,207.98 67,598,052.00
(3) Deferred income tax liabilities listed by net value after offsetting
Set-off amount Set-off amount Balance of deferred
Balance of deferred
between Deferred between Deferred income tax assets
income tax assets and
Items income tax assets and income tax assets and liabilities after
liabilities after offsetting
liabilities at end of the and liabilities at offsetting at
at end of the period
period beginning of the year beginning of the year
Deferred income tax liabilities 597,896.93
(4) Details of unrecognized deferred income tax assets without offsetting
Items Balance at end of the period Balance at beginning of the year
Deductible loss 14,294,910.78 228,496,280.69
Provision for assets impairment 33,984,154.44 248,748,431.39
Total 48,279,065.22 477,244,712.08
(5) Deductible loss of the unrecognized deferred income tax assets will expire in the following year
Balance at end of the Balance at beginning of
Year Note
period the year
2017 42,354,802.90
2018 52,373,550.83
2019 59,876,371.43
2020 5,769,102.97 45,878,171.41
2021 4,504,020.42 28,013,384.12
2022 4,021,787.39
Total 14,294,910.78 228,496,280.69
20. Other non-current assets
Items Balance at end of the period Balance at beginning of the year
Prepaid equipment and construction funds 3,277,634.07 2,937,595.80
Others 1,581,840.00
Total 3,277,634.07 4,519,435.80
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
21. Short-term loans
(1) Short-term loan classification
Items Balance at end of the period Balance at beginning of the year
Guaranteed loan 795,671,362.73 62,681,281.00
Credit loan 1,211,500,000.00
Total 2,007,171,362.73 62,681,281.00
22. Note payable
Category Balance at end of the period Balance at beginning of the year
bank's acceptance bill 83,154,229.20 35,358,929.55
Total 83,154,229.20 35,358,929.55
23. Accounts payable
(1) List of accounts payable
Items Balance at end of the period Balance at beginning of the year
Material cost payable 300,676,736.60 362,772,595.74
Project funds payable 941,089.67 66,235,450.46
Equipment funds payable 6,461,633.94
Margin of payment for goods 4,242,759.55 1,528,008.58
Balance payment of investment 5,000,000.00
Others 5,216,708.51 25,758,526.96
Total 317,538,928.27 461,294,581.74
24. Advances from customers
(1) List of advances from customers
Items Balance at end of the period Balance at beginning of the year
Sales revenue received in advance 211,148,248.97 221,160,746.20
Others 975,898.41 40,336.41
Taxi garage payment 26,697,103.84
Heating expense 1,673,048.13
Cooperative operation expense 2,487,649.01
Pre-deposit consumption funds 1,317,010.23
Property & Utilities costs 16,857,732.88
Heating facilities supporting fee 174,789.00
Presell house funds 316,499,198.66
Total 212,124,147.38 586,907,614.36
25. Payroll payable
(1) List of payroll payable
Balance at
Increase in the Decrease in the Balance at end of the
Items beginning of the
current period current period period
year
I. Short-term compensation 42,276,084.50 258,000,769.66 271,407,046.31 28,869,807.85
II. Post-employment Benefits - Defined
1,810,403.96 31,615,135.79 31,780,103.53 1,645,436.22
Withdrawal Plan
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Balance at
Increase in the Decrease in the Balance at end of the
Items beginning of the
current period current period period
year
III. Dismission welfare 487,747.33 3,672,040.78 3,913,000.65 246,787.46
IV. Other benefits due within one year
Total 44,574,235.79 293,287,946.23 307,100,150.49 30,762,031.53
(2) List of short-term compensation
Balance at beginning Increase in the Decrease in the Balance at end
Items
of the year current period current period of the period
1. Wages, bonuses, allowances and subsidies 24,517,810.48 213,326,638.91 214,372,137.43 23,472,311.96
2. Welfare expense of employee 7,967,052.89 7,967,052.89
3. Social insurance expenditure 1,638,861.63 17,404,617.62 17,718,753.06 1,324,726.19
Including: Medical insurance premiums 557,442.56 11,613,677.55 11,683,258.83 487,861.28
Work-related injury insurance premiums 101,230.41 1,516,990.54 1,374,366.88 243,854.07
Maternity insurance premium 51,392.49 857,731.34 860,147.20 48,976.63
Others 928,796.17 3,416,218.19 3,800,980.15 544,034.21
4. Housing accumulation fund 203,539.40 11,574,693.42 11,418,196.40 360,036.42
5. Labor Union Funds and Staff Education Funds 12,691,875.64 4,150,365.21 13,136,173.19 3,706,067.66
6. Other Short-term compensation 3,223,997.35 3,577,401.61 6,794,733.34 6,665.62
Total 42,276,084.50 258,000,769.66 271,407,046.31 28,869,807.85
(2) List of defined contribution plan
Balance at
Increase in the Decrease in the Balance at end of the
Items beginning of the
current period current period period
year
1. Basic endowment insurance 1,668,577.27 28,553,568.58 28,684,210.68 1,537,935.17
2. Unemployment insurance expense 72,484.11 992,075.61 1,009,125.87 55,433.85
3. Payment for enterprise annuity 69,342.58 2,069,491.60 2,086,766.98 52,067.20
Total 1,810,403.96 31,615,135.79 31,780,103.53 1,645,436.22
26. Taxes payable
Items Balance at end of the period Balance at beginning of the year
VAT 5,589,806.18 4,743,215.98
Business tax 1,037,501.70
Urban maintenance and construction tax 487,700.32 627,120.96
Corporate income tax 26,453,811.72 87,901,447.09
Property tax 1,543,662.49 1,619,296.80
Land use tax 73,972.59 681,483.77
Land value-added tax 29,383,815.46
Individual income tax 1,440,170.29 3,344,239.75
Education surcharge 194,075.05 270,669.50
Local education surcharge 160,997.53 94,140.82
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Items Balance at end of the period Balance at beginning of the year
Stamp duty 727,764.60 320,392.02
Others 183,178.41 133,911.78
Total 36,855,139.18 130,157,235.63
27. Interest payable
Items Balance at end of the period Balance at beginning of the year
Inter-enterprise loan interest other than related parties 71,842,734.54 78,636,495.54
Entrusted loan interest 10,449,888.49 10,449,888.49
Bank loan interest 3,771,588.28 925,182.87
Total 86,064,211.31 90,011,566.90
28. Dividends payable
Items Balance at end of the period Balance at beginning of the year
Legal person stock dividends payable 3,397,317.01 3,397,317.01
Total 3,397,317.01 3,397,317.01
29. Other payables
(1) List of other payables by nature of payment
Items Balance at end of the period Balance at beginning of the year
Borrowing and interest 47,777,345.69 353,508,342.24
Current account of related party 189,160,957.19
Current account of units 98,020,263.84 146,162,506.50
Current account of the individuals 131,535.46
Various kinds of insurance for workers 547,454.06 1,041,122.38
Employees loan payable 495,579.02 260,000.00
Margin, deposit 104,307,068.72 52,833,224.72
Warehouse rental, storage fees 658,680.00
Land transfer expense 43,000,000.00
Property expense collection trusted 46,986,947.42
Accrued expenses 7,394,338.41
Deferred compensation 1,140,466.00
Others 11,498,090.37 27,361,800.77
Total 451,938,294.35 680,347,428.44
(2) Other important payables with age over 1 year
Reasons for outstanding or
Items Balance at end of the period
carry over
Margin paid by Shareholders of Zhejiang Xiaowangzi Food Margin
15,330,000.00
Share Co.,Ltd.
Shanghai Shuangxiao Investment Management Center (limited Financial strain
18,800,800.00
partnership)
Sanya Wanjia Daisi Resort Hotel 11,404,670.60 Financial strain
Beijing Xinxing Real Estate Development Corporation 10,086,990.16 Financial strain
The project failed to pass
Henan Jingu Industrial Development Co., Ltd. 1,486,921.06
the acceptance check
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Reasons for outstanding or
Items Balance at end of the period
carry over
Tianjin Huiyue Labor Service Co., Ltd. 500,000.00 Margin
Total 57,609,381.824
30. Non-current liabilities due within one year
Items Balance at end of the period Balance at beginning of the year
Long-term loans due within one year
Among them: mortgage loan 15,000,000.00
Guaranteed loan 102,210,181.59
Total 117,210,181.59
31. Other current liabilities
Items Balance at end of the period Balance at beginning of the year
Changes in fair value of hedging item 90,215,292.43
Total 90,215,292.43
32. Long-term loans
Items Balance at end of the period Balance at beginning of the year
Pledge loan
Mortgage loan 29,000,000.00
Guaranteed loan 161,876,848.25
Subtotal 190,876,848.25
Less: Long-term loans due within one year 117,210,181.59
Total 73,666,666.66
33. Long-term payables
Balance at beginning of the
Items
Balance at end of the period year
Long-term payables 801,625.20
Total 801,625.20
34. Long-term payroll payable
(1) Long-term payroll payable table
Items Balance at end of the period Balance at beginning of the year
I. Post-employment Benefits - Net liabilities of the
defined benefit plan
II. Dismission welfare 533,609.91 728,551.15
III. Other long-term benefits 26,257,600.00 13,581,700.00
Total 26,791,209.91 14,310,251.15
35. Special payables
Balance at beginning Increase in the Decrease in the Balance at end
Items
of the year current period current period of the period
Oil tank electric heating system appropriation 290,975.24 290,975.24
EP production equipment, technology research
473,136.12 473,136.12
and technology demonstration for edible oil
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Balance at beginning Increase in the Decrease in the Balance at end
Items
of the year current period current period of the period
Oil tank Maintenance Fund 389,065.30 389,065.30
Total 1,153,176.66 1,153,176.66
36. Deferred income
Balance at
Increase in the Decrease in the Balance at end of Reason for generation of
Items beginning of the
current period current period the period income
year
governmental
81,063,077.48 1,334,111.36 3,435,216.17 78,961,972.67 Fiscal appropriation
subsidy
Total 81,063,077.48 1,334,111.36 3,435,216.17 78,961,972.67 —
Among them, projects involving government subsidies:
Subsidy projects Balance at Increase in Decrease in the current period
Balance at
Category beginning of the current Included in Included in Write down Other
end of the
the year period non-operating other costs and decrease
period
income income expenses in amount
Fiscal
Relocation compensation 5,771,457.24 384,763.82 5,386,693.42
appropriation
Special subsidies for technology Fiscal
2,250,000.00 450,000.00 1,800,000.00
innovation of production line appropriation
Special subsidies for investment in Fiscal
13,931,254.98 908,691.99 13,022,562.99
infrastructure appropriation
Foundation support for enterprise
in\"Administrative Committee of Fiscal
55,039,140.25 53,761,636.09
Tianjin Harbor Industry Park\" appropriation 1,277,504.16
During the construction period
Industrial Technology Reform
Park Construction Funds &
Fiscal
Science and Technology 2,981,481.41 222,222.24 2,759,259.17
appropriation
Expenditure of Tianjin Binhai New
Area
Fix assets generated by special
Fiscal
project of Guchuan Edible oil 1,089,743.60 77,838.84 1,011,904.76
appropriation
Company
Oil tank electric heating system Fiscal
290,975.24 58,195.08 232,780.16
appropriation appropriation
EP production equipment,
technology research and Fiscal
473,136.12 56,000.04 417,136.08
technology demonstration for appropriation
edible oil
Maintenance cost for dangerous Fiscal
570,000.00 570,000.00
and old warehouse appropriation
Total 81,063,077.48 1,334,111.36 3,435,216.17 78,961,972.67
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
37. Share capital
Changes in this period plus (+) less (-)
Balance at Balance at
Conversion of
Items beginning of New shares Shares end of the
accumulation Others Subtotal
the year offering distribution period
fund into shares
1. Shares with restricted
condition for sales
(1) State-owned shares
(2) State-owned legal person
236,216,509.00 236,216,509.00 236,216,509.00
holding shares
(3) Other domestic capital
1,325,131.00 22,828,451.00 -25,631.00 22,802,820.00 24,127,951.00
holding shares
Including:
Domestic legal person holding
1,299,500.00 22,828,451.00 22,828,451.00 24,127,951.00
shares
Domestic natural person holding
25,631.00 -25,631.00 -25,631.00
shares
(4) Foreign shareholding
Including:
Foreign legal person holding
shares
Foreign natural person holding
shares
Total shares with restricted
1,325,131.00 259,044,960.00 -25,631.00 259,019,329.00 260,344,460.00
condition for sales
2. Outstanding shares with
unlimited condition for sales
(1) Common stock RMB 360,445,273.00 25,631.00 25,631.00 360,470,904.00
(2) Domestically listed foreign
64,975,000.00 64,975,000.00
shares
(3) Foreign shares listed
overseas
(4) Others
Total outstanding shares with
425,420,273.00 25,631.00 25,631.00 425,445,904.00
unlimited condition for sales
Total 426,745,404.00 259,044,960.00 259,044,960.00 685,790,364.00
Note: The resolution passed by the company at the 30th meeting of 7th Board of Directors on July 29, 2016 and
the 2nd Interim Shareholders' Meeting on November 18, 2016 was passed and approved by the Securities
Regulatory Commission of China Securities Regulatory Commission through [2017] No. 1391 “Reply to Hainan
Zhujiang Holding Co., Ltd.’s Issuance of Shares to Beijing Grain Group Co., Ltd., etc to Purchase Assets and
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Raise Supporting Funds” , approved the company to increase capital by issuing shares and raising supporting funds:
①the company issued 115,912,190 shares to Beijing Grain Group Co., Ltd., issued 48,510,460 shares to Beijing
State-owned Capital Operation and Management Center, issued 22,828,451 shares to Guokai Financial Co., Ltd.,
and issued 22,828,451 shares to Xinniu Runying (Tianjin) Equity Investment Fund LLP. The total amount of
issuance of shares were 210,079,552 shares, which were verified and confirmed by “Capital Verification Report”
(Zhong Xing Hua Yan Zi (2017) No. 010117) issued by Zhongxinghua Certified Public Accountants LLP; ② The
company's new shares through non-public issuance are no more than 48,965,408, the issue price of which is 8.82
yuan/share, and the total amount of supporting funds raised will not exceed RMB 431,874,900. As of October 13,
2017, all the above funds raised have been put in place, and verified and confirmed by “Capital Verification
Report” (Zhong Xing Hua Yan Zi (2017) No. 010120) issued by Zhongxinghua Certified Public Accountants
LLP.
38. Capital reserve
Balance at beginning Increase in the Decrease in the Balance at end of
Items
of the year current period current period the period
Capital premium (capital stock
1,060,096,093.98 1,496,058,401.52 1,312,383,054.76 1,243,771,440.74
premium)
Transfer-in of capital reserve under
112,316,357.36 112,316,357.36
the original system
Other capital reserve 208,924,601.49 27,529,183.14 236,453,784.63
Total 1,381,337,052.83 1,523,587,584.66 1,312,383,054.76 1,592,541,582.73
Note: The changes in the capital reserve of the company are as follows: (1) The capital reserve formed by the
company's issuance of shares for the purchase of assets and collection of applicable funds in this year, amounting
to 1,496,058,401.52 yuan; (2) The capital reserve formed due to adjustment during the retroactive period for
merger of companies under the commom control of the company, amounting to 1,312,383,054.76 yuan; (3) The
capital reserve formed by disposal of major assets through restructuring, amounting to 27,529,183.14 yuan.
39. Surplus reserve
Balance at beginning Increase in the Decrease in the Balance at end of the
Items
of the year current period current period period
Statutory surplus reserve 84,487,609.05 84,487,609.05
Discretionary surplus reserve 37,634,827.93 37,634,827.93
Total 122,122,436.98 122,122,436.98
40. Undistributed profit
Items Amount in the current period Amount in the previous period
Undistributed profit at the end of the previous year
-547,123,017.26 -1,088,060,174.99
before adjustment
Total amount of undistributed profits at the beginning
of the adjustment period (plus + less -)
Undistributed profit at the beginning of the period after
-547,123,017.26 -1,088,060,174.99
adjustment
Plus: net profit attributable to shareholders of the parent
129,603,167.36 197,319,239.01
company during the current period
Less: withdrawal of statutory surplus reserve
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Withdrawal of discretionary surplus reserve
Withdrawal of generic risk reserve
Common stock dividends payable
Common stock dividends converted to share capital
Plus: Surplus reserves make up for losses
Other (formed by adjustment during the
retroactive period for merger of companies under the 118,408,149.56 343,617,918.72
common control of the company)
Undistributed profit at the end of the period -299,111,700.34 -547,123,017.26
41. Operating income and cost
Amount in the current period Amount in the previous period
Items
Income Cost Income Cost
Main business 7,867,860,792.55 7,167,956,134.14 8,680,959,461.20 7,833,594,096.52
Other business 49,778,251.58 13,372,318.44 42,532,196.11 13,910,203.11
Total 7,917,639,044.13 7,181,328,452.58 8,723,491,657.31 7,847,504,299.63
(1) Main business (on an industry or business basis)
Amount in the current period Amount in the previous period
Name of industry (or business)
Income Cost Income Cost
Oil and fat 6,533,461,558.85 6,242,894,698.91 5,008,707,145.46 4,753,210,308.09
Food manufacturing industry 829,093,442.40 581,010,692.16 784,133,600.93 554,034,346.57
Entrusted processing 11,932,194.08 15,831,580.89 28,232,658.50 30,932,749.61
Rotation of grain reserves 35,563,203.00 35,102,805.31
Transit shipment 6,487,277.74 2,695,225.67 3,742,883.52 732,476.11
Real estate development 267,712,458.14 155,065,841.68 659,767,503.67 433,257,352.54
Property management service 176,661,210.91 167,272,900.48 263,353,192.81 248,497,588.85
Tourism & hotel service 6,949,447.43 3,185,194.35 32,576,251.84 19,370,533.12
Trade income 1,865,343,419.16 1,793,558,741.63
Total 7,867,860,792.55 7,167,956,134.14 8,680,959,461.20 7,833,594,096.52
(2) Main business (on a region basis)
Amount in the current period Amount in the previous period
Name of region
Income Cost Income Cost
Beijing 2,284,362,571.64 2,016,441,282.38 3,293,176,174.89 3,010,889,255.47
Tianjin 4,303,392,217.59 4,225,251,929.43 3,704,166,979.75 3,608,119,746.32
Zhejiang 601,713,674.15 409,141,409.64 579,760,868.75 396,173,882.63
Shandong 51,895,234.78 45,885,054.28 41,917,207.62 36,248,189.83
Liaoning 114,647,176.24 88,324,952.20 106,241,281.87 81,037,547.76
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Amount in the current period Amount in the previous period
Name of region
Income Cost Income Cost
Hebei 60,526,801.67 56,656,928.52
Hainan 174,290,871.50 166,745,067.76 280,402,443.94 259,667,173.63
Heilongjiang 6,949,447.43 3,185,194.35 11,225,267.37 5,489,423.90
Hubei 268,027,180.78 155,208,349.16 660,419,643.88 433,942,801.66
Shanghai 2,055,616.77 1,115,966.42 3,649,593.13 2,026,075.32
Total 7,867,860,792.55 7,167,956,134.14 8,680,959,461.20 7,833,594,096.52
42. Tax and surtax
Items Amount in the current period Amount in the previous period
Business tax 32,013.47 33,718,940.62
Urban maintenance and construction tax 6,630,671.72 9,895,431.87
Education surcharge 3,104,569.54 5,278,608.85
Local education surcharge 1,525,118.90 1,966,928.75
Land value-added tax 22,375,467.16 45,045,123.53
Property tax 7,311,758.86 3,947,812.96
Land use tax 1,374,665.53 870,120.03
Vehicle and vessel use tax 51,081.96 17,308.72
Stamp duty 4,519,040.11 1,788,439.39
Other taxes and fees 1,405,472.06 3,637,238.14
Total 48,329,859.31 106,165,952.86
Note: Please refer to Note V. Taxes for details of payment standard concerning various taxes and surtaxes.
43. Sales expenses
Amount in the current Amount in the previous
Items
period period
Employee compensation (including wages, bonuses, welfare fees,
55,932,036.38 54,622,356.82
allowances, five social insurance and one housing fund, etc.)
Advertising expense 5,947,655.16 1,825,544.95
Repair charge 1,358,366.74 1,818,105.00
Packing expense 559,123.41 369,164.19
Worker’s insurance expense 1,078,970.62 3,796,125.71
Transportation expense 20,381,939.96 40,446,687.87
Handling charge 820,634.48 3,687,576.71
Utilities cost 2,338,735.74 1,487,265.26
Vehicle cost 1,623,972.05 1,879,518.20
Warehouse custodian fee 10,523,679.41 9,570,566.78
Test & inspection cost 398,037.44 476,378.97
Business insurance expense 547,189.06 295,940.14
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Amount in the current Amount in the previous
Items
period period
Cost of sales promotion 35,441,585.31 25,951,497.52
Business entertainment 742,942.10 23,458,554.90
Labor protection fee 218,584.27 28,046.61
Commodity wastage 744,458.02 1,438,818.25
Sample and product wastage 5,944,033.74 9,010,360.06
Service charge for sales by proxy 11,675.00
Sales and service charge 4,910,000.00 16,690,000.00
Depreciation cost 16,056,593.33
Travel expense 7,494,585.28
Operational funds 9,528,015.06
Other expense 2,103,032.02 20,613,633.27
Total 184,694,169.58 217,477,816.21
44. Administration expense
Amount in the current Amount in the previous
Items
period period
Employee compensation (including wages, bonuses, welfare fees,
127,153,175.93 134,657,156.61
allowances, five social insurance and one housing fund, etc.)
Worker’s insurance expense 670,625.85 3,497,375.13
Company funds 4,172,827.84 17,955,330.32
Business insurance expense 1,174,261.82 621,066.95
Vehicle cost 4,245,679.03 3,647,877.80
Depreciation cost 24,139,281.64 41,146,143.09
Repair charge 2,259,750.04 3,697,014.61
Expense-based tax 320,300.97 7,370,349.95
Amortization of assets 17,020,197.51 21,305,021.83
Material consumption 772,549.15 659,968.30
Agency hiring fee 25,389,014.63 26,921,407.15
Scientific and research expense 1,549,995.96 2,006,259.19
Information network fee 1,132,559.52 683,904.05
Labor protection fee 614,848.07 837,748.29
Environmental protection expenditure 770,534.92 877,367.05
Safety protection expense 495,870.77 337,057.10
Conference expense 665,576.07 1,778,664.84
Business entertainment 3,408,439.70 4,562,181.34
Travel expense 2,755,755.78 3,009,801.24
Office expense 1,882,855.50 1,619,870.11
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Amount in the current Amount in the previous
Items
period period
Rental expense 9,498,782.54 1,050,842.66
Consulting service fee 2,042,800.68 2,488,630.30
Other expense 4,208,666.81 13,999,404.53
Total 236,344,350.73 294,730,442.44
45. Financial expense
Items Amount in the current period Amount in the previous period
Interest expense 60,010,600.72 105,897,104.09
Less: interest income 24,528,341.57 12,986,446.31
Financial consultant fee 7,907,727.19
Financial charge 246,394.04
Exchange gain or loss -5,917,601.92 -821,742.92
Service charge 2,148,312.68 745,028.58
Others 305,829.37 672,618.83
Total 32,018,799.28 101,660,683.50
46. Assets impairment loss
Items Amount in the current period Amount in the previous period
Bad debt loss 2,496,907.58 64,670,016.32
Loss on inventory depreciation 7,470,679.20 2,937,452.16
Loss on impairment of Construction in
583,333.33 1,360,000.00
progress
Loss on impairment of available-for-sale
-5,413,685.00
assets
Loss on impairment of fixed assets 51,187.38 1,570,703.06
Total 10,602,107.49 65,124,486.54
47. Income from fair value variation
Amount in the current Amount in the previous
Source of income for generation of fair value variation
period period
Financial assets measured at fair value and changes of which included
12,934,641.69 35,975,331.06
in current profit and loss
Including: income from fair value variation arising from derivative
12,934,641.69 35,975,331.06
financial instruments
Total 12,934,641.69 35,975,331.06
48. Income from investment
Amount in the current Amount in the previous
Items
period period
Long-term equity investment income accounted for by the equity
12,343,020.80 9,807,740.63
method
Investment income from disposal of long-term equity investment 203,943.97 236,628,972.26
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Amount in the current Amount in the previous
Items
period period
Income from investment in financial assets measured at fair value and
changes of which included in current profit and loss during holding -1,294,068.24 -1,364.00
period
Income from investment through disposal of financial assets measured
9,842,560.10 139,708.24
at fair value and changes of which included in current profit and loss
Investment income from disposal of wealth management products 4,488,253.49 4,560,858.68
Other benefits 104,787.15
Total 25,583,710.12 251,240,702.96
49. Asset disposal income
Amount included in the
Amount in the previous non-recurring gains and
Items Amount in the current period
period losses in the current
period
ToTAL income from disposal of
-6,770.67 17,918,094.06 -6,770.67
non-current assets
Including: income from disposal of fixed
-6,770.67 17,831,110.16 -6,770.67
assets
Income from disposal of
86,983.90
intangible assets
Total -6,770.67 17,918,094.06 -6,770.67
50. Other income
Amount included in the
Amount in the current Amount in the previous
Items non-recurring gains and losses in
period period
the current period
Governmental subsidy related to
15,139,922.81 12,915,889.46 5,556,362.81
daily business activities
Total 15,139,922.81 12,915,889.46 5,556,362.81
Among them, details concerning governmental subsidy are as follows:
Amount in the Amount in the Related to assets /
Subsidy projects
current period previous period incomes
Relocation compensation 384,763.82 384,763.82 Related to assets
Special subsidies for technology innovation of production Related to assets
450,000.00 450,000.00
line
Special subsidies for investment in infrastructure 908,691.99 910,563.05 Related to assets
Foundation support for enterprise in\"Administrative Related to assets
Committee of Tianjin Harbor Industry Park\" During the 1,277,504.16 1,277,504.16
construction period
Industrial Technology Reform Park Construction Funds Related to assets
& Science and Technology Expenditure of Tianjin Binhai 222,222.24 222,222.24
New Area
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Amount in the Amount in the Related to assets /
Subsidy projects
current period previous period incomes
Fix assets generated by special project of Guchuan Edible Related to assets
77,838.84
oil Company
Oil tank electric heating system appropriation 58,195.08 Related to assets
EP production equipment, technology research and Related to assets
56,000.04
technology demonstration for edible oil
Subsidies for financial elimination of boiler 120,000.00 Related to incomes
Subsidy for technological reform by Lin'an Economic and Related to incomes
483,600.00
Information Bureau in 2016
Subsidy for boiler improvement by Lin'an Jinnan Financial Related to incomes
450,000.00
Department
Financial subsidy for food security 30,000.00 Related to incomes
Subsidy for boiler improvement 570,000.00 Related to incomes
land tax deduction and exemption 256,000.00 250,000.00 Related to incomes
Funds subsidy for technical reform project 181,600.00 Related to incomes
Subsidy for stabling employment 29,946.64 176,652.43 Related to incomes
Infrastructure construction subsidy 867,385.00 Related to incomes
Water conservancy construction fund relief 88,191.76 Related to incomes
Land tax refund 573,575.31 Related to incomes
Income from VAT refund 9,583,560.00 7,715,031.69 Related to incomes
Total 15,139,922.81 12,915,889.46 ——
51. Non-operating income
Amount included in the
Amount in the current Amount in the previous
Items non-recurring gains and losses in
period period
the current period
governmental subsidy 69,818.00 2,430,626.00 69,818.00
Gains from property verification 8.26 3,749.60 8.26
Gains from donation 35,800.00 35,800.00
Income from claim 230,078.50 660,659.78 230,078.50
Tax refund 67,445.03 67,445.03
Compensation for demolition 22,523,945.85 58,388,492.95 22,523,945.85
Other benefits 2,791,149.54 1,866,900.23 2,791,149.54
Total 25,718,245.18 63,350,428.56 25,718,245.18
Among them, details concerning governmental subsidy are as follows:
Amount in the Amount in the Related to assets /
Subsidy projects
current period previous period incomes
Financial incentive for more placement of the disabled
26,020.00 30,250.00 Related to incomes
persons by Lin'an Municipal Bureau of Finance
Subsidy for grain in case of emergency 18,000.00 Related to incomes
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Amount in the Amount in the Related to assets /
Subsidy projects
current period previous period incomes
Bonus on export by Business Council 25,798.00 2,400.00 Related to incomes
Financial subsidy to grain collection & storage companies
30,000.00 Related to incomes
for storage of circulating grains
Subsidy granted by Lin'an Municipal Bureau of Finance for
400,000.00 Related to incomes
leading enterprises
Subsidy granted by Hangzhou Municipal Science and
3,000.00 Related to incomes
Technology Bureau for patents
Support funds granted by Shunyi Houshayu People's 711,800.00
Related to incomes
Government for enterprises
Beijing Municipal Environmental Protection Bureau 19,500.00 Related to incomes
Financial assistance for substitution of robots 411,600.00 Related to incomes
Subsidy granted by Municipal Finance Bureau for
100,000.00 Related to incomes
development of e-commerce in rural areas
Compensation for demolition of land for construction
722,076.00 Related to incomes
project of friendship hospital
Total 69,818.00 2,430,626.00
52. Non-operating expenditure
Amount included in the
Amount in the current Amount in the previous non-recurring gains and
Items
period period losses in the current
period
External donation 38,500.00 161,249.58 38,500.00
Asset retirement, damage loss 278,048.34 344.00 278,048.34
Amercement outlay 29,126.42 11,466.86 29,126.42
Compensation and liquidated damages 928,136.64 12,718,930.47 928,136.64
Demolition loss 15,749,062.93 15,724,954.74 15,749,062.93
Other expenses 2,017,718.48 1,631,427.98 2,017,718.48
Total 19,040,592.81 30,248,373.63 19,040,592.81
53. Income tax expense
(1) Income tax expense table
Items Amount in the current period Amount in the previous period
Income tax expense in the current period 91,667,682.68 122,973,244.86
Deferred income taxes expense -15,776,517.61 5,615,781.15
Others 63,005.65
Total 75,954,170.72 128,589,026.01
(2) Accounting profit and income tax expense adjustment process
Items Amount in the current period
Total profit 284,650,461.48
Income tax expense calculated by statutory/applicable tax rate 71,162,615.37
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Effect of using different tax rates on subsidiaries 2,567.05
Effect of income tax in the period before adjustment 3,349,669.36
The impact of non-taxable income -41,693,617.24
Impact of non-deductible cost, expense and loss 35,618,560.21
Effect of using deductible loss of deferred income tax assets without prior confirmation 4,484,389.22
The impact of deferred income tax assets that is not recognized in the current period on
3,312,103.94
deductible temporary differences or deductible loss
Others -282,117.19
Income tax expense 75,954,170.72
54. Cash flow statement items
(1) Cash received relating to other operating activities
Amount in the previous
Items Amount in the current period
period
Current account of related parties 14,986,715.05 938,800.00
Current account of the units 1,031,613,303.60 870,222,674.23
Non-operating income 3,197,686.55 72,448,020.84
Interest income 5,153,293.07 8,226,263.94
Cash flow due to disposal of assets 45,578,965.01
Futures margin 76,904,449.18
Others 4,204,891.67 8,753,838.38
Total 1,181,639,304.13 960,589,597.39
(2) Cash paid relating to other operating activities
Amount in the current Amount in the previous
Items
period period
Current account between related parties 11,325,588.70 290,000.00
Other current account of the units 1,081,047,062.03 1,145,550,677.54
Administration expense 56,096,248.89 66,376,573.39
Operating expense 47,688,580.85 60,951,016.25
Non-operating expense 18,324,573.33 17,633,885.30
Payment of reserves 1,117,033.00 2,848,330.46
Bank service charge 1,399,464.20 1,338,359.44
Cash flow due to disposal of assets 112,176,278.67
Others 16,530,438.64 13,919,224.95
Total 1,345,705,268.31 1,308,908,067.33
(3) Cash received relating to other investment activities
Amount in the current Amount in the previous
Items
period period
Cash flow due to disposal of assets 49,136.10
Total 49,136.10
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
(4) Cash received relating to other financial activities
Amount in the current Amount in the previous
Items
period period
Borrowing and interest received from related parties 972,914,426.39
Others 103,855.25
Total 973,018,281.64
(5) Cash paid relating to other financial activities
Amount in the current Amount in the previous
Items
period period
Cash paid to related parties for interest on borrowings 1,720,000.00 166,309,674.23
Cash flow due to disposal of assets 9,126,000.00
Others 259,044.96 42,618.68
Total 1,979,044.96 175,478,292.91
55. Additional information on the cash flow statement
(1) Additional information on the cash flow statement
Additional information Amount in the current Amount in the
period previous period
1. Adjust new profit to cash flows from operating activities:
New profit 208,696,290.76 313,391,022.59
Plus: Provision for assets impairment 10,602,107.49 65,124,486.54
Depreciation of fixed assets, loss of oil and gas assets, and depreciation
100,488,015.47 115,330,986.35
of productive biological assets
Amortization of intangible assets 14,763,115.24 15,807,847.93
Amortization of long-term deferred expenses 5,992,729.57 3,756,928.58
Losses on disposal of fixed assets, intangible assets and other long-term
6,770.67 -18,681,009.88
assets (“-” means gains)
Losses on scrapping of fixed assets (“-” means gains) 273,173.63 344.00
Loss from fair value change (“-” means gains) -12,934,641.69 -35,975,331.06
Financial expense (“-” means gains) 51,387,508.31 95,505,767.28
Investment losses (“-” means gains) -25,583,710.12 -251,240,702.96
Decrease in deferred income tax assets (“-” means increase) -2,616,915.14 8,371,752.60
Increase in Deferred income tax liabilities (“-” means decrease) -10,832,755.26 3,092,868.68
Decrease in inventory (“-” means increase) -751,498,235.77 466,269,339.09
Decrease in receivables under operating activities (“-” means increase) -239,599,506.90 32,121,118.51
Increase in receivables under operating activities (“-” means decrease) -728,651,725.92 135,454,741.89
Others
Net cash flow from operating activities -1,379,507,779.66 948,330,160.14
2. Major investment and fund raising activities that do not involve cash
receipts and expenditures:
Conversion of debt into capital
Convertible corporate bonds due within one year
Financially-leased fixed assets
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Additional information Amount in the current Amount in the
period previous period
3. Net changes in cash and cash equivalents:
Cash at the beginning of the period 1,014,438,663.43 505,477,847.81
Less: cash at the beginning of the year 505,477,847.81 893,327,088.78
Plus: cash equivalents at the end of the period
Less: net increase in cash and cash equivalents
Net increase in cash and cash equivalents 508,960,815.62 -387,849,240.97
(2) Composition of cash and cash equivalents
Balance at end of the Balance at beginning of the
Items
period year
I. Cash 1,014,438,663.43 505,477,847.81
Including: Cash on hand 119,766.22 1,359,814.42
Bank deposits that can be used for payment at any time 937,214,125.42 410,820,859.00
Other monetary funds that can be used for payment at any time 77,104,771.79 93,297,174.39
Central bank deposits available for payment
Deposits in other banks
Call loans to banks
II. Cash equivalents
Among them: bond investments due within three months
III. Balance of cash and cash equivalents at the end of the period 1,014,438,663.43 505,477,847.81
Including: cash and cash equivalents used under restriction by the
parent company or within the group's subsidiaries
56. Assets with restricted ownership or use rights
Items Book value at the end of period Restricted reasons
Derivative financial assets 104,930,000.00 Pledge by warehouse receipts
Inventory 4,824,035.45 Mortgage against a loan
Investment real estate 6,081,230.93 Mortgage against a loan
Fixed assets 3,173,896.16 Mortgage against a loan
Total 119,009,162.54
57. Foreign currency monetary items
(1) Foreign currency monetary items
Foreign currency balance at Balance converted into RMB at
Items Exchange rate
the end of the period the end of period
Monetary funds 1,684,880.03 6.5342 11,009,343.09
Including: USD 1,684,880.03 6.5342 11,009,343.09
Prepayment 12,726,000.00 6.5342 83,154,229.20
Including: USD 12,726,000.00 6.5342 83,154,229.20
Short-term loans 63,890,585.34 6.5342 417,473,862.73
Including: USD 63,890,585.34 6.5342 417,473,862.73
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Foreign currency balance at Balance converted into RMB at
Items Exchange rate
the end of the period the end of period
Note payable 12,726,000.00 6.5342 83,154,229.20
Including: USD 12,726,000.00 6.5342 83,154,229.20
Other payables 30.61 6.5342 200.00
Including: USD 30.61 6.5342 200.00
(2) Explanation of Overseas Business Entity
The company’s overseas registered business unit is Beijing Grain Singapore International Trading Co., Ltd., with
its principal place of business located in Singapore and its bookkeeping base currency of USD.
58. Governmental subsidy
1. Basic information of government subsidies initially recognized in this period
Related to assets Related to incomes
Write down Non-ope Write down Received
Subsidy projects Amount Deferred Deferred Other
the book value rating costs and or not
income income income
of assets income expenses
Cost for maintenance of Warehouse
570,000.00 570,000.00
in Hebei Yes
Subsidies for financial elimination
120,000.00 120,000.00
of boiler Yes
Subsidy for technological reform by
Lin'an Economic and Information 483,600.00 483,600.00
Bureau in 2016 Yes
Subsidy for boiler improvement by
450,000.00 450,000.00
Lin'an Jinnan Financial Department Yes
Financial subsidy for food security 30,000.00 30,000.00 Yes
Subsidy for boiler improvement 570,000.00 570,000.00 Yes
land tax deduction and exemption 256,000.00 256,000.00 Yes
Funds subsidy for technical reform
181,600.00 181,600.00
project Yes
Financial incentive for more
placement of the disabled persons by 26,020.00
26,020.00
Lin'an Municipal Bureau of Finance Yes
Hebei-grain subsidy (on a currency
18,000.00
basis) 18,000.00 Yes
Bonus on export by Business
25,798.00
Council 25,798.00 Yes
Subsidy for stabling employment 29,946.64 29,946.64 Yes
VAT refund 9,583,560.00 9,583,560.00 Yes
Total 12,344,524.64 570,000.00 11,704,706.64 69,818.00 ——
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
2. Government subsidy included in the profit and loss in the current period
Included in Included in Write down costs
Subsidy projects Category
other income non-operating income and expenses
Relocation compensation Fiscal appropriation 384,763.82
Special subsidies for technology innovation of
450,000.00
production line Fiscal appropriation
Special subsidies for investment in
908,691.99
infrastructure Fiscal appropriation
Foundation support for enterprise
in\"Administrative Committee of Tianjin Harbor 1,277,504.16
Industry Park\" During the construction period Fiscal appropriation
Industrial Technology Reform Park
Construction Funds & Science and Technology 222,222.24
Expenditure of Tianjin Binhai New Area Fiscal appropriation
Fix assets generated by special project of
77,838.84
Guchuan Edible oil Company Fiscal appropriation
Oil tank electric heating system appropriation Fiscal appropriation 58,195.08
EP production equipment, technology research
56,000.04
and technology demonstration for edible oil Fiscal appropriation
Subsidies for financial elimination of boiler Fiscal appropriation 120,000.00
Subsidy for technological reform by Lin'an
483,600.00
Economic and Information Bureau in 2016 Fiscal appropriation
Subsidy for boiler improvement by Lin'an
450,000.00
Jinnan Financial Department Fiscal appropriation
Financial subsidy for food security Fiscal appropriation 30,000.00
Subsidy for boiler improvement Fiscal appropriation 570,000.00
land tax deduction and exemption Fiscal appropriation 256,000.00
Funds subsidy for technical reform project Fiscal appropriation 181,600.00
Bonus for over-proportion of placement Fiscal appropriation 26,020.00
Hebei-grain subsidy (on a currency basis) Fiscal appropriation 18,000.00
Bonus on export by Business Council Fiscal appropriation 25,798.00
Subsidy for stabling employment (on a
29,946.64
currency basis) Fiscal appropriation
VAT refund Fiscal appropriation 9,583,560.00
Total —— 15,139,922.81 69,818.00
VII. Changes in the scope of consolidation
1. Business combination under the common control
(1) Business under the common control combined in the current period
Basis for constitute of
Ratio of equity
business combination Basis for determination of
Name of combined parties obtained in business Combining date
under the common combining date
combination (%)
control
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Basis for constitute of
Ratio of equity
business combination Basis for determination of
Name of combined parties obtained in business Combining date
under the common combining date
combination (%)
control
Under the final control
Beijing Beijing Grain Closing agreement on major
100.00 of the same controlling 2017.7.31
Products Co., Ltd. assets reorganization
party
(Continued)
Income of the combined Net profit of the combined The income of the The net profit of the
party from the beginning party from the beginning combined party combined party
Name of combined parties
of the year to the of the year to the during the during the
combining date combining date comparison period comparison period
Beijing Beijing Grain
3,067,965,755.35 92,264,243.46 3,317,353,681.70 98,846,979.39
Products Co., Ltd.
(2) Combined cost
Beijing Beijing Grain Products Co.,
Combined cost
Ltd.
- Cash
- Book value of non-cash assets
- Book value of debt issued or assumed
- The nominal value of issued equity securities 210,079,552.00
- Contingent consideration
(3) Book value of assets and liabilities of the combined party on the combining date
Beijing Beijing Grain Products Co., Ltd.
Items
Combining date Amount at the end of previous year
Assets:
Monetary funds 732,381,333.59 406,365,888.52
Derivative financial assets 160,699,899.00 66,667,426.60
Accounts receivable 523,349,583.04 140,459,596.52
Inventory 710,833,019.85 477,508,647.73
Other current assets 292,572,558.70 416,068,484.69
Long-term equity investment 142,703,240.87 137,598,669.92
Investment real estate 29,475,874.93 30,245,298.95
Fixed assets 1,262,657,225.25 1,288,300,624.99
Construction in progress 24,186,993.84 31,241,188.55
Intangible assets 391,137,434.66 399,510,368.95
Goodwill 191,394,422.51 191,394,422.51
Long-term deferred expenses 30,842,125.71 26,998,804.67
Deferred income tax assets 8,351,745.02 6,576,670.43
Other non-current assets 2,937,595.80
Liabilities:
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Beijing Beijing Grain Products Co., Ltd.
Items
Combining date Amount at the end of previous year
Short-term loans 1,057,731,413.11 62,681,281.00
Payables 839,622,700.73 782,611,604.69
Payroll payable 11,125,986.35 32,181,419.50
Taxes payable 24,877,670.19 45,752,345.36
Non-current liabilities due within one year 38,500,000.00
Long-term payroll payable 20,422,151.15 14,310,251.15
Special payables 1,086,562.84 1,153,176.66
Deferred income 79,125,815.22 81,063,077.48
Deferred income tax liabilities 60,099,078.64 67,000,155.07
Net assets 2,406,494,078.74 2,496,620,377.92
Less: minority shareholders' equity 436,301,714.69 529,465,790.36
Net assets received 1,970,192,364.05 1,967,154,587.56
(4) Contingent liabilities of the combined party assumed in the business combination
None.
2. Disposal of subsidiaries
(1) Signal disposal of investment in subsidiaries, namely loss of control power over the subsidiaries Unit: Ten
thousand yuan
Difference of new assets share of
Equity Time when such subsidiary owned through
Equity disposal Equity disposal
Name of subsidiaries disposal losing of Basis for timing for loss of control disposal of price and consolidated
price method
ratio (%) control power financial statement in relating to
investment
Asset Stock Transfer Agreement; Board
Hainan Zhuhai Property
14,043,473.21 98.00 reorganization 2017.7.31 Resolution; Resolution of Shareholders' 7,128,606.19
Hotel Management Co., Ltd.
agreement transfer Meeting; Closing Agreement
Asset Stock Transfer Agreement; Board
Hubei Zhujiang Real Estate
159,597,844.66 89.20 reorganization 2017.7.31 Resolution; Resolution of Shareholders' 61,127,506.09
Development Co., Ltd.
agreement transfer Meeting; Closing Agreement
Asset Stock Transfer Agreement; Board
Shanghai Rongxin Real
42,793,128.01 100.00 reorganization 2017.7.31 Resolution; Resolution of Shareholders' 123,101,701.76
Estate Co., Ltd.
agreement transfer Meeting; Closing Agreement
Asset Stock Transfer Agreement; Board
Beijing Jiuhao Culture
0.00 100.00 reorganization 2017.7.31 Resolution; Resolution of Shareholders' 7,473,689.11
Development Co., Ltd.
agreement transfer Meeting; Closing Agreement
Mudanjiang Zhujiang Wanjia Stock Transfer Agreement; Board
Asset
Tourism Investment Resolution; Resolution of Shareholders'
0.00 100.00 reorganization 2017.7.31 214,993,964.76
Development Group Co., Meeting; Closing Agreement
agreement transfer
Ltd.
Hubei Zhengshi Qinghui Asset Stock Transfer Agreement; Board
Real Estate Development 0.00 51.00 reorganization 2017.7.31 Resolution; Resolution of Shareholders' 31,062,326.65
Co., Ltd. agreement transfer Meeting; Closing Agreement
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
(Continued)
Ratio of The book value The fair value Gains or losses Amount of profit of and
Determination method and
remaining of the of the arising from loss on investment
main assumptions of the
equity at the remaining remaining re-measurement transfered in by
Name of subsidiaries fair value of the remaining
date of loss of equity at the equity at the of the remaining comprehensive income
equity at the date of loss of
control power date of loss of date of loss of equity at fair related to the original
control power
(%) control power control power value subsidiary
Hainan Zhuhai Property
0.00 0.00 0.00 0.00 Not involved 0.00
Hotel Management Co., Ltd.
Hubei Zhujiang Real Estate
0.00 0.00 0.00 0.00 Not involved 0.00
Development Co., Ltd.
Shanghai Rongxin Real
0.00 0.00 0.00 0.00 Not involved 0.00
Estate Co., Ltd.
Beijing Jiuhao Culture
0.00 0.00 0.00 0.00 Not involved 0.00
Development Co., Ltd.
Mudanjiang Zhujiang
Wanjia Tourism Investment
0.00 0.00 0.00 0.00 Not involved 0.00
Development Group Co.,
Ltd.
Hubei Zhengshi Qinghui
Real Estate Development 0.00 0.00 0.00 0.00 Not involved 0.00
Co., Ltd.
3. Other reasons for change in the scope of combination
The company implemented internal resource integration under the overall planning of the HQ, agreed to liquidate
and deregister its four-level subsidiary, Zhejiang Xiaowangzi Food Share Co.,Ltd., based on the resolution adopted
by the company's shareholders’ meeting on April 30, 2017, and obtained the certificate of deregistration from the
industrial and commercial bureau on August 24,2017.
VIII. Equity in Other Subjects.
1. Equity in subsidiaries
(1) Composition of enterprise group
Shareholding ratio (%)
Principal place of Domicile of
Name of subsidiaries Business nature Direct Indirect Mode
business incorpor-ation
holding holding
Common control
Beijing Jingliang Food Co., Ltd. Beijing Beijing Investment company
M&A
Agricultural and sideline Common control
Jingliang (Tianjin) Grain and Oil Industry Co. Ltd. Tianjin Tianjin
products processing M&A
Common control
Beijing Jingliang Oil Co., Ltd. Beijing Beijing Grain and oil trade
M&A
Common control
Jingliang Xinchuang (Tianjin) Business Management Co. Ltd. Tianjin Tianjin Business services
M&A
Agricultural and sideline Common control
Jingliang (Hebei) Oil Industrial Co., Ltd. Hebei Hebei
products processing M&A
Common control
Beiiing Guchuan Edible OiI Co.,Ltd Beijing Beijing Grain and oil trade
M&A
Agricultural and sideline Common control
Beijing Eisen Lubao Oil Co., Ltd. Beijing Beijing
products processing M&A
Common control
Beijing Tianweikang Oil Distribution Center Co., Ltd. Beijing Beijing Warehousing
M&A
Common control
Beijing Guchuan Bakery Food Co., Ltd. Beijing Beijing Food processing
M&A
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Shareholding ratio (%)
Principal place of Domicile of
Name of subsidiaries Business nature Direct Indirect Mode
business incorpor-ation
holding holding
Common control
Jingliang Misimi Catering Management (Tianjin) Co., Ltd. Tianjin Tianjin Food processing
M&A
Common control
Misimi Hui Catering Management (Tianjin) Co., Ltd. Tianjin Tianjin Food sales
M&A
Common control
Misimi Ao Catering Management (Beijing) Co., Ltd. Beijing Beijing Food sales
M&A
Non-common
Zhejiang Little Prince Food Co., Ltd. Hangzhou Hangzhou Food processing 69.7716
Control M&A
Non-common
Hangzhou Lin'an Little Angel Food Co., Ltd. Hangzhou Hangzhou Food processing 69.7716
Control M&A
Non-common
Liaoning Little Prince Food Co., Ltd. Liaoning Liaoning Food processing 69.7716
Control M&A
Non-common
Linqing Little Prince Food Co., Ltd. Linqing Linqing Food processing 69.7716
Control M&A
Non-common
Lin'an Chunmanyuan Agricultural Development Co., Ltd. Hangzhou Hangzhou Food processing 69.7716
Control M&A
Established by
Jingliang Singapore International Trading Co., Ltd. Singapore Singapore Grain trade
investment
(2) Major non-wholly-owned subsidiaries
Gain and loss
Minority Dividends distributed to Balance of minority
attributable to minority
Name of subsidiaries shareholders’ minority shareholders shareholders’ equity at the end
shareholders during the
shareholding ratio (%) during the current period of the period
current period
Jingliang (Tianjin) Grain and Oil Industry Co., Ltd. 30 14,014,844.06 242,434,948.56
Zhejiang Little Prince Food Co., Ltd. 30.2284 28,950,979.77 6,944,385.43 207,753,849.43
Jingliang Misimi Catering Management (Tianjin) Co., Ltd. 49 -112,978.40 9,687,021.60
Jingliang Xinchuang (Tianjin) Business Management Co., Ltd. 49 759,049.55 5,559,049.55
Jingliang (Hebei) Oil Industrial Co., Ltd. 49 1,794,861.40 33,644,861.40
(3) Main financial information of major non-wholly-owned subsidiaries
Ending balance
Name of subsidiaries Non-current Non-current
Current assets Total assets Current liabilities Total liabilities
assets liabilities
Jingliang (Tianjin) Grain and Oil Industry Co., Ltd. 1,299,787,374.38 896,524,016.17 2,196,311,390.55 1,327,490,398.97 60,704,496.39 1,388,194,895.36
Zhejiang Little Prince Food Co., Ltd. 309,304,989.70 373,675,587.60 682,980,577.30 106,103,249.25 46,466,856.41 152,570,105.66
Jingliang Misimi Catering Management (Tianjin) Co., Ltd. 16,058,445.83 4,270,567.41 20,329,013.24 559,581.40 559,581.40
Jingliang Xinchuang (Tianjin) Business Management Co. Ltd. 81,900,543.34 750,679.10 82,651,222.44 71,301,496.27 71,301,496.27
Jingliang (Hebei) Oil Industrial Co., Ltd. 282,694,214.41 95,147,791.73 377,842,006.14 307,807,398.50 1,371,625.20 309,179,023.70
(Continued)
Beginning balance
Name of subsidiaries Non-current Current Non-current
Current assets Total assets Total liabilities
assets liabilities liabilities
Jingliang (Tianjin) Grain and Oil Industry Co., Ltd. 507,916,668.07 942,620,865.68 1,450,537,533.75 618,824,942.94 70,312,242.47 689,137,185.41
Zhejiang Little Prince Food Co., Ltd. 272,787,074.52 369,815,648.79 642,602,723.31 157,536,078.06 35,534,412.22 193,070,490.28
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Beginning balance
Name of subsidiaries Non-current Current Non-current
Current assets Total assets Total liabilities
assets liabilities liabilities
Jingliang Misimi Catering Management (Tianjin) Co., Ltd.
Jingliang Xinchuang (Tianjin) Business Management Co. Ltd.
Jingliang (Hebei) Oil Industrial Co., Ltd.
Continued:
Current amount
Name of subsidiaries Total consolidated Cash flows from
Operating income Net profits
income operating activities
Jingliang (Tianjin) Grain and Oil Industry Co., Ltd. 3,688,456,961.35 46,716,146.85 46,716,146.85 -363,764,675.67
Zhejiang Little Prince Food Co., Ltd. 771,331,947.29 103,851,312.21 103,851,312.21 82,659,601.58
Jingliang Misimi Catering Management (Tianjin) Co., Ltd. 6,576,016.95 -230,568.16 -230,568.16 -11,677,455.73
Jingliang Xinchuang (Tianjin) Business Management Co. Ltd. 787,720,715.22 1,549,726.17 1,549,726.17 -3,098,230.24
Jingliang (Hebei) Oil Industrial Co., Ltd. 64,100,717.77 3,662,982.44 3,662,982.44 -267,609,945.18
Continued:
Amount last year
Name of subsidiaries Total consolidated Cash flows from
Operating income Net profits
income operating activities
Jingliang (Tianjin) Grain and Oil Industry Co., Ltd. 3,709,639,282.67 32,486,333.35 32,486,333.35 223,283,382.95
Zhejiang Little Prince Food Co., Ltd. 731,067,857.58 91,892,742.83 91,892,742.83 155,159,527.99
Jingliang Misimi Catering Management (Tianjin) Co., Ltd.
Jingliang Xinchuang (Tianjin) Business Management Co. Ltd.
Jingliang (Hebei) Oil Industrial Co., Ltd.
2. Transactions resulting changes in shareholder’s equity in the subsidiary while the company still has
control over the subsidiary
1. Explanation of changes in the owner's equity in subsidiaries
On January 23, 2017, the company obtained the “Reply on Approval of Transfer of Zhejiang Foods Co., Ltd.
by Beijing Food Group Co., Ltd through Agreement” which was issued by State-owned Assets Supervision
Committee of Beijing Municipal People's Government and agreed Beijing Grain Group Co., Ltd transfer 9,674,511
shares (18.7636%) of Little Prince Food Co., Ltd. to Beijing Grain&Food Co., Ltd., and the transfer price based
on evaluation report of Tianyuankai Ping Bao Zi [2016] No. 1245- 1 provided by Tianyuankai Assets Appraisal
Co., Ltd. , and the total transfer loan is 204,524,900.00 yuan.
(2)Effect of Transaction on Minority Shareholders' equity and equity attributable to Parent Company
ITEMS Zhejiang Little Prince Food Co., Ltd.
Purchase cost consideration
- Cash 204,524,900.00
-- Fair value of non-cash assets
Total purchase cost consideration 204,524,900.00
Less: Shares of subsidiaries' net assets based on the proportion of shares acquired 115,298,430.77
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
ITEMS Zhejiang Little Prince Food Co., Ltd.
Difference 89,226,469.23
Including: capital reserves adjusting 89,226,469.23
Surplus reserves adjusting
Undistributed profit adjusting
3. Equity in joint ventures or associated enterprises
(1) Major joint ventures or associated enterprises
Shareholding ratio Accounting methods of
Name of joint ventures or associated Principal place of Domicile of Business (%) investments in joint
enterprises business incorporation nature Direct Indirect ventures or associated
holding holding enterprises
Beijing Shunyi Beijing Shunyi Manufacturing
Beijing Zhengda Feed Co., Ltd. 50.00 Equity method
District Niulanshan District Niulanshan enterprises
No. 1 Lingang No. 1 Lingang
Zhongchuliang Transportation
Economic Zone, Economic Zone,
(Tianjin)Warehouse&Logistics Co., and 30.00 Equity method
Binhai New Area, Binhai New Area,
Ltd. warehousing
Tianjin Tianjin
(2) Main financial information of major joint ventures
Ending balance/ current amount Beginning balance/amount of last period
ITEMS
Beijing Zhengda Feed Co., Ltd. Beijing Zhengda Feed Co., Ltd.
Current assets 65,265,065.01 56,939,429.03
Including: cash and cash equivalents 7,741,319.43 5,445,314.87
Non-current assets 112,237,685.88 80,806,631.03
Total assets 177,502,750.89 137,746,060.06
Current liabilities 67,305,652.33 50,261,126.63
Non-current liabilities 155,920.00
Total liabilities 67,305,652.33 50,417,046.63
Minority shareholders' equity
Shareholders' equity attributable to parent
110,197,098.56 87,329,013.43
company
Shares of net assets calculated according to
55,098,549.28 43,664,506.72
shareholding ratio
Adjusting events 3,713,930.34
- Goodwill
- Unrealized profits in inside transactions
- others 3,713,930.34
Book value of equity investment in joint ventures 58,936,076.18 47,378,437.06
Fair value of equity investment in joint ventures
with public offer
Operating income 396,853,669.74 366,109,292.57
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Ending balance/ current amount Beginning balance/amount of last period
ITEMS
Beijing Zhengda Feed Co., Ltd. Beijing Zhengda Feed Co., Ltd.
Financial expenses -1,423,338.05 -1,020,953.88
Income tax expenses 7,952,866.41 5,618,028.79
Net profits 23,115,278.24 16,650,820.37
Net profits from discontinued operations
Other consolidated income 150,150.00
Total consolidated income 23,265,428.24 16,650,820.37
Dividends from joint ventures received in this
period
(3) Main financial information of major associated enterprises
Ending balance/ current amount Beginning balance/amount of last period
ITEMS Zhongchuliang Zhongchuliang
(Tianjin)Warehouse&Logistics Co., Ltd. (Tianjin)Warehouse&Logistics Co., Ltd.
Current assets 76,297,906.27 53,431,134.70
Non-current assets 328,865,777.91 339,985,830.39
Total assets 405,163,684.18 393,416,965.14
Current liabilities 4,526,369.09. -763,544.31
Non-current liabilities 15,125,229.88 15,446,399.92
Total liabilities 19,651,598.97 14,682,855.61
Minority shareholders' equity
Shareholders' equity attributable to parent company 385,512,085.21 378,734,109.53
Shares of net assets calculated according to shareholding
115,653,625.56 113,620,232.85
ratio
Adjusting events
- Goodwill
- Unrealized profits in inside transactions
- others
Book value of equity investment in associated enterprises 115,653,625.56. 113,620,232.85
Fair value of equity investment in associated enterprises
with public offer
Operating income 33,461,596.58 29,408,567.42
Net profits 6,777,975.68 13,315,420.45
Net profits from discontinued operations
Other consolidated income
Total consolidated income 6,777,975.68 13,315,420.45
Dividends from associated enterprises received in current
year
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
IX. Risks related to financial instruments
The company's operating activities will face various financial risks, including credit risks, liquidity risks and
market risks (which mainly refer to interest rate risks). The company's overall risk management plan aims at
unpredictability of financial markets and seeks to reduce potential adverse impact on company's financial
performance.
(I) Credit risks
The company's credit risks mainly come from monetary funds, accounts receivable, other receivables and
available-for-sale financial assets. The management has established appropriate credit policies and will
continuously monitor the exposure of such credit risks.
The monetary funds held by the company are mainly deposited in financial institutions such as commercial
banks. The management believes that such commercial banks have higher creditworthiness and in good asset status
and have lower credit risks. The company adopts quota policy to circumvent credit risks of any financial
institution.
For accounts receivable and other receivables, the company sets relevant policies to control credit risk
exposure. The company evaluates credit quality of customers based on their financial status,possibility of obtaining
guarantees from third party, credit records and other factors such as current market conditions and sets
corresponding credit period. The company will regularly monitor customer credit records. For customers with bad
credit history, the company will use method such as sending written reminders, shorten the credit period or cancel
the credit period to ensure that the company's overall credit risk is within the controllable range.
The maximum credit risk exposure of the company is the carrying amount of each financial asset in the
balance sheet. Except for the financial guarantees made by the company as set out in the notes, the company did
not provide any other guarantee that may cause the company to bear the credit risk.
(II) Liquidity risks
Liquidity risk refers to the risk that the Company cannot obtain sufficient funds in time to meet business
development needs or repay debts and other payment obligations that are due.
The financial department of the company continuously monitors the short-term and long-term capital
requirements of the company to ensure that it will maintain sufficient cash reserves; meanwhile it continuously
monitors compliance with the provisions of the loan agreement and obtains commitments from major financial to
provide sufficient reserve funds to meet short-term and long-term financial needs.
As of December 31, 2017, the undiscounted contractual cash flows of various financial assets and financial
liabilities of the Company are listed as follows:
Ending balance
ITEMS Original book 1-2 2-5 Above 5
Book value Within 1 year
value years years years
Monetary funds 1,014,438,663.43 1,014,438,663.43 1,014,438,663.43
Accounts receivable 75,165,127.11 76,068,110.58 76,068,110.58
Other receivables. 73,064,548.76 76,359,661.64 76,359,661.64
Non-current
assets due within 1 51,000,000.00 51,000,000.00 51,000,000.00
year
Financial assets
20,000,000.00 30,500,000.00 30,500,000.00
available for sale
Subtotal 1,233,668,339.30 1,248,366,435.65 1,248,366,435.65
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Ending balance
ITEMS Original book 1-2 2-5 Above 5
Book value Within 1 year
value years years years
Short-term loan 2,007,171,362.73 2,007,171,362.73 2,007,171,362.73
Accounts payable 317,538,928.27 317,538,928.27 317,538,928.27
Other payables 451,938,294.35 451,938,294.35 451,938,294.35
Long-term loan
Subtotal 2,776,648,585.35 2,776,648,585.35 2,776,648,585.35
Continued:
Beginning balance
ITEMS
