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 theCompany’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 theCompany’s Directors have attended in person the Board meeting for the review of this Report.
No-standardauditor’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 ThirdRing Middle Road, Chaoyang District,Beijing|
|Office address||
|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 (a29.78% 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 (a21.64% 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 of83.33%, 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 produceR&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 of59.81% 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 of5.73%) with net income attributable to the Company (as the parent company) before non-recurring gains and losses being RMB70.6663 million (a50.08% 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 productR&D, intensified fine management and laid stress on channel expansion, and thus achieved annual sales revenue of RMB771 million, an increase of5.47% 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 for32.7% of the total sales revenue, playing a significant role in strategic driving effect. The newly introduced "DaiBu’Er", "12 Constellations" and "Daily Walnut" also won a good market response with a sales revenue accounting for29% 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 by8.5% and44% 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 StateCouncil’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|||2015||
||2017||||||
|||||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|129,603,167.36||197,319,239.01||||
|attributable to|||||||
|||73,300,570.54||-34.32%|-107,573,743.92|-20,028,834.34|
|shareholders of|||||||
|the listed|||||||
|company|||||||
|Net income|||||||
|attributable to|||||||
|shareholders of|||||||
|the listed|||||||
||63,818,849.21|-134,994,571.34|-72,109,287.22|225.52%|-237,953,658.00|-236,415,787.81|
|company|||||||
|before|||||||
|nonrecurring|||||||
|gains and|||||||
|losses|||||||
|Net cash flows|-1,379,507,779.66||948,330,160.14||||
|||257,914,814.62||-245.47%|259,599,625.38|1,052,914,971.80|
|from operating|||||||
|activities|||||||
|Basic earnings|0.2||0.31||||
|||0.17||-35.48%|-0.25|-0.03|
|per share|||||||
|(RMB/share)|||||||
|Diluted|0.2||0.31||||
|earnings per||0.17||-35.48%|-0.25|-0.03|
|share|||||||
|(RMB/share)|||||||

||||||||
|-|-|-|-|-|-|-|
|Weighted|||||||
||5.01%|0.00%|6.96%|-1.95%|0.00%|0.00%|
|average return|||||||
|on equity (%)|||||||
|||December 31, 2016,Before Restated||Change of|||
|||||December 31,|December 31, 2015||
||December 31||||||
|||||2017 over|||
|||||December 31,|||
||2017||||||
|||||2016|||
||||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|2,101,342,683.37|65,088,302.88|1,383,081,876.55||||
|attributable to|||||||
|||||51.93%|-217,136,869.15|984,066,397.14|
|shareholders of|||||||
|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 toshareholders of the listedcompany|29,668,391.83|30,000,740.02|42,164,080.63|27,769,954.88|
|Net income attributable toshareholders of the listedcompany before nonrecurringgains and losses|13,757,116.56|18,420,025.56|10,579,084.33|21,062,622.76|
|Net cash flows from operatingactivities|-124,811,091.49|-564,681,487.32|-305,046,738.32|-384,968,462.53|

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 theCompany’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
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|Commonshareholders at|||||||Preferred||||
|||Common|||Preferred||||||
||||||||shareholders with||||
||30,241|shareholders at||33,650|shareholders|0|resumed voting|||0|
|||month-end prior|||with resumed||||||
||||||||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||||||||||
|||||Shares|Restricted shares||||||
||||percentage at|||||Status|Shares||
|shareholder|shareholder||||||||||
||||period-end (%)||||||||
|BEIJING GRAINGROUP CO.,LTD.|State-ownedjuridical person||42.06%|288,439,561|164,877,598||||||
|BEIJINGSTATE-OWNEDCAPITALOPERATIONANDMANAGEMENTCENTER|State-ownedjuridical person||7.07%|48,510,460|48,510,460||||||
|CHINADEVELOPMENTBANK CAPITALCO., LTD.|State-ownedjuridical person||3.33%|22,828,451|22,828,451||||||
|GOLDBUFFALORUNYING(TIANJIN)EQUITYINVESTMENTFUND (L.P.)|Domesticnon-state-ownedjuridical person||3.33%|22,828,451|22,828,451||||||
|LI SHERYNZHAN MING|Foreign naturalperson||3.30%|22,620,168|0||||||
|MEI JIANYING|Domesticnatural person||0.38%|2,597,803|0||||||
|XU ZHEN|Domesticnatural person||0.37%|2,518,300|0||||||
|||||||||Frozen|1,550,000||
|ZHANGXIAOXIA|Domesticnatural person||0.28%|1,949,250|0||||||
|WANGXIAOXING|Domesticnatural person||0.27%|1,836,500|0||||||
|ZHONG YI|Domesticnatural person||0.25%|1,730,083|0||||||
||||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.|
||2. Shareholder Zhong Yi holds 1,730,083 shares in the Company through his account of|
|margin trading (if any)||
||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 ofPeople’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 thisReport’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 (a29.78% 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 (a21.64%
year-over-year increase); and the food processing division generated sales revenue of RMB829
million (a year-over-year increases of5.73%) with net income attributable to the Company (as the
parent company) before non-recurring gains and losses being RMB70.6663 million (a50.08% 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 which100% of purchased assets were placed into listed companies and93.46% 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 (a29.78% 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 (a21.64% 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 of83.33%, 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 productR&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 by23.18% 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 of59.81% 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 of5.73%) with net income attributable to the Company (as the parent company) before non-recurring gains and losses being RMB70.6663million (a50.08% 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 productR&D, intensified fine management and laid stress on channel expansion, and thus achieved annual sales revenue of RMB771 million, an increase of5.47% 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 for32.7% of the total sales revenue, playing a significant role in strategic driving effect. The newly introduced "DaiBu’Er", "12 Constellations" and "Daily Walnut" also won a good market response with a sales revenue accounting for29% 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 by8.5% and44% 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 over10% 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
TheCompany’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 BusinessEnterprises—Non-Current Assets and Disposal Groups Classified as Held for Sale and Discontinued Operations, the revised Accounting Standard No. 16 for BusinessEnterprises—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 theCompany’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 JingliangFood’s 14 trading subsidiaries and Beijing Grain Group, as approved by the State-owned Assets Supervision and Administration Commission ofPeople’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, theCompany’s consolidated financial statements included the aforesaid 14 trading companies for January-May 2016. July 31, 2017 was the settlement day for theCompany’s mater asset restructuring. According to the relevant restructuring agreements, since the settlement day, certain of theCompany’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 theCompany’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 valueand whose changes are included in the currentprofit 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 BalanceSheet（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 whosechanges 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 parentcompany||2,101,342,683.37|1,383,081,876.55|
|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|

LegalRepresentative：Wang Guofeng; Director in charge of theaccountancy：Guan Ying; Director of theAccounting：Liu Quanli
Consolidated Statement of Income
In 2017
Preparation Unit: Hainan Jingliang Holdings Co., Ltd. Monetary Unit: RMB
|||||
|-|-|-|-|
|Items|Notes|Amount of CurrentPeriod|Amount of Prior 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 (theloss shall be filled in with "-")|VI. 47|12,934,641.69|35,975,331.06|
|Income from investment (the lossshall be filled in with "-")|VI. 48|25,583,710.12|251,240,702.96|
|Including: the investment incomeof joint venture and cooperative enterprise||12,343,020.80|9,809,321.53|
|Asset disposal income (the lossshall be filled in with "-")|VI. 49|-6,770.67|17,918,094.06|
|Other incomes|VI. 50|15,139,922.81||
|III Operating Profit（the loss shall befilled in with "-"）||277,972,809.11|395,962,104.21|
|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 befilled in with "-"）||284,650,461.48|441,980,048.60|
|Minus: Income tax expense|VI. 53|75,954,170.72|128,589,026.01|
|V Net Profit （the net loss shall be filledin with "-"）||208,696,290.76|313,391,022.59|
|i Classification according to the BusinessContinuity:||||
|1. Continuous operating net profit (the netloss shall be filled in with "-")||195,974,221.49|232,484,589.36|
|2. Discontinued operating net profit (thenet loss shall be filled in with "-")||12,722,069.27|80,906,433.23|
|i i Classification according to theAttribution of the Ownership:||||
|1. Minority interest income (the net lossshall be filled in with "-")||79,093,123.40|116,071,783.58|

||||
|-|-|-|
|2. The net profit that attributed to theparent company's shareholders (the net lossshall be filled in with "-")|129,603,167.36|197,319,239.01|
|VI After-Tax Net Amount of OtherComprehensive Incomes|||
|The after-tax net amount of othercomprehensive incomes that attributed tothe shareholders of the parent company|||
|i Other comprehensive incomes thatcannot be reclassified into the profit andloss|||
|1. Remeasure the variations in netliabilities or net assets of a defined benefitplan|||
|2. The share of other comprehensiveincomes that can not be reclassified intothe profit and loss by the units ofinvestment under the equity method|||
|ii Other comprehensive incomes that willbe reclassified into the profit and loss|||
|1. The share of other comprehensiveincomes that will be reclassified into theprofit and loss by the units of investmentunder the equity method|||
|2. The variable profit and loss of fairvalue for available-for-sale financial assets|||
|3. The reclassification of held-to-maturityinvestment is the profit or loss ofavailable-for-sale financial assets|||
|4. The effective part of the profit and lossof a cash-flow hedge|||
|5. Translation difference of financialstatements in foreign currency|||
|6. Others|||
|The after-tax net amount of othercomprehensive incomes that attributed tominority shareholders|||
|VII Total Comprehensive Income|208,696,290.76|313,391,022.59|
|Total comprehensive income thatattributed to the shareholders of the parentcompany|129,603,167.36|197,319,239.01|
|Total comprehensive income thatattributed to minority shareholders|79,093,123.40|116,071,783.58|
|VIII Earnings per Share:|||
|i Basic EPS|0.20|0.31|
|ii Diluted EPS|0.20|0.31|

Consolidated Statement of Cash Flow
In 2017
Preparation Unit: Hainan Jingliang Holdings Co., Ltd. Monetary Unit: RMB
|||||
|-|-|-|-|
|Items|Notes|Amount of CurrentPeriod|Amount of Prior Period|
|I Cash Flow Generated During theOperating Activities:||||
|Cash received from selling goods andproviding services||8,251,911,188.11|9,931,688,535.62|
|Refund of tax and levies||10,710,699.86|11,591,402.06|
|Cash received relating to otheroperating activities|VI. 54|1,181,639,304.13|960,589,597.39|
|Sub-Total of Cash Inflow fromOperating Activities||9,444,261,192.10|10,903,869,535.07|
|Cash paid for purchasing goods andreceiving labor services||8,790,585,364.38|7,891,283,396.75|
|Cash paid to employee and foremployee||390,806,974.57|480,498,870.07|
|Tax payments||296,671,364.50|274,849,040.78|
|Other cash payments related tobusiness activities|VI. 54|1,345,705,268.31|1,308,908,067.33|
|Sub-Total of Cash Outflows fromOperating Activities||10,823,768,971.76|9,955,539,374.93|
|Net Amount of Cash Flow GeneratedDuring the Operating Activities||-1,379,507,779.66|948,330,160.14|
|II Cash Flow Generated During theInvestment Activities:||||
|Cash received from recouping thecapital outlay||933,048,283.00|1,919,284,681.51|
|Cash received from the returns oninvestments||21,904,165.76|4,736,279.20|
|Net cash received from the disposalof fixed assets, intangible assets and otherlong term assets recovery||43,733,447.51|5,258,982.89|
|Net cash received from the disposalof subsidiaries and other business entities||-181,590,429.61|401,260,323.09|
|Other cash received relating toinvesting activities|VI. 54|49,136.10||
|Sub-Total of Cash Inflow fromInvestment Activities||817,144,602.76|2,330,540,266.69|
|Cash paid for the construction offixed assets, intangible assets and otherlong term assets||42,495,582.86|105,593,394.60|
|Cash paid for investment||1,298,701,195.80|2,043,867,856.00|

|||||
|-|-|-|-|
|Net cash received from the paymentof subsidiaries and other business entities||204,524,900.00||
|Other cash paid relating toinvestment activities||||
|Sub-Total of Cash Outflows fromInvestment Activities||1,545,721,678.66|2,149,461,250.60|
|Net Amount of Cash Flow GeneratedDuring the Investment Activities||-728,577,075.90|181,079,016.09|
|III Cash Flow Generated During theFinancial Activities:||||
|Cash received by absorbinginvestment||805,020,812.32||
|Including: Cash received byabsorbing the investments of minorityshareholders by the subsidiaries.||8,748,313.76||
|Cash received from obtaining theloans||2,566,546,770.86|1,027,483,119.82|
|Cash received from the issuance ofbonds||||
|Other cash received relating to thefinancial activities|VI. 54||973,018,281.64|
|Sub-Total of Cash Inflows fromFinancial Activities||3,371,567,583.18|2,000,501,401.46|
|Cash paid for the repayments of debts||690,254,732.20|3,278,654,815.27|
|Cash paid for the distribution ofdividends, profits, or cash payments forinterests||64,780,406.38|64,810,405.05|
|Including: the dividends and profitsthat paid by the subsidiaries to the minorityshareholders||||
|Other cash paid relating to thefinancial activities|VI. 54|1,979,044.96|175,478,292.91|
|Sub-Total of Cash Outflows fromFinancial Activities||757,014,183.54|3,518,943,513.23|
|Net Amount of Cash Flow GeneratedDuring the Financial Activities||2,614,553,399.64|-1,518,442,111.77|
|IV Effect of Exchange Rate Movementon Cash and Cash Equivalents||2,492,271.54|1,183,694.57|
|V Net Additional Amount of Cash andCash Equivalents||508,960,815.62|-387,849,240.97|
|Plus: the balance of cash and cashequivalents in the beginning of the period||505,477,847.81|893,327,088.78|
|VI Balance of Cash and CashEquivalents in the End of the Period||1,014,438,663.43|505,477,847.81|

LegalRepresentative：Wang Guofeng; Director in charge of theaccountancy：Guan Ying; Director of theAccounting：Liu Quanli
Consolidated Statement of Changes in Stockholder's Equity
In 2017
Preparation Unit: Hainan Jingliang Holdings Co., Ltd. Monetary Unit: RMB
||||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Items|Amount of Current Period||||||||||||||
||Stockholder's Equity that Attributed to the Parent Company||||||||||||MinorityEquity|TotalStockholder'sEquity|
||Capital Stock|Other Equity Instruments|||Capital Surplus|Minus:TreasuryStock|OtherComprehensiveI ncomes|SpecialReserves|EarnedSurplus|Preparation forGeneralRisk|UndistributedProfit|Subtotal|||
|||Preferred Shares|PerpetualCapitalSecurities|Others|||||||||||
|I Balance at the End of LastYear|426,745,404.00||||1 ,381,337,052.83||||1 2 2,122,436.98||-5 4 7 ,123,017.26|1,383,081,876.55|1,174,529,851.49|2,557,611,728.04|
|Plus: changes in accountingpolicies|||||||||||||||
|Prior period errors correction|||||||||||||||
|Business merger under thesame control|||||-1,312,383,054.76||||||118,408,149.56|-1,193,974,905.20||-1,193,974,905.20|
|Others|||||||||||||||
|II Balance at the Beginning ofthis Year|426,745,404.00||||68,953,998.07||||1 2 2,122,436.98||-4 2 8 ,714,867.70|189,106,971.35|1,174,529,851.49|1,363,636,822.84|
|III Amount of Changes inIncrease and Decrease of thisPeriod (the decrease shall befilled in with "-")|259,044,960.00||||1 ,523,587,584.66||||||1 2 9 ,603,167.36|1,912,235,712.02|-675,450,120.95|1,236,785,591.07|
|i Total ComprehensiveIncome|||||||||||129,603,167.36|129,603,167.36|79,093,123.40|208,696,290.76|
|ii Shareholder Investmentand Capital Reduction|259,044,960.00||||1 ,523,587,584.66|||||||1,782,632,544.66|-632,300,428.15|1,150,332,116.51|
|1. The common stock investedby the shareholders|259,044,960.00||||1,496,058,401.52|||||||1,755,103,361.52|46,450,000.00|1,801,553,361.52|

|||||||||
|-|-|-|-|-|-|-|-|
|2. The assets invested by otherequity instrument holders||||||||
|3. The amount of share-basedpayment that included in thestockholder'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 riskpreparation||||||||
|3. Distribution to shareholders||||||-6,944,385.43|-6,944,385.43|
|4. Others||||||||
|iv Internal Transfer ofShareholders' Equity||||||-1 1 5,298,430.77|-115,298,430.77|
|1. Capital reserves aretransferred to paid-in capital (orcapital stock)||||||||
|2. Surplus reserves aretransferred to paid-in capital (orcapital stock)||||||||
|3. Surplus reserves cover losses||||||||
|4. Others||||||-1 1 5,298,430.77|-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 thisYear|685,790,364.00|1 ,592,541,582.73|1 2 2,122,436.98|-299,111,700.34|2,101,342,683.37|499,079,730.54|2,600,422,413.91|

LegalRepresentative：Wang Guofeng; Director in charge of theaccountancy：Guan Ying; Director of theAccounting：Liu Quanli
Consolidated Statement of Changes in Stockholder's Equity (Continued)
In 2017
Preparation Unit: Hainan Jingliang Holdings Co., Ltd. Monetary Unit: RMB
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Items|Amount of Last Period|||||||||||||
||Stockholder's Equity that Attributed to the Parent Company|||||||||||Minority Equity|TotalStockholder'sEquity|
||Capital Stock|Other Equity Instruments|||Capital Surplus|Minus:TreasuryStock|OtherComprehensiveIncomes|SpecialReserves|EarnedSurplus|UndistributedProfit|Subtotal|||
|||PreferredShares|PerpetualCapitalSecurities|Others||||||||||
|I Balance at the End of LastYear|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|
|Plus: changes inaccounting policies||||||||||||||
|Prior period errors correction||||||||||||||
|Business merger under thesame control|||||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|
|Others||||||||||||||
|II Balance at the Beginningof this Year|426,745,404.00||||1 , 172,412,451.34||||1 2 2 ,122,436.98|-744,442,256.27|976,838,036.05|1,162,569,747.00|2,139,407,783.05|
|III Amount of Changes inIncrease and Decrease of thisPeriod (the decrease shall befilled in with "-")|||||208,924,601.49|||||197,319,239.01|406,243,840.50|11,960,104.49|418,203,944.99|
|i Total ComprehensiveIncome||||||||||197,319,239.01|197,319,239.01|4,179,154.18|201,498,393.19|
|ii Shareholder Investmentand Capital Reduction|||||208,924,601.49||||||208,924,601.49|7,780,950.31|216,705,551.80|
|1. The common stock investedby the shareholders||||||||||||||

|||||||||
|-|-|-|-|-|-|-|-|
|2. The assets invested by otherequity instrument holders||||||||
|3. The amount of share-basedpayment that included in thestockholder'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 riskpreparation||||||||
|3. Distribution to shareholders||||||||
|4. Others||||||||
|iv Internal Transfer ofShareholders' Equity||||||||
|1. Capital reserves aretransferred to paid-in capital (orcapital stock)||||||||
|2. Surplus reserves aretransferred to paid-in capital (orcapital stock)||||||||
|3. Surplus reserves coverlosses||||||||
|4. Others||||||||
|V Special Reserves||||||||
|1. Withdrawal of currentperiod||||||||
|2、Usage of current period||||||||
|VI Others||||||||
|IV Balance at the End of thisYear|426,745,404.00|1 , 381,337,052.83|1 2 2 ,122,436.98|-547,123,017.26|1,383,081,876.55|1,174,529,851.49|2,557,611,728.04|

LegalRepresentative：Wang Guofeng; Director in charge of theaccountancy：Guan Ying; Director of theAccounting：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 fairvalue and whose changes are included in thecurrent 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 andwhose 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|

LegalRepresentative：Wang Guofeng; Director in charge of theaccountancy：Guan Ying; Director of theAccounting：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 shallbe filled in with "-")||||
|Income from investment (the lossshall be filled in with "-")|XV. 5|74,749,139.55|-53,010,262.27|
|Including: the investment income ofjoint venture and cooperative enterprise||-1,070,860.45|-1,417,962.27|
|Asset disposal income (the lossshall be filled in with "-")||-3,744.70|21,623,166.79|
|Other incomes||||
|II Operating Profit（the loss shall be filled inwith "-"）||50,173,347.61|-343,968,558.97|
|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 inwith "-"）||49,609,705.74|-349,555,991.03|
|Minus: Income tax expense|||26,760,434.60|
|IV Net Profit （the net loss shall be filled inwith "-"）||49,609,705.74|-376,316,425.63|
|i Continuous operating net profit (the net lossshall be filled in with "-")||49,609,705.74|-376,316,425.63|
|ii Discontinued operating net profit (the netloss shall be filled in with "-")||||
|V After-Tax Net Amount of OtherComprehensive Incomes||||
|i Other comprehensive incomes that cannot bereclassified into the profit and loss||||
|1. Remeasure the variations in net liabilities ornet assets of a defined benefit plan||||
|2. The share of other comprehensive incomesthat can not be reclassified into the profit andloss by the units of investment under the equitymethod||||
|ii Other comprehensive incomes that will bereclassified into the profit and loss||||
|1. The share of other comprehensive incomesthat will be reclassified into the profit and lossby the units of investment under the equitymethod||||
|2. The variable profit and loss of fair value foravailable-for-sale financial assets||||
|3. The reclassification of held-to-maturityinvestment is the profit or loss ofavailable-for-sale financial assets||||
|4. The effective part of the profit and loss of acash-flow hedge||||
|5. Translation difference of financialstatements in foreign currency||||
|6. Others||||
|VI Total Comprehensive Income||49,609,705.74|-376,316,425.63|

LegalRepresentative：Wang Guofeng; Director in charge of theaccountancy：Guan Ying; Director of theAccounting：Liu Quanli
Statement of Cash Flow
In 2017
Preparation Unit: Hainan Jingliang Holdings Co., Ltd. Monetary Unit: RMB
|||||
|-|-|-|-|
|Items|Notes|Amount of CurrentPeriod|Amount of Prior 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 laborservices|||12,355,200.00|
|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 theOperating Activities||-113,961,274.73|-18,113,999.13|
|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,intangible assets and other long term assets recovery||35,000,000.00|3,060,360.00|
|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,intangible assets and other long term assets|||31,189.00|
|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 theInvestment Activities||-321,398,463.90|529,619,237.67|
|III Cash Flow Generated During the FinancialActivities:||||
|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, orcash payments for interests||1,659,125.50|10,827,232.97|
|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 theFinancial Activities||416,767,129.58|-478,032,172.88|
|IV Effect of Exchange Rate Movement on Cash andCash 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 thebeginning of the period||33,952,786.37|479,720.71|
|VI Balance of Cash and Cash Equivalents in the End ofthe Period||15,360,177.32|33,952,786.37|

LegalRepresentative：Wang Guofeng; Director in charge of theaccountancy：Guan Ying; Director of theAccounting：Liu Quanli
Statement of Changes in Stockholder's Equity
In 2017
Preparation Unit: Hainan Jingliang Holdings Co., Ltd. Monetary Unit: RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|Items|Amount of Current Period|||||||||||
||Capital Stock|Other Equity Instruments|||Capital Surplus|Minus:T reasuryStock|OtherComprehensive Incomes|SpecialReserves|EarnedSurplus|UndistributedProfit|Total Stockholder'sEquity|
|||PreferredShares|PerpetualCapital Securities|Others||||||||
|I Balance at the End of Last Year|426,745,404.00||||5 46,201,098.01||||1 0 9,487,064.39|-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||||5 46,201,098.01||||1 0 9,487,064.39|-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 , 6 27,186,370.70|||||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 CapitalReduction|259,044,960.00||||1 , 6 27,186,370.70||||||1,886,231,330.70|
|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 thestockholder'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-incapital (or capital stock)||||||||||||
|2. Surplus reserves are transferred to paid-incapital (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 , 1 73,387,468.71||||1 0 9,487,064.39|-975,186,549.45|1,993,478,347.65|

Statement of Changes in Stockholder's Equity (Continued)
In 2017
Preparation Unit: Hainan Jingliang Holdings Co., Ltd. Monetary Unit: RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|Items|Amount of Last Period|||||||||||
||Capital Stock|Other Equity Instruments|||Capital Surplus|Minus:T reasuryStock|OtherComprehensive Incomes|SpecialReserves|EarnedSurplus|UndistributedProfit|Total Stockholder'sEquity|
|||PreferredShares|PerpetualCapitalSecurities|Others||||||||
|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||||1 09,487,064.39|-648,479,829.56|433,953,736.84|
|III Amount of Changes in Increase and Decrease of thisPeriod (the decrease shall be filled in with "-")||||||||||-376,316,425.63|-376,316,425.63|
|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 instrumentholders||||||||||||
|3. The amount of share-based payment thatincluded 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 (orcapital stock)||||||||||||
|2. Surplus reserves are transferred to paid-in capital (orcapital 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||||1 09,487,064.39|-1,024,796,255.19|57,637,311.21|

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 for44.45%. 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 for35.18%.
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 for35.18%.
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 for29.82%.
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 for29.82% 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 for25.31%. 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 for26.36% 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 for28.95% 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 for42.06% 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 theCompany’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 thesubsidiary’s loss shared by minority shareholders exceeds its initialshareholders’ 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.
TheCompany’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 theowner’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 entireowner’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 over20%; “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, thedebtor’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
exceeding5% 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 theemployee’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 theemployee’s borrowing No bad debts
(1) The proportion of bad debt provisions for accounts receivable using aging analysis method is as follows:
||
|-|
|Accounts receivable ratio (%)|
|0|
|2|
|5|
|20|
|50|
|80|
|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 theemployee’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 objectively 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 ultimatecontroller’s consolidated financial statements based on the equity of the mergedparty’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 theshareholder’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 theowners’ 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. Theowner’s equity recognized as a result of changes in theowners’ 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 inowners’ equity other than net profit or loss, other comprehensive income, and profit distribution of theinvestee’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 theinvestee’s direct disposal of the relevant assets or liabilities is used for accounting treatment. Changes in theowners’ equity other than the net profit or loss, other comprehensive income, and profit distribution of theinvestee’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 theinvestee’s direct disposal of the relevant assets or liabilities when the use of the equity method is terminated. Theowner’s equity recognized as a result of changes in theowners’ 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 method|Depreciation period(years)|Residualrate(%)|
|Annual average method|8-50|5|
|Annual average method|3-10|4、5|
|Annual average method|5-28|4、5|
|Annual average method|5-10|4、5|
|Annual average method|3-10|4、5|
|Annual average method|5-28|4、5|

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 andloss:：
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, allR&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 theemployees’ 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 thecompany’s shareholders or actual controllers In respect of thecompany’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 thecompany’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 thecompany;③The degree of completion of the transaction can be reliablydetermined;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 thecompany’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 drawingproportion of receivables (%)|
|2|
|5|
|10|
|20|
|30|
|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 than5% of receivables, and the other receivable balance accounts for more than5% 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 proportionof receivables (%)|
|0|
|2|
|5|
|20|
|50|
|80|
|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 method|Depreciation period(year)|Ratio of residualvalue (%)|
|Straight-line method|25|5.00%|
|Straight-line method|5|5.00%|
|Straight-line method|10|5.00%|
|Straight-line method|5|5.00%|

After change: the depreciation period of fixed assets and annual depreciation rate are as follows:
||||
|-|-|-|
|Depreciationmethod|Depreciation period(year)|Ratio of residualvalue (%)|
|Straight-line method|8-50|5|
|Straight-line method|3-10|4、5|

Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
||||
|-|-|-|
|Depreciationmethod|Depreciation period(year)|Ratio of residualvalue (%)|
|Straight-line method|5-28|4、5|
|Straight-line method|5-10|4、5|
|Straight-line method|3-10|4、5|
|Straight-line method|5-28|4、5|

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 theCompany’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. TheCompany’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 ValuationCommittee’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
||
|-|
|Taxation basis|
|The balance is VAT after incomes from selling goods, taxablelabor service income and taxable service income calculatedaccording to the tax law minus current deductable input VAT.|
|Tax levying according to VAT paid actually|
|Tax levying according to VAT and consumption tax paidactually|
|Tax levying according to VAT and consumption tax paidactually|
|According to taxable income|
|According to 70% of original value of house property (orrental income) as the tax base; according to the deduction of30% of original value of house property|
|According to the house payment|

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 is17%, 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 rate8.5%; more than SGD 300,000: tax rate17%.
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
||
|-|
|Balance at end of the period|
|119,766.22|
|937,214,125.42|
|77,104,771.79|
|1,014,438,663.43|

 The restricted monetary funds are as follows:
||
|-|
|Balance at end of the period|

 2. Derivative financial assets
||
|-|
|Balance at end of the period|
|176,699,298.60|
|176,699,298.60|

 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
|||||
|-|-|-|-|
|Book balance||Bad debt provisions||
|Amount|Ratio (%)|Amount|Ratio (%)|
|72,814,580.29||482,408.18||
|2,832,955.00||||
|75,647,535.29|99.45|482,408.18|0.64|
|420,575.29|0.55|420,575.29|100.00|
|76,068,110.58|100.00|902,983.47|__|

 (Continued)
Balance at beginning of the year
|||||
|-|-|-|-|
|Book balance||Bad debt provisions||
|Amount|Ratio (%)|Amount|Provision ratio (%|
|17,606,991.96||||
|8,856,207.60||8,856,207.60||
|26,463,199.56|27.30|8,856,207.60|33.47|
|68,029,415.90||2,116,276.26||
|68,029,415.90|70.18|2,116,276.26|3.11|
|2,443,566.31|2.52|2,443,566.31|100.00|
|96,936,181.77|100.00|13,416,050.17|__|

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|
|63,757,518.38||
|8,010,976.05|160,219.52|
|534,198.10|26,709.91|
|167,345.26|33,469.05|
|107,802.00|53,901.00|
|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|
|93,581.50|93,581.50|
|72,814,580.29|482,408.18|

Continued:
Balance at beginning of the year
Aging
|||
|-|-|
|Accounts receivable|Bad debt provisions|
|40,531,256.32|421.94|
|16,777,186.79|571,066.85|
|6,313,060.52|338,493.52|
|1,297,209.67|176,969.17|
|1,401,816.40|319,439.33|
|964,057.30|299,492.83|
|744,828.90|410,392.62|
|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:
||||
|-|-|-|
|Nature ofaccountsreceivable|Write-offamount|Reasons for writing off|
|Property costs|3,646,668.90|Material assetsreorganization and disposal|
|Property costs|3,525,276.00|Material assetsreorganization and disposal|
|Housing fund|2,406,158.00|Material assetsreorganization and disposal|
|Housing fund|2,218,494.43|Material assetsreorganization and disposal|
|Housing fund|2,090,069.77|Material assetsreorganization and disposal|
|Heating cost|1,938,167.31|Material assetsreorganization and disposal|
|Heating cost|974,470.00|Material assets|

Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
||||
|-|-|-|
|Nature ofaccountsreceivable|Write-offamount|Reasons for writing off|
|||reorganization and disposal|
||16,799,304.41||

(4) Top 5 Accounts receivable of balance at end of the period classified based on the debtors
|||
|-|-|
|Balance of accountsreceivable at end ofthe period|Proportion of balance ofaccounts receivable atend of the period (%)|
|17,460,839.09|22.95|
|15,745,236.80|20.70|
|4,962,924.73|6.52|
|3,652,963.82|4.80|
|2,868,179.67|3.77|
|44,690,144.11|58.74|

4、Prepayments
(1) Prepayments are listed by age
||||
|-|-|-|
|Balance at end of the period|||
|Amount|Ratio (%)|Amount|
|912,778,989.71|99.99|68,533,060.76|
|64,499.99|0.01|8,155,278.97|
|||570,000.00|
|||62,761,186.00|
|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 ofthe period|
|566,987,397.77|
|91,354,120.86|
|83,154,229.20|
|29,300,000.00|
|27,289,080.00|
|798,084,827.83|

 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
||
|-|
|Balance at end of the period|
|2,657,591.11|
|2,657,591.11|

 6. Dividends receivable
||
|-|
|Balance at end of the period|

 7. Other accounts receivable
Disclosure of other accounts receivable by category
Balance at end of the period
|||||
|-|-|-|-|
|Book balance||Bad debt provisions||
|Amount|Ratio (%)|Amount|Provision ratio(%)|
|75,440,422.35||3,271,112.88||
|200.00||||
|75,440,622.35|98.80|3,271,112.88|4.34|
|919,039.29|1.20|24,000.00|2.61|
|76,359,661.64|100.00|3,295,112.88|__|

 (Continued)
Balance at beginning of the year
|||||
|-|-|-|-|
|Book balance||Bad debt provisions||
|Amount|Ratio (%)|Amount|Provisionratio (%)|
|53,159,496.14||53,159,496.14||
|53,159,496.14|10.38|53,159,496.14|100.00|

Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Balance at beginning of the year
|||||
|-|-|-|-|
|Book balance||Bad debt provisions||
|Amount|Ratio (%)|Amount|Provisionratio (%)|
|452,694,414.78||97,526,256.53||
|452,694,414.78|88.39|97,526,256.53|21.54|
|6,306,529.63|1.23|4,419,080.30|70.07|
|512,160,440.55|100.00|155,104,832.97|__|

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|
|7,649,440.63||
|5,371,206.90|107,424.14|
|62,361,774.82|3,118,088.74|
|3,000.00|600.00|
|50,000.00|40,000.00|
|5,000.00|5,000.00|
|75,440,422.35|3,271,112.88|

Continued:
Balance at beginning of the year
Aging
|||
|-|-|
|Other accounts receivable|Bad debt provisions|
|3,602,861.56|57,383.61|
|190,823,127.62|3,827,850.90|
|22,370,295.89|1,128,928.30|
|497,956.54|49,795.66|
|31,339,904.84|6,267,980.97|
|79,190,585.34|23,758,175.60|
|124,869,682.99|62,436,141.49|
|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
|||
|-|-|
|Other accountsreceivable|Bad debtprovisions|

Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Balance at end of the period
|||
|-|-|
|Other accountsreceivable|Bad debtprovisions|
|200.00||
|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:
||||
|-|-|-|
|Nature of funds|Write-offamount|Reasons for writing off|
|Project funds|90,400,000.00|Material assets reorganizationand disposal|
|Project & Currentaccount|102,500,000.00|Material assets reorganizationand disposal|
|Project|50,000,000.00|Material assets reorganizationand disposal|
|Current account|17,829,105.34|Material assets reorganizationand disposal|
|Current account|41,780,000.00|Material assets reorganizationand disposal|
||302,509,105.34||

(4) Classification of other accounts receivable based on nature of funds
||
|-|
|Book balance at end of the period|
|200.00|
|214,904.46|
|1,777,074.61|
|72,031,790.95|
|53,306.67|
|380,963.06|
|1,901,402.00|
|19.89|
|76,359,661.64|

(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
|||||
|-|-|-|-|
|Nature offunds|Balance at endof the period|Aging|Proportion of balance ofother accounts receivableat end of the period (%)|
|Currentaccount|55,940,000.00|1-2 years|73.26|
|Currentaccount|4,500,000.00|1-2 years|5.89|
|Currentaccount|3,994,626.33|Within 3months|5.23|
|Currentaccount|3,362,879.27|Within 1 year|4.40|
|Currentaccount|1,768,933.18|1-2 years|2.32|
|—|69,566,438.78|—|91.10|

 8. Inventory
(1) Classification of inventory
Balance at end of the period
|||
|-|-|
|Book balance|Inventory falling pricereserves|
|368,354,117.16|173,907.66|
|3,027,491.97||
|632,073,799.20|3,065,580.89|
|16,497,730.12|11,673,694.67|
|140,113,625.93||
|615,202.96|7,520.05|
|248,197,500.00||
|1,408,879,467.34|14,920,703.27|

 (Continued)
Balance at beginning of the year
Items
|||
|-|-|
|Book balance|Falling price reserve|
|246,352,662.81||
|3,371,857.03||
|234,447,016.86|3,226,601.64|
|42,701,132.90|17,439,325.19|
|290,815,415.14|21,726,889.27|
|81,186.14||
|817,769,270.88|42,392,816.10|

 (2) Inventory falling price reserve
||||
|-|-|-|
|Balance at|Increase in the current period|Decrease in the current period|

Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
||||||
|-|-|-|-|-|
|beginning of theyear|Accrual|Other|Revert or resell|Other|
||173,907.66||||
|3,226,601.64|2,055,241.01||2,216,261.76||
||7,520.05||||
|21,726,889.27|5,234,010.48|||15,287,205.08|
|17,439,325.19||||17,439,325.19|
|42,392,816.10|7,470,679.20||2,216,261.76|32,726,530.27|

 (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 theperiod|Balance at beginningof the year|
|51,000,000.00||
|51,000,000.00||

10. Other current assets
||
|-|
|Balance at end of the period|
|106,000,000.00|
|455,289.48|
|59,411,949.22|
|165,867,238.70|

 11. Available-for-sale financial assets
(1) Available-for-sale financial assets
||||||
|-|-|-|-|-|
|Balance at end of the period|||||
|Book balance|Provision forimpairment|Book value|Book balance|Provision forimpairment|
|30,500,000.00|10,500,000.00|20,000,000.00|49,263,555.29|18,438,560.39|
|30,500,000.00|10,500,000.00|20,000,000.00|49,263,555.29|18,438,560.39|

Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
||||||
|-|-|-|-|-|
|Balance at end of the period|||||
|Book balance|Provision forimpairment|Book value|Book balance|Provision forimpairment|
|30,500,000.00|10,500,000.00|20,000,000.00|49,263,555.29|18,438,560.39|

 (2) Available-for-sale financial assets measured by cost at end of the period
Book balance
Invested units
||||
|-|-|-|
|Year Begin.|Increase in thecurrent period|Decrease in thecurrent period|
|426,315.00||426,315.00|
|500,000.00|||
|10,000,000.00|||
|160,000.00||160,000.00|
|18,177,240.29||18,177,240.29|
|20,000,000.00|||
|49,263,555.29||18,763,555.29|

 Continued:
||||||
|-|-|-|-|-|
|Provision for impairment||||Proportionof sharesheld ininvestedunits (%)|
|Year Begin|Increase inthe currentperiod|Decrease inthe currentperiod|Period End||
|426,315.00||426,315.00||1.33|
|500,000.00|||500,000.00|6.67|
|10,000,000.00|||10,000,000.00|10.00|
|160,000.00||160,000.00||1.07|
|7,352,245.39||7,352,245.39||9.48|
|||||20.00|

Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
||||||
|-|-|-|-|-|
|Provision for impairment||||Proportionof sharesheld ininvestedunits (%)|
|Year Begin|Increase inthe currentperiod|Decrease inthe currentperiod|Period End||
|||||10.96|
|||||20.00|
|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
||||||
|-|-|-|-|-|
|Balance atbeginning of theyear|||||
||Additionalinvestment|Reducedinvestment|Investment gainsand lossesrecognized underthe equity method|Othercomprehensiveincomeadjustment|
|47,378,437.06|||11,557,639.12||
|32,393,800.55|||-1,070,860.45||
|1,472,844.43|||-177,150.57||
|81,245,082.04|||10,309,628.10||
|90,220,232.86|||2,033,392.70|23,400,000.00|
|90,220,232.86|||2,033,392.70|23,400,000.00|
|171,465,314.90|||12,343,020.80|23,400,000.00|

(Continued)
|||||
|-|-|-|-|
|Changes in this period|||Balance at endof the period|
|Declaringdistribution of cashdividends or profits|Provision forimpairmentaccrued|Others||
||||58,936,076.18|
|||-31,322,940.10||

Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
|||||
|-|-|-|-|
|Changes in this period|||Balance at endof the period|
|Declaringdistribution of cashdividends or profits|Provision forimpairmentaccrued|Others||
|||-1,295,693.86||
|||-32,618,633.96|58,936,076.18|
||||115,653,625.56|
||||115,653,625.56|
|||-32,618,633.96|174,589,701.74|

13. Investment real estate
(1) Investment real estate adopting cost measurement mode
||||
|-|-|-|
|Houses, buildings|Land use rights|Construction inprogress|
|65,752,949.46|||
|23,118,329.83|||
|23,118,329.83|||
|42,634,619.63|||
|13,181,670.30|||
|1,620,113.86|||
|1,620,113.86|||
|7,629,860.87|||
|7,629,860.87|||
|7,171,923.29|||
|3,081,199.41|||
|2,627,355.69|||
|2,627,355.69|||
|453,843.72|||
|35,008,852.62|||
|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
||
|-|
|Book value|
|436,642.45|

 (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 andbuildings|Mechanicalequipment|TransportationEquipment|Electronicequipment|Officeequipment|Other equipment|
|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|
|70,591,038.96|51,812,574.66|414,280.30|2,179,199.96|689,971.47|3,853,501.44|
|1,038,448.73|9,971,844.57|253,923.30|2,019,400.70|366,188.47|3,633,943.44|
|12,228,994.23|18,322,178.09|||||
|57,323,596.00|23,518,552.00|160,357.00|159,799.26|323,783.00|219,558.00|
|235,709,028.28|2,294,920.63|24,857,459.61|153,037.57|21,500,871.50|27,854,610.02|
|7,000.00|2,294,920.63|807,342.17|153,037.57||38,794.37|
|235,702,028.28||24,050,117.44||21,500,871.50|27,815,815.65|
|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|
|229,593,941.82|84,775,164.08|35,456,042.84|5,851,799.20|9,008,913.88|114,961,177.24|
|35,931,924.87|24,654,428.43|1,364,554.47|2,004,487.98|325,681.02|23,876,789.46|
|35,931,924.87|24,654,428.43|1,364,554.47|2,004,487.98|325,681.02|23,876,789.46|
|40,713,533.58|1,843,095.61|20,030,790.74|144,004.93|8,358,326.69|24,378,050.46|
|4,639.59|1,843,095.61|770,618.63|144,004.93||31,692.73|
|40,708,893.99||19,260,172.11||8,358,326.69|24,346,357.73|
|224,812,333.11|107,586,496.90|16,789,806.57|7,712,282.25|976,268.21|114,459,916.24|
|7,594,745.13|1,472,079.04|5.50|3,169.31|||

Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
|||||||
|-|-|-|-|-|-|
|Houses andbuildings|Mechanicalequipment|TransportationEquipment|Electronicequipment|Officeequipment|Other equipment|
||109,094.18|||||
|4,360.41|320,574.10|5.50|3,169.31|||
|7,590,384.72|1,260,599.12|||||
|838,622,409.39|233,654,486.07|7,174,438.20|4,582,016.99|1,018,846.82|248,357,948.91|
|998,954,429.59|206,736,684.94|12,951,375.74|4,413,168.34|13,797,101.18|271,857,796.49|

(2) Temporarily idle fixed assets
||||
|-|-|-|
|Original book value|Accumulated depreciation|Provision for impairment|
|326,474.79|210,140.73|100,010.32|
|9,639,063.63|6,802,819.20|1,251,345.56|
|70,000.00|67,200.00||
|42,529.05|40,341.05||
|135,863.29|98,746.85||
|15,484.53|14,533.06|332.04|
|10,229,415.29|7,233,780.89|1,351,687.92|

 (3) Fixed assets without property ownership certificate
||
|-|
|Book value|
|1,953,950.03|
|15,594,518.14|
|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|||||
|Book balance|Provision forimpairment|Book value|Book balance|Provision forimpairment|
|12,436,003.53||2,436,003.53|30,550,403.37||
|301,669.48||301,669.48|690,785.18||
||||5,648,964.09|3,000,000.00|

Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
||||||
|-|-|-|-|-|
|Balance at end of the period|||||
|Book balance|Provision forimpairment|Book value|Book balance|Provision forimpairment|
||||4,180,000.00|2,000,000.00|
||||360,000.00|360,000.00|
||||73,340,730.93||
|12,737,673.01||12,737,673.01|114,770,883.57|5,360,000.00|

 (2) Changes of important projects under construction in the current period
|||||
|-|-|-|-|
|Balance atbeginning of theyear|Increase in thecurrent periodAmount|Amount of fixedassets transferred -induring this period|Other decrease inamount during thisperiod|
|1,484,243.56||||
|6,012,364.65|1,013,117.03|2,719,079.23|5,745.00|
|1,960,000.00||980,000.00||
|4,700,000.00||2,350,000.00||
|881,000.00||||
|386,309.72|949,405.80|233,000.00||
|73,340,730.93|||73,340,730.93|
|88,764,648.86|1,962,522.83|6,282,079.23|73,346,475.93|

 16. Intangible assets
(1) Intangible assets
|||||
|-|-|-|-|
|Software|Land use rights|Trademark right|Others|
|4,808,630.43|307,784,769.21|154,025,646.68|911,400.00|
|65,810.06|14,209,383.76|909,453.32||
|65,810.06||||
||14,209,383.76|909,453.32||
|1,464,906.11|3,832,251.40|93,900.00|249,000.00|
|1,464,906.11|3,832,251.40|93,900.00|249,000.00|
|3,409,534.38|318,161,901.57|154,841,200.00|662,400.00|
|2,948,208.90|36,169,042.83|24,299,295.54||
|577,819.44|6,651,125.40|8,618,556.09||

Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
|||||
|-|-|-|-|
|Software|Land use rights|Trademark right|Others|
|576,839.83|6,378,341.27|7,713,606.96||
|979.61|272,784.13|904,949.13||
|1,180,138.92|491,047.90|24,257.50||
|1,180,138.92|491,047.90|24,257.50||
|2,345,889.42|42,329,120.33|32,893,594.13||
||||911,400.00|
||||249,000.00|
||||249,000.00|
||||662,400.00|
|1,063,644.96|275,832,781.24|121,947,605.87||
|1,860,421.53|271,615,726.38|129,726,351.14||

 17. Goodwill
||||||
|-|-|-|-|-|
|Balance atbeginning of theyear|Increase in the current period||Decrease in thecurrent period||
||Created due tobusiness combination|Others|Disposal|Others|
|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. Thecompany’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 atbeginning ofthe year|Increase in thecurrent period|Deferred expensesin the currentperiod|Otherdecrease inamount|
|733,485.03||278,707.32|454,777.71|

Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
|||||
|-|-|-|-|
|Balance atbeginning ofthe year|Increase in thecurrent period|Deferred expensesin the currentperiod|Otherdecrease inamount|
|17,535,559.18||676,613.19||
|287,330.77||48,543.18||
|5,422,464.00||112,968.00||
|3,753,450.72||3,753,450.72||
||8,737,864.10|||
||424,244.97|28,283.00||
||466,320.40|31,088.04||
||1,322,174.59|88,144.96||
||39,239.64|1,962.00||
|300,000.00|||300,000.00|
|5,133.53|||5,133.53|
|266,059.02|||266,059.02|
|429,285.31|||429,285.31|
|230,000.00|||230,000.00|
|120,000.00|||120,000.00|
|29,082,767.56|10,989,843.70|5,019,760.41|1,805,255.57|

 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|||
|Deductible temporarydifference|Deferred incometax assets|deductible temporarydifference|
|5,601,872.74|1,400,468.18|6,061,788.11|
|4,693,778.62|1,173,444.66|3,862,160.70|
|18,363,036.93|4,590,759.23|251,032.88|
|1,800,000.00|450,000.00|2,250,000.00|
|26,257,600.00|6,564,400.00|13,581,700.00|
|||300,000.00|
|||19,941,945.99|
|56,716,288.29|14,179,072.07|46,248,627.68|

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|||
|Taxable temporarydifferences|Deferred income taxliabilities|Taxable temporarydifferences|
|16,734,404.50|4,183,601.13|49,166,483.22|
|208,008,300.08|52,002,075.02|221,225,724.76|
|224,742,704.58|56,185,676.15|270,392,207.98|

 (3) Deferred income tax liabilities listed by net value after offsetting
||||
|-|-|-|
|Set-off amountbetween Deferredincome tax assets andliabilities at end of theperiod|Balance of deferredincome tax assets andliabilities after offsettingat end of the period|Set-off amountbetween Deferredincome tax assetsand liabilities atbeginning of the year|
|||597,896.93|

(4) Details of unrecognized deferred income tax assets without offsetting
||
|-|
|Balance at end of the period|
|14,294,910.78|
|33,984,154.44|
|48,279,065.22|

 (5) Deductible loss of the unrecognized deferred income tax assets will expire in the following year
|||
|-|-|
|Balance at end of theperiod|Balance at beginning ofthe year|
||42,354,802.90|
||52,373,550.83|
||59,876,371.43|
|5,769,102.97|45,878,171.41|
|4,504,020.42|28,013,384.12|
|4,021,787.39||
|14,294,910.78|228,496,280.69|

20. Other non-current assets
||
|-|
|Balance at end of the period|
|3,277,634.07|
|3,277,634.07|

Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
21. Short-term loans
(1) Short-term loan classification
||
|-|
|Balance at end of the period|
|795,671,362.7|
|1,211,500,000.0|
|2,007,171,362.7|

 22. Note payable
||
|-|
|Balance at end of the period|
|83,154,229.20|
|83,154,229.20|

 23. Accounts payable
(1) List of accounts payable
||
|-|
|Balance at end of the period|
|300,676,736.60|
|941,089.67|
|6,461,633.94|
|4,242,759.55|
|5,216,708.51|
|317,538,928.27|

 24. Advances from customers
(1) List of advances from customers
||
|-|
|Balance at end of the period|
|211,148,248.97|
|975,898.41|
|212,124,147.38|

 25. Payroll payable
(1) List of payroll payable
||||
|-|-|-|
|Balance atbeginning of theyear|Increase in thecurrent period|Decrease in thecurrent period|
|42,276,084.50|258,000,769.66|271,407,046.31|
|1,810,403.96|31,615,135.79|31,780,103.53|

Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
||||
|-|-|-|
|Balance atbeginning of theyear|Increase in thecurrent period|Decrease in thecurrent period|
|487,747.33|3,672,040.78|3,913,000.65|
|44,574,235.79|293,287,946.23|307,100,150.49|

 (2) List of short-term compensation
||||
|-|-|-|
|Balance at beginningof the year|Increase in thecurrent period|Decrease in thecurrent period|
|24,517,810.48|213,326,638.91|214,372,137.43|
||7,967,052.89|7,967,052.89|
|1,638,861.63|17,404,617.62|17,718,753.06|
|557,442.56|11,613,677.55|11,683,258.83|
|101,230.41|1,516,990.54|1,374,366.88|
|51,392.49|857,731.34|860,147.20|
|928,796.17|3,416,218.19|3,800,980.15|
|203,539.40|11,574,693.42|11,418,196.40|
|12,691,875.64|4,150,365.21|13,136,173.19|
|3,223,997.35|3,577,401.61|6,794,733.34|
|42,276,084.50|258,000,769.66|271,407,046.31|

 (2) List of defined contribution plan
||||
|-|-|-|
|Balance atbeginning of theyear|Increase in thecurrent period|Decrease in thecurrent period|
|1,668,577.27|28,553,568.58|28,684,210.68|
|72,484.11|992,075.61|1,009,125.87|
|69,342.58|2,069,491.60|2,086,766.98|
|1,810,403.96|31,615,135.79|31,780,103.53|

 26. Taxes payable
||
|-|
|Balance at end of the period|
|5,589,806.18|
|487,700.32|
|26,453,811.72|
|1,543,662.49|
|73,972.59|
|1,440,170.29|
|194,075.05|
|160,997.53|

Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
||
|-|
|Balance at end of the period|
|727,764.60|
|183,178.41|
|36,855,139.18|

 27. Interest payable
||
|-|
|Balance at end of the period|
|71,842,734.54|
|10,449,888.49|
|3,771,588.28|
|86,064,211.31|

 28. Dividends payable
||
|-|
|Balance at end of the period|
|3,397,317.01|
|3,397,317.01|

 29. Other payables
(1) List of other payables by nature of payment
||
|-|
|Balance at end of the period|
|47,777,345.69|
|189,160,957.19|
|98,020,263.84|
|131,535.46|
|547,454.06|
|495,579.02|
|104,307,068.72|
|11,498,090.37|
|451,938,294.35|

 (2) Other important payables with age over 1 year
||
|-|
|Balance at end of the period|
|15,330,000.00|
|18,800,800.00|
|11,404,670.60|
|10,086,990.16|
|1,486,921.06|

Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
||
|-|
|Balance at end of the period|
|500,000.00|
|57,609,381.824|

30. Non-current liabilities due within one year
||
|-|
|Balance at end of the period|

 31. Other current liabilities
||
|-|
|Balance at end of the period|
|90,215,292.43|
|90,215,292.43|

32. Long-term loans
||
|-|
|Balance at end of the period|

 33. Long-term payables
||
|-|
|Balance at end of the period|
|801,625.20|
|801,625.20|

34. Long-term payroll payable
(1) Long-term payroll payable table
||
|-|
|Balance at end of the period|
|533,609.91|
|26,257,600.00|
|26,791,209.91|

 35. Special payables
||||
|-|-|-|
|Balance at beginningof the year|Increase in thecurrent period|Decrease in thecurrent period|
|290,975.24||290,975.24|
|473,136.12||473,136.12|

Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
||||
|-|-|-|
|Balance at beginningof the year|Increase in thecurrent period|Decrease in thecurrent period|
|389,065.30||389,065.30|
|1,153,176.66||1,153,176.66|

36. Deferred income
|||||
|-|-|-|-|
|Balance atbeginning of theyear|Increase in thecurrent period|Decrease in thecurrent period|Balance at end ofthe period|
|81,063,077.48|1,334,111.36|3,435,216.17|78,961,972.67|
|81,063,077.48|1,334,111.36|3,435,216.17|78,961,972.67|

 Among them, projects involving government subsidies:
||||||||
|-|-|-|-|-|-|-|
|Category|Balance atbeginning ofthe year|Increase inthe currentperiod|Decrease in the current period||||
||||Included innon-operatingincome|Included inotherincome|Write downcosts andexpenses|Otherdecreasein amount|
|Fiscalappropriation|5,771,457.24|||384,763.82|||
|Fiscalappropriation|2,250,000.00|||450,000.00|||
|Fiscalappropriation|13,931,254.98|||908,691.99|||
|Fiscalappropriation|55,039,140.25|||1,277,504.16|||
|Fiscalappropriation|2,981,481.41|||222,222.24|||
|Fiscalappropriation|1,089,743.60|||77,838.84|||
|Fiscalappropriation||290,975.24||58,195.08|||
|Fiscalappropriation||473,136.12||56,000.04|||
|Fiscalappropriation||570,000.00|||||
||81,063,077.48|1,334,111.36||3,435,216.17|||

Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
37. Share capital
|||||||
|-|-|-|-|-|-|
|Balance atbeginning ofthe year|Changes in this period plus (+) less (-)|||||
||New sharesoffering|Sharesdistribution|Conversion ofaccumulationfund into shares|Others|Subtotal|
||236,216,509.00||||236,216,509.00|
|1,325,131.00|22,828,451.00|||-25,631.00|22,802,820.00|
|1,299,500.00|22,828,451.00||||22,828,451.00|
|25,631.00||||-25,631.00|-25,631.00|
|1,325,131.00|2 59,044,960.00|||-25,631.00|259,019,329.00|
|360,445,273.00||||25,631.00|25,631.00|
|64,975,000.00||||||
|425,420,273.00||||25,631.00|25,631.00|
|426,745,404.00|2 59,044,960.00||||259,044,960.00|

 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 beginningof the year|Increase in thecurrent period|Decrease in thecurrent period|
|1,060,096,093.98|1,496,058,401.52|1,312,383,054.76|
|112,316,357.36|||
|208,924,601.49|27,529,183.14||
|1,381,337,052.83|1,523,587,584.66|1,312,383,054.76|

 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 beginningof the year|Increase in thecurrent period|Decrease in thecurrent period|
|84,487,609.05|||
|37,634,827.93|||
|122,122,436.98|||

 40. Undistributed profit
||
|-|
|Amount in the current period|
|-547,123,017.26|
|-547,123,017.26|
|129,603,167.36|

Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
||
|-|
|118,408,149.56|
|-299,111,700.34|

 41. Operating income and cost
||||
|-|-|-|
|Amount in the current period|||
|Income|Cost|Income|
|7,867,860,792.55|7,167,956,134.14|8,680,959,461.20|
|49,778,251.58|13,372,318.44|42,532,196.11|
|7,917,639,044.13|7,181,328,452.58|8,723,491,657.31|

 (1) Main business (on an industry or business basis)
||||
|-|-|-|
|Amount in the current period|||
|Income|Cost|Income|
|6,533,461,558.85|6,242,894,698.91|5,008,707,145.46|
|829,093,442.40|581,010,692.16|784,133,600.93|
|11,932,194.08|15,831,580.89|28,232,658.50|
|35,563,203.00||35,102,805.31|
|6,487,277.74|2,695,225.67|3,742,883.52|
|267,712,458.14|155,065,841.68|659,767,503.67|
|176,661,210.91|167,272,900.48|263,353,192.81|
|6,949,447.43|3,185,194.35|32,576,251.84|
|||1,865,343,419.16|
|7,867,860,792.55|7,167,956,134.14|8,680,959,461.20|

 (2) Main business (on a region basis)
||||
|-|-|-|
|Amount in the current period|||
|Income|Cost|Income|
|2,284,362,571.64|2,016,441,282.38|3,293,176,174.89|
|4,303,392,217.59|4,225,251,929.43|3,704,166,979.75|
|601,713,674.15|409,141,409.64|579,760,868.75|
|51,895,234.78|45,885,054.28|41,917,207.62|
|114,647,176.24|88,324,952.20|106,241,281.87|

Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
||||
|-|-|-|
|Amount in the current period|||
|Income|Cost|Income|
|60,526,801.67|56,656,928.52||
|174,290,871.50|166,745,067.76|280,402,443.94|
|6,949,447.43|3,185,194.35|11,225,267.37|
|268,027,180.78|155,208,349.16|660,419,643.88|
|2,055,616.77|1,115,966.42|3,649,593.13|
|7,867,860,792.55|7,167,956,134.14|8,680,959,461.20|

 42. Tax and surtax
||
|-|
|Amount in the current period|
|32,013.47|
|6,630,671.72|
|3,104,569.54|
|1,525,118.90|
|22,375,467.16|
|7,311,758.86|
|1,374,665.53|
|51,081.96|
|4,519,040.11|
|1,405,472.06|
|48,329,859.31|

 Note: Please refer to Note V. Taxes for details of payment standard concerning various taxes and surtaxes.
43. Sales expenses
||
|-|
|Amount in the currentperiod|
|55,932,036.38|
|5,947,655.16|
|1,358,366.74|
|559,123.41|
|1,078,970.62|
|20,381,939.96|
|820,634.48|
|2,338,735.74|
|1,623,972.05|
|10,523,679.41|
|398,037.44|
|547,189.06|

Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
||
|-|
|Amount in the currentperiod|
|35,441,585.31|
|742,942.10|
|218,584.27|
|744,458.02|
|5,944,033.74|
|4,910,000.00|
|16,056,593.33|
|7,494,585.28|
|9,528,015.06|
|2,103,032.02|
|184,694,169.58|

 44. Administration expense
||
|-|
|Amount in the currentperiod|
|127,153,175.93|
|670,625.85|
|4,172,827.84|
|1,174,261.82|
|4,245,679.03|
|24,139,281.64|
|2,259,750.04|
|320,300.97|
|17,020,197.51|
|772,549.15|
|25,389,014.63|
|1,549,995.96|
|1,132,559.52|
|614,848.07|
|770,534.92|
|495,870.77|
|665,576.07|
|3,408,439.70|
|2,755,755.78|
|1,882,855.50|

Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
||
|-|
|Amount in the currentperiod|
|9,498,782.54|
|2,042,800.68|
|4,208,666.81|
|236,344,350.73|

 45. Financial expense
||
|-|
|Amount in the current period|
|60,010,600.72|
|24,528,341.57|
|-5,917,601.92|
|2,148,312.68|
|305,829.37|
|32,018,799.28|

 46. Assets impairment loss
||
|-|
|Amount in the current period|
|2,496,907.58|
|7,470,679.20|
|583,333.33|
|51,187.38|
|10,602,107.49|

 47. Income from fair value variation
||
|-|
|Amount in the currentperiod|
|12,934,641.69|
|12,934,641.69|
|12,934,641.69|

 48. Income from investment
||
|-|
|Amount in the currentperiod|
|12,343,020.80|
|203,943.97|

Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
||
|-|
|Amount in the currentperiod|
|-1,294,068.24|
|9,842,560.10|
|4,488,253.49|
|25,583,710.12|

 49. Asset disposal income
|||
|-|-|
|Amount in the current period|Amount in the previousperiod|
|-6,770.67|17,918,094.06|
|-6,770.67|17,831,110.16|
||86,983.90|
|-6,770.67|17,918,094.06|

 50. Other income
|||
|-|-|
|Amount in the currentperiod|Amount in the previousperiod|
|15,139,922.81|12,915,889.46|
|15,139,922.81|12,915,889.46|

 Among them, details concerning governmental subsidy are as follows:
|||
|-|-|
|Amount in thecurrent period|Amount in theprevious period|
|384,763.82|384,763.82|
|450,000.00|450,000.00|
|908,691.99|910,563.05|
|1,277,504.16|1,277,504.16|
|222,222.24|222,222.24|

Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
|||
|-|-|
|Amount in thecurrent period|Amount in theprevious period|
|77,838.84||
|58,195.08||
|56,000.04||
|120,000.00||
|483,600.00||
|450,000.00||
|30,000.00||
|570,000.00||
|256,000.00|250,000.00|
|181,600.00||
|29,946.64|176,652.43|
||867,385.00|
||88,191.76|
||573,575.31|
|9,583,560.00|7,715,031.69|
|15,139,922.81|12,915,889.46|

51. Non-operating income
|||
|-|-|
|Amount in the currentperiod|Amount in the previousperiod|
|69,818.00|2,430,626.00|
|8.26|3,749.60|
|35,800.00||
|230,078.50|660,659.78|
|67,445.03||
|22,523,945.85|58,388,492.95|
|2,791,149.54|1,866,900.23|
|25,718,245.18|63,350,428.56|

 Among them, details concerning governmental subsidy are as follows:
|||
|-|-|
|Amount in thecurrent period|Amount in theprevious period|
|26,020.00|30,250.00|
|18,000.00||

Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
|||
|-|-|
|Amount in thecurrent period|Amount in theprevious period|
|25,798.00|2,400.00|
||30,000.00|
||400,000.00|
||3,000.00|
||711,800.00|
||19,500.00|
||411,600.00|
||100,000.00|
||722,076.00|
|69,818.00|2,430,626.00|

52. Non-operating expenditure
|||
|-|-|
|Amount in the currentperiod|Amount in the previousperiod|
|38,500.00|161,249.58|
|278,048.34|344.00|
|29,126.42|11,466.86|
|928,136.64|12,718,930.47|
|15,749,062.93|15,724,954.74|
|2,017,718.48|1,631,427.98|
|19,040,592.81|30,248,373.63|

 53. Income tax expense
(1) Income tax expense table
||
|-|
|Amount in the current period|
|91,667,682.68|
|-15,776,517.61|
|63,005.65|
|75,954,170.72|

 (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 current period|
|14,986,715.05|
|1,031,613,303.60|
|3,197,686.55|
|5,153,293.07|
|45,578,965.01|
|76,904,449.18|
|4,204,891.67|
|1,181,639,304.13|

 (2) Cash paid relating to other operating activities
||
|-|
|Amount in the currentperiod|
|11,325,588.70|
|1,081,047,062.03|
|56,096,248.89|
|47,688,580.85|
|18,324,573.33|
|1,117,033.00|
|1,399,464.20|
|112,176,278.67|
|16,530,438.64|
|1,345,705,268.31|

 (3) Cash received relating to other investment activities
||
|-|
|Amount in the currentperiod|
|49,136.10|
|49,136.10|

Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
(4) Cash received relating to other financial activities
||
|-|
|Amount in the currentperiod|

 (5) Cash paid relating to other financial activities
||
|-|
|Amount in the currentperiod|
|1,720,000.00|
|259,044.96|
|1,979,044.96|

 55. Additional information on the cash flow statement
(1) Additional information on the cash flow statement
||
|-|
|Amount in the currentperiod|
|208,696,290.76|
|10,602,107.49|
|100,488,015.47|
|14,763,115.24|
|5,992,729.57|
|6,770.67|
|273,173.63|
|-12,934,641.69|
|51,387,508.31|
|-25,583,710.12|
|-2,616,915.14|
|-10,832,755.26|
|-751,498,235.77|
|-239,599,506.90|
|-728,651,725.92|
|-1,379,507,779.66|

Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
||
|-|
|Amount in the currentperiod|
|1,014,438,663.43|
|505,477,847.81|
|508,960,815.62|

 (2) Composition of cash and cash equivalents
||
|-|
|Balance at end of theperiod|
|1,014,438,663.43|
|119,766.22|
|937,214,125.42|
|77,104,771.79|
|1,014,438,663.43|

56. Assets with restricted ownership or use rights
||
|-|
|Book value at the end of period|
|104,930,000.00|
|4,824,035.45|
|6,081,230.93|
|3,173,896.16|
|119,009,162.54|

57. Foreign currency monetary items
(1) Foreign currency monetary items
|||
|-|-|
|Foreign currency balance atthe end of the period|Exchange rate|
|1,684,880.03|6.5342|
|1,684,880.03|6.5342|
|12,726,000.00|6.5342|
|12,726,000.00|6.5342|
|63,890,585.34|6.5342|
|63,890,585.34|6.5342|

Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
|||
|-|-|
|Foreign currency balance atthe end of the period|Exchange rate|
|12,726,000.00|6.5342|
|12,726,000.00|6.5342|
|30.61|6.5342|
|30.61|6.5342|

 (2) Explanation of Overseas Business Entity
Thecompany’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
||||||||
|-|-|-|-|-|-|-|
|Amount|Related to assets||Related to incomes||||
||Deferredincome|Write downthe book valueof assets|Deferredincome|Otherincome|Non-operatingincome|Write downcosts andexpenses|
|570,000.00|||570,000.00||||
|120,000.00||||120,000.00|||
|483,600.00||||483,600.00|||
|450,000.00||||450,000.00|||
|30,000.00||||30,000.00|||
|570,000.00||||570,000.00|||
|256,000.00||||256,000.00|||
|181,600.00||||181,600.00|||
|26,020.00|||||26,020.00||
|18,000.00|||||18,000.00||
|25,798.00|||||25,798.00||
|29,946.64||||29,946.64|||
|9,583,560.00||||9,583,560.00|||
|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
||||
|-|-|-|
|Category|Included inother income|Included innon-operating income|
|Fiscal appropriation|384,763.82||
|Fiscal appropriation|450,000.00||
|Fiscal appropriation|908,691.99||
|Fiscal appropriation|1,277,504.16||
|Fiscal appropriation|222,222.24||
|Fiscal appropriation|77,838.84||
|Fiscal appropriation|58,195.08||
|Fiscal appropriation|56,000.04||
|Fiscal appropriation|120,000.00||
|Fiscal appropriation|483,600.00||
|Fiscal appropriation|450,000.00||
|Fiscal appropriation|30,000.00||
|Fiscal appropriation|570,000.00||
|Fiscal appropriation|256,000.00||
|Fiscal appropriation|181,600.00||
|Fiscal appropriation||26,020.00|
|Fiscal appropriation||18,000.00|
|Fiscal appropriation||25,798.00|
|Fiscal appropriation|29,946.64||
|Fiscal appropriation|9,583,560.00||
|— —|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
||||
|-|-|-|
|Ratio of equityobtained in businesscombination (%)|Basis for constitute ofbusiness combinationunder the commoncontrol|Combining date|

Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
||||
|-|-|-|
|Ratio of equityobtained in businesscombination (%)|Basis for constitute ofbusiness combinationunder the commoncontrol|Combining date|
|100.00|Under the final controlof the same controllingparty|2017.7.31|

(Continued)
||||
|-|-|-|
|Income of the combinedparty from the beginningof the year to thecombining date|Net profit of the combinedparty from the beginningof the year to thecombining date|The income of thecombined partyduring thecomparison period|
|3,067,965,755.35|92,264,243.46|3,317,353,681.70|

(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|
|732,381,333.59|
|160,699,899.00|
|523,349,583.04|
|710,833,019.85|
|292,572,558.70|
|142,703,240.87|
|29,475,874.93|
|1,262,657,225.25|
|24,186,993.84|
|391,137,434.66|
|191,394,422.51|
|30,842,125.71|
|8,351,745.02|

Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Beijing Beijing Grain Products Co., Ltd.
Items
||
|-|
|Combining date|
|1,057,731,413.11|
|839,622,700.73|
|11,125,986.35|
|24,877,670.19|
|20,422,151.15|
|1,086,562.84|
|79,125,815.22|
|60,099,078.64|
|2,406,494,078.74|
|436,301,714.69|
|1,970,192,364.05|

 (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
||||||
|-|-|-|-|-|
|Equity disposalprice|Equitydisposalratio (%)|Equity disposalmethod|Time whenlosing ofcontrol power|Basis for timing for loss of control|
|14,043,473.21|98.00|Assetreorganizationagreement transfer|2017.7.31|Stock Transfer Agreement; BoardResolution; Resolution of Shareholders'Meeting; Closing Agreement|
|159,597,844.66|89.20|Assetreorganizationagreement transfer|2017.7.31|Stock Transfer Agreement; BoardResolution; Resolution of Shareholders'Meeting; Closing Agreement|
|42,793,128.01|100.00|Assetreorganizationagreement transfer|2017.7.31|Stock Transfer Agreement; BoardResolution; Resolution of Shareholders'Meeting; Closing Agreement|
|0.00|100.00|Assetreorganizationagreement transfer|2017.7.31|Stock Transfer Agreement; BoardResolution; Resolution of Shareholders'Meeting; Closing Agreement|
|0.00|100.00|Assetreorganizationagreement transfer|2017.7.31|Stock Transfer Agreement; BoardResolution; Resolution of Shareholders'Meeting; Closing Agreement|
|0.00|51.00|Assetreorganizationagreement transfer|2017.7.31|Stock Transfer Agreement; BoardResolution; Resolution of Shareholders'Meeting; Closing Agreement|

Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
(Continued)
||||||
|-|-|-|-|-|
|Ratio ofremainingequity at thedate of loss ofcontrol power(%)|The book valueof theremainingequity at thedate of loss ofcontrol power|The fair valueof theremainingequity at thedate of loss ofcontrol power|Gains or lossesarising fromre-measurementof the remainingequity at fairvalue|Determination method andmain assumptions of thefair value of the remainingequity at the date of loss ofcontrol power|
|0.00|0.00|0.00|0.00|Not involved|
|0.00|0.00|0.00|0.00|Not involved|
|0.00|0.00|0.00|0.00|Not involved|
|0.00|0.00|0.00|0.00|Not involved|
|0.00|0.00|0.00|0.00|Not involved|
|0.00|0.00|0.00|0.00|Not involved|

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'sshareholders’ 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
||||||
|-|-|-|-|-|
|Principal place ofbusiness|Domicile ofincorpor-ation|Business nature|Shareholding ratio (%)||
||||Directholding|Indirectholding|
|Beijing|Beijing|Investment company|100||
|Tianjin|Tianjin|Agricultural and sidelineproducts processing||70|
|Beijing|Beijing|Grain and oil trade||100|
|Tianjin|Tianjin|Business services||51|
|Hebei|Hebei|Agricultural and sidelineproducts processing||51|
|Beijing|Beijing|Grain and oil trade||100|
|Beijing|Beijing|Agricultural and sidelineproducts processing||100|
|Beijing|Beijing|Warehousing||100|
|Beijing|Beijing|Food processing||100|

Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
||||||
|-|-|-|-|-|
|Principal place ofbusiness|Domicile ofincorpor-ation|Business nature|Shareholding ratio (%)||
||||Directholding|Indirectholding|
|Tianjin|Tianjin|Food processing||51|
|Tianjin|Tianjin|Food sales||100|
|Beijing|Beijing|Food sales||100|
|Hangzhou|Hangzhou|Food processing||69.7716|
|Hangzhou|Hangzhou|Food processing||69.7716|
|Liaoning|Liaoning|Food processing||69.7716|
|Linqing|Linqing|Food processing||69.7716|
|Hangzhou|Hangzhou|Food processing||69.7716|
|Singapore|Singapore|Grain trade||100|

 (2) Major non-wholly-owned subsidiaries
||||
|-|-|-|
|Minorityshareholders’shareholding ratio (%)|Gain and lossattributable to minorityshareholders during thecurrent period|Dividends distributed tominority shareholdersduring the current period|
|30|14,014,844.06||
|30.2284|28,950,979.77|6,944,385.43|
|49|-112,978.40||
|49|759,049.55||
|49|1,794,861.40||

 (3) Main financial information of major non-wholly-owned subsidiaries
Ending balance
Name of subsidiaries
||||||
|-|-|-|-|-|
|Current assets|Non-currentassets|Total assets|Current liabilities|Non-currentliabilities|
|1,299,787,374.38|896,524,016.17|2,196,311,390.55|1,327,490,398.97|60,704,496.39|
|309,304,989.70|373,675,587.60|682,980,577.30|106,103,249.25|46,466,856.41|
|16,058,445.83|4,270,567.41|20,329,013.24|559,581.40||
|81,900,543.34|750,679.10|82,651,222.44|71,301,496.27||
|282,694,214.41|95,147,791.73|377,842,006.14|307,807,398.50|1,371,625.20|

 (Continued)
Beginning balance
Name of subsidiaries
||||||
|-|-|-|-|-|
|Current assets|Non-currentassets|Total assets|Currentliabilities|Non-currentliabilities|
|507,916,668.07|942,620,865.68|1,450,537,533.75|618,824,942.94|70,312,242.47|
|272,787,074.52|369,815,648.79|642,602,723.31|157,536,078.06|35,534,412.22|

Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Beginning balance
Name of subsidiaries
||||||
|-|-|-|-|-|
|Current assets|Non-currentassets|Total assets|Currentliabilities|Non-currentliabilities|

Continued:
Current amount
||||
|-|-|-|
|Operating income|Net profits|Total consolidatedincome|
|3,688,456,961.35|46,716,146.85|46,716,146.85|
|771,331,947.29|103,851,312.21|103,851,312.21|
|6,576,016.95|-230,568.16|-230,568.16|
|787,720,715.22|1,549,726.17|1,549,726.17|
|64,100,717.77|3,662,982.44|3,662,982.44|

 Continued:
Amount last year
||||
|-|-|-|
|Operating income|Net profits|Total consolidatedincome|
|3,709,639,282.67|32,486,333.35|32,486,333.35|
|731,067,857.58|91,892,742.83|91,892,742.83|

2. Transactions resulting changes inshareholder’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 BeijingGrain&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
||||||
|-|-|-|-|-|
|Principal place ofbusiness|Domicile ofincorporation|Businessnature|Shareholding ratio(%)||
||||Directholding|Indirectholding|
|Beijing ShunyiDistrict Niulanshan|Beijing ShunyiDistrict Niulanshan|Manufacturingenterprises|50.00||
|No. 1 LingangEconomic Zone,Binhai New Area,Tianjin|No. 1 LingangEconomic Zone,Binhai New Area,Tianjin|Transportationandwarehousing|30.00||

(2) Main financial information of major joint ventures
||
|-|
|Ending balance/ current amount|
|Beijing Zhengda Feed Co., Ltd.|
|65,265,065.01|
|7,741,319.43|
|112,237,685.88|
|177,502,750.89|
|67,305,652.33|
|67,305,652.33|
|110,197,098.56|
|55,098,549.28|
|58,936,076.18|
|396,853,669.74|

Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
||
|-|
|Ending balance/ current amount|
|Beijing Zhengda Feed Co., Ltd.|
|-1,423,338.05|
|7,952,866.41|
|23,115,278.24|
|150,150.00|
|23,265,428.24|

(3) Main financial information of major associated enterprises
||
|-|
|Ending balance/ current amount|
|Zhongchuliang(Tianjin)Warehouse&Logistics Co., Ltd.|
|76,297,906.27|
|328,865,777.91|
|405,163,684.18|
|4,526,369.09.|
|15,125,229.88|
|19,651,598.97|
|385,512,085.21|
|115,653,625.56|
|115,653,625.56.|
|33,461,596.58|
|6,777,975.68|
|6,777,975.68|

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
||||||
|-|-|-|-|-|
|Book value|Original bookvalue|Within 1 year|1-2years|2-5years|
|1,014,438,663.43|1,014,438,663.43|1,014,438,663.43|||
|75,165,127.11|76,068,110.58|76,068,110.58|||
|73,064,548.76|76,359,661.64|76,359,661.64|||
|51,000,000.00|51,000,000.00|51,000,000.00|||
|20,000,000.00|30,500,000.00|30,500,000.00|||
|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
||||||
|-|-|-|-|-|
|Book value|Original bookvalue|Within 1 year|1-2years|2-5years|
|2,007,171,362.73|2,007,171,362.73|2,007,171,362.73|||
|317,538,928.27|317,538,928.27|317,538,928.27|||
|451,938,294.35|451,938,294.35|451,938,294.35|||
|2,776,648,585.35|2,776,648,585.35|2,776,648,585.35|||

Continued:
Beginning balance
||||||
|-|-|-|-|-|
|Book value|Original bookvalue|Within 1 year|1-2years|2-5years|
|652,870,239.91|652,870,239.91|652,870,239.91|||
|83,520,131.60|96,936,181.77|96,936,181.77|||
|357,055,607.58|512,160,440.55|512,160,440.55|||
|30,824,994.90|49,263,555.29|49,263,555.29|||
|1,124,270,973.99|1,311,230,417.52|1,311,230,417.52|||
|62,681,281.00|62,681,281.00|62,681,281.00|||
|461,294,581.74|461,294,581.74|461,294,581.74|||
|680,347,428.44|680,347,428.44|680,347,428.44|||
|73,666,666.66|73,666,666.66|73,666,666.66|||
|1,277,989,957.84|1,277,989,957.84|1,277,989,957.84|||

(III) Market risk
1． Exchange risk
(1)Exchange risk
Foreign exchange risk refers to the risk of loss due to exchange rate fluctuation. The company's exposure to foreign exchange risk is mainly related to U.S dollar. Except that several subsidiaries of the company use U.S. Dollars for purchase and sell, other major business activities of the company are settled in RMB. As of December 31, 2017, except for the balance of assets or liabilities as stated in the table below, the company's assets and liabilities are all balance in RMB. Foreign exchange risks arising from the balance of assets and liabilities in such foreign currencies may have impact on the company's operating performance.
ITEMS Amount at end of period
Monetary funds 11,009,343.09 Prepayment 83,154,229.20 Short-term loan 417,473,862.73
Bills payable 83,154,229.20
Other payables 200.00
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Note: The Group pays close attention to the impact of exchange rate changes on the Group.
(2)Sensitivity analysis on exchange risk
The company uses sensitivity analysis techniques to analyze the possible impact of reasonable and possible changes in risk variables on the current profits or losses or owners' equity. Since any risk variable rarely changes in isolation, and the correlation between the variables has a significant effect on the final amount affected of certain risk variable change, the following contents are based on assumption that the change of each variable is independent.
Assuming foreign currency assets and foreign currency liabilities remain relatively stable while other variables remain unchanged, the possible post-tax impacts of reasonable fluctuation of exchange on the current profit or loss and equity are as follows:
|||
|-|-|
|Exchange fluctuation||
||Impact on profits|
|5% appreciation against RMB|-20,323,235.99|
|5% depreciation against RMB|20,323,235.99|

2． Rate risk
The company's interest rate risk arises primarily from bank loans, etc. Financial liabilities with floating interest rates expose the company to cash flow interest rate risk., while fixed-rate financial liabilities expose the company to fair value interest rate risk. The company determines relative proportion of fixed-rate and floating-rate contracts based on market conditions at that time.
As of December 31, 2017, the company's interest-bearing debts were mainly RMB denominated floating interest rate contracts with an amount of RMB 813,500,000.00; and RMB-denominated fixed-rate contracts with an amount of1,428,510,758.41yuan.
X. Fair value disclosure
1. Final fair value of assets and liabilities measured at fair value
Final fair value
||||
|-|-|-|
|First level of fairvaluemeasurement|Second level offair valuemeasurement|Third level offair valuemeasurement|
|176,699,298.60|||
|176,699,298.60|||
|176,699,298.60|||
|176,699,298.60|||

Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Continued:
Beginning fair value
||||
|-|-|-|
|First level offair valuemeasurement|Second level offair valuemeasurement.|Third level offair valuemeasurement|
|66,667,426.60|||
|66,667,426.60|||
|66,667,426.60|||
|66,667,426.60|||

XI.Related parties and related transactions
1. The company's parent company
|||||
|-|-|-|-|
|Domicile ofincorporation|Business nature|Registeredcapital(ten thousandyuan)|Shareholdingratio of thecompany (%)|
|Beijing|Investmentmanagement|90,000.00|42.06|

The company's controlling shareholder is the State-owned Assets Supervision and Administration
Commission of Beijing Municipal People's Government.
2. The company's subsidiaries
For details, please refer to Note VIII. 1. Equity in subsidiaries.
3. The company's joint ventures and associated enterprises
For details of the company's major joint ventures and associated enterprises, please refer to Note VIII. 3, equity in joint ventures or associated enterprises. The situations of other joint ventures or associated enterprises that had related party transactions with the company or had balance due to associated party transactions with the company in previous period were as follows:
Name of joint ventures or associated enterprises Relationship with the company
Beijing Zhengda Feed Co., Ltd. Joint venture
Zhongchuliang(Tianjin)Warehouse&Logistics Co., Ltd. Associated enterprise
1、 Other related parties
Names of other related parties Relationship between other related parties and the company Beijing Guchuan Rice Co.,Ltd. Control of the same subject
Jilin Yushu Guchuan Rice Co.,Ltd.
Control of the same subject
Beijing Shunyi Niulanshan Grain Storage Co., Ltd.
Control of the same subject
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Names of other related parties Relationship between other related parties and the company Jingliang Group (Jilin) Industrial Development Co., Ltd.
Control of the same subject
Beijing Grain Company
Control of the same subject
Chifeng Mengtai Grain and Oil Trading Co., Ltd.
Control of the same subject
Beijing Zhujun Grain and Oil Supply Station
Control of the same subject
Beijing Jingliang Oriental Grain and Oil Trading Co., Ltd.
Control of the same subject
Chifeng Jingliang Shengyuan Grain and Oil Trading Co., Ltd.
Control of the same subject
Jingliang (Hong Kong) International Trading Co., Ltd.
Control of the same subject
Beijing Yuanyisheng Grains and Oils Corporation
Control of the same subject
Beijing Jingliang Jiahe Grain and Oil Trading Co., Ltd.
Control of the same subject
Beijing Taoshan Grain Reserve Co., Ltd.
Control of the same subject
Beijing Yuanjihun Junliang Supply Co., Ltd.
Control of the same subject
Chifeng Jingliang Shengyuan Grain and Oil Trading Co., Ltd.
Control of the same subject
Jingliang (Hong Kong) International Trading Co., Ltd.
Control of the same subject
Beijing Yuanyisheng Grains and Oils Corporation
Control of the same subject
Beijing Jingliang Jiahe Grain and Oil Trading Co., Ltd.
Control of the same subject
Beijing Taoshan Grain Reserve Co., Ltd.
Control of the same subject
Beijing Yuanjihun Junliang Supply Co., Ltd.
Control of the same subject
Beijing Hongxiang Construction& Engineering Co., Ltd.
Control of the same subject
Beijing Huairou Honglou Hotel Co., Ltd.
Control of the same subject
Beijing Huairou Chengguan Grain Purchase and Sales Co., Ltd.
Control of the same subject
Beijing Huairou Yangsong Grain Storage Co., Ltd.
Control of the same subject
Beijing Huaitang Grain Storage Co., Ltd.
Control of the same subject
Beijing Qilixing Labor Service Co., Ltd.
Control of the same subject
Beijing Huaifa Breeding Co., Ltd.
Control of the same subject
Beijing Jingmen Liangshi State-owned Assets Management
Control of the same subject
Co., Ltd.
Beijing Jingliang Shenglong Trading Co., Ltd.
Control of the same subject
Beijing Jingliang Shenglong Trading Co., Ltd.
Control of the same subject
Beijing Menliang Motor Vehicle Comprehensive Performance
Control of the same subject
Testing Co., Ltd.
Beijing Sanjiadian Grain Storage Co., Ltd.
Control of the same subject
Beijing Hongyuan Lijun Grain and Oil Supply Co., Ltd.
Control of the same subject
Beijing Mentougou Motor Vehicle Testing Field Co., Ltd.
Control of the same subject
Beijing Zhaitang Star City Trading Company
Control of the same subject
Heilongjiang Jiansanjiang Nongken Jingmen Liangshi Rice
Control of the same subject
Industry Co., Ltd.
Beijing Menliang Motor Vehicle Comprehensive Performance
Control of the same subject
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Names of other related parties Relationship between other related parties and the company Testing Co., Ltd.
Beijing Fangshan Grain and Oil Trading Co., Ltd.
Control of the same subject
Beijing Jingliang Dagu Grain and Oil Trading Co., Ltd.
Control of the same subject
Beijing Liangxiang Haotian Grain Storage Co., Ltd.
Control of the same subject
Beijing Wangfotai Villa Co., Ltd.
Control of the same subject
Beijing Pinggu Cereal Industry& Trade Co., Ltd.
Control of the same subject
Beijing Pinggu Guanzhuang Grain Storage and Repository
Control of the same subject
BeijingLiang’an Food Storage Co., Ltd.
Control of the same subject
Beijing Pinggu Xuncheng Labor Service Co., Ltd.
Control of the same subject
Beijing Pinggu District Food Staff School
Control of the same subject
Beijing Pinggu Shandongzhuang Grain Storage Co., Ltd.
Control of the same subject
Beijing Green Valley Fenghua Junliang Supply Co., Ltd.
Control of the same subject
Beijing Yanqing Grain and Oil Co., Ltd.
Control of the same subject
Beijing Jingliang Longqing Trading Co., Ltd.
Control of the same subject
Beijing Badaling Food Factory
Control of the same subject
Beijing Yanqing Grain Administration Office
Control of the same subject
Beijing Longqing Food Storage Co., Ltd.
Control of the same subject
Beijing Longqing Xiadu Junliang Supply Co., Ltd.
Control of the same subject
Beijing Kangtuo Feed Processing Co., Ltd.
Control of the same subject
Beijing Yanqing Chenglong Engineering Company
Control of the same subject
Beijing Haoliheng Grain and Oil Trading Co., Ltd.
Control of the same subject
Beijing Tongzhou District Grain and Oil Trading Co., Ltd.
Control of the same subject
Beijing Jingliang Yunhe Grain and Oil Trading Co., Ltd.
Control of the same subject
Beijing Jingliang Luhe Food Storage Co., Ltd.
Control of the same subject
Beijing Tongzhou District Oil Co., Ltd.
Control of the same subject
Beijing Yonghe Xincheng Cereals and Oils Supply Co., Ltd.
Control of the same subject
Beijing Daxing District Cereals and Oils Co., Ltd.
Control of the same subject
Beijing Jingliang Xingda Grain and Oil Trading Co., Ltd.
Control of the same subject
Beijing Niannian Haohe Junliang Supply Station
Control of the same subject
Beijing Xingliang Daxinzhuang Grain Purchase and Sale Co.,
Control of the same subject
Ltd.
Beijing Xingliang Nanhongmen Grain Purchase and Sale Co.,
Control of the same subject
Ltd.
Beijing Daxing National Grain Reserve
Control of the same subject
Beijing Xingliang Zhangziying Grain Storage Co., Ltd.
Control of the same subject
Beijing Xingliang Fengheying Grain Purchase and Sales Co.,
Control of the same subject
Ltd.
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Names of other related parties Relationship between other related parties and the company Beijing Daxing Beizang Village Grain Storage Co., Ltd.
Control of the same subject
Beijing Xingliang lixian Grain Storage Co., Ltd.
Control of the same subject
Beijing Xingliang Dingfuzhuang Grain Storage Co., Ltd.
Control of the same subject
Beijing Daxing Weishanzhuang Grain Storage
Control of the same subject
Beijing XingliangAn’ding Food Storage Co., Ltd.
Control of the same subject
Beijing Nangezhuang Grain Purchase and Sale Station
Control of the same subject
Beijing Daxing Flour Industry Co., Ltd.
Control of the same subject
Beijing Zhenhua Xingliang Information Consulting Co., Ltd.
Control of the same subject
Beijing Daxing Caiyu Grain Storage
Control of the same subject
Beijing Xingliang Banbidian Grain Purchase and Sale Co., Ltd.
Control of the same subject
Beijing Xingliang Enterprise Management Service Co., Ltd.
Control of the same subject
Beijing Xingliang Qingyundian Grain Storage and Storage Co.,
Control of the same subject
Ltd.
Beijing Daxing Yufa Grain Storage Co., Ltd.
Control of the same subject
Beijing Panggezhuang Grain Purchase and Sale Station
Control of the same subject
Beijing Xing Fashion Trading Company
Control of the same subject
Huabei Jinghai Industrial Corporation
Control of the same subject
Beijing Academy of Grain Sciences
Control of the same subject
Beijing Southwest Suburb Grain Storage Co., Ltd.
Control of the same subject
Beijing Jingliang Jinfeng Grain and Oil Trading Co., Ltd.
Control of the same subject
Beijing Southwest Suburb Grain Warehouse Co., Ltd.
Control of the same subject
Beijing Maliandao Grain and Oil Special Supply Station Co.,
Control of the same subject
Ltd.
Beijing GrainStorage&Transportation and Trade Co., Ltd.
Control of the same subject
Jingliang (Zhangzhou Bohai New Area) Logistics Co., Ltd.
Control of the same subject
Beijing Guchuan Food Co., Ltd.
Control of the same subject
Qingdao Guchuan Food Co., Ltd.
Control of the same subject
Hebei Guchuan Food Co., Ltd.
Control of the same subject
Shanxi Guchuan Food Co., Ltd.
Control of the same subject
Beijing Guchuan Fuxing Food Co., Ltd.
Control of the same subject
Beijing South Suburb Grain Storage
Control of the same subject
Beijing Kesai Industry and Trade Group
Control of the same subject
Beijing Guchuan Grain Distribution Center
Control of the same subject
Henan Jingliang Grain Industry Co., Ltd.
Control of the same subject
Yushu Xianfeng Fumin Trading Co., Ltd.
Control of the same subject
Beijing Jingliang Shunxing Cereals and Oils Co., Ltd.
Control of the same subject
Beijing Jingliang Economy and trading Co., Ltd.
Control of the same subject
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Names of other related parties Relationship between other related parties and the company Beijing Shunyi Grain and Oil Co., Ltd.
Control of the same subject
Beijing Jingcheng Automobile Driving School
Control of the same subject
Beijing Jingdu Weishi Grain and Oil Supply Co., Ltd.
Control of the same subject
Beijing Shunyi Grain Storage Co., Ltd.
Control of the same subject
Beijing Shunyi Tiejiangying Grain Storage Co., Ltd.
Control of the same subject
Beijing Shunyi Shangnian Grain Storage Co., Ltd.
Control of the same subject
Beijing Shunyi Wanggezhuang Grain Storage Co., Ltd.
Control of the same subject
Beijing Longsheng Zhongwang Breakfast Co., Ltd.
Control of the same subject
Beijing Shunyi Yangzhen Grain Storage Co., Ltd.
Control of the same subject
Beijing Longsheng Zhongwang Food Co., Ltd.
Control of the same subject
Beijing Yuma Motor Vehicle Training Field Co. Ltd.
Control of the same subject
Beijing Northeast Suburb Grain Storage Co., Ltd.
Control of the same subject
Juye Jingcheng Grain Reserve Co., Ltd.
Control of the same subject
Beijing Tianhe Jingu GrainDistribution&Marketing Co., Ltd.
Control of the same subject
Beijing Jingdu Jingu Grain Purchase and Sales Co., Ltd.
Control of the same subject
Beijing Northwest Suburb Grain Storage
Control of the same subject
Beijing Northwest Suburb Grain Warehouse
Control of the same subject
Beijing Zidibing Grain and Oil Supply Station
Control of the same subject
Beijing Jingliang Beifang Grain and Oil Trading Co., Ltd.
Control of the same subject
Hinggan League gurun Grain and Oil Trading Co., Ltd.
Control of the same subject
Shandong Fukuan Biological Engineering Co., Ltd.
Control of the same subject
Beijing Jingliang Electronic Commerce Co., Ltd.
Control of the same subject
Jingliang diandaowang (Beijing) Trading Co., Ltd.
Control of the same subject
Beijing Jingliang Xingye Asset Management Center
Control of the same subject
Beijing Dahongmen Grain Storage
Control of the same subject
Longde Land Co., Ltd.
Control of the same subject
Beijing Longde Business Management Co., Ltd.
Control of the same subject
Jingliang (Tianjin) Trading Development Co., Ltd.
Control of the same subject
Tianjin Guchuan Investment Development Co., Ltd.
Control of the same subject
Huabei Jinghai Tianjin Industrial Company
Control of the same subject
Jinghai Petrochemical (Tianjin) Co., Ltd.
Control of the same subject
Jingliang (Tianjin) Electronic Commerce Co., Ltd.
Control of the same subject
Tianjin Hongda International Freight Forwarding Company
Control of the same subject
Tianjin Hongda Customs Brokers
Control of the same subject
Beijing Nanyuan Vegetable Oil Factory
Control of the same subject
Beijing Tianda Grain and Oil Trading Company
Control of the same subject
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Names of other related parties Relationship between other related parties and the company Beijing Sesame Oil Factory
Control of the same subject
Beijing Guxiangyuan Property Management Center
Control of the same subject
Beijing Dahongmen Oil Factory
Control of the same subject
Beijing Jingliang Dacang Grain and Oil Trading Co., Ltd.
Control of the same subject
Jingliang Huayuan (Beijing) High-tech Agricultural
Control of the same subject
Technology Co., Ltd.
Beijing Jingliang Real Estate Co., Ltd.
Control of the same subject
Beijing Damofang Flour Co., Ltd.
Control of the same subject
Shenzhen Xingu Trading Co., Ltd.
Control of the same subject
Beijing Maisui Hotel Management Co., Ltd.
Control of the same subject
Beijing Jingliang Xinda Property Management Co., Ltd.
Control of the same subject
Beijing Jingliang Taiyu Real Estate Co., Ltd.
Control of the same subject
Beijing Jingliang Taixing Real Estate Co., Ltd.
Control of the same subject
Beijing Jingliang Taihe Real Estate Co., Ltd.
Control of the same subject
Beijing Miyun District Cereals and Oils Co., Ltd.
Control of the same subject
Beijing Jingliang Yuyang Grain and Oil Trading Co., Ltd.
Control of the same subject
Beijing Yanyu Hengyuan Industry and Trading Co., Ltd.
Control of the same subject
Beijing Juncheng Nuoyuan Grain& Oil Purchase and Sale Co.,
Control of the same subject
Ltd.
Beijing Baoyi Grain and Oil Reserve Co., Ltd.
Control of the same subject
Beijing Jingliang Logistics Co., Ltd.
Control of the same subject
Beijing Jingliang Gurun Trading Co., Ltd.
Control of the same subject
Tai’an County Jingliang jinyuan Grain Storage Co., Ltd.
Control of the same subject
Huinan County JinyuanPing‘an Grain Storage Processing Co.,
Control of the same subject
Ltd.
Qinhuangdao Huanjing Energy Co., Ltd.
Control of the same subject
Beijing Great Wall Food Factory
Control of the same subject
Beijing Haidian Xijiao Cereal and Oil Supply Station Co., Ltd.
Control of the same subject
Beijing Jingliang Jinyuan Trading Co., Ltd.
Control of the same subject
Huabei Jinghai Yongchun Architectural Coating Factory
Control of the same subject
Beijing West Suburb Grain Warehouse
Control of the same subject
Beijing Jingliang Zhihe Co., Ltd.
Control of the same subject
Beijing Jingliang Lvgu Trading Co., Ltd.
Control of the same subject
Tongliao Dacang Grain Trading Co., Ltd.
Control of the same subject
Guangdong Jingliang Grain and Oil Trading Co., Ltd.
Control of the same subject
Beijing Zhibohui Architectural Design Institute
Control of the same subject
Shandong Jingliang Xingmao Trading Co., Ltd.
Control of the same subject
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Names of other related parties Relationship between other related parties and the company Qufu Medicinal Accessories Co., Ltd.
Control of the same subject
Heilongjiang Yuanfa Grain Logistics Co., Ltd.
Control of the same subject
Beijing Grain Group Finance Co., Ltd.
Control of the same subject
Jingliang Longjiang Biological Engineering Co., Ltd.
Control of the same subject
Beijing Xinxing Shunfa Asset Management Co., Ltd.
Control of the same subject
Beijing Wanfa Shunxing Asset Management Co., Ltd.
Control of the same subject
Beijing Jiubo Culture Development Co., Ltd. Original subsidiary
Shanghai Rongxin Real Estate Co., Ltd. Original subsidiary
Shanghai Haishang Mingzhu Property Management Co., Ltd. Original subsidiary
Hebei Zhengshi Qinghui Real Estate Development Co., Ltd. Original subsidiary
Hainan Zhujiang Property Hotel Management Co., Ltd. Original subsidiary
Hainan Zhujiang Electrical and Mechanical Engineering Co.,
Original subsidiary
Ltd.
Hainan Zhujiang Engineering Co., Ltd. Original subsidiary
Hainan Zhujiang Property Cleaning Co., Ltd. Original subsidiary
Hubei Zhujiang Real Estate Development Co., Ltd. Original subsidiary
Wuhan Zhujiang Meilin Hotel Management Co., Ltd. Original subsidiary
Mudanjiang Zhujiang Wanjia Tourism Investment
Original subsidiary
Development Group Co., Ltd.
Mudanjiang Wanjia Star Hotel Co., Ltd. Original subsidiary
Mudanjiang Jingbohu Zhujiang Wanjia Hotel Co., Ltd. Original subsidiary
Hailin Wanjia Xuexiang Holiday Hotel Co., Ltd. Original subsidiary
Harbin Wanjia Travel Agency Co., Ltd. Original subsidiary
Beijing Jiubo Culture Development Co., Ltd. Original subsidiary
Shanghai Rongxin Real Estate Co., Ltd. Original subsidiary
Shanghai Haishang Mingzhu Property Management Co., Ltd. Original subsidiary
Hebei Zhengshi Qinghui Real Estate Development Co., Ltd. Original subsidiary
Beijing Zhongjia Solar Energy Technology (Group) Co., Ltd. Controlled by original controlling shareholder
Beijing Wanfa Real Estate Development Co., Ltd. Original controlling shareholder
Mudanjiang Urban Development and Construction Co., Ltd. Under common control of original shareholder
Sanya Wanjia Industrial Co., Ltd. Original associated enterprise
4. Related party transactions
(1)Related transactions for purchase and sale of goods, provision and acceptance of services
①Procurement of goods/Acceptance of services
|||
|-|-|
|Details of relatedtransactions|CurrentAmount|
|Goods purchase||

Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
|||
|-|-|
|Details of relatedtransactions|CurrentAmount|
|Goods purchase||
|Goods purchase|16,826,139.99|
|Goods purchase|369,821.34|
|Goods purchase||
|Goods purchase|978,017.54|
|Goods purchase||
|Goods purchase||
|Goods purchase|230,892.20|
|Goods purchase||

 Explanation: the company's related party adopts market pricing principle.
②Sale of goods / provision of labor services
|||
|-|-|
|Details of relatedtransactions|CurrentAmount|
|Sales of goods|378.38|
|Sales of goods|945.95|
||1,690.27|
||6,477.88.|
|Sales of goods|6,210,157.05|
|Sales of goods|5,415,514.73|
|Sales of goods|86,230.93|
|Sales of goods|1,699,989.56|
|Sales of goods||
|Sales of goods|4,729.73|
|Sales of goods|22,685.84|
|Sales of goods|28,818,146.97|
|provision of laborservices|12,309.25|
|Sales of goods||
|Sales of goods||
|Sales of goods|1,679.75|
|Sales of goods|8,829,177.86|
|Sales of goods||
|Sales of goods|6,120,835.80|
|Sales of goods|4,164,074.71|
|Sales of goods|669,425.63|
|Sales of goods|2,090,831.28|

Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
|||
|-|-|
|Details of relatedtransactions|CurrentAmount|
|Sales of goods||
|Sales of goods||
|Sales of goods||
|Sales of goods||
|Sales of goods||
|Sales of goods|38,044.38|
|Sales of goods|751,542.68|
|Sales of goods||
|Sales of goods||
|Sales of goods||
|Sales of goods|3,410.61|
|Sales of goods|906.19|
|Sales of goods||
|Sales of goods|19,666.44|
|Sales of goods||
|Sales of goods|875,593.22|
|Sales of goods||
|Sales of goods||
|Sales of goods||
|Sales of goods||
|Sales of goods|144,945.40|
|Sales of goods||
|Sales of goods||
|Sales of goods||
|Sales of goods||
|Sales of goods||
|Sales of goods||
|Sales of goods|6,964.84|
|Sales of goods|685,368.72|
|Sales of goods|5,892.38|
|Sales of goods||
|Sales of goods|168,394.31|
|Sales of goods||
|Sales of goods|29,248.18|
|Sales of goods||

Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
|||
|-|-|
|Details of relatedtransactions|CurrentAmount|
|Sales of goods||
|Sales of goods|685.44|
|Sales of goods||
|Sales of goods|770,810.81|
|Sales of goods||

 Explanation: the company's related party adopts market pricing principle.
(2) Related lease conditions
① When the company is a lessor
|||
|-|-|
|Type of leasingassets|Rental income confirmedin this period|
|Premises|13,333,333.33|
|Car rental|21,760.00|
|Premises|206,532.60|

②When the company is a lessee
|||
|-|-|
|Type of leasingassets|Rental fees confirmedin this period|
|Premises|2,379,982.52|

 (3)Guarantees provided from and to related parties
① The Company as a guarantor
||||
|-|-|-|
|Guaranteeamount|Startingdate|Due date|
|710,000,000.00|2017.5.1|Loan: 2018.9.26, 2018.6.11, 2018.6.6|
|||Guarantee:2018.4.30|
|200,000,000.00|2017.6.1|Loan has been paid off|
|||Two years from the principal debtoccurred|
|440,000,000.00|2017.9.7|Loan: 2018.3.7|
|||Guarantee: 218.9.6|
|100,000,000.00|2017.9.6|No guaranteed loan is used|
|||Two years from the principal debtoccurred|
|88,000,000.00|2017.12.18|No guaranteed loan is used|
|||Two years from the principal debtoccurred|

Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
② The Company as the guaranteed party
||||
|-|-|-|
|Guarantee amount|Starting date|Due date|
|38,500,000.00|2012.12.4|2017.12.4|

Note: Guarantees provided from and to related parties, all guarantee loans are borrowed by the subsidiary Jingliang (Tianjin) Grain and Oil Industry Co., Ltd. from Tianjin Binhai Branch of China Zheshang Bank, with a loan amount of RMB 220,000,000.00, from December 4, 2012 to December 4, 2017 at an interest rate announced by the People's Bank of China in the same period. The loan contract No. is 110016 Zheshang Yingu Jie Zi 2012 No. 00001, the guarantee contract No. is 110016 Zheshang Yingu Baozi 2012 No. 00004, and the guarantor is Beijing Grain Group Co., Ltd. As of April 26, 2017, the loan has been fully paid off and the guarantee has been fulfilled.
(4) Related party funding
①As of December 31, 2017, the balance of loan principal of the Company to Beijing Wanfa Real Estate Development Co., Ltd. was RMB 0.00 and the balance of interest payable was RMB 38,227,058.49.
② As of December 31, 2017, the balance of loan principal of the Company to Beijing Grain Group Co., Ltd. was RMB 179,000,000.00, and the balance of interest payable was RMB 8,162,049.99.
(5) Assets transfer and debt restructuring with related parties
|||
|-|-|
|Item|Current transaction amountconfirmed|
|Income from disposingsubsidiary||
|Demolitioncompensation income||
|Demolitioncompensation income|13,192,806.89|

(6) Compensation for key management personnel
Company：Million
||
|-|
|Current amount|
|317.81|

 (7) Other related party transactions
|||
|-|-|
|Item|Current transactionamount confirmed|
|Utilities, informationnetwork fees|21,674.53|
|Trademark feeincome|11,407.08|
|Trademark feeincome|2,904,815.66|
|Trademark feeincome|422,670.75|
|Service fee income|141,509.43|
|Sales of goods|78,000.00|

Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
|||
|-|-|
|Item|Current transactionamount confirmed|
|Utilities||
|Interest income||
|Interest income||
|Interest income||
|Interest income||
|Interest income||
|Interest income||
|Interest income||
|Interest income||
|Interest income||
|Interest income||
|Interest income||
|Interest income||
|Interest income||
|Interest income||
|Interest expenses||
|Interest expenses||
|Interest expenses||
|Interest expenses||
|Interest expenses||
|Interest expenses||
|Interest expenses||
|Interest expenses||
|Interest expenses||
|Interest expenses||
|Interest expenses||
|Interest expenses||
|Interest expenses||
|Interest expenses||
|Interest expenses||
|Interest expenses||

Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
6. Receivables and payables with related parties
(1) Receivables
||||
|-|-|-|
|Ending balance|||
|Bookbalance|Bad debtreserves|Book balance|
|256,270.00||17,750,911.96|
|265,224.00||703,676.00|
|1,025,540.00||1,058,232.80|
|294,009.00||384,323.00|
|991,912.00||1,107,886.00|
|||379,400.00|
|||34,800.00|
|||130,100.00|
|||61,000.00|
|||4,250.00|
|1,679,284.63|||
|340,000.00|||
|200.00|||
|||18.100.00|
|28,204.00||24,868.30|

(2) Payables
||
|-|
|Ending balance|
|531,374.78|
|3,586,021.00|
|70,000.00|
|1,133,732.83|
|11,404,670.60|
|187,162,049.99|
|2,550,931.12|

Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
||
|-|
|Ending balance|
|724,450.29|
|505,246.54|
|195,187.20|
|78,000.00|

 XII. Commitments and contingencies
1. Material commitments
(1) Zhejiang Little Prince Food Co., Ltd., a controlling subsidiary of the Company (hereinafter referred to as “Zhejiang Little Prince Company”) signed the "Animation Commissioning Contract" with Jiangsu Kungfu Family Animation Co., Ltd. (hereinafter referred to as “Kung Fu Family Animation Company”) on December 1, 2016. According to the contract, the Kungfu Family Animation Company is entrusted by the Zhejiang Little Prince Company to produce an animated “Little Prince” (tentative title) and is responsible for the completion of the project approval application of the “Little Prince” to the State Bureau of Radio, Film, and Television, and the issuance license of the animation to the relevant department, as well as the production, distribution, and commercialized operations. According to the contract, Zhejiang Little Prince Company will pay an animation production fee of RMB 45 million (including tax) in total according to the actual progress. As of December 31, 2017, RMB 9 million (including tax) of animation production fee was paid.
(2) “Supplementary Agreement to the Profit Compensation Agreement (II)”, signed between the Company and Beijing Grain Group Co., Ltd. and Beijing State-owned Capital Operation and Management Center on March 16, 2017, stipulated that Beijing Jingliang Foods Co., Ltd. (hereinafter referred to as “Jingliang Foods”) had promised that its net profits in 2017, 2018 and 2019 will be not less than RMB 130.0115 million, RMB 150.037 million and RMB 162.165 million, respectively.
The actual net profit of Jingliang Foods in the commitment period will be calculated according to the following standards:
① The preparation of the financial statements of the Jingliang Foods and its subsidiaries shall comply with the requirements of the "Accounting Standards for Business Enterprises" and other laws and regulations and be consistent with the Company's accounting policies and accounting estimates;
② Unless the accounting policies and accounting estimates are stipulated by laws and regulations or changed by the Company, it shall not change the accounting policies and accounting estimates of Jingliang Foods and its subsidiaries without the approval of the competent authority of the Jingliang Foods within the commitment period;③ The net profit amount refers to the net profit attributable to shareholders of the parent company after deducting extraordinary gains and losses in the consolidated financial statement. If there is share-based payment in accordance with the accounting standards before the completion of the transaction, the net profit amount for the year shall be calculated based on the net profit after the impact of the aforementioned share-based payment is excluded. The cumulative committed net profits and cumulative actual net profits in each year will also be
calculated based on the cumulative committed net profits and accumulated actual net profits after the
aforementioned share-based payment is excluded.
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
(3) According to “The Framework Contract for the Trading of Shares of Zhejiang Little Prince Food Co., Ltd. and Related Transactions” signed by the subsidiary Beijing Jingliang Foods Co., Ltd. (hereinafter referred to as "Beijing Jingliang Foods Company"), Mr. Wang Yuecheng and Zhejiang Little Prince Food Co., Ltd. (hereinafter referred to as "Zhejiang Little Prince Company") on August 11, 2015, Mr. Wang Yuecheng promised that Zhejiang Little PrinceCompany’s compounded annual growth rate of net profit during the commitment period (including the extra performance guarantee period), ie. four consecutive years in 2015, 2016, 2017, and 2018, will be not less than10%, and Zhejiang Little Prince Company will strive to reach20%.
Within 90 days from the end of each fiscal year in the performance guarantee period, Jingliang Foods Company and Mr. Wang Yuecheng shall jointly appoint auditors with relevant qualifications to audit the net profit of Zhejiang Little Prince Company. If the profit growth is lower than the10% compound annual growth rate promised by Mr. Wang Yuecheng, the performance compensation amount will be calculated according to the following criteria:
Net profit compensation: During the performance guarantee period, Mr. Wang Yuecheng shall ensure that the average annual net profit of Zhejiang Little Prince Company will be not less than RMB 60,749,800. If the total net profit of four years is less than RMB 242,999,200, Mr. Wang Yuecheng will compensate in cash to Zhejiang Little Prince Company for twice the difference between total net profit of four years and RMB 242,999,200.
Growth compensation: During the performance guarantee period, Mr. Wang Yuecheng shall ensure that the total net profit of Zhejiang Little Prince Company for four years is not less than RMB 310,133,900, which is the sum of RMB 66,824,800 in 2015, RMB 73,507,300 in 2016, RMB 80,858,000 in 2017 and RMB 88,843,800 in 2018. If the total net profit for the four years is less than RMB 310,133,900, Mr. Wang Yuecheng will compensate in cash to Zhejiang Little Prince Company the difference between the sum of the actual net profit of four years and RMB 310,133,900.
Performance Awards: Jingliang Foods Company agrees that during the performance guarantee period, if the sum of the audited net profit of Zhejiang Little Prince Company in the four years is higher than RMB 310,133,900, the cumulative performance awards shall be calculated according to the different circumstances listed in the following table.
Unit: RMB Ten thousand
|||
|-|-|
|Annual compoundedgrowth rate: A|Total net profits in four years: B|
|10%≤A＜15%|31,013.39≤B＜34,884.84|
|15%≤A＜20%|34,884.84≤B＜39,132.64|
|A≥20%|B≥39,132.64|

 The above performance awards were awarded to Mr. Wang Yuecheng and his management team by Zhejiang Little Prince Company.
After the end of the performance guarantee period, all parties shall pay for the compensations or rewards after the auditors jointly recognized and hired by Jingliang Foods Company and Mr. Wang Yuecheng have finished the total auditing accounts for the previous four years and calculations in accordance with the agreement before June 30, 2019. Performance compensation and performance awards shall be accounted for in the undistributed profits of Zhejiang Little Prince Company in accordance with the relevant requirements of accounting standards.
Pursuant to the “Supplementary Agreement to the Framework Contract for the Trading of Shares of Zhejiang Little
Prince Food Co., Ltd. and Related Transactions” signed by Jingliang Foods, Mr. Wang Yuecheng and Zhejiang
Little Prince Company on June 18, 2016, the three parties agreed to accrue the performance awards to Zhejiang
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Little Prince Company and expense it on thecompany’s financial statement under the premise of performance commitments.
During the performance guarantee period, Jingliang Foods Company and Mr. Wang Yuecheng shall jointly appoint an auditor with relevant qualifications to audit the actual performance and net profit of Zhejiang Little Prince Company and issue special audit report within 90 days from the end of each fiscal year. After the profit numbers in the special audit report are submitted to the board of directors of the Jingliang Foods Company and approved, the board of directors of the Jingliang Foods Company will issue the resolution for the actual completion of the business performance of Zhejiang Little Prince Company in that year. The actual business results recognized by the Board of Directors of Jingliang Foods Company are calculated by the audited net profit (net of performance awards)+ accrual amount of performance awards (listed as expenses)– recognized deferred tax assets to be recognized for the performance awards. The actual business results are also used as the basis for the calculation of the basis of the consideration for the acquisition of the remaining shares of Zhejiang Little Prince Company by Jingliang Foods Company in accordance with the “Framework Contract for the Trading of Shares of Zhejiang Little Prince Food Co., Ltd. and Related Transactions”.
2. Contingencies
On November 3, 2014, Hainan Fangyuan Law Firm filed a lawsuit in the court regarding the property rights disputes of No. 57, 61, 62, 63, 64 (formerly No. 101-105) parking spaces in the underground parking lot of Zhujiang Plaza, and asked for the ownership certificate of the parking spaces. On July 10, 2017, the property right certificates of the parking spaces were judged in the first instance judgment to be filed under the name of Fangyuan Law Firm. As of the date of the financial report, the Company has filed an appeal.
XIII. Events after the balance sheet date
1. Important non-adjustment matters
(1) On December 13, 2017, the Company and Xinyiyao Tourism Industrial Park Development Co., Ltd., Yujinzhu Agricultural Partnership (general partnership) of Shizhu Tujia Autonomous County and Beijing Jingliang Xinniurunyi Equity Investment Fund (limited partnership) jointly signed a project partnership agreement to jointly develop and construct the Yaowan Town Garden Complex Project in Xinyi City and the land consolidation improvement project. On February 6, 2018, the Company paid an investment of RMB 13.5 million and the project is ongoing.
(2) On January 26, 2018, the Company and Tangshan Caofeidian Agricultural Development Group Co., Ltd. (hereinafter referred to as “Caonongfa Group”) signed a “cooperation agreement” to jointly implement land restoration and agricultural industrialization projects. The Company invested RMB 25.5 million in cash to increase capital of Jingliang (Caofeidian) Agricultural Development Co., Ltd. (hereinafter referred to as “Jingliang Agricultural Development Company”), a wholly-owned subsidiary of Caonongfa Group. After the capital increase is completed, the registered capital of Jingliang Agricultural Development Company is RMB 50 million,51% held by the Company, and49% held by Caonongfa Group. As of the date of this financial report, no actual investment has been made.
(3) On January 26, 2018, the Company signed a “Financial Services Agreement” with Beijing Grain Group Finance Co., Ltd. (hereinafter referred to as “Finance Company”) to further expand the financing channels, reduce financial costs, increase the efficiency of fund use, and maximize the benefits. According to the agreement, the Financial Company provides a series of financial services to the Company within its business scope, including but not limited to deposit, settlement, comprehensive credit services and other businesses that can be performed by financial companies approved by the China Banking Regulatory Commission.
2. Profit distribution
On April 11, 2018, the 8th Board of Directors of the Company convened the 25th meeting to approve the that no annual profit of 2017 will be distributed, which still needs the approval of the general meeting of shareholders.
Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
XIV. Other important issues
1. Annuity plan
The Company's controlling shareholder, Beijing Grain Group Co., Ltd. (hereinafter referred to as “Jingliang Group”), received the “Reply to Establishing an enterprise annuity plan by Beijing Grain Group Co., Ltd.” (Jing Guo Zi No.[2013] No. 224) from the State-owned Assets Supervision and Administration Commission of the Beijing Municipal Government on November 18, 2013, approving that the request of Beijing Grains Group Co., Ltd. for “Reporting of Enterprise Annuity” (Jing Liang Qi[2013] No. 258) is in compliance with the "Enterprise Annuity Trial Regulations" (Order No. 20 of Ministry of Labor and Social Security) and the “Guiding Opinions on the Implementation of the Enterprise Annuity System for Beijing State-owned Enterprises” (Jing Guo Zi Kao He Zi[2006] No. 77), and agreeing that the supplementary pension insurance and various commercial insurance established by the company prior to the implementation of the annuity plan will terminate on its own initiative. Any employee who participates in an enterprise pension plan will no longer enjoy welfare benefits outside of the unified pension insurance.
On November 20, 2013, Jingliang Group received the “Reply to the Record on the Corporate Pension Plan of Beijing Grain Group Co., Ltd.” from the Bureau of Human Resources and Social Security of Xicheng District, Beijing (Xi Ren She Han[2013] No. 71), requiring Beijing Grains Group to strictly implement the scope and standards of payment stipulated in the plan, implement the relevant democratic procedures prescribed by the plan, and actively cooperate with the related departments for supervision and inspection after filing.
On March 14, 2014, the Company obtained the Company Annuity Participation Plan Certificate from Ping An Pension Insurance Co., Ltd., detailed as follows:
The basic information of the Company: The company's name is Beijing Jingliang Foods Co., Ltd. and the Company's annuity No. is C0156482005. The plan was participated from November 18, 2013 and took effect on March 13, 2014. The annuity plan No. of the parent company, Beijing Grain Group Co., Ltd., is C0156482000.
Basic information of the annuity plan: The plan is named Ping An - CITIC Splendid Life Enterprise Annuity Plan. Ping An Pension Insurance Co., Ltd.; is the trustee and account manager and the custodian is China CITIC Bank Corporation. The annuity plan registration number is 99JH20120041 and the annuity plan number is P0807. The plan is a Pooled Occupational Pension Plan.
Investment portfolio: The investment portfolio code is 9155 and the portfolio name is Ping An-CITIC Splendid Life Enhanced Bond Portfolio, with100% investment ratio and CITIC Securities Co., Ltd. as the investment manager.
2. Termination of business
(1) Basic information on termination of business
Amount for the current period
Items
|||||
|-|-|-|-|
|Revenue|Expenses|Total profit|Income taxexpense/benefit|
|177,326.81|226,327.04|-49,000.23||
|174,527,096.69|173,151,446.57|1,375,650.12|1,116,211.95|
|269,253,730.96|211,352,329.24|57,901,401.72|15,854,922.49|
|9,584,631.18|8,934,686.34|649,944.84|206,532.43|
||352,519.78|-352,519.78||
|10,580,918.87|37,556,459.11|-26,975,540.24|-18,276.34|
||2,705,674.71|-2,705,674.71||

Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Amount for the current period
Items
|||||
|-|-|-|-|
|Revenue|Expenses|Total profit|Income taxexpense/benefit|
|2,055,616.77|2,013,922.66|41,694.11|4,496.03|

 Continued 1:
Amount for the current period
Items
|||||
|-|-|-|-|
|Revenue|Expenses|Total profit|Income taxexpense/benefit|
|13,158,551.74|14,803,055.30|-1,644,503.56|1,091.74|
|260,616,763.29|262,403,503.86|-1,786,740.57|858,106.54|
|661,739,786.04|543,530,454.24|118,209,331.80|29,583,773.44|
|2,645,101.66|3,081,469.45|-436,367.79||
||850,406.10|-850,406.10||
|20,125,096.45|15,537,668.60|4,587,427.85|-31,330.86|
||8,126,426.69|-8,126,426.69||
|3,649,593.13|3,641,996.54|7,596.59|2,326.91|

 Continued 2:
||||||
|-|-|-|-|-|
|Amount for current period|||||
|Net cash flowfrom operatingactivities|Net cash flowfrom investmentactivities|Net cash flowfrom financingactivities|Net cash flowfrom operatingactivities|Net cash flowfrom investmentactivities|
|1,039,162.90|-4,194,150.63||-2,773,381.05|2,013,411.18|
|-1,467,256.12|-380,236.71||-4,389,570.73|-843,294.49|
|-21,851,199.59||-9,180,000.00|270,378,933.94|-64,746.00|
|-12,294,327.18|8,612,012.51||-2,216,013.22|1,427,315.18|
|1,208.97|||-118,206.04||
|-2,154,234.57|-610,000.00|13,433,590.02|6,237,743.12|-474,497.65|
|-1,262.34|||-77,650.49||
|-69,430.40|||365,479.52|-8,030.00|

Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
(2) The profit and loss from continuing operations attributable to owners of the parent company for the current period was RMB 195,974,221.49 (prior period: RMB 232,484,589.36), and the operating profit and loss from terminated business was RMB 12,722,069.27 (prior period: RMB 80,906,433.23).
3、Segment Information
（1）Determination Basis and Accounting Policy of Report Segment
According to company's internal organizational structure, management requirements, and internal reporting system, the company's business are divided into operating divisions such as food processing, oils and fats, etc. The management of the company regularly evaluates the operating results of such divisions to determine allocation of resources and evaluation of their performances. Segment reporting information is disclosed based on accounting policies and measurement standards adopted by each segment when reporting to management. Such measurement bases are consistent with the accounting and measurement basis used in preparation of financial statements.
（2）Financial Information in Reportable Segment
||||||
|-|-|-|-|-|
|Food processing|Oil and fat|Propertymanagement|Others|Offset|
|829,093,442.40|6,933,777,068.41|268,269,884.72|277,552,654.62|-391,054,006.02|
|581,010,692.16|6,639,714,158.98|155,208,349.16|182,821,596.18|-377,426,343.90|
|136,110,236.72|121,272,382.94|57,849,230.65|169,087,691.04|-206,339,961.57|
|105,932,874.31|91,849,506.11|42,046,479.23|170,074,057.96|-280,299,750.25|
|780,410,532.58|3,847,486,660.73||5,588,471,707.11|-4,133,985,049.19|
|158,682,307.88|2,714,186,172.58||1,392,462,213.92|-783,369,257.06|

XV. Notes to financial statement items of the Parent Company
For the noted items below (including major notes on company financial statements), 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 2017, and the previous period refers to 2016, unless otherwise specified.
1. Accounts receivable
(1) Classified disclosure of account receivables
Ending balance
|||||
|-|-|-|-|
|Book balance||Bad debt reserves||
|Amount|Proportion(%)|Amount|Proportion(%)|
|126,420.00||17,031.00||

Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Ending balance
|||||
|-|-|-|-|
|Book balance||Bad debt reserves||
|Amount|Proportion(%)|Amount|Proportion(%)|
|126,420.00|100.00|17,031.00|13.47|
|126,420.00|100.00|17,031.00|----|

 Continued:
Beginning balance
|||||
|-|-|-|-|
|Bookbalance|Bad debt reserves|||
|Amount|Proportion(%)|Amount|Proportion(%)|
|8,856,207.60||8,856,207.60||
|8,856,207.60|74.16|8,856,207.60|100.00|
|1,187,881.81||155,795.98||
|1,187,881.81|9.95|155,795.98|13.12|
|1,898,690.60|15.90|1,898,690.60|100.00|
|11,942,780.01|100.00|10,910,694.18|----|

①Account receivable accruing bad debt reserves according to ageing analysis
Ending balance
Ageing
|||
|-|-|
|Account receivable|Bad debt reserves|
|3,000.00|60.00|
|3,000.00|60.00|
|51,420.00|2,571.00|
|72,000.00|14,400.00|

Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Ending balance
Ageing
|||
|-|-|
|Account receivable|Bad debt reserves|
|126,420.00|17,031.00|

 Continued:
Beginning balance
Ageing
|||
|-|-|
|Account receivable|Bad debt reserves|
|51,420.00|1,028.40|
|51,420.00|1,028.40|
|918,807.39|45,940.37|
|217,654.42|108,827.21|
|1,187,881.81|155,795.98|

 (2) Bad debt reserves accrued, recovered or reversed in the current period
Bad debt reserve for the current period is RMB 12,402.60.
(3) Top 5 clients in account receivable
|||
|-|-|
|AccountreceivableEnding balance|Proportion of totalamount of endingbalance in accountreceivables (%)|
|108,000.00|85.43|
|18,420.00|14.57|
|126,420.00|100.00|

 2. Other receivables
（1）Detailed disclosure of other receivables
Ending balance
|||||
|-|-|-|-|
|Book balance||Bad debt reserves||
|Amount|Proportion (%)|Amount|Proportion (%)|
|63,754,181.75||3,177,889.13||

Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Ending balance
|||||
|-|-|-|-|
|Book balance||Bad debt reserves||
|Amount|Proportion (%)|Amount|Proportion (%)|
|63,754,181.75|100.00|3,177,889.13|4.98|
|63,754,181.75|100.00|3,177,889.13|-----|

 Continued:
Beginning balance
|||||
|-|-|-|-|
|Book balance||Bad debt reserves||
|Amount|Proportion(%)|Amount|Proportion(%)|
|2,000,000.00||||
|406,838,943.39||139,476,136.40||
|408,838,943.39|49.22|139,476,136.40|34.12|
|417,682,205.01||95,367,093.30||
|107,303.90||||
|417,789,508.91|50.30|95,367,093.30|22.83|
|3,963,362.46|0.48|3,963,362.46|100.00|
|830,591,814.76|100.00|238,806,592.16|-----|

① Other receivables accruing bad debt reserves according to ageing analysis
Ending balance
Ageing
|||
|-|-|
|Account receivable|Bad debt reserves|
|2,122.90||
|1,573,793.63|31,475.87|
|1,575,916.53|31,475.87|
|62,128,265.22|3,106,413.26|
|50,000.00|40,000.00|
|63,754,181.75|3,177,889.13|

Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
Continued:
Beginning balance
Ageing
|||
|-|-|
|Account receivable|Bad debt reserves|
|166,613,450.01|3,332,269.00|
|166,613,450.01|3,332,269.00|
|20,000,000.00|1,000,000.00|
|30,085,000.00|6,017,000.00|
|77,370,266.00|23,211,079.80|
|123,613,489.00|61,806,744.50|
|417,682,205.01|95,367,093.30|

 (2) Bad debt reserves accrued, recovered or reversed
Bad debt reserve for the current period is RMB 822,569.60.
(3) Other receivables categorized according to nature
||
|-|
|Ending balance|
|182,904.46|
|63,517,970.62|
|53,306.67|
|63,754,181.75|

 (4) Top 5 clients in other account receivables
|||||
|-|-|-|-|
|Category|Endingbalance|Ageing|Proportion of totalamount of ending balancein other receivables (%)|
|Intercoursefunds|55,940,000.00|Between 1 yearand 2 years|87.74|
|Intercoursefunds|4,500,000.00|Between 1 yearand 2 years|7.06|
|Intercoursefunds|1,768,933.18|Between 1 yearand 2 years|2.77|
|Intercoursefunds|1,280,833.34|Less than 1 year|2.01|
|Intercoursefunds|50,000.00|Between 4 yearand 5 years|0.08|
|-----|63,539,766.52|-----|99.66|

Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
3. Long term equity investment
(1) Classification of long term equity investment
||||||
|-|-|-|-|-|
|Ending balance|||||
|Book balance|Impairmentprovision|Book value|Book balance|Impairmentprovision|
|2,336,639,964.05||2,336,639,964.05|179,420,000.00|110,100,000.00|
||||32,393,800.55||
|2,336,639,964.05||2,336,639,964.05|211,813,800.55|110,100,000.00|

 (2) Investment in subsidiaries
||||||
|-|-|-|-|-|
|Beginningbalance|Increase in thecurrent period|Decrease in thecurrent period|Ending balance|Provision forimpairmentmade in thecurrent period|
|40,000,000.00||40,000,000.00||-40,000,000.00|
|4,900,000.00||4,900,000.00|||
|64,420,000.00||64,420,000.00|||
|60,000,000.00||60,000,000.00||-60,000,000.00|
|5,000,000.00||5,000,000.00||-5,000,000.00|
|5,100,000.00||5,100,000.00||-5,100,000.00|
||2,336,639,964.05||2,336,639,964.05||
|179,420,000.00|2,336,639,964.05|179,420,000.00|2,336,639,964.05|-110,100,000.00|

(3) Investment in associates
||||||
|-|-|-|-|-|
|Beginning balance|||||
||Addinvestment|Reduceinvestment|Investmentincome or lossconfirmed underequity method|Adjustment inothercomprehensiveincome|
|32,393,800.55||32,393,800.55|||
|32,393,800.55||32,393,800.55|||

Continued:
|||||
|-|-|-|-|
|Increase and decrease in the current period|||Ending balance|
|Cash dividendsdeclared or profit|Impairmentprovision|Others||

Hainan Jingliang Holdings Co., Ltd. Notes to 2017 Financial Statements
4. Operating revenue and operating costs
||||
|-|-|-|
|Amount for current period|||
|Revenue|Cost|Revenue|
|2,857.14|302,436.60|1,237,868.46|
|2,857.14|302,436.60|1,237,868.46|

 5. Investment income
||
|-|
|Amount for current period|
|-1,070,860.45|
|75,820,000.00|
|74,749,139.55|

 XVI. Supplementary materials
1.Breakdown of extraordinary gains and losses for the current period
||
|-|
|2017|
|-6,770.67|
|5,626,180.81|
|-11,540,679.54|
|78,507,622.63|
|15,448,644.03|
|6,607,834.37|
|94,642,831.63|
|-7,094,646.47|
|-21,763,867.01|
|65,784,318.15|

 2. Net asset return rate and earnings per share
|||
|-|-|
|Weighted average netasset return rate (%)||
||Basic EPS|
|5.01|0.20|
|4.86|0.13|

Hainan Jingliang Holdings Co., Ltd.
April 13, 2018