HAINAN JINGLIANG HOLDINGS CO., LTD.
ANNUAL REPORT 2018
March 2019
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
HAINAN JINGLIANG HOLDINGS CO., LTD.
ANNUAL REPORT 2018
Part I Important Notes
This Summary is based on the full text of the 2018 Annual Report of Hainan Jingliang Holdings Co., Ltd.
(together with its consolidated subsidiaries, the “Company”, except where the context otherwise requires). In
order for a full understanding of the Company’s operating results, financial position and future development plans,
investors should carefully read the aforesaid full text, which has been disclosed together with this Summary on the
media designated by the China Securities Regulatory Commission (the “CSRC”).
All the Company’s directors have attended the Board meeting for the review of this Report and its summary.
Independent auditor’s modified opinion:
□ Applicable √ Not applicable
Board-approved final cash and/or stock dividend plan for ordinary shareholders for the Reporting Period:
□ Applicable √ Not applicable
The Company has no final dividend plan, either in the form of cash or stock.
Board-approved final cash and/or stock dividend plan for preferred shareholders for the Reporting Period :
□ Applicable √ Not applicable
This Summary has been prepared in both Chinese and English. Should there be any discrepancies or
misunderstandings between the two versions, the Chinese version shall prevail.
Part II Key Corporate Information
1. Stock Profile
Stock name JLKG, JL-B Stock code 000505, 200505
Stock exchange for stock listing Shenzhen Stock Exchange
Used stock name (if any) Pearl River A, Pearl River B
Contact information Board Secretary Securities Representative
Name Zhao Yinhu
Jing Liang Building, NO. 16 East Third Ring
Address
Middle Road, Chaoyang District, Beijing
Fax 010-51672010
Tel. 010-51672029
Email address 593374748@qq.com
2. Principal Activities or Products in the Reporting Period
The Company is principally engaged in oils and oilseeds processing and trading, as well as food production. It
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Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
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 “Little
Prince”, “MS Dong”, “Jianqiang De Tudou” and “Gu Chuan”, among others, with the main products being potato
chips, cakes and pastries and bread.
In 2018, as the China-U.S. trade war escalated, the Company turned to Brazil for the procurement of the major
raw materials for its oils and oilseeds division. This supply source from Brazil, with strong seasonality, a long
transportation distance and unstable quality, caused a considerable rise in cost of sales. Therefore, the oils and
oilseeds division took the initiative to adjust operating strategies, gave play to its industrial chain advantage, and
strengthened every link of the industrial china, so as to offset the hit by the trade war. For 2018, the oils and
oilseeds division recorded main operating revenue of RMB6.472 billion and a profit before tax of RMB131
million, approximately flat with last year.
2018 saw the rising prices of raw and auxiliary materials, as well as a fiercer end-market competition in the snack
food industry. The Company primarily competes with Orion, Dali Foods, Lay’s and Oishi in the areas of fried
potato chips, non-fried potato chips and puffed potato sticks. On the non-fried potato chips market, subsidiary
Xiaowangzi is the second largest brand next to Orion, and the largest brand in the separate package and bulk
segments, with great market potentials. The snack food business adhered to the “Differentiated Asymmetric
Competition Strategy”, deepened the model of “Professional Production + Cultural Creativity + Internet”, as well
as implemented quality product and product transition strategies. As a result, for 2018, the snack food business
reported operating revenue of RMB817 million, up 5.87% year-on-year; and a profit before tax of RMB151
million, representing a 13.07% growth as compared to last year. Meanwhile, thanks to greater efforts in other
cities and product development, as well as the proactive efforts in expanding retail channels, the bread processing
business posted operating revenue of RMB77.26 million, up 26.86% year-on-year.
3. Key Financial Information
(1) Key Financial Information of the Past Three Years
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
□ Yes √ No
Unit: RMB
2018-over-2017 change
2018 2017 2016
(%)
Operating revenue 7,409,124,303.41 7,917,639,044.13 -6.42% 8,723,491,657.31
Net profit attributable to the listed
167,956,581.15 129,603,167.36 29.59% 197,319,239.01
company’s shareholders
Net profit attributable to the listed
company’s shareholders before 127,425,177.20 63,818,849.21 99.67% -72,109,287.22
exceptional items
Net cash generated from/used in
850,167,551.24 -1,379,507,779.66 161.63% 948,330,160.14
operating activities
Basic earnings per share (RMB/share) 0.24 0.2 20.00% 0.31
Diluted earnings per share (RMB/share) 0.24 0.2 20.00% 0.31
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Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
Weighted average return on equity (%) 7.69% 5.01% 2.68% 6.96%
Change of 31 December
31 December 2018 31 December 2017 2018 over 31 December 31 December 2016
2017 (%)
Total assets 4,917,148,996.28 6,082,383,851.23 -19.16% 5,007,343,324.00
Equity attributable to the listed
2,272,469,925.43 2,101,342,683.37 8.19% 1,383,081,876.55
company’s shareholders
(2) Key Financial Information by Quarter
Unit: RMB
Q1 Q2 Q3 Q4
Operating revenue 1,866,527,190.78 1,773,098,788.63 1,899,805,985.97 1,869,692,338.03
Net profit attributable to the listed
31,041,912.71 28,877,082.97 42,345,394.93 65,692,190.54
company’s shareholders
Net profit attributable to the listed
company’s shareholders before 29,930,951.86 27,428,084.65 42,526,321.21 27,539,819.48
exceptional items
Net cash generated from/used in
671,468,699.31 -625,774,156.43 373,889,151.61 430,583,856.75
operating activities
Indicate by tick mark whether any of the quarterly financial data in the table above or their summations differs
materially from what have been disclosed in the Company’s quarterly or interim reports.
□ Yes √ No
4. Share Capital and Shareholder Information at the Period-End
(1) Numbers of Ordinary Shareholders and Preferred Shareholders with Resumed Voting Rights as well as
Holdings of Top 10 Shareholders
Unit: share
Number of Number of preferred
Number of
ordinary shareholders with
Number of preferred
shareholders at resumed voting
ordinary shareholders
38,776 the month-end 37,224 0 rights at the 0
shareholders at with resumed
prior to the month-end prior to
the period-end voting rights at
disclosure of this the disclosure of this
the period-end
Report Report
Top 10 shareholders
Nature of Shareholding Total shares held Restricted Shares in pledge or frozen
Name of shareholder
shareholder percentage at the period-end shares held Status Shares
BEIJING GRAIN GROUP CO., State-owned
LTD.
42.06% 288,439,561 164,877,598
legal person
BEIJING STATE-OWNED
State-owned
CAPITAL OPERATION AND 7.07% 48,510,460 48,510,460
MANAGEMENT CENTER legal person
CHINA DEVELOPMENT BANK State-owned
CAPITAL CO., LTD.
3.33% 22,828,451 0
legal person
Foreign
LI SHERYN ZHAN MING 3.21% 22,002,700 0
natural person
GOLD BUFFALO RUNYING
(TIANJIN) EQUITY
INVESTMENT FUND
MANAGEMENT CO., Other 3.20% 21,972,451 0
LTD.—GOLD BUFFALO
RUNYING (TIANJIN) EQUITY
INVESTMENT FUND (L.P.)
4
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
Domestic
MEI JIANYING 0.38% 2,604,203 0
natural person
Domestic
HU TIANGAO 0.36% 2,436,052 0
natural person
Domestic
DONGYANG HENGDIAN non-state-own
GUARANTY CO., LTD.
0.32% 2,204,976 0
ed legal
person
Domestic
WANG DAO 0.31% 2,145,100 0
natural person
Domestic
ZHANG XIAOXIA 0.28% 1,949,250 0
natural person
Beijing State-Owned Capital Operation And Management Center owns 100% of
Beijing Grain Group Co., Ltd., and Beijing Grain Group Co., Ltd. is a shareholder
Related or acting-in-concert parties among the
of the Company (a 42.06% holding). Apart from that, the Company does not know
shareholders above
whether there are any other related parties or acting-in-concert parties among the
top 10 shareholders.
1. Shareholder Wang Xiaoxing holds 1,776,000 shares in the Company through his
account of collateral securities for margin trading in Soochow Securities Co., Ltd.
Shareholders involved in securities margin
trading (if any) 2. Shareholder Hu Tiangao holds 338,000 shares in the Company through his
account of collateral securities for margin trading in Zheshang Securities Co., Ltd.,
and 2,098,052 shares in the Company through his ordinary securities account.
(2) Number of Preferred Shareholders and Shareholdings of Top 10 of Them
□ Applicable √ Not applicable
No preferred shareholders in the Reporting Period.
(3) Ownership and Control Relations between the Actual Controller and the Company
The State-Owned Assets Supervision and Administration
Commission of the People’s Government of Beijing Municipality
100%
Beijing State-Owned Capital Operation and Management Center
100%
Beijing Capital Agribusiness Group Co., Ltd.
100%
Beijing Grain Group Co., Ltd.
42.06%
Hainan Jingliang Holdings Co., Ltd.
5. Corporate Bonds
Does the Company have any corporate bonds publicly offered on the stock exchange, which were outstanding
before the date of this Report’s approval or were due but could not be redeemed in full?
No.
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Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
Part III Operating Performance Discussion and Analysis
1. Business Overview of the Reporting Period
Is the Company subject to any industry-specific disclosure requirements?
No.
(1) Overall Performance
In face of the generally weak market and industry in 2018, the Company pursued progress amid stability. For the
year under review, the Company recorded operating revenue of RMB7.409 billion, with a profit before tax of
RMB277 million and earnings per share of RMB0.24. By operating division, the oils and oilseeds division
reported main operating revenue of RMB6.472 billion with a profit before tax of RMB131 million; and the food
processing division posted operating revenue of RMB891 million with a profit before tax of RMB155 million.
Beijing Jingliang Food Co., Ltd., a swapped-in asset in a major asset restructuring, registered main operating
revenue of RMB7.409billion, a profit before tax of RMB297 million and a net profit attributable to the Company
as the parent before exceptional items of RMB164 million, fulfilling its 2018 annual profit commitment.
(2) Major Results Achieved
A. Stable and Smooth Operation of Oils and Oilseeds Division
In 2018, the Sino-US trade friction continued to escalate, and the Company began to purchase most raw materials
from Brazil. The costs of the Company in operating increased significantly because of the Brazilian soybeans’
limited supplying season, wide quality range and storage difficulty. Therefore, the oils and oilseeds division took
the initiative to adjust operating strategies, gave play to its industrial chain advantage, and strengthened every link
of the industrial china, so as to offset the hit by the trade war. For 2018, the oils and oilseeds division recorded
main operating revenue of RMB6.472 billion and a profit before tax of RMB131 million, approximately flat with
last year. Firstly, the platform effect has gradually appeared. In terms of the oils and oilseeds division, five major
platforms have been established to effectively integrate various resources and improve the efficiency, including
Risk Control and R&D, Operation of Stocks, Import and Export Trade, Production Management and Product
Marketing. Under the impact of the Sino-US trade war, the five major platforms can support each other and share
various information in order to maximally mitigate the trade war’s impact on various enterprises specialized in
oilseed squeezing. For example, Jingliang Tianjin is capable of squeezing soybeans over 1 million tons in a year
with a profit before tax of RMB30.61 million. Secondly, the structure of small-packed products has been
continuously optimized. As the sales volume of high value-added oils including sunflower oil, linseed oil, olive
oil, non-GMO soybean oil increases 11%, the sales accounts for over 50% for the first time; the sales volume of
ordinary soybean oils with relatively low gross profit rate declines 15% on the year-on-year basis. However, the
adjustment of product structure directly improves the operating benefits, and the profit created by small-packed
oils has largely increased when compared to that last year. Thirdly, the trade business has made a steady progress.
In terms of the oils and oilseeds trade, the future transaction and the stock transaction are combined and the
research on the market is strengthened by using innovative management means to fend off various operating risks.
As a result, the annual sales of oils and oilseeds reached 470,000 tons with the sales revenue of RMB2 billion and
a profit before tax of RMB32.7 million.
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Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
B. The Steady-state Growth of the Food Division
In 2018, the food processing division recorded main main operating revenue of RMB891 million with the
year-on-year growth of 7.47% and a profit before tax of RMB155 million with the year-on-year growth of 13.60%
in the case of continuous influx of strategic competitors and the increased competition in the terminal market,
remaining a steady development momentum. The snack food business adhered to the “Differentiated Asymmetric
Competition Strategy”, deepened the model of “Professional Production + Cultural Creativity + Internet”, as well
as implemented quality product and product transition strategies. As a result, for 2018, the snack food business
reported operating revenue of RMB816 million, up 5.87% year-on-year; and a profit before tax of RMB151
million, representing a 13.07% growth as compared to last year. Meanwhile, thanks to greater efforts in other
cities and product development, as well as the proactive efforts in expanding retail channels, the bread processing
business posted operating revenue of RMB77.26 million, up 26.86% year-on-year.
C. Steady Development of Land Restoration Business
In 2018, No. 1 Document of the Central Committee of the Communist Party of China and the Rural Work
Conference proposed the land restoration and rural complex construction, and the rural revitalization strategy also
mentioned the national strategy, which is an important opportunity for enterprises to enter this field. First, for
Xinyi Yaowan Town project, corresponding equity structure adjustment was made and Shanghai Heheng
Management Consulting Co., Ltd. was involved as a wholly-owned subsidiary of Golden Concord Holdings
Limited (GCL Group). By virtue of obvious advantages in professional operation, it could facilitate the project’s
construction while meeting high standards and achieving high efficiency. Second, for Tangshan Caofeidian
Project, the operation is relatively simple as it is the restoration of mud flat land. At present, the project has been
approved by the Land and Resources Department of Tangshan, and is undergoing the construction bidding. The
project is expected to commence at the end of March in 2019. Subsequently, it’s required to accelerate the
construction of the project, the government’s acceptance and the declaration and sales of indicators of cultivated
land. It is expected to make profits in 2019.
D. Stable and Orderly Basic Management Work
Standardized operation is the basis for the sustainable and healthy development of listed companies. The
Company insists on effectively combining regulatory requirements with corporate operations to form a
standardized and efficient management and control system. First, the Company establishes and improves its
institutional system and has established a complementary system in accordance with the company’s articles of
association, regulations of shareholders’ meeting, board of directors and board of supervisors, company level and
department level. Second, the Company adheres to the economic analysis and the key work supervision
mechanism, always sticks to the monthly and quarterly analysis of its business operation, researches solutions and
supervises job schedule, which has effectively guaranteed the fulfillment of annual operating indicators; according
to The Supervision Work Procedures, various key works must be supervised by means of weekly supervision,
monthly scheduling, quarterly inspection and annual evaluation to effectively guarantee the fulfillment of various
works in the year. Third, the effect of assessment and incentives has been revealed. The penetration-type and full
coverage-type method have been applied to assess various subsidiaries and cover all team members and senior
executives above directors, in which way, the net profit indicators will be strengthened, and the corporate
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Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
performance will be combined with the individual performance. The strict assessment based on indicators has
effectively stimulated the enthusiasm of the management team in making greater achievement.
2. Significant Change to Principal Activities in the Reporting Period
□ Yes √ No
3. Product Category Contributing over 10% of Principal Business Revenue or Profit
√ Applicable □ Not applicable
Unit: RMB
YoY change in YoY change in YoY change in
Gross profit
Product category Operating revenue Operating profit operating revenue operating profit gross profit
margin
(%) (%) margin (%)
Oils and oilseeds 6,471,890,047.04 351,838,500.55 5.44% -1.75% 7.92% 0.49%
Food processing 890,987,143.21 278,908,008.83 31.30% 7.47% 12.43% 1.38%
4. Business Seasonality that Calls for Special Attention
□ Yes √ No
5. Significant YoY Changes in Operating Revenue, Cost of Sales and Net Profit Attributable to the Listed
Company’s Ordinary Shareholders or Their Compositions
□ Applicable √ Not applicable
6. Possibility of Listing Suspension or Termination
□ Applicable √ Not applicable
7. Matters Related to Financial Reporting
(1) YoY Changes to Accounting Policies, Accounting Estimates or Measurement Methods
√ Applicable □ Not applicable
As per the Notice of the Ministry of Finance on Revising and Issuing the Format of 2018 Annual Financial
Statements of General Enterprises (CK [2018] No. 15), the Company adjusted accordingly the format of its
financial statements, as well as the comparative data.
(2) Retrospective Restatements due to Correction of Material Accounting Errors in the Reporting Period
□ Applicable √ Not applicable
No such cases.
(3) YoY Changes to the Scope of Consolidated Financial Statements
√ Applicable □ Not applicable
Compared with 2017, there are two new subsidiaries included in the consolidated financial statements of 2018:
Jingliang Rural Complex Construction and Operation (Xinyi) Co., Ltd. and Jingliang (Caofeidian) Agricultural
Development Co., Ltd.
8
Consolidated Balance Sheet
December 31, 2018
Prepared by: Hainan Jingliang Holdings Co., Ltd. Monetary Unit: RMB Yuan
Item Note Closing Balance Opening Balance
Current assets:
Monetary capital VI.1 924,870,016.78 1,014,438,663.43
Financial assets measured as fair value and the variation included
into current profit and loss
Derivative financial assets VI.2 71,260,414.60 176,699,298.60
Notes receivable and accounts receivable VI.3 97,775,710.11 75,165,127.11
Prepayment VI.4 120,181,442.89 912,843,489.70
Other receivables VI.5 18,256,513.93 75,722,139.87
Inventory VI.6 1,224,186,963.07 1,393,958,764.07
Held-for-sale assets
Non-current assets due within one year VI.7 51,000,000.00
Other current assets VI.8 288,821,816.63 165,867,238.70
Total current assets 2,745,352,878.01 3,865,694,721.48
Non-current assets:
Available-for-sale financial assets VI.9 20,000,000.00 20,000,000.00
Held-to-maturity investment
Long-term receivables
Long-term equity investment VI.10 182,827,226.11 174,589,701.74
Investment real estate VI.11 33,395,101.68 35,008,852.62
Fixed assets VI.12 1,271,803,080.56 1,333,410,146.38
Construction in process VI.13 37,369,757.78 12,737,673.01
Productive biological assets
Oil-and-gas assets
Intangible assets VI.14 383,382,527.68 398,844,032.07
Development expenditure
Goodwill VI.15 191,394,422.51 191,394,422.51
Long-term deferred expenses VI.16 34,671,018.22 33,247,595.28
Deferred income tax assets VI.17 15,330,980.14 14,179,072.07
Other non-current assets VI.18 1,622,003.59 3,277,634.07
Total non-current assets 2,171,796,118.27 2,216,689,129.75
Total assets 4,917,148,996.28 6,082,383,851.23
Legal Representative:Shaoling Li Person in Charge of Finance:Ying Guan Person in Charge of Accounting Agencies: Quanli Liu
Consolidated Balance Sheet (Continued)
December 31, 2018
Prepared by: Hainan Jingliang Holdings Co., Ltd. Monetary Unit: RMB Yuan
Item Note Closing Balance Opening Balance
Current liabilities:
Short-term borrowings VI.19 1,437,715,080.91 2,007,171,362.73
Financial liabilities measured as fair value and the
variation included into current profit and loss
Derivative financial liabilities
Notes payable and accounts payable VI.20 140,564,713.11 400,693,157.47
Advance receipts VI.21 145,317,064.18 212,124,147.38
Employee payroll payable VI.22 31,494,568.05 30,762,031.53
Taxes and dues payable VI.23 35,783,819.84 36,855,139.18
Other payables VI.24 111,288,708.99 541,399,822.67
Held-for-sale liabilities
Non-current liabilities due within one year
Other current liabilities VI.25 11,100,915.25 90,215,292.43
Total current liabilities 1,913,264,870.33 3,319,220,953.39
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preferred stock
Perpetual capital bonds
Long-term payables VI.26 801,625.20
Employee payroll payable VI.27 40,245,406.52 26,791,209.91
Estimated liabilities
Deferred income VI.28 74,953,385.51 78,961,972.67
Deferred income tax liabilities VI.17 49,618,839.47 56,185,676.15
Other non-current liabilities
Total non-current liabilities 164,817,631.50 162,740,483.93
Total liabilities 2,078,082,501.83 3,481,961,437.32
Shareholder's equity:
Capital stock VI.29 685,790,364.00 685,790,364.00
Other equity instruments
Including: Preferred stock
Perpetual capital bonds
Capital reserves VI.30 1,595,711,805.31 1,592,541,582.73
Less: treasury stock
Other comprehensive income VI.31 438.33
Special reserve
Surplus reserves VI.32 122,122,436.98 122,122,436.98
Undistributed profit VI.33 -131,155,119.19 -299,111,700.34
Total equity attributable to the parent company 2,272,469,925.43 2,101,342,683.37
Minority equity VI.34 566,596,569.02 499,079,730.54
Total shareholder's equity 2,839,066,494.45 2,600,422,413.91
Total liabilities and shareholder's equity 4,917,148,996.28 6,082,383,851.23
Legal Representative:Shaoling Li Person in Charge of Finance:Ying Guan Person in Charge of Accounting Agencies: Quanli Liu
Consolidated Profit Statement
Year 2018
Prepared by: Hainan Jingliang Holdings Co., Ltd. Monetary Unit: RMB Yuan
Amount of Last
Item Note Current Amount
Period
I. Total operating income 7,409,124,303.41 7,917,639,044.13
Including: Operating income VI.35 7,409,124,303.41 7,917,639,044.13
II. Total operating cost 7,205,740,810.86 7,693,317,738.97
Including: Operating cost VI.35 6,745,315,208.12 7,181,328,452.58
Tax and surcharges VI.36 23,913,023.48 48,329,859.31
Selling expenses VI.37 193,741,132.13 184,694,169.58
Administration expenses VI.38 190,162,317.40 232,950,762.23
Research and development expenses VI.39 2,742,564.22 3,393,588.50
Financial expenses VI.40 48,487,819.30 32,018,799.28
Including: interest expenses 78,514,993.77 60,010,600.72
Interest income 11,149,346.83 24,528,341.57
Assets impairment loss VI.41 1,378,746.21 10,602,107.49
Add: Other income VI.42 16,548,514.37 15,139,922.81
Income from investment (Losses shall be filled in with “-”) VI.43 30,981,211.92 25,583,710.12
Including: income from investment on joint venture and cooperative enterprise VI.43 8,330,122.46 12,343,020.80
Income from changes in fair value (Losses shall be filled in with “-”) VI.44 2,009,952.25 12,934,641.69
Income from asset disposal (Losses shall be filled in with “-”) VI.45 -367,796.13 -6,770.67
III. Operating profit (Losses shall be filled in with “-”) 252,555,374.96 277,972,809.11
Add: non-operating income VI.46 35,905,938.23 25,718,245.18
Less: non-operating expenditure VI.47 11,151,483.05 19,040,592.81
IV. Total profit (Total losses shall be filled in with “-”) 277,309,830.14 284,650,461.48
Less: income tax expense VI.48 66,183,707.60 75,954,170.72
V. Net profit (Net loss shall be filled in with “-”) 211,126,122.54 208,696,290.76
(I) Classified by operations continuity:
1. Net profit from continuing operations (Net loss shall be filled in with “-”) 211,126,122.54 195,974,221.49
2. Net profit from discontinuing operations (Net loss shall be filled in with “-”) 12,722,069.27
(II) Classified by ownership attribution:
1. Minority interest income (Net loss shall be filled in with “-”) 43,169,541.39 79,093,123.40
2. Net profit attributable to shareholders of the parent company (Net loss shall be filled in with
167,956,581.15 129,603,167.36
“-”)
VI. Net of tax from other comprehensive income 438.33
Net of tax from other comprehensive income attributable to shareholders of the parent company 438.33
(I) Other comprehensive income that cannot be reclassified into the profit and loss
1. Remeasure changes in defined benefit plans
2. Other comprehensive income that cannot be transferred to gains and losses under the equity
method
(II) Other comprehensive income that will be reclassified into the profit and loss 438.33
1. Other comprehensive income that can be transferred to gains and losses under the equity
method
2. Profit and loss of changes in fair value of available-for-sale financial assets VI.49 -421,278.00
3. Held-to-maturity investment reclassified into profit and loss of available-for sale financial
assets
4. Effective part of cash-flow hedge profit and loss
5. Balance arising from the translation of foreign currency VI.49 421,716.33
6. Other
Net of tax from other comprehensive income attributable to minority shareholder
VII. Total comprehensive income 211,126,560.87 208,696,290.76
Total comprehensive income attributable to shareholders of the parent company 167,957,019.48 129,603,167.36
Total comprehensive income attributable to minority shareholder 43,169,541.39 79,093,123.40
VIII. Earnings per share:
(I) Basic earnings per share
(II) Diluted earnings per share
Legal Representative:Shaoling Li Person in Charge of Finance:Ying Guan Person in Charge of Accounting Agencies: Quanli Liu
Consolidated Statement of Cash Flow
Year 2018
Prepared by: Hainan Jingliang Holdings Co., Ltd. Monetary Unit: RMB Yuan
Item Note Current Amount Amount of Last Period
I. Cash Flows from Operating Activities:
Cash Receipts from Sales of Goods or Rendering of Services 7,990,459,320.64 8,251,911,188.11
Tax Refund Receipts 14,126,030.06 10,710,699.86
Other Cash Receipts Concerning Operating Activities VI.50 1,320,871,012.55 1,181,639,304.13
Subtotal of Cash Inflows from Operating Activities 9,325,456,363.25 9,444,261,192.10
Cash Paid for Purchase of Goods and Accepting Services 6,935,638,967.14 8,790,585,364.38
Cash Paid to and for Employees 287,851,792.25 390,806,974.57
Taxes and Fees Paid 197,454,799.03 296,671,364.50
Other Cash Paid Concerning Operating Activities VI.50 1,054,343,253.59 1,345,705,268.31
Subtotal of Cash Outflows from Operating Activities 8,475,288,812.01 10,823,768,971.76
Net Cash Flows from Operating Activities 850,167,551.24 -1,379,507,779.66
II. Cash Flows from Investment Activities:
Cash Receipts from Disinvestment 2,723,610,000.00 933,048,283.00
Cash Receipts from Returns on Investments 60,787,738.09 21,904,165.76
Net Cash from Disposal of Fixed Assets, Intangible Assets and Other Long-term Assets 5,101,872.08 43,733,447.51
Net Cash Received by Disposal of Subsidiaries and Other Business Units -181,590,429.61
Other Cash Receipts Concerning Investment Activities VI.50 49,136.10
Subtotal of Cash Inflows from Investment Activities 2,789,499,610.17 817,144,602.76
Cash Paid for Purchase and Construction of Fixed Assets, Intangible Assets and Other
58,607,796.65 42,495,582.86
Long-term Assets
Cash Paid for Investments 2,847,910,000.00 1,298,701,195.80
Net Cash Paid for obtaining Subsidiaries and Other Business Units 204,524,900.00
Other Cash Paid Concerning Investment Activities
Subtotal of Cash Outflows from Investment Activities 2,906,517,796.65 1,545,721,678.66
Net Cash Flows from Investment Activities -117,018,186.48 -728,577,075.90
III. Cash Flows from Financing Activities:
Cash Receipts from Accepting Investment 41,000,000.00 805,020,812.32
Including: Cash Received by Subsidiaries Absorbing the Investment from Minority
8,748,313.76
Shareholders
Cash Receipts from Borrowings 2,429,218,399.64 2,566,546,770.86
Cash Received by Issuing Bonds
Other Cash Receipts Concerning Financing Activities
Subtotal of Cash Inflows from Financing Activities 2,470,218,399.64 3,371,567,583.18
Cash Paid for Repayment of Debts 3,262,582,688.36 690,254,732.20
Cash Paid for Distribution of Dividends, Profits or Repayment of Interests 106,159,134.37 64,780,406.38
Including: Dividends and Profits Paid by Subsidiaries to Minority Shareholders
Other Cash Paid Concerning Financing Activities VI.50 1,979,044.96
Subtotal of Cash Outflows from Financing Activities 3,368,741,822.73 757,014,183.54
Net Cash Flows from Financing Activities -898,523,423.09 2,614,553,399.64
IV. Exchange Rate Fluctuation Consequences on Cash and Cash Equivalents 18,805,411.68 2,492,271.54
V. Net Increase in Cash and Cash Equivalents -146,568,646.65 508,960,815.62
Add: Opening Balance of Cash and Cash Equivalents 1,014,438,663.43 505,477,847.81
VI. Closing Balance of Cash and Cash Equivalents 867,870,016.78 1,014,438,663.43
Legal Representative:Shaoling Li Person in Charge of Finance:Ying Guan Person in Charge of Accounting Agencies: Quanli Liu
Consolidated Statement of Cash Flow
Year 2018
Prepared by: Hainan Jingliang Holdings Co., Ltd. Monetary Unit: RMB Yuan
Item Note Current Amount Amount of Last Period
I. Cash Flows from Operating Activities:
Cash Receipts from Sales of Goods or Rendering of Services 7,990,459,320.64 8,251,911,188.11
Tax Refund Receipts 14,126,030.06 10,710,699.86
Other Cash Receipts Concerning Operating Activities VI.50 1,320,871,012.55 1,181,639,304.13
Subtotal of Cash Inflows from Operating Activities 9,325,456,363.25 9,444,261,192.10
Cash Paid for Purchase of Goods and Accepting Services 6,935,638,967.14 8,790,585,364.38
Cash Paid to and for Employees 287,851,792.25 390,806,974.57
Taxes and Fees Paid 197,454,799.03 296,671,364.50
Other Cash Paid Concerning Operating Activities VI.50 1,054,343,253.59 1,345,705,268.31
Subtotal of Cash Outflows from Operating Activities 8,475,288,812.01 10,823,768,971.76
Net Cash Flows from Operating Activities 850,167,551.24 -1,379,507,779.66
II. Cash Flows from Investment Activities:
Cash Receipts from Disinvestment 2,723,610,000.00 933,048,283.00
Cash Receipts from Returns on Investments 60,787,738.09 21,904,165.76
Net Cash from Disposal of Fixed Assets, Intangible Assets and Other Long-term Assets 5,101,872.08 43,733,447.51
Net Cash Received by Disposal of Subsidiaries and Other Business Units -181,590,429.61
Other Cash Receipts Concerning Investment Activities VI.50 49,136.10
Subtotal of Cash Inflows from Investment Activities 2,789,499,610.17 817,144,602.76
Cash Paid for Purchase and Construction of Fixed Assets, Intangible Assets and Other Long-term Assets 58,607,796.65 42,495,582.86
Cash Paid for Investments 2,847,910,000.00 1,298,701,195.80
Net Cash Paid for obtaining Subsidiaries and Other Business Units 204,524,900.00
Other Cash Paid Concerning Investment Activities
Subtotal of Cash Outflows from Investment Activities 2,906,517,796.65 1,545,721,678.66
Net Cash Flows from Investment Activities -117,018,186.48 -728,577,075.90
III. Cash Flows from Financing Activities:
Cash Receipts from Accepting Investment 41,000,000.00 805,020,812.32
Including: Cash Received by Subsidiaries Absorbing the Investment from Minority Shareholders 8,748,313.76
Cash Receipts from Borrowings 2,429,218,399.64 2,566,546,770.86
Cash Received by Issuing Bonds
Other Cash Receipts Concerning Financing Activities
Subtotal of Cash Inflows from Financing Activities 2,470,218,399.64 3,371,567,583.18
Cash Paid for Repayment of Debts 3,262,582,688.36 690,254,732.20
Cash Paid for Distribution of Dividends, Profits or Repayment of Interests 106,159,134.37 64,780,406.38
Including: Dividends and Profits Paid by Subsidiaries to Minority Shareholders
Other Cash Paid Concerning Financing Activities VI.50 1,979,044.96
Subtotal of Cash Outflows from Financing Activities 3,368,741,822.73 757,014,183.54
Net Cash Flows from Financing Activities -898,523,423.09 2,614,553,399.64
IV. Exchange Rate Fluctuation Consequences on Cash and Cash Equivalents 18,805,411.68 2,492,271.54
V. Net Increase in Cash and Cash Equivalents -146,568,646.65 508,960,815.62
Add: Opening Balance of Cash and Cash Equivalents 1,014,438,663.43 505,477,847.81
VI. Closing Balance of Cash and Cash Equivalents 867,870,016.78 1,014,438,663.43
Legal Representative:Shaoling Li Person in Charge of Finance:Ying Guan Person in Charge of Accounting Agencies: Quanli Liu
Consolidated Statement of Changes in Shareholder’s Equity (Continued)
Year 2018
Prepared by: Hainan Jingliang Holdings Co., Ltd. Monetary Unit: RMB Yuan
Amount of Last Period
Total shareholders'
Shareholder's Equity attributable to the Parent Company Minority equity
equities
Item Other equity instruments
Less: Other
Special Surplus public Undistributed
Capital stock Perpetual Capital reserve treasury comprehensive Subtotal
Preferred Others reserve accumulation profit
bond stock income
stock
I. Year-end balance of last year 426,745,404.00 1,381,337,052.83 122,122,436.98 -547,123,017.26 1,383,081,876.55 1,174,529,851.49 2,557,611,728.04
Add: changes in accounting policies
Correction of prior period errors
Business combination under common control 118,408,149.56 -1,193,974,905.20
-1,312,383,054.76 -1,193,974,905.20
Other
II. Balance at beginning of current year 426,745,404.00 68,953,998.07 122,122,436.98 -428,714,867.70 189,106,971.35 1,174,529,851.49 1,363,636,822.84
III. Increases and decreases of current year
259,044,960.00 1,523,587,584.66 129,603,167.36 1,912,235,712.02 -675,450,120.95 1,236,785,591.07
(Decrease shall be filled in with “-”)
(I) Total comprehensive income 129,603,167.36 129,603,167.36 79,093,123.40 208,696,290.76
(II) Investment of shareholders and capital
259,044,960.00 1,523,587,584.66 1,782,632,544.66 -632,300,428.15 1,150,332,116.51
reduction
1. Common equity invested by 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. Capital invested by other equity instruments
holders
3. The amount of shares recorded into the
shareholder'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. Withdrawal of surplus reserves
2. Withdrawal of general risk reserve
3. Distribution to shareholders -6,944,385.43 -6,944,385.43
4. Others
(IV) Inner carrying-over of shareholders'
-115,298,430.77 -115,298,430.77
equities
1. Capital reserve converted into capital (or
capital stock)
2. Surplus public accumulation converted into
capital (or capital stock)
3. Surplus public accumulation loss remedy
4. Carry forward retained earnings from
changes in defined benefit plans
5. Others -115,298,430.77 -115,298,430.77
(V) Special reserve
1. Withdrawal for current period
2. Use for current period
(VI) Others
IV. Closing balance of current year 685,790,364.00 1,592,541,582.73 122,122,436.98 -299,111,700.34 2,101,342,683.37 499,079,730.54 2,600,422,413.91
Legal Representative: Shaolin Li Person in Charge of Finance:Ying Guan Person in Charge of Accounting Agencies:Quanli Liu
Balance Sheet
December 31, 2018
Prepared by: Hainan Jingliang Holdings Co., Ltd. Monetary Unit: RMB Yuan
Item Note Closing Balance Opening Balance
Current assets:
Monetary capital 13,597,659.66 15,360,177.32
Financial assets measured as fair value and the variation included
into current profit and loss
Derivative financial assets
Notes receivable and accounts receivable XVI.1 79,986.00 109,389.00
Prepayment 20,000.00
Other receivables XVI.2 227,353.10 60,576,292.62
Inventory 4,824,035.45 4,824,035.45
Held-for-sale assets
Non-current assets due within one year
Other current assets 1,962,371.32 2,905,667.38
Total current assets 20,711,405.53 83,775,561.77
Non-current assets:
Available-for-sale financial assets 20,000,000.00 20,000,000.00
Held-to-maturity investment
Long-term receivables
Long-term equity investment XVI.3 2,375,639,964.05 2,336,639,964.05
Investment real estate 5,778,794.33 6,081,230.93
Fixed assets 3,260,620.04 3,589,144.87
Construction in process
Productive biological assets
Oil-and-gas assets
Intangible assets 171,069.18
Development expenditure
Goodwill
Long-term deferred expenses 180,817.60
Deferred income tax assets
Other non-current assets
Total non-current assets 2,405,031,265.20 2,366,310,339.85
Total assets 2,425,742,670.73 2,450,085,901.62
Legal Representative:Shaoling Li Person in Charge of Finance:Ying Guan Person in Charge of Accounting Agencies: Quanli Liu
Balance Sheet (Continued)
December 31, 2018
Prepared by: Hainan Jingliang Holdings Co., Ltd. Monetary Unit: RMB Yuan
Item Note Closing Balance Opening Balance
Current liabilities:
Short-term borrowings
Financial liabilities measured as fair value and the variation
included into current profit and loss
Derivative financial liabilities
Notes payable and accounts payable 2,482,949.70
Advance receipts 38,896.41 38,896.41
Employee payroll payable 438,195.96 2,017,684.57
Taxes and dues payable 976,458.68 2,557,993.95
Other payables 449,947,050.56 449,510,029.34
Held-for-sale liabilities
Non-current liabilities due within one year
Other current liabilities
Total current liabilities 451,400,601.61 456,607,553.97
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preferred stock
Perpetual capital bonds
Long-term payables
Employee payroll payable
Estimated liabilities
Deferred income
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities
Total liabilities 451,400,601.61 456,607,553.97
Shareholder's equity:
Capital stock 685,790,364.00 685,790,364.00
Other equity instruments
Including: Preferred stock
Perpetual capital bonds
Capital reserves 2,173,387,468.71 2,173,387,468.71
Less: treasury stock
Other comprehensive income
Special reserve
Surplus reserves 109,487,064.39 109,487,064.39
Undistributed profit -994,322,827.98 -975,186,549.45
Total shareholder's equity 1,974,342,069.12 1,993,478,347.65
Total liabilities and shareholder's equity 2,425,742,670.73 2,450,085,901.62
Legal Representative:Shaoling Li Person in Charge of Finance:Ying Guan Person in Charge of Accounting Agencies: Quanli Liu
Profit Statement
Year 2018
Prepared by: Hainan Jingliang Holdings Co., Ltd. Monetary Unit: RMB Yuan
Item Note Current Amount Amount of Last Period
I. Operating income XVI.4 2,857.14
Less: Operating cost XVI.4 302,436.60
Tax and surcharges 1,196,961.62 1,201,827.31
Selling expenses
Administration expenses 23,607,509.95 29,147,752.63
Research and development expenses
Financial expenses 14,073,236.91 -6,912,084.36
Including: interest expenses 15,038,228.78 9,264,377.38
Interest income 974,811.35 16,961,563.45
Assets impairment loss -3,094,336.89 834,972.20
Add: Other income
Income from investment (Losses shall be filled in with “-”) XVI.5 74,749,139.55
Including: income from investment on joint venture and cooperative
XVI.5 -1,070,860.45
enterprise
Income from changes in fair value (Losses shall be filled in with “-”)
Income from asset disposal (Losses shall be filled in with “-”) -3,744.70
II. Operating profit (Losses shall be filled in with “-”) -35,783,371.59 50,173,347.61
Add: non-operating income 16,679,043.74 277,830.06
Less: non-operating expenditure 31,950.68 841,471.93
III. Total profit (Total losses shall be filled in with “-”) -19,136,278.53 49,609,705.74
Less: income tax expense
IV. Net profit (Net loss shall be filled in with “-”) -19,136,278.53 49,609,705.74
(I) Net profit from continuing operations (Net loss shall be filled in with
“-”)
(II) Net profit from discontinuing operations (Net loss shall be filled in
with “-”)
V. Net of tax from other comprehensive income
(I) Other comprehensive income that cannot be reclassified into the profit
and loss
1. Remeasure changes in defined benefit plans
2. Other comprehensive income that cannot be transferred to gains and
losses under the equity method
(II) Other comprehensive income that will be reclassified into the profit
and loss
1. Other comprehensive income that can be transferred to gains and losses
under the equity method
2. Profit and loss of changes in fair value of available-for-sale financial
assets
3. Held-to-maturity investment reclassified into profit and loss of
available-for sale financial assets
4. Effective part of cash-flow hedge profit and loss
5. Balance arising from the translation of foreign currency
6. Other
VI. Total comprehensive income -19,136,278.53 49,609,705.74
Legal Representative:Shaoling Li Person in Charge of Finance:Ying Guan Person in Charge of Accounting Agencies: Quanli Liu
Statement of Cash Flow
Year 2018
Prepared by: Hainan Jingliang Holdings Co., Ltd. Monetary Unit: RMB Yuan
Item Note Current Amount Amount of Last Period
I. Cash Flows from Operating Activities:
Cash Receipts from Sales of Goods or Rendering of Services
Tax Refund Receipts 1,500.00
Other Cash Receipts Concerning Operating Activities 50,575,445.10 24,572,737.14
Subtotal of Cash Inflows from Operating Activities 50,576,945.10 24,572,737.14
Cash Paid for Purchase of Goods and Accepting Services
Cash Paid to and for Employees 20,758,423.44 10,014,435.27
Taxes and Fees Paid 5,842,797.23 28,508,145.12
Other Cash Paid Concerning Operating Activities 16,664,927.81 100,011,431.48
Subtotal of Cash Outflows from Operating Activities 43,266,148.48 138,534,011.87
Net Cash Flows from Operating Activities 7,310,796.62 -113,961,274.73
II. Cash Flows from Investment Activities:
Cash Receipts from Disinvestment 10,000,000.00
Cash Receipts from Returns on Investments
Net Cash from Disposal of Fixed Assets, Intangible Assets and Other Long-term Assets 35,000,000.00
Other Cash Receipts Concerning Investment Activities 49,136.10
Subtotal of Cash Inflows from Investment Activities 45,049,136.10
Cash Paid for Purchase and Construction of Fixed Assets, Intangible Assets and Other
248,977.61
Long-term Assets
Cash Paid for Investments 39,000,000.00 366,447,600.00
Other Cash Paid Concerning Investment Activities
Subtotal of Cash Outflows from Investment Activities 39,248,977.61 366,447,600.00
Net Cash Flows from Investment Activities -39,248,977.61 -321,398,463.90
III. Cash Flows from Financing Activities:
Cash Receipts from Accepting Investment 386,874,898.56
Cash Receipts from Borrowings 243,800,000.00 110,000,000.00
Cash Received by Issuing Bonds
Other Cash Receipts Concerning Financing Activities
Subtotal of Cash Inflows from Financing Activities 243,800,000.00 496,874,898.56
Cash Paid for Repayment of Debts 195,000,000.00 76,469,598.52
Cash Paid for Distribution of Dividends, Profits or Repayment of Interests 18,624,336.67 1,659,125.50
Other Cash Paid Concerning Financing Activities 1,979,044.96
Subtotal of Cash Outflows from Financing Activities 213,624,336.67 80,107,768.98
Net Cash Flows from Financing Activities 30,175,663.33 416,767,129.58
IV. Exchange Rate Fluctuation Consequences on Cash and Cash Equivalents
V. Net Increase in Cash and Cash Equivalents -1,762,517.66 -18,592,609.05
Add: Opening Balance of Cash and Cash Equivalents 15,360,177.32 33,952,786.37
VI. Closing Balance of Cash and Cash Equivalents 13,597,659.66 15,360,177.32
Legal Representative:Shaoling Li Person in Charge of Finance:Ying Guan Person in Charge of Accounting Agencies: Quanli Liu
Statement of Changes in Shareholder’s Equity
Year 2018
Prepared by: Hainan Jingliang Holdings Co., Ltd. Monetary Unit: RMB Yuan
Current Amount
Other equity instruments Less: Other
Item Special Surplus public Undistributed Total shareholders'
Capital stock Preferred Perpetual Capital reserve treasury comprehensive
Others reserve accumulation profit equities
stock bond stock income
I. Year-end balance of last year 685,790,364.00 2,173,387,468.71 109,487,064.39 -975,186,549.45 1,993,478,347.65
Add: changes in accounting policies
Correction of prior period errors
Other
II. Balance at beginning of current year 685,790,364.00 2,173,387,468.71 109,487,064.39 -975,186,549.45 1,993,478,347.65
III. Increases and decreases of current year
-19,136,278.53 -19,136,278.53
(Decrease shall be filled in with “-”)
(I) Total comprehensive income -19,136,278.53 -19,136,278.53
(II) Investment of shareholders and capital reduction
1. Common equity invested by shareholders
2. Capital invested by other equity instruments holders
3. The amount of shares recorded into the shareholder's
equity
4. Others
(III) Distribution of profits
1. Withdrawal of surplus reserves
2. Withdrawal of general risk reserve
3. Distribution to shareholders
4. Others
(IV) Inner carrying-over of shareholders' equities
1. Capital reserve converted into capital (or capital
stock)
2. Surplus public accumulation converted into capital (or
capital stock)
3. Surplus public accumulation loss remedy
4. Carry forward retained earnings from changes in
defined benefit plans
5. Others
(V) Special reserve
1. Withdrawal for current period
2. Use for current period
(VI) Others
IV. Closing balance of current year 685,790,364.00 2,173,387,468.71 109,487,064.39 -994,322,827.98 1,974,342,069.12
Legal Representative:Shaolin Li Person in Charge of Finance:Ying Guan Person in Charge of Accounting Agencies: Quanli Liu
Statement of Changes in Shareholder’s Equity (Continued)
Year 2018
Prepared by: Hainan Jingliang Holdings Co., Ltd. Monetary Unit: RMB Yuan
Amount of Last Period
Other equity instruments Less: Other Total
Item Special Surplus public Undistributed
Capital stock Preferred Perpetual Capital reserve treasury comprehensive shareholders'
reserve accumulation profit
stock bond Others stock income equities
I. Year-end balance of last year 426,745,404.00 546,201,098.01 109,487,064.39 -1,024,796,255.19 57,637,311.21
Add: changes in accounting policies
Correction of prior period errors
Other
II. Balance at beginning of current year 426,745,404.00 546,201,098.01 109,487,064.39 -1,024,796,255.19 57,637,311.21
III. Increases and decreases of current year
259,044,960.00 1,627,186,370.70 49,609,705.74 1,935,841,036.44
(Decrease shall be filled in with “-”)
(I) Total comprehensive income 49,609,705.74 49,609,705.74
(II) Investment of shareholders and capital
259,044,960.00 1,627,186,370.70 1,886,231,330.70
reduction
1. Common equity invested by shareholders 259,044,960.00 1,496,058,401.52 1,755,103,361.52
2. Capital invested by other equity instruments
holders
3. The amount of shares recorded into the
shareholder's equity
4. Others 131,127,969.18 131,127,969.18
(III) Distribution of profits
1. Withdrawal of surplus reserves
2. Withdrawal of general risk reserve
3. Distribution to shareholders
4. Others
(IV) Inner carrying-over of shareholders' equities
1. Capital reserve converted into capital (or capital
stock)
2. Surplus public accumulation converted into capital
(or capital stock)
3. Surplus public accumulation loss remedy
4. Carry forward retained earnings from changes in
defined benefit plans
5. Others
(V) Special reserve
1. Withdrawal for current period
2. Use for current period
(VI) Others
IV. Closing balance of current year 685,790,364.00 2,173,387,468.71 109,487,064.39 -975,186,549.45 1,993,478,347.65
Legal Representative:Shaolin Li Person in Charge of Finance:Ying Guan Person in Charge of Accounting Agencies: Quanli Liu
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
Hainan Jingliang Holdings Co., Ltd.
Notes to the 2018 Annual Report
(Unless otherwise stated, the amount unit is RMB )
I. Basic Information of the Company
(I) Place of incorporation, form of organization and head office address
Hainan Jingliang Holdings Co., Ltd. (hereinafter referred to as "the Company" or "Company" or "Jingliang Holdings") is
established in accordance with the Hainan Provincial People's Government General Office QFBH (1992) No.1, approved by QY
(1992) SGZ No. 6 Document of the People's Bank of Hainan Province and re-registered by Hainan Pearl River Enterprise Company
on January 11, 1992. The Company issued 81,880,000 shares in total upon re-registration, of which 60,793,600 shares were
converted from the net assets of the original company and 21,086,400 shares were newly issued. And the name of the Company is
Hainan Pearl River Enterprise Co., Ltd. The business license registration number of the joint-stock company is 20128455-6, and the
holding parent company Guangzhou Pearl River Enterprise Group holds 36,393,600 shares, accounting for 44.45%. Approved by
ZGB (1992) No. 83 Document of the People's Bank of China in December 1992, the additional 21,086,400 shares were listed on the
Shenzhen Stock Exchange for trading. The industry involved is real estate.
On March 25, 1993, in response to QGBH (1993) No.028 of Hainan Provincial Leading Group Office and SRYFZ (1993)
No.099 of Shenzhen Special Economic Zone Branch of the People's Bank of China, the Company increased its share capital by
converting the original share capital into 139,196,000 shares (according to distribution of 10, delivery of 5 and transfer of 2), with the
controlling shareholder Guangzhou Pearl River Enterprises Group holding 48,969,120 shares accounting for 35.18% at the end of
1993.
In 1994, the share capital was increased by 10 to 10, and the total share capital was 278,392,000 shares after the increase. The
controlling shareholder, Guangzhou Pearl River Enterprises Group, holds 97,938,240 shares, accounting for 35.18%.
In 1995, the issuance of 50,000,000 B Shares was approved by SZBF (1995) No.45 and SZBF (1995) No.12. The share capital
of the Company was increased by 10:1.5 on the basis of the share capital after the additional B shares were issued, and the share
capital of the Company after the increase was 377,650,800 shares. The holding parent company, Guangzhou Pearl River Enterprises
Group, held 112,628,976 shares, accounting for 29.82% of the total.
In 1999, Guangzhou Pearl River Enterprises Group transferred all 112,628,976 shares to Beijing Wanfa Real Estate
Development Co., Ltd.. After the transfer of shares was completed in June 1999, Beijing Wanfa Real Estate Development Co., Ltd.
held 112,628,976 shares of the Company, accounting for 29.82% of the total shares of the Company, and became the controlling
shareholder of the Company.
On January 10, 2000, the name of the Company was changed to Hainan Pearl River Holding Co., Ltd. and the Business License
for Enterprise Legal Person was renewed by Industrial & Commerce Administration Bureau of Hainan Province.
On August 17, 2006, the reform plan of the split share structure of the Company was implemented. The Company transferred
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
49,094,604 shares of capital stock to all shareholders at the ratio of 10 to 1.3. The original non-tradable shareholders transferred the
increased shares to the tradable A-share holders. Beijing Wanfa Real Estate Development Co., Ltd. reimbursed the consideration
shares of the non-tradable shareholders who have not expressly expressed their opinions. The converted total share capital was
426,745,404 shares, and the original controlling shareholder Beijing Wanfa Real Estate Development Co., Ltd. held 107,993,698
shares, accounting for 25.31%. Shareholders of non-tradable shares repaid 3,289,780 shares in consideration of the split share
structure in 2007. Shareholders of non-tradable shares repaid 1,196,000 shares in consideration of the split share structure in 2009.
On 2 September 2016, Beijing Wanfa Real Estate Development Co., Ltd., the original controlling shareholder, transferred all of
its 112,479,478 shares to Beijing Grain Group Co., Ltd. (hereinafter referred to as "Beijing Grain Group"). Upon completion of the
share transfer in September 2016, Beijing Grain Group Co., Ltd. held 112,479,478 shares, accounting for 26.36% of the total shares
of the Company. In November 2016, based on the confidence in the subject matter of the material asset restructuring and the future
development of the Company, Beijing Grain Group Co., Ltd. decided to increase its shareholding through centralized bidding in the
secondary market. After the increase, it held 123,561,963 shares of the Company, accounting for 28.95% of the total number of
shares, and became the largest shareholder of the Company.
The Company determined July 31, 2017 as the delivery date of material assets in accordance with the material assets
restructuring plan and the delivery agreement. On September 14, 2017, approved pursuant to the resolution of the Second
Extraordinary General Meeting of Shareholders of the Company on November 18, 2016 and the Approval Reply of the China
Securities Regulatory Commission dated July 28, 2017 On Approval of Hainan Pearl River Holding Co., Ltd. to Purchase Assets and
Raise Supporting Funds from Beijing Grain Group Co., Ltd. (ZJXK (2017) No.1391): 1) The Company purchased assets from the
original shareholders of Beijing Grain Food Co., Ltd. (hereinafter referred to as Beijing Grain Food) by issuing 210,079,552 shares of
the balance between the transaction price of the injected assets and the assets to be purchased (the difference between the transaction
price of the injected assets and the assets to be purchased was RMB 1,699.5436 million yuan). The par value in the issuance was
RMB 1.00 per share and the issuance price was RMB 8.09 per share; 2) The Company has issued 48,965,408 non-public shares of
the Company to Beijing Grain Group for the purpose of purchasing the supporting funds raised from the assets of the issuance of
shares. The par value per share of the Company was RMB1.00 and the issuance price was RMB8.82 per share. The shareholder
Beijing Grain Group conducted subscription in monetary funds. Upon completion of the issue, the registered capital was RMB
685,790,364.00 and the share capital was RMB 685,790,364.00. Beijing Grain Group, which accounted for 42.06% of the total
number of shares, became the largest shareholder of the Company.
On March 10, 2018, the Company completed the registration formalities for industrial and commercial changes such as
company name, legal representative, registered capital and business scope, and obtained the Business License for Enterprise Legal
Person approved and renewed by Industrial & Commerce Administration Bureau of Hainan Province. The relevant information after
the change is listed as follows:
Company name: Hainan Jingliang Holdings Co., Ltd.
Uniform Social Credit Code: 914600002012845568
Type: Limited Company (Listed, State-controlled)
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
Registered address: F29, Dihao Building, Pearl River Square, Binhai Avenue, Haikou City
Office address: F29, Dihao Building, Pearl River Square, Binhai Avenue, Haikou City
Legal representative: Wang Guofeng
Registered capital: 685,790,364 Yuan
Date of establishment: March 22, 1988
Business term: from March 22, 1988 to September 20, 2025
The parent company is Beijing Grain Group Co., Ltd..
(II) The nature of the Company's business and its main business activities
1. Business scope of the Company
The Company belongs to manufacturing-agricultural and sideline food processing industry, mainly including: food, beverages,
oils, oils and by-products, vegetable proteins and their products, organic fertilizers, microbial fertilizers, production and marketing of
agricultural fertilizers; land consolidation, soil remediation; agricultural comprehensive planting development, animal husbandry and
aquaculture, agricultural equipment production and marketing; computer network technology, investment in communication projects,
research and development and application of high-tech products; investment and consultation of environmental protection projects;
animation, graphic design; import and export trade in goods and technology; rental of own premises. (General business projects shall
be operated independently, and the permitted business projects shall be operated on the basis of relevant permits or approval
documents) (Projects subject to approval by the relevant departments shall not be allowed to engage in business activities until
approved by the relevant departments in accordance with the law.).
2. The nature of the Company's business and its main business activities
The Company and its subsidiaries are principally engaged in the processing, production and sales of foodstuffs, agricultural and
sideline products, oils and fats, oils and snack foods.
3. Basic framework of the Company
The basic organizational structure of the Company: the shareholders' general meeting is the highest authority of the Company,
the board of directors is the executive body of the shareholders' general meeting, the board of supervisors is the internal supervision
body of the Company, and the general manager is responsible for the daily operation and management of the Company. The
Company consists of the Office of the Board of Directors, the Office of the Board of Supervisors, the Department of Comprehensive
Affairs, the Department of Securities Affairs, the Department of Strategic Investment, the Department of Finance (Settlement Center),
the Department of Internal Control Risk, the Department of Human Resources, the Department of Party and Mass Work, and the
Department of Discipline Inspection and Supervision.
On May 6, 2010, the Beijing Investment Consulting Branch of Hainan Jingliang Holdings Co., Ltd. (now renamed as Hainan
Pearl River Holding Co., Ltd.) was established with the unified social credit code of 91110107554875351W. Address: Room 5078,
Building 3, No.3, Xijing Road, Badachu High-tech Park, Shijingshan District, Beijing. Business scope includes investment
consulting, hotel investment and management; Purchase and lease of construction equipment; Sales of building materials, hardware
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
and electrical equipment, furniture, plastics, daily necessities, leather products, rubber products, fodder, no longer packaged seeds,
cereals, legumes, potato, flowers, grass and ornamental plants, fertilizers, non-metallic ores, metal products, metal ores, metal
materials, goods import and export; R&D and application of high-tech products. ("1 Without the approval of the relevant departments,
the funds shall not be raised in public; 2. Trading activities of securities products and financial derivatives shall not be publicly
carried out; 3. Loans shall not be granted; 4. Guarantees shall not be provided to any enterprise other than the invested enterprise; 5.
The investment principal shall not be lost or the minimum income shall not be guaranteed to the investor"; The project subject to
approval according to law shall be operated in accordance with the approved contents after obtaining the approval of the relevant
departments.)
On October 22, 2012, Hainan Pearl River Stock Co., Ltd. Heilongjiang Branch was established with unified social credit code:
91230110598492651P. Address: No.34, Nongxiao Street, Xiangfang District, Harbin City. Business scope: industrial investment,
hotel investment and management, construction equipment procurement, and easing, indoor and outdoor decoration, high-tech
project investment, computer network investment, communication project investment, high-tech product development and
application, and environmental protection project investment. (Projects subject to administrative license examination and approval
shall be operated with the license) (Projects subject to approval by the relevant departments shall not be allowed to engage in
business activities until approved by the relevant departments in accordance with the law.) On December 9, 2017, to optimize the
capital structure, reduce operating and management costs and improve management efficiency, at the 22nd meeting of the eighth
session of the Board of Directors of the Company, the Proposal on Cancellation of Heilongjiang Branch of the Company was
deliberated and adopted, and the cancellation of Heilongjiang Branch of the Company was agreed, and the management layer of the
Company was authorized to go through relevant cancellation formalities. In July 2018, the Company completed the industrial and
commercial cancellation formalities of Heilongjiang Branch.
(III) Approval of financial statements
These financial statements have been approved and reported by the Board of Directors of the Company in its resolution dated
March 28, 2019.
(IV) Consolidated report scope
A total of 20 subsidiaries of the Company were included in the scope of consolidation in 2018, as detailed in Note 8 "Interests in
Other Entities". The consolidation scope of the Company for the current period is 2 more than that of the previous period, as detailed
in Note 7, "Change in Consolidation Scope".
II. Preparation Basis for Financial Statements
1. Preparation Basis
The Company's financial statements are prepared on the basis of the going concern assumption, according to the actual
transactions and events, in accordance with the Accounting Standards for Business Enterprises issued by the Ministry of Finance and
its application guidelines, interpretation and other relevant provisions (collectively referred to as the "Accounting Standards for
Business Enterprises"). In addition, the Company also discloses relevant financial information in accordance with the China
Securities Regulatory Commission's Rules for the Preparation of Information Disclosure of Companies that Offer Securities to the
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
Public No.15-General Provisions on Financial Reporting (Revised in 2014).
According to the relevant provisions of the Accounting Standards for Business Enterprises, the Company's financial accounting
shall be based on the accrual basis. These financial statements are based on historical cost, with the exception of certain financial
instruments. In case of impairment of assets, the corresponding impairment provision shall be calculated and withdrawn in
accordance with relevant provisions.
2. Going concern
These financial statements are presented on a going concern basis and the Company has a going concern capability for at least
12 months from the end of the reporting period.
III. Statement of Compliance with Accounting Standards for Business Enterprises
The financial statements prepared by the Company conform to the requirements of the Accounting Standards for Business
Enterprises and reflect truthfully and completely the consolidation of the Company and the financial position of the parent company
as at December 31, 2018, the consolidation of the Company in 2018, the operating results of the parent company, the consolidation
and the cash flow of the parent company and other relevant information.
IV. Significant Accounting Policies and Accounting Estimate
1. Accounting Period
The accounting period of the Company is divided into an annual period and an interim period. The accounting interim period
refers to the reporting period shorter than a full accounting year. The fiscal year of the Company adopts the Gregorian calendar year,
that is, from January 1 to December 31 of each year.
2. Business Cycle
The normal business cycle is the period from the time the Company purchases assets for processing to the time when cash or
cash equivalents are realized. The Company uses 12 months as an business cycle and uses it as a liquidity classification standard for
assets and liabilities.
3. Bookkeeping Standard Currency
The Company uses RMB as the bookkeeping standard currency.
RMB is the currency in the main economic environment in which the Company and its domestic subsidiaries operate. The
Company and its domestic subsidiaries use RMB as the bookkeeping standard currency. The offshore subsidiaries of the Company
determine USD as their bookkeeping standard currency based on the currencies in the main economic environment in which they
operate. The currency used by the Company in preparing these financial statements is RMB.
4. The Accounting Treatment of Business Combination under the Same Control and Different Control
Business Combination refers to the transaction or event in which two or more separate enterprises are merged to form one
reporting entity. Business combination can be divided into business combination under the same control and business combination
under different control.
(1) Business combination under the same control
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
Enterprises participating in the combination are ultimately controlled by the same party or multiple parties before and after the
combination, and the control is not temporary, so it is the business combination under the same control. In case of business
combination under the same control, the party that obtains control of other enterprises participating in the combination on the
combination date shall be the combination party, and the other enterprises participating in the combination shall be the merged party.
The combination date refers to the date on which the combination party actually acquires control over the merged party.
The assets and liabilities acquired by the combination party are measured at the book value of the merged party at the date of
consolidation. If the difference between the book value of the net assets acquired by the merging party and the book value of the
merged consideration (or the total par value of the issued shares) paid by the merging party, and the capital reserve (share capital
premium) shall be adjusted; If the capital reserve (equity premium) is insufficient to offset, the retained earnings shall be adjusted.
The direct expenses incurred by the merging party for the purpose of business combination shall be included in the profits and
losses of the current period when they are incurred.
(2) Business combination under different control
If the enterprises participating in the merger are not ultimately controlled by the same party or multiple parties before and after
the merger, the enterprise merger is not under the same control. In case of business combination under different control, the party that
obtains control of other enterprises participating in the combination on the date of purchase shall be the Purchaser, and the other
enterprises participating in the combination shall be the Purchased. Purchase date means the date on which the Purchaser actually
acquires control of the Purchased.
For business combination under different control, the merger cost includes the assets, liabilities and fair value of equity
securities issued by the Purchaser in order to obtain the control over the Purchased on the date of purchase, and the intermediary fees
such as audit, legal service, appraisal and consultation and other management fees for the enterprise merger are used to record into
the profits and losses of the current period when incurred. The transaction costs of equity or debt securities issued by the Purchaser as
a merger consideration are included in the initial recognition amount of the equity or debt securities. Contingent consideration
involved shall be included in the consolidation cost at its fair value at the purchase date, and the consolidation goodwill shall be
adjusted accordingly if new or further evidence of the existence of circumstances at the purchase date appears within 12 months after
the purchase date and the adjustment or consideration is required. The consolidation cost incurred by the Purchaser and the
identifiable net assets acquired during the consolidation are measured at the fair value at the date of purchase. The difference between
the merger costs and the fair value shares of the identifiable net assets of the Purchased at the purchase date obtained in the merger is
recognized as goodwill. If the combined cost is less than the fair value of the identifiable net assets of the Purchased in the merger,
first, the fair value of the identifiable assets, liabilities and contingent liabilities of the Purchased and the measurement of the
consolidation cost shall be re-checked. If the consolidation cost is still smaller than the fair value share of the identifiable net assets
of the Purchased obtained in the consolidation after the re-check, the difference shall be recorded into the profits and losses of the
current period.
When the Purchaser acquires the deductible temporary difference of the Purchased, if it fails to recognize the deferred income
tax assets on the date of purchase because it does not meet the recognition conditions for the deferred income tax, and within 12
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
months of the date of purchase, new or further information is obtained indicating that the relevant circumstances at the purchase date
already exist and the economic benefits from the temporary difference deductible by the purchaser on the purchase date are expected
to be realized, the relevant deferred income tax assets shall be recognized, and the goodwill shall be reduced. If the goodwill is not
sufficiently offset, the difference shall be recognized as the current profit or loss; In addition to the above circumstances, the deferred
income tax assets related to the enterprise merger are recognized and included in the current profits and losses.
Through multi-transaction and step-by-step business combination under different control, according to the Circular of the
Ministry of Finance on Printing and Issuing the Interpretation of Accounting Standards for Business Enterprises No.5 (CK (2012)
No.19) and Article 51 of the Accounting Standards for Business Enterprises No.33-Consolidated Financial Statements on the
judgment criteria of "package deal" (see 5 of Note IV), it is determined whether the multiple transactions belong to the "package
deal". In the case of a "package deal", the accounting treatment shall be performed with reference to the description in the preceding
paragraphs of this section and Note 4, 13 "Long-term Equity Investments"; If the transaction is not a "package deal", the accounting
treatment shall be distinguished between the individual financial statements and the consolidated financial statements:
In the individual financial statements, the sum of the book value of the equity investment held by the Purchaser prior to the
purchase date and the cost of the new investment at the purchase date shall be taken as the initial investment cost of the investment;
Where the equity of the Purchased held before the date of purchase involves other comprehensive income, the other consolidated
income associated with the investment is accounted for on the same basis as the assets or liabilities directly disposed of by the
Purchaser (i.e., except for the corresponding share in the change caused by the acquisition of the net liability or net assets of the
defined benefit plan remeasured in accordance with the equity method, the rest is transferred to the current investment income).
In the consolidated financial statements, the equity of the Purchased held prior to the date of purchase is remeasured according
to the fair value of the equity at the date of purchase, and the difference between the fair value and the carrying value is included in
the investment income of the current period; Where the equity of the Purchased held before the date of purchase involves other
comprehensive income, other consolidated income related thereto shall be accounted for on the same basis as the direct disposal of
the relevant assets or liabilities by the Purchaser (i.e., except for the corresponding share in the change caused by the acquisition of
the net liability or net asset of the defined benefit plan remeasured in accordance with the equity method, the rest is converted into the
investment income of the current period to which the acquisition date belongs).
5. Preparation Method of Consolidated Financial Statement
(1) Principles for determining the scope of the consolidated financial statement
The scope of consolidation of the consolidated financial statements is determined on a control basis. Control means that the
Company has the authority over the Investee, enjoys a variable return by participating in the relevant activities of the Investee, and
has the ability to use its authority over the Investee to influence the amount of such return. The scope of the merger includes the
Company and all its subsidiaries. Subsidiary refers to the main body controlled by the Company.
The Company will re-evaluate the above control definitions once the relevant facts and circumstances change, which results in
the change of the relevant elements.
(2) Preparation method of consolidated financial statement
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
The Company begins to incorporate the net assets of the subsidiary and the actual control of the production and operation
decisions into the scope of the merger from the date when the subsidiary is acquired; Cease to be included in the scope of the merger
as of the date of loss of effective control. For the subsidiaries disposed of, the operating results and cash flows prior to the date of
disposal have been appropriately included in the consolidated income statement and consolidated cash flow statement; For
subsidiaries disposed of in the current period, the opening amount of the consolidated balance sheet is not adjusted. The operating
results and cash flows of subsidiaries increased by consolidation after purchase have been properly included in the consolidated
income statement and consolidated cash flow statement, and the opening and comparative amounts in the consolidated financial
statements have not been adjusted for subsidiaries that are not under the same control. The operating results and cash flows of the
subsidiaries increased by consolidation under the same control from the beginning of the consolidation period to the consolidation
date have been appropriately included in the consolidated profit statement and consolidated cash flow statement, and the comparative
amount of the consolidated financial statements has been adjusted at the same time.
In the preparation of the consolidated financial statements, if the accounting policies or accounting periods adopted by the
subsidiaries are inconsistent with those adopted by the Company, necessary adjustments shall be made to the financial statements of
the subsidiaries in accordance with the accounting policies and accounting periods of the Company. For subsidiaries acquired through
business combination under different control, the financial statements shall be adjusted on the basis of the fair value of identifiable
net assets at the date of purchase.
All significant transaction balances, transactions and unrealized profits within the Company are offset at the time of preparation
of the consolidated financial statements.
The shareholders' equity and the portion of the net profit or loss of the subsidiary that is not owned by the Company for the
current period are separately presented as minority shareholders' equity and minority shareholders' profit or loss in the consolidated
financial statements under shareholders' equity and net profit. The shares of minority shareholders' equity in the net profits and losses
of subsidiaries for the current period are shown as "minority shareholders' profits and losses" under the net profit item in the
consolidated income statement. Losses shared by minority shareholders in a subsidiary exceed the minority shareholders' share in the
shareholders' equity of the subsidiary at the beginning of the period, and still decrease by a number of shareholders' equity.
When the control of the original subsidiary is lost due to the disposal of part of the equity investment or other reasons, the
residual equity shall be revalued according to its fair value at the date of loss of control. The sum of consideration obtained from the
disposal of equity and the fair value of the remaining equity minus the difference between the shares of the net assets of the original
subsidiary that shall be continuously calculated from the purchase date according to the original shareholding proportion shall be
included in the investment income of the current period of loss of control. Other comprehensive income related to the equity
investment of the original subsidiary, in the event of loss of control, the accounting treatment is performed on the same basis as the
direct disposal of the relevant assets or liabilities by the Purchased (i.e. converted to current investment income, except for changes
resulting from the re-measurement of the net liabilities or net assets of the Defined Benefit Plan in the original subsidiary). Thereafter,
the residual equity shall be subsequently measured in accordance with the relevant provisions of Accounting Standards for Business
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
Enterprises No.2-Long-term Equity Investment or Accounting Standards for Business Enterprises No.22-Recognition and
Measurement of Financial Instruments, as detailed in Note IV, 13-Long-term Equity Investment or Note IV, 9-Financial Instruments.
If the Company disposes of the equity investment in subsidiaries step by step until it loses control through multiple transactions.
It is necessary to distinguish whether the transactions that dispose of the equity investment in subsidiaries until it loses control belong
to a package deal or not. The terms, conditions and economic impact of the transactions for the disposal of equity investments in
subsidiaries are in accordance with one or more of the following circumstances and generally indicate that multiple transactions
should be accounted for as a package deal: ① These transactions were entered into simultaneously or taking into account each
other's influence; ② Only when these transactions are taken together can a complete business result be achieved; ③ The
occurrence of one transaction depends on the occurrence of at least one other transaction; ④ It is not economical to consider a
transaction alone, but it is economical to consider it in conjunction with other transactions. For transactions that are not part of the
package deal, each transaction shall be accounted for in accordance with the principles applicable to the "partial disposal of
long-term equity investments in subsidiaries without loss of control" (as detailed in 13 of Note IV) and the "loss of control over
existing subsidiaries as a result of the disposal of part of the equity investments or other reasons" (as detailed in the preceding
paragraph), as appropriate. If the transactions involving the disposal of equity investments in subsidiaries until the loss of control
belong to a package deal, the transactions shall be accounted for as a transaction involving the disposal of subsidiaries and the loss of
control; However, the difference between each disposal price and the share of the subsidiary's net assets corresponding to the disposal
investment prior to the loss of control is recognized in the consolidated financial statements as other consolidated gains and
transferred to the profit or loss for the current period of loss of control in the event of loss of control.
6. Classification of Joint Venture Arrangements and Accounting Treatment of Joint Operation
A joint venture arrangement is an arrangement under the joint control of two or more participants. The Company divides the
joint venture arrangement into joint ventures and joint ventures in accordance with the rights and obligations it enjoys in the joint
venture arrangement. Joint operation refers to the joint venture arrangement in which the Company enjoys the assets related to the
arrangement and assumes the liabilities related to the arrangement. A joint venture refers to a joint venture arrangement in which the
Company only has rights over the net assets of the arrangement.
The Company's investment in the joint venture is accounted for using the equity method, and shall be treated in accordance with
the accounting policy described in Note IV, 13 "Long-term Equity Investment Accounted by the Equity Method".
The Company, as a joint venture party, recognizes the assets and liabilities held and assumed by the Company separately, and
recognizes the assets and liabilities jointly held and assumed by the Company according to the shares of the Company; recognizes the
revenue generated from the sale of the share of joint operating output enjoyed by the Company; recognizes revenue generated from
the sale of output from joint operations on the basis of the Company's share; confirms the expenses incurred by the Company
individually and the expenses incurred by the joint operation according to the shares of the Company.
When the Company invests or sells assets as a joint venture (such assets do not constitute business, the same below), or
purchases assets from the joint venture, the Company recognizes only the portion of the profits and losses attributable to the other
participants in the joint venture that arises from the transaction prior to the sale of such assets to a third party. Where such assets are
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
impaired in accordance with the provisions of Accounting Standards for Business Enterprises No.8-Impairment of Assets, the
Company shall fully recognize such losses in the case where the assets are cast or sold by the Company to joint operations; For the
assets purchased by the Company from the joint operation, the Company recognizes the losses according to the shares it assumes.
7. Determining Standards for Cash and Cash Equivalent
Cash and cash equivalents of the Company include cash on hand, deposits that can be used for payment at any time, and
investments held by the Company with a short term (usually maturing within three months from the date of purchase), high liquidity,
easy conversion into cash of a known amount, and little risk of value change.
8. Foreign Currency Business and Translation of Foreign Currency Statements
(1) Translation method for foreign currency transaction
At the time of initial confirmation, the foreign currency transactions occurring in the Company shall be converted into the
bookkeeping functional currency amount at the spot exchange rate on the trading day, but the foreign currency exchange business or
transactions involving foreign currency exchange occurring in the Company shall be converted into the bookkeeping functional
currency amount at the actual exchange rate.
(2) Translation method for foreign currency monetary items and foreign currency non-monetary item
On the balance sheet date, the foreign currency monetary items are converted at the spot exchange rate on the balance sheet date,
and the exchange difference arising therefrom shall be: ① The exchange difference arising from the special foreign currency
borrowings related to the acquisition and construction of assets eligible for capitalization shall be handled in accordance with the
principle of capitalization of borrowing costs; ② The exchange difference of the hedging instruments used for effective hedging of
the net investment in overseas operations (the difference is included in other comprehensive income, and is not recognized as current
profit or loss until the net investment is disposed of); ③ Except for the amortized cost, the exchange differences arising from the
changes in the book balance of the available-for-sale monetary items in foreign currencies shall be included in the other
comprehensive income, and shall be included in the profits and losses of the current period.
Where the preparation of the consolidated financial statements involves overseas operations, if there are foreign currency
monetary items constituting net investment in overseas operations, the exchange differences arising from exchange rate changes shall
be included in other comprehensive income; When disposing of overseas operations, the profits and losses shall be transferred to the
current disposal period.
Non-monetary items in foreign currencies measured at historical cost shall still be measured at the bookkeeping amount in
functional currency translated at the spot exchange rate on the transaction date. For non-monetary items in foreign currencies
measured at fair value, the spot exchange rate at the date of fair value determination shall be adopted for conversion. The difference
between the converted amount in functional currency and the amount in original functional currency shall be treated as the change in
fair value (including the change in exchange rate), and shall be recorded into the profits and losses of the current period or recognized
as other comprehensive income.
(3) Translation method for financial statements in foreign currencies
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
Where the preparation of the consolidated financial statements involves overseas operations, if there are foreign currency
monetary items constituting net investment in overseas operations, the exchange differences arising from exchange rate changes shall
be as "foreign currency report conversion difference" and be confirmed as other comprehensive income; When disposing of overseas
operations, the profits and losses shall be transferred to the current disposal period.
The foreign currency financial statements of overseas operations shall be converted into RMB statements in the following ways:
the assets and liabilities in the balance sheet shall be converted at the spot exchange rate on the balance sheet date; Except for
"undistributed profits", other items of shareholders' equity shall be converted at the spot exchange rate at the time of occurrence. The
income and expense items in the profit statement shall be converted at the average exchange rate of the current period on the date of
transaction. The undistributed profit at the beginning of the period shall be the undistributed profit at the end of the period converted
from the previous year; The undistributed profits at the end of the year shall be calculated and listed according to the converted
profits distribution items; The difference between the converted asset items and the total amount of the liability items and
shareholders' equity items shall be recognized as other comprehensive income as the translation difference in the foreign currency
statements. In case of disposal of overseas operations and loss of control, the balance in translation of the foreign currency statements
related to the overseas operations as shown below in the shareholders' equity items in the balance sheet shall be transferred to the
profits and losses of the disposal period in whole or in proportion to the disposal of the overseas operations.
Cash flows in foreign currencies and cash flows of overseas subsidiaries shall be converted at the average exchange rate of the
current period on the date of occurrence of the cash flows. The effect of exchange rate changes on cash shall be presented separately
in the statement of cash flows as an reconciling item.
Opening amounts and prior-period actual amounts shall be shown on the basis of amounts translated from the prior-period
financial statements.
When disposing of all the owner's equity of the Company's overseas operations or losing the control over overseas operations
due to the disposal of part of the equity investment or for other reasons, if the following items of shareholders' equity in the balance
sheet are shown below, the balance in translation of the foreign currency statement attributable to the owner's equity of the parent
company related to the overseas operation shall be transferred to the profits and losses of the current disposal period.
In the event that the proportion of overseas business interests is reduced due to the disposal of part of the equity investment or
for other reasons, but the control over overseas business operations is not lost, the balance in the translation of the foreign currency
statements related to the disposal of part of overseas business operations shall be attributed to minority shareholders' interests and
shall not be transferred to the profits and losses of the current period. When disposing of part of the equity of an overseas operation
as an associated enterprise or a joint venture, the balance of the translation of the foreign currency statements related to the overseas
operation shall be transferred into the profits and losses of the current disposal period in the proportion of the overseas operation
disposed of.
9. Financial instruments
A financial asset or financial liability is recognized when the Company becomes a contracting party to a financial instrument
contract. Financial assets and financial liabilities are measured at fair value when initial recognition is made for them. For financial
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
assets and financial liabilities measured at fair value and their changes are recognized in current period profit or loss, related
transaction cost shall be directly recognized in profit or loss. For other types of financial assets and financial liabilities, related
transaction cost shall be recognized in their initial recognition amount.
(1) Method for determining fair value of financial assets and financial liabilities
“ Fair value ” refers to the price that needing to be paid by a market participant for selling an asset or transfer a liability in an
orderly transaction occurring on measurement date. The price from major market is used by the Company to measure the fair value of
financial assets and financial liabilities. In the event that there is no major market for a specific financial asset or financial liability,
the price from most favorable market is used to measure the fair value of the financial asset and financial liability, and the valuation
techniques that are applicable at the time and sufficient data are available for them to use and can be supported by other information.
The input value used in Fair Value Measurement is divided into three levels, specifically, first-level input value is the unadjusted
quotation for the same asset or liability that can be obtained in an active market on the measurement date; second-level input value is
the input value that can be directly or indirectly observed for related asset or liability except for the first-level input value; third-level
input value is the unobservable input value of related asset or liability. First-level input value is firstly used by the Company, and
third-level input value is of the lowest priority. The level of the result of a fair value measurement is determined by the lowest one
among the levels of the input values that are significant to the overall fair value measurement.
(2) Classification, confirmation and measurement of financial assets
Financial assets shall be traded in usual mode and recognized and derecognized based on the data from Transaction Date. Financial
assets are classified into financial assets that are measured at fair value and their changes are recognized in current period profit or
loss, held-to-maturity investments, loans and receivables, and available-for-sale financial assets.
①Financial assets that are measured at fair value and their changes are recognized in current period profit or loss
Including trading financial assets and financial assets designated as being measured at fair value and their changes being recognized
in current period profit or loss
Trading Financial Asset refers to the financial asset that satisfies one of the following conditions: A. The purpose of obtaining the
financial asset is mainly for sale in near future; B. It is part of the identifiable financial instrument portfolio for centralized
management and there is objective evidence indicating that the Company has recently adopted a short-term profit-making method to
manage the portfolio; C. It is a derivative instrument, except for a derivative that is designated as an effective hedging instrument,
under a financial guarantee contract, and associated with a equity instrument that has no quotation in an active market, its fair value
cannot be reliably measured and can only be settled through the delivery of the equity instrument.
A financial asset that meets one of the following conditions can be designated as a financial asset that is measured at fair value and its
changes are recognized in current period profit or loss: A. The designation can eliminate or significantly reduce the inconsistency in
recognition or measurement of related gains or losses caused by the difference of measurement basis of the financial asset; B. The
formal written documents in respect to the Company's risk management or investment strategy have expressly stated that the
financial asset portfolio or the portfolio of financial assets and financial liabilities to which the financial asset belongs is managed,
evaluated based on fair value and is reported to key management personnel.
A financial asset that is measured at fair value and its changes is recognized in current period profit or loss shall be subsequently
measured at fair value. The gain or loss arising from the changes in fair value and the dividend and interest associated with the
financial asset shall be recognized in profit or loss.
②Held-to-maturity investments
Held-to-Maturity Investment refers to a non-derivative financial asset that has a fixed maturity date, a fixed or determinable recovery
amount, and the Company has a clear intention and ability to hold it to maturity date.
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
A held-to-maturity investment shall be subsequently measured with effective interest method according to amortized cost. The gains
or losses arising from derecognition, impairment or amortization shall be recognized in profit or loss.
Effective Interest Method refers to the method of calculating amortized cost and interest income or expense for each installment
according to effective interest rate of a financial asset or a financial liability (including a group of financial assets or financial
liabilities). The effective interest rate is the interest rate used to discount the future cash flow of a financial asset or financial liability
over expected period of existence or in an applicable shorter period to the current carrying amount of the financial asset or financial
liability.
On calculating the effective interest rate, the future cash flows (excluding future credit loss) shall be estimated by the Company based
on all contractual terms of financial assets or financial liabilities. At the same time, various charges, transaction fees and discounts or
premiums that are paid or collected will between contracting parties of financial assets and financial liabilities contracts and are part
of the actual interest.
③ Loans and receivables
Loans and receivables refer to non-derivative financial assets that have no quotation in an active market and have a fixed or
determinable recovery amount. The financial assets classified as loans or receivables by the Company include notes receivable,
accounts receivable, interest receivable, dividends receivable and other receivables.
A loan or receivable is subsequently measured with effective interest method according to amortized cost. The gains or losses arising
from derecognition, impairment or amortization are recognized in profit or loss.
④Available-for-sale financial assets
Including non-derivative financial assets that are designated as available-for-sale financial assets on initial recognition, and financial
assets other than the financial assets that are measured at fair value and their changes are recognized in current period profit or loss,
loans and receivables, held-to-maturity investments.
The ending cost of an available-for-sale liability instrument investment shall be determined with Amortized Cost Method, specifically,
it is the amount from deducting impairment loss from the cumulative value generated from amortizing with Effective Interest Method
the initial recognition amount having repaid principal deducted plus or minus the difference between the aforesaid initial recognition
amount and the amount on maturity date. The ending cost of an available-for-sale equity instrument investment is its initial
acquisition cost.
The available-for-sale financial assets shall be subsequently measured at fair value. Except for impairment losses and the exchange
difference associated with amortized cost of foreign currency monetary financial assets that shall be recognized in current period
profit or loss, the gains or losses arising from changes in fair value shall be recognized in other comprehensive income, and shall be
transferred out and recognized in current period profit or loss when the financial assets are derecognised. However, an equity
instrument investment that has no quotation in an active market and whose fair value cannot be reliably measured and derivative
financial assets that are associated with equity instrument and only be settled through the delivery of the equity instrument shall be
subsequently measured at cost.
The interest earned during the period in which an available-for-sale financial asset is held and the cash dividends declared by investee
shall be included in investment income.
A held-to-maturity investment shall be measured at cost or amortized cost in the event that holding intention or capability changes, or
fair value can no longer be reliably measured, or the period upon the held-to-maturity investment ’ s being reclassified as
available-for-sale financial asset in accordance with Article 16 of the Accounting Standards for Business Enterprises No. 22 –
Recognition and Measurement of Financial Instruments exceeds two full fiscal years, thus the financial asset is no longer applicable
for measurement at fair value. On the reclassification date, the cost or amortized cost of the financial asset shall be the fair value or
book value of the day.
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
If a financial asset has a fixed maturity date, the gains or losses that are related to the financial asset and have been recognized in
other comprehensive income shall be amortized with effective interest method over the remaining term of the financial asset and
recognized in current period profit or loss; The difference between the amortized cost of the asset and the amount on maturity date
shall be amortized with effective interest method over the remaining term of the financial asset and recognized in current period
profit or loss. If a financial asset has no fixed maturity date, the gains or losses originally recognized in other comprehensive income
shall be retained in the shareholders' equity, and transferred out and recognized in current period profit or loss when the financial
asset is disposed.
(3) Impairment of financial assets
Except for the financial assets that are measured at fair value and their changes are recognized in current period profit or loss, the
book value of other financial assets shall be checked by the Company on each the balance sheet date. In the event that there is
objective evidence indicating that some financial asset is impaired, provision for asset impairment shall be accrued.
Impairment test shall be carried by the Company on financial assets with significant single amount. Impairment test can be conducted
on the financial assets having no significant single amount individually or by having them included in a portfolio of financial assets
with similar credit risk characteristics. In the event that no impairment is found in the financial assets (including financial assets with
or without significant single amount) that are tested individually, impairment test shall be conducted for the financial assets by
including them in a portfolio of financial assets with similar credit risk characteristics. Impairment test will not be conducted for the
financial assets that have been confirmed have impairment through individual test by including them in a portfolio of financial assets
with similar credit risk characteristics.
① Impairment of held-to-maturity investments and loans and receivables
The book value of financial assets measured at cost or amortized cost shall be written down to the present value of estimated future
cash flow, and the written-down amount shall be recognized as an impairment loss and be recognized in current period profit or loss.
In the event that there is objective evidence indicating that the value of a financial asset has recovered after recognition of
impairment loss, and is objectively related to the events occurring after the recognition of impairment loss of the financial asset, the
previously recognized impairment loss shall be reversed. The book value of the financial asset after the impairment loss is reversed
shall not exceed the amortized cost of the financial asset on the reversal date assuming that no provision for impairment loss is
accrued.
② Impairment of available-for-sale financial assets
In the event that it has been determined based on comprehensive relevant factors that the decline in the fair value of an
available-for-sale equity instrument investment is a serious decline or non-temporary decline, it indicates that there is impairment
loss for the available-for-sale equity instrument investment. The aforesaid “serious decline” refers to the situation that cumulative
decline in fair value exceeds 20%; “non-temporary decline” refers to the situation that the continuous decline in fair value exceeds
12 months. The basis for the period of continuous decline is:
a. The issuer or the debtor has serious financial difficulties;
b. The debtor violates the terms of 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 carry out other financial restructurings;
e. The financial asset cannot be traded further in an active market due to major financial difficulties of the issuer;
f. It is impossible to identify whether the cash flow of an asset in a portfolio of financial assets has decreased, but after an overall
evaluation based on the public data, it is found that the estimated future cash flow of the portfolio of financial assets has indeed
decreased since the initial confirmation and measurable, such as the increasingly deterioration of debtor ’ s ability to pay for the
portfolio of financial assets, or the rise of unemployment rate of the country or region where the debtor is, significant decline of the
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
price of collateral in the region where the collateral is, and the downturn of the industry in which the debtor is;
g. Significant adverse changes occurring in the technical, market, economic or legal environment in which the issuer of the equity
instrument operates are likely to make equity instrument investor unable to recover investment cost;
h. The fair value of equity instrument investment has experienced a serious or non-temporary decline; serious decline or
non-temporary decline
i. Other objective evidence indicating that financial assets are impaired.
In the event of any impairment loss to an available-for-sale financial asset, the accumulated losses arising from the decline in the fair
value of the available-for-sale financial asset that has been recognized in other comprehensive income shall be transferred out and
recognized in current profit or loss. The transferred-out accumulated losses shall be the balance of the initial acquisition cost of the
asset minus the recovered principal and amortized amount, the current fair value and the impairment loss previously recognized in
profit or loss.
In the event that there is objective evidence indicating that the value of a financial asset has recovered after recognition of
impairment loss, and is objectively related to the events occurring after the recognition of impairment loss of the financial asset, the
previously recognized impairment loss shall be reversed, and the transferred impairment loss of the available-for-sale equity
instrument investment shall be recognized as other comprehensive income, and the impairment loss of the available-for-sale liability
instrument shall be reversed to the current profit and loss.
An equity instrument investment that has no quotation in an active market and its fair value cannot be reliably measured, or a
derivative that is associated with the equity instrument and can only be settled through the delivery of the equity instrument shall not
be reversed.
(4) Recognition basis and measurement method of financial asset transfer
A financial asset that satisfies one of the following conditions shall be derecognized: ① The termination of contractual right to
receive the cash flow of the financial asset; ② The financial asset has been transferred, and almost all the risks and rewards of the
ownership of the financial asset are transferred to the transferee; ③ The financial asset has been transferred, and although the
Company has neither transferred nor retained almost all the risks and rewards of the ownership of the financial asset, the control of
the financial asset has been waived by the Company.
Where all the risks and rewards of the ownership of the financial asset neither have been transfers nor retained, and no control of the
financial asset has been waived by the Company, the financial asset shall be recognized according to the extent of later involvement
in the transferred financial asset, and relevant liabilities shall be recognized accordingly. The “ extent of later involvement in the
transferred financial asset” refers to the level of risks caused to the Company by the change in value of the financial asset.
When the overall transfer of a financial asset meets the conditions for derecognition, the difference between the carrying amount of
the transferred financial asset and the sum of the consideration received from the transfer and the amount of accumulated changes in
fair value originally recognized in other comprehensive income shall be recognized in current period profit or loss.
If the partial transfer of a financial asset meets the conditions for derecognition, the book value of the transferred financial asset shall
be apportioned between the derecognized and the non-derecognized portions based on their proportion in fair value, and the
difference between the sum of the consideration received from the transfer and the amount of accumulated changes in fair value that
shall be apportioned for derecognition and originally recognized in other comprehensive income and the aforesaid apportioned
carrying amount shall be recognized in current period profit or loss.
For a financial asset that is sold with recourse or is transferred by endorsement by the Company, it shall be determined whether
almost all the risks and rewards of the ownership of the financial asset have been transferred. The financial asset that almost all the
risks and rewards of its ownership have been transferred to transferee shall be derecognized; those almost all the risks and rewards of
their ownership are retained, shall not be derecognized. For those almost all the risks and rewards of their ownership are neither
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
transferred nor retained, whether the Company has the control of the financial assets shall be judged, and accounting treatment to
them shall be conducted according to the principles described in the preceding paragraphs.
(5) Classification and measurement of financial liabilities
Financial liabilities are classified into financial liabilities that are measured at fair value and their changes are recognized in current
period profit or loss and other financial liabilities on initial recognition. The initial recognition of financial liabilities is measured at
fair value. For financial liabilities that are measured at fair value and their changes are recognized in current period profit or loss,
related transaction cost shall be directly recognized in current period profit or loss. For other financial liabilities, related transaction
cost shall be recognized in initial recognition amount.
①Financial liabilities that are measured at fair value and their changes are recognized in current period profit or loss
The classification criteria for trading financial liabilities and financial liabilities designated as being measured at fair value and their
changes being recognized in current period profit or loss are the same with those for trading financial assets and financial assets
designated as being measured at fair value and their changes being recognized in current period profit or loss.
A financial liability that is measured at fair value and its changes is recognized in current period profit or loss shall be subsequently
measured at fair value. The gain or loss arising from the changes in fair value and the dividend and interest associated with the
financial liabilities shall be recognized in profit or loss.
②Other financial liabilities
The derivative financial liabilities that are associated with equity instrument that has no quotation in an active market and whose fair
value cannot be reliably measured and are only settled through the delivery of the equity instrument shall be subsequently measured
at cost. Other financial liabilities shall be subsequently measured with effective interest method according to amortized cost, and the
gains or losses arising from derecognition or amortization shall be recognized in profit or loss.
③ Financial guarantee contract
Financial guarantee contracts that are not designated as financial liabilities that are measured at fair value and their changes are
recognized in current period profit or loss, shall be initially recognized at fair value, the subsequent measurement shall be measured
at the amount determined in accordance with the Accounting Standards for Business Enterprises No. 13 - Contingencies after initial
recognition or the balance of the initial recognition amount minus accumulated amortization amount determined in accordance with
the principle of “Accounting Standards for Business Enterprises No. 14 – Income”, whichever is larger.
(6) Derecognition of financial liabilities
A financial liability or part of it can be derecognized only after all or part of its existing obligation has been discharged. In the event
that the Company (debtor) and its creditor sign an agreement to replace the existing financial liability with a new financial liability,
and the contract terms for new financial liability and the existing financial liability are substantially different, the existing financial
liability shall be derecognized and the new financial liability shall be recognized at the same time.
If a financial liability is derecognized in whole or in part, the difference between the carrying amount of the derecognized portion and
the consideration paid (including transferred non-cash assets or new financial liabilities) shall be recognized in current period profit
or loss.
(7) Derivatives and embedded derivatives
Derivatives are initially measured at fair value on the execution date of relevant contracts, and shall be measured at fair value
subsequently. Except for the derivatives that are designated as hedging instruments and are highly effective in hedging whose gains
or losses arising from the changes in fair value will be determined based on the nature of the hedging relationship in accordance with
the requirements of hedge accounting, the changes in fair value of other derivatives shall be recognized in current period profit or
loss.
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
If a hybrid instrument including a embedded derivative is not designated as financial assets or financial liabilities that are measured at
fair value and their changes are recognized in current period profit or loss, the embedded derivative does not have a close relationship
with the main contract in terms of economic characteristics and risks, and if a derivative having the same condition with embedded
derivative, the tools that exist separately are defined by the derivatives, and the embedded derivative shall be separated from the
hybrid instrument and treated as an independent derivative financial instrument. If an embedded derivative cannot be measured
separately at the time of acquisition or subsequent the balance sheet date, the hybrid instrument shall be designated as a financial
asset or financial liability that is measured at fair value and its changes are recognized in current period profit or loss.
(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 and the statutory
right can be enforced at the time, and the Company plans to settle with net amount or realize the financial asset and pay off the
financial liability simultaneously, the financial asset and the financial liability shall be presented in balance sheet with the offset
amount and shall not offset each other.
(9) Equity instruments
An equity instrument is a contract that can evidence a residual equity in the assets of the Company after deducting all liabilities. The
Company’s issuing (including refinancing), repurchasing, selling and cancelling equity instruments are the treatment of changes in
equity by the Company. The Company does not recognize the changes in the fair value of equity instruments. The transaction costs
associated with equity transactions shall be deducted from equity.
Various distributions by the Company to its equity instrument holders (excluding stock dividends) reduce shareholders' equity. The
Company does not recognize the changes in the fair value of equity instruments.
10. Accounts receivable
Receivables include notes receivable, accounts receivable, and other receivables.
(1) Recognition criteria for provision for bad debts
The Company checks the book value of receivables on the balance sheet date. If there is any objective evidence indicating that a
receivable is impaired, provision for impairment shall be accrued: ①Debtor entity’ cancellation, bankruptcy, insolvency, serious
shortage of cash flow, suspension of production due to serious natural disasters, debts cannot be repaid within foreseeable time; ②
Debtor violates terms of contract (such as default or overdue payment of interest or principal), and the debtor’s delay of performing
obligation of repaying debts exceed 5 years; ③Debtor is likely to close down or carry out other financial restructuring; ④ other
objective evidence indicating impairment of receivables.
(2) Accrual method for provision for bad debts
Allowance method is adopted for bad debts that may occur. At the end of the year, impairment test is carried out individually or in
combination. The provision for bad debts shall be accrued based on the difference between the present value and the book value of
future cash flow, and recognized in current profit or loss, but provision for bad debts will not be accrued for the receivables
(including dividends receivable) between the subsidiaries within group, the public maintenance fund and the house sales funds
deposited in the housing fund management center, deposit for capital recognizance and deposits, and the petty cash on account
caused by employees’ borrowings. For receivables with conclusive evidence indicating that they indeed cannot be collected, they
will be treated as bad debts after approved according to the procedures of the Company and write off accrued provision for bad debts.
① Confirmation criteria and accrual method for provision for bad debts for accounts receivable with significant single amount and
single provision for bad debts
A receivable with an amount of more than RMB 10 million or a single amount reaches 5% (and above) of relevant item shall be
recognized by the Company as a receivable with significant single amount.
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
Impairment test is conducted by the Company on the receivables with significant single amount individually receivables with
significant single amount. If there is no impairment in a receivable tested individually, impairment test shall be conducted by
including the receivable in a portfolio of receivables with similar credit risk characteristics. Impairment test will not be conducted for
a receivable that no impairment loss has been determined by individual test by including the receivable in a portfolio of receivables
with similar credit risk characteristics.
② Basis for determining the receivables for provision for bad debts by credit risk combination, and accrual method for bad debts
A. Basis for determining the combination of credit risk characteristics
Receivables without significant single amount or with significant single amount but having no impairment in individual test shall be
grouped according to the similarity and correlation of credit risk characteristics. These credit risks typically reflect the debtors' ability
to repay all amount due based on contractual terms of assets and are related to the future cash flow estimates of the assets under test.
Confirmation criteria for different combinations:
Item Confirmation Criteria for Combination
Classify combinations of according to the Credit risk
Aging Portfolio
characteristics based on ageing of accounts receivable
According to the affiliation between accounts receivable and
Receivables between final controlling party and its subordinate units
the subject of the transaction
Public maintenance fund and the house sales funds deposited in the According to the nature of receivable
housing fund management center.
Deposit/Security deposit Portfolio According to the nature of receivable
According to the affiliation between accounts receivable and
Petty cash on account caused by employees’ borrowings
the subject of the transaction
B. Accrual method for provision for bad debts based on combination of credit risk characteristics
When an impairment test is conducted in combination mode, the amount of provision for bad debts is determined based on the
structure of portfolio of receivables and similar credit risk characteristics (the debtor’s ability to repay arrears according to contract
terms) according to historical loss experience, current economic conditions and evaluation of estimated loss that already exists in the
portfolio of receivables.
The accrual method for different portfolio of provision for bad debts:
Item Accrual Method
Aging Portfolio Accrual proportion corresponding to aging Portfolio
Receivables between final controlling party and its subordinate
Provision for bad debts will not be accrued.
units
Public maintenance fund and the house sales funds deposited in
Provision for bad debts will not be accrued.
the housing fund management center.
Deposit/Security deposit Portfolio Provision for bad debts will not be accrued.
Petty cash on account caused by employees’ borrowings Provision for bad debts will not be accrued.
a. Combination accrual method for accruing provision for bad debts with aging analysis method in portfolio
Accrual Proportion of Notes Accrual Proportion of Accrual Proportion of Other
Aging
Receivable（%） Accounts Receivable（%） Receivable（%）
Within 1 Years （including 1 Years，the
same below）
Among which: Within Credit Period 0 0 0
（Within 3 months）
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
Accrual Proportion of Notes Accrual Proportion of Accrual Proportion of Other
Aging
Receivable（%） Accounts Receivable（%） Receivable（%）
Credit Period～1 Year 2 2 2
1-2 Years 5 5 5
2-3 Years 20 20 20
3-4 Years 50 50 50
4-5 Years 80 80 80
5 Years and over 100 100 100
b. Description of accrual method for accruing provision for bad debts with other method in portfolio
Accrual Proportion of Accrual Proportion of Accrual Proportion
Portfolio Name Notes Receivable（%） Accounts Receivable of Other Receivable
（%） （%）
Receivables between final controlling party and its Provision for bad debts Provision for bad Provision for bad
subordinate units will not be accrued. debts will not be debts will not be
accrued. accrued.
Public maintenance fund and the house sales funds Provision for bad debts Provision for bad Provision for bad
deposited in the housing fund management center. will not be accrued. debts will not be debts will not be
accrued. accrued.
Deposit/Security deposit Portfolio Provision for bad debts Provision for bad Provision for bad
will not be accrued. debts will not be debts will not be
accrued. accrued.
Petty cash on account caused by employees’ Provision for bad debts Provision for bad Provision for bad
borrowings will not be accrued. debts will not be debts will not be
accrued. accrued.
③ Receivables with a single item amount that is not significant but that are individually provisioned for bad debts
The Company conducts impairment test separately for receivables that are not significant in individual amount but have the following
characteristics. If there is objective evidence that it has been impaired, the difference between the present value of future cash flows
and its book value is Confirm the impairment loss and make provision for bad debts. Such as: receivables from related parties;
receivables that are in dispute with the other party or involve litigation or arbitration; there are clear indications that the debtor is
likely to be unable to meet the repayment obligations of the receivables.
(3) Reversal of bad debts
If there is objective evidence that the value of the receivable has been recovered and is related to the events that occurred after the
recognition of the loss, the previously recognized impairment loss is reversed and recognized in profit or loss. However, the book
value after the reversal does not exceed the amortized cost of the receivable on the reversal date, assuming no provision for
impairment.
If the Company transfers the receivables to the financial institution without recourse, the difference between the transaction amount
and the book value of the resold receivables and related taxes will be included in the current profit and loss.
11. Inventory
(1) Classification of inventory
Inventories mainly include raw materials, turnover materials, developed products, inventory goods, materials in transit,
commissioned processing, and reserve tanker storage.
(2) Valuation method for obtaining and issuing inventory
Inventories are valued at actual cost when they are acquired. Inventory costs include purchase costs, processing costs and other costs.
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
They are valued with weighted average method when they are used and issued.
(3) Confirmation of net realizable value of inventories and method of accrual of falling price reserve
Net Realizable Value refers to the amount of estimated selling price of inventories minus the estimated cost till completion, estimated
expenses for selling activity and related taxes and fees in daily activities. When determining the net realizable value of inventories,
solid evidence obtained shall be the basis, and the purpose of holding the inventories and the impact of events after the balance sheet
date shall be considered.
On the balance sheet date, inventories shall be measured at cost or net realizable value, whichever is the lower. When the net
realizable value is lower than the cost, the provision for inventory devaluation shall be accrued. The provision for inventory
devaluation shall be accrued based on the difference between the cost of a single inventory item and its net realizable value. The
provision for inventory devaluation of a large number of inventories with low unit prices shall be based on the type of inventory; for
inventories related to the product range produced and sold in same region, having the same or similar end use or purpose, and
difficult to be separated from other items for measurement, their provision for inventory devaluation can be combined and accrued.
After the provision for inventory devaluation is accrued, if the factors cause the previous written-down inventory value have
disappeared, and the situation results in the fact that the net realizable value of the inventories higher than the book value, the amount
of the provision for inventory devaluation that has been accrued shall be reversed and included in the current period profit or loss.
(4) The Company adopts perpetual inventory system as its inventory system.
(5) Amortization method of low-value consumables and packaging materials
Low-value consumables are amortized on a one-off basis/ partial amortization method when they are used; packaging materials are
amortized on a one-off basis/ partial amortization method when they are used.
12. Held-for-sale assets
If the book value of a non-current asset or to-be-disposed portfolio is recovered by the Company mainly through sale activities
(including the exchange of non-monetary assets with commercial nature, the same below), the non-current asset or to-be-disposed
portfolio falls into held-for-sale category. The specific criteria: both of the following conditions shall be satisfied: a non-current asset
or to-be-disposed portfolio can be sold immediately under the current conditions based on the practice of selling such asset or
to-be-disposed portfolio in similar transactions; the Company has already decided on the sale plan and obtained confirmed purchase
commitment; the sale is scheduled to be completed within one year. Among them, a Disposal Portfolio refers to a group of assets that
will be disposed of as a whole through sale or other approaches in a transaction, and the liabilities directly associated with these
assets transferred along with the assets in transaction. If the portfolio of assets or group of portfolios of assets is allocated goodwill
acquired in business merger in accordance with Accounting Standards for Business Enterprises No. 8 - Asset Impairment, the
Disposal Portfolio shall include the goodwill allocated to it.
In the event that the book value of a non-current asset or to-be-disposed portfolio that has been designated as held-for-sale category is
higher than the net amount of fair value less sales expenses when the non-current asset or to-be-disposed portfolio is initially
measured or measured on the balance sheet date, the book value shall be to the net amount of fair value minus sales expenses, and the
written-down amount shall be recognized as asset impairment loss and included in current period profit or loss. The provision for
impairment loss of the held-for-sale asset shall be accrued. For a Disposal Portfolio, the confirmed impairment loss shall deduct the
book value of the goodwill in the Disposal Portfolio, then deduct the book value of the non-current assets determined by the
measurement on a pro-rata basis in accordance with the applicable Accounting Standards for Business Enterprises No. 42
held-for-sale non-current assets, Disposal Portfolio and Termination of Operations (hereinafter referred to as the “ Guide for
Held-For-Sale”). In the event of an increase of the book value of the held-for-sale Disposal Portfolio minus sales expenses on the
subsequent the balance sheet date, the amount previously written down shall be recovered and be reversed within the mount of the
asset impairment loss recognized in the non-current assets measured by the measurement “Guide for Held-For-Sale” after being
classified as held for sale asset, the reversal amount shall be included in the current period profit or loss, and the book value of all
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
non-current assets (except for goodwill) determined by the measurement on a pro-rata basis in accordance with the applicable
“Guide for Held-For-Sale” shall be increased on a pro-rata basis. The book value of the goodwill that has been deducted and the
impairment loss of the assets recognized before the classification of the held-for-sale non-current assets in accordance with the
applicable “Guide for Held-For-Sale” shall not be reversed.
In terms of the held-for-sale non-current assets or non-current assets in Disposal Portfolio, there is no accrual or amortization for
depreciation, and the interest from and other expenses from the liabilities in held-for-sale Disposal Portfolio shall still be recognized.
When a non-current asset or Disposal Portfolio no longer meets the conditions for Held-For-Sale category, non-current asset or
Disposal Portfolio will no longer be classified as Held-For-Sale category by the Company or the non-current asset will be removed
from the Held-For-Sale Disposal Portfolio, and be measured based on one of the following two values, whichever is lower: (1) The
book value before being classified as held-for-sale category adjusted based on the depreciation, amortization or impairment that
should have be confirmed if it is not classified as held-for-sale category; (2) recoverable amount.
13. Long-term equity investment
The Long-Term Equity Investment in this section refers to the long-term equity investment that the Company has control, joint
control or significant influence over investees. A long-term equity investment that the Company does not have control, joint control
or significant influence over investee shall be accounted as an available-for-sale financial asset or a financial asset that is measured at
fair value and its changes are recognized in current period profit or loss. See Section 9 of the Notes "Financial Instruments."
Joint control refers to the control that the Company shares with other party/parties for an arrangement in accordance with relevant
agreements, and relevant activities of the arrangement can only be decided based on the consensus of all parties sharing the control
rights before making a decision. Significant Influence refers to power of the Company to participate in the decision-making of the
financial and operating policies of the investee, but the Company cannot control or jointly control the development of these policies
with other parties.
(1) Determination of investment cost
For a long-term equity investment obtained from a combination of businesses under the same control, the apportioned share of the
book value in the final controller's consolidated financial statements on the combination date in accordance with the shareholders'
equity shall be the initial investment cost of the long-term equity investment. The capital reserve shall be adjusted subject to the
difference between the initial investment cost of the long-term equity investment and the cash paid, the non-cash assets transferred,
and the book value of the debts assumed; if the capital reserve is insufficient for offsetting, the retained earnings shall be adjusted.
Where the equity securities are issued as merger consideration, the apportioned share of the book value in the final controller's
consolidated financial statements on the combination date in accordance with the shareholders' equity shall be the initial investment
cost of the long-term equity investment, and the total par value of the issued shares is taken as the share capital. The capital reserve
shall be adjusted subject to the difference between the initial investment cost of the long-term equity investment and the total par
value of the shares issued; if the capital reserve is insufficient for offsetting, the retained earnings shall be adjusted. Where the equity
of combined parties under the same control is obtained through multiple transactions and a business combination under the same
control is formed finally, it shall be treated differentially based on whether it is a “package deal” if it belongs to a “package deal”
all transactions will be treated as a transaction that obtains control. If it is not a “package deal”, the apportioned share of the book
value in the final controller's consolidated financial statements on the combination date in accordance with the shareholders' equity
shall be the initial investment cost of the long-term equity investment. The capital reserve shall be adjusted subject to the difference
between the initial investment cost of the long-term equity investment and the sum of the book value of long-term equity investment
before combination date and the book value of the new consideration for the new share on the combination date. If the capital reserve
is insufficient for offsetting, the retained earnings shall be adjusted. The equity investments that are held prior to the combination date
and are recognized with equity recognized or as available-for-sale financial asset as other comprehensive income will not be given
accounting treatment for the moment.
For a long-term equity investment obtained from a combination of businesses not under the same control, the initial investment cost
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
of the long-term equity investment shall be based on the combination cost on the purchase date. The combination cost includes the
assets paid by purchaser, the liabilities incurred or assumed, and the sum of the fair value of issued equity securities. Where the
equity of combined parties not under the same control is obtained through multiple transactions and a business combination under the
same control is formed finally, it shall be treated differentially based on whether it is a “package deal”: if it belongs to a “package
deal” all transactions will be treated as a transaction that obtains control. If it is not a “package deal” the initial investment cost of
the long-term equity investment calculated by the cost method shall be calculated based on the sum of the book value of the equity
investment in the original holder and the new investment cost.
The original equity that is accounted with equity method and is related to other comprehensive income will not be accounted
temporarily. Where the original equity investment is an available-for-sale financial asset, the difference between its fair value and the
book value, and the accumulated fair value changes previously recognized in other comprehensive income shall be transferred to
current period profit or loss.
Intermediary expenses such as for auditing, legal services, assessment and other related expenses incurred by a combining party or a
purchaser for business combination shall be recognized in current period profit or loss when incurred.
The equity investments other than formed by business combination shall be initially measured at cost. The cost will be determined
based on the following amount according to different methods of the acquisition of long-term equity investment: the purchase price
in cash actually paid by the Company; the fair value of the equity securities issued by the Company, the value agreed in relevant
investment contract or agreement; the fair value or original book value of the assets exchanged in non-monetary asset exchange
transaction; the fair value of the long-term equity investment itself. Any expenses, taxes and other necessary expenses directly related
to the acquisition of long-term equity investments shall also be included in the cost of investment. The cost of long-term equity
investment for the additional investment that can exert significant influence on investee or implement joint control but does not
constitute control shall be the sum of the fair value of the originally held equity investment recognized in accordance with the
Accounting Standards for Business Enterprises No.. 22 – Recognition and Measurement of Financial Instruments and the cost for
new investment.
(2) Follow-up measurement and confirmation methods for profit and loss
The Equity Method shall be used to account for long-term equity investments that have joint control over the invested entity
(except for those constituting joint operators) or have significant impact on the invested entity. In addition, the company's financial
statements use the Cost Method to account for long-term equity investments, which can control the long-term equity investment of
the investee.
a. Long-term equity investment based on Cost Method
When accounting with Cost Method, long-term equity investment is priced at the initial investment cost, and the cost of the
long-term equity investment is adjusted by adding or recovering the investment. Except for the actual payment at the time of
obtaining investment or the cash dividends or profits included in the consideration but not yet issued, the current investment income
shall be recognized according to the cash dividends or profits declared by the investee.
b. Long-term equity investment accounted for by Equity Method
When accounting with Equity Method, if the initial investment cost of a 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 the long-term equity
investment shall not be adjusted; if the initial investment cost is less than the fair value share of the identifiable net assets of the
investee when investing, the difference shall be included in the current profit and loss, and the cost of the long-term equity
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
investment shall be adjusted
When accounting with Equity Method, the investment income and other comprehensive income are recognized separately
according to the shares of the net profit or loss and other comprehensive income that should be enjoyed or shared, and the book value
of the long-term equity investment should be adjusted at the same time. The book value of long-term equity investment is reduced
accordingly by calculating the share that should be enjoyed according to the profit or cash dividend declared by the investee. The
book value of long-term equity investment shall be adjusted and included in the capital reserve for other changes in the owner's rights
and interests of the invested entity other than the net profit and loss, other comprehensive income and profit distribution. When
confirming the share of the net profit and loss of the investee, the net profit of the investee shall be adjusted and confirmed on the
basis of the fair value of the identifiable assets of the investee at the time of investment. If the accounting policies and periods
adopted by the invested entity are inconsistent with the Company, the financial statements of the invested entity shall be adjusted in
accordance with the accounting policies and periods of the Company, and the investment income and other comprehensive income
shall be confirmed accordingly. For the transactions between the Company and the associates and joint ventures, the assets invested
or sold do not constitute a business, and the unrealized gains and losses from internal transactions are offset against the portion of the
Company that is attributable to the proportion of the shares, on this basis. investment profit and loss should be confirmed. However,
the unrealized internal transaction losses incurred by the Company and the investee are not included in the impairment losses of the
transferred assets. Where the assets invested by the Company into a joint venture or an associates constitute a business, if the investor
obtains long-term equity investment but does not control, the fair value of the invested business shall be deemed as the initial
investment cost of the new long-term equity investment, and the difference between the initial investment cost and the book value of
the invested business is fully recognized in the current profits and losses. If the assets sold by the Company to a joint venture or an
associate that constitute a business, the difference between the consideration value obtained and the book value of the business shall
be fully recognized in the profits and losses of the current period.
Where the assets purchased by the Company from the joint ventures and associates constitute a business, the accounting
treatment shall be carried out in accordance with the provisions of the “Accounting Standards for Business Enterprises No. 20 -
Merger of Enterprises”, and the profits or losses related to the transactions shall be fully recognized.
When confirming the net loss that incurred by the investee should be shared, the book value of the long-term equity investment
and other long-term equity that substantially constitutes the net investment of the investee are reduced to zero. In addition, if the
Company has an obligation to bear additional losses to the investee, the estimated liabilities shall be recognized according to the
estimated obligations and included in the current investment losses. If the investee achieves net profit in the following period, the
Company shall resume recognizing the share of income after making up for the unrecognized share of loss.
For the long-term equity investment in the joint ventures and associates held by the Company for the first time before the
implementation of the new accounting standards, if there is a debit balance of equity investments related to the investment, the
current profits and losses shall be accounted for by the straight-line amortization of the original remaining period.
c. Acquisition of Minority Equity
In the preparation of the consolidated financial statements, if the difference between the long-term equity investment added by
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
purchasing minority shares and the net assets share that should be continuously calculated by the subsidiary company from the
purchase date (or the consolidation date) is calculated according to the proportion of newly added shares, the retained earnings shall
be adjusted; and if the capital reserve is insufficient to offset, the retained earnings shall be adjusted.
d. Disposal of long-term equity investment
In the consolidated financial statements, the parent company partially of disposes of the long-term equity investment of the
subsidiary without losing control, the difference of the corresponding net assets in the subsidiary between the disposal price and the
disposal of the long-term equity investment is included in the shareholders' equity. it shall be treated in accordance with the relevant
accounting policies described in “Notes on the preparation of consolidated financial statements” in Note IV.5 .
For the disposal of long-term equity investment in other cases, the difference between the book value of the disposed equity and
the actual acquisition price shall be included in the current profits and losses.
If the long-term equity investment is accounted for by equity method, the remaining equity after disposal is still accounted for
by equity method, when disposing, the other comprehensive income which were originally included in shareholder's rights and
interests shall be accounted for on the same basis as the assets or liabilities directly disposed of by the investee. The owner's equity
recognized as a result of changes in the owner's equity of the investee other than net profit or loss, other comprehensive income and
profit distribution, it should be carried forward to the current profit and loss
For the long-term equity investment accounted by Cost Method, the remaining equity is still accounted by Cost Method after
disposal, other comprehensive income that recognized by equity method accounting or financial instrument recognition and
measurement criteria accounting before obtaining control over the investee shall be accounted for on the same basis as the assets or
liabilities directly disposed of by the investee, and shall be settled to the current profit and loss in proportion. Changes of the net
assets of investee in the owner's equity other than net profit or loss, other comprehensive income and profit distribution 's that
recognized by equity method shall be settled to the current profit and loss in proportion.
Where the Company loses control over the investee due to disposal of part of its equity investment, when preparing individual
financial statements, if the remaining equity after disposal can exercise joint control or exert significant influence on the investee, it
shall be accounted for by equity method instead, and the remaining equity shall be adjusted by accounting by equity method when it
is deemed to be acquired. If the remaining equity after disposal cannot be jointly controlled or exerts significant influence on the
investee, it shall be accounted for according to the relevant provisions of the financial instrument recognition and measurement
criteria, and the difference between the fair value and the book value on the date of loss of control. It is included in the current profit
and loss. Before the Company obtains control over the investee, other comprehensive income recognized by equity method
accounting or financial instrument recognition and measurement criteria is used to directly dispose of the relevant assets with the
investee, accounting treatment based on the same basis as the investee directly disposes of related assets or liabilities when the
control of the investee is lost, Accounting is treated on the same basis as the liabilities. Changes in the owner's equity other than net
profit or loss, other comprehensive income and profit distribution of the investee's net assets recognized by the equity method are
carried forward to the current profit or loss when the control of the investee is lost. Among them, the remaining equity after disposal
is accounted for using the equity method. Where the remaining equity after disposal is accounted for by equity method, other
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
comprehensive income and other owner's equity should be settled by proportion.
If the Company loses its joint control or significant influence on the investee due to the disposal of part of the equity investment,
the remaining equity after disposal shall be accounted for according to the financial instrument recognition and measurement criteria,
and the difference between the fair value and the book value on the date of loss of joint control or significant influence is recognised
in the current profit or loss. The other comprehensive income recognized in the original equity investment by the equity method is
accounted for on the same basis as the investee's direct disposal of related assets or liabilities when the equity method is terminated,
Owner's equity recognized as a result of changes in other owners' equity other than net profit or loss, other comprehensive income
and profit distribution of the investee should be transferred to current investment income when terminating the equity method
The Company disposes of the equity investment in the subsidiaries step by step through multiple transactions until the loss of
control. If the above-mentioned transactions are part of a package transaction, the transactions are treated as a transaction dealing
with the equity investment of the subsidiary and losing control. The difference between the book value of each long-term equity
investment corresponding to the disposal price and the disposal of the equity before loss of control is first recognized as other
comprehensive income, and when the control is lost, it is transferred to the current profit and loss of loss of control.
14． Investment Real Estate
Investment Real Estate refers to real estate held for the purpose of earning 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, and buildings that have been
rented. In addition, if the board of directors (or similar institution) has a written resolution on the vacant buildings held by the
company for the purpose of operating the lease, which is clearly stated that it will be used for operating leases and that the intention
to hold is no longer changed in the short term, which is also reported as an investment real estate.
Investment real estates are initially measured at cost. Subsequent expenditures related to investment real estate are included in
the cost of investment real estate if the economic benefits associated with the asset are likely to flow in and the cost can be reliably
measured. Other follow-up expenses are recognized in profit or loss in the period in which they are incurred.
The Company adopts the cost model to conduct subsequent measurement of investment real estate and depreciation or
amortization according to the policy consistent with the building or land use rights.
For details of the impairment test method and impairment provision method of real estates, 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 is used as the recorded value after conversion.
When the use of investment real estate is changed to self-use, the investment real estate is converted into fixed assets or
intangible assets from the date of change. When the use of self-use real estate changes to earn rent or capital appreciation, the fixed
assets or intangible assets are converted into investment real estate from the date of change. In the case of investment real estate
measured by the cost model when the conversion occurs, the book value before conversion is used as the entry value after
conversion; if it is converted into investment real estate measured by the fair value model, the fair value of the conversion date is
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
used as the entry value after conversion.
When an investment real estate is disposed of, or permanently withdrawn from use and is not expected to obtain economic
benefits from its disposal, the confirmation of the investment real estate shall be terminated. Disposal income from the sale, transfer,
retirement or damage of investment properties is charged to the current profit and loss after deducting its book value and related taxes
and fees.
15. Fixed Assets
(1) Confirmation conditions for fixed assets
Fixed Assets refer to tangible assets held for the purpose of producing goods, providing labor services, renting or operating
management, and having a service life of more than one fiscal year. Fixed assets are recognized only when the economic benefits
associated with them 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 projected abandonment costs.
(2) Depreciation methods for various types of fixed assets
Fixed assets are depreciated over their useful lives using the straight-line method from the month following the scheduled
availability. The service life, estimated net residual value and annual depreciation rate of various fixed assets are as follows:
Depreciation Residual Annual depreciation rate
Category Depreciation Method
period (Year) rate(%) (%)
Buildings
straight-line depreciation 8-50 5 1.90-12.00
Electronic equipment straight-line depreciation
3-10 4、5 9.50—32.00
Machinery equipment straight-line depreciation
5-28 4、5 3.39—19.20
Transport equipment straight-line depreciation
5-10 4、5 9.50—19.20
office equipment straight-line depreciation
3-10 4、5 9.50-32.00
Other equipment straight-line depreciation
5-28 4、5 3.39—19.20
The estimated net residual value refers to the expected state after the estimated useful life of the fixed assets has expired and is
at the end of its useful life. The amount currently obtained by the Company from the disposal of the assets after deducting the
estimated disposal expenses.
(3) Impairment test method and Impairment provision method for fixed assets
For details of Impairment test method and impairment provision method for fixed assets, please refer to Note IV. 20
“Long-Term Asset Impairment”.
(4) Recognition basis and valuation method of fixed assets acquired by financing lease
A finance lease is a lease that transfers substantially all the risks and rewards associated with ownership of an asset, and its
ownership may or may not be transferred. If it is reasonable to determine the ownership of the leased asset at the expiration of the
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
lease term, the depreciation shall be calculated within the useful life of the leased asset; If it is not reasonable to determine the
ownership of the leased asset at the expiration of the lease term, depreciation shall be calculated within a relatively short period of the
lease term and the service life of the leased assets.
(5) Others
The subsequent expenses related to fixed assets, if the economic benefits related to 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 book value of the replaced part should be terminated.
The subsequent expenditures other than mentioned as above are recognized in profit or loss in the period in which they are incurred.
The fixed asset is derecognized when the fixed asset is in disposal or is not expected to generate economic benefits by using or
disposal. The difference between the disposal income from the sale, transfer, retirement or damage of the fixed assets less the
carrying amount and related taxes is recognized in profit or loss for the current period.
The Company reviews the useful life, estimated net residual value and depreciation method of fixed assets at least at the end of
the year, and changes as an accounting estimate if changes occur.
16. Construction in progress
The cost of construction in progress is determined based on actual project expenditure, including various project expenditures
incurred during the construction period, capitalized borrowing costs before the project reaches the expected usable status, and other
related expenses. Construction in progress is carried forward to fixed assets when it is ready for its intended use.
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 directly attributable to the acquisition, construction or
production of assets eligible for capitalization, capitalization is began when asset expenditures have occurred, borrowing costs have
occurred, and the acquisition, construction or production activities necessary to bring the assets to the intended usable or saleable
state have begun. And capitalization is stopped when the assets under construction or production that meet the capitalization
conditions are ready for their intended use or saleable status. The remaining borrowing costs are recognized as an expense in the
period in which they are incurred.
The interest expenses actually incurred in the current period of special borrowings shall be capitalized after subtracting the
interest income from the unused borrowing funds deposited into the bank or the investment income obtained from the temporary
investment. For the general borrowings, according to the accumulated asset expenditures exceed the special borrowings. The
capitalization amount is determined by multiplying the weighted average of which accumulated asset expenditure exceeds the asset
expenditure of the special borrowing portion by the capitalization rate of the general borrowings used. The capitalization rate is
determined based on the weighted average interest rate of general borrowings.
During the capitalization period, the exchange differences of foreign currency special borrowings are all capitalized; the
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
exchange differences of foreign currency general borrowings are included in the current profits and losses.
Assets eligible for capitalization refer to assets such as fixed assets, investment real estate and inventories that require a
substantial period of acquisition, construction or production activities to achieve the intended use or sale status.
If the assets eligible for capitalization are interrupted abnormally during the acquisition, construction or production process and
the interruption period 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 refer to identifiable non-monetary assets without physical form owned or controlled by the Company.
Intangible assets are initially measured at cost. Expenditure related to intangible assets is included in the cost of intangible assets
if the relevant economic benefits are likely to flow to the Company and its costs can be measured reliably. Expenditure on other items
other than this is recognised in profit or loss when incurred.
The acquired land use rights are usually accounted for as intangible assets. The related land use rights and building construction
costs of self-developed and constructed buildings are accounted for as intangible assets and fixed assets, respectively. In the case of
purchased houses and buildings, the relevant price is distributed between the land use rights and the buildings. If it is difficult to
allocate them reasonably, all of them are treated as fixed assets.
Since the intangible assets with limited service life are available for use, the original value minus the estimated net residual
value and the accumulated amount of impairment reserve shall be amortized by the straight-line method during their expected service
life. Intangible assets with uncertain service life shall not be amortized.
At the end of the period, the service life and amortization methods of intangible assets with limited service life are reviewed,
and if any change occurs, it is treated as a change of accounting estimate. In addition, the service life of intangible assets with
uncertain service life is also reviewed. If there is evidence that the period for which the intangible assets bring economic benefits to
the enterprise is foreseeable, the service life of intangible assets is estimated and amortized according to the amortization policy of
intangible assets with limited service life.
(2) Research and development expenditure
The company's expenditure for internal research and development project is divided into research stage expenditure and
development stage expenditure.
Expenditures for the research phase shall be recognized in profit or loss when incurred.
Expenditures for the development phase that meet the following conditions shall be recognized as intangible assets, and
expenditures in the development stage that fail to meet the following conditions are included in current profit and loss: It is necessary
to combine the characteristics of the company's internal research and development projects to disclose the specific criteria for the
division of the research phase and the development phase, as well as the specific conditions for the capitalization of expenditure
during the development phase.
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
a. It is technically feasible to complete the intangible asset to enable it to be used or sold;
b. The intent to complete the intangible asset and use or sell it;
c. The way in which intangible assets generate economic benefits, including the ability to prove that the products produced from
the intangible assets having a market or the intangible assets having a market, and the intangible assets will be used internally, which
can prove its usefulness;
d. sufficient technical, financial resources and other resources for supporting the development of the intangible assets and the
ability to use or sell the intangible assets;
e. Expenditure attributable to the development phase of the intangible asset can be reliably measured.
If it is impossible to distinguish the expenditures between in the research phase and in the development phase, all the research
and development expenditures incurred will be included in the current profit and loss.
(3) Impairment test method and Impairment provision method for intangible assets
For details of the impairment test method and impairment provision method, please refer to Note IV. 20 “Long-Term Asset
Impairment”.
19．Long-term Deferred Expenses
The long-term deferred expenses are all expenses that have occurred but shall be borne by the reporting period and subsequent
periods with amortization period of more than one year. The company's long-term deferred expenses mainly include lease of land use
right and renovation costs of factory building. Long-term deferred expenses are amortized on a straight-line basis over the estimated
benefit period.
20. Long-term assets impairment
For fixed assets, construction in progress, intangible assets with limited useful life, investment real estate measured by cost
model, and non-current non-financial assets such as long-term equity investments in subsidiaries, joint ventures and associates, the
Company determines whether there is any indication of impairment on the balance sheet date. If there is any indication of impairment,
the recoverable amount is estimated and the impairment test is carried out. Goodwill, intangible assets with uncertain service life and
intangible assets that not yet ready for use are tested for impairment annually, regardless of whether there is any indication of
impairment.
If the result of the impairment test indicates that the recoverable amount of the asset is lower than its book value, the impairment
provision is made based on the difference and is included in the impairment loss. The recoverable amount is the higher of the fair
value of the asset less the disposal expense and the present value of the estimated future cash flow of the asset. The fair value of
assets is determined according to the sale agreement price in a fair transaction. If there is no sales agreement but there is an active
market for the asset, the fair value is determined according to the buyer's bid for the asset; if there is neither sales agreement nor
active market for assets, the fair value of assets shall be estimated based on the best information available. Asset disposal expenses
include legal fee, taxes, transportation expenses and direct expenses incurred to make assets saleable. The present value of the
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
estimated future cash flow of an asset is determined by the appropriate discount rate discounting and the estimated future cash flow
generated by the asset during its continuous use and final disposal. The asset impairment provision is calculated and confirmed on the
basis of individual assets. If it is difficult to estimate the recoverable amount of an individual asset, the recoverable amount of the
asset is determined by the asset group which the asset belongs to. An asset group is the smallest portfolio of assets that can generate
cash inflows independently.
The book value of the goodwill listed separately in the financial statements is amortized into asset groups or portfolios that are
expected to benefit from the synergies of business combinations when impairment tests are conducted. The test results show that the
recoverable amount of the asset group or portfolio containing the assessed goodwill is lower than its book value, the corresponding
impairment losses should be confirmed. The amount of impairment loss is first deducted from the book value of the goodwill
amortized to the asset group or portfolio, and then deducted proportionally from the book value of other assets according to the
proportion of the book value of assets other than goodwill in the asset group or portfolio.
Once the above asset impairment loss is confirmed, it will not be reversed to the part where the value is restored in the future
period.
21. Employee Compensation
The Company's employee compensation mainly includes short-term employee remuneration, Post-employment Benefits,
Termination Benefits and benefits for other long-term employee. Among them:
Short-term employees remuneration mainly includes wages, bonuses, allowances and subsidies, employee welfare fees, medical
insurance premiums, maternity insurance premiums, work injury insurance premiums, housing fund, labor union funds, employee
education funds, and non-monetary benefits. The Company recognizes the actual short-term employee's remuneration as a liability in
the accounting period in which employees provide services to the Company and recognizes them in profit or loss or related asset
costs. Non-monetary benefits are measured at fair value.
Post-employment Benefits mainly include basic retirement security, unemployment insurance, and annuities. The
Post-employment Benefit Scheme includes a Defined Contribution Plan and a Defined Benefit Plan. If a Defined Contribution Plan is
adopted, the corresponding amount of the deposit shall be included in the relevant asset cost or current profit and loss as incurred. (1)
The Defined Contribution Plan is recognized as a liability based on a fixed fee paid to an independent fund and is included in the
current profit and loss or related asset costs; (2) The Defined Benefit Plan is accounted for using the expected cumulative benefits
unit method Specifically, the Company will convert the welfare obligation arising from the Defined Benefit Plan into the final value
of the departure time according to the formula determined by the expected cumulative benefits unit method; then it is attributed to the
employee's in-service period and is included in the current profit and loss or related asset cost.
If the labor relationship with the employee is terminated before the employee's labor contract expires, or if the employee is
encouraged to accept the reduction voluntarily, when cannot withdrawing unilaterally the dismissal benefits provided by the
termination of the labor relationship plan or the reduction proposal, and when confirming the costs associated with the restructuring
involving the payment of the dismissal benefits, whichever is earlier, the Company will recognize the employee compensation
liabilities arising from the dismissal benefits, and included in the current profit and loss. However, if the dismissal benefits are not
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
expected to be fully paid within 12 months after the end of annual reporting period, they shall be treated in accordance with other
long-term employee compensations.
The internal retirement plan for employees shall be treated in the same way as the above-mentioned dismissal benefits. The
company will pay the internal retired staff the salary and the social insurance premiums from the employee's lay-off to normal
retirement, and will include in the current profit and loss (dismissal benefits) when the conditions of the estimated liabilities are met.
If the other long-term employee benefits provided by the Company to the employees are in line with the Defined Contribution
Plan, they shall be accounted for Defined Contribution Plan, and otherwise accounted for the Defined Benefit Plan.
22. Estimated liabilities
When the obligations related to the contingencies meet the following conditions, they are recognized as estimated liabilities: (1)
The obligation is the current obligation assumed by the Company; (2) The performance of this obligation is likely to result in the
outflow of economic benefits; (3) The amount of the obligation can be reliably measured.
On the balance sheet date, taking into account factors such as risks, uncertainties and time value of money related to
contingencies, the estimated liabilities are measured in accordance with the best estimate of the expenditure required to perform the
relevant current obligations.
If all or part of the expenses required to discharge the estimated liabilities are expected to be compensated by the third party, the
compensation amount will be separately recognized as an asset when it is basically determined to be received, and the confirmed
compensation amount does not exceed the book value of the estimated liabilities.
(1) Loss Contract
A loss contract is a contract in which the cost of fulfilling a contractual obligation will inevitably occur more than the expected
economic benefit. If the contract to be executed becomes a loss contract, and the obligation arising from the loss contract satisfies the
conditions for the recognition of the above-mentioned estimated liabilities, the portion of the contract's estimated loss that exceeds
the recognized impairment loss (if any) of the contracted asset is recognized as the estimated liability.
(2) Restructuring Obligations
For reorganization plans that are detailed, formal, and have been announced to the public, the amount of the estimated liabilities
are determined based on the direct expenses related to the reorganization, subject to the recognition conditions of the aforementioned
estimated liabilities. For the restructuring obligation to the part of business sold, the obligation related to the reorganization is
confirmed only when the company promises to sell part of the business (that is, when the binding sale agreement is signed).
23. Share-based Payments
(1) Accounting Treatment of Share-based Payments
A share-based payment is a transaction that grants an equity instrument or assumes a liability determined on the basis of an
equity instrument in order to obtain services from employees or other parties. Share-based Payments include equity-settled share
payment and cash-settled share payment.
a) Equity-settled Share Payment
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
The equity-settled share payment in exchange for the services from employee is measured at the fair value of the granting of
employees' equity instruments at the grant date. If the fair value is vested in the completion of the waiting period of service or the
fulfillment of the required performance conditions, during the waiting period, the amount of the fair value is calculated by the
straight-line method into the relevant costs or expenses based on the best estimate of the number of vesting equity instruments; Or If
the vesting right is granted immediately after the grant, the calculation of the amount of the fair value is included in the relevant cost
or expense on the grant date, and the capital reserve is increased accordingly.
On each balance sheet date during the waiting period, the Company makes the best estimate based on the latest information on
the changes in the number of employees with vesting rights, and corrects the number of equity instruments that are expected to be
vested. The impact of the above estimates shall be included in the current related costs or expenses, and the capital reserve is adjusted
accordingly.
In the case of equity-settled share-based payments in exchange for other parties' services, if the fair value of other parties'
services can be reliably measured, the fair value of other services shall be measured at the fair value on the date of acquisition; If the
fair value of the other party's services cannot be measured reliably, the fair value shall be measured at the fair value of the equity
instrument at the date the service is acquired, and is included in the relevant cost or expense, which increases the shareholders' equity
accordingly.
When the fair value of the equity instrument is not measured reliably, it is measured at the intrinsic value of the equity
instrument at the date of service acquisition, each subsequent balance sheet date and the settlement date.
b) Cash-settled Share Payment
The cash-settled share payment is measured at the fair value of the liabilities determined by the Company based on shares or
other equity instruments. If the vesting right is available immediately after the grant, the relevant costs or expenses shall be included
on the date of grant, and the liabilities shall be increased accordingly; if vesting right is available after the service is completed within
the waiting period or met the required performance conditions, based on the best estimate of the vesting rights on each balance sheet
date of the waiting period, according to the fair value of the liabilities assumed by the company, the services obtained in the current
period are included in the cost or expense, and the liabilities are increased accordingly.
The fair value of the liabilities shall be re-measured on each balance sheet date and settlement date before the settlement of the
relevant liabilities, and the changes shall be recorded in the profits and losses of the current period.
(2) Relevant Accounting Treatment of share-based payment plan’s modification and termination
When the Company modifies the share-based payment plan, if the modification increases the fair value of the equity instruments
granted, the increase in the fair value of the equity instruments is recognized accordingly. The increase in the fair value of equity
instruments refers to the difference between the fair value of the equity instruments before and after the modification. If the
modification reduces the total fair value of the share-based payment or adopts other methods that are not conducive to the employee,
the service obtained shall continue to be accounted for, as if the change has never occurred, unless the Company cancels some or all
of equity instruments.
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
During the waiting period, if the granted equity instrument is cancelled, the Company will cancel the granted equity instrument
as an accelerated exercise, and the amount to be recognized in the remaining waiting period will be immediately included in the
current profit and loss, and the capital reserve will be recognized. If the employee or other party can choose to meet the non-vesting
conditions but fails to meet the waiting period, the Company will treat it as a cancellation of the equity instrument.
(3) Accounting Treatment of Share Payment Transactions between the Company and its Shareholders or Actual Controllers
In respect of the share-based payment transaction between the company and the shareholders or actual controllers of the
company, If one of the settlement enterprise and the service receiving enterprise is in the company and the other is outside the
company, it shall be accounted for in the consolidated financial statements of the company according to the following provisions:
a.) If the settlement enterprise settles with its own equity instrument, the share-based payment transaction shall be treated as
equity-settled share-based payment; otherwise, it shall be treated as a cash-settled share-based payment.
If the settlement enterprise is an investor of a serviced enterprise, it shall be recognized as the long-term equity investment of the
serviced enterprise according to the fair value of the equity instrument at the grant date or the fair value of the liability to be assumed,
and the capital reserve (other capital reserve) or liabilities shall be recognized. .
b.) If the serviced enterprise has no settlement obligation or grants its own employees the equity instruments, the share payment
transaction shall be treated as equity-settled share payment; if the serviced enterprise has settlement obligation and grants its
employees other than its own equity instruments, the share payment transaction shall be treated as a cash-settled share payment.
24. Preferred Stock, Perpetual Capital Securities and Other Financial Instruments
(1) Distinction between perpetual capital securities and Preferred Stock
Financial instruments such as perpetual bonds and preferred stocks issued by the Company, as well as meeting the following
conditions, shall be used as equity instruments:
a.) The financial instrument does 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;
b.) In the case of the financial instrument is to be settled or available with the company's own equity instruments in the future, if
the financial instrument is a non-derivative, it does not include the contractual obligation to deliver a variable amount of its own
equity instruments; if it is a derivative, the Company can only settle the financial instrument by exchanging a fixed amount of cash or
other financial assets with a fixed amount of its own equity instruments.
Except for financial instruments that can be classified under the above conditions, other financial instruments issued by the
Company should be classified as financial liabilities.
If the financial instruments issued by the Company are compound financial instruments, they are recognized as a liability based
on the fair value of the liability component, and are recognized as “other equity instruments” based on the amount actually received
after deducting the fair value of the liability component. The transaction costs incurred in issuing a compound financial instrument
are apportioned in proportion to their respective total issue price between the liability component and the equity component.
(1) Accounting treatment methods such as perpetual capital securities and preferred stocks
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
Related interest, dividends, gains or losses of financial instruments such as perpetual capital securities and preferred stocks
classified as financial liabilities, and gains or losses arising from redemption or refinancing, are included in the current profits and
losses except for borrowing costs that meet the capitalization conditions (see Note 4, 17 “Borrowing Fees”).
When financial instruments such as perpetual capital securities and preferred stocks classified as equity instruments are issued
(including refinancing), repurchased, sold or cancelled, the Company shall treat it as a change in equity, and related transaction
costs are also deducted from equity. The Company's allocation of equity instrument holders is treated as profit distribution.
The Company does not recognize changes in the fair value of equity instruments.
25. Revenue
(1) Commodity Sales Revenue
When the main risks and rewards of commodity ownership is transferred to the buyer without retaining the continuing
management rights usually associated with the ownership and without effectively controlling of the sold commodity, if the amount of
revenue can be reliably measured, and the relevant economic benefits are likely flow into enterprise and the relevant costs incurred or
will incurred can be reliably measured the sales revenue of commodities shall be confirmed.
The specific principles for the confirmation of the Company's sales revenue are as follows: a.) Wholesale Business: When the
commodity have been delivered to the customer and confirmed by the customer, and the Company has already received the payment
or has obtained the proof of request for payment, the sales revenue shall be confirmed; b.) Retail Business: When the payment has
been received and the goods have been delivered to the customer, the sales revenue shall be confirmed.
(2) Income from labor services
In the case the results of the labor service transaction can be reliably estimated, the labor income provided is confirmed on the
balance sheet date according to the percentage of completion method. The completion progress of the labor transaction is determined
by the ratio of the completed work or the proportion of the labor service provided to the total labor service, or by the ratio of labor
costs incurred to the estimated total cost.
Reliable estimates of results of the labor transactions provided mean that it can be simultaneously met:
a.) The amount of income can be measured reliably.
b.) Relevant economic benefits are likely to flow into the enterprise;
c.) The degree of completion of the transaction can be determined reliably;
d.) The costs that have occurred and will occur in the transaction can be measured reliably.
The specific principles for the company's processing service revenue recognition are as follows: a.) Processing Business with
incoming materials (receiving processing fee): The processing fee income is confirmed when the relevant goods are processed and
delivered to the customer, and the processing fee or the relevant processing fee is received.
If the result of the service transaction cannot be measured reliably, the service income provided will be confirmed according to
the amount of the service cost that has occurred and is expected to be compensated, and the service cost that has occurred will be
recognized as the current cost. Income shall be not recognized if the incurred labor costs are not expected to be compensated.
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
When the contract or agreement signed by the Company with other enterprises includes the sale of commodity and the provision
of labor services, if the sales of commodity and the provision of labor services can be distinguished and separately measured, the
sales of commodity and the provision of labor services shall be handled separately; If the sales of commodity and the labor service
part cannot be distinguished, or if it can be distinguished but cannot be separately measured, the contract shall be all treated as the
sales of commodity.
(3) Revenue from charge for use
Revenue shall be recognized on an accrual basis in accordance with the relevant contract or agreement.
(4) Interest income
Interest income shall be calculated according to the time and actual interest rate of the use of the company's monetary funds by
others.
26. Government subsidies
Government subsidy refers to the company's acquisition of monetary and non-monetary assets from the government free of
charge, excluding the capital invested by the government as an investor and enjoying the corresponding owner's rights and interests.
Government subsidies include assets-related subsidies and revenue-related subsidies. The company defines the government subsidy
obtained for the purchase and construction of long-term assets or for the formation of long-term assets in other ways as the
government subsidy related to assets; the remaining government subsidy is defined as the government subsidy related to income. If
the object of subsidies is not specified in government documents, the subsidies shall be divided into income-related government
subsidies and assets-related government subsidies in the following ways: (1) If the government document clarifies the specific project
for which the subsidy is targeted, the proportion of the expenditure amount of the assets to be formed and the amount of the
expenditures included in the expenses in the budget of the specific project are divided, and the proportion of subsidy division needs
to be reviewed on each balance sheet day and changed if necessary. (2) In government documents, if the purpose is expressed only in
general terms and no specific project is specified, the subsidy shall be regarded as a government subsidy related to the income.
Where a government subsidy is a monetary asset, it shall be measured according to the amount received or receivable. If the
government subsidies are non-monetary assets, they shall be measured at the fair value; if the fair value cannot be obtained reliably,
they shall be measured at the nominal amount. Government subsidies measured in nominal amounts shall be recognized directly in
current profits and losses.
The Company usually confirms and measures the government subsidy according to the amount when it is actually received.
However, if there is conclusive evidence at the end of the period that the relevant conditions stipulated in the financial support policy
can be met and the financial support funds are expected to be received, it shall be measured according to the amount receivable.
Government subsidies measured in accordance with the amount receivable shall meet the following conditions at the same time: (1)
The amount of the subvention receivable has been confirmed by the authorized government departments, or can be reasonably
calculated according to the relevant provisions of the formally issued financial fund management measures, and there is no
significant uncertainty in the amount expected; (2) According to the "Regulations on the Openness of Government Information" that
the local financial department officially released and in accordance with the provisions of the "Regulations on the Openness of
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
Government Information," the financial support project and its financial fund management measures should be inclusive (any eligible
enterprise can apply for them), rather than being specifically tailored to specific companies; (3) The relevant subsidy approval has
clearly promised the payment period, and the allocation of the payment is guaranteed by the corresponding budget, so it can be
reasonably ensure that it can be received within the prescribed time limit; (4) Other relevant conditions (if any) to be met in
accordance with the specific circumstances of the Company and the subsidies.
Government subsidies related to assets are recognized as deferred earnings and are divided into current profits and losses in a
reasonable and systematic way during the service life of the assets concerned. The government subsidies related to revenue, which
are used to compensate for the related cost or loss in the subsequent period, shall be recognized as deferred income, and shall be
recognized in profit or loss in the period in which the related costs or losses are recognized; if it is used to compensate the related
costs or losses that has occurred, it shall be directly recognized in the current profit and loss.
It includes government subsidies related to both assets and income, and different parts are separately classified for accounting
treatment; if it is difficult to distinguish, the whole is classified as government subsidies related to income.
Government grants related to the daily activities of the Company shall be included in other income or cost deductions according
to the nature of the economic business; government subsidies unrelated to daily activities shall be included in the non-operating
revenues and expenses.
When the recognized government subsidies need to be returned, if there are relevant deferred earnings balances, the book
balance of related deferred earnings shall be deducted, and the excess part shall be included in the current profits and losses or the
book value of assets shall be adjusted (the government subsidies related to assets which are deducted from the book value of relevant
assets at the time of initial confirmation); otherwise, the book value of assets 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 (or assets) formed in the current and previous periods are measured
by the expected amount of income tax payable (or returned) in accordance with the provisions of the Tax Law. The amount of taxable
income on which current income tax expenses are calculated is based on the corresponding adjustment of pre-tax accounting profits
in the reporting period in accordance with the relevant tax laws.
(2) Deferred Income Tax Assets and Deferred Income Tax Liabilities
The difference between the book value of certain assets and liabilities and their tax basis, and the temporary difference between
the book value of items that are not recognized as assets and liabilities but which can be determined as their tax basis according to the
tax law, are confirmed by the balance sheet liability method.
Taxable temporary differences which related to the initial recognition of goodwill and the initial recognition of an asset or
liability arising from a transaction that is neither a business combination nor an accounting profit or taxable income (or deductible
loss), relevant deferred income tax liabilities shall not be recognized. In addition, for taxable temporary differences related to
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
investments in subsidiaries, associates and joint ventures, if the Company is able to control the turnaround time of temporary
differences, and the temporary difference is unlikely to be reversed in the foreseeable future, the related deferred income tax
liabilities shall not be recognized. Except for the above exceptions, the Company recognizes all other deferred income tax liabilities
arising from taxable temporary differences.
Taxable temporary differences which related to the initial recognition of an asset or liability arising from a transaction that is
neither a business combination nor an accounting profit or taxable income (or deductible loss), relevant deferred income tax
liabilities shall not be recognized. In addition, for taxable temporary differences related to investments in subsidiaries, associates and
joint ventures, if the temporary difference is unlikely to be reversed in the foreseeable future, or the amount of taxable income used to
offset the temporary difference is unlikely to be obtained in the future, the deferred income tax assets concerned shall not be
recognized. Except for the above exceptions, the Company recognizes other deferred income tax assets that can offset temporary
differences, subject to the amount of taxable income that is likely to be obtained to offset temporary differences.
For deductible losses and tax credits that can be carried forward in subsequent years, the corresponding deferred income tax
assets are recognized to the extent that it is probable that the future taxable income shall be used to offset the deductible losses and
tax credits. .
On the balance sheet date, the deferred income tax assets and deferred income tax liabilities shall be measured at the applicable
tax rates in the period in which the related assets are recovered or the related liabilities are recovered in accordance with the tax laws.
On the balance sheet date, the book value of deferred income tax assets is reviewed. and the book value of deferred income tax
assets is written down if it is likely that sufficient taxable income will not be available to offset the benefits of deferred income tax
assets in the future. When it is possible to obtain sufficient taxable income, the amount written down shall be reversed.
(3) Income tax expenses
Income tax expenses include current income tax and deferred income tax.
In addition to recognizing that the current income tax and deferred income tax related to other transactions and matters directly
included in shareholder's rights and interests shall be recognized in other comprehensive income or shareholder's rights and interests,
and the book value of adjusted goodwill from deferred income tax resulting from the merger of enterprises, the other current income
tax and deferred income tax expenses or gains shall be recognized in profit or loss for the current period.
(4) Offset of Income Tax
When the company has legal rights to settle on a net basis, and intends to settle on a net basis or acquire assets and pay off
liabilities at the same time, the company's current income tax assets and current income tax liabilities shall be presented on a net basis
after the offset.
When it has the legal right to settle current income tax assets and current income tax liabilities on a net basis, and deferred
income tax assets and deferred income tax liabilities are related to the income tax levied by the same tax administration department
on the same tax payer or to different tax payers, but in the future, during each important period of deferred income tax assets and
liabilities being reversed, the taxpayer involved intends to settle the current income tax assets and liabilities on a net basis, or acquire
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
assets and pay off liabilities simultaneously, the deferred the income tax assets and deferred income tax liabilities of the Company
shall be presented on a net basis after offset.
28. Lease
Financial lease is a lease that essentially transfers all risks and rewards related to the ownership of assets. Its ownership may or
may not be transferred eventually. Leases other than financial leases are operating leases.
(1) The Company records and operates the leasing business as a lessee.
Rental expenses for operating leases shall be included in the related asset costs or current profits and losses in the straight line
method during each period of the lease period. The initial direct costs shall be included in the current profits and losses. Contingent
rentals shall be recognized in profits and losses when incurred.
(2) The company records and operates the leasing business as a lessor.
The rental income of operating lease shall be recognized as current profit and loss according to the straight line method during
each period of the lease period. The larger initial direct expenses are capitalized when occurring, and the profits and losses of the
current period shall be recorded in stages on the same basis as the recognized rental income during the whole lease period; the
smaller initial direct expenses shall be recorded in the profits and losses of the current period when occurring. Contingent rentals
shall be included in current profits and losses when actually occurring.
(3) The company records financial leasing business as a lessee
At the beginning of the lease period, the lower of the fair value of the leased assets and the present value of the minimum lease
payment on the lease start date is regarded as the entry value of the leased assets, and the lowest lease payment shall be regarded as
the entry value of the long-term payables, and the difference shall be regarded as the unrecognized financing cost. In addition, the
initial direct costs attributable to the lease project shall also be included in the value of the leased assets when they occur during the
lease negotiation and the signing of the lease contract. The balance of the minimum lease payment after deducting the unrecognized
financing costs shall be presented as long-term liabilities and long-term liabilities due within one year, respectively.
The unrecognized financing cost shall be calculated by the real interest rate method during the lease period. Contingent rentals
shall be included in current profits and losses when actually occurring.
(4) The company records financial leasing business as a lessor
At the beginning of the lease period, the sum of the minimum lease receipt and the initial direct cost on the lease start date is
regarded as the entry value of the financial lease receivable, and the unsecured balance shall be recorded. The difference between the
sum of the minimum lease receivable, the initial direct cost and the unsecured balance and the sum of its present value is recognized
as the unrealized financing income. The balance of the receivable financial lease after deducting the unrealized financial income shall
be presented as long-term claims and long-term claims maturing within one year, respectively.
The unrealized financing income shall be calculated and confirmed by the real interest rate method during the lease period.
Contingent rentals shall be recognized in current profits and losses when actually occurring.
29. Other Important Accounting Policies and Accounting Estimates
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
(1) Termination of Business
Termination of business operations refers to those components which have been disposed of or classified by the Company as
holding for sale and which can be separately distinguished in the operation and preparation of financial statements if one of the
following conditions is satisfied: a.) The component represents an independent major business or a major business area; b.) The
component is part of a disposal plan for an independent major business or a major business area; c.) The component is a subsidiary
company acquired solely for resale.
(2) Hedging Accounting
In order to avoid commodity price risk in spot operation, the company designates commodity futures contracts as hedging tools
to meet the prescribed conditions of commodity futures hedging. Since January 1, 2016, the company adopts the following hedging
accounting methods stipulated in “ Interim Provisions on the Accounting Treatment of Commodity Futures Hedging Business ”
(CaiKuai [2015] No. 18) to deal with such business, and the aforementioned hedge accounting methods are no longer applied to such
businesses.
The hedging of the Company is fair value hedging.
At the beginning of the hedging, the Company specifies the hedging relationship in writing, including records: The relationship
between hedging tools and hedged items, as well as risk management objectives and hedging strategies; the nature and quantity of
hedged items; the nature and quantity of hedging instruments; the nature and identification of hedged risks; Hedging type (fair value
hedging or cash flow hedging); The evaluation of hedging effectiveness includes the analysis of the economic relationship between
hedged items and hedging instruments, the hedging ratio and the source of hedging inefficiency. Start specifying the date of the
hedging relationship, etc.. In addition, when significant changes occur on the balance sheet date or related circumstances will affect
the requirement of hedging effectiveness, the company will evaluate the existing hedging relationship to determine whether the
hedging relationship should be terminated or whether the number of designated hedged items or hedging instruments should be
adjusted to maintain the hedging ratio (i.e. rebalancing) that meets the requirement of hedging effectiveness.
If due to the change of risk management objectives, the company can no longer specify the established hedging relationship, or
the hedging tool is closed or delivered at maturity, or the risk exposure of the hedging project disappears, or if the hedging
relationship no longer meets the application conditions of hedging accounting after considering rebalancing, the hedging relationship
will be terminated.
a.) Fair Value Hedging
For fair value hedging, during the duration of the hedging relationship, the Company takes into account the profits or losses
resulting from the changes in the fair value of hedging instruments in the current profits and losses. If the hedged item is in stock,
during the duration of the hedging relationship, the Company will include the changes in the fair value of the hedged item in the
current profits and losses, and adjust the book value of the hedged item. If the hedged item is a definite commitment, the accumulated
fair value change of the hedged item after the hedging relationship is designated shall be recognized as an asset or liability, and shall
be included in the profits and losses of each relevant period.
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
When the hedging relationship terminates, if the hedged item is in stock, the company transfers the book value of the hedged
item into the cost of sale when the inventory is sold; if the hedged item is a definite commitment to purchase commodities, the
company will transfer the assets or liabilities formed by the change of the accumulated fair value of the hedged item into the initial
cost of inventory when confirming the relevant inventory; If the hedged item is the definite commitment of the selling commodity,
the company will transfer the assets or liabilities formed by the change of the accumulated fair value of the hedged item into the sales
revenue when the sale is realized.
30. Changes in Important Accounting Policies and Accounting Estimates
(1) Changes of Accounting Policy
Contents and Causes of Accounting Policy Change procedures for examination and Remarks
approval
Due to the implementation of “ Notice of the Ministry of The items affected in
Finance on Revising and Issuing the Format of Financial the 2017 financial
Statements of General Enterprises” (Cai Kuai[2018] No.15), statements are detailed
the format of enterprise financial statements was revised, the —— in other notes.
format of financial statements was changed accordingly, and
the comparative data during the comparable period was
adjusted.
Notes:
The Company adopts the retrospective adjustment method to the accounting policy change, which has the following main
impact on the financial statement presentation items in 2017:
Presentation Items in 2017 Amount Presentation Items in 2018 Amount
Financial Statement Financial Statement
Notes Receivable
Accounts Receivable 75,165,127.11 Notes Receivable and Accounts 75,165,127.11
Receivable
Interest Receivable 2,657,591.11
Dividend Receivable Notes Receivable and Accounts
Receivable 75,722,139.87
Other Receivables 73,064,548.76
Fixed Assets 1,333,410,146.38
Fixed Assets 1,333,410,146.38
Liquidation of Fixed Assets
Construction in Progress 12,737,673.01
Construction in Progress 12,737,673.01
Engineering Materials
Notes Payable 83,154,229.20 Notes Payable and Accounts
400,693,157.47
Accounts Payable 317,538,928.27 Payable
Interest Payable 86,064,211.31
Dividends Payable 3,397,317.01 Other Accounts Payable 541,399,822.67
Other Accounts Payable 451,938,294.35
Long-Term Accounts Payable 801,625.20
Long-term Accounts Payable 801,625.20
Special Accounts Payable
Management Cost Management Cost 232,950,762.23
236,344,350.73
R&D Expenses 3,393,588.50
(2) Changes in accounting estimates
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
The company has no changes in accounting estimates this year.
31. Major Accounting Judgment and Estimation
In the process of applying accounting policies, due to the inherent uncertainty of business activities, the Company needs to
judge, estimate and assume the book value of statement items that cannot be accurately measured. These judgments, estimates and
assumptions are based on the past experience of the company's management and are based on other relevant factors. These judgments,
estimates and assumptions affect the reported amounts of income, expenses, assets and liabilities and the disclosure of contingent
liabilities on the balance sheet date. However, the uncertainties in these estimates may lead to actual results that are different from the
current estimates of the company's management, which may lead to significant adjustments in the book value of future assets or
liabilities affected.
The company periodically reviews the foregoing judgments, estimates and assumptions on the basis of continuous operation,
and the changes in accounting estimates only affect the current period of change, and the number of impacts will be confirmed in the
current period of change. If the changes affect both the current period and the future periods, the number of impacts will be
confirmed in the current and future periods of change.
On the balance sheet date, the important areas in which the company needs to judge, estimate and assume the amounts of items
in the financial statements are as follows:
(1) Reserve for Inventory Depreciation
In accordance with the inventory accounting policy, the Company calculates according to the lower of cost and net realizable
value, and calculates the reserve for depreciation of inventory price for the old and unsalable inventory whose cost is higher than net
realizable value. Inventory impairment to net realizable value is based on assessing the salability of inventory and its net realizable
value. Appraisal of inventory impairment requires management to make judgments and estimates on the basis of obtaining conclusive
evidence, taking into account the purpose of holding inventory and the impact of events after the balance sheet date. The discrepancy
between the actual results and the original estimates will affect the book value of the inventory and the provision for inventory
depreciation or reversal during the estimated period of change.
(2) Fair Value of Financial Instruments
For financial instruments that do not have active trading markets, the Company determines their fair value through various
valuation methods. These valuation methods include discounted cash flow model analysis and so on. When valuating, the Company
needs to estimate future cash flow, credit risk, market volatility and correlation, and select appropriate discount rate. These
assumptions are uncertain, and their changes will affect the fair value of financial instruments.
(3) Depreciation and Amortization
After considering the residual value of investment real estate, fixed assets and intangible assets, the Company shall depreciate
and amortize them in a straight line method during their service life. The company regularly reviews the service life to determine the
amount of depreciation and amortization charges included in each reporting period. The service life of the company is determined on
the basis of previous experience of similar assets and combined with anticipated technological updates. If significant changes in
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
previous estimates occur, depreciation and amortization costs will be adjusted in the future.
(4) Deferred Income Tax Assets
Within the limit where there is likely to be sufficient taxable profits to offset losses, the Company recognizes deferred income
tax assets for all unused tax losses. This requires the Company's management to use a large number of judgments to estimate the time
and amount of future taxable profits, combined with tax planning strategy, to determine the amount of deferred income tax assets that
should be recognized.
(5) Income Tax
In our normal business activities, there are some uncertainties in the final tax treatment and calculation of some transactions.
Whether some projects can be paid before tax needs the approval of the competent tax authorities. If there is a difference between the
final result of these tax items and the initial estimated amount, the difference will affect the current income tax and deferred income
tax in the final period.
(6) Fair Value Measurement
Certain assets and liabilities of the Company are measured at fair value in the financial statements. The board of directors of the
Company has established a Valuation Committee (which is headed by the chief financial officer of the Company) to determine
appropriate valuation techniques and input values for fair value measurement. When estimating the fair value of an asset or liability,
the Company uses available observable market data. If the input value of the first level is not available, the Company will employ a
third-party qualified evaluator to carry out the evaluation. The Valuation Committee works closely with qualified external evaluators
to determine appropriate valuation techniques and input values for relevant models. The CFO reports quarterly to the board of
directors the findings of the Valuation Committee to explain the reasons for the fluctuations in the fair value of the assets and
liabilities involved. Information on valuation techniques and input values used in determining the fair value of various assets and
liabilities is disclosed in NoteⅩ.
Section 5. Taxes
1. Main Taxes and Tax Rates
Types Tax Basis Tax Rate
After deducting the allowable amount of input tax deducted in the current
period, the difference between the sales of goods, taxable services and taxable 3%、5%、6%、10%、
Value Added Tax services income calculated in accordance with the provisions of the Tax Law is
the taxable value-added tax. 11%、13%、16%、17%
Urban Maintenance &
According to the actual value-added tax 7%
Construction Tax
extra charges of education According to value added tax and consumption tax on the basis of actual
3%
funds payment
Local Extra Charges of According to value added tax and consumption tax on the basis of actual
2%
Education Funds payment
Business Income Taxes According to taxable income 10%、15%、17%、25%
According to 70% of original value of the real estate (or rental income) as the
Property Tax tax base; according to the original value of the real estate deducted 30% at a 1.2%、8%、12%
time.
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
Types Tax Basis Tax Rate
According to Real Estates Income ； According to the transfer of real estate
Land Value Increment Tax 1.5%、5%
amount of simple levy levy
Notes on tax payers of different enterprise income tax rates:
Tax Payers Income Tax Rate
Linan ChunManYuan Agricultural Development Co., Ltd. 10%
Jingliang (Singapore) International Trade Co., Ltd. 17%
Beijing Guchuan Bread Food Co., Ltd. 15%
2. Tax Preferences and Approval Documents
Hangzhou Linan Little Angel Food Co., Ltd., a 4th tier subsidiary company of the Company, is a welfare enterprise. It enjoys the
preferential VAT policy of immediate refund upon payment of 35,000 yuan per person per year for Promoting the
Employment of Disabled Persons in 2015 and April 2016. Since May 2016, it has enjoyed the preferential VAT policy of
immediate refund upon payment in Preferential Value-Added Tax Policies for Promoting the Employment of Disabled
Persons (CaiShui [2016] No.52).
In accordance with the relevant provisions of Ministry of Finance and State Administration of Taxation “Notice on Preferential
Enterprise Income Tax Policies for Employment of Persons with Disabilities”(Cai Shui[2009] No.70), Hangzhou Linan Little Angel
Food Co., Ltd. , a 4th tier subsidiary company of the Company: Where an enterprise employs persons with disabilities, on the basis of
deduction according to the wages paid to the disabled workers, it may deduct the amount of taxable income according to 100% of the
wages paid to the disabled workers.
According to the announcement of Zhejiang Provincial Tax Bureau (No. 8, 2014), Hangzhou Linan Little Angel Food Co., Ltd. ,
a 4th subsidiary company of the Company, can enjoy the preferential policy of reducing the urban land use tax by an annual quota of
2,000 yuan per person for the average number of actual resettlement, and the maximum amount of reduction is the urban land use tax
payable by the unit in the current year.
Jingliang (Singapore) International Trade Co., Ltd., a 3rd tier subsidiary of the Company, levies taxes on the principle of
territoriality. For the subsidiary newly established in Singaporean, during the first consecutive three audit year, can enjoy the first
three-year government tax exemption plan. Singapore's tax exemption plan is as follows: the first SGD 100,000 of annual income and
the first SGD100,000: tax rate of 0. Parts of SGD100,001 to 300,000: tax rate 8.5%. Over $300,000 at tax rate 17%.
Beijing Guchuan Bread&Food Co., Ltd., a 3rd tier subsidiary of the Company, is a high-tech enterprise. On November 30, 2018,
it obtained the certificate of high-tech enterprise and the certificate number GR201811007245. It is valid for three years. It enjoys the
preferential tax policy of paying enterprise income tax at the 15% tax rate according to the relevant provisions of both “Law of the
People's Republic of China on Tax Collection and Administration” and “Rules for the Implementation of the Tax Collection and
Administration Law of the People's Republic of China”.
The company level 4 subsidiary Jingliang (Hebei) Oil Industry Co., Ltd., according to the financial department documents, local
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
taxation bureau in hebei province, hebei province document ji caishui [2016] no. 74 "about parts reserve commodity announcement
concerning the tax policy, accounting books shall be exempt from stamp duty for funds, to undertake business book stand in the
process of buying and selling contract commodity reserves shall be exempt from stamp duty, other parties in the contract should pay
the stamp duty shall also be subject to duty-payment according to the parties. Property tax and land use tax of cities and towns shall
be exempted from the property tax and land use tax of cities and towns that undertake the business of commodity reserve for their
own use. The notice will be executed on January 1, 2016, solstice, and December 31, 2018.
Jingliang (Hebei) Oil Industry Co., Ltd., a 4th subsidiary company of the Company, exempts the sale of edible vegetable oil
stored by the government from VAT according to “Notice of the Ministry of Finance and the State Administration of Taxation on the
Levy and Exemption of Value Added Tax for Food Enterprises”（Cai Shui [1999] No.198）
The company level 3 subsidiary Beijing day weikang grease DiaoXiao center co., LTD., according to the national tax
administration of the ministry of finance, the notice about food enterprises exempted from VAT tax word (1999), article 5, 198,
responsible for collection and storage of grain purchase and sale of state-owned grain enterprises and business duty-free items listed
in the notice of other food business, and government reserves edible vegetable oil sales enterprises, which should be examined by the
competent tax authorities deemed tax-exempt status, not reported to the competent tax authorities where the audit determined that no
exemption, From June 1, 2017 to December 31, 1999, the company will exempt edible vegetable oil stored by the government from
VAT.
Section 6. Notes on Items in Consolidated Financial Statements
The following annotated items (including annotations of major items in the company's financial statements) refer to January 1,
2018 at the beginning of the year, December 31, 2018 at the end of the period, 2018 at the current period and 2017 at the last period,
unless otherwise specified.
1. Monetary funds
Items Ending Balance Beginning Balance
Cash in Treasury 46,418.17 119,766.22
Bank Deposits 794,705,225.28 937,214,125.42
Other Currency Funds 130,118,373.33 77,104,771.79
Total 924,870,016.78 1,014,438,663.43
Among them: the total amount of money deposited
abroad
The restricted monetary funds are as follows:
Items Ending Balance Beginning Balance
Periodic Deposit Receipts (management expects to
57,000,000.00
hold to maturity)
Total 57,000,000.00
Note: The limited money fund at the end of the period is 57,000,000.00 yuan, see Section 6, 52 for details.
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
2. Derivative Financial Assets
Items Ending Balance Beginning Balance
Futures Contracts 71,260,414.60 176,699,298.60
Total 71,260,414.60 176,699,298.60
Note:
(1) In order to avoid commodity price risk in spot operation, the Company designates commodity futures contracts as hedging
instruments to meet the prescribed conditions. Since January 1, 2016, the Company has adopted the hedging accounting method
stipulated in the Interim Provisions for Accounting Processing of Commodity Futures Hedging Business (Cai Kuai [2015] No.18).
(2) The company's derivative financial assets are soybean oil, palm oil, vegetable oil and soybean meal futures contracts purchased
by subsidiaries of the third and fourth tier.
3. Notes Receivable and Accounts Receivable
Items Ending Balance Beginning Balance
Notes Receivable
Accounts Receivable 97,775,710.11 75,165,127.11
Total 97,775,710.11 75,165,127.11
(1) Accounts Receivable
a.) Classified Disclosure of Accounts Receivable
Ending Balance
Type(s) Book Balance Bad Debt Provision
Book Value
Amount Ratio(%) Amount Provision Ratio(%)
Receivables with significant individual amounts
and separate provision for bad debts
Accounts Receivable for Bad Debt Provision
Based on Credit Risk Characteristic Portfolio
Portfolio 1 - Age-based accounts receivable 94,766,012.02 446,302.71 94,319,709.31
Portfolio 2 - Related Party Accounts Receivable 3,456,000.80 3,456,000.80
Portfolio Total 98,222,012.82 99.57 446,302.71 0.45 97,775,710.11
Receivables with minor amounts but separate
420,575.29 0.43 420,575.29 100.00
provision for bad debts
Total 98,642,588.11 100.00 866,878.00 — 97,775,710.11
(Continued)
Beginning Balance
Type(s) Book Balance Bad Debt Provision
Book Value
Amount Ratio(%) Amount Provision Ratio(%)
Receivables with significant individual amounts
and separate provision for bad debts
Accounts Receivable for Bad Debt Provision
Based on Credit Risk Characteristic Portfolio
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
Portfolio 1 - Age-based accounts receivable 72,814,580.29 482,408.18 72,332,172.11
Portfolio 2 - Related Party Accounts Receivable 2,832,955.00 2,832,955.00
Portfolio Total 75,647,535.29 99.45 482,408.18 0.64 75,165,127.11
Receivables with minor amounts but separate
420,575.29 0.55 420,575.29 100.00
provision for bad debts
Total 76,068,110.58 100.00 902,983.47 — 75,165,127.11
A. In portfolio, Accounts Receivable with provision for bad debts is calculated by age analysis method
Ending Balance
Aging
Accounts Receivable Bad Debt Provision Provision Ratio(%)
Within 1 Year
Among them: within the credit period 82,537,774.17 0
Credit Period - 1 year (including 1 year) 6,840,738.97 136,814.78 2
1 to 2 years 5,264,078.88 263,203.93 5
2 to 3 years 51,420.00 10,284.00 20
3 to 4 years 72,000.00 36,000.00 50
4 to 5 years 80
More than 5 years 100
Total 94,766,012.02 446,302.71 —
(Continued)
Beginning Balance
Aging
Accounts Receivable Bad Debt Provision Provision Ratio(%)
Within 1 Year
Among them: within the credit period 63,757,518.38 0
Credit Period - 1 year (including 1 year) 8,010,976.05 160,219.52 2
1 to 2 years 534,198.10 26,709.91 5
2 to 3 years 167,345.26 33,469.05 20
3 to 4 years 107,802.00 53,901.00 50
4 to 5 years 143,159.00 114,527.20 80
More than 5 years 93,581.50 93,581.50 100
Total 72,814,580.29 482,408.18 —
B. In portfolio, Accounts Receivable with provision for bad debts is calculated by other methods
Ending Balance
Portfolio Name(s)
Accounts Receivable Bad Debt Provision Provision Ratio(%)
Beijing Jingliang E-Commerce Co., Ltd. 146,333.80
Beijing Zhujun Grain and Oil Supply Co., Ltd. 1,394,180.00
Beijing Jingliang Oriental Grain and Oil Trade
1,067,408.00
Co., Ltd.
Beijing Haidian Xijiao Grain and Oil Supply
436,300.00
Station Co., Ltd.
Beijing Guchuan Food Co., Ltd. 370,505.00
Jingliang (Tianjin) E-commerce Co., Ltd. 4,074.00
Beijing Liangguan Grain and Oil Supply Station 37,200.00
Total 3,456,000.80
Note: The above accounts receivable for the provision for bad debts by other methods are all those that occurred before the related
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
parties within the group.
C、Ending Receivables with minor amounts but separate provision for bad debts
Ending Balance
Accounts Receivable (by unit) Accounts Bad Debt Provision
Provision Reason
Receivable Provision Ratio
Beijing Rongfa Lida Grain and Oil Trade Co., Ltd. 163,143.00 163,143.00 100.00 expected unrecoverable
Beijing Shunyi Longhua Shopping Center 600.00 600.00 100.00 expected unrecoverable
Beijing Guotai Ping'an Tianzhu Commercial expected unrecoverable
1,809.60 1,809.60 100.00
Development Co., Ltd.
Beijing Guotai Ping'an Department Store Co., Ltd. 10,862.90 10,862.90 100.00 expected unrecoverable
Carrefour (Shanghai) Supply Chain Management Co., expected unrecoverable
875.90 875.90 100.00
Ltd. Tianjin Branch
Jiaozuo Yida Plant Oil Co., Ltd. 243,283.89 243,283.89 100.00 expected unrecoverable
Total 420,575.29 420,575.29 — —
b.) Bad debts accrued, recovered or reversed in the current period
Provision for bad debts in the current period - 33,415.47 yuan。
c.) Accounts receivable actually written off in the current period
Item(s) Write-off Amount
Accounts Receivable actually Written Off 2,690.00
d.) Accounts Receivable of the Top 5 Balances Collected by Debtors at the End of the Period
The total amount of the top 5 accounts receivable collected by debtors in the current period is 66,879,860.65 yuan,
accounting for 67.80% of the total balance of accounts receivable at the end of the period, and the corresponding sum of bad
debts at the end of the period is 309,552.10 yuan.
Ratio of the total ending
total ending balance of balance of accounts Ending Balance of
Debtors receivable
accounts receivable Bad Debt Provision
(%)
Beijing YanGu grain and oil sales company 42,673,218.40 43.26
Beijing Wumei Supermarket Co., Ltd. 10,584,568.96 10.73 46,913.98
Missme Catering Management (Tianjin) Co., Ltd. 6,145,386.37 6.23 262,638.12
Shanghai Laiyifen Co., Ltd. 4,040,917.20 4.10
Beijing KFC Co., Ltd. 3,435,769.72 3.48
Total 66,879,860.65 67.80 309,552.10
4. Advanced Payment
(1) Advances are presented by age
Ending Balance Beginning Balance
Aging
Amount Ratio(%) Amount Ratio(%)
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
Within 1 Years 119,883,849.19 99.75 912,778,989.71 99.99
1 to 2 years 297,593.70 0.25 64,499.99 0.01
2 to 3 years
More than 3 years
Total 120,181,442.89 100.00 912,843,489.70 100.00
Note: The Company has no significant advance payments for more than one year in this year.
(2) Advance payment of the top five Ending Balances by prepaid objects
The summary of the top five prepayments of the company's final balances based on prepaid objects is 96,327,652.64 yuan,
accounting for 80.15% of the total balance of prepayments at the end of the period.
Ratio of the total ending balance of
Company Name Ending Balance
prepayments (%)
China Grain Reserve Rizhao Storage Co., Ltd. 37,497,973.88 31.20
China Grain Reserve Songyuan Depot Co., Ltd. 35,871,982.62 29.85
China Grain Reserve Zhenlai Depot Co., Ltd. 14,391,240.00 11.97
Sinograin Oils Corporation 5,134,856.14 4.27
ILTA Grain Inc 3,431,600.00 2.86
Total 96,327,652.64 80.15
(3) Status of prepaid accounts reversal in the current period
Item(s) Reversal Amount
Xia MiaoJie 80,000.00
5. Other Receivables
Item(s) Ending Balance Beginning Balance
Other Receivables 15,855,636.42 73,064,548.76
Interest Receivable 2,400,877.51 2,657,591.11
Dividend Receivable
Total 18,256,513.93 75,722,139.87
（1）Other Receivables
a.) Classified Disclosure of Other Receivables
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
Ending Balance
Book Balance Bad Debt Provision
Type(s)
Provision Book Value
Amount Ratio(%) Amount
Ratio(%)
Other Receivables with significant individual
amounts and separate provision for bad debts
Other Accounts Receivable for Bad Debt Provision
Based on Credit Risk Characteristic Portfolio
Portfolio 1 - Age-based Other Receivables 16,152,562.64 296,926.22 15,855,636.42
Portfolio 2 - Related Party Other Receivables
Portfolio Total 16,152,562.64 99.88 296,926.22 1.84 15,855,636.42
Other Receivables with minor amounts but separate
20,000.00 0.12 20,000.00 100.00
provision for bad debts
Total 16,172,562.64 100.00 316,926.22 — 15,855,636.42
(Continue)
Balance at Beginning of Year
Categories Book Balance Bad Debt Reserves
Book Value
Accrued
Amount Percentage (%) Amount Proportion (%)
Other receivables with significant single
amount and bad debt reserves counted and
drawn individually
Other receivables with bad debt reserves
counted and drawn according to credit risk
feature portfolio
Portfolio No.1-Other receivables analyzed
75,440,422.35 3,271,112.88 72,169,309.47
according to aging
Portfolio No.2-Other receivables of related
200.00 200.00
parties
Portfolio in total 75,440,622.35 98.80 3,271,112.88 4.34 72,169,509.47
Other receivables with single amount not
being significant but bad debt reserves 919,039.29 1.20 24,000.00 2.61 895,039.29
counted and drawn individually
In total 76,359,661.64 100.00 3,295,112.88 — 73,064,548.76
A Other receivables with bad debt reserves counted and drawn according to aging analysis method
Balance at End of Period
Aging
Other Receivables Bad Debt Reserves Accrued Proportion (%)
Within one year
Among them: within credit period 9,060,501.22 0
Credit period-1 year (including 1 year) 4,385,505.15 87,710.10 2
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
Balance at End of Period
Aging
Other Receivables Bad Debt Reserves Accrued Proportion (%)
1 to 2 years 2,480,634.27 124,031.72 5
2 to 3 years 175,922.00 35,184.40 20
3 to 4 years 50
4 to 5 years 80
Over 5 years 50,000.00 50,000.00 100
In total 16,152,562.64 296,926.22 —
(Continue)
Balance at Beginning of Year
Aging
Other Receivables Bad Debt Reserves Accrued Proportion (%)
Within 1 year
Among them: within credit period 7,649,440.63 0
Credit period-1 year(including 1 year) 5,371,206.90 107,424.14 2
1 to 2 years 62,361,774.82 3,118,088.74 5
2 to 3 years 3,000.00 600.00 20
3 to 4 years 50
4 to 5 years 50,000.00 40,000.00 80
Over 5 years 5,000.00 5,000.00 100
In total 75,440,422.35 3,271,112.88 —
B Other receivables with single amount not being significant but bad debt reserves counted and drawn individually
Balance at End of Period
Other Receivables (By Unit) Accrued
Other Receivables Bad Debt Reserves Reason of Accrual
Proportion
Beijing Wumart Business Group Co., Ltd. 20,000.00 20,000.00 100.00 Estimated to be Uncollectible
In total 20,000.00 20,000.00 — —
②Bad debt reserves counted and drawn, collected or recovered in the current period
Bad debt reserve accounts drawn in the current period: -2,978,186.66 Yuan
③ Classification of other receivables by nature of funds
Book Balance at Beginning of
Nature of Funds Book Balance at End of Period
Year
Intercourse Funds of Related Parties 200.00
Petty Cash (Employee and Department) 233,548.14 214,904.46
Guaranteed Deposit and Deposit 2,011,122.17 1,777,074.61
Intercourse Funds of Units 12,213,774.63 72,031,790.95
Personal Intercourse Funds 53,306.67
Employee Receivables 418,634.62 380,963.06
Tax Refund Receivables 1,169,522.00 1,901,402.00
Other Receivables 125,961.08 19.89
In total 16,172,562.64 76,359,661.64
④ Other receivables according to top five of balance at end of period collected by debtors
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
Proportion in overall Ending balance
Balance at End of
Name of Organization Nature of Funds Aging ending balance of of bad debt
Period
other receivables (%) reserves
Intercourse Funds
Missme Food and Beverage (Tianjin) Co., Ltd. 5,079,631.73 Within 1 year 31.41 159,969.72
of Units
Intercourse Funds
Beijing Yangu Grain and Oil Trading Co., Ltd. 4,759,731.67 Within 3 months 29.43
of Units
State Taxation Administration of Linan District, Tax Refund
993,600.00 Within 3 months 6.14
Hangzhou, Zhejiang Province Receivables
Guaranteed
Office of Finance of Zhennan Street of Linan
Deposit and 420,401.00 1 to 2 years 2.60
District, Hangzhou
Deposit
Intercourse Funds
Tianjin Lingang Port Group Co., Ltd. 358,128.01 Within 3 months 2.21
of Units
In toral — 11,611,492.41 — 71.79 159,969.72
(2) Interest Receivable
①Classification of Interest Receivable
Items Balance at End of Period Balance at Beginning of Year
Fixed Deposit Interest 2,400,877.51 2,657,591.11
In total 2,400,877.51 2,657,591.11
6. Inventory
(1) Inventory Category
Balance at End of Period
Items
Book Balance Falling Price Reserves Book Value
Raw Materials 201,025,950.79 67,131.25 200,958,819.54
Revolving Materials 3,454,520.07 3,454,520.07
Finished Goods 711,226,691.70 5,292,085.61 705,934,606.09
Develop Products 16,497,730.12 11,673,694.67 4,824,035.45
Materials in Transit 53,773,706.64 53,773,706.64
Reserve Oil 248,197,500.00 248,197,500.00
Development Cost 7,043,775.28 7,043,775.28
In total 1,241,219,874.60 17,032,911.53 1,224,186,963.07
(Continue)
Balance at Beginning of Year
Items
Book Balance Falling Price Reserves Book Value
Raw Materials 368,354,117.16 173,907.66 368,180,209.50
Revolving Materials 3,027,491.97 3,027,491.97
Finished Goods 632,073,799.20 3,065,580.89 629,008,218.31
Develop Products 16,497,730.12 11,673,694.67 4,824,035.45
Materials in Transit 140,113,625.93 140,113,625.93
Manufacturing Consignment 615,202.96 7,520.05 607,682.91
Reserve Oil 248,197,500.00 248,197,500.00
In total 1,408,879,467.34 14,920,703.27 1,393,958,764.07
(2) Inventory Falling Price Reserves
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
Increased Amounts in the Decreased Amounts in the
Balance at Current Period Current Period
Items Beginning of Balance at End of Period
Year Recover or
Accrual Others Others
Charge Off
Raw Materials 173,907.66 67,131.25 173,907.66 67,131.25
Finished Goods 3,065,580.89 4,403,217.09 2,176,712.37 5,292,085.61
Manufacturing Consignment 7,520.05 7,520.05
Develop Products 11,673,694.67 11,673,694.67
In total 14,920,703.27 4,470,348.34 2,358,140.08 17,032,911.53
(3) Accrual Basis of Inventory Falling Price Reserves and Reason of Recovering or Charging Off in the Current Period
Reason of Recovering Inventory
Specific Accrual Basis of Inventory Reason of Charging off Inventory Falling
Items Falling Price Reserves in the
Falling Price Reserves Price Reserves in the Current Period
Current Period
Market Quotes on the Website of
Raw Materials Sales Completed
Cofeed
Market Quotes on the Website of
Finished Goods Sales Completed
Cofeed
Market Quotes on the Website of
consigned processing Sales Completed
Cofeed
(4) Additional Notes of Inventory
Book value of inventory used for mortgage at end of period is 4,824,035.45 Yuan, seeing Six 52.
7. Non-current Assets Due within one year
Items Balance at End of Period Balance at Beginning of Year
Financial Products Due within One Year 51,000,000.00
In total 51,000,000.00
8. Other Current Assets
Items Balance at End of Period Balance at Beginning of Year
Financial Products 223,300,000.00 106,000,000.00
Pre-paid Taxes and Fees 6,207,985.16 455,289.48
Pending Deduct VAT Input Tax 59,155,031.47 59,411,949.22
Fair Value Changes of Items Trapped at Hedging
158,800.00
In total 288,821,816.63 165,867,238.70
9. Available-for-sale Financial Assets
(1) Available-for-sale Assets Situation
Balance at End of Period Balance at Beginning of Year
Items Impairment Impairment
Book Balance Book Value Book Balance Book Value
Reserves Reserves
Available-for-sale Equity
30,500,000.00 10,500,000.00 20,000,000.00 30,500,000.00 10,500,000.00 20,000,000.00
Instruments
Among them: calculated at
30,500,000.00 10,500,000.00 20,000,000.00 30,500,000.00 10,500,000.00 20,000,000.00
cost
In total 30,500,000.00 10,500,000.00 20,000,000.00 30,500,000.00 10,500,000.00 20,000,000.00
(2) Available-for-sale Financial Assets Calculated at Cost at End of Period
Book Balance
Invested Unit
At Beginning of Increase in the Decrease in the
At End of Period
Year Current Period Current Period
Federation of Trade Unions of Hainan Province 500,000.00 500,000.00
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
Book Balance
Invested Unit
At Beginning of Increase in the Decrease in the
At End of Period
Year Current Period Current Period
ChinaNet Science and Technology Investment Co.,
10,000,000.00 10,000,000.00
Ltd.
HTTS Construction Management Co., Ltd. Beijing
(Note ① )
Chongqing Longkin Network Technology Co., Ltd. 20,000,000.00 20,000,000.00
In total 30,500,000.00 30,500,000.00
(Continue)
Impairment Reserves Cash
Shareholdin
Increase in Dividen
Decrease in g Ratio in
Invested Unit At Beginning of the d in the
the Current At End of Period Invested
Year Current Current
Period Unit (%)
Period Period
Federation of Trade Unions of
500,000.00 500,000.00 6.67
Hainan Province
ChinaNet Science and Technology
10,000,000.00 10,000,000.00 10.00
Investment Co., Ltd.
HTTS Construction Management
20.00
Co., Ltd. Beijing
Chongqing Longkin Network
10.96
Technology Co., Ltd.
In total 10,500,000.00 10,500,000.00 —
Note: ① Up to this financial reporting day, HTTS Construction Management Co., Ltd. Beijing hasn’t run business.
10. Long-term Equity Investment
Increase or Decrease in the Current Period
Balance at
Confirmed Profit
Invested Unit Beginning of Adjustment on Other
Additional Negative and Loss on Other Changes in
Year Comprehensive
Investment Investment Investment under Equity
Income
Equity Law
One Cooperative Enterprise
CP Group 58,936,076.18 6,824,826.10 -421,278.00
Sub-total 58,936,076.18 6,824,826.10 -421,278.00
Two Joint Venture
China Grain Reserves (Tianjin)
Warehouse Logistics Co., Ltd.
115,653,625.56 1,505,296.36 328,679.91
Sub-total 115,653,625.56 1,505,296.36 328,679.91
In total 174,589,701.74 8,330,122.46 -421,278.00 328,679.91
(Continue)
Increase or Decrease in the Current Period
Balance at End of Ending Balance of
Invested Unit Announce to Distribute Accrual of
Period Impairment Reserves
Case Dividends or Impairment Others
Profits Reserves
One Cooperative Enterprise
CP Group 65,339,624.28
Sub-total 65,339,624.28
Two Joint Venture
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
Increase or Decrease in the Current Period
Balance at End of Ending Balance of
Invested Unit Announce to Distribute Accrual of
Period Impairment Reserves
Case Dividends or Impairment Others
Profits Reserves
China Grain Reserves (Tianjin)
117,487,601.83
Warehouse Logistics Co., Ltd.
Sub-total 117,487,601.83
In total 182,827,226.11
11. Investment Real Estate
(1) Investment Real Estate Adopting Cost Measurement Model
Projects under
Items Buildings Land Use Right In total
Construction
One Original Book Value
1. Balance at Beginning of Year 42,634,619.63 42,634,619.63
2. Increased Amounts in the Current Period
3. Decreased Amounts in the Current
Period
4. Balance at End of Period 42,634,619.63 42,634,619.63
Two Accumulated Impairment and
Accumulated Amortization
1. Balance at Beginning of Year 7,171,923.29 7,171,923.29
2. Increased Amounts in the Current Period 1,613,750.94 1,613,750.94
(1) Accrual or Amortization 1,613,750.94 1,613,750.94
3. Decreased Amounts in the Current Period
4. Balance at End of Period 8,785,674.23 8,785,674.23
Three Impairment Reserves
1. Balance at Beginning of Year 453,843.72 453,843.72
2. Increased Amounts in the Current Period
3. Decreased Amounts in the Current Period
4. Balance at End of Period 453,843.72 453,843.72
Four Book Value
1. Book Value at End of Period 33,395,101.68 33,395,101.68
2. Book Value at Beginning of Year 35,008,852.62 35,008,852.62
(2) Amount of Investment Real Estate without Certificate of Title and Corresponding Reasons
Items Book Value Reasons of Not Transacting Certificate of Title
Buildings 299,056.53 Property ownership certificate for outbuildings fails to be obtained.
(3) Instructions of Investment Real Estate
Book value of investment real estate used for mortgage at end of period is 5,778,794.3 Yuan, seeing Six 52.
12. Fixed Assets
Items Balance at End of Period Balance at Beginning of Year
Fixed Assets 1,271,803,080.56 1,333,410,146.38
Disposal of Fixed Assets
In total 1,271,803,080.56 1,333,410,146.38
(1) Fixed Assets
①Fixed Assets Situation
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
Machinery Transportation Electronic Office
Items Buildings Others In total
Equipment Equipment Equipment Equipment
One Original Book Value
1. Balance at Beginning of
1,071,025,127.22 342,486,447.66 23,979,379.20 12,290,410.35 1,999,003.92 362,817,865.15 1,814,598,233.50
Year
2. Increased Amounts in
10,262,771.03 19,676,326.66 1,048,873.50 1,618,684.33 223,661.52 5,044,426.38 37,874,743.42
the Current Period
(1) Purchase 9,272,221.22 12,676,315.05 1,048,873.50 1,618,684.33 223,661.52 4,526,852.86 29,366,608.48
(2) Roll-in of Project under 990,549.81 7,000,011.61 517,573.52 8,508,134.94
Construction
(3) Other Roll-ins
3. Decreased Amounts in 3,898,021.16 10,559,506.71 2,776,967.64 243,205.12 18,803.42 53,526.36 17,550,030.41
the Current Period
(1) Disposal or Scrap 865,331.60 9,881,664.25 2,776,967.64 243,205.12 18,803.42 53,526.36 13,839,498.39
(2) Other Roll-outs 3,032,689.56 677,842.46 3,710,532.02
4. Balance at End of Period 1,077,389,877.09 351,603,267.61 22,251,285.06 13,665,889.56 2,203,862.02 367,808,765.17 1,834,922,946.51
Three Accumulated
Impairment
1. Balance at Beginning of 224,812,333.11 107,634,684.03 16,779,833.88 7,674,067.81 976,268.21 114,459,916.24 472,337,103.28
Year
2. Increased Amounts in 38,439,038.72 27,193,461.06 1,342,177.03 2,084,051.36 346,365.87 24,021,449.97 93,426,544.01
the Current Period
(1) Accrual 38,439,038.72 27,193,461.06 1,342,177.03 2,084,051.36 346,365.87 24,021,449.97 93,426,544.01
3. Decreased Amounts in 1,282,827.79 6,960,995.01 2,317,600.34 197,470.64 53,663.08 114,647.00 10,927,203.86
the Current Period
(1) Disposal or Scrap 519,972.04 6,935,339.45 2,317,600.34 197,470.64 53,663.08 114,647.00 10,138,692.55
(2) Other Roll-outs 762,855.75 25,655.56 788,511.31
4. Balance at End of Period 261,968,544.04 127,867,150.08 15,804,410.57 9,560,648.53 1,268,971.00 138,366,719.21 554,836,443.43
Three Impairment Reserves
1. Balance at Beginning of 7,590,384.72 1,260,599.12 8,850,983.84
Year
2. Increased Amounts in
the Current Period
3. Decreased Amounts in 91,088.80 476,472.52 567,561.32
the Current Period
4. Balance at End of Period 7,499,295.92 784,126.60 8,283,422.52
Four Book Value
1. Book Value at End of 807,922,037.13 222,951,990.93 6,446,874.49 4,105,241.03 934,891.02 229,442,045.96 1,271,803,080.56
Period
2. Book Value at Beginning 838,622,409.39 233,591,164.51 7,199,545.32 4,616,342.54 1,022,735.71 248,357,948.91 1,333,410,146.38
of Year
②Temporarily Idle Fixed Assets Situation
Original Book Accumulated
Items Impairment Reserves Book Value Notes
Value Impairment
Buildings 47,708.00 36,401.08 8,921.52 2,385.40
Machinery Equipment 2,124,189.04 1,242,774.50 775,205.08 106,209.46
In total 2,171,897.04 1,279,175.58 784,126.60 108,594.86
③Situation of Fixed Assets without Transacting Certificate of Title
Items Book Value Reasons of Not Transacting Certificate of Title
Buildings 11,491,413.86 In Process Now
Buildings 1,585,685.65 Certificate of title for outbuildings hasn’t been transacted.
In total 13,077,099.51 —
④ Other Instructions of Fixed Assets
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
(1) Book value of fixed assets used for mortgage at end of period is 3,983,893.20 Yuan, seeing Six 52.
(2) Original value of fixed assets that are fully depreciated but continue to use is 22,061,546.94 Yuan.
13. Project under Construction
(1) Situation of Project under Construction
Balance at End of Period Balance at Beginning of Year
Items
Impairment Impairment
Book Balance Book Value Book Balance Book Value
Reserves Reserves
Equipment Installation
36,034,188.98 36,034,188.98 12,436,003.53 12,436,003.53
Engineering Type
Technical Transformation
1,335,568.80 1,335,568.80 301,669.48 301,669.48
Type
In total 37,369,757.78 37,369,757.78 12,737,673.01 12,737,673.01
(2) Change Condition of Important Engineering Projects under Construction in the Current Period
Roll-in Fixed Assets Other Decreased
Balance at Beginning Increased Amounts Balance at End of
Project Name Amount in the Amounts in the
of Year in the Current Period Period
Current Period Current Period
Tianjin Grain and Oil Project 1,484,243.56 8,441,884.48 517,573.52 9,408,554.52
Plant No.2 Walnut Cake Production
4,300,657.45 3,539,697.07 168,000.00 7,672,354.52
Line
Molding Equipment 980,000.00 980,000.00
Oven 2,350,000.00 2,350,000.00
Cuisine Pipeline 881,000.00 881,000.00
Plant No.2 Baked Sweet Potato
1,102,715.52 95,255.88 431,235.62 766,735.78
Production Line
Leisure Plant No.2 Non-fried Potato
9,760,300.00 9,760,300.00
Chips Production Line
Squeezed and Baked Corn Flakes
2,691,598.53 2,691,598.53
Production Line
4D Overlaid Corn Flakes Production
1,830,000.00 1,830,000.00
Line
Small Fried Potato Chips Production
1,798,382.97 1,798,382.97
Line
One More Steamed Dried Cake
1,227,344.82 1,227,344.82
Production Line
In total 11,098,616.53 29,384,463.75 5,327,809.14 35,155,271.14
14. Intangible Assets
(1) Intangible Assets Situation
Items Software Land Use Right Trademark Right Others In total
One Original Book Value
1. Balance at Beginning of Year 3,409,534.38 318,161,901.57 154,841,200.00 662,400.00 477,075,035.95
2. Increased Amounts in the
205,283.02 22,177,167.52 22,382,450.54
Current Period
(1) Purchase 205,283.02 2,348,687.22 2,553,970.24
(3) Others 19,828,480.30 19,828,480.30
3. Decreased Amounts in the
23,271,853.11 23,271,853.11
Current Period
(1) Disposal 2,722,786.97 2,722,786.97
(2) Others 20,549,066.14 20,549,066.14
4. Balance at End of Period 3,614,817.40 317,067,215.98 154,841,200.00 662,400.00 476,185,633.38
Two Accumulated Amortization
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
Items Software Land Use Right Trademark Right Others In total
1. Balance at Beginning of Year 2,345,889.44 42,329,120.31 32,893,594.13 77,568,603.88
2. Increased Amounts in the
533,126.11 10,431,643.88 7,713,925.84 18,678,695.83
Current Period
(1) Accrual 533,126.11 10,431,643.88 7,713,925.84 18,678,695.83
(2) Others
3. Decreased Amounts in the
4,106,594.01 4,106,594.01
Current Period
(1) Disposal 494,749.71 494,749.71
(2) Others 3,611,844.30 3,611,844.30
4. Balance at End of Period 2,879,015.55 48,654,170.18 40,607,519.97 92,140,705.70
Three Impairment Reserves
1. Balance at Beginning of Year 662,400.00 662,400.00
2. Increased Amounts in the
Current Period
3. Decreased Amounts in the
Current Period
4. Balance at End of Period 662,400.00 662,400.00
Four Book Value
1. Book Value at End of Period 735,801.85 268,413,045.80 114,233,680.03 383,382,527.68
2. Book Value at Beginning of Year 1,063,644.94 275,832,781.26 121,947,605.87 398,844,032.07
(2) Use Right Situation of Land without Transacting Certificate of Title
Items Book Value Reason of Not Transacting Certificate of Title
Land Use Right 4,073,145.20 Certificate of title has been obtained in January 2019.
Land Use Right 17,105,693.33 Certificate of title has been obtained in January 2019.
15. Goodwill
(1) Original Book Value of Goodwill
Increase in the Current Period Decrease in the Current Period
Name of Invested Unit or Items Balance at Balance at End of
Forming Goodwill Beginning of Year Formed by Period
Others Disposal Others
Enterprise Merger
Acquire stock shares of Zhejiang
191,394,422.51 191,394,422.51
Xiaowangzi Food Co., Ltd.
In total 191,394,422.51 191,394,422.51
Notes: 1) Goodwill of the Company is mainly formed by acquiring stock shares of Zhejiang Xiaowangzi Food Co., Ltd..
2) Impairment testing procedure, parameters and impairment loss confirmation method of goodwill
The Company confirms all assets of Zhejiang Xiaowangzi Food Co., Ltd. as an asset group of which its recoverable amount is based
on cash-flow forecast in the near five years and calculated according to present value of expected cash-flow of asset group in the
future. In the process of impairment test, core data such as expected product price, sales volume cost and other related expenses used
by cash-flow forecast is confirmed by corporate historical experience and market development forecast. Discount rate used in
cash-flow forecast is confirmed with reference to time value of currency in current market and related specific risks of asset group.
The recoverable amount test of above goodwill made by the Company shows that the situation of impairment loss hasn’t occurred in
goodwill.
16. Long-term Unamortized Expenses
Balance at Increased
Amortized Amounts in Other Decreased Balance at End of
Items Beginning of Amounts in the
the Current Period Amounts Period
Year Current Period
Company’s Majuqiao Plant Transformation
16,858,945.99 676,613.16 16,182,332.83
Expense
House Renovation Expense 238,787.59 59,039.64 179,747.95
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
Balance at Increased
Amortized Amounts in Other Decreased Balance at End of
Items Beginning of Amounts in the
the Current Period Amounts Period
Year Current Period
Woodland Rental Expense 5,309,496.00 112,968.00 5,196,528.00
Suzhou Gongfujia Animation Production
8,737,864.10 3,883,495.16 2,559,576.36 10,061,782.90
Expense
BHG Mall Store Decoration Expense 395,961.97 84,848.99 311,112.98
Macao Center Store Decoration Expense 435,232.36 33,361.00 98,268.26 370,325.10
Heping Joy-City Decoration Expense 1,234,029.63 250,230.39 311,827.96 1,172,432.06
Longde Plaza Store Fire Engineering Funds 37,277.64 34,498.00 14,355.13 57,420.51
Longde Store No.2 Decoration Expense 868,962.56 169,380.19 699,582.37
Taikoo Li Store Decoration Expense 323,669.90 64,733.98 258,935.92
Information Disclosure Expense 188,679.24 7,861.64 180,817.60
In total 33,247,595.28 5,582,896.25 4,159,473.31 34,671,018.22
17. Deferred Income Tax Assets/Deferred Income Tax Liabilities
(1) Details of Deferred Income Tax Assets Not Being Offset
Balance at End of Period Balance at Beginning of Year
Items Deductible Temporary Deductible Temporary
Deferred Income Tax Assets Deferred Income Tax Assets
Difference Difference
Asset Impairment Reserves 5,975,793.94 1,493,058.58 5,601,872.74 1,400,468.18
Deductible Loss 2,378,893.29 594,723.33 4,693,778.62 1,173,444.66
Valuation of Financial
Instruments and Derivative 11,652,792.92 2,913,198.23 18,363,036.93 4,590,759.23
Financial Instruments
Deferred Income 1,350,000.00 337,500.00 1,800,000.00 450,000.00
Employee Pay Payable 39,970,000.00 9,992,500.00 26,257,600.00 6,564,400.00
Anticipated Loss
In total 61,327,480.15 15,330,980.14 56,716,288.29 14,179,072.07
(2) Details of Deferred Income Tax Liabilities Not Being Offset
Balance at End of Period Balance at Beginning of Year
Items
Deferred Income Tax Taxable Temporary Deferred Income Tax
Taxable Temporary Difference
Liabilities Difference Liabilities
Valuation of Financial
Instruments and Derivative
407,589.76 101,897.44 16,734,404.50 4,183,601.13
Financial Instruments
Difference between fair value of
identifiable net asset by
acquiree confirmed by
198,067,768.12 49,516,942.03 208,008,300.08 52,002,075.02
enterprise merger and its book
value of net asset
In total 198,475,357.88 49,618,839.47 224,742,704.58 56,185,676.15
(3) Details of Deferred Income Tax Assets Not Being Confirmed
Items Balance at End of Period Balance at Beginning of Year
Deductible Loss 35,403,914.26 14,294,910.78
Deductible temporary differences -2,714,794.81 33,984,154.44
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
Items Balance at End of Period Balance at Beginning of Year
In total 32,689,119.45 48,279,065.22
(4) Deductible loss on deferred income tax assets not being confirmed will be due at the following years
Year Balance at End of Period Balance at Beginning of Year Notes
2018
2019
2020 6,473,030.05 5,769,102.97
2021 4,504,020.42 4,504,020.42
2022 4,021,787.39 4,021,787.39
2023 20,405,076.40
合计 35,403,914.26 14,294,910.78
18. Other Non-current Assets
Items Balance at End of Period Balance at Beginning of Year
Equipment and Project Funds 1,622,003.59 3,277,634.07
In total 1,622,003.59 3,277,634.07
19. Short-term Borrowings
(1) Classification of Short-term Borrowings
Items Balance at End of Period Balance at Beginning of Year
Guaranteed Loan 370,000,000.00 795,671,362.73
Fiduciary Loan 1,067,715,080.91 1,211,500,000.00
In total 1,437,715,080.91 2,007,171,362.73
20. Notes and Accounts Payable
Type Balance at End of Period Balance at Beginning of Year
Notes Payable 83,154,229.20
Accounts Payable 140,564,713.11 317,538,928.27
In total 140,564,713.11 400,693,157.47
(1) Notes Payable
Type Balance at End of Period Balance at Beginning of Year
Bankers’ Acceptance Bill 83,154,229.20
In total 83,154,229.20
(2) Accounts Payable
Accounts Payable Listed by Nature of Funds
Items Balance at End of Period Balance at Beginning of Year
Material Funds Payable 121,681,815.91 300,676,736.60
Project Funds Payable 289,019.48 941,089.67
Equipment Funds Payable 15,527,703.10 6,461,633.94
Loan Deposit 583,301.20 4,242,759.55
Others 2,482,873.42 5,216,708.51
In total 140,564,713.11 317,538,928.27
Note: There are no important payables with over one year of aging in the Company this current year.
21. Accounts Collected in Advance
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
(1) List of Accounts Collected in Advance
Items Balance at End of Period Balance at Beginning of Year
Sales Revenue Collected in Advance 143,857,900.77 211,148,248.97
Collect rent in advance 769,003.41 975,898.41
Collect the equipment payment in advance 690,160.00
In total 145,317,064.18 212,124,147.38
Note: There are no important accounts collected in advance with over one year of aging in the Company this current year.
22. Wages Payable
(1) List of Wages Payable
Balance at Beginning of Increase in the Current Decrease in the Current Balance at End of
Items
Year Period Period Period
One Short-term Compensation 28,869,807.85 266,883,310.17 265,815,058.87 29,938,059.15
Two After-service Welfare-Stated Drawings
1,645,436.22 27,857,038.48 28,100,077.26 1,402,397.44
Plan
Three Dismission Welfare 246,787.46 2,867,140.01 2,959,816.01 154,111.46
In total 30,762,031.53 297,607,488.66 296,874,952.14 31,494,568.05
(2) List of Short-term Compensation
Balance at Beginning of Increase in the Current Decrease in the Current Balance at End of
Items
Year Period Period Period
1. Wage, Bonus, Allowance and Subsidy 23,623,803.03 220,412,503.59 218,369,287.64 25,667,018.98
2. Welfare Expense of Employee 8,533,525.88 8,283,037.78 250,488.10
3. Social Insurance Expense 1,173,235.12 15,498,489.85 15,761,705.14 910,019.83
Among them: Medical Insurance Premiums 487,861.28 11,893,875.45 12,041,294.72 340,442.01
Industrial Injury Insurance Premiums 243,854.07 1,738,117.90 1,850,704.95 131,267.02
Birth Insurance Premiums 48,976.63 1,040,601.95 1,043,810.92 45,767.66
Others 392,543.14 825,894.55 825,894.55 392,543.14
4. Housing Provident Funds 360,036.42 9,516,068.50 9,686,463.92 189,641.00
5. Labor Union Expense and Personnel
3,706,067.66 4,481,506.36 5,273,348.40 2,914,225.62
Education Fund
6. Short-term Compensated Absences 6,665.62 8,441,215.99 8,441,215.99 6,665.62
In total 28,869,807.85 266,883,310.17 265,815,058.87 29,938,059.15
(3) List of Stated Drawings Plan
Balance at Beginning of Increase in the Current Decrease in the Current Balance at End of
Items
Year Period Period Period
1. Basic Pension Insurance 1,537,935.17 25,867,530.70 26,074,331.29 1,331,134.58
2. Unemployment Insurance Expense 55,433.85 876,428.79 880,483.42 51,379.22
3. Enterprise Annuity Charges 52,067.20 1,112,473.99 1,144,657.55 19,883.64
Others 1,645,436.22 27,857,038.48 28,100,077.26 1,402,397.44
Notes: The Company joins pension insurance and unemployment insurance programs set by government agencies in accordance with
regulations. According to these programs, the Company deposits expenses of pension insurance program per month based on 14%,
20%, 19% and 18% of basic employee wage while depositing expenses of pension insurance program per month based on 0.5%,
0.7%, 1% and 0.8% of basic employee wage. Except from above expenses deposited monthly, the Company won’t undertake further
payment obligation. Corresponding expenses are charged to costs of profit and loss in the current period or related assets when
occurring.
23. Taxes and Fees Payable
Items Balance at End of Period Balance at Beginning of Year
VAT 5,633,418.89 5,589,806.18
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
Items Balance at End of Period Balance at Beginning of Year
Urban Maintenance and Construction Tax 495,841.40 487,700.32
Corporate Income Tax 26,772,270.05 26,488,177.73
House Property Tax 1,447,610.40 1,509,296.48
Land Use Tax 276,169.59 73,972.59
Individual Income Tax 482,771.95 1,440,170.29
Educational Surtax 174,446.12 194,075.05
Local Educational Surtax 168,441.14 160,997.53
Stamp Tax 317,916.69 727,764.60
Resources Tax 11,532.00
Others 3,401.61 183,178.41
In total 35,783,819.84 36,855,139.18
24. Other Accounts Payable
Items Balance at End of Period Balance at Beginning of Year
Other Accounts Payable 73,118,565.08 451,938,294.35
Interest Payable 26,972,826.90 86,064,211.31
Dividends Payable 11,197,317.01 3,397,317.01
In total 111,288,708.99 541,399,822.67
(1) Other Accounts Payable
List of Other Accounts Payable by Nature of Funds
Items Balance at End of Period Balance at Beginning of Year
Loan and Interest 30,376,545.69 47,777,345.69
Intercourse Funds of Related Parties 817,333.26 189,160,957.19
Intercourse Funds between Units 20,356,775.13 98,020,263.84
Personal Intercourse Funds 776,050.31 131,535.46
Various Insurances of Employee 797,312.51 547,454.06
Employee Loan Payable 91,986.85 495,579.02
Guaranteed Deposit and Deposit 15,199,146.39 104,307,068.72
Warehouse and Storage Charges 2,568,894.01
Others 2,134,520.93 11,498,090.37
In total 73,118,565.08 451,938,294.35
(2) Interest Payable
Items Balance at End of Period Balance at Beginning of Year
Loan Interest between Enterprises 21,082,795.47 71,842,734.54
Entrust Loans Interest 10,449,888.49
Bank Loan Interest 5,890,031.43 3,771,588.28
In total 26,972,826.90 86,064,211.31
(3) Dividends Payable
Items Balance at End of Period Balance at Beginning of Year
Dividend Payable for Corporate Shares 3,397,317.01 3,397,317.01
Dividends Payable for Minority Shareholders 7,800,000.00
In total 11,197,317.01 3,397,317.01
25. Other Current Liabilities
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
Items Balance at End of Period Balance at Beginning of Year
Fair Value Changes of Items Trapped at Hedging 11,100,915.25 90,215,292.43
In total 11,100,915.25 90,215,292.43
26. Long-term Accounts Payable
Items Balance at End of Period Balance at Beginning of Year
Network Service Expense Payable 801,625.20
In total 801,625.20
27. Long-term Wage Payable
(1) List of Long-term Wage Payable
Items Balance at End of Period Balance at Beginning of Year
One After-service Welfare-Stated Drawings Plan Net Liabilities
Two Dismission Welfare 275,406.52 533,609.91
Three Other Long-term Welfare 39,970,000.00 26,257,600.00
In total 40,245,406.52 26,791,209.91
28. Deferred Income
Balance at Increase in the Decrease in the Balance at End of
Items Cause of Formation
Beginning of Year Current Period Current Period Period
Government Subsidy 78,961,972.67 4,008,587.16 74,953,385.51
In total 78,961,972.67 4,008,587.16 74,953,385.51 —
Among them， items involving government subsidy
Increase Decrease in the Current Period
Type Balance at in the Charge to Offset Balance at End of
Items Receiving Subsidy Charge to other Other
Beginning of Year Current Non-operating Cost Period
Period Profits Decreases
Income Expense
Relocation Financial Al
5,386,693.42 384,763.82 5,001,929.60
Compensation location
Special Subsidy for
Financial
Technical Renovation of 1,800,000.00 450,000.00 1,350,000.00
Allocation
Production Line
Special Subsidy for Financial
13,022,562.99 908,691.98 12,113,871.01
Infrastructure Input Allocation
Enterprise Supporting
Infrastructure at
Construction Stage of
Financial
“Tianjin Harbor 53,761,636.09 1,277,504.16 52,484,131.93
Allocation
Industrial Park
Administrative
Committee”
Tianjin Binhai New
District’s Industrially
Technical Renovation Financial
and Park Construction 2,759,259.17 222,222.24 2,537,036.93
Allocation
Funds as well as
Expenditures for Science
and Technology
Fixed Assets Specially
Formed by Science and Financial
1,011,904.76 77,838.84 934,065.92
Technology Commission Allocation
of Guchuan Edible Oil
Appropriation for Oil
Financial
Tank’s Electric Heating 232,780.16 58,195.08 174,585.08
Allocation
System
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
Cooking Oil Green and
Cleaning Production
Equipment, Technical Financial
417,136.08 59,371.04 357,765.04
Study as well as Science Allocation
and Technology
Demonstration
Maintenance Funds for
Financial
Dangerous and Old 570,000.00 570,000.00
Allocation
Warehouse
In total 78,961,972.67 570,000.00 3,438,587.16 74,953,385.51
29. Share Capital
Changes in the Current Period
Balance at Share Balance at End of
Items
Beginning of Year New Share Share Transfer of
Others Sub-total Period
Issue Donation Provident
Fund
1. Shares with Restricted
Conditions
(1) State Shareholding
(2) State-owned Legal-person
236,216,509.00 -22,828,451.00 -22,828,451.00 213,388,058.00
Shareholding
(3) Other Domestic Capital
24,127,951.00 -22,828,451.00 -22,828,451.00 1,299,500.00
Shareholding
Including:
Domestic Legal-person
24,127,951.00 -22,828,451.00 -22,828,451.00 1,299,500.00
Shareholding
Domestic Natural Person
Shareholding
(4) Foreign Shareholding
Including:
Foreign Legal-person
Shareholding
Foreign Natural Person
Shareholding
Total Shares with Restricted
260,344,460.00 -45,656,902.00 -45,656,902.00 214,687,558.00
Conditions
2. Tradable Shares without
Restricted Conditions
(1) RMB Ordinary Shares 360,470,904.00 45,656,902.00 45,656,902.00 406,127,806.00
(2) Domestically Listed
64,975,000.00 64,975,000.00
Foreign Shares
(3) Listed Foreign Shares
Overseas
(4) Others
Total Tradable Shares without
425,445,904.00 45,656,902.00 45,656,902.00 471,102,806.00
Restricted Conditions
In total 685,790,364.00 685,790,364.00
30. Capital Reserves
Balance at Beginning Increase in the Current Decrease in the Current Balance at End of
Items
of Year Period Period Period
Capital Premium (Stock Premium) 1,243,771,440.74 1,243,771,440.74
Capital Reserves Roll-in Under Original System 112,316,357.36 112,316,357.36
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
Balance at Beginning Increase in the Current Decrease in the Current Balance at End of
Items
of Year Period Period Period
Other Capital Reserves 236,453,784.63 3,170,222.58 239,624,007.21
In total 1,592,541,582.73 3,170,222.58 1,595,711,805.31
Note: The changes of the company's capital reserve are as follows: (1) The capital reserve formed by the risk mortgage of senior
executives exempted from the current debt of the company amounts to 2,841,542.67 yuan; (2) The company's calculation of other
changes in the owner's rights and interests of the grain storage (Tianjin) Logistics Limited company in the invested units belongs to
the company, amounting to 328,679.91 yuan.
31. Other Comprehensive Incomes
Amounts Occurred in the Current Period
Less: Other
Balance at Amounts
Comprehensive Less: Attributabl Attributable Balance at End
Items Beginning of Occurred
Incomes Charged at Income e to Parent to Minority of Period
Year before Income
Earlier Stage and Tax Company Shareholders
Tax in the
Current Roll-in Expense After Tax After Tax
Current Period
Profit and Loss
One Other comprehensive
incomes that won ’ t be
classified into profit and
loss
Including: value variation
of newly calculated and
defined benefits plan
Other comprehensive
incomes whose profit and
loss can’t be rolled in or
out at equity law
Two Other comprehensive
incomes that will be
438.33 438.33
classified into profit and
loss
Including: other
comprehensive income
whose profit and loss can
be rolled in or out at
equity law
Changes in fair value
through profit and loss for
-421,278.00 -421,278.00
available-for-sale financial
assets
Held-to-maturity
investment is reclassified
into available-for-sale
financial assets profit and
loss
Effective part of cash-flow
hedging profit and loss
Converted difference
between foreign currency 421,716.33 421,716.33
financial statements
In total 438.33 438.33
32. Surplus Reserves
Balance at Beginning of Increase in the Current Decrease in the Current
Items Balance at End of Period
Year Period Period
Statutory Surplus Reserves 84,487,609.05 84,487,609.05
Free Surplus Reserves 37,634,827.93 37,634,827.93
In total 122,122,436.98 122,122,436.98
33. Undistributed Profit
Items Amounts in the Current Period Amounts in the Prior Period
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
Items Amounts in the Current Period Amounts in the Prior Period
Adjustment on undistributed profit at end of last year -299,111,700.34 -547,123,017.26
Adjustment on total number of undistributed profit at beginning of
period (increase+ and decrease-)
Adjusted undistributed profit at beginning of period -299,111,700.34 -547,123,017.26
Add: net profit attributable to parent company in the current period 167,956,581.15 129,603,167.36
Less: withdrawal legal surplus reserves
Withdrawal free surplus reserves
Withdrawal general risk reserves
Ordinary stock dividends payable
Ordinary stock dividends transferred to capital
Add: cover company losses using surplus reserves
Others (formed by the merge of enterprises and retroactive
118,408,149.56
adjustments under the same control)
Undistributed profit at end of period -131,155,119.19 -299,111,700.34
34. Minority Interest
Items Balance at End of Period Balance at Beginning of Period
Sinograin Oils Corporation 241,504,003.06 242,434,948.56
Wang Yuecheng and other minority shareholders of Zhejiang
233,004,494.15 207,753,849.43
Xiaowangzi Food Co., Ltd.
Missme Food and Beverage (Tianjin) Co., Ltd. 8,860,128.93 9,687,021.60
Chaoxuntong (Tianjin) Commercial and Trading Co., Ltd. 6,236,324.41 5,559,049.55
Hebei Provincial Oil Pool Co., Ltd. 36,378,427.45 33,644,861.40
Tangshan Caofeidian Agricultural Development Group Co., Ltd. 24,343,101.44
Xinyi Yaowan Tourism Industrial Park Development Co., Ltd. 8,874,594.32
Beijing Grain Xinniu Runying Equity Investment Fund (Limited
1,479,099.05
Partnership)
ShiZhu Tujia Autonomous County Yujinzhu Agricultural
5,916,396.21
Partnership Enterprise (General Partnership)
In total 566,596,569.02 499,079,730.54
35. Operation Revenue and Operation Cost
Amounts in the Current Period Amounts in the Prior Period
Items
Revenue Cost Revenue Cost
Prime Business 7,362,877,190.25 6,732,130,680.87 7,867,860,792.55 7,167,956,134.14
Other Business 46,247,113.16 13,184,527.25 49,778,251.58 13,372,318.44
In total 7,409,124,303.41 6,745,315,208.12 7,917,639,044.13 7,181,328,452.58
Note: operation revenue and operation cost of the Company are based on information of industry and regional analysis, seeing
Appendix Fifteen 2.
(1) Prime Business (Industry and Business-classified)
Name of Industry (or Business) Amounts in the Current Period Amounts in the Prior Period
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
Revenue Cost Revenue Cost
Oil and Oil Seeds 6,261,524,286.20 5,948,914,989.47 6,533,461,558.85 6,242,894,698.91
Food Manufacturing Industry 890,987,143.21 612,079,134.38 829,093,442.40 581,010,692.16
Entrusted Processing 40,032,627.87 45,729,804.67 11,932,194.08 15,831,580.89
Oil Reserves Rotation 162,393,266.25 124,332,375.00 35,563,203.00
Transfer 7,939,866.72 1,074,377.35 6,487,277.74 2,695,225.67
Real Estate Development 267,712,458.14 155,065,841.68
Property Management Service 176,661,210.91 167,272,900.48
Tourist Hotel Service 6,949,447.43 3,185,194.35
In total 7,362,877,190.25 6,732,130,680.87 7,867,860,792.55 7,167,956,134.14
(2) Prime Business (Product-classified)
Amounts in the Current Period Amounts in the Prior Period
Name of Product
Revenue Cost Revenue Cost
Oil 6,471,890,047.04 6,120,051,546.49 6,587,444,233.67 6,261,421,505.47
Food Processing 890,987,143.21 612,079,134.38 829,093,442.40 581,010,692.16
Real Estate 451,323,116.48 325,523,936.51
In total 7,362,877,190.25 6,732,130,680.87 7,867,860,792.55 7,167,956,134.14
(3) Prime Business (Region-classified)
Amounts in the Current Period Amounts in the Prior Period
Name of Region
Revenue Cost Revenue Cost
Beijing 2,225,706,282.90 1,925,744,737.19 2,284,362,571.64 2,016,441,282.38
Tianjin 4,123,641,322.51 4,154,852,781.92 4,303,392,217.59 4,225,251,929.43
Zhejiang 640,002,204.15 429,029,230.87 601,713,674.15 409,141,409.64
Shandong 49,311,118.34 41,662,829.01 51,895,234.78 45,885,054.28
Liaoning 124,495,099.54 93,556,390.71 114,647,176.24 88,324,952.20
Hebei 199,721,162.81 87,284,711.17 60,526,801.67 56,656,928.52
Hainan 174,290,871.50 166,745,067.76
Heilongjiang 6,949,447.43 3,185,194.35
Hubei 268,027,180.78 155,208,349.16
Shanghai 2,055,616.77 1,115,966.42
In total 7,362,877,190.25 6,732,130,680.87 7,867,860,792.55 7,167,956,134.14
36. Tariff And Annex
Items Amounts in the Current Period Amounts in the Prior Period
Business Tax 32,013.47
Urban Maintenance and Construction Tax 5,842,393.58 6,630,671.72
Educational Surtax 2,582,618.40 3,104,569.54
Local Educational Surtax 1,721,744.55 1,525,118.90
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
Items Amounts in the Current Period Amounts in the Prior Period
Increment Tax on Land Value 197,624.76 22,375,467.16
House Property tax 7,701,037.94 7,311,758.86
Land Use Tax 1,617,228.36 1,374,665.53
Vehicle and Vessel Use Tax 50,229.02 51,081.96
Stamp Tax 3,873,868.49 4,519,040.11
Resources Tax 120,234.70
Other Taxes and Fees 206,043.68 1,405,472.06
In total 23,913,023.48 48,329,859.31
Note: calculation and payment standard of various taxes and surcharges sees details of Appendix Five Tax.
37. Sales Expenses
Items Amounts in the Current Period Amounts in the Prior Period
Employee Compensation (including wage, bonus,
welfare expenses, allowance as well as five social 61,214,787.72 57,011,007.00
insurance and one housing fund)
Advertising Expenses 3,789,513.48 5,947,655.16
Repair Costs 1,173,945.20 1,358,366.74
Packing Expenses 935,608.04 559,123.41
Transportation Fees 22,687,770.57 20,381,939.96
Terminal Charges 1,260,068.80 820,634.48
Water and Electricity Fees 1,980,862.22 2,338,735.74
Vehicle Fees 1,346,716.81 1,623,972.05
Warehousing Fees 13,148,592.18 8,413,479.41
Test and Detection Fees 335,007.92 398,037.44
Commercial Insurance Expenses 94,070.40 547,189.06
Sales Promotion Expenses 32,313,861.58 35,441,585.31
Business Entertainment Expenses 529,236.42 742,942.10
Labor Protection Fees 183,948.99 218,584.27
Commodity Wastage 1,942,588.74 744,458.02
Sample and Product Losses 8,034,152.45 6,062,673.85
Sales and Service Fees 256,459.94 4,910,000.00
Impairment Costs 16,234,000.42 16,056,593.33
Travel Expenses 7,760,499.91 7,494,585.28
Operation Expenses 14,979,675.83 9,528,015.06
Lease fee 2,998,804.40 2,605,001.39
Other Expenses 540,960.11 1,489,590.52
In total 193,741,132.13 184,694,169.58
38. Administration Expenses
Items Amounts in the Current Period Amounts in the Prior Period
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
Items Amounts in the Current Period Amounts in the Prior Period
Employee Compensation (including wage, bonus,
welfare expenses, allowance as well as five social 112,048,014.99 125,337,409.57
insurance and one housing fund)
Workers Insurance Expenses 760,974.77 670,625.85
Company Expenses 4,951,764.79 4,145,001.66
Commercial Insurance Expenses 694,285.64 1,174,261.82
Vehicle Fees 3,974,066.28 4,245,679.03
Impairment Costs 16,928,883.60 24,139,281.64
Repair Costs 3,408,236.67 2,259,750.04
Taxes in Expenses 474,740.91 320,300.97
Amortization of Assets 16,673,765.43 17,020,197.51
Material Consumption 750,510.31 772,549.15
Fees of Employing Agent 12,852,608.04 25,389,014.63
Information Network Fees 2,243,950.07 1,132,559.52
Labor Protection Fees 642,947.95 614,848.07
Environmental Protection Fees 784,709.59 770,534.92
Security Protection Fees 864,173.31 495,870.77
Conference Expenses 1,440,724.47 665,576.07
Business Entertainment Expenses 1,613,099.59 3,408,439.70
Travel Expenses 1,364,003.13 2,755,755.78
Office Expenses 1,837,034.04 1,882,855.50
Lease Fees 4,331,135.37 9,498,782.54
Consultation Service Fees 151,569.02 2,042,800.68
Other Expenses 1,371,119.43 4,208,666.81
In total 190,162,317.40 232,950,762.23
39. Research and Development Expenses
Items Amounts in the Current Period Amounts in the Prior Period
Cost of Scientific Research 2,742,564.22 3,393,588.50
In total 2,742,564.22 3,393,588.50
40. Financial Expenses
Items Amounts in the Current Period Amounts in the Prior Period
Interest Expenses 78,514,993.77 60,010,600.72
Less: Interest Income 11,149,346.83 24,528,341.57
Exchange Profit and Loss -19,437,870.30 -5,917,601.92
Service Charges 560,042.66 2,148,312.68
Others 305,829.37
In total 48,487,819.30 32,018,799.28
41. Loss from Asset Devaluation
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
Items Amounts in the Current Period Amounts in the Prior Period
Loss on Bad Debts -3,091,602.13 2,496,907.58
Loss on Inventory Price Drop 4,470,348.34 7,470,679.20
Loss from Project-under-construction Devaluation 583,333.33
Loss from Fixed Assets Devaluation 51,187.38
In total 1,378,746.21 10,602,107.49
42. Other Profits
Amounts Charged to
Amounts in the Current
Items Amounts in the Prior Period Non-recurring Profit and Loss in
Period
the Current Period
Government Subsidy Related to Daily Corporate
16,475,771.21 15,139,922.81 3,535,244.81
Activities
Return of Service Charges of Withholding
72,743.16 72,743.16
Individual Income Tax
In total 16,548,514.37 15,139,922.81 3,607,987.97
Including: details of government subsidy are as follows:
Amounts in the Current Amounts in the Prior Related to
Items Receiving Subsidy
Period Period Assets/Profits
Relocation Compensation 384,763.82 384,763.82 Related to Assets
Special Subsidy for Technical Renovation of Production Line 450,000.00 450,000.00 Related to Assets
Special Subsidy for Infrastructure Input 908,691.98 908,691.99 Related to Assets
Enterprise Supporting Infrastructure at Construction Stage of “Tianjin
1,277,504.16 1,277,504.16 Related to Assets
Harbor Industrial Park Administrative Committee”
Tianjin Binhai New District’ Industrially Technical Renovation and Park
222,222.24 222,222.24 Related to Assets
Construction Funds as well as Expenditures for Science and Technology
Fixed Assets Specially Formed by Science and Technology Commission
77,838.84 77,838.84 Related to Assets
of Guchuan Edible Oil
ppropriation for Oil Tank’s Electric Heating System 58,195.08 58,195.08 Related to Assets
Cooking Oil Green and Cleaning Production Equipment, Technical Study
59,371.04 56,000.04 Related to Assets
as well as Science and Technology Demonstration
Subsidy for Financially Obsolete Boiler 120,000.00 Related to Profits
Subsidy for Technical Renovation of Linan District Bureau of Economic
483,600.00 Related to Profits
and Information
Subsidy for Boiler Renovation of Zhennan Office of Finance of Linan
450,000.00 Related to Profits
District
Financial Subsidy for Food Security 30,000.00 30,000.00 Related to Profits
Subsidy for Boiler Renovation 570,000.00 Related to Profits
Land Tax Exemption 63,803.00 256,000.00 Related to Profits
Fund Subsidy for Projects of Technical Renovation 181,600.00 Related to Profits
Stable Post Subsidy 66,000.00 29,946.64 Related to Profits
Return of Income by VAT 11,440,800.00 9,583,560.00 Related to Profits
Funds for Promoting Industrial Development of Tianjin Dongjiang Free
353,981.05 Related to Profits
Trade Port Zone Administration Committee
Industry and Information Financial Funds of Linan District 621,600.00 Related to Profits
Award for Enterprises Obtaining Famous-brand Products and Standard
90,000.00 Related to Profits
Setting (Revision) of Linan District
Award Subsidy for Water-saving Enterprises 1,000.00 Related to Profits
Award Funds for Cleaning Production 20,000.00 Related to Profits
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
Amounts in the Current Amounts in the Prior Related to
Items Receiving Subsidy
Period Period Assets/Profits
Subsidy for Fees of Perfecting Supporting Infrastructure 350,000.00 Related to Profits
In total 16,475,771.21 15,139,922.81
43. Investment Income
Amounts in the Current
Items Amounts in the Prior Period
Period
Long-term equity investment income accounted with equity method 8,330,122.46 12,343,020.80
Investment income generated from disposing long-term equity investment 203,943.97
Investment income of financial assets that are measured as per fair value and for which
-592,610.00 -1,294,068.24
the changes are included in the current profit and loss during the holding period
Investment income of disposing financial assets that are measured as per fair value and
7,396,982.64 9,842,560.10
for which the changes are included in the current profit and loss
Investment income of disposing financial products 15,846,716.82 4,488,253.49
In total 30,981,211.92 25,583,710.12
44. Profits on Changes in Fair Value
Source of generating income with changes in fair value Amounts in the Current Period Amounts in the Prior Period
Financial assets that are measured as per fair value and for which the changes are
2,009,952.25 12,934,641.69
included in the current profit and loss
Including: income with changes in fair value generated by derivative financial
2,009,952.25 12,934,641.69
instruments
In total 2,009,952.25 12,934,641.69
45. Assets Disposal Income
Amounts Charged to
Items Amounts in the Current Period Amounts in the Prior Period
Non-recurring Profit and Loss
Total Income of Non-current Assets Disposal -367,796.13 -6,770.67 -367,796.13
Including: income of fixed assets disposal -367,796.13 -6,770.67 -367,796.13
In total -367,796.13 -6,770.67 -367,796.13
46. Non-operating Income
Amounts Charged to
Amounts in the Current Amounts in the Prior
Items Non-recurring Profit and
Period Period
Loss
Government Subsidy Irrelevant to Daily Operation Activities 69,818.00
Asset Inventory Surplus Gains 38,528.20 8.26 38,528.20
Donation Gains 35,800.00
Demand Compensation Income 4,382,340.61 230,078.50 4,382,340.61
Tax Rebate 67,445.03
Relocation Compensation 12,233,443.22 22,523,945.85 12,233,443.22
Payables that aren’t able to pay 16,679,043.74 16,679,043.74
Other Gains 2,572,582.46 2,791,149.54 2,572,582.46
In total 35,905,938.23 25,718,245.18 35,905,938.23
Including: details of government subsidy are as follows:
Items Receiving Subsidy Amounts in the Current Period Amounts in the Prior Period Related to Assets/Profits
Financial Incentives to 26,020.00
Super-proportional Placement of
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
Items Receiving Subsidy Amounts in the Current Period Amounts in the Prior Period Related to Assets/Profits
Disable Persons of Linan District’s
Finance Bureau
Food Emergency Subsidy 18,000.00
Export Bounty of Business
25,798.00
Committee
In total 69,818.00
47. Non-operating Expenses
Amounts Charged to
Items Amounts in the Current Period Amounts in the Prior Period
Non-recurring Profit and Loss
External Donation Expenses 20,000.00 38,500.00 20,000.00
Assets Damage and Abandonment Loss 1,441,925.72 278,048.34 1,441,925.72
Amercement Outlay 1,187.98 29,126.42 1,187.98
Compensation and Default Money 5,471,466.18 928,136.64 5,471,466.18
Relocation Loss 3,198,119.25 15,749,062.93 3,198,119.25
Others 1,018,783.92 2,017,718.48 1,018,783.92
In total 11,151,483.05 19,040,592.81 11,151,483.05
48. Income Tax Expenses
(1) List of Income Tax Expenses
Amounts in the Current Period Amounts in the Prior Period Amounts in the Current Period
Income Tax Expenses of the Current Period 71,816,277.87 91,667,682.68
Deferred Income Tax Expenses -5,632,570.27 -15,776,517.61
Others 63,005.65
(2) Accounting Profit and Income Tax Expense Adjustment Process
Items Amounts in the Prior Period
Total Profits 277,309,830.14
Income tax expenses calculated by statutory/applicable tax rate 68,888,490.76
Effect of subsidiary corporations being applicable to different tax rates -438,966.78
Adjustment on effect of income tax in the prior period 740,785.99
Effect of Non-taxable Incomes -23,965,306.96
Effect of Non-deductible cost, expense and loss 18,910,673.63
Effect of deductible loss on usage of unconfirmed deferred income tax assets in the prior period -3,053,323.81
Effect of deductible temporary difference or deductible loss on unconfirmed deferred income tax in the
5,101,354.77
current period
Others
Income Tax Expenses 66,183,707.60
49. Other Comprehensive Incomes
See details of Appendix Six, 31.
50. Item related to cash flows statement
(1) Receiving other cash related to operation activities
Items Amounts in the Current Period Amounts in the Prior Period
Intercourse Funds of Related Parties 12,321,015.31 14,986,715.05
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
Items Amounts in the Current Period Amounts in the Prior Period
Intercourse Funds of Other Units 427,638,129.62 143,896,782.01
Non-operating Income 3,162,922.28 3,197,686.55
Interest Income 12,714,538.74 5,153,293.07
Future Guarantee 857,189,447.41 964,620,970.77
Cash Flow of Allocated Assets 45,578,965.01
Others 7,844,959.19 4,204,891.67
In total 1,320,871,012.55 1,181,639,304.13
(2) Other Cash Payment Related to Operation Activities
Items Amounts in the Current Period Amounts in the Prior Period
Intercourse Funds of Related Parties 8,419,687.72 11,325,588.70
Intercourse Funds of Other Units 150,418,240.65 468,947,062.03
Payment for Administration Expenses 42,455,842.36 56,096,248.89
Payment for Operating Expenses 48,583,417.88 47,688,580.85
Non-operating Expenses 539,765.49 18,324,573.33
Petty Cash Paid 1,559,803.65 1,117,033.00
Bank Charges 590,054.94 1,399,464.20
Future Guarantee 787,350,321.68 612,100,000.00
Cash Flow of Allocated Assets 112,176,278.67
Others 14,426,119.22 16,530,438.64
In total 1,054,343,253.59 1,345,705,268.31
(3) Receiving other cash related to investment activities
Items Amounts in the Current Period Amounts in the Prior Period
Cash Flow of Allocated Assets 49,136.10
In total 49,136.10
(4) Other Cash Payment Related to Financing Activities
Items Amounts in the Current Period Amounts in the Prior Period
Loan Interest of Related Parties Paid 1,720,000.00
Others 259,044.96
In total 1,979,044.96
51. Supplementary Materials of Cash Flows Statement
(1) Supplementary Materials of Cash Flows Statement
Supplementary Materials Amounts in the Current Amounts in the Prior
Period Period
1. Adjusting net accounting profit to operating cash flow
Net Profit 211,126,122.54 208,696,290.76
Add: Assets Impairment Reserves 1,378,746.21 10,602,107.49
Fixed Assets Depreciation, Oil-and-gas Assets Depreciation and Productive Biological
95,040,294.95 100,488,015.47
Assets Depreciation
Amortization of Intangible Assets 18,678,695.83 14,763,115.24
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
Supplementary Materials Amounts in the Current Amounts in the Prior
Period Period
Amortization of Long-term Deferred Expenses 4,159,473.31 5,992,729.57
Losses on Disposal of Fixed Assets, Intangible Assets and Other Long-term Assets
367,796.13 6,770.67
(Fill in profit with symbol “－”)
Losses on Retirement of Fixed Assets (Fill in profit with symbol “－”) 1,416,491.75 273,173.63
Losses on Changes in Fair Value (Fill in profit with symbol “－”) -2,009,952.25 -12,934,641.69
Financial Expenses (Fill in profit with symbol “－”) 59,077,123.47 51,387,508.31
Investment Losses (Fill in profit with symbol “－”) -30,981,211.92 -25,583,710.12
Decrease in Deferred Income Tax Assets (Fill in increase with symbol “－”) -1,151,908.07 -2,616,915.14
Increase in Deferred Income Tax Reliabilities (Fill in decrease with symbol “－”) -6,566,836.68 -10,832,755.26
Decrease in Inventory (Fill in increase with symbol “－”) 167,659,592.74 -751,498,235.77
Decrease in Items of Operating Receivables (Fill in increase with symbol “－”) 217,514,117.22 -239,599,506.90
Increase in Items of Operating Receivables (Fill in decrease with symbol “－”) 114,459,006.01 -728,651,725.92
Others
Net Cash Flows from Operating Activities 850,167,551.24 -1,379,507,779.66
2. Major investment and financing activities that do not involve cash payments
Conversion of Debt into Capital
Convertible Bonds Due Within One Year
Fixed Assets under Financing Lease
3. Net change conditions in cash and cash equivalents
Cash balance at end of period 867,870,016.78 1,014,438,663.43
Less: cash balance at beginning of period 1,014,438,663.43 505,477,847.81
Add: balance of the cash equivalents at end of period
Less: balance of the cash equivalents at beginning of period
Cash and cash equivalent net increase quota -146,568,646.65 508,960,815.62
(2) Net cash from subsidiary corporation paid in the current period
Items Amounts
Merge of enterprises occurred in the current period and cash or cash equivalents paid in the current period 39,000,000.00
Including: Beijing Grain Garden Complex Construction and Operation (Xinyi) Co., Ltd. 13,500,000.00
Beijing Grain (Caofeidian) Agricultural Development Co., Ltd. 25,500,000.00
Receiving net cash paid by subsidiary corporation 39,000,000.00
(3) Composition of cash and cash equivalents
Items Balance at End of Period Balance at Beginning of Period
One Cash 867,870,016.78 1,014,438,663.43
Including: cash in stock 46,418.17 119,766.22
Bank deposit available for payment at any time 737,705,225.28 937,214,125.42
Other currency funds available for payment at any time 130,118,373.33 77,104,771.79
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
Items Balance at End of Period Balance at Beginning of Period
Two Cash Equivalents
Including: bond investment maturing within three months
Three Balance of Cash and Cash Equivalents at End of Period 867,870,016.78 1,014,438,663.43
Including: restricted cash and cash equivalents used by parent company or
intra-group affiliates
52. Assets with restricted ownership or right to use
Book Value at End of
Items Reasons being Restricted
Period
Currency Funds 57,000,000.00 Estimated held-to-maturity fixed deposit receipt of management
Inventory 4,824,035.45 Loan Mortgage
Investment Real Estate 5,778,794.33 Loan Mortgage
Fixed Assets 3,983,893.20 Loan Mortgage
In total 71,586,722.98
53. Monetary Items of Foreign Currency
(1) Monetary Items of Foreign Currency
Balance of Foreign Currency at Balance of Converting to RMB at
Items Exchange Rate Convert
End of Period End of Period
Currency Funds 1,098,485.64 6.8632 7,539,126.64
Including: US Dollars 1,098,485.64 6.8632 7,539,126.64
Short-term Loan 4,227,995.82 6.8632 29,017,580.91
Including: US Dollars 4,227,995.82 6.8632 29,017,580.91
Notes and Accounts Payable 5,163,539.2 6.8632 35,438,402.24
Including: US Dollars 5,163,539.2 6.8632 35,438,402.24
(2) Instruction of Operational Entity Overseas
The registrant and operating unit of the Company is Beijing Grain (Singapore) International Trade Co., Ltd. with main business
place of Singapore and recording currency of US Dollars.
54. Hedging
Please refer to 2 Derivative Financial Assets under Section VI of the Notes.
55. Government Subsidies
1. Basic information of government subsidies initially recognized for the current period
Relating to Assets Relating to Income Has It
Been
Write Down the Write Down Actually
Item Amount Deferred Deferred Non-operating
Book Value of Other Income the Cost Received
Income Assets Income Income
Expenses ?
Income from VAT
11,440,800.00 11,440,800.00 No
Refunds
Financial Fund for
Industry and Information
621,600.00 621,600.00 Yes
Technology in Linan
District
Industrial Development
Promotion Fund from
Management Committee 353,981.05 353,981.05 Yes
of Dongjiang Free Trade
Port Zone of Tianjin
Subsidy for Costs for
Improving Infrastructure 350,000.00 350,000.00 Yes
Facilities
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
Award for Enterprises
with Famous Brand
Products and Standard 90,000.00 90,000.00 Yes
Establishment (Revision)
in Linan District
Subsidy for Stable Posts 66,000.00 66,000.00 Yes
Land Tax Relief 63,803.00 63,803.00 Yes
Financial Subsidy for
30,000.00 30,000.00 Yes
Food Security
Subsidy Fund Cleaner
20,000.00 20,000.00 Yes
Production Award
Subsidy for Water-saving
1,000.00 1,000.00 Yes
Enterprise Award
Total 13,037,184.05 13,037,184.05 ——
Note: The VAT refunds included in the current other income of Lin'an Xiaotianshi Food Co., Ltd., a level 4 subsidiary of the
Company, are 11,440,800.00 yuan. Among them, the VAT refunds that have not been actually received amount to 993,600.00 yuan,
which have been recorded in other receivables.
2. Government subsidies included in the current profits and losses
Included in the Other Included in the Write Down the Cost
Item Category
Income Non-Operating Income Expenses
Relocation Compensation Government Subsidies 384,763.82
Special Subsidy for Technical
Government Subsidies 450,000.00
Renovation of Production Lines
Special Subsidy for
Government Subsidies 908,691.98
Infrastructure Investment
Enterprise Infrastructure of
Management Committee of
Government Subsidies 1,277,504.16
Tianjin Harbor Industrial Park in
the Construction Stage
Industrial Technical Renovation
and Construction Funds and
Expenditures for Science and Government Subsidies 222,222.24
Technology of Binhai New Area
of Tianjin
Fixed Assets Specially Formed
by Guchuan Edible Oil Science Government Subsidies 77,838.84
and Technology Commission
Allocation for Electric Heating
Government Subsidies 58,195.08
Systems of Oil Tanks
Research and Technology
Demonstration of Green &
Government Subsidies 59,371.04
Cleaner Production Equipment
and Technology for Edible Oil
Financial Subsidy for Food
Government Subsidies 30,000.00
Security
Land Tax Relief Government Subsidies 63,803.00
Subsidy for Stable Posts Government Subsidies 66,000.00
Income from VAT Refunds Government Subsidies 11,440,800.00
Industrial Development
Promotion Fund from
Management Committee of Government Subsidies 353,981.05
Dongjiang Free Trade Port Zone
of Tianjin
Financial Fund for Industry and
Information Technology in Linan Government Subsidies 621,600.00
District in 2017
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
Included in the Other Included in the Write Down the Cost
Item Category
Income Non-Operating Income Expenses
Award for Enterprises with
Famous Brand Products and
Standard Establishment Government Subsidies 90,000.00
(Revision) in Linan District in
2017
Subsidy for Water-saving
Government Subsidies 1,000.00
Enterprise Award
Subsidy Fund for 2018 Cleaner
Government Subsidies 20,000.00
Production Award
Subsidy for Costs for Improving
Government Subsidies 350,000.00
Infrastructure Facilities
Total —— 16,475,771.21
VII. Change in Consolidation Scope
1. Change in Consolidation Scope for Other Reasons
(1) In January 2018, the Company invested 13.5 million yuan in currency to establish Jingliang Rural Complex Construction
and Operations (Xinyi) Co., Ltd. The paid-in amount of contribution accounted for 45% of the paid-in capital of the invested unit,
thus making it become the first majority shareholder.
(2) In November 2017, the Company invested to establish Jingliang (Caofeidian) Agricultural Development Co., Ltd. and
invested 25.5 million yuan in currency in May 2018. The paid-in amount of contribution accounted for 51% of the paid-in capital of
the invested unit, making it become the first majority shareholder.
VIII. Equities in Other Entities
1. Equities in Subsidiaries
(1) Composition of the Group
Principle Shareholding
Registered Ratio (%)
Name of Subsidiary Place of Nature of Business Mode of Acquisition
Place
Business Direct Indirect
Merger under the
Beijing Jingliang Food Co., Ltd. Beijing Beijing Investment Company 100
same control
Agricultural Product
Merger under the
Jingliang (Tianjin) Grain and Oil Industry Co., Ltd. Tianjin Tianjin and By Product 70
same control
Processing
Merger under the
Beijing Jingliang Oil and Fat Co., Ltd. Beijing Beijing Grain and oil trade 100
same control
Jingliang Xinchuang (Tianjin) Business Merger under the
Tianjin Tianjin Business services 51
Management Co., Ltd. same control
Farm and Sideline Food Merger under the
Jingliang (Hebei) Oil Industry Co., Ltd. Hebei Hebei 51
Processing same control
Merger under the
Beijing Guchuan Edible Oil Co., Ltd. Beijing Beijing Grain and oil trade 100
same control
Farm and Sideline Food Merger under the
Beijing Eisen-Lubao Oil Co., Ltd. Beijing Beijing 100
Processing same control
Beijing Tianweikang Oil Distribution Center Co., Merger under the
Beijing Beijing Warehousing 100
Ltd. same control
Merger under the
Beijing Guchuan Bread Food Co., Ltd. Beijing Beijing Food Processing 100
same control
Jingliang Missme Catering Management (Tianjin) Merger under the
Tianjin Tianjin Food Processing 51
Co., Ltd. same control
Missmehui Catering Management (Tianjin) Co., Merger under the
Tianjin Tianjin Food Sales 100
Ltd. same control
Missmeao Catering Management (Tianjin) Co., Merger under the
Beijing Beijing Food Sales 100
Ltd. same control
Combination not
Zhejiang Xiao Wang Zi Food Co., Ltd. Hangzhou Hangzhou Food Processing 69.7716
under same control
Combination not
Hangzhou Lin'an Xiaotianshi Food Co., Ltd. Hangzhou Hangzhou Food Processing 69.7716
under same control
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
Combination not
Liaoning Xiao Wang Zi Food Co., Ltd. Liaoning Liaoning Food Processing 69.7716
under same control
Combination not
Linqing Xiao Wang Zi Food Co., Ltd. Linqing Linqing Food Processing 69.7716
under same control
Lin'an Chunmanyuan Agricultural Development Combination not
Hangzhou Hangzhou Food Processing 69.7716
Co., Ltd. under same control
Establishment by
Jingliang (Singapore) International Trade Co., Ltd. Singapore Singapore Grain trade 100
investment
Jingliang Rural Complex Construction and Operations (Xinyi) Establishment by
Xinyi Xinyi Land remediation 45
Co., Ltd. investment
Jingliang (Caofeidian) Agricultural Development Establishment by
Tangshan Tangshan Plantation 51
Co., Ltd. investment
(2) Major non-wholly-owned subsidiaries
Shareholding Profit And Loss Dividends
Ratio of Attributable to Distributed to Balance of Minority
Name of Subsidiary Minority Minority Minority Shareholder's Equity at the End
Shareholders Shareholders for the Shareholders for the of the Period
(%) Current Period Current Period
Jingliang (Tianjin) Grain and Oil
30 6,869,054.50 7,800,000.00 241,504,003.06
Industry Co., Ltd.
Zhejiang Xiao Wang Zi Food Co., Ltd. 30.2284 33,098,847.63 7,848,202.91 233,004,494.15
Jingliang Missme Catering Management
49 -826,892.67 8,860,128.93
(Tianjin) Co., Ltd.
Jingliang Xinchuang (Tianjin) Business
49 677,274.86 6,236,324.41
Management Co., Ltd.
Jingliang (Hebei) Oil Industry Co., Ltd. 49 3,738,066.05 1,004,500.00 36,378,427.45
Jingliang Rural Complex Construction and Operations (Xinyi)
Co., Ltd. 55 -229,910.42 16,270,089.58
Jingliang (Caofeidian) Agricultural
49 -156,898.56 24,343,101.44
Development Co., Ltd.
(3) Important financial information on major non-wholly-owned subsidiaries
Ending Balance
Name of Subsidiary Current Non-current Current Non-current
Total Assets Total Liabilities
Assets Assets Liabilities Liabilities
Jingliang (Tianjin)
Grain and Oil 643,318,329.95 864,787,149.34 1,508,105,479.29 648,070,966.90 55,021,168.86 703,092,135.76
Industry Co., Ltd.
Zhejiang Xiao Wang 434,538,712.02 384,616,054.08 819,154,766.10 139,320,269.31 58,435,800.61 197,756,069.92
Zi Food Co., Ltd.
Jingliang Missme
Catering Management 13,594,754.60 5,617,783.27 19,212,537.87 1,130,642.10 1,130,642.10
(Tianjin) Co., Ltd.
Jingliang Xinchuang
(Tianjin) Business 13,018,932.12 6,647.74 13,025,579.86 293,084.18 293,084.18
Management Co., Ltd.
Jingliang (Hebei) Oil 389,424,891.03 91,971,278.94 481,396,169.97 407,110,951.30 43,530.00 407,154,481.30
Industry Co., Ltd.
Jingliang Rural Complex
Construction and
29,196,334.50 386,000.53 29,582,335.05 354.00 354.00
Operations (Xinyi) Co.,
Ltd.
Jingliang
(Caofeidian)
Agricultural 51,880,588.02 321,598.36 52,202,186.38 2,522,387.52 2,522,387.52
Development Co.,
Ltd.
(Continued)
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
Beginning balance
Name of Subsidiary Non-Current Current Non-current
Current Assets Total Assets Total Liabilities
Assets Liabilities Liabilities
Jingliang (Tianjin)
Grain and Oil Industry 1,299,787,374.38 896,524,016.17 2,196,311,390.55 1,327,490,398.97 60,704,496.39 1,388,194,895.36
Co., Ltd.
Zhejiang Xiao Wang Zi 309,304,989.70 373,675,587.60 682,980,577.30 106,103,249.25 46,466,856.41 152,570,105.66
Food Co., Ltd.
Jingliang Missme
Catering Management 16,058,445.83 4,270,567.41 20,329,013.24 559,581.40 559,581.40
(Tianjin) Co., Ltd.
Jingliang Xinchuang
(Tianjin) Business 81,900,543.34 750,679.10 82,651,222.44 71,301,496.27 71,301,496.27
Management Co., Ltd.
Jingliang (Hebei) Oil 282,694,214.41 95,147,791.73 377,842,006.14 307,807,398.50 1,371,625.20 309,179,023.70
Industry Co., Ltd.
(Continued)
Last Term Amount
Name of Subsidiary Total
Cash Flow from Operating
Operating Income Net Profit Comprehensive
Activities
Income
Jingliang (Tianjin) Grain and Oil Industry Co., 3,919,504,928.54 22,896,848.34 22,896,848.34 435,618,691.23
Ltd.
Zhejiang Xiao Wang Zi Food Co., Ltd. 816,635,284.45 116,951,262.54 116,951,262.54 168,379,658.04
Jingliang Missme Catering Management 2,832,037.42 -1,687,536.07 -1,687,536.07 -4,659,278.55
(Tianjin) Co., Ltd.
Jingliang Xinchuang (Tianjin) Business 358,518,101.34 1,382,769.51 1,382,769.51 -2,896,047.51
Management Co., Ltd.
Jingliang (Hebei) Oil Industry Co., Ltd. 333,656,272.19 7,628,706.23 7,628,706.23 -84,637,445.91
Jingliang Rural Complex Construction and -418,018.95 -418,018.95 -609,445.51
Operations (Xinyi) Co., Ltd.
Jingliang (Caofeidian) Agricultural -320,201.14 -320,201.14 -8,935,818.31
Development Co., Ltd.
(Continued)
Amount This Year
Name of Subsidiary Total
Cash flow from operating
Operating income Net profit comprehensive
activities
income
Jingliang (Tianjin) Grain and Oil 3,688,456,961.35 46,716,146.85 46,716,146.85 -363,764,675.67
Industry Co., Ltd.
Zhejiang Xiao Wang Zi Food Co., Ltd. 771,331,947.29 103,851,312.21 103,851,312.21 82,659,601.58
Jingliang Missme Catering Management 6,576,016.95 -230,568.16 -230,568.16 -11,677,455.73
(Tianjin) Co., Ltd.
Jingliang Xinchuang (Tianjin) Business 787,720,715.22 1,549,726.17 1,549,726.17 5,871,703.41
Management Co., Ltd.
Jingliang (Hebei) Oil Industry Co., Ltd. 64,100,717.77 3,662,982.44 3,662,982.44 -267,609,945.18
2. The share of owner's equity in the subsidiary has changed and it still controls the transactions of the subsidiary.
None.
3. Equity in Joint Ventures or Affiliates
(1) Important Joint Ventures or Affiliates
Name of Joint Venture Principle Registered Place Nature of Shareholding Ratio (%) Accounting Treatment
or Affiliate Place of Business Methods for Investment in
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
Principle Shareholding Ratio (%) Accounting Treatment
Name of Joint Venture Nature of
Place of Registered Place Methods for Investment in
or Affiliate Business Direct Indirect
Business Joint Ventures or Affiliates
Niulan
Mountain,
Beijing Zhengda Feed Niulan Mountain, Shunyi Manufactur
Shunyi 50.00 Equity method
Co., Ltd. District, Beijing er
District,
Beijing
No. 1,
Lingang Transportat
SINOGRAIN No. 1, Lingang Economic
Economic ion and
(Tianjin) Warehousing Zone, Binhai New Area 30.00 Equity method
Zone, Binhai warehousin
Logistics Co., Ltd. of Tianjin
New Area of g
Tianjin
(2) Important financial information on major joint ventures
Beijing Zhengda Feed Co., Ltd. Beijing Zhengda Feed Co., Ltd.
Item
Ending Balance/Current Amount Beginning Balance/Last Term Amount
Current assets 53,128,106.97 65,265,065.01
Including: cash and cash equivalents 4,164,426.47 7,741,319.43
Non-current assets 166,435,292.09 112,237,685.88
Total assets 219,563,399.06 177,502,750.89
Current liabilities 95,250,888.23 67,305,652.33
Non-current liabilities
Total liabilities 95,250,888.23 67,305,652.33
Minority shareholder's equity
Shareholders' equity attributable to
124,312,510.83 110,197,098.56
the parent company
Share of net assets based on 62,156,255.42 55,098,549.28
shareholding ratio
Adjustments
-- Goodwill
-- Unrealized profits from internal
transactions
-- Other
Book value of equity investment in 65,339,624.28 58,936,076.18
joint ventures
Fair value of equity investment in
joint ventures with open offers
Operating income 412,682,400.89 396,853,669.74
Financial costs -2,079,697.84 -1,423,338.05
Income tax expense 5,510,663.98 7,952,866.41
Net profit 16,057,882.06 23,115,278.24
Net profit from discontinued
operations
Other comprehensive income -489,060.00 150,150.00
Total comprehensive income 15,568,822.06 23,265,428.24
Dividends received from joint
ventures in the current period
(3) Important financial information on major affiliates
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
Ending Balance/Current Amount Beginning Balance/Last Term Amount
Item SINOGRAIN (Tianjin) Warehousing Logistics SINOGRAIN (Tianjin) Warehousing Logistics
Co., Ltd. Co., Ltd.
Current assets 120,310,983.11 76,297,906.27
Non-current assets 349,183,791.13 328,865,777.91
Total assets 469,494,774.24 405,163,684.18
Current liabilities 19,419,434.80 4,526,369.09
Non-current liabilities 58,450,000.00 15,125,229.88
Total liabilities 77,869,434.80 19,651,598.97
Minority shareholder's equity
Shareholders' equity attributable
391,625,339.44 385,512,085.21
to the parent company
Share of net assets based on
117,487,601.83 115,653,625.56
shareholding ratio
Adjustments
-- Goodwill
-- Unrealized profits from internal
transactions
-- Other
Book value of equity investment
117,487,601.83 115,653,625.56
in affiliates
Fair value of equity investment in
affiliates with open offers
Operating income 20,533,721.00 33,461,596.58
Net profit 5,017,654.54 6,777,975.68
Net profit from discontinued
operations
Other comprehensive income
Total comprehensive income 5,017,654.54 6,777,975.68
Dividends received from affiliates
in the current period
IX. Risks Related to Financial Instruments
The Company's principal financial instruments include equity investment, creditors' investment, borrowing, accounts receivable,
accounts payable, etc. See relevant items under Section VI of the Notes for details about financial instruments. The risks associated
with these financial instruments and the risk management policies adopted by the Company to reduce such risks are described below.
The Company's management manages and monitors these risk exposures to ensure that such risks are controlled within the restricted
range.
The Company adopts the sensitivity analysis technology to analyze the possible influences of reasonable and possible changes
of risk variables on current profits and losses or shareholders' equity. Since a risk variable seldom changes by itself and the
correlation between variables will have a significant impact on the final amount of change caused by a risk variable, the following
content is base on the assumption that each variable changes independently.
(1) Risk Management Objectives and Policies
The Company's engagement in risk management is aimed at striking a proper balance between risk and profit, minimizing the
negative impact of risk on the Company's operating performance and maximizing the interests of shareholders and other equity
investors. In view of the above objectives of risk management, the Company's basic strategy for risk management is to identify and
analyze all risks faced by the Company, establish the appropriate bottom line for risk tolerance and conduct risk management, carry
out timely and reliable supervision of risks and thus control the risks within a limited range.
1. Market Risks
(1) Foreign Exchange Risk
Foreign exchange risk refers to the risk of loss caused by exchange rate movements. The Company's foreign exchange risk is
mainly related to US dollar. Apart from the Company's several subsidiaries that settle their purchasing and selling businesses in US
dollar, the Company's other main business activities are settled in RMB. As of December 31, 2018, the assets and liabilities of the
Company are settled in RMB, except that the assets or liabilities mentioned in the following table are settled in US dollar. Foreign
exchange risks arising from assets and liabilities settled in such foreign currencies may have an impact on the Company's operating
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
performance.
Item Ending Balance Opening Balance
Cash and cash equivalents 7,539,126.64 11,009,343.09
Notes payable and accounts payable 35,438,402.24 83,154,229.20
Other payables 200.00
Short-term loans 29,017,580.91 417,473,862.73
Note: The Company pays close attention to the impact of exchange rate movements on the Group.
(2) Sensitivity analysis on foreign exchange risk:
The Company adopts the sensitivity analysis technology to analyze the possible influences of reasonable and possible changes
of risk variables on current profits and losses or owner's equity. Since a risk variable seldom changes by itself and the correlation
between variables will have a significant impact on the final amount of change caused by a risk variable, the following content is
base on the assumption that each variable changes independently.
On the assumption that foreign currency assets and liabilities remain relatively stable and other variables remain unchanged, the
possible reasonable changes in exchange rates have the following after-tax influences on current profits and losses and equities:
Current period
Item Change in Exchange Rate
Influence on Shareholders'
Influence on Profits
Equity
All foreign currencies Appreciate by 5% against RMB -2,845,842.82 -2,845,842.82
All foreign currencies Depreciate by 5% against RMB 2,845,842.82 2,845,842.82
2. Credit Risk
On December 31, 2018, the largest credit risk exposure that may cause financial loss to the Company mainly comes from the
loss on financial assets of the Company due to the failure of the other party to perform its obligations, including:
Book value of financial assets recognized in the consolidated balance sheet; for a financial instrument measured at fair value, its
book value reflects its risk exposure instead of their biggest risk exposure, and its biggest risk exposure may vary with the change of
its future fair value.
In order to reduce the credit risk, the Company sets relevant policies to control its exposure, sets corresponding credit periods
based on customer’s financial position, possibility of obtaining guarantees from third parties, credit records and other factors such as
current market conditions and other credit qualifications for customer assessment, and implements other monitoring procedures to
ensure that necessary measures are taken to recover overdue credits. In addition, the Company reviews the collection of individual
account receivables on each balance sheet date in order to make sufficient provision for bad debts for uncollectable amounts.
Therefore, the Company's management believes that the Company's credit risk has been greatly reduced.
The liquidity funds of the Company are deposited in banks with high credit rating, so the credit risk of liquidity funds is low.
3. Liquidity Risk
When managing liquidity risk, the Company keeps and monitors adequate cash and cash equivalents approved by its
management in order to meet the Company's business needs and reduce the influences of cash flow fluctuations. The Company's
management monitors the use of bank loans and ensures the performance of loan agreements.
The Company uses bank loans as its main source of funds. On December 31, 2018, the amount of bank loans that have not been
used by the Company was RMB 2.88 billion.
As of December 31, 2018, the undiscounted cash flow of Company's financial assets and liabilities under contracts is shown
below by due date:
Ending Balance
Item Original Book Above Five
Net Book Value Within One Year 1 To 2 Years 2 To 5 Years
Value Years
Monetary
924,870,016.78 924,870,016.78 924,870,016.78
funds
Notes payable
and 97,775,710.11 98,642,588.11 98,642,588.11
receivables
Other
18,256,513.93 18,573,440.15 18,573,440.15
receivables
Available-for-
sale financial 20,000,000.00 30,500,000.00 30,500,000.00
assets
Subtotal 1,060,902,240.82 1,072,586,045.04 1,072,586,045.04
Short-term
1,437,715,080.91 1,437,715,080.91 1,437,715,080.91
loans
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
Notes payable
and accounts 140,564,713.11 140,564,713.11 140,564,713.11
payable
Other
111,288,708.99 111,288,708.99 111,288,708.99
payables
Long-term
loans
Subtotal 1,689,568,503.01 1,689,568,503.01 1,689,568,503.01
(Continued)
Beginning balance
Item Original Book 1 to 2 Above Five
Net Book Value Within One Year 2 to 5 Years
Value Years Years
Monetary funds 1,014,438,663.43 1,014,438,663.43 1,014,438,663.43
Notes payable
75,165,127.11 76,068,110.58 76,068,110.58
and receivables
Other
75,722,139.87 79,017,252.75 79,017,252.75
receivables
Non-current
assets due within 51,000,000.00 51,000,000.00 51,000,000.00
one year
Available-for-sal
20,000,000.00 30,500,000.00 30,500,000.00
e financial assets
Subtotal 1,236,325,930.41 1,251,024,026.76 1,251,024,026.76
Short-term loans 2,007,171,362.73 2,007,171,362.73 2,007,171,362.73
Notes payable
and accounts 400,693,157.47 400,693,157.47 400,693,157.47
payable
Other payables 541,399,822.67 541,399,822.67 541,399,822.67
Subtotal 2,949,264,342.87 2,949,264,342.87 2,949,264,342.87
4. Interest Rate Risk
The Company's interest rate risk mainly arises from bank loans. The financial liabilities at floating interest rates bring the
Company the interest rate risk on cash flow, while the financial liabilities at fixed interest rates bring the Company the interest rate
risk on fair value. The Company decides the relative proportion of fixed interest rate contracts and floating interest rate contracts
according to the current market environment.
As of December 31, 2018, the Company's interest-bearing liabilities under floating rate contracts denominated in RMB
amounted to RMB 78.5 million, and those under fixed rate contracts denominated in RMB amounted to RMB 1,359,215,080.91.
X. Disclosure of Fair Values
1. Fair values of assets and liabilities measured at fair value at the end of the period
Fair Values at the End of the Period
Item First Level Fair Second Level Third Level
Value Fair Value Fair Value Total
Measurement Measurement Measurement
I. Continuous fair value measurement
(I) Financial assets that are measured at fair
value and whose changes are included in 71,260,414.60 71,260,414.60
the current profits and losses
1. Trading financial assets 71,260,414.60 71,260,414.60
(1) Investment in debt Instruments
(2) Investment in equity instruments
(3) Derivative financial assets 71,260,414.60 71,260,414.60
Total assets continuously measured at 71,260,414.60 71,260,414.60
fair value
2. Basis for determining market prices of continuous and non-continuous first level fair value measurement items
Note: The Company makes offers for first level fair value measurement according to open contracts of the futures exchange.
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
XII. Related Parties and Related-Party Transactions
1. Parent Company of the Company
Registered Proportion of Proportion of
Capital Shares Held by Voting Power Held
Registered
Name of Parent Company Nature of Business Parent Company by Parent Company
Place (ten thousand in the Company in the Company
Yuan) (%) (%)
Investment
Beijing Grain Group Co. Ltd. Beijing 90,000.00 42.06 42.06
Management
Note: The ultimate controlling party of the Company is Beijing Capital Agribusiness Group Co., Ltd.
2. Subsidiaries of the Company
See 1. Equity in Subsidiaries under Section VIII of the Notes for details.
3. Joint Ventures and Affiliates of the Company
See 3. Equity in Joint Ventures or Affiliates under Section VIII of the Notes for details on major joint ventures or affiliates.
The information on other joint ventures or affiliates that have related party transactions with the Company in the current period
or have balances of related party transactions with the Company in the previous period is as follows:
Name of Joint Venture or Affiliate Relationship with the Company
Beijing Zhengda Feed Co., Ltd. Joint venture
SINOGRAIN (Tianjin) Warehousing Logistics Co., Ltd. Affiliate
4. Other Related Parties
Name of Other Related Party Relationship with the Company
Beijing Dahongmen Grain Purchasing & Storage Warehouse Controlled by the ultimate controlling party
Beijing Daxing National Grain Purchasing & Storage Warehouse Controlled by the ultimate controlling party
Beijing Southeast Suburb Grain Warehouse Controlled by the ultimate controlling party
Beijing Guchuan Fuxing Food Co., Ltd. Controlled by the ultimate controlling party
Beijing Guchuan Rice Industry Co., Ltd. Controlled by the ultimate controlling party
Beijing Guchuan Food Co., Ltd. Controlled by the ultimate controlling party
Beijing Hongyuanli Rations Supply Station Controlled by the ultimate controlling party
Beijing Jingliang Dacang Grain and Oil Trade Co., Ltd. Controlled by the ultimate controlling party
Beijing Jingliang Dagu Grain and Oil Trade Co., Ltd. Controlled by the ultimate controlling party
Beijing Jingliang E-commerce Co., Ltd. Controlled by the ultimate controlling party
Beijing Jingliang Dongfang Grain and Oil Trade Co., Ltd. Controlled by the ultimate controlling party
Beijing Jingliang Gurun Trade Co., Ltd. Controlled by the ultimate controlling party
Beijing Jingliang Biotechnology Industry Co., Ltd. Controlled by the ultimate controlling party
Beijing Jingliang Logistics Co., Ltd. Controlled by the ultimate controlling party
Beijing Jingliang Yunhe Grain and Oil Trade Co., Ltd. Controlled by the ultimate controlling party
Beijing Jingliang Real Estate Co., Ltd. Controlled by the ultimate controlling party
Beijing Jingmen Liangshi State-owned Asset Management Co., Ltd. Controlled by the ultimate controlling party
Beijing Juncheng Nuoyuan Grain and Oil Purchase and Sale Co., Ltd. Controlled by the ultimate controlling party
Beijing Lanfeng Vegetable Distribution Co., Ltd. Controlled by the ultimate controlling party
Beijing Grain Group Finance Co., Ltd. Controlled by the ultimate controlling party
Beijing Longde Business Management Co., Ltd. Controlled by the ultimate controlling party
Beijing Nanjiao Agricultural Production Management Co., Ltd. Controlled by the ultimate controlling party
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
Name of Other Related Party Relationship with the Company
Beijing Niannian Haohe Rations Supply Station Controlled by the ultimate controlling party
Beijing Sanyuan Petroleum Co., Ltd. Controlled by the ultimate controlling party
Beijing Sanyuan Seed Technology Co., Ltd. Feed Branch Controlled by the ultimate controlling party
Beijing Dahongmen Grain Purchasing & Storage Warehouse Co., Ltd. Controlled by the ultimate controlling party
Beijing Dahongmen Oil Plant Controlled by the ultimate controlling party
Beijing Haidian West Suburb Grain and Oil Supply Station Controlled by the ultimate controlling party
Beijing Jingcheng Auto Driving Technical School Controlled by the ultimate controlling party
Beijing Liangguan Grain and Oil Supply Station Controlled by the ultimate controlling party
Beijing Institute of Food Science Controlled by the ultimate controlling party
Beijing Longqing Xiadu Rations Supply Station Controlled by the ultimate controlling party
Beijing Maliandao Grain and Oil Special Supply Station Controlled by the ultimate controlling party
Beijing South Suburb Grain Purchasing & Storage Warehouse Controlled by the ultimate controlling party
Beijing Nanyuan Vegetable Oil Plant Controlled by the ultimate controlling party
Beijing Pinggu Grain and Oil Industry and Trade Co., Ltd. Controlled by the ultimate controlling party
Beijing Food Supply Department No. 34 Supply Section Controlled by the ultimate controlling party
Beijing Shunyi Grain and Oil Co., Ltd. Controlled by the ultimate controlling party
Beijing Tiangu Grain and Oil Trade Co., Ltd. Controlled by the ultimate controlling party
Supply Station of Beijing Tongzhou Grain and Oil Trading Company Controlled by the ultimate controlling party
Beijing Nouthwest Suburb Grain Warehouse Controlled by the ultimate controlling party
Beijing Northwest Suburb Grain Purchasing & Storage Warehouse Controlled by the ultimate controlling party
Beijing Sesame Oil Plant Controlled by the ultimate controlling party
Beijing Yonghe Xincheng Grain and Oil Supply Co., Ltd. Controlled by the ultimate controlling party
Beijing Assistant Rations Supply Station Controlled by the ultimate controlling party
Beijing Army Grain and Oil Supply Station Controlled by the ultimate controlling party
Beijing Shounong Animal Husbandry Development Co., Ltd. Controlled by the ultimate controlling party
Beijing Wuhuan Shuntong Supply Chain Management Co., Ltd. Controlled by the ultimate controlling party
Beijing Xingshishang Trade Center Controlled by the ultimate controlling party
Beijing Yuma Motor Vehicle Training Ground Co., Ltd. Controlled by the ultimate controlling party
Beijing Yuanjishun Rations Supply Station Controlled by the ultimate controlling party
Beijing Zhibohui Architectural Design Institute Co., Ltd. Controlled by the ultimate controlling party
Hebei Shounong Modern Agricultural Technology Co., Ltd. Controlled by the ultimate controlling party
Jingliang (Tianjin) E-commerce Co., Ltd. Controlled by the ultimate controlling party
Jingliang (Tianjin) Trade Development Co., Ltd. Controlled by the ultimate controlling party
Jingliang Huayuan (Beijing) Agricultural High-tech Co., Ltd. Controlled by the ultimate controlling party
Shandong Fukuan Bioengineering Co., Ltd. Controlled by the ultimate controlling party
China Integrated Research Center for Meat Products Controlled by the ultimate controlling party
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
5. Related-party Transactions
(1) Related-party transactions for purchase and sale of goods and provision and acceptance of labor services
① Purchase of goods and acceptance of labor services
Related-party
Related Party Current Amount Last Term Amount
Transaction
Beijing Guchuan Food Co., Ltd. Purchase of goods 17,173,511.19 16,826,139.99
Beijing Guchuan Rice Industry Co., Ltd. Purchase of goods 2,537,794.80 369,821.34
Beijing Jingliang E-commerce Co., Ltd. Purchase of goods 2,615,077.63
Shandong Fukuan Bioengineering Co., Ltd. Purchase of goods 1,287,901.32 978,017.54
Beijing Jingliang Dongfang Grain and Oil
Purchase of goods 221,825.63 230,892.20
Trade Co., Ltd.
Beijing Grain Group Co. Ltd. Purchase of goods 32,075.47
Note: The price of a related-party transaction shall be equal to the price charged for a unrelated-party transaction that is same as or
similar to such related-party transaction.
② Sale of goods/provision of labor services
Related-party
Related Party Current Amount Last Term Amount
Transaction
Beijing Jingliang Dacang Grain and Oil Trade Co.,
Sale of goods 20,288.29 378.38
Ltd.
Beijing Pinggu Grain and Oil Industry and Trade Co.,
Sale of goods 6,486.48 945.95
Ltd.
Beijing Tiangu Grain and Oil Trade Co., Ltd. Sale of goods 1,690.27
Beijing Nouthwest Suburb Grain Warehouse Sale of goods 6,477.88
Beijing Jingliang Dongfang Grain and Oil Trade Co.,
Sale of goods 6,365,528.55 6,210,157.05
Ltd.
Beijing Guchuan Food Co., Ltd. Sale of goods 2,568,946.46 5,415,514.73
Jingliang (Tianjin) E-commerce Co., Ltd. Sale of goods 112,739.62 86,230.93
Beijing Guchuan Rice Industry Co., Ltd. Sale of goods 617,148.71 1,699,989.56
Beijing South Suburb Grain Purchasing & Storage
Sale of goods 4,729.73
Warehouse
Beijing Northwest Suburb Grain Purchasing & Storage
Sale of goods 22,685.84
Warehouse
Beijing Jingliang E-commerce Co., Ltd. Sale of goods 6,553,286.58 28,818,146.97
Provision of labor
Beijing Jingliang E-commerce Co., Ltd. 12,309.25
services
Beijing Jingliang Logistics Co., Ltd. Sale of goods 1,351.35 1,679.75
Beijing Haidian West Suburb Grain and Oil Supply
Sale of goods 11,131,081.79 8,829,177.86
Station
Beijing Assistant Rations Supply Station Sale of goods 5,968,090.31 6,120,835.80
Beijing Army Grain and Oil Supply Station Sale of goods 4,051,022.07 4,164,074.71
Beijing Longqing Xiadu Rations Supply Station Sale of goods 589,538.05 669,425.63
Beijing Maliandao Grain and Oil Special Supply
Sale of goods 3,181,286.36 2,090,831.28
Station
Beijing Jingliang Real Estate Co., Ltd. Sale of goods 39,835.13 38,044.38
Supply Station of Beijing Tongzhou Grain and Oil
Sale of goods 751,542.68
Trading Company
Beijing Nanyuan Vegetable Oil Plant Sale of goods 12,793.80 3,410.61
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
Beijing Jingliang Gurun Trade Co., Ltd. Sale of goods 906.19
Beijing Grain Group Finance Co., Ltd. Sale of goods 2,068.97 19,666.44
Beijing Niannian Haohe Rations Supply Station Sale of goods 875,593.22
Beijing Institute of Food Science Sale of goods 7,884.24 144,945.40
Beijing Xingshishang Trade Center Sale of goods 6,837.84 6,964.84
Beijing Yuanjishun Rations Supply Station Sale of goods 66,666.67 685,368.72
Beijing Southeast Suburb Grain Warehouse Sale of goods 5,892.38
Beijing Jingliang Yunhe Grain and Oil Trade Co., Ltd. Sale of goods 254,714.16 168,394.31
Beijing Longde Business Management Co., Ltd. Sale of goods 19,819.20 29,248.18
Beijing Sesame Oil Plant Sale of goods 685.44
Beijing Hongyuanli Rations Supply Station Sale of goods 900,599.52 770,810.81
Beijing Guchuan Fuxing Food Co., Ltd. Sale of goods 347.27
Beijing Jingliang Dagu Grain and Oil Trade Co., Ltd. Sale of goods 88,822.07
Beijing Jingliang Biotechnology Industry Co., Ltd. Sale of goods 2,276.18
Beijing Jingmen Liangshi State-owned Asset
Sale of goods 2,863.64
Management Co., Ltd.
Beijing Juncheng Nuoyuan Grain and Oil Purchase
Sale of goods 2,066,703.52
and Sale Co., Ltd.
Beijing Lanfeng Vegetable Distribution Co., Ltd. Sale of goods 48,458.32
Beijing Nanjiao Agricultural Production Management
Sale of goods 6,954.55
Co., Ltd.
Beijing Sanyuan Petroleum Co., Ltd. Sale of goods 1,980.35
Beijing Sanyuan Seed Technology Co., Ltd. Feed
Sale of goods 6,115,726.92
Branch
Beijing Jingcheng Auto Driving Technical School Sale of goods 5,189.66
Beijing Liangguan Grain and Oil Supply Station Sale of goods
Beijing Food Supply Department No. 34 Supply
Sale of goods 951,982.83
Section
Beijing Shunyi Grain and Oil Co., Ltd. Sale of goods 35,808.62
Beijing Yonghe Xincheng Grain and Oil Supply Co.,
Sale of goods 791,985.23
Ltd.
Beijing Shounong Animal Husbandry Development
Sale of goods 12,883.33
Co., Ltd.
Beijing Capital Agribusiness Group Co., Ltd. Sale of goods 909.09
Beijing Wuhuan Shuntong Supply Chain Management
Sale of goods 102,800.01
Co., Ltd.
Beijing Yuma Motor Vehicle Training Ground Co.,
Sale of goods 4,077.59
Ltd.
Beijing Zhibohui Architectural Design Institute Co.,
Sale of goods 3,531.53
Ltd.
Hebei Shounong Modern Agricultural Technology Co.,
Sale of goods 7,127,624.97
Ltd.
China Integrated Research Center for Meat Products Sale of goods 6,605.64
Note: The price of a related-party transaction shall be equal to the price charged for a unrelated-party transaction that is same as or
similar to such related-party transaction.
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
(2) Related-party lease
① If the Company is the lessor,
Lease Income Recognized in Lease Income Recognized
Name of Lessee Type of Leased Asset
the Current Period in the Prior Period
Beijing Guchuan Food Co., Ltd. Housing 13,333,333.33 13,333,333.33
Beijing Jingliang E-commerce Co., Ltd. Vehicle leasing 18,839.83 21,760.00
① If the Company is the lessee,
Lease fee recognized in Lease fee recognized in
Name of Lessor Type of Leased Asset
the current period the prior period
Beijing Grain Group Co. Ltd. House leasing 2,141,034.06 3,733,554.40
Beijing Dahongmen Grain Purchasing &
Vehicles, housing 1,584,230.78 1,444,600.00
Storage Warehouse
Beijing Daxing National Grain Oil tank and office 1,918,363.64 2,110,200.00
Purchasing & Storage Warehouse leasing
Beijing Dahongmen Oil Plant Rent 320,754.72
Jingliang (Tianjin) Trade Development
House leasing 36,942.10
Co., Ltd.
(3) Related-party guarantee
① If the Company is the guarantor,
Whether the
Amount Effective
Guaranteed Party Due Date Guarantee Has
Guaranteed Date
Been Fulfilled
Maturity date of financing: September
30, 2019
The period of guarantee shall be 2
Beijing Jingliang Oil and Fat Co., Ltd. 200,000,000.00 June 1, 2017 No
years from the date of expiration of
the period in which the principal
creditor's right occurs
No guaranteed loan
September 6, The period of guarantee shall be 2
Beijing Jingliang Oil and Fat Co., Ltd. 100,000,000.00
2017 years from the date of expiration of No
the period in which the principal
creditor's right occurs
Maturity date: January 31, 2019
December 18, The period of guarantee shall be 2
Beijing Jingliang Oil and Fat Co., Ltd. 88,000,000.00
2017 years from the date of expiration of No
the period in which the principal
creditor's right occurs
Beijing Jingliang Oil and Fat Co., Ltd.
Jingliang (Tianjin) Grain and Oil Maturity date of financing: January
18, 2019, February 1, 2019, February
Industry Co., Ltd. 1,655,000,000.00 May 29, 2018
11, 2019, March 17, 2019, February No
Jingliang (Singapore) International 19, 2019 and March 21, 2019
Trade Co., Ltd.
The loan has been paid off;
The period of guarantee shall be 2
Jingliang (Hebei) Oil Industry Co., Ltd. 80,000,000.00 April 2, 2018 years from the date of expiration of Yes
the period in which the principal
creditor's right occurs
(4) Related-party loans at call
The Company has no related-party loans at call this year.
(5) Related-party assets transfer and debt restructuring
Related Party Related-party Transaction Current Amount Last Term Amount
Income from compensation
Beijing Sesame Oil Plant 2,963,947.53 13,192,806.89
for demolition
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
Income from compensation
Beijing Nanyuan Vegetable Oil Plant 9,090,908.89 9,522,943.45
for demolition
(6) Remuneration for key management staff
Unit: ten thousand yuan
Item Current Amount Last Term Amount
Remuneration for Key Management Staff 473.98 317.81
(7) Other related-party transaction
Related Party Related-party Transaction Current Amount Last Term Amount
Utilities, information
Beijing Jingliang Real Estate Co., Ltd. 31,530.33 70,095.28
network fees
Beijing Jingliang Dongfang Grain and Oil Trade Co., Income from trademark
11,722.64 11,407.08
Ltd. royalties
Beijing Dahongmen Grain Purchasing & Storage Power charge, telephone
88,985.50
Warehouse Co., Ltd. bill, etc.
Income from trademark
Beijing Guchuan Food Co., Ltd. 3,331,153.31 2,904,815.66
royalties
Income from trademark
Beijing Guchuan Rice Industry Co., Ltd. 370,863.21 422,670.75
royalties
Jingliang Huayuan (Beijing) Agricultural High-tech Co.,
Property fee 78,000.00
Ltd.
Beijing Capital Agribusiness Group Co., Ltd. Cost of transportation 18,867.92
Beijing Guchuan Food Co., Ltd. Service charge 66,742.77
Beijing Grain Group Co. Ltd. Interest expense 6,427,421.40
Beijing Grain Group Finance Co., Ltd. Interest expense 6,337,413.77
Corporate publicity
Beijing Grain Group Co. Ltd. 16,037.74
expenses
6. Related-party Receivables and Payables
(1) Receivables
Ending Balance Beginning Balance
Item Book Balance Provision for Book Balance Provision for Bad
Bad Debts Debts
Monetary funds
Beijing Grain Group Finance Co., Ltd. 98,494,825.91
Total 98,494,825.91
Receivables:
Beijing Guchuan Food Co., Ltd. 370,505.00 256,270.00
Beijing Jingliang E-commerce Co., Ltd. 146,333.80 265,224.00
Beijing Jingliang Dongfang Grain and Oil Trade Co.,
1,067,408.00 1,025,540.00
Ltd.
Beijing Haidian West Suburb Grain and Oil Supply
436,300.00 294,009.00
Station
Beijing Assistant Rations Supply Station 1,394,180.00 991,912.00
Beijing Liangguan Grain and Oil Supply Station 37,200.00 74,400.00
Jingliang (Tianjin) E-commerce Co., Ltd. 4,074.00
Total 3,456,000.80 2,907,355.00
Prepayments:
Beijing Dahongmen Grain Purchasing & Storage
1,679,284.63
Warehouse
Beijing Dahongmen Oil Plant 340,000.00
Total 2,019,284.63
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
Other receivables:
Jingliang (Hong Kong) International Trade Co., Ltd. 200.00
Total 200.00
Item Ending Balance Beginning balance
Short-term loans:
Beijing Grain Group Finance Co., Ltd. 280,000,000.00
Total 280,000,000.00
Payables:
Beijing Guchuan Food Co., Ltd. 211,309.09 531,374.78
Beijing Jingliang Dongfang Grain and Oil Trade Co., Ltd. 127.27
Shandong Fukuan Bioengineering Co., Ltd. 56,187.93
Total 267,624.29 531,374.78
Advance receipts:
Beijing Guchuan Rice Industry Co., Ltd. 11,988.00
Beijing Sanyuan Seed Technology Co., Ltd. Feed Branch 0.01
Total 11,988.01
Other payables:
Beijing Grain Group Co. Ltd. 561,790.30 187,162,049.99
Beijing Jingliang E-commerce Co., Ltd. 169,728.00 195,187.20
Jingliang Huayuan (Beijing) Agricultural High-tech Co.,
78,000.00
Ltd.
Beijing Dahongmen Oil Plant 47,025.76
Jingliang (Tianjin) Trade Development Co., Ltd. 38,789.20
Total 817,333.26 187,435,237.19
(2) Payables
7. Related-party Commitments
The Company has no related-party commitments this year.
XIII. Commitments and Contingencies
1. Major commitments
(1) Capital commitment
On December 21, 2018, the Company signed Agreement of Intent for Stock Acquisition with Wang Yuecheng. The Company
intends to acquire 25.2284% of the stock shares of Zhejiang Xiao Wang Zi Food Co., Ltd. by cash and issuing shares to purchase
assets. After the acquisition, the Company and its wholly-owned subsidiary Beijing Jingliang Food Co., Ltd. (hereinafter referred to
as "Jingliang Food") ultimately hold 95% of the stock shares of Target Company. Since Wang Yuecheng, the main counter party of
this transaction, became the vice-general manager of the Company, according to the relevant provisions of Rules of Shenzhen Stock
Exchange for Flotation of Shares (revised in 2018), it constitutes a related-party transaction of the Company. As of this financial
report date, the acquisition is in progress.
(2) Other commitments
1) Zhejiang Xiao Wang Zi Food Co., Ltd. (hereinafter referred to as "Zhejiang Xiao Wang Zi"), the holding subsidiary of the
Company, signed Animation Production Entrustment Contract with Jiangsu Kungfu Family Animation Co., Ltd. (hereinafter referred
to as "Kung Fu Family Animation") on December 1, 2016. According to the Contract, entrusted by Zhejiang Xiao Wang Zi, Kungfu
Family Animation should produce animation Little Prince and Potato Boy,, apply for project approval to the Radio, Film and
Television Bureau, handle the animation publishing license with relevant departments and complete production, publication and
commercial operation. According to the Contract, Zhejiang Xiao Wang Zi should pay a total animation production fee of RMB 45
million (including tax) according to the actual completion progress. As of December 31, 2018, it paid animation production fee of
RMB 13 million (including tax). This animation project was started in January 2017 and completed on July 18, 2018. The first 26
episodes were licensed on June 21, 2018, and the last 26 episodes were licensed on July 26, 2018. On August 7, 2018, it was first
broadcasted on YMKT TV at 17:10. As of December 31, 2018, it has been broadcasted on three platforms (YMKT TV, BTV KAKU
Children Channel, www.jiajiakt.com), local TV stations and network platforms.
2) The Supplement II to the Profits Compensation Agreement, which was considered and approved at the 7th meeting of the 8th
Board of Directors of the Company, stipulates that Beijing Jingliang Food Co., Ltd. (hereinafter referred to as "Jingliang Food
Company") has committed itself to realize the net profit of no less than RMB 130.1115 million in 2017, RMB 150.3937 million in
2018 and RMB 162.1605 million in 2019, respectively.
The actual net profit of Jingliang Food in the period of profit commitment should be calculated according to the following
criteria:
① The financial statements of Jingliang Food Company and its subsidiaries shall be prepared in accordance with Accounting
Standards for Business Enterprises, other laws and regulations and the Company's accounting policies and accounting estimates;
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
② Unless provided by the laws and regulations or the Company changes its accounting policies and accounting estimates, the
accounting policies and accounting estimates of Jingliang Food Company and its subsidiaries shall not be changed during the period
of profit commitment without the approval of the competent authority of Jingliang Food Company;
③ Net profit refers to the net profit attributable to the shareholders of parent company after deduction of the non-recurring
gains and losses from the consolidated financial statements. If any share-based payments stipulated in the Accounting Standards for
Business Enterprises occur before the completion of this transaction, the net profit for that year shall be equal to the net profit after
elimination of the influence of the above-mentioned share payments. The accumulated committed net profit and the accumulated
actual net profit for each year during the period of profit commitment of Jingliang Food Company shall also be respectively equal to
the accumulated committed net profit and the accumulated actual net profit after elimination of the influence of the above-mentioned
share payments.
3) On August 11, 2015, subsidiary Beijing Jingliang Food Co., Ltd. (hereinafter referred to as Jingliang Food Company) signed
the Framework Contract on Trading in Shares of Zhejiang Xiao Wang Zi Food Co., Ltd. and Related Transactions with Mr. Wang
Yuecheng and Zhejiang Xiao Wang Zi Food Co., Ltd. (hereinafter referred to as Zhejiang Xiao Wang Zi), stipulating that based on
the audited net profit of RMB 60.7498 million in 2014, Wang Yuecheng should commit that Zhejiang Xiao Wang Zi Food Co., Ltd.
will achieve a compound annual growth rate of not less than 10% and strive for 20% in the period of performance commitment
(including additional performance guarantee period), i.e. in 2015, 2016, 2017 and 2018 for four consecutive years.
Zhejiang Xiao Wang Zi calculates the amount of performance compensation according to the following criteria:
① Net profit compensation: Mr. Wang Yuecheng should ensure that the average annual net profit of Zhejiang Xiao Wang Zi is
not less than RMB 60.7498 million during the period of performance guarantee. If the sum of actual net profits for four years is less
than RMB 242.9992 million, Mr. Wang Yuecheng should compensate Zhejiang Xiao Wang Zi in cash by doubling the difference
between the sum of actual net profits for four years and RMB 242.9992 million.
② Compensation for growth: Mr. Wang Yuecheng should ensure that the sum of actual net profits of Zhejiang Xiao Wang Zi
for four years is not less than RMB 310.1339 million during the performance guarantee period, that is, RMB 66.8248 million in 2015,
73.5073 million in 2016, RMB 80.858 million in 2017 and RMB 88.9438 million in 2018. If the sum of actual net profits for four
years is less than RMB 310.1339 million, Mr. Wang Yuecheng should compensate Zhejiang Xiao Wang Zi in cash by the difference
between the sum of actual net profits for four years and RMB 310.1339 million.
③ Performance incentives: Jingliang Food Company agrees that if the sum of audited net profits of Zhejiang Xiao Wang Zi for
four years is more than 310.1339 million Yuan during the performance guarantee period, the performance-based award shall be
calculated accumulatively according to the different situations listed in the following table:
Unit: ten thousand yuan
Compound Average Growth Sum of Actual Net Profits for Four
Situation Performance-based Award: C
Rate: A Years: B
I. 10%≤A＜15% 31,013.39≤B＜34,884.84 C=(B-31,013.39)×30%
II. 15%≤A＜20% 34,884.84≤B＜39,132.64 C=(B-34,884.84)×40%+3,871.45×30%
C=(B-39,132.64) × 50%+4,247.80 × 40%+3,871.45 ×
III. A≥20% B≥39,132.64
30%
The above performance-based award should be given by Zhejiang Xiao Wang Zi to Mr. Wang Yuecheng and his management
team.
According to Framework Contract on Trading in Shares of Zhejiang Xiao Wang Zi Food Co., Ltd. and Related Transactions and
ItsSupplement signed among Jingliang Food Company, Mr. Wang Yuecheng and Zhejiang Xiao Wang Zi on June 18, 2016, the three
parties have agreed that the excess performance-based award when the performance commitment is fulfilled should be accrued by
Zhejiang Xiao Wang Zi and included into the Company's annual expenses. The actual operating performance determined by the
board of directors of Jingliang Food Company should be the sum of the net profit recognized by audit (after the excess
performance-based award is accrued) and the amount of excess performance-based award accrued (amount of expenses included) by
deduction of the deferred income tax assets that should be recognized on the amount of excess performance-based award. In addition,
the actual operating performance should be considered as the consideration base and gambling completion base for Jingliang Food
Company to calculate its acquisition of the remaining shares of Zhejiang Xiao Wang Zi in accordance with Framework Contract on
Trading in Shares of Zhejiang Xiao Wang Zi Food Co., Ltd.
2. Contingencies
As of December 31, 2018, the Company has no contingent liabilities that are Contingencies.
XIV. Events after the Balance Sheet Date
1. Major Non-Adjusting Events
As of the financial report date, the company has no important non-adjustment matters that need to be disclosed.
2. Distribution of Profits
On March 28, 2019, the 33rd meeting of the 8th board of directors of the Company approved that no profit distribution should
be made in 2018. The resolution still needs approval of the stockholders' meeting.
XV. Other Important Matters
1. Annuity Plan
On November 18, 2013, the controlling shareholder of Beijing Grain Group Co., Ltd. (hereinafter referred to as "BGG")
received Reply of the State-owned Assets Supervision and Administration Commission of the People's Government of Beijing
Municipality to the Establishment of Enterprise Annuity Plan of Beijing Grain Group Co., Ltd. (Beijing State-owned Asset [2013] No.
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
224), providing that BGG's Request for Reporting of Enterprise Annuity (BGG Enterprise [2013] No. 258) complies with the
requirements of Provisional Measures for Trial Implementation of Enterprise Annuity (Decree No. 20 of the Ministry of Labor and
Social Security) and Guiding Opinions for the Trial Implementation of Enterprise Annuity System by State-owned Enterprises in
Beijing (Beijing State-owned Asset Audit [2006] No. 77) and approving that the supplementary old-age insurance and various
commercial insurance established by the Company before the implementation of the annuity plan should be terminated automatically
and all employees who have participated in the annuity plan will no longer enjoy social benefits outside of overall planning after
retirement.
On November 20, 2013,BGG received Reply to the Filing of Annuity Plan of Beijing Grain Group Co., Ltd. (Xicheng Human &
Social [2013] No. 71) from Beijing Xicheng District Human Resources and Social Security Bureau, requesting that BGG should
strictly implement payment scope and standards and relevant democratic procedures stipulated in the plan and actively cooperate in
supervision and inspection of relevant departments after filing.
On March 14, 2014, the Company obtained the Certificate of Enterprise Annuity Participation Plan from Ping An Pension
Insurance Co., Ltd. The details on the Certificate is listed as follows:
The Company's basic information: Name of Enterprise: Beijing Jingliang Food Co., Ltd.; Enterprise Annuity No.:
C0156482005; the Time of Participation Plan: November 18, 2013; Effective Time of the Plan: March 13, 2014; Plan No. of the
Superior Enterprise: C0156482000; Name of the Superior Enterprise: Beijing Jingliang Food Co., Ltd.
Basic information of Annuity Plan: Name of the Plan: Ping An-CITIC Splendid Life Enterprise Annuity Plan; Trustee and
Account Manager: Ping An Pension Insurance Co., Ltd; Trustee: CHINA CITIC BANK CORPORATION LIMITED; Annuity Plan
Registration No.: 99JH20120041; Annuity Plan No.: P0807; Plan Type: Collective Plan.
Portfolio: Portfolio Code: 9155; Name of Portfolio: Ping An-CITIC Splendid Life Bond Enhanced Portfolio; Investment
Proportion: 100%; Investment Manager: CITIC Securities Co., Ltd.
2. Information on Divisions
(1) Basis of determination and accounting policies for reporting of divisions
The Company's businesses consist of food processing, oil and grease and so on according to its internal organizational structure,
management requirements and internal reporting system. The Company's management regularly evaluates the operating results of
these divisions to determine the allocation of resources to them and evaluate their performance. The information reported by
divisions should be disclosed according to the accounting policies and measurement standards adopted by such divisions when they
are reporting to the management. These measurement bases should be consistent with the accounting and measurement bases for
preparation of financial statements.
(2) Reporting of the financial information on divisions
Other Offset Among
Item Food Processing Oil & Grease Total
Dvisions
operating income 890,987,143.21 6,710,036,021.83 54,839,940.19 -246,738,801.82 7,409,124,303.41
operating costs 612,079,134.38 6,356,277,626.57 12,564,164.32 -235,605,717.15 6,745,315,208.12
Operating profit 155,081,646.63 123,199,419.11 71,956,090.71 -97,681,781.49 252,555,374.96
Net profit attributable to
120,963,155.45 92,690,147.06 89,081,020.29 -134,777,741.65 167,956,581.15
parent company
Total assets 914,206,851.82 2,834,354,132.55 5,401,447,974.63 -4,232,859,962.72 4,917,148,996.28
Total liabilities 204,450,269.30 1,599,891,547.43 1,063,824,011.22 -790,083,326.12 2,078,082,501.83
3. Other
（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) The 30th meeting of the 8th board of directors of the Company held on November 27, 2018 considered and adopted
Proposal for Acquiring Part of Stock Rights of Subsidiary Jingliang Rural Complex Construction and Operations (Xinyi) Co., Ltd.,
stipulating that Company should acquire 6% of the equity of Jingliang Rural Complex Construction and Operations (Xinyi) Co., Ltd.
held by Shizhu Tujia Autonomous County Yujinzhu Agricultural Partnership (General Partnership). After the transfer of shares is
completed, the Company should hold 51% of the equity of Jingliang Rural Complex Construction and Operations (Xinyi) Co., Ltd.
（3）As of this financial report date, due to the problem of staff resettlement, the formalities for transfer of equity in Hainan
Zhujiang Property Hotel Management Co., Ltd. have not been completed. According to the Asset Delivery Agreement, all rights and
obligations under the transferred assets shall be enjoyed and assumed by the undertaker without the influence from the formalities for
transfer of property rights. Therefore, the Company judges that this event will not have a significant adverse impact on itself.
XVI. Notes to Main Financial Statement Items of Parent Company
1. Notes Payable and Receivables
Item Ending Balance Beginning Balance
Notes receivable
Receivables 79,986.00 109,389.00
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
Total 79,986.00 109,389.00
(1) Receivables
①Classification and disclosure of receivables
Ending Balance
Book Balance Provision for Bad Debts
Category
Proportion Proportion of Book Value
Amount Amount
(%) Provision (%)
Receivables with individual significant
amounts and individual provisions bad debts
Receivables with provision for bad debts
based on portfolios of credit risk
characteristics
Including: aging combination 126,420.00 46,434.00 79,986.00
Combined Total 126,420.00 100.00 46,434.00 36.73 79,986.00
Receivables with no individual significant
amounts but with individual provisions bad
debts
Total 126,420.00 100.00 46,434.00 ---- 79,986.00
(Continued)
Beginning Balance
Book Balance Provision for Bad Debts
Category
Proportion Proportion of Book Value
Amount Amount
(%) Provision (%)
Receivables with individual significant
amounts and individual provisions bad debts
Receivables with provision for bad debts
based on portfolios of credit risk
characteristics
Including: aging combination 126,420.00 17,031.00 109,389.00
Combined Total 126,420.00 100.00 17,031.00 13.47 109,389.00
Receivables with no individual significant
amounts but with individual provisions bad
debts
Total 126,420.00 100.00 17,031.00 ---- 109,389.00
A. Portfolio of receivables with provision for bad debts according to aging analysis method
Ending Balance
Aging Proportion of Provision
Receivables Provision for Bad Debts
(%)
Within one year
Including: within the credit period 0
Credit period to one year 2
1 to 2 years 3,000.00 150.00 5
2 to 3 years 51,420.00 10,284.00 20
3 to 4 years 72,000.00 36,000.00 50
4 to 5 years 80
Above five years 100
Total 126,420.00 46,434.00 ----
(Continued)
Beginning Balance
Aging Proportion of Provision
Receivables Provision for Bad Debts
(%)
Within one year
Including: within the credit period 0
Credit period to one year 3,000.00 60.00 2
1 to 2 years 51,420.00 2,571.00 5
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
2 to 3 years 72,000.00 14,400.00 20
3 to 4 years 50
4 to 5 years 80
Above five years 100
Total 126,420.00 17,031.00 ----
②Provision for bad debts accrued, recovered or reversed in the current period
The releasing provision for bad debts in the current period is RMB 29,403.00.
③Top five ending balances of the receivables classified by debtor
The sum of top five balances of the receivables classified by debtor was RMB 126,420.00, accounting for 100% of the total
ending balance of the receivables, and the total ending balance of corresponding provision for bad debts was RMB 46,434.00.
Ending Balance of Proportion of the Total Ending Ending Balance of
Name of Debtor
Receivables Balance of Receivables (%) Provision for Bad Debts
Hainan Zhujiang Pipe Co., Ltd. 126,420.00 100.00 46,434.00
Total 126,420.00 100.00 46,434.00
2. Other Receivables
Item Ending Balance Beginning Balance
Other receivables 227,353.10 60,576,292.62
Interest receivable
Dividends receivable
Total 227,353.10 60,576,292.62
(1) Other receivables
①Classification and disclosure of other receivables
Ending Balance
Book Balance Provision for Bad Debts
Category
Proportion Proportion of Book Value
Amount Amount
(%) Provision (%)
Other receivables with individual significant
amounts and individual provisions bad debts
Other receivables with provision for bad
debts based on portfolios of credit risk
characteristics
Including: aging combination 281,502.34 54,149.24 227,353.10
Combined Total 281,502.34 100.00 54,149.24 19.24 227,353.10
Receivables with no individual significant
amounts but with individual provisions bad
debts
Total 281,502.34 100.00 54,149.24 ---- 227,353.10
(Continued)
Beginning Balance
Book Balance Provision for bad debts
Category
Proportion Proportion of Book Value
Amount (%) Amount Provision (%)
Other receivables with individual significant amounts
and individual provisions bad debts
Other receivables with provision for bad debts based
on portfolios of credit risk characteristics
Including: aging combination 63,754,181.75 3,177,889.13 60,576,292.62
Combined Total 63,754,181.75 100.00 3,177,889.13 4.98 60,576,292.62
Receivables with no individual significant amounts
but with individual provisions bad debts
Total 63,754,181.75 100.00 3,177,889.13 ---- 60,576,292.62
A. Portfolio of other receivables with provision for bad debts according to aging analysis method
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
Ending Balance
Aging
Other receivables Provision for bad debts Proportion of Provision (%)
Within one year
Including: within the credit period 24,040.24 0.00 0
Credit period to one year 207,462.10 4,149.24 2
1 to 2 years 5
2 to 3 years 20
3 to 4 years 50
4 to 5 years 80
Above five years 50,000.00 50,000.00 100
Total 281,502.34 54,149.24 ----
(Continued)
Beginning Balance
Aging
Other receivables Provision for Bad Debts Proportion of Provision (%)
Within one year
Including: within the credit period 2,122.90 0
Credit period to one year 1,573,793.63 31,475.87 2
1 to 2 years 62,128,265.22 3,106,413.26 5
2 to 3 years 20
3 to 4 years 50
4 to 5 years 50,000.00 40,000.00 80
Above five years 100
Total 63,754,181.75 3,177,889.13 ----
②Provision for bad debts accrued, recovered or reversed in the current period
The releasing provision for bad debts in the current period is RMB - 3,123,739.89.
③Classification of other receivables by nature of payment
Nature of Payment Ending Book Balance Beginning Book Balance
Pretty cash (for employees, departments) 207,462.10 182,904.46
Other accounts 63,517,970.62
Receivables for employees 24,040.24 3,306.67
Other accounts 50,000.00 50,000.00
Total 281,502.34 63,754,181.75
3. Long-term Equity Investment
(1) Classification of long-term equity investment
Ending Balance Beginning Balance
Item Provision for Provision for
Book Balance Book Value Book Balance Book Value
Impairment Impairment
Investment in
2,375,639,964.05 2,375,639,964.05 2,336,639,964.05 2,336,639,964.05
subsidiaries
Investment in joint
ventures and affiliates
Total 2,375,639,964.05 2,375,639,964.05 2,336,639,964.05 2,336,639,964.05
(2) Investment in subsidiaries
Current Ending Balance of
Beginning Current Current Ending
Invested Entity Provision for Provision for
Balance Increase Decrease Balance
Impairment Impairment
Beijing Jingliang
2,336,639,964.05 2,336,639,964.05
Food Co., Ltd.
Hainan Jingliang Holdings Co., Ltd. Annual Report 2018
Jingliang Rural
Complex
Construction and 13,500,000.00 13,500,000.00
Operations (Xinyi)
Co., Ltd.
Jingliang
(Caofeidian)
Agricultural 25,500,000.00 25,500,000.00
Development Co.,
Ltd.
Total 2,336,639,964.05 39,000,000.00 2,375,639,964.05
4. Operating income and operating costs
Current Amount Last Term Amount
Item
Income Cost Income Cost
Other businesses 2,857.14 302,436.60
Total 2,857.14 302,436.60
5. Investment income
Item Current Amount Last Term Amount
Income from long-term equity investment accounted by the equity
-1,070,860.45
method
Income from disposal of long-term equity investment 75,820,000.00
Total 74,749,139.55
XVII. Additional Information
1. Statement of Current Non-recurring Gains and Losses
Item Amount Description
Profit and loss from disposal of non-current assets -367,796.13
Government subsidies included into the current profits and losses (closely related to the
Company's businesses, except for those that should be enjoyed in accordance with national 3,607,987.97
unified standard quota or fixed quantity)
Profit or loss arising from fair value changes due to trading financial assets and trading
financial liabilities, and investment income from disposal of trading financial assets, trading
22,651,089.46
financial liabilities and available-for-sale financial assets, except for the effective hedging
business related to the Company's normal business activities.
Other non-operating income and expenditure other than the above items 24,754,455.18
Subtotal 50,645,736.48
Change in income tax -6,260,509.66
Change in minority shareholder's equity (after tax) -3,853,822.87
Total 40,531,403.95
Note: For the figures in the non-recurring profit and loss items, “+” indicates profit and income, and “-” indicates loss or
expenditure.
2. Return on Equity and Earnings per Share
Weighted Return on EPS
Current Profit
Average Equity (ROAE) Basic EPS Diluted EPS
Net profit attributable to the Company's common shareholders 7.69 0.24 0.24
Net profit attributable to common shareholders after deduction of
5.83 0.19 0.19
non-recurring gains and losses
Hainan Jingliang Holdings Co., Ltd.
March 30, 2019
