Hainan Jingliang Holdings Co., Ltd. Annual Report 2017 (Abstract)
Stock Code: 000505, 200505 Stock Name: JLKG, JL-B Announcement No.: 2018-021
HAINAN JINGLIANG HOLDINGS CO., LTD.
ANNUAL REPORT 2017 (ABSTRACT)
Part I Important Notes
This Abstract is based on the full text of the Annual Report of Hainan Jingliang Holdings Co., Ltd. (together with
its consolidated financial report and subsidiaries, the “Company”, except where the context otherwise requires). In
order for a full understanding of the Company’s operating results, financial condition and future development
planning, investors should carefully read the full text which has been disclosed together with this Abstract on the
media designated by the China Securities Regulatory Commission (the “CSRC”).
This Abstract has been prepared in both Chinese and English. Should there be any discrepancies or
misunderstandings between the two versions, the Chinese version shall prevail.
All the Company’s Directors have attended in person the Board meeting for the review of this Report.
No-standard auditor’s modified opinion:
□ Applicable √ Not applicable
Proposal on cash and/or share dividend, and capital reserve transferred into share capital for common shareholders
for the Reporting Period, which has been considered and approved by the Board:
□ Applicable √ Not applicable
The Company plans not to distribute cash or share dividend and transfer capital reserve into share capital for the
Reporting Period.
Proposal on cash and/or share dividend for preferred shareholders for the Reporting Period, which has been
considered and approved by the Board:
□ Applicable √ Not applicable
Part II Company Profile
1. Stock Profile
Stock name JLKG, JL-B Stock symbol 000505, 200505
Stock exchange Shenzhen Stock Exchange
Contact information Board Secretary Securities Representative
Name Zhao Yinhu
Office address Jing Liang Building, No. 16 East Third Ring
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Hainan Jingliang Holdings Co., Ltd. Annual Report 2017 (Abstract)
Middle Road, Chaoyang District, Beijing
Fax 010-51672010
Tel. 010-51672029
E-mail address 593374748@qq.com
2. Brief Introduction to Main Business Scope or Products in Reporting Period
During the Reporting Period, the Company completed a significant asset restructuring, and its main business
scope has changed from real estate development, resort hotel operation and property management to vegetable oil
processing, food production and land restoration. It runs its oils and oilseeds processing and trading business
primarily in Beijing City, Tianjin City and Hebei Province under the brands of “Gu Chuan”, “Lv Bao”, “Gu Bi”,
“Huo Niao” and “Tian Yi”, with the main products being soybean oil, rapeseed oil, sunflower seed oil and sesame
oil and paste, among others. As for its food production business, it primarily develops, produces and markets
snack food and bread under the brands of “Xiaowangzi”, “MS Dong”, “Jianqiang De Tudou” and “Gu Chuan”,
among others, with the main products being potato chips, cakes and pastries and bread.
In 2017, under a market environment that oil and oilseed prices fell sharply in the first half of the year and
fluctuated low in the second half of the year, in its oils and oilseeds business division, the Company made
innovation in operation mode, optimization in product structure and enhancement in fine management. A total of
1.6777 million tons of oils and oilseeds were sold during the Reporting Period, generating revenue of RMB6.587
billion (a 29.78% year-over-year increase) with net income attributable to the Company (as the parent company)
before non-recurring gains and losses being RMB80.55 million (a 21.64% year-over-year increase). Firstly, new
breakthroughs in oil processing were achieved. In terms of oil processing, the Company focused on lean
management by means of 6s, comprehensive budget management, risk prevention and control system construction
to comprehensively enhance the operation level, keep improving quality and efficiency. The annual processing
volume exceeded 1 million tons with an operation rate of 83.33%, being at the forefront of the industry. Secondly,
brand product structure was gradually optimized. The series of brands including “Gu Chuan”, “Lv Bao”, “Gu Bi”,
“Huo Niao” and “Tian Yi” focusing on high value-added products promote continuous optimization of product
structure.. The Company increased produce R&D, gathered marketing resources and strengthened assessment
incentives, and thus achieved substantial growth in sales of high value-added products such as sesame oil,
rapeseed oil and flax seed oil, etc., of which sales of sesame oil increased by 23.18% year-on-year. Thirdly, steady
progress had been made in the trade reserve. In terms of oil and oilseeds trade, the Company adhered to the sales
model of combination of futures trading and actual transactions strengthened market judgment, made innovation
in operation and prevented business risks, thus achieved an annual trade volume of oils and oilseeds amounted to
424,000 tons, an increase of 59.81% year-over-year, covering more than 12 varieties such as soybean, rapeseed oil
and flaxseed. Regarding oil reserve, the Company adhered strictly to the rules and regulations and strengthened
the standardized management. There were no accidents throughout the year, and 60,000 tons of storage was
successfully completed in-out-stock.
In 2017, facing the adverse conditions of fierce competition in the end market and rising price on raw and
auxiliary materials in its food processing business, the Company got over both internal and external difficulties,
2
Hainan Jingliang Holdings Co., Ltd. Annual Report 2017 (Abstract)
achieving sales revenue of RMB829 million for the year (a year-over-year increases of 5.73%) with net income
attributable to the Company (as the parent company) before non-recurring gains and losses being RMB70.6663
million (a 50.08% year-over-year increase). Firstly, the snack food business maintained a rapid growth. In terms
of snack food business, the Company adhered to the development model of “Differentiated Asymmetric
Competitive Strategy” and “Professional Manufacturing + Cultural Innovation + Internet Gene”, focusing on the
three major categories of potato, puffed food and pastry. This business division centered on product R&D,
intensified fine management and laid stress on channel expansion, and thus achieved annual sales revenue of
RMB771 million, an increase of 5.47% year-over-year. The Company owned 1,470 clients with a reasonable
layout including comprehensive channels, terminal channels, circulation channels and special channels to sell
products to all regions in the country. The sales revenue of main products "MS Dong" and "Jianqiang De Tudou"
accounted for 32.7% of the total sales revenue, playing a significant role in strategic driving effect. The newly
introduced "Dai Bu’Er", "12 Constellations" and "Daily Walnut" also won a good market response with a sales
revenue accounting for 29% of the total, playing an important role in stimulating the market. Secondly, the bread
processing business was ready for expansion. The Company actively expanded the retail market of bread business
and enriched the product structure to reversed the downward trend in previous years, and sales in KFC and retail
channels increased by 8.5% and 44% respectively, building a base for the next step, that is, on the one hand, the
cooperation with the Wumart Group in capital level entered the substantive stage. The two parties had signed a
strategic cooperation agreement, and the bread products would be available for sale in the 350 stores of Wumart in
Beijing. On the other hand, the expansion of the baking industry would be carried out in an orderly manner, and
stores would be opened in Tianjin and Beijing. Moreover, the ERP system and institutional mechanisms would be
established for standardization.
On December 13, 2017, the Board of Directors of the Company convened the 22nd meeting of the 8th session to
discuss and approve the “Proposal on Signing Project Cooperative Agreements and Launching Projects for Land
Rehabilitation and Agricultural Industrialization”, and the Company began to get involved in the field of land
restoration. In 2017, the Central No. 1 Document “The Central Committee of the Communist Party of China and
the State Council’s Opinions on Deepening the Structural Supply Side Reform on Agriculture and Accelerating
the New Development of Agriculture and Rural Area” clearly clarified that “the increased cultivated land by land
remediation is allowed to be adjusted within the province as an indicator of compensatory balance for
supplementing cultivated land, and the gains from the adjustment of the targets can be obtained according to
regulations or contracts”. The Company cooperates with the government and professional land remediation
companies to start with compensatory balance indicators, which can guarantee stable profits and rapid entry into
the field of land restoration, building a base for the next step in the expansion of the land restoration industry
chain.
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Hainan Jingliang Holdings Co., Ltd. Annual Report 2017 (Abstract)
3. Key Financial Information
(1) Key Financial Information of Past Three Years
Indicate by tick mark whether there is any retrospectively restated data in the table below.
√ Yes □ No
Reasons for retrospective restatements:
Business merger under the same control.
Unit: RMB
2017-over-2
2016 2015
2017 016 change
Before Restated Restated Before Restated
Sales revenue 7,917,639,044.13 969,140,915.32 8,723,491,657.31 -9.24% 267,068,750.88 13,959,307,849.28
Net income
attributable to
129,603,167.36 73,300,570.54 197,319,239.01 -34.32% -107,573,743.92 -20,028,834.34
shareholders of
the listed company
Net income
attributable to
shareholders of
the listed company 63,818,849.21 -134,994,571.34 -72,109,287.22 225.52% -237,953,658.00 -236,415,787.81
before
nonrecurring gains
and losses
Net cash flows
from operating -1,379,507,779.66 257,914,814.62 948,330,160.14 -245.47% 259,599,625.38 1,052,914,971.80
activities
Basic earnings per
share 0.2 0.17 0.31 -35.48% -0.25 -0.03
(RMB/share)
Diluted earnings
per share 0.2 0.17 0.31 -35.48% -0.25 -0.03
(RMB/share)
Weighted average
return on equity 5.01% 0.00% 6.96% -1.95% 0.00% 0.00%
(%)
Change of
December
31, 2017
December 31, December 31, 2016 December 31, 2015
over
2017 December
31, 2016
Before Restated Restated Before Restated
Total assets 6,082,383,851.23 1,385,469,635.17 5,007,343,324.00 21.47% 1,714,444,000.65 6,921,922,664.53
Equity attributable
to shareholders of 2,101,342,683.37 65,088,302.88 1,383,081,876.55 51.93% -217,136,869.15 984,066,397.14
the listed company
Notes: ① Sales revenue of 2016 is higher than that of 2017 primarily because the sales revenue of January-May
2016 includes revenue of RMB1.865 billion from the grain trading business (transferred at the end of May 2016)
and there was no such business in the current period.
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Hainan Jingliang Holdings Co., Ltd. Annual Report 2017 (Abstract)
② Net income attributable to shareholders of the listed company of 2017 is lower than that of 2016 primarily
because the Company earned net income of RMB152.85 million in 2016 from disposal of its equity investments in
Heilongjiang Longshi Pearl River Media Co., Ltd. and Days Hotel & Suites Sanya Resort as well as three villas in
Sanya City, Hainan Province.
③ Cash used in operating activities is of a large amount because in the oil and oilseed business, the Company
purchased a large quantity of soybeans in the international market at the end of 2017 according to its production
and operation plan for 2018, which had been made upon careful analyses on the international and domestic
markets.
(2) Key Financial Information by Quarter
Unit: RMB
Q1 Q2 Q3 Q4
Sales revenue 1,545,437,876.41 1,737,124,400.52 2,232,700,520.70 2,402,376,246.50
Net income attributable to
29,668,391.83 30,000,740.02 42,164,080.63 27,769,954.88
shareholders of the listed company
Net income attributable to
shareholders of the listed company
13,757,116.56 18,420,025.56 10,579,084.33 21,062,622.76
before nonrecurring gains and
losses
Net cash flows from operating
-124,811,091.49 -564,681,487.32 -305,046,738.32 -384,968,462.53
activities
Indicate by tick mark whether any of the financial data in the table above or their summations differs materially
from what have been disclosed in the Company’s quarterly or semi-annual reports.
□ Yes √ No
4. Share Capital and Shareholder Information
(1) Numbers of Common Shareholders and Preferred Shareholders with Resumed Voting Rights as well as
Shareholdings of Top 10 Shareholders
Unit: share
Preferred
Common Preferred
shareholders with
Common shareholders at shareholders
resumed voting
shareholders at 30,241 month-end prior 33,650 with resumed 0 0
rights at month-end
period-end to disclosure of voting rights at
prior to disclosure of
this Report period-end
this Report
Top 10 shareholders
Shareholding Pledged or frozen shares
Name of Nature of
percentage at Shares Restricted shares
shareholder shareholder Status Shares
period-end (%)
BEIJING
State-owned
GRAIN
juridical 42.06% 288,439,561 164,877,598
GROUP CO.,
person
LTD.
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Hainan Jingliang Holdings Co., Ltd. Annual Report 2017 (Abstract)
BEIJING
STATE-OWNE
D CAPITAL State-owned
OPERATION juridical 7.07% 48,510,460 48,510,460
AND person
MANAGEMEN
T CENTER
CHINA
DEVELOPME State-owned
NT BANK juridical 3.33% 22,828,451 22,828,451
CAPITAL CO., person
LTD.
GOLD
BUFFALO
Domestic
RUNYING
non-state-ow
(TIANJIN) 3.33% 22,828,451 22,828,451
ned juridical
EQUITY
person
INVESTMENT
FUND (L.P.)
Foreign
LI SHERYN
natural 3.30% 22,620,168 0
ZHAN MING
person
Domestic
MEI
natural 0.38% 2,597,803 0
JIANYING
person
Domestic
XU ZHEN natural 0.37% 2,518,300 0 Frozen 1,550,000
person
Domestic
ZHANG
natural 0.28% 1,949,250 0
XIAOXIA
person
Domestic
WANG
natural 0.27% 1,836,500 0
XIAOXING
person
Domestic
ZHONG YI natural 0.25% 1,730,083 0
person
Beijing State-Owned Capital Operation And Management Center owns 100% of Beijing Grain
Related or acting-in-concert
Group Co., Ltd., and Beijing Grain Group Co., Ltd. is a shareholder of the Company (a 42.06%
parties among shareholders
holding). Apart from that, the Company does not know whether there are any other related parties or
above
acting-in-concert parties among the top 10 shareholders.
1. Shareholder Wang Xiaoxing holds 1,836,500 shares in the Company through his account of
Shareholders conducting collateral securities for margin trading in Soochow Securities Co., Ltd.
securities margin trading (if
any) 2. Shareholder Zhong Yi holds 1,730,083 shares in the Company through his account of collateral
securities for margin trading in Fortune Securities Co., Ltd.
(2) Number of Preferred Shareholders and Shareholdings of Top 10 of Them
No preferred shareholders in the Reporting Period.
(3) Ownership and Control Relations between Actual Controller and the Company
State-owned Assets Supervision and
Administration Commission of People’s
Government of Beijng Municipality
100%
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Hainan Jingliang Holdings Co., Ltd. Annual Report 2017 (Abstract)
Beijing Grain Group Co., Ltd.
42.06%
Hainan Jingliang Holdings Co., Ltd.
5. Corporate Bonds
The Company has no corporate bonds publicly offered and listed on the stock exchange, which were undue before
the date of this Report’s approval or were due but could not be redeemed in full.
Part III Company Performance Discussion and Analysis
1. Business Review for Reporting Period
(1) Overall Performance
In face of the increasingly unfavorable market and industry environments, the Company pursued progress amid
stability. For 2017, the Company recorded sales revenue of RMB7.918 billion, with net income attributable to its
shareholders being RMB129.6 million and earnings per share RMB0.20. By operating division, the oils division
generated sales revenue of RMB6.587 billion (a 29.78% year-over-year increase) with net income attributable to
the Company (as the parent company) before non-recurring gains and losses being RMB80.55 million (a 21.64%
year-over-year increase); and the food processing division generated sales revenue of RMB829 million (a
year-over-year increases of 5.73%) with net income attributable to the Company (as the parent company) before
non-recurring gains and losses being RMB70.6663 million (a 50.08% year-over-year increase).
Beijing Jingliang Food Co., Ltd., a swapped-in asset of the Company, registered sales revenue of RMB7.453
billion and net income attributable to the Company (as the parent company) before non-recurring gains and losses
of RMB0.157 billion, over-fulfilling its 2017 annual income commitment of RMB0.13 billion.
(2) Major Work Done
① Successful completion of reorganization
After the hard work of the reorganized parties, the reorganization of the Company and Beijing Grain Group was
completed successfully. On July 31, 2017, the Company received the “Approval of Permitting Hainan Pearl River
Holdings Co., Ltd. to Purchase Assets of Beijing Grain Group Co., Ltd. and Raise Supporting Funds by Issuing
Shares” (CSRC Approval [2017] No. 1391). On September 30, 2017, major asset swaps were completed, in which
100% of purchased assets were placed into listed companies and 93.46% of the sales of assets were completed. On
November 15, 2017, the issuance of shares for asset purchase and supporting funds raise were completed.
② Steady growth of oils and oilseeds business
Under a market environment that oil and oilseed prices fell sharply in the first half of the year and fluctuated low
7
Hainan Jingliang Holdings Co., Ltd. Annual Report 2017 (Abstract)
in the second half of the year, in its oils and oilseeds business division, the Company made innovation in
operation mode, optimization in product structure and enhancement in fine management. A total of 1.6777 million
tons of oils and oilseeds were sold during the Reporting Period, generating revenue of RMB6.587 billion (a
29.78% year-over-year increase) with net income attributable to the Company (as the parent company) before
non-recurring gains and losses being RMB80.55 million (a 21.64% year-over-year increase). Firstly, new
breakthroughs in oil processing were achieved. In terms of oil processing, the Company focused on lean
management by means of 6s, comprehensive budget management, risk prevention and control system construction
to comprehensively enhance the operation level, keep improving quality and efficiency. The annual processing
volume exceeded 1 million tons with an operation rate of 83.33%, being at the forefront of the industry. Secondly,
brand product structure was gradually optimized. The series of brands including “Gu Chuan”, “Lv Bao”, “Gu Bi”,
“Huo Niao” and “Tian Yi” increased product R&D focusing on high value-added products. The Company
gathered marketing resources and strengthened assessment incentives to promote continuous optimization of
product structure, and thus achieved substantial growth in sales of high value-added products such as sesame oil,
rapeseed oil and flaxseed oil, etc., of which sales of sesame oil increased by 23.18% year-over-year. Thirdly,
steady progress had been made in the trade reserve. In terms of oil and oilseed trade, the Company adhered to the
sales model of combination of futures trading and actual transactions strengthened market judgment, made
innovation in operation and prevented business risks, thus achieved an annual trade volume of oils and oilseeds
amounted to 424,000 tons, an increase of 59.81% year-over-year, covering more than 12 varieties such as soybean,
rapeseed oil and flaxseed. Regarding oil reserve, the Company adhered strictly to the rules and regulations and
strengthened the standardized management. There were no accidents throughout the year, and 60,000 tons of
storage was successfully completed in-out-stock.
③ Rapid development of food processing business
Facing the adverse conditions of fierce competition in the end market and rising raw and auxiliary materials in its
food processing business, the Company got over both internal and external difficulties, achieving sales revenue of
RMB829 million for the year (a year-over-year increases of 5.73%) with net income attributable to the Company
(as the parent company) before non-recurring gains and losses being RMB70.6663million (a 50.08%
year-over-year increase). Firstly, the snack food business maintained a rapid growth. In terms of snack food
business, the Company adhered to the development model of “Differentiated Asymmetric Competitive Strategy”
and “Professional Manufacturing + Cultural Innovation + Internet Gene”, focusing on the three major categories
of potato, puffed food and pastry. This business division centered on product R&D, intensified fine management
and laid stress on channel expansion, and thus achieved annual sales revenue of RMB771 million, an increase of
5.47% year-over-year. The Company owned 1,470 clients with a reasonable layout including comprehensive
channels, terminal channels, circulation channels and special channels to sell products to all regions in the country.
The sales revenue of main products "MS Dong" and "Jianqiang De Tudou" accounted for 32.7% of the total sales
revenue, playing a significant role in strategic driving effect. The newly introduced "Dai Bu’Er", "12
Constellations" and "Daily Walnut" also won a good market response with a sales revenue accounting for 29% of
the total, playing an important role in stimulating the market. Secondly, the bread processing business was ready
for expansion. The Company actively expanded the retail market of bread business and enriched the product
8
Hainan Jingliang Holdings Co., Ltd. Annual Report 2017 (Abstract)
structure to reversed the downward trend in previous years, and sales in KFC and retail channels increased by
8.5% and 44% respectively, building a base for the next step, that is, on the one hand, the cooperation with the
Wumart Group in capital level entered the substantive stage. The two parties had signed a strategic cooperation
agreement, and the bread products would be available for sale in the 350 stores of Wumart in Beijing. On the
other hand, the expansion of the baking industry would be carried out in an orderly manner, and stores would be
opened in Tianjin and Beijing. Moreover, the ERP system and institutional mechanisms would be established for
standardization.
④ Increase of corporate influence
The influence of the Company in the industry keeps increasing with economic efficiency, business expansion and
publicity and promotion. The "Gu Chuan" brand owned by the Company won the honor of most influential brand
in Beijing. Zhejiang Xiaowangzi Food Share Co., Ltd., a subsidiary of the Company, was assessed the “National
Leading Food Enterprise of the Food Industry for 2016-2017” by the China Food Industry Association. Firstly, the
Company got involved in the field of land restoration. In accordance with development strategy, the Company
established cooperation with Tangshan Caofeidian Agricultural Development Group and the government of
Yaowan Town, Xinyi City, Jiangsu Province to set up Beijing Grain (Caofeidian) Agricultural Development Co.,
Ltd. and Beijing Grains Lands Construction and Operation (Xinyi) Co., Ltd. respectively to gain stable profits
through land restoration following up the land increase/decrease linking policy, and built a good base for the
company profit growth in the next step. Secondly, the Company keeps expanding the business area. In terms of oil
business, with the help of coordinated development of Beijing, Tianjin and Hebei, the Company cooperated with
Hebei Grain Industry Group Co., Ltd. to establish Beijing Grain (Hebei) Oil Co., Ltd., which became an important
fulcrum for the brand products layout of the Company in the Shijiazhuang market. At present, the marketing
layout of oil business is basically formed in Beijing, Tianjin and Shijiazhuang, radiating to the whole region of
Beijing, Tianjin and Hebei. With regards to snack food business, the Company had held six large-scale marketing
and promotion conferences in Chuntang of Chengdu, Emeishan, Xi’an, Dalian, Huangshan and Chongqing, as
well as more than 60,000 sales terminal promotion activities, further deepening the marketing channels covering
the whole country. Thirdly, the Company kept improving the brand image. Relying on the excellent performance
of the grain and oil products in the Beijing market and the recognition of consumers, the Gu Chuan brand won the
honor of most influential brand in the 8th Beijing Influence Evaluation among the tens of thousands of
participants. The two super IPs of snack foods have achieved initial success: “MS Dong” has become a hot
product by internet communications such as WeChat, micro-blog, microfilm and Internet novels, while the
“Jianqiang De Tudou” brand targeted young consumers. The products will be given cultural connotation by series
of animations and related preparations have already been started. The improvement of brand image has further
enhanced the promotion of product marketing.
2. Material Change in Main Business Scope in Reporting Period
√ Yes □ No
During the Reporting Period, the Company completed a significant asset restructuring, and its main business
9
Hainan Jingliang Holdings Co., Ltd. Annual Report 2017 (Abstract)
scope has changed from real estate development, resort hotel operation and property management to vegetable oil
processing, food production and land restoration.
3. Product Categories Contributing over 10% of Main Business Revenue or Income
√ Applicable □ Not applicable
Unit: RMB
YoY change in
Product Gross margin YoY change in YoY change in
Sales revenue Operating income gross margin
category percentage sales revenue operating income
percentage
Oils and
6,587,444,233.67 326,022,728.20 4.95% 29.78% 12.07% -0.78%
oilseeds
Food processing 829,093,442.40 248,082,750.24 29.92% 5.73% 7.82% 0.58%
4. Business Seasonality to which Special Attention should Be Paid
□ Yes √ No
5. Material YoY Changes in Sales Revenue, Cost of Sales and Net Income Attributable to Common
Shareholders or Their Composition
√ Applicable □ Not applicable
(1) Sales revenue and cost of sales decrease primarily because the sales revenue and cost of sales of January-May
2016 include revenue and cost of 14 grain trading subsidiaries (all transferred at the end of May 2016) and there
was no such business in the current period. (2) Net income attributable to shareholders of the listed company
decreases primarily because the Company earned net income of RMB152.85 million in 2016 from disposal of its
equity investments in Heilongjiang Longshi Pearl River Media Co., Ltd. and Days Hotel & Suites Sanya Resort as
well as three villas in Sanya City, Hainan Province.
6. Possibility of Listing Suspension or Termination
□ Applicable √ Not applicable
7. Matters Related to Financial Reporting
(1) YoY Changes in Accounting Policies, Accounting Estimates or Measurement Methods
√ Applicable □ Not applicable
The Company’s asset and business structures have changed significantly upon the completion of a significant
asset restructuring. In order to provide a more objective, truer and fairer reflection of its financial condition and
operating results, based on its business size and features, and referring to the corresponding accounting estimates
10
Hainan Jingliang Holdings Co., Ltd. Annual Report 2017 (Abstract)
of comparable listed companies in the same industry, the Company has adjusted its accounting estimates
regarding the allowance ratios on doubtful receivable accounts, as well as the depreciable lives and yearly
depreciation rates of property, plant and equipment. For further information, see the Announcement on Changes to
Allowance Ratios on Doubtful Receivable Accounts, as well as Depreciable Lives and Yearly Depreciation Rates
of Property, Plant and Equipment on www.cninfo.com.cn.
As the Ministry of Finance issued during the Reporting Period the Accounting Standard No. 42 for Business
Enterprises—Non-Current Assets and Disposal Groups Classified as Held for Sale and Discontinued Operations,
the revised Accounting Standard No. 16 for Business Enterprises—Government Subsidies, and the Notice on
Revising and Issuing Format of Financial Statements of General Enterprises, the adoption of these new
regulations by the Company has incurred changes to its accounting policies. For further information, see the
Announcement on Accounting Policy Changes on www.cninfo.com.cn.
(2) Retrospective Restatements due to Correction of Material Accounting Errors in Reporting Period
□ Applicable √ Not applicable
No such cases.
(3) YoY Changes in Scope of Consolidated Financial Statements
√ Applicable □ Not applicable
Material changes have occurred to the scope of the Company’s consolidated financial statements of the Reporting
Period due to a significant asset restructuring. 18 new entities are included and 16 former entities are excluded
compared to 2016. This is because the swapped-in assets were accounted for as business mergers under the same
control, and the financial statements of 2016 were retrospectively adjusted accordingly. On May 31, 2016, in
order to eradicate the horizontal competition between Jingliang Food’s 14 trading subsidiaries and Beijing Grain
Group, as approved by the State-owned Assets Supervision and Administration Commission of People’s
Government of Beijing Municipality, Jingliang Food transferred its holdings in the 14 trading companies (Beijing
Jingliang Xingye Trading Co., Ltd., Beijing Jingliang Jinfeng Grain and Oil Trading Co., Ltd., etc.) to Beijing
Grain Group. As such, the Company’s consolidated financial statements included the aforesaid 14 trading
companies for January-May 2016. July 31, 2017 was the settlement day for the Company’s mater asset
restructuring. According to the relevant restructuring agreements, since the settlement day, certain of the
Company’s former subsidiaries (Shanghai Real Estate, Jiubo Culture, Mudanjiang Group, Pearl River Property
Management, Hubei Real Estate, Hebei Real Estate, etc.) would no longer be included in the Company’s
consolidated financial statements. As for equity investments swapped out, they would no longer be consolidated
since the settlement day and the opening amounts of the balance sheets would not be adjusted.
Hainan Jingliang Holdings Co., Ltd.
April 13, 2018
11
