CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY

12 Months Ended

Dec. 31, 2016

Parent Company [Member]

CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY

SCHEDULE 1 - PARENT COMPANY BALANCE SHEETS (IN U.S. DOLLARS)

(Unaudited)

	December 31,		December 31,
	2016		2015
ASSETS
CURRENT ASSETS
Cash	$	281,017	$	144,465
Other current assets and prepaid expenses		500		500
Total current assets		28,517		144,965
OTHER ASSETS
Investment in subsidiaries		282,425,857		266,344,688
Total other assets		282,425,857		266,344,688
TOTAL ASSETS	$	282,707,374	$	266,489,653
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Other payables and accrued expenses	$	217,087	$	829,257
Total current liabilities		217,087		829,257
TOTAL LIABILITIES		217,087		829,257
COMMITMENTS AND CONTINGENCIES		-		-
EQUITY
Preferred stock, $0.001 par value, 500,000 shares authorized, none issued or outstanding as of December 31, 2016 and December 31, 2015		-		-
Common stock $0.001 par value, 100,000,000 shares authorized, 66,018,867 and 65,963,502 shares issued and outstanding as of December 31, 2016 and 2015		66,018		65,963
Additional paid-in capital		80,230,968		79,990,717
Retained earnings
Unappropriated		277,473,959		184,564,147
Appropriated		967,543		967,543
Accumulated other comprehensive loss		(76,248,201)		(1,248)
Total stockholders' equity		282,490,287		265,587,122
Non-controlling interest		-		73,274
Total Equity		282,490,287		265,660,396
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	282,707,374	$	266,489,653

The accompanying notes are an integral part of Schedule 1.

SCHEDULE 1 - PARENT COMPANY STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)

(IN U.S. DOLLARS)

(Unaudited)

	December 31,		December 31,
	2016		2015
OPERATING EXPENSES
Selling, general and administrative expenses	$	(966,276)	$	(1,302,521)
Stock compensation expenses		(240,306)		(530,542)
Total operating expenses		(1,206,582)		(1,833,063)
EQUITY INCOME OF SUBSIDIARIES		94,109,899		23,394,839
NET INCOME		92,903,317		21,561,776
Added : net loss attribute to the non-controlling interest		6,495		296
NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	92,909,812	$	21,562,072
OTHER COMPREHENSIVE INCOME (LOSS)
Change in unrealized loss related to investments in gold	$	(54,789,485)	$	-
Total foreign currency translation loss		(21,461,689)		(14,740,716)
Less: foreign currency translation loss attributable to non-controlling interest		(4,222)		4,251
Total other comprehensive loss attributable to common stockholders	$	(76,246,952)	$	(14,744,967)
COMPREHENSIVE INCOME attributable to:
Common stockholders	$	16,662,860	$	6,817,105
Non-controlling interest		(10,717)		3,955
	$	16,652,143	$	6,821,060

The accompanying notes are an integral part of Schedule 1.

SCHEDULE 1 - PARENT COMPANY STATEMENTS OF CASH FLOWS (IN U.S. DOLLARS)

(Unaudited)

	For the years ended December 31,
	2016		2015
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	92,903,317	$	21,561,776
Adjusted to reconcile net income to cash provided by (used in) operating activities
Income from subsidiaries		(92,394,901)		(22,149,839)
Warrants or shares issued for consulting services		195,734
Share based compensation for services		44,572		530,542
Changes in operating assets and liabilities (Increase) decrease in:
Other payables and accrued expenses		(612,170)		140,000
Net cash provided by operating activities		136,552		82,479
CASH FLOWS FROM FINANCING ACTIVITIES
Cash dividend paid		-		-
Net proceeds from exercise of warrants		-		-
Net proceeds from stock issuance		-		-
Net cash provided by financing activities		-		-
NET INCREASE IN CASH		136,552		82,479
CASH, BEGINNING OF YEAR		144,465		61,986
CASH, END OF YEAR	$	281,017	$	144,465

The accompanying notes are an integral part of Schedule 1.