DISCONTINUED OPERATIONS

12 Months Ended

Dec. 31, 2016

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure

3. DISCONTINUED OPERATIONS

 

On October 31, 2016, the Company completed the sale of all of the 55% equity interest it indirectly held in Jiangxi Jinko Engineering to Shangrao Kangsheng Technology Co., Ltd. (the "Buyer"), a company formed by a buyer consortium led by Mr. Xiande Li, chairman of the board of directors of the Company, for a total consideration of US$ 250 million pursuant to the previously announced Share Purchase Agreement entered into by Wide Wealth Group Holding Limited, a 55%-owned indirect subsidiary of the Company, and the Buyer. 

In Conjunction, the Company repurchased all of its Series A, Series A-1 and Series A-2 redeemable convertible preferred shares (Note 8) with considerations of US$225 million from the preferred shareholders, while the Company also agreed to transfer the 45% equity interest of Jiangxi Jinko Engineering to related entities of the preferred shareholders with a total consideration of US$225 million. These two transactions were net-settled.

As a result of the above transactions, the Company disposed of its downstream business and received US$250 million (RMB1,693.2 million) in cash.

Assets and liabilities related to Jiangxi Jinko Engineering were reclassified as assets/liabilities held for sale as of December 31, 2015, while results of operations related to Jiangxi Jinko Engineering, including comparatives, were reported as loss from discontinued operations.

A gain of RMB1,007.9 million (US$145.2 million) was recognized because of the disposition. The disposal gain was comprised of i) premium of the consideration against the net assets of the discontinued operations as of the disposition date; ii) recognition of the un-realized profit generated from the module sales transactions between the continuing and discontinued operations before the disposition date, and reduced by the iii) recognition of warranty costs in connection with the standard warranty, same as 3^rd party sales, provided by the continuing operations to the discontinued operations.

Income tax of RMB39,952,408 was recognized associated with the gain on disposition and is included in the total 2016 tax provision of RMB 54,466,059 for discontinued operations.

Upon the disposition of Jiangxi Jinko Engineering, the Company provided the loan guarantee and redemption guarantee to Jiangxi Jinko Engineering (note 30).

Results of the discontinued operations

					January 1 – October 31
	2014		2015		2016
	RMB		RMB		RMB
Revenues		237,652,141		622,107,137		952,968,658
Cost of revenues		(94,800,620)		(283,766,608)		(407,369,723)
Gross Profit		142,851,521		338,340,529		545,598,935
Operating expenses
Selling and marketing		(753,011)		-		-
General and administrative		(54,540,610)		(126,468,315)		(276,685,730)
Total operating expenses		(55,293,621)		(126,468,315)		(276,685,730)
Income from operations		87,557,900		211,872,214		268,913,205
Interest expenses, net		(61,325,089)		(74,923,604)		(215,226,564)
Exchange loss		(7,491,271)		(31,214,031)		(25,441,221)
Change in fair value of forward contracts		-		-		4,455,731
Other income/(expenses), net		(133,616)		(16,018,551)		37,675
Subsidy income		955,703		1,704,445		141,496
Equity income in affiliated companies		9,549,289		13,669,111		15,265,937
Gain on disposal of discontinued operations		-		-		1,007,884,060
Income from discontinued operations before income taxes		29,112,916		105,089,584		1,056,030,319
Income tax expense, net		(1,058,939)		(11,329,810)		(54,466,059)
Income from discontinued operations, net of tax		28,053,977		93,759,774		1,001,564,260

Assets and liabilities of the discontinued operations
	December 31,2015
	RMB
Assets
Cash and cash equivalents		1,291,072,949
Restricted short-term investments		599,048,331
Notes receivable, net - third parties		38,644,600
Accounts receivable, net - third parties		666,200,351
Other receivables, net - third parties		308,610,206
Prepayments and other current assets		11,004,290
Total current assets		2,914,580,727
Long-term investments		109,587,142
Property, plant and equipment, net		5,019,914
Intangible assets, net		730,794
Other assets - third parties		558,575,058
Restricted cash – non current		173,531,731
Project Assets		7,044,728,804
Deferred tax assets - non current		8,040,685
Total assets held for sale		10,814,794,855
Liabilities
Short-term borrowings from third parties, including current portion of long-term bank borrowings		700,285,077
Notes payable - third parties		589,266,149
Accrued payroll and welfare expenses		21,386,968
Income tax payable		15,670,018
Advances from third parties		313,741
Other payables and accruals		1,314,766,124
Total current liabilities		2,641,688,077
Long-term borrowings		3,319,224,224
Long-term payables		56,955,933
Deferred tax liability - non current		11,354,590
Total liabilities held for sale		6,029,222,824

	2014		2015		2016
Cash flows generated from/(used in ) discontinued operations
Net cash used in operating activities		(406,886,606)		(1,431,244,810)		(2,017,319,542)
Net cash used in investing activities		(2,511,677,528)		(2,129,264,757)		(2,048,843,302)
Net cash provided by financing activities		3,323,916,670		4,390,737,581		5,074,465,592
Net increase in cash and cash equivalent		405,352,536		830,228,014		1,008,302,748