* * (A joint stock company incorporated in the People’s Republic of China with limited liability) Stock Code : 6122 Annual ReportAnnual 2017 *Jilin Jiutai Rural Commercial Bank Corporation Limited is not an authorized institution within the meaning of the Banking Ordinance (Chapter 155 of the Laws of Hong Kong), not subject to the supervision of the Hong 2017 Kong Monetary Authority, and not authorized to carry on banking/deposit-taking business in Hong Kong. Annual Report Contents Chairman’s Statement 2 President’s Statement 4 Chapter 1 Definitions and Glossary 6 Chapter 2 Company Profile 18 Chapter 3 Financial Highlights 26 Chapter 4 Management Discussion and Analysis 30 Chapter 5 Report of the Board of Directors 98 Chapter 6 Report of the Board of Supervisors 124 Chapter 7 Changes in Share Capital and Particulars of Shareholders 128 Chapter 8 Directors, Supervisors, Senior Management, Employees and Organizations 136 Chapter 9 Corporate Governance Report 161 Chapter 10 Risk Management, Internal Control and Internal Audit 204 Chapter 11 Financial Reports 215 Chapter 12 Unaudited Supplementary Financial Information 386 Chairman’s Statement Mr. Gao Bing Chairman of Board of Directors 2 JIUTAI RURAL COMMERCIAL BANK Chairman’s Statement In 2017, the global economy showed signals of recovery. In China, driven by the supply-side structural reform, the economy maintained steady growth and the focus shifted to high quality development instead of high growth rate. Amid the new development trends of deleveraging and stringent financial regulations, the Bank capitalized on the successful listing in Hong Kong as a new starting point and endeavored to achieve improvement steadily in order to position itself as an excellent listed bank. During the year, the Bank continued to improve its corporate governance and optimized the operating mechanism. The management foundation was further strengthened. The Bank also grasped development opportunities and established the first financial leasing company in Jilin, facilitating the development of diversified operation effectively. In order to strengthen the principal business, the Bank underwent reorganization and enhanced financial services for the micro, small and medium-sized enterprises, three rurals and urban and rural residents. The financial inclusion ability of the Bank was further improved. Adhering to the traditional values, the Bank performed its social responsibilities. The Bank offered financial services for poverty alleviation and rural revitalization and achieved preliminary results. In addition, efforts were put to solidify and optimize the compliance and risk control systems. With the improvement in internal control system and operating procedures, the risk prevention and control abilities were enhanced. Under the principles of “restructuring, transformation, risk control and management enhancement”, all businesses of the Bank maintained balanced development and sound growth in general. As of the end of 2017, according to the data prepared in accordance with IFRSs, the Group’s total assets amounted to RMB187,009 million, total loans and advances to customers amounted to RMB78,827 million, total deposits from customers amounted to RMB129,882 million, and net profits amounted to RMB1,638 million. The Bank was again shortlisted as the Top 1000 Bank of the World by The Banker, a U.K. magazine, and Top 100 Bank of China by China Banking Association, and recognized as a Role Model of Rural Cooperative Financial Institutions in Serving Rural Areas and Small Business of 2017 (2017年農村合作金融機構支農支小服務示範單位) by China Banking Association. In the past year, the Bank’s achievements in restructuring and transformation were largely attributable to the trust of customers, confidence of investors, guidance of the government and regulatory authorities as well as the dedication and hard work of all employees. On behalf of the Board, I would like to express our sincere gratitude to all parties. 2018 marks the fortieth anniversary of the reform and opening of China, as well as the tenth anniversary of our Bank. Adhering to the strategy of focusing on principal business and the principle of steady development, the Bank will continue to provide services for the real economy and push forward the restructuring and transformation of operation. While supporting the growth of micro, small and medium-sized enterprises, rural revitalization and poverty alleviation and development of community finance, the Bank will exert to develop its core customer base and reform the growth momentum in order to create better values for the shareholders and pursue more sustainable development with higher quality and efficiency. The Bank will strive to develop as an excellent modern rural commercial bank. Gao Bing Chairman of Board of Directors Annual Report 2017 3 President’s Statement Mr. Zhang Haishan President 4 JIUTAI RURAL COMMERCIAL BANK President’s Statement 2017 was an extraordinary and meaningful year in the history of development of the Bank. The Bank was successfully listed on the Main Board in Hong Kong on January 12, 2017, marking a new chapter of its transformation. Throughout the year, the management of the Bank duly executed the resolutions adopted by the Board and fully cooperated with the Board of Supervisors. Under the principles of “restructuring, transformation, risk control and management enhancement”, the Bank shifted its focus from achieving rapid growth to maintaining high-quality development. As at the end of 2017, according to the data prepared in accordance with IFRSs, the Bank’s total assets amounted to RMB112,733 million, total deposits from customers amounted to RMB68,359 million, total loans and advances to customers amounted to RMB36,691 million, and net profit reached RMB1,185 million. In 2017, we put our priority on our traditional values and focused on our principal business. Efforts were put to optimize the asset and liability structure of the Bank, and the transformation of the Bank was carried out effectively. As we strengthened our market positioning by allocating more credit resources to “three rurals” and micro, small and medium-sized enterprises, the agricultural-related loans and loans to micro, small and medium-sized enterprises recorded steady growth. We also insisted in product innovation and launched exclusive products in Jilin Province, such as the mortgage loans secured by farmers’ housing property rights and mortgage loans secured by the land use rights regarding rural collectively-owned construction land for operating purpose. We developed multi-parties cooperation model, and formed strategic partnership with numerous enterprises, colleges and universities, hospitals and relevant associations and chambers to pursue mutual growth. In order to control our risks effectively, we optimized our overall risk management system. Various regulatory indicators were up to or better than the regulatory standards. We endeavored to carry out targeted poverty alleviation through various financial means. We provided support to poverty alleviation industries and projects to facilitate the poverty alleviation progress. In addition, we put great efforts in aiding the poor and helping ones in need. Through organizing charitable donations and charity activities, the brand value of the Bank was further enhanced. As a people-oriented bank, we organized group wedding ceremony for our young employees, speech contest and other activities to cultivate our corporate culture. Over the past year, we developed new services in the course of restructuring, and fostered our transformation while focusing on our principal businesses. Development of the Bank was regulated under the principle of risk control. We also strengthened our management and optimized our mechanisms. Various objectives were achieved. I hereby, on behalf of the management of the Bank, extend our sincere gratitude to all shareholders and parties from all sectors of the society for their understanding and endless support as well as all employees of the Bank for their significant contribution and great dedication throughout the year. In 2018, the management of the Bank will duly execute the resolutions adopted by the Board and get well-prepared to respond to the changes in policies, impact of external environment and pressure from competition during the course of our transformation. The Bank will take proactive and effective measures and put great efforts in serving the real economy in Jilin. The Bank aims to achieve stable and high-quality growth while carrying out innovation and transformation, so as to become a first-class and modern rural commercial bank with great value and culture and perform its responsibility duly. Zhang Haishan President Annual Report 2017 5 Chapter 1 Definitions and Glossary In this annual report, unless the context otherwise requires, the following terms shall have the meanings set out below: “Anci District Huimin Village Huimin Village Bank Company Limited of Anci, Langfang (廊坊市安次區惠民村鎮 and Township Bank” 銀行股份有限公司), a joint stock company with limited liability incorporated in the PRC on December 6, 2011, in which the Bank holds a 51% equity interest. The remaining nine shareholders hold 49% equity interest in Anci District Huimin Village and Township Bank “Anping Huimin Village and Anping Huimin Village Bank Co., Ltd. (安平惠民村鎮銀行股份有限公司), Township Bank” a joint stock company with limited liability incorporated in the PRC on December 24, 2013, in which the Bank holds a 36% equity interest. The remaining 30 shareholders