China Fangda Group Co., Ltd. 2016 Annual Report
China Fangda Group Co., Ltd.
2016 Annual Report
March 2017
China Fangda Group Co., Ltd. 2016 Annual Report
Chapter 1 Important Statement, Table of Contents and Definitions
The members of the Board and the Company guarantee that the
announcement is free from any false information, misleading statement or
material omission and are jointly and severally liable for the informations
truthfulness, accuracy and integrity.
Mr. Xiong Jianming, the Chairman of Board, Mr. Lin Kebin, the Chief
Financial Officer, and Mr. Chen Yonggang, the manager of accounting
department declare: the Financial Report carried in this report is authentic and
completed.
All the Directors have attended the meeting of the board meeting at which
this report was examined.
Forward-looking statements involved in this report including future plans
do not make any material promise to investors. Investors should pay attention to
investment risks.
The Company needs to comply with disclosure requirements of the
Shenzhen Stock Exchange Industry Information Disclosure Guideline No.6 –
Listed Companies Engaged in Decoration Business and disclosure requirements
of the Shenzhen Stock Exchange Industry Information Disclosure Guideline
No.3 – Listed Companies Engaged in Property Development.
The Company has specified market, management and production and
China Fangda Group Co., Ltd. 2016 Annual Report
operation risks in this report. Please review the potential risks and measures
mentioned in the discussion and analysis of future development in IV.
Management Discussion and Analysis.
The Board meeting reviewed and approved the profit distribution preplan:
distributing cash dividend of RMB3.5 for each ten shares to all shareholders on
the basis of 789,094,836 shares and no dividend share is issued to shareholders,
but 5 shares will be issued for every 10 shares to all shareholders through
capitalization of the reserve.
China Fangda Group Co., Ltd. 2016 Annual Report
Table of Contents
I. Important Statement, Table of Contents and Definitions ......................................................................................................................2
II. About the Company and Financial Highlights ....................................................................................................................................7
Chapter 3 Business Introduction ............................................................................................................................................................12
Chapter 4 Operation Discussion and Analysis .......................................................................................................................................17
V Significant Events ..............................................................................................................................................................................41
Chapter 6 Changes in Share Capital and Shareholders ..........................................................................................................................55
Chapter 7 Preferred Shares ....................................................................................................................................................................65
Chapter 8 Particulars about the Directors, Supervisors, Senior Management and Employees ..............................................................66
Chapter 9 Corporation Governance .......................................................................................................................................................72
Chapter 10 Information about the Company’s Securities ......................................................................................................................79
Chapter 11 Financial Statements ...........................................................................................................................................................80
Chapter 12 Documents for Reference ..................................................................................................................................................198
China Fangda Group Co., Ltd. 2016 Annual Report
Definitions
Refers
Terms Description
to
Refers
Fangda Group, company, the Company China Fangda Group Co., Ltd.
to
Refers
Articles of Association Articles of Association of China Fangda Group Co., Ltd.
to
Refers
Meeting of shareholders Meetings of shareholders of China Fangda Group Co., Ltd.
to
Refers
Board of Directors Board of Directors of China Fangda Group Co., Ltd.
to
Refers
Supervisory Committee Supervisory Committee of China Fangda Group Co., Ltd.
to
Refers
Banglin Co. Shenzhen Banglin Technologies Development Co., Ltd.
to
Refers
Shilihe Co. Shenzhen Shilihe Investment Co., Ltd.
to
Refers
Shengjiu Co. Shengjiu Investment Ltd.
to
Refers
Fangda Jianke Shenzhen Fangda Jianke Group Co., Ltd.
to
Refers
Fangda Automatic Shenzhen Fangda Automation System Co., Ltd.
to
Refers
Fangda New Material Fangda New Materials (Jiangxi) Co., Ltd.
to
Refers
Fangda New Resource Shenzhen Fangda New Energy Co., Ltd.
to
Refers
Fang SOZN Guangdong Fangda SOZN Lighting Co., Ltd.
to
Refers
Shenyang Fangda Shenyang Fangda Semi-conductor Lighting Co., Ltd.
to
Refers
Shenzhen Woke Shenzhen Woke Semi-conductor Lighting Co., Ltd.
to
Fangda Aluminium Refers Jiangxi Fangda New Type Aluminum Co., Ltd.
China Fangda Group Co., Ltd. 2016 Annual Report
to
Refers
Dongguan Fangda New Material Dongguan Fangda New Material Co., Ltd.
to
Refers
Kexunda Co. Shenzhen Kexunda Software Co., Ltd.
to
Refers
Fangda Property Shenzhen Fangda Property Development Co., Ltd.
to
Refers
Chengdu Fangda Jianke Chengda Fangda Construction Technology Co., Ltd.
to
Refers
Shihui International Shihui International Holding Co., Ltd.
to
Refers
Shenyang Decoration Fangda Decoration Engineering (Shenyang) Co., Ltd.
to
Refers
Kechuangyuan Software Shenzhen Qianhai Kechuangyuan Software Co., Ltd.
to
Refers
CSRC China Securities Regulatory Commission
to
Refers
SZSE Shenzhen Stock Exchange
to
China Fangda Group Co., Ltd. 2016 Annual Report
Chapter 2 About the Company and Financial Highlights
1. Company profiles
Stock ID Fangda Group, Fangda B Stock code 000055、200055
Modified stock ID (if any) None
Stock Exchange Shenzhen Stock Exchange
Chinese name China Fangda Group Co., Ltd.
Chinese abbreviation Fangda Group
English name (if any) CHINA FANGDA GROUP CO., LTD.
English abbreviation (if any) CFGC
Legal representative Xiong Jianming
Fangda Technology Building, Kejinan 12th Avenue, High-tech Zone, Hi-tech Park South Zone,
Registered address
Shenzhen, PR China.
Zip code
20F, Fangda Technology Building, Kejinan 12th Avenue, High-tech Zone, Hi-tech Park South Zone,
Office address
Shenzhen, PR China.
Zip code
Website http://www.fangda.com
Email fd@fangda.com
2. Contacts and liaisons
Secretary of the Board Representative of Stock Affairs
Name Zhou Zhigang Guo Linchen
20F, Fangda Technology Building, Kejinan 20F, Fangda Technology Building, Kejinan
Address 12th Avenue, High-tech Zone, Hi-tech Park 12th Avenue, High-tech Zone, Hi-tech Park
South Zone, Shenzhen, PR China. South Zone, Shenzhen, PR China.
Tel. 86(755) 26788571 ext. 6622 86(755) 26788571 ext. 6622
Fax 86(755)26788353 86(755)26788353
Email zqb@fangda.com zqb@fangda.com
3. Information disclosure and inquiring
China Securities Journal, Security Times, Shanghai Securities Daily, Hong
Press medias of information disclosure
Kong Commercial Daily
China Fangda Group Co., Ltd. 2016 Annual Report
Website assigned by CSRC to release the online
http://www.cninfo.com.cn
reports
Place for information inquiry Secretarial Office of the Board
4. Registration changes
Organization code 91440300192448589C
Changes in main businesses since the
Property development business is added
listing of the Company
In 1996, the Company listed it’s A and B shares and the controlling shareholder is
Shenzhen Fangda Group Co., Ltd. On August 25, 2000, the controlling shareholder
Changes in the controlling shareholders (if changed its name into Shenzhen Fangda Economic Development Co., Ltd. On July 5,
any) 2002, the controlling shareholder changed into Shenzhen Banglin Technologies
Development Co., Ltd. By the end of this reporting period, the controlling shareholder
remains the Shenzhen Banglin Technologies Development Co., Ltd..
5. Other information
Public accountants employed by the Company
Public accountants Grant Thornton (limited liability partnership)
Address 5th Floor, Scitech Place, 22 Jianguomen Wai Avenue, Chaoyang District, Beijing, China
Signing accountant names Xie Peiren, Hu Gaosheng
Sponsor engaged by the Company to perform continued supervision and guide during the reporting period
√ Applicable □ Inapplicable
Sponsor name Office address Representatives Period of supervision and guide
China Merchants Securities Co. 38-45F, Jiangsu Building, Yitian August 1, 2016 – December 31,
Liang Zhanguo, Ding Yi
Ltd. Road, Futian District, Shenzhen
Financial advisor engaged by the Company to perform continued supervision and guide during the reporting period
□ Applicable √ Inapplicable
6. Financial Highlight
The Company retroactively adjusts or restates financial statistics of the previous years because of changes in account policies and
correction of accounting errors.
□ Yes √ No
2016 2015 Increase/decrease
Turnover (yuan) 4,203,866,173.72 2,550,467,494.78 64.83% 1,938,324,435.51
Net profit attributable to
shareholders of the listed company 697,956,378.23 107,272,369.77 550.64% 96,998,429.76
(yuan)
China Fangda Group Co., Ltd. 2016 Annual Report
Net profit attributable to the
shareholders of the listed company
623,075,474.92 29,070,293.64 2,043.34% 69,068,577.10
and after deducting of
non-recurring gain/loss (RMB)
Net cash flow generated by
465,717,074.92 -360,115,114.04 -557,893,929.44
business operation (RMB)
Basic earnings per share
0.91 0.14 550.00% 0.13
(yuan/share)
Diluted earnings per share
0.91 0.14 550.00% 0.13
(yuan/share)
Weighted average net income/asset
38.83% 8.42% 30.41% 8.14%
ratio
Increase/decrease from
End of 2016 End of 2015 End of 2014
the end of last year
Total asset (RMB) 6,787,051,278.08 4,464,147,811.40 52.03% 3,662,719,900.41
Net profit attributable to the
shareholders of the listed company 2,364,262,560.28 1,319,496,334.84 79.18% 1,234,930,863.46
(RMB)
7. Differences in accounting data under domestic and foreign accounting standards
1. Differences in net profits and assets in financial statements disclosed according to the international and
Chinese account standards
□ Applicable √ Inapplicable
There is no difference in net profits and assets in financial statements disclosed according to the international and Chinese account
standards during the report period.
2. Differences in net profits and assets in financial statements disclosed according to the overseas and
Chinese account standards
□ Applicable √ Inapplicable
There is no difference in net profits and assets in financial statements disclosed according to the international and Chinese account
standards during the report period.
8. Financial highlights by quarters
In RMB
Q1 Q2 Q3 Q4
Turnover 469,103,396.78 540,352,652.97 731,795,188.23 2,462,614,935.74
Net profit attributable to the 22,188,780.56 30,967,624.80 61,100,083.90 583,699,888.97
China Fangda Group Co., Ltd. 2016 Annual Report
shareholders of the listed company
Net profit attributable to the
shareholders of the listed company
23,019,578.47 21,245,511.10 56,370,833.65 522,439,551.70
and after deducting of
non-recurring gain/loss
Cash flow generated by business
-59,715,816.88 358,185,160.80 154,590,402.58 12,657,328.42
operations, net
Where there is difference between the above-mentioned financial data or sum and related financial data in quarter report and interim
report disclosed by the Company
□ Yes √ No
9. Accidental gain/loss item and amount
√ Applicable □ Inapplicable
In RMB
Items 2016 2015 2014 Notes
Non-current asset disposal gain/loss
(including the write-off part for which assets -3,080,469.74 -522,948.72 -24,398.43
impairment provision is made)
Subsidies accounted into the current income
account (except the government subsidy
closely related to the enterprise’s business 7,571,963.67 2,246,386.84 2,340,175.75
and based on unified national standard
quota)
Capital using expense charged to
non-financial enterprises and accounted into 3,649,313.12
the current income account
Gain from entrusted investment or assets
1,401,717.08 250,897.54 2,144,844.80
management
Gain/loss from debt reorganization -2,445,254.63
Gain/loss from change of fair value of
transactional financial asset and liabilities,
and investment gains from disposal of
transactional financial assets and liabilities 2,369,839.47 4,341,316.92 -2,852,885.00
and sellable financial assets, other than valid
period value instruments related to the
Company’s common businesses
Gain/loss from change of fair value of
investment property measured at fair value 11,558,304.10 85,793,780.49 34,897,632.10
in follow-up measurement
China Fangda Group Co., Ltd. 2016 Annual Report
Other non-business income and expenditures
5,857,845.48 7,624,429.39 -3,671,724.03
other than the above
Other gain/loss items satisfying the
58,154,670.60
definition of non-recurring gain/loss account
Less: Influenced amount of income tax 6,168,477.85 20,963,417.56 9,526,862.57
Influenced amount of minority
339,234.87 568,368.77 -973,756.92
shareholders’ equity (after-tax)
Total 74,880,903.31 78,202,076.13 27,929,852.66 --
Explanation statement should be made for accidental gain/loss items defined and accidental
gain/loss items defined as regular gain/loss items according to the Explanation Announcement of
Information Disclosure No. 1 - Non-recurring gain/loss mentioned.
√ Applicable □ Inapplicable
Items Amount Reason
The others are the gain of recalculation of the residual shares at their
Others 58,154,670.60 fair value after the Company lost the control of its subsidiary
Shengyang Fangda in the report period.
China Fangda Group Co., Ltd. 2016 Annual Report
Chapter 3 Business Introduction
1. Major businesses of the Company during the report period
Whether the Company needs to comply with disclosure requirements of special industries
Yes
Property development and decoration industries
The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure
Guideline No.6 – Listed Companies Engaged in Decoration Business.
The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure
Guideline No.3 – Listed Companies Engaged in Property Development.
The Company is headquartered in Nanshan District of Shenzhen and became listed in Shenzhen Stock Exchange on November
29, 1995. Currently, four major business subsidiaries of the Company are national high-tech enterprises with modern production
bases in Shenzhen, Shanghai, Chengdu, Nanchang, Dongguan and Foshan. The Company was engaged in the following businesses in
the report period.
1. Curtain wall system and material industry
(1) Main products and purposes
The Company’s main products include energy-saving curtain walls, photoelectricity curtain walls, LED color-display curtain
walls and aluminium plate materials. Construction curtain walls are mainly used on high-level buildings, large-area public venues
such as airports, stations, cultural centers and exhibition centers, daylighting roof, shaped construction (ball-shaped and clock-shaped
buildings) with external retaining and decoration functions.
(2) Operation mode
The Company seeks to win orders through tenders and purchase raw materials and arrange production based on orders. The
Company integrates designing, production, engineering and after-sales services. The Company’s curtain wall products are engineered
by itself. The operation mode remained unchanged in the report period.
(3) Main business drive
See 3. Core competitiveness analysis.
(4) Development stage of the industry, circle and industry position
As China continues urbanizing, the demand for construction curtain walls will grow rapidly, fueling the development of the
curtain wall industry. Over recent years, a series of industry policies will be issued to push forward the industry, providing a gold
opportunity for the development of energy-saving curtain wall and material business.
The Company is a pioneer and first listed company in this industry. Over the past more than 20 years, the Company has
undertaken hundreds of large projects and received the highest award in the industry China Construction Luban Award and Zhan
Tianyou Civil Engineering Award for many times. The Company has also received nearly 100 provincial and above awards. The
Company ranks among the top 5 players in the globe in terms of the market share of high-end energy-saving curtain walls. The
Company has a strong technology lead in the industry with 398 patents, including 32 intention patents and one software copyright.
The Company also took part in the preparation of more than 10 national or industry standards including the Public Construction
Energy Saving Design Standard, making 9 records among Chinese enterprises.
(5) Impacts of the macro-economy, industry policies and the Company’s measures
China Fangda Group Co., Ltd. 2016 Annual Report
The year 2016 is the first year for China to realize the target of building an overall well-off country and the first year of the 13th
Five-Year Plan Period of the construction decoration industry. Despite great difficulties for the industry in 2016, the industry
remained expanding in 2016. The strong development momentum of high buildings continued driving the demand for construction
curtain walls. Meanwhile, a series of national policies continued boosting the innovation of the construction decoration industry in
2016. The business mode is evolving to Internet + innovation of the traditional business mode. IT technologies such as BIM are
increasingly used in construction decoration engineering, pushing the improvement of quality and upgrade of the business mode.
The domestic construction industry has continued its pace to expand globally. The national strategy of “One Road, One Belt”
provides fresh driving force to the overseas investment in infrastructure construction and offers great opportunities to explore the
global market. The Company established the Australian branch in 2016 to integrate overseas bidding and engineering management
resources, and established the overseas business team to improve the overseas engineering capability and further explore the overseas
market.
(6) Quality control system, implementation standard, control measures and overall evaluation
Quality control system: The Company has implemented overall quality management and established quality management
system to cover designing, raw material purchasing, production, inspection, product warehousing, delivery, and after-sales services in
accordance with ISO9001 and regularly evaluated the quality management system. Wholly-owned subsidiary Fangda Jianke is one of
the first companies that obtained the ISO9001 certificate in the industry in China. Fangda Jianke has also passed the ISO14001 and
OHSAS18001 certification.
Implementation standards: The Company strictly follows the GB/T21086-2007 and JG/T231-2007 standards in implementing
construction curtail wall projects.
Qualtiy control measures: The Company has established a solid quality control organization to strictly implement the quality
management system and increase efforts on quality control.
Overall evaluation: The Company’s product and engineering quality complies with related regulations and standards. The
Company is committed to providing high-quality products and engineering for customers.
(7) Significant quality problem in the report period
The Company had no significant quality problem in the report period.
2. Rail transport equipment business
The Company’s main products in this sector are rail transport screen door systems, which are a necessary part of modern
subway system. It is installed at the edge of the subway platform and separates trains from the platform. The Company seeks to win
orders through tenders and purchase raw materials and arrange production based on orders. The Company has built a complete
industry chain that integrates designing, production, engineering and after-sales services. The operation mode remained unchanged in
the report period.The Company has developed rail transport screen door systems with independent intellectual property rights. The
Company also prepared the first Rail Transport Station Screen Door Standard. Currently, the screen door systems have been used in
23 cities, ranking No.1 in China in terms of the market share. The Company is also the largest supplier of screen doors in the world.
3. New energy industry: Solar PV power generation industry is largely supported by the Chinese government. The Company is
one of the first companies that possess intellectual property rights in the designing, production and integration of solar PV systems.
Currently, the Company has developed solar PV power plant projects with an installation capacity of 19.5MWp.
4. Real estate
The Company holds two property projects: Shenzhen Fangda Town and Nanchang Phoenix Land Project. Fangda Town project
is a renovation project, while Nanchang Phoenix Land project is an office building and business apartment project. Currently phase I
of Fangda Town project has been completed and put into sales. Nanchang Phoenix Land Project has not been started in 2016.
Please read 3. Core competitiveness analysis and Chapter 4 Operation Discussion and Analysis for detailed discussion.
China Fangda Group Co., Ltd. 2016 Annual Report
2. Major assets change
1. Major assets change
Main assets Major change
Equity assets No major change
Fixed assets No major change
The intangible assets decreased 36.64% year on year because the Company lost control
Intangible assets
power on Shenyang Fangda and the land use right decreased accordingly.
Construction in process No major change
2. Major foreign assets
□ Applicable √ Inapplicable
3 Core Competitiveness Analysis
Whether the Company needs to comply with disclosure requirements of special industries
Yes
Property development and decoration industries
The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure
Guideline No.6 – Listed Companies Engaged in Decoration Business.
The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure
Guideline No.3 – Listed Companies Engaged in Property Development.
(1) Curtain wall system and material
1. Expertise and brand competitiveness
In response to the national call for energy saving and emission reduction, the Company has aggressively develop solar electric
and optimal and energy-saving low-carbon curtain walls, developing a series of domestic and global leading solar and energy-saving
curtain wall products. The Company owns 398 curtain wall and material patents (including 32 invention patents) and one software
copyright, ranking top among domestic peers. It has achieved many firsts in the industry and created incomparable brand equity,
making it an optimal choice in the domestic high-end curtain wall and material market. FANGDA is a nationwide well-known
trademark in China.
2. Focusing on the high-end market to edge out competitors
Amid the fierce market competition, the Company has focused on the high-end energy-saving curtain wall market and technical
integration to improve high-end project quality. Moreover, it has focused resources on high-end curtain wall engineering and won
several Luban awards, Zhan Tianyou Civil Engineering awards and Classic Construction for the 50th Anniversary of the Foundation
of the People’s Republic of China, High-Quality Construction, White Magnolia Prize and Customer Satisfactory Engineering and the
China Fangda Group Co., Ltd. 2016 Annual Report
title of ―Top 10 Competitive Chinese Curtain Wall Provider‖. The Company has built a leading brand and created a clear edge in the
high-end curtain wall market.
3. Well-developed industry base landscape
Thanks to continued investment in facilities, the Company has established a national business landscape with Shenzhen as the
headquarters, Dongguan Songshanhu as the base in the south, Beijing in the north, Chengdu in the southwest and Shanghai and
Nanchang in the east. The Dongguan Songshanhu and Nanchang bases are the largest and most advanced curtain wall system and
material production bases in China and across the world, fueling the Company to increase its market share and competitiveness.
4. General solutions
The Company has integrated the design, production, management and engineering of curtain wall systems to enjoy technological,
cost, quality and service advantages.
(2) Rail transport equipment business
1. National development strategy
As the Chinese government continues to implement the “One Road, One Belt” and “Chinese Manufacturing Plan 2025”
strategies, the Chinese urban railway transportation has been developed rapidly, turning the subway screen door business onto a fast
track. By the end of 2016, a total of 130 subway lines have been running in more than 29 cities with a total length of 3,849 km. More
than 100 lines in more than 40 cities are under construction with a total length of more than 3,000 km. The year 2016 is the first year
of the 13th five-year plan period. The National Reform and Development Commission approved the applications of rail transport
construction of about 8,600 km in 43 cities.
2. Technical advantage
Through continued independent innovation, the Company has developed the global leading metro screen door system with full
intellectual property right and broken the monopoly of overseas competitors. The Company has also compiled the Rail Transport
Station Screen Door Standard, which is the first of its kind in China. The standard was approved in April 2006 and was implemented
on March 1, 2007. As the first standard in the industry in China, the standard has played a key role in guiding the development of
China’s rail transport screen door industry and enabled the Company a dominant lead in the industry. Currently, the Company has
227 metro screen door patents, including 48 invention patents. The Company also has seven computer software copyrights.
3. Brand equity
So far, the Company has undertaken railway screen door projects in most domestic cities, Hong Kong, Singapore and Kuala
Lumpur of Malaysia. The Fangda screen door system has grasped a leading market share and established incomparable brand
influence thanks to its patents, standard and maintenance services. The Company has become the largest railway screen door supplier
in the world.
(3) New energy industry
The new energy business mainly comprises solar power PV application, PV construction and LED industry.
1. Technical advantage
With more than ten years’ experience in developing solar energy PV power generating curtain wall technology, the Company is
the earliest company that masters the intelligent property right in the designing, production and integration of solar energy PV curtain
wall systems and is a pioneer in the application of PV curtain wall technology.
2. Relation with other industries
Distributed solar power PV power generation is closely related to the Company’s existing businesses. Most distributed solar
power PV systems are closely related to construction. Moreover, the Company has more than 10 years' experience in electrical
product integration. The Company also has more than 20 years’ experience in construction management and has the level-1
construction curtain wall engineering qualification and electrical installation engineering qualification.
(4) Real Estate
China Fangda Group Co., Ltd. 2016 Annual Report
The Fangda Town renovation project is well-positioned and enjoys express transport, unique landscape resoures, preferential
policies and moderate competition in the district. The project will buoy the Company’s net assets and total assets, bring strong cash
flows for the Company, provide capital support for the development of businesses, and gain experience in the real-estate
development industry.
China Fangda Group Co., Ltd. 2016 Annual Report
Chapter 4 Operation Discussion and Analysis
1. Summary
In 2016, the global economy and politics remained uncertain and the global economic recovery remained weak. The Chinese
economy stayed at the bottom of the L-shape trend. The Company has reacted positively to the new economic condition and sought
to overcome external adversities, fulfilling the yearly business operation target. During the report period, the Company recorded
operating revenue of RMB4,203,866,200, up 64.83% year on year. The net profit attributable to owners of the parent company is
RMB697,956,400, up 550.64% year on year. The net profit after deducting accidental gain/loss is RMB623,075,500, up 2,043.34%
year on year. The cash flow from main business reached RMB465,717,100. The profit from main businesses has continued
increasing in the report period. The Company won bids and signed contracts worth RMB3,006,790,000 in 2016. By the end of the
report period, the order reserve of the Company is worth RMB3,788,193,200 (excluding sales of real estate), 90.11% of the operating
revenue in 2016, paving the way for the operation in 2017.
1. High-end curtain wall systems and materials
The Company has continued pursuing for better quality and performance and has developed a series of world-class projects. The
Company's curtain wall systems and materials have won wide recognition among customers, become one of the most popular
energy-saving high-end curtain wall system and material brands in China. In 2016, the Company continued the strategy of promoting
products and solutions and focused in the first-tier area and high-end and high-creditability customers. In the report period, the
Company won bids in a series of high-end curtain wall projects such as the Shenzhen Evergrande Financial Center, Shenzhen OCT
Building, Beijing Vanke Tongzhou Taihu, Shanghai Vanke Jade Binjiang, Wuxi Wandamao Phase II, Huawei Wuhan R&D and
Production Base, Chengdu Lingdi Center Phase II, Chongqing Raffles City, and Lanzhou International Trade Center Phase II. In the
report period, the Company has finished and delivered a series of projects including the Beijing Lianmei Building, Beijing Vanke
Tongzhou Taihu, Shanghai Qibao Vanke Plaza, Shanghai Zhongwaiyun Changhang Building, Chengdu Alibaba West Base,
Chengdu Wanda Ruihua Hotel, Shenzhen Contemporary Art Gallery and City Planning Exhibition, Shenzhen Excellence Qianhai
No.1, Xiamen Anmei Photoelectric Building, Nanchang Wandamao Trade Center, Wuhan Lianfa Jiudu International, Guiyang
International Financial Center, Lanzhou International Trade Center and Xining Kangmei Chinese Medicine Trade Center. In the
project of the Shenzhen Contemporary Art Gallery and City Planning Exhibition, the Company showed its outstanding designing
capability of complicated curtain wall systems and engineering control and management. Nanchang Wandamao Trade Center is the
first construction group with the blue and white porcelain theme. The project imposed high requirements in terms of types of curtain
walls, amount of work, complexity and flatness control. These projects show the leading technology and rich experience in curtain
wall engineering..
In 2016, the Company continued reforming the business strategy and further integrated and optimized resources and business
procedures to simplify management structure, lower costs and elevate profitability. In 2016, the curtain wall system and material
business realized a sales income of RMB2.042 billion with order reserve of RMB2.701 billion, which is 132.27% of the sales income
from the curtain wall system and material business in 2016.
As China continues urbanizing, the demand for construction curtain walls will grow rapidly, fueling the development of the
curtain wall industry. Over recent years, a series of industry policies will be issued to push forward the industry, providing a gold
opportunity for the development of energy-saving curtain wall and material business.
2. Subway screen door
As the Chinese government continues to implement the “One Road, One Belt” and “Chinese Manufacturing Plan 2025”
strategies, the Chinese urban railway transportation has been developed rapidly, turning the subway screen door business onto a fast
track. By the end of 2016, a total of 130 subway lines have been running in more than 29 cities with a total length of 3,849 km. More
China Fangda Group Co., Ltd. 2016 Annual Report
than 100 lines in more than 40 cities are under construction with a total length of more than 3,000 km. The year 2016 is the first year
of the 13th five-year plan period. The National Reform and Development Commission approved the applications of rail transport
construction of about 8,600 km in 43 cities. The Company will enjoy from the fast development of the industry.
In 2016, the Company followed the tide of the “One Road, One Belt” and “Chinese Manufacturing Plan 2025” strategies to
increase the market share in China and expand globally. With outstanding performance, quality and outer appearance, the Company
has made headway in and outside China. In the report period, the Company won screen door orders in the Nanchang subway line
No.2, Kunming subway line No.3, Wuhan subway line No.7, Hong Kong Shatin to Central Link line phase 2, India Noida subway
screen door project, and Kuala Lumpur subway lien No.2 with a total order value of RMB820 million, ranking No.1 in the industry
and consolidating the Company’s technological, brand, service and market lead in the industry. The MTR subway screen door order
is the global largest subway screen door order in terms of the order amount with an order value of RMB430 million. The Company
grew explosively in the globe. The Company will speed up the global development to keep its global business momentum. In the
report period, the screen door projects of Kunming subway line No.3, Nanning subway line No.2, Xiamen subway line No.1,
Nanchang subway line No.2, Lanzhou subway line No.1, Wuhan subway line No.7, Tianjin subway line No.1 east extension and
Hefei subway line No.2 have been proceeding as planned. Shenzhen subway line No.11 and No.9, Dongguan subway line No.2,
Fuzhou subway line No.1, Wuhan subway line No.6, Wuhan-Xiaogan railway line and Xi’an subway line No.3 were put into
operation, making the Company as the No.1 supplier of screen doors to subway lines put into operation in 2016. In the report period,
the sales income from the screen door business was RMB328 million, up 26.90% year on year. The order reserve at the end of the
period was RMB1.088 billion, paving the way for the business development in 2017.
As the first screen door supplier in China, the Company is one of the first providers of subway screen door services in China.
The subway screen door service business has become a profit growth point of the Company. As more subway lines enter the
maintenance period, the sector has a bright growth outlook. In addition, the Company has put great efforts to develop the railway
transport advertising and intelligent systems to extend the railway transport equipment industry chain, explore more profit sources
and share the benefit of the development of the sector.
Over recent years, the percentage of operation revenue of the railway transportation business has continued increasing in the
Company. With years’ development, the Company has become an industry leader in terms of market share, brand influence, standard
and expertise.
3. New energy industry
In the report period, Jiangxi Pingxiang Luxi Xuanfeng 20MWp distributed PV power plant, Nanchang Jiangxi Isuzu
Automobile parking lot roof 6.3MWp distributed PV power generation project with a total power capacity of 17.5MWp funded by
the fund raised from the non-public A-share issuance were put into production. By the end of the 2016, the total capacity of PV
power plants of the Company reached about 19.5MWp.The products have created stable income and profit for the Company. As the
Company expected changes in the government’s PV power generation policies, the Company proactively adjusted the strategy and
slowed down the development of PV power plants. The Company plans to use the remaining fund that is originally planned to fund
PV power plants to permanently replenish the Company’s working capital. The Company will continue paying attentions to the latest
national policies and determine the future development of the PV and new energy business according to the Company’s conditions.
4. Construction and sales of Fangda Town
The Company holds two property projects: Shenzhen Fangda Town and Nanchang Phoenix Land Project. Fangda Town project
is a renovation project, while Nanchang Phoenix prject is an office building and business apartment project. In the report period, the
Fangda Town project has been implemented as progressed. Phase I has been finished and put into sales. In the report period, 52,800
m2 has been sold, of which the sales of 48,400 m2 has been recognized with the remainder to be recognized in 2017. The project will
substantially increase the Company’s assets, bring stable cash flow and lease income for the Company, supporting the Company’s
future demand for capital. The Nanchang Phoenix Land project was not started in the report period.
(1) Industry development and impacts on the Company's future business and profitability
China Fangda Group Co., Ltd. 2016 Annual Report
The Provisional Measures on Strengthening and Improving Urban Renovation issued by the Shenzhen People’s Municipal
Government has shown its standpoint to encourage renovation of old industrial zones and land. As a pioneering city of urban
renovation, Shenzhen has turned the urban renovation plan onto the fast track. Currently, renovation of industrial land has become
the source of R&D buildings.
According to the forecast of Savills, Shenzhen will have nearly 23 million m2 of industrial land in the next five years, including
8 million m2 of R&D buildings, mainly in Nanshan, Longgang and Bao'an District, 50% of which will be supplied by urban
renovation projects. About 3.5 million m2 and 1.9 million m2 of grade-A office buildings will be delivered in Shenzhen in 2017 and
2018 respectively. About 1.44 million m2 and 0.99 million m2 of R&D buildings will be delivered in 2017 and 2018 respectively.
The Shenzhen R&D building market will remain slightly undersupplied in the future.Therefore, the renovation of industrial land and
de-stocking will have small impacts on the Company’s future business performance and profitability.
(2) Main business model, landscape, market position and competitiveness of the Company
The main business model of the Company is establishing a property company to independently develop each real estate project.
The 5A office building of the Fangda Town project mainly serves as the headquarters. In addition to the part reserved for self-use, the
other part will be leased and sold. The commercial property is held by the Company. Nanchang Phoenix Land project comprises
office building and business apartments and will be leased and sold.
Fangda Town is located in the Dashahe Innovation Corridor, near the Nanhan Hi-tech Park.
(3) Real estate reserve
The Company has no land reserve and is not engaged in primary land development. In addition to Fangda Town project and
Nanchang Phoenix Land project, the Company has no other project and land to be developed.
(4) Real estate development
Project under Interests Floor area (m2) Building are Finished building Estimated total Invested amount
construction percentage (m ) are (m2) investment (in (in RMB100
RMB100 million)
million)
Fangda Town 100% 35,397.6 212,400 140,218.74 25 17.01
(5) Project sales in the report period
Sold area
Project under with income
Interests percentage Sellable area (m2) Sold area (m2)
construction recognized
(m2)
Fangda Town 100% 93.086.25 52,863.60 48,441.5
(6) Real estate lease
Form City Interests Floor area (m2) Lease ratio
percentage
Office building Shenzhen 100% 26,040.55 69.91%
Plant Jiangxi 100% 45,586.14 75.22%
Commercial Ningbo 100% 96.75 100%
residence
(7) Operating income, cost and gross margin
In the report period, Fangda Town project realized an operating income of RMB1,784,378,200 with an operating cost of
China Fangda Group Co., Ltd. 2016 Annual Report
RMB633,826,300 and gross margin rate of 64.48%. The Nanchang Phoenix Land project was not started in the report period.
(8) Financing in the report period
Financing Currency Balance (in RMB) Financing cost (interest rate) Due date Pledge
source /guarantor
Bank loan RMB 922,169,568.24 Interval rate, between 10% 2023-2-11 Pledge of shares of
below the benchmark Fangda Property and
interest rate and 60% above guarantee made by the
the benchmark interest rate Company
on the withdrawal date
(9) Development strategy and operation plan in the next year
Based on the renovation policy of three types of land and renovation plan of Shenzhen, the Company will continue seeking
opportunities of industrial land renovation. Such projects will comprise 5A office buildings for self-use and lease. Fangda Property
has emerged as a professional property company and one of the Top 10 Potential Enterprise elected by the Shenzhen Real Estate
Industry Association.
In 2017, the Company plans to finish the development, sales and lease of Fangda Town and start the development of Nanchang
Phoenix Land project.
In 2017, the planned sales area of Fangda Town is about 40,000 m2. In 2017, the Company will not apply for more loans for
Fangda Town project and will apply for loans for the development of the Nanchang Phoenix Land project.
5. Awards
In the report period, the Company received a series of quality, employment and creditability prizes and honors, such as the
Top 500 Enterprises in Guangdong, Top 100 Manufacturers in Guangdong, Top 100 Private Enterprises in Guangdong, Top 100
Enterprises in Shenzhen.
Fangda Jianke is awarded as one of the Top 100 in Construction Curtain Wall industry. Several projects won the Luban Prize,
National High-Quality Project Prize, China Construction Project Decoration Prize, Guangdong Outstanding Construction Decoration
Prize and Shenzhen Decoration Jingpeng Prize.
The railway station screen door system developed by Fangda Automatic is awarded as the National Torch Project by the
National Scientific and Technology Department. The Company won the prize of Outstanding Prize to Shenzhen Subway Line No.9
and 11, Shenzhen Scientific and Technological Progress Prize II and 2016 Shenzhen Fucai Cup QCC Achievement Prize.
Fangda Jiangxi New Material is awarded as an outstanding hi-tech company in Nanchang, AAA Creditability Company in
Jiangxi in 2015, outstanding enterprise in the Hi-tech zone in Nanchang, Outstanding Brand in the Compound Metal Industry in
2016.
Fangda Property is awarded as one of the Top 10 Potential Enterprises in Shenzhen.
6. Technological progress and innovation
The Company adheres to the development strategy of focusing on technological innovation. In 2016, the Company completed
13 technological projects, including 11 new product development projects, 2 improvement projects and obtained 17 parents,
including 10 invention patents. Currently, the Company has 762 parents (including 4 international PCT patents) and 8 software
copyrights. In the report period, Dongguan Fangda New Material passed the certification as a national hi-tech company. So far, the
Company has four subsidiaries that have passed the certification.
China Fangda Group Co., Ltd. 2016 Annual Report
2. Main business analysis
1. Summary
For details see Management Discussion and Analysis – 1. Profile
2. Income and costs
(1) Turnover composition
In RMB
2016
Proportion in Proportion in YOY change (% )
Amount Amount
operating costs (%) operating costs (%)
Total turnover 4,203,866,173.72 100% 2,550,467,494.78 100% 64.83%
Industry
Metal production 2,042,947,811.82 48.60% 2,125,881,648.28 83.35% -3.90%
Railroad industry 327,766,817.78 7.80% 258,278,535.47 10.13% 26.90%
New energy industry 29,742,249.70 0.71% 149,151,356.13 5.85% -80.06%
Real estate 1,784,378,167.91 42.45%
Others 19,031,126.51 0.45% 17,155,954.90 0.67% 10.93%
Product
Curtain wall system
2,042,947,811.82 48.60% 2,125,881,648.28 83.35% -3.90%
and materials
Subway screen door
327,766,817.78 7.80% 258,278,535.47 10.13% 26.90%
and service
PV power generation
29,742,249.70 0.71% 149,151,356.13 5.85% -80.06%
and LED products
Real estate sales 1,784,378,167.91 42.45%
Others 19,031,126.51 0.45% 17,155,954.90 0.67% 10.93%
District
In China 4,177,161,780.92 99.00% 2,480,678,272.83 97.26% 68.39%
Out of China 26,704,392.80 1.00% 69,789,221.95 2.70% -61.74%
(2) Industries, products or districts that take more than 10% of the Companys business turnover or profit
√ Applicable □ Inapplicable
Whether the Company needs to comply with disclosure requirements of special industries
Yes
China Fangda Group Co., Ltd. 2016 Annual Report
Property development and decoration industries
The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure
Guideline No.6 – Listed Companies Engaged in Decoration Business.
In RMB
Year-on-year Year-on-year Year-on-year
Turnover Operation cost Gross margin change in change in change in gross
operating revenue operating costs margin
Industry
Metal production 2,042,947,811.82 1,731,942,410.97 15.22% -3.90% -3.21% -0.61%
Real estate 1,784,378,167.91 633,826,318.49 64.48%
Railroad industry 327,766,817.78 251,310,978.28 23.33% 26.90% 24.01% 1.79%
Product
Curtain wall
system and 2,042,947,811.82 1,731,942,410.97 15.22% -3.90% -3.21% -0.61%
materials
Real estate sales 1,784,378,167.91 633,826,318.49 64.48%
Metro screen
327,766,817.78 251,310,978.28 23.33% 26.90% 24.01% 1.79%
door
District
In China 4,177,161,780.92 2,570,078,006.89 38.47% 68.39% 20.81% 24.23%
Main business statistics adjusted in the recent one year with the statistics criteria adjusted in the report period
□ Applicable √ Inapplicable
Different business types of the Company
Business type Turnover Operation cost Gross margin
Curtain wall system and
2,042,947,811.82 1,731,942,410.97 15.22%
materials
Whether the Company runs business through the Internet
□ Yes √ No
Whether the Company runs overseas projects
□ Yes √ No
Main business statistics adjusted in the recent one year with the statistics criteria adjusted in the report period
□ Applicable √ Inapplicable
(3) The physical sales revenue is high the labor service revenue
□ Yes √ No
China Fangda Group Co., Ltd. 2016 Annual Report
(4) Performance of signed major sales contracts in the report period
√ Applicable □ Inapplicable
Yes
Property development and decoration industries
The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure
Guideline No.6 – Listed Companies Engaged in Decoration Business.
Project amount Cumulative recognized income Amount of unfinished part
Unfinished project 7,927,986,157.57 5,227,414,687.82 2,700,571,469.74
Other note
√ Applicable □ Inapplicable
Accumulative Balance of unpaid
Accumulative
recognized gross Estimated loss Settled amount amount of finished
occurred costs
margin project
Finished but not
7,097,768,053.00 1,239,280,706.00 8,150,760,542.00 186,288,217.00
settled project
Other note
√ Applicable □ Inapplicable
(5) Operation cost composition
The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure
Guideline No.6 – Listed Companies Engaged in Decoration Business.
Main business cost composition
In RMB
2016
Proportion in Proportion in
Cost composition Business type YOY change (% )
Amount operating costs Amount operating costs
(%) (%)
Curtain wall
Raw materials system and 1,124,832,846.21 64.95% 1,181,842,856.96 66.80% -1.85%
materials
Industry
In RMB
2016
Proportion in Proportion in
Industry Items YOY change (% )
Amount operating costs Amount operating costs
(%) (%)
Metal production Raw materials 1,124,832,846.21 64.95% 1,181,842,856.96 66.80% -1.85%
China Fangda Group Co., Ltd. 2016 Annual Report
Construction and
Real estate 342,870,138.09 54.13%
installation cost
Notes
(6) Change to the consolidation scope in the report period
√ Yes □ No
1. Fangda Automation (Hong Kong) Co., Ltd. indirectly controlled by the Company was set up in the report period.
The subsidiary of the Company Ganzhou Longneng New Energy Co., Ltd. controlled indirectly by the Company was liquidized in
this period. In July 2016, the Company transfers Shengyang Fangda and Shenzhen Woke that it controlled directly or indirectly to the
liquidation team specified by the People’s Court of Hunnan District of Shengyang Liaoning Tongwen Law Firm and no longer
controls the two companies. Therefore, three subsidiaries are moved out of the consolidation scope in this period.
(7) Major changes or adjustment of business, products or services in the report period
√ Applicable □ Inapplicable
In the report period, the sales of the Shenzhen Fangda Town renovation project developed by the Company reached RMB1.784
billion.
(8) Major sales customers and suppliers
Main customers
Total sales amount to top 5 customers (RMB) 1,454,218,692.42
Proportion of sales to top 5 customers in the annual sales 34.59%
Percentage of sales of related parties in top 5 customers in
0.00%
the annual sales
Information of the Company's top 5 customers
No. Customer Sales (RMB) Percentage in the annual sales
1 No.1 739,692,641.90 17.60%
2 No.2 262,182,191.44 6.24%
3 No.3 206,285,078.69 4.91%
4 No.4 132,766,624.20 3.16%
5 No.5 113,292,156.19 2.69%
Total -- 1,454,218,692.42 34.59%
Other information about major customers
□ Applicable √ Inapplicable
Main suppliers
Purchase amount of top 5 suppliers (RMB) 1,137,598,642.25
Proportion of purchase amount of top 5 suppliers in the 40.34%
China Fangda Group Co., Ltd. 2016 Annual Report
total annual purchase amount
Percentage of purchasing amount of related parties in top
0.00%
5 customers in the annual purchasing amount
Information of the Company’s top 5 suppliers
No. Supplier Purchase amount (RMB) Percentage in the annual purchase amount
1 No.1 741,033,862.27 26.28%
2 No.2 134,490,362.32 4.77%
3 No.3 99,099,000.00 3.51%
4 No.4 93,275,792.52 3.31%
5 No.5 69,699,625.14 2.47%
Total -- 1,137,598,642.25 40.34%
Other information about major suppliers
□ Applicable √ Inapplicable
3. Expenses
In RMB
2016 2015 YOY change (% ) Notes
Mainly due to the decrease in the
Sales expense 59,273,046.14 75,264,951.18 -21.25% advertisement and business promotion
expense
Administrative expense 171,922,091.39 167,405,776.25 2.70%
Mainly due to the decrease in the
Financial expenses 28,255,397.43 50,672,490.05 -44.24%
current capital loan
4. R&D investment
√ Applicable □ Inapplicable
None
R&D investment
2016 2015 Change
R&D staff number 459 351 30.77%
R&D staff percentage 19.54% 15.08% 4.46%
R&D investment amount
113,321,489.31 105,200,255.72 7.72%
(RMB)
Investment percentage in
2.70% 4.12% -1.42%
operation turnover
Capitalization of R&D 0.00 0.00
China Fangda Group Co., Ltd. 2016 Annual Report
investment amount (RMB)
Percentage of capitalization of
R&D investment in the R&D 0.00% 0.00% 0.00%
investment
Reason for the increase in the percentage of R&D investment in the business turnover
√ Applicable □ Inapplicable
The sales amount of the Fangda Town project is large. Therefore, the percentage of R&D investment in operating revenue has been
decreased.
Explanation of the increase in the capitalization of R&D investment
□ Applicable √ Inapplicable
5. Cash flow
In RMB
Items 2016 2015 YOY change (% )
Sub-total of cash inflow from
3,711,200,293.75 2,219,602,450.52 67.20%
business operations
Sub-total of cash outflow from
3,245,483,218.83 2,579,717,564.56 25.81%
business operations
Cash flow generated by
465,717,074.92 -360,115,114.04
business operations, net
Sub-total of cash inflow
575,207,720.42 397,636,935.30 44.66%
generated from investment
Subtotal of cash outflows 686,658,608.57 213,169,919.71 222.12%
Cash flow generated by
-111,450,888.15 184,467,015.59 -160.42%
investment activities, net
Subtotal of cash inflow from
2,112,173,978.78 1,764,927,828.86 19.67%
financing activities
Subtotal of cash outflow from
1,780,430,903.66 1,444,458,573.58 23.26%
financing activities
Net cash flow generated by
331,743,075.12 320,469,255.28 3.52%
financing activities
Net increase in cash and cash
688,085,331.62 145,101,011.59 374.21%
equivalents
Explanation of major changes in related data from the same period last year
√ Applicable □ Inapplicable
The net cash flow generated by operating activities increases by RMB825,832,200 from the same period last year. It is mainly
attributable to the collection of sales amounts in the report period.
Explanation of major difference between the cash flow generated by operating activities and the net profit in the year
China Fangda Group Co., Ltd. 2016 Annual Report
□ Applicable √ Inapplicable
3. Non-core business analysis
√ Applicable □ Inapplicable
In RMB
Amount Profit percentage Reason Whether continuous
Mainly gain from disposal of
financial assets held for sales
and gain from
Investment income 61,228,848.36 7.12% re-measurement of 否
remaining interests at fair
value after losing the control
power on Shenyang Fangda
Gain/loss caused by
Adjustment of fair value of
changes in fair 16,862,823.13 1.96% No
investment real estate
value
Mainly receivable bad debt
impairment provision,
inventory depreciation
provision made for SOZN
Assets impairment 197,907,957.26 23.01% No
and assets impairment
provision made for enforced
liquidation of Shenyang
Fangda
Governmental subsidy,
Non-operating
18,327,500.52 2.13% income from VAT rebate and No
revenue
income from sales of waste
Mainly loss from disposal of
Non-business
6,945,905.31 0.81% fixed assets and debt No
expenses
reorganization
4. Assets and liabilities
1. Major changes in assets composition
In RMB
End of 2016 End of 2015
Change
Proportion in Proportion in Notes
Amount Amount (% )
total assets total assets
Monetary capital 1,095,229,837. 16.14% 400,953,337.32 8.98% 7.16% Mainly due to cash obtained from sales
China Fangda Group Co., Ltd. 2016 Annual Report
90 of Fangda Town property
Mainly due to mortgage payment
Account 2,342,929,628. 1,405,718,134.
34.52% 31.49% 3.03% increase from sales of Fangda Town
receivable 14
property
Mainly due to increase in Fangda Town
1,990,621,059. 1,346,591,303.
Inventory 29.33% 30.16% -0.83% and Phoenix project development costs
27
and product development costs
Investment real 333,795,631.3
4.92% 335,328,805.74 7.51% -2.59%
estate
Long-term share
12,105,030.68 0.18% 10,489,680.93 0.23% -0.05%
equity investment
506,819,266.3
Fixed assets 7.47% 462,648,998.51 10.36% -2.89%
Construction in
2,537,725.36 0.04% 15,134,390.90 0.34% -0.30%
process
591,000,000.0 1,147,957,775.
Short-term loans 8.71% 25.72% -17.01% Repayment of mature borrowing
0
922,169,568.2 Mainly due to increase in loans for the
Long-term loans 13.59% 300,395,582.06 6.73% 6.86%
4 Fangda Town project
2. Assets and liabilities measured at fair value
√ Applicable □ Inapplicable
In RMB
Accumulative
Gain/loss changes in fair
Impairment Amount
Opening caused by value Amount sold in Closing
Items provided in the purchased in
amount changes in fair accounting into the period amount
period the period
value the income
account
Financial assets
1. Financial
assets measured
at fair value
with variations
accounted into
14,546,206.58 -1,099,400.09 16,503,917.42 0.00
current income
account
(excluding
derivative
financial assets)
China Fangda Group Co., Ltd. 2016 Annual Report
2. Derivative
412,128.63 2,232,200.00 2,232,200.00
financial assets
Subtotal 14,546,206.58 -687,271.46 2,232,200.00 16,503,917.42 2,232,200.00
Investment real 303,090,562.
304,615,212.53 17,550,094.59 91,831.63 13,082,954.01
estate
305,322,762.
Total 319,161,419.11 16,862,823.13 91,831.63 2,232,200.00 29,586,871.43
Financial
0.00 0.00 0.00 0.00 0.00 0.00
liabilities
Major changes in the assets measurement property of the Company in the report period
□ Yes √ No
3. Right restriction of assets at the end of the period
Items Closing book value Reason
Bank deposits 728,405.91 Frozen deposit
Other monetary capital 158,676,856.59 Deposit
Fixed assets 74,379,007.79 Borrowing pledge or frozen by a court
Investment real estate 296,740,660.63 Loan by pledge
100% stake in Fangda Property 200,000,000.00 Loan by pledge
Development held by the
Company
Total 730,524,930.92
5. Investment
1. General situation
□ Applicable √ Inapplicable
2. Major equity investment in the report period
□ Applicable √ Inapplicable
3. Major non-equity investment in the report period
□ Applicable √ Inapplicable
China Fangda Group Co., Ltd. 2016 Annual Report
4. Financial assets investment
(1) Securities investment
√ Applicable □ Inapplicable
In RMB
Accumu
lative
Gain/los changes
s caused in fair Amount Amount
Initial Account Opening Closing
Securiti Abbrevi by value purchas sold in Gain/los Account Capital
Code investm ing book book
es ation changes accounti ed in the the s ing item source
ent cost method value value
in fair ng into period period
value the
income
account
Domesti Sino Oil Measure Transact
c and Gas 16,263, ment at 14,546, -1,099,4 16,503, 1,957,7 ional Self-ow
00702 0.00
overseas Holding 675.00 fair 206.58 00.09 917.42 10.84 financia ned fund
shares s Ltd value l assets
16,263, 14,546, -1,099,4 16,503, 1,957,7
Total -- 0.00 0.00 0.00 -- --
675.00 206.58 00.09 917.42 10.84
Disclosure date of approval
by the Board of Directors 11.03.14
of securities investment
Disclosure date of
securities investment
approval by the
Shareholders’ Meeting (if
any)
(2) Derivative investment
√ Applicable □ Inapplicable
In RMB10,000
Proporti Actua
Derivati Impairm on of l
Initial Amount Closing
ve Related Amount ent closing gain/l
Relation Initial Start investm sold in investm
investm transacti Type End date in this provisio investm oss in
ship amount date ent this ent
ent on period n (if ent the
amount period amount
operator any) amount report
in the period
China Fangda Group Co., Ltd. 2016 Annual Report
closing
net
assets in
the
report
period
Shangha
Shanghai
i Futures 14,133.6 14,133.6 845.0
None No aluminu 02.03.16 15.08.17 7,912.87 6,220.78 2.63%
Exchang 5 5
m
e
14,133.6 14,133.6 845.0
Total -- -- 0 7,912.87 6,220.78 2.63%
5 5
Capital source Self-owned fund
Lawsuit (if any) None
Disclosure date of derivative
investment approval by the Board of
Directors (if any)
Disclosure date of derivative
investment approval by the
Shareholders’ Meeting (if any)
Risk analysis and control measures
To prevent the risk of fluctuation of raw material prices, the Company adopted the
for the derivative holding in the report
aluminum futures exchanged at the domestic futures exchange to provide hedging for
period (including without limitation
aluminum as a raw material for the Company. The Company has set up and implemented the
market, liquidity, credit, operation and
Provincial Regulations on China Fangda Group Domestic Futures Hedging to prevent risks.
legal risks)
Changes in the market price or fair
value of the derivative in the report
period, the analysis of the derivative’s
Fair value of derivatives are measured at open prices in the futures market
fair value should disclose the method
used and related assumptions and
parameters.
Material changes in the accounting
The Company decides to implement the Temporary Provisions on the Accounting of
policies and rules related to the
Commodity Futures Hedging for its aluminum ingot futures contracts in the report period
derivative in the report period
and no longer implement the Enterprise Accounting Standard No.24 – Hedging
compared to last period
Opinions of independent directors on
the Company’s derivative investment None
and risk controlling
China Fangda Group Co., Ltd. 2016 Annual Report
5. Use of raised capital
√ Applicable □ Inapplicable
(1) Overview
√ Applicable □ Inapplicable
In RMB10,000
Amount of
Accumulat
raised Proportion
ive amount Amount of
Total capital of of raised Total
Total Total of raised Use plan raised
Year of Method of accumulati which the capital of accumulati
amount of amount capital of of retained capital not
fund fund ve raised purpose which the ve raised
the raised used in which the fund from used in
raising raising capital was purpose capital
capital this period purpose financing more than
used changed in has been used
has been two years
the report changed
changed
period
Fund
Private
2016 45,986.92 20,204.16 20,204.16 0 0 0.00% 25,782.76 raising
issuing
project
Total -- 45,986.92 20,204.16 20,204.16 0 0 0.00% 25,782.76 --
Notes to use of raised capital
The Company
received the Reply
to the Non-public
Share Issuance of
Fangda China
Group Co., Ltd.
(CSRC License
[2016] No.825) to
allow the Company
to issue 32,184,931
Account
shares at the price of Bank account Balance
type
RMB14.60/share. A
total of
RMB469,899,992.6
0 will be raised. The
net amount will be
RMB459,869,219.8
8 after the issuance
expense of
RMB10,030,772.72
is deducted. The
China Fangda Group Co., Ltd. 2016 Annual Report
fund will be
received on July 15,
2016. Grant
Thornton (limited
liability partnership)
will verify the fund
and issue the Capital
Verification Report
[Grant Thornton
Verification (2016)
350ZA0055]. The
Company will open
a special account to
save the fund. (2)
Amount used in this
year In 2016,
RMB72,072,475.39
was directly
invested,
RMB129,969,219.8
8 was used to
permanently
replenish the
working capital,
RMB200,000,000.0
0 was used to
temporarily
replenish the
working capital.
RMB41,000,000.00
was used to
purchase financial
products. By
December 31, 2016,
totally RMB
72,072,475.39 has
been directly
invested,
RMB129,969,219.8
8 used to
permanently
replenish working
capital,
RMB200,000,000.0
China Fangda Group Co., Ltd. 2016 Annual Report
0 used to
temporarily
replenish working
capital,
RMB41,000,000.00
used to purchase
financial products,
and
RMB16,827,524.61
is not used. 2.
Management of
raised fund (1) the
Company has
formulated the
Regulations for
Management Raised
Fund to comply
with related
regulations and
protect investors’
interests. The
Regulations has
been reviewed and
passed at the 22nd
meeting of the 7th
Board of Directors
held on July 29,
2016. The
Company started to
manage the raised
fund in the special
account from July
2016 and signed the
Raised Fund
Account
Management
Agreement with the
deposit bank to
regulate the use and
management of the
raised fund. By
December 31, 2016,
the Company has
strictly complied
China Fangda Group Co., Ltd. 2016 Annual Report
with the agreement
in using and
depositing the raised
fund. (2) The
deposit of the raised
fund by December
31, 2016 is as
follows:
Deposit bank:
CITIC Bank,
Special
Shenzhen OCT 8110 3010 1520 0104 050 1,693,291.37
account
Sub-branch
CCB, Shenzhen Special
4425 0100 0007 0000 0304 1,184,933.49
OCT Sub-branch account
China Merchants
Bank, Shenzhen Special
7559 3103 9910 803 14,542,541.00
Nanshan account
Sub-branch
Total 17,420,765.86
(2) Promised raised-capital-based projects
√ Applicable □ Inapplicable
In RMB10,000
If
Investme Date
investme Promised Accumul
Project promised to be nt when the Whether Any
nt project total Adjusted Investme ative Profit
invested with the raised progress project the major
is investme total nt in the investme realized
capital and investment by the become estimate change in
changed nt of the investme report nt by the in the
of the excessive raised end of the useable profit is the
(includin raised nt (1) period end of the period
capital period (3) as realized feasibility
g partial capital period (2)
＝(2)/(1) proposed
change)
Promised investment projects
1. Jiangxi Pingxiang
Luxi 13MWp
No 10,898 10,898 5,050.35 5,050.35 46.34% 28.06.16 567.44 Yes No
distributed PV power
plant project
2. Jiangxi Pingxiang
Xiangdong 20MWp
No 16,800 16,800 201.23 201.23 1.20% 30.06.18 No Yes
distributed PV power
plant project
Phase I of the Jiangxi No 3,612 3,612 1,955.66 1,955.66 54.14% 08.05.16 281.77 Yes No
China Fangda Group Co., Ltd. 2016 Annual Report
Nanchang Isuzu
Automobile parking lot
roof 6.3MWp
distributed PV power
generation project
4. Phase II of the
Jiangxi Nanchang
Isuzu Automobile
parking lot roof No 1,680 1,680 0.00% 30.06.18 No Yes
6.3MWp distributed
PV power generation
project
5. Replenishing
No 12,996.92 12,996.92 12,996.92 12,996.92 100.00% Yes No
working capital
Subtotal of promised
-- 45,986.92 45,986.92 20,204.16 20,204.16 -- -- 849.21 -- --
investment projects
Investment of excessive raised capital
None
Total -- 45,986.92 45,986.92 20,204.16 20,204.16 -- -- 849.21 -- --
Since national policies on PV power generation have changed significantly and the predicted benefits
decrease, the Company determines to terminate the development of the Jiangxi Pingxiang Xiangdong
20MWp distributed PV power plant project and Phase II of the Jiangxi Nanchang Isuzu Automobile
Reason or situation that parking lot roof 6.3MWp distributed PV power generation project. The unused fund of the two projects
not on schedule (on will be used to permanently replenish the working capital. The Company will restart the investment with
specific project) its self-owned capital when the Company sees fit. The Company will continue paying attentions to the
latest national policies and determine the future development of the PV and new energy business according
to the Company’s conditions. The proposal needs to be reviewed and passed at the general shareholders’
meeting.
Notes to major changes
National PV power generation policies have changed substantially, loweing the estimated profits.
in project feasibility
Amount, purpose and Inapplicable
use of excessive raised
capital
Changes in Inapplicable
implementation place
of investment funded
by raised capital
Adjustment of the Inapplicable
implementation way of
investment funded by
raised capital
China Fangda Group Co., Ltd. 2016 Annual Report
Initial use of raised Applicable
fund in projects and
replacement
Applicable
On December 16, 2016, the Company held the 25th Meeting of the 7th Board of Directors to review and
approve the Proposal on Using Part of the Idle Raised Fund to Temporarily Replenish the Working Capital.
Idle raised capital used
According to the proposal, the Company will use RMB200 million of the idle raised fund to replenish the
as working capital
working capital for no more than 12 months upon the approval of the proposal by the Board of Directors.
When the period expires, the fund will be returned to the account of the raised fund. The Company used
RMB200 million to temporarily replenish the working capital on December 19.
Surplus of investment Applicable
and cause
Use plan of retained
fund from financing
Problem or situation in
using of raised capital None
and disclosing
(3) Altering of projects financed by raised capital
□ Applicable √ Inapplicable
None
6. Major assets and equity sales
1. Major assets sales
□ Applicable √ Inapplicable
The Company sold no assets in the report period.
2. Major equity sales
□ Applicable √ Inapplicable
7. Analysis of major joint stock companies
√ Applicable □ Inapplicable
Major subsidiaries and joint stock companies affecting more than 10% of the Company’s net profit
In RMB
Main Registered Operation
Company Type Total assets Net assets Turnover Net profit
business capital profit
China Fangda Group Co., Ltd. 2016 Annual Report
Fangda Curtain wall 500,000,000. 2,728,743,94 823,023,329. 1,849,540,61 70,792,157.0 48,231,107.7
Subsidiary
Jianke system 00 0.95 64 6.97 9
Fangda 200,000,000. 3,142,751,26 314,526,312. 1,784,378,16 740,855,893. 554,923,445.
Subsidiary Real estate
Property 00 9.54 48 7.91 46
Acquisition and disposal of subsidiaries in the report period
□ Applicable √ Inapplicable
Major joint-stock companies
8. Structural entities controlled by the Company
□ Applicable √ Inapplicable
9. Future Prospect
(1) Competition map and development trned
1. Curtain wall and material system industry
As China continues urbanizing, the demand for construction curtain walls will grow rapidly, fueling the development of the
curtain wall industry. Over recent years, a series of industry policies will be issued to push forward the industry, providing a gold
opportunity for the development of energy-saving curtain wall and material business.
2. Rail transport equipment business
As the Chinese government continues to implement the “One Road, One Belt” and “Chinese Manufacturing Plan 2025”
strategies, the Chinese urban railway transportation has been developed rapidly, turning the subway screen door business onto a fast
track. By the end of 2016, a total of 130 subway lines have been running in more than 29 cities with a total length of 3,849 km. More
than 100 lines in more than 40 cities are under construction with a total length of more than 3,000 km. The year 2016 is the first year
of the 13th five-year plan period. The National Reform and Development Commission approved the applications of rail transport
construction of about 8,600 km in 43 cities.
3. New energy industry
In 2016, the total production value of the PV industry in China reached RMB336 billion, up 27% year on year. The production
value takes up more than 50% of the global aggregate. The Ministry of Industry and Information Technology predicts that the
industry will remain stable in 2017. However, the adjustment of the on-grid electricity price causes a rush of new market players and
PV power plant construction plans, which leads to a fluctuation in the industry in China.
4. Real estate
As the land resource in cities becomes increase scarce, city renovation will become a common task for all major cities. The
limited land resource has also become a bottleneck for the development of Shenzhen. City renovation provides a low-cost solution
for this problem and is largely supported by the government. The project is well positioned in the cross of the Dashahe innovation
corridor and OCT cultural creation ring.
(2) Company development strategy and business plan
The Company is a technological and market leader in the hi-end energy-saving curtain wall industry and will benefit from the
development of the industry. The growth of the market will contribute to the Company’s profitability.
The rail transport industry is developing rapidly in China. Many Chinese cities have plans to develop rail transport. The
development of the sector is much faster than people’s expectations, boosting the development of the subway screen door industry.
The Company will enjoy from the fast development of the industry. Over recent years, the percentage of operation revenue of the
China Fangda Group Co., Ltd. 2016 Annual Report
railway transportation business has continued increasing in the Company. With years’ development, the Company has become an
industry leader in terms of market share, brand influence, standard and expertise.
As the Company expected changes in the government’s PV power generation policies, the Company proactively adjusted the
strategy and slowed down the development of PV power plants. The Company plans to use the remaining fund that is originally
planned to fund PV power plants to permanently replenish the Company’s working capital. The Company will continue paying
attentions to the latest national policies and determine the future development of the PV and new energy business according to the
Company’s conditions.
The year 2017 is an important year of the 13th Five-Year Plan period. The government will continue the supply side reform in
this year. The Company will ride the tide of national development strategies to benefit from the development of industries and
continue focusing on quality and efficiency. The Company will establish annual business and management targets and seek to fulfill
annual operation gains, building the path of continuous development.
In 2017, the Company will focus on the south China curtain wall and material industry and also pay attention to high quality
projects and customers in the Yangtze River, Beijing-Tianjin and Chengdu-Chongqing districts. The Company will also seek
opportunities to grow globally. The Company will continue to consolidate its leadership in the domestic rail transport equipment
industry by following the “One Road, One Belt” strategy and seek to expand its overseas business. The Company will further
strengthen the domestic and overseas sales teams to ensure adequate market exploration and project implementation resources for the
long-term development of the Company. The Company will continue strengthening cost management, optimizing the personnel
structure, reinforcing risk awareness and controlling internal risks.The Company will continue implementing the Fangda Town
project and start the development of the Nanchang Phoenix Land project.
(3) Capital demand and source for projects in progress
To realize the business target in 2017, the Company will develop suitable financial and capital plans, accelerate the collection
of accounts receivable, sales payment from sales of Fangda Town, expand financing channels, and use share issuance, bank loans and
other financing products to meet the demand for capital.
(4) Risks and solutions
1. Market risks and measures
As the overall designing and engineering quality continues improving in the domestic construction curtain wall industry,
curtain wall products will become increasingly standard, intensifying the market competition. The Company will continue
implementing a prudent operation strategy, fine management and technical innovation to lower the management costs and accelerate
the recovery of receivables. Through new technologies and processes, we will improve product quality, lower costs and elevate
earnings. While consolidating the domestic market, the Company will step up the efforts in exploring overseas markets, thus
elevating our competitiveness in global markets and improving our resistance to risks.
2. Management risks and measures
With an increase in orders in recent years and operation of five industry bases, the Company has continued expanding rapidly
in terms of capitalization, business and teams. The organizational structure and management system have become more complicated,
leading to management risks in industry expansion. The Company will continue to improve the matrix management mode, integrate
business management, optimize the business flow, seeking to build a high-efficient and solid management team. We will introduce
high-quality, professional technical and management talents in different fields to strengthen the Company's core competitiveness.
3. Production and operation risks and measures
The macro-economy and market demand have added to the fluctuation in prices of main raw materials such as aluminum and
steel and labor, affecting the Company’s profitability and creating additional production and operation risks for the Company. The
Company has sought to lower the purchase and production costs, pay attention to technical R&D, reduce consumption of raw
materials, introduce automatic and intelligent production equipment, strengthen staff training to improve working efficiency.
4. Solar PV power plant risks and measures
China Fangda Group Co., Ltd. 2016 Annual Report
The industry is closely related to policies of the local government. Changes in policies will have large impacts on the industry. The
Company will continue paying attentions to the development of the industry. The Company will conduct adequate verification on
project feasibility, control costs, quality and schedules strictly, and improve its development, construction and maintenance
capabilities.
X. Acceptance of surveys, negotiation and visits
1. Reception of investigations, communications, or interviews in the reporting period
√ Applicable □ Inapplicable
Time/date Way Visitor Disclosure of information
Investor Relationship Record Form on
12.01.16 Onsite investigation Institution
www.cninfo.com.cn
Investor Relationship Record Form on
07.03.16 Onsite investigation Institution
www.cninfo.com.cn
Investor Relationship Record Form on
11.03.16 Onsite investigation Institution
www.cninfo.com.cn
Investor Relationship Record Form on
16.03.16 Onsite investigation Institution
www.cninfo.com.cn
Investor Relationship Record Form on
13.05.16 Onsite investigation Institution
www.cninfo.com.cn
Investor Relationship Record Form on
24.05.16 Onsite investigation Institution
www.cninfo.com.cn
Investor Relationship Record Form on
16.08.16 Onsite investigation Institution
www.cninfo.com.cn
Investor Relationship Record Form on
08.09.16 Onsite investigation Institution
www.cninfo.com.cn
Investor Relationship Record Form on
03.11.16 Onsite investigation Institution
www.cninfo.com.cn
Investor Relationship Record Form on
17.11.16 Onsite investigation Institution
www.cninfo.com.cn
TIme
Number of institutes
Number of individuals
Number of other visitors
Disclosure of any non-public information No
China Fangda Group Co., Ltd. 2016 Annual Report
V Significant Events
1. Profit distribution and reserve capitalization plan
Establishment, implementation or adjustment of profit distribution policies especially the cash dividend policy during the report
period
√ Applicable □ Inapplicable
During the report period, the Company implemented the profit distribution plan for 2015. Approved at the Shareholders' Meeting
2015 held on 17.05.17, the Company's profit distribution plan for 2015 is distributing a cash dividend of RMB1.00 (tax-included) for
every ten shares of all the shareholders based on a total of 756,909,905 shares on 31.12.2015. The plan was implemented on 27.05.16
(see the 2015 Share Equity Distribution Implementation Announce 2016-25).
Explanation of Cash Dividend Distribution Policies
Comply with the Articles of Association or resolution made at
Yes
the General Shareholders' Meeting
Clear and definite distribution standard and proportion Yes
Decision-making procedure and mechanism Yes
Independent directors fulfill their duties Yes
Middle and small shareholders express their opinions and claims.
Yes
There rights are well protected.
Cash dividend distribution policies are adjusted or revised
Yes
according to law
Profit distribution and reserve capitalizing pre-plans or plans over the recent three years (including the reporting period)
2014: A cash dividend of RMB0.30 (including tax) for each ten shares is issued to all shareholders on the basis of 756,909,905 shares
with a total amount of RMB 22,707,297.15, on 31.12.14. No dividend share or capitalization share is issued in the year.
2015: A cash dividend of RMB1.00 (including tax) for each ten shares is issued to all shareholders on the basis of 756,909,905 shares
with a total amount of RMB 75,690,990.50, on 31.12.15. No dividend share or capitalization share is issued in the year.
2016: A cash dividend of RMB3.50 (including tax) for each ten shares is issued to all shareholders on the basis of 789,094,836 shares
with a total amount of RMB 276,183,192.60, on 31.12.16. Five shares will be issued for every ten shares to all shareholders through
capitalization of capital reserve. No dividend share will be issued in this year.
Distribution of cash dividend over the recent three years (including this period)
In RMB
Net profit Proportion in the net
attributable to project attributable Proportion of cash
Cash dividend Cash dividend paid
Year shareholders in the to shareholders in dividend paid in
(including tax) in other manners
consolidated the consolidated other manners
financial statements financial statements
2016 276,183,192.60 697,956,378.23 39.57% 0.00 0.00%
2015 75,690,990.50 107,272,369.77 70.56% 0.00 0.00%
China Fangda Group Co., Ltd. 2016 Annual Report
2014 22,707,297.15 96,998,429.76 23.41% 0.00 0.00%
Cash dividend proposed despite the Company records profits in the report period and a positive undistributed profit/
□ Applicable √ Inapplicable
2. Profit Distribution and Reserve Capitalization Plan in the Report Period
√ Applicable □ Inapplicable
Bonus shares for every ten shares
Cash dividend for every ten shares (yuan,
3.50
tax-included)
Shares capitalized for every 10 shares
A total number of shares as the distribution basis 789,094,836
Total cash dividend (yuan, including tax) 276,183,192.60
Distributable profit (yuan) 1,016,820,576.30
Proportion of cash dividend in the distributable
100.00%
profit
Cash dividend
The Company is in a fast growth stage. Therefore, the cash dividend will reach 20% of the profit distribution at least.
Details of profit distribution or reserve capitalization plan
The Company plans to distribute a cash dividend of RMB3.50 (including tax) for each ten shares issued to all shareholders on the
basis of 789, 094,836 shares with a total amount of RMB276,183,192.60, on 31.12.16. Five shares will be issued for every ten
shares to all shareholders through capitalization of capital reserve. No dividend share will be issued in this year. The plan needs to
be reviewed and approved at the General Shareholders' Meeting 2016.
3. Performance of promises
1. Commitments that have been fulfilled and not fulfilled by actual controller, shareholders, related parties,
acquirers of the Company
√ Applicable □ Inapplicable
Promised issue Promiser Type Commitment Date Term Fulfillment
Share reform None
Commitments made in acquisition
None
reports or equity change reports
Commitments made during assets
None
reorganization
Caitong Fund; Share sales Shares offered
Commitments made during initial
Changzhou restriction in the 01.08.16 12 months In fulfillment
public offering or re-financing
Investment commitment non-public
China Fangda Group Co., Ltd. 2016 Annual Report
Group, First share issuance
Capital in 2015 will
Securities, be locked for
Fullgoal 12 months
Assets from the date
Management of listing
Co., Ltd.,
Sinomach
Finance Co.,
Ltd.,
Minsheng
Tonghui Asset
Management
Co., Ltd. and
Ping An-UOB
Fund
Management
Co., Ltd.
Share option incentive None
Other commitments made to
None
small-to-middle shareholders
Timely fulfillment Yes
If a commitment is not fulfilled
timely, the reason should be explained
Inapplicable
and the further plan should be
introduced
2. Explanation and reason of profit forecasts on assets or projects that remain in the report period
□ Applicable √ Inapplicable
4. Non-operating capital use by the controlling shareholder or related parties in the reporting
term
□ Applicable √ Inapplicable
The controlling shareholder and its affiliates occupied no capital for non-operating purpose of the Company during the report period.
5. Statement of the Board of Directors, Supervisory Committee and Independent Directors (if
applicable) on the “non-standard auditors report” issued by the CPA on the current report
period
□ Applicable √ Inapplicable
China Fangda Group Co., Ltd. 2016 Annual Report
6. Statement of changes to accounting policies, estimates and audit methods compared with
the financial report of the previous year
√ Applicable □ Inapplicable
On December 10, 2015, the Ministry of Finance issued the Temporary Provisions on the Accounting of Commodity Futures
Hedging (Accounting Doc No.18 [2015]). According to the document, Company may choose to implement this new regulation or
Enterprise Accounting Standard No.24 – Hedging. The Company chooses to implement the Temporary Provisions on the Accounting
of Commodity Futures Hedging.
On December 3, 2016, the Ministry of Finance issued the Notice on Increasing Pilot Points of Business Tax/VAT Reform (Tax
Doc No. 36 (2016)). From the implementation of the notice, amounts of assets and liabilities of transactions that occurred from May
1, 2016 and the implementation of the regulations should be adjusted.
7. Statement of retrospective restatement of major accounting errors in the report period
□ Applicable √ Inapplicable
No retrospective restatement of major accounting errors in the report period
8. Statement of change in the financial statement consolidation scope compared with the
previous financial report
√ Applicable □ Inapplicable
1. Fangda Automation (Hong Kong) Co., Ltd. indirectly controlled by the Company was set up in the report period.
The subsidiary of the Company Ganzhou Longneng New Energy Co., Ltd. controlled indirectly by the Company was liquidized in
this period. In July 2016, the Company transfers Shengyang Fangda and Shenzhen Woke that it controlled directly or indirectly to the
liquidation team specified by the People’s Court of Hunnan District of Shengyang Liaoning Tongwen Law Firm and no longer
controls the two companies. Therefore, three subsidiaries are moved out of the consolidation scope in this period.
9. Engaging and dismissing of CPA
CPA engaged currently
Domestic public accountants name Grant Thornton (limited liability partnership)
Remuneration for the domestic public accountants
(in RMB10,000)
Consecutive years of service by the domestic public
accountants
Name of certified accountants of the domestic public
Xie Peiren, Hu Gaosheng
accountants
Overseas public accountants name (if any) None
Remuneration for the overseas public accountants
(in RMB10,000)
Consecutive years of service by the overseas public None
China Fangda Group Co., Ltd. 2016 Annual Report
accountants (if any)
Name of certified accountants of the overseas public
None
accountants (if any)
Whether the CPA is replaced
□ Yes √ No
Engaging of internal control audit CPA, financial advisor and sponsor
√ Applicable □ Inapplicable
This year, the Company engaged Grand Thornton China (limited liability partnership) as the financial
statement and internal control auditing CPA with a fee of RMB1.3 million.
This year, the Company engaged China Merchants Securities as the sponsor with a sponsoring fee of RMB9,500,000 for the private
A-share issuance issue.
10. Trade suspension and termination after the disclose of the annual report
□ Applicable √ Inapplicable
11. Bankruptcy and capital reorganizing
□ Applicable √ Inapplicable
The Company has no bankruptcy or reorganization events in the report period.
12. Significant lawsuit and arbitration
□ Applicable √ Inapplicable
The Company has no significant lawsuit or arbitration affair in the report period.
13. Punishment and rectification
□ Applicable √ Inapplicable
The Company received no penalty and made no correction in the report period.
14. Credibility of the Company, controlling shareholder and actual controller
□ Applicable √ Inapplicable
15. Share incentive schemes, staff shareholding program or other incentive plans
□ Applicable √ Inapplicable
There is no share incentive schemes, staff shareholding program or other incentive plans in the report period
China Fangda Group Co., Ltd. 2016 Annual Report
16. Material related transactions
1. Related transactions related to routine operation
□ Applicable √ Inapplicable
The Company made no related transaction related to daily operating in the report period.
2. Related transactions related to assets transactions
□ Applicable √ Inapplicable
The Company made no related transaction of assets or equity requisition and sales in the report period.
3. Related transactions related to joint external investment
□ Applicable √ Inapplicable
The Company made no related transaction of joint external investment in the report period.
4. Related credits and debts
□ Applicable √ Inapplicable
The Company had no related debt in the report period.
5. Other major related transactions
□ Applicable √ Inapplicable
The Company has no other significant related transaction in the report period.
17. Significant contracts and performance
1. Asset entrusting, leasing, contracting
(1) Asset entrusting
□ Applicable √ Inapplicable
The Company made no custody in the report period.
(2) Contracting
□ Applicable √ Inapplicable
The Company made no contract in the report period
(3) Leasing
√ Applicable □ Inapplicable
China Fangda Group Co., Ltd. 2016 Annual Report
Leasing
The investment real estate is used as external leasing. The rental income in the report period is RMB26,768,249.10.
Projects that create gains accounting for over 10% of the Company’s total profit in the report period
□ Applicable √ Inapplicable
The Company leased no projects that create gains accounting for over 10% of the Company’s total profit in the report period.
2. Significant guarantee
√ Applicable □ Inapplicable
(1) Guarantee
In RMB10,000
External guarantees made by the Company and subsidiaries (exclude those made for subsidiaries)
Actual date of
Actual
Date of Guarantee occurring Type of Complete Related
Guarantee provided to amount of Term
disclosure amount (signing date of guarantee d or not party
guarantee
agreements)
Guarantee between the Company and its subsidiaries
Actual date of
Actual
Date of Guarantee occurring Type of Complete Related
Guarantee provided to amount of Term
disclosure amount (signing date of guarantee d or not party
guarantee
agreements)
since engage
of contract to
Fangda Jianke 26.04.16 48,000 06.07.16 30,426.97 Joint liability No Yes
2 years upon
due of debt
since engage
of contract to
Fangda Jianke 26.04.16 26,000 27.12.16 11,982.2 Joint liability No Yes
2 years upon
due of debt
since engage
of contract to
Fangda Jianke 26.04.16 40,000 01.11.16 11,982.2 Joint liability No Yes
2 years upon
due of debt
since engage
of contract to
Fangda Jianke 26.04.16 20,000 23.08.16 10,000 Joint liability No Yes
2 years upon
due of debt
since engage
Fangda Jianke 27.03.15 15,000 30.12.15 17,915.54 Joint liability No Yes
of contract to
China Fangda Group Co., Ltd. 2016 Annual Report
2 years upon
due of debt
since engage
of contract to
Fangda Jianke 26.04.16 20,000 17.10.16 2,980.18 Joint liability No Yes
2 years upon
due of debt
since engage
of contract to
Fangda Jianke 26.04.16 10,000 17.11.16 10,000 Joint liability No Yes
2 years upon
due of debt
since engage
of contract to
Fangda Automatic 26.04.16 21,600 06.07.16 10,559.22 Joint liability No Yes
2 years upon
due of debt
since engage
of contract to
Fangda Automatic 26.04.16 10,000 12.12.16 1,000 Joint liability No Yes
2 years upon
due of debt
since engage
of contract to
Fangda Automatic 26.04.16 10,000 27.12.16 1,131.7 Joint liability No Yes
2 years upon
due of debt
Completion
of
Fangda Automatic 13.09.16 43,951.6 13.09.16 43,951.6 Joint liability performance No Yes
of the main
contract
since engage
of contract to
Fangda New Material 26.04.16 8,000 25.05.16 2,576.34 Joint liability No Yes
2 years upon
due of debt
since engage
of contract to
Fangda Property 23.03.13 130,000 03.02.15 92,216.96 Joint liability No Yes
2 years upon
due of debt
since engage
of contract to
Fangda Group 26.04.16 20,000 12.12.16 9,000 Joint liability No Yes
2 years upon
due of debt
since engage
Fangda Group 01.07.15 20,000 08.09.15 12,358.5 Joint liability No Yes
of contract to
China Fangda Group Co., Ltd. 2016 Annual Report
2 years upon
due of debt
Total of guarantee to
Total of guarantee to subsidiaries subsidiaries actually
566,951.6 321,611.25
approved in the report term (B1) occurred in the report term
(B2)
Total of balance of
Total of guarantee to subsidiaries guarantee actually provided
696,951.6 268,081.41
approved as of the report term (B3) to the subsidiaries as of end
of report term (B4)
Guarantee provided to subsidiaries
Actual date of
Actual
Date of Guarantee occurring Type of Complete Related
Guarantee provided to amount of Term
disclosure amount (signing date of guarantee d or not party
guarantee
agreements)
Total of guarantee provided by the Company (total of the above three)
Total of guarantee occurred
Total of guarantee approved in the
566,951.6 in the report term 321,611.25
report term (A1+B1+C1)
(A2+B2+C2)
Total of guarantee occurred
Total of guarantee approved as of
696,951.6 as of the end of report term 268,081.41
end of report term (A3+B3+C3)
(A4+B4+C4)
Percentage of the total guarantee occurred (A4+B4+C4) on net
113.39%
asset of the Company
Including:
Note of immature guarantee with guarantee liabilities or possible
None
joint damage liabilities in the report period
Statement of external guarantees violating the procedure (if any) None
Note: The normal practice of the Group’s real estate business is that the Group provides periodic mortgage guarantee for house
purchasers. The periodic guarantee becomes effective on the effectiveness date of contracts and expires when housing ownership
certificates were taken over by banks and house purchasers complete the pledging formalities. By December 31, 2016, the Company
has made such periodic guarantee of RMB1.183 billion.
(2) Incompliant external guarantee
□ Applicable √ Inapplicable
The Company made no incompliant external guarantee in the report period.
China Fangda Group Co., Ltd. 2016 Annual Report
3. Entrusted cash capital management
(1) Wealth management
√ Applicable □ Inapplicable
In RMB10,000
Actual
recover
Actual
Impairme of gain
Related Earning Principal gain/loss
Type of nt Estimate and
Trustee transactio Amount Start date End date reconition recovered in the
product provision return loss in
n method actually report
(if any) the
period
report
period
Annual
Bank of Earning-pr Recove
No 2,500 05.02.16 15.02.16 yield 2,500 0 1.37 1.37
China otected red
2.00%
Annual
Bank of Earning-pr Recove
No 600 06.02.16 15.02.16 yield 600 0 0.3 0.3
China otected red
2.00%
Annual
Bank of Earning-pr Recove
No 400 06.02.16 15.02.16 yield 400 0 0.21 0.21
China otected red
2.10%
Annual
Bank of Earning-pr Recove
No 1,100 06.02.16 15.02.16 yield 1,100 0 0.54 0.54
China otected red
2.00%
Annual
Bank of Earning-pr Recove
No 4,000 02.02.16 15.02.16 yield 4,000 0 3.42 3.42
China otected red
2.40%
Annual
Bank of Earning-pr Recove
No 5,000 22.03.16 06.04.16 yield 5,000 0 5.16 5.16
China otected red
2.51%
Annual
Bank of Earning-pr Recove
No 8,800 31.05.16 05.07.16 yield 8,800 0 22.78 22.78
China otected red
2.70%
Annual
Bank of Earning-pr Recove
No 10,000 28.09.16 03.11.16 yield 10,000 0 22.68 22.68
China otected red
2.30%
Shenzhen Earning-pr Annual
Recove
branch of No otected 6,000 30.09.16 02.11.16 yield 6,000 0 14
red
China floating 2.58%
China Fangda Group Co., Ltd. 2016 Annual Report
CITIC earning
Bank
Corporati
on
Limited
Shenzhen
branch of
China Earning-pr
Annual
CITIC otected Recove
No 11,000 11.11.16 14.12.16 yield 11,000 0 24.66 24.66
Bank floating red
2.48%
Corporati earning
on
Limited
Shenzhen
branch of
China Earning-pr
Annual
CITIC otected Recove
No 1,500 30.09.16 02.11.16 yield 1,500 0 3.3 3.3
Bank floating red
2.58%
Corporati earning
on
Limited
Shenzhen
branch of
China Earning-pr
Annual
CITIC otected Immat
No 4,100 30.09.16 04.01.17 yield 0 28.58
Bank floating ure
2.90%
Corporati earning
on
Limited
China Earning-pr
Annual
Merchant otected Recove
No 3,400 28.09.16 15.12.16 yield 3,400 0 13.17 13.17
s Bank floating red
2.20%
Co., Ltd. earning
Total 58,400 -- -- -- 54,300 140.17 111.59 --
The raised fund of RMB90 million has been used to purchase financial products. The other
Source of fund
amount used to purchase financial products is self-owned fund.
Principal and return due but not
covered
Lawsuit (if any) None
Disclosure date of approval
26.04.16
announcement (if any)
China Fangda Group Co., Ltd. 2016 Annual Report
Disclosure date of Shareholders'
Meeting approval announcement
(if any)
Whether there will be entrusted
Yes
wealth management plan
(2) Trusted loans
□ Applicable √ Inapplicable
The Company borrowed no trust loan in the report period.
4. Other significant contract
□ Applicable √ Inapplicable
The Company entered into no other significant contract in the report.
XVI Social responsibilities
Performance of poverty relieving responsibilities
√ Applicable □ Inapplicable
(1) Annual poverty relieving summary
In 2016, the Company donated a total of RMB1,459,000 for poverty relieving, including:
1. The Company donated RMB1.1 million to the Jiangxi CPCCP Overseas Poverty Relieving Foundation to help the Nanchang
Xinjian District and Pingxiang Luxi County build health care centers in 22 poor villages.
2. The Company donated RMB300,00 to Shenzhen Nanshan District Charity for poverty relieving in Guangdong.
3. The Company donated RMB30,000 to two poor university students in Jiangxi.
4. The Company donated RMB24,000 to the congenital heart disease child care program of the Shenzhen Charity Foundation.
5. The Company donated RMB5,000 to the Shanghai Jinshan District Lvgang Town social assistance office.
(2) Details
Item Unit Qty/Description
1. General situation —— ——
Including: 1. Fund (in RMB10,000) 145.9
2. Investment —— ——
1. Industry development —— ——
2. Employment transfer —— ——
3. Relocation —— ——
China Fangda Group Co., Ltd. 2016 Annual Report
4. Education —— ——
Including: 4.1 Sponsor to students from
(in RMB10,000)
poor families
4.2 Number of students Person
5. Health care support —— ——
Including: 5.1 Contribution to health care
(in RMB10,000)
sources in poor areas
6. Eco-protection support —— ——
7. Last-line guarantee —— ——
8. Social poverty relieving —— ——
8.3 Contribution to poverty
(in RMB10,000) 32.9
relieving foundations
9. Others —— ——
3. Prizes —— ——
19. Other material events
√ Applicable □ Inapplicable
The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure
Guideline No.6 – Listed Companies Engaged in Decoration Business.
1. After the issuance, 32,184,931 new shares were listed on Shenzhen Stock Exchange on August 1, 2016. The issuance will
raise a total 469,899,992.60. After the issuance expense of 10,030,772.72 is deducted, the net raised amount is 459,869,219.88.
Key issue Date of disclosure Information source
Non-Public A-Share Issuance Report and 29.07.16 China Securities Journal, Shanghai
Announcement of Listing Securities Daily, Securities Times, HKCD
(English) and www.cninfo.com.cn
2. Qualifications in the decoration industry:
No. Qualification Effectiveness
1 Construction curtain wall designing class A By 16.04.2020
2 Construction curtain wall contracting class A By 03.02.21
3 Construction decoration contracting class B By 04.03.21
4 Steel structure engineering contracting class B By 04.03.21
5 Construction mechanical and electric equipment By 04.03.21
installation contracting class C
6 City and road lighting engineering contracting class C By 04.03.21
The Safety Production License of the Company expired in 2016. The Company has applied for renewing on December 28,
2016. In addition, the construction decoration contracting class B has been updated into construction decoration contracting class C.
In the report period, the Company’s safety management is normal. The Company pays large attention to employees’ safety
awareness and capabilities of emergency processing. The Company has strengthened safety production and investigation of safety
risks. The Company has formulated safety management guidelines to guide safety management. There was no significant safety
China Fangda Group Co., Ltd. 2016 Annual Report
accidents in the report period.
20. Material events of subsidiaries
□ Applicable √ Inapplicable
China Fangda Group Co., Ltd. 2016 Annual Report
Chapter 6 Changes in Share Capital and Shareholders
1. Changes in shares
1. Changes in shares
In share
Before the change Change (+,-) After the change
Issued Transferre
Proportio Bonus Proportio
Amount new d from Others Subtotal Amount
n shares n
shares reserves
I. Shares with trade 32,184,93 32,184,93 33,156,97
972,042 0.13% 4.20%
restriction conditions 1 1
1. State-owned shares 0
2. State-owned legal person
6,438,356 6,438,356 6,438,356 0.82%
shares
25,746,57 25,746,57 26,718,61
3. Other domestic shares 972,042 0.13% 3.39%
5 5
Including: Shares held by
domestic legal persons
Domestic natural
972,042 0.13% 0 0 972,042 0.12%
person shares
4. Shares held by foreign
0
investors
Including: Shares held by
0
foreign legal persons
Overseas natural
0
person shares
II. Shares without trading 755,937,8 755,937,8
99.87% 0 0 95.80%
limited conditions 63
419,986,6 419,986,6
1. Common shares in RMB 99.87% 0 0 53.22%
75
2. Foreign shares in domestic 335,951,1 335,951,1
44.39% 0 0 42.57%
market 88
3. Foreign shares in overseas
0
market
4. Others 0
China Fangda Group Co., Ltd. 2016 Annual Report
756,909,9 32,184,93 32,184,93 789,094,8
III. Total of capital shares 100.00% 100.00%
05 1 1 36
Reasons
√ Applicable □ Inapplicable
In the report period, the Company received the Reply to the Non-public Share Issuance of Fangda China Group Co., Ltd. (CSRC
License [2016] No.825) to allow the Company to issue 32,184,931 shares, which became listed on Shenzhen Stock Exchange on
August 1, 2016.
Approval of the change
√ Applicable □ Inapplicable
On June 12, 2016, the Company received the Reply to the Non-public Share Issuance of Fangda China Group Co., Ltd. (CSRC
License [2016] No.825) to allow the Company to issue A-shares.
Share transfer
√ Applicable □ Inapplicable
In the report period, the Company conducted non-public issuance of 32,184,931 A-shares, which became listed on Shenzhen Stock
Exchange on August 1, 2016.
Impacts on financial indicators including basic and diluted earnings per share, net assets per share attributable to common
shareholders of the company in the most recent year and period
√ Applicable □ Inapplicable
Others that need to be disclosed as required by the securities supervisor
□ Applicable √ Inapplicable
2. Changes in conditional shares
√ Applicable □ Inapplicable
In share
Conditional
Conditional
shares at Released this Increased this Reason of
Shareholder shares at end of Date of releasing
beginning of the period period condition
the period
period
First Capital
Securities –
Guosen Securities
Private issuing
– Mutual Win 0 0 6,438,356 6,438,356 01.08.17
restriction
Dayan
Quantization
Private Placement
China Fangda Group Co., Ltd. 2016 Annual Report
Collective Assets
Management
Program
Ping An Dahua
Fund – Ping An
Private issuing
Bank – Guohai 0 0 4,041,098 4,041,098 01.08.17
restriction
Securities Stock
Co., Ltd.
Sinomach Finance Private issuing
0 0 3,219,178 3,219,178 01.08.17
Co., Ltd. restriction
Changzhou
Private issuing
Investment Group 0 0 3,219,178 3,219,178 01.08.17
restriction
Co., Ltd.
Fullgoal Assets –
China Merchants
Securities –
Fullgoal Asssseets
Private issuing
– Changtai Private 0 0 3,219,178 3,219,178 01.08.17
restriction
Placement Hedging
No.2 Assets
Management
Program
Kunlun Health
Insurance Co., Ltd, Private issuing
0 0 3,212,329 3,212,329 01.08.17
Universal Life restriction
Insurance
Ping An Dahua
Fund – Ping An
Bank – Ping An
Private issuing
Dahua Anying 0 0 958,904 958,904 01.08.17
restriction
Huifu No.80 Assets
Management
Program
Caitong Fund –
Everbright Bank _
Caitong Fund –
Fuhua Private Private issuing
0 0 794,520 794,520 01.08.17
Placement No.2 restriction
Assets
Management
Program
Ping An Dahua 0 0 684,931 684,931 Private issuing 01.08.17
China Fangda Group Co., Ltd. 2016 Annual Report
Fund – Ping An restriction
Bank – Shenzhe
Ping An Dahua
Assets
Management Co.,
Ltd.
Caitong Fund –
ICBC Bank –
Beijing Yizhuang
Private issuing
International 0 0 561,644 561,644 01.08.17
restriction
Investment
Development Co.,
Ltd.
Caitong Fund –
Everbright Bank _
Caitong Fund –
Fuhua Private Private issuing
0 0 561,644 561,644 01.08.17
Placement No.6 restriction
Assets
Management
Program
Caitong Fund –
ICBC – Fuchun
Private Placement Private issuing
0 0 561,644 561,644 01.08.17
Baoli No.1 Assets restriction
Management
Program
Caitong Fund –
ICBC – Fuchun
Private Placement Private issuing
0 0 561,644 561,644 01.08.17
Baoli No.5 Assets restriction
Management
Program
Caitong Fund –
ICBC – Fuchun
Private Placement Private issuing
0 0 561,644 561,644 01.08.17
Baoli No.15 Assets restriction
Management
Program
Subtotal of other
Private issuing
shareholders of 0 0 3,589,039 3,589,039 01.08.17
restriction
conditional shares
China Fangda Group Co., Ltd. 2016 Annual Report
Total 0 0 32,184,931 32,184,931 -- --
2. Share placing and listing
1. Securities issuance (excluding preference shares) during the report period
√ Applicable □ Inapplicable
Name of the Approved
Price of issue (or Date when trading is
shares and Date of issue Amount issued Date of listing amount to be
interest rate) terminated
derivate securities listed
Shares
Private issuing of
15.07.16 RMB14.60/share 32,184,931 01.08.16 32,184,931
A-shares
Convertible bonds, separable-traded convertible bonds, company bonds
Other derivative securities
Securities issuance (excluding preference shares) during the report period
In the report period, the Company, as approved by the CSRC’s Reply to the Non-public Share Issuance of Fangda China Group Co.,
Ltd. (CSRC License [2016] No.825), issued 32,184,931 A-shares to raise a net amount of RMB459,869,219.88. After the issuance,
the total equity of the Company reaches 789,094,836 shares, including 453,143,648 A-shares and 33,5951,188 B-shares.
2. Statement of changes in share number and shareholder structure, assets and liabilities structure
√ Applicable □ Inapplicable
In the report period, the Company issued 32,184,931 A-share through non-public share issuance to raise a net RMB459,869,219.88.
After the issuance, the equity of the Company increases from 756,909,905 shares to 789,094,836 shares. The 32,184,931 A-shares
are all conditional shares. The interest of owners of the Company increases by RMB459,869,219.88 (including: RMB32,184,931.00
is included in Equity, RMB427,684,288.88 is included in Capital reserve – Share Premium). The total assets increase by
RMB459,869,219.88. The liabilities structure is not affected.
3. Current employees shares
□ Applicable √ Inapplicable
3. Shareholders and the substantial controller of the Company
1. Shareholders and shareholding
In share
Number of Total number of Number of Total number of
shareholders of ordinary share shareholders of shareholders of
44,032 38,771 0
common shares shareholders at preferred stocks of preference shares
at the end of the end of the which voting rights of which voting
China Fangda Group Co., Ltd. 2016 Annual Report
the report month before the recovered in the rights resumed at
period disclosure date of report period (if the end of the
the annual report any) (note 8) month before the
disclosure date of
the annual report
(if any) (see note
8)
Shareholders holding 5% of the Company's shares or top-10 shareholders
Number Pledging or freezing
of shares Amount
Sharehold Change
held at of shares
Nature of ing in the Condition
Shareholder the end of without
shareholder percentag reporting al shares Share status Amount
the sales
e period
reporting restriction
period
Shenzhen Banglin
Domestic
Technologies 68,774,27 68,774,27
non-state legal 8.72% 0 Pledged 24,565,833
Development Co., 3
person
Ltd.
Shengjiu Foreign legal 57,390,41 57,390,41
7.27% 9,528,680
Investment Ltd. person 0
GUOTAI JUNAN
SECURITIES(HO Foreign legal 33,423,80 33,423,80
4.24% -211,086
NGKONG) person 4
LIMITED
Domestic natural 26,682,83 16,003,03 26,682,83
Huang Jupei 3.38%
person 22
Shenzhen Shilihe Domestic
17,860,99 17,860,99
Investment Co., non-state legal 2.26%
2
Ltd. person
Domestic natural 16,213,50 16,213,50
Zhou Shijian 2.05%
person 0
Shenwan
Hongyuan Foreign legal 12,718,40 12,718,40
1.61% 4,185,222
Securities (Hong person 8
Kong) Co., Ltd.
China Life
Insurance –
11,000,00 11,000,00 11,000,00
Dividend – Others 1.39%
00
Personal Dividend
– 005L-FH002
China Fangda Group Co., Ltd. 2016 Annual Report
Shen
Yunnan
International Trust
CO., Ltd. – Juxin
Others 1.00% 7,852,057 7,852,057 7,852,057
No.5 Collective
Fund Trust
Program
First Capital
Securities –
Guosen Securities
– Mutual Win
Dayan
Others 0.82% 6,438,356 6,438,356 6,438,356
Quantization
Private Placement
Collective Assets
Management
Program
Among the above-mentioned shareholders, First Capital Securities – Guosen Securities –
A strategic investor or ordinary legal
Mutual Win Dayan Quantization Private Placement Collective Assets Management
person becomes the Top10 share
Program became one of the top 10 shareholders because of the A-share issuance. The
shareholder due a stock issue (see note
6,438,356 share it holds shall not be transferred within 12 month upon the listing of the
3)
shares (on August 1, 2016).
Among the shareholders, Shenzhen Banglin Technology Development Co., Ltd. and
Shengjiu Investment Co., Ltd. are parties action-in-concert. Shenzhen Banglin Technology
Notes to top ten shareholder
Development Co., Ltd. and Shenzhen Shilihe Investment Co., Ltd. are related parties. The
relationship or \"action in concert\"
Company is not notified of other action-in-concert or related parties among the other
holders of current shares.
Top 10 holders of unconditional shares
Category of shares
Shareholder Amount of shares without sales restriction Category of
Amount
shares
Shenzhen Banglin Technologies RMB common
68,774,273 68,774,273
Development Co., Ltd. shares
Foreign shares
Shengjiu Investment Ltd. 57,390,410 listed in domestic 57,390,410
exchanges
GUOTAI JUNAN Foreign shares
SECURITIES(HONGKONG) 33,423,804 listed in domestic 33,423,804
LIMITED exchanges
RMB common
Huang Jupei 26,682,832 26,682,832
shares
China Fangda Group Co., Ltd. 2016 Annual Report
RMB common
Shenzhen Shilihe Investment Co., Ltd. 17,860,992 17,860,992
shares
RMB common
Zhou Shijian 16,213,500 16,213,500
shares
Foreign shares
Shenwan Hongyuan Securities (Hong
12,718,408 listed in domestic 12,718,408
Kong) Co., Ltd.
exchanges
China Life Insurance – Dividend –
RMB common
Personal Dividend – 005L-FH002 11,000,000 11,000,000
shares
Shen
Yunnan International Trust CO., Ltd. –
RMB common
Juxin No.5 Collective Fund Trust 7,852,057 7,852,057
shares
Program
Foreign shares
Haitong International Securities
6,257,441 listed in domestic 6,257,441
Company Limited-Account Client
exchanges
No action-in-concert or related parties Among the shareholders, Shenzhen Banglin Technology Development Co., Ltd. and
among the top10 unconditional Shengjiu Investment Co., Ltd. are parties action-in-concert. Shenzhen Banglin Technology
shareholders and between the top10 Development Co., Ltd. and Shenzhen Shilihe Investment Co., Ltd. are related parties. The
unconditional shareholders and the Company is not notified of other action-in-concert or related parties among the other
top10 shareholders holders of current shares.
Top-10 common share shareholders Zhou Shijian holds 16,213,500 shares of the Company through the client credit trade
participating in margin trade (if any) securities account of GF Securities; Huang Jupei holds 26,681,832 shares of the Company
(see note 4) through the client credit trade securities account of GF Securities;
Agreed re-purchasing by the Company’s top 10 shareholders of common shares and top 10 shareholders of unconditional common
shares in the report period
□ Yes √ No
No agreed re-purchasing by the Company’s top 10 shareholders of common shares and top 10 shareholders of unconditional common
shares in the report period
2. Profile of the controlling shareholders
Shareholder nature: natural person holding
Type of shareholder: legal person
Legal
Name of controlling
representative/respon Date of establishment Organization code Main business
shareholder
sible person
Industrial investment,
Shenzhen Banglin
developing of electronic
Technologies Development Chen Jinwu 07.06.01
products, technical
Co., Ltd.
consulting, domestic
China Fangda Group Co., Ltd. 2016 Annual Report
commerce, material trading
Stock ownership of other
domestic and overseas listed
company controlled or whose None
shares are held by controlling
shareholders
Changes in the controlling shareholder in the reporting period
□ Applicable √ Inapplicable
No change in the controlling shareholder in the report period
3. Substantial controller of the Company
Nature of actual controller: domestic natural person
Type of actual controller: natural person
Name of substantial controller Nationality Right of residence in another country or region
Xiong Jianming Chinese Yes
Job and position Chairman of the Board and president of the Company over the past 5 years
Profiles of domestic and overseas listed
companies in which the controller held The controller held no share in other listed companies in the last ten years.
shares
Change in the actual controller in the report period
□ Applicable √ Inapplicable
No change in the actual shareholder in the report period
7. Chart of the controlling relationship
Controlling over the Company by the substantial controller through trust or other asset management
□ Applicable √ Inapplicable
China Fangda Group Co., Ltd. 2016 Annual Report
4. Other legal person shareholders with over 10% of total shares
□ Applicable √ Inapplicable
5. Conditional decrease of shareholding by controlling shareholder, actual controller, reorganizer and
other entities
√ Applicable □ Inapplicable
The Company conducted non-public issuance of 32,184,931 A-shares in the report period. Acquirers promised not to transfer the new
shares within 12 months upon the issuance date.
China Fangda Group Co., Ltd. 2016 Annual Report
Chapter 7 Preferred Shares
□ Applicable √ Inapplicable
The Company had no preferred share in the report period.
China Fangda Group Co., Ltd. 2016 Annual Report
Chapter 8 Particulars about the Directors, Supervisors, Senior
Management and Employees
1. Changes in shareholding of Directors, Supervisors and Senior Management
Number
Increased Decrease Other Number
of shares
Starting End date shares in d shares increase of shares
held at
Name Position Job status Sex Age date of of the this in this and held at
beginning
the term term period period decrease end of the
of the
(share) (share) (share) period
period
Chairman
Xiong
, In office M 59 20.11.95 31.03.17 1,259,771 1,259,771
Jianming
president
Director,
Wang
vice In office M 59 20.11.95 31.03.17 36,286 36,286
Shengguo
president
Xiong
Director In office M 48 16.04.99 31.03.17
Jianwei
Zhou
Director In office M 54 09.04.07 31.03.17
Zhigang
Secretary
Zhou
of the In office M 54 22.10.03 31.03.17
Zhigang
Board
Independ
Guo
ent In office M 51 31.03.14 31.03.17
Wanda
director
Independ
Lin Bin ent In office M 54 31.03.14 31.03.17
director
Independ
Deng Lei ent In office M 38 16.02.16 31.03.17
director
Superviso
ry
Zhen Hua Committe In office F 57 27.05.05 31.03.17
e meeting
convener
China Fangda Group Co., Ltd. 2016 Annual Report
Yin Superviso
In office M 48 31.03.14 31.03.17
Changjian r
Zen Superviso
In office M 47 31.03.14 31.03.17
Xiaowu r
Vice
Lin Kebin president In office M 39 06.06.08 31.03.17
and CFO
Wei Vice
In office M 48 29.07.11 31.03.17
Yuexing president
Independ
Huang
ent Resigned M 54 25.03.11 16.02.16
Yaying
director
Total -- -- -- -- -- -- 1,296,057 0 0 0 1,296,057
2. Changes in the Directors, Supervisors and Senior Executives
Name Job Type Date Reason
Independent
Huang Yaying Resigned 16.02.16 Huang Yaying has resigned due to person reasons
director
3. Office Description
Professional background, work experience and main duties in the Company of existing directors, supervisors and senior management
Mr. Xiong Jianming: PHD Management; senior engineer; part-time professor of Beijing Institute of Civil Engineering and
Architecture and Nanchang University. He was once employed by Jiangxi Provincial Machinery Design Academe, Administration
Bureau of Shekou District of Shenzhen government, etc, deputy to the 10th People’s Congress of Guangdong Province, deputy to the
2nd and 3rd People’s Congress of Shenzhen City. He is now the chairman and CEO of the Company, representative of the 6 th
Shenzhen People's Congress, president of the Shenzhen Semi-conductor Lighting Industry Promotion Association, chairman of
Shenzhen Jiangxi Commerce Chamber, chairman of Shenzhen Nanshan District Industry and Commerce Association and honorary
chairman of Shenzhen Nanshan District Charity.
Mr. Wang Shengguo: Master degree; Visiting Scholar from University of Essen, senior engineer.He once held such positions as
Chief Engineer of Design Institute of the 2nd Heavy Machinery factory of Machinery Industrial Ministry. Mr. Wang is now a Director
and Vice President of the Company.
Mr. Xiong Jianwei: MBA. He is a director of the Company and chairman of the board of directors of Fangda Jianke.
Mr. Zhou Zhigang, bachelor’s degree. He is currently a Director, Secretary of Board, and head of the Securities Dept and HR Dept.
Mr. Guo Wanda: He is an Economics Ph. D and researcher. As the executive deputy president of China Development Institute, he
has studied in macro-economy, industry policies and enterprise development strategies for years and provided consulting services. He
is an independent director of the Company.
Lin Bin is an economics (accounting) Ph. D. He is a professor of the Accounting Department of the Management School of Sun
Yat-Sen University, director of the Enterprise and Non-Profit Organization Research Center of Sun Yat-Sen University, and was
once the director of the Accounting Department of Sun Yat-Sen University and MPACC Education Center. He is a member of the
consultant panel of the enterprise internal control standard committee of the Ministry of Finance, deputy president of Guangdong
China Fangda Group Co., Ltd. 2016 Annual Report
Auditor Society, vice president of the Guangdong Internal Auditor Association, and independent director of the company.
Mr. Deng Lei is a law Ph. D and post-doctor in the financial securities law of Shenzhen Stock Exchange. He was once the vice
director of Corporate Law Affair Commission of Shenzhen Lawyer Association and a senior partner of Guangdong China
Commercial Law Firm.
Ms. Zhenghua holds a bachelor’s degree and is the convener of supervisory meetings of the Company.
Yin Changjian holds bachelor's degree and is a CPA. He was once the vice general manager of the Beijing branch of Fangda Jianke
and is the deputy director of the Company’s Supervisory Dept and staff representative supervisor.
Zeng Xiaowu holds a master's degree and is a senior engineer. He was once the vice general manager of Fangda Jianke, president of
the design institute. He is now the chief engineer of Fangda Jianke and supervisor of the Company.
Mr. Lin Kebin holds a bachelor’s degree. At present he’s the Vice President and CFO of the Company.
Mr. Wei Yuexing holds a Bachelor degree and is a senior engineer. He is the vice president of the Company and general manager of
Fangda Jianke.
Offices held at shareholders entities
√ Applicable □ Inapplicable
Whether any
Starting date of End date of the remuneration is
Name Shareholder entity Office
the term term paid at the
shareholder entity
Xiong Jianming Shengjiu Investment Ltd. Chairman 06.10.11 No
Wang
Shenzhen Shilihe Investment Co., Ltd. Chairman 19.10.06 No
Shengguo
Wang General
Shenzhen Shilihe Investment Co., Ltd. 29.09.03 No
Shengguo manager
Xiong Jianwei Shenzhen Shilihe Investment Co., Ltd. Director 12.06.01 No
Zhou Zhigang Shenzhen Shilihe Investment Co., Ltd. Director 19.10.06 No
Zhen Hua Shenzhen Shilihe Investment Co., Ltd. Supervisor 19.10.06 No
Office
None
description
Offices held at other entities
√ Applicable □ Inapplicable
Whether any
Starting date of End date of the remuneration is
Name Entity name Office
the term term paid at the
shareholder entity
General development research institute Standing vice
Guo Wanda 01.07.07 Yes
(Shenzhen, China) president
Shenzhen Baode Technology Group Co., Independent
Guo Wanda 06.06.08 Yes
Ltd. director
Independent
Guo Wanda Shenzhen Hercules Logistics Incorporated 01.03.2013 Yes
director
China Fangda Group Co., Ltd. 2016 Annual Report
Management School of Sun Yat-Sen
Lin Bin Professor 01.10.98 Yes
University
Guangzhou Baiyun International Airport Independent
Lin Bin 27.06.13 06.12.16 Yes
Company Limited director
Independent
Lin Bin Guangzhou Pearl River Beer Co., Ltd. 19.06.12 Yes
director
Deng Lei Guangdong China Commercial Law Firm Senior partner 01.11.15 Yes
Independent
Deng Lei Guangdong Chaohua Technology Co., Ltd. 11.11.15 Yes
director
Independent
Deng Lei Wuhan Gaode Infrared Co., Ltd. 23.04.15 Yes
director
Independent
Deng Lei Shenzhen Haimingrun Industrial Co., Ltd. 18.11.14 Yes
director
Office
The above-mentioned three are independent directors of the Company.
description
Penalties given by existing securities regulators on directors, supervisors and senior management and those who have resigned in the
report period
□ Applicable √ Inapplicable
4. Remunerations of the Directors, Supervisors and Senior Executives
Decision making procedures, basis and actual payment of remunerations of the Directors, Supervisors and Senior Executives
1. Remuneration schemes for directors and supervisors are proposed by the Remuneration and Assessment Committee of the Board,
and implemented upon approval of the Board and the Shareholders’ Meetings; the remuneration schemes for executives are approved
and implemented by the Board.
Remuneration for directors and supervisors are decided by the shareholders’ meeting. Remunerations for executives are composed of
wages and performance bonus as decided by the Board.
Payment on monthly basis
Remunerations of the Directors, Supervisors and Senior Executives of the Company During the reporting period
In RMB10,000
Remuneration
Total
Name Position Sex Age Job status from related
remuneration
parties
Chairman,
Xiong Jianming M 59 In office 178.9 No
president
Director, vice
Wang Shengguo M 59 In office 94.04 No
president
Xiong Jianwei Director M 48 In office 95.25 No
Director,
Zhou Zhigang M 54 In office 68.69 No
secretary of the
China Fangda Group Co., Ltd. 2016 Annual Report
Board
Independent
Deng Lei M 38 In office 7 No
director
Independent
Huang Yaying M 54 Resigned 1 No
director
Independent
Guo Wanda M 51 In office 8 No
director
Independent
Lin Bin M 54 In office 8 No
director
Supervisory
Zhen Hua Committee F 57 In office 3 No
meeting convener
Yin Changjian Supervisor M 48 In office 31.9 No
Zen Xiaowu Supervisor M 47 In office 55.86 No
Vice president
Lin Kebin M 39 In office 78.28 No
and CFO
Wei Yuexing Vice president M 48 In office 91.55 No
Total -- -- -- -- 721.47 --
Equity incentive programs provided for the Directors, and Senior Executives of the Company during the reporting period
□ Applicable √ Inapplicable
5. Employees
1. Staff number, professional composition and education
Staff number of the parent
Staff number of major subsidiaries 1,468
Total staff number 2,349
Number of employees receiving remuneration in the period 2,349
Resigned and retired staff number to whom the parent and major
subsidiaries need to pay remuneration
Professional composition
Categories of professions Number of people
Production
Sales & Marketing
Technicians 1,266
Finance & Accounting
Executive
China Fangda Group Co., Ltd. 2016 Annual Report
Total 2,349
Education
Categories of education Number of people
High school or below 1,153
College diploma
Bachelor
Master’s degree
Doctor’s degree
Total 2,349
2. Remuneration policy
Staff remuneration policy: The Company’s staff remuneration comprises post wage, performance wage, allowance and annual bonus.
The Company has set up an economic responsibility assessment system according to the annual operation target and responsibility
indicators for all departments. The performance wage is determined by the economic indicators, management indicators, optimization
indicators and internal control. The annual bonus is determined by the Company's annual profit and fulfillment of targets set for
various departments. The staff remuneration and welfare will be adjusted according to the Company’s business operation and
changes in the local standard of living and price index.
3. Training program
Staff training plan: The Company has paid continuous attention to training and development of the staff and introduces innovative
learning as part of the long-term strategy. We provide training programs through different channels and in different fields for
different employees will help them fulfill their works, including new staff training, on-the-job training, operation and management
training programs. These programs have largely elevated capabilities of the staff and underpin the success of the Company.
4. Labor outsourcing
√ Applicable □ Inapplicable
Total number of hours of labor outsourcing 11,077,939.28
Total remuneration paid for labor outsourcing (RMB) 332,338,178.35
China Fangda Group Co., Ltd. 2016 Annual Report
Chapter 9 Corporation Governance
1. Overview
During the report period, the Company strictly complied with the Company Law, Securities Law, Governance Standards for
Listed Companies, Shenzhen Stock Exchange Share Listing Rules, Operation Regulations for Listed Companies in the Main Board
of Shenzhen Stock Exchange, continued to improve the legal person governance structure and has formulated a series of internal
management systems covering various aspects. The Company has set up a comprehensive and effective internal control system in
important decision making, related transaction decision making, financial management, HR management, administration, purchase,
production and sales management, confidentiality and information disclosure.
Major difference between the actual corporate governance and regulations on corporate governance of listed companies issued by
CSRC
□ Yes √ No
There is no major difference between the actual corporate governance and regulations on corporate governance of listed companies
issued by CSRC.
2. Independence of the Company from the controlling shareholder in aspects of businesses,
personnel, assets, organizations, and accounting
The Company is completely separated from the controlling shareholder in aspects of businesses, personnel, assets, organizations
and accounting. The Company has its own completed businesses and capacity of independent business operation.
(1) In the aspect of business: the Company has its own purchasing, production, sales, and customer service system which
performing independently. There is not any material related transactions occurred with the controlling shareholders.
(2) In personnel, the labor management, personnel and salary management are operated independently from the controlling
shareholder. The senior managements take salaries from the Company and none of them takes senior management position in the
controlling party.
(3) In assets, the Company owns its production, supplementary production system and accessory equipment independently, and
possesses its own industrial properties, non-patent technologies, and trademark.
(4) In organization, the production and business operation, executive management, and department setting are completely
independent from the controlling shareholder. No situation of combined office exists. The Company adjusts its organizing structure
only for its own practical requirement of development and management.
(5) In accounting, the company has its own independent accounting and auditing division, established independent and completed
accounting system and management rules, has its own bank account, and exercise its liability of taxation independently.
3. Competition
□ Applicable √ Inapplicable
China Fangda Group Co., Ltd. 2016 Annual Report
4. Annual and extraordinary shareholder meetings held during the report period
1. Annual shareholder meeting during the report period
Index for
Participation of
Meeting Type Date Date of disclosure information
investors
disclosure
Notice on
Resolutions of the 1st
1st Provisional Extraordinary
Extraordinary
Shareholders’ shareholders’ 23.51% 16.02.16 17.02.16
Shareholders’
Meeting 2016 meeting
Meeting in 2016
(2016-06)
Notice on
Resolutions of the
2015 Annual Annual shareholders’ Annual
33.83% 17.05.16 18.05.16
Shareholder Meeting meeting Shareholders’
Meeting in 2015
(2016-24)
Notice on
Resolutions of the
2nd Provisional Extraordinary
2nd Extraordinary
Shareholders’ shareholders’ 34.31% 29.09.16 30.09.16
Shareholders’
Meeting 2016 meeting
Meeting in 2016
(2016-44)
2. Shareholders of preference shares of which voting right resume convening an extraordinary
shareholders meeting
□ Applicable √ Inapplicable
5. Performance of independent directors during the report period
1. Independent directors presenting of board meetings and shareholders meetings in the report period
Independent directors’ presenting of board meetings
Time of board Absent for two
Name of independent Presented Presented by Presented by
meetings should Absent consecutive
director personally telecom proxy
have attended meetings
Guo Wanda 7 2 5 0 0 No
Lin Bin 7 2 5 0 0 No
Deng Lei 6 1 4 1 0 No
China Fangda Group Co., Ltd. 2016 Annual Report
Huang Yaying 1 0 1 0 0 No
Time of presence by independent
directors at shareholders’ meetings
Statement for absence for two consecutive board meetings
None
2. Objection raised by independent directors
Any objection raised by independent directors against the Company’s related issues
□ Yes √ No
Independent directors made no objection on related issued of the Company in the report period.
3. Other statement for performance of independent directors
Adoption of suggestion proposed by independent directors
√ Yes □ No
Statement for suggestion adopted or not by the Company
6. Performance of specific committees under the Board
(1) Performance of the Development Strategy Committee
During the report period, the Development Strategy Committee of the Company has performed its duties in accordance with the
Working Regulations for Development Strategy Committee and played its role in the decision-making process of the Company. Two
meetings were convened and details are disclosed as follows:
1. On 22.04.16, the Company held the 7th meeting of the 7th Development Strategy Commission to listen to the report on
production and operation and production and operation plan for 2016.
2. On 29.07.16, the 5th meeting of the Development Strategy Committee of the 7 th term of the Board was held to view the
Company’s production and operation in the first half of 2016 and studied the fulfillment of the business plan in the first half of the
year and places to be improved in the second half.
(2) Performance of the Auditing Committee
During the report period, four Auditing Committee meetings are held to review issues including the arrangement of audit, regular
financial reports, engaging the CFA, and use of the fund raised. Details of the meetings are disclosed as follows:
1. On 18.04.16, the 9th meeting of the Auditing Committee of the 7th term of the Board was held to review the financial
statements with the initial opinion issued by the CFA for 2015 and approve the auditor report issued by the CFA. After the CFA
issued to final auditor’s opinion, the Auditing Committee submitted the resolution on the annual financial statements to the Board
and issued the summary report on the auditing of the CFA for this year.
2. On 22.04.16, the Company held the 10th audit committee meeting of the 7th Board of Directors to listen to the 2015 financial
and internal audit report and approved (1) audited 2015 financial statements; (2) 2016 Q1 financial statements; (3) proposal of
engaging the auditor in 2016; (4) 2016 internal audit plan; (5) internal control self-evaluation report in 2015.
The audit committee suggests that the internal audit body should increase communication with the audit committee to help the
committee better under the Company's condition and make higher requirements on the audit quality. 3. On 29.07.16, the 11 th meeting
of the Auditing Committee of the 7th term of the Board on which the unaudited interim financial statements for 2016 were approved.
China Fangda Group Co., Ltd. 2016 Annual Report
4. On 21.10.16, the 12th meeting of the Auditing Committee of the 7th term of the Board was held, on which (1) the 2016 Q3
financial statements; (2) investigation report for the use of raised fund in the 2016 Q3 was reviewed.
(3) Performance of the Remuneration and Assessment Committee
During the report period, the Remuneration and Assessment Committee issued the Working Regulations for Remuneration and
Assessment Committee. On the 2nd meeting of the Remuneration and Assessment Committee of the 7th term of the Board held on
22.04.16, the committee reviewed the main financial indicators and business performance in 2015 and reviewed performance of
duties by the Company’s directors and senior executives. The committee believes that the directors and senior executives have
worked diligently and fulfilled the business target and other tasks in 2015. The remunerations for directors, supervisors and senior
executives disclosed in the 2015 annual report comply with the Company’s remuneration policy.
7. Performance of Supervisory Committee
(1) Risks for the Company discovered by the Supervisory Committee
□ Yes √ No
No disagreement with supervisory issues by the Supervisory Committee during the report period.
(2) The Supervisory Committee’ Work Report 2016
In 2016, the Supervisory Committee performed its duties and obligations in supervision and protect shareholders’ and the
Company’s interests in accordance with the Company Law, Share Listing Rules, Articles of Association and Rules of the Procedure
of the Supervisory Committee. The 2016 supervisory committee's work plan is as follows:
1. Opinions
(1) Legal compliance
In the report period, the Company has been operated in accordance with law. The convening of meeting of the Board and the
decision-making process are compliant with law, regulations and Articles of Association; the internal control system is solid.
Directors and senior management have performed their obligations. No violation against law, regulations, Articles of Association and
interests of the Company and shareholders was discovered.
(2) Financial condition
During the period, the accounting management has been compliant with the Accounting Law, Enterprise Accounting Standard.
No false, misleading statement or significant omission was found in financial statements. The financial reports of the Company
reflect the Company’s financial position, operation performance, cash flows and major risks truthfully, accurately and completely.
The CPA has issued the standard auditor’s report in 2016, which is objective, fair and truthful. It reflects the Company’s financial
position and operation performance.
(3) Implementation of internal control
The design and operation of the internal control is effective and meets the Company’s management and development
requirements. It can ensure the truthfulness, lawfulness, completeness of the financial materials and ensure the safety and
completeness of the Company’s property. In 2016, there was no violation by the Company against the Operation Regulations for
Listed Companies in the Main Board of Shenzhen Stock Exchange and the Company’s internal control system. The 2016 Internal
Control Self-evaluation Report truthfully and objectively reflects the establishment, implementation and improvement of the
Company’s internal control system. There are no significant or important problems in the financial and non-financial reports in the
report period.
2. Meetings and resolutions of the supervisory meeting in the report period:
Three meetings were held in 2016, two of which are on-site meetings, one is voting through telecommunication. All proposals
were approved and disclosed as required:
No. Meeting Date Convening method Topic
China Fangda Group Co., Ltd. 2016 Annual Report
1. Reviewing the Company’s 2015 Supervisory Committee’s Work
Report;
2. Reviewing the Company’s 2015 Annual Report and Summary;
3. Reviewing the Company’s 2015 Financial Settlement Report;
12th meeting
4. Reviewing the Company’s Proposal of Profit Distribution in 2015;
of the 7th
1 22.04.16 On-site 5. Reviewing the Company’s Proposal of Engaging Auditor for 2016;
Supervisory
6. Reviewing the Proposal of Modifying the Rules of the Procedure of
Committee
the Supervisory Committee;
7. Reviewing the Company’s 2015 Internal Control Self-evaluation
Report;
8. Reviewing the Company’s 2016 Q1 Report;
13th meeting
1. Reviewing the 2016 Interim Report and Summary;
of the 7th
2 29.07.16 On-site 2. Reviewing the Proposal of Exchanging the Raised Fund with
Supervisory
Pre-invested Self-owned Fund;
Committee
14th meeting
of the 7th
3 21.10.16 Telecommunication 2016 Q3 Report and Text;
Supervisory
Committee
8. Assessment and motivation of senior executives
The Company has implemented a remuneration system that combines post wage and performance bonus. The wages and bonus are
determined by on the assessment of senior executives’ innovation capabilities, general quality, performance, fulfillment of profit and
payment collection targets in the Implementation Regulations for 2016 Supervisory and Management Department Target
Management and Assessment and Implementation Regulations for 2016 Subordinate Unit Assessment.
9. Internal control
1. Major problems in internal control discovered in the report period
□ Yes √ No
2. Internal control self-evaluation report
Date of disclosure of the internal control
21.03.17
evaluation report
Disclosure of the internal control
www.cninfo.com.cn
evaluation report
Percentage of assets in the evaluation
scope in the total assets in the consolidated 95.23%
financial statements
China Fangda Group Co., Ltd. 2016 Annual Report
Percentage of operation income in the
evaluation scope in the total operation
99.16%
income in the consolidated financial
statements
Standard
Type Financial report Non-financial report
I. The following condition indicates
1. The following problems are considered significant problems in the internal
major problems: 1. Non-effective control control of non-financial reports: I.
environment; 2. corrupt practice by directors, Serious violation against national laws,
supervisor and senior management, causing regulations or specifications; 2. Serious
substantial loss and impacts for the business system problems and system
Company; 3. Substantial mistakes in the ineffectiveness; 3. Major or important
financial statements in the period discovered problems cannot be corrected; 4. Lack of
by the CPA, which are not discovered by the internal control and poor management; 5.
internal control; 4. Ineffective supervision of Loss of management personnel or key
the internal control by the Company’s employees; 6. Safety and environmental
auditing department2. The following accidents that cause major adverse
problems are considered significant impacts; 7. Other situations that cause
Standard problems: 1 accounting policies are selected major adverse impacts on the Company.
and used without complying to widely II. The following situations indicate that
accepted accounting standards; 2. No there may be significant problems with
anti-corrupt and important balance system the internal control: 1. business system
and control measures are taken; 3. Separate problems and system ineffectiveness; 2.
or multiple problems in the preparation of Major or important problems cannot be
financial reports, which are serious enough corrected; 3. Other situations that cause
to affecting the truthfulness and accuracy of major adverse impacts on the
the reports; no control system is established CompanyIII. The following situation
and no related compensation system is indicates likely normal problems in the
implemented for accounts of irregular or internal control: 1. Problems in the
special transactions3. Other problems are general business system; 2. Normal
considered normal problems. problems in the internal control
supervision cannot be correctly promptly.
I. Significant problem: 1 mistakes affecting
5% and more of the pre-tax profit and more
than RMB5 million in the consolidated
statements; 2. Mistakes affecting 5% and
See the recognition standard of the
more of the consolidated assets and more
Standard internal control problems for financial
than RMB5 millionII. Important problem: 1.
statements
Mistakes affecting 1%-5% of the pre-tax
profit in the consolidated statements; 2.
Mistakes affecting 1%-5% the consolidated
assets. III. Normal problem: 1. Mistakes
China Fangda Group Co., Ltd. 2016 Annual Report
affecting less than 1% of the pre-tax profit
and total assets of the consolidate statements.
Significant problems in financial
statements
Significant problems in non-financial
statements
Important problems in financial statements
Important problems in non-financial
statements
10. Internal control audit report
√ Applicable □ Inapplicable
Comments in the internal control audit report
We believe that China Fangda Group has maintained effective internal control on financial reports according to Basic Regulations
on Enterprise Internal Control and related regulations on 31.12.16.
Disclosure of internal auditor’s
Disclosed
report
Date of disclosure of the internal
21.03.17
control audit report
Source of disclosure of the internal
www.cninfo.com.cn
control audit report
Opinion type Standard opinion auditor’s report
Problems in non-financial
No
statements
Non-standard internal control audit report by the CFA
□ Yes √ No
Consistency between the internal control audit report and self-evaluation report
√ Yes □ No
China Fangda Group Co., Ltd. 2016 Annual Report
Chapter 10 Information about the Companys Securities
Bonds publicly issued and listed in a securities exchange, immature or not fully paid by the approval date of the annual report
No
China Fangda Group Co., Ltd. 2016 Annual Report
Chapter 11 Financial Statements
1. Auditors report
Type Standard opinion auditor’s report
Issued on 17.03.17
Auditor Grant Thornton (limited liability partnership)
Report No. Grant Thornton (2017) No.350ZA0066
CPA names Xie Peiren, Hu Gaosheng
Auditors report
Grant Thornton (2017) No.350ZA0066
To the shareholders of China Fangda Group Co., Ltd.:
We have audited the Financial Statements of China Fangda Group Co., Ltd. (―Fangda Group‖) attached hereafter, including
the Balance Sheet and Consolidated Balance Sheet ended 31.12.16 and the Income Statement, Consolidated Income Statement, Cash
Flow Statement, Consolidated Cash Flow Statement, Statement on Change of Shareholders’ Equity, Consolidated Statement on
Change of Shareholders’ Equity of the year 2016, as well as the Notes to the Financial Statements.
1. Executives responsibilities on the Financial Statements
Preparing of the Financial Statements according to Enterprise Accounting Standard is the responsibility of the management of
the Company. This responsibility includes: (1) to prepare the financial statements according to the accounting standard, and ensure its
fair reflection of business position; (2) to design, implement and maintain the internal control system related to producing of the
Financial Statements, to prevent the Financial Statements from major false presentation due to cheating or error.
2. Responsibilities of the CPA
Our responsibility is to express an auditing opinion on the financial statements basing on our audit. We carried out the
auditing works with compliance to Chinese CPA Auditing Standard, which requires us to plan and implement our works on the basis
of professional ethic standards, and obtain reasonable guarantee that the Financial Statements are free of major false statements.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement
of the financial statements, whether due to fraud or error. In making those risk assessments, we consider the internal control relevant
to the entity’s preparation of financial statements in order to design audit procedures that are appropriate in the circumstances. An
audit also includes evaluating the appropriateness of the accounting polices used and the reasonableness of the accounting estimates
made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
3. Auditors Opinions
We believe that Fangda Group has been following with the Enterprise Accounting Standard in preparing of the Financial
Statements. The Financial Statements is reflecting, in all important aspects, the financial situation of Fangda Group as of 31.12.16,
and the business performance and cash flow of year 2016.
China Fangda Group Co., Ltd. 2016 Annual Report
Grand Thornton CPA CPA China Xie Peiren
(limited liability partnership)
CPA China Hu Gaosheng
Beijing, China March 17, 2017
2. Financial statements
Unit for statements in notes to financial statements: RMB yuan
1. Consolidated Balance Sheet
Prepared by: China Fangda Group Co., Ltd.
31.12.16
In RMB
Items Closing balance Opening balance
Current asset:
Monetary capital 1,095,229,837.90 400,953,337.32
Settlement provision
Outgoing call loan
Financial assets measured at fair
value with variations accounted into 14,546,206.58
current income account
Derivative financial assets 2,232,200.00
Notes receivable 18,898,106.11 97,247,660.56
Account receivable 2,342,929,628.14 1,405,718,134.89
Prepayment 31,526,326.25 30,057,063.90
Insurance receivable
Reinsurance receivable
Provisions of Reinsurance
contracts receivable
Interest receivable 302,950.68
Dividend receivable
Other receivables 57,378,994.72 53,095,948.46
Repurchasing of financial assets
China Fangda Group Co., Ltd. 2016 Annual Report
Inventory 1,990,621,059.27 1,346,591,303.53
Assets held for sales
Non-current assets due in 1 year
Other current assets 62,206,574.33 11,395,718.05
Total current assets 5,601,325,677.40 3,359,605,373.29
Non-current assets:
Loan and advancement provided
Sellable financial assets 28,562,575.67
Investment held until mature
Long-term receivable
Long-term share equity investment 12,105,030.68 10,489,680.93
Investment real estate 333,795,631.30 335,328,805.74
Fixed assets 506,819,266.38 462,648,998.51
Construction in process 2,537,725.36 15,134,390.90
Engineering materials
Disposal of fixed assets 5,326.79
Productive biological assets
Gas & petrol
Intangible assets 60,228,652.69 95,062,982.48
R&D expense
Goodwill 19,826,696.97
Long-term amortizable expenses 3,695,766.33 6,614,788.88
Deferred income tax assets 176,796,698.56 65,926,810.52
Other non-current assets 61,184,253.71 93,503,956.39
Total of non-current assets 1,185,725,600.68 1,104,542,438.11
Total of assets 6,787,051,278.08 4,464,147,811.40
Current liabilities
Short-term loans 591,000,000.00 1,147,957,775.82
Loans from Central Bank
Deposit received and held for
others
Call loan received
Financial liabilities measured at
fair value with variations accounted into
current income account
China Fangda Group Co., Ltd. 2016 Annual Report
Derivative financial liabilities
Notes payable 557,301,320.45 303,527,639.63
Account payable 1,275,255,961.34 867,628,355.65
Prepayment received 285,905,444.13 130,574,319.85
Selling of repurchased financial
assets
Fees and commissions payable
Employees’ wage payable 41,972,342.66 40,942,428.05
Taxes payable 192,236,574.40 67,533,433.70
Interest payable 2,634,979.47 3,241,834.43
Dividend payable
Other payables 366,182,799.41 82,677,346.81
Reinsurance fee payable
Insurance contract provision
Entrusted trading of securities
Entrusted selling of securities
Liabilities held for sales
Non-current liabilities due in 1
year
Other current liabilities 35,148,084.44 98,425,600.00
Total current liabilities 3,347,637,506.30 2,742,508,733.94
Non-current liabilities:
Long-term loans 922,169,568.24 300,395,582.06
Bond payable
Including: preferred stock
Perpetual bond
Long-term payable
Long-term employees’ wage
payable
Special payables
Anticipated liabilities 3,156,625.24 1,921,446.51
Deferred earning 11,567,224.78 12,284,195.68
Deferred income tax liabilities 200,207,003.35 72,994,768.34
Other non-current liabilities
Total of non-current liabilities 1,137,100,421.61 387,595,992.59
China Fangda Group Co., Ltd. 2016 Annual Report
Total liabilities 4,484,737,927.91 3,130,104,726.53
Owner’s equity:
Share capital 789,094,836.00 756,909,905.00
Other equity tools
Including: preferred stock
Perpetual bond
Capital reserves 467,376,902.96 79,099,619.14
Less: Shares in stock
Other miscellaneous income 2,130,454.52 91,831.63
Special reserves
Surplus reserves 88,839,790.50 51,123,554.51
Common risk provisions
Retained profit 1,016,820,576.30 432,271,424.56
Total of owner’s equity belong to the
2,364,262,560.28 1,319,496,334.84
parent company
Minor shareholders’ equity -61,949,210.11 14,546,750.03
Total of owners’ equity 2,302,313,350.17 1,334,043,084.87
Total of liabilities and owner’s interest 6,787,051,278.08 4,464,147,811.40
Legal representative: Xiong Jianming CFO: Lin Kebing Accounting Manager: Chen Yonggang
2. Balance Sheet of the Parent Company
In RMB
Items Closing balance Opening balance
Current asset:
Monetary capital 81,148,314.87 25,833,130.83
Financial assets measured at fair
value with variations accounted into
current income account
Derivative financial assets
Notes receivable
Account receivable 454,140.85 345,960.74
Prepayment 110,132.27 67,893.61
Interest receivable
Dividend receivable 430,000,000.00
China Fangda Group Co., Ltd. 2016 Annual Report
Other receivables 459,354,983.42 375,591,349.76
Inventory
Assets held for sales
Non-current assets due in 1 year
Other current assets 334,228.97 990,624.25
Total current assets 971,401,800.38 402,828,959.19
Non-current assets:
Sellable financial assets 28,562,575.67
Investment held until mature
Long-term receivable
Long-term share equity investment 897,444,525.03 967,700,649.13
Investment real estate 296,740,660.63 290,288,531.53
Fixed assets 55,081,689.15 57,647,245.73
Construction in process
Engineering materials
Disposal of fixed assets
Productive biological assets
Gas & petrol
Intangible assets 1,531,179.93 1,907,601.33
R&D expense
Goodwill
Long-term amortizable expenses 252,857.40 403,800.10
Deferred income tax assets 57,076,777.66 37,948,384.39
Other non-current assets 120,000,000.00 220,000,000.00
Total of non-current assets 1,456,690,265.47 1,575,896,212.21
Total of assets 2,428,092,065.85 1,978,725,171.40
Current liabilities
Short-term loans 190,000,000.00 350,000,000.00
Financial liabilities measured at
fair value with variations accounted into
current income account
Derivative financial liabilities
Notes payable 33,692,909.97
Account payable 606,941.85 606,941.85
Prepayment received 965,234.08 748,421.47
China Fangda Group Co., Ltd. 2016 Annual Report
Employees’ wage payable 2,338,896.51 1,868,710.30
Taxes payable 460,424.30 1,338,421.09
Interest payable 288,513.75 726,993.55
Dividend payable
Other payables 65,436,929.77 155,183,721.49
Liabilities held for sales
Non-current liabilities due in 1
year
Other current liabilities 98,425,600.00
Total current liabilities 293,789,850.23 608,898,809.75
Non-current liabilities:
Long-term loans
Bond payable
Including: preferred stock
Perpetual bond
Long-term payable
Long-term employees’ wage
payable
Special payables
Anticipated liabilities
Deferred earning
Deferred income tax liabilities 124,088,349.06 120,953,378.63
Other non-current liabilities
Total of non-current liabilities 124,088,349.06 120,953,378.63
Total liabilities 417,878,199.29 729,852,188.38
Owner’s equity:
Share capital 789,094,836.00 756,909,905.00
Other equity tools
Including: preferred stock
Perpetual bond
Capital reserves 466,283,546.89 38,598,963.76
Less: Shares in stock
Other miscellaneous income 91,831.63 91,831.63
Special reserves
Surplus reserves 88,839,790.50 51,123,554.51
China Fangda Group Co., Ltd. 2016 Annual Report
Retained profit 665,903,861.54 402,148,728.12
Total of owners’ equity 2,010,213,866.56 1,248,872,983.02
Total of liabilities and owner’s interest 2,428,092,065.85 1,978,725,171.40
3. Consolidated Income Statement
In RMB
Items Amount occurred in the current period Occurred in previous period
1. Total revenue 4,203,866,173.72 2,550,467,494.78
Incl. Business income 4,203,866,173.72 2,550,467,494.78
Interest income
Insurance fee earned
Fee and commission
received
2. Total business cost 3,433,363,681.99 2,548,503,653.53
Incl. Business cost 2,595,170,483.35 2,171,524,200.35
Interest expense
Fee and commission paid
Insurance discharge payment
Net claim amount paid
Net insurance policy
reserves provided
Insurance policy dividend
paid
Reinsurance expenses
Taxes and surcharges 380,834,706.42 33,616,556.60
Sales expense 59,273,046.14 75,264,951.18
Administrative expense 171,922,091.39 167,405,776.25
Financial expenses 28,255,397.43 50,672,490.05
Asset impairment loss 197,907,957.26 50,019,679.10
Plus: gains from change of fair value
16,862,823.13 89,746,065.58
(―-― for loss)
Investment gains (―-― for loss) 61,228,848.36 280,949.87
Incl. Investment gains from
-1,384,650.25 -358,979.50
affiliates and joint ventures
Exchange gains (―-― for loss)
China Fangda Group Co., Ltd. 2016 Annual Report
3. Operational profit (―-― for loss) 848,594,163.22 91,990,856.70
Plus: non-operational income 18,327,500.52 29,668,110.25
Incl. Loss from disposal of
110,009.46 51,130.66
non-current assets
Less: non-operational expenditure 6,945,905.31 18,233,740.07
Incl. Loss from disposal of
2,565,237.38 574,079.38
non-current assets
4. Gross profit (―-― for loss) 859,975,758.43 103,425,226.88
Less: Income tax expenses 203,985,326.44 35,209,871.61
5. Net profit (―-― for net loss) 655,990,431.99 68,215,355.27
Net profit attributable to the owners
697,956,378.23 107,272,369.77
of parent company
Minor shareholders’ equity -41,965,946.24 -39,057,014.50
6. After-tax net amount of other misc.
2,038,622.89
incomes
After-tax net amount of other misc.
2,038,622.89
incomes attributed to parent's owner
(1) Other misc. incomes that cannot
be re-classified into gain and loss
1. Change in net liabilities or
assets due to re-measurement set benefit
program
2. Shares enjoyed in other
misc. incomes that cannot be reclassified
into gain and loss by the invested entity
under the equity law
(2) Other misc. incomes that will be
2,038,622.89
re-classified into gain and loss
1. Shares enjoyed in other
misc. incomes that cannot be reclassified
into gain and loss by the invested entity
under the equity law
2．Change in the fair value of
financial asset for sale
3 Held-to-mature investment
reclassified as gain and loss in the
financial assets for sales
4. Effective part in the gain 1,840,142.79
China Fangda Group Co., Ltd. 2016 Annual Report
and loss of arbitrage of cash flow
5. Translation difference of
198,480.10
foreign exchange statement
6. Others
After-tax net of other misc. income
attributed to minority shareholders
7. Total of misc. incomes 658,029,054.88 68,215,355.27
Total of misc. incomes attributable
699,995,001.12 107,272,369.77
to the owners of the parent company
Total misc gains attributable to the
-41,965,946.24 -39,057,014.50
minor shareholders
8. Earnings per share:
(1) Basic earnings per share 0.91 0.14
(2) Diluted earnings per share 0.91 0.14
Net profit contributed by entities merged under common control in the report period was RMB0.00, net profit realized by parties
merged during the previous period is RMB0.00.
Legal representative: Xiong Jianming CFO: Lin Kebing Accounting Manager: Chen Yonggang
4. Income Statement of the Parent Company
In RMB
Items Amount occurred in the current period Occurred in previous period
1. Turnover 34,208,627.97 29,977,446.65
Less: Operation cost 8,308,449.63 3,788,422.31
Taxes and surcharges 2,093,529.75 3,182,704.86
Sales expense
Administrative expense 24,802,740.83 25,503,319.50
Financial expenses 7,625,177.79 10,990,269.77
Asset impairment loss 80,645,069.52 50,302,743.84
Plus: gains from change of fair
11,896,250.38 91,774,945.38
value (―-― for loss)
Investment gains (―-― for loss) 428,620,774.41 -292,417.86
Incl. Investment gains from
-1,384,650.25 -358,979.50
affiliates and joint ventures
2. Operational profit (―-― for loss) 351,250,685.24 27,692,513.89
Plus: non-operational income 10,030,207.56 3,063,312.33
China Fangda Group Co., Ltd. 2016 Annual Report
Incl. Loss from disposal of
1,794.87 3,581.20
non-current assets
Less: non-operational expenditure 111,955.73 5,580.96
Incl. Loss from disposal of
167.52 3,675.31
non-current assets
3. Gross profit (―-― for loss) 361,168,937.07 30,750,245.26
Less: Income tax expenses -15,993,422.84 7,935,507.77
4. Net profit (―-― for net loss) 377,162,359.91 22,814,737.49
5. After-tax net amount of other misc.
incomes
(1) Other misc. incomes that
cannot be re-classified into gain and
loss
1. Change in net liabilities
or assets due to re-measurement set
benefit program
2. Shares enjoyed in other
misc. incomes that cannot be
reclassified into gain and loss by the
invested entity under the equity law
(2) Other misc. incomes that will
be re-classified into gain and loss
1. Shares enjoyed in other
misc. incomes that cannot be
reclassified into gain and loss by the
invested entity under the equity law
2．Change in the fair value
of financial asset for sale
3 Held-to-mature
investment reclassified as gain and loss
in the financial assets for sales
4. Effective part in the gain
and loss of arbitrage of cash flow
5. Translation difference of
foreign exchange statement
6. Others
6. Total of misc. incomes 377,162,359.91 22,814,737.49
7. Earnings per share:
China Fangda Group Co., Ltd. 2016 Annual Report
(1) Basic earnings per share
(2) Diluted earnings per share
5. Consolidated Cash Flow Statement
In RMB
Items Amount occurred in the current period Occurred in previous period
1. Net cash flow from business
operations:
Cash received from sales of
3,561,159,973.46 2,136,257,004.69
products and providing of services
Net increase of customer deposits
and capital kept for brother company
Net increase of loans from central
bank
Net increase of inter-bank loans
from other financial bodies
Cash received against original
insurance contract
Net cash received from reinsurance
business
Net increase of client deposit and
investment
Increase in proposal of financial
assets measured at fair value with
variations accounted into current
income account
Cash received as interest,
processing fee, and commission
Net increase of inter-bank fund
received
Net increase of repurchasing
business
Tax refunded 1,289,574.20 2,935,298.45
Other cash received from business
148,750,746.09 80,410,147.38
operation
Sub-total of cash inflow from business
3,711,200,293.75 2,219,602,450.52
operations
Cash paid for purchasing products 2,574,194,385.29 2,044,378,497.19
China Fangda Group Co., Ltd. 2016 Annual Report
and services
Net increase of client trade and
advance
Net increase of savings in central
bank and brother company
Cash paid for original contract
claim
Cash paid for interest, processing
fee and commission
Cash paid for policy dividend
Cash paid to and for the staff 242,199,199.79 274,034,752.64
Taxes paid 261,263,312.43 103,333,723.21
Other cash paid for business
167,826,321.32 157,970,591.52
activities
Sub-total of cash outflow from business
3,245,483,218.83 2,579,717,564.56
operations
Cash flow generated by business
465,717,074.92 -360,115,114.04
operations, net
2. Cash flow generated by investment:
Cash received from investment
556,946,806.49 392,316,868.51
recovery
Cash received as investment profit 4,177,483.53 2,839,929.37
Net cash retrieved from disposal of
fixed assets, intangible assets, and other 14,083,430.40 2,480,137.42
long-term assets
Net cash received from disposal of
subsidiaries or other operational units
Other investment-related cash
received
Sub-total of cash inflow generated from
575,207,720.42 397,636,935.30
investment
Cash paid for construction of fixed
assets, intangible assets and other 96,992,511.42 43,406,919.71
long-term assets
Cash paid as investment 587,000,000.00 169,500,000.00
Net increase of loan against pledge
Net cash paid for acquiring
subsidiaries and other operational units
China Fangda Group Co., Ltd. 2016 Annual Report
Other cash paid for investment 2,666,097.15 263,000.00
Subtotal of cash outflows 686,658,608.57 213,169,919.71
Cash flow generated by investment
-111,450,888.15 184,467,015.59
activities, net
3. Cash flow generated by financing
activities:
Cash received from investment 460,899,992.60
Incl. Cash received from
investment attracted by subsidiaries
from minority shareholders
Cash received from borrowed
1,597,773,986.18 1,764,927,430.10
loans
Cash received from bond placing
Other cash received from financing
53,500,094.24 398.76
activities
Subtotal of cash inflow from financing
2,112,174 ,073.02 1,764,927,828.86
activities
Cash paid to repay debts 1,626,425,600.00 1,286,786,500.00
Cash paid as dividend, profit, or
152,697,478.73 103,109,040.79
interests
Incl. Dividend and profit paid by
subsidiaries to minority shareholders
Other cash paid for financing
1,307,919.17 54,563,032.79
activities
Subtotal of cash outflow from financing
1,780,430,997.90 1,444,458,573.58
activities
Net cash flow generated by financing
331,743,075.12 320,469,255.28
activities
4. Influence of exchange rate changes
2,076,069.73 279,854.76
on cash and cash equivalents
5. Net increase in cash and cash
688,085,331.62 145,101,011.59
equivalents
Plus: Balance of cash and cash
247,739,243.78 102,638,232.19
equivalents at the beginning of term
6. Balance of cash and cash equivalents
935,824,575.40 247,739,243.78
at the end of the period
China Fangda Group Co., Ltd. 2016 Annual Report
6. Cash Flow Statement of the Parent Company
In RMB
Items Amount occurred in the current period Occurred in previous period
1. Net cash flow from business
operations:
Cash received from sales of
41,662,670.48 26,164,484.77
products and providing of services
Tax refunded
Other cash received from business
2,230,632,211.84 755,679,626.68
operation
Sub-total of cash inflow from business
2,272,294,882.32 781,844,111.45
operations
Cash paid for purchasing products
9,897,439.60 4,416,622.18
and services
Cash paid to and for the staff 12,981,383.71 13,896,383.34
Taxes paid 3,958,332.35 2,788,279.54
Other cash paid for business
2,414,510,247.91 879,561,369.67
activities
Sub-total of cash outflow from business
2,441,347,403.57 900,662,654.73
operations
Cash flow generated by business
-169,052,521.25 -118,818,543.28
operations, net
2. Cash flow generated by investment:
Cash received from investment
161,000,000.00 30,000,000.00
recovery
Cash received as investment profit 8,991,698.17 44,373,922.22
Net cash retrieved from disposal of
fixed assets, intangible assets, and other 4,002,100.00 4,190.00
long-term assets
Net cash received from disposal of
subsidiaries or other operational units
Other investment-related cash
received
Sub-total of cash inflow generated from
173,993,798.17 74,378,112.22
investment
Cash paid for construction of fixed
281,433.15 772,927.30
assets, intangible assets and other
China Fangda Group Co., Ltd. 2016 Annual Report
long-term assets
Cash paid as investment 64,000,000.00 2,000,000.00
Net cash paid for acquiring
subsidiaries and other operational units
Other cash paid for investment
Subtotal of cash outflows 64,281,433.15 2,772,927.30
Cash flow generated by investment
109,712,365.02 71,605,184.92
activities, net
3. Cash flow generated by financing
activities:
Cash received from investment 460,899,992.60
Cash received from borrowed
440,000,000.00 448,425,600.00
loans
Cash received from bond placing
Other cash received from financing
94.24 398.76
activities
Subtotal of cash inflow from financing
900,900,086.84 448,425,998.76
activities
Cash paid to repay debts 698,425,600.00 350,000,000.00
Cash paid as dividend, profit, or
93,249,879.82 47,001,477.37
interests
Other cash paid for financing
1,307 ,919.17 624,032.79
activities
Subtotal of cash outflow from financing
792,983,398.99 397,625,510.16
activities
Net cash flow generated by financing
107,916,687.85 50,800,488.60
activities
4. Influence of exchange rate changes
70.42 -10,064.90
on cash and cash equivalents
5. Net increase in cash and cash
48,576,602.04 3,577,065.34
equivalents
Plus: Balance of cash and cash
25,583,130.83 22,006,065.49
equivalents at the beginning of term
6. Balance of cash and cash equivalents
74,159,732.87 25,583,130.83
at the end of the period
7. Statement of Change in Owners Equity (Consolidated)
Amount of the Current Term
China Fangda Group Co., Ltd. 2016 Annual Report
In RMB
Current period
Owners’ Equity Attributable to the Parent Company
Minor
Other equity tools Other Commo Total of
Items shareho
Less:
Share Prefer Perpet Capital miscella Special Surplus n risk Retaine owners’
Shares lders’
Other equity
capital red ual reserves neous reserves reserves provisio d profit
in stock equity
s
share bond income ns
756,90 1,334,0
1. Balance at the 79,099, 91,831. 51,123, 432,271 14,546,
9,905. 43,084.
end of last year 619.14 63 554.51 ,424.56 750.03
00
Plus:
Changes in
accounting
policies
Correction of
previous errors
Consolidation of
entities under
common control
Others
2. Balance at the 756,90 1,334,0
79,099, 91,831. 51,123, 432,271 14,546,
beginning of 9,905. 43,084.
619.14 63 554.51 ,424.56 750.03
current year 00
3. Amount of
32,184
change in current 388,277 2,038,6 37,716, 584,549 -76,495, 968,270
,931.0
term (―-― for ,283.82 22.89 235.99 ,151.74 960.14 ,265.30
decrease)
(1) Total of misc. 2,038,6 697,956 -41,965, 658,029
incomes 22.89 ,378.23 946.24 ,054.88
(2) Investment or 32,184
427,684 -34,530, 425,339
decreasing of ,931.0
,583.13 013.90 ,500.23
capital by owners
1. Common shares 32,184
427,684 459,869
contributed by ,931.0
,488.89 ,419.89
shareholders
2. Capital
contributed by
other equity
China Fangda Group Co., Ltd. 2016 Annual Report
instrument holders
3. Amount of
shares paid and
accounted as
owners’ equity
-34,530, -34,529,
4. Others 94.24
013.90 919.66
-113,40
(3) Profit 37,716, -75,690,
7,226.4
allotment 235.99 990.50
1. Providing of 37,716, -37,716,
surplus reserves 235.99 235.99
2. Common risk
provision
3. Allotment to the
-75,690, -75,690,
owners (or
990.50 990.50
shareholders)
4. Others
(4) Internal
transferring of
owners’ equity
1. Capitalizing of
capital reserves (or
to capital shares)
2. Capitalizing of
surplus reserves
(or to capital
shares)
3. Making up
losses by surplus
reserves
4. Others
(5) Special
reserves
1. Provided this
year
2. Used this term
-39,407, -39,407,
(6) Others
299.31 299.31
China Fangda Group Co., Ltd. 2016 Annual Report
789,09 1,016,8 2,302,3
4. Balance at the 467,376 2,130,4 88,839, -61,949,
4,836. 20,576. 13,350.
end of this period ,902.96 54.52 790.50 210.11
00 30
Amount of the Previous Term
In RMB
Last period
Owners’ Equity Attributable to the Parent Company
Minor
Other equity tools Other Commo Total of
Items shareho
Less:
Share Prefer Perpet Capital miscella Special Surplus n risk Retaine owners’
Shares lders’
Other equity
capital red ual reserves neous reserves reserves provisio d profit
in stock equity
s
share bond income ns
756,90 1,300,5
1. Balance at the 79,099, 91,831. 48,842, 349,987 65,603,
9,905. 34,627.
end of last year 220.38 63 080.76 ,825.69 764.53
00
Plus:
Changes in
accounting
policies
Correction of
previous errors
Consolidation of
entities under
common control
Others
2. Balance at the 756,90 1,300,5
79,099, 91,831. 48,842, 349,987 65,603,
beginning of 9,905. 34,627.
220.38 63 080.76 ,825.69 764.53
current year 00
3. Amount of
change in current 2,281,4 82,283, -51,057 33,508,
398.76
term (―-― for 73.75 598.87 ,014.50 456.88
decrease)
(1) Total of misc. 107,272 -39,057 68,215,
incomes ,369.77 ,014.50 355.27
(2) Investment or
-12,000 -11,999,
decreasing of 398.76
,000.00 601.24
capital by owners
1. Common shares
contributed by
China Fangda Group Co., Ltd. 2016 Annual Report
shareholders
2. Capital
contributed by
other equity
instrument holders
3. Amount of
shares paid and
accounted as
owners’ equity
-12,000 -11,999,
4. Others 398.76
,000.00 601.24
(3) Profit 2,281,4 -24,988, -22,707,
allotment 73.75 770.90 297.15
1. Providing of 2,281,4 -2,281,4
surplus reserves 73.75 73.75
2. Common risk
provision
3. Allotment to the
-22,707, -22,707,
owners (or
297.15 297.15
shareholders)
4. Others
(4) Internal
transferring of
owners’ equity
1. Capitalizing of
capital reserves (or
to capital shares)
2. Capitalizing of
surplus reserves
(or to capital
shares)
3. Making up
losses by surplus
reserves
4. Others
(5) Special
reserves
1. Provided this
year
China Fangda Group Co., Ltd. 2016 Annual Report
2. Used this term
(6) Others
756,90 1,334,0
4. Balance at the 79,099, 91,831. 51,123, 432,271 14,546,
9,905. 43,084.
end of this period 619.14 63 554.51 ,424.56 750.03
00
8. Statement of Change in Owners Equity (Parent Company)
Amount of the Current Term
In RMB
Current period
Other equity tools Other
Less: Total of
Items Share Capital miscellan Special Surplus Retaine
Preferre Perpetu Shares in owners’
capital Others reserves eous reserves reserves d profit
d share al bond stock equity
income
1. Balance at the 756,909, 38,598,96 51,123,55 402,148 1,248,872
91,831.63
end of last year 905.00 3.76 4.51 ,728.12 ,983.02
Plus:
Changes in
accounting
policies
Correction of
previous errors
Others
2. Balance at the
756,909, 38,598,96 51,123,55 402,148 1,248,872
beginning of 91,831.63
905.00 3.76 4.51 ,728.12 ,983.02
current year
3. Amount of
change in current 32,184,9 427,684,5 37,716,23 263,755 761,340,8
term (―-― for 31.00 83.13 5.99 ,133.42 83.54
decrease)
(1) Total of misc. 377,162 377,162,3
incomes ,359.91 59.91
(2) Investment or
32,184,9 427,684,5 459,869,5
decreasing of
31.00 83.13 14.13
capital by owners
1. Common shares
32,184,9 427,684,4 459,869,4
contributed by
31.00 88.89 19.89
shareholders
China Fangda Group Co., Ltd. 2016 Annual Report
2. Capital
contributed by
other equity
instrument holders
3. Amount of
shares paid and
accounted as
owners’ equity
4. Others 94.24 94.24
-113,40
(3) Profit 37,716,23 -75,690,9
7,226.4
allotment 5.99 90.50
1. Providing of 37,716,23 -37,716,
surplus reserves 5.99 235.99
2. Allotment to the
-75,690, -75,690,9
owners (or
990.50 90.50
shareholders)
3. Others
(4) Internal
transferring of
owners’ equity
1. Capitalizing of
capital reserves (or
to capital shares)
2. Capitalizing of
surplus reserves
(or to capital
shares)
3. Making up
losses by surplus
reserves
4. Others
(5) Special
reserves
1. Provided this
year
2. Used this term
(6) Others
4. Balance at the 789,094, 466,283,5 91,831.63 88,839,79 665,903 2,010,213
China Fangda Group Co., Ltd. 2016 Annual Report
end of this period 836.00 46.89 0.50 ,861.54 ,866.56
Amount of the Previous Term
In RMB
Last period
Other equity tools Other
Less: Total of
Items Share Capital miscellan Special Surplus Retaine
Preferre Perpetu Shares in owners’
capital Others reserves eous reserves reserves d profit
d share al bond stock equity
income
1. Balance at the 756,909, 38,598,56 48,842,08 404,322 1,248,765
91,831.63
end of last year 905.00 5.00 0.76 ,761.53 ,143.92
Plus:
Changes in
accounting
policies
Correction of
previous errors
Others
2. Balance at the
756,909, 38,598,56 48,842,08 404,322 1,248,765
beginning of 91,831.63
905.00 5.00 0.76 ,761.53 ,143.92
current year
3. Amount of
change in current 2,281,473 -2,174,0 107,839.1
398.76
term (―-― for .75 33.41
decrease)
(1) Total of misc. 22,814, 22,814,73
incomes 737.49 7.49
(2) Investment or
decreasing of 398.76 398.76
capital by owners
1. Common shares
contributed by
shareholders
2. Capital
contributed by
other equity
instrument holders
3. Amount of
shares paid and
accounted as
China Fangda Group Co., Ltd. 2016 Annual Report
owners’ equity
4. Others 398.76 398.76
(3) Profit 2,281,473 -24,988, -22,707,2
allotment .75 770.90 97.15
1. Providing of 2,281,473 -2,281,4
surplus reserves .75 73.75
2. Allotment to the
-22,707, -22,707,2
owners (or
297.15 97.15
shareholders)
3. Others
(4) Internal
transferring of
owners’ equity
1. Capitalizing of
capital reserves (or
to capital shares)
2. Capitalizing of
surplus reserves
(or to capital
shares)
3. Making up
losses by surplus
reserves
4. Others
(5) Special
reserves
1. Provided this
year
2. Used this term
(6) Others
4. Balance at the 756,909, 38,598,96 51,123,55 402,148 1,248,872
91,831.63
end of this period 905.00 3.76 4.51 ,728.12 ,983.02
III. General Information
China Fangda Group Co., Ltd. (the ―Company‖ or the ―Group‖) is a joint stock company registered in Shenzhen, Guangdong and
was approved by the Government of Shenzhen with Document 深府办函 (1995) 194号, and was founded, on the basis of Shenzhen
Fangda Construction Material Co., Ltd., by way of share issuing in October 1995. The unified social credit code is:
91440300192448589C; registered address: Fangda Building, Kejinan Road 12, High-tech Zone, Shenzhen. Mr. Xiong Jianming is
the legal representative.
China Fangda Group Co., Ltd. 2016 Annual Report
The Company issued foreign currency shares (B shares) and local currency shares (A shares) and listed in November 1995 and April
1996 respectively in Shenzhen Stock Exchange. The Company received the Reply to the Non-public Share Issuance of Fangda China
Group Co., Ltd. (CSRC License [2016] No.825) to allow the Company to conduct non-public issuance of 32,184,931 A-shares in
June 20116. The current registered capital is RMB789,094,836.00.
The Company has established a corporate governance structure that comprises shareholders’ meeting, board of directors and
supervisory committee. Currently, the Company sets up the President Office, Administrative Department, HR Department, Enterprise
Management Department, Financial Department, Audit and Supervisory Department, Securities Department, Technology
Department and IT Department and has established subsidiaries including Fangda Decoration, Fangda Automatic, Fangda New
Material, Fangda Property and Fangda New Energy.
The business nature and main business operations of the Company and subsidiaries (―the Group‖) include (1) production and sales of
curtain wall materials, design, production and installation of construction curtain walls; (2) assembly and production of subway
screen doors; (3) development and operation of real estate projects on land, of which rights have been obtained lawfully; (4) R&D,
installation and sales of PV devices, design and installation of PV power plants, R&D, design, production, sales and installation of
lights, electric auxiliaries and other equipment, LED products and metal products.
The financial statements and notes are approved at the 26th meeting of the 7th term of the Board held on March 17, 2017.
The consolidation scope for the consolidated financial statements includes the Company and all subsidiaries. One more subsidiary is
included in the consolidation scope. In the period, the Company wrote off Ganzhou Longneng New Energy Co. Ltd. and lost control
on subsidiaries Shenyang Fangda Semi-conductor Lighting Co., Ltd. and Shenzhen Woke Semi-conductor Lighting Co., Ltd., which
have been moved out from the consolidation scope. See Note 8 Change to consolidation scope and Note 9 Interests in other entities.
IV. Basis for the preparation of financial statements
1. Preparation basis
The financial statements are prepared according to the enterprise financial standard and guidelines, interpretation and other related
regulations (―the Standard‖) issued by the Ministry of Finance. The Group has also disclosed related financial information according
to the requirement of the Regulations of Information Disclosure No.15 – General Provisions for Financial Statements (Revised in
2014) issued by the CSRC.
The Group prepares the financial statements based on continuous operation.
The Group's auditing is based on the accrual basis. Except for some financial instruments and property held for investment, the
financial statements are prepared based on historical costs. In case of any asset impairment, the impairment provision will be made as
required.
V. Significant Account Policies and Estimates
Whether the Company needs to comply with disclosure requirements of special industries
Yes
Property development and decoration industries
China Fangda Group Co., Ltd. 2016 Annual Report
Specific accounting policy and estimate prompt:
The Group determines the accounting policies and income recognition policies for investment real estate according to the production
and business features. For details, see Note 5. 13 and Note 5. 22.
1. Statement of compliance to the Enterprise Accounting Standard
The financial report and statements are prepared with compliance to the requirement of the Enterprise Accounting Standard. They
reflect the financial position as of 31.12.16, and business performance and cash flow situation in Year 2016 of the Company frankly
and completely.
2. Fiscal Period
The fiscal year of the Group is the solar calendar year, that is from January 1 to December 31.
3. Operation period
The operation period of the Group is 12 months.
4. Bookkeeping standard money
The Company, domestic subsidiaries and overseas subsidiary Shihui International Holding Co., Ltd. use RMB as bookkeeping
standard money. Overseas subsidiary Automatic System (Hong Kong) Co., Ltd. uses HKD as bookkeeping standard money. The
Group prepares financial statements in RMB.
5. Accounting treatment of the entities under common and different control
(1) Consolidation of entities under common control
Assets and liabilities obtained by the merging party are calculated at their book value with the merged parties at the merger day in the
consolidated financial statement of the merging party in addition to the adjustment made given the difference in accounting policies.
The differences between the book value of net assets and the book value of consideration price (or the total of face value of share
issued) are adjusted to the capital reserve (share capital premium). If the share capital premium is not enough to offset the difference,
it will be adjusted to the retained gains.
Enterprise merger under common control through multiple transactions
In separate financial statements, the initial investment cost is the book value of the merged party’s net assets that can be shared by the
merging party in the consolidate financial statements of the final controlling party according to the shareholding percentage on the
merging date; adjust the capital surplus (share premium) according to the difference between the initial investment cost and the book
value of the held investment before merger plus the book value of the consideration paid on the merger date. Where the capital
surplus falls short, the retained income should be adjusted.
In consolidated financial statements, assets and liabilities obtained by the merging party from the merged party should be measured at
the book value in the final controlling party’s consolidated financial statements other than the adjustment made due to differences in
China Fangda Group Co., Ltd. 2016 Annual Report
accounting policies; adjust the capital surplus (share premium) according to the difference between the initial investment cost and the
book value of the held investment before merger plus the book value of the consideration paid on the merger date. Where the capital
surplus falls short, the retained income should be adjusted. Changes in recognized related profit and loss, other misc. incomes and
other owner's equity between the later one of the date when the original stock equity was obtained and the date when the merged
party and merging party become under the common control should respectively write down the retained profit in beginning of the
report period or current period’s profit or loss.
(2) Consolidation of entities under different control
For merger of entities under different control, the merger cost is the fair value of the asset paid, liability undertaken, and equity
securities issued for exchanging of control power over the entities at the day of acquisition. On the acquisition day, the assets and
liabilities (if any) acquired by the Group from the acquired party are recognized on the fair value.
If the merger costs exceed the fair value of the recognizable net assets of the acquired party in the merger, it is recognized as
goodwill and measured based the costs after the accumulative impairment provision is deducted; if the fair value exceeds the costs, it
is included in the income statement for the period after being re-examined.
Where there is new or further evidence on the condition existing on the acquisition date 12 months later and adjustment needs to be
made, the good will should be adjusted and merged.
(3) Treatment of related transaction fee in enterprise merger
Agency expenses and other administrative expenses such as auditing, legal consulting, or appraisal services occurred relating to the
merger of entities are accounted into current income account when occurred. The transaction fees of equity certificates or liability
certificates issued by the purchaser for payment for the acquisition are accounted at the initial amount of the certificates.
6. Preparation of Consolidated Financial Statements
(1) Consolidation scope
The consolidate scope of consolidated financial statements is determined based on control. Control means the power possessed by the
Group on invested entities to share variable returns by participating in related activities of the invested entities and to impact the
amount of the returns by using the power. Subsidiaries are enterprises controlled by the Company.
(2) Preparation of Consolidated Financial Statements
The consolidated financial statements are prepared by the Company based on financial statements of the Company and subsidiaries
and according to other related information. During preparation of consolidated financial statements, the accounting policies and
period of the Company and subsidiaries must be the same. Major transactions and balances between companies are offset.
Subsidiaries and businesses increased because of merger of enterprises under the common control during the report period are
deemed consolidated into the consolidate scope from the date of becoming controlled by the final party. The operating result and
cash flows of the subsidiaries and businesses from the date of becoming controlled by the final party should be incorporated into the
consolidate income statement and consolidate cash flow statement.
For subsidiaries and businesses increased because of merger of enterprises not under the common control, their incomes, expenses
China Fangda Group Co., Ltd. 2016 Annual Report
and profits between the date of acquisition and end of the report period should be incorporated into the consolidated income
statement, and the cash flows should be incorporated into the consolidated cash flow statement.
The part of the shareholders’ equity in subsidiaries not owned the Company are separately listed under the shareholders’ equity as
minority shareholders’ equity in the consolidated balance sheet. The part of the subsidiaries’ net profits and losses for the current
period that belongs to minority shareholders is listed as minority shareholders’ profits and losses under net profit in the consolidated
income statement. If the losses of subsidiaries shared by the minority shareholders exceed the part of the owners’ equity of the
subsidiaries at the beginning of the period, the excessive part will offset the minority shareholders’ equity.
(3) Acquisition of subsidiary minority interests
The difference between the investment cost of the long-term equity obtained from acquisition of minority interests and the share of
net assets in the subsidiary calculated continuously based on the increased shareholding percentage, and the difference between the
disposal income obtained from the partial disposal of the subsidiary’s equity investment without losing the control power and the
share of net assets in the subsidiary calculated continuously based on the increased shareholding percentage should be adjusted and
consolidated in the capital surplus in the consolidated balance sheet. Where the capital surplus falls short, the retained income should
be adjusted.
(4) Treatment of loss of subsidiaries’ control power
For loss of control over subsidiaries due to disposal of partial equity investment or other reasons, the remaining equity should be
re-measured at the fair value on the date of loss of the control power; the sum of the consideration obtained from the disposal of stock
equity and the fair value of the remaining equity, minus the sum of the share of the net assets’ book value calculated continuously
from the acquisition date according to the original shareholding percentage and the goodwill should be recorded in the investment
gain of the current period of the loss of control power.
Other misc. incomes related to the equity investment in the original subsidiary is transferred to the current period’s profit and loss
when the control power is lost, except for the other misc. incomes generated by re-measurement and resetting of earning plan or
change in the net assets by the invested party.
7. Recognition of cash and cash equivalents
Cash refers to cash on hand and deposits that can be used at any time for payment. Cash equivalent refers to the investments with
short term, strong liquidity and small risk of value fluctuation that are held by the Group and easily converted into cash with known
amount.
8. Foreign exchange business and foreign exchange statement translation
(1) Foreign currencies
Trades of the Group made in foreign currencies are translated into RMB basing on the spot exchange rate on the date when the trade
is conducted.
At the balance sheet date, foreign currency items are translated on the spot exchange rate of the balance sheet date. The exchange
differences caused by the difference in exchange rates on the balance sheet date and initial recognizing date or previous balance sheet
China Fangda Group Co., Ltd. 2016 Annual Report
date are included in the current profits and losses. Non-monetary items accounted in foreign currency and on historical costs are
exchanged with the spot exchange rate on the transaction date. Non-monetary items accounted in foreign currency and on fair value
are exchanged with the spot exchange rate on the determination date of the fair value. The exchange difference between the
accounting standard-currency amount and the original accounting standard-currency amount are included in the current profits and
losses.
(2) Translation of foreign exchange statements
9. Financial instrument
Financial instrument refers to a company’s financial assets and contracts that form other units of financial liabilities or equity
instruments.
(1) Recognition and de-recognition of financial instrument
The Group recognizes a financial asset or liability when it becomes one party in the financial instrument contract.
Financial asset is derecognized when:
(1) The contractual right to receive the cash flows of the financial assets is terminated;
(2) The financial asset is transferred and meets the following de-recognition condition.
When partial or all of the current responsibilities attached to such financial liabilities, the partial or all of the financial liabilities are
derecognized. When the Group (debtor) and creditor enter into an agreement to replace the existing financial liabilities by
undertaking new financial liabilities and the contract terms for the new financial liabilities are essentially different from those for the
existing one, the existing financial liabilities will be derecognized and new financial liabilities will be recognized.
Financial asset transactions in regular ways are recognized and de-recognized on the transaction date.
(2) Classification and measurement of financial assets
Financial assets of the Group are categorized as: financial assets measured at fair value with variations accounted into current income
account, receivables and financial assets available for sales. Financial assets are measured at the fair value at the initial recognition.
For financial assets measured at fair value with variations accounted into current income account,
related transaction expenses are accounted into the current income. For other financial assets, the related
transaction expenses are accounted into the initial recognized amounts.
Financial assets measured at fair value with variations accounted into current income account
It includes transactional financial assets and financial assets measured by fair value and with variations accounted into current
gain/loss account at initial recognition. The financial assets are further measured by fair value with the gain/loss created by variations
in fair value and related dividends and interest accounted into the current gain/loss account.
Receivables
Receivables refer to non-derivative financial assets without quotations but with fixed recoverable amount or can be confirmed,
including receivable accounts and other receivables (Note V. 10).Receivables adopt the effective interest method and are further
measured by amortized cost. Gain/loss generated at final recognition, impairment or amortization is accounted into the current
China Fangda Group Co., Ltd. 2016 Annual Report
gain/loss account.
Sellable financial assets
Sellable financial asset refers to those sellable non-derivate financial assets recognized initially and financial assets otherthan the
above-mentioned types of financial assets. Sellable financial assets are further measured by fair value and the premium/discount is
amortized by the effective interest method and recognized as interest income. Other than the exchange difference of impairment loss
and foreign exchange monetary financial assets, which is recognized as current gain and loss, the variations in fair value of sellable
financial assets is recognized as other comprehensive gain. When it is derecognized and transferred out, it is accounted into the
current gain/loss account. Dividends and interest income related to sellable financial assets are accounted into the current gain/loss
account.
Equity instrument investment without quotation in an active market and whose fair value cannot be reliably measured and derivative
financial assets that are linked to the equity instrument and that need to be settled through delivery of the equity instruments are
measured by costs.
(3) Classification and measurement of financial liabilities
The Group’s financial liabilities are mainly other financial liabilities
Other financial liabilities adopt the effective interest method and are further measured by amortized cost. Gain/loss generated at final
recognition or amortization is accounted into the current gain/loss account.
(4) Derivative financial instruments and embedded derivatives
(5) Fair value of financial instrument
For financial assets or liabilities in an active market, the Group determines their fair value based on quotations in the active market. If
there is no active market, the Company uses evaluation techniques to determine the fair value.
(6) Impairment of financial assets
Financial assets measured at fair value with variations accounted into current income account. The Group checks the book value of
financial assets on the balance sheet date. Impairment provision will be made in case of objective evidence proving impairment to the
financial assets. Objective evidence proving impairment to the financial assets refers to events actually occur after the initial
recognition of financial assets, with influence on the estimated future cash flows of the financial assets and can be reliably measured
by the Group.
Objective evidence proving impairment to the financial assets includes the following observable situations:
① Severe financial difficulties in the issuer or debtor;
② The debtor violates the contract or defaults or delays the payment of the interest or principal;
③ The Group makes compromise to the debtor with financial difficulties due to economic or legal consideration;
④ The debtor may go bankruptcy or conduct other financial reorganization;
⑤ The financial assets can no longer be traded in an active market due to material financial difficulties in the issuer;
China Fangda Group Co., Ltd. 2016 Annual Report
⑥ It cannot be recognized whether the cash flow of an asset in a group of financial assets has decreased. However, according to
open data, it can be evaluated that the estimated future cash flow of the group of financial assets has decreased and the decrease can
be measured, including:
- The payment capacity of the debtor of the financial assets continues weakening;
- Situations that may lead to the payment failure of the financial assets happen in the country or region where the debtor is
located;
⑦ Significant adverse changes occurs to the technical, market, economic or legal environment of the debtor, leading to that the
equity instrument investor may not be able to recover the investment;
⑧ Other objective evidence that can prove the impairment of the financial assets
Financial assets measured at amortized cost
If there is objective evidence proving impairment to the financial assets, the book value of the financial assets will be written down to
the present value of the estimated future cash flow (excluding undiscovered future credit loss). The write-down amount is accounted
into the current gain/loss account. The present value of the estimated future cash flow is determined by the original effective discount
rate with the value of the guanrantee considered.
Conduct imparement test separately for major financial assets. If there is objective evidence suggesting impairment, determine the
impairment loss and account it into the current gain/loss account. Test financial assets without impairment separately (including
major and minor financial assets) and conduct impairment test in the financial assets combination with similar credit risk features.
Conduct impairment test for financial assets separately recognized as impaired excluding financial assets combination with similar
credit risk features.
After the Group recognizes impair loss to financial assets measured by amortized cost, if there is object evidence suggesting that the
value of the financial assets is restored objectively due to an event after the loss, the recognized impairment loss can be reversed and
accounted into the current gain/loss account. The book value after the reversal must not exceed the amortized cost of the financial
assets on the reversal date assuming that no impairment provision was made.
(7) Transfer of financial assets
The transfer of financial assets refers to transferring or delivering the financial assets to another party (receiver) other than the issuing
party of the financial assets.
Recognition of the financial asset is terminated as soon as all of the risks and rewards attached to the financial asset have been
transferred to the receiver. Whereas if all of the risks and rewards attached to the financial assets are reserved, recognition of the
financial asset shall not be terminated.
When the Group neither transfers nor reserve almost all risks and rewards attached to the financial assets, it will be handled as: When
the controlling power over the financial asset is given up, the financial assets will be derecognized and the generated assets and
liabilities will be recognized; when the controlling power is not given up, financial asset and related liability shall be recognized
according to the extend the Company is involving in the financial asset.
(8) Deduction of financial assets and liabilities
When the Group has the legal right to deduct recognized financial assets and liabilities, can exercise the legal right, and the Group
China Fangda Group Co., Ltd. 2016 Annual Report
plans to settle them in net, liquidate and repay the financial assets and liabilities, the amount after the deduction will be presented in
the balance sheet. Exception for the deducted part, other financial assets and liabilities are separately presented in the balance sheet.
10. Receivables
(1) Receivables with major individual amount and bad debt provision provided individually
For the current year, the Company recognizes project receivables
over RMB8 million (inclusive) as ―individual receivable with
large amount‖ while recognizes product receivables over RMB2
Judging basis or standard of major individual amount
million (included) as ―individual receivable with large amount‖
and other receivables over RMB1 million (included) as
―individual receivable with large amount‖.
The Company performs impairment examination individually on
each large amount receivables, and recognizes impairment and
Provision method for account receivable with major individual provides bad debt provision when the impairment is recognized
amount and bad debt provision provided individually based on objective evidence. Those not impaired are accounted
along with the minor amount receivables and recognized in risk
groups.
(2) Recognition and providing of bad debt provisions on groups
Group Method of bad debt provision
Account age Aging method
Receivable accounts consolidated Other method
Receivables adopting the aging method in the group:
√ Applicable □ Inapplicable
Age Providing rate for receivable account Providing rate for other receivables
Within 1 year (inclusive) 3.00% 3.00%
1-2 years 10.00% 10.00%
2-3 years 30.00% 30.00%
Over 3 years 50.00% 50.00%
Receivables adopting the balance percentage method in the group
□ Applicable √ Inapplicable
Receivables adopting other methods in the group
□ Applicable √ Inapplicable
China Fangda Group Co., Ltd. 2016 Annual Report
(3) Receivables with not major individual amount and bad debt provision provided individually
Reasons for separate bad debt provision Long account age or deterioration of customer creditability
Method of bad debt provision According to the difference between the present value of future cash flow and the
book value
11. Inventories
Whether the Company needs to comply with disclosure requirements of special industries
Yes
Property development and decoration industries
(1) Classification of inventories
The Group’s inventories include purchased materials, raw materials, low-value consumables, packing materials, OEM materials,
products in process, semi-finished goods, finished goods, inventory, development costs, development products and construction in
process.
(2) Pricing of delivering inventory
Inventories are measured at cost when procured. Raw materials, products in process, commodity stocks in transit and self-made
semi-finished products are measured by the weighted average method.
Construction contracts are measured by the effective cost, including direct and indirect expenses generated before the contracts are
fulfilled. Costs generated and recognized accumulatively by construction in process and settled payment are listed in the balance
sheet as offset net amounts. The excessive part of the sum of the generated costs and recognized gross profit (loss) over the settled
payment is listed inventories; the excessive part of the settled payment over the sum of the generated costs and recognized gross
profit (loss) is listed as the prepayment received.
Travel and bidding expenses generated by execution of contracts, if they can be separated and reliably measured and it is likely to
enter into contracts, are accounted as the contract cost when the contracts are entered into; or into the current gain/loss account if the
conditions are not met.
The development costs include land transfer payment, infrastructure and facility costs, installation engineering costs, borrows before
completion of the development and other costs during the development process. The actual costs of the development product is
priced using the separate pricing method.
(3) Recognition of inventory realizable value and providing of impairment provision
The realizable net value of inventory is the estimated sales prices of the inventory less costs to be incurred until the completion,
estimated sales expense and taxes. The realizable net value of inventory should be recognized based on solid evidence with the
purpose of the inventory and after-balance-sheet-date events taken into consideration.
If the inventory cost is higher than the realizable net value on the balance sheet date, the inventory depreciation provision should be
made. The Group makes inventory depreciation provision for separate or a type of inventory. If factors affecting the inventory value
disappear on the balance sheet date, the depreciation provision made should be reversed to the original value.
(4) Inventory system
The Group uses perpetual inventory system.
(5) Amortizing of low-value consumables and packaging materials
Low-value consumables are amortized on on-off amortization basis at using.
China Fangda Group Co., Ltd. 2016 Annual Report
12. Long-term share equity investment
The Group's long-term equity investment includes control on invested entities and significant impacts on equity investment. Invested
entities on which the Group has significant impacts are associates of the Group.
(1) Recognition of initial investment costs
Long-term equity investment generated by enterprise merger: for long-term equity investment obtained by merger of enterprises
under common control, the obtained share of book value of the interests of the merged party’s owner in the consolidate financial
statements on the merger date is the investment costs; for long-term equity investment obtained by merger of enterprises not under
common control, the merger cost is the investment cost.
For long-term equity investment obtained by cash, the actually paid consideration is the initial investment cost.
(2) Subsequent measurement and recognition of gain/loss
Investments by the Company in subsidiaries are calculated using the cost method; in joint ventures are calculated using the equity
method.
For the long-term equity investment measured on the cost basis, except for the announced cash dividend or profit included in the
practical cost or price when the investment was made, the cash dividends or profit distributed by the invested entity are recognized as
investment gains in the current gain/loss account.
When the equity method is used to measure long-term equity investment, the investment cost will not be adjusted if the investment
cost of the long-term equity investment is larger than the share of fair value of the recognizable assets of the invested entity. When it
is smaller than the share of fair value of the recognizable assets of the invested entity, the book value will be adjusted and the
difference is included in the current gains of the investment.
When the equity method is used, the current investment gain is the share of the net gain realized in the current year that can be shared
or borne, recognized as investment gain and other misc. income. The book value of the long-term equity investment is adjusted
accordingly. The book value of the long-term equity investment should be accordingly decreased based on the share of profit or cash
dividend announced by the invested entity; according to other changes in the owner’s equity except for net profit and loss, other misc
income and profit distribution of the invested entity, adjust the book value of the long-term equity investment and record it in the
capital surplus (other capital surplus). When the share of the net gains that can be enjoyed is recognized, it is recognized after the net
profit of the invested entity is adjusted based on the fair value of the recognizeable assets of the invested entity according to the
Company's accounting policies and accounting period.
Where substantial influence on invested entities is imposed or joint control is implemented due to increase in investment, the sum of
the fair value of the original equity and increased investment on the conversion date is the initial investment cost under the equity
method. The difference between the fair value and book value of the original equity on the conversion date and the accumulative
change in the fair value originally accounted in other misc. income should be transferred into the profit and loss of the current period
using the equity method.
Where joint control or substantial influence on invested entities is lost due to disposal of part of investment, the remaining equity
after the disposal should be treated according to the Enterprise Accounting Standard No.22 – Recognition and Measurement of
Financial Instruments from the date of losing the joint control or substantial influence. The difference between the fair value and
book value should be accounted the profit and loss of the current period. For other misc. incomes of original share equity investment
China Fangda Group Co., Ltd. 2016 Annual Report
determined using the equity method, when the equity method is no longer used, it should be treated based on the same basis of the
treatment of related assets or liability of the invested entities; the other owners' interests related to the original share equity
investment should be transferred to gain/loss of the current period.
Where the disposal of part of the equity investment leads to loss of control on the invested entity, and the remaining equity after the
disposal can impose common control or significant impacts on the invested entity, use the equity method and make adjustment as if
the equity method was used when the remaining equity was acquired. If not, perform accounting treatment according to provisions in
the Enterprise Accounting Standard No.22 – Recognition and Measurement of Financial Tools. The difference between the fair value
and book value on the date of losing control should be transferred into the profit and loss of this period.
Where the Company’s shareholding decreases and the Company loses the control due to increased investment by another investor,
but the Company can still impose common control or significant impacts on the invested entity, the share of increased net assets of
the invested entity that can be shared by the Company should be calculated based on the new shareholding, the difference between
the net assets and original book value of the original long-term equity investment should be recorded in the profit and loss of this
period and adjusted as if equity method was used when it was acquired according to the new shareholding proportion.
Internal transaction gain not realized between the Company and affiliates is measured according to the shareholding proportion and
the investment gains is recoginzied after deduction. The unrealized internal transaction loss between the Company and the invested
entity is the impairment loss of transferred assets and should not be written off.
(3) Basis for recognition of major influence on invested entities
Major influence refers to the power to participate in decision-making of financial and operation policies of a company, but cannot
control or jointly control the making of the policies. When considering whether the Company can impose significant impacts on the
invested entity, impacts of conversion of shares with voting rights held directly or indirectly by the investor and voting rights that can
be executed in this period held by the investor and other party into shares of the invested entity should be considered.
When Company directly or indirectly holds 20% (inclusive) but less than 50% of the shares with voting rights of the invested entity,
it is generally considered that the Company can impose significant impacts unless there is clear evidence proving that the Company
shall not participate in the production and business decision making of the company; when the Company holds less than 20% of the
shares with voting rights, it is generally not considered that the Company has significant impacts on the invested entity, unless there
is clear evidence proving the contrary.
(4) Impairment examination and providing of impairment provision
See Note V. 18 for the assets impairment provision method for investment in subsidiaries and joint ventures.
13. Investment real estate
Measuring mode of investment real estate
Measurement at fair value
Basis of choosing the measurement at fair value
Investment real estates of the Group are buildings leased.
For investment real estates with an active real estate transaction market and the Group can obtain market price and other information
of same or similar real estates to reasonably estimate the investment real estates’ fair value, the Group will use the fair value mode to
measure the investment real estate subsequently. Variations in fair value are accounted into the current gain/loss account.
The fair value of investment real estate is determined with reference to the current market prices of same or similar real estates in
China Fangda Group Co., Ltd. 2016 Annual Report
active markets; when no such price is available, with reference to the recent transaction prices and consideration of factors including
transaction background, date and district to reasonably estimate the fair value; or based on the estimated lease gains and present value
of related cash flows.
For an investment real estate whose fair value is proven unable to be obtained continuously and reliably by objective evidence, the
real estate will be measured at cost basis until it is disposed and no residual value remains as assumed.
The difference of the proceeds from sales, transfer, retirement or destruction of investment real estates with book value and related
taxes deducted is accounted into the current gain/loss account.
Investment real estate that use the cost method for further measurement adopt the straight-line depreciation provision method. See
Note V. 18 for the provision method.
14. Fixed assets
(1) Recognition conditions
Fixed assets is defined as the tangible assets which are held for the purpose of producing goods, providing services, lease or for
operation & management, and have more than one accounting year of service life.The fixed assets can only be recognized hen
economic interests related to the fixed assets are very likely to flow into the company and the costs of the fixed assets can be reliably
measured. The Group measures fixed assets at the actual costs when the fixed assets are obtained
(2) Depreciation method
Annual depreciation
Type Depreciation method Service year Residual rate
rate %
Houses & buildings Average age 35-45 10 2-2.57
Mechanical equipment Average age 10 10
Transportation facilities Average age 5 10
Electronics and other
Average age 5 10
devices
PV power plants Average age 20 5 4.75
(3) See Note V. 18 for the depreciation testing and provision method for fixed assets.
China Fangda Group Co., Ltd. 2016 Annual Report
(4) At end of each fiscal year, verification will be made on the useful life, predicted retained value, and depreciation basis.
The useful life will be adjusted if the useful life is different from the predicted one; the net residual value will be adjusted if the net
residual value is different from the predicted one.
(5) Overhaul cost
Overhaul cost generated by regular examination on fixed assets is recognized as fixed assets costs when there is evidence proving
that it meets fix assets recognition conditions. If not, it will be accounted into the current gain/loss account. Depreciation provision
will be made for fixed assets between two regular overhauls.
15. Construction in process
Whether the Company needs to comply with disclosure requirements of special industries
Yes
Property development and decoration industries
The Group recognizes the cost of construction in process according to the actual construction expense, including necessary
engineering expenses, borrowing costs to be capitalized before the engineering reaches the preset service condition and other related
costs.
Construction in process will be transferred to fixed assets when it reaches the preset service condition.
See Note V. 18 for the provision method for construction in process. 16. Borrowing expenses
(1) Recognition principles for capitalization of borrowing expenses
Borrowing expenses occurred to the Group that can be accounted as purchasing or production of asset satisfying the conditions of
capitalizing, are capitalized and accounted as cost of related asset.Borrowing expenses start to be capitalized when all of the
followings are satisfied:
(1) Asset expense has already occurred. Asset expenses include cash payment, non-cash asset transferring, or undertaking of debt
with interest done for purchasing or producing of assets;
(2) The borrowing expense has already occurred;
(3) Purchasing or production activity, which is necessary for the asset to reach the useful status, has already started.
(2) During borrowing expense capitalization
When the asset satisfying the capitalizing conditions has reached its usable or sellable status, capitalizing of borrowing expenses shall
be terminated. Borrowing expenses incurred after assets that meet capitalization conditions reach the service or sales conditions are
accounted into the current gain/loss account according to the actual amounts.
If the construction or production of assets satisfying the capitalizing conditions is suspended abnormally for over 3 months,
capitalizing of borrowing expenses shall be suspended. During the normal suspension period, borrowing expenses will be capitalized
China Fangda Group Co., Ltd. 2016 Annual Report
continuously.
(3) Calculation of the capitalization amount of borrowing expense
Interest expenses generated by special borrowings less the interests income obtained from the deposit of unused borrowings or
investment gains from temporary investment is capitalized; the capitalization amount for general borrowing is determined based on
the capitalization rate which is the exceeding part of the accumulative assets expense over weighted average of the assets expense of
the special borrowing/used general borrowing. The capitalization ratio is the weighted average interest rate of general borrowings.
In the capitalization period, the exchange difference of special borrowings in foreign currencies should be fully capitalized. The
exchange difference should be recorded in the profit and loss of this period.
17. Intangible assets
(1) Pricing method, service life and depreciation test
The Group’s intangible assets include land using rights, trademarks, patent, special technologies, and software.
Intangible assets are initially measured at costs and the useful life will be determined when obtained. Where the useful life is limited,
the intangible assets will be amortized within the predicted useful life by using the amortization method that can reflect predicted
realization way of the economic benefit of the assets; whether the realization way cannot be reliably confirmed, use the straight-line
method. If the useful life is uncertain, the intangible assets are not amortized.
Intangible assets with limited useful life are amortized as followings:
Type Useful life Basis of amortization
Land using right Beneficial age Average age
Trademarks and patents 10 Average age
Proprietary technology 10 Average age
Software 5, 10 years Average age
At the end of each year, the Group will reexamine the useful life and amortization basis of intangible assets with limited useful life. If
they change, adjust the prediction and handle it according to accounting estimate changes.
On the balance sheet day, if the intangible assets become unlikely to bring future economic benefits for the Group, transfer all the
intangible assets’ book value into the current gain/loss account.
See Note V. 18 for the impairment provision method for intangible assets.
(2) Accounting policies for internal R&D expenses
The Group divides internal R&D project expenses into research and development expenses.
The research expenses are accounted the current gain/loss account.
China Fangda Group Co., Ltd. 2016 Annual Report
Development expenses can only be capitalized when the following conditions are satisfied: the technology is feasible for use or sales;
there is the intention to use or sell the intangible assets; it can be proven that the product generated by the intangible assets is
demanded or the intangible assets in demanded; if the intangible is used internally, it can be proven that it is useful; with necessary
technical and financial resources and other resources to complete the development of the intangible assets and the intangible assets
can be used or sold; the development expense can be reliably measured. If not, the development expense is accounted into the current
gain/loss account.
If a research project meets the above-mentioned conditions and passes the technical and economic feasibility study, the project will
enter the development stage.
Expenses in the development stage capitalized are listed as development expense on the balance sheet and transferred to intangible
assets when the project reaches the useful condition.
18. Assets impairment
The Group uses the cost mode to continue measuring the assets impairment to investment real estatement, fixed assets construction in
progress, intangible assets and goodwill (except for the inventories, investment real estate measured by the fair value mode, deferred
income tax assets and financial assets). The method is determined as follows:
The Group judges whether there is a sign of impairment to assets on the balance sheet day. If such sign exists, the Group estimates
the recoverable amount and conducts the impairment test. Impairment test is conducted annually for goodwill generated by mergers
and intangible assets that have not reached the useful condition no matter whether the impairment sign exists.
The recoverable amount is determined by the higher of the net of fair value minus disposal expense and the present value of the
predicted future cash flow. The Group estimates the recoverable amount on the individual asset item basis; whether it is hard to
estimate the recoverable amount on the individual asset item basis, determine the recoverable amount based on the asset group that
the assets belong to. The assets group is determined by whether the main cash flow generated by the group is independent from those
generated by other assets or assets groups.
When the recoverable amount of the assets or assets group is lower than its book value, the Group writes down the book value to the
recoverable amount, the write-down amount is accounted into the current income account and the assets impairment provision is
made.
For goodwill impairment test, the book value of goodwill generated by mergers is amortized through reasonable measures since the
purchase day to related asset groups; those cannot be amortized to related assets groups are amortized to related combination of asset
groups. The related asset groups or combination of asset groups refer to those that can benefit from the synergistic effect of mergers
and must not exceed to the reporting range determined by the Group.
When the impairment test is conducted, if there is sign of impairment to the asset group or combination of asset groups related to
goodwill, first perform impair test for asset group or combination of asset groups without goodwill and calculate the recoverable
amount and recognize the related impairment loss. Then conduct impairment test on those with goodwill, compare the book value
with recoverable amount. If the recoverable amount is lower than the book value, recognize the impairment loss of the goodwill.
Once recognized, the asset impairment loss cannot be written back in subsequent accounting period.
China Fangda Group Co., Ltd. 2016 Annual Report
19. Long-term amortizable expenses
The Group’s long-term amortizable expenses are measured at the actual costs and amortized averagely based on the beneficial term.
For long-term amortizable expenses that are not beneficial in the subsequent account periods, the residual value is fully accounted
into the current gain/loss account.
20. Staff remuneration
(1) Accounting of operational leasing
The Group pays for the medical insurance, job injury insurance and breeding insurance and housing fund according to employees’
wages and bonus and recognizes them as liabilities, which are recorded into the profit and loss or related assets costs in the current
period. If the liabilities cannot be fully paid within 12 months upon the end of the report period in which the employees provide
service, and the financial impacts are substantial, the liabilities should be measured at the discounted amount.
(2) Accounting of post-employment welfare
The post-employment welfare of the Group is a defined plan, which means that the Company does not need to assume any
responsibility after making fixed contribution to an independent fund. The defined plan includes basic pension and unemployment
insurance. The contribution of the plan is recognized as liabilities and recorded in the profit and loss of this period or related assets
costs.
(3) Accounting of dismiss welfare
Where the Group provides dismiss welfare for employees, the staff remuneration liabilities is recognized on the earlier one of the
following two date: when the Group cannot cancel the dismiss welfare provided for termination of employment or layoff; when the
Group recognizes the costs or expenses of reorganization related to the payment of dismiss welfare.
21. Anticipated liabilities
When responsibilities occurred in connection to contingent issues, and all of the following conditions are satisfied, they are
recognized as expectable liability in the balance sheet:
(1) This responsibility is a current responsibility undertaken by the Group;
(2) Execution of this responsibility may cause financial benefit outflow from the Group;
(3) Amount of the liability can be reliably measured.
Expected liabilities are initially measured at the best estimation on the expenses to exercise the current responsibility. The book value
of expected liability is revised at balance sheet day, and adjustment will be made to reflect current best estimation.
22. Revenue
Whether the Company needs to comply with disclosure requirements of special industries
Yes
China Fangda Group Co., Ltd. 2016 Annual Report
Property development and decoration industries
The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure
Guideline No.6 – Listed Companies Engaged in Decoration Business.
(1) General principles
1. Sales of goods
When all of the following conditions are satisfied, the sales of goods are recognized as sales income according to the contract amount
received or receivable from the buyer: (1) Main risks and rewards attached to the ownership of the goods have been transferred to the
buyer; (2) No succeeding power of administration or effective control is reserved which are usually attached to ownership; (3)
Amount received can be reliably measured; (4) Related financial benefit may inflow to the Company; (5) Relative costs, occurred or
will occur, can be reliably measured.
2. Providing of labor service
If they are not in the same year, then use the estimation on percentage basis when it is possible.
The completion percentage is the costs occurred on the total cost.
The reliable estimation of the result of providing of labor service must meet the following conditions: A. the revenue can be reliably
measured; B. the economic benefit is very likely to flow into the company; C. the completion can be determined reliably; D. costs
incurred or will be incurred can be reliably measured.
If the result cannot be reliably estimated, use the service cost amount of the compensation obtained or will be obtained to recognize
the revenue of the providing of labor service and recognize the incurred laber service cost as the current expense. If no compensation
can be obtained for incurred labor service cost, no revenue can be recognized.
3. Demising of asset using rights
The revenue is recognized when the financial benefit in connection with the demising of asset using right was received and the
amount can be reliably measured.
4. Construction contracts
On the balance sheet day, the Group recognizes the contract income and costs using the completion percentage method if the result of
the construction contract can be reliably estimated. If not, such contracts are treated differently. If the contract cost can be recovered,
the revenue is recognized according to the actual contract costs that can be recovered and the contract cost is recognized as the
current expense; if not, the contract cost is recognized as the current expense and no revenue is recognized.
If the estimated total costs exceed the total revenue, the Group recognizes the estimated loss as the current expense.
The competition percentage is determined by the share of the costs incurred in the total cost.
The reliable estimation of the result of a construction contract must meet the following conditions: A. the revenue can be reliably
measured; B. the economic benefit is very likely to flow into the company; C. the completion cost can be clearly distinguished and
determined reliably; D. the completion and costs that will be incurred for completion of the contract can be reliably recognized.
(2) Specific revenue recognition method
China Fangda Group Co., Ltd. 2016 Annual Report
① Construction contracts
Metro screen door projects of the Company and Shenzhen Fangda Automatic System, and curtain wall project of Fangda Jianke are
individual construction contracts. They are accounted by the following means:
Construction contracts completed within a fiscal year are recognized for their income and cost upon completion.
Income and expenses of the construction contracts carried over-year are recognized on percentage basis at balance sheet day when all
of the following conditions are satisfied: contract income can be reliably measured, relative financial benefit can inflow to the
Company; progress of the project and costs to complete the contract can be reliably recognized; cost occurred to complete the
contract can be clearly distinguished and reliably measured, which enables comparing of actual cost with predicted cost.
Contract costs are direct and indirect expenses occurred since the date when the contract is engaged till the completion day. The
competition percentage is determined by the share of the costs incurred in the total cost.
Construction contracts completed in current term are recognized for income according to the actual total income of the contract less
income recognized in previous terms; meanwhile, the total costs of the contract less costs recognized in previous terms are
recognized as current contract costs. If the total contract cost is predicted to be greater than the predicted total income, the predicted
loss shall be recognized as current cost instantly.
Parts of the curtain wall project under Fangda Jianke are outsourced, and administrative fees are collected at the agreed rate. For
these construction contracts, income will be recognized when ongoing payment for the project is received and corresponding costs
are transferred.
② Sales product
Revenue of products for domestic sales is recognized when the Group delivers the products and receives the sales payment or obtains
the payment voucher; revenue for products for overseas sales is recognized at departure of the products.
③ Real estate sales
房地产销售收入于签订合同并履行合同规定的义务，开发产品已完工并取得竣工验收备案（回执），办理了交付手续或者可
以根据购房合同约定的条件视同客户接收，款项已经取得或者确信可以取得，成本能够可靠的计量时确认。
23. Government subsidy
(1) Judgment basis and accounting treatment of assets-related government subsidy
Government subsidy is only recognized when the required conditions are met and the subsidy is received.
When a government subsidy is monetary capital, it is measured at the received or receivable amount. When there is no clear evidence
indicating compliance with related conditions for governmental support and it is estimated that the Company can receive a
government subsidy, it will be measured at the receivable amount. Otherwise, it is measured at the amount actually received. None
monetary capital are measured at fair value; if no reliable fair value available, recognized at RMB1.
Government subsidies related to assets are obtained by the Group to purchase, build or formulate in other manners long-term assets;
China Fangda Group Co., Ltd. 2016 Annual Report
or subsidies related to benefits.
For subsidies that can formulate long-term assets without clear government regulations, the part of the subsidies corresponding to the
asset value will be measured as assets-related government subsidies, while the rest of them will be measured as benefit-related
government subsidies. Where it is difficult to distinguish them from each of them, the whole subsidies will be measured as
benefit-related government subsidies.
Government subsidies in connection with capital are recognized as differed income, and amortized straight to its useful life, and
accounted into current income account.
(2) Judgment basis and accounting treatment of return-related government subsidy
Government subsidies in connection with gains, which are used to cover current expenses or losses, are recognized as current
gain/loss, if used to cover future expenses or losses, recognized as differed gains, and recorded to current income account to the
period when the expenses are recognized. Government subsidy measured at the nominal amount is accounted into current income
account.
24. Differed income tax assets and differed income tax liabilities
Income tax includes current and deferred income taxExcept for the adjustment goodwill generated by mergers or deferred income tax
related to transactions or events directly accounted into the owners’ equity, income tax is accounted as income tax expense into the
current gain/loss account.
The Group uses the temporary difference between the book value of the assets and liabilities on the balance sheet day and the tax
base and the liabilities method to recognize the deferred income tax.
The taxable temporary difference recognizes the related deferred income tax liabilities, unless the taxable temporary difference is
created by the following transactions:
(1) Initial recognition of goodwill, or of assets or liabilities generated in transactions with the following features: the transaction is
not a merger and the transaction does not affect the accounting profit or taxable proceeds;
(2) For taxable temporary difference related to investment in subsidiaries and affiliates, the reversal timing for the temporary
difference can be controlled and the difference is unlikely to be reversed in the foreseeable future.
For deductible temporary difference, deductible loss and tax deduction that can be accounted in subsequent years, the Group
recognizes the incurred deferred income tax assets to the extent to the future income tax proceeds that is very likely to be received for
deducting deductible temporary difference, deductible loss and tax deduction, unless the deductible temporary difference is generated
in following transactions:
(1) the transaction is not a merger and the transaction does not affect the accounting profit or taxable proceeds;
(2) for the taxable temporary difference related to investment in subsidiaries and affiliates, the corresponding deferred income tax
assets are recognized when the following condition is met: the temporary difference is very likely to be reversed in the foreseeable
future and it is very likely to receive the taxable proceeds that can be used to deduct the deductible temporary difference.
On the balance sheet day, the Group measures the deferred income tax assets and liabilities with the tax rate applicable during the
predicted period during which the assets are recovered or the liabilities are paid off and reflects the income tax influence of the assets
China Fangda Group Co., Ltd. 2016 Annual Report
recovery and liabilities repayment way on the balance sheet day.
On the balance sheet day, the Group re-examines the book value of the deferred income tax assets. If it is unlikely to have adequate
taxable proceeds to reduce the benefits of the deferred income tax assets, less the deferred income tax assets’ book value. When there
is adequate taxable proceeds, the lessened amount will be reversed.
25. Leasing
(1) Accounting of operational leasing
The Group transfers all the risks and rewards attached to the asset at substantially transferred to the lessee, it is recognized as
financial leasing, and the others are operational leasing.
(1) The Group is the leasor
In financial leasing, the book value of financial rental is the sum of lowest amount of the rent and the initial expenses since the date
when the lease is started. The difference between the sum of lowest rental, initial direct expense and unsecured balance and the
current value is recognized as the unrealized financial income. Unrealized financial income is recognized as financial income at
actual interest basis to the periods of the leasing period.
Rentals from operational leasing are recognized as current gains on straight basis to the periods of leasing. Initial direct expenses are
recorded to current income account.
(2) The Group is the leasee
The Group measures the leased assets as the lower of the fair value and the present value of minimum lease payment of the leased
assets on the starting date of the lease and records the minimum lease payment as long-term payable and the difference between the
two as unrecognized financing expense. The initial direct expense is accounted into asset value. Unrecognized financial cost is
recognized as financial cost at actual interest basis to the periods of the leasing period. The Group adopts the depreciation policy
same as the self-owned fixed assets to made provision for depreciation of leased assets.
Rentals in operational leasing are recorded to relative capital cost or current income account on straight basis to the periods of leasing.
Initial direct expenses are recorded to current income account.
26. Other significant accounting policies and estimates
Significant accounting judgment and estimate
The Group continuously reviews significant accounting judgment and estimate adopted for the reasonable forecast of future events
based on its historical experience and other factors.
Significant accounting judgment and assumptions that may lead to major adjustment of the book value of assets and liabilities in the
next accounting year are listed as follows:
(1) Goodwill impairment
China Fangda Group Co., Ltd. 2016 Annual Report
The Group judges whether there is impairment to goodwill at least annually. This required valuation of the use value of the asset
groups with goodwill. While estimating the use value, the Group needs to estimate the cash flow from the asset group in the future
and choose the proper discount rate to calculate the present value of the future cash flow.
(2) Estimate of fair value
The Group uses fair value to measure investment real estate and needs to estimate the fair value of investment real estate at least
quarterly. This requires the management to reasonably estimate the fair value of the investment real estate with the half of valuation
experts.
(3) Deferred income tax assets
If there is adequate taxable profit to deduct the loss, the deferred income tax assets should be recognized by all the unused tax loss.
This requires the management to make a lot of judgment to forecast the time and amount of future taxable profit and determine the
amount of the deferred tax assets based on the taxation strategy.
(4) Construction contracts
The Group recognizes income based on the completion of individual construction contract. The management determines the
completion percentage based on the actual cost in the total budget and forecasts the contract income. The starting and completion
dates of construction contracts fall in different account periods. The Group will review and adjust contract income and cost
estimation in budgets (if the actual contract income is less than the estimate or actual contract cost, contract estimation loss provision
will be made).
(5) Development cost
(6) Accounting of hedging
When the hedge relationship begins, the Group specifies the hedge relationship in writing to specify the follow: risks management
target and hedging strategy; nature of the hedged item and quantity; nature and quantity of hedging instruments, nature and
identification of hedged risks; evaluation of the hedging effectiveness, including the economic relationship between the hedged item
and hedging instrument, hedging ratio, analysis of the hedging ineffectiveness source; the beginning date of the specified hedging
relationship.
Cash flow hedging
During the existence of the hedging relationship, the part of the cumulative gain or loss of the hedging instrument within the change
to the current value of the cumulative cash flow of the hedged item is included into other misc. incomes. The part that is lower or
larger than the cash flow change is included into the gain or loss of the current period.
When the hedging relationship ends and related inventory is recognized, the hedging instrument gain or loss recognized in ―Other
misc. income hedging reserve‖ will be transferred to ―Raw materials‖.
China Fangda Group Co., Ltd. 2016 Annual Report
27. Major changes in accounting policies and estimates
(1) Changes in accounting policies
√ Applicable □ Inapplicable
Account policy changes and reasons Approval procedure Notes
According to the Notice on Increasing
Pilot Points of Business Tax/VAT Reform
(Tax Doc No. 36 (2016)), transactions
related to VAT that occur after May 1, 2016
with impacts on assets and liabilities need
to be adjusted. The item ―Business taxes
and surcharge‖ in the income statement is
26th meeting of the 7th Board of Directors
adjusted to the item ―Taxes and
surcharges‖. Related taxes originally
included in management expense such as
property tax, land use tax, vehicle and
vessel use tax and stamp tax will be
included in the item ―Taxes and
surcharges‖ from May 1, 2016.
According to the Temporary Provisions on
the Accounting of Commodity Futures
Hedging (Accounting Doc No.18 [2015]),
the Group needs to comply with all
applicable provisions. The Group will no
longer implement the Enterprise
Accounting Standard No.24 – Hedging and
Enterprise Accounting Standard No.37 –
Presentation of Financial Tools for
disclosure of hedging affairs.
Account policy changes and reasons Affected item Affected amount
According to the Notice on Increasing Pilot Points of 1. Taxes and 4,930,917.47
Business Tax/VAT Reform (Tax Doc No. 36 (2016)), surcharges
transactions related to VAT that occur after May 1, 2016 2. Administrative -4,930,917.47
with impacts on assets and liabilities need to be expense
adjusted. The item ―Business taxes and surcharge‖ in
the income statement is adjusted to the item ―Taxes and
surcharges‖. Related taxes originally included in
management expense such as property tax, land use tax,
vehicle and vessel use tax and stamp tax will be
included in the item ―Taxes and surcharges‖ from May
1, 2016.
According to the Temporary Provisions on the 1. Taxes payable 31,591.36
China Fangda Group Co., Ltd. 2016 Annual Report
Accounting of Commodity Futures Hedging 2. Deferred income tax -10,098.92
(Accounting Doc No.18 [2015]), the Group needs to liabilities
comply with all applicable provisions. The Group will 3. Other miscellaneous 214,369.04
no longer implement the Enterprise Accounting income
Standard No.24 – Hedging and Enterprise Accounting 4. Surplus reserves -23,586.15
Standard No.37 – Presentation of Financial Tools for
5. Retained profit -212,275.33
disclosure of hedging affairs.
(2) Changes in major accounting estimates
□ Applicable √ Inapplicable
VI. Taxation
1. Major taxes and tax rates
Tax Tax basis Tax rate
VAT Taxable income 3%、5%、6%、11%、13%、17%
City maintenance and construction tax Taxable turnover 1%、5%、7%
Enterprise income tax Taxable income 15%、25%
Business tax Taxable income 3%、5%
Education surtax Taxable turnover 3%
Local education surtax Taxable turnover 2%
Tax rates applicable for different tax payers
Tax payer Income tax rate
The Company 25%
Shenzhen Fangda Jianke Group Co., Ltd. 15%
Shenzhen Fangda Automation System Co., Ltd. 15%
Shenzhen Woke Semi-conductor Lighting Co., Ltd. 25%
Fangda New Materials (Jiangxi) Co., Ltd. 15%
Jiangxi Fangda New Type Aluminum Co., Ltd. 25%
Shenyang Fangda Semi-conductor Lighting Co., Ltd. 25%
Dongguan Fangda New Material Co., Ltd. 25%
Shenzhen Kexunda Software Co., Ltd. 25%
Chengda Fangda Construction Technology Co., Ltd. 15%
Fangda Decoration Engineering (Shenyang) Co., Ltd. 25%
Shenzhen Fangda Property Development Co., Ltd. 25%
Shenzhen Fangda New Energy Co., Ltd. 25%
China Fangda Group Co., Ltd. 2016 Annual Report
Guangdong Fangda SOZN Lighting Co., Ltd. 25%
Shenzhen Fangda Property Management Co., Ltd. 25%
Jiangxi Fangda Property Development Co., Ltd. 25%
Ganzhou Longneng New Energy Co., Ltd. 25%
Pingxiang Fangda Luxin New Energy Co., Ltd. 25%
Pingxiang Xiangdong Fangda New Energy Co., Ltd. 25%
Nanchang Xinjian Fangda New Energy Co., Ltd. 25%
Dongguan Fangda New Energy Co., Ltd. 25%
Shenzhen Qianhai Kechuangyuan Software Co., Ltd. 15%
2. Tax preference
(1) According to the Certification of High-tech Enterprise issued by Shenzhen Commission of Technological Innovation, Shenzhen
Commission of Finance, Shenzhen National Tax Bureau, and Shenzhen Local Tax Bureau on 19.06.15, Fangda Jianke was entitled to
enjoy a tax preference of enterprise income tax of 15% for three years (2015-2017) since the qualifications were awarded.
(2) According to the Certification of High-tech Enterprise issued by Shenzhen Commission of Technological Innovation, Shenzhen
Commission of Finance, Shenzhen National Tax Bureau, and Shenzhen Local Tax Bureau on 19.06.15, Fangda Decoration was
entitled to enjoy a tax preference of enterprise income tax of 15% for three years (2015-2017) since the qualifications were awarded.
(3) According to the Certification of High-tech Enterprise issued by Jiangxi Ministry of Science and Technology, Jiangxi Ministry of
Finance, Jiangxi National Tax Bureau, and Jiangxi Local Tax Bureau on 25.09.15, Fangda New Material was entitled to enjoy a tax
preference of enterprise income tax of 15% for three years (2015-2017) since the qualifications were awarded.
(4) On December 25, 2013, Kexunda was certified by Shenzhen Nanshan National Tax Bureau as a software and integrated circuit
designer according to the Shenzhen National Tax Reduction Registration [2013] No.739 and will enjoy exemption from the
enterprise income tax for two years and 50% reduction of the same tax for another three years from the year that the company starts
making a net profit. Kexunda started making profits in 2013 and therefore starts to enjoy the exemption. Kexunda entered the
semi-exemption period in 2015.
(5) On November 7, 2014, Chengdu Fangda was certified by Sichuan Xinjin National Tax Bureau as an encourage industry company
in the west China (Xin Jin National Tax Doc. [zzy024]) and started to enjoy a tax rate of 15%.
(6) On 02.11.15, Dongguan New Energy was certified by Dongguan National Tax Bureau Songshanhu branch as the national
supported public infrastructure project according to the Song Shan Hu Tax Doc [2015] 3305. The company is exempted from
enterprise income tax for three years and half exempted for another three years. In 2015, the company entered the exemption period.
(7) On 02.03.16, according to the document issued by Luxi National Tax Bureau, the PV power generation project undertaken by
Pingxiang Fangda Luxin New Energy Co., Ltd, became the infrastructure project supported by the central government. The company
enjoys a three-year enterprise income tax relief and 50% reduction for another three years. In 2016, the company entered the
exemption period.
(8) On 02.06.16, according to the document issued by Nanchang Xinjian District National Tax Bureau, the PV power generation
project undertaken by subsidiary Xinjian New Energy Company, became the infrastructure project supported by the central
China Fangda Group Co., Ltd. 2016 Annual Report
government. The company enjoys a three-year enterprise income tax relief and 50% reduction for another three years. In 2016, the
company entered the exemption period.
(9) On 10.03.17, according to the registration to Shenzhen National Tax Bureau, subsidiary Kechuangyuan Software became a newly
established software and integrated circuit designing company and can enjoy the two-year full exemption and three-year
half-exemption of the enterprise income tax from the first year that the company records profit. Kexunda started making profits in
2016 and therefore starts to enjoy the exemption.
VII. Notes to the consolidated financial statements
1. Monetary capital
In RMB
Items Closing balance Opening balance
Inventory cash: 11,625.54 28,072.46
Bank deposits 932,709,227.42 266,315,876.39
Other monetary capital 162,508,984.94 134,609,388.47
Total 1,095,229,837.90 400,953,337.32
Including: total amount deposited in
27,553,060.26 5,722,165.37
overseas
Other note
1. A bank deposit of RMB728,405.91 of Fangda SOZN was frozen by the court due to a lawsuit.
2. The closing balance of the book value of the other monetary capital RMB162,508,984.94 is mainly the futures, bank acceptance
bill and guarantee deposit and investment, including a deposit of RMB158,676,856.59. The deposit and frozen deposit shall not
be treated as cash and cash equivalent in the preparation of cash flow statements.
3. The closing monetary capital increased 173.16% by the beginning of year, which is main attributable to payments received from
sales of development products of Fangda Property.
2. Financial assets measured at fair value with variations accounted into current income account
In RMB
Items Closing balance Opening balance
Transactional financial assets 14,546,206.58
Investment in equity tools 14,546,206.58
Total 14,546,206.58
Others:
The closing balance is the fair value of the shares of SINO OIL & GAS acquired by Shihui International Holding Co., Ltd.
China Fangda Group Co., Ltd. 2016 Annual Report
3. Derivative financial assets
√ Applicable □ Inapplicable
In RMB
Items Closing balance Opening balance
Futures contracts 2,232,200.00
Total 2,232,200.00
Others:
It is mainly attributable to the cash flow hedging on aluminum futures contracts conducted by Fangda Jianke and Fangda New
Material.
4. Notes receivable
(1) Classification of notes receivable
In RMB
Items Closing balance Opening balance
Bank acceptance 11,819,567.96 10,289,884.74
Commercial acceptance 7,078,538.15 86,957,775.82
Total 18,898,106.11 97,247,660.56
(2) The Group has no endorsed or discounted immature receivable notes at the end of the period.
In RMB
Items De-recognized amount Not de-recognized amount
Bank acceptance 55,472,384.90
Commercial acceptance 32,130,840.26 1,000,000.00
Total 87,603,225.16 1,000,000.00
(3) Notes transferred to accounts receivable due to default of the issue at the end of period
In RMB
Amount transferred to accounts receivable at the end of the
Items
period
Commercial acceptance 8,219,684.36
Total 8,219,684.36
China Fangda Group Co., Ltd. 2016 Annual Report
5. Account receivable
(1) Account receivable disclosed by categories
In RMB
Closing balance Opening balance
Remaining book Remaining book
Bad debt provision Bad debt provision
Type value Book value
Book value
Proportio Provision value Proportio Provision
Amount Amount Amount Amount
n rate n rate
Recognition and 1,611,9
2,573,18 230,259, 2,342,929 206,824,1 1,405,151,1
providing of bad debt 98.35% 8.95% 75,331. 99.41% 12.83%
8,876.31 248.17 ,628.14 97.04 34.89
provisions on groups
Account receivable
with minor individual
43,290,08 43,290,08 9,541,6 8,974,655
amount and bad debt 1.65 100.00% 0.00 0.59% 94.06% 567,000.00
6.64 6.64 55.45 .45
provision provided
individually
1,621,5
2,616,478, 273,549,3 2,342,929 215,798,8 1,405,718,1
Total 100 10.45% 16,987. 100.00% 13.31%
962.95 34.81 ,628.14 52.49 34.89
Account receivable with major individual amount and bad debt provision provided individually at the end of the period:
□ Applicable √ Inapplicable
In the group, the account receivable of which bad debt provision is made through the account aging method:
√ Applicable □ Inapplicable
In RMB
Closing balance
Age
Account receivable Bad debt provision Provision rate
Sub-item of within 1 year
Subtotal for less than 1 year 1,787,613,339.00 54,940,714.86 3.07%
1-2 years 460,357,808.24 46,035,780.83 10.00%
2-3 years 166,630,560.32 49,989,168.10 30.00%
Over 3 years 158,587,168.75 79,293,584.38 50.00%
Total 2,573,188,876.31 230,259,248.17 8.95%
Group recognition basis:
Account receivable adopting the balance percentage method in the group
□ Applicable √ Inapplicable
Account receivable adopting other methods in the group:
China Fangda Group Co., Ltd. 2016 Annual Report
(2) Bad debt provision made, returned or recovered in the period
A bad debt provision of RMB114,377,848.44 was made in the period. RMB0.00 was recovered or reversed.
(3) Written-off account receivable during the period
In RMB
Items Amount
Account receivable written off 49,724,837.98
Including significant account receivable:
In RMB
Writing-off
Entity Nature Amount Reason Related transaction
procedure
Notes to written-off account receivable
(4) Balance of top 5 accounts receivable at the end of the period
The total balance of top-five accounts receivable at the end of the period is RMB617,312,381.69, accounting for 23.59% of the total
remaining balance of all accounts receivable. The bad debt provision made at the end of the period is RMB22,230,971.80.
6. Prepayment
(1) Account age of prepayments
In RMB
Closing balance Opening balance
Age
Amount Proportion Amount Proportion
Less than 1 year 28,442,485.03 90.22% 23,448,649.55 73.89%
1-2 years 1,224,651.51 3.88% 3,490,224.16 12.05%
2-3 years 540,874.20 1.72% 1,418,149.13 5.15%
Over 3 years 1,318,315.51 4.18% 1,700,041.06 8.91%
Total 31,526,326.25 -- 30,057,063.90 --
Explanation of non-settlement of significant prepayments with an accounting age of more than 1 year:
(2) Balance of top 5 prepayments at the end of the period
The total of top5 prepayments in terms of the prepaid entities in the period is RMB13,124,327.58, accounting for 41.63% of the total
prepayments at the end of the period.
Others:
China Fangda Group Co., Ltd. 2016 Annual Report
7. Receivable interest
(1) Receivable interest
In RMB
Items Closing balance Opening balance
Bank financial products 302,950.68
Total 302,950.68
8. Other receivables
(1) Other receivables disclosed by categories
In RMB
Closing balance Opening balance
Remaining book Remaining book
Bad debt provision Bad debt provision
Type value Book value
Book value
Proportio Provision value Proportio Provision
Amount Amount Amount Amount
n rate n rate
Recognition and
67,471,2 10,092,2 57,378,99 65,503, 12,407,63 53,095,948.
providing of bad debt 98.79% 14.96% 99.78% 18.94%
44.99 50.27 4.72 587.52 9.06
provisions on groups
Other receivables
with minor individual
825,887. 825,887. 146,100 146,100.9
amount and bad debt 1.21% 100.00% 0.00 0.22% 100.00% 0.00
03 03 .95
provision provided
individually
68,297,1 10,918,1 57,378,99 65,649, 12,553,74 53,095,948.
Total 100.00% 15.99% 100.00% 19.12%
32.02 37.30 4.72 688.47 0.01
Other receivables with major individual amount and bad debt provision provided individually at the end of the period:
□ Applicable √ Inapplicable
In the group, the other receivables of which bad debt provision are made through the account aging method:
√ Applicable □ Inapplicable
In RMB
Closing balance
Age
Other receivables Bad debt provision Provision rate
Sub-item of within 1 year
Subtotal for less than 1 year 35,553,273.10 1,114,262.43 3.13%
1-2 years 16,283,309.86 1,628,330.99 10.00%
China Fangda Group Co., Ltd. 2016 Annual Report
2-3 years 2,338,370.89 701,511.28 30.00%
Over 3 years 13,296,291.14 6,648,145.57 50.00%
Total 67,471,244.99 10,092,250.27 14.96%
Group recognition basis:
Other receivables adopting the balance percentage method in the group:
□ Applicable √ Inapplicable
Other receivables adopting other methods in the group
□ Applicable √ Inapplicable
(2) Bad debt provision made, returned or recovered in the period
A bad debt provision of RMB4,319,687.39 was made in the period. RMB0.00 was recovered or reversed.
(3) Other receivable written off in the current period
In RMB
Items Amount
Other receivable written off 5,492,205.48
Including significant other receivable:
In RMB
Writing-off
Entity Nature Amount Reason Related transaction
procedure
Notes to written-off other receivables:
(4) Other receivables are disclosed by nature
In RMB
By nature Closing balance of book value Opening balance of book value
Deposit 35,468,468.79 36,529,862.27
Construction borrowing and advanced
16,300,394.58 17,242,358.04
payment
Staff borrowing and petty cash 2,954,984.22 3,062,219.75
Receivable refund of VAT 1,949,939.35 80,888.90
Others 11,623,345.08 8,734,359.51
Total 68,297,132.02 65,649,688.47
(5) Balance of top 5 other receivables at the end of the period
In RMB
China Fangda Group Co., Ltd. 2016 Annual Report
Balance of bad debt
Entity By nature Closing balance Age Percentage (%) provision at the end
of the period
Lanzhou Railway
Deposit 6,931,316.60 1-2 years 10.15% 693,131.66
Transport Co., Ltd.
China Merchants
Futures Brokerage Futures margin 6,806,153.50 Less than 1 year 9.97% 204,184.61
Co., Ltd.
Advanced
Wang Weihong 4,944,388.15 Over 3 years 7.24% 2,472,194.08
construction fee
Real estate sales
Sun Quan 3,230,961.00 Less than 1 year 4.73% 96,928.83
payment
Advanced
Xin Song 2,620,327.61 Over 5 years 3.84% 1,310,163.81
construction fee
Total -- 24,533,146.86 -- 35.93% 4,776,602.99
9. Inventories
(1) Classification of inventories
In RMB
Closing balance Opening balance
Items Remaining book Depreciation Remaining book Depreciation
Book value Book value
value provision value provision
Raw materials 83,474,670.86 1,776,760.32 83,474,670.86 85,916,458.16 7,069,471.61 78,846,986.55
Product in
16,439,362.04 16,439,362.04 6,971,619.92 6,971,619.92
process
Finished goods in
8,845,931.76 8,845,931.76 18,325,455.59 5,513,219.11 12,812,236.48
stock
Assets unsettled
for finished
186,288,217.00 186,288,217.00 226,526,505.83 1,830,742.67 224,695,763.16
construction
contracts
Low price
73,018.52 73,018.52 69,223.68 69,223.68
consumable
OEM materials 2,206,059.11 1,499,169.52 706,889.59 8,791,959.78 1,218,716.77 7,573,243.01
Development cost 1,116,777,166.82 1,116,777,166.82 986,708,925.20 986,708,925.20
Goods delivered 35,068,431.20 35,068,431.20 0.00 28,913,305.53 28,913,305.53
Development 579,792,563.00 579,792,563.00
China Fangda Group Co., Ltd. 2016 Annual Report
products
Total 2,028,965,420.31 38,344,361.04 1,990,621,059.27 1,362,223,453.69 15,632,150.16 1,346,591,303.53
(2) Inventory depreciation provision
In RMB
Increase in this period Decrease in this period
Items Opening balance Recover or Closing balance
Provision Others Others
write-off
Raw materials 7,069,471.61 2,948,564.64 2,344,146.65 1,776,760.32
Finished goods in
5,513,219.11 3,161,391.39 2,351,827.72
stock
Assets unsettled
for finished
1,830,742.67 1,830,742.67
construction
contracts
Goods delivered 35,068,431.20 35,068,431.20
OEM materials 1,218,716.77 280,452.75 1,499,169.52
Total 15,632,150.16 35,348,883.95 6,109,956.03 6,526,717.04 38,344,361.04
Item Basis for recognition of net realizable Reason
value
Raw materials Realizable net value is lower the cost Used or disposed
Product in process Realizable net value is lower the cost Used or disposed
Finished goods in stock Realizable net value is lower the cost Used or disposed
Goods delivered Realizable net value is lower the cost
Asset formed by construction contract Predicted construction contract loss
OEM materials Realizable net value is lower the cost
(3) Balance at the end of the period includes capitalization of borrowing expense
The balance at the end of the period includes capitalization of borrowing expense of Fangda Town project of RMB67,450,413.36.The
capitalization amount of cumulative borrowing expenses is RMB90,234,173.92, of which RMB45,862,952.52 occurred in this year.
(4) Assets unsettled for finished construction contracts at the end of the period
In RMB
Items Amount
Accumulative occurred costs 7,097,768,053.00
China Fangda Group Co., Ltd. 2016 Annual Report
Accumulative recognized gross margin 1,239,280,706.00
Settled amount 8,150,760,542.00
Assets unsettled for finished construction contracts 186,288,217.00
Others:
(5) Development cost
Project Starting time Estimated finish Estimated total Closing amount Opening amount Closing
time investment depreciation
provision
Fangda Town May 2014 2017-12-31 RMB2.5 billion 916,817,936.27 886,932,360.20
Jiangxi Phoenix Not started 2018-12-31 RMB600 199,959,230.55 99,776,565.00
Land project million
Total 1,116,777,166.82 986,708,925.20
Note: The Jiangxi Phoenix Land project has not been started. The current development cost is mainly the land selling price.
10. Other current assets
In RMB
Items Closing balance Opening balance
Input tax to be deducted 14,896,029.18 11,083,687.96
Bank financial products 41,000,000.00
Prepaid income tax 433,807.84 312,030.09
Prepaid VAT 4,726,521.18
Prepaid business tax 1,150,216.13
Total 62,206,574.33 11,395,718.05
Others:
11. Sellable financial assets
(1) Sellable financial assets
In RMB
Closing balance Opening balance
Items Remaining Impairment Remaining Impairment
Book value Book value
book value provision book value provision
Sellable equity
28,562,575.67 28,562,575.67
instruments:
Measured at cost 28,562,575.67 28,562,575.67
Total 28,562,575.67 28,562,575.67
China Fangda Group Co., Ltd. 2016 Annual Report
(2) Sellable financial assets messaged at costs at the end of the period
In RMB
Remaining book value Impairment provision Shareholdi Cash
Invested Beginning Beginning ng in the dividend
Closing Closing
entity of the Increase Decrease of the Increase Decrease invested in the
balance balance
period period entity period
Shenyang 28,562,575 28,562,575
64.58%
Fangda .67 .67
28,562,575 28,562,575
Total --
.67 .67
12. Long-term share equity investment
In RMB
Change (+,-) Balance
Investment of
Other
gain and Impa impairme
Decre miscella Cash
Opening Increased loss Other irme Closing nt
Invested entity ased neous dividend or
balance investmen recognized equity nt Others balance provision
invest income profit
t using the change provi at the end
ment adjustme announced
equity sion of the
nt
method period
1. Joint venture
2. Associate
Shenzhen
Ganshang Joint 8,511,197.9 8,600,939
89,741.80
Investment Co., 8 .78
Ltd.
Shenzhen
Huihai Yirong 1,978,482.9 3,000,000 -1,474,392. 3,504,090
Internet Service 5 .00 05 .90
Co., Ltd.
10,489,680. 3,000,000 -1,384,650. 12,105,03
Subtotal
93 .00 25 0.68
10,489,680. 3,000,000 -1,384,650. 12,105,03
Total
93 .00 25 0.68
Other note
The second installment of contributed capital of RMB3 million paid to Shenzhen Huihai Yirong Internet Financial Service Co., Ltd.
in this year. The shareholding remains 10% with one director appointed in the board of directors.
China Fangda Group Co., Ltd. 2016 Annual Report
13. Investment real estates
(1) Investment real estate measured at costs
√ Applicable □ Inapplicable
In RMB
Items Houses & buildings Land using right Construction in process Total
I. Book value
1. Opening balance 37,176,315.46 37,176,315.46
2. Increase in this
969,999.67 969,999.67
period
(1) External
969,999.67 969,999.67
purchase
(2) Transfer-in from
inventory\fixed
assets\construction in
progress
(3) Increase due to
enterprise merger
3. Decrease in this
period
(1) Purchase
(2) Other
transfer-out
4. Closing balance 38,146,315.13 38,146,315.13
II. Accumulative
depreciation and
amortization
1. Opening balance 6,462,722.25 6,462,722.25
2. Increase in this
978,524.20 978,524.20
period
(1) Provision or
978,524.20 978,524.20
amortization
3. Decrease in this
period
(1) Purchase
(2) Other
transfer-out
4. Closing balance 7,441,246.45 7,441,246.45
China Fangda Group Co., Ltd. 2016 Annual Report
III. Impairment provision
1. Opening balance
2. Increase in this
period
(1) Provision
3. Decrease in this
period
(1) Purchase
(2) Other
transfer-out
4. Closing balance
IV. Book value
1. Closing book
30,705,068.68 30,705,068.68
value
2. Opening book
30,713,593.21 30,713,593.21
value
(2) Investment real estate measured at fair value
√ Applicable □ Inapplicable
In RMB
Items Houses & buildings Land using right Construction in process Total
I. Opening balance 304,615,212.53 304,615,212.53
II. Change in this period -1,524,649.91 -1,524,649.91
Add: external
purchase
Transfer-in
from inventory\fixed
assets\construction in
progress
Increase due to
enterprise merger
Less: disposal 13,082,954.01 13,082,954.01
Other
transfer-out
Change in fair value 11,558,304.10 11,558,304.10
III. Closing balance 303,090,562.62 303,090,562.62
China Fangda Group Co., Ltd. 2016 Annual Report
The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure
Guideline No.3 – Listed Companies Engaged in Property Development.
Disclosure of investment real estate measured at fair value by projects
In RMB
Rental
Building income in Opening Closing fair Change in fair Reason for the
Project Location
area the report fair value value value change and report
period
The fair value of the
investment real
estate is determined
based on 深同诚评
26,185,826. 285,817,69
Fangda Town Shenzhen 18204.95 296,740,660.63 3.82% 字(2,017A)01YQC
54 1.53
第 004 号 Real
Estate Valuation
Report issued by
TOUCHSTONE.
No new investment real estate measured at fair value in the report period
(3) Investment real estate without ownership certificate
In RMB
Items Book value Reason
Houses in Dalian of Fangda Jianke for
694,455.99 Applying for
offsetting debt
Other note
14. Fixed assets
(1) Fixed assets
In RMB
Houses & Mechanical Transport Electronics and
Items PV power plants Total
buildings equipment equipment other devices
I. Original book
value:
1. Opening
385,847,642.37 11,976,788.22 247,336,323.55 23,991,910.96 61,711,430.90 730,864,096.00
balance
2. Increase in
13,248,451.83 119,408,380.68 1,475,674.87 188,981.39 1,984,795.06 136,306,283.83
this period
(1) Purchase 13,248,451.83 1,475,674.87 188,981.39 1,330,599.85 16,243,707.94
China Fangda Group Co., Ltd. 2016 Annual Report
(2)
Transfer-in of
119,408,380.68 654,195.21 120,062,575.89
construction in
progress
(3) Increase
due to enterprise
merger
3. Decrease in
52,094,928.81 125,447.68 108,659,247.31 1,268,275.07 10,475,251.97 172,623,150.84
this period
(1) Disposal
5,261,300.00 125,447.68 3,067,307.97 910,187.23 2,381,159.57 11,745,402.45
or retirement
(2) Other
46,833,628.81 105,591,939.34 358,087.84 8,094,092.40 160,877,748.39
decrease
4. Closing
347,001,165.39 131,259,721.22 140,152,751.11 22,912,617.28 53,220,973.99 694,547,228.99
balance
II. Accumulative
depreciation
1. Opening
44,529,102.62 142,224.36 164,822,823.46 12,742,115.74 29,046,564.97 251,282,831.15
balance
2. Increase in
9,518,429.26 3,514,678.79 7,422,628.19 2,542,671.52 4,623,309.78 27,621,717.54
this period
(1) Provision 9,518,429.26 3,514,678.79 7,422,628.19 2,542,671.52 4,623,309.78 27,621,717.54
3. Decrease in
7,393,116.80 73,889,806.86 1,079,035.43 10,169,016.49 92,530,975.58
this period
(1) Disposal
293,147.58 0.00 2,624,110.68 742,637.95 2,107,182.45 5,767,078.66
or retirement
(2) Other
7,099,969.22 0.00 71,265,696.18 336,397.48 8,061,834.04 86,763,896.92
decrease
4. Closing
46,654,415.08 3,656,903.15 98,355,644.79 14,205,751.83 23,500,858.26 186,373,573.11
balance
III. Impairment
provision
1. Opening
277,744.50 16,654,521.84 0.00 0.00 16,932,266.34
balance
2. Increase in
17,227,113.29 9,172,340.62 9,690.36 26,409,144.27
this period
(1) Provision 17,227,113.29 9,172,340.62 9,690.36 26,409,144.27
3. Decrease in
17,504,857.79 24,472,472.96 9,690.36 41,987,021.11
this period
China Fangda Group Co., Ltd. 2016 Annual Report
(1) Disposal
or retirement
(2) Other
17,504,857.79 0.00 24,472,472.96 9,690.36 0.00 41,987,021.11
decrease
4. Closing
0.00 0.00 1,354,389.50 0.00 1,354,389.50
balance
IV. Book value
1. Closing
300,346,750.31 127,602,818.07 40,442,716.82 8,706,865.45 29,720,115.73 506,819,266.38
book value
2. Opening
341,040,795.25 11,834,563.86 65,858,978.25 11,249,795.22 32,664,865.93 462,648,998.51
book value
(2) Temporary idle fixed assets
In RMB
Accumulative Impairment
Items Book value Book value Notes
depreciation provision
Mechanical
21,380,678.50 3,723,440.58 17,657,237.92
equipment
Transportation
1,708,670.28 664,940.72 1,043,729.56
facilities
Electronics and other
6,142,004.42 1,975,675.60 4,166,328.82
devices
Total 29,231,353.20 6,364,056.90 22,867,296.30
(3) Fixed assets without ownership certificate
In RMB
Items Book value Reason
Houses in Urumuqi for offsetting debt 552,675.17 Applying for
Yuehai Office Building C 502 154,944.66 Historical reasons
Other note
(1) On December 31, 2016, the cumulative depreciation of the original value of RMB58,834,355.09 in the Group’s houses and
buildings is RMB7,322,643.60. The net value of RMB51,511,711.49 has been pledged to Shenzhen OCT branch of China
Construction Bank. The relevant borrowing has been repaid, but the pledge has not been released.
(2) On December 31, 2016, the cumulative depreciation of the original value of RMB29,231,353.20 in the Group’s fixed assets is
RMB29,231,353.20. The net value of RMB22,867,296.30 is the amount frozen by the court due to the Fangda SOZN sales and
purchase proceedings.
(3) The impairment provision in this period is made by subsidiary Shenyang Fangda according to the Shen Peng Sheng Evaluation
Report No.2017032.
China Fangda Group Co., Ltd. 2016 Annual Report
(4) Other decrease in the fixed assets in the period is attributable to the loss of control on subsidiaries Shenyang Fangda and
Shenzhen Woke. Relevant fixed assets are no longer included in the consolidated report.
15. Construction in process
(1) Construction in progress
In RMB
Closing balance Opening balance
Items Remaining book Impairment Remaining book Impairment
Book value Book value
value provision value provision
PV power
1,703,080.57 1,703,080.57 13,024,552.31 13,024,552.31
generation project
Chengda
Fangda’s Xinjin
energy-saving 834,644.79 834,644.79 816,356.71 816,356.71
green curtain wall
project
Engineering
project
761,792.44 761,792.44
management
platform
Dongguan
Songshanhu
531,689.44 531,689.44
showroom No.1
display
Total 2,537,725.36 2,537,725.36 15,134,390.90 15,134,390.90
(2) Changes in major construction in process in this period
In RMB
Proportio
Includin
Amount n of
g:
transfer- Other accumula Accum
Closin capitaliz Interest
Openin Increase in to decreas tive ulative
g Project ed capitaliz Capital
Project Budget g in this fixed e in engineeri capitali
balanc progress interest ation source
balance period assets in this ng zed
e for the rate
this period investme interest
current
period nt in the
period
budget
Phase I of the 30,100,0 1,093,3 29,842,29 30,935,6 Raised
101.39% 100%
Jiangxi 00.00 43.24 3.06 36.30 fund
China Fangda Group Co., Ltd. 2016 Annual Report
Nanchang Isuzu
Automobile
parking lot roof
6.3MWp
distributed PV
power generation
project
Jiangxi
Pingxiang Luxi
13MWp 93,103,1 10,257, 78,214,78 88,472,7 Raised
95.23% 100%
distributed PV 00.00 959.91 4.47 44.38 fund
power plant
project
123,203, 11,351, 108,057,0 119,408,
Total -- -- --
100.00 303.15 77.53 380.68
16. Disposal of fixed assets
In RMB
Items Closing balance Opening balance
Mechanical equipment 5,326.79
Total 5,326.79
Others:
17. Intangible assets
(1) Intangible assets
In RMB
Unpatented
Items Land using right Patent Computer software Total
technologies
I. Book value
1. Opening
98,015,399.41 9,200,126.04 24,216,408.23 7,803,625.02 139,235,558.70
balance
2. Increase in this
119,932.56 3,450,893.84 46,153.85 101,139.62 3,718,119.87
period
(1) Purchase 119,932.56 3,450,893.84 46,153.85 101,139.62 3,718,119.87
3. Decrease in this
42,038,791.23 18,634,375.05 60,673,166.28
period
(1) Purchase
China Fangda Group Co., Ltd. 2016 Annual Report
(2) Other
42,038,791.23 18,634,375.05 60,673,166.28
decrease
4. Closing
56,096,540.74 12,651,019.88 5,628,187.03 7,904,764.64 82,280,512.29
balance
II. Accumulative
amortization
1. Opening
13,336,868.22 4,402,389.58 16,323,238.98 4,584,215.67 38,646,712.45
balance
2. Increase in this
1,552,930.70 914,886.01 598,921.11 657,031.81 3,723,769.63
period
(1) Provision 1,552,930.70 914,886.01 598,921.11 657,031.81 3,723,769.63
3. Decrease in this
7,210,111.20 13,108,511.28 20,318,622.48
period
(1) Purchase
(2) Other
7,210,111.20 13,108,511.28 20,318,622.48
decrease
4. Closing
7,679,687.72 5,317,275.59 3,813,648.81 5,241,247.48 22,051,859.60
balance
III. Impairment
provision
1. Opening
5,525,863.77 5,525,863.77
balance
2. Increase in this
5,268,680.03 5,268,680.03
period
(1) Provision 5,268,680.03 5,268,680.03
3. Decrease in this
5,268,680.03 5,525,863.77 10,794,543.80
period
(1) Purchase
(2) Other
5,268,680.03 5,525,863.77 10,794,543.80
decrease
4. Closing
balance
IV. Book value
1. Closing book
48,416,853.02 7,333,744.29 1,814,538.22 2,663,517.16 60,228,652.69
value
2. Opening book
84,678,531.19 4,797,736.46 2,367,305.48 3,219,409.35 95,062,982.48
value
Intangible asset formed by internal R&D of the period takes up 3.01% in the closing total book value of intangible assets.
China Fangda Group Co., Ltd. 2016 Annual Report
(2) Failure to obtain the land use right certificates
In RMB
Items Book value Reason
Others:
18. Goodwill
(1) Original book value of goodwill
In RMB
Invested entity or Increase Decrease
Opening balance Closing balance
item of goodwill Enterprise merger Other increases Disposal
Shenzhen Woke 8,197,817.29 8,197,817.29
Fangda SOZN 26,279,395.89 26,279,395.89
Total 34,477,213.18 8,197,817.29 26,279,395.89
(2) Goodwill impairment provision
In RMB
Invested entity or Increase Decrease
Opening balance Closing balance
item of goodwill Provision Other increases Disposal
Shenzhen Woke 8,197,817.29 8,197,817.29
Fangda SOZN 6,452,698.92 19,826,696.97 26,279,395.89
Total 14,650,516.21 19,826,696.97 8,197,817.29 26,279,395.89
Test process of goodwill impairment, parameters and recognition method of goodwill impairment loss:
The Company acquired the 100% control power over Shenzhen Woke Co. by merger of enterprise under common control in
May 2007. The difference between the initial investment cost and recognizable fair value of the investee has formed the goodwill of
RMB8,197,817.29. For Shenzhen Woke was not in good business operation for successive years, impairment provision has been
provided fully upon the goodwill. Other decrease is attributable to part moved out from the consolidation scope this year.
The Company acquired the 60% control power over Fangda SOZN by merger of enterprise under common control in August 2014.
The difference between the initial investment cost of RMB48 million and recognizable fair value of the investee has formed the
goodwill of RMB26,279,395.89. Goodwill impairment of RMB6,452,698.92 has been provided in previous years. Because Fangda
SOZN is insolvent and has stopped business operation, the Company did impairment test on the goodwill of this investment
according to the current value of estimated future cash flow and made full impairment provision of RMB19,826,696.97.
Other note
China Fangda Group Co., Ltd. 2016 Annual Report
19. Long-term amortizable expenses
In RMB
Amortized
Opening Increase in this
Items amount in this Other decrease Closing balance
balance period
period
Renovation of office and plants
1,301.80 1,301.80
rented by Chengdu Fangda
Renovation of Fangda Hi-Tech
34,166.63 34,166.63
Park dormitory building
Upgrading of workshop rented by
2,494,310.08 2,494,310.08
Fangda SOZN
Jinshan factory renovation of
Fangda Decoration Shanghai 302,154.50 109,874.16 192,280.34
Branch
Epoxy floor 796,522.13 162,004.50 634,517.63
Kingdee aftersales service 73,375.26 25,157.28 48,217.98
Xuanfeng Chayuan village and
Zhuyuan village land transfer 1,304,327.46 62,475.00 57,767.56 1,309,034.90
compensation
Expense of renovation of leased
fixed assets by Fangda Property 222,948.81 111,474.36 111,474.45
Development
Dongguan separation project 233,451.85 77,817.36 155,634.49
Fangda Hi-Tech Park plant No.3
562,063.46 306,579.96 255,483.50
renovation
Upgrading of workshop rented by
Fangda Decoration Nanchang 202,118.38 41,108.82 161,009.56
Branch
Anti-junk email module service
16,506.46 16,506.46 0.00
fee
Great Wall broadband network
19,600.00 4,899.96 14,700.04
fee
Fangda Building Floor #5 wiring
38,023.68 30,419.04 7,604.64
project
Huawei storage device
13,918.38 9,278.88 4,639.50
maintenance fee
Membership fee 300,000.00 100,000.08 199,999.92
Temporary sales center 1,486,408.70 990,939.12 495,469.58
China Fangda Group Co., Ltd. 2016 Annual Report
construction cost
Subscription of newspaper and
105,699.80 0.00 105,699.80
magazines
Total 6,614,788.88 1,654,583.50 4,573,606.05 3,695,766.33
Other note
20. Differed income tax assets and differed income tax liabilities
(1) Non-deducted deferred income tax assets
In RMB
Closing balance Opening balance
Items Deductible temporary Deferred income tax Deductible temporary Deferred income tax
difference assets difference assets
Assets impairment
334,020,087.32 65,372,067.16 216,918,204.09 37,575,529.18
provision
Deductible loss 79,647,747.51 19,403,071.58 85,665,697.71 20,944,182.55
Unrealizable gross profit 59,313,354.67 13,083,940.06 23,008,088.13 3,788,898.02
Reserved expense 3,245,302.51 486,795.38 2,153,753.44 323,063.02
Reserved wage 3,519,976.72 527,996.51
Deferred earning 1,963,532.75 474,053.75 2,563,904.83 619,823.84
Anticipated liabilities 3,156,625.24 473,493.79 1,921,446.51 288,216.98
Advertisement fee 0.00 0.00 3,847,702.76 961,925.69
Adjustment of fair value
327,320.67 49,098.10 5,981,164.89 897,174.73
of investment real estate
Provided unpaid taxes 309,816,714.95 77,454,178.74
Total 791,490,685.62 176,796,698.56 345,579,939.08 65,926,810.52
(2) Non-deducted deferred income tax liabilities
In RMB
Closing balance Opening balance
Items Taxable temporary Deferred income tax Taxable temporary Deferred income tax
difference liabilities difference liabilities
Gain/loss caused by
304,518,955.06 76,129,738.77 291,979,073.34 72,994,768.34
changes in fair value
Estimated gross margin
495,010,133.99 123,752,533.50
when Fangda Town
China Fangda Group Co., Ltd. 2016 Annual Report
records income, but does
not reach the taxable
income level
Change in fair value of
sellable financial assets
2,164,873.87 324,731.08
accounted in other misc.
income
Total 801,693,962.92 200,207,003.35 291,979,073.34 72,994,768.34
(3) Details of unrecognized deferred income tax assets
In RMB
Items Closing balance Opening balance
Deductible temporary difference 69,882,888.12 51,201,110.67
Deductible loss 103,119,540.05 151,155,750.92
Total 173,002,428.17 202,356,861.59
(4) Deductible losses of the un-recognized deferred income tax asset will expire in the following years
In RMB
Year Closing amount Opening amount Notes
2016 19,999,060.04
2017 1,476,671.03 20,241,373.78
2018 58,067.78 11,130,985.83
2019 11,662,409.08
2020 80,885,430.25 88,121,922.19
2021 20,699,370.99
Total 103,119,540.05 151,155,750.92 --
Others:
In the report period, subsidiaries Shenyang Fangda and Shenzhen Woke have been moved to the liquidation team and the Company
has lost control. Therefore the deductible losses of the un-recognized deferred income tax asset decreased sharply.
21. Other non-current assets
In RMB
Items Closing balance Opening balance
Prepaid house and equipment amount 61,184,253.71 91,863,898.92
Input tax to be deducted 1,640,057.47
China Fangda Group Co., Ltd. 2016 Annual Report
Total 61,184,253.71 93,503,956.39
Others:
The closing balance of other non-current assets is mainly the prepaid house payment of Fangda Jianke.
22. Short-term borrowings
(1) Classification of short-term borrowings
In RMB
Items Closing balance Opening balance
Loan by pledge 200,000,000.00
Guarantee loan 591,000,000.00 943,000,000.00
Discount borrowing of commercial
4,957,775.82
acceptance bills
Total 591,000,000.00 1,147,957,775.82
Notes to classification of short-term borrowings
23. Derivative financial liabilities
□ Applicable √ Inapplicable
24. Notes payable
In RMB
Type Closing balance Opening balance
Commercial acceptance 88,302,684.45 78,934,714.94
Bank acceptance 468,998,636.00 224,592,924.69
Total 557,301,320.45 303,527,639.63
The total amount of payable bills that have matured but not been paid at the end of the period is RMB757,145.13.
25. Account payable
(1) Account payable
In RMB
Items Closing balance Opening balance
Account repayable and engineering
861,679,467.39 611,292,302.23
payables
China Fangda Group Co., Ltd. 2016 Annual Report
Construction payable 64,941,147.47 27,529,577.05
Payable installation and implementation
342,832,605.32 225,793,206.11
fees
Others 5,802,741.16 3,013,270.26
Total 1,275,255,961.34 867,628,355.65
(2) Significant payables aging more than 1 year
In RMB
Items Closing balance Reason
Debt of subsidiary Fangda SOZN, which is
Foshan Youfeng Trading Co., Ltd. 10,221,570.84
insolvent
Debt of subsidiary Fangda SOZN, which is
Xiangneng Hualei Optoelectronic Co., Ltd. 8,715,326.31
insolvent
Debt of subsidiary Fangda SOZN, which is
Huacan Optoelectronic (Suzhou) Co., Ltd. 6,105,483.64
insolvent
Debt of subsidiary Fangda SOZN, which is
Suzhou Nanojoin Photonics Co., Ltd. 5,768,077.38
insolvent
Total 30,810,458.17 --
Others:
26. Prepayment received
(1) Prepayment received
In RMB
Items Closing balance Opening balance
Curtain wall and screen door engineering
82,684,893.50 123,894,561.69
payment
Material loan 3,096,489.93 5,515,676.69
Real estate sales payment 198,135,269.02
Others 1,988,791.68 1,164,081.47
Total 285,905,444.13 130,574,319.85
(2) Significant prepayment aged more than 1 year
In RMB
Items Closing balance Reason
China Fangda Group Co., Ltd. 2016 Annual Report
27. Employees wage payable
(1) Employees wage payable
In RMB
Items Opening balance Increase Decrease Closing balance
1. Short-term
40,805,469.84 225,783,001.48 224,623,086.87 41,965,384.45
remuneration
2. Retirement pension
program-defined 6,958.21 9,746,103.25 9,746,103.25 6,958.21
contribution plan
3. Dismiss compensation 130,000.00 1,072,270.13 1,202,270.13
Total 40,942,428.05 236,601,374.86 235,571,460.25 41,972,342.66
(2) Short-term remuneration
In RMB
Items Opening balance Increase Decrease Closing balance
1. Wage, bonus,
38,627,929.51 210,550,400.08 209,353,368.46 39,824,961.13
allowance and subsidies
2. Employee welfare 4,443,167.74 4,443,167.74
3. Social insurance 68,000.27 4,814,469.11 4,807,895.19 74,574.19
Including:
67,483.05 4,022,768.48 4,016,194.56 74,056.97
medical insurance
Labor injury
515.52 413,360.43 413,360.43 515.52
insurance
Breeding
1.70 378,340.20 378,340.20 1.70
insurance
4. Housing fund 97,082.00 5,270,629.41 5,268,391.41 99,320.00
5. Labor union budget
2,012,458.06 704,335.14 750,264.07 1,966,529.13
and staff education fund
Total 40,805,469.84 225,783,001.48 224,623,086.87 41,965,384.45
(3) Defined contribution plan
In RMB
Items Opening balance Increase Decrease Closing balance
1. Basic pension 6,436.75 9,347,895.58 9,347,895.58 6,436.75
2. Unemployment 521.46 398,207.67 398,207.67 521.46
China Fangda Group Co., Ltd. 2016 Annual Report
insurance
Total 6,958.21 9,746,103.25 9,746,103.25 6,958.21
Others:
28. Taxes payable
In RMB
Items Closing balance Opening balance
VAT 46,317,900.91 6,981,753.65
Enterprise income tax 130,608,894.15 16,555,365.28
Personal income tax 1,440,370.54 1,201,365.12
City maintenance and construction tax 4,160,327.99 2,824,794.21
Business tax 32,136,293.62
Land using tax 684,277.95 3,683,884.01
Property tax 2,140,282.85 2,083,844.87
Education surtax 1,963,232.23 1,315,453.14
Local education surtax 1,106,894.43 489,642.89
Deed tax 3,429,437.28
Others 384,956.07 261,036.91
Total 192,236,574.40 67,533,433.70
Others:
Part of the Fangda Town phase I developed by Fangda Property has been delivered. The enterprise income tax needs to be settled and
paid, increasing the closing balance.
29. Interest payable
In RMB
Items Closing balance Opening balance
Long-term borrowing with interest
installment and repayment of principal 1,753,879.87 510,166.05
upon maturity
Short-term borrowing interests payable 881,099.60 2,578,576.91
Others 153,091.47
Total 2,634,979.47 3,241,834.43
Others:
China Fangda Group Co., Ltd. 2016 Annual Report
30. Dividend payable
In RMB
Items Closing balance Opening balance
Dividend payable not paid for more than 1 year needs to be explained:
31. Other payables
(1) Other payables presented by nature
In RMB
Items Closing balance Opening balance
Performance and quality deposit 10,596,919.41 21,697,760.34
Deposit 8,104,969.14 9,027,418.36
Reserved expense 14,327,754.95 11,714,478.57
Fangda Town pledge 100,000.00 2,900,000.00
Lawsuit indemnity 0.00 23,456,765.40
Tax withheld 309,816,714.95
Others 23,236,440.96 13,880,924.14
Total 366,182,799.41 82,677,346.81
(2) Significant payables aging more than 1 year
In RMB
Items Closing balance Reason
Other note
1. No significant payables aging more than 1 year at the end of the year
2. The tax withheld is the land VAT that needs to be settled and paid for the property delivered of the Fangda Town phase I
developed by Fangda Property.
32. Other current liabilities
In RMB
Items Closing balance Opening balance
Loan financing of precious metal 98,425,600.00
Substituted money on VAT 35,148,084.44
Total 35,148,084.44 98,425,600.00
Others:
China Fangda Group Co., Ltd. 2016 Annual Report
33. Long-term borrowings
(1) Classification of long-term borrowings
In RMB
Items Closing balance Opening balance
Loan by pledge 922,169,568.24 300,395,582.06
Total 922,169,568.24 300,395,582.06
Notes to classification of long-term borrowings:
Note: The above-mentioned borrowing is the 100% stock pledging of Fangda Property Development held by the Company.
Other note, including interest rate range:
The interest rate of long-term borrowings ranges between 5.39% and 6.785%.
34. Anticipated liabilities
In RMB
Items Closing balance Opening balance Reason
Others 3,156,625.24 1,921,446.51
Total 3,156,625.24 1,921,446.51 --
Note: including related significant assumptions and estimates for anticipated liabilities
35. Deferred earning
In RMB
Items Opening balance Increase Decrease Closing balance Reason
Government subsidy 12,284,195.68 500,000.00 1,216,970.90 11,567,224.78 Assets-related
Total 12,284,195.68 500,000.00 1,216,970.90 11,567,224.78 --
Items involving government subsidies:
In RMB
Amount
Amount of new included in Other Related to
Liabilities Opening balance Closing balance
subsidy non-operating change assets/earning
revenue
Major investment project
prize from Industry and
Trade Development 1,852,381.10 57,142.80 1,795,238.30 Assets-related
Division of Dongguan
Finance Bureau
China Fangda Group Co., Ltd. 2016 Annual Report
Massive production project
of air-breathing
7,765,817.51 123,987.24 7,641,830.27 Assets-related
double-layer hollow glass
energy-saving curtain call
Railway transport screen
door controlling system
211,523.73 43,229.28 168,294.45 Assets-related
and information
transmission technology
LED production expansion
technology renovation 1,874,331.67 381,219.96 1,493,111.71 Assets-related
project
Subsidy for purchase of
scientific achievements or
80,141.67 80,141.67 Assets-related
technologically innovative
services
Nanshan District
500,000.00 500,000.00 Assets-related
mic-business loan discount
Distributed PV power
generation project subsidy
sponsored by Dongguan 500,000.00 31,249.95 468,750.05 Assets-related
Reform and Development
Commission
Total 12,284,195.68 500,000.00 1,216,970.90 11,567,224.78 --
Others:
(1) The Dongguan Finance Bureau Industry and Trade Development Division major subsidy project is a subsidized project not
stipulated in Dongguan Financial Circular [2013] No.779. As the project has formed into long-term assets, the Company treats it as
an assets-related government subsidy.
(2) The massive production project of air-breathing double-layer hollow glass energy-saving curtain wall is a subsided project
stipulated in Guangdong Financial Doc [2013] No.183. As the project has formed into long-term assets, the Company treats it as an
assets-related government subsidy.
(3) The railway transport screen door controlling system and information transmission technology is a subsidized project stipulated in
Shenzhen Tech Innovation [2013] No.242. RMB300,000 is used to purchase equipment and RMB900,000 is used to purchase
materials and for travel fees. As the project has formed into long-term assets, the Company treats RMB300,000 as assets-related
government subsidy and RMB900,000 as earning-related government subsidy.
(4) The subsidy for purchase of scientific achievements or technologically innovative services is the subsidy fund obtained by
subsidiary Fangda SOZN according to Notice on Applying for 2015 Foshan Technology Development Fund and Parent Fund
(Zhongshan Ke Fa (2015) No.104), Notice on Zhongshan Technology Development Fund Regulations (Zhong Ke Fa (2015) No.95)
and Notice on Zhongshan Patent Fund Use Regulations (Zhong Ke Fa (2015) No.96).
(5) The Nanshan District mic-business loan discount is provided to promote micro-businesses in Nanshan District and meet financial
China Fangda Group Co., Ltd. 2016 Annual Report
demands of micro-businesses.
36. Capital share
In RMB
Change (+,-)
Opening Closing
Issued new Transferred
balance Bonus shares Others Subtotal balance
shares from reserves
Total of capital
756,909,905.00 32,184,931.00 32,184,931.00 789,094,836.00
shares
Others:
(1) By 31.12.16, the Company has 972,042 restricted shares, all of which are held by senior management natural person.
2. The Company received the Reply to the Non-public Share Issuance of Fangda China Group Co., Ltd. (CSRC License [2016]
No.825) to allow the Company to issue 32,184,931 shares. A total of RMB459,869,219.89 was raised, including an increased
registered capital of RMB32,184,931.00 and remainder RMB427,684,488.89 transferred to capital reserve. The increase shares and
capital reserve have been verified by Grant Thornton (limited liability partnership).
37. Capital reserve
In RMB
Items Opening balance Increase Decrease Closing balance
Capital premium (share
38,238,222.48 427,684,583.13 465,922,805.61
capital premium)
Other capital reserves 40,861,396.66 39,407,299.31 1,454,097.35
Total 79,099,619.14 427,684,583.13 39,407,299.31 467,376,902.96
Other note, including explanation about the reason of the change:
1. Other capital reserve decreased RMB39,407,299.31 this year. For details, see Note XV. 3.
2. The increase in the share capital premium is the premium in the non-public issued shares of RMB427,684,488.89 and the
fractional historic dividend of RMB94.24 received from the Shenzhen branch of China Securities Depository and Clearing
Company Limited.
38. Other miscellaneous income
In RMB
Amount occurred in the current period
Opening Closing
Items Amount Less: amount Less: After-tax After-tax
balance balance
before written into Income tax amount amount
China Fangda Group Co., Ltd. 2016 Annual Report
income tax other gains expenses attributed to attributed to
and transferred the parent minority
into gain/loss shareholder
in previous s
terms
2. Other misc. incomes that will be 2,363,353.9 2,038,622.8 2,130,454
91,831.63 324,731.08
re-classified into gain and loss 7 9 .52
Effective part in the gain and 2,164,873.8 1,840,142.7 1,840,142
324,731.08
loss of arbitrage of cash flow 7 9 .79
Translation difference of 198,480.1
198,480.10 198,480.10
foreign exchange statement
Investment real estate measured at
91,831.63 91,831.63
fair value
2,363,353.9 2,038,622.8 2,130,454
Other miscellaneous income 91,831.63 324,731.08
7 9 .52
Other note, including the adjustment of the initial recognition amount of the effective part of the cash flow hedging profit and loss
transferred to the hedged item:
39. Surplus reserves
In RMB
Items Opening balance Increase Decrease Closing balance
Statutory surplus
51,123,554.51 37,716,235.99 88,839,790.50
reserves
Total 51,123,554.51 37,716,235.99 88,839,790.50
Note, including explanation about the reason of the change:
40. Retained profit
In RMB
Items Current period Last period
Adjustment on retained profit of previous period 432,271,424.56 349,987,825.69
Retained profit adjusted at beginning of year 432,271,424.56 349,987,825.69
Plus: Net profit attributable to owners of the
697,956,378.23 107,272,369.77
parent
Less: Statutory surplus reserves 37,716,235.99 2,281,473.75
Common share dividend payable 75,690,990.50 22,707,297.15
Closing retained profit 1,016,820,576.30 432,271,424.56
Details of retained profit adjusted at beginning of the period
China Fangda Group Co., Ltd. 2016 Annual Report
1) Retrospective adjustment due to adopting of the Enterprise Accounting Standard and related regulations, included the retained
profit by RMB0.
2) Variation of accounting policies, influenced the retained profit by RMB0.
3) Correction of material accounting errors, influenced the retained profit by RMB0.
4) Change of consolidation range caused by merger of entities under common control, influenced the retained profit by RMB0.
5) Other adjustment influenced the retained profit by RMB0.
41. Operational revenue and costs
In RMB
Amount occurred in the current period Occurred in previous period
Items
Income Cost Income Cost
Main business 4,125,885,820.70 2,535,301,290.92 2,492,635,367.98 2,135,389,422.03
Other businesses 77,980,353.02 59,869,192.43 57,832,126.80 36,134,778.32
Total 4,203,866,173.72 2,595,170,483.35 2,550,467,494.78 2,171,524,200.35
42. Taxes and surcharges
In RMB
Items Amount occurred in the current period Occurred in previous period
City maintenance and construction tax 11,735,072.37 5,128,049.65
Education surtax 8,599,067.72 3,704,749.51
Property tax 3,408,074.24 1,024,088.16
Land using tax 1,188,786.11 125,624.48
Stamp tax 1,663,716.30
Business tax 6,231,233.83 23,143,208.47
Land VAT 347,775,304.93
Others 233,450.92 490,836.33
Total 380,834,706.42 33,616,556.60
Others:
See VI. Tax for the calculation standard of business tax and surcharges.
43. Sales expense
In RMB
Items Amount occurred in the current period Occurred in previous period
Labor costs 23,832,334.36 28,418,273.77
Freight and miscellaneous charges 7,560,644.12 6,900,391.34
China Fangda Group Co., Ltd. 2016 Annual Report
Travel expense 5,091,669.45 5,536,009.56
Entertainment expense 2,037,341.10 2,068,156.06
Material consumption 403,618.10 1,693,577.61
Office costs 2,536,314.14 1,440,412.04
Rental 1,773,733.94 1,572,252.20
Advertisement and promotion fee 9,100,791.63 25,047,722.73
Sales agency fee 3,574,466.62
Others 3,362,132.68 2,588,155.87
Total 59,273,046.14 75,264,951.18
Others:
The decrease from last year is mainly because that Fangda SOZN increased its advertisement and promotion expense to expand its
business.
2. The sales agency fee is the commission paid to the agent company when Fangda Property starts sales of real estate projects.
44. Management expenses
In RMB
Items Amount occurred in the current period Occurred in previous period
Labor costs 78,910,083.71 83,667,856.48
Depreciation and amortization 19,641,826.87 20,481,357.98
Agencies 2,719,764.57 2,656,463.76
Tax 3,426,306.86 6,751,421.27
Maintenance costs 7,328,236.95 3,412,131.84
Water and electricity 892,352.37 1,184,279.09
Office expense 3,606,589.30 3,571,187.92
Travel expense 4,034,018.87 4,045,460.27
R&D 22,757,378.01 15,984,404.14
Entertainment expense 2,748,111.05 2,645,057.19
Rental 4,147,170.84 4,785,932.74
Lawsuit 2,260,015.75 649,572.33
Material consumption 457,209.56 778,422.18
Property management fee 2,834,001.28 2,516,885.44
Waste loss 5,996,649.87 4,691,551.61
Others 10,162,375.53 9,583,792.01
China Fangda Group Co., Ltd. 2016 Annual Report
Total 171,922,091.39 167,405,776.25
Others:
The waste loss is the loss of waste of poor-quality products of Fangda SOZN.
45. Financial expenses
In RMB
Items Amount occurred in the current period Occurred in previous period
Interest expense 82,558,159.00 80,931,355.63
Less: interest capitalization 45,862,952.52 28,904,802.93
Less: Interest income 6,701,201.41 3,457,387.56
Acceptant discount 3,504.16 65,135.33
Exchange gain/loss -3,282,947.53 -1,714,534.78
Commission charges and others 1,540,835.73 3,752,724.36
Total 28,255,397.43 50,672,490.05
Others:
46. Assets impairment loss
In RMB
Items Amount occurred in the current period Occurred in previous period
1. Bad debt loss 117,097,192.87 34,581,867.08
2. Inventory depreciation loss 29,306,243.12 8,985,113.10
7. Fixed assets impairment loss 26,409,144.27
12. Intangible assets impairment loss 5,268,680.03
13. Goodwill impairment loss 19,826,696.97 6,452,698.92
Total 197,907,957.26 50,019,679.10
Others:
1. The increase in inventory depreciation loss is attributable to the impairment loss made due to that products of Fangda SOZN are no
longer produced.
2. Fix assets and intangible assets impairment loss is the evaluation impairment loss due to the liquidation of Shenyang Fangda.
47. Income from fair value fluctuation
In RMB
Source of income from fluctuation of fair
Amount occurred in the current period Occurred in previous period
value
China Fangda Group Co., Ltd. 2016 Annual Report
Financial assets measured at fair value
with variations accounted into current -1,099,400.09 3,952,285.09
income account
Investment real estate measured at fair
17,550,094.59 85,793,780.49
value
Effective part in the gain and loss of
412,128.63
arbitrage of cash flow
Total 16,862,823.13 89,746,065.58
Others:
48. Investment income
In RMB
Items Amount occurred in the current period Occurred in previous period
Gains from long-term equity investment
-1,384,650.25 -358,979.50
measured by equity
Investment gain obtained from disposal of
financial assets measured at fair value with
3,057,110.93 389,031.83
variations accounted into current income
account
Gain from re-measurement of remaining
shares at fair value after loss of the control 58,154,670.60
power
Investment gain of financial products 1,401,717.08
Other investment gains 250,897.54
Total 61,228,848.36 280,949.87
Others:
49. Non-business income
In RMB
Amount occurred in the current Amount accounted into the
Items Occurred in previous period
period current accidental gain/loss
Total of gains from disposal of
110,009.46 51,130.66 110,009.46
non-current assets
Including: Gains from disposal
63,855.61 51,130.66 63,855.61
of fixed assets
Government subsidy 7,571,963.67 2,246,386.84 7,571,963.67
Penalty income 239,809.06 1,339,217.86 239,809.06
China Fangda Group Co., Ltd. 2016 Annual Report
Payable account not able to be
534,238.75 2,269,833.14 534,238.75
paid
Compensation received
