2017 Interim Financial Report of China Fangda Group Co., Ltd.
CHINA FANGDA GROUP CO., LTD.
2017 Interim Financial Report
1
2017 Interim Financial Report of China Fangda Group Co., Ltd.
I. Auditor’s report
Whether the interim report is audited
□ Yes √ No
The financial statements for H1 2014 have not been audited.
II. Financial statements
Unit for statements in notes to financial statements: RMB yuan
1. Consolidated Balance Sheet
Prepared by: China Fangda Group Co., Ltd.
In RMB
Items Closing balance Opening balance
Current asset:
Monetary capital 896,180,195.84 1,095,229,837.90
Settlement provision
Outgoing call loan
Financial assets measured at fair
value with variations accounted into
current income account
Derivative financial assets 323,000.00 2,232,200.00
Notes receivable 16,230,966.01 18,898,106.11
Account receivable 1,998,836,618.75 2,342,929,628.14
Prepayment 53,461,381.46 31,526,326.25
Insurance receivable
Reinsurance receivable
Provisions of Reinsurance
contracts receivable
Interest receivable 302,950.68
Dividend receivable
Other receivables 53,039,501.03 57,378,994.72
Repurchasing of financial assets
Inventory 1,917,899,065.58 1,990,621,059.27
Assets held for sales
Non-current assets due in 1 year
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
Other current assets 185,572,920.97 62,206,574.33
Total current assets 5,121,543,649.64 5,601,325,677.40
Non-current assets:
Loan and advancement provided
Sellable financial assets 28,562,575.67 28,562,575.67
Investment held until mature
Long-term receivable
Long-term share equity investment 11,478,399.06 12,105,030.68
Investment real estate 332,975,019.31 333,795,631.30
Fixed assets 494,499,271.59 506,819,266.38
Construction in process 2,537,725.36 2,537,725.36
Engineering materials
Disposal of fixed assets 596.00
Productive biological assets
Gas & petrol
Intangible assets 59,204,940.34 60,228,652.69
R&D expense
Goodwill
Long-term amortizable expenses 2,810,782.65 3,695,766.33
Deferred income tax assets 196,414,604.53 176,796,698.56
Other non-current assets 45,834,479.71 61,184,253.71
Total of non-current assets 1,174,318,394.22 1,185,725,600.68
Total of assets 6,295,862,043.86 6,787,051,278.08
Current liabilities
Short-term loans 551,000,000.00 591,000,000.00
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
Derivative financial liabilities 54,175.00
Notes payable 410,917,866.68 557,301,320.45
Account payable 1,091,086,900.21 1,275,255,961.34
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
Prepayment received 151,545,508.98 285,905,444.13
Selling of repurchased financial
assets
Fees and commissions payable
Employees’ wage payable 22,139,591.51 41,972,342.66
Taxes payable 76,665,910.90 192,236,574.40
Interest payable 2,450,888.90 2,634,979.47
Dividend payable
Other payables 426,049,378.56 366,182,799.41
Reinsurance fee payable
Insurance contract provision
Entrusted trading of securities
Entrusted selling of securities
Liabilities held for sales
Non-current liabilities due in 1
100,000,000.00
year
Other current liabilities 13,429,739.77 35,148,084.44
Total current liabilities 2,845,339,960.51 3,347,637,506.30
Non-current liabilities:
Long-term loans 965,178,626.29 922,169,568.24
Bond payable
Including: preferred stock
Perpetual bond
Long-term payable
Long-term employees’ wage
payable
Special payables
Anticipated liabilities 3,046,499.32 3,156,625.24
Deferred earning 11,251,935.16 11,567,224.78
Deferred income tax liabilities 219,178,851.80 200,207,003.35
Other non-current liabilities
Total of non-current liabilities 1,198,655,912.57 1,137,100,421.61
Total liabilities 4,043,995,873.08 4,484,737,927.91
Owner’s equity:
Share capital 1,183,642,254.00 789,094,836.00
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
Other equity tools
Including: preferred stock
Perpetual bond
Capital reserves 72,829,484.96 467,376,902.96
Less: Shares in stock
Other miscellaneous income 348,224.37 2,130,454.52
Special reserves
Surplus reserves 88,839,790.50 88,839,790.50
Common risk provisions
Retained profit 968,640,703.13 1,016,820,576.30
Total of owner’s equity belong to the
2,314,300,456.96 2,364,262,560.28
parent company
Minor shareholders’ equity -62,434,286.18 -61,949,210.11
Total of owners’ equity 2,251,866,170.78 2,302,313,350.17
Total of liabilities and owner’s interest 6,295,862,043.86 6,787,051,278.08
Legal representative: Xiong Jianming CFO: Lin Kebing Accounting Manager: Wu Bohua
2. Balance Sheet of the Parent Company
In RMB
Items Closing balance Opening balance
Current asset:
Monetary capital 221,543,594.63 81,148,314.87
Financial assets measured at fair
value with variations accounted into
current income account
Derivative financial assets
Notes receivable
Account receivable 454,140.85
Prepayment 58,586.69 110,132.27
Interest receivable
Dividend receivable 430,000,000.00
Other receivables 456,671,546.70 459,354,983.42
Inventory
Assets held for sales
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
Non-current assets due in 1 year
Other current assets 52,252.03 334,228.97
Total current assets 678,325,980.05 971,401,800.38
Non-current assets:
Sellable financial assets 28,562,575.67 28,562,575.67
Investment held until mature
Long-term receivable
Long-term share equity investment 896,817,893.41 897,444,525.03
Investment real estate 296,740,660.63 296,740,660.63
Fixed assets 53,935,558.83 55,081,689.15
Construction in process
Engineering materials
Disposal of fixed assets
Productive biological assets
Gas & petrol
Intangible assets 1,781,633.51 1,531,179.93
R&D expense
Goodwill
Long-term amortizable expenses 160,639.28 252,857.40
Deferred income tax assets 55,918,578.38 57,076,777.66
Other non-current assets 120,000,000.00 120,000,000.00
Total of non-current assets 1,453,917,539.71 1,456,690,265.47
Total of assets 2,132,243,519.76 2,428,092,065.85
Current liabilities
Short-term loans 90,000,000.00 190,000,000.00
Financial liabilities measured at
fair value with variations accounted into 0.00
current income account
Derivative financial liabilities 0.00
Notes payable 0.00 33,692,909.97
Account payable 606,941.85 606,941.85
Prepayment received 693,045.60 965,234.08
Employees’ wage payable 990,619.66 2,338,896.51
Taxes payable 671,631.25 460,424.30
Interest payable 106,575.00 288,513.75
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
Dividend payable 0.00
Other payables 176,368,983.99 65,436,929.77
Liabilities held for sales
Non-current liabilities due in 1
year
Other current liabilities
Total current liabilities 269,437,797.35 293,789,850.23
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 124,231,197.16 124,088,349.06
Other non-current liabilities 0.00
Total of non-current liabilities 124,231,197.16 124,088,349.06
Total liabilities 393,668,994.51 417,878,199.29
Owner’s equity:
Share capital 1,183,642,254.00 789,094,836.00
Other equity tools
Including: preferred stock
Perpetual bond
Capital reserves 71,736,128.89 466,283,546.89
Less: Shares in stock
Other miscellaneous income 91,831.63 91,831.63
Special reserves
Surplus reserves 88,839,790.50 88,839,790.50
Retained profit 394,264,520.23 665,903,861.54
Total of owners’ equity 1,738,574,525.25 2,010,213,866.56
Total of liabilities and owner’s interest 2,132,243,519.76 2,428,092,065.85
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
3. Consolidated Income Statement
In RMB
Items Amount occurred in the current period Occurred in previous period
1. Total revenue 1,399,710,941.29 1,009,456,049.75
Incl. Business income 1,399,710,941.29 1,009,456,049.75
Interest income
Insurance fee earned
Fee and commission
received
2. Total business cost 1,117,603,395.86 964,818,829.76
Incl. Business cost 903,397,926.97 831,307,619.61
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 104,072,276.80 6,357,728.12
Sales expense 23,137,281.77 25,417,302.84
Administrative expense 71,006,728.79 73,800,752.02
Financial expenses 25,897,314.89 17,587,854.56
Asset impairment loss -9,908,133.36 10,347,572.61
Plus: gains from change of fair value
698,811.63 10,163,410.45
(“-“ for loss)
Investment gains (“-“ for loss) 6,880,596.27 -289,857.34
Incl. Investment gains from
-626,631.62 -399,777.88
affiliates and joint ventures
Exchange gains (“-“ for loss)
Other gains
3. Operational profit (“-“ for loss) 289,686,953.33 54,510,773.10
Plus: non-operational income 5,949,279.63 6,363,729.16
Incl. Loss from disposal of 33,313.54 68,572.07
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
non-current assets
Less: non-operational expenditure 349,885.08 3,344,545.43
Incl. Loss from disposal of
120,557.86 2,453,627.28
non-current assets
4. Gross profit (“-“ for loss) 295,286,347.88 57,529,956.83
Less: Income tax expenses 67,768,104.52 8,901,695.41
5. Net profit (“-“ for net loss) 227,518,243.36 48,628,261.42
Net profit attributable to the owners
228,003,319.43 53,156,405.36
of parent company
Minor shareholders’ equity -485,076.07 -4,528,143.94
6. After-tax net amount of other misc.
-1,782,230.15 1,045,861.25
incomes
After-tax net amount of other misc.
-1,782,230.15 1,045,861.25
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
-1,782,230.15 1,045,861.25
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
-1,782,230.15 1,045,861.25
and loss of arbitrage of cash flow
5. Translation difference of
foreign exchange statement
6. Others
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
After-tax net of other misc. income
attributed to minority shareholders
7. Total of misc. incomes 225,736,013.21 49,674,122.67
Total of misc. incomes attributable
226,221,089.28 54,202,266.61
to the owners of the parent company
Total misc gains attributable to the
-485,076.07 -4,528,143.94
minor shareholders
8. Earnings per share:
(1) Basic earnings per share 0.1926 0.05
(2) Diluted earnings per share 0.1926 0.05
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: Wu Bohua
4. Income Statement of the Parent Company
In RMB
Items Amount occurred in the current period Occurred in previous period
1. Turnover 13,854,120.29 14,499,890.63
Less: Operation cost 803,595.88 1,019,406.36
Taxes and surcharges 653,338.66 1,220,187.64
Sales expense 0.00
Administrative expense 12,556,952.25 11,552,747.84
Financial expenses -1,445,023.38 3,559,630.74
Asset impairment loss 37,911.33 15,181.55
Plus: gains from change of fair
0.00 10,453,596.91
value (“-“ for loss)
Investment gains (“-“ for loss) 1,014,671.43 -394,353.22
Incl. Investment gains from
-626,631.62 -399,777.88
affiliates and joint ventures
Other gains
2. Operational profit (“-“ for loss) 2,262,016.98 7,191,980.19
Plus: non-operational income 3,614,153.51 3,342,189.74
Incl. Loss from disposal of
0.00
non-current assets
Less: non-operational expenditure 31,271.82 89,374.82
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
Incl. Loss from disposal of
31,271.82
non-current assets
3. Gross profit (“-“ for loss) 5,844,898.67 10,444,795.11
Less: Income tax expenses 1,301,047.38 3,188,412.95
4. Net profit (“-“ for net loss) 4,543,851.29 7,256,382.16
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 4,543,851.29 7,256,382.16
7. Earnings per share:
(1) Basic earnings per share
(2) Diluted earnings per share
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
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
1,707,815,692.38 1,543,342,196.26
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 32,965,303.99 638,256.40
Other cash received from business
91,715,380.92 61,030,313.38
operation
Sub-total of cash inflow from business
1,832,496,377.29 1,605,010,766.04
operations
Cash paid for purchasing products
1,062,204,721.25 979,343,688.52
and services
Net increase of client trade and
advance
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
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 133,690,986.71 128,733,391.35
Taxes paid 320,067,254.32 110,327,435.35
Other cash paid for business
101,270,207.63 88,136,906.90
activities
Sub-total of cash outflow from business
1,617,233,169.91 1,306,541,422.12
operations
Cash flow generated by business
215,263,207.38 298,469,343.92
operations, net
2. Cash flow generated by investment:
Cash received from investment
4,330,200,000.00 186,000,000.00
recovery
Cash received as investment profit 7,834,655.67 109,920.54
Net cash retrieved from disposal of
fixed assets, intangible assets, and other 3,539,281.00 9,183,213.10
long-term assets
Net cash received from disposal of
0.00
subsidiaries or other operational units
Other investment-related cash
0.00
received
Sub-total of cash inflow generated from
4,341,573,936.67 195,293,133.64
investment
Cash paid for construction of fixed
assets, intangible assets and other 30,780,625.38 34,548,309.59
long-term assets
Cash paid as investment 4,455,200,000.00 277,000,000.00
Net increase of loan against pledge
Net cash paid for acquiring
subsidiaries and other operational units
Other cash paid for investment 1,150,000.00
Subtotal of cash outflows 4,485,980,625.38 312,698,309.59
Cash flow generated by investment -144,406,688.71 -117,405,175.95
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
activities, net
3. Cash flow generated by financing
activities:
Cash received from investment
Incl. Cash received from
investment attracted by subsidiaries
from minority shareholders
Cash received from borrowed
393,009,058.05 761,128,526.30
loans
Cash received from bond placing
Other cash received from financing
31.03
activities
Subtotal of cash inflow from financing
393,009,058.05 761,128,557.33
activities
Cash paid to repay debts 290,000,000.00 709,500,000.00
Cash paid as dividend, profit, or
316,495,379.40 112,636,475.36
interests
Incl. Dividend and profit paid by
subsidiaries to minority shareholders
Other cash paid for financing
activities 641,119.57
Subtotal of cash outflow from financing
606,495,379.40 822,777,594.93
activities
Net cash flow generated by financing
-213,486,321.35 -61,649,037.60
activities
4. Influence of exchange rate changes
-1,104,468.23 409,856.26
on cash and cash equivalents
5. Net increase in cash and cash
-143,734,270.91 119,824,986.63
equivalents
Plus: Balance of cash and cash
935,824,575.40 247,739,243.78
equivalents at the beginning of term
6. Balance of cash and cash equivalents
792,090,304.49 367,564,230.41
at the end of the period
6. Cash Flow Statement of the Parent Company
In RMB
Items Amount occurred in the current period Occurred in previous period
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
1. Net cash flow from business
operations:
Cash received from sales of
12,095,764.44 10,967,653.17
products and providing of services
Tax refunded
Other cash received from business
520,946,233.20 465,710,548.11
operation
Sub-total of cash inflow from business
533,041,997.64 476,678,201.28
operations
Cash paid for purchasing products
27,852,746.78 1,004,529.87
and services
Cash paid to and for the staff 9,265,037.35 7,228,487.72
Taxes paid 1,405,482.25 2,510,775.42
Other cash paid for business
402,671,567.73 380,887,024.06
activities
Sub-total of cash outflow from business
441,194,834.11 391,630,817.07
operations
Cash flow generated by business
91,847,163.53 85,047,384.21
operations, net
2. Cash flow generated by investment:
Cash received from investment
1,272,000,000.00 61,000,000.00
recovery
Cash received as investment profit 435,352,305.75 6,776,424.69
Net cash retrieved from disposal of
fixed assets, intangible assets, and other 0.00 300,000.00
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
1,707,352,305.75 68,076,424.69
investment
Cash paid for construction of fixed
assets, intangible assets and other 655,772.35 46,348.61
long-term assets
Cash paid as investment 1,272,000,000.00 64,000,000.00
Net cash paid for acquiring
0.00
subsidiaries and other operational units
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
Other cash paid for investment 0.00
Subtotal of cash outflows 1,272,655,772.35 64,046,348.61
Cash flow generated by investment
434,696,533.40 4,030,076.08
activities, net
3. Cash flow generated by financing
activities:
Cash received from investment
Cash received from borrowed
350,000,000.00
loans
Cash received from bond placing
Other cash received from financing
31.03
activities
Subtotal of cash inflow from financing
350,000,031.03
activities
Cash paid to repay debts 100,000,000.00 350,000,000.00
Cash paid as dividend, profit, or
279,409,832.29 85,187,480.03
interests
Other cash paid for financing
641,119.57
activities
Subtotal of cash outflow from financing
379,409,832.29 435,828,599.60
activities
Net cash flow generated by financing
-379,409,832.29 -85,828,568.57
activities
4. Influence of exchange rate changes
-2.88 -360.66
on cash and cash equivalents
5. Net increase in cash and cash
147,133,861.76 3,248,531.06
equivalents
Plus: Balance of cash and cash
74,159,732.87 25,583,130.83
equivalents at the beginning of term
6. Balance of cash and cash equivalents
221,293,594.63 28,831,661.89
at the end of the period
7. Statement of Change in Owners’ Equity (Consolidated)
Amount of the Current Term
In RMB
Current period
Items
Owners’ Equity Attributable to the Parent Company Minor Total of
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
Other equity tools Other Commo shareho owners’
Less:
Share Prefer Perpet Capital miscella Special Surplus n risk Retaine lders’ equity
Other Shares
capital red ual reserves neous reserves reserves provisio d profit equity
s in stock
share bond income ns
789,09 1,016,8 2,302,3
1. Balance at the 467,376 2,130,4 88,839, -61,949,
4,836. 20,576. 13,350.
end of last year ,902.96 54.52 790.50 210.11
00 30 17
Plus:
Changes in
accounting
policies
Correction of
previous errors
Consolidation of
entities under
common control
Others
2. Balance at the 789,09 1,016,8 2,302,3
467,376 2,130,4 88,839, -61,949,
beginning of 4,836. 20,576. 13,350.
,902.96 54.52 790.50 210.11
current year 00 30 17
3. Amount of
394,54 -394,54
change in current -1,782,2 -48,179, -485,07 -50,447,
7,418. 7,418.0
term (“-“ for 30.15 873.17 6.07 179.39
00 0
decrease)
(1) Total of misc. -1,782,2 228,003 -485,07 225,736
incomes 30.15 ,319.43 6.07 ,013.21
(2) Investment or
decreasing of
capital by owners
1. Common shares
contributed by
shareholders
2. Capital
contributed by
other equity
instrument holders
3. Amount of
shares paid and
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
accounted as
owners’ equity
4. Others
-276,18 -276,18
(3) Profit
3,192.6 3,192.6
allotment
0 0
1. Providing of
surplus reserves
2. Common risk
provision
3. Allotment to the -276,18 -276,18
owners (or 3,192.6 3,192.6
shareholders) 0 0
4. Others
(4) Internal 394,54 -394,54
transferring of 7,418. 7,418.0
owners’ equity 00 0
1. Capitalizing of 394,54 -394,54
capital reserves (or 7,418. 7,418.0
to capital shares) 00 0
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
1,183, 2,251,8
4. Balance at the 72,829, 348,224 88,839, 968,640 -62,434,
642,25 66,170.
end of this period 484.96 .37 790.50 ,703.13 286.18
4.00 78
Amount of Last Year
In RMB
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
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 1,334,0
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 87
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 87
3. Amount of
change in current 1,045,8 -22,534, -4,528, -26,016,
94.24
term (“-“ for 61.25 585.14 143.94 773.59
decrease)
(1) Total of misc. 1,045,8 53,156, -4,528, 49,674,
incomes 61.25 405.36 143.94 122.67
(2) Investment or
decreasing of 94.24 94.24
capital by owners
1. Common shares
contributed by
shareholders
2. Capital
contributed by
other equity
instrument holders
19
2017 Interim Financial Report of China Fangda Group Co., Ltd.
3. Amount of
shares paid and
accounted as
owners’ equity
4. Others 94.24 94.24
(3) Profit -75,690, -75,690,
allotment 990.50 990.50
1. Providing of
surplus reserves
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
(6) Others
756,90 1,308,0
4. Balance at the 79,099, 1,137,6 51,123, 409,736 10,018,
9,905. 0.00 0.00 0.00 26,311.
end of this period 713.38 92.88 554.51 ,839.42 606.09
00 28
20
2017 Interim Financial Report of China Fangda Group Co., Ltd.
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 789,094, 466,283,5 88,839,79 665,903 2,010,213
91,831.63
end of last year 836.00 46.89 0.50 ,861.54 ,866.56
Plus:
Changes in
accounting
policies
Correction of
previous errors
Others
2. Balance at the
789,094, 466,283,5 88,839,79 665,903 2,010,213
beginning of 0.00 0.00 0.00 0.00 91,831.63 0.00
836.00 46.89 0.50 ,861.54 ,866.56
current year
3. Amount of
-271,63
change in current 394,547, -394,547, -271,639,
0.00 0.00 0.00 0.00 0.00 0.00 0.00 9,341.3
term (“-“ for 418.00 418.00 341.31
1
decrease)
(1) Total of misc. 4,543,8 4,543,851
incomes 51.29 .29
(2) Investment or
decreasing of 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
capital by owners
1. Common shares
contributed by
shareholders
2. Capital
contributed by
other equity
instrument holders
3. Amount of
shares paid and
21
2017 Interim Financial Report of China Fangda Group Co., Ltd.
accounted as
owners’ equity
4. Others
-276,18
(3) Profit -276,183,
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3,192.6
allotment 192.60
0
1. Providing of
surplus reserves
2. Allotment to the -276,18
-276,183,
owners (or 3,192.6
192.60
shareholders) 0
3. Others
(4) Internal
394,547, -394,547,
transferring of 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
418.00 418.00
owners’ equity
1. Capitalizing of
394,547, -394,547,
capital reserves (or 0.00
418.00 418.00
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 1,183,64 71,736,12 88,839,79 394,264 1,738,574
0.00 0.00 0.00 0.00 91,831.63 0.00
end of this period 2,254.00 8.89 0.50 ,520.23 ,525.25
Amount of Last Year
In RMB
Last period
Items
Share Other equity tools Capital Less: Other Special Surplus Retaine Total of
22
2017 Interim Financial Report of China Fangda Group Co., Ltd.
capital reserves Shares in miscellan reserves reserves d profit owners’
Preferre Perpetu
Others stock eous equity
d share al bond
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 -68,434, -68,434,5
94.24
term (“-“ for 608.34 14.10
decrease)
(1) Total of misc. 7,256,3 7,256,382
incomes 82.16 .16
(2) Investment or
decreasing of 94.24 94.24
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
owners’ equity
4. Others 94.24 94.24
(3) Profit -75,690, -75,690,9
allotment 990.50 90.50
1. Providing of
23
2017 Interim Financial Report of China Fangda Group Co., Ltd.
surplus reserves
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 756,909, 38,599,05 51,123,55 333,714 1,180,438
91,831.63
end of this period 905.00 8.00 4.51 ,119.78 ,468.92
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 Registration No. of the Company’s business
license is: 440301501124785; with a registered capital of RMB1,183,642,254; registered address: Fangda Building, Kejinan Road 12,
High-tech Zone, Shenzhen. Mr. Xiong Jianming is the legal representative.
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 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
24
2017 Interim Financial Report of China Fangda Group Co., Ltd.
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 22nd meeting of the 7th term of the Board held on July 28, 2017.
The consolidation scope for the consolidated financial statements includes the Company and all subsidiaries. The entities newly
consolidated this period include one subsidiary Shenzhen Hongjun Investment Co., Ltd. and one sub-subsidiary Fangda Australia Co.,
Ltd. See Note VIII. Change to the Consolidation Scope and Note IX. Disclosure of Interest in Other Entities for details.
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.
2. Continuous operation
The Group has the continuous operation capability within at least 12 months from the end of the report period.
V. Significant Account Policies and Estimates
Specific accounting policy and estimate prompt:
The Group determines the accounting policies and income recognition policies for investment real estate according to the production
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
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 June 30, 2017, and business performance and cash flow situation in Year 2017 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 Group takes RMB as the standard currency for bookkeeping.
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
26
2017 Interim Financial Report of China Fangda Group Co., Ltd.
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
and profits between the date of acquisition and end of the report period should be incorporated into the consolidated income
27
2017 Interim Financial Report of China Fangda Group Co., Ltd.
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
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
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
28
2017 Interim Financial Report of China Fangda Group Co., Ltd.
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.
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
For financial
account, loans and account receivables. Financial assets are measured at the fair value at the initial recognition.
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
gain/loss account.
29
2017 Interim Financial Report of China Fangda Group Co., Ltd.
(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) 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.
(5) 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;
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
30
2017 Interim Financial Report of China Fangda Group Co., Ltd.
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 guarantee considered.
Conduct impairment 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. Conduct impairment test for other financial assets including
financial assets combination with similar credit risk features. 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.
(6) 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.
(7) 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
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
Judging basis or standard of major individual amount
large amount” while recognizes product receivables over RMB2
million (included) as “individual receivable with large amount”
31
2017 Interim Financial Report of China Fangda Group Co., Ltd.
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%
3-4 years 50.00% 50.00%
4-5 years 50.00% 50.00%
Over 5 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
(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
According to the difference between the present value of future
Method of bad debt provision
cash flow and the book value
The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure
Guideline No.6 – Listed Companies Engaged in Decoration Business.
32
2017 Interim Financial Report of China Fangda Group Co., Ltd.
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 are
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.
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
33
2017 Interim Financial Report of China Fangda Group Co., Ltd.
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 recognizable 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
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
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
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 gains not realized between the Company and affiliates is measured according to the shareholding proportion and
the investment gains is recognized 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 estates
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 estates 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
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.
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
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 (2) Depreciation method Service year Residual rate
rate %
Houses & buildings Average age 35-45 10 2-2.57
Mechanical equipment Average age 10 10 9
Transportation facilities Average age 5 10 18
Electronics and other
Average age 5 10 18
devices
PV power plants Average age 20 5 4.75
15. Construction in process
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.
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:
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
(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
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
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
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.
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 estate, 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
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
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.
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.
(4) Accounting of other long-term staff 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;
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
(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
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 labor 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
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
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.
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
Income from real estate sales is recognized when the contract is signed and performed, project is developed and completed with the
record for the completion acceptance, the handover procedure is completed or property is deemed accepted by the customer as per
the property sales contract, the payment is received or it is believed that the payment can be received, and the cost can be measured
reliably.
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
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 is 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;
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 them, the whole subsidies will be measured as
benefit-related government subsidies.
Asset-related government subsidy should offset the book value of related asset or recognized as deferred gain. If the asset-related
government subsidy is recognized as deferred gain, should be recorded in gain and loss in the service life. Government subsidy
measured at the nominal amount is accounted into current income account.
(2) Judgment basis and accounting treatment of return-related government subsidy
Gain-related government subsidy should be accounted as follows:
(1) Subsidy that will be used to compensate related future costs or losses should be recognized as deferred gain and recorded in the
gain and loss of the current report and offset related cost;
(2) Subsidy that is used to compensate existing cost or loss should be recorded in the gain and loss of the current period or offset
related cost.
Government subsidy related to routine operations should be recorded in other gains or offset related cost. Government subsidy not
related to routine operations should be recorded in non-operating income or expense.
24. Differed income tax assets and differed income tax liabilities
Income tax includes current and deferred income tax
Except 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:
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
(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
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
are 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
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
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
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
For property that has been handed over with income recognized, but whose public facilities have not been constructed or not been
completed, the management will estimate the development cost for the part that has not been started according to the budget to reflect
the operation result of the property sales.
(6) Accounting of hedging
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
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”.
27. Major changes in accounting policies and estimates
(1) Changes in accounting policies
□ Applicable √ Inapplicable
(2) Changes in major accounting estimates
□ Applicable √ Inapplicable
28. Others
VI. Taxation
1. Major taxes and tax rates
Tax Tax basis Tax rate
VAT Taxable income 3%、5%、6%、11%、17%
City maintenance and construction tax Taxable turnover 1%、5%、7%
Enterprise income tax Taxable income 15%、25%
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%
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
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%
Dongguan Fangda New Material Co., Ltd. 15%
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%
Guangdong Fangda SOZN Lighting Co., Ltd. 25%
Shenzhen Fangda Property Management Co., Ltd. 25%
Jiangxi Fangda Property Development 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
46
2017 Interim Financial Report of China Fangda Group Co., Ltd.
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
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.
3. Others
VII. Notes to the consolidated financial statements
1. Monetary capital
In RMB
Items Closing balance Opening balance
Inventory cash: 1,079,247.26 11,625.54
Bank deposits 788,536,824.94 932,709,227.42
Other monetary capital 106,564,123.64 162,508,984.94
Total 896,180,195.84 1,095,229,837.90
Including: total amount deposited in
27,493,703.12 27,553,060.26
overseas
Other note
(1) A bank deposit of RMB128,266.04 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 of RMB106,564,123.64 is mainly the futures, bank
acceptance bill and guarantee deposit and investment, including a deposit of RMB103,961,625.31. The deposit and frozen deposit
shall not be treated as cash and cash equivalent in the preparation of cash flow statements.
47
2017 Interim Financial Report of China Fangda Group Co., Ltd.
2. Derivative financial assets
√ Applicable □ Inapplicable
In RMB
Items Closing balance Opening balance
Futures contracts 323,000.00 2,232,200.00
Total 323,000.00 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.
3. Notes receivable
(1) Classification of notes receivable
In RMB
Items Closing balance Opening balance
Bank acceptance 12,050,000.00 11,819,567.96
Commercial acceptance 4,180,966.01 7,078,538.15
Total 16,230,966.01 18,898,106.11
(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 85,523,852.14
Commercial acceptance 19,640,673.31
Total 105,164,525.45
4. 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 Amount Proportio Provision
Amount Amount Amount
n rate n rate
48
2017 Interim Financial Report of China Fangda Group Co., Ltd.
Recognition and 2,573,1
2,216,89 218,060, 1,998,836 230,259,2 2,342,929,6
providing of bad debt 97.97% 9.84% 88,876. 98.35% 8.95%
7,439.52 820.77 ,618.75 48.17 28.14
provisions on groups 31
Account receivable
with minor individual
45,852,6 45,852,6 43,290, 43,290,08
amount and bad debt 2.03% 100.00% 0.00 1.65% 100.00% 0.00
85.68 85.68 086.64 6.64
provision provided
individually
2,616,4
2,262,75 263,913, 1,998,836 273,549,3 2,342,929,6
Total 100.00% 11.66% 78,962. 100.00% 10.45%
0,125.20 506.45 ,618.75 34.81 28.14
95
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 1,483,335,631.03 44,500,068.93 3.00%
1-2 years 391,359,475.39 39,135,947.54 10.00%
2-3 years 183,381,811.41 55,014,543.42 30.00%
3-4 years 84,291,287.13 42,145,643.59 50.00%
4-5 years 37,325,486.32 18,662,743.16 50.00%
Over 5 years 37,203,748.24 18,601,874.13 50.00%
Total 2,216,897,439.52 218,060,820.77 9.84%
Group recognition basis:
The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure
Guideline No.6 – Listed Companies Engaged in Decoration Business.
Account receivable adopting the balance percentage method in the group
□ Applicable √ Inapplicable
Account receivable adopting other methods in the group:
(2) Bad debt provision made, returned or recovered in the period
A bad debt provision of RMB-9,635,828.36 was made in the period. RMB0.00 was recovered or reversed.
Including significant recovery or reversal:
In RMB
49
2017 Interim Financial Report of China Fangda Group Co., Ltd.
Entity Written-back or recovered amount Method
(3) 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 RMB438,655,305.97, accounting for 19.39% of the total
remaining balance of all accounts receivable. The bad debt provision made at the end of the period is RMB18,723,322.69.
5. Prepayment
(1) Account age of prepayments
In RMB
Closing balance Opening balance
Age
Amount Proportion Amount Proportion
Less than 1 year 45,366,614.82 84.86% 28,442,485.03 90.22%
1-2 years 7,142,771.23 13.36% 1,224,651.51 3.88%
2-3 years 13,816.32 0.03% 540,874.20 1.72%
Over 3 years 938,179.09 1.75% 1,318,315.51 4.18%
Total 53,461,381.46 -- 31,526,326.25 --
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 RMB24,631,218.49, accounting for 46.07% of the total
prepayments at the end of the period.
Others:
6. Receivable interest
(1) Receivable interest
In RMB
Items Closing balance Opening balance
Bank financial products 302,950.68
Total 302,950.68
(2) Important overdue interest
Borrower Closing balance Overdue time Reason Basis of judgment
Others:
50
2017 Interim Financial Report of China Fangda Group Co., Ltd.
7. 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
(2) Recognition and
62,798,2 9,758,76 53,039,50 67,471, 10,092,25 57,378,994.
providing of bad debt 98.70% 15.51% 98.79% 14.96%
63.44 2.41 1.03 244.99 0.27 72
provisions on groups
Other receivables
with minor individual
825,887. 825,887. 825,887 825,887.0
amount and bad debt 1.30% 100.00% 0.00 1.21% 100.00% 0.00
03 03 .03 3
provision provided
individually
63,624,1 10,584,6 53,039,50 68,297, 10,918,13 57,378,994.
Total 100.00% 16.61% 100.00% 15.99%
50.47 49.44 1.03 132.02 7.30 72
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 31,574,834.33 947,272.49 3.00%
1-2 years 15,422,643.11 1,542,264.31 10.00%
2-3 years 3,155,836.73 946,751.02 30.00%
3-4 years 1,215,612.21 607,806.12 50.00%
4-5 years 1,932,839.51 966,419.76 50.00%
Over 5 years 9,496,497.55 4,748,248.70 50.00%
Total 62,798,263.44 9,758,762.40 15.54%
Group recognition basis:
Other receivables adopting the balance percentage method in the group:
□ Applicable √ Inapplicable
51
2017 Interim Financial Report of China Fangda Group Co., Ltd.
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 RMB-267,997.02 was made in the period. RMB was recovered or reversed.
Including significant recovery or reversal:
In RMB
Entity Written-back or recovered amount Method
(3) Other receivables are disclosed by nature
In RMB
By nature Closing balance of book value Opening balance of book value
Deposit 34,319,930.58 35,468,468.79
Construction borrowing and advanced
9,997,255.67 16,300,394.58
payment
Staff borrowing and petty cash 4,183,116.50 2,954,984.22
Receivable refund of VAT 943,746.87 1,949,939.35
Others 14,180,100.85 11,623,345.08
Total 63,624,150.47 68,297,132.02
(4) Balance of top 5 other receivables at the end of the period
In RMB
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 10.89% 693,131.66
Transport Co., Ltd.
Advanced
Wang Weihong 4,944,388.15 Over 3 years 7.77% 2,472,194.08
construction fee
China Merchants
Futures Brokerage Futures margin 2,684,425.00 Less than 1 year 4.22% 80,532.75
Co., Ltd.
Advanced
Xin Song 2,620,327.61 Over 5 years 4.12% 1,310,163.81
construction fee
Construction
Zeng Liang borrowing and 2,355,324.74 Less than 3 year 3.70% 343,436.21
advanced payment
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
Total -- 19,535,782.10 -- 30.70% 4,899,458.51
8. Inventories
Whether the Company needs to comply with disclosure requirements of the real estate industry.
Yes
(1) Classification of inventories
The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure
Guideline No.3 – Listed Companies Engaged in Property Development.
Classified by nature:
In RMB
Closing balance Opening balance
Items Remaining book Depreciation Remaining book Depreciation
Book value Book value
value provision value provision
Development cost 1,175,271,604.23 1,175,271,604.23 1,116,777,166.82 1,116,777,166.82
Development
439,050,974.67 439,050,974.67 579,792,563.00 579,792,563.00
products
Raw materials 89,652,708.62 1,776,760.32 87,875,948.30 83,474,670.86 1,776,760.32 81,697,910.54
Product in
10,700,424.07 10,700,424.07 16,439,362.04 16,439,362.04
process
Finished goods in
9,105,474.48 9,105,474.48 8,845,931.76 8,845,931.76
stock
Assets unsettled
for finished
189,629,229.94 189,629,229.94 186,288,217.00 186,288,217.00
construction
contracts
Low price
73,018.52 73,018.52
consumable
OEM materials 5,424,718.01 1,499,169.52 3,925,548.49 2,206,059.11 1,499,169.52 706,889.59
Goods delivered 37,408,292.60 35,068,431.20 2,339,861.40 35,068,431.20 35,068,431.20 0.00
Total 1,956,243,426.62 38,344,361.04 1,917,899,065.58 2,028,965,420.31 38,344,361.04 1,990,621,059.27
Development cost and capitalization rate of its interest are disclosed as follows:
In RMB
Estimated Transferr Other Increase Accumula Including:
Estimated
Starting total Opening ed to decrease (develop Closing tive capitalize Capital
Project finish
time investmen balance developm in this ment balance capitalize d interest source
time
t ent period cost) in d interest for the
53
2017 Interim Financial Report of China Fangda Group Co., Ltd.
product in this current
this period period
period
Fangda
Nanchang
630,000,0 199,959,2 8,732,722 208,691,9
Phoenix 31.12.18 - 0.00 0.00 0.00 Others
00.00 30.55 .94 53.49
Land
Project
Fangda
Plaza 927,000,0 916,817,9 49,761,71 966,579,6 42,717,40 10,062,71
01.05.14 31.12.17 - 0.00 Bank loan
project 00.00 36.27 4.47 50.74 4.57 6.96
phase II
1,557,000 1,116,777 58,494,43 1,175,271 42,717,40 10,062,71
Total -- -- 0 0.00 --
,000.00 ,166.82 7.41 ,604.23 4.57 6.96
Development product is disclosed as follows:
In RMB
Project Completion time Opening balance Increase Decrease Closing balance
Fangda Plaza
01.12.16 579,792,563.00 140,741,588.33 439,050,974.67
project phase I
Total -- 579,792,563.00 140,741,588.33 439,050,974.67
Development product with receivable installments, development product for lease and turnover property are disclosed as follows:
In RMB
Project Opening balance Increase Decrease Closing balance
(2) Inventory depreciation provision
The inventory depreciation provision is disclosed as follows:
Classified by nature:
In RMB
Increase in this period Decrease in this period
Opening Closing
Items Recover or Notes
balance Provision Others Others balance
write-off
1,776,760.
Raw materials 1,776,760.32
32
Product in
process
Finished goods in
stock
Assets unsettled
54
2017 Interim Financial Report of China Fangda Group Co., Ltd.
for finished
construction
contracts
Low price
consumable
1,499,169.
OEM materials 1,499,169.52
52
35,068,431
Goods delivered 35,068,431.20
.20
38,344,361
Total 38,344,361.04 --
.04
By items:
In RMB
Increase in this period Decrease in this period
Opening Closing
Project Recover or Notes
balance Provision Others Others balance
write-off
(3) Capitalization rate of borrowing cost in the closing inventory balance
The balance at the end of the period includes capitalization of borrowing expense of Fangda Town project of RMB42,717,404.57.
The capitalization amount of cumulative borrowing expenses is RMB111,846,534.72, of which RMB10,062,716.96 occurred in this
year.
(4) Restriction of inventory
Restricted inventory is disclosed by project
In RMB
Project Opening balance Closing balance Reason
(5) Assets unsettled for finished construction contracts at the end of the period
In RMB
Items Amount
Accumulative occurred costs 7,484,959,171.97
Accumulative recognized gross margin 1,276,205,207.30
Settled amount 8,571,535,149.33
Assets unsettled for finished construction contracts 189,629,229.94
Others:
55
2017 Interim Financial Report of China Fangda Group Co., Ltd.
Whether Company needs to comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure
Guideline No.4 – Listed Companies Engaged in Seed and Plantation Business
No
9. Other current assets
In RMB
Items Closing balance Opening balance
Input tax to be deducted 17,072,719.42 14,896,029.18
Bank financial products 167,000,000.00 41,000,000.00
Prepaid income tax 433,807.84
Prepaid VAT 1,500,201.55 4,726,521.18
Prepaid business tax 1,150,216.13
Total 185,572,920.97 62,206,574.33
10. 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 0.00 28,562,575.67 28,562,575.67 0.00 28,562,575.67
instruments:
Measured at fair
0.00 0.00 0.00 0.00 0.00 0.00
value
Measured at cost 28,562,575.67 0.00 28,562,575.67 28,562,575.67 0.00 28,562,575.67
Total 28,562,575.67 0.00 28,562,575.67 28,562,575.67 0.00 28,562,575.67
(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
56
2017 Interim Financial Report of China Fangda Group Co., Ltd.
28,562,575 28,562,575
Total --
.67 .67
11. Long-term share equity investment
In RMB
Change (+,-) Balance
Investme of
Other
nt gain Cash impairme
Decrease miscellan
Invested Opening Increased and loss Other dividend Impairme Closing nt
d eous
entity balance investmen recognize equity or profit nt Others balance provision
investmen income
t d using change announce provision at the end
t adjustmen
the equity d of the
t
method period
1. Joint venture
2. Associate
Shenzhen
Ganshang
Joint 8,600,939 -99,063.0 8,501,876
Investme .78 7 .71
nt Co.,
Ltd.
Shenzhen
Huihai
Yirong 3,504,090 -527,568. 2,976,522
Internet .90 55 .35
Service
Co., Ltd.
12,105,03 -626,631. 11,478,39
Subtotal
0.68 62 9.06
12,105,03 -626,631. 11,478,39
Total
0.68 62 9.06
12. 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
57
2017 Interim Financial Report of China Fangda Group Co., Ltd.
1. Opening balance 38,146,315.13 38,146,315.13
2. Increase in this
period
(1) External
purchase
3. Decrease in this
period
(1) Purchase
Other transfer-out
4. Closing balance 38,146,315.13 38,146,315.13
II. Accumulative
depreciation and
amortization
1. Opening balance 7441,246.45 7441,246.45
2. Increase in this
495,747.00 495,747.00
period
(1) Provision or
495,747.00 495,747.00
amortization
3. Decrease in this
period
(1) Purchase
Other transfer-out
4. Closing balance 7,936,993.45 7,936,993.45
III. Impairment provision
1. Opening balance
2. Increase in this
period
(1) Provision
3. Decrease in this
period
(1) Purchase
Other transfer-out
4. Closing balance
IV. Book value
1. Closing book
30,209,321.68 30,209,321.68
value
2. Opening book 30,705,068.68 30,705,068.68
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
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 303,090,562.62 303,090,562.62
II. Change in this period -324,864.99 -324,864.99
Add: external
purchase
Transfer-in
from inventory\fixed
assets\construction in
progress
Increase due to
enterprise merger
Less: disposal 694,455.99 694,455.99
Other
transfer-out
Change in fair value 369,591.00 369,591.00
III. Closing balance 302,765,697.63 302,765,697.63
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
13,762,249. 296,740,66 based on 深同诚凭
Fangda Town Shenzhen 18,204.95 296,740,660.63 0.00%
36 0.63 字(2017A)04QZ 第
0001 号 Real Estate
Valuation Report
issued by
59
2017 Interim Financial Report of China Fangda Group Co., Ltd.
TOUCHSTONE.
Ningbo Wanda Ningbo 96.75 20,400.00 774,000.00 803,025.00 3.75%
4,881,446.0
Chongqing Didu Chongqing 567.61 5,222,012.00 6.98%
0
Others Dalian 110.24 694,455.99 -100.00%
13,782,649. 303,090,56
Total —— 18,979.55 302,765,697.63 -0.11% ——
36 2.62
Whether there is new investment real estate measured at fair value in the report period
□ Yes √ No
13. 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
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
2. Increase in
2,071,792.79 650,616.79 1,242,313.82 3,964,723.40
this period
(1) Purchase 2,071,792.79 650,616.79 1,242,313.82 3,964,723.40
(2)
Transfer-in of
construction in
progress
(3) Increase
due to enterprise
merger
3. Decrease in
2,697,920.85 2,358,000.89 879,292.76 5,935,214.50
this period
(1) Disposal
2,697,920.85 2,358,000.89 879,292.76 5,935,214.50
or retirement
4. Closing
347,001,165.39 131,259,721.22 139,526,623.05 21,205,233.18 53,583,995.05 692,576,737.89
balance
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
II. Accumulative
depreciation
1. Opening
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
2. Increase in
4,033,102.77 3,121,798.29 3,238,947.80 1,136,870.29 2,334,781.69 13,865,500.84
this period
(1) Provision 4,033,102.77 3,121,798.29 3,238,947.80 1,136,870.29 2,334,781.69 14,437,445.38
3. Decrease in
1,169,616.83 1,584,035.37 762,344.95 3,515,997.15
this period
(1) Disposal
1,169,616.83 1,584,035.37 762,344.95 3,515,997.15
or retirement
15,064.68 15,064.68
4. Closing
50,687,517.85 6,778,701.44 100,424,975.76 13,758,586.75 25,073,295.00 196,723,076.80
balance
III. Impairment
provision
1. Opening
1,354,389.50 1,354,389.50
balance
2. Increase in
this period
(1) Provision
3. Decrease in
this period
(1) Disposal
or retirement
4. Closing
1,354,389.50 1,354,389.50
balance
IV. Book value
1. Closing
296,313,647.54 124,481,019.78 37,747,257.79 7,446,646.43 28,510,700.05 494,499,271.59
book value
2. Opening
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
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
(2) Temporary idle fixed assets
In RMB
Accumulative Impairment
Items Book value Book value Notes
depreciation provision
Mechanical
21,380,678.50 5,131,233.00 16,249,445.50
equipment
Transportation
1,708,670.28 822,246.80 886,423.48
facilities
Electronics and other
6,142,004.42 2,545,793.98 3,596,210.44
devices
Total 29,231,353.20 8,499,273.78 20,732,079.42
(3) Fixed assets without ownership certificate
In RMB
Items Book value Reason
Houses in Urumuqi for offsetting debt 545,794.73 Applying for
Yuehai Office Building C 502 145,813.44 Historical reasons
Other note
On 30.06.17, the cumulative depreciation of the original value of RMB29,231,353.20 in the Group’s fixed assets is
RMB8,499,273.78. The net value of RMB20,732,079.42 is the amount frozen by the court due to the Fangda SOZN sales and
purchase proceedings.
14. 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
Xinjin energy
saving
environmental 834,644.79 834,644.79 834,644.79 834,644.79
protection curtain
wall project
PV power
1,703,080.57 0.00 1,703,080.57 1,703,080.57 0.00 1,703,080.57
generation project
Total 2,537,725.36 2,537,725.36 2,537,725.36 2,537,725.36
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
15. Disposal of fixed assets
In RMB
Items Closing balance Opening balance
Electronics and other devices 596.00 0.00
Total 596.00
16. Intangible assets
(1) Intangible assets
In RMB
Unpatented
Items Land using right Patent Others Total
technologies
I. Book value
1. Opening
63,127,001.10 2,974,548.20 5,719,888.40 15,586,388.80 87,407,826.40
balance
2. Increase in
0.00 9,597.50 0.00 427,350.40 436,947.90
this period
(1) Purchase 0.00 9,597.50 0.00 427,350.40 436,947.90
(2) Internal
0.00 0.00 0.00 160,377.40 160,377.40
R&D
(3) Increase
due to enterprise 0.00 0.00 0.00 0.00 0.00
merger
3. Decrease in this
period
(1) Purchase
4. Closing
63,127,001.10 2,984,145.60 5,719,888.40 16,174,116.60 88,005,151.60
balance
II. Accumulative
amortization
1. Opening
8,477,953.80 1,612,050.30 4,094,649.90 6,762,325.50 20,946,979.50
balance
2. Increase in
652,432.70 132,221.20 285,994.40 633,860.10 1,704,508.40
this period
(1) Provision 652,432.70 133,690.40 285,994.40 634,684.20 1,706,801.70
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
3. Decrease in
this period
(1) Purchase
4. Closing
9,130,386.50 1,745,740.70 4,380,644.30 7,397,009.70 22,653,781.20
balance
III. Impairment
provision
1. Opening
balance
2. Increase in
this period
(1) Provision
3. Decrease in
this period
(1) Purchase
4. Closing
balance
IV. Book value
1. Closing book
53,996,614.60 1,238,404.90 1,339,244.10 8,777,106.90 65,351,370.40
value
2. Opening
54,649,047.30 1,362,497.90 1,625,238.50 8,824,063.30 66,460,846.90
book value
Proportion of intangible asset formed by internal R&D of the period in the closing total book value of intangible assets.
17. Goodwill
(1) Original book value of goodwill
In RMB
Invested entity or
Opening balance Increase Decrease Closing balance
item of goodwill
Fangda SOZN 26,279,395.89 26,279,395.89
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
(2) Goodwill impairment provision
In RMB
Invested entity or
Opening balance Increase Decrease Closing balance
item of goodwill
Fangda SOZN 26,279,395.89 26,279,395.89
Test process of goodwill impairment, parameters and recognition method of goodwill impairment loss:
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. 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 RMB26,279,395.89.
18. Long-term amortizable expenses
In RMB
Increase in this Amortized amount
Items Opening balance Other decrease Closing balance
period in this period
Plant and dormitory
255,483.50 64,492.23 153,576.61 0.00 166,399.12
decoration
Upgrading of
workshop rented by
795,527.19 0.00 795,527.19 0.00 0.00
Fangda Jianke
Nanchang Branch
Jinshan factory
renovation of
192,280.34 0.00 54,937.08 0.00 137,343.26
Fangda Jianke
Shanghai Branch
Expense of
renovation of leased
fixed assets by 111,474.45 0.00 55,737.18 0.00 55,737.27
Fangda Property
Development
Dongguan separation
155,634.49 0.00 38,908.80 0.00 116,725.69
project
Fangda Building
Floor #5 wiring 7,604.64 0.00 7,604.64 0.00 0.00
project
Land transfer
1,309,034.90 0.00 28,050.78 0.00 1,280,984.12
compensation
65
2017 Interim Financial Report of China Fangda Group Co., Ltd.
Membership fee 199,999.92 0.00 74,999.98 0.00 124,999.94
Kingdee aftersales
48,217.98 12,578.64 35,639.34
service
Huawei storage
device maintenance 4,639.50 4,639.50 0.00
fee
Temporary sales
center construction 495,469.58 495,469.58
cost
Subscription of
newspaper and 105,699.80 52,849.92 52,849.88
magazines
Network broad band
14,700.04 2,449.98 12,250.06
service
Permanent sales
center construction 982,607.50 245,651.88 736,955.62
cost
Others 181,995.35 91,097.00 90,898.35
Total 3,695,766.33 1,229,095.08 2,114,078.76 0.00 2,810,782.65
19. 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
343,867,901.43 62,595,355.84 334,020,087.32 65,372,067.16
provision
Deductible loss 62,817,146.19 18,763,055.31 79,647,747.51 19,403,071.58
Unrealizable gross profit 74,935,912.32 18,733,978.08 59,313,354.67 13,083,940.06
Reserved expense 384,271,981.96 95,835,112.18 3,245,302.51 486,795.38
Deferred earning 146,679.81 22,001.97 1,963,532.75 474,053.75
Anticipated liabilities 3,046,499.32 456,974.90 3,156,625.24 473,493.79
Adjustment of fair value
327,320.67 49,098.10
of investment real estate
Provided unpaid taxes 309,816,714.95 77,454,178.74
66
2017 Interim Financial Report of China Fangda Group Co., Ltd.
Derivative financial
54,175.00 8,126.25
instruments
Total 869,140,296.03 196,414,604.53 791,490,685.62 176,796,698.56
(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
Change in fair value of
2,164,873.87 324,731.08
sellable financial assets
Gain/loss caused by
255,471,385.63 63,830,697.32 304,518,955.06 76,129,738.77
changes in fair value
Estimated gross margin
when Fangda Town
records income, but does 621,239,213.59 155,309,803.40 495,010,133.99 123,752,533.50
not reach the taxable
income level
Others 255,673.87 38,351.08
Total 876,966,273.09 219,178,851.80 801,693,962.92 200,207,003.35
(3) Details of unrecognized deferred income tax assets
In RMB
Items Closing balance Opening balance
Deductible temporary difference 69,882,888.12 69,882,888.12
Deductible loss 103,119,540.05 103,119,540.05
Total 173,002,428.17 173,002,428.17
(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
2017 1,476,671.03 1,476,671.03
2018 58,067.78 58,067.78
2019
2020 80,885,430.25 80,885,430.25
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
2021 20,699,370.99 20,699,370.99
Total 103,119,540.05 103,119,540.05 --
20. Other non-current assets
In RMB
Items Closing balance Opening balance
Prepaid house and equipment amount 45,834,479.71 61,184,253.71
Total 45,834,479.71 61,184,253.71
Others:
The closing balance of other non-current assets is mainly the prepaid house payment of Fangda Jianke.
21. Short-term borrowings
(1) Classification of short-term borrowings
In RMB
Items Closing balance Opening balance
Guarantee loan 550,000,000.00 591,000,000.00
Discount borrowing of commercial
1,000,000.00
acceptance bills
Total 551,000,000.00 591,000,000.00
Notes to classification of short-term borrowings
22. Derivative financial liabilities
√ Applicable □ Inapplicable
In RMB
Items Closing balance Opening balance
Futures contracts 54,175.00
Total 54,175.00
Others:
It is mainly attributable to the cash flow hedging on aluminum futures contracts conducted by Fangda New Material.
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
23. Notes payable
In RMB
Type Closing balance Opening balance
Commercial acceptance 311,681,164.70 88,302,684.45
Bank acceptance 99,236,701.98 468,998,636.00
Total 410,917,866.68 557,301,320.45
The total amount of payable bills that have matured but not been paid at the end of the period is RMB2,820,451.95.
24. Account payable
(1) Account payable
In RMB
Items Closing balance Opening balance
Account repayable and engineering
792,237,703.17 861,679,467.39
repayable
Construction payable 49,815.30 64,941,147.47
Payable installation and implementation
298,311,008.31 342,832,605.32
fees
Others 488,373.43 5,802,741.16
Total 1,091,086,900.21 1,275,255,961.34
(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 --
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
25. Prepayment received
(1) Prepayment received
In RMB
Items Closing balance Opening balance
Curtain wall and screen door engineering
91,263,254.65 82,684,893.50
payment
Material loan 4,479,849.61 3,096,489.93
Real estate sales payment 53,602,711.02 198,135,269.02
Others 2,199,693.70 1,988,791.68
Total 151,545,508.98 285,905,444.13
26. Employees’ wage payable
1. Employees’ wage payable
In RMB
Items Opening balance Increase Decrease Closing balance
1. Short-term
41,965,384.45 111,159,088.47 130,999,922.21 22,124,550.71
remuneration
2. Retirement pension
program-defined 6,958.21 6,029,860.94 6,021,778.35 15,040.80
contribution plan
3. Dismiss compensation 0.00 226,272.50 226,272.50 0.00
4. Other welfare due in
0.00 0.00 0.00 0.00
one year
Total 41,972,342.66 117,415,221.91 137,247,973.06 22,139,591.51
(2) Short-term remuneration
In RMB
Items Opening balance Increase Decrease Closing balance
1. Wage, bonus,
39,824,961.13 104,365,824.66 124,043,347.65 20,147,438.14
allowance and subsidies
2. Employee welfare 0.00 1,778,856.22 1,778,856.22 0.00
3. Social insurance 74,574.19 2,501,570.36 2,574,584.63 1,559.92
Including:
74,056.97 1,761,414.85 1,833,911.90 1,559.92
medical insurance
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
Labor injury
515.52 216,108.77 216,624.29 0.00
insurance
Breeding
1.70 524,046.74 524,048.44 0.00
insurance
4. Housing fund 99,320.00 2,312,752.84 2,385,194.84 26,878.00
5. Labor union budget
1,966,529.13 200,084.39 217,938.87 1,948,674.65
and staff education fund
Total 41,965,384.45 111,159,088.47 130,999,922.21 22,124,550.71
(3) Defined contribution plan
In RMB
Items Opening balance Increase Decrease Closing balance
1. Basic pension 6,436.75 5,807,977.76 5,799,373.71 15,040.80
2. Unemployment
521.46 221,883.18 222,404.64 0.00
insurance
3. Enterprise annuity
0.00 0.00
contribution
Total 6,958.21 6,029,860.94 6,021,778.35 15,040.80
27. Taxes payable
In RMB
Items Closing balance Opening balance
VAT 18,249,500.35 46,317,900.91
Enterprise income tax 50,470,606.80 130,608,894.15
Personal income tax 1,697,662.17 1,440,370.54
City maintenance and construction tax 490,809.19 4,160,327.99
Land using tax 429,118.06 684,277.95
Property tax 1,416,762.37 2,140,282.85
Education surtax 239,634.70 1,963,232.23
Local education surtax 147,319.87 1,106,894.43
Deed tax 3,429,437.28 3,429,437.28
Others 95,060.11 384,956.07
Total 76,665,910.90 192,236,574.40
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
28. Interest payable
In RMB
Items Closing balance Opening balance
Long-term borrowing with interest
installment and repayment of principal 1,783,797.23 1,753,879.87
upon maturity
Short-term borrowing interests payable 667,091.67 881,099.60
Total 2,450,888.90 2,634,979.47
Significant interest overdue but not paid
In RMB
Borrower Overdue amount Reason
29. Other payables
(1) Other payables presented by nature
In RMB
Items Closing balance Opening balance
Performance and quality deposit 7,592,011.02 10,596,919.41
Deposit 7,862,930.84 8,104,969.14
Reserved expense 8,622,773.46 14,327,754.95
Fangda Town pledge 400,000.00 100,000.00
Tax withheld 381,943,148.83 309,816,714.95
Others 19,628,514.41 23,236,440.96
Total 426,049,378.56 366,182,799.41
(2) Significant payables aging more than 1 year
In RMB
Items Closing balance Reason
None
Other note
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.
30. Non-current liabilities due within 1 year
In RMB
72
2017 Interim Financial Report of China Fangda Group Co., Ltd.
Items Closing balance Opening balance
Long-term loans due within 1 year 100,000,000.00
Total 100,000,000.00
31. Other current liabilities
In RMB
Items Closing balance Opening balance
Substituted money on VAT 13,429,739.77 35,148,084.44
Total 13,429,739.77 35,148,084.44
32. Long-term borrowings
(1) Classification of long-term borrowings
In RMB
Items Closing balance Opening balance
Loan by pledge 965,178,626.29 922,169,568.24
Total 965,178,626.29 922,169,568.24
Notes to classification of long-term borrowings:
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 6.15%.
33. Anticipated liabilities
In RMB
Items Closing balance Opening balance Reason
Estimated project completion
Product quality warranty 3,046,499.32 3,156,625.24
quality cost
Total 3,046,499.32 3,156,625.24 --
34. Deferred earning
In RMB
Items Opening balance Increase Decrease Closing balance Reason
Government subsidy 11,567,224.78 315,289.62 11,251,935.16
Total 11,567,224.78 315,289.62 11,251,935.16 --
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
Items involving government subsidies:
In RMB
Amount included
Amount of new Related to
Liabilities Opening balance in non-operating Other change Closing balance
subsidy assets/earning
revenue
Major investment
project prize from
Industry and
Trade
1,795,238.30 28,571.40 1,766,666.90 Assets-related
Development
Division of
Dongguan
Finance Bureau
Massive
production
project of
air-breathing
7,641,830.27 61,993.62 7,579,836.65 Assets-related
double-layer
hollow glass
energy-saving
curtain call
Railway transport
screen door
controlling
system and 168,294.45 21,614.64 146,679.81 Assets-related
information
transmission
technology
LED production
expansion
technology 1,493,111.71 190,609.98 1,302,501.73 Assets-related
renovation
project
Distributed PV
power generation
project subsidy
sponsored by
468,750.05 12,499.98 456,250.07 Assets-related
Dongguan
Reform and
Development
Commission
Total 11,567,224.78 315,289.62 11,251,935.16 --
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
35. Capital share
In RMB
Change (+,-)
Opening Closing
Issued new Transferred
balance Bonus shares Others Subtotal balance
shares from reserves
Total of capital 1,183,642,254.
789,094,836.00 394,547,418.00 394,547,418.00
shares 00
36. Capital reserve
In RMB
Items Opening balance Increase Decrease Closing balance
Capital premium (share
465,922,805.61 394,547,418.00 71,375,387.61
capital premium)
Other capital reserves 1,454,097.35 1,454,097.35
Total 467,376,902.96 394,547,418.00 72,829,484.96
Other note, including explanation about the reason of the change:
The decrease in the capital reserve is due to transfer to share equity.
37. Other miscellaneous income
In RMB
Amount occurred in the current period
Less: amount
After-tax
written into
After-tax amount
Opening Amount other gains Less: Closing
Items amount attributed to
balance before and transferred Income tax balance
attributed to minority
income tax into gain/loss expenses
the parent shareholder
in previous
s
terms
2. Other misc. incomes that will be 3,494,000.0 -1,782,230. 348,224.3
2,130,454.52 4,752,130.15 524,100.00
re-classified into gain and loss 0 15 7
Effective part in the gain and 3,494,000.0 -1,782,230. 171,274.0
1,840,142.79 4,638,768.75 524,100.00
loss of arbitrage of cash flow 0 15 4
Translation difference of
198,480.10 113,361.40 85,118.70
foreign exchange statement
Investment real estate measured at
91,831.63 91,831.63
fair value
Other miscellaneous income 2,130,454.52 3,494,000.0 4,752,130.15 524,100.00 -1,782,230. 348,224.3
75
2017 Interim Financial Report of China Fangda Group Co., Ltd.
0 15 7
38. Surplus reserves
In RMB
Items Opening balance Increase Decrease Closing balance
Statutory surplus
88,839,790.50 88,839,790.50
reserves
Total 88,839,790.50 88,839,790.50
39. Retained profit
In RMB
Items Current period Last period
Adjustment on retained profit of previous period 1,016,820,576.30 432,271,424.56
Retained profit adjusted at beginning of year 1,016,820,576.30 432,271,424.56
Plus: Net profit attributable to owners of the
228,003,319.43 53,156,405.36
parent
Common share dividend payable 276,183,192.60 75,690,990.50
Closing retained profit 968,640,703.13 409,736,839.42
40. Operational revenue and costs
In RMB
Amount occurred in the current period Occurred in previous period
Items
Income Cost Income Cost
Main business 1,380,976,886.98 893,499,713.26 985,562,292.82 818,328,044.96
Other businesses 18,734,054.31 9,898,213.71 23,893,756.93 12,979,574.65
Total 1,399,710,941.29 903,397,926.97 1,009,456,049.75 831,307,619.61
41. Taxes and surcharges
In RMB
Items Amount occurred in the current period Occurred in previous period
City maintenance and construction tax 3,811,990.65 2,637,029.89
Education surtax 1,912,382.95 1,233,551.35
Property tax 1,912,543.31 520,660.84
Land using tax 602,382.14 70,486.84
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
Stamp tax 480,851.19
Business tax 1,199,973.15 1,138,974.07
Land VAT 93,136,916.43
Others 1,015,236.98 757,025.13
Total 104,072,276.80 6,357,728.12
42. Sales expense
In RMB
Items Amount occurred in the current period Occurred in previous period
Labor costs 10,452,498.33 10,595,121.39
Freight and miscellaneous charges 2,531,576.75 3,223,019.97
Advertisement and exhibition costs 2,068,972.23 3,075,896.31
Travel expense 2,713,200.94 2,145,274.48
Others 5,371,033.52 6,377,990.69
Total 23,137,281.77 25,417,302.84
43. Management expenses
In RMB
Items Amount occurred in the current period Occurred in previous period
Labor costs 35,844,267.20 35,734,018.99
Depreciation and amortization 8,586,833.31 10,006,510.02
R&D 8,758,714.52 7,486,513.39
Tax 120,324.19 3,282,834.40
Others 17,696,589.57 17,290,875.22
Total 71,006,728.79 73,800,752.02
44. Financial expenses
In RMB
Items Amount occurred in the current period Occurred in previous period
Interest expense 31,694,708.78 21,187,915.60
Less: Interest income 7,660,124.39 2,980,732.93
Exchange gain/loss 1,379,236.27 -1,074,524.76
Commission charges and others 483,494.23 455,196.65
Total 25,897,314.89 17,587,854.56
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
45. Assets impairment loss
In RMB
Items Amount occurred in the current period Occurred in previous period
1. Bad debt loss -9,908,133.36 10,347,572.61
Total -9,908,133.36 10,347,572.61
46. 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
Financial assets measured at fair value
with variations accounted into current -413,383.46
income account
Investment real estate measured at fair
698,811.63 10,576,793.91
value
Total 698,811.63 10,163,410.45
47. Investment income
In RMB
Items Amount occurred in the current period Occurred in previous period
Gains from long-term equity investment
-626,631.62 -399,777.88
measured by equity
Investment gain of financial products 7,507,227.89 109,920.54
Total 6,880,596.27 -289,857.34
48. 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
33,313.54 68,572.07 33,313.54
non-current assets
Including: Gains from disposal
33,313.54 68,572.07 33,313.54
of fixed assets
Gains from disposal of
0.00 0.00
intangible assets
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
Government subsidy 1,418,717.85 1,545,204.08 1,418,717.85
Penalty income 204,691.26 68,946.51 204,691.26
Penalty received 183,860.65 102,105.47 183,860.65
VAT rebated into revenue 1,233,869.85 1,155,945.30
Payable account not able to be
4,428.50 241,152.78 4,428.50
paid
Others 2,870,397.98 3,181,802.95 2,870,397.98
Total 5,949,279.63 6,363,729.16 4,715,409.78
Government subsidies accounted into current profit or loss:
In RMB
Whether Amount
Whether it is Occurred in Related to
affecting gain occurred in
Item Issuer Reason Nature a special previous assets/earnin
and loss in the current
subsidy period g
this year period
Shenzhen
Hi-tech
Pre-employm Talent Public
Earning-relat
ent training Training Subsidy No No 103,200.00 86,849.06
ed
subsidy Management
Service
Center
Shenzhen
Childbearing Social Earning-relat
Subsidy No No 73,280.27 9,362.99
subsidy Security ed
Bureau
Shenzhen
Income tax Assets-relate
Local Tax Award No No 10,266.85
commission d
Bureau
Significant
industrial and Gongguan
trade Trade and Assets-relate
Award No No 28,571.40 28,571.40
development Industry d
investment Bureau
project award
Self-breathin
g dual-layer Guangdong
hallow grass Development Assets-relate
Subsidy No No 61,993.62 61,993.62
energy-savin and Reform d
g curtain wall Commission
development
79
2017 Interim Financial Report of China Fangda Group Co., Ltd.
project
Xinjing
Employment Earning-relat
human Subsidy No No 13,781.11
subsidy ed
resource
Market
Supervision
Intellectual
Administratio Earning-relat
property right Subsidy No No 100,000.00
n of ed
subsidy
Shenzhen
Municipality
Railway
transport
Shenzhen
screen door
Science and
controlling Assets-relate
Technology Subsidy No No 21,614.64
system and d
Innovation
information
Committee
transmission
technology
Nanchang
Patent Hi-tech Area Earning-relat
Subsidy No No 7,000.00 4,000.00
subsidy management ed
committee
Hi-tech Nanchang
enterprise Hi-tech Area Earning-relat
Subsidy No No 100,000.00
technology management ed
subsidy committee
Nanchang
Training Hi-tech Area Earning-relat
Subsidy No No 15,900.00
subsidy management ed
committee
Shenzhen
Nanshan
Industrial Earning-relat
District Award No No 680,000.00
growth ed
Financial
Bureau
IT Shenzhen
Earning-relat
development SME Service Subsidy No No 470,000.00
ed
subsidy Center
PV power Dongguan
Earning-relat
generation financial Subsidy No No 12,499.98
ed
Dongguan treasury
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
subsidy
Zhongshan
Zhongshan
Henglan
Henglan
economy
Economy
development Assets-relate
Development Subsidy No No 190,609.98
and d
and
technological
Technologica
bureau
l Bureau
sponsorship
Bureau of
Exhibition Earning-relat
Foreign Subsidy No No 105,700.00
subsidy ed
Trade
Subsidy for
Shenzhen
research
Scientific and Science and
development, Earning-relat
technology Technology Award No No 200,000.00
technology ed
prize Innovation
upgrade and
Committee
improvement
Railway
transport Subsidy for
screen door Shenzhen research
controlling Technology development, Earning-relat
No No 25,217.08
system and Innovation technology ed
information Committee upgrade and
transmission improvement
technology
Subsidy for
Zhongshan research
Technically
Economy and development, Earning-relat
improvement Subsidy No No 330,000.00
Information technology ed
subsidy
Bureau upgrade and
improvement
LED
production
expansion, Subsidy for
technical Zhongshan research
improvement Reform and development, Assets-relate
Subsidy No No 204,759.96
and Development technology d
technological Bureau upgrade and
ly innovative improvement
service
subsidy
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
Guangdong
PV power Development Assets-relate
Subsidy No No 18,749.97
plant subsidy and Reform d
Commission
Total -- -- -- -- -- 1,418,717.85 1,545,204.08 --
49. Non-business expenses
In RMB
Amount occurred in the current Amount accounted into the
Items Occurred in previous period
period current accidental gain/loss
Total of losses from disposal of
120,557.86 2,453,627.28 120,557.86
non-current assets
Including: Losses from disposal
120,557.86 2,453,627.28 120,557.86
of fixed assets
Donation 29,000.00
Others 229,327.22 861,918.15 229,327.22
Total 349,885.08 3,344,545.43 349,885.08
50. Income tax expenses
(1) Details about income tax expense
In RMB
Items Amount occurred in the current period Occurred in previous period
Income tax expenses in this period 68,286,547.49 11,587,965.22
Deferred income tax expenses -518,442.97 -2,686,269.81
Total 67,768,104.52 8,901,695.41
(2) Adjustment process of accounting profit and income tax expense
In RMB
Items Amount occurred in the current period
Total profit 295,286,347.88
Income tax expenses calculated based on the legal (or applicable)
73,821,586.97
tax rates
Impacts of different tax rates applicable for some subsidiaries -10,050,636.60
Impacts of income tax before adjustment 454,975.61
Impacts of non-deductible cost, expense and loss 4,368,963.61
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
Deductible temporary difference and deductible loss of
-518,442.97
unrecognized deferred income tax assets
Taxation impact of R&D expense -465,000.00
Profit and loss of associates and joint ventures calculated using
156,673.46
the equity method
Income tax expenses 67,768,104.52
51. Other miscellaneous income
See Note VII 37.
52. Notes to the cash flow statement
(1) Other cash inflow related to operation
In RMB
Items Amount occurred in the current period Occurred in previous period
Interest income 3,708,261.11 2,540,342.54
Subsidy income 2,874,387.49 1,429,421.98
Retrieving of deposits for exchange bills 3,814,291.12
Bidding deposit and pledge 75,525,724.38 46,131,969.36
Others 9,607,007.94 7,114,288.38
Total 91,715,380.92 61,030,313.38
Notes to other cash inflow related to operation:
(2) Other cash paid related to operation
In RMB
Items Amount occurred in the current period Occurred in previous period
Management costs paid 15,879,543.69 14,048,584.70
Sales costs paid 5,406,466.34 7,262,362.08
Deposit and pledge paid 69,992,371.84 54,017,213.61
Personal borrowing 3,451,294.08
Others 9,991,825.76 9,357,452.43
Total 101,270,207.63 88,136,906.90
Notes to other cash paid related to operation:
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
(3) Other cash received related to investment activities
In RMB
Items Amount occurred in the current period Occurred in previous period
Total 0.00
Notes to other cash received related to investment activities:
(4) Other cash paid related to investment activities
In RMB
Items Amount occurred in the current period Occurred in previous period
Bidding deposit paid related to
1,150,000.00
construction projects
Total 1,150,000.00
Notes to other cash paid related to investment activities:
(5) Other cash received related to financing
In RMB
Items Amount occurred in the current period Occurred in previous period
Fractional dividend 31.03
Total 31.03
Notes to other cash received related to financing:
(6) Other cash paid related to financing
In RMB
Items Amount occurred in the current period Occurred in previous period
Payment appreciation fee 641,119.57
Total 641,119.57
53. Supplementary data of cash flow statement
(1) Supplementary data of cash flow statement
In RMB
Supplementary information Amount of the Current Term Amount of the Previous Term
1. Net profit adjusted to cash flow of
-- --
business operation
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
Net profit 227,518,243.36 48,628,261.42
Plus: Asset impairment provision -9,908,133.36 10,347,572.61
Fixed asset depreciation, gas and petrol
14,933,192.38 12,815,549.95
depreciation, production goods depreciation
Amortization of intangible assets 1,706,801.70 1,973,088.31
Amortization of long-term amortizable
2,114,078.76 1,912,143.29
expenses
Loss from disposal of fixed assets, intangible
assets, and other long-term assets (“-“ for -33,313.54 2,385,055.21
gains)
Loss from fixed asset discard (“-“ for gains) 120,557.86
Loss from fair value fluctuation (“-“ for
-698,811.63 -10,163,410.45
gains)
Financial expenses (“-“ for gains) 31,694,708.78 20,113,390.84
Investment losses (“-“ for gains) -6,880,596.27 289,857.34
Decrease of deferred income tax asset
-19,617,905.97 -5,455,328.51
(“-“ for increase)
Increase of deferred income tax asset (“-“ for
18,971,848.45 2,956,260.52
increase)
Decrease of inventory (“-“ for increase) 72,721,993.69 -271,168,255.93
Decrease of operational receivable items
323,784,130.19 -153,629,463.47
(“-“ for increase)
Increase of operational receivable items
-441,163,587.02 637,464,622.79
(“-“ for decrease)
Cash flow generated by business operations,
215,263,207.38 298,469,343.92
net
2. Major investment and financing operation
-- --
not involving with cash
3. Net change of cash and cash equivalents -- --
Balance of cash at period end 792,090,304.49 367,564,230.41
Less: Initial balance of cash 935,824,575.40 247,739,243.78
Net increase in cash and cash equivalents -143,734,270.91 119,824,986.63
(2) Composition of cash and cash equivalents
In RMB
Items Closing balance Opening balance
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
I. Cash 792,090,304.49 935,824,575.40
Including: Cash in stock 1,079,247.26 18,968.85
Bank savings can be used at any time 788,408,558.90 361,326,250.00
Other monetary capital can be used at
2,602,498.33 6,219,011.56
any time
3. Balance of cash and cash equivalents at
792,090,304.49 935,824,575.40
end of term
54. Ownership- or use-right-restricted assets
In RMB
Items Closing book value Reason
Monetary capital 104,089,891.35 Frozen deposit and pledge
Fixed assets 71,524,022.93 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 672,354,574.91 --
55. Foreign currency monetary items
(1) Foreign currency monetary items
In RMB
Closing foreign currency
Items Exchange rate Closing RMB balance
balance
Including: USD 754,846.35 6.7744 5,113,631.12
HK Dollar 33,393,538.90 0.8679 28,983,118.39
SGD 177,912.77 4.9135 874,174.40
AUD 249,725.41 5.2099 1,301,044.41
Including: USD 16,151.51 6.7744 109,416.78
HK Dollar -25,692,457.80 0.8679 -22,299,038.77
SGD 476,621.22 4.9135 2,341,878.36
AUD -40,000.00 5.2099 -208,396.00
Account receivable -
Including: USD 639,300.00 6.7744 4,330,873.92
HK Dollar 16,991,951.18 0.8679 14,747,314.43
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
Other payables -
Including: USD 3,706.26 6.7744 25,107.69
HK Dollar 100.00 0.8679 86.79
(2) The note of overseas operating entities should include the main operation places, book keeping
currencies and selection basis. Where the book keeping currency is changed, the reason should also be
explained.
□ Applicable √ Inapplicable
56. Hedging
Hedging items and related tools, qualitative and quantitative information about hedging risks:
Hedging type Hedged item Hedging instrument Hedged risk
Cash flow hedging Aluminum plate futures transaction Aluminum futures contract Rise on raw material prices, causing
purchase cost increase
VIII. Change to Consolidation Scope
1. Change to the consolidation scope for other reasons
Change in the consolidation scope due to other reasons (such as new subsidiaries and liquidation of subsidiaries) and the situations:
Shenzhen Hongjun Investment Co., Ltd. and Fangda Australia Co., Ltd. were newly established in this period. The two companies
are consolidated in this period/
IX. Equity in Other Entities
1. Interests in subsidiaries
(1) Group Composition
Registered Shareholding percentage
Company Place of business Business Obtaining method
address Direct Indirect
Designing,
manufacturing,
Fangda Jianke Shenzhen Shenzhen 98.39% 1.61% Incorporation
and installation of
curtain walls
Production,
Fangda processing and
Shenzhen Shenzhen 14.00% 86.00% Incorporation
Automatic installation of
subway screen
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
doors
Production and
sales of new-type
materialism
Fangda New
Nanchang Nanchang composite 75.00% 25.00% Incorporation
Material
materials and
production of
curtain walls
Design,
production, sales
Fangda and installation of
Nanchang Nanchang 99.00% 1.00% Incorporation
Aluminum aluminum
materials, doors
and windows
Computer
Kexunda Shenzhen Shenzhen software 100.00% Incorporation
development
Real estate
Fangda Property Shenzhen Shenzhen development and 100.00% Incorporation
operation
Design and
Fangda New
Shenzhen Shenzhen construction of 100.00% Incorporation
Energy
PV power plants
Trusted
processing of
Chengdu Fangda Chengdu Chengdu 100.00% Incorporation
building curtain
wall materials
Shihui
International Virgin Islands Virgin Islands Investment 100.00% Incorporation
Holding Co., Ltd.
Installation and
Dongguan New
Dongguan Dongguan sales of building 100.00% Incorporation
Material
curtain walls
Designing,
Shenyang manufacturing,
Shenyang Shenyang 100.00% Incorporation
Decoration and installation of
curtain walls
Production and Consolidation of
Fangda SOZN Zhongshan Zhongshan sales of light 60.00% entities not under
products common control
Fangda Property Shenzhen Shenzhen Property 100.00% Incorporation
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
Management management
Jiangxi Fangda
Real estate
Property
Nanchang Nanchang development and 100.00% Incorporation
Development Co.,
operation
Ltd.
Pingxiang Fangda Design and
Luxin New Pingxiang Pingxiang construction of 100.00% Incorporation
Energy Co., Ltd. PV power plants
Pingxiang
Design and
Xiangdong
Pingxiang Pingxiang construction of 100.00% Incorporation
Fangda New
PV power plants
Energy Co., Ltd.
Nanchang Xinjian Design and
Fangda New Nanchang Nanchang construction of 100.00% Incorporation
Energy Co., Ltd. PV power plants
Dongguan Design and
Fangda New Dongguan Dongguan construction of 100.00% Incorporation
Energy Co., Ltd. PV power plants
Kechuangyuan Software
Shenzhen Shenzhen 100.00% Incorporation
Software development
Fangda
Automation Metro screen
Hong Kong Hong Kong 100.00% Incorporation
(Hong Kong) Co., door
Ltd.
Fangda Australia Curtain wall
Brisbane Brisbane 100.00% Incorporation
Co., Ltd. installation
Shenzhen
Hongjun Industrial
Shenzhen Shenzhen 98.00% 2.00% Incorporation
Investment Co., investment
Ltd.
Note to the difference between shareholdings in subsidiaries and percentage of votes:
Basis for holding half or less votes but controlling invested entities, and holding half or more votes but not controlling invested
entities:
Basis for control of structural entities incorporated in the consolidation scope:
Basis for recognizing a company as an agent or consigner:
Others:
(2) Financial support or other support provided to structural entities to be consolidated
Others:
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
2. Interests in joint ventures or associates
(1) Financial summary of insignificant joint ventures and associates
In RMB
Closing balance/amount occurred in this Opening balance/amount occurred in
period previous period
Joint venture: -- --
Total shareholding -- --
Associate: -- --
Total book value of investment 11,478,399.06 12,105,030.68
Total shareholding -- --
Net profit -626,631.62 -399,777.88
Total of misc. incomes -626,631.62 -399,777.88
Other note
X. Risks of Financial Tools
Major financial tools of the Group include monetary fund, accounts receivable, receivable bills, other receivables, other current assets,
financial assets measured at fair value and whose change recorded in the profit and loss of this period, accounts payable, interest
payable, payable bills, other payables, short-term borrowings, other current liabilities, non-current liabilities due within one year and
long-term borrowings. Details about the Group's financial instruments are disclosed in related notes. The following explains risks
related to the financial instruments and risk management policies adopted by the Group to lower the risks. The management of the
Group manages and monitor the risks to ensure that the risks are within the acceptable range.
1. Risk management target and policy
The target of the risk management is to balance between risk and benefit and lower financial risks’ impacts on the Group’s financial
performance. Based on the target, the Group has formulated risk management policy to identify and analyze risks facing the Group
and set an appropriate acceptable level and internal control procedures to monitor the risks. The Group regularly reviews the risk
management policies and related internal control system to suit the market status and changes in the Group’s operating activities. The
internal auditing department of the Group will regularly or randomly check the implementation of the internal control system.
Risks caused by the Group’s financial instruments are credit risk, liquidity risk and market risk (including interest, exchange rate and
product price/equity tool price risks).
(1) Credit risk
Credit risk is caused by the failure of one party of a financial instrument in performing its obligations, causing the risk of financial
loss for the other party.
The Group manages credit risks through classification. The credit risk is mainly caused by bank deposit and receivables.
The Group’s bank deposit is mainly deposited in state-owned banks and large-sized listed banks. The credit risk caused by bank
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
deposited is minor.
For receivables, the Group sets up related policies to control the credit risk. The Group set the credit line and term for debtors
according to their financial status, external rating, and possibility of getting third-party guarantee, credit record and other factors. The
Group regularly monitors debtors’ credit record. For those with poor credit record, the Group will send written payment reminders,
shorten or cancel credit term to lower the general credit risk.
The largest credit risk facing the Group is the book value of each financial asset on the balance sheet. The Group makes no guarantee
that may cause the Group credit risks.
Among the Group’s receivables, accounts receivable from top 5 customers account for 19.39% of the total accounts receivable (2016:
23.59%); among other receivables, other receivables from top 5 customers account for 30.70% of the total other receivables (2016:
35.93%).
(2) Liquidity risk
Liquidity risk is the risk of capital shortage when the Group needs to pay cash or settled with other financial assets.
The Group keeps adequate cash and cash equivalent, and monitors the level to ensure that the cash and cash equivalent can meet the
operation needs. The management of the Group monitors the use of bank loans and ensures that they are used as agreed. The Group
also obtains guarantee from financial institutions for adequate standby fund to meet short-term and long-term capital demand.
The Group can also use fund generated by operating activities and bank and other loans.
Financial liabilities and excluded guarantees held by the Group by undiscounted residual contract cash flow (in RMB10,000) at the
end of the period:
Closing amount
Assets Less than 1 year Within 1-3 years Over 3 years Total
Financial liabilities:
Short-term loans 55,100.00 55,100.00
Notes payable 41,091.79 41,091.79
Account payable 90,640.78 18,467.91 109,108.69
Interest payable 245.09 245.09
Other payables 6,558.13 36,046.81 42,604.94
Other current liabilities 1,342.97 1,342.97
Non-current liabilities due in 1 10,000 .00 10,000 .00
year
Long-term loans 50,000.00 46,517.86 96,517.86
Total liabilities 204,978.76 104,514.72 46,517.86 356,011.34
Financial liabilities and excluded guarantees held by the Group by undiscounted residual contract cash flow (in RMB10,000) at the
beginning of the period:
Opening amount
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
Assets Less than 1 year Within 1-3 years Over 3 years Total
Financial liabilities:
Short-term loans 59,100.00 59,100.00
Notes payable 55,730.13 55,730.13
Account payable 113,483.10 14,042.50 127,525.60
Interest payable 263.50 263.50
Other payables 5,636.61 30,981.67 36,618.28
Other current liabilities 3,514.81 3,514.81
Long-term loans 20,000.00 72,216.96 92,216.96
Total liabilities 237,728.15 65,024.17 72,216.96 374,969.28
(3) Market risk
Market risk of financial instrument is caused by changes in the fair value of financial instruments or future cash flow, including
interest risk, exchange rate and other price risks.
Interest rate risk is caused by fluctuation of the fair value or future cash flow of financial instruments caused by changes in the
market interest rate. The interest rate risk can be caused by recognized interest-bearing financial instruments and unrecognized
financial instruments.
The Group's interest rate risk is mainly caused by short-term borrowings, other current liabilities and long-term borrowings. Financial
liabilities with floating interest rate cause cash flow interest rate risk for the Group. Financial liabilities with fixed interest rate cause
fair value interest rate risk for the Group. The Group decides the proportion between fixed interest rate and floating interest rate
according to the market environment and regularly reviews and monitors the combination of fixed and floating interest rate
instruments. All financial liabilities of the Group at the end of the period bear fixed interest rates.
The Group pays close attention to the risks of changing interest rates. The Group adopts no hedging policies currently. The
management is responsible for monitoring the interest risks. As fixed deposits are short-term borrowing, the interest rate risk of the
fair value of bank deposit is minor.
Because there were no floating interest borrowings in the period, the Group’s net profit and shareholders’ equity on December 31,
2016 remained unchanged.
Exchange rate risk
Exchange rate risk is caused by fluctuation of the fair value or future cash flow of financial instruments caused by changes in the
foreign exchange rates. The exchange rate risk can be caused by financial instruments priced in foreign currencies.
The Group mainly operates in China and use RMB as the settlement currency. Therefore, the exchange rate risk facing the Group is
minor.
See Note VII. 55 Foreign Currency Item Note for the Group’s financial assets and liabilities priced in foreign currencies.
Other price risks
Other price risks refer to risks of fluctuations caused by changes to market prices, regardless of whether the changes are caused by
factors related to a single financial tool or issuer, or factors related to all similar financial tools traded in the market. Other price risks
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
come from changes in product prices or equity tool prices.
Investment in financial assets held by the Group, classified as measured at fair value and whose changes recorded into the gain and
loss in this period is measured at its fair value on the balance sheet date. Therefore, the Group bears risks of changes in the securities
market.
The Group closely follows impacts of price changes to the Company’s securities investment price risks. The Group takes no measure
to prevent other price risks currently. The management is responsible for monitoring the other price risks.
2. Capital management
The Group’s capital management aims to ensure continuous operation of the Group, provide returns for shareholders, help other
interested parties make benefit, and maintain the best capital structure and lower capital cost.
The Group may adjust the dividend distributed to shareholders, issue new shares or sell assets to maintain or adjust the capital
structure.
The Group monitors the capital structure based on the assets/liability ratio. On 30.06.17, the Group’s assets/liability ratio is 64.23%
(31.12.16: 66.08%).
XI. Fair Value
1. Closing fair value of assets and liabilities measured at fair value
In RMB
Closing fair value
Items
First level fair value Second level fair value Third level fair value Total
1. Continuous fair value
-- -- -- --
measurement
3. Derivative financial
323,000.00 323,000.00
assets
2. Leased building 302,765,697.60 302,765,697.60
2. Discontinuous fair
-- -- -- --
value measurement
2. Recognition basis of market value of continuous and discontinuous items measured at first level fair
value
The Group determines the fair value using quotation in an active market for financial instruments traded in an active market;
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
Valuation technique and qualitative and quantitative information for key parameters of continuous and
discontinuous second level fair value items
For investment in real estate similar with real estate transaction, the Group uses valuation techniques to determine its fair value. The
technique is comparison method. Inputs include transaction date, status, region and other factors.
4. Switch between different levels, switch reason and switching time policy
In the period, there is no switch in the financial assets measured at fair value between the first and second level or transfer in or out of
the third level.
5. Fair value of financial assets and liabilities not measured at fair value
Financial assets and liabilities measured at amortized cost include: monetary capital, bills receivable, accounts receivable, other
receivables, short-term borrowings, notes payable, accounts payables, other payables, and long-term payables.
The difference between book value and fair value of financial assets and liabilities not measured at fair value is small.
XII. Related Parties and Transactions
1. Parent of the Company
Share of the parent Voting power of the
Parent Registered address Business Registered capital
co. in the Company parent company
Shenzhen Banglin
Technologies
Shenzhen Industrial investment 30,000,000.00 8.72% 8.72%
Development Co.,
Ltd.
Shenzhen Shilihe
Shenzhen Industrial investment 19,780,992.00 2.26% 2.26%
Investment Co., Ltd.
Shengjiu Investment
Hong Kong Industrial investment HKD1.00 7.27% 7.27%
Ltd.
Particulars about the parent of the Company
(1) All of the investors of Shenzhen Banglin Technology Development Co., Ltd. – the holding shareholder of the Company, are
natural persons. Among them, Chairman Xiong Jianming is holding 85% of the shares, and Mr. Xiong Xi – son of Mr. Xiong
Jianming, is holding 15% of the shares.
(2) Among the top 10 shareholders, Shenzhen Banglin Technology Development Co., Ltd. and Shengjiu
Investment Co., Ltd. are parties action-in-concert. Shenzhen Banglin Technology Development Co., Ltd. and
Shenzhen Shilihe Investment Co., Ltd. are related parties. The Company is not notified of other action-in-concert or related
parties among the other holders of current shares.
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
The final controller of the Company is Xiong Jianming.
2. Subsidiaries of the Company
See Note IX. 1.
3. Joint ventures and associates
See Note VII. 11 for details of significant joint ventures and associates of the Company.
Information about other joint ventures or associates with related transactions in this period or with balance generated by related
transactions in previous period:
Joint venture or associate Relationship with the Company
Shenzhen Ganshang Joint Investment Co., Ltd. Associate
Shenzhen Huihai Yirong Internet Service Co., Ltd. Associate
4. Other associates
Other related parties Relationship with the Company
Directors, manager, CFO and secretary of the Board of Directors Key management
5. Related transactions
(1) Related leasing
The Company is the leasor:
In RMB
Name of the leasee Category of asset for lease Rental recognized in the period Rental recognized in the period
Shenzhen Ganshang Joint
Houses & buildings 62,170.38 61,252.86
Investment Co., Ltd.
The Company is the leasee:
In RMB
Rental recognized in previous
Name of the owner Category of asset for lease Rental recognized in the period
period
Note to related leasing
(2) Related guarantees
The Company is the guarantor:
In RMB
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
Beneficiary party Amount guaranteed Start date Due date Completed or not
Fangda Jianke 480,000,000.00 06.07.16 05.07.18 No
Fangda Jianke 400,000,000.00 01.11.16 01.11.17 No
Fangda Jianke 260,000,000.00 27.12.16 02.11.17 No
Fangda Jianke 200,000,000.00 23.08.16 22.08.17 No
Fangda Jianke 200,000,000.00 17.10.16 17.10.17 No
Fangda Jianke 180,000,000.00 16.02.17 15.02.18 No
Fangda Jianke 300,000,000.00 17.11.16 17.11.17 No
Fangda Automatic 216,000,000.00 06.07.16 05.07.18 No
Fangda Automatic 100,000,000.00 12.12.16 12.12.17 No
Fangda Automatic 100,000,000.00 27.12.16 02.11.17 No
Fangda New Material
80,000,000.00 27.05.17 26.05.18 No
(Jiangxi)
Fangda New Material
52,000,000.00 18.11.16 18.11.17 No
(Jiangxi)
Fangda Property 1,300,000,000.00 03.02.15 02.02.23 No
The Company is the guarantied party:
In RMB
Guarantor Amount guaranteed Start date Due date Completed or not
Fangda Jianke, Fangda
200,000,000.00 12.12.16 12.12.17 No
Automatic
Guarantor Amount guaranteed Start date Due date Completed or not
Fangda Jianke, Fangda
200,000,000.00 12.12.16 12.12.17 No
Automatic
(3) Remuneration of key management
In RMB
Items Amount occurred in the current period Occurred in previous period
Wage, remuneration and subsidy 2,601,833.77 2,565,850.00
6. Receivable and payables due with related parties
(1) Receivable interest
In RMB
Project Affiliated party Closing balance Opening balance
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
Remaining book Remaining book
Bad debt provision Bad debt provision
value value
Other receivables Shenzhen Woke 867,442.96 77,480.29 867,442.94 25,974.09
(2) Receivable interest
In RMB
Project Affiliated party Closing balance of book value Opening balance of book value
Other payables Shenyang Fangda 7,908.80 7,908.80
XIII. Share Payment
1. Overall share payment
□ Applicable √ Inapplicable
2. Share payment settled by equity
□ Applicable √ Inapplicable
3. Share payment settled by cash
□ Applicable √ Inapplicable
4. Revising and termination of share payment
None
XIV. Commitment and Contingent Events
1. Major commitments
Major commitments that exist on the balance sheet day
The Company has no other commitments that should be disclosed by 31.12.17.
2. Contingencies
(1) Significant contingencies on the balance sheet date
(1) Contingent liabilities formed by material lawsuit or arbitration, and their influences on the financial position
In June 2015, Fangda Jianke filed a lawsuit against Wang Weihong, requiring an indemnity of RMB23 million and de-freezing of the
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amount RMB23 million by the bank. By the report date, the lawsuit remains pending.
In 2013, Fangda Jianke filed a lawsuit to Shenyang Middle People’s Court again Shenyang Lidu Commerce Co., Ltd., requiring
construction payment and loss of RMB9,375,483.47 and the interest. The second trial remains pending on the report date.
(2) Pending major lawsuits
On January 2, 2003, Guangzhou Middle Court issued a civil case conciliation statement (2002) 穗中法民三初字 No. 00596 to rule
that the Guangzhou Yi An Square Real Estate Development Co., Ltd. to make the engineering payment of RMB5,621,329.63 to
Fangda Jianke within 15 days of the effectiveness of the conciliation statement. By December 31, 2016, Fangda Jianke has recovered
RMB1,950,000.00.
On December 23, 2015, Zhongshan Guzhen People’s Court judged according to 中二法古民二初字第1040号 that Fangda SOZN
make the payment of RMB10,331,348.20, interest and the lawsuit fee to Foshan Youfeng Trading Co., Ltd. within 15 days. By the
report date, Fangda SOZN has not made the payment.
On 29.04.16, Zhongshan Second People’s Court judged according to (2016)粤2072民初2165号 that Fangda SOZN make the
payment of RMB9,627,359.16, interest and the lawsuit fee to Xiangneng Hualei Optoelectronic Co., Ltd. within 7 days. By the report
date, Fangda SOZN has not made the payment.
On 10.05.16, Zhongshan Second People’s Court judged according to (2016)粤2072民初3204号 that Fangda SOZN make the
payment of RMB6,849,847.00, interest and the lawsuit fee to Huacan Optoelectronic (Suzhou) Co., Ltd. within 10 days. By the
report date, Fangda SOZN has not made the payment.
(3) Providing guarantee for property purchasers
The Group’s property business provides periodic mortgage guarantee for property purchasers. The term of the periodic guarantee
lasts from the effectiveness of guarantee contracts to the completion of mortgage registration and transfer of housing ownership
certificates to banks. By December 31, 2017, the Company has provided periodic guarantee of RMB363 million.
On 30.06.17, the Company has no other contingent events that should be disclosed.
(2) Significant contingent events that do not need to be disclosed should be explained
No such significant contingent event
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XV. Other material events
1. Segment information
(1) Recognition basis and accounting policy for segment report
The Group divides its businesses into five reporting segments. The reporting segments are determined based on financial information
required by routine internal management. The Group’s management regularly review the operating results of the reporting segments
to determine resource distribution and evaluate their performance.
The reporting segments are:
(1) Curtain wall segment, production and sales of curtain wall materials, construction curtain wall design, production and installation;
(2) Rail transport segment: assembly and processing of metro screen doors;
(3) Real estate segment: development and operating of real estate on land of which land use right is legally obtained by the Company;
property management;
(4) New energy segment, R&D, installation and sales of PV devices, design and construction of PV power plants; R&D, design,
production, sales and installation of light accessories, and other lights, LED products and hardware.
(5) Others
The segment report information is disclosed based on the accounting policies and measurement standards used by the segments when
reporting to the management. The policies and standards should be consistent with those used in preparing the financial statement.
(2) Financial information
In RMB
Offset between
Items Curtain wall Rail transport Real estate New energy Others Total
segments
Major business 1,380,976,886.
737,244,117.11 154,612,475.20 477,870,274.15 10,417,329.25 5,099,531.65 -4,266,840.38
turnover 98
Main business
631,139,134.81 119,799,197.58 140,741,588.36 3,658,643.94 2,390,719.24 -4,229,570.67 893,499,713.26
cost
2. Major transactions and events with impacts on investors’ decisions
1. Acquisition of Fangda SOZN, repurchasing of shares and debt payment
(1) About the acquisition
Fangda New Energy entered into an investment agreement with Luo Huichi on July 18, 2014. According to the agreement, Fangda
Energy and Shenzhen Jinma Yinke entered into a share transfer agreement on July 29, 2014. Luo Huichi makes contribution to a
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
newly established company with limited liability using fixed assets, intangible assets, sales network and teams in three companies
under her actual control: Zhongshan SOZN Lighting, Zhongshan Henglan Tengding Lighting Factory, Shenzhen Jinma Yinke. After
confirming the Target Company’s assets, both parties entered into the stock transfer and capital increment agreement, under which
the Company acquires 60% stack in the Target Company by acquiring stocks and injecting capital.
Fangda New Energy made the share transfer payment of RMB12 million as agreed and provided interest-free loans of RMB30
million to Fangda SOZN. Fangda SOZN did not fulfill 90% of the sales or net profit target in 2015.
(2) Share repurchasing and debt payment agreement
On 22.04.16, the Company, Fangda New Energy, Fangda SOZN, Shenzhen Jinma Yinke Electronics Co., Ltd., Luo Huichi and Jin
Yaping (sponse of Luo Huichi) signed the Stock Repurchasing and Debt Payment Agreement. According to the agreement, Shenzhen
Jinma Yinke shall pay RMB12 million to repurchase the 60% stake in Fangda SOZN held by Fangda New Energy and all parties are
released from all rights and obligations under the Investment Agreement. All parties agree, if Fangda SOZN repays the debt of
RMB23 million within the agreed period, the Company and Fangda New Energy shall give up all remaining debt on Fangda SOZN.
The agreement was approved at the 20th meeting of the 7th Board of Directors held on April 22, 2016 and comes into effect after
being approved at the 2015 General Shareholders’ Meeting.
As Jinma Yingke failed to make the repurchase payment as agreed, Fangda New Energy filed proceedings to the Shenzhen Nanshan
District People’s Court and applied for property preservation of RMB2 million on August 30, 2016 to require Jinma Yingke to make
the share transfer payment of RMB12 million and make the penalty. On November 21, 2016, Fangda New Energy and Jinma Yingke
reached the dispute settlement agreement and agreed to make the share repurchasing payments of RMB2 million before December 5,
2016, March 30, 2017, and June 30, 2017 and make the share repurchasing payment of RMB6 million before December 30, 2017. By
the report date, only RMB500,000 was received.
As Jinma Yingke failed to make the share repurchasing payments, the Company filed proceeding to Shenzhen Nanshan District
People’s Court on September 1, 2016 to require Luo Huichi and Jin Yaping to assume joint liability and make the principal payment
of RMB15,158,586.39 and interest. The payment is made on the report date.
XVI. Notes to Financial Statements of the Parent
1. 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 468,186
100.00% 14,045.59 3.00% 454,140.85
providing of bad debt .44
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
provisions on groups
468,186
Total 100.00% 14,045.59 3.00% 454,140.85
.44
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
Account receivable adopting the balance percentage method in the group
□ Applicable √ Inapplicable
Account receivable adopting other methods in the group:
(2) Bad debt provision made, returned or recovered in the period
A bad debt provision of RMB-14,045.59 was made in the period. RMB0.00 was recovered or reversed.
2. 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
Other receivables
with major individual
77,261,4 77,261,4 77,261, 77,261,42
amount and bad debt 16.91% 100.00% 0.00 14.40% 100.00%
20.29 20.29 420.29 0.29
provision provided
individually
(2) Recognition and
456,803, 131,502. 456,671,5 459,434 459,354,98
providing of bad debt 85.53% 0.03% 85.60% 79,545.24 0.02%
048.86 16 46.70 ,528.66 3.42
provisions on groups
534,064, 77,392,9 456,671,5 536,695 77,340,96 459,354,98
Total 100.00% 14.49% 100.00% 14.41%
469.15 22.45 46.70 ,948.95 5.53 3.42
Other receivables with major individual amount and bad debt provision provided individually at the end of the period:
√ Applicable □ Inapplicable
In RMB
Other receivables (by Closing balance
entity) Other receivables Bad debt provision Provision rate Reason
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
Cannot be recovered
Fangda SOZN 77,261,420.29 77,261,420.29 100.00%
because of insolvency
Total 77,261,420.29 77,261,420.29 -- --
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 239,247.49 7,177.42 3.00%
1-2 years 735,802.94 73,580.29 10.00%
2-3 years 0.00
3-4 years 20,789.35 10,394.68 50.00%
4-5 years 10,000.00 5,000.00 50.00%
Over 5 years 70,699.54 35,349.77 50.00%
Total 1,076,539.32 131,502.16 12.22%
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 RMB51,956.92 was made in the period. RMB0.00 was recovered or reversed.
(3) Other receivables are disclosed by nature
In RMB
By nature Closing balance of book value Opening balance of book value
Associate accounts 532,987,929.83 535,629,171.29
Other trades 1,076,539.32 1,066,777.66
Total 534,064,469.15 536,695,948.95
(4) Balance of top 5 other receivables at the end of the period
In RMB
Entity By nature Closing balance Age Percentage (%) Balance of bad debt
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
provision at the end
of the period
Fangda Jianke Associate accounts 232,605,607.77 Less than 1 year 43.55%
Fangda Property Associate accounts 133,514,199.76 Less than 1 year 25.00%
Fangda SOZN Associate accounts 77,261,420.29 2-3 years 14.47% 77,261,420.29
Fangda New Energy Associate accounts 41,742,886.04 Less than 1 year 7.82%
Shihui International Associate accounts 30,459,793.09 2-3 years 5.70%
Total -- 515,583,906.95 -- 96.54% 77,261,420.29
3. Long-term share equity investment
In RMB
Closing balance Opening balance
Items Remaining book Impairment Remaining book Impairment
Book value Book value
value provision value provision
Investment in
905,139,494.35 19,800,000.00 885,339,494.35 905,139,494.35 19,800,000.00 885,339,494.35
subsidiaries
Investment in
associates and 11,478,399.06 11,478,399.06 12,105,030.68 12,105,030.68
joint ventures
Total 916,617,893.41 19,800,000.00 896,817,893.41 917,244,525.03 19,800,000.00 897,444,525.03
(1) Investment in subsidiaries
In RMB
Balance of
Provision made in impairment
Invested entity Opening balance Increase Decrease Closing balance
this period provision at the
end of the period
Fangda Jianke 491,950,000.00 491,950,000.00
Fangda Aluminum 19,800,000.00 19,800,000.00 19,800,000.00
Fangda Automatic 18,831,241.35 18,831,241.35
Fangda New
74,496,600.00 74,496,600.00
Material
Fangda Property 200,000,000.00 200,000,000.00
Shihui
International 61,653.00 61,653.00
Holding Co., Ltd.
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
Fangda New
100,000,000.00 100,000,000.00
Energy
Total 905,139,494.35 905,139,494.35 19,800,000.00
(2) Investment in associates and joint ventures
In RMB
Change (+,-) Balance
Investme of
Other
nt gain Cash impairme
Decrease miscellan
Invested Opening Increased and loss Other dividend Impairme Closing nt
d eous
entity balance investmen recognize equity or profit nt Others balance provision
investmen income
t d using change announce provision at the end
t adjustmen
the equity d of the
t
method period
1. Joint venture
2. Associate
Shenzhen
Ganshang
Joint 8,600,939 -99,063.0 8,501,876
Investme .78 7 .71
nt Co.,
Ltd.
Shenzhen
Huihai
Yirong 3,504,090 -527,568. 2,976,522
Internet .90 55 .35
Service
Co., Ltd.
12,105,03 -626,631. 11,478,39
Subtotal
0.68 62 9.06
12,105,03 -626,631. 11,478,39
Total
0.68 62 9.06
4. Operational revenue and costs
In RMB
Amount occurred in the current period Occurred in previous period
Items
Income Cost Income Cost
Other businesses 13,854,120.29 803,595.88 14,499,890.63 1,019,406.36
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
Total 13,854,120.29 803,595.88 14,499,890.63 1,019,406.36
5. Investment income
In RMB
Items Amount occurred in the current period Occurred in previous period
Gains from long-term equity investment
-626,631.62 -399,777.88
measured by equity
Investment gain of financial products 1,641,303.05
Other investment gains 5,424.66
Total 1,014,671.43 -394,353.22
XVII. Supplementary Materials
1. Detailed accidental gain/loss
√ Applicable □ Inapplicable
In RMB
Items Amount Notes
Gain/loss of non-current assets -87,244.32
Subsidies accounted into the current income
account (except the government subsidy
closely related to the enterprise’s business 1,418,717.85
and based on unified national standard
quota)
Gain from entrusted investment or assets
7,507,227.89
management
Gain/loss from change of fair value of
investment property measured at fair value 698,811.63
in follow-up measurement
Other non-business income and expenditures
3,034,051.17
other than the above
Less: Influenced amount of income tax 3,010,038.32
Influenced amount of minority
57,182.99
shareholders’ equity
Total 9,504,342.91 --
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
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2017 Interim Financial Report of China Fangda Group Co., Ltd.
2. Net income on asset ratio and earning per share
Earnings per share
Profit of the report period Weighted average net income/asset ratio Basic earnings per share Diluted Earnings per
(yuan/share) share (yuan/share)
Net profit attributable to common
9.37% 0.1926 0.1926
shareholders of the Company
Net profit attributable to the
common owners of the PLC after
8.98% 0.1846 0.1846
deducting of non-recurring
gains/losses
3. 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
(2) Differences in net profits and assets in financial statements disclosed according to the international and
Chinese account standards
□ Applicable √ Inapplicable
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