2017 Annual Report of China Fangda Group Co., Ltd.
China Fangda Group Co., Ltd.
2017 Annual Report
April 2018
1
2017 Annual Report of China Fangda Group Co., Ltd.
Chapter 1 Important Statement, Table of Contents and Definitions
The members of the Board and the Company guarantee that the
announcement is free from any false information, misleading statement or
material omission and are jointly and severally liable for the information’s
truthfulness, accuracy and integrity.
Mr. Xiong Jianming, the Chairman of Board, Mr. Lin Kebin, the Chief
Financial Officer, and Mr. Wu Bohua, the manager of accounting department
declare: the Financial Report carried in this report is authentic and completed.
All the Directors have attended the meeting of the board meeting at which
this report was examined.
Forward-looking statements involved in this report including future plans
do not make any material promise to investors. Investors should pay attention to
investment risks.
The Company needs to comply with disclosure requirements of the
Shenzhen Stock Exchange Industry Information Disclosure Guideline No.6 –
Listed Companies Engaged in Decoration Business and disclosure requirements
of the Shenzhen Stock Exchange Industry Information Disclosure Guideline
No.3 – Listed Companies Engaged in Property Development.
The Company has specified market, management and production and
operation risks in this report. Please review the potential risks and measures
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2017 Annual Report of China Fangda Group Co., Ltd.
mentioned in the discussion and analysis of future development in IV. Operation
Discussion and Analysis.
The Board meeting reviewed and approved the profit distribution preplan:
distributing cash dividend of RMB1.50 (tax included) for each ten shares to all
shareholders on the basis of 1,183,642,254 shares of the Company and no
dividend share is issued to shareholders. No reserve is capitalized.
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2017 Annual Report of China Fangda Group Co., Ltd.
Table of Contents
Chapter 1 Important Statement, Table of Contents and Definitions .......................................................................................................... 2
Chapter 2 About the Company and Financial Highlights .......................................................................................................................... 7
Chapter 3 Business Introduction.............................................................................................................................................................. 12
Chapter 4 Operation Discussion and Analysis......................................................................................................................................... 18
Chapter 5 Significant Events ................................................................................................................................................................... 43
Chapter 6 Changes in Share Capital and Shareholders ........................................................................................................................... 56
Chapter 7 Preferred Shares ...................................................................................................................................................................... 65
Chapter 8 Particulars about the Directors, Supervisors, Senior M anagement and Employees ............................................................... 66
Chapter 9 Corporation Governance ......................................................................................................................................................... 73
X. Information about the Company’s Securities...................................................................................................................................... 81
Chapter 11 Financial Statements ............................................................................................................................................................. 82
Chapter 12 Documents for Reference.................................................................................................................................................... 210
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2017 Annual Report of China Fangda Group Co., Ltd.
Refers
Terms Description
to
Refers
Fangda Group, company, the Company China Fangda Group Co., Ltd.
to
Refers
Articles of Association Articles of Association of China Fangda Group Co., Ltd.
to
Refers
M eeting of shareholders M eetings of shareholders of China Fangda Group Co., Ltd.
to
Refers
Board of Directors Board of Directors of China Fangda Group Co., Ltd.
to
Refers
Supervisory Committee Supervisory Committee of China Fangda Group Co., Ltd.
to
Refers
Banglin Co. Shenzhen Banglin Technologies Development Co., Ltd.
to
Refers
Shilihe Co. Shenzhen Shilihe Investment Co., Ltd.
to
Refers
Shengjiu Co. Shengjiu Investment Ltd.
to
Refers
Fangda Jianke Shenzhen Fangda Jianke Group Co., Ltd.
to
Refers
Fangda Automatic Shenzhen Fangda Automation System Co., Ltd.
to
Refers
Fangda New M aterial Fangda New M aterials (Jiangxi) Co., Ltd.
to
Refers
Fangda New Resource Shenzhen Fangda New Energy Co., Ltd.
to
Refers
Fangda Property Shenzhen Fangda Property Development Co., Ltd.
to
Refers
Chengdu Fangda Jianke Chengda Fangda Construction Technology Co., Ltd.
to
Refers
Dongguan Fangda New M aterial Dongguan Fangda New M aterial Co., Ltd.
to
Refers
Kechuangyuan Software Shenzhen Qianhai Kechuangyuan Software Co., Ltd.
to
Kexunda Co. Refers Shenzhen Kexunda Software Co., Ltd.
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2017 Annual Report of China Fangda Group Co., Ltd.
to
Refers
Fangda Property Shenzhen Fangda Property M anagement Co., Ltd.
to
Refers
Jiangxi Property Fangda (Jiangxi) Property Development Co., Ltd.
to
Refers
Hongjun Investment Company Shenzhen Hongjun Investment Co., Ltd.
to
Refers
Jianke Australia Fangda Australia Pty Ltd
to
Refers
Automatic Hong Kong Fangda Automation (Hong Kong) Co., Ltd.
to
Refers
Shihui International Shihui International Holding Co., Ltd.
to
Refers
Fangda SOZN Guangdong Fangda SOZN Lighting Co., Ltd.
to
Refers
Shenyang Decoration Fangda Decoration Engineering (Shenyang) Co., Ltd.
to
Refers
Shenyang Fangda Shenyang Fangda Semi-conductor Lighting Co., Ltd.
to
Refers
Shenzhen Woke Shenzhen Woke Semi-conductor Lighting Co., Ltd.
to
Refers
Fangda Aluminum Jiangxi Fangda New Type Aluminum Co., Ltd.
to
Refers
CSRC China Securities Regulatory Commission
to
Refers
SZSE Shenzhen Stock Exchange
to
Definitions
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2017 Annual Report of China Fangda Group Co., Ltd.
Chapter 2 About the Company and Financial Highlights
1. Company profiles
Stock ID Fangda Group, Fangda B Stock code 000055, 200055
M odified stock ID (if any) None
Stock Exchange Shenzhen Stock Exchange
Chinese name China Fangda Group Co., Ltd.
Chinese abbreviation Fangda Group
English name (if any) CHINA FANGDA GROUP CO., LTD.
English abbreviation (if any) CFGC
Legal representative Xiong Jianming
Fangda Technology Building, Kejinan 12th Avenue, High-tech Zone, Hi-tech Park South Zone,
Registered address
Shenzhen, PR China.
Zip code 518057
20F, Fangda Technology Building, Kejinan 12 th Avenue, High-tech Zone, Hi-tech Park South Zone,
Office address
Shenzhen, PR China.
Zip code 518057
Website http://www.fangda.com
Email fd@fangda.com
2. Contacts and liaisons
Secretary of the Board Representative of Stock Affairs
Name Zhou Zhigang Guo Linchen
20F, Fangda Technology Building, Kejinan 20F, Fangda Technology Building, Kejinan
Address 12th Avenue, High-tech Zone, Hi-tech Park 12th Avenue, High-tech Zone, Hi-tech Park
South Zone, Shenzhen, PR China. South Zone, Shenzhen, PR China.
Tel. 86(755) 26788571 ext. 6622 86(755) 26788571 ext. 6622
Fax 86(755)26788353 86(755)26788353
Email zqb@fangda.com zqb@fangda.com
3. Information disclosure and inquiring
China Securities Journal, Security Times, Shanghai Securities Daily, Hong
Press medias of information disclosure
Kong Commercial Daily
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2017 Annual Report of China Fangda Group Co., Ltd.
Website assigned by CSRC to release the online
http://www.cninfo.com.cn
reports
Place for information inquiry Secretarial Office of the Board
4. Registration changes
Organization code None
Changes in main businesses since the
None
listing of the Company
Changes in the controlling shareholders (if
None
any)
5. Other information
Public accountants employed by the Company
Public accountants Grant Thornton (limited liability partnership)
Address 5th Floor, Scitech Place, 22 Jianguomen Wai Avenue, Chaoyang District, Beijing, China
Signing accountant names Chen Zhaoxin, Hu Gaosheng
Sponsor engaged by the Company to perform continued supervision and guide during the reporting period
√ Applicable □ Inapplicable
Sponsor name Office address Representatives Period of supervision and guide
China M erchants Securities Co. 38-45F, Jiangsu Building, Yitian August 1, 2016 – December 31,
Liang Zhanguo, Ding Yi
Ltd. Road, Futian District, Shenzhen 2017
Financial advisor engaged by the Company to perform continued supervision and guide during the reporting period
□ Applicable √ Inapplicable
6. Financial Highlight
Whether the Company needs to make retroactive adjustment or restatement of financial data of previous years
□ Yes √ No
2017 2016 Increase/decrease 2015
Turnover (yuan) 2,947,470,813.58 4,203,866,173.72 -29.89% 2,550,467,494.78
Net profit attributable to
shareholders of the listed company 1,144,404,441.03 697,956,378.23 63.97% 107,272,369.77
(yuan)
Net profit attributable to the
shareholders of the listed company
366,212,412.32 623,075,474.92 -41.23% 29,070,293.64
and after deducting of
non-recurring gain/loss (RM B)
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2017 Annual Report of China Fangda Group Co., Ltd.
Net cash flow generated by
557,833,145.73 465,717,074.92 19.78% -360,115,114.04
business operation (RM B)
Basic earnings per share
0.970 0.600 61.67% 0.09
(yuan/share)
Diluted Earnings per share
0.970 0.600 61.67% 0.09
(yuan/share)
Weighted average net income/asset
41.53% 38.83% 2.70% 8.42%
ratio
Increase/decrease from
End of 2017 End of 2016 End of 2015
the end of last year
Total asset (RM B) 7,625,422,688.63 6,787,051,278.08 12.35% 4,464,147,811.40
Net profit attributable to the
shareholders of the listed company 3,238,939,202.18 2,364,262,560.28 37.00% 1,319,496,334.84
(RM B)
7. Differences in accounting data unde r domestic and foreign accounting standards
1. Differences in net profits and assets in financial statements disclosed according to the international and
Chinese account standards
□ Applicable √ Inapplicable
There is no difference in net profits and assets in financial statements disclosed according to the international and Chinese account
standards during the report period.
2. Differences in net profits and assets in financial statements disclosed according to the overseas and
Chinese account standards
□ Applicable √ Inapplicable
There is no difference in net profits and assets in financial statements disclosed according to the international and Chinese account
standards during the report period.
8. Financial highlights by quarters
In RM B
Q1 Q2 Q3 Q4
Turnover 573,546,634.49 826,164,306.80 653,038,212.34 894,721,659.95
Net profit attributable to the
67,759,233.14 160,244,086.30 133,216,451.43 783,184,670.17
shareholders of the listed company
Net profit attributable to the
shareholders of the listed company 64,053,467.14 154,445,509.40 127,476,204.06 20,237,231.74
and after deducting of
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2017 Annual Report of China Fangda Group Co., Ltd.
non-recurring gain/loss
Cash flow generated by business
-4,846,476.55 220,109,683.90 178,979,877.58 163,590,060.77
operations, net
Where there is difference between the above-mentioned financial data or sum and related financial data in quarter report and interim
report disclosed by the Company
□ Yes √ No
9. Accidental gain/loss item and amount
√ Applicable □ Inapplicable
In RM B
Items 2017 2016 2015 Notes
Non-current asset disposal gain/loss
(including the write-off part for which assets 89,483,320.53 -3,080,469.74 -522,948.72
impairment provision is made)
Subsidies accounted into the current income
account (except the government subsidy
closely related to the enterprise’s business 5,637,910.24 7,571,963.67 2,246,386.84
and based on unified national standard
quota)
Gain from entrusted investment or assets
20,455,865.70 1,401,717.08 250,897.54
management
Gain/loss from debt reorganization -3,674,141.05 -2,445,254.63
Gain/loss from change of fair value of
transactional financial asset and liabilities,
and investment gains from disposal of
transactional financial assets and liabilities 2,013,922.62 2,369,839.47 4,341,316.92
and sellable financial assets, other than valid
period value instruments related to the
Company’s common businesses
Gain/loss from change of fair value of
investment property measured at fair value 889,708,083.34 11,558,304.10 85,793,780.49
in follow-up measurement
Other non-business income and expenditures
4,054,553.86 5,857,845.48 7,624,429.39
other than the above
Other gain/loss items satisfying the
58,154,670.60
definition of non-recurring gain/loss account
Less: Influenced amount of income tax 220,906,068.58 6,168,477.85 20,963,417.56
Influenced amount of minority
8,581,417.95 339,234.87 568,368.77
shareholders’ equity (after-tax)
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2017 Annual Report of China Fangda Group Co., Ltd.
Total 778,192,028.71 74,880,903.31 78,202,076.13 --
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
No circumstance that should be defined as recurrent profit and loss according to Explanation Announcement of Information
Disclosure No. 1 - Non-recurring gain/loss occurs in the report period.
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2017 Annual Report of China Fangda Group Co., Ltd.
Chapter 3 Business Introduction
1. Major businesses of the Company during the report pe riod
Whether the Company needs to comply with disclosure requirements of special industries
Yes
Property development and decoration industries
The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure
Guideline No.6 – Listed Companies Engaged in Decoration Business.
The Company is headquartered in Nanshan District of Shenzhen and became listed in Shenzhen Stock Exchange on November
29, 1995. Currently, five major business subsidiaries of the Company are national high-tech enterprises with modern production
bases in Shenzhen, Shanghai, Chengdu, Nanchang, Dongguan and Foshan. The Company was engaged in the following businesses in
the report period.
1. Curtain wall system and material industry
(1) Main products and purposes
The Company’s main products include energy -saving curtain walls, photo-electricity curtain walls, LED color-display curtain
walls and aluminum plate materials. Construction curtain walls are mainly used on high-level buildings, large-area public venues
such as airports, stations, cultural centers and exhibition centers, daylighting roof, shaped construction (ball-shaped and clock-shaped
buildings) with external retaining and decoration functions.
(2) Main business modes, specific risks and changes;
The projects implemented by the Company are mainly through the bidding method to obtain contract orders. Project design,
material procurement, production and processing, and the construction and installation and after-sales service model are based on the
contract orders. The main risk of this mode is that it takes a long period of time from the completion of the order to the completion of
the project, and it is highly dependent on raw materials and labor costs. It is greatly affected by the national industrial p olicy, raw
material prices, and labor market fluctuations. The Company’s curtain wall products are engineered by itself. The operation mode
remained unchanged in the report period.
(3) Main business drive
See 3. Core competitiveness analysis in this chapter.
(4) Development stage of the industry, circle and industry position
With the development of the major national strategies such as the construction of Guangdong, Hong Kong, and M acau Bay
Area and Xiong'an New District, commercial and office buildings, urban commercial complexes, star-rated hotels and other urban
commercial spaces as well as airports, stations, rail transit, museums, libraries, Public spaces such as stadiums, schools, and hospitals
have strong demand for curtain walls, and the curtain wall system and material industry still have a good foundation. Over recent
years, a series of industry policies will be issued to push forward the industry, providing a gold opportunity for the development of
energy-saving curtain wall and material business. The economic development of the first and second tier cities is relatively good, and
there is a continuous demand for building curtain walls. Therefore, the market capacity is relatively large and it is also the main area
of the curtain wall market competition. There is no obvious periodicity in the curtain wall industry.
The Company is a pioneer and first listed company in this industry. Over the past more than 20 years, the Company has
undertaken hundreds of large projects and received the highest award in the industry China Construction Luban Award and Zhan
Tianyou Civil Engineering Award for many times. The Company has also received nearly 100 provincial and above awards. The
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2017 Annual Report of China Fangda Group Co., Ltd.
Company has been in the top 10 of ―China's top 100 building curtain wall industry‖ for many years, and has already had strong brand
advantages and competitiveness in the industry. The Company has a strong technology lead in the industry with 418 patents,
including 26 intention patents and one software copyright. The Company also took part in the preparation of more than 10 national or
industry standards including the Public Construction Energy Saving Design Standard, making 9 records among Chinese enterprises.
The Company has a Class A qualification for building curtain wall engineering contracting and class A qualification for build ing
curtain wall engineering design. It is the highest level for curtain wall design and construction companies in China.
(5) Macroeconomic situation of the industry, the impact of changes in the industrial policy environment on the
Company, and the countermeasures taken by the Company
2017 is the ―key year‖ for the successful completion of a well-to-do society. It is also an important year for the continuous
deepening of reforms in the construction industry. The state-led industry reforms, top-level design and a series of policies concerning
the development of the construction industry continue, and supply -side reforms continue to deepen. Industry development
opportunities and challenges coexist. With the continuous strengthening of the national environmental protection policy and t he
fluctuation of the price of international energy and metal materials, the price of most of the building materials is rising, which brings
big challenge to the curtain wall industry. However, the comprehensive promotion of the construction of the Guangdong, Hong K ong,
and M acau Bay Area and the Xiong'an New District has also brought many opportunities to the industry.
In 2017, under the influence of the country's economic transformation and innovation, the Company strengthened the
management and management of internal risks to imp rove the quality of project management; on the other hand, it increased the
development of BIM technology, prefabricated construction, and intelligent manufacturing. The R&D capability is enhanced to
continue to maintain industry leading position. In order to meet the Company's needs for further development, the Company will
continue to increase investment, expand production capacity, meet market demand. In 2018, the Company will build Shanghai
Songjiang production base, Chengdu Xinjin production base, to increase production, increase income and sustained rapid
development.
(6) Quality control system, implementation standards, control measures and overall evaluation
Quality control system: The Company implements a comprehensive quality management system and has established a quality
management system in accordance with ISO9001 from the aspects of design, procurement, storage, production, testing, delivery,
installation, and after-sales service, and conduct regular reviews.
Implementation of the standard: In the process of building curtain wall business, the Company strictly complies with
GB/T21086-2007 "Building Curtain Wall", JG/T231-2007 "Building Glass Lighting Roof" and other national and industrial
standards.
Control measures: The Company has established complete and effective quality control measures and quality management
bodies, and strictly implements various quality management and control measures.
Overall evaluation: The Company's products and project quality are in full compliance with the relevant requirements of the
relevant national standards and standards, and maintain proper operation, providing customers with stable and reliable qualit y
products and engineering.
(7) Major project quality problem during the reporting period
None.
2. Rail transport equipment business
The Company’s main products in this sector are rail transport screen door systems, which are a necessary part of modern
subway system. It is installed at the edge of the subway platform and separates trains from the platform. The Company seeks to win
orders through tenders and purchase raw materials and arrange production based on orders. The Company has built a complete
industry chain that integrates designing, production, engineering and after-sales services. The operation mode remained unchanged in
the report period. The Company has developed rail transport screen door systems with independent intellectual property rights . The
Company also prepared the first Rail Transport Station Screen Door Standard. At present, the Company's subway screen doors have
covered more than 60% of metropolitan-operated cities in China. The metro and cloud rails of 32 cities around the world have
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2017 Annual Report of China Fangda Group Co., Ltd.
adopted the Fangda screen door systems, making the Company the world's largest supplier of screen doors.
3. New energy industry: Solar PV power generation industry is largely supported by the Chinese government. The Company
is one of the first companies that possess intellectual property rights in the designing, production and integration of solar P V systems.
In 2017, photovoltaic power stations in Xuanfeng Town, Pingxiang Town, Jiangxi Province, and photovoltaic power stations in t he
parks of Jiangxi Isuzu Automobile Co., Ltd. in Nanchang City and Dongguan Songshan Lake Photovoltaic Power Plant all operated
steadily with a total power generation capacity of 19,983,900 kilowatt hours, exceeding the designed power generation efficiency.
The sales income reached RM B 22,554,600 and operating profit of RM B 14,619,800. In the future, it will still bring long-term, stable
income and profits to the Company.
4. Real estate
The Company is currently developing three projects: the Fangda Town in Shenzhen Nanshan District, the Fangda Bangshen
project in Bao'an District, and the Phoenix Valley Fangda Center in Honggutan, Nanchang. The Fangda Town project has a gross
floor area of 212,400 square meters and an available-for-sale area of 93,086.25 square meters. As of the end of 2017, it has sold an
area of 70,561.08 square meters. In 2018, it plans to complete the sale of the remaining saleable area of 22,525.17 square meters, and
complete the supporting business development of 20,000 square meters and lease of 1# building of about 70,000 square meters. The
Fangda Bangshen project is a cooperative development project. The project occupies an area of 20,714.9 square meters. During the
reporting period, it is actively applying for establishment of the Shenzhen urban renewal project. The Phoenix Valley Fangda Center
in Honggutan, Nanchang is planned to start construction in 2018 and be sold in 2019. The project covers an area of approximat ely
16,608 square meters, a total construction area of 93,439 square meters, and a total gross floor area of 66,434 square meters. The
Company will focus on Guangdong, Hong Kong, and M acau Bay Area, focusing on the development of Shenzhen's urban renewal
projects. The development of products will be mainly office buildings, supporting businesses, security housing, or residential
properties. The Company has established a professional team to operate and manage the Company's businesses and properties.
For a detailed discussion of the Company’s business, please refer to “3. Analysis of Core Competencies” in this section of the
report and Chapter VI “Operation Discussion and Analysis”.
2. Major assets change
1. Major assets change
M ain assets M ajor change
Long-term equity investment increased 182.05% year-on-year, mainly due to the increase
Equity assets in investment in the current period by an associated company (Jiangxi Business
Innovative Property Joint Stock Co., Ltd.).
Fixed assets None
Intangible assets None
Construction in process None
The investment real estate increased by 575.20% year-on-year mainly due to the fact that
the property used for rental in Fangda Town was included in the investment real estate
Investment real estate
according to the actual construction cost when it reached the expected usable status, and
was subsequently measured by fair value.
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2017 Annual Report of China Fangda Group Co., Ltd.
The inventory decreased by 58.83% year-on-year, which was mainly due to the sales
carried out by the Fangda Plaza project in the current period, and the property used for
Inventory
rental in Fangda Town was included in the investment real estate according to the actual
construction cost when it reached the scheduled usable condition.
2. Major foreign assets
□ Applicable √ Inapplicable
3. Core Competitiveness Analysis
Whether the Company needs to comply with disclosure requirements of special industries
Yes
Property development and decoration industries
The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure
Guideline No.6 – Listed Companies Engaged in Decoration Business.
(1) Curtain wall system and material
1. Expertise and brand competitiveness
The Company actively responded to the national supply -side reforms and revitalized real economic policies, persisted in
innovation-driven development, and actively developed low-carbon energy-conserving curtain walls, solar photovoltaic curtain walls,
and fabricated curtain walls. The number of patents for the curtain wall systems and materials industry reached 418 (includin g 26
invention patents) with one software copyright and active innovation, leading to its brand advantages. It is one of the top end brands
of the domestic curtain wall system and material industry. FANGDA is a nationwide well-known trademark in China.
2. Focusing on the high-end market to edge out competitors
In the fierce market competition, the Company accurately positions the market in the field of high-end energy-saving curtain
wall systems with high requirements for technology and management, and focuses its resources on high-end curtain wall projects.
The construction of a number of curtain wall projects won the national "Luban Award", "Zhan Tianyou Civil Engineering Award",
"National Quality Engineering Award", "China Construction Engineering Decoration Award", "M agnolia" Award and "Customer
Satisfaction Project" awards, and won the title of "China's curtain wall industry's most competitive top 10" and so on. The Company
has built a leading brand and created a clear edge in the high-end curtain wall market.
3. Well-developed industry base landscape
Thanks to continued investment in facilities, the Company has established a national business landscape with Shenzhen as the
headquarters, Dongguan Songshanhu as the base in the south, Beijing in the north, Chengdu in the southwest and Shanghai and
Nanchang in the east. The Dongguan Songshanhu and Nanchang bases are the largest and most advanced curtain wall system and
material production bases in China and across the world, fueling the Company to increase its market share and competitiveness.
4. General solutions
The Company has integrated the design, production, management and engineering of curtain wall systems to enjoy
technological, cost, quality and service advantages.
(2) Rail transport equipment business
1. National development strategy
At present, the 13th Five-Year Plan for several provinces and cities has incorporated rail transit construction into key
development projects. With the implementation of major national strategies such as the Guangdong, Hong K ong, and M acao Bay
District, Xiong'an New District, and the ―Belt and Road‖ Initiative, the region has radiated into Southeast Asia, South Asia, Central
Asia, and West Asia, and has extended to Eastern Europe and North Africa with strong demand for infrast ructure construction and
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2017 Annual Report of China Fangda Group Co., Ltd.
interconnection. As the world's largest supplier of rail transit shielding door systems, the Company will also make full use of its
advantages in technology, brand, and service to further consolidate and increase its domestic market share, and actively participate in
rail transit construction in Guangdong, Hong Kong, M acau Bay and Xiong'an New District. The Company will vigorously expand
overseas markets, especially the ―Belt and Road‖ Initiative, maintain the continuity and stability of overseas orders, balance the
development of domestic and foreign markets, and continue to ―lead‖ the rail transit industry.
2. Technical advantage
Through continued independent innovation, the Company has developed the global leading metro screen door system with full
intellectual property right and broken the monopoly of overseas competitors. The Company has also compiled the Rail Transport
Station Screen Door Standard, which is the first of its kind in China. The standard was approved in April 2006 and was implemented
on M arch 1, 2007. As the first standard in the industry in China, the standard has played a key role in guiding the development of
China’s rail transport screen door industry and enabled the Company a dominant lead in the industry. Currently, the Company has
226 metro screen door patents, including 46 invention patents. The Company also has four computer software copyrights.
3. Brand equity
So far, the Company has undertaken railway screen door projects in more than 30 cities including Hong Kong, Singapore,
Kuala Lumpur of M alaysia and Noida of India. The Company’s subway screen doors have achieved a 60% coverage rate in cities
with metro in China. They have achieved first place in China’s rail transit market share, brand influence, patent ownership, standard
formulation, and professional maintenance services. The Company has become the largest railway screen door supplier in the
world.
4. Industry chain advantage
As the first company to enter the subway screen door industry in China, the Company's subway screen doors have reached to
more than 60% of the subway cities in China, and many domestic subway screen doors have entered the maintenance period. The
Company actively expands its industrial chain and takes the lead in the domestic market to provide metro maintenance services. The
Company has a natural advantage in this high-end service industry. Our screen door system are independently developed by us, thus
enabling us to provide prompt, overall, effective and standard maintenance services for our customers without other third parties. As
more and more subways are opened, the business volume will continue to increase.
During the reporting period, the Company signed the Yungui Station Door Purchase Contract" with Shenzhen BYD Supply
Chain M anagement Co., Ltd., and has signed contracted door products and related services for cloud-railway projects in 8 cities. The
Yungui project is one of the strategic directions for BYD Company's future development, and it is also a key point for BYD's efforts.
The cooperation between the company and BYD in the construction of the Yungui project has provided new development space for
the Company's rail transit industry and expanded the company's industry chain.
(3) New energy industry
The new energy business mainly comprises solar power PV application, PV construction and LED industry.
1. Technical advantage
With more than ten years’ experience in developing solar energy PV power generating curtain wall technology, the Company is
the earliest company that masters the intelligent property right in the designing, production and integration of solar energy PV curtain
wall systems and is a pioneer in the application of PV curtain wall technology.
2. Relation with other industries
Distributed solar power PV power generation is closely related to the Company’s existing businesses. M ost distributed solar
power PV systems are closely related to construction. M oreover, the Company has more than 10 years' experience in electrical
product integration. The Company also has more than 20 years’ experience in construction management and has the level-1
construction curtain wall engineering qualification and electrical installation engineerin g qualification.
(4) Real Estate
1. Shenzhen is located in the core area of Guangdong, Hong Kong and M acau Bay District, and the economy continues
growing. In recent years, Shenzhen has introduced a series of measures to limit house purchase. However, due to the limited supply
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2017 Annual Report of China Fangda Group Co., Ltd.
of land for development, it is still difficult to stop the rise in prices. Benefited from the rapid economic development of Shenzhen in
the core area of Guangdong, Hong Kong, and M acau Bay District, during the reporting period, the sales price of the Company’s
Fangda Town project has increased significantly over the previous year. It is expected that the real estate sales and property leasing
will continue to contribute profits to the Company in the future.
2. The Company is currently developing three projects: the Fangda Town in Shenzhen Nanshan District, the Fangda Bangshen
project in Bao'an District, and the Phoenix Valley Fangda Center in Honggutan, Nanchang. The Fangda Town project and Fangda
Bangshen project are located in Shenzhen, the core region of Guangdong, Hong Kong and M acau Bay District. The projects have
significant geographical advantages and great regional development potential. The Nanchang Fangda Center project is located in the
Phoenix Valley district of Honggutan New District, Nanchang with an outstanding river view. Phoenix Valley is an important part of
Honggutan New District in Nanchang. It is a business and office gathering place in Nanchang. The location of the project enjoys
significant advantages. There are fewer office and business apartments with first-class river view in the region. The project has
obvious competitive advantages.
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2017 Annual Report of China Fangda Group Co., Ltd.
Chapter 4 Operation Discussion and Analysis
1. Summary
In 2017, the Company closely focused on the annual target and the ―innovation‖ management theme, overcoming various
difficulties in the domestic industry market, reducing production capacity, strengthening environmental protection measures and
leading to price fluctuations of major raw materials, etc. All works were actively promoted, and operating performance reached new
heights, achieving quality and fast growth. During the reporting period, the Company realized an operating income of
RM B2,947,470,800, and the net profit attributable to the parent company's owners was RM B1,144,404,400, an increase of 63.97%
over the same period of the previous year. The operating cash flow was RM B557,833,100, a year-on-year increase of 19.78%. As of
the end of the reporting period, the company had a reserve of 4.064 billion yuan (excluding real estate sales).
The construction of Guangdong, Hong Kong, and M acao Bay District has been included in the Party's Nineteenth Congress
report and government work report. As an important engine of national economic development, Guangdong, Hong Kong, and M acau
Bay District is an important space carrier for the construction of world-class urban agglomerations and participation in global
competition. In the future, it will become the fourth largest city in the world with New York Bay, San Francisco Bay Area and Tokyo
Bay Area in Japan.
The Company is headquartered in Nanshan District, Shenzhen, a key area of Guangdong, Hong Kong, and M acau Bay and has
factories in Dongguan and Foshan in the Bay, which is conducive to the Company's active participation in the construction of
Guangdong, Hong Kong, and M acao Bay.
1. High-end curtain wall system and material business
When Guangdong, Hong Kong, and M acao Bay became the focus of much attention, t he Company took advantage of this rare
historical opportunity to make full use of the Company's technology, brand, and other advantages, and actively participate in the
construction of Guangdong, Hong Kong, and M acao Bay. Since 2017, in the Guangdong, Hong Kong, and M acau Bay, the Company
has won 22 high-end curtain wall projects, such as: Shenzhen International Convention and Exhibition Center, Shenzhen Vanke
Binhai Landmark Building, Shenzhen Zhongzhou Binhai Commercial Tower and Apartment, Shenzhen Bay Innovation and
Technology Center Project, Guangzhou The total amount of the Kairal Hub International Plaza Tower, the Guangzhou TCL Cloud
Computing Industrial Park (Phase II), the Jiangbo Long Technology Park of Zhongshan City, and the Venice Hotel Project of M acao,
etc., amounted to RM B 18,388,199,400, which accounts for 111.13% of the company's curtain wall system and material industry
sales revenue in 2017. The contract amount of the curtain wall project of the Shenzhen International Convention and Exhibition
Center, the largest convention and exhibition center in the world, reached RM B301,764,700, which won the Company an opportunity
to actively participate in the construction of the Guangdong, Hong Kong, and M acao Bay.
During the reporting period, the Company successfully completed Shenzhen Energy Building, Guangzhou Baosteel Building
Project, Hong Kong Chinese University (Shenzhen), Zhuhai R&F Yingkai Plaza, Hainan Heng Dahuahua Island, and Beijing by
further optimizing technologies and processes and strengthening on-site management. The completion and delivery of a large number
of highly challenging curtain wall projects such as Taihu Vanke, Chengdu World Financial Center, and Suzhou Center Plaza
reflected the Company’s strong compliance capabilities. Currently, the Company is an industry leader in terms of the design,
production and installation of high-end shaped curtain wall systems. As of the end of the reporting period, the Company's curtain
wall systems and materials industry had an order reserve of RM B 2,765,686,400, which accounts for 167.24% of the sales revenue of
the curtain wall system and material business in 2017, laying the foundation for the continued development of the Company's
high-end curtain wall and material business.
In order to meet the Company's needs for further development, the Company will continue to increase investment, expand
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2017 Annual Report of China Fangda Group Co., Ltd.
production capacity, meet market demand. In 2018, the Company will build Shanghai Songjiang production base, Chengdu Xinjin
production base, to increase production, increase income and sustained rapid development.
During the reporting period, the Beijing Yanqi Lake International Conference Project, undertaken by the Company, was again
the main venue for the 2017 ―Belt and Road‖ international cooperation summit after the 2014 APEC summit; the Xiamen
International Conference Center project undertaken by the Company was the main venue of the 2017 BRICS Leaders M eeting. The
main venue of the People's Conference attracted the attention of the entire world and made contributions to the country's foreign
exchange business, highlighting the extraordinary innovation capability and technical strength of Fangda as a premium supplier of
high-end curtain wall systems. Three curtain wall projects such as Shenzhen China CITIC Bank Building, Shenzhen M useum of
Contemporary Art and Urban Planning Exhibition Hall, Hexi District General Hospital (Hexi Children's Hospital) won the "Luban
Award" of China Construction Engineering; Shenzhen M eilin Center Plaza South, Shenzhen Alibaba The Baba Building curtain wall
project won the ―China Architectural Curtain Wall Excellence Project Award‖ and ―Guangdong Provincial Outstanding Building
Decoration Engineering Award‖; Shenzhen New Century Wenbo Building Curtain Wall Project won the ―My Favorite Curtain Wall
Project‖ Award; Vanke M arina Landmark Building and Vanke Yuncheng Phase III Building #9 won the ―Shenzhen Vanke 2017
Excellence Award‖. These honors highlighted the glory of ―Fangda‖ as the leading brand of high-end energy-saving curtain wall,
and also the best returns for customers' trust, further enhancing the equity, influence and competitiveness of Fangda's brand.
The Company will continue to exert its brand advantage, make full use of the brand ―Fangda‖, implement a different iated
market strategy, continue to deepen the main battlefield of Guangdong, Hong Kong, and M acao Bay, and form a Dongguan base, a
Shanghai base, a Chengdu base, and a Nanchang base nationwide, seize the opportunity to actively participate in the construct ion of
Guangdong, Hong Kong, M acao Bay, Xiong'an New District and Hainan Special Zone.
2. Rail transport equipment business
After years of innovation and development, the Company's subway screen door products rely on the advantages of brand,
intellectual property, and industry standards. The coverage rate of metro-operated cities in China has reached more than 60%, and the
market share has ranked first in China for many years in a row and has become the world's largest rail transit shielding door system
supplier. In 2017, Shenzhen Fangda Automatic System Co., Ltd. (hereinafter referred to as Fangda Automation), a fully -owned
subsidiary of the Company, won subway station platform screen door projects in Shenzhen subway line No.4 (phase III), No.6,
No.10 and No.20, Wuhan subway line No.11 east, No.2 south and No.7 south, Zhengzhou subway line No.5, Hohhot railway line
No.1, Shenyang subway line No.10, railway line from Hangzhou to Lin’an；screen door projects in cloud track projects in Xi’an,
Guilin, Bengbu, Guang’an, Shantou, Pingshan, Jining, and Anyang; and maintenance projects for Shenzhen subway line No.1, No.2
and No.5, Nanchang railway line No.2, Wuhan railway line No.2, Wuhan-Xianyang railway line and Tianjin subway line No.1.
During the reporting period, the Singapore M etro Tuas West Line, Dalian Line 1 Phase 2, Kunming Line 3, Nanchang Line 2, Hefei
Line 2, Nanning Line 2 and Xiamen Line 1 will be equipped by the Company’s subway screen doors. Seven subways were opened
and operated. As of the end of the reporting period, the Company's railway transportation business has an order reserve of RM B
1,299,240,200 (including an order reserve of RM B 791 million in Guangdong, Hong Kong, and M acau Bay), which is 382.81% of
the income from the Company's subway screen door business.
During the reporting period, the Company's rail transit screen door maintenance service revenue reached RM B 20,838,800, an
increase of 81% over the previous year. As more and more subways are opened and operated, the weight of maintenance services for
subway screen doors will continue to increase.
During the reporting period, the Company signed the Yungui St ation Door Purchase Contract" with Shenzhen BYD Supply
Chain M anagement Co., Ltd., and has signed contracted door products and related services for cloud-railway projects in 8 cities.
3. New energy industry
During the reporting period, photovoltaic power stations in Xuanfeng Town, Pingxiang Town, Jiangxi Province, and
photovoltaic power stations in the parks of Jiangxi Isuzu Automobile Co., Ltd. in Nanchang City and Dongguan Songshan Lake
Photovoltaic Power Plant all operated steadily with a total power generation capacity of 19,983,900 kilowatt hours, exceeding the
designed power generation efficiency. The sales income reached RM B 22,554,600 and operating profit of RM B 14,619,800. In the
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2017 Annual Report of China Fangda Group Co., Ltd.
future, it will still bring long-term, stable income and profits to the Company. In view of the better revenue situation of photovoltaic
power plants, the Company will expand the new energy photovoltaic industry business in accordance with relevant state policies and
in combination with the company's own situation.
4. Real estate
(1) Industry de velopment and impacts on the Company's future business and profitability
During the reporting period, the Company's real estate projects were mainly in Shenzhen. Shenzhen is located in the core area
of Guangdong, Hong Kong and M acau Bay, and the economy continues growing. In recent years, Shenzhen has introduced a series
of measures to limit house purchase. However, due to the limited supply of land for development, it is still difficult to stop the rise in
prices. Benefited from the rapid economic development of Shenzhen in the core area of Guangdong, Hong Kong, and M acau Bay,
during the reporting period, the sales price of the Company’s Fangda Town project has increased significantly over the previous year.
In 2018, approximately 78,000 square meters of office building of No. 1 building of Fangda Town Phase II will be fully completed,
accepted, and put into use. Apart from its own use, the Company has an area of approximately 70,000 square meters to earn rentals
and capital appreciation for holding purposes. According to the current accounting standards and the Company's accounting policies,
this part of the real estate will be measured at fair value, which will greatly increase the Company's operating performance and net
assets in 2018. It is expected that the real estate sales and property leasing will continue to contribute profits to the Company in the
future.
(2) Main business model, landscape, market position and competitiveness of the Company
The Company will focus on Guangdong, Hong Kong, and M acau Bay Area, focusing on the development of Shenzhen's urban
renewal projects. The development of products will be mainly office buildings, supporting businesses, security housing, or residential
properties. The Company has established a professional team to operate and manage the Company's businesses and properties.
The Company is currently developing three projects: the Fangda Town in Shenzhen Nanshan District, the Fangda Bangshen
project in Bao'an District, and the Phoenix Valley Fangda Center in Honggutan, Nanchang. The Fangda Town project is located in
the Dasha River Innovation Corridor in Nanshan District. It is an innovation center in the core area of Guangdong, Hong Kong, and
M acau Bay. The location of the project enjoys significant advantages. Fangda Town is a key project in Shenzhen and it is the first
group of comprehensive 5A-class office buildings for industrial and commercial reform in Nanshan District. The facilities are
well-supported. There is little competition in the area and units of the project were sold quickly. The Fangda Bangshen Project is
located in Fuhai Street, Bao'an District, Shenzhen, and is only 3 kilometers away from the International Convention and Exhib ition
Center under construction in Shenzhen. It is p lanned to be used for industrial housing, ancillary apartments, and commercial
development with great potential. The Phoenix Valley Fangda Center project is located in the south of Huanghe Road in the Phoenix
Valley of Honggutan New District, Nanchang, and west of the Qijiang River North Avenue with an excellent river view. Phoenix
Valley is an important part of Honggutan New District in Nanchang. It is a business and office gathering place in Nanchang.
(3) Land reserve
In 2017, the company newly signed the Fangda Bangshen project. The Fangda Bangshen project is a cooperative development
project. The project occupies an area of 20,714.9 square meters. During the reporting period, it is actively applying for est ablishment
of the Shenzhen urban renewal project. The Phoenix Valley Fangda Center project in Honggutan, Nanchang is under construction as
planned and is planned to be sold in 2019.
At present, the Company is actively and orderly progressing several key renovation projects in Shenzhen Nanshan District ,
Longhua District and Longgang District. The land area of these projects is about 200,000 square meters, and the project is mainly
updated for residential, social housing and industrial housing. During the reporting period, the Company did not hold other
development projects and land to be developed except for the Shenzhen Fangda Town project, the Shenzhen Fangda Bangshen
project and the Nanchang Phoenix Valley Fangda Center project.
(4) Real estate development
20
2017 Annual Report of China Fangda Group Co., Ltd.
Project under Interests Starting time Floor area Building are (m2) Finished building Estimated total Invested amount
construction percentage (m2) are (m2) investment (in (in RM B100
RM B100 million)
million)
Fangda 100% M ay. 2014 35,397.6 212,400 139,258.30 25 20.65
Town
(5) Project sales in the report period
Project under Interests percentage Sellable area (m2) Sold area (m2)
construction
Fangda Town 100% 93,086.25 70,561.08
(6) Real estate lease
Form City Interests percentage Floor area (m2) Lease ratio
Office building Shenzhen 100% 26,040.55 68.45%
Office building Jiangxi 100% 5,387.50 3.42%
Plant Jiangxi 100% 44,771.56 74.45%
Commercial Ningbo 100% 96.75 100%
residence
(7) Financing in the report period
Financing Currency Balance (in RM B) Financing cost (interest rate) Due date Pledge
source /guarantor
Bank loan RM B 1,093,978,153.39 Interval rate, between 10% 2023-2-11 Pledged by equity in
below the benchmark Fangda Real Estate Co.,
interest rate and 60% above Ltd. and guaranteed by the
the benchmark interest rate Company Guarantee
on the withdrawal date
(8) Development strategy and operation plan in the next year
In the future, the Company will focus on real estate and urban renewal projects in the core areas of Guangdong, Hong Kong,
and M acau Bay, and continue to grow and strengthen the Company's real estate business. In 2018, the Company will complete the
sales of 22,525.17 square meters of the remaining saleable area of Fangda Town Phase I project, complete the investment promotion
of 20,000 square meters of supporting business units; and complete approximately 78,000 square meters of office building #1 o f
Fangda Town Project. The building is completed and accepted. In addition to its own use, the Company has an area of approximately
70,000 square meters to be leased. For the purpose of holding, according to the current accounting standards and the Company’ s
accounting policies, this part of the property will be measured at fair value, which will greatly increase th e Company's operating
performance and net assets in 2018. The Company will start the construction of the Phoenix Valley Fangda Center project in
Honggutan, Nanchang with a site area of approximately 16,608 square meters, a total construction area of 93,439 square meters, and
a total planned building area of 66,434 square meters; the preparatory work for Shenzhen Fangda Bangshen project will be actively
promoted. The Company will focus on key update projects in Shenzhen Nanshan District, Longhua District, Longgang District. It is
expected that the company’s real estate sales and property leasing will continue to contribute profits to the company in the future.
(9) Bank mortgage loan guarantee provided for commercial housing purchasers
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2017 Annual Report of China Fangda Group Co., Ltd.
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 hous ing
ownership certificates to banks. By December 31, 2017, the Company has provided periodic guarantee of RM B396 million.
(10) Property management
In 2017, the wholly-owned subsidiary Fangda Property passed the ISO9001:2015 quality management system certification. It
took over management of Shenzhen Fangda Building and Fangda Dongguan Songshan Lake Base Property and took over the
management of Shenzhen Fangda Town. The company will further enhance its management capabilities, strengthen its service
quality, and provide various property management services.
5. Innovation
During the reporting period, the Company continued to uphold the concept of ―technology -based, innovation-based‖, and
applied for a total of 27 new patents, including 6 invention patents and 21 utility model patents. As of the end of the reporting period,
the Company obtained a total of 781 patents (of which 107 were invention patents), 4 international PCT patents, 8 software
copyrights, and the total number of patents ranked first in the nation's industry. The Company has participated in the preparation of
37 national, industry and corporate standards. During the reporting period, the Company won the Outstanding Contribution Award of
the Shenzhen Quality and Powerful City Award, the Shenzhen Intellectual Property Indus Gold Award, the Best Creative Intelligence
Award (the Trademark Award), the Company's research and production of ―blue and white porcelain aluminum veneer‖ and
―freeform aluminum alloy sun visors" won the key new product prize of Jiangxi Province.
During the reporting period, the Chengdu company was identified as a national high-tech enterprise. At this point, the Company
has a total of five subsidiaries of state-level high-tech enterprises.
During the reporting period, the Company completed a total of 16 science and technology projects, including 14 new product
development projects and 2 technological transformation projects. The Company completed 62 government awards or government
funded declarations.
The Company will continue to explore the transition from "manufacturing + engineering" to "informational technology services
+ smart manufacturing" company, making full use of artificial intelligence, Internet +, robots and other ideas and methods, and work
hard to achieve high-end curtain wall, aluminum plate, subway screen door assembly system and spare parts standardized to ensure
quality and improve efficiency. In addition, the Company's self-developed online upgrade system has enabled the use of screen door
control systems in overseas markets to be remotely upgraded through domestic control centers, demonstrating the Company's high
technological innovation capabilities.
6. Awards
As of the date of disclosure of this report, the Company won the Top 500 Chinese Listed Company Awards, the Best Employ er
Enterprise Award in China, the Goodwill Demonstration Enterprise in Guangdong Province, the Contracted and Credited Enterpris e
in Guangdong Province, the Top 100 Private Enterprises in Guangdong, the Top 500 Enterprises in Guangdong, and Guangdong Top
100 M anufacturing Companies, Shenzhen Famous Brands, Shenzhen Top 100 Enterprises, Shenzhen Advanced Collective, Shenzhen
Outstanding Corporate Social Responsibility, Shenzhen Quality Outstanding Contribution Award, Shenzhen Intellectual Property
Indus Gold Award - Best Creative Award (Trademarks Awards), Fangda Journal won the Shenzhen 2017 Outstanding Enterprise
Newspaper Award. M r. Xiong Jianming, chairman and president of the Company, was elected as the representative of the 13th
National People's Congress and the most responsible entrepreneur in China.
M ultiple curtain wall projects undertaken by the wholly -owned subsidiary Fangda Jianke won the "Luban Prize" (National
Quality Project) for China Construction Engineering, the Chinese Curtain Wall Project , the Chinese Curtain Wall, and the
"M agnolia" Award for Shanghai Construction Project (High Quality of the City), Guangdong Province Construction Engineering
Goldsmith Award, Guangdong Provincial Construction Engineering Quality Award, Guangdong Provincia l Outstanding Building
Decoration Engineering Award, Shenzhen Jinniu Award, Shenzhen Jinpeng Award, and the Company's chief quality officer An
Yajun was named one of the Shenzhen's Best Quality officers.
The wholly-owned subsidiary Fangda Automation won the Best Urban Rail Transit Platform Door System Award and the
22
2017 Annual Report of China Fangda Group Co., Ltd.
Shenzhen Excellent QCC Achievement Trial Excellence Award; the General M anager Xiong Haigang was named one of Shenzhen's
100 Industry Leaders, and two employees, Huang Liangjiang and Liu Yi, were respectively awarded Review Shenzhen Quality
Craftsman and Shenzhen Excellent Quality M anager.
The wholly-owned subsidiary Fangda Jiangxi New M aterial was awarded the title of Jiangxi Provincial M anufacturing
Individual Champion, advanced enterprise in Nanchang High-tech Zone, aluminum veneer products won the outstanding quality
award in the metal composite industry, and general manager Huang Jing was awarded the 2017 Nanchang High-tech Zone
outstanding entrepreneur.
The wholly-owned subsidiary Fangda Real Estate was rated as the 2017 Shenzhen Real Estate Development Industry
Development Potential Enterprise and Shenzhen Nanshan Top 100 Taxpayer Enterprise.
The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure
Guideline No.3 – Listed Companies Engaged in Property Development.
2. Main business analysis
1. Summary
For details see M anagement Discussion and Analysis – 1. Profile
2. Income and costs
(1) Turnover composition
In RM B
2017 2016
Proportion in Proportion in YOY change (% )
Amount Amount
operating costs (%) operating costs (%)
Total turnover 2,947,470,813.58 100% 4,203,866,173.72 100% -29.89%
Industry
M etal production 1,653,688,831.23 56.11% 2,042,947,811.82 48.60% -19.05%
Railroad industry 339,399,859.01 11.51% 327,766,817.78 7.80% 3.55%
New energy industry 21,848,200.20 0.74% 29,742,249.70 0.71% -26.54%
Real estate 911,195,066.07 30.91% 1,784,378,167.91 42.45% -48.93%
Others 21,338,857.07 0.72% 19,031,126.51 0.45% 12.13%
Product
Curtain wall system
1,653,688,831.23 56.11% 2,042,947,811.82 48.60% -19.05%
and materials
Subway screen door
339,399,859.01 11.51% 327,766,817.78 7.80% 3.55%
and service
PV power generation 21,848,200.20 0.74% 29,742,249.70 0.71% -26.54%
23
2017 Annual Report of China Fangda Group Co., Ltd.
products
Real estate sales 911,195,066.07 30.91% 1,784,378,167.91 42.45% -48.93%
Others 21,338,857.07 0.72% 19,031,126.51 0.45% 12.13%
District
In China 2,915,698,936.74 98.92% 4,177,161,780.92 99.00% -30.20%
Out of China 31,771,876.84 1.08% 26,704,392.80 1.00% 18.98%
(2) Industries, products or districts that take more than 10% of the Company’s business turnover or profit
√ Applicable □ Inapplicable
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.
In RM B
Year-on-year Year-on-year Year-on-year
Turnover Operation cost Gross margin change in change in change in gross
operating revenue operating costs margin
Industry
M etal production 1,653,688,831.23 1,471,217,611.24 11.03% -19.05% -15.05% -4.19%
Real estate 911,195,066.07 273,925,459.18 69.94% -48.93% -56.78% 5.46%
Railroad industry 339,399,859.01 246,087,918.18 27.49% 3.55% -2.08% 4.16%
Product
Curtain wall
system and 1,653,688,831.23 1,471,217,611.24 11.03% -19.05% -15.05% -4.19%
materials
Real estate sales 911,195,066.07 273,925,459.18 69.94% -48.93% -56.78% 5.46%
M etro screen
339,399,859.01 246,087,918.18 27.49% 3.55% -2.08% 4.16%
door
District
In China 2,915,698,936.74 1,950,559,930.32 33.10% -30.20% -24.11% -5.37%
M ain business statistics adjusted in the recent one year with the statistics criteria adjusted in the report period
□ Applicable √ Inapplicable
Different business types of the Company
Business type Turnover Operation cost Gross margin
Curtain wall system and
1,653,688,831.23 1,471,217,611.24 11.03%
materials
24
2017 Annual Report of China Fangda Group Co., Ltd.
Whether the Company runs business through the Internet
□ Yes √ No
Whether the Company runs overseas projects
□ Yes √ No
In RM B
M ain business statistics adjusted in the recent one year with the statistics criteria adjusted in the report period
□ Applicable √ Inapplicable
(3) The physical sales revenue is high the labor service revenue
□ Yes √ No
(4) Performance of signed major sales contracts in the report period
√ Applicable □ Inapplicable
Yes
Property development and decoration industries
The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure
Guideline No.6 – Listed Companies Engaged in Decoration Business.
Project amount Cumulative recognized income Amount of unfinished part
Unfinished project 6,098,883,021.38 3,505,054,048.42 2,593,828,972.96
Income Cumulative Balance of
Construction Completion Payment
Project Project amount recognized in recognized accounts
period percentage collection
this period income receivable
Shenzhen
Hanjing
Financial 337,046,144.59 2015 - 2018 73.83% 153,923,117.26 240,397,211.73 182,436,614.80 66,854,058.22
Center curtain
wall project
Other note
□ Applicable √ Inapplicable
Accumulative Balance of unpaid
Accumulative
recognized gross Estimated loss Settled amount amount of finished
occurred costs
margin project
Finished but not
6,409,627,651.24 939,475,640.14 7,205,830,470.80 143,272,820.58
settled project
Other note
□ Applicable √ Inapplicable
25
2017 Annual Report of China Fangda Group Co., Ltd.
(5) Operation cost composition
The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure
Guideline No.6 – Listed Companies Engaged in Decoration Business.
M ain business cost
In RM B
2017 2016
YOY
Proportion in Proportion in
Cost composition Business type change
Amount operating costs Amount operating costs
(% )
(%) (%)
Curtain wall system
Raw materials 983,487,997.36 66.85% 1,124,832,846.21 64.95% 1.90%
and materials
Installation and Curtain wall system
334,781,910.86 22.76% 383,996,594.86 22.17% 0.59%
engineering costs and materials
Curtain wall system
Labor cost 76,062,568.69 5.17% 85,807,796.60 4.95% 0.22%
and materials
Industry
In RM B
2017 2016
YOY
Proportion in Proportion in
Industry Items change
Amount operating costs Amount operating costs
(% )
(%) (%)
M etal production Raw materials 983,487,997.36 66.85% 1,124,832,846.21 64.95% 1.90%
Installation and
M etal production 334,781,910.86 22.76% 383,996,594.86 22.17% 0.59%
engineering costs
M etal production Labor cost 76,062,568.69 5.17% 85,807,796.60 4.95% 0.22%
Construction and
Real estate 144,887,293.21 52.89% 342,870,138.09 54.13% -1.24%
installation cost
Real estate Land cost 71,670,682.41 26.16% 187,932,173.82 29.67% -3.51%
Real estate Loan interest 10,433,871.29 3.81% 27,957,948.15 4.41% -0.60%
Real estate Labor cost 2,950,138.93 1.08% 4,338,667.13 0.68% 0.40%
(6) Change to the consolidation scope in the report period
√ Yes □ No
1. Shenzhen Hongjun Investment Co., Ltd. and Fangda Australia Co., Ltd. were newly established in this period. The two companies
are consolidated in this period.
2. In this period, the indirect controlled subsidiary Jiangxi Fangda New Aluminum Co., Ltd. was liquidated, and at the same time, the
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2017 Annual Report of China Fangda Group Co., Ltd.
entire equity of Guangdong Fangda SOZN Lighting Co. was disposed, leading to loss in the control. Therefore, the two subsidiaries
are moved out of the consolidation scope in this period.
(7) Major changes or adjustment of business, products or services in the report period
□ Applicable √ Inapplicable
(8) Major sales customers and suppliers
M ain customers
Total sales amount to top 5 customers (RM B) 522,731,597.62
Proportion of sales to top 5 customers in the annual sales 17.73%
Percentage of sales of related parties in top 5 customers in
0.00%
the annual sales
Information of the Company's top 5 customers
No. Customer Sales (RM B) Percentage in the annual sales
1 No.1 158,540,810.78 5.38%
2 No.2 112,330,859.57 3.81%
3 No.3 91,119,452.06 3.09%
4 No.4 80,884,372.36 2.74%
5 No.5 79,856,102.86 2.71%
Total -- 522,731,597.62 17.73%
Other information about major customers
□ Applicable √ Inapplicable
M ain suppliers
Purchase amount of top 5 suppliers (RM B) 411,128,701.72
Proportion of purchase amount of top 5 suppliers in the total
23.91%
annual purchase amount
Percentage of purchasing amount of related parties in top 5
0.00%
customers in the annual purchasing amount
Information of the Company’s top 5 suppliers
No. Supplier Purchase amount (RM B) Percentage in the annual purchase amount
1 No.1 154,779,367.29 9.00%
2 No.2 87,210,056.50 5.07%
3 No.3 64,393,833.09 3.74%
4 No.4 56,995,928.49 3.31%
5 No.5 47,749,516.35 2.78%
27
2017 Annual Report of China Fangda Group Co., Ltd.
Total -- 411,128,701.72 23.91%
Other information about major suppliers
□ Applicable √ Inapplicable
3. Expenses
In RM B
YOY change
2017 2016 Notes
(% )
Sales expense 61,063,948.40 59,273,046.14 3.02%
Administrative
152,816,680.30 171,922,091.39 -11.11%
expense
Financial M ainly due to stopping capitalization of interest
67,058,846.06 28,255,397.43 137.33%
expenses expense of the phase I of the Fangda Town project
4. R&D investment
√ Applicable □ Inapplicable
Over the years the Company has been adhering to the "technology -based, innovation as the source" business philosophy,
independent innovation ability and technical level have remained the industry leader. In order to continue to maintain its le ading
technological strength and enhance its product market competitiveness, during the reporting period, the Company newly applied for
27 patents, including 6 invention patents and 21 utility model patents. As of the end of the reporting period, the Company obtained a
total of 781 patents (of which 107 were invention patents), 4 international PCT patents, 8 software copyrights, and the total number
of patents ranked first in the nation's industry. The Company has participated in the preparation of 37 national, industry and corporate
standards. During the reporting period, the Company completed a total of 16 science and technology projects, including 14 new
product development projects and 2 technological transformation projects. The Company completed 62 government awards or
government funded declarations. During the reporting period, the Company won the Outstanding Contribution Award of the
Shenzhen Quality and Powerful City Award, the Shenzhen Intellectual Property Indus Gold Award, the Best Creative Intelligence
Award (the Trademark Award), the Company's research and production of ―blue and white porcelain aluminum veneer‖ and
―freeform aluminum alloy sun visors" won the key new product prize of Jiangxi Province.
R&D investment
2017 2016 Change
R&D staff number 400 459 -12.85%
R&D staff percentage 18.60% 19.54% -0.94%
R&D investment amount (RM B) 112,793,075.49 113,321,489.31 -0.47%
Investment percentage in operation turnover 3.83% 2.70% 1.13%
Capitalization of R&D investment amount
0.00 0.00 0.00%
(RM B)
Percentage of capitalization of R&D 0.00% 0.00% 0.00%
28
2017 Annual Report of China Fangda Group Co., Ltd.
investment in the R&D investment
Reason for the increase in the percentage of R&D investment in the business turnover
□ Applicable √ Inapplicable
Explanation of the increase in the capitalization of R&D investment
□ Applicable √ Inapplicable
5. Cash flow
In RM B
Items 2017 2016 YOY change (% )
Sub-total of cash inflow from business
3,549,895,018.15 3,711,200,293.75 -4.35%
operations
Sub-total of cash outflow from business
2,992,061,872.42 3,245,483,218.83 -7.81%
operations
Cash flow generated by business operations, net 557,833,145.73 465,717,074.92 19.78%
Sub-total of cash inflow generated from
11,213,677,450.42 575,207,720.42 1,849.50%
investment
Subtotal of cash outflows 11,602,815,885.41 686,658,608.57 1,589.75%
Cash flow generated by investment activities,
-389,138,434.99 -111,450,888.15 249.16%
net
Subtotal of cash inflow from financing
978,503,029.59 2,112,174,073.02 -53.67%
activities
Subtotal of cash outflow from financing
1,149,248,335.73 1,780,430,997.90 -35.45%
activities
Net cash flow generated by financing activities -170,745,306.14 331,743,075.12 -151.47%
Net increase in cash and cash equivalents -4,539,039.85 688,085,331.62 -100.66%
Explanation of major changes in related data from the same period last year
√ Applicable □ Inapplicable
Cash inflows and outflows from investing activities increased significantly from the same period last year, mainly due to the rolling
use of idle funds to purchase wealth management products during the current period.
Explanation of major difference between the cash flow generated by operating activities and the net profit in the year
√ Applicable □ Inapplicable
During the reporting period, the difference between the net cash flow of operating activities of the company and the net profit of the
year was mainly due to the fact that the changes in fair value did not generate cash flow during the current period.
3. Non-core business analysis
√ Applicable □ Inapplicable
In RM B
29
2017 Annual Report of China Fangda Group Co., Ltd.
Amount Profit percentage Reason Whether continuous
M ainly due to the transfer of shares of
Fangda SOZN during the current
period, the difference between the
equity obtained from disposal of
Investment income 102,891,113.42 7.22% equity and the sum of net assets and No
goodwill that the former subsidiary’s
continuing calculation from the date of
purchase was calculated based on the
original shareholding ratio.
It is mainly due to changes in fair
Gain/loss caused by value arising from follow-up
changes in fair 892,408,648.26 62.63% measurement of fair value of No
value commercial real estate of Fangda
Plaza project.
M ainly bad debt provision
Assets impairment 58,879,269.89 4.13% Yes
corresponding to accounts receivable
Non-operating
8,382,787.23 0.59% M ainly waste disposal income No
revenue
Non-business
8,073,399.54 0.57% M ainly due to donations No
expenses
4. Assets and liabilities
1. Major changes in assets composition
In RM B
End of 2017 End of 2016
Change
Proportion in Proportion in Notes
Amount Amount (% )
total assets total assets
1,180,398,479. 1,095,229,837.
M onetary capital 15.48% 16.14% -0.66%
51 90
Account 1,920,372,426. 2,342,929,628.
25.18% 34.52% -9.34%
receivable 16 14
This is mainly due to the sales of
Fangda Plaza project realized in the
current period, and the fact that the
819,610,960.6 1,990,621,059.
Inventory 10.75% 29.33% -18.58% properties used for renting in Fangda
7 27
Town will be included in the
investment real estate according to the
actual construction costs when they
30
2017 Annual Report of China Fangda Group Co., Ltd.
reach the expected usable status.
The main reason is that the property
used for rent in Fangda Town will be
included in the investment real estate
Investment real 2,253,794,404.
29.56% 333,795,631.30 4.92% 24.64% according to the actual construction
estate 55
cost when it reaches the expected
usable state, and will be subsequently
measured by fair value.
Long-term share
34,142,055.62 0.45% 12,105,030.68 0.18% 0.27%
equity investment
468,118,279.1
Fixed assets 6.14% 506,819,266.38 7.47% -1.33%
8
Construction in
2,668,198.62 0.03% 2,537,725.36 0.04% -0.01%
process
616,000,000.0
Short-term loans 8.08% 591,000,000.00 8.71% -0.63%
0
893,978,153.3
Long-term loans 11.72% 922,169,568.24 13.59% -1.87%
9
2. Assets and liabilities measured at fair value
√ Applicable □ Inapplicable
In RM B
Accumulative
Gain/loss changes in fair
Impairment Amount
Opening caused by value Amount sold in Closing
Items provided in the purchased in
amount changes in fair accounting into the period amount
period the period
value the income
account
Financial assets
1. Financial
assets measured
at fair value
with variations
accounted into
0.00 0.00 0.00 0.00 0.00 0.00 0.00
current income
account
(excluding
derivative
financial assets)
2. Derivative 2,232,200.00 2,371,344.29 0.00 0.00 0.00 2,232,200.00 0.00
31
2017 Annual Report of China Fangda Group Co., Ltd.
financial assets
3. Sellable
0.00 0.00 0.00 0.00 0.00 0.00 0.00
financial assets
Subtotal 2,232,200.00 2,371,344.29 0.00 0.00 0.00 2,232,200.00 0.00
Investment real 1,492,278,85
303,090,562.62 878,155,120.90 11,675,404.61 0.00 0.00 0.00
estate 9.69
1,492,278,85
Total 305,322,762.62 882,897,809.48 11,675,404.61 0.00 0.00 2,232,200.00
9.69
Financial
0.00 0.00 0.00 0.00 0.00 0.00 159,000.00
liabilities
M ajor changes in the assets measurement property of the Company in the report period
□ Yes √ No
3. Right restriction of assets at the end of the period
Items Closing book value Reason
M onetary capital 249,112,943.96 保证金及专户存款
Fixed assets 52,839,273.10 Loan by pledge
Investment real estate 307,321,568.00 Loan by pledge
100% stake in Fangda Property
Development held by the 200,000,000.00 Loan by pledge
Company
Total 809,273,785.06
5. Investment
1. General situation
□ Applicable √ Inapplicable
2. Major equity investment in the report period
□ Applicable √ Inapplicable
3. Major non-equity investment in the report period
□ Applicable √ Inapplicable
32
2017 Annual Report of China Fangda Group Co., Ltd.
4. Financial assets investment
(1) Securities investment
□ Applicable √ Inapplicable
The Company made no investment in securities in the report period
(2) Derivative investment
√ Applicable □ Inapplicable
In RM B10,000
Proporti
on of
closing
investm Actua
Derivati Impairm ent l
Initial Amount Closing
ve Related Amount ent amount gain/l
Relation Initial Start investm sold in investm
investm transacti Type End date in this provisio in the oss in
ship amount date ent this ent
ent on period n (if closing the
amount period amount
operator any) net report
assets in period
the
report
period
Shangha
Shanghai
i Futures 12,144.6 732.4
None No aluminu 6,220.78 12.09.16 28.02.18 6,220.78 6,075.08 151.25 0.05%
Exchang 1 3
m
e
12,144.6 732.4
Total 6,220.78 -- -- 6,220.78 6,075.08 151.25 0.05%
1 3
Capital source Self-owned fund
Lawsuit (if any) None
Disclosure date of derivative
investment approval by the Board of 31.10.17
Directors (if any)
Disclosure date of derivative
investment approval by the
Shareholders’ M eeting (if any)
Risk analysis and control measures To prevent the risk of fluctuation of raw material prices, the Company adopted the
for the derivative holding in the report aluminum futures exchanged at the domestic futures exchange to provide hedgin g for
period (including without limitation aluminum as a raw material for the Company. The Company has set up and implemented the
market, liquidity, credit, operation and Provincial Regulations on China Fangda Group Domestic Futures Hedging to prevent risks.
33
2017 Annual Report of China Fangda Group Co., Ltd.
legal risks)
Changes in the market price or fair
value of the derivative in the report
period, the analysis of the derivative’s
Fair value of derivatives are measured at open prices in the futures market
fair value should disclose the method
used and related assumptions and
parameters.
M aterial changes in the accounting
policies and rules related to the
None
derivative in the report period
compared to last period
Opinions of independent directors on
the Company’s derivative investment None
and risk controlling
5. Use of raised capital
√ Applicable □ Inapplicable
(1) Overview
√ Applicable □ Inapplicable
In RM B10,000
Amount of
Accumulat
raised Proportion
ive amount Amount of
Total capital of of raised Total
Total Total of raised Use plan raised
Year of accumulati which the capital of accumulati
M ethod of amount of amount capital of of retained capital not
fund ve raised purpose which the ve raised
fund raising the raised used in which the fund from used in
raising capital was purpose capital
capital this period purpose financing more than
used changed in has been used
has been two years
the report changed
changed
period
Private
2016 45,986.92 25,782.75 45,986.92 23,244.4 23,244.4 50.55% 0 None 0
issuing
Total -- 45,986.92 25,782.75 45,986.92 23,244.4 23,244.4 50.55% 0 -- 0
Notes to use of raised capital
34
2017 Annual Report of China Fangda Group Co., Ltd.
I. Use of raised capital
(1) Amount of funds actually raised and time for funds to be available
The Company received the Reply to the Non-public Share Issuance of Fangda China Group Co., Ltd. (CSRC License [2016]
No.825) to allow the Company to issue 32,184,931 shares at the price of RM B14.60/share. A total of RM B469,899,992.60 will be
raised. The net amount will be RM B459,869,200 after the issuance expense of RM B10,030,800 is deducted. The fund will be
received on July 15, 2016. Grant Thornton (limited liability partnership) will verify the fund and issue the Capital Verification
Report [Grant Thornton Verification (2016) 350ZA0055]. The Company will open a special account to save the fund.
2. Use of raised capital
1. The amount used in the previous year as of December 31, 2016, the accumulated RM B72,072,500 was directly invested in
the raised investment projects, permanent supplementary liquidity was RMB129,969,200, and temporary supplementary liquidity
was RM B200,000,000, and temporary investment in wealth management products is RMB41,000,000. The amount not yet used
was RM B16,827,500 (excluding the accumulative interest deducted from the special account storage net RM B593,300).
2. This year's amount of use and current balance in 2017, the Company's use of funds raised by the Company: the Company
directly invested raised funds of RM B25,853,500 in projects to be funded by raised fund, the unused funds and completed projects
balance funds totaled 232,444,000 million (not including interest income, net income of financial management and handling fees
were RM B1,163,900) permanent replenishment of working capital. In summary, as of December 31, 2017, a total of RM B
97,456,000 has been invested, supplemented with circulating funds of RM B 129,699,200, and the balance of unused funds and
completed projects has been permanently supplemented with circulating funds of RM B 232,444,000. There is no unused amount.
2. M anagement of raised capital
2. M anagement of raised capital
M anagement of raised fund (1) the Company has formulated the Regulations for M anagement Raised Fund to comply with
related regulations and protect investors’ interests. The Regulations has been reviewed and passed at the 22 nd meeting of the 7th
Board of Directors held on July 29, 2016. The Company started to manage the raised fund in the special account from July 2016
and signed the Three Party Supervision Agreement for the Raised Fund with the deposit bank to regulate the use and management
of the raised fund. By 31.12.17, the Company has strictly complied with the agreement in using and depositing the raised fund.
(2) Special fund storage for raised funds
as of December 31, 2017, the Company’s
special fund-raising accounts have been
cancelled. The details are as follows: Account
Deposit bank Bank account type Cancelling date
Special
CITIC Bank, Shenzhen OCT Sub-branch 8110 3010 1520 0104 050 account 2017-5-17
Special
CCB, Shenzhen OCT Sub-branch 4425 0100 0007 0000 0304 account 2017-4-21
China M erchants Bank, Shenzhen Nanshan Special
Sub-branch 7559 3103 9910 803 account 2017-4-27
(2) Promised raised-capital-based projects
√ Applicable □ Inapplicable
In RM B10,000
35
2017 Annual Report of China Fangda Group Co., Ltd.
If
Investme Date
investme Promised Accumul
Project promised to be nt when the Whether Any
nt project total Adjusted Investme ative Profit
invested with the raised progress project the major
is investme total nt in the investme realized
capital and investment by the become estimate change in
changed nt of the investme report nt by the in the
of the excessive raised end of the useable profit is the
(includin raised nt (1) period end of the period
capital period (3) as realized feasibility
g partial capital period (2)
＝(2)/(1) proposed
change)
Promised investment projects
1. Jiangxi Pingxiang
Luxi 13M Wp
No 10,898 6,750.35 1,700 6,750.35 100.00% 28.06.16 994.15 Yes No
distributed PV power
plant project
2. Jiangxi Pingxiang
Xiangdong 20M Wp Inapplica
Yes 16,800 201.23 201.23 100.00% Yes
distributed PV power ble
plant project
3. Phase I of the
Jiangxi Nanchang
Isuzu Automobile
parking lot roof No 3,612 2,794.02 838.35 2,794.02 100.00% 08.05.16 363.8 Yes No
6.3M Wp distributed
PV power generation
project
4. Phase II of the
Jiangxi Nanchang
Isuzu Automobile
Inapplica
parking lot roof Yes 1,680 0.00% Yes
ble
6.3M Wp distributed
PV power generation
project
5. Replenishing Inapplica
No 12,996.92 36,241.32 23,244.4 36,241.32 100.00% No
working capital ble
Subtotal of promised
-- 45,986.92 45,986.92 25,782.75 45,986.92 -- -- 1,357.95 -- --
investment projects
Investment of excessive raised capital
None
Total -- 45,986.92 45,986.92 25,782.75 45,986.92 -- -- 1,357.95 -- --
Reason or situation that As the national photovoltaic power generation policy has undergone major changes and the expected
not on schedule (on revenue has decreased, the Company was reviewed and passed on the 17th and the 22nd Board of
specific project) Directors of the Seventh Board of Directors and the 2016 Annual General M eeting on M arch 17, 2017 and
36
2017 Annual Report of China Fangda Group Co., Ltd.
April 11, 2017, respectively, the "Proposal on Termination of Partially Raised Capital Investment Projects
and the Permanent Supplement of Working Capital to Non-Used Partially Raised Funds" and "Proposal on
Permanent Supplement of Working Capital to the Surplus Funds of Raised Capital Projects Completed by
Investment", decided to terminate the construction of Jiangxi Province. The 20M Wp distributed
photovoltaic power generation project in Xiangdong District of Pingxiang City and the second phase of the
6.3M Wp distributed photovoltaic power generation project in the roof of the Isuzu M otor Park in
Nanchang City, Jiangxi Province. The unused funds raised from the two projects will be used to
permanently replenish liquidity until the company considers it necessary.
Notes to major changes
National PV power generation policies have changed substantially, lowering the estimated profits.
in project feasibility
Amount, purpose and Inapplicable
use of excessive raised
capital
Changes in Inapplicable
implementation place
of investment funded
by raised capital
Applicable
Occurred in the report period
Adjustment of the On M arch 17, 2017 and April 11, 2017, the Company held the 26 th meeting of the 7th Board of Directors
implementation way of and 2016 General Shareholders’ M eeting to review the Proposal of Terminating Part of the Raised Fund
investment funded by and Using the Residual Raised Fund to Permanently Replenish the Working Capital and Proposal of Using
raised capital the Saved Fund of Finished Projects to Permanently Replenish the Working Capital. The balance of raised
fund and surplus fund of completed projects of RM B233,607,900 was used to permanently replenish the
working capital this year.
Applicable
Where the self-raised funds were invested in advance to raise funds for investment projects, they were
verified by the Grant Thornton (Special General Partnership) and issued a ―prepaid capital investment in
Initial use of raised advance with self-raised funds‖ (―Grant Thornton Special‖ (2016) No. 350ZA0250). Project Status
fund in projects and Qualification Report, on July 29, 2016, the 22nd meeting of the 7th Board of Directors of the Company
replacement reviewed and approved the Proposal on Replacing Funds Raised by Advances for Raised Funds in
Advance with Proposed Funds, and decided to replace the funds raised. The self-raised funds of RM B
66,449,952.50 were invested in advance to raise funds. On August 3, the Company replaced the self-raised
funds of RM B 66,449,952.50 that had been invested in the raised funds project in advance.
Applicable
On December 16, 2016, the Company held the 25th M eeting of the 7th Board of Directors to review and
approve the Proposal on Using Part of the Idle Raised Fund to Temporarily Replenish the Working Capital.
Idle raised capital used
According to the proposal, the Company will use RM B200 million of the idle raised fund to replenish the
as working capital
working capital for no more than 12 months upon the approval of the proposal by the Board of Directors.
When the period expires, the fund will be returned to the account of the raised fund. The Company used
RM B200 million to temporarily replenish the working capital on December 19.
37
2017 Annual Report of China Fangda Group Co., Ltd.
Applicable
The 13M Wp distributed photovoltaic power generation project in Luxi County, Pingxiang City, Jiangxi
Province and the 4.3M Wp Phase I 6.3M Wp distributed photovoltaic power generation project in the Isuzu
Surplus of investment M otor Park, Nanchang City, Jiangxi Province have been completed. The fund balances are mainly due to
and cause payment of part of the project has not yet reached the payment condition.
Use plan of retained
None
fund from financing
Problem or situation in
using of raised capital None
and disclosing
(3) Altering of projects financed by raised capital
□ Applicable √ Inapplicable
None
6. Major assets and equity sales
1. Major assets sales
□ Applicable √ Inapplicable
The Company sold no assets in the report period.
2. Major equity sales
√ Applicable □ Inapplicable
The Proporti Whether
equity on of Whether it is
contribu net the implem
ted by profit equity ented Index
Equity Relation
the contribu involve accordin for
Price (in sales Related ship Date of
Counter Stock Disposa equity ted by d has g to informat
RM B10, Impacts pricing transacti with the disclosu
part sold l day to the listed been schedul ion
000) principl on counter re
listed Compan complet e, if it is disclosu
e party
compan ies to ely not re
y from equity transferr implem
the investm ed ented
beginni ents as a accordin
38
2017 Annual Report of China Fangda Group Co., Ltd.
ng of percenta g to
the ge of plan, it
current total net should
period profits explain
to the the
selling reasons
date (in and the
ten measure
thousan s the
d yuan) Compan
y has
taken
Announ
cement
The
of
disposal
Resoluti
has no
ons of
significa
the 20th
Shenzhe nt
M eeting
n impact
60% of the
Jinying on the Non-affi
stake in 28.12.1 Negotiat 26.04.1 7th
Yingke 200 -488.37 Compan 7.64% No liated Yes Yes
Fangda 7 ion 6 Board
Electron y's party
SOZN of
ics Co., business
Director
Ltd. continui
s
ty and
publishe
manage
d on
ment
www.cn
stability
info.co
m.cn
7. Analysis of major joint stock companies
√ Applicable □ Inapplicable
M ajor subsidiaries and joint stock companies affecting more than 10% of the Company’s net profit
In RM B
M ain Registered Operation
Company Type Total assets Net assets Turnover Net profit
business capital profit
Subway
Fangda 626,399,971.6 311,219,088.4
Subsidiary screen door 105,000,000 339,399,858.81 66,044,548.14 58,327,079.29
Automatic 6 5
and service .00
Fangda 200,000,000 3,496,742,698 1,122,067,305 1,261,910,880 957,540,993.2
Subsidiary Real estate 907,036,386.46
Property .00 .69 .77 .46 9
39
2017 Annual Report of China Fangda Group Co., Ltd.
Acquisition and disposal of subsidiaries in the report period
√ Applicable □ Inapplicable
Acquisition and disposal of subsidiaries in Impacts on overall production, operation
Company
the report period and performance
Shenzhen Hongjun Investment Co., Ltd. Newly set None
Fangda Australia Co., Ltd. Newly set None
Jiangxi Fangda New Type Aluminum Co.,
Liquidation None
Ltd.
Guangdong Fangda SOZN Lighting Co.,
Transfer None
Ltd.
M ajor joint-stock companies
8. Structural entities controlled by the Company
□ Applicable √ Inapplicable
9. Future Prospect
(1) Competition map and development trend
1. Curtain wall and material system industry
With the development of the major national strategies such as the construction of Guangdong, Hong Kong, and M acau Bay
Area and Xiong'an New District, commercial and office buildings, urban commercial complexes, star-rated hotels and other urban
commercial spaces as well as airports, stations, rail transit, museums, libraries, Public spaces such as stadiums, schools, and hospitals
have strong demand for curtain walls, and the curtain wall system and material industry still have a good foundation. Over recent
years, a series of industry policies will be issued to push forward the industry, providing a gold opportunity for the develo pment of
energy-saving curtain wall and material business.
2. Rail transport equipment business
According to the 2017 Urban Rail Transit Industry Statistics Report released by the China Urban Rail Transit Association, as of
the end of 2017, a total of 34 cities in the Chinese mainland (excluding Hong Kong, M acao, and Taiwan) opened urban rail tran sit
and put into operation, and 165 routes were opened. The length of the operation line is up to 5,033 kilometers. As of the end of 2017,
a total of 56 cities in Chinese mainland started construction of urban rail transit (some local government approval projects have not
been included in the statistics), a total of 254 urban rail transit lines are under construction, and the length of lines under construction
has reached 6,246.3 kilometers, and the number of cities under construction is under construction. The number of lines and the length
of lines under construction exceed the scale of operation. At present, the 13th Five-Year Plan for several provinces and cities has
incorporated rail transit construction into key development projects. With the implementation of major national strategies s uch as the
Guangdong, Hong Kong, and M acao Bay District, Xiong'an New District, and the ―Belt and Road‖ Initiative, the region has radiated
into Southeast Asia, South Asia, Central Asia, and West Asia, and has extended to Eastern Europe and North Africa with strong
demand for infrastructure construction and interconnection. Therefore, the rail transit equipment industry will face new and
unprecedented opportunities for development.
3. New energy industry
In the past year, driven by the multiple factors such as the rush-preemption effect brought about by the adjustment of domestic
on-grid PV tariffs, the accelerated expansion of distributed markets and the rapid rise of emerging markets such as India, the
40
2017 Annual Report of China Fangda Group Co., Ltd.
development of China's photovoltaic industry has continued to improve, and the industrial scale has steadily increased. The level has
significantly increased, the cost has dropped significantly, and the profitability of photovoltaic companies has been high, and the
global competitive position has been further consolidated. Looking forward to 2018, the global competitiveness of China's PV
companies will be further consolidated, the level of technology will continue to rise, and the production costs will also be further
reduced. However, the supply and demand imbalance caused by the slowdown or even decline in the global and China photovoltaic
market will increase, and the price competition pressure will increase dramatically. The foreign trade situation is more severe and
other challenges.
4. Real estate
Shenzhen is located in the core area of Guangdong, Hong Kong and M acau Bay, and the economy continues growing. In recent
years, Shenzhen has introduced a series of measures to limit house purchase. However, due to the limited supply of land for
development, it is still difficult to stop the rise in prices. Benefiting from the rapid economic development of Shenzhen in the core
area of Guangdong, Hong Kong, and M acau, it is expected that there will still be room for development in the real estate industry in
Shenzhen and surrounding cities.
(2) Company development strategy and business plan
The Company will continue to exert its brand advantage, make full use of the brand ―Fangda‖, implement a differentiated
market strategy, continue to deepen the main battlefield of Guangdong, Hong Kong, and M acao Bay, and form a Dongguan base, a
Shanghai base, a Chengdu base, and a Nanchang base nationwide, seize the opportunity to actively participate in the construct ion of
Guangdong, Hong Kong, M acao Bay, Xiong'an New District and Hainan Special Zone. Further enhance the competitiveness of the
Company's high-end energy-saving curtain wall and material industry and rail transit screen door industry. As the world's largest
supplier of rail screen door systems, the Company will also take full advantage of technologies, brands, services, etc. to further
consolidate and improve the domestic market share, and vigorously expand overseas markets, especially the "Belt and Road" nat ional
market, to maintain overseas orders. Continuity and stability will allow the domestic and foreign markets to develop in a balanced
manner and continue to ―lead‖ in the rail transit industry. In the new energy industry, given the better earnings of the three solar
photovoltaic power stations that have been connected to the grid for power generation, the Company will expand the Company's new
energy photovoltaic business in accordance with relevant national policies and in combination with the Company's own situation. In
the future, the Company will focus on real estate and urban renewal projects in the core areas of Guangdong, Hong Kong, and M acau
Bay, and continue to grow and strengthen the Company's real estate business.
(3) Capital demand and source for projects in progress
To realize the business target in 2018, the Company will develop suitable financial and capital plans, accelerate the collection
of accounts receivable, sales payment from sales of Fangda Town, expand financing channels, and use share issuance, bank loans and
other financing products to meet the demand for capital.
(4) Risks and solutions
1. M arket risks and measures
As the overall designing and engineering quality continues improving in the domestic construction curtain wall industry,
curtain wall products will become increasingly standard, intensifying the market competition. In addition, the market concent ration
of first- and second-tier cities will increase, and regional competition will become more intense. The Company will continue to adopt
a prudent management policy, refined management, and technological innovations to reduce management costs and accelerate the
return of funds. Through new technologies and processes, we will improve product quality, lower costs and elevate earnings. While
consolidating the domestic market, the Company will step up the efforts in exploring overseas markets, thus elevating our
competitiveness in global markets and improving our resistance to risks.
2. M anagement risks and measures
With an increase in orders in recent years and operation of five industry bases, the Company has continued expanding rapidly
in terms of capitalization, business and teams. The organizational structure and management system have become more complicat ed,
41
2017 Annual Report of China Fangda Group Co., Ltd.
leading to management risks in industry expansion. The Company will continue to improve the management mode, integrate
business management, optimize the business flow, seeking to build a high-efficient and solid management team. We will introduce
high-quality, professional technical and management talents in different fields to strengthen the Company's core competitiveness.
3. Production and operation risks and measures
The macro-economy and market demand have added to the fluctuation in prices of main raw materials such as aluminum and
steel and labor, affecting the Company’s profitability and creating additional production and operation risks for the Company . The
Company has sought to lower the purchase and production costs, pay attention to technical R&D , reduce consumption of raw
materials, introduce automatic and intelligent production equipment, strengthen staff training to improve working efficiency.
4. Solar P V power plant risks and measures
The industry is closely related to policies of the local government. Changes in policies will have large impacts on the industry.
The Company will continue paying attentions to the development of the industry. The Company will conduct adequate verificatio n
on project feasibility, control costs, quality and schedules strictly, and improve its development, construction and maintenance
capabilities.
X. Acceptance of surveys, negotiation and visits
1. Reception of investigations, communications, or interviews in the reporting period
√ Applicable □ Inapplicable
Time/date Way Visitor Disclosure of information
Investor Relationship Record Form on
10.02.17 Onsite investigation Institution
www.cninfo.com.cn
Investor Relationship Record Form on
02.08.17 Onsite investigation Institution
www.cninfo.com.cn
Investor Relationship Record Form on
16.08.17 Onsite investigation Institution
www.cninfo.com.cn
Investor Relationship Record Form on
31.08.17 Onsite investigation Institution
www.cninfo.com.cn
Investor Relationship Record Form on
08.09.17 Others Institution
www.cninfo.com.cn
Time 5
Number of institutes 15
Number of individuals 0
Number of other visitors 0
Disclosure of any non-public information No
42
2017 Annual Report of China Fangda Group Co., Ltd.
Chapter 5 Significant Events
1. Profit distribution and reserve capitalization plan
Establishment, implementation or adjustment of profit distribution policies especially the cash dividend policy during the report
period
√ Applicable □ Inapplicable
During the report period, the Company implemented the profit distribution plan for 2016. Approved at the Shareholders' M eeting
2016 held on April 11, 2017, the Company's profit distribution plan for 2016 is distributing a cash dividend of RM B3.50
(tax-included) for every ten shares and transfer five shares for every ten shares to all the shareholders based on a total of 789,094,836
shares on December 31, 2016. No dividend share was issued this year. The plan was implemented on 17.05.17 (see the 2016 Share
Equity Distribution Implementation Announce 2017-18).
Explanation of Cash Dividend Distribution Policies
Comply with the Articles of Association or resolution made at
Yes
the General Shareholders' M eeting
Clear and definite distribution standard and proportion Yes
Decision-making procedure and mechanism Yes
Independent directors fulfill their duties Yes
M iddle and small shareholders express their opinions and claims.
Yes
There rights are well protected.
Cash dividend distribution policies are adjusted or revised
Inapplicable
according to law
Profit distribution and reserve capitalizing pre-plans or plans over the recent three years (including the reporting period)
2015: A cash dividend of RM B1.00 (including tax) for each ten shares was issued to all shareholders on the basis of 756,909,905
shares with a total amount of RM B 75,690,990.50, on 31.12.15. No dividend share or capitalization share was issued.
2016: A cash dividend of RM B3.50 (including tax) for each ten shares was issued to all shareholders on the basis of 789,094,836
shares with a total amount of RM B 276,183,192.60, on 31.12.16. Five shares were issued for every ten shares to all shareholders
through capitalization of capital reserve. No dividend share was issued.
2017: A cash dividend of RM B1.50 (including tax) for each ten shares was issued to all shareholders on the basis of 1,183,642,254
shares with a total amount of RM B 177,546,338.10, on 31.12.17.
43
2017 Annual Report of China Fangda Group Co., Ltd.
No dividend share or capitalization share was issued in the year.
Distribution of cash dividend over the recent three years (including this period)
In RM B
Net profit Proportion in the net
attributable to project attributable Proportion of cash
Cash dividend Cash dividend paid
Year shareholders in the to shareholders in dividend paid in
(including tax) in other manners
consolidated the consolidated other manners
financial statements financial statements
2017 177,546,338.10 1,144,404,441.03 15.51% 0.00 0.00%
2016 276,183,192.60 697,956,378.23 39.57% 0.00 0.00%
2015 75,690,990.50 107,272,369.77 70.56% 0.00 0.00%
Cash dividend proposed despite the Company records profits in the report period and a positive undistributed profit/
□ Applicable √ Inapplicable
2. Profit Distribution and Reserve Capitalization Plan in the Report Period
√ Applicable □ Inapplicable
Bonus shares for every ten shares 0
Cash dividend for every ten shares (yuan,
1.50
tax-included)
Shares capitalized for every 10 shares 0
A total number of shares as the distribution basis 1,183,642,254
Total cash dividend (yuan, including tax) 177,546,338.10
Distributable profit (yuan) 586,376,124.33
Proportion of cash dividend in the distributable
100%
profit
Cash dividend
The Company is in a fast growth stage. Therefore, the cash dividend will reach 20% of the profit distribution at least.
Details of profit distribution or reserve capitalization plan
The Company plans to distribute a cash dividend of RM B1.50 (including t ax) for each ten shares issued to all shareholders on the
basis of 1,183,642,254 shares with a total amount of RM B177,546,338.10, on 31.12.17. No dividend share or capitalization share
was issued in the year. The plan needs to be reviewed and approved at the General Shareholders' M eeting 2017.
44
2017 Annual Report of China Fangda Group Co., Ltd.
3. Performance of promises
1. Commitments that have been fulfilled and not fulfilled by actual controller, shareholders, related parties,
acquirers of the Company
√ Applicable □ Inapplicable
Promised issue Promiser Type Commitment Date Term Fulfillment
Share reform
Commitments made in acquisition
reports or equity change reports
Commitments made during assets
reorganization
Caitong Fund;
Changzhou
Investment
Group, First
Capital
Securities,
Fullgoal Shares offered
Assets in the
M anagement non-public
Co., Ltd., Share sales share issuance
Commitments made during initial
Sinomach restriction in 2015 will 01.08.16 12 months Fulfilled
public offering or re-financing
Finance Co., commitment be locked for
Ltd., 12 months
M insheng from the date
Tonghui Asset of listing
M anagement
Co., Ltd. and
Ping An-UOB
Fund
M anagement
Co., Ltd.
Share option incentive
Other commitments made to
small-to-middle shareholders
Timely fulfillment Yes
2. Explanation and reason of profit forecasts on assets or projects that remain in the report period
□ Applicable √ Inapplicable
45
2017 Annual Report of China Fangda Group Co., Ltd.
4. Non-operating capital use by the controlling share holder or related parties in the reporting
term
□ Applicable √ Inapplicable
The controlling shareholder and its affiliates occupied no capital for non-operating purpose of the Company during the report period.
5. Statement of the Board of Directors, Supervisory Committee and Independent Directors (if
applicable) on the “non-standard auditors’ report” issued by the CPA on the curre nt report
period
□ Applicable √ Inapplicable
6. Statement of changes to accounting policies, estimates and audit methods compared with
the financial report of the previous year
√ Applicable □ Inapplicable
(1) Changes in accounting policies
Enterprise Accounting Standard No. 42 - Non-current Assets held for sale, disposal group and discontinued operation, classification,
measurement and presentation of non-current assets or disposal groups held for sale after M ay 28, 2017, and the presentation of
discontinued operations are regulated, and will be handled in accordance with the future applicable laws; the presentation of financial
statements will be revised, and profit and loss from continuing operations and profit and loss from termination of operations shall be
listed in the consolidated income statement and profit statement, respectively. The presentation of the comparative statement s has
been adjusted accordingly: For the termination of operations presented in the current period, the information originally pres ented as a
profit or loss from continuing operations was re-stated as a discontinued operating profit or loss in the comparat ive statements.
According to the "Enterprise Accounting Standards No. 16 - Government Subsidies" (2017), the accounting treatment of government
subsidies was changed from the total amount method to the net amount method, and the amortization method of def erred income
related to government subsidies related to assets was changed from average allocation in service life to reasonable and systematic
method of allocation. The representation of government subsidy items was also revised. The government subsidies that have not been
amortized on January 1, 2017 and the government subsidies obtained in 2017 should use the revised guidelines. The new disclos ure
requirements do not need to provide comparative information, and do not adjust the presentation of other incomes in the comparative
report accordingly.
According to the ―Notice on Amendments to the Format for Issuing Financial Statements for General Enterprises‖ (Accounting
[2017] No. 30), the newly ―asset disposal proceeds‖ item was added to the income statement to reflect the sale of non-current assets
classified as held for sale by enterprises (excluding financial instruments, long-term equity investment and investment real estate) or
disposal group, disposal profit or loss recognized at the time of disposing of the disposal group, disposal of fixed assets, construction
in progress, productive biological assets and intangible assets not treated for sale gains or losses, gains or losses arising from the
disposal of non-current assets in debt restructuring and gains or losses arising from the exchange of non-monetary assets.
Correspondingly, the item ―including: non-current assets disposal gains‖ and ―including: non-current assets disposal losses‖ were
deleted under ―non-operating income‖ and ―non-operating expenses‖. "Non-operating income" and "non-operating expenses" reflect
revenues other than operating profits incurred by the Company, mainly including gains and losses from debt restructuring,
government subsidies that are unrelated to the Company's daily activities, public welfare donation expenses, extraordinary losses, and
profit from disc operations. Loss, donation gains, loss of non-current assets, damages, etc. The presentation of the comparative report
46
2017 Annual Report of China Fangda Group Co., Ltd.
was adjusted accordingly.
The above changes in accounting policies have little impact on the Group.
(2) Changes in major accounting estimates
To reflect the Company's financial position and operating results more cautiously, and to meet requirements of business development
and enterprise accounting standards, objective and fairly, the Company will make the accounting estimate change of bad debt
provision standard for receivables.
(1) Risks of receivables of the Company’s newly added real-estate business are different from risks of other receivables. The
Company will change the real-estate business bad debt provision standard and the standard of a single large amount according to the
business condition and actual development of the business.
(2) The risk of bad debt for receivables in different ages is different according to the Company’s experience in engineering
businesses and actual bad debt condition. The current classification of account aging is inadequate and cannot reflect differ ent credit
risks. Therefore, the Company will change the bad debt provision proportion for engineering businesses and the standard of a single
large amount.
(3) The classification of the Company’s current aging of other types of business and other receivables for more than three years is not
detailed enough. In order to more accurately reflect the Company’s financial status, the division of the above ageing segments has
been adjusted.
The changes in accounting estimates have been reviewed and approved by the Company at the 3rd meeting of the 8th Board of
Directors held on July 28, 2017. The change took effect from August 1, 2017.
The impact of the above changes in accounting estimates on the net profit of the Group for the current period was RM B53.09 million.
7. Statement of retrospective restatement of major accounting erro rs in the report period
□ Applicable √ Inapplicable
No retrospective restatement of major accounting errors in the report period
8. Statement of change in the financial statement consolidation scope compared with the
previous financial report
√ Applicable □ Inapplicable
1. Shenzhen Hongjun Investment Co., Ltd. and Fangda Australia Co., Ltd. were newly established in this period. The two companies
are consolidated in this period.
2. The subsidiary of the Company Jiangxi Fangda New Aluminum Co., Ltd. controlled indirectly by the Company was liquidized in
this period. At the same time, in December 2017, the Company transferred 60% of the indirect controlled stake of Guangdong
Fangda SOZN Lighting and lost the control in the company. Therefore, the two subsidiaries are moved out of the consolidation scope
in this period.
9. Engaging and dis missing of CPA
CPA engaged currently
47
2017 Annual Report of China Fangda Group Co., Ltd.
Domestic public accountants name Grant Thornton (limited liability partnership)
Remuneration for the domestic public accountants (in
150
RM B10,000)
Consecutive years of service by the domestic public accountants 6
Name of certified accountants of the domestic public accountants Chen Zhaoxin, Hu Gaosheng
Chen Zhaoxin has provided auditing service for 1 year, Hu
Consecutive years of service by the domestic public accountants
Gaosheng for 3 years
Overseas public accountants name (if any) None
Remuneration for the overseas public accountants (in
0
RM B10,000)
Consecutive years of service by the overseas public accountants
None
(if any)
Name of certified accountants of the overseas public accountants
None
(if any)
Consecutive years of service by the domestic public accountants None
Whether the CPA is replaced
□ Yes √ No
Engaging of internal control audit CPA, financial advisor and sponsor
√ Applicable □ Inapplicable
This year, the Company engaged Grand Thornton China (limited liability partnership) as the financial
statement and internal control auditing CPA with a fee of RMB1.5 million.
10. Trade suspension and termination after the disclose of the annual report
□ Applicable √ Inapplicable
11. Bankruptcy and capital reorganizing
□ Applicable √ Inapplicable
The Company has no bankruptcy or reorganization events in the report period.
12. Significant laws uit and arbitration
□ Applicable √ Inapplicable
The Company has no significant lawsuit or arbitration affair in the report period.
13. Punishme nt and rectification
□ Applicable √ Inapplicable
The Company received no penalty and made no correction in the report period.
48
2017 Annual Report of China Fangda Group Co., Ltd.
14. Credibility of the Company, controlling shareholde r and actual controller
□ Applicable √ Inapplicable
15. Share incentive schemes, staff shareholding program or othe r incentive plans
□ Applicable √ Inapplicable
There is no share incentive schemes, staff shareholding program or other incentive plans in the report period
16. Material related transactions
1. Related transactions related to routine operation
□ Applicable √ Inapplicable
The Company made no related transaction related to daily operating in the report period.
2. Related transactions related to assets transactions
□ Applicable √ Inapplicable
The Company made no related transaction of assets or equity requisition and sales in the report period.
3. Related transactions related to joint external investment
□ Applicable √ Inapplicable
The Company made no related transaction of joint external investment in the report period.
4. Related credits and debts
□ Applicable √ Inapplicable
The Company had no related debt in the report period.
(5) Other major related transactions
□ Applicable √ Inapplicable
The Company has no other significant related transaction in the report period.
17. Significant contracts and performance
1. Asset entrusting, leasing, contracting
(1) Asset entrusting
□ Applicable √ Inapplicable
The Company made no custody in the report period.
49
2017 Annual Report of China Fangda Group Co., Ltd.
(2) Contracting
□ Applicable √ Inapplicable
The Company made no contract in the report period
(3) Leasing
√ Applicable □ Inapplicable
Leasing
The investment real estate is used as external leasing. The rental income in the report period is RM B24,693,767.83.
Projects that create gains accounting for over 10% of the Company’s total profit in the report period
□ Applicable √ Inapplicable
The Company leased no projects that create gains accounting for over 10% of the Company’s total profit in the report period.
2. Significant guarantee
√ Applicable □ Inapplicable
(1) Guarantee
In RM B10,000
External guarantees made by the Company and subsidiaries (exclude those made for subsidiaries)
Actual date of
Actual
Date of Guarantee occurring Type of Complete Related
Guarantee provided to amount of Term
disclosure amount (signing date of guarantee d or not party
guarantee
agreements)
Guarantee provided to subsidiaries
Actual date of
Actual
Date of Guarantee occurring Type of Complete Related
Guarantee provided to amount of Term
disclosure amount (signing date of guarantee d or not party
guarantee
agreements)
since engage
of contract to
Fangda Jianke 26.04.16 48,000 06.07.16 12,031.29 Joint liability No Yes
2 years upon
due of debt
since engage
of contract to
Fangda Jianke 26.04.16 26,000 27.12.16 5,768.53 Joint liability No Yes
2 years upon
due of debt
since engage
Fangda Jianke 21.03.17 40,000 06.12.17 7,946.76 Joint liability of contract to No Yes
2 years upon
50
2017 Annual Report of China Fangda Group Co., Ltd.
due of debt
since engage
of contract to
Fangda Jianke 21.03.17 30,000 23.08.17 24,000 Joint liability No Yes
2 years upon
due of debt
since engage
of contract to
Fangda Jianke 26.04.16 18,000 16.02.17 10,543.27 Joint liability No Yes
2 years upon
due of debt
since engage
of contract to
Fangda Jianke 21.03.17 40,000 01.11.17 4,833.7 Joint liability No Yes
2 years upon
due of debt
since engage
of contract to
Fangda Automatic 26.04.16 21,600 06.07.16 1,600 Joint liability No Yes
2 years upon
due of debt
since engage
of contract to
Fangda Automatic 21.03.17 15,000 31.10.17 1,495.22 Joint liability No Yes
2 years upon
due of debt
since engage
of contract to
Fangda Automatic 26.04.16 10,000 27.12.16 622.13 Joint liability No Yes
2 years upon
due of debt
since engage
of contract to
Fangda Automatic 21.03.17 20,000 23.08.17 0 Joint liability No Yes
2 years upon
due of debt
since engage
of contract to
Fangda New M aterial 21.03.17 8,000 27.05.17 6,116.41 Joint liability No Yes
2 years upon
due of debt
since engage
of contract to
Fangda Property 23.03.13 130,000 03.02.15 109,397.82 Joint liability No Yes
2 years upon
due of debt
since engage
of contract to
The Company 21.03.17 25,000 26.09.17 25,000.00 Joint liability No Yes
2 years upon
due of debt
51
2017 Annual Report of China Fangda Group Co., Ltd.
Total of guarantee to
Total of guarantee to subsidiaries subsidiaries actually
431,600 97,116.20
approved in the report term (B1) occurred in the report term
(B2)
Total of balance of
Total of guarantee to subsidiaries guarantee actually provided
431,600 209,355.13
approved as of the report term (B3) to the subsidiaries as of end
of report term (B4)
Guarantee provided to subsidiaries
Actual date of
Actual
Date of Guarantee occurring Type of Complete Related
Guarantee provided to amount of Term
disclosure amount (signing date of guarantee d or not party
guarantee
agreements)
Total of guarantee provided by the Company (total of the above three)
Total of guarantee occurred
Total of guarantee approved in the
431,600 in the report term 97,116.20
report term (A1+B1+C1)
(A2+B2+C2)
Total of guarantee occurred
Total of guarantee approved as of
431,600 as of the end of report term 209,355.13
end of report term (A3+B3+C3)
(A4+B4+C4)
Percentage of the total guarantee occurred (A4+B4+C4) on net
64.64%
asset of the Company
Including:
Guarantees provided to the shareholders, substantial controllers
0
and the related parties (D)
Guarantee provided directly or indirectly to objects with over 70%
0
of liability on asset ratio (E)
Amount of guarantee over 50% of the net asset (F) 47,408.17
Total of the above 3 (D+E+F) 47,408.17
Note of immature guarantee with guarantee liabilities or possible
None
joint damage liabilities in the report period
Statement of external guarantees violating the procedure (if any) None
Note of compound guarantee
(2) Incompliant external guarantee
□ Applicable √ Inapplicable
The Company made no incompliant external guarantee in the report period.
52
2017 Annual Report of China Fangda Group Co., Ltd.
3. Entrusted cash capital management
(1) Wealth management
√ Applicable □ Inapplicable
Wealth management during the reporting period
In RM B10,000
Due balance to be
Type Source of fund Amount Undue balance
recovered
Bank financial products Self-owned fund 75,000 40,000 0
Others Self-owned fund 30,000 0 0
Total 105,000 40,000 0
Specific circumstances of high-risk entrusted financing with large individual amount or low security, poor liquidity, and no cost
protection
□ Applicable √ Inapplicable
Entrusted financial management expected to fail to recover the principal or likely result in impairment
□ Applicable √ Inapplicable
(2) Trusted loans
□ Applicable √ Inapplicable
The Company borrowed no trust loan in the report period.
4. Other significant contract
□ Applicable √ Inapplicable
The Company entered into no other significant contract in the report.
XVI Social responsibilities
1. Fulfillment of social responsibilities
During the reporting period, the Company actively assumed social responsibility, paid taxes in accordance with the law, and
spent RM B580,000 on environmental protection, creating nearly 10,000 person-time employment opportunities, and investing
RM B2.42 million in employee knowledge and skill training. The company has invested RM B112,790,000 to promote development
of new draft, technology, product structure and patent according to clean, safety and efficient production to make contribution for
environmental protection.
2. Performance of poverty relieving responsibilities
(1) Annual poverty relieving summary
The Company donated totally RM B3,911,000 for targeted poverty in 2017:
53
2017 Annual Report of China Fangda Group Co., Ltd.
(1) Donate RM B600,000 to the Jiangxi CPPCC overseas poverty relief foundation. The donation will be used to build health and
family planning service stations for 12 poor villages of Taihe county, Jiangxi.
(2) Donate RM B100,000 to the Nanchang Juvenile Development Foundation to set up the Nanchang Sanfeng Charity Foundation.
(3) Donate RM B50,000 to the Shenzhen Nanshan District Yuehai Sub-district Federation of Trade Unions for poverty relief of
Lianping county, Shenzhen, Guangdong.
(4) Donate RM B1,000 to set up the Shenzhen Nanshan District Elder Care Charity Foundation.
(5) Donate RM B120,000 to the Tibet Linzhi Cha'yu farm 8 th Tibet support team to help build the Cha’yu Farm Primary.
(6) Donate RM B10,000 to the Jiangxi Pingxiang Luxi Xuanfeng government for poverty relief and education support.
(7) Donate RM B30,000 to two students at Jiangxi Ganzhou Zhanggong district Shahe Lon gcun village.
(8) Donate RM B 3 million to the Jiangxi Province Glorious Career Promotion Association to help the old revolutionary areas get rid
of poverty, focusing on projects such as photovoltaic power generation in the agrocybe aegerila planting greenhouse in Guangchang
County, Jiangxi Province.
(2) Result of targeted poverty alleviation
Item Unit Qty/Description
1. General situation —— ——
Including: 1. Fund (in RM B10,000) 391.1
2. Investment —— ——
1. Industry development poverty relief —— ——
Including: 1.1 Industry development
—— Capital earning
projects
1.2 Number of industry
1
development projects
1.3 Amount of industry
(in RM B10,000) 300
development fund
2. Employment transfer —— ——
3. Relocation —— ——
4. Education —— ——
Including: 4.1 Sponsor to students from
(in RM B10,000) 3
poor families
4.2 Number of students Person 2
4.3 Education investment in poor
(in RM B10,000) 18
areas
5. Health care support —— ——
6. Eco-protection support —— ——
7. Last-line guarantee —— ——
8. Social poverty relieving —— ——
9. Others —— ——
54
2017 Annual Report of China Fangda Group Co., Ltd.
Including: 9.1 Number of projects 2
9.2 Investment (in RM B10,000) 10.1
3. Prizes —— ——
(3) Further property relief plans
The Company will continue to fulfill its social responsibility for precision poverty alleviation, and make donations from time to time
based on business development.
3. Environmental protection
Whether the Company and its subsidiaries are key polluting companies disclosed by the environmental protection authority
No
19. Other material events
√ Applicable □ Inapplicable
The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure
Guideline No.6 – Listed Companies Engaged in Decoration Business.
Qualifications in the decoration industry:
No. Qualification Effectiveness
1 Construction curtain wall designing class A By April 16, 2020
2 Construction curtain wall contracting class A By 03.02.21
3 Construction decoration contracting class B By 04.03.21
4 Steel structure engineering contracting class B By 04.03.21
5 Construction mechanical and electric equipment By 04.03.21
installation contracting class C
6 City and road lighting engineering contracting class C By 04.03.21
In the report period, the Company’s safety management is normal. The Company pays large attention to employees’ safety
awareness and capabilities of emergency processing. The Company has strengthened safety production and investigation of safety
risks. The Company has formulated safety management guidelines to guide safety management. There was no significant safety
accidents in the report period.
20. Material events of subsidiaries
□ Applicable √ Inapplicable
55
2017 Annual Report of China Fangda Group Co., Ltd.
Chapter 6 Changes in Share Capital and Shareholders
I. Changes in shares
1. Changes in shares
In share
Before the change Change (+,-) After the change
Bon
Issued
Proportio us Transferred Proportio
Amount new Others Subtotal Amount
n shar from reserves n
shares
es
I. Shares with trade
33,156,973 4.20% 16,592,095 -48,331,826 -31,739,731 1,417,242 0.12%
restriction conditions
2. State-owned legal
6,438,356 0.82% 3,219,178 -9,657,534 -6,438,356
person shares
3. Other domestic shares 26,718,617 3.39% 13,372,917 -38,674,292 -25,301,375 1,417,242 0.12%
Domestic natural
972,042 0.12% 499,630 -54,430 445,200 1,417,242 0.12%
person shares
II. Shares without trading 1,182,225
755,937,863 95.80% 377,955,323 48,331,826 426,287,149 99.88%
limited conditions ,012
1. Common shares in 678,298,2
419,986,675 53.22% 209,979,729 48,331,826 258,311,555 57.31%
RM B 30
2. Foreign shares in 503,926,7
335,951,188 42.57% 167,975,594 167,975,594 42.57%
domestic market 82
1,183,642
III. Total of capital shares 789,094,836 100.00% 394,547,418 0 394,547,418 100.00%
,254
Reasons
√ Applicable □ Inapplicable
1. In the report period, the Company implemented the 2016 profit distribution plan to distribute a cash dividend of RM B3.50 (tax
included) for every ten shares to all shareholders and issue 5 shares for every 10 shares to all shareholders through capitalization of
the reserve based on the total share number of 789,094,836 shares on December 31, 2016.
2. The Company's 2016 profit distribution plan was implemented. The number of A-shares under non-public offering of restricted
sales in 2015 increased from 32,184,931 shares to 48,277,396 shares. On August 7, 2017, the restriction period of the
above-mentioned shares with sales restriction expired.
3. The former director of the Company, M r. Wang Shengguo, left office on the expiry of his term of office on April 11, 2017. As of
the end of the reporting period, after leaving the Company at the end of the reporting period, 54,430 shares with sales restriction held
by M r. Wang has passed the restriction period.
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2017 Annual Report of China Fangda Group Co., Ltd.
Approval of the change
√ Applicable □ Inapplicable
1. The 2016 profit distribution proposal was reviewed at the 26 th meeting of the 7th Board of Directors and 2016 shareholders’
meeting held on M arch 17, 2017 and April 11, 2017 respectively.
2. The Company received the Reply to the Non-public Share Issuance of Fangda China Group Co., Ltd. (CSRC License [2016]
No.825) to allow the Company to issue 32,184,931 shares, which became listed on Shenzhen Stock Exchange on August 1, 2016. On
M ay 17, 2017, the Company's 2016 profit distribution plan was implemented. The number of non-public issuance restricted A shares
increased from 32,184,931 to 48,277,396 shares. The sales restriction of the abovementioned shares expired on August 7, 2017.
3. The Proposal on Reelecting the Board of Directors was reviewed at the 26th meeting of the 7th Board of Directors and 2016
shareholders’ meeting held on M arch 17, 2017 and April 11, 2017 respectively.
Share transfer
√ Applicable □ Inapplicable
On M ay 17, 2017, the Company has completed the 2016 profit distribution plan, the total share capital has increased from
789,094,836 shares to 1,183,642,254 shares.
Impacts on financial indicators including basic and diluted earnings per share, net assets per share attributable to common
shareholders of the company in the most recent year and period
√ Applicable □ Inapplicable
2016
Items Before After 2017
change change
Earnings per share (diluted) 0.91 0.60 0.97
Diluted earnings per share
(diluted) 0.91 0.60 0.97
Net assets per share
(diluted) 3.00 2.00 2.74
Others that need to be disclosed as required by the securities supervisor
□ Applicable √ Inapplicable
2. Changes in conditional shares
√ Applicable □ Inapplicable
In share
Conditional Conditional
shares at Released this Increased this shares at Reason of
Shareholder Date of releasing
beginning of the period period end of the condition
period period
First Capital Securities –
Private issuing
Guosen Securities – M utual 6,438,356 9,657,534 3,219,178 0 07.08.17
restriction
Win Dayan Quantization
57
2017 Annual Report of China Fangda Group Co., Ltd.
Private Placement
Collective Assets
M anagement Program
Ping An Dahua Fund – Ping
Private issuing
An Bank – Guohai 4,041,098 6,061,647 2,020,549 0 07.08.17
restriction
Securities Stock Co., Ltd.
Private issuing
Sinomach Finance Co., Ltd. 3,219,178 4,828,767 1,609,589 0 07.08.17
restriction
Changzhou Investment Private issuing
3,219,178 4,828,767 1,609,589 0 07.08.17
Group Co., Ltd. restriction
Fullgoal Assets – China
M erchants Securities –
Fullgoal Assets – Changtai Private issuing
3,219,178 4,828,767 1,609,589 0 07.08.17
Private Placement Hedging restriction
No.2 Assets M anagement
Program
Kunlun Health Insurance
Private issuing
Co., Ltd, Universal Life 3,212,329 4,818,494 1,606,165 0 07.08.17
restriction
Insurance
Ping An Dahua Fund – Ping
An Bank – Ping An Dahua Private issuing
958,904 1,438,356 479,452 0 07.08.17
Anying Huifu No.80 Assets restriction
M anagement Program
Caitong Fund – Everbright
Bank _ Caitong Fund –
Private issuing
Fuhua Private Placement 794,520 1,191,780 397,260 0 07.08.17
restriction
No.2 Assets M anagement
Program
Ping An Dahua Fund – Ping
An Bank – Shenzhe Ping An Private issuing
684,931 1,027,396 342,465 0 07.08.17
Dahua Assets M anagement restriction
Co., Ltd.
Caitong Fund – ICBC Bank
– Beijing Yizhuang Private issuing
561,644 842,466 280,822 0 07.08.17
International Investment restriction
Development Co., Ltd.
Caitong Fund – Everbright
Bank _ Caitong Fund –
Private issuing
Fuhua Private Placement 561,644 842,466 280,822 0 07.08.17
restriction
No.6 Assets M anagement
Program
58
2017 Annual Report of China Fangda Group Co., Ltd.
Caitong Fund – ICBC –
Fuchun Private Placement Private issuing
561,644 842,466 280,822 0 07.08.17
Baoli No.1 Assets restriction
M anagement Program
Caitong Fund – ICBC –
Fuchun Private Placement Private issuing
561,644 842,466 280,822 0 07.08.17
Baoli No.5 Assets restriction
M anagement Program
Caitong Fund – ICBC –
Fuchun Private Placement Private issuing
561,644 842,466 280,822 0 07.08.17
Baoli No.15 Assets restriction
M anagement Program
Subtotal of other
Private issuing
shareholders participating in 3,589,039 5,383,558 1,794,519 0 07.08.17
restriction
private share issuing
Sales with sales The annual sales
Xiong Jianming 944,828 0 472,414 1,417,242 restriction held restriction of
by management 25% expires
Resigned from
Wang Shengguo 27,214 54,430 27,216 0 10.11.17
position
Total 33,156,973 48,331,826 16,592,095 1,417,242 -- --
2. Share placing and listing
1. Securities issuance (excluding preference shares) during the report period
□ Applicable √ Inapplicable
2. Statement of changes in share number and shareholder structure, assets and liabilities structure
√ Applicable □ Inapplicable
1. In the report period, the Company implemented the 2016 profit distribution plan to distribute a cash dividend of RM B3.50 (tax
included) for every ten shares to all shareholders and issue 5 shares for every 10 shares to all shareholders through capitalization of
the reserve based on the total share number of 789,094,836 shares on December 31, 2016. After the equity distribution was
completed, the total share capital of the Company increased from 789,094,836 shares to 1,183,642,254 shares.
2. The Company's 2016 profit distribution plan was implemented. The number of A-shares under non-public offering of restricted
sales in 2015 increased from 32,184,931 shares to 48,277,396 shares. On August 7, 2017, the restriction period of the
above-mentioned shares with sales restriction expired.
3. The former director of the Company, M r. Wang Shengguo, left office on the expiry of his term of office on April 11, 2017. As of
the end of the reporting period, after leaving the Company at the end of the reporting period, 54,430 shares with sales restriction held
by M r. Wang has passed the restriction period.
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2017 Annual Report of China Fangda Group Co., Ltd.
3. Current employees’ shares
□ Applicable √ Inapplicable
3. Shareholders and the substantial controller of the Company
1. Shareholders and shareholding
In share
Total number of
Total number of shareholders of
Number of Number of
ordinary share preference shares
shareholders of shareholders of
shareholders at of which voting
common shares preferred stocks of
58,540 the end of the 63,651 0 rights resumed at 0
at the end of which voting rights
month before the the end of the
the report recovered in the
disclosure date of month before the
period report period
the annual report disclosure date of
the annual report
Shareholders holding 5% of the Company's shares or top -10 shareholders
Number Pledging or freezing
of shares Amount
Sharehold Change
held at of shares
Nature of ing in the Condition
Shareholder the end of without
shareholder percentag reporting al shares Share status Amount
the sales
e period
reporting restriction
period
Shenzhen Banglin
Domestic
Technologies 103,161,4 34,387,13 103,161,4
non-state legal 8.72% Pledged 28,820,000
Development Co., 09 6 09
person
Ltd.
Shengjiu Foreign legal 90,697,88 33,307,47 90,697,88
7.66%
Investment Ltd. person 22 2
GUOTAI JUNAN
SECURITIES(HO Foreign legal 48,524,22 15,100,42 48,524,22
4.10%
NGKONG) person 73 7
LIM ITED
CITIC Securities
Foreign legal 27,220,72 27,220,72 27,220,72
Brokerage (Hong 2.30%
person 55 5
Kong) Co., Ltd.
Gong Qing Cheng Domestic
26,791,48 26,791,48
Shi Li He non-state legal 2.26% 8,930,496
8 8
Investment person
60
2017 Annual Report of China Fangda Group Co., Ltd.
M anagement
Partnership
Enterprise (limited
partner)
Shenwan
Hongyuan Foreign legal 16,298,43 16,298,43
1.38% 3,580,029
Securities (Hong person 7 7
Kong) Co., Ltd.
China Resource
SZITIC Trust –
China Resource 15,383,40 15,383,40 15,383,40
Others 1.30%
Trust No.13 44 4
Collective Trust
Program
Yunnan
International Trust
CO., Ltd. – Juxin 13,229,63 13,229,63
Others 1.12% 5,377,578
No.5 Collective 5 5
Fund Trust
Program
Domestic natural 10,000,00 -6,213,50 10,000,00
Zhou Shijian 0.84%
person 00 0
Yunnan
International Trust
CO., Ltd. – Yunxia
Others 0.73% 8,635,314 8,635,314 8,635,314
No.3 Collective
Fund Trust
Program
A strategic investor or ordinary legal
person becomes the Top10 shareholder None
due a stock issue.
Among the shareholders, Shenzhen Banglin Technology Development Co., Ltd. and
Shengjiu Investment Co., Ltd. are parties action-in-concert. Shenzhen Banglin Technology
Notes to top ten shareholder
Development Co., Ltd. and Gong Qing Cheng Shi Li He Investment M anagement
relationship or "action in concert"
Partnership Enterprise are related parties. The Company is not notified of other
action-in-concert or related parties among the other holders of current shares.
Top 10 holders of unconditional shares
Category of shares
Shareholder Amount of shares without sales restriction Category of
Amount
shares
Shenzhen Banglin Technologies 103,161,409 RM B common 103,161,409
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2017 Annual Report of China Fangda Group Co., Ltd.
Development Co., Ltd. shares
Foreign shares
Shengjiu Investment Ltd. 90,697,882 listed in domestic 90,697,882
exchanges
GUOTAI JUNAN Foreign shares
SECURITIES(HONGKONG) 48,524,227 listed in domestic 48,524,227
LIM ITED exchanges
Foreign shares
CITIC Securities Brokerage (Hong
27,220,725 listed in domestic 27,220,725
Kong) Co., Ltd.
exchanges
Gong Qing Cheng Shi Li He
RM B common
Investment M anagement Partnership 26,791,488 26,791,488
shares
Enterprise (limited partner)
Foreign shares
Shenwan Hongyuan Securities (Hong
16,298,437 listed in domestic 16,298,437
Kong) Co., Ltd.
exchanges
China Resource SZITIC Trust – China
RM B common
Resource Trust No.13 Collective Trust 15,383,404 15,383,404
shares
Program
Yunnan International Trust CO., Ltd. –
RM B common
Juxin No.5 Collective Fund Trust 13,229,635 13,229,635
shares
Program
RM B common
Zhou Shijian 10,000,000 10,000,000
shares
Yunnan International Trust CO., Ltd. –
RM B common
Yunxia No.3 Collective Fund Trust 8,635,314 8,635,314
shares
Program
No action-in-concert or related parties Among the shareholders, Shenzhen Banglin Technology Development Co., Ltd. and
among the top10 unconditional Shengjiu Investment Co., Ltd. are parties action-in-concert. Shenzhen Banglin Technology
shareholders and between the top10 Development Co., Ltd. and Gong Qing Cheng Shi Li He Investment M anagement
unconditional shareholders and the Partnership Enterprise are related parties. The Company is not notified of other
top10 shareholders action-in-concert or related parties among the other holders of current shares.
Top-10 common share shareholders Zhou Shijian holds 10,000,000 shares of the company through the client credit transaction
participating in margin trade guarantee account of GF Securities.
Agreed re-purchasing by the Company’s top 10 shareholders of common shares and top 10 shareholders of unconditional common
shares in the report period
□ Yes √ No
No agreed re-purchasing by the Company’s top 10 shareholders of common shares and top 10 shareholders of unconditional common
shares in the report period
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2017 Annual Report of China Fangda Group Co., Ltd.
2. Profile of the controlling shareholders
Shareholder nature: natural person holding
Type of shareholder: legal person
Legal
Name of controlling representative/ Date of
Organization code M ain business
shareholder responsible establishment
person
Industrial investment, developing of
Shenzhen Banglin
electronic products, technical
Technologies Development Chen Jinwu 07.06.01 914403007298400552
consulting, domestic commerce,
Co., Ltd.
material trading
Stock ownership of other
domestic and overseas listed
company controlled or whose None
shares are held by controlling
shareholders
Changes in the controlling shareholder in the reporting period
□ Applicable √ Inapplicable
No change in the controlling shareholder in the report period
3. Substantial controller of the Company
Nature of actual controller: domestic natural person
Type of actual controller: natural person
Name of substantial controller Nationality Right of residence in another country or region
Xiong Jianming Chinese Yes
Job and position Chairman of the Board and president of the Company over the past 5 years
Profiles of domestic and overseas listed
companies in which the controller held The controller held no share in other listed companies in the last ten years.
shares
Change in the actual controller in the report period
□ Applicable √ Inapplicable
No change in the actual shareholder in the report period
7. Chart of the controlling relationship
63
2017 Annual Report of China Fangda Group Co., Ltd.
Controlling over the Company by the substantial controller through trust or other asset management
□ Applicable √ Inapplicable
4. Other legal person shareholders with over 10% of total shares
□ Applicable √ Inapplicable
5. Conditional decrease of shareholding by controlling shareholder, actual controller, reorganizer and
other entities
□ Applicable √ Inapplicable
64
2017 Annual Report of China Fangda Group Co., Ltd.
Chapter 7 Preferred Shares
□ Applicable √ Inapplicable
The Company had no preferred share in the report period.
65
2017 Annual Report of China Fangda Group Co., Ltd.
Chapter 8 Particulars about the Directors, Supervisors, Senior
Management and Employees
I. Changes in shareholding of Directors, Supe rvisors and Senior Management
Number of Decrea
Increase Other Number
shares sed
d shares increase of shares
Job Starting date End date of held at shares
Name Position Sex Age in this and held at
status of the term the term beginning in this
period decrease end of the
of the period
(share) (share) period
period (share)
Xiong Chairman, In
M 60 20.11.95 11.04.20 1,259,771 629,886 1,889,657
Jianming president office
In
Lin Kebin Director M 40 11.04.17 11.04.20
office
Vice In
Lin Kebin M 40 06.06.08 11.04.20
president office
Zhou In
Director M 55 09.04.07 11.04.20
Zhigang office
Zhou Vice In
M 55 11.04.17 11.04.20
Zhigang president office
Zhou Secretary of In
M 55 22.10.03 11.04.20
Zhigang the Board office
Xiong In
Director M 49 16.04.99 11.04.20
Jianwei office
Guo Independent In
M 52 31.03.14 11.04.20
Wanda director office
Independent In
Deng Lei M 39 16.02.16 11.04.20
director office
Guo Independent In
M 56 11.04.17 11.04.20
Jinlong director office
Supervisory
Yin Committee In
M 49 31.03.14 11.04.20
Changjian meeting office
convener
Dong In
Supervisor M 39 11.04.17 11.04.20
Gelin office
66
2017 Annual Report of China Fangda Group Co., Ltd.
In
Cao Naisi Supervisor F 39 11.04.17 11.04.20
office
Wei Vice In
M 49 29.07.11 11.04.20
Yuexing president office
Independent Resign
Lin Bin M 55 31.03.14 11.04.17
director ed
Wang Director, vice Resign
M 60 20.11.95 11.04.17 36,286 18,144 54,430
Shengguo president ed
Supervisory
Committee Resign
Zhen Hua F 58 27.05.05 11.04.17
meeting ed
convener
Zen Resign
Supervisor M 48 31.03.14 11.04.17
Xiaowu ed
Total -- -- -- -- -- -- 1,296,057 0 0 648,030 1,944,087
2. Changes in the Directors, Supervisors and Senior Executives
√ Applicable □ Inapplicable
Name Job Type Date Reason
Office term expires and
Xiong Jianming Chairman, president Appointed 11.04.17
re-elected
Office term expires and
Lin Kebin Director, vice president Appointed 11.04.17
re-elected
Director, vice president secretary of Office term expires and
Zhou Zhigang Appointed 11.04.17
the Board re-elected
Office term expires and
Xiong Jianwei Director Appointed 11.04.17
re-elected
Office term expires and
Guo Wanda Independent director Appointed 11.04.17
re-elected
Office term expires and
Deng Lei Independent director Appointed 11.04.17
re-elected
Office term expires and
Guo Jinlong Independent director Appointed 11.04.17
re-elected
Supervisory Committee meeting Office term expires and
Yin Changjian Appointed 11.04.17
convener re-elected
Office term expires and
Dong Gelin Supervisor Appointed 11.04.17
re-elected
Cao Naisi Supervisor Appointed 11.04.17 Office term expires and
67
2017 Annual Report of China Fangda Group Co., Ltd.
re-elected
Office term expires and
Wei Yuexing Vice president Appointed 11.04.17
re-elected
Office term expires and
Wang Shengguo Director, vice president Leaving office 11.04.17
re-elected
Office term expires and
Lin Bin Independent director Leaving office 11.04.17
re-elected
Supervisory Committee meeting Office term expires and
Zhen Hua Leaving office 11.04.17
convener re-elected
Office term expires and
Zen Xiaowu Supervisor Leaving office 11.04.17
re-elected
Office term expires and
Lin Kebin CFO Leaving office 11.04.17
re-elected
3. Office Description
Professional background, work experience and main duties in the Company of existing directors, supervisors and senior managem ent
1. M r. Xiong Jianming: PHD M anagement; senior engineer; part-time professor of Beijing Institute of Civil Engineering and
Architecture and Nanchang University. He was once employed by Jiangxi Provincial M achinery Design Academe, Administration
Bureau of Shekou District of Shenzhen government, etc, deputy to the 10th People’s Congress of Guangdong Province, deputy to the
2nd and 3rd People’s Congress of Shenzhen City. He is now the chairman and CEO of the Company, representative of the 13 th
National People's Congress and the 6th Shenzhen People's Congress, president of the Shenzhen Semi-conductor Lighting Industry
Promotion Association, chairman of Shenzhen Jiangxi Commerce Chamber, chairman of Shenzhen Nanshan District Industry and
Commerce Association and honorary chairman of Shenzhen Nanshan District Charity.
2. M r. Lin Kebin holds a bachelor’s degree. He was once the CFO of the Company and is currently a director and vice president of
the Company.
3. M r. Xiong Jianwei: M BA. He is a director of the Company, Chairman of the Board of Director of Fangda Jianke and a member of
the 14th Nanchang CPPCC Standing Committee.
4. M r. Zhou Zhigang, bachelor’s degree. He is currently a director, vice president, Secretary of Board, and head of the Securities
Dept of the Company.
5. M r. Guo Wanda: He is an Economics Ph. D and researcher. As the executive deputy president of China Development Institute, he
has studied in macro-economy, industry policies and enterprise development strategies for years and provided consulting services. He
is an independent director of the Company.
6. M r. Deng Lei is a law Ph. D and post-doctor in the financial securities law of Shenzhen Stock Exchange. He was once the vice
director of Corporate Law Affair Commission of Shenzhen Lawyer Association and a senior partner of Guangdong China
Commercial Law Firm. He is an independent director of the Company.
7. M r. Guo Jinlong: M aster, Certified Public Accountant of China. He was a member of the fifth session of the CPPCC of Shenzhen
City. He is currently the deputy to the sixth session of the People's Congress of Shenzhen, vice chairman of Guangdong Certified
Public Accountants Association, partner of ShineWing Certified Public Account, and an independent director of the Comp any.
8. Yin Changjian holds bachelor's degree and is a CPA. He once served as the director of Audit and Supervision Department of the
Company and deputy general manager of Fangda Jianke Company Beijing Branch. He is now the director of the Company's
Development Planning Department, the director of the Enterprise M anagement Department, the Company's employee representative
68
2017 Annual Report of China Fangda Group Co., Ltd.
supervisor and the supervisor of the Board of Supervisors.
9. M r. Dong Gelin: Bachelor degree, senior engineer, former designer of Fangda Jianke, chief engineer of the design institute,
assistant to general manager, general manager of Fangda Jianke Beijing Branch, currently serves as deputy general manager of
Fangda Jianke and supervisor of the Company.
10. Ms. Cao Naisi: Bachelor's degree, intermediate economist, former securities affairs representative of the company, supervisor of
the sixth session of the Supervisory Committee, director of audit supervision department, deputy director of human resources
department, general manager of Fangda Jianke Beijing branch, Fangda Jianke South China General M anager of the branch, currently
Deputy General M anager of Fangda Jianke, and supervisor of the Company.
11. M r. Wei Yuexing holds a Bachelor degree and is a senior engineer. He is the vice president of the Company and general manager
of Fangda Jianke.
Offices held at shareholders entities
√ Applicable □ Inapplicable
Whether any
End date remuneration is
Starting date of the
Name Shareholder entity Office of the paid at the
term
term shareholder
entity
Xiong Jianming Shengjiu Investment Ltd. Chairman 06.10.11 No
Gong Qing Cheng Shi Li He Investment
Wei Yuexing M anagement Partnership Enterprise Executive partner 20.12.16 No
(limited partner)
Office
None
description
Offices held at other entities
√ Applicable □ Inapplicable
Whether any
Starting date of the End date of remuneration is
Name Entity name Office
term the term paid at the
shareholder entity
General development research institute Standing vice
Guo Wanda 01.07.07 Yes
(Shenzhen, China) president
Shenzhen Baode Technology Group Co., Independent
Guo Wanda 06.06.08 Yes
Ltd. director
Independent
Guo Wanda Hercules Logistics 01.11.13 Yes
director
Deng Lei Guangdong China Commercial Law Firm Senior partner 01.11.15 Yes
Independent
Deng Lei Wuhan Gaode Infrared Co., Ltd. 23.04.15 Yes
director
Independent
Deng Lei Shenzhen Haimingrun Industrial Co., Ltd. 18.11.14 Yes
director
69
2017 Annual Report of China Fangda Group Co., Ltd.
ShineWing Certified Public Accountants
Guo Jinlong Partner 01.07.06 Yes
(limited liability partnership)
Office
The above-mentioned three are independent directors of the Company.
description
Penalties given by existing securities regulators on directors, supervisors and senior management and those who have resigned in the
report period
√ Applicable □ Inapplicable
According to the "China Securities Regulatory Commission's Administrative Punishment Decision" (2017) No. 101 of December
6, 2017, ShineWing Certified Public Account (Special General Partnership) (hereinafter referred to as ShineWing) had the following
illegal facts:
1. ShineWing violated business rules established legally during the preparation of the IPO (three-year and one period) and the
2014 annual report of Huaiji Dengyun Auto Parts Co., Ltd.
2. ShineWing did not diligently perform their duties and had false records of the audit report issued by Huaiji Dengyun shares in
the 2013 annual report.
The signed certified public accountant and M r. Guo Jinlong, an independent director of the Company that issued the audit report,
were given warnings and a fine of RM B50,000 yuan.
4. Remunerations of the Directors, Supe rvisors and Senior Executives
Decision making procedures, basis and actual payment of remunerations of the Directors, Supervisors and Senior Executives
1. Remuneration schemes for directors and supervisors are proposed by the Remuneration and Assessment Committee of the Board,
and implemented upon approval of the Board and the Shareholders’ M eetings; the remuneration schemes for executives are approved
and implemented by the Board.
Remuneration for directors and supervisors are decided by the shareholders’ meeting. Remunerations for executives are composed of
wages and performance bonus as decided by the Board.
Payment on monthly basis
Remunerations of the Directors, Supervisors and Senior Executives of the Company During the reporting period
In RM B10,000
Remuneration
Total
Name Position Sex Age Job status from related
remuneration
parties
Chairman,
Xiong Jianming M 60 In office 232.86 No
president
Director, vice
Lin Kebin M 40 In office 110.46 No
president
Xiong Jianwei Director M 49 In office 99.49 No
Director, vice
Zhou Zhigang president M 55 In office 92.77 No
secretary of the
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2017 Annual Report of China Fangda Group Co., Ltd.
Board
Independent
Deng Lei M 39 In office 8 No
director
Independent
Guo Wanda M 52 In office 8 No
director
Independent
Guo Jinlong M 56 In office 5.76 No
director
Supervisory
Yin Changjian Committee M 49 In office 51.77 No
meeting convener
Dong Gelin Supervisor M 39 In office 49.64 No
Cao Naisi Supervisor F 39 In office 45.36 No
Wei Yuexing Vice president M 49 In office 98.39 No
Director, vice
Wang Shengguo M 60 Resigned 89.35 No
president
Independent
Lin Bin M 55 Resigned 2.24 No
director
Supervisory
Zhen Hua Committee F 58 Resigned 0.84 No
meeting convener
Zen Xiaowu Supervisor M 48 Resigned 35.47 No
Total -- -- -- -- 930.4 --
Equity incentive programs provided for the Directors, and Senior Executives of the Company during the reporting period
□ Applicable √ Inapplicable
5. Employees
1. Staff number, professional composition and education
Staff number of the parent 58
Staff number of major subsidiaries 1,685
Total staff number 2,150
Number of employees receiving remuneration in the period 2,150
Resigned and retired staff number to whom the parent and major
0
subsidiaries need to pay remuneration
Professional composition
Categories of professions Number of people
Production 697
71
2017 Annual Report of China Fangda Group Co., Ltd.
Sales & M arketing 83
Technicians 1,242
Finance & Accounting 56
Executive 72
Total 2,150
Education
Categories of education Number of people
High school or below 1,015
College diploma 430
Bachelor 681
M aster’s degree 23
Doctor’s degree 1
Total 2,150
2. Remuneration policy
Staff remuneration policy: The Company’s staff remuneration comprises post wage, performance wage, allowance and annual
bonus. The Company has set up an economic responsibility assessment system according to the annual operation target and
responsibility indicators for all departments. The performance wage is determined by the economic indicators, management
indicators, optimization indicators and internal control. The annual bonus is determined by the Company's annual profit and
fulfillment of targets set for various departments. The staff remuneration and welfare will be adjusted according to the Company’s
business operation and changes in the local standard of living and price index.
3. Training program
Staff training plan: The Company has paid continuous attention to training and development of the staff and introduces
innovative learning as part of the long-term strategy. We provide training programs through different channels and in different fields
for different employees will help them fulfill their works, including new staff training, on-the-job training, operation and
management training programs. These programs have largely elevated capabilities of the staff and underpin the success of the
Company.
4. Labor outsourcing
√ Applicable □ Inapplicable
Total number of hours of labor outsourcing 9,551,580.85
Total remuneration paid for labor outsourcing (RM B) 286,547,425.39
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2017 Annual Report of China Fangda Group Co., Ltd.
Chapter 9 Corporation Governance
1. Overvie w
During the report period, the Company strictly complied with the Company Law, Securities Law, Governance Standards for
Listed Companies, Shenzhen Stock Exchange Share Listing Rules, Operation Regulations for Listed Companies in the M ain Board
of Shenzhen Stock Exchange, continued to improve the legal person governance structure and has formulated a series of internal
management systems covering various aspects. The Company has set up a comprehensive and effective internal control system in
important decision making, related transaction decision making, financial management, HR management, administration, purchase,
production and sales management, confidentiality and information disclosure.
M ajor difference between the actual corporate governance and regulations on corporate governance of listed companies issued by
CSRC
□ Yes √ No
There is no major difference between the actual corporate governance and regulations on corporate governance of listed companies
issued by CSRC.
2. Independence of the Company from the controlling shareholde r in aspects of businesses,
personnel, assets, organizations, and accounting
In the aspect of business: the Company has its own purchasing, production, sales, and customer service system which p erforming
independently. There is not any material related transactions occurred with the controlling shareholders.
In personnel: The labor management, personnel and salary management are operated independently from the controlling
shareholder. The senior managements take salaries from the Company and none of them takes senior management position in the
controlling party.
In assets: The Company owns its production, supplementary production system and accessory equipment independently, and
possesses its own industrial properties, non-patent technologies, and trademark.
In organization: The production and business operation, executive management, and department setting are completely
independent from the controlling shareholder. No situation of combined office exists. The Company adjusts its organizing structure
only for its own practical requirement of development and management.
In accounting: The company has its own independent accounting and auditing division, established independent and completed
accounting system and management rules, has its own bank account, and exercise its liability of taxation independently.
3. Competition
□ Applicable √ Inapplicable
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2017 Annual Report of China Fangda Group Co., Ltd.
4. Annual and extraordinary shareholder meetings held during the report period
1. Annual shareholder meeting during the report period
Index for
Participation of
M eeting Type Date Date of disclosure information
investors
disclosure
Notice on
Resolutions of the
Annual
2016 Annual Annual shareholders’
27.47% 11.04.17 12.04.17 Shareholders’
Shareholder M eeting meeting
Meeting (2017-12)
released on
www.cninfo.com.cn
2. Shareholders of preference shares of which voting right resume convening an extraordinary
shareholders’ meeting
□ Applicable √ Inapplicable
5. Performance of independent directors during the report period
1. Independent directors’ presenting of board meetings and shareholders’ meetings in the report period
Independent directors’ presenting of board meetings and shareholders’ meetings in the report period
Time of board Number of Number of
Name of Number of Number of Absent for two
meetings Presented by board meetings shareholders'
independent board meetings board meetings consecutive
should have telecom attended by meetings
director attended not attended meetings
attended proxy attended
Guo Wanda 6 4 2 0 0 No 1
Deng Lei 6 4 2 0 0 No 1
Guo Jinlong 5 2 2 1 0 No 0
Lin Bin 1 1 0 0 0 No 0
Statement for absence for two consecutive board meetings
Inapplicable
2. Objection raised by independent directors
Any objection raised by independent directors against the Company’s related issues
□ Yes √ No
Independent directors made no objection on related issued of the Company in the report period.
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2017 Annual Report of China Fangda Group Co., Ltd.
3. Other statement for performance of independent directors
Adoption of suggestion proposed by independent directors
√ Yes □ No
Statement for suggestion adopted or not by the Company
During the reporting period, the Company’s independent directors strictly followed the relevant laws, regulations and the
―Articles of Association‖ and paid attention to the Company’s operations, attended the Company’s Board of Directors and
shareholders’ meeting, and all the independent directors carefully reviewed the various proposals of the Company’s Board of
Directors and performed their duties conscientiously. The development decision has put forward constructive opinions or suggestions,
and has issued independent opinions on the improvement of the Company's system and major business management matt ers,
corporate guarantees, profit distribution, use of raised funds, etc. Independent directors have adopted the Company’s relevant
recommendations. It has played an active role in safeguarding the interests of the Company and small and medium shareholders .
6. Performance of specific committees under the Board
(1) Performance of the Development Strategy Committee
During the report period, the Development Strategy Committee of the Company has performed its duties in accordance with
the Working Regulations for Development Strategy Committee and played its role in the decision-making process of the Company.
Two meetings were convened and details are disclosed as follows:
1. On 17.03.17, the Company held the 6th meeting of the 7th Development Strategy Commission to listen to the report on
production and operation in 2016 and production and operation plan for 2017.
2. On 28.07.17, the 1st meeting of the Development Strategy Committee of the 8 th term of the Board was held to view the
Company’s production and op eration in the first half of 2017 and studied the fulfillment of the business plan in the first half of the
year and places to be improved in the second half.
(2) Performance of the Auditing Committee
During the report period, five Auditing Committee meetings are held to review issues including the arrangement of audit,
regular financial reports, engaging the CFA, and use of the fund raised. Details of the meetings are disclosed as follows:
1. On 14.03.17, the 13th meeting of the Auditing Committee of the 7th term of the Board was held to review the financial
statements with the initial opinion issued by the CFA for 2016 and approve the auditor report issued by the CFA. After the CFA
issued to final auditor’s opinion, the Auditing Committee submitted the resolution on the annual financial statements to the Board
and issued the summary report on the auditing of the CFA for this year.
2. On 17.03.17, the Company held the 14th audit committee meeting of the 7th Board of Directors to listen to the 2016 financial
and internal audit report and approved (1) audited 2016 financial statements; (2) proposal of engaging the auditor in 2017; (3) 2017
internal audit plan; (4) internal control self-evaluation report in 2016; (5) inspection report on the use of the raised fund in 2016 Q4.
The audit committee suggests that the internal audit body should increase communication with the audit committee to help the
committee better under the Company's condition and make higher requirements on the audit quality. The members of the audit
committee gave professional advice on improving the Company's processes, optimizing the system, and risk prevention from various
perspectives based on their own experience in different industries. They also put forward higher requirements for the Company's
future internal control work.
3. On 21.04.17, the 1st meeting of the Auditing Committee of the 8th term of the Board was held, on which (1) the 2017 Q1
financial statements; (2) inspection report on the use of the raised fund in 2017 Q1 were reviewed.
4. On 26.07.17, the 2nd meeting of the Auditing Committee of the 8th term of the Board was held to review and approve: (1)
unaudited 2017 semi-year financial statements; (2) the 2017 semi-year financial performance; (3) the internal audit report for the first
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2017 Annual Report of China Fangda Group Co., Ltd.
half of 2017; (4) inspection report on the use of the raised fund in 2017 Q2.
5. On 27.10.17, the 3rd meeting of the Auditing Committee of the 8th term of the Board on which the unaudited Q3 financial
statements were approved.
(3) Performance of the Remuneration and Assessment Committee
During the reporting period, the Remuneration and Appraisal Committee of the Company’s Board of Directors held the third
meeting of the Remuneration and Appraisal Committee of the Seventh Board of Directors on M arch 17, 2017 in accordance with the
―Regulations of the Remuneration and Appraisal Committee‖ formulated by the Company, and reviewed and approved (1) The
Company's proposal for 2016 annual remuneration of directors, supervisors and senior management personnel; (2) The Company's
eighth director (including independent directors) and annual supervisory plan for supervisors; (3) The Company's eighth senior
management compensation plan.
7. Performance of Supervisory Committee
(1) Risks for the Company discovered by the S upervisory Committee
□ Yes √ No
No disagreement with supervisory issues by the Supervisory Committee during the report period.
(2) The Supervisory Committee’ Work Report 2017
In 2017, the Supervisory Committee performed its duties and obligations in supervision and protect shareholders’ and the
Company’s interests in accordance with the Company Law, Share Listing Rules, Articles of Association and Rules of the Procedure
of the Supervisory Committee. The 2017 supervisory committee's work plan is as follows:
1. Opinions
(1) Legal compliance
In the report period, the Company has been operated in accordance with law. The convening of meeting of the Board and the
decision-making process are compliant with law, regulations and Articles of Association; the internal control system is solid.
Directors and senior management have performed their obligations. No violation against law, regulations, Articles of Associat ion and
interests of the Company and shareholders was discovered.
(2) Financial condition
During the period, the accounting management has been compliant with the Accounting Law, Enterprise Accounting Standard.
No false, misleading statement or significant omission was found in financial statements. The financial reports of the Company
reflect the Company’s financial position, operation performance, cash flows and major risks truthfully, accurately and completely.
The CPA has issued the standard auditor’s report in 2017, which is objective, fair and truthful. It reflects the Company’s financial
position and operation performance.
(3) Implementation of internal control
The design and operation of the internal control is effective and meets the Company’s management and dev elopment
requirements. It can ensure the truthfulness, lawfulness, completeness of the financial materials and ensure the safety and
completeness of the Company’s property. In 2017, there was no violation by the Company against the Operation Regulations for
Listed Companies in the M ain Board of Shenzhen Stock Exchange and the Company’s internal control system. The 2017 Internal
Control Self-evaluation Report truthfully and objectively reflects the establishment, implementation and improvement of the
Company’s internal control system. There are no significant or important problems in the financial and non-financial reports in the
report period.
2. Meetings and resolutions of the supervisory meeting in the report period:
Five meetings were held in 2017, four of which are on-site meetings, one is voting through telecommunication. All proposals
were approved and disclosed as required:
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2017 Annual Report of China Fangda Group Co., Ltd.
No. M eeting Date Convening method Topic
1. Review the Company's Supervisory Committee
Work Report for 2016；
2. Reviewing the Company's 2016 Annual Report
and Summary;
3. Reviewing the Company's 2016 Financial
Settlement Report;
4. Reviewing the Company's profit distribution plan
for 2016;
5. Reviewing the Company's proposal on engaging
the auditor;
6. Reviewing the Company's 2016 Internal Control
15th meeting of
Self-assessment report;
the 7th
1 17.03.17 On-site 7. Reviewing the Company's raised capital deposit
Supervisory
and use report for 2016;
Committee
8. Reviewing the Company's proposal on terminating
projects funded by raised capital and using the
balance of the raised capital to permanently replenish
the working capital;
9. Reviewing the Company's proposal on using the
surplus of the fund for projects funded by the raised
capital to permanently replenish the working capital;
10. Reviewing the Company's proposal on changing
accounting policies;
11. Reviewing the Company's proposal on
re-electing the Supervisory Committee
1st meeting of
the 8th Electing M r. Yin Changjian as the convener of the
2 11.04.17 On-site
Supervisory 8th Supervisory Committee of the Company
Committee
2nd meeting of
the 8th
3 21.04.17 Telecommunication 2017 Q1 Report and Text
Supervisory
Committee
1. Reviewing the Company's 2017 Interim Report
and Summary;
3rd meeting of
2. Reviewing the proposal on changing the
the 8th
4 28.07.17 On-site accounting estimate for receivable bad debt
Supervisory
provision;
Committee
3. Reviewing the 2017 Interim Report on Deposit
and Use of the Raised Fund
4th meeting of
5 27.10.17 On-site 1. Reviewing the Company's 2017 Q3 report;
the 8th
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2017 Annual Report of China Fangda Group Co., Ltd.
Supervisory 2. Reviewing the change in the government subsidy
Committee account policy;
8. Assessment and motivation of senior executives
The Company has implemented a remuneration system that combines post wage and performance bonus. The wages and bonus
are determined by on the assessment of senior executives’ innovation capabilities, general quality, performance, fulfillment of profit
and payment collection targets according to the Company's annual performance assess and performance assess implementation
methods for wholly-owned subsidiaries.
9. Inte rnal control
1. Major problems in internal control discovered in the report period
□ Yes √ No
2. Internal control self-evaluation report
Date of disclosure of the internal control
24.04.18
evaluation report
Disclosure of the internal control
www.cninfo.com.cn
evaluation report
Percentage of assets in the evaluation
scope in the total assets in the consolidated 96.47%
financial statements
Percentage of operation income in the
evaluation scope in the total operation
97.61%
income in the consolidated financial
statements
Standard
Type Financial report Non-financial report
I. The following problems are considered I. The following condition indicates
major problems: 1. Non-effective control significant problems in the internal
environment; 2. corrupt practice by directors, control of non-financial reports: 1.
supervisor and senior management, causing Serious violation against national laws,
substantial loss and impacts for the regulations or specifications; 2. Serious
Standard
Company; 3. Substantial mistakes in the business system problems and system
financial statements in the period discovered ineffectiveness; 3. M ajor or important
by the CPA, which are not discovered by the problems cannot be corrected; 4. Lack of
internal control; 4. Ineffective supervision of internal control and poor management; 5.
the internal control by the Company’s Loss of management personnel or key
78
2017 Annual Report of China Fangda Group Co., Ltd.
auditing department II. The following employees; 6. Safety and environmental
problems are considered significant accidents that cause major adverse
problems: 1 accounting policies are selected impacts; 7. Other situations that cause
and used without complying to widely major adverse impacts on the Company.
accepted accounting standards; 2. No II. The following situations indicate that
anti-corrupt and important balance system there may be significant problems with
and control measures are taken; 3. Separate the internal control: 1. business system
or multiple problems in the preparation of problems and system ineffectiveness; 2.
financial reports, which are serious enough M ajor or important problems cannot be
to affecting the truthfulness and accuracy of corrected; 3. Other situations that cause
the reports; no control system is established major adverse impacts on the Company
and no related compensation system is III. The following situation indicate
implemented for accounts of irregular or likely normal problems in the internal
special transactions III. Other problems are control: 1. Problems in the general
considered normal problems. business system; 2. Normal problems in
the internal control supervision cannot be
correctly promptly.
I. Significant problem: 1 mistakes affecting
5% and more of the pre-tax profit and more
than RM B5 million in the consolidated
statements; 2. M istakes affecting 5% and
more of the consolidated assets and more
See the recognition standard of the
than RM B5 million. II. Important problem:
Standard internal control problems for financial
1. M istakes affecting 1%-5% of the pre-tax
statements
profit in the consolidated statements; 2.
M istakes affecting 1%-5% the consolidated
assets. III. Normal problem: 1. M istakes
affecting less than 1% of the pre-tax profit
and total assets of the consolidate statements.
Significant problems in financial
0
statements
Significant problems in non-financial
0
statements
Important problems in financial statements 0
Important problems in non-financial
0
statements
X. Internal control audit report
√ Applicable □ Inapplicable
Comments in the internal control audit report
We believe that China Fangda Group has maintained effective internal control on financial rep orts according to Basic Regulations
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2017 Annual Report of China Fangda Group Co., Ltd.
on Enterprise Internal Control and related regulations on 31.12.17.
Disclosure of internal auditor’s
Disclosed
report
Date of disclosure of the internal
24.04.18
control audit report
Source of disclosure of the internal
www.cninfo.com.cn
control audit report
Opinion type Standard opinion auditor’s report
Problems in non-financial
No
statements
Non-standard internal control audit report by the CFA
□ Yes √ No
Consistency between the internal control audit report and self-evaluation report
√ Yes □ No
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2017 Annual Report of China Fangda Group Co., Ltd.
X. Information about the Company’s Securities
Bonds publicly issued and listed in a securities exchange, immature or not fully paid by the approval date of the annual report
No
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2017 Annual Report of China Fangda Group Co., Ltd.
Chapter 11 Financial Statements
I. Auditor’s report
Type Standard opinion auditor’s report
Issued on 20.04.18
Auditor Grant Thornton (limited liability partnership)
Report No. 致同审字（2018）第 350ZA0141 号
CPA names Chen Zhaoxin, Hu Gaosheng
Auditors’ Report
Auditor’s report
致同审字(2018)第350ZA0141号
To the shareholders of China Fangda Group Co., Ltd.:
1. Auditors’ Opinions
We have audited the Financial Statements of China Fangda Group Co., Ltd. (―Fangda Group‖)
attached hereafter, including the Balance Sheet and Consolidated Balance Sheet ended 31.12.17 and
the Income Statement, Consolidated Income Statement, Cash Flow Statement, Consolidated Cash
Flow Statement, Statement on Change of Shareholders’ Equity, Consolidated Statement on Change
of Shareholders’ Equity of the year 2017, as well as the Notes to the Financial Statements.
We believe that Fangda Group has been following with the Enterprise Accounting Standard in
preparing of the Financial Statements. The Financial Statements is reflecting, in all important
aspects, the financial situation of Fangda Group as of 31.12.17, and the business performance and
cash flow of year 2017.
2. Basis of the Opinions
We carried out the auditing works with compliance to Chinese CPA Auditing Standard, The
―CPA's Responsibility for Auditing Financial Statements‖ section of the audit report further
elaborated our responsibilities under these guidelines. In accordance with the Code of Ethics for
Chinese Certified Public Accountants, we are independent of Fangda Group and perform other
professional ethics duties. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
3. Key Audit Matters
The key audit matters are the matters that we believe are most important for the audit of the
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2017 Annual Report of China Fangda Group Co., Ltd.
current financial statements based on professional judgment. The response to these matters is based
on the overall audit of the financial statements and the forma tion of an audit opinion. We do not
comment on these matters separately.
(1) Income recognition
For related information disclosure, please refer to Note III, 25, Note III, 30(4), Note V, 39 and
Note XIII 2 of the financial statements.
1. Description
In 2017, Fangda Group's operating income was RMB2.947 billion, of which construction
contract revenue accounted for about 60%, and real estate sales revenue accounted for about 30% of
the group's total revenue.
Fangda Group confirms revenue for the construction services provided by the construction
according to the percentage of completion method when the results of the construction contract can
be reliably estimated. Management needs to make a reasonable estimate of the initial total contract
revenue and total contract costs for the construction contract and continue to assess and revise it
during the contract implementation process, which involves significant accounting estimates of the
management.
Income from real estate sales is recognized when the contra ct 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.
Therefore, we identify construction contracts and real estate development revenue recognition
as key audit matters.
2. Audit response
Our audit procedures for the implementation of revenue recognition for construction contracts
mainly include:
(1) Understand and evaluate the design of internal control related to management contract and
construction contract budget and revenue recognition, and test the effectiveness of key control
implementation.
(2) Obtain a major construction contract, verify the contract revenue, and reviewed key
contract terms. Check the construction contract and cost budget information on which management
expects total revenue and estimated total cost.
(3) Obtain a construction contract ledger and project income cost summary table, perform an
analytical review of the project gross profit, and recalculate the construction contract completion
percentage and income in the construction contract to verify its accuracy.
(4) Select samples to check the project engineering details of the main project, subcontracted
labor approval forms, and the owner’s production value approval documents and records to verify
the contract costs incurred.
(5) A cut-off test procedure is performed to check whether the cost of the relevant contract was
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2017 Annual Report of China Fangda Group Co., Ltd.
recorded in the appropriate accounting period.
(6) Select a sample to conduct a site inspection of the progress of the project image to verify
the reasonableness of the project's completion schedule.
Our audit procedures for the implementation of revenue recognition for property sales income
mainly include:
(1) Understand and evaluate the design of internal control related to management and property
sales income recognition, and test the effectiveness of key control implementation.
(2) Obtain major sales contracts and review key contract terms.
(3) Sampling check the supporting documents related to revenue confirmation.
(4) Implement certification procedures with important c ustomers.
(5) A cut-off test procedure is performed to check whether the relevant income was recorded
in the appropriate accounting period.
(2) Measurement of fair value of investment real estate
For related information disclosure, please refer to Note III, 15, Note III, 30(2), Note V, 12 (2),
45 and Note IX 2 of the financial statements.
1. Description
As of December 31, 2017, the carrying amount of investment real estate subsequently
measured in the consolidated financial statements using the fair value model was RMB1.492 billion,
and the gains from changes in fair value realized in the current period were RMB 890 million, with
a greater impact on the Group's consolidated statements.
The management of Fangda Group (hereinafter referred to as ―the mana gement‖) annually
employs a third-party assessment agency with relevant qualifications to evaluate the fair value of
the investment real estate. The evaluation adopts the comparison method and the income method to
comprehensively analyze various factors that affect the real estate price of the appraisal subject. The
assessment of the fair value of investment real estate involves many estimates and assumptions,
such as the analysis of the economic environment and future trends of the real estate where the
investment real estate is located, discount rates, etc. The changes in estimates and assumptions will
have big impacts on the fair value of the investment real estate evaluated. Therefore, we identify the
measurement of fair value of investment real estate as a key audit matter.
2. Audit response
Our audit procedures for the measurement of fair value of investment real estate mainly
include:
(1) Assess the competency, professional quality, independe nce and objectivity of third-party
assessment agencies employed by the management.
(2) Obtain the assessment report, selected major or typical samples, and use our real estate
appraisal experts to review and review the assessment methods and assumptions used in the
assessment report and the rationality of the selected key assessment parameters. Check the accuracy
and relevance of the data used by the management in valuation.
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2017 Annual Report of China Fangda Group Co., Ltd.
(3) Review the measurement, presentation and disclosure of fair value of investme nt real estate
in the financial statements.
4. Other information
The management of Fangda Group (hereinafter referred to as management) is responsible for
other information. The other information includes the information covered in Fangda Group's 2017
annual report, but does not include the financial statements and our audit report.
Our audit opinions published in the financial statements do not cover other information and we
do not publish any form of assurance conclusion on other information.
In connection with our audit of the financial statements, our responsibility is to read other
information. In the process, we consider whether there is a material inconsistency or other material
misstatement of other information whether it is in the financial statements or what we have learned
during the audit process.
Based on the work we have performed, if we determine that there is a material misstatement of
other information, we should report that fact. In this regard, we have nothing to report.
5. Executives’ responsibilities on the Financial State ments
(1) Preparing these financial statements according to the Accounting Standards for Business
Enterprises and presenting them fairly; (2) designing, implementing and maintaining necessary
internal control to make sure that these financial statements are free from material misstatement,
whether due to fraud or error.
In the preparation of the financial statements, the management is responsible for assessing
Fangda Group's ability to continue as a going concern, disc losing issues related to going concern (if
applicable), and applying the going concern assumption unless management plans to liquidate
Fangda Group, terminate operations or there are no other realistic choices.
The management is responsible for overseeing the financial reporting process of Fangda
Group.
6. Auditor's responsibility for auditing financial state ments
Our objective is to obtain reasonable assurance as to whether the entire financial statements
are free from material misstatement due to fraud or error and to issue an audit report containing
audit opinions. Reasonable assurance is a high level of assurance, but it does not guarantee that an
audit performed in accordance with auditing standards can always be discovered when a major
misstatement exists. The report may be due to fraud or mistakes, and if a reasonable expectation of
misstatement alone or aggregated may affect the economic decision- making made by users of
financial statements based on the financial statements, the misstatement is gener ally considered to
be material.
In the process of conducting audit work in accordance with auditing standards, we use
professional judgment and maintain professional suspicion. At the same time, we also perform the
following tasks:
(1) Identify and assess risks of material misstatement of financial statements due to fraud or
errors, design and implement audit procedures to address these risks, and obtain adequate and
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2017 Annual Report of China Fangda Group Co., Ltd.
appropriate audit evidence as a basis for issuing audit opinions. S ince fraud may involve collusion,
falsification, intentional omission, misrepresentation or override of internal controls, the risk of
failing to detect a material misstatement due to fraud is higher than the risk of failing to detect a
material misstatement due to an error.
(2) Understand audit-related internal controls to design appropriate audit procedures.
(3) Evaluate the appropriateness of accounting policies adopted by the management and the
reasonableness of accounting estimates and related disclosures.
(4) Conclude on the appropriateness of management's use of continuing operations
assumptions. At the same time, based on the audit evidence obtained, it concludes that whether
there are major uncertainties in the matters or circumstances that may ca use major doubts about the
ability of the Company’s continuing operations. If we conclude that there are significant
uncertainties, the auditing standards require us to request the users of the report to pay attention to
the relevant disclosures in the financial statements in the audit report; if the disclosure is not
sufficient, we should publish non- unqualified opinions. Our conclusions are based on the
information available as of the date of the audit report. However, future events or circumstances
may result in Fangda Group's inability to continue operating.
(5) Evaluate the overall presentation, structure, and content (including disclosure) of the
financial statements and evaluate whether the financial statements fairly reflect the relevant
transactions and events.
(6) Obtain sufficient and appropriate audit evidence on the financial information of entity or
business activities in Fangda Group to express opinions on the financial statements. We are
responsible for directing, supervising and executing group audits and assume full responsibility for
audit opinions.
We communicate with the governance team on planned audit scope, timing, and major audit
findings, including communication of the internal control deficiencies that we identified during the
audit.
We also provide a statement to the management on compliance with ethical requirements
related to independence, and communicate with the management on all relationships and other
matters that may reasonably be considered to affect our independence, as well as related preventive
measures (if applicable).
From the matters passed with the management, we determine which items are most important
for the audit of the financial statements of the current period and thus constitute the key audit
matters. We describe these matters in our audit report, unless laws and regulations prohibit the
public disclosure of these matters, or in rare cases, if it is reasonably expected that the negative
consequences of communicating something in the audit report will outweigh the benefits in the
public interest, we determine that such matter should not be communicated in the audit report.
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2017 Annual Report of China Fangda Group Co., Ltd.
Grand Thornton CPA CPA China
(limited liability partnership) (project partner)
CPA China
Beijing, China April 30, 2018
II. Financial statements
Unit for statements in notes to financial statements: RM B yuan
1. Consolidated Balance Sheet
Prepared by: China Fangda Group Co., Ltd.
In RM B
Items Closing balance Opening balance
Current asset:
M onetary capital 1,180,398,479.51 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 2,232,200.00
Notes receivable 39,636,437.20 18,898,106.11
Account receivable 1,920,372,426.16 2,342,929,628.14
Prepayment 54,680,269.84 31,526,326.25
Insurance receivable
Reinsurance receivable
Provisions of reinsurance contracts
receivable
Interest receivable 3,829,315.07 302,950.68
Dividend receivable
Other receivables 57,075,357.62 57,378,994.72
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2017 Annual Report of China Fangda Group Co., Ltd.
Repurchasing of financial assets
Inventory 819,610,960.67 1,990,621,059.27
Assets held for sales
Non-current assets due in 1 year
Other current assets 439,890,493.06 62,206,574.33
Total current assets 4,515,493,739.13 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 34,142,055.62 12,105,030.68
Investment real estate 2,253,794,404.55 333,795,631.30
Fixed assets 468,118,279.18 506,819,266.38
Construction in process 2,668,198.62 2,537,725.36
Engineering materials
Disposal of fixed assets
Productive biological assets
Gas & petrol
Intangible assets 58,869,444.53 60,228,652.69
R&D expense
Goodwill
Long-term amortizable expenses 2,046,202.29 3,695,766.33
Deferred income tax assets 230,597,590.58 176,796,698.56
Other non-current assets 31,130,198.46 61,184,253.71
Total of non-current assets 3,109,928,949.50 1,185,725,600.68
Total of assets 7,625,422,688.63 6,787,051,278.08
Current liabilities
Short-term loans 616,000,000.00 591,000,000.00
Loans from Central Bank
Deposit received and held for
others
Call loan received
Financial liabilities measured at
fair value with variations accounted into
88
2017 Annual Report of China Fangda Group Co., Ltd.
current income account
Derivative financial liabilities 159,000.00
Notes payable 532,921,025.48 557,301,320.45
Account payable 946,392,258.92 1,275,255,961.34
Prepayment received 175,351,686.45 285,905,444.13
Selling of repurchased financial
assets
Fees and commissions payable
Employees’ wage payable 40,399,130.75 41,972,342.66
Taxes payable 136,955,516.44 192,236,574.40
Interest payable 2,425,311.97 2,634,979.47
Dividend payable
Other payables 501,189,510.69 366,182,799.41
Reinsurance fee payable
Insurance contract provision
Entrusted trading of securities
Entrusted selling of securities
Liabilities held for sales
Non-current liabilities due in 1
200,000,000.00
year
Other current liabilities 9,531,014.81 35,148,084.44
Total current liabilities 3,161,324,455.51 3,347,637,506.30
Non-current liabilities:
Long-term loans 893,978,153.39 922,169,568.24
Bond payable
Including: preferred stock
Perpetual bond
Long-term payable
Long-term employees’ wage
payable
Special payables
Anticipated liabilities 6,368,353.05 3,156,625.24
Deferred earning 10,489,483.94 11,567,224.78
Deferred income tax liabilities 314,323,040.56 200,207,003.35
Other non-current liabilities
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2017 Annual Report of China Fangda Group Co., Ltd.
Total of non-current liabilities 1,225,159,030.94 1,137,100,421.61
Total liabilities 4,386,483,486.45 4,484,737,927.91
Owner’s equity:
Share capital 1,183,642,254.00 789,094,836.00
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 8,585,847.99 2,130,454.52
Special reserves
Surplus reserves 110,690,396.65 88,839,790.50
Common risk provisions
Retained profit 1,863,191,218.58 1,016,820,576.30
Total of owner’s equity belong to the
3,238,939,202.18 2,364,262,560.28
parent company
M inor shareholders’ equity -61,949,210.11
Total of owners’ equity 3,238,939,202.18 2,302,313,350.17
Total of liabilities and owner’s interest 7,625,422,688.63 6,787,051,278.08
Legal representative: Xiong Jianming CFO: Lin Kebing Accounting M anager: Wu Bohua
2. Balance Sheet of the Parent Company
In RM B
Items Closing balance Opening balance
Current asset:
M onetary capital 310,299,329.68 81,148,314.87
Financial assets measured at fair
value with variations accounted into
current income account
Derivative financial assets
Notes receivable
Account receivable 408,154.54 454,140.85
Prepayment 349,740.31 110,132.27
Interest receivable 1,020,000.00
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2017 Annual Report of China Fangda Group Co., Ltd.
Dividend receivable 150,000,000.00 430,000,000.00
Other receivables 672,773,780.45 459,354,983.42
Inventory
Assets held for sales
Non-current assets due in 1 year
Other current assets 100,176,058.36 334,228.97
Total current assets 1,235,027,063.34 971,401,800.38
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 925,349,494.35 897,444,525.03
Investment real estate 307,321,568.00 296,740,660.63
Fixed assets 55,816,611.77 55,081,689.15
Construction in process
Engineering materials
Disposal of fixed assets
Productive biological assets
Gas & petrol
Intangible assets 2,293,133.59 1,531,179.93
R&D expense
Goodwill
Long-term amortizable expenses 460,000.00 252,857.40
Deferred income tax assets 23,409,576.18 57,076,777.66
Other non-current assets 120,000,000.00
Total of non-current assets 1,343,212,959.56 1,456,690,265.47
Total of assets 2,578,240,022.90 2,428,092,065.85
Current liabilities
Short-term loans 250,000,000.00 190,000,000.00
Financial liabilities measured at
fair value with variations accounted into
current income account
Derivative financial liabilities
Notes payable 33,692,909.97
Account payable 606,941.85 606,941.85
91
2017 Annual Report of China Fangda Group Co., Ltd.
Prepayment received 721,888.86 965,234.08
Employees’ wage payable 2,151,237.91 2,338,896.51
Taxes payable 11,721,681.36 460,424.30
Interest payable 365,520.83 288,513.75
Dividend payable
Other payables 287,607,287.54 65,436,929.77
Liabilities held for sales
Non-current liabilities due in 1
year
Other current liabilities
Total current liabilities 553,174,558.35 293,789,850.23
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 63,864,007.22 124,088,349.06
Other non-current liabilities
Total of non-current liabilities 63,864,007.22 124,088,349.06
Total liabilities 617,038,565.57 417,878,199.29
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 0.00
Other miscellaneous income 8,756,553.46 91,831.63
Special reserves
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2017 Annual Report of China Fangda Group Co., Ltd.
Surplus reserves 110,690,396.65 88,839,790.50
Retained profit 586,376,124.33 665,903,861.54
Total of owners’ equity 1,961,201,457.33 2,010,213,866.56
Total of liabilities and owner’s interest 2,578,240,022.90 2,428,092,065.85
3. Consolidated Income Statement
In RM B
Items Amount occurred in the current period Occurred in previous period
1. Total revenue 2,947,470,813.58 4,203,866,173.72
Incl. Business income 2,947,470,813.58 4,203,866,173.72
Interest income
Insurance fee earned
Fee and commission
received
2. Total business cost 2,529,847,562.87 3,433,363,681.99
Incl. Business cost 1,998,238,889.21 2,595,170,483.35
Interest expense
Fee and commission paid
Insurance discharge payment
Net claim amount paid
Net insurance policy
reserves provided
Insurance policy dividend
paid
Reinsurance expenses
Taxes and surcharges 191,789,929.01 380,834,706.42
Sales expense 61,063,948.40 59,273,046.14
Administrative expense 152,816,680.30 171,922,091.39
Financial expenses 67,058,846.06 28,255,397.43
Asset impairment loss 58,879,269.89 197,907,957.26
Plus: gains from change of fair value
892,408,648.26 16,862,823.13
("-" for loss)
Investment gains ("-" for loss) 102,891,113.42 61,228,848.36
Incl. Investment gains from
-2,162,975.06 -1,384,650.25
affiliates and joint ventures
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2017 Annual Report of China Fangda Group Co., Ltd.
Exchange gains ("-" for loss)
Investment gains ("-" for loss) 5,027,717.19 -1,960,467.09
Other gains 6,582,481.58
3. Operational profit ("-" for loss) 1,424,533,211.16 846,633,696.13
Plus: non-operational income 8,382,787.23 18,217,491.06
Less: non-operational expenditure 8,073,399.54 4,875,428.76
4. Gross profit ("-" for loss) 1,424,842,598.85 859,975,758.43
Less: Income tax expenses 273,795,377.34 203,985,326.44
5. Net profit ("-" for net loss) 1,151,047,221.51 655,990,431.99
(1) Net profit from continuous
1,128,107,423.83 764,894,738.52
operation ("-" for net loss)
(2) Net profit from discontinuous
22,939,797.68 -108,904,306.53
operation ("-" for net loss)
Net profit attributable to the owners
1,144,404,441.03 697,956,378.23
of parent company
M inor shareholders’ equity 6,642,780.48 -41,965,946.24
6. After-tax net amount of other misc.
6,455,393.47 2,038,622.89
incomes
After-tax net amount of other misc.
6,455,393.47 2,038,622.89
incomes attributed to parent's owner
(1) Other misc. incomes that cannot
be re-classified into gain and loss
1. Change in net liabilities or
assets due to re-measurement set benefit
program
2. Shares enjoyed in other
misc. incomes that cannot be reclassified
into gain and loss by the invested entity
under the equity law
(2) Other misc. incomes that will be
6,455,393.47 2,038,622.89
re-classified into gain and loss
1. Shares enjoyed in other
misc. incomes that cannot be reclassified
into gain and loss by the invested entity
under the equity law
2．Change in the fair value of
financial asset for sale
3 Held-to-mature investment
94
2017 Annual Report of China Fangda Group Co., Ltd.
reclassified as gain and loss in the
financial assets for sales
4. Effective part in the gain
-1,959,992.79 1,840,142.79
and loss of arbitrage of cash flow
5. Translation difference of
-249,335.57 198,480.10
foreign exchange statement
6. Others 8,664,721.83
After-tax net of other misc. income
attributed to minority shareholders
7. Total of misc. incomes 1,157,502,614.98 658,029,054.88
Total of misc. incomes attributable
1,150,859,834.50 699,995,001.12
to the owners of the parent company
Total misc gains attributable to the
6,642,780.48 -41,965,946.24
minor shareholders
8. Earnings per share:
(1) Basic earnings per share 0.970 0.600
(2) Diluted earnings per share 0.970 0.600
Net profit contributed by entities merged under common control in the report period was RM B0.00, net profit realized by parties
merged during the previous period is RM B0.00.
Legal representative: Xiong Jianming CFO: Lin Kebing Accounting M anager: Wu Bohua
4. Income Statement of the Parent Company
In RM B
Items Amount occurred in the current period Occurred in previous period
1. Turnover 29,333,583.31 34,208,627.97
Less: Operation cost 2,041,826.84 8,308,449.63
Taxes and surcharges 1,329,711.99 2,093,529.75
Sales expense
Administrative expense 26,156,987.68 24,802,740.83
Financial expenses -508,902.33 7,625,177.79
Asset impairment loss -39,145,789.67 80,645,069.52
Plus: gains from change of fair
1,820,847.37 11,896,250.38
value ("-" for loss)
Investment gains ("-" for loss) 158,138,502.44 428,620,774.41
Incl. Investment gains from
-2,142,252.28 -1,384,650.25
affiliates and joint ventures
95
2017 Annual Report of China Fangda Group Co., Ltd.
Investment gains ("-" for loss) -3,913.82 1,794.87
Other gains 819,420.96
2. Operational profit ("-" for loss) 200,234,605.75 351,252,480.11
Plus: non-operational income 3,065,841.55 10,028,412.69
Less: non-operational expenditure 3,164,398.33 111,955.73
3. Gross profit ("-" for loss) 200,136,048.97 361,168,937.07
Less: Income tax expenses -18,370,012.57 -15,993,422.84
4. Net profit ("-" for net loss) 218,506,061.54 377,162,359.91
(1) Net profit from continuous
218,506,061.54 377,162,359.91
operation ("-" for net loss)
(2) Net profit from discontinuous
0.00
operation ("-" for net loss)
5. After-tax net amount of other misc.
8,664,721.83 0.00
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
8,664,721.83
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
96
2017 Annual Report of China Fangda Group Co., Ltd.
foreign exchange statement
6. Others 8,664,721.83
6. Total of misc. incomes 227,170,783.37 377,162,359.91
7. Earnings per share:
(1) Basic earnings per share
(2) Diluted earnings per share
5. Consolidated Cash Flow Statement
In RM B
Items Amount occurred in the current period Occurred in previous period
1. Net cash flow from business
operations:
Cash received from sales of
3,418,351,614.70 3,561,159,973.46
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 3,804,545.99 1,289,574.20
97
2017 Annual Report of China Fangda Group Co., Ltd.
Other cash received from business
127,738,857.46 148,750,746.09
operation
Sub-total of cash inflow from business
3,549,895,018.15 3,711,200,293.75
operations
Cash paid for purchasing products
2,001,850,190.24 2,574,194,385.29
and services
Net increase of client trade and
advance
Net increase of savings in central
bank and brother company
Cash paid for original contract
claim
Cash paid for interest, processing
fee and commission
Cash paid for policy dividend
Cash paid to and for the staff 253,752,112.76 242,199,199.79
Taxes paid 474,915,595.80 261,263,312.43
Other cash paid for business
261,543,973.62 167,826,321.32
activities
Sub-total of cash outflow from business
2,992,061,872.42 3,245,483,218.83
operations
Cash flow generated by business
557,833,145.73 465,717,074.92
operations, net
2. Cash flow generated by investment:
Cash received from investment
11,062,067,410.96 556,946,806.49
recovery
Cash received as investment profit 135,457,226.80 4,177,483.53
Net cash retrieved from disposal of
fixed assets, intangible assets, and other 15,664,032.91 14,083,430.40
long-term assets
Net cash received from disposal of
488,779.75
subsidiaries or other operational units
Other investment-related cash
received
Sub-total of cash inflow generated from
11,213,677,450.42 575,207,720.42
investment
Cash paid for construction of fixed
39,773,885.41 96,992,511.42
assets, intangible assets and other
98
2017 Annual Report of China Fangda Group Co., Ltd.
long-term assets
Cash paid as investment 11,563,042,000.00 587,000,000.00
Net increase of loan against pledge
Net cash paid for acquiring
subsidiaries and other operational units
Other cash paid for investment 2,666,097.15
Subtotal of cash outflows 11,602,815,885.41 686,658,608.57
Cash flow generated by investment
-389,138,434.99 -111,450,888.15
activities, net
3. Cash flow generated by financing
activities:
Cash received from investment 460,899,992.60
Incl. Cash received from
investment attracted by subsidiaries
from minority shareholders
Cash received from borrowed
978,503,029.59 1,597,773,986.18
loans
Cash received from bond placing
Other cash received from financing
53,500,094.24
activities
Subtotal of cash inflow from financing
978,503,029.59 2,112,174,073.02
activities
Cash paid to repay debts 790,000,000.00 1,626,425,600.00
Cash paid as dividend, profit, or
359,248,335.73 152,697,478.73
interests
Incl. Dividend and profit paid by
subsidiaries to minority shareholders
Other cash paid for financing
1,307,919.17
activities
Subtotal of cash outflow from financing
1,149,248,335.73 1,780,430,997.90
activities
Net cash flow generated by financing
-170,745,306.14 331,743,075.12
activities
4. Influence of exchange rate changes
-2,488,444.45 2,076,069.73
on cash and cash equivalents
5. Net increase in cash and cash
-4,539,039.85 688,085,331.62
equivalents
Plus: Balance of cash and cash 935,824,575.40 247,739,243.78
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2017 Annual Report of China Fangda Group Co., Ltd.
equivalents at the beginning of term
6. Balance of cash and cash equivalents
931,285,535.55 935,824,575.40
at the end of the period
6. Cash Flow Statement of the Parent Company
In RM B
Items Amount occurred in the current period Occurred in previous period
1. Net cash flow from business
operations:
Cash received from sales of
26,119,015.91 41,662,670.48
products and providing of services
Tax refunded
Other cash received from business
1,250,545,372.09 2,230,632,211.84
operation
Sub-total of cash inflow from business
1,276,664,388.00 2,272,294,882.32
operations
Cash paid for purchasing products
36,569,179.86 9,897,439.60
and services
Cash paid to and for the staff 16,683,356.55 12,981,383.71
Taxes paid 2,804,616.75 3,958,332.35
Other cash paid for business
1,184,826,856.40 2,414,510,247.91
activities
Sub-total of cash outflow from business
1,240,884,009.56 2,441,347,403.57
operations
Cash flow generated by business
35,780,378.44 -169,052,521.25
operations, net
2. Cash flow generated by investment:
Cash received from investment
3,757,868,645.34 161,000,000.00
recovery
Cash received as investment profit 514,225,411.35 8,991,698.17
Net cash retrieved from disposal of
fixed assets, intangible assets, and other 4,002,100.00
long-term assets
Net cash received from disposal of
subsidiaries or other operational units
Other investment-related cash
received
100
2017 Annual Report of China Fangda Group Co., Ltd.
Sub-total of cash inflow generated from
4,272,094,056.69 173,993,798.17
investment
Cash paid for construction of fixed
assets, intangible assets and other 1,850,897.55 281,433.15
long-term assets
Cash paid as investment 3,846,012,000.00 64,000,000.00
Net cash paid for acquiring
subsidiaries and other operational units
Other cash paid for investment
Subtotal of cash outflows 3,847,862,897.55 64,281,433.15
Cash flow generated by investment
424,231,159.14 109,712,365.02
activities, net
3. Cash flow generated by financing
activities:
Cash received from investment 460,899,992.60
Cash received from borrowed
250,000,000.00 440,000,000.00
loans
Cash received from bond placing
Other cash received from financing
94.24
activities
Subtotal of cash inflow from financing
250,000,000.00 900,900,086.84
activities
Cash paid to repay debts 190,000,000.00 698,425,600.00
Cash paid as dividend, profit, or
284,121,945.63 93,249,879.82
interests
Other cash paid for financing
1,307,919.17
activities
Subtotal of cash outflow from financing
474,121,945.63 792,983,398.99
activities
Net cash flow generated by financing
-224,121,945.63 107,916,687.85
activities
4. Influence of exchange rate changes
4.86 70.42
on cash and cash equivalents
5. Net increase in cash and cash
235,889,596.81 48,576,602.04
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 310,049,329.68 74,159,732.87
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2017 Annual Report of China Fangda Group Co., Ltd.
at the end of the period
7. Statement of Change in Owners’ Equity (Consolidated)
Amount of the Current Term
In RM B
Current period
Owners’ Equity Attributable to the Parent Company
M inor
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
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 6,455,3 21,850, 846,370 61,949, 936,625
7,418. 7,418.0
term ("-" for 93.47 606.15 ,642.28 210.11 ,852.01
00 0
decrease)
1,144,4 1,157,5
(1) Total of misc. 6,455,3 6,642,7
04,441. 02,614.
incomes 93.47 80.48
03 98
(2) Investment or
55,306, 55,306,
decreasing of
429.63 429.63
capital by owners
102
2017 Annual Report of China Fangda Group Co., Ltd.
1. Common shares
contributed by
shareholders
2. Capital
contributed by
other equity
instrument holders
3. Amount of
shares paid and
accounted as
owners’ equity
55,306, 55,306,
4. Others
429.63 429.63
-298,03 -276,18
(3) Profit 21,850,
3,798.7 3,192.6
allotment 606.15
5 0
1. Providing of 21,850, -21,850,
surplus reserves 606.15 606.15
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. M aking up
losses by surplus
reserves
4. Others
(5) Special
reserves
103
2017 Annual Report of China Fangda Group Co., Ltd.
1. Provided this
year
2. Used this term
(6) Others
1,183, 1,863,1 3,238,9
4. Balance at the 72,829, 8,585,8 110,690
642,25 91,218. 39,202.
end of this period 484.96 47.99 ,396.65
4.00 58 18
Amount of the Previous Term
In RM B
Last period
Owners’ Equity Attributable to the Parent Company
M inor
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
32,184
change in current 388,277 2,038,6 37,716, 584,549 -76,495 968,270
,931.0
term ("-" for ,283.82 22.89 235.99 ,151.74 ,960.14 ,265.30
0
decrease)
(1) Total of misc. 2,038,6 697,956 -41,965 658,029
incomes 22.89 ,378.23 ,946.24 ,054.88
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2017 Annual Report of China Fangda Group Co., Ltd.
(2) Investment or 32,184
427,684 -34,530 425,339
decreasing of ,931.0
,583.13 ,013.90 ,500.23
capital by owners 0
1. Common shares 32,184
427,684 459,869
contributed by ,931.0
,488.89 ,419.89
shareholders 0
2. Capital
contributed by
other equity
instrument holders
3. Amount of
shares paid and
accounted as
owners’ equity
-34,530 -34,529,
4. Others 94.24
,013.90 919.66
-113,40
(3) Profit 37,716, -75,690,
7,226.4
allotment 235.99 990.50
9
1. Providing of 37,716, -37,716,
surplus reserves 235.99 235.99
2. Common risk
provision
3. Allotment to the
-75,690, -75,690,
owners (or
990.50 990.50
shareholders)
4. Others
(4) Internal
transferring of
owners’ equity
1. Capitalizing of
capital reserves (or
to capital shares)
2. Capitalizing of
surplus reserves
(or to capital
shares)
3. M aking up
losses by surplus
reserves
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4. Others
(5) Special
reserves
1. Provided this
year
2. Used this term
-39,407, -39,407,
(6) Others
299.31 299.31
789,09 1,016,8 2,302,3
4. Balance at the 467,376 2,130,4 88,839, -61,949
4,836. 20,576. 13,350.
end of this period ,902.96 54.52 790.50 ,210.11
00 30 17
8. Statement of Change in Owners’ Equity (Parent Company)
Amount of the Current Term
In RM B
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 91,831.63
836.00 46.89 0.50 ,861.54 ,866.56
current year
3. Amount of
change in current 394,547, -394,547, 8,664,721 21,850,60 -79,527, -49,012,4
term ("-" for 418.00 418.00 .83 6.15 737.21 09.23
decrease)
(1) Total of misc. 8,664,721 218,506 227,170,7
incomes .83 ,061.54 83.37
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(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
accounted as
owners’ equity
4. Others
-298,03
(3) Profit 21,850,60 -276,183,
3,798.7
allotment 6.15 192.60
5
1. Providing of 21,850,60 -21,850,
surplus reserves 6.15 606.15
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
418.00 418.00
owners’ equity
1. Capitalizing of
394,547, -394,547,
capital reserves (or
418.00 418.00
to capital shares)
2. Capitalizing of
surplus reserves
(or to capital
shares)
3. M aking up
losses by surplus
reserves
4. Others
(5) Special
reserves
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1. Provided this
year
2. Used this term
(6) Others
4. Balance at the 1,183,64 71,736,12 8,756,553 110,690,3 586,376 1,961,201
end of this period 2,254.00 8.89 .46 96.65 ,124.33 ,457.33
Amount of the Previous Term
In RM B
Last period
Other equity tools Other
Less: Total of
Items Share Capital miscellan Special Surplus Retaine
Preferre Perpetu Shares in owners’
capital Others reserves eous reserves reserves d profit
d share al bond stock equity
income
1. Balance at the 756,909, 38,598,96 51,123,55 402,148 1,248,872
91,831.63
end of last year 905.00 3.76 4.51 ,728.12 ,983.02
Plus:
Changes in
accounting
policies
Correction of
previous errors
Others
2. Balance at the
756,909, 38,598,96 51,123,55 402,148 1,248,872
beginning of 91,831.63
905.00 3.76 4.51 ,728.12 ,983.02
current year
3. Amount of
change in current 32,184,9 427,684,5 37,716,23 263,755 761,340,8
term ("-" for 31.00 83.13 5.99 ,133.42 83.54
decrease)
(1) Total of misc. 377,162 377,162,3
incomes ,359.91 59.91
(2) Investment or
32,184,9 427,684,5 459,869,5
decreasing of
31.00 83.13 14.13
capital by owners
1. Common shares
32,184,9 427,684,4 459,869,4
contributed by
31.00 88.89 19.89
shareholders
2. Capital
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2017 Annual Report of China Fangda Group Co., Ltd.
contributed by
other equity
instrument holders
3. Amount of
shares paid and
accounted as
owners’ equity
4. Others 94.24 94.24
-113,40
(3) Profit 37,716,23 -75,690,9
7,226.4
allotment 5.99 90.50
9
1. Providing of 37,716,23 -37,716,
surplus reserves 5.99 235.99
2. Allotment to the
-75,690, -75,690,9
owners (or
990.50 90.50
shareholders)
3. Others
(4) Internal
transferring of
owners’ equity
1. Capitalizing of
capital reserves (or
to capital shares)
2. Capitalizing of
surplus reserves
(or to capital
shares)
3. M aking up
losses by surplus
reserves
4. Others
(5) Special
reserves
1. Provided this
year
2. Used this term
(6) Others
4. Balance at the 789,094, 466,283,5 88,839,79 665,903 2,010,213
91,831.63
end of this period 836.00 46.89 0.50 ,861.54 ,866.56
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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 M aterial Co., Ltd., by way of share issuing in October 1995. The unified social credit code is:
91440300192448589C; registered address: Fangda Building, Kejinan Road 12, High-tech Zone, Shenzhen. M r. 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 Ap ril
1996 respectively in Shenzhen Stock Exchange. The Company received the Reply to the Non-public Share Issuance of Fangda China
Group Co., Ltd. (CSRC License [2016] No.825) to allow the Company to conduct non-public issuance of 32,184,931 A-shares in
June 20116. According to the profit distribution plan for 2016 approved by the 2016 general shareholders' meeting, the Company
issued five shares for every ten shares to all shareholders through surplus capitalization based on the total 789,094,836 shares on
December 31, 2016. The registered capital of the Company is RMB1,183,642,254.00.
The Company has established a corporate governance structure that comprises shareholders’ meeting, board of directors and
supervisory committee. Currently, the Company sets up the President Office, Administrative Department, HR Department, Enterprise
M anagement 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
M aterial, 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.
The financial statements and notes are approved at the 7 th meeting of the 8th term of the Board held on 20.04.18
The consolidation scope for the consolidated financial statements includes the Company and all subsidiaries. Two subsidiaries are
newly consolidated in this period. Two subsidiaries are no longer consolidated. Jiangxi Fangda New Aluminum Co., Ltd. was
cancelled. Shares in Guangdong Fangda SOZN Lighting Co., Ltd. were transferred. See Note VIII Change to consolidation scope and
Note IX Interests in other entities.
IV. Basis for the preparation of financial statements
1. Preparation basis
The financial statements are prepared according to the enterprise financial standard and guidelines, interpretation and other related
regulations (―the Standard‖) issued by the M inistry of Finance. In addition, the Group also complies with the "Regulations on the
Compilation and Submission of Information Disclosures by Companies That Offer Securities to the Public No. 15 - General
Provisions on Financial Reporting" (revised in 2014) and the "Rules for the Compilation and Submission of Information Disclosures
to Companies That Publicly Issue Securities" No. 11 - Special Provisions on the Notes to the Financial Statements of Companies
Engaged in Real Estate Development Disclosure of Financial Information.
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2017 Annual Report of China Fangda Group Co., Ltd.
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 Company assessed the continuing operations capability of the Comp any for the 12 months from the end of the reporting period.
No matters were found that would affect the Company's ability to continue as a going concern. It is reasonable for the Company to
prepare financial statements based on continuing operations.
V. Significant Account Policies and Estimates
Whether the Company needs to comply with disclosure requirements of special industries
Yes
Property development and decoration industries
Specific accounting policy and estimate prompt:
The Group determines the accounting policies and income recognition policies for investment real estate according to the production
and business features. For details, see Note V. 13 and Note V. 22.
1. Statement of compliance to the Enterprise Accounting Standard
The financial report and statements are prepared with compliance to the requirement of the Enterprise Accounting Standard. They
reflect the financial position as of 31.12.17, 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.
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2017 Annual Report of China Fangda Group Co., Ltd.
4. Bookkeeping standard money
The Company, domestic subsidiaries and overseas subsidiary Shihui International Holding Co., Ltd. use RM B as bookkeeping
standard money. Overseas subsidiaries Automatic System (Hong Kong) Co., Ltd. and Fangda Australia Pty Ltd use HKD and AUD
as bookkeeping standard money respectively. The Group prepares financial statements in RM B.
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 valu e 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 p olicies.
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
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 c apital
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 as sets and
liabilities (if any) acquired by the Group from the acquired party are recognized on the fair valu e.
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 t he 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.
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2017 Annual Report of China Fangda Group Co., Ltd.
(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. M ajor 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
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 percent age, 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
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2017 Annual Report of China Fangda Group Co., Ltd.
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 contin uously
from the acquisition date according to the original shareholding percentage and the goodwill should be recorded in the in vestment
gain of the current period of the loss of control power.
Other misc. incomes related to the equity investment in the original subsidiary is transferred to the current period’s profit and loss
when the control power is lost, except for the other misc. incomes generated by re-measurement and resetting of earning plan or
change in the net assets by the invested party.
7. Recognition of cash and cash equivalents
Cash refers to cash on hand and deposits that can be used at any time for payment. Cash equivalent refers to the investments with
short term, strong liquidity and small risk of value fluctuation that are held by the Group and easily converted into cash with known
amount.
8. Foreign exchange business and foreign exchange statement translation
(1) Foreign currencies
Trades of the Group made in foreign currencies are translated into RM B 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
are exchanged with the spot exchange rate on the determination date of the fair value. The exchange difference between the
accounting standard-currency amount and the original accounting standard-currency amount are included in the current profits and
losses.
(2) Translation of foreign exchange statement
On the balance sheet date, when foreign currency financial statements of overseas subsidiaries are converted, the assets and liabilities
items in the balance sheet are converted using the spot exchange rate on the balance sheet date. The shareholders’ equity items are
calculated as ―undistributed profits‖, except for other items. The spot exchange rate on the date of occurrence is used for conversion.
The income and expense items in the income statement are translated using the exchange rate that is determined by the system’s
reasonable method and approximate to the spot exchange rate on the transaction date.
All items in the cash flow statement are converted according to the exchange rate that is determined by the system's reasonable
method and approximate to the spot exchange rate on the day the cash flow occurs. The impact of changes in exchange rates on cash
is used as a reconciliation item, which is separately presented in the cash flow statement ―Items Affecting Exchange Rate M ovements
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2017 Annual Report of China Fangda Group Co., Ltd.
on Cash and Cash Equivalents‖.
The difference arising from the translation of the financial statements is reflected in the "Other comprehensive income" item under
the shareholders' equity item in the balance sheet.
When foreign operations are disposed of and the control rights are lost, the difference in foreign currency statements related to the
overseas operations that are listed in the shareholders' equity items in the balance sheet is transferred to the profit or lo ss for the
current period, either in whole or in proportion to the disposal of the foreign operations.
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 derecognition 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 derecognition condition.
When partial or all of the current responsibilities attached to such financial liabilities, the partial or all of the financial liabilities are
derecognized. When the Group (debtor) and creditor enter into an agreement to replace the existing financial liabilities by
undertaking new financial liabilities and the contract terms for the new financial liabilities are essentially different from those for the
existing one, the existing financial liabilities will be derecognized and new financial liabilities will be recognized.
Financial asset transactions in regular ways are recognized and de-recognized on the transaction date.
(2) Classification and measurement of financial assets
Financial assets of the Group are categorized as: financial assets measured at fair value with variations accounted into current income
account, receivables and financial assets available for sales. Financial assets are measured at the fair value at the initial recognition.
For financial assets measured at fair value with variations accounted into current income account,
related transaction expenses are accounted into the current income. For other financial assets, the related
transaction expenses are accounted into the initial recognized amounts.
Financial assets measured at fair value with variations accounted into current income account
It includes transactional financial assets and financial assets measured by fair value and with variations accounted into current
gain/loss account at initial recognition. The financial assets are further measured by fair value with the gain/loss created by variations
in fair value and related dividends and interest accounted into the current gain/loss account.
Receivables
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2017 Annual Report of China Fangda Group Co., Ltd.
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 curren t
gain/loss account.
Sellable financial assets
Sellable financial asset refers to those sellable non-derivate financial assets recognized initially and financial assets other than the
above-mentioned types of financial assets. Sellable financial assets are further measured by fair value and the premium/discount is
amortized by the effective interest method and recognized as interest income. Other than the exchange difference of impairment loss
and foreign exchange monetary financial assets, which is recognized as current gain and loss, the variations in fair value of sellable
financial assets is recognized as other comprehensive gain. When it is derecognized and transferred out, it is accounted into the
current gain/loss account. Dividends and interest income related to sellable financial assets are accounted into the current gain/loss
account.
Equity instrument investment without quotation in an active market and whose fair value cannot be reliably measured and derivative
financial assets that are linked to the equity instrument and that need to be settled through delivery of the equity instruments are
measured by costs.
(3) Classification and measurement of financial liabilities
The Group’s financial liabilities are mainly other financial liabilities
Other financial liabilities adopt the effective interest method and are further measured by amortized cost. Gain/loss generat ed at final
recognition or amortization is accounted into the current gain/loss account.
Differences between financial liabilities and equity instruments
Financial liabilities is liabilities that meet one of the following conditions:
(1) contractual obligation to deliver cash or other financial assets to other parties.
(2) under potential adverse conditions, the contractual obligation to exchange financial assets or financial liabilities with other
parties.
(3) In the future, a non-derivative instrument contract that can be settled with the company's own equity instruments will be used, and
the company will deliver a variable amount of its own equity instruments based on the contract.
(4) Derivatives contracts that may be settled with the company's own equity instruments or may be settled in the future, except for a
derivative contract that exchanges a fixed amount of its own equity instruments for a fixed amount of cash or other financial assets.
Equity instruments refer to contracts that prove the ownership of a company’s remaining equity in assets after deducting all
liabilities.
If the Group cannot unconditionally avoid the performance of a contractual obligation by delivering cash or other financial assets, the
contractual obligation is in line with the definition of financial liabilities.
If a financial instrument is required to be settled with or can be settled with the Group's own equity instruments, the Group 's own
equity instrument used to settle the instrument needs to be considered as a substitut e for cash or other financial assets or for the
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2017 Annual Report of China Fangda Group Co., Ltd.
holder of the instrument to enjoy the remaining equity in the assets after all liabilities are deducted. If it is the former, the instrument
is the financial liabilities of the Group; if it is the latter, the instrument is the equity instrument of the Group.
(4) Derivative financial instruments and embedded derivatives
The Group's derivative financial instruments include futures contracts. It is initially measured at the fair value at the dat e of signing
the derivative transaction contract and is subsequently measured at its fair value. Derivative financial instruments with a posit ive fair
value are recognized as asset, and instruments with a negative fair value are recognized as liabilities. Any gains or loss es arising from
changes in fair value that do not meet the hedge accounting requirements are directly charged to profit or loss for the current period.
For hybrid instruments containing embedded derivatives, if there are no financial assets or financial liabilities that are not designated
as measured at fair value and their changes are recorded as profit or loss for the current period, there is no close relationship between
the embedded derivatives and the principal contract in terms of economic characteristics and risks with same conditions as embedded
derivatives, the separately existing tools are in accordance with the definition of the derivatives, the embedded derivatives are split
from the hybrid tools and processed as separate derivative financial instruments. If it is not possible to separately measure the
embedded derivative instrument at the time of acquisition or on the subsequent balance sheet date, the entire hybrid instrument is
designated as financial asset or financial liabilities that are measured at its fair value and whose changes are recorded as profit or loss
for the current period.
(5) Fair value of financial instrument
Fair value is the price that can be obtained from selling an asset or paid for transferring liabilities in an orderly transaction on the
measurement date.
The Group measures the related assets or liabilities at fair value, assuming that the orderly sale of assets or transfer of liabilities is
carried out in the main market of the relevant assets or liabilities; if there is no major market, the Group assumes that the transaction
is the most advantageous in the relevant assets or liabilities. The major market (or the most advantageous market) is the trading
market that the Group can enter on the measurement date. The Group uses assumptions that market participants use to maximize their
economic benefits when pricing the asset or liability.
For financial assets or liabilities in an active market, the Group determines their fair value based on quotations in the act ive market. If
there is no active market, the Company uses evaluation techniques to determine the fair value.
For the measurement of non-financial assets at fair value, the ability of market participants to use the assets for optimal purposes to
generate economic benefits, or the ability to sell the assets to other market participants that can be used for optimal purposes to
generate economic benefits.
The Group uses valuation techniques that are applicable in the current circumstances and have sufficient available data and other
information to support the use of the relevant observable input values prioritized. Unobservable input values are used only when the
observable input value cannot be obtained or is not feasible.
For assets and liabilities that are measured or disclosed at fair value in the financial statements, based on the lowest level input value
that is of significance to the overall fair value measurement, the level of fair value to which they belong is determined: Th e input
value at the first level can be calculated at the measurement date. Unadjusted quotes for the same assets or liabilities that have been
obtained in active markets; input values at the second level are input values that are directly or indirectly observable for the
underlying assets or liabilities other than those entered at the first level; Level 3 inputs are Unobservable inputs to relat ed assets or
liabilities.
At each balance sheet date, the Group reassesses the assets and liabilities that are continuously measured at fair value and confirmed
in the financial statements to determine whether there is a conversion between the fair value measurement levels.
(6) Impairment of financial assets
Financial assets measured at fair value with variations accounted into current income account. The Group checks the book value of
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2017 Annual Report of China Fangda Group Co., Ltd.
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
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, determin e the
impairment loss and account it into the current gain/loss account. For financial assets with insignificant single amounts, impairment
tests are conducted separately or included in the portfolio of financial assets with similar credit risk characteristics. Tes t 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 fin ancial
assets on the reversal date assuming that no impairment provision was made.
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2017 Annual Report of China Fangda Group Co., Ltd.
(7) Transfer of financial assets
The transfer of financial assets refers to transferring or delivering the financial assets to another party (receiver) other than the issuing
party of the financial assets.
Recognition of the financial asset is terminated as soon as all of the risks and rewards attached to the financial asset have been
transferred to the receiver. Whereas if all of the risks and rewards attached to the financial assets are reserved, recognition of the
financial asset shall not be terminated.
When the Group neither transfers nor reserve almost all risks and rewards attached to the financial assets, it will be handled as: When
the controlling power over the financial asset is given up, the financial assets will be derecognized and the generated assets and
liabilities will be recognized; when the controlling power is not given up, financial asset and related liability shall be recognized
according to the extend the Company is involving in the financial asset.
(8) Deduction of financial assets and liabilities
When the Group has the legal right to deduct recognized financial assets and liabilities, can exercise the legal right, and t he 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 RM B10 million (inclusive) as ―individual receivable with
large amount‖ while recognizes product receivables over RM B2
Judging basis or standard of major individual amount
million (included) as ―individual receivable with large amount‖
and other receivables over RM B1 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 M ethod of bad debt provision
Account age Aging method
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Receivables within consolidation, receivables of real estate
property sold with bank mortgage and accounts between the Other method
Company and partners
Receivables adopting the aging method in the group:
√ Applicable □ Inapplicable
Providing rate for receivable account Providing rate for
Age
Engineering Real estate Others other receivables
Within 1 year (inclusive) 1.00% 1.00% 3.00% 3.00%
1-2 years 5.00% 5.00% 10.00% 10.00%
2-3 years 20.00% 10.00% 30.00% 30.00%
3-4 years 30.00% 30.00% 50.00% 50.00%
4-5 years 50.00% 50.00% 80.00% 80.00%
Over 5 years 100.00% 100.00% 100.00% 100.00%
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
The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure
Guideline No.6 – Listed Companies Engaged in Decoration Business.
Reasons for separate bad debt provision Long account age or deterioration of customer creditability
According to the difference between the present value of future
M ethod of bad debt provision
cash flow and the book value
11. Inventories
Whether the Company needs to comply with disclosure requirements of special industries
Yes
Property development and decoration industries
(1) Classification of inventories
The Group’s inventories include purchased materials, raw materials, low-value consumables, packing materials, OEM materials,
products in process, semi-finished goods, finished goods, inventory, development costs, development products and construction in
process.
(2) Pricing of delivering inventory
Inventories are measured at cost when procured. Raw materials, products in process, commodity stocks in transit and self-made
semi-finished products are measured by the weighted average method.
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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 a ccount if the
conditions are not met.
The development costs include land transfer payment, infrastructure and facility costs, installation engineering costs, borrows before
completion of the development and other costs during the development process. The actual costs of the development product is
priced using the separate pricing method.
(3) Recognition of inventory realizable value and providing of impairment provision
The realizable net value of inventory is the estimated sales prices of the inventory less costs to be incurred until the completion,
estimated sales expense and taxes. The realizable net value of inventory should be recognized based on solid evidence with the
purpose of the inventory and after-balance-sheet-date events taken into consideration.
If the inventory cost is higher than the realizable net value on the balance sheet date, the inventory depreciation provision should be
made. The Group makes inventory depreciation provision for separate or a type of inventory. If factors affecting the inventory value
disappear on the balance sheet date, the depreciation provision made should be reversed to the original value.
(4) Inventory system
The Group uses perpetual inventory system.
(5) Amortizing of low-value consumables and packaging materials
Low-value consumables are amortized on on-off amortization basis at using.
12. Long-term share equity investment
The Group's long-term equity investment includes control on invested entities and significant impacts on equity investment. Invested
entities on which the Group has significant impacts are associates of the Group.
(1) Recognition of initial investment costs
Long-term equity investment generated by enterprise merger: for long-term equity investment obtained by merger of enterprises
under common control, the obtained share of book value of the interests of the merged party’s owner in the consolidate financial
statements on the merger date is the investment costs; for long-term equity investment obtained by merger of enterprises not under
common control, the merger cost is the investment cost.
For long-term equity investment obtained by cash, the actually paid consideration is the initial investment cost.
(2) Subsequent measurement and recognition of gain/loss
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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 remainin g equity
after the disposal should be treated according to the Enterprise Accounting Standard No.22 – Recognition and M easurement 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
the Enterprise Accounting Standard No.22 – Recognition and M easurement of Financial Tools. The difference between the fair va lue
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 betw een
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.
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Internal transaction gain 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
M ajor 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 Co mpany
shall not participate in the production and bus iness 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) Equity investment held for sale
For the remaining equity investments not classified as assets held for sale, the equity method is adopted for accounting treatment.
Equity investments classified as held for sale to associates that are no longer eligible to hold classified assets for sale are
retrospectively adjusted using the equity method starting from the date that they are classified as held for sale.
(5) 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
M easuring mode of investment real estate
M easurement 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 v alue mode to
measure the investment real estate subsequently. Variations in fair value are accounted into the current gain/loss account.
The fair value of investment real estate is determined with reference to the current market prices of same or similar real es tates in
active markets; when no such price is available, with reference to the recent transaction prices and consideration of factors includin g
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 investment real estate under construction (including investment real estate under construction for the first time), if the fair value
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cannot be reliably determined but the expected fair value of the real estate after completion is continuously and reliably obtained, the
investment real estate under construction is measured by cost. When the fair value can be measured reliably or after completion (the
earlier one), it is measured at fair value. For an investment real estat e whose fair value is proven unable to be obtained continuously
and reliably by objective evidence, the real estate will be measured at cost basis until it is disposed and no residual value remains as
assumed.
The difference of the proceeds from sales, transfer, retirement or destruction of investment real estates with book value and related
taxes deducted is accounted into the current gain/loss account.
Investment real estate that use the cost method for further measurement adopt the straight -line depreciation provision method. See
Note V. 18 for the provision method.
14. Fixed assets
(1) Recognition conditions
Fixed assets is defined as the tangible assets which are held for the purpose of producing goods, providing services, lease or for
operation & management, and have more than one accounting year of service life. The fixed assets can only be recognized hen
economic interests related to the fixed assets are very likely to flow into the company and the costs of the fixed assets can be reliably
measured. The Group measures fixed assets at the actual costs when the fixed assets are obtained
(2) Depreciation method
Annual depreciation
Type (2) Depreciation method Service year Residual rate
rate %
Houses & buildings Average age 35-45 10% 2%-2.57%
M echanical 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
Whether the Company needs to comply with disclosure requirements of special industries
Yes
Property development and decoration industries
The Group recognizes the cost of construction in process according to the actual construction expense, including necessary
engineering expenses, borrowing costs to be capitalized before the engineering reaches the preset service condition and other related
costs.
Construction in process will be transferred to fixed assets when it reaches the preset service condition.
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See Note V. 18 for the provision method for construction in process.
16. Borrowing expenses
(1) Recognition principles for capitalization of borrowing expenses
Borrowing expenses occurred to the Group that can be accounted as purchasing or production of asset satisfying the conditions of
capitalizing, are capitalized and accounted as cost of related asset. Borrowing expenses start to be capitalized when all of the
followings are satisfied:
(1) Asset expense has already occurred. Asset expenses include cash payment, non-cash asset transferring, or undertaking of debt
with interest done for purchasing or producing of assets;
(2) The borrowing expense has already occurred;
(3) Purchasing or production activity, which is necessary for the asset to reach the useful status, has already started.
(2) During borrowing expense capitalization
When the asset satisfying the capitalizing conditions has reached its usable or sellable status, capitalizing of borrowing expenses shall
be terminated. Borrowing expenses incurred after assets that meet capitalization conditions reach the service or sales conditions are
accounted into the current gain/loss account according to the actual amounts.
If the construction or production of assets satisfying the capitalizing conditions is suspended abnormally for over 3 months,
capitalizing of borrowing expenses shall be suspended. During the normal suspension period, borrowing expenses will be capitalized
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,
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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 years Average age
Proprietary technology 10 years 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 us eful life. If
they change, adjust the prediction and handle it according to accounting estimate changes.
On the balance sheet day, if the intangible assets become unlikely to bring future economic benefits for the Group, transfer all the
intangible assets’ book value into the current gain/loss account.
See Note V. 18 for the impairment provision method for intangible assets.
(2) Accounting policies for internal R&D expenses
The Group divides internal R&D project expenses into research and development expenses.
The research expenses are accounted the current gain/loss account.
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
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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 t he
predicted future cash flow. The Group estimates the recoverable amount on the individual asset item basis; whether it is hard to
estimate the recoverable amount on the individual asset item basis, determine the recoverable amount based on the asset group that
the assets belong to. The assets group is determined by whether the main cash flow generated by the group is independent from those
generated by other assets or assets groups.
When the recoverable amount of the assets or assets group is lower than its book value, the Group writes down the book value to the
recoverable amount, the write-down amount is accounted into the current income account and the assets impairment provision is
made.
For goodwill impairment test, the book value of goodwill generated by mergers is amortized through reasonable measures since the
purchase day to related asset groups; those cannot be amortized to related assets groups are amortized to related combination of asset
groups. The related asset groups or combination of asset groups refer to those that can benefit from the synergistic effect of mergers
and must not exceed to the reporting range determined by the Group.
When the impairment test is conducted, if there is sign of impairment to the asset group or combination of asset groups relat ed 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 pro vide
service, and the financial impacts are substantial, the liabilities should be measured at the discounted amount.
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(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 o f the
following two date: when the Group cannot cancel the dismiss welfare provided for termination of employment or layoff; when the
Group recognizes the costs or expenses of reorganization related to the payment of dismiss welfare.
21. Anticipated liabilities
When responsibilities occurred in connection to contingent issues, and all of the following conditions are satisfied, they are
recognized as expectable liability in the balance sheet:
(1) This responsibility is a current responsibility undertaken by the Group;
(2) Execution of this responsibility may cause financial benefit outflow from the Group;
(3) Amount of the liability can be reliably measured.
Expected liabilities are initially measured at the best estimation on the expenses to exercise the current responsibility. The book value
of expected liability is revised at balance sheet day, and adjustment will be made to reflect current best estimation.
22. Revenue
Whether the Company needs to comply with disclosure requirements of special industries
Yes
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) M ain 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 us ually attached to ownership; (3)
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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 cont ract cost can be recovered,
the revenue is recognized according to the actual contract costs that can be recovered and the contract cost is recognized as the
current expense; if not, the contract cost is recognized as the current expense and no revenue is recognized.
If the estimated total costs exceed the total revenue, the Group recognizes the estimated loss as the current expense.
The competition percentage is determined by the share of the costs incurred in the total cost.
The reliable estimation of the result of a construction contract must meet the following conditions: A. the revenue can be reliably
measured; B. the economic benefit is very likely to flow into the company; C. the completion cost can be clearly distinguished and
determined reliably; D. the completion and costs that will be incurred for completion of the contract can be reliably recognized.
(2) Specific revenue recognition method
① Construction contracts
M etro 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
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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 agr eed rate. For
these construction contracts, income will be recognized when ongoing payment for the project is received and corresponding co sts
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 p er
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.
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. None monetary capital are
measured at fair value; if no reliable fair value available, recognized at RM B1.
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.
If the asset-related government subsidy is recognized as deferred gain, should be recorded in gain and loss in the service life.
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(2) Judgment basis and accounting treatment of return-related government subsidy
If a government subsidy related to income is used to compensate for related costs or losses that have occurred, it shall be included in
the current profit or loss or write-down related costs; if it is used to compensate for the related costs or losses in the subsequent
period, it shall be included in the deferred income. During the period in which the related cost, expense or loss is recogniz ed, it is
included in the current profit or loss or the relevant cost is written off. Government subsidy measured at the nominal amount is
accounted into current income account. The Group adopts a consistent approach to the same or similar government subsidies.
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.
When a confirmed government subsidy needs to be returned, the book value of the asset is adjusted against the book value of the
relevant asset at initial recognition. If there is a related deferred income balance, the book balance of the related deferred income is
written off and the excess is credited to the current profit or loss; In ot her cases, it is directly included in the current profit and loss.
The policy-based preferential loan obtained has interest subsidy. If the government allocates the interest -subsidy funds to the lending
bank, the loan amount actually received will be used as the entry value of the loan, and the borrowing cost will be calculated based
on the loan principal and policy -based preferential interest rate. If the government allocates the interest -bearing funds directly to the
Group, discount interest will offset the borrowing costs.
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 inco me
tax related to transactions or events directly accounted into the owners’ equity, income tax is accounted as income tax expense into
the current gain/loss account.
The Group uses the temporary difference between the book value of the assets and liabilities on the balance sheet day and the tax
base and the liabilities method to recognize the deferred income tax.
The taxable temporary difference recognizes the related deferred income tax liabilities, unless the taxable temporary difference is
created by the following transactions:
(1) Initial recognition of goodwill, or of assets or liabilities generated in transactions with the following features: the t ransaction 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
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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 ass ets
recovery and liabilities repayment way on the balance sheet day.
On the balance sheet day, the Group re-examines the book value of the deferred income tax assets. If it is unlikely to have adequate
taxable proceeds to reduce the benefits of the deferred income tax assets, less the deferred income tax assets’ book value. When there
is adequate taxable proceeds, the lessened amount will be reversed.
25. Leasing
(1) Accounting of operational leasing
The Group transfers all the risks and rewards attached to the asset at substantially transferred to the lessee, it is recognized as
financial leasing, and the others are operational leasing. The Group's lease forms are mainly operating leases.
(1) The Group is the leasor
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
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
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 f uture
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 help of valuation
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2017 Annual Report of China Fangda Group Co., Ltd.
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 b een
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
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 lo wer 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
Account policy changes and reasons Approval procedure Notes
According to the "Enterprise Accounting Standards No. 16 - Government Subsidies" (2017), 4th meeting of the 8th
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2017 Annual Report of China Fangda Group Co., Ltd.
the accounting treatment of government subsidies was changed from the total amount method Supervisory
to the net amount method, and the amortization method of deferred income related to Committee
government subsidies related to assets was changed from average allocation in service life to
reasonable and systematic method of allocation. The rep resentation of government subsidy
items was also revised. The government subsidies that have not been amortized on January 1,
2017 and the government subsidies obtained in 2017 should use the revised guidelines. The
new disclosure requirements do not need to provide comparative information, and do not adjust
the presentation of other incomes in the comparative report accordingly.
Enterprise Accounting Standard No. 42 - Non-current Assets held for sale, disposal group and
discontinued operation, classification, measurement and presentation of non-current assets or
disposal groups held for sale after M ay 28, 2017, and the presentation of discontinued
operations are regulated, and will be handled in accordance with the future applicable laws; the
presentation of financial statements will be revised, and profit and loss from continuing 7th meeting of the 8th
operations and profit and loss from termination of operations shall be listed in the consolidated Supervisory
income statement and profit statement, respectively. The presentation of the comparative Committee
statements has been adjusted accordingly: For the termination of operations presented in the
current period, the information originally presented as a profit or loss from continuing
operations was re-stated as a discontinued operating profit or loss in the comparative
statements.
According to the ―Notice on Amendments to the Format for Issuing Financial Statements for
General Enterprises‖ (Accounting [2017] No. 30), the newly ―asset disposal proceeds‖ item
was added to the income statement to reflect the sale of non-current assets classified as held for
sale by enterprises (excluding financial instruments, long-term equity investment and
investment real estate) or disposal group, disposal profit or loss recognized at the time of
disposing of the disposal group, disposal of fixed assets, construction in progress, productive
biological assets and intangible assets not treated for sale gains or losses, gains or losses arising
7th meeting of the 8th
from the disposal of non-current assets in debt restructuring and gains or losses arising from
Supervisory
the exchange of non-monetary assets. Correspondingly, the item ―including: non-current assets
Committee
disposal gains‖ and ―including: non-current assets disposal losses‖ were deleted under
―non-operating income‖ and ―non-operating expenses‖. "Non-operating income" and
"non-operating expenses" reflect revenues other than operating profits incurred by the
Company, mainly including gains and losses from debt restructuring, government subsidies
that are unrelated to the Company's daily activities, public welfare donation expenses,
extraordinary losses, and profit from disc operations. Loss, donation gains, loss of non-current
assets, damages, etc. The presentation of the comparative report was adjusted accordingly.
The above changes in accounting policies have little impact on the Group.
(2) Changes in major accounting estimates
√ Applicable □ Inapplicable
Account policy changes and Approval procedure Effective time Notes
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2017 Annual Report of China Fangda Group Co., Ltd.
reasons
To reflect the Company's
financial position and operating
results more cautiously, and to
meet requirements of business
development and enterprise
accounting standards, objective
and fairly, the Company will
make the accounting estimate
3rd meeting of the 8th
change of bad debt provision 01.08.17
Supervisory Committee
standard for receivables. The
change will become valid on
August 1, 2017. For details,
please read the Notice on the
Accounting Estimate Change of
Bad Debt Provision Standard
for Receivables released on the
same date.
Changes in the accounting estimates affected by this accounting item and the impact amount are as follows:
Amount affected in items of related financial reports
Affected item
as of December 31, 2017/2017
Account receivable 68,924,798.26
Other receivables -5,380,145.47
Deferred income tax assets -10,450,024.69
Surplus reserves -3,476.23
Retained profit 53,098,104.33
Asset impairment loss -63,544,652.79
Income tax expenses 10,450,024.69
Net profit attributable to the shareholders of the parent company 53,094,628.10
VI. Taxation
1. Major taxes and tax rates
Tax Tax basis Tax rate
VAT Taxable income 3%、5%、6%、11%、13%、17%
City maintenance and construction tax Taxable turnover 1%、5%、7%
Enterprise income tax Taxable turnover See the following table
Education surtax Taxable turnover 3%
Local education surtax Taxable turnover 2%
Tax rates applicable for different tax payers
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2017 Annual Report of China Fangda Group Co., Ltd.
Tax payer Income tax rate
The Company 25%
Shenzhen Fangda Jianke Co., Ltd. (hereinafter Fangda Jianke) 15%
Shenzhen Fangda Automatic System Co., Ltd. (hereinafter
15%
Fangda Automatic)
Fangda New M aterial (Jiangxi) Co., Ltd. (hereinafter Fangda
15%
New M aterial)
Jiangxi Fangda New Type Aluminum Co., Ltd. (hereinafter
25%
Fangda Aluminum)
Dongguan Fangda New M aterial Co., Ltd. (hereinafter
15%
Dongguan New M aterial)
Shenzhen Kexunda Software Co., Ltd. (hereinafter Kexunda) 25%
Chengdu Fangda Construction Technology Co., Ltd. (hereinafter
15%
Chengdu Fangda)
Fangda Decoration Engineering (Shenyang) Co., Ltd.
25%
(hereinafter Shenyang Decoration)
Shenzhen Fangda Property Development Co., Ltd. (hereinafter
25%
Fangda Property Development)
Shenzhen Fangda New Energy Co., Ltd. (hereinafter Fangda
25%
New Energy)
Gangdong Fangda SOZN Lighting Co., Ltd. (hereinafter Fangda
25%
SOZN)
Shenzhen Fangda Property Development Co., Ltd. (hereinafter
25%
Fangda Property Development)
Jiangxi Fangda Property Development Co., Ltd. (hereinafter
25%
Jiangxi Property Development)
Pingxiang Fangda Luxin New Energy Co., Ltd. (hereinafter
25%
Luxin New Energy)
Pingxiang Xiangdong Fangda New Energy Co., Ltd. (hereinafter
25%
Xiangdong New Energy)
Nanchang Xinjian Fangda New Energy Co., Ltd. (hereinafter
25%
Xinjian New Energy)
Dongguan Fangda New Energy Co., Ltd. (hereinafter Dongguan
25%
New Energy)
Shenzhen QIanhai Kechuangyuan Software Co., Lt.d (hereinafter
15%
Kechuangyuan Software)
Fangda Automatic (Hong Kong) Co., Ltd. (hereinafter
16.50%
Automation Hong Kong)
136
2017 Annual Report of China Fangda Group Co., Ltd.
Shihui International Holding Co., Ltd. (hereinafter Shihui
16.50%
International)
Shenzhen Hongjun Investment Co., Ltd. 25%
Fangda Australia Pty Ltd (hereinafter Jianke Australia) 30%
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 M inistry of Science and Technology, Jiangxi M inistry of
Finance, Jiangxi National Tax Bureau, and Jiangxi Local Tax Bureau on 25.09.15, Fangda New M aterial was entitled to enjoy a t ax
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 encouraged industry
company in the west China (Xin Jin National Tax Doc. [zzy024]) and started to enjoy a tax rate of 15%.
(6) On 02.11.15, Dongguan New Energy was certified by Dongguan National Tax Bureau Songshanhu branch as the national
supported public infrastructure project according to the Song Shan Hu Tax Doc [2015] 3305. The company is exempted from
enterprise income tax for three years and half exempted for another three years. In 2015, the company entered the exemption period.
(7) On 02.03.16, according to the document issued by Luxi National Tax Bureau, the PV power generation project undertaken by
Pingxiang Fangda Luxin New Energy Co., Ltd, became the infrastructure project supported by the central government. The company
enjoys a three-year enterprise income tax relief and 50% reduction for another three years. In 2016, the company entered the
exemption period.
(8) On 02.06.16, according to the document issued by Nanchang Xinjian District National Tax Bureau, the PV power generation
project undertaken by subsidiary Xinjian New Energy Company, became the infrastructure project supported by the central
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.
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2017 Annual Report of China Fangda Group Co., Ltd.
(10) According to the Certification of High-tech Enterprise issued by Guangdong M inistry of Science and Technology, Guangdong
M inistry of Finance, Guangdong National Tax Bureau, and Guangdong Local Tax Bureau on 25.09.15, Dongguan New M aterial was
entitled to enjoy a tax preference of enterprise income tax of 15% for three years (2016-2018) since the qualifications were awarded.
VII. Notes to the consolidated financial statements
1. Monetary capital
In RM B
Items Closing balance Opening balance
Inventory cash: 42,636.09 11,625.54
Bank deposits 923,163,199.39 932,709,227.42
Other monetary capital 257,192,644.03 162,508,984.94
Total 1,180,398,479.51 1,095,229,837.90
Including: total amount deposited in
24,527,445.09 27,553,060.26
overseas
Other note
(1) The closing balance of the book value of the other monetary capital is RM B257,192,644.03 mainly the futures, bank acceptance
bill and guarantee deposit and investment.
(2) The deposit and frozen deposit shall not be treated as cash and cash equivalent in the preparation of cash flow statements.
2. Financial assets measured at fair value with variations accounted into current income account
In RM B
Items Closing balance Opening balance
None
3. Derivative financial assets
√ Applicable □ Inapplicable
In RM B
Items Closing balance Opening balance
Futures contracts 2,232,200.00
Total 2,232,200.00
Others:
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2017 Annual Report of China Fangda Group Co., Ltd.
4. Notes receivable
(1) Classification of notes receivable
In RM B
Items Closing balance Opening balance
Bank acceptance 12,376,780.96 11,819,567.96
Commercial acceptance 27,259,656.24 7,078,538.15
Total 39,636,437.20 18,898,106.11
(2) The Group has no endorsed or discounted immature receivable notes at the end of the period.
In RM B
Items De-recognized amount Not de-recognized amount
Bank acceptance 85,674,785.04
Commercial acceptance 8,966,861.59
Total 94,641,646.63
Other note
There is no objective evidence that the Group’s bills receivable are impaired and no provision for impairment of bills receivable has
been accrued.
Bank acceptance bills used for endorsement or discounting are accepted by banks with higher credit ratings, the risk of credit risk and
deferred payment is small, and the interest rate risk related to the bills has been transferred to banks, and the main risks and rewards
on the ownership of the bills can be judged Transfer, so the termination of confirmation.
5. Account receivable
(1) Account receivable disclosed by categories
In RM B
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 2,573,1
2,123,26 202,895, 1,920,372 230,259,2 2,342,929,6
providing of bad debt 99.38% 9.56% 88,876. 98.35% 8.95%
8,342.78 916.62 ,426.16 48.17 28.14
provisions on groups 31
Account receivable 13,339,6 0.62% 13,339,6 100.00% 43,290, 1.65% 43,290,08 100.00% 0.00
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2017 Annual Report of China Fangda Group Co., Ltd.
with minor individual 59.73 59.73 086.64 6.64
amount and bad debt
provision provided
individually
2,616,4
2,136,60 216,235, 1,920,372 273,549,3 2,342,929,6
Total 100.00% 10.12% 78,962. 100.00% 10.45%
8,002.51 576.35 ,426.16 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 RM B
Closing balance
Age
Account receivable Bad debt provision Provision rate
Sub-item of within 1 year
Less than 1 year 984,591,278.62 11,633,960.33 1.18%
Subtotal for less than 1 year 984,591,278.62 11,633,960.33 1.18%
1-2 years 600,749,666.72 30,751,974.81 5.12%
2-3 years 308,450,295.06 62,128,109.75 20.14%
3-4 years 98,684,305.24 29,769,355.47 30.17%
4-5 years 46,128,901.11 23,088,620.23 50.05%
Over 5 years 45,523,896.03 45,523,896.03 100.00%
Total 2,084,128,342.78 202,895,916.62 9.74%
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:
At the end of the period, the balance of receivables from the real estate properties sold by bank mortgage payment was
RM B39,140,000.00. Because the risk of bad debts was extremely small, no provision for bad debts was made.
(2) Bad debt provision made, returned or recovered in the period
A bad debt provision of RM B117,090.96 was made in the period. RM B19,500,377.90 was recovered or reversed.
(3) Written-off account receivable during the period
In RM B
140
2017 Annual Report of China Fangda Group Co., Ltd.
Items Amount
Account receivable written off 11,482,088.73
(4) Balance of top 5 accounts receivable at the end of the period
The total balance of top-five accounts receivable at the end of the period is RM B274,458,979.85, accounting for 12.85% of the total
remaining balance of all accounts receivable. The bad debt provision made at the end of the period is RM B15,743,277.44.
(5) Receivables derecognized due to transfer of financial assets
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2017 Annual Report of China Fangda Group Co., Ltd.
Gain or loss related to the
Items Way of transfer De-recognized amount
de-recognition
Customer 1 Factoring 2,512,252.43 133,510.29
Customer 2 Factoring 10,141,866.67 609,521.31
Customer 3 Factoring 43,469,999.20 2,521,337.02
Customer 4 Factoring 7,925,315.49 374,015.45
Customer 5 Factoring 43,395,000.00 2,466,366.53
Total 107,444,433.79 6,104,750.60
6. Prepayment
(1) Account age of prepayments
In RM B
Closing balance Opening balance
Age
Amount Proportion Amount Proportion
Less than 1 year 45,346,974.64 82.93% 28,442,485.03 90.22%
1-2 years 7,891,890.96 14.43% 1,224,651.51 3.88%
2-3 years 679,375.39 1.24% 540,874.20 1.72%
Over 3 years 762,028.85 1.40% 1,318,315.51 4.18%
Total 54,680,269.84 -- 31,526,326.25 --
Explanation of non-settlement of significant prepayments with an accounting age of more than 1 year:
Items Closing amount Reason
Shenzhen Hongtao Decoration Engineering Co.,
5,135,316.31 Not mature
Ltd.
(2) Balance of top 5 prepayments at the end of the period
The total balance of top -five prepayments at the end of the period is RM B36,403,435.52, accounting for 66.58% of the total
remaining balance of all accounts receivable. The bad debt provision made at the end of the period is RM B0.
Others:
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2017 Annual Report of China Fangda Group Co., Ltd.
7. Receivable interest
(1) Receivable interest
In RM B
Items Closing balance Opening balance
Bank financial products 3,829,315.07 302,950.68
Total 3,829,315.07 302,950.68
8. Other receivables
(1) Other receivables disclosed by categories
In RM B
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
69,380,5 69,380,5
amount and bad debt 48.04% 100.00%
48.52 48.52
provision provided
individually
(2) Recognition and
74,563,7 17,681,7 56,881,95 67,471, 10,092,25 57,378,994.
providing of bad debt 51.62% 23.71% 98.79% 14.96%
29.50 70.19 9.31 244.99 0.27 72
provisions on groups
Other receivables
with minor individual
495,772. 302,374. 193,398.3 825,887 825,887.0
amount and bad debt 0.34% 60.99% 1.21% 100.00% 0.00
63 32 1 .03 3
provision provided
individually
144,440, 87,364,6 57,075,35 68,297, 10,918,13 57,378,994.
Total 100.00% 60.49% 100.00% 15.99%
050.65 93.03 7.62 132.02 7.30 72
Other receivables with major individual amount and bad debt provision provided individually at the end of the period:
√ Applicable □ Inapplicable
In RM B
Other receivables (by Closing balance
entity) Other receivables Bad debt provision Provision rate Reason
Fangda SOZN 69,380,548.52 69,380,548.52 100.00% For the details of the
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2017 Annual Report of China Fangda Group Co., Ltd.
Company's debt owed by
Fangda SOZN, please
refer to Notes XV 3,
Note.
Total 69,380,548.52 69,380,548.52 -- --
In the group, the other receivables of which bad debt provision are made through the account aging method:
√ Applicable □ Inapplicable
In RM B
Closing balance
Age
Other receivables Bad debt provision Provision rate
Sub-item of within 1 year
Less than 1 year 39,202,297.23 1,176,068.91 3.00%
Subtotal for less than 1 year 39,202,297.23 1,176,068.91 3.00%
1-2 years 9,455,897.97 945,589.79 10.00%
2-3 years 13,864,005.71 4,159,201.71 30.00%
3-4 years 900,203.60 450,101.81 50.00%
4-5 years 952,585.14 762,068.12 80.00%
Over 5 years 10,188,739.85 10,188,739.85 100.00%
Total 74,563,729.50 17,681,770.19 23.71%
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 RM B78,379,647.79 was made in the period. RM B was recovered or reversed.
(3) Other receivable written off in the current period
In RM B
Items Amount
Other receivable written off 1,205,114.58
(4) Other receivables are disclosed by nature
In RM B
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2017 Annual Report of China Fangda Group Co., Ltd.
By nature Closing balance of book value Opening balance of book value
Deposit 48,666,321.95 35,468,468.79
Construction borrowing and advanced
8,721,385.12 16,300,394.58
payment
Staff borrowing and petty cash 5,532,782.96 2,954,984.22
Receivable refund of VAT 445,607.69 1,949,939.35
Fangda SOZN 69,380,548.52
Others 11,693,404.41 11,623,345.08
Total 144,440,050.65 68,297,132.02
(5) Balance of top 5 other receivables at the end of the period
In RM B
Balance of bad debt
Entity By nature Closing balance Age Percentage (%) provision at the end
of the period
Debt from original
Fangda SOZN 69,380,548.52 2-3 years 48.03% 69,380,548.52
subsidiary
Bangshen
Electronics Deposit 20,000,000.00 Less than 1 year 13.85% 600,000.00
(Shenzhen) Co., Ltd.
Lanzhou Railway
Deposit 6,931,316.60 2-3 years 4.80% 2,079,394.98
Transport Co., Ltd.
Advanced
Wang Weihong 4,944,388.15 Above four years 3.42% 4,873,952.52
construction fee
Advanced
Xin Song 2,620,327.61 Over 5 years 1.81% 2,620,327.61
construction fee
Total -- 103,876,580.88 -- 71.91% 79,554,223.63
9. 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 RM B
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2017 Annual Report of China Fangda Group Co., Ltd.
Closing balance Opening balance
Items Remaining book Depreciation Remaining book Depreciation
Book value Book value
value provision value provision
Development cost 209,395,947.66 209,395,947.66 1,116,777,166.82 1,116,777,166.82
Development
337,505,615.12 337,505,615.12 579,792,563.00 579,792,563.00
products
Raw materials 60,999,279.59 55,182.86 60,944,096.73 83,474,670.86 1,776,760.32 81,697,910.54
Product in
31,718,230.82 31,718,230.82 16,439,362.04 16,439,362.04
process
Finished goods in
11,569,608.79 11,569,608.79 8,845,931.76 8,845,931.76
stock
Assets unsettled
for finished
166,288,661.69 166,288,661.69 186,288,217.00 186,288,217.00
construction
contracts
Low price
41,725.37 41,725.37 73,018.52 73,018.52
consumable
OEM materials 2,147,074.49 2,147,074.49 2,206,059.11 1,499,169.52 706,889.59
Goods delivered 35,068,431.20 35,068,431.20 0.00
Total 819,666,143.53 55,182.86 819,610,960.67 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 RM B
Transferr
Increase Including:
ed to
Estimated Other (develop Accumula capitalize
Estimated developm
Starting total Opening decrease ment Closing tive d interest Capital
Project finish ent
time investmen balance in this cost) in balance capitalize for the source
time product in
t period this d interest current
this
period period
period
Fangda 2,500,000 916,817,9 2,225,29 1,010,28 95,691,7 111,000, 20,766,4
01.05.14 31.08.18 0.00
Town ,000.00 36.27 2.23 4,433.81 89.77 636.14 62.22
Jiangxi
Phoenix 600,000,0 199,959,2 9,436,717 209,395,9
31.12.19
Land 00.00 30.55 .11 47.66
project
3,100,000 1,116,777 2,225,29 1,010,28 105,128, 209,395, 111,000, 20,766,46
Total -- -- --
,000.00 ,166.82 2.23 4,433.81 506.88 947.66 636.14 2.22
Disclose the main project information of "Development Products" according to the following format:
In RM B
146
2017 Annual Report of China Fangda Group Co., Ltd.
Including:
Accumulative
Completion Opening capitalized
Project Increase Decrease Closing balance capitalized
time balance interest for the
interest
current period
Phase I of
579,792,563.0 244,512,240.
Fangda 29.12.16 2,225,292.23 337,505,615.12 69,129,130.15 0.00
0 11
Town
579,792,563.0 244,512,240.
Total -- 2,225,292.23 337,505,615.12 69,129,130.15 0.00
0 11
(2) Inventory depreciation provision
The inventory depreciation provision is disclosed as follows:
Classified by nature:
In RM B
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 1,721,577.46 55,182.86
32
35,068,431
Goods delivered 35,068,431.20
.20
1,499,169.
OEM materials 1,499,169.52
52
38,344,361
Total 38,289,178.18 55,182.86 --
.04
(3) Capitalization rate of interest in the closing inventory balance
The balance at the end of the period includes capitalization of borrowing expense of Fangda Town project of RM B12,130,244.45.
The capitalization amount of cumulative borrowing expenses is RM B111,000,636.14, of which RM B20,766,462.22 occurred in this
year.
(4) Assets unsettled for finished construction contracts at the end of the period
In RM B
Items Amount
Accumulative occurred costs 6,582,453,411.26
Accumulative recognized gross margin 968,676,416.49
147
2017 Annual Report of China Fangda Group Co., Ltd.
Settled amount 7,384,841,166.06
Assets unsettled for finished construction contracts 166,288,661.69
Others:
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
10. Other current assets
In RM B
Items Closing balance Opening balance
Input tax to be deducted 31,554,835.73 14,896,029.18
Bank financial products 400,000,000.00 41,000,000.00
Prepaid income tax 5,861,896.52 433,807.84
Prepaid VAT 2,233,706.21 4,726,521.18
Prepaid business tax 1,150,216.13
Other prepaid taxes 11,502.34
Tax to be input 228,552.26
Total 439,890,493.06 62,206,574.33
Others:
11. Sellable financial assets
(1) Sellable financial assets
In RM B
Closing balance Opening balance
Items Remaining Impairment Remaining Impairment
Book value Book value
book value provision book value provision
Sellable equity
28,562,575.67 28,562,575.67 28,562,575.67 28,562,575.67
instruments:
M easured at cost 28,562,575.67 28,562,575.67 28,562,575.67 28,562,575.67
Total 28,562,575.67 28,562,575.67 28,562,575.67 28,562,575.67
(2) Sellable financial assets messaged at costs at the end of the period
In RM B
Invested Remaining book value Impairment provision Shareholdi Cash
148
2017 Annual Report of China Fangda Group Co., Ltd.
entity Beginning Beginning ng in the dividend
Closing Closing
of the Increase Decrease of the Increase Decrease invested in the
balance balance
period period entity period
Shenyang 28,562,575 28,562,575
64.58%
Fangda .67 .67
28,562,575 28,562,575
Total --
.67 .67
12. Long-term share equity investment
In RM B
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 -128,579. 8,472,360
Investme .78 07 .71
nt Co.,
Ltd.
Shenzhen
Huihai
Yirong 3,504,090 5,000,000 -2,034,39 6,469,694
Internet .90 .00 5.99 .91
Service
Co., Ltd.
Jiangxi
Business
Innovativ
e 19,200,00 19,200,00
Property 0.00 0.00
Joint
Stock
Co., Ltd.
149
2017 Annual Report of China Fangda Group Co., Ltd.
12,105,03 24,200,00 -2,162,97 34,142,05
Subtotal
0.68 0.00 5.06 5.62
12,105,03 24,200,00 -2,162,97 34,142,05
Total
0.68 0.00 5.06 5.62
Other note
(1) The new contributed capital of RM B5 million paid to Shenzhen Huihai Yirong Internet Financial Service Co., Ltd. in this y ear.
The shareholding remains 10% with one director appointed in the board of directors.
(2) In this period, the subsidiary Hongjun Investment added a new investment of RM B 19.22 million to Jiangxi Business Innovative
Property Joint Stock Co., Ltd., holding 10% of the shares and appointing a director on the board of directors.
13. Investment real estates
(1) Investment real estate measured at costs
√ Applicable □ Inapplicable
Items Houses & buildings Land using right Construction in process Total
I. Book value
1. Opening balance 38,146,315.13 38,146,315.13
2. Increase in this
740,240,011.01 740,240,011.01
period
(1) External
purchase
(2) Transfer-in from
inventory\fixed
740,240,011.01 740,240,011.01
assets\construction in
progress
3. Decrease in this
10,415,743.51 10,415,743.51
period
(1) Purchase
Other transfer-out 10,415,743.51 10,415,743.51
4. Closing balance 767,970,582.63 767,970,582.63
II. Accumulative
depreciation and
amortization
1. Opening balance 7,441,246.45 7,441,246.45
2. Increase in this
2,221,110.79 2,221,110.79
period
(1) Provision or 976,508.42 976,508.42
150
2017 Annual Report of China Fangda Group Co., Ltd.
amortization
(2) Fixed assets 1,244,602.37 1,244,602.37
3. Decrease in this
3,207,319.47 3,207,319.47
period
(1) Purchase
Other transfer-out 3,207,319.47 3,207,319.47
4. Closing balance 6,455,037.77 6,455,037.77
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
761,515,544.86 761,515,544.86
value
2. Opening book
30,705,068.68 30,705,068.68
value
(2) Investment real estate measured at fair value
√ Applicable □ Inapplicable
In RM B
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
Add: external
purchase
Transfer-in
from inventory\fixed
312,819,561.72 312,819,561.72
assets\construction in
progress
151
2017 Annual Report of China Fangda Group Co., Ltd.
Increase due to
enterprise merger
Less: disposal 694,455.99 694,455.99
Other
12,644,892.00 12,644,892.00
transfer-out
Change in fair value 889,708,083.34 889,708,083.34
III. Closing balance 1,492,278,859.69 1,492,278,859.69
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 RM B
Rental
Building income in Opening Closing fair Change in fair Reason for the
Project Location
area the report fair value value value change and report
period
The fair value of the
investment real
estate is determined
based on Shenzhen
21,275,619. 296,740,66 Wenji Land and
Fangda Town Shenzhen 18739.12 307,321,568.00 3.57%
10 0.63 Property Evaluation
Doc. 深文集评字
(2018)A 第 SZ0003
号 Real Estate
Valuation Report.
The fair value of the
investment real
estate is determined
based on Shenzhen
Commercial podium of 1,183,330,834.6 Wenji Land and
Shenzhen 22565.42 0.00 0.00
Fangda Town 9 Property Evaluation
Doc. 深文集评字
(2018)A 第 SZ0003
号 Real Estate
Valuation Report.
21,275,619. 296,740,66 1,490,652,402.6
Total —— 41304.54 402.34% ——
10 0.63 9
Whether there is new investment real estate measured at fair value in the report period
√ Yes □ No
Newly-added investment real estate measured by fair value in the current period:
In RM B
152
2017 Annual Report of China Fangda Group Co., Ltd.
Original
Original book Recorded fair Difference handling method
Project accounting Closing fair value
value value and basis
method
The difference is included
in the gains and losses from
changes in fair value. The
newly added investment
property is self-constructed
Commercial podium of M easured at property that is expected to
318,620,802.43 318,620,802.43 1,183,330,834.69
Fangda Town cost be used for lease. The
initial measurement is
based on the actual cost.
Changes in subsequent
valuations are accounted for
as changes in fair value.
Total —— 318,620,802.43 318,620,802.43 1,183,330,834.69 ——
(3) Investment real estate without ownership certificate
In RM B
Items Book value Reason
Commercial podium of Fangda Town 1,183,330,834.69 Under initial registration
Not completed (since it will be used for
rental after completion, it will be included
Building 1# of Fangda Town 736,254,110.98
in the investment real estate according to
the cost)
14. Fixed assets
(1) Fixed assets
In RM B
Houses & M echanical 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
23,060,635.51 583,213.01 1,218,598.28 1,598,466.21 26,460,913.01
this period
(1) Purchase 583,213.01 1,218,598.28 1,598,466.21 3,400,277.50
153
2017 Annual Report of China Fangda Group Co., Ltd.
(2)
Transfer-in of
construction in
progress
(3) Increase
due to enterprise
merger
Investment real
23,060,635.51 23,060,635.51
estate transfer-in
3. Decrease in
17,524,389.77 1,621,084.41 21,694,888.88 3,817,141.73 7,102,409.61 51,759,914.40
this period
(1) Disposal
2,346,572.05 16,319,765.73 2,108,471.45 960,405.19 21,735,214.42
or retirement
(2) Investment
real estate 15,177,817.72 15,177,817.72
transfer-out
(3) Decrease due
to enterprise 5,375,123.15 1,708,670.28 6,142,004.42 13,225,797.85
merger
(4) Other
1,621,084.41 1,621,084.41
decrease
4. Closing
352,537,411.13 129,638,636.81 119,041,075.24 20,314,073.83 47,717,030.59 669,248,227.60
balance
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
12,323,196.05 6,239,133.45 6,106,821.18 2,079,812.77 3,738,903.18 30,487,866.63
this period
(1) Provision 9,115,876.58 6,239,133.45 6,106,821.18 2,079,812.77 3,736,265.44 27,277,909.42
(2) Investment
real estate 3,207,319.47 3,207,319.47
transfer-in
(3) Other
2,637.74 2,637.74
increases
3. Decrease in
2,690,105.92 8,825,417.48 2,392,260.39 3,178,097.03 17,085,880.82
this period
(1) Disposal
105,575.42 5,921,405.17 1,412,740.23 819,068.29 8,258,789.11
or retirement
154
2017 Annual Report of China Fangda Group Co., Ltd.
(2) Investment
real estate 2,584,530.50 2,584,530.50
transfer-out
(3) Decrease due
to enterprise 2,904,012.31 979,520.16 2,359,028.74 6,242,561.21
merger
4. Closing
56,287,505.21 9,896,036.60 95,637,048.49 13,893,304.21 24,061,664.41 199,775,558.92
balance
III. Impairment
provision
1. Opening
0.00 0.00 1,354,389.50 0.00 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
296,249,905.92 119,742,600.21 22,049,637.25 6,420,769.62 23,655,366.18 468,118,279.18
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
(2) Fixed assets without ownership certificate
In RM B
Items Book value Reason
Houses in Urumuqi for offsetting debt 538,924.59 Historical reasons
Yuehai Office Building C 502 142,776.45 Historical reasons
Other note
(1) On 31.12.17, the cumulative depreciation of the original value of RM B60,287,329.40 in the Group’s houses and buildings is
RM B7,448,056.30. The net value of RM B52,839,273.10 has been pledged to Shenzhen OCT branch of China Construction Bank.
The relevant borrowing has been repaid, but the pledge has not been released.
155
2017 Annual Report of China Fangda Group Co., Ltd.
(2) The reduction of fixed assets in the current period of business combination is no longer controlled by t he other party, Fangda
SOZN. The corresponding fixed assets are no longer included in the consolidated statement.
15. Construction in process
(1) Construction in progress
In RM B
Closing balance Opening balance
Items Remaining book Impairment Remaining book Impairment
Book value Book value
value provision value provision
PV power
1,703,080.57 1,703,080.57 1,703,080.57 1,703,080.57
generation project
Chengda
Fangda’s Xinjin
energy-saving 965,118.05 965,118.05 834,644.79 834,644.79
green curtain wall
project
Total 2,668,198.62 2,668,198.62 2,537,725.36 2,537,725.36
(2) Changes in major construction in process in this period
In RM B
Proporti
Includin
Amount on of
g:
transfer-i accumul Accumul
Other capitaliz
Increase n to ative ative Interest
Opening decrease Closing Project ed Capital
Project Budget in this fixed engineeri capitaliz capitaliz
balance in this balance progress interest source
period assets in ng ed ation rate
period for the
this investme interest
current
period nt in the
period
budget
Chengda
Fangda’s
Xinjin Prelimin
energy-s 35,000,0 834,644. 130,473. 965,118. ary
2.76% Others
aving 00.00 79 26 05 preparati
green on
curtain
wall
156
2017 Annual Report of China Fangda Group Co., Ltd.
project
Xiabu
20M Wp
PV 168,000, 1,703,08 1,703,08 Ground
1.01% Others
power 000.00 0.57 0.57 leveling
plant
project
203,000, 2,537,72 130,473. 2,668,19
Total -- -- --
000.00 5.36 26 8.62
16. Intangible assets
(1) Intangible assets
In RM B
Unpatented
Items Land using right Patent Computer software Total
technologies
I. Book value
1. Opening
56,096,540.74 12,651,019.88 5,628,187.03 7,904,764.64 82,280,512.29
balance
2. Increase in
401,000.00 2,076,625.81 91,701.34 1,476,537.32 4,045,864.47
this period
(1) Purchase 401,000.00 2,076,625.81 91,701.34 1,476,537.32 4,045,864.47
(2) Internal
R&D
(3) Increase
due to enterprise
merger
3. Decrease in this
4,269,374.39 1,452,543.16 5,721,917.55
period
(1) Purchase 1,452,543.16 1,452,543.16
(2) Other
4,269,374.39
decrease
4. Closing
56,497,540.74 10,458,271.30 5,719,888.37 7,928,758.80 80,604,459.21
balance
II. Accumulative
amortization
1. Opening 7,679,687.72 5,317,275.59 3,813,648.81 5,241,247.48 22,051,859.60
157
2017 Annual Report of China Fangda Group Co., Ltd.
balance
2. Increase in
1,136,666.55 629,323.94 852,989.77 758,139.54 3,377,119.80
this period
(1) Provision 1,136,666.55 629,323.94 852,989.77 758,139.54 3,377,119.80
3. Decrease in
2,241,421.56 1,452,543.16 3,693,964.72
this period
(1) Purchase 1,452,543.16 1,452,543.16
(1) Other
2,241,421.56 2,241,421.56
decrease
4. Closing
8,816,354.27 3,705,177.97 4,666,638.58 4,546,843.86 21,735,014.68
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
47,681,186.47 6,753,093.33 1,053,249.79 3,381,914.94 58,869,444.53
value
2. Opening
48,416,853.02 7,333,744.29 1,814,538.22 2,663,517.16 60,228,652.69
book value
Intangible asset formed by internal R&D of the period takes up 2.19% in the closing total book value of intangible assets.
(2) Failure to obtain the land use right certificates
In RM B
Items Book value Reason
None
158
2017 Annual Report of China Fangda Group Co., Ltd.
Others:
The reduction of intangible assets in the current period of business combination is the loss of control in Fangda SOZN. The
corresponding intangible assets are no longer included in the consolidated statement.
17. Goodwill
(1) Original book value of goodwill
In RM B
Invested entity or
Opening balance Increase Decrease Closing balance
item of goodwill
Fangda SOZN 26,279,395.89 26,279,395.89 0.00
Total 26,279,395.89 26,279,395.89 0.00
(2) Goodwill impairment provision
In RM B
Invested entity or
Opening balance Increase Decrease Closing balance
item of goodwill
Fangda SOZN 26,279,395.89 26,279,395.89 0.00
Total 26,279,395.89 26,279,395.89 0.00
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 RM B26,279,395.89. Due to the inability to pay off debts and substantially ceased operations, the Company has made a
full provision for impairment of goodwill in previous years. In the current period, the Company has transferred the entire
shareholding of Fangda SOZN.
Other note
18. Long-term amortizable expenses
In RM B
Increase in this Amortized amount
Items Opening balance Other decrease Closing balance
period in this period
Jinshan factory
renovation of
192,280.34 192,280.34
Fangda Decoration
Shanghai Branch
Epoxy floor 634,517.63 634,517.63
159
2017 Annual Report of China Fangda Group Co., Ltd.
Kingdee aftersales
48,217.98 48,217.98
service
Xuanfeng Chayuan
village and Zhuyuan
1,309,034.90 56,101.56 1,252,933.34
village land transfer
compensation
Expense of
renovation of leased
fixed assets by 111,474.45 111,474.45
Fangda Property
Development
Dongguan separation
155,634.49 77,817.36 77,817.13
project
Fangda Hi-Tech Park
plant No.3 255,483.50 255,483.50
renovation
Upgrading of
workshop rented by
161,009.56 161,009.56
Fangda Decoration
Nanchang Branch
Anti-junk email
0.00
module service fee
Great Wall
broadband network 14,700.04 4,900.08 9,799.96
fee
Fangda Building
Floor #5 wiring 7,604.64 7,604.64
project
Huawei storage
device maintenance 4,639.50 4,639.50
fee
M embership fee 199,999.92 360,000.00 99,999.92 460,000.00
Temporary sales
center construction 495,469.58 982,607.50 1,232,425.22 245,651.86
cost
Subscription of
newspaper and 105,699.80 105,699.80
magazines
Total 3,695,766.33 1,342,607.50 2,992,171.54 2,046,202.29
Other note
160
2017 Annual Report of China Fangda Group Co., Ltd.
19. Differed income tax assets and differed income tax liabilities
(1) Non-deducted deferred income tax assets
In RM B
Closing balance Opening balance
Items Deductible temporary Deferred income tax Deductible temporary Deferred income tax
difference assets difference assets
Assets impairment
384,353,309.47 73,519,373.35 334,020,087.32 65,372,067.16
provision
Deductible loss 27,076,168.17 5,825,923.08 79,647,747.51 19,403,071.58
Donation 700,000.00 175,000.00
Unrealizable gross profit 159,943,328.49 39,138,879.86 59,313,354.67 13,083,940.06
Reserved expense 1,931,083.44 289,662.51 3,245,302.51 486,795.38
Deferred earning 2,343,160.67 351,474.11 1,963,532.75 474,053.75
Anticipated liabilities 6,368,353.05 955,252.96 3,156,625.24 473,493.79
Arbitrage gain and loss 159,000.00 23,850.00
Adjustment of fair value
309,641.05 46,446.16 327,320.67 49,098.10
of investment real estate
Provided unpaid taxes 441,086,914.18 110,271,728.55 309,816,714.95 77,454,178.74
Total 1,024,270,958.52 230,597,590.58 791,490,685.62 176,796,698.56
(2) Non-deducted deferred income tax liabilities
In RM B
Closing balance Opening balance
Items Taxable temporary Deferred income tax Taxable temporary Deferred income tax
difference liabilities difference liabilities
Gain/loss caused by
1,143,654,805.86 285,913,701.47 304,518,955.06 76,129,738.77
changes in fair value
Estimated gross margin
when Fangda Town
records income, but does 113,637,356.36 28,409,339.09 495,010,133.99 123,752,533.50
not reach the taxable
income level
Arbitrage gain and loss 2,164,873.87 324,731.08
Total 1,257,292,162.22 314,323,040.56 801,693,962.92 200,207,003.35
161
2017 Annual Report of China Fangda Group Co., Ltd.
(3) Net deferred income tax assets or liabilities listed
In RM B
Offset balance of Deferred income tax Offset balance of
Deferred income tax
deferred income tax assets and liabilities at deferred income tax
Items assets and liabilities at
assets or liabilities after the beginning of the assets or liabilities after
the end of the period
offsetting period offsetting
Deferred income tax
230,597,590.58 176,796,698.56
assets
Deferred income tax
314,323,040.56 200,207,003.35
liabilities
(4) Details of unrecognized deferred income tax assets
In RM B
Items Closing balance Opening balance
Deductible temporary difference 946,030.45 69,882,888.12
Deductible loss 5,506,383.60 103,119,540.05
Total 6,452,414.05 173,002,428.17
(5) Deductible losses of the un-recognized deferred income tax asset will expire in the following years
In RM B
Year Closing amount Opening amount Notes
2017 1,476,671.03
2018 58,067.78
2019
2020 80,885,430.25
2021 772,174.85 20,699,370.99
2022 4,734,208.75
Total 5,506,383.60 103,119,540.05 --
Others:
In the reporting period, the loss of control over Fangda SOZN, a subsidiary of the Company, and the cancellation of Fangda
Aluminum, a subsidiary, caused a significant reduction in the deductible losses of deferred income tax assets that were not
recognized at the end of the period.
20. Other non-current assets
In RM B
162
2017 Annual Report of China Fangda Group Co., Ltd.
Items Closing balance Opening balance
Prepaid house and equipment amount 31,130,198.46 61,184,253.71
Total 31,130,198.46 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 RM B
Items Closing balance Opening balance
Guarantee loan 416,000,000.00 591,000,000.00
Discount borrowing of acceptance bills 200,000,000.00
Total 616,000,000.00 591,000,000.00
Notes to classification of short-term borrowings
22. Derivative financial liabilities
√ Applicable □ Inapplicable
In RM B
Items Closing balance Opening balance
Futures contracts 159,000.00
Total 159,000.00
Others:
23. Notes payable
In RM B
Type Closing balance Opening balance
Commercial acceptance 62,954,258.46 88,302,684.45
Bank acceptance 469,966,767.02 468,998,636.00
Total 532,921,025.48 557,301,320.45
The total amount of payable bills that have matured but not been paid at the end of the period is RM B7,463,586.17.
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24. Account payable
(1) Account payable
In RM B
Items Closing balance Opening balance
Account repayable and engineering
610,735,320.33 861,679,467.39
repayable
Construction payable 34,924,745.05 64,941,147.47
Payable installation and implementation
297,174,327.49 342,832,605.32
fees
Others 3,557,866.05 5,802,741.16
Total 946,392,258.92 1,275,255,961.34
(2) Significant payables aging more than 1 year
In RM B
Items Closing balance Reason
Supplier 1 80,038,525.28 Not mature
Supplier 2 29,419,488.18 Not mature
Supplier 3 8,239,280.17 Not mature
Supplier 4 7,370,908.84 Not mature
Supplier 5 6,919,569.94 Not mature
Total 131,987,772.41 --
Others:
25. Prepayment received
(1) Prepayment received
In RM B
Items Closing balance Opening balance
Curtain wall and screen door engineering
89,485,775.55 82,684,893.50
payment
M aterial loan 5,227,948.87 3,096,489.93
Real estate sales payment 78,377,257.88 198,135,269.02
Others 2,260,704.15 1,988,791.68
Total 175,351,686.45 285,905,444.13
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(2) Assets settled for unfinished construction contracts at the end of the period
In RM B
Items Amount
Accumulative occurred costs 6,582,453,411.26
Accumulative recognized gross margin 968,676,416.49
Settled amount 7,384,841,166.06
Projects unsettled for finished construction contracts 166,288,661.69
Others:
The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure
Guideline No.3 – Listed Companies Engaged in Property Develop ment.
Payment received from top 5 presales projects:
In RM B
No. Project Opening balance Closing balance Estimated finish time Presales percentage
1 Fangda Town 198,135,269.02 78,377,257.88 31.08.18 100.00%
26. Employees’ wage payable
1. Employees’ wage payable
In RM B
Items Opening balance Increase Decrease Closing balance
1. Short-term
41,965,384.45 243,389,592.69 244,967,457.98 40,387,519.16
remuneration
2. Retirement pension
program-defined 6,958.21 12,292,685.49 12,288,032.11 11,611.59
contribution plan
3. Dismiss compensation 326,277.86 326,277.86
Total 41,972,342.66 256,008,556.04 257,581,767.95 40,399,130.75
(2) Short-term remuneration
In RM B
Items Opening balance Increase Decrease Closing balance
1. Wage, bonus,
39,824,961.13 225,532,377.94 226,577,957.33 38,779,381.74
allowance and subsidies
2. Employee welfare 6,055,330.04 6,055,330.04
3. Social insurance 74,574.19 5,432,165.56 5,506,739.75
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Including:
74,056.97 4,258,585.15 4,332,642.12
medical insurance
Labor injury
515.52 726,077.11 726,592.63
insurance
Breeding
1.70 447,503.30 447,505.00
insurance
4. Housing fund 99,320.00 5,478,630.74 5,512,479.74 65,471.00
5. Labor union budget
1,966,529.13 891,088.41 1,314,951.12 1,542,666.42
and staff education fund
Total 41,965,384.45 243,389,592.69 244,967,457.98 40,387,519.16
(3) Defined contribution plan
In RM B
Items Opening balance Increase Decrease Closing balance
1. Basic pension 6,436.75 11,798,388.99 11,793,214.15 11,611.59
2. Unemployment
521.46 494,296.50 494,817.96
insurance
Total 6,958.21 12,292,685.49 12,288,032.11 11,611.59
Others:
27. Taxes payable
In RM B
Items Closing balance Opening balance
VAT 12,300,790.83 46,317,900.91
Enterprise income tax 114,953,308.81 130,608,894.15
Personal income tax 1,183,514.25 1,440,370.54
City maintenance and construction tax 1,881,115.36 4,160,327.99
Land using tax 333,906.32 684,277.95
Property tax 1,432,301.04 2,140,282.85
Education surtax 896,603.56 1,963,232.23
Local education surtax 460,806.13 1,106,894.43
Deed tax 3,429,437.28 3,429,437.28
Others 83,732.86 384,956.07
Total 136,955,516.44 192,236,574.40
Others:
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28. Interest payable
In RM B
Items Closing balance Opening balance
Long-term borrowing with interest
installment and repayment of principal 1,822,719.47 1,753,879.87
upon maturity
Short-term borrowing interests payable 602,592.50 881,099.60
Total 2,425,311.97 2,634,979.47
29. Other payables
(1) Other payables presented by nature
In RM B
Items Closing balance Opening balance
Performance and quality deposit 20,867,337.69 10,596,919.41
Deposit 8,047,165.84 8,104,969.14
Reserved expense 11,466,723.82 14,327,754.95
Fangda Town pledge 100,000.00 100,000.00
Lawsuit indemnity 0.00
Tax withheld 441,086,914.18 309,816,714.95
Others 19,621,369.16 23,236,440.96
Total 501,189,510.69 366,182,799.41
Other note
1. The tax withheld is the land VAT that needs to be settled and paid for the property delivered of the F angda Town developed by
Fangda Property.
2. The major other payables aged over 1 year at the end of the year are mainly the land value-added tax of RM B275,186,551.15,
which is not yet settled.
30. Non-current liabilities due within 1 year
In RM B
Items Closing balance Opening balance
Long-term loans due within 1 year 200,000,000.00
Total 200,000,000.00
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31. Other current liabilities
In RM B
Items Closing balance Opening balance
Substituted money on VAT 9,531,014.81 35,148,084.44
Total 9,531,014.81 35,148,084.44
32. Long-term borrowings
(1) Classification of long-term borrowings
In RM B
Items Closing balance Opening balance
Loan by pledge 893,978,153.39 922,169,568.24
Total 893,978,153.39 922,169,568.24
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 6.785%.
33. Anticipated liabilities
In RM B
Items Closing balance Opening balance Reason
Others 6,368,353.05 3,156,625.24
Total 6,368,353.05 3,156,625.24 --
34. Deferred earning
In RM B
Items Opening balance Increase Decrease Closing balance Reason
Government subsidy 11,567,224.78 666,282.50 1,744,023.34 10,489,483.94 Assets-related
Total 11,567,224.78 666,282.50 1,744,023.34 10,489,483.94 --
Items involving government subsidies:
In RM B
Amount Other misc.
Related to
Opening Amount of included in gains Costs offset Closing
Liabilities Other change assets/earnin
balance new subsidy non-operatin recorded in in the period balance
g
g revenue this period
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M ajor
investment
project prize
from Industry
and Trade Assets-relate
1,795,238.30 57,142.80 1,738,095.50
Development d
Division of
Dongguan
Finance
Bureau
M assive
production
project of
air-breathing Assets-relate
7,641,830.27 123,987.24 7,517,843.03
double-layer d
hollow glass
energy-savin
g curtain call
Railway
transport
screen door
controlling Assets-relate
168,294.45 43,229.28 125,065.17
system and d
information
transmission
technology
LED
production
expansion Assets-relate
1,493,111.71 381,219.96 -1,111,891.75
technology d
renovation
project
Distributed
PV power
generation
project
subsidy Assets-relate
468,750.05 24,999.96 443,750.09
sponsored by d
Dongguan
Reform and
Development
Commission
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Luxi county
Xuanfeng
town
Assets-relate
government 186,282.50 1,552.35 184,730.15
d
business
introduction
subsidy
Shenzhen
SM E Service
Bureau Assets-relate
480,000.00 480,000.00
enterprise IT d
construction
subsidy
11,567,224.7 10,489,483.9
Total 666,282.50 632,131.59 -1,111,891.75 --
8 4
Others:
(1) The Dongguan Finance Bureau Industry and Trade Development Division major subsidy project is a subsidized project not
stipulated in Dongguan Financial Circular [2013] No.779. As the project has formed into long-term assets, the Company treats it as
an assets-related government subsidy.
(2) The massive production project of air-breathing double-layer hollow glass energy -saving curtain wall is a subsided project
stipulated in Guangdong Financial Doc [2013] No.183. As the project has formed into long-term assets, the Company treats it as an
assets-related government subsidy.
(3) The railway transport screen door controlling system and information transmission technology is a subsidized project stip ulated
in Shenzhen Tech Innovation [2013] No.242. RM B300,000 is used to purchase equipment and RM B900,000 is used to purchase
materials and for travel fees. As the project has formed into long-term assets, the Company treats RM B300,000 as assets-related
government subsidy and RM B900,000 as earning-related government subsidy.
(4) The subsidy for LED product capital expansion or technologically innovative project is the subsidy fund obtained by subsidiary
Fangda SOZN according to Notice on Applying for 2015 Foshan Technology Development Fund and Parent Fund (Zhongshan Ke Fa
(2015) No.104), Notice on Zhongshan Technology Development Fund Regulations (Zhong Ke Fa (2015) No.95) and Notice on
Zhongshan Patent Fund Use Regulations (Zhong Ke Fa (2015) No.96). Other decrease is attributable to the loss of control in Fangda
SOZN, which is no longer consolidated in financial statements.
(5) The Dongguan M unicipal Development and Reform Commission on the organization of the Dongguan City distributed
photovoltaic power generation subsidy program is based on the "Don gguan M unicipal Development and Reform Commission's
Circular on Organizing the Application of Dongguan Distributed PV Generation Capital Subsidy Project" for various types of
buildings and structures using distributed photovoltaic power generation projects. Owners, according to the installed capacity of
250,000 yuan / M W for a one-time grant, the maximum subsidy for a single project does not exceed 2 million yuan, because the
project is related to assets, the company will use it as a government subsidy related to assets.
(6) The Xuanfeng Town Government Investment Promotion Subsidy Project of Luxi County promoted the development of the local
economy. Xuanfeng Town Government of Luxi County introduced Luxin New Energy Company's solar photovoltaic power
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generation project and gave Luxin New Energy Corporation subsidies for obtaining state-owned construction land use rights. As this
project is related to assets, the Company regards it as a government grant related to the assets.
(7) The subsidy project of the Shenzhen M unicipal Bureau of Small and M edium-sized Enterprises Service Enterprise
Informatization Project is based on the relevant provisions of the Interim M easures for the M anagement of Special Funds for t he
Development of Private and Small and M edium-sized Enterprises in Shenzhen (SCC (2012) No. 177) issued by the Shenzhen
M unicipal Bureau of Small and M edium Business Administration. In 2017, the special fund enterprise informationization project
subsidies, because the project is related to assets, the company will use it as a government grant related to assets.
35. Capital share
In RM B
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
Others:
(1) By 31.12.17, the Company has 1,417,242 restricted shares, of which 1,417,242 shares are held by senior management natural
person.
Approved at the Shareholders' M eeting 2016 held on April 11, 2017, the Company's profit distribution plan for 2016 is distributing a
cash dividend of RM B3.50 (tax-included) for every ten shares and transfer five shares for every ten shares to all the shareholders
based on a total of 789,094,836 shares on December 31, 2016. No dividend share was issued this year.
36. Capital reserve
In RM B
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 share premium during the current period was due to the transfer of capital reserve of RM B394,547,418.00 during
the reporting period.
37. Other miscellaneous income
In RM B
Opening Amount occurred in the current period Closing
Items
balance Amount Less: amount Less: After-tax After-tax balance
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before written into Income tax amount amount
income tax other gains expenses attributed to attributed to
and transferred the parent minority
into gain/loss shareholder
in previous s
terms
2. Other misc. incomes that will be 11,162,626. 2,867,090.6 6,455,393.4 8,585,847
2,130,454.52 1,840,142.79
re-classified into gain and loss 87 1 7 .99
Effective part in the gain and -1,959,992. -119,850.
1,840,142.79 -141,000.00 1,840,142.79 -21,150.00
loss of arbitrage of cash flow 79 00
Translation difference of -50,855.4
198,480.10 -249,335.57 -249,335.57
foreign exchange statement 7
Investment real estate measured at 11,552,962. 2,888,240.6 8,664,721.8 8,756,553
91,831.63
fair value 44 1 3 .46
11,162,626. 2,867,090.6 6,455,393.4 8,585,847
Other miscellaneous income 2,130,454.52 1,840,142.79
87 1 7 .99
38. Surplus reserves
In RM B
Items Opening balance Increase Decrease Closing balance
Statutory surplus
88,839,790.50 21,850,606.15 110,690,396.65
reserves
Total 88,839,790.50 21,850,606.15 110,690,396.65
39. Retained profit
In RM B
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
1,144,404,441.03 697,956,378.23
parent
Less: Statutory surplus reserves 21,850,606.15 37,716,235.99
Common share dividend payable 276,183,192.60 75,690,990.50
Closing retained profit 1,863,191,218.58 1,016,820,576.30
Details of retained profit adjusted at beginning of the period
1) Retrospective adjustment due to adopting of the Enterprise Accounting Standard and related regulations, included the retained
profit by RMB0.
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2) Variation of accounting policies, influenced the retained profit by RM B0.
3) Correction of material accounting errors, influenced the retained profit by RM B0.
4) Change of consolidation range caused by merger of entities under common control, influenced the retained profit by RM B0.
5) Other adjustment influenced the retained profit by RMB0.
40. Operational revenue and costs
In RM B
Amount occurred in the current period Occurred in previous period
Items
Income Cost Income Cost
M ain business 2,900,462,349.88 1,977,766,793.96 4,125,885,820.70 2,535,301,290.92
Other businesses 47,008,463.70 20,472,095.25 77,980,353.02 59,869,192.43
Total 2,947,470,813.58 1,998,238,889.21 4,203,866,173.72 2,595,170,483.35
The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure
Guideline No.3 – Listed Companies Engaged in Property Development.
Top-5 projects in terms of income received and recognized in the reporting period:
In RM B
No. Project Balance
1 Fangda Town 911,195,066.07
41. Taxes and surcharges
In RM B
Items Amount occurred in the current period Occurred in previous period
City maintenance and construction tax 7,814,008.40 11,735,072.37
Education surtax 7,797,178.90 8,599,067.72
Property tax 4,118,281.19 3,408,074.24
Land using tax 1,432,280.19 1,188,786.11
Stamp tax 1,357,531.03 1,663,716.30
Business tax 1,061,489.31 6,231,233.83
Land VAT 167,899,723.69 347,775,304.93
Others 309,436.30 233,450.92
Total 191,789,929.01 380,834,706.42
42. Sales expense
In RM B
Items Amount occurred in the current period Occurred in previous period
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Labor costs 22,338,575.61 23,832,334.36
Freight and miscellaneous charges 6,023,654.97 7,560,644.12
Travel expense 4,918,740.99 5,091,669.45
Entertainment expense 1,918,141.04 2,037,341.10
M aterial consumption 1,034,700.68 403,618.10
Office costs 2,182,168.26 2,536,314.14
Rental 848,873.82 1,773,733.94
Advertisement and promotion fee 5,698,609.97 9,100,791.63
Sales agency fee 14,032,712.93 3,574,466.62
Others 2,067,770.13 3,362,132.68
Total 61,063,948.40 59,273,046.14
Others:
The increase in sales agency fees for the current period was due to the increase in commissions paid by the subsidiary, Fangda
Property, to various sales channels and to the agency companies.
43. Management expenses
In RM B
Items Amount occurred in the current period Occurred in previous period
Labor costs 81,335,907.43 78,910,083.71
Depreciation and amortization 15,437,399.78 19,641,826.87
Agencies 6,206,988.31 2,719,764.57
Tax 3,426,306.86
M aintenance costs 7,676,857.59 7,328,236.95
Water and electricity 656,735.35 892,352.37
Office expense 3,428,451.92 3,606,589.30
Travel expense 2,887,763.45 4,034,018.87
R&D 17,997,202.77 22,757,378.01
Entertainment expense 2,896,590.12 2,748,111.05
Rental 2,531,368.11 4,147,170.84
Lawsuit 237,815.52 2,260,015.75
M aterial consumption 313,727.03 457,209.56
Property management fee 1,978,270.47 2,834,001.28
Waste loss 5,996,649.87
Others 9,231,602.45 10,162,375.53
Total 152,816,680.30 171,922,091.39
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Others:
1. The increase in intermediary expenses in the current period was mainly due to the increase in investment consulting fees p aid by
the Company and its subsidiary Fangda Property.
2. The decrease in waste charges during the period was mainly due to the fact that Fangda SOZN, a subsidiary of the Company, was
stopped in the current period, and there was no loss of waste products.
44. Financial expenses
In RM B
Items Amount occurred in the current period Occurred in previous period
Interest expense 89,495,390.12 82,558,159.00
Less: interest capitalization 20,766,462.22 45,862,952.52
Less: Interest income 7,781,596.28 6,701,201.41
Less: discount government subsidies 1,786,400.00
Acceptant discount 3,384,259.28 3,504.16
Exchange gain/loss 3,305,715.16 -3,282,947.53
Commission charges and others 1,207,940.00 1,540,835.73
Total 67,058,846.06 28,255,397.43
45. Assets impairment loss
In RM B
Items Amount occurred in the current period Occurred in previous period
1. Bad debt loss 58,879,269.89 117,097,192.87
2. Inventory depreciation loss 29,306,243.12
7. Fixed assets impairment loss 26,409,144.27
12. Intangible assets impairment loss 5,268,680.03
13. Goodwill impairment loss 19,826,696.97
Total 58,879,269.89 197,907,957.26
Others:
Bad debt loss decreases due to changes in accounting estimates in the reporting period.
46. Income from fair value fluctuation
In RM B
Source of income from fluctuation of fair
Amount occurred in the current period Occurred in previous period
value
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Financial assets measured at fair value
with variations accounted into current -1,099,400.09
income account
Investment real estate measured at fair
890,037,303.97 17,550,094.59
value
Effective part in the gain and loss of
2,371,344.29 412,128.63
arbitrage of cash flow
Total 892,408,648.26 16,862,823.13
47. Investment income
In RM B
Items Amount occurred in the current period Occurred in previous period
Gains from long-term equity investment
-2,162,975.06 -1,384,650.25
measured by equity
Investment gain obtained from disposal of
84,959,644.45
long-term equity investment
Investment gain obtained from disposal of
financial assets measured at fair value with
122,438,379.65
variations accounted into current income
account
Investment gain obtained from disposal of
financial assets measured at fair value with
-122,795,801.32 3,057,110.93
variations accounted into current income
account
Gain from re-measurement of remaining
shares at fair value after loss of the control 58,154,670.60
power
Investment gain of financial products 20,455,865.70 1,401,717.08
Others -4,000.00
Total 102,891,113.42 61,228,848.36
Others:
The investment gains from disposal of long-term equity investment are the gain of RM B84,959,644.45 from the disposal of the
long-term equity investment in Fangda SOZN.
48. Assets disposal gains
In RM B
Source Amount occurred in the current period Occurred in previous period
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Gain and loss from disposal of fixed assets
5,027,717.19 -2,006,620.94
("-" for loss)
Gain and loss from disposal of intangible
46,153.85
assets ("-" for loss)
Total 5,027,717.19 -1,960,467.09
49. Other gains
In RM B
Source Amount occurred in the current period Occurred in previous period
LED production expansion technology
381,219.96
renovation project
Luxi county Xuanfeng town government
1,552.35
business introduction subsidy
M ajor investment project prize from
Industry and Trade Development Division 57,142.80
of Dongguan Finance Bureau
Distributed PV power generation project
subsidy sponsored by Dongguan Reform 24,999.96
and Development Commission
Railway transport screen door controlling
system and information transmission 43,229.28
technology
M assive production project of
air-breathing double-layer hollow glass 123,987.24
energy-saving curtain call
Technology achievement subsidies 100,000.00
VAT rebated into revenue 2,730,971.34
Nanchang Financial Bureau
municipal-level enterprise technology 50,000.00
prize
Intellectual property right project subsidy
for 2017 by Shenzhen market and quality 100,000.00
supervision and management committee
Industry upgrade and transformation
subsidy for 2017 by Shenzhen Economic 1,000,000.00
and Trade Information Commission
Industry growth subsidy 680,000.00
Hi-tech enterprise development fund 300,000.00
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2017 Annual Report of China Fangda Group Co., Ltd.
Hi-tech enterprise prize 300,000.00
Employment subsidy 504,878.65
Others 184,500.00
Total 6,582,481.58
50. Non-business income
In RM B
Amount occurred in the current Amount accounted into the
Items Occurred in previous period
period current accidental gain/loss
Government subsidy 7,571,963.67
Penalty income 363,980.93 239,809.06 363,980.93
Payable account not able to be
3,208,403.38 534,238.75 3,208,403.38
paid
VAT rebated into revenue 2,852,268.61
Others 4,810,402.92 7,019,210.97 4,810,402.92
Total 8,382,787.23 18,217,491.06 8,382,787.23
Others:
1. The amount of RM B3,157,115.36 in unpaid dues was due to cancellation of the subsidiary Fangda Aluminum.
2. M ajor projects are disclosed as follows:
The large amount in others is the income from disposal of waste of RM B4,382,529.31.
51. Non-business expenses
In RM B
Amount occurred in the current Amount accounted into the
Items Occurred in previous period
period current accidental gain/loss
Loss from debt reorganization 3,674,141.05 2,445,254.63 3,674,141.05
Donation 3,911,000.00 1,459,000.00 3,911,000.00
Loss from retirement of
71,025.12 494,760.83 71,025.12
damaged non-current assets
Penalty and overdue fine 203,328.43 202,334.32 203,328.43
Others 213,904.94 274,078.98 213,904.94
Total 8,073,399.54 4,875,428.76 8,073,399.54
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52. Income tax expenses
(1) Details about income tax expense
In RM B
Items Amount occurred in the current period Occurred in previous period
Income tax expenses in this period 216,022,591.68 187,967,710.56
Deferred income tax expenses 57,772,785.66 16,017,615.88
Total 273,795,377.34 203,985,326.44
(2) Adjustment process of accounting profit and income tax expense
In RM B
Items Amount occurred in the current p eriod
Total profit 1,424,842,598.85
Income tax expenses calculated based on the legal (or applicable)
356,210,649.70
tax rates
Impacts of different tax rates applicable for some subsidiaries -14,602,781.31
Impacts of income tax before adjustment 327,493.19
Impact of non-taxable income -30,609,594.93
Impacts of non-deductible cost, expense and loss 618,004.92
Impacts of using deductible loss of unrecognized deferred
-16,046,556.32
income tax assets
Deductible temporary difference and deductible loss of
674,095.36
unrecognized deferred income tax assets
Profits and losses from associates accounted for using the equity
540,743.77
method
Impact of tax rate change on the opening balance of deferred
1,427,418.03
income tax
Taxation impact of R&D expense and (presented with ―-‖) -896,117.63
Others -23,847,977.44
Income tax expenses 273,795,377.34
Other note
The other projects were mainly related to the gains from the disposal of the shares held by Fangda SOZN, a subsidiary held by the
company, of RM B-23,739,911.11.
53. Other miscellaneous income
See Note VII 37.
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54. Notes to the cash flow statement
(1) Other cash inflow related to operation
In RM B
Items Amount occurred in the current period Occurred in previous period
Interest income 6,851,168.02 6,701,201.41
Subsidy income 6,184,809.73 8,024,105.44
Retrieving of deposits for exchange bills 20,929,073.67 89,667,363.82
Retrieving of bidding deposits 72,013,587.39 26,828,027.88
Other operating accounts 21,760,218.65 17,530,047.54
Total 127,738,857.46 148,750,746.09
Notes to other cash inflow related to operation:
(2) Other cash paid related to operation
In RM B
Items Amount occurred in the current period Occurred in previous period
Sales expense 25,196,863.33 13,114,184.67
Administrative expense 29,288,934.10 30,155,561.02
Bidding deposit paid 71,049,500.84 95,015,574.87
Net draft deposit net paid 110,475,014.30 6,738,582.00
Other trades 25,533,661.05 22,802,418.76
Total 261,543,973.62 167,826,321.32
(3) Other cash paid related to investment activities
In RM B
Items Amount occurred in the current period Occurred in previous period
Bidding deposit paid related to
2,650,000.00
construction projects
Net cash from disposal of subsidiaries 16,097.15
Total 2,666,097.15
(4) Other cash received related to financing
In RM B
Items Amount occurred in the current period Occurred in previous period
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Fractional historical dividend 94.24
Financing deposit 53,500,000.00
Total 53,500,094.24
(5) Other cash paid related to financing
In RM B
Items Amount occurred in the current period Occurred in previous period
Financing commissioning and
1,307,919.17
intermediary cost
Total 1,307,919.17
55. Supplementary data of cash flow statement
(1) Supplementary data of cash flow statement
In RM B
Supplementary information Amount of the Current Term Amount of the Previous Term
1. Net profit adjusted to cash flow of
-- --
business operation
Net profit 1,151,047,221.51 655,990,431.99
Plus: Asset impairment provision 58,879,269.89 197,907,957.26
Fixed asset depreciation, gas and petrol
28,254,417.84 28,600,241.74
depreciation, production goods depreciation
Amortization of intangible assets 3,377,119.80 3,723,769.63
Amortization of long-term amortizable
2,992,171.54 4,573,606.05
expenses
Loss from disposal of fixed assets, intangible
assets, and other long-term assets (―-― for -4,594,701.20 4,843,433.36
gains)
Loss from fixed asset discard (―-― for gains) 71,025.12 98,653.04
Loss from fair value fluctuation (―-― for
-892,079,427.63 -10,401,660.45
gains)
Financial expenses (―-― for gains) 68,088,240.21 32,931,793.50
Investment losses (―-― for gains) -102,891,113.42 -61,228,848.36
Decrease of deferred income tax asset
-53,779,742.02 -110,869,888.04
(―-― for increase)
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Increase of deferred income tax asset (―-― for
111,552,527.68 126,887,503.93
increase)
Decrease of inventory (―-― for increase) 163,916,553.77 -627,473,046.34
Decrease of operational receivable items
346,476,038.35 -879,090,079.01
(―-― for increase)
Increase of operational receivable items
-233,040,368.34 1,159,551,630.20
(―-― for decrease)
Others -90,436,087.37 -60,328,423.58
Cash flow generated by business operations,
557,833,145.73 465,717,074.92
net
2. M ajor investment and financing operation
-- --
not involving with cash
3. Net change of cash and cash equivalents -- --
Balance of cash at period end 931,285,535.55 935,824,575.40
Less: Initial balance of cash 935,824,575.40 247,739,243.78
Net increase in cash and cash equivalents -4,539,039.85 688,085,331.62
(2) Net cash from disposal of subsidiaries received in this period
In RM B
Amount
Cash and cash equivalent received from disposal of subsidiaries in
500,000.00
the period
Including: --
Fangda SOZN 500,000.00
Less: cash and cash equivalent held by subsidiaries on the date of
11,220.25
losing control power
Including: --
Fangda SOZN 11,220.25
Including: --
Net cash received from disposal of subsidiaries 488,779.75
Others:
Note: During the reporting period, the entire shareholding of F angda SOZN, a subsidiary he ld by the Company, was transferred and
no control was exercised.
(3) Composition of cash and cash equivalents
In RM B
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Items Closing balance Opening balance
I. Cash 931,285,535.55 935,824,575.40
Including: Cash in stock 42,636.09 11,625.54
Bank savings can be used at any time 921,773,052.65 931,980,821.51
Other monetary capital can be used at
9,469,846.81 3,832,128.35
any time
II. Balance of cash and cash equivalents at
931,285,535.55 935,824,575.40
the end of the period
56. Ownership- or use-right-restricted assets
In RM B
Items Closing book value Reason
M onetary capital 249,112,943.96 Deposit and special account deposit
Fixed assets 52,839,273.10 Loan by pledge
Investment real estate 307,321,568.00 Loan by pledge
100% stake in Fangda Property
200,000,000.00 Loan by pledge
Development held by the Company
Total 809,273,785.06 --
57. Foreign currency monetary items
(1) Foreign currency monetary items
In RM B
Closing foreign currency
Items Exchange rate Closing RM B balance
balance
M onetary capital -- -- 39,713,343.50
Including: U SD 913,634.49 6.5342 5,969,870.48
HK Dollar 35,870,866.13 0.83591 29,984,815.71
AUD 151,715.27 5.0928 772,655.53
SGD 611,497.16 4.8831 2,986,001.78
Account receivable -- -- 61,198,347.63
Including: U SD 9,154,193.57 6.5342 59,815,331.63
SGD 283,225.00 4.8831 1,383,016.00
Other receivables -- -- 151,577.39
Including: U SD 13,682.31 6.5342 89,402.95
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HK Dollar 72,710.00 0.83591 60,779.01
AUD 274.00 5.0928 1,395.43
Account payable -- -- 108,637.61
Including: U SD 16,626.00 6.5342 108,637.61
Employees’ wage payable -- -- 334,851.65
Including: HKD 320,709.68 0.83591 268,084.43
AUD 13,110.12 5.0928 66,767.22
Other payables -- -- 13,721.82
Including: U SD 2,100.00 6.5342 13,721.82
(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
58. 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. Disposal of subsidiaries
Single disposal of a subsidiary that may lead to loss of control
√ Yes □ No
In RM B
The The The fair Regainin Determin The
Proporti
differenc book value of g gains ation of amount
on of
e value of the or losses the fair of other
Equity Time remainin
Equity Time of between the remainin arising value of compreh
Compan disposal Disposal determin g stocks
disposal loss of the remainin g equity from the ensive
y proportio manner ation at the
amount control disposal g equity at the re-measu remainin income
n basis date of
price and at the date of rement g equity related to
loss of
the share date of loss of of the at the the
control
of the loss of control remainin date of atomic
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subsidiar control g equity loss of company
y's net at fair control 's equity
assets at value rights investme
the level and its nt
of the main transferr
consolid assumpti ed to
ated ons investme
financial nt gains
statemen and
t losses
correspo
nding to
the
disposal
of the
investme
nt
Day of
receiving
Fangda 2,000,00 84,959,6
60.00% Transfer 31.12.17 the
SOZN 0.00 44.45
transfer
payment
Others:
Disposal of a subsidiary in multiple steps that lead to loss of control in the report period
□ Yes √ No
2. 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:
1. Shenzhen Hongjun Investment Co., Ltd. and Fangda Australia Co., Ltd. were newly established in this period. The two companies
are consolidated in this period.
2. In this period, the indirect controlled subsidiary Jiangxi Fangda New Aluminum Co., Ltd. was liquidated, and at the same time, the
entire equity of Guangdong Fangda SOZN Lighting Co. was disposed, leading to loss in the control. Therefore, the two subsidiaries
are moved out of the consolidation scope in this period.
IX. Equity in Other Entities
1. Interests in subsidiaries
(1) Group Composition
Company Place of business Registered Business Shareholding percentage Obtaining method
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2017 Annual Report of China Fangda Group Co., Ltd.
address Direct Indirect
Designing,
manufacturing,
Fangda Jianke Shenzhen Shenzhen 98.39% 1.61% Incorporation
and installation of
curtain walls
Production,
processing and
Fangda
Shenzhen Shenzhen installation of 14.00% 86.00% Incorporation
Automatic
subway screen
doors
Production and
sales of new-type
materials
Fangda New
Nanchang Nanchang composite 75.00% 25.00% Incorporation
M aterial
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.
Dongguan New Installation and
Dongguan Dongguan 100.00% Incorporation
M aterial sales of building
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2017 Annual Report of China Fangda Group Co., Ltd.
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 Property
Shenzhen Shenzhen 100.00% Incorporation
M anagement 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 M etro screen
Hong Kong Hong Kong 100.00% Incorporation
(Hong Kong) Co., door
Ltd.
Hongjun
Investment Shenzhen Shenzhen Investment 98.00% 2.00% Incorporation
Company
Designing,
manufacturing,
Jianke Australia Australia Australia 100.00% Incorporation
and installation of
curtain walls
Note to the difference between shareholdings in subsidiaries and percentage of votes:
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2017 Annual Report of China Fangda Group Co., Ltd.
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:
Fangda Aluminum was liquidated and canceled in the reporting period. The Company has transferred all equity in Fangda SOZN and
has lost control in Fangda SOZN. Shenyang Decoration has finished liquidation. The industry and commerce canceling process has
not been finished yet by the reporting date.
2. Interests in joint ventures or associates
(1) Financial summary of insignificant joint ventures and associates
In RM B
Closing balance/amount occurred in this Opening balance/amount occurred in
period previous period
Joint venture: -- --
Total shareholding -- --
Associate: -- --
Total book value of investment 34,142,055.62 12,105,030.68
Total shareholding -- --
Net profit -2,162,975.06 -1,384,650.25
Total of misc. incomes -2,162,975.06 -1,384,650.25
X. Risks of Financial Tools
M ajor 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, in terest
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 e xplains 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 analyz e 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).
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2017 Annual Report of China Fangda Group Co., Ltd.
(1) Credit risk
Credit risk is caused by the failure of one party of a financial instrument in performing its obligations, causing the risk o f 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
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 remin ders,
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 12.85% of the total accounts receivable (2016:
23.59%); among other receivables, other receivables from top 5 customers account for 71.91% 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. On December 31, 2017, the total credit line
of the Group was RM B4,456,000,000, with RM B2,538,021,800 unused (December 31, 2016: RM B2,345,596,800).
Financial liabilities and excluded guarantees held by the Group by undiscounted residual contract cash flow (in RM B10,000) 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 61,600.00 61,600.00
Notes payable 53,292.10 53,292.10
Account payable 87,896.56 6,732.71 9.96 94,639.23
Employees’ wage payable 4,039.91 4,039.91
Interest payable 242.53 242.53
Other payables 15,533.63 31,241.89 3,343.43 50,118.95
Non-current liabilities due in 1
20,000.00 20,000.00
year
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2017 Annual Report of China Fangda Group Co., Ltd.
Other current liabilities 953.10 953.10
Long-term loans 80,000.00 9,397.82 89,397.82
Total liabilities 243,557.83 117,974.60 12,751.21 374,283.64
Financial liabilities and excluded guarantees held by the Group by undiscounted residual contract cash flow (in RM B10,000) at the
beginning of the period:
Opening amount
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
Non-current liabilities due in 1 year 3,514.81 3,514.81
Long-term payable 20,000.00 72,216.96 92,216.96
Total liabilities 237,728.15 65,024.17 72,216.96 374,969.28
(3) M arket risk
M arket 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.
As there is no floating interest rate borrowing during the current period, if the borrowing rate calculated with floatin g interest rate
rises or falls by 50 basis points, while other factors remain unchanged, the Group's net profit and shareholders' equity will remain
unchanged on December 31, 2017 (December 31, 2016: RM B 0.00).
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.
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2017 Annual Report of China Fangda Group Co., Ltd.
The principal operations of the Group are located in the territory of China. Except for subsidiaries established in Hong Kong and
Australia which hold foreign currency as assets in settlement currency, the principal business is settled in RM B. The proport ion of
foreign assets and liabilities held by the Group in the overall assets and liabilities is not significant. Therefore, the market risk of
foreign exchange changes undertaken by the Company is not significant.
See Note VII. 57 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
come from changes in product prices or equity tool prices.
The Group's investment in financial assets classified as fair value through changes in fair value through profit or loss, and investment
properties measured in fair value are measured at fair value on the balance sheet date. Therefore, the Group bears risks of changes in
the securities market and real estate market prices.
The Group closely follows impacts of p rice changes to the Company’s securities investment price and real estate 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 31.12.17, the Group’s assets/liability ratio is 57.52%
(31.12.16: 66.08%).
XI. Fair Value
1. Closing fair value of assets and liabilities measured at fair value
In RM B
Closing fair value
Items
First level fair value Second level fair value Third level fair value Total
1. Continuous fair value
-- -- -- --
measurement
2. Leased building 1,492,278,859.69 1,492,278,859.69
Total assets measured at
1,492,278,859.69 1,492,278,859.69
fair value continuously
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2017 Annual Report of China Fangda Group Co., Ltd.
Derivative
159,000.00 159,000.00
financial liabilities
Total assets measured at
159,000.00 159,000.00
fair value continuously
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 financ ial instruments traded in an active market;
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.
Shengjiu Investment Hong Kong Industrial investment HKD1.00 7.66% 7.66%
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2017 Annual Report of China Fangda Group Co., Ltd.
Ltd.
Gong Qing Cheng
Shi Li He
Investment
M anagement Jiujiang Industrial investment 19,780,992.00 2.26% 2.26%
Partnership
Enterprise (limited
partner)
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 M r. Xiong Xi – son of M r. Xiong
Jianming, is holding 15% of the shares.
2. Shenzhen Shilihe Investment Co., Ltd. was renamed as Gongqingcheng Shilihe Investment M anagement Partnership (Limited
Partnership).
3. 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 Gong Qing Cheng Shi Li He Investment
M anagement Partnership Enterprise are related parties. The Company is not notified of other action-in-concert or related parties
among the other holders of current shares.
The final controller of the Company is Xiong Jianming.
Others:
2. Subsidiaries of the Company
See Note IX. 1.
3. Joint ventures and associates
See Note IX. 2 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
Jiangxi Business Innovative Property Joint Stock 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
Shenzhen Qijian Technology Co., Ltd. Common actual controller
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2017 Annual Report of China Fangda Group Co., Ltd.
5. Related transactions
(1) Related transactions for purchase and sale of goods, provision and acceptance of services
Purchasing of goods and services
In RM B
Amount occurred Whether the
Occurred in previous
Affiliated party Related transaction in the current Approved amount transaction amount is
period
period exceeded
None
Sales of goods and services
In RM B
Amount occurred in the
Affiliated party Related transaction Occurred in previous period
current period
Shenzhen Qijian Technology Property service and sales of
20,126.65
Co., Ltd. goods
Shenzhen Ganshang Joint Property service and sales of
8,434.81
Investment Co., Ltd. goods
Notes about related transactions for purchase and sale of goods, provision and acceptance of services
(2) Related leasing
The Company is the leasor:
In RM B
Name of the leasee Category of asset for lease Rental recognized in the period Rental recognized in the period
Shenzhen Ganshang Joint
Houses & buildings 125,775.90 121,988.10
Investment Co., Ltd.
Shenzhen Qijian Technology
Houses & buildings 179,744.00
Co., Ltd.
(3) Related guarantees
The Company is the guarantor:
In RM B
Beneficiary party Amount guaranteed Start date Due date Completed or not
Fangda Jianke 48,000.00 06.07.16 15.07.18 No
Fangda Jianke 40,000.00 06.12.17 06.12.18 No
Fangda Jianke 30,000.00 23.08.17 22.08.18 No
Fangda Jianke 40,000.00 01.11.17 01.11.18 No
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2017 Annual Report of China Fangda Group Co., Ltd.
Fangda Jianke 18,000.00 16.02.17 15.02.18 No
Fangda Jianke 26,000.00 27.12.16 30.06.18 No
Fangda Automatic 21,600.00 06.07.16 05.07.18 No
Fangda Automatic 15,000.00 31.10.17 31.10.18 No
Fangda Automatic 20,000.00 23.08.17 22.08.18 No
Fangda Automatic 10,000.00 27.12.16 30.06.18 No
Fangda Property 130,000.00 03.02.15 02.02.23 No
Jiangxi New M aterial 8,000.00 27.05.17 26.05.18 No
No
The Company is the guarantied party:
In RM B
Guarantor Amount guaranteed Start date Due date Completed or not
Fangda Jianke 25,000.00 26.09.17 26.09.18 No
Note to related guarantees
The above-mentioned guarantees are all associated guarantees within interested entities of the Group.
(4) Remuneration of key management
In RM B
Items Amount occurred in the current period Occurred in previous period
Directors, supervisors and senior
9,281,475.55 7,214,700.62
management
6. Receivable and payables due with related parties
(1) Receivable interest
In RM B
Closing balance Opening balance
Project Affiliated party Remaining book Remaining book
Bad debt provision Bad debt provision
value value
Other receivables Shenzhen Woke 865,802.94 86,580.29 867,442.94 25,974.09
Other receivables Shenyang Fangda 42,877.00 1,286.31
Account receivable Qijian Technology 735.00 7.35
(2) Receivable interest
In RM B
195
2017 Annual Report of China Fangda Group Co., Ltd.
Project Affiliated party Closing balance of book value Opening balance of book value
Other payables Shenyang Fangda 7,908.80
XIII. Contingent events
1. Major commitments
M ajor commitments that exist on the balance sheet day
On November 6, 2017, Fangda Real Estate Co., Ltd., a subsidiary of the Company, and Bangshen Electronics (Shenzhen) Co., Ltd.
signed the ―Joint Development Agreement on Fangda Bangshen Industrial Park (Temporary Name) Urban Renewal Project‖, and the
two parties agreed to develop cooperatively. In order to develop urban renewing projects such as a ―renovation project‖, Fangda Real
Estate provided Party A with property compensation through renovating and renovating the property allocation terms agreed upon by
both parties, and obtained independent development rights of the project. As of December 31, 2017, Fangda Real Estate has paid a
deposit of RMB 20,000,000.
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 RM B23 million and de-freezing of the
amount RM B23 million by the bank. By the report date, the lawsuit remain pending.
(2) Pending major lawsuits
On September 6, 2017, Chenghua District People's Court of Chengdu M unicipality sentenced Sichuan Chuta Hengyuan Industrial
Co., Ltd. to pay construction money to Fangda Jianke within 10 days from the date of the verdict 川0108民初1828号
RM B10,242,182.99. As of the date of this report, Fangda Jianke has applied for execution and has not received the relevant payment.
(3) Contingent liabilities formed by providing of guarantee to other companies’ debts and their influences on financial situation
By December 31, 2017, the Company has provided loan guarantees for the following entities:
Name of guaranteed entity Guarantee Amount (in S tart date End date
RMB10,000)
Fangda Automatic Guarantee 1,600.00 2017-12-13 2018-12-12
Fangda Jianke Guarantee 20,000.00 2017-8-31 2018-8-31
Fangda Jianke Guarantee 10,000.00 2017-9-13 2018-9-13
Fangda New M aterial Guarantee 5,000.00 2017-6-19 2018-6-18
Fangda Property Pledge guarantee 2,761.20 2015-2-12 2023-2-11
Fangda Property Pledge guarantee 7,009.77 2015-4-23 2023-2-11
Fangda Property Pledge guarantee 4,334.40 2015-6-8 2023-2-11
Fangda Property Pledge guarantee 426.63 2015-8-21 2023-2-11
196
2017 Annual Report of China Fangda Group Co., Ltd.
Fangda Property Pledge guarantee 3,525.73 2015-9-11 2023-2-11
Fangda Property Pledge guarantee 518.82 2015-9-23 2023-2-11
Fangda Property Pledge guarantee 480 2015-10-14 2023-2-11
Fangda Property Pledge guarantee 3,433.95 2015-11-6 2023-2-11
Fangda Property Pledge guarantee 545.76 2015-11-20 2023-2-11
Fangda Property Pledge guarantee 2388.91 2015-12-9 2023-2-11
Fangda Property Pledge guarantee 4,614.39 2015-12-28 2023-2-11
Fangda Property Pledge guarantee 4241.27 2016-1-26 2023-2-11
Fangda Property Pledge guarantee 4,260.74 2016-1-29 2023-2-11
Fangda Property Pledge guarantee 343.47 2016-3-28 2023-2-11
Fangda Property Pledge guarantee 3,615.06 2016-4-27 2023-2-11
Fangda Property Pledge guarantee 1,157.69 2016-5-22 2023-2-11
Fangda Property Pledge guarantee 414.66 2016-5-30 2023-2-11
Fangda Property Pledge guarantee 3,113.99 2016-6-13 2023-2-11
Fangda Property Pledge guarantee 1,465.99 2016-6-24 2023-2-11
Fangda Property Pledge guarantee 4415.64 2016-7-26 2023-2-11
Fangda Property Pledge guarantee 4,813.23 2016-8-15 2023-2-11
Fangda Property Pledge guarantee 5,519.40 2016-9-7 2023-2-11
Fangda Property Pledge guarantee 15,048.01 2016-10-8 2023-2-11
Fangda Property Pledge guarantee 7,628.15 2016-11-7 2023-2-11
Fangda Property Pledge guarantee 6,140.11 2016-11-30 2023-2-11
Fangda Property Pledge guarantee 9,889.21 2017-1-19 2023-2-11
Fangda Property Pledge guarantee 1,830.24 2017-5-31 2023-2-11
Fangda Property Pledge guarantee 2,581.45 2017-6-28 2023-2-11
Fangda Property Pledge guarantee 2,879.95 2017-8-30 2023-2-11
Total 145,997.82
Note: Contingent liabilities caused by guarantees provided for other entities are all related guarantees between interested entities in
the Group.
(4) 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 RM B396 million.
On 31.12.17, 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
197
2017 Annual Report of China Fangda Group Co., Ltd.
XIV. Post-balance-sheet events
1. Profit distribution
In RM B
Profit or dividend to be distributed 177,546,338.10
Profit or dividend approved to be distributed 177,546,338.10
2. Notes to other issues in post balance sheet period
In 2013, Fangda Jianke filed a lawsuit to Shenyang M iddle People’s Court again Shenyang Lidu Commerce Co., Ltd., requiring
construction payment and loss of RMB9,375,483.47 and the interest. On February 11, 2018, the two parties reached a settlement
through the civil mediation book of Liaoning Higher People's Court (2016) Liao M in Zhong No. 998 Civil Litigation Paper.
Shenyang Lidu Commerce Co., Ltd. actually paid Fangda Jianke RM B1,870,240.00 yuan. On M arch 15, 2018, the subsidiary Fangda
Jianke actually received RM B1,870,240.00.
On 20.04.18, the Company has no other contingent events that should be disclosed.
XV. Other material events
1. Suspension of operations
In RM B
Suspended
operation profit
Income tax
Items Income Expense Total profit Net profit attributable to the
expenses
owners of parent
company
Suspension of
-22,939,797.68 22,939,797.68 22,939,797.68 16,297,017.20
operations
Other note
(1) Fangda Aluminum has ceased normal operations in 2011 and was cancelled on December 29, 2017. Shenyang Decoration has
finished liquidation. The industry and commerce canceling process has not been finished yet by the reporting date. The Company has
transferred all equity in Fangda SOZN and has lost control in Fangda SOZN.
(2) The discontinued operating net profit for 2017 includes: Shenyang Decoration's net profit for the current period of RM B
-8,074.07, Fangda Aluminum’s net profit for the period of RM B 6,340,920.55, and Fangda SOZN’s net profit for the period of RM B
16,606,951.20.
(3) The net profit from suspended business in 2016 includes: the net profit of RMB-34,466,097.73 of Shenyang Fangda and its
subsidiaries, RM B14,534.16 of Hong Kong Jiajun and RM B-13,623.03 of Fangda Aluminium, a net profit of RM B-43,983.88 from
Shenyang Decoration and a net profit of RMB-74,395,136.05 from Fangda SOZN.
198
2017 Annual Report of China Fangda Group Co., Ltd.
2. 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 P V devices, design and construct ion of P V 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 RM B
Offset between
Items Curtain wall Rail transport Real estate New energy Others Total
segments
1,655,994,799. 2,947,470,813.
Turnover 339,399,859.01 914,822,378.87 22,554,588.30 29,327,716.61 14,628,528.37
16 58
Including:
external 1,653,688,831. 2,947,470,813.
339,399,859.01 911,195,066.07 21,848,200.20 21,338,857.07
transaction 23 58
income
Inter-segment
transaction 2,305,967.93 3,627,312.80 706,388.10 7,988,859.54 14,628,528.37
income
Including:
1,630,744,173. 2,900,462,349.
major business 336,674,910.58 914,822,378.87 22,554,588.30 4,333,700.90
03 88
turnover
Operation cost 1,473,523,579. 246,106,664.12 297,698,007.68 7,535,695.83 2,041,826.84 28,666,884.43 1,998,238,889.
199
2017 Annual Report of China Fangda Group Co., Ltd.
17 21
Including:
1,453,633,762. 1,977,766,793.
major business 245,621,615.56 297,698,007.68 7,535,695.83 26,722,287.44
33 96
cost
-641,959,639.8 -165,417,937.8 -165,475,494.0 -475,301,286.7
Operation cost 166,003,263.83 22,905,151.48 -22,307,618.41
0 9 0 9
Operating 1,259,084,010. 1,424,533,211.
16,467,956.16 70,388,043.41 37,326,510.88 192,703,827.66 151,437,137.94
profit/(loss) 99 16
3,215,679,308. 3,500,088,530. 2,599,090,236. 2,483,627,104. 7,625,422,688.
Total assets 612,947,617.80 181,244,100.32
02 22 95 68 63
2,261,771,551. 2,382,722,726. 1,275,179,447. 4,386,483,486.
Total liabilities 267,578,953.60 115,143,262.12 634,446,440.41
37 23 28 45
3. Major transactions and events with impacts on investors’ decisions
1. Acquisition of Fangda SOZN, repurchasing of shares and debt payment agreement, and debt settlement agreement
(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
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 RM B12 million as agreed and provided interest -free loans of RM B30
million to Fangda SOZN. Fangda SOZN did not fulfill 90% of the sales or net profit target in 2015.
(2) Equity repurchases, creditor's rights and debt payment agreements and debt settlement agreement.
On 22.04.16, the Company, Fangda New Energy, Fangda SOZN, Shenzhen Jinma Yinke Electronics Co., Ltd., Luo Huichi and Jin
Yaping (spouse of Luo Huichi) signed the Stock Repurchasing and Debt Payment Agreement. According to the agreement, Shenzhen
Jinma Yinke shall pay RM B12 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
RM B23 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 20 th meeting of the 7th Board of Directors held on April 22, 2016 and comes into effect after
being approved at the 2015 General Shareholders’ M eeting.
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 RM B2 million on August 30, 2016 to require Jinma Yin gke
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 RM B2 million before
December 5, 2016, M arch 30, 2017, and June 30, 2017 and make the share repurchasing payment of RM B6 million before December
30, 2017. As of December 1, 2017, Fangda New Energy Co., Ltd. has received a share repurchase fee of RM B 1.6 million.
200
2017 Annual Report of China Fangda Group Co., Ltd.
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 pay ment
of RM B15,158,586.39 and interest.
On December 1, 2017, the Company and Luo Huichi, Jin Yaping, and Fangda SOZN signed the Debtors and Debt Restructuring
Agreement. According to the (2016) civil judgment of Guangdong 0305 People's Early 10459 Case, Luo Huichi and Jin Yaping shall
assume RM B15,158,586.39 of guarantee responsibility and liquidated damages, case acceptance fees, and maintenance fees to the
Company. In view of the fact that Fang Daosuo Zheng, Luo Huichi, and Jin Yaping were unable to repay funds in a timely manner ,
after the parties negotiated, the following arrangements for debt reorganization were implemented: The company granted an
exemption to the claims of RM B24,746,465.97 yuan to Fangda SOZN. After the exemption, the remaining debt of the company
owned by the other comp any, Daoshenzheng, was RM B 13,150,000.00. Luo Huichi was jointly and severally liable for the
above-mentioned residual claim of RM B 13,150,000.00 of the company. Jin Yaping had 30% joint guarantee responsibility for Luo
Huichi with joint guarantee responsibility. The remaining claims are repaid monthly in six years from January 2018. As of the date of
this report, 40,000 yuan has been received. According to the debt restructuring agreement and Fangda SOZN's position, the Company
wrote off the debt of RMB24,746,465.97 and made full provision for the remaining debt of RM B13,150,000.00.
On December 1, 2017, The Company and Jinma Yingke, Luo Huichi, Jin Yaping, and Fangda SOZN signed the "A greement on
Implementation of Reconciliation", and according to (2016) Guangdong 0305 Civil Decree No. 10401, Jinma Yingke confirmed that
it must pay equity to Fangda New Energy a transfer amount of RM B 12 million, liquidated damages, case acceptance fee, and
maintenance fee. Fangda New Energy agreed that after receiving a tot al of RM B 2 million in equity transfer fees paid by Jinma
Yingke Company, it will transfer the 60% stake in Fangda SOZN to Jinma Yingke at the same time, and it also exempts Jinma
Yingke from the payment of the remaining stock rights and all liquidated dam ages, case acceptance fees, and maintenance fees. In
view of the fact that Fangda SOZN was unable to repay the loan, Fangda New Energy agreed to waive Fangda SOZN's debt of
RM B56,220,793.94 after Fangda New Energy transferred Fangda SOZN’s 60% equity to Jinma Yingke and completed the industrial
and commercial change procedure. On February 13, 2018, Fangda SOZN had completed the formalities for the above-mentioned
equity industrial and commercial changes. According to the implementation of the above-mentioned implementation of the
settlement agreement and the actual situation of Fangda SOZN, Fangda New Energy made full provision for the above-mentioned
debt of RM B56,220,793.94 and other disbursement expenses of RM B9,754.58. At the same time, as of December 31, 2017, Fangda
New Energy has received a total of RM B2 million yuan equity transfer payments from Jinma Yingke. On December 31, 2017, the
Group lost control of Fangda SOZN, and it is no longer included in the consolidated statement of the current period. T he disposal
price and the disposal of the investment correspond to the consolidated financial statement at the level of the subsidiary’s net assets.
The difference between the shares of RM B 84,959,644.45 is included in the investment income for the period of loss of control.
XVI. Notes to Financial Statements of the Parent
1. Account receivable
(1) Account receivable disclosed by categories
In RM B
Closing balance Opening balance
Remaining book Remaining book
Type Bad debt provision Book Bad debt provision
value value Book value
value
Amount Proportio Amount Provision Amount Proportio Amount Provision
201
2017 Annual Report of China Fangda Group Co., Ltd.
n rate n rate
Recognition and
420,777. 12,623.3 408,154.5 468,186
providing of bad debt 100.00% 3.00% 100.00% 14,045.59 3.00% 454,140.85
88 4 4 .44
provisions on groups
420,777. 12,623.3 408,154.5 468,186
Total 100.00% 3.00% 100.00% 14,045.59 3.00% 454,140.85
88 4 4 .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
In RM B
Closing balance
Age
Account receivable Bad debt provision Provision rate
Sub-item of within 1 year
Less than 1 year 420,777.88 12,623.34 3.00%
Subtotal for less than 1 year 420,777.88 12,623.34 3.00%
Total 420,777.88 12,623.34 3.00%
Group recognition basis:
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 RM B117,090.96 was made in the period. RM B1,422.25 was recovered or reversed.
(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 RM B363,672.05, accounting for 86.43% of the total
remaining balance of all accounts receivable. The bad debt provision made at the end of the period is RM B10,910.16.
2. Other receivables
(1) Other receivables disclosed by categories
In RM B
Closing balance Opening balance
Remaining book Remaining book
Type Bad debt provision Book Bad debt provision
value value Book value
value
Amount Proportio Amount Provision Amount Proportio Amount Provision
202
2017 Annual Report of China Fangda Group Co., Ltd.
n rate n rate
Other receivables
with major individual
13,150,0 13,150,0 77,261, 77,261,42
amount and bad debt 1.92% 100.00% 14.40% 100.00%
00.00 00.00 420.29 0.29
provision provided
individually
(2) Recognition and
672,959, 186,183. 672,773,7 459,434 459,354,98
providing of bad debt 98.08% 0.03% 85.60% 79,545.24 0.02%
963.61 16 80.45 ,528.66 3.42
provisions on groups
686,109, 13,336,1 672,773,7 536,695 77,340,96 459,354,98
Total 100.00% 1.94% 100.00% 14.41%
963.61 83.16 80.45 ,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 RM B
Other receivables (by Closing balance
entity) Other receivables Bad debt provision Provision rate Reason
Cannot be recovered
Fangda SOZN 13,150,000.00 13,150,000.00 100.00%
because of insolvency
Total 13,150,000.00 13,150,000.00 -- --
In the group, the other receivables of which bad debt provision are made through the account aging method:
√ Applicable □ Inapplicable
In RM B
Closing balance
Age
Other receivables Bad debt provision Provision rate
Sub-item of within 1 year
Less than 1 year 96,777.72 2,903.33 3.00%
Subtotal for less than 1 year 96,777.72 2,903.33 3.00%
1-2 years 865,802.94 86,580.29 10.00%
4-5 years 20,000.00 16,000.00 80.00%
Over 5 years 80,699.54 80,699.54 100.00%
Total 1,063,280.20 186,183.16 17.51%
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
203
2017 Annual Report of China Fangda Group Co., Ltd.
(2) Bad debt provision made, returned or recovered in the period
A bad debt provision of RM B220,586.92 was made in the period. RM B39,364,954.34 was recovered or reversed.
(3) Other receivable written off in the current period
In RM B
Items Amount
Other receivable written off 24,860,414.95
Including significant other receivable:
In RM B
Writing-off
Entity Nature Amount Reason Related transaction
procedure
Operating
The borrower is Debt restructuring
Fangda SOZN borrowing from 24,860,414.95 No
insolvent. agreement
previous subsidiary
Total -- 24,860,414.95 -- -- --
Notes to written-off other receivables:
(4) Other receivables are disclosed by nature
In RM B
By nature Closing balance of book value Opening balance of book value
Associate accounts 671,896,683.41 535,629,171.29
Deposit
Other trades 14,213,280.20 1,066,777.66
Total 686,109,963.61 536,695,948.95
(5) Balance of top 5 other receivables at the end of the period
In RM B
Balance of bad debt
Entity By nature Closing balance Age Percentage (%) provision at the end
of the period
Fangda Jianke Associate accounts 509,794,895.73 Less than 1 year 74.30%
Fangda New Energy Associate accounts 39,454,651.64 Less than 1 year 5.75%
Fangda New Energy Associate accounts 41,674,416.54 1-2 years 6.07%
Fangda Property Associate accounts 33,425,037.26 Less than 1 year 4.87%
Fangda Property Associate accounts 9,323.39 1-2 years 0.00%
204
2017 Annual Report of China Fangda Group Co., Ltd.
Shihui International Associate accounts 30,430,197.80 2-3 years 4.44%
Shihui International Associate accounts 20,271.90 3-4 years 0.00%
Fangda SOZN Associate accounts 13,150,000.00 2-3 years 1.92% 13,150,000.00
Total -- 667,958,794.26 -- 97.35% 13,150,000.00
3. Long-term share equity investment
In RM B
Closing balance Opening balance
Items Remaining book Impairment Remaining book Impairment
Book value Book value
value provision value provision
Investment in
925,349,494.35 925,349,494.35 905,139,494.35 19,800,000.00 885,339,494.35
subsidiaries
Investment in
associates and 12,105,030.68 12,105,030.68
joint ventures
Total 925,349,494.35 925,349,494.35 917,244,525.03 19,800,000.00 897,444,525.03
(1) Investment in subsidiaries
In RM B
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 0.00 0.00 0.00
Fangda Automatic 18,831,241.35 18,831,241.35
Fangda New
74,496,600.00 74,496,600.00
M aterial
Fangda Property 200,000,000.00 200,000,000.00
Shihui
International 61,653.00 61,653.00
Holding Co., Ltd.
Fangda New
100,000,000.00 100,000,000.00
Energy
Hongjun
Investment 40,010,000.00 40,010,000.00
Company
205
2017 Annual Report of China Fangda Group Co., Ltd.
Total 905,139,494.35 40,010,000.00 19,800,000.00 925,349,494.35
(2) Investment in associates and joint ventures
In RM B
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 8,493,083 -107,856.
Investme .78 .49 29
nt Co.,
Ltd.
Shenzhen
Huihai
Yirong 3,504,090 5,000,000 6,469,694 -2,034,39
Internet .90 .00 .91 5.99
Service
Co., Ltd.
12,105,03 5,000,000 14,962,77 -2,142,25
Subtotal
0.68 .00 8.40 2.28
12,105,03 5,000,000 14,962,77 -2,142,25
Total
0.68 .00 8.40 2.28
(3) Others
The Company transferred all the equity held in Ganshang Joint Investment and Huihai Yirong Company to the subsidiary Hongjun
Investment.
4. Operational revenue and costs
In RM B
Items Amount occurred in the current period Occurred in previous period
206
2017 Annual Report of China Fangda Group Co., Ltd.
Income Cost Income Cost
Other businesses 29,333,583.31 2,041,826.84 34,208,627.97 8,308,449.63
Total 29,333,583.31 2,041,826.84 34,208,627.97 8,308,449.63
Others:
5. Investment income
In RM B
Items Amount occurred in the current period Occurred in previous period
Gains from long-term equity investment
150,000,000.00 430,000,000.00
measured by costs
Gains from long-term equity investment
-2,142,252.28 -1,384,650.25
measured by equity
Investment gain obtained from disposal of
5,037,221.60
long-term equity investment
Investment gain obtained from disposal of
financial assets measured at fair value with
77,348,884.05
variations accounted into current income
account
Investment gain obtained from disposal of
financial assets measured at fair value with
-77,045,286.87
variations accounted into current income
account
Investment gain of financial products 4,941,935.94
Others -2,000.00 5,424.66
Total 158,138,502.44 428,620,774.41
XVII. Supplementary Materials
1. Detailed accidental gain/loss
√ Applicable □ Inapplicable
In RM B
Items Amount Notes
Gain/loss of non-current assets 89,483,320.53
Subsidies accounted into the current income
account (except the government subsidy
5,637,910.24
closely related to the enterprise’s business
and based on unified national standard
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2017 Annual Report of China Fangda Group Co., Ltd.
quota)
Gain from entrusted investment or assets
20,455,865.70
management
Gain/loss from debt reorganization -3,674,141.05
Gain/loss from change of fair value of
transactional financial asset and liabilities,
and investment gains from disposal of
transactional financial assets and liabilities 2,013,922.62
and sellable financial assets, other than valid
period value instruments related to the
Company’s common businesses
Gain/loss from change of fair value of
investment property measured at fair value 889,708,083.34
in follow-up measurement
Other non-business income and expenditures
4,054,553.86
other than the above
Less: Influenced amount of income tax 220,906,068.58
Influenced amount of minority
8,581,417.95
shareholders’ equity
Total 778,192,028.71 --
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
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
41.53% 0.970 0.970
shareholders of the Company
Net profit attributable to the
common owners of the PLC after
13.29% 0.31 0.31
deducting of non-recurring
gains/losses
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2017 Annual Report of China Fangda Group Co., Ltd.
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 t he international and
Chinese account standards
□ Applicable √ Inapplicable
209
2017 Annual Report of China Fangda Group Co., Ltd.
Chapter 12 Documents for Reference
1. The Annual Report 2017 and the Summary with signature of the legal representative (Chinese and English);
2. Accounting Statements with signatures and seals of the legal representative and financial principal and chief of
accounting department;
3. Original copy of the Auditors’ Report under the seal of the CPA and signed by and under the seal of certified
accountants.
4. Originals of all documents and manuscripts of Public Notices of the Company disclosed in public in the
newspapers as designated by China Securities Regulatory Commission.
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