China Fangda Group Co., Ltd. 2016 Annual Report China Fangda Group Co., Ltd.
2016 Annual Report
March 2017
China Fangda Group Co., Ltd. 2016 Annual Report Chapter 1 Important Statement, Table of Contents and Definitions The members of the Board and the Company guarantee that the announcement is free from any false information, misleading statement or material omission and are jointly and severally liable for theinformation‟s truthfulness, accuracy and integrity.
Mr. Xiong Jianming, the Chairman of Board, Mr. Lin Kebin, the Chief Financial Officer, and Mr. Chen Yonggang, the manager of accounting department declare: the Financial Report carried in this report is authentic and completed.
All the Directors have attended the meeting of the board meeting at which this report was examined.
Forward-looking statements involved in this report including future plans do not make any material promise to investors. Investors should pay attention to investment risks.
The Company needs to comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure Guideline No.6– Listed Companies Engaged in Decoration Business and disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure Guideline No.3– Listed Companies Engaged in Property Development.
The Company has specified market, management and production and
China Fangda Group Co., Ltd. 2016 Annual Report operation risks in this report. Please review the potential risks and measures mentioned in the discussion and analysis of future development in IV. Management Discussion and Analysis.
The Board meeting reviewed and approved the profit distribution preplan: distributing cash dividend of RMB3.5 for each ten shares to all shareholders on the basis of 789,094,836 shares and no dividend share is issued to shareholders, but 5 shares will be issued for every 10 shares to all shareholders through capitalization of the reserve.
China Fangda Group Co., Ltd. 2016 Annual Report Table of Contents
I. Important Statement, Table of Contents and Definitions ......................................................................................................................2 II. About the Company and Financial Highlights ....................................................................................................................................7 Chapter 3 Business Introduction ............................................................................................................................................................ 12 Chapter 4 Operation Discussion and Analysis ....................................................................................................................................... 17 V Significant Events .............................................................................................................................................................................. 41 Chapter 6 Changes in Share Capital and Shareholders .......................................................................................................................... 55 Chapter 7 Preferred Shares .................................................................................................................................................................... 65 Chapter 8 Particulars about the Directors, Supervisors, Senior Management and Employees .............................................................. 66 Chapter 9 Corporation Governance ....................................................................................................................................................... 72 Chapter 10 Information about theCompany’s Securities ...................................................................................................................... 79 Chapter 11 Financial Statements ........................................................................................................................................................... 80 Chapter 12 Documents for Reference .................................................................................................................................................. 198
China Fangda Group Co., Ltd. 2016 Annual Report Definitions
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|Terms||Description|
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|Fangda Group, company, the Company||China Fangda Group Co., Ltd.|
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||Refers||
|Articles of Association||Articles of Association of China Fangda Group Co., Ltd.|
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|Meeting of shareholders||Meetings of shareholders of China Fangda Group Co., Ltd.|
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|Board of Directors||Board of Directors of China Fangda Group Co., Ltd.|
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|Supervisory Committee||Supervisory Committee of China Fangda Group Co., Ltd.|
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||Refers||
|Banglin Co.||Shenzhen Banglin Technologies Development Co., Ltd.|
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||Refers||
|Shilihe Co.||Shenzhen Shilihe Investment Co., Ltd.|
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||Refers||
|Shengjiu Co.||Shengjiu Investment Ltd.|
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|Fangda Jianke||Shenzhen Fangda Jianke Group Co., Ltd.|
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|Fangda Automatic||Shenzhen Fangda Automation System Co., Ltd.|
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||Refers||
|Fangda New Material||Fangda New Materials (Jiangxi) Co., Ltd.|
||to||
||Refers||
|Fangda New Resource||Shenzhen Fangda New Energy Co., Ltd.|
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||Refers||
|Fang SOZN||Guangdong Fangda SOZN Lighting Co., Ltd.|
||to||
||Refers||
|Shenyang Fangda||Shenyang Fangda Semi-conductor Lighting Co., Ltd.|
||to||
||Refers||
|Shenzhen Woke||Shenzhen Woke Semi-conductor Lighting Co., Ltd.|
||to||
|Fangda Aluminium|Refers|Jiangxi Fangda New Type Aluminum Co., Ltd.|

China Fangda Group Co., Ltd. 2016 Annual Report
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||to||
||Refers||
|Dongguan Fangda New Material||Dongguan Fangda New Material Co., Ltd.|
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|Kexunda Co.||Shenzhen Kexunda Software Co., Ltd.|
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|Fangda Property||Shenzhen Fangda Property Development Co., Ltd.|
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|Chengdu Fangda Jianke||Chengda Fangda Construction Technology Co., Ltd.|
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|Shihui International||Shihui International Holding Co., Ltd.|
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|Shenyang Decoration||Fangda Decoration Engineering (Shenyang) Co., Ltd.|
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|Kechuangyuan Software||Shenzhen Qianhai Kechuangyuan Software Co., Ltd.|
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|CSRC||China Securities Regulatory Commission|
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|SZSE||Shenzhen Stock Exchange|
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China Fangda Group Co., Ltd. 2016 Annual Report Chapter 2 About the Company and Financial Highlights
1. Company profiles
|||||
|-|-|-|-|
|Stock ID|Fangda Group, Fangda B|Stock code|000055、200055|
|Modified stock ID (if any)|None|||
|Stock Exchange|Shenzhen Stock Exchange|||
|Chinese name|China Fangda Group Co., Ltd.|||
|Chinese abbreviation|Fangda Group|||
|English name (if any)|CHINA FANGDA GROUP CO., LTD.|||
|English abbreviation (if any)|CFGC|||
|Legal representative|Xiong Jianming|||
||Fangda Technology Building, Kejinan 12th Avenue, High-tech Zone, Hi-tech Park South Zone,|||
|Registered address||||
||Shenzhen, PR China.|||
|Zip code|518057|||
||20F, Fangda Technology Building, Kejinan 12th 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|

China Fangda Group Co., Ltd. 2016 Annual Report
|||
|-|-|
|Website assigned by CSRC to release the online||
||http://www.cninfo.com.cn|
|reports||
|Place for information inquiry|Secretarial Office of the Board|

4. Registration changes
|||
|-|-|
|Organization code|91440300192448589C|
|Changes in main businesses since the||
||Property development business is added|
|listing of the Company||
||In 1996, the Company listed it’s A and B shares and the controlling shareholder is|
||Shenzhen Fangda Group Co., Ltd. On August 25, 2000, the controlling shareholder|
|Changes in the controlling shareholders (if|changed its name into Shenzhen Fangda Economic Development Co., Ltd. On July 5,|
|any)|2002, the controlling shareholder changed into Shenzhen Banglin Technologies|
||Development Co., Ltd. By the end of this reporting period, the controlling shareholder|
||remains the Shenzhen Banglin Technologies Development Co., Ltd..|

5. Other information
Public accountants employed by the Company
|||
|-|-|
|Public accountants|Grant Thornton (limited liability partnership)|
|Address|5th Floor, Scitech Place, 22 Jianguomen Wai Avenue, Chaoyang District, Beijing, China|
|Signing accountant names|Xie Peiren, Hu Gaosheng|

Sponsor engaged by the Company to perform continued supervision and guide during the reporting period
√ Applicable□ Inapplicable
|||||
|-|-|-|-|
|Sponsor name|Office address|Representatives|Period of supervision and guide|
|China Merchants Securities Co.|38-45F, Jiangsu Building, Yitian||August 1, 2016 – December 31,|
|||Liang Zhanguo, Ding Yi||
|Ltd.|Road, Futian District, Shenzhen||2017|

Financial advisor engaged by the Company to perform continued supervision and guide during the reporting period
□ Applicable√ Inapplicable
6. Financial Highlight
The Company retroactively adjusts or restates financial statistics of the previous years because of changes in account policies and correction of accounting errors.
□ Yes√ No
||||||
|-|-|-|-|-|
||2016|2015|Increase/decrease|2014|
|Turnover (yuan)|4,203,866,173.72|2,550,467,494.78|64.83%|1,938,324,435.51|
|Net profit attributable to|697,956,378.23|107,272,369.77|||
|shareholders of the listed company|||550.64%|96,998,429.76|
|(yuan)|||||

China Fangda Group Co., Ltd. 2016 Annual Report
||||||
|-|-|-|-|-|
|Net profit attributable to the|||||
|shareholders of the listed company|||||
||623,075,474.92|29,070,293.64|2,043.34%|69,068,577.10|
|and after deducting of|||||
|non-recurring gain/loss (RMB)|||||
|Net cash flow generated by|465,717,074.92|-360,115,114.04|||
|||||-557,893,929.44|
|business operation (RMB)|||||
|Basic earnings per share|0.91|0.14|||
||||550.00%|0.13|
|(yuan/share)|||||
|Diluted earnings per share|0.91|0.14|||
||||550.00%|0.13|
|(yuan/share)|||||
|Weighted average net income/asset|||||
||38.83%|8.42%|30.41%|8.14%|
|ratio|||||
||||Increase/decrease from||
||End of 2016|End of 2015||End of 2014|
||||the end of last year||
|Total asset (RMB)|6,787,051,278.08|4,464,147,811.40|52.03%|3,662,719,900.41|
|Net profit attributable to the|2,364,262,560.28|1,319,496,334.84|||
|shareholders of the listed company|||79.18%|1,234,930,863.46|
|(RMB)|||||

7. Differences in accounting data under domestic and foreign accounting standards
1. Differences in net profits and assets in financial statements disclosed according to the international and Chinese account standards
□ Applicable√ Inapplicable
There is no difference in net profits and assets in financial statements disclosed according to the international and Chinese account standards during the report period.
2. Differences in net profits and assets in financial statements disclosed according to the overseas and Chinese account standards
□ Applicable√ Inapplicable
There is no difference in net profits and assets in financial statements disclosed according to the international and Chinese account standards during the report period.
8. Financial highlights by quarters
In RMB
||||||
|-|-|-|-|-|
||Q1|Q2|Q3|Q4|
|Turnover|469,103,396.78|540,352,652.97|731,795,188.23|2,462,614,935.74|
|Net profit attributable to the|22,188,780.56|30,967,624.80|61,100,083.90|583,699,888.97|

China Fangda Group Co., Ltd. 2016 Annual Report
||||||
|-|-|-|-|-|
|shareholders of the listed company|||||
|Net profit attributable to the|||||
|shareholders of the listed company|||||
||23,019,578.47|21,245,511.10|56,370,833.65|522,439,551.70|
|and after deducting of|||||
|non-recurring gain/loss|||||
|Cash flow generated by business|||||
||-59,715,816.88|358,185,160.80|154,590,402.58|12,657,328.42|
|operations, net|||||

Where there is difference between the above-mentioned financial data or sum and related financial data in quarter report and interim report disclosed by the Company
□ Yes√ No
9. Accidental gain/loss item and amount
√ Applicable□ Inapplicable
In RMB
||||||
|-|-|-|-|-|
|Items|2016|2015|2014|Notes|
|Non-current asset disposal gain/loss|-3,080,469.74||||
|(including the write-off part for which assets||-522,948.72|-24,398.43||
|impairment provision is made)|||||
|Subsidies accounted into the current income|7,571,963.67||||
|account (except the government subsidy|||||
|closely related to the enterprise’s business||2,246,386.84|2,340,175.75||
|and based on unified national standard|||||
|quota)|||||
|Capital using expense charged to|||||
|non-financial enterprises and accounted into|||3,649,313.12||
|the current income account|||||
|Gain from entrusted investment or assets|1,401,717.08||||
|||250,897.54|2,144,844.80||
|management|||||
|Gain/loss from debt reorganization|-2,445,254.63||||
|Gain/loss from change of fair value of|2,369,839.47||||
|transactional financial asset and liabilities,|||||
|and investment gains from disposal of|||||
|transactional financial assets and liabilities||4,341,316.92|-2,852,885.00||
|and sellable financial assets, other than valid|||||
|period value instruments related to the|||||
|Company’s common businesses|||||
|Gain/loss from change of fair value of|11,558,304.10||||
|investment property measured at fair value||85,793,780.49|34,897,632.10||
|in follow-up measurement|||||

China Fangda Group Co., Ltd. 2016 Annual Report
||||||
|-|-|-|-|-|
|Other non-business income and expenditures|5,857,845.48||||
|||7,624,429.39|-3,671,724.03||
|other than the above|||||
|Other gain/loss items satisfying the|58,154,670.60||||
|definition of non-recurring gain/loss account|||||
|Less: Influenced amount of income tax|6,168,477.85|20,963,417.56|9,526,862.57||
|Influenced amount of minority|339,234.87||||
|||568,368.77|-973,756.92||
|shareholders’ equity (after-tax)|||||
|Total|74,880,903.31|78,202,076.13|27,929,852.66|--|

Explanation statement should be made for accidental gain/loss items defined and accidental
gain/loss items defined as regular gain/loss items according to the Explanation Announcement of Information Disclosure No. 1 - Non-recurring gain/loss mentioned.
√ Applicable□ Inapplicable
||||
|-|-|-|
|Items|Amount|Reason|
|||The others are the gain of recalculation of the residual shares at their|
|Others|58,154,670.60|fair value after the Company lost the control of its subsidiary|
|||Shengyang Fangda in the report period.|

China Fangda Group Co., Ltd. 2016 Annual Report Chapter 3 Business Introduction
1. Major businesses of the Company during the report period
Whether the Company needs to comply with disclosure requirements of special industries
Yes
Property development and decoration industries
The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure Guideline No.6– Listed Companies Engaged in Decoration Business.
The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure Guideline No.3– Listed Companies Engaged in Property Development.
The Company is headquartered in Nanshan District of Shenzhen and became listed in Shenzhen Stock Exchange on November 29, 1995. Currently, four major business subsidiaries of the Company are national high-tech enterprises with modern production bases in Shenzhen, Shanghai, Chengdu, Nanchang, Dongguan and Foshan. The Company was engaged in the following businesses in the report period.
1. Curtain wall system and material industry
(1) Main products and purposes
TheCompany’s main products include energy-saving curtain walls, photoelectricity curtain walls, LED color-display curtain walls and aluminium plate materials. Construction curtain walls are mainly used on high-level buildings, large-area public venues such as airports, stations, cultural centers and exhibition centers, daylighting roof, shaped construction (ball-shaped and clock-shaped buildings) with external retaining and decoration functions.
(2) Operation mode
The Company seeks to win orders through tenders and purchase raw materials and arrange production based on orders. The Company integrates designing, production, engineering and after-sales services. TheCompany’s curtain wall products are engineered by itself. The operation mode remained unchanged in the report period.
(3) Main business drive
See 3. Core competitiveness analysis.
(4) Development stage of the industry, circle and industry position
As China continues urbanizing, the demand for construction curtain walls will grow rapidly, fueling the development of the curtain wall industry. Over recent years, a series of industry policies will be issued to push forward the industry, providing a gold opportunity for the development of energy-saving curtain wall and material business.
The Company is a pioneer and first listed company in this industry. Over the past more than 20 years, the Company has undertaken hundreds of large projects and received the highest award in the industry China Construction Luban Award and Zhan Tianyou Civil Engineering Award for many times. The Company has also received nearly 100 provincial and above awards. The Company ranks among the top 5 players in the globe in terms of the market share of high-end energy-saving curtain walls. The Company has a strong technology lead in the industry with 398 patents, including 32 intention patents and one software copyright. The Company also took part in the preparation of more than 10 national or industry standards including the Public Construction Energy Saving Design Standard, making 9 records among Chinese enterprises.
(5) Impacts of the macro-economy, industry policies and theCompany’s measures
China Fangda Group Co., Ltd. 2016 Annual Report The year 2016 is the first year for China to realize the target of building an overall well-off country and the first year of the 13th Five-Year Plan Period of the construction decoration industry. Despite great difficulties for the industry in 2016, the industry remained expanding in 2016. The strong development momentum of high buildings continued driving the demand for construction curtain walls. Meanwhile, a series of national policies continued boosting the innovation of the construction decoration industry in 2016. The business mode is evolving to Internet+ innovation of the traditional business mode. IT technologies such as BIM are increasingly used in construction decoration engineering, pushing the improvement of quality and upgrade of the business mode. The domestic construction industry has continued its pace to expand globally. The national strategy of “One Road, One Belt” provides fresh driving force to the overseas investment in infrastructure construction and offers great opportunities to explore the global market. The Company established the Australian branch in 2016 to integrate overseas bidding and engineering management resources, and established the overseas business team to improve the overseas engineering capability and further explore the overseas market.
(6) Quality control system, implementation standard, control measures and overall evaluation
Quality control system: The Company has implemented overall quality management and established quality management system to cover designing, raw material purchasing, production, inspection, product warehousing, delivery, and after-sales services in accordance with ISO9001 and regularly evaluated the quality management system. Wholly-owned subsidiary Fangda Jianke is one of the first companies that obtained the ISO9001 certificate in the industry in China. Fangda Jianke has also passed the ISO14001 and OHSAS18001 certification.
Implementation standards: The Company strictly follows the GB/T21086-2007 and JG/T231-2007 standards in implementing construction curtail wall projects.
Qualtiy control measures: The Company has established a solid quality control organization to strictly implement the quality management system and increase efforts on quality control.
Overall evaluation: TheCompany’s product and engineering quality complies with related regulations and standards. The Company is committed to providing high-quality products and engineering for customers.
(7) Significant quality problem in the report period
The Company had no significant quality problem in the report period.
2. Rail transport equipment business
TheCompany’s main products in this sector are rail transport screen door systems, which are a necessary part of modern subway system. It is installed at the edge of the subway platform and separates trains from the platform. The Company seeks to win orders through tenders and purchase raw materials and arrange production based on orders. The Company has built a complete industry chain that integrates designing, production, engineering and after-sales services. The operation mode remained unchanged in the report period.The Company has developed rail transport screen door systems with independent intellectual property rights. The Company also prepared the first Rail Transport Station Screen Door Standard. Currently, the screen door systems have been used in 23 cities, ranking No.1 in China in terms of the market share. The Company is also the largest supplier of screen doors in the world. 3. New energy industry: Solar PV power generation industry is largely supported by the Chinese government. The Company is one of the first companies that possess intellectual property rights in the designing, production and integration of solar PV systems. Currently, the Company has developed solar PV power plant projects with an installation capacity of 19.5MWp.
4. Real estate
The Company holds two property projects: Shenzhen Fangda Town and Nanchang Phoenix Land Project. Fangda Town project is a renovation project, while Nanchang Phoenix Land project is an office building and business apartment project. Currently phase I of Fangda Town project has been completed and put into sales. Nanchang Phoenix Land Project has not been started in 2016. Please read 3. Core competitiveness analysis and Chapter 4 Operation Discussion and Analysis for detailed discussion.
China Fangda Group Co., Ltd. 2016 Annual Report 2. Major assets change
1. Major assets change
|||
|-|-|
|Main assets|Major change|
|Equity assets|No major change|
|Fixed assets|No major change|
||The intangible assets decreased 36.64% year on year because the Company lost control|
|Intangible assets||
||power on Shenyang Fangda and the land use right decreased accordingly.|
|Construction in process|No major change|

2. Major foreign assets
□ Applicable√ Inapplicable
3 Core Competitiveness Analysis
Whether the Company needs to comply with disclosure requirements of special industries
Yes
Property development and decoration industries
The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure Guideline No.6– Listed Companies Engaged in Decoration Business.
The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure Guideline No.3– Listed Companies Engaged in Property Development.
(1) Curtain wall system and material
1. Expertise and brand competitiveness
In response to the national call for energy saving and emission reduction, the Company has aggressively develop solar electric and optimal and energy-saving low-carbon curtain walls, developing a series of domestic and global leading solar and energy-saving curtain wall products. The Company owns 398 curtain wall and material patents (including 32 invention patents) and one software copyright, ranking top among domestic peers. It has achieved many firsts in the industry and created incomparable brand equity, making it an optimal choice in the domestic high-end curtain wall and material market. FANGDA is a nationwide well-known trademark in China.
2. Focusing on the high-end market to edge out competitors
Amid the fierce market competition, the Company has focused on the high-end energy-saving curtain wall market and technical
integration to improve high-end project quality. Moreover, it has focused resources on high-end curtain wall engineering and won
several Luban awards, Zhan Tianyou Civil Engineering awards and Classic Construction for the 50th Anniversary of the Foundation
of thePeople’s Republic of China, High-Quality Construction, White Magnolia Prize and Customer Satisfactory Engineering and the
China Fangda Group Co., Ltd. 2016 Annual Report title of―Top 10 Competitive Chinese Curtain WallProvider‖. The Company has built a leading brand and created a clear edge in the high-end curtain wall market.
3. Well-developed industry base landscape
Thanks to continued investment in facilities, the Company has established a national business landscape with Shenzhen as the headquarters, Dongguan Songshanhu as the base in the south, Beijing in the north, Chengdu in the southwest and Shanghai and Nanchang in the east. The Dongguan Songshanhu and Nanchang bases are the largest and most advanced curtain wall system and material production bases in China and across the world, fueling the Company to increase its market share and competitiveness. 4. General solutions
The Company has integrated the design, production, management and engineering of curtain wall systems to enjoy technological, cost, quality and service advantages.
(2) Rail transport equipment business
1. National development strategy
As the Chinese government continues to implement the “One Road, One Belt” and “Chinese Manufacturing Plan 2025” strategies, the Chinese urban railway transportation has been developed rapidly, turning the subway screen door business onto a fast track. By the end of 2016, a total of 130 subway lines have been running in more than 29 cities with a total length of 3,849 km. More than 100 lines in more than 40 cities are under construction with a total length of more than 3,000 km. The year 2016 is the first year of the 13th five-year plan period. The National Reform and Development Commission approved the applications of rail transport construction of about 8,600 km in 43 cities.
2. Technical advantage
Through continued independent innovation, the Company has developed the global leading metro screen door system with full intellectual property right and broken the monopoly of overseas competitors. The Company has also compiled the Rail Transport Station Screen Door Standard, which is the first of its kind in China. The standard was approved in April 2006 and was implemented on March 1, 2007. As the first standard in the industry in China, the standard has played a key role in guiding the development ofChina’s rail transport screen door industry and enabled the Company a dominant lead in the industry. Currently, the Company has 227 metro screen door patents, including 48 invention patents. The Company also has seven computer software copyrights. 3. Brand equity
So far, the Company has undertaken railway screen door projects in most domestic cities, Hong Kong, Singapore and Kuala Lumpur of Malaysia. The Fangda screen door system has grasped a leading market share and established incomparable brand influence thanks to its patents, standard and maintenance services. The Company has become the largest railway screen door supplier in the world.
(3) New energy industry
The new energy business mainly comprises solar power PV application, PV construction and LED industry.
1. Technical advantage
With more than tenyears’ 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 theCompany’s existing businesses. Most distributed solar power PV systems are closely related to construction. Moreover, the Company has more than 10 years' experience in electrical product integration. The Company also has more than 20years’ experience in construction management and has the level-1 construction curtain wall engineering qualification and electrical installation engineering qualification.
(4) Real Estate
China Fangda Group Co., Ltd. 2016 Annual Report The Fangda Town renovation project is well-positioned and enjoys express transport, unique landscape resoures, preferential policies and moderate competition in the district. The project will buoy theCompany’s net assets and total assets, bring strong cash flows for the Company, provide capital support for the development of businesses, and gain experience in the real-estate
development industry.
China Fangda Group Co., Ltd. 2016 Annual Report Chapter 4 Operation Discussion and Analysis
1. Summary
In 2016, the global economy and politics remained uncertain and the global economic recovery remained weak. The Chinese economy stayed at the bottom of the L-shape trend. The Company has reacted positively to the new economic condition and sought to overcome external adversities, fulfilling the yearly business operation target. During the report period, the Company recorded operating revenue of RMB4,203,866,200, up64.83% year on year. The net profit attributable to owners of the parent company is RMB697,956,400, up550.64% year on year. The net profit after deducting accidental gain/loss is RMB623,075,500, up2,043.34% year on year. The cash flow from main business reached RMB465,717,100. The profit from main businesses has continued increasing in the report period. The Company won bids and signed contracts worth RMB3,006,790,000 in 2016. By the end of the report period, the order reserve of the Company is worth RMB3,788,193,200 (excluding sales of real estate),90.11% of the operating revenue in 2016, paving the way for the operation in 2017.
1. High-end curtain wall systems and materials
The Company has continued pursuing for better quality and performance and has developed a series of world-class projects. The Company's curtain wall systems and materials have won wide recognition among customers, become one of the most popular energy-saving high-end curtain wall system and material brands in China. In 2016, the Company continued the strategy of promoting products and solutions and focused in the first-tier area and high-end and high-creditability customers. In the report period, the Company won bids in a series of high-end curtain wall projects such as the Shenzhen Evergrande Financial Center, Shenzhen OCT Building, Beijing Vanke Tongzhou Taihu, Shanghai Vanke Jade Binjiang, Wuxi Wandamao Phase II, Huawei WuhanR&D and Production Base, Chengdu Lingdi Center Phase II, Chongqing Raffles City, and Lanzhou International Trade Center Phase II. In the report period, the Company has finished and delivered a series of projects including the Beijing Lianmei Building, Beijing Vanke Tongzhou Taihu, Shanghai Qibao Vanke Plaza, Shanghai Zhongwaiyun Changhang Building, Chengdu Alibaba West Base, Chengdu Wanda Ruihua Hotel, Shenzhen Contemporary Art Gallery and City Planning Exhibition, Shenzhen Excellence Qianhai No.1, Xiamen Anmei Photoelectric Building, Nanchang Wandamao Trade Center, Wuhan Lianfa Jiudu International, Guiyang International Financial Center, Lanzhou International Trade Center and Xining Kangmei Chinese Medicine Trade Center. In the project of the Shenzhen Contemporary Art Gallery and City Planning Exhibition, the Company showed its outstanding designing capability of complicated curtain wall systems and engineering control and management. Nanchang Wandamao Trade Center is the first construction group with the blue and white porcelain theme. The project imposed high requirements in terms of types of curtain walls, amount of work, complexity and flatness control. These projects show the leading technology and rich experience in curtain wall engineering..
In 2016, the Company continued reforming the business strategy and further integrated and optimized resources and business procedures to simplify management structure, lower costs and elevate profitability. In 2016, the curtain wall system and material business realized a sales income of RMB2.042 billion with order reserve of RMB2.701 billion, which is132.27% of the sales income from the curtain wall system and material business in 2016.
As China continues urbanizing, the demand for construction curtain walls will grow rapidly, fueling the development of the curtain wall industry. Over recent years, a series of industry policies will be issued to push forward the industry, providing a gold opportunity for the development of energy-saving curtain wall and material business.
2. Subway screen door
As the Chinese government continues to implement the “One Road, One Belt” and “Chinese Manufacturing Plan 2025” strategies, the Chinese urban railway transportation has been developed rapidly, turning the subway screen door business onto a fast track. By the end of 2016, a total of 130 subway lines have been running in more than 29 cities with a total length of 3,849 km. More
China Fangda Group Co., Ltd. 2016 Annual Report than 100 lines in more than 40 cities are under construction with a total length of more than 3,000 km. The year 2016 is the first year of the 13th five-year plan period. The National Reform and Development Commission approved the applications of rail transport construction of about 8,600 km in 43 cities. The Company will enjoy from the fast development of the industry.
In 2016, the Company followed the tide of the “One Road, One Belt” and “Chinese Manufacturing Plan 2025” strategies to increase the market share in China and expand globally. With outstanding performance, quality and outer appearance, the Company has made headway in and outside China. In the report period, the Company won screen door orders in the Nanchang subway line No.2, Kunming subway line No.3, Wuhan subway line No.7, Hong Kong Shatin to Central Link line phase 2, India Noida subway screen door project, and Kuala Lumpur subway lien No.2 with a total order value of RMB820 million, ranking No.1 in the industry and consolidating theCompany’s technological, brand, service and market lead in the industry. The MTR subway screen door order is the global largest subway screen door order in terms of the order amount with an order value of RMB430 million. The Company grew explosively in the globe. The Company will speed up the global development to keep its global business momentum. In the report period, the screen door projects of Kunming subway line No.3, Nanning subway line No.2, Xiamen subway line No.1, Nanchang subway line No.2, Lanzhou subway line No.1, Wuhan subway line No.7, Tianjin subway line No.1 east extension and Hefei subway line No.2 have been proceeding as planned. Shenzhen subway line No.11 and No.9, Dongguan subway line No.2, Fuzhou subway line No.1, Wuhan subway line No.6, Wuhan-Xiaogan railway line andXi’an subway line No.3 were put into operation, making the Company as the No.1 supplier of screen doors to subway lines put into operation in 2016. In the report period, the sales income from the screen door business was RMB328 million, up26.90% year on year. The order reserve at the end of the period was RMB1.088 billion, paving the way for the business development in 2017.
As the first screen door supplier in China, the Company is one of the first providers of subway screen door services in China. The subway screen door service business has become a profit growth point of the Company. As more subway lines enter the maintenance period, the sector has a bright growth outlook. In addition, the Company has put great efforts to develop the railway transport advertising and intelligent systems to extend the railway transport equipment industry chain, explore more profit sources and share the benefit of the development of the sector.
Over recent years, the percentage of operation revenue of the railway transportation business has continued increasing in the Company. Withyears’ development, the Company has become an industry leader in terms of market share, brand influence, standard and expertise.
3. New energy industry
In the report period, Jiangxi Pingxiang Luxi Xuanfeng 20MWp distributed PV power plant, Nanchang Jiangxi Isuzu
Automobile parking lot roof 6.3MWp distributed PV power generation project with a total power capacity of 17.5MWp funded by the fund raised from the non-public A-share issuance were put into production. By the end of the 2016, the total capacity of PV power plants of the Company reached about 19.5MWp.The products have created stable income and profit for the Company. As the Company expected changes in thegovernment’s PV power generation policies, the Company proactively adjusted the strategy and slowed down the development of PV power plants. The Company plans to use the remaining fund that is originally planned to fund PV power plants to permanently replenish theCompany’s working capital. The Company will continue paying attentions to the latest national policies and determine the future development of the PV and new energy business according to theCompany’s conditions. 4. Construction and sales of Fangda Town
The Company holds two property projects: Shenzhen Fangda Town and Nanchang Phoenix Land Project. Fangda Town project is a renovation project, while Nanchang Phoenix prject is an office building and business apartment project. In the report period, the Fangda Town project has been implemented as progressed. Phase I has been finished and put into sales. In the report period, 52,800 m2 has been sold, of which the sales of 48,400 m2 has been recognized with the remainder to be recognized in 2017. The project will substantially increase theCompany’s assets, bring stable cash flow and lease income for the Company, supporting theCompany’s future demand for capital. The Nanchang Phoenix Land project was not started in the report period.
(1) Industry development and impacts on the Company's future business and profitability
China Fangda Group Co., Ltd. 2016 Annual Report The Provisional Measures on Strengthening and Improving Urban Renovation issued by the ShenzhenPeople’s Municipal Government has shown its standpoint to encourage renovation of old industrial zones and land. As a pioneering city of urban renovation, Shenzhen has turned the urban renovation plan onto the fast track. Currently, renovation of industrial land has become the source ofR&D buildings.
According to the forecast of Savills, Shenzhen will have nearly 23 million m2 of industrial land in the next five years, including 8 million m2 ofR&D buildings, mainly in Nanshan, Longgang and Bao'an District,50% of which will be supplied by urban renovation projects. About 3.5 million m2 and 1.9 million m2 of grade-A office buildings will be delivered in Shenzhen in 2017 and 2018 respectively. About 1.44 million m2 and 0.99 million m2 ofR&D buildings will be delivered in 2017 and 2018 respectively. The ShenzhenR&D building market will remain slightly undersupplied in the future.Therefore, the renovation of industrial land and de-stocking will have small impacts on theCompany’s future business performance and profitability.
(2) Main business model, landscape, market position and competitiveness of the Company
The main business model of the Company is establishing a property company to independently develop each real estate project. The 5A office building of the Fangda Town project mainly serves as the headquarters. In addition to the part reserved for self-use, the other part will be leased and sold. The commercial property is held by the Company. Nanchang Phoenix Land project comprises office building and business apartments and will be leased and sold.
Fangda Town is located in the Dashahe Innovation Corridor, near the Nanhan Hi-tech Park.
(3) Real estate reserve
The Company has no land reserve and is not engaged in primary land development. In addition to Fangda Town project and Nanchang Phoenix Land project, the Company has no other project and land to be developed.
(4) Real estate development
||||||||
|-|-|-|-|-|-|-|
|Project underconstruction|Interestspercentage|Floor area (m2)|Building are(m2)|Finished buildingare (m2)|Estimated totalinvestment (inRMB100million)|Invested amount(in RMB100million)|
|Fangda Town|100%|35,397.6|212,400|140,218.74|25|17.01|

(5) Project sales in the report period
||||||
|-|-|-|-|-|
|Project underconstruction|Interests percentage|Sellable area (m2)|Sold area (m2)|Sold areawith incomerecognized(m2)|
|Fangda Town|100%|93.086.25|52,863.60|48,441.5|

(6) Real estate lease
||||||
|-|-|-|-|-|
|Form|City|Interestspercentage|Floor area (m2)|Lease ratio|
|Office building|Shenzhen|100%|26,040.55|69.91%|
|Plant|Jiangxi|100%|45,586.14|75.22%|
|Commercialresidence|Ningbo|100%|96.75|100%|

(7) Operating income, cost and gross margin
In the report period, Fangda Town project realized an operating income of RMB1,784,378,200 with an operating cost of
China Fangda Group Co., Ltd. 2016 Annual Report RMB633,826,300 and gross margin rate of64.48%. The Nanchang Phoenix Land project was not started in the report period. (8) Financing in the report period
|||||||
|-|-|-|-|-|-|
|Financingsource|Currency|Balance (in RMB)|Financing cost (interest rate)|Due date|Pledge/guarantor|
|Bank loan|RMB|922,169,568.24|In terval rate, between 10%below the benchmarkinterest rate and 60% abovethe benchmark interest rateon the withdrawal date|2023-2-11|Pledge of shares ofFangda Property andguarantee made by theCompany|

(9) Development strategy and operation plan in the next year
Based on the renovation policy of three types of land and renovation plan of Shenzhen, the Company will continue seeking opportunities of industrial land renovation. Such projects will comprise 5A office buildings for self-use and lease. Fangda Property has emerged as a professional property company and one of the Top 10 Potential Enterprise elected by the Shenzhen Real Estate Industry Association.
In 2017, the Company plans to finish the development, sales and lease of Fangda Town and start the development of Nanchang Phoenix Land project.
In 2017, the planned sales area of Fangda Town is about 40,000 m2. In 2017, the Company will not apply for more loans for Fangda Town project and will apply for loans for the development of the Nanchang Phoenix Land project.
5. Awards
In the report period, the Company received a series of quality, employment and creditability prizes and honors, such as the Top 500 Enterprises in Guangdong, Top 100 Manufacturers in Guangdong, Top 100 Private Enterprises in Guangdong, Top 100 Enterprises in Shenzhen.
Fangda Jianke is awarded as one of the Top 100 in Construction Curtain Wall industry. Several projects won the Luban Prize, National High-Quality Project Prize, China Construction Project Decoration Prize, Guangdong Outstanding Construction Decoration Prize and Shenzhen Decoration Jingpeng Prize.
The railway station screen door system developed by Fangda Automatic is awarded as the National Torch Project by the National Scientific and Technology Department. The Company won the prize of Outstanding Prize to Shenzhen Subway Line No.9 and 11, Shenzhen Scientific and Technological Progress Prize II and 2016 Shenzhen Fucai Cup QCC Achievement Prize.
Fangda Jiangxi New Material is awarded as an outstanding hi-tech company in Nanchang, AAA Creditability Company in Jiangxi in 2015, outstanding enterprise in the Hi-tech zone in Nanchang, Outstanding Brand in the Compound Metal Industry in 2016.
Fangda Property is awarded as one of the Top 10 Potential Enterprises in Shenzhen.
6. Technological progress and innovation
The Company adheres to the development strategy of focusing on technological innovation. In 2016, the Company completed 13 technological projects, including 11 new product development projects, 2 improvement projects and obtained 17 parents, including 10 invention patents. Currently, the Company has 762 parents (including 4 international PCT patents) and 8 software copyrights. In the report period, Dongguan Fangda New Material passed the certification as a national hi-tech company. So far, the Company has four subsidiaries that have passed the certification.
China Fangda Group Co., Ltd. 2016 Annual Report 2. Main business analysis
1. Summary
For details see Management Discussion and Analysis– 1. Profile
2. Income and costs
(1) Turnover composition
In RMB
|||||||
|-|-|-|-|-|-|
||2016||2015|||
|||Proportion in||Proportion in|YOY change (% )|
||Amount||Amount|||
|||operating costs (%)||operating costs (%)||
|Total turnover|4,203,866,173.72|100%|2,550,467,494.78|100%|64.83%|
|Industry||||||
|Metal production|2,042,947,811.82|48.60%|2,125,881,648.28|83.35%|-3.90%|
|Railroad industry|327,766,817.78|7.80%|258,278,535.47|10.13%|26.90%|
|New energy industry|29,742,249.70|0.71%|149,151,356.13|5.85%|-80.06%|
|Real estate|1,784,378,167.91|42.45%||||
|Others|19,031,126.51|0.45%|17,155,954.90|0.67%|10.93%|
|Product||||||
|Curtain wall system||||||
||2,042,947,811.82|48.60%|2,125,881,648.28|83.35%|-3.90%|
|and materials||||||
|Subway screen door||||||
||327,766,817.78|7.80%|258,278,535.47|10.13%|26.90%|
|and service||||||
|PV power generation||||||
||29,742,249.70|0.71%|149,151,356.13|5.85%|-80.06%|
|and LED products||||||
|Real estate sales|1,784,378,167.91|42.45%||||
|Others|19,031,126.51|0.45%|17,155,954.90|0.67%|10.93%|
|District||||||
|In China|4,177,161,780.92|99.00%|2,480,678,272.83|97.26%|68.39%|
|Out of China|26,704,392.80|1.00%|69,789,221.95|2.70%|-61.74%|

 (2) Industries, products or districts that take more than10% of theCompany‟s business turnover or profit
√ Applicable□ Inapplicable
Whether the Company needs to comply with disclosure requirements of special industries
Yes
China Fangda Group Co., Ltd. 2016 Annual Report Property development and decoration industries
The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure Guideline No.6– Listed Companies Engaged in Decoration Business.
In RMB
||||||||
|-|-|-|-|-|-|-|
|||||Year-on-year|Year-on-year|Year-on-year|
||Turnover|Operation cost|Gross margin|change in|change in|change in gross|
|||||operating revenue|operating costs|margin|
|Industry|||||||
|Metal production|2,042,947,811.82|1,731,942,410.97|15.22%|-3.90%|-3.21%|-0.61%|
|Real estate|1,784,378,167.91|633,826,318.49|64.48%||||
|Railroad industry|327,766,817.78|251,310,978.28|23.33%|26.90%|24.01%|1.79%|
|Product|||||||
|Curtain wall|||||||
|system and|2,042,947,811.82|1,731,942,410.97|15.22%|-3.90%|-3.21%|-0.61%|
|materials|||||||
|Real estate sales|1,784,378,167.91|633,826,318.49|64.48%||||
|Metro screen|||||||
||327,766,817.78|251,310,978.28|23.33%|26.90%|24.01%|1.79%|
|door|||||||
|District|||||||
|In China|4,177,161,780.92|2,570,078,006.89|38.47%|68.39%|20.81%|24.23%|

 Main business statistics adjusted in the recent one year with the statistics criteria adjusted in the report period
□ Applicable√ Inapplicable
Different business types of the Company
|||||
|-|-|-|-|
|Business type|Turnover|Operation cost|Gross margin|
|Curtain wall system and||||
||2,042,947,811.82|1,731,942,410.97|15.22%|
|materials||||

Whether the Company runs business through the Internet
□ Yes√ No
Whether the Company runs overseas projects
□ Yes√ No
Main business statistics adjusted in the recent one year with the statistics criteria adjusted in the report period
□ Applicable√ Inapplicable
(3) The physical sales revenue is high the labor service revenue
□ Yes√ No
China Fangda Group Co., Ltd. 2016 Annual Report (4) Performance of signed major sales contracts in the report period
√ Applicable□ Inapplicable
Yes
Property development and decoration industries
The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure Guideline No.6– Listed Companies Engaged in Decoration Business.
|||||
|-|-|-|-|
||Project amount|Cumulative recognized income|Amount of unfinished part|
|Unfinished project|7,927,986,157.57|5,227,414,687.82|2,700,571,469.74|

 Other note
√ Applicable□ Inapplicable
|||||||
|-|-|-|-|-|-|
|||Accumulative|||Balance of unpaid|
||Accumulative|||||
|||recognized gross|Estimated loss|Settled amount|amount of finished|
||occurred costs|||||
|||margin|||project|
|Finished but not||||||
||7,097,768,053.00|1,239,280,706.00||8,150,760,542.00|186,288,217.00|
|settled project||||||

Other note
√ Applicable□ Inapplicable
(5) Operation cost composition
The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure Guideline No.6– Listed Companies Engaged in Decoration Business.
Main business cost composition
In RMB
||||||||
|-|-|-|-|-|-|-|
|||2016||2015|||
||||Proportion in||Proportion in||
|Cost composition|Business type|||||YOY change (% )|
|||Amount|operating costs|Amount|operating costs||
||||(%)||(%)||
||Curtain wall||||||
|Raw materials|system and|1,124,832,846.21|64.95%|1,181,842,856.96|66.80%|-1.85%|
||materials||||||

Industry
In RMB
||||||||
|-|-|-|-|-|-|-|
|||2016||2015|||
||||Proportion in||Proportion in||
|Industry|Items|||||YOY change (% )|
|||Amount|operating costs|Amount|operating costs||
||||(%)||(%)||
|Metal production|Raw materials|1,124,832,846.21|64.95%|1,181,842,856.96|66.80%|-1.85%|

China Fangda Group Co., Ltd. 2016 Annual Report
|||||
|-|-|-|-|
||Construction and|||
|Real estate||342,870,138.09|54.13%|
||installation cost|||

Notes
(6) Change to the consolidation scope in the report period
√ Yes□ No
1. Fangda Automation (Hong Kong) Co., Ltd. indirectly controlled by the Company was set up in the report period.
The subsidiary of the Company Ganzhou Longneng New Energy Co., Ltd. controlled indirectly by the Company was liquidized in this period. In July 2016, the Company transfers Shengyang Fangda and Shenzhen Woke that it controlled directly or indirectly to the liquidation team specified by thePeople’s Court of Hunnan District of Shengyang Liaoning Tongwen Law Firm and no longer controls the two companies. Therefore, three subsidiaries are moved out of the consolidation scope in this period.
(7) Major changes or adjustment of business, products or services in the report period
√ Applicable□ Inapplicable
In the report period, the sales of the Shenzhen Fangda Town renovation project developed by the Company reached RMB1.784 billion.
(8) Major sales customers and suppliers
Main customers
|||
|-|-|
|Total sales amount to top 5 customers (RMB)|1,454,218,692.42|
|Proportion of sales to top 5 customers in the annual sales|34.59%|
|Percentage of sales of related parties in top 5 customers in||
||0.00%|
|the annual sales||

Information of the Company's top 5 customers
|||||
|-|-|-|-|
|No.|Customer|Sales (RMB)|Percentage in the annual sales|
|1|No.1|739,692,641.90|17.60%|
|2|No.2|262,182,191.44|6.24%|
|3|No.3|206,285,078.69|4.91%|
|4|No.4|132,766,624.20|3.16%|
|5|No.5|113,292,156.19|2.69%|
|Total|--|1,454,218,692.42|34.59%|

 Other information about major customers
□ Applicable√ Inapplicable
Main suppliers
|||
|-|-|
|Purchase amount of top 5 suppliers (RMB)|1,137,598,642.25|
|Proportion of purchase amount of top 5 suppliers in the|40.34%|

China Fangda Group Co., Ltd. 2016 Annual Report
|||
|-|-|
|total annual purchase amount||
|Percentage of purchasing amount of related parties in top||
||0.00%|
|5 customers in the annual purchasing amount||

Information of theCompany’s top 5 suppliers
|||||
|-|-|-|-|
|No.|Supplier|Purchase amount (RMB)|Percentage in the annual purchase amount|
|1|No.1|741,033,862.27|26.28%|
|2|No.2|134,490,362.32|4.77%|
|3|No.3|99,099,000.00|3.51%|
|4|No.4|93,275,792.52|3.31%|
|5|No.5|69,699,625.14|2.47%|
|Total|--|1,137,598,642.25|40.34%|

 Other information about major suppliers
□ Applicable√ Inapplicable
3. Expenses
In RMB
||||||
|-|-|-|-|-|
||2016|2015|YOY change (% )|Notes|
||59,273,046.14|75,264,951.18||Mainly due to the decrease in the|
|Sales expense|||-21.25%|advertisement and business promotion|
|||||expense|
|Administrative expense|171,922,091.39|167,405,776.25|2.70%||
||28,255,397.43|50,672,490.05||Mainly due to the decrease in the|
|Financial expenses|||-44.24%||
|||||current capital loan|

4.R&D investment
√ Applicable□ Inapplicable
None
R&D investment
|||||
|-|-|-|-|
||2016|2015|Change|
|R&D staff number|459|351|30.77%|
|R&D staff percentage|19.54%|15.08%|4.46%|
|R&D investment amount||||
||113,321,489.31|105,200,255.72|7.72%|
|(RMB)||||
|Investment percentage in||||
||2.70%|4.12%|-1.42%|
|operation turnover||||
|Capitalization of R&D|0.00|0.00||

China Fangda Group Co., Ltd. 2016 Annual Report
|||||
|-|-|-|-|
|investment amount (RMB)||||
|Percentage of capitalization of||||
|R&D investment in the R&D|0.00%|0.00%|0.00%|
|investment||||

Reason for the increase in the percentage ofR&D investment in the business turnover
√ Applicable□ Inapplicable
The sales amount of the Fangda Town project is large. Therefore, the percentage ofR&D investment in operating revenue has been decreased.
Explanation of the increase in the capitalization ofR&D investment
□ Applicable√ Inapplicable
5. Cash flow
In RMB
|||||
|-|-|-|-|
|Items|2016|2015|YOY change (% )|
|Sub-total of cash inflow from|3,711,200,293.75|2,219,602,450.52||
||||67.20%|
|business operations||||
|Sub-total of cash outflow from|3,245,483,218.83|2,579,717,564.56||
||||25.81%|
|business operations||||
|Cash flow generated by|465,717,074.92|-360,115,114.04||
|business operations, net||||
|Sub-total of cash inflow|575,207,720.42|397,636,935.30||
||||44.66%|
|generated from investment||||
|Subtotal of cash outflows|686,658,608.57|213,169,919.71|222.12%|
|Cash flow generated by|-111,450,888.15|184,467,015.59||
||||-160.42%|
|investment activities, net||||
|Subtotal of cash inflow from|2,112,173,978.78|1,764,927,828.86||
||||19.67%|
|financing activities||||
|Subtotal of cash outflow from|1,780,430,903.66|1,444,458,573.58||
||||23.26%|
|financing activities||||
|Net cash flow generated by|331,743,075.12|320,469,255.28||
||||3.52%|
|financing activities||||
|Net increase in cash and cash|688,085,331.62|145,101,011.59||
||||374.21%|
|equivalents||||

Explanation of major changes in related data from the same period last year
√ Applicable□ Inapplicable
The net cash flow generated by operating activities increases by RMB825,832,200 from the same period last year. It is mainly
attributable to the collection of sales amounts in the report period.
Explanation of major difference between the cash flow generated by operating activities and the net profit in the year
China Fangda Group Co., Ltd. 2016 Annual Report□ Applicable√ Inapplicable
3. Non-core business analysis
√ Applicable□ Inapplicable
In RMB
||||||
|-|-|-|-|-|
||Amount|Profit percentage|Reason|Whether continuous|
||||Mainly gain from disposal of||
||||financial assets held for sales||
||||and gain from||
|Investment income|61,228,848.36|7.12%|re-measurement of|否|
||||remaining interests at fair||
||||value after losing the control||
||||power on Shenyang Fangda||
|Gain/loss caused by|||||
||||Adjustment of fair value of||
|changes in fair|16,862,823.13|1.96%||No|
||||investment real estate||
|value|||||
||||Mainly receivable bad debt||
||||impairment provision,||
||||inventory depreciation||
||||provision made for SOZN||
|Assets impairment|197,907,957.26|23.01%||No|
||||and assets impairment||
||||provision made for enforced||
||||liquidation of Shenyang||
||||Fangda||
||||Governmental subsidy,||
|Non-operating|||||
||18,327,500.52|2.13%|income from VAT rebate and|No|
|revenue|||||
||||income from sales of waste||
||||Mainly loss from disposal of||
|Non-business|||||
||6,945,905.31|0.81%|fixed assets and debt|No|
|expenses|||||
||||reorganization||

4. Assets and liabilities
1. Major changes in assets composition
In RMB
||||||||
|-|-|-|-|-|-|-|
||End of 2016||End of 2015||||
||||||Change||
|||Proportion in||Proportion in||Notes|
||Amount||Amount||(% )||
|||total assets||total assets|||
|Monetary capital|1,095,229,837.|16.14%|400,953,337.32|8.98%|7.16%|Mainly due to cash obtained from sales|

China Fangda Group Co., Ltd. 2016 Annual Report
||||||||
|-|-|-|-|-|-|-|
||90|||||of Fangda Town property|
||2,342,929,628.14||1,405,718,134.89|||Mainly due to mortgage payment|
|Account|||||||
|||34.52%||31.49%|3.03%|increase from sales of Fangda Town|
|receivable|||||||
|||||||property|
||1,990,621,059.27||1,346,591,303.53|||Mainly due to increase in Fangda Town|
|Inventory||29.33%||30.16%|-0.83%|and Phoenix project development costs|
|||||||and product development costs|
|Investment real|333,795,631.30||335,328,805.74||||
|||4.92%||7.51%|-2.59%||
|estate|||||||
|Long-term share|12,105,030.68||10,489,680.93||||
|||0.18%||0.23%|-0.05%||
|equity investment|||||||
||506,819,266.38||462,648,998.51||||
|Fixed assets||7.47%||10.36%|-2.89%||
|Construction in|2,537,725.36||15,134,390.90||||
|||0.04%||0.34%|-0.30%||
|process|||||||
||591,000,000.00||1,147,957,775.82||||
|Short-term loans||8.71%||25.72%|-17.01%|Repayment of mature borrowing|
||922,169,568.24||300,395,582.06|||Mainly due to increase in loans for the|
|Long-term loans||13.59%||6.73%|6.86%||
|||||||Fangda Town project|

2. Assets and liabilities measured at fair value
√ Applicable□ Inapplicable
In RMB
|||||||||
|-|-|-|-|-|-|-|-|
||||Accumulative|||||
|||Gain/loss|changes in fair|||||
|||||Impairmentprovided in theperiod|Amount|||
||Opening|caused by|value|||Amount sold in|Closing|
|Items|||||purchased in|||
||amount|changes in fair|accounting into|||the period|amount|
||||||the period|||
|||value|the income|||||
||||account|||||
|Financial assets||||||||
|1. Financial||||||||
|assets measured||||||||
|at fair value||||||||
|with variations||||||||
|accounted into||||||||
||14,546,206.58|-1,099,400.09||||16,503,917.42|0.00|
|current income||||||||
|account||||||||
|(excluding||||||||
|derivative||||||||
|financial assets)||||||||

China Fangda Group Co., Ltd. 2016 Annual Report
|||||||||
|-|-|-|-|-|-|-|-|
|2. Derivative||||||||
|||412,128.63|||2,232,200.00||2,232,200.00|
|financial assets||||||||
|Subtotal|14,546,206.58|-687,271.46|||2,232,200.00|16,503,917.42|2,232,200.00|
|Investment real|||||||303,090,562.|
||304,615,212.53|17,550,094.59|91,831.63|||13,082,954.01||
|estate|||||||62|
||||||||305,322,762.|
|Total|319,161,419.11|16,862,823.13|91,831.63||2,232,200.00|29,586,871.43||
||||||||62|
|Financial||||||||
||0.00|0.00|0.00|0.00|0.00||0.00|
|liabilities||||||||

Major changes in the assets measurement property of the Company in the report period
□ Yes√ No
3. Right restriction of assets at the end of the period
||||
|-|-|-|
|Items|Closing book valu|e Reason|
|Bank deposits|728,405.9|1 Frozen deposit|
|Other monetary capital|158,676,856.5|9 Deposit|
|Fixed assets|74,379,007.7|9 Borrowing pledge or frozen by a court|
|Investment real estate|296,740,660.6|3 Loan by pledge|
|100% stake in Fangda PropertyDevelopment held by theCompany|200,000,000.0|0 Loan by pledge|
|Total|730,524,930.9|2|

5. Investment
1. General situation
□ Applicable√ Inapplicable
2. Major equity investment in the report period
□ Applicable√ Inapplicable
3. Major non-equity investment in the report period
□ Applicable√ Inapplicable
China Fangda Group Co., Ltd. 2016 Annual Report 4. Financial assets investment
(1) Securities investment
√ Applicable□ Inapplicable
In RMB
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||||||||Accumu|||||||
||||||||lative|||||||
|||||||Gain/los|changes|||||||
|||||||s caused|in fair|Amount|Amount|||||
||||Initial|Account|Opening||||||Closing|||
|Securiti||Abbrevi||||by|value|purchas|sold in|Gain/los||Account|Capital|
||Code||investm|ing|book||||||book|||
|es||ation||||changes|accounti|ed in the|the|s||ing item|source|
||||ent cost|method|value||||||value|||
|||||||in fair|ng into|period|period|||||
|||||||value|the|||||||
||||||||income|||||||
||||||||account|||||||
|Domesti||Sino Oil||Measure||||||||Transact||
|c||and Gas|16,263,|ment at|14,546,|-1,099,4|||16,503,|1,957,7||ional|Self-ow|
||00702||||||||||0.00|||
|overseas||Holding|675.00|fair|206.58|00.09|||917.42|10.84||financia|ned fund|
|shares||s Ltd||value||||||||l assets||
||||16,263,||14,546,|-1,099,4|||16,503,|1,957,7||||
|Total||||--|||0.00|0.00|||0.00|--|--|
||||675.00||206.58|00.09|||917.42|10.84||||
|Disclosure date of approval||||||||||||||
|by the Board of Directors|||11.03.14|||||||||||
|of securities investment||||||||||||||
|Disclosure date of||||||||||||||
|securities investment||||||||||||||
|approval by the||||||||||||||
|Shareholders’ Meeting (if||||||||||||||
|any)||||||||||||||

(2) Derivative investment
√ Applicable□ Inapplicable
In RMB10,000
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||End dat|Initialinvestmeentamount|Amountin thisperiod||||Proporti|Actua|
|Derivati||||||||||Impairm||on of|l|
||||||||||Amount||Closing|||
|ve||Related||||||||ent||closing|gain/l|
||Relation|||Initialamount|Start||||sold in||investm|||
|investm||transacti|Type|||||||provisio||investm|oss in|
||ship||||date||||this||ent|||
|ent||on||||||||n (if||ent|the|
||||||||||period||amount|||
|operator||||||||||any)||amount|report|
|||||||||||||in the|period|

China Fangda Group Co., Ltd. 2016 Annual Report
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
||||||||||||closing||
||||||||||||net||
||||||||||||assets in||
||||||||||||the||
||||||||||||report||
||||||||||||period||
|Shangha|||||||||||||
||||Shanghai||||||||||
|i Futures||||14,133.6||||14,133.6||||845.0|
||None|No|aluminu||02.03.16|15.08.17|||7,912.87|6,220.78|2.63%||
|Exchang||||5||||5||||9|
||||m||||||||||
|e|||||||||||||
|||||14,133.6||||14,133.6||||845.0|
|Total|||||--|--|0||7,912.87|6,220.78|2.63%||
|||||5||||5||||9|
|Capital source||||Self-owned fund|||||||||
|Lawsuit (if any)||||None|||||||||
|Disclosure date of derivative|||||||||||||
|investment approval by the Board of|||||||||||||
|Directors (if any)|||||||||||||
|Disclosure date of derivative|||||||||||||
|investment approval by the|||||||||||||
|Shareholders’ Meeting (if any)|||||||||||||
|Risk analysis and control measures|||||||||||||
|||||To prevent the risk of fluctuation of raw material prices, the Company adopted the|||||||||
|for the derivative holding in the report|||||||||||||
|||||aluminum futures exchanged at the domestic futures exchange to provide hedging for|||||||||
|period (including without limitation|||||||||||||
|||||aluminum as a raw material for the Company. The Company has set up and implemented the|||||||||
|market, liquidity, credit, operation and|||||||||||||
|||||Provincial Regulations on China Fangda Group Domestic Futures Hedging to prevent risks.|||||||||
|legal risks)|||||||||||||
|Changes in the market price or fair|||||||||||||
|value of the derivative in the report|||||||||||||
|period, the analysis of the derivative’s|||||||||||||
|||||Fair value of derivatives are measured at open prices in the futures market|||||||||
|fair value should disclose the method|||||||||||||
|used and related assumptions and|||||||||||||
|parameters.|||||||||||||
|Material changes in the accounting|||||||||||||
|||||The Company decides to implement the Temporary Provisions on the Accounting of|||||||||
|policies and rules related to the|||||||||||||
|||||Commodity Futures Hedging for its aluminum ingot futures contracts in the report period|||||||||
|derivative in the report period|||||||||||||
|||||and no longer implement the Enterprise Accounting Standard No.24 – Hedging|||||||||
|compared to last period|||||||||||||
|Opinions of independent directors on|||||||||||||
|the Company’s derivative investment||||None|||||||||
|and risk controlling|||||||||||||

China Fangda Group Co., Ltd. 2016 Annual Report 5. Use of raised capital
√ Applicable□ Inapplicable
(1) Overview
√ Applicable□ Inapplicable
In RMB10,000
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
||||||Amount of||||||||
||||||||Accumulat||||||
||||||raised||||Proportion||||
||||||||ive amount|||||Amount of|
|||||Total|capital of||||of raised|Total|||
|||Total|Total||||of raised||||Use plan|raised|
|Year of|Method of|||accumulati|which the||||capital of|accumulati|||
|||amount of|amount||||capital of||||of retained|capital not|
|fund|fund|||ve raised|purpose||||which the|ve raised|||
|||the raised|used in||||which the||||fund from|used in|
|raising|raising|||capital|was||||purpose|capital|||
|||capital|this period||||purpose||||financing|more than|
|||||used|changed in||||has been|used|||
||||||||has been|||||two years|
||||||the report||||changed||||
||||||||changed||||||
||||||period||||||||
||||||||||||Fund||
||Private||||||||||||
|2016||45,986.92|20,204.16|20,204.16|0||0||0.00%|25,782.76|raising|0|
||issuing||||||||||||
||||||||||||project||
|Total|--|45,986.92|20,204.16|20,204.16|0||0||0.00%|25,782.76|--|0|
|Notes to use of raised capital|||||||||||||
||The Company||||||||||||
||received the Reply||||||||||||
||to the Non-public||||||||||||
||Share Issuance of||||||||||||
||Fangda China||||||||||||
||Group Co., Ltd.||||||||||||
||(CSRC License||||||||||||
||[2016] No.825) to||||||||||||
||allow the Company||||||||||||
||to issue 32,184,931||||||||||||
|||||||Account|||||||
||shares at the price of||Bank account|||||Balance|||||
|||||||type|||||||
||RMB14.60/share. A||||||||||||
||total of||||||||||||
||RMB469,899,992.6||||||||||||
||0 will be raised. The||||||||||||
||net amount will be||||||||||||
||RMB459,869,219.8||||||||||||
||8 after the issuance||||||||||||
||expense of||||||||||||
||RMB10,030,772.72||||||||||||
||is deducted. The||||||||||||

China Fangda Group Co., Ltd. 2016 Annual Report
||
|-|
|fund will be|
|received on July 15,|
|2016. Grant|
|Thornton (limited|
|liability partnership)|
|will verify the fund|
|and issue the Capital|
|Verification Report|
|[Grant Thornton|
|Verification (2016)|
|350ZA0055]. The|
|Company will open|
|a special account to|
|save the fund. (2)|
|Amount used in this|
|year In 2016,|
|RMB72,072,475.39|
|was directly|
|invested,|
|RMB129,969,219.8|
|8 was used to|
|permanently|
|replenish the|
|working capital,|
|RMB200,000,000.0|
|0 was used to|
|temporarily|
|replenish the|
|working capital.|
|RMB41,000,000.00|
|was used to|
|purchase financial|
|products. By|
|December 31, 2016,|
|totally RMB|
|72,072,475.39 has|
|been directly|
|invested,|
|RMB129,969,219.8|
|8 used to|
|permanently|
|replenish working|
|capital,|
|RMB200,000,000.0|

China Fangda Group Co., Ltd. 2016 Annual Report
||
|-|
|0 used to|
|temporarily|
|replenish working|
|capital,|
|RMB41,000,000.00|
|used to purchase|
|financial products,|
|and|
|RMB16,827,524.61|
|is not used. 2.|
|Management of|
|raised fund (1) the|
|Company has|
|formulated the|
|Regulations for|
|Management Raised|
|Fund to comply|
|with related|
|regulations and|
|protect investors’|
|interests. The|
|Regulations has|
|been reviewed and|
|passed at the 22nd|
|meeting of the 7th|
|Board of Directors|
|held on July 29,|
|2016. The|
|Company started to|
|manage the raised|
|fund in the special|
|account from July|
|2016 and signed the|
|Raised Fund|
|Account|
|Management|
|Agreement with the|
|deposit bank to|
|regulate the use and|
|management of the|
|raised fund. By|
|December 31, 2016,|
|the Company has|
|strictly complied|

China Fangda Group Co., Ltd. 2016 Annual Report
|||||
|-|-|-|-|
|with the agreement||||
|in using and||||
|depositing the raised||||
|fund. (2) The||||
|deposit of the raised||||
|fund by December||||
|31, 2016 is as||||
|follows:||||
|Deposit bank:||||
|CITIC Bank,||||
|||Special||
|Shenzhen OCT|8110 3010 1520 0104 050||1,693,291.37|
|||account||
|Sub-branch||||
|CCB, Shenzhen||Special||
||4425 0100 0007 0000 0304||1,184,933.49|
|OCT Sub-branch||account||
|China Merchants||||
|Bank, Shenzhen||Special||
||7559 3103 9910 803||14,542,541.00|
|Nanshan||account||
|Sub-branch||||
|Total|||17,420,765.86|

(2) Promised raised-capital-based projects
√ Applicable□ Inapplicable
In RMB10,000
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||If||||||||||
|||||||Investme|Date||||
||investme|Promised|||Accumul||||||
|Project promised to be||||||nt|when the||Whether|Any|
||nt project|total|Adjusted|Investme|ative|||Profit|||
|invested with the raised||||||progress|project||the|major|
||is|investme|total|nt in the|investme|||realized|||
|capital and investment||||||by the|become||estimate|change in|
||changed|nt of the|investme|report|nt by the|||in the|||
|of the excessive raised||||||end of the|useable||profit is|the|
||(includin|raised|nt (1)|period|end of the|||period|||
|capital||||||period (3)|as||realized|feasibility|
||g partial|capital|||period (2)||||||
|||||||＝(2)/(1)|proposed||||
||change)||||||||||
|Promised investment projects|||||||||||
|1. Jiangxi Pingxiang|||||||||||
|Luxi 13MWp|||||||||||
||No|10,898|10,898|5,050.35|5,050.35|46.34%|28.06.16|567.44|Yes|No|
|distributed PV power|||||||||||
|plant project|||||||||||
|2. Jiangxi Pingxiang|||||||||||
|Xiangdong 20MWp|||||||||||
||No|16,800|16,800|201.23|201.23|1.20%|30.06.18||No|Yes|
|distributed PV power|||||||||||
|plant project|||||||||||
|Phase I of the Jiangxi|No|3,612|3,612|1,955.66|1,955.66|54.14%|08.05.16|281.77|Yes|No|

China Fangda Group Co., Ltd. 2016 Annual Report
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|Nanchang Isuzu|||||||||||
|Automobile parking lot|||||||||||
|roof 6.3MWp|||||||||||
|distributed PV power|||||||||||
|generation project|||||||||||
|4. Phase II of the|||||||||||
|Jiangxi Nanchang|||||||||||
|Isuzu Automobile|||||||||||
|parking lot roof|No|1,680|1,680|||0.00%|30.06.18||No|Yes|
|6.3MWp distributed|||||||||||
|PV power generation|||||||||||
|project|||||||||||
|5. Replenishing|||||||||||
||No|12,996.92|12,996.92|12,996.92|12,996.92|100.00%|||Yes|No|
|working capital|||||||||||
|Subtotal of promised|||||||||||
||--|45,986.92|45,986.92|20,204.16|20,204.16|--|--|849.21|--|--|
|investment projects|||||||||||
|Investment of excessive raised capital|||||||||||
|None|||||||||||
|Total|--|45,986.92|45,986.92|20,204.16|20,204.16|--|--|849.21|--|--|
||Since national policies on PV power generation have changed significantly and the predicted benefits||||||||||
||decrease, the Company determines to terminate the development of the Jiangxi Pingxiang Xiangdong||||||||||
||20MWp distributed PV power plant project and Phase II of the Jiangxi Nanchang Isuzu Automobile||||||||||
|Reason or situation that|parking lot roof 6.3MWp distributed PV power generation project. The unused fund of the two projects||||||||||
|not on schedule (on|will be used to permanently replenish the working capital. The Company will restart the investment with||||||||||
|specific project)|its self-owned capital when the Company sees fit. The Company will continue paying attentions to the||||||||||
||latest national policies and determine the future development of the PV and new energy business according||||||||||
||to the Company’s conditions. The proposal needs to be reviewed and passed at the general shareholders’||||||||||
||meeting.||||||||||
|Notes to major changes|||||||||||
||National PV power generation policies have changed substantially, loweing the estimated profits.||||||||||
|in project feasibility|||||||||||
|Amount, purpose and|Inapplicable||||||||||
|use of excessive raised|||||||||||
|capital|||||||||||
|Changes in|Inapplicable||||||||||
|implementation place|||||||||||
|of investment funded|||||||||||
|by raised capital|||||||||||
|Adjustment of the|Inapplicable||||||||||
|implementation way of|||||||||||
|investment funded by|||||||||||
|raised capital|||||||||||

China Fangda Group Co., Ltd. 2016 Annual Report
|||
|-|-|
|Initial use of raised|Applicable|
|fund in projects and||
|replacement||
||Applicable|
||On December 16, 2016, the Company held the 25th Meeting of the 7th Board of Directors to review andapprove the Proposal on Using Part of the Idle Raised Fund to Temporarily Replenish the Working Capital.According to the proposal, the Company will use RMB200 million of the idle raised fund to replenish theworking 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 usedRMB200 million to temporarily replenish the working capital on December 19.|
|Idle raised capital used||
|as working capital||
|Surplus of investment|Applicable|
|and cause||
|Use plan of retained||
|fund from financing||
|Problem or situation in||
|using of raised capital|None|
|and disclosing||

(3) Altering of projects financed by raised capital
□ Applicable√ Inapplicable
None
6. Major assets and equity sales
1. Major assets sales
□ Applicable√ Inapplicable
The Company sold no assets in the report period.
2. Major equity sales
□ Applicable√ Inapplicable
7. Analysis of major joint stock companies
√ Applicable□ Inapplicable
Major subsidiaries and joint stock companies affecting more than10% of theCompany’s net profit
In RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
|||Main|Registered||||Operation||
|Company|Type|||Total assets|Net assets|Turnover||Net profit|
|||business|capital||||profit||

China Fangda Group Co., Ltd. 2016 Annual Report
||||||||||
|-|-|-|-|-|-|-|-|-|
|Fangda||Curtain wall|500,000,000.|2,728,743,94|823,023,329.|1,849,540,61|70,792,157.0|48,231,107.7|
||Subsidiary||||||||
|Jianke||system|00|0.95|64|6.97|9|0|
|Fangda|||200,000,000.|3,142,751,26|314,526,312.|1,784,378,16|740,855,893.|554,923,445.|
||Subsidiary|Real estate|||||||
|Property|||00|9.54|48|7.91|46|15|

 Acquisition and disposal of subsidiaries in the report period
□ Applicable√ Inapplicable
Major joint-stock companies
8. Structural entities controlled by the Company
□ Applicable√ Inapplicable
9. Future Prospect
(1) Competition map and development trned
1. Curtain wall and material system industry
As China continues urbanizing, the demand for construction curtain walls will grow rapidly, fueling the development of the curtain wall industry. Over recent years, a series of industry policies will be issued to push forward the industry, providing a gold opportunity for the development of energy-saving curtain wall and material business.
2. Rail transport equipment business
As the Chinese government continues to implement the “One Road, One Belt” and “Chinese Manufacturing Plan 2025” strategies, the Chinese urban railway transportation has been developed rapidly, turning the subway screen door business onto a fast track. By the end of 2016, a total of 130 subway lines have been running in more than 29 cities with a total length of 3,849 km. More than 100 lines in more than 40 cities are under construction with a total length of more than 3,000 km. The year 2016 is the first year of the 13th five-year plan period. The National Reform and Development Commission approved the applications of rail transport construction of about 8,600 km in 43 cities.
3. New energy industry
In 2016, the total production value of the PV industry in China reached RMB336 billion, up27% year on year. The production value takes up more than50% of the global aggregate. The Ministry of Industry and Information Technology predicts that the industry will remain stable in 2017. However, the adjustment of the on-grid electricity price causes a rush of new market players and PV power plant construction plans, which leads to a fluctuation in the industry in China.
4. Real estate
As the land resource in cities becomes increase scarce, city renovation will become a common task for all major cities. The limited land resource has also become a bottleneck for the development of Shenzhen. City renovation provides a low-cost solution for this problem and is largely supported by the government. The project is well positioned in the cross of the Dashahe innovation corridor and OCT cultural creation ring.
(2) Company development strategy and business plan
The Company is a technological and market leader in the hi-end energy-saving curtain wall industry and will benefit from the development of the industry. The growth of the market will contribute to theCompany’s profitability.
The rail transport industry is developing rapidly in China. Many Chinese cities have plans to develop rail transport. The
development of the sector is much faster thanpeople’s expectations, boosting the development of the subway screen door industry.
The Company will enjoy from the fast development of the industry. Over recent years, the percentage of operation revenue of the
China Fangda Group Co., Ltd. 2016 Annual Report railway transportation business has continued increasing in the Company. Withyears’ development, the Company has become an industry leader in terms of market share, brand influence, standard and expertise.
As the Company expected changes in thegovernment’s PV power generation policies, the Company proactively adjusted the strategy and slowed down the development of PV power plants. The Company plans to use the remaining fund that is originally planned to fund PV power plants to permanently replenish theCompany’s working capital. The Company will continue paying attentions to the latest national policies and determine the future development of the PV and new energy business according to theCompany’s conditions.
The year 2017 is an important year of the 13th Five-Year Plan period. The government will continue the supply side reform in this year. The Company will ride the tide of national development strategies to benefit from the development of industries and continue focusing on quality and efficiency. The Company will establish annual business and management targets and seek to fulfill annual operation gains, building the path of continuous development.
In 2017, the Company will focus on the south China curtain wall and material industry and also pay attention to high quality projects and customers in the Yangtze River, Beijing-Tianjin and Chengdu-Chongqing districts. The Company will also seek opportunities to grow globally. The Company will continue to consolidate its leadership in the domestic rail transport equipment industry by following the “One Road, One Belt” strategy and seek to expand its overseas business. The Company will further strengthen the domestic and overseas sales teams to ensure adequate market exploration and project implementation resources for the long-term development of the Company. The Company will continue strengthening cost management, optimizing the personnel structure, reinforcing risk awareness and controlling internal risks.The Company will continue implementing the Fangda Town project and start the development of the Nanchang Phoenix Land project.
(3) Capital demand and source for projects in progress
To realize the business target in 2017, the Company will develop suitable financial and capital plans, accelerate the collection of accounts receivable, sales payment from sales of Fangda Town, expand financing channels, and use share issuance, bank loans and other financing products to meet the demand for capital.
(4) Risks and solutions
1. Market risks and measures
As the overall designing and engineering quality continues improving in the domestic construction curtain wall industry, curtain wall products will become increasingly standard, intensifying the market competition. The Company will continue implementing a prudent operation strategy, fine management and technical innovation to lower the management costs and accelerate the recovery of receivables. Through new technologies and processes, we will improve product quality, lower costs and elevate earnings. While consolidating the domestic market, the Company will step up the efforts in exploring overseas markets, thus elevating our competitiveness in global markets and improving our resistance to risks.
2. Management risks and measures
With an increase in orders in recent years and operation of five industry bases, the Company has continued expanding rapidly in terms of capitalization, business and teams. The organizational structure and management system have become more complicated, leading to management risks in industry expansion. The Company will continue to improve the matrix management mode, integrate business management, optimize the business flow, seeking to build a high-efficient and solid management team. We will introduce high-quality, professional technical and management talents in different fields to strengthen the Company's core competitiveness. 3. Production and operation risks and measures
The macro-economy and market demand have added to the fluctuation in prices of main raw materials such as aluminum and steel and labor, affecting theCompany’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 technicalR&D, reduce consumption of raw materials, introduce automatic and intelligent production equipment, strengthen staff training to improve working efficiency. 4. Solar PV power plant risks and measures
China Fangda Group Co., Ltd. 2016 Annual Report The industry is closely related to policies of the local government. Changes in policies will have large impacts on the industry. The Company will continue paying attentions to the development of the industry. The Company will conduct adequate verification on project feasibility, control costs, quality and schedules strictly, and improve its development, construction and maintenance capabilities.
X. Acceptance of surveys, negotiation and visits
1. Reception of investigations, communications, or interviews in the reporting period
√ Applicable□ Inapplicable
||||||
|-|-|-|-|-|
|Time/date|Way||Visitor|Disclosure of information|
|||||Investor Relationship Record Form on|
|12.01.16|Onsite investigation||Institution||
|||||www.cninfo.com.cn|
|||||Investor Relationship Record Form on|
|07.03.16|Onsite investigation||Institution||
|||||www.cninfo.com.cn|
|||||Investor Relationship Record Form on|
|11.03.16|Onsite investigation||Institution||
|||||www.cninfo.com.cn|
|||||Investor Relationship Record Form on|
|16.03.16|Onsite investigation||Institution||
|||||www.cninfo.com.cn|
|||||Investor Relationship Record Form on|
|13.05.16|Onsite investigation||Institution||
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|||||Investor Relationship Record Form on|
|24.05.16|Onsite investigation||Institution||
|||||www.cninfo.com.cn|
|||||Investor Relationship Record Form on|
|16.08.16|Onsite investigation||Institution||
|||||www.cninfo.com.cn|
|||||Investor Relationship Record Form on|
|08.09.16|Onsite investigation||Institution||
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|03.11.16|Onsite investigation||Institution||
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|17.11.16|Onsite investigation||Institution||
|||||www.cninfo.com.cn|
|TIme||10|||
|Number of institutes||35|||
|Number of individuals||0|||
|Number of other visitors||0|||
|Disclosure of any non-public information||No|||

China Fangda Group Co., Ltd. 2016 Annual Report V Significant Events
1. Profit distribution and reserve capitalization plan
Establishment, implementation or adjustment of profit distribution policies especially the cash dividend policy during the report period
√ Applicable□ Inapplicable
During the report period, the Company implemented the profit distribution plan for 2015. Approved at the Shareholders' Meeting 2015 held on 17.05.17, the Company's profit distribution plan for 2015 is distributing a cash dividend of RMB1.00 (tax-included) for every ten shares of all the shareholders based on a total of 756,909,905 shares on 31.12.2015. The plan was implemented on 27.05.16 (see the 2015 Share Equity Distribution Implementation Announce 2016-25).
|||
|-|-|
|Explanation of Cash Dividend Distribution Policies||
|Comply with the Articles of Association or resolution made at||
||Yes|
|the General Shareholders' Meeting||
|Clear and definite distribution standard and proportion|Yes|
|Decision-making procedure and mechanism|Yes|
|Independent directors fulfill their duties|Yes|
|Middle and small shareholders express their opinions and claims.||
||Yes|
|There rights are well protected.||
|Cash dividend distribution policies are adjusted or revised||
||Yes|
|according to law||

Profit distribution and reserve capitalizing pre-plans or plans over the recent three years (including the reporting period)
2014: A cash dividend of RMB0.30 (including tax) for each ten shares is issued to all shareholders on the basis of 756,909,905 shares with a total amount of RMB 22,707,297.15, on 31.12.14. No dividend share or capitalization share is issued in the year.
2015: A cash dividend of RMB1.00 (including tax) for each ten shares is issued to all shareholders on the basis of 756,909,905 shares with a total amount of RMB 75,690,990.50, on 31.12.15. No dividend share or capitalization share is issued in the year.
2016: A cash dividend of RMB3.50 (including tax) for each ten shares is issued to all shareholders on the basis of 789,094,836 shares with a total amount of RMB 276,183,192.60, on 31.12.16. Five shares will be issued for every ten shares to all shareholders through capitalization of capital reserve. No dividend share will be issued in this year.
Distribution of cash dividend over the recent three years (including this period)
In RMB
|||||||
|-|-|-|-|-|-|
|||Net profit|Proportion in the net|||
|||attributable to|project attributable||Proportion of cash|
||Cash dividend|||Cash dividend paid||
|Year||shareholders in the|to shareholders in||dividend paid in|
||(including tax)|||in other manners||
|||consolidated|the consolidated||other manners|
|||financial statements|financial statements|||
|2016|276,183,192.60|697,956,378.23|39.57%|0.00|0.00%|
|2015|75,690,990.50|107,272,369.77|70.56%|0.00|0.00%|

China Fangda Group Co., Ltd. 2016 Annual Report
|||||||
|-|-|-|-|-|-|
|2014|22,707,297.15|96,998,429.76|23.41%|0.00|0.00%|

 Cash dividend proposed despite the Company records profits in the report period and a positive undistributed profit/
□ Applicable√ Inapplicable
2. Profit Distribution and Reserve Capitalization Plan in the Report Period
√ Applicable□ Inapplicable
|||
|-|-|
|Bonus shares for every ten shares|0|
|Cash dividend for every ten shares (yuan,||
||3.50|
|tax-included)||
|Shares capitalized for every 10 shares|5|
|A total number of shares as the distribution basis|789,094,836|
|Total cash dividend (yuan, including tax)|276,183,192.60|
|Distributable profit (yuan)|1,016,820,576.30|
|Proportion of cash dividend in the distributable||
||100.00%|
|profit||
|Cash dividend||
|The Company is in a fast growth stage. Therefore, the cash dividend will reach 20% of the profit distribution at least.||
|Details of profit distribution or reserve capitalization plan||
|The Company plans to distribute a cash dividend of RMB3.50 (including tax) for each ten shares issued to all shareholders on the||
|basis of 789, 094,836 shares with a total amount of RMB276,183,192.60, on 31.12.16. Five shares will be issued for every ten||
|shares to all shareholders through capitalization of capital reserve. No dividend share will be issued in this year. The plan needs to||
|be reviewed and approved at the General Shareholders' Meeting 2016.||

3. Performance of promises
1. Commitments that have been fulfilled and not fulfilled by actual controller, shareholders, related parties, acquirers of the Company
√ Applicable□ Inapplicable
||||||||
|-|-|-|-|-|-|-|
|Promised issue|Promiser|Type|Commitment|Date|Term|Fulfillment|
|Share reform|None||||||
|Commitments made in acquisition|||||||
||None||||||
|reports or equity change reports|||||||
|Commitments made during assets|||||||
||None||||||
|reorganization|||||||
||Caitong Fund;|Share sales|Shares offered||||
|Commitments made during initial|||||||
||Changzhou|restriction|in the|01.08.16|12 months|In fulfillment|
|public offering or re-financing|||||||
||Investment|commitment|non-public||||

China Fangda Group Co., Ltd. 2016 Annual Report
||||
|-|-|-|
||Group, First|share issuance|
||Capital|in 2015 will|
||Securities,|be locked for|
||Fullgoal|12 months|
||Assets|from the date|
||Management|of listing|
||Co., Ltd.,||
||Sinomach||
||Finance Co.,||
||Ltd.,||
||Minsheng||
||Tonghui Asset||
||Management||
||Co., Ltd. and||
||Ping An-UOB||
||Fund||
||Management||
||Co., Ltd.||
|Share option incentive|None||
|Other commitments made to|||
||None||
|small-to-middle shareholders|||
|Timely fulfillment|Yes||
|If a commitment is not fulfilled|||
|timely, the reason should be explained|||
||Inapplicable||
|and the further plan should be|||
|introduced|||

2. Explanation and reason of profit forecasts on assets or projects that remain in the report period
□ Applicable√ Inapplicable
4. Non-operating capital use by the controlling shareholder or related parties in the reporting term
□ Applicable√ Inapplicable
The controlling shareholder and its affiliates occupied no capital for non-operating purpose of the Company during the report period. 5. Statement of the Board of Directors, Supervisory Committee and Independent Directors (if applicable) on the “non-standardauditors‟ report” issued by the CPA on the current report period
□ Applicable√ Inapplicable
China Fangda Group Co., Ltd. 2016 Annual Report 6. Statement of changes to accounting policies, estimates and audit methods compared with the financial report of the previous year
√ Applicable□ Inapplicable
On December 10, 2015, the Ministry of Finance issued the Temporary Provisions on the Accounting of Commodity Futures Hedging (Accounting Doc No.18[2015]). According to the document, Company may choose to implement this new regulation or Enterprise Accounting Standard No.24– Hedging. The Company chooses to implement the Temporary Provisions on the Accounting of Commodity Futures Hedging.
On December 3, 2016, the Ministry of Finance issued the Notice on Increasing Pilot Points of Business Tax/VAT Reform (Tax Doc No. 36 (2016)). From the implementation of the notice, amounts of assets and liabilities of transactions that occurred from May 1, 2016 and the implementation of the regulations should be adjusted.
7. Statement of retrospective restatement of major accounting errors in the report period□ Applicable√ Inapplicable
No retrospective restatement of major accounting errors in the report period
8. Statement of change in the financial statement consolidation scope compared with the previous financial report
√ Applicable□ Inapplicable
1. Fangda Automation (Hong Kong) Co., Ltd. indirectly controlled by the Company was set up in the report period.
The subsidiary of the Company Ganzhou Longneng New Energy Co., Ltd. controlled indirectly by the Company was liquidized in this period. In July 2016, the Company transfers Shengyang Fangda and Shenzhen Woke that it controlled directly or indirectly to the liquidation team specified by thePeople’s Court of Hunnan District of Shengyang Liaoning Tongwen Law Firm and no longer controls the two companies. Therefore, three subsidiaries are moved out of the consolidation scope in this period.
9. Engaging and dismissing of CPA
CPA engaged currently
|||
|-|-|
|Domestic public accountants name|Grant Thornton (limited liability partnership)|
|Remuneration for the domestic public accountants||
||130|
|(in RMB10,000)||
|Consecutive years of service by the domestic public||
||5|
|accountants||
|Name of certified accountants of the domestic public||
||Xie Peiren, Hu Gaosheng|
|accountants||
|Overseas public accountants name (if any)|None|
|Remuneration for the overseas public accountants||
||0|
|(in RMB10,000)||
|Consecutive years of service by the overseas public|None|

China Fangda Group Co., Ltd. 2016 Annual Report
|||
|-|-|
|accountants (if any)||
|Name of certified accountants of the overseas public||
||None|
|accountants (if any)||

Whether the CPA is replaced
□ Yes√ No
Engaging of internal control audit CPA, financial advisor and sponsor
√ Applicable□ Inapplicable
This year, the Company engaged Grand Thornton China (limited liability partnership) as the financial statement and internal control auditing CPA with a fee of RMB1.3 million.
This year, the Company engaged China Merchants Securities as the sponsor with a sponsoring fee of RMB9,500,000 for the private A-share issuance issue.
10. Trade suspension and termination after the disclose of the annual report
□ Applicable√ Inapplicable
11. Bankruptcy and capital reorganizing
□ Applicable√ Inapplicable
The Company has no bankruptcy or reorganization events in the report period.
12. Significant lawsuit and arbitration
□ Applicable√ Inapplicable
The Company has no significant lawsuit or arbitration affair in the report period.
13. Punishment and rectification
□ Applicable√ Inapplicable
The Company received no penalty and made no correction in the report period.
14. Credibility of the Company, controlling shareholder and actual controller
□ Applicable√ Inapplicable
15. Share incentive schemes, staff shareholding program or other incentive plans
□ Applicable√ Inapplicable
There is no share incentive schemes, staff shareholding program or other incentive plans in the report period
China Fangda Group Co., Ltd. 2016 Annual Report 16. Material related transactions
1. Related transactions related to routine operation
□ Applicable√ Inapplicable
The Company made no related transaction related to daily operating in the report period.
2. Related transactions related to assets transactions
□ Applicable√ Inapplicable
The Company made no related transaction of assets or equity requisition and sales in the report period.
3. Related transactions related to joint external investment
□ Applicable√ Inapplicable
The Company made no related transaction of joint external investment in the report period.
4. Related credits and debts
□ Applicable√ Inapplicable
The Company had no related debt in the report period.
5. Other major related transactions
□ Applicable√ Inapplicable
The Company has no other significant related transaction in the report period.
17. Significant contracts and performance
1. Asset entrusting, leasing, contracting
(1) Asset entrusting
□ Applicable√ Inapplicable
The Company made no custody in the report period.
(2) Contracting
□ Applicable√ Inapplicable
The Company made no contract in the report period
(3) Leasing
√ Applicable□ Inapplicable
China Fangda Group Co., Ltd. 2016 Annual Report Leasing
The investment real estate is used as external leasing. The rental income in the report period is RMB26,768,249.10.
Projects that create gains accounting for over10% of theCompany’s total profit in the report period
□ Applicable√ Inapplicable
The Company leased no projects that create gains accounting for over10% of theCompany’s total profit in the report period. 2. Significant guarantee
√ Applicable□ Inapplicable
(1) Guarantee
In RMB10,000
||||||||||
|-|-|-|-|-|-|-|-|-|
|External guarantees made by the Company and subsidiaries (exclude those made for subsidiaries)|||||||||
||||Actual date of||||||
|||||Actual|||||
||Date of|Guarantee|occurring||Type of||Complete|Related|
|Guarantee provided to||||amount of||Term|||
||disclosure|amount|(signing date of||guarantee||d or not|party|
|||||guarantee|||||
||||agreements)||||||
|Guarantee between the Company and its subsidiaries|||||||||
||||Actual date of||||||
|||||Actual|||||
||Date of|Guarantee|occurring||Type of||Complete|Related|
|Guarantee provided to||||amount of||Term|||
||disclosure|amount|(signing date of||guarantee||d or not|party|
|||||guarantee|||||
||||agreements)||||||
|||||||since engage|||
|||||||of contract to|||
|Fangda Jianke|26.04.16|48,000|06.07.16|30,426.97|Joint liability||No|Yes|
|||||||2 years upon|||
|||||||due of debt|||
|||||||since engage|||
|||||||of contract to|||
|Fangda Jianke|26.04.16|26,000|27.12.16|11,982.2|Joint liability||No|Yes|
|||||||2 years upon|||
|||||||due of debt|||
|||||||since engage|||
|||||||of contract to|||
|Fangda Jianke|26.04.16|40,000|01.11.16|11,982.2|Joint liability||No|Yes|
|||||||2 years upon|||
|||||||due of debt|||
|||||||since engage|||
|||||||of contract to|||
|Fangda Jianke|26.04.16|20,000|23.08.16|10,000|Joint liability||No|Yes|
|||||||2 years upon|||
|||||||due of debt|||
|||||||since engage|||
|Fangda Jianke|27.03.15|15,000|30.12.15|17,915.54|Joint liability||No|Yes|
|||||||of contract to|||

China Fangda Group Co., Ltd. 2016 Annual Report
||||||||||
|-|-|-|-|-|-|-|-|-|
|||||||2 years upon|||
|||||||due of debt|||
|||||||since engage|||
|||||||of contract to|||
|Fangda Jianke|26.04.16|20,000|17.10.16|2,980.18|Joint liability||No|Yes|
|||||||2 years upon|||
|||||||due of debt|||
|||||||since engage|||
|||||||of contract to|||
|Fangda Jianke|26.04.16|10,000|17.11.16|10,000|Joint liability||No|Yes|
|||||||2 years upon|||
|||||||due of debt|||
|||||||since engage|||
|||||||of contract to|||
|Fangda Automatic|26.04.16|21,600|06.07.16|10,559.22|Joint liability||No|Yes|
|||||||2 years upon|||
|||||||due of debt|||
|||||||since engage|||
|||||||of contract to|||
|Fangda Automatic|26.04.16|10,000|12.12.16|1,000|Joint liability||No|Yes|
|||||||2 years upon|||
|||||||due of debt|||
|||||||since engage|||
|||||||of contract to|||
|Fangda Automatic|26.04.16|10,000|27.12.16|1,131.7|Joint liability||No|Yes|
|||||||2 years upon|||
|||||||due of debt|||
|||||||Completion|||
|||||||of|||
|Fangda Automatic|13.09.16|43,951.6|13.09.16|43,951.6|Joint liability|performance|No|Yes|
|||||||of the main|||
|||||||contract|||
|||||||since engage|||
|||||||of contract to|||
|Fangda New Material|26.04.16|8,000|25.05.16|2,576.34|Joint liability||No|Yes|
|||||||2 years upon|||
|||||||due of debt|||
|||||||since engage|||
|||||||of contract to|||
|Fangda Property|23.03.13|130,000|03.02.15|92,216.96|Joint liability||No|Yes|
|||||||2 years upon|||
|||||||due of debt|||
|||||||since engage|||
|||||||of contract to|||
|Fangda Group|26.04.16|20,000|12.12.16|9,000|Joint liability||No|Yes|
|||||||2 years upon|||
|||||||due of debt|||
|||||||since engage|||
|Fangda Group|01.07.15|20,000|08.09.15|12,358.5|Joint liability||No|Yes|
|||||||of contract to|||

China Fangda Group Co., Ltd. 2016 Annual Report
||||||||||
|-|-|-|-|-|-|-|-|-|
|||||||2 years upon|||
|||||||due of debt|||
|||||Total of guarantee to|||||
|Total of guarantee to subsidiaries||||subsidiaries actually|||||
|||566,951.6||||321,611.25|||
|approved in the report term (B1)||||occurred in the report term|||||
|||||(B2)|||||
|||||Total of balance of|||||
|Total of guarantee to subsidiaries||||guarantee actually provided|||||
|||696,951.6||||268,081.41|||
|approved as of the report term (B3)||||to the subsidiaries as of end|||||
|||||of report term (B4)|||||
|Guarantee provided to subsidiaries|||||||||
||||Actual date of||||||
|||||Actual|||||
||Date of|Guarantee|occurring||Type of||Complete|Related|
|Guarantee provided to||||amount of||Term|||
||disclosure|amount|(signing date of||guarantee||d or not|party|
|||||guarantee|||||
||||agreements)||||||
|Total of guarantee provided by the Company (total of the above three)|||||||||
|||||Total of guarantee occurred|||||
|Total of guarantee approved in the|||||||||
|||566,951.6||in the report term||321,611.25|||
|report term (A1+B1+C1)|||||||||
|||||(A2+B2+C2)|||||
|||||Total of guarantee occurred|||||
|Total of guarantee approved as of|||||||||
|||696,951.6||as of the end of report term||268,081.41|||
|end of report term (A3+B3+C3)|||||||||
|||||(A4+B4+C4)|||||
|Percentage of the total guarantee occurred (A4+B4+C4) on net|||||||||
|||||113.39%|||||
|asset of the Company|||||||||
|Including:|||||||||
|Note of immature guarantee with guarantee liabilities or possible|||||||||
|||||None|||||
|joint damage liabilities in the report period|||||||||
|Statement of external guarantees violating the procedure (if any)||||None|||||

Note: The normal practice of theGroup’s real estate business is that the Group provides periodic mortgage guarantee for house purchasers. The periodic guarantee becomes effective on the effectiveness date of contracts and expires when housing ownership certificates were taken over by banks and house purchasers complete the pledging formalities. By December 31, 2016, the Company has made such periodic guarantee of RMB1.183 billion.
(2) Incompliant external guarantee
□ Applicable√ Inapplicable
The Company made no incompliant external guarantee in the report period.
China Fangda Group Co., Ltd. 2016 Annual Report 3. Entrusted cash capital management
(1) Wealth management
√ Applicable□ Inapplicable
In RMB10,000
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||||||||||||Actual|
||||||||||||recover|
|||||||||||Actual||
|||||||||Impairme|||of gain|
||Related|||||Earning|Principal|||gain/loss||
|||Type of||||||nt|Estimate||and|
|Trustee|transactio||Amount|Start date|End date|reconition|recovered|||in the||
|||product||||||provision|return||loss in|
||n|||||method|actually|||report||
|||||||||(if any)|||the|
|||||||||||period||
||||||||||||report|
||||||||||||period|
|||||||Annual||||||
|Bank of||Earning-pr|||||||||Recove|
||No||2,500|05.02.16|15.02.16|yield|2,500|0|1.37|1.37||
|China||otected|||||||||red|
|||||||2.00%||||||
|||||||Annual||||||
|Bank of||Earning-pr|||||||||Recove|
||No||600|06.02.16|15.02.16|yield|600|0|0.3|0.3||
|China||otected|||||||||red|
|||||||2.00%||||||
|||||||Annual||||||
|Bank of||Earning-pr|||||||||Recove|
||No||400|06.02.16|15.02.16|yield|400|0|0.21|0.21||
|China||otected|||||||||red|
|||||||2.10%||||||
|||||||Annual||||||
|Bank of||Earning-pr|||||||||Recove|
||No||1,100|06.02.16|15.02.16|yield|1,100|0|0.54|0.54||
|China||otected|||||||||red|
|||||||2.00%||||||
|||||||Annual||||||
|Bank of||Earning-pr|||||||||Recove|
||No||4,000|02.02.16|15.02.16|yield|4,000|0|3.42|3.42||
|China||otected|||||||||red|
|||||||2.40%||||||
|||||||Annual||||||
|Bank of||Earning-pr|||||||||Recove|
||No||5,000|22.03.16|06.04.16|yield|5,000|0|5.16|5.16||
|China||otected|||||||||red|
|||||||2.51%||||||
|||||||Annual||||||
|Bank of||Earning-pr|||||||||Recove|
||No||8,800|31.05.16|05.07.16|yield|8,800|0|22.78|22.78||
|China||otected|||||||||red|
|||||||2.70%||||||
|||||||Annual||||||
|Bank of||Earning-pr|||||||||Recove|
||No||10,000|28.09.16|03.11.16|yield|10,000|0|22.68|22.68||
|China||otected|||||||||red|
|||||||2.30%||||||
|Shenzhen||Earning-pr||||Annual||||||
||||||||||||Recove|
|branch of|No|otected|6,000|30.09.16|02.11.16|yield|6,000|0|14|14||
||||||||||||red|
|China||floating||||2.58%||||||

China Fangda Group Co., Ltd. 2016 Annual Report
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|CITIC||earning||||||||||
|Bank||||||||||||
|Corporati||||||||||||
|on||||||||||||
|Limited||||||||||||
|Shenzhen||||||||||||
|branch of||||||||||||
|China||Earning-pr||||||||||
|||||||Annual||||||
|CITIC||otected|||||||||Recove|
||No||11,000|11.11.16|14.12.16|yield|11,000|0|24.66|24.66||
|Bank||floating|||||||||red|
|||||||2.48%||||||
|Corporati||earning||||||||||
|on||||||||||||
|Limited||||||||||||
|Shenzhen||||||||||||
|branch of||||||||||||
|China||Earning-pr||||||||||
|||||||Annual||||||
|CITIC||otected|||||||||Recove|
||No||1,500|30.09.16|02.11.16|yield|1,500|0|3.3|3.3||
|Bank||floating|||||||||red|
|||||||2.58%||||||
|Corporati||earning||||||||||
|on||||||||||||
|Limited||||||||||||
|Shenzhen||||||||||||
|branch of||||||||||||
|China||Earning-pr||||||||||
|||||||Annual||||||
|CITIC||otected|||||||||Immat|
||No||4,100|30.09.16|04.01.17|yield||0|28.58|||
|Bank||floating|||||||||ure|
|||||||2.90%||||||
|Corporati||earning||||||||||
|on||||||||||||
|Limited||||||||||||
|China||Earning-pr||||||||||
|||||||Annual||||||
|Merchant||otected|||||||||Recove|
||No||3,400|28.09.16|15.12.16|yield|3,400|0|13.17|13.17||
|s Bank||floating|||||||||red|
|||||||2.20%||||||
|Co., Ltd.||earning||||||||||
|Total|||58,400|--|--|--|54,300||140.17|111.59|--|
||||The raised fund of RMB90 million has been used to purchase financial products. The other|||||||||
|Source of fund||||||||||||
||||amount used to purchase financial products is self-owned fund.|||||||||
|Principal and return due but not||||||||||||
||||0|||||||||
|covered||||||||||||
|Lawsuit (if any)|||None|||||||||
|Disclosure date of approval||||||||||||
||||26.04.16|||||||||
|announcement (if any)||||||||||||

China Fangda Group Co., Ltd. 2016 Annual Report
|||
|-|-|
|Disclosure date of Shareholders'||
|Meeting approval announcement||
|(if any)||
|Whether there will be entrusted||
||Yes|
|wealth management plan||

(2) Trusted loans
□ Applicable√ Inapplicable
The Company borrowed no trust loan in the report period.
4. Other significant contract
□ Applicable√ Inapplicable
The Company entered into no other significant contract in the report.
XVI Social responsibilities
Performance of poverty relieving responsibilities
√ Applicable□ Inapplicable
(1) Annual poverty relieving summary
In 2016, the Company donated a total of RMB1,459,000 for poverty relieving, including:
1. The Company donated RMB1.1 million to the Jiangxi CPCCP Overseas Poverty Relieving Foundation to help the Nanchang Xinjian District and Pingxiang Luxi County build health care centers in 22 poor villages.
2. The Company donated RMB300,00 to Shenzhen Nanshan District Charity for poverty relieving in Guangdong.
3. The Company donated RMB30,000 to two poor university students in Jiangxi.
4. The Company donated RMB24,000 to the congenital heart disease child care program of the Shenzhen Charity Foundation. 5. The Company donated RMB5,000 to the Shanghai Jinshan District Lvgang Town social assistance office.
(2) Details
||||
|-|-|-|
|Item|Unit|Qty/Description|
|1. General situation|——|——|
|Including: 1. Fund|(in RMB10,000)|145.9|
|2. Investment|——|——|
|1. Industry development|——|——|
|2. Employment transfer|——|——|
|3. Relocation|——|——|

China Fangda Group Co., Ltd. 2016 Annual Report
||||
|-|-|-|
|4. Education|——|——|
|Including: 4.1 Sponsor to students from|||
||(in RMB10,000)|3|
|poor families|||
|4.2 Number of students|Person|2|
|5. Health care support|——|——|
|Including: 5.1 Contribution to health care|||
||(in RMB10,000)|110|
|sources in poor areas|||
|6. Eco-protection support|——|——|
|7. Last-line guarantee|——|——|
|8. Social poverty relieving|——|——|
|8.3 Contribution to poverty|||
||(in RMB10,000)|32.9|
|relieving foundations|||
|9. Others|——|——|
|3. Prizes|——|——|

19. Other material events
√ Applicable□ Inapplicable
The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure Guideline No.6– Listed Companies Engaged in Decoration Business.
1. After the issuance, 32,184,931 new shares were listed on Shenzhen Stock Exchange on August 1, 2016. The issuance will raise a total 469,899,992.60. After the issuance expense of 10,030,772.72 is deducted, the net raised amount is 459,869,219.88.
||||
|-|-|-|
|Key issue|Date of disclosure|Information source|
|Non-Public A-Share Issuance Report andAnnouncement of Listing|29.07.16|China Securities Journal, Shanghai|
|||Securities Daily, Securities Times, HKCD|
|||(English) and www.cninfo.com.cn|

 2. Qualifications in the decoration industry:
||||
|-|-|-|
|No.|Qualification|Effectiveness|
|1|Construction curtain wall designing class A|By 16.04.2020|
|2|Construction curtain wall contracting class A|By 03.02.21|
|3|Construction decoration contracting class B|By 04.03.21|
|4|Steel structure engineering contracting class B|By 04.03.21|
|5|Construction mechanical and electric equipmentinstallation contracting class C|By 04.03.21|
|6|City and road lighting engineering contracting class C|By 04.03.21|

The Safety Production License of the Company expired in 2016. The Company has applied for renewing on December 28, 2016. In addition, the construction decoration contracting class B has been updated into construction decoration contracting class C.
In the report period, theCompany’s safety management is normal. The Company pays large attention toemployees’ safety
awareness and capabilities of emergency processing. The Company has strengthened safety production and investigation of safety
risks. The Company has formulated safety management guidelines to guide safety management. There was no significant safety
China Fangda Group Co., Ltd. 2016 Annual Report accidents in the report period.
20. Material events of subsidiaries
□ Applicable√ Inapplicable
China Fangda Group Co., Ltd. 2016 Annual Report Chapter 6 Changes in Share Capital and Shareholders
1. Changes in shares
1. Changes in shares
In share
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||Before the change||Change (+,-)|||||After the change||
||||Issued||Transferre|||||
|||Proportio||Bonus|||||Proportio|
||Amount||new||d from|Others|Subtotal|Amount||
|||n||shares|||||n|
||||shares||reserves|||||
|I. Shares with trade|||32,184,93||||32,184,93|33,156,97||
||972,042|0.13%|||||||4.20%|
|restriction conditions|||1||||1|3||
|1. State-owned shares|||0||||0|||
|2. State-owned legal person||||||||||
||||6,438,356||||6,438,356|6,438,356|0.82%|
|shares||||||||||
||||25,746,57||||25,746,57|26,718,61||
|3. Other domestic shares|972,042|0.13%|||||||3.39%|
||||5||||5|7||
|Including: Shares held by||||||||||
|domestic legal persons||||||||||
|Domestic natural||||||||||
||972,042|0.13%|0||||0|972,042|0.12%|
|person shares||||||||||
|4. Shares held by foreign||||||||||
||||0||||0|||
|investors||||||||||
|Including: Shares held by||||||||||
||||0||||0|||
|foreign legal persons||||||||||
|Overseas natural||||||||||
||||0||||0|||
|person shares||||||||||
|II. Shares without trading|755,937,8|||||||755,937,8||
|||99.87%|0||||0||95.80%|
|limited conditions|63|||||||63||
||419,986,6|||||||419,986,6||
|1. Common shares in RMB||99.87%|0||||0||53.22%|
||75|||||||75||
|2. Foreign shares in domestic|335,951,1|||||||335,951,1||
|||44.39%|0||||0||42.57%|
|market|88|||||||88||
|3. Foreign shares in overseas||||||||||
||||0||||0|||
|market||||||||||
|4. Others|||0||||0|||

China Fangda Group Co., Ltd. 2016 Annual Report
||||||||
|-|-|-|-|-|-|-|
||756,909,9||32,184,93|32,184,93|789,094,8||
|III. Total of capital shares||100.00%||||100.00%|
||05||1|1|36||

Reasons
√ Applicable□ Inapplicable
In the report period, the Company received the Reply to the Non-public Share Issuance of Fangda China Group Co., Ltd. (CSRC License[2016] No.825) to allow the Company to issue 32,184,931 shares, which became listed on Shenzhen Stock Exchange on August 1, 2016.
Approval of the change
√ Applicable□ Inapplicable
On June 12, 2016, the Company received the Reply to the Non-public Share Issuance of Fangda China Group Co., Ltd. (CSRC License[2016] No.825) to allow the Company to issue A-shares.
Share transfer
√ Applicable□ Inapplicable
In the report period, the Company conducted non-public issuance of 32,184,931 A-shares, which became listed on Shenzhen Stock Exchange on August 1, 2016.
Impacts on financial indicators including basic and diluted earnings per share, net assets per share attributable to common
shareholders of the company in the most recent year and period
√ Applicable□ Inapplicable
Others that need to be disclosed as required by the securities supervisor
□ Applicable√ Inapplicable
2. Changes in conditional shares
√ Applicable□ Inapplicable
In share
||||||||
|-|-|-|-|-|-|-|
||Conditional||||||
|||||Conditional|||
||shares at|Released this|Increased this||Reason of||
|Shareholder||||shares at end of||Date of releasing|
||beginning of the|period|period||condition||
|||||the period|||
||period||||||
|First Capital|||||||
|Securities –|||||||
|Guosen Securities|||||||
||||||Private issuing||
|– Mutual Win|0|0|6,438,356|6,438,356||01.08.17|
||||||restriction||
|Dayan|||||||
|Quantization|||||||
|Private Placement|||||||

China Fangda Group Co., Ltd. 2016 Annual Report
||||||||
|-|-|-|-|-|-|-|
|Collective Assets|||||||
|Management|||||||
|Program|||||||
|Ping An Dahua|||||||
|Fund – Ping An|||||||
||||||Private issuing||
|Bank – Guohai|0|0|4,041,098|4,041,098||01.08.17|
||||||restriction||
|Securities Stock|||||||
|Co., Ltd.|||||||
|Sinomach Finance|||||Private issuing||
||0|0|3,219,178|3,219,178||01.08.17|
|Co., Ltd.|||||restriction||
|Changzhou|||||||
||||||Private issuing||
|Investment Group|0|0|3,219,178|3,219,178||01.08.17|
||||||restriction||
|Co., Ltd.|||||||
|Fullgoal Assets –|||||||
|China Merchants|||||||
|Securities –|||||||
|Fullgoal Asssseets|||||||
||||||Private issuing||
|– Changtai Private|0|0|3,219,178|3,219,178||01.08.17|
||||||restriction||
|Placement Hedging|||||||
|No.2 Assets|||||||
|Management|||||||
|Program|||||||
|Kunlun Health|||||||
|Insurance Co., Ltd,|||||Private issuing||
||0|0|3,212,329|3,212,329||01.08.17|
|Universal Life|||||restriction||
|Insurance|||||||
|Ping An Dahua|||||||
|Fund – Ping An|||||||
|Bank – Ping An|||||||
||||||Private issuing||
|Dahua Anying|0|0|958,904|958,904||01.08.17|
||||||restriction||
|Huifu No.80 Assets|||||||
|Management|||||||
|Program|||||||
|Caitong Fund –|||||||
|Everbright Bank _|||||||
|Caitong Fund –|||||||
|Fuhua Private|||||Private issuing||
||0|0|794,520|794,520||01.08.17|
|Placement No.2|||||restriction||
|Assets|||||||
|Management|||||||
|Program|||||||
|Ping An Dahua|0|0|684,931|684,931|Private issuing|01.08.17|

China Fangda Group Co., Ltd. 2016 Annual Report
||||||||
|-|-|-|-|-|-|-|
|Fund – Ping An|||||restriction||
|Bank – Shenzhe|||||||
|Ping An Dahua|||||||
|Assets|||||||
|Management Co.,|||||||
|Ltd.|||||||
|Caitong Fund –|||||||
|ICBC Bank –|||||||
|Beijing Yizhuang|||||||
||||||Private issuing||
|International|0|0|561,644|561,644||01.08.17|
||||||restriction||
|Investment|||||||
|Development Co.,|||||||
|Ltd.|||||||
|Caitong Fund –|||||||
|Everbright Bank _|||||||
|Caitong Fund –|||||||
|Fuhua Private|||||Private issuing||
||0|0|561,644|561,644||01.08.17|
|Placement No.6|||||restriction||
|Assets|||||||
|Management|||||||
|Program|||||||
|Caitong Fund –|||||||
|ICBC – Fuchun|||||||
|Private Placement|||||Private issuing||
||0|0|561,644|561,644||01.08.17|
|Baoli No.1 Assets|||||restriction||
|Management|||||||
|Program|||||||
|Caitong Fund –|||||||
|ICBC – Fuchun|||||||
|Private Placement|||||Private issuing||
||0|0|561,644|561,644||01.08.17|
|Baoli No.5 Assets|||||restriction||
|Management|||||||
|Program|||||||
|Caitong Fund –|||||||
|ICBC – Fuchun|||||||
|Private Placement|||||Private issuing||
||0|0|561,644|561,644||01.08.17|
|Baoli No.15 Assets|||||restriction||
|Management|||||||
|Program|||||||
|Subtotal of other|||||||
||||||Private issuing||
|shareholders of|0|0|3,589,039|3,589,039||01.08.17|
||||||restriction||
|conditional shares|||||||

China Fangda Group Co., Ltd. 2016 Annual Report
||||||||
|-|-|-|-|-|-|-|
|Total|0|0|32,184,931|32,184,931|--|--|

 2. Share placing and listing
1. Securities issuance (excluding preference shares) during the report period
√ Applicable□ Inapplicable
||||||||
|-|-|-|-|-|-|-|
|Name of the|||||Approved||
|||Price of issue (or||||Date when trading is|
|shares and|Date of issue||Amount issued|Date of listing|amount to be||
|||interest rate)||||terminated|
|derivate securities|||||listed||
|Shares|||||||
|Private issuing of|||||||
||15.07.16|RMB14.60/share|32,184,931|01.08.16|32,184,931||
|A-shares|||||||
|Convertible bonds, separable-traded convertible bonds, company bonds|||||||
|Other derivative securities|||||||

Securities issuance (excluding preference shares) during the report period
In the report period, the Company, as approved by theCSRC’s Reply to the Non-public Share Issuance of Fangda China Group Co., Ltd. (CSRC License[2016] No.825), issued 32,184,931 A-shares to raise a net amount of RMB459,869,219.88. After the issuance, the total equity of the Company reaches 789,094,836 shares, including 453,143,648 A-shares and 33,5951,188 B-shares.
2. Statement of changes in share number and shareholder structure, assets and liabilities structure
√ Applicable□ Inapplicable
In the report period, the Company issued 32,184,931 A-share through non-public share issuance to raise a net RMB459,869,219.88. After the issuance, the equity of the Company increases from 756,909,905 shares to 789,094,836 shares. The 32,184,931 A-shares are all conditional shares. The interest of owners of the Company increases by RMB459,869,219.88 (including: RMB32,184,931.00 is included in Equity, RMB427,684,288.88 is included in Capital reserve– Share Premium). The total assets increase by
RMB459,869,219.88. The liabilities structure is not affected.
3. Currentemployees‟ shares
□ Applicable√ Inapplicable
3. Shareholders and the substantial controller of the Company
1. Shareholders and shareholding
In share
|||||||||
|-|-|-|-|-|-|-|-|
|Number of||Total number of||Number of||Total number of||
|shareholders of||ordinary share||shareholders of||shareholders of||
||44,032||38,771||0||0|
|common shares||shareholders at||preferred stocks of||preference shares||
|at the end of||the end of the||which voting rights||of which voting||

China Fangda Group Co., Ltd. 2016 Annual Report
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|the report||month before the||||recovered in the||||rights resumed at||
|period||disclosure date of||||report period (if||||the end of the||
|||the annual report||||any) (note 8)||||month before the||
|||||||||||disclosure date of||
|||||||||||the annual report||
|||||||||||(if any) (see note||
|||||||||||8)||
|Shareholders holding 5% of the Company's shares or top-10 shareholders||||||||||||
|||||Number|||||Pledging or freezing|||
|||||of shares||||Amount||||
||||Sharehold||Change|||||||
|||||held at||||of shares||||
||Nature of||ing||in the||Condition|||||
|Shareholder||||the end of||||without||||
||shareholder||percentag||reporting||al shares||Share status||Amount|
|||||the||||sales||||
||||e||period|||||||
|||||reporting||||restriction||||
|||||period||||||||
|Shenzhen BanglinTechnologiesDevelopment Co.,Ltd.|Domesticnon-state legalperson||8.72%|68,774,273|0|||68,774,273||||
||||||||||Pledged||24,565,833|
|ShengjiuInvestment Ltd.|Foreign legalperson||7.27%|57,390,410|9,528,680|||57,390,410||||
|GUOTAI JUNANSECURITIES(HONGKONG)LIMITED|Foreign legalperson||4.24%|33,423,804|-211,086|||33,423,804||||
|Huang Jupei|Domestic naturalperson||3.38%|26,682,832|16,003,032|||26,682,832||||
|Shenzhen ShiliheInvestment Co.,Ltd.|Domesticnon-state legalperson||2.26%|17,860,992|0|||17,860,992||||
|Zhou Shijian|Domestic naturalperson||2.05%|16,213,500|0|||16,213,500||||
|ShenwanHongyuanSecurities (HongKong) Co., Ltd.|Foreign legalperson||1.61%|12,718,408|4,185,222|||12,718,408||||
|China LifeInsurance –Dividend –Personal Dividend– 005L-FH002|Others||1.39%|11,000,000|11,000,000|||11,000,000||||

China Fangda Group Co., Ltd. 2016 Annual Report
||||||||||
|-|-|-|-|-|-|-|-|-|
|Shen|||||||||
|YunnanInternational TrustCO., Ltd. – JuxinNo.5 CollectiveFund TrustProgram|Others|1.00%|7,852,057|7,852,057||7,852,057|||
|First CapitalSecurities –Guosen Securities– Mutual WinDayanQuantizationPrivate PlacementCollective AssetsManagementProgram|Others|0.82%|6,438,356|6,438,356|6,438,356|0|||
|||Among the above-mentioned shareholders, First Capital Securities – Guosen Securities –|||||||
|A strategic investor or ordinary legal|||||||||
|||Mutual Win Dayan Quantization Private Placement Collective Assets Management|||||||
|person becomes the Top10 share|||||||||
|||Program became one of the top 10 shareholders because of the A-share issuance. The|||||||
|shareholder due a stock issue (see note|||||||||
|||6,438,356 share it holds shall not be transferred within 12 month upon the listing of the|||||||
|3)|||||||||
|||shares (on August 1, 2016).|||||||
|||Among the shareholders, Shenzhen Banglin Technology Development Co., Ltd. and|||||||
|||Shengjiu Investment Co., Ltd. are parties action-in-concert. Shenzhen Banglin Technology|||||||
|Notes to top ten shareholder|||||||||
|||Development Co., Ltd. and Shenzhen Shilihe Investment Co., Ltd. are related parties. The|||||||
|relationship or "action in concert"|||||||||
|||Company is not notified of other action-in-concert or related parties among the other|||||||
|||holders of current shares.|||||||
|Top 10 holders of unconditional shares|||||||||
||||||||Category of shares||
|Shareholder||Amount of shares without sales restriction|||||Category of||
|||||||||Amount|
||||||||shares||
|Shenzhen Banglin TechnologiesDevelopment Co., Ltd.||68,774,273|||||RMB common||
|||||||||68,774,273|
||||||||shares||
|Shengjiu Investment Ltd.||57,390,410|||||Foreign shares||
||||||||listed in domestic|57,390,410|
||||||||exchanges||
|GUOTAI JUNANSECURITIES(HONGKONG)LIMITED||33,423,804|||||Foreign shares||
||||||||listed in domestic|33,423,804|
||||||||exchanges||
|Huang Jupei||26,682,832|||||RMB common||
|||||||||26,682,832|
||||||||shares||

China Fangda Group Co., Ltd. 2016 Annual Report
|||||
|-|-|-|-|
|Shenzhen Shilihe Investment Co., Ltd.|17,860,992|RMB common||
||||17,860,992|
|||shares||
|Zhou Shijian|16,213,500|RMB common||
||||16,213,500|
|||shares||
|Shenwan Hongyuan Securities (HongKong) Co., Ltd.|12,718,408|Foreign shares||
|||listed in domestic|12,718,408|
|||exchanges||
|China Life Insurance – Dividend –Personal Dividend – 005L-FH002Shen|11,000,000|||
|||RMB common||
||||11,000,000|
|||shares||
|Yunnan International Trust CO., Ltd. –Juxin No.5 Collective Fund TrustProgram|7,852,057|||
|||RMB common||
||||7,852,057|
|||shares||
|Haitong International SecuritiesCompany Limited-Account Client|6,257,441|Foreign shares||
|||listed in domestic|6,257,441|
|||exchanges||
|No action-in-concert or related parties|Among the shareholders, Shenzhen Banglin Technology Development Co., Ltd. and|||
|among the top10 unconditional|Shengjiu Investment Co., Ltd. are parties action-in-concert. Shenzhen Banglin Technology|||
|shareholders and between the top10|Development Co., Ltd. and Shenzhen Shilihe Investment Co., Ltd. are related parties. The|||
|unconditional shareholders and the|Company is not notified of other action-in-concert or related parties among the other|||
|top10 shareholders|holders of current shares.|||
|Top-10 common share shareholders|Zhou Shijian holds 16,213,500 shares of the Company through the client credit trade|||
|participating in margin trade (if any)|securities account of GF Securities; Huang Jupei holds 26,681,832 shares of the Company|||
|(see note 4)|through the client credit trade securities account of GF Securities;|||

Agreed re-purchasing by theCompany’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 theCompany’s top 10 shareholders of common shares and top 10 shareholders of unconditional common shares in the report period
2. Profile of the controlling shareholders
Shareholder nature: natural person holding
Type of shareholder: legal person
||||||
|-|-|-|-|-|
||Legal||||
|Name of controlling|||||
||representative/respon|Date of establishment|Organization code|Main business|
|shareholder|||||
||sible person||||
|||||Industrial investment,|
|Shenzhen Banglin|||||
|||||developing of electronic|
|Technologies Development|Chen Jinwu|07.06.01|914403007298400552||
|||||products, technical|
|Co., Ltd.|||||
|||||consulting, domestic|

China Fangda Group Co., Ltd. 2016 Annual Report
||||
|-|-|-|
|||commerce, material trading|
|Stock ownership of other|||
|domestic and overseas listed|||
|company controlled or whose|None||
|shares are held by controlling|||
|shareholders|||

Changes in the controlling shareholder in the reporting period
□ Applicable√ Inapplicable
No change in the controlling shareholder in the report period
3. Substantial controller of the Company
Nature of actual controller: domestic natural person
Type of actual controller: natural person
||||
|-|-|-|
|Name of substantial controller|Nationality|Right of residence in another country or region|
|Xiong Jianming|Chinese|Yes|
|Job and position|Chairman of the Board and president of the Company over the past 5 years||
|Profiles of domestic and overseas listed|||
|companies in which the controller held|The controller held no share in other listed companies in the last ten years.||
|shares|||

Change in the actual controller in the report period
□ Applicable√ Inapplicable
No change in the actual shareholder in the report period
7. Chart of the controlling relationship
Controlling over the Company by the substantial controller through trust or other asset management
□ Applicable√ Inapplicable
China Fangda Group Co., Ltd. 2016 Annual Report 4. Other legal person shareholders with over10% of total shares
□ Applicable√ Inapplicable
5. Conditional decrease of shareholding by controlling shareholder, actual controller, reorganizer and other entities
√ Applicable□ Inapplicable
The Company conducted non-public issuance of 32,184,931 A-shares in the report period. Acquirers promised not to transfer the new shares within 12 months upon the issuance date.
China Fangda Group Co., Ltd. 2016 Annual Report Chapter 7 Preferred Shares
□ Applicable√ Inapplicable
The Company had no preferred share in the report period.
China Fangda Group Co., Ltd. 2016 Annual Report Chapter 8 Particulars about the Directors, Supervisors, Senior Management and Employees
1. Changes in shareholding of Directors, Supervisors and Senior Management
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||||||||Number|||||
|||||||||Increased|Decrease|Other|Number|
||||||||of shares|||||
||||||Starting|End date||shares in|d shares|increase|of shares|
||||||||held at|||||
|Name|Position|Job status|Sex|Age|date of|of the||this|in this|and|held at|
||||||||beginning|||||
||||||the term|term||period|period|decrease|end of the|
||||||||of the|||||
|||||||||(share)|(share)|(share)|period|
||||||||period|||||
||Chairman|||||||||||
|Xiong||||||||||||
||,|In office|M|59|20.11.95|31.03.17|1,259,771||||1,259,771|
|Jianming||||||||||||
||president|||||||||||
||Director,|||||||||||
|Wang||||||||||||
||vice|In office|M|59|20.11.95|31.03.17|36,286||||36,286|
|Shengguo||||||||||||
||president|||||||||||
|Xiong||||||||||||
||Director|In office|M|48|16.04.99|31.03.17||||||
|Jianwei||||||||||||
|Zhou||||||||||||
||Director|In office|M|54|09.04.07|31.03.17||||||
|Zhigang||||||||||||
||Secretary|||||||||||
|Zhou||||||||||||
||of the|In office|M|54|22.10.03|31.03.17||||||
|Zhigang||||||||||||
||Board|||||||||||
||Independ|||||||||||
|Guo||||||||||||
||ent|In office|M|51|31.03.14|31.03.17||||||
|Wanda||||||||||||
||director|||||||||||
||Independ|||||||||||
|Lin Bin|ent|In office|M|54|31.03.14|31.03.17||||||
||director|||||||||||
||Independ|||||||||||
|Deng Lei|ent|In office|M|38|16.02.16|31.03.17||||||
||director|||||||||||
||Superviso|||||||||||
||ry|||||||||||
|Zhen Hua|Committe|In office|F|57|27.05.05|31.03.17||||||
||e meeting|||||||||||
||convener|||||||||||

China Fangda Group Co., Ltd. 2016 Annual Report
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|Yin|Superviso|||||||||||
|||In office|M|48|31.03.14|31.03.17||||||
|Changjian|r|||||||||||
|Zen|Superviso|||||||||||
|||In office|M|47|31.03.14|31.03.17||||||
|Xiaowu|r|||||||||||
||Vice|||||||||||
|Lin Kebin|president|In office|M|39|06.06.08|31.03.17||||||
||and CFO|||||||||||
|Wei|Vice|||||||||||
|||In office|M|48|29.07.11|31.03.17||||||
|Yuexing|president|||||||||||
||Independ|||||||||||
|Huang||||||||||||
||ent|Resigned|M|54|25.03.11|16.02.16||||||
|Yaying||||||||||||
||director|||||||||||
|Total|--|--|--|--|--|--|1,296,057|0|0|0|1,296,057|

 2. Changes in the Directors, Supervisors and Senior Executives
||||||
|-|-|-|-|-|
|Name|Job|Type|Date|Reason|
||Independent||||
|Huang Yaying||Resigned|16.02.16|Huang Yaying has resigned due to person reasons|
||director||||

3. Office Description
Professional background, work experience and main duties in the Company of existing directors, supervisors and senior management Mr. Xiong Jianming: PHD Management; senior engineer; part-time professor of Beijing Institute of Civil Engineering and
Architecture and Nanchang University. He was once employed by Jiangxi Provincial Machinery Design Academe, Administration Bureau of Shekou District of Shenzhen government, etc, deputy to the 10thPeople’s Congress of Guangdong Province, deputy to the 2nd and 3rdPeople’s Congress of Shenzhen City. He is now the chairman and CEO of the Company, representative of 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.
Mr. Wang Shengguo: Master degree; Visiting Scholar from University of Essen, senior engineer.He once held such positions as Chief Engineer of Design Institute of the 2nd Heavy Machinery factory of Machinery Industrial Ministry. Mr. Wang is now a Director and Vice President of the Company.
Mr. Xiong Jianwei: MBA. He is a director of the Company and chairman of the board of directors of Fangda Jianke.
Mr. Zhou Zhigang,bachelor’s degree. He is currently a Director, Secretary of Board, and head of the Securities Dept and HR Dept. Mr. Guo Wanda: He is an Economics Ph. D and researcher. As the executive deputy president of China Development Institute, he has studied in macro-economy, industry policies and enterprise development strategies for years and provided consulting services. He is an independent director of the Company.
Lin Bin is an economics (accounting) Ph. D. He is a professor of the Accounting Department of the Management School of Sun
Yat-Sen University, director of the Enterprise and Non-Profit Organization Research Center of Sun Yat-Sen University, and was
once the director of the Accounting Department of Sun Yat-Sen University and MPACC Education Center. He is a member of the
consultant panel of the enterprise internal control standard committee of the Ministry of Finance, deputy president of Guangdong
China Fangda Group Co., Ltd. 2016 Annual Report Auditor Society, vice president of the Guangdong Internal Auditor Association, and independent director of the company.
Mr. Deng Lei is a law Ph. D and post-doctor in the financial securities law of Shenzhen Stock Exchange. He was once the vice director of Corporate Law Affair Commission of Shenzhen Lawyer Association and a senior partner of Guangdong China
Commercial Law Firm.
Ms. Zhenghua holds abachelor’s degree and is the convener of supervisory meetings of the Company.
Yin Changjian holds bachelor's degree and is a CPA. He was once the vice general manager of the Beijing branch of Fangda Jianke and is the deputy director of theCompany’s Supervisory Dept and staff representative supervisor.
Zeng Xiaowu holds a master's degree and is a senior engineer. He was once the vice general manager of Fangda Jianke, president of the design institute. He is now the chief engineer of Fangda Jianke and supervisor of the Company.
Mr. Lin Kebin holds abachelor’s degree. At presenthe’s the Vice President and CFO of the Company.
Mr. Wei Yuexing holds a Bachelor degree and is a senior engineer. He is the vice president of the Company and general manager of Fangda Jianke.
Offices held at shareholders entities
√ Applicable□ Inapplicable
|||||||
|-|-|-|-|-|-|
||||||Whether any|
||||Starting date of|End date of the|remuneration is|
|Name|Shareholder entity|Office||||
||||the term|term|paid at the|
||||||shareholder entity|
|Xiong Jianming|Shengjiu Investment Ltd.|Chairman|06.10.11||No|
|Wang||||||
||Shenzhen Shilihe Investment Co., Ltd.|Chairman|19.10.06||No|
|Shengguo||||||
|Wang||General||||
||Shenzhen Shilihe Investment Co., Ltd.||29.09.03||No|
|Shengguo||manager||||
|Xiong Jianwei|Shenzhen Shilihe Investment Co., Ltd.|Director|12.06.01||No|
|Zhou Zhigang|Shenzhen Shilihe Investment Co., Ltd.|Director|19.10.06||No|
|Zhen Hua|Shenzhen Shilihe Investment Co., Ltd.|Supervisor|19.10.06||No|
|Office||||||
||None|||||
|description||||||

Offices held at other entities
√ Applicable□ Inapplicable
|||||||
|-|-|-|-|-|-|
||||||Whether any|
||||Starting date ofthe term|End date of the|remuneration is|
|Name|Entity name|Office||||
|||||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||||
|||Independentdirector||||
|Guo Wanda|Shenzhen Hercules Logistics Incorporated||01.03.2013||Yes|

China Fangda Group Co., Ltd. 2016 Annual Report
|||||||
|-|-|-|-|-|-|
||Management School of Sun Yat-Sen|||||
|Lin Bin||Professor|01.10.98||Yes|
||University|||||
||Guangzhou Baiyun International Airport|Independent||||
|Lin Bin|||27.06.13|06.12.16|Yes|
||Company Limited|director||||
|||Independent||||
|Lin Bin|Guangzhou Pearl River Beer Co., Ltd.||19.06.12||Yes|
|||director||||
|Deng Lei|Guangdong China Commercial Law Firm|Senior partner|01.11.15||Yes|
|||Independent||||
|Deng Lei|Guangdong Chaohua Technology Co., Ltd.||11.11.15||Yes|
|||director||||
|||Independent||||
|Deng Lei|Wuhan Gaode Infrared Co., Ltd.||23.04.15||Yes|
|||director||||
|||Independent||||
|Deng Lei|Shenzhen Haimingrun Industrial Co., Ltd.||18.11.14||Yes|
|||director||||
|Office||||||
||The above-mentioned three are independent directors of the Company.|||||
|description||||||

Penalties given by existing securities regulators on directors, supervisors and senior management and those who have resigned in the report period
□ Applicable√ Inapplicable
4. Remunerations of the Directors, Supervisors and Senior Executives
Decision making procedures, basis and actual payment of remunerations of the Directors, Supervisors and Senior Executives 1. Remuneration schemes for directors and supervisors are proposed by the Remuneration and Assessment Committee of the Board, and implemented upon approval of the Board and theShareholders’ Meetings; the remuneration schemes for executives are approved and implemented by the Board.
Remuneration for directors and supervisors are decided by theshareholders’ meeting. Remunerations for executives are composed of wages and performance bonus as decided by the Board.
Payment on monthly basis
Remunerations of the Directors, Supervisors and Senior Executives of the Company During the reporting period
In RMB10,000
||||||||
|-|-|-|-|-|-|-|
|||||||Remuneration|
||||||Total||
|Name|Position|Sex|Age|Job status||from related|
||||||remuneration||
|||||||parties|
||Chairman,||||||
|Xiong Jianming||M|59|In office|178.9|No|
||president||||||
||Director, vice||||||
|Wang Shengguo||M|59|In office|94.04|No|
||president||||||
|Xiong Jianwei|Director|M|48|In office|95.25|No|
||Director,||||||
|Zhou Zhigang||M|54|In office|68.69|No|
||secretary of the||||||

China Fangda Group Co., Ltd. 2016 Annual Report
||||||||
|-|-|-|-|-|-|-|
||Board||||||
||Independent||||||
|Deng Lei||M|38|In office|7|No|
||director||||||
||Independent||||||
|Huang Yaying||M|54|Resigned|1|No|
||director||||||
||Independent||||||
|Guo Wanda||M|51|In office|8|No|
||director||||||
||Independent||||||
|Lin Bin||M|54|In office|8|No|
||director||||||
||Supervisory||||||
|Zhen Hua|Committee|F|57|In office|3|No|
||meeting convener||||||
|Yin Changjian|Supervisor|M|48|In office|31.9|No|
|Zen Xiaowu|Supervisor|M|47|In office|55.86|No|
||Vice president||||||
|Lin Kebin||M|39|In office|78.28|No|
||and CFO||||||
|Wei Yuexing|Vice president|M|48|In office|91.55|No|
|Total|--|--|--|--|721.47|--|

 Equity incentive programs provided for the Directors, and Senior Executives of the Company during the reporting period
□ Applicable√ Inapplicable
5. Employees
1. Staff number, professional composition and education
|||
|-|-|
|Staff number of the parent|67|
|Staff number of major subsidiaries|1,468|
|Total staff number|2,349|
|Number of employees receiving remuneration in the period|2,349|
|Resigned and retired staff number to whom the parent and major||
||0|
|subsidiaries need to pay remuneration||
|Professional composition||
|Categories of professions|Number of people|
|Production|858|
|Sales & Marketing|94|
|Technicians|1,266|
|Finance & Accounting|69|
|Executive|62|

China Fangda Group Co., Ltd. 2016 Annual Report
|||
|-|-|
|Total|2,349|
|Education||
|Categories of education|Number of people|
|High school or below|1,153|
|College diploma|396|
|Bachelor|774|
|Master’s degree|25|
|Doctor’s degree|1|
|Total|2,349|

2. Remuneration policy
Staff remuneration policy: TheCompany’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 theCompany’s business operation and changes in the local standard of living and price index.
3. Training program
Staff training plan: The Company has paid continuous attention to training and development of the staff and introduces innovative learning as part of the long-term strategy. We provide training programs through different channels and in different fields for different employees will help them fulfill their works, including new staff training, on-the-job training, operation and management training programs. These programs have largely elevated capabilities of the staff and underpin the success of the Company. 4. Labor outsourcing
√ Applicable□ Inapplicable
|||
|-|-|
|Total number of hours of labor outsourcing|11,077,939.28|
|Total remuneration paid for labor outsourcing (RMB)|332,338,178.35|

China Fangda Group Co., Ltd. 2016 Annual Report Chapter 9 Corporation Governance
1. Overview
During the report period, the Company strictly complied with the Company Law, Securities Law, Governance Standards for Listed Companies, Shenzhen Stock Exchange Share Listing Rules, Operation Regulations for Listed Companies in the Main Board of Shenzhen Stock Exchange, continued to improve the legal person governance structure and has formulated a series of internal management systems covering various aspects. The Company has set up a comprehensive and effective internal control system in important decision making, related transaction decision making, financial management, HR management, administration, purchase, production and sales management, confidentiality and information disclosure.
Major difference between the actual corporate governance and regulations on corporate governance of listed companies issued by CSRC
□ Yes√ No
There is no major difference between the actual corporate governance and regulations on corporate governance of listed companies issued by CSRC.
2. Independence of the Company from the controlling shareholder in aspects of businesses, personnel, assets, organizations, and accounting
The Company is completely separated from the controlling shareholder in aspects of businesses, personnel, assets, organizations and accounting. The Company has its own completed businesses and capacity of independent business operation.
(1) In the aspect of business: the Company has its own purchasing, production, sales, and customer service system which performing independently. There is not any material related transactions occurred with the controlling shareholders.
(2) In personnel, the labor management, personnel and salary management are operated independently from the controlling shareholder. The senior managements take salaries from the Company and none of them takes senior management position in the controlling party.
(3) In assets, the Company owns its production, supplementary production system and accessory equipment independently, and possesses its own industrial properties, non-patent technologies, and trademark.
(4) In organization, the production and business operation, executive management, and department setting are completely independent from the controlling shareholder. No situation of combined office exists. The Company adjusts its organizing structure only for its own practical requirement of development and management.
(5) In accounting, the company has its own independent accounting and auditing division, established independent and completed accounting system and management rules, has its own bank account, and exercise its liability of taxation independently.
3. Competition
□ Applicable√ Inapplicable
China Fangda Group Co., Ltd. 2016 Annual Report 4. Annual and extraordinary shareholder meetings held during the report period
1. Annual shareholder meeting during the report period
|||||||
|-|-|-|-|-|-|
||||||Index for|
|||Participation of||||
|Meeting|Type||Date|Date of disclosure|information|
|||investors||||
||||||disclosure|
||||||Notice on|
||||||Resolutions of the 1st|
|1st Provisional|Extraordinary|||||
||||||Extraordinary|
|Shareholders’|shareholders’|23.51%|16.02.16|17.02.16||
||||||Shareholders’|
|Meeting 2016|meeting|||||
||||||Meeting in 2016|
||||||(2016-06)|
||||||Notice on|
||||||Resolutions of the|
|2015 Annual|Annual shareholders’||||Annual|
|||33.83%|17.05.16|18.05.16||
|Shareholder Meeting|meeting||||Shareholders’|
||||||Meeting in 2015|
||||||(2016-24)|
||||||Notice on|
||||||Resolutions of the|
|2nd Provisional|Extraordinary|||||
||||||2nd Extraordinary|
|Shareholders’|shareholders’|34.31%|29.09.16|30.09.16||
||||||Shareholders’|
|Meeting 2016|meeting|||||
||||||Meeting in 2016|
||||||(2016-44)|

2. Shareholders of preference shares of which voting right resume convening an extraordinaryshareholders‟ meeting
□ Applicable√ Inapplicable
5. Performance of independent directors during the report period
1. Independentdirectors‟ presenting of board meetings andshareholders‟ meetings in the report period
||||||||
|-|-|-|-|-|-|-|
|Independent directors’ presenting of board meetings|||||||
||Time of board|||||Absent for two|
|Name of independent||Presented|Presented by|Presented by|||
||meetings should||||Absent|consecutive|
|director||personally|telecom|proxy|||
||have attended|||||meetings|
|Guo Wanda|7|2|5|0|0|No|
|Lin Bin|7|2|5|0|0|No|
|Deng Lei|6|1|4|1|0|No|

China Fangda Group Co., Ltd. 2016 Annual Report
||||||||
|-|-|-|-|-|-|-|
|Huang Yaying|1|0|1|0|0|No|
|Time of presence by independent|||||||
|||5|||||
|directors at shareholders’ meetings|||||||

Statement for absence for two consecutive board meetings
None
2. Objection raised by independent directors
Any objection raised by independent directors against theCompany’s related issues
□ Yes√ No
Independent directors made no objection on related issued of the Company in the report period.
3. Other statement for performance of independent directors
Adoption of suggestion proposed by independent directors
√ Yes□ No
Statement for suggestion adopted or not by the Company
6. Performance of specific committees under the Board
(1) Performance of the Development Strategy Committee
During the report period, the Development Strategy Committee of the Company has performed its duties in accordance with the Working Regulations for Development Strategy Committee and played its role in the decision-making process of the Company. Two meetings were convened and details are disclosed as follows:
1. On 22.04.16, the Company held the 7th meeting of the 7th Development Strategy Commission to listen to the report on production and operation and production and operation plan for 2016.
2. On 29.07.16, the 5th meeting of the Development Strategy Committee of the 7th term of the Board was held to view theCompany’s production and operation in the first half of 2016 and studied the fulfillment of the business plan in the first half of the year and places to be improved in the second half.
(2) Performance of the Auditing Committee
During the report period, four Auditing Committee meetings are held to review issues including the arrangement of audit, regular financial reports, engaging the CFA, and use of the fund raised. Details of the meetings are disclosed as follows:
1. On 18.04.16, the 9th meeting of the Auditing Committee of the 7th term of the Board was held to review the financial
statements with the initial opinion issued by the CFA for 2015 and approve the auditor report issued by the CFA. After the CFA issued to finalauditor’s opinion, the Auditing Committee submitted the resolution on the annual financial statements to the Board and issued the summary report on the auditing of the CFA for this year.
2. On 22.04.16, the Company held the 10th audit committee meeting of the 7th Board of Directors to listen to the 2015 financial and internal audit report and approved (1) audited 2015 financial statements; (2) 2016 Q1 financial statements; (3) proposal of engaging the auditor in 2016; (4) 2016 internal audit plan; (5) internal control self-evaluation report in 2015.
The audit committee suggests that the internal audit body should increase communication with the audit committee to help the
committee better under the Company's condition and make higher requirements on the audit quality. 3. On 29.07.16, the 11th meeting
of the Auditing Committee of the 7th term of the Board on which the unaudited interim financial statements for 2016 were approved.
China Fangda Group Co., Ltd. 2016 Annual Report 4. On 21.10.16, the 12th meeting of the Auditing Committee of the 7th term of the Board was held, on which (1) the 2016 Q3 financial statements; (2) investigation report for the use of raised fund in the 2016 Q3 was reviewed.
(3) Performance of the Remuneration and Assessment Committee
During the report period, the Remuneration and Assessment Committee issued the Working Regulations for Remuneration and Assessment Committee. On the 2nd meeting of the Remuneration and Assessment Committee of the 7th term of the Board held on 22.04.16, the committee reviewed the main financial indicators and business performance in 2015 and reviewed performance of duties by theCompany’s directors and senior executives. The committee believes that the directors and senior executives have worked diligently and fulfilled the business target and other tasks in 2015. The remunerations for directors, supervisors and senior executives disclosed in the 2015 annual report comply with theCompany’s remuneration policy.
7. Performance of Supervisory Committee
(1) Risks for the Company discovered by the Supervisory Committee
□ Yes√ No
No disagreement with supervisory issues by the Supervisory Committee during the report period.
(2) The SupervisoryCommittee’ Work Report 2016
In 2016, the Supervisory Committee performed its duties and obligations in supervision and protectshareholders’ and theCompany’s interests in accordance with the Company Law, Share Listing Rules, Articles of Association and Rules of the Procedure of the Supervisory Committee. The 2016 supervisory committee's work plan is as follows:
1. Opinions
(1) Legal compliance
In the report period, the Company has been operated in accordance with law. The convening of meeting of the Board and the decision-making process are compliant with law, regulations and Articles of Association; the internal control system is solid. Directors and senior management have performed their obligations. No violation against law, regulations, Articles of Association and interests of the Company and shareholders was discovered.
(2) Financial condition
During the period, the accounting management has been compliant with the Accounting Law, Enterprise Accounting Standard. No false, misleading statement or significant omission was found in financial statements. The financial reports of the Company reflect theCompany’s financial position, operation performance, cash flows and major risks truthfully, accurately and completely. The CPA has issued the standardauditor’s report in 2016, which is objective, fair and truthful. It reflects theCompany’s financial position and operation performance.
(3) Implementation of internal control
The design and operation of the internal control is effective and meets theCompany’s management and development requirements. It can ensure the truthfulness, lawfulness, completeness of the financial materials and ensure the safety and completeness of theCompany’s property. In 2016, there was no violation by the Company against the Operation Regulations for Listed Companies in the Main Board of Shenzhen Stock Exchange and theCompany’s internal control system. The 2016 Internal Control Self-evaluation Report truthfully and objectively reflects the establishment, implementation and improvement of theCompany’s internal control system. There are no significant or important problems in the financial and non-financial reports in the report period.
2. Meetings and resolutions of the supervisory meeting in the report period:
Three meetings were held in 2016, two of which are on-site meetings, one is voting through telecommunication. All proposals
were approved and disclosed as required:
||||||
|-|-|-|-|-|
|No.|Meeting|Date|Convening method|Topic|

China Fangda Group Co., Ltd. 2016 Annual Report 1. Reviewing theCompany’s 2015 SupervisoryCommittee’s Work Report;
2. Reviewing theCompany’s 2015 Annual Report and Summary; 3. Reviewing theCompany’s 2015 Financial Settlement Report; 12th meeting
4. Reviewing theCompany’s Proposal of Profit Distribution in 2015; of the 7th
1 22.04.16 On-site 5. Reviewing theCompany’s Proposal of Engaging Auditor for 2016; Supervisory
6. Reviewing the Proposal of Modifying the Rules of the Procedure of Committee
the Supervisory Committee;
7. Reviewing theCompany’s 2015 Internal Control Self-evaluation Report;
8. Reviewing theCompany’s 2016 Q1 Report;
||||||
|-|-|-|-|-|
|2|13th meetingof the 7thSupervisoryCommittee|29.07.16|On-site|1. Reviewing the 2016 Interim Report and Summary;2. Reviewing the Proposal of Exchanging the Raised Fund withPre-invested Self-owned Fund;|
|3|14th meetingof the 7thSupervisoryCommittee|21.10.16|Telecommunication|2016 Q3 Report and Text;|

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 seniorexecutives’ innovation capabilities, general quality, performance, fulfillment of profit and payment collection targets in the Implementation Regulations for 2016 Supervisory and Management Department Target
Management and Assessment and Implementation Regulations for 2016 Subordinate Unit Assessment.
9. Internal control
1. Major problems in internal control discovered in the report period
□ Yes√ No
2. Internal control self-evaluation report
|||
|-|-|
|Date of disclosure of the internal control||
||21.03.17|
|evaluation report||
|Disclosure of the internal control||
||www.cninfo.com.cn|
|evaluation report||
|Percentage of assets in the evaluation||
|scope in the total assets in the consolidated|95.23%|
|financial statements||

China Fangda Group Co., Ltd. 2016 Annual Report
||||
|-|-|-|
|Percentage of operation income in the|||
|evaluation scope in the total operation|||
||99.16%||
|income in the consolidated financial|||
|statements|||
|Standard|||
|Type|Financial report|Non-financial report|
|||I. The following condition indicates|
||1. The following problems are considered|significant problems in the internal|
||major problems: 1. Non-effective control|control of non-financial reports: I.|
||environment; 2. corrupt practice by directors,|Serious violation against national laws,|
||supervisor and senior management, causing|regulations or specifications; 2. Serious|
||substantial loss and impacts for the|business system problems and system|
||Company; 3. Substantial mistakes in the|ineffectiveness; 3. Major or important|
||financial statements in the period discovered|problems cannot be corrected; 4. Lack of|
||by the CPA, which are not discovered by the|internal control and poor management; 5.|
||internal control; 4. Ineffective supervision of|Loss of management personnel or key|
||the internal control by the Company’s|employees; 6. Safety and environmental|
||auditing department2. The following|accidents that cause major adverse|
||problems are considered significant|impacts; 7. Other situations that cause|
|Standard|problems: 1 accounting policies are selected|major adverse impacts on the Company.|
||and used without complying to widely|II. The following situations indicate that|
||accepted accounting standards; 2. No|there may be significant problems with|
||anti-corrupt and important balance system|the internal control: 1. business system|
||and control measures are taken; 3. Separate|problems and system ineffectiveness; 2.|
||or multiple problems in the preparation of|Major or important problems cannot be|
||financial reports, which are serious enough|corrected; 3. Other situations that cause|
||to affecting the truthfulness and accuracy of|major adverse impacts on the|
||the reports; no control system is established|CompanyIII. The following situation|
||and no related compensation system is|indicates likely normal problems in the|
||implemented for accounts of irregular or|internal control: 1. Problems in the|
||special transactions3. Other problems are|general business system; 2. Normal|
||considered normal problems.|problems in the internal control|
|||supervision cannot be correctly promptly.|
||I. Significant problem: 1 mistakes affecting||
||5% and more of the pre-tax profit and more||
||than RMB5 million in the consolidated||
||statements; 2. Mistakes affecting 5% and||
|||See the recognition standard of the|
||more of the consolidated assets and more||
|Standard||internal control problems for financial|
||than RMB5 millionII. Important problem: 1.||
|||statements|
||Mistakes affecting 1%-5% of the pre-tax||
||profit in the consolidated statements; 2.||
||Mistakes affecting 1%-5% the consolidated||
||assets. III. Normal problem: 1. Mistakes||

China Fangda Group Co., Ltd. 2016 Annual Report
|||
|-|-|
||affecting less than 1% of the pre-tax profit|
||and total assets of the consolidate statements.|
|Significant problems in financial||
||0|
|statements||
|Significant problems in non-financial||
||0|
|statements||
|Important problems in financial statements|0|
|Important problems in non-financial||
||0|
|statements||

10. Internal control audit report
√ Applicable□ Inapplicable
|||
|-|-|
|Comments in the internal control audit report||
|We believe that China Fangda Group has maintained effective internal control on financial reports according to Basic Regulations||
|on Enterprise Internal Control and related regulations on 31.12.16.||
|Disclosure of internal auditor’s||
||Disclosed|
|report||
|Date of disclosure of the internal||
||21.03.17|
|control audit report||
|Source of disclosure of the internal||
||www.cninfo.com.cn|
|control audit report||
|Opinion type|Standard opinion auditor’s report|
|Problems in non-financial||
||No|
|statements||

Non-standard internal control audit report by the CFA
□ Yes√ No
Consistency between the internal control audit report and self-evaluation report
√ Yes□ No
China Fangda Group Co., Ltd. 2016 Annual Report Chapter 10 Information about theCompany‟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
China Fangda Group Co., Ltd. 2016 Annual Report Chapter 11 Financial Statements
1.Auditor„s report
|||
|-|-|
|Type|Standard opinion auditor’s report|
|Issued on|17.03.17|
|Auditor|Grant Thornton (limited liability partnership)|
|Report No.|Grant Thornton (2017) No.350ZA0066|
|CPA names|Xie Peiren, Hu Gaosheng|

Auditor‟s report
Grant Thornton (2017) No.350ZA0066 To the shareholders of China Fangda Group Co., Ltd.:
We have audited the Financial Statements of China Fangda Group Co., Ltd.(―FangdaGroup‖) attached hereafter, including the Balance Sheet and Consolidated Balance Sheet ended 31.12.16 and the Income Statement, Consolidated Income Statement, Cash Flow Statement, Consolidated Cash Flow Statement, Statement on Change ofShareholders’ Equity, Consolidated Statement on Change ofShareholders’ Equity of the year 2016, as well as the Notes to the Financial Statements.
1.Executives‟ responsibilities on the Financial Statements
Preparing of the Financial Statements according to Enterprise Accounting Standard is the responsibility of the management of the Company. This responsibility includes: (1) to prepare the financial statements according to the accounting standard, and ensure its fair reflection of business position; (2) to design, implement and maintain the internal control system related to producing of the Financial Statements, to prevent the Financial Statements from major false presentation due to cheating or error.
2. Responsibilities of the CPA
Our responsibility is to express an auditing opinion on the financial statements basing on our audit. We carried out the auditing works with compliance to Chinese CPA Auditing Standard, which requires us to plan and implement our works on the basis of professional ethic standards, and obtain reasonable guarantee that the Financial Statements are free of major false statements. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on theauditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider the internal control relevant to theentity’s preparation of financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting polices used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. 3.Auditors‟ Opinions
We believe that Fangda Group has been following with the Enterprise Accounting Standard in preparing of the Financial
Statements. The Financial Statements is reflecting, in all important aspects, the financial situation of Fangda Group as of 31.12.16,
and the business performance and cash flow of year 2016.
China Fangda Group Co., Ltd. 2016 Annual Report Grand Thornton CPA CPA China Xie Peiren
(limited liability partnership)
CPA China Hu Gaosheng
Beijing, China March 17, 2017
2. Financial statements
Unit for statements in notes to financial statements: RMB yuan
1. Consolidated Balance Sheet
Prepared by: China Fangda Group Co., Ltd.
31.12.16
In RMB
||||
|-|-|-|
|Items|Closing balance|Opening balance|
|Current asset:|||
|Monetary capital|1,095,229,837.90|400,953,337.32|
|Settlement provision|||
|Outgoing call loan|||
|Financial assets measured at fair|||
|value with variations accounted into||14,546,206.58|
|current income account|||
|Derivative financial assets|2,232,200.00||
|Notes receivable|18,898,106.11|97,247,660.56|
|Account receivable|2,342,929,628.14|1,405,718,134.89|
|Prepayment|31,526,326.25|30,057,063.90|
|Insurance receivable|||
|Reinsurance receivable|||
|Provisions of Reinsurance|||
|contracts receivable|||
|Interest receivable|302,950.68||
|Dividend receivable|||
|Other receivables|57,378,994.72|53,095,948.46|
|Repurchasing of financial assets|||

China Fangda Group Co., Ltd. 2016 Annual Report
||||
|-|-|-|
|Inventory|1,990,621,059.27|1,346,591,303.53|
|Assets held for sales|||
|Non-current assets due in 1 year|||
|Other current assets|62,206,574.33|11,395,718.05|
|Total current assets|5,601,325,677.40|3,359,605,373.29|
|Non-current assets:|||
|Loan and advancement provided|||
|Sellable financial assets|28,562,575.67||
|Investment held until mature|||
|Long-term receivable|||
|Long-term share equity investment|12,105,030.68|10,489,680.93|
|Investment real estate|333,795,631.30|335,328,805.74|
|Fixed assets|506,819,266.38|462,648,998.51|
|Construction in process|2,537,725.36|15,134,390.90|
|Engineering materials|||
|Disposal of fixed assets||5,326.79|
|Productive biological assets|||
|Gas & petrol|||
|Intangible assets|60,228,652.69|95,062,982.48|
|R&D expense|||
|Goodwill||19,826,696.97|
|Long-term amortizable expenses|3,695,766.33|6,614,788.88|
|Deferred income tax assets|176,796,698.56|65,926,810.52|
|Other non-current assets|61,184,253.71|93,503,956.39|
|Total of non-current assets|1,185,725,600.68|1,104,542,438.11|
|Total of assets|6,787,051,278.08|4,464,147,811.40|
|Current liabilities|||
|Short-term loans|591,000,000.00|1,147,957,775.82|
|Loans from Central Bank|||
|Deposit received and held for|||
|others|||
|Call loan received|||
|Financial liabilities measured at|||
|fair value with variations accounted into|||
|current income account|||

China Fangda Group Co., Ltd. 2016 Annual Report
||||
|-|-|-|
|Derivative financial liabilities|||
|Notes payable|557,301,320.45|303,527,639.63|
|Account payable|1,275,255,961.34|867,628,355.65|
|Prepayment received|285,905,444.13|130,574,319.85|
|Selling of repurchased financial|||
|assets|||
|Fees and commissions payable|||
|Employees’ wage payable|41,972,342.66|40,942,428.05|
|Taxes payable|192,236,574.40|67,533,433.70|
|Interest payable|2,634,979.47|3,241,834.43|
|Dividend payable|||
|Other payables|366,182,799.41|82,677,346.81|
|Reinsurance fee payable|||
|Insurance contract provision|||
|Entrusted trading of securities|||
|Entrusted selling of securities|||
|Liabilities held for sales|||
|Non-current liabilities due in 1|||
|year|||
|Other current liabilities|35,148,084.44|98,425,600.00|
|Total current liabilities|3,347,637,506.30|2,742,508,733.94|
|Non-current liabilities:|||
|Long-term loans|922,169,568.24|300,395,582.06|
|Bond payable|||
|Including: preferred stock|||
|Perpetual bond|||
|Long-term payable|||
|Long-term employees’ wage|||
|payable|||
|Special payables|||
|Anticipated liabilities|3,156,625.24|1,921,446.51|
|Deferred earning|11,567,224.78|12,284,195.68|
|Deferred income tax liabilities|200,207,003.35|72,994,768.34|
|Other non-current liabilities|||
|Total of non-current liabilities|1,137,100,421.61|387,595,992.59|

China Fangda Group Co., Ltd. 2016 Annual Report
||||
|-|-|-|
|Total liabilities|4,484,737,927.91|3,130,104,726.53|
|Owner’s equity:|||
|Share capital|789,094,836.00|756,909,905.00|
|Other equity tools|||
|Including: preferred stock|||
|Perpetual bond|||
|Capital reserves|467,376,902.96|79,099,619.14|
|Less: Shares in stock|||
|Other miscellaneous income|2,130,454.52|91,831.63|
|Special reserves|||
|Surplus reserves|88,839,790.50|51,123,554.51|
|Common risk provisions|||
|Retained profit|1,016,820,576.30|432,271,424.56|
|Total of owner’s equity belong to the|||
||2,364,262,560.28|1,319,496,334.84|
|parent company|||
|Minor shareholders’ equity|-61,949,210.11|14,546,750.03|
|Total of owners’ equity|2,302,313,350.17|1,334,043,084.87|
|Total of liabilities and owner’s interest|6,787,051,278.08|4,464,147,811.40|

 Legal representative: Xiong Jianming CFO: Lin Kebing Accounting Manager: Chen Yonggang
2. Balance Sheet of the Parent Company
In RMB
||||
|-|-|-|
|Items|Closing balance|Opening balance|
|Current asset:|||
|Monetary capital|81,148,314.87|25,833,130.83|
|Financial assets measured at fair|||
|value with variations accounted into|||
|current income account|||
|Derivative financial assets|||
|Notes receivable|||
|Account receivable|454,140.85|345,960.74|
|Prepayment|110,132.27|67,893.61|
|Interest receivable|||
|Dividend receivable|430,000,000.00||

China Fangda Group Co., Ltd. 2016 Annual Report
||||
|-|-|-|
|Other receivables|459,354,983.42|375,591,349.76|
|Inventory|||
|Assets held for sales|||
|Non-current assets due in 1 year|||
|Other current assets|334,228.97|990,624.25|
|Total current assets|971,401,800.38|402,828,959.19|
|Non-current assets:|||
|Sellable financial assets|28,562,575.67||
|Investment held until mature|||
|Long-term receivable|||
|Long-term share equity investment|897,444,525.03|967,700,649.13|
|Investment real estate|296,740,660.63|290,288,531.53|
|Fixed assets|55,081,689.15|57,647,245.73|
|Construction in process|||
|Engineering materials|||
|Disposal of fixed assets|||
|Productive biological assets|||
|Gas & petrol|||
|Intangible assets|1,531,179.93|1,907,601.33|
|R&D expense|||
|Goodwill|||
|Long-term amortizable expenses|252,857.40|403,800.10|
|Deferred income tax assets|57,076,777.66|37,948,384.39|
|Other non-current assets|120,000,000.00|220,000,000.00|
|Total of non-current assets|1,456,690,265.47|1,575,896,212.21|
|Total of assets|2,428,092,065.85|1,978,725,171.40|
|Current liabilities|||
|Short-term loans|190,000,000.00|350,000,000.00|
|Financial liabilities measured at|||
|fair value with variations accounted into|||
|current income account|||
|Derivative financial liabilities|||
|Notes payable|33,692,909.97||
|Account payable|606,941.85|606,941.85|
|Prepayment received|965,234.08|748,421.47|

China Fangda Group Co., Ltd. 2016 Annual Report
||||
|-|-|-|
|Employees’ wage payable|2,338,896.51|1,868,710.30|
|Taxes payable|460,424.30|1,338,421.09|
|Interest payable|288,513.75|726,993.55|
|Dividend payable|||
|Other payables|65,436,929.77|155,183,721.49|
|Liabilities held for sales|||
|Non-current liabilities due in 1|||
|year|||
|Other current liabilities||98,425,600.00|
|Total current liabilities|293,789,850.23|608,898,809.75|
|Non-current liabilities:|||
|Long-term loans|||
|Bond payable|||
|Including: preferred stock|||
|Perpetual bond|||
|Long-term payable|||
|Long-term employees’ wage|||
|payable|||
|Special payables|||
|Anticipated liabilities|||
|Deferred earning|||
|Deferred income tax liabilities|124,088,349.06|120,953,378.63|
|Other non-current liabilities|||
|Total of non-current liabilities|124,088,349.06|120,953,378.63|
|Total liabilities|417,878,199.29|729,852,188.38|
|Owner’s equity:|||
|Share capital|789,094,836.00|756,909,905.00|
|Other equity tools|||
|Including: preferred stock|||
|Perpetual bond|||
|Capital reserves|466,283,546.89|38,598,963.76|
|Less: Shares in stock|||
|Other miscellaneous income|91,831.63|91,831.63|
|Special reserves|||
|Surplus reserves|88,839,790.50|51,123,554.51|

China Fangda Group Co., Ltd. 2016 Annual Report
||||
|-|-|-|
|Retained profit|665,903,861.54|402,148,728.12|
|Total of owners’ equity|2,010,213,866.56|1,248,872,983.02|
|Total of liabilities and owner’s interest|2,428,092,065.85|1,978,725,171.40|

 3. Consolidated Income Statement
In RMB
||||
|-|-|-|
|Items|Amount occurred in the current period|Occurred in previous period|
|1. Total revenue|4,203,866,173.72|2,550,467,494.78|
|Incl. Business income|4,203,866,173.72|2,550,467,494.78|
|Interest income|||
|Insurance fee earned|||
|Fee and commission|||
|received|||
|2. Total business cost|3,433,363,681.99|2,548,503,653.53|
|Incl. Business cost|2,595,170,483.35|2,171,524,200.35|
|Interest expense|||
|Fee and commission paid|||
|Insurance discharge payment|||
|Net claim amount paid|||
|Net insurance policy|||
|reserves provided|||
|Insurance policy dividend|||
|paid|||
|Reinsurance expenses|||
|Taxes and surcharges|380,834,706.42|33,616,556.60|
|Sales expense|59,273,046.14|75,264,951.18|
|Administrative expense|171,922,091.39|167,405,776.25|
|Financial expenses|28,255,397.43|50,672,490.05|
|Asset impairment loss|197,907,957.26|50,019,679.10|
|Plus: gains from change of fair value|||
||16,862,823.13|89,746,065.58|
|(―-― for loss)|||
|Investment gains (―-― for loss)|61,228,848.36|280,949.87|
|Incl. Investment gains from|||
||-1,384,650.25|-358,979.50|
|affiliates and joint ventures|||
|Exchange gains (―-― for loss)|||

China Fangda Group Co., Ltd. 2016 Annual Report
||||
|-|-|-|
|3. Operational profit (―-― for loss)|848,594,163.22|91,990,856.70|
|Plus: non-operational income|18,327,500.52|29,668,110.25|
|Incl. Loss from disposal of|||
||110,009.46|51,130.66|
|non-current assets|||
|Less: non-operational expenditure|6,945,905.31|18,233,740.07|
|Incl. Loss from disposal of|||
||2,565,237.38|574,079.38|
|non-current assets|||
|4. Gross profit (―-― for loss)|859,975,758.43|103,425,226.88|
|Less: Income tax expenses|203,985,326.44|35,209,871.61|
|5. Net profit (―-― for net loss)|655,990,431.99|68,215,355.27|
|Net profit attributable to the owners|||
||697,956,378.23|107,272,369.77|
|of parent company|||
|Minor shareholders’ equity|-41,965,946.24|-39,057,014.50|
|6. After-tax net amount of other misc.|||
||2,038,622.89||
|incomes|||
|After-tax net amount of other misc.|||
||2,038,622.89||
|incomes attributed to parent's owner|||
|(1) Other misc. incomes that cannot|||
|be re-classified into gain and loss|||
|1. Change in net liabilities or|||
|assets due to re-measurement set benefit|||
|program|||
|2. Shares enjoyed in other|||
|misc. incomes that cannot be reclassified|||
|into gain and loss by the invested entity|||
|under the equity law|||
|(2) Other misc. incomes that will be|||
||2,038,622.89||
|re-classified into gain and loss|||
|1. Shares enjoyed in other|||
|misc. incomes that cannot be reclassified|||
|into gain and loss by the invested entity|||
|under the equity law|||
|2．Change in the fair value of|||
|financial asset for sale|||
|3 Held-to-mature investment|||
|reclassified as gain and loss in the|||
|financial assets for sales|||
|4. Effective part in the gain|1,840,142.79||

China Fangda Group Co., Ltd. 2016 Annual Report
||||
|-|-|-|
|and loss of arbitrage of cash flow|||
|5. Translation difference of|198,480.10||
|foreign exchange statement|||
|6. Others|||
|After-tax net of other misc. income|||
|attributed to minority shareholders|||
|7. Total of misc. incomes|658,029,054.88|68,215,355.27|
|Total of misc. incomes attributable|699,995,001.12||
|||107,272,369.77|
|to the owners of the parent company|||
|Total misc gains attributable to the|-41,965,946.24||
|||-39,057,014.50|
|minor shareholders|||
|8. Earnings per share:|||
|(1) Basic earnings per share|0.91|0.14|
|(2) Diluted earnings per share|0.91|0.14|

 Net profit contributed by entities merged under common control in the report period was RMB0.00, net profit realized by parties merged during the previous period is RMB0.00.
Legal representative: Xiong Jianming CFO: Lin Kebing Accounting Manager: Chen Yonggang
4. Income Statement of the Parent Company
In RMB
||||
|-|-|-|
|Items|Amount occurred in the current period|Occurred in previous period|
|1. Turnover|34,208,627.97|29,977,446.65|
|Less: Operation cost|8,308,449.63|3,788,422.31|
|Taxes and surcharges|2,093,529.75|3,182,704.86|
|Sales expense|||
|Administrative expense|24,802,740.83|25,503,319.50|
|Financial expenses|7,625,177.79|10,990,269.77|
|Asset impairment loss|80,645,069.52|50,302,743.84|
|Plus: gains from change of fairvalue (―-― for loss)|||
||11,896,250.38|91,774,945.38|
|Investment gains (―-― for loss)|428,620,774.41|-292,417.86|
|Incl. Investment gains fromaffiliates and joint ventures|||
||-1,384,650.25|-358,979.50|
|2. Operational profit (―-― for loss)|351,250,685.24|27,692,513.89|
|Plus: non-operational income|10,030,207.56|3,063,312.33|

China Fangda Group Co., Ltd. 2016 Annual Report
||||
|-|-|-|
|Incl. Loss from disposal of|||
||1,794.87|3,581.20|
|non-current assets|||
|Less: non-operational expenditure|111,955.73|5,580.96|
|Incl. Loss from disposal of|||
||167.52|3,675.31|
|non-current assets|||
|3. Gross profit (―-― for loss)|361,168,937.07|30,750,245.26|
|Less: Income tax expenses|-15,993,422.84|7,935,507.77|
|4. Net profit (―-― for net loss)|377,162,359.91|22,814,737.49|
|5. After-tax net amount of other misc.|||
|incomes|||
|(1) Other misc. incomes that|||
|cannot be re-classified into gain and|||
|loss|||
|1. Change in net liabilities|||
|or assets due to re-measurement set|||
|benefit program|||
|2. Shares enjoyed in other|||
|misc. incomes that cannot be|||
|reclassified into gain and loss by the|||
|invested entity under the equity law|||
|(2) Other misc. incomes that will|||
|be re-classified into gain and loss|||
|1. Shares enjoyed in other|||
|misc. incomes that cannot be|||
|reclassified into gain and loss by the|||
|invested entity under the equity law|||
|2．Change in the fair value|||
|of financial asset for sale|||
|3 Held-to-mature|||
|investment reclassified as gain and loss|||
|in the financial assets for sales|||
|4. Effective part in the gain|||
|and loss of arbitrage of cash flow|||
|5. Translation difference of|||
|foreign exchange statement|||
|6. Others|||
|6. Total of misc. incomes|377,162,359.91|22,814,737.49|
|7. Earnings per share:|||

China Fangda Group Co., Ltd. 2016 Annual Report
||
|-|
|(1) Basic earnings per share|
|(2) Diluted earnings per share|

5. Consolidated Cash Flow Statement
In RMB
||||
|-|-|-|
|Items|Amount occurred in the current period|Occurred in previous period|
|1. Net cash flow from business|||
|operations:|||
|Cash received from sales of|||
||3,561,159,973.46|2,136,257,004.69|
|products and providing of services|||
|Net increase of customer deposits|||
|and capital kept for brother company|||
|Net increase of loans from central|||
|bank|||
|Net increase of inter-bank loans|||
|from other financial bodies|||
|Cash received against original|||
|insurance contract|||
|Net cash received from reinsurance|||
|business|||
|Net increase of client deposit and|||
|investment|||
|Increase in proposal of financial|||
|assets measured at fair value with|||
|variations accounted into current|||
|income account|||
|Cash received as interest,|||
|processing fee, and commission|||
|Net increase of inter-bank fund|||
|received|||
|Net increase of repurchasing|||
|business|||
|Tax refunded|1,289,574.20|2,935,298.45|
|Other cash received from business|||
||148,750,746.09|80,410,147.38|
|operation|||
|Sub-total of cash inflow from business|||
||3,711,200,293.75|2,219,602,450.52|
|operations|||
|Cash paid for purchasing products|2,574,194,385.29|2,044,378,497.19|

China Fangda Group Co., Ltd. 2016 Annual Report
||||
|-|-|-|
|and services|||
|Net increase of client trade and|||
|advance|||
|Net increase of savings in central|||
|bank and brother company|||
|Cash paid for original contract|||
|claim|||
|Cash paid for interest, processing|||
|fee and commission|||
|Cash paid for policy dividend|||
|Cash paid to and for the staff|242,199,199.79|274,034,752.64|
|Taxes paid|261,263,312.43|103,333,723.21|
|Other cash paid for business|||
||167,826,321.32|157,970,591.52|
|activities|||
|Sub-total of cash outflow from business|||
||3,245,483,218.83|2,579,717,564.56|
|operations|||
|Cash flow generated by business|||
||465,717,074.92|-360,115,114.04|
|operations, net|||
|2. Cash flow generated by investment:|||
|Cash received from investment|||
||556,946,806.49|392,316,868.51|
|recovery|||
|Cash received as investment profit|4,177,483.53|2,839,929.37|
|Net cash retrieved from disposal of|||
|fixed assets, intangible assets, and other|14,083,430.40|2,480,137.42|
|long-term assets|||
|Net cash received from disposal of|||
|subsidiaries or other operational units|||
|Other investment-related cash|||
|received|||
|Sub-total of cash inflow generated from|||
||575,207,720.42|397,636,935.30|
|investment|||
|Cash paid for construction of fixed|||
|assets, intangible assets and other|96,992,511.42|43,406,919.71|
|long-term assets|||
|Cash paid as investment|587,000,000.00|169,500,000.00|
|Net increase of loan against pledge|||
|Net cash paid for acquiring|||
|subsidiaries and other operational units|||

China Fangda Group Co., Ltd. 2016 Annual Report
||||
|-|-|-|
|Other cash paid for investment|2,666,097.15|263,000.00|
|Subtotal of cash outflows|686,658,608.57|213,169,919.71|
|Cash flow generated by investment|||
||-111,450,888.15|184,467,015.59|
|activities, net|||
|3. Cash flow generated by financing|||
|activities:|||
|Cash received from investment|460,899,992.60||
|Incl. Cash received from|||
|investment attracted by subsidiaries|||
|from minority shareholders|||
|Cash received from borrowed|||
||1,597,773,986.18|1,764,927,430.10|
|loans|||
|Cash received from bond placing|||
|Other cash received from financing|||
||53,500,094.24|398.76|
|activities|||
|Subtotal of cash inflow from financing|||
||2,112,174 ,073.02|1,764,927,828.86|
|activities|||
|Cash paid to repay debts|1,626,425,600.00|1,286,786,500.00|
|Cash paid as dividend, profit, or|||
||152,697,478.73|103,109,040.79|
|interests|||
|Incl. Dividend and profit paid by|||
|subsidiaries to minority shareholders|||
|Other cash paid for financing|||
||1,307,919.17|54,563,032.79|
|activities|||
|Subtotal of cash outflow from financing|||
||1,780,430,997.90|1,444,458,573.58|
|activities|||
|Net cash flow generated by financing|||
||331,743,075.12|320,469,255.28|
|activities|||
|4. Influence of exchange rate changes|||
||2,076,069.73|279,854.76|
|on cash and cash equivalents|||
|5. Net increase in cash and cash|||
||688,085,331.62|145,101,011.59|
|equivalents|||
|Plus: Balance of cash and cash|||
||247,739,243.78|102,638,232.19|
|equivalents at the beginning of term|||
|6. Balance of cash and cash equivalents|||
||935,824,575.40|247,739,243.78|
|at the end of the period|||

China Fangda Group Co., Ltd. 2016 Annual Report 6. Cash Flow Statement of the Parent Company
In RMB
||||
|-|-|-|
|Items|Amount occurred in the current period|Occurred in previous period|
|1. Net cash flow from business|||
|operations:|||
|Cash received from sales of|||
||41,662,670.48|26,164,484.77|
|products and providing of services|||
|Tax refunded|||
|Other cash received from business|||
||2,230,632,211.84|755,679,626.68|
|operation|||
|Sub-total of cash inflow from business|||
||2,272,294,882.32|781,844,111.45|
|operations|||
|Cash paid for purchasing products|||
||9,897,439.60|4,416,622.18|
|and services|||
|Cash paid to and for the staff|12,981,383.71|13,896,383.34|
|Taxes paid|3,958,332.35|2,788,279.54|
|Other cash paid for business|||
||2,414,510,247.91|879,561,369.67|
|activities|||
|Sub-total of cash outflow from business|||
||2,441,347,403.57|900,662,654.73|
|operations|||
|Cash flow generated by business|||
||-169,052,521.25|-118,818,543.28|
|operations, net|||
|2. Cash flow generated by investment:|||
|Cash received from investment|||
||161,000,000.00|30,000,000.00|
|recovery|||
|Cash received as investment profit|8,991,698.17|44,373,922.22|
|Net cash retrieved from disposal of|||
|fixed assets, intangible assets, and other|4,002,100.00|4,190.00|
|long-term assets|||
|Net cash received from disposal of|||
|subsidiaries or other operational units|||
|Other investment-related cash|||
|received|||
|Sub-total of cash inflow generated from|||
||173,993,798.17|74,378,112.22|
|investment|||
|Cash paid for construction of fixed|||
||281,433.15|772,927.30|
|assets, intangible assets and other|||

China Fangda Group Co., Ltd. 2016 Annual Report
||||
|-|-|-|
|long-term assets|||
|Cash paid as investment|64,000,000.00|2,000,000.00|
|Net cash paid for acquiring|||
|subsidiaries and other operational units|||
|Other cash paid for investment|||
|Subtotal of cash outflows|64,281,433.15|2,772,927.30|
|Cash flow generated by investment|||
||109,712,365.02|71,605,184.92|
|activities, net|||
|3. Cash flow generated by financing|||
|activities:|||
|Cash received from investment|460,899,992.60||
|Cash received from borrowed|||
||440,000,000.00|448,425,600.00|
|loans|||
|Cash received from bond placing|||
|Other cash received from financing|||
||94.24|398.76|
|activities|||
|Subtotal of cash inflow from financing|||
||900,900,086.84|448,425,998.76|
|activities|||
|Cash paid to repay debts|698,425,600.00|350,000,000.00|
|Cash paid as dividend, profit, or|||
||93,249,879.82|47,001,477.37|
|interests|||
|Other cash paid for financing|||
||1,307 ,919.17|624,032.79|
|activities|||
|Subtotal of cash outflow from financing|||
||792,983,398.99|397,625,510.16|
|activities|||
|Net cash flow generated by financing|||
||107,916,687.85|50,800,488.60|
|activities|||
|4. Influence of exchange rate changes|||
||70.42|-10,064.90|
|on cash and cash equivalents|||
|5. Net increase in cash and cash|||
||48,576,602.04|3,577,065.34|
|equivalents|||
|Plus: Balance of cash and cash|||
||25,583,130.83|22,006,065.49|
|equivalents at the beginning of term|||
|6. Balance of cash and cash equivalents|||
||74,159,732.87|25,583,130.83|
|at the end of the period|||

7. Statement of Change inOwners‟ Equity (Consolidated)
Amount of the Current Term
China Fangda Group Co., Ltd. 2016 Annual Report In RMB
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||Current period|||||||||||||
||Owners’ Equity Attributable to the Parent Company|||||||||||||
|||||||||||||Minor||
|||Other equity tools|||||Other|||Commo|||Total of|
|Items||||||||||||||
|||||||Less:||||||shareho||
||Share|Prefer|Perpet||Capital||miscella|Special|Surplus|n risk|Retaine||owners’|
|||||Other||Shares||||||lders’||
||capital|red|ual||reserves||neous|reserves|reserves|provisio|d profit||equity|
|||||s||in stock||||||equity||
|||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|
|(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||||||||||||||

China Fangda Group Co., Ltd. 2016 Annual Report
|||||||
|-|-|-|-|-|-|
|instrument holders||||||
|3. Amount of||||||
|shares paid and||||||
|accounted as||||||
|owners’ equity||||||
|||||-34,530,|-34,529,|
|4. Others|94.24|||||
|||||013.90|919.66|
||||-113,40|||
|(3) Profit||37,716,|||-75,690,|
||||7,226.4|||
|allotment||235.99|||990.50|
||||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. Making up||||||
|losses by surplus||||||
|reserves||||||
|4. Others||||||
|(5) Special||||||
|reserves||||||
|1. Provided this||||||
|year||||||
|2. Used this term||||||
||-39,407,||||-39,407,|
|(6) Others||||||
||299.31||||299.31|

China Fangda Group Co., Ltd. 2016 Annual Report
|||||||||
|-|-|-|-|-|-|-|-|
||789,09||||1,016,8||2,302,313,350.17|
|4. Balance at the||467,376|2,130,4|88,839,||-61,949,||
||4,836.||||20,576.|||
|end of this period||,902.96|54.52|790.50||210.11||
||00||||30|||

 Amount of the Previous Term
In RMB
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||Last period|||||||||||||
||Owners’ Equity Attributable to the Parent Company|||||||||||||
|||||||||||||Minor||
|||Other equity tools|||||Other|||Commo|||Total of|
|Items||||||||||||||
|||||||Less:||||||shareho||
||Share|Prefer|Perpet||Capital||miscella|Special|Surplus|n risk|Retaine||owners’|
|||||Other||Shares||||||lders’||
||capital|red|ual||reserves||neous|reserves|reserves|provisio|d profit||equity|
|||||s||in stock||||||equity||
|||share|bond||||income|||ns||||
||756,90||||||||||||1,300,5|
|1. Balance at the|||||79,099,||91,831.||48,842,||349,987|65,603,||
||9,905.||||||||||||34,627.|
|end of last year|||||220.38||63||080.76||,825.69|764.53||
||00||||||||||||99|
|Plus:||||||||||||||
|Changes in||||||||||||||
|accounting||||||||||||||
|policies||||||||||||||
|Correction of||||||||||||||
|previous errors||||||||||||||
|Consolidation of||||||||||||||
|entities under||||||||||||||
|common control||||||||||||||
|Others||||||||||||||
|2. Balance at the|756,90||||||||||||1,300,5|
||||||79,099,||91,831.||48,842,||349,987|65,603,||
|beginning of|9,905.||||||||||||34,627.|
||||||220.38||63||080.76||,825.69|764.53||
|current year|00||||||||||||99|
|3. Amount of||||||||||||||
|change in current|||||||||2,281,4||82,283,|-51,057|33,508,|
||||||398.76|||||||||
|term (―-― for|||||||||73.75||598.87|,014.50|456.88|
|decrease)||||||||||||||
|(1) Total of misc.|||||||||||107,272|-39,057|68,215,|
|incomes|||||||||||,369.77|,014.50|355.27|
|(2) Investment or||||||||||||||
|||||||||||||-12,000|-11,999,|
|decreasing of|||||398.76|||||||||
|||||||||||||,000.00|601.24|
|capital by owners||||||||||||||
|1. Common shares||||||||||||||
|contributed by||||||||||||||

China Fangda Group Co., Ltd. 2016 Annual Report
|||||||
|-|-|-|-|-|-|
|shareholders||||||
|2. Capital||||||
|contributed by||||||
|other equity||||||
|instrument holders||||||
|3. Amount of||||||
|shares paid and||||||
|accounted as||||||
|owners’ equity||||||
|||||-12,000|-11,999,|
|4. Others|398.76|||||
|||||,000.00|601.24|
|(3) Profit||2,281,4|-24,988,||-22,707,|
|allotment||73.75|770.90||297.15|
|1. Providing of||2,281,4|-2,281,4|||
|surplus reserves||73.75|73.75|||
|2. Common risk||||||
|provision||||||
|3. Allotment to the||||||
||||-22,707,||-22,707,|
|owners (or||||||
||||297.15||297.15|
|shareholders)||||||
|4. Others||||||
|(4) Internal||||||
|transferring of||||||
|owners’ equity||||||
|1. Capitalizing of||||||
|capital reserves (or||||||
|to capital shares)||||||
|2. Capitalizing of||||||
|surplus reserves||||||
|(or to capital||||||
|shares)||||||
|3. Making up||||||
|losses by surplus||||||
|reserves||||||
|4. Others||||||
|(5) Special||||||
|reserves||||||
|1. Provided this||||||
|year||||||

China Fangda Group Co., Ltd. 2016 Annual Report
|||||||||
|-|-|-|-|-|-|-|-|
|2. Used this term||||||||
|(6) Others||||||||
||756,90||||||1,334,0|
|4. Balance at the||79,099,|91,831.|51,123,|432,271|14,546,||
||9,905.||||||43,084.|
|end of this period||619.14|63|554.51|,424.56|750.03||
||00||||||87|

 8. Statement of Change inOwners‟ Equity (Parent Company)
Amount of the Current Term
In RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||Current period|||||||||||
|||Other equity tools|||||Other|||||
|||||||Less:|||||Total of|
|Items|Share|Preferre PerpetuOthersd share al bond|||Capital||miscellan|Special|Surplus|Retaine||
|||Preferre|Perpetu|||Shares in|||||owners’|
||capital|||Others|reserves||eous|reserves|reserves|d profit||
|||d share|al bond|||stock|||||equity|
||||||||income|||||
|1. Balance at the|756,909,||||38,598,96||||51,123,55|402,148|1,248,872|
||||||||91,831.63|||||
|end of last year|905.00||||3.76||||4.51|,728.12|,983.02|
|Plus:||||||||||||
|Changes in||||||||||||
|accounting||||||||||||
|policies||||||||||||
|Correction of||||||||||||
|previous errors||||||||||||
|Others||||||||||||
|2. Balance at the||||||||||||
||756,909,||||38,598,96||||51,123,55|402,148|1,248,872|
|beginning of|||||||91,831.63|||||
||905.00||||3.76||||4.51|,728.12|,983.02|
|current year||||||||||||
|3. Amount of||||||||||||
|change in current|32,184,9||||427,684,5||||37,716,23|263,755|761,340,8|
|term (―-― for|31.00||||83.13||||5.99|,133.42|83.54|
|decrease)||||||||||||
|(1) Total of misc.||||||||||377,162|377,162,3|
|incomes||||||||||,359.91|59.91|
|(2) Investment or||||||||||||
||32,184,9||||427,684,5||||||459,869,5|
|decreasing of||||||||||||
||31.00||||83.13||||||14.13|
|capital by owners||||||||||||
|1. Common shares||||||||||||
||32,184,9||||427,684,4||||||459,869,4|
|contributed by||||||||||||
||31.00||||88.89||||||19.89|
|shareholders||||||||||||

China Fangda Group Co., Ltd. 2016 Annual Report
||||||||
|-|-|-|-|-|-|-|
|2. Capital|||||||
|contributed by|||||||
|other equity|||||||
|instrument holders|||||||
|3. Amount of|||||||
|shares paid and|||||||
|accounted as|||||||
|owners’ equity|||||||
|4. Others||94.24||||94.24|
||||||-113,40||
|(3) Profit||||37,716,23||-75,690,9|
||||||7,226.4||
|allotment||||5.99||90.50|
||||||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. Making up|||||||
|losses by surplus|||||||
|reserves|||||||
|4. Others|||||||
|(5) Special|||||||
|reserves|||||||
|1. Provided this|||||||
|year|||||||
|2. Used this term|||||||
|(6) Others|||||||
|4. Balance at the|789,094,|466,283,5|91,831.63|88,839,79|665,903|2,010,213|

China Fangda Group Co., Ltd. 2016 Annual Report
|||||||
|-|-|-|-|-|-|
|end of this period|836.00|46.89|0.50|,861.54|,866.56|

 Amount of the Previous Term
In RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||Last period|||||||||||
|||Other equity tools|||||Other|||||
|||||||Less:|||||Total of|
|Items|Share|Preferre PerpetuOthersd share al bond|||Capital||miscellan|Special|Surplus|Retaine||
|||Preferre|Perpetu|||Shares in|||||owners’|
||capital|||Others|reserves||eous|reserves|reserves|d profit||
|||d share|al bond|||stock|||||equity|
||||||||income|||||
|1. Balance at the|756,909,||||38,598,56||||48,842,08|404,322|1,248,765|
||||||||91,831.63|||||
|end of last year|905.00||||5.00||||0.76|,761.53|,143.92|
|Plus:||||||||||||
|Changes in||||||||||||
|accounting||||||||||||
|policies||||||||||||
|Correction of||||||||||||
|previous errors||||||||||||
|Others||||||||||||
|2. Balance at the||||||||||||
||756,909,||||38,598,56||||48,842,08|404,322|1,248,765|
|beginning of|||||||91,831.63|||||
||905.00||||5.00||||0.76|,761.53|,143.92|
|current year||||||||||||
|3. Amount of||||||||||||
|change in current|||||||||2,281,473|-2,174,0|107,839.1|
||||||398.76|||||||
|term (―-― for|||||||||.75|33.41|0|
|decrease)||||||||||||
|(1) Total of misc.||||||||||22,814,|22,814,73|
|incomes||||||||||737.49|7.49|
|(2) Investment or||||||||||||
|decreasing of|||||398.76||||||398.76|
|capital by owners||||||||||||
|1. Common shares||||||||||||
|contributed by||||||||||||
|shareholders||||||||||||
|2. Capital||||||||||||
|contributed by||||||||||||
|other equity||||||||||||
|instrument holders||||||||||||
|3. Amount of||||||||||||
|shares paid and||||||||||||
|accounted as||||||||||||

China Fangda Group Co., Ltd. 2016 Annual Report
||||||||
|-|-|-|-|-|-|-|
|owners’ equity|||||||
|4. Others||398.76||||398.76|
|(3) Profit||||2,281,473|-24,988,|-22,707,2|
|allotment||||.75|770.90|97.15|
|1. Providing of||||2,281,473|-2,281,4||
|surplus reserves||||.75|73.75||
|2. Allotment to the|||||||
||||||-22,707,|-22,707,2|
|owners (or|||||||
||||||297.15|97.15|
|shareholders)|||||||
|3. Others|||||||
|(4) Internal|||||||
|transferring of|||||||
|owners’ equity|||||||
|1. Capitalizing of|||||||
|capital reserves (or|||||||
|to capital shares)|||||||
|2. Capitalizing of|||||||
|surplus reserves|||||||
|(or to capital|||||||
|shares)|||||||
|3. Making up|||||||
|losses by surplus|||||||
|reserves|||||||
|4. Others|||||||
|(5) Special|||||||
|reserves|||||||
|1. Provided this|||||||
|year|||||||
|2. Used this term|||||||
|(6) Others|||||||
|4. Balance at the|756,909,|38,598,96||51,123,55|402,148|1,248,872|
||||91,831.63||||
|end of this period|905.00|3.76||4.51|,728.12|,983.02|

 III. General Information
China Fangda Group Co., Ltd. (the―Company‖ or the―Group‖) is a joint stock company registered in Shenzhen, Guangdong and was approved by the Government of Shenzhen with Document深府办函 (1995)194号, and was founded, on the basis of Shenzhen
Fangda Construction Material Co., Ltd., by way of share issuing in October 1995. The unified social credit code is:
91440300192448589C; registered address: Fangda Building, Kejinan Road 12, High-tech Zone, Shenzhen. Mr. Xiong Jianming is
the legal representative.
China Fangda Group Co., Ltd. 2016 Annual Report The Company issued foreign currency shares (B shares) and local currency shares (A shares) and listed in November 1995 and April 1996 respectively in Shenzhen Stock Exchange. The Company received the Reply to the Non-public Share Issuance of Fangda China Group Co., Ltd. (CSRC License[2016] No.825) to allow the Company to conduct non-public issuance of 32,184,931 A-shares in June 20116. The current registered capital is RMB789,094,836.00.
The Company has established a corporate governance structure that comprisesshareholders’ meeting, board of directors and supervisory committee. Currently, the Company sets up the President Office, Administrative Department, HR Department, Enterprise Management Department, Financial Department, Audit and Supervisory Department, Securities Department, Technology Department and IT Department and has established subsidiaries including Fangda Decoration, Fangda Automatic, Fangda New Material, Fangda Property and Fangda New Energy.
The business nature and main business operations of the Company and subsidiaries(―theGroup‖) include (1) production and sales of curtain wall materials, design, production and installation of construction curtain walls; (2) assembly and production of subway screen doors; (3) development and operation of real estate projects on land, of which rights have been obtained lawfully; (4)R&D, installation and sales of PV devices, design and installation of PV power plants,R&D, design, production, sales and installation of lights, electric auxiliaries and other equipment, LED products and metal products.
The financial statements and notes are approved at the 26th meeting of the 7th term of the Board held on March 17, 2017.
The consolidation scope for the consolidated financial statements includes the Company and all subsidiaries. One more subsidiary is included in the consolidation scope. In the period, the Company wrote off Ganzhou Longneng New Energy Co. Ltd. and lost control on subsidiaries Shenyang Fangda Semi-conductor Lighting Co., Ltd. and Shenzhen Woke Semi-conductor Lighting Co., Ltd., which have been moved out from the consolidation scope. See Note 8 Change to consolidation scope and Note 9 Interests in other entities. IV. Basis for the preparation of financial statements
1. Preparation basis
The financial statements are prepared according to the enterprise financial standard and guidelines, interpretation and other related regulations(―theStandard‖) issued by the Ministry of Finance. The Group has also disclosed related financial information according to the requirement of the Regulations of Information Disclosure No.15– General Provisions for Financial Statements (Revised in 2014) issued by the CSRC.
The Group prepares the financial statements based on continuous operation.
The Group's auditing is based on the accrual basis. Except for some financial instruments and property held for investment, the financial statements are prepared based on historical costs. In case of any asset impairment, the impairment provision will be made as required.
V. Significant Account Policies and Estimates
Whether the Company needs to comply with disclosure requirements of special industries
Yes
Property development and decoration industries
China Fangda Group Co., Ltd. 2016 Annual Report Specific accounting policy and estimate prompt:
The Group determines the accounting policies and income recognition policies for investment real estate according to the production and business features. For details, see Note 5. 13 and Note 5. 22.
1. Statement of compliance to the Enterprise Accounting Standard
The financial report and statements are prepared with compliance to the requirement of the Enterprise Accounting Standard. They reflect the financial position as of 31.12.16, and business performance and cash flow situation in Year 2016 of the Company frankly and completely.
2. Fiscal Period
The fiscal year of the Group is the solar calendar year, that is from January 1 to December 31.
3. Operation period
The operation period of the Group is 12 months.
4. Bookkeeping standard money
The Company, domestic subsidiaries and overseas subsidiary Shihui International Holding Co., Ltd. use RMB as bookkeeping standard money. Overseas subsidiary Automatic System (Hong Kong) Co., Ltd. uses HKD as bookkeeping standard money. The Group prepares financial statements in RMB.
5. Accounting treatment of the entities under common and different control
(1) Consolidation of entities under common control
Assets and liabilities obtained by the merging party are calculated at their book value with the merged parties at the merger day in the consolidated financial statement of the merging party in addition to the adjustment made given the difference in accounting policies. The differences between the book value of net assets and the book value of consideration price (or the total of face value of share issued) are adjusted to the capital reserve (share capital premium). If the share capital premium is not enough to offset the difference, it will be adjusted to the retained gains.
Enterprise merger under common control through multiple transactions
In separate financial statements, the initial investment cost is the book value of the mergedparty’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 controllingparty’s consolidated financial statements other than the adjustment made due to differences in
China Fangda Group Co., Ltd. 2016 Annual Report accounting policies; adjust the capital surplus (share premium) according to the difference between the initial investment cost and the book value of the held investment before merger plus the book value of the consideration paid on the merger date. Where the capital surplus falls short, the retained income should be adjusted. Changes in recognized related profit and loss, other misc. incomes and other owner's equity between the later one of the date when the original stock equity was obtained and the date when the merged party and merging party become under the common control should respectively write down the retained profit in beginning of the report period or currentperiod’s profit or loss.
(2) Consolidation of entities under different control
For merger of entities under different control, the merger cost is the fair value of the asset paid, liability undertaken, and equity securities issued for exchanging of control power over the entities at the day of acquisition. On the acquisition day, the assets and liabilities (if any) acquired by the Group from the acquired party are recognized on the fair value.
If the merger costs exceed the fair value of the recognizable net assets of the acquired party in the merger, it is recognized as goodwill and measured based the costs after the accumulative impairment provision is deducted; if the fair value exceeds the costs, it is included in the income statement for the period after being re-examined.
Where there is new or further evidence on the condition existing on the acquisition date 12 months later and adjustment needs to be made, the good will should be adjusted and merged.
(3) Treatment of related transaction fee in enterprise merger
Agency expenses and other administrative expenses such as auditing, legal consulting, or appraisal services occurred relating to the merger of entities are accounted into current income account when occurred. The transaction fees of equity certificates or liability certificates issued by the purchaser for payment for the acquisition are accounted at the initial amount of the certificates.
6. Preparation of Consolidated Financial Statements
(1) Consolidation scope
The consolidate scope of consolidated financial statements is determined based on control. Control means the power possessed by the Group on invested entities to share variable returns by participating in related activities of the invested entities and to impact the amount of the returns by using the power. Subsidiaries are enterprises controlled by the Company.
(2) Preparation of Consolidated Financial Statements
The consolidated financial statements are prepared by the Company based on financial statements of the Company and subsidiaries and according to other related information. During preparation of consolidated financial statements, the accounting policies and period of the Company and subsidiaries must be the same. Major transactions and balances between companies are offset.
Subsidiaries and businesses increased because of merger of enterprises under the common control during the report period are deemed consolidated into the consolidate scope from the date of becoming controlled by the final party. The operating result and cash flows of the subsidiaries and businesses from the date of becoming controlled by the final party should be incorporated into the consolidate income statement and consolidate cash flow statement.
For subsidiaries and businesses increased because of merger of enterprises not under the common control, their incomes, expenses
China Fangda Group Co., Ltd. 2016 Annual Report and profits between the date of acquisition and end of the report period should be incorporated into the consolidated income statement, and the cash flows should be incorporated into the consolidated cash flow statement.
The part of theshareholders’ equity in subsidiaries not owned the Company are separately listed under theshareholders’ equity as minorityshareholders’ equity in the consolidated balance sheet. The part of thesubsidiaries’ net profits and losses for the current period that belongs to minority shareholders is listed as minorityshareholders’ 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 theowners’ equity of the subsidiaries at the beginning of the period, the excessive part will offset the minorityshareholders’ equity.
(3) Acquisition of subsidiary minority interests
The difference between the investment cost of the long-term equity obtained from acquisition of minority interests and the share of net assets in the subsidiary calculated continuously based on the increased shareholding percentage, and the difference between the disposal income obtained from the partial disposal of thesubsidiary’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 ofsubsidiaries’ control power
For loss of control over subsidiaries due to disposal of partial equity investment or other reasons, the remaining equity should be re-measured at the fair value on the date of loss of the control power; the sum of the consideration obtained from the disposal of stock equity and the fair value of the remaining equity, minus the sum of the share of the netassets’ book value calculated continuously from the acquisition date according to the original shareholding percentage and the goodwill should be recorded in the investment gain of the current period of the loss of control power.
Other misc. incomes related to the equity investment in the original subsidiary is transferred to the currentperiod’s profit and loss when the control power is lost, except for the other misc. incomes generated by re-measurement and resetting of earning plan or change in the net assets by the invested party.
7. Recognition of cash and cash equivalents
Cash refers to cash on hand and deposits that can be used at any time for payment. Cash equivalent refers to the investments with short term, strong liquidity and small risk of value fluctuation that are held by the Group and easily converted into cash with known amount.
8. Foreign exchange business and foreign exchange statement translation
(1) Foreign currencies
Trades of the Group made in foreign currencies are translated into RMB basing on the spot exchange rate on the date when the trade is conducted.
At the balance sheet date, foreign currency items are translated on the spot exchange rate of the balance sheet date. The exchange differences caused by the difference in exchange rates on the balance sheet date and initial recognizing date or previous balance sheet
China Fangda Group Co., Ltd. 2016 Annual Report date are included in the current profits and losses. Non-monetary items accounted in foreign currency and on historical costs are exchanged with the spot exchange rate on the transaction date. Non-monetary items accounted in foreign currency and on fair value are exchanged with the spot exchange rate on the determination date of the fair value. The exchange difference between the accounting standard-currency amount and the original accounting standard-currency amount are included in the current profits and losses.
(2) Translation of foreign exchange statements
9. Financial instrument
Financial instrument refers to acompany’s financial assets and contracts that form other units of financial liabilities or equity instruments.
(1) Recognition and de-recognition of financial instrument
The Group recognizes a financial asset or liability when it becomes one party in the financial instrument contract.
Financial asset is derecognized when:
(1) The contractual right to receive the cash flows of the financial assets is terminated;
(2) The financial asset is transferred and meets the following de-recognition condition.
When partial or all of the current responsibilities attached to such financial liabilities, the partial or all of the financial liabilities are derecognized. When the Group (debtor) and creditor enter into an agreement to replace the existing financial liabilities by undertaking new financial liabilities and the contract terms for the new financial liabilities are essentially different from those for the existing one, the existing financial liabilities will be derecognized and new financial liabilities will be recognized.
Financial asset transactions in regular ways are recognized and de-recognized on the transaction date.
(2) Classification and measurement of financial assets
Financial assets of the Group are categorized as: financial assets measured at fair value with variations accounted into current income account, receivables and financial assets available for sales. Financial assets are measured at the fair value at the initial recognition. For financial assets measured at fair value with variations accounted into current income account, related transaction expenses are accounted into the current income. For other financial assets, the related transaction expenses are accounted into the initial recognized amounts.
Financial assets measured at fair value with variations accounted into current income account
It includes transactional financial assets and financial assets measured by fair value and with variations accounted into current gain/loss account at initial recognition. The financial assets are further measured by fair value with the gain/loss created by variations in fair value and related dividends and interest accounted into the current gain/loss account.
Receivables
Receivables refer to non-derivative financial assets without quotations but with fixed recoverable amount or can be confirmed, including receivable accounts and other receivables (Note V. 10).Receivables adopt the effective interest method and are further
measured by amortized cost. Gain/loss generated at final recognition, impairment or amortization is accounted into the current
China Fangda Group Co., Ltd. 2016 Annual Report gain/loss account.
Sellable financial assets
Sellable financial asset refers to those sellable non-derivate financial assets recognized initially and financial assets otherthan the above-mentioned types of financial assets. Sellable financial assets are further measured by fair value and the premium/discount is amortized by the effective interest method and recognized as interest income. Other than the exchange difference of impairment loss and foreign exchange monetary financial assets, which is recognized as current gain and loss, the variations in fair value of sellable financial assets is recognized as other comprehensive gain. When it is derecognized and transferred out, it is accounted into the current gain/loss account. Dividends and interest income related to sellable financial assets are accounted into the current gain/loss account.
Equity instrument investment without quotation in an active market and whose fair value cannot be reliably measured and derivative financial assets that are linked to the equity instrument and that need to be settled through delivery of the equity instruments are measured by costs.
(3) Classification and measurement of financial liabilities
TheGroup’s financial liabilities are mainly other financial liabilities
Other financial liabilities adopt the effective interest method and are further measured by amortized cost. Gain/loss generated at final recognition or amortization is accounted into the current gain/loss account.
(4) Derivative financial instruments and embedded derivatives
(5) Fair value of financial instrument
For financial assets or liabilities in an active market, the Group determines their fair value based on quotations in the active market. If there is no active market, the Company uses evaluation techniques to determine the fair value.
(6) Impairment of financial assets
Financial assets measured at fair value with variations accounted into current income account. The Group checks the book value of financial assets on the balance sheet date. Impairment provision will be made in case of objective evidence proving impairment to the financial assets. Objective evidence proving impairment to the financial assets refers to events actually occur after the initial recognition of financial assets, with influence on the estimated future cash flows of the financial assets and can be reliably measured by the Group.
Objective evidence proving impairment to the financial assets includes the following observable situations:
① Severe financial difficulties in the issuer or debtor;
② The debtor violates the contract or defaults or delays the payment of the interest or principal;
③ The Group makes compromise to the debtor with financial difficulties due to economic or legal consideration;
④ The debtor may go bankruptcy or conduct other financial reorganization;
⑤ The financial assets can no longer be traded in an active market due to material financial difficulties in the issuer;
China Fangda Group Co., Ltd. 2016 Annual Report⑥ It cannot be recognized whether the cash flow of an asset in a group of financial assets has decreased. However, according to open data, it can be evaluated that the estimated future cash flow of the group of financial assets has decreased and the decrease can be measured, including:
- The payment capacity of the debtor of the financial assets continues weakening;
- Situations that may lead to the payment failure of the financial assets happen in the country or region where the debtor is located;
⑦ Significant adverse changes occurs to the technical, market, economic or legal environment of the debtor, leading to that the equity instrument investor may not be able to recover the investment;
⑧ Other objective evidence that can prove the impairment of the financial assets
Financial assets measured at amortized cost
If there is objective evidence proving impairment to the financial assets, the book value of the financial assets will be written down to the present value of the estimated future cash flow (excluding undiscovered future credit loss). The write-down amount is accounted into the current gain/loss account. The present value of the estimated future cash flow is determined by the original effective discount rate with the value of the guanrantee considered.
Conduct imparement test separately for major financial assets. If there is objective evidence suggesting impairment, determine the impairment loss and account it into the current gain/loss account. Test financial assets without impairment separately (including major and minor financial assets) and conduct impairment test in the financial assets combination with similar credit risk features. Conduct impairment test for financial assets separately recognized as impaired excluding financial assets combination with similar credit risk features.
After the Group recognizes impair loss to financial assets measured by amortized cost, if there is object evidence suggesting that the value of the financial assets is restored objectively due to an event after the loss, the recognized impairment loss can be reversed and accounted into the current gain/loss account. The book value after the reversal must not exceed the amortized cost of the financial assets on the reversal date assuming that no impairment provision was made.
(7) Transfer of financial assets
The transfer of financial assets refers to transferring or delivering the financial assets to another party (receiver) other than the issuing party of the financial assets.
Recognition of the financial asset is terminated as soon as all of the risks and rewards attached to the financial asset have been transferred to the receiver. Whereas if all of the risks and rewards attached to the financial assets are reserved, recognition of the financial asset shall not be terminated.
When the Group neither transfers nor reserve almost all risks and rewards attached to the financial assets, it will be handled as: When the controlling power over the financial asset is given up, the financial assets will be derecognized and the generated assets and liabilities will be recognized; when the controlling power is not given up, financial asset and related liability shall be recognized according to the extend the Company is involving in the financial asset.
(8) Deduction of financial assets and liabilities
When the Group has the legal right to deduct recognized financial assets and liabilities, can exercise the legal right, and the Group
China Fangda Group Co., Ltd. 2016 Annual Report plans to settle them in net, liquidate and repay the financial assets and liabilities, the amount after the deduction will be presented in the balance sheet. Exception for the deducted part, other financial assets and liabilities are separately presented in the balance sheet. 10. Receivables
(1) Receivables with major individual amount and bad debt provision provided individually
|||
|-|-|
||For the current year, the Company recognizes project receivables|
||over RMB8 million (inclusive) as ―individual receivable with|
||large amount‖ while recognizes product receivables over RMB2|
|Judging basis or standard of major individual amount||
||million (included) as ―individual receivable with large amount‖|
||and other receivables over RMB1 million (included) as|
||―individual receivable with large amount‖.|
||The Company performs impairment examination individually on|
||each large amount receivables, and recognizes impairment and|
|Provision method for account receivable with major individual|provides bad debt provision when the impairment is recognized|
|amount and bad debt provision provided individually|based on objective evidence. Those not impaired are accounted|
||along with the minor amount receivables and recognized in risk|
||groups.|

(2) Recognition and providing of bad debt provisions on groups
|||
|-|-|
|Group|Method of bad debt provision|
|Account age|Aging method|
|Receivable accounts consolidated|Other method|

Receivables adopting the aging method in the group:
√ Applicable□ Inapplicable
||||
|-|-|-|
|Age|Providing rate for receivable account|Providing rate for other receivables|
|Within 1 year (inclusive)|3.00%|3.00%|
|1-2 years|10.00%|10.00%|
|2-3 years|30.00%|30.00%|
|Over 3 years|50.00%|50.00%|

 Receivables adopting the balance percentage method in the group
□ Applicable√ Inapplicable
Receivables adopting other methods in the group
□ Applicable√ Inapplicable
China Fangda Group Co., Ltd. 2016 Annual Report (3) Receivables with not major individual amount and bad debt provision provided individually
Reasons for separate bad debt provision Long account age or deterioration of customer creditability
Method of bad debt provision According to the difference between the present value of future cash flow and the book value
11. Inventories
Whether the Company needs to comply with disclosure requirements of special industries
Yes
Property development and decoration industries
(1) Classification of inventories
TheGroup’s inventories include purchased materials, raw materials, low-value consumables, packing materials, OEM materials, products in process, semi-finished goods, finished goods, inventory, development costs, development products and construction in process.
(2) Pricing of delivering inventory
Inventories are measured at cost when procured. Raw materials, products in process, commodity stocks in transit and self-made semi-finished products are measured by the weighted average method.
Construction contracts are measured by the effective cost, including direct and indirect expenses generated before the contracts are fulfilled. Costs generated and recognized accumulatively by construction in process and settled payment are listed in the balance sheet as offset net amounts. The excessive part of the sum of the generated costs and recognized gross profit (loss) over the settled payment is listed inventories; the excessive part of the settled payment over the sum of the generated costs and recognized gross profit (loss) is listed as the prepayment received.
Travel and bidding expenses generated by execution of contracts, if they can be separated and reliably measured and it is likely to enter into contracts, are accounted as the contract cost when the contracts are entered into; or into the current gain/loss account if the conditions are not met.
The development costs include land transfer payment, infrastructure and facility costs, installation engineering costs, borrows before completion of the development and other costs during the development process. The actual costs of the development product is priced using the separate pricing method.
(3) Recognition of inventory realizable value and providing of impairment provision
The realizable net value of inventory is the estimated sales prices of the inventory less costs to be incurred until the completion, estimated sales expense and taxes. The realizable net value of inventory should be recognized based on solid evidence with the purpose of the inventory and after-balance-sheet-date events taken into consideration.
If the inventory cost is higher than the realizable net value on the balance sheet date, the inventory depreciation provision should be made. The Group makes inventory depreciation provision for separate or a type of inventory. If factors affecting the inventory value disappear on the balance sheet date, the depreciation provision made should be reversed to the original value.
(4) Inventory system
The Group uses perpetual inventory system.
(5) Amortizing of low-value consumables and packaging materials
Low-value consumables are amortized on on-off amortization basis at using.
China Fangda Group Co., Ltd. 2016 Annual Report 12. Long-term share equity investment
The Group's long-term equity investment includes control on invested entities and significant impacts on equity investment. Invested entities on which the Group has significant impacts are associates of the Group.
(1) Recognition of initial investment costs
Long-term equity investment generated by enterprise merger: for long-term equity investment obtained by merger of enterprises under common control, the obtained share of book value of the interests of the mergedparty’s owner in the consolidate financial statements on the merger date is the investment costs; for long-term equity investment obtained by merger of enterprises not under common control, the merger cost is the investment cost.
For long-term equity investment obtained by cash, the actually paid consideration is the initial investment cost.
(2) Subsequent measurement and recognition of gain/loss
Investments by the Company in subsidiaries are calculated using the cost method; in joint ventures are calculated using the equity method.
For the long-term equity investment measured on the cost basis, except for the announced cash dividend or profit included in the practical cost or price when the investment was made, the cash dividends or profit distributed by the invested entity are recognized as investment gains in the current gain/loss account.
When the equity method is used to measure long-term equity investment, the investment cost will not be adjusted if the investment cost of the long-term equity investment is larger than the share of fair value of the recognizable assets of the invested entity. When it is smaller than the share of fair value of the recognizable assets of the invested entity, the book value will be adjusted and the difference is included in the current gains of the investment.
When the equity method is used, the current investment gain is the share of the net gain realized in the current year that can be shared or borne, recognized as investment gain and other misc. income. The book value of the long-term equity investment is adjusted accordingly. The book value of the long-term equity investment should be accordingly decreased based on the share of profit or cash dividend announced by the invested entity; according to other changes in theowner’s equity except for net profit and loss, other misc income and profit distribution of the invested entity, adjust the book value of the long-term equity investment and record it in the capital surplus (other capital surplus). When the share of the net gains that can be enjoyed is recognized, it is recognized after the net profit of the invested entity is adjusted based on the fair value of the recognizeable assets of the invested entity according to the Company's accounting policies and accounting period.
Where substantial influence on invested entities is imposed or joint control is implemented due to increase in investment, the sum of the fair value of the original equity and increased investment on the conversion date is the initial investment cost under the equity method. The difference between the fair value and book value of the original equity on the conversion date and the accumulative change in the fair value originally accounted in other misc. income should be transferred into the profit and loss of the current period using the equity method.
Where joint control or substantial influence on invested entities is lost due to disposal of part of investment, the remaining equity after the disposal should be treated according to the Enterprise Accounting Standard No.22– Recognition and Measurement of Financial Instruments from the date of losing the joint control or substantial influence. The difference between the fair value and book value should be accounted the profit and loss of the current period. For other misc. incomes of original share equity investment
China Fangda Group Co., Ltd. 2016 Annual Report determined using the equity method, when the equity method is no longer used, it should be treated based on the same basis of the treatment of related assets or liability of the invested entities; the other owners' interests related to the original share equity investment should be transferred to gain/loss of the current period.
Where the disposal of part of the equity investment leads to loss of control on the invested entity, and the remaining equity after the disposal can impose common control or significant impacts on the invested entity, use the equity method and make adjustment as if the equity method was used when the remaining equity was acquired. If not, perform accounting treatment according to provisions in the Enterprise Accounting Standard No.22– Recognition and Measurement of Financial Tools. The difference between the fair value and book value on the date of losing control should be transferred into the profit and loss of this period.
Where theCompany’s shareholding decreases and the Company loses the control due to increased investment by another investor, but the Company can still impose common control or significant impacts on the invested entity, the share of increased net assets of the invested entity that can be shared by the Company should be calculated based on the new shareholding, the difference between the net assets and original book value of the original long-term equity investment should be recorded in the profit and loss of this period and adjusted as if equity method was used when it was acquired according to the new shareholding proportion.
Internal transaction gain not realized between the Company and affiliates is measured according to the shareholding proportion and the investment gains is recoginzied after deduction. The unrealized internal transaction loss between the Company and the invested entity is the impairment loss of transferred assets and should not be written off.
(3) Basis for recognition of major influence on invested entities
Major influence refers to the power to participate in decision-making of financial and operation policies of a company, but cannot control or jointly control the making of the policies. When considering whether the Company can impose significant impacts on the invested entity, impacts of conversion of shares with voting rights held directly or indirectly by the investor and voting rights that can be executed in this period held by the investor and other party into shares of the invested entity should be considered.
When Company directly or indirectly holds20% (inclusive) but less than50% of the shares with voting rights of the invested entity, it is generally considered that the Company can impose significant impacts unless there is clear evidence proving that the Company shall not participate in the production and business decision making of the company; when the Company holds less than20% of the shares with voting rights, it is generally not considered that the Company has significant impacts on the invested entity, unless there is clear evidence proving the contrary.
(4) Impairment examination and providing of impairment provision
See Note V. 18 for the assets impairment provision method for investment in subsidiaries and joint ventures. 13. Investment real estate
Measuring mode of investment real estate
Measurement at fair value
Basis of choosing the measurement at fair value
Investment real estates of the Group are buildings leased.
For investment real estates with an active real estate transaction market and the Group can obtain market price and other information of same or similar real estates to reasonably estimate the investment realestates’ fair value, the Group will use the fair value mode to measure the investment real estate subsequently. Variations in fair value are accounted into the current gain/loss account.
The fair value of investment real estate is determined with reference to the current market prices of same or similar real estates in
China Fangda Group Co., Ltd. 2016 Annual Report active markets; when no such price is available, with reference to the recent transaction prices and consideration of factors including transaction background, date and district to reasonably estimate the fair value; or based on the estimated lease gains and present value of related cash flows.
For an investment real estate whose fair value is proven unable to be obtained continuously and reliably by objective evidence, the real estate will be measured at cost basis until it is disposed and no residual value remains as assumed.
The difference of the proceeds from sales, transfer, retirement or destruction of investment real estates with book value and related taxes deducted is accounted into the current gain/loss account.
Investment real estate that use the cost method for further measurement adopt the straight-line depreciation provision method. See Note V. 18 for the provision method.
14. Fixed assets
(1) Recognition conditions
Fixed assets is defined as the tangible assets which are held for the purpose of producing goods, providing services, lease or for operation& management, and have more than one accounting year of service life.The fixed assets can only be recognized hen economic interests related to the fixed assets are very likely to flow into the company and the costs of the fixed assets can be reliably measured. The Group measures fixed assets at the actual costs when the fixed assets are obtained
(2) Depreciation method
||||||
|-|-|-|-|-|
|||||Annual depreciation|
|Type|Depreciation method|Service year|Residual rate||
|||||rate %|
|Houses & buildings|Average age|35-45|10|2-2.57|
|Mechanical equipment|Average age|10|10|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|

(3) See Note V. 18 for the depreciation testing and provision method for fixed assets.
China Fangda Group Co., Ltd. 2016 Annual Report (4) At end of each fiscal year, verification will be made on the useful life, predicted retained value, and depreciation basis.
The useful life will be adjusted if the useful life is different from the predicted one; the net residual value will be adjusted if the net residual value is different from the predicted one.
(5) Overhaul cost
Overhaul cost generated by regular examination on fixed assets is recognized as fixed assets costs when there is evidence proving that it meets fix assets recognition conditions. If not, it will be accounted into the current gain/loss account. Depreciation provision will be made for fixed assets between two regular overhauls.
15. Construction in process
Whether the Company needs to comply with disclosure requirements of special industries
Yes
Property development and decoration industries
The Group recognizes the cost of construction in process according to the actual construction expense, including necessary engineering expenses, borrowing costs to be capitalized before the engineering reaches the preset service condition and other related costs.
Construction in process will be transferred to fixed assets when it reaches the preset service condition.
See Note V. 18 for the provision method for construction in process. 16. Borrowing expenses
(1) Recognition principles for capitalization of borrowing expenses
Borrowing expenses occurred to the Group that can be accounted as purchasing or production of asset satisfying the conditions of capitalizing, are capitalized and accounted as cost of related asset.Borrowing expenses start to be capitalized when all of the followings are satisfied:
(1) Asset expense has already occurred. Asset expenses include cash payment, non-cash asset transferring, or undertaking of debt with interest done for purchasing or producing of assets;
(2) The borrowing expense has already occurred;
(3) Purchasing or production activity, which is necessary for the asset to reach the useful status, has already started.
(2) During borrowing expense capitalization
When the asset satisfying the capitalizing conditions has reached its usable or sellable status, capitalizing of borrowing expenses shall be terminated. Borrowing expenses incurred after assets that meet capitalization conditions reach the service or sales conditions are accounted into the current gain/loss account according to the actual amounts.
If the construction or production of assets satisfying the capitalizing conditions is suspended abnormally for over 3 months, capitalizing of borrowing expenses shall be suspended. During the normal suspension period, borrowing expenses will be capitalized
China Fangda Group Co., Ltd. 2016 Annual Report continuously.
(3) Calculation of the capitalization amount of borrowing expense
Interest expenses generated by special borrowings less the interests income obtained from the deposit of unused borrowings or investment gains from temporary investment is capitalized; the capitalization amount for general borrowing is determined based on the capitalization rate which is the exceeding part of the accumulative assets expense over weighted average of the assets expense of the special borrowing/used general borrowing. The capitalization ratio is the weighted average interest rate of general borrowings. In the capitalization period, the exchange difference of special borrowings in foreign currencies should be fully capitalized. The exchange difference should be recorded in the profit and loss of this period.
17. Intangible assets
(1) Pricing method, service life and depreciation test
TheGroup’s intangible assets include land using rights, trademarks, patent, special technologies, and software.
Intangible assets are initially measured at costs and the useful life will be determined when obtained. Where the useful life is limited, the intangible assets will be amortized within the predicted useful life by using the amortization method that can reflect predicted realization way of the economic benefit of the assets; whether the realization way cannot be reliably confirmed, use the straight-line method. If the useful life is uncertain, the intangible assets are not amortized.
Intangible assets with limited useful life are amortized as followings:
Type Useful life Basis of amortization Land using right Beneficial age Average age Trademarks and patents 10 Average age Proprietary technology 10 Average age Software 5, 10 years Average age At the end of each year, the Group will reexamine the useful life and amortization basis of intangible assets with limited useful life. If they change, adjust the prediction and handle it according to accounting estimate changes.
On the balance sheet day, if the intangible assets become unlikely to bring future economic benefits for the Group, transfer all the intangibleassets’ book value into the current gain/loss account.
See Note V. 18 for the impairment provision method for intangible assets.
(2) Accounting policies for internalR&D expenses
The Group divides internalR&D project expenses into research and development expenses.
The research expenses are accounted the current gain/loss account.
China Fangda Group Co., Ltd. 2016 Annual Report Development expenses can only be capitalized when the following conditions are satisfied: the technology is feasible for use or sales; there is the intention to use or sell the intangible assets; it can be proven that the product generated by the intangible assets is demanded or the intangible assets in demanded; if the intangible is used internally, it can be proven that it is useful; with necessary technical and financial resources and other resources to complete the development of the intangible assets and the intangible assets can be used or sold; the development expense can be reliably measured. If not, the development expense is accounted into the current gain/loss account.
If a research project meets the above-mentioned conditions and passes the technical and economic feasibility study, the project will enter the development stage.
Expenses in the development stage capitalized are listed as development expense on the balance sheet and transferred to intangible assets when the project reaches the useful condition.
18. Assets impairment
The Group uses the cost mode to continue measuring the assets impairment to investment real estatement, fixed assets construction in progress, intangible assets and goodwill (except for the inventories, investment real estate measured by the fair value mode, deferred income tax assets and financial assets). The method is determined as follows:
The Group judges whether there is a sign of impairment to assets on the balance sheet day. If such sign exists, the Group estimates the recoverable amount and conducts the impairment test. Impairment test is conducted annually for goodwill generated by mergers and intangible assets that have not reached the useful condition no matter whether the impairment sign exists.
The recoverable amount is determined by the higher of the net of fair value minus disposal expense and the present value of the predicted future cash flow. The Group estimates the recoverable amount on the individual asset item basis; whether it is hard to estimate the recoverable amount on the individual asset item basis, determine the recoverable amount based on the asset group that the assets belong to. The assets group is determined by whether the main cash flow generated by the group is independent from those generated by other assets or assets groups.
When the recoverable amount of the assets or assets group is lower than its book value, the Group writes down the book value to the recoverable amount, the write-down amount is accounted into the current income account and the assets impairment provision is made.
For goodwill impairment test, the book value of goodwill generated by mergers is amortized through reasonable measures since the purchase day to related asset groups; those cannot be amortized to related assets groups are amortized to related combination of asset groups. The related asset groups or combination of asset groups refer to those that can benefit from the synergistic effect of mergers and must not exceed to the reporting range determined by the Group.
When the impairment test is conducted, if there is sign of impairment to the asset group or combination of asset groups related to goodwill, first perform impair test for asset group or combination of asset groups without goodwill and calculate the recoverable amount and recognize the related impairment loss. Then conduct impairment test on those with goodwill, compare the book value with recoverable amount. If the recoverable amount is lower than the book value, recognize the impairment loss of the goodwill. Once recognized, the asset impairment loss cannot be written back in subsequent accounting period.
China Fangda Group Co., Ltd. 2016 Annual Report 19. Long-term amortizable expenses
TheGroup’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 toemployees’ wages and bonus and recognizes them as liabilities, which are recorded into the profit and loss or related assets costs in the current period. If the liabilities cannot be fully paid within 12 months upon the end of the report period in which the employees provide service, and the financial impacts are substantial, the liabilities should be measured at the discounted amount.
(2) Accounting of post-employment welfare
The post-employment welfare of the Group is a defined plan, which means that the Company does not need to assume any responsibility after making fixed contribution to an independent fund. The defined plan includes basic pension and unemployment insurance. The contribution of the plan is recognized as liabilities and recorded in the profit and loss of this period or related assets costs.
(3) Accounting of dismiss welfare
Where the Group provides dismiss welfare for employees, the staff remuneration liabilities is recognized on the earlier one of the following two date: when the Group cannot cancel the dismiss welfare provided for termination of employment or layoff; when the Group recognizes the costs or expenses of reorganization related to the payment of dismiss welfare.
21. Anticipated liabilities
When responsibilities occurred in connection to contingent issues, and all of the following conditions are satisfied, they are recognized as expectable liability in the balance sheet:
(1) This responsibility is a current responsibility undertaken by the Group;
(2) Execution of this responsibility may cause financial benefit outflow from the Group;
(3) Amount of the liability can be reliably measured.
Expected liabilities are initially measured at the best estimation on the expenses to exercise the current responsibility. The book value of expected liability is revised at balance sheet day, and adjustment will be made to reflect current best estimation.
22. Revenue
Whether the Company needs to comply with disclosure requirements of special industries
Yes
China Fangda Group Co., Ltd. 2016 Annual Report Property development and decoration industries
The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure Guideline No.6– Listed Companies Engaged in Decoration Business.
(1) General principles
1. Sales of goods
When all of the following conditions are satisfied, the sales of goods are recognized as sales income according to the contract amount received or receivable from the buyer: (1) Main risks and rewards attached to the ownership of the goods have been transferred to the buyer; (2) No succeeding power of administration or effective control is reserved which are usually attached to ownership; (3) Amount received can be reliably measured; (4) Related financial benefit may inflow to the Company; (5) Relative costs, occurred or will occur, can be reliably measured.
2. Providing of labor service
If they are not in the same year, then use the estimation on percentage basis when it is possible.
The completion percentage is the costs occurred on the total cost.
The reliable estimation of the result of providing of labor service must meet the following conditions: A. the revenue can be reliably measured; B. the economic benefit is very likely to flow into the company; C. the completion can be determined reliably; D. costs incurred or will be incurred can be reliably measured.
If the result cannot be reliably estimated, use the service cost amount of the compensation obtained or will be obtained to recognize the revenue of the providing of labor service and recognize the incurred laber service cost as the current expense. If no compensation can be obtained for incurred labor service cost, no revenue can be recognized.
3. Demising of asset using rights
The revenue is recognized when the financial benefit in connection with the demising of asset using right was received and the amount can be reliably measured.
4. Construction contracts
On the balance sheet day, the Group recognizes the contract income and costs using the completion percentage method if the result of the construction contract can be reliably estimated. If not, such contracts are treated differently. If the contract cost can be recovered, the revenue is recognized according to the actual contract costs that can be recovered and the contract cost is recognized as the current expense; if not, the contract cost is recognized as the current expense and no revenue is recognized.
If the estimated total costs exceed the total revenue, the Group recognizes the estimated loss as the current expense.
The competition percentage is determined by the share of the costs incurred in the total cost.
The reliable estimation of the result of a construction contract must meet the following conditions: A. the revenue can be reliably measured; B. the economic benefit is very likely to flow into the company; C. the completion cost can be clearly distinguished and determined reliably; D. the completion and costs that will be incurred for completion of the contract can be reliably recognized. (2) Specific revenue recognition method
China Fangda Group Co., Ltd. 2016 Annual Report① Construction contracts
Metro screen door projects of the Company and Shenzhen Fangda Automatic System, and curtain wall project of Fangda Jianke are individual construction contracts. They are accounted by the following means:
Construction contracts completed within a fiscal year are recognized for their income and cost upon completion.
Income and expenses of the construction contracts carried over-year are recognized on percentage basis at balance sheet day when all of the following conditions are satisfied: contract income can be reliably measured, relative financial benefit can inflow to the Company; progress of the project and costs to complete the contract can be reliably recognized; cost occurred to complete the contract can be clearly distinguished and reliably measured, which enables comparing of actual cost with predicted cost.
Contract costs are direct and indirect expenses occurred since the date when the contract is engaged till the completion day. The competition percentage is determined by the share of the costs incurred in the total cost.
Construction contracts completed in current term are recognized for income according to the actual total income of the contract less income recognized in previous terms; meanwhile, the total costs of the contract less costs recognized in previous terms are recognized as current contract costs. If the total contract cost is predicted to be greater than the predicted total income, the predicted loss shall be recognized as current cost instantly.
Parts of the curtain wall project under Fangda Jianke are outsourced, and administrative fees are collected at the agreed rate. For these construction contracts, income will be recognized when ongoing payment for the project is received and corresponding costs are transferred.
② Sales product
Revenue of products for domestic sales is recognized when the Group delivers the products and receives the sales payment or obtains the payment voucher; revenue for products for overseas sales is recognized at departure of the products.
③ Real estate sales
房地产销售收入于签订合同并履行合同规定的义务，开发产品已完工并取得竣工验收备案（回执），办理了交付手续或者可以根据购房合同约定的条件视同客户接收，款项已经取得或者确信可以取得，成本能够可靠的计量时确认。
23. Government subsidy
(1) Judgment basis and accounting treatment of assets-related government subsidy
Government subsidy is only recognized when the required conditions are met and the subsidy is received.
When a government subsidy is monetary capital, it is measured at the received or receivable amount. When there is no clear evidence indicating compliance with related conditions for governmental support and it is estimated that the Company can receive a government subsidy, it will be measured at the receivable amount. Otherwise, it is measured at the amount actually received. None monetary capital are measured at fair value; if no reliable fair value available, recognized at RMB1.
Government subsidies related to assets are obtained by the Group to purchase, build or formulate in other manners long-term assets;
China Fangda Group Co., Ltd. 2016 Annual Report or subsidies related to benefits.
For subsidies that can formulate long-term assets without clear government regulations, the part of the subsidies corresponding to the asset value will be measured as assets-related government subsidies, while the rest of them will be measured as benefit-related government subsidies. Where it is difficult to distinguish them from each of them, the whole subsidies will be measured as benefit-related government subsidies.
Government subsidies in connection with capital are recognized as differed income, and amortized straight to its useful life, and accounted into current income account.
(2) Judgment basis and accounting treatment of return-related government subsidy
Government subsidies in connection with gains, which are used to cover current expenses or losses, are recognized as current gain/loss, if used to cover future expenses or losses, recognized as differed gains, and recorded to current income account to the period when the expenses are recognized. Government subsidy measured at the nominal amount is accounted into current income account.
24. Differed income tax assets and differed income tax liabilities
Income tax includes current and deferred income taxExcept for the adjustment goodwill generated by mergers or deferred income tax related to transactions or events directly accounted into theowners’ equity, income tax is accounted as income tax expense into the current gain/loss account.
The Group uses the temporary difference between the book value of the assets and liabilities on the balance sheet day and the tax base and the liabilities method to recognize the deferred income tax.
The taxable temporary difference recognizes the related deferred income tax liabilities, unless the taxable temporary difference is created by the following transactions:
(1) Initial recognition of goodwill, or of assets or liabilities generated in transactions with the following features: the transaction is not a merger and the transaction does not affect the accounting profit or taxable proceeds;
(2) For taxable temporary difference related to investment in subsidiaries and affiliates, the reversal timing for the temporary difference can be controlled and the difference is unlikely to be reversed in the foreseeable future.
For deductible temporary difference, deductible loss and tax deduction that can be accounted in subsequent years, the Group recognizes the incurred deferred income tax assets to the extent to the future income tax proceeds that is very likely to be received for deducting deductible temporary difference, deductible loss and tax deduction, unless the deductible temporary difference is generated in following transactions:
(1) the transaction is not a merger and the transaction does not affect the accounting profit or taxable proceeds;
(2) for the taxable temporary difference related to investment in subsidiaries and affiliates, the corresponding deferred income tax assets are recognized when the following condition is met: the temporary difference is very likely to be reversed in the foreseeable future and it is very likely to receive the taxable proceeds that can be used to deduct the deductible temporary difference.
On the balance sheet day, the Group measures the deferred income tax assets and liabilities with the tax rate applicable during the
predicted period during which the assets are recovered or the liabilities are paid off and reflects the income tax influence of the assets
China Fangda Group Co., Ltd. 2016 Annual Report recovery and liabilities repayment way on the balance sheet day.
On the balance sheet day, the Group re-examines the book value of the deferred income tax assets. If it is unlikely to have adequate taxable proceeds to reduce the benefits of the deferred income tax assets, less the deferred income taxassets’ book value. When there is adequate taxable proceeds, the lessened amount will be reversed.
25. Leasing
(1) Accounting of operational leasing
The Group transfers all the risks and rewards attached to the asset at substantially transferred to the lessee, it is recognized as financial leasing, and the others are operational leasing.
(1) The Group is the leasor
In financial leasing, the book value of financial rental is the sum of lowest amount of the rent and the initial expenses since the date when the lease is started. The difference between the sum of lowest rental, initial direct expense and unsecured balance and the current value is recognized as the unrealized financial income. Unrealized financial income is recognized as financial income at actual interest basis to the periods of the leasing period.
Rentals from operational leasing are recognized as current gains on straight basis to the periods of leasing. Initial direct expenses are recorded to current income account.
(2) The Group is the leasee
The Group measures the leased assets as the lower of the fair value and the present value of minimum lease payment of the leased assets on the starting date of the lease and records the minimum lease payment as long-term payable and the difference between the two as unrecognized financing expense. The initial direct expense is accounted into asset value. Unrecognized financial cost is recognized as financial cost at actual interest basis to the periods of the leasing period. The Group adopts the depreciation policy same as the self-owned fixed assets to made provision for depreciation of leased assets.
Rentals in operational leasing are recorded to relative capital cost or current income account on straight basis to the periods of leasing. Initial direct expenses are recorded to current income account.
26. Other significant accounting policies and estimates
Significant accounting judgment and estimate
The Group continuously reviews significant accounting judgment and estimate adopted for the reasonable forecast of future events based on its historical experience and other factors.
Significant accounting judgment and assumptions that may lead to major adjustment of the book value of assets and liabilities in the next accounting year are listed as follows:
(1) Goodwill impairment
China Fangda Group Co., Ltd. 2016 Annual Report The Group judges whether there is impairment to goodwill at least annually. This required valuation of the use value of the asset groups with goodwill. While estimating the use value, the Group needs to estimate the cash flow from the asset group in the future and choose the proper discount rate to calculate the present value of the future cash flow.
(2) Estimate of fair value
The Group uses fair value to measure investment real estate and needs to estimate the fair value of investment real estate at least quarterly. This requires the management to reasonably estimate the fair value of the investment real estate with the half of valuation experts.
(3) Deferred income tax assets
If there is adequate taxable profit to deduct the loss, the deferred income tax assets should be recognized by all the unused tax loss. This requires the management to make a lot of judgment to forecast the time and amount of future taxable profit and determine the amount of the deferred tax assets based on the taxation strategy.
(4) Construction contracts
The Group recognizes income based on the completion of individual construction contract. The management determines the completion percentage based on the actual cost in the total budget and forecasts the contract income. The starting and completion dates of construction contracts fall in different account periods. The Group will review and adjust contract income and cost estimation in budgets (if the actual contract income is less than the estimate or actual contract cost, contract estimation loss provision will be made).
(5) Development cost
(6) Accounting of hedging
When the hedge relationship begins, the Group specifies the hedge relationship in writing to specify the follow: risks management target and hedging strategy; nature of the hedged item and quantity; nature and quantity of hedging instruments, nature and identification of hedged risks; evaluation of the hedging effectiveness, including the economic relationship between the hedged item and hedging instrument, hedging ratio, analysis of the hedging ineffectiveness source; the beginning date of the specified hedging relationship.
Cash flow hedging
During the existence of the hedging relationship, the part of the cumulative gain or loss of the hedging instrument within the change to the current value of the cumulative cash flow of the hedged item is included into other misc. incomes. The part that is lower or larger than the cash flow change is included into the gain or loss of the current period.
When the hedging relationship ends and related inventory is recognized, the hedging instrument gain or loss recognized in―Other misc. income hedgingreserve‖ will be transferred to―Rawmaterials‖.
China Fangda Group Co., Ltd. 2016 Annual Report 27. Major changes in accounting policies and estimates
(1) Changes in accounting policies
√ Applicable□ Inapplicable
||||
|-|-|-|
|Account policy changes and reasons|Approval procedure|Notes|
|According to the Notice on Increasing|||
|Pilot Points of Business Tax/VAT Reform|||
|(Tax Doc No. 36 (2016)), transactions|||
|related to VAT that occur after May 1, 2016|||
|with impacts on assets and liabilities need|||
|to be adjusted. The item ―Business taxes|||
|and surcharge‖ in the income statement is|||
||26th meeting of the 7th Board of Directors||
|adjusted to the item ―Taxes and|||
|surcharges‖. Related taxes originally|||
|included in management expense such as|||
|property tax, land use tax, vehicle and|||
|vessel use tax and stamp tax will be|||
|included in the item ―Taxes and|||
|surcharges‖ from May 1, 2016.|||
|According to the Temporary Provisions on|||
|the Accounting of Commodity Futures|||
|Hedging (Accounting Doc No.18 [2015]),|||
|the Group needs to comply with all|||
|applicable provisions. The Group will no|||
|longer implement the Enterprise|||
|Accounting Standard No.24 – Hedging and|||
|Enterprise Accounting Standard No.37 –|||
|Presentation of Financial Tools for|||
|disclosure of hedging affairs.|||

Account policy changes and reasons Affected item Affected amount According to the Notice on Increasing Pilot Points of 1. Taxes and 4,930,917.47 Business Tax/VAT Reform (Tax Doc No. 36 (2016)), surcharges
transactions related to VAT that occur after May 1, 2016 2. Administrative -4,930,917.47 with impacts on assets and liabilities need to be expense
adjusted. The item―Business taxes andsurcharge‖ in
the income statement is adjusted to the item―Taxes and
surcharges‖. Related taxes originally included in
management expense such as property tax, land use tax,
vehicle and vessel use tax and stamp tax will be
included in the item―Taxes andsurcharges‖ from May
1, 2016.
According to the Temporary Provisions on the 1. Taxes payable 31,591.36
China Fangda Group Co., Ltd. 2016 Annual Report Accounting of Commodity Futures Hedging 2. Deferred income tax -10,098.92 (Accounting Doc No.18[2015]), the Group needs to liabilities
comply with all applicable provisions. The Group will 3. Other miscellaneous 214,369.04 no longer implement the Enterprise Accounting income
Standard No.24– Hedging and Enterprise Accounting
4. Surplus reserves -23,586.15 Standard No.37– Presentation of Financial Tools for
5. Retained profit -212,275.33 disclosure of hedging affairs.
(2) Changes in major accounting estimates
□ Applicable√ Inapplicable
VI. Taxation
1. Major taxes and tax rates
||||
|-|-|-|
|Tax|Tax basis|Tax rate|
|VAT|Taxable income|3%、5%、6%、11%、13%、17%|
|City maintenance and construction tax|Taxable turnover|1%、5%、7%|
|Enterprise income tax|Taxable income|15%、25%|
|Business tax|Taxable income|3%、5%|
|Education surtax|Taxable turnover|3%|
|Local education surtax|Taxable turnover|2%|

Tax rates applicable for different tax payers
|||
|-|-|
|Tax payer|Income tax rate|
|The Company|25%|
|Shenzhen Fangda Jianke Group Co., Ltd.|15%|
|Shenzhen Fangda Automation System Co., Ltd.|15%|
|Shenzhen Woke Semi-conductor Lighting Co., Ltd.|25%|
|Fangda New Materials (Jiangxi) Co., Ltd.|15%|
|Jiangxi Fangda New Type Aluminum Co., Ltd.|25%|
|Shenyang Fangda Semi-conductor Lighting Co., Ltd.|25%|
|Dongguan Fangda New Material Co., Ltd.|25%|
|Shenzhen Kexunda Software Co., Ltd.|25%|
|Chengda Fangda Construction Technology Co., Ltd.|15%|
|Fangda Decoration Engineering (Shenyang) Co., Ltd.|25%|
|Shenzhen Fangda Property Development Co., Ltd.|25%|
|Shenzhen Fangda New Energy Co., Ltd.|25%|

China Fangda Group Co., Ltd. 2016 Annual Report
|||
|-|-|
|Guangdong Fangda SOZN Lighting Co., Ltd.|25%|
|Shenzhen Fangda Property Management Co., Ltd.|25%|
|Jiangxi Fangda Property Development Co., Ltd.|25%|
|Ganzhou Longneng New Energy Co., Ltd.|25%|
|Pingxiang Fangda Luxin New Energy Co., Ltd.|25%|
|Pingxiang Xiangdong Fangda New Energy Co., Ltd.|25%|
|Nanchang Xinjian Fangda New Energy Co., Ltd.|25%|
|Dongguan Fangda New Energy Co., Ltd.|25%|
|Shenzhen Qianhai Kechuangyuan Software Co., Ltd.|15%|

2. Tax preference
(1) According to the Certification of High-tech Enterprise issued by Shenzhen Commission of Technological Innovation, Shenzhen Commission of Finance, Shenzhen National Tax Bureau, and Shenzhen Local Tax Bureau on 19.06.15, Fangda Jianke was entitled to enjoy a tax preference of enterprise income tax of15% 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 of15% for three years (2015-2017) since the qualifications were awarded. (3) According to the Certification of High-tech Enterprise issued by Jiangxi Ministry of Science and Technology, Jiangxi Ministry of Finance, Jiangxi National Tax Bureau, and Jiangxi Local Tax Bureau on 25.09.15, Fangda New Material was entitled to enjoy a tax preference of enterprise income tax of15% 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 and50% reduction of the same tax for another three years from the year that the company starts making a net profit. Kexunda started making profits in 2013 and therefore starts to enjoy the exemption. Kexunda entered the semi-exemption period in 2015.
(5) On November 7, 2014, Chengdu Fangda was certified by Sichuan Xinjin National Tax Bureau as an encourage industry company in the west China (Xin Jin National Tax Doc.[zzy024]) and started to enjoy a tax rate of15%.
(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 and50% reduction for another three years. In 2016, the company entered the exemption period.
(8) On 02.06.16, according to the document issued by Nanchang Xinjian District National Tax Bureau, the PV power generation
project undertaken by subsidiary Xinjian New Energy Company, became the infrastructure project supported by the central
China Fangda Group Co., Ltd. 2016 Annual Report government. The company enjoys a three-year enterprise income tax relief and50% reduction for another three years. In 2016, the company entered the exemption period.
(9) On 10.03.17, according to the registration to Shenzhen National Tax Bureau, subsidiary Kechuangyuan Software became a newly established software and integrated circuit designing company and can enjoy the two-year full exemption and three-year half-exemption of the enterprise income tax from the first year that the company records profit. Kexunda started making profits in 2016 and therefore starts to enjoy the exemption.
VII. Notes to the consolidated financial statements
1. Monetary capital
In RMB
||||
|-|-|-|
|Items|Closing balance|Opening balance|
|Inventory cash:|11,625.54|28,072.46|
|Bank deposits|932,709,227.42|266,315,876.39|
|Other monetary capital|162,508,984.94|134,609,388.47|
|Total|1,095,229,837.90|400,953,337.32|
|Including: total amount deposited in|||
||27,553,060.26|5,722,165.37|
|overseas|||

Other note
1. A bank deposit of RMB728,405.91 of Fangda SOZN was frozen by the court due to a lawsuit.
2. The closing balance of the book value of the other monetary capital RMB162,508,984.94 is mainly the futures, bank acceptance bill and guarantee deposit and investment, including a deposit of RMB158,676,856.59. The deposit and frozen deposit shall not be treated as cash and cash equivalent in the preparation of cash flow statements.
3. The closing monetary capital increased173.16% by the beginning of year, which is main attributable to payments received from sales of development products of Fangda Property.
2. Financial assets measured at fair value with variations accounted into current income account
In RMB
||||
|-|-|-|
|Items|Closing balance|Opening balance|
|Transactional financial assets||14,546,206.58|
|Investment in equity tools||14,546,206.58|
|Total||14,546,206.58|

 Others:
The closing balance is the fair value of the shares of SINO OIL& GAS acquired by Shihui International Holding Co., Ltd.
China Fangda Group Co., Ltd. 2016 Annual Report 3. Derivative financial assets
√ Applicable□ Inapplicable
In RMB
||||
|-|-|-|
|Items|Closing balance|Opening balance|
|Futures contracts|2,232,200.00||
|Total|2,232,200.00||

Others:
It is mainly attributable to the cash flow hedging on aluminum futures contracts conducted by Fangda Jianke and Fangda New Material.
4. Notes receivable
(1) Classification of notes receivable
In RMB
||||
|-|-|-|
|Items|Closing balance|Opening balance|
|Bank acceptance|11,819,567.96|10,289,884.74|
|Commercial acceptance|7,078,538.15|86,957,775.82|
|Total|18,898,106.11|97,247,660.56|

 (2) The Group has no endorsed or discounted immature receivable notes at the end of the period.
In RMB
||||
|-|-|-|
|Items|De-recognized amount|Not de-recognized amount|
|Bank acceptance|55,472,384.90||
|Commercial acceptance|32,130,840.26|1,000,000.00|
|Total|87,603,225.16|1,000,000.00|

 (3) Notes transferred to accounts receivable due to default of the issue at the end of period
In RMB
|||
|-|-|
||Amount transferred to accounts receivable at the end of the|
|Items||
||period|
|Commercial acceptance|8,219,684.36|
|Total|8,219,684.36|

China Fangda Group Co., Ltd. 2016 Annual Report 5. Account receivable
(1) Account receivable disclosed by categories
In RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Closing balance|||||Opening balance|||||
||Remaining book|||||Remaining book|||||
||||Bad debt provision|||||Bad debt provision|||
|Type|value||||Book|value|||||
|||||||||||Book value|
|||Proportio||Provision|value||Proportio||Provision||
||Amount||Amount|||Amount||Amount|||
|||n||rate|||n||rate||
|Recognition and||||||1,611,9|||||
||2,573,18||230,259,||2,342,929|||206,824,1||1,405,151,1|
|providing of bad debt||98.35%||8.95%||75,331.|99.41%||12.83%||
||8,876.31||248.17||,628.14|||97.04||34.89|
|provisions on groups||||||93|||||
|Account receivable|||||||||||
|with minor individual|||||||||||
||43,290,08||43,290,08|||9,541,6||8,974,655|||
|amount and bad debt||1.65||100.00%|0.00||0.59%||94.06%|567,000.00|
||6.64||6.64|||55.45||.45|||
|provision provided|||||||||||
|individually|||||||||||
||||||2,342,929,628.14|1,621,5||||1,405,718,134.89|
||2,616,478,||273,549,3|||||215,798,8|||
|Total||100||10.45%||16,987.|100.00%||13.31%||
||962.95||34.81|||||52.49|||
|||||||38|||||

Account receivable with major individual amount and bad debt provision provided individually at the end of the period:
□ Applicable√ Inapplicable
In the group, the account receivable of which bad debt provision is made through the account aging method:
√ Applicable□ Inapplicable
In RMB
|||||
|-|-|-|-|
||Closing balance|||
|Age||||
||Account receivable|Bad debt provision|Provision rate|
|Sub-item of within 1 year||||
|Subtotal for less than 1 year|1,787,613,339.00|54,940,714.86|3.07%|
|1-2 years|460,357,808.24|46,035,780.83|10.00%|
|2-3 years|166,630,560.32|49,989,168.10|30.00%|
|Over 3 years|158,587,168.75|79,293,584.38|50.00%|
|Total|2,573,188,876.31|230,259,248.17|8.95%|

 Group recognition basis:
Account receivable adopting the balance percentage method in the group
□ Applicable√ Inapplicable
Account receivable adopting other methods in the group:
China Fangda Group Co., Ltd. 2016 Annual Report (2) Bad debt provision made, returned or recovered in the period
A bad debt provision of RMB114,377,848.44 was made in the period. RMB0.00 was recovered or reversed.
(3) Written-off account receivable during the period
In RMB
|||
|-|-|
|Items|Amount|
|Account receivable written off|49,724,837.98|

 Including significant account receivable:
In RMB
|||||||
|-|-|-|-|-|-|
|||||Writing-off||
|Entity|Nature|Amount|Reason||Related transaction|
|||||procedure||

Notes to written-off account receivable
(4) Balance of top 5 accounts receivable at the end of the period
The total balance of top-five accounts receivable at the end of the period is RMB617,312,381.69, accounting for23.59% of the total remaining balance of all accounts receivable. The bad debt provision made at the end of the period is RMB22,230,971.80.
6. Prepayment
(1) Account age of prepayments
In RMB
||||||
|-|-|-|-|-|
||Closing balance||Opening balance||
|Age|||||
||Amount|Proportion|Amount|Proportion|
|Less than 1 year|28,442,485.03|90.22%|23,448,649.55|73.89%|
|1-2 years|1,224,651.51|3.88%|3,490,224.16|12.05%|
|2-3 years|540,874.20|1.72%|1,418,149.13|5.15%|
|Over 3 years|1,318,315.51|4.18%|1,700,041.06|8.91%|
|Total|31,526,326.25|--|30,057,063.90|--|

Explanation of non-settlement of significant prepayments with an accounting age of more than 1 year:
(2) Balance of top 5 prepayments at the end of the period
The total of top5 prepayments in terms of the prepaid entities in the period is RMB13,124,327.58, accounting for41.63% of the total prepayments at the end of the period.
Others:
China Fangda Group Co., Ltd. 2016 Annual Report 7. Receivable interest
(1) Receivable interest
In RMB
||||
|-|-|-|
|Items|Closing balance|Opening balance|
|Bank financial products|302,950.68||
|Total|302,950.68||

8. Other receivables
(1) Other receivables disclosed by categories
In RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Closing balance|||||Opening balance|||||
||Remaining book|||||Remaining book|||||
||||Bad debt provision|||||Bad debt provision|||
|Type|value||||Book|value|||||
|||||||||||Book value|
|||Proportio||Provision|value||Proportio||Provision||
||Amount||Amount|||Amount||Amount|||
|||n||rate|||n||rate||
|Recognition and|||||||||||
||67,471,2||10,092,2||57,378,99|65,503,||12,407,63||53,095,948.|
|providing of bad debt||98.79%||14.96%|||99.78%||18.94%||
||44.99||50.27||4.72|587.52||9.06||46|
|provisions on groups|||||||||||
|Other receivables|||||||||||
|with minor individual|||||||||||
||825,887.||825,887.|||146,100||146,100.9|||
|amount and bad debt||1.21%||100.00%|0.00||0.22%||100.00%|0.00|
||03||03|||.95||5|||
|provision provided|||||||||||
|individually|||||||||||
||68,297,1||10,918,1||57,378,994.72|65,649,||12,553,74||53,095,948.46|
|Total||100.00%||15.99%|||100.00%||19.12%||
||32.02||37.30|||688.47||0.01|||

 Other receivables with major individual amount and bad debt provision provided individually at the end of the period:
□ Applicable√ Inapplicable
In the group, the other receivables of which bad debt provision are made through the account aging method:
√ Applicable□ Inapplicable
In RMB
|||||
|-|-|-|-|
||Closing balance|||
|Age||||
||Other receivables|Bad debt provision|Provision rate|
|Sub-item of within 1 year||||
|Subtotal for less than 1 year|35,553,273.10|1,114,262.43|3.13%|
|1-2 years|16,283,309.86|1,628,330.99|10.00%|

China Fangda Group Co., Ltd. 2016 Annual Report
|||||
|-|-|-|-|
|2-3 years|2,338,370.89|701,511.28|30.00%|
|Over 3 years|13,296,291.14|6,648,145.57|50.00%|
|Total|67,471,244.99|10,092,250.27|14.96%|

 Group recognition basis:
Other receivables adopting the balance percentage method in the group:
□ Applicable√ Inapplicable
Other receivables adopting other methods in the group
□ Applicable√ Inapplicable
(2) Bad debt provision made, returned or recovered in the period
A bad debt provision of RMB4,319,687.39 was made in the period. RMB0.00 was recovered or reversed.
(3) Other receivable written off in the current period
In RMB
|||
|-|-|
|Items|Amount|
|Other receivable written off|5,492,205.48|

 Including significant other receivable:
In RMB
|||||||
|-|-|-|-|-|-|
|||||Writing-off||
|Entity|Nature|Amount|Reason||Related transaction|
|||||procedure||

Notes to written-off other receivables:
(4) Other receivables are disclosed by nature
In RMB
||||
|-|-|-|
|By nature|Closing balance of book value|Opening balance of book value|
|Deposit|35,468,468.79|36,529,862.27|
|Construction borrowing and advanced|||
||16,300,394.58|17,242,358.04|
|payment|||
|Staff borrowing and petty cash|2,954,984.22|3,062,219.75|
|Receivable refund of VAT|1,949,939.35|80,888.90|
|Others|11,623,345.08|8,734,359.51|
|Total|68,297,132.02|65,649,688.47|

 (5) Balance of top 5 other receivables at the end of the period
In RMB
China Fangda Group Co., Ltd. 2016 Annual Report
|||||||
|-|-|-|-|-|-|
||||||Balance of bad debt|
|Entity|By nature|Closing balance|Age|Percentage (%)|provision at the end|
||||||of the period|
|Lanzhou Railway||||||
||Deposit|6,931,316.60|1-2 years|10.15%|693,131.66|
|Transport Co., Ltd.||||||
|China Merchants||||||
|Futures Brokerage|Futures margin|6,806,153.50|Less than 1 year|9.97%|204,184.61|
|Co., Ltd.||||||
||Advanced|||||
|Wang Weihong||4,944,388.15|Over 3 years|7.24%|2,472,194.08|
||construction fee|||||
||Real estate sales|||||
|Sun Quan||3,230,961.00|Less than 1 year|4.73%|96,928.83|
||payment|||||
||Advanced|||||
|Xin Song||2,620,327.61|Over 5 years|3.84%|1,310,163.81|
||construction fee|||||
|Total|--|24,533,146.86|--|35.93%|4,776,602.99|

 9. Inventories
(1) Classification of inventories
In RMB
||||||||
|-|-|-|-|-|-|-|
||Closing balance|||Opening balance|||
|Items|Remaining book|Depreciation||Remaining book|Depreciation||
||||Book value|||Book value|
||value|provision||value|provision||
|Raw materials|83,474,670.86|1,776,760.32|83,474,670.86|85,916,458.16|7,069,471.61|78,846,986.55|
|Product in|||||||
||16,439,362.04||16,439,362.04|6,971,619.92||6,971,619.92|
|process|||||||
|Finished goods in|||||||
||8,845,931.76||8,845,931.76|18,325,455.59|5,513,219.11|12,812,236.48|
|stock|||||||
|Assets unsettled|||||||
|for finished|||||||
||186,288,217.00||186,288,217.00|226,526,505.83|1,830,742.67|224,695,763.16|
|construction|||||||
|contracts|||||||
|Low price|||||||
||73,018.52||73,018.52|69,223.68||69,223.68|
|consumable|||||||
|OEM materials|2,206,059.11|1,499,169.52|706,889.59|8,791,959.78|1,218,716.77|7,573,243.01|
|Development cost|1,116,777,166.82||1,116,777,166.82|986,708,925.20||986,708,925.20|
|Goods delivered|35,068,431.20|35,068,431.20|0.00|28,913,305.53||28,913,305.53|
|Development|579,792,563.00||579,792,563.00||||

China Fangda Group Co., Ltd. 2016 Annual Report
||||||||
|-|-|-|-|-|-|-|
|products|||||||
|Total|2,028,965,420.31|38,344,361.04|1,990,621,059.27|1,362,223,453.69|15,632,150.16|1,346,591,303.53|

 (2) Inventory depreciation provision
In RMB
||||||||
|-|-|-|-|-|-|-|
|||Increase in this period||Decrease in this period|||
|Items|Opening balance|||Recover or||Closing balance|
|||Provision|Others||Others||
|||||write-off|||
|Raw materials|7,069,471.61|||2,948,564.64|2,344,146.65|1,776,760.32|
|Finished goods in|||||||
||5,513,219.11|||3,161,391.39|2,351,827.72||
|stock|||||||
|Assets unsettled|||||||
|for finished|||||||
||1,830,742.67||||1,830,742.67||
|construction|||||||
|contracts|||||||
|Goods delivered||35,068,431.20||||35,068,431.20|
|OEM materials|1,218,716.77|280,452.75||||1,499,169.52|
|Total|15,632,150.16|35,348,883.95||6,109,956.03|6,526,717.04|38,344,361.04|

||||
|-|-|-|
|Item|Basis for recognition of net realizablevalue|Reason|
|Raw materials|Realizable net value is lower the cost|Used or disposed|
|Product in process|Realizable net value is lower the cost|Used or disposed|
|Finished goods in stock|Realizable net value is lower the cost|Used or disposed|
|Goods delivered|Realizable net value is lower the cost||
|Asset formed by construction contract|Predicted construction contract loss||
|OEM materials|Realizable net value is lower the cost||

(3) Balance at the end of the period includes capitalization of borrowing expense
The balance at the end of the period includes capitalization of borrowing expense of Fangda Town project of RMB67,450,413.36.The capitalization amount of cumulative borrowing expenses is RMB90,234,173.92, of which RMB45,862,952.52 occurred in this year. (4) Assets unsettled for finished construction contracts at the end of the period
In RMB
|||
|-|-|
|Items|Amount|
|Accumulative occurred costs|7,097,768,053.00|

China Fangda Group Co., Ltd. 2016 Annual Report
|||
|-|-|
|Accumulative recognized gross margin|1,239,280,706.00|
|Settled amount|8,150,760,542.00|
|Assets unsettled for finished construction contracts|186,288,217.00|

 Others:
(5) Development cost
||||||||
|-|-|-|-|-|-|-|
|Project|Starting time|Estimated finishtime|Estimated totalinvestment|Closing amount|Opening amount|Closingdepreciationprovision|
|Fangda Town|May 2014|2017-12-31|RMB2.5 billion|916,817,936.27|886,932,360.20||
|Jiangxi PhoenixLand project|Not started|2018-12-31|RMB600million|199,959,230.55|99,776,565.00||
|Total||||1,116,777,166.82|986,708,925.20||
|Note: The Jiangxi Phoenix Land project has not been started. The current development cost is mainly the land selling price.|||||||

 10. Other current assets
In RMB
||||
|-|-|-|
|Items|Closing balance|Opening balance|
|Input tax to be deducted|14,896,029.18|11,083,687.96|
|Bank financial products|41,000,000.00||
|Prepaid income tax|433,807.84|312,030.09|
|Prepaid VAT|4,726,521.18||
|Prepaid business tax|1,150,216.13||
|Total|62,206,574.33|11,395,718.05|

 Others:
11. Sellable financial assets
(1) Sellable financial assets
In RMB
||||||||
|-|-|-|-|-|-|-|
||Closing balance|||Opening balance|||
|Items|Remaining|Impairment||Remaining|Impairment||
||||Book value|||Book value|
||book value|provision||book value|provision||
|Sellable equity|||||||
||28,562,575.67||28,562,575.67||||
|instruments:|||||||
|Measured at cost|28,562,575.67||28,562,575.67||||
|Total|28,562,575.67||28,562,575.67||||

China Fangda Group Co., Ltd. 2016 Annual Report (2) Sellable financial assets messaged at costs at the end of the period
In RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Remaining book value||||Impairment provision||||Shareholdi|Cash|
|Invested|Beginning||||Beginning||||ng in the|dividend|
|||||Closing||||Closing|||
|entity|of the|Increase|Decrease||of the|Increase|Decrease||invested|in the|
|||||balance||||balance|||
||period||||period||||entity|period|
|Shenyang||28,562,575||28,562,575|||||||
||||||||||64.58%||
|Fangda||.67||.67|||||||
|||28,562,575||28,562,575|||||||
|Total|||||||||--||
|||.67||.67|||||||

12. Long-term share equity investment
In RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||Change (+,-)|||||||||Balance|
|||||Investment|||||||of|
||||||Other|||||||
|||||gain and||||Impa|||impairme|
||||Decre||miscella||Cash|||||
||Opening|Increased||loss||Other||irme||Closing|nt|
|Invested entity||||||||||||
||||ased||neous||dividend or|||||
||balance|investmen||recognized||equity||nt|Others|balance|provision|
||||invest||income||profit|||||
|||t||using the||change||provi|||at the end|
||||ment||adjustme||announced|||||
|||||equity||||sion|||of the|
||||||nt|||||||
|||||method|||||||period|
|1. Joint venture||||||||||||
|2. Associate||||||||||||
|Shenzhen||||||||||||
|Ganshang Joint|8,511,197.9|||||||||8,600,939||
|||||89,741.80||||||||
|Investment Co.,|8|||||||||.78||
|Ltd.||||||||||||
|Shenzhen||||||||||||
|Huihai Yirong|1,978,482.9|3,000,000||-1,474,392.||||||3,504,090||
|Internet Service|5|.00||05||||||.90||
|Co., Ltd.||||||||||||
||10,489,680.|3,000,000||-1,384,650.||||||12,105,03||
|Subtotal||||||||||||
||93|.00||25||||||0.68||
||10,489,680.|3,000,000||-1,384,650.||||||12,105,03||
|Total||||||||||||
||93|.00||25||||||0.68||

Other note
The second installment of contributed capital of RMB3 million paid to Shenzhen Huihai Yirong Internet Financial Service Co., Ltd.
in this year. The shareholding remains10% with one director appointed in the board of directors.
China Fangda Group Co., Ltd. 2016 Annual Report 13. Investment real estates
(1) Investment real estate measured at costs
√ Applicable□ Inapplicable
In RMB
||||||
|-|-|-|-|-|
|Items|Houses & buildings|Land using right|Construction in process|Total|
|I. Book value|||||
|1. Opening balance|37,176,315.46|||37,176,315.46|
|2. Increase in this|||||
||969,999.67|||969,999.67|
|period|||||
|(1) External|||||
||969,999.67|||969,999.67|
|purchase|||||
|(2) Transfer-in from|||||
|inventory\fixed|||||
|assets\construction in|||||
|progress|||||
|(3) Increase due to|||||
|enterprise merger|||||
|3. Decrease in this|||||
|period|||||
|(1) Purchase|||||
|(2) Other|||||
|transfer-out|||||
|4. Closing balance|38,146,315.13|||38,146,315.13|
|II. Accumulative|||||
|depreciation and|||||
|amortization|||||
|1. Opening balance|6,462,722.25|||6,462,722.25|
|2. Increase in this|||||
||978,524.20|||978,524.20|
|period|||||
|(1) Provision or|||||
||978,524.20|||978,524.20|
|amortization|||||
|3. Decrease in this|||||
|period|||||
|(1) Purchase|||||
|(2) Other|||||
|transfer-out|||||
|4. Closing balance|7,441,246.45|||7,441,246.45|

China Fangda Group Co., Ltd. 2016 Annual Report
||||
|-|-|-|
|III. Impairment provision|||
|1. Opening balance|||
|2. Increase in this|||
|period|||
|(1) Provision|||
|3. Decrease in this|||
|period|||
|(1) Purchase|||
|(2) Other|||
|transfer-out|||
|4. Closing balance|||
|IV. Book value|||
|1. Closing book||30,705,068.68|
||30,705,068.68||
|value|||
|2. Opening book||30,713,593.21|
||30,713,593.21||
|value|||

(2) Investment real estate measured at fair value
√ Applicable□ Inapplicable
In RMB
||||||
|-|-|-|-|-|
|Items|Houses & buildings|Land using right|Construction in process|Total|
|I. Opening balance|304,615,212.53|||304,615,212.53|
|II. Change in this period|-1,524,649.91|||-1,524,649.91|
|Add: external|||||
|purchase|||||
|Transfer-in|||||
|from inventory\fixed|||||
|assets\construction in|||||
|progress|||||
|Increase due to|||||
|enterprise merger|||||
|Less: disposal|13,082,954.01|||13,082,954.01|
|Other|||||
|transfer-out|||||
|Change in fair value|11,558,304.10|||11,558,304.10|
|III. Closing balance|303,090,562.62|||303,090,562.62|

China Fangda Group Co., Ltd. 2016 Annual Report The Company must comply with disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure Guideline No.3– Listed Companies Engaged in Property Development.
Disclosure of investment real estate measured at fair value by projects
In RMB
|||||||||
|-|-|-|-|-|-|-|-|
||||Rental|||||
|||Building|income in|Opening|Closing fair|Change in fair|Reason for the|
|Project|Location|||||||
|||area|the report|fair value|value|value|change and report|
||||period|||||
||||||||The fair value of the|
||||||||investment real|
||||||||estate is determined|
||||||||based on深同诚评|
||||26,185,826.|285,817,69||||
|Fangda Town|Shenzhen|18204.95|||296,740,660.63|3.82%|字(2,017A)01YQC|
||||54|1.53||||
||||||||第004号 Real|
||||||||Estate Valuation|
||||||||Report issued by|
||||||||TOUCHSTONE.|

 No new investment real estate measured at fair value in the report period
(3) Investment real estate without ownership certificate
In RMB
||||
|-|-|-|
|Items|Book value|Reason|
|Houses in Dalian of Fangda Jianke for|||
||694,455.99|Applying for|
|offsetting debt|||

Other note
14. Fixed assets
(1) Fixed assets
In RMB
||||||||
|-|-|-|-|-|-|-|
||Houses &||Mechanical|Transport|Electronics and||
|Items||PV power plants||||Total|
||buildings||equipment|equipment|other devices||
|I. Original book|||||||
|value:|||||||
|1. Opening|||||||
||385,847,642.37|11,976,788.22|247,336,323.55|23,991,910.96|61,711,430.90|730,864,096.00|
|balance|||||||
|2. Increase in|||||||
||13,248,451.83|119,408,380.68|1,475,674.87|188,981.39|1,984,795.06|136,306,283.83|
|this period|||||||
|(1) Purchase|13,248,451.83||1,475,674.87|188,981.39|1,330,599.85|16,243,707.94|

China Fangda Group Co., Ltd. 2016 Annual Report
||||||||
|-|-|-|-|-|-|-|
|(2)|||||||
|Transfer-in of|||||||
|||119,408,380.68|||654,195.21|120,062,575.89|
|construction in|||||||
|progress|||||||
|(3) Increase|||||||
|due to enterprise|||||||
|merger|||||||
|3. Decrease in|||||||
||52,094,928.81|125,447.68|108,659,247.31|1,268,275.07|10,475,251.97|172,623,150.84|
|this period|||||||
|(1) Disposal|||||||
||5,261,300.00|125,447.68|3,067,307.97|910,187.23|2,381,159.57|11,745,402.45|
|or retirement|||||||
|(2) Other|||||||
||46,833,628.81||105,591,939.34|358,087.84|8,094,092.40|160,877,748.39|
|decrease|||||||
|4. Closing|||||||
||347,001,165.39|131,259,721.22|140,152,751.11|22,912,617.28|53,220,973.99|694,547,228.99|
|balance|||||||
|II. Accumulative|||||||
|depreciation|||||||
|1. Opening|||||||
||44,529,102.62|142,224.36|164,822,823.46|12,742,115.74|29,046,564.97|251,282,831.15|
|balance|||||||
|2. Increase in|||||||
||9,518,429.26|3,514,678.79|7,422,628.19|2,542,671.52|4,623,309.78|27,621,717.54|
|this period|||||||
|(1) Provision|9,518,429.26|3,514,678.79|7,422,628.19|2,542,671.52|4,623,309.78|27,621,717.54|
|3. Decrease in|||||||
||7,393,116.80||73,889,806.86|1,079,035.43|10,169,016.49|92,530,975.58|
|this period|||||||
|(1) Disposal|||||||
||293,147.58|0.00|2,624,110.68|742,637.95|2,107,182.45|5,767,078.66|
|or retirement|||||||
|(2) Other|||||||
||7,099,969.22|0.00|71,265,696.18|336,397.48|8,061,834.04|86,763,896.92|
|decrease|||||||
|4. Closing|||||||
||46,654,415.08|3,656,903.15|98,355,644.79|14,205,751.83|23,500,858.26|186,373,573.11|
|balance|||||||
|III. Impairment|||||||
|provision|||||||
|1. Opening|||||||
||277,744.50||16,654,521.84|0.00|0.00|16,932,266.34|
|balance|||||||
|2. Increase in|||||||
||17,227,113.29||9,172,340.62|9,690.36||26,409,144.27|
|this period|||||||
|(1) Provision|17,227,113.29||9,172,340.62|9,690.36||26,409,144.27|
|3. Decrease in|||||||
||17,504,857.79||24,472,472.96|9,690.36||41,987,021.11|
|this period|||||||

China Fangda Group Co., Ltd. 2016 Annual Report
||||||||
|-|-|-|-|-|-|-|
|(1) Disposal|||||||
|or retirement|||||||
|(2) Other|||||||
||17,504,857.79|0.00|24,472,472.96|9,690.36|0.00|41,987,021.11|
|decrease|||||||
|4. Closing|||||||
||0.00|0.00|1,354,389.50|0.00||1,354,389.50|
|balance|||||||
|IV. Book value|||||||
|1. Closing|||||||
||300,346,750.31|127,602,818.07|40,442,716.82|8,706,865.45|29,720,115.73|506,819,266.38|
|book value|||||||
|2. Opening|||||||
||341,040,795.25|11,834,563.86|65,858,978.25|11,249,795.22|32,664,865.93|462,648,998.51|
|book value|||||||

(2) Temporary idle fixed assets
In RMB
|||||||
|-|-|-|-|-|-|
|||Accumulative|Impairment|||
|Items|Book value|||Book value|Notes|
|||depreciation|provision|||
|Mechanical||||||
||21,380,678.50|3,723,440.58||17,657,237.92||
|equipment||||||
|Transportation||||||
||1,708,670.28|664,940.72||1,043,729.56||
|facilities||||||
|Electronics and other||||||
||6,142,004.42|1,975,675.60||4,166,328.82||
|devices||||||
|Total|29,231,353.20|6,364,056.90||22,867,296.30||

(3) Fixed assets without ownership certificate
In RMB
||||
|-|-|-|
|Items|Book value|Reason|
|Houses in Urumuqi for offsetting debt|552,675.17|Applying for|
|Yuehai Office Building C 502|154,944.66|Historical reasons|

Other note
(1) On December 31, 2016, the cumulative depreciation of the original value of RMB58,834,355.09 in theGroup’s houses and buildings is RMB7,322,643.60. The net value of RMB51,511,711.49 has been pledged to Shenzhen OCT branch of China Construction Bank. The relevant borrowing has been repaid, but the pledge has not been released.
(2) On December 31, 2016, the cumulative depreciation of the original value of RMB29,231,353.20 in theGroup’s fixed assets is RMB29,231,353.20. The net value of RMB22,867,296.30 is the amount frozen by the court due to the Fangda SOZN sales and
purchase proceedings.
(3) The impairment provision in this period is made by subsidiary Shenyang Fangda according to the Shen Peng Sheng Evaluation
Report No.2017032.
China Fangda Group Co., Ltd. 2016 Annual Report (4) Other decrease in the fixed assets in the period is attributable to the loss of control on subsidiaries Shenyang Fangda and Shenzhen Woke. Relevant fixed assets are no longer included in the consolidated report.
15. Construction in process
(1) Construction in progress
In RMB
||||||||
|-|-|-|-|-|-|-|
||Closing balance|||Opening balance|||
|Items|Remaining book|Impairmentprovision||Remaining book|Impairment||
||||Book value|||Book value|
||value|||value|provision||
|PV power|||||||
||1,703,080.57||1,703,080.57|13,024,552.31||13,024,552.31|
|generation project|||||||
|Chengda|||||||
|Fangda’s Xinjin|||||||
|energy-saving|834,644.79||834,644.79|816,356.71||816,356.71|
|green curtain wall|||||||
|project|||||||
|Engineering|||||||
|project|||||||
|||||761,792.44||761,792.44|
|management|||||||
|platform|||||||
|Dongguan|||||||
|Songshanhu|||||||
|||||531,689.44||531,689.44|
|showroom No.1|||||||
|display|||||||
|Total|2,537,725.36||2,537,725.36|15,134,390.90||15,134,390.90|

 (2) Changes in major construction in process in this period
In RMB
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
||||||||Proportio||||||
|||||||||||Includin|||
|||||Amount|||n of||||||
|||||||||||g:|||
|||||transfer-|Other||accumula||Accum||||
|||||||Closin||||capitaliz|Interest||
|||Openin|Increase|in to|decreas||tive||ulative||||
|||||||g||Project||ed|capitaliz|Capital|
|Project|Budget|g|in this|fixed|e in||engineeri||capitali||||
|||||||balanc||progress||interest|ation|source|
|||balance|period|assets in|this||ng||zed||||
|||||||e||||for the|rate||
|||||this|period||investme||interest||||
|||||||||||current|||
|||||period|||nt in the||||||
|||||||||||period|||
||||||||budget||||||
|Phase I of the|30,100,0|1,093,3|29,842,29|30,935,6||||||||Raised|
||||||||101.39%|100%|||||
|Jiangxi|00.00|43.24|3.06|36.30||||||||fund|

China Fangda Group Co., Ltd. 2016 Annual Report
|||||||||
|-|-|-|-|-|-|-|-|
|Nanchang Isuzu||||||||
|Automobile||||||||
|parking lot roof||||||||
|6.3MWp||||||||
|distributed PV||||||||
|power generation||||||||
|project||||||||
|Jiangxi||||||||
|Pingxiang Luxi||||||||
|13MWp|93,103,1|10,257,|78,214,78|88,472,7|||Raised|
||||||95.23%|100%||
|distributed PV|00.00|959.91|4.47|44.38|||fund|
|power plant||||||||
|project||||||||
||123,203,|11,351,|108,057,0|119,408,||||
|Total|||||--|--|--|
||100.00|303.15|77.53|380.68||||

16. Disposal of fixed assets
In RMB
||||
|-|-|-|
|Items|Closing balance|Opening balance|
|Mechanical equipment||5,326.79|
|Total||5,326.79|

 Others:
17. Intangible assets
(1) Intangible assets
In RMB
|||||||
|-|-|-|-|-|-|
||||Unpatented|||
|Items|Land using right|Patent||Computer software|Total|
||||technologies|||
|I. Book value||||||
|1. Opening||||||
||98,015,399.41|9,200,126.04|24,216,408.23|7,803,625.02|139,235,558.70|
|balance||||||
|2. Increase in this||||||
||119,932.56|3,450,893.84|46,153.85|101,139.62|3,718,119.87|
|period||||||
|(1) Purchase|119,932.56|3,450,893.84|46,153.85|101,139.62|3,718,119.87|
|3. Decrease in this||||||
||42,038,791.23||18,634,375.05||60,673,166.28|
|period||||||
|(1) Purchase||||||

China Fangda Group Co., Ltd. 2016 Annual Report
|||||||
|-|-|-|-|-|-|
|(2) Other||||||
||42,038,791.23||18,634,375.05||60,673,166.28|
|decrease||||||
|4. Closing||||||
||56,096,540.74|12,651,019.88|5,628,187.03|7,904,764.64|82,280,512.29|
|balance||||||
|II. Accumulative||||||
|amortization||||||
|1. Opening||||||
||13,336,868.22|4,402,389.58|16,323,238.98|4,584,215.67|38,646,712.45|
|balance||||||
|2. Increase in this||||||
||1,552,930.70|914,886.01|598,921.11|657,031.81|3,723,769.63|
|period||||||
|(1) Provision|1,552,930.70|914,886.01|598,921.11|657,031.81|3,723,769.63|
|3. Decrease in this||||||
||7,210,111.20||13,108,511.28||20,318,622.48|
|period||||||
|(1) Purchase||||||
|(2) Other||||||
||7,210,111.20||13,108,511.28||20,318,622.48|
|decrease||||||
|4. Closing||||||
||7,679,687.72|5,317,275.59|3,813,648.81|5,241,247.48|22,051,859.60|
|balance||||||
|III. Impairment||||||
|provision||||||
|1. Opening||||||
||||5,525,863.77||5,525,863.77|
|balance||||||
|2. Increase in this||||||
||5,268,680.03||||5,268,680.03|
|period||||||
|(1) Provision|5,268,680.03||||5,268,680.03|
|3. Decrease in this||||||
||5,268,680.03||5,525,863.77||10,794,543.80|
|period||||||
|(1) Purchase||||||
|(2) Other||||||
||5,268,680.03||5,525,863.77||10,794,543.80|
|decrease||||||
|4. Closing||||||
|balance||||||
|IV. Book value||||||
|1. Closing book||||||
||48,416,853.02|7,333,744.29|1,814,538.22|2,663,517.16|60,228,652.69|
|value||||||
|2. Opening book||||||
||84,678,531.19|4,797,736.46|2,367,305.48|3,219,409.35|95,062,982.48|
|value||||||

Intangible asset formed by internalR&D of the period takes up3.01% in the closing total book value of intangible assets.
China Fangda Group Co., Ltd. 2016 Annual Report (2) Failure to obtain the land use right certificates
In RMB
||||
|-|-|-|
|Items|Book value|Reason|

Others:
18. Goodwill
(1) Original book value of goodwill
In RMB
||||||||
|-|-|-|-|-|-|-|
|Invested entity or||Increase||Decrease|||
||Opening balance|||||Closing balance|
|item of goodwill||Enterprise merger|Other increases|Disposal|||
|Shenzhen Woke|8,197,817.29||||8,197,817.29||
|Fangda SOZN|26,279,395.89|||||26,279,395.89|
|Total|34,477,213.18||||8,197,817.29|26,279,395.89|

 (2) Goodwill impairment provision
In RMB
||||||||
|-|-|-|-|-|-|-|
|Invested entity or||Increase||Decrease|||
||Opening balance|||||Closing balance|
|item of goodwill||Provision|Other increases|Disposal|||
|Shenzhen Woke|8,197,817.29||||8,197,817.29||
|Fangda SOZN|6,452,698.92|19,826,696.97||||26,279,395.89|
|Total|14,650,516.21|19,826,696.97|||8,197,817.29|26,279,395.89|

 Test process of goodwill impairment, parameters and recognition method of goodwill impairment loss:
The Company acquired the100% control power over Shenzhen Woke Co. by merger of enterprise under common control in May 2007. The difference between the initial investment cost and recognizable fair value of the investee has formed the goodwill of RMB8,197,817.29. For Shenzhen Woke was not in good business operation for successive years, impairment provision has been provided fully upon the goodwill. Other decrease is attributable to part moved out from the consolidation scope this year.
The Company acquired the60% control power over Fangda SOZN by merger of enterprise under common control in August 2014. The difference between the initial investment cost of RMB48 million and recognizable fair value of the investee has formed the goodwill of RMB26,279,395.89. Goodwill impairment of RMB6,452,698.92 has been provided in previous years. Because Fangda SOZN is insolvent and has stopped business operation, the Company did impairment test on the goodwill of this investment according to the current value of estimated future cash flow and made full impairment provision of RMB19,826,696.97.
Other note
China Fangda Group Co., Ltd. 2016 Annual Report 19. Long-term amortizable expenses
In RMB
|||||||
|-|-|-|-|-|-|
||||Amortized|||
||Opening|Increase in this||||
|Items|||amount in this|Other decrease|Closing balance|
||balance|period||||
||||period|||
|Renovation of office and plants||||||
||1,301.80||1,301.80|||
|rented by Chengdu Fangda||||||
|Renovation of Fangda Hi-Tech||||||
||34,166.63||34,166.63|||
|Park dormitory building||||||
|Upgrading of workshop rented by||||||
||2,494,310.08||2,494,310.08|||
|Fangda SOZN||||||
|Jinshan factory renovation of||||||
|Fangda Decoration Shanghai|302,154.50||109,874.16||192,280.34|
|Branch||||||
|Epoxy floor|796,522.13||162,004.50||634,517.63|
|Kingdee aftersales service|73,375.26||25,157.28||48,217.98|
|Xuanfeng Chayuan village and||||||
|Zhuyuan village land transfer|1,304,327.46|62,475.00|57,767.56||1,309,034.90|
|compensation||||||
|Expense of renovation of leased||||||
|fixed assets by Fangda Property|222,948.81||111,474.36||111,474.45|
|Development||||||
|Dongguan separation project|233,451.85||77,817.36||155,634.49|
|Fangda Hi-Tech Park plant No.3||||||
||562,063.46||306,579.96||255,483.50|
|renovation||||||
|Upgrading of workshop rented by||||||
|Fangda Decoration Nanchang|202,118.38||41,108.82||161,009.56|
|Branch||||||
|Anti-junk email module service||||||
||16,506.46||16,506.46||0.00|
|fee||||||
|Great Wall broadband network||||||
||19,600.00||4,899.96||14,700.04|
|fee||||||
|Fangda Building Floor #5 wiring||||||
||38,023.68||30,419.04||7,604.64|
|project||||||
|Huawei storage device||||||
||13,918.38||9,278.88||4,639.50|
|maintenance fee||||||
|Membership fee|300,000.00||100,000.08||199,999.92|
|Temporary sales center||1,486,408.70|990,939.12||495,469.58|

China Fangda Group Co., Ltd. 2016 Annual Report
||||||
|-|-|-|-|-|
|construction cost|||||
|Subscription of newspaper and|||||
|||105,699.80|0.00|105,699.80|
|magazines|||||
|Total|6,614,788.88|1,654,583.50|4,573,606.05|3,695,766.33|

 Other note
20. Differed income tax assets and differed income tax liabilities
(1) Non-deducted deferred income tax assets
In RMB
||||||
|-|-|-|-|-|
||Closing balance||Opening balance||
|Items|Deductible temporary|Deferred income tax|Deductible temporary|Deferred income tax|
||difference|assets|difference|assets|
|Assets impairment|||||
||334,020,087.32|65,372,067.16|216,918,204.09|37,575,529.18|
|provision|||||
|Deductible loss|79,647,747.51|19,403,071.58|85,665,697.71|20,944,182.55|
|Unrealizable gross profit|59,313,354.67|13,083,940.06|23,008,088.13|3,788,898.02|
|Reserved expense|3,245,302.51|486,795.38|2,153,753.44|323,063.02|
|Reserved wage|||3,519,976.72|527,996.51|
|Deferred earning|1,963,532.75|474,053.75|2,563,904.83|619,823.84|
|Anticipated liabilities|3,156,625.24|473,493.79|1,921,446.51|288,216.98|
|Advertisement fee|0.00|0.00|3,847,702.76|961,925.69|
|Adjustment of fair value|||||
||327,320.67|49,098.10|5,981,164.89|897,174.73|
|of investment real estate|||||
|Provided unpaid taxes|309,816,714.95|77,454,178.74|||
|Total|791,490,685.62|176,796,698.56|345,579,939.08|65,926,810.52|

 (2) Non-deducted deferred income tax liabilities
In RMB
||||||
|-|-|-|-|-|
||Closing balance||Opening balance||
|Items|Taxable temporary|Deferred income tax|Taxable temporary|Deferred income tax|
||difference|liabilities|difference|liabilities|
|Gain/loss caused by|||||
||304,518,955.06|76,129,738.77|291,979,073.34|72,994,768.34|
|changes in fair value|||||
|Estimated gross margin|||||
||495,010,133.99|123,752,533.50|||
|when Fangda Town|||||

China Fangda Group Co., Ltd. 2016 Annual Report
||||||
|-|-|-|-|-|
|records income, but does|||||
|not reach the taxable|||||
|income level|||||
|Change in fair value of|||||
|sellable financial assets|||||
||2,164,873.87|324,731.08|||
|accounted in other misc.|||||
|income|||||
|Total|801,693,962.92|200,207,003.35|291,979,073.34|72,994,768.34|

 (3) Details of unrecognized deferred income tax assets
In RMB
||||
|-|-|-|
|Items|Closing balance|Opening balance|
|Deductible temporary difference|69,882,888.12|51,201,110.67|
|Deductible loss|103,119,540.05|151,155,750.92|
|Total|173,002,428.17|202,356,861.59|

 (4) Deductible losses of the un-recognized deferred income tax asset will expire in the following years In RMB
|||||
|-|-|-|-|
|Year|Closing amount|Opening amount|Notes|
|2016||19,999,060.04||
|2017|1,476,671.03|20,241,373.78||
|2018|58,067.78|11,130,985.83||
|2019||11,662,409.08||
|2020|80,885,430.25|88,121,922.19||
|2021|20,699,370.99|||
|Total|103,119,540.05|151,155,750.92|--|

Others:
In the report period, subsidiaries Shenyang Fangda and Shenzhen Woke have been moved to the liquidation team and the Company has lost control. Therefore the deductible losses of the un-recognized deferred income tax asset decreased sharply.
21. Other non-current assets
In RMB
||||
|-|-|-|
|Items|Closing balance|Opening balance|
|Prepaid house and equipment amount|61,184,253.71|91,863,898.92|
|Input tax to be deducted||1,640,057.47|

China Fangda Group Co., Ltd. 2016 Annual Report
||||
|-|-|-|
|Total|61,184,253.71|93,503,956.39|

 Others:
The closing balance of other non-current assets is mainly the prepaid house payment of Fangda Jianke.
22. Short-term borrowings
(1) Classification of short-term borrowings
In RMB
||||
|-|-|-|
|Items|Closing balance|Opening balance|
|Loan by pledge||200,000,000.00|
|Guarantee loan|591,000,000.00|943,000,000.00|
|Discount borrowing of commercial|||
|||4,957,775.82|
|acceptance bills|||
|Total|591,000,000.00|1,147,957,775.82|

 Notes to classification of short-term borrowings
23. Derivative financial liabilities
□ Applicable√ Inapplicable
24. Notes payable
In RMB
||||
|-|-|-|
|Type|Closing balance|Opening balance|
|Commercial acceptance|88,302,684.45|78,934,714.94|
|Bank acceptance|468,998,636.00|224,592,924.69|
|Total|557,301,320.45|303,527,639.63|

 The total amount of payable bills that have matured but not been paid at the end of the period is RMB757,145.13.
25. Account payable
(1) Account payable
In RMB
||||
|-|-|-|
|Items|Closing balance|Opening balance|
|Account repayable and engineering|||
||861,679,467.39|611,292,302.23|
|payables|||

China Fangda Group Co., Ltd. 2016 Annual Report
||||
|-|-|-|
|Construction payable|64,941,147.47|27,529,577.05|
|Payable installation and implementation|||
||342,832,605.32|225,793,206.11|
|fees|||
|Others|5,802,741.16|3,013,270.26|
|Total|1,275,255,961.34|867,628,355.65|

 (2) Significant payables aging more than 1 year
In RMB
||||
|-|-|-|
|Items|Closing balance|Reason|
|||Debt of subsidiary Fangda SOZN, which is|
|Foshan Youfeng Trading Co., Ltd.|10,221,570.84||
|||insolvent|
|||Debt of subsidiary Fangda SOZN, which is|
|Xiangneng Hualei Optoelectronic Co., Ltd.|8,715,326.31||
|||insolvent|
|||Debt of subsidiary Fangda SOZN, which is|
|Huacan Optoelectronic (Suzhou) Co., Ltd.|6,105,483.64||
|||insolvent|
|||Debt of subsidiary Fangda SOZN, which is|
|Suzhou Nanojoin Photonics Co., Ltd.|5,768,077.38||
|||insolvent|
|Total|30,810,458.17|--|

Others:
26. Prepayment received
(1) Prepayment received
In RMB
||||
|-|-|-|
|Items|Closing balance|Opening balance|
|Curtain wall and screen door engineering|||
||82,684,893.50|123,894,561.69|
|payment|||
|Material loan|3,096,489.93|5,515,676.69|
|Real estate sales payment|198,135,269.02||
|Others|1,988,791.68|1,164,081.47|
|Total|285,905,444.13|130,574,319.85|

 (2) Significant prepayment aged more than 1 year
In RMB
||||
|-|-|-|
|Items|Closing balance|Reason|

China Fangda Group Co., Ltd. 2016 Annual Report 27.Employees‟ wage payable
(1)Employees‟ wage payable
In RMB
||||||
|-|-|-|-|-|
|Items|Opening balance|Increase|Decrease|Closing balance|
|1. Short-term|||||
||40,805,469.84|225,783,001.48|224,623,086.87|41,965,384.45|
|remuneration|||||
|2. Retirement pension|||||
|program-defined|6,958.21|9,746,103.25|9,746,103.25|6,958.21|
|contribution plan|||||
|3. Dismiss compensation|130,000.00|1,072,270.13|1,202,270.13||
|Total|40,942,428.05|236,601,374.86|235,571,460.25|41,972,342.66|

 (2) Short-term remuneration
In RMB
||||||
|-|-|-|-|-|
|Items|Opening balance|Increase|Decrease|Closing balance|
|1. Wage, bonus,|||||
||38,627,929.51|210,550,400.08|209,353,368.46|39,824,961.13|
|allowance and subsidies|||||
|2. Employee welfare||4,443,167.74|4,443,167.74||
|3. Social insurance|68,000.27|4,814,469.11|4,807,895.19|74,574.19|
|Including:|||||
||67,483.05|4,022,768.48|4,016,194.56|74,056.97|
|medical insurance|||||
|Labor injury|||||
||515.52|413,360.43|413,360.43|515.52|
|insurance|||||
|Breeding|||||
||1.70|378,340.20|378,340.20|1.70|
|insurance|||||
|4. Housing fund|97,082.00|5,270,629.41|5,268,391.41|99,320.00|
|5. Labor union budget|||||
||2,012,458.06|704,335.14|750,264.07|1,966,529.13|
|and staff education fund|||||
|Total|40,805,469.84|225,783,001.48|224,623,086.87|41,965,384.45|

 (3) Defined contribution plan
In RMB
||||||
|-|-|-|-|-|
|Items|Opening balance|Increase|Decrease|Closing balance|
|1. Basic pension|6,436.75|9,347,895.58|9,347,895.58|6,436.75|
|2. Unemployment|521.46|398,207.67|398,207.67|521.46|

China Fangda Group Co., Ltd. 2016 Annual Report
||||||
|-|-|-|-|-|
|insurance|||||
|Total|6,958.21|9,746,103.25|9,746,103.25|6,958.21|

 Others:
28. Taxes payable
In RMB
||||
|-|-|-|
|Items|Closing balance|Opening balance|
|VAT|46,317,900.91|6,981,753.65|
|Enterprise income tax|130,608,894.15|16,555,365.28|
|Personal income tax|1,440,370.54|1,201,365.12|
|City maintenance and construction tax|4,160,327.99|2,824,794.21|
|Business tax||32,136,293.62|
|Land using tax|684,277.95|3,683,884.01|
|Property tax|2,140,282.85|2,083,844.87|
|Education surtax|1,963,232.23|1,315,453.14|
|Local education surtax|1,106,894.43|489,642.89|
|Deed tax|3,429,437.28||
|Others|384,956.07|261,036.91|
|Total|192,236,574.40|67,533,433.70|

 Others:
Part of the Fangda Town phase I developed by Fangda Property has been delivered. The enterprise income tax needs to be settled and paid, increasing the closing balance.
29. Interest payable
In RMB
||||
|-|-|-|
|Items|Closing balance|Opening balance|
|Long-term borrowing with interest|||
|installment and repayment of principal|1,753,879.87|510,166.05|
|upon maturity|||
|Short-term borrowing interests payable|881,099.60|2,578,576.91|
|Others||153,091.47|
|Total|2,634,979.47|3,241,834.43|

 Others:
China Fangda Group Co., Ltd. 2016 Annual Report 30. Dividend payable
In RMB
||||
|-|-|-|
|Items|Closing balance|Opening balance|

Dividend payable not paid for more than 1 year needs to be explained:
31. Other payables
(1) Other payables presented by nature
In RMB
||||
|-|-|-|
|Items|Closing balance|Opening balance|
|Performance and quality deposit|10,596,919.41|21,697,760.34|
|Deposit|8,104,969.14|9,027,418.36|
|Reserved expense|14,327,754.95|11,714,478.57|
|Fangda Town pledge|100,000.00|2,900,000.00|
|Lawsuit indemnity|0.00|23,456,765.40|
|Tax withheld|309,816,714.95||
|Others|23,236,440.96|13,880,924.14|
|Total|366,182,799.41|82,677,346.81|

 (2) Significant payables aging more than 1 year
In RMB
||||
|-|-|-|
|Items|Closing balance|Reason|

Other note
1. No significant payables aging more than 1 year at the end of the year
2. The tax withheld is the land VAT that needs to be settled and paid for the property delivered of the Fangda Town phase I developed by Fangda Property.
32. Other current liabilities
In RMB
||||
|-|-|-|
|Items|Closing balance|Opening balance|
|Loan financing of precious metal||98,425,600.00|
|Substituted money on VAT|35,148,084.44||
|Total|35,148,084.44|98,425,600.00|

Others:
China Fangda Group Co., Ltd. 2016 Annual Report 33. Long-term borrowings
(1) Classification of long-term borrowings
In RMB
||||
|-|-|-|
|Items|Closing balance|Opening balance|
|Loan by pledge|922,169,568.24|300,395,582.06|
|Total|922,169,568.24|300,395,582.06|

 Notes to classification of long-term borrowings:
Note: The above-mentioned borrowing is the100% stock pledging of Fangda Property Development held by the Company. Other note, including interest rate range:
The interest rate of long-term borrowings ranges between5.39% and6.785%.
34. Anticipated liabilities
In RMB
|||||
|-|-|-|-|
|Items|Closing balance|Opening balance|Reason|
|Others|3,156,625.24|1,921,446.51||
|Total|3,156,625.24|1,921,446.51|--|

Note: including related significant assumptions and estimates for anticipated liabilities
35. Deferred earning
In RMB
|||||||
|-|-|-|-|-|-|
|Items|Opening balance|Increase|Decrease|Closing balance|Reason|
|Government subsidy|12,284,195.68|500,000.00|1,216,970.90|11,567,224.78|Assets-related|
|Total|12,284,195.68|500,000.00|1,216,970.90|11,567,224.78|--|

Items involving government subsidies:
In RMB
||||||||
|-|-|-|-|-|-|-|
||||Amount||||
|||Amount of new|included in|Other||Related to|
|Liabilities|Opening balance||||Closing balance||
|||subsidy|non-operating|change||assets/earning|
||||revenue||||
|Major investment project|||||||
|prize from Industry and|||||||
|Trade Development|1,852,381.10||57,142.80||1,795,238.30|Assets-related|
|Division of Dongguan|||||||
|Finance Bureau|||||||

China Fangda Group Co., Ltd. 2016 Annual Report
|||||||
|-|-|-|-|-|-|
|Massive production project||||||
|of air-breathing||||||
||7,765,817.51||123,987.24|7,641,830.27|Assets-related|
|double-layer hollow glass||||||
|energy-saving curtain call||||||
|Railway transport screen||||||
|door controlling system||||||
||211,523.73||43,229.28|168,294.45|Assets-related|
|and information||||||
|transmission technology||||||
|LED production expansion||||||
|technology renovation|1,874,331.67||381,219.96|1,493,111.71|Assets-related|
|project||||||
|Subsidy for purchase of||||||
|scientific achievements or||||||
||80,141.67||80,141.67||Assets-related|
|technologically innovative||||||
|services||||||
|Nanshan District||||||
||500,000.00||500,000.00||Assets-related|
|mic-business loan discount||||||
|Distributed PV power||||||
|generation project subsidy||||||
|sponsored by Dongguan||500,000.00|31,249.95|468,750.05|Assets-related|
|Reform and Development||||||
|Commission||||||
|Total|12,284,195.68|500,000.00|1,216,970.90|11,567,224.78|--|

 Others:
(1) The Dongguan Finance Bureau Industry and Trade Development Division major subsidy project is a subsidized project not stipulated in Dongguan Financial Circular[2013] No.779. As the project has formed into long-term assets, the Company treats it as an assets-related government subsidy.
(2) The massive production project of air-breathing double-layer hollow glass energy-saving curtain wall is a subsided project stipulated in Guangdong Financial Doc[2013] No.183. As the project has formed into long-term assets, the Company treats it as an assets-related government subsidy.
(3) The railway transport screen door controlling system and information transmission technology is a subsidized project stipulated in Shenzhen Tech Innovation[2013] No.242. RMB300,000 is used to purchase equipment and RMB900,000 is used to purchase materials and for travel fees. As the project has formed into long-term assets, the Company treats RMB300,000 as assets-related government subsidy and RMB900,000 as earning-related government subsidy.
(4) The subsidy for purchase of scientific achievements or technologically innovative services is the subsidy fund obtained by subsidiary Fangda SOZN according to Notice on Applying for 2015 Foshan Technology Development Fund and Parent Fund (Zhongshan Ke Fa (2015) No.104), Notice on Zhongshan Technology Development Fund Regulations (Zhong Ke Fa (2015) No.95)
and Notice on Zhongshan Patent Fund Use Regulations (Zhong Ke Fa (2015) No.96).
(5) The Nanshan District mic-business loan discount is provided to promote micro-businesses in Nanshan District and meet financial
China Fangda Group Co., Ltd. 2016 Annual Report demands of micro-businesses.
36. Capital share
In RMB
|||||||||
|-|-|-|-|-|-|-|-|
|||Change (+,-)||||||
||Opening||||||Closing|
|||Issued new||Transferred||||
||balance||Bonus shares||Others|Subtotal|balance|
|||shares||from reserves||||
|Total of capital|756,909,905.00||||||789,094,836.00|
|||32,184,931.00||||32,184,931.00||
|shares||||||||

Others:
(1) By 31.12.16, the Company has 972,042 restricted shares, all of which are held by senior management natural person.
2. The Company received the Reply to the Non-public Share Issuance of Fangda China Group Co., Ltd. (CSRC License[2016] No.825) to allow the Company to issue 32,184,931 shares. A total of RMB459,869,219.89 was raised, including an increased registered capital of RMB32,184,931.00 and remainder RMB427,684,488.89 transferred to capital reserve. The increase shares and capital reserve have been verified by Grant Thornton (limited liability partnership).
37. Capital reserve
In RMB
||||||
|-|-|-|-|-|
|Items|Opening balance|Increase|Decrease|Closing balance|
|Capital premium (share|||||
||38,238,222.48|427,684,583.13||465,922,805.61|
|capital premium)|||||
|Other capital reserves|40,861,396.66||39,407,299.31|1,454,097.35|
|Total|79,099,619.14|427,684,583.13|39,407,299.31|467,376,902.96|

 Other note, including explanation about the reason of the change:
1. Other capital reserve decreased RMB39,407,299.31 this year. For details, see Note XV. 3.
2. The increase in the share capital premium is the premium in the non-public issued shares of RMB427,684,488.89 and the fractional historic dividend of RMB94.24 received from the Shenzhen branch of China Securities Depository and Clearing Company Limited.
38. Other miscellaneous income
In RMB
|||||||||
|-|-|-|-|-|-|-|-|
|||Amount occurred in the current period||||||
||Opening||||||Closing|
|Items||Amount|Less: amount|Less:|After-tax|After-tax||
||balance||||||balance|
|||before|written into|Income tax|amount|amount||

China Fangda Group Co., Ltd. 2016 Annual Report
|||||||||
|-|-|-|-|-|-|-|-|
|||income tax|other gains|expenses|attributed to|attributed to||
||||and transferred||the parent|minority||
||||into gain/loss|||shareholder||
||||in previous|||s||
||||terms|||||
|2. Other misc. incomes that will be||2,363,353.97|||2,038,622.89||2,130,454|
||91,831.63|||324,731.08||||
|re-classified into gain and loss|||||||.52|
|Effective part in the gain and||2,164,873.87|||1,840,142.79||1,840,142|
|||||324,731.08||||
|loss of arbitrage of cash flow|||||||.79|
|Translation difference of|||||198,480.10||198,480.1|
|||198,480.10||||||
|foreign exchange statement|||||||0|
|Investment real estate measured at||||||||
||91,831.63||||||91,831.63|
|fair value||||||||
||91,831.63|2,363,353.97|||2,038,622.89||2,130,454.52|
|Other miscellaneous income||||324,731.08||||

 Other note, including the adjustment of the initial recognition amount of the effective part of the cash flow hedging profit and loss transferred to the hedged item:
39. Surplus reserves
In RMB
||||||
|-|-|-|-|-|
|Items|Opening balance|Increase|Decrease|Closing balance|
|Statutory surplus|||||
||51,123,554.51|37,716,235.99||88,839,790.50|
|reserves|||||
|Total|51,123,554.51|37,716,235.99||88,839,790.50|

 Note, including explanation about the reason of the change:
40. Retained profit
In RMB
||||
|-|-|-|
|Items|Current period|Last period|
|Adjustment on retained profit of previous period|432,271,424.56|349,987,825.69|
|Retained profit adjusted at beginning of year|432,271,424.56|349,987,825.69|
|Plus: Net profit attributable to owners of theparent|||
||697,956,378.23|107,272,369.77|
|Less: Statutory surplus reserves|37,716,235.99|2,281,473.75|
|Common share dividend payable|75,690,990.50|22,707,297.15|
|Closing retained profit|1,016,820,576.30|432,271,424.56|

Details of retained profit adjusted at beginning of the period
China Fangda Group Co., Ltd. 2016 Annual Report 1) Retrospective adjustment due to adopting of the Enterprise Accounting Standard and related regulations, included the retained profit by RMB0.
2) Variation of accounting policies, influenced the retained profit by RMB0.
3) Correction of material accounting errors, influenced the retained profit by RMB0.
4) Change of consolidation range caused by merger of entities under common control, influenced the retained profit by RMB0. 5) Other adjustment influenced the retained profit by RMB0.
41. Operational revenue and costs
In RMB
||||||
|-|-|-|-|-|
||Amount occurred in the current period||Occurred in previous period||
|Items|||||
||Income|Cost|Income|Cost|
|Main business|4,125,885,820.70|2,535,301,290.92|2,492,635,367.98|2,135,389,422.03|
|Other businesses|77,980,353.02|59,869,192.43|57,832,126.80|36,134,778.32|
|Total|4,203,866,173.72|2,595,170,483.35|2,550,467,494.78|2,171,524,200.35|

 42. Taxes and surcharges
In RMB
||||
|-|-|-|
|Items|Amount occurred in the current period|Occurred in previous period|
|City maintenance and construction tax|11,735,072.37|5,128,049.65|
|Education surtax|8,599,067.72|3,704,749.51|
|Property tax|3,408,074.24|1,024,088.16|
|Land using tax|1,188,786.11|125,624.48|
|Stamp tax|1,663,716.30||
|Business tax|6,231,233.83|23,143,208.47|
|Land VAT|347,775,304.93||
|Others|233,450.92|490,836.33|
|Total|380,834,706.42|33,616,556.60|

 Others:
See VI. Tax for the calculation standard of business tax and surcharges.
43. Sales expense
In RMB
||||
|-|-|-|
|Items|Amount occurred in the current period|Occurred in previous period|
|Labor costs|23,832,334.36|28,418,273.77|
|Freight and miscellaneous charges|7,560,644.12|6,900,391.34|

China Fangda Group Co., Ltd. 2016 Annual Report
||||
|-|-|-|
|Travel expense|5,091,669.45|5,536,009.56|
|Entertainment expense|2,037,341.10|2,068,156.06|
|Material consumption|403,618.10|1,693,577.61|
|Office costs|2,536,314.14|1,440,412.04|
|Rental|1,773,733.94|1,572,252.20|
|Advertisement and promotion fee|9,100,791.63|25,047,722.73|
|Sales agency fee|3,574,466.62||
|Others|3,362,132.68|2,588,155.87|
|Total|59,273,046.14|75,264,951.18|

 Others:
The decrease from last year is mainly because that Fangda SOZN increased its advertisement and promotion expense to expand its business.
2. The sales agency fee is the commission paid to the agent company when Fangda Property starts sales of real estate projects. 44. Management expenses
In RMB
||||
|-|-|-|
|Items|Amount occurred in the current period|Occurred in previous period|
|Labor costs|78,910,083.71|83,667,856.48|
|Depreciation and amortization|19,641,826.87|20,481,357.98|
|Agencies|2,719,764.57|2,656,463.76|
|Tax|3,426,306.86|6,751,421.27|
|Maintenance costs|7,328,236.95|3,412,131.84|
|Water and electricity|892,352.37|1,184,279.09|
|Office expense|3,606,589.30|3,571,187.92|
|Travel expense|4,034,018.87|4,045,460.27|
|R&D|22,757,378.01|15,984,404.14|
|Entertainment expense|2,748,111.05|2,645,057.19|
|Rental|4,147,170.84|4,785,932.74|
|Lawsuit|2,260,015.75|649,572.33|
|Material consumption|457,209.56|778,422.18|
|Property management fee|2,834,001.28|2,516,885.44|
|Waste loss|5,996,649.87|4,691,551.61|
|Others|10,162,375.53|9,583,792.01|

China Fangda Group Co., Ltd. 2016 Annual Report
||||
|-|-|-|
|Total|171,922,091.39|167,405,776.25|

 Others:
The waste loss is the loss of waste of poor-quality products of Fangda SOZN.
45. Financial expenses
In RMB
||||
|-|-|-|
|Items|Amount occurred in the current period|Occurred in previous period|
|Interest expense|82,558,159.00|80,931,355.63|
|Less: interest capitalization|45,862,952.52|28,904,802.93|
|Less: Interest income|6,701,201.41|3,457,387.56|
|Acceptant discount|3,504.16|65,135.33|
|Exchange gain/loss|-3,282,947.53|-1,714,534.78|
|Commission charges and others|1,540,835.73|3,752,724.36|
|Total|28,255,397.43|50,672,490.05|

 Others:
46. Assets impairment loss
In RMB
||||
|-|-|-|
|Items|Amount occurred in the current period|Occurred in previous period|
|1. Bad debt loss|117,097,192.87|34,581,867.08|
|2. Inventory depreciation loss|29,306,243.12|8,985,113.10|
|7. Fixed assets impairment loss|26,409,144.27||
|12. Intangible assets impairment loss|5,268,680.03||
|13. Goodwill impairment loss|19,826,696.97|6,452,698.92|
|Total|197,907,957.26|50,019,679.10|

 Others:
1. The increase in inventory depreciation loss is attributable to the impairment loss made due to that products of Fangda SOZN are no longer produced.
2. Fix assets and intangible assets impairment loss is the evaluation impairment loss due to the liquidation of Shenyang Fangda. 47. Income from fair value fluctuation
In RMB
||||
|-|-|-|
|Source of income from fluctuation of fair|||
||Amount occurred in the current period|Occurred in previous period|
|value|||

China Fangda Group Co., Ltd. 2016 Annual Report
||||
|-|-|-|
|Financial assets measured at fair value|||
|with variations accounted into current|-1,099,400.09|3,952,285.09|
|income account|||
|Investment real estate measured at fair|||
||17,550,094.59|85,793,780.49|
|value|||
|Effective part in the gain and loss of|||
||412,128.63||
|arbitrage of cash flow|||
|Total|16,862,823.13|89,746,065.58|

 Others:
48. Investment income
In RMB
||||
|-|-|-|
|Items|Amount occurred in the current period|Occurred in previous period|
|Gains from long-term equity investment|||
||-1,384,650.25|-358,979.50|
|measured by equity|||
|Investment gain obtained from disposal of|||
|financial assets measured at fair value with|||
||3,057,110.93|389,031.83|
|variations accounted into current income|||
|account|||
|Gain from re-measurement of remaining|||
|shares at fair value after loss of the control|58,154,670.60||
|power|||
|Investment gain of financial products|1,401,717.08||
|Other investment gains||250,897.54|
|Total|61,228,848.36|280,949.87|

 Others:
49. Non-business income
In RMB
|||||
|-|-|-|-|
||Amount occurred in the current||Amount accounted into the|
|Items||Occurred in previous period||
||period||current accidental gain/loss|
|Total of gains from disposal of|110,009.46|51,130.66||
||||110,009.46|
|non-current assets||||
|Including: Gains from disposal||||
||63,855.61|51,130.66|63,855.61|
|of fixed assets||||
|Government subsidy|7,571,963.67|2,246,386.84|7,571,963.67|
|Penalty income|239,809.06|1,339,217.86|239,809.06|

China Fangda Group Co., Ltd. 2016 Annual Report
|||||
|-|-|-|-|
|Payable account not able to be||||
||534,238.75|2,269,833.14|534,238.75|
|paid||||
|Compensation received||51,499.74||
|VAT rebated into revenue|2,852,268.61|2,086,502.67||
|Others|7,019,210.97|21,623,539.34|7,019,210.97|
|Total|18,327,500.52|29,668,110.25|15,475,231.91|

 Government subsidies accounted into current profit or loss:
In RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
|||||Whether||Amount|||
||||||Whether it is||Occurred in|Related to|
|||||affecting gain||occurred in|||
|Item|Issuer|Reason|Nature||a special||previous|assets/earnin|
|||||and loss in||the current|||
||||||subsidy||period|g|
|||||this year||period|||
|Railway|||||||||
|transport|||Subsidy for||||||
|screen door|Shenzhen||research||||||
|controlling|Technology||development,|||||Assets-relate|
|||Subsidy||No|No|43,229.28|40,770.60||
|system and|Innovation||technology|||||d|
|information|Committee||upgrade and||||||
|transmission|||improvement||||||
|technology|||||||||
|Major|||||||||
|investment|||||||||
|project prize|||||||||
|from Industry|Gongguan||Local subsidy||||||
|and Trade|Trade and||for|||||Assets-relate|
|||Subsidy||No|No|57,142.80|57,142.80||
|Development|Industry||encouraging|||||d|
|Division of|Bureau||investment||||||
|Dongguan|||||||||
|Finance|||||||||
|Bureau|||||||||
|Massive|||||||||
|production|||Subsidy for||||||
|project of|Guangdong||research||||||
|air-breathing|Development||development,|||||Assets-relate|
|||Subsidy||No|No|123,987.24|122,256.30||
|double-layer|and Reform||technology|||||d|
|hollow glass|Commission||upgrade and||||||
|energy-savin|||improvement||||||
|g curtain call|||||||||
|LED|Zhongshan||Subsidy for||||||
|||||||||Assets-relate|
|production|Reform and|Subsidy|research|No|No|381,219.96|31,768.33||
|||||||||d|
|expansion|Development||development,||||||

China Fangda Group Co., Ltd. 2016 Annual Report
||||||||||
|-|-|-|-|-|-|-|-|-|
|technology|Bureau||technology||||||
|renovation|||upgrade and||||||
|project|||improvement||||||
|Subsidy for|||||||||
|purchase of|||Subsidy for||||||
|scientific|Zhongshan||research||||||
|achievements|Reform and||development,|||||Assets-relate|
|||Subsidy||No|No|80,141.67|1,358.33||
|or|Development||technology|||||d|
|technological|Bureau||upgrade and||||||
|ly innovative|||improvement||||||
|services|||||||||
||||Subsidy for||||||
|Distributed|||||||||
||||engaging in||||||
|PV power|||||||||
||||industries||||||
|generation|||||||||
||||that the||||||
|project|Guangdong||||||||
||||government||||||
|subsidy|Development|||||||Assets-relate|
|||Subsidy|encourages|No|No|31,249.95|||
|sponsored by|and Reform|||||||d|
||||and support||||||
|Dongguan|Commission||||||||
||||(received in||||||
|Reform and|||||||||
||||accordance||||||
|Development|||||||||
||||with national||||||
|Commission|||||||||
||||policies)||||||
|Nanchang|||||||||
|hi-tech|||||||||
||Nanchang||||||||
|finance|||||||||
||Hi-tech||||||||
|bureau|||||||||
||Industry Park||||||||
|industry||||||||Earning-relat|
||management|Subsidy||No|No|296,200.00|162,900.00||
|development||||||||ed|
||committee,||||||||
|zone|||||||||
||Finance||||||||
|committee|||||||||
||Bureau||||||||
|exhibition|||||||||
|subsidy|||||||||
|Zhongshan|||||||||
|Finance|Zhongshan||||||||
|||||||||Earning-relat|
|Bureau Dubai|Finance|Subsidy||No|No||403,590.48||
|||||||||ed|
|exhibition|Bureau||||||||
|subsidy|||||||||
|Shenzhen|Shenzhen||||||||
|Market and|Market and||||||||
|Quality|Quality|||||||Earning-relat|
|||Award||No|No||1,000,000.00||
|Supervisory|Supervisory|||||||ed|
|Committee,|Administratio||||||||
|Nanshan|n, Nanshan||||||||

China Fangda Group Co., Ltd. 2016 Annual Report
||||||||||
|-|-|-|-|-|-|-|-|-|
|Market|Market and||||||||
|Supervisory|Quality||||||||
|Management|Supervisory||||||||
|Bureau, 2014|Administratio||||||||
|Nanshan|n||||||||
|People’s|||||||||
|Government|||||||||
|high quality|||||||||
|award|||||||||
|Xinjin|Xinjin||||||||
|Technology|Economic||||||||
|||||||||Earning-relat|
|Commission|and|Subsidy||No|No|150,000.00|173,200.00||
|||||||||ed|
|2015 plant|Technology||||||||
|lease subsidy|Committee||||||||
|Dongguan|||||||||
|Economic|||||||||
|and|||||||||
||Gongguan||||||||
|Information|||||||||
||Economy and|||||||Earning-relat|
|Bureau||Subsidy||No|No||100,000.00||
||Information|||||||ed|
|enterprise|||||||||
||Bureau||||||||
|development|||||||||
|training|||||||||
|subsidy|||||||||
|Micro-busine|||||||||
|||||||||Earning-relat|
|ss load|0|Subsidy||No|No|295,667.00|100,000.00||
|||||||||ed|
|discount|||||||||
|Shenzhen key|||||||||
|industry|||||||||
||Shenzhen||||||||
|enterprise||||||||Earning-relat|
||Financial|Award||No|No|2,863,000.00|||
|production||||||||ed|
||Committee||||||||
|expansion|||||||||
|prize|||||||||
||Shenzhen||||||||
|Nanshan|Nanshan||||||||
|District|District|||||||Earning-relat|
|||Subsidy||No|No|500,000.00|||
|mic-business|Economic|||||||ed|
|loan discount|Promotion||||||||
||Bureau||||||||
|Zhongshan|||Subsidy for||||||
||Zhongshan||||||||
|market|||engaging in|||||Earning-relat|
||Business|Award||No|No|440,458.47|||
|promotion|||industries|||||ed|
||Bureau||||||||
|subsidy|||that the||||||

China Fangda Group Co., Ltd. 2016 Annual Report
|||||||||
|-|-|-|-|-|-|-|-|
||||government|||||
||||encourages|||||
||||and support|||||
||||(received in|||||
||||accordance|||||
||||with national|||||
||||policies)|||||
|Small-to-med||||||||
|ium||||||||
||Shenzhen|||||||
|enterprise IT|||||||Earning-relat|
||SME Service|Subsidy||No|No|470,000.00||
|construction|||||||ed|
||Center|||||||
|project||||||||
|subsidy||||||||
||||Subsidy for|||||
||||engaging in|||||
|Zhongshan|||industries|||||
|Economic|||that the|||||
||Zhongshan|||||||
|and|||government|||||
||Economy and||||||Earning-relat|
|Information||Subsidy|encourages||No|200,000.00||
||Information||||||ed|
|Bureau,|||and support|||||
||Bureau|||||||
|high-growth|||(received in|||||
|SME project|||accordance|||||
||||with national|||||
||||policies)|||||
|Shenzhen||||||||
|Scientific and||||||||
|Technology|||Subsidy for|||||
||Shenzhen|||||||
|Innovation|||research|||||
||Science and|||||||
|Commission|||development,||||Earning-relat|
||Technology|Award||No|No|200,000.00||
|2015|||technology||||ed|
||Innovation|||||||
|Shenzhen|||upgrade and|||||
||Committee|||||||
|Scientific and|||improvement|||||
|Technology||||||||
|Prize||||||||
|Shenzhen IT||||||||
||Shenzhen|||||||
|application||||||||
||Economic|||||||
|and|||||||Earning-relat|
||Trade and|Award||No|No|200,000.00||
|industrializati|||||||ed|
||Information|||||||
|on integration||||||||
||Commission|||||||
|subsidy||||||||
|Employment|||||||Earning-relat|
|||Subsidy||No|No|391,385.44||
|subsidy|||||||ed|

China Fangda Group Co., Ltd. 2016 Annual Report
||||||||||
|-|-|-|-|-|-|-|-|-|
|Zhongshan|||||||||
|Scientific and|||||||||
||Zhongshan||||||||
|Technology|||||||||
||Scientific and|||||||Earning-relat|
|Bureau,||Subsidy||No|No|100,000.00|||
||Technology|||||||ed|
|research and|||||||||
||Bureau||||||||
|development|||||||||
|subsidy|||||||||
|Hi-tech|||||||||
||Shenzhen||Subsidy for||||||
|technology|||||||||
||Nanshan||research||||||
|enterprise|||||||||
||District||development,|||||Earning-relat|
|income||Subsidy||No|No|100,000.00|||
||Scientific and||technology|||||ed|
|doubling|||||||||
||Technology||upgrade and||||||
|program|||||||||
||Bureau||improvement||||||
|subsidy|||||||||
|Government|||||||||
|||||||||Earning-relat|
|exhibition||||No|No|289,100.00|||
|||||||||ed|
|subsidy|||||||||
|||||||||Earning-relat|
|Others||||No|No|359,181.86|53,400.00||
|||||||||ed|
|Total||||||7,571,963.67|2,246,386.84||

Others:
50. Non-business expenses
In RMB
|||||
|-|-|-|-|
||Amount occurred in the current||Amount accounted into the|
|Items||Occurred in previous period||
||period||current accidental gain/loss|
|Total of losses from disposal of|2,565,237.38|574,079.38||
||||2,565,237.38|
|non-current assets||||
|Including: Losses from disposal||||
||2,565,237.38|572,147.30|2,565,237.38|
|of fixed assets||||
|Intangible asset disposal||||
|||1,932.08||
|loss||||
|Loss from debt reorganization|2,445,254.63||2,445,254.63|
|Donation|1,459,000.00|103,000.00|1,459,000.00|
|Penalty and overdue fine|202,334.32|745,502.42|202,334.32|
|Lawsuit indemnity||16,072,719.43||
|Others|274,078.98|738,438.84|274,078.98|
|Total|6,945,905.31|18,233,740.07|6,945,905.31|

Others:
China Fangda Group Co., Ltd. 2016 Annual Report The increase in the loss from debt reorganization is mainly attributable to the net loss of RMB1,822,317.29 of the deduction of the accounts payable with property sales payment.
51. Income tax expenses
(1) Details about income tax expense
In RMB
||||
|-|-|-|
|Items|Amount occurred in the current period|Occurred in previous period|
|Income tax expenses in this period|187,970,348.62|25,259,694.31|
|Deferred income tax expenses|16,014,977.82|9,950,177.30|
|Total|203,985,326.44|35,209,871.61|

 (2) Adjustment process of accounting profit and income tax expense
In RMB
|||
|-|-|
|Items|Amount occurred in the current period|
|Total profit|859,975,758.43|
|Income tax expenses calculated based on the legal (or applicable)||
||214,993,939.61|
|tax rates||
|Impacts of different tax rates applicable for some subsidiaries|-18,070,752.58|
|Impacts of income tax before adjustment|417,654.42|
|Impact of non-taxable income|-749,987.54|
|Impacts of non-deductible cost, expense and loss|2,510,130.95|
|Deductible temporary difference and deductible loss of||
||15,479,558.79|
|unrecognized deferred income tax assets||
|Profit and loss of associates and joint ventures calculated using||
||346,162.56|
|the equity method||
|Taxation impact of R&D expense and (presented with ―-‖)|-1,686,784.85|
|Impact of tax rate change on the opening balance of deferred||
||95,940.83|
|income tax||
|Others|-9,350,535.75|
|Income tax expenses|203,985,326.44|

 Other note
Others are mainly the impact on the gain of RMB-14,166,600.62 caused by the re-measurement of remaining shares at fair value and the goodwill impairment loss provision of RMB4,956,674.24 after the Company lost control power on Shenyang Fangda.
China Fangda Group Co., Ltd. 2016 Annual Report 52. Other miscellaneous income
See Note 38
53. Notes to the cash flow statement
(1) Other cash inflow related to operation
In RMB
||||
|-|-|-|
|Items|Amount occurred in the current period|Occurred in previous period|
|Interest income|6,701,201.41|3,457,387.56|
|Subsidy income|8,024,105.44|4,424,840.91|
|Retrieving of deposits for exchange bills|89,667,363.82|21,616,730.24|
|Retrieving of bidding deposits|26,828,027.88|32,627,388.88|
|Other operating accounts|17,530,047.54|18,283,799.79|
|Total|148,750,746.09|80,410,147.38|

 Notes to other cash inflow related to operation:
(2) Other cash paid related to operation
In RMB
||||
|-|-|-|
|Items|Amount occurred in the current period|Occurred in previous period|
|Sales expense|13,114,184.67|45,847,988.68|
|Administrative expense|30,155,561.02|47,475,924.55|
|Bidding deposit paid|95,015,574.87|20,962,337.79|
|Net draft deposit net paid|6,738,582.00||
|Other trades|22,802,418.76|43,684,340.50|
|Total|167,826,321.32|157,970,591.52|

 Notes to other cash paid related to operation:
(3) Other cash paid related to investment activities
In RMB
||||
|-|-|-|
|Items|Amount occurred in the current period|Occurred in previous period|
|Bidding deposit paid related to|||
||2,650,000.00|263,000.00|
|construction projects|||
|Net cash from disposal of subsidiaries|16,097.15||
|Total|2,666,097.15|263,000.00|

Notes to other cash paid related to investment activities:
China Fangda Group Co., Ltd. 2016 Annual Report (4) Other cash received related to financing
In RMB
||||
|-|-|-|
|Items|Amount occurred in the current period|Occurred in previous period|
|Fractional historical dividend|94.24|398.76|
|Financing deposit|53,500,000.00||
|Total|53,500,094.24|398.76|

 Notes to other cash received related to financing:
(5) Other cash paid related to financing
In RMB
||||
|-|-|-|
|Items|Amount occurred in the current period|Occurred in previous period|
|Financing commissioning and|||
||1,307,919.173|1,063,032.79|
|intermediary cost|||
|Financing deposit||53,500,000.00|
|Total|1,307,919.17|54,563,032.79|

 Notes to other cash paid related to financing:
54. Supplementary data of cash flow statement
(1) Supplementary data of cash flow statement
In RMB
||||
|-|-|-|
|Supplementary information|Amount of the Current Term|Amount of the Previous Term|
|1. Net profit adjusted to cash flow of|||
||--|--|
|business operation|||
|Net profit|655,990,431.99|68,215,355.27|
|Plus: Asset impairment provision|197,907,957.26|50,019,679.10|
|Fixed asset depreciation, gas and petrol|||
||28,600,241.74|29,667,469.67|
|depreciation, production goods depreciation|||
|Amortization of intangible assets|3,723,769.63|4,231,668.67|
|Amortization of long-term amortizable|||
||4,573,606.05|2,112,083.23|
|expenses|||
|Loss from disposal of fixed assets, intangible|||
|assets, and other long-term assets (―-― for|4,843,433.36|467,841.04|
|gains)|||
|Loss from fixed asset discard (―-― for gains)|98,653.04|55,107.68|
|Loss from fair value fluctuation (―-― for|-10,401,660.45|-89,746,065.58|

China Fangda Group Co., Ltd. 2016 Annual Report
||||
|-|-|-|
|gains)|||
|Financial expenses (―-― for gains)|32,931,793.50|53,913,128.67|
|Investment losses (―-― for gains)|-61,228,848.36|-280,949.87|
|Decrease of deferred income tax asset|||
||-110,869,888.04|-13,310,154.14|
|(―-― for increase)|||
|Increase of deferred income tax asset (―-― for|||
||126,887,503.93|23,260,331.44|
|increase)|||
|Decrease of inventory (―-― for increase)|-627,473,046.34|-344,116,557.17|
|Decrease of operational receivable items|||
||-879,090,079.01|-382,966,262.27|
|(―-― for increase)|||
|Increase of operational receivable items|||
||1,159,551,630.20|296,786,891.68|
|(―-― for decrease)|||
|Others|-60,328,423.58|-58,424,681.46|
|Cash flow generated by business operations,|465,717,074.92|-360,115,114.04|
|net|||
|2. Major investment and financing operation|||
||--|--|
|not involving with cash|||
|3. Net change of cash and cash equivalents|--|--|
|Balance of cash at period end|935,824,575.40|247,739,243.78|
|Less: Initial balance of cash|247,739,243.78|102,638,232.19|
|Net increase in cash and cash equivalents|688,085,331.62|145,101,011.59|

 (2) Net cash from disposal of subsidiaries received in this period
In RMB
|||
|-|-|
||Amount|
|Including:|--|
|Shenyang Fangda||
|Shenzhen Woke||
|Less: cash and cash equivalent held by subsidiaries on the date of||
||16,097.15|
|losing control power||
|Including:|--|
|Shenyang Fangda|219.49|
|Shenzhen Woke|15,877.66|
|Including:|--|
|Shenyang Fangda||
|Shenzhen Woke||

China Fangda Group Co., Ltd. 2016 Annual Report
|||
|-|-|
|Net cash received from disposal of subsidiaries|-16,097.15|

 Others:
Subsidiary Shenyang Fangda and Shenzhen Woke have been transferred to the liquidation group specified by court in the report period. The Company no longer has control power.
(3) Composition of cash and cash equivalents
In RMB
||||
|-|-|-|
|Items|Closing balance|Opening balance|
|I. Cash|935,824,575.40|247,739,243.78|
|Including: Cash in stock|11,625.54|28,072.46|
|Bank savings can be used at any time|931,980,821.51|242,777,612.25|
|Other monetary capital can be used at|||
||3,832,128.35|4,933,559.07|
|any time|||
|3. Balance of cash and cash equivalents at|935,824,575.40|247,739,243.78|
|end of term|||

Others:
55. Ownership- or use-right-restricted assets
In RMB
||||
|-|-|-|
|Items|Closing book value|Reason|
|Monetary capital|159,405,262.50|Frozen deposit and pledge|
|Fixed assets|74,379,007.79|Borrowing pledge or frozen by a court|
|Investment real estate|296,740,660.63|Loan by pledge|
|100% stake in Fangda Property|||
||200,000,000.00|Loan by pledge|
|Development held by the Company|||
|Total|730,524,930.92|--|

Others:
56. Foreign currency monetary items
(1) Foreign currency monetary items
In RMB
|||||
|-|-|-|-|
||Closing foreign currency|||
|Items||Exchange rate|Closing RMB balance|
||balance|||
|Including: USD|386,078.18|6.9370|2,678,224.34|
|HK Dollar|40,856,763.11|0.8945|36,546,783.17|

China Fangda Group Co., Ltd. 2016 Annual Report
|||||
|-|-|-|-|
|SGD|721,607.38|4.7995|3,463,354.62|
|Including: USD|8,191,725.01|6.9370|56,825,996.39|
|Euro|||2,512,322.27|
|HK Dollar|-27,732,179.00|0.8945|-24,806,712.24|
|SGD|523,455.00|4.7995||
|Prepayment||||
|Including: USD|15,758.00|6.9370|109,313.25|
|HK Dollar|43,900.00|0.8945|39,268.99|
|Other receivables||||
|Including: USD|11,795.45|6.9370|81,825.04|
|HK Dollar|1,420.00|0.8945|1,270.20|
|Account payable||||
|Including: SGD|98,000.00|4.7995|470,351.00|
|Account receivable||||
|Including: HKD|13,933,824.38|0.8945|12,463,945.25|
|Other payables||||
|Including: HKD|100.00|0.8945|89.45|

 Others:
(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
57. 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
Disposal of a subsidiary in multiple steps that lead to loss of control in the report period
China Fangda Group Co., Ltd. 2016 Annual Report□ 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. Fangda Automation (Hong Kong) Co., Ltd. indirectly controlled by the Company was set up in the report period.
The subsidiary of the Company Ganzhou Longneng New Energy Co., Ltd. controlled indirectly by the Company was liquidized in this period. In July 2016, the Company transfers Shengyang Fangda and Shenzhen Woke that it controlled directly or indirectly to the liquidation team specified by thePeople’s Court of Hunnan District of Shengyang Liaoning Tongwen Law Firm and no longer controls the two companies. Therefore, three subsidiaries are moved out of the consolidation scope in this period.
IX. Equity in Other Entities
1. Interests in subsidiaries
(1) Group Composition
||||||||
|-|-|-|-|-|-|-|
|||Registered||Shareholding percentage|||
|Company|Place of business||Business|||Obtaining method|
|||address||Direct|Indirect||
||||Designing,||||
||||manufacturing,||||
|Fangda Jianke|Shenzhen|Shenzhen||98.39%|1.61%|Incorporation|
||||and installation of||||
||||curtain walls||||
||||Production,||||
||||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|
|Material|||||||
||||materials and||||
||||production of||||
||||curtain walls||||
||||Design,||||
||||production, sales||||
|Fangda|||||||
||Nanchang|Nanchang|and installation of|99.00%|1.00%|Incorporation|
|Aluminum|||||||
||||aluminium||||
||||materials, doors||||

China Fangda Group Co., Ltd. 2016 Annual Report
||||||||
|-|-|-|-|-|-|-|
||||and windows||||
||||Manufacturing of||||
||||semiconductor||||
||||lighting material||||
||||and chips;||||
||||lighting source||||
||||encapsulation;||||
||||developing,||||
|Shenyang Fangda|Shenyang|Shenyang||64.58%||Incorporation|
||||designing,||||
||||manufacturing,||||
||||engineering,||||
||||installation and||||
||||trading of||||
||||semiconductor||||
||||lighting system||||
||||Computer||||
|Kexunda|Shenzhen|Shenzhen|software||100.00%|Incorporation|
||||development||||
||||Real estate||||
|Fangda Property|Shenzhen|Shenzhen|development and|100.00%||Incorporation|
||||operation||||
||||Design and||||
|Fangda New|||||||
||Shenzhen|Shenzhen|construction of|100.00%||Incorporation|
|Energy|||||||
||||PV power plants||||
||||Trusted||||
||||processing of||||
|Chengdu Fangda|Chengdu|Chengdu|||100.00%|Incorporation|
||||building curtain||||
||||wall materials||||
|Shihui|||||||
|International|Virgin Islands|Virgin Islands|Investment|100.00%||Incorporation|
|Holding Co., Ltd.|||||||
||||Installation and||||
|Dongguan New|||||||
||Dongguan|Dongguan|sales of building||100.00%|Incorporation|
|Material|||||||
||||curtain walls||||
||||Designing,||||
|Shenyang|||manufacturing,||||
||Shenyang|Shenyang|||100.00%|Incorporation|
|Decoration|||and installation of||||
||||curtain walls||||
||||Installation of|||Consolidation of|
|Shenzhen Woke|Shenzhen|Shenzhen|LED color curtain||64.58%|entities not under|
||||wall, city and|||common control|

China Fangda Group Co., Ltd. 2016 Annual Report
|||||||
|-|-|-|-|-|-|
||||road lamps|||
||||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|
|Management|||management|||
|Jiangxi Fangda||||||
||||Real estate|||
|Property||||||
||Nanchang|Nanchang|development and|100.00%|Incorporation|
|Development Co.,||||||
||||operation|||
|Ltd.||||||
|Ganzhou|||Design and|||
|Longneng New|Ganzhou|Ganzhou|construction of|100.00%|Incorporation|
|Energy Co., Ltd.|||PV power plants|||
|Pingxiang Fangda|||Design and|||
|Luxin New|Pingxiang|Pingxiang|construction of|100.00%|Incorporation|
|Energy Co., Ltd.|||PV power plants|||
|Pingxiang||||||
||||Design and|||
|Xiangdong||||||
||Pingxiang|Pingxiang|construction of|100.00%|Incorporation|
|Fangda New||||||
||||PV power plants|||
|Energy Co., Ltd.||||||
|Nanchang Xinjian|||Design and|||
|Fangda New|Nanchang|Nanchang|construction of|100.00%|Incorporation|
|Energy Co., Ltd.|||PV power plants|||
|Dongguan|||Design and|||
|Fangda New|Dongguan|Dongguan|construction of|100.00%|Incorporation|
|Energy Co., Ltd.|||PV power plants|||
|Kechuangyuan|||Software|||
||Shenzhen|Shenzhen||100.00%|Incorporation|
|Software|||development|||
|Fangda||||||
|Automation|||Metro screen|||
||Hong Kong|Hong Kong||100.00%|Incorporation|
|(Hong Kong) Co.,|||door|||
|Ltd.||||||

Others:
Ganzhou New Energy was liquidized in 2016. Shenyang Fangda and Shenzhen Woke were transferred to the liquidation team specified by the court for liquidation in 2016. The Company no longer has control power.
Others:
China Fangda Group Co., Ltd. 2016 Annual Report 2. Interests in joint ventures or associates
(1) Financial summary of insignificant joint ventures and associates
In RMB
||||
|-|-|-|
||Closing balance/amount occurred in this|Opening balance/amount occurred in|
||period|previous period|
|Joint venture:|--|--|
|Total book value of investment|12,105,030.68|10,489,680.93|
|Total shareholding|--|--|
|Net profit|-1,384,650.25|-358,979.50|
|Total of misc. incomes|-1,384,650.25|-358,979.50|
|Associate:|--|--|
|Total shareholding|--|--|

Other note
X. Risks of Financial Tools
Major financial tools of the Group include monetary fund, accounts receivable, receivable bills, other receivables, other current assets, financial assets measured at fair value and whose change recorded in the profit and loss of this period, accounts payable, interest payable, payable bills, other payables, short-term borrowings, other current liabilities, non-current liabilities due within one year and long-term borrowings. Details about the Group's financial instruments are disclosed in related notes. The following explains risks related to the financial instruments and risk management policies adopted by the Group to lower the risks. The management of the Group manages and monitor the risks to ensure that the risks are within the acceptable range.
1. Risk management target and policy
The target of the risk management is to balance between risk and benefit and lower financialrisks’ impacts on theGroup’s financial performance. Based on the target, the Group has formulated risk management policy to identify and analyze risks facing the Group and set an appropriate acceptable level and internal control procedures to monitor the risks. The Group regularly reviews the risk management policies and related internal control system to suit the market status and changes in theGroup’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 theGroup’s financial instruments are credit risk, liquidity risk and market risk (including interest, exchange rate and product price/equity tool price risks).
(1) Credit risk
Credit risk is caused by the failure of one party of a financial instrument in performing its obligations, causing the risk of financial loss for the other party.
The Group manages credit risks through classification. The credit risk is mainly caused by bank deposit and receivables.
TheGroup’s bank deposit is mainly deposited in state-owned banks and large-sized listed banks. The credit risk caused by bank
China Fangda Group Co., Ltd. 2016 Annual Report 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 monitorsdebtors’ credit record. For those with poor credit record, the Group will send written payment reminders, shorten or cancel credit term to lower the general credit risk.
The largest credit risk facing the Group is the book value of each financial asset on the balance sheet. The Group makes no guarantee that may cause the Group credit risks.
Among theGroup’s receivables, accounts receivable from top 5 customers account for23.59% of the total accounts receivable (2015:12.92%); among other receivables, other receivables from top 5 customers account for35.93% of the total other receivables (2015:19.64%).
(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, 2016, the total credit line of the Group was RMB4,338,000,000, with RMB2,345,596,800 unused (December 31, 2015: RMB2,493,301,800).
Financial liabilities and excluded guarantees held by the Group by undiscounted residual contract cash flow (in RMB10,000) at the end of the period:
||||||
|-|-|-|-|-|
||Closing amount||||
|Assets|Less than 1 year|Within 1-3 years|Over 3 years|Total|
|Financial liabilities:|||||
|Short-term loans|59,100.00|||59,100.00|
|Notes payable|55,730.13|||55,730.13|
|Account payable|113,483.10|14,042.50||127,525.60|
|Interest payable|263.50|||263.50|
|Other payables|5,636.61|30,981.67||36,618.28|
|Other current liabilities|3,514.81|||3,514.81|
|Long-term loans||20,000.00|72,216.96|92,216.96|
|Total liabilities|237,728.15|65,024.17|72,216.96|374,969.28|

 Financial liabilities and excluded guarantees held by the Group by undiscounted residual contract cash flow (in RMB10,000) at the beginning of the period:
China Fangda Group Co., Ltd. 2016 Annual Report
||||||
|-|-|-|-|-|
||Opening amount||||
|Assets|Less than 1 year|Within 1-3 years|Over 3 years|Total|
|Financial liabilities:|||||
|Short-term loans|114,795.78|||114,795.78|
|Notes payable|30,352.76|||30,352.76|
|Account payable|86,262.17|500.67||86,762.84|
|Interest payable|324.18|||324.18|
|Other payables|8,267.73|||8,267.73|
|Non-current liabilities due in 1year|9,842.56|||9,842.56|
|Long-term payable|||30,039.56|30,039.56|
|Total liabilities|249,845.18|500.67|30,039.56|280,385.41|

 (3) Market risk
Market risk of financial instrument is caused by changes in the fair value of financial instruments or future cash flow, including interest risk, exchange rate and other price risks.
Interest rate risk is caused by fluctuation of the fair value or future cash flow of financial instruments caused by changes in the market interest rate. The interest rate risk can be caused by recognized interest-bearing financial instruments and unrecognized financial instruments.
The Group's interest rate risk is mainly caused by short-term borrowings, other current liabilities and long-term borrowings. Financial liabilities with floating interest rate cause cash flow interest rate risk for the Group. Financial liabilities with fixed interest rate cause fair value interest rate risk for the Group. The Group decides the proportion between fixed interest rate and floating interest rate according to the market environment and regularly reviews and monitors the combination of fixed and floating interest rate instruments. All financial liabilities of the Group at the end of the period bear fixed interest rawtes.
The Group pays close attention to the risks of changing interest rates. The Group adopts no hedging policies currently. The management is responsible for monitoring the interest risks. As fixed deposits are short-term borrowing, the interest rate risk of the fair value of bank deposit is minor.
Because there was no floating interest borrowings in the period, theGroup’s net profit andshareholders’ equity on December 31, 2016 remained unchanged (December 31, 2015: RMB25, 000.00).
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.
The Group mainly operates in China and use RMB as the settlement currency. Therefore, the exchange rate risk facing the Group is minor.
See Note V. 51 Foreign Currency Item Note for theGroup’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
China Fangda Group Co., Ltd. 2016 Annual Report 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.
Investment in financial assets held by the Group, classified as measured at fair value and whose changes recorded into the gain and loss in this period is measured at its fair value on the balance sheet date. Therefore, the Group bears risks of changes in the securities market.
The Group closely follows impacts of price changes to theCompany’s securities investment price risks. The Group takes no measure to prevent other price risks currently.The management is responsible for monitoring the other price risks.
2. Capital management
TheGroup’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 31.12.16, theGroup’s assets/liability ratio is66.08% (31.12.15:70.12%).
XI. Fair Value
1. Closing fair value of assets and liabilities measured at fair value
In RMB
||||||
|-|-|-|-|-|
||Closing fair value||||
|Items|||||
||First level fair value|Second level fair value|Third level fair value|Total|
|1. Continuous fair value|||||
||--|--|--|--|
|measurement|||||
|3. Derivative financial|||||
||2,232,200.00|||2,232,200.00|
|assets|||||
|2. Leased building||303,090,562.62||303,090,562.62|
|2. Discontinuous fair|||||
||--|--|--|--|
|value measurement|||||

2. Recognition basis of market value of continuous and discontinuous items measured at first level fair value
The Group determines the fair value using quotation in an active market for financial instruments traded in an active market;
China Fangda Group Co., Ltd. 2016 Annual Report 3. 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|3,000.00|8.72%|8.72%|
|Development Co.,||||||
|Ltd.||||||
|Shenzhen Shilihe||||||
||Shenzhen|Industrial investment|1,978.0992|2.26%|2.26%|
|Investment Co., Ltd.||||||
|Shengjiu Investment||||||
||Hong Kong|Industrial investment|HKD1.00|7.27%|7.27%|
|Ltd.||||||

Particulars about the parent of the Company
(1) All of the investors of Shenzhen Banglin Technology Development Co., Ltd.– the holding shareholder of the Company, are natural persons. Among them, Chairman Xiong Jianming is holding85% of the shares, and Mr. Xiong Xi– son of Mr. Xiong Jianming, is holding15% of the shares.
(2) Among the top 10 shareholders, Shenzhen Banglin Technology Development Co., Ltd. and Shengjiu Investment Co., Ltd. are parties action-in-concert. Shenzhen Banglin Technology Development Co., Ltd. and
Shenzhen Shilihe Investment Co., Ltd. are related parties. The Company is not notified of other action-in-concert or related
parties among the other holders of current shares.
China Fangda Group Co., Ltd. 2016 Annual Report The final controller of the Company is Xiong Jianming.
2. Subsidiaries of the Company
See Note IX. 1.
3. Joint ventures and associates
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|

Other note
4. Other associates
|||
|-|-|
|Other related parties|Relationship with the Company|
|Directors, manager, CFO and secretary of the Board of Directors|Key management|

5. Related transactions
(1) Related leasing
The Company is the leasor:
In RMB
|||||
|-|-|-|-|
|Name of the leasee|Category of asset for lease|Rental recognized in the period|Rental recognized in the period|
|Shenzhen Ganshang Joint||||
||Houses & buildings|121,988.10|125,213.36|
|Investment Co., Ltd.||||

(2) Related guarantees
The Company is the guarantor:
In RMB
||||||
|-|-|-|-|-|
|Beneficiary party|Amount guaranteed|Start date|Due date|Completed or not|
|Fangda Jianke|48,000.00|06.07.16|05.07.18|No|
|Fangda Jianke|26,000.00|27.12.16|02.11.17|No|
|Fangda Jianke|40,000.00|01.11.16|01.11.17|No|
|Fangda Jianke|20,000.00|23.08.16|22.08.17|No|
|Fangda Jianke|25,000.00|26.10.16|25.10.17|No|

China Fangda Group Co., Ltd. 2016 Annual Report
||||||
|-|-|-|-|-|
|Fangda Jianke|20,000.00|17.10.16|17.10.17|No|
|Fangda Jianke|10,000.00|17.11.16|17.11.17|No|
|Fangda Automatic|21,600.00|06.07.16|05.07.18|No|
|Fangda Automatic|10,000.00|12.12.16|12.12.17|No|
|Fangda Automatic|10,000.00|27.12.16|02.11.17|No|
|Fangda New Material|8,000.00|25.05.16|19.05.17|No|
|Fangda New Material|5,200.00|09.12.16|09.12.17|No|
|Fangda Property|130,000.00|03.02.15|02.02.23|No|

The Company is the guarantied party:
In RMB
||||||
|-|-|-|-|-|
|Guarantor|Amount guaranteed|Start date|Due date|Completed or not|
|Fangda Jianke, Fangda|||||
||20,000.00|12.12.16|12.12.17|No|
|Automatic|||||
|Fangda Jianke, Fangda|||||
||10,000.00|09.09.15|08.03.17|No|
|New Energy|||||

Note to related guarantees
(3) Remuneration of key management
In RMB
||||
|-|-|-|
|Items|Amount occurred in the current period|Occurred in previous period|
|Directors, supervisors and senior|||
||7,214,700.62|6,801,794.99|
|management|||

6. Receivable and payables due with related parties
(1) Receivable items
In RMB
|||||||
|-|-|-|-|-|-|
|||Closing balance||Opening balance||
|Project|Affiliated party|Remaining book||Remaining book||
||||Bad debt provision||Bad debt provision|
|||value||value||
|Other receivables|Shenyang Fangda|||6,942,771.58||
|Other receivables|Shenzhen Woke|867,442.94|25,974.09|1,784,860.56||

(2) Payable items
In RMB
China Fangda Group Co., Ltd. 2016 Annual Report
|||||
|-|-|-|-|
|Project|Affiliated party|Closing balance of book value|Opening balance of book value|
|Other payables|Shenyang Fangda|7,908.80|8,099,738.00|

 XIII. Contingent events
1. Major commitments
Major commitments that exist on the balance sheet day
The Company has no other commitments that should be disclosed by 31.12.16.
2. Contingencies
(1) Significant contingencies on the balance sheet date
(1) Contingent liabilities formed by material lawsuit or arbitration, and their influences on the financial position
In June 2015, Fangda Jianke filed a lawsuit against Wang Weihong, requiring an indemnity of RMB23 million and defreezing of the amount RMB23 million by the bank. By the report date, the lawsuit remain pending.
In 2013, Fangda Jianke filed a lawsuit to Shenyang MiddlePeople’s Court again Shenyang Lidu Commerce Co., Ltd., requiring construction payment and loss of RMB9,375,483.47 and the interest. The second trial remains pending on the report date.
(2) Pending major lawsuits
On January 2, 2003, Guangzhou Middle Court issued a civil case conciliation statement (2002)穗中法民三初字 No. 00596 to rule that the Guangzhou Yi An Square Real Estate Development Co., Ltd. to make the engineering payment of RMB5,621,329.63 to Fangda Jianke within 15 days of the effectiveness of the conciliation statement. By December 31, 2016, Fangda Jianke has recovered RMB1,950,000.00.
On December 23, 2015, Zhongshan GuzhenPeople’s Court judged according to中二法古民二初字第1040号 that Fangda SOZN make the payment of RMB10,331,348.20, interest and the lawsuit fee to Foshan Youfeng Trading Co., Ltd. within 15 days. By the report date, Fangda SOZN has not made the payment.
On 29.04.16, Zhongshan SecondPeople’s Court judged according to(2016)粤2072民初2165号 that Fangda SOZN make the payment of RMB9,627,359.16, interest and the lawsuit fee to Xiangneng Hualei Optoelectronic Co., Ltd. within 7 days. By the report date, Fangda SOZN has not made the payment.
On 10.05.16, Zhongshan SecondPeople’s Court judged according to(2016)粤2072民初3204号 that Fangda SOZN make the payment of RMB6,849,847.00, interest and the lawsuit fee to Huacan Optoelectronic (Suzhou) Co., Ltd. within 10 days. By the report date, Fangda SOZN has not made the payment.
(3) Contingent liabilities formed by providing of guarantee to othercompanies’ debts and their influences on financial situation
By December 31, 2016, the Group has provided loan guarantees for the following entities:
Name of guaranteed Guarantee Amount (in Start date End date Notes
China Fangda Group Co., Ltd. 2016 Annual Report entity RMB10,000)
The Company Guarantee 9,000.00 2016-12-12 2017-12-12
The Company Guarantee 10,000.00 2016-6-21 2017-3-8
Fangda Jianke Guarantee 1,000.00 2016-1-5 2017-1-5
Fangda Jianke Guarantee 7,000.00 2016-1-26 2017-1-26
Fangda Jianke Guarantee 10,000.00 2016-8-12 2017-8-11
Fangda Jianke Guarantee 10,000.00 2016-9-27 2017-9-27
Fangda Jianke Guarantee 10,000.00 2016-11-23 2017-11-23
Fangda Automatic Guarantee 1,000.00 2016-12-12 2017-12-12
Fangda Property Pledge 2,761.20 2015-2-12 2023-2-11
guarantee
Fangda Property Pledge 7,009.77 2015-4-23 2023-2-11
guarantee
Fangda Property Pledge 4,334.40 2015-6-8 2023-2-11
guarantee
Fangda Property Pledge 426.63 2015-8-11 2023-2-11
guarantee
Fangda Property Pledge 3,525.73 2015-9-11 2023-2-11
guarantee
Fangda Property Pledge 518.82 2015-9-23 2023-2-11
guarantee
Fangda Property Pledge 480.00 2015-10-14 2023-2-11
guarantee
Fangda Property Pledge 3,433.95 2015-11-6 2023-2-11
guarantee
Fangda Property Pledge 545.76 2015-11-20 2023-2-11
guarantee
Fangda Property Pledge 2,388.91 2015-12-9 2023-2-11
guarantee
Fangda Property Pledge 4,614.39 2015-12-28 2023-2-11
guarantee
Fangda Property Pledge 4,241.27 2016-1-26 2023-2-11
guarantee
Fangda Property Pledge 4,260.74 2016-1-29 2023-2-11
guarantee
Fangda Property Pledge 343.47 2016-3-28 2023-2-11
guarantee
Fangda Property Pledge 3,615.06 2016-4-27 2023-2-11
guarantee
Fangda Property Pledge 1,157.69 2016-5-20 2023-2-11
guarantee
China Fangda Group Co., Ltd. 2016 Annual Report Fangda Property Pledge 414.66 2016-5-30 2023-2-11
guarantee
Fangda Property Pledge 3,113.99 2016-6-13 2023-2-11
guarantee
Fangda Property Pledge 1,465.99 2016-6-24 2023-2-11
guarantee
Fangda Property Pledge 4,415.64 2016-7-26 2023-2-11
guarantee
Fangda Property Pledge 4,813.23 2016-8-15 2023-2-11
guarantee
Fangda Property Pledge 5,519.40 2016-9-7 2023-2-11
guarantee
Fangda Property Pledge 15,048.01 2016-10-8 2023-2-11
guarantee
Fangda Property Pledge 7,628.15 2016-11-7 2023-2-11
guarantee
Fangda Property Pledge 6,140.11 2016-11-30 2023-2-11
guarantee
Total 150,216.97
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
TheGroup’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, 2016, the Company has provided periodic guarantee of RMB1.183 billion.
On 31.12.16, 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
XIV. Post-balance-sheet events
1. Profit distribution
In RMB
|||
|-|-|
|Profit or dividend to be distributed|276,183,192.60|
|Profit or dividend approved to be distributed|276,183,192.60|

China Fangda Group Co., Ltd. 2016 Annual Report XV. Other material events
1. Suspension of operations
In RMB
||||||||
|-|-|-|-|-|-|-|
|||||||Suspended|
|||||||operation profit|
|||||Income tax|||
|Items|Income|Expense|Total profit||Net profit|attributable to the|
|||||expenses|||
|||||||owners of parent|
|||||||company|
|Suspension of|||||||
||50,388.69|34,513,024.96|-34,513,024.96|2,550.33|-34,465,186.60|-22,257,294.78|
|operations|||||||

Other note
(1) Shenyang Fangda and Shenzhen Woke have been suspended from operating since 2012 and is in the liquidation process. Fangda Aluminium has been suspended from operating since 2011 and is in the liquidation process. Ganzhou New Energy was liquidized in 2016.
(2) The net profit from suspended business in 2016 includes: the net profit of RMB-34,466,097.73 of Shenyang Fangda and its subsidiaries, RMB14,534.16 of Ganzhou New Energy and RMB-13,623.03 of Fangda Aluminium.
(3) The net profit from suspended business in 2015 includes: the net profit of RMB-7,502,520.05 of Shenyang Fangda and its subsidiaries, RMB-1,568,260.36 of Hong Kong Jiajun and RMB-108,654.19 of Fangda Aluminium.
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. TheGroup’s management regularly review the operating results of the reporting segments to determine resource distribution and evaluate their performance.
The reporting segments are:
(1) Curtain wall segment: production and sales of curtain wall materials, construction curtain wall design, production and installation; (2) Rail transport segment: assembly and processing of metro screen doors;
(3) Real estate segment: development and operating of real estate on land of which land use right is legally obtained by the Company; property management;
(4) New energy segment:R&D, installation and sales of PV devices, design and construction of PV power plants;R&D, design, production, sales and installation of light accessories, and other lights, LED products and hardware.
(5) Others
The segment report information is disclosed based on the accounting policies and measurement standards used by the segments when
China Fangda Group Co., Ltd. 2016 Annual Report reporting to the management. The policies and standards should be consistent with those used in preparing the financial statement. (2) Financial information
In RMB
|||||||||
|-|-|-|-|-|-|-|-|
|||||||Offset between||
|Items|Curtain wall|Rail transport|Real estate|New energy|Others||Total|
|||||||segments||
||2,042,947,811.||1,784,378,167.||||4,203,866,173.|
|Turnover||327,766,817.78||29,742,249.70|34,208,627.97|-15,177,501.46||
||82||91||||72|
|Including:||||||||
|external|2,036,752,585.||1,784,378,167.||||4,203,866,173.|
|||327,766,817.78||29,053,468.51|25,915,133.89|||
|transaction|63||91||||72|
|income||||||||
|Inter-segment||||||||
|transaction|6,195,226.19|||688,781.19|8,293,494.08|15,177,501.46||
|income||||||||
|Including:||||||||
||2,000,620,305.||1,784,378,167.||||4,125,885,820.|
|major business||325,313,858.26||21,383,803.63||-5,810,314.61||
||51||91||||70|
|turnover||||||||
||1,731,942,410.||||||2,595,170,483.|
|Operation cost||251,310,978.28|633,826,318.49|25,869,351.54|8,308,449.63|-56,087,025.56||
||97||||||35|
|Including:||||||||
||1,691,628,223.||||||2,535,301,290.|
|major business||250,837,190.64|633,826,318.49|15,021,172.92||-56,011,614.13||
||00||||||92|
|cost||||||||
||||||-396,897,357.7|||
|Operation cost|233,517,979.22|29,586,524.19|410,884,219.81|94,053,338.24||388,956,823.41|760,101,527.15|
||||||2|||
|Operating||||||-348,047,299.3||
||77,487,421.63|46,869,315.31|739,667,629.61|-90,180,440.08|422,797,536.06||848,594,163.22|
|profit/(loss)||||||1||
||3,002,126,065.||3,144,358,898.||2,436,425,727.|||
|Total assets||515,423,385.38||498,647,807.35||2,809,930,605.65|6,787,051,278.08|
||55||45||00|||
||2,059,052,084.||2,830,754,750.|||-1,643,762,707.|4,484,737,927.|
|Total liabilities||232,468,677.46||562,181,193.80|444,043,929.53|||
||13||19|||20|91|

China Fangda Group Co., Ltd. 2016 Annual Report (3) If the Company has not reported a segment or cannot disclose the total assets and liabilities of segments, the Company should explain reasons.
(4) Others
3. Major transactions and events with impacts oninvestors’ decisions
3. Acquisition of Fangda SOZN, repurchasing of shares and debt payment
(1) About the acquisition
Fangda New Energy entered into an investment agreement with Luo Huichi on July 18, 2014. According to the agreement, Fangda Energy and Shenzhen Jinma Yinke entered into a share transfer agreement on July 29, 2014. Luo Huichi makes contribution to a 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 TargetCompany’s assets, both parties entered into the stock transfer and capital increment agreement, under which the Company acquires60% stack in the Target Company by acquiring stocks and injecting capital.
Fangda New Energy made the share transfer payment of RMB12 million as agreed and provided interest-free loans of RMB30 million to Fangda SOZN. Fangda SOZN did not fulfill90% of the sales or net profit target in 2015.
(2) Share repurchasing and debt payment agreement
On 22.04.16, the Company, Fangda New Energy, Fangda SOZN, Shenzhen Jinma Yinke Electronics Co., Ltd., Luo Huichi and Jin Yaping (sponse of Luo Huichi) signed the Stock Repurchasing and Debt Pyament Agreement. According to the agreement, Shenzhen Jinma Yinke shall pay RMB12 million to repurchase the60% stake in Fangda SOZN heldby Fangda New Energy and all parties are released from all rights and obligations under the Investment Agreement. All parties agree, if Fangda SOZN repays the debt of RMB23 million within the agreed period, the Company and Fangda New Energy shall give up all remaining debt on Fangda SOZN. The agreement was approved at the 20th meeting of the 7th Board of Directors held on April 22, 2016 and comes into effect after being approved at the 2015 GeneralShareholders’ Meeting.
As Jinma Yingke failed to make the repurchase payment as agreed, Fangda New Energy filed proceedings to the Shenzhen Nanshan DistrictPeople’s Court and applied for property preservation of RMB2 million on August 30, 2016 to require Jinma Yingke to make the share transfer payment of RMB12 million and make the penalty. On November 21, 2016, Fangda New Energy and Jinma Yingke reached the dispute settlement agreement and agreed to make the share repurchasing payments of RMB2 million before December 5, 2016, March 30, 2017, and June 30, 2017 and make the share repurchasing payment of RMB6 million before December 30, 2017. By the report date, only RMB500,000 was received.
As Jinma Yingke failed to make the share repurchasing payments, the Company filed proceeding to Shenzhen Nanshan DistrictPeople’s Court on September 1, 2016 to require Luo Huichi and Jin Yaping to assume joint liability and make the principal payment of RMB15,158,586.39 and interest. The trial is pending on the report date.
Enforced liquidation of Shenyang Fangda
Shenyang Fangda has been stopped operation since 2012. On March 4, 2016, the Company applied to the Shenyang Hunnan DistrictPeople’s Court for enforced liquidation of Shenyang Fangda. The court accepted the plea on March 18, 2016 with the civil ruling paper（2016）辽0112民算00001号 and made the judgment（2016）辽0112民算00001号 on April 28, 2016 and specified Liaoning
China Fangda Group Co., Ltd. 2016 Annual Report Tongwen Law Firm as the liquidation team to liquidize Shenyang Fangda. On July 8, 2016, Shenyang Fangda's shareholders transferred the corporate stamp, assets and account book to the liquidation team.
Since the Company no longer has control on Shenyang Fangda and its subsidiary Shenzhen Woke and has no impact, the Company recognizes its shares as sellable financial assets. The Company recognizes June 30, 2016 as the date of losing control power. Based on the evaluation result of the Shen Peng Sheng Evaluation Report No.2017032 issued on June 30, 2016, the Company recognizes the fair value of the shares on the date of losing control power as RMB28,562,575.67. The sum of the fair value, excluding the difference of RMB18,747,371.29 between the share of net assets and total goodwill of Shenyang Fangda from the acquisition day, is included in the investment gain in the period of losing control power. In addition, other capital reserve change of RMB39,407,299.31 related to the equity investment in Shenyang Fangda is transferred to current gain and loss of the period of losing control power. XVI. Notes to Financial Statements of the Parent
1. Account receivable
(1) Account receivable disclosed by categories
In RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Closing balance|||||Opening balance|||||
||Remaining book|||||Remaining book|||||
||||Bad debt provision|||||Bad debt provision|||
|Type|value||||Book|value|||||
|||||||||||Book value|
|||Proportio||Provision|value||Proportio||Provision||
||Amount||Amount|||Amount||Amount|||
|||n||rate|||n||rate||
|Recognition and|||||||||||
||468,186.44||14,045.5||454,140.8|356,660|||||
|providing of bad debt||100.00%||3.00%|||100.00%|10,699.82|3.00%|345,960.74|
||||9||5|.56|||||
|provisions on groups|||||||||||
||468,186.44||14,045.5||454,140.85|356,660||||345,960.74|
|Total||100.00%||3.00%|||100.00%|10,699.82|3.00%||
||||9|||.56|||||

Account receivable with major individual amount and bad debt provision provided individually at the end of the period:
□ Applicable√ Inapplicable
In the group, the account receivable of which bad debt provision is made through the account aging method:
√ Applicable□ Inapplicable
In RMB
|||||
|-|-|-|-|
||Closing balance|||
|Age||||
||Account receivable|Bad debt provision|Provision rate|
|Sub-item of within 1 year||||
|Subtotal for less than 1 year|468,186.44|14,045.59|3.00%|
|Total|468,186.44|14,045.59|3.00%|

Group recognition basis:
China Fangda Group Co., Ltd. 2016 Annual Report 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 RMB3,345.77 was made in the period. RMB0.00 was recovered or reversed.
Including significant recovery or reversal:
In RMB
||||
|-|-|-|
|Entity|Written-back or recovered amount|Method|

(3) Balance of top 5 accounts receivable at the end of the period
The total balance of top-five accounts receivable at the end of the period is RMB416,704.07, accounting for89.00% of the total remaining balance of all accounts receivable. The bad debt provision made at the end of the period is RMB12,501.12.
2. Other receivables
(1) Other receivables disclosed by categories
In RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Closing balance|||||Opening balance|||||
||Remaining book|||||Remaining book|||||
||||Bad debt provision|||||Bad debt provision|||
|Type|value||||Book|value|||||
|||||||||||Book value|
|||Proportio||Provision|value||Proportio||Provision||
||Amount||Amount|||Amount||Amount|||
|||n||rate|||n||rate||
|Other receivables|||||||||||
|with major individual|||||||||||
||77,261,4||77,261,4|||57,108,||40,452,12||16,656,292.|
|amount and bad debt||14.40%||100.00%|||13.71%||70.83%||
||20.29||20.29|||420.31||7.75||56|
|provision provided|||||||||||
|individually|||||||||||
|Recognition and|||||||||||
||459,434,||79,545.2||459,354,9|359,478||543,116.2||358,935,05|
|providing of bad debt||85.60%||0.02%|||86.29%||0.15%||
||528.66||4||83.42|,173.41||1||7.20|
|provisions on groups|||||||||||
||536,695,||77,340,9||459,354,983.42|416,586||40,995,24||375,591,349.76|
|Total||100.00%||14.41%|||100.00%||9.84%||
||948.95||65.53|||,593.72||3.96|||

 Other receivables with major individual amount and bad debt provision provided individually at the end of the period:
√ Applicable□ Inapplicable
In RMB
|||
|-|-|
|Other receivables (by|Closing balance|

China Fangda Group Co., Ltd. 2016 Annual Report
||||||
|-|-|-|-|-|
|entity)|Other receivables|Bad debt provision|Provision rate|Reason|
|||||Cannot be recovered|
|Fangda SOZN|77,261,420.29|77,261,420.29|100.00%||
|||||because of insolvency|
|Total|77,261,420.29|77,261,420.29|--|--|

In the group, the other receivables of which bad debt provision are made through the account aging method:
√ Applicable□ Inapplicable
In RMB
|||||
|-|-|-|-|
||Closing balance|||
|Age||||
||Other receivables|Bad debt provision|Provision rate|
|Sub-item of within 1 year||||
|Subtotal for less than 1 year|965,288.77|28,958.66|3.00%|
|2-3 years|789.35|236.81|30.00%|
|Over 3 years|100,699.54|50,349.77|50.00%|
|Total|1,066,777.66|79,545.24|7.46%|

 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 RMB37,332,825.57 was made in the period. RMB0.00 was recovered or reversed.
(3) Other receivable written off in the current period
In RMB
|||
|-|-|
|Items|Amount|
|Other receivable written off|987,104.00|

 (4) Other receivables are disclosed by nature
In RMB
||||
|-|-|-|
|By nature|Closing balance of book value|Opening balance of book value|
|Associate accounts|535,629,171.29|415,397,754.23|
|Deposit||100,699.54|
|Other trades|1,066,777.66|1,088,139.95|
|Total|536,695,948.95|416,586,593.72|

China Fangda Group Co., Ltd. 2016 Annual Report (5) Balance of top 5 other receivables at the end of the period
In RMB
|||||||
|-|-|-|-|-|-|
||||||Balance of bad debt|
|Entity|By nature|Closing balance|Age|Percentage (%)|provision at the end|
||||||of the period|
|Shenzhen Fangda||||||
||Associate accounts|287,241,591.70|Less than 1 year|53.52%||
|New Energy Co., Ltd.||||||
|Shenzhen Fangda||||||
|Property||||||
||Associate accounts|133,298,822.09|Less than 1 year|24.84%||
|Development Co.,||||||
|Ltd.||||||
|Guangdong Fangda||||||
|SOZN Lighting Co.,|Associate accounts|20,152,999.98|Less than 1 year|3.76%|20,152,999.98|
|Ltd.||||||
|Guangdong Fangda||||||
|SOZN Lighting Co.,|Associate accounts|57,096,878.05|1-2 years|10.64%|57,096,878.05|
|Ltd.||||||
|Guangdong Fangda||||||
|SOZN Lighting Co.,|Associate accounts|11,542.26|2-3 years|0.00%|11,542.26|
|Ltd.||||||
|Shihui International||||||
||Associate accounts|9,323.39|Less than 1 year|0.00%||
|Holding Co., Ltd.||||||
|Shihui International||||||
||Associate accounts|30,430,197.80|1-2 years|5.67%||
|Holding Co., Ltd.||||||
|Shihui International||||||
||Associate accounts|20,271.90|2-3 years|0.00%||
|Holding Co., Ltd.||||||
|Shenzhen Kexunda||||||
||Associate accounts|4,866,985.88|Less than 1 year|0.91%||
|Software Co., Ltd.||||||
|Total|--|533,128,613.05|--|99.34%|77,261,420.29|

 3. Long-term share equity investment
In RMB
||||||||
|-|-|-|-|-|-|-|
||Closing balance|||Opening balance|||
|Items|Remaining book|Impairment||Remaining book|Impairment||
||||Book value|||Book value|
||value|provision||value|provision||
|Investment in|||||||
|||||1,013,991,568.20|56,780,600.00|957,210,968.20|
|subsidiaries|905,139,494.35|19,800,000.00|885,339,494.35||||
|Investment in|12,105,030.68||12,105,030.68|10,489,680.93||10,489,680.93|

China Fangda Group Co., Ltd. 2016 Annual Report
||||||||
|-|-|-|-|-|-|-|
|associates andjoint ventures|||||||
|Total|917,244,525.03|19,800,000.00|897,444,525.03|1,024,481,249.13|56,780,600.00|967,700,649.13|

 (1) Investment in subsidiaries
In RMB
||||||||
|-|-|-|-|-|-|-|
|||||||Balance of|
||||||Provision made in|impairment|
|Invested entity|Opening balance|Increase|Decrease|Closing balance|||
||||||this period|provision at the|
|||||||end of the period|
|Fangda Jianke|491,950,000.00|||491,950,000.00|||
|Fangda Aluminum|19,800,000.00|||19,800,000.00||19,800,000.00|
|Fangda Automatic|18,831,241.35|||18,831,241.35|||
|Fangda New|||||||
||74,496,600.00|||74,496,600.00|||
|Material|||||||
|Fangda Property|200,000,000.00|||200,000,000.00|||
|Shihui|||||||
|International|61,653.00|||61,653.00|||
|Holding Co., Ltd.|||||||
|Fangda New|||||||
||100,000,000.00|||100,000,000.00|||
|Energy|||||||
|Shenyang Fangda|108,852,073.85||108,852,073.85||43,308,898.18||
||1,013,991,568.20|||905,139,494.35||19,800,000.00|
|Total|||||43,308,898.18||

 (2) Investment in associates and joint ventures
In RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||Change (+,-)|||||||||Balance|
|||||Investment gainand lossrecognized usingathe equitymethod|||Cash||||of|
||||||Other|||||||
||||||||||||impairme|
||||Decrease||miscellan|||||||
|Invested|Opening|Increased||||Other|dividend|Impairme||Closing|nt|
||||d||eous|||||||
|entity|balance|investmen||||equity|or profit|nt|Others|balance|provision|
||||investmen||income|||||||
|||t||||change|announce|provision|||at the end|
||||t||djustmen|||||||
||||||||d||||of the|
||||||t|||||||
||||||||||||period|
|1. Joint venture||||||||||||
|2. Associate||||||||||||

China Fangda Group Co., Ltd. 2016 Annual Report
||||||
|-|-|-|-|-|
|Shenzhen|||||
|Ganshang|||||
|Joint|8,511,197|||8,600,939|
||||89,741.80||
|Investme|.98|||.78|
|nt Co.,|||||
|Ltd.|||||
|Shenzhen|||||
|Huihai|||||
|Yirong|1,978,482|3,000,000|-1,474,39|3,504,090|
|Internet|.95|.00|2.05|.90|
|Service|||||
|Co., Ltd.|||||
||10,489,68|3,000,000|-1,384,65|12,105,03|
|Subtotal|||||
||0.93|.00|0.25|0.68|
||10,489,680.93|-1,384,65|-1,384,65|12,105,030.68|
|Total|||||
|||0.25|0.25||

4. Operational revenue and costs
In RMB
||||||
|-|-|-|-|-|
||Amount occurred in the current period||Occurred in previous period||
|Items|||||
||Income|Cost|Income|Cost|
|Other businesses|34,208,627.97|8,308,449.63|29,977,446.65|3,788,422.31|
|Total|34,208,627.97|8,308,449.63|29,977,446.65|3,788,422.31|

 Others:
5. Investment income
In RMB
||||
|-|-|-|
|Items|Amount occurred in the current period|Occurred in previous period|
|Gains from long-term equity investment|||
||430,000,000.00||
|measured by costs|||
|Gains from long-term equity investment|||
||-1,384,650.25|-358,979.50|
|measured by equity|||
|Investment gain obtained from disposal of|||
|||10,600.00|
|long-term equity investment|||
|Others|5,424.66|55,961.64|
|Total|428,620,774.41|-292,417.86|

China Fangda Group Co., Ltd. 2016 Annual Report XVII. Supplementary Materials
1. Detailed accidental gain/loss
√ Applicable□ Inapplicable
In RMB
||||
|-|-|-|
|Items|Amount|Notes|
|Gain/loss of non-current assets|-3,080,469.74||
|Subsidies accounted into the current income|||
|account (except the government subsidy|||
|closely related to the enterprise’s business|7,571,963.67||
|and based on unified national standard|||
|quota)|||
|Gain from entrusted investment or assets|||
||1,401,717.08||
|management|||
|Gain/loss from debt reorganization|-2,445,254.63||
|Gain/loss from change of fair value of|||
|transactional financial asset and liabilities,|||
|and investment gains from disposal of|||
|transactional financial assets and liabilities|2,369,839.47||
|and sellable financial assets, other than valid|||
|period value instruments related to the|||
|Company’s common businesses|||
|Gain/loss from change of fair value of|||
|investment property measured at fair value|11,558,304.10||
|in follow-up measurement|||
|Other non-business income and expenditures|||
||5,857,845.48||
|other than the above|||
|Other gain/loss items satisfying the|||
||58,154,670.60||
|definition of non-recurring gain/loss account|||
|Less: Influenced amount of income tax|6,168,477.85||
|Influenced amount of minority|||
||339,234.87||
|shareholders’ equity|||
|Total|74,880,903.31|--|

Explanation statement should be made for accidental gain/loss items defined and accidental
gain/loss items defined as regular gain/loss items according to the Explanation Announcement of Information Disclosure No. 1 - Non-recurring gain/loss mentioned.
√ Applicable□ Inapplicable
||||
|-|-|-|
|Items|Amount|Reason|
|Others|58,154,670.60|The others are the gain of recalculation of|

China Fangda Group Co., Ltd. 2016 Annual Report
||
|-|
|the residual shares at their fair value after|
|the Company lost the control of its|
|subsidiary Shengyang Fangda in the report|
|period.|

2. Net income on asset ratio and earning per share
|||||
|-|-|-|-|
|||Earning 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||0.91|0.91|
||38.83%|||
|shareholders of the Company||||
|Net profit attributable to the||||
|common owners of the PLC after||||
||34.67%|0.810|0.810|
|deducting of non-recurring||||
|gains/losses||||

China Fangda Group Co., Ltd. 2016 Annual Report Chapter 12 Documents for Reference
1. The Annual Report 2016 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 theAuditors’ 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.