2016 Annual Report

Transcription

1 2016 Annual Report

2 CONTENTS Corporate Information Financial Summary/Financial Review Financial Highlights Breakdown of Major Properties Chairman s Statement Management Discussion and Analysis Directors and Senior Management Report of the Directors Consolidated Financial Statements Consolidated Statement of Financial Position Consolidated Statement of Income Consolidated Statement of Comprehensive Income Consolidated Statement of Changes in Equity Consolidated Statement of Cash Flows Notes to the Consolidated Financial Statements F-13 F-15 F-16 F-17 F-19 F-21 Corporate Governance Report 95 Independent Auditor s Report F-1

3 CORPORATE INFORMATION BOARD OF DIRECTORS Executive Directors Mr. Wang Zhenhua Mr. Lv Xiaoping Mr. Lu Zhongming Mr. Liu Yuanman Mr. Chan Wai Kin Non-executive Director Mr. Wang Xiaosong Independent Non-executive Directors Mr. Chen Huakang Mr. Zhu Zengjin Mr. Zhong Wei AUDIT COMMITTEE Mr. Chen Huakang (Chairman) Mr. Zhu Zengjin Mr. Zhong Wei REMUNERATION COMMITTEE Mr. Zhu Zengjin (Chairman) Mr. Zhong Wei Mr. Chan Wai Kin NOMINATION COMMITTEE Mr. Zhu Zengjin (Chairman) Mr. Lu Zhongming Mr. Zhong Wei JOINT COMPANY SECRETARIES Mr. Chan Wai Kin Ms. Mok Ming Wai COMPANY S WEBSITE 2 Future Land Development Holdings Limited

4 CORPORATE INFORMATION A AUTHORIZED REPRESENTATIVES Mr. Chan Wai Kin Future Holdings Tower A No. 6, Lane 388, Zhongjiang Road Shanghai PRC 1 36 Grand Pavilion Hibiscus Way 802 West Bay Road P.O. Box Grand Cayman KY Cayman Islands A 1 36 Ms. Mok Ming Wai 36/F, Tower Two Times Square 1 Matheson Street, Causeway Bay Hong Kong REGISTERED OFFICE Grand Pavilion Hibiscus Way 802 West Bay Road P.O. Box Grand Cayman KY Cayman Islands HEAD OFFICE Future Holdings Tower A No. 6, Lane 388, Zhongjiang Road Shanghai PRC PRINCIPAL PLACE OF BUSINESS IN HONG KONG 36/F, Tower Two Times Square 1 Matheson Street, Causeway Bay Hong Kong LEGAL ADVISERS As to Hong Kong law Shearman & Sterling Maples and Calder As to Cayman Islands law Maples and Calder Future Land Development Holdings Limited 3

5 CORPORATE INFORMATION Maples Fund Services (Cayman) Limited P.O. Box 1093, Boundary Hall Cricket Square Grand Cayman, KY Cayman Islands 1030 AUDITOR PricewaterhouseCoopers 22/F, Prince s Building Central Hong Kong HONG KONG SHARE REGISTRAR Computershare Hong Kong Investor Services Limited Shops th Floor, Hopewell Centre 183 Queen s Road East Wanchai Hong Kong PRINCIPAL SHARE REGISTRAR AND TRANSFER OFFICE Maples Fund Services (Cayman) Limited P.O. Box 1093, Boundary Hall Cricket Square Grand Cayman, KY Cayman Islands LISTING INFORMATION Hong Kong Stock Code: Future Land Development Holdings Limited

6 FINANCIAL SUMMARY/FINANCIAL REVIEW For the year ended 31 December RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RESULTS Revenue 28,232,094 23,835,889 20,718,670 20,771,255 17,517,266 Profit before income tax 4,135,368 3,363,954 2,921,848 3,236,466 2,818,161 Income tax expense (1,668,208) (1,507,717) (1,242,561) (1,519,329) (1,232,777) Profit for the year 2,467,160 1,856,237 1,679,287 1,717,137 1,585,384 Attributable to: Equity holders of the Company 1,383,953 1,030,890 1,025, , ,819 Non-controlling interests 1,083, , , , ,565 2,467,160 1,856,237 1,679,287 1,717,137 1,585,384 Earnings per share for profit attributable to equity holders of the Company Basic and diluted RMB0.24 RMB0.18 RMB0.18 RMB0.17 RMB0.21 ASSETS AND LIABILITIES Total assets 104,879,456 70,818,893 53,641,721 47,198,210 40,843,543 Total liabilities (89,704,051) (57,355,545) (41,290,699) (36,600,251) (32,448,516) 15,175,405 13,463,348 12,351,022 10,597,959 8,395,027 Capital and reserves attributable to equity holders of the Company: Share capital: nominal value 4,609 4,609 4,617 4,617 4,617 Reserves 9,230,441 8,165,760 7,639,363 6,717,031 5,746,486 9,235,050 8,170,369 7,643,980 6,721,648 5,751,103 Non-controlling interests 5,940,355 5,292,979 4,707,042 3,876,311 2,643,924 15,175,405 13,463,348 12,351,022 10,597,959 8,395,027 Future Land Development Holdings Limited 5

7 FINANCIAL HIGHLIGHTS COMPARISON OF KEY FINANCIAL INDICATORS FROM 2012 TO 2016 The following charts compare the financial indicators of our performance from 2012 to 2016: Revenue (RMB million) Core Earnings (1) (RMB million) 30,000 28,232 2,500 25,000 20,000 15,000 10,000 5,000 17,517 17,342 20,771 20,422 20,719 20,216 23,836 22,973 27,050 2,000 1,500 1, , Sales of properties Others Attributable to equity holders Non-controlling interests Net-Debt-to-Equity Ratio (2) (%) 100 Historical Contracted Sales (3)(4) (RMB million) 80,000 70, % 52.8% 52.6% 83.3% 88.7% 60,000 50,000 40,000 30,000 20,000 10,000 16,135 20,624 24,510 (3) 31,929 (4) 65,050 (5) (1) (2) 100% (3) 100% 1,394 (4) 100% 2,643 (5) 100% 17,085 Notes (1) Core earnings equal to net profit less after-tax fair value gains or losses and disposal gains or losses (whether directly or through equity transfer) on investment properties including those recorded in other gains and in share of results of associates or joint ventures, and exclude unrealized foreign exchange gains or losses relating to borrowings and after-tax gain on disposal of certain subsidiaries engaging in residential property management business. (2) Total borrowings less cash, cash equivalents and restricted cash divided by total equity and multiplied by 100%. (3) Contracted sales include contracted sales of RMB1,394 million for joint ventures and associates projects on a 100% basis. (4) Contracted sales include contracted sale of RMB2,643 million for joint ventures and associates projects on a 100% basis. (5) Contracted sales include contracted sale of RMB17,085 million for joint ventures and associates' projects on a 100% basis. 6 Future Land Development Holdings Limited

8 BREAKDOWN OF MAJOR PROPERTIES Projects Property Type Property Status GFA Under Development * GFA Available for Sale, Lease or Use by the Group GFA Under Planning (sq.m.) (sq.m.) (sq.m.) Group s Interests in the Projects * Nanjing 66, % Nanjing Hubei Road Project Residential Under development 139, % Nanjing Future France Residential Completed 106, % Nanjing Longwan Garden Residential Completed 306,334 40, % Nanjing Xianlin Lake Land Parcel Residential Under development 389, % Nanjing Flourish France Residential Under development 166, % Nanjing Puyue Zhongshan Residential Under development 236, % Nanjing Future Land Poly Tiandi Residential Under development 121, % Nanjing Puyue Heshan Residential Under development 2016G59 243, % Land Parcel No. 2016G59 located in Kirin Science and Technology Innovation Park at the north of Qidi Avenue, Jiangning District, Nanjing 2016G60 Land Parcel No. 2016G60 in Qinglong Sub-district, Ditie Xiaozhen, Jiangning District, Nanjing Residential Held for future development 235, % Residential Held for future development 1,287, , ,674 Nanjing sub-total Future Land Development Holdings Limited 7

9 BREAKDOWN OF MAJOR PROPERTIES Projects Property Type Property Status GFA Under Development * GFA Available for Sale, Lease or Use by the Group GFA Under Planning (sq.m.) (sq.m.) (sq.m.) Group s Interests in the Projects * Hefei CF Land Parcel No. CF located to the west of Fuyang North Road at Shuangfeng Development Zone, Changfeng County, Hefei E1612 Land Parcel No. E1612 located to the north of Xinanjiang Road, Yaohai District, Hefei 182, % Residential Held for future development 76, % Residential Held for future development 258,698 Hefei sub-total Changzhou 129, % Changzhou Future Land Residential Completed Future Legend 46, % Changzhou Future Land Success Residential Completed 104, % Changzhou Future Land Residential Completed Future Consequence 132, % Changzhou Future Land Residential Completed Future France 45, % Changzhou YOHO City Residential Completed 34,125 49, % Changzhou Future Land Golden County Residential Under development 81, , % Future Land Emporium Residential Under development 8 Future Land Development Holdings Limited

10 BREAKDOWN OF MAJOR PROPERTIES Projects Property Type Property Status GFA Under Development * GFA Available for Sale, Lease or Use by the Group GFA Under Planning (sq.m.) (sq.m.) (sq.m.) Group s Interests in the Projects * 95, , % Phase IV of Changzhou Legend Mansion Residential Under development 315, % Eastern Area of Changzhou Future Land Long Island Residential Held for future development 45, % Remaining Area of Changzhou Golden Future Land Residential Held for future development 99, , % Changzhou Future Land Town Residential Under development 31, % Changzhou Jintan Wanjian City Residential Held for future development 94, % Changzhou In Spring Live Residential Completed 271, % Land Parcel at south of Renmin Road, Changzhou Residential Held for future development 465, % Land Parcel at Gufang Road, Changzhou Residential Held for future development 168, % Changzhou Injoy International Plaza Residential Completed 47, , % Changzhou Wujin Injoy Plaza Residential Under development 19, % Changzhou Life Plaza Residential Completed 33, % Changzhou Future Royal Bay Residential Completed 94, % Land Parcel located to the west of Tianmu West Road, Xinbei District, Changzhou Residential Held for future development 211,074 1,589,152 1,508,294 Changzhou sub-total Future Land Development Holdings Limited 9

11 BREAKDOWN OF MAJOR PROPERTIES Projects Property Type Property Status GFA Under Development * GFA Available for Sale, Lease or Use by the Group GFA Under Planning (sq.m.) (sq.m.) (sq.m.) Group s Interests in the Projects * Wuxi 76, % Wuxi Future Land Future France Residential Completed 103, % Wuxi Future Land Up Town Residential Completed 83, % Wuxi Jinjun Yuan Residential Under development 83, % Wuxi Xihu Home Decor Center Complexes Completed 83, ,342 Wuxi sub-total Suzhou 76, % Suzhou Future Land Fragrant Legend Residential Completed 57, % Suzhou Legend Mansion Residential Completed 18,008 89, % Suzhou Future Land Mangrove Bay Residential Under development 90,500 53, % Kunshan Future Land Future France Residential Under development 65,040 19, % Kunshan Future Land Beautiful Harbour Residential Under development 198,219 28, % Suzhou Future Land Future County Residential Under development 248, % Kunshan Future County Residential Under development 230, % Changshu Yuyue Garden Residential Under development 10 Future Land Development Holdings Limited

12 BREAKDOWN OF MAJOR PROPERTIES Projects Property Type Property Status GFA Under Development * GFA Available for Sale, Lease or Use by the Group GFA Under Planning (sq.m.) (sq.m.) (sq.m.) Group s Interests in the Projects * 134, % Changshu Fragrant View Residential Under development 219, % Suzhou Wanshangfenghua Residential Under development 198, , % Suzhou Xiangxiyuan Residential Under development 94, % Suzhou Honghai Plaza Residential Under development 40, % Land Parcel at north of Xingzhong Road, Wujiang Economy and Technology Development Zone Land Parcel at south-western side of the intersection of Jiangling East Road and Songshan River in Wujiang Economy and Technology Development Zone Land Parcel at north-western side of the intersection of Jishi West Road and Songshan River in Wujiang Economy and Technology Development Zone Residential Held for future development 223, % Residential Held for future development 222, % Residential Held for future development 274, , % Suzhou Yangchenghu Project Residential Under development 2014 B40 A D 711, % Land Parcel Zhangdi No B40-A-D, Yangshe Town, Zhangjiagang Residential Held for future development Future Land Development Holdings Limited 11

13 BREAKDOWN OF MAJOR PROPERTIES Projects Property Type Property Status GFA Under Development * GFA Available for Sale, Lease or Use by the Group GFA Under Planning (sq.m.) (sq.m.) (sq.m.) Group s Interests in the Projects * 197,925 57, % Changshu Gongwang Garden Residential Under development 2016 WG 62 1,757, % Land Parcel Sudi No WG-62 located at the south of Nantiancheng Road and west of Chengyang Road, HSR New Town, Xiangcheng District, Suzhou Residential Held for future development 24, , % Zhangjiagang Injoy Plaza Complexes Under development 240, % Suzhou Kaituo Project Complexes Completed 33,453 77, % Suzhou Bosheng Project Complexes Under development 1,854,863 3,621, ,762 Suzhou sub-total Shanghai 64, % Shanghai Future Land YOHO City Residential Completed A 87, % Shanghai Future Land Residential Completed Golden County A 172, % Shanghai Future Land Residential Completed Gorgeous Mansion 59, % Shanghai Future Land Petrus Hacienda Residential Completed 12 Future Land Development Holdings Limited

14 BREAKDOWN OF MAJOR PROPERTIES Projects Property Type Property Status GFA Under Development * GFA Available for Sale, Lease or Use by the Group GFA Under Planning (sq.m.) (sq.m.) (sq.m.) Group s Interests in the Projects * 34, % Shanghai Future Land Garden House Residential Completed 30, % Shanghai Future Land Fragrant Residential Completed Legend 43, % Shanghai Future Land Fragrant View Residential Completed 23,390 18, % Shanghai Future Land Fragrant Jade Residential Under development 8, % Shanghai Future Land Residential Completed Bright Green Land 16, % Shanghai Future Royal Fame Residential Completed 36, % Shanghai Fragrant Metropolitan Residential Completed 9, % Shanghai Songjiang Bright Mansion Residential Completed 96, % Shanghai Future Flower Bay Residential Under development , , % 08 06& Land Parcels 06-01, 07-01, 08-06&08-08, Residential Under development in Dongjing, Songjiang District, Shanghai 67, % Land Parcel at Chengzhong South Road, Shanghai Residential Held for future development 50, % Shanghai Shengyu Yayuan Residential Under development 79, % Shanghai Future Land Glorious Century Residential Under development 7 180, % No. 7 Land Parcel Zhoupu Town, Pudong New District, Shanghai Residential Held for future development Future Land Development Holdings Limited 13

15 BREAKDOWN OF MAJOR PROPERTIES Projects Property Type Property Status GFA Under Development * GFA Available for Sale, Lease or Use by the Group GFA Under Planning (sq.m.) (sq.m.) (sq.m.) Group s Interests in the Projects * 82, % Land Parcel No of Liangchengxincun Street, Residential Held for future development Hongkou District, Shanghai 50, % Shanghai Wan Zhi Cheng Residential Completed 18, % Shanghai Elite Mansion Residential Completed , % Land Parcel 40-05, Yongfeng Street, Shanghai (Longhu Splendid Mansion) Land Parcels 06-08, 07-05, 08-01, in Dongjing, Songjiang District, Shanghai (Future Land Shangkun Yueshan) Residential Under development 254, % Residential Under development Shanghai sub total 396, , ,643 Nantong 218, ,015 17, % Nantong Future France Residential Under development Nantong sub total 218, ,015 17,795 Hangzhou 44, % Hangzhou Whispering Hills Residential Completed 24, % Hangzhou Leisure Land Residential Completed 14 Future Land Development Holdings Limited

16 BREAKDOWN OF MAJOR PROPERTIES Projects Property Type Property Status GFA Under Development * GFA Available for Sale, Lease or Use by the Group GFA Under Planning (sq.m.) (sq.m.) (sq.m.) Group s Interests in the Projects * 14, % Hangzhou Majestic Mansion Residential Completed 78, % Hangzhou Scarce Mansion Residential Under development 177, % Xiaoshan Future Consequence Residential Under development 187, % Xiaoshan Aofu Residential Under development 187,851 77, % Xiaoshan Future Legend Mansion Residential Under development (2015)54 103,157 51, % Land Parcel Yuzheng Chuchu No. (2015)54 in Hangzhou Residential Under development 255, % Hangzhou Hongjun Residential Under development 127, % Hangzhou Wanshangfenghua Residential Under development (2016)8 70, % Land Parcel Xiaozheng Chuchu No. (2016) 8 in Xiaoshan District, Hangzhou Residential Under development Hangzhou sub total 1,188,309 77, ,983 Jiaxing Land Parcel located at the north of Shiji Avenue of Luoxing Street, Jiashan County, Jiaxing City 189, % Residential Held for future development 458, % Tongxiang Injoy Plaza Complexes Under development Future Land Development Holdings Limited 15

17 BREAKDOWN OF MAJOR PROPERTIES Projects Property Type Property Status GFA Under Development * GFA Available for Sale, Lease or Use by the Group GFA Under Planning (sq.m.) (sq.m.) (sq.m.) Group s Interests in the Projects * 1# 172, % Pinghu Commercial Land Parcel No.1 Complexes Held for future development 2# 252, % Pinghu Residential Land Parcel No.2 Complexes Held for future development 458, ,957 Jiaxing sub-total Wuhan 322, , % Wuhan Delight City Residential Under development 142, % Wuhan Prosperous International Residential Under development 30, % Wuhan In Spring Live Residential Completed A P(2016) , % A-type Land Parcel No. P(2016)024 in Jianhe Village, Hongshan District, Wuhan Residential Held for future development 464, ,177 30,210 Wuhan sub-total Qingdao 220, % Phase II of Future France, Qingdao Residential Under development 64, % Phase I of Future France, Qingdao Residential Under development 23 1,367, % Land Parcel No. 23 in Jiaozhou City, Qingdao Residential Held for future development 16 Future Land Development Holdings Limited

18 BREAKDOWN OF MAJOR PROPERTIES Projects Property Type Property Status GFA Under Development * GFA Available for Sale, Lease or Use by the Group GFA Under Planning (sq.m.) (sq.m.) (sq.m.) Group s Interests in the Projects * 1,648, % Project Wool Beach in Hongdao Economic Zone, Qingdao Residential Held for future development C 1 171,103 27, % Phase II of Excellent Queen s Road (Qingdao Licang Land Parcel C-1) Residential Under development I 201,114 48, % Phase I of Excellent Queen s Road (Qingdao Licang Land Parcel I) Residential Under development 657,243 3,016,598 76,152 Qingdao sub-total Jinan 307, % Jinan Future France Residential Under development 363, % Jinan Fragrant Legend Residential Under development B , % Jinan Land Parcel B2-2 Residential Held for future development 671, ,535 Jinan sub-total Changsha 163, , , % Changsha Future Land International Metropolis Residential Under development 163, , ,769 Changsha sub-total Future Land Development Holdings Limited 17

19 BREAKDOWN OF MAJOR PROPERTIES Projects Property Type Property Status GFA Under Development * GFA Available for Sale, Lease or Use by the Group GFA Under Planning (sq.m.) (sq.m.) (sq.m.) Group s Interests in the Projects * Tianjin Land Parcel No ,33 and 34 of Units of Baodixincheng, Tianjin 723, % Residential Held for future development 503, % Tianjin Injoy Plaza Complexes Under development 1,227,147 Tianjin sub-total Foshan 576, % Land Parcel in Huachong Village, Shishan Town, Nanhai District, Foshan City Residential Held for future development 576,020 Foshan sub-total Quanzhou 319, % Jinjiang Injoy Plaza Complexes Under development 319,610 Quanzhou sub-total 18 Future Land Development Holdings Limited

20 BREAKDOWN OF MAJOR PROPERTIES Projects Property Type Property Status GFA Under Development * GFA Available for Sale, Lease or Use by the Group GFA Under Planning (sq.m.) (sq.m.) (sq.m.) Group s Interests in the Projects * Jinhua 277, , % Yiwu Injoy Plaza Complexes Under development 277, ,337 Jinhua sub-total Ningbo A 181,042 94, % Ningbo Wanbo A Land Parcel Complexes Under development B 165, % Ningbo Wanbo B Land Parcel Complexes Under development 280, % Ningbo Kaituo Project Complexes Under development 627,011 94,917 Ningbo sub-total Nanchang 66, % Phase I of Nanchang Complexes Under development 128, , % Phase II of Nanchang Complexes Under development 128, ,581 Nanchang sub-total Future Land Development Holdings Limited 19

21 BREAKDOWN OF MAJOR PROPERTIES Projects Property Type Property Status GFA Under Development * GFA Available for Sale, Lease or Use by the Group GFA Under Planning (sq.m.) (sq.m.) (sq.m.) Group s Interests in the Projects * Anqing 108, , % Phase I of Anqing Complexes Under development 285,449 83, % Phase II of Anqing Complexes Under development 393,596 83, ,720 Anqing sub-total Chengdu 609,289 79, % Chengdu Injoy Plaza Complexes Under development 609,289 79,767 Chengdu sub-total Zhenjiang 86, % Dantu Future Land Exalted Uptown Complexes Under development 220, , % Danyang Injoy Plaza Complexes Partially completed 20 Future Land Development Holdings Limited

22 BREAKDOWN OF MAJOR PROPERTIES Projects Property Type Property Status GFA Under Development * GFA Available for Sale, Lease or Use by the Group GFA Under Planning (sq.m.) (sq.m.) (sq.m.) Group s Interests in the Projects * 162, % Land Parcel in Baohua Village, Baohua Town, Jurong Residential Held for future development 458,551 59, % Zhenjiang Injoy Plaza Complexes Under development 678, , ,053 Zhenjiang sub-total Haikou 227, % Phase I of Haikou Complexes Under development 143, % Phase II of Haikou Complexes Under development 143, ,976 Haikou sub-total Jintan 9, , % Jintan Injoy Plaza Complexes Under development 9, ,229 Jintan sub-total Future Land Development Holdings Limited 21

23 BREAKDOWN OF MAJOR PROPERTIES Projects Property Type Property Status GFA Under Development * GFA Available for Sale, Lease or Use by the Group GFA Under Planning (sq.m.) (sq.m.) (sq.m.) Group s Interests in the Projects * Quzhou 349, % Quzhou Injoy Plaza Complexes Under development 349,407 Quzhou sub-total Shaoxing 279,082 62, % Shengzhou Residential Land Parcel Complexes Under development 283, % Shengzhou Commercial Land Parcel Complexes Under development 64, , % Shengzhou West Residential Land Parcel Complexes Under development 627, ,371 62,346 Shaoxing sub-total Taizhou C 420, % Taizhou Land Parcel C Complexes Under development B 60, % Taizhou Land Parcel B Complexes Under development A 64, % Taizhou Land Parcel A Complexes Under development 544,419 Taizhou sub-total 22 Future Land Development Holdings Limited

24 BREAKDOWN OF MAJOR PROPERTIES Projects Property Type Property Status GFA Under Development * GFA Available for Sale, Lease or Use by the Group GFA Under Planning (sq.m.) (sq.m.) (sq.m.) Group s Interests in the Projects * Changchun 340,840 79, % Changchun Injoy Plaza Complexes Under development 340,840 79,461 Changchun sub-total Yangzhou 20, , % Yangzhou Injoy Plaza Complexes Under development 20, ,165 Yangzhou sub-total Wenzhou 201, % Ruian Injoy Plaza Complexes Under development 201,804 Wenzhou sub-total Kunming 1 228, % Kunming Land Parcel No.1 Complexes Held for future development 2 121, % Kunming Land Parcel No.2 Complexes Held for future development Future Land Development Holdings Limited 23

25 BREAKDOWN OF MAJOR PROPERTIES Projects Property Type Property Status GFA Under Development * GFA Available for Sale, Lease or Use by the Group GFA Under Planning (sq.m.) (sq.m.) (sq.m.) Group s Interests in the Projects * 3 139, % Kunming Land Parcel No.3 Complexes Held for future development 490,062 Kunming sub-total Linyi 342, % Linyi Injoy Plaza Complexes Held for future development 342,967 Linyi sub-total Taizhou 516, % Taixing Injoy Plaza Complexes Held for future development 144, % Rugao Injoy Plaza Complexes Under development 144, ,755 Taizhou sub-total Total 13,073,614 16,386,957 5,854,758 Attributable to the Group 9,411,173 3,646,474 19,892,374 * * The impact on owners equity of the implementation of the equity incentive scheme of GFA represents gross floor area and sq.m. represents square metres. Future Land Holdings was not taken into account. 24 Future Land Development Holdings Limited

26 CHAIRMAN S STATEMENT % 40% , , % On behalf of Future Land Development Holdings Limited (the Company ) and its subsidiaries (collectively referred to as the Group ), I am pleased to present to the shareholders of the Company (the Shareholders ) the audited annual results of the Group for the year ended 31 December REVIEW FOR THE YEAR OF 2016 In 2016, the Group firmly upheld its established strategies and achieved milestones in numerous aspects. As to its real estate business (being its core business), the Group achieved contracted sales of RMB65.06 billion, representing a year-on-year increase of 103.8%, significantly ahead of the industry s average growth rate of 40%. According to the Real Estate Sales of Tens-billion Enterprises Ranking for 2016 published by an independent third party, the Group ranks at No.15 by virtue of its remarkable results, further consolidating the Group s leading position in China s real estate sector. During the year, the Group constantly set new records for single-month contracted sales with an average selling price for contracted sales of more than RMB12,000 per sq.m., laying a solid foundation for revenues and profit to be recognised in the coming year. Meanwhile, the Group continued its regional expansion strategy and strategically acquired land resources, including 40 prime land parcels obtained during the year with its land reserve increased by approximately 14,240,000 sq.m. in gross floor area ( GFA ), further augmenting the Group s existing market share and deepening its global strategic expansion. As to commercial operation, 5 new Injoy Plazas were opened during the year, each of which received over 300,000 visits on their opening day, adding up to a total of 11 Injoy Plazas with an occupancy rate of 98.96%. Future Land Development Holdings Limited 25

27 CHAIRMAN S STATEMENT Reits IMAX China Holding Inc. IMAX China IMAX Corporation IMAX % % 12, % While continuously developing its core business of real estate, the Group also actively explored on four aspects, namely Asset-light, Finance, Diversification and Investment during the year. Regarding the asset-light operation model, the Group set up an asset securitization scheme for Qingpu Injoy Plaza project, which created a new Reits investment model for commercial complex in China and achieved a breakthrough in securitization of the Group s commercial assets. In the meantime, the Group started to launch management services for its commercial management business and successfully contracted for the overall operation and management of Zhuji Injoy Plaza and Qingdao Injoy Plaza. As to financial services, Future Land Holdings Co., Ltd.* () ( Future Land Holdings, a subsidiary of the Company), as a promoter in partnership with six large enterprises, established Guofeng Life Insurance Co., Ltd* () with a view to optimizing the capital structure through strategic expansion into insurance business and bringing long-term investment income to the Group. As to business diversification, Shanghai Xingyi Cinema Management Co., Ltd.* ( ) ( Shanghai Xingyi ), a subsidiary of the Group, cooperated with IMAX China Holding Inc. ( IMAX China ) and its parent company IMAX Corporation to establish 10 IMAX cinemas, with a view to enhancing the competitiveness of our Injoy Plaza brand and generate new revenue streams for the Group. As to investment, the Group continuously explored new opportunities and set up a joint venture named Jiangsu Minying Investment Holdings Co., Ltd* ( ) in collaboration with ten large enterprises, including Jiangsu Shagang Group Co; Ltd* () ( Jiangsu Shagang Group ), CGL Capital Management Limited* ( ) ( CGL Capital ) and Hongdou Group Co., Ltd* ( ) ( Hongdou Group ) in respect of joint development of four major business platforms, namely financial holding, industry consolidation, asset management and international cooperation. CONTRACTED SALES During the year, the Group launched competitive projects at times appropriate to the market, and achieved contracted sales for the year of RMB65.06 billion, representing a year-on-year increase of approximately 103.8%, setting a record in the Company s history and exceeding the annual sales target of RMB52.0 billion by 125%. The average selling price for contracted sales for the year reached RMB12,090 per sq.m., a 22% increase over that for the year of The increased sales and average selling price laid a solid foundation for future achievement of revenue and the steady increase in profit of the Group. 26 Future Land Development Holdings Limited

28 CHAIRMAN S STATEMENT 1+3 LAND BANK During the year, by adhering to the 1+3 expansion strategies of Focusing on Shanghai and Yangtze River Delta while Expanding into Pearl River Delta, Bohai Rim and Central and Western China, the Group actively expanded into other markets with high growth potential across the country while developing further into existing cities. In addition to consolidating its market shares in the first-tier and second-tier cities, such as Shanghai, Suzhou, Nanjing and Hangzhou, the Group further expanded its business geographic coverage by expanding into key cities in Bohai Rim (namely Tianjin) and Pearl River Delta (namely Foshan), which enabled the Group to further extend its strategic coverage and to leverage on its advantage in scale. 40 1, , The Group, through seizing opportunities in the land market, obtained 40 new land parcels during the year, which added to the land reserve by an additional GFA of approximately 14,240,000 sq.m. As at 31 December 2016, the Group had a land bank of a total GFA of 35,320,000 sq.m., which was enough to support its development in the next 3 to 4 years , % 1, % During the year, the Group strengthened its cooperation with outstanding fellow developers including Vanke, Country Garden, China Merchants Property, Poly Real Estate and Jinmao Holdings, to generate greater synergies. With an open attitude, the Group wishes to proactively boost external cooperation and mutual improvement, while effectively reducing investment and operational risks. FINANCIAL PERFORMANCE In 2016, the Group recorded operation revenue of RMB28,232.1 million, representing an increase of approximately 18.4% as compared with Core earnings attributable to the Shareholders was RMB1,156.0 million, representing an increase of 59.71% as compared with Future Land Development Holdings Limited 27

29 CHAIRMAN S STATEMENT B+ BB The Group has maintained a stable and prudent approach to financial management, dedicated to optimization of debt structure, improvement of capital-utilization efficiency and reduction of financing costs over the years. Fitch, an international rating agency, upgraded its ratings for the Group and its debts from B+ to BB- in March 2016, and upgraded the Group s prospect from stable to positive in October 2016, as a recognition of the Group s ability in high-efficiency sales, multiple financing sources and strong liquidity A % During the year, the Group continued to secure low cost financing support. In January, the Group obtained a total of RMB15.0 billion new bank credit lines from two domestic banks. By the end of June, Future Land Holdings, a subsidiary of the Group, set up an industry fund in cooperation with Ping An Bank Co., Ltd., which provided the intentional investment quota of an aggregate amount of RMB10.0 billion to be used in real estate projects. On 1 July, China Securities Regulatory Commission considered and approved the application made by Future Land Holdings in relation to the non-public issuance of up to RMB3.8 billion of A shares. In March, August, September and October, the Group successfully issued domestic corporate bonds of RMB8 billion in total, with a low weighted average cost of 4.74% % % Benefiting from these abundant financial support, the Group was able to further optimize its debt structure and reduce its overall financing costs. As at 31 December 2016, available financial resources amounted at RMB59.8 billion, the weighted average financing cost of the Group was 5.7%, representing a decrease of 1.5 percentage points as compared with COMMERCIAL OPERATION During the year, while steadily developing residential projects, the Group also accelerated in its commercial operation. In 2016, the Group opened 5 new commercial plazas under its Injoy series at Haikou, Nanchang, Jintan, Chengdu and Anqing, each of which received over 300,000 visits on their opening day. By the end of the year, the Group had opened a total of 11 Injoy Plazas, with an occupancy rate of 98.96% for the year, demonstrating the Group s unique vision in business layout. 28 Future Land Development Holdings Limited

30 CHAIRMAN S STATEMENT Meanwhile, the Group had started to promote its asset-light operation model, in order to create more possibilities for asset management. In June 2016, the Group transferred Shanghai Qingpu Injoy Plaza to Shanghai Orient Securities Asset Management Company Limited* ( ) and initiated and incorporated Orient Asset- Qingpu Injoy Plaza Asset Securitization Scheme, which had generated cash flow for the Group, shortened the investment payback period of commercial property, optimized asset structure and improved our capital-utilization efficiency IMAX China IMAX Corporation IMAX 2017 The Group s strong commercial resources and professional operation capabilities continuously gained popularity among quality enterprises. In September and November 2016, the Group provided commercial management services for the landlords of Zhejiang Yongli Central City ( ) and Qingdao Dream Time Square ( ), completed repositioning and explored business opportunities for both of them and ultimately transformed them into Zhuji Yongli Injoy Plaza and Qingdao Injoy Plaza, respectively. Provision of commercial management services will further assist the Group in expanding its business in the commercial complexes in China, gaining management revenue and enhancing brand image, which will be beneficial to the Group s longterm development. DIVERSIFICATION AND INVESTMENT The Group had fully capitalized on the booming business opportunities brought about by the rapid development of the cinema market in China and proactively expanded into the cinema industry to enhance the comprehensive business competitiveness of its Injoy brand. In May 2016, Shanghai Xingyi, a subsidiary of the Group, cooperated with IMAX China and its parent company IMAX Corporation in establishing 10 IMAX cinemas, all of which will be located in the Injoy Plazas in different regions across China and targeted to be opened by the end of 2017, generating new revenue streams for the Group In view of the huge potential of the insurance industry in China, as well as the opportunities for expanding financing channels and diversifying business development to be brought about by the insurance industry, in June 2016, the Group, through its subsidiary Future Land Holdings, established Guofeng Life Insurance Co., Ltd. together with six other large enterprises with a total capital contribution of RMB1.5 billion. The Group believes that its expansion into the financial services sector will keep it in pace with the financialization trend of the industry, create new momentum for the Group and achieve long-term investment income. Future Land Development Holdings Limited 29

31 CHAIRMAN S STATEMENT 2017 As for investment, during the year, the Group had set up a joint venture named Jiangsu Minying Investment Holdings Co., Ltd in collaboration with ten large enterprises, including Jiangsu Shagang Group, CGL Capital and Hongdou Group in respect of joint development of four major business platforms, namely financial holding, industry consolidation, asset management and international cooperation. PROSPECTS In 2017, the overall demand for the real estate market is expected to remain stable, but with faster expansion of leading real estate enterprises and increasing industry concentration, competition will become more intense. Our ability to maintain a healthy growth, build up our own advantages, consolidate our regional expansions and develop new business models in the new historical era will directly determine whether we could secure a place in the increasingly diverged market Based on the above judgments and development planning, the Group will timely identify changes in market demands, and create upgraded products tailored to the needs of our target customers. Meanwhile, the Group will hold on to its 1+3 regional expansion strategy, develop further in the existing cities, enhance the city-level companies ability to expand land bank. Financially, the Group will adhere to a stringent and prudent financial policy, further optimize the capital structure, take full advantage of the diversified financing channels to reduce financing costs and enhance the risk resistance ability of the Group. The Group will speed up turnover of development projects and actively implement strategies to clean up inventory, secure sufficient supply of projects to steadily increase the contract sales. In addition, the Group will maintain strict control over collection of sales receivable and cost and expenses, try to increase its cash flows and profit margin. As for commercial properties, the Group will further enhance the Injoy brand and its nation-wide exposure and divert its investment to undervalued areas in the cities or segments. At the same time, we will actively develop assetlight business model to enhance the resilience and operational capacity of our commercial projects. Based on the above factors, the Group is confident in our continued high performance. The Group is targeting a contracted sales for 2017 at RMB85.0 billion and a rental and management fees income for its commercial projects at RMB1.0 billion. 30 Future Land Development Holdings Limited

32 CHAIRMAN S STATEMENT In the next 5 to 10 years, the Group will concentrate on what we do best, with real estate development and commercial operation as our primary businesses, and other diversified businesses nurtured by our core real estate business serving as new sources for increased earnings for the Group. It is our belief that, with abundant industry experience accumulated over the past 24 years, a firm foundation of regional expansions, strong capital resources, increasingly strengthened brand image and continuous efforts from our staff, the Group will achieve new milestones. APPRECIATION The Group s steady growth is attributable to the enormous support from relevant parties and selfless contribution from our staff. On behalf of the Board, I would like to take this opportunity to express our wholehearted gratitude to the staff, Shareholders, investors, partners and customers of the Group for their trust and support. Bearing in mind the motto of Hearty Dedication Just For You (, ), we will continue to undertake our corporate social responsibilities, give back to society and create better returns for our customers, Shareholders and investors Wang Zhenhua Chairman 24 February 2017 Shanghai, the PRC * Denotes English translation of the name of a Chinese Company or entity or vice versa and is provided for identification purpose only. Future Land Development Holdings Limited 31

33 MANAGEMENT DISCUSSION AND ANALYSIS , % % 27 12, , , , % 13.4% 11.9% 6.7% 12, % BUSINESS OVERVIEW Property Development In 2016, the Group achieved contracted sales of approximately RMB65,059.5 million, representing an increase of 103.8% as compared with Contracted sales was approximately 5.75 million sq.m. in GFA, representing an increase of 66.2% over A total of 27 cities across the country contributed contracted sales, among which, contracted sales (excluding carparks) recorded in Suzhou, Nanjing, Shanghai and Hangzhou, were RMB12,923.0 million, RMB8,546.8 million, RMB7,577.2 million and RMB4,254.6 million, contributing to 20.3%, 13.4%, 11.9% and 6.7% of the Group s total contracted sales (excluding carparks), respectively. Average contracted selling price (excluding carparks) for the year was approximately RMB12,090 per sq.m., representing an increase of 22% as compared with Future Land Development Holdings Limited

34 MANAGEMENT DISCUSSION AND ANALYSIS Table 1: Details of contracted sales of the Group in 2016 The following table sets out the geographic breakdown of the Group s contracted sales in 2016: Name of project/property Contracted Contracted GFA sold sales (sq.m.) (RMB million) Suzhou Future Land and Merchant Xiangxiyuan 143, , Kunshan Future County 108, , Changshu Vanke Gongwang (note 1) 127, , Future County 91, , No. 9 Project located in the cultural district of Changshu 94, , Wujiang Taihu Future Land 72, , Zhangjiagang Injoy Plaza 128, , Land Parcel at Nansha Road, Changshu 68, Future Land Injoy Plaza 55, Future Mangrove Bay 31, Future Land Shihu Legend Mansion 8, Fragrant Legend 4, Kunshan Future Land Beautiful Harbour 6, Golden County 1, Kunshan Future Land Future France 1, Suzhou sub-total 945, , Nanjing Future Land Xianlin Lake Land Parcel 138, , Future Land Flourish France 207, , Future Land Poly Tiandi 96, , Future Land Longwan Garden 23, Future Land Future France 8, Nanjing sub-total 474, , Future Land Development Holdings Limited 33

35 MANAGEMENT DISCUSSION AND ANALYSIS Name of project/property Contracted Contracted GFA sold sales (sq.m.) (RMB million) Shanghai Shangkun Villa 32, , Future Land Shangkun Yueshan 30, , Qingpu Injoy Plaza 132, , Elite Mansion (note 1) 66, Future Flower Bay 49, Future Royal Fame 18, Future Land Glorious Century 10, Future Land Fragrant Metropolitan 18, Future Land Songjiang Bright Mansion (note 1) 8, Longhu Splendid Mansion (note 1) 4, Future Fragrant View 2, Future Fragrant Legend 3, Park View International Community (note 2) 2, Exalted Uptown 4, Future Land Garden House 1, Other projects Shanghai sub-total 387, , Hangzhou Xiaoshan Xingyicun Community 57, , Future Land Yuhang Block 33 Land Parcel 40, Future Science and Technology City 22, Changmuhanjia Project 42, Future Land Xiaoshan Future Consequence 40, Future Land Majestic Mansion 6, Future Land Whispering Hills 3, Future Land Leisure Land 1, Hangzhou sub-total 215, , Future Land Development Holdings Limited

36 MANAGEMENT DISCUSSION AND ANALYSIS Name of project/property Contracted Contracted GFA sold sales (sq.m.) (RMB million) Changzhou Emporium 99, , New City Residence 49, Park View International Community 32, Future Land YOHO City 45, Future Land In Spring Live 20, Wujin Injoy Plaza 25, Future Capital 6, Future Land Fragrant Legend 8, Future Land Future Consequence 4, Future Land Southern Metropolis 6, Uptown 1, Other projects 3, Changzhou sub-total 303, , Nantong Future France 142, Nantong sub-total 142, Wuxi Future Land Jinjun Yuan 61, Future Land Up Town 15, Other projects 1, Wuxi sub-total 77, Wuhan Future Land Delight City 150, , Future Land Jinghui 93, Wuhan sub-total 244, , Changsha Future Land International Metropolis 104, Changsha sub-total 104, Future Land Development Holdings Limited 35

37 MANAGEMENT DISCUSSION AND ANALYSIS Name of project/property Contracted Contracted GFA sold sales (sq.m.) (RMB million) Zhenjiang Dingmao Project 181, , Injoy Plaza 115, Exalted Uptown 75, Zhenjiang sub-total 371, , Nanchang Injoy Plaza 83, Nanchang sub-total 83, Anqing Injoy Plaza 184, , Anqing sub-total 184, , Changchun Injoy Plaza 136, , Changchun sub-total 136, , Qingdao 1 Fragrant France (note 1) 109, , Excellent Queen s Road (note 1) 92, , Qingdao sub-total 201, , Jinan Future France 174, , Fragrant Legend 15, Jinan sub-total 190, , Jintan Injoy Plaza 39, Jintan sub-total 39, Haikou Injoy Plaza 143, , Haikou sub-total 143, , Future Land Development Holdings Limited

38 MANAGEMENT DISCUSSION AND ANALYSIS Name of project/property Contracted Contracted GFA sold sales (sq.m.) (RMB million) Chengdu Injoy Plaza 204, , Chengdu sub-total 204, , Jiaxing Injoy Plaza 194, , Jiaxing sub-total 194, , Taizhou Injoy Plaza 58, Taizhou sub-total 58, Shengzhou Injoy Plaza 124, , Shengzhou sub-total 124, , Ningbo Injoy Plaza 194, , Ningbo sub-total 194, , Quzhou Injoy Plaza 126, , Quzhou sub-total 126, , Jinjiang Injoy Plaza 38, Jinjiang sub-total 38, Rugao Injoy Plaza 12, Rugao sub-total 12, Yiwu Injoy Plaza 63, , Yiwu sub-total 63, , Future Land Development Holdings Limited 37

39 MANAGEMENT DISCUSSION AND ANALYSIS Name of project/property Contracted Contracted GFA sold sales (sq.m.) (RMB million) Rui an Injoy Plaza 10, Rui an sub-total 10, Car parks 476, , Total 5,750, , Notes: A B 1. Changshu Vanke Gongwang, Longhu Splendid Mansion, Elite Mansion, Future Land Songjiang Bright Mansion, Fragrant France and Excellent Queen s Road are joint ventures and associates projects; 2. Park View International Community contains Community A and Community B ,315,329 19,892,374 2, LAND BANK As at 31 December 2016, the total land bank of the Group was approximately 35,315,329 sq.m., of which 19,892,374 sq.m. was attributable to the Group s interests. The average acquisition cost of the Group s land bank was approximately RMB2,627 per sq.m. The geographic spread of the land bank of the Group as at 31 December 2016 was as follows: 2 Table 2: Breakdown of land bank of the Group City Total GFA Percentage of the Group s total GFA GFA attributable to the Group s interests Percentage of GFA attributable to the Group s interests (%) (%) (sq.m.) (%) (sq.m.) (%) Suzhou 6,352, % 2,904, % Qingdao 3,749, % 2,309, % Changzhou 3,276, % 2,185, % 38 Future Land Development Holdings Limited

40 MANAGEMENT DISCUSSION AND ANALYSIS City Total GFA Percentage of the Group s total GFA GFA attributable to the Group s interests Percentage of GFA attributable to the Group s interests (%) (%) (sq.m.) (%) (sq.m.) (%) Nanjing 2,053, % 1,001, % Hangzhou 1,590, % 870, % Shanghai 1,784, % 810, % Wuhan 1,318, % 867, % Jinan 1,068, % 729, % Zhenjiang 1,295, % 881, % Tianjin 1,227, % 487, % Shaoxing 957, % 653, % Jiaxing 883, % 599, % Anqing 731, % 499, % Ningbo 721, % 490, % Chengdu 689, % 52, % Taizhou 661, % 451, % Changsha 637, % 435, % Foshan 576, % 393, % Nantong 574, % 302, % Taizhou 544, % 148, % Kunming 490, % 334, % Yangzhou 460, % 251, % Jinhua 432, % 150, % Changchun 420, % 288, % Nanchang 387, % 138, % Haikou 371, % 253, % Quzhou 349, % 238, % Wuxi 346, % 236, % Linyi 342, % 234, % Quanzhou 319, % 218, % Hefei 258, % 171, % Jintan 237, % 161, % Wenzhou 201, % 137, % Total 35,315, % 19,892, % Future Land Development Holdings Limited 39

41 MANAGEMENT DISCUSSION AND ANALYSIS ,242, % 3, In 2016, the Group acquired a total of 40 projects to replenish its land bank, all through government public tender, auction, listingfor-sale acquisition and share, debt acquisition. The Group acquired approximately 14,242,195 sq.m. (including those of the Group s joint ventures and associates projects on a 100% basis) (including underground floor area) of land to replenish its land bank whilst the average acquisition cost was approximately RMB3,762 per sq.m. Table 3: Breakdown of land acquisition from January to December 2016 # Project/Land parcel City Land use Attributable interest Site area Total GFA # Land premium sq.m. sq.m. RMB million B % 106, , Plot No. B2-2 Land Parcel in Tian Yuan Xin Jinan Residential Cheng Sub-district, Licheng District, Jinan 20.48% 8,637 94, Industrial Park Xinggui Street West Land Suzhou Commercial Parcel, Suzhou R % 75, , R21-02 Land Parcel for Changmu Unit in Hangzhou Residential Jianggan District, Hangzhou % 61, ,440 1,340 No. 7 Land Parcel located in Zhoupu Town, Shanghai Residential Pudong New District 68.27% 40,028 40, WJ-J Wujiang Economy and Technology Suzhou Commercial Development Zone WJ-J Land Parcel at north of Xingzhong Road, Suzhou R21-01B 23.89% 39, , [2016]8 R21-01B Land Parcel Hang Zheng Chuchu Hangzhou Residential No. [2016] 8 for Changmu Unit in Jianggan District 23.89% 66, ,776 1,460 Land Parcel at south-western side of the intersection of Jiangling East Road and Songshan River in Wujiang Economy and Technology Development Zone Suzhou Residential 40 Future Land Development Holdings Limited

42 MANAGEMENT DISCUSSION AND ANALYSIS # Project/Land parcel City Land use Attributable interest Site area Total GFA # Land premium sq.m. sq.m. RMB million 23.89% 66, ,937 1,455 Land Parcel at north-western side of the Suzhou Residential intersection of Jishi West Road and Songshan River in Wujiang Economy and Technology Development Zone % 19,960 82,877 3,700 Land Parcel No of Liangchengxincun Shanghai Residential Street, Hongkou District, Shanghai 34.14% 191, ,911 1,016 Land Parcel located to the south of Huanhu North Road of Yangchenghu and west of Suzhou Commercial/ Residential Sixian Road, Xiangcheng District, Suzhou 65.69% 129, , Land Parcel in Baohua Village, Jurong Mixed Baohua Town, Jurong 68.27% 59, ,474 1,055 Land Parcel located at the north of Shiji Avenue of Luoxing Street, Jiaxing Commercial/ Residential Jiashan County, Jiaxing City A P(2016) % 102, ,166 2,494 A-type Land Parcel No. P(2016)024 in Jianhe Village, Hongshan District, Wuhan Wuhan Commercial/ Residential % 271, ,481 3,740 Land Parcel No ,33 and 34 of Unit of Baodixincheng, Tianjin Tianjin Commercial/ Residential 22.33% 67, ,932 4, G59 Land Parcel No. 2016G59 located in Kirin Science and Technology Innovation Nanjing Commercial/ Residential Park at the north of Qidi Avenue, Jiangning District, Nanjing 22.33% 74, ,098 3, G60 Land Parcel No. 2016G60 in Qinglong Sub-district, Ditie Xiaozhen, Jiangning District, Nanjing Nanjing Commercial/ Residential Future Land Development Holdings Limited 41

43 MANAGEMENT DISCUSSION AND ANALYSIS # Project/Land parcel City Land use Attributable interest Site area Total GFA # Land premium sq.m. sq.m. RMB million 42.56% 350,761 1,757,835 10, WG-62 Land Parcel Sudi No WG-62 located at the south of Nantiancheng Road and Suzhou Commercial/ Residential west of Chengyang Road, HSR New Town, Xiangcheng District, Suzhou % 809,200 1,367,951 1,571 Land Parcel No. 23 in Jiaozhou City, Qingdao Qingdao Commercial/ Residential 65.69% 58, , CF Land Parcel No. CF located to the Hefei Residential west of Fuyang North Road at Shuangfeng Development Zone, Changfeng County, Hefei 67.70% 24,716 94, Land Parcel located to the west of Tianmu West Road, Xinbei District, Changzhou Changzhou Commercial/ Residential 2014-B40-A-D 68.27% 219, , Land Parcel Zhangdi No B40-A-D, Zhangjiagang Residential Yangshe Town, Zhangjiagang 68.27% 747,593 1,648,646 4,184 Project Wool Beach in Hongdao Economic Zone, Qingdao Qingdao Commercial/ Residential 68.27% 144, ,020 4,274 Land Parcel in Huachong Village, Foshan Residential Shishan Town, Nanhai District, Foshan City E % 26,707 76, Land Parcel No. E1612 located to the north of Hefei Residential Xinanjiang Road, Yaohai District, Hefei (2016) % 19,012 70, Xiaozheng Chuchu No. (2016)8 Land Parcel Hangzhou Residential Xiaoshan District, Hangzhou GJ2013_175# 68.27% 78, , Land Parcel No. GJ2013_175# in Rugao City, Nantong Mixed Nantong % 167, , Jinnan (Gua) No Land Parcel Tianjin Mixed 42 Future Land Development Holdings Limited

44 MANAGEMENT DISCUSSION AND ANALYSIS # Project/Land parcel City Land use Attributable interest Site area Total GFA # Land premium sq.m. sq.m. RMB million R/B % 102, , Land Parcel No. R/B in South New District, Shengzhou Shaoxing Commercial/ Residential G % 41, , Danyang No. G1531 Land Parcel Zhenjiang Mixed G % 1,760 6,160 5 Danyang No. G1602 Land Parcel Zhenjiang Mixed G % 4,460 15, Danyang No. G1603 Land Parcel Zhenjiang Mixed GZ % 161, , Land Parcel No. GZ012 in Yangzhou, Jiangsu Yangzhou Mixed C A % 45, , Land Parcel No. A-1 of Area C, Anyang, Rui an, Wenzhou Mixed Wenzhou, Zhejiang 68.27% 101, , KCWH2016-1KCWH KCWH Land Parcels No. KCWH2016-1, KCWH Kunming Mixed and KCWH located at Puji Sub-district, Wuhua District, Kunming City, Yunnan 68.27% 91, , Land Parcel No located to the west Linyi Mixed of the middle section of Dongxing Road, Hedong District, Linyi, Shandong % 58, , Land Parcel No. 1 in Pinghu City, Jiaxing, Zhejiang Jiaxing Commercial/ Residential % 67, , Land Parcel No. 2 in Pinghu City, Jiaxing, Zhejiang Jiaxing Commercial/ Residential TX TX % 172, , No. TX and No. TX in Taixing City, Taizhou, Jiangsu Taixing Commercial/ Residential Total 4,879,053 14,242,195 53,581 # # Including underground floor area Future Land Development Holdings Limited 43

45 MANAGEMENT DISCUSSION AND ANALYSIS , % ,061, % , % PROPERTY DELIVERY AND REVENUE FROM SALE OF PROPERTIES For the year ended 31 December 2016, revenue from sale of properties by the Group was approximately RMB27,049.7 million, representing an increase of 17.8% over Properties with a total GFA of approximately 3,061,255 sq.m. was delivered during the year ended 31 December 2016, representing an increase of 8.6% as compared to Average selling price of properties delivered and recognized as sales was RMB8,836 per sq.m. in 2016, representing an increase of 8.4% as compared to The following table sets forth the revenue information relating to the properties the Group delivered for sale during 2016: Name of project City Revenue GFA Average selling price (RMB million) (sq.m.) (RMB/sq.m.) 3, ,237 17,636 Nanjing Longwan Garden Nanjing 1, ,480 7,067 Jintan Injoy Plaza Jintan 1, ,375 7,847 Zhangjiagang Injoy Plaza Suzhou 1, ,896 11,541 Haikou Injoy Plaza Haikou 1, ,530 9,026 Nanchang Injoy Plaza Nanchang 1, ,130 10,397 Nanjing Xianlin Lake Land Parcel Nanjing 1, ,600 8,667 Changchun Injoy Plaza Changchun 1, ,131 30,144 Shanghai Future Royal Fame Shanghai 1, ,111 11,003 Changzhou Future Land Emporium Changzhou 1, ,802 10,116 Suzhou Mangrove Bay Suzhou 1, ,856 19,073 Shanghai Fragrant View Shanghai 44 Future Land Development Holdings Limited

46 MANAGEMENT DISCUSSION AND ANALYSIS Name of project City Revenue GFA Average selling price (RMB million) (sq.m.) (RMB/sq.m.) 1, ,468 17,093 Shanghai Fragrant Metropolitan Shanghai ,313 5,722 Anqing Injoy Plaza Anqing ,659 5,192 Nantong Future France Nantong ,885 15,177 Hangzhou Leisure Land Hangzhou 5, ,782 5,666 Other projects Total 27, ,061,255 8, ,228.2 Of the properties the Group had pre-sold, a total GFA of 4,200,000 sq.m. with total pre-sale revenue of approximately RMB49,228.2 million, had not been delivered as at 31 December 2016 (including those of the Group s joint ventures and associates projects). This, however, laid a solid foundation for a steady growth in the Group s revenue for the year to come ,386, % Property Investment For the year ended 31 December 2016, the Group had investment properties of 1,386,190.9 sq.m. that have already commenced operations, and rental income from these investment properties together with some short-term rental income was approximately RMB272.8 million, representing an increase of 58.6% over Such rental income was mainly derived from Changzhou Injoy Plaza ( ) and Changzhou Injoy International Plaza () which were both completed in 2012, Suzhou Wujiang Injoy Plaza ( ), Suzhou Zhangjiagang Injoy Plaza ( ), and Zhenjiang Danyang Injoy Plaza () which were completed in 2015, and Nanchang Injoy Plaza (), Jintan Injoy Plaza (), Anqing Injoy Plaza () and Haikou Injoy Plaza () which were completed in Future Land Development Holdings Limited 45

47 MANAGEMENT DISCUSSION AND ANALYSIS In 2016, the Group had several new investment properties under development, mainly Tongxiang Injoy Plaza (), Changchun Injoy Plaza (), Taizhou Injoy Plaza (), Ningbo Injoy Plaza (), Zhenjiang Injoy Plaza (), Chengdu Injoy Plaza (), Tianjin Injoy Plaza (), Nanjing Injoy Plaza (), Shengzhou Injoy Plaza ( ), Rugao Injoy Plaza (), Rui an Injoy Plaza (), Yangzhou Injoy Plaza (), Kunming Injoy Plaza ( ), Yiwu Injoy Plaza (), Quzhou Injoy Plaza () and Jinjiang Injoy Plaza (). As at 31 December 2016, the development of such investment properties has not been completed Table 5: Breakdown of rental income from investment properties of the Group in For the year ended 31 December RMB 000 RMB 000 Rental income Wujin Injoy Plaza 65,151 52,702 Changzhou Injoy International Plaza 59,842 47,890 * Shanghai Qingpu Injoy Plaza* 24,236 39,312 Zhangjiagang Injoy Plaza 21,549 7,501 Wujiang Injoy Plaza 7,078 4,761 Danyang Injoy Plaza 21, Haikou Injoy Plaza 7,640 Nanchang Injoy Plaza 4,156 Jintan Injoy Plaza 2,462 Anqing Injoy Plaza 835 B Shanghai Future Holdings Tower B 15,903 Total 230, , The Group did not hold any other significant investments except for the aforementioned investment properties as at 31 December * * Shanghai Qingpu Injoy Plaza was transferred to Shanghai Orient Securities Asset Management Company Limited Orient Asset-Qingpu Injoy Plaza Asset Securitization Scheme in June Future Land Development Holdings Limited

48 MANAGEMENT DISCUSSION AND ANALYSIS , % , , % % % FINANCIAL REVIEW Revenue The Group s revenue comprises income from sale of properties and, to a lesser extent, property management, rental and other property related services earned during the year. The Group s revenue increased by 18.4%, to approximately RMB28,232.1 million for the year ended 31 December 2016 from approximately RMB23,835.9 million for the year ended 31 December As a breakdown, income from sales of properties during the year ended 31 December 2016 was approximately RMB27,049.7 million, representing a year-on-year increase of 17.8%; income from property management and other revenue was approximately RMB909.7 million, representing a year-on-year increase of 31.6%; and rental income was approximately RMB272.8 million, representing a year-on-year increase of 58.6% , % ,625.1 Cost of Sales Cost of sales consists primarily of the costs the Group incurred directly in relation to its property development activities as well as its leasing and property management operations. Cost of sales includes construction costs, land use rights costs, business tax and surcharges, capitalized interest and other business costs. The Group s cost of sales increased by 13.9% to approximately RMB21,625.1 million for the year ended 31 December 2016 from approximately RMB18,979.7 million for the year ended 31 December Future Land Development Holdings Limited 47

49 MANAGEMENT DISCUSSION AND ANALYSIS The following table sets forth information relating to the Group s cost of sales for the years indicated: 6 Table 6: Breakdown of the Group s cost of sales For the year ended 31 December Percentage increase/ (decrease) (%) RMB 000 RMB 000 (%) Land use rights costs 7,720,514 6,389, Construction costs 11,179,592 9,802, Capitalized interest 811, ,161 (2.1) Business tax and surcharges 1,188,011 1,328,494 (10.6) Provision for impairment of properties held or under development for sale 242,495 Other expenses 725, , ,625,122 18,979, Total GFA delivered (sq.m.) 3,061,255 2,817, Average cost per sq.m. sold (RMB) (note) 6,439 6, Average selling price per sq.m. sold (RMB) 8,836 8, Average cost as % of average selling price 72.87% 74.00% (1.5) Note: Average cost per sq.m. sold refers to the average cost of the Group s property sales (excluding the Group s leasing and property management operations) and is derived by dividing the sum of construction costs, land use rights costs and capitalized interest for a year by the total GFA delivered in that year. 48 Future Land Development Holdings Limited

50 MANAGEMENT DISCUSSION AND ANALYSIS , % , % % Gross Profit The Group s gross profit increased by 36.1% to approximately RMB6,607.0 million for the year ended 31 December 2016 from approximately RMB4,856.2 million for the year ended 31 December The Group reported a gross profit margin of approximately 23.4% for the year ended 31 December 2016, higher than that of approximately 20.4% for the year ended 31 December 2015, primarily attributable to the increase in selling price and favourable earnings recorded for most projects Fair Value Gains on Investment Properties The Group develops and holds certain of its commercial properties such as retail shops, shopping malls and car parks for rental income or capital appreciation. The Group s investment properties are appraised annually by an independent property valuer. Any appreciation or depreciation in the Group s investment property value is recognized as fair value gains or losses in the Group s consolidated statements of income. Valuation gains on investment properties was approximately RMB582.2 million before tax for the year ended 31 December The fair value gain recorded for investment properties was primarily attributable to the increase in capital value on the whole ,689.4% % , Other Gains Net Net other gains increased by 1,689.4% to approximately RMB254.1 million for the year ended 31 December 2016 from approximately RMB14.2 million for the year ended 31 December The increase in net other gains was mainly due to the gain of RMB275.5 million arising from the disposal of certain subsidiaries engaging in residential property management business and the gain of RMB46.0 million arising from the business combination of a joint venture engaging in real estate development, offset by the loss of RMB110.9 million arising from the disposal of a subsidiary engaging in investment property business. Selling and Marketing Expenses Selling and marketing expenses increased by 32.6% to approximately RMB1,097.9 million for the year ended 31 December 2016 from approximately RMB828.1 million for the year ended 31 December The increase was primarily attributable to an increase in selling and marketing expenses incurred as the Group launched more projects for pre-sale in Future Land Development Holdings Limited 49

51 MANAGEMENT DISCUSSION AND ANALYSIS , % , Administrative Expenses Administrative expenses increased by 55.3% to approximately RMB1,607.7 million for the year ended 31 December 2016 from approximately RMB1,035.5 million for the year ended 31 December The increase in administrative expenses was primarily attributable to an increase in staff costs resulting from an increase in the Group s staff headcount in % , % , , % ,384.0 Finance Costs Net The Group s finance costs primarily consists of interest expenses on bank loans, senior notes and corporate bonds less capitalized interest, and foreign exchange losses. Interest on borrowings relating to project development is capitalized to the extent it is directly attributable to a particular project and used to finance the development of that project. Net finance costs of the Group increased by 51.7% to approximately RMB780.4 million for the year ended 31 December 2016 from approximately RMB514.6 million for the year ended 31 December This increase was mainly attributable to the expansion in scale of financing of the Group during the year. Income Tax Expense The Group s income tax expense includes provisions made for land appreciation tax ( LAT ), PRC corporate income tax and deferred income tax during the year. Income tax expense increased by 10.6% to approximately RMB1,668.2 million for the year ended 31 December 2016 from RMB1,507.7 million for the year ended 31 December The increase was primarily due to the increase in the Group s profit from property development segment in Profit for the Year Net profit attributable to equity holders of the Company increased by 34.3% to approximately RMB1,384.0 million for the year ended 31 December 2016 from approximately RMB1,030.9 million for the year ended 31 December % ,156.0 Core earnings attributable to equity holders of the Company increased by 59.71% to approximately RMB1,156.0 million for the year ended 31 December 2016 from approximately RMB723.8 million for the year ended 31 December Future Land Development Holdings Limited

52 MANAGEMENT DISCUSSION AND ANALYSIS , % 13, , % , , , , , ,980.58, ,211.9 Liquidity, Financial and Capital Resources Cash position As at 31 December 2016, the Group s cash at bank and on hand (including restricted cash) increased by 77.2% to approximately RMB13,756.4 million from approximately RMB7,762.5 million as at 31 December The carrying amount of the Group s cash and cash equivalents increased by 80.7% to approximately RMB11,708.2 million as at 31 December 2016 from approximately RMB6,478.9 million as at 31 December Borrowings and charges on the Group s assets The Group s outstanding current and non-current borrowings amounted to RMB27,211.9 million as at 31 December 2016, of which approximately RMB10,175.7 million is repayable within one year, approximately RMB8,090.9 million is repayable after one year but within two years, approximately RMB8,839.0 million is repayable after two years but within five years and approximately RMB106.3 million is repayable after five years. The Group s current and non-current borrowings increased by RMB8,231.4 million to RMB27,211.9 million as at 31 December 2016 from RMB18,980.5 million as at 31 December ,180.9 As at 31 December 2016, the Group s bank loans were approximately RMB8,180.9 million, all of which were secured by one or a combination of the following methods: land use rights, properties under development, investment properties, property, plant and equipment, shares of the Company s subsidiaries, bank deposits and/or guarantees provided by the Company s subsidiaries. The Group s bank borrowings are from major commercial banks, all of which are independent third parties % The proportion of the Group s long-term borrowings in the total borrowings was 62.6% as at 31 December 2016, ensuring the healthy and stable cash flow of the Group in the future. The Directors believed that the constant optimization of the Group s debt level and financial structure had laid a solid foundation for the Group to withstand market volatility and diminish financial risks % The weighted average interest rate for the Group s bank borrowings, senior notes and corporate bonds as at 31 December 2016 was 5.7%. Future Land Development Holdings Limited 51

53 MANAGEMENT DISCUSSION AND ANALYSIS % 88.7% 100% Net debt-to-equity ratio As at 31 December 2016, the Group s net debt-to-equity ratio increased to 88.7% from 83.3% in 2015, primarily due to an increase in net debt resulted from the increase in financing and the increase in investment cash outflow. Net debt-to-equity ratio is calculated by dividing net debt at the end of the period by total equity and multiplying by 100%. Net debt is calculated as total borrowings less cash, cash equivalents and restricted cash. (i) (ii) Contingent Liabilities Pursuant to the mortgage contracts, banks require the Group to guarantee its purchasers mortgage loans. Guarantees for mortgages on pre-sold residential properties are generally discharged at (i) the issue of the real estate ownership certificate by government authorities to the purchaser, or (ii) the satisfaction of mortgage loans by the purchasers of the properties (whichever is earliest). If a purchaser defaults on a mortgage loan, the Group is responsible to repay the outstanding mortgage principal together with accrued interest and penalties owed by the defaulting purchasers to the banks and the Group is entitled to take over the legal title and possession of the related properties. The Group s guarantee period typically starts from the date of grant of the mortgage , ,376.1 As at 31 December 2016, the Group s contingent liabilities in respect of the guarantees given to the financial institutions for mortgage loan facilities granted to purchasers of the Group s properties amounted to approximately RMB12,130.3 million (as at 31 December 2015: approximately RMB5,376.1 million). In light of the minimal historical default rates of such mortgage loans facilities, the Directors considered that the likelihood of default of payments by the purchasers is minimal and therefore the financial guarantee measured at fair value is immaterial There are certain corporate guarantees provided by the Company s subsidiaries for each other in respect of borrowings as at 31 December The Directors consider that the Company s subsidiaries are sufficiently and financially resourced to settle their obligations Save as those disclosed in this annual report, the Group had no other material contingent liabilities as at 31 December Future Land Development Holdings Limited

54 MANAGEMENT DISCUSSION AND ANALYSIS % Available-for-sale Financial Assets As at 31 December 2016, the fair value of the Group s available-for-sale financial assets increased by 28.8% to approximately RMB434.9 million from approximately RMB337.7 million as at 31 December The increase is mainly attributable to the Group s acquisition of available-forsale financial assets in 2016 that amounted to approximately RMB100.6 million , Foreign Exchange Risk As at 31 December 2016, the Group had cash balances denominated in Renminbi of approximately RMB13,207.7 million, in Hong Kong dollars of approximately RMB103.8 million and in U.S. dollars of approximately RMB444.9 million. Almost all of the Group s operating activities are carried out in the PRC with most of the transactions denominated in Renminbi. The Group is exposed to foreign currency risk arising from the exposure of U.S. dollars and Hong Kong dollars against Renminbi as a result of certain cash balances and the settlement of certain general and administrative expenses and other loans in U.S. dollars or Hong Kong dollars % % % In addition to the USD200 million senior notes issued in 2013, which the Company has redeemed in full on 31 January 2016 at a redemption price equal to % of the principal amount thereof, plus accrued and unpaid interest, if any, to the redemption Date, as disclosed in the announcement of the Company dated 3 December 2015; the USD350 million senior notes issued in 2014, which will be redeemed by the Company in full on 20 March 2017 at a redemption price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date, as disclosed in the announcement of the Company dated 17 February 2017; and since the USD250 million senior notes issued in 2015, the Company further issued USD350 million senior notes on 9 February 2017 through the international capital market at a fixed interest rate of 5.0% with a term of three years to secure healthy and sound cash flow for the Group in the future. As a result of the issuance of these senior notes, the Group became exposed to foreign currency risk arising from the exposure of Renminbi against U.S. dollars. Future Land Development Holdings Limited 53

55 MANAGEMENT DISCUSSION AND ANALYSIS In addition, Renminbi is not freely convertible into foreign currencies and the conversion of Renminbi into foreign currencies is subject to rules and regulations of the foreign exchange control promulgated by the PRC government. The Group does not have a foreign currency hedging policy. However, the Directors monitor the Group s foreign exchange exposure closely and may, depending on the circumstances and trend of foreign currency, consider adopting appropriate foreign currency hedging policy in the future and disclose when necessary % 50% 2011-B , G-36 20, Material Acquisition and Disposal On 23 November 2016, Suzhou Future Land Chuangjia Property Co., Ltd.* () ( Suzhou Future Land ) and its wholly-owned subsidiary, Suzhou Golden Century Real Estate Co., Ltd* () ( Golden Century ), entered into the cooperation framework agreement with Suzhou Country Garden Real Estate Co., Ltd.* () ( Suzhou Country Garden ), a wholly-owned subsidiary of Country Garden Holdings Company Limited ( ), pursuant to which Suzhou Country Garden will acquire the 50% equity interest in Golden Century held by Suzhou Future Land. Upon completion of the disposal, each of Suzhou Future Land and Suzhou Country Garden will hold the equity interest in Golden Century as to 50%, respectively, so that Suzhou Future Land and Suzhou Country Garden will jointly develop the properties, regarding two land parcels, i.e., the land parcel no. Sudi 2011-B-71 (2011-B-71 ), which is located at Yangchenghu Town, Xiangcheng District, Suzhou City, Jiangsu Province, spanning to Xiangtai Road in the east, Sixian Road in the west, Shunxian Road in the south and Huanhu North Road of Yangchenghu in the north ( ), with a land area of 171,543 sq.m. for wholesale and retail and urban residential uses, and the land parcel no. Sudi G-36 (2010-G-36 ), which is located at Yangchenghu Town, Xiangcheng District, Suzhou City, Jiangsu Province, spanning to the west of Sixian Road (), with a land area of 20,276 sq.m., for accommodation and catering (hotel) uses. The disposal constitutes a discloseable transaction of the Company. For further details, please refer to the announcements published by the Company on 28 November 2016 and 13 December Future Land Development Holdings Limited

56 MANAGEMENT DISCUSSION AND ANALYSIS A A 2,220,484,186 1,515,924,554 A A 68.27% 42,000,00038,500,000 A A 67.00% 67.11% 1.27% 1.16% On 19 August 2016, Future Land Holdings, a subsidiary of the Company and a company established in the PRC whose shares are listed on the Shanghai Stock Exchange, conditionally adopted the first phase of the restricted share incentive scheme (the Scheme ) and approved the proposal in respect of the grant of the restricted shares of Future Land Holdings (the Restricted Shares ) to the participants in accordance with the terms of Scheme. Mr. Liu Yuanman is a Director, Mr. Liang Zhicheng was a Director in the past 12 months and a director of Future Land Holdings and Mr. Chen Deli is a director of Future Land Holdings and hence connected persons of the Company. The grant of the Restricted Shares to each of Mr. Liu Yuanman, Mr. Liang Zhicheng and Mr. Chen Deli constitutes a non-exempt connected transaction of the Company. As at 19 August 2016, the date when the Scheme was announced by Future Land Holdings, the number of the issued A Shares of Future Land Holdings was 2,220,484,186 and the Company held 1,515,924,554 A Shares, approximately 68.27% of the issued A Shares of Future Land Holdings. The number of the Restricted Shares which will be issued under the Scheme and under the first tranche grant (the First Tranche Grant ) of the Scheme is 42,000,000 and 38,500,000 A Shares, respectively. After issue of the Restricted Shares under the Scheme and under the First Tranche Grant, the Company will hold approximately 67.00% and 67.11%, respectively, of the enlarged A Shares of Future Land Holdings. The Company s shareholding in Future Land Holdings will be diluted by approximately 1.27% and 1.16%, respectively, as a result of the issue of the Restricted Shares under the Scheme and under the First Tranche Grant, which were the deemed disposals and constituted discloseable transactions for the Company. For further details, please refer to the announcements published by the Company on 30 September 2016 and 24 October % 49% On 21 September 2016, Shanghai Future Land Wanjia Real Estate Co., Ltd.* ( ) ( Future Land Wanjia ) and its wholly-owned subsidiary, Shanghai Yulong Real Estate Development Co., Ltd.* ( ) ( Yulong Real Estate ) entered into the joint development agreement with Shanghai Qingmao Property Co., Ltd.* () ( Qingmao Property ), a whollyowned subsidiary of China Jinmao Holdings Group Limited ( ), pursuant to which Qingmao Property will acquire the entire equity interest in Yulong Real Estate held by Future Land Wanjia. Upon completion of the disposal, Future Land Wanjia and Qingmao Property (through Yulong Real Estate) will hold the equity interest in the project company, jointly established in the PRC by Future Land Wanjia and Yulong Real Estate on August 17, 2016, as to 51% and 49%, respectively, so that Future Land Wanjia and Yulong Real Estate Future Land Development Holdings Limited 55

57 MANAGEMENT DISCUSSION AND ANALYSIS , , will jointly develop the property, regarding the land parcel no of Liangchengxincun Subdistrict, Hongkou District, Shanghai ( ), which is located at 301 Block, Liangchengxincun Subdistrict, Hongkou District, Shanghai: spanning to Guangyue Road in the east, garrison lands in the south, residential areas in the west and Guangling Fourth Road in the north (301 ), with a property area of 19,959.5 sq.m. and a planned gross floor area of 54, sq.m., and for residential use. The disposal constitutes a discloseable transaction of the Company. For further details, please refer to the announcement published by the Company on 7 July ,353,030 60% On 6 July 2016, Future Land Wanbo Property Co., Ltd.* ( ) ( Future Land Wanbo ) won the bid for the land use rights in respect of the land parcel, located to the east of Jiangdu North Road, north of Ancient Canal, south of Zhuxi Road and west of Sanxing Road of Yangzhou, Jiangsu, the PRC* ( ) (the Target Land Parcel ) at RMB823,353,030, through the listing-for-sale process. According to listing-for-sale process and relevant documents, after completion of the grant of the Target Land Parcel, Future Land Wanbo shall own at least 60% of commercial GFA. The acquisition of the land use rights of the Target Land Parcel pursuant to the State-owned Construction Land Use Rights Grant Contract constitutes a discloseable transaction of the Company. For further details, please refer to the announcement published by the Company on 7 July % On 22 June 2016 and 29 June 2016, respectively, Future Land Holdings entered into the promoters agreement and the share subscription agreement with Shanghai Red Star Macalline Investment Company Limited* ( ), Changzhou Hualida Garment Group Company Limited* ( ), Xining Weiye Development Company Limited* ( ), Hongdou Group, Jiangsu Hongdou Industrial Co., Ltd.* ( ) and Sunrain Holding Group Company Limited* ( ) in relation to the establishment of a joint venture company (being Guofeng Life Insurance Co., Ltd *) (the JV Insurance Company ) in Lhasa. Future Land Holdings shall subscribe for 20% of the share capital of the JV Insurance Company with an amount of RMB300 million in cash. The establishment of the JV Insurance Company constituted a discloseable transaction for the Company. For further details, please refer to the announcement published by the Company on 4 July Future Land Development Holdings Limited

58 MANAGEMENT DISCUSSION AND ANALYSIS 8,600,000,000 1,000,000, % A shareholders agreement ( Shareholders Agreement ) was entered into by Future Land Investment Co., Ltd.* ( ) ( Future Land Investment ), a wholly-owned subsidiary of the Company, Jiangsu Shagang Group, GCL Capital, Hongdou Group, Jiangsu Yangzijiang Shipyard Co., Ltd.* ( ), Jiangyin Chengxing Industrial Group Co., Ltd.* ( ), Nanjing Fullshare Dazu Technology Company Limited* ( ), Jiangsu Zhongchao Holding Co, Ltd.* ( ), Suzhou Zhenghe Investment Co., Ltd.* ( ), Far East Holding Group Co., Ltd.* ( ) and Jiangsu Xinyuan Industrial Investment Co., Ltd.* ( ), in relation to the establishment and management of a joint venture company (being Jiangsu Minying Investment Holding Co., Ltd* ()) (the JV Investment Company ). Pursuant to the Shareholders Agreement, the registered capital of the JV Investment Company is RMB8.6 billion, of which Future Land Investment shall contribute RMB1 billion, representing approximately 11.63% of the total registered capital of the JV Investment Company. The establishment of the JV Investment Company and the Shareholders Agreement constituted a discloseable transaction for the Company. For further details, please refer to the announcement published by the Company on 29 June ,049,820, On 22 June 2016 (after trading hours), Future Land Wanjia, being a wholly-owned subsidiary of Future Land Holdings, entered into an acquisition agreement (the Acquisition Agreement ) with Orient Asset, pursuant to which the Future Land Wanjia agreed to sell, and Orient Asset agreed to purchase, the entire equity interest in Shanghai Diyu Commercial Operation Management Co., Ltd* ( ) for the consideration of RMB1, million (including the repayment of the loan of Future Land Wanjia). On 22 June 2016 (after trading hours), Orient Asset and Future Land Holdings entered into a preferential rights agreement (the Preferential Rights Agreement ), pursuant to which Future Land Holdings agreed to pay the premium for the preferential rights and Orient Asset agreed to grant the right of purchase and the right of first refusal to Future Land Holding. The Acquisition Agreement constituted a discloseable transaction and the Preferential Rights Agreement constituted a major transaction. For further details, please refer to the announcement published by the Company on 22 June Future Land Development Holdings Limited 57

59 MANAGEMENT DISCUSSION AND ANALYSIS ,000, On 1 April 2016 (after trading hours), Hong Kong Chuangzhi Development Limited (), ( Chuangzhi ), being an indirect wholly-owned subsidiary of the Company, entered into an equity transfer agreement (the Equity Transfer Agreement ) with Wealth Zone Hong Kong Investments Limited () ( Wealth Zone ) and Changzhou Chuangyue Consultancy Co., Ltd.* () ( Changzhou Chuangyue ), pursuant to which the Chuangzhi conditionally agreed to sell and the Wealth Zone conditionally agreed to purchase the entire equity interest in Changzhou Chuangyue at a total consideration of RMB320 million. Upon completion, Changzhou Chuangyue ceased to be a subsidiary of the Company. For further details, please refer to the announcement and the circular published by the Company on 1 April and 18 April 2016, respectively ,3226,141 1,181 During the year ended 31 December 2016, the Group did not have any material acquisition or disposal of subsidiaries, associates or assets save as disclosed in this annual report. Future Plans for Material Investment or Capital Assets The Directors confirmed that as at the date of this annual report, there are no current plans to acquire any material investment or capital assets other than in the Group s ordinary business of property development. Employees and Compensation Policy As at 31 December 2016, the Group had 7,322 full-time employees in the PRC and Hong Kong, 6,141 of which worked in the property development operations and commercial management business and 1,181 were engaged in other operations The Group determines the remuneration packages of all employees (including the Directors) based on their performance, work experience and the prevailing market wage level, and provide promotional opportunities for them with reference to their individual strengths and potentials. The remuneration package of the employees consists of basic salary, cash bonus and share-based payments. The Group has established performance appraisal system so as to evaluate the performance of its employees on an annual basis and use the evaluation results to determine their salary increment or promotion accordingly. The Group recognized an expense in relation to share-based payments of RMB13.2 million for the year ended 31 December 2016 (for the year ended 31 December 2015: RMB8.1 million). * Denotes English translation of the name of a Chinese Company or entity or vice versa and is provided for identification purpose only. 58 Future Land Development Holdings Limited

60 DIRECTORS AND SENIOR MANAGEMENT B EXECUTIVE DIRECTORS Wang Zhenhua ( ), or Chairman Wang, aged 54, was appointed as our chairman and executive Director in July Chairman Wang began engaging in property development business in China in Chairman Wang founded the business of the Group and has been the chairman of the board of directors of Future Land Holdings since In 2001, Chairman Wang became chairman of the board of directors of Jiangsu Future Land Co., Ltd. ( Jiangsu Future Land ), a subsidiary of the Company that engages principally in residential property development and the B-shares of which were formerly listed on the Shanghai Stock Exchange (Stock Code: ). In December 2015, Future Land Holdings absorbed and merged Jiangsu Future Land by way of share swap and was listed on the Shanghai Stock Exchange (Stock Code: ). In 2008, he founded Future Land Wanbo, which focuses on the development of mixeduse complex project. Chairman Wang graduated from Jiangsu Broadcast and Television University () with a diploma in mechanical engineering in August 1983, and from Cheung Kong Graduate School of Business ( ) with an EMBA degree in July Chairman Wang currently serves as an executive committee member of the All- China Federation of Industry and Commerce (), vicepresident of China Real Estate Chamber of Commerce ( ) and as president of Shanghai Real Estate Chamber of Commerce. Chairman Wang was named National Model Worker by the State Council in 2010 and was appointed as a representative of Jiangsu Province for the National People s Congress of the PRC in January Lv Xiaoping ( ), aged 55, was appointed as our executive Director and chief executive officer in January Mr. Lv was appointed as our non-executive Director for a period from 6 November 2012 to 7 January Mr. Lv joined the Group in Mr. Lv served as the vice president of Future Land Holdings between September 2001 and August 2004, the general manager of Future Land Holdings between 30 March 2015 and 15 December From August 2004 to January 2013, Mr. Lv had been a director and the president of Jiangsu Future Land (Stock Code: ), principally responsible for the overall management of the Group s residential property development business carried out by Jiangsu Future Land. Since February 2013, Mr. Lv has been the vice chairman of Jiangsu Future Land. Mr. Lv graduated from Naval University of Engineering with a bachelor s degree in engineering in Mr. Lv later graduated from China European International Business School with an MBA degree in Prior to joining the Group, Mr. Lv worked in Changchai Company Limited, a company listed on the Shenzhen Stock Exchange (Stock Code: ) between 1987 and 2001 and served as the secretary to the board of directors and head of investment of the company, where he was responsible for business development and investment strategies. Future Land Development Holdings Limited 59

61 DIRECTORS AND SENIOR MANAGEMENT B Lu Zhongming ( ), aged 44, was appointed as our executive Director and a member of the nomination committee of the Company (the Nomination Committee ) in January He is the chief financial officer of the Company, overseeing the accounting and finance functions of the Group. Mr. Lu joined the Group in 2001 after Jiangsu Future Land acquired its listing status on the Shanghai Stock Exchange and became the finance general manager of Jiangsu Future Land in Mr. Lu has been a director of Jiangsu Future Land and a vice president of Future Land Wanbo since He served as vice president of Future Land Holdings between 2011 and December He became a vice president of the Company in January Mr. Lu completed his accounting study from Nanjing Institute of Finance & Economics () in 1999, and obtained a degree of master of business administration from Tongji University ( ) in Prior to joining the Group, Mr. Lu served as deputy head of finance and audit department of Jiangsu Wuling (acquired by Future Land Holdings in our B-Share restructuring in 2001) between 1998 and Liu Yuanman ( ), aged 59, was appointed as our executive Director in June Mr. Liu joined the Group in 2006 and was appointed as a vice president of Future Land Wanbo in 2010 and vice president of Future Land Holdings from 2011 to 30 March Mr. Liu graduated from Changzhou Construction Vocational University ( ) with a diploma in industrial and civil engineering in May Prior to joining the Group, Mr. Liu worked in Changzhou Marine Products Co., Ltd. ( ) between 1984 and 1995 and served as general manager and chairman of Changxin Real Estate Development Co., Ltd. ( ) between 1995 and 2002 and general manager of Wuxi Jintaihu Real Estate Limited Company ( ) between 2003 and 2006, where he was responsible for the overall business of the relevant companies and gained valuable experience in project management. Mr. Liu qualified as a civil engineer in Future Land Development Holdings Limited

62 DIRECTORS AND SENIOR MANAGEMENT Chan Wai Kin ( ), aged 36, was appointed as our executive Director and a member of the remuneration committee of the Company (the Remuneration Committee ) and joint company secretary in March Mr. Chan has over 10 years of experience in accounting and financial matters. Mr. Chan served as the chief financial officer, the company secretary, and the authorized representative of Times Property Holdings Limited, a company incorporated in the Cayman Islands and the issued shares of which are listed on the main board of the Stock Exchange (Stock Code: 1233), from February 2014 to 8 March During this period, Mr. Chan was mainly responsible for financial reporting and investors related matters. Mr. Chan also served as the executive director, the chief financial officer, and the company secretary of Golden Wheel Tiandi Holdings Company Limited ( Golden Wheel ), a company incorporated in the Cayman Islands and the issued shares of which are listed on the main board of the Stock Exchange (Stock Code:1232), from April 2012 to September During this period, Mr. Chan was mainly responsible for overseeing the financial management and regulatory compliance. Mr. Chan served as the non-executive director of Golden Wheel from 27 September 2013 to 28 February He worked as an auditor at Deloitte Touche Tohmatsu from December 2005 to August 2010, and an auditor manager at KPMG from August 2010 to October Mr. Chan obtained a Bachelor degree in Business Science from Indiana University Bloomington of the United States in May Mr. Chan obtained an EMBA at the University of Chicago Booth School of Business in March He has been a member of the Hong Kong Institute of Certified Public Accountants since July NON-EXECUTIVE DIRECTOR Wang Xiaosong ( ), aged 29, was appointed as our non-executive Director in October Mr. Wang is the son of Chairman Wang. Mr. Wang joined Jiangsu Future Land in 2009 as civil engineer and subsequently as project manager. Between November 2011 and January 2013, Mr. Wang became the vice president and general manager of the marketing department of Jiangsu Future Land where he was responsible for and gained valuable experience in sales and market research. Mr. Wang has served as a director of Jiangsu Future Land since April In February 2013, Mr. Wang was appointed as president of Jiangsu Future Land, and has been responsible for its general management; and from 14 December 2015 to 26 October 2016, he served as the general manager of Future Land Holdings. In addition, since March 2015, Mr. Wang has been a director of Future Land Holdings. Mr. Wang graduated from Nanjing University with a bachelor s degree in Environmental Sciences in Future Land Development Holdings Limited 61

63 DIRECTORS AND SENIOR MANAGEMENT INDEPENDENT NON-EXECUTIVE DIRECTORS Chen Huakang ( ), aged 64, was appointed as our independent non-executive Director and the chairman of the audit committee of the Company (the Audit Committee ) in November Mr. Chen joined the Group in November He was awarded a certificate in Modern Economic Management Professional Studies ( ) by Beijing Economic Management College ( ) in Mr. Chen has been a certified public accountant in China since 1998 and a registered expert consultant in Jiangsu Province ( ) since He has over 40 years of experience in the field of accounting. Mr. Chen is and has been serving as the principal accountant and managing partner of Jiangsu Wujin Certified Public Accountants (), a registered PRC accounting firm in Jiangsu province, since He also served as managing partner of Wujin Assets Valuation Association ( ) between 1995 and 2000, and is and has been the president of Changzhou Jieling Investment Management Consultant Limited ( ) since Mr. Chen at present is managing partner of Changzhou Huifeng Accounting Office ( ). Mr. Chen served as independent director of Jiangsu Future Land between May 2002 and May 2010 and the independent director of Jiangsu Shunfeng Photovoltaic Co., Ltd. () between 2009 and May Zhong Wei (), aged 48, was appointed as our independent nonexecutive Director and a member of the Audit Committee, Remuneration Committee and Nomination Committee in December Mr. Zhong has been a professor at the Department of Economics and Business Administration, Beijing Normal University since July Mr. Zhong worked as a lecturer at the Business School of Jiangnan University ( ) from July 1994 to July Mr. Zhong also served as an assistant engineer at Wuxi Alarm Devices Factory ( ) from July 1990 to July Mr. Zhong served as an independent director for Dongxing Securities Co., Ltd. () since July 2011, which principally provides securities dealings and related services. Mr. Zhong also served as an independent director for Fudian Bank Co., Ltd. () since September 2012, which principally offers commercial and investment banking services. Mr. Zhong graduated from Nanjing University () in 1990 majoring in applied physics and from Southeast University () in 1994 majoring in industrial economics management. Mr. Zhong received his doctorate s degree in 1999 from Beijing Normal University () majoring in international economics. Between September 2001 and July 2004, Mr. Zhong engaged in postdoctoral research in management science at Tongji University (). 62 Future Land Development Holdings Limited

64 DIRECTORS AND SENIOR MANAGEMENT Zhu Zengjin ( ), aged 52, was appointed as our independent non-executive Director, the chairman of Nomination Committee and Remuneration Committee, and a member of Audit Committee in November Mr. Zhu joined the Group in November He graduated from Nanjing University () with a bachelor s degree in law in 1985 and from Beijing University () with an EMBA degree in Prior to joining the Group, Mr. Zhu was the head of the business department between July 1985 and August 1998 and the deputy head and partner between August 1999 and August 2009 of Jiangsu C&T Partners Law Firm ( ), respectively. He was also a listing committee member of the GEM Board of the China Securities Regulatory Commission ( ) between August 2009 and August Since January 2002, Mr. Zhu has been a committee member of the Jiangsu Province All China Lawyers Association in Securities Law ( ) and has been recognized as a Well Known Lawyer in Jiangsu Province () by the association. He has served as an independent director of two listed companies in the PRC, namely Ningbo Yunsheng Co., Ltd. () (Stock Code: ) and Bank of Nanjing Co., Ltd. () (Stock Code: ), since March 2012 and June 2012, respectively, and three other non-listed PRC companies, namely, Guolian Trust Co., Ltd. (), Institute of Architectural Design Co., Ltd. ( ) and Jiangnan Rural Commercial Bank Co., Ltd. () since June 2008, September 2009 and June 2012, respectively. Future Land Development Holdings Limited 63

65 DIRECTORS AND SENIOR MANAGEMENT SENIOR MANAGEMENT The table below shows certain information in respect of senior management of the Group: Name Age Position (1) 48 Liang Zhicheng Vice President, Future Land Holdings (1) 42 Chen Deli Vice President, Future Land Holdings (1) 51 Ni Lianzhong Vice President, Future Land Holdings (1) 39 Guo Nannan Vice President, Future Land Holdings (1) 39 Yan Zheng Vice President, Future Land Holdings (1) 41 Zhou Kejie Vice President, Future Land Holdings (1) (1) All employed at Future Land Holdings, a subsidiary of the Company B Liang Zhicheng ( ), aged 48, has been the vice president of Future Land Holdings since 30 March Between September 2014 and December 2014, Mr. Liang has been a co-president of the Company. He has been a co-president of Future Land Holdings since January Between February 2003 and August 2014, Mr. Liang worked at Jiangsu Future Land and its subsidiaries serving as deputy manager in the administration and management department of Jiangsu Future Land, general manager of Suzhou Future Land Wanjia Real Estate Co., Ltd., ( ) chairman and general manager of Jiangsu Future Land Property Management Co., Ltd., () general manager of Wuxi Future Land Wanjia Property Co., Ltd., ( ) general manager of Shanghai Future Land Wanjia Real Estate Co., Ltd. ( ) and assistant president and vice president of Jiangsu Future Land, where he was responsible for administrative affairs and operations management respectively and had accumulated extensive experience in overall management. (Jiangsu Future Land is a subsidiary of the Company principally engaged in residential property development and the B-Shares of which are listed on the Shanghai Stock Exchange (Stock code: ). Suzhou Future Land Wanjia Real Estate Co., Ltd., Jiangsu Future Land Property Management Co., Ltd., Wuxi Future Land Wanjia Property Co., Ltd. and Shanghai Future Land Wanjia Real Estate Co., Ltd. are subsidiaries of Jiangsu Future Land.) Between August 1988 and January 2003, Mr. Liang worked at Jiangsu Xinya Chemical Group (), where he was responsible for the administration. Mr. Liang graduated from Southwest University ( ) in 2014 majoring in visual communication design and was qualified as an economist ( ) in Future Land Development Holdings Limited

66 DIRECTORS AND SENIOR MANAGEMENT Mr. Chen Deli ( ), aged 42, holds an EMBA from Southwestern University of Finance and Economics. Mr. Chen was the general manager of Singapore Yi-Lai Group Wuhan branch ( ) from September 1997 to September 2001, general manager of Shun Yuan Commercial Property Co., Ltd of Sichuan Huali Group ( ) from September 2001 to May 2006, general manager of China division of Singapore CapitaLand and CapitaMalls Asia from June 2006 to August 2010, and served as executive deputy general manager of the business management operation center of Dalian Wanda Commercial Properties Co., Ltd., vice president and general manager of investment attraction center of Wanda Commercial Management, executive vice president and general manager of the operation center of Wanda Commercial Management, the vice president and executive vice president of the business management headquarter and general manager of integrated management center of Wanda Commercial Property, among others, between August 2010 to July He has acted as a director and vice president of Future Land Holdings since August Ni Lianzhong ( ), aged 51. Mr. Ni joined the Group in 1995 and has successively served as engineer and manager of the construction department, as the general manager of Wealthzone Development Co., Ltd. () between October 2004 and June 2008 and has successively held the posts of the project general manager, general manager of project management center and vice president of Future Land Holdings since June Guo Nannan ( ), aged 39, is vice president of Future Land Holdings. Ms. Guo joined the Group in 2007, and worked successively as sales manager and assistant general manager of marketing and sales department, assistant general manager, deputy general manager and general manager of Nanjing Branch of Jiangsu Future Land, and general manager of marketing and sales center. Prior to joining the Group, Ms. Guo served as manager assistant of operating department of Jiangsu Yongji Property Management Co., Ltd. ( ) from 2000 to 2002, and project and sales manager of Jiangsu Liangjiweiye Real Estate Investment and Consulting Co., Ltd. ( ) from 2002 to Ms. Guo graduated from Hehai University () in July Future Land Development Holdings Limited 65

67 DIRECTORS AND SENIOR MANAGEMENT Zhou Kejie ( ), aged 41, is a vice president of Future Land Holdings. Mr. Zhou joined the Group in 1996, graduated from Zhongnan University () of Economics and Law. He has served as the general manager of the cost management department at Jiangsu Future Land since 2007, as the assistant president of Jiangsu Future Land since 2012 and the vice president of Jiangsu Future Land since 2013, during which he was in charge of various functional management tasks including cost, construction and technology Yan Zheng (), aged 39 is a vice president of Future Land Holdings. Mr. Yan joined the Group in 2000, and successively served as the vice general manager and general manager of Jiangsu Future Land, and held the posts of the assistant president and the general manager of the company in Suzhou of Jiangsu Future Land between May 2010 and July Mr. Yan graduated from Central China Normal University ( ) in June 2000 with a bachelor degree in Economics and from the Executive MBA Program of Guanghua School of Management of Peking University () in July Future Land Development Holdings Limited

68 REPORT OF THE DIRECTORS The Board is pleased to present its report together with the audited consolidated financial statements of the Group for the year ended 31 December PRINCIPAL ACTIVITIES The principal activities of the Group are property development, property investment and commercial property management in China F-15 / An analysis of the Group s revenue for the year ended 31 December 2016 by principal activities is set out in note 26 to the consolidated financial statements. RESULTS The results of the Group for the year ended 31 December 2016 are set out in the consolidated statement of income on page F-15 of this annual report. KEY FINANCIAL PERFORMANCE INDICATORS The financial key performance indicators of the Group for the year is set out in the sections of financial summary/financial review and financial highlights of this annual report. BUSINESS REVIEW AND OUTLOOK The business review and outlook of the Group for the year is set out in the sections of Chairman s Statement and Management Discussion and Analysis of this annual report. SUBSIDIARIES Details of the subsidiaries of the Company as at 31 December 2016 are set out in note 17 to the consolidated financial statements. PRINCIPAL RISKS AND UNCERTAINTIES The PRC property market is volatile and may experience undersupply or oversupply of property units and significant property price fluctuations. The Group s business depends and will continue to depend on the growth of the economy in the PRC. A significant downturn in the PRC economy could adversely affect the demand for commercial and residential properties. The PRC central and local governments frequently adjust monetary, fiscal or other economic policies to prevent and curtail the overheating of the economy, which may affect the PRC property market. Such policies may lead to changes in market conditions, including price instability and an imbalance of supply and demand in respect of commercial and residential properties, which may materially and adversely affect the Group s business and financial condition. Future Land Development Holdings Limited 67

69 REPORT OF THE DIRECTORS The property market in the Yangtze River Delta and major cities along the Shanghai-Nanjing Economic Corridor has been highly competitive in recent years. Property developers from the PRC and overseas have entered the property development markets in the Yangtze River Delta and major cities along the Shanghai-Nanjing Economic Corridor where the Group has operations or where the Group may expand into. Many of the Group s competitors, including overseas listed foreign developers and top-tier domestic developers, may have more financial or other resources than the Group and may be more sophisticated than the Group in terms of engineering and technical skills. Competition among property developers may cause an increase in land costs and raw material costs, shortages in quality construction contractors, surplus in property supply leading to property price decline, further delays in issuance of governmental approvals, and higher costs to attract or retain talented employees. Moreover, property markets across the PRC are influenced by various other factors, including changes in economic conditions, banking practices and consumer sentiment. COMPLIANCE WITH RELEVANT LAWS AND REGULATIONS The PRC property market is heavily regulated and subject to frequent introduction of new regulations, including further measures by the PRC government to slow down the growth of the property sector, which may adversely affect property developers. The PRC government exerts considerable direct and indirect influence on the growth and development of the PRC property market through industry policies and other economic measures such as setting interest rates, controlling the supply of credit by changing bank reserve ratios and implementing lending restrictions, increasing tax and duties on property transfers and imposing foreign investment and currency exchange restrictions. From 2004 to 2016, the PRC government introduced a series of regulations and policies designed to generally control the growth of the property market, including, among others: (i) (i) strictly enforcing the idle land related laws and regulations; (ii) (ii) restricting the grant or extension of revolving credit facilities to property developers that hold a large amount of idle land and vacant commodity properties; (iii) (iii) prohibiting commercial banks from lending funds to real estate developers with an internal capital ratio of less than certain prescribed percentage; and 68 Future Land Development Holdings Limited

70 REPORT OF THE DIRECTORS (iv) (iv) restricting PRC commercial banks from granting loans to property developers for the purpose of paying land grant premiums. In particular, the PRC government also introduced the following policies, among others, to specifically control the growth of the residential property market: (i) (i) limiting the maximum amount of monthly mortgage and the maximum amount of total monthly debt service payments of an individual borrower; (ii) (ii) imposing a business tax levy on the sales proceeds for secondhand transfers subject to the length of holding period and type of properties; (iii) (iii) increasing the minimum amount of down payment of the purchase price of the residential property of a family; (iv) (iv) tightening the availability of individual housing loans in the property market to individuals and their family members with more than one residential property; and (v) (v) limiting the availability of individual housing provident fund loans for the purchase of second (or more) residential properties by labourers and their family members. These measures resulted in downward pricing pressures on the PRC property market and low transaction volumes in recent years. The PRC government may implement further tightening measures to restrain the PRC property market at the national, provincial, municipal and/or local level, which may lead to the declining trends in transaction volume and selling prices of properties in the PRC, and as a result, the Group s financial condition and results of operations may be affected. Future Land Development Holdings Limited 69

71 REPORT OF THE DIRECTORS ENVIRONMENTAL POLICIES AND PERFORMANCE Property developers in China are subject to a number of environmental laws and regulations including the Environment Protection Law of the PRC (), the Prevention and Control of Noise Pollution Law of the PRC ( ), the Environmental Impact Assessment Law ( ), and Administrative Regulations on Environmental Protection in relation to Construction Projects (). The Group is subject to these laws and regulations concerning the protection of health and environment. As required by PRC laws, independent environmental consultants have conducted environmental impact assessments at all of construction projects and environmental impact assessment documents were submitted to the relevant government authorities for approval before commencement of construction. The local authorities may request a developer to submit the environmental impact documents, issue orders to suspend the construction and impose a penalty for a project where environmental impact assessment documents have not been approved before commencement of construction. For the year ended 31 December 2016, no fines or penalties for non-compliance of PRC environmental laws and regulations were imposed on the Group. The Group is in compliance in all material respects with applicable environmental laws and regulations in China and has obtained all required approvals in relation to the environmental impact reports for property development projects. RELATIONSHIPS WITH STAKEHOLDERS For the year ended 31 December 2016, coping with the external and internal uncertainties and changes, the Group gained valuable experience, which will help the Group to face and overcome challenges of the future. The Group s sustainable development depends on the supports and efforts of all the parties involved, including the customers, the suppliers, the business partners and the Shareholders, and in particular the efforts and contributions and dedication of all staff of the Group. 70 Future Land Development Holdings Limited

72 REPORT OF THE DIRECTORS FINAL DIVIDEND The Board recommended the payment of a final dividend of RMB0.05 per share for the year ended 31 December 2016 (2015: RMB0.05) to the Shareholders The proposed final dividend will be paid before 30 June 2017 after approval by Shareholders at the forthcoming annual general meeting of the Company to be held on 18 May 2017 ( AGM ) , The proposed final dividend shall be declared in RMB and paid in Hong Kong dollars. The final dividend payable in Hong Kong dollars will be converted from RMB at the average middle rate of RMB to Hong Kong dollars as announced by the People s Bank of China for the business days during the period from 22 May 2017 to 26 May FINANCIAL SUMMARY/FINANCIAL REVIEW A financial summary and a financial review of the Group s results, assets and liabilities for the last five financial years are set out on page 5 of this annual report. This summary does not form part of the audited consolidated financial statements. USE OF NET PROCEEDS FROM THE INITIAL PUBLIC OFFERING The net proceeds from the initial public offering of the Company s shares (the Shares ) on The Stock Exchange of Hong Kong Limited (the Stock Exchange ) on 29 November 2012 (after deducting underwriting fees and related expenses) amounted to approximately HK$1,975.8 million. During the year ended 31 December 2016, such net proceeds have been used up and applied in the manner consistent with that set out in the Company s prospectus dated 19 November MAJOR CUSTOMERS AND SUPPLIERS The Group maintained good relationships with customers and suppliers. The major suppliers of the Group are construction material suppliers and construction contractors. The Group engages third-party contractors to carry out various services relating to property development projects, including design, pile setting, foundation building, construction, equipment installation, electromechanical and pipeline engineering, elevator installation and landscaping. The Group generally selects thirdparty contractors through a tender process and endeavor to engage companies with a strong reputation and track record, high performance reliability and adequate financial resources. Future Land Development Holdings Limited 71

73 REPORT OF THE DIRECTORS % % 30% For the year ended 31 December 2016, purchases from the Group s five largest suppliers accounted for 35.4% (2015: 9.87%) of the Group s total purchases and the five largest suppliers of the Group accounted for less than 30% of the Group s purchases in the year % % 30% For the year ended 31 December 2016, the Group s sales to its five largest customers accounted for 1.40% (2015: 1.48%) of the Group s revenue and the five largest customers of the Group accounted for less than 30% of the Group s revenue in the year. 5%) F-17 F-1841 None of the Directors or any of their associates or any Shareholders (which, to the best knowledge of the Directors, own more than 5% of the number of issued shares) had any interest in the Group s five largest customers and suppliers. PROPERTY, PLANT AND EQUIPMENT Details of movements in the property, plant and equipment of the Group during the year ended 31 December 2016 are set out in note 6 to the consolidated financial statements. INVESTMENT PROPERTIES Details of movements in the investment properties of the Group during the year ended 31 December 2016 are set out in note 7 to the consolidated financial statements. SHARE CAPITAL Details of movements in the share capital of the Company during the year ended 31 December 2016 are set out in note 19 to the consolidated financial statements. RESERVES Details of movements in the reserves of the Group and the Company during the year ended 31 December 2016 are set out on pages F-17 to F-18 in the consolidated statement of changes in equity and in note 41 to the consolidated financial statements. 72 Future Land Development Holdings Limited

74 REPORT OF THE DIRECTORS DISTRIBUTABLE RESERVES As at 31 December 2016, the Company s reserves available for distribution, calculated in accordance with the provisions of Companies Law, Chapter 22 (Law 3 of 1961, as consolidated and revised) of the Cayman Islands (the Companies Law ), amounted to approximately RMB366.9 million (as at 31 December 2015: RMB331.2 million). BANK LOANS AND OTHER BORROWINGS Particulars of bank loans and other borrowings of the Company and the Group as at 31 December 2016 are set out in note 22 to the consolidated financial statements. EQUITY-LINKED AGREEMENTS Save for the Share Option Scheme as set out in the section of Share Option Scheme below, no equity-linked agreements were entered into by the Group, or existed during the year ended 31 December DIRECTORS The Directors during the year ended 31 December 2016 and up to the date of this report were: Executive Directors: Mr. WANG Zhenhua (Chairman, resigned as the chief executive officer on 7 January 2016) Mr. LV Xiaoping (Redesignated on 7 January 2016) Mr. LU Zhongming (Appointed on 7 January 2016) Mr. LIU Yuanman Mr. CHAN Wai Kin Mr. LIANG Zhicheng (Resigned on 7 January 2016) Non-executive Director: Mr. WANG Xiaosong Independent Non-executive Directors: Mr. CHEN Huakang Mr. ZHU Zengjin Mr. ZHONG Wei Mr. LIANG Zhicheng resigned as an executive Director and a member of the Nomination Committee on 7 January 2016 so as to devote more time for his responsibilities as the deputy general manager of Future Land Holdings. Future Land Development Holdings Limited 73

75 REPORT OF THE DIRECTORS In accordance with article of the Company s articles of association, Mr. LIU Yuanman, Mr. CHAN Wai Kin and Mr. ZHU Zengjin shall retire from office as Directors and being eligible, have offered themselves for re-election as Directors at the forthcoming AGM Details of the retiring Directors to be re-elected at the forthcoming AGM of the Company are set out in the circular to the Shareholders dated 11 April BOARD OF DIRECTORS AND SENIOR MANAGEMENT Biographical details of the Directors and senior management of the Group are set out on pages 59 to 66 of this annual report. CONFIRMATION OF INDEPENDENCE OF INDEPENDENT NON-EXECUTIVE DIRECTORS The Company has received an annual confirmation of independence pursuant to Rule 3.13 of the Listing Rules from each of the independent non-executive Directors and the Company considers such Directors to be independent for the year ended 31 December DIRECTORS SERVICE CONTRACTS AND LETTERS OF APPOINTMENT Each of Mr. WANG Zhenhua and Mr. LIU Yuanman has entered into a service agreement with the Company on 6 November 2016 for a term of two years and may be terminated in accordance with the respective terms of the service agreements. Mr. WANG Xiaosong has entered into an appointment letter with the Company for a term of three years commencing from 18 October 2015, and may be terminated in accordance with the terms of the appointment letter. Mr. LV Xiaoping and Mr. LU Zhongming have entered into appointment letters respectively with the Company for a term of three years commencing from 7 January 2016, and may be terminated in accordance with the terms of the appointment letter. Mr. CHAN Wai Kin has entered into an appointment letter with the Company for a term of three years commencing from 30 March Each of the independent non-executive Directors (save for Mr. ZHONG Wei) has signed a letter of appointment with the Company on 6 November 2016 for a term of two years commencing from 6 November Mr. ZHONG Wei has signed a letter of appointment with the Company for an initial term of two years commencing from 3 December None of the Directors has a service contract which is not terminable by the Group within one year without payment of compensation (other than statutory compensation). 74 Future Land Development Holdings Limited

76 REPORT OF THE DIRECTORS (1) (a) DIRECTORS INTERESTS IN TRANSACTIONS, ARRANGEMENTS OR CONTRACTS Save as disclosed in the section headed Connected Transactions and Continuing Connected Transactions in this Report of the Directors, there was no transaction, arrangement or contract of significance subsisting during or at the end of the financial year with any member of the Group, the Company s fellow subsidiaries or its parent company as the contracting party and in which a Director or an entity connected with the Director is or was materially interested, either directly or indirectly. PERMITTED INDEMNITY PROVISION The Company has arranged for appropriate insurance cover for Directors and officers liabilities in respect of legal actions against its Directors and senior management arising out of corporate activities. The permitted indemnity provision is in force for the benefit of the Directors as required by section 470 of the Companies Ordinance (Chapter 622 of the laws of Hong Kong) when the Report of the Board of the Directors prepared by the Directors is approved in accordance with section 391(1) (a) of the Companies Ordinance. MANAGEMENT CONTRACTS No contracts concerning the management and administration of the whole or any substantial part of the business of the Company were entered into or existed during the year ended 31 December EMOLUMENT POLICY A Remuneration Committee was set up for reviewing the Group s emolument policy and structure for all remuneration of the Directors and senior management of the Group, having regard to the Group s operating results, individual performance of the Directors and senior management and comparable market practices. The Company has adopted a pre-ipo share award scheme (the Pre- IPO Share Award Scheme ) and a share option scheme (the Share Option Scheme ) as incentive to eligible employees, details of the schemes are set out in the section headed Pre-IPO Share Award Scheme and Share Option Scheme below, respectively. Future Land Development Holdings Limited 75

77 REPORT OF THE DIRECTORS 30 REMUNERATION OF DIRECTORS AND FIVE INDIVIDUALS WITH HIGHEST EMOLUMENTS Details of the emoluments of the Directors and five highest paid individuals are set out in note 30 to the consolidated financial statements B No Director has waived or has agreed to waive any emoluments during the year ended 31 December CHANGES TO INFORMATION IN RESPECT OF DIRECTORS Pursuant to Rule 13.51B of the Listing Rules, the changes in Directors information during the year ended 31 December 2016 are set out below Mr. LV Xiaoping has been redesignated from a non-executive Director to an executive Director and appointed as the chief executive officer of the Company with effect from 7 January Mr. LU Zhongming has been appointed as an executive Director and a member of the Nomination Committee with effect from 7 January Mr. WANG Zhenhua has resigned as the chief executive officer of the Company with effect from 7 January Mr. LIANG Zhicheng has resigned as an executive Director and a member of the Nomination Committee with effect from 7 January (2)(a) (e) (g) Save as disclosed above, during the year ended 31 December 2016, there were no changes to information which are required to be disclosed and had been disclosed by Directors pursuant to paragraphs (a) to (e) and (g) of Rule 13.51(2) of the Listing Rules. 76 Future Land Development Holdings Limited

78 REPORT OF THE DIRECTORS XV (i) XV7 8 (ii) 352 (iii) DIRECTORS AND CHIEF EXECUTIVE S INTERESTS AND SHORT POSITION IN SHARES, UNDERLYING SHARES AND DEBENTURES As at 31 December 2016, the interests and short positions of the Directors and the chief executive of the Company in the shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the Securities and Futures Ordinance ( SFO )) (i) which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which were taken or deemed to have under such provisions of the SFO), or (ii) which were required, pursuant to section 352 of the SFO, to be entered into the register maintained by the Company, or (iii) which were required to be notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers (the Model code ) were as follows: (i) (i) Interest in Shares of the Company Number of ordinary Shares Name of Directors Nature of interest held Approximate percentage of shareholding (2) 4,105,450,000 (L) 72.56% WANG Zhenhua Founder of a discretionary trust (2) 4,776,000 (L) 0.08% LIU Yuanman Beneficial owner 12,000,000 (L) 0.21% LV Xiaoping Beneficial owner 6,000,000 (L) 0.11% WANG Xiaosong Beneficial owner 5,000,000 (L) 0.09% LU Zhongming Beneficial owner (3) 300,000 (L) 0.01% CHAN Wai Kin Interest of spouse (3) Notes: (1) L (1) The letter L denotes the long position in Shares. (2) Hua Sheng Hua Sheng Standard Chartered Trust (Singapore) Limited 4,105,450,000 (2) Mr. WANG Zhenhua is the founder of the Hua Sheng Trust, through which Standard Chartered Trust (Singapore) Limited held long position in 4,105,450,000 Shares through its controlled corporations in its capacity as trustee , ,000 (3) Such 300,000 Shares are held by Ms. CHAN Wing Yan, the spouse of Mr. CHAN Wai Kin, Accordingly, Mr. CHAN Wai Kin was deemed to be interested in such 300,000 Shares. Future Land Development Holdings Limited 77

79 REPORT OF THE DIRECTORS XV XV23 Save as disclosed above, as at 31 December 2016, none of the Directors and the chief executive of the Company had or was deemed to have any interest or short position in the shares, underlying shares or debentures of the Company or its associated corporations (within the meaning of Part XV of the SFO) that was required to be recorded in the register of the Company required to be kept under Section 352 of the SFO, or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code. DIRECTORS RIGHTS TO ACQUIRE SHARES OR DEBENTURES Save as otherwise disclosed in this report, no time during the year ended 31 December 2016 were rights to acquire benefits by means of the acquisition of Shares in or debentures of the Company granted to any Directors or their respective spouse or children under 18 years of age, or were any such rights exercised by them; or was the Company and any of its subsidiaries a party to any arrangement to enable the Directors, or their respective spouse or children under 18 years of age, to acquire such rights in any other body corporate. SUBSTANTIAL SHAREHOLDERS INTERESTS AND SHORT POSITIONS IN SHARES AND UNDERLYING SHARES As at 31 December 2016, to the best knowledge of the Directors, the following persons (not being a Director or chief executive of the Company) had interests or short positions in the Shares or underlying Shares which fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO as recorded in the register required to be kept by the Company pursuant to section 336 of the SFO: Number of ordinary Name of Substantial Shareholders Capacity/Nature of interest Shares held Approximate percentage of shareholding Standard Chartered Trust (Singapore) 4,105,450,000 (L) 72.56% Limited (2) Standard Chartered Trust (Singapore) Trustee Limited (2) SCTS Capital Pte. Ltd. (2) 4,105,450,000 (L) 72.56% SCTS Capital Pte. Ltd. (2) Nominee Infinity Fortune Development Limited (2) 4,105,450,000 (L) 72.56% Infinity Fortune Development Limited (2) Interest in a controlled corporation First Priority Group Limited (2) 4,105,450,000 (L) 72.56% First Priority Group Limited (2) Interest in a controlled corporation (3) 4,105,450,000 (L) 72.56% Wealth Zone Hong Kong Investments Limited (3) Beneficial owner 78 Future Land Development Holdings Limited

80 REPORT OF THE DIRECTORS (1) L (2) Standard Chartered Trust (Singapore) Limited Hua Sheng SCTS Capital Pte. Ltd. Infinity Fortune Development Limited 100% Infinity Fortune Development LimitedFirst Priority Group Limited 100% (3) First Priority Group Limited 100% Notes: (1) The letter L represents the long position in Shares. (2) Standard Chartered Trust (Singapore) Limited, as trustee of the Hua Sheng Trust, which was established by Mr. WANG Zhenhua as settlor in favour of his family members, held 100% of the issued share capital of Infinity Fortune Development Limited through its nominee SCTS Capital Pte. Ltd., which in turn held 100% of the issued share capital of First Priority Group Limited. (3) Wealth Zone Hong Kong Investments Limited is held as to 100% of its issued share capital by First Priority Group Limited XV Save as disclosed above, and as at 31 December 2016, the Directors were not aware of any persons (who were not Directors or chief executive of the Company) who had an interest or short position in the Shares or underlying Shares of the Company which would fall to be disclosed under Divisions 2 and 3 of Part XV of the SFO, or which would be required, pursuant to Section 336 of the SFO, to be entered in the register referred to therein. CONTROLLING SHAREHOLDERS INTERESTS IN CONTRACTS OF SIGNIFICANCE Save as disclosed in the section headed Connected Transactions and Continuing Connected Transactions in this Report of the Directors, no controlling Shareholders or its subsidiary had a material interest, either directly or indirectly, in any contract of significance, whether for the provision of services or otherwise, to the business of the Group to which the Company or any of its subsidiaries was a party during the year ended 31 December PURCHASE, SALE OR REDEMPTION OF THE LISTED SECURITIES During the year ended 31 December 2016, neither the Company nor any other subsidiary or controlling company or subsidiary of the controlling company have purchased, sold or redeemed any of the Company s listed securities. PRE-EMPTIVE RIGHTS There are no provisions for pre-emptive rights under the Company s articles of association or the Companies Law of the Cayman Islands where the Company was incorporated, which would oblige the Company to offer new Shares on a pro rata basis to existing Shareholders. Future Land Development Holdings Limited 79

81 REPORT OF THE DIRECTORS NON-COMPETITION UNDERTAKING Each of Mr. WANG Zhenhua and Wealth Zone Hong Kong Investments Limited (the Controlling Shareholders ) has executed a deed of non-competition through which they have irrevocably and unconditionally warranted and undertaken to the Company not to, whether directly or indirectly or as principal or agent, and whether on its/his own account or with each other or in conjunction with or on behalf of any person, firm or company or through any entities (except in or through any subsidiary of the Company) engage in businesses that are in competition with the Group The Controlling Shareholders have confirmed in writing to the Company of their compliance with the deed of non-competition for disclosure in this annual report for the year ended 31 December A The independent non-executive Directors have also reviewed the compliance by each of the Controlling Shareholders with the undertakings in the deed of non-competition during the year ended 31 December The independent non-executive Directors have confirmed that, as far as they can ascertain, there is no breach by any of the Controlling Shareholders of the undertakings in the deed of noncompetition given by them. DIRECTORS INTEREST IN COMPETING BUSINESS Save as disclosed in this annual report, as at 31 December 2016, none of the Directors or their respective associates had engaged in or had any interest in any business which competes or may compete with the businesses of the Group. CONNECTED TRANSACTIONS AND CONTINUING CONNECTED TRANSACTIONS Save as disclosed below, the Board confirmed that none of the related party transactions set out in note 38 to the consolidated financial statements constituted non-exempt connected transactions or continuing connected transactions under Chapter 14A of the Listing Rules. Save as disclosed below, for the year ended 31 December 2016, the Group had not entered into any other connected transactions or continuing connected transactions which are required to be disclosed in this annual report pursuant to the Listing Rules. 80 Future Land Development Holdings Limited

82 REPORT OF THE DIRECTORS ,000,000 14A Hua Sheng 5% 25% 14A A Connected Transactions On 1 April 2016 (after trading hours), Hong Kong Chuangzhi Development Limited (), ( Chuangzhi ), being an indirect wholly-owned subsidiary of the Company, entered into an equity transfer agreement (the Equity Transfer Agreement ) with Wealth Zone Hong Kong Investments Limited ( ) ( Wealth Zone ) and Changzhou Chuangyue Consultancy Co., Ltd.* () ( Changzhou Chuangyue ), pursuant to which Chuangzhi conditionally agreed to sell and Wealth Zone conditionally agreed to purchase the entire equity interest in Changzhou Chuangyue at a total consideration of RMB320 million. Tibet Future Land Property Management Services Co., Ltd.* ( ) ( Future Land Property Services ) was controlled by Changzhou Chuangyue. Upon completion, Changzhou Chuangyue ceased to be a subsidiary of the Company. Wealth Zone is a controlling Shareholder and therefore is a connected person of the Company under Chapter 14A of the Listing Rules. Wealth Zone is beneficially owned by Hua Sheng Trust, a discretionary trust set up by Mr. WANG Zhenhua, a controlling shareholder, an executive Director and the chairman of the Company, in favour of his family members, and Mr. WANG Xiaosong, an non-executive Director and the son of Mr. WANG Zhenhua. Therefore, Mr. WANG Zhenhua and Mr. WANG Xiaosong are associates of Wealth Zone and are considered to have material interests in the Equity Transfer Agreement and the transactions contemplated thereunder. As the applicable percentage ratios (as defined under the Listing Rules) in respect of the Equity Transfer Agreement exceed 5% but are less than 25%, the Equity Transfer Agreement constituted a connected transaction for the Company, which is subject to, among other things, the independent shareholders approval requirement under Chapter 14A of the Listing Rules. For further details, please refer to the announcement and the circular published by the Company on 1 April and 18 April 2016, respectively. On 19 August 2016, Future Land Holdings, a subsidiary of the Company and a company established in the PRC whose shares are listed on the Shanghai Stock Exchange, conditionally adopted the first phase of the restricted share incentive scheme (the Scheme ) and approved the proposal in respect of the grant of the restricted shares of Future Land Holdings (the Restricted Shares ) to the participants in accordance with the terms of Scheme. Mr. LIU Yuanman is a Director, Mr. LIANG Zhicheng was a Director of the Company in the past 12 months and a director of Future Land Holdings and Mr. CHEN Deli is a director of Future Land Holdings and hence connected persons of the Company. The grant of the Restricted Shares to each of Mr. LIU Yuanman, Mr. LIANG Zhicheng and Mr. CHEN Deli constitutes a non-exempt connected transaction of the Company. For further details, please refer to the announcements published by the Company on 30 September 2016 and 24 October 2016 and the circular published by the Company on 4 November Future Land Development Holdings Limited 81

83 REPORT OF THE DIRECTORS ,000, ,822,000 Continuing Connected Transactions The Company has been engaged with Future Land Property Services as part of the ordinary and usual course of business to provide residential property management services. After the disposal of Changzhou Chuangyue, Future Land Property Services, together with Changzhou Chuangyue, ceased to be a subsidiary of the Company. As the Company expected to continue to engage Future Land Property Services to provide residential property management services, the property services framework agreement ( 2016 Property Services Framework Agreement ) was entered into between Future Land Holdings and Future Land Property Services on 29 July 2016 (after trading hours) in relation to provision of residential property management services by Future Land Property Services for a term of one year from 1 January 2016 to 31 December 2016 subject to the annual cap of RMB175 million. During the period from 1 June 2016 to 31 December 2016, the expenses incurred by the Group for accepting residential property management services provided by Future Land Property Services under the 2016 Property Services Framework Agreement were approximately RMB90,822, ,000,000 As the 2016 Property Services Framework Agreement expired on 31 December 2016, the renewed property services framework agreement ( 2017 Property Services Framework Agreement ) was entered into between Future Land Holdings and Future Land Property Services on 15 December 2016 (after trading hours) in relation to provision of residential property management services by Future Land Property Services for a term of one year from 1 January 2017 to 31 December 2017 subject to the annual cap of RMB199 million A Future Land Property Services was controlled by Mr. WANG Zhenhua, a controlling Shareholder and an executive Director. Accordingly, Future Land Property Services is a connected person of the Company and the entering into of the 2016 Property Services Framework Agreement and the 2017 Property Services Framework Agreement and the transactions contemplated thereunder constitute continuing connected transactions for the Company under Chapter 14A of the Listing Rules % 5% 14A.76(2) 14A As each of the applicable percentage ratios (other than profits ratio) in respect of the transactions under the 2017 Property Services Framework Agreement is more than 0.1% but less than 5% on an annual basis, the transactions contemplated thereunder are subject to the reporting and announcement requirements set out in Rule 14A.76(2) of the Listing Rules and exempt from the independent shareholders approval requirement under Chapter 14A of the Listing Rules. For further details, please refer to the announcements published by the Company on 29 July 2016, 5 August 2016 and 15 December 2016, respectively. 82 Future Land Development Holdings Limited

84 REPORT OF THE DIRECTORS In order to ensure that the terms of the residential property management services provided by Future Land Property Services are not less favourable than those available from independent third parties, the Group has adopted the following measures: (i) (i) where applicable and commercially sensible, the Group will continue to request Future Land Property Services to provide the residential property management services through a bidding process, on arm s length basis and on the best available terms, with reference to the prevailing market prices; (ii) (ii) the relevant department of Future Land Holdings in charge of residential property management of Future Land Holdings will conduct research on the service fees of relevant comparable services provided by at least 3 property management companies in the market based on the type of development projects and the scope of services quarterly for ascertaining that the range of the service fees of the residential property management services provided by Future Land Property Services is mark to market; (iii) 2017 (iii) as part of the internal control procedures, the implementation of the 2017 Property Services Framework Agreement and the actual number and amount of services provided by Future Land Property Services will be monitored and reviewed by the Board (including the independent non-executive Directors) and the senior management on a regular basis, with reference to terms of similar transactions with the independent third parties; (iv) (iv) the Director(s) and/or the Shareholder(s) with an interest in the relevant transaction(s) shall abstain from voting in respect of the resolution(s); (v) 14A (v) the Group shall use the best endeavour to comply with the relevant reporting, annual review, announcement and independent shareholders approval requirements under Chapter 14A of the Listing Rules for the continuing connected transactions; (vi) 14A.56 (vi) the Company will engage its auditor to report on the continuing connected transaction every year in accordance with Rule 14A.56 of the Listing Rules; and (vii) (vii) the Group will duly disclose in the annual reports and accounts the transactions of provision of residential property management services by Future Land Property Services during each financial period, together with the conclusions (with basis) drawn by the independent non-executive Directors whether the transactions are conducted on normal commercial terms, fair and reasonable, and in the interests of the Company and the Shareholders as a whole. Future Land Development Holdings Limited 83

85 REPORT OF THE DIRECTORS The Group has followed the price policies and payment terms, as disclosed in the announcements published by the Company on 29 July 2016, 5 August 2016 and 15 December 2016, of the continuing connected transactions conducted during the year. The internal audit department of the Company reviewed the continuing connected transactions and the adequacy and effectiveness of the internal control procedures, and provided the findings to the independent non-executive Directors to assist them in performing their annual reviews. The independent non-executive Directors also made appropriate enquiries with the management to ensure that they have sufficient information to review the transactions and the internal control procedures. All independent non-executive Directors confirmed that the transactions were entered into: in the ordinary and usual course of business of the Group; under normal commercial terms or not less favourable terms that the Group receives or provides services from an independent third party or obtains from an independent third party; and in accordance with the agreements related to the above continuing connected transactions, the terms of which are fair and reasonable and for the overall benefit of the Shareholders. 14A The Company has engaged its auditor to report on the disclosed continuing connected transactions of the Group for the year ended 31 December 2016 in accordance with Rule 14A.56 of the Listing Rules. Based on the work performed, the auditor of the Company confirmed to the Board that nothing has come to their attention that causes them to believe that the disclosed continuing connected transactions: have not been approved by the Board; were not entered into, in all material respects, in accordance with the relevant agreements governing the transactions; and together with the amounts before such transactions became continuing connected transactions, have exceeded the annual cap as set by the Company for the year ended 31 December 2016 in its announcement dated 29 July Future Land Development Holdings Limited

86 REPORT OF THE DIRECTORS % Wellink Global (PTC) Limited Dynasty Snow (PTC) Ltd. 181,050, ,050, % 3. PRE-IPO SHARE AWARD SCHEME The Company adopted a Pre-IPO Share Award scheme on 12 September Objective The Company adopted the Pre-IPO Share Award Scheme to recognize the contribution of certain of our employees and officers, especially those whom we consider have contributed to the early development and growth of the Group, and to align their interests with those of the Shareholders. 2. Implementation Pursuant to the Pre-IPO Share Award Scheme, a total of current and former employees, officers and business partners of the Group (the Selected Persons ) were awarded Shares representing approximately 3.19% of the total issued share capital of the Company. At the direction of Wealth Zone Hong Kong Investments Limited, the Company issued at nominal value a total of 181,050,000 new Shares to Wellink Global (PTC) Limited and Dynasty Snow (PTC) Ltd. (the Trustees ), for the benefit of the Selected Persons. As of 31 December 2016, a total of 181,050,000 Shares (the Awarded Shares ), representing approximately 3.20% of the total issued share capital of the Company as at the date of this annual report, were granted to the Selected Persons and there was no outstanding unvested shares under the Pre-IPO Share Award Scheme. 3. Vesting of the Awarded Shares The vesting principles of the Pre-IPO Share Award Scheme are summarized as follows: The Selected Persons are not entitled to exercise or enjoy the rights to, or to transfer the Awarded Shares pending the vesting of the Awarded Shares. (i) (ii)(iii) Vesting period for a Selected Person is determined based on his or her (i) performance appraisal; (ii) length of service; and (iii) seniority (if applicable). Future Land Development Holdings Limited 85

87 REPORT OF THE DIRECTORS The Awarded Shares granted to any particular Selected Person will vest in four equal tranches on 31 December 2013, 2014, 2015 and 2016 (Note 1), respectively The first vesting date for all the relevant Selected Persons was 31 December The second vesting date for all the relevant Selected Persons was 31 December 2014, the third vesting date for all the relevant Selected Persons was 31 December 2015 and the fourth vesting date for all the relevant Selected Persons was 14 December 2016 (Note 1). The Selected Persons are not required to pay any consideration for the Awarded Shares for the purpose of vesting. Vesting period of a Selected Person is subject to postponement in the event of unsatisfactory work performance based on his or her annual performance appraisal (if applicable). Prior to vesting, the Selected Persons are not entitled to the voting rights to the Awarded Shares. All dividends declared and paid in respect of the Awarded Shares shall be held by the Trustees for the benefit of the respective Selected Person pending vesting. Note: (1) (1) Pursuant to the resolutions of the Shareholders dated 30 June 2012, the vesting period of the Awarded Shares awarded under the Pre-IPO Share Award Scheme was amended from four years from 2012 to 2015 to four years from 2013 to Future Land Development Holdings Limited

88 REPORT OF THE DIRECTORS SHARE OPTION SCHEME The Share Option Scheme conditionally adopted by the written resolutions of the Shareholders passed on 6 November Purpose The purpose of the Share Option Scheme is to enable the Company to grant options to eligible participants as incentives or rewards for their contribution or potential contribution to the Group Eligible Participants The Board may, at its discretion, offer to grant an option to subscribe for such number of new Shares as the Board may determine at an exercise price determined to: (i) (i) any full-time or part-time employees, executives or officers of the Company or any of its subsidiaries; (ii) (ii) any directors (including non-executive directors and independent non-executive directors) of the Company or any of its subsidiaries; (iii) (iii) any advisers, consultants, suppliers, customers and agents of the Company or any of its subsidiaries; and (iv) (iv) such other persons who, in the sole opinion of the Board, will contribute or have contributed to the Group. Future Land Development Holdings Limited 87

89 REPORT OF THE DIRECTORS % 566,800, % 3. Acceptance of an offer of options An option shall be deemed to have been granted and accepted by the grantee and to have taken effect when the duplicate offer document constituting acceptances of the options duly signed by the grantee, together with a remittance in favour of the Company of HK$0.10 by way of consideration for the grant thereof, is received by the Company on or before the relevant acceptance date. Such payment shall in no circumstances be refundable. Any offer to grant an option to subscribe for Shares may be accepted in respect of less than the number of Shares for which it is offered provided that it is accepted in respect of a board lot for dealing in Shares on the Stock Exchange or an integral multiple thereof and such number is clearly stated in the duplicate offer document constituting acceptance of the option. To the extent that the offer to grant an option is not accepted by any prescribed acceptance date, it shall be deemed to have been irrevocably declined. 4. Maximum number of Shares The maximum number of Shares in respect of which options may be granted (including Shares in respect of which options, whether exercised or still outstanding, have already been granted) under the Share Option Scheme and under any other share option schemes of the Company must not in aggregate exceed 10% of the total number of Shares in issue on the date of Listing (but taking no account of any Shares which may be issued under the exercise of the Over-allotment Option (as defined in the Prospectus)), being 566,800,000 Shares (the Scheme Limit ). 5. Maximum number of options to any one individual The total number of Shares issued and which may fall to be issued upon exercise of the options granted under the Share Option Scheme and any other share option schemes of the Company (including both exercised, outstanding options and Shares which were the subject of options which have been granted and accepted under the Share Option Scheme or any other scheme of the Company but subsequently cancelled (the Cancelled Shares ) to each eligible participant in any 12-month period up to the date of grant shall not exceed 1% of the Shares in issue. 88 Future Land Development Holdings Limited

90 REPORT OF THE DIRECTORS Price of Shares The subscription price of a Share in respect of any particular option granted under the Share Option Scheme shall be such price as the Board in its absolute discretion shall determine, save that such price will not be less than the highest of: (i) (i) the closing price of the Shares as stated in the Stock Exchange s daily quotation sheets on the date of grant, which must be a day on which the Stock Exchange is open for the business of dealing in securities; (ii) (ii) the average of the closing prices of the Shares as stated in the Stock Exchange s daily quotation sheets for the five business days immediately preceding the date of grant; and (iii) (iii) the nominal value of a Share (i) (ii) 7. Granting options to connected persons Any grant of options to a director, chief executive or substantial shareholder of the Company or any of their respective associates is required to be approved by the independent non-executive Directors (excluding any independent non-executive Director who is the grantee of the options). 8. Restrictions on the times of grant of options A grant of options may not be made after a price sensitive event has occurred or a price sensitive matter has been the subject of a decision until such price sensitive information has been announced. In particular, no options may be granted during the period commencing one month immediately preceding the earlier of (i) the date of the Board meeting; and (ii) the deadline for the Company to publish an announcement of the results for any year, or half-year, or quarterly or other interim period and ending on the date of actual publication of the results announcement. Future Land Development Holdings Limited 89

91 REPORT OF THE DIRECTORS Rights are personal to grantee No grantee shall in any way sell, transfer, charge, mortgage, encumber or create any interest (legal or beneficial) in favour of any third party over or in relation to any option or attempt so to do (save that the grantee may nominate a nominee in whose name the Shares issued pursuant to the Share Option Scheme may be registered). Any breach of the foregoing shall entitle the Company to cancel any outstanding options or any part thereof granted to such Grantee. 10. Time of exercise of option and duration of the Share Option Scheme An option may be exercised in accordance with the terms of the Share Option Scheme at any time after the date upon which the option is deemed to be granted and accepted and prior to the expiry of 10 years from that date. The period during which an option may be exercised will be determined by the Board in its absolute discretion, save that no option may be exercised more than 10 years after it has been granted. No option may be granted more than 10 years after the date of approval of the Share Option Scheme by the then sole Shareholder of the Company (the Adoption Date ). Subject to earlier termination by the Company in general meeting or by the Board, the Share Option Scheme shall be valid and effective for a period of 10 years from the Adoption Date. A grantee may be required to hold an option for a minimum period and/or achieve any performance targets as the Board may then specify before any options granted under the Share Option Scheme can be exercised. 10% 30% The Company shall be entitled to issue options, provided that the total number of Shares which may be issued upon exercise of all options to be granted under the Share Option Scheme does not exceed 10% of the Shares in issue on the date of Listing. The Company may at any time refresh such limit, subject to the Shareholders approval and issue of a circular in compliance with the Listing Rules, provided that the total number of Shares which may be issued upon exercise of all outstanding options granted and yet to be exercised under all the share option schemes of the Company does not exceed 30% of the Shares in issue at the time. 90 Future Land Development Holdings Limited

92 REPORT OF THE DIRECTORS As at 31 December 2016, no option under the Share Option Scheme has been granted by the Company. 566,800, % % % 50.1% 101% As at the date of this report, the total number of Shares available for issue under the Share Option Scheme was 566,800,000, representing approximately 10.02% of the Company s issued share capital, and the remaining life of the Share Option Scheme was four years and seven months. CHARITABLE DONATIONS During the year ended 31 December 2016, the Group made charitable and other donations of approximately RMB26.2 million (2015: RMB3.9 million). POST BALANCE SHEET EVENTS The material post balance sheet events are disclosed in note 43 of the audited consolidated financial statements. AUDIT COMMITTEE The Audit Committee had reviewed together with the management and external auditor the accounting principles and policies adopted by the Group and the audited consolidated financial statements for the year ended 31 December LOAN AGREEMENTS WITH COVENANTS RELATING TO SPECIFIC PERFORMANCE OF THE CONTROLLING SHAREHOLDERS The Group successfully issued a tranche of two-year USD250 million 6.25% senior notes in November 2015 and a tranche of three-year USD350 million 5.0% senior notes in February 2017 (the Notes ), respectively, pursuant to which the Company will make an offer to repurchase all outstanding Notes at a purchase price equal to 101% of the principal amount of the Notes, plus accrued and unpaid interest, if any, to (but not including) the repurchase date, upon the occurrence of, among other things, the Permitted Holders (defined below) are the beneficial owners of less than 50.1% of the total voting power of the voting stock of the Company accompanied by a rating decline. Such requirements as to the maintenance of the level of ownership in and composition of the members of the Board result in the disclosure obligation under Rule of the Listing Rules. Future Land Development Holdings Limited 91

93 REPORT OF THE DIRECTORS In this paragraph, Permitted Holders means any or all of the following: (i) (i) Mr. WANG Zhenhua; (ii) (ii) any affiliate of Mr. WANG Zhenhua; (iii) (iii) the trust of Mr. WANG Zhenhua or the legal representative thereof; and (iv) 80% (iv) any legal person both the capital stock and the voting stock of which (or in the case of a trust, the beneficial interests in which) are owned 80% or more by Mr. WANG Zhenhua or any of his affiliates BANKING FACILITY WITH SPECIFIC PERFORMANCE COVENANTS On 15 January 2016, the Company as borrower, and certain offshore subsidiaries of the Company as original guarantors, entered into the banking facility (the Banking Facility ) with Bank of China (Hong Kong) Limited as the lender The Banking Facility refers to a US$ currency term loan facility with a principal amount of US$150 million and a final maturity of 24 months after the first utilisation date. The Banking Facility will be used for refinancing and general corporate funding requirements of the Group. (i)( First Priority Group Limited Infinity Fortune Development Limited) 51% (ii) Pursuant to the Banking Facility, it requires that (i) the controlling Shareholders (including Wealth Zone, First Priority Group Limited, Infinity Fortune Development Limited and Mr. WANG Zhenhua) will maintain beneficial shareholding of not less than 51% of the entire issued share capital of the Company; and (ii) Mr. WANG Zhenhua shall remain as the chairman of the Board, otherwise it will constitute an event of default. Upon and at any time after the occurrence of an event of default, the lender may immediately cancel all or any part of their respective commitments and the outstanding amount under the Banking Facility together with interest accrued thereon may become immediately due and payable. CODE OF CONDUCT REGARDING DIRECTORS SECURITIES TRANSACTIONS The Company has adopted the Model Code as set out in Appendix 10 to the Listing Rules as its own code of conduct regarding Directors securities transactions. Having made specific enquiries with all the Directors, each of the Directors has confirmed that he has complied with the Model Code during the year ended 31 December Future Land Development Holdings Limited

94 REPORT OF THE DIRECTORS CORPORATE GOVERNANCE PRACTICES The Group is committed to maintaining high standards of corporate governance to safeguard the interests of the Shareholders and to enhance corporate value and accountability. The Company has adopted the Corporate Governance Code and Corporate Governance Report (the CG Code ) as set out in Appendix 14 of the Listing Rules as its own code of corporate governance. Save as disclosed below, the Company has complied with all applicable code provisions of the CG Code throughout the year ended 31 December The Company will continue to review and monitor its corporate governance practices to ensure compliance with the CG Code. A A Under code provision A.2.1 of the CG Code, the roles of chairman and chief executive officer should be separate and performed by different individuals. Under the organization structure of the Company from 1 to 7 January 2016, Mr. WANG Zhenhua was the Chairman of the Board and the chief executive officer. With Mr. WANG s extensive experience in the property industry, the Board considers that vesting the roles of chairman and chief executive officer in the same person is beneficial to the business prospects and management of the Group. The balance of power and authority is ensured by the operation of the senior management and the Board, which comprise experienced and high caliber individuals. The Board currently comprises five executive Directors, one non-executive Director and three independent nonexecutive Directors, and therefore has a fairly strong independence element in its composition. On 7 January 2016, Mr. WANG Zhenhua resigned as the chief executive officer of the Company and Mr. LV Xiaoping, an executive Director, has been appointed as the chief executive officer of the Company in place of Mr. WANG Zhenhua with an aim to achieve better corporate governance of the Company. Therefore, the Company has complied with code provision A.2.1 of the CG Code since 7 January CLOSURE OF THE REGISTER OF MEMBERS The register of members of the Company will be closed from Monday, 15 May 2017 to Thursday, 18 May 2017, both days inclusive, in order to determine the identity of the Shareholders who are entitled to attend the forthcoming AGM to be held on Thursday, 18 May In order to be eligible to attend and vote at the forthcoming AGM, all transfers accompanied by the relevant share certificates and transfer forms must be lodged with the Company s branch share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited, at Shops , 17/F, Hopewell Centre, 183 Queen s Road East, Wanchai, Hong Kong before 4:30 p.m. on Friday, 12 May Future Land Development Holdings Limited 93

95 REPORT OF THE DIRECTORS % The record date for qualifying to receive the proposed final dividend is Friday, 26 May In order to determine the rights of Shareholders entitled to receive the proposed final dividend, which is subject to the approval by Shareholders at the forthcoming AGM, the register of members of the Company will also be closed from Wednesday, 24 May 2017 to Friday, 26 May 2017, both days inclusive. In order to qualify for the proposed final dividend, all transfers accompanied by the relevant share certificates and transfer forms must be lodged with the Company s branch share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited, at Shops , 17/F, Hopewell Centre, 183 Queen s Road East, Wanchai, Hong Kong before 4:30 p.m. on Tuesday, 23 May SUFFICIENCY OF PUBLIC FLOAT Based on information publicly available to the Company and to the knowledge of the Directors, at least 25% of the Company s total issued share capital, being the prescribed minimum percentage of public float approved by the Stock Exchange and permitted under the Listing Rules, are held by the public at all times as of the date of this annual report AUDITOR PricewaterhouseCoopers has acted as auditor of the Company for the year ended 31 December PricewaterhouseCoopers shall retire in the forthcoming AGM and, being eligible, will offer themselves for re-appointment. A resolution for the reappointment of PricewaterhouseCoopers as auditor of the Company will be proposed at the forthcoming AGM. On behalf of the Board Mr. WANG Zhenhua Chairman Hong Kong, 24 February Future Land Development Holdings Limited

96 CORPORATE GOVERNANCE REPORT The Board is pleased to present this corporate governance report in the annual report of the Company for the year ended 31 December CORPORATE GOVERNANCE PRACTICES The Group is committed to maintaining high standards of corporate governance to safeguard the interests of Shareholders and to enhance corporate value and accountability. The Company has adopted the CG Code as its own code of corporate governance. Save for the deviation disclosed in this annual report, the Company has complied with the code provisions as set out in the CG Code for the year ended 31 December The Company will continue to review and enhance its corporate governance practices to ensure compliance with the CG Code. THE BOARD Responsibilities The Board is responsible for the overall leadership of the Group, oversees the Group s strategic decisions and monitors business and performance. The Board has delegated the authority and responsibility for day-to-day management and operation of the Group to the senior management of the Group. To oversee particular aspects of the Company s affairs, the Board has established three Board committees including the Audit Committee, the Remuneration Committee and the Nomination Committee (together, the Board Committees ). The Board has delegated to the Board Committees responsibilities as set out in their respective terms of reference. All Directors shall ensure that they carry out duties in good faith, in compliance with applicable laws and regulations, and in the interests of the Company and its Shareholders at all times. The Company has arranged appropriate liability insurance to indemnify the Group s Directors for their liabilities arising out of corporate activities. The insurance coverage will be reviewed on an annual basis. Future Land Development Holdings Limited 95

97 CORPORATE GOVERNANCE REPORT Board Composition The Board currently comprises five executive Directors, namely Mr. WANG Zhenhua, Mr. LV Xiaoping, Mr. LU Zhongming, Mr. LIU Yuanman and Mr. CHAN Wai Kin, one non-executive Director, namely Mr. WANG Xiaosong, and three independent non-executive Directors, namely Mr. CHEN Huakang, Mr. ZHU Zengjin and Mr. ZHONG Wei. The biographies of the Directors are set out under the section headed Directors and Senior Management of this annual report. The details of the service contract of the Directors are set up in the Report of the Directors of this annual report On 7 January 2016, the Company redesignated Mr. LV Xiaoping and appointed Mr. LU Zhongming as executive Directors. Biographical details of Mr. LV Xiaoping and Mr. LU Zhongming were set out under the section headed Directors and Senior Management of this annual report On 7 January 2016, Mr. LIANG Zhicheng resigned as an executive Director and a member of Nomination Committee (1) 3.10(2) 3.10A As disclosed in this annual report for the year ended 31 December 2016, the Board met the requirements of Rules 3.10(1) and 3.10(2) of the Listing Rules relating to the appointment of at least three independent non-executive Directors with at least one independent non-executive Director possessing appropriate professional qualifications or accounting or related financial management expertise and Rule 3.10A of the Listing Rules relating to the appointment of independent nonexecutive Directors representing at least one-third of the Board. 3.10A 3.10A Under Rule 3.10A of the Listing Rules, listed issuers are required to appoint independent non-executive Directors representing at least onethird of the Board. As disclosed in this annual report, the Company has three independent non-executive Directors currently representing onethird of the Board and therefore the Company has complied with Rule 3.10A of the Listing Rules. 96 Future Land Development Holdings Limited

98 CORPORATE GOVERNANCE REPORT A.5.6 Under code provision A.5.6 of the CG Code, listed issuers are required to adopt a board diversity policy. The Company has adopted a board diversity policy and therefore complied with this code provision. A summary of the board diversity policy is set out under Board Committees Nomination Committee below. The Company has received written annual confirmation from each independent non-executive Director of his independence pursuant to the requirements of the Listing Rules. The Company considers all independent non-executive Directors to be independent in accordance with the independence guidelines as set out in the Listing Rules. Mr. WANG Xiaosong is the son of Mr. WANG Zhenhua, the executive Director and controlling Shareholder. Save as disclosed in this annual report, none of the Directors has any personal relationship (including financial, business, family or other material/relevant relationship) with any other Director. All Directors, including independent non-executive Directors, have brought a wide spectrum of valuable business experience, knowledge and professionalism to the Board for its efficient and effective functioning. Independent non-executive Directors are invited to serve on the Audit Committee, the Remuneration Committee and the Nomination Committee. As regards the CG Code provision requiring Directors to disclose to the issuer the number and nature of offices held in public companies or organizations and other significant commitments as well as their identity and an indication of the time involved, all the Directors have agreed to disclose their commitments and any change to the Company in a timely manner. Future Land Development Holdings Limited 97

99 CORPORATE GOVERNANCE REPORT Induction and Continuous Professional Development Mr. LU Zhongming, as a newly appointed Director, were provided with necessary induction and information to ensure that they have a proper understanding of the Company s operations and businesses as well as their responsibilities under relevant statues, laws, rules and regulations. The Company also arranges regular seminars to provide all Directors with updates on latest development and changes in the Listing Rules and other relevant legal and regulatory requirements from time to time. The Directors are also provided with regular updates on the Company s performance, position and prospects to enable the Board as a whole and each Director to discharge their duties. The Joint Company Secretaries from time to time update and provide written training materials relating to the roles, functions and duties of a Director A During the year, each of the Directors, namely Mr. WANG Zhenhua, Mr. LIANG Zhicheng (resigned on 7 January 2016), Mr. LIU Yuanman, Mr. CHAN Wai Kin, Mr. LU Zhongming (appointed on 7 January 2016), Mr. LV Xiaoping, Mr. WANG Xiaosong, Mr. CHEN Huakang, Mr. ZHU Zengjin and Mr. ZHONG Wei, received and studied these training materials. The Company has received confirmation from all Directors of their respective training records for the year ended 31 December Chairman and Chief Executive Officer Under code provision A.2.1 of the CG Code, the roles of chairman and chief executive officer should be separate and performed by different individuals. Under the organization structure of the Company from 1 to 7 January 2016, Mr. WANG Zhenhua was the Chairman of the Board and the chief executive officer. With Mr. WANG s extensive experience in the property industry, the Board considered that vesting the roles of chairman and chief executive officer in the same person is beneficial to the business prospects and management of the Group. The check and balance of power and authority was ensured by the operation of the senior management and the Board, which comprised experienced and high caliber individuals for the year ended 31 December The Board comprised five executive Directors, one non-executive Director and three independent non-executive Directors for the year ended 31 December 2016 and therefore had a fairly strong independence element in its composition A.2.1 On 7 January 2016, Mr. WANG Zhenhua resigned as the chief executive officer of the Company and Mr. LV Xiaoping, an executive Director, has been appointed as the chief executive officer of the Company in place of Mr. WANG Zhenhua with an aim to achieve better corporate governance of the Company. Therefore, the Company has complied with code provision A.2.1 of the CG code since 7 January Future Land Development Holdings Limited

100 CORPORATE GOVERNANCE REPORT Appointment and Re-Election of Directors Each of Mr. WANG Zhenhua and Mr. LIU Yuanman has entered into a service agreement with the Company on 6 November 2016 for a term of two years commencing from 6 November 2016 and may be terminated in accordance with the respective terms of the service agreements Mr. LV Xiaoping has entered into a service contract with the Company for a term of three years commencing from 7 January 2016, and may be terminated in accordance with the terms of the appointment letter Mr. CHAN Wai Kin has entered into an appointment letter with the Company for a term of three years commencing from 30 March 2015, and may be terminated in accordance with the terms of the appointment letter Mr. WANG Xiaosong has entered into an appointment letter with the Company for a term of three years commencing from 18 October 2015, and may be terminated in accordance with the terms of the appointment letter Mr. LU Zhongming has entered into an appointment letter with the Company for a term of three years commencing from 7 January 2016, and may be terminated in accordance with the terms of the appointment letter Save for Mr. ZHONG Wei, each of the independent non-executive Directors has signed a letter of appointment with the Company on 6 November 2016, for a term of two years commencing from 6 November Mr. ZHONG Wei has signed a letter of appointment with the Company on 3 December 2016, for a term of two years commencing from 3 December None of the Directors has a service agreement which is not determinable by the Group within one year without payment of compensation (other than statutory compensation). Future Land Development Holdings Limited 99

101 CORPORATE GOVERNANCE REPORT In accordance with the Company s articles of association, all Directors are subject to retirement by rotation at least once every three years and any new Director appointed to fill a causal vacancy shall submit himself/ herself for election by Shareholders at the first general meeting of the Company after appointment and new Directors appointed as an addition to the Board shall submit himself/herself for re-election by Shareholders at the next following AGM of the Company after appointment. The procedures and process of appointment, re-election and removal of Directors are set out in the Company s articles of association. The Nomination Committee is responsible for reviewing the Board composition, monitoring the appointment, re-election and succession planning of Directors Board Meetings The Company adopted the practice of holding Board meetings regularly, at least four times a year, and at approximately quarterly intervals. Notices of not less than fourteen days are given for all regular Board meetings to provide all Directors with an opportunity to attend and include matters in the agenda for a regular meeting. For other Board and committee meetings, reasonable notice is generally given. The agenda and accompanying Board papers are despatched to the Directors or committee members at least three days before the meetings to ensure that they have sufficient time to review the papers and be adequately prepared for the meetings. When Directors or committee members are unable to attend a meeting, they will be advised of the matters to be discussed and given an opportunity to make their views known to the Chairman prior to the meeting. Minutes of meetings are kept by the Joint Company Secretaries with copies circulated to all Directors for information and records. Minutes of the Board meetings and committee meetings are recorded in sufficient detail the matters considered by the Board and the committees and the decisions reached, including any concerns raised by the Directors. Draft minutes of each Board meeting and committee meeting are sent to the Directors for comments within a reasonable time after the date on which the meeting was held. The minutes of the Board meetings are open for inspection by Directors. 100 Future Land Development Holdings Limited

102 CORPORATE GOVERNANCE REPORT For the year ended 31 December 2016, 11 Board meetings and 3 general meetings (AGM on 18 May 2016 and extraordinary general meetings on 4 May and 22 November 2016) were held and the attendance of the individual Directors at these meetings is set out in the table below: Directors Attended/Eligible to attend Board Meetings General Meeting Mr. WANG Zhenhua 11/11 3/ Mr. LIANG Zhicheng (resigned on 1/1 0/0 7 January 2016) Mr. LV Xiaoping (redesignated on 11/11 3/3 7 January 2016) Mr. LU Zhongming 11/11 3/3 (appointed on 7 January 2016) Mr. LIU Yuanman 11/11 3/3 Mr. CHAN Wai Kin 11/11 3/3 Mr. WANG Xiaosong 11/11 3/3 Mr. CHEN Huakang 11/11 3/3 Mr. ZHU Zengjin 11/11 3/3 Mr. ZHONG Wei 11/11 3/ Model Code for Securities Transactions The Company has adopted the Model Code as set out in Appendix 10 to the Listing Rules as its own code of conduct regarding Directors securities transactions. Having made specific enquiries with all the Directors, each of the Directors has confirmed that he has complied with the Model Code during the year ended 31 December During the year ended 31 December 2016, the Company has also adopted its own code of conduct regarding employees securities transactions on terms no less exacting than the standards set out in the Model Code for compliance by its relevant employees who are likely to be in possession of inside information of the Company in respect of their dealings in the Company s securities. Future Land Development Holdings Limited 101

103 CORPORATE GOVERNANCE REPORT Delegation by the Board The Board reserves for its decision all major matters of the Company, including approval and monitoring of all policy matters, overall strategies and budgets, internal control and risk management systems, material transactions (in particular those that may involve conflict of interests), financial information, appointment of Directors and other significant financial and operational matters. Directors could have recourse to seek independent professional advice in performing their duties at the Company s expense and are encouraged to access and to consult with the Company s senior management independently. The daily management, administration and operation of the Group are delegated to the senior management. The delegated functions and responsibilities are periodically reviewed by the Board. Approval has to be obtained from the Board prior to any significant transactions entered into by the management. Corporate Governance Function The Board recognizes that corporate governance should be the collective responsibility of Directors and delegated the corporate governance duties to the Nomination Committee which include: (i) (i) to develop, review and implement the Company s policy and practices on corporate governance and make recommendations to the Board; (ii) (ii) to review and monitor the training and continuous professional development of Directors and senior management; (iii) (iii) to review and monitor the Company s policies and practices on compliance with legal and regulatory requirements; (iv) (iv) to develop, review and monitor the code of conduct and compliance manual (if any) applicable to employees and directors; (v) (v) to review the Company s compliance with the CG Code and disclosure in the Corporate Governance Report; and (vi) (vi) to develop, review and monitor the implementation of the Shareholders communication policy to ensure its effectiveness, and make recommendation to the Board where appropriate to enhance Shareholders relationship with the Company. 102 Future Land Development Holdings Limited

104 CORPORATE GOVERNANCE REPORT For the year ended 31 December 2016, the Company has updated the compliance manuals on notifiable transactions and price sensitive information (inside information) in accordance with the Listing Rules as guideline for its employees to report unpublished price sensitive information (inside information) to the Company to ensure consistent and timely disclosure and fulfillment of the Company s continuous disclosure obligations. BOARD COMMITTEES Nomination Committee The Nomination Committee comprises three members, including one executive Director and two independent non-executive Directors. It is chaired by an independent non-executive Director. The members of the Nomination Committee are Mr. ZHU Zengjin (chairman), Mr. LU Zhongming and Mr. ZHONG Wei, the majority of them are independent non-executive Directors. Mr. LU Zhongming has been appointed as the member of the Nomination Committee on 7 January 2016, to replace Mr. LIANG Zhicheng who has ceased to be a member of the Nomination Committee with effect from 7 January The principal duties of the Nomination Committee include the following: to review the structure, size and composition of the Board and make recommendations regarding any proposed changes; to identify suitable candidates for appointment as Directors; to make recommendations to the Board on appointment or reappointment of and succession planning for Directors; and to assess the independence of independent non-executive Directors. The Nomination Committee will assess the candidate or incumbent on criteria such as integrity, experience, skill and ability to commit time and effort to carry out the duties and responsibilities. The recommendations of the Nomination Committee will then be put to the Board for decision. Their written terms of reference are available on the websites of the Stock Exchange and the Company. Future Land Development Holdings Limited 103

105 CORPORATE GOVERNANCE REPORT With a view to enhancing Board effectiveness and corporate governance, the Board should include a balanced composition of executive and non-executive directors (including independent nonexecutive directors) so that there is a strong independent element on the Board, which can effectively exercise independent judgment. The Company adopted the Board Diversity Policy with measurable objectives. The Nomination Committee evaluates the balance and blend of skills, experience and diversity of perspectives of the Board. Selection of candidates is based on a range of diversity perspectives, including but not limited to age, cultural and educational background, professional and industry experience, skills, knowledge, ethnicity and other qualities essential to the Company s business, and merit and contribution that the selected candidates will bring to the Board. The Board will review such measurable objectives from time to time to ensure their appropriateness and ascertain the progress made towards achieving those objectives For the year ended 31 December 2016, 2 meetings of the Nomination Committee were held and the attendance record of the Nomination Committee members is set out in the table below: Directors Attended/Eligible to attend Mr. ZHU Zengjin Mr. LIANG Zhicheng (resigned as a member of the 0 0 Nomination Committee on 7 January 2016) Mr. ZHONG Wei Mr. LU Zhongming (appointed as a member of the Nomination Committee on 7 January 2016) 2 2 The Nomination Committee nominated the new Directors to the Board to fill the vacancies, discussed the redesignated of Directors and change of chief executive officer, assessed the independence of the independent non-executive Directors and considered the re-appointment of the retiring Directors. 104 Future Land Development Holdings Limited

106 CORPORATE GOVERNANCE REPORT Remuneration Committee The Remuneration Committee currently comprises three members, namely Mr. ZHU Zengjin (chairman), Mr. CHAN Wai Kin and Mr. ZHONG Wei, two of them are independent non-executive Directors. The primary duties of the Remuneration Committee include making recommendations on and approving the remuneration policy and structure and remuneration packages of the executive Directors and the senior management/determining remuneration policy and structure and remuneration packages of the executive Directors and the senior management. The Remuneration Committee is also responsible for establishing transparent procedures for formulating such remuneration policy and structure to ensure that no Director or any of his/her associates will participate in deciding his/her own remuneration, which remuneration will be determined by reference to the performance of the individual and the Company as well as market practice and conditions. Their written terms of reference are available on the websites of the Stock Exchange and the Company For the year ended 31 December 2016, 2 meetings of the Remuneration Committee were held and the attendance record of the Remuneration Committee members is set out in the table below: Directors Attended/Eligible to attend Mr. ZHU Zengjin 2/2 Mr. CHAN Wai Kin 2/2 Mr. ZHONG Wei 2/2 The Remuneration Committee discussed and reviewed the service agreement, appointment letter and remuneration policy for Directors and senior management of the Company, and made recommendations to the Board on the service agreement, appointment letter and remuneration packages of individual executive Directors and senior management. Future Land Development Holdings Limited 105

107 CORPORATE GOVERNANCE REPORT Details of the remuneration by band of the six members of the senior management of the Group, whose biographies are set out on pages 64 to 66 of this annual report, among which Mr. LIANG Zhicheng resigned as an executive Director on 7 January 2016, for the year ended 31 December 2016 are set out below: Remuneration band (RMB 000) Number of individual 2,000 3,000 2,000 to 3, ,000 5,000 4,000 to 5,000 2 Audit Committee The Audit Committee currently comprises all the three independent nonexecutive Directors, namely, Mr. CHEN Huakang (chairman), Mr. ZHU Zengjin and Mr. ZHONG Wei. The main duties of the Audit Committee include the following: to review the financial statements and reports and consider any significant or unusual items raised by the internal audit division or external auditor before submission to the Board; to review the relationship with the external auditor by reference to the work performed by the auditor, their fees and terms of engagement, and make recommendations to the Board on the appointment, re-appointment and removal of external auditor; and to review the adequacy and effectiveness of the Company s financial reporting system, internal control system and risk management system and associated procedures, including the adequacy of the resources, staff qualifications and experience, training programmes and budget of the Company s accounting and financial reporting function. 106 Future Land Development Holdings Limited

108 CORPORATE GOVERNANCE REPORT For the year ended 31 December 2016, 3 meetings of the Audit Committee were held and the attendance record of the Audit Committee members is set out in the table below: Directors Attended/Eligible to attend Mr. CHEN Huakang 3/3 Mr. ZHU Zengjin 3/3 Mr. ZHONG Wei 3/3 The Audit Committee reviewed the financial reporting system, compliance procedures, internal control (including the adequacy of resources, staff qualifications and experience, training programmes and budget of the Company s accounting and financial reporting functions), internal control and risk management systems and processes and the reappointment of the external auditor. The Board had not deviated from any recommendation given by the Audit Committee on the selection, appointment, resignation or dismissal of external auditor. They also reviewed interim and final results of the Company and its subsidiaries for the interim period and the fiscal year as well as the audit report prepared by the external auditor relating to accounting issues and major findings in the course of audit. There are proper arrangements for employees, in confidence, to raise concerns about possible improprieties in financial reporting, internal control and other matters. Their written terms of reference are available on the websites of the Stock Exchange and the Company. Future Land Development Holdings Limited 107

109 CORPORATE GOVERNANCE REPORT DIRECTORS RESPONSIBILITIES FOR FINANCIAL REPORTING IN RESPECT OF FINANCIAL STATEMENTS The Directors acknowledge their responsibility for preparing the financial statements for the year ended 31 December 2016 which give a true and fair view of the affairs of the Company and the Group and of the Group s results and cash flows. The management has provided to the Board such explanation and information as are necessary to enable the Board to carry out an informed assessment of the Company s financial statements, which are put to the Board for approval. The Company provides all members of the Board with monthly updates on Company s performance, positions and prospects. The Directors were not aware of any material uncertainties relating to events or conditions which may cast significant doubt upon the Group s ability to continue as a going concern. F-9F-12 The statement by the auditor of the Company regarding their reporting responsibilities on the consolidated financial statements of the Company is set out in the Independent Auditor s Report on pages F-9 to F-12 of this annual report. RISK MANAGEMENT AND INTERNAL CONTROL Risk Management and Internal Control Systems The Board, the Audit Committee, the senior management and the internal audit department are the four levels of structure and main features of risk management and internal control systems. The Board acknowledges that it is the responsibility of the Board for maintaining an adequate risk management and internal control systems to safeguard the investments of Shareholders and assets of the Company and reviewing the effectiveness of such systems on an annual basis. Risk management and internal control systems are designed to manage rather than eliminate the risk of failure to achieve business objectives, and can only provide reasonable and not absolute assurance against material misstatement or loss. 108 Future Land Development Holdings Limited

110 CORPORATE GOVERNANCE REPORT As disclosed in its terms of reference of the Audit Committee, the Audit Committee is responsible for the oversight of the Company s risk management and internal control systems. The Audit Committee oversees the risk management process and reviews the effectiveness of the risk management and internal control systems by conducting the following procedures: reviewing the Company s risk management process and policy; reviewing with senior management at least annually reports demonstrating compliance with the risk management policy; discussing with senior management at least annually the Company s major risk exposures and the steps senior management has taken or should take to assess and treat such exposures; and reviewing the ongoing effectiveness of the Company s risk management practices. Senior management is responsible for administering the Company s risk management process and is accountable for ensuring that the Company s business operations are conducted in compliance with our risk management policy, taking into consideration changes in the environment and the Company s risk tolerance. Responsibilities of the Company s senior management include: designing and implementing a Company-wide risk management policy; reviewing and updating the risk management policy on a timely basis, ensuring it remains relevant and adequate, taking into account changes in the environment, industry and the Company s operations and risk profile and, where necessary, recommending changes to the risk management policy for the Audit Committee to review; ensuring that the Company s risk management process is aligned and integrated with the annual strategic and business planning process and vice versa; designing and establishing a risk management methodology which provides the appropriate tools to identify, evaluate, and manage business exposures; Future Land Development Holdings Limited 109

111 CORPORATE GOVERNANCE REPORT establishing a Company-wide risk reporting process to ensure that the Company s senior management, the Audit Committee and the Board are apprised of all material risk issues and business exposures; ensuring necessary management controls and oversight processes are in place to monitor compliance with the risk management policy and the risk management methodology; approving and monitoring key risk positions and exposure trends, risk management strategies and risk management priorities; reviewing and discussing the Company s overall risk profile, key and emerging risks and risk management activities through periodic risk discussions among senior management; and reviewing the key business strategies and initiatives to assess their impact on the Company s overall risk position. Risk Management Process In addition to the Board s oversight responsibilities, the Company has developed a risk management process to identify, evaluate and manage significant risks and to resolve material internal control defects (if any). Senior management, through the Company s internal audit department, is responsible for the annual risk reporting process. Members of the internal audit department meet with various members of the senior management to review and assess risks and discuss solutions to address material internal control defects (if any), including any changes relevant to a given year. Risks are compiled, ratings are assigned and mitigation plans are documented. The risk assessment is reviewed by certain members of senior management and presented to the Audit Committee and the Board for their review. (i) (ii) (iii) Risks are evaluated by the Board and senior management based on (i) the severity of the impact of the risk on the Company s financial results; (ii) the probability that the risk will occur; and (iii) the velocity or speed at which a risk could occur. 110 Future Land Development Holdings Limited

112 CORPORATE GOVERNANCE REPORT During the year ended 31 December 2016, the Company has ensured that the risk management and internal control provisions under the Corporate Governance Code have been complied with. The Board, during its annual review on the risk management and internal control systems, has confirmed the adequacy of the resources and staff qualifications and experiences of the Company s accounting, internal audit and financial reporting functions XIVA Inside Information The Board assesses the likely impact of any unexpected and significant event that may impact the price of the Shares or their trading volume and decides whether the relevant information is considered as inside information and needs to be disclosed as soon as reasonably practicable pursuant to Rules and of the Listing Rules and the Inside Information Provisions under Part XIVA of the SFO. Executive Directors and the joint company secretaries also may have responsibility for approving certain announcements and/or circulars to be issued by the Company under powers delegated by the Board from time to time. Internal Audit Department The Group s internal audit department plays a major role in monitoring the internal governance of the Company. The major tasks of the internal audit department are reviewing the financial conditions and internal control of the Company and conducting comprehensive audits of all branches and subsidiaries of the Company on a regular basis For the year ended 31 December 2016, the Board has conducted a review of the effectiveness of the risk management and internal control systems of the Group and considered the risk management and internal control systems to be effective and adequate. Future Land Development Holdings Limited 111

113 CORPORATE GOVERNANCE REPORT AUDITOR S REMUNERATION Annual audit and interim review fees of the Group for the year ended 31 December 2016 payable to the Company s external auditor are approximately RMB2.4 million. In addition, there are fees incurred in 2016 including fees of approximately RMB3.0 million for annual audit of Future Land Holdings charged by its external auditor, fees of approximately RMB0.3 million for non-audit services related to tax consultation, fees of approximately RMB1.8 million for non-audit services related to due diligence works on acquisition of property project companies, fees of approximately RMB0.5 million for non-audit services related to the bond offering of Future Land Holdings, fees of RMB0.7 million for non-audit services related to disposal of asset group by Future Land Holdings and fees of approximately RMB0.08 million for capital verification service. JOINT COMPANY SECRETARIES Mr. CHAN Wai Kin, the Joint Company Secretary, is responsible for advising the Board on corporate governance matters and ensuring that the Board policy and procedures, and the applicable laws, rules and regulations are followed. In order to uphold good corporate governance and ensure compliance with the Listing Rules and applicable Hong Kong laws, the Company also engages Ms. MOK Ming Wai, director of KCS Hong Kong Limited (a company secretarial services provider), as its Joint Company Secretary to assist Mr. CHAN Wai Kin to discharge his duties as company secretary of the Company. The primary corporate contact person at the Company is Mr. CHAN Wai Kin, the executive Director and Joint Company Secretary For the year ended 31 December 2016, Mr. CHAN Wai Kin and Ms. MOK Ming Wai have undertaken not less than 15 hours of relevant professional training respectively in compliance with Rule 3.29 of the Listing Rules. 112 Future Land Development Holdings Limited

114 CORPORATE GOVERNANCE REPORT COMMUNICATION WITH SHAREHOLDERS AND INVESTOR RELATIONS The Company considers that effective communication with Shareholders is essential for enhancing investor relations and understanding of the Group s business, performance and strategies. The Company also recognizes the importance of timely and non-selective disclosure of information, which will enable Shareholders and investors to make informed investment decisions The AGM of the Company provides opportunity for Shareholders to communicate directly with the Directors. The Chairman of the Company, and the chairmen of the Board Committees of the Company will attend the AGMs to answer Shareholders questions. The external auditor of the Company will also attend the AGMs to answer questions about the conduct of the audit, the preparation and content of the auditor s report, the accounting policies and auditor independence. The Company has held an AGM for the financial year ended 31 December 2015 on 18 May ( To promote effective communication, the Company adopts a Shareholders communication policy which aims at establishing a twoway relationship and communication between the Company and its Shareholders and maintains a website at where up-to-date information on the Company s business operations and developments, financial information, corporate governance practices and other information are available for public access. SHAREHOLDERS RIGHTS To safeguard Shareholders interests and rights, a separate resolution will be proposed for each issue at Shareholder meetings, including the election of individual Directors. All resolutions put forward at Shareholder meetings will be voted on by poll pursuant to the Listing Rules and poll results will be posted on the websites of the Stock Exchange and the Company in a timely manner after each Shareholder meeting. Future Land Development Holdings Limited 113

115 CORPORATE GOVERNANCE REPORT Convening of extraordinary general meeting and putting forward proposals Shareholders may put forward proposals for consideration at a general meeting according to the Companies Ordinance and the Company s articles of association. As regards proposing a person for election as a Director, the procedures are available on the Company s website ir@futureholdings.com.cn Enquiries to the Board Shareholders who intend to put forward their enquiries about the Company to the Board could send their enquiries to the principal place of business of the Company in Hong Kong at 36/F, Tower Two, Times Square, 1 Matheson Street, Causeway Bay, Hong Kong ( address: ir@futureholdings.com.cn). CHANGE IN CONSTITUTIONAL DOCUMENTS During the year ended 31 December 2016, there is no significant change in constitutional documents of the Company. 114 Future Land Development Holdings Limited

116 INDEPENDENT AUDITOR S REPORT F-13 F-226 TO THE SHAREHOLDERS OF FUTURE LAND DEVELOPMENT HOLDINGS LIMITED (incorporated in the Cayman Islands with limited liability) OPINION What we have audited The consolidated financial statements of Future Land Development Holdings Limited (the Company ) and its subsidiaries (the Group ) set out on pages F-13 to F-226, which comprise: the consolidated statement of financial position as at 31 December 2016; the consolidated statement of income for the year then ended; the consolidated statement of comprehensive income for the year then ended; the consolidated statement of changes in equity for the year then ended; the consolidated statement of cash flows for the year then ended; and the notes to the consolidated financial statements, which include a summary of significant accounting policies. Our opinion In our opinion, the consolidated financial statements give a true and fair view of the consolidated financial position of the Group as at 31 December 2016, and of its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with Hong Kong Financial Reporting Standards ( HKFRSs ) issued by the Hong Kong Institute of Certified Public Accountants ( HKICPA ) and have been properly prepared in compliance with the disclosure requirements of the Hong Kong Companies Ordinance. Future Land Development Holdings Limited F-1

117 INDEPENDENT AUDITOR S REPORT BASIS FOR OPINION We conducted our audit in accordance with Hong Kong Standards on Auditing ( HKSAs ) issued by the HKICPA. Our responsibilities under those standards are further described in the Auditor s Responsibilities for the Audit of the Consolidated Financial Statements section of this report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence We are independent of the Group in accordance with the HKICPA s Code of Ethics for Professional Accountants (the Code ), and we have fulfilled our other ethical responsibilities in accordance with the Code. KEY AUDIT MATTERS Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Key audit matters identified in our audit are summarised as follows: Fair Value of Investment Properties Classification of Subsidiary, Joint Venture and Associate F-2 Future Land Development Holdings Limited

118 INDEPENDENT AUDITOR S REPORT KEY AUDIT MATTERS (Cont d) 1: Key Audit Matter 1: Fair Value of Investment Properties How our audit addressed the Key Audit Matter Refer to note 4.5 (Critical accounting estimates and judgements) and note 7 (Investment properties) to the consolidated financial statements The Group s investment properties were carried at RMB13,507 million as at 31 December 2016 and fair value gains of RMB582 million were accounted for under fair values gains on investment properties in the consolidated statement of income. We focused on this area due to the valuation of the investment properties is significant to the financial statements and the valuation of the investment properties was highly dependent on a range of estimates, such as future rental cash inflows, term yield, reversionary yield, estimated construction costs to completion, and estimated profit margin required to hold and develop property to completion which were carried out by well-known independent professional qualified valuers. We performed the following procedures: (1) (1) We assessed the independence and competence of the external valuer which issued valuation report. (2) (2) We assessed the valuation techniques adopted in the valuation. (3) (3) For rental income used in the valuation, we checked the amount to rent roll and lease arrangement on a sample basis. Future Land Development Holdings Limited F-3

119 INDEPENDENT AUDITOR S REPORT KEY AUDIT MATTERS (Cont d) 1: Key Audit Matter 1: Fair Value of Investment Properties (Cont d) How our audit addressed the Key Audit Matter (Cont d) (4) (4) For yield rate, profit margin and market rents used in the valuation, we compared them with our own expectation using evidence of market transaction. Where we identified estimates and assumptions that were outside the typical ranges used, we discussed these with the valuer to understand the rationale and then assessed, based on all the available evidence and our experience in this sector, whether the use of the estimate or assumption was justified. (5) (5) For estimated construction costs to completion, we compared them to the project budgets which were developed and approved internally by management; we also compared the actual costs of the newly completed properties to their budget costs to assess the reliability of the project budgets. (6) (6) We tested the calculation of the valuation. Our testing indicated that the estimates and assumptions used were justified in the context of the Group s property portfolio. F-4 Future Land Development Holdings Limited

120 INDEPENDENT AUDITOR S REPORT KEY AUDIT MATTERS (Cont d) 2: Key Audit Matter 2: Classification of Subsidiary, Joint Venture and Associate How our audit addressed the Key Audit Matter Refer to note 4.6 (Classification of subsidiary, joint venture and associate), note 9 (Investments in associates), note 10 (Investments in joint ventures) and note 42 (Particulars of subsidiaries) to the consolidated financial statements The Group holds investments in a number of property development companies. As at 31 December 2016, the Group had investments with amounts of RMB522 million in 8 associated companies and RMB4,348 million in 36 joint ventures. For material investments, individually or in aggregate, we have challenged management s assessment and performed the following audit procedures: (1) (1) We examined the legal documents associated with investments, to determine the key terms, including rights of the investors, terms of shareholders agreements, dispute resolution provisions, termination provisions, governance structures, and profit-sharing arrangements, with a particular focus on terms about fixed returns or put/forward options, and then assessed these against accounting standards based on our own expertise and experience of applying them in similar situations. Future Land Development Holdings Limited F-5

121 INDEPENDENT AUDITOR S REPORT KEY AUDIT MATTERS (Cont d) 2: Key Audit Matter 2: Classification of Subsidiary, Joint Venture and Associate (Cont d) How our audit addressed the Key Audit Matter (Cont d) The classification of an investment as a subsidiary, joint venture or associate is based on whether the Group is determined to have control, joint control or significant influence (respectively), which involves judgements in some cases. Subsidiaries are consolidated, which means each asset, liability and transaction are shown in the Group s financial statements, whereas the others are shown as single investments with a single item of income/expense for their net results. As a result, the inappropriate classification, either on acquisition and disposal or in subsequent reporting periods, can have a material impact on the consolidated financial statements. (2) (2) We assessed whether the consideration paid or received in acquisition or disposal of investment represents the fair market value in arm s length transaction by comparison to the valuation report issued by independent valuer. (3) (3) In case where there have been subsequent changes to the shareholders agreements or governance structures, we critically assessed whether these change the initial analysis. (4) (4) We sought for confirmation or alternatively inquired the joint controlling shareholders or controlling shareholders by telephone to confirm the completeness of contracts and agreements we obtained, and no subsequent supplementary or amendments. For listed shareholders, we also sought for confirmation or alternatively inquired by telephone their accounting treatments adopted. F-6 Future Land Development Holdings Limited

122 INDEPENDENT AUDITOR S REPORT KEY AUDIT MATTERS (Cont d) 2: Key Audit Matter 2: Classification of Subsidiary, Joint Venture and Associate (Cont d) How our audit addressed the Key Audit Matter (Cont d) (5) (5) We considered the adequacy of the Group s disclosures in respect of the classification and carrying values of subsidiaries, associates, and joint ventures. Based on our audit procedures performed, we consider the classification of subsidiaries, associates, and joint ventures is acceptable and supportable by the available evidence in respect of the classification of investments in subsidiaries, joint ventures and associates. Future Land Development Holdings Limited F-7

123 INDEPENDENT AUDITOR S REPORT 2016 OTHER INFORMATION The directors of the Company are responsible for the other information set out in the Company s 2016 Annual Report. The other information comprises the information included in the chairman s statement and management discussion and analysis (but does not include the consolidated financial statements and our auditor s report thereon), which we obtained prior to the date of this auditor s report, and the corporate information, financial summary/financial review, financial highlights, breakdown of major properties, directors and senior management, report of the directors and corporate governance report which are expected to be made available to us after that date. Our opinion on the consolidated financial statements does not cover the other information and we do not and will not express any form of assurance conclusion thereon. In connection with our audit of the consolidated financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed on the other information that we obtained prior to the date of this auditor s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. When we read the corporate information, financial summary/financial review, financial highlights, breakdown of major properties, directors and senior management, report of the directors and corporate governance report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to the audit committee and take appropriate action considering our legal rights and obligations. F-8 Future Land Development Holdings Limited

124 INDEPENDENT AUDITOR S REPORT RESPONSIBILITIES OF DIRECTORS AND THE AUDIT COMMITTEE FOR THE CONSOLIDATED FINANCIAL STATEMENTS The directors of the Company are responsible for the preparation of the consolidated financial statements that give a true and fair view in accordance with HKFRSs issued by the HKICPA and the disclosure requirements of the Hong Kong Companies Ordinance, and for such internal control as the directors determine is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated financial statements, the directors are responsible for assessing the Group s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so. The audit committee is responsible for overseeing the Group s financial reporting process. AUDITOR S RESPONSIBILITIES FOR THE AUDIT OF THE CONSOLIDATED FINANCIAL STATEMENTS Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor s report that includes our opinion. We report our opinion solely to you, as a body, and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report. Future Land Development Holdings Limited F-9

125 INDEPENDENT AUDITOR S REPORT AUDITOR S RESPONSIBILITIES FOR THE AUDIT OF THE CONSOLIDATED FINANCIAL STATEMENTS (Cont d) Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with HKSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements. As part of an audit in accordance with HKSAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group s internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. F-10 Future Land Development Holdings Limited

126 INDEPENDENT AUDITOR S REPORT AUDITOR S RESPONSIBILITIES FOR THE AUDIT OF THE CONSOLIDATED FINANCIAL STATEMENTS (Cont d) Conclude on the appropriateness of the directors use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor s report. However, future events or conditions may cause the Group to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with the audit committee regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the audit committee with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with the audit committee all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. Future Land Development Holdings Limited F-11

127 INDEPENDENT AUDITOR S REPORT AUDITOR S RESPONSIBILITIES FOR THE AUDIT OF THE CONSOLIDATED FINANCIAL STATEMENTS (Cont d) From the matters communicated with the audit committee, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. The engagement partner on the audit resulting in this independent auditor s report is Arthur Chi Ping Kwok. PricewaterhouseCoopers Certified Public Accountants Hong Kong, 24 February 2017 F-12 Future Land Development Holdings Limited

128 CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 31 December As at 31 December Note RMB 000 RMB 000 ASSETS Non-current assets Property, plant and equipment 6 2,443,001 2,261,413 Investment properties 7 13,506,826 10,854,000 Intangible assets 8 37,224 36,310 Investments in associates 9 521, ,127 Investments in joint ventures 10 4,348,312 2,019,775 Deferred income tax assets , ,813 Available-for-sale financial assets , ,702 Derivative financial instruments ,615 Land use rights , ,589 Other receivables and prepayments 16 1,347, ,467 24,032,218 16,990,196 Current assets Prepayments for leasehold land 14 7,350,293 6,799,095 Properties held or under development for sale 15 39,505,462 32,739,898 Trade and other receivables and prepayments 16 20,235,059 6,527,190 Restricted cash 18 1,851,085 1,283,653 Cash and cash equivalents 18 11,905,339 6,478,861 80,847,238 53,828,697 Total assets 104,879,456 70,818,893 OWNERS EQUITY Capital and reserves attributable to equity holders of the Company Share capital: nominal value 19 4,609 4,609 Reserves 21 9,230,441 8,165,760 9,235,050 8,170,369 Non-controlling interests 5,940,355 5,292,979 Total equity 15,175,405 13,463,348 Future Land Development Holdings Limited F-13

129 CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 31 December As at 31 December Note RMB 000 RMB 000 LIABILITIES Non-current liabilities Borrowings 22 17,036,153 15,004,889 Long-term payables 36,670 Deferred income tax liabilities 25 1,115, ,670 18,187,839 15,759,559 Current liabilities Trade and other payables 24 28,975,896 20,008,074 Advances from pre-sale of properties 23 29,846,151 15,928,660 Current income tax liabilities 2,518,327 1,682,585 Borrowings 22 10,175,714 3,975,575 Dividends payable 124 1,092 71,516,212 41,595,986 Total liabilities 89,704,051 57,355,545 Total equity and liabilities 104,879,456 70,818,893 F-21 F-226 The notes on pages F-21 to F-226 are an integral part of these consolidated financial statements. F-13F The consolidated financial statements on pages F-13 to F-226 were approved by the Board of Directors on 24 February 2017 and the consolidated statement of financial position was signed on its behalf by: Wang Zhenhua Director Chan Wai Kin Director F-14 Future Land Development Holdings Limited

130 CONSOLIDATED STATEMENT OF INCOME For the year ended 31 December Year ended 31 December Note RMB 000 RMB 000 Revenue 26 28,232,094 23,835,889 Cost of sales 28 (21,625,122) (18,979,683) Gross profit 6,606,972 4,856,206 Fair value gains on investment properties 7 582, ,106 Selling and marketing expenses 28 (1,097,915) (828,126) Administrative expenses 28 (1,607,694) (1,035,500) Other income 27 26,307 18,669 Other expenses 27 (26,249) (3,885) Other gains net ,139 14,153 Operating profit 4,737,710 3,836,623 Finance income , ,133 Finance costs 29 (941,630) (650,707) Finance costs net (780,403) (514,574) Share of results of associates 9 1, ,810 Share of results of joint ventures ,565 (61,905) Profit before income tax 4,135,368 3,363,954 Income tax expense 31 (1,668,208) (1,507,717) Profit for the year 2,467,160 1,856,237 Attributable to: Equity holders of the Company 1,383,953 1,030,890 Non-controlling interests 1,083, ,347 2,467,160 1,856,237 Earnings per share for profit attributable to equity holders of the Company Basic and diluted 32 RMB0.24 RMB0.18 F-21 F-226 The notes on pages F-21 to F-226 are an integral part of these consolidated financial statements. Future Land Development Holdings Limited F-15

131 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the year ended 31 December Year ended 31 December RMB 000 RMB 000 Profit for the year 2,467,160 1,856,237 Other comprehensive loss, which may be reclassified subsequently to profit or loss Change in fair value of available-for-sale financial assets gross amount (13,000) deferred tax 3,250 (9,750) Total comprehensive income for the year 2,467,160 1,846,487 Attributable to: Equity holders of the Company 1,383,953 1,024,509 Non-controlling interests 1,083, ,978 2,467,160 1,846,487 F-21 F-226 The notes on pages F-21 to F-226 are an integral part of these consolidated financial statements. F-16 Future Land Development Holdings Limited

132 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the year ended 31 December 2016 Attributable to equity holders of the Company Share capital Share premium Other reserves Retained earnings Sub-total Non-controlling interests Total equity RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB (Note 19) (Note 21) (Note 21) (Note 21) Balance at 1 January ,609 1,112,440 54,100 6,999,220 8,170,369 5,292,979 13,463,348 Comprehensive income Profit for the year 1,383,953 1,383,953 1,083,207 2,467,160 Other comprehensive income Total comprehensive income 1,383,953 1,383,953 1,083,207 2,467,160 Transactions with owners Capital reduction from a non-controlling interest (281,530) (281,530) 20 Pre-IPO share award scheme (Note 20) value of current employee services 3,479 3,479 3,479 20(b) Restricted share incentive scheme (Note 20(b)) 9,736 9, final dividend (Note 33) (282,900) (282,900) (282,900) Dividends of subsidiaries (59,091) (59,091) Total contributions by and distributions to owners (282,900) 3,479 (279,421) (330,885) (610,306) Disposal of subsidiaries (3,025) (3,025) (9,890) (12,915) 39(f) Acquisition of additional interests in a subsidiary (Note 39(f)) (36,826) (36,826) (95,056) (131,882) Total transactions with owners, recognized directly in equity (282,900) (36,372) (319,272) (435,831) (755,103) Balance at 31 December , ,540 17,728 8,383,173 9,235,050 5,940,355 15,175,405 Future Land Development Holdings Limited F-17

133 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the year ended 31 December 2016 Attributable to equity holders of the Company Share capital Share premium Other reserves Retained earnings Sub-total Non-controlling interests Total equity RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB (Note 19) (Note 21) (Note 21) (Note 21) Balance at 1 January ,617 1,395, ,193 5,968,330 7,643,980 4,707,042 12,351,022 Comprehensive income Profit for the year 1,030,890 1,030, ,347 1,856,237 Other comprehensive income Change in fair value of available-for-sale financial assets, net of tax (6,381) (6,381) (3,369) (9,750) Total comprehensive income (6,381) 1,030,890 1,024, ,978 1,846,487 Transactions with owners Capital injection from non-controlling interests 568, ,785 Capital reduction from non-controlling interests (800,000) (800,000) 20 Pre-IPO share award scheme (Note 20) value of current employee services 8,104 8,104 8, Buy-back of shares (Note 19) (8) (8,903) (8,911) (8,911) final dividend (Note 33) (283,400) (283,400) (283,400) Dividends of subsidiaries (275,577) (275,577) 39(a), (b), (c), (d), (e) 34(d) Total contributions by and distributions to owners (8) (283,400) (799) (284,207) (506,792) (790,999) Net loss from changes of non-controlling interests in subsidiaries (Note 39(a), (b), (c), (d), (e), Note 34(d)) (213,913) (213,913) 270,751 56,838 Total transactions with owners, recognized directly in equity (8) (283,400) (214,712) (498,120) (236,041) (734,161) Balance at 31 December ,609 1,112,440 54,100 6,999,220 8,170,369 5,292,979 13,463,348 F-21 F-226 The notes on pages F-21 to F-226 are an integral part of these consolidated financial statements. F-18 Future Land Development Holdings Limited

134 CONSOLIDATED STATEMENT OF CASH FLOWS For the year ended 31 December Year ended 31 December Note RMB 000 RMB 000 Operating activities Cash generated from operations 35 8,415, ,273 Interest paid (1,468,642) (1,263,384) PRC income tax paid (907,409) (750,733) PRC land appreciation tax paid (464,134) (664,616) Net cash generated from/(used in) operating activities 5,575,343 (2,376,460) Investing activities Acquisition of a subsidiary, net of cash acquired ,661 (53,600) Additions of investment properties (2,658,992) (2,391,495) Additions of property, plant and equipment and prepayments for non-current assets (569,267) (1,051,455) Proceeds from disposal of property, plant and equipment 35 3, Additions of intangible assets 8 (30,685) (25,847) Proceeds from disposal of intangible assets 2,943 Other consideration paid to non-controlling interest (122,882) Investments in associates 9 (220,000) (100,000) Investments in joint ventures 10 (3,896,383) (1,220,625) Acquisition of available-for-sale financial assets 11 (100,909) (75,961) Capital reduction from available-for-sale financial assets 11 3,420 13,744 Disposal of subsidiaries, net of cash disposed 40 1,830,784 Dividends received 27 9,312 6,256 Interest received , ,133 Fundings to related parties/other investors of joint ventures (48,924,635) (8,915,834) Fundings received from related parties/ other investors of joint ventures 46,038,589 11,676,039 Acquisition of derivative financial instruments (60,000) Capital reduction from a joint venture 700 Net cash used in investing activities (8,039,865) (2,001,766) Future Land Development Holdings Limited F-19

135 CONSOLIDATED STATEMENT OF CASH FLOWS For the year ended 31 December Year ended 31 December Note RMB 000 RMB 000 Financing activities Proceeds from borrowings 10,896,512 9,098,593 Proceeds from issuance of senior notes 1,519,693 Proceeds from issuance of corporate bonds 7,928,594 4,958,110 Repayments of borrowings (9,301,027) (10,918,815) Decrease in restricted cash relating to financing activities ,976 1,349,666 Dividends paid to equity holders of the Company (283,465) Dividends paid to non-controlling interests (59,091) (275,577) Capital contribution from non-controlling interests 568,785 Capital reduction from non-controlling interests 39 (290,530) (800,000) Advances from non-controlling interests of subsidiaries 37,541 Advance to non-controlling interest of a subsidiary (30,000) Fundings from non-controlling shareholders of subsidiaries 334,050 Repayment of advances from non-controlling interests of subsidiaries (332,291) (336,980) Redemption of senior notes (2,867,298) Buy-back of shares 19 (8,911) A Amounts received from participants of the A share company s restricted share incentive scheme 265,650 Transaction costs in relation to transactions with non-controlling interests (38,100) Acquisition of additional equity interests in subsidiaries from non-controlling interests 39 (73,576) Amounts received for potential investments in property projects ,058 1,280,247 Net cash generated from financing activities 7,881,603 6,047,211 Net increase in cash and cash equivalents 5,417,081 1,668,985 Cash and cash equivalents at beginning of the year 6,478,861 4,817,907 Net exchange gain/(loss) on cash and cash equivalents 29 9,397 (8,031) Cash and cash equivalents at end of the year 18 11,905,339 6,478,861 F-21 F-226 The notes on pages F-21 to F-226 are an integral part of these consolidated financial statements. F-20 Future Land Development Holdings Limited

136 For the year ended 31 December Floor 4, Willow House, Cricket Square, P.O. Box 2804, Grand Cayman KY1-1112, Cayman Islands Grand Pavilion, Hibiscus Way, 802 West Bay Road, P.O. Box 31119, Grand Cayman KY1-1205, Cayman Islands 1 GENERAL INFORMATION Future Land Development Holdings Limited (the Company ) was incorporated in the Cayman Islands on 23 April 2010 as an exempted company with limited liability under the Companies Law (2010 Revision) of the Cayman Islands. The address of its registered office has been changed from Floor 4, Willow House, Cricket Square, P.O. Box 2804, Grand Cayman KY1-1112, Cayman Islands to Grand Pavilion, Hibiscus Way, 802 West Bay Road, P.O. Box 31119, Grand Cayman KY1-1205, Cayman Islands with effect from 1 October First Priority Group Limited The principal activities of the Company and its subsidiaries (together, the Group ) are property development and property investment in the People s Republic of China (the PRC ). The Company s parent company is Wealth Zone Hong Kong Investments Limited ( Wealth Zone Hong Kong ) and the Company s ultimate holding company is First Priority Group Limited, both of which are incorporated in the British Virgin Islands. The ultimate controlling party of the Group is Mr. Wang Zhenhua ( Mr. Wang or the Controlling Shareholder ) To prepare for the initial listing of the Company s shares on the Main Board of The Stock Exchange of Hong Kong Limited (the Stock Exchange ), the Group has undertaken a reorganisation (the Reorganisation ) pursuant to which the Company became the holding company of the subsidiaries comprising the Group. Details of the Reorganisation are set out in the prospectus of the Company dated 19 November The Company s shares began to list on the Main Board of The Stock Exchange of Hong Kong Limited (the Stock Exchange ) on 29 November 2012 (the Listing ). The consolidated financial statements are presented in thousands of Renminbi ( RMB 000 ), unless otherwise stated F-13 F-226 These consolidated financial statements set out on pages F-13 to F-226 have been approved and authorized for issue by the board of directors (the Board ) of the Company on 24 February Future Land Development Holdings Limited F-21

137 For the year ended 31 December SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The principal accounting policies applied in the preparation of the consolidated financial statements are set out below. These policies have been consistently applied to the years presented, unless otherwise stated Basis of preparation The consolidated financial statements have been prepared in accordance with all applicable Hong Kong Financial Reporting Standards ( HKFRSs ) and disclosure requirements of the Hong Kong Companies Ordinance Cap.622. The consolidated financial statements have been prepared under the historical cost convention, as modified by the revaluation of available-forsale financial assets, and financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss and investment properties, which are carried at fair value. 1 The Reorganisation for the Listing referred to in Note 1 above involved combination of a number of entities that were under the common control of the Controlling Shareholder, Mr. Wang, and was accounted for using merger accounting. The net assets of these entities were consolidated using the existing book values from the Controlling Shareholder s perspective. The results were combined from the earliest date presented or since the date when the combining entities first came under the common control, where this was at a later date, regardless of the date the Group took actual ownership. No amount was recognised in consideration for goodwill or excess of acquirers interest in the net fair value of the acquiree s identifiable assets, liabilities and contingent liabilities over cost at the time the Reorganisation took place. 4 The preparation of consolidated financial statements in conformity with HKFRSs requires the use of certain critical accounting estimates. It also requires management to exercise judgement in the process of applying the Group s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 4 below. F-22 Future Land Development Holdings Limited

138 For the year ended 31 December SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 2.1 Basis of preparation (Cont d) (i) 2016 (i) New standard, amendments and improvements of HKFRSs adopted by the Group in The following new standard, amendments and improvements to existing standards are mandatory for the first time for the financial year beginning on 1 January 2016 and are relevant to the Group s operations HKFRS 14 Regulatory Deferral Accounts (effective for annual periods beginning on or after 1 January 2016). The standard describes regulatory deferral account balances as amounts of expense or income that would not be recognised as assets or liabilities in accordance with other standards, but that qualify to be deferred in accordance with HKFRS14 because the amount is included, or is expected to be included, by the rate regulator in establishing the price(s) that an entity can charge to customers for rateregulated goods or services Amendment to HKFRS 11 on accounting for acquisitions of interests in joint operations (effective for annual periods beginning on or after 1 January 2016). The amendment requires an investor to apply the principles of business combination accounting when it acquires an interest in a joint operation that constitutes a business (as defined in HKFRS 3 Business Combinations ). Future Land Development Holdings Limited F-23

139 For the year ended 31 December SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 2.1 Basis of preparation (Cont d) (i) 2016 (i) New standard, amendments and improvements of HKFRSs adopted by the Group in 2016 (Cont d) 16 Amendments to HKAS 16 and HKAS on clarification of acceptable methods of depreciation and amortisation (effective for 2016 annual periods beginning on or after 1 January ). The amendments clarify when a method of depreciation or amortisation based on revenue may be appropriate. The amendment to HKAS 16 clarifies that depreciation of an item of property, 16 plant and equipment based on revenue generated by using the asset is not appropriate. The amendment to HKAS 38 establishes a rebuttable presumption that amortisation of an intangible asset based on revenue generated by using the 38 asset is inappropriate. 27 Amendment to HKAS 27 on equity method in separate financial statements (effective for annual periods beginning on or after 1 January 2016). 1 The amendment allows entities to use equity method to account for investments in subsidiaries, joint ventures and associates in their separate financial statements Amendments from annual improvements cycle, affecting the following 4 standards: 5 HKFRS 5 Non-current Assets Held for Sale and Discontinued Operations, HKFRS 7 Financial Instruments: Disclosures, HKAS 19 Employee 7 Benefits and HKAS 34 Interim Financial Reporting (effective for annual periods beginning 19 on or after 1 January 2016) F-24 Future Land Development Holdings Limited

140 For the year ended 31 December SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 2.1 Basis of preparation (Cont d) (i) 2016 (i) New standard, amendments and improvements of HKFRSs adopted by the Group in 2016 (Cont d) Amendments to HKFRS 10, HKFRS 12 and HKAS 28 on investment entities: applying the consolidation exception (effective for annual periods beginning on or after 1 January 2016). The amendments clarify the application of the consolidation exception for investment entities and their subsidiaries Amendments to HKAS 1 on disclosure initiative (effective for annual periods beginning on or after 1 January 2016). The amendments clarify guidance in HKAS 1 on materiality and aggregation, the presentation of subtotals, the structure of financial statements and the disclosure of accounting policies The adoption of the above new standard, amendments and improvements starting from 1 January 2016 did not give rise to any significant impact on the Group s results of operations and financial position for the year ended 31 December (ii) 2016 (ii) New standards and amendments of HKFRSs that are required to be adopted by the Group after Certain new standards and amendments of HKFRSs have been published but are not yet effective for the annual period beginning on 1 January Those that are relevant to the Group s operations are as follows: Future Land Development Holdings Limited F-25

141 For the year ended 31 December SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 2.1 Basis of preparation (Cont d) (ii) 2016 (ii) New standards and amendments of HKFRSs that are required to be adopted by the Group after 2016 (Cont d) Amendments to HKAS 12 Amendments to HKAS 7 HKFRS 15 HKFRS 9 HKFRS 16 Amendments to HKFRS 10 and HKAS 28 Income Taxes (effective for annual periods beginning on or after 1 January 2017) Statement of Cash Flows (effective for annual periods beginning on or after 1 January 2017) Revenue from Contracts with Customers (effective for annual periods beginning on or after 1 January 2018) Financial Instruments (effective for annual periods beginning on or after 1 January 2018) Leases (effective for annual periods beginning on or after 1 January 2019) Regarding sale or contribution of assets between an investor and its associate or joint venture (effective for annual periods to be announced) The Group has not early adopted any new accounting and financial reporting standards or amendments to existing standards which have been issued but are not yet effective for the year ended 31 December The Group is in the process of making an assessment on the impact of these new standards and amendments and does not anticipate that the adoption when they become effective will result in any material impact on the Group s results of operations and financial position, except for the new financial reporting standard HKFRS 15 Revenue from Contracts with Customers (effective for annual periods beginning on or after 1 January 2018) and HKFRS 16 Leases (effective for annual periods beginning on or after 1 January 2019) which the Group is not yet in a position to conclude. F-26 Future Land Development Holdings Limited

142 For the year ended 31 December SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 2.2 Subsidiaries Consolidation A subsidiary is an entity (including a structured entity) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. Inter-company transactions, balances, income and expenses on transactions between group companies are eliminated. Profits and losses resulting from inter-company transactions that are recognised in assets are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated statement of financial position, consolidated statement of income, consolidated statement of comprehensive income and consolidated statement of changes in equity respectively. Future Land Development Holdings Limited F-27

143 For the year ended 31 December SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 2.2 Subsidiaries (Cont d) Consolidation (Cont d) (i) (i) Business combinations 2.1 The Group applies the acquisition method as described below to account for business combinations, except for the Reorganisation which had been accounted for as stated in Note 2.1 above. Under the acquisition method of accounting, the consideration transferred for the acquisition of a subsidiary comprises the fair values of the assets transferred, the liabilities incurred to former owners of the acquiree and the equity interests issued by the Group. The consideration transferred also includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree either at fair value or at the non-controlling interest s proportionate share in the recognised amounts of the acquiree s identifiable net assets. If the business combination is achieved in stages, the acquisition date carrying value of the Group s previously held equity interest in the acquiree is re-measured to fair value at the acquisition date; any gains or losses arising from such re-measurement are recognised in consolidated statement of income. F-28 Future Land Development Holdings Limited

144 For the year ended 31 December SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 2.2 Subsidiaries (Cont d) Consolidation (Cont d) (i) (i) Business combinations (Cont d) 39 Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability is recognised in accordance with HKAS 39 either in consolidated statement of income or as a change to other comprehensive income. Contingent consideration that is classified as equity is not remeasured, and its subsequent settlement is accounted for within equity. The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previously held equity interest in the acquiree over the fair value of the identifiable net assets acquired is recorded as goodwill. If the total of consideration transferred, non-controlling interest recognized and previously held equity interest measured is less than the fair value of the identifiable net assets of the subsidiary acquired as in the case of a bargain purchase, the difference is recognised directly in consolidated statement of income. (ii) (ii) Changes in ownership interests in subsidiaries without loss of control Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions that is, as transactions with the other owners in their capacity as owners. The difference between fair value of any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity. Future Land Development Holdings Limited F-29

145 For the year ended 31 December (iii) % 50% 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 2.2 Subsidiaries (Cont d) Consolidation (Cont d) (iii) Disposal of subsidiaries When the Group ceases to have control, any retained interest in the entity is re-measured to its fair value at the date when control is lost, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss Separate financial statements In the Company s statement of financial position, the investments in subsidiaries are stated at cost less impairment. Cost also includes direct attributable costs of investment. The results of subsidiaries are accounted for by the Company on the basis of dividend received and receivable. Impairment testing of the investments in subsidiaries is required upon receiving dividends from these investments if the dividend exceeds the total comprehensive income of the subsidiary in the period the dividend is declared or if the carrying amount of the investment in the separate financial statements exceeds the carrying amount in the consolidated financial statements of the investee s net assets including goodwill. 2.3 Associates Associates or associated companies are all entities over which the Group has significant influence but not control or joint control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting. Under the equity method, the investment is initially recognised at cost, and the carrying amount is increased or decreased to recognise the investor s share of the profit or loss and other reserve movements of the investee after the date of acquisition. The Group s investments in associates include goodwill (net of any accumulated impairment loss) identified on acquisition. If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of the amounts previously recognised in other comprehensive income is reclassified to profit or loss where appropriate. F-30 Future Land Development Holdings Limited

146 For the year ended 31 December SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 2.3 Associates (Cont d) The Group s share of its associates post-acquisition profits or losses is recognised in the consolidated statement of income, and its share of post-acquisition movement in other comprehensive income is recognised in other comprehensive income with a corresponding adjustment to the carrying amount of the investment. When the Group s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate. The Group determines at each reporting date whether there is any objective evidence that the investment in the associate is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognises the amount adjacent to share of profit/(loss) of an associate in the consolidated statement of income. Profits and losses resulting from upstream and downstream transactions between the Group and its associates are recognised in the Group s financial statements only to the extent of unrelated investor s interests in the associates. Unrealised losses are eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been changed where necessary to ensure consistency with the policies adopted by the Group. Dilution gains and losses arising in investments in associates are recognised in the consolidated statement of income. Future Land Development Holdings Limited F-31

147 For the year ended 31 December SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 2.4 Joint arrangements Under HKFRS 11, investments in joint arrangements are classified as either joint operations or joint ventures depending on the contractual rights and obligations of each investor. The Group has assessed the nature of its joint arrangements and determined them to be joint ventures. Joint ventures are accounted for using the equity method. Under the equity method of accounting, interests in joint ventures are initially recognised at cost and adjusted thereafter to recognise the Group s share of the post-acquisition profits or losses and movements in other comprehensive income. When the Group s share of losses in a joint venture equals or exceeds its interests in the joint venture (which includes any longterm interests that, in substance, form part of the Group s net investment in the joint venture), the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the joint venture. Unrealised gains on transactions between the Group and its joint ventures are eliminated to the extent of the Group s interests in the joint ventures. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of the joint ventures have been changed where necessary to ensure consistency with the policies adopted by the Group Segment reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decisionmaker (the CODM ). The CODM, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as Mr. Wang who makes strategic decisions. Management has determined the operating segments based on the reports reviewed by the CODM that are used to make strategic decisions. F-32 Future Land Development Holdings Limited

148 For the year ended 31 December SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 2.6 Foreign currency translation (i) (i) Functional and presentation currency Items included in the financial statements of each of the Group s entities are measured using the currency of the primary economic environment in which the entity operates ( the functional currency ). Since the majority of the assets and operations of the Group are located in the PRC, the financial statements are presented in RMB, which is the functional currency of the Company and the presentation currency of the Group. (ii) (ii) Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the consolidated statement of income. Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the statement of income within finance income or costs. All other foreign exchange gains and losses are presented in the statement of income within other gains or losses net. Future Land Development Holdings Limited F-33

149 For the year ended 31 December SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 2.6 Foreign currency translation (Cont d) (iii) (iii) Group companies The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows: (a) (a) assets and liabilities for each statement of financial position of the Group entities are translated at the closing date of that statement of financial position; (b) (b) income and expenses for each statement of income and statement of comprehensive income of the Group entities are translated at average exchange rate; and (c) (c) all resulting exchange differences are recognised in other comprehensive income and accumulated as a separate component of equity. Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate. Exchange differences arising are recognised in other comprehensive income. F-34 Future Land Development Holdings Limited

150 For the year ended 31 December SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 2.7 Property, plant and equipment Property, plant and equipment are stated at historical cost less accumulated depreciation and any impairment losses. The initial cost of an asset comprises its purchase price and any directly attributable costs of bringing the asset to its working condition and location for its intended use. Subsequent costs are included in the asset s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance costs are charged to the consolidated statement of income during the financial period in which they are incurred. Depreciation on property, plant and equipment is calculated using the straight-line method to allocate their costs less their residual values over their estimated useful lives, as follows: Buildings 30 years Motor vehicles 3-10 years Furniture, fittings and equipment 3-10 years Leasehold improvements 3-5 years The assets residual value and useful life are reviewed, and adjusted if appropriate, at the end of each reporting period. An asset s carrying amount is written down immediately to its recoverable amount if the asset s carrying amount is greater than its estimated recoverable amount. - Gains and losses on disposals are determined by comparing proceeds with carrying amount and are recognised as Other gains/(losses) net in the consolidated statement of income. Future Land Development Holdings Limited F-35

151 For the year ended 31 December SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 2.8 Investment properties Property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied by the Group, is classified as investment property. Investment property also includes property that is being constructed or developed for future use as investment property. Investment property comprises land held under operating leases and buildings owned by the Group. Land held under operating leases are classified and accounted for as investment property when the rest of the definition of investment property is met. In this case, the operating lease is accounted for as if it were a finance lease. Investment property is measured initially at its cost, including related transaction costs and where applicable borrowing costs. After initial recognition, investment property is carried at fair value. Changes in fair value are recognised and presented separately in the consolidated statement of income. Fair value is based on active market prices, adjusted, if necessary, for any difference in the nature, location or condition of the specific asset. If this information is not available, the Group uses alternative valuation methods such as recent prices on less active markets or discounted cash flow projections. These valuations are performed at balance sheet date by external valuers. F-36 Future Land Development Holdings Limited

152 For the year ended 31 December SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 2.8 Investment properties (Cont d) Property under construction is measured at fair value if the fair value is considered to be reliably measurable. If the fair value cannot be reliably determined, the investment property under construction will be measured at cost until such time as fair value can be determined or construction is completed, whichever is earlier. Any difference between the fair value of the property at that date and its then carrying amount shall be recognised in the consolidated statement of income. Investment property that is being redeveloped for continuing use as investment property, or for which the market has become less active, continues to be measured at fair value. Subsequent expenditure is capitalised to the asset s carrying amount only when it is probable that future economic benefits associated with the expenditure will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance costs are expensed when incurred. When an operating lease contract is entered into with another party on a property originally held for sale and upon the commencement of the lease, the property is transferred to investment property. The difference between the fair value of the property at the date of transfer and its then carrying amount is recognised as other gain in the statement of income. Future Land Development Holdings Limited F-37

153 For the year ended 31 December SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 2.9 Intangible assets Trademarks Trademarks of the Group are separately acquired trademarks which are shown at historical cost. They have a finite useful life and are carried at cost less accumulated amortisation. Amortisation is calculated using the straight-line method to allocate the cost of trademarks over their estimated useful lives of 10 years Computer software Computer software of the Group comprises acquired computer software which is capitalised on the basis of the costs incurred to acquire and bring to use the specific software. These costs are amortised over their estimated useful lives of 5 years Impairment of investments in subsidiaries, associates, joint ventures and non-financial assets Assets that have an indefinite useful life or have not yet been available for use are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Non-financial assets that suffered an impairment are reviewed for possible reversal of the impairment at each balance sheet date. F-38 Future Land Development Holdings Limited

154 For the year ended 31 December SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 2.11 Properties held or under development for sale Properties held or under development for sale are included in current assets at the lower of cost and net realisable value. The costs of properties held or under development consist of costs of leasehold land, construction expenditure, capitalised borrowing costs and other direct costs incurred during the development period. The costs of properties held are determined by apportionment of the total development costs for that development project attributable to the unsold properties. Net realisable value is based on estimated selling price in the ordinary course of business as determined by management with reference to the prevailing market conditions, less further costs expected to be incurred to completion and selling and marketing costs Land use rights All land in the PRC is stated-owned or collectively-owned and no individual ownership right exists. Land use rights are acquired by the Group for development of properties. Land use rights held for development for sale are inventories and measured at lower of cost and net realisable value, of which those within normal operating cycle are classified as current assets and included in properties held or under development for sale, while those out of the normal operating cycle are classified as non-current assets. Land use rights fall within investment properties are classified as investment properties (Note 2.8). Land use rights for self-use are recorded under land use rights, which are amortised over the period of the lease using the straight-line method. Future Land Development Holdings Limited F-39

155 For the year ended 31 December SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 2.13 Financial assets Classification The Group classifies its financial assets in the following categories: at fair value through profit or loss, loans and receivables, and available for sale. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition. (i) (i) Financial assets at fair value through profit or loss 12 Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this category if acquired principally for the purpose of selling in the short term. Derivatives are also categorised as held for trading unless they are designated as hedges. Assets in this category are classified as current assets if expected to be settled within 12 months; otherwise, they are classified as non-current. (ii) (ii) Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for those with maturities greater than 12 months after the end of reporting period, which are classified as non-current assets. The Group s loans and receivables comprise certain items in Trade and other receivables and prepayments and bank deposits included in cash and cash equivalents and restricted cash in the statement of financial position (Note 16 and Note 18). (iii) (iii) Available-for-sale financial assets 12 Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in noncurrent assets unless management intends to dispose of the investment within 12 months of the end of the reporting period. F-40 Future Land Development Holdings Limited

156 For the year ended 31 December SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 2.13 Financial assets (Cont d) Recognition and measurement Regular purchases and sales of financial assets are recognised on the trade-date the date on which the Group commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets are derecognised when the rights to receive cash flows from the investments have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership. Available-for-sale financial assets are subsequently carried at fair value. Loans and receivables are subsequently carried at amortised cost using the effective interest method. Gains or losses arising from changes in the fair value of the financial assets at fair value through profit or loss category are presented in the statement of income within Other (losses)/gains net in the period in which they arise. Dividend income from financial assets at fair value through profit or loss is recognised in the statement of income as part of other income when the Group s right to receive payments is established. Changes in the fair value of monetary and non-monetary securities classified as available for sale are recognised in other comprehensive income. When securities classified as available for sale are sold or impaired, the accumulated fair value adjustments recognised in equity are included in the consolidated statement of income. Interest on available-for-sale securities calculated using the effective interest method is recognised in the consolidated statement of income as part of other income. Dividends on available-for-sale equity instruments are recognised in the consolidated statement of income as part of other income when the Group s right to receive payments is established. Future Land Development Holdings Limited F-41

157 For the year ended 31 December SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 2.13 Financial assets (Cont d) Impairment of financial assets (i) (i) Assets carried at amortised cost The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a loss event ) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated. Evidence of impairment may include indications that the debtors or a group of debtors are experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation, and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults. For loans and receivables category, the amount of the loss is measured as the difference between the asset s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset s original effective interest rate. The carrying amount of the asset is reduced and the amount of the loss is recognised in the consolidated statement of income. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised (such as an improvement in the debtor s credit rating), the reversal of the previously recognised impairment loss is recognised in the consolidated statement of income. F-42 Future Land Development Holdings Limited

158 For the year ended 31 December SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 2.13 Financial assets (Cont d) Impairment of financial assets (Cont d) (ii) (ii) Assets classified as available for sale The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset or a group of financial assets is impaired. For debt securities, if any such evidence exists the cumulative loss measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit or loss is removed from equity and recognised in profit or loss. If, in a subsequent period, the fair value of a debt instrument classified as available for sale increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in profit or loss, the impairment loss is reversed through the consolidated income statement. For equity investments, a significant or prolonged decline in the fair value of the security below its cost is also evidence that the assets are impaired. If any such evidence exists the cumulative loss measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit or loss is removed from equity and recognised in profit or loss. Impairment losses recognised in the consolidated income statement on equity instruments are not reversed through the consolidated income statement. Future Land Development Holdings Limited F-43

159 For the year ended 31 December SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 2.13 Financial assets (Cont d) Derecognition of financial assets A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised when: the rights to receive cash flows from the asset have expired; the Group has transferred its rights to receive cash flows from the asset, or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a pass-through arrangement; or (a) (b) the Group has transferred its rights to receive cash flows from the asset and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, and has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of the Group s continuing involvement in the asset. In that case, the Group also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay. F-44 Future Land Development Holdings Limited

160 For the year ended 31 December SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 2.14 Offsetting financial instruments Financial assets and liabilities are offset and the net amount reported in the statement of financial position when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of either party Derivative financial instruments Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured at their fair value. Fair values are obtained from quoted market prices in active markets, including recent market transactions, and valuation techniques, including discounted cash flow models and options pricing models, as appropriate For derivative financial instruments which do not qualify for hedge accounting, changes in fair value are recognised in the consolidated statement of income Trade and other receivables Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for impairment of trade and other receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments are considered indicators that the receivable is impaired. The amount of the provision is the difference between the asset s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. The carrying amount of the assets is reduced through the use of an allowance account and the amount of the loss is recognised in the consolidated statement of income. Future Land Development Holdings Limited F-45

161 For the year ended 31 December SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 2.16 Trade and other receivables (Cont d) When a trade or other receivable is uncollectible, it is written off against the allowance account for trade and other receivables. Subsequent recoveries of amounts previously written off are credited to the consolidated statement of income Trade and other receivables are included in current assets, except for those maturing more than twelve months after the reporting period (or out of the normal operating cycle of the business if longer) which are classified as non-current assets Cash and cash equivalents Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less Share capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds Trade and other payables Trade and other payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade and other payables are classified as current liabilities if payment is due within twelve months after the reporting period (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities. Trade and other payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method. F-46 Future Land Development Holdings Limited

162 For the year ended 31 December SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 2.20 Borrowings and borrowing costs Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the consolidated statement of income over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it relates. 12 Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period. General and specific borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation. Other borrowing costs are expensed in the period when they are incurred. Future Land Development Holdings Limited F-47

163 For the year ended 31 December SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 2.21 Current and deferred income tax The tax expense for the period comprises current and deferred tax. Tax is recognised in the consolidated statement of income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively. The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluate positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation and establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities. Deferred income tax is recognised, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled. F-48 Future Land Development Holdings Limited

164 For the year ended 31 December SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 2.21 Current and deferred income tax (Cont d) Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. Deferred income tax is provided on temporary differences arising on investments in subsidiaries, associates and joint arrangements, except for deferred income tax liability where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. Generally the Group is unable to control the reversal of the temporary difference for associates. Only where there is an agreement in place that gives the Group the ability to control the reversal of the temporary difference are not recognised. Deferred income tax assets are recognised on deductible temporary differences arising from investments in subsidiaries, associates and joint arrangements only to the extent that it is probable the temporary difference will reverse in the future and there is sufficient taxable profit available against which the temporary difference can be utilised. Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes assets and liabilities relate to income taxes levied by the same taxation authority on either the taxable entity or different taxable entities where there is an intention to settle the balances on a net basis. Future Land Development Holdings Limited F-49

165 For the year ended 31 December SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 2.22 Employee benefits In accordance with the rules and regulations of mainland China, the mainland China based employees of the Group participate in various defined contribution retirement benefit plans organised by the relevant municipal and provincial governments in the mainland China under which the Group and the mainland China based employees are required to make monthly contributions to these plans calculated as a percentage of the employees salaries, subject to a certain ceiling. The municipal and provincial governments undertake to assume the retirement benefit obligations of all existing and future retired mainland China based employees payable under the plans described above. Other than the monthly contributions, the Group has no further obligation for the payment of retirement and other post-retirement benefits of its employees. The assets of these plans are held separately from those of the Group in independently administrated funds managed by the municipal and provincial governments. F-50 Future Land Development Holdings Limited

166 For the year ended 31 December SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 2.23 Share-based payments (i) (i) Pre-IPO share award scheme The Group operates an equity-settled pre-ipo share award scheme, under which the Group receives services from employees and certain former employees, officers and business partners as consideration for equity instruments (awards) of the Company. The fair value of the current employee and certain former employees, officers and business partners services received in exchange for the grant of the shares is recognised as an expense. The total amount to be expensed is determined by reference to the fair value of the shares granted: including any market performance conditions; excluding the impact of any service and nonmarket performance vesting conditions; and including the impact of any non-vesting conditions. Non-market performance vesting conditions are included in assumptions about the number of shares that are expected to vest. The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each reporting period, the Group revises its estimates of the number of shares that are expected to vest based on the non-market performance vesting conditions. It recognises the impact of the revision to original estimates, if any, in the consolidated statement of income, with a corresponding adjustment to equity. The grant by the Company of its shares to the employees of subsidiaries in the Group is treated as a capital contribution. The fair value of employee services received, measured by reference to the grant date fair value, is recognised over the vesting period as an increase to investments in subsidiaries, with a corresponding credit to equity account of the Company. Future Land Development Holdings Limited F-51

167 For the year ended 31 December SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 2.23 Share-based payments (Cont d) (ii) (ii) Restricted Share Incentive Scheme Future Land Holdings Co., Ltd. (the Future Land Holdings ), a subsidiary of the Group, operates an equity-settled restricted share incentive scheme, under which Future Land Holdings receives services from its selected current employees (including directors) (the Participants ) as consideration for the equity instruments (awards). The fair value of the selected current employees services received in exchange for the grant of the restricted shares is recognised as an expense. The total amount to be expensed is determined by reference to the fair value of the granted shares measured as of the grant date less the proceeds received from the grant, and is treated as a capital contribution wholly belonging to the Participants and thus recorded under non-controlling interests until each unlocking date on which the Company will take up its share based on the then shareholding in Future Land Holdings and record it under other reserves attributable to equity holders of the Company. The proceeds received from the grant is firstly recorded as other payables until each unlocking date on which the Company will take up its share based on the then shareholding in Future Land Holdings and record it under other reserves attributable to equity holders of the Company. Non-market performance unlocking conditions are included in assumptions about the number of shares that are expected to unlock. The total expense is recognised over the unlocking period, which is the period over which all of the specified unlocking conditions are to be satisfied. At the end of each reporting period, Future Land Holdings revises its estimates of the number of shares that are expected to unlock based on the nonmarket performance unlocking conditions. It recognises the impact of the revision to original estimates, if any, in the consolidated statement of income, with a corresponding adjustment to non-controlling interests. F-52 Future Land Development Holdings Limited

168 For the year ended 31 December SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 2.23 Share-based payments (Cont d) (ii) (ii) Restricted Share Incentive Scheme (Cont d) The Group s shareholding in Future Land Holdings will be reduced gradually during the unlocking period. These constitute deemed disposal and dilution gain or loss will arise at the various unlocking dates which is a combination of the gain or loss arising from a portion of the net proceeds shared by the Company at the then shareholding and loss of the net assets value of Future Land Holdings deemed disposed by the Company at the various unlocking dates. Such dilution gain will not pass through the income statement but will all be treated as transactions with non-controlling interests and recorded in other reserves under equity directly Provisions and contingent liabilities Provisions are recognised when: the Group has a present legal or constructive obligation as a result of past events; it is more likely than not that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. Provisions are not recognised for future operating losses. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small. Provisions are measured at the present value of the expenditure expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognised as interest expense. Future Land Development Holdings Limited F-53

169 For the year ended 31 December SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 2.24 Provisions and contingent liabilities (Cont d) A contingent liability is a possible obligation that arises from past events and whose existence will only be confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group. It can also be a present obligation arising from past events that is not recognised because it is not probable that outflow of economic resources will be required or the amount of obligation cannot be measured reliably A contingent liability is not recognised but is disclosed in the notes to the consolidated financial statements. When a change in the probability of an outflow occurs so that outflow is probable, it will then be recognised as a provision Revenue recognition Revenue comprises the fair value of the consideration received or receivable for the sale of properties and services in the ordinary course of the Group s activities. Revenue is shown net of returns, rebates and discounts and after eliminated sales within the Group. Revenue is recognised as follows: (i) (i) Sales of properties Revenue from sales of properties is recognised when the risks and rewards of the properties are transferred to the purchasers, which is when the construction of relevant properties has been completed and the properties have been delivered to the purchasers pursuant to the sales agreement and collectibility of related receivables is reasonably assured. Deposits and instalments received on properties sold prior to the date of revenue recognition are recorded as Advances from pre-sale of properties in the consolidated statement of financial position under current liabilities. F-54 Future Land Development Holdings Limited

170 For the year ended 31 December SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 2.25 Revenue recognition (Cont d) (ii) (ii) Rental income Rental income from properties being let under operating leases is recognised on a straight line basis over the lease terms. (iii) (iii) Service income Revenue from services is recognised when services have been provided, total amount of revenue and costs can be estimated reliably and the collectibility of the related receivables is reasonably assured. (iv) (iv) Interest income Interest income is recognised on a time-proportion basis using the effective interest method. When a receivable is impaired, the Group reduces the carrying amount to its recoverable amount, being the estimated future cash flows discounted at the original effective interest rate of the instrument, and continues unwinding the discount as interest income. Interest income on impaired loans and receivables is recognised using the original effective interest rate. (v) (v) Dividend income Dividend income is recognised when the right to receive payment is established. Future Land Development Holdings Limited F-55

171 For the year ended 31 December SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 2.26 Government grants Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be received and the Group will comply with all attached conditions. Government grants relating to costs are deferred and recognised in the consolidated statement of income over the period necessary to match them with the costs they are intended to compensate. Government grants that become receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to an entity within the Group with no future related costs are recognised as income of the period in which they become receivable Financial guarantee liabilities The Group provides financial guarantees for certain property purchasers on mortgage facilities with banks. Financial guarantee liabilities are recognised initially at fair value plus transaction costs that are directly attributable to the issue of the financial guarantee liabilities. After initial recognition, such contracts are measured at the higher of the present value of the best estimate of the expenditure required to settle the present obligation and the amount initially recognised less cumulative amortisation. Financial guarantee liabilities are derecognised from the statement of financial position when, and only when, the obligation specified in the contract is discharged or cancelled or expired. F-56 Future Land Development Holdings Limited

172 For the year ended 31 December SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) 2.28 Operating leases Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the consolidated statement of income on a straight-line basis over the period of the lease Dividend distribution Dividend distribution to the Company s shareholders is recognised, as a liability where applicable, in the Group s and the Company s financial statements in the period in which the dividends are properly approved by the Company s shareholders Subsequent events Events after the reporting period that provide additional information about the Group s position at the end of the reporting period ( adjusting events ) are reflected in the consolidated financial statements. Events after the reporting period that are not adjusting events are disclosed in the notes when material. Future Land Development Holdings Limited F-57

173 For the year ended 31 December FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS 3.1 Financial risk factors The Group s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, price risk, cash flow and fair value interest rate risk), credit risk and liquidity risk. The Group s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group s financial performance Market risk (i) (i) Foreign exchange risk The Group is engaged in the development, sale and management of properties solely in the PRC with almost all the transactions denominated in RMB, except for certain financing activities, including the initial public offering, borrowings from banks and issuance of senior notes which are denominated in Hong Kong Dollar ( HKD ) or United States Dollar ( USD ). As of 31 December 2016, majority of the Group s assets and liabilities are denominated in RMB except that certain cash and borrowings are denominated in HKD or USD. The Company and all of its subsidiaries functional currency is RMB. Accordingly, cash and borrowings denominated in HKD or USD is subject to foreign exchange risk. Fluctuations in the exchange rates of HKD and USD against RMB will affect the Group s result of operations. The Group currently does not have a foreign currency hedging policy. However, management closely monitors the foreign exchange exposure and will take actions when necessary % 184,907, ,829,000 As at 31 December 2016, if RMB had strengthened/ weakened by 5%, against HKD and USD with all other variables held constant, post-tax profit for the year would have been RMB184,907,000 (2015: RMB243,829,000) higher/lower, mainly as a result of net foreign exchange gains/losses on translation of HKD and USD denominated bank deposits and borrowings. F-58 Future Land Development Holdings Limited

174 For the year ended 31 December FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS (Cont d) 3.1 Financial risk factors (Cont d) Market risk (Cont d) (ii) (ii) Price risk The Group is exposed to price risk because of investments held by the Group and classified on the consolidated statements of financial position as available-for-sale financial assets. In the opinion of the directors, the Group s exposure to price risk with regard to its investments is not significant since it is the Group s policy not to invest significant amounts that might have a detrimental impact to the Group s financial results. All investments must be approved by the Chairman of the Board before they may be entered into. The following table summarises the Group s other 5% comprehensive income increase/decrease as a result of gains/losses on equity securities classified as available for sale if the fair value of the securities increase/decrease by 5% Year ended 31 December RMB 000 RMB 000 5% 5 percent higher 16,308 12,664 5% 5 percent lower (16,308) (12,664) Future Land Development Holdings Limited F-59

175 For the year ended 31 December FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS (Cont d) 3.1 Financial risk factors (Cont d) Market risk (Cont d) (iii) (iii) Cash flow and fair value interest rate risk Except for cash deposits in the bank and certain balances in trade and other receivables, the Group has no other significant interest-bearing assets. 22 The Group s exposure to changes in interest rates is mainly attributable to its borrowings. Borrowings at variable rates expose the Group to cash flow interest rate risk. Borrowings at fixed rates expose the Group to fair value interest rate risk. The Group has not hedged its cash flow or fair value interest rate risk. The interest rate and terms of repayments of borrowings are disclosed in Note 22. Management does not anticipate significant impact to interest-bearing assets resulted from the changes in interest rates, because the interest rates of bank deposits and certain balances in trade and other receivables are not expected to change significantly. F-60 Future Land Development Holdings Limited

176 For the year ended 31 December FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS (Cont d) 3.1 Financial risk factors (Cont d) Market risk (Cont d) (iii) (iii) Cash flow and fair value interest rate risk (Cont d) As at 31 December 2016 and 2015, if interest rates on 50 borrowings with floating rates had been 50 basis points higher/lower with all other variables held constant, the 2016 post-tax profit and capitalised interest of the Group for the years ended 31 December 2016 and 2015 would have changed as follows: Year ended 31 December RMB 000 RMB 000 Post-tax profit increase/(decrease) basis points higher (3,641) (4,688) basis points lower 3,641 4,688 Capitalised interest increase/(decrease) basis points higher 20,093 13, basis points lower (20,093) (13,363) Future Land Development Holdings Limited F-61

177 For the year ended 31 December FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS (Cont d) 3.1 Financial risk factors (Cont d) Credit risk The Group has no significant concentrations of credit risk. The carrying amounts of bank deposits and trade and other receivables included in the consolidated statement of financial position represent the Group s maximum exposure to credit risk in relation to its financial assets Cash transactions are limited to high-credit-quality financial institutions. The table below shows the bank deposit balances as at 31 December 2016 and 2015: As at 31 December Counter party RMB 000 RMB 000 Deposits with the four major state-owned 4,577,684 4,423,855 banks of the PRC Deposits with other listed banks of the PRC 7,893,413 1,614,070 Deposits with other banks 1,281,198 1,718,280 13,752,295 7,756,205 Management does not expect any losses from non-performance of these counterparties. F-62 Future Land Development Holdings Limited

178 For the year ended 31 December FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS (Cont d) 3.1 Financial risk factors (Cont d) Credit risk (Cont d) The Group has policies in place to ensure that sales of properties are made to buyers with an appropriate financial strength and appropriate percentage of down payment. Meanwhile, the Group has the right to cancel the sales contract in the event that the buyers default in payment, and put the underlying properties back to the market for re-sale. Therefore, the credit risk from sales of properties is limited. Other receivables mainly comprise receivables from related parties, receivables from other investors of joint ventures and deposits made in the ordinary course of business. The Group closely monitors these other receivables to ensure actions are taken to recover these balances in the case of any risk of default Liquidity risk Management of the Group aims to maintain sufficient cash through internally generated sales proceeds and an adequate amount of committed credit facilities to meet its operation needs and commitments in respect of property projects. Future Land Development Holdings Limited F-63

179 For the year ended 31 December FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS (Cont d) 3.1 Financial risk factors (Cont d) Liquidity risk (Cont d) The table below analyses the Group s financial liabilities into relevant maturity groupings based on the remaining period as at 31 December 2016 and 2015 to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. Between Between Within 1 and 2 2 and 5 Over 1 year years years 5 years Total RMB 000 RMB 000 RMB 000 RMB 000 RMB As at 31 December 2016 Borrowings, principal 10,058,712 8,117,667 8,636, ,250 26,919,454 Interest payments on borrowings 1,497, , ,439 13,492 3,108,235 Trade and other payables 28,213,433 36,670 28,250,103 Dividends payable Guarantees in respect of mortgaged facilities granted to purchasers of the Group s properties (Note 37) 11,664, ,894 12,130,334 51,433,881 9,526,363 9,328, ,742 70,408, As at 31 December 2015 Borrowings, principal 3,870,860 7,303,020 7,157, ,188 18,848,658 Interest payments on borrowings 1,226, , ,562 59,603 3,052,644 Trade and other payables 19,645,278 19,645,278 Dividends payable 1,092 1, Guarantees in respect of mortgaged facilities granted to purchasers of the Group s properties (Note 37) 4,440, ,456 5,376,137 29,184,473 9,238,393 7,924, ,791 46,923, Note: The interest on borrowings is calculated based on borrowings held as at 31 December 2016 and 2015, respectively, without taking into account future borrowings. Floating-rate interests are estimated using the current interest rate as at 31 December 2016 and 2015, respectively. F-64 Future Land Development Holdings Limited

180 For the year ended 31 December FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS (Cont d) 3.1 Financial risk factors (Cont d) Liquidity risk (Cont d) Due to dynamic nature of the underlying business, the management of the Group is closely monitoring the risk of the liquidity and takes the following actions to manage the liquidity risk: i) i) prepares annual cash flow forecast and updates such forecast on a monthly basis to reflect the latest changes and monitor the liquidity risk closely; ii) ii) maintains strategic cooperation with major banks and other financial institutions to secure credit facilities where appropriate; iii) iii) continues to obtain longer term financing facilities, mainly issuance of senior notes, project bank loans with pledge of the Group s properties or other resources of funding which the Group considers appropriate; iv) iv) proactively promotes the sales of the Group s completed properties and pre-sales of properties under development. The Group also considers the flexibility of adjusting the price and volume on sale of properties for management of liquidity risk Capital risk management The Group s objectives when managing capital are to safeguard the Group s ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, issue new shares or sell assets to reduce debt. Future Land Development Holdings Limited F-65

181 For the year ended 31 December FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS (Cont d) 3.2 Capital risk management (Cont d) The Group monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings less cash and cash equivalents. Total capital is calculated as total equity, as shown in the consolidated statement of financial position, plus net debt The gearing ratios of the Group at 31 December 2016 and 2015 were as follows: As at 31 December RMB 000 RMB 000 Total borrowings 27,211,867 18,980,464 Less: Cash and cash equivalents (11,905,339) (6,478,861) Net debt 15,306,528 12,501,603 Total equity 15,175,405 13,463,348 Total capital 30,481,933 25,964,951 Gearing ratio 50% 48% The increase in the gearing ratio as at 31 December 2016 resulted primarily from the increase in the balance of total borrowings. F-66 Future Land Development Holdings Limited

182 For the year ended 31 December FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS (Cont d) 3.3 Fair value estimation The table below analyses financial instruments carried at fair value by valuation method. The different levels have been defined as follows: Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1). Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (Level 2). Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (Level 3). The available-for-sale financial assets of the Group are measured at fair value by Level The following table presents the Group s financial assets that are measured at fair value at 31 December 2016 and 2015 respectively. See Note 7 for disclosures of the investment properties that are measured at fair value. Level 1 Level 2 Level 3 Total RMB 000 RMB 000 RMB 000 RMB At 31 December 2016 Derivative financial instruments 154, ,615 Available-for-sale financial assets 434, , , , At 31 December 2015 Available-for-sale financial assets 337, , The changes in Level 3 instruments for the years ended 31 December 2016 and 2015 are presented in Note 11 and Note 12. Future Land Development Holdings Limited F-67

183 For the year ended 31 December FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS (Cont d) 3.3 Fair value estimation (Cont d) The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm s length basis. The instrument is included in Level 1. The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in Level 2. If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3. F-68 Future Land Development Holdings Limited

184 For the year ended 31 December CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The management makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are outlined below Development costs directly attributable to property development activities The Group allocates portions of land and development costs to properties held and under development for sale. As certain of the Group s property development projects are developed and completed by phases, the budgeted development costs of the whole project are dependent on the estimate on the outcome of total development. Based on the experience and the nature of the development undertaken, the management makes estimates and assumptions concerning the future events that are believed to be reasonable under the circumstances. Given the uncertainties involved in the property development activities, the related actual results may be higher or lower than the amount estimated at the end of the reporting period. Any change in estimates and assumptions would affect the Group s operating performance in future years Provision for impairment of properties held or under development for sale The management makes provision for impairment of properties held or under development for sale based on the estimate of the recoverable amount of the properties. Given the volatility of the property market in the PRC, the actual recoverable amount may be higher or lower than the estimate made as at the end of the reporting period. Any increase or decrease in the provision would affect the Group s operating performance in future years. Future Land Development Holdings Limited F-69

185 For the year ended 31 December CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (Cont d) 4.3 Land appreciation tax of the PRC The Group is subject to land appreciation tax in the PRC. However, since the implementation and settlement of the tax varies among various tax jurisdictions in cities of the PRC, significant estimate is required in determining the amount of the land appreciation tax. The Group recognises the land appreciation tax based on management s best estimates according to its understanding of the interpretation of tax rules by various tax authorities. The final tax outcome could be different from the amounts that were initially recorded, and these differences will impact the income tax expense in the periods in which such taxes have been finalised with local tax authorities Current and deferred income tax The Group is subject to corporate income tax in the PRC. Significant judgement is required in determining the provision for corporate income tax. There are many transactions and calculations for which the ultimate determination is uncertain during the ordinary course of business. Where the final tax outcome of these matters is different from the amounts that we initially recorded, such difference will impact the income tax expense in the period in which such determination is made. Deferred tax assets relating to certain temporary differences and tax losses are recognised when management considers to be probable that future taxable profit will be available against which the temporary differences or tax losses can be utilised. The outcome of their actual utilisation may be different Fair value of investment properties The fair value of investment properties is determined by using valuation techniques. Details of the judgement and assumptions have been disclosed in Note 7. F-70 Future Land Development Holdings Limited

186 For the year ended 31 December CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (Cont d) 4.6 Classification of subsidiary, joint venture and associate In the normal course of business, the Group develops properties together with other developers or institutions, through entering into co-operation agreements with these parties. The rights and obligations of the Group and the other parties are stipulated by respective co-operation agreements, article of associations of the project companies, etc. Because of the complexity of the arrangements, significant judgement is needed in determining whether the project company is subsidiary, joint venture or associate of the Group The Group makes judgement based on the substance of the arrangements and the definition of subsidiary, joint venture and associate as disclosed in Notes 2.2, 2.3 and Joint arrangements The Group has certain joint arrangements where the relevant contracts stipulate unanimous consent for all relevant key activities. The Group s joint arrangements are structured as limited liability companies and provide the Group and the parties to the agreements with rights to the net assets of the limited liability companies under the arrangements. Therefore, these arrangements are classified as joint ventures. Future Land Development Holdings Limited F-71

187 For the year ended 31 December B 2015 BB SEGMENT INFORMATION Management has determined the operating segments based on the reports reviewed by the chief operating decision maker (the CODM ) that are used to make strategic decisions. The chairman, Mr. Wang has been identified as the CODM. Following the restructure of certain businesses within the Group and Jiangsu Future Land Co., Ltd. (the former B share company or Jiangsu Future Land ) became wholly-owned by its parent Future Land Holdings Co., Ltd. through share swap during the second half of 2015, the previous presentation of segment information based on former B share company and Non-B share companies was no longer considered appropriate. Therefore new reporting segments have been adopted since the 2015 annual consolidated financial statements. The new reporting segments are as follows: A Future Land Holdings Co., Ltd., a company listed on the Shanghai Stock Exchange (the A share company or Future Land Holdings ). A A Property management and other service companies not within the A share company (the Non-A share companies ). F-72 Future Land Development Holdings Limited

188 For the year ended 31 December SEGMENT INFORMATION (Cont d) The two new operating segments are consistent with the way in which information is reported internally to the Group s CODM for the purpose of resources allocation and performance assessment. No operating segments have been aggregated to form the above reportable segments. A A A A 40(b) The A share company is mainly engaged in development of residential properties and mixed-use complexes for sale and investment, while the Non-A share companies are mainly engaged in property management and other services including certain newly established businesses which are at state-up stage. Corporate expenses are also primarily included in the Non-A share companies segment. All the property development projects are in the PRC, and accordingly majority of the revenue of the Group are derived from the PRC and most of the assets are located in the PRC. In April 2016, the residential property management business included in the Non-A share companies segment was disposed to the Company s parent company, Wealth Zone Hong Kong (Note 40(b)). The CODM assesses the performance of the operating segments based on a measure of revenue and profit before income tax. The measurement basis excludes the effects of income tax expense. Future Land Development Holdings Limited F-73

189 For the year ended 31 December SEGMENT INFORMATION (Cont d) Year ended 31 December 2016 A A A share company Non-A share companies Total segment Elimination Total Group RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 Segment revenue 27,969, ,654 28,267,936 (35,842) 28,232,094 Segment profit/(loss) before income tax expense 4,697,605 (436,310) 4,261,295 (125,927) 4,135,368 Fair value gains on investment properties 582, , ,150 Finance income 144, , ,610 (206,383) 161,227 Finance costs (379,484) (768,529) (1,148,013) 206,383 (941,630) Depreciation and amortisation (160,392) (65,198) (225,590) (225,590) Share of results of associates 11,983 (10,487) 1,496 1,496 Share of results of joint ventures 176, , ,565 A reconciliation to profit for the year is as follows: Total segment profits before income tax expense after elimination 4,135,368 Income tax expense (1,668,208) Profit for the year 2,467, As at 31 December 2016 Segment assets 103,170,607 4,722, ,892,838 (3,013,382) 104,879,456 Segment assets include: Investments in associates 201, , , ,623 Investments in joint ventures 4,348,312 4,348,312 4,348,312 Additions to non-current assets (other than financial instruments and deferred tax assets) 3,366, ,397 3,699,166 3,699,166 Segment liabilities 86,802,653 4,555,602 91,358,255 (1,654,204) 89,704,051 F-74 Future Land Development Holdings Limited

190 For the year ended 31 December SEGMENT INFORMATION (Cont d) Year ended 31 December 2015 A A A share company Non-A share companies Total segment Elimination Total Group RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 Segment revenue 23,568, ,231 23,945,024 (109,135) 23,835,889 Segment profit/(loss) before income tax expense 3,925,413 (510,438) 3,414,975 (51,021) 3,363,954 Fair value gains on investment properties 815, , ,106 Finance income 108, , ,410 (400,277) 136,133 Finance costs (210,722) (840,262) (1,050,984) 400,277 (650,707) Depreciation and amortisation (94,779) (12,598) (107,377) (107,377) Share of results of associates 123,269 (19,459) 103, ,810 Share of results of joint ventures (61,905) (61,905) (61,905) A reconciliation to profit for the year is as follows: Total segment profits before income tax expense after elimination 3,363,954 Income tax expense (1,507,717) Profit for the year 1,856, As at 31 December 2015 Segment assets 67,802,116 8,346,038 76,148,154 (5,329,261) 70,818,893 Segment assets include: Investments in associates 169, , , ,127 Investments in joint ventures 2,019,775 2,019,775 2,019,775 Additions to non-current assets (other than financial instruments and deferred tax assets) 5,469, ,425 5,809,996 5,809,996 Segment liabilities 53,930,586 8,754,220 62,684,806 (5,329,261) 57,355,545 Future Land Development Holdings Limited F-75

191 For the year ended 31 December PROPERTY, PLANT AND EQUIPMENT Furniture, Motor fittings and Construction Leasehold Buildings vehicles equipment in progress improvements Total RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB At 1 January 2016 Cost 1,572,846 58, , , ,777 2,445,976 Accumulated depreciation (34,917) (18,683) (67,610) (63,353) (184,563) Net book value 1,537,929 39, , ,128 64,424 2,261, Year ended 31 December 2016 Opening net book amount 1,537,929 39, , ,128 64,424 2,261, Acquisition of subsidiaries (Note 34) Additions 36,302 12, , ,995 75, ,645 Completion of construction in progress 229,240 (229,240) 35 Disposals (Note 35) (3,605) (1,667) (5,272) Cost adjustment 14,346 (12,177) 2, Disposal of subsidiaries (Note 40) (3,370) (118) (4,762) (250) (8,500) 28 Depreciation charge (Note 28) (64,548) (6,526) (102,339) (40,201) (213,614) Closing net book amount 1,520,659 41, ,127 62,706 99,810 2,443, At 31 December 2016 Cost 1,620,124 66, ,076 62, ,364 2,841,178 Accumulated depreciation (99,465) (25,209) (169,949) (103,554) (398,177) Net book value 1,520,659 41, ,127 62,706 99,810 2,443,001 F-76 Future Land Development Holdings Limited

192 For the year ended 31 December PROPERTY, PLANT AND EQUIPMENT (Cont d) Buildings Motor vehicles Furniture, fittings and equipment Construction in progress Leasehold improvements Total RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB At 1 January 2015 Cost 499,095 44, ,361 58, ,484 Accumulated depreciation (12,928) (15,047) (30,341) (31,016) (89,332) Net book value 486,167 29, ,020 27, , Year ended 31 December 2015 Opening net book amount 486,167 29, ,020 27, , Acquisition of subsidiaries (Note 34) 325, , ,584 Additions 751,079 14, , ,128 69,281 1,102, Disposals (Note 35) (612) (660) (1,272) Cost adjustment (2,491) (2,491) 28 Depreciation charge (Note 28) (21,989) (4,752) (41,187) (32,337) (100,265) Closing net book amount 1,537,929 39, , ,128 64,424 2,261, At 31 December 2015 Cost 1,572,846 58, , , ,777 2,445,976 Accumulated depreciation (34,917) (18,683) (67,610) (63,353) (184,563) Net book value 1,537,929 39, , ,128 64,424 2,261, ,983, ,816,000 5,946, ,830, ,685, ,619,000 The Group s depreciation charges of RMB103,983,000 (2015: RMB50,816,000) have been included in cost of sales, RMB5,946,000 (2015: RMB6,830,000) in selling and marketing expenses and RMB103,685,000 (2015: RMB42,619,000) in administrative expenses ,082,504, ,805, Property, plant and equipment with a total carrying amount of RMB1,082,504,000 as at 31 December 2016 (2015: RMB642,805,000) were pledged as collateral for the Group s borrowings (Note 22). Future Land Development Holdings Limited F-77

193 For the year ended 31 December INVESTMENT PROPERTIES Year ended 31 December RMB 000 RMB 000 Opening balance 10,854,000 5,936,000 Additions 3,320,918 4,024,025 Capitalised subsequent expenditure (59,242) Net gains from fair value adjustments 582, , Disposal of a subsidiary (Note 40) (1,191,000) Transfer from properties held for sale 78,869 Closing balance 13,506,826 10,854,000 Investment properties held by the Group are all commercial properties located in the PRC ,162, ,468,419 Borrowing costs capitalised in investment properties for the year ended 31 December 2016 were approximately RMB69,162,409 (2015: RMB67,468,419) % % The capitalisation rate of borrowings was 6.44% for the year ended 31 December 2016 (2015: 5.47%). Fair value hierarchy Fair value of all of the Group s investment properties are measured at Level 3, with significant unobservable inputs. There were no transfers between Level 1, 2 and 3 during the year. F-78 Future Land Development Holdings Limited

194 For the year ended 31 December INVESTMENT PROPERTIES (Cont d) Fair value measurements using significant unobservable inputs (Level 3) Completed Under development Total RMB 000 RMB 000 RMB At 1 January ,077,000 2,777,000 10,854,000 Additions 2,019 3,318,899 3,320,918 Completion of projects 2,804,158 (2,804,158) Capitalised subsequent expenditure (59,242) (59,242) Net gains from fair value adjustments 395, , , Disposal of a subsidiary (Note 40) (1,191,000) (1,191,000) At 31 December ,028,826 3,478,000 13,506,826 Total gains or losses for the year included in profit or loss for assets held at the end of the year, under Fair value gains on investment properties 395, , ,150 Change in unrealised gains or losses for the year included in profit or loss for assets held at the end of the year 310, , ,612 Future Land Development Holdings Limited F-79

195 For the year ended 31 December INVESTMENT PROPERTIES (Cont d) Fair value measurements using significant unobservable inputs (Level 3) (Cont d) Completed Under development Total RMB 000 RMB 000 RMB At 1 January ,361,000 1,575,000 5,936,000 Additions 934,347 3,089,678 4,024,025 Completion of projects 2,396,419 (2,396,419) Net gains from fair value adjustments 306, , ,106 Transfer from properties held for sale 78,869 78, At 31 December ,077,000 2,777,000 10,854,000 Total gains or losses for the year included in profit or loss for assets held at the end of the year, under Fair value gains on investment properties 306, , ,106 Change in unrealised gains or losses for the year included in profit or loss for assets held at the end of the year 306, , ,106 Valuation processes of the Group All investment properties were revalued as at 31 December 2016 and 2015 by DTZ Debenham Tie Leung Limited, the independent professional qualified valuer. The Group s finance team will review the valuation performed by the independent valuers, including: verifies all major inputs to the independent valuation report; assesses property valuation movements when compared to the prior year valuation report; holds discussions with independent valuers. F-80 Future Land Development Holdings Limited

196 For the year ended 31 December INVESTMENT PROPERTIES (Cont d) Valuation techniques For investment properties under construction, the Group adopted investment approach, and have taken into account the expended construction costs and the costs that will be expended to complete the development to reflect the quality of the completed development on the basis that the properties will be developed and completed in accordance with the Group s latest development plan. For completed investment properties, valuations were based on investment approach by capitalisation of the net rental income derived from the existing tenancy agreements with due allowance for reversionary income potential of the properties and by reference to comparable price in an active market. There were no changes to the valuation techniques during the year. Future Land Development Holdings Limited F-81

197 For the year ended 31 December INVESTMENT PROPERTIES (Cont d) Information about fair value measurements using significant unobservable inputs (Level 3): Description Fair value at 31 December 2016 Valuation Unobservable (RMB 000) technique(s) inputs Range of unobservable inputs Relationship of unobservable inputs to fair value 10,028,826 Completed (2015: Investment Term yield commercial 8,077,000) approach The higher the term property 4.0%-6.0% (2015 yield, the lower the fair 4.0%-5.5%) value Term yield of 4.0%-6.0% (2015: 4.0%-5.5%), taking into account of yield generated from comparable properties and adjustment to reflect the certainty of term income secured and to be received. Reversionary yield 4.5%-6.0% The higher the reversionary ( %-6.5%) yield, the lower the fair Reversionary yield of 4.5%-6.0% value (2015: 5.5%-6.5%), taking into account annual unit market rental income and unit market value of the comparable properties Market unit rent 32 The higher the market unit of individual unit 352 rent, the higher the fair RMB32 RMB359 (2015: RMB32 value RMB352) per square metre per month F-82 Future Land Development Holdings Limited

198 For the year ended 31 December INVESTMENT PROPERTIES (Cont d) Information about fair value measurements using significant unobservable inputs (Level 3): (Cont d) Description Fair value at 31 December 2016 Valuation Unobservable (RMB 000) technique(s) inputs Range of unobservable inputs Relationship of unobservable inputs to fair value 3,478,000 Commercial (2015: Reversionary yield property under 2,777,000) Investment 6.0% 6.5% 2015 The higher the reversionary development approach with 6.5% yield, the lower the fair estimated costs Reversionary yield of 6.0%-6.5% value to complete (2015: 6.5%), taking into account annual unit market rental income and unit market value of the comparable properties Market unit rent 23 The higher the market unit of individual unit 190 rent, the higher the fair RMB18 RMB176 (2015: value RMB23 RMB190) per square metre per month 74,297, ,111, Market unit rent 203,435,000 The higher the estimated of individual unit 394,538,000 construction costs, the RMB74,297,000 RMB505,111,000 lower the fair value (2015: RMB203,435,000 RMB394,538,000) 10% 30% % 25% 10% 30% (2015: 13% 25%) The higher the profit margin Estimated profit of property value required, the lower the fair margin required value to hold and develop property to completion Future Land Development Holdings Limited F-83

199 For the year ended 31 December % INVESTMENT PROPERTIES (Cont d) Information about fair value measurements using significant unobservable inputs (Level 3): (Cont d) The rental rates were estimated depending on the actual location, type and quality of the properties, and taking into account market data and projections at the valuation date. The Group considers the market data when estimating the yield rate. Construction costs incurred are based on the actual costs incurred as reflected in the accounting records, while the construction costs to incur are based on the most updated budget for the construction of the properties. Were the rental rate, yield rate, the construction costs to incur and the profit margin required assumed to increase or decrease by 10% from management s estimate, the carrying amount of investment properties as at 31 December 2016 and 2015 would have changed as follows: As at 31 December RMB 000 RMB 000 Investment properties increase/(decrease) 10% rental rate 10 percent higher 1,258,656 1,163,503 10% rental rate 10 percent lower (1,274,039) (1,172,985) Investment properties increase/(decrease) 10% yield rate used 10 percent higher (1,046,057) (913,371) 10% yield rate used 10 percent lower 1,170,791 1,005,035 Investment properties increase/(decrease) 10% construction costs to incur 10 percent higher (237,915) (222,727) 10% construction costs to incur 10 percent lower 238, ,442 Investment properties increase/(decrease) 10% profit margin required 10 percent higher (83,506) (62,282) 10% profit margin required 10 percent lower 86,594 76,588 F-84 Future Land Development Holdings Limited

200 For the year ended 31 December INVESTMENT PROPERTIES (Cont d) For completed properties, valuations were based on either capitalisation of net rental income derived from the existing tenancies with allowance for the reversionary income potential of the properties or on direct comparison approach assuming sale of each of these properties in its existing state with the benefit of vacant possession by making reference to comparable sales transactions as available in the relevant market. The following rental income from completed investment properties has been recognised in the consolidated statement of income: Year ended 31 December RMB 000 RMB 000 Rental income 230, , ,532,712, ,534,031, Investment properties with a total carrying amount of RMB2,532,712,000 as at 31 December 2016 (2015: RMB2,534,031,000) were pledged as collateral for the Group s borrowings (Note 22). Future Land Development Holdings Limited F-85

201 For the year ended 31 December INTANGIBLE ASSETS Trademarks Computer software Total RMB 000 RMB 000 RMB At 1 January 2016 Cost ,078 55,878 Accumulated amortisation (800) (18,768) (19,568) Net book amount 36,310 36, Year ended 31 December 2016 Opening net book amount 36,310 36,310 Additions 30,685 30,685 Disposals (14,951) (14,951) 40 Disposal of a subsidiary (Note 40) (2,844) (2,844) 28 Amortisation charge (Note 28) (11,976) (11,976) Closing net book amount 37,224 37, At 31 December 2016 Cost ,968 68,768 Accumulated amortisation (800) (30,744) (31,544) Net book amount 37,224 37, At 1 January 2015 Cost ,230 30,030 Accumulated amortisation (800) (11,656) (12,456) Net book amount 17,574 17, Year ended 31 December 2015 Opening net book amount 17,574 17, Acquisition of subsidiaries (Note 34) 1 1 Additions 25,847 25, Amortisation charge (Note 28) (7,112) (7,112) Closing net book amount 36,310 36, At 31 December 2015 Cost ,078 55,878 Accumulated amortisation (800) (18,768) (19,568) Net book amount 36,310 36, The Group s amortisation charges of intangible assets have all been included in administrative expenses for the years ended 31 December 2016 and F-86 Future Land Development Holdings Limited

202 For the year ended 31 December INVESTMENTS IN ASSOCIATES Year ended 31 December RMB 000 RMB 000 Opening balance 300, ,317 Additions 220,000 50,000 Share of results 1, ,810 Ending balance 521, , Nature of investments in associates as at 31 December 2016 and Place of business/ % of ownership interest Measurement Name of entity country of incorporation as at 31 December method Shanghai Lan Tian Business Development Property Co., Ltd. ( Shanghai Lan Tian ) (a) Shanghai Wan Zhi Cheng Real Estate Development Co., Ltd. ( Shanghai Wan Zhi Cheng ) (a) (b) Atlantic Modular System Ltd. ( AMS ) (b) Shanghai, PRC Shanghai, PRC Zhenjiang Jiangsu, PRC 25% 25% Equity 50% 50% Equity 28% 26% Equity Future Land Development Holdings Limited F-87

203 For the year ended 31 December INVESTMENTS IN ASSOCIATES (Cont d) Nature of investments in associates as at 31 December 2016 and 2015 (Cont d) Place of business/ % of ownership interest Measurement Name of entity country of incorporation as at 31 December method (c) Jiangsu Minying Investment Holdings Co., Ltd. ( Jiangsu Minying Investment ) (c) (d) Shanghai Limo Network Technology Co., Ltd ( Shanghai Limo ) (d) (e) Suzhou Golden Century Real Estate Co., Ltd. ( Suzhou Golden Century ) (e) Shanghai Shifeng Culture Development Co., Ltd. Shanghai Rensu Digital Technology Co., Ltd. Wuxi Jiangsu, PRC Shanghai, PRC Suzhou Jiangsu, PRC Shanghai, PRC Shanghai, PRC 11.63% Equity 10% Equity 50% Equity 20% Equity 20% Equity F-88 Future Land Development Holdings Limited

204 For the year ended 31 December INVESTMENTS IN ASSOCIATES (Cont d) (a) % (a) Shanghai Wan Zhi Cheng was established on 29 March The Group owns 50% of equity interest in this company. 50% 50% The Group accounts for its investment in Shanghai Wan Zhi Cheng as an associate although the Group holds 50% of equity interest. According to the contract with the other 50% equity interest holder of Shanghai Wan Zhi Cheng, the other investor controls Shanghai Wan Zhi Cheng with majority seats on the board of directors and other contractual rights. The Group, however, has significant influence over Shanghai Wan Zhi Cheng. (b) % 100,000, ,000,00022% 26% % (b) The Group acquired 22% interest of AMS in December 2014 at a consideration of RMB100,000,000. The Group further injected a capital of RMB50,000,000 in June 2015, thereby further increasing equity interest from 22% to 26%. The equity interest was further increased to 28% in (c) 1,000,000, % ,000,000 (c) The Group committed a total capital of RMB1,000,000,000 to Jiangsu Minying Investment, accounting for 11.63% of the total capital of Jiangsu Minying Investment. As of 31 December 2016, RMB200,000,000 had been contributed % 7 The Group accounts for its investment in Jiangsu Minying Investment as an associate although the Group holds only 11.63% of the equity interest. According to the investment agreement and articles of association, the Group can nominate one director out of the total 7 directors, and hence has significant influence over Jiangsu Minying Investment. Future Land Development Holdings Limited F-89

205 For the year ended 31 December INVESTMENTS IN ASSOCIATES (Cont d) (d) % 4,000, (d) The Group acquired 10% interest of Shanghai Limo in June 2016 at a consideration of RMB4,000,000, which had been paid as of 31 December % The Group accounts for its investment in Shanghai Limo as an associate although the Group holds only 10% of the equity interest. According to the investment agreement and articles of association, the Group has one seat on the board of directors consisting of 3 directors, and has a significant influence over Shanghai Limo. (e) % 50% (e) The Group disposed 50% of equity interest in Suzhou Golden Century to the other investor on 26 November 2016 and retained the remaining 50% equity interest. 50% 50% The Group accounts for its remaining investment in Suzhou Golden Century as an associate although the Group holds 50% of equity interest. According to the contract with the other 50% equity interest holder of Suzhou Golden Century, the other investor controls Suzhou Golden Century with majority seats on the board of directors and other contractual rights. The Group, however, has significant influence over Suzhou Golden Century. 36(d) All of the Group s associates are private companies and there are no quoted market prices available for such equity interests. The Group s commitments to its investments in associates are presented in Note 36(d). There are no contingent liabilities relating to the Group s interests in associates. F-90 Future Land Development Holdings Limited

206 For the year ended 31 December INVESTMENTS IN ASSOCIATES (Cont d) Summarised financial information for material associates Set out below are the summarised financial information for associates which are accounted for using the equity method. Summarised statement of financial position for material associates Jiangsu Minying Investment Shanghai Wan Zhi Cheng AMS As at 31 December As at 31 December As at 31 December RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 Current Assets 332, , ,433 98, ,664 Liabilities (236,936) (117,676) (229,557) (246,111) (226,919) Total current net assets/(liabilities) 95, , ,876 (147,477) (118,255) Non-current Assets 1,689, , ,111 Liabilities Total non-current net assets/(liabilities) 1,689, , ,111 Net assets 1,785, , ,170 48,871 85,856 Future Land Development Holdings Limited F-91

207 For the year ended 31 December INVESTMENTS IN ASSOCIATES (Cont d) Summarised statement of comprehensive income for material associates Jiangsu Minying Investment Shanghai Wan Zhi Cheng AMS Year ended 31 December Year ended 31 December Year ended 31 December RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 Revenue 1,682 35,050 1,505, , ,563 Profit/(loss) before income tax 87,485 31, ,742 (36,985) (71,667) Income tax (expense)/credit (21,862) (7,996) (82,205) Post-tax profit/(loss) 65,623 23, ,537 (36,985) (71,667) Other comprehensive income Total comprehensive income/(loss) 65,623 23, ,537 (36,985) (71,667) Dividends received from associates The information above reflects the amounts presented in the financial statements of the associates, adjusted for differences in accounting policies between the Group and the associates, and not the Group s share of those amounts. F-92 Future Land Development Holdings Limited

208 For the year ended 31 December INVESTMENTS IN ASSOCIATES (Cont d) Reconciliation of summarised financial information for material associates Reconciliation of the summarised financial information presented to the carrying amounts of the Group s interests in associates. Jiangsu Minying Investment Shanghai Wan Zhi Cheng AMS Year ended 31 December Year ended 31 December Year ended 31 December RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 Opening net assets 319,170 72,633 85, ,523 Profit/(loss) for the year 65,623 23, ,537 (36,985) (71,667) Other comprehensive income () Capital (reduction)/injection 1,720,000 50,000 Closing net assets 1,785, , ,170 48,871 85,856 Interests in associates 207, , ,585 12,760 22,417 Goodwill and adjustments (7,668) 107, ,125 Carrying value 200, , , , ,542 Future Land Development Holdings Limited F-93

209 For the year ended 31 December INVESTMENTS IN JOINT VENTURES Year ended 31 December RMB 000 RMB 000 Opening balance 2,019, ,055 Additions 2,886,148 1,220,625 Capital deduction from a joint venture (700) Share of results 176,565 (61,905) Change of a joint venture to subsidiary (733,476) Ending balance 4,348,312 2,019, Nature of investments in joint ventures as at 31 December 2016 and Place of business/ % of ownership interest Measurement Name of entity country of incorporation as at 31 December method () Shanghai Xincheng Xudi Real Estate Co., Ltd. ( Shanghai Xudi ) () (a) Suzhou Future Land Wanrui Real Estate Co., Ltd. ( Suzhou Wanrui ) (a) () (a) (f) Nanjing Future Land Wanlong Real Estate Co., Ltd. ( Nanjing Wanlong ) (a) (f) Qingdao Zhuoyue Future Land Property Co., Ltd. ( Qingdao Zhuoyue ) Shanghai, PRC Suzhou Jiangsu, PRC Nanjing Jiangsu, PRC Qiangdao Shangdong, PRC 50% 50% Equity 68% 68% Equity 70% Equity 50% 50% Equity F-94 Future Land Development Holdings Limited

210 For the year ended 31 December INVESTMENTS IN JOINT VENTURES (Cont d) Nature of investments in joint ventures as at 31 December 2016 and 2015 (Cont d) Place of business/ % of ownership interest Measurement Name of entity country of incorporation as at 31 December method (a) Shanghai Henggu Real Estate Co., Ltd. ( Shanghai Henggu ) (a) (a) Shanghai Songming Real Estate Development Co., Ltd. ( Shanghai Songming ) (a) (a) Kunshan Derui Real Estate Co., Ltd. ( Kunshan Derui ) (a) (a) Changshu Zhongzhi Real Estate Co., Ltd. ( Changshu Zhongzhi ) (a) (a) Changshu Wan Zhong Cheng Real Estate Co., Ltd. ( Changshu Wan Zhong Cheng ) (a) Shanghai, PRC Shanghai, PRC Kushan Jiangsu, PRC Changshu Jiangsu, PRC Changshu Jiangsu, PRC 28% 28% Equity 16% 16% Equity 40% 40% Equity 65% 65% Equity 10% 10% Equity Future Land Development Holdings Limited F-95

211 For the year ended 31 December INVESTMENTS IN JOINT VENTURES (Cont d) Nature of investments in joint ventures as at 31 December 2016 and 2015 (Cont d) Place of business/ % of ownership interest Measurement Name of entity country of incorporation as at 31 December method (a) (b) Nanjing Future Land Guanghong Real Estate Co., Ltd. ( Nanjing Guanghong ) (a) (b) ) Suzhou Chenghong Real Estate Development Co., Ltd. ( Suzhou Chenghong ) ) Shanghai Quankun Investment Co., Ltd. ( Shanghai Quankun ) ) Shanghai Xinyao Investment Co., Ltd. ( Shanghai Xinyao ) ) (a) (c) Chengdu Future Land Wanbo Real Estate Development Co., Ltd. ( Chengdu Wanbo ) (a) (c) Nanjing Jiangsu, PRC Suzhou Jiangsu, PRC Shanghai, PRC Shanghai, PRC Chengdu Sichuan, PRC 31% 69% Equity 50% 50% Equity 50% 50% Equity 50% 50% Equity 11% 11% Equity F-96 Future Land Development Holdings Limited

212 For the year ended 31 December INVESTMENTS IN JOINT VENTURES (Cont d) Nature of investments in joint ventures as at 31 December 2016 and 2015 (Cont d) Place of business/ % of ownership interest Measurement Name of entity country of incorporation as at 31 December method ) (a) Taizhou Future Land Wanbo Real Estate Development Co., Ltd. ( Taizhou Wanbo ) (a) ) Yiwu Injoy Real Estate Development Co., Ltd. ( Yiwu Injoy ) Suzhou Shengming Real Estate Co., Ltd. ( Suzhou Shengming ) (a) (d) Nanjing Future Land Chuangjin Real Estate Co., Ltd. ( Nanjing Chuangjin ) (a) (d) (a) (h) Hangzhou Jiahao Real Estate Development Co., Ltd. ( Hangzhou Jiahao ) (a) (h) Taizhou Zhejiang, PRC Yiwu Zhejiang, PRC Suzhou Jiangsu, PRC Nanjing Jiangsu, PRC Hangzhou Zhejiang, PRC 40% 40% Equity 50% 50% Equity 50% Equity 70% Equity 65% Equity Future Land Development Holdings Limited F-97

213 For the year ended 31 December INVESTMENTS IN JOINT VENTURES (Cont d) Nature of investments in joint ventures as at 31 December 2016 and 2015 (Cont d) Place of business/ % of ownership interest Measurement Name of entity country of incorporation as at 31 December method (a) (e) Shanghai Jiapeng Real Estate Development Co., Ltd. ( Shanghai Jiapeng ) (a) (e) (a) (g) Tianjin Future Land Injoy Real Estate Development Co., Ltd. ( Tianjin Injoy ) (a) (g) (a) Suzhou Baixiang Property Co., Ltd. ( Suzhou Baixiang ) (a) (a) Shanghai Ruitao Real Estate Development Co., Ltd. ( Shanghai Ruitao ) (a) (a) Hangzhou Wanzhao Real Estate Co., Ltd. ( Hangzhou Wanzhao ) (a) (a) Suzhou Jiazhong Real Estate Development Co., Ltd. ( Suzhou Jiazhong ) (a) Shanghai, PRC Tianjin, PRC Suzhou Jiangsu, PRC Shanghai, PRC Hangzhou Zhejiang, PRC Suzhou Jiangsu, PRC 51% Equity 70% Equity 30% Equity 30% Equity 34% Equity 35% Equity F-98 Future Land Development Holdings Limited

214 For the year ended 31 December INVESTMENTS IN JOINT VENTURES (Cont d) Nature of investments in joint ventures as at 31 December 2016 and 2015 (Cont d) Place of business/ % of ownership interest Measurement Name of entity country of incorporation as at 31 December method (a) Shanghai Jiayu Real Estate Co., Ltd. ( Shanghai Jiayu ) (a) (a) Nanjing Minghongxin Real Estate Development Co., Ltd. ( Nanjing Minghongxin ) (a) (a) Nanjing Xinbaohong Real Estate Co., Ltd. ( Nanjing Xinbaohong ) (a) (a) Hangzhou Future Land Songjun Real Estate Development Co., Ltd. ( Hangzhou Songjun ) (a) Shanghai, PRC Nanjing Jiangsu, PRC Nanjing Jiangsu, PRC Hangzhou Zhejiang, PRC 51% Equity 30% Equity 34% Equity 35% Equity Future Land Development Holdings Limited F-99

215 For the year ended 31 December INVESTMENTS IN JOINT VENTURES (Cont d) Nature of investments in joint ventures as at 31 December 2016 and 2015 (Cont d) Place of business/ % of ownership interest Measurement Name of entity country of incorporation as at 31 December method (a) Hangzhou Bintong Real Estate Development Co., Ltd. ( Hangzhou Bintong ) (a) (a) Yongqing Yintai Future Land Construction and Development Co., Ltd. ( Yongqing Yintai ) (a) Tianjin Future Land Baojun Real Estate Development Co., Ltd. ( Tianjin Baojun ) Shanghai Xiyue Real Estate Development Co., Ltd. ( Shanghai Xiyue ) (a) (a) Wuhan Qingneng Xinrong Property Co., Ltd. ( Wuhan Qingneng ) (a) Hangzhou Zhejiang, PRC Langfang Hebei, PRC Tianjin, PRC Shanghai, PRC Wuhan Hubei, PRC 25% Equity 70% Equity 50% Equity 14% Equity 28% Equity F-100 Future Land Development Holdings Limited

216 For the year ended 31 December INVESTMENTS IN JOINT VENTURES (Cont d) Nature of investments in joint ventures as at 31 December 2016 and 2015 (Cont d) Place of business/ % of ownership interest Measurement Name of entity country of incorporation as at 31 December method (a) Nanjing Huilong Real Estate Co., Ltd. ( Nanjing Huilong ) (a) (a) Yangzhou Future Land Yuesheng Real Estate Development Co., Ltd. ( Yangzhou Yuesheng ) (a) (a) Suzhou Yusheng Real Estate Development Co., Ltd. ( Suzhou Yusheng ) (a) Nanjing Jiangsu, PRC Yangzhou Jiangsu, PRC Suzhou Jiangsu, PRC 34% Equity 80% Equity 65% Equity Future Land Development Holdings Limited F-101

217 For the year ended 31 December INVESTMENTS IN JOINT VENTURES (Cont d) Nature of investments in joint ventures as at 31 December 2016 and 2015 (Cont d) (a) 50% (a) The Group accounts for its investments in these companies as joint ventures although the Group holds more or less than 50% of equity interest. According to the investment agreements and articles of associations, the Group and the other investors will jointly control the project development and sales of properties as well as other key relevant activities of these companies. (b) ,000 69% 31% (b) The Group reduced its investment in Nanjing Guanghong by RMB700,000 in June 2016, with interest decreased from 69% to 31%. (c) 11% 49% (c) The Group accounts for its investment in Chengdu Wanbo as a joint venture although the Group holds 11% of equity interest. According to the investment agreement and articles of association, the Group holds 49% of dividend rights and will jointly control the project development and sales of properties as well as other key relevant activities of Chengdu Wanbo with the other investors. (d) ,000,000 (d) Nanjing Chuangjin was established in November 2015 as a subsidiary. The Group s interest in Nanjing Chuangjin decreased to 70.15% after a RMB200,000,000 capital injection from another investor in June % (e) % (e) Shanghai Jiapeng was acquired in March The Group owns 51% of equity interest in this company. According to the investment agreement, the Group may at its option exit the joint venture, as certain conditions are met, at the market price The early exit option is regarded as embedded derivative not closely related to the host contract. The board of directors is of the view that the fair values of the above early exit option were insignificant on initial recognition and as at 31 December F-102 Future Land Development Holdings Limited

218 For the year ended 31 December INVESTMENTS IN JOINT VENTURES (Cont d) Nature of investments in joint ventures as at 31 December 2016 and 2015 (Cont d) (f) ,000, % (f) The Group accounts for its investment in Nanjing Wanlong as a joint venture since The Group s interest in Nanjing Wanlong increased to 100% after a RMB300,000,000 capital reduction from another investor in July (g) 70% 90% (g) The Group accounts for its investment in Tianjin Injoy as a joint venture. According to the investment agreement and articles of association, the Group holds 70% of equity interest, but is entitled to 90% of the profit distribution. (h) % (h) On 29 February 2016, the Group acquired 65% equity interests in Hangzhou Jiahao. The Group accounts for its investment in Hangzhou Jiahao as a joint venture. Based on the valuation as of the acquisition date, the total identifiable net assets of Hangzhou Jiahao is similar to the consideration paid. As such, no goodwill was recognised. All of the Group s joint ventures are private companies and there are no quoted market prices available for such equity interests. 36(d) The commitments relating to the Group s interests in joint ventures are presented in Note 36(d). There are no contingent liabilities relating to the Group s interests in the joint ventures. Summarised financial information for material joint ventures Set out below are the summarised financial information for material joint ventures which are accounted for using the equity method. Future Land Development Holdings Limited F-103

219 For the year ended 31 December INVESTMENTS IN JOINT VENTURES (Cont d) Summarised statement of financial position for material joint ventures Suzhou Shanghai Xudi Suzhou Wanrui Changshu Zhongzhi Taizhou Wanbo Shengming Suzhou Yusheng Nanjing Chuangjin Tianjin Injoy Yangzhou Yuesheng As at As at 31 December As at 31 December As at 31 December As at 31 December 31 December As at 31 December As at 31 December As at 31 December As at 31 December RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 Current Assets 511,882 1,202,546 2,008,145 1,979,754 2,136,330 1,290,008 3,176,656 2,008,096 3,258,149 10,802,294 2,647,629 2,407, ,610 Liabilities (201,889) (491,057) (1,188,715) (1,230,162) (1,518,812) (43,848) (1,646,558) (822,275) (2,070,047) (3,853,691) (46,360) (3,053) (495,256) Total current net assets 309, , , , ,518 1,246,160 1,530,098 1,185,821 1,188,102 6,948,603 2,601,269 2,404, ,354 Non-current Assets ,205 3,879 1,031 7,381 3, ,523 24,790 13,794 Liabilities (550,000) (239,500) (490,000) (200,000) (800,000) (611,616) (200,000) (350,000) (6,350,000) (1,950,000) (1,824,592) (2,149) Total non-current net assets/(liabilities) 79 (549,893) (239,356) (480,795) (196,121) (798,969) (604,235) (196,107) (349,998) (6,349,592) (1,945,477) (1,799,802) 11,645 Net assets 310, , , , , , , , , , , , ,999 F-104 Future Land Development Holdings Limited

220 For the year ended 31 December INVESTMENTS IN JOINT VENTURES (Cont d) Summarised statement of comprehensive income for material joint ventures (Cont d) Suzhou Shanghai Xudi Suzhou Wanrui Changshu Zhongzhi Taizhou Wanbo Shengming Suzhou Yusheng Nanjing Chuangjin Tianjin Injoy Yangzhou Yuesheng Year ended Year ended 31 December Year ended 31 December Year ended 31 December Year ended 31 December 31 December Year ended 31 December Year ended 31 December Year ended 31 December Year ended 31 December RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 Revenue 1,240, ,291 1,456,910 Profit/(loss) before income tax 213,662 62, ,677 (36,683) (34,258) (3,725) (84,021) (13,198) (69,204) (1,309) (17,916) 1,679 (11,483) Income tax (expense)/ credit (65,186) (13,865) (103,400) 8,990 8, ,170 2,912 14, ,466 3,084 4,483 Post-tax profit/(loss) 148,476 48, ,277 (27,693) (25,794) (2,809) (63,851) (10,286) (55,134) (989) (13,450) 4,763 (7,000) Other comprehensive income Total comprehensive income/(loss) 148,476 48, ,277 (27,693) (25,794) (2,809) (63,851) (10,286) (55,134) (989) (13,450) 4,763 (7,000) Dividends received from joint ventures The information above reflects the amounts presented in the financial statements of the joint ventures, adjusted for differences in accounting policies between the Group and the joint ventures, and not the Group s share of those amounts. Future Land Development Holdings Limited F-105

221 For the year ended 31 December INVESTMENTS IN JOINT VENTURES (Cont d) Reconciliation of summarised financial information for material joint ventures (Cont d) Reconciliation of the summarised financial information presented to the carrying amounts of the Group s interests in joint ventures. Suzhou Shanghai Xudi Suzhou Wanrui Changshu Zhongzhi Taizhou Wanbo Shengming Suzhou Yusheng Nanjing Chuangjin Tianjin Injoy Yangzhou Yuesheng Year ended Year ended 31 December Year ended 31 December Year ended 31 December Year ended 31 December 31 December Year ended 31 December Year ended 31 December Year ended 31 December Year ended 31 December RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 Opening net assets 161, , , , , ,714 (758) Profit/(Loss) for the year 148,476 48, ,277 (27,693) (25,794) (2,809) (63,851) (10,286) (55,134) (989) (13,450) 4,763 (7,000) Other comprehensive income Capital injection 140, ,000 1,000, , , , , ,000 Closing net assets 310, , , , , , , , , , , , ,000 Interests in joint ventures 155,036 80, , , , , , , , , , , ,000 Carrying value 152,956 78, , , , , , , , , , , ,400 F-106 Future Land Development Holdings Limited

222 For the year ended 31 December AVAILABLE-FOR-SALE FINANCIAL ASSETS As at 31 December RMB 000 RMB 000 Opening balance 337, , Acquisition of subsidiaries (Note 34) 1,100 Acquisitions 100,909 75, Disposal of a subsidiary (Note 40) (300) Capital reduction (3,420) (13,744) Net loss from fair value adjustment (13,000) Ending balance 434, ,702 Less: Non-current portion (434,891) (337,702) Current portion Available-for-sale financial assets include the following: As at 31 December RMB 000 RMB 000 Unlisted securities: Equity securities PRC 293, ,985 Equity securities US 141, , , , The fair value of the unlisted securities is based on valuation techniques. The fair value is within Level 3 of the fair value hierarchy (see Note 3.3). Future Land Development Holdings Limited F-107

223 For the year ended 31 December DERIVATIVE FINANCIAL INSTRUMENTS Year ended 31 December RMB 000 RMB (d) Call Option (Note 24(d)) 154,615 Less: Non-current portion (154,615) Current portion ,148, ,148, LAND USE RIGHTS The balance represents mainly land use rights to be used for development of properties for sale in the future upon obtaining the necessary approval to re-zone the site for commercial use, land use rights for an operational hotel and land use rights for an operational hospital/nursing house. As at 31 December 2016, land use rights with a total carrying amount of RMB287,148,000 (2015: RMB287,148,000) were pledged as collateral for the Group s borrowings (Note 22). 1,554, , ,350,293, ,799,095,000 The amortisation charges of RMB1,554,000 (2015: RMB924,000) have been included in cost of sales. 14 PREPAYMENTS FOR LEASEHOLD LAND The Group made prepayments of RMB7,350,293,000 for the acquisition of leasehold land as at 31 December 2016 (2015: RMB6,799,095,000). F-108 Future Land Development Holdings Limited

224 For the year ended 31 December PROPERTIES HELD OR UNDER DEVELOPMENT FOR SALE As at 31 December RMB 000 RMB 000 Leasehold land to be developed 4,287, ,948 Properties under development for sale 29,874,746 25,922,795 Properties held for sale 5,637,082 6,585,525 39,798,994 33,365,268 Less: Provision for impairment loss (293,532) (625,370) 39,505,462 32,739,898 The properties held or under development for sale are all located in the PRC ,713, ,248,000 Borrowing costs capitalised in properties under development for sale and held for sale for the year ended 31 December 2016 were approximately RMB931,713,000 (2015: RMB958,248,000) % % The capitalisation rate of borrowings was 6.39% for the year ended 31 December 2016 (2015: 8.27%). Future Land Development Holdings Limited F-109

225 For the year ended 31 December PROPERTIES HELD OR UNDER DEVELOPMENT FOR SALE (Cont d) As at 31 December 2016 and 2015, the Group s following properties under development for sale and properties held for sale were pledged as collateral for the Group s borrowings (Note 22) As at 31 December RMB 000 RMB 000 Carrying value pledged: Properties under development for sale 11,152,935 6,956,417 Properties held for sale 228, ,043,908, ,227,055, ,838, ,273,000 For the year ended 31 December 2016, the cost of properties held for sale recognised as expense and included in cost of sales amounted to RMB20,043,908,000 (2015: RMB17,227,055,000), accompanying by a reversal of provision for impairment of RMB331,838,000 (2015: reversal of RMB206,273,000) credited to cost of sales ,659,191, ,657,299,000 As at 31 December 2016, properties under development for sale with a total carrying amount of RMB11,659,191,000 (2015: RMB10,657,299,000) were related to property projects which were not scheduled to complete within one year although pre-sales of some of these properties may occur. All the leasehold land to be developed were not scheduled to complete within one year. The other balances in properties held or under development for sale were expected to be recovered within one year. F-110 Future Land Development Holdings Limited

226 For the year ended 31 December TRADE AND OTHER RECEIVABLES AND PREPAYMENTS As at 31 December RMB 000 RMB 000 Trade receivables 36,665 13,231 Notes receivable 5,000 17,570 Total trade receivables 41,665 30,801 Less: Provision for impairment of receivables Trade receivables net 41,665 30, Receivables from related parties (Note 38) 11,012,401 2,566,717 Receivable from a non-controlling shareholder of a subsidiary 63,388 63,388 (a) Receivables from other investors of joint ventures (a) 1,184, ,987 Amounts paid on behalf of third parties 149, ,305 (b) Prepaid business tax and surcharges (b) 539, ,437 (c) Prepaid value-added tax (c) 741,124 (d) Prepaid income tax and land appreciation tax (d) 1,377, ,174 Prepaid property management fees 23,423 33,268 Prepayments for construction costs 192, ,772 (e) Prepayments for investments in joint ventures (e) 1,010,235 (*) Prepayments for equipment (*) 173,100 49,674 (f) Tender deposits (f) 1,147,138 1,302,280 (g) Deposits with public housing fund centres (g) 228, ,067 (h) Deposits for property maintenance (h) 163, ,793 (i) Deposits for acquisition of subsidiaries (i) 2,999,027 30,000 Other deposits 335, ,822 Others 200, ,172 (e, *, g) 21,582,090 6,696,657 Less: Non-current portion of other receivables and prepayments (e, *, g) (1,347,031) (169,467) Current portion 20,235,059 6,527, Trade receivables are mainly arisen from sales of properties, leases of investment properties and certain newly established businesses which are at start-up stage. Proceeds in respect of properties sold are normally received within three months after signing of related sales and purchase agreements, and rentals in respect of leased properties are generally received in advance. Customers of newly established businesses are generally granted a credit term of 30 days to 90 days. Future Land Development Holdings Limited F-111

227 For the year ended 31 December TRADE AND OTHER RECEIVABLES AND PREPAYMENTS (Cont d) (a) (a) The receivables from other investors of joint ventures are unsecured, non-interest bearing and have no fixed repayment terms. (b) % (b) Prior to 1 May 2016, the Group s sale of properties are subject to business tax, which is levied at 5% when the Group receives advances from customers. Such payment of taxes, together with the relevant surcharges are recorded as prepaid business tax and surcharges before the relevant revenue is recognised. (c) % % 3% 5% (c) Effective from 1 May 2016, the Group s sale of properties are subject to value-added tax ( VAT ). Under general VAT method, the Group is subject to 11% VAT on value-added amount. Qualified old construction projects, which are those with construction commenced on or before 30 April 2016, however, has an alternative to elect a simplified VAT method, which is 5% on sales with no deduction of input VAT. The Group prepays VAT at 3% or 5% when receiving advances from customers and during the 8 months up to 31 December 2016, such payment is recorded as prepaid VAT before the relevant revenue is recognised. (d) 5% 15% (d) Land appreciation tax is provisionally levied based on rates required by the local tax bureaus when the Group receives advances from customers, which are recorded as prepayments before the relevant revenue is recognised. In addition, a deemed profit of 5% to 15% of advances received from the customers is added to the accounting income when calculating taxable income and the prepaid income tax is similarly recorded as prepayments. (e) (e) This balance represents amounts, mainly for acquisition of land use rights, paid on behalf of the joint ventures to be established. (f) (f) This balance represents the tender deposits for bidding of land use rights, which will be subsequently received or transferred to prepayments for leasehold land. F-112 Future Land Development Holdings Limited

228 For the year ended 31 December TRADE AND OTHER RECEIVABLES AND PREPAYMENTS (Cont d) (g) (g) This balance represents the deposits paid to public housing fund centres to secure the housing fund loans taken by certain property purchasers of the Group. Such deposits will be released upon the issue of the properties ownership certificate by government authorities to these purchasers and submitted to the public housing fund centres. (h) (h) This balance represents the deposits paid for property maintenance after first delivery of the relevant properties, which will be subsequently recovered in ten years thereafter. (i) (i) This balance represents deposits paid for acquisition of subsidiaries which are engaged in property development The aging of trade receivables and notes receivable as at 31 December 2016 and 2015 are as follows: As at 31 December RMB 000 RMB 000 Less than 1 year 39,349 28,485 Between 1 and 2 years 2,316 Between 2 and 3 years 2,316 41,665 30, The maximum exposure to credit risk at 31 December 2016 and 2015 is the carrying value of each class of receivables mentioned above. The Group does not hold any collateral security As at 31 December 2016 and 2015, the fair value of trade and other receivables approximate their carrying amounts As at 31 December 2016 and 2015, the carrying amounts of trade and other receivables and prepayments are primarily denominated in RMB. Future Land Development Holdings Limited F-113

229 For the year ended 31 December SUBSIDIARIES Particulars of the subsidiaries of the Group as at 31 December 2016 and 2015 and shares of subsidiaries pledged for the Group s borrowings are set out in Note 42. (a) (a) Significant restrictions 12,750,200, ,263,973,000 Cash and short-term deposits of RMB12,750,200,000 (2015: RMB7,263,973,000) are held by subsidiaries in China and are subject to local exchange control regulations. These local exchange control regulations provide for restrictions on exporting capital from the country, other than through normal dividends. (b) (b) Material non-controlling interests ,940,355, ,292,979,000 5,940,355, ,289,875,000 A The total non-controlling interests as at 31 December 2016 is RMB5,940,355,000 (2015: RMB5,292,979,000), among which RMB5,940,355,000 (2015: RMB5,289,875,000) is for Future Land Holdings, the A share company. Summarised financial information on subsidiaries with material non-controlling interests 39 Set out below are the summarised financial information for Future Land Holdings, which has non-controlling interests that are material to the Group. See Note 39 for transactions with non-controlling interests. F-114 Future Land Development Holdings Limited

230 For the year ended 31 December SUBSIDIARIES (Cont d) (b) (b) Material non-controlling interests (Cont d) Summarised statement of financial position Future Land Future Land Holdings Holdings RMB 000 RMB 000 Current Assets 80,174,343 51,435,269 Liabilities (71,072,337) (42,022,622) Total current net assets 9,102,006 9,412,647 Non-current Assets 22,996,264 16,366,847 Liabilities (15,730,316) (11,907,964) Total non-current net assets 7,265,948 4,458,883 Net assets 16,367,954 13,871,530 Summarised statement of comprehensive income Future Land Holdings Future Land Holdings RMB 000 RMB 000 Revenue 27,969,282 23,568,793 Profit before fair value gains or losses on investment properties and income tax expense 4,115,455 3,110,307 Fair value gains on investment properties 582, ,106 Income tax expense (1,613,156) (1,525,809) Post-tax profit 3,084,449 2,399,604 Total comprehensive income 3,084,449 2,389,854 Total comprehensive income allocated to non-controlling interests 1,075, ,547 Dividends paid to non-controlling interests ,577 Future Land Development Holdings Limited F-115

231 For the year ended 31 December SUBSIDIARIES (Cont d) (b) (b) Material non-controlling interests (Cont d) Summarised cash flows Future Land Future Land Holdings Holdings RMB 000 RMB 000 Cash flows from operating activities Cash generated from operations 9,184, ,123 Interest paid (956,151) (760,047) Income tax paid (1,087,244) (1,411,278) Net cash generated from/(used in) operating activities 7,141,054 (1,717,202) Net cash used in investing activities (8,707,306) (797,933) Net cash generated from financing activities 7,595,352 3,792,191 Net increase in cash and cash equivalents 6,029,100 1,277,056 Cash and cash equivalents at beginning of the year 5,520,507 4,257,952 Net exchange gain/(loss) on cash and cash equivalents 713 (14,501) Cash and cash equivalents at end of the year 11,550,320 5,520,507 The information above is the amount before intra-group transactions elimination. F-116 Future Land Development Holdings Limited

232 For the year ended 31 December CASH AT BANK AND ON HAND As at 31 December RMB 000 RMB 000 Cash at bank and on hand Denominated in RMB 13,207,788 7,518,279 Denominated in USD 444, ,201 Denominated in HKD 103,784 93,034 13,756,424 7,762, % % The effective interest rate on the Group s bank deposits as at 31 December 2016 was 1.50% (2015: 1.79%). Cash and cash equivalents of the Group were determined as follows: As at 31 December RMB 000 RMB 000 Cash at bank and on hand 13,756,424 7,762,514 Less: Restricted cash (1,851,085) (1,283,653) 11,905,339 6,478,861 Future Land Development Holdings Limited F-117

233 For the year ended 31 December CASH AT BANK AND ON HAND (Cont d) Restricted cash of the Group comprised of the following: As at 31 December RMB 000 RMB 000 Deposits for letters of guarantee issued for project construction 983, ,693 Margin deposits for notes issued 750, ,153 (a) Deposits as security for property purchasers mortgage loans (a) 116, , Deposits pledged for borrowings (Note 22) 563,976 1,851,085 1,283,653 (a) (a) These bank deposits are restricted to secure the bank loans taken by certain property purchasers of the Group pursuant to the local regulations of certain cities. Such deposits will be released upon the issue of the properties ownership certificate by government authorities to these purchasers and submitted to the mortgage banks SHARE CAPITAL (a) (a) Authorised shares Number of authorised shares HKD share As at 1 January 2015, 31 December 2015 and 31 December ,000,000,000 F-118 Future Land Development Holdings Limited

234 For the year ended 31 December (b) 19 SHARE CAPITAL (Cont d) (b) Issued shares Number of issued shares HKD0.001 each Ordinary shares RMB As at 1 January ,668,000,000 4,617,069 Buy-back of shares (10,000,000) (8,146) As at 31 December 2015 and ,658,000,000 4,608, ,000, ,875,760 8,911,000 8,903, (a) ,800,000 21,250,000 Buy-back of shares The Company accumulatively acquired 10,000,000 of its shares through purchases on the Stock Exchange on 30 September, 2 October, 5 October, 22 October and 23 October 2015, and cancelled the shares on 3 November The total amount paid to acquire the shares was HKD10,875,760 (equivalent to RMB8,911,000), of which, RMB8,903,000 were deducted from other reserves within shareholders equity (Note 21). 20 SHARE-BASED PAYMENTS (a) Pre-IPO share award scheme Pursuant to a resolution dated 12 September 2011, the Company adopted a Pre-IPO share award scheme (the Share Award Scheme ). Under the Share Award Scheme, a total number of 159,800,000 shares and 21,250,000 shares were issued and granted to selected current employees (including directors) and certain third parties, respectively. The third parties include former employees and certain third party companies. The shares granted to third parties are for recognition of their past services For shares granted to current employees (including directors), subject to the meeting of the criteria of the Company being listed on the Main Board of the Stock Exchange of Hong Kong Limited before 30 June 2012 and the employee being still on service at the end of each vesting period, the granted shares can be vested in four equal tranches on 31 December 2012, 2013, 2014 and 2015, respectively. Future Land Development Holdings Limited F-119

235 For the year ended 31 December SHARE-BASED PAYMENTS (Cont d) (a) (a) Pre-IPO share award scheme (Cont d) On 30 June 2012, the Company modified the condition for the share-based payments by extending the criteria of the Company being listed on the Main Board of the Stock Exchange of Hong Kong Limited before 30 June 2012 to December ,766,309 The fair value of the shares granted under the Share Award Scheme as at 15 September 2011, the grant date, was RMB119,766,309, and was determined using the asset-based approach and the overall result was also cross-checked by using the market approach. Various valuation methods/techniques were applied to determine the value of each asset/liability under the asset-based approach, for example the investment properties were valued using the residual method while the non-tradable shares were valued using the comparable company method with option pricing model to help determine the illiquidity discount ,478, For the year ended 31 December 2016, the Group recognised an expense of RMB3,478,580 (Note 30) (2015: RMB8,104,056) in relation to the share award by the Company to the current employees (including directors). 8,104, The following table discloses the movement of the Company s shares granted to the selected employees (including directors) for the year ended 31 December 2016 and outstanding at 31 December 2016: Number of Employees awarded shares Outstanding as at 1 January ,025,000 Vested during the year (39,025,000) Unallocated during the year Outstanding as at 31 December 2016 F-120 Future Land Development Holdings Limited

236 For the year ended 31 December SHARE-BASED PAYMENTS (Cont d) (b) (b) Restricted share incentive scheme ,000,000 A 68.27% 67.00% On 17 October 2016, the general meeting of Future Land Holdings, conditionally adopted a restricted share incentive scheme (the Scheme ). Under the Scheme, a total number of 42,000,000 A shares of Future Land Holdings were to be issued and granted to selected current employees (including directors) of Future Land Holdings (the Participants ). The Company s shareholding in Future Land Holdings will be reduced gradually from 68.27% to 67.00% if all restricted shares are issued and unlocked. Participants who are granted with the restricted shares were entitled to acquire the restricted shares on the grant day and sell the restricted shares after unlocking during the unlocking period of the relevant restricted shares, subject to the fulfilment of the relevant conditions under the Scheme. A A 25% A If a participant is a director or a member of the senior management of Future Land Holdings, the number of A shares to be disposed of by them each year shall not exceed 25% of the total number of A shares of Future Land Holdings held by them during their tenure, and no A shares of Future Land Holdings held by them shall be disposed of within 6 months following the end of their employment A ,500,000 A 265,650, As of 31 December 2016, a number of 38,500,000 A shares has be issued at the price of RMB6.9 per A share under the first tranche grant, and the amount of RMB265,650,000 received from the Participants is recorded as other payables (Note 24). Future Land Development Holdings Limited F-121

237 For the year ended 31 December SHARE-BASED PAYMENTS (Cont d) (b) (b) Restricted share incentive scheme (Cont d) 38,000,000 The first tranche of 38,000,000 shares will be unlocked in three batches as follows: Unlocking arrangement Unlocking period Proportion for unlocking to the number of the restricted shares % First unlocking Commencing from the first trading day upon the expiry of 12 months from the first grant day and ending on the last trading day within 24 months from the grant day % Second unlocking Commencing from the first trading day upon the expiry of 24 months from the first grant day and ending on the last trading day within 36 months from the grant day % Third unlocking Commencing from the first trading day upon the expiry of 36 months from the first grant day and ending on the last trading day within 48 months from the grant day Future Land Holdings will conduct performance appraisals under the Scheme and reaching the performance appraisal targets shall be the unlocking conditions for the Participants. F-122 Future Land Development Holdings Limited

238 For the year ended 31 December SHARE-BASED PAYMENTS (Cont d) (b) (b) Restricted share incentive scheme (Cont d) The specific targets for the performance appraisal of each year are listed as follows: Unlocking period Performance appraisal target of Future Land Holdings First unlocking Net profit attributable to shareholders of the parent company reaching RMB2.5 billion in Second unlocking Net profit attributable to shareholders of the parent company reaching RMB3.5 billion in Second unlocking Net profit attributable to shareholders of the parent company reaching RMB5.0 billion in Based on the fair value of RMB402,322,000 of the first tranche grant measured as of 22 October 2016 (the first 402,322,000 grant date) and the net proceeds of RMB265,650,000 received from the first tranche grant, the difference 265,650,000 of RMB136,672,000 would constitute aggregate 136,672,000 share-based payment costs which are required to be amortised over the period from the grant day to the various unlocking dates for different portion of the first tranche grant. For Participants who are not directors or members of the senior management of Future Land Holdings, the fair value of the restricted shares in the first tranche is its closing price on the grant date. For directors and members of the senior management of Future Land Holdings, they shall be subject to the restriction that the restricted shares may be unlocked but not transferred, resulting in certain amount of restriction cost, which is (Black-Scholes model) calculated based on the Black-Scholes model. Thus, the fair value of the restricted shares in the first tranche is its closing price on the grant date excluding the unit cost of transfer restriction for directors and members of the senior management For the year ended 31 December 2016, the Group recognised an expense of RMB9,735,600 (Note 30) 9,735, in relation to the Scheme including an amount of RMB202,306 relating to a director. 202,306 Future Land Development Holdings Limited F-123

239 For the year ended 31 December RESERVES ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY Share premium Other reserves Retained earnings Total RMB 000 RMB 000 RMB 000 RMB 000 (a) (b) (Note (a)) (Note (b)) Balance at 1 January ,112,440 54,100 6,999,220 8,165,760 Comprehensive income Profit for the year 1,383,953 1,383,953 Other comprehensive income Total comprehensive income for the year 1,383,953 1,383,953 Transactions with owners 20 Pre-IPO share award scheme (Note 20) value of current employee services 3,479 3, Dividends (Note 33) (282,900) (282,900) Total contributions by and distributions to owners (282,900) 3,479 (279,421) Disposal of subsidiaries (3,025) (3,025) Acquisition of additional interests in 39(f) a subsidiary (Note 39(f)) (36,826) (36,826) Total transactions with owners, recognized directly in equity (282,900) (36,372) (319,272) Balance at 31 December ,540 17,728 8,383,173 9,230,441 Representing: (c) Proposed final dividend (Note (c)) 282, ,900 Others 546,640 8,947, ,540 9,230,441 F-124 Future Land Development Holdings Limited

240 For the year ended 31 December RESERVES ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY (Cont d) Share premium Other reserves Retained earnings Total RMB 000 RMB 000 RMB 000 RMB 000 (a) (b) (Note (a)) (Note (b)) Balance at 1 January ,395, ,193 5,968,330 7,639,363 Comprehensive income Profit for the year 1,030,890 1,030,890 Other comprehensive loss Change in fair value of available-for-sale financial assets, net of tax (6,381) (6,381) Total comprehensive income for the year (6,381) 1,030,890 1,024,509 Transactions with owners 20 Pre-IPO share award scheme (Note 20) value of current employee services 8,104 8, Buy-back of shares (Note 19) (8,903) (8,903) 33 Dividends (Note 33) (283,400) (283,400) Total contributions by and distributions to owners (283,400) (799) (284,199) Net loss from changes of non-controlling interests in subsidiaries 39(a), (b), (c), (d), (e) (Note 39(a), (b), (c), (d), (e)) (213,913) (213,913) Total transactions with owners, recognized directly in equity (283,400) (214,712) (498,112) Balance at 31 December ,112,440 54,100 6,999,220 8,165,760 Representing: (c) Proposed final dividend (Note (c)) 282, ,900 Others 829,540 7,882,860 1,112,440 8,165,760 Future Land Development Holdings Limited F-125

241 For the year ended 31 December RESERVES ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY (Cont d) (a) ,418,000, ,056,100,000 1,668,936,000 1,418,000,000 1,150,992 1,667,785,008 (a) On 29 November 2012, the Company issued 1,418,000,000 HKD ordinary shares of HKD0.001 each at HKD1.45 per share in connection with the Listing, and raised gross proceeds of approximately HKD2,056,100,000 (equivalent to RMB1,668,936,000). The excess of RMB1,667,785,008 over the par value of RMB1,150,992 for the 1,418,000,000 HKD ordinary shares issued, net of the relevant incremental costs of RMB65,165,000 directly contributable to the new shares issued, was credited to share premium with amount of RMB1,602,620, ,165,000 1,602,620,008 (b) 10% 50% 25% (b) In accordance with the Company Law of the PRC and the articles of association of the PRC subsidiaries, these subsidiaries registered in the PRC shall appropriate 10% of its annual statutory profit (after offsetting any prior years losses) to the statutory surplus reserve ( SSR ) account. When the balance of SSR reaches 50% of the registered capital/share capital of these subsidiaries, any further appropriation is optional. The SSR can be utilised to offset prior years losses or to increase paid-in capital. However, SSR shall be maintained at a minimum of 25% of registered capital/share capital after such utilisation. The SSR are non-distributable for cash dividends except in the event of liquidation and are subject to certain restrictions set out in the relevant PRC regulations As at 31 December 2016, total SSR of these subsidiaries attributable to owners of the Company amounted to RMB2,150,798,000 (2015: RMB1,901,352,000). These 2,150,798, amounts were included in retained earnings of the 1,901,352,000 Group. (c) (c) Pursuant to Section 34 of the Cayman Companies Law (2003 Revision) and the articles of association of the Company, share premium of the Company is available for distribution to shareholders subject to a solvency test on the Company and the provision of the articles of association of the Company. Details of the proposed final dividend are set out in Note 33. F-126 Future Land Development Holdings Limited

242 For the year ended 31 December BORROWINGS As at 31 December RMB 000 RMB 000 Non-current, secured: (a) Bank loans (a) 7,402,275 4,871, (b (i) (b (ii) (b (iii) (b (iv) (c (i)) (c (ii)) (c (iii)) I(c (iv) (c (vi) (c (vii) Senior notes due January 2018 ( 2018 Notes ) (b (i)) 1,363,656 Senior notes due April 2016 ( 2016 Notes ) (b (ii)) 1,496,719 Senior notes due July 2019 ( 2019 Notes ) (b (iii)) 2,393,051 2,229,185 Senior notes due November 2017 ( 2017 Notes ) (b (iv)) 1,716,560 1,589,524 Non-current, unsecured: Corporate bonds due July 2019 ( 2019 Bonds ) (c (i)) 1,995,873 1,988,410 Corporate bonds due November 2020 ( 2020 Bonds ) (c (ii)) 2,985,827 2,978,474 Corporate bonds due November 2018 ( 2018 Bonds ) (c (iii)) 1,991,704 1,982,129 Corporate bonds due March 2019 ( 2019 Bonds I ) (c (iv)) 1,837,435 Corporate bonds due August 2021 ( 2021 Bonds ) (c (vi)) 1,977,117 Corporate bonds due September 2023 ( 2023 Bonds ) (c (vii)) 498, I(c (viii) Corporate bonds due October 2021 ( 2021 Bonds I ) (c (viii)) 2,487,571 25,285,862 18,499,464 Less: Current portion of long-term borrowings (8,249,709) (3,494,575) 17,036,153 15,004,889 Current, secured: (a) Bank loans (a) 778, ,000 Current, unsecured: II(c (v)) Corporate bonds due March 2019 ( 2019 Bonds II ) (c (v)) 1,147,390 Current portion of long-term borrowings 8,249,709 3,494,575 10,175,714 3,975,575 Future Land Development Holdings Limited F-127

243 For the year ended 31 December (a) BORROWINGS (Cont d) (a) These bank loans of the Group are secured by properties under development (Note 15), investment properties (Note 7), land use rights (Note 13), property, plant and equipment (Note 6), shares of subsidiaries (Note 42) and bank deposits (Note 18) of the Group and/or guaranteed by subsidiaries of the Company for each other. (b) (b) Senior notes (i) 2018 (i) 2018 Notes % In January 2013, the Company issued five-year senior notes with principal amount of USD200,000,000 ( 2018 Notes ), which were listed on the Singapore Exchange Securities Trading Limited. The 2018 Notes are denominated in USD, and bear interest rate at 10.25% per annum, payable semi-annually in arrears on or on the business day nearest to 31 January and 31 July of each year, beginning 31 July According to the terms of 2018 Notes, the Notes may be redeemed in the following circumstances: At any time and from time to time on or after 31 January 2016, the Company may redeem the 2018 Notes, in whole or in part, at a redemption price equal to the percentage of principal amount set forth below, plus accrued and unpaid interest, if any, to (but excluding) the redemption date, if redeemed during the 12-month period commencing on 31 January of any year set forth below: Year Redemption Price January 2016 to 30 January % January 2017 and thereafter % F-128 Future Land Development Holdings Limited

244 For the year ended 31 December BORROWINGS (Cont d) (b) (b) Senior notes (Cont d) (i) 2018 (i) 2018 Notes (Cont d) % At any time prior to 31 January 2016, the Company may at its option redeem the Notes, in whole but not in part, at a redemption price equal to 100% of the principal amount of the 2018 Notes plus the applicable premium as of, and accrued and unpaid interest, if any, to (but not including) the redemption date % % 65% 60 At any time and from time to time prior to 31 January 2016, the Company may redeem up to 35% of the aggregate principal amount of the Notes with proceeds from sales of certain kinds of its capital stock, subject to certain conditions, at a redemption price of % of the principal amount of the Notes, plus accrued and unpaid interest, if any, to (but not including) the redemption date; provided that at least 65% of the aggregate principal amount of the Notes issued on the original issue date remains outstanding after each such redemption and any such redemption takes place within 60 days after the closing of the related equity offering. Future Land Development Holdings Limited F-129

245 For the year ended 31 December BORROWINGS (Cont d) (b) (b) Senior notes (Cont d) (i) 2018 (i) 2018 Notes (Cont d) % On 3 December 2015, the Company announced that all the outstanding 2018 Notes will be redeemed in full on 31 January 2016 (the Redemption Date ) at a redemption price equal to % of the principal amount thereof, plus accrued and unpaid interest, if any, to the Redemption Date. Accordingly the entire outstanding amount as at 31 December 2015 was treated as current liability and the net loss arising was fully accounted for as part of finance costs in December The Company subsequently completed the redemption on 31 January (ii) 2016 (ii) 2016 Notes In April 2013, the Company issued three-year 15 senior notes with principal amount of RMB1,500,000,000 ( 2016 Notes ), which were 2016 listed on the Singapore Exchange Securities Trading Limited. The 2016 Notes are denominated 2016 in RMB, and bear interest rate at 9.75% per annum, payable semi-annually in arrears on or 9.75% 2013 on the business day nearest to 23 April and October of each year, beginning 23 October According to the terms of 2016 Notes, the Company may at its option redeem the Notes, in whole but not in part, at a redemption price equal to 100% of the principal amount of 100% the Notes plus the applicable premium as of, and accrued and unpaid interest, if any, to (but not including) the redemption date The Company redeemed the 2016 Notes in full on April F-130 Future Land Development Holdings Limited

246 For the year ended 31 December BORROWINGS (Cont d) (b) (b) Senior notes (Cont d) (iii) 2019 (iii) 2019 Notes In July 2014, the Company issued five-year senior 3.5 notes with principal amount of USD350,000, ( 2019 Notes ), which were listed on the Singapore Exchange Securities Trading Limited. The 2019 Notes are denominated in USD, and 2019 bear interest rate at 10.25% per annum, payable 10.25% semi-annually in arrears on or on the business day nearest to 21 January and 21 July of each year, 1 21 beginning 21 January According to the terms of 2019 Notes, the Notes may be redeemed in the following circumstances: At any time and from time to time on 7 21 or after 21 July 2017, the Company may 12 redeem the 2019 Notes, in whole or in part, at a redemption price equal to the 2017 percentage of principal amount set forth 7 21 below, plus accrued and unpaid interest, if any, to (but excluding) the redemption date, if redeemed during the 12-month 2019 period commencing on 21 July of any year set forth below: Year Redemption Price July 2017 to 20 July % July 2018 and thereafter % Future Land Development Holdings Limited F-131

247 For the year ended 31 December BORROWINGS (Cont d) (b) (b) Senior notes (Cont d) (iii) 2019 (iii) 2019 Notes (Cont d) % At any time prior to 21 July 2017, the Company may at its option redeem the Notes, in whole but not in part, at a redemption price equal to 100% of the principal amount of the 2019 Notes plus the applicable premium as of, and accrued and unpaid interest, if any, to (but not including) the redemption date % % 65% 60 At any time and from time to time prior to 21 July 2017, the Company may redeem up to 35% of the aggregate principal amount of the Notes with proceeds from sales of certain kinds of its capital stock, subject to certain conditions, at a redemption price of % of the principal amount of the Notes, plus accrued and unpaid interest, if any, to (but not including) the redemption date; provided that at least 65% of the aggregate principal amount of the Notes issued on the original issue date remains outstanding after each such redemption and any such redemption takes place within 60 days after the closing of the related equity offering (b) On 17 February 2017, the Company announced that all the outstanding 2019 Notes will be redeemed in full on 20 March 2017 (Note 43(b)). F-132 Future Land Development Holdings Limited

248 For the year ended 31 December BORROWINGS (Cont d) (b) (b) Senior notes (Cont d) (iv) 2017 (iv) 2017 Notes % In November 2015, the Company issued two-year senior notes with principal amount of USD250,000,000 ( 2017 Notes ), which were listed on the Singapore Exchange Securities Trading Limited. The 2017 Notes are denominated in USD, and bear interest rate at 6.25% per annum, payable semi-annually in arrears on or on the business day nearest to 12 May and 12 November of each year, beginning 12 November % According to the terms of 2017 Notes, the Company may at its option redeem the 2017 Notes, in whole but not in part, at a redemption price equal to 100% of the principal amount of the Notes plus the applicable premium as of, and accrued and unpaid interest, if any, to (but not including) the redemption date The early redemption options are regarded as embedded derivatives not closely related to the host contract. The board of directors is of the view that the Company has no plan of any early redemption and the fair values of the above early redemption options were insignificant on initial recognition and as at 31 December 2016 and The early redemption of the 2018 Notes and the upcoming early redemption of the 2019 Notes only occurred because an opportunity arose to issue new Notes at a lower cost to replace old Notes. The above senior notes are general obligations guaranteed by certain subsidiaries other than those established under the law of the PRC ( Subsidiary Guarantors ), and secured by a pledge on the shares of certain initial Subsidiary Guarantors. Future Land Development Holdings Limited F-133

249 For the year ended 31 December BORROWINGS (Cont d) (c) (c) Corporate bonds (i) 2019 (i) 2019 Bonds B % In July 2014, the former B share company issued five-year corporate bonds with principal amount of RMB2,000,000,000 ( 2019 Bonds ), which were listed on the Shanghai Stock Exchange. The 2019 Bonds are denominated in RMB, and bear interest rate at 8.9% per annum for the first three years, payable annually in arrears on or on the business day nearest to 23 July of each year, beginning 23 July B % B B % B According to the terms of 2019 Bonds, the former B share company may at its option redeem the 2019 Bonds in whole at end of the third year, at a redemption price equal to 100% of the principal amount of the Bonds plus accrued and unpaid interest to the redemption date. If the former B share company waives the optional redemption at end of the third year, the former B share company may at its option raise the interest rate by 0 to 100 basis points which will be fixed in the remaining period, and the bondholders may at their option sell the bonds back to the former B share company, in whole or in part, at a price equal to 100% of the principal amount of the Bonds plus accrued and unpaid interest to the sold-back date. A B 2019 The obligations relating to the 2019 Bonds had been transferred from the former B share company to the A share company. F-134 Future Land Development Holdings Limited

250 For the year ended 31 December BORROWINGS (Cont d) (c) (c) Corporate bonds (Cont d) (ii) 2020 (ii) 2020 Bonds A % In November 2015, the A share company issued five-year corporate bonds with principal amount of RMB3,000,000,000 ( 2020 Bonds ), which were listed on the Shanghai Stock Exchange. The 2020 Bonds are denominated in RMB and bear interest rate at 4.5% per annum for the first three year, payable annually in arrears on or on the business day nearest to 3 November of each year, beginning 3 November A 100% A According to the terms of 2020 Bonds, the A share company may at its option adjust the interest rate at end of the third year which will be fixed in the remaining period, and the bondholders may at their option sell the bonds back to the A share company, in whole or in part, at a price equal to 100% of the principal amount of the Bonds plus accrued and unpaid interest to the sold-back date. (iii) 2018 (iii) 2018 Bonds A % In November 2015, the A share company issued three-year corporate bonds with principal amount of RMB2,000,000,000 ( 2018 Bonds ), which were not listed. The 2018 Bonds are denominated in RMB, and bear interest rate at 6.0% per annum for the first two years, payable annually in arrears on or on the business day nearest to 10 November of each year, beginning 10 November A 100% A According to the terms of 2018 Bonds, the A share company may at its option adjust the interest rate at the end of the second year which will be fixed in the remaining period, and the bondholders may at their option sell the bonds back to the A share company, in whole or in part, at a price equal to 100% of the principal amount of the Bonds plus accrued and unpaid interest to the sold-back date. Future Land Development Holdings Limited F-135

251 For the year ended 31 December (c) 22 BORROWINGS (Cont d) (c) Corporate bonds (Cont d) (iv) 2019 I (iv) 2019 Bonds I A I 2019 I 5.44% In March 2016, the A share company issued three-year corporate bonds with principal amount of RMB1,850,000,000 ( 2019 Bonds I ), which were listed on the Shanghai Stock Exchange. The 2019 Bonds I are denominated in RMB, and bear interest rate at 5.44% per annum for the first two years, payable annually in arrears on or on the business day nearest to 31 March of each year, beginning 31 March I A 100% A According to the terms of 2019 Bonds I, the A share company may at its option adjust the interest rate at the end of the second year which will be fixed in the remaining period, and the bondholders may at their option sell the bonds back to the A share company, in whole or in part, at a price equal to 100% of the principal amount of the Bonds plus accrued and unpaid interest to the sold-back date. (v) 2019 II (v) 2019 Bonds II A II 2019 II 4.76% In March 2016, the A share company issued three-year corporate bonds with principal amount of RMB1,150,000,000 ( 2019 Bonds II ), which were listed on the Shanghai Stock Exchange. The 2019 Bonds II are denominated in RMB, and bear interest rate at 4.76% per annum for the first year, payable annually in arrears on or on the business day nearest to 31 March of each year, beginning 31 March II A 100% A According to the terms of 2019 Bonds II, the A share company may at its option adjust the interest rate at the end of the first and second year which will be fixed in the remaining period, and the bondholders may at their option sell the bonds back to the A share company, in whole or in part, at a price equal to 100% of the principal amount of the Bonds plus accrued and unpaid interest to the sold-back date. F-136 Future Land Development Holdings Limited

252 For the year ended 31 December (c) 22 BORROWINGS (Cont d) (c) Corporate bonds (Cont d) (vi) 2021 (vi) 2021 Bonds A % In August 2016, the A share company issued five-year corporate bonds with principal amount of RMB2,000,000,000 ( 2021 Bonds ), which were listed on the Shanghai Stock Exchange. The 2021 Bonds are denominated in RMB, and bear interest rate at 4.48% per annum for the first three years, payable annually in arrears on or on the business day nearest to 15 August of each year, beginning 15 August A 100% A According to the terms of 2021 Bonds, the A share company may at its option adjust the interest rate at the end of the third year which will be fixed in the remaining period, and the bondholders may at their option sell the bonds back to the A share company, in whole or in part, at a price equal to 100% of the principal amount of the Bonds plus accrued and unpaid interest to the sold-back date. (vii) 2023 (vii) 2023 Bonds A % In September 2016, the A share company issued seven-year corporate bonds with principal amount of RMB500,000,000 ( 2023 Bonds ), which were listed on the Shanghai Stock Exchange. The 2023 Bonds are denominated in RMB, and bear interest rate at 4.80% per annum for the first five years, payable annually in arrears on or on the business day nearest to 12 September of each year, beginning 12 September A 100% A According to the terms of 2023 Bonds, the A share company may at its option adjust the interest rate at the end of the fifth year which will be fixed in the remaining period, and the bondholders may at their option sell the bonds back to the A share company, in whole or in part, at a price equal to 100% of the principal amount of the Bonds plus accrued and unpaid interest to the sold-back date. Future Land Development Holdings Limited F-137

253 For the year ended 31 December BORROWINGS (Cont d) (c) (c) Corporate bonds (Cont d) (viii) 2021 I (viii) 2021 Bonds I A I 2021 I 4.41% In October 2016, the A share company issued five-year corporate bonds with principal amount of RMB2,500,000,000 ( 2021 Bonds I ), which were listed on the Shanghai Stock Exchange. The 2021 Bonds I are denominated in RMB, and bear interest rate at 4.41% per annum for the first three years, payable annually in arrears on or on the business day nearest to 17 October of each year, beginning 17 October I According to the terms of 2021 Bonds I, the A A share company may at its option adjust the interest rate at the end of the third year which will be fixed in the remaining period, and the bondholders may at their option sell the bonds 100% back to the A share company, in whole or in part, at a price equal to 100% of the principal amount A of the Bonds plus accrued and unpaid interest to the sold-back date The maturity of non-current borrowings as at 31 December 2016 and 2015 are as follows: As at 31 December RMB 000 RMB 000 Between 1 and 2 years 8,090,930 7,276,492 Between 2 and 5 years 8,838,973 7,211,209 Over 5 years 106, ,188 17,036,153 15,004,889 F-138 Future Land Development Holdings Limited

254 For the year ended 31 December BORROWINGS (Cont d) The weighted average effective interest rates as at 31 December 2016 and 2015 were as follows: As at 31 December RMB 000 RMB 000 Bank borrowings 5.66% 6.51% Senior notes 9.47% 10.02% Corporate bonds 5.85% 6.58% The carrying amounts and fair value of the non-current borrowings are as follows: Carrying amount Fair value RMB 000 RMB 000 RMB 000 RMB 000 Bank borrowings 4,856,703 4,237,167 4,856,703 4,237, Notes 2,393,051 2,229,185 2,631,898 2,467, Notes 1,589,524 1,612, Bonds 1,988,410 2,300, Bonds 2,985,827 2,978,474 2,975,280 3,015, I 2019 Bonds I 1,837,435 1,849, Bonds 1,977,117 1,950, I 2021 Bonds I 2,487,571 2,414, Bonds 498, , I I 2023 The fair value for 2019 Notes, 2017 Notes, 2019 Bonds, 2020 Bonds, 2019 Bonds I, 2021 Bonds, 2021 Bonds I and 2023 Bonds are based on quoted prices in active markets and are within Level 1 of the fair value hierarchy. Future Land Development Holdings Limited F-139

255 For the year ended 31 December BORROWINGS (Cont d) The fair value for bank borrowings approximates their carrying amount. The fair value is based on cash flows discounted using appropriate rates and are within Level 2 of the fair value hierarchy. The exposure of the Group s borrowings to interest rate changes and the contractual repricing dates or maturity whichever is the earlier date is as follows: 6 months or less 6-12 months 1-5 years Over 5 years Total RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 Borrowings included in non-current liabilities: As at 31 December ,088,725 3,627,978 12,319,450 17,036, As at 31 December ,450,000 2,278,867 11,276,022 15,004,889 Borrowings included in current liabilities: As at 31 December ,663,720 6,511,994 10,175, As at 31 December ,735, ,000 3,975, ,882,886, ,550,776,000 As at 31 December 2016, the aggregate principal of borrowings amounted to RMB20,882,886,000 are at fixed interest rates (2015: RMB17,550,776,000). The carrying values of the Group s borrowings are denominated in the following currencies: As at 31 December RMB 000 RMB 000 RMB 23,102,256 13,798,099 USD 4,109,611 5,182,365 27,211,867 18,980,464 F-140 Future Land Development Holdings Limited

256 For the year ended 31 December ADVANCES FROM PRE-SALE OF PROPERTIES The Group starts sales of properties and collection of proceeds from customers before the properties are completed and ready for delivery. Such proceeds from customers are recorded as advances from pre-sale of properties before relevant sales are recognised. 24 TRADE AND OTHER PAYABLES As at 31 December Trade payables 12,479,079 11,790,817 Notes payable 1,660, ,723 (a) Advances from non-controlling shareholders of subsidiaries (a) 39,300 37,541 Business, value-added and other taxes payable 298, ,290 Maintenance & decoration fees collected on behalf 73, ,418 Accrued payroll 464, ,506 Interest payable 450, ,775 Deposits for construction biddings and rental deposits 339, ,580 Intention deposits from potential property purchasers 130,113 55,832 Deed tax collected on behalf 69,686 85, Payables to related parties (Note 38) 10,408,432 4,905,802 (b) Temporary funding payables (b) 18, ,908 (c) Amounts received for potential investments in property projects (c) 2,023,305 1,280,247 (d) Call option payable (d) 85,256 A 20 (b) Amounts received from participants of the A share company s restricted share incentive scheme (Note 20 (b)) 265,650 Others 206, ,700 (d) Less: Non-current portion of call option 29,012,566 20,008,074 payable (d) (36,670) Current portion 28,975,896 20,008,074 Future Land Development Holdings Limited F-141

257 For the year ended 31 December TRADE AND OTHER PAYABLES (Cont d) (a) (a) The advances are provided by an entity established by certain employees including key management of the Group who had chosen to invest in some subsidiaries of the Group. The advances are non-interest bearing, unsecured and have no fixed repayment terms. (b) (b) Temporary funding payables are payables to non-related parties which are non-interest bearing and unsecured. (c) (c) These amounts will either be returned back upon unsuccessful land biddings or be treated as the other parties contribution to a new subsidiary or joint venture of the Group for successful land biddings. They are unsecured, non-interest bearing and have no fixed repayment terms. (d) ,000, ,000,000 50,000,000 40,000, ,000, ,256,000 (d) Associated with the disposal of a subsidiary Shanghai Diyu Business Management Co., Ltd. (Note 40) engaging in investment properties business, the Group acquired a call option on the shares of Shanghai Diyu Business Management Co., Ltd. at a total consideration of RMB150,000,000, which are payable in 2016, 2017 and 2018 with the amount of RMB60,000,000, RMB50,000,000 and RMB40,000,000 respectively. The Group had paid RMB60,000,000 as at 31 December After discounting for the time factor, the carrying amount of the remaining payable for the call option as at 31 December 2016 was RMB85,256, ,000,000 20,000,000 The Group also has the rights to extend the call option for one year by the end of the third year after making a payment of RMB30,000,000 and another one year by the end of the fourth year after making a further payment of RMB20,000, ,615,000 There was a corresponding financial asset of RMB154,615,000 as at 31 December 2016 recognised for the above derivative financial instruments. F-142 Future Land Development Holdings Limited

258 For the year ended 31 December TRADE AND OTHER PAYABLES (Cont d) The aging analysis of trade payables and notes payable as at 31 December 2016 and 2015 are as follows: As at 31 December RMB 000 RMB 000 Less than 1 year 13,020,096 11,783,054 Between 1 and 2 years 749, ,441 Between 2 and 3 years 252,635 81,400 Over 3 years 117, ,645 14,139,693 12,243, As at 31 December 2016 and 2015, the fair value of trade and other payables approximate their carrying amounts As at 31 December 2016 and 2015, the carrying amounts of trade and other payables are primarily denominated in RMB. Future Land Development Holdings Limited F-143

259 For the year ended 31 December DEFERRED INCOME TAX As at 31 December RMB 000 RMB 000 Deferred tax assets to be recovered within 12 months 302,488 70,885 after 12 months 506, , , ,813 Deferred tax liabilities to be settled within 12 months (75,133) (112,680) after 12 months (1,039,883) (641,990) (1,115,016) (754,670) Deferred tax liabilities, net (306,356) (174,857) The gross movement on the deferred income tax account is as follows: Year ended 31 December RMB 000 RMB 000 At beginning of year (174,857) (187,085) 31 (Charged)/credited to the consolidated statement of income (Note 31) (163,677) 8, Disposal of subsidiaries (Note 40) 32,178 Credited to other comprehensive income 3,250 At end of year (306,356) (174,857) ,777, ,151,000 As at 31 December 2016, deferred income tax assets and deferred income tax liabilities amounted to RMB85,777,000 were offset (2015: RMB179,151,000). F-144 Future Land Development Holdings Limited

260 For the year ended 31 December DEFERRED INCOME TAX (Cont d) The gross movement in deferred income tax assets and liabilities for the years ended 31 December 2016 and 2015, without taking into consideration the offsetting of balances within the same tax jurisdiction, are as follows: Deferred income tax assets Provisions for Land properties appreciation Tax losses held for sale Accruals tax Elimination of inter-company transactions Total RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB At 1 January , ,343 32, , ,964 Credited/(charged) to the consolidated statement of income 57,604 (82,960) 94,383 68, , Disposal of subsidiaries (Note 40) (1,768) (1,768) At 31 December ,848 73, , , , At 1 January , ,287 33, ,409 3, ,410 Credited/(charged) to the consolidated statement of income 217,411 9,056 (1,959) (15,840) (3,114) 205, At 31 December , ,343 32, , ,964 In accordance with the PRC laws and regulations, tax losses could be carried forward for a period of five years to offset against its future taxable profits. Deferred tax assets relating to unutilised tax losses are recognised to the extent that it is probable that sufficient taxable profit will be available to allow such deferred tax assets to be utilised ,752, ,648, ,006, ,590,000 The Group did not recognise deferred income tax assets of RMB66,752,000 (2015: RMB40,648,000) in respect of tax losses amounting to RMB267,006,000 as at 31 December 2016 (2015: RMB162,590,000). All these tax losses will expire within five years. Future Land Development Holdings Limited F-145

261 For the year ended 31 December DEFERRED INCOME TAX (Cont d) Deferred income tax liabilities Fair value gains Acquisition of subsidiaries Elimination of inter-company transactions Unsold property cost allocation differences Undistributed profits of PRC subsidiaries Depreciation of investment properties Total RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 (a) (note (a)) At 1 January ,995 1,734 6, ,146 48,087 56, ,821 Charged/(credited) to the consolidated statement of income 148,496 (896) 87,296 20,070 45, , Disposal of a subsidiary (Note 40) (33,946) (33,946) At 31 December , , ,442 68, ,673 1,200, At 1 January ,468 2,421 15, ,171 34,987 35, ,495 Charged/(credited) to the consolidated statement of income 203,777 (687) (9,753) (31,025) 13,100 21, ,576 Credited to other comprehensive income (3,250) (3,250) At 31 December ,995 1,734 6, ,146 48,087 56, ,821 (a) ,157, ,087,000 (a) As at 31 December 2016, deferred income tax liabilities of RMB68,157,000 (2015: RMB48,087,000) have been recognised for the withholding tax that would be payable upon remittance, in respect of a portion of the unremitted distributable profits of certain PRC subsidiaries attributable to the investors outside PRC As at 31 December 2016, deferred income tax liabilities of RMB257,699,000 (2015: RMB210,869,000) have not been recognised for the withholding tax that would be 5,153,978, payable upon remittance, in respect of the unremitted 4,217,378,000 distributable profits of certain PRC subsidiaries attributable to the investors outside PRC amounting to RMB5,153,978,000 (2015: RMB4,217,378,000) as such 257,699, profits are intended to be reinvested. 210,869,000 F-146 Future Land Development Holdings Limited

262 For the year ended 31 December REVENUE Revenue of the Group consists of the following for the years ended 31 December 2016 and 2015: Year ended 31 December RMB 000 RMB 000 Revenue from sales of properties 27,049,679 22,972,751 Revenue from property management 342, ,526 Rental income 272, ,951 Others 566, ,661 28,232,094 23,835, OTHER INCOME/OTHER EXPENSES/OTHER GAINS NET Other income Year ended 31 December RMB 000 RMB 000 Government grants 16,995 12,413 (a) Dividend income on available-for-sale financial assets (a) 9,312 6,256 Other expenses 26,307 18,669 Donations (26,249) (3,885) Other gains net Losses on disposal of property, plant and equipment (2,020) (393) Compensation for cancellation of property sales contracts 14,152 10, Net gain from disposal of subsidiaries (Note 40) 171, Negative goodwill arising on business combination (Note 34) 45,978 Others 24,668 4, ,139 14,153 (a) (a) The dividend income is from unlisted investment. Future Land Development Holdings Limited F-147

263 For the year ended 31 December EXPENSES BY NATURE Expenses included in cost of sales, selling and marketing expenses and administrative expenses are analysed as follows: Year ended 31 December RMB 000 RMB 000 Land use rights costs 7,720,514 6,389,041 Construction costs 11,179,592 9,802,580 Capitalised interest 811, ,161 (a) Business tax and surcharges (a) 1,188,011 1,328,494 Provision for impairment of properties held or under development for sale 242,495 6 Depreciation of property, plant and equipment (Note 6) 213, ,265 8 Amortisation of intangible assets (Note 8) 11,976 7,112 Bank charges 37,804 31, Staff costs (Note 30) 1,531,436 1,196,609 Entertainment expenses 84,858 78,317 Stamp duty and other taxes 113,051 56,663 Professional fees 77,586 43,742 Auditors remuneration annual audit and interim review of the Group 2,400 2,400 A annual audit of the A share company charged by its auditor 3,000 3,000 non-audit services 3,380 1,054 Sales commission 163, ,980 Advertising and publicity costs 396, ,356 Rental expenses 39,689 39,119 Travelling expenses 98,652 73,946 Other expenses 652, ,669 Total cost of sales, selling and marketing expenses and administrative expenses 24,330,731 20,843,309 (a) % 10% 12% (a) Before 1 May 2016, the PRC subsidiaries of the Group are subject to business tax and surcharges. Business tax is levied at 5% of revenue from sale of properties and rental income, while surcharges are 10% to 12% of business tax payable. F-148 Future Land Development Holdings Limited

264 For the year ended 31 December FINANCE COSTS NET Year ended 31 December RMB 000 RMB Finance costs Interest on bank loans, senior notes and corporate bonds (1,669,961) (1,393,157) Less: Interest capitalised (Note 7 and Note 15) 1,000,875 1,025,717 (669,086) (367,440) Net foreign exchange losses relating to borrowings (281,941) (275,236) Net foreign exchange gains/(losses) on cash and cash equivalents 9,397 (8,031) 35 Total finance costs (Note 35) (941,630) (650,707) Finance income 35 Interest income on bank deposits (Note 35) 161, ,133 Net finance costs (780,403) (514,574) Future Land Development Holdings Limited F-149

265 For the year ended 31 December STAFF COSTS (INCLUDING DIRECTORS EMOLUMENTS) Year ended 31 December RMB 000 RMB 000 Wages and salaries 1,476, ,828 Pension 88,947 82,178 Other welfare benefit expenses 156, ,499 Pre-IPO share award scheme 20(a) value of current employees (Note 20(a)) 3,479 8,104 20(b) Restricted share incentive scheme (Note 20(b)) 9, Charged to statement of income (Note 28) 1,531,436 1,196,609 Capitalised to properties held or under development for sale 203,555 Number of employees 7,322 10,679 All mainland China employees of the Group participate in defined contribution employee social security plans, including pension, medical, housing and other welfare benefits, organised and administered by the governmental authorities. The Group has no other substantial commitments to employees. F-150 Future Land Development Holdings Limited

266 For the year ended 31 December STAFF COSTS (INCLUDING DIRECTORS EMOLUMENTS) (Cont d) According to the relevant regulations, the premiums and welfare benefit contributions that should be borne by the Group are calculated based on percentages of the total salary of employees, subject to a certain ceiling, and are paid to the labour and social welfare authorities. (a) (a) Directors and chief executive s emoluments The directors and chief executive s emoluments are set out below: Salaries Performance and other related Name of director Fees allowances bonus Restricted Retirement scheme contributions Pre-IPO share share award incentive scheme scheme Total RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB Year ended 31 December 2016 Chairman (i) Mr. Wang (i) 4, ,000 Executive directors Liu Yuanman 2, ,298 (v) Lv Xiaoping (v) 3, ,730 (iii) Chan Wai Kin (iii) 3, ,000 (iv) Lu Zhongming (iv) 1,400 1, ,096 Non-executive director Wang Xiaosong 2, ,854 Independent non-executive director Chen Huakang Zhu Zengjin Zhong Wei ,860 5, ,878 Future Land Development Holdings Limited F-151

267 For the year ended 31 December STAFF COSTS (INCLUDING DIRECTORS EMOLUMENTS) (Cont d) (a) (a) Directors and chief executive s emoluments (Cont d) Salaries Performance and other related Name of director Fees allowances bonus Retirement scheme contributions Pre-IPO share award scheme Total RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB Year ended 31 December Chairman (i) Mr. Wang (i) 4, ,000 Executive directors Liu Yuanman 2, ,224 (ii) Huang Maoli (ii) (vi) Liang Zhicheng (vi) 3, ,500 (iii) Chan Wai Kin (iii) 1, ,250 Non-executive director Lv Xiaoping 3, ,037 Wang Xiaosong 3, ,858 Independent non-executive directors Chen Huakang Zhu Zengjin Zhong Wei ,550 5, ,119 25,716 (i) (i) The chief executive of the Company is Mr. Wang, who is also one of the directors of the Company. (ii) (ii) Ms. Huang Maoli resigned as executive director of the Company with effect from 8 March (iii) (iii) Mr. Chan Wai Kin was appointed as executive director of the Company with effect from 30 March F-152 Future Land Development Holdings Limited

268 For the year ended 31 December (a) (iv) STAFF COSTS (INCLUDING DIRECTORS EMOLUMENTS) (Cont d) (a) Directors and chief executive s emoluments (Cont d) (iv) Mr. Lu Zhongming was appointed as executive director of the Company with effect from 7 January (v) (v) Mr. Lv Xiaoping was an non-executive director and was appointed as executive director of the Company with effect from 7 January (vi) (vi) Mr. Liang Zhicheng resigned as executive director of the Company with effect from 7 January (b) (b) Five highest paid individuals The five individuals whose emoluments were the highest in the Group during the years ended 31 December 2016 include three directors (2015: five) whose emoluments are reflected in the analysis presented above. The emoluments payable to the remaining two (2015: Nil) individuals for the year ended 31 December 2016 are as follows: Year ended 31 December RMB 000 RMB 000 Basic salaries, housing allowances, Pre-IPO share award scheme, other allowances and benefits in kind 7,608 Bonuses 2,360 9,968 The emoluments to the two individuals fell within the following band: 5,500,001 6,000,000 Emoluments band HKD5,500,001 HKD6,000, Year ended 31 December Future Land Development Holdings Limited F-153

269 For the year ended 31 December STAFF COSTS (INCLUDING DIRECTORS EMOLUMENTS) (Cont d) (c) (c) During the years ended 31 December 2016 and 2015, no director or any of the five highest paid individuals received any emolument from the Group as an inducement to join, upon joining the Group, leave the Group or as compensation for loss of office. Also, the Group did not pay consideration to any third parties for making available directors services during the year (2015: Nil). (d) 2015 (d) No loans, quasi-loans and other dealings were made available in favour of directors, bodies corporate controlled by and entities connected with directors subsisted at the end of the year or at any time during the year (2015: Nil) INCOME TAX EXPENSE Year ended 31 December RMB 000 RMB 000 Current income tax (a) PRC land appreciation tax (a) 479, ,529 PRC corporate income tax 1,025, ,166 1,504,531 1,516, Deferred income tax (Note 25) 163,677 (8,978) Total income tax charged for the year 1,668,208 1,507,717 (a) ,486, (a) Land appreciation tax for the year ended 31 December 2016 includes the amount of land appreciation tax of RMB798,485,000 on property sales revenue recognised during the year; and a reversal of the previously accrued land appreciation tax of RMB319,228,000 upon the clearance of 19 projects with relevant tax bureaus during the year. 319,228,000 F-154 Future Land Development Holdings Limited

270 For the year ended 31 December INCOME TAX EXPENSE (Cont d) The income tax on the Group s profit before income tax differs from the theoretical amount that would arise using the enacted tax rate of the home country of the companies within the Group as follows: Year ended 31 December RMB 000 RMB 000 Profit before income tax 4,135,368 3,363,954 PRC land appreciation tax (479,258) (614,529) 3,656,110 2,749,425 25% Income tax calculated at statutory rate of 25% 914, ,356 (a) Non-deductible expenses (a) 254, ,931 Non-taxable income (58,593) (37,966) Utilisation of previously unrecognised tax losses (35,270) Tax losses not recognised as deferred tax assets 84,704 Prior year tax adjustments 9,876 8,767 PRC withholding tax 20,070 13,100 PRC land appreciation tax 479, ,529 Total income tax expense 1,668,208 1,507,717 (a) (a) Non-deductible expenses for income tax purposes mainly resulted from borrowing costs on senior notes, the expense in relation to the share award and non-deductible entertainment expense. Future Land Development Holdings Limited F-155

271 For the year ended 31 December % 31 INCOME TAX EXPENSE (Cont d) Hong Kong profits tax Hong Kong profits tax has not been provided for as the Group has no estimated assessable profits in Hong Kong during the year (2015: Nil). PRC corporate income tax Under the Corporate Income Tax Law of the PRC ( CIT Law ), the CIT rate applicable to the Group s subsidiaries located in mainland China is 25% % % % 20,070, ,100,000 30% 60% The CIT Law and its implementation rules impose a withholding tax at 10% for dividends distributed by a PRC-resident enterprise to its immediate holding company outside PRC for earnings generated beginning 1 January 2008 and undistributed earnings generated prior to 1 January 2008 are exempted from such withholding tax. A lower 5% withholding tax rate may be applied when the immediate holding companies are established in Hong Kong according to the tax treaty arrangement between the PRC and Hong Kong. For the year ended 31 December 2016, the Group accrued for PRC withholding tax with amount of RMB20,070,000 (2015: RMB13,100,000) based on the tax rate of 5% on a portion of the earnings generated by its PRC entities. The Group controls the dividend policies of these subsidiaries and it has been determined that it is probable that a majority of these earnings will not be distributed in the foreseeable future. Land appreciation tax PRC land appreciation tax is levied at progressive rates ranging from 30% to 60% on the appreciation of land value, being the proceeds from sales of properties less deductible expenditures including lease charges for land use rights and all property development expenditures, and is included in the consolidated statement of income as income tax expense. F-156 Future Land Development Holdings Limited

272 For the year ended 31 December EARNINGS PER SHARE Basic earnings per share for the year is calculated by dividing the profit of the Group attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the year Year ended 31 December Consolidated profit attributable to equity holders of the Company (RMB 000) 1,383,953 1,030,890 Weighted average number of ordinary shares in issue ( 000) 5,658,000 5,666,411 Basic earnings per share (RMB) As there were no dilutive options and other dilutive potential shares in issue during the years ended 31 December 2016 and 2015, diluted earnings per share is the same as basic earnings per share. 33 DIVIDENDS Proposed final dividend of RMB0.05 (2015: RMB0.05) per ordinary share Year ended 31 December RMB 000 RMB , , ,900, No interim dividend was declared during the year (2015: Nil). At a Board meeting held on 24 February 2017, the directors proposed a final dividend for 2016 of RMB0.05 per ordinary share using the share premium account. This proposed dividend is not reflected as a dividend payable in these financial statements, but will be reflected as an appropriation of share premium for the year ending 31 December 2017 upon approval by the shareholders at the forthcoming annual general meeting of the Company. The final dividend in respect of 2015 of RMB0.05 per ordinary share using the share premium account, amounting to RMB282,900,000 in total was approved at the annual general meeting of the Company held on 18 May The amount was fully paid in Future Land Development Holdings Limited F-157

273 For the year ended 31 December BUSINESS COMBINATIONS (a) % 70% 733,476,000 (a) On 22 July 2016, the Group obtained the control of Nanjing Future Land Wanlong Real Estate Co., Ltd. ( Nanjing Wanlong ) after the other investor withdrew its investment with 30% equity interest. As a result, the carrying amount of RMB733,476,000 based on equity method of the Group s originally held 70% equity interest was derecognised and Nanjing Wanlong was consolidated as a 100% subsidiary. The following table summarises the fair value of assets 70% and liabilities of Nanjing Wanlong at the date when Nanjing Wanlong turned from a 70% held joint venture into a 100% subsidiary At 22 July 2016 RMB 000 Recognised amounts of identifiable assets acquired and liabilities assumed: Cash and cash equivalents 493,661 Properties held or under development for sale 3,684,654 Property, plant and equipment 160 Other receivables and prepayments 1,907,890 Deferred income tax assets 349 Trade and other payables (252,009) Current income tax liabilities (82,481) Advances from pre-sale of properties (3,703,788) Borrowings (1,242,000) Deferred income tax liabilities (26,982) Total identifiable net assets 779,454 70% Less: Carrying amount of originally held 70% interest (733,476) Negative goodwill 45, % 779,454,000 70% 45,978, On the consolidation date, total identifiable net assets of Nanjing Wanlong were RMB779,454,000 as a result of measuring at fair value its 100% equity interest, with a difference of RMB45,978,000 compared with the carrying amount of originally held 70% equity interest. As such, a negative goodwill was recognised as gain (Note 27). F-158 Future Land Development Holdings Limited

274 For the year ended 31 December BUSINESS COMBINATIONS (Cont d) (a) (a) (Cont d) ,144,249,000 4,181,329,000 Had Nanjing Wanlong been consolidated from 1 January 2016, the consolidated income statement would show pro-forma revenue of RMB29,144,249,000 and profit before income tax of RMB4,181,329, ,550,467, ,188,176 The revenue included in the consolidated income statement since 22 July 2016 contributed by Nanjing Wanlong was RMB1,550,467,560. Nanjing Wanlong also contributed profit of RMB184,188,176 over the same period. (b) ,630, % 5,630, ,802 (b) On 2 February 2015, the Group acquired 100% equity interests in Jiangsu Yungui Network Technology Co., Ltd. ( Jiangsu Yungui ), for a total consideration of RMB5,630,648. On the acquisition date, total identifiable net assets of Jiangsu Yungui were RMB5,630,648 (including cash and cash equivalents of RMB622,802), which is same as the consideration amount. As such, no goodwill was recognised. (c) , % 642, , (b) (c) On 12 October 2015, the Group acquired 100% equity interests in Changzhou Pingan Property Management Co., Ltd. ( Pingan Property ) for a total consideration of RMB642,033. On the acquisition date, total identifiable net assets of Pingan Property were RMB642,033 (including cash and cash equivalents of RMB996,939), which is the same as the consideration amount. As such, no goodwill was recognised. The Group disposed Pingan Property, a subsidiary of Changzhou Chuangyue Consultancy Co., Ltd., in May (Note 40(b)) (d) ,000,000 70% (d) On 20 October 2015, the Group acquired 70% equity interests and obtained the control of Jiangsu Jindongfang Yiyangyuan Property Co., Ltd. ( Jindongfang ), for a total consideration of RMB392,000,000. Future Land Development Holdings Limited F-159

275 For the year ended 31 December BUSINESS COMBINATIONS (Cont d) The following table summarises the consideration paid for Jindongfang, the fair value of assets acquired, liabilities assumed and the non-controlling interest at the acquisition date At 20 October 2015 RMB 000 Total consideration in cash 392,000 Recognised amounts of identifiable assets acquired and liabilities assumed: Cash and cash equivalents 343,053 Property, plant and equipment 521,181 Available-for-sale financial instruments 1,100 Land use rights 34,854 Trade and other receivables and prepayments 236,600 Deferred income tax liabilities (3,889) Trade and other payables (542,385) Current portion of long-term borrowings (30,000) Total identifiable net assets 560,514 Less: Non-controlling interest (168,514) Net assets acquired 392,000 70% The fair value of the non-controlling interest in Jindongfang, an unlisted company, was estimated by using the purchase price paid for acquisition of 70% stake in Jindongfang. This purchase price was adjusted for the lack of control and lack of marketability that market participants would consider when estimating the fair value of the non-controlling interest in Jindongfang. 70% 392,000,000 On the acquisition date, total identifiable net assets of Jindongfang were RMB392,000,000 as a result of measuring at fair value its 70% equity interest, which is same as the consideration amount. As such, no goodwill was recognised , ,504 The revenue included in the consolidated income statement since 20 October 2015 contributed by Jindongfang was RMB36,584. Jindongfang also contributed loss of RMB876,504 over the same period ,836,011,000 3,367,230,000 Had Jindongfang been consolidated from 1 January 2015, the consolidated income statement would show pro-forma revenue of RMB23,836,011,000 and profit before income tax of RMB3,367,230,000. F-160 Future Land Development Holdings Limited

276 For the year ended 31 December CASH GENERATED FROM OPERATIONS Year ended 31 December RMB 000 RMB 000 Profit before income tax 4,135,368 3,363,954 Adjustments for: 28 Depreciation (Note 28) 213, ,265 Amortisation 13,530 8, Losses on disposal of property, plant and equipment (Note 27) 2, Gains from disposal of subsidiaries (Note 40) 40 (171,361) 34 Negative goodwill arising on business combination (Note 34) (45,978) 20 Pre-IPO share award scheme expenses (Note 20) 3,479 8, Restricted share incentive scheme expenses (Note 20) 9,736 7 Fair value gains on investment properties (Note 7) (582,150) (815,106) Fair value gains on derivative financial instruments (11,840) 28 Accrual of provision for properties held (or under development) for sale (Note 28) 242, Reversal of provision for properties held (or under development) for sale (Note 15) (331,838) (206,273) Transaction with non-controlling interests (3,025) 9 Share of results of associates (Note 9) (1,496) (103,810) 10 Share of results of joint ventures (Note 10) (176,565) 61, Dividend income on available-for-sale financial assets (Note 27) (9,312) (6,256) 29 Finance costs (Note 29) 669, , Net foreign exchange losses/(gains) relating to borrowings (Note 29) 281, , Net foreign exchange losses on cash and cash equivalents (Note 29) (9,397) 8, Interest income (Note 29) (161,227) (136,133) Expenditure of intangible assets 12,008 Expenditure of construction in progress 12,177 Changes in working capital 18 Restricted cash relating to operating activities (Note 18) (1,131,408) (14,760) Prepayments for leasehold land (551,198) (3,535,566) Properties held or under development for sale (excluding capitalised interest) (1,817,688) (2,032,397) Trade and other receivables and prepayments (2,340,395) (1,254,614) Advances from pre-sale of properties 10,314,057 2,763,630 Trade and other payables 93,390 1,207,699 Cash generated from operations 8,415, ,273 Future Land Development Holdings Limited F-161

277 For the year ended 31 December CASH GENERATED FROM OPERATIONS (Cont d) In the consolidated statement of cash flows, proceeds from disposal of property, plant and equipment comprise: Year ended 31 December RMB 000 RMB Net book value (Note 6) 5,272 1, Losses on disposal of property, plant and equipment (Note 27) (2,020) (393) Proceeds from disposal of property, plant and equipment 3, COMMITMENTS (a) (a) Property development expenditure commitments As at 31 December 2016 and 2015, property development expenditure committed but not yet incurred are as follows: As at 31 December RMB 000 RMB 000 Contracted but not provided for 32,220,885 19,166,565 F-162 Future Land Development Holdings Limited

278 For the year ended 31 December COMMITMENTS (Cont d) (b) (b) Capital commitments As at 31 December 2016 and 2015, capital committed but not yet incurred are as follows: As at 31 December RMB 000 RMB 000 Committed acquisition of equipment 188,444 (c) (c) Operating lease commitments As at 31 December 2016 and 2015, the future aggregate minimum rental expenses in respect of certain office buildings held under non-cancellable operating leases are payable in the following periods: As at 31 December RMB 000 RMB 000 Within 1 year 32,439 17,989 1 to 5 years 91,183 40,448 After 5 years 45,948 26, ,570 85,319 Future Land Development Holdings Limited F-163

279 For the year ended 31 December COMMITMENTS (Cont d) (d) (d) Investment commitments As at 31 December 2016 and 2015, committed investments are as follows: As at 31 December RMB 000 RMB 000 Committed equity acquisition 1,255,297 Committed investments in associates 800,000 Committed investments in joint ventures 27, ,000 2,083, ,000 (e) (e) Operating lease rentals receivable As at 31 December 2016 and 2015, the future aggregate minimum rental receipts under non-cancellable operating leases in respect of land and buildings are receivable in the following periods: As at 31 December RMB 000 RMB 000 Within 1 year 430, ,908 1 to 5 years 1,023, ,172 After 5 years 446, ,702 1,901,140 1,187,782 F-164 Future Land Development Holdings Limited

280 For the year ended 31 December FINANCIAL GUARANTEES AND CONTINGENT LIABILITIES (a) (a) Guarantees on mortgage facilities The Group had the following contingent liabilities in respect of financial guarantees on mortgage facilities as at 31 December 2016 and 2015: As at 31 December RMB 000 RMB 000 Guarantees in respect of mortgage facilities for certain purchasers of the Group s properties 12,130,334 5,376,137 The Group has arranged bank financing for certain purchasers of the Group s properties and provided guarantees to secure obligations of such purchaser (i) for repayments. Such guarantees will terminate upon the earlier of (i) the issue of the real estate ownership certificate by government authorities to the purchaser which will generally occur within an average period of (ii) two to three years from the completion of the guarantee registration and submitted to the mortgage bank; or (ii) the satisfaction of mortgage loans by the purchasers of the properties. Pursuant to the terms of the guarantees, upon default of mortgage payments by these purchasers, the Group is responsible to repay the outstanding mortgage principal together with accrued interest and penalties owed by the defaulting purchasers to the banks and the Group is entitled to take over the legal title and possession of the related properties. The Group s guarantee period starts from the date of grant of mortgage. The directors consider that the likelihood of default of payments by the purchasers is minimal and therefore the financial guarantee measured at fair value is immaterial. (b) (b) Corporate guarantees There are certain corporate guarantees provided by 22 the Group s subsidiaries for each other in respect of borrowings (Note 22) as at 31 December 2016 and The directors consider that the subsidiaries are able to sufficiently financially resourced to settle their obligations. Future Land Development Holdings Limited F-165

281 For the year ended 31 December RELATED-PARTY TRANSACTIONS (a) (a) Name and relationship with related parties Name Relationship Mr. Wang Mr. Wang Xiaosong Shanghai Wan Zhi Cheng Real Estate Development Co., Ltd. Atlantic Modular System Ltd. Suzhou Golden Century Real Estate Development Co., Ltd. Qingdao Zhuoyue Future Land Property Co., Ltd. Qingdao Future Land Dongjun Real Estate Development Co., Ltd. Qingdao Zhuoyue Dongjun Property Co., Ltd. The controlling shareholder and a director of the Company Family member of Mr. Wang An associate company of the Group An associate company of the Group An associate company of the Group A joint venture of the Group A subsidiary of a joint venture of the Group A subsidiary of a joint venture of the Group Nanjing Future Land Wanlong Real Estate Co., Ltd. A joint venture of the Group before 22 July 2016 Shanghai Henggu Real Estate Development Co., Ltd. Shanghai Songming Real Estate Development Co., Ltd. Shanghai Xincheng Xudi Real Estate Co., Ltd. Suzhou Future Land Wanrui Real Estate Co., Ltd. Changshu Zhongzhi Real Estate Co., Ltd. Kunshan Derui Real Estate Co., Ltd. Changshu Wan Zhong Cheng Real Estate Co., Ltd. Chengdu Future Land Wanbo Real Estate Development Co., Ltd. A Subsidiary of the Group after 22 July 2016 A joint venture of the Group A joint venture of the Group A joint venture of the Group A joint venture of the Group A joint venture of the Group A joint venture of the Group A joint venture of the Group A joint venture of the Group F-166 Future Land Development Holdings Limited

282 For the year ended 31 December RELATED-PARTY TRANSACTIONS (Cont d) (a) (a) Name and relationship with related parties (Cont d) Name Relationship Taizhou Future Land Wanbo Real Estate Development Co., Ltd. Yiwu Injoy Real Estate Development Co., Ltd. Suzhou Chenghong Real Estate Development Co., Ltd. Suzhou Shengming Real Estate Development Co., Ltd. Nanjing Future Land Chuangjin Real Estate Co., Ltd. Hangzhou Jiahao Real Estate Development Co., Ltd. Tianjin Future Land Injoy Real Estate Development Co., Ltd. Suzhou Baixiang Property Co., Ltd. Shanghai Ruitao Real Estate Development Co., Ltd. Nanjing Future Land Guanghong Real Estate Co., Ltd. Shanghai Jiayu Property Co., Ltd. Nanjing Minghongxin Real Estate Development Co., Ltd. Nanjing Xinbaohong Real Estate Co., Ltd. Hangzhou Future Land Songjun Real Estate Development Co., Ltd. Hangzhou Bintong Real Estate Development Co., Ltd. Yongqing Yintai Future Land Construction and Development Co., Ltd. Suzhou Yusheng Real Estate Development Co., Ltd. Yangzhou Future Land Yuesheng Real Estate Development Co., Ltd. Shanghai Quankun Investment Co., Ltd. A joint venture of the Group A joint venture of the Group A joint venture of the Group A joint venture of the Group A joint venture of the Group A joint venture of the Group A joint venture of the Group A joint venture of the Group A joint venture of the Group A joint venture of the Group A joint venture of the Group A joint venture of the Group A joint venture of the Group A joint venture of the Group A joint venture of the Group A joint venture of the Group A joint venture of the Group A joint venture of the Group A joint venture of the Group Future Land Development Holdings Limited F-167

283 For the year ended 31 December RELATED-PARTY TRANSACTIONS (Cont d) (a) (a) Name and relationship with related parties (Cont d) Name Relationship Shanghai Xinyao Investment Co., Ltd. Shanghai Jiapeng Real Estate Development Co., Ltd. Hangzhou Wanzhao Property Co., Ltd. Suzhou Jiazhong Real Estate Development Co., Ltd. Nanjing Huilong Real Estate Co., Ltd. Tianjin Future Land Baojun Real Estate Development Co., Ltd. Shanghai Xiyue Real Estate Development Co., Ltd. Wuhan Qingneng Xinrong Property Co., Ltd. Shanghai Sheshan Country Club Co., Ltd. Changzhou Wujin District Jindongfang Care Centre Tibet Future Land Property Management Co., Ltd. Wealth Zone Hong Kong Investments Limited A joint venture of the Group A joint venture of the Group A joint venture of the Group A joint venture of the Group A joint venture of the Group A joint venture of the Group A joint venture of the Group A joint venture of the Group A subsidiary of a joint venture of the Group Unconsolidated investment of the Group A related company under Mr. Wang s control Parent company F-168 Future Land Development Holdings Limited

284 For the year ended 31 December RELATED-PARTY TRANSACTIONS (Cont d) (b) (b) Transactions with related parties During the year ended 31 December 2016, the Group has the following related party transactions: Year ended 31 December RMB 000 RMB 000 (i) (i) Fundings to related parties Suzhou Yusheng Real Estate Development Co., Ltd. 10,917,986 Tianjin Future Land Injoy Real Estate Development Co., Ltd. 3,487,147 Taizhou Future Land Wanbo Real Estate Development Co., Ltd. 3,286, ,366 Nanjing Future Land Wanlong Real Estate Co., Ltd. 3,018,748 1,718,312 Nanjing Future Land Chuangjin Real Estate Co., Ltd. 2,432,802 Tianjin Future Land Baojun Real Estate Development Co., Ltd. 1,731,381 Chengdu Future Land Wanbo Real Estate Development Co., Ltd. 1,566, ,868 Yangzhou Future Land Yuesheng Real Estate Development Co., Ltd. 1,472,101 Suzhou Future Land Wanrui Real Estate Co., Ltd. 1,343, ,000 Nanjing Xinbaohong Real Estate Co., Ltd. 1,022,929 Shanghai Xinyao Investment Co., Ltd. 936,970 Shanghai Quankun Investment Co., Ltd. 927,170 Nanjing Huilong Real Estate Co., Ltd. 784,432 Shanghai Jiapeng Real Estate Development Co., Ltd. 658,026 Nanjing Future Land Guanghong Real Estate Co., Ltd. 578,691 Shanghai Sheshan Country Club Co., Ltd. 571,726 1,910,000 Qingdao Zhuoyue Future Land Property Co., Ltd. 499, ,392 Shanghai Ruitao Real Estate Development Co., Ltd. 496,426 Yiwu Injoy Real Estate Development Co., Ltd. 457,230 17,055 Kunshan Derui Real Estate Co., Ltd. 455, ,010 Suzhou Shengming Real Estate Development Co., Ltd. 425,902 Suzhou Jiazhong Real Estate Development Co., Ltd. 422,679 Hangzhou Wanzhao Property Co., Ltd. 286,602 Suzhou Chenghong Real Estate Development Co., Ltd. 248,934 Shanghai Xiyue Real Estate Development Co., Ltd. 167,181 Suzhou Baixiang Property Co., Ltd. 156,697 Atlantic Modular System Ltd. 129,057 30,000 Hangzhou Bintong Real Estate Development Co., Ltd. 89,950 Shanghai Songming Real Estate Development Co., Ltd. 66,845 28,320 Wuhan Qingneng Xinrong Property Co., Ltd. 62,150 Future Land Development Holdings Limited F-169

285 For the year ended 31 December RELATED-PARTY TRANSACTIONS (Cont d) (b) (b) Transactions with related parties (Cont d) Year ended 31 December RMB 000 RMB 000 (i) (i) Fundings to related parties (Cont d) Shanghai Wan Zhi Cheng Real Estate Development Co., Ltd. 51,000 Hangzhou Future Land Songjun Real Estate Development Co., Ltd. 41,314 Changzhou Wujin District Jindongfang Care Centre 31, ,856 Changshu Zhongzhi Real Estate Co., Ltd. 13, ,050 Hangzhou Jiahao Real Estate Development Co., Ltd. 4,597 Yongqing Yintai Future Land Construction and Development Co., Ltd. 400 Nanjing Minghongxin Real Estate Development Co., Ltd. 87 Changshu Wan Zhong Cheng Real Estate Co., Ltd. 22,725 Shanghai Henggu Real Estate Development Co., Ltd. 11,200 38,842,880 6,667,154 (ii) (ii) Fundings from related parties Suzhou Yusheng Real Estate Development Co., Ltd. 10,134,126 Tianjin Future Land Injoy Real Estate Development Co., Ltd. 5,294,347 Taizhou Future Land Wanbo Real Estate Development Co., Ltd. 3,365,583 1,825,000 Nanjing Future Land Chuangjin Real Estate Co., Ltd. 2,756,805 Nanjing Future Land Wanlong Real Estate Co., Ltd. 2,740,591 3,329,600 Shanghai Sheshan Country Club Co., Ltd. 3,477, ,330 Chengdu Future Land Wanbo Real Estate Development Co., Ltd. 1,856,894 1,573,000 Suzhou Future Land Wanrui Real Estate Co., Ltd. 1,790,065 1,665,290 Suzhou Jiazhong Real Estate Development Co., Ltd. 1,568,155 Shanghai Jiapeng Real Estate Development Co., Ltd. 1,411,173 Suzhou Shengming Real Estate Development Co., Ltd. 1,352,261 Shanghai Jiayu Property Co., Ltd 1,219,410 Shanghai Ruitao Real Estate Development Co., Ltd. 1,174,826 Yiwu Injoy Real Estate Development Co., Ltd. 1,011,458 Yangzhou Future Land Yuesheng Real Estate Development Co., Ltd. 1,002,101 Nanjing Xinbaohong Real Estate Co., Ltd. 987,404 Kunshan Derui Real Estate Co., Ltd. 916, ,910 Qingdao Zhuoyue Future Land Property Co., Ltd. 833,530 1,095,500 Suzhou Chenghong Real Estate Development Co., Ltd. 765,534 20,000 Nanjing Future Land Guanghong Real Estate Co., Ltd. 562,203 Changshu Zhongzhi Real Estate Co., Ltd. 319, ,050 Hangzhou Wanzhao Property Co., Ltd. 283,322 Hangzhou Jiahao Real Estate Development Co., Ltd. 237,328 F-170 Future Land Development Holdings Limited

286 For the year ended 31 December RELATED-PARTY TRANSACTIONS (Cont d) (b) (b) Transactions with related parties (Cont d) Year ended 31 December RMB 000 RMB 000 (ii) (ii) Fundings from related parties (Cont d) Hangzhou Future Land Songjun Real Estate Development Co., Ltd. 183,814 Changzhou Wujin District Jindongfang Care Centre 158,767 Changshu Wan Zhong Cheng Real Estate Co., Ltd. 148,411 29,989 Shanghai Xiyue Real Estate Development Co., Ltd. 111,381 Shanghai Songming Real Estate Development Co., Ltd. 74,845 66,720 Atlantic Modular System Ltd. 99,000 Wuhan Qingneng Xinrong Property Co., Ltd. 50,148 Tianjin Future Land Baojun Real Estate Development Co., Ltd. 50,025 Hangzhou Bintong Real Estate Development Co., Ltd. 50,000 Shanghai Wan Zhi Cheng Real Estate Development Co., Ltd. 17,000 80,000 Suzhou Baixiang Property Co., Ltd. 15,697 Shanghai Henggu Real Estate Development Co., Ltd. 11, ,650 Shanghai Xinyao Investment Co., Ltd. 3,250 Shanghai Quankun Investment Co., Ltd. 3,250 Nanjing Huilong Real Estate Co., Ltd. 1,209 Nanjing Minghongxin Real Estate Development Co., Ltd. 68 Shanghai Xincheng Xudi Real Estate Co., Ltd. 70,000 Suzhou Golden Century Real Estate Development Co., Ltd. 46,038,591 11,676,039 (iii) (iii) Paid on behalf of related parties Shanghai Jiayu Property Co., Ltd 1,887,000 Suzhou Yusheng Real Estate Development Co., Ltd. 1,779,000 Suzhou Jiazhong Real Estate Development Co., Ltd. 1,457,400 Shanghai Ruitao Real Estate Development Co., Ltd. 682,000 Suzhou Golden Century Real Estate Development Co., Ltd. 522,308 Tianjin Future Land Injoy Real Estate Development Co., Ltd. 413,850 Nanjing Xinbaohong Real Estate Co., Ltd. 380,000 Nanjing Huilong Real Estate Co., Ltd. 370,000 Hangzhou Jiahao Real Estate Development Co., Ltd. 320,000 Suzhou Chenghong Real Estate Development Co., Ltd. 276,600 Hangzhou Future Land Songjun Real Estate Development Co., Ltd. 223,000 Tianjin Future Land Baojun Real Estate Development Co., Ltd. 213,548 Nanjing Minghongxin Real Estate Development Co., Ltd. 82,500 Tibet Future Land Property Management Co., Ltd. 2,559 Future Land Development Holdings Limited F-171

287 For the year ended 31 December RELATED-PARTY TRANSACTIONS (Cont d) (b) (b) Transactions with related parties (Cont d) Year ended 31 December RMB 000 RMB 000 (iii) (iii) Paid on behalf of related parties (Cont d) Yiwu Injoy Real Estate Development Co., Ltd. 756,750 Taizhou Future Land Wanbo Real Estate Development Co., Ltd. 569,000 Changshu Zhongzhi Real Estate Co., Ltd. 288,863 Chengdu Future Land Wanbo Real Estate Development Co., Ltd. 180,000 Kunshan Derui Real Estate Co., Ltd. 131,100 Changshu Wan Zhong Cheng Real Estate Co., Ltd. 79,977 8,609,765 2,005,690 (iv) (iv) Income derived from provision of project management services to joint ventures Shanghai Sheshan Country Club Co., Ltd. 39,328 Changshu Zhongzhi Real Estate Co., Ltd. 38,355 Kunshan Derui Real Estate Co., Ltd. 29,378 Chengdu Future Land Wanbo Real Estate Development Co., Ltd. 24,039 Taizhou Future Land Wanbo Real Estate Development Co., Ltd. 19,890 Suzhou Shengming Real Estate Development Co., Ltd. 19,299 Hangzhou Jiahao Real Estate Development Co., Ltd. 15,405 Suzhou Future Land Wanrui Real Estate Co., Ltd. 12,119 Suzhou Chenghong Real Estate Development Co., Ltd. 4,431 Shanghai Songming Real Estate Development Co., Ltd. 3, ,576 (v) (v) Expenses incurred for accepting residential property management services provided by an entity under a previous subsidiary after disposal 40(b) Tibet Future Land Property Management Co., Ltd. (Note 40(b)) 90,822 (vi) (vi) Expenses incurred for accepting services provided by an associate Atlantic Modular System Ltd. 3,790 (vii) (vii) Disposal of subsidiaries 40(b) Wealth Zone Hong Kong Investments Limited (Note 40(b)) 319,615 F-172 Future Land Development Holdings Limited

288 For the year ended 31 December RELATED-PARTY TRANSACTIONS (Cont d) (b) (b) Transactions with related parties (Cont d) Year ended 31 December RMB 000 RMB 000 (viii) (viii) Dividend paid to a related party Mr Wang Xiaosong 805 (ix) (ix) Repayment of a previous intra-group payable balance to a former subsidiary 2016 During 2016, the Group disposed of its 100% equity interests in Changzhou Chuangyue Consultancy Co., Ltd. (together with its ) subsidiaries, the Chuangyue group ) to the 100% Company s parent company, Wealth Zone Hong Kong (Note 40). The disposal was completed 40 on 31 May 2016 and Chuangyue group was thereafter de-consolidated. Chuangyue group had an intra-group outstanding loan receivable balance of approximately RMB108 million immediately before the disposal which became 108 a related party balance after the disposal. The balance was interest-free and not secured by any assets of the Group. The balance was fully repaid subsequently within one month by the Group in June Future Land Development Holdings Limited F-173

289 For the year ended 31 December RELATED-PARTY TRANSACTIONS (Cont d) (b) (b) Transactions with related parties (Cont d) (x) (x) Key management compensation Key management includes directors (executive and non-executive), chief financial officer, vice presidents and assistant presidents. The compensation paid or payable to key management for employee services is shown below: Year ended 31 December RMB 000 RMB 000 Salaries and other short-term employee benefits 42,371 39,974 F-174 Future Land Development Holdings Limited

290 For the year ended 31 December RELATED-PARTY TRANSACTIONS (Cont d) (b) (b) Transactions with related parties (Cont d) (xi) (xi) Guarantees provided to related parties Guarantee Guarantee Guarantee Guaranteed party amount RMB 000 beginning date ending date Guarantee fulfill or not Suzhou Yusheng Real Estate Development Co., Ltd. Tianjin Future Land Injoy Real Estate Development Co., Ltd. 4,127, October ,273, July January July ,219, Shanghai Jiayu Property Co., Ltd. 22 September September 2019 No 890, Shanghai Sheshan Country Club Co., Ltd. 07 September August 2020 No 838, Suzhou Yusheng Real Estate 30 December June 2017 No Development Co., Ltd.. 735, Nanjing Future Land Chuangjin Real 25 March March 2018 No Estate Co., Ltd. 660, Nanjing Xinbaohong Real Estate Co., Ltd. 30 December December , Nanjing Future Land Chuangjin Real 22 August August 2018 No Estate Co., Ltd. 495, Suzhou Jiazhong Real Estate 29 August January 2020 No Development Co., Ltd. 450, Qingdao Zhuoyue Dongjun Property Co., Ltd. 31 May May 2019 No 408, Shanghai Jiapeng Real Estate 06 September September 2018 No Development Co., Ltd. 367, Hangzhou Jiahao Real Estate 22 January January 2019 No Development Co., Ltd. 250, Yiwu Injoy Real Estate 08 January January 2018 No Development Co., Ltd. No No No Future Land Development Holdings Limited F-175

291 For the year ended 31 December (b) 38 RELATED-PARTY TRANSACTIONS (Cont d) (b) Transactions with related parties (Cont d) (xi) (xi) Guarantees provided to related parties (Cont d) Guarantee Guarantee Guarantee Guaranteed party amount RMB 000 beginning date ending date Guarantee fulfill or not 200, Suzhou Golden Century Real Estate 30 December December 2018 No Development Co., Ltd. 180, Taizhou Future Land Wanbo Real 31 March January 2019 No Estate Development Co., Ltd. 162, Suzhou Future Land Wanrui Real 23 April June 2018 No Estate Co., Ltd. 140, Shanghai Sheshan Country Club Co., Ltd. 13 September September 2019 No 140, Qingdao Future Land Dongjun Real 18 March March 2019 No Estate Development Co., Ltd. 135, Shanghai Ruitao Real Estate 08 July July 2019 No Development Co., Ltd. 130, Shanghai Sheshan Country Club Co., Ltd. 24 August August 2019 No 130, Changshu Zhongzhi Real Estate 09 November April 2017 No Development Co., Ltd. 120, Shanghai Sheshan Country Club Co., Ltd. 16 September September 2019 No 100, Yiwu Injoy Real Estate Development Co., Ltd. 20 October April 2020 No 54, Suzhou Baixiang Property Co., Ltd. 30 December December 2018 No 50, Suzhou Chenghong Real Estate 31 July March 2018 No Development Co., Ltd. 50, Hangzhou Bintong Real Estate Development Co., Ltd. 2 December May 2017 No F-176 Future Land Development Holdings Limited

292 For the year ended 31 December RELATED-PARTY TRANSACTIONS (Cont d) (b) (b) Transactions with related parties (Cont d) (xii) (xii) Equity interests pledged for related parties Pledged party Pledged equity amount Pledge beginning date Pledge ending date 51% Yiwu Injoy Real Estate 08 January January 2018 Development Co., Ltd. 65% Changshu Zhongzhi Real Estate 09 November April 2017 Co., Ltd. 65% Suzhou Yusheng Real Estate Development Co., Ltd. 50% 21 October January Tianjin Future Land Injoy Real Estate 07 July July 2019 Development Co., Ltd. 34% Nanjing Xinbaohong Real Estate Co., Ltd. 70% 30 December December Nanjing Future Land Chuangjin Real 22 August August 2018 Estate Co., Ltd. 35% Suzhou Jiazhong Real Estate 29 August January 2020 Development Co., Ltd. 50% Shanghai Sheshan Country Club 07 September August 2020 Co., Ltd. 51% Shanghai Jiapeng Real Estate Development Co., Ltd. 06 September September 2018 Future Land Development Holdings Limited F-177

293 For the year ended 31 December RELATED-PARTY TRANSACTIONS (Cont d) (c) (c) Related-party balances As at 31 December RMB 000 RMB 000 (i) 16 (i) Amounts due from related parties (Note 16) Suzhou Yusheng Real Estate Development Co., Ltd. 2,562,860 Tianjin Future Land Baojun Real Estate Development Co., Ltd. 1,894,903 Nanjing Huilong Real Estate Co., Ltd. 1,153,223 Shanghai Xinyao Investment Co., Ltd. 933,720 Shanghai Quankun Investment Co., Ltd. 923,920 Shanghai Jiayu Property Co., Ltd 667,590 Suzhou Golden Century Real Estate Development Co., Ltd. 522,308 Yangzhou Future Land Yuesheng Real Estate Development Co., Ltd. 470,000 Nanjing Xinbaohong Real Estate Co., Ltd. 415,525 Changzhou Wujin District Jindongfang Care Centre 335, ,856 Suzhou Jiazhong Real Estate Development Co., Ltd. 311,923 Yiwu Injoy Real Estate Development Co., Ltd. 219, ,805 Suzhou Baixiang Property Co., Ltd. 141,000 Hangzhou Jiahao Real Estate Development Co., Ltd. 87,269 Nanjing Minghongxin Real Estate Development Co., Ltd. 82,518 Hangzhou Future Land Songjun Real Estate Development Co., Ltd. 80,500 Atlantic Modular System Ltd. 60,057 30,000 Shanghai Xiyue Real Estate Development Co., Ltd. 55,800 Hangzhou Bintong Real Estate Development Co., Ltd. 39,950 Kunshan Derui Real Estate Co., Ltd. 18,179 Nanjing Future Land Guanghong Real Estate Co., Ltd. 16,488 Wuhan Qingneng Xinrong Property Co., Ltd. 12,002 Shanghai Ruitao Real Estate Development Co., Ltd. 3,600 Hangzhou Wanzhao Property Co., Ltd. 3,280 Chengdu Future Land Wanbo Real Estate Co., Ltd. 435 Yongqing Yintai Future Land Construction and Development Co., Ltd. 400 Qingdao Zhuoyue Future Land Property Co., Ltd. 191,672 Shanghai Sheshan Country Club Co., Ltd. 1,035,670 Changshu Wan Zhong Cheng Real Estate Co., Ltd. 72,714 11,012,401 2,566,717 F-178 Future Land Development Holdings Limited

294 For the year ended 31 December RELATED-PARTY TRANSACTIONS (Cont d) (c) (c) Related-party balances (Cont d) As at 31 December RMB 000 RMB 000 (ii) 24 (ii) Amounts due to related parties (Note 24) Shanghai Sheshan Country Club Co., Ltd. 1,869,640 Tianjin Future Land Injoy Real Estate Development Co., Ltd. 1,393,350 Suzhou Future Land Wanrui Real Estate Co., Ltd. 1,242, ,634 Taizhou Future Land Wanbo Real Estate Development Co., Ltd. 1,048, ,634 Suzhou Shengming Real Estate Development Co., Ltd. 926,360 Chengdu Future Land Wanbo Real Estate Development Co., Ltd. 861, ,132 Shanghai Jiapeng Real Estate Development Co., Ltd. 753,147 Kunshan Derui Real Estate Co., Ltd. 531,818 51,798 Changshu Zhongzhi Real Estate Co., Ltd. 471, ,137 Nanjing Future Land Chuangjin Real Estate Co., Ltd. 324,003 Suzhou Chenghong Real Estate Development Co., Ltd. 260,000 20,000 Shanghai Wan Zhi Cheng Real Estate Development Co., Ltd. 206, ,000 Qingdao Zhuoyue Future Land Property Co., Ltd. 142,518 Shanghai Xincheng Xudi Real Estate Co., Ltd. 142, ,435 Shanghai Henggu Real Estate Development Co., Ltd. 107,650 96,450 Changshu Wan Zhong Cheng Real Estate Co., Ltd. 75,697 Shanghai Songming Real Estate Development Co., Ltd. 46,400 38,400 Tibet Future Land Property Management Co., Ltd. 6,464 Nanjing Future Land Wanlong Real Estate Co., Ltd. 1,816,182 10,408,432 4,905, ,000,000 10% ,000, % Except for certain amounts due from Atlantic Modular System Ltd. of RMB30,000,000 advanced in 2016 (which bear annual interest of 10%) and RMB30,000,000 advanced in 2015 (which bear annual interest of 0.01%), the amounts due from and due to related parties are unsecured, bear no interest and are repayable on demand Since the funds were provided near the year end, the amounts of interest received or receivable from the interest bearing related party balances are not material in 2016 and Future Land Development Holdings Limited F-179

295 For the year ended 31 December TRANSACTIONS WITH NON-CONTROLLING INTERESTS (a) B 24,683,000 3,693,000 3,693,000 20,990,000 (a) In March 2015, the former B share company transferred all of its equity interest in Jiangsu Future Land Property Management Co., Ltd. and its subsidiary ( Future Land Property ) to Wealth Zone Development Co., Ltd. (a wholly owned subsidiary of the Group) for a total consideration of RMB24,683,000. The carrying amount of the non-controlling interests in Future Land Property on the date of acquisition was RMB3,693,000. The Group recognised a decrease in non-controlling interests of RMB3,693,000 and a decrease in equity attributable to owners of the Company of RMB20,990,000. The effect of changes in the ownership interest of Future Land Property on the equity attributable to owners of the Company during the year is summarised as follows: RMB 000 Carrying amount of non-controlling interests acquired 3,693 Consideration paid to non-controlling interests (24,683) Excess of consideration paid recognised within equity (20,990) (b) ,000, % 3,025,000 (b) In June 2015, a third party Changzhou Zhuofan injected a capital of RMB4,000,000 to acquire 6.25% equity interest of Future Land Property. The difference between fair value of consideration received and the relevant share transferred of the carrying value of net assets of Future Land Property of RMB3,025,000 representing gain is recorded in other reserves. The effect of changes in the ownership interest of Future Land Property on the equity attributable to owners of the Company during the year is summarised as follows: RMB 000 Carrying amount of net assets transferred to non-controlling interests (975) Consideration received from non-controlling interests 4,000 Excess of consideration received recognised within equity 3,025 F-180 Future Land Development Holdings Limited

296 For the year ended 31 December TRANSACTIONS WITH NON-CONTROLLING INTERESTS (Cont d) (c) B 58.86% A ,064,758 A A B A B BA A A B B (c) In December 2015, the A share company, who originally held 58.86% of the former B share company, issued 542,064,758 A shares ( A Shares ) at the price of RMB9.82 per share, to all shareholders of the former B share company, other than the A share company, and absorbs and merges the former B share company by way of share swap ( the Merger ). As such, the former B share company becomes a wholly-owned subsidiary of the A share company. At the same time, the A share company was listed on the Shanghai Stock Exchange. Upon completion of the transactions mentioned above, the A share company becomes the subsisting company which holds all the assets, liabilities, businesses, personnel, contracts and all other rights and obligations of the former B share company, whilst the former B share company was delisted from the Shanghai Stock Exchange and will be deregistered as a legal person. A A B 3,462,508,000 B The consideration for the Merger was satisfied by the issuance of A Shares by the A share company. The carrying amount of the non-controlling interests in the former B share company on the date of share swap was RMB3,462,508,000. The effect of changes in the ownership interest of the former B share company on the equity attributable to owners of the Company during the year is summarised as follows: RMB 000 B A Carrying amount of non-controlling interests of the former B share company 3,462,508 Carrying amount of net assets transferred to non-controlling interests of the A share company (3,534,641) Net changes in non-controlling interests (72,133) Transaction costs capitalised (38,100) Net loss from changes of non-controlling interest in subsidiaries (110,233) Future Land Development Holdings Limited F-181

297 For the year ended 31 December TRANSACTIONS WITH NON-CONTROLLING INTERESTS (Cont d) (d) ,000,000 20% 562,139,000 (d) In August 2015, a third party Beijing Qianshi Chuangfu Asset Management Co., Ltd. injected a capital of RMB550,000,000 to acquire 20% equity interest of Nanchang Future Land Yuesheng Real Estate Development Co., Ltd.. The difference between fair value of consideration received and the relevant share transferred of the carrying value of net assets of Nanchang Future Land Yuesheng Real Estate Development Co., Ltd. of RMB562,139,000 representing loss is recorded in other reserves. The effect of changes in the ownership interest of Nanchang Future Land Yuesheng Real Estate Development Co., Ltd. on the equity attributable to owners of the Company during the year is summarised as follows: RMB 000 Carrying amount of net assets transferred to a non-controlling interest (562,139) Consideration received from a non-controlling interest 550,000 Shortfall from consideration received recognised within equity (12,139) F-182 Future Land Development Holdings Limited

298 For the year ended 31 December TRANSACTIONS WITH NON-CONTROLLING INTERESTS (Cont d) (e) ,800,000 73,576, ,000,000 (e) In November 2015, a third party Beijing Qianshi Chuangfu Asset Management Co., Ltd. reduced a capital of USD129,800,000 of Suzhou Kaituo Development Co., Ltd.. In addition, the Company paid other consideration to Beijing Qianshi Chuangfu Asset Management Co., Ltd. with amount of RMB73,576,000. The difference between fair value of consideration paid and the relevant share acquired of the carrying value of net assets of Suzhou Kaituo Development Co., Ltd. of RMB800,000,000 representing loss is recorded in other reserves. The effect of changes in the ownership interest of Suzhou Kaituo Development Co., Ltd. on the equity attributable to owners of the Company during the year is summarised as follows: RMB 000 Carrying amount of a non-controlling interest acquired 800,000 Consideration paid to a non-controlling interest Capital reduction to a non-controlling interest (800,000) Other consideration paid to a non-controlling interest (73,576) Excess of consideration paid recognised within equity (73,576) Future Land Development Holdings Limited F-183

299 For the year ended 31 December TRANSACTIONS WITH NON-CONTROLLING INTERESTS (Cont d) (f) Shanghai Gefei Jingxi Investment Co., Ltd 30% 131,882,000 36,826,000 (f) In April 2016, the Group acquired from Shanghai Gefei Jingxi Investment Co., Ltd., 30% equity interest in Suzhou Future Land Chuangsheng Real Estate Co., Ltd. ( Suzhou Chuangsheng ) at a consideration of RMB131,882,000. The difference between the consideration and the relevant share of the carrying value of the net asset of Suzhou Chuangsheng with the amount of RMB36,826,000 was recorded as a debit to other reserves. The effect of changes in the ownership interest of Suzhou Chuangsheng on the equity attributable to owners of the Company during the year is summarised as follows: RMB 000 Carrying amount of a non-controlling interest acquired 95,056 Consideration paid to a non-controlling interest Capital reduction to a non-controlling interest (9,000) Other consideration paid to a non-controlling interest (122,882) Excess of consideration paid recognised within equity (36,826) F-184 Future Land Development Holdings Limited

300 For the year ended 31 December DISPOSAL OF SUBSIDIARIES AND BUSINESS (a) (a) Disposal of Shanghai Diyu Business Management Co., Ltd On 21 June 2016, the Group disposed of its 100% equity interests in Shanghai Diyu Business Management Co., Ltd. 100% at a consideration of RMB1,049,820,000. The subsidiary 1,049,820,000 was engaged in investment property business. RMB 000 Consideration received in cash 1,049,820 Net assets disposed of (1,160,185) Loss on disposal (110,365) The aggregated assets and liabilities in respect of the above disposal were as follows: RMB 000 Cash and cash equivalents 7,851 Trade and other receivables 3,409 Investment property 1,191,000 Trade and other payables (5,321) Deferred income tax liabilities (33,946) Non-controlling interests (2,808) Net assets disposed of 1,160,185 Cash received 1,049,820 Less: Cash and cash equivalents in the subsidiary disposed of (7,851) Net cash inflow from the disposal 1,041,969 Future Land Development Holdings Limited F-185

301 For the year ended 31 December (b) % 320,000,000 38(b)(v) 40 DISPOSAL OF SUBSIDIARIES AND BUSINESS (Cont d) (b) Disposal of Changzhou Chuangyue Consultancy Co., Ltd. On 31 May 2016, the Group disposed of its 100% equity interests in Changzhou Chuangyue Consultancy Co., Ltd. at a consideration of RMB320,000,000 to the Company s parent company, Wealth Zone Hong Kong. The subsidiary was engaged in residential property management business. An entity under that former subsidiary, Tibet Future Land Property Management Co., Ltd., continues to provide residential property management services to the Group after the disposal (Note 38(b)(v)). RMB 000 Consideration received in cash 320,000 Net assets disposed of (44,103) Transaction costs (385) Gain on disposal 275,512 The aggregated assets and liabilities in respect of the above disposal were as follows: RMB 000 Cash and cash equivalents 64,398 Prepayments 21,743 Trade and other receivables 472,733 Properties held or under development for sale 328 Property, plant and equipment 6,331 Intangible assets 2,844 Deferred income tax assets 1,768 Available-for-sale financial assets 300 Prepayments from customers (100,354) Trade and other payables (418,906) Non-controlling interests (7,082) Net assets disposed of 44,103 Cash received 320,000 Less: Cash and cash equivalents in the subsidiary disposed of (64,398) Transaction costs (385) Net cash inflow from the disposal 255,217 F-186 Future Land Development Holdings Limited

302 For the year ended 31 December DISPOSAL OF SUBSIDIARIES AND BUSINESS (Cont d) (b) (b) Disposal of Changzhou Chuangyue Consultancy Co., Ltd. (Cont d) The board of directors is of the view that the amount of the above transaction was insignificant, and hence does not constitute discontinued operation of business. (c) (c) Disposal of Nanjing Future Land Chuangjin Real Estate Development Co., Ltd. Nanjing Chuangjin was established in November 2015 as a subsidiary of the Group. In June 2016, an independent third party investor injected a capital of RMB200,000, ,000,000 to Nanjing Chuangjin. Subsequent to the Capital injection, the Group s interest in Nanjing Chuangjin 70.15% was diluted to 70.15%. According to the investment agreement and articles of Nanjing Chuangjin, the Group and the independent third party investor will jointly control the project development and sales of properties as well as other key relevant activities of Nanjing Chuangjin. Hence it is accounted for as a joint venture and no longer a subsidiary of the Group. The gain from disposal of Nanjing Chuangjin is 787,000 RMB787,000. (d) (d) Disposal of Suzhou Golden Century Real Estate Co., Ltd The Group acquired 100% equity interests in Suzhou 100% Golden Century in September 2016, which the directors consider is an asset acquisition in substance rather than business combination, and therefore accounted for as asset acquisition and then sold 50% of it s equity 50% interests to another investor in November 2016 with the disposal consideration at the same price as the 50% acquisition. Therefore, there is no gain or loss from the disposal of 50% of the Group s equity interests in Suzhou Golden Century. Future Land Development Holdings Limited F-187

303 For the year ended 31 December DISPOSAL OF SUBSIDIARIES AND BUSINESS (Cont d) (e) (e) Disposal of Kunshan Future Land Duoqimiao Business Management Consultancy Co., Ltd On 16 December 2016, the Group disposed of its 100% equity interests in Kunshan Future Land Duoqimiao 100% Business Management Consultancy Co., Ltd. at a 1,000,000 consideration of RMB1,000,000. The subsidiary was engaged in consulting business. RMB 000 Consideration received in cash 1,000 Net liabilities disposed of 1,203 Gain on disposal 2,203 The aggregated assets and liabilities in respect of the above disposal were as follows: RMB 000 Cash and cash equivalents 5 Property, plant and equipment 1,218 Trade and other receivables 735 Trade and other payables (3,161) Net liabilities disposed of (1,203) Cash received 1,000 Less: Cash and cash equivalents in the subsidiary disposed of (5) Net cash inflow from the disposal 995 F-188 Future Land Development Holdings Limited

304 For the year ended 31 December DISPOSAL OF SUBSIDIARIES AND BUSINESS (Cont d) (f) (f) Disposal of Shanghai Baolv Future Land Duoqimiao Business Management Consultancy Co., Ltd On 16 December 2016, the Group disposed of its 100% equity interests in Shanghai Baolv Future Land 100% Duoqimiao Business Management Consultancy Co., Ltd. 1,000,000 at a consideration of RMB1,000,000. The subsidiary was engaged in consulting business. RMB 000 Consideration received in cash 1,000 Net liabilities disposed of 2,224 Gain on disposal 3,224 The aggregated assets and liabilities in respect of the above disposal were as follows: RMB 000 Cash and cash equivalents 9 Property, plant and equipment 951 Trade and other receivables 1,074 Trade and other payables (4,258) Net liabilities disposed of (2,224) Cash received 1,000 Less: Cash and cash equivalents in the subsidiary disposed of (9) Net cash inflow from the disposal 991 Future Land Development Holdings Limited F-189

305 For the year ended 31 December STATEMENT OF FINANCIAL POSITION AND RESERVE MOVEMENTS OF THE COMPANY As at 31 December Note RMB 000 RMB 000 ASSETS Non-current assets Property, plant and equipment 2,394 2,927 Investments in subsidiaries 479, , , ,271 Current assets Trade and other receivables 4,548,821 6,454,820 Cash and cash equivalents 24, ,389 4,573,790 6,807,209 Total assets 5,056,007 7,286,480 OWNERS EQUITY Capital and reserves attributable to equity holders of the Company Share capital: nominal value 4,609 4,609 Reserves (a) 477, ,629 Total equity 482, ,238 Non-current liabilities Borrowings 2,393,051 3,818,709 Current liabilities Trade and other payables 463, ,158 Borrowings 1,716,560 2,860,375 Total liabilities 4,573,583 6,843,242 Total equity and liabilities 5,056,007 7,286, The balance sheet of the Company was approved by the Board of Directors on 24 February 2017 and was signed on its behalf by: Wang Zhenhua Director Chan Wai Kin Director F-190 Future Land Development Holdings Limited

306 For the year ended 31 December STATEMENT OF FINANCIAL POSITION AND RESERVE MOVEMENTS OF THE COMPANY (Cont d) (a) (a) Reserve movement of the Company Share premium Other reserves Accumulated losses Total RMB 000 RMB 000 RMB 000 RMB Balance at 1 January ,112, ,392 (781,203) 438,629 Comprehensive income Profit for the year 318, ,607 Other comprehensive income Total comprehensive income for the year 318, ,607 Transactions with owners Pre-IPO share award scheme value of current employee services 3,479 3,479 Dividends (282,900) (282,900) Total contributions by and distributions to owners (282,900) 3,479 (279,421) Balance at 31 December , ,871 (462,596) 477,815 Representing: Proposed final dividend 282, ,900 Others 546, , , , Balance at 1 January ,395, ,191 (353,210) 1,150,821 Comprehensive loss Loss for the year (427,993) (427,993) Other comprehensive loss Total comprehensive loss for the year (427,993) (427,993) Transactions with owners Pre-IPO share award scheme value of current employee services 8,104 8,104 Buy-back of shares (8,903) (8,903) Dividends (283,400) (283,400) Total contributions by and distributions to owners (283,400) (799) (284,199) Balance at 31 December ,112, ,392 (781,203) 438,629 Representing: Proposed final dividend 282, ,900 Others 829, ,729 1,112, ,629 Future Land Development Holdings Limited F-191

307 For the year ended 31 December PARTICULARS OF SUBSIDIARIES Particulars of the subsidiaries of the Group as at 31 December 2016 and 2015 are as follows: Percentage of attributable equity interest as at 31 December Company name Date of incorporation/ establishment Authorised or registered capital Issued and fully paid capital Principal activities RMB 000 RMB 000 Future Land Holdings Co., Ltd June ,708,065 1,708, % 68.26% Development and sale of properties Changzhou Future Land Real Estate Development Co., Ltd April ,100,000 1,100, % 65.39% Development and sale of properties Wealthzone Development Co., Ltd. (formerly: Changzhou Wealthzone Development Co., Ltd.) April , , % % Development and sale of properties Nanjing Future Land Chuangzhi Real Estate Co., Ltd September , , % 65.68% Development and sale of properties Shanghai Future Land Chuangzhi Real Estate Co., Ltd January ,000 10, % 65.68% Development and sale of properties Shanghai Future Land Wanjia Real Estate Co., Ltd March , , % 65.68% Development and sale of properties Changzhou Xinlong Chuangzhi Real Estate Development Co., Ltd September , , % 67.69% Development and sale of properties F-192 Future Land Development Holdings Limited

308 For the year ended 31 December PARTICULARS OF SUBSIDIARIES (Cont d) Percentage of attributable equity interest as at 31 December Company name Date of incorporation/ establishment Authorised or registered capital Issued and fully paid capital Principal activities RMB 000 RMB 000 Suzhou Future Land Wanjia Real Estate Co., Ltd September , , % 65.68% Development and sale of properties Changzhou Future Land Wan Jia Construction Design Co., Ltd May ,000 3, % 66.54% Construction design and consulting Changzhou Dingjia Property Real Estate Development Co., Ltd May ,000 10, % 65.76% Development and sale of properties Changzhou Future Land Dongjun Real Estate Development Co., Ltd December ,000 10, % 68.03% Development and sale of properties Kunshan Future Land Chuangzhi Development Co., Ltd April , , % 65.45% Development and sale of properties Changzhou Future Land Assets Operation and Management Co., Ltd October ,000 1, % 67.97% Asset operation and management Changzhou Future Land Zhidi Real Estate Development Co., Ltd December ,000 10, % 65.39% Development and sale of properties Changzhou Jia Chi Auto Parts Co., Ltd January ,000 15, % 65.39% Marketing research of properties Future Land Development Holdings Limited F-193

309 For the year ended 31 December PARTICULARS OF SUBSIDIARIES (Cont d) Percentage of attributable equity interest as at 31 December Company name Date of incorporation/ establishment Authorised or registered capital Issued and fully paid capital Principal activities RMB 000 RMB 000 Changzhou Wanfang Future Land Real Estate Development Co., Ltd February , , % 65.46% Development and sale of properties Changzhou Fu Long Real Estate Development Co., Ltd February , , % 68.26% Development and sale of properties Changzhou Future Land Wanbo Property Co., Ltd May , , % 68.26% Development and sale of properties Shanghai Dongjun Real Estate Development Co., Ltd May ,000 10, % 68.26% Development and sale of properties Wuxi Future Land Wanjia Property Co., Ltd August , , % 68.26% Development and sale of properties Suzhou Future Land Chuangjia Property Co., Ltd October ,200 20, % 68.26% Development and sale of properties Changzhou Wanjia Property Consultancy Co., Ltd January ,000 1, % 68.26% Consulting Future Land Wanbo Property Co., Ltd January , , % 68.26% Development and sale of properties F-194 Future Land Development Holdings Limited

310 For the year ended 31 December PARTICULARS OF SUBSIDIARIES (Cont d) Percentage of attributable equity interest as at 31 December Company name Date of incorporation/ establishment Authorised or registered capital Issued and fully paid capital Principal activities RMB 000 RMB 000 Shanghai Future Land Chuangjia Property Co., Ltd March , , % 65.68% Development and sale of properties Changzhou Future Land Dongsheng Real Estate Co., Ltd June ,000 10, % 68.03% Development and sale of properties Nanjing Future Land Chuangjia Real Estate Co., Ltd July ,000 18, % 65.68% Development and sale of properties Changzhou Future Land Jinjun Real Estate Co., Ltd September ,297, , % 65.68% Development and sale of properties Changzhou Hengfu Property Co., Ltd November ,000 20, % 65.39% Development and sale of properties Changzhou Future Land Wanjia Real Estate Co., Ltd December ,000 50, % 65.39% Development and sale of properties Changzhou Future Land Hongye Real Estate Co., Ltd December , , % 68.26% Development and sale of properties Nanjing Future Land Wanjia Real Estate Co., Ltd January , , % 65.68% Development and sale of properties Future Land Development Holdings Limited F-195

311 For the year ended 31 December PARTICULARS OF SUBSIDIARIES (Cont d) Percentage of attributable equity interest as at 31 December Company name Date of incorporation/ establishment Authorised or registered capital Issued and fully paid capital Principal activities RMB 000 RMB 000 Changzhou Future Land Chuangjia Real Estate Co., Ltd January , % 65.68% Development and sale of properties Shanghai Future Land Chuanghong Real Estate Co., Ltd January ,000 10, % 65.68% Development and sale of properties Changzhou Future Land Keda Investment Consultancy Co., Ltd February % 68.26% Consulting Changzhou Future Land Jingdian Architectural Design Co., Ltd February % 68.26% Development and sale of properties Shanghai Future Land Jinjun Real Estate Co., Ltd March , , % 65.68% Development and sale of properties Wuxi Future Land Chuangzhi Real Estate Co., Ltd May , , % 68.26% Development and sale of properties Changzhou Future Land Wansheng Real Estate Co., Ltd June , , % 68.26% Development and sale of properties (b) Hong Kong Prosperity Development Ltd. (b) August % % Investment company F-196 Future Land Development Holdings Limited

312 For the year ended 31 December PARTICULARS OF SUBSIDIARIES (Cont d) Percentage of attributable equity interest as at 31 December Company name Date of incorporation/ establishment Authorised or registered capital Issued and fully paid capital Principal activities RMB 000 RMB 000 (b) Hong Kong Achievement Development Limited (b) August % % Investment company Changzhou Future Land Injoy Commercial Management Co., Ltd November ,000 10, % 68.26% Development and sale of properties Shanghai Future Land Wansheng Property Co., Ltd November ,000 10, % % Development and sale of properties Nanjing Future Land Yunsheng Real Estate Co., Ltd November , , % 65.68% Development and sale of properties Wuxi Future Land Wanbo Property Co., Ltd January ,000 10, % 68.26% Development and sale of properties Jintan Future Land Wanjun Property Co., Ltd March ,000 10, % 66.83% Development and sale of properties Changsha Future Land Wanbo Property Co., Ltd March , , % 68.26% Development and sale of properties Shanghai Future Land Chuangyu Real Estate Co., Ltd May , , % 65.68% Development and sale of properties Future Land Development Holdings Limited F-197

313 For the year ended 31 December PARTICULARS OF SUBSIDIARIES (Cont d) Percentage of attributable equity interest as at 31 December Company name Date of incorporation/ establishment Authorised or registered capital Issued and fully paid capital Principal activities RMB 000 RMB 000 Kunshan Future Land Chuanghong Real Estate Co., Ltd June , , % 68.26% Development and sale of properties Kunshan Future Land Chuangyu Real Estate Co., Ltd June , , % 68.26% Development and sale of properties Changzhou Future Land Rui Yi International Co., Ltd September ,000 1, % 65.39% Property, hotel and conference management; apartment leasing services Changzhou Jiafeng Market Research Co., Ltd September ,000 5, % 65.39% Marketing research of properties Changzhou Injoy International Plaza Commercial Management Co., Ltd April ,000 5, % 68.26% Department store management Wuhan Future Land Hongsheng Property Co., Ltd May , , % 68.26% Development and sale of properties Shanghai Fuming Real Estate Development Co., Ltd September , , % 65.68% Development and sale of properties F-198 Future Land Development Holdings Limited

314 For the year ended 31 December PARTICULARS OF SUBSIDIARIES (Cont d) Percentage of attributable equity interest as at 31 December Company name Date of incorporation/ establishment Authorised or registered capital Issued and fully paid capital Principal activities RMB 000 RMB 000 Suzhou Future Land Chuangheng Real Estate Co., Ltd August , , % 68.26% Development and sale of properties Shanghai Qingpu Injoy Commercial Management Co., Ltd December ,000 5, % % Department store management ,000 20, % 65.68% Shanghai Future Land Baojun 16 January 2013 (2015: 360,000) (2015: 360,000) Development and sale of Property Co., Ltd. properties Changzhou Wansheng Property Management Co., Ltd January , , % 68.26% Department store management ,000 20, % 65.68% Nanjing Future Land Chuanglong 14 March 2013 (2015: 550,000) (2015: 550,000) Development and sale of Real Estate Co., Ltd. properties Changzhou Future Land Huisheng Development Co., Ltd May , , % 68.42% Development and sale of properties Changzhou Future Land Yuesheng Development Co., Ltd May , , % 68.42% Development and sale of properties Changzhou Future Land Zhuosheng Development Co., Ltd May , , % 68.42% Development and sale of properties Future Land Development Holdings Limited F-199

315 For the year ended 31 December PARTICULARS OF SUBSIDIARIES (Cont d) Percentage of attributable equity interest as at 31 December Company name Date of incorporation/ establishment Authorised or registered capital Issued and fully paid capital Principal activities RMB 000 RMB 000 (b) Heroic Time Global Limited (b) May % 68.58% Investment company Zhenjiang Kaisheng Development Co., Ltd June , , % 68.58% Development and sale of properties Suzhou Kaituo Development Co., Ltd June , , % 68.58% (c) Development and sale of properties , , % 58.67% Suzhou Bosheng 20 June 2013 (2015: 693,360) (2015: 710,015) Development and sale of Development Co., Ltd. properties (b) Exalt Creation Limited (b) June % 68.58% Investment company ,000 21, % 47.78% Suzhou Future Land Chuangsheng 1 July 2013 (2015: 30,000) (2015: 30,000) (Note 39(f)) Development and sale of Property Co., Ltd. properties (b) Hong Kong Flourishing Development Limited (b) July % 68.58% Investment company (b) Hong Kong Perpetual Development Limited (b) July % 68.58% Investment company (b) Hong Kong Chuanglong Development Limited (b) October % 68.58% Investment company F-200 Future Land Development Holdings Limited

316 For the year ended 31 December PARTICULARS OF SUBSIDIARIES (Cont d) Percentage of attributable equity interest as at 31 December Company name Date of incorporation/ establishment Authorised or registered capital Issued and fully paid capital Principal activities RMB 000 RMB 000 Suzhou Injoy Commercial Management Co., Ltd July ,000 5, % 68.26% Department store management Changzhou Derun Consultancy Co., Ltd August ,000 2, % % Consulting Changzhou Future Land Wande Investment Co., Ltd September , , % % Investment company (b) Flourish Source Holdings Limited (b) September % 68.58% Investment company , , % 68.26% Hangzhou Future Land Chuanghong 27 September 2013 (2015: 400,000) Development and sale of Real Estate Development Co., Ltd. properties Hangzhou Future Land Dinghong Real Estate Development Co., Ltd October , , % 68.26% Development and sale of properties Zhangjiagang Dingsheng Real Estate Co., Ltd October ,424 11, % 68.58% Development and sale of properties (b) Aceled Limited (b) November % 68.58% Investment company Future Land Development Holdings Limited F-201

317 For the year ended 31 December PARTICULARS OF SUBSIDIARIES (Cont d) Percentage of attributable equity interest as at 31 December Company name Date of incorporation/ establishment Authorised or registered capital Issued and fully paid capital Principal activities RMB 000 RMB 000 Danyang Future Land Hongsheng Real Estate Development Co., Ltd November , , % 68.58% Development and sale of properties Hangzhou Future Land Chuangsheng Real Estate Development Co., Ltd November , , % 68.26% Development and sale of properties Kunshan Future Land Wanlong Real Estate Development Co., Ltd December ,000 10, % 65.45% Development and sale of properties (b) Emerald Sea holdings Limited (b) November % % Investment company ,000 20, % 65.68% Shanghai Jiading Huarui 9 January 2014 (2015: 350,000) (2015: 350,000) Development and sale of Real Estate Co., Ltd. properties (b) Hong Kong Excellent Development Limited (b) January % 68.58% Investment company (b) Hong Kong Grand Development Limited (b) January % 68.58% Investment company (b) Hong Kong Exaltation Development Limited (b) January % % Investment company F-202 Future Land Development Holdings Limited

318 For the year ended 31 December PARTICULARS OF SUBSIDIARIES (Cont d) Percentage of attributable equity interest as at 31 December Company name Date of incorporation/ establishment Authorised or registered capital Issued and fully paid capital Principal activities RMB 000 RMB 000 Nantong Future Land Chuangzhi Real Estate Co., Ltd January , , % 52.54% Development and sale of properties Shanghai Future Land Songjun Real Estate Development Co., Ltd March , , % 65.68% Development and sale of properties (b) Dawn Castle Limited (b) May % % Investment company ,000 50, % 68.26% Qingdao Future Land Chuangzhi 15 May 2014 (2015: 10,000) (2015: 10,000) Development and sale of Real Estate Co., Ltd. properties (b) Dawnwave Holdings Limited (b) July % % Investment company (b) Dragon Boom Developments Limited (b) July % % Investment company (b) Dragon State Investments Limited (b) August % % Investment company (b) Brisk Sail Limited (b) August % % Investment company (b) Hong Kong Chuangyu Development Limited (b) August % % Investment company Future Land Development Holdings Limited F-203

319 For the year ended 31 December PARTICULARS OF SUBSIDIARIES (Cont d) Percentage of attributable equity interest as at 31 December Company name Date of incorporation/ establishment Authorised or registered capital Issued and fully paid capital Principal activities RMB 000 RMB 000 (b) Hong Kong Chuanghui Development Limited (b) August % % Investment company (b) Hong Kong Glorious Development Limited (b) August ,000 7, % 68.26% Investment company Shanghai Injoy Investment Management Co., Ltd August ,000 10, % 68.26% Investment company (a) Nanchang Future Land Yuesheng Real Estate Development Co., Ltd. (a) August ,164,129 1,164, % 54.86% Development and sale of properties (b) Afar Connect Limited (b) September % % Investment company (a) Wuhai Future Land Chuangzhi Real Estate Co., Ltd. (a) September ,000 10, % 68.26% Development and sale of properties (b) Acme Name Limited (b) September % % Investment company (b) Hong Kong Jingsheng Development Limited (b) September % % Investment company F-204 Future Land Development Holdings Limited

320 For the year ended 31 December PARTICULARS OF SUBSIDIARIES (Cont d) Percentage of attributable equity interest as at 31 December Company name Date of incorporation/ establishment Authorised or registered capital Issued and fully paid capital Principal activities RMB 000 RMB 000 (b) Hong Kong Kaisheng Development Limited (b) September % % Investment company (b) Hong Kong Injoy Development Limited (b) September ,000 16, % 68.26% Investment company (b) Alpha Oasis Limited (b) September % % Investment company (b) Hong Kong Hengxuan Development Limited (b) September ,036,711 1,036, % 76.20% Investment company Changzhou Chuangyu Consultancy Co., Ltd September , % % Consulting Changchun Future Land Yuesheng Real Estate Development Co., Ltd September , , % 68.58% Development and sale of properties Changzhou Xincheng Information Technology Co., Ltd September % % Information technology Future Land Development Holdings Limited F-205

321 For the year ended 31 December PARTICULARS OF SUBSIDIARIES (Cont d) Percentage of attributable equity interest as at 31 December Company name Date of incorporation/ establishment Authorised or registered capital Issued and fully paid capital Principal activities RMB 000 RMB 000 (b) Hong Kong Hengkang Development Limited (b) October % % Investment company (b) Hong Kong Chuangzhi Development Limited (b) October % % Investment company (b) Hong Kong Hengchang Development Limited (b) October % % Investment company (b) Hong Kong Hengyi Development Limited (b) October % 68.58% Investment company Changzhou Kaituo Consultancy Co., Ltd November , % % Consulting Changzhou Jingxu Consultancy Co., Ltd November , % % Consulting ,230 12, % % Changzhou Jinjunde 6 November 2014 (2015: ) Consulting Consultancy Co., Ltd. Danyang Future Land Injoy Commercial Management Co., Ltd November ,000 5, % 68.26% Department store management F-206 Future Land Development Holdings Limited

322 For the year ended 31 December PARTICULARS OF SUBSIDIARIES (Cont d) Percentage of attributable equity interest as at 31 December Company name Date of incorporation/ establishment Authorised or registered capital Issued and fully paid capital Principal activities RMB 000 RMB 000 Zhangjiagang Future Land Injoy Commercial Management Co., Ltd November ,000 5, % 68.26% Department store management Shanghai Chengbei Information Technology Co., Ltd November ,000 10, % % Information technology Anqing Future Land Yuesheng Development Co., Ltd December , , % 68.26% Development and sale of properties Future Land Commercial Management Co., Ltd December ,000 50, % 68.26% Department store management Changzhou Future Land Honghao Commercial Management Co., Ltd December ,000 20, % 68.26% Department store management (b) ATL Group Limited (b) March % % Investment company Changzhou Future Land Wanjia Investment Co., Ltd. (formerly: Changzhou Future Land Boyuan Property Co., Ltd.) December , % % Investment company (2015: Development and sale of properties) Jinan Tianhongyongye Real Estate Development Co., Ltd December , , % 68.26% Development and sale of properties Future Land Development Holdings Limited F-207

323 For the year ended 31 December PARTICULARS OF SUBSIDIARIES (Cont d) Percentage of attributable equity interest as at 31 December Company name Date of incorporation/ establishment Authorised or registered capital Issued and fully paid capital Principal activities RMB 000 RMB 000 Changzhou Hengxuan Consultancy Management Co., Ltd December , % % Consulting December 2014 Shanghai Future Land Duoqimiao Business Management Consultancy Co., Ltd. (formerly: Shanghai Haierbao Investment Management Co., Ltd.) 50,000 (2015: 10,000) 10, % % Consulting Shanghai Baojun Future Land 8 September 2015 Duoqimiao Business Management Consultancy Co., Ltd. 1,000 1, % % Consulting Shanghai Songfan Future Land 23 October 2015 Duoqimiao Business Management Consultancy Co., Ltd. 1,000 1,000 (2015: ) % % Consulting ,000 5, % % Changzhou Duoqimiao Business 31 July 2015 (2015: ) Consulting Management Consultancy Co., Ltd. F-208 Future Land Development Holdings Limited

324 For the year ended 31 December PARTICULARS OF SUBSIDIARIES (Cont d) Percentage of attributable equity interest as at 31 December Company name Date of incorporation/ establishment Authorised or registered capital Issued and fully paid capital Principal activities RMB 000 RMB 000 Yangzhou Future Land Duoqimiao Business Management Consultancy Co., Ltd August ,000 1, % % Consulting Changzhou Yuesheng Consultancy Management Co., Ltd May , % % Consulting Shanghai Chengju Information Technology Co., Ltd June ,000 5, % % Information technology 34 Jiangsu Yungui Internet Technology Co., Ltd (Note 34) March , , % % Information technology ,000 91, % % Shanghai Xingyi Cinema 16 January 2015 (2015: ) Cinema Management Management Co., Ltd ,000 50, % % Future Land Development 16 March 2015 (2015: ) Investment company Investment Co., Ltd. Haikou Future Land Wanbo Real Estate Development Co., Ltd January , , % 68.26% Development and sale of properties Future Land Development Holdings Limited F-209

325 For the year ended 31 December PARTICULARS OF SUBSIDIARIES (Cont d) Percentage of attributable equity interest as at 31 December Company name Date of incorporation/ establishment Authorised or registered capital Issued and fully paid capital Principal activities RMB 000 RMB 000 Nanjing Future Land Wanshun Real Estate Co., Ltd January ,000 30, % 65.68% Development and sale of properties Shanghai Songrui Real Estate Development Co., Ltd February ,000 10, % 65.68% Development and sale of properties Nanchang Future Land Injoy Business Management Co., Ltd March ,000 5, % 68.26% Department store management ,000 20, % 65.68% Shanghai Future Land Chuangxian 1 April 2015 (2015: 245,000) (2015: 10,000) Development and sale of Real Estate Co., Ltd properties , , % 68.26% Jintan Future Land Wanbo 10 April 2015 (2015: 100,000) Development and sale of Real Estate Development Co., Ltd. properties Changzhou Future Land Jiarui Property Co., Ltd April , % 65.39% Development and sale of properties Anqing Future Land Injoy Business Management Co., Ltd April ,000 5, % 68.26% Department store management F-210 Future Land Development Holdings Limited

326 For the year ended 31 December PARTICULARS OF SUBSIDIARIES (Cont d) Percentage of attributable equity interest as at 31 December Company name Date of incorporation/ establishment Authorised or registered capital Issued and fully paid capital Principal activities RMB 000 RMB 000 Changchun Future Land Injoy Business Management Co., Ltd May ,000 10, % 68.26% Department store management (b) Ever Victory Ventures Limited (b) May % 68.26% Investment company (b) Premier Point Investments Limited (b) May % 68.26% Investment company (b) Ever Health Enterprises Limited (b) June % 68.26% Investment company ,000 5, % 68.26% Hangzhou Songming Real Estate 3 June 2015 (2015: ) Consulting Consultancy Co., Ltd ,000 5, % 68.26% Hangzhou Chuanglong Real Estate 3 June 2015 (2015: ) Consulting Consultancy Co., Ltd. Jintan Future Land Injoy Business Management Co., Ltd June ,000 10, % 68.26% Department store management (b) Hong Kong Xisheng Development Limited (b) June % 68.26% Investment company (b) Hong Kong Ruisheng Development Limited (b) June % 68.26% Investment company Future Land Development Holdings Limited F-211

327 For the year ended 31 December PARTICULARS OF SUBSIDIARIES (Cont d) Percentage of attributable equity interest as at 31 December Company name Date of incorporation/ establishment Authorised or registered capital Issued and fully paid capital Principal activities RMB 000 RMB 000 (b) Hong Kong Zesheng Development Limited (b) June % 68.26% Investment company Shanghai Jiamu Investment Management Co., Ltd June , , % 68.26% Consulting Hangzhou Future Land Dingjia Real Estate Development Co., Ltd June ,750 36, % (d) 40.96% (d) Development and sale of properties , , % 68.26% Hangzhou Songrui Industry Co., Ltd. 24 June 2015 (2015: ) Development and sale of properties Quzhou Future Land Wanbo Real Estate Development Co., Ltd August ,000 50, % 68.26% Development and sale of properties , , % 68.26% Ningbo Future Land Wanbo 3 August 2015 (2015: 100,000) (2015: 100,000) Development and sale of Real Estate Development Co., Ltd. properties Taizhou Huangyan Future Land Injoy Real Estate Development Co., Ltd June ,000 10, % 68.26% Department store management Chengdu Future Land Injoy Business Management Co., Ltd August ,000 10, % 68.26% Department store management F-212 Future Land Development Holdings Limited

328 For the year ended 31 December PARTICULARS OF SUBSIDIARIES (Cont d) Percentage of attributable equity interest as at 31 December Company name Date of incorporation/ establishment Authorised or registered capital Issued and fully paid capital Principal activities RMB 000 RMB 000 Haikou Future Land Injoy Business Management Co., Ltd August ,000 10, % 68.26% Department store management Tongxiang Future Land Injoy Business Management Co., Ltd September ,000 10, % 68.26% Department store management Ningbo Future Land Injoy Business Management Co., Ltd August ,000 10, % 68.26% Department store management , , % 68.26% Shengzhou Future Land Xisheng 29 August 2015 (2015: 623,081) Development and sale of Real Estate Development Co., Ltd. properties , , % 68.26% Zhenjiang Yuesheng Real Estate 11 September 2015 (2015: 305,989) Development and sale of Development Co., Ltd. properties , , % 68.58% Ningbo Kaituo Real Estate 22 September 2015 (2015: 141,000) Development and sale of Development Co., Ltd. properties , , % 68.58% Tongxiang Zhuosheng Real Estate 8 July 2015 (2015: 278,172) Development and sale of Development Co., Ltd. properties (a) ,000 30, % 65.68% Nanjing Future Land Chuanghui 23 December 2015 (2015: ) Development and sale of Real Estate Development Co., Ltd. (a) properties Future Land Development Holdings Limited F-213

329 For the year ended 31 December PARTICULARS OF SUBSIDIARIES (Cont d) Percentage of attributable equity interest as at 31 December Company name Date of incorporation/ establishment Authorised or registered capital Issued and fully paid capital Principal activities RMB 000 RMB ,000 50, % 68.26% Wuhan Xinruilongxiang 17 July 2009 (2015: 10,000) (2015: 10,000) Development and sale of Property Co., Ltd. properties Shanghai Chuangze Real Estate Development Co., Ltd August ,000 10, % 65.68% Development and sale of properties Shanghai Fuyu Commercial Operation Management Co., Ltd September ,000 10, % 65.68% Department store management Shanghai Longqing Real Estate Development Co., Ltd November ,000 10, % 65.68% Development and sale of properties Shanghai Hanmei Real Estate Development Co., Ltd November ,000 10, % 65.68% Development and sale of properties ,000 10, % 65.68% Shanghai Tuoyu Real Estate 3 December 2015 (2015: ) Development and sale of Development Co., Ltd. properties Changshu Future Land Chuanghong Real Estate Co., Ltd July , , % 68.26% Development and sale of properties ,000 20, % 68.26% Wuxi Xinheng Property Co., Ltd. 13 October 2011 (2015: 210,000) (2015: 210,000) Development and sale of properties F-214 Future Land Development Holdings Limited

330 For the year ended 31 December PARTICULARS OF SUBSIDIARIES (Cont d) Percentage of attributable equity interest as at 31 December Company name Date of incorporation/ establishment Authorised or registered capital Issued and fully paid capital Principal activities RMB 000 RMB ,000 50, % 68.26% Hangzhou Future Land Chuangjia 22 October 2015 (2015: 30,000) (2015: ) Development and sale of Real Estate Development Co., Ltd. properties Jinan Tianhongyongtian Real Estate Development Co., Ltd January , , % 68.26% Development and sale of properties Changzhou Jindongfang Huliyuan Co., Ltd November ,000 30, % (e) 45.78% (e) Care Service Jiangsu Jindongfang Yiyangyuan 3 March 2011 Property Co., Ltd. (Note 34) 500, , % (e) 45.78% (e) Development and sale of properties Changzhou Jindongfang Hospital Co., Ltd November ,000 30, % (e) 45.78% (e) Care Service Changzhou Jindongfang Pinzhi Life Service Co., Ltd July ,500 1, % (f) 30.52% (f) Pre-packaged food wholesale and retail Suzhou Beijia Real Estate Consultancy Co., Ltd August , % 68.26% Properties Consulting Suzhou Shengtian Real Estate Consultancy Co., Ltd August , % 68.26% Properties Consulting Future Land Development Holdings Limited F-215

331 For the year ended 31 December PARTICULARS OF SUBSIDIARIES (Cont d) Percentage of attributable equity interest as at 31 December Company name Date of incorporation/ establishment Authorised or registered capital Issued and fully paid capital Principal activities RMB 000 RMB 000 Hangzhou Dingrui Real Estate Consultancy Co., Ltd November , % 68.26% Properties Consulting Hangzhou Chuangyu Real Estate Consultancy Co., Ltd November , % 68.26% Properties Consulting Shanghai Jinming Investment Management Co., Ltd /12/ ,000 10, % % Consulting Shengzhou Future Land Injoy Business Management Co., Ltd /12/2015 1,000 1, % 68.26% Department store management Quzhou Future Land Injoy Business Management Co., Ltd /12/2015 1,000 1, % 68.26% Department store management Changzhou Huacheng Cost Consulting Co. Ltd /01/2016 1, % Cost Consulting Shenzhen Xinyuchuangjia Real Estate Development Co., Ltd /07/ , % Development and sale of properties Shanghai Yidong Business Incubator Co. Ltd /05/ , % Office space rental F-216 Future Land Development Holdings Limited

332 For the year ended 31 December PARTICULARS OF SUBSIDIARIES (Cont d) Percentage of attributable equity interest as at 31 December Company name Date of incorporation/ establishment Authorised or registered capital Issued and fully paid capital Principal activities RMB 000 RMB 000 Yiwu Future Land Injoy Business Management Co., Ltd /03/2016 1,000 1, % Department store management Zhenjiang Future Land Injoy Business Management Co., Ltd /01/2016 1,000 1, % Department store management Nanjing Future Land Injoy Business Management Co., Ltd /04/2016 1,000 1, % Department store management Jinjiang Future Land Injoy Development Co., Ltd /01/ , , % Department store management Rugao Injoy Real Estate Development Co., Ltd /04/ ,000 20, % Department store management Ruian Injoy Real Estate Development Co., Ltd /08/ ,000 20, % Department store management Kunming Future Land Injoy Real Estate Development Co., Ltd /10/ ,000 20, % Department store management Shanghai Yilin Real Estate Development Co., Ltd /05/ ,000 10, % Development and sale of properties Future Land Development Holdings Limited F-217

333 For the year ended 31 December PARTICULARS OF SUBSIDIARIES (Cont d) Percentage of attributable equity interest as at 31 December Company name Date of incorporation/ establishment Authorised or registered capital Issued and fully paid capital Principal activities RMB 000 RMB 000 Nanjing Huikai Real Estate Co., Ltd /12/ ,000 10, % Development and sale of properties (a) Hangzhou Future Land Dejia Real Estate Development Co., Ltd. (a) /02/ , % Development and sale of properties * Jinan Tianhongyongyi Real Estate Development Co., Ltd.* /06/ ,000 10, % Development and sale of properties Jinan Future Land Chuangzhi Real Estate Development Co., Ltd /04/ ,000 50, % Development and sale of properties 34 Nanjing Future Land Wanlong Real Estate Development Co., Ltd. (Note 34) /04/ , , % Development and sale of properties * Jiangsu Lanhua Investment Development Co., Ltd.* /05/ ,000 30, % Development and sale of properties.* Qingdao Lezhou Property Co., Ltd.* /12/ ,000 10, % Development and sale of properties * Qingdao Mingzhou Property Co., Ltd.* /12/ ,000 10, % Development and sale of properties F-218 Future Land Development Holdings Limited

334 For the year ended 31 December PARTICULARS OF SUBSIDIARIES (Cont d) Percentage of attributable equity interest as at 31 December Company name Date of incorporation/ establishment Authorised or registered capital Issued and fully paid capital Principal activities RMB 000 RMB 000 * Qingdao Linzhou Property Co., Ltd.* /12/ ,000 10, % Development and sale of properties * Qingdao Anzhou Property Co., Ltd.* /12/ ,000 10, % Development and sale of properties * Qingdao Lizhou Property Co., Ltd.* /09/ ,000 10, % Development and sale of properties * Wuhan Jiangnanyinxiang Property Co., Ltd.* /05/ ,000 20, % Development and sale of properties Beijing Future Land Chuangzhi Real Estate Development Co., Ltd /06/ ,000 20, % Development and sale of properties Guangzhou Future Land Dingjia Real Estate Co., Ltd /10/ ,000 10, % Development and sale of properties Future Land Holdings Residential Development Co., Ltd /03/ , % Development and sale of properties Future Land Development Holdings Limited F-219

335 For the year ended 31 December PARTICULARS OF SUBSIDIARIES (Cont d) Percentage of attributable equity interest as at 31 December Company name Date of incorporation/ establishment Authorised or registered capital Issued and fully paid capital Principal activities RMB 000 RMB 000 Danyang Wanbo Real Estate Development Co., Ltd /12/ ,800 10, % Development and sale of properties Zhangjiagang Wanbo Management Co., Ltd /11/ ,300 10, % Development and sale of properties Suzhou Longsheng Injoy Real Estate Development Co., Ltd /11/ ,400 10, % Development and sale of properties Ruian Qifan Tourism Development Co., Ltd /11/ ,100 41, % Tourism Linyi Future Land Injoy Property Co., Ltd /12/ ,000 20, % Development and sale of properties Pinghu Future Land Injoy Business Development Co., Ltd /12/ , , % Department store management Future Land Holdings Real Estate Development Co., Ltd /08/ , % Development and sale of properties Hefei Future Land Chuanghong Real Estate Co., Ltd /11/ ,000 10, % Development and sale of properties F-220 Future Land Development Holdings Limited

336 For the year ended 31 December PARTICULARS OF SUBSIDIARIES (Cont d) Percentage of attributable equity interest as at 31 December Company name Date of incorporation/ establishment Authorised or registered capital Issued and fully paid capital Principal activities RMB 000 RMB 000 Hangzhou Jinjun Real Estate Consultancy Co., Ltd /09/2016 5, % Consulting Hangzhou Nanjun Real Estate Consultancy Co., Ltd /09/2016 5, % Consulting Jiaxing Future Land Chuangsheng Real Estate Development Co., Ltd /10/ , % Development and sale of properties Qingdao Daming Real Estate Development Co., Ltd /11/ ,000 10, % Development and sale of properties Beijing Future Land Chuanghong Real Estate Development Co., Ltd /10/ , % Development and sale of properties Hebei Jinjun Real Estate Development Co., Ltd /11/ ,000 10, % Development and sale of properties Tianjin Future Land Wanjia Real Estate Development Co., Ltd /10/ , % Development and sale of properties Hangzhou Binhui Business Management Co., Ltd /12/ % Consulting Future Land Development Holdings Limited F-221

337 For the year ended 31 December PARTICULARS OF SUBSIDIARIES (Cont d) Percentage of attributable equity interest as at 31 December Company name Date of incorporation/ establishment Authorised or registered capital Issued and fully paid capital Principal activities RMB 000 RMB 000 (b) Future Land Development Capital (Hong Kong) Limited (b) /06/ % Investment company (b) Super City Global Limited (b) /04/2016 8, % Investment company Future Land US Capital Partners Limited (b) /09/ % Investment company (b) Harmonic Castle Limited (b) /06/ % Investment company (b) Excel Ray Limited (b) /06/ % Investment company (b) Harmonic Goal Limited (b) /06/ % Investment company (b) Hong Kong Chuangrong Development Limited (b) /07/ % Investment company (b) Hong Kong Dinghong Development Limited (b) /07/ % Investment company F-222 Future Land Development Holdings Limited

338 For the year ended 31 December PARTICULARS OF SUBSIDIARIES (Cont d) Percentage of attributable equity interest as at 31 December Company name Date of incorporation/ establishment Authorised or registered capital Issued and fully paid capital Principal activities RMB 000 RMB 000 (b) Hong Kong Hengpeng Development Limited (b) /07/ % Investment company Jinjiang Future Land Injoy Business Management Co., Ltd /07/2016 1,000 1, % Department store management Rugao Future Land Injoy Business Management Co., Ltd /08/2016 1,000 1, % Department store management Ruian Future Land Injoy Business Management Co., Ltd /11/2016 1,000 1, % Department store management Zhuji Future Land Injoy Business Management Co., Ltd /10/2016 1,000 1, % Department store management Qingdao Future Land Injoy Business Management Co., Ltd /12/2016 1,000 1, % Department store management Hefei Future Land Wanhong Real Estate Co., Ltd /12/ , % Development and sale of properties Wuhan Longyu Real Estate Consultancy Co., Ltd /01/ , % Development and sale of properties * % * In 2016, the Group acquired 100% equity interest in these entities. The directors consider these acquisition are asset acquisition in substance rather than business combination and therefore are accounted for as asset acquisition. Future Land Development Holdings Limited F-223

339 For the year ended 31 December PARTICULARS OF SUBSIDIARIES (Cont d) (a) (a) Certain equity interests in the subsidiaries of the Company were pledged for borrowings as at 31 December 2016 and 2015, respectively (Note 22). For details, please refer to the table below: As at 31 December Percentage of equity interests in Wuhan Future Land Chuangzhi Real Estate Co., Ltd. 100% Percentage of equity interests in Nanchang Future Land Yuesheng Real Estate Development Co., Ltd. 100% 100% Percentage of equity interests in Nanjing Future Land Chuanghui Real Estate Development Co., Ltd. 100% Percentage of equity interests in Hangzhou Future Land Dejia Real Estate Development Co., Ltd. 100% (b) (b) The Company has direct or indirect equity interests in these subsidiaries which have direct or indirect equity interests in the other subsidiaries. These subsidiaries were incorporated in Hong Kong, British Virgin Islands or the United States of America and all the other subsidiaries were established in mainland China. All the subsidiaries are limited liability companies. F-224 Future Land Development Holdings Limited

340 For the year ended 31 December (c) ,000, ,800, % 65% ,300, ,800, % 42 PARTICULARS OF SUBSIDIARIES (Cont d) (c) On 20 June 2013, the Group set up Suzhou Kaituo Development Co., Ltd. with the original registered capital of USD75,000,000. According to the cooperative development agreement, a third party investor injected the capital with amounts of USD129,800,000 thereafter. After the capital injection, the Group s share holding in Suzhou Kaituo Development Co., Ltd. dropped to 36.62% while the Group is entitled to 65% of the operating results. In June and November 2015, the Group reduced the capital of USD52,300,000 and the third party investor reduced the capital of USD129,800,000. After the capital reduction, the Group s direct share holding in Suzhou Kaituo Development Co., Ltd. increased to 100%. Before the reduction of the third party investors, the operation environment and structure of the project company require that all the major financial and operating policies are determined before third party investor is entered into. The project company may not deviate from its approved purpose and design in any material respect. At the same time, according to various legal documents, including the articles of association of the project company, investment agreements and other agreements with the third party investor, the Group retains the power to operate and manage the project company in the ordinary course of business and the dayto-day management of the project company. (d) 68.26% 60% 40.96% (d) Hangzhou Future Land Dinghong Real Estate Development Co., Ltd., the Company s 68.26% held subsidiary, holds 60% interests in this entity. Hence, the effective rate owned by the Group is 40.96%, but the Company has control over the entity. (e) 65.39% 70% 45.78% (e) Changzhou Future Land Jiarui Property Co., Ltd., the Company s 65.39% held subsidiary, holds 70% interests in these entities. Hence, the effective rate owned by the Group is 45.78%, but the Company has control over the entity. (f) 45.78% 66.67% 30.52% (f) Jiangsu Jindongfang Yiyangyuan Property Co., Ltd., the Company s 45.78% held subsidiary, holds 66.67% interests in this entity. Hence, the effective rate owned by the Group is 30.52%, but the Company has control over the entity. Future Land Development Holdings Limited F-225

341 For the year ended 31 December SUBSEQUENT EVENTS (a) (a) The Company issued the USD350,000,000, 5.00% senior notes due 2020 on 9 February % (b) % (b) On 17 February 2017, the Company announced that all the outstanding 2019 Notes will be redeemed in full on 20 March 2017 (the Redemption Date ) at a redemption price equal to % of the principal amount thereof, plus accrued and unpaid interest, if any, to the Redemption Date. The Company completed the redemption on 20 March (c) ,200,401 (c) 100,200,401 shares of the listed subsidiary, Future Land Holdings Co., Ltd., held by a subsidiary of the Company, Wealthzone Development Co., Ltd. were pledged to Shanghai Haitong Asset Management Co., Ltd. for borrowings on 26 January F-226 Future Land Development Holdings Limited