方大集团股份有限公司
CHINA FANGDA GROUP CO., LTD.
Interim Financial Report 2011
1
Balance Sheet
Prepared by: China Fangda Group Co., Ltd. June 30th 2011
in RMB yuan
Balance at the end of term Balance at the beginning of year
Items
Consolidated Parent company Consolidated Parent company
Current asset:
Monetary capital 442,490,831.45 34,284,968.42 506,295,863.70 30,547,718.91
Settlement provision
Outgoing call loan
Transactional financial assets
Notes receivable 1,550,000.00 16,491,007.92
Account receivable 492,830,911.53 6,195,719.35 396,673,564.76 7,917,726.90
Prepayment 34,525,862.83 250,000.00 20,266,020.05 366,736.00
Insurance receivable
Reinsurance receivable
Provisions of Reinsurance
contracts receivable
Interest receivable 1,138,888.88 51,300.00
Dividend receivable 26,936,500.00 43,936,500.00
Other account receivable 51,503,441.54 209,634,878.63 39,235,264.87 200,454,969.75
Repurchasing of financial assets
Inventories 248,191,919.72 280,285,486.41
Non-current asset due in 1 year
Other current asset
Total of current asset 1,272,231,855.95 277,302,066.40 1,259,298,507.71 283,223,651.56
Non-current assets
Disburse of consigned loans
Available-for-sale financial asset 4,312,000.00 4,312,000.00 4,347,000.00 4,347,000.00
Expired investment in possess
Long-term receivable
Long-term share equity
658,733,745.58 658,733,745.58
investment
Investment properties 274,539,465.81 265,380,365.81 271,226,332.73 262,602,432.73
Fixed assets 57,877,748.34 240,554,714.52 56,934,198.94
304,929,329.34
Construction in process 87,378.64 56,762,380.64 87,378.64
26,674,644.86
Engineering goods
Fixed asset disposal 1,442,705.89 586,285.67
Production physical assets
Gas & petrol
Intangible assets 112,597,828.53 10,143,092.40 114,530,578.15 10,323,163.72
R&D expense 905,133.30 1,182,970.28
Goodwill 8,197,817.29 8,197,817.29
Long-term amortizable expenses 2,860,664.65 3,062,071.65
Deferred income tax asset 31,457,030.17 15,029,610.93 31,412,500.20 15,161,997.10
Other non-current asset
Total of non-current assets 767,916,619.84 1,011,563,941.70 731,862,651.13 1,008,189,916.71
Total of assets 2,040,148,475.79 1,288,866,008.10 1,991,161,158.84 1,291,413,568.27
Current liabilities
Short-term loans 383,000,000.00 200,000,000.00 397,000,000.00 200,000,000.00
Loan from Central Bank
Deposit received and hold for
others
2
Call loan received
Trade off financial liabilities
Notes payable 41,652,568.77 60,226,018.65
Account payable 264,658,302.20 1,851,490.36 296,531,749.82 1,901,490.41
Prepayment received 90,207,461.25 693,045.60 48,308,874.47 715,925.50
Selling of repurchased financial
assets
Fees and commissions receivable
Employees’ wage payable 11,043,615.29 406,934.91 14,047,721.00 881,767.40
Tax payable 26,999,435.45 885,778.96 21,520,643.71 930,370.30
Interest payable 548,793.05 280,250.00 610,850.84 308,275.00
Dividend payable
Other account payable 48,298,812.20 61,967,412.59 25,384,587.91 70,841,835.18
Reinsurance fee payable
Insurance contract provision
Entrusted trading of securities
Entrusted selling of securities
Non-current liability due in 1
year
Other current liability
Total of current liability 866,408,988.21 266,084,912.42 863,630,446.40 275,579,663.79
Non-current liabilities
Long-term borrowings
Bond payable
Long-term payable
Special payable
Expectible liabilities 883,881.35 347,657.52
Deferred income tax liability 29,869,048.72 29,351,087.57 28,289,997.60 27,852,316.45
Other non-recurring liabilities 4,564,850.00 4,564,850.00
Total of non-current liabilities 35,317,780.07 29,351,087.57 33,202,505.12 27,852,316.45
Total of liability 901,726,768.28 295,435,999.99 896,832,951.52 303,431,980.24
Owners’ equity (or shareholders’
equity)
Capital paid in (or share capital) 756,909,905.00 756,909,905.00 504,606,604.00 504,606,604.00
Capital reserves 82,104,113.92 42,703,458.54 334,434,014.92 295,033,359.54
Less: Shares in stock
Special reserves
Surplus reserves 17,834,977.97 17,834,977.97 17,834,977.97 17,834,977.97
Common risk provision
Retained profit 199,209,840.44 175,981,666.60 153,115,142.18 170,506,646.52
Different of foreign currency
translation
Total of owner’s equity belong to
1,056,058,837.33 993,430,008.11 1,009,990,739.07 987,981,588.03
the parent company
Minor shareholders’ equity 82,362,870.18 84,337,468.25
Total of owners’ equity 1,138,421,707.51 993,430,008.11 1,094,328,207.32 987,981,588.03
Total of liabilities and owners’
2,040,148,475.79 1,288,866,008.10 1,991,161,158.84 1,291,413,568.27
equity
3
Income Statement
Prepared by: China Fangda Group Co., Ltd. Jan-Jun 2011 RMB
Yuan
Amount of the Current Term Amount of the Previous Term
Items Parent Parent
Consolidated Consolidated
company company
I. Total revenue 579,154,393.68 20,049,926.08 423,379,762.74 18,558,245.60
Incl. Business income 579,154,393.68 20,049,926.08 423,379,762.74 18,558,245.60
Interest income
Insurance fee earned
Fee and commission received
II. Total business cost 534,439,453.17 17,513,082.25 409,935,200.30 18,620,458.50
Incl. Business cost 460,275,267.38 5,151,318.51 339,167,650.59 4,777,841.15
Interest expense
Fee and commission paid
Insurance discharge payment
Net claim amount paid
Net insurance policy reserves
provided
Insurance policy dividend paid
Reinsurance expenses
Business tax and surcharge 8,780,225.31 1,197,342.53 7,268,385.20 736,359.67
Sales expense 14,037,722.42 251,166.98 12,733,055.35 604,810.28
Administrative expense 46,225,304.98 9,792,692.82 39,721,901.51 9,680,484.63
Financial expenses 8,807,786.28 1,922,691.95 10,189,597.13 3,061,119.80
Asset impairment loss -3,686,853.20 -802,130.54 854,610.52 -240,157.03
Plus: Gains from change of fair value “-
5,082,327.66 4,547,127.66 6,553,456.32 6,498,256.32
“ for loss)
Investment gain (“-“ for loss) 15,342.47 3,174,066.97
Incl. Investment gains from
affiliates
Gains from currency exchange (“-
“ for loss)
III. Operational profit (“-“ for loss) 49,812,610.64 7,083,971.49 23,172,085.73 6,436,043.42
Plus: Non business income 5,461,800.64 461,369.27 14,744,047.55 3,452,536.32
Less: Non-business expenses 589,873.95 430,763.39 1,130,612.42 400,960.00
Incl. Loss from disposal of
non-current assets
IV. Gross profit (“-“ for loss) 54,684,537.33 7,114,577.37 36,785,520.86 9,487,619.74
Less: Income tax expenses 10,564,437.14 1,639,557.29 6,486,285.83 3,551,087.99
V. Net profit (“-“ for net loss) 44,120,100.19 5,475,020.08 30,299,235.03 5,936,531.75
Net profit attributable to the owners
46,094,698.26 5,475,020.08 33,608,581.42 5,936,531.75
of parent company
Minor shareholders’ equity -1,974,598.07 -3,309,346.39
VI. Earnings per share:
(I) Basic earnings per share 0.061 0.049
(II) Diluted earnings per share 0.061 0.049
VII. Other misc. incomes -26,600.00 -26,600.00 -7,296,195.48 -325,200.55
VIII. Total of misc. incomes 44,093,500.19 5,448,420.08 23,003,039.55 5,611,331.20
Total of misc. incomes attributable to
46,068,098.26 5,448,420.08 26,312,385.94 5,611,331.20
the owners of the parent company
Total misc gains attributable to the
-1,974,598.07 -3,309,346.39
minor shareholders
4
Cash Flow Statement
Prepared by: China Fangda Group Co., Ltd. Jan-Jun 2011 RMB
Yuan
Amount of the Current Term Amount of the Previous Term
Items Parent Parent
Consolidated Consolidated
company company
I. Net cash flow from business operation
Cash received from sales of products and
572,717,719.70 20,736,668.55 392,653,009.60 16,630,116.26
providing of services
Net increase of customer deposits and
capital kept for brother company
Net increase of loans from central bank
Net increase of inter-bank loans from
other financial bodies
Cash received against original insurance
contract
Net cash received from reinsurance
business
Net increase of client deposit and
investment
Net increase of trade financial asset
disposal
Cash received as interest, processing fee,
and commission
Net increase of inter-bank fund received
Net increase of repurchasing business
Tax returned 2,196,998.64 239,302.17
Other cash received from business
34,846,329.66 1,088,056.36 39,549,834.46 5,304,349.62
operation
Sub-total of cash inflow from business
609,761,048.00 21,824,724.91 432,442,146.23 21,934,465.88
activities
Cash paid for purchasing of merchandise
483,715,194.88 5,182,338.56 346,365,488.62 6,267,741.94
and services
Net increase of client trade and advance
Net increase of savings in central bank
and brother company
Cash paid for original contract claim
Cash paid for interest, processing fee and
commission
Cash paid for policy dividend
Cash paid to staffs or paid for staffs 44,761,059.84 4,010,180.73 32,596,329.65 2,943,955.51
Taxes paid 30,109,619.02 1,967,285.81 34,980,004.22 2,108,963.92
Other cash paid for business activities 63,335,464.74 5,435,520.75 58,027,646.80 8,989,344.74
Sub-total of cash outflow from
621,921,338.48 16,595,325.85 471,969,469.29 20,310,006.11
business activities
Cash flow generated by business
-12,160,290.48 5,229,399.06 -39,527,323.06 1,624,459.77
operation, net
II. Cash flow generated by investing
Cash received from investment retrieving 854,089.54
Cash received as investment gains 15,342.47 17,000,000.00 3,176,516.97 31,615,965.05
5
Net cash retrieved from disposal of fixed
assets, intangible assets, and other long-term 9,372.00 8,040.00 2,372,184.95
assets
Net cash received from disposal of
subsidiaries or other operational units
Other investment-related cash received
Sub-total of cash inflow due to
24,714.47 17,008,040.00 6,402,791.46 31,615,965.05
investment activities
Cash paid for construction of fixed assets,
16,693,359.70 429,778.00 17,353,594.62 1,125,645.91
intangible assets and other long-term assets
Cash paid as investment
Net increase of loan against pledge
Net cash received from subsidiaries and
other operational units
Other cash paid for investment activities
Sub-total of cash outflow due to
16,693,359.70 429,778.00 17,353,594.62 1,125,645.91
investment activities
Net cash flow generated by
-16,668,645.23 16,578,262.00 -10,950,803.16 30,490,319.14
investment
III. Cash flow generated by financing
Cash received as investment 340,499,960.00 340,499,960.00
Incl. Cash received as investment from
minor shareholders
Cash received as loans 90,000,000.00 276,000,000.00 152,821,754.51
Cash received from bond placing
Other financing-related cash received 3,765.25
Subtotal of cash inflow from financing
90,000,000.00 616,503,725.25 493,321,714.51
activities
Cash to repay debts 104,000,000.00 12,847,054.29 266,000,000.00 210,000,000.00
Cash paid as dividend, profit, or interests 10,220,855.72 5,100,550.00 9,008,860.25 5,156,671.25
Incl. Dividend and profit paid by
subsidiaries to minor shareholders
Other cash paid for financing activities 111,983.72 111,983.72 2,978,629.66 2,978,629.66
Subtotal of cash outflow due to
114,332,839.44 18,059,588.01 277,987,489.91 218,135,300.91
financing activities
Net cash flow generated by
-24,332,839.44 -18,059,588.01 338,516,235.34 275,186,413.60
financing
IV. Influence of exchange rate alternation on
-7,826.45 -12,216.25 2.70
cash and cash equivalents
V. Net increase of cash and cash equivalents -53,169,601.60 3,748,073.05 288,025,892.87 307,301,195.21
Plus: Balance of cash and cash
468,878,715.15 30,252,759.44 210,823,550.83 42,024,488.50
equivalents at the beginning of term
VI. Balance of cash and cash equivalents at the
415,709,113.55 34,000,832.49 498,849,443.70 349,325,683.71
end of term
6
Consolidated Statement of Change in Owners’ Equity
Prepared by: China Fangda Group Co., Ltd. Interim 2011 RMB Yuan
Amount of the Current Term Amount of Last Year
Owners’ Equity Attributable to the Parent Company Owners’ Equity Attributable to the Parent Company
Capital Minor Total of Capital Minor Total of
Items Comm shareho owners Comm shareho owners
paid in Capital Less: Special Surplus paid in Capital Less: Special Surplus
on risk Retaine lders’ ’ on risk Retaine lders’ ’
(or reserve Shares reserve reserve Others (or reserve Shares reserve reserve Others
provisi d profit provisi d profit
share s in stock s s equity equity share s in stock s s equity equity
on on
capital) capital)
504,60 334,43 153,11 1,094,3 426,78 102,52 714,41
I. Balance at the end of last 17,834, 84,337, 80,622, 13,360, 91,114,
6,604.0 4,014.9 5,142.1 28,207. 6,359.0 6,565.0 0,289.6
year 977.97 468.25 488.67 180.84 696.12
0 2 8 32 0 6 9
Plus: Change of
accounting policy
Correcting of previous
errors
Others
504,60 334,43 153,11 1,094,3 426,78 102,52 714,41
II. Balance at the beginning 17,834, 84,337, 80,622, 13,360, 91,114,
6,604.0 4,014.9 5,142.1 28,207. 6,359.0 6,565.0 0,289.6
of current year 977.97 468.25 488.67 180.84 696.12
0 2 8 32 0 6 9
III. Changed in the current 252,30 -252,32 253,81 379,91
46,094, -1,974, 44,093, 77,820, 4,474,7 50,588, -6,777,
3,301.0 9,901.0 1,526.2 7,917.6
year (“-“ for decrease) 698.26 598.07 500.19 245.00 97.13 577.12 227.87
0 0 5 3
46,094, -1,974, 44,120, 55,063, -6,777, 48,286,
(I) Net profit
698.26 598.07 100.19 374.25 227.87 146.38
-26,600 -26,600 -4,955, -4,955,
(II) Other misc. income
.00 .00 100.48 100.48
-26,600 46,094, -1,974, 44,093, -4,955, 55,063, -6,777, 43,331,
Total of (I) and (II)
.00 698.26 598.07 500.19 100.48 374.25 227.87 045.90
(III) Investment or 288,64 336,58
47,945,
decreasing of capital by 1,671.7 6,871.7
200.00
owners 3 3
288,64 336,58
1. Capital inputted by 47,945,
1,671.7 6,871.7
owners 200.00
3 3
2. Amount of shares
paid and accounted as
owners’ equity
3. Others
7
4,474,7 -4,474,
(IV) Profit allotment
97.13 797.13
1. Providing of surplus 4,474,7 -4,474,
reserves 97.13 797.13
2. Common risk
provision
3. Allotment to the
owners (or shareholders)
4. Others
252,30 -252,30
(V) Internal transferring of 29,875, -29,875
3,301.0 3,301.0
owners’ equity 045.00 ,045.00
0 0
252,30 -252,30
1. Capitalizing of capital 29,875, -29,875
3,301.0 3,301.0
reserves (or to capital shares) 045.00 ,045.00
0 0
2. Capitalizing of
surplus reserves (or to capital
shares)
3. Making up losses by
surplus reserves
4. Others
(VI) Special reserves
1. Provided this year
2. Used this term
(VII) Others
756,90 199,20 1,138,4 504,60 334,43 153,11 1,094,3
IV. Balance at the end of this 82,104, 17,834, 82,362, 17,834, 84,337,
9,905.0 9,840.4 21,707. 6,604.0 4,014.9 5,142.1 28,207.
term 113.92 977.97 870.18 977.97 468.25
0 4 51 0 2 8 32
8
Change in Owners’ Equity (Parent Co.)
Prepared by: China Fangda Group Co., Ltd. Interim 2011 RMB Yuan
Amount of the Current Term Amount of Last Year
Capital Capital
Less: Common Total of Less: Common Total of
Items paid in Capital Special Surplus Retained paid in Capital Special Surplus Retained
Shares in risk owners’ Shares in risk owners’
(or share reserves reserves reserves profit (or share reserves reserves reserves profit
stock provision equity stock provision equity
capital) capital)
I. Balance at the end of last 504,606,6 295,033,3 17,834,97 170,506,6 987,981,5 426,786,3 35,682,21 13,360,18 130,233,4 606,062,2
year 04.00 59.54 7.97 46.52 88.03 59.00 3.36 0.84 72.40 25.60
Plus: Change of
accounting policy
Correcting of previous
errors
Others
II. Balance at the beginning 504,606,6 295,033,3 17,834,97 170,506,6 987,981,5 426,786,3 35,682,21 13,360,18 130,233,4 606,062,2
of current year 04.00 59.54 7.97 46.52 88.03 59.00 3.36 0.84 72.40 25.60
III. Changed in the current 252,303,3 -252,329, 5,475,020 5,448,420 77,820,24 259,351,1 4,474,797 40,273,17 381,919,3
year (“-“ for decrease) 01.00 901.00 .08 .08 5.00 46.18 .13 4.12 62.43
5,475,020 5,475,020 44,747,97 44,747,97
(I) Net profit
.08 .08 1.25 1.25
-26,600.0 -26,600.0 584,519.4 584,519.4
(II) Other misc. income
0 0 5 5
-26,600.0 5,475,020 5,448,420 584,519.4 44,747,97 45,332,49
Total of (I) and (II)
0 .08 .08 5 1.25 0.70
(III) Investment or
47,945,20 288,641,6 336,586,8
decreasing of capital by
0.00 71.73 71.73
owners
1. Capital inputted by 47,945,20 288,641,6 336,586,8
owners 0.00 71.73 71.73
2. Amount of shares
paid and accounted as
owners’ equity
3. Others
4,474,797 -4,474,79
(IV) Profit allotment
.13 7.13
1. Providing of surplus 4,474,797 -4,474,79
9
reserves .13 7.13
2. Common risk
provision
3. Allotment to the
owners (or shareholders)
4. Others
(V) Internal transferring of 252,303,3 -252,303, 29,875,04 -29,875,0
owners’ equity 01.00 301.00 5.00 45.00
1. Capitalizing of capital 252,303,3 -252,303, 29,875,04 -29,875,0
reserves (or to capital shares) 01.00 301.00 5.00 45.00
2. Capitalizing of
surplus reserves (or to capital
shares)
3. Making up losses by
surplus reserves
4. Others
(VI) Special reserves
1. Provided this year
2. Used this term
(VII) Others
IV. Balance at the end of this 756,909,9 42,703,45 17,834,97 175,981,6 993,430,0 504,606,6 295,033,3 17,834,97 170,506,6 987,981,5
term 05.00 8.54 7.97 66.60 08.11 04.00 59.54 7.97 46.52 88.03
10
China Fangda Group Co., Ltd.
Notes to Financial Statements
I n t e r i m 2 0 11
Prepared by: China Fangda Group Co., Ltd. I n R M B Yu a n
I. I. General Information
China Fangda Group Co., Ltd. (the “Company”, or the “Group”) was approved by the Government
of Shenzhen with Document 深府办函（1995）194 号, and was founded, on the basis of Shenzhen
Fangda Construction Material Co., Ltd., by way of share issuing in October 1995.
The Company issued foreign currency shares (B shares) and local currency shares (A shares) and
listed in November 1995 and April 1996 respectively in Shenzhen Stock Exchange. On June 12, 1997, as
approved by Shenzhen Bureau of Commerce with Document 深招商复[1997]0192 号, the Company
was re-registered to a sino-foreign joint venture. Registration routines were completed with Shenzhen
Commerce and Industry Administration on November 12, 1997. In October 1999, the Company started
to use the current name.
On May 11, 2011, as approved by Shenzhen Science, Technologies, Industry, Trading, and IT
Committee with document 深科工贸信资字[2011]0755 号, the registered capital of the Company was
increased from RMB504.606604 million to RMB756.909905 million. On May 13, 2011, the Company
was granted the “Certificate of Enterprise Invested by Citizens from Taiwan, Hong Kong, and Macao”
by the Government of Shenzhen titled 商外资资审 A 字〔2000〕0025 号, and the share capital was
increased to RMB756.909905 million.
The Company holds the business registration number of 440301501124785, and registered address
of Fangda Building, Kejinan Road 12, High-tech Zone, Shenzhen. Mr. Xiong Jianming is the legal
representative.
Our business include new-type building materials, composite materials, metal wares, metal frames,
environmental equipment and apparatus, fire fighting equipment, optical-mechanical-electrical
integrated products, polymer materials and their products, fine chemical products, mechanical equipment,
optical materials and devices, electronic displayer, audio-visual device, transport facilities (exclude
restricted items and produces under export certification, and their design, developing, installation,
construction, technical consulting, and training. Managing and leasing of properties under possession
(Fangda Building at Ke-Ji-Nan Road 12, and Fangda Town at Longzhu Road 4), parking services of
Fangda Building.
II. Main Accounting Policies, Estimations and Retrospecting of Previous
Accounting Errors
(1) Basis for the preparation of financial statements
11
Preparing of the financial statements was on the assumption of the Company’s perpetual operation,
according to the trades and events practically happened, complying with the Enterprise Accounting
Standard issued by the Department of Finance and relative application guidance. Accounting estimations
and assumptions are used in preparing the financial statements with compliance to the Enterprise
Accounting Standard, which will make influences on the assets, liabilities or contingent liabilities at the
financial statement date, as well as the income and expenses in the report term.
(2) Statement of compliance to the Enterprise Accounting Standard
The financial report and statements are prepared with compliance to the requirement of the
Enterprise Accounting Standard. They are reflecting the financial position at June 30, 2011, and business
performance and cash flow situation of Jan-Jun 2011 of the Company frankly and completely.
(3) Fiscal period
The fiscal year of the Group is the solar calendar year, that is from January 1 to December 31.
(4) Standard currency for bookkeeping
The Company takes RMB as the standard currency for bookkeeping.
(5) Accounding treatment of the entities under common control and different control as well
1. Consolidation of entities under common control
Assets and liabilities obtained by the merging party are calculated at their book value with the
merged parties at the merger day. The differences between the book value of net assets and the book
value of consideration price (or the total of face value of share issued) are adjusted to the share capital
premium under the capital reserves. If the share capital premium is not enough to neutralize the
difference, it will be adjusted to the retained gains.
2. Consolidation of entities under different control
For merger of entities under different control, the merger cost is the fair value of the asset paid,
liability undertaken, and equity securities issued for exchanging of control power over the entities at the
day of acquisition.
When a merger of entity under different control is undertaken through multiple trades, accounting
treatments will be carried out separately on individual and consolidated financial statements as the
followings:
(1) In the individual financial statements, the initial investment cost of the particular project will be
the sum of book value of equity in the entity before the date of acquisition and the newly added
investment cost; When the share equity before the date of acquisition involves with other integrated
gains, such gains (such as the part of fair value of the sellable financial assets accounted into capital
reserves, same for the followings) are transferred into current investment income account.
(2) In the consolidated financial statements, the share equity in the acquired entity before the date of
acquisition is recalculated upon the fair value of the equity at the date of acquisition. The balance
between the fair value and book value shall be accounted into current investment income account; When
12
the share equity before the date of acquisition involves with other integrated gains, such gains are
transferred into investment income account of the period when it occurred.
Agency expenses and other administrative expenses such as auditing, legal consulting, or appraisal
services occurred relating to the merger of entities are accounted into current income account when
occurred; the transaction fees of equity certificates or liability certificates issued by the purchaser for
payment for the acquisition are accounted at the initial amount of the certificates.
For merger of enterprises under common control, the merger cost is the fair value of capital paid,
liability occurred or undertaken, or equity instrument issued thereof, on the day of purchasing to obtain
power of control over the bought party, and those expenses directly related to the merger. For merger
done through multiple trades, the overall cost is the sum of cost of each single trade. If the merger
contract provided faith on future events that may influence the merger cost, and the event has great
possibility to happen, and its influence may be reliably measured, then it will be accounted into merger
cost.
(6) Preparation of Consolidated Financial Statements
Consolidation range is determined on the basis of control power for the consolidated financial
statements.
The Financial Statements of the Company are prepared according to “Enterprise Accounting
Standard No.33 – Consolidated Financial Statements” and relative rules. All major trades and
interchanges within the consolidation range have been neutralized. The part of shareholders’ equities not
attributable to the parent company are presented individually as minority shareholders’ equity in the
consolidated financial statements.
When the accounting policies and periods of the subsidiaries are not complying with those of the
Company’s, they shall be adjusted according to the Company’s accounting policy and accounting period.
Subsidiaries added as merger of enterprises under different control, the individual statement shall be
adjusted basing on the recognizable net asset fair value at the day of purchasing; subsidiaries added as
merger of enterprise under common control, it will be regarded as existing since the contol power is
acquired, the initial figures of the consolidated balance sheet will be adjusted as well as the related items.
(7) Recognition of cash and cash equivalents
Cash equivalent in cash flow statement refers to the investments with short term, strong liquidity
and small risk of value fluctuation that are held by the Company and easily converted into cash with
known amount.
(8) Foreign currencies
Trades of the Company made in foreign currencies are translated into RMB basing on the middle
rate announced by China Foreign Currency Trading Center which is authorized by People’s Bank of
China at the date when the trade is conducted. At the balance sheet date, foreign currency items are
translated on the middle rate announced by China Foreign Currency Trading Center, the translation
differences, except for those constructed or produced and can be capitalized directly into relative capital
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costs, are accounted into current gain/loss account. Non-monetary items accounted in foreign currency
and on historical costs, are still use the middle rate announced by China Foreign Currency Trading
Center, and the amount in standard currency will not be changed.
(9) Financial instrument
1. Classification, recognition and measuring basis of financial instruments
Financial assets are categorized as: financial assets measured at fair value with
variations accounted into current income account, account receivable (see Note II (X) for
details), and disposable financial assets. Categorizing of financial assets are decided by the
intention and capability of holding of the financial assets by the Company or its
subsidiaries.
The Company has financial liabilities including: financial liabilities and other financial liabilities
accounted into current gain/loss account at fair value.
(1) Financial assets measured at fair value with variations accounted into current income
account
Including transactional financial assets and financial assets directly measured by fair value and with
variations accounted into current gain/loss account, which are initially recognized at the fair value when
obtained, the related transaction expenses are accounted into current income account when occurred. Cash
dividend and bond interests included in the prices paid which are announced but not distributed are
recognized as receivable items individually. Interests or cash dividends received during the period
of holding the particular financial assets are recognized as investment gains when received.
At the balance sheet day, the fair values of such financial assets are accounted into current
income account. At disposal of such financial assets, the differences between the fair value
and initial booked value are recognized as investment gains, and the fair value fluctuation
gain/loss will be adjusted accordingly.
(2) Sellable financial asset
Sellable financial asset refers to those sellable non-derivate financial assets recognized initially,
namely the Company does not elicit financial assets accounted by fair value with variations accounted
into current income account, investment hold to expiration, loans, and receivables.
Sellable financial assets are initialised at the sum of fair value and related transaction costs when
obtained. Due bond interests or cash dividend included in the payment that are announced but not
distributed are recognized as receivables individually. Interests or cash dividends received during the
period of holding the sellable financial assets are recognized as investment gains when received. At the
balance sheet date, sellable financial assets are measured on fair values, and the variations of fair values
are accounted into “Capital reserves – other capital reserves”.
At disposal of sellable financial assets, the difference between the amount received and the book
value of the financial asset will be accounted into “investment gains”, meanwhile, the amount of
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accumulative change of fair value originally accounted into owners’ equity corresponding to the
disposed part will be transferred over to “investment gains”.
(3) Financial liabilities measured at fair value with variations accounted into current
income account
Including transactional financial liabilities and financial liabilities directly measured by fair value
and with variations accounted into current gain/loss account, including: 1) Financial liabilities
undertaken to be repurchased in short future; 2) Those directly assigned as financial liabilities directly
measured by fair value and with variations accounted into current gain/loss account in view of risk
management or strategic investment needs; 3) Derivate instruments not used as hedging instruments.
Such financial liabilities are evaluated at fair value, and the transaction expenses could happen in
future clearance are not deducted. If fair value is not suitable, evaluation will be on balance of cost after
amortizing.
(4) Other financial liabilities
Other financial liabilities are those other than financial liabilities measured by fair value and
changes recorded into current gain/loss account, which mainly include account payable and long-term
payable accounts generated by purchasing of goods. Other financial liabilities are initially recognized by
their fair value plus relative trade expenses. Subsequent measurement is on amortized costs.
For other financial liabilities which are not at fair value through profit or loss, for example financial
guaranteed contracts, they are initially recognized at fair value plus any directly attributable transaction
costs. After the initial recognition, the other financial liabilities are measured at the higher of the
followings:
1. The amount measured in accordance with “Accounting Standards for Business Enterprises No.13
– Contingency”
2. The amortized balance measured in accordance with “Accounting Standards for Business
Enterprises No.14 – Revenue”
2. Basis of recognition and accounting of financial asset transferring
Transferring of financial assets by the Company is including the following two cases:
(1) Transfer the rights of collecting the cash flow attached to the financial asset to another party;
(2) Transfer the financial asset to another party, but reserve the rights to collect cash flow related to
such financial asset, and is responsible to pass the cash flow over to the final beneficiary, and satisfying
all of the following conditions:
A. Only when equal cash flow was received upon the financial asset, the party is obligated to give it
to the final beneficiary party. When an enterprise is making payment on other’s behalf for a short term,
and will be retrieved in full along with interest at fair market rate, shall be deemed as satisfying this
condition.
B. As bounded by the contract, the financial asset is not able to be disposed or use as guarantee,
however it can be used as guarantee for cash flow of final payment.
C. The party is obligated to duly forward the cash flow to the final beneficiary party. However
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except for the cash or cash equivalent the enterprise is not entitled to reinvest, but received between the
two payments as setout by the contract. When the party is reinvesting the cash according to the contract,
the gains shall be passed to the final beneficiary party according to the contract.
Recognition of the financial asset is terminated as soon as all of the risks and rewards attached to
the financial asset has been transferred to the receiver. Whereas if all of the risks and rewards attached to
the financial assets are reserved, recognition of the financial asset shall not be terminated.
When non of the transferring or reserving of the all risks and rewards attached to the financial asset
happened, it will be handled as:
(1) When the controlling power over the financial asset is given up, it will be terminated.
(2) When the controlling power is not given up, financial asset and related liability shall be
recognized according to the extend the Company is involving in the financial asset.
3. Termination of recognition of financial liabilities
As soon as partial or all of the current responsibilities attached to such financial liabilities,
recognition of partial or all of the financial liabilities will be terminated. When recognition of financial
liabilities are partially or wholly terminated, the balance between the book value and the price paid
(including non-monetary asset transferred out or new financial liabilities undertaken) shall be accounted
into current income account.
4. Recognition of financial instrument fair values
When there is an active market for the financial instrument, the value quoted at the active market is
adopted by the Company as the fair value. When there isn’t any active market, fair value will be
recognized by evaluation techniques. Evaluation techniques include referencing to the prices adopted in
latest voluntary transaction between parties with full understanding of the situation, referencing to the
current fair value of other substantially similar financial instruments, discounted cash flow analysis. At
using of evaluation techniques, market indices will be used to the greatest extent, while particular indices
of the Company and the subsidiaries to the least.
5. Impairment testing on financial assets, providing of impairment provision
At balance sheet date, the Company performs testing on the book value of financial assets other
than those measured by fair value and changes accounted into current income account.
When objective evidence showing that an investment hold to expiration has impaired, the
impairment amount shall be accounted according to the balance between the book value and the current
value of expectable future cash flow; if evidence showing that the impaired amount has restored, the
original impaired amount can be restored to current income account, however the amount to be restored
shall not greater than the amortized cost of the financial assets with assumption of no impairment
reserves have been provided at the date of restoring.
As for sellable financial assets, if the fair value decreased significantly, and it was predicted not
temporary, then impairment loss will be accounted at the difference between the balance of initial cost
less retrieved principle less amortized amount and current fair value. The accumulative losses formed by
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decreasing of fair value originally accounted into the owner’s equity are transferred out along with
providing of impairment losses, and accounted into “asset impairment loss”.
(10) Account receivable
Accounts receivable (including account receivable and other account receivable) are initially
accounted according to the contract amount or agreement amount. Accounts receivable that are
unrecoverable due to bankruptcy of the debtor (still unrecoverable through insolvency procedures); death
of the debtor, and no inheritance or heir of liabilities available; or failure of clearing overdue liabilities
by the debtor, will be accounted as bad debt losses through legal verification procedures.
When the Company retrieves the receivables, the differences between the amount retrieved and
book value of the receivable shall be accounted into current gain/loss account.
1. Recognition and providing of bad debt provision on individual receivable account
with large amount
The Company divides receivable accounts into project receivables and product receivables. Project
receivables are those recognized at percentage according to the construction contract, product
receivables are those formed in other ways. For the current year, the Company recognizes project
receivables over RMB8 million (included) as “individual receivable with large amount” while
recognizes product receivables over RMB2 million (included) as “individual receivable with large
amount” and other receivables over RMB1 million (included) as “individual receivable with large
amount”. On balance sheet day, the Company performs impairment examination individually on each
large amount receivables, and recognizes impairment and provides bad debt provision when the
impairment is recognized; those not impaired are accounted along with the minor amount receivables
and recognized in risk groups.
2. Recognition and providing of bad debt provisions on groups
Receivable accounts are divided into two groups, which are receivable accounts not consolidated and
receivable accounts consolidated. Receivable accounts consolidated are provided for bad debt provisions
on basis of individual recognition; while receivable accounts not consolidated are provided fro bad debt
provisions on basis of age analyzing as the following:
Age Providing rate (%)
Within 1 yr, (included) 3.00
1-2 yrs 10.00
2-3 yrs 30.00
Over 3 yrs 50.00
3. Account receivable with minor individual amount but provided of bad debt
provisions
Receivable accounts attributed as project accounts with individual amount under RMB8 million and
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those attributable as products with individual amount under RMB2 million are categorized to “account
receivable with minor individual amount”; while other receivable accounts with individual amount under
RMB1 million are categorized as “other receivable accounts with minor individual amount”.
Individual impairment tests are performed individually on receivable accounts aged over 5 years.
Full impairment provision will be provided when there is no substantial evidence showing that it could
be retrieved.
(11) Inventories
1. Categorizing of inventories
Inventories are those under the Company’s possession for the purpose of selling, in the process of
production, or materials and goods used in production process or providing of services, including
materials purchased, raw materials, low-value consumables, OEM materials, products in process,
semi-finished goods, finished goods, agency goods, and construction in process.
2. Pricing of delivering inventory
Inventories are measured at cost when procured, including purchase cost, processing cost, and other
costs. Actual costs are recognized at weight average when delivered. Transferring of construction
materials are recognized individually.
3. Recognition of inventory realizable value and providing of impairment provision
On the balance sheet date, inventories are accounted depending on which is lower between the cost
and the net realisable value. At overall verification of inventories at the end of year, when the net
realisable value is lower than the cost, provisions for impairment of inventories shall be drawn.
Provisions for impairment of inventories shall be accounted according to the difference between the cost
of individual inventory items and the net realisable value. Including: for inventories such as finished
products or materials which will be directly sold, in the normal operation, the realizable net value will be
the balance of estimated selling price less sales expenses and relative taxations; For those inventories
need further processing, in the normal operation, the realizable net value will be the balance of estimated
sales price less costs to make it finished, less estimated sales expenses, and less relative taxation. At the
balance sheet day, inventories with contract prices will be determined for realizable value separately
from those without contract prices.
4. Inventory system
The Company uses perpetual inventory system. Inventories are checked periodicly and the gains
and losses from inventory checking are accounted into current gain/loss account.
5. Amortizing of low-value consumables and packaging materials
Low-value consumables are amortized on on-off amortization basis at using. Other materials are
amortized at 50-50 basis.
(12) Long-term share equity investment
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Long-term share equity investment of the Company includes the investment in subsidiaries,
affiliates, and other long-term equities.
1. Recognition of initial investment costs
Investment of the Company in subsidiaries are valued at investment costs. For long-term share
equity investment formed by shareholding and merger please see Note II(V). Retrospective or retrieved
investment are adjusted to the cost of long term equity investment.
For long-term equity investment of the Company with or without common control or major
influence on the investee, and there is no quotation in an active market, and the fair value is not reliably
measured, values are on initial investment costs.
2. Subsequent measurement and recognition of gain/loss
The Company uses cost basis in subsequent measurement of investment in subsidiaries, and
adjusted on equity basis when preparing the consolidated financial statement. Except for the announced
cash dividend or profit included in the practical cost or price when the investment was made, the
investment gains are recognized at the announced cash dividend or profit distribution.
Subsequent measurement of long-term equity investment in investees under common control or
significant influence is on equity basis. When the initial investment cost is larger than the share of fair
value of net asset, the initial cost of long-term equity investment shall not be adjusted. When the initial
investment cost is lower than the share of fair value of net asset, the balance share be accounted into
current gain/loss, and the long-term investment cost shall be adjusted meanwhile. After obtaining of
the long-term equity investment, the investment gain/loss is recognized according to the share of the net
gain/loss realized by the invested company, and the book value of the long-term equity investment shall
be adjusted accordingly. The share of profit distributions or cash dividends announced by the invested
company is used to reduce the book value of the long-term equity investment.
If the Company has no common control or significant influence on the investee, and there is no
quotation in an active market, the fair value of the long-term investment is not able to be reliably
measured, the subsequent measurement shall on cost basis.
3. Basis of recognizing common control and significant influence
Common control is the mutual control of investors over an economic action basing on a contract,
only effective when it is agreed by all of the investors who have the share of control on the financial and
business control power. When the investors hold common control over the investee, the investee is
regarded as their affiliate. Significant influences mean an entity has the power to participate in the
decision making of another, but cannot dominate individually or jointly with other parties. When the
investor may significantly influence the investee, the investee is regarded as the affiliate.
4. Impairment examination and providing of impairment provision
At the balance sheet day, if evidence showing that impairment occurred on the long-term equity
investment, the recoverable amount shall be decided by the higher one of net amount of fair value less
disposal fees and the current value of predicted future cash flow. When the recoverable amount of the
long-term equity investment is lower than the book value, the book value will be reduced down to the
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recoverable amount, the reduced amount is recognized as asset impairment loss and counted into current
gain/loss account, asset impairment provision shall be provided accordingly. Once the long-term equity
investment impairment loss is recognized, it will not be written back in following fiscal terms.
(13) Investment properties
Investment real estates are buildings rented out.
Investment real estate is measured according to the initial cost. Cost of real estate purchased from
outside includes purchasing price, tax, and other expenses directly related to the real estate; cost of real
estate constructed by the Company itself is constructed by the essential costs to make the real estate
usable.
Accounting of investment real estates of the Company is on fair value basis when the following
conditions are satisfied:
(1) There is an active real estate market where the investment real estate is located;
(2) Market price and other related information of similar real estates may be acquired from the
market and used to make reasonable estimation on the fair value of the investment real estate.
At the balance sheet date, the Company uses fair value to measure the investment properties, no
depreciation or amortizing is made on the investment properties, book value is adjusted on the base of
fair value of the property at balance sheet date, and the differences between the fair value and the
original book value are counted into current gain/loss account.
At disposal of investment properties, or retrieve from the property permanently and no further
financial benefit is expected to obtain from the property, recognition of the investment property will be
terminated. Balance of income from disposal, transferring, discarding, or clearing of investment
properties less the book value and related taxes is counted into current gain/loss account.
(14) Fixed assets
1. Conditions for fixed asset recognition
Fixed assets is defined as the tangible assets which are held for the purpose of producing goods,
providing services, lease or for operation & management, and have more than one year of service life.
2. Depreciation of fixed assets
Other than fixed assets which have already been provided depreciations in full but still in use, the
Company provides depreciations upon all of the fixed assets. Straight age average basis is adopted in
depreciation.
According to the property and usage of the fixed assets, the Company decides the service life and
predicted net retained value. At end of each fiscal year, verification will be made on the useful life,
predicted retained value, and depreciation basis, adjustment will be made if difference occurred to the
original estimations.
Categories, useful life, predicted net retained value, and annual depreciation rate of fixed assets are
as the followings:
Annual depreciation
Categories Depreciation age (year) Residue rate (%)
rate (%)
Houses & buildings 35-45 10 2-2.57
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Annual depreciation
Categories Depreciation age (year) Residue rate (%)
rate (%)
Equipment & machinery 10 10 9
Transportation facilities 5 10 18
Electronics and other
5 10 18
devices
3. Impairment testing and impairment provisions
At the balance sheet day, fixed assets are accounted at the lower one of book value and retrievable
value. If the retrievable value is lower than the book value, the book value will be deducted to the
retrievable value, and the deducted amount will be recorded as asset impairment loss into current income
account, and impairment provision shall be provided accordingly. Once the impairment loss was
recognized, it will not be written back in coming fiscal terms.
4. Other statements
Fixed assets are initially measured at costs. Among them, cost of fixed assets purchased from
outside include purchasing price, tariffs and other taxes, and other expenditures directly related to the
asset before it reaches the useful status. Cost of self-build fixed assets is the necessary costs before it is
made useful. Fixed assets invested by investors are booked at the value according to the investment
contract, whereas when the contract value is not fairly acceptable, it will be booked at the fair value.
When a payment for purchasing of fixed asset is overdue and practically forms financing activity, the
fixed asset is recognized at the current value of purchasing price. The difference between the price paid
and current value, except for those must be capitalized, shall be accounted into current income account
of the credit period.
When fixed asset is disposed, or made no financial benefit by using or disposing it, recognition is
terminated. Income from disposal, transferring, discarding of fixed assets, less its book value and taxes,
is accounted into current income account.
(15) Construction in process
For construction in process conducted by the Company itself, its actual cost consists of
essential costs of carrying on the construction till it reaches usable status. Constructions in
process of the Company are divided to workshop construction and equipment installation
projects.
Cost of fixed asset which has already become usable but not settled yet, is recognized according to
estimated value, and depreciations share be provided. Upon completion of settlement, the original
estimated value shall be adjusted according to the actual cost, but the depreciations made previously
shall not be adjusted.
At the balance sheet day, construction in process are accounted at the lower one of book value and
retrievable value. If the retrievable value is lower than the book value, the book value will be deducted to
the retrievable value, and the deducted amount will be recorded as asset impairment loss into current
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income account, and impairment provision shall be provided accordingly. Once the impairment loss was
recognized, it will not be written back in coming fiscal terms.
(16) Borrowing expenses
Borrowing expenses occurred to the Company that can be accounted as purchasing or production of
asset satisfying the conditions of capitalizing, are capitalized and accounted as cost of related asset.
Other borrowing expenses are recognized as expenses according to the occurred amount, and accounted
into gain/loss of current term. Assets satisfying the conditions of capitalization are referring to the fixed
assets, investment properties, and inventories that need a long-term construction or production process to
reach the usable or sellable status.
Borrowing expenses start to be capitalized when all of the followings are satisfied: (1) Asset
expense has already occurred. Asset expenses include cash payment, non-cash asset transferring, or
undertaking of debt with interest done for purchasing or producing of assets. (2) The borrowing
expense has already occurred. (3) Purchasing or production activity, which is necessary for the asset
to reach the useful status, has already started.
In the period of capitalization, the capitalized amount of each fiscal period, if it is a special
borrowing for construction or production of asset satisfying the capitalizing conditions, is the interest
expenses actually occurred less the interest income from the unused part of borrowings or from
temporary investment. If it used a common borrowing for construction or production of asset satisfying
the capitalizing conditions, the capitalized interest amount will be decided by the weighted average of
accumulative asset expenses over the capital expenses of the special borrowing multiply the capitalizing
ratio of common borrowing. Capitalizing amount of the interests shall not more than the actual amount
of interest actually occurred to the current relative borrowing.
If the construction or production of assets satisfying the capitalizing conditions is suspended
abnormally for over 3 months, capitalizing of borrowing expenses shall be suspended. Borrowing
expenses occurred in the suspension period are recognized as expenses and recorded to current income
account, until the construction or production is resumed. If the suspension is an essential process to make
the asset usable or sellable, capitalizing of borrowing expenses shall be carried forward.
When the asset satisfying the capitalizing conditions has reached its usable or sellable status,
capitalizing of borrowing expenses shall be terminated.
(17) Intangible assets and development expenses
Intangible assets are those recognizable non-monetary assets without physical shape under the
Company’s possess or control, including land using rights, patent, industry property, special technologies,
and software.
Intangible assets are initially measured by their costs. Intangible assets purchased are booked at the
actual cost to purchase and relative expenses. Intangible assets inputted by investors are booked at the
contract or agreement price, but if the contract or agreement price is not fairly acceptable, it will be booked
at fair value.
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The Company analyses and determine the usable life when intangible assets are obtained, and are
classified into intangible assets with limited useful life, and uncertain useful life.
Intangible assets with limited useful life are amortized straightly to the useful life, the useful life
and amortizing basis are reconsidered at the end of each year, when there is difference with the original
estimation, adjustment shall be made. Intangible assets with limited useful life are amortized as
followings:
Categories Useful life Basis of amortization Notes
Land using right 50 yrs Average age
Patent 10 yrs Average age
Industrial property and special
10 yrs Average age Internal R&D
tech
Software 5,10 yrs Average age
10 yrs or beneficial
Other intangible assets Average age
age
Intangible assets without certain useful life are not amortized. They will be reconsidered in each
accounting period, if strong evidence showing that the useful life became limited, then it will be
estimated, and amortized on straight basis. Intangible asset without certain useful life shall be tested each
year whether or not there is evidence of impairment.
On the balance sheet date, the Company measures intangible assets according to the lower of book
value and retrievable value, intangible asset impairment provisions shall be provided at the difference of
retrievable value lower than the book value, and the corresponding impairment loss shall be recorded to
current income account. Once intangible asset impairment losses are recognized, they will not be written
back in successive fiscal periods.
Internal R&D expenses are divided into research expenses and development expenses and treated
separately. The period of scientific or technological creation or research is categorized as research period.
The period of using the researching fruits or other know-how into practical projects or designing of
substantial products, equipment, or materials is recognized as development period.
Research refers to creative and planned investigation on new science or technologies.
Development means using the researching fruits or other know-how into practical projects or
designing of substantial products, equipment, or materials is recognized as development period.
Expenses of internal R&D projects in research stages are recorded into current income account
when occurred; expenses of internal R&D projects in development stages, are recognized as intangible
assets when all of the following conditions are satisfied, or otherwise recorded to current income account:
(1) Developing of the intangible asset is about to be completed, and it is technically possible to be
put into use or sold; (2) Has the intention to use or sell it; (3) The intangible asset is proved being able
to make financial benefit, including there is a market for the products using the intangible asset or the
intangible asset itself. If the intangible asset is used internally, its usage should be proved; (4) There are
sufficient technologies, financial resources, or other resources that support the developing, using or
selling of the intangible asset; (5) When the expenses attributable to the intangible asset can be reliably
measured. The development expenses accounted in prior income accounts shall not be recognized as
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asset in succeeding period. Development expenses that have been capitalized shall be demonstrated as
expenses in the balance sheet, and transferred into intangible asset as soon as it reaches usable status.
(18) Goodwill
Goodwill is the difference of merger costs of enterprises under same control over the share of
recognizable net asset or fair value at the date of purchasing of the invested company.
Goodwill related to subsidiaries are presented individually in consolidated financial statements,
goodwill related to affiliates are included in the book value of long-term equity investment.
Goodwill presented individually in financial statements are tested for impairment at leased once at
end of each year. At impairment test, the book value of goodwill shall be shared by the benefited asset
group according to the collaboration effects between the merger businesses.
(19) Expectable liabilities
When responsibilities occurred in connection to contingent issues, and all of the following
conditions are satisfied, they are recognized as expectable liability in the balance sheet: (1) This
responsibility is a current responsibility undertaken by the Company; (2) Execution of this responsibility
may cause financial benefit outflow from the Company; (3) Amount of the liability can be reliably
measured.
Expected liabilities are initially measured at the best estimation on the expenses to exercise the
current responsibility, and with considerations to the relative risks, uncertainty, and periodic value of
currency. When the periodic value of currency is with major influence, then the best estimation will be
determined at the discount of future cash outflow. The book value of expected liability is revised at
balance sheet day, and adjustment will be made to reflect current best estimation.
(20) Payment in shares and equity instruments
1. Categories of payment in shares
Share payment of the Company is divided into payment by shares and payment by cash.
2. Recognition of equity instrument fair value
For equity instruments such as share options with an active market, the fair value is decided by the
quotation in the active market. For those without an active market, the fair values are decided by a
pricing model, and the following factors shall be considered when deciding the pricing model: (1)
Exercising price of the option; (2) Valid period of the option; (3) Current price of the target shares;
(4) Predicted share price fluctuation rate; (5) Predicted dividend of the shares; (6) Interest
rate without risks in the valid period.
When deciding the fair value of the equity instruments, the influence of market condition in the
exercisable condition and non-exercisable conditions in the payment agreement shall be considered.
When the payment of shares is under non-exercisable conditions, the cost corresponding to the services
shall be recognized only when the non-market conditions (such as service term) in all of the exercisable
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conditions are satisfied by the employee or other parities.
3. Basis of deciding the best estimation of the exercisable equity instruments
At each balance sheet date during the waiting period, the best estimation shall be made according to
the newest subsequent information such as the number of employees who have exercisable options, and
amount of equity instrument shall be adjusted. At the exercisable date, the final estimated amount shall
be the same with the practical amount of exercisable options.
4. Accounting treatment of implementing, amending, and terminating of share
payment scheme
Payment by equity is measured by fair value of the equity paid to the employees. If the equity can
be exercised instantly, it will be accounted into relative cost at the fair value of the equity at the day of
giving. If the equity is only exercisable upon satisfying of performance or service period, basing on the
best estimation on the amount of equity, according to the fair value at the day of giving, record the
service into related cost or capital reserves at each balance sheet date in the period. No adjustment will
be done on recognized cost or expenses and the owners’ equity after the exercise date.
Payments of share equity in cash are measured on the fair value of liabilities recognized basing on
the share equity or other equity instruments. Those which can be exercised immediately upon granting
are accounted into related costs or expenditures at the fair value undertaken by the Company at the date
of granting, and liabilities shall be increased correspondingly. Those which can only be exercised upon
satisfying of certain conditions including providing of services or business contribution, shall be
accounted into cost account and corresponding liabilities basing on the best estimation of exercising
condition at each balance sheet day in the waiting period. On each balance sheet day and settlement day
prior to clearing of related liabilities, the fair value of the liabilities shall be reevaluated, and the changes
shall be accounted into current income account.
In case the equity instrument is canceled in the waiting period, the Company will accelerate the
exercise of the equity instrument to be canceled. The Amount recognizable for the rest of waiting period
shall be accounted into current gain/loss instantly, and recognized to capital reserves at meantime. When
the employee or other beneficiary failed to satisfy the conditions to exercise the options in the waiting
period, the Company will cancel the equity instrument.
(21) Revenue
1. Sales of goods
When all of the following conditions are satisfied, the sales of goods are recognized as sales income
according to the contract amount received or receivable from the buyer: (1) Main risks and rewards
attached to the ownership of the goods have been transferred to the buyer; (2) No succeeding power of
administration or effective control is reserved which are usually attached to ownership; (3) Amount
25
received can be reliably measured; (4) Related financial benefit may inflow to the Company; (5)
Relative costs, occurred or will occur, can be reliably measured.
When collection of contract payment is by deferred way, and practically with financing characters,
sales income shall be recognized at the fair value of the receivable contract amount.
2. Providing of labor service
Labor service started and completed in a same fiscal year is recognized as income at completion. If
they are not in the same year, then use the estimation on percentage basis when it is possible.
When the partial of service is not able to be estimated, the labor service income is treated as the
followings:
A. When the labor cost occurred is expectable to be covered, the labor service income is recognized
at the cost already occurred, and recorded to labor cost as well.
B. When the labor cost occurred is not expectable to be covered, the cost will be recorded to current
gain/loss account without recognizing as labor service income.
When a contract engaged with other company is including sales of goods and providing of labor
services, if the goods and services can be measured separately, they will be treated separately. When they
are not able to be distinguished, or not able to be measured separately, all of them will be treated as sales
of goods.
3. Demising of asset using rights
Income is recognized when the financial benefit in connection with the demising of asset using
right was received and the amount can be reliably measured.
Interest income is recognized according to the applicable period of time and interest rate. Amount
of application fee is recognized according to the period and calculation decided by the related contract.
4. Construction contracts
Metro screen door projects of the Company and Shenzhen Fangda Automatic System Co., Ltd.
(Fangda Automatic System), and glass curtain wall project of Shenzhen Fangda Decoration Engineering
Co., Ltd. (Fangda Decoration) are individual construction contracts, they are accounted by the following
means:
Construction contracts completed within a fiscal year are recognized for their income and cost upon
completion.
Income and expenses of the construction contracts carried over-year are recognized on percentage
basis at balance sheet day when all of the following conditions are satisfied: contract income can be
reliably measured, relative financial benefit can inflow to the Company; progress of the project and costs
to complete the contract can be reliably recognized; cost occurred to complete the contract can be clearly
distinguished and reliably measured, which enables comparing of actual cost with predicted cost.
In which: Contract costs are direct and indirect expenses occurred since the date when the contract
is engaged till the completion day.
26
Progress of a contract is recognized at the percentage of actual accumulative cost in the total of
budget of the contract.
Construction contracts completed in current term are recognized for income according to the actual
total income of the contract less income recognized in previous terms; meanwhile, the total costs of the
contract less costs recognized in previous terms are recognized as current contract costs. If the total
contract cost is predicted to be greater than the predicted total income, the predicted loss shall be
recognized as current cost instantly.
Parts of the curtain wall project under Fangda Decoration are outsourced, and administrative fees
are collected at agreed rate. For these construction contracts, income will be recognized when ongoing
payment for the project is received and corresponding costs are transferred.
(22) Government subsidy
Government subsidies are the monetary or non-monetary capital received from the government by
free, but not include capital inputted by the government as investment of owners.
When a government subsidy is monetary capital, it is measured at the received or receivable amount.
None monetary capital are measured at fair value; If no reliable fair value available, recognized at
RMB1.
Government subsidies in connection with capital are recognized as deferred income, and amortized
straight to its useful life, and accounted into current income account.
Government subsidies in connection with gains, which are used to cover future expenses or losses,
are recognized as deferred gains, and recorded to current income account to the period when the
expenses are recognized.
If a recognized government subsidy need to be returned, if there is relative deferred gains, the
balance of deferred gains will be setoff, the exceeded part shall be recorded into current income account;
if there is no relative deferred gains, record to current income account directly.
(23) Deferred income tax assets/ deferred income tax liabilities
Income taxes are accounted on liability basis in the balance sheet. When there is difference between
the book value and taxable basis of asset or liability, deferred income tax asset and deferred income tax
liability are recognized according to the regulations.
At the balance sheet day, the current income tax liabilities (or assets) formed in current term or
previous term, are measured by the amount of income tax to be paid (or refunded) according to the
taxation law; deferred income tax assets and liabilities are measured at the applicable tax rate in the
period when the asset is predicted to be retrieved or the liability is predicted to be cleared.
Recognition of deferred income tax asset is limited to the provisional difference to be deducted, and
deductible losses and taxable income amount. If the taxable income realized in the future period of
transferring of provisional differences is not sufficient, which made the financial benefit related to the
provisional difference unrealizable, no deferred income tax asset is recognized. Deferred income tax
liabilities generated by the taxable provisional difference related to fluctuation of fair value of
investment in subsidiaries and affiliates are recognized, but those satisfying the recovering time of the
taxable provisional difference are not recognized; For deferred income tax assets caused by
27
deductible temporary differences related to investment in subsidiaries, affiliates, and joint operations, if
the deductible temporary differences are possible to be written back in a expectable future, namely there
is a substantial plan to dispose the investment, and the gains from disposal are enough not only to
provide taxable income, but also to deduct the deductible temporary difference, it shall be recognized.
At the balance sheet day, the book values of deferred income tax assets are revised.
Those deductible provisional differences, which are neither enterprise merger, nor initial recognition of assets
or liabilities are recognized as income tax expenses or income into current income account.
(24) Leasing
Leasing is one of the business operations of the Company.
1. The Company is the lender
Rentals from operational leasing are recognized as current gains on straight basis to the periods of
leasing. Initial direct expenses are recorded to current income account.
2. The Company as lessee
Rentals in operational leasing are recorded to relative capital cost or current income account on
straight basis to the periods of leasing. Initial direct expenses are recorded to current income account.
(25) Sellable assets in possession
Sellable assets in possession are assets satisfying all of the following conditions: Resolutions
have been made on disposal of these non-current asset;Irrevocable agreement has been engaged with the
buyer. The possession will be transferred within one year.
For fixed assets hold for sale, the predicted net residue value shall be adjusted to reflect the net
value of fair value less the disposal expenses, but not greater than the original book value when it had
satisfied the conditions of disposable. The balance between the original book value and the predicted net
residue value shall be accounted into current income account as asset impairment loss.
Other non-current assets such as intangible assets satisfying the conditions of available-to-sale,
shall be handled according to the above principles. However the deferred income tax assets, financial
assets satisfying “Enterprise Accounting Standard No.22 – Recognition and measuring of financial
instruments”, investment properties and biological properties measured by fair value, and rights from
insurance contracts, are not included.
(26) Accounting of hedging instruments
Hedging instruments are the financial instruments adopted by the Company to avoid risks of
fluctuating product prices, namely use the expected change of cash flow of the hedging instruments to
wholly or partially deduct the change of cash flow of the target products. Hedging instrument used by
the Company is Aluminum Future Contract targeting on purchasing of aluminum materials. The
Company considers the hedging instrument highly effective only when the following conditions are
satisfied:
1. The hedging instrument can effectively neutralize the risks of the target goods caused by change
of cash flow since it started and in the following period.
2. The actual effectiveness is between 80% and 125%.
28
The part of gains or loss from hedging instruments attributable to effective hedging, shall be
straightly recognized as owners’ equity and demonstrated individually. The amount of the effective
hedging shall be decided by the lower one of absolute values of gain or loss since starting of hedging and
the accumulative variation of cash flow predicted from the beginning of hedging. When a predicted
transaction makes the Company recognized a financial asset or liability, the gain or loss originally
recognized as owners’ equity shall be written over to current income account in the same period with the
gain or loss of the financial asset or its influence of the Company’s gain/loss. When the net loss
originally recognized to owners’ equity is fully or partially unrecoverable in succeeding account period,
the unrecoverable part shall be written over to current income account. The above hedging accounts are
terminated as soon as expiration, sold, terminated, and disqualified.
(27) Change of main accounting policies and estimations
1. Change of Accounting Policies
No change of accounting policies occurred in the year.
2. Change of accounting estimations
No change of accounting estimations occurred in the year.
(28) Correction of previous accounting faults
No correction of previous accounting faults occurred in the report term.
III. Taxation
(1) Main categories and rates of taxes
1. Operation tax and surtaxes
Tax items Tax basis Rate Notes
income from curtain wall and metro screen door
3%
Business tax installation projects
Property rental income 5%
Sales income of curtain wall and aluminum
17%
materials
VAT
Sales income of screen door materials 17%
Sales income from LED products 17%
City maintenance
and construction VAT payable + business tax 7%
tax
Education surtax VAT payable + business tax 3%
Local education
VAT payable + business tax 1% or 2% Note 1
surcharges
Note 1. Subsidiaries of the Company located in Shenyang Province are subject to educational
surcharge at 1% of VAT and operation tax; subsidiaries in other location are subject to educational
surcharge at 2% of the same. The Company and its subsidiaries located in Shenzhen are subject to 2% of
29
the “three taxes” since January 1, 2011.
2. Enterprise income tax
Name of companies Tax rate Notes
The headquarter 24% Note (1)
Fangda Decoration 15% Note (1), (3)
Fangda Automatic 15% Note (1), (2)
Shenzhen Fangda Yide New Material Co., Ltd. (Fangda
24% Note (1)
Yide)
Shenzhen Fangda Gruoke Electronic Optical Tech Co., Ltd.
24% Note (1)
(Fangda Guoke)
Shenzhen Woke Semi-conductor Lighting Co., Ltd.
24% Note (1)
(Shenzhen Woke)
Fangda New Material (Jiangxi) Co., Ltd. (Fangda New
12.5% Note (1), (4)
Material)
Fangda Aluminium 25% Note (1)
Shenyang Fangda Semi-conductor Lighting Co., Ltd.
25% Note (1)
(Shenyang Fangda)
Dongguan Fangda New Material Co., Ltd. (Dongguan New
25%
Material)
Note: (1) The People’s Congress passed “The Income Tax Law of PRC” (the new Tax Law”) on
March 16, 2007. The new Tax Law took effect on January 1, 2008. Corporation income tax was reduced
from 33% to 25%. High-tech enterprises recognized by the national government are subject to 15% of
corporation income tax. According to document 国发[2007]39 号文 issued by the national government,
the Company and the subsidiaries were subject to 15% of corporation tax, whereas since 2011, the tax
rate is increased to 24%.
(5) According to the Certification of High-tech Enterprise issued by Shenzhen Commission of
Trade Industry and IT, Shenzhen Commission of Finance, Shenzhen National Tax Bureau, and Shenzhen
Local Tax Bureau on June 27, 2009, Fangda Automatic was entitled to enjoy 15% of Corporation Tax for
three years since the certification was awarded.
(3) According to the Certification of High-tech Enterprise issued by Shenzhen Commission of
Trade Industry and IT, Shenzhen Commission of Finance, Shenzhen National Tax Bureau, and Shenzhen
Local Tax Bureau on October 29, 2009, Fangda Decoration was entitled to enjoy 15% of Corporation
Tax for three years (including 2009) since the qualifications were awarded.
(4) As approved by Nanchang High-tech Zone Tax Bureau with document 洪高国税发（2008）74
号, Fangda New Material enjoys “2 free 3 half” policy since 2008. The rate is 12.5% since 2010.
3. Property tax
Property tax rate applicable to the Company and subsidiaries is 1.2% basing on 70% of the original
value of property in Shenzhen. Same for the properties of subsidiaries outside Shenzhen for self use.
Leasing property is subject to 12% of tax on rental income.
30
4. Personal income tax
Individual income tax of the employees are paid by the Company on behalf.
IV. Merger of enterprises and consolidated financial statements
(1) Profiles of the subsidiaries
1. Subsidiaries founded or invested
Ownership Registered
Names of Business Legal
of the Reg. Add. capital Business scope
subsidiaries property representative
subsidiary RMB0’000
Designing, manufacturing,
and installation of curtain
Fangda Fully-owned
Shenzhen Ltd. liability 31,000.00 Xiong Jianwei walls, glass shields, doors,
Decoration subsidiary
windows, fences, and
ceilings.
Designing, technical
developing, installation,
Fangda Fully-owned Wang and sales of PSD system;
Shenzhen Ltd. liability 10,500.00
Automatic subsidiary Shengguo import & export;
installation and processing
of PSD.
Developing, designing,
Fangda Fully-owned Sino-foreign Yang
Shenzhen USD320.00 manufacturing of new type
Yide Co. subsidiary joint venture Xiaozhuan
composite materials
Researching, developing,
manufacturing, trading, and
installation engineering of
semi-conductor material
Subsidiary of Ltd. liability
Fangda and devices, electro-optical
controlled Shenzhen (Sole investment 5,000.00 Yu Guoan
Guoke devices and equipment,
subsidiary by legal person)
electronic displaying
devices, video products;
technical consulting and
service; international trade.
Production and selling of
new materials, compound
materials, curtain walls,
Ltd. liability
doors, windows, metal
(joint venture
Fangda structures, metal products,
Fully-owned between Yang
New Nanchang USD1,200.00 environment protection
subsidiary companies from Xiaozhuan
Material products, metallurgy
Taiwan, Hong
equipment, machinery,
Kong or Macau)
aluminum products, heat
radiation materials,
macromolecule materials.
Designing, manufacturing,
sales and installation of
aluminum sections for
Ltd. liability
curtain walls, doors, and
(Joint venture
Fangda Fully-owned Yang windows; decoration
Nanchang with foreign 2,000.00
Aluminium subsidiary Xiaozhuan design, water and power
invested
supply equipment, air
company)
conditioner installation.
House renting, equipment
renting.
Fully-owned
HK Junjia HK None HKD1.00 Investment
subsidiary
Manufacturing of
Shenyang Controlled Wang
Shenyang Ltd. liability 20,000.00 semiconductor lighting
Fangda subsidiaries Shengguo
material and chips; lighting
31
source encapsulation;
developing, manufacturing,
technical consulting of
semiconductor lighting
products; developing,
designing, manufacturing,
engineering, installation
and trading of
semiconductor lighting
system; materials and
products related to
semi-conductor lighting;
trading of construction
material; import and export
agency service of products
and technologies.
Developing, designing and
sales of new construction
material; developing,
designing, installation and
trading of curtain walls,
PSD systems, LED
products, metal roof
products, and solar-energy
products; interior
Dongguan decoration; water and
Fully-owned Ltd. liability
New power system installation;
subsidiary of Dongguan (Sole investment 21,280.00 Xiong Jianwei
Material installation and trade of
subsidiary by legal person)
Co., Ltd. air-conditioning system;
designing, installation,
trade of lighting system;
contracting of overseas
curtain wall projects and
domestic international
bidding projects;
manpower outsourcing;
import and export of goods
and technologies
Actual
Share Balance of other items
Names of Voting rights investment at
proportion actually formed net Consolidated?
subsidiaries (%) end of term
(%) investment in the subsidiaries
RMB0’000
Fangda
100.00 100.00 31,000.00 Yes
Decoration
Fangda
100.00 100.00 17,877.73 Yes
Automatic
Fangda
100.00 100.00 USD320.00 Yes
Yide Co.
Fangda
64.58 64.58 10,500.00 Yes
Guoke
Fangda
New 100.00 100.00 USD1,200.00 Yes
Material
Fangda
100.00 100.00 2,000.00 Yes
Aluminum
HK Junjia 100.00 100.00 HKD1.00 Yes
Shenyang
64.58 64.58 12,916.00 Yes
Fangda
Dongguan
New
100.00 100.00 21,280.00 Yes
Material
Co., Ltd.
Minor Amount for deducting minor
Names of Ownership Organization
shareholders’ shareholder’s equity in the Notes
subsidiaries type code
equity minor shareholder’s equity
32
Fangda
Corporation 19244418-2
Decoration
Fangda
Corporation 75425429-3
Automatic
Fangda
Corporation 61929454-0
Yide Co.
Fangda
Corporation 72856199-4 See notes See notes
Guoke
Fangda
New Corporation 74852611-7
Material
Fangda
Corporation 15830664-0
Aluminum
HK Junjia None None
Shenyang
Corporation 66254891-3 82,362,870.18 -1,974,598.07
Fangda
Dongguan
New
Corporation 56457096-5
Material
Co., Ltd.
Note: Fangda Guoke is the subsidiary under direct control of Shenyang Fangda. The minority
shareholders’ equity of Fangda Guoke has already been included in the minority shareholders’ equity of
Shenyang Fangda, thus it is not presented separately in this table.
2. Subsidiaries procured from merger of companies under different control
Name of the Ownership Registered
Business Legal
subsidiaries of the Reg. Add. capital Business Scope
property representative
(short form) subsidiary (RMB0’000)
R&D,
designing,
production,
after service of
Subsidiary of
Shenzhen LED products;
controlled Shenzhen Ltd. liability 1,000.00 Yu Guoan
Woke installation of
subsidiary
LED color
displayer, city
and road
lighting system.
Actual capital
Name of the Share Balance of other items actually
Voting rights input at end of
subsidiaries proportion formed net investment in the Consolidated?
(%) report term
(short form) (%) subsidiaries
(RMB0’000)
Shenzhen
64.58 64.58 1,899.13 Yes
Woke
Minor Amount for deducting minor
Names of Ownership Organization
shareholders’ shareholder’s equity in the minor Note
subsidiaries type code
equity shareholder’s equity
Shenzhen
Corporation 72855858-4 See notes See notes
Woke
Note: Shenzhen Woke is the subsidiary under direct control of Fangda Guoke; while Fangda Guoke
is the subsidiary under direct control of Shenyang Fangda. The minority shareholders’ equity of Fangda
Guoke and Shenzhen Woke has already been included in the minority shareholders’ equity of Shenyang
Fangda, thus it is not presented separately in this table.
(2) The change of consolidation scope
No change of consolidation scope in the report term.
33
V. Notes to the consolidated financial statements
(1) Monetary capital
Balance of book value at end of term Balance of book value at beginning of term
Original Exchange Translated to Original Exchange Translated to
Items currency rate RMB currency rate RMB
I. Cash
RMB 15,073.35 1 15,073.35 9,841.07 1 9,841.07
USD
HKD 5,409.06 0.83 4,498.71 4,767.80 0.85093 4,057.07
Cash subtotal 19,572.06 13,898.14
II. Bank savings
RMB 427,024,473.37 478,568,182.50 1 478,568,182.50
USD 101,428.35 6.56 665,006.11 346,670.47 6.6227 2,295,894.52
HKD 74.57 0.83 62.01 74.57 0.85093 63.45
Macao Dollar 0.00 -
Bank saving
subtotal 427,689,541.49 480,864,140.47
III. Other
monetary
capital
RMB 13,678,509.23 25,417,161.50 1 25,417,161.50
USD 170,469.23 6.47 1,103,208.67 100.2 6.6227 663.59
HKD -
Subtotal of
other monetary
capital 14,781,717.90 25,417,825.09
Total 442,490,831.45 506,295,863.70
Note 1: RMB12 million among the balance of bank deposit at end of year was frozen by the Court
for the lawsuit involved by Fangda Decoration. This is not regarded as cash equivalent at preparing of
Cash Flow Statement. For details of the case please see Note VII(I)-1.
Note 2: Balance of RMB14,781,717.90 under other monetary capital was mainly deposit for bank
accepted notes and letter of guarantee, which are not regarded as cash equivalent at preparing of cash
flow statement.
(2) Notes receivable
(1) Category of notes receiveable
Balance of book value at end of Balance of book value at
Categories
term beginning of term
Bank acceptance 1,550,000.00 2,262,000.00
Commercial acceptance 14,229,007.92
34
Total 1,550,000.00 16,491,007.92
Note: Notes receivable has decreased by 90.6%, which was mainly due of trade acceptance draft.
(2) Top 5 bank acceptance drafts endorsed but not due yet are:
Issuer Date of issue Expired on Amount
Shenzhen Tianpai Door & Window
Technologies Co., Ltd. 2011.3.9 2011.9.9 3,000,000.00
Shenzhen Shezhuangzong Decoration
Engineering Co., Ltd. 2011.5.13 2011.11.13 2,000,000.00
Shenyang Yuanda Aluminum
Engineering Co., Ltd. 2011.2.25 2011.8.25 1,000,000.00
Shenyang Yuanda Aluminum
Engineering Co., Ltd. 2011.4.19 2011.10.13 1,000,000.00
China Construction Co. Division IV
Ltd. 2011.5.11 2011.11.11 553,926.26
Total 7,553,926.26
(3) Account receivable
(1) Account receivable on categories
Balance of book value at end of term
Categories Book value Bad debt provision
Net amount
Amount Proportion Amount Rate
Receivables with
major individual
amount and bad debt
provision provided
individually
Receivables provided 599,466,541.99 97.32% 106,635,630.46 17.79% 492,830,911.53
bad debt provision in
groups
Incl. Receivable 599,466,541.99 97.32% 106,635,630.46 17.79% 492,830,911.53
accounts not
consolidated
Sub-total of group 599,466,541.99 97.32% 106,635,630.46 17.79% 492,830,911.53
Account receivable
with minor individual
16,499,671.58 2.68% 16,499,671.58 100.00%
amount but bad debt
provision is provided
Total 615,966,213.57 100.00% 123,135,302.04 19.99% 492,830,911.53
Balance of book value at beginning of term
Categories Book value Bad debt provision
Providing Net amount
Amount Ratio (%) Amount
rate (%)
Receivables with
major individual
amount and bad debt
provision provided
individually
35
Receivables provided
bad debt provision in 507,918,512.04 96.95% 111,244,947.28 21.90% 396,673,564.76
groups
Incl. Receivable
accounts not 507,918,512.04 96.95% 111,244,947.28 21.90% 396,673,564.76
consolidated
Sub-total of group 507,918,512.04 96.95% 111,244,947.28 21.90% 396,673,564.76
Account receivable
with minor individual
15,988,232.58 3.05% 15,988,232.58 100.00%
amount but bad debt
provision is provided
Total 523,906,744.62 100.00% 127,233,179.86 24.29% 396,673,564.76
Including: foreign currencies
Balance of book value at beginning of
Balance of book value at end of term
term
Items
Original Exchange Translated to Original Exchange Translated to
currency rate RMB currency rate RMB
USD 2,847,661.28 6.48 18,455,737.46 3,413,051.32 6.62 22,603,614.98
HKD 9,256,528.95 0.83 7,697,729.47 9,256,528.95 0.85 7,876,658.18
Others 5,805.72 6.67 38,736.92
Total 26,192,203.85 30,480,273.16
Account receivables on which bad debt provisions are provided on age basis in the group:
Balance of book value at end of term
Age Bad debt
Amount Proportion Net amount
provision
within 1 year 313,194,358.37 50.85% 9,396,022.37 303,798,336.00
1-2 yrs 78,126,168.80 12.68% 7,812,616.88 70,313,551.92
2-3 yrs 73,230,081.10 11.89% 21,969,024.33 51,261,056.77
Over 3 yrs 134,915,933.72 21.90% 67,457,966.88 67,457,966.85
Total 599,466,541.99 97.32％ 106,635,630.46 492,830,911.53
Balance of book value at beginning of term
Age Bad debt
Amount Proportion Net amount
provision
within 1 year 236,060,382.71 45.06% 7,081,926.52 228,978,456.19
1-2 yrs 52,161,878.34 9.96% 5,216,187.84 46,945,690.50
2-3 yrs 54,506,462.84 10.40% 16,351,938.85 38,154,523.99
Over 3 yrs 165,189,788.15 31.53% 82,594,894.07 82,594,894.08
Total 507,918,512.04 96.95% 111,244,947.28 396,673,564.76
Details of receivable accounts with minor amount but provided of bad debt provisions individually:
Description of
Book value at Bad debt
the receivable Rate Reason
end of term provision
accounts
Curtain wall
Aged over 5 years, not
project 803,340.45 803,340.45 100.00%
expectable to be retrieved
receivable
36
Description of
Book value at Bad debt
the receivable Rate Reason
end of term provision
accounts
Curtain wall
Aged over 5 years, not
project 660,625.41 660,625.41 100.00%
expectable to be retrieved
receivable
Aged over 5 years, not
Trade receivable 648,100.95 648,100.95 100.00%
expectable to be retrieved
Curtain wall
Aged over 5 years, not
project 430,629.58 430,629.58 100.00%
expectable to be retrieved
receivable
Aged over 5 years, not
Trade receivable 433,868.60 433,868.60 100.00%
expectable to be retrieved
Curtain wall
Aged over 5 years, not
project 354,177.00 354,177.00 100.00%
expectable to be retrieved
receivable
Curtain wall
Aged over 5 years, not
project 346,573.70 346,573.70 100.00%
expectable to be retrieved
receivable
Curtain wall
Aged over 5 years, not
project 316,861.34 316,861.34 100.00%
expectable to be retrieved
receivable
Curtain wall
Aged over 5 years, not
project 300,000.00 300,000.00 100.00%
expectable to be retrieved
receivable
Aged over 5 years, not
Trade receivable
487,785.66 487,785.66 100.00% expectable to be retrieved
Total 4,781,962.69 4,781,962.69
Note: As of December 31, 2011, account receivables, on which the Company has provided full bad
debt provision, was amounted to RMB16,499,671.58.
(2) There is no receivable account that have been fully provided of bad debt provision, or with great
portion, and retrieved or written back in the report term, or such account with major amount retrieved in
the report term..
(3) No receivable account has been deducted in current year.
(4) No receivable account due from shareholders with over 5% (included) of the Company’s shares
or related parties.
(5) Top 5 of receivables at end of report term:
Relation
Amount at end % in total
Name of the companies with the Age
of term receivables
Company
Shenzhen Greenview Property Co., Within 1
Client 36,302,792.44 5.89%
Ltd. year
Dalian Wanda Commercial Client 24,098,058.91 Within 1 3.91%
37
Property Co., Ltd. year
Hainan Sanya Phoenix Island Within 1
Client 19,934,639.77 3.24%
Development Co., Ltd. year
Xin’Mo’er Property Development Within 1
Client 32,358,942.75 5.25%
(Shenyang) Co., Ltd. year
Shenzhen Metro Group Co., Within 1
Client 23,166,947.67 3.76%
Ltd. year
Total 135,861,381.54 22.06%
(4) Other account receivable
(1) Other account receivable on categories
Balance of book value at end of term
Categories Book value Bad debt provision
Net amount
Amount Providing
Ratio (%) Amount
rate (%)
Other receivables with major
individual amount and bad
1,220,316.84 1.87% 1,220,31.84 100.00%
debt provision provided
individually
Other receivables provided 51,503,441.5
61,048,293.29 93.76% 9,544,851.75 15.63%
bad debt provision in groups 4
Incl. Receivable accounts not 51,503,441.5
61,048,293.29 93.76% 9,544,851.75 15.63%
consolidated 4
51,503,441.5
Sub-total of group 61,048,293.29 93.76% 9,544,851.75 15.63%
4
Other account receivable with
minor individual amount but 2,841,928.16 4.36% 2,841,928.16 100.00%
bad debt provision is provided
13,607,096.7 51,503,441.5
Total
65,110,538.29 100.00% 5 20.90% 4
Balance of book value at beginning of term
Categories Book value Bad debt provision
Providing Net amount
Amount Ratio (%) Amount
rate (%)
Other receivables with major
individual amount and bad
1,220,316.84 2.33% 1,220,316.84 100.00%
debt provision provided
individually
Other receivables provided 39,235,264.8
48,373,161.47 92.25% 9,137,896.60 18.89%
bad debt provision in groups 7
Incl. Receivable accounts not 39,235,264.8
48,373,161.47 92.25% 9,137,896.60 18.89%
consolidated 7
39,235,264.8
Sub-total of group 48,373,161.47 92.25% 9,137,896.60 18.89%
7
Other account receivable with 2,841,928.16 5.42% 2,841,928.16 100.00%
38
minor individual amount but
bad debt provision is provided
13,200,141.6 39,235,264.8
Total 52,435,406.47 100.00% 25.17%
0 7
Other account receivables on which bad debt provisions are provided on age basis in the group:
Balance of book value at end of term
Age Bad debt
Amount Proportion Net amount
provision
within 1 year 39,956,630.93 61.37% 1,212,866.02 38,743,764.91
1-2 yrs 3,488,789.08 5.36% 348,878.91 3,139,910.17
2-3 yrs 4,091,648.64 6.28% 1,227,494.59 2,864,154.05
Over 3 yrs 13,511,224.64 20.75% 6,755,612.23 6,755,612.41
Total 61,048,293.29 93.76% 9,544,851.75 51,503,441.54
Balance of book value at beginning of term
Age Bad debt
Amount Proportion Net amount
provision
within 1 year 26,630,513.01 50.79% 798,915.40 25,831,597.61
1-2 yrs 3,702,868.95 7.06% 370,286.90 3,332,582.05
2-3 yrs 5,249,702.00 10.01% 1,573,293.62 3,676,408.38
Over 3 yrs 12,790,077.51 24.39% 6,395,400.68 6,394,676.83
Total 48,373,161.47 92.25% 9,137,896.60 39,235,264.87
Including: foreign currencies
Balance of book value at beginning of
Balance of book value at end of term
term
Items
Original Exchange Translated to Original Exchange Translated
currency rate RMB currency rate to RMB
USD 83,464.95 6.47 540,151.77 107,953.27 6.6227 714,942.12
Total 540,151.77 714,942.12
Other account receivable with major amount and provided bad debt provision individually or minor
amount but bad debt provision provided individually:
Description of Book value at Bad debt
Rate Reason
other receivables end of term provision
Deposit Aged over 5 years, not
1,220,316.84 1,220,316.84 100.00%
receivable expectable to be retrieved
Deposit Aged over 5 years, not
300,000.00 300,000.00 100.00%
receivable expectable to be retrieved
Deposit Aged over 5 years, not
224,875.84 224,875.84 100.00%
receivable expectable to be retrieved
Deposit Aged over 5 years, not
159,800.00 159,800.00 100.00%
receivable expectable to be retrieved
Deposit Aged over 5 years, not
150,000.00 150,000.00 100.00%
receivable expectable to be retrieved
Total 2,054,992.68 2,054,992.68
Note : Receivables being provided full bad debt provisions this year were totaled to
39
RMB4,062,245.00.
(2) There is no receivable account that have been fully provided of bad debt provision, or with great
portion in previous year, but retrieved or written back in the report term, or such account retrieved or
written back at large percentage or major amount.
(3) No offsetting of other receivable account.
(4) No other receivable account due from shareholders with over 5% (included) of the Company’s
shares or related parties.
(5) Top 5 debtors of other receivable accounts:
Portion in total
Name of the Relation with Amount at
Specification Age other receivable
companies the Company end of term
accounts (%)
project
Wang Weihong contractor 3,154,006.68 Within 1 year 4.84%
management fee
Zhangjiakou
Chengtou
Deposit Client 3,120,543.15 Within 1 year 4.79%
Commercial
Center
project within 1 yr /
Xin Song management contractor 2,740,327.61 1-2 yrs /2-3 4.21％
fee yrs
Finance Bureau of
Nanchang Hi-tech Land retrieving authority of
2,604,216.08 within 1 year 4.00%
Development compensation land property
Zone
Kunming
Construction Bidding deposit Client 2,500,000.00 within 1 yr 3.84%
Trade Center
Total 14,119,093.52 21.68％
(5) Prepayment
(1) Demonstrated by ages:
Balance of book value at end of term
Age Bad debt
Amount Proportion Net amount
provision
within 1 year 33,438,381.10 95.36% 1,443.37 33,436,937.73
1-2 yrs (included) 103,298.77 0.29% 10,329.88 92,968.89
2-3 yrs (included) 970,751.02 2.77% 291,225.31 679,525.71
Over 3 yrs 551,799.98 1.57% 269,232.34 316,430.50
Total 35,064,230.87 100.00% 572,230.90 34,525,862.83
Balance of book value at beginning of term
Age Bad debt
Amount Proportion Net amount
provision
40
within 1 year 18,167,810.47 87.18% 1,443.37 18,166,367.10
1-2 yrs (included) 918,561.95 4.41% 10,329.88 908,232.07
2-3 yrs (included) 1,101,998.54 5.29% 291,225.31 810,773.23
Over 3 yrs 649,879.99 3.12% 269,232.34 380,647.65
Total 20,838,250.95 100.00% 572,230.90 20,266,020.05
Note: Book balance of prepayment has increased by 70.36% at the end of term over the beginning
of term, which was caused by expanding of curtain wall business, and increasing of prepaid installation
fee and trades.
(2) Other top 5 debtors of prepayments:
Relation Balance of
Name of the % in total Date of Reason of
with the book value at
companies prepayment prepayment unsettled
Company end of term
Shenzhen Zhong’an
Service not
Lianfa Labor Service Supplier 5,126,582.91 14.61% 2011
provided yet
Co., Ltd.
Guangdong Xingfa Rights on
Aluminum Co., Ltd. Suppliers 1,718,431.94 4.90% 2011 goods not
transferred
Nanchang Qingyunpu Rights on
December
Jiahua New-type Wall Supplier 1,548,292.72 4.41% goods not
2010
and Glass Firm transferred
Fujian Minfa Rights on
Aluminum Co., Ltd. Supplier 1,114,391.53 3.18% 2011 goods not
transferred
Shenzhen Zhongshun
Service not
Labor Outsourcing Supplier 1,095,380.00 3.12% 2011
provided yet
Co., Ltd.
Total 10,603,079.10 30.21%
(3) No prepayment account involved with shareholders with over 5% (included) of the Company’s
shares or related parties.
(6) Inventories
(1) Details of inventories
Balance of book value at end of term Balance of book value at beginning of term
Items Impairment Impairment
Amount Book value Amount Book value
provision provision
Raw 38,160,358.66 225,543.53 37,934,815.13 56,115,354.65 225,543.53 55,889,811.12
materials
Product in 13,004,518.31 13,004,518.31 43,221,748.57 43,221,748.57
process
Finished
goods in 18,897,114.82 2,161,154.61 16,735,960.21 14,201,337.84 2,224,683.54 11,976,654.30
stock
Asset
177,033,139.92 177,033,139.92 164,193,924.07 164,193,924.07
formed by
41
Balance of book value at end of term Balance of book value at beginning of term
Items Impairment Impairment
Amount Book value Amount Book value
provision provision
construction
contract
Low price 205.05 205.05 659,849.04 659,849.04
consumable
OEM
1,862,246.00 1,862,246.00 3,042,245.47 3,042,245.47
materials
On-road 1,621,035.10 1,621,035.10 1,301,253.84 1,301,253.84
goods
Total 250,578,617.86 2,386,698.14 248,191,919.72 282,735,713.48 2,450,227.07 280,285,486.41
(2) Change of inventory impairment provisions
Balance of Decreased this term Balance of
book value at Provided
Categories Written book value at
beginning of this term Transferred
back end of term
term
Raw materials 225,543.53 225,543.53
Products in stock 2,224,683.54 63,528.93 2,161,154.61
Total 2,450,227.07 63,528.93 2,386,698.14
(3) Basis of providing impairment provision and situation of writing back
Percentage of
amount written
Basis of providing impairment back in the
Categories Reason of written back
provision balance of the
inventory at end
of report term
Realizable net value lower
Raw materials
than realizable cost
Realizable net value lower
Products in stock
than realizable cost
(7) Available-for-sale financial asset
Disposable financial assets are categorized as the following:
Items Fair value at end of term Fair value at beginning of term
Available-for-sale bonds
Available-for-sale equity
4,347,000.00
instruments 4,312,000.000
Others
Total 4,312,000.000 4,347,000.00
Less: impairment provision for
available-for-sale financial assets
Net amount 4,312,000.000 4,347,000.00
Note 1: The available-for-sale financial asset is the 700,000 current shares of Tianjing Global
Magnetic Card Co., Ltd.
42
(8) Investment properties
（1） Change of investment properties on fair value basis:
Increased this term Decreased this term
Fair value at For own use
Gain/loss Fair value at
Items beginning of Purchased or
from Transferred end of term
term transferred Disposed
change of for own use
from
fair value
inventory
I. Total costs 188,914,883.84 1,359,927.84 187,554,956.00
1. Houses &
188,914,883.84 1,359,927.84 187,554,956.00
buildings
2. Land using
-
rights
II. Total of fair
value 82,311,448.89
fluctuation 5,082,327.66 409,266.74 86,984,509.81
1. Houses &
82,311,448.89 5,082,327.66 409,266.74 86,984,509.81
buildings
2. Land using
-
rights
III. Total of
investment
271,226,332.73
property book
value 5,082,327.66 1,769,194.58 274,539,465.81
1. Houses &
271,226,332.73 5,082,327.66 1,769,194.58 274,539,465.81
buildings
2. Land using
rights
Note 1: Investment property cost has decreased by RMB1,359,927.84, which was caused by
adjusting of the 8th floor of Fangda Building from rental property to self-owned property. This has
decreased by investment property cost by RMB1,359,927.84 and the accumulated fluctuation of fair
value by RMB409,266.74.
Note 3: Among the investment properties, Fangda Technology Building (with book balance
RMB187,010,542.16) has been set on pledge for loans. See Note V (18).
(2) Property license not obtained yet:
Among the investment property, the workshop No.2 and No.3 located on Beihuan Road in
Nanshan Shenzhen have not been granted the certificate of property, their book value at end of year was
RMB28,084,038.20.
(3) Property converting and change of measurement basis
Decrease of investment property was caused by adjusting of the 8th floor of Fangda Building from
rental property to self-owned property.
(9) Fixed assets
(1) Change of fixed assets and accumulated depreciations:
Balance of book
Balance of
value at Increased this Decreased this
Items book value at
beginning of term term
end of term
term
I. Total value of original 384,511,171.89 71,991,445.39 6,508,785.19 449,993,832.09
43
Balance of book
Balance of
value at Increased this Decreased this
Items book value at
beginning of term term
end of term
term
fixed assets
1. Houses & buildings 212,269,992.86 26,063,985.85 1,382,131.05 236,951,847.66
2. Machinery 132,090,633.96 41,402,155.32 3,304,418.23 170,188,371.05
3. Automobile 11,248,300.78 215,816.02 12,680.00 11,451,436.80
4. Electronics and other 4,309,488.20 1,809,555.91 31,402,176.58
28,902,244.29
devices
II. Total of accumulative 6,107,321.95 4,994,006.37 143,672,376.86
142,559,061.28
depreciation
1. Houses & buildings 28,895,411.02 2,959,567.25 890,903.49 30,964,074.78
2. Machinery 91,185,236.25 1,570,094.52 2,927,229.04 89,828,101.73
3. Automobile 6,883,467.49 344,613.42 7,228,080.91
4. Electronics and other 1,233,046.76 1,175,873.84 15,652,119.44
15,594,946.52
devices
III. Total of fixed asset net 306,321,455.23
241,952,110.61 65,884,123.44 1,514,778.82
value
1. Houses & buildings 183,374,581.84 23,104,418.60 491,227.56 205,987,772.88
2. Machinery 40,905,397.71 39,832,060.80 377,189.19 80,360,269.32
3. Automobile 4,364,833.29 -128,797.40 12,680.00 4,223,355.89
4. Electronics and other
13,307,297.77 3,076,441.44 633,682.07 15,750,057.14
devices
IV. Total of accumulative
fixed assets impairment 1,397,396.09 1,392,125.89
provision 5,270.20
1. Houses & buildings
2. Machinery 1,397,396.09 5,270.20 1,392,125.89
3. Automobile
4. Electronics and other
devices
V. Total of fixed asset book
240,554,714.52 65,884,123.44 1,509,508.62 304,929,329.34
value
1. Houses & buildings 183,374,581.84 23,104,418.60 491,227.56 205,987,772.88
2. Machinery 39,508,001.62 39,832,060.80 371,918.99 78,968,143.43
3. Automobile 4,364,833.29 -128,797.40 12,680.00 4,223,355.89
4. Electronics and other
13,307,297.77 3,076,441.44 633,682.07 15,750,057.14
devices
Note 1: RMB6,107,321.95 of depreciation provided this term.
Note 2: The original value of fixed asset increased by RMB71,991,445.39, includes: retrieving of credit
in term of property by Decoration Co. with amount of RMB24,197,300.00; construction-in-process
transferred to fixed asset with amount of RMB42,564,361.92; and investment properties adjusted to
self-use, and newly purchased properties.
Note 3: Original value of fixed assets reduced by RMB6,508,785.19, mainly caused by disposal,
44
discarding of fixed assets.
(2) Property license not obtained yet:
Description of Original book Accumulated Net book
Categories Notes
property value depreciation: value
Idle, under
Houses & Houses in
686,672.00 58,366.95 628,305.05 procedures of
buildings Urumuqi
property certificate
Houses & Multi-function Under procedures of
4,095,350.26 1,493,500.15 2,601,850.11
buildings building property certificate
Houses & Under procedures of
Office building 6,769,642.00 2,495,288.56 4,274,353.44
buildings property certificate
Houses & Under procedures of
Workshop B-1 18,966,977.90 4,803,057.94 14,163,919.96
buildings property certificate
Houses & Under procedures of
Workshop B-2 6,495,786.15 1,644,944.87 4,850,841.28
buildings property certificate
Houses & Dalian World Under procedures of
24,197,300.00 24,197,300.00
buildings Trade Tower property certificate
Total 61,211,728.31 10,495,158.47 50,716,569.84
(10) Construction in process
(1) Construction in process:
Balance of book value at beginning of
Balance of book value at end of term
term
Items
Impairment Net book Impairment Net book
Amount Amount
provision value provision value
Phase I pipes,
11,073,061.61 11,073,061.61 9,573,061.61 9,573,061.61
roads, and fence
Equipment to be
37,192,046.30 37,192,046.30
reinstalled
Equipment to be
4,753,264.02 4,753,264.02 8,943,256.88 8,943,256.88
installed
Fangda Nanfang
Science & Tech 9,225,304.29 9,225,304.29
Garden
Others 1,623,014.94 1,623,014.94 1,054,015.85 1,054,015.85
Total 26,674,644.86 26,674,644.86 56,762,380.64 56,762,380.64
A、 Profile of major construction in process and changes
Initial ammount Increased this term
Fund
Project Budget Incl. Interest Incl. Interest
recourse Amount Amount
capitalization capitalization
Phase I pipes,
roads, and RMB9 mil. Independent 9,573,061.61 1,500,000.00
fence
Fangda
Nanfang
9,225,304.29
Science & RMB115.05
Tech Garden mil. recruited
Equipment
to be 37,192,046.30 220,835.88
reinstalled
45
Total 46,765,107.91 10,946,141.17
(Continue)
Decreased this term Amount at end of term
Incl. % of
Project Transferred to Incl. Interest investment
Amount Amount on budget
fixed asset capitalization
this period
Phase I pipes, roads,
and fence 11,073,061.61 123%
Fangda Nanfang
Science & Tech 9,225,304.29 8.01%
Garden
Equipment to be
37,412,882.18 37,412,882.18
reinstalled
Total 37,412,882.18 37,412,882.18 20,298,365.9
A、 No impairment occurred about construction-in-process at end of report term
(11) Fixed asset disposal
Balance of book value Balance of book value Reason of transferring
Items
at end of term at beginning of term to disposal
Fixed asset to be
1,442,705.89 586,285.67 to be discarded
discarded
Total 1,442,705.89 586,285.67
(12) Intangible assets and development expenses
A、 Intangible assets
Balance of
Balance of book
book value at Increased this Decreased
Items value at end of
beginning of term this term
term
term
I. Total of intangible asset initial value 137,634,777.72 650,764.65 138,285,542.37
Land using rights of Fangda Town (Phase I)
8,543,250.00 8,543,250.00
(Note 2)
Land using rights of Fangda Town (Phase II)
4,783,050.00 4,783,050.00
(Note 3)
Land using rights of Fangda Science & Tech
Garden located in Gaoxin Road, Nanchang 11,064,548.41 11,064,548.41
(Note 4)
Land using rights of Shenyang Fangda (Note
42,038,791.23 42,038,791.23
5)
Land using rights in Dongguan (Note 6) 40,006,806.75 34,659.00 40,041,465.75
Patent and classified tech 27,380,919.89 453,886.00 27,834,805.89
Computer software 3,817,411.44 162,219.65 3,979,631.09
II. Total of intangible asset
23,104,199.57 2,583,514.27 25,687,713.84
amortization
46
Balance of
Balance of book
book value at Increased this Decreased
Items value at end of
beginning of term this term
term
term
Fangda Town land using right (Phase I) 3,901,567.76 72,715.68 3,974,283.44
Fangda Town land using right (Phase III) 1,331,282.25 47,830.50 1,379,112.75
Land using rights of Fangda Science & Tech
1,198,529.24 130,597.61 1,329,126.85
Garden located on Gaoxin Road, Nanchang
Land using rights of Shenyang Fangda 2,585,514.30 420,417.90 3,005,932.20
Land using rights in Dongguan 66,678.01 400,472.45 467,150.46
Patent and classified tech 12,591,549.48 1,293,099.65 13,884,649.13
Computer software 1,429,078.53 218,380.48 1,647,459.01
III. Total of book net value of
114,530,578.15 -1,932,749.62 112,597,828.53
intangible assets
Fangda Town land using right (Phase I) 4,641,682.24 -72,715.68 4,568,966.56
Fangda Town land using right (Phase III) 3,451,767.75 -47,830.50 3,403,937.25
Land using rights of Fangda Science & Tech
9,866,019.17 -130,597.61 9,735,421.56
Garden located on Gaoxin Road, Nanchang
Land using rights of Shenyang Fangda 39,453,276.93 -420,417.90 39,032,859.03
Land using rights in Dongguan 39,940,128.74 -365,813.45 39,574,315.29
Patent and classified tech 14,788,799.45 -839,213.65 13,949,585.80
Computer software 2,388,903.87 -56,160.83 2,332,743.04
IV. Total of accumulated intangible
asset impairment provisions
Fangda Town land using right (Phase I)
Fangda Town land using right (Phase III)
Land using rights of Fangda Science & Tech
Garden located on Gaoxin Road, Nanchang
Land using rights of Shenyang Fangda
Land using rights in Dongguan
Patent and classified tech
Computer software
V. Total of intangible asset book value 114,530,578.15 -1,932,749.62 112,597,828.53
Fangda Town land using right (Phase I) 4,641,682.24 -72,715.68 4,568,966.56
Fangda Town land using right (Phase III) 3,451,767.75 -47,830.50 3,403,937.25
Land using rights of Fangda Science & Tech
9,866,019.17 -130,597.61 9,735,421.56
Garden located on Gaoxin Road, Nanchang
Land using rights of Shenyang Fangda 39,453,276.93 -420,417.90 39,032,859.03
Land using rights in Dongguan 39,940,128.74 -362,373.26 39,577,755.48
Patent and classified tech 14,788,799.45 -842,653.84 13,946,145.61
Computer software 2,388,903.87 -56,160.83 2,332,743.04
Note 1: RMB2,583,514.27 amortized in the report term.
47
Note 2: In 1995, Hengxiang Jingfa Co. inputted 3,797.40 square meters of land valued
RMB8,543,250.00 to the Company when the Company was incorporated. The land was verified by
Shenzhen Asset Appraisal Firm with the appraisal report 深资综评报字[1995]第 20 号 to value of
RMB8,543,250.00. .
Note 3: According to contract 深地合字(97)012 号 engaged between the Company and Shenzhen
Bureau of Land Planning, the Company purchased the land using rights attached to land of 15,943.60
square meters with Ref. number T405-008 by RMB4,783,050.00.
Note 4: In March 2003, according to the contract engaged between Jiangxi Nanchang High-tech
Industry Zone Administration Committee and the Company, Fangda New Material Co., Ltd. had
purchased the land of 177,047.14 square meters to the west of Aixi Lake and north of Gaoxin Road, with
price of RMB10,622,828.28.
Note 5: Shenyang Fangda land using right was inputted by Shenyang Hunnan New District
National Asset Administration Co., Ltd. – the minority shareholder, to Shenyang Fangda in term of
investment.
Note 6: According to the “Land Using Right Contract” entered by Guangdong Dongguan National
Land Resource Bureau and Dongguan New Material Co., Ltd. – one of the subsidiaries of the Company,
the Company purchased the land using right of 66666 square meters (编号 2010T107 号) with
RMB40,006,806.75.
A、 Expenditures of development projects
Decreased this term
Balance of
Recognized Balance of
book value at Increased Accounted into
Items as book value at
beginning of this term current income
intangible end of term
term account
asset
R&D expense 1,182,970.28 151,364.02 429,201.00 905,133.30
Total 1,182,970.28 151,364.02 429,201.00 905,133.30
Note 1: Intangible asset formed by R&D accounted for 11.07% of the total intangible assets.
(13) Goodwill
Balance of Balance of
Impairment
book value Increased Decreased book value
Name of the Companies provision at
at beginning this term this term at end of
end of term
of term term
Shenzhen Woke 8,197,817.29 8,197,817.29
Fangda Yide Co. 746,519.62 746,519.62 746,519.62
Total 8,944,336.91 8,944,336.91 746,519.62
Note 1: The Company acquired the 100% control power over Shenzhen Woke Co. by merger of
enterprise under common control in May 2007. The difference between the initial investment cost and
recognizable fair value of the investee has formed the goodwill of RMB8,197,817.29. No evidence of
48
impairment shown with Shenzhen Woke Co. thus no impairment provision was provided.
Note 2: The Company acquired the minority share equities of Fangda Yide Co. in August 2007. The
difference between the initial investment cost and recognizable fair value of the investee has formed the
goodwill of RMB746,519.62. For Fangda Yide was not in good business operation for successive years,
impairment provision has been provided fully upon the goodwill.
(14) Long-term amortizable expenses
Balance of Balance of
Other
book value Increased Amortized book value
Items decrease of
at beginning this term this term at end of
this term
of term term
Upgrading of workshop
rented by Fangda
2,202,981.44 33,750.00 115,293.52 2,121,437.92
Decoration Nanchang
Branch
Upgrading of workshop
rented by Fangda 623,212.27 69,318.20 553,894.07
Decoration
Upgrading of workshop
rented by Fangda
235,877.94 50,545.28 185,332.66
Decoration Sanhe
Branch
Total 3,062,071.65 33,750.00 235,157.00 2,860,664.65
(15) Deferred income tax asset and deferred income tax liabilities
(1) Deferred income tax asset and deferred income tax liabilities already recognized
A. Details of un-neutralized deferred income tax asset and liabilities:
Balance of book value at beginning of
Balance of book value at end of term
term
Items Deductible Deductible
Deferred income Deferred income
provisional provisional
tax asset tax asset
differences differences
Asset impairment
146,852,113.42 25,876,748.35 153,793,200.88 26,448,912.08
provision
Openning expenses 58,599.00 14,649.75 83,043.87 12,456.58
Neutralizable losses 20,598,555.61 4,944,458.31 20,406,633.15 4,898,982.91
Expectible liabilities 883,881.35 132,582.20 347,657.52 52,148.63
Others 3,908,732.47 488,591.56
Total 172,301,881.85 31,457,030.17 174,630,535.42 31,412,500.20
Balance of book value at beginning of
Items Balance of book value at end of term
term
49
Taxable Taxable
Deferred income Deferred income
provisional provisional
tax liability tax liability
difference difference
Adjustment of
investment property 121,837,272.54 28,930,168.72 115,022,192.93 27,342,717.60
fair value
Adjustment of
sellable financial 3,912,000.00 938,880.00 3,947,000.00 947,280.00
asset fair value
Change of fair value
caused by share - -
option contracts
Total 125,749,272.54 29,869,048.72 118,969,192.93 28,289,997.60
(2) Particulars about deductible provisional difference or losses by non-recognized deferred income
tax assets
Items End of term Beginning of term
Asset impairment provision 26,881,141.42 27,185,509.66
Deductible losses 69,848,705.56 66,536,383.69
Total 96,729,846.98 93,721,893.35
Note: In coming periods, none of Fangda Yide, Fangda Guoke, and Fangda Aluminum may
possibly acquire taxable gains enough to offset deferred income tax asset.
(3) Deductible losses of non-recognized deferred income tax assets will due in following years:
Year End of term Beginning of term Note
2011 3,197,346.04 Without
2012 23,845,037.38 11,917,349.15 considering
2013 12,126,192.06 12,126,192.06 earlier
2014 10,350,213.83 21,401,565.96 termination of
2015 17,726,273.12 17,893,930.48 subsidiaries
2016 5,800,989.17
Total 69,848,705.56 66,536,383.69
(16) Asset impairment provision
Balance of Decreased this term Balance of
book value at Increased
Items book value at
beginning of this term Written back Transferred end of term
term
Bad debt provision 141,005,552.36 6,264,548.84 9,951,402.04 4,069.47 137,314,629.69
Inventory
impairment
provision 2,450,227.07 63,528.93 2,386,698.14
Fixed asset
impairment
provision 1,397,396.09 5,270.20 1,392,125.89
Goodwill
impairment 746,519.62 746,519.62
50
Balance of Decreased this term Balance of
book value at Increased
Items book value at
beginning of this term Written back Transferred end of term
term
provision
Total 145,599,695.14 6,264,548.84 9,951,402.04 72,868.60 141,839,973.34
(17) Assets with constrained ownership
Assets with constrained ownership are:
Balance of
Balance of Reason of
Category of book value at Increased Decreased
book value at restriction on
assets beginning of this term this term
end of term property rights
term
Asset under guarantee
Fangda Tech
Building (The 184,286,809.08 4,492,927.66 1,769,194.58 187,010,542.16 Loan pledge
part for rent)
Fangda Tech
Building (The 13,791,148.03 1,955,646.58 175,479.38 15,571,315.23 Loan pledge
part for own use)
Total 184,286,809.08 4,492,927.66 1,769,194.58 187,010,542.16
(18) Short-term loans
Short-term loans are:
Balance of book value Balance of book value at
Categories Note
at end of term beginning of term
Borrowings with
200,000,000.00 200,000,000.00 Note 1
security and guarantee
Guarantee loan 183,000,000.00 197,000,000.00 Note 2
Total 383,000,000.00 397,000,000.00
Note 1: The short-term borrowing of RMB200 million was secured by Fangda Tech Building
(limited to RMB113 million), and guaranteed by Fangda Decoration (limited to RMB50 million),
Fangda Automatic (limited to RMB50 million), and Fangda New Material (limited to RMB50 million).
Note 2: In the guaranteed loans, RMB73 million was the short-term loans obtained by Fangda New
Material and secured by the Company; the rest RMB90 million was the short-term loans obtained by
Fangda Decoration and secured by the Company. RMB20 million was the short-term loans obtained by
Fangda Automatic. For details please go to Note VI (II) 2.
(19) Notes payable
Balance of book value at end of Balance of book value at
Categories
term beginning of term
Bank acceptance 35,760,723.63 59,241,926.92
Commercial acceptance 5,891,845.14 984,091.73
51
Total 41,652,568.77 60,226,018.65
Note 1: Amount due in next fiscal term will be RMB41,652,568.77.
Note 2: The outstanding book value of notes payable has increased by 30.84% over the report term,
which was caused by payment disbursed for notes.
(20) Account payable
(1) As of June 30, 2011, payable accounts with large amount and aged over one year:
Supplier Amount Description Reason of overdue
Fangda Building Not claimed by the
1,278,967.69 Project payment
provisional booking creditor
Deawoo Group (South Not claimed by the
900,000.00 Trade
Korea) creditor
Fujian Quanzhou
Not claimed by the
Sansong Ceramic 880,000.00 Trade
creditor
Development Co., Ltd.
Total 3,058,967.69
(2) No payables due to shareholders with 5% or above shares of the Company, nor any related
parties.
(21) Prepayment received
（1） Advances received with large amount and aged over one year
Causation of not
Items Amount Date of occur Contents settled
Line No.2 of Advances for Project not
Wuhan Metro 7,640,456.00 2010.01 project works commenced
Total 7,640,456.00
(2) No prepayment received from shareholders with 5% or over shares of the Company, nor related
parties.
(22) Employees’ wage payable
Details of remunerations payable to the employees
Balance of
Balance of
book value at Increased this Decreased
Items book value at
beginning of term this term
end of term
term
Wage, bonus, allowance and
10,008,820.62 53,273,766.37 56,174,271.26 7,108,315.73
subsidies
Employee welfare 466,625.62 466,625.62 -
Social insurance 2,267,776.02 2,267,635.52 140.50
Incl. Medical insurance 547,030.98 547,030.98 -
Basic pension 1,580,801.87 1,580,661.37 140.50
Unemployment insurance 53,951.90 53,951.90 -
Labor injury insurance 60,035.28 60,035.28 -
52
Balance of
Balance of
book value at Increased this Decreased
Items book value at
beginning of term this term
end of term
term
Breeding insurance 25,955.99 25,955.99 -
Housing fund 959,282.60 959,282.60 -
Dismissing policy - - -
Trade union and education
4,038,900.38 11,892.92 115,634.24 3,935,159.06
allowance
Non-monetary welfare 13,537.50 13,537.50 -
Compensations for disengagement
- - -
other than dismissing policy
Others - - -
Total 14,047,721.00 56,992,881.03 59,996,986.74 11,043,615.29
(23) Tax payable
Balance of book value at beginning
Items Balance of book value at end of term
of term
VAT -1,853,670.64 -9,822,981.98
Business tax 16,706,353.30 16,951,513.27
Enterprise income tax 8,146,210.93 10,240,451.93
Personal income tax 509,001.60 508,580.44
City maintenance and
1,732,308.43 1,795,117.16
construction tax
Land using tax 202,954.53 221,094.98
Property tax 663,829.27 700,416.21
Education surtax 843,302.31 874,485.65
Local education
35.64 1,299.11
surcharges
Other taxes 49,110.08 50,666.94
Total 26,999,435.45 21,520,643.71
(24) Interest payable
Balance of book value at beginning
Items Balance of book value at end of term
of term
Short-term borrowing
548,793.05 610,850.84
interests payable
Total 548,793.05 610,850.84
(25) Other account payable
(1) No other payables due to shareholders with 5% or above of shares of the Company, nor related
parties.
(2) Other payables with large amount in detail:
Balance of book value at end
Items Description
of term
53
Ningbo Lailai Energy-saving Doors 2,060,000.00
and Windows Co., Ltd. Deposit
Transportation of project works 1,825,428.09 Transportation
Jiangxi Changxing Logistics Co.,
Ltd. 1,550,250.37 Transportation payable
Jiangsu Tianyi Garment Co., Ltd. 1,500,000.00 Deposit
Offshore freight 1,340,245.56 Transportation payable
Total 8,275,924.02
(3) Large amount other payables aged over one year:
Balance of book
Items Description Reason of overdue
value at end of term
Ningbo Lailai
Energy-saving Doors and 2,060,000.00 Project deposit construction in process
Windows Co., Ltd.
Jiangsu Tianyi Garment Not claimed by the
1,500,000.00 Project deposit
Co., Ltd. creditor
Shenzhen Yachang Color
950,000.00 Deposit On rental
Printing Co., Ltd.
Total 4,510,000.00
(26) Expectable liabilities
Balance of book value at end of Balance of book value at beginning
Categories
term of term
Maintenance expenses 883,881.35 347,657.52
Total 883,881.35 347,657.52
(27) Other non-recurring liabilities
Balance of book Balance of book
Items value at end of value at
term beginning of term
Application and demonstration project of LED lighting tech
334,850.00 720,000.00
(Note 1)
Optical crystal project (Note 2) 1,200,000.00 1,200,000.00
Environmental protection and energy saving project (Note 3) 500,000.00 500,000.00
Graphic grounding production and expanded chip production
500,000.00 500,000.00
(Note 4)
Purchasing of equipment for development of high-power
750,000.00 850,000.00
chips (Note 5)
Fund for optical products (Note 6) 480,000.00 480,000.00
High-power-low-attenuation plug in LED technologies 800,000.00
Total 4,564,850.00 4,250,000.00
Note 1: According to document 粤科计字[2008]145 号 issued by Guangdong Department of
Science and Technologies, and Guangdong Department of Finance on November 24, 2008, Fangda
54
Guoke was assigned to undertake the 揹 emonstrative project of LED production technologies with the
government fund of RMB3.5 million. According to the agreement engaged between Fangda Guoke and
Shenzhen Technologies and Information Committee on January 12, 2010, and the contract 深科工贸信
计财字〔2009〕82 号, Shenzhen Technologies and Information Committee provided RMB1 million in
2010 to support the project led by Fangda Guoke.
Note 2: According to the contract engaged between Shenzhen Technologies and Information Bureau
and Fangda Guoke Co. (深科信（2009）202 号) in July 2009, the Bureau provided RMB1.2 million to
Fangda Guoke to support the development of “photon crystal production technologies”. As of end of this
term, this project is under development.
Note 3: According to the notice 沈新区委发（2009）52 号 issued by Shenyang Hunnan New Zone
Administration Committee on August 26, 2009, the Committee provided RMB500 thousand to Shenyang
Fangda to support the energy-saving projects. As of June 30, 2011, this project was not through
acceptance inspection yet.
Note 4: According to the notice 沈新区委发（2009）72 号 issued by Shenyang Hunnan New Zone
Administration Committee on August 26, 2009, the Committee provided RMB500 thousand to Shenyang
Fangda to support the production technologies of graphic background and extension and chips projects.
As of June 30, 2011, this project was not through acceptance inspection yet.
Note 5. According to document 深科信〔2005〕401 号, Shenzhen Bureau of Finance and Fangda
Guoke entered the “Contract on using of technical development fund”. As of December 31, 2008,
Fangda Guoke has received the fund for purchasing of equipment in two payment amounted to RMB1
million. In the report term, Fangda Guoke has recognized the government subsidy of RMB100,000.00
against the expected useful life of the equipment and amortizing of intangible assets. As of June 30, 2011,
the government subsidy recognized was accumulated to RMB250,000.00.
Note 6. According to document 沈信产发〔2008〕27 号 issued by Shenyang Information Industry
Bureau and Shenyang Bureau of Finance on July 17, 2008, Shenyang Fangda received RMB480
thousand of subsidy to support the production technologies of graphic background and extension and
chips projects. As of June 30, 2011, this project was not through acceptance inspection yet.
Note 7: According to the “Scientific and technological project contract of Shenyang High-tech
Zone” engaged between Shenyang High-tech Development Zone Administration Committee and
Shanyang Fangda in November 2010, the Committee was about to provide finance of RMB800 thousand
to Shenyang Fangda for purchasing of equipment. As of June 30, 2011, this project was not through
acceptance inspection yet.
(28) Share capital
(1) Change of capital shares in the period
Balance of book value at Balance of book value
Changed in current term
beginning of term at end of term
Class of
shareholding Issuing Transferred
Amount of Bonus Amount of
Proportion of new from Others Sub-total Proportion
shares shares shares
shares reserves
55
Balance of book value at Balance of book value
Changed in current term
beginning of term at end of term
Class of
shareholding Issuing Transferred
Amount of Bonus Amount of
Proportion of new from Others Sub-total Proportion
shares shares shares
shares reserves
I. Shares with
trading limited
conditions
1. State-owned
shares
2. National legal
person shares
3. Other domestic
48,014,828 9.52%
shares 24,007,414 24,007,414 72,022,242 9.52%
Incl.
Non-government
18,200,000 3.61%
domestic legal
person shares 9,100,000 9,100,000 27,300,000 3.61%
Domestic
natural person 29,814,828 5.91%
shares 14,907,414 14,907,414 44,722,242 5.91%
4. Overseas
shareholding
Incl. Shares held
by foreign legal
persons
Foreign
natural person
shares
Total of
48,014,828 9.52%
conditional shares 24,007,414 24,007,414 72,022,242 9.52%
II. Shares without
trading limited
conditions
1. Common shares
232,624,317 46.10%
in RMB 116,312,158 116,312,158 348,936,475 46.10%
2. Foreign shares
223,967,459 44.38%
listed at home 111,983,729 111,983,729 335,951,188 44.38%
3. Foreign shares
placed abroad
4. Others
Total of
unconditional 456,591,776 90.48%
shares 228,295,887 228,295,887 684,887,663 90.48%
Total of capital
504,606,604 100.00%
shares 252,303,301 252,303,301 756,909,905 100.00%
Note 1. On March 25, 2011, the Shareholders’ Meeting 2010 adopted the dividend and
capitalizing plan of 2010. In which the plan for capitalizing of common reserves was:
Upon the total capital shares of 504,606,604 as of December 31, 2010, capital reserves were to
56
capitalized on 5 to 10 basis, and the capital shares were increased to 756,909,90 thereafter. This has been
approved by the authority with document 深 科 工 贸 信 资 字 [2011]0755 号 , and re-registration
procedures are in process.
Note 3: As of June 30, 2011, the book balance of conditional shares was 72,022,242, including
71,917,800 shares could be released on July 15, 2011. The rest are executives’ shares.
(29) Capital reserves
Change of capital reserves:
Balance of book Balance of
Increased Decreased this
Items value at book value at
this term term
beginning of term end of term
Share capital premium 290,541,523.48 252,303,301.00 38,238,222.48
Other capital reserves 43,892,491.44 26,600.00 43,865,891.44
Total 334,434,014.92 252,329,901.00 82,104,113.92
Note 1. Capital reserves – share capital premium has decreased by RMB252,303,301.00, which was
caused by capitalizing of common reserves according to the resolutions adopted by the Shareholders’
Meeting 2010.
Note 2. Other capital reserves has reduced by RMB26,600.00, which was net decreased amount of
fair value of available-to-sale financial assets after deducting of income tax.
(30) Surplus reserves
Change of surplus reserves:
Balance of book Balance of
Increased this Decreased this
Items value at book value at
term term
beginning of term end of term
Statutory surplus
17,834,977.97 17,834,977.97
reserves
Total 17,834,977.97 17,834,977.97
(31) Retained profit
Change of retained profit:
Items Current term
Profit retained from end of previous period 153,115,142.18
Plus: Adjusted amount of retained profit at
beginning of year (-“ for decrease)
Profit not distributed at the beginning of term 153,115,142.18
Plus: Net profit attributable to owners of the
parent company 46,094,698.26
Attributable profit 199,209,840.44
Less: Statutory surplus reserves
Optional surplus reserves
Common risk provisions
Common share dividend payable
57
Items Current term
Common share dividend transferred to
capital share
Retained profit at the end of term 199,209,840.44
(32) Operational turnover and costs
(1) Details of business turnover and costs:
Amount occurred in
Items Occurred current term
same period last year
Turnover 579,154,393.68 423,379,762.74
Incl. Main business turnover 556,233,228.08 401,760,236.81
Other business income 22,921,165.60 21,619,525.93
Operation cost 460,275,267.38 339,167,650.59
Incl. Main business cost 449,536,349.29 330,318,126.57
Other business cost 10,738,918.09 8,849,524.02
(2) Main business turnover classified on industries:
Amount occurred in
Occurred current term
same period last year
Industries
Operation Operation
Turnover Turnover
cost cost
325,621,513.69 261,964,502.91
Metal production
485,234,819.90 388,995,725.08
Railroad industry 63,530,580.66 53,584,619.99 71,094,433.93 58,550,560.42
Lighting product 7,467,827.52 6,956,004.22 5,044,289.18 9,803,063.24
industry
401,760,236.81 330,318,126.57
Total
556,233,228.08 449,536,349.29
(3) Business segments on districts:
Amount occurred in
Occurred current term
same period last year
Name of districts
Operation Operation
Turnover Turnover
cost cost
390,733,338.54 321,634,382.27
Domestic
492,995,212.20 408,525,736.36
Overseas 63,238,015.88 41,010,612.93 11,026,898.27 8,683,744.30
401,760,236.81 330,318,126.57
Total
556,233,228.08 449,536,349.29
(4) Turnover contributed by top 5 clients
Ranks of clients Occurred current term Portion in total turnover
No.1 70,628,120.30 12.20%
No.2 54,382,714.15 9.39%
No.3 47,004,202.35 8.12%
No.4 44,315,598.32 7.65%
58
No.5 41,646,076.07 7.19%
Total 257,976,711.19 44.54％
(33) Turnover from construction contracts
Contracts accounted over 10% of the total business turnover of current period:
Accumulated
Cause for
Accumulated gross profit Amount Predicted
Project Total amount predicted
costs occurred recognized settled loss
loss
(“-“ for loss)
Block
1-5 of
Sanya 145,977,668.00 88,508,750.60 35,213,895.00 61,600,466.00
Phoenix
Island
Total 145,977,668.00 88,508,750.60 35,213,895.00 61,600,466.00 -
(34) Business tax and surcharge
Amount occurred in
Type of taxes Occurred current term Rate
same period last year
Business tax 6,816,196.08 5,739,170.20 See Note III - 1
City maintenance
931,385.50 428,473.80 See Note III - 1
and construction tax
Education surtax 471,297.96 423,369.34 See Note III - 1
Property tax 329,605.54
Others 231,740.23 677,371.86
Total 8,780,225.32 7,268,385.20
(35) Sales expense
Amount occurred in same
Items Occurred current term
period last year
Manpower 4,557,707.69 3,713,005.35
Freight and misc. 3,564,345.80 2,237,294.51
After-sales 600.00 425,407.91
Business trips 1,385,153.93 1,377,579.18
Business reception expenses 845,239.04 1,349,640.35
Material consumable 224,038.91 719,781.97
Office expenses 115,370.20 55,189.33
Advertisement and exhibition 234,903.52 835,252.86
Rental 485,846.59 282,568.71
Testing 292,219.66 109,453.05
Consulting 35,800.00 0.00
Misc. expenses 2,296,497.08 1,627,882.13
59
Total 14,037,722.42 12,733,055.35
Note: Accrual amount of current period increased by 22.75% over the same period of last year,
which was caused by increase of labor and transportation expenses.
(36) Administrative expense
Amount occurred in same
Items Occurred current term
period last year
Manpower 21,071,160.19 18,242,666.42
Depreciation and amortization 6,005,472.48 4,334,810.59
Agencies 1,790,279.20 1,636,653.29
Tax 2,397,206.79 2,680,214.84
Maintenance fee 1,104,675.09 2,163,150.57
Water and electricity 1,012,462.22 911,556.36
Office expenses 411,594.25 511,440.89
Business trips 1,659,945.51 753,269.37
Business reception expenses 1,809,867.94 1,050,093.26
Rental 667,676.38 379,777.11
Lawsuit 2,227,852.55 195,530.00
Material consumable 375,819.16 200,561.55
Property management fee 753,982.30 546,514.78
Misc. expenses 4,937,310.92 6,115,662.48
Total 46,225,304.98 39,721,901.51
Note: Accrual amount of current period increased by 16.37% over the same period of last year,
which was caused by increase of labor expenses.
(37) Financial expenses
Amount occurred in same
Items Occurred current term
period last year
Interest expense 10,181,079.96 8,949,946.50
Less: Incoming interests 2,965,007.59 655,857.65
Plus: Exchange loss 986,590.79 236,298.81
Less: Exchange gain - 9,323.92
Commission charges and others 605,123.12 1,668,533.39
Total 8,807,786.28 10,189,597.13
(38) Income from change of fair value
Source of income from fluctuation of Amount occurred in same
Occurred current term
fair value period last year
Investment property measured at fair
value 5,082,327.66 6,553,456.32
60
Total 5,082,327.66 6,553,456.32
(39) Investment income
(1) Investment income by resources:
Amount occurred in
Sources of investment gains Occurred current term
same period last year
Investment gains from disposal of
available-for-sale financial assets 3,176,516.97
Other investment income 15,342.47 -2,450.00
Total 15,342.47 3,174,066.97
Note: Accrual amount of current period increased by 99.51% over the same period of last year,
which was caused by greater gains from disposal of available-for-sale financial assets.
(40) Asset impairment loss
Occurred current Amount occurred in
Items
term same period last year
Bad debt losses -3,686,853.20 854,610.52
Total -3,686,853.20 854,610.52
(41) Non-operational income
Occurred current Amount occurred in Carried to current
Items
term same period last year contingent gain/loss
Gains from disposal of
non-current assets 498.67 10,727,318.70 498.67
Incl. Gains from disposal of
fixed assets 498.67 4,181,049.33 498.67
Gains from debt reorganization 20,603.21
Government subsidies 63,800.00 3,673,500.00 63,800.00
Penalty income 78,830.00 86,341.65 78,830.00
Income from penalties 5,000.00 4,000.00 5,000.00
Payable account not able to be
paid 1,840.75 88,520.46 1,840.75
Others 5,311,831.22 143,763.53 5,311,831.22
Total 5,461,800.64 14,744,047.55 5,461,800.64
Note 1: Other details are: (1) Fangda Decoration retrieved the overdue project payment in term
of property, including RMB4,863,766.62 of interests. (2) Disposal of waste material was
RMB392,611.92.
Note 2. Non-operational gains decreased by 62.96% comparing with the same period of last year,
which was mainly caused by receiving of site moving compensation by Fangda Aluminum last year.
61
(42) Non-operational expenditure
Occurred current Amount occurred in Carried to current
Items
term same period last year contingent gain/loss
Total of loss from disposal of
non-current assets 247,866.36 301,542.48 247,866.36
Incl. Loss from disposal of fixed
assets 247,866.36 301,542.48 247,866.36
Losses from debt restructuring 227,555.80
Penalty paid 1,360.00
Outgoing donations 203,000.00 572,762.20 203,000.00
Others 139,007.59 27,391.94 139,007.59
Total 589,873.95 1,130,612.42 589,873.95
(43) Income tax expenses
Composition of income tax expenses:
Amount occurred in same
Items Occurred current term
period last year
Income tax calculated according to the law
and regulations of current term 8,336,787.87 3,500,469.18
Deferred income tax 2,227,649.27 2,985,816.65
Total 10,564,437.14 6,486,285.83
Note 1. Income tax expenses of RMB8,336,787.87 was incurred by Fangda Decoration, Fangda
New Materials, and Fangda Automatic.
Note 2. Deferred income tax was mainly the taxable temporary differences caused by fluctuation of
fair value of investment property of the term.
(44) Calculation formula of basic earnings per share and diluted earnings per share
According to “Information Disclosure Rules No.9 – Calculation and disclosure of net earnings on
asset and earnings per share” ( 中 国 证 券 监 督 管 理 委 员 会 公 告 [2010]2 号 ) and “Explanation
Announcement of Information Disclosure No. 1 – Non-recurring gain/loss” (中国证券监督管理委员会
公告[2008]43 号), the earnings per share is calculated as the following:
1. Calculation outcome
Current term Same period of last term
Profit of the report period Basic Diluted Basic Diluted
earnings per earnings earnings per earnings per
share per share share share
Net profit attributable to common share
0.061 0.061 0.049 0.049
holders of the Company (I)
Net profit attributable to common share
holders of the Company after deducting of 0.051 0.051 0.019 0.019
non-recurring gain/loss (II)
62
2. Formula of earnings per share
Same period of
Items No. Current term
last term
Net profit attributable to common shareholders of the
1 46,205,772.95 33,608,581.42
Company
Non-recurring gain/loss attributable to the net profit of
common shareholders of the parent company after 2 7,709,204.65 20,442,939.40
deducting of income tax influences
Net profit attributable to common share holders of the
3=1-2 38,385,493.61 13,165,642.02
Company after deducting of non-recurring gain/loss
Total of shares at beginning of year 4 504,606,604 680,177,106
Amount of shares increased by capitalizing of common
5 252,303,301
reserves or share dividend
6
Amount of shares increased by issuing of new shares or
6
transforming of debt to shares
6
7
The number of months from the next month of share
increasing by issuing of new shares or transferring of 7
debts to the end of report term
7
Amount of shares decreased by repurchasing of shares in
8
the report term
The number of months since the next month of share
9
decreasing to the end of report term
Amount of shares reduced 10
Number of months in the report term 11 12 12
12=4+5+6×7
Weighted average of common shares issued outside (II) 756,909,905 680,177,106
÷11-8×9÷11-10
Weighted average of common shares issued outside
13
adjusted for merger under common control (I)
Basic earning per share (I) 14=1÷12 0.061 0.049
Basic earning per share (II) 15=3÷12 0.051 0.019
Diluting potential common share interests recognized as
16 - -
expenses
Income tax rate 17 24% 22%
Transformation fees 18
Amount of shares increased by transforming or exercising
19
of company bond, subscription certificate, or share option
20=[1+(16-18)×
Diluted earning per share (I) 0.061 0.049
(100%-17)]÷(13+19)
21=[3+(16-18)
Diluted earning per share (II) 0.051 0.019
×(100%-17)]÷(12+19)
(1) Basic earnings per share
Basic earnings per share=P0÷S
S= S0＋S1＋Si×Mi÷M0– Sj×Mj÷M0-Sk
P0 = Net profit attributable to the common shareholders or net profit attributable to the common
shareholder after deducting of non-recurring gain/loss. S = weighted average of common shares issued in
the market S0 = Total shares at the beginning of term S1 = increased shares due to capitalizing of
63
common reserves or dividend Si = shares increased due to placing of new shares or transferred from debt
in the report term Sj = shares decreased due to actions such as repurchasing in the report term SK =
the amount of shares reduced M0 = number of months of the report term Mi = accumulative number of
months from the next month of share increasing to the end of report term; Mj = accumulative number of
months from the next month of share decreasing to the end of report term.
(2) Diluted earning per share
Diluted earning per share=P1/(S0＋S1＋Si×Mi÷M0–Sj×Mj÷M0–Sk+ weighted average of
common shares increased by share option certificates, future option certificates, and convertible bonds)
P1 = net profit attributable to common shareholders of the Company, or net profit attributable to
common shareholders after deducting of non-recurring gain/loss, with considering the influences of
diluting potential common shares, and adjusted according to Enterprise Accounting Standard and related
regulations. At calculating of diluted earnings per share, the Company has considered the influences
of the entire dilute potential common shares, until the diluted earnings per share had reached the
minimum level.
3. None of the amounts of common shares issued outside or potential common shares has
greatly changed during the balance sheet date to this report is approved, no potential
common shares with potential dilution.
64
(45) Other misc. incomes
Amount occurred
Occurred
Items in same period last
current term
year
1. Gains (losses) from available-for-sale financial assets -35,000.00 -346,410.96
Less: Income tax influence of available-for-sale financial
-8,400.00 -21,210.41
assets
Net amount written into other gains and transferred
2,694,453.18
into gain/loss in previous terms
Sub-total -26,600.00 -3,019,653.73
2. Shares in other gains of investees on equity basis
Less: Income tax influence of shares in other gains of
investees on equity basis
Net amount written into other gains and transferred
into gain/loss in previous terms
Sub-total
3. Amount of gains (or losses) from cash flow hedge
instrument -1,648,500.00
Less: Income tax influence of cash flow hedge instruments
-217,125.00
Net amount written into other gains and transferred
2,845,166.75
into gain/loss in previous terms
Adjusted amount transferred to initial amount of the
0.00
target project
Subtotal -4,276,541.75
4. Difference from translating of foreign currency financial
statements
Less: Net amount of disposing overseas business and
transferred to current gain/loss
Sub-total
5. Others
Less: Income tax influence by other accounted into other
misc. incomes
Net amount accounted into other misc. income and
transferred into current gain/loss in previous terms
Sub-total
Total -26,600.00 -7,296,195.48
(46) Notes to the Cash Flow Statement
1. Other cash inflow related to operation
Amount of the Current Amount of the Previous
Items
Term Term
Interest income 1,869,222.17 1,470,819.53
Allowance income 68,663.64 4,623,500.00
Bidding deposit paid 17,176,039.63 13,991,502.00
65
Net amount of trade accounts 9,721,956.28 10,449,421.25
Others 6,010,447.94 9,014,591.68
Total 34,846,329.66 39,549,834.46
2. Other cash paid related to operation
Amount of the Current Amount of the Previous
Items
Term Term
Administrative expense 16,751,465.52 10,157,049.59
Sales expense 9,480,014.73 5,202,990.18
Deposits and securities 7,553,798.10 16,405,862.48
Individual borrowing 5,472,352.31 5,820,664.17
Deposit for draft, net 3,781,035.25 9,854,385.82
Others 20,296,798.83 10,586,694.56
Total 63,335,464.74 58,027,646.80
3. Other cash paid related to financing
Amount of the Current Amount of the Previous
Items
Term Term
Payment of share placing fee 2,978,629.66
Fee of share capital re-registration 111,983.72
Total 111,983.72 2,978,629.66
(47) Appendix of Cash Flow Statement
(1) Net profit adjusted to cash flow of business operation on indirect basis
Amount of the
Amount of the
Supplementary Info. same period of
Current Term
last year
1.Net profit adjusted to cash flow of operation:
Net profit 44,120,100.19 28,239,719.82
Plus: Asset impairment provision -3,686,853.20 854,610.52
Depreciation of fixed assets 6,107,321.46 4,653,198.98
Amortizing of intangible assets 2,586,954.46 2,122,682.15
Amortizing of long-term expenses 235,157.00
Loss from disposal of fixed assets, intangible assets, and other
-122,630.13
long-term assets (“-“ for gains) 247,367.69
Loss from fixed asset discard (“-“ for gains)
Loss from fluctuation of fair value (“-“ for gains) -5,082,327.66 -6,553,456.32
Financial expenses (“-“ for gains) 10,220,855.72 9,008,860.25
Investment loss (“-“ for gains) -15,342.47 -3,174,066.97
66
Amount of the
Amount of the
Supplementary Info. same period of
Current Term
last year
Decrease of deferred income tax asset (“-“ for increase) -44,529.97 -1,240,534.28
Increase deferred income tax asset (“-“ for decrease) 1,570,651.12 3,026,882.91
Decrease of inventory (“-“ for increase) 32,157,095.62 -31,020,490.97
Decrease of operational receivable items (“-“ for increase) -117,891,506.08 -71,345,047.83
Increase of operational payable items (“-“ for decrease) 17,314,765.64 26,022,948.81
其他 Others
Cash flow generated by business operation, net -12,160,290.48 -39,527,323.06
2. Major investment and financing activities not involving in
cash flow
Liabilities converted to capital
Convertible bond expire in 1 year
Fixed assets leased through financing
3. Change of cash and cash equivalents
Balance of cash at period end 415,709,113.55 498,849,443.70
Less: Initial balance of cash 468,878,715.15 210,823,550.83
Plus: Balance of cash equivalents at the period end
Less: Initial balance of cash equivalents
Net increasing of cash and cash equivalents -53,169,601.60 288,025,892.87
(2) Cash and cash equivalents
Amount at end
Items Initial ammount
of term
I. Cash 415,709,113.55 468,878,715.15
Incl: Cash in stock 19,572.06 13,898.14
Bank savings could be used at any time 415,689,541.49 468,864,140.47
Other monetary capital could be used at any time 676.54
Usable money in Central Bank
Money saved in associated financial bodies
Money from associated financial bodies
II. Cash equivalents
Incl. Bond investment due in 3 months
III. Balance of cash and cash equivalents at end of term 415,709,113.55 468,878,715.15
VI. Related parties and transactions
(1) Relationship
1． Main related parties of the Company
67
Voting
Registered Shareholding
Name of the Ownership Reg. Legal Business Organization power in
capital in the
parties type Add. representative property code the
(RMB0’000) Company
Company
Shenzhen
Banglin
Ltd. Industrial
Technologies Shenzhen Chen Jinwu 3,000.00 72984005-5 9.09% 9.09%
liability investment
Development
Co., Ltd.
Shenzhen
Shilihe Ltd. Industrial
Shenzhen Wang Shengguo 1,978.0992 72984450-7 2.36% 2.36%
Investment Co., liability investment
Ltd.
Hong Kong
Onforce Ltd. Industrial
HK N/A 1.63% 1.63%
International liability investment
Co., Ltd.
2． Particulars of the subsidiaries
Please see Note IV.
3． Other related parties
Name of the parties Relation with the Company Organization code
Shenzhen Fangda Special
Mr. Song Wenqing, Supervisor
Decoration Engineering Co., Ltd.
of the Company used to be
(former Shenzhen Fangda Special 19229492-X
Director of this company
Structure Co., Ltd.) (Fangda Special
(resigned on August 11, 2010)
Decoration)
Original supervisor of the
Song Wenqing Company (resigned on March
25, 2011)
(2) Related party transactions
1. Related contracting
Offer of contracting:
Name of Name of Category of Pricing basis Contract
Commence Termination
the the asset to be of amount
date Date
employer contractor offered contracting (RMB0’000)
Fangda Date of
Song Project Completion Agreement
winning in 772.94
Decoration Wenqing contracting of project price
bidding
Fangda Fangda Date of
Project Completion Agreement
Special winning in 2,323.08
Decoration Decoration contracting bidding
of project price
Note. Contract amounts in above table refer to the contracted projects in process in the report term.
68
2. Guarantees among the related parties
(1) Guarantees among the related companies within the consolidation range:
The The Amount Completed
Start date Due date
guarantor beneficiary guaranteed or not
24,000,000.00 Sept. 2 2010 Sept. 1 2011 No
Fangda
26,000,000.00 Sept. 2 2010 Sept. 1 2011 No
Decoration,
Fangda The 50,000,000.00 Sept. 2 2010 Sept. 1 2011 No
Automatic, Company 50,000,000.00 Sept. 3 2010 Sept. 2 2011 No
Fangda New
20,000,000.00 Sept 10, 2010 Sept. 9 2011 No
Material
30,000,000.00 Sept. 17 2010 Sept.16 2011 No
The Fangda
20,000,000.00 Feb. 1 2011 Feb.1 2012 No
Company Automatic
The Fangda
20,000,000.00 Sept 1 2010 Aug 1 2011 No
Company Decoration
The Fangda
30,000,000.00 Feb. 22 2011 Feb. 22 2012 No
Company Decoration
The Fangda
10,000,000.00 Mar. 4 2011 July 3 2011 No
Company Decoration
The Fangda
30,000,000.00 Mar 1, 2011 Mar 1, 2012 No
Company Decoration
16,000,000.00 Dec 20 2010 Dec 19 2011 No
The Fangda New 15,000,000.00 Jul 7 2011 Jul 7 2012 No
Company Material 15,000,000.00 Jul 12 2011 Jul 12 2012 No
27,000,000.00 Sept 29 2010 Sept 28 2011 No
Note: The above are associated guarantees involved in bank loans.
(2) As of the date of this report, Fangda Decoration has provided guarantees for the
contract engaged between the Company and its individual shareholders. The guarantee
involves with amount of RMB783.646 million.
VII. Contingent issues
(1) Major unsettled lawsuits
1. Major unsettled lawsuit and influences on financial status
Case
Plaintiff The defender The court Target amount Progress
description
Hainan Tianyi project Haikou
Fangda RMB2,450,811.54
International payment Longhua Under trial
Guoke and interest
Building Co., lawsuit People’s
69
Ltd. Court
The 1st
Wang Fangda Project Middle Court RMB17.07 mil
Under trial
Weihong Decoration dispute of and interests
Chongqing
Note 1: On December 17, 2009, Fangda Guoke appealed to Haikou Longhua People’s Court against
Hainan Tianyi International Building Co., Ltd. for the overdue payment of LED system of Hainan Tianyi
International Building. The claim was RMB2,450,811.54 of overdue payment and relative interests. The
case was under trial as of June 30, 2011.
Note 2: In 2010, Wang Weihong sue to Chongqing Middle Court against Fangda Decoration – one
of the Company’s subsidiaries, claiming for RMB17.07 million project payment and interests. This case
is in trial process. And the bank deposit of RMB12 million of Fangda Decoration was frozen by the
court.
2. Major lawsuits settled but not executed completely
(1) On January 13, 2002, Shenzhen Fangda Decoration Engineering Co., Ltd. (Fangda Decoration)
appealed to Dalian Arbitration Committee against Dalian Hongjin World Trade Center for the
outstanding payment of RMB22,112,004.30 and interests. On July 28, 2008, Dalian Arbitration
Committee judged with [2002]大仲字第 228 号 that Dalian Hongjin World Trade Center Co., Ltd. shall
pay RMB19,194,665.60 and interest to Fangda Decoration in 10 days. (In which interest of
RMB17,414,863.00 will be charged since December 1, 2001; interest of RMB1,779,802.60 will be
charged since December 1, 2002.) On June 1, 2011, Dalian Middle Court issued the judgment （2011）
大执一恢 1 字第 47、87 号 and judged that flat 2,3A,3B,5,6,7,8 on the 10 floor, and 6,12 on the 32 floor,
and 2,3A,7,12A,12B on the 46 floor of World Trade Center located at 25 Tongxing Street, Zhongshan
District, Dalian were under possession of Fangda Decoration. This was to compensate the overdue
project payment owed by Dalian Hongjin World Trade Center Ltd. along with the interests of
RMB239.573 million.
(2) On November 24, 2004, Shanxi Taiyuan Middle Court issued the Civil Judgment （2004）并民
初字第 322 号 that Shanxi No.2 Construction Co., Ltd. and Shanxi Taiyuan Police Station should make
the payment of RMB11,506,930.98 to Fangda Decoration in two disbursement. As of June 30, 2011,
Fangda Decoration has retrieved RMB5,272,450.00, and the rest was not retrieved yet.
(3) On January 2, 2003, Guangzhou Middle Court issued the Civil Settlement Letter （2002）穗中
法民三初字第 00596 号 requiring Guangzhou Yi’an Plaza Property Development Co., Ltd. to pay
RMB5,621,329.63 to Fangda Decoration in 15 days. As of June 30, 2011, Fangda Decoration has
received RMB1,950,000.00, and the rest of payment has not been received yet.
3. Other contingent liabilities
As of June 30, 2011, all of the external guarantees were among the Company and its subsidiaries.
For details please see Note VI (II) 2.
No material contingent issues to be disclosed other than the above as of June 30, 2011.
70
VIII. Significant commitments
(1) Significant commitments
1. Please see Note V. for pledges made by the Company against its own properties. The Company
promises to the provider of bank credit: additional pledge will be offered to the creditor as soon as the
property certificate of Fangda Industry Town is granted.
2. Details of guarantees provided between the Company and its subsidiaries for bank credits are:
(1) Details of guarantees provided to subsidiaries for bank credit up to June 30, 2011:
Name of companies Amount Note
Fangda New Material 126,600,000.00
For details please go to Note VI
Fangda Decoration 360,000,000.00
(II) 2
Fangda Automatic 310,000,000.00
Fangda Decoration This was guarantee for
guarantee letter credit and cross
100,000,000.00 guarantees were provided by
Fangda Automatic
Fangda Decoration and Fangda
Automatic
Total 896,600,000.00
(2) Details of guarantees provided to the Company for bank credit up to June 30, 2011:
Name of companies Amount Note
Fangda Decoration 50,000,000.00
For details please go to
Fangda Automatic 50,000,000.00
Note VI (II) 2
Fangda New Material 50,000,000.00
Total 150,000,000.00
Note: For details of guarantee letters please go to Note VIII (I) 2 (1).
(2) Fulfilling of commitments made in previous terms
Commitments made by the Company in previous terms were exercised normally along with
repaying of loans by the receiver of guarantees.
No material commitment issues to be disclosed other than the above as of June 30, 2011.
IX. Other Material Issues
(1) Issuing of short-term bonds
The 15th meeting of the 5th term of Board was hold on November 11, 2010, on which the
“Proposal to issue short-term bonds” was adopted. The Company planned to issue not greater than
RMB400 million of short-term bonds to China Inter-bank Market Association. The proceeds will be
used to support working capital of the Company and its fully-owned subsidiaries and replacing of some
bank loans.
(2) Company restructuring
71
The Board of Shenyang Fangda – one of the subsidiaries of the Company, adopted
resolution (沈方（董）[2010]第002号) on December 7, 2010: Shenyang Fangda will
takeover Fangda Guoke and all of its assets, including inventories, equipment, and
intangible assets (patents) will be transferred to Shenyang Fangda at their book value. Upon
completion of the takeover, Fangda Guoke will be deregistered. This restructuring was in
process as of the date of this report.
Shenyang Fangda – subsidiary of the Company, has adopted the resolutions at the 7th meeting of the
1st board of directors (沈方（董）[2011]第004号) on April 8, 2011. Shenyang Fangda will takeover
Fangda Woke – the fully-owned subsidiary and Fangda Woke will be deregistered. This
restructuring was in process as of the date of this report.
(3) Leases
Details of property leasing as of June 30, 2011.
Balance of book value at end of Balance of book value at
Category of property for rent
term beginning of term
Investment properties
274,539,465.81 271,226,332.73
Total
274,539,465.81 271,226,332.73
(4) Assets accounted at fair value
Impairment
Gain/loss Accumulative
Fair value at provisions
from change change in fair Fair value at
Items beginning of provided in
of fair value value accounted end of term
term the current
in the term into equities
term
I. Financial assets
1. Financial assets on
fair value and (Derivate
changes accounted
financial assets
into current gain/loss
(Derivate financial not included)
assets excluded)
2. Derivate financial
assets
3. Disposable
4,347,000.00 -35,000.00 -26,600.00 0.00 4,312,000.00
financial assets
II. Investment
271,226,332.73 5,082,327.66 0.00 0.00 274,539,465.81
property
III. Production
biological assets
IV. Others
Total of assets 275,573,332.73 5,047,327.66 -26,600.00 0.00 278,851,465.81
72
X. Notes to the main items of the financial statements of the parent company
(I) Account receivable
(1) Account receivable on categories
Balance of book value at end of term
Categories Book value Bad debt provision
Net amount
Amount Proportion Amount Rate
Receivables with major
individual amount and bad
debt provision provided
individually
Receivables provided bad
7,964,960.33 100% 1,769,240.98 22.21% 6,195,719.35
debt provision in groups
Incl. Receivable accounts
7,964,960.33 100% 1,769,240.98 22.21% 6,195,719.35
not consolidated
Sub-total of group 7,964,960.33 100% 1,769,240.98 22.21% 6,195,719.35
Account receivable with
minor individual amount but
bad debt provision is
provided
Total 7,964,960.33 100% 1,769,240.98 22.21% 6,195,719.35
Balance of book value at beginning of term
Categories Book value Bad debt provision
Net amount
Amount Proportion Amount Rate
Receivables with major
individual amount and bad
debt provision provided
individually
Receivables provided bad
10,467,296.51 100.00% 2,549,569.61 24.36% 7,917,726.90
debt provision in groups
Incl. Receivable accounts
10,467,296.51 100.00% 2,549,569.61 24.36% 7,917,726.90
not consolidated
Sub-total of group 10,467,296.51 100.00% 2,549,569.61 24.36% 7,917,726.90
Account receivable with
minor individual amount but
bad debt provision is
provided
Total 10,467,296.51 100.00% 2,549,569.61 24.36% 7,917,726.90
Account receivables on which bad debt provisions are provided on age basis in the group:
Balance of book value at end of term
Age Bad debt
Amount Proportion Net amount
provision
within 1 year 2,297,211.55 28.84% 68,916.35 2,228,295.20
1-2 yrs
2-3 yrs 5,667,748.78 71.16% 1,700,324.63 3,967,424.15
Over 3 yrs
73
Total 7,964,960.33 100.00% 1,769,240.98 6,195,719.35
Balance of book value at beginning of term
Age Bad debt
Amount Proportion Net amount
provision
within 1 year 2,187,479.05 20.90% 65,624.37 2,121,854.68
1-2 yrs
2-3 yrs 8,279,817.46 79.10% 2,483,945.24 5,795,872.22
Over 3 yrs
Total 10,467,296.51 100.00% 2,549,569.61 7,917,726.90
(2) There is no receivable account that have been fully provided of bad debt provision, or with great
portion in previous year, but retrieved or written back in the report term, or such account retrieved or
written back at large percentage or major amount.
(3) No receivable account neutralized this period.
(5) As of December 31, 2010, no receivables due from shareholders with 5% or above shares of the
Company or related parties.
(5) Top 5 of receivables at end of report term:
Relation with the Amount at % in total
Name of the companies Age
Company end of term receivables
within 1
2,297,211.55
Guangzhou Metro Company Screen door client year 100％
5,667,748.78 2-3 yrs
Total 7,964,960.33 100％
(II) Other account receivable
(1) Other account receivable on categories
Balance of book value at end of term
Categories Book value Bad debt provision
Ratio Providing Net amount
Amount Amount
(%) rate (%)
Other receivables
with major
individual amount
and bad debt
provision provided
individually
Other receivables
provided bad debt
210,199,551.04 99.97% 564,672.41 0.27% 209,634,878.63
provision in
groups
Incl. Receivable
accounts not 2,526,869.95 1.20% 564,672.41 22.35% 1,962,197.54
consolidated
74
Receivable
account within the
207,672,681.09 98.77% 0.00% 207,672,681.09
consolidation
range
Sub-total of group 210,199,551.04 99.97% 564,672.41 0.27% 209,634,878.63
Other account
receivable with
minor individual
53,046.00 0.03% 53,046.00 100.00%
amount but bad
debt provision is
provided
Total 210,252,597.04100.00% 617,718.41 100.00% 209,634,878.63
Balance of book value at beginning of term
Categories Book value Bad debt provision
Ratio Providing Net amount
Amount Amount
(%) rate (%)
Other receivables
with major
individual amount
and bad debt
provision provided
individually
Other receivables
provided bad debt
201,041,444.07 99.97% 586,474.32 0.29% 200,454,969.75
provision in
groups
Incl. Receivable
accounts not 3,253,600.46 1.61% 586,474.32 18.03% 2,667,126.14
consolidated
Receivable
account within the
197,787,843.61 98.36% 197,787,843.61
consolidation
range
Sub-total of group 201,041,444.07 99.97% 586,474.32 0.29% 200,454,969.75
Other account
receivable with
minor individual
53,046.00 0.03% 53,046.00 100%
amount but bad
debt provision is
provided
Total 201,094,490.07 100% 639,520.32 0.32% 200,454,969.75
Other account receivables on which bad debt provisions are provided on age basis in the group:
Balance of book value at end of term
Age Bad debt
Amount Ratio (%) Net amount
provision
within 1 year 1,476,636.95 0.73% 44,299.11 1,432,337.84
1-2 yrs 11,858.00 0.01% 1,185.80 10,672.20
2-3 yrs
Over 3 yrs 1,038,375.00 0.52% 519,187.50 519,187.50
Total 2,526,869.95 1.26% 564,672.41 1,962,197.54
Age Balance of book value at beginning of term
75
Bad debt
Amount Ratio (%) Net amount
provision
within 1 year 2,203,367.46 1.10% 66,101.02 2,137,266.44
1-2 yrs 11,858.00 0.01% 1,185.80 10,672.20
2-3 yrs
Over 3 yrs 1,038,375.00 0.52% 519,187.50 519,187.50
Total 3,253,600.46 1.63% 586,474.32 2,667,126.14
(2) There is no receivable account that have been fully provided of bad debt provision, or with great
portion in previous year, but retrieved or written back in the report term, or such account retrieved or
written back at large percentage or major amount.
(3) No offsetting of other receivable account.
(4) As of December 31, 2010, no other receivables due from shareholders with 5% or above shares
of the Company.
(5) Top 5 debtors of other receivable accounts:
Portion in total
Name of the Relation with Amount at end other
Specification Age
companies the Company of term receivable
accounts (%)
Fangda Current Controlled within 1
159,322,832.25 75.78%
Decoration account subsidiaries year
Fangda New Current Controlled within 1
8,704,080.92 4.14%
Material account subsidiaries year
within 1
Current Controlled 5,052.69 14.45%
HK Junjia year
account subsidiaries 30,375,199.12 1-2 yrs
within 1
4,336.01
year
Current Controlled 2,488,413.62 1-2 yrs
Fangda Guoke 3.85%
account subsidiaries 2-3 yrs
2,625,780.30
2,984,947.27 3 年以上
Shenzhen
Changshou Compensation Trading
984,375.00 Over 3 yrs 0.47%
Pharmacy Co., for building company
Ltd.
Total 198,529,036.31 98.69%
(6) Receivable account due from related parties
Name of the Relation with the Percentage in total of other
Amount at end of term
companies Company receivables
Controlled
Fangda Decoration 159,322,832.25
subsidiaries 75.78%
Fangda New Controlled
8,704,080.92
Material subsidiaries 4.14%
HK Junjia Controlled 30,380,251.81 14.45%
76
subsidiaries
Controlled
Fangda Guoke 8,103,477.20
grand-subsidiary 3.85%
Controlled
Shenyang Fangda 243,182.30
subsidiaries 0.12%
Controlled
Fangda Woke 25,489.84
grand-subsidiary 0.01%
Controlled
Fangda Automatic 893,366.77
subsidiaries 0.42%
Total 207,672,681.09 98.77%
(III) Long-term share equity investment
Long-term equity investment:
Balance of
Changed this Balance of
Company Calculating Investment book value at
term (- for book value at
invested in basis cost beginning of
decrease) end of term
term
Fangda
Cost basis 305,000,000.00 305,000,000.00
Decoration 305,000,000.00
Fangda
Cost basis
Aluminium 19,800,000.00
Fangda Yide Co. Cost basis 19,907,760.00
HK Junjia Cost basis 10,600.00
Fangda
Cost basis 170,385,071.73 170,385,071.73
Automatic 170,385,071.73
Fangda New
Cost basis 74,496,600.00 74,496,600.00
Material 74,496,600.00
Shenyang Fangda Cost basis 109,560,000.00 108,852,073.85 108,852,073.85
Total 699,160,031.73 658,733,745.58 658,733,745.58
Impairment
Share Cash dividend
Company Voting rights Impairment provision
proportion of the current
invested in (%) provision provided this
(%) term
term
Fangda
98.39 98.39
Decoration
Fangda
99 99 19,800,000.00
Aluminium
Fangda Yide Co. 75 75 19,907,760.00
HK Junjia 100 100 10,600.00
Fangda
90.48 90.48
Automatic
Fangda New 75 75
77
Material
Shenyang Fangda 64.58 64.58
Total 39,718,360.00
(IV) Operational turnover and costs
(1) Details of business turnover and costs:
Amount occurred in
Items Occurred current term
same period last year
Turnover 20,049,926.08 18,558,245.60
Incl. Main business turnover 1,022,878.46 184,615.38
Other business income 19,027,047.62 18,373,630.22
Operation cost 5,151,318.51 4,777,841.15
Incl. Main business cost 671,466.39 131,726.94
Other business cost 4,479,852.12 4,646,114.21
(2) Turnover on categories of products
Amount occurred in
Occurred current term
same period last year
Categories of products
Operation Operation
Turnover Turnover
cost cost
Metro screen door
products 1,022,878.46 671,466.39 184,615.38 131,726.94
Rental 19,027,047.62 4,479,852.12 18,373,630.22 4,646,114.21
Total 20,049,926.08 5,151,318.51 18,558,245.60 4,777,841.15
(3) Turnover from top 5 clients
Ranks of clients Occurred current term Portion in total turnover
No.1 3,306,400.02 16.49%
No.2 1,221,126.68 6.09%
No.3 1,022,878.46 5.1％
No.4 563,556.54 2.81%
No.5 431,670.00 2.15%
Total 6,545,631.70 32.64%
(V) Appendix of Cash Flow Statement
Amount of Amount of the
Supplementary Info. the Current same period of
Term last year
1.Net profit adjusted to cash flow of operation:
Net profit 5,475,020.08 5,936,531.75
Plus: Asset impairment provision -802,130.54 -240,157.03
78
Amount of Amount of the
Supplementary Info. the Current same period of
Term last year
Depreciation of fixed assets 1,077,799.18 734,292.69
Amortizing of intangible assets 325,575.97 447,681.75
Amortizing of long-term expenses
Loss from disposal of fixed assets, intangible assets, and other
long-term assets (“-“ for gains) 2,356.10
Loss from fixed asset discard (“-“ for gains)
Loss from fluctuation of fair value (“-“ for gains) -4,547,127.66 -6,498,256.32
Financial expenses (“-“ for gains) 1,965,559.92 2,648,600.20
Investment loss (“-“ for gains)
Decrease of deferred income tax asset (“-“ for increase) 132,386.17 -434,125.32
Increase deferred income tax asset (“-“ for decrease) 1,507,171.12 3,985,213.31
Decrease of inventory (“-“ for increase)
Decrease of operational receivable items (“-“ for increase) 721,324.62 2,659,100.34
Increase of operational payable items (“-“ for decrease) -628,535.90 -7,614,421.60
其他 Others
Cash flow generated by business operation, net 5,229,399.06 1,624,459.77
2. Major investment and financing activities not involving in cash
flow
Liabilities converted to capital
Convertible bond expire in 1 year
Fixed assets leased through financing
3. Change of cash and cash equivalents
Balance of cash at period end 34,000,832.49 349,325,681.01
Less: Initial balance of cash 30,252,759.44 42,274,488.50
Plus: Balance of cash equivalents at the period end
Less: Initial balance of cash equivalents
Net increasing of cash and cash equivalents 3,748,073.05 307,051,192.51
XI. Supplementary Info.
(1) Details of non-recurring gain/loss of current term
According to document 公告[2008]43 号 issued by China Securities Regulatory Commission, the
non-recurring gain/loss are as the followings:
Occurred
Items Note
current term
Gain/loss from disposal of non-working capital, including the
-247,367.69
neutralized part of the impairment provision provided already
Refunding and exemption of taxes in excess of authority or
without official approval documents
Government subsidies accounted into current income account
(except for those government subsidies closely related to the
63,800.0
Company’s business, and received at national statutory standard
and amount)
79
Occurred
Items Note
current term
Receiving of interest
Capital adoption fee collected from non-financial organizations of project payment
4,863,766.62
and accounted into current gain/loss due from Dalian
Yunshan project
Gain/loss from differences between the cost of enterprise
merger and the fair value of recognizable net asset of the
invested entities
Gain/loss from non-monetary assets
Gain/loss from commissioned investment or assets
Asset impairment provisions provided for force-majeur
Gain/loss from debt reorganization
Enterprise reorganizing expenses, such as employee placement
fee and integration fee
Gain/loss from trade departing from fair value
Current net gain/loss of subsidiaries under same control from
beginning of term till date of consolidation
Gain/loss generated by contingent liabilities without connection
with main businesses
Gain/loss from change of fair value of transactional asset and
liabilities, and investment gains from disposal of transactional
financial assets and liabilities and sellable financial assets, other
than valid period value instruments related to the Company’s
common businesses
Restoring of receivable account impairment provision tested
individually
Gain/loss from commissioned loans
Gain/loss from change of fair value of investment property
5,082,327.66
measured at fair value in follow-up measurement
Influence of one-time adjustment made on current gain/loss
account according to the laws and regulations regarding tax and
accounting
Consigning fee received for cosigned operation
Other non-business income and expenditures other than the
191,727.76
above
Other gain/loss items satisfying the definition of non-recurring
gain/loss account
Total of non-recurring gain/loss 9,954,254.35
Less: Influenced amount of income tax -2,244,387.08
Net non-recurring gain/loss (influence on net profit) 7,709,867.27
Less: Influenced amount of minor shareholders’ equity -662.62
Non-recurring gain/loss attributable to net profit of common
7,709,204.65
shareholders of the parent company
Net profit attributable to common share holders of the
38,385,493.61
Company after deducting of non-recurring gain/loss
(2) Net income on asset and earnings per share
80
According to “Information Disclosure Rules No.9 – Calculation and disclosure of net earnings on
asset and earnings per share ( 中 国 证 券 监 督 管 理 委 员 会 公 告 [2010]2 号 ) and “Explanation
Announcement of Information Disclosure No. 1 – Non-recurring gain/loss (中国证券监督管理委员会
公告[2008]43 号), the earnings per share is calculated as the following:
Current term
Earnings per share
Profit of the report period Net income on asset, Diluted
weighted Basic earnings
earnings per
per share
share
Net profit attributable to common
4.46% 0.061 0.061
shareholders of the Company
Net profit attributable to the common
owners of the PLC after deducting of 3.72% 0.051 0.051
non-recurring gains/losses
Same period of last term
Earnings per share
Profit of the report period Net income on asset, Diluted
Basic earnings
weighted earnings per
per share
share
Net profit attributable to common
5.28% 0.049 0.049
shareholders of the Company
Net profit attributable to the common
owners of the PLC after deducting of 2.07% 0.019 0.019
non-recurring gains/losses
XII. Approval of the financial statements
This financial statement is approved by the Board on July 29, 2011.
Legal representative: Accounting Manager: Manager of Accounting Dept.
China Fangda Group Co.,
Ltd.
July 29 2011
81
