方大集团股份有限公司
CHINA FANGDA GROUP CO., LTD.
Annual Report 2011
Table of Contents
I. Company Profile .................................................................................................................................. 2
II. Financial Highlight ............................................................................................................................. 3
III. Particulars About the Capital Share and Shareholders ................................................................. 6
IV. Particulars about the Directors, Supervisors, Senior Management and Employees ............... 11
V. Administrative Structure ................................................................................................................. 16
VI. Particulars about the Shareholders’ Meeting ............................................................................... 21
VII. Report of the Board of Directors .................................................................................................. 22
VIII. Report of the Supervisory Committee ........................................................................................ 34
IX. Significant Events ........................................................................................................................... 35
X. Financial Report ............................................................................................................................... 42
XI. Documents For Reference .......................................................................................................... 43
Important Prompt
The Board of Directors and the directors of the Company guarantee that there are no significant
omissions, fictitious or misleading statements carried in the Report and we will accept individual
and joint responsibilities for the truthfulness, accuracy and completeness of the Report.
This report was examined and approved at the 9th meeting of the 6th term of Board. All of the
directors other than director Xiong Jianwei presented the meeting. Mr. Xiong empowered director
Wang Shengguo to vote on his behalf.
This report is prepared both in English and Chinese. When there is any conflict in interpreting, the
Chinese version shall prevail.
Mr. Xiong Jianming, the Chairman, and Mr. Lin Kebing, the Financial Officer, and Mr. Chen
Yonggang, the accounting manager, hereby declares that: The financial statements carried in this
annual report are of authentic and complete.
I. Company Profile
1. Legal Name of the Company in Chinese and English
In Chinese: 方大集团股份有限公司 （abbreviation：方大集团）
In English: CHINA FANGDA GROUP CO., LTD.（abbreviation：CFGC ）
2. Legal Representative: Mr. Xiong Jianming
3. Secretary of the Board: Mr. Zhou Zhigang
Securities affair liaison: Ms. Guo Linchen
Address: Fangda Town, Xili Longjing, Nanshan District, Shenzhen, PRC
Post code: 518055
Tel: 86(755) 26788571 ext. 6622
Fax: 86(755) 26788353
Email: zqb@fangda.com
4. Registered Address of the Company:
Fangda Building, Kejinan 12th Avenue, High-tech Zone, Shenzhen, PR China.
Post code: 518057
Head office: Technology Building, Fangda Town, Xili Longjing, Nanshan District, Shenzhen, PRC
Post code: 518055
Website: http://www.fangda.com
Email: fd@fangda.com
5. Official Medias of Information Disclosure
China Securities Journal, Security Times, Shanghai Securities Daily, Hong Kong Commercial
Daily
Place where Annual Reports are available: Secretary Office of the Board of Directors.
Website assigned by China Securities Regulatory Commission for the disclosing of Annual
Report:
http://www.cninfo.com.cn
6. Abbreviations and Codes of the Stock and the Stock Exchange Where Listed
A Stock: Fangda Group000055 Shenzhen Stock Exchange
B Stock: Fangda B200055Shenzhen Stock Exchange
7. Miscellaneous Information of the Company
Initial registration date and place: December 13th, 1995, Shenzhen Bureau of Industry &
Commerce Administration
Business license number: 440301501124785
Tax registration number: No.440305192448589
Organization code: 19244858-9
Public accountants employed by the Company:
Ascenda Certified Public Accountants
Office address: A-12/F, Global Trade Center, 36 Beishanhuan Rd. East, Dongcheng District,
Beijing
2
II. Financial Highlight
1. Major Accounting Data of Year 2011 (in RMB Yuan)
Items Amount
Operation profit 70,899,738.39
Total profit 79,160,090.12
Net profit attributable to the shareholders of the listed company 65,503,925.58
Net profit attributable to the owners of the PLC after deducting of non-recurring
51,005,479.89
gains/losses
Cash flow generated by business operation, net -57,045,495.85
Note: The total of non-recurring incomes was of RMB14,498,445.69. The details are as
followings:
In RMB
Non-recurring gain and loss items Amount
Gain/loss of non-current assets -690,807.78
Government subsidies accounted into current gain/loss account, other than those closely related
to the Company’s common business, comply with the national policy and continues to enjoy at 1,988,650.00
certain fixed rate or amount.
Gain/loss from debt reorganization 3,959.20
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 99,342.47
than valid period value instruments related to the Company’s common businesses
Gain/loss from change of fair value of investment property measured at fair value in follow-up
10,815,131.20
measurement
Gain/loss from commissioned loans 0.00
Other non-business income and expenditures other than the above 6,080,071.96
Other gain/loss items satisfying the definition of non-recurring gain/loss account 878,478.35
Influenced amount of minority shareholders’ equity -60,101.30
Influenced amount of income tax -4,616,278.41
Total 14,498,445.69
3
2. Influences of adjustment on net profit and net asset
according to IAS
In RMB
Net profit attributable to the shareholders of Owners’ equity to shareholders of the listed
the listed company company
Current term Amount of last term End of term Beginning of term
On IAS 65,503,925.58 55,063,374.25 1,078,606,842.89 1,014,754,137.31
On domestic accounting
65,503,925.58 55,063,374.25 1,073,843,444.65 1,009,990,739.07
standard
Individual and total of adjustment according to IAS
Capitalizing of borrowing
0.00 0.00 4,763,398.24 4,763,398.24
expenses
Total of differences
between the IAS and
0.00 0.00 4,763,398.24 4,763,398.24
domestic accounting
standard
Statement on differences
The different of owners’ equity attributable to the listed company on IAS was mainly the part
between the IAS and
of interest capitalized in years previous to application of the new accounting standard on
Chinese Accounting
January 1, 2007.
Standard
3. Major financial data and accounting indices for
latest 3 years
In RMB
Increase/decrease
2011 2010 2009
(%)
Turnover (yuan) 1,348,776,366.53 1,161,933,356.48 16.08% 912,979,118.31
Business profit (RMB) 70,899,738.39 49,637,958.64 42.83% 43,189,525.60
Gross profit (RMB) 79,160,090.12 67,655,340.40 17.00% 45,108,302.29
Net profit attributable to
shareholders of the listed 65,503,925.58 55,063,374.25 18.96% 44,052,511.46
company (yuan)
Net profit attributable to the
shareholders of the listed
company and after deducting 51,005,479.89 25,603,881.05 99.21% 21,304,916.08
of non-recurring
gain/loss(RMB)
Net Cash flow generated by
-57,045,495.85 -31,187,262.97 46,698,915.92
business operation (RMB)
Increase/decrease
End of 2011 End of 2010 End of 2009
(%)
Total asset (RMB) 2,163,325,598.14 1,991,161,158.84 8.65% 1,482,814,012.11
Total liability (RMB) 1,011,268,487.56 896,832,951.52 12.76% 768,403,722.42
Owners’ equity attributable to
the shareholders of the listed 1,073,843,444.65 1,009,990,739.07 6.32% 623,295,593.57
company (yuan)
4
Total capital share (shares) 756,909,905.00 504,606,604.00 50.00% 426,786,359.00
4. According to the requirement of Regulations of
Information Disclosure No.9 (Revised 2010) issued by
China Securities Regulatory Commission, the
Company net income on asset ratio and basic income
per share and diluted income per share on weighted
average basis in year 2011 were:
Earnings per share (yuan/share)
Weighted average net
income/asset ratio (%) Basic earnings per
Items share Diluted earnings per share
Net profit attributable to
common shareholders of 6.28% 0.09 0.09
the Company
Net profit attributable to
the common owners of
the PLC after deducting 4.89% 0.07 0.07
of non-recurring
gains/losses
5. Change of shareholders’ equity in 2011 (RMB Yuan)
Total of equity
Surplus attributable to the
Items Share capital Capital reserves Retained profit
reserves owners of the parent
co.
Beginning
504,606,604 334,434,014.92 17,834,977.97 153,115,142.18 1,009,990,739.07
of term
Increased
252,303,301 6,841,099.19 58,662,826.39 317,807,226.58
this term
Decreased
- 253,954,521.00 - 253,954,521.00
this term
End of
756,909,905 80,479,493.92 24,676,077.16 211,777,968.57 1,073,843,444.65
term
1. Profit of the year
1. Transferred
2. Transferred
from reserves providing of
Cause of Transferred Profit of the from reserves
2. Drop of fair surplus
change from reserves year 3. Drop of fair
value of financial reserves
value of financial
asset for sale
asset for sale
5
III. Particulars About the Capital Share
and Shareholders
1. Statement of Changes in Shares
In shares
Before the change Changed (+,-) After the change
Issuing Transferred
Bonus
Amount Proportion of new from Others Sub-total Amount Proportion
shares
shares reserves
I. Shares with trade
restriction 48,014,828 9.52% 24,007,414 -71,917,800 -47,910,386 104,442 0.01%
conditions
1. State-owned
shares
2. State-owned
legal person shares
3. Other domestic
47,945,200 9.50% 23,972,600 -71,917,800 -47,945,200
shares
Incl.
Non-government
18,200,000 3.61% 9,100,000 -27,300,000 -18,200,000
domestic legal
person shares
Domestic natural
29,745,200 5.89% 14,872,600 -44,617,800 -29,745,200
person shares
4. Share held by
foreign investors
Incl. Shares held by
foreign legal
persons
Foreign natural
person shares
5. Management
69,628 0.01% 34,814 34,814 104,442 0.01%
shares
II. Shares without
trading limited 456,591,776 90.48% 228,295,887 71,917,800 300,213,687 756,805,463 99.99%
conditions
1. Common shares
232,624,317 46.10% 116,312,158 71,917,800 188,229,958 420,854,275 55.60%
in RMB
2. Foreign shares in
223,967,459 44.38% 111,983,729 111,983,729 335,951,188 44.39%
domestic market
3. Foreign shares in
overseas market
4. Others
III. Total of capital
504,606,604 100.00% 252,303,301 0 252,303,301 756,909,905 100.00%
shares
6
Change of conditional shares
in shares
Conditional shares
Name of the Increased this Conditional shares Reason of
at beginning of Released this year Date of releasing
shareholder year at end of year condition
year
Management
Xiong Jianming 51,485 0 25,743 77,228 shares with
restriction to sale
Management
Wang Shengguo 18,143 0 9,071 27,214 shares with
restriction to sale
Tieling Xinxin
Issuing of new
Copper Industry 11,200,000 16,800,000 5,600,000 0 Jul 15 2011
shares
Co., Ltd.
Issuing of new
Chen Binblin 10,000,000 15,000,000 5,000,000 0 Jul 15 2011
shares
Issuing of new
Shi Baozhong 7,000,000 10,500,000 3,500,000 0 Jul 15 2011
shares
Issuing of new
Zhang Xu 7,000,000 10,500,000 3,500,000 0 Jul 15 2011
shares
Zhongrong
Issuing of new
International Trust 7,000,000 10,500,000 3,500,000 0 Jul 15 2011
shares
Co., Ltd.
Issuing of new
Shen Cangqiong 5,745,200 8,617,800 2,872,600 0 Jul 15 2011
shares
Total 48,014,828 71,917,800 24,007,414 104,442 － －
2. Share placing and listing
(1) In 2010, the Company issued privately 47.9452 million A shares to six particular investors at
price of RMB7.30 each. Totally RMB349.99996 million was raised. The shares were listed on July
15, 2010. The Company hadn’t issued shares in prior three years.
(2) In the report term, common reserve capitalizing plan for year 2010 was implemented: basing
on the total of 504,606,604 capital shares, 5 bonus share was given to each 10 shares of the entire
shareholders, namely the capital shares have been increased by 252,303,301 shares. Among them,
140,319,572 were allotted to A shareholders at 5 to 10 basis; 111,983,729 shares were allotted to B
shareholders at 5 to 10 basis as well. The capital shares of the Company was increased up to
756,909,905 shares after completion of this capitalization.
(3) No employees’ shares issued in the Company
3. Shareholders and shareholding position
7
Top 10 shareholders (as of December 31, 2011)
In
shares
79,593 （including 56,649 of 77,060 （including 54,290 of
Total of shareholders at end of Total of shareholders at end of the
A-share holders, and 22,944 of A-share holders, and 22,770
2011 month prior to issuing of this annual report
B-share holders） of B-share holders）
Top 10 Shareholders
Properties of Share proportion
Name of the shareholder Total shares Conditional shares Pledged or frozen
shareholder (%)
Shenzhen Banglin Domestic
Technologies Development non-state-owned 9.09% 68,774,273 0 0
Co., Ltd. legal person
Domestic
Shenzhen Shilihe Investment
non-state-owned 2.36% 17,860,992 0 0
Co., Ltd.
legal person
Domestic natural
Wang Shaolin 2.22% 16,800,000 0 16,800,000
person
Overseas legal
Shengjiu Investment Ltd. 1.64% 12,447,120 0 0
person
Domestic natural
Chen Binblin 0.74% 5,598,300 0 0
person
Domestic natural
Cao Yifan 0.44% 3,320,865 0 0
person
Domestic natural
Shi Baozhong 0.36% 2,748,816 0 0
person
Domestic natural
Chen Lihong 0.30% 2,305,365 0 0
person
Domestic natural
Zhen Fan 0.26% 1,980,000 0 0
person
Domestic
Shenyang Shenfa Investment
non-state-owned 0.24% 1,800,000 0 0
Co., Ltd.
legal person
Top 10 holders of unconditional shares
Amount of shares without trade limited
Name of the shareholder Category of shares
conditions
Shenzhen Banglin Technologies Development
68,774,273 RMB common shares
Co., Ltd.
Shenzhen Shilihe Investment Co., Ltd. 17,860,992 RMB common shares
Wang Shaolin 16,800,000 RMB common shares
Foreign shares placed in domestic
Shengjiu Investment Ltd. 12,447,120
exchange
Chen Binblin 5,598,300 RMB common shares
Foreign shares placed in domestic
Cao Yifan 3,320,865
exchange
Shi Baozhong 2,748,816 RMB common shares
Foreign shares placed in domestic
Chen Lihong 2,305,365
exchange
Foreign shares placed in domestic
Zhen Fan 1,980,000
exchange
Shenyang Shenfa Investment Co., Ltd. 1,800,000 RMB common shares
Among the top 10 shareholders, Shenzhen Banglin Technology Development Co., Ltd. and Shengjiu
Notes to relationship or
Investment Co., Ltd. are parties action-in-concert. Shenzhen Banglin Technology Development Co.,
“action in concert” among
Ltd. and Shenzhen Shilihe Investment Co., Ltd. are related parties. No other action-in-concert or
the top ten shareholders.
related parties among the other holders of current shares.
8
4. Profile of the controlling shareholder:
Name of the Share Legal Date Registered Business scope
shareholder proportion % representative incorporated capital
Industrial investment,
Shenzhen Banglin
3,000 developing of electronic
Technologies 222
9.09% Chen Jinwu RMB 10 products, technical consulting,
Development Co., June 7th
thousand domestic commerce, material
Ltd.
trading
9
5. The investors of Shenzhen Banglin Technologies
Development Co., Ltd.- the controlling shareholder of
the Company are natural persons, in which Mr. Xiong
Jianming, the Chairman of the Company is holding
85% of the shares, thus he’s the substantial controller
of the Company. Mr. Xiong Jianming is a resident of
Peoples’ Republic of China. He has been the Chairman
and President of the Company for the past five years.
6. Neither the controlling shareholder nor the
substantial controller of the Company has changed in
the report term.
7. Chart of the controlling relationship between the
practical controller and the Company
Xiong Jianming
85% 100%
Shenzhen Banglin Shengjiu Investment Ltd.
Technologies Development
Co., Ltd.
9.09% 0.014%
1.64%
10
China Fangda Group Co.,
Ltd.
8. Other legal person shareholders who are holding
over 10% of the shares
In the report term, no legal person shareholders who are holding over 10% of the
shares.
9. In the report term, except for those held by the
directors, supervisors, and executives which are
frozen according to the law, none of the shares of the
Company was under restriction of sale.
IV. Particulars about the Directors,
Supervisors, Senior Management and
Employees
1. Particulars about the Directors, Supervisors, and
Senior Management
(1) Profiles
11
Pays
received
from the
Shares
Shares Company
held at in the
held at Shares Cause of
Name Position Sex Age Job term the report
the end increased change
beginning
of term term
of term
(RMB0’
000)
before tax
Capital
Xiong Chairman,
M 54 2011.3.25-2014.3.25 68,647 102,971 34,324 reserves 108.47
Jianming president
capitalized
Director, Capital
Wang
Vice M 54 2011.3.25-2014.3.25 24,191 36,286 12,095 reserves 56.66
Shengguo
president capitalized
Xiong
Director M 43 2011.3.25-2014.3.25 56.89
Jianwei
Director,
Zhou
Secretary of M 49 2011.3.25-2014.3.25 39.15
Zhigang
the Board
Guo Independent
M 50 2011.3.25-2014.3.25 8.00
Jinlong Director
Shao Independent
F 73 2011.3.25-2014.3.25 8.00
Hanqing Director
Huang Independent
M 49 2011.3.25-2014.3.25 6.00
Yaying Director
Host of the
Zhen Hua Supervisory F 52 2011.3.25-2014.3.25 36.19
Committee
Yu Guoan Supervisor M 52 2011.3.25-2014.3.25 17.36
Cao Naisi Supervisor F 33 2011.3.25-2014.3.25 34.45
Yang Vice
M 58 2011.3.25-2014.3.25 36.14
Xiaozhuan President
Vice
Lin Kebin president M 34 2011.3.25-2014.3.25 41.21
and CFO
Wei Vice
M 43 2011.7.29-2014.3.25 58.05
Yuexing President
Former
Dong
independent M 69 2008.6.6-2011.6.6 2.00
Likun
director
Song Former
M 50 2008.6.6-2011.6.6 0.75
Wenqing supervisor
Total --- 92,838 139,257 46,419 509.32
Note: The Company hasn’t conducted any share option incentive program. None of the directors,
supervisors and executives is holding share options or conditional shares. None of them is getting
paid from the shareholding parties or other related parties.
(2) Status of directors and supervisors taking positions in shareholding parties
Get remuneration
Name Name of the shareholder Job taken Job term
or not
Xiong Shengjiu Investment Ltd. Chairman Since Oct. 6 No
12
Jianming 2011
Since Oct. 19
Chairman No
Wang Shenzhen Shilihe 2006
Shengguo Investment Co., Ltd. General Since Sept.
No
Manager 29 2003
Xiong Shenzhen Shilihe Since Jun 12
Director No
Jianwei Investment Co., Ltd. 2001
Zhou Shenzhen Shilihe Since Oct. 19
Director No
Zhigang Investment Co., Ltd. 2006
Shenzhen Shilihe Since Oct. 19
Zhen Hua Supervisor No
Investment Co., Ltd. 2006
(3) Working experiences of current directors, supervisors and executives in recent five years
Mr. Xiong Jianming: PHD Management; senior engineer; part-time professor of Beijing Institute
of Civil Engineering and Architecture and Nanchang University. He was once employed by
Jiangxi Provincial Machinery Design Academe, Administration Bureau of Shekou District of
Shenzhen government, etc. He’s now assuming Chairman of the Board and President of our
company, Deputy to the 10th People’s Congress of Guangdong Province, Deputy to the 3rd
People’s Congress of Shenzhen City, member of Commission of Legislative Affairs, Deputy
Director of China Construction Metal Structure Association, Deputy Director of Shenzhen League
of Industry and Economy, Chief Director of Shenzhen Semiconductor Lighting Industry
Commission, and Honorary Chairman of Shenzhen Nanshan Charity Society.
Mr. Wang Shengguo: Master degree; Visiting Scholar from University of Essen; senior engineer.
He once held such positions as Chief Engineer of Design Institute of the 2nd Heavy Machinery
factory of Machinery Industrial Ministry. Mr. Wang is now assuming Director and Vice President
of our company.
Mr. Xiong Jianwei: MBA. He is now assuming director of our company.
Mr. Zhou Zhigang, bachelor’s degree. Currently director, secretary of Board, and head of
Securities Dept.
Ms. Shao Hanqing, professor, doctorial course instructor. Once she was the Vice Director General
of Shenzhen Bureau of Planning, assistant to the Mayor, Vice Chief Secretary of the City
Government, standing commissioner of city council, PR director, and vice chief secretary of
Shenzhen Political Consultative Conference. At present she’s the vice chief of China Production
Association, chief of Shenzhen Production Association, commissioner of enterprise research
centre of National Economics and Trade Committee, part-time professor of China People’s
University, and independent director of Shenzhen Zhonghang Health Club Co., Ltd., Xingli (HK)
Co., Ltd. and the Company.
Mr. Guo Jinlong, member of China Democratic League, master of economics, certified accountant,
certified tax consultant, deputy professor. He once was project manager and department leader of
Pan-China Shenzhen CPA Ltd., chief of Profession Division, assistant to chief secretary, vice chief
secretary of Shenzhen CPA Association. At present he’s independent director of Shenzhen Tuori
New Energy Co., Ltd., Rainbow Shopping Mall Co., Ltd., Shenzhen Zhonghang Health Club Co.,
Ltd., partner of ShineWing Certified Public Account, off-campus instructor of Management
School of Sun Yat-Sen University, Beijing National Academy of Accounting, Commissioner of
Politic Congress, Comissioner of China CPA association, and independent director of the
Company.
13
Huang Yaying, professor of law, certified lawyer. Senior visiting scholar of UNSW. Once he was
professor of North-west University of Law, and postgraduate instructor. At present he’s the dean of
Law School of Shenzhen University, standing commissioner of Shenzhen People’s Congress,
certified arbitrator of Shenzhen Arbitration Committee, China International Trade Arbitration
Committee; councilor of China Arbitration and Law Commission, and China International Private
Law; certified arbitrator of Haikou Arbitration Committee, Xi’an Arbitration Committee, Huizhou
Arbitration Committee, and lawyer of Guangdong Guoxin Law Firm, and independent director of
the Company.
Ms. Zhen Hua: Bachelor degree. She is now assuming supervisor, Chairwoman of Trade Union,
and Director of President Office of our company.
Mr. Yu Guoan, doctor degree. Once associate professor of North-east University, chief technical
officer, head of IT department, and supervisor of the Company.
Ms. Cao Naisi, bachelor degree, once head of auditing department, vice head of HR department,
general manager of Shenzhen Fangda Decoration, at present she’s supervisor of the Company and
vice general manager of Fangda Decoration.
Mr. Yang Xiaozhuan: Bachelor degree; senior engineer. He once worked for Hubei Provincial
machinery Industry Department and held such positions as managing director of the 2nd Machine
Tool factory of Hubei, and Deputy Manager of Shenzhen Jinxin Investment Co., Ltd. Mr. Yang is
now assuming Vice President of our company several other positions.
Mr. Lin Kebin, bachelor’s degree. At present he’s the Vice President and CFO of the Company.
Mr. Wei Xingyue, bachelor degree, engineer. Once he’s chief engineer of Jiangxi Auto Switch
Factory. Currently he’s the vice president of the Company, and general manager of Fangda
Decoration.
(4) Particulars about the salaries of the current directors, supervisors and senior management (tax
included)
Through the approval of 2010 Shareholders’ General Meeting, the allowance was RMB80
thousand (before tax) per year for independent directors of the 6th term Board of Directors,
RMB60 thousand (before tax) for directors, and RMB30 thousand (before tax) per year for the
supervisors of the 6th term Supervisory Committee. The remuneration scheme was approved by
the 1st meeting of the 6th term Board of Directors.
All of the current directors, supervisors and executives of the Company took remunerations from
the Company and took no remunerations from the shareholding or related parties. Remunerations
of current directors, supervisors and executives are totaled to RMB5.0932 million.
(5) In the report term, the 5th term of the Board and the Supervisory Committee has expired for
their job terms. The members of the 6th term of Board and Supervisory Committee were elected at
the Shareholders’ Annual Meeting 2010. Mr. Xiong Jianming, Mr. Wang Shengguo, Mr. Xiong
Jianwei, and Mr. Zhou Zhigang were elected the directors of the Board. Ms. Shao Hanqing, Mr.
Guo Jinlong, and Mr. Huang Yaying were elected the independent directors of the Board. Mr.
Dong Likun has expired for his job term and no longer take the position of independent director.
Ms. Zhen Hua, Mr. Yu Guoan, and Ms. Cao Naisi were elected supervisors of the Company. Mr.
Song Wenqing has expired for his job term and no longer take the position of independent director.
Mr. Xiong Jianming was elected Chairman of the 6th term of Board at the 1st meeting of the 6th
term of Board. The new executive team was engaged too. Mr. Xiong Jianming is the president, Mr.
Wang Shenguo and Mr. Yang Xiaozhuan are the vice president, Mr. Zhou Zhigang is the secretary
of Board, and Mr. Lin Kebin is the chief financial officer of the Company.
Mr. Wei Xingyue was elected the vice president at the 3rd meeting of the 6th term of Board.
14
2. Particulars about the employees
There are totally 2923 employees currently in the Company, among which, 1984 production
employees, 118 sales employees, 489 technical and engineering employees, 48 accounting
employees, 284 other administrative employees.
2545 employees with intermediate vocational school education, account for 87.06% of the total.
15
V. Administrative Structure
1. Company Administration
The Company carried out its business operation strictly following with the Company Law,
Securities Law and relative regulations of China Securities Regulatory Commission and Shenzhen
Stock Exchange. And the administration structure has been further improved without conflict with
the laws and regulations.
Particulars about the administration of the Company in the report term:
1) According to the Company Law, Securities Law, Shenzhen Stock Exchange Share Listing Rules,
Enterprise Accounting System and Enterprise Accounting Standard, the Company has produced
the Shareholders’ Meeting Criteria, Working Regulations of the Board of Directors, Supervisory
Committee Meeting Criteria, President Work Criteria, Independent Director Working Criteria,
Internal Control Criteria, Information Disclosure Criteria, Proceed Administration Regulations,
Accounting Criteria, Internal Auditing Criteria, Manpower Management Regulations, Legal Affair
Administration Rules, Purchase Regulations, Rules of Bidding Invitation, Investor Reception and
Promotion, New Subscription Internal Control, Hedge Operation Internal Control, CPA Selection
and Employing, Accounting of Fair Value, Information Insider Registration, External Information
User Administration, Finance and Accounting Responsibility Management, Rules of Related
Transaction, External Investment Administration, and Internet Information Disclosure. These have
composed a mature and effective internal control system covering all aspects of the business
operation including investment decision-making, related transactions, financial management,
R&D management, HRM, executive management, purchase management, production and sales
management and information disclosure. All of them have been implemented smoothly and there
isn’t any major defect or fraudulent practices in executing of the internal control system. The
internal control system was designed under principles of scientific, rational, and standardization,
and with reference to the Company’s practical business operations.
In the report term, the Company has revised the Articles of Association, Rules of Internal Auditing,
Working Rules of Board, Working Rules of Auditing Committee, Administration of Financial
Proceeds, and Rules of Information Disclosure. Revising of these regulations may provide
stronger support to standard operation of the Company.
2) The Company has adopted the Retrospective Rules of Material False Information in Annual
Report. It will contribute to recognize and process material false in the procedures.
The Company has been implementing the regulations diligently and no such material false or
omission was found in the report period.
3) Establishing and operation of internal financial controlling system
The Company has established independent accounting structure and deployed reasonable jobs and
responsibilities. Professional accounting personnel were employed to ensure smooth operation of
the system.
The Company has established the ―Accounting Regulations‖, ―Accounting Seal Regulations‖,
―Cashier Regulations‖, ―Accounting Calculation Criteria‖, ―Online Banking Criteria‖, ―Payment
Authorization Regulations‖, ―Financial Documentation Criteria‖, ―Accounting Authorization
Regulations‖, ―Proceeds Administration Regulations‖, ―Related Transaction Regulations‖, and
―External Investment Regulations‖. These have been effectively controlling over the business
operations.The Company has also established clear and effective accounting documentation,
16
booking and reporting procedures. All transactions can be recorded timely, accurately, and
completely, to ensure preparing of financial statements is complying with the accounting standard.
Verifications were taken on book value and substantial assets to make sure they are according to
each other. Configuration of accounting positions has ensured frankly and objectively reflection of
financial situations, business performance and cash flow.
No major fault exist in the internal controlling of financial reporting system in the report term.
4) In the report term, the Company was fully executing the circulars issued by China Securities
Regulatory Commission and National Government State-owned Asset Administrative Commission,
namely ―Circular about capital transaction and providing of external guarantees by listed
companies‖ [Zheng-Jian-Fa (2003)56], and ―Circular about collectively resolve the problems
regard capital adoption and illegal guarantees of listed companies‖ [Zheng-Jian-Fa (2005)37. No
capital of the Company was adopted by the holding shareholder or providing guarantees to
external parties. The Company has been improving its business operation and preventing risks to
guard the benefits of the Company and the shareholders.
5) In the report term, the Company has convened and held the Shareholders’ Meetings strictly
according to the regulations and ensure the shareholders are able to execute their legal rights.
6) In the report term, the Board of Directors and the Supervisory Committee have been executing
their duties strictly according to the law and regulations. Convening and holding of the board
meetings and the Supervisory Committee meetings were carried out with the legal procedures.
Both of the Board and the Committee have been executing their duties diligently, and defending
the legal interests of the Company and the whole shareholders. The Company had never provided
the main shareholder or the substantial controller of the Company any unreleased information in
the year of 2009.
7) No trade competition or related transactions occurred due to company reconstruction in the
report term.
2. Performance of the Independent Directors
Ms. Shao Hanqing, Mr. Guo Jinlong, and Mr. Huang Yaying were the independent directors of the
Company. During the report term, the independent directors were performing their duties earnestly
and independently, and exactly according with the terms of the ―Article of Association‖, ―Rules of
the Board of Directors‖, and ―Rules for the Independent Directors‖. They issued independent
opinions on significant issues of the Company, and performed consultancy functions as
independent directors should have done.
I. Presenting of meetings
(I) Independent directors’ presenting of board meetings in the report period:
Number of Presented Not attend
meetings the
Name of personally Presented
should Presented meetings
Independen by telecom Absented Note
have by proxy for
t Director (times)
attended successivel
(times) (times) y 2 times
Shao
8 5 2 1 - No
Hanqing
Guo
8 5 2 1 - No
Jinlong
Huang Took job on March
6 5 1 - - No
Yaying 25, 2011
Dong Job expired on
2 1 1 - - No
Likun March 25, 2011
17
(II) Independent directors’ presenting of shareholders’ meetings in the report period
Not attend the meetings
Name Times to attend Times attended Absented
for successively 2 times
Shao Hanqing 1 1 - No
Guo Jinlong 1 1 - No
Huang Yaying 1 1 - No
(III) Independent directors’ performing of duties with the special committees of the Board in the
report period.
Not
attend the
Name of
Times of Presented meetings
Independ Presented
Position meetings to personall Absented for
ent by proxy
present y successiv
Director
ely 2
times
Head of remuneration and
1 1 0 0 No.
Shao assessment committee
Hanqing Member of development
2 2 0 0 No.
strategy committee
Head of auditing Committee 6 5 1 0 No.
Guo
Jinlong Member of remuneration
1 1 0 0 No
and assessment committee
Huang Member of auditing
4 4 0 0 No
Yaying committee
II. Performance of the independent directors
(I) Disagreement raised by independent directors
During the report term, the independent directors were performing their duties earnestly and
independently, and exactly according with the terms of the ―Article of Association‖, ―Company
Law‖, and ―Rules for the Independent Directors‖. They observed all the materials available before
every meeting and discussed on the proposals and procedures of the meetings, and provided
valuable opinions and suggestions.
The independent directors haven’t raised any disagreement against any of the proposals discussed
on the meetings held in the report period.
(II) Onsite investigation by independent directors
To fully acquire about the business operation, the independent directors investigated the office
space and production lines, and the subsidiaries in other cities as well.
On March 25, 2011, the 1st meeting of the 6th term of Board was held in Shenzhen. Independent
director Shao Hanqing, Guo Jinlong, and Huang Yaying visited the office and workshops of the
Company at the headquarter, and interviewed the executives of the Company to better understand
the business operation.
On September 17, 2011, independent director Guo Jinlong and Huang Yaying took a trip to
Shenyang Fangda Semiconductor Co., Ltd. – the controlled subsidiary of the Company to
investigate the production site and construction in process, and talked to the executives about the
business situation.
(III) Suggestions on standard operation raised by independent directors
18
On March 2, 2011, independent director Shao Hanqing provide suggestions at the 28th meeting of
the 5th term of Board: The Company is expecting a positive trend in development. With its
sufficient reservation of orders, we can see a high speed development in coming years. Therefore
the Company shall pay attention on reservation of manpower. The Board of Directors accepted her
suggestion.
On July 29, 2011, independent director Guo Jinlong provided suggestions at the 3rd meeting of the
6th term of Board: The Company has been listed as one of the 26 key enterprises in Shenzhen,
internal control is the crucial aspect of development, hope the Company may enhance their sense
of internal control, and promote all of the employees participating in the internal control. The
Board has accepted the suggestions raised by Mr. Guo Jinlong.
On July 29, 2011, independent director Huang Yaying provided suggestions at the 3rd meeting of
the 6th term of Board: although the Company has achieved great performance, quality and risk
management shall be reinforced. Internal management shall be improved to further upgrade
quality control.
III. Independent opinions provided in 2011
Date of issuing Type of Disclosed
Names Issues involved in the opinions
opinion opinion or not
Shao Report of Introspective Assessment on Internal Control In favor Yes
Hanqing, Providing of guarantee to subsidiaries In favor Yes
Guo Profit distribution plan 2010 In favor Yes
March 2, 2011
Jinlong,
Dong Annual allowance for new term of directors and supervisors In favor Yes
Likun
Shao March 25, 2011 Using of idle financing proceeds to support working capital In favor Yes
Hanqing, July 29 2011 Engaging of Mr. Wei Yuexing vice president of the Company In favor Yes
Guo
Jinlong,
August 23, 2011 Continue to use idle financing proceeds to support working capital In favor Yes
Huang
Yaying
As the convener or member of the professional committees of the Board, the independent directors
has been using their professional knowledge and experiences in areas of economy, management,
accounting, and law, to observe the material investment projects, annual assessment and
remuneration, and annual auditing works, and contributed to fair, scientific, and reasonable
decision making process. They have been doing their jobs diligently.
3. The Company is completely separated from the
controlling shareholder in aspects of businesses,
personnel, assets, organizations, and accounting. The
Company has its own completed businesses and
capacity of independent business operation.
In the aspect of business: the company has its own purchasing, production, sales, and customer
service system which performing independently. There is not any material related transactions
occurred with the controlling shareholders.
In personnel: The labor management, personnel and salary management are operated
independently from the controlling shareholder. The senior managements take salaries from the
Company and none of them takes senior management position in the controlling party.
19
In assets: The company owns its production, supplementary production system and accessory
equipments independently, and possesses its own industrial properties, non-patent technologies,
and trademark.
In organization: The production and business operation, executive management, and department
setting are completely independent from the controlling shareholder. No situation of combined
office exists. The Company adjusts its organizing structure only for its own practical requirement
of development and management.
In accounting: The company has its own independent accounting and auditing division,
established independent and completed accounting system and management rules, has its own
bank account, and exercise its liability of taxation independently.
4. Assessment and motivation system of the senior
management
The Company adopts a salary system for senior management formed by basic salary and floating
salary based upon assessment of their achievement. In accordance with ―The detailed assessment
rules of target management for the supervisory and service departments of year 2011‖ and ―The
detailed assessment rules for subsidiaries of year 2011‖, the senior management are assessed on
their capability of innovation, basic quality, performance, accomplishment of profit and account
collecting goals. The results of assessment form the foundation of floating salary or penalty.
5. Estabishment and Improvement of Company
Internal Control System
The company has been rated as one of the 26 key enterprise internal control experimental
companies by Shenzhen Securities Regulatory Bureau in December, 2011. The company has
immediately developed relative work of the company internal control system according to
Enterprise Internal Control Basic Norms, Enterprise Internal Control Matching Guidance jointly
issued by Ministry of Finance and other four departments and Notice about Optimizing Shenzhen
Popedom Enterprise Internal Control Experimental Work issued by Shenzhen Securities
Regulatory Bureau.
The company has set up enterprise standard management group and the company chairman of the
board has acted as the team leader. The team has take charge of the formulation of internal control
system implementation plan and promoting study and research of the system. The company has
invited experienced professional inquiry agency to associate the company to comb, construct and
optimize the company internal control structure and distinguish the weak link and main risk
according to the internal control system mentioned above. The company has formulated Internal
Control Implementation Plan and the plan has been deliberated by the board of directors.
The system implementation scope includes the company headquarter and its 4 subsidiaries which
are Fangda Group Co. Ltd, Shenzhen Fangda Decoration Engineering Co., Ltd, Shenzhen Fangda
Automatic System Co., Ltd, Fangda New Material (Jiangxi) Co., Ltd and Shenyang Fangda
Semiconductor Lighting Co., Ltd long term assets. The revenue of the companies mentioned
above occupied 100.98% proportion of the combined revenue report form.
The company has promoted those things listed below: collecting internal information, researching
risk; combing present system, process; formulating business flow chart and risk control matrix;
check internal control imperfection; formulating and executing strictly rectification and
reformation plan. Based on the work, the company has formulated Fangda Group Co., Ltd.
Internal Control System and Fangda Group Co., Ltd. Internal Control Manuscript according to
20
Enterprise Internal Control Basic Norms, Enterprise Internal Control Matching Guidance jointly
issued by Ministry of Finance and other four departments. The company standard management
team has organized to implement the company internal control and timely rectified and
reformatted the imperfection, meanwhile the company has invited Ascenda Certified Public
Accountants to audit independently the efficiency of the company internal control. The company
internal control system is sound without any significant imperfection and unusual affairs in
company administration and operation management according to the system test run effects and
audit results.
The board statement: It is the duty of the board of directors that to establish and organize to
implement the company internal control system; the board of supervisors inspect the establishment
and implementation; the manager layer organize the system normal operation.
The company internal control targets are reasonably guarantee legal operation management, assets
safety, authentic and completed financial report and the relative information, operation efficiency
and effect promotion, implementation of company development strategy. Because the company
internal control system has its inherent limitations, there can be only reasonably guarantee for the
realization of the targets.
The board’s self evaluation and the external accounting firm audit about the company internal
control are both issued in http://www.cninfo.com.cn
VI. Particulars about the Shareholders’
Meeting
The Company held 1 shareholders’ meetings in the report term. The followings are the
details:
The Company announced the convening of the Shareholders’ Annual Meeting 2010 and the
agendas on March 4, 2011 issues of Securities Times, China Securities Daily, Shanghai Securities
Times and Hong Kong Commercial Daily. The meeting was held in the multi-function hall at the
1st floor of Fangda Building on March 25, 2011. The resolutions were published on March 26,
2011 issues of Securities Times, China Securities Daily, Shanghai Securities Times and Hong
Kong Commercial Daily.
21
VII. Report of the Board of Directors
1. Business review of the report term
(1) General business situation
In year 2011, the economic environment is complicated both home and global. Continuing of debt
crisis in Europe, inflation in the country, property market control, and tightening monetary policies
have been influencing the economic growth of the whole country. The Company has overcome a
number of difficulties, kept seizing the positive opportunities, focusing on innovative development,
reinforcing the main businesses, and achieved merit performance.
In the report period, the Company’s main businesses kept growing. It achieved turnover of
RMB1.34878 billion, increased by 16.08% YOY, reached a new historic peak; net profit
attributable to the owners of the Company of RMB65.50 million, a 18.96% of growth, net profit
after deducting of non-recurring gain/loss increased by 99.21%, the profitability of main business
was increasing. As of the end of report period, the Company has order reservation amounted to
RMB1.32376 billion, account for 98% of the turnover of this year, which will lay a significant
foundation for year 2012.
(2) Main business operations
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, metro platform screen doors, a variety of HAVC equipment, water supply and drainage
equipment, central air-conditioner and their parts and components, semiconductors and their
components. Integrated circuits, lighting products and equipment, solar-energy products and their
R&D. design, production. construction, sales and after-sales service ,property management,
property leasing and parking-lot service.
Products taking over 10% of the turnover or gross profit are curtain wall, compound aluminum
board, single layer aluminum board, and screen doors. In the report term, the Company has
overcome the major influences brought by financial crisis and macro adjustment of the country,
none of them has made major impact on the Company’s financial situation and business operation,
so in the predictable future. The Company made no prediction or commitment on the profitability
of future.
During the report period, the distribution of major business turnover and profit in term of
industries, product categories, and territories were as follows:
22
In RMB0’000
Segments on industries
Gross profit
Change of Change of
On industry or Gross profit ration
Turnover Operation cost income over cost over last
product ratio (%) increased/decr
last year % year %
eased
Metal production 118,479.82 97,780.53 17.47% 23.90% 22.91% 0.67%
Railroad industry 9,823.06 7,336.12 25.32% -34.90% -43.32% 11.08%
Segments on products
Curtain wall and
118,479.82 97,780.53 17.47% 23.90% 22.91% 0.67%
material
Rail transportation
9,823.06 7,336.12 25.32% -34.90% -43.32% 11.08%
equipment
Change of income over last
Regions Turnover
year %
Domestic 121,707.55 14.70%
Overseas 7,893.49 44.69%
Total 129,601.04 16.17%
We purchased from the top 5 suppliers at the amount of RMB149.9073 million, which is 16.01%
of the yearly purchase total amount; we got the total sales of RMB378.9531 million to top 5
buyers, account for 28.10% in the main business income.
1). Sustained rapid growth of curtain wall business
In the report period, facing the adverse economic environment, the company has continued to
implement its enterprise bigger and stronger strategy, enhance product core competence, give full
play to its technology and brand advantage, push forward energetically Pearl River Delta, Yangtze
River Delta and Around Bohai large scale high-end building curtain wall market exploitation to
obtain an abundant contract reserves. In the report period the company has successively signed a
great number of large-scale energy-saving low-carbon high-end curtain wall projects such as
Rwanda International Airport Terminal (Angola), Shenzhen Baoan International Airport New T3
Terminal, Shenzhen Zhongguang Nuclear Building, Changsha Kaifu Wanda Plaza, Beijing Peony
Garden, Hefei Xindi Centre, Chengdu Huazhi Square, Wuhan Central Culture District Office
Building, Jingdezhen Imperial Estate Square, Kunshan Shimao International Town, Tsingtao Haier
Property Group Director Board Building, Erdos International Trade Mart and Hebei Langfang
Financial Street Banking Centre. The company has achieved sales revenue 1, 184.7982 million
yuan, up 17.4%. In 2011 the curtain production and material business were still the main revenue
and profit sources. The company will continue to seize the opportunity of the vigorous domestic
building curtain wall demand increasement and take its comprehensive advantage for promoting
its curtain production and material business.
The 26th World University Games was held in Shenzhen in 2011 and the company has contracted
the curtain wall project of Shenzhen Bay Sports Centre which was the opening ceremony gym of
the games. The company has constructed with its energy saving and environment protection
curtain wall products according to the low-carbon construction idea and the construction was
indeed as difficult as the Beijing Bird’s Nest in Beijing. The company has also contracted project
of Universidad Stadium curtain wall and the company has constructed the building roof with its
creation of new polycarbonate roof system which has been applied for 4 invention patents. The
company has been award Universidad Stadium Construction Outstanding Contribution Prize by
Universidad Engineering Construction and Logistic Guarantee Headquarters for the solution of
polycarbonate temperature deformation and system water resistant problems.
23
2) Railway Transportation Equipments Promoting Shenzhen Access Metro Age
The company PSD (platform screen door) product has possessed the first place in the aspects of
market share, brand influence, intellectual property and industry engineering service and
especially has distinguished itself in the Shenzhen local metro construction affairs. In June, 2011
the Shenzhen Metro 2nd-stage Construction was put into operation and it is an honor that the
metro-line 1 (Baishizhou---Airpot East), the whole metro-line 2 and the metro-4 (Minle---Qinghu)
have been equipped with the company PSD product. The company PSD product has possessed
merits of advanced performance, stable quality, reliable operation and aesthetic features and the
company comprehensive technology is in international advanced level. The company PSD
products applied in the Shenzhen Metro 2nd-stage Construction have steadily and efficiently run
with non-accident from the beginning of the whole line operation, which has indicated the
advanced technology and perfect quality of the company product and obtained great affirmation
and praise from Shenzhen Subway Company and Shenzhen residents. The company Shenzhen
Metro Line 4 Project Department has been rated as Advanced Quality Control Unit.
In the report period, the company has made efforts to greatly improved company internal control,
cost control, team building and self-dependent innovation. The company has increased project
margin rate and promoted the product performance to be more stable and reliable by optimizing
product design and strengthening field management. After years of development, the company has
possessed the core technology of PSD and obtained 197 relative patents including 45 invention
patents, which is over half proportion of the total domestic patents in this industry. Meanwhile the
company has possessed 4 software copyrights. The company has positively pushed forward
intellectual property protection and won the social respect and support.
3) Sales Increasement of LED Production
In the report period, the company has made efforts to recover LED (semiconductor lighting)
production ability and market exploitation management. As a result the company has made an
LED product sales increasement of 53.30% in 2011.
4) Promoting Production Base Arrangement and Construction
The company always pays great attention to self-dependent innovation and which has resulted in
the brand influence increasement, production competency and contract reserve. In order to solve
the contradiction between production capacity and order form in the report period, the company
has promoted to finish the construction of Dongguan Songshan Lake Production Base production
expansion construction and set it in operation before the third quarter end of 2012.
5) Continuous Company Internal Control Improvement
The company has been rated as one of 26 Major Listed Internal Control Construction Company
according to CSRC (China Securities Regulatory Commission) Shenzhen Securities Regulatory
Bureau. In the report period, the company has paid a great attention to the company internal
control and invited external enquiry agency besides establishing company internal control
construction institution. The company has formulated and performed its internal control system
implementation plan. The company has comprehensively deliberated the company management
system, business process, organizational structure and work post setting to determine the company
business process flow diagram, process description and key control point together with the control
approach, meanwhile the company has set up the very internal control group to examine and
verify the internal control achievement documents. The company has formulated Company
Internal Control System and Company Internal Control Manuscript according to the
implementation plan. The company has optimized its internal control system through preliminary
internal control audit.
6) In the report period, the company has had the honor to get the titles of 2010 Guangdong
Province 500 Enterprise and Guangdong Province 100 Manufacturing Enterprise, 2011
Guangdong Province Model Harmonious Labor Relation Enterprise, etc. The company Fangda
brand has been ranked as Shenzhen Famous Brand for 2 successive sessions.
Contracted by the wholly-owned subsidiary Shenzhen Fangda Decoration Engineering Co. Ltd,
the curtain wall project of Xiamen Five Margin Bay Operation Centre Office Building (Admiralty
24
Centre) has been awarded 2010~2011 China Construction Luban Prize (National High Quality
Project) which is the highest prize in the construction trades.
The wholly-owned subsidiary Shenzhen Fangda Automatic System Co. Ltd. has won, the only one
enterprise of the metro PSD industry, the title of 2010 China Railway Transportation Innovation
50 Enterprise. The subsidiary PSD product has passed RAMS (reliability, applicability,
maintainability and security) test and awarded RAMS Certificate issued by Bureau Veritas to
come to the first domestic enterprise that has passed the authentication. The subsidiary has already
passed through the ISO 90000 Quality Management System, ISO 14000 Environmental
Management System and GB/T28001 Occupational Health and Safety Management authentication
in the past.
The wholly-owned subsidiary Fangda New Material Co. Ltd.(Jiangxi) has awarded Jiangxi
Province Quality Management Advanced Enterprise, 2010 Nanchang City HiTech Zone Advanced
Enterprise. The project Aluminum Profile Extrusion Die 4C Integration Technology and Appliance,
which was cooperated with Nanchang University, has awarded Jiangxi Province Science and
Technology Progress Second Prize.
7) Positively Assuming Social Responsibilities
In the report period , the company has positively assumed social responsibilities by: paying taxes
74.74 million yuan, up 26.61%; achieving export revenue 12.53 million dollars, up 44.69%;
donating 233 thousand yuan and investing 0.8119 million yuan to create nearly 5000 job
opportunities; inputting 1.0886 million yuan in the field of employee knowledge and skill
improvement. The company has promoted development of new draft, technology, product
structure and patent according to clean, safety and efficient production to make contribution for
environmental protection.
(3) Capital structure in the report term
At the end of report term, the Company has total assets of RMB2.16333 billion, including
RMB664.33 million of receivable account takes 30.71% of the total assets, increased by 10.79%;
RMB254.42 million of inventory account for 11.76% of total assets, investment property of
RMB277.71 million account for 12.84%, fixed asset of RMB316.78 million account for 14.64%
of total asset, construction in process of RMB81.80 million account for 3.78% of total asset, and
short-term borrowings of RMB397 million account for 17.89% of total asset. No long-term
borrowings.
In the report term, the Company uses fair value in accounting of investment properties, sellable
financial assets, and hedging contracts. Recognition of investment property fair value was on the
―Property Evaluation Report‖ 深同诚评字（2011A）01YQC 第 002 号 issued by Shenzhen
Tongzhicheng Property Real Estate Consulting Co., Ltd. Recognition of sellable financial assets
was on closing quotation at the end of report term, and calculated according to the ―Formula of
Fair Value of Shares with Definite Locking Period and Issued Privately‖. Hedging contracts are
measured at settlement price at end of report term.
None of the sales expense, management expense, financial expense, and income tax has changed
significantly.
(4) Composition of cash flow in the report term
Net increase of cash and cash equivalent of RMB-168.70 million. Including RMB-57.05 million
occurred by business operation, which was mainly expanding of curtain wall production, and
increase of project progress and slow retrieving of project payment.Net cash flow from investment
of RMB-78.38 million, which was mainly the investment project of energy saving PV curtain wall,
PSD production expanding; net cash flow from financing was RMB-33.3409 million, which was
mainly repaying of bank loan and interest payment.
25
(5) The business status and performance analysis of the
major subsidiaries of our company. & joint-stock companies.
By December 31,2011, we wholly own 8 subsidiary enterprises, they are Shenzhen Fangda
Decoration Engineering Co., Ltd, Jiangxi Fangda New-type Aluminum Co., Ltd., Shenzhen
Fangda Yide New Material Co., Ltd., Hong Kong Junjia Groups Co, Ltd., Dongguan Fangda New
Materials Co., Ltd., Shenzhen Kexunda Software Co., Ltd. and a holding subsidiary, that is
Shenyang Fangda semiconductor lighting Co,. Ltd.
Shenzhen Fangda Decoration Engineering Co. Ltd is one of the largest manufacturers in curtain
walls which is specialized in the design, manufacture and installation of curtain walls and indoor
& outdoor windows and doors, also specialized in the design and manufacture of furniture.
Shenzhen Fangda Automation Systems Co., Ltd is the 1st in the country and 3rd in the world
manufacturer specialized in the development, manufacture and installation of platform screen
doors.
Fangda New Materials (Jiangxi) Co,. Ltd and Shenzhen Fangda Yidexin new material Co., Ltd are
specialized in the manufacture and sales of aluminum sheet, clad aluminum and other new-type
building materials, which is the largest in the country.
Shenyang Fangda semiconductor lighting Co,. Ltd is specialized in the R&D, manufacture and
sales of GAN-based integrated circuit and their parts and components which are the middle or
finished products.
Dongguan Fangda New Materials Co., Ltd. is mainly engaged in designing, manufacturing, and
installation of multiple types of curtain walls, glass walls, doors and windows, fences, and interior
roof; power supply and air-conditioning system designing and installation. At present the company
is under construction.
Shenzhen Kexunda Software Co., Ltd. is mainly involved in computer hardware and software
developing, sales, system integration, and technical consulting.
(6) Particulars about the special projects under the
Company’s control
There is no such special projects.
2. Company Future Prospect and 2012 Annual
Operation Plan
After years of sustained and high-speed development and continuous hardware capacity
investment, the company has had curtain wall production and material high-speed development
foundation, strong financial strength, brand influence, technical capacity and operation production
management capacity. The company curtain wall product has come to be the first choice of the
customer and the Fangda aluminum plate has come to be comprehensively technological advanced
in the world. Facing the complicated economic situation in 2012, the company shall insist its
Bigger and Stronger Strategy and ensure the company main business curtain wall to contribute
more for the company revenue and profit. The company shall promote PSD production innovation
and market especially the oversea market exploitation to keep the advanced place in domestic
26
industry in 2012. The company shall combine LED with the advantage of curtain wall to promote
curtain wall LED display system in 2012.
The company will accelerate Beijing, Chengdu and Shanghai production base construction in 2012
to finish the national arrangement of taking Shenzhen as the headquarter, Dongguan Songshan
Lake as the base of southern China, Beijing as the base of North and Northeast of China, Chengdu
as the base of South China, Shanghai as the base of East China. The company will promote
talent-team building, technology innovation, high-level academic exchange, technological
achievement share, intellectual property protection and China Famous Trademark declaration. The
company will optimize employee salary system, work post plan, financial system, audit system
and risk control system to decrease cost and expense. The company will optimize its operational
cash flow, strengthen enterprise culture construction, enhance the company and company product
popularity and influence.
Plan of Fund Demand and Use
The company put raised funds 180 million yuan in its energy saving curtain wall and PV curtain
wall production expansion project and PSD production expansion project in 2012 and the
company. The company will borrow from the bank and issue finance bills to afford the 0.4 billion
yuan company normal operation expense.
3. Investment in the report term
(1) Application of fund raised
Application of Proceeds from Share Placing
In RMB10
thousand
Total of proceeds 33,658.69
Total of proceeds
Total of proceeds changed to other 13,328.35
invested this year
use in the report term
Accumulated proceeds changed to
other use Total of proceeds
15,899.52
% of accumulated proceeds changed invested
to other use
If Date
Total of Investment
investment Accumulated when the
Project proceeds Total progress at Profit
project investment end of project Major
promised to be to be investment Invested realized Gains as
changed at end of report become change in
invested by the invested after this year this expected?
(including report term useable feasibility?
proceeds as adjustment term(%)(3) year
partially (2) as
proposed ＝(2)/(1)
change) proposed
Project set by
the prospectus
1.
Energy-saving
curtain wall
Sept.
and PV curtain
No 21,000.00 21,000.00 11,066.62 13,267.35 63.18 30, No
wall
2012
production
expanding
project
Sept.
2. Expanding
No 12,658.69 12,658.69 2,261.72 2,632.16 20.79 30, No
of PSD project
2012
Subtotal of
investment - 33,658.69 33,658.69 13,328.34 15,899.51 47.24 - - -
promised
Investment
project of
premium
27
surplus
Repaying of
bank loans (if - - - - -
any)
Used as current
- - - - -
capital (if any)
Subtotal of
premium - - - - -
proceeds
Total - 33,658.69 33,658.69 13,328.34 15,899.51 47.24 - - -
For the energy saving curtain wall and PV curtain wall projects were moved to Dongguan, it caused much
preparation work, therefore it was delayed.
PSD project is located in Nanchang, it was planned to use existing buildings and reduced the investment in
Reason or
office buildings and workshops, therefore the investment has decreased by RMB60 million. This caused greater
situation that
remaining in investment fund. Adjustment plan was adopted at the 1 st provisional shareholders’ meeting held
not on schedule
on March 9, 2012. The RMB60 million originally planned for PSD project was transferred to curtain wall
(on specific
project.
project)
Progress was delayed for change of the plan. Both of the projects are expected to be put into operation on
September 30, 2012.
Statement on
major change None
in feasibility
Amount, usage
and progress of
Not applicable
premium
surplus
Change of Applicable
location of The proposal on changing the location of curtain wall project was adopted at the 24 th meeting of the 5th term of
project to Board held on November 22, 2010 to reduce management cost and increase efficiency. The project was moved
invest to Dongguan, Guangdong.
Adjustment on
implementation
Not applicable
of project
invested
Pre-investment Applicable
and On September 30, 2010, it was decided to use the raised capital to replace the investment made previously by
replacement by Fangda Automatic RMB1,403,503.00 and Fangda Decoration RMB4,347,753.09. This has been verified by
proceeds CPA with report 天健正信审（2010）专字第 020722 号.
Applicable
On March 28, 2011, payment of RMB20 million was made from idle proceeds to Fangda Decoration; and
Idle proceed
RMB10 million was made to Fangda Automatic.RMB30 million was returned to the proceed account on
used as
August 19, 2011.
working capital
On August 23, 2011, RMB20 million was paid from the proceed account to Fangda Decoration, and RMB10
million to Fangda Automatic, both are not exceeding six months.
Surplus of
investment and Not applicable
causation
Application
plan of retained
Retained proceeds will be used for curtain wall expanding and PSD expanding projects in all.
fund from
financing
Problem or
situation in
using of None
proceeds and
disclosing
(2) Non- raising -fund investment
No investment financed by proceeds from share issuing in the report period.
28
4. Change in accounting policies, accounting
estimations, or the correction of the previous
important mistakes
None of change in accounting policies, accounting estimations, or the correction of the previous
important mistakes occurred in the report term.
5. Disclosing of internal controlling system related to
measuring of fair value, and relative information
On April 17, 2009, the Company produced ―Internal controlling system on measuring of fair
value‖, which was aiming to regular the recognition basis and process in measuring of fair value
of investment properties, shares of other PLCs, and so others.
29
Subjects related to measuring of fair value:
In RMB Yuan
Accumulative Impairment
Gain/loss from
change in fair value provisions Amount at end
Items Initial amount change of fair
accounted into provided in the of term
value in the term
equities current term
Financial assets:
Incld. 1. Financial assets
accounted at fair value
and changes accounted
into current gain/loss
account
Incld: Derivate financial
assets
2. Sellable financial
4,347,000.00 698,000 2,198,000.00
assets
Subtotal of financial
4,347,000.00 698,000 2,198,000.00
assets
Financial liabilities
Investment real estates 271,226,332.73 11,550,311.20 277,705,949.35
Production physical
assets
Others
Total 275,573,332.73 11,550,311.20 698,000 279,903,949.35
6. Foreign currency financial assets in possession
The Company has receivable accounts in foreign currency equals to RMB17,876,047.74 at end of
the report period.
7. Influence on profitability by the changes in the
financial instruments for measuring fair value and the
changes in the fair value of investment property:
In the report period, the change of fair value of investment property has contributed RMB11.55
million to profit. No change made by change of fair value of financial asset for sale.
30
8 Ascenda Certified Public accountants audited the
Financial Report of 2011 year and issued the standard
audit report without qualified opinions.
9. Routine works of the Board
(1) Board meetings and resolutions
1）The 27th meeting of the 5th term of Board was held on January 7, 2011 by mean of
telecommunication. The proposal of auditing fee for financial statements 2010 was approved.
2) The 28th meeting of the 5th term of Board of Directors was held in the afternoon of March
2, 2011 in the meeting room on the 5th floor of Fangda Technologies Building. The
resolutions were published by March 4, 2011 issues of Securities Times, China Securities
Journal, Shanghai Securities Daily and Hong Kong Commercial Daily.
3) The 1st meeting of the 6th term of Board of Directors was held in the morning of March
25, 2011 in the meeting room on the 5th floor of Fangda Technologies Building. The
resolutions were published by February 26 2011 issues of Securities Times, China Securities
Journal, Shanghai Securities Daily and Hong Kong Commercial Daily.
4) The 2nd meeting of the 6th term of Board of Directors was held in the afternoon of April
20th 2011 in the meeting room on the 5th floor of Fangda Technologies Building. The
resolutions were published by April 22nd 2011 issues of Securities Times, China Securities
Journal, Shanghai Securities Daily and Hong Kong Commercial Daily.
5) The 3rd meeting of the 6th term of Board of Directors was held in the afternoon of July 29,
2011 in the meeting room on the 5th floor of Fangda Technologies Building. The resolutions
were published by August 2, 2011 issues of Securities Times, China Securities Journal,
Shanghai Securities Daily and Hong Kong Commercial Daily.
6) The 4th meeting of the 6th term of Board of Directors was held in the afternoon of August
23 2011 in the meeting room on the 5th floor of Fangda Technologies Building. The
resolutions were published by August 25, 2011 issues of Securities Times, China Securities
Journal, Shanghai Securities Daily and Hong Kong Commercial Daily.
7) The 5th meeting of the 6th term of Board of Directors was held in the afternoon of October
27, 2011 in the meeting room on the 5th floor of Fangda Technologies Building. The
resolutions were published by October 29, 2011 issues of Securities Times, China Securities
Journal, Shanghai Securities Daily and Hong Kong Commercial Daily.
8) The 6th meeting of the 6th term of Board was held on December 19, 2011 by mean of
telecommunication, the Internal Control System and the Internal Control Manual (Official
Version) were approved at the meeting. The Auditing Committee of the Board was authorized
to examine the working plan of internal control assessment.
(2) Executing of the resolutions of Shareholders’ General Meeting by the Board of Directors
As authorized by the Shareholders’ General Meeting, the following jobs have been done:
1) The capitalizing of capital reserves for year 2010 was accomplished;
2) Engaged the contract about applying for general credit limits and credit guarantee with the
bank;
(3) General report of the Development Strategy Committee
31
The Working Rules of Development Strategy Committee has provided suggestions to the setting of
business target and operation plan for year 2011. The Committee inspected and monitored the
implementation of the plan and deems that the target has basically been achieved and laid good
foundation for long-term development.
The Development and Strategy Committee is affirmative on the Business Plan and Target 2012
proposed by the executives.
(4) Report of the Auditing Committee
The Auditing Committee has held six meetings in the report period, and examined the auditing
work plan, periodic financial report, profit distribution plan, employing of CPA, internal control
practice, and providing of guarantees.
Auditing Committee sent letters, since the date of annual report had been decided, to discus and
decide the timetable with the CPA. The Committee examined the financial statements prepared by
the Company before the CPA, and provided written opinions on the business operation reflected in
the financial statement.In the auditing process, the Committee keeps communicate with the CPA,
and sent another letter to make sure the Auditing Report will be provided on schedule. The
Committee examined the Financial Statement again after the CPA provided primary opinions,
listened to the report on major problems discovered in the auditing process, and basically accepted
the opinions.Upon providing of final opinion by the CPA, the Auditing Committee submitted to
the Board the voting result on the Financial Statement and the Report on Auditing Process by the
CPA of the Year, accepted the Financial Statement 2011, and deems that the CPA has fulfilled the
missions entrusted by the Company and auditing works on the Financial Statement 2011.
(5) Report of the Remuneration and Assessment Committee
Basing on the ―Rules of Remuneration and Assessment Committee‖, the Remuneration and
Assessment Committee subordinate to the Board had listened to the company’s main financial
index and the performance of the operation objectiveness in 2011 and also find out director, senior
executives performance. They think director and senior executive industrious, fulfill their duty
well and in aid of the achievement of company’ operation objectiveness. The wage information
disclosed in 2011 Annual Report are complying with the salary scheme.
10. Dividend distribution plan or capitalizing of
common reserves
The Company will not conduct profit distribution or capitalizing of reserves for year 2011. All
profit will be used for business expanding in 2012.
This profit distribution and reserve capitalizing plan is subject to approval of the Shareholders’
Annual Meeting 2011.
Dividend distribution of the latest three years
In RMB Yuan
Percentage in net profit
Net profit attributable to the
Cash dividend attributable to owners of Distributable profit
owners of the PLC in the
(tax included) the PLC in the of the year
consolidated statement
consolidated statement
2010 0.00 55,063,374.25 0.00% 89,964,099.59
2009 0.00 44,052,511.46 0.00% 57,181,879.02
Year 2008 0.00 23,260,881.91 0.00% -20,153,902.80
Dividend accumulated in the 0.00%
32
latest three years over the
average annual net profit (%)
No cash dividend proposal was raised though the Company is making profit for the report term.
Reason for making profit but not have any
Plan for the profit not distributed
dividend plan
Reserved all for expanding in 2012 Used for business expanding 2012
11. Executing of information insider administration
regulations
Since February 2012, according to the requirement of Shenzhen Stock Exchange and China
Securities Regulatory Commission Shenzhen Office, the Company has already established
―Information insider registration criteria‖, and ―External information user regulations‖, and
executed strictly.
In the report term, the Company has not found any behavior conducted by information insiders
such as illegal trading of the Company’s shares before releasing of major information which may
influence the share prices. No investigation or instruction received from regulatory authorities on
this issue.
12. The Company hasn’t changed the official
information disclosure presses and the website in the
report term.
33
VIII. Report of the Supervisory Committee
1. Meetings held in the report term, and the resolutions
1) The 13th meeting of the 5th term of Supervisory Committee was held in the afternoon of March
2, 2011 in the meeting room on the 5th floor of Fangda Technologies Building. The resolutions
were published by March 4, 2011 issues of Securities Times, China Securities Journal, Shanghai
Securities Daily and Hong Kong Commercial Daily.
2) The 1st meeting of the 6th term of Supervisory Committee was held in the morning of March
25, 2011 in the meeting room on the 5th floor of Fangda Technologies Building. The resolutions
were published by February 26 2011 issues of Securities Times, China Securities Journal,
Shanghai Securities Daily and Hong Kong Commercial Daily.
3) The 2nd meeting of the 6th term of Supervisory Committee was held in the afternoon of April
20, 2011 in the meeting room on the 5th floor of Fanda Technologies Building. The 1st Quarterly
Report 2011 was examined and passed at the meeting.
4) The 3rd meeting of the 6th term of Supervisory Committee was held in the afternoon of July
29th 2011 in the meeting room on the 5th floor of Fanda Technologies Building. The Interim
Report 2011 and the summary were examined and passed at the meeting.
5) The 4th meeting of the 6th Supervisory Committee was held in the afternoon of October 27th
2011 in the meeting room at the 5th floor of Fangda Technologies Building. The 3rd Quarterly
Report 2011 was examined on the meeting.
2. The Supervisory Committee issues the independent
opinion on the following issues:
(1)In the report period, the supervisors have been participating all of the board meetings and
shareholders’ meetings and monitored the calling and holding procedures. The Company has
already established a mature internal control system and has been improving it constantly. The
procedure of decision-making was in conformity with Company Law and Articles of Association
of the Company. The directors and senior executives had no actions of breaking national laws and
regulations and Articles of Association or damaging the interest of the Company when they
performed their duties.
(2) Ascenda Certified Public Accountants issued standard auditing report without qualified opinion
for the financial report of 2011. The financial report is frankly reflecting the financial situation and
business performance of the Company.
(3) The investment projects were the same with those promised in ―Private share placing of A
shares in 2009‖ at private issuing of A shares.
(4) No related transactions happened in the report period, thus no interests of the investors are
impaired.
34
3. Supervisory Committee’s comment on the Report of
Introspective Assessment of Internal Control
According to the Basic Rules of Enterprise Internal Control, Basic Instruction on Enterprise
Internal Control, and Instruction on Standard Operation of PLCs on the Main Board of Shenzhen
Stock Exchange issued by the authorities and SSE, the members of the Supervisory Committee
provide the following comments on the Report of Introspective Assessment of Internal Control:
(1) According to the Company Law, Securities Law, and Basic Rules of Enterprise Internal
Control, and Instruction on Standard Operation of PLCs on the Main Board of Shenzhen Stock
Exchange, with consideration of the Company’s practice and the environmental factors and risk
factors, the Company has established a relatively mature internal control system.
In 2011, as one of the 26 modeling enterprises of Shenzhen, the Company has been carrying out
improving of the control system constantly, and deepen to the subsidiaries. No behavior of the
Company was found violating the laws and regulations and internal control rules.
(2) The Company has its complete administration structure, internal control and risk control
organization, internal auditing department, which were supporting effective executing and
monitoring of the internal control system.
Overall, the Committee deems that the introspective report is frankly and objectively reflecting
every aspect of the operation of internal control system.
IX. Significant Events
1. No material lawsuit or arbitration in report period
2. No bankruptcy or restructuring issue happened in
the report term
3. Holding of other PLCs’ equities and trading of other
PLCs’ shares
(1) Holding of other PLCs’ equities and participating in commercial banks, securities dealers,
insurance companies, trust companies, and future.
35
In RMB
Gain/loss Change of
Book value Source
Initial Share of the owners’ Accountin
Stock Code Stock ID at the end of of
investment portion report equity in the g subject
term shares
term report term
Available-f
ST or-sale
Debt
600800 Magnetic 4,850,000.00 0.11% 2,198,000.00 0.00 -1,651,220.00 paid in
financial
Card kind
asset
Total 4,850,000.00 - 2,198,000.00 0.00 -1,651,220.00 - -
4. Asset acquiring or selling nor takeover or merger
events.
(1) In the report term, the Company conducted neither asset acquiring or selling nor takeover or
merger events
(2) No disposal of asset in the report term
5. No share option incentive program was
implemented in the report term
6. No material related transaction in report period
7. Material contract and guarantee
(1) Material guarantee
External Guarantee (Exclude controlled subsidiaries)
Date and Ref. of Actual date of
Related
Guarantee the announcement Amount of the occurring Actual amount Type of Completed
Term party or
provided to about the guarantee (signing date of of guarantee guarantee or not
not
guarantee agreements
Total of external guarantee
Total of external guarantee approved in the
0.00 actually occurred in the 0.00
report term (A1)
report term (A2)
Total of external guarantee
Total of external guarantee approved as of
0.00 actually occurred as of end 0.00
end of report term (A3)
of report term (A4)
Guarantee provided to controlled subsidiaries
Actual date of
Date and Ref. of the Amount of Actual Related
Guarantee occurring Type of Completed
announcement about the amount of Term party or
provided to (signing date of guarantee or not
the guarantee guarantee guarantee not
agreements
since
Fangda CCB Shenzhen engage of
30,000.00 July 11 2011 22,418.92 joint liability No No
Decoration Branch contract to 2
years upon
36
due of debt
since
engage of
Fangda CITIC Bank Shenzhen
12,000.00 Feb 18 2011 8,362.00 joint liability contract to 2 No No
Decoration Branch
years upon
due of debt
since
engage of
Fangda CCB Shenzhen
25,000.00 July 11 2011 3,927.20 joint liability contract to 2 No No
Automatic Branch
years upon
due of debt
since
engage of
Fangda SZDB Shenzhen 2,000.00
2,000.00 Nov 03 2010 2,000.00 contract to 2 No No
Automatic Tairan Branch Secured
years upon
due of debt
since
engage of
Fangda New CCB Nanchang 3,259.04
5,800.00 May 26 2011 3,259.04 contract to 2 No No
Materials Branch Secured
years upon
due of debt
since
China Import & engage of
Fangda New 2,700.00
Export Bank Shanghai 3,500.00 October 30 2011 2,700.00 contract to 2 No No
Materials Secured
Branch years upon
due of debt
since
Fangda
engage of
Decoration SPDB Shenzhen 1,651.87
1,651.87 Sept 29 2010 1,651.87 contract to 2 No No
and Fangda Branch Secured
years upon
Automatic
due of debt
Total of guarantee to subsidiaries
Total of guarantee to subsidiaries approved
79,951.87 actually occurred in the report term 56,802.12
in the report term (B1)
(B2)
Total of balance of guarantee actually
Total of guarantee to subsidiaries approved
79,951.87 provided to the subsidiaries as of end of 44,319.02
as of the report term (B3)
report term (B4)
Total of guarantee provided by the Company (i.e. total of the above two items)
Total of guarantee approved in the report Total of guarantee occurred in the
79,951.87 56,802.12
term (A1+B1) report term (A2+B2)
Total of guarantee approved as of end of Total of guarantee occurred as of the
79,951.87 44,319.02
report term (A3+B3) end of report term
Percentage of the total guarantee occurred (A4+B4) on net asset of the
41.27%
Company
In which:
Guarantees provided to the shareholders, substantial controllers and the
0.00
related parties (C)
Guarantee provided directly or indirectly to objects with over 70% of liability
0.00
on asset ratio (D)
Amount of guarantee over 50% of the net asset (E) 0.00
Total of the above 3 * (C+D+E) 0.00
Statement on the possible joint liabilities on the guarantees not due yet None
(2) No asset entrusting, leasing, contracting to or from other parties.
(3) Cash assets entrusted to others or entrusted loans in the report term:
In the report period, the Company bought financial products with fixed gains from China
Construction Bank and China Communication Bank, accumulated to RMB51 million. All of these
have been retrieved in the report period with actual gain of RMB99.3 thousand, account for 0.15%
of the net profit attributable to the owners of the parent company.
Contract party Fund Amount Investment term Type of Predicted Gain/loss If
37
recourse product income involves
Started Expired
with
on on
lawsuit
China June
Own July 21 Financial
Construction 2,000.00 22, 6.40 6.44 No
capital 2011 products
Bank 2011
China
Own June 21 July 7, Financial
Construction 1,100.00 1.90 1.96 No
capital 2011 2011 products
Bank
China June
Own June 29, Financial
Communication 2,000.00 22, 1.50 1.53 No
capital 2011 products
Bank 2011
Total - 5,100.00 - - - 9.80 9.93 -
(4) Other major contracts:
1. Shenyang Xingmo’er Shopping Mall curtain wall project is proceeding as scheduled by the
contract;
2. China ASEAN (Liuzhou) Industry Trading Center curtain wall project is proceeding as
scheduled;
3. Zhongguanghe Building curtain wall project is proceeding as scheduled;
4. Shenzhen Airport Expanding T3 Tower curtain wall project is proceeding on schedule.
5. Xi’an Metro line No.1 PSD project is proceeding on schedule.
6. Wuhan Metro Line No.2 PSD project is proceeding on schedule.
7. Dalian Metro safe door system project was on schedule.
8. Engaging and dismissing of CPAs.
As approved by the 28th meeting of the 5th term of Board and the Shareholders’ Meeting 2010,
Ascenda Certified Public Accountants was engaged as the auditing body of year 2011.
This is the 3rd time Ascenda Certified Public Accountants provides auditing service to the
Company. The reward is RMB1.3 million for auditing of the financial reports and internal control.
38
9. No capital adoption or repaying by the controlling
shareholder or related parties occurred in the report
term, Ascenda CPA has provided special statement on
this issue.
10. No motivating share bonus scheme was
implemented, promoted, or terminated in the report
term.
11. In the report term, none of the directors,
supervisors, executives, shareholders, substantial
dominators, buyer of the Company was investigated
by relative departments, executed by legal & discipline
departments, delivered to legal departments, appeared
for crime, investigated or punished by China
Securities Regulatory Commission, restricted to
security market, criticized publicly, regarded as
improper person, punished by other executive
departments, or publicly condemned by the Stock
Exchange.
39
12. No invalid trading of the Company’s shares by any
of the directors, supervisors, executives or
shareholders holding 5% or over of the Company’s
shares.
13. Reception of investigation and visiting:
Main content
involved and material
Time/date Place Way Visitors provided
Orient Securities Ltd., Business operation
March 10, The Field Guangzhou Pearl River Asset and future
2011 Company research Management Ltd. development.
Shenyin Wanguo Securities, Business operation
March 18, The Field Hualin Securities, Guangdong and future
2011 Company research Andexin Development Ltd. development.
14. Material events judged by the Board of Directors or
according to Article 67 of Securities Law, and Article
17 of “Information Disclosure Criteria of PLCs (Trial)”
Date Media Title of accouncement
（1） March 24, China Securities Journal, Announcement on returning of financing proceeds
2011 Shanghai Securities
Daily, Securities Times,
and Hong Kong
Commercial Daily
（2） April 1, China Securities Journal, Winning of bidding for Shenzhen Airport T3 tower,
2011 Shanghai Securities Zhangjiakou Chengtou Commercial Center, entering of
Daily, Securities Times, contract with Cixi Green City Property Development Ltd.
and Hong Kong for Lvcheng.Cixi project
Commercial Daily
（3） April 14, China Securities Journal, Winning of bidding for Erduosi International Trade Center,
2011 Shanghai Securities and Shenzhen Zhongguanghe Building curtain wall project
Daily, Securities Times,
and Hong Kong
Commercial Daily
（4） April 20, China Securities Journal, Announcement on capitalizing of common reserves
2011 Shanghai Securities
Daily, Securities Times,
and Hong Kong
Commercial Daily
（5） June 21, China Securities Journal, Winning of bidding for Kunshan Shimao International
2011 Shanghai Securities Town, Qingdao Haier Property Executive Building,
Daily, Securities Times, Changsha Kaifu Wanda Plaza, Beijing Mudanyuan Building,
and Hong Kong and entering of contract for Beijing Mentougou, Hebei
Commercial Daily Lanfang Financial Center curtain wall projects.
40
（6） July 12 China Securities Journal, Announcement on Releasing of Restricted A Stocks
2011 Shanghai Securities Privately Issued in Year 2009
Daily, Securities Times,
and Hong Kong
Commercial Daily
（7） August 18, China Securities Journal, Winning of bidding for Angola International Airport, and
2011 Shanghai Securities Chengdu Huazhi Plaza curtain wall projects
Daily, Securities Times,
and Hong Kong
Commercial Daily
（8） September China Securities Journal, Winning in bidding competition for Hefei Xindi Center
14, 2011 Shanghai Securities project and entered the contract for the curtain wall project
Daily, Securities Times, of Jingdezhen Diwang Plaza; winning in bidding
and Hong Kong competition for Shenyang Summer Palace City Plaza LED
Commercial Daily lighting project, and entered the contract for the outdoor
full-color LED displayer of Shenyang Wanrun Xincheng.
（9） November China Securities Journal, Winning of bidding for Wuhan Center Culture Office
21, 2011 Shanghai Securities Building, Nanchang Ligao Riverside Building #1, Shenzhen
Daily, Securities Times, Digital Music Tower, Anhui National Asset Building;
and Hong Kong entering of contracts for Shenzhen Satellite Building curtain
Commercial Daily wall, and aluminum panel for Guangdong Shaifei
Technology Garden
（10） December China Securities Journal, Announcement on progress of lawsuit against Panasonic
23, 2011 Shanghai Securities Electronic
Daily, Securities Times,
and Hong Kong
Commercial Daily
15. No investment on derivate products in the report
period.
41
X. Financial Report
1. Auditors’ Report
Ascenda Certified Public Accountants issued standard Auditors’ Report without qualified opinion
on the Company’s Financial Report 2011. (Attached hereafter)
2. Financial Statements (Attached)
3. Notes to Financial Statements (Attached)
42
XI. Documents For Reference
1. The Annual Report 2011 and the Summary with signature of the legal representative (Chinese
and English);
2. Accounting Statements with signatures and seals of the legal representative and financial
principal and chief of accounting department;
3. Original copy of the Auditors’ Report under the seal of the CPA and signed by and under the
seal of certified accountants.
4. Originals of all documents and manuscripts of Public Notices of the Company disclosed in
public in the newspapers as designated by China Securities Regulatory Commission.
Legal representative: Mr. Xiong Jianming
The Board of Directors of
China Fangda Group Co., Ltd.
April 20, 2012
43
China Fangda Group Co., Ltd.
Auditors’ Report on the Financial
Statements of 2011
天健正信审（2012）GF 字第 020011 号
天 健 正 信 会 计 师 事 务 所
Ascenda Certified Public Accountants
44
Auditors’ Report
天健正信审（2012）GF 字第 020011 号
To the shareholders of China Fangda Group Co., Ltd.:
We have audited the Financial Statements of China Fangda Group Co., Ltd. (―Fangda Group‖) attached
hereafter, including the Balance Sheet and Consolidated Balance Sheet ended December 31, 2011 and
the Income Statement, Consolidated Income Statement, Cash Flow Statement, Consolidated Cash Flow
Statement, Statement on Change of Shareholders’ Equity, Consolidated Statement on Change of
Shareholders’ Equity of the year 2011, as well as the Notes to the Financial Statements.
I. Executives’ responsibilities on the Financial Statements
Preparing of the Financial Statements according to Enterprise Accounting Standard is the responsibility
of the management of the Company. This responsibility is including: (1) to prepare the financial
statements according to the accounting standard, and ensure its fair reflection of business position; (2) to
design, implement and maintain the internal control system related to producing of the Financial
Statements, to prevent the Financial Statements from major false presentation due to cheating or error
II. Responsibilities of the CPA
Our responsibilities are to issue auditing opinions on the Financial Statements basing on the auditing
works we’ve done on them. We carried out the auditing works with compliance to Chinese CPA Auditing
Standard, which requires us to plan and implement our works on the basis of professional ethic standards,
and obtain reasonable guarantee that the Financial Statements are free of major false statements.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditor’s judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
In making those risk assessments, we consider the internal control relevant to the entity’s preparation of
financial statements in order to design audit procedures that are appropriate in the circumstances. An
audit also includes evaluating the appropriateness of the accounting polices used and the reasonableness
of the accounting estimates made by management, as well as evaluating the overall presentation of the
financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
III. Auditors’ Opinions
We believe that Fangda Group has been following with the Enterprise Accounting Standard in preparing
of the Financial Statements. The Financial Statements is reflecting, in all important aspects, the financial
situation of Fangda Group as of December 31, 2011, and the business performance and cash flow of year
2011.
CPA China
Ascenda Certified Public Accountants Zhou Junchao
Beijing, China CPA China
Chen Zhaoxin
Date of report: April 18, 2012
45
Consolidated Balance Sheet
Ended December 31, 2011
会合 01 表
Prepared by: China Fangda Group Co., Ltd. In RMB Yuan
Balance at the end Balance at the Balance at the end of Balance at the
Items Notes Items Notes
of year beginning of year year beginning of year
Current asset: Current liabilities
Short-term
Monetary capital V(I) 324,780,350.77 506,295,863.70 V(XVII) 387,000,000.00 397,000,000.00
loans
Transactional Trade off
financial assets financial liabilities
Notes receivable V(II) 6,303,353.88 16,491,007.92 Notes payable V(XVIII) 39,058,058.47 60,226,018.65
Account
Account receivable V(III) 664,333,498.11 396,673,564.76 V(XIX) 324,340,008.15 296,531,749.82
payable
Prepayment
Prepayment V(V) 25,444,369.81 20,266,020.05 V(XX) 124,950,664.78 48,308,874.47
received
Employees ’
Interest receivable 201,961.11 51,300.00 V(XXI) 20,432,966.02 14,047,721.00
wage payable
Dividend
Tax payable V(XXII) 41,002,265.87 21,520,643.71
receivable
Other account
V(IV) 53,412,523.94 39,235,264.87 Interest payable V(XXIII) 780,979.73 610,850.84
receivable
Dividend
Inventories V(VI) 254,419,907.08 280,285,486.41
payable
Non-current asset Other account
V(XXIV) 36,783,207.38 25,384,587.91
due in 1 year payable
Non-current
Other current asset liability due in 1
year
Other current
liability
Total of current
Total of current asset 1,328,895,964.70 1,259,298,507.71 974,348,150.40 863,630,446.40
liability
Non-current assets Non-current liabilities
Available-for-sale Long-term
V(VII) 2,198,000.00 4,347,000.00
financial asset borrowings
Expired investment
Bond payable
in possess
Long-term Long-term
V(XXVI) 14,700.00
receivable payable
Long-term share
Special payable
equity investment
Investment real Anticipated
V(VIII) 277,705,949.35 271,226,332.73 V(XXV) 288,000.00 347,657.52
estates liabilities
Differed income
Fixed assets V(IX) 316,775,398.58 240,554,714.52 V(XIV) 32,597,637.16 28,289,997.60
tax liability
Other
Construction in
V(X) 81,799,896.43 56,762,380.64 non-recurring V(XXVII) 4,020,000.00 4,564,850.00
process
liabilities
Total of
Engineering goods non-current 36,920,337.16 33,202,505.12
liabilities
Fixed asset
586,285.67 Total of liability 1,011,268,487.56 896,832,951.52
disposal
Production Shareholders’
physical assets equity
Gas & petrol Share capital V(XXVIII) 756,909,905.00 504,606,604.00
Intangible assets V(XI) 110,599,955.27 114,530,578.15 Capital reserves V(XXIX) 80,479,493.92 334,434,014.92
Less: Shares in
R&D expense V(XI) 914,683.63 1,182,970.28
stock
Goodwill V(XII) 8,197,817.29 8,197,817.29 Special reserves
Long-term Surplus
V(XIII) 2,600,195.30 3,062,071.65 V(XXX) 24,676,077.16 17,834,977.97
amortizable expenses reserves
Differed income Common risk
V(XIV) 33,637,737.59 31,412,500.20
tax asset provision
Other non-current
Retained profit V(XXXI) 211,777,968.57 153,115,142.18
asset
Different of
foreign currency
translation
Total of owner’s
equity belong to 1,073,843,444.65 1,009,990,739.07
the parent
company
Minor
78,213,665.93 84,337,468.25
shareholders ’
46
equity
Total of owners ’
Total of non-current assets 834,429,633.44 731,862,651.13 1,152,057,110.58 1,094,328,207.32
equity
Total of liabilities and
Total of assets 2,163,325,598.14 1,991,161,158.84 2,163,325,598.14 1,991,161,158.84
owners’ equity
Legal representative: Chief financial officer: Accounting Manager:
47
Consolidated Income Statement
Year 2011
会合 02 表
Prepared by: China Fangda Group Co., Ltd .In RMB Yuan
Amount of current Amount of Last
Items Notes
year Year
I. Turnover V(XXXII) 1,348,776,366.53 1,161,933,356.48
Less: Operation cost V(XXXII) 1,087,992,839.87 955,678,459.47
Business tax and surcharge V(33) 26,747,672.42 18,386,141.86
Sales expense V(34) 29,317,746.35 31,891,352.97
Administrative expense V(35) 105,614,972.87 94,339,378.92
Financial expenses V(36) 19,752,495.44 19,556,578.76
Asset impairment loss V(39) 19,365,374.86 9,499,099.13
Plus: Gains from fair value fluctuation (―-― for loss) V(37) 10,815,131.20 13,921,217.90
Investment gains (―-― for loss) V(38) 99,342.47 3,134,395.37
Incl. Investment gains from affiliates -42,121.60
II. Operational profit (“-“ for loss) 70,899,738.39 49,637,958.64
Plus: Non business income V(40) 11,383,948.30 20,201,611.90
Less: Non-business expenses V(41) 3,123,596.57 2,184,230.14
Incl. Loss from disposal of non-current assets V(41) 2,427,783.27 800,599.49
III. Gross profit (“-“ for gross loss) 79,160,090.12 67,655,340.40
Less: Income tax expenses V(42) 19,779,966.86 19,369,194.02
IV. Net profit (“-“ for net loss) 59,380,123.26 48,286,146.38
Including: Net profit realized by the entity taken over
before the takeover
Net profit attributable to the owners of parent company 65,503,925.58 55,063,374.25
Minor shareholders’ equity -6,123,802.32 -6,777,227.87
V. Earnings per share
(I) Basic earnings per share 0.09 0.08
(II) Diluted earnings per share 0.09 0.08
VI. Other misc gains V(44) -1,651,220.00 -4,955,100.48
VII. Total of integrated income 57,728,903.26 43,331,045.90
Total of misc. incomes attributable to the owners of the
63,852,705.58 50,108,273.77
parent company
Total misc gains attributable to the minor shareholders -6,123,802.32 -6,777,227.87
Legal representative: Chief financial officer: Accounting Manager:
48
Consolidated Cash Flow Statement
Year 2011
会合 03 表
Prepared by: China Fangda Group Co., Ltd. In RMB Yuan
Amount of current
Items Notes Amount of Last Year
year
I. Net cash flow from business operation
Cash received from sales of products and providing of services 1,207,779,388.52 1,102,826,437.95
Tax returned 2,188,518.65 1,650,016.66
Other cash received from business operation V(45) 42,758,245.86 44,470,345.04
Sub-total of cash inflow from business activities 1,252,726,153.03 1,148,946,799.65
Cash paid for purchasing of merchandise and services 1,045,527,627.48 946,657,072.80
Cash paid to staffs or paid for staffs 115,606,746.78 80,446,172.23
Taxes paid 59,068,854.01 52,925,005.20
Other cash paid for business activities V(45) 89,568,420.61 100,105,812.39
Sub-total of cash outflow from business activities 1,309,771,648.88 1,180,134,062.62
Cash flow generated by business operation, net -57,045,495.85 -31,187,262.97
II. Cash flow generated by investing
Cash received from investment retrieving 51,000,000.00 854,089.54
Cash received as investment gains 99,342.47 3,176,516.97
Net cash retrieved from disposal of fixed assets, intangible
5,948,411.61 30,073,385.67
assets, and other long-term assets
Net cash received from disposal of subsidiaries or other
operational units
Other investment-related cash received V(45) 29,969,683.50
Sub-total of cash inflow due to investment activities 87,017,437.58 34,103,992.18
Cash paid for construction of fixed assets, intangible assets and
95,845,766.81 88,201,467.27
other long-term assets
Cash paid as investment 51,000,000.00
Net cash received from subsidiaries and other operational units
Other cash paid for investment activities V(45) 18,550,000.00
Sub-total of cash outflow due to investment activities 165,395,766.81 88,201,467.27
Net cash flow generated by investment -78,378,329.23 -54,097,475.09
III. Cash flow generated by financing
Cash received as investment 340,499,960.00
Incl. Cash received as investment from minor shareholders
Cash received as loans 397,000,000.00 623,000,000.00
Cash received from bond placing
Other financing-related cash received V(45)
Subtotal of cash inflow from financing activities 397,000,000.00 963,499,960.00
Cash to repay debts 407,000,000.00 596,000,000.00
Cash paid as dividend, profit, or interests 23,046,670.20 19,817,895.61
Incl. Dividend and profit paid by subsidiaries to minor
shareholders
Other cash paid for financing activities V(45) 293,344.43 4,251,102.20
Subtotal of cash outflow due to financing activities 430,340,014.63 620,068,997.81
Net cash flow generated by financing -33,340,014.63 343,430,962.19
IV. Influence of exchange rate alternation on cash and cash equivalents 62,133.34 -91,059.81
V. Net increase of cash and cash equivalents -168,701,706.37 258,055,164.32
Plus: Balance of cash and cash equivalents at the beginning of year V(46) 468,878,715.15 210,823,550.83
VI. Balance of cash and cash equivalents at the end of year 300,177,008.78 468,878,715.15
Legal representative: Chief financial officer: Accounting Manager:
49
Consolidated Statement of Change in Shareholders’ Equity
Year 2011
会合 04 表
Prepared by: China Fangda Group Co., Ltd. In RMB Yuan
Amount of current year Amount of Last Year
Owners’ Equity Attributable to the Parent Company Owners’ Equity Attributable to the Parent Company
Less: Minor shareholders’ Total of owners’ Less:
Common Common
Shares Special Shares Special
Items Share capital Capital reserves Surplus reserves risk Retained profit Others equity equity Share capital Capital reserves Surplus reserves risk Retained profit
in reserves in reserves
provision provision
stock stock
I. Balance at
the end of 504,606,604.00 334,434,014.92 17,834,977.97 153,115,142.18 84,337,468.25 1,094,328,207.32 426,786,359.00 80,622,488.67 13,360,180.84 102,526,565.06
last year
Plus: Change
of accounting
policy
Correcting of
previous
errors
Oth
ers
II. Balance at
the beginning
504,606,604.00 334,434,014.92 17,834,977.97 153,115,142.18 84,337,468.25 1,094,328,207.32 426,786,359.00 80,622,488.67 13,360,180.84 102,526,565.06
of current
year
III. Changed
in current
252,303,301.00 -253,954,521.00 6,841,099.19 58,662,826.39 -6,123,802.32 57,728,903.26 77,820,245.00 253,811,526.25 4,474,797.13 50,588,577.12
year (“-“ for
decrease)
(I) Net profit 65,503,925.58 -6,123,802.32 59,380,123.26 55,063,374.25
(II) Other
-1,651,220.00 -1,651,220.00 -4,955,100.48
misc. income
Total of (I) and (II) -1,651,220.00 65,503,925.58 -6,123,802.32 57,728,903.26 -4,955,100.48 55,063,374.25
(III) Inputting
or
withdrawing
47,945,200.00 288,641,671.73
of
shareholders’
investment
1. Capital
input by 47,945,200.00 288,641,671.73
owners
2. Amount of
shares paid
and accounted
as owners ’
equity
3. Others
50
(IV) Profit
6,841,099.19 -6,841,099.19 4,474,797.13 -4,474,797.13
allotment
1. Providing
of surplus 6,841,099.19 -6,841,099.19 4,474,797.13 -4,474,797.13
reserves
2. Common
risk provision
3. Dividend to
shareholders
4. Others
(V) Internal
transferring of
252,303,301.00 -252,303,301.00 29,875,045.00 -29,875,045.00
owners ’
equity
1. Capital
reserves
252,303,301.00 -252,303,301.00 29,875,045.00 -29,875,045.00
transferred to
share capital
2. Surplus
reserves
transferred to
share capital
3. Making up
losses by
surplus
reserves
4. Others
(VI) Special
reserves
1. Provided
this year
2. Used this
year
(VII) Others
IV. Balance
at end of this 756,909,905.00 80,479,493.92 24,676,077.16 211,777,968.57 78,213,665.93 1,152,057,110.58 504,606,604.00 334,434,014.92 17,834,977.97 153,115,142.18
year
Legal
Chief financial officer: Accounting Manager:
representative:
51
Balance Sheet
Ended December 31, 2011
会企 01 表
Prepared by: China Fangda Group Co., Ltd. In RMB Yuan
Balance at the end Balance at the Balance at the end Balance at the
Items Notes Items Notes
of year beginning of year of year beginning of year
Current asset: Current liabilities
Monetary Short-term
24,587,261.80 30,547,718.91 210,000,000.00 200,000,000.00
capital loans
Trade off
Transactional
financial
financial assets
liabilities
Notes Notes
receivable payable
Account Account
XI(I) 5,603,561.80 7,917,726.90 1,851,490.36 1,901,490.41
receivable payable
Prepayment
Prepayment 122,369.00 366,736.00 693,045.60 715,925.50
received
Interest Employees ’
1,251,357.38 881,767.40
receivable wage payable
Dividend
57,338,200.00 43,936,500.00 Tax payable 655,031.17 930,370.30
receivable
Other account Interest
XI(II) 265,169,612.63 200,454,969.75 441,980.00 308,275.00
receivable payable
Dividend
Inventories
payable
Non-current Other
asset due in 1 account 66,697,963.87 70,841,835.18
year payable
Non-current
Other current
liability due
asset
in 1 year
Other current
liability
Total of current
Total of current asset 352,821,005.23 283,223,651.56 281,590,868.38 275,579,663.79
liability
Non-current
Non-current assets
liabilities
Available-for-s Long-term
2,198,000.00 4,347,000.00
ale financial asset borrowings
Expired
investment in Bond payable
possess
Long-term Long-term
receivable payable
Long-term
Special
share equity XI(III) 659,733,745.58 658,733,745.58
payable
investment
Investment real Anticipated
271,841,967.35 262,602,432.73
estates liabilities
Differed
Fixed assets 57,299,884.44 56,934,198.94 income tax 32,186,364.40 27,852,316.45
liability
Other
Construction in
298,019.24 87,378.64 non-recurring
process
liabilities
Total of
Engineering
non-current 32,186,364.40 27,852,316.45
goods
liabilities
Fixed asset Total of
313,777,232.78 303,431,980.24
disposal liability
Production Owners’
physical assets equity
Capital paid
Gas & petrol in (or share 756,909,905.00 504,606,604.00
capital)
Intangible Capital
9,910,673.85 10,323,163.72 41,078,838.54 295,033,359.54
assets reserves
Less: Shares
R&D expense
in stock
Special
Goodwill
reserves
Long-term
Surplus
amortizable 24,676,077.16 17,834,977.97
reserves
expenses
52
Differed Common risk
14,415,297.03 15,161,997.10
income tax asset provision
Other Retained
232,076,539.24 170,506,646.52
non-current asset profit
Total of non-current Total of owners’
1,015,697,587.49 1,008,189,916.71 1,054,741,359.94 987,981,588.03
assets equity
Total of liability and
Total of assets 1,368,518,592.72 1,291,413,568.27 1,368,518,592.72 1,291,413,568.27
owners’ equity
Legal representative: Chief financial officer: Accounting Manager:
53
Income Statement
Year 2011
会企 02 表
Prepared by: China Fangda Group Co., Ltd. In RMB Yuan
Amount of current Amount of Last
Items Notes
year Year
I. Turnover XI(IV) 44,378,065.25 42,313,848.48
Less: Operation cost XI(IV) 11,314,912.66 12,498,134.64
Business tax and surcharge 3,494,969.54 3,152,407.77
Sales expense 609,975.58 1,262,950.47
Administrative expense 20,079,220.00 21,119,463.52
Financial expenses 4,461,333.17 5,705,104.69
Asset impairment loss 427,828.17 5,290,131.62
Plus: Gains from fair value fluctuation (―-― for loss) 11,008,729.20 13,793,517.90
Investment gains (―-― for loss) XI(V) 57,402,644.44 43,936,500.00
Incl. Investment gains from affiliates
II. Operational profit (“-“ for loss) 72,401,199.77 51,015,673.67
Plus: Non business income 2,063,986.79 3,932,797.05
Less: Non-business expenses 475,666.63 564,184.44
Incl. Loss from disposal of non-current
233,537.63 133,324.44
assets
III. Gross profit (“-“ for gross loss) 73,989,519.93 54,384,286.28
Less: Income tax expenses 5,578,528.02 9,636,315.03
IV. Net profit (“-“ for net loss) 68,410,991.91 44,747,971.25
V. Earnings per share
(I) Basic earnings per share
(II) Diluted earnings per share
VI. Other misc gains -1,651,220.00 584,519.45
VII. Total of integrated income 66,759,771.91 45,332,490.70
Legal representative: Chief financial officer: Accounting Manager:
54
Cash Flow Statement
Year 2011
会企 03 表
Prepared by: China Fangda Group Co., Ltd. In RMB Yuan
Amount of current Amount of Last
Items Notes
year Year
I. Net cash flow from business operation
Cash received from sales of products and providing of
40,782,560.14 34,489,847.83
services
Tax returned
Other cash received from business operation 460,822,732.71 535,770,873.96
Sub-total of cash inflow from business activities 501,605,292.85 570,260,721.79
Cash paid for purchasing of merchandise and services 12,416,456.66 12,235,675.54
Cash paid to staffs or paid for staffs 7,361,345.99 6,390,488.89
Taxes paid 4,030,680.64 4,037,378.92
Other cash paid for business activities 522,851,939.32 605,883,833.61
Sub-total of cash outflow from business activities 546,660,422.61 628,547,376.96
Cash flow generated by business operation, net -45,055,129.76 -58,286,655.17
II. Cash flow generated by investing
Cash received from investment retrieving 20,000,000.00
Cash received as investment gains 44,000,944.44 68,300,000.00
Net cash retrieved from disposal of fixed assets, intangible
8,040.00 3,200.00
assets, and other long-term assets
Net cash received from disposal of subsidiaries or other
operational units
Other investment-related cash received
Sub-total of cash inflow due to investment activities 64,008,984.44 68,303,200.00
Cash paid for construction of fixed assets, intangible assets
1,761,027.93 1,344,712.01
and other long-term assets
Cash paid as investment 21,000,000.00 335,385,071.73
Net cash received from subsidiaries and other operational
units
Other cash paid for investment activities
Sub-total of cash outflow due to investment activities 22,761,027.93 336,729,783.74
Net cash flow generated by investment 41,247,956.51 -268,426,583.74
III. Cash flow generated by financing
Cash received as investment 340,499,960.00
Cash received as loans 210,000,000.00 410,000,000.00
Cash received from bond placing
Other financing-related cash received
Subtotal of cash inflow from financing activities 210,000,000.00 750,499,960.00
Cash to repay debts 200,000,000.00 420,000,000.00
Cash paid as dividend, profit, or interests 11,858,872.50 11,260,773.75
Other cash paid for financing activities 293,344.43 4,251,102.20
Subtotal of cash outflow due to financing activities 212,152,216.93 435,511,875.95
Net cash flow generated by financing -2,152,216.93 314,988,084.05
IV. Influence of exchange rate alternation on cash and cash
-1,066.93 -1,614.73
equivalents
V. Net increase of cash and cash equivalents -5,960,457.11 -11,726,769.59
Plus: Balance of cash and cash equivalents at the beginning of year 30,297,718.91 42,024,488.50
VI. Balance of cash and cash equivalents at the end of year 24,337,261.80 30,297,718.91
Chief
Accounting
Legal representative: financial
Manager:
officer:
55
Change in Owners’ Equities
Year 2011
会企 04 表
Prepared by: China Fangda Group Co., Ltd. In RMB Yuan
Amount of current year Amount of Last Year
Less: Less:
Common Common
Shares Special Total of owners’ Shares Special
Items Share capital Capital reserves Surplus reserves risk Retained profit Others Share capital Capital reserves Surplus reserves risk Retained prof
in reserves equity in reserves
provision provision
stock stock
I. Balance at
the end of 504,606,604.00 295,033,359.54 17,834,977.97 170,506,646.52 987,981,588.03 426,786,359.00 35,682,213.36 13,360,180.84 130,233,47
last year
Plus: Change
of accounting
policy
Correcting of
previous
errors
Other
s
II. Balance at
the beginning
504,606,604.00 295,033,359.54 17,834,977.97 170,506,646.52 987,981,588.03 426,786,359.00 35,682,213.36 13,360,180.84 130,233,47
of current
year
III. Amount
of change in
current term 252,303,301.00 -253,954,521.00 6,841,099.19 61,569,892.72 66,759,771.91 77,820,245.00 259,351,146.18 4,474,797.13 40,273,17
(“-“ for
decrease)
(I) Net
68,410,991.91 68,410,991.91 44,747,97
profit
(II) Other
-1,651,220.00 -1,651,220.00 584,519.45
misc. income
Total of (I)
-1,651,220.00 68,410,991.91 66,759,771.91 584,519.45 44,747,97
and (II)
(III)
Investment or
decreasing of 47,945,200.00 288,641,671.73
capital by
owners
1. Capital 47,945,200.00 288,641,671.73
56
inputted by
owners
2. Amount
of shares paid
and accounted
as owners ’
equity
3. Others
(IV) Profit
6,841,099.19 -6,841,099.19 4,474,797.13 -4,474,79
allotment
1.
Providing of
6,841,099.19 -6,841,099.19 4,474,797.13 -4,474,79
surplus
reserves
2. Common
risk provision
3. Dividend
to
shareholders
4. Others
(V) Internal
transferring of
252,303,301.00 -252,303,301.00 29,875,045.00 -29,875,045.00
owners ’
equity
1. Capital
reserves
252,303,301.00 -252,303,301.00 29,875,045.00 -29,875,045.00
transferred to
share capital
2. Surplus
reserves
transferred to
share capital
3. Making
up losses by
surplus
reserves
4. Others
(VI)
Special
reserves
1．本年提
取
2．本年使
用
57
(VII)
Others
IV. Balance
at end of this 756,909,905.00 41,078,838.54 24,676,077.16 232,076,539.24 1,054,741,359.94 504,606,604.00 295,033,359.54 17,834,977.97 170,506,64
year
Legal
Chief financial officer: Accounting Manager:
representative:
58
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
China Fangda Group Co., Ltd.
Notes to Financial Statements
Ye a r 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 March 25, 2011, the ―profit distribution and capitalizing plan 2010‖ was adopted on the
Shareholders’ Annual Meeting 2010. Which was: basing on the total capital shares of 504,606,604 shares,
5 bonus share was added to each 10 shares to all shareholders, totally 252,303,301 shares was capitalized
with face value of RMB1. In May 2011,the Company’s registered capital was changed to
RMB756,909,905.
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.
Mr. Xion Jianming is the substantial controller of the Company.
II. Main Accounting Policies, Estimations and Retrospection of Previous
Accounting Errors
（I） Basis for the preparation of financial statements
Preparing of the financial statements was on the assumption of the Company’s perpetual operation,
59
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
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.
（II） Statement of compliance to the Enterprise Accounting Standard
The financial report and statements are prepared with compliance to the requirement of the
Enterprise Accounting Standard. They reflect the financial position as of December 31, 2011, and
business performance and cash flow situation in Year 2011 of the Company frankly and completely.
（III） Fiscal period
The fiscal year of the Group is the solar calendar year, that is from January 1 to December 31.
（IV）Standard currency for bookkeeping
The Company takes RMB as the standard currency for bookkeeping.
（V） Accounting 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
the share equity before the date of acquisition involves with other integrated gains, such gains are
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China Fangda Group Co., Ltd. Notes to Financial Statements 2011
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.
（VI）Preparation of Consolidated Financial Statements
The Company puts subsidiaries and special entities on which the Company has substantial
controlling power in the consolidated financial statement.
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 control power is
acquired, the initial figures of the consolidated balance sheet will be adjusted as well as the related items.
（VII） 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.
（VIII） 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
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
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China Fangda Group Co., Ltd. Notes to Financial Statements 2011
Center, and the amount in standard currency will not be changed.
（IX）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 initialized 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
accumulative change of fair value originally accounted into owners’ equity corresponding to the
disposed part will be transferred over to ―investment gains‖.
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China Fangda Group Co., Ltd. Notes to Financial Statements 2011
(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
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,
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China Fangda Group Co., Ltd. Notes to Financial Statements 2011
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
Recognition of fair value is divided into three levels: firstly, when a quotation of the same asset or
liability is acquirable from an active market at the date of recognition, the fair value will be used;
secondly, when a quotation of similar asset or liability is acquirable from an active market at the date of
recognition, or in an inactive market, the fair value will be used after made reasonable adjustment;
thirdly, when no such market quotation is available for the same or similar asset or liability, the fair value
will be recognized with reference to the date used by the participators to determine the similar asset or
liability. Observable value is used rather than unobservable value.
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.
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
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‖.
（X） 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.
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China Fangda Group Co., Ltd. Notes to Financial Statements 2011
When the Company is raising finance from financial institutions such as banks against receivable
credits by means of transferring, pledging, or discounting, according to the related contracts, when the
debtor failed to repay the debt, if the Company was responsible to repay the amount, then the particular
receivable credit will be treated as pledged loan; if the Company was not responsible to repay the
amount, then the receivable credit will be treated as transferred credit, and transferring gain/loss shall be
recognized.
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. Account receivable with minor individual amount but provided of bad debt provisions
The Company categorizes the engineering projects lower than RMB8 million as ―account
receivable with minor individual amount‖; the product lower than RMB2 million as ―account receivable
with minor individual amount‖; and other receivable account lower than RMB1 million as ―other
account receivable 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.
3. 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
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China Fangda Group Co., Ltd. Notes to Financial Statements 2011
Age Providing rate (%)
2-3 yrs 30.00
Over 3 yrs 50.00
（XI） 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 realizable value. At overall verification of inventories at the end of year, when the net
realizable 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 realizable 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.
（XII） Long-term share equity investment
All of the long-term share equity investment of the Company are the investment in subsidiaries:
1. Recognition of initial investment costs
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China Fangda Group Co., Ltd. Notes to Financial Statements 2011
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.
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.
3. 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
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.
（XIII） Investment real estates
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.
（XIV） 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,
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China Fangda Group Co., Ltd. Notes to Financial Statements 2011
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
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.
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.
（XV） Construction in process
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.Construction in process includes workshops
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China Fangda Group Co., Ltd. Notes to Financial Statements 2011
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
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.
（XVI） 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.
（XVII） Intangible assets and development expenses
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China Fangda Group Co., Ltd. Notes to Financial Statements 2011
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 softwares.
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.
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:
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China Fangda Group Co., Ltd. Notes to Financial Statements 2011
(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
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.
（XVIII） Long-term amortizable expenses
Long-term amortizable expenses are those expenses paid and with beneficial period of over one
year (not included), including improving of leased fixed asset, with the amortizing method as below:
Categories Basis of amortization Period of amortizing
Expenses for improving of
Straight average on period Beneficial period
rental fixed assets
（XIX） 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 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.
（XX） Anticipated liabilities
When responsibilities occurred in connection to contingent issues, and all of the following
conditions are satisfied, they are recognized as expectable liability in the balance sheet:(1) This
responsibility is a current responsibility undertaken by the 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.
（XXI） 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
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China Fangda Group Co., Ltd. Notes to Financial Statements 2011
administration or effective control is reserved which are usually attached to ownership;(3) Amount
received can be reliably measured;(4) Related financial benefit may inflow to the Company;(5) Relative
costs, occurred or will occur, can be reliably measured.
When collection of contract payment is by differed 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. The
completion percentage is the costs occurred on the total cost.
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.
Contract costs are direct and indirect expenses occurred since the date when the contract is engaged
till the completion day. The completion percentage is the accumulated cost already occurred on the
72
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
predicted total cost.
Construction contracts completed in current term are recognized for income according to the actual
total income of the contract less income recognized in previous terms; meanwhile, the total costs of the
contract less costs recognized in previous terms are recognized as current contract costs. If the total
contract cost is predicted to be greater than the predicted total income, the predicted loss shall be
recognized as current cost instantly.
Parts of the curtain wall project under Fangda 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.
（XXII） 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 differed 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 differed 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 differed gains, the
balance of differed gains will be setoff, the exceeded part shall be recorded into current income account;
if there is no relative differed gains, record to current income account directly.
（XXIII） Differed income tax assets/ differed 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, differed income tax asset and differed 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; differed 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 differed 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 differed income tax asset is recognized.Differed 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;
At the balance sheet day, the book values of differed income tax assets are revised. Those
deductible provisional differences, which are neither enterprise merger, nor initial recognition of assets
73
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
or liabilities are recognized as income tax expenses or income into current income account.
（XXIV） Operational leasing and financial leasing
If the leasing contract transfers all of the risks and rewards attached to the asset at substantially
transferred to the lessee, then it is recognized as financial leasing, and the others are operational leasing.
1. The Company is the lender
In financial leasing, the book value of financial rental is the sum of lowest amount of the rent and
the initial expenses since the date when the lease is started.The difference between the sum of lowest
rental, initial direct expense and unsecured balance and the current value is recognized as the unrealized
financial income. Unrealized financial income is recognized as financial income at actual interest basis
to the periods of the leasing period.
Rentals from operational leasing are recognized as current gains on straight basis to the periods of
leasing. Initial direct expenses are recorded to current income account.
2. The 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.
（XXV） 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%.
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.
（XXVI） Change of main accounting policies and estimations
1. Change of Accounting Policies
No material change of accounting policies occurred in the year.
74
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
2. Change of accounting estimations
No material change of accounting estimations occurred in the year.
（XXVII） Correction of previous accounting faults
No correction of previous accounting faults occurred in the report term.
75
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
III. Taxation
Main categories and rates of taxes
1. Operation tax and surtaxes
Tax items Tax basis Rate
income from curtain wall and metro screen door
3%
Business tax installation projects
Rental and service charge income 5%
Sales income of curtain wall and aluminum materials 17%
VAT Sales income of screen door materials 17%
Sales income from LED products 17%
City maintenance and
turnover tax payable 7%、5%、1%
construction tax
Education surtax turnover tax payable 3%
Local education
turnover tax payable 2%、1%
surcharges
2. Enterprise income tax
Name of companies Tax rate Note
The headquarter 24% Note (1)
Fangda Decoration 15% Note (2)
Fangda Automatic 15% Note (3)
Fangda Yide 24% Note (1)
Shenzhen Guangke Optical & Electronics
24% Note (1)
Co., Ltd.
Shenzhen Woke 24% Note (1)
Fangda New Materials (Jiangxi) Co., Ltd. 12.5% Note (4)
Jiangxi Fangda New Type Aluminum Co.,
25%
Ltd.
Shenyang Fangda Semi-conductor
25%
Lighting Co., Ltd.
Dongguan Fangda New Material Co., Ltd. 25%
Shenzhen Kexunda Software Co., Ltd. 25%
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%.
(2) 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
76
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
Tax for three years (2009-2011) since the qualifications were 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 Automatic was entitled to enjoy 15% of Corporation
Tax for three years (2009-2011) 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% in 2011.
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.
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
（I） Profiles of the subsidiaries
1. Subsidiaries founded acquired from investment
Name of
Ownershi Registered Legal
the Business
p of the Reg. Add. capital represe Business scope
subsidiari property
subsidiary RMB0’000 ntative
es
Designing, manufacturing,
Fangda Fully-own and installation of curtain
Xiong
Decoratio ed Shenzhen Ltd. liability 31,000.00 walls, glass shields, doors,
Jianwei
n subsidiary windows, fences, and
ceilings.
Designing, technical
Fully-own developing, installation, and
Fangda Lin
ed Shenzhen Ltd. liability 10,500.00 sales of PSD system; import
Automatic Kebin
subsidiary & export; installation and
processing of PSD.
Fully-own Yang Developing, designing,
Fangda Sino-foreign
ed Shenzhen USD320.00 Xiaozh manufacturing of new type
Yide Co. joint venture
subsidiary uan composite materials
Production and selling of new
materials, compound
Ltd. liability materials, curtain walls,
(joint venture doors, windows, metal
Fangda Fully-own between Yang structures, metal products,
New ed Nanchang companies USD1,200.00 Xiaozh environment protection
Material subsidiary from Taiwan, uan products, metallurgy
Hong Kong or equipment, machinery,
Macao) aluminum products, heat
radiation materials,
macromolecule materials.
Desgining, manufacturing,
Ltd. liability
sales and installation of
Fangda Fully-own (Joint venture Yang
aluminum sections for curtain
Aluminiu ed Nanchang with foreign 2,000.00 Xiaozh
walls, doors, and windows;
m subsidiary invested uan
decoration design, water and
company)
power supply equipment, air
77
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
conditioner installation.
House renting, equipment
renting.
Fully-own
BODY
HK Junjia ed HK HKD1.00 Investment
CORPORATE
subsidiary
Manufacturing of
semiconductor lighting
material and chips; lighting
source encapsulation;
developing, manufacturing,
technical consulting of
semiconductor lighting
Controlle products; developing,
Wang
Shenyang d designing, manufacturing,
Shenyang Ltd. liability 20,000.00 Shengg
Fangda subsidiari engineering, installation and
uo
es 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
Fully-own decoration; water and power
Dongguan Ltd. liability
ed system installation;
New (Sole Xiong
subsidiary Dongguan 21,280.00 installation and trade of
Material investment by Jianwei
of air-conditioning system;
Co., Ltd. legal person)
subsidiary 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
Ltd. liability
Fully-own Developing of hardware and
Kexunda (Sole Lin
ed Shenzhen 100.00 software, system assembling,
Co. investment by Kebin
subsidiary technical consulting
legal person)
Name of Actual Balance of other items
Share
the Voting investment at actually formed net
proportion Consolidated or not
subsidiari rights (%) end of year investment in the
(%)
es (RMB0’000) subsidiaries
Fangda
Decoratio 100.00 100.00 31,000.00 Yes
n
Fangda
100.00 100.00 18,377.73 Yes
Automatic
Fangda
100.00 100.00 USD320.00 Yes
Yide Co.
Fangda
New 100.00 100.00 USD1,200.00 Yes
Material
Fangda
Aluminiu 100.00 100.00 2,000.00 Yes
m
78
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
HK Junjia 100.00 100.00 HKD1.00 Yes
Shenyang
64.58 64.58 10,885.21 Yes
Fangda
Dongguan
New
100.00 100.00 21,280.00 Yes
Material
Co., Ltd.
科迅达公
100.00 100.00 100.00 Yes
司
Name of Minor Amount for deducting
the Ownershi Organizati minor shareholder’s
shareholders’ Note
subsidiari p type on code equity in the minor
equity
es shareholder’s equity
Fangda
Corporati 19244418-
Decoratio
on 2
n
Fangda Corporati 75425429-
Automatic on 3
Fangda Corporati 61929454-
Yide Co. on 0
Fangda
Corporati 74852611-
New
on 7
Material
Fangda
Corporati 15830664-
Aluminiu
on 0
m
3007554-2
Corporati
HK Junjia 000-04-10
on
-4
Minority shareholders’ equity
Shenyang Corporati 66254891-
78,213,665.93 -6,123,802.32 in Shenzhen Woke already
Fangda on 3
included
Dongguan
New Corporati 56457096-
Material on 5
Co., Ltd.
Kexunda Corporati 58409491-
Co. on 9
2. Subsidiaries procured from merger of companies under different control
Name of Registered
Ownershi Legal
the Business capital
p of the Reg. Add. represen Business Scope
subsidia property (RMB0’0
subsidiary tative
ries 00)
Subsidiar R&D, designing, production, after
Wang
Shenzhe y of Ltd. service of LED products; installation
Shenzhen 1,000.00 Shenggu
n Woke controlled liability of LED color displayer, city and road
o
subsidiary lighting system.
Name of Actual
the investmen Balance of other items
Share
subsidia Voting rights t at end of actually formed net
proportion Consolidated?
ries (%) year investment in the
(%)
(Full (RMB0’0 subsidiaries
name) 00)
Shenzhe
64.58 64.58 1,899.13 Yes
n Woke
Name of Minor Amount for deducting
the Ownershi Organization sharehold minor shareholder’s
Note
subsidia p type code ers’ equity in the minor
ries equity shareholder’s equity
Shenzhe Corporati
72855858-4 See notes See notes See notes
n Woke on
Note: Shenzhen Woke was the subsidiary under direct control of Fangda Guoke; while Fangda
79
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
Guoke was taken over by Shenyang Fangda, the share equity is planned to under possession of Shenyang
Fangda. The relative procedures are under process. However Shenzhen Woke is under the control of
Shenyang Fangda before or after the takeover.The minority shareholders’ equity of Shenzhen Woke has
already been included in the minority shareholders’ equity of Shenyang Fangda, thus it is not presented
separately in this table.
（II） The change of consolidation scope
The consolidation scope has changed in the report period for Kexunda Co. was added. Profiles of
Kexunda is presented in Note IV (I)-1.
（III） The entity newly consolidated this period
Subsidiary newly consolidated
Net asset at end Net profit
Name Reason of change
of year realized this year
Kexunda Co. Invest to found 967,524.47 -32,475.53
（IV）Takeover occurred this period
Main assets taken over Main liabilities taken over
Type of takeover
Items Amount Items Amount
Monetary capital 2,197,053.92 Account payable 2,076,357.60
Other account
Account receivable 2,993,815.76 15,878,714.59
payable
Other
Inventories 8,137,128.03 non-recurring 2,284,850.00
Takeover under common liabilities
control Long-term share
10,419,311.00
equity investment
Fixed assets 2,780,733.90
Construction in
37,412,882.18
process
Intangible assets 7,918,765.04
Total of asset taken Total of liability
75,482,751.95 21,200,085.21
over merged
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. On May 18, 2011, the Decision to Takeover was approved by the shareholders’ meeting of
Shenyang Fangda. The Takeover Contract was engaged on the same day. The takeover day was set on
June 30, 2011. This was a takeover under same control for Fangda Guoke is under control of Shenyang
Fangda before and after the takeover.
80
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
V. Notes to the consolidated financial statements
(I) Monetary capital
Book balance at end of year Book balance at beginning of year
Items Excha Excha
Original Translated to Original Translated to
nge nge
currency RMB currency RMB
rate rate
I. Cash
RMB 25,877.99 1.00 25,877.99 9,841.07 1.00 9,841.07
USD
0.810 0.8509
HKD 1,911.16 1,549.38 4,767.80 4,057.07
7 3
Cash subtotal 27,427.37 13,898.14
II. Bank savings
310,189,42 310,189,424. 478,568,182. 478,568,182.
RMB 1.00 1.00
4.04 04 50 50
6.300
USD 109,114.69 687,520.76 346,670.47 6.6227 2,295,894.52
9
0.8509
HKD 74.57 63.45
3
Bank saving 310,876,944. 480,864,140.
subtotal 80 47
III. Other monetary
capital
12,590,607. 12,590,607.4 25,417,161.5 25,417,161.5
RMB 1.00 1.00
47 7 0 0
6.300
USD 203,998.02 1,285,371.13 100.20 6.6227 663.59
9
HKD
Subtotal of other 13,875,978.6 25,417,825.0
monetary capital 0 9
324,780,350. 506,295,863.
Total
77 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 and the sleeping account of RMB12,734.52. 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 RMB13,875,978.60 under other monetary capital was mainly deposit for bank
accepted notes and letter of guarantee, including deposit for accepted notes and guarantee letter which
are not regarded as cash equivalent at preparing of cash flow statement.
Note 3: Book balance of monetary fund at end of year has decreased by 35.85% from the previous
year, which was caused by completion of private issuing of shares.
81
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
(II) Notes receivable
(1) Category of notes receivable
Book balance at beginning of
Categories Book balance at end of year
year
Bank acceptance 6,303,353.88 2,262,000.00
Commercial acceptance 14,229,007.92
Total 6,303,353.88 16,491,007.92
(2) Top 5 notes transferred to account receivable for the issuer is not able to exercise
Issuer Date of issue Expired on Amount Note
Shenzhen
Wanghai Yikang
Commercial
Industry 2010-12-30 2011-3-31 14,229,007.92
draft denied
Development
Co., Ltd.
Total 14,229,007.92
(3) Top 5 notes endorsed but not due yet are:
Issuer Date of issue Expired on Amount
Shenyang Yuanda Aluminum Engineering Co.,
2011-11-24 2012-5-18 2,000,000.00
Ltd.
Xuanhua Shengtian Mining Co., Ltd. 2011-11-22 2012-5-22 1,000,000.00
Jiangyin Yinben Steel & Iron Trade Co., Ltd. 2011-9-26 2012-3-26 1,000,000.00
Zhejiang Sunda New Material Co., Ltd. 2011-10-20 2012-4-20 1,000,000.00
Xihua Xinglong Mining Co., Ltd. 2011-11-22 2012-5-12 1,000,000.00
Total 6,000,000.00
(III) Account receivable
(1) Account receivable on categories
Book balance at end of year
Book value Bad debt provision
Categories Provid
Ratio ing Net amount
Amount Amount
(%) rate
(%)
Receivables with major
individual amount and bad
debt provision provided
individually
Receivables provided bad debt 121,679,764. 664,333,498.
786,013,262.74 97.43 15.48
provision in groups 63 11
Incl. Receivable accounts not 121,679,764. 664,333,498.
786,013,262.74 97.43 15.48
consolidated 63 11
121,679,764. 664,333,498.
Sub-total of group 786,013,262.74 97.43 15.48
63 11
Account receivable with minor
20,731,784.6
individual amount but bad debt 20,731,784.64 2.57 100.00
4
provision is provided
82
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
100.0 142,411,549. 664,333,498.
Total 806,745,047.38 17.65
0 27 11
Book balance at beginning of year
Book value Bad debt provision
Categories Provid
Ratio ing Net amount
Amount Amount
(%) rate
(%)
Receivables with major
individual amount and bad
debt provision provided
individually
Receivables provided bad debt 111,244,947.2 396,673,564.
507,918,512.04 96.95 21.90
provision in groups 8 76
Incl. Receivable accounts not 111,244,947.2 396,673,564.
507,918,512.04 96.95 21.90
consolidated 8 76
111,244,947.2 396,673,564.
Sub-total of group 507,918,512.04 96.95 21.90
8 76
Account receivable with minor
100.0
individual amount but bad debt 15,988,232.58 3.05 15,988,232.58
0
provision is provided
100.0 127,233,179.8 396,673,564.
Total 523,906,744.62 24.29
0 6 76
Note: the closing balance of receivable accounts has increased by 54.01% over the opening balance,
which was caused by expanding of curtain wall business, increase of project progressive payment, and
slow retrieving of project payment.
Including: foreign currencies
Book balance at end of year Book balance at beginning of year
Items Original Exchang Translated to Original Exchang Translated to
currency e rate RMB currency e rate RMB
10,377,078.7 3,413,051.3
USD 1,646,920.08 6.3009 6.6227 22,603,614.98
3 2
9,256,528.9
HKD 9,256,528.95 0.8107 7,504,268.02 0.85093 7,876,658.18
5
Canadian $ 5,465.72 6.1777 33,765.58
Australian $ -40,000.00 6.4093 -256,372.00
17,658,740.3
Total 30,480,273.16
3
Note: The Australian Dollar -40,000.00AUD was the payment due from KiKuKaWa Industry
International Ltd to Fangda New Material Co., Ltd. The prepayment was made in AUD, but the
succeeding payment will be in HKD.
Account receivables on which bad debt provisions are provided on age basis in the group:
Book balance at end of year
Age Proportio Bad debt
Amount Net amount
n provision
within 1 year 476,396,053.72 59.05% 14,291,881.61 462,104,172.11
1-2 yrs 98,991,085.32 12.27% 9,899,108.54 89,091,976.78
83
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
2-3 yrs 39,121,436.82 4.85% 11,736,431.05 27,385,005.77
Over 3 yrs 171,504,686.88 21.26% 85,752,343.43 85,752,343.45
Total 786,013,262.74 97.43% 121,679,764.63 664,333,498.11
Book balance at beginning of year
Age Proportio Bad debt
Amount Net amount
n 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
Account receivable with minor individual amount but bad debt provision is provided
Description of the
Book value at Bad debt
receivable Rate Reason
end of year provision
accounts
Aged over 5 years, not expectable
Trade receivable 1,373,041.48 1,373,041.48 100.00%
to be retrieved
Curtain wall Aged over 5 years, not expectable
803,340.45 803,340.45 100.00%
project receivable to be retrieved
Curtain wall Aged over 5 years, not expectable
660,625.41 660,625.41 100.00%
project receivable to be retrieved
Aged over 5 years, not expectable
Trade receivable 648,100.95 648,100.95 100.00%
to be retrieved
Aged over 5 years, not expectable
Trade receivable 563,320.60 563,320.60 100.00%
to be retrieved
Curtain wall Aged over 5 years, not expectable
430,629.58 430,629.58 100.00%
project receivable to be retrieved
Aged over 5 years, not expectable
Trade receivable 435,713.62 435,713.62 100.00%
to be retrieved
Aged over 5 years, not expectable
Trade receivable 433,868.60 433,868.60 100.00%
to be retrieved
Curtain wall Aged over 5 years, not expectable
354,177.00 354,177.00 100.00%
project receivable to be retrieved
Curtain wall Aged over 5 years, not expectable
346,573.70 346,573.70 100.00%
project receivable to be retrieved
Aged over 5 years, not expectable
Trade receivable 337,968.00 337,968.00 100.00%
to be retrieved
Curtain wall Aged over 5 years, not expectable
316,861.34 316,861.34 100.00%
project receivable to be retrieved
Curtain wall Aged over 5 years, not expectable
300,000.00 300,000.00 100.00%
project receivable to be retrieved
Total 7,004,220.73 7,004,220.73
Note: As of December 31, 2011, the account receivable, on which the Company has provided bad
debt provisions, is amounted to RMB20,731,784.64.
(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 same year, or such account with major amount.
(3) No receivable account has been written off in current year.
(4) No receivable account due from shareholders with over 5% (included) of the Company’s shares
84
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
or related parties.
(5) The top 5 debtors at end of the year:
Relation with the Balance at % in total
Name of the companies Age
Company end of year receivables
Xin’Mo’er Property
Curtain wall 39,542,698.6 within 1
Development (Shenyang) Co., 4.90
client 2 year
Ltd.
Shenzhen Metro Group Co., Screen door 37,553,364.2 within 1
4.65
Ltd. client 6 year
within 1
2,765,943.63
Shenzhen Greenview Property Curtain wall year
3.85
Co., Ltd. client 28,283,148.6
1-2 yrs
2
China Construction Bureau III, Curtain wall 32,500,256.0 within 1
4.03
No.1 Construction Co., Ltd. client 2 year
Liuzhou Dongcheng
Curtain wall 31,026,472.1 within 1
Investment Development Co., 3.85
client 6 year
Ltd.
171,671,883.
Total 21.28
31
(IV) Other account receivable
(1) Other account receivable is categories as the followings:
Book balance at end of year
Book value Bad debt provision
Categories
Providin Net amount
Ratio
Amount Amount g rate
(%)
(%)
Other receivables with major
individual amount and bad 1,220,316.8
1.82 1,220,316.84 100.00
debt provision provided 4
individually
Other receivables provided 63,039,807. 53,412,523.
93.91 9,627,283.90 15.27
bad debt provision in groups 84 94
Incl. Receivable accounts not 63,039,807. 53,412,523.
93.91 9,627,283.90 15.27
consolidated 84 94
63,039,807. 53,412,523.
Sub-total of group 93.91 9,627,283.90 15.27
84 94
Other account receivable with
2,865,928.1
minor individual amount but 4.27 2,865,928.16 100.00
6
bad debt provision is provided
67,126,052. 13,713,528.9 53,412,523.
Total 100.00 20.43
84 0 94
Book balance at beginning of year
Book value Bad debt provision
Categories
Providin Net amount
Ratio
Amount Amount g rate
(%)
(%)
Other receivables with major
individual amount and bad 1,220,316.8
2.33 1,220,316.84 100.00
debt provision provided 4
individually
85
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
Other receivables provided 48,373,161. 39,235,264.
92.25 9,137,896.60 18.89
bad debt provision in groups 47 87
Incl. Receivable accounts not 48,373,161. 39,235,264.
92.25 9,137,896.60 18.89
consolidated 47 87
48,373,161. 39,235,264.
Sub-total of group 92.25 9,137,896.60 18.89
47 87
Other account receivable with
2,841,928.1
minor individual amount but 5.42 2,841,928.16 100.00
6
bad debt provision is provided
52,435,406. 13,200,141.6 39,235,264.
Total 100.00 25.17
47 0 87
Including: foreign currencies
Book balance at end of year Book balance at beginning of year
Items Original Exchang Translated to Original Exchang Translated to
currency e rate RMB currency e rate RMB
USD 34,488.31 6.3009 217,307.39 107,953.27 6.6227 714,942.12
Total 217,307.39 714,942.12
Other account receivables on which bad debt provisions are provided on age basis in the group:
Book balance at end of year
Age Proportio Bad debt
Amount Net amount
n provision
within 1 year 37,459,135.30 55.80% 1,123,917.85 36,335,217.45
1-2 yrs 9,156,077.06 13.64% 915,607.70 8,240,469.36
2-3 yrs 3,122,696.47 4.65% 936,808.94 2,185,887.53
Over 3 yrs 13,301,899.01 19.82% 6,650,949.41 6,650,949.60
Total 63,039,807.84 93.91% 9,627,283.90 53,412,523.94
Book balance at beginning of year
Age Proportio Bad debt
Amount Net amount
n 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
Other account receivable with major amount and provided bad debt provision individually or minor
amount but bad debt provision provided individually at end of year:
Description of Book value at Bad debt
Rate Reason
other receivables end of year provision
Deposite Aged over 5 years, not expectable
1,220,316.84 1,220,316.84 100.00%
receivable to be retrieved
Deposite Aged over 5 years, not expectable
300,000.00 300,000.00 100.00%
receivable to be retrieved
Deposite Aged over 5 years, not expectable
224,875.84 224,875.84 100.00%
receivable to be retrieved
Deposite Aged over 5 years, not expectable
159,800.00 159,800.00 100.00%
receivable to be retrieved
86
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
Deposite Aged over 5 years, not expectable
150,000.00 150,000.00 100.00%
receivable to be retrieved
Total 2,054,992.68 2,054,992.68
Note: (1) Account receivable of which fully provided bad debt provision is amounted to
RMB4,086,245.00.
(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 same year, or such account with major amount.
(3) No other receivable account has been written off in current year.
(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 receivables:
Portion in total
Name of the Relation with Balance at
Specification Age other receivable
companies the Company end of year
accounts (%)
payment for
Property
Ding Tao purchasing 4,300,000.00 within 1 year 6.41
buyer
of house
Administrati within 1 ye
2,320,483.21
on fee of Contractor of ar
Wang Weihong 5.19
curtain wall the project
1,161,763.77 1-2 yrs
project
Zhangjiakou
Urban
Contract
Development Client 3,120,543.15 within 1 year 4.65
security
Investment Co.,
Ltd.
Administrati 1,150.00 within 1 year
on fee of Contractor of
Xin Song 1,433,887.00 1-2 yrs 4.08
curtain wall the project
project 1,305,290.61 2-3 yrs
Cixi Fanshi
Contract
Property Co., Client 2,472,473.75 within 1 year 3.68
security
Ltd.
16,115,591.4
Total 24.01
9
(V) Prepayment
(1) Demonstrated by ages:
Book balance at end of year
Age Bad debt
Amount Ratio (%) Net amount
provision
within 1 year 23,321,608.14 88.29 23,321,608.14
1-2 yrs (included) 990,764.78 3.75 12,521.99 978,242.79
2-3 yrs (included) 377,369.89 1.43 113,210.97 264,158.92
Over 3 yrs 1,726,014.24 6.53 845,654.28 880,359.96
Total 26,415,757.05 100.00 971,387.24 25,444,369.81
Age Book balance at beginning of year
87
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
Bad debt
Amount Ratio (%) Net amount
provision
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
(2) Other top 5 debtors of prepayments:
Relation Book
Name of the % in total Reason of
with the balance at Age
companies prepayment unsettled
Company end of year
Dongguan Nanbo
3,265,406.9 within 1
Engineering Glass Co., Supplier 12.36 货未到
5 year
Ltd.
Guangdong Jianmei 1,865,228.4 within 1
Supplier 7.06 货未到
Aluminum Co., Ltd. 1 year
Tianjing Nanbo
1,193,228.4 within 1
Engineering Glass Co., Supplier 4.52 货未到
2 year
Ltd.
Qinghuangdao 100,000.00 2-3 yrs
Wanxiang Aluminum Supplier 4.05 not settled yet
Co., Ltd. 970,751.02 Over 3 yrs
Beijing Chengxin
within 1
Zhong’ao Curtain Wall Supplier 831,000.00 3.15 货未到
year
Engineering Co., Ltd.
8,225,614.8
Total 31.14
0
(3) Details of prepayment with large amount and aged over one year:
Book balance at end Reason of
Name of the companies Age
of year overdue
Qinghuangdao Wanxiang Aluminum 100,000.00 2-3 yrs
not settled yet
Co., Ltd. 970,751.02 Over 3 yrs
China Construction No.8 Co., Ltd.
496,429.80 1-2 yrs not settled yet
Dalian Division
Huizhou Decai Import & Export Co. 470,738.96 Over 3 yrs not settled yet
Beijing Shengdabotong
389,881.70 1-2 yrs not settled yet
Construction Co., Ltd.
Total 2,427,801.48
(4) No prepayment account involved with shareholders with over 5% (included) of the Company’s
shares or related parties.
(VI) Inventories
(1) Details of inventories
Book balance at end of year Book balance at beginning of year
Items Impairment Impairment
Amount Book value Amount Book value
provision provision
Raw 37,888,262.6 56,115,354.6 55,889,811.1
materials
361,902.41 37,526,360.23 225,543.53
4 5 2
88
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
Book balance at end of year Book balance at beginning of year
Items Impairment Impairment
Amount Book value Amount Book value
provision provision
Product
16,207,626.7 43,221,748.5 43,221,748.5
in 16,207,626.78
process 8 7 7
Finished
14,367,024.0 3,609,182.2 14,201,337.8 2,224,683.5 11,976,654.3
goods in 10,757,841.82
stock 8 6 4 4 0
Asset
formed
by 183,792,677. 183,792,677.3 164,193,924. 164,193,924.
constructi 32 2 07 07
on
contract
Low
price
consuma
263.29 263.29 659,849.04 659,849.04
ble
OEM
materials
624,811.54 624,811.54 3,042,245.47 3,042,245.47
On-road
goods
5,430,367.04 5,430,367.04 1,301,253.84 1,301,253.84
Goods
delivered
79,959.06 79,959.06
258,390,991. 3,971,084.6 254,419,907.0 282,735,713. 2,450,227.0 280,285,486.
Total
75 7 8 48 7 41
(2) Change of inventory impairment provision:
Book Decreased this year Book
balance at Provided in current
Categories Transferr balance at
beginning year Written back
ed end of year
of year
129,721.6
Raw materials 225,543.53 266,080.53 361,902.41
5
Products in 2,224,683.5 359,153.5 3,609,182.2
1,751,239.55 7,587.27
stock 4 6 6
2,450,227.0 488,875.2 3,971,084.6
Total 2,017,320.08 7,587.27
7 1 7
(3) Basis of providing impairment provision and situation of writing back
Portion of
Reasons of inventory
Basis of providing written back in
Categories impairment provision
impairment provision balance at end
written back
of term
Realizable net value lower
Raw materials
than realizable cost
Realizable net value lower increase of realizable net
Products in stock 0.003%
than realizable cost value
(VII) Available-for-sale financial asset
Disposable financial assets are categorized as the following:
Items Fair value at end of year Fair value at beginning of year
Available-for-sale bonds
Available-for-sale equity
2,198,000.00 4,347,000.00
instruments
Total 2,198,000.00 4,347,000.00
89
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
Less: impairment provision for
available-for-sale financial assets
Net amount 2,198,000.00 4,347,000.00
Note 1: The financial asset for sale is the 700,000 current shares of Tianjing Global Magnetic Card
Co., Ltd. with the initial cost of RMB4,850,000.00.
Note 2: The closing balance of financial asset for sale decreased by 49.44%, which was caused by
drop of fair value in the year.
(VIII) Investment real estates
(1) Fluctuation of investment properties on fair value basis
Increased this year Decreased this year
Fair value at For own
use or Gain/loss Fair value at
Items beginning of Transferred
Purchased transferred from change Disposed end of year
year for own use
from of fair value
inventory
I. Total
188,914,883.84 2,566,320.00 1,440,258.46 184,908,305.38
costs
1. Houses
& 188,914,883.84 2,566,320.00 1,440,258.46 184,908,305.38
buildings
2. Land
using
rights
II. Total of
fair value 82,311,448.89 11,550,311.20 735,180.00 328,936.12 92,797,643.97
fluctuation
1. Houses
& 82,311,448.89 11,550,311.20 735,180.00 328,936.12 92,797,643.97
buildings
2. Land
using
rights
III. Total
of
investment
271,226,332.73 11,550,311.20 3,301,500.00 1,769,194.58 277,705,949.35
property
book
value
1. Houses
& 271,226,332.73 11,550,311.20 3,301,500.00 1,769,194.58 277,705,949.35
buildings
2. Land
using
rights
Note 1: Recognition of investment property on fair value is based on the Property Appraisal Report
(深同诚评字（2011A）01YQC 第 002 号) issued by Shenzhen Tongzhicheng Land and Property
Appraisal Co., Ltd.
Note 2: Investment property disposal was RMB2,566,320.00, which was the disposal of Wuhan
Wanda Commercial Plaza by Fangda Decoration, the investment property decreased by
RMB2,566,320.00 correspondingly, and the accumulated change of fair value transferred off amouted to
RMB735,180.00.
Note 3: Among the investment properties, Fangda Technology Building (with closing fair value
RMB188,040,491.21) has been set on pledge for loans. See Note V (XVI).
90
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
(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
RMB30,084,655.76.
(3) Property converting and change of measurement basis
Decreasing of investment property by RMB1,440,258.46 was the Room 802 of Fangda Technical
Building transferred for self-use as approved at the 2nd meeting of the 6th term of Board.
(IX) Fixed assets
(1) Change of fixed assets and accumulated depreciations:
Book balance at Decreased this Book balance at
Items Increased this year
beginning of year year end of year
I. Total value of
384,511,171.89 149,206,765.83 11,107,420.92 522,610,516.80
original fixed assets
1. Houses & buildings 212,269,992.86 39,924,520.07 6,454,857.19 245,739,655.74
2. Machinery 132,090,633.96 99,311,077.06 3,578,279.94 227,823,431.08
3. Automobile 11,248,300.78 1,119,189.02 12,680.00 12,354,809.80
4. Electronics and
28,902,244.29 8,851,979.68 1,061,603.79 36,692,620.18
other devices
Increased this Provided this
— — —
year year
II. Total of
accumulative 142,559,061.28 49,244,923.41 16,403,878.73 4,623,771.29 203,584,092.13
depreciation
1. Houses & buildings 28,895,411.02 5,660,434.99 1,157,262.29 33,398,583.72
2. Machinery 91,185,236.25 49,244,923.41 6,852,956.45 2,650,662.78 144,632,453.33
3. Automobile 6,883,467.49 748,983.85 11,412.00 7,621,039.34
4. Electronics and
15,594,946.52 3,141,503.44 804,434.22 17,932,015.74
other devices
III. Total of fixed asset
241,952,110.61 — — 319,026,424.67
net value
1. Houses & buildings 183,374,581.84 — — 212,341,072.02
2. Machinery 40,905,397.71 — — 83,190,977.75
3. Automobile 4,364,833.29 — — 4,733,770.46
4. Electronics and
13,307,297.77 — — 18,760,604.44
other devices
IV. Total of
accumulative fixed
1,397,396.09 853,819.00 189.00 2,251,026.09
assets impairment
provision
1. Houses & buildings 853,819.00 — 853,819.00
2. Machinery 1,397,396.09 — 189.00 1,397,207.09
3. Automobile — —
4. Electronics and
— —
other devices
V. Total of fixed asset
240,554,714.52 — — 316,775,398.58
book value
1. Houses & buildings 183,374,581.84 — — 211,487,253.02
2. Machinery 39,508,001.62 — — 81,793,770.66
91
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
Book balance at Decreased this Book balance at
Items Increased this year
beginning of year year end of year
3. Automobile 4,364,833.29 — — 4,733,770.46
4. Electronics and
13,307,297.77 — — 18,760,604.44
other devices
Note 1: Depreciation provided this year was RMB16,403,878.73.
Note 2: Fixed asset increased this year with original value of RMB149,206,765.83, including:
RMB108,854,042.53 transferred from construction in process (including: RMB86,436,969.71 of fixed
asset original value written back and RMB49,244,923.41 of depreciation at transferring of Fangda
Guoke); and adjustment of other properties such as investment property into self-owned property, and
adjustment of newly purchased fixed asset rearrangement.
Note 3: Fixed asset decreased this year with original value of RMB11,107,420.92. Including
RMB5,072,726.14 of asset disposed by Fangda Decoration. Others are assets disposed, discarded, or
transferred out.
(2) Property license not obtained yet:
Description of Original book Accumulated Net book
Categories Note
property value depreciation: value
Houses & Houses in Idle, under procedures
686,672.00 65,233.65 621,438.35
buildings Urumuqi of property certificate
Houses & Multi-function Under procedures of
4,095,350.26 1,544,283.07 2,551,067.19
buildings building property certificate
Houses & Under procedures of
Office building 6,769,642.00 2,578,618.72 4,191,023.28
buildings property certificate
Houses & 13,919,919.9 Under procedures of
Workshop B-1 18,966,977.90 5,047,057.96
buildings 4 property certificate
Houses & Under procedures of
Workshop B-2 6,495,786.15 1,728,509.69 4,767,276.46
buildings property certificate
Houses & Asset given for 20,953,587.7
21,226,500.00 272,912.22 Certificate not filed
buildings debt in Dalian 8
Shenyang
Houses & Fangda 18,871,771.3 Under procedures of
19,498,509.11 626,737.80
buildings extension 1 property certificate
workshop
Shenyang
Houses & Fangda dorm Under procedures of
9,043,044.13 251,913.35 8,791,130.78
buildings and workshop property certificate
2#
Dinning hall
and power
Houses & Under procedures of
station of 4,266,633.86 118,856.27 4,147,777.59
buildings property certificate
Shenyang
Fangda
78,814,992.6
Total 91,049,115.41 12,234,122.73
8
(3) Fixed asset by financial leasing
92
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
Accumulated
Accumulated Book value of
Original value of impairment
Category of assets depreciation fixed asset
fixed assets provision
Electronics and
24,500.00 628.20 23,871.80
other devices
(X) Construction in process
(1) Construction in process:
Book balance at end of year Book balance at beginning of year
Items Impairment Net book Impairment Net book
Amount Amount
provision value provision value
Nanchang Fangda
Technology Garden
3,597,740.17 3,597,740.17
Automatic PSD
Workshop
Dongguan Songshan
Lake Fangda
72,128,582.31 72,128,582.31
Southern Technology
Garden
Paining line 2,557,696.60 2,557,696.60
Bacterium of
2,324,786.32 2,324,786.32
spraying system
Gas project 669,225.64 669,225.64
Semi-conductor
material
5,135,906.09 5,135,906.09
sedimentation
machine
MOCVD Device 3,253,854.65 3,253,854.65
Semi-conductor
material
3,154,032.47 3,154,032.47
sedimentation
machine
NE-550 Etcher 4,167,972.75 4,167,972.75
Factory moving and
equipment to be
21,480,280.34 21,480,280.34
installed by Fangda
Guoke
Phase I pipes, roads,
9,573,061.61 9,573,061.61
and fence
Automatic Gold Ball
3,720,574.65 3,720,574.65
Bonder
LED 检测机 2,364,984.85 2,364,984.85
High-speed
ribosomelike type 1,394,948.39 1,394,948.39
crystal solid
Other equipment to
521,865.39 521,865.39 2,516,764.84 2,516,764.84
be installed
Total 81,799,896.43 81,799,896.43 56,762,380.64 56,762,380.64
(2) Profiles of main construction in process and changes:
Amount at the beginning of
Increased this year
Fund year
Project Budget
recourse Incl. Interest Incl. Interest
Amount Amount
capitalization capitalization
Phase I
pipes, RMB9 mil. Independent 9,573,061.61 2,997,784.43
roads, and
93
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
fence
Nanchang
Fangda share
Technology
RMB14.3070 issuing and
Garden 3,597,740.17
Automatic mil independent
PSD financed
Workshop
Dongguan
Songshan share
Lake
RMB210.5672 issuing and
Fangda 72,128,582.31
Southern mil independent
Technology financed
Garden
Factory
moving
and
equipment
to be
37,192,046.30
installed by
Fangda
Guoke
Total 46,765,107.91 78,724,106.91
(Continue)
Decreased this year Balance at end of year
% of
Incl. investme
Project Transferred to Incl. Interest Progress
Amount Amount nt on
fixed assets this capitalization budget
year
Phase I
12,570,846.
pipes, roads, 12,570,846.04
and fence 04
Nanchang
Fangda
Technology
3,597,740.1
Garden 25.15% 25.15
Automatic 7
PSD
Workshop
Dongguan
Songshan
Lake
72,128,582.
Fangda 34.25% 34.25
Southern 31
Technology
Garden
Factory
moving and
equipment
37,192,046.
to be 37,192,046.30
installed by 30
Fangda
Guoke
49,762,892. 75,726,322.
Total 49,762,892.34
34 48
(3) No impairment on construction in process till end of this year.
(XI) Intangible assets
Intangible assets
94
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
Book balance at Increased this Decreased Book balance
Items
beginning of year year this year at end of year
I. Total of intangible asset 138,877,554.2
137,634,777.72 1,242,776.55
initial value 7
Land using rights of Fangda Town
(phase I) (Note 4)
8,543,250.00 8,543,250.00
Land using rights of Fangda Town
(phase III) (Note 5)
4,783,050.00 4,783,050.00
Land using rights of Fangda Tech
Garden on Gaoxin Road 11,064,548.41 11,064,548.41
Nanchang (Note 6)
Land using rights of Shenyang
Fangda (Note 7)
42,038,791.23 42,038,791.23
Dongguan land using rights (note
3)
40,006,806.75 34,659.00 40,041,465.75
Patent and classified tech 27,380,919.89 504,876.00 27,885,795.89
Computer software 3,817,411.44 703,241.55 4,520,652.99
II. Total of intangible asset
23,104,199.57 5,173,399.43 28,277,599.00
amortization
Land using rights of Fangda Town
(phase I) (Note 4)
3,901,567.76 145,431.36 4,046,999.12
Land using rights of Fangda Town
(phase III) (Note 5)
1,331,282.25 95,661.00 1,426,943.25
Land using rights of Fangda Tech
Garden on Gaoxin Road 1,198,529.24 235,092.98 1,433,622.22
Nanchang (Note 6)
Land using rights of Shenyang
Fangda (Note 7)
2,585,514.30 840,835.80 3,426,350.10
Dongguan land using rights (note
3)
66,678.01 800,887.13 867,565.14
Patent and classified tech 12,591,549.48 2,607,719.54 15,199,269.02
Computer software 1,429,078.53 447,771.62 1,876,850.15
III. Total of book net value
114,530,578.15 110,599,955.27
of intangible assets
Land using rights of Fangda Town
(phase I) (Note 4)
4,641,682.24 4,496,250.88
Land using rights of Fangda Town
(phase III) (Note 5)
3,451,767.75 3,356,106.75
Land using rights of Fangda Tech
Garden on Gaoxin Road 9,866,019.17 9,630,926.19
Nanchang (Note 6)
Land using rights of Shenyang
Fangda (Note 7)
39,453,276.93 38,612,441.13
Dongguan land using rights (note
3)
39,940,128.74 39,173,900.61
Patent and classified tech 14,789,370.41 12,686,526.87
Computer software 2,388,332.91 2,643,802.84
IV. Total of accumulated
intangible asset impairment
provisions
Land using rights of Fangda Town
(phase I) (Note 4)
Land using rights of Fangda Town
(phase III) (Note 5)
Land using rights of Fangda Tech
Garden on Gaoxin Road
Nanchang (Note 6)
Land using rights of Shenyang
Fangda (Note 7)
95
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
Book balance at Increased this Decreased Book balance
Items
beginning of year year this year at end of year
Dongguan land using rights (note
3)
Patent and classified tech
Computer software
V. Total of intangible asset
114,530,578.15 110,599,955.27
book value
Land using rights of Fangda Town
(phase I) (Note 4)
4,641,682.24 4,496,250.88
Land using rights of Fangda Town
(phase III) (Note 5)
3,451,767.75 3,356,106.75
Land using rights of Fangda Tech
Garden on Gaoxin Road 9,866,019.17 9,630,926.19
Nanchang (Note 6)
Land using rights of Shenyang
Fangda (Note 7)
39,453,276.93 38,612,441.13
Dongguan land using rights (note
2)
39,940,128.74 39,173,900.61
Patent and classified tech 14,789,370.41 12,686,526.87
Computer software 2,388,332.91 2,643,802.84
Note 1: RMB5,173,399.43 amortized this year.
Note 2: Increase of intangible asset was purchasing of software and obtaining of patent.
Note 3: 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.
Note 4: 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 5: 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 6: 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 7: Shenyang Fangda land using right was inputted by Shenyang Hunnan New District
National Asset Administration Co., Ltd. to Shenyang Fangda in term of investment.
Note 1: Book value of intangible asset formed by R&D accounted for 10.62% of the total intangible
assets at end of year.
(XII) Goodwill
Name of the companies Book Increased Decreased Book Impairment
96
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
or goodwill item balance at this year this year balance at provision at
beginning of end of year end of year
year
8,197,817.2
Shenzhen Woke 8,197,817.29
9
Fangda Yide Co. 746,519.62
8,197,817.2
Total 8,197,817.29 746,519.62
9
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
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.
(XIII) Long-term amortizable expenses
Book Other
Amortized Book
balance at Increased decreased
Items in current balance at
beginning of this year amount in
year end of year
year the year
1,396,350.0
Epoxy Floor 1,552,950.00 156,600.00
0
Upgrading of workshop
rented by Fangda
650,031.44 65,549.39 584,482.05
Decoration Nanchang
Branch
Upgrading of workshop
rented by Fangda 623,212.27 138,636.40 484,575.87
Decoration
Upgrading of workshop
rented by Fangda 235,877.94 101,090.56 134,787.38
Decoration Sanhe Branch
2,600,195.3
Total 3,062,071.65 461,876.35
0
(XIV) Differed income tax asset and differed income tax liabilities
(1) Differed income tax asset and differed income tax liabilities already recognized
A. Details of un-neutralized differed income tax asset and liabilities:
Book balance at end of year Book balance at beginning of year
Items Deductible Deductible
Differed income Differed income
provisional provisional
tax asset tax asset
differences differences
Asset impairment
181,447,229.52 29,413,806.15 153,793,200.88 26,448,912.08
provision
Openning expenses 38,442.67 5,766.40 83,043.87 12,456.58
Neutralizable losses 11,549,071.51 2,887,267.88 20,406,633.15 4,898,982.91
97
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
Anticipated
420,995.96 63,149.39 347,657.52 52,148.63
liabilities
Reserved expenses 5,007,105.42 978,405.58
Wage drawn in
2,314,737.55 289,342.19
advance
Total 200,777,582.63 33,637,737.59 174,630,535.42 31,412,500.20
Book balance at end of year Book balance at beginning of year
Items Taxable Taxable
Differed income Differed income
provisional provisional
tax liability tax liability
difference difference
Adjustment of
investment property 129,689,276.00 32,148,137.16 115,022,192.93 27,342,717.60
fair value
Adjustment of
sellable financial 1,798,000.00 449,500.00 3,947,000.00 947,280.00
asset fair value
Total 131,487,276.00 32,597,637.16 118,969,192.93 28,289,997.60
(2) Particulars about Neutralizable provisional difference or losses by non-recognized differed
income tax assets
Items End of Term Beginning of Term
Asset impairment provision 28,784,639.04 27,185,509.66
Neutralizable losses 58,123,591.73 66,536,383.69
Total 86,908,230.77 93,721,893.35
(3) Neutralizable losses of non-recognized differed income tax assets will due in following years:
Year End of Term Beginning of Term Note
2012 10,378,557.33 11,917,349.15
Fangda Yide, Fangda Aluminum, Shenyang
2013 10,026,221.51 12,126,192.06 Fangda – the subsidiaries of the Company, are
possibly not able to obtain sufficient taxable
2014 7,864,870.78 21,401,565.96
income to neutralize the gains from differed
2015 7,695,652.54 17,893,930.48 income tax assets in the future period of
2016 22,158,289.57 neutralizable temporary difference written back.
Total 58,123,591.73 63,339,037.65
(XV) Asset impairment provision
Book balance Decreased this year
Increased Book balance
Items at beginning Written Transferr
this year at end of year
of year back ed
141,005,552. 16,923,420. 421,597.5 410,910.0 157,096,465.
Bad debt provision
36 64 9 0 41
Inventory impairment 2,017,320.0 488,875.2
2,450,227.07 7,587.27 3,971,084.67
provision 8 1
Fixed asset impairment
1,397,396.09 853,819.00 189 2,251,026.09
provision
Goodwill impairment
746,519.62 746,519.62
provision
145,599,695. 19,794,559. 429,184.8 899,974.2 164,065,095.
Total
14 72 6 1 79
98
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
(XVI) Assets with constrained ownership
Assets with constrained ownership are:
Book balance Reason of
Increased Decreased Book balance
Category of assets at beginning restriction on
this year this year at end of year
of year property rights
Asset under guarantee
Fangda Tech
184,286,809.0 5,522,876.7 1,769,194.5 188,040,491.2
Building (The part Collateral loan
8 1 8 1
for rent)
Fangda Tech
1,878,247.7
Building (The part 13,791,148.03 285,282.45 15,384,113.31 Collateral loan
3
for own use)
Frozen asset
Frozen as
Bank deposit 12,000,000.00 12,000,000.00 claimed by the
prosecutor
210,077,957.1 7,401,124.4 2,054,477.0 215,424,604.5
Total
1 4 3 2
(XVII) Short-term loans
Short-term loans are:
Book balance at beginning of
Categories Book balance at end of year
year
Borrowings with security and
210,000,000.00 200,000,000.00
guarantee
Guarantee loan 177,000,000.00 197,000,000.00
Total 387,000,000.00 397,000,000.00
Note 1: The short-term borrowing of RMB210 million was secured by Fangda Tech Building
(limited to RMB112.43 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: All of the guaranteed loans of RMB177 million was the short-term loans obtained by
subsidiaries and secured by the Company; including RMB57 million was the short-term loans obtained
by Fangda New Material; RMB100 million by Fangda Decoration, and RMB20 million by Fangda
Automatic. For details please go to Note VI (II).
(XVIII) Notes payable
Book balance at beginning of
Categories Book balance at end of year
year
Bank acceptance 31,684,990.21 59,241,926.92
Commercial acceptance 7,373,068.26 984,091.73
Total 39,058,058.47 60,226,018.65
Note 1: Amount due in next fiscal term will be RMB39,058,058.47.
Note 2: The outstanding book value of notes payable has decreased by 35.15% over the report term,
which was caused by payment for materials in term of bank notes issued by Fangda Decoration and
Fangda Automatic has decreased.
99
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
(XIX) Account payable
(1) As of December 31, 2011, no such major prepaid accounts due over one year.
(2) No payables due to shareholders with 5% or above shares of the Company, nor any related
parties.
(XX) Prepayment received
（1）As of December 31, 2011, major prepaid accounts due over one year.
Causation of not
Client Amount Description
settled
Advances for project
Xi’an Metro Co., Ltd. 12,236,055.00 Not started
works
(2) No prepayment received from shareholders with 5% or over shares of the Company, nor related
parties.
(3) Prepayment received increase by 158.90% over the year, which was caused by increase of
prepayment received by Fangda Decoration and Fangda Automatic.
(XXI) Employees’ wage payable
Details of remunerations payable to the employees
Book balance
Increased this Decreased Book balance
Items at beginning
year this year at end of year
of year
Wage, bonus, allowance and 110,608,433. 103,135,454.
10,008,820.62 17,481,799.52
subsidies 20 30
Employee welfare 1,589,193.72 1,589,193.72
Social insurance 6,797,252.35 6,797,199.85 52.50
Incl. Medical insurance 1,730,287.30 1,730,274.70 12.60
Basic pension 4,566,343.44 4,566,306.69 36.75
Unemployment insurance 175,774.96 175,774.44 0.52
Labor injury insurance 231,722.53 231,720.95 1.58
Breeding insurance 93,124.12 93,123.07 1.05
Housing fund 1,921,169.50 1,921,169.50
Dismissing policy
Trade union and education
4,038,900.38 276,252.58 1,396,781.64 2,918,371.32
allowance
Non-monetary welfare
Compensations for disengagement
32,742.68 32,742.68
other than dismissing policy
Others
121,225,044. 114,839,799.
Total 14,047,721.00 20,432,966.02
03 01
Note: Balance of wage payable increased by 45.45% over the last year, which was caused by
drawing of salaries and bonus for the increased employees.
100
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
(XXII) Tax payable
Items Book balance at end of year Book balance at beginning of year
VAT 1,895,422.63 -9,822,981.98
Business tax 18,030,603.08 16,951,513.27
Enterprise income tax 15,046,043.63 10,240,451.93
Personal income tax 440,103.00 508,580.44
City maintenance and
2,677,051.21 1,795,117.16
construction tax
Land using tax 989,909.39 221,094.98
Property tax 367,346.01 700,416.21
Education surtax 1,245,684.67 874,485.65
Local education
198,932.54 1,299.11
surcharges
Other taxes 111,169.71 50,666.94
Total 41,002,265.87 21,520,643.71
Note 1: Tax payable increased by 90.53%, which was caused by increase of sales income.
Note 2: Taxes are to be decided by the taxation department.
(XXIII) Interest payable
Items Book balance at end of year Book balance at beginning of year
Short-term borrowing
780,979.73 610,850.84
interests payable
Total 780,979.73 610,850.84
(XXIV) 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:
Items Book balance at end of year Description
Guangzhou Nanjian Construction
8,289,683.50 Contract security
Co., Ltd.
Guangzhou Nanjian Construction
3,000,000.00 Contract security
Co., Ltd. Dongguan Branch
Ningbo Lailai Energy-saving Doors
2,060,000.00 Project deposit
and Windows Co., Ltd.
Jiangxi Changxing Logistics Co.,
1,520,779.37 Freight
Ltd.
Jiangsu Tianyi Garment Co., Ltd. 1,500,000.00 Project deposit
Total 16,370,462.87
(3) Large amount other payables aged over one year:
Book balance at end
Items Description Reason of overdue
of year
Ningbo Lailai
Energy-saving Doors and 2,060,000.00 Project deposit construction in process
Windows Co., Ltd.
101
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
Jiangsu Tianyi Garment
1,500,000.00 Project deposit construction in process
Co., Ltd.
Total 3,560,000.00
(4) Other payable account has increased by 44.90%, which was caused by receiving of contract
deposit by Dongguan New Material for construction of Dongguan Sonshan Lake Fangda Southern
Technology Garden.
(XXV) Anticipated liabilities
Book balance at Increased this Decreased this Book balance at
Categories
beginning of year year year end of year
Maintenance expenses 347,657.52 59,657.52 288,000.00
Total 347,657.52 59,657.52 288,000.00
(XXVI) Long-term payable
(1) Top 5 long-term payable accounts
Book balance at end of
Company Term Initial amount Condition
year
monthly basis,
Shanghai Zhendan
ownership
Office Automatic
2 yrs 24,000.00 14,700.00 transferred at
Management Co.,
deliver and
Ltd.
payment
Total 24,000.00 14,700.00
(2) Financial leasing payable in long-term payable
Book balance at beginning of year Book balance at end of year
Items Amount of Amount of foreign
Amount RMB Amount RMB
foreign currency currency
Printer 14,700.00
(XXVII)Other non-recurring liabilities
Book balance at beginning of
Items Book balance at end of year
year
Application and demonstration
project of LED lighting tech (Note 334,850.00
1)
Optical crystal project (Note 2) 1,200,000.00 1,200,000.00
Environmental protection and
500,000.00 500,000.00
energy saving project (Note 3)
Graphic grounding production and
450,000.00 500,000.00
expanded chip production (Note 4)
Purchasing of equipment for
development of high-power chips 650,000.00 750,000.00
(Note 5)
Fund for optical products (Note 6) 420,000.00 480,000.00
High-power-low-attenuation plug
800,000.00 800,000.00
in LED technologies
Total 4,020,000.00 4,564,850.00
Note 1: According to document 粤科计字[2008]145 号 issued by Guangdong Department of
102
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
Science and Technologies, and Guangdong Department of Finance on November 24, 2008, Fangda
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. RMB334,850.00 of government subsidy recognized in
the year.
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 December 31, 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.
The project has been completed and received. Intangible asset amortizing period is estimated according
to the predicted usable life by Shenyang Fangda. RMB50,000.00 of non-operational income was
recognized in the year.
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. Fangda Guoke recognized against the expected useful life of the equipment and amortizing of
intangible assets. RMB100,000.00 recognized as non-operational income in the year.
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. The project has been completed and received. Intangible asset amortizing period is
estimated according to the predicted usable life by Shenyang Fangda. RMB180,000.00 of
non-operational income was recognized in the year.
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
Shenyang Fangda in November 2010, the Committee was about to provide finance of RMB800 thousand
to Shenyang Fangda for purchasing of equipment. No related equipment has been purchased as of
December 31, 2011.
(XXVIII)Share capital
(1) Change of capital shares in the year
103
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
Book balance at Book balance at end of
Changed in current term
beginning of year year
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
trade restriction
conditions
1. State-owned
shares
2. National legal
person shares
3. Other
48,014,828 9.52% 24,007,414 -71,917,800 -47,910,386 104,442 0.01%
domestic shares
Incl.
Non-government
18,200,000 3.61% 9,100,000 -27,300,000 -18,200,000
domestic legal
person shares
Domestic
natural person 29,814,828 5.91% 14,907,414 -44,617,800 -29,710,386 104,442 0.01%
shares
4. Overseas
shareholding
Incl. Shares held
by foreign legal
persons
Foreign natural
person shares
Total of
conditional 48,014,828 9.52% 24,007,414 -71,917,800 -47,910,386 104,442 0.01%
shares
II. Shares
without trading
limited
conditions
1. Common
232,624,317 46.10% 116,312,158 71,917,800 188,229,958 420,854,275 55.60%
shares in RMB
2. Foreign shares
223,967,459 44.38% 111,983,729 111,983,729 335,951,188 44.38%
listed at home
3. Foreign shares
placed abroad
4. Others
Total of
unconditional 456,591,776 90.48% 228,295,887 71,917,800 300,213,687 756,805,463 99.99%
shares
Total of capital
504,606,604 100.00% 252,303,301 252,303,301 756,909,905 100.00%
shares
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 shares, 5 shares will be added to each 10 shares to all
shareholders. Totally 252,303,301 shares were added at face value of RMB1.00. The registered capital
was changed to RMB756,909,905 thereafter. This change has been verified by Asian-pacific (Group)
104
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
CPA and the Capital Verification Report 亚会深验字(2011)第 039 号 was issued.
Note 2: On July 15, 2011, the 71,917,800 A-shares issued in 2009 privately were released for sale
and listed.
Note 3: As of December 31, 2011, there were 104,442 shares under restriction of sale, which are
held by executives of the Company.
(XXIX) Capital reserves
Change of capital reserves this year:
Book balance at Decreased
Increased Book balance at
Items
beginning of year this year
this year end of year
252,303,301.
Share capital premium 290,541,523.48 38,238,222.48
00
Other capital reserves 43,892,491.44 1,651,220.00 42,241,271.44
253,954,521.
Total 334,434,014.92 80,479,493.92
00
Note: 1. Capital premium has decreased by RMB252,303,301.00, which was caused by capitalizing
of reserves as decided by the Shareholders’ Meeting 2010.
2. Other capital reserves has decreased by RMB1,651,220.00, which was caused by decrease of fair
value of financial asset for sale.
(XXX) Surplus reserves
Change of surplus reserves this year:
Book balance at Increased this Decreased this Book balance
Items
beginning of year year year at end of year
Statutory surplus
17,834,977.97 6,841,099.19 24,676,077.16
reserves
Total 17,834,977.97 6,841,099.19 24,676,077.16
Note: Increase of surplus reserve was caused by providing of surplus reserves at 10% of the net
profit after tax according to the Articles of Association.
(XXXI) Retained profit
Change of retained profit:
Items Current Year Previous Year
Retained at end of last year 153,115,142.18 102,526,565.06
Plus: Adjusted amount of retained profit at
beginning of year (―-― for less)
Retained at beginning of this year 153,115,142.18 102,526,565.06
Plus: Net profit attributable to the owners of
65,503,925.58 55,063,374.25
parent company
Less: Statutory surplus reserves 6,841,099.19 4,474,797.13
Optional surplus reserves
Common risk provisions
Common share dividend payable
Common share dividend transferred to capital
share
Retained profit at end of year 211,777,968.57 153,115,142.18
105
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
(XXXII)Operational turnover and costs
(1) Details of business turnover and costs:
Items Occurred this term Occurred last year
Turnover 1,348,776,366.53 1,161,933,356.48
Incl. Main business turnover 1,296,010,404.05 1,115,635,614.18
Other business income 52,765,962.48 46,297,742.30
Operation cost 1,087,992,839.87 955,678,459.47
Incl. Main business cost 1,064,398,832.90 938,020,389.11
Other business cost 23,594,006.97 17,658,070.36
(2) Main business turnover classified on industries:
Occurred this term Occurred last year
Name of industry Operation Operation
Turnover Turnover
cost cost
1,184,798,163.
Metal production 977,805,293.93 956,265,884.36 795,574,881.92
05
Railroad industry 98,230,586.47 73,361,235.01 150,901,720.94 129,419,580.67
Lighting product
12,981,654.53 13,232,303.96 8,468,008.88 13,025,926.52
industry
1,296,010,404. 1,064,398,832.
Total 1,115,635,614.18 938,020,389.11
05 90
(3) Business segments on districts:
Occurred this term Occurred last year
Name of districts Operation Operation
Turnover Turnover
cost cost
1,217,075,545. 1,008,524,582.
Domestic 1,061,081,033.63 898,954,732.03
44 46
Overseas 78,934,858.61 55,874,250.44 54,554,580.55 39,065,657.08
1,296,010,404. 1,064,398,832.
Total 1,115,635,614.18 938,020,389.11
05 90
(5) Turnover from top five clients
Name of clients Occurred this term Portion in total turnover
No.1 99,076,985.77 7.35%
No.2 74,837,147.70 5.55%
No.3 73,474,073.08 5.45%
No.4 68,083,216.13 5.05%
No.5 63,481,640.08 4.71%
Total 378,953,062.76 28.10%
(XXXIII)Business tax and surcharge
Type of taxes Occurred this term Occurred last year Rate
Business tax 18,666,270.42 14,730,505.62 See Note III(I)-1
106
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
City maintenance
3,581,884.49 991,249.71 See Note III(I)-1
and construction tax
Property tax 1,354,473.46 1,297,355.63 See Note III(I)-3
Land using tax 158,106.93 158,406.26
Education surtax 1,974,228.4 901,414.15 See Note III(I)-1
Others 1,012,708.72 307,210.49
Total 26,747,672.42 18,386,141.86
Note: Amount of the year increased by 45.48% over previous year, which was caused by significant
increase of turnover and increase of turnover tax and surcharges. The local taxes have increased too.
(XXXIV)Sales expense
Items Occurred this term Occurred last year
Manpower 10,825,555.42 7,986,270.78
Freight and misc. 6,146,199.77 6,112,904.64
After sales 633,197.88 5,097,364.23
Business trips 3,112,536.64 3,192,288.68
Business reception expenses 1,477,665.74 2,479,057.47
Material consumable 652,982.57 1,532,454.38
Office expenses 904,822.67 1,230,474.73
Advertisement and exhibition 976,749.69 1,190,779.70
Rental 719,897.99 860,288.91
Testing 1,165,719.66 371,999.35
Consulting 246,149.90 238,647.50
Export credit insurance 866,909.35
Misc. expenses 1,589,359.07 1,598,822.60
Total 29,317,746.35 31,891,352.97
(XXXV)Administrative expense
Items Occurred this term Occurred last year
Manpower 49,208,779.84 46,788,029.85
Depreciation and amortization 16,156,234.59 10,593,727.87
Agencies 3,773,845.87 4,251,710.95
Tax 4,471,893.17 4,114,664.83
Maintenance fee 2,037,983.11 3,570,576.11
Water and electricity 2,101,335.16 2,696,533.49
Office expenses 2,544,556.04 2,654,017.23
Business trips 4,067,852.87 3,921,934.08
R&D 2,744,431.85 2,044,548.56
Business reception expenses 2,154,541.69 1,936,049.55
Rental 3,146,641.06 1,535,778.23
107
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
Moving 39,118.30 1,273,987.08
Lawsuit 5,218,326.92 1,261,030.00
Material consumable 563,765.22 836,693.27
Property management fee 1,609,835.89 729,924.00
Misc. expenses 5,775,831.29 6,130,173.82
Total 105,614,972.87 94,339,378.92
(XXXVI)Financial expenses
Items Occurred this term Occurred last year
Interest expense 23,216,799.09 19,871,195.20
Less: Incoming interests 6,252,460.01 2,755,546.52
Exchange gains/losses 1,299,160.88 771,792.88
Commission charges and others 1,488,995.48 1,669,137.20
Total 19,752,495.44 19,556,578.76
(XXXVII)Income from change of fair value
Source of income from fluctuation of
Occurred this term Occurred last year
fair value
Investment property measured at fair
10,815,131.20 13,921,217.90
value
Total 10,815,131.20 13,921,217.90
(XXXVIII)Investment income
Investment income categorized by resources:
Sources of investment gains Occurred this term Occurred last year
Gains from long-term equity
-17,436.48
investment
Long-term equity investment gains on
-24,685.12
equity basis
Investment gains from disposal of
3,176,516.97
available-for-sale financial assets
Gains from other investment
99,342.47
(financial products)
Total 99,342.47 3,134,395.37
(XXXIX)Asset impairment loss
Items Occurred this term Occurred last year
Bad debt losses 16,501,823.05 9,714,454.18
Inventory impairment losses 2,009,732.81 -215,355.05
Fixed assets impairment losses 853,819.00
Total 19,365,374.86 9,499,099.13
108
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
Note: Asset impairment loss increased significantly, which was caused by significant increase of project
payment receivable at end of year.
(XL) Non-operational income
Amount accounted
Items Occurred this term Occurred last year into non-recurring
account of the year
Total of gains from disposal of
3,295.49 7,868,996.54 3,295.49
non-current assets
Incl. Gains from disposal of
3,295.49 4,188,405.10 3,295.49
fixed assets
Gains from disposal of
3,680,591.44
intangible assets
Government subsidy 1,988,650.00 5,537,950.00 1,988,650.00
Penalty income 177,600.27 162,557.90 177,600.27
Payable account not able to be
47,898.40 137,566.66 47,898.40
paid
Compensation income 2,355,157.57
Others 9,166,504.14 4,139,383.23 9,166,504.14
Total 11,383,948.30 20,201,611.90 11,383,948.30
Note 1: Non-operational income decreased by 43.65%, which was caused by greater compensation
for the land retrieved by Nanchang High Tech Zone Administration Committee received in the previous
year, while less government subsidy received in this year.
Note 2: Details of government subsidies
Occurred this Occurred last
Items 备 注
term year
Technical development fund 2011
400,000.00
from Nanshan Bureau of Finance
Application and demonstration
334,850.00 1,385,150.00 See Note V (XXVII)-1
project of LED lighting tech
Graphic background production and See Note V(XXVII)
230,000.00
extension and chip making –4,6
Export development fund 2010 221,200.00
Technology insurance subsidy from
172,300.00
Nanchang government
Main enterprise fund from Shenzhen
160,000.00
government
Allowance for short-term export
127,700.00
credit 2011
Government subsidy for export and
100,100.00
credit
Semiconductor high power chip
100,000.00 See Note V (XXVII)-5
technology
National 863 program project 3,430,000.00
Resource exploration fund (inland
326,000.00
shipping subsidy for exporting)
Others 142,500.00 396,800.00
Total 1,988,650.00 5,537,950.00
109
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
Note 3: Other non-operational income were
(1) On June 1, 2011, Dalian Middle Court judged that Dalian Hongjin World Trade Center Co., Ltd.
use its property located in Zhongshan Dalian amounted to RMB23,957,300.00 to make the debt to the
Company. This made RMB4,762,634.40 of non-operational income.
(2) According to the judgment （2010）淮仲裁字第 098 号 issued by Huai’an Arbitration
Committee on August 17, 2011, another non-operational income of RMB1,098,758.60 was confirmed.
(XLI) Non-operational expenditure
Occurred this Carried to current
Items Occurred last year
term contingent gain/loss
Loss from disposal of fixed
2,427,783.27 800,599.49 2,427,783.27
assets
Loss from debt reorganizing
3,959.20 434,040.66 3,959.20
(Note 1)
Donations 233,000.00 602,762.20 233,000.00
Penalties paid 11,645.94 4,778.84 11,645.94
Other (Note 2) 447,208.16 342,048.95 447,208.16
Total 3,123,596.57 2,184,230.14 3,123,596.57
Note 1: On June 30, 2011, Fangda New Material has reached the debt reorganization agreement
with Zhang Jian, by which partial of the credit due to Fangda New Material will be waived. The
receivable account of RMB204,830.80 by Zhang Jian will be transferred to Fangda New Material.
Meanwhile Zhang Jian will pay RMB750 thousand to Fangda New Material by one payment in seven
days upon engaging of the agreement. The book value of receivable account from Zhang Jian is
RMB1,369,700.00, RMB410,910.00 of bad debt provision has been provided, and RMB3,959.20 of
credit lost has been recognized.
Note 2: Other details are mainly losses of RMB327,116.87 from clearing of receivable accounts.
(XLII) Income tax expenses
Composition of income tax expense (income)
Items Occurred this term Occurred last year
Income tax calculated according to the law
17,199,784.69 9,762,250.04
and regulations of current term
Adjustment of differed income tax 2,580,182.17 9,606,943.98
Total 19,779,966.86 19,369,194.02
(XLIII) 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:
110
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
1. Calculation outcome
Current Year Previous Year
Diluted
Profit of the report period Basic Basic Diluted
earnings
earnings per earnings per earnings per
per
share share share
share
Net profit attributable to common share
0.09 0.09 0.08 0.08
holders of the Company (I)
Net profit attributable to common share
holders of the Company after deducting of 0.07 0.07 0.04 0.04
non-recurring gain/loss (II)
2. Formula of earnings per share
Items No. Current Year Previous Year
Net profit attributable to common
shareholders of the Company
1 65,503,925.58 55,063,374.25
Non-recurring gain/loss
attributable to the net profit of
common shareholders of the 2 14,498,445.69 29,459,493.20
parent company after deducting of
income tax influences
Net profit attributable to common
share holders of the Company
after deducting of non-recurring
3=1-2 51,005,479.89 25,603,881.05
gain/loss
Total of shares at beginning of
year
4 504,606,604 426,786,359
Amount of shares increased by
capitalizing of common reserves 5 252,303,301 258,205,747
or share dividend
6 47,945,200
Amount of shares increased by
issuing of new shares or 6 23,972,600
transforming of debt to shares
6
Number of months from the next 7 6
month of new share issuing or
converting of debt to shares to the
7 6
end of report term 7
Amount of shares decreased by
repurchasing of shares in the 8
report term
Number of months from the next
month of share decreasing to the 9
end of report term
Amount of shares reduced 10
Number of months in the report
term
11 12 12
Weighted average of common 12=4+5+6×7
shares issued outside (II) ÷11-8×9÷11-10
756,909,905 720,951,006
Weighted average of common
shares issued outside adjusted for 13 756,909,905 720,951,006
merger under common control (I)
Basic earning per share (I) 14=1÷13 0.09 0.08
Basic earning per share (II) 15=3÷12 0.07 0.04
Diluting potential common share
16
interests recognized as expenses
111
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
Items No. Current Year Previous Year
Income tax rate 17 24% 22%
Transformation fees 18
Amount of shares increased by
transforming or exercising of
19
company bond, subscription
certificate, or share option
20=[1+(16-18)×
Diluted earning per share (I) (100%-17)]÷(13+1 0.09 0.08
9)
21=[3+(16-18)
Diluted earning per share (II) ×(100%-17)]÷(12+ 0.07 0.04
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 marketS0 = Total shares at the beginning of termS1 = increased shares due to capitalizing of common
reserves or dividendSi = shares increased due to placing of new shares or transferred from debt in the
report termSj = shares decreased due to actions such as repurchasing in the report termSK = the amount
of shares reducedM0 = number of months of the report termMi = 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
value.
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.
112
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
(XLIV) Other misc incomes
Occurred this
Items Occurred last year
term
1. Gains (losses) from available-for-sale financial assets -2,149,000.00 850,589.04
Less: Income tax influence of available-for-sale financial
-497,780.00 266,069.59
assets
Net amount written into other gains and transferred
2,694,453.18
into gain/loss in previous terms
Sub-total -1,651,220.00 -2,109,933.73
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
Less: Income tax influence of cash flow hedge instruments
Net amount written into other gains and transferred into
2,845,166.75
gain/loss in previous terms
Adjusted amount transferred to initial amount of the target
project
Subtotal -2,845,166.75
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 -1,651,220.00 -4,955,100.48
(XLV) Notes to the Cash Flow Statement
1. Other cash inflow related to operation
Items Amount of current year Amount of Last Year
Interest income 6,101,798.90 3,264,310.41
Allowance income 1,443,800.00 5,852,800.00
Net amount of bank draft deposit retrieved 16,250,157.38 950,000.00
Retrieving of bidding deposits 4,672,960.50 6,158,167.57
Power and telecommunication expense
10,979,949.89
collected on behalf
Lawsuit interest received 277,852.84 2,865,985.32
Operational trade received 10,522,014.77 8,242,443.30
113
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
Others 3,489,661.47 6,156,688.55
Total 42,758,245.86 44,470,345.04
2. Other cash paid related to operation
Items Amount of current year Amount of Last Year
Sales expense 17,515,503.13 10,920,411.71
Administrative expense 37,176,491.27 41,423,084.03
Bidding deposit paid 9,767,040.36 11,275,971.56
Net deposit for drafts 3,436,350.82 11,551,825.29
Other trades 21,673,035.03 24,934,519.80
Total 89,568,420.61 100,105,812.39
3. Other cash received related to investment
Items Amount of current year Amount of Last Year
Bidding and contract deposit related to
29,969,683.50
construction projects
Total 29,969,683.50
4. Other cash paid related to investment
Items Amount of current year Amount of Last Year
Bidding deposit paid related to construction
18,550,000.00
projects
Total 18,550,000.00
5. Other cash paid related to financing
Items Amount of current year Amount of Last Year
Capital increase expense paid 293,344.43
Payment of share placing fee 4,001,102.20
Evaluation fee of short-term debentures 250,000.00
Total 293,344.43 4,251,102.20
(XLVI) Appendix of Cash Flow Statement
(1) Net profit adjusted to cash flow of business operation on indirect basis
Amount of current Amount of Last
Supplementary Info.
year Year
1.Net profit adjusted to cash flow of operation:
Net profit 59,380,123.26 48,286,146.38
Plus: Asset impairment provision 19,365,374.86 9,499,099.13
Fixed asset depreciation, gas and petrol depreciation,
16,403,878.73 15,831,320.30
production goods depreciation
Amortizing of intangible assets 5,173,399.43 4,145,584.44
Amortizing of long-term expenses 461,876.35 130,603.24
Loss from disposal of fixed assets, intangible assets, and
-760,047.25 -7,678,770.63
other long-term assets (―-― for gains)
114
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
Amount of current Amount of Last
Supplementary Info.
year Year
Loss from fixed asset discard (―-― for gains) 1,450,855.03 610,373.58
Loss from fluctuation of fair value (―-― for gains) -10,815,131.20 -13,921,217.90
Financial expenses (―-― for gains) 23,698,010.18 20,018,951.57
Investment loss (―-― for gains) -99,342.47 -3,134,395.37
Decrease of deferred income tax asset (―-― for increase) -2,225,237.39 3,175,752.65
Increase deferred income tax asset (―-― for decrease) 4,805,419.56 6,346,420.64
Decrease of inventory (―-― for increase) 26,059,387.31 -80,422,206.72
Decrease of operational receivable items (―-― for increase) -290,074,127.42 -4,944,168.27
Increase of operational payable items (―-― for decrease) 81,643,448.27 -6,528,930.72
Others 8,486,616.90 -22,601,825.29
Cash flow generated by business operation, net -57,045,495.85 -31,187,262.97
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 end of year 300,177,008.78 468,878,715.15
Less: Balance of cash at beginning of year 468,878,715.15 210,823,550.83
Plus: Balance of cash equivalents at end of term -
Less: Balance of cash equivalents at beginning of term -
Net increasing of cash and cash equivalents -168,701,706.37 258,055,164.32
(2) Cash and cash equivalents
Amount of current Amount of Last
Items
year Year
I. Cash 300,177,008.78 468,878,715.15
Incl: Cash in stock 27,427.37 13,898.14
Bank savings could be used at any time 298,864,210.28 468,864,140.47
Other monetary capital could be used at any time 1,285,371.13 676.54
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 year 300,177,008.78 468,878,715.15
IV. Cash and cash equivalents of subsidiaries within the
24,603,341.99 37,417,148.55
parent company or group under constrains
115
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
VI. Related parties and transactions
（I） Relationship
1． Major shareholders of the Company:
Voting
Registered Percentage
Name of the Ownership Reg. Legal Business power in
capital Organization code of
shareholders type Add. representative property the
(RMB0’000) shareholding
Company
Shenzhen
Banglin
Industrial
Technologies Ltd. liability Shenzhen Chen Jinwu 3,000.00 72984005-5 9.09% 9.09%
investment
Development
Co., Ltd.
Shenzhen
Shilihe Wang Industrial
Ltd. liability Shenzhen 1,978.0992 72984450-7 2.36% 2.36%
Investment Shengguo investment
Co., Ltd.
Shengjiu
Industrial
Investment Ltd. liability HK Xiong Jianming HKD1.00 59046683-000-10-11-2 1.64% 1.64%
investment
Ltd.
Note 1: Owners of Shenzhen Banglin Technology Development Co., Ltd. are natural persons. Mr.
Xiong Jianming, Chairman of the Board of the Company, is holding 85% of the shares, and Mr. Xiong
Xi, son of Mr. Xiong Jianming, is holding 15% of the shares. Mr. Xiong Jianming is the substantial
holder of the Company.
Note 2: Among the top 10 shareholders, Shenzhen Banglin Technology Development Co., Ltd. and
Shengjiu Investment Co., Ltd. are parties action-in-concert. Shenzhen Banglin Technology Development
Co., Ltd. and Shenzhen Shilihe Investment Co., Ltd. are related parties. No other action-in-concert or
related parties among the other holders of current shares.
2． Particulars of the subsidiaries
Please see Note IV.
（II） Related party transactions
Providing of guarantee among related parties:
Amount Completed or
The provider The beneficiary Start date Due date
guaranteed not
Fangda Decoration 50,000,000.00 July 11 2011 July 10 2012 No
Fangda Automatic The Company 50,000,000.00 July 11 2011 July 10 2012 No
Fangda New
50,000,000.00 July 11 2011 July 10 2012 No
Material
January 31,
The Company Fangda Automatic 20,000,000.00 Feb. 1 2011 No
2012
30,000,000.00 Mar 1, 2011 Mar 1, 2012 No
30,000,000.00 Feb. 22 2011 Feb. 22 2012 No
The Company Fangda Decoration
20,000,000.00 Aug 4, 2011 Feb 4 2012 No
20,000,000.00 Aug 3, 2011 Aug 2, 2012 No
116
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
Amount Completed or
The provider The beneficiary Start date Due date
guaranteed not
15,000,000.00 Jul 7 2011 Jul 7 2012 No
Fangda New 15,000,000.00 Jul 7 2011 Jul 7 2012 No
The Company
Material
Sept. 30,
27,000,000.00 Sept 30, 2012 No
2011
Note: The above are related guarantees involving with bank loans.
VII. Contingency
（I） CONTINGENT LIABILITIES
1. Contingent liabilities formed by material lawsuit or arbitration, and their influences
on the financial position
Case Target
Plaintiff The defender The court Progress
description amount
st
The 1
RMB17.07
Fangda Middle
Project
Wang Weihong mil and Trial completed
Decoration Court
dispute of
interests
Chongqing
Note: 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. While
Fangda Decoration claimed RMB18.1189 million of project payment and related loss. At present the
trial process has been completed, but the debate was not started. 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 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 December 31,
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 December 31, 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 December 31, 2011, the external guarantee was provided to subsidiaries of the Company. For
details please see Note VI (II).
No material contingent issues to be disclosed other than the above as of December 31, 2011.
VIII. Significant commitments
（I） Significant commitments
1. Details of guarantees provided between the Company and its subsidiaries for bank credits are:
117
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
(1) As of December 31, 2011, the guarantees provided by the Company to the subsidiaries for bank
credits:
Name of companies Amount Note
Export sellers’ credit. Actual situation of
35,000,000.00
guarantee on loans see Note VI (II)
Integrated credit of RMB58 million, including
Fangda New Material current asset loan of RMB30 million, accepted
58,000,000.00 notes of RMB20 million, and guarantee letter of
RMB8 million. Actual situation of guarantee on
loans see Note VI (II)
Fangda Automatic 250,000,000.00
Fangda Automatic 20,000,000.00
Actual situation of guarantee on loans see Note
300,000,000.00
Fangda Decoration VI (II)
120,000,000.00
Fangda Decoration Was the guarantee provide for guarantee letter
by Fangda Decoration and Fangda Automatic.
16,518,674.25
Fangda Automatic This amount is the part used but not due in last
year.
Total 799,518,674.25
(2) As of December 31, 2011, the guarantees provided by the subsidiaries to the Company for bank
credits:
Name of companies Amount Note
50,000,000.0
Fangda Decoration
0
50,000,000.0 Practical situations are
Fangda Automatic
0 demonstrated in Note VI (II)
50,000,000.0
Fangda New Material
0
150,000,000.
Total
00
2. Fangda Aluminum and Nanchang High-tech Zone Committee entered the ―Land Retrieving and
Compensation Agreement‖ on January 18, 2010. Fangda Aluminum committed that: Since the
date of the Agreement, all of the liabilities, credits and claims attached or raised in relation
with the land will be undertaken by Fangda Aluminum.
（II） 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 contingent issues to be disclosed other than the above as of December 31, 2011.
IX. Post-balance-sheet issues
The 9th meeting of the 6th term of Board was held on April 18, 2012, on which the profit distribution
and capitalizing of reserves plan 2011 was examined and approved. According to the resolution of the 9th
meeting of the 6th term of Board. Neither profit distribution nor capitalizing of reserves will be
performed. All of the profit will be save for future use in 2012.
118
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
No major post-balance-sheet issues to be disclosed other than the above as of the
date of this report.
X. Other Material Issues
（I） Issuing of short-term bonds
On December 10, 2010, the 1st provisional shareholders’ meeting 2010 was held. The proposal of
filing to issue short-term bills was adopted at the meeting. The Company has submitted the filing
application to China Inter-bank Transaction Association, and received the Acceptance Letter (中市协注
【2012】CP1 号) from the Association on January 4, 2012. As approved by the 66th registration meeting
of 2011, the Company is approved to issue RMB400 million of short term bills. It is effective in two
years and Industrial Bank Co., Ltd. will be main broker. Issuing can be implemented in installments but
the first issuing shall be in two months upon registration. As of the end of report period, the Company
has not issued by short term bills.
（II） Leases
Details of property leasing as of December 31, 2011.
Book balance at beginning of
Category of property for rent Book balance at end of year
year
Investment real estates 277,705,949.35 271,226,332.73
Total 277,705,949.35 271,226,332.73
（III） Assets accounted at fair value
Accumulativ
Impairment
Fair value at Change of e change in
provision Fair value at
Items beginning of fair value in fair value
provided this end of year
year the year accounted
year
into equities
I. Financial assets 4,347,000.00 698,000.00 2,198,000.00
1. Financial assets
accounted at fair
value and
fluctuation
accounted into
current income
(Derivate financial
assets not included)
2. Derivate
financial assets
3. Disposable
4,347,000.00 698,000.00 2,198,000.00
financial assets
II. Investment 271,226,332. 11,550,311.2 277,705,949.
property 73 0 35
III. Production
biological assets
IV. Others
119
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
275,573,332. 11,550,311.2 279,903,949.
Total of assets 698,000.00
73 0 35
Total of liability
XI. Notes to the main items of the financial statements of the parent
company
(I) Account receivable
(1) Account receivable on categories
Book balance at end of year
Categories Book value Bad debt provision
Ratio Providing Net amount
Amount Amount
(%) rate (%)
Receivables with major individual amount
and bad debt provision provided individually
Receivables provided bad debt provision in
8,602,510.09 100.00 2,998,948.29 34.86 5,603,561.80
groups
Incl. Receivable accounts not consolidated 8,602,510.09 100.00 2,998,948.29 34.86 5,603,561.80
Sub-total of group 8,602,510.09 100.00 2,998,948.29 34.86 5,603,561.80
Account receivable with minor individual
amount but bad debt provision is provided
Total 8,602,510.09 100.00 2,998,948.29 34.86 5,603,561.80
Book balance at beginning of year
Categories Book value Bad debt provision
Ratio Providing Net amount
Amount Amount
(%) rate (%)
Receivables with major individual amount
and bad debt provision provided individually
Receivables provided bad debt provision in
10,467,296.51 100.00 2,549,569.61 24.36 7,917,726.90
groups
100.0
Incl. Receivable accounts not consolidated 10,467,296.51 2,549,569.61 24.36 7,917,726.90
0
100.0
Sub-total of group 10,467,296.51 2,549,569.61 24.36 7,917,726.90
0
Account receivable with minor individual
amount but bad debt provision is provided
100.0
Total 10,467,296.51 2,549,569.61 24.36 7,917,726.90
0
Account receivables on which bad debt provisions are provided on age basis in the group:
Book balance at end of year
Age
Amount Proportion Bad debt provision Net amount
within 1 year 1,834,317.56 21.32% 55,029.53 1,779,288.03
1-2 yrs 1,100,443.75 12.79% 110,044.38 990,399.37
2-3 yrs
Over 3 yrs 5,667,748.78 65.89% 2,833,874.38 2,833,874.40
Total 8,602,510.09 100.00% 2,998,948.29 5,603,561.80
Book balance at beginning of year
Age
Amount Proportion Bad debt provision Net amount
120
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
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, and retrieved or written back in the same year, or such account with major amount.
(3) No receivable account has been written off in current year.
(5) As of December 31, 2010, no receivables due from shareholders with 5% or above shares of the
Company or related parties.
(5) The top 5 debtors at end of the year:
Name of the Relation with the Balance at end % in total
Age
companies Company of year receivables
1,196,767.80 within 1 year
Guangzhou Metro
Client 1,100,443.75 1-2 yrs 92.59
Company
5,667,748.78 Over 3 yrs
Shenzhen Taishan
Online Tech Co. Lessee 203,736.16 within 1 year 2.37
Ltd.
Shenzhen
Yiliruiguang
Technology Lessee 92,898.00 within 1 year 1.08
Development Co.,
Ltd.
Shenzhen
Fuchuangtong
Lessee 74,708.72 within 1 year 0.87
Technology Co.,
Ltd. Fu Xiaoli
Shenzhen Dianlitong
Technologies Co., Lessee 61,703.96 within 1 year 0.72
Ltd.
Total 8,398,007.17 97.62
3．Other account receivable
(1) Other account receivable on categories
Book balance at end of year
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
265,710,536.44 99.97 540,923.81 0.20 265,169,612.63
bad debt provision in groups
Incl. Receivable accounts not 1,996,058.81 0.75 540,923.81 27.10 1,455,135.00
121
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
consolidated
Receivable account within the
263,714,477.63 99.22 263,714,477.63
consolidation range
Sub-total of group 265,710,536.44 99.97 540,923.81 0.20 265,169,612.63
Other account receivable with
minor individual amount but 77,046.00 0.03 77,046.00 100.00
bad debt provision is provided
Total 265,787,582.44 100.00 617,969.81 0.23 265,169,612.63
Book balance at beginning of year
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 586,474.
201,041,444.07 99.97 0.29 200,454,969.75
bad debt provision in groups 32
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 amount but 53,046.00 0.03 53,046.00 100.00
bad debt provision is provided
Total 201,094,490.07 100.00 639,520.32 0.32 200,454,969.75
Other account receivables on which bad debt provisions are provided on age basis in the group:
Book balance at end of year
Age Proportio Bad debt
Amount Net amount
n provision
within 1 year 928,255.27 0.35% 27,847.66 900,407.61
1-2 yrs 50,699.54 0.02% 5,069.95 45,629.59
2-3 yrs 2,729.00 0.00% 818.70 1,910.30
Over 3 yrs 1,014,375.00 0.38% 507,187.50 507,187.50
Total 1,996,058.81 0.75% 540,923.81 1,455,135.00
Book balance at beginning of year
Age Proportio Bad debt
Amount Net amount
n provision
within 1 year 2,203,367.46 1.09% 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 0.51% 519,187.50 519,187.50
Total 3,253,600.46 1.61% 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, and retrieved or written back in the same year, or such account with major amount.
122
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
(3) No other receivable account has been written off in current year.
(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 receivables:
Portion in total
Name of the Relation with Balance at end
Specification Age other receivable
companies the Company of year
accounts (%)
Fangda Controlled within
Current account 162,996,918.47 61.33
Decoration subsidiaries 1 year
Fangda New Controlled within
Current account 63,944,978.75 24.06
Material subsidiaries 1 year
within
5,053.50
1 year
Controlled
HK Junjia Current account 49,352.88 1-2 yrs 11.43
subsidiaries
30,325,845.43 2-3 yrs
2,488,413.62 1-2 yrs
Shenyang Controlled 2,858,162.60 2-3 yrs
Current account 2.60
Fangda subsidiaries
Over 3
1,560,195.36
yrs
Shenzhen
Changshou Compensation Trading Over 3
984,375.00 0.37
Pharmacy Co., for building company yrs
Ltd.
Total 265,213,295.61 99.79
(6) Receivable account due from related parties
Name of the Relation with the
Balance at end of year % in total receivables
companies Company
Controlled
Fangda Decoration 162,996,918.47 61.33
subsidiaries
Fangda New Controlled
63,944,978.75 24.06
Material subsidiaries
Controlled
HK Junjia 30,380,251.81 11.43
subsidiaries
Controlled
Shenyang Fangda 6,906,771.58 2.60
subsidiaries
Dongguan New Controlled
291,453.20 0.11
Material Co., Ltd. grand-subsidiary
Controlled
Fangda Woke 108,108.83 0.04
grand-subsidiary
Controlled
Kexunda Co. 40,400.00 0.02
subsidiaries
Total 264,668,882.64 99.59
(II) Long-term share equity investment
Long-term equity investment:
Company Calculating Book balance at Changed this year Book balance at
Investment cost
invested in basis beginning of year (-― for less) end of year
Fangda
Cost basis 305,000,000.00 305,000,000.00 305,000,000.00
Decoration
123
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
Fangda
Cost basis 19,800,000.00
Aluminium
Fangda Yide
Cost basis 19,907,760.00
Co.
HK Junjia Cost basis 10,600.00
Fangda
Cost basis 170,385,071.73 170,385,071.73 170,385,071.73
Automatic
Fangda New
Cost basis 74,496,600.00 74,496,600.00 74,496,600.00
Material
Shenyang
Cost basis 109,560,000.00 108,852,073.85 108,852,073.85
Fangda
Kexunda Co. Cost basis 1,000,000.00 1,000,000.00 1,000,000.00
Total 700,160,031.73 658,733,745.58 1,000,000.00 659,733,745.58
Share Impairment
Company Voting rights Impairment Cash dividend this
proportion provision provided
invested in (%) provision year
(%) this year
Fangda
98.39 98.39 49,195,000.00
Decoration
Fangda
99.00 99.00 19,800,000.00
Aluminium
Fangda Yide
75.00 75.00 19,907,760.00
Co.
HK Junjia 100.00 100.00 10,600.00
Fangda
94.08 94.08 8,143,200.00
Automatic
Fangda New
75.00 75.00
Material
Shenyang
64.58 64.58
Fangda
Kexunda Co.
100.00 100.00
(Note)
Total 39,718,360.00 57,338,200.00
nd th
Note: According to the resolutions of the 2 meeting of the 6 term of Board held on April 20,
2011, the Company has founded a professional software company with registered capital of RMB1
million. The company is involved in developing and sales of software. The capital of RMB1 million has
been input on July 22, 2011, and was verified by Asia-Pacific (Group) CPA Ltd. with the verification
report (亚会深验字[2011]032 号).
(III) Operational turnover and costs
(1) Details of business turnover and costs:
Items Occurred this term Occurred last year
Turnover 44,378,065.25 42,313,848.48
Incl. Main business turnover 1,022,878.46 1,125,165.60
Other business income 43,355,186.79 41,188,682.88
Operation cost 11,314,912.66 12,498,134.64
Incl. Main business cost 671,466.39 2,472,503.13
Other business cost 10,643,446.27 10,025,631.51
(2) Turnover on categories of products
Name of industry Occurred this term Occurred last year
124
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
Operation Operation
Turnover Turnover
cost cost
Rail transportation
1,022,878.46 671,466.39 1,125,165.60 2,472,503.13
equipment
Rental 43,355,186.79 10,643,446.27 41,188,682.88 10,025,631.51
Total 44,378,065.25 11,314,912.66 42,313,848.48 12,498,134.64
(3) Turnover from top 5 clients
Name of clients Occurred this term Portion in total turnover
No.1 7,142,793.96 16.10%
No.2 5,470,523.53 12.33%
No.3 2,444,833.96 5.51%
No.4 1,616,908.96 3.64%
No.5 1,221,604.44 2.75%
Total 17,896,664.85 40.33%
(IV) Investment income
(1) Investment income by resources:
Sources of investment gains Occurred this term Occurred last year
Long-term equity investment gains on
57,338,200.00 43,936,500.00
cost basis
Other investment income 64,444.44
Total 57,402,644.44 43,936,500.00
(2) Long-term equity investment gains on cost basis:
Name of the Occurred this
Occurred last year Causation of change
Companies term
Fangda Decoration 49,195,000.00 34,436,500.00 本年子公司利润分配增加
Fangda Automatic 8,143,200.00 9,500,000.00
Total 57,338,200.00 43,936,500.00
Note: According to the resolutions adopted by the board meeting of Fangda Automatic held on
December 6, 2011, the profit of RMB9,000,000.00 realized in years up to November 2011 will be
distributed. According to the capital shares the Company holds, the Company is entitled to
RMB8,143,200.00 of dividend. According to the resolutions adopted by the board meeting of Fangda
Decoration held on December 31, 2011, the profit of RMB50,000,000.00 realized in years up to 2011
will be distributed. According to the capital shares the Company holds, the Company is entitled to
RMB49,195,000.00 of dividend. The two dividends were not received yet up to end of the report term.
(V) Appendix of Cash Flow Statement
Amount of Amount of Last
Supplementary Info.
current year Year
1.Net profit adjusted to cash flow of operation:
125
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
Amount of Amount of Last
Supplementary Info.
current year Year
Net profit 68,410,991.91 44,747,971.25
Plus: Asset impairment provision 427,828.17 5,290,131.62
Fixed asset depreciation, gas and petrol depreciation, production 2,210,970.53 2,223,723.20
goods depreciation
Amortizing of intangible assets 637,358.82 569,199.39
Amortizing of long-term expenses
Loss from disposal of fixed assets, intangible assets, and other 225,265.79 130,124.44
long-term assets (―-― for gains)
Loss from fixed asset discard (―-― for gains) 8,149.14
Loss from fluctuation of fair value (―-― for gains) -11,008,729.20 -13,793,517.90
Financial expenses (―-― for gains) 12,536,988.86 11,246,974.73
Investment loss (―-― for gains) -57,402,644.44 -43,936,500.00
Decrease of deferred income tax asset (―-― for increase) 746,700.07 3,335,574.15
Increase deferred income tax asset (―-― for decrease) 4,831,827.95 6,300,740.88
Decrease of inventory (―-― for increase)
Decrease of operational receivable items (―-― for increase) -62,382,349.30 54,443,592.44
Increase of operational payable items (―-― for decrease) -4,297,488.06 -128,844,669.37
Others
Cash flow generated by business operation, net -45,055,129.76 -58,286,655.17
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 end of year 24,337,261.80 30,297,718.91
Less: Balance of cash at beginning of year 30,297,718.91 42,024,488.50
Plus: Balance of cash equivalents at end of term
Less: Balance of cash equivalents at beginning of term
Net increasing of cash and cash equivalents -5,960,457.11 -11,726,769.59
XII. Supplementary Info.
（I） 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:
Items Occurred this term Note
Gain/loss from disposal of non-working capital,
including the neutralized part of the impairment -690,807.78
provision provided already
126
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
Items Occurred this term Note
Government subsidies accounted into current income
account (except for those government subsidies See Note
1,988,650.00
closely related to the Company’s business, and V(XXXX)-1
received at national statutory standard and amount)
Gain/loss from debt reorganization 3,959.20
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 99,342.47
valid period value instruments related to the
Company’s common businesses
Gain/loss from change of fair value of investment
property measured at fair value in follow-up 10,815,131.20
measurement
Other non-business income and expenditures other
6,080,071.96
than the above
Gains from
clearing of
Fangda Guoke
Other gain/loss items satisfying the definition of
878,478.35 which is taken
non-recurring gain/loss account
over by
Shenyang
Fangda
Total of non-recurring gain/loss 19,174,825.40
Less: Influenced amount of income tax 4,616,278.41
Net non-recurring gain/loss (influence on net profit) 14,558,546.99
Less: Influenced amount of minor shareholders’
60,101.30
equity
Non-recurring gain/loss attributable to net profit of
14,498,445.69
common shareholders of the parent company
Net profit attributable to common share holders of the
51,005,479.89
Company after deducting of non-recurring gain/loss
（II） Net income on asset and 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:
Current Year
Earnings per share
Profit of the report period Net income on Basic Diluted
asset, weighted earnings per earnings per
share share
Net profit attributable to common shareholders
6.28% 0.09 0.09
of the Company
Net profit attributable to the common owners of
the PLC after deducting of non-recurring 4.89% 0.07 0.07
gains/losses
127
China Fangda Group Co., Ltd. Notes to Financial Statements 2011
Previous Year
Earnings per share
Profit of the report period Net income on Basic Diluted
asset, weighted earnings per earnings per
share share
Net profit attributable to common shareholders
6.76% 0.08 0.08
of the Company
Net profit attributable to the common owners of
the PLC after deducting of non-recurring 3.14% 0.04 0.04
gains/losses
XIII. Approval of the financial statements
This financial statement is approved by the Board on April 18, 2012.
Legal representative: Accounting Manager: Manager of Accounting Dept.
China Fangda Group Co., Ltd.
April 18, 2012
128
