Stock Code: 000055, 200055 Stock ID: Fangda Group, Fangda B
Announcement No. 2012-37
China Fangda Group Co., Ltd.
Announcement on Temporally Using Idle Capital Raised as
Working Capital
The members of the Board and the Company acknowledge being responsible for the
truthfulness, accuracy, and completeness of the announcement. Not any false
record, misleading statement or significant omission carried in this announcement.
At the 14th meeting of the 6th term of Board held on August 17, 2012, the “Proposal
of Temporally Using Idle Capital Raised from Private Issuing of A Shares as Working
Capital” was approved. Details are as the followings:
I. Profiles of the capital raised
On May 26, 2010, as approved by China Securities Regulatory Commission with
document 证监许可[720]720 号, the Company was approved to issue up to 100
million new shares privately. According to the subscription situation and the
procedures and terms setout in the Subscription Invitation of Private Issuing of A
shares of China Fangda Group Co., Ltd., the amount of shares to be issued was set to
47,945,200 with face value of RMB1.00, and issuing price was RMB7.30. As of June
25, 2010, the Company has received the capital of RMB349,999,996.00 from
particular subscribers. After deducting of promotion expenses, the net amount of
capital raised was RMB336,586,871.73. Shenzhen Nanfang Minhe CPA Co., Ltd.
verified the capital (with result of RMB335,385,071.73, the balance of
RMB1,201,800.00 was not recognized as promotion expenses. This amount of capital
has been transferred back to the special bank account under Shenzhen Fangda
Automatic System Co., Ltd. – the fully-owned subsidiary which is the operator of
PSD expanding project) on March 1, 2011, and issued the Verification Report 深南
验字（2010）第 197 号. The original investment program for the capital raised from
private issuing of shares was: RMB210 million to energy-saving and PV curtain wall
production expanding project, RMB126.5869 million to PSD production expanding
project. As approved by the 1st Shareholders’ Provisional Meeting 2012 held on
March 9, 2012, RMB60 million of capital was transferred from PSD project over to
the PV curtain wall project. Upon that, the investment was adjusted to RMB270
million to energy-saving and PV curtain wall production expanding project,
RMB66.5869 million to PSD production expanding project. The capital raised was
saved in special bank accounts.
At the 7th meeting of the 6th term of Board held on February 20, 2012, the “Proposal
of Temporally Using Idle Capital Raised from Private Issuing of A Shares as Working
Capital” was approved. It was approved to use not-more-than RMB30 million of idle
raised capital to support the working capital since February 20, 2012. It would not
longer than 6 months. As of August 15, 2012, the Company has returned the RMB30
million used last time back to the special account for capital raised from share issuing.
And the sponsoring body and its representative were informed about the situation.
II. Details about Temporally Using Idle Capital Raised as Working Capital
Up to present, there is RMB90 million of capital raised has not being put into use yet.
To increase the efficiency of capital operation and reduce finance expenses, on the
precondition of not influencing the progress of proposed projects financed by the
capital raised, according to the “Instructions on standard operation of listed companies
on main board – Shenzhen Stock Exchange” and “Administration Rules of Capital
Raised” of the Company, as approved at the 14th meeting of the 6th term of Board,
the Company is about to continue to use the idle capital raised to support working
capital. The amount will be RMB30 million, and the period will not longer than 6
months since this proposal was adopted by the Board of Directors.
This proposal is good for increasing the capital efficiency without influencing the
normal operation of proposed investment projects. Basing upon the standard interest
rate of bank loans with six months (included) of period, it will save the Company
RMB840 thousand of financial expenses. Namely it will effectively reduce the
Company’s financial expenses. The proposal was made upon the construction plans
and progresses of the proposed projects to be financed by the capital raised. It will
neither influence the normal progress of these projects nor change the orientation of
capital raised, and made no harm to the benefits of the Company or the shareholders.
III. Statements of the independent directors
According to the “Instructions on standard operation of listed companies on main
board – Shenzhen Stock Exchange” and “Independent Directors’ Working
Regulations” as the independent directors of the Company, we investigated and
verified the proposal of using idle capital raised to support working capita. Followings
are our independent opinions:
1. As of August 15, 2012, the Company has returned the RMB30 million used last
time back to the special account for capital raised from share issuing. And the
sponsoring body and its representative were informed about the situation. Upon
ensuring the capital needs and normal progress of he proposed projects to be financed
by the capital raised, the Company temporally uses not-more-than RMB30 million of
idle raised capital to support the working capital. The amount was not more than 10%
of the net amount of raised capital and would not longer than 6 months.
Temporarily using the idle capital raised once again will increase the capital
efficiency and reduce operation costs. It shall not conflict with the projects proposed
to be financed by the capital raised. It neither substantially influences the normal
progress of these projects nor change the orientation of capital raised, and made no
harm to the benefits of the Company or the shareholders. It is according to the
“Instructions on standard operation of listed companies on main board – Shenzhen
Stock Exchange” and “Administration Rules of Capital Raised” of the Company, and
following legal procedures.
2. The approval procedures are complying with the Articles of Association and related
laws and regulations, and under the principles of open and trust. It’s for the best
interest of the Company’s development strategy and the shareholders as well.
3. Therefore we are affirmative on this proposal.
IV. Statement of the Supervisory Committee
The proposal to use not-more-than RMB30 million of idle raised capital to support the
working capital once again will increase the efficiency of capital operation and reduce
financial expenses without influencing normal application of the investment projects
or changing of investment orientation or impair the benefits of the shareholders. It is
upon legal procedures and complying with the “Standard operation of main board
listed companies” issued by Shenzhen Stock Exchange, the Articles of Association,
and Administration Rules of Capital Raised from Share Issuing. Thus the Supervisory
Committee is affirmative on the proposal to use not-more-than RMB30 million of idle
raised capital to support the working capital once again and will not longer than 6
months.
V. Statement of the sponsor
As of August 15, 2012, the Company has returned the RMB30 million used last time
back to the special account for capital raised from share issuing and announced
thereof. According to the executing plan and present situation of the projects proposed
to be financed by the capital raised from share issuing, China Fangda Group Co., Ltd.
proposed to use not-more-than RMB30 million of idle raised capital again to support
the working capital. The amount is not more than 10% of the net amount of raised
capital and will no longer than 6 months. We found it will increase the efficiency of
capital operation and reduce financial expenses. It is for the best interest of the
Company and shareholders. No altering of capital function will happen. Therefore we
are affirmative on this plan to use idle raised capital again to support the working
capital.
VI. Documents for reference
1. Resolutions of the 14th meeting of the 6th term of Board;
2. Independent opinions of the independent directors on using of idle capital from
share issuing and adjustment of investment among the projects;
3. Independent opinions of the supervisory committee on using of idle capital from
share issuing and adjustment of investment among the projects;
4. Verification opinions of the sponsoring body on using of idle capital from share
issuing and adjustment of investment among the projects;
The above is for the attention of the shareholders.
China Fangda Group Co., Ltd.
The Board of Directors
August 18, 2012
