Stock Code: 000055, 200055 Stock ID: Fangda Group, Fangda B
Announcement No. 2013-03
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.
It was the 18th session of the 6th term of Board held on February 21, 2013 on which the “The
proposal to use the idle capital raised by share issuing to support working capital for a temporary
period of time” was adopted.
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), 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 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. 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 February 4,
2013, 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 RMB65 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” , “Instructions on Supervisory on Listed Companies – No.2 Administration and
Supervisory of Raised Capital” issued by the CSRC, and “Administration Rules of Capital
Raised” of the Company, and approved at the 18th 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 February 4, 2013, 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” , “Instructions on Supervisory on Listed Companies – No.2
Administration and Supervisory of Raised Capital” issued by the CSRC,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 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, “Instructions on
Supervisory on Listed Companies – No.2 Administration and Supervisory of Raised Capital”
issued by the CSRC, 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 February 4, 2013, 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 18th session 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
February 22, 2013
