China Fangda Group Co., Ltd. 2012 Annual Report
China Fangda Group Co., Ltd.
2012 Annual Report
Feb. 2013
1
China Fangda Group Co., Ltd. 2012 Annual Report
I. Important Statement, Table of Contents and Definitions
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.
Mr. Xiong Jianming, the Chairman of Board, Mr. Lin Kebin, the Chief Financial Officer,
and Mr. Chen Yonggang, the manager of accounting department declare: the Financial
Report carried in this report is authentic and completed.
Directors other than the following ones have attended the Board meeting to review the
annual report.
Position of absent
Name of absent director Reason Name of proxy
director
Shao Hanqing Independent director Business engagement Guo Jinlong
Wang Shengguo Director Business engagement Xiong Jianwei
The Board meeting reviewed and approved the profit distribution preplan: distributing
cash dividend of RMB0.3 for each ten shares to all shareholders on the basis of all shares of
the Company on December 31, 2012 and no dividend share is issued to shareholders.
Forward-looking statements involved in this report including future plans do not make
any material promise to investors. Investors should pay attention to investment risks.
2
China Fangda Group Co., Ltd. 2012 Annual Report
Table of Contents
I. Important Statement, Table of Contents and Definitions ......................................................................................................................2
II. Company Profile .................................................................................................................................................................................7
III. Financial Highlight ..........................................................................................................................................................................10
IV Board of Directors’ Report ...............................................................................................................................................................14
V Significant Events ..............................................................................................................................................................................34
VI Changes in Share Capital and Shareholders .....................................................................................................................................41
VII Particulars about the Directors, Supervisors, Senior Management and Employees ........................................................................47
VIII Corporation Governance ................................................................................................................................................................55
IX Internal Control ................................................................................................................................................................................65
X Financial Statements ..........................................................................................................................................................................68
XI Documents for Reference ...............................................................................................................................................................208
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China Fangda Group Co., Ltd. 2012 Annual Report
Definitions
Defin
Terms Description
ed as
Fangda Group, company, the Defin
China Fangda Group Co., Ltd.
Company ed as
Defin Articles of Association of China Fangda Group Co.,
Articles of Association
ed as Ltd.
Defin Meetings of shareholders of China Fangda Group Co.,
Meeting of shareholders
ed as Ltd.
Defin
Board of Directors Board of Directors of China Fangda Group Co., Ltd.
ed as
Defin Supervisory Committee of China Fangda Group Co.,
Supervisory Committee
ed as Ltd.
Defin
Banglin Co. Shenzhen Banglin Technologies Development Co., Ltd.
ed as
Defin
Shilihe Co. Shenzhen Shilihe Investment Co., Ltd.
ed as
Defin
Shengjiu Co. Shengjiu Investment Ltd.
ed as
Defin
Fangda Decoration Shenzhen Fangda Decoration Engineering Co., Ltd.
ed as
Defin
Fangda Automatic Shenzhen Fangda Automatic System Co., Ltd.
ed as
Defin
Fangda New Material Fangda New Materials (Jiangxi) Co., Ltd.
ed as
Defin
Shenyang Fangda Shenyang Fangda Semi-conductor Lighting Co., Ltd.
ed as
Defin Shenzhen Fangda Guoke Optical & Electronics Co.,
Fangda Guoke
ed as Ltd.
Defin
Shenzhen Woke Shenzhen Woke Semi-conductor Lighting Co., Ltd.
ed as
Defin
Hong Kong Junjia Hong Kong Junjia Group Co., Ltd.
ed as
Defin
Fangda Aluminium Jiangxi Fangda New Type Aluminum Co., Ltd.
ed as
4
China Fangda Group Co., Ltd. 2012 Annual Report
Defin
Fangda Yide Co. Shenzhen Fangda Yide New Material Co., Ltd.
ed as
Defin
Dongguan New Material Dongguan Fangda New Material Co., Ltd.
ed as
Defin
Kexunda Co. Shenzhen Kexunda Software Co., Ltd.
ed as
Defin
Fangda Property Shenzhen Fangda Property Development Co., Ltd.
ed as
Defin
Chengdu Fangda Chengdu Fangda New Material Co., Ltd.
ed as
Defin
Shenyang Decoration Fangda Decoration Engineering (Shenyang) Co., Ltd.
ed as
Defin
CSRC China Securities Regulatory Commission
ed as
Defin
SZSE Shenzhen Stock Exchange
ed as
Defin
Sponsor, Zhongshan Securities Zhongshan Securities Co., Ltd.
ed as
5
China Fangda Group Co., Ltd. 2012 Annual Report
Major Risk Statement
The Company has specified market, management and production and operation risks in
this report. Please review the potential risks and measures mentioned in the discussion and
analysis of future development in IV. Board of Directors’ Report.
6
China Fangda Group Co., Ltd. 2012 Annual Report
II. Company Profile
1. Company profiles
Stock ID Fangda Group, Fangda B Stock code 000055, 200055
Modified stock ID (if
None
any)
Stock Exchange Shenzhen Stock Exchange
Chinese name China Fangda Group Co., Ltd.
Chinese abbreviation Fangda Group
English name (if any) CHINA FANGDA GROUP CO., LTD.
English abbreviation
CFGC
(if any)
Legal representative Xiong Jianming
Fangda Building, Kejinan 12th Avenue, High-tech Zone, Shenzhen, PR
Registered address
China.
Zip code 518057
Technology Building, Fangda Town, Xili Longjing, Nanshan District,
Office address
Shenzhen, PRC
Zip code 518055
Website http://www.fangda.com
Email fd@fangda.com
2. Contacts and liaisons
Secretary of the Board Representative of Stock Affairs
Name Zhou Zhigang Guo Linchen
Fangda Town, Xili Longjing, Fangda Town, Xili Longjing,
Address Nanshan District, Shenzhen, Nanshan District, Shenzhen,
PRC PRC
Tel. 86(755)26788571 ext. 6622 86(755)26788571 ext. 6622
Fax 86(755)26788353 86(755)26788353
Email zqb@fangda.com zqb@fangda.com
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China Fangda Group Co., Ltd. 2012 Annual Report
3. Information disclosure and inquiring
Information disclosure and
China Securities Journal, Security Times, Shanghai
inquiring Press medias of
Securities Daily, Hong Kong Commercial Daily
information disclosure
Website assigned by CSRC to release
http://www.cninfo.com.cn
the online reports
Place for information inquiry Secretarial Office of the Board
4. Registration changes
Registration Registration Business Tax registration Organization
date place license number number code
Shenzhen
Bureau of
First December 31, 440301501124 440301192448
Industry & 19244858-9
registration 1995 785 589
Commerce
Administration
Market
Registration at
Supervision
the end of the September 5, 440301501124 440301192448
Administration 19244858-9
reporting 2012 785 589
of Shenzhen
period
Municipality
Changes in main businesses
None
since the listing of the Company
In 1996, the Company listed it’s A and B shares and the
controlling shareholder is Shenzhen Fangda Group Co., Ltd. On
August 25, 2000, the controlling shareholder changed its name
Changes in the controlling into Shenzhen Fangda Economic Development Co., Ltd. On July
shareholders (if any) 5, 2002, the controlling shareholder changed into Shenzhen
Banglin Technologies Development Co., Ltd. By the end of this
reporting period, the controlling shareholder remains the
Shenzhen Banglin Technologies Development Co., Ltd..
5. Other information
Public accountants employed by the Company
Public accountants Grant Thornton (special general partner)
4th Floor, Scitech Place, 22 Jianguomen Wai Avenue, Chaoyang
Address
District, Beijing, China
Signing accountant names Liu Wei, Chen Zhaoxin
8
China Fangda Group Co., Ltd. 2012 Annual Report
Sponsor engaged by the Company to perform continued supervision and guide during the reporting
period
√ Applicable □ Inapplicable
Period of supervision
Sponsor name Office address Representatives
and guide
The period started on
July 15, 2010 and
ended on November 7,
2012. The sponsor has
submitted the sponsor
29th Floor, New World report to CSRC. Given
Zhongshan Securities Center, 6009 Yitian that the fund raised
He Lihui, Cui Lei
Co., Ltd. Road, Futian District, from non-public issue
Shenzhen of the Company in 2010
has not been fully used,
the sponsor will
continue to perform
supervision and guide
for the use of the fund.
Financial advisor engaged by the Company to perform continued supervision and guide during the
reporting period
□ Applicable √ Inapplicable
9
China Fangda Group Co., Ltd. 2012 Annual Report
III. Financial Highlight
1. Financial Highlight
The Company retroactively adjusts or restates financial statistics of the previous years because of
changes in account policies and correction of accounting errors.
□ Yes √ No
Increase/decreas
2012 2011 2010
e (%)
Turnover (RMB) 1,397,901,424.59 1,348,776,366.53 3.64% 1,161,933,356.48
Net profit attributable to
shareholders of the listed 24,948,377.20 65,503,925.58 -61.91% 55,063,374.25
company (RMB)
Net profit attributable to
the shareholders of the
listed company and after
7,361,274.38 51,005,479.89 -85.57% 25,603,881.05
deducting of
non-recurring gain/loss
(RMB)
Net cash flow generated
by business operation 59,262,071.37 -57,045,495.85 -31,187,262.97
(RMB)
Basic earnings per share
0.03 0.09 -66.67% 0.08
(yuan/share)
Diluted earnings per share
0.03 0.09 -66.67% 0.08
(yuan/share)
Net income on asset ratio
2.3% 6.28% -3.98% 6.76%
(%)
Increase/decreas
End of 2012 End of 2011 End of 2010
e (%)
Total asset (RMB) 2,327,802,889.51 2,163,325,598.14 7.6% 1,991,161,158.84
Net assets attributable to
the listed company’s
shareholders (owners’
1,098,612,195.57 1,073,843,444.65 2.31% 1,009,990,739.07
interests attributable to
shareholders of listed
company) (RMB)
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China Fangda Group Co., Ltd. 2012 Annual Report
2. Differences in accounting data under domestic and foreign accounting standards
1. Differences in net profits and assets in financial statements disclosed according to the
international and Chinese account standards
In RMB
Net profit attributable to the Net profit attributable to the
shareholders of the listed company shareholders of the listed company
Current term Previous term Closing amount Opening amount
On Chinese
24,948,377.20 65,503,925.58 1,098,612,195.57 1,073,843,444.65
accounting standards
Items and amounts adjusted according to International Accounting Standards
On international
24,948,377.20 65,503,925.58 1,103,375,593.81 1,078,606,842.89
accounting standards
2. Differences in net profits and assets in financial statements disclosed according to the overseas
and Chinese account standards
In RMB
Net profit attributable to the Net profit attributable to the
shareholders of the listed company shareholders of the listed company
Current term Previous term Closing amount Opening amount
On Chinese
24,948,377.20 65,503,925.58 1,098,612,195.57 1,073,843,444.65
accounting standards
Items and amounts adjusted according to overseas accounting standards
On IAS 24,948,377.20 65,503,925.58 1,103,375,593.81 1,078,606,842.89
3. Explanation of the differences in accounting data under domestic and foreign accounting
standards
Net assets attributable to the listed company’s shareholders calculated according to the IAS is
RMB4763398.24 higher than that calculated according to the domestic accounting standards,
mainly attributable to the capitalization of borrow expenses before the domestic Enterprise
Accounting Standard was implemented on January 1, 2007.
3. Accidental gain/loss item and amount
In RMB
Item 2012 2011 2010 Notes
Non-current asset disposal
260,038.90 -690,807.78 7,068,397.05
gain/loss (including the write-off
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China Fangda Group Co., Ltd. 2012 Annual Report
part for which assets impairment
provision is made)
Subsidies accounted into the
current income account (except
the government subsidy closely
6,275,756.00 1,988,650.00 5,537,950.00
related to the enterprise’s
business and based on unified
national standard quota)
Capital using expense charged to
non-financial enterprises and
1,180,032.08
accounted into the current
income account
Gain/loss from debt
3,959.20 -434,040.66
reorganization
Enterprise reorganization
expenses, such as employee
-1,273,987.08
settlement and integration
expenses
Gain/loss from change of fair
value of transactional financial
asset and liabilities, and
investment gains from disposal
of transactional financial assets
3,448,207.99 99,342.47 3,176,516.97
and liabilities and sellable
financial assets, other than valid
period value instruments related
to the Company’s common
businesses
Gain/loss from change of fair
value of investment property
12,290,834.22 10,815,131.20 13,921,217.90
measured at fair value in
follow-up measurement
Other non-business income and
917,890.35 6,080,071.96 5,845,075.37
expenditures other than the above
Other gain/loss items satisfying
the definition of non-recurring 878,478.35
gain/loss account
Influenced amount of income tax 5,353,185.48 4,616,278.41 4,287,837.54
Influenced amount of minority
1,432,471.24 60,101.30 93,798.81
shareholders’ equity (after-tax)
Total 17,587,102.82 14,498,445.69 29,459,493.20 --
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China Fangda Group Co., Ltd. 2012 Annual Report
Explanation statement should be made for accidental gain/loss items defined and accidental
gain/loss items defined as regular gain/loss items according to the Explanation Announcement of
Information Disclosure No. 1 - Non-recurring gain/loss mentioned.
□ Applicable √ Inapplicable
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China Fangda Group Co., Ltd. 2012 Annual Report
IV Board of Directors’ Report
1. Summary
In 2012, the global economy remains complex and the economy recovery is increasingly
sluggish. Facing greater economic uncertainties, the Company has continued to innovate its
technology and improve its management based on its competitiveness to achieve continued, stable
and solid growth. During the reporting period, the Company recorded an operating revenue of
RMB1,397,901,400, hitting the previous high; the new order volume totaled RMB1.934 billion, up
15% year-on-year; by the end of this reporting period, the order reserve reached RMB1.427billion.
The operating cash flow amounted to RMB59,262,100. The order reserve and cash flow has paved
the way for the Company’s operation in 2013.
1. Continuing to make headway in curtain wall system and material market exploration
In 2012, the Company aggressively promoted the curtain wall system and material business to
increase investment in hardware facilities and marketing. The Company accelerated the
construction of national industry base and adhered to the market strategy of focusing on
energy-saving and environmental-friendly high-end products based on its solid brand equity. In
addition to consolidating its market share in the south China market, the Company continued to
expand its shares in the northeast, north, east and southwest China markets and has made
remarkable headway. In 2012, the Company won bids in totally 28 high-end curtain wall projects
including the Shenzhen Excellence Meilin Central Plaza North, Jiangsu Xinhua Daily News Center,
Shanghai Jiading Cultural Activity Center, Chengdu Jinniu Wanda Plaza, Wuhan Central Cultural
Zone K5 Hanjie Wanda Plaza, Shenyang 12th National Games Operation Center and Hainan Green
Town Qingshuiwan Westin Hotel and Resort. The increase in orders shows a continued and strong
growth momentum.
While exploring the market, the Company actively organized its designing, purchase,
production end engineering to delivery products to customers as soon as possible. In the reporting
period, the sales revenue from the curtain wall system and material business reached
RMB1,260,903,500, up 42% year-on-year.
Underpinned by years’ experience and continued investment in hardware facilities, the
Company has build a solid foundation and brand equity in the curtain wall system and material
industry with strong expertise and operating and management capabilities. Fangda curtain wall
system has emerged as the most competitive brand in the industry. Driven by the policy of
“accelerating urbanization and improving the quality of urbanization” made on the economic
development meeting of the central government in the late 2012, the Company has taken measures
to fuel the development of its curtain wall system and material business, to create higher operating
revenue and profit for the company.
2. Strengthening internal management of metro equipment production and expanding oversea
markets
In the report period, the company product metro platform screen door has won the bidding for
Singapore Dashi Line Extension, Dongguan Urban Rail R2 Line and Xi’an Qujiang Light Rail
14
China Fangda Group Co., Ltd. 2012 Annual Report
Project for its advantages of “advanced performance, stable quality, reliable operation, perfect
outlook and high safety”. The Singapore Dashi Line Extension is one of the major and busiest rail
line in Singapore and is the company’s another breakthrough after the Hong Kong and Taiwan
metro platform screen door projects to pave the way for oversea market expansion.
The company joined this industry from 1999 and is one of the first enterprises of this industry.
Now the company has come to take the first place in the metro platform screen door product market
for its market share, brand influence, intellectual property, industrial standard and engineering
service. Through years’ development, the Company has obtained the core technology in developing
metro screen doors and owned 223 related patents, including 58 invention patents, accounting for
over half of aggregate obtained by domestic peers. In addition, the Company owned four software
copyrights. In 2013, the Company will take advantage of the opportunity created by the 19-city and
25-rail construction plan issued by the State Development and Reform Commission to secure more
orders.
In the reporting period, the Wuhan metro 2nd line screen door project department was given the
Outstanding Unit title.
3. Fangda Town renewal project performed according to the plan
In the reporting period, the Company’s Fangda Town project lying in Shenzhen Nanshan Xili
Longjing has been fitted into 2012 Shenzhen Urban Renewal Plan The First Projects by Shenzhen
Planning and Land Resources Committee and has been ratified by Shenzhen City Government.
Currently the Company is formatting the Fangda Town renewal plan and will put it into
construction as soon as it is ratified to elevate the value of the Company. The Fangda Town
renovation plan was approved and implemented, boosting the Company's brand equity. To
accelerate the project and realize the long-term development of the Company, the 16th meeting of
the 6th Board of Directors has approved the renewal construction plan of Fangda Town, which will
be constructed by Fangda Property, a fully-owned subsidiary of the Company, with a registered
capital of RMB10 million.
4. Industrial base construction taking shape
In the reporting period, the Company has basically completed the development plan and
construction of production bases in Beijing, Shanghai, Chengdu, Nanchang and Dongguan
Songshanhu, completing the national business landscape with Shenzhen as the headquarters,
Songshanhu as the base in south China region, Beijing as the base in the north, Chengdu in the
southwest and Shanghai and Nanchang in the east. The business landscape will pave the way for the
Company to increase its markets share and elevate overall competitiveness, helping the Company
boost production and growth.
5. Internal control construction improved continuously
The company has established internal control system by efforts for two years that the work of
rules performance has been basically finished and the internal control work has been pushed into
the consolidation stage. In order to strengthen the foundation made by the previous efforts, in the
report period the Company has optimized the internal control organizational structure, rules and
regulations, operation system and information system to improve the company operation
management and raise the risk protection capability.
6. Vigorously pushing forward personnel recruitment, training and reserves
Along with the industrial scale expansion and new manufacturing bases putting in use, the
company needs a large number of personnel for management, technology and manufacturing.
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China Fangda Group Co., Ltd. 2012 Annual Report
Therefore, the Company improved its talent introduction, selection, motivation and training
mechanisms. In 2012, the Company has created nearly 10,000 jobs and recruited more graduates
than in the previous years and 23% of them are graduates of the universities within the national 211
project thus to make the company a sufficient talent reserves.
7. Technical innovation
In the reporting period, the Company has paid 71.99 million yuan to push forward the research
and development for new product, new draft, new technology, new structure focusing on cleaner
production, safety production, energy efficient to make the company product more low carbon
environment-friendly and provide the company guarantee for sustainable development.
8. Others
In the reporting period, the Company won the title of “Guangdong Top 500” and “Shenzhen
Top 100” and was selected in the “2012 Top 100 Listed Companies in China” and “Charitable
Companies”.
In the reporting period, Fangda Decoration, a fully-owned subsidiary of the Company, won six
“National Construction Engineering Decoration” prizes and five 2011 Shenzhen Decoration Jinpeng
prizes and a series of titles and prizes including the China Top-50 Building Curtain Wall Providers,
Guangdong Outstanding QC Team, 2009-2012 Sci & Tech Innovation Company and Guangdong
Construction Engineering Jinjiang Prize.
In reporting period, the fully-owned subsidiary Fangda New Material obtained a practical new
type patent, adding the patents to 26, including 10 patents, ranking top among domestic competitors.
In the reporting period, Fangda Aluminium Plate was given the title of 2002-2012 Most Influential
Chinese Aluminium Composite Plate Brand and 2010-2012 Product Quality Certificate. Fangda
New Material was accredited as National Nanchang High-Tech Zone 20th Anniversary Outstanding
Enterprise and AAA Standard Good Practice Enterprise.
2. Main business analysis
1. Summary
The actual operating performance is over 20% lower or higher than the annual forecast result
disclosed earlier.
□ Applicable √ Inapplicable
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China Fangda Group Co., Ltd. 2012 Annual Report
2. Revenue
Notes
In the report period, the new orders of curtain wall systems and materials amounted to
RMB1.94 billion. New orders of metro screen doors amounted to RMB68 million and the operating
revenue grew 3.64% year-on-year.
The physical sales revenue is high the labor service revenue
√ Yes □ No
Industry Item 2012 2011 YOY change (% )
Curtain wall Sales 2,035,505 1,721,342 18.25%
system and Output 2,069,565 1,755,255 17.91%
materials Inventory 54,076 41,510 30.27%
Sales 1,400 1,650 -15.15%
Metro screen door Output 1,407 1,800 -21.83%
Inventory 76 83 -8.43%
Explanation for a year-on-year change of over 30%
□ Applicable √ Inapplicable
Major orders on hand
√ Applicable □ Inapplicable
In the report period, new orders for curtain wall systems and materials amounted to RMB1.94
billion. By December 31, 2012, the order reserve reached RMB1.89 billion, compared with
RMB1.35 year-on-year.
In the report period, new orders for metro screen doors amounted to RMB68 million. By the
end of the period, the order reserve amounted to RMB200 million, compared with RMB140 million
year-on-year. All previous orders will be completed before 2005.
Major changes or adjustment of products or services in the report period
□ Applicable √ Inapplicable
Main customers
Total sales amount to top 5 customers
391,033,460.52
(RMB)
Proportion of sales to top 5 customers in
27.96%
the annual sales
Information of the Company's top 5 customers
□ Applicable √ Inapplicable
3. Costs
Industry
In RMB
17
China Fangda Group Co., Ltd. 2012 Annual Report
2012 2011
Industry Item Proportion in Proportion in YOY change
Amount operating Amount operating (% )
costs (%) costs (%)
Metal Raw 736,768,455. 692,187,816.
69.57% 70.79% 6.4%
production materials 22 46
Metal 62,039,282.2 48,952,424.6
Labor 5.86% 5.01% 26.7%
production 4 2
Installation
Metal 218,488,650. 201,206,036.
and onsite 20.63% 20.58% 8.6%
production 25 20
expenses
Metal 41,674,557.0 35,459,016.6
Others 3.94% 3.63% 17.5%
production 5 5
Metal 1,058,970,94 977,805,293.
Total 100% 100% 8.3%
production 4.76 93
Railroad Raw 43,219,619.1 54,449,697.6
71.47% 74.22% -20.6%
industry materials 6 7
Railroad
Labor 5,355,339.41 8.86% 5,694,319.18 7.76% -6%
industry
Installation
Railroad
and onsite 7,386,677.35 12.21% 9,758,641.48 13.3% -24.3%
industry
expenses
Railroad
Others 4,512,824.33 7.46% 3,458,576.68 4.71% 30.5%
industry
Railroad 60,474,460.2 73,361,235.0
Total 100% 100% -17.6%
industry 5 1
Product
In RMB
2012 2011
Product Item Proportion in Proportion in YOY change
Amount operating Amount operating (% )
costs (%) costs (%)
Curtain wall
Raw 736,768,455. 692,187,816.
system and 69.57% 70.79% 6.4%
materials 22 46
materials
Curtain wall
62,039,282.2 48,952,424.6
system and Labor 5.86% 5.01% 26.7%
4 2
materials
Curtain wall Installation 218,488,650. 20.63% 201,206,036. 20.58% 8.6%
18
China Fangda Group Co., Ltd. 2012 Annual Report
system and and onsite 25 20
materials expenses
Curtain wall
41,674,557.0 35,459,016.6
system and Others 3.94% 3.63% 17.5%
5 5
materials
Curtain wall
1,058,970,94 977,805,293.
system and Total 100% 100% 8.3%
4.76 93
materials
Metro screen Raw 43,219,619.1 54,449,697.6
71.47% 74.22% -20.6%
door materials 6 7
Metro screen
Labor 5,355,339.41 8.86% 5,694,319.18 7.76% -6%
door
Installation
Metro screen
and onsite 7,386,677.35 12.21% 9,758,641.48 13.3% -24.3%
door
expenses
Metro screen
Others 4,512,824.33 7.46% 3,458,576.68 4.71% 30.5%
door
Metro screen 60,474,460.2 73,361,235.0
Total 100% 100% -17.6%
door 5 1
Main suppliers
Purchase amount of top 5 suppliers (RMB) 175,094,166.67
Proportion of purchase amount of top 5
suppliers in the total annual purchase 15.04%
amount (%)
Information of the Company’s top 5 suppliers
□ Applicable √ Inapplicable
4. Expenses
To be provided
5. R&D expenses
The curtain wall system and material R&D projects of the Company mainly include the R&D
of the high-efficiency energy-saving curtain wall, new material R&D and process improvement
project, development of metro screen door controlling system, development of communication
protocols. The projects aim to standardize products, reduce energy consumption, optimize the
production process and elevate production efficiency, elevate the Company’s energy efficiency,
reduce production and installation costs and develop environmental-friendly and competitive
products.
The total R&D expense in the report period accounts for 6.55% of the latest audited net assets
19
China Fangda Group Co., Ltd. 2012 Annual Report
and 5.15% of the latest audited operating revenue.
5. Cash flow
In RMB
Item 2012 2011 YOY change (% )
Subtotal of operating
1,307,973,426.84 1,252,726,153.03 4.41%
activity cash inflows
Subtotal of operating
1,248,711,355.47 1,309,771,648.88 -4.66%
activity cash outflows
Cash flow generated by
59,262,071.37 -57,045,495.85
business operation, net
Subtotal of investment
19,972,926.99 87,017,437.58 -77.05%
activity cash inflows
Subtotal of investment
107,622,445.60 165,395,766.81 -34.93%
activity cash outflows
Cash flow generated by
investment activities, -87,649,518.61 -78,378,329.23 11.83%
net
Subtotal of fund raising
770,368,873.33 397,000,000.00 94.05%
activity cash inflows
Subtotal of fund raising
801,936,873.47 430,340,014.63 86.35%
activity cash outflows
Cash flow generated by
fund raising activities, -31,568,000.14 -33,340,014.63 -5.31%
net
Net increasing of cash
-60,009,635.92 -168,701,706.37 -64.43%
and cash equivalents
Explanation for a year-on-year change of over 30%
√ Applicable □ Inapplicable
In this report period, the net cash flow generated by operating activities increased from RMB-57.4
million to RMB59.26 million. This is mainly attributable to the Company’s increased efforts in
collective receivables and note payment percentage.
The cash inflow of investment activities reduced 77.05% year-on-year, mainly attributable to
amount received from matured short-term financial products purchased with ideal capital and
deposit received for infrastructure construction projects;
The cash outflow of investment activities reduced 34.93% year-on-year, mainly attributable to the
purchase of short-term financial products with idle capital;
The cash inflow of fund raising activities increased 94.05% year-on-year, mainly attributable to the
cash received of short-term borrowings and issue of short-term financing bonds;
The cash outflow of fund raising activities increased 86.35% year-on-year, mainly attributable to
20
China Fangda Group Co., Ltd. 2012 Annual Report
repayment of short-term borrowings;
Explanation of major difference between the cash flow generated by operating activities and the net
profit in the year.
√ Applicable □ Inapplicable
The cash flow generated by operating activities during the report period is RMB52.82 million
higher than the net profit of the year, main attributable to the assets impairment, which does not
involves cash outflow;
3. Business composition
In RMB
Year-on-year Year-on-year Year-on-year
Operation Gross profit change in change in change in
Turnover
cost rate (%) operating operating gross profit
revenue (%) costs (%) rate (%)
Industry
Metal 1,260,903,46 1,058,970,94
16.01% 6.42% 8.3% -1.46%
production 6.71 4.76
Railroad 83,977,888.2 60,474,460.2
27.99% -14.51% -17.57% 2.67%
industry 6 5
Light
1,358,528.81 4,238,572.08
production
Product
Curtain wall
1,260,903,46 1,058,970,94
system and 16.01% 6.42% 8.3% -1.46%
6.71 4.76
materials
Metro screen 83,977,888.2 60,474,460.2
27.99% -14.51% -17.57% 2.67%
door 6 5
LED
1,358,528.81 4,238,572.08
products
District
1,218,323,61 1,033,772,60
Domestic 15.15% 0.1% 2.5% -1.99%
2.70 4.56
127,916,271. 89,911,372.5
Overseas 29.71% 62.05% 60.92% 0.5%
08 3
Main business statistics adjusted in the recent one year with the statistics criteria adjusted in the
report period
□ Applicable √ Inapplicable
21
China Fangda Group Co., Ltd. 2012 Annual Report
IV. Assets and Liabilities
1. Major changes in assets
In RMB
End of 2012 End of 2011
Proportio Proportio Change Notes
Amount n in total Amount n in total (% )
assets assets
Cash payment for
energy-saving curtain wall
Monetary 278,283,96 324,780,35 and electronic optical curtain
11.95% 15.01% -3.06%
capital 8.61 0.77 wall production expansion
project and metro screen
door production expansion
Account 774,890,80 664,333,49
33.29% 30.71% 2.58%
receivable 5.30 8.11
269,120,19 254,419,90
Inventory 11.55% 11.76% -0.21%
1.36 7.08
Investment 258,405,76 277,705,94
11.1% 12.84% -1.74%
real estate 2.09 9.35
341,555,81 316,775,39
Fixed assets 14.67% 14.64% 0.03%
0.21 8.58
Continuous investment for
Construction 175,138,69 81,799,896 energy-saving and electronic
7.52% 3.78% 3.74%
in process 4.28 .43 optical curtain wall
production expansion
2. Major changes in liabilities
In RMB
2012 2011
Proportio Proportio Change Notes
Amount n in total Amount n in total (% )
assets assets
Issue short-term financing
Short-term 181,970,00 387,000,00 -10.07
7.82% 17.89% bonds of RMB200 million,
loans 0.00 0.00 %
reducing short-term loans
22
China Fangda Group Co., Ltd. 2012 Annual Report
3. Assets and liabilities measured at fair value
In RMB
Accumulati
ve changes
Gain/loss in fair Amount
Impairment Amount
Opening caused by value purchased Closing
Item provided in sold in the
amount changes in accounting in the amount
the period period
fair value into the period
income
account
Financial
assets
3. Sellable
2,198,000.0 1,533,000.0
financial
0 0
assets
2,198,000.0 1,533,000.0
Subtotal
0 0
Investment 277,705,94 12,290,834. 1,200,647.2 254,766,25
real estate 9.35 22 6 6.33
279,903,94 13,823,834. 1,200,647.2 254,766,25
Total
9.35 22 6 6.33
Major changes in the assets measurement property of the Company in the report period
□ Yes √ No
5 Core Competitiveness Analysis
(1) Curtain wall system and material
1. Expertise and brand competitiveness
In response to the national call for energy saving and emission reduction, the Company has
aggressively develop solar electric and optimal and energy-saving curtain walls, developing a series
of domestic and global leading solar and energy-saving curtain wall products. The Company owns
336 curtain wall and material patents (including 34 invention patents) and one software copyright,
ranking top among domestic peers. It has achieved many firsts in the industry and created
incomparable brand equity, making it an optimal choice in the domestic high-end curtain wall and
material market.
2. Focusing on the high-end market to edge out competitors
Amid the fierce market competition, the Company has focused on the high-end energy-saving
curtain wall market and technical integration to improve high-end project quality. Moreover, it has
focused resources on high-end curtain wall engineering and won several Luban awards, Zhan
Tianyou Civil Engineering awards and Classic Construction for the 50th Anniversary of the
Foundation of the People’s Republic of China, High-Quality Construction, White Magnolia Prize
23
China Fangda Group Co., Ltd. 2012 Annual Report
and Customer Satisfactory Engineering and the title of “Top 10 Competitive Chinese Curtain Wall
Provider”. The Company has build a leading brand and created a clear edge in the high-end curtain
wall market.
3. Well-developed industry base landscape
Thanks to continued investment in facilities, the Company has established a national business
landscape with Shenzhen as the headquarters, Dongguan Songshanhu as the base in the south,
Beijing in the north, Chengdu in the southwest and Shanghai and Nanchang in the east. The
Dongguan Songshanhu and Nanchang bases are the largest and most advanced curtain wall system
and material production bases in China and across the world, fueling the Company to increase its
market share and competitiveness.
(2) Rail transport equipment business
1. Technical advantage
Through continued independent innovation, the Company has developed the global leading
metro screen door system with full intellectual property right and broken the monopoly of overseas
competitors. The Company has also compiled the Rail Transport Station Screen Door Standard,
which is the first of its kind in China. The standard was approved in April 2006 and was
implemented on March 1, 2007. As the first standard in the industry in China, the standard has
played a key role in guiding the development of China’s rail transport screen door industry and
enabled the Company a dominant lead in the industry. Currently, the Company has 223 metro
screen door patents, including 58 invention patents, accounting for half of the aggregate of domestic
competitors. The Company also has four computer software copyrights.
2. Brand equity
So far, the Company has undertaken rail screen door projects in cities including Beijing,
Shanghai, Tianjin, Shenyang, Nanjing, Guangzhou, Shenzhen, Dongguan, Wuhan, Xi’an, Dalian,
Hong Kong, Taipei and Singapore. The Fangda screen door system has grasped a leading market
share and established incomparable brand influence thanks to its patents, standard and maintenance
services. The Company has emerged as the Chinese No.1 and global No.3 screen door provider,
building a large competitive edge in the global market.
VI. Investment
1. External equity investment
(1) The Company has no external investment in the report period.
(2) The Company does not hold shares in financial enterprises in the report period.
(3) Securities investment
Numbe Openin Numbe Closin
Initial Closin
r of g r of g Gain/lo Accou
Securit Abbrev invest g book
Code shares shareh shares shareh ss nting Source
ies iation ment value
held at olding held at olding (RMB) item
cost (RMB)
beginni (%) end of (%)
24
China Fangda Group Co., Ltd. 2012 Annual Report
ng of the
the period
period (share)
(share)
Total 0.00 0 -- 0 -- 0.00 0.00 -- --
Notes to shareholding in other listed companies
The Company holds no share in other listed companies.
2. Trust wealth management, investment in derivatives and entrustment loan
(1) The Company has no trust wealth management in the report period.
(2) The Company has no investment in derivatives in the report period.
(3) The Company has no entrustment loan in the report period.
3. Use of raised capital
(1) Overview
In RMB10,000
Total amount of the raised capital 33,658.69
Total raised capital invested in the report
11,155.84
period
Total accumulative raised capital invested 27,055.36
Amount of raised capital of which the
6,000
purpose was changed in the report period
Accumulative amount of raised capital of
6,000
which the purpose has been changed
Proportion of raised capital of which the
17.83%
purpose has been changed (%)
Notes to use of raised capital
By the end of the report period, the Company has strictly comply with the Instruction on Standard
Operation of PLCs on the Main Board of Shenzhen Stock Exchange and provisions for use and
management of raised capital of the Company to deposit and use the raised capital.
(2) Promised raised-capital-based projects
In RMB10,000
Project promised If Promis Adjust Invest Accum Invest Date Profit Wheth Any
to be invested invest ed total ed total ment ulative ment when realize er the major
25
China Fangda Group Co., Ltd. 2012 Annual Report
with the raised ment invest invest in the invest progres the d in the estimat change
capital and project ment ment report ment s by project period e profit in the
investment of the is of the (1) period by the the end becom is feasibil
excessive raised change raised end of of the e realize ity
capital d capital the period( useable d
(includ period %)(3) as
ing (2) ＝ propos
partial (2)/(1) ed
change
)
Promised investment projects
1. Energy-saving
March
and PV curtain 8,198.4 21,465.
Yes 21,000 27,000 79.5% 31, No
wall production 8 83
2013
expansion project
2. PSD Decem
12,658. 6,658.6 2,957.3 5,589.5 83.94
production Yes ber 31, No
69 9 6 3 %
expansion project 2012
Subtotal of
promised 33,658. 33,658. 11,155. 27,055.
-- -- -- 0 -- --
investment 69 69 84 36
projects
Investment of excessive raised capital
Subtotal of
investment of
-- 0 0 0 0 -- -- 0 -- --
excessive raised
capital
33,658. 33,658. 11,155. 27,055.
Total -- -- -- 0 -- --
69 69 84 36
Reason or
situation that not The construction progress of the Dongguan Technology Zone was delayed and
on schedule (on is not ready for move-in.
specific project)
Notes to major
changes in None
project feasibility
Amount, purpose
and use of
Inapplicable
excessive raised
capital
Changes in Applicable
26
China Fangda Group Co., Ltd. 2012 Annual Report
implementation Occurred in previous years
place of
To improve the Company's industry landscape, simplify the Company’s
investment
management and reduce management costs, the 24th meeting of the 5th term of
funded by raised
the Board of the Company approved the proposal of changing the
capital
implementation place of the energy-saving and photo-electric curtain wall
production expansion project and increasing the implementation entities and
changed the implementation place to Dongguan, Guangdong.
Adjustment of Applicable
the Occurred in the report period
implementation
way of On March 9, 2012, the 1st provisional shareholders’ meeting of the Company
investment approved the adjustment proposal to put the RMB60 million for the metro
funded by raised screen door production expansion to the energy-saving and photo-electric
capital curtain wall production expansion project.
Applicable
Pre-investment On September 30, 2010, it was decided to use the raised capital of
and replacement RMB4,347,753.09 to replace the investment made previously by Fangda
by raised capital Automatic RMB1,403,503.00 and Fangda Decoration RMB2,944,250.09. This
has been verified by 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 RMB10 million was made to Fangda Automatic. On
August 19, 2011, the returned idle capital RMB30 million was transferred to
raised capital account. On August 23, 2011, payment of RMB20 million was
Idle raised capital made from idle raised capital to Fangda Decoration; and RMB10 million was
used as working made to Fangda Automatic. On February 16, 2012, the returned idle capital
capital RMB30 million into the raised capital account. On 22.02.12, payment of
RMB20 million was made from idle proceeds to Fangda Decoration; and
RMB10 million was made to Fangda Automatic. On 15.08.12, the returned idle
capital RMB30 million was transferred to raised capital account. On August 17,
2012, payment of RMB20 million was made from idle proceeds to Fangda
Decoration; and RMB10 million was made to Fangda Automatic. Both were not
over six months.
Surplus of
investment and Inapplicable
cause
Use plan of
retained fund Inapplicable
from financing
Problem or None
27
China Fangda Group Co., Ltd. 2012 Annual Report
situation in using
of raised capital
and disclosing
(3) Altering of projects financed by raised capital
In RMB10,000
Total Accumul Investme Any
investme ative nt Date major
nt of Actual actual progress when the Whether change
Correspo Profit
raised investme investme by the project the in the
Altered nding realized
capital in nt in the nt by the end of become estimate feasibilit
project promised in the
the report end of the useable profit is y after
project period
altered period the period(% as realized the
project period )(3)=(2)/ proposed alteratio
(1) (2) (1) n
1. 1.
Energy-s Energy-s
aving aving
and PV and PV
curtain curtain 21,465.8 March
27,000 8,198.48 79.5% No
wall wall 3 31, 2013
producti producti
on on
expansio expansio
n project n project
2. PSD 2. PSD
producti producti Decemb
on on 6,658.69 2,957.36 5,589.53 83.94% er 31, No
expansio expansio 2012
n project n project
33,658.6 11,155.8 27,055.3
Total -- -- -- 0 -- --
9 4 6
The screen door project in Nanchang aimed to use a plant in Dafang
Jiangxi new material industry zone as the production base. This can
reduce the investment of RMB60 million for new plant, office and
Alteration reason, facilities. According to the resolution of the 24th meeting of the 5th
decision-making process and term of the Board, the proposal of changing the implementation
information disclosure (by place of the energy-saving and photo-electric curtain wall production
project) expansion project and increasing the implementation entities was
approved to change the implementation place to Dongguan,
Guangdong. As a new factory and part of the office and facilities
must be built in Dongguan, the investment is forecast to increase to
28
China Fangda Group Co., Ltd. 2012 Annual Report
RMB75 million. Given the alteration of the two projects, the capital
RMB 60 million for the screen door project is transferred to the
curtain wall project, while the insufficient part made up by the
self-owned capital.
Reason or situation that not
The construction progress of the Dongguan Technology Zone was
on schedule (on specific
delayed and is not ready for move-in.
project)
Notes to major changes in
project feasibility after the None
alteration
4. Analysis of major subsidiaries and joint-stock companies
Major subsidiaries and joint-stock companies
Main Operati
Register Total
Compan products Net asset Turnover ng Net profit
Type Industry ed asset
y or (RMB) (RMB) profit (RMB)
capital (RMB)
services (RMB)
Fangda Curtain
Type of Decorati 310,000, 1,169,24 360,350, 1,113,87 46,684, 40,895,57
Decorati wall
subsidiary on 000.00 5,430.70 748.56 9,757.68 907.77 8.89
on system
Fangda Metro
Type of Railroad 105,000, 290,962, 186,987, 88,294,4 4,434,8 3,405,863.
Automat screen
subsidiary industry 000.00 171.13 656.29 00.68 35.80 97
ic door
Fangda Metal
Type of Aluminu 99,328,8 302,467, 106,920, 210,469, -5,870, -3,686,73
New producti
subsidiary m sheet 00.00 038.31 165.20 238.74 635.86 1.27
Material on
Major subsidiaries and joint-stock companies
Fangda Decoration, a leading high-end curtain wall system producer in China, is mainly
involved in design, production and engineering of various building curtain wall systems, windows,
doors, interior design and furniture.
Fangda Automatic is China’s largest and world’s third largest metro screen door R&D,
production and engineering company.
Fangda New Material is one of the largest producers of aluminum sheets and composite
aluminum sheets.
Acquisition and disposal of subsidiaries in the report period
□ Applicable √ Inapplicable
29
China Fangda Group Co., Ltd. 2012 Annual Report
5. The Company has no major project financed not by raised capital in the report period.
7. Entities on which the Company has control power
There is entity on which the Company has control power.
8. Future Prospect
(1) Future Prospect
In 2013, the Company will seek to maintain the solid growth momentum. Facing new
opportunities and challenges, the Company will continue to develop its curtain wall system and
material business to become a leader in the high-end market, making headway in ultra-high,
ultra-large, key areas and exports. In addition, the Company will become a domestic leader in plate
deep processing industry and consolidate its position in the domestic metro screen door market and
aggressively expand globally. Around the aim of collecting receivables, reducing costs, improving
quality and controlling risks, the Company has continued to make progress in technology,
production and business development and has reinforced the technical management, production
designing and intellectual property right protection. The Company will continue to upgrade its five
production bases in Dongguan Songshanhu, Nanchang, Beijing, Shanghai and Chengdu, further
improving its business landscape and pushing forward the Fangda Town renovation program. It will
step up the efforts to recruit and train professionals in various fields and strengthen staff training to
improve staff’s capabilities, responsibility awareness, cohesion, dedication and loyalty to the
Company. In addition, the Company will continue to improve its HR system to meet demands of
corporate development.
(2) Risks facing the Company and measures
1. Market risks and measures
The deepening adjustment of the domestic real-estate industry will bring the risk of tougher
competition for the construction curtain wall industry. To cope with the risk, the Company will take
a solid business strategy, reducing management costs and increasing the efforts to recover
receivables on the one hand, and boosting technical innovation, improving product quality, reducing
product costs and improving the economy profits on the other hand, thus improving the Company’s
competitiveness and risk resistance.
2. Management risks and measures
With the development and expansion of the national business landscape, the Company faces
severe management risks and urgently needs a large number of management, technical and senior
technical professionals. Therefore, the Company will further improve its recruitment, selection,
incentive and training programs and the internal control system, play full play to IT tools and
improve work efficiency and management.
3. Production and operation risks and measures
The macro-economy and market demand have added to the fluctuation in prices of main raw
materials such as aluminum and steel and labor, affecting the Company’s profitability and creating
additional production and operation risks for the Company. Therefore, with aim of collecting
receivables, reducing costs, improving quality and controlling risks, the Company will strengthen
30
China Fangda Group Co., Ltd. 2012 Annual Report
the risk forecast and final accounting management and increase the risk awareness in production
and operation, reduce purchase and production costs, raising efficiency and management, thus
maintaining the rapid and stable development of the Company.
(3) Future capital demand for development
In 2013, the Company’s business development needs another working capital of RMB400
million. The Company plans to meet the demand through bank loans and issue of financing bonds;
the energy-saving and photo-electric curtain wall production expansion project and metro screen
door production expansion project need RMB66 million, all of which will be financed by the raised
capital.
9. Statement of the Board on the “non-standard auditors’ report” issued by the CPA on the current
report period
The Company’s auditor Grant Thornton (limited liability partnership) issued the standard opinion
auditor’s report for the Company’s 2012 financial statement.
10. Statement of changes to accounting policies, estimates and audit methods compared with the
financial report of the previous year
Changes to accounting policies, estimates and audit methods compared with the financial report of
the previous year
11. Statement of retrospective restatement of major accounting errors in the report period
There is no major accounting errors that need to be corrected in the report period.
12. Statement of change in the financial statement consolidation scope compared with the previous
financial report
Three companies are newly added as the Company established the Shenzhen Fangda Property
Development Co., Ltd. through investment during the report period and Fangda New Material Co.,
Ltd. and Fangda Decoration (Shenyang) Co., Ltd through investment by Fangda Decoration.
13. Profit distribution and dividend payment of the Company
Establishment, implementation or adjustment of profit distribution policies especially the cash
dividend policy during the report period
According to the Notice about Implementing of Cash Dividend Plan issued by CSRC, with
regarding of the Company’s practice, the Company has revised some of the articles of the Articles
of Association involve with profit distribution. The Shareholders’ Rewarding Plan 2012-2014 was
produced (the Rewarding Plan). The revising proposal and the Rewarding Plan was examined and
adopted at the 12th meeting of the 6th term of Board as well as the 3rd provisional shareholders’
meeting 2012. The decision making procedures comply with the regulations.
31
China Fangda Group Co., Ltd. 2012 Annual Report
The Company conducts profit distribution strictly according to the Articles of Association.
The current cash dividend policies are complying with the Articles of Association and resolutions of
the shareholders’ meeting. The dividend standards and rates are clear and specific, a mature
decision making program has been established, the independent directors are performing their
duties effectively, mid-small shareholders have been given sufficient opportunities to express their
opinions, and their legal benefits are protected.
The Articles of Association (Revised) and The Shareholders’ Rewarding Plan 2012-2014 were
published on www.cninfo.com.cn on July 5, 2012.
The profit distribution preplan and capitalization preplan during the report period comply with
requirements of the Articles of Association.
Profit distribution and reserve capitalizing pre-plans or plans over the recent three years (including
the reporting period)
2010: No profit distribution, capital reserve is capitalized base on the total of 504,606,604 capital
shares, 5 bonus shares were issued to each 10 shares of the entire shareholders.
2011: No profit distribution and reserve capitalizing.
2012: A cash dividend of RMB0.30 (including tax) for each ten shares is issued to all shareholders
on the basis of 706,909,905 shares with a total amount of RMB 22,707,297.15, on December 31,
2012. No dividend share or capitalization share is issued in the year.
Cash dividends for the recent three years
In RMB
Proportion in the net
Net profit attributable
project attributable to
Cash dividend to shareholders in the
Year shareholders in the
(including tax) consolidated financial
consolidated financial
statements
statements
2012 22,707,297.15 24,948,377.20 91.02%
2011 0.00 65,503,925.58 0%
2010 0.00 55,063,374.25 0%
No cash dividend is proposed despite the Company records profits in the report period and a
positive undistributed profit.
□ Applicable √ Inapplicable
14. Social responsibilities
In the reporting period , the Company has positively assumed social responsibilities by: paying
taxes RMB88.92 million, up 18.97% year-on-year; achieving export revenue USD20.89 million, up
66.79%; donating RMB120,000 and investing RMB718,500 to create nearly 10,000 jobs; inputting
RMB1.91 million in employee knowledge and skill training. The company has invested
RMB70,560,000 to promote development of new draft, technology, product structure and patent
according to clean, safety and efficient production to make contribution for environmental
protection.
32
China Fangda Group Co., Ltd. 2012 Annual Report
15. Reception of investigations, communications, or interviews in the reporting period
Main content
Time/date Place Way Visitor Visitor involved and
materials provided
China
December 26, Onsite Business and future
The Company Institution Investment
2012 investigation development
Securities
Between Jan. Telephone
Off site Public Business and future
1, 2012 and communicatio Individual
reception investor development
Dec. 31, 2012 n
33
China Fangda Group Co., Ltd. 2012 Annual Report
V Significant Events
1. Significant lawsuit and arbitration
The Company faces no significant lawsuit, arbitration or media questioning event.
2. Non-operating capital use by the controlling shareholder or related parties in the reporting term
No capital adoption or repaying by the controlling shareholder or related parties occurred in the
report term, Grant Thornton has provided special statement on this issue. See
http://www.cninfo.com.cn on March 23, 2013 for the disclosure reference.
3. Bankruptcy and capital reorganizing
None
4. Assets trade
The Company has no assets acquisition, sales or merger during the reporting period.
5. Implementation and influences of share equity incentive program
The Company has not implemented a share equity incentive program during the reporting period.
6. The Company has no significant related transaction in the report period
7. Significant contracts and performance
1. Asset entrusting, leasing, contracting
(1) No asset entrusting in the report period
(2) No contracting in the report period
(3) Leasing
The Company leases investment real estates and obtained a lease income of RMB36.18 million in
the report period.
Projects that create gains accounting for over 10% of the Company’s total profit in the report period
√ Applicable □ Inapplicable
Contrac Leased Amount Starting Stop Lease Pricing Influenc Related Relatio
Leasee
t-out assets involve date date income basis e on the transacti nship
34
China Fangda Group Co., Ltd. 2012 Annual Report
party d by the (in Compa on
leased RMB10 ny
assets ,000)
(in
RMB10
,000)
Shenzhe 39.50%
n of the
The Yachan Part of total
July 1, June 30, Monthl
Compan g Color Fangda 8,162 772.09 profit in No
2005 2013 y rental
y Printing Town the
Co., report
Ltd. period
2. Guarantee
In RMB10,000
External guarantees made by the Company (exclude those made for subsidiaries)
Actual date
of
Date of Guarant occurring Actual Compl Relate
Guarantee Type of
disclosur ee (signing amount of Term eted or d party
provided to guarantee
e amount date of guarantee not or not
agreements
)
Total of external
Total of external
guarantee actually
guarantee approved in the 0 0
occurred in the report
report term (A1)
term (A2)
Total of external
Total of external
guarantee actually
guarantee approved as of 0 0
occurred as of end of
end of report term (A3)
report term (A4)
Guarantee provided to subsidiaries
Actual date
of
Date of Guarante occurring Actual Compl Relate
Guarantee Type of
disclosur e (signing amount of Term eted or d party
provided to guarantee
e amount date of guarantee not or not
agreements
)
Fangda February 50,000 June 29, 28,776.74 Joint since No
35
China Fangda Group Co., Ltd. 2012 Annual Report
Decoration 21, 2012 2012 liability engage of
contract
to 2 years
upon due
of debt
since
engage of
Fangda February May 24, Joint contract
12,000 1,035.92 No
Decoration 21, 2012 2012 liability to 2 years
upon due
of debt
since
engage of
Fangda April 20, April 16, Joint contract
14,285 No
Decoration 2012 2012 liability to 2 years
upon due
of debt
since
engage of
Fangda February July 27, Joint contract
25,000 4,803.16 No
Automatic 21, 2012 2012 liability to 2 years
upon due
of debt
since
engage of
Fangda August September Joint contract
550.62 550.62 No
Automatic 19, 2010 29, 2010 liability to 2 years
upon due
of debt
since
engage of
Fangda April 20, April 16, Joint contract
7,142 No
Automatic 2012 2012 liability to 2 years
upon due
of debt
Fangda New February June 6, Joint
5,800 894.23
Material 21, 2012 2012 liability
since
engage of
Fangda New February July 17, Joint
5,000 796.09 contract No
Material 21, 2012 2012 liability
to 2 years
upon due
36
China Fangda Group Co., Ltd. 2012 Annual Report
of debt
Total of guarantee to
Total of guarantee to
subsidiaries actually
subsidiaries approved in 119,777.62 51,693
occurred in the report
the report term (B1)
term (B2)
Total of balance of
Total of guarantee to guarantee actually
subsidiaries approved as 119,777.62 provided to the 36,856.76
of the report term (B3) subsidiaries as of end
of report term (B4)
Total of guarantee provided by the Company (total of the above two)
Total of guarantee Total of guarantee
approved in the report 119,777.62 occurred in the report 51,693
term (A1+B1) term (A2+B2)
Total of guarantee
Total of guarantee
occurred as of the end
approved as of end of 119,777.62 36,856.76
of report term
report term (A3+B3)
(A4+B4)
Percentage of the total guarantee occurred
33.55%
(A4+B4) on net asset of the Company
Including:
Guarantees provided to the shareholders,
substantial controllers and the related parties 0
(C)
Guarantee provided directly or indirectly to
objects with over 70% of liability on asset ratio 0
(D)
Amount of guarantee over 50% of the net asset
0
(E)
Total of the above 3 (C+D+E) 0
Statement on the possible joint liabilities on the
None
guarantees not due yet
Statement of external guarantees violating the
None
procedure
37
China Fangda Group Co., Ltd. 2012 Annual Report
(1) The Company has no external guarantee that violates the procedure in the report period.
3. No other significant contract
8. Fulfilling of commitments
1. Commitments of shareholders with over 5% of shares made in the report term or carried over
from previous terms
2. The Company made no prediction or commitment on the profitability of future.
9. Engaging and dismissing of CPA
CPA engaged currently
Domestic public accountants name Grant Thornton (special general partner)
Remuneration for the domestic public
130
accountants (in RMB10,000)
Consecutive years of service by the
1
domestic public accountants
Name of certified accountants of the
Liu Wei, Chen Zhaoxin
domestic public accountants
Overseas public accountants name (if
None
any)
Remuneration for the overseas public
0
accountants (in RMB10,000)
Consecutive years of service by the
None
overseas public accountants (if any)
Name of certified accountants of the
None
overseas public accountants (if any)
Whether the CPA is replaced
√ Yes □ No
Whether the CPA is replaced in the auditing period
□ Yes √ No
Whether the approval process is completed to replace the CPA
√ Yes □ No
Details of the CPA replacement and change
Ascenda Certified Public Accountants – the former auditing body of the Company has merged
with Jingdu Tianhua CPA (limited liability partnership). Jingdu Tianhua CPA was remained as the
legal entity after the merger and renamed to “Grand Thornton China (limited liability partnership)”.
For purpose of keeping the coherence and stability of external auditing work, the Auditing
Committee proposed to hire Grand Thornton China (limited liability partnership) as the CPA of the
38
China Fangda Group Co., Ltd. 2012 Annual Report
Company for year 2012. The auditing fee will be RMB1.3 million, and with term of one year. This
was to the consent of the Board of Directors in advance.
Engaging of internal control audit CPA, financial advisor and sponsor
√ Applicable □ Inapplicable
This year, the Company engaged Grand Thornton China (limited liability partnership) as the
financial statement and internal control auditing CPA with a fee of RMB1.3 million.
9. Statement of the Supervisory Committee and Independent Directors (if applicable) on the
“non-standard auditors’ report” issued by the CPA on the current report period
Inapplicable
11. Punishment and rectification
None
12. Trade suspension and termination after the disclose of the annual report
Inapplicable
13. Other material events
(1) On January 7, 2012, the Company published an announcement on the approval of the
application for issuing of short term bonds on China Securities Journal, Shanghai Securities Daily,
Securities Times and HKCD;
(2) On April 11, 2012, the Company published an announcement on the progress of the
application for urban renovation plan on China Securities Journal, Shanghai Securities Daily,
Securities Times and HKCD;
(3) On June 19, 2012, the Company published an announcement on the 10th meeting of the 6th
term of the Board, on which the proposal of suspending the operation of Shenyang Fangda, a
controlling subsidiary, was approved on China Securities Journal, Shanghai Securities Daily,
Securities Times and HKCD;
(4) On July 5, 2012, the Company published an announcement on the 10 th meeting of the 6th
term of the Board, on which The Shareholders’ Rewarding Plan 2012-2014 was approved on China
Securities Journal, Shanghai Securities Daily, Securities Times and HKCD;
(5) On November 19, 2012, the Company published an announcement on the completion of
issuance of the first phase of the short-term bonds on China Securities Journal, Shanghai Securities
Daily, Securities Times and HKCD.
14. Material events of subsidiaries
On June 18, 2012, the 10th meeting of the 6th term of the Board approved the proposal of
39
China Fangda Group Co., Ltd. 2012 Annual Report
suspending the operation of controlling subsidiary Shenyang Fangda. The announcement of the
proposal was published on China Securities Journal, Shanghai Securities Daily, Securities Times,
HKCD and www.cninfo.com.cn.
15. Bond issuance
None
40
China Fangda Group Co., Ltd. 2012 Annual Report
VI Changes in Share Capital and Shareholders
一、 Changes in shares
No change in the Company’s shares in the report period
2. Share placing and listing
1. Share issuing in latest three years
Name of the
Price of issue Approved Date when
shares and Amount Date of
Date of issue (or interest amount to be trading is
derivate issued listing
rate) listed terminated
securities
Shares
A-stock
issued June 4, 2010 RMB7.3 47,945,200 July 15, 2010 47,945,200
privately
Statement of security issuing in latest three years
In 2010, the Company issued privately 47,945,200 A shares to six particular investors at price
of RMB7.30 each. Totally RMB349,999,960 was raised. The shares were listed on July 15, 2010.
The Company hadn’t issued shares in prior three years. The Company has not issued securities in
the last three years in addition to the above-mentioned one.
2. Statement of changes in share number and shareholder structure, assets and liabilities structure
None
3. Current employees’ shares
None
3. Shareholders and the substantial controller of the Company
1. Shareholders and shareholding
In share
Number of shareholders by the end of the
Number of shareholders in
73,145 5th date day before the disclosure date of
the reporting period
the annual report
41
China Fangda Group Co., Ltd. 2012 Annual Report
Top 10 shareholders of the Company
Numb Pledging or freezing
er of Amou
shares Chang nt of
held e in shares
Condi
Name of the Properties of Shareholding at the the witho
tional
shareholder shareholder (%) end of report ut Share status Amount
shares
the ing sales
report period restric
ing tion
period
Shenzhen
Banglin Domestic No
68,77
Technologies non-state 9.09% chang
4,273
Development legal person e
Co., Ltd.
Liaoning
Fangda Domestic
30,76
Group non-state 4.06% New
5,226
Industry Co., legal person
Ltd.
Shenzhen
Shilihe Overseas 21,33 Increa
2.82%
Investment legal person 9,867 se
Co., Ltd.
Shenzhen
Domestic No
Shilihe 17,86
non-state 2.36% chang
Investment 0,992
legal person e
Co., Ltd.
Domestic No
Wang 16,80
natural 2.22% chang
Shaolin 0,000
person e
Domestic
3,337, Increa
Cao Yifan natural 0.44%
465 se
person
Domestic No
2,305,
Chen Lihong natural 0.3% chang
365
person e
Jiangxi Domestic
2,050,
International non-state 0.27% New
000
Trust Co., legal person
42
China Fangda Group Co., Ltd. 2012 Annual Report
Ltd Capital
Trust
Contract
(Jinshi
No.199)
SOOCHOW
Securities
Customer
Domestic
Credit 1,930,
non-state 0.25% New
Transaction 000
legal person
Guarantee
Securities
Account
Domestic
1,670, Decre
Zheng Fan natural 0.22%
426 ase
person
A strategic investor or
ordinary legal person
becomes the Top10 None
shareholder due a stock
issue.
Among the top 10 shareholders, Shenzhen Banglin Technology
Development Co., Ltd. and Shengjiu Investment Co., Ltd. are parties
Notes to top ten
action-in-concert. Shenzhen Banglin Technology Development Co.,
shareholder relationship or
Ltd. and Shenzhen Shilihe Investment Co., Ltd. are related parties.
"action in concert"
The Company is not notified of other action-in-concert or related
parties among the other holders of current shares.
Top 10 holders of unconditional shares
Category of shares
Amount of shares without sales
Name of the shareholder
restriction at the end of the year (Note 4) Category of Amount
shares
Shenzhen Banglin RMB
Technologies Development 68,774,273 common 68,774,273
Co., Ltd. shares
RMB
Liaoning Fangda Group
30,765,226 common 30,765,226
Industry Co., Ltd.
shares
Foreign
shares listed
Shengjiu Investment Ltd. 21,339,867 21,339,867
in domestic
exchanges
43
China Fangda Group Co., Ltd. 2012 Annual Report
RMB
Shenzhen Shilihe
17,860,992 common 17,860,992
Investment Co., Ltd.
shares
RMB
Wang Shaolin 16,800,000 common 16,800,000
shares
Foreign
shares listed
Cao Yifan 3,337,465 3,337,465
in domestic
exchanges
Foreign
shares listed
Chen Lihong 2,305,365 2,305,365
in domestic
exchanges
Jiangxi International Trust RMB
Co., Ltd Capital Trust 2,050,000 common 2,050,000
Contract (Jinshi No.199) shares
SOOCHOW Securities
RMB
Customer Credit
1,930,000 common 1,930,000
Transaction Guarantee
shares
Securities Account
Foreign
shares listed
Zhen Fan 1,670,426 1,670,426
in domestic
exchanges
No action-in-concert or
Among the top 10 shareholders, Shenzhen Banglin Technology
related parties among the
Development Co., Ltd. and Shengjiu Investment Co., Ltd. are parties
top10 unconditional
action-in-concert. Shenzhen Banglin Technology Development Co.,
shareholders and between
Ltd. and Shenzhen Shilihe Investment Co., Ltd. are related parties.
the top10 unconditional
The Company is not notified of other action-in-concert or related
shareholders and the top10
parties among the other holders of current shares.
shareholders
Statement of shareholders
participating in margin None
trade (if any)
2. Profile of the controlling shareholders
Legal person
Name of controlling Legal Date of Organization
Registered capital Main business
shareholder representa establis code
44
China Fangda Group Co., Ltd. 2012 Annual Report
tive/respo hment
nsible
person
Industrial
investment,
developing of
Shenzhen Banglin electronic
Technologies Chen June 7, products,
72984005-5 RMB 30 million
Development Co., Jinwu 2001 technical
Ltd. consulting,
domestic
commerce,
material trading
Operation
performance,
The 2012 annual report of Banglin Technologies has not been audited and
financial condition,
the company will continue to engage in the investment business.
cash flow and future
development strategy
Stock ownership of
other domestic and
overseas listed
company controlled The controlling shareholders hold no share in other listed companies.
or whose shares are
held by controlling
shareholders
Changes in controlling shareholders in the reporting period
□ Applicable √ Inapplicable
3. Substantial controller of the Company
Natural person
Right of residence in another country or
Name of substantial controller Nationality
region
Xiong Jianming Chinese Yes
Occupation and position over the
Chair of the Board and president of the Company
last five years
Profiles of domestic and overseas
The controller held no share in other listed companies in the last
listed companies in which the
ten years.
controller held shares
Change in the substantial controller in the report period
□ Applicable √ Inapplicable
45
China Fangda Group Co., Ltd. 2012 Annual Report
7. Chart of the controlling relationship
Controlling over the Company by the substantial controller through trust or other asset management
□ Applicable √ Inapplicable
4. Other legal person shareholders with over 10% of total shares
None
4. Statement on share increasing proposal raised by the shareholders or their action-in-concert
parties in the reporting period
Disclosure
Initial date of the
Name of Actual Actual
Number of Proportion of disclosure share
shareholder/ number of proportion of
shares to be shares to be date of the increase plan
action-in-co shares shares
increased increased share implementati
ncert parties increased increased
increase plan on
completion
Shenzhen
Banglin
March 21,
Technologies 35,000,000 4.62% 0 0%
2012
Development
Co., Ltd.
Shengjiu
March 6,
Investment 8,892,747 1.17%
2012
Ltd.
Other matters
On March 20, 2012, the 8th meeting of the 6th term of the Board approved the proposal to issue
no more than 35 million non-public A-shares to the first majority shareholder Banglin Technologies,
46
China Fangda Group Co., Ltd. 2012 Annual Report
which subscribed for the issue with RMB cash. The proposal was not approved at the meeting and
issuance was not implemented.
VII Particulars about the Directors, Supervisors, Senior Management and Employees
1. Changes in shareholding of Directors, Supervisors and Senior Management
Number
Number
of Decreas
Increase of
shares ed
Starting End d shares shares
Job held at shares
Name Position Sex Age date of date of in this held at
status beginni in this
the term the term period end of
ng of period
(share) the
the (share)
period
period
Chairm
Xiong
an, In Mar. 25, Mar. 25,
Jianmin M 55 102,971 0 0 102,971
presiden office 2011 2014
g
t
Director
Wang
, vice In Mar. 25, Mar. 25,
Shengg M 55 36,286 0 0 36,286
presiden office 2011 2014
uo
t
Xiong In Mar. 25, Mar. 25,
Director M 44
Jianwei office 2011 2014
Director
,
Zhou In Mar. 25, Mar. 25,
secretar M 50
Zhigang office 2011 2014
y of the
Board
Indepen
Guo In Mar. 25, Mar. 25,
dent M 51
Jinlong office 2011 2014
director
Shao Indepen
In Mar. 25, Mar. 25,
Hanqin dent F 74
office 2011 2014
g director
Indepen
Huang In Mar. 25, Mar. 25,
dent M 50
Yaying office 2011 2014
director
47
China Fangda Group Co., Ltd. 2012 Annual Report
Supervi
sory
Commit
Zhen In Mar. 25, Mar. 25,
tee F 53
Hua office 2011 2014
meeting
convene
r
Yu Supervi In Mar. 25, Mar. 25,
M 53
Guoan sor office 2011 2014
Cao Supervi In Mar. 25, Mar. 25,
F 34
Naisi sor office 2011 2014
Yang Vice
In Mar. 25, Mar. 25,
Xioazh presiden M 59
office 2011 2014
uan t
Vice
Lin presiden In Mar. 25, Mar. 25,
M 35
Kebin t and office 2011 2014
CFO
Vice
Wei In Jul. 29, Mar. 25,
presiden M 44
Yuexing office 2011 2014
t
Total -- -- -- -- -- -- 139,257 0 0 139,257
2. Office Description
Working experiences of current directors, supervisors and senior management 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, deputy to the 10th People’s Congress of Guangdong Province, deputy to
the 2nd and 3rd People’s Congress of Shenzhen City. He’s now assuming Chairman of the Board and
President of the Company, member of the 5th Shenzhen Committee of CPPCC, standing member of
the 5th Nanshan Committee of CPPCC, founder and president of the Shenzhen Semiconductor
Lighting Association, vice president of the Federation of Shenzhen Industries, vice president of the
SGCC, president of the Nanshan Industry and Commerce Association 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 a Director and Vice
President of the Company.
Mr. Xiong Jianwei: MBA. He is now a Director of the Company.
Mr. Zhou Zhigang, bachelor’s degree. He is currently a Director, Secretary of Board, and head
48
China Fangda Group Co., Ltd. 2012 Annual Report
of the 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 honorary vice chief of China
Production Association, 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 associate instructor and lecturer
of Shanxi University of Finance & Economics, audit assistant of the Shenzhen Shekou Zhonghua
Certified Accountants, a 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., Shenzhen Hanyu
Medical Joint Stock Limited, partner of ShineWing Certified Public Account, member of the 5 th
Shenzhen Committee of CPPCC, member of the 5th council of the Chinese Institute of CPA and an
independent director of the Company.
Huang Yaying, professor of law, certified lawyer and senior visiting scholar of UNSW. Senior
visiting scholar of the Law School of UNSW. At present he’s the dean of Law School of Shenzhen
University, standing commissioner of Shenzhen People’s Congress, member of the Shenzhen
Commission of Legal Affairs, member of the Shenzhen Legal Affair Office Expert Consultation
Committee, committee member and certified arbitrator of Shenzhen Court of International
Arbitration and South China International Economic and Trade Arbitration Commission, member
and arbitrator of the Shenzhen Arbitration Commission, arbitrator of China International Trade
Arbitration Committee, Xi’an Arbitration Committee, Hainan Arbitration Committee and Huizhou
Arbitration Committee; standing member of the China Academy of Arbitration Law and the
Chinese Society of Private International Law, lawyer of the Guangdong Guoxin Law Firm and an
independent director of the Company. He is the standing director of the China Academy of
Arbitration Law and Institute of China Private International Law, lawyer of the Guangdong Guoxin
Law Firm and independent director of the Company.
Ms. Zhen Hua: Bachelor degree. She is now Supervisory Committee meeting convener,
Chairwoman of Trade Union, and Director of President Office of the Company.
Mr. Yu Guoan, doctor degree, once associate professor of North-east University, chief
technical officer, head of IT department. He is now a supervisor of the Company.
Ms. Cao Naisi, bachelor degree, once head of auditing department, deputy chief of HR
department, general manager of the Beijing Branch of the Shenzhen Fangda Decoration, at present
she’s a 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 and chief of the Enterprise Management Department of the Company.
Mr. Lin Kebin, bachelor’s degree. At present he’s the Vice President and CFO of the
Company.
Mr. Wei Yuexing, bachelor degree, engineer. Once he was chief engineer of Jiangxi Auto
49
China Fangda Group Co., Ltd. 2012 Annual Report
Switch Factory. Currently he’s the vice president of the Company, and general manager of Fangda
Decoration, a fully-owned subsidiary of the Company.
Offices held at shareholders entities
√ Applicable □ Inapplicable
Whether any
Starting remuneration is
End date of
Name Shareholder entity Office date of the paid at the
the term
term shareholder
entity
Xiong Oct. 6,
Shengjiu Investment Ltd. Chairman No
Jianming 2011
Wang Shenzhen Shilihe Investment Oct. 19,
Chairman No
Shengguo Co., Ltd. 2006
Wang Shenzhen Shilihe Investment General Sep. 29,
No
Shengguo Co., Ltd. manager 2003
Xiong Shenzhen Shilihe Investment Jun. 12,
Director No
Jianwei Co., Ltd. 2001
Zhou Shenzhen Shilihe Investment Oct. 19,
Director No
Zhigang Co., Ltd. 2006
Shenzhen Shilihe Investment Superviso Oct. 19,
Zhen Hua No
Co., Ltd. r 2006
Office
None
description
Offices held at other entities
√ Applicable □ Inapplicable
Whether any
Starting remuneration is
End date of
Name Entity name Office date of the paid at the
the term
term shareholder
entity
Guo ShineWing Certified Public
Partner Dec. 2005 Yes
Jinlong Account
Guo Shenzhen Tuori New Energy Independe
Feb. 2013 Feb. 2016 Yes
Jinlong Co., Ltd. nt director
Guo Rainbow Shopping Mall Co., Independe
Jul. 2010 Jul. 2013 Yes
Jinlong Ltd. nt director
Guo Shenzhen Zhonghang Health Independe
Aug. 2010 Aug. 2013 Yes
Jinlong Club Co., Ltd. nt director
Guo Shenzhen Hanyu Medical Joint Independe Oct. 2012 Oct. 2015 Yes
50
China Fangda Group Co., Ltd. 2012 Annual Report
Jinlong Stock Limited nt director
Shao Shenzhen Zhonghang Health Independe
Aug. 2010 Aug. 2013 Yes
Hanqing Club Co., Ltd. nt director
Shao Independe
Xingli (HK) Co., Ltd. May. 2009 Yes
Hanqing nt director
Huang Law School of Shenzhen
Dean Jul. 2009 Yes
Yaying University
Huang
Guangdong Guoxin Law Firm Lawyer May. 2009 No
Yaying
Office
The above-mentioned three are independent directors of the Company.
description
3. Annual Remunerations of the Directors, Supervisors and Senior Executives
Decision making procedures, basis and actual payment of remunerations of the Directors,
Supervisors and Senior Executives
1. Remuneration schemes for directors and supervisors are proposed by the Remuneration and
Assessment Committee of the Board, and implemented upon approval of the Board and the
Shareholders’ Meetings; the remuneration schemes for executives are approved and implemented
by the Board.
Remuneration for directors and supervisors are decided by the shareholders’ meeting.
Remunerations for executives are composed of wages and performance bonus as decided by the
Board.
Payment on monthly basis
Remunerations of the Directors, Supervisors and Senior Executives of the Company During the
reporting period
Unpaid
Total
remunerati
Total remunerati
on during
Name Position Sex Age Job status remunerati on from the
the
on shareholdin
reporting
g party
period
Xiong Chairman, 1,190,590.8
M 55 In office 0.00 843,054.89
Jianming president 9
Director,
Wang
vice M 55 In office 616,303.89 0.00 461,533.18
Shengguo
president
Xiong
Director M 44 In office 575,110.52 0.00 402,905.01
Jianwei
Zhou Director,
M 50 In office 442,541.11 0.00 332,944.66
Zhigang secretary of
51
China Fangda Group Co., Ltd. 2012 Annual Report
the Board
Guo Independen
M 51 In office 80,000.00 0.00 67,199.36
Jinlong t director
Shao Independen
F 74 In office 80,000.00 0.00 67,199.36
Hanqing t director
Huang Independen
M 50 In office 80,000.00 0.00 67,199.36
Yaying t director
Supervisor
y
Zhen Hua Committee F 53 In office 413,021.11 0.00 310,455.23
meeting
convener
Yu Guoan Supervisor M 53 In office 30,000.00 0.00 25,920.00
Cao Naisi Supervisor F 34 In office 356,217.00 0.00 281,399.50
Yang Vice
M 59 In office 419,689.04 0.00 315,658.68
Xioazhuan president
Vice
Lin Kebin president M 35 In office 465,975.61 0.00 352,162.24
and CFO
Wei Vice
M 44 In office 550,090.52 0.00 398,092.05
Yuexing president
5,299,539.6 3,925,723.5
Total -- -- -- -- 0.00
9 2
Equity incentive programs provided for the Directors, Supervisors and Senior Executives of the
Company during the reporting period
□ Applicable √ Inapplicable
4. Resigned and Dismissed Directors, Supervisors and Senior Executives
Inapplicable
5. Changes in Key Technical Team or Personnel during the Reporting Period (excluding directors,
supervisors and senior executives)
No change
6. Employees
Employees (by December 31, 2012)
Fangda Group Fangda Decoration (main Other Total
(parent) subsidiary) subsidiaries
52
China Fangda Group Co., Ltd. 2012 Annual Report
Number of employees in 64 1,131 1,685 2880
position
Retired employees on the 0 0 0 0
Company’s expense
Categories of professions Fangda Group Fangda Decoration (main Other Total
(parent) subsidiary) subsidiaries
Production 0 869 1,005 1874
Sales & Marketing 0 14 83 97
Technicians 0 114 135 249
Finance & Accounting 9 13 30 52
Executive 55 121 432 608
Categories of education Fangda Group Fangda Decoration (main Other Total
(parent) subsidiary) subsidiaries
High school or below 23 744 1,088 1855
College diploma 6 113 252 371
Bachelor 32 264 337 633
Master’s degree 2 10 8 20
Doctor’s degree 1 0 0 1
53
China Fangda Group Co., Ltd. 2012 Annual Report
Staff remuneration policy: The Company’s staff remuneration comprises post wage, performance
wage, allowance and annual bonus. The Company has set up an economic responsibility assessment
system according to the annual operation target and responsibility indicators for all departments.
The performance wage is determined by the economic indicators, management indicators,
optimization indicators and internal control. The annual bonus is determined by the Company's
annual profit and fulfillment of targets set for various departments. The staff remuneration and
welfare will be adjusted according to the Company’s business operation and changes in the local
standard of living and price index.
Staff training program: The Company has established the staff training and re-education system and
has implemented training programs relating to the Company’s business. To reach the training goal,
the Company will organization examinations and the HR department will record the results of such
examinations as basis for annual assessment and adjustment in positions.
54
China Fangda Group Co., Ltd. 2012 Annual Report
VIII Corporation Governance
1. Overview
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:
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 reporting period, the Company has revised the Information Insider Registration Scheme,
Articles of Association and has formulated The Shareholders’ Rewarding Plan 2012-2014, and
Regulations for Information Disclosure Relating to Inter-bank Bond Market Debt Financing Tool of
Fangda Group Co., Ltd. Revising of these regulations may provide stronger support to standard
operation of the Company.
By the end of the reporting period, the corporate governance complies with the Chinese laws
and requirements regarding corporate governance of listed companies issued by CSRC.
Incompliance with the Company Law and related requirements of CSRC
□ Yes √ No
Implementation of corporate governance activities and establishment and implementation of
insider registration and management system
The Company has revised the “Information Insider Registration Scheme” according to the
requirement of CSRC in February 2012. The revised Information Insider Registration Scheme is
published on www.cninfo.com.cn. No situation was found in the report period that any of the
insiders had been trading the Company’s shares taking advantages of the material information they
55
China Fangda Group Co., Ltd. 2012 Annual Report
could get access to, neither informed by the supervisory authorities regarding inspection or
correction notice.
2. Annual and extraordinary shareholder meetings held during the report period
1. Annual shareholder meeting during the report period
Index for
Date of
Meeting Date Proposal Resolution information
disclosure
disclosure
(1) Reviewing
The Board of
Directors’ Work
Report 2011;
(2) reviewing
Supervisory
Committee’s
Annual Report
The
2011; (3)
announcement
reviewing
of The
Financial
Resolutions of
Settlement
Shareholders’
Report 2011;
Annual
(4) reviewing
Meeting 2011
the proposal of
was published
dividend
2011 Annual All the on China
distribution and
Shareholder May 10, 2012 proposals are May 11, 2012 Securities
capitalization
Meeting approved Journal,
of common
Shanghai
reserves for
Securities
year 2011; (5)
Daily,
reviewing the
Securities
Annual Report
Times, HKCD
2011 and the
and
Summary; (6)
www.cninfo.co
reviewing the
m.cn
proposal about
applying for
integrated bank
credit, and
providing of
guarantee for
the fully-owned
subsidiaries;
56
China Fangda Group Co., Ltd. 2012 Annual Report
(Special
resolution); (7)
reviewing the
proposal on
revising the
Articles of
Association;
(Special
resolution); (8)
listening the
work reports of
the
Independent
Directors
2. Extraordinary shareholder meetings during the report period
Index for
Date of
Meeting Date Proposal Resolution information
disclosure
disclosure
(1) Proposal of
Revising the
Articles of
Association; The
(2) Proposal of announcement
Revising the of 1st
Working Rules Provisional
of the Board; Shareholders’
(3) Proposal on Meeting 2012
External was published
Investment; (4) on China
1st Provisional All the
Proposal on Securities
Shareholders’ March 9, 2012 proposals are March 10, 2012
Applying for Journal,
Meeting 2012 approved
Loans from the Shanghai
Banks to Securities
Support Daily,
Working Securities
Capital; (5) Times, HKCD
Proposal to and
Provide www.cninfo.co
Guarantees for m.cn.
the Bank Loans
for the
Fully-owned
57
China Fangda Group Co., Ltd. 2012 Annual Report
Subsidiaries;
(6) Proposal to
Adjust the
Amount of
Investment in
Energy-saving
Curtain Wall
and
Photo-Electric
Curtain Wall
Expanding and
PSD
Expanding
Projects
(1) The
proposal to
apply for
issuing of
A-shares
privately; (2)
The proposal of The
the plan to announcement
issue A-shares of 2nd
privately in Provisional
2012; (3) The Shareholders’
proposal of the Meeting 2012
preplan to issue was published
A-shares on China
2nd Provisional Proposal (2),
privately in Securities
Shareholders’ April 5, 2012 (3), (6) and (7) April 6, 2012
year 2012; (4) Journal,
Meeting 2012 denied
The proposal of Shanghai
the feasibility Securities
report on Daily,
application of Securities
the proceeds Times, HKCD
from issuing of and
A-shares www.cninfo.co
privately in m.cn.
year 2012; (5)
The proposal
on requesting
the
shareholders’
meeting to
58
China Fangda Group Co., Ltd. 2012 Annual Report
authorize the
Board to
practice the
private issuing
of A-shares
with full
authority; (6)
The proposal to
enter into the
conditional
share
subscribing
contract with
Shenzhen
Banglin
Technology
Development
Co., Ltd.; (7)
The proposal
about
subscribing of
shares privately
by the largest
shareholder
that is a related
transaction.
(1) Proposal of The
Revising the announcement
Plan of of 3rd
Providing Provisional
Guarantees to Shareholders’
Fully-Owned Meeting 2012
Subsidiaries of was published
the Company; on China
3rd Provisional All the
(2) Proposal of Securities
Shareholders’ July 20, 2012 proposals are July 21, 2012
Reviewing The Journal,
Meeting 2012 approved
Shareholders’ Shanghai
Rewarding Securities
Plan Daily,
2012-2014; (3) Securities
Proposal of Times, HKCD
Revising the and
Articles of www.cninfo.co
Association; m.cn.
59
China Fangda Group Co., Ltd. 2012 Annual Report
(4) Proposal of
Providing
Guarantee to
the
Fully-Owned
Subsidiaries of
the Company.
The
announcement
of 4th
Provisional
Shareholders’
Meeting 2012
was published
Proposal on on China
4th Provisional
December 21, engaging of the Proposal December 22, Securities
Shareholders’
2012 CPA for year approved 2012 Journal,
Meeting 2012
2012 Shanghai
Securities
Daily,
Securities
Times, HKCD
and
www.cninfo.co
m.cn.
3. Performance of independent directors during the report period
1. Independent directors’ presenting of board meetings and shareholders’ meetings in the report
period
Independent directors’ presenting of board meetings
Time of
Absent for
Name of board
Presented Presented by Presented by two
independent meetings Absent
personally telecom proxy consecutive
director should have
meetings
attended
Shao Hanqing 11 5 5 1 0 No
Guo Jinlong 11 5 5 1 0 No
Huang Yaying 11 4 5 2 0 No
Time of presence by
7
independent directors at
60
China Fangda Group Co., Ltd. 2012 Annual Report
shareholders’ meetings
Statement for absence for two consecutive board meetings
None
2. Objection raised by independent directors
Any objection raised by independent directors against the Company’s related issues
□ Yes √ No
3. Other statement for performance of independent directors
Adoption of suggestion proposed by independent directors
√ Yes □ No
Statement for suggestion adopted or not by the Company
(1) During the report period, the Company’s independent directors have paid attention to the
Company’s operation and performed their duties independent in accordance with applicable laws,
regulations and Articles of Association of the Company and have proposed many professional
suggestions for improving the Company’s system and routine operation decision-making. During
the report period, independent directors have made independent and just opinion on issues that need
independent directors’ opinions, playing positive roles in improving the Company’s supervisory
system and protecting the rights and interests of the Company and shareholders.
(2) Independent opinions issued in 2012
Name Time of independent Issue involved Type of Disclosure
opinion independen of the
t opinion independent
opinion
Shao February 21, 2012 Using part of the idle financing proceeds Agreed Yes
Hanqing to supplement working capital and
Guo adjustment in use of the raised fund in
Jinlong projects
Huang March 20, 2012 Related transaction
Yaying April 18, 2012 Use of the Company’s fund by controlling
shareholder and other affiliates and
guarantee made by the Company
Internal control self evaluation report
No cash dividend proposal was raised
though the Company made profit in 2012
and the reserve capitalizing pre-plan
Remuneration of directors and senior
executives in 2011
July 4, 2012 Revision of provisions relating to profit
distribution in the Articles of Association
61
China Fangda Group Co., Ltd. 2012 Annual Report
The Shareholders’ Rewarding Plan
2012-2014
July 26, 2012 Use of fund and external guarantees made
controlling shareholder and other
affiliates in the first half of 2012
August 17, 2012 Using another part of the idle financing
proceeds to supplement working capital
October 26, 2012 Engaging the auditor for 2012
4. Performance of specific committees under the Board
(1) Performance of the Development Strategy Committee
During the report period, the Development Strategy Committee of the Company has performed
its duties in accordance with the Working Regulations for Development Strategy Committee and
played its role in the decision-making process of the Company. Two meetings were convened and
details are disclosed as follows:
1. On April 18, 2012, the 2nd meeting of the Development Strategy Committee of the 6th term of
the Board was held to review: (1) the Company’s production and operation in 2011; (2) the
production and operation plan for 2012; (3) the Company’s development strategic plan between
2012 and 2016. The meeting mainly studied and discussed the production and operation in 2012
and the development strategy for 2012.
2. On July 26, 2012, the 3rd meeting of the Development Strategy Committee of the 6th term of
the Board was held to view the Company’s production and operation in the first half of 2012 and
studied the fulfillment of the business plan in the first half of the year and places to be improved in
the second half.
(2) Performance of the Auditing Committee
During the report period, five Auditing Committee meetings are held to review issues
including the arrangement of audit, regular financial reports, engaging the CFA, general regulations
for internal control and use of the fund raised. Details of the meetings are disclosed as follows:
1. On April 13, 2012, the 5th meeting of the Auditing Committee of the 6th term of the Board
was held to review the financial statements with the initial opinion issued by the CFA for 2011 and
approve the auditor report issued by the CFA. After the CFA issued to final auditor’s opinion, the
Auditing Committee submitted the resolution on the annual financial statements to the Board and
issued the summary report on the auditing of the CFA for this year.
2. On April 18, 2012, the 6th meeting of the Auditing Committee of the 6th term of the Board
was held to review and approve: (1) the audited financial statements for 2011; (2) unaudited 2012
1st quarter financial statements; (3) 2011 financial performance; (4) the internal audit of the
Company in 2011; (5) the internal audit plan of the Company in 2012; (6) the internal control
self-evaluation in 2011; (7) investigation report for the use of raised fund in the fourth quarter of
2011; (8) the investigation report for the use of raised fund in the first quarter of 2012.
3. On July 26, 2012, the 7th meeting of the Auditing Committee of the 6th term of the Board
was held to review and approve: (1) unaudited 2012 semi-year financial statements; (2) the 2012
semi-year financial performance; (3) the internal audit report for the first half of 2012; (4)
investigation report for the use of raised fund in the second quarter of 2012.
62
China Fangda Group Co., Ltd. 2012 Annual Report
4. On October 15, 2012, the 8th meeting of the Auditing Committee of the 6th term of the Board
on which the proposal of engaging the CFA for 2012 was approved.
5. On October 29, 2012, the 9th meeting of the Auditing Committee of the 6th term of the Board
was held, on which (1) the 2012 third quarter financial statements; (2) investigation report for the
use of raised fund in the third quarter of 2012 were reviewed.
(3) Performance of the Remuneration and Assessment Committee
During the report period, the Remuneration and Assessment Committee issued the Working
Regulations for Remuneration and Assessment Committee. On the 1st meeting of the Remuneration
and Assessment Committee of the 6th term of the Board held on April 18, 2012, the committee
reviewed the main financial indicators and business performance in 2011 and reviewed performance
of duties by the Company’s directors and senior executives. The committee believes that the
directors and senior executives have worked diligently and fulfilled the business target and other
tasks in 2011. The remunerations for directors, supervisors and senior executives disclosed in the
2011 annual report comply with the Company’s remuneration policy.
5. Performance of Supervisory Committee
Risks for the Company discovered by the Supervisory Committee
□ Yes √ No
No disagreement with supervisory issues by the Supervisory Committee during the report period.
6. Independence of the Company from the controlling shareholder in aspects of businesses,
personnel, assets, organizations, and accounting
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.
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
63
China Fangda Group Co., Ltd. 2012 Annual Report
account, and exercise its liability of taxation independently.
7. Competition
None
8. Assessment and motivation of senior executives
The Company has implemented a remuneration system that combines post wage and performance
bonus. The wages and bonus are determined by on the assessment of senior executives’ innovation
capabilities, general quality, performance, fulfillment of profit and payment collection targets in the
Implementation Regulations for 2012 Supervisory and Management Department Target
Management and Assessment and Implementation Regulations for 2012 Subordinate Unit
Assessment.
64
China Fangda Group Co., Ltd. 2012 Annual Report
IX Internal Control
1. Internal Control Construction
In 2012, the Company continued to improve internal control regulations as planned based on
the internal control improvement plan and quarterly work targets. Around the risk control, the
program has focused on internal environment, risk assessment, control activities, information and
communication and internal supervision, substantially improving the Company’s internal control
system and revising the internal control manual.
1. Internal environment: According to changes in business of the group and subsidiaries, the
corporate governance team has streamlined the organizational structure of the group; by reviewing
the existing rules and implementation of these rules, the group’s rules and regulations were
streamlined and updated on the OA platform, realizing the IT management of corporate rules and
regulations.
2. Risk assessment: According to the Company’s business development and changes in the internal
and external environment, the corporate governance team has completed the risk assessment and
analysis on the corporate and business level through questionnaire and interviews with the
assistance of the management. The program has discovered major risks face the group in 2012 and
updated the list of risks in the internal control manual.
3. Controlling activities: The Corporate governance team and Information Management Department
have communicated with the management and business department of each company under the
group to fully review and modify business processes and updated them on the OA system.
According to the external and internal control requirements, defects were rectified and processes
were improved. The controlling activity regulations were added according to new companies and
businesses and the internal control manual was modified.
4. Information and communication: The Information Management Department was separated from
Technical Management Department. The Information Management Department’s duties were
regulated, paving the way for IT construction; the IT management and communication of corporate
rules and regulations were realized; the supplier and customer sharing database was established;
specific personnel were send to participate in internal control training and shared experience within
the company; the website was updated, optimizing the communication channels between the
company and its investors, customers and suppliers.
5. Internal supervision: The Company continued to adopt the 3-level risk prevention and
supervisory system in 2012. In addition, under the lead and support of the Auditing Committee, the
Audit and Supervision Department has strengthened the management on internal auditing and
reviewed main risky links in routing operation and the improvement and implementation of the
groups’ internal control system, authentication and integrity of financial information and efficiency
and effects of operating activities. Any problems discovered were sent to related departments to
prevent and reduce risks, supporting the implementation of the internal control system and helping
prevent internal control, financial and legal risks.
65
China Fangda Group Co., Ltd. 2012 Annual Report
2. Board’s statement on internal control responsibility
The Board acknowledges its responsibility of establishing, improving and performing internal
control and has fulfilled its guide and supervisory responsibility for the establishment and
implementation of internal control and guarantee the authentication of financial statements and
safety and integrity of assets.
3. Basis for establishment of the internal financial statement control
The internal financial statement control system is established based on the Accounting Law,
Accounting Criteria for Enterprises, Implementation Guidelines for Enterprise Internal Control and
related guidelines, Guide for Internal Control of Listed Companies and other regulatory documents
issued by supervisory authorities.
4. Internal control self-evaluation report
Major internal control defects discovered in the report period in the internal control self-evaluation
report
No major defect is found in the report period
Date of disclosure of the
internal control March 23, 2013
self-evaluation report
Source of disclosure of the
internal control www.cninfo.com.cn
self-evaluation report
5. Internal control audit report
√ Applicable □ Inapplicable
Comments in the internal control audit report
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, 2012, and the business
performance and cash flow of year 2012.
Date of disclosure of the
internal control audit March 23, 2013
report
Source of disclosure of the
internal control audit www.cninfo.com.cn
report
Non-standard internal control audit report by the CFA
□ Yes √ No
66
China Fangda Group Co., Ltd. 2012 Annual Report
Consistency between the internal control audit report and self-evaluation report
√ Yes □ No
6. Establishment and implementation of the Retrospective Rules of Material False Information in
Annual Report
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.
67
China Fangda Group Co., Ltd. 2012 Annual Report
X Financial Statements
1. Auditors’ report
Type Standard opinion auditor’s report
Issued on March 21, 2013
Grant Thornton CPA (limited liability
Auditor
partnership)
Report No. 致同审字（2013）第 350ZA0780 号
Auditors’ Report
Auditors’ report
致同审字（2013）第350ZA0780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, 2012 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 2012, as well as the Notes to the Financial
Statements.
1. 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 includes: (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.
2. 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
68
China Fangda Group Co., Ltd. 2012 Annual Report
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.
3. 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, 2012, and the business
performance and cash flow of year 2012.
Grand Thornton CPA CPA China
(limited liability partnership)
CPA China
Beijing, China March 21, 2013
2. Financial statements
Unit for statements in notes to financial statements: RMB yuan
1. Consolidated Balance Sheet
Prepared by: China Fangda Group Co., Ltd.
In RMB
Items Beginning balance Ending balance
Current asset:
Monetary capital 278,283,968.61 324,780,350.77
Settlement provision
Outgoing call loan
69
China Fangda Group Co., Ltd. 2012 Annual Report
Transactional financial
assets
Notes receivable 7,638,780.88 6,303,353.88
Account receivable 774,890,805.30 664,333,498.11
Prepayment 22,006,159.22 25,444,369.81
Insurance receivable
Reinsurance receivable
Provisions of
Reinsurance contracts
receivable
Interest receivable 72,833.33 201,961.11
Dividend receivable
Other receivables 57,339,556.28 53,412,523.94
Repurchasing of
financial assets
Inventory 269,120,191.36 254,419,907.08
Non-current assets due
in 1 year
Other current assets
Total of current assets 1,409,352,294.98 1,328,895,964.70
Non-current assets:
Disburse of consigned
loans
Sellable financial assets 2,198,000.00
Investment held until
mature
Long-term receivable
Long-term share equity
investment
Investment real estate 258,405,762.09 277,705,949.35
Fixed assets 341,555,810.21 316,775,398.58
Construction in process 175,138,694.28 81,799,896.43
Engineering materials
Disposal of fixed assets
Productive biological
assets
70
China Fangda Group Co., Ltd. 2012 Annual Report
Gas & petrol
Intangible assets 102,380,382.21 110,599,955.27
R&D expense 67,700.00 914,683.63
Goodwill 8,197,817.29
Long-term amortizable
4,710,860.65 2,600,195.30
expenses
Deferred income tax
36,191,385.09 33,637,737.59
assets
Other non-current assets
Total of non-current assets 918,450,594.53 834,429,633.44
Total of assets 2,327,802,889.51 2,163,325,598.14
Current liabilities
Short-term loans 181,970,000.00 387,000,000.00
Loans from Central
Bank
Deposit received and
held for others
Call loan received
Transactional financial
liabilities
Notes payable 160,779,777.03 39,058,058.47
Account payable 411,846,031.72 324,340,008.15
Prepayment received 77,741,903.02 124,950,664.78
Selling of repurchased
financial assets
Fees and commissions
payable
Employees’ wage
23,945,272.55 20,432,966.02
payable
Taxes payable 33,686,577.98 41,002,265.87
Interest payable 1,954,557.27 780,979.73
Dividend payable
Other payables 41,340,056.86 36,783,207.38
Reinsurance fee payable
Insurance contract
provision
71
China Fangda Group Co., Ltd. 2012 Annual Report
Entrusted trading of
securities
Entrusted selling of
securities
Non-current liabilities
due in 1 year
Other current liabilities 200,000,000.00
Total of current liabilities 1,133,264,176.43 974,348,150.40
Non-current liabilities:
Long-term loans
Bond payable
Long-term payable 7,700.00 14,700.00
Special payables
Anticipated liabilities 288,000.00
Deferred income tax
36,210,286.40 32,597,637.16
liabilities
Other non-current
4,020,000.00
liabilities
Total of non-current liabilities 36,217,986.40 36,920,337.16
Total liabilities 1,169,482,162.83 1,011,268,487.56
Owners’ equity (or
shareholders’ equity)
Capital paid in (or share
756,909,905.00 756,909,905.00
capital)
Capital reserves 80,299,867.64 80,479,493.92
Less: Shares in stock
Special reserves
Surplus reserves 30,494,542.94 24,676,077.16
Common risk provisions
Retained profit 230,907,879.99 211,777,968.57
Difference caused by
translation of foreign
currency statements
Total of owner’s equity
1,098,612,195.57 1,073,843,444.65
belong to the parent company
Minority interests 59,708,531.11 78,213,665.93
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China Fangda Group Co., Ltd. 2012 Annual Report
Total of owners’ equity (or
1,158,320,726.68 1,152,057,110.58
shareholders’ equity)
Total of liability and owners’
equity (or shareholders’ 2,327,802,889.51 2,163,325,598.14
equity)
Legal representative: Xiong Jianming CFO: Lin Kebing Accounting Manager: Chen Yonggang
2. Balance Sheet of the Parent Company
Prepared by: China Fangda Group Co., Ltd.
In RMB
Items Beginning balance Ending balance
Current assets:
Monetary capital 25,790,604.84 24,587,261.80
Transactional financial
assets
Notes receivable
Account receivable 5,157,141.38 5,603,561.80
Prepayment 20,271.85 122,369.00
Interest receivable
Dividend receivable 39,356,000.00 57,338,200.00
Other receivables 512,298,790.52 265,169,612.63
Inventory
Non-current asset due in
1 year
Other current assets
Total of current assets 582,622,808.59 352,821,005.23
Non-current assets:
Sellable financial assets 2,198,000.00
Investment held until
mature
Long-term receivable
Long-term share equity
669,733,745.58 659,733,745.58
investment
Investment real estate 254,766,256.33 271,841,967.35
Fixed assets 87,649,932.55 57,299,884.44
73
China Fangda Group Co., Ltd. 2012 Annual Report
Construction in process 1,701,315.00 298,019.24
Engineering materials
Disposal of fixed assets
Productive biological
assets
Gas & petrol
Intangible assets 9,352,376.54 9,910,673.85
R&D expense
Goodwill
Long-term amortizable
75,471.70
expenses
Deferred income tax
12,333,214.12 14,415,297.03
assets
Other non-current assets
Total of non-current assets 1,035,612,311.82 1,015,697,587.49
Total of assets 1,618,235,120.41 1,368,518,592.72
Current liabilities
Short-term loans 180,000,000.00 210,000,000.00
Transactional financial
liabilities
Notes payable
Account payable 1,849,090.36 1,851,490.36
Prepayment received 753,108.70 693,045.60
Employees’ wage
1,479,449.88 1,251,357.38
payable
Taxes payable 826,456.83 655,031.17
Interest payable 1,954,557.27 441,980.00
Dividend payable
Other payables 83,515,779.52 66,697,963.87
Non-current liabilities
due in 1 year
Other current liabilities 200,000,000.00
Total of current liabilities 470,378,442.56 281,590,868.38
Non-current liabilities:
Long-term loans
Bond payable
74
China Fangda Group Co., Ltd. 2012 Annual Report
Long-term payable
Special payables
Anticipated liabilities
Deferred income tax
36,210,286.40 32,186,364.40
liabilities
Other non-current
liabilities
Total of non-current liabilities 36,210,286.40 32,186,364.40
Total liabilities 506,588,728.96 313,777,232.78
Owners’ equity (or
shareholders’ equity)
Capital paid in (or share
756,909,905.00 756,909,905.00
capital)
Capital reserves 39,799,212.26 41,078,838.54
Less: Shares in stock
Special reserves
Surplus reserves 30,494,542.94 24,676,077.16
Common risk provisions
Retained profit 284,442,731.25 232,076,539.24
Difference caused by
translation of foreign
currency statements
Total of owners’ equity (or
1,111,646,391.45 1,054,741,359.94
shareholders’ equity)
Total of liability and owners’
equity (or shareholders’ 1,618,235,120.41 1,368,518,592.72
equity)
Legal representative: Xiong Jianming CFO: Lin Kebing Accounting Manager: Chen Yonggang
3. Consolidated Income Statement
Prepared by: China Fangda Group Co., Ltd.
In RMB
Items Amount of the Current Term Amount of the Previous Term
1. Total revenue 1,397,901,424.59 1,348,776,366.53
Incl. Business income 1,397,901,424.59 1,348,776,366.53
Interest income
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China Fangda Group Co., Ltd. 2012 Annual Report
Insurance fee
earned
Fee and
commission received
2. Total business cost 1,402,248,272.24 1,288,791,101.81
Incl. Business cost 1,145,066,535.43 1,087,992,839.87
Interest expense
Fee and
commission paid
Insurance
discharge payment
Net claim
amount paid
Net insurance
policy reserves provided
Insurance policy
dividend paid
Reinsurance
expenses
Business tax and
23,902,902.35 26,747,672.42
surcharge
Sales expense 35,114,854.91 29,317,746.35
Administrative
122,677,890.24 105,614,972.87
expense
Financial
24,771,976.76 19,752,495.44
expenses
Asset impairment
50,714,112.55 19,365,374.86
loss
Plus: gains from change
12,290,834.22 10,815,131.20
of fair value (“-“ for loss)
Investment gains
3,448,207.99 99,342.47
(“-“ for loss)
Incl. Investment
gains from affiliates and joint
ventures
Exchange gains
(“-“ for loss)
3. Operational profit (“-“ for 11,392,194.56 70,899,738.39
76
China Fangda Group Co., Ltd. 2012 Annual Report
loss)
Plus: non-operational
11,817,267.06 11,383,948.30
income
Less: non-operational
3,662,524.43 3,123,596.57
expenditure
Incl. Loss from
220,018.04 2,343,990.35
disposal of non-current assets
4. Gross profit (“-“ for loss) 19,546,937.19 79,160,090.12
Less: Income tax
13,103,694.81 19,779,966.86
expenses
5. Net profit (“-“ for net loss) 6,443,242.38 59,380,123.26
Including: Net profit
realized by the entity taken 0.00
over before the takeover
Net profit attributable to
24,948,377.20 65,503,925.58
the owners of parent company
Minor shareholders’
-18,505,134.82 -6,123,802.32
equity
6. Earnings per share: -- --
(1) Basic earnings per
0.03 0.09
share
(2) Diluted earnings per
0.03 0.09
share
7. Other misc. incomes -179,626.28 -1,651,220.00
8. Total of misc. incomes 6,263,616.10 57,728,903.26
Total of misc. incomes
attributable to the owners of 24,768,750.92 63,852,705.58
the parent company
Total misc gains
attributable to the minor -18,505,134.82 -6,123,802.32
shareholders
Net profit contributed by entities merged under common control in the report period was RMB0.
Legal representative: Xiong Jianming CFO: Lin Kebing Accounting Manager: Chen Yonggang
4. Income Statement of the Parent Company
Prepared by: China Fangda Group Co., Ltd.
In RMB
77
China Fangda Group Co., Ltd. 2012 Annual Report
Items Amount of the Current Term Amount of the Previous Term
1. Turnover 46,185,831.72 44,378,065.25
Less: Operation cost 11,267,937.63 11,314,912.66
Business tax and
3,731,267.21 3,494,969.54
surcharge
Sales expense -15,831.98 609,975.58
Administrative
20,145,309.77 20,079,220.00
expense
Financial expenses 5,685,040.38 4,461,333.17
Asset impairment
326,187.02 427,828.17
loss
Plus: gains from change
13,791,134.22 11,008,729.20
of fair value (“-“ for loss)
Investment gains
43,904,207.99 57,402,644.44
(“-“ for loss)
Incl. Investment
gains from affiliates and joint
ventures
2. Operational profit (“-“ for
62,741,263.90 72,401,199.77
loss)
Plus: non-operational
2,164,511.06 2,063,986.79
income
Less: non-operational
188,570.17 475,666.63
expenditure
Incl. Loss from
61,363.27 233,537.63
disposal of non-current assets
3. Gross profit (“-“ for loss) 64,717,204.79 73,989,519.93
Less: Income tax
6,532,547.00 5,578,528.02
expenses
4. Net profit (“-“ for net loss) 58,184,657.79 68,410,991.91
5. Earnings per share: -- --
(1) Basic earnings per
share
(2) Diluted earnings per
share
6. Other misc. incomes -1,279,626.28 -1,651,220.00
7. Total of misc. incomes 56,905,031.51 66,759,771.91
78
China Fangda Group Co., Ltd. 2012 Annual Report
Legal representative: Xiong Jianming CFO: Lin Kebing Accounting Manager: Chen Yonggang
5. Consolidated Cash Flow Statement
Prepared by: China Fangda Group Co., Ltd.
In RMB
Items Amount of the Current Term Amount of the Previous Term
1. Net cash flow from
business operation
Cash received from sales
of products and providing of 1,282,311,735.70 1,207,779,388.52
services
Net increase of customer
deposits and capital kept for
brother company
Net increase of loans
from central bank
Net increase of
inter-bank loans from other
financial bodies
Cash received against
original insurance contract
Net cash received from
reinsurance business
Net increase of client
deposit and investment
Net increase of trade
financial asset disposal
Cash received as
interest, processing fee, and
commission
Net increase of
inter-bank fund received
Net increase of
repurchasing business
Tax returned 1,234,080.09 2,188,518.65
Other cash received
24,427,611.05 42,758,245.86
from business operation
Sub-total of cash inflow from 1,307,973,426.84 1,252,726,153.03
79
China Fangda Group Co., Ltd. 2012 Annual Report
business activities
Cash paid for purchasing
951,259,916.91 1,045,527,627.48
of merchandise and services
Net increase of client
trade and advance
Net increase of savings
in central bank and brother
company
Cash paid for original
contract claim
Cash paid for interest,
processing fee and
commission
Cash paid for policy
dividend
Cash paid to staffs or
131,600,289.66 115,606,746.78
paid for staffs
Taxes paid 65,938,208.39 59,068,854.01
Other cash paid for
99,912,940.51 89,568,420.61
business activities
Sub-total of cash outflow
1,248,711,355.47 1,309,771,648.88
from business activities
Cash flow generated by
59,262,071.37 -57,045,495.85
business operation, net
2. Cash flow generated by
investment:
Cash received from
1,500,000.00 51,000,000.00
investment recovery
Cash received as
3,448,207.99 99,342.47
investment profit
Net cash retrieved from
disposal of fixed assets,
11,002,219.00 5,948,411.61
intangible assets, and other
long-term assets
Net cash received from
disposal of subsidiaries or
other operational units
Other investment-related
4,022,500.00 29,969,683.50
cash received
80
China Fangda Group Co., Ltd. 2012 Annual Report
Sub-total of cash inflow due
19,972,926.99 87,017,437.58
to investment activities
Cash paid for
construction of fixed assets,
105,572,445.60 95,845,766.81
intangible assets and other
long-term assets
Cash paid as investment 51,000,000.00
Net increase of loan
against pledge
Net cash received from
subsidiaries and other
operational units
Other cash paid for
2,050,000.00 18,550,000.00
investment activities
Subtotal of investment
107,622,445.60 165,395,766.81
activity cash outflows
Cash flow generated by
-87,649,518.61 -78,378,329.23
investment activities, net
3. Cash flow generated by
financing:
Cash received from
investment
Incl. Cash received as
investment from minor
shareholders
Cash received as loans 570,368,873.33 397,000,000.00
Cash received from bond
200,000,000.00
placing
Other financing-related
cash received
Subtotal of cash inflow from
770,368,873.33 397,000,000.00
financing activities
Cash to repay debts 775,500,000.00 407,000,000.00
Cash paid as dividend,
25,336,873.47 23,046,670.20
profit, or interests
Incl. Dividend and profit
paid by subsidiaries to minor
shareholders
Other cash paid for 1,100,000.00 293,344.43
81
China Fangda Group Co., Ltd. 2012 Annual Report
financing activities
Subtotal of cash outflow due
801,936,873.47 430,340,014.63
to financing activities
Net cash flow generated by
-31,568,000.14 -33,340,014.63
financing
4. Influence of exchange rate
alternation on cash and cash -54,188.54 62,133.34
equivalents
5. Net increase of cash and
-60,009,635.92 -168,701,706.37
cash equivalents
Plus: Balance of cash
and cash equivalents at the 300,177,008.78 468,878,715.15
beginning of term
6. Balance of cash and cash
240,167,372.86 300,177,008.78
equivalents at the end of term
Legal representative: Xiong Jianming CFO: Lin Kebing Accounting Manager: Chen Yonggang
6. Cash Flow Statement of the Parent Company
Prepared by: China Fangda Group Co., Ltd.
In RMB
Items Amount of the Current Term Amount of the Previous Term
1. Net cash flow from
business operation
Cash received from sales
of products and providing of 36,847,528.40 40,782,560.14
services
Tax returned
Other cash received
538,398,509.55 460,822,732.71
from business operation
Sub-total of cash inflow from
575,246,037.95 501,605,292.85
business activities
Cash paid for purchasing
12,764,972.21 12,416,456.66
of merchandise and services
Cash paid to staffs or
8,821,194.92 7,361,345.99
paid for staffs
Taxes paid 4,414,910.67 4,030,680.64
Other cash paid for 753,501,483.51 522,851,939.32
82
China Fangda Group Co., Ltd. 2012 Annual Report
business activities
Sub-total of cash outflow
779,502,561.31 546,660,422.61
from business activities
Cash flow generated by
-204,256,523.36 -45,055,129.76
business operation, net
2. Cash flow generated by
investment:
Cash received from
400,000.00 20,000,000.00
investment recovery
Cash received as
61,886,407.99 44,000,944.44
investment profit
Net cash retrieved from
disposal of fixed assets,
536,535.00 8,040.00
intangible 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
62,822,942.99 64,008,984.44
to investment activities
Cash paid for
construction of fixed assets,
4,269,332.69 1,761,027.93
intangible assets and other
long-term assets
Cash paid as investment 10,000,000.00 21,000,000.00
Net cash received from
subsidiaries and other
operational units
Other cash paid for
investment activities
Subtotal of investment
14,269,332.69 22,761,027.93
activity cash outflows
Cash flow generated by
48,553,610.30 41,247,956.51
investment activities, net
3. Cash flow generated by
financing:
Cash received from
83
China Fangda Group Co., Ltd. 2012 Annual Report
investment
Cash received as loans 180,000,000.00 210,000,000.00
Cash received from bond
200,000,000.00
placing
Other financing-related
cash received
Subtotal of cash inflow from
380,000,000.00 210,000,000.00
financing activities
Cash to repay debts 210,000,000.00 200,000,000.00
Cash paid as dividend,
11,993,687.78 11,858,872.50
profit, or interests
Other cash paid for
1,100,000.00 293,344.43
financing activities
Subtotal of cash outflow due
223,093,687.78 212,152,216.93
to financing activities
Net cash flow generated by
156,906,312.22 -2,152,216.93
financing
4. Influence of exchange rate
alternation on cash and cash -56.12 -1,066.93
equivalents
5. Net increase of cash and
1,203,343.04 -5,960,457.11
cash equivalents
Plus: Balance of cash
and cash equivalents at the 24,337,261.80 30,297,718.91
beginning of term
6. Balance of cash and cash
25,540,604.84 24,337,261.80
equivalents at the end of term
Legal representative: Xiong Jianming CFO: Lin Kebing Accounting Manager: Chen Yonggang
7. Statement of Change in Owners’ Equity (Consolidated)
Prepared by: China Fangda Group Co., Ltd.
Amount of the Current Term
In RMB
Amount of the Current Term
Owners’ Equity Attributable to the Parent Company
Minor Total of
Items
Capita Capita Less: Speci Surpl Com Retain Other shareho owners’
l paid l Share al us mon ed s lders’ equity
84
China Fangda Group Co., Ltd. 2012 Annual Report
in (or reserv s in reserv reserv risk profit equity
share es stock es es provis
capita ions
l)
756,9 80,47 24,67 211,7 1,152,0
1. Balance at the end of 78,213,
09,90 9,493. 6,077. 77,96 57,110.5
last year 665.93
5.00 92 16 8.57 8
Plus: Change of
accounting policy
Correcting of
previous errors
Others
2. Balance at the 756,9 80,47 24,67 211,7 1,152,0
78,213,
beginning of current 09,90 9,493. 6,077. 77,96 57,110.5
665.93
year 5.00 92 16 8.57 8
3. Amount of change in 5,818, 19,12
-179,6 -18,505 6,263,6
current term (“-“ for 465.7 9,911.
26.28 ,134.82 16.10
decrease) 8 42
24,94
-18,505 6,443,2
(1) Net profit 8,377.
,134.82 42.38
20
-179,6 -179,62
(2) Other misc. income
26.28 6.28
24,94
-179,6 -18,505 6,263,6
Total of (1) and (2) 8,377.
26.28 ,134.82 16.10
20
(3) Investment or
decreasing of capital by
owners
1. Capital input by
owners
2. Amount of shares
paid and accounted as
owners’ equity
3. Others
5,818, -5,818
(4) Profit allotment 465.7 ,465.7
8 8
1. Providing of surplus 5,818, -5,818
reserves 465.7 ,465.7
85
China Fangda Group Co., Ltd. 2012 Annual Report
8 8
2. Common risk
provision
3. Allotment to the
owners (or
shareholders)
4. Others
(5) Internal transferring
of owners’ equity
1. Capitalizing of
capital reserves (or to
capital shares)
2. Capitalizing of
surplus reserves (or to
capital shares)
3. Making up losses by
surplus reserves
4. Others
(6) Special reserves
1. Provided this year
2. Used this term
(7) Others
756,9 80,29 30,49 230,9 1,158,3
4. Balance at the end of 59,708,
09,90 9,867. 4,542. 07,87 20,726.
this term 531.11
5.00 64 94 9.99 68
Amount of Last Year
In RMB
Amount of Last Year
Owners’ Equity Attributable to the Parent Company
Capita Minor
Com Total of
Items l paid Capita Less: Speci Surpl shareho
mon Retain
in (or l Share al us Other lders’ owners’
risk ed equity
share reserv s in reserv reserv s equity
provis profit
capita es stock es es
ions
l)
504,6 334,4 17,83 153,1 1,094,3
1. Balance at the end of 84,337,
06,60 34,01 4,977. 15,14 28,207.
last year 468.25
4.00 4.92 97 2.18 32
86
China Fangda Group Co., Ltd. 2012 Annual Report
Plus:
Retrospective
adjustment caused by
merger of entities under
common control
Plus: Change of
accounting policy
Correcting of
previous errors
Others
2. Balance at the 504,6 334,4 17,83 153,1 1,094,3
84,337,
beginning of current 06,60 34,01 4,977. 15,14 28,207.
468.25
year 4.00 4.92 97 2.18 32
3. Amount of change in 252,3 -253,9 6,841, 58,66
-6,123, 57,728,
current term (“-“ for 03,30 54,52 099.1 2,826.
802.32 903.26
decrease) 1.00 1.00 9 39
65,50
-6,123, 59,380,
(1) Net profit 3,925.
802.32 123.26
58
-1,651
-1,651,2
(2) Other misc. income ,220.0
20.00
0
-1,651 65,50
-6,123, 57,728,
Total of (1) and (2) ,220.0 3,925.
802.32 903.26
0 58
(3) Investment or
decreasing of capital by
owners
1. Capital input by
owners
2. Amount of shares
paid and accounted as
owners’ equity
3. Others
6,841, -6,841
(4) Profit allotment 099.1 ,099.1
9 9
6,841, -6,841
1. Providing of surplus
099.1 ,099.1
reserves
9 9
87
China Fangda Group Co., Ltd. 2012 Annual Report
2. Common risk
provision
3. Allotment to the
owners (or
shareholders)
4. Others
252,3 -252,3
(5) Internal transferring
03,30 03,30
of owners’ equity
1.00 1.00
1. Capitalizing of 252,3 -252,3
capital reserves (or to 03,30 03,30
capital shares) 1.00 1.00
2. Capitalizing of
surplus reserves (or to
capital shares)
3. Making up losses by
surplus reserves
4. Others
(6) Special reserves
1. Provided this year
2. Used this term
(7) Others
756,9 80,47 24,67 211,7 1,152,0
4. Balance at the end of 78,213,
09,90 9,493. 6,077. 77,96 57,110.5
this term 665.93
5.00 92 16 8.57 8
Legal representative: Xiong Jianming CFO: Lin Kebing Accounting Manager: Chen Yonggang
8. Statement of Change in Owners’ Equity (Parent Company)
Prepared by: China Fangda Group Co., Ltd.
Amount of the Current Term
In RMB
Amount of the Current Term
Capital
Commo
Items paid in Less: Total of
Capital Special Surplus n risk Retaine
(or Shares owners’
reserves reserves reserves provisio d profit
share in stock equity
ns
capital)
88
China Fangda Group Co., Ltd. 2012 Annual Report
1,054,7
1. Balance at the end of 756,909 41,078, 24,676, 232,076
41,359.
last year ,905.00 838.54 077.16 ,539.24
94
Plus: Change of
accounting policy
Correcting of
previous errors
Others
2. Balance at the 1,054,7
756,909 41,078, 24,676, 232,076
beginning of current 41,359.
,905.00 838.54 077.16 ,539.24
year 94
3. Amount of change in
-1,279,6 5,818,4 52,366, 56,905,
current term (“-“ for
26.28 65.78 192.01 031.51
decrease)
58,184, 58,184,
(1) Net profit
657.79 657.79
-1,279,6 -1,279,6
(2) Other misc. income
26.28 26.28
-1,279,6 58,184, 56,905,
Total of (1) and (2)
26.28 657.79 031.51
(3) Investment or
decreasing of capital by
owners
1. Capital input by
owners
2. Amount of shares paid
and accounted as
owners’ equity
3. Others
5,818,4 -5,818,4
(4) Profit allotment
65.78 65.78
1. Providing of surplus 5,818,4 -5,818,4
reserves 65.78 65.78
2. Common risk
provision
3. Allotment to the
owners (or shareholders)
4. Others
(5) Internal transferring
89
China Fangda Group Co., Ltd. 2012 Annual Report
of owners’ equity
1. Capitalizing of capital
reserves (or to capital
shares)
2. Capitalizing of
surplus reserves (or to
capital shares)
3. Making up losses by
surplus reserves
4. Others
(6) Special reserves
1. Provided this year
2. Used this term
(7) Others
1,111,64
4. Balance at the end of 756,909 39,799, 30,494, 284,442
6,391.4
this term ,905.00 212.26 542.94 ,731.25
5
Amount of Last Year
In RMB
Amount of Last Year
Capital
Commo
Items paid in Less: Total of
Capital Special Surplus n risk Retaine
(or Shares owners’
reserves reserves reserves provisio d profit
share in stock equity
ns
capital)
1. Balance at the end of 504,606 295,033 17,834, 170,506 987,981
last year ,604.00 ,359.54 977.97 ,646.52 ,588.03
Plus: Change of
accounting policy
Correcting of
previous errors
Others
2. Balance at the 504,606 295,033 17,834, 170,506 987,981
beginning of current year ,604.00 ,359.54 977.97 ,646.52 ,588.03
3. Amount of change in -253,95
252,303 6,841,0 61,569, 66,759,
current term (“-“ for 4,521.0
,301.00 99.19 892.72 771.91
decrease) 0
(1) Net profit 68,410, 68,410,
90
China Fangda Group Co., Ltd. 2012 Annual Report
991.91 991.91
-1,651,2 -1,651,2
(2) Other misc. income
20.00 20.00
-1,651,2 68,410, 66,759,
Total of (1) and (2)
20.00 991.91 771.91
(3) Investment or
decreasing of capital by
owners
1. Capital input by
owners
2. Amount of shares paid
and accounted as
owners’ equity
3. Others
6,841,0 -6,841,0
(4) Profit allotment
99.19 99.19
1. Providing of surplus 6,841,0 -6,841,0
reserves 99.19 99.19
2. Common risk
provision
3. Allotment to the
owners (or shareholders)
4. Others
-252,30
(5) Internal transferring 252,303
3,301.0
of owners’ equity ,301.00
0
1. Capitalizing of capital -252,30
252,303
reserves (or to capital 3,301.0
,301.00
shares) 0
2. Capitalizing of surplus
reserves (or to capital
shares)
3. Making up losses by
surplus reserves
4. Others
(6) Special reserves
1. Provided this year
2. Used this term
91
China Fangda Group Co., Ltd. 2012 Annual Report
(7) Others
1,054,7
4. Balance at the end of 756,909 41,078, 24,676, 232,076
41,359.
this term ,905.00 838.54 077.16 ,539.24
94
Legal representative: Xiong Jianming CFO: Lin Kebing Accounting Manager: Chen Yonggang
III. General Information
China Fangda Group Co., Ltd. (the “Company” or the “Group”) is a joint stock company registered
in Shenzhen, Guangdong and 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 Registration No. of the Company’s business
license is: 440301501124785; registered address: Fangda Building, Kejinan Road 12, High-tech
Zone, Shenzhen. Mr. Xiong Jianming is the legal representative.
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.
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 has established a corporate governance structure that comprises shareholders’
meeting, board of directors and supervisory committee. Currently, the Company sets up the
President Office, Administrative Department, HR Department, Enterprise Management Department,
Financial Department, Audit and Supervisory Department, Securities Department, Technology
Department and IT Department and has established subsidiaries including Fangda Decoration,
Fangda Automatic, Fangda New Material, Shenyang Fangda and Fangda Property.
The business scope includes 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.
92
China Fangda Group Co., Ltd. 2012 Annual Report
IV. Main Accounting Policies, Estimations and Retrospection of Previous Accounting Errors
(I) Basis for the preparation of financial statements
The financial statements have been prepared in accordance with the Enterprise Accounting Standard
– Basic Standards and 38 specific accounting principles issued in February 2006 by the Ministry of
Finance and its application guide, interpretation and other related provision (collectively “Enterprise
Accounting Standards”). The Company has also disclosed related financial information according to
the requirement of the Regulations of Information Disclosure No.15 – General Provisions for
Financial Statements (Revised in 2010) issued by the CSRC.
Except for subsidiaries that have stopped operating, the financial statements are prepared on the
basis of continuous operation. The financial statements for subsidiaries that have stopped operating
(Shenyang Fangda, Fangda Aluminum and Fang Yide) are prepared on the basis of discontinuous
operation.
The Company's audit is based on the accrual basis. Except for some financial entrustments and
property held for investment, the financial statements are prepared based on historical costs. In case
of any asset impairment, the impairment provision will be made as required.
(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, 2012, and
business performance and cash flow situation in Year 2012 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). Bookkeeping standard money
The Company takes RMB as the standard currency for bookkeeping.
(V). Accounting treatment of the entities under common and different control
(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 in addition to the adjustment made given the difference in
accounting policies. 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 capital reserve
(share capital premium). If the share capital premium is not enough to offset the difference, it will
be adjusted to the retained gains.
The direct expenses arising from the merger are included in profits and losses in the current period.
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(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. On the acquisition day, the assets and liabilities (if any) acquired by the
Company from the acquired party are recognized on the fair value.
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.
If the merger costs exceed the fair value of the recognizable net assets of the acquired party in the
merger, it is recognized as goodwill and measured based the costs after the accumulative
impairment provision is deducted; if the fair value exceeds the costs, it is included in the income
statement for the period after being re-examined.
(VI). Preparation of Consolidated Financial Statements
(1) Preparation of Consolidated Financial Statements
The consolidation scope for the consolidated financial statements includes the Company and all
subsidiaries.
The consolidated financial statements are prepared by the Company based on financial statements
of the Company and subsidiaries and according to other related information and adjusted as
long-term equity investment of subsidiaries through the equity method. During preparation of
consolidated financial statements, the accounting policies and period of the Company and
subsidiaries must be the same. Major transactions and balances between companies are offset.
The part of the shareholders’ equity in subsidiaries not owned the Company is separately listed
under the shareholders’ equity as minority shareholders’ equity in the consolidated balance sheet.
The part of the subsidiaries’ net profits and losses for the current period that belongs to minority
shareholders is listed as minority shareholders’ profits and losses under net profit in the
consolidated income statement. If the losses of subsidiaries shared by the minority shareholders
exceed the part of the owners’ equity of the subsidiaries at the beginning of the period, the
excessive part will offset the minority shareholders’ equity.
(2) Accounting methods for the share equity of the same subsidiary purchased and sold in two
consecutive accounting years
(VII) Recognition of cash and cash equivalents
Cash refers to cash on hand and deposits that can be used at any time for payment. Cash equivalent
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.
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(VIII) Foreign exchange business and foreign exchange statement translation
(1) Foreign currencies
Trades of the Company made in foreign currencies are translated into RMB basing on the spot
exchange rate on the date when the trade is conducted.
At the balance sheet date, foreign currency items are translated on the spot exchange rate of the
balance sheet date. The exchange differences caused by the difference in exchange rates on the
balance sheet date and initial recognizing date or previous balance sheet date are included in the
current profits and losses. Non-monetary items accounted in foreign currency and on historical costs
are exchanged with the spot exchange rate on the transaction date.
(2) Translation of foreign exchange statement
(IX) Financial instrument
Financial instrument refers to a company’s financial assets and contracts that form other units of
financial liabilities or equity instruments.
(1) Classification of financial instruments
Financial assets are categorized as: financial assets measured at fair value with variations accounted
into current income account, loans, account receivables and disposable financial assets.
Financial assets measured at fair value with variations accounted into current income account
It includes transactional financial assets and financial assets measured by fair value and with
variations accounted into current gain/loss account at initial recognition. The financial assets are
further measured by fair value with the gain/loss created by variations in fair value and related
dividends and interest accounted into the current gain/loss account.
Receivables
Receivables refer to non-derivative financial assets without quotations but with fixed recoverable
amount or can be confirmed, including receivable accounts and other receivables. Receivables
adopt the effective interest method and are further measured by amortized cost. Gain/loss generated
at final recognition, impairment or amortization is accounted into the current gain/loss account.
Sellable financial assets
Sellable financial asset refers to those sellable non-derivate financial assets recognized initially and
financial assets other than the above-mentioned types of financial assets. Sellable financial assets
are further measured by fair value and the premium/discount is amortized by the effective interest
method and recognized as interest income. Other than the exchange difference of impairment loss
and foreign exchange monetary financial assets, which is recognized as current gain and loss, the
variations in fair value of sellable financial assets is recognized as other comprehensive gain and
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accounted in capital reserve. When it is derecognized and transferred out, it is accounted into the
current gain/loss account. Dividends and interest income related to sellable financial assets are
accounted into the current gain/loss account.
The Company’s financial liabilities are mainly other financial liabilities Other financial liabilities
adopt the effective interest method and are further measured by amortized cost. Gain/loss generated
at final recognition or amortization is accounted into the current gain/loss account.
(2) Recognition and measurement of financial instruments
The Company recognizes a financial asset or liability when it becomes one party in the financial
instrument contract.
Financial asset is derecognized when:
(1) The contractual right to receive the cash flows of the financial assets is terminated;
(2) The financial asset is transferred and meets the following de-recognition condition.
Financial asset transactions in regular ways are recognized and de-recognized on the transaction
date.
Financial assets are measured at the fair value at the initial recognition. For financial assets
measured at fair value with variations accounted into current income account, related transaction
expenses are accounted into the current income. For other financial assets, the related transaction
expenses are accounted into the initial recognized amounts.
(3) Recognition and measurement of financial assets transfer
The transfer of financial assets refers to transferring or delivering the financial assets to another
party (receiver) other than the issuing party of the financial assets.
Recognition of the financial asset is terminated as soon as all of the risks and rewards attached to
the financial asset have 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 the Company neither transfers nor reserve almost all risks and rewards attached to the
financial assets, it will be handled as: When the controlling power over the financial asset is given
up, the financial assets will be derecognized and the generated assets and liabilities will be
recognized; 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.
(4) De-recognition conditions of financial liabilities
When partial or all of the current responsibilities attached to such financial liabilities, the partial or
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all of the financial liabilities are derecognized. When the Company (debtor) and creditor enter into
an agreement to replace the existing financial liabilities by undertaking new financial liabilities and
the contract terms for the new financial liabilities are essentially different from those for the
existing one, the existing financial liabilities will be derecognized and new financial liabilities will
be recognized.
(5) Recognition of fair value of financial assets and liabilities
For financial assets in an active market, the Company uses the prevailing quotations or asking
prices to determine the fair value.
If there is no active market, the Company uses evaluation techniques to determine the fair value.
The results derived from the adoption of valuation technologies reflect the trading prices that may
be adopted in arm’s length basis transactions on the valuation date. Valuation techniques include
using recent arm’s length market transactions between knowledgeable, willing parties, if available,
reference to the current fair value of another instrument that is substantially the same, a discounted
cash flow analysis and option pricing models.
The Company has adopted valuation techniques that have been widely accepted by market
participants and proven reliable by previous effective transaction prices. When using valuation
techniques to determine financial instruments’ fair value, the Company has managed to use all
market parameters that market participants would consider during financial instrument pricing and
transaction prices observable in the current market for same financial instruments to examine the
effectiveness of the valuation techniques.
(6) Impairment test and provision of financial assets (excluding receivables)
The Company checks the book value of financial assets on the balance sheet date. Impairment
provision will be made in case of objective evidence proving impairment to the financial assets.
Objective evidence proving impairment to the financial assets refers to events actually occur after
the initial recognition of financial assets, with influence on the estimated future cash flows of the
financial assets and can be reliably measured by the Company.
Financial assets measured at amortized cost
If there is objective evidence proving impairment to the financial assets, the book value of the
financial assets will be written down to the present value of the estimated future cash flow
(excluding undiscovered future credit loss). The write-down amount is accounted into the current
gain/loss account. The present value of the estimated future cash flow is determined by the original
effective discount rate with the value of the guarantee considered.
Conduct impairment test separately for major financial assets. If there is objective evidence
suggesting impairment, determine the impairment loss and account it into the current gain/loss
account. Conduct impairment test for other financial assets including financial assets combination
with similar credit risk features. Test financial assets without impairment separately (including
major and minor financial assets) and conduct impairment test in the financial assets combination
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with similar credit risk features. Conduct impairment test for financial assets separately recognized
as impaired excluding financial assets combination with similar credit risk features.
After the Company recognizes impair loss to financial assets measured by amortized cost, if there is
object evidence suggesting that the value of the financial assets is restored objectively due to an
event after the loss, the recognized impairment loss can be reversed and accounted into the current
gain/loss account. The book value after the reversal must not exceed the amortized cost of the
financial assets on the reversal date assuming that no impairment provision was made.
Sellable financial assets
If there is objective evidence suggesting impairment to the financial assets, the accumulative loss
generated by the decrease in the fair value that has been directed accounted into capital reserve
should be transferred out and accounted into the current gain/loss account. The transferred
accumulative loss is the balance of the initial acquisition cost of the sellable financial assets after
the recovered principal and amortized amount, current fair value and impair loss that has been
accounted into the gain/loss account are deducted.
For the sellable debt instruments recognized as impaired, if the fair value increases in the following
accounting period objectively due to an event after the original impair loss is recognized, the
impairment loss will be reversed and accounted into the current gain/loss account. Impairment loss
incurred in investment of sellable equity instrument is not reversed through the gain/loss account.
Financial assets measured at cost
If there is no quotation in an active market and its fair value cannot be measured reliably or the
derivative financial assets that linked to the equity instrument and can only settled by delivering the
equity instrument is impaired, the difference between the book value of the financial assets and the
current value recognized by discounting the future cash flow against the market yield of similar
financial assets in the current market is recognized as the impairment loss and accounted into the
current gain/loss account. The impairment loss cannot be reversed after being recognized.
(7) The basis of reclassifying the immature investment held until maturity as sellable financial
assets, indicating changes in the intention or capability of holding the investment
10. Recognition standard and provision method for receivable bad debt provision
Receivables include receivable accounts, other receivables and prepayment.
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.
(1) Receivables with major individual amount and bad debt provision provided individually
Judging basis or standard of major individual For the current year, the Company recognizes
amount project receivables over RMB8 million
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(inclusive) 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”.
The Company performs impairment
examination individually on each large
amount receivables, and recognizes
Provision method for account receivable with major
impairment and provides bad debt provision
individual amount and bad debt provision provided
when the impairment is recognized based on
individually
objective evidence. Those not impaired are
accounted along with the minor amount
receivables and recognized in risk groups.
(2) Recognition and providing of bad debt provisions on groups
Group Providing method Grouping basis
Account age Aging method Account age
Receivable accounts
Other method Consolidation scope
consolidated
Receivables adopting the aging method in the group
√ Applicable □ Inapplicable
Providing rate for receivable
Age Providing rate for other receivables %
account %
Within 1 year (inclusive) 3% 3%
1-2 years 10% 10%
2-3 years 30% 30%
Over 3 years 50% 50%
3-4 years 50% 50%
4-5 years 50% 50%
Over 5 years 50% 50%
Receivables adopting the balance percentage method in the group
□ Applicable √ Inapplicable
Receivables adopting other methods in the group
√ Applicable □ Inapplicable
Group Method
Receivable accounts consolidated Individual recognition method
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(3) Account receivable with minor individual amount and bad debt provision provided individually
Reasons for separate bad debt
Long account age or deterioration of customer creditability
provision
According to the difference between the present value of future
Method of bad debt provision
cash flow and the book value
(XI) Inventories
(1) Classification of inventories
The Company’s inventories include purchased materials, 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
Weighted average method
Inventories are measured at cost when procured. Raw materials, products in process, commodity
stocks and goods shipped in transit are measured by the weighted average method.
Construction contracts are measured by the effective cost, including direct and indirect expenses
generated before the contracts are fulfilled. Costs generated and recognized accumulatively by
construction in process and settled payment are listed in the balance sheet as offset net amounts.
The excessive part of the sum of the generated costs and recognized gross profit (loss) over the
settled payment is listed inventories; the excessive part of the settled payment over the sum of the
generated costs and recognized gross profit (loss) is listed as the prepayment received.
Travel and bidding expenses generated by execution of contracts, if they can be separated and
reliably measured and it is likely to enter into contracts, are accounted as the contract cost when the
contracts are entered into; or into the current gain/loss account if the conditions are not met.
(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. If the cost is higher than the net realizable value, the impairment
provision will be made.
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.
The Company generally made inventory impairment provision individually or by categories.
Including: for inventories such as finished products or materials which will be directly sold, in the
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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. Inventories with similar purpose or final use, produced and to be sold in the
same district and cannot be separated for valuation will be provided together; inventory of a large
quantity and with low prices are provided by categories. On the balance sheet day, if the influence
of the inventory value write-down has disappeared, the impairment provision will be reversed
within the provided amount.
(4) Inventory system
Perpetual inventory system
The Company uses perpetual inventory system.
(5) Amortizing of low-value consumables and packaging materials
Low price consumable
Once-off amortization basis
Low-value consumables are amortized on on-off amortization basis at using.
Package
On-off amortization basis
Packages are amortized on on-off amortization basis at using.
(XII) Long-term share equity investment
(1) Recognition of initial investment costs
All the long-term share equity investments of the Company are the investment in subsidiaries:
Investment of the Company in subsidiaries is valued at investment costs. For long-term share equity
investment formed by shareholding and merger. Retrospective or retrieved investment is 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. For the long-term
equity investment measured on the cost basis, except for the announced cash dividend or profit
included in the practical cost or price when the investment was made, the cash dividends or profit
distributed by the invested entity are recognized as investment gains in the current gain/loss
account.
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(3) Basis for recognition of common control and major influence on invested entities
(4) Impairment examination and providing of impairment provision
The Company judges whether there is a sign of impairment to assets on the balance sheet day. If
such sign exists, the Company estimates the recoverable amount and conducts the impairment test.
Impairment test is conducted annually for goodwill generated by mergers and intangible assets that
have not reached the useful condition no matter whether the impairment sign exists.
The recoverable amount is determined by the higher of the net of fair value minus disposal expense
and the present value of the predicted future cash flow. The Company estimates the recoverable
amount on the individual asset item basis; whether it is hard to estimate the recoverable amount on
the individual asset item basis, determine the recoverable amount based on the asset group that the
assets belong to. The assets group is determined by whether the main cash flow generated by the
group is independent from those generated by other assets or assets groups.
When the recoverable amount of the assets or assets group is lower than its book value, the
Company writes down the book value to the recoverable amount, the write-down amount is
accounted into the current income account and the assets impairment provision is made.
For goodwill impairment test, the book value of goodwill generated by mergers is amortized
through reasonable measures since the purchase day to related asset groups; those cannot be
amortized to related assets groups are amortized to related combination of asset groups. The related
asset groups or combination of asset groups refer to those that can benefit from the synergistic
effect of mergers and must not exceed to the reporting range determined by the Company.
When the impairment test is conducted, if there is sign of impairment to the asset group or
combination of asset groups related to goodwill, first perform impair test for asset group or
combination of asset groups without goodwill and calculate the recoverable amount and recognize
the related impairment loss. Then conduct impairment test on those with goodwill, compare the
book value with recoverable amount. If the recoverable amount is lower than the book value,
recognize the impairment loss of the goodwill.
Once recognized, the asset impairment loss cannot be written back in subsequent accounting period.
(XIII) Investment real estates
Investment real estates are held for rent or capital appreciation, or both. The Company’s investment
real estates include land use right, land use right held for appreciation and transfer and leased
buildings.
For investment real estates with an active real estate transaction market and the Company can
obtain market price and other information of same or similar real estates to reasonably estimate the
investment real estates’ fair value, the Company will use the fair value mode to measure the
investment real estates subsequently. Variations in fair value are accounted into the current
gain/loss account.
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The fair value of investment real estates is determined with reference to the current market prices of
same or similar real estates in active markets; when no such price is available, with reference to the
recent transaction prices and consideration of factors including transaction background, date and
district to reasonably estimate the fair value; or based on the estimated lease gains and present value
of related cash flows.
For an investment real estate whose fair value is proven unable to be obtained continuously and
reliably by objective evidence, the real estate will be measured at cost basis until it is disposed and
no residual value remains as assumed.
The difference of the proceeds from sales, transfer, retirement or destruction of investment real
estates with book value and related taxes deducted is accounted into the 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,
providing services, lease or for operation & management, and have more than one accounting year
of service life. The fixed assets can only be recognized hen economic interests related to the fixed
assets are very likely to flow into the company and the costs of the fixed assets can be reliably
measured. The Company measures fixed assets at the actual costs when the fixed assets are obtained
(3) Recognition and pricing of financing leased fixed assets
The Company measures the leased assets as the lower of the fair value and the present value of
minimum lease payment of the leased assets on the starting date of the lease and records the
minimum lease payment as long-term payable and the difference between the two as unrecognized
financing expense. The initial direct expense is accounted into asset value. Unrecognized financial
cost is recognized as financial cost at actual interest basis to the periods of the leasing period. The
Company adopts the depreciation policy same as the self-owned fixed assets to made provision for
depreciation of leased assets.
(3) Depreciation of fixed assets
The Company adopts the straight age average basis to make depreciation provision. The Company
will start to make the depreciation provision when the fixed assets reach the preset serviceable
condition and stop to make the depreciation provision when it is derecognized or categorized as
non-current assets held for sales. Without considering depreciation provision, the Company
determines annual depreciation rates for various fixed assets according to types, predicted service
life and residual value:
Type Useful year (year) Residual rate % Annual depreciation rate %
Houses & buildings 45 10% 2%
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China Fangda Group Co., Ltd. 2012 Annual Report
Equipment & machinery 10 10% 9%
Electronic equipment 5 10% 18%
Transport equipment 5 10% 18%
(4) Impair test and impairment provision for fixed assets
The Company judges whether there is a sign of impairment to assets on the balance sheet day. If
such sign exists, the Company estimates the recoverable amount and conducts the impairment test.
Impairment test is conducted annually for goodwill generated by mergers and intangible assets that
have not reached the useful condition no matter whether the impairment sign exists.
The recoverable amount is determined by the higher of the net of fair value minus disposal expense
and the present value of the predicted future cash flow. The Company estimates the recoverable
amount on the individual asset item basis; whether it is hard to estimate the recoverable amount on
the individual asset item basis, determine the recoverable amount based on the asset group that the
assets belong to. The assets group is determined by whether the main cash flow generated by the
group is independent from those generated by other assets or assets groups.
When the recoverable amount of the assets or assets group is lower than its book value, the
Company writes down the book value to the recoverable amount, the write-down amount is
accounted into the current income account and the assets impairment provision is made.
For goodwill impairment test, the book value of goodwill generated by mergers is amortized
through reasonable measures since the purchase day to related asset groups; those cannot be
amortized to related assets groups are amortized to related combination of asset groups. The related
asset groups or combination of asset groups refer to those that can benefit from the synergistic
effect of mergers and must not exceed to the reporting range determined by the Company.
When the impairment test is conducted, if there is sign of impairment to the asset group or
combination of asset groups related to goodwill, first perform impair test for asset group or
combination of asset groups without goodwill and calculate the recoverable amount and recognize
the related impairment loss. Then conduct impairment test on those with goodwill, compare the
book value with recoverable amount. If the recoverable amount is lower than the book value,
recognize the impairment loss of the goodwill.
Once recognized, the asset impairment loss cannot be written back in subsequent accounting period.
(5) Others
For fixed assets for which depreciation provision is made, the depreciation rate will be determined
after the accumulative depreciation provision amount is deducted.
At end of each fiscal year, verification will be made on the useful life, predicted retained value, and
depreciation basis.
The useful life will be adjusted if the useful life is different from the predicted one; the net residual
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China Fangda Group Co., Ltd. 2012 Annual Report
value will be adjusted if the net residual value is different from the predicted one.
Overhaul cost generated by regular examination on fixed assets is recognized as fixed assets costs
when there is evidence proving that it meets fix assets recognition conditions. If not, it will be
accounted into the current gain/loss account. Depreciation provision will be made for fixed assets
between two regular overhauls.
(XV) Construction in process
(1) Categories of construction in process
(2) Standard and timing for transferring construction in process into fixed assets
Construction in process will be transferred to fixed assets when it reaches the preset service
condition.
(3) Impair test and impairment provision for construction in process
The Company judges whether there is a sign of impairment to assets on the balance sheet day. If
such sign exists, the Company estimates the recoverable amount and conducts the impairment test.
Impairment test is conducted annually for goodwill generated by mergers and intangible assets that
have not reached the useful condition no matter whether the impairment sign exists.
The recoverable amount is determined by the higher of the net of fair value minus disposal expense
and the present value of the predicted future cash flow. The Company estimates the recoverable
amount on the individual asset item basis; whether it is hard to estimate the recoverable amount on
the individual asset item basis, determine the recoverable amount based on the asset group that the
assets belong to. The assets group is determined by whether the main cash flow generated by the
group is independent from those generated by other assets or assets groups.
When the recoverable amount of the assets or assets group is lower than its book value, the
Company writes down the book value to the recoverable amount, the write-down amount is
accounted into the current income account and the assets impairment provision is made.
For goodwill impairment test, the book value of goodwill generated by mergers is amortized
through reasonable measures since the purchase day to related asset groups; those cannot be
amortized to related assets groups are amortized to related combination of asset groups. The related
asset groups or combination of asset groups refer to those that can benefit from the synergistic
effect of mergers and must not exceed to the reporting range determined by the Company.
When the impairment test is conducted, if there is sign of impairment to the asset group or
combination of asset groups related to goodwill, first perform impair test for asset group or
combination of asset groups without goodwill and calculate the recoverable amount and recognize
the related impairment loss. Then conduct impairment test on those with goodwill, compare the
book value with recoverable amount. If the recoverable amount is lower than the book value,
recognize the impairment loss of the goodwill.
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China Fangda Group Co., Ltd. 2012 Annual Report
Once recognized, the asset impairment loss cannot be written back in subsequent accounting period.
(XVI) Borrowing expenses
(1) Recognition principles for capitalization of 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.
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.
(2) During borrowing expense capitalization
When the asset satisfying the capitalizing conditions has reached its usable or sellable status,
capitalizing of borrowing expenses shall be terminated. Borrowing expenses incurred after assets
that meet capitalization conditions reach the service or sales conditions are accounted into the
current gain/loss account according to the actual amounts.
(3) Capitalization suspension period
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. During the
normal suspension period, borrowing expenses will be capitalized continuously.
(4) Calculation of the capitalization amount of borrowing expense
(XVII) Biological assets
(XVIII) Oil and gas assets
(XIX) Intangible assets
(1) Pricing of intangible assets
(2) Useful life of intangible assets with limited useful life
Intangible assets are initially measured at costs and the useful life will be determined when obtained.
Where the useful life is limited, the intangible assets will be amortized within the predicted useful
life by using the amortization method that can reflect predicted realization way of the economic
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benefit of the assets; whether the realization way cannot be reliably confirmed, use the straight-line
method. If the useful life is uncertain, the intangible assets are not amortized.
Items Estimated useful life Basis
Land using right Beneficial age Average age
Patent 10 years Average age
Industrial property and
10 years Average age
special tech
Software 5, 10 years Average age
10 years or beneficial
Other intangible assets Average age
age
(3) Judgment basis of intangible assets without definite useful life
(4) Provision of intangible assets impairment
The Company judges whether there is a sign of impairment to assets on the balance sheet day. If
such sign exists, the Company estimates the recoverable amount and conducts the impairment test.
Impairment test is conducted annually for goodwill generated by mergers and intangible assets that
have not reached the useful condition no matter whether the impairment sign exists.
The recoverable amount is determined by the higher of the net of fair value minus disposal expense
and the present value of the predicted future cash flow. The Company estimates the recoverable
amount on the individual asset item basis; whether it is hard to estimate the recoverable amount on
the individual asset item basis, determine the recoverable amount based on the asset group that the
assets belong to. The assets group is determined by whether the main cash flow generated by the
group is independent from those generated by other assets or assets groups.
When the recoverable amount of the assets or assets group is lower than its book value, the
Company writes down the book value to the recoverable amount, the write-down amount is
accounted into the current income account and the assets impairment provision is made.
For goodwill impairment test, the book value of goodwill generated by mergers is amortized
through reasonable measures since the purchase day to related asset groups; those cannot be
amortized to related assets groups are amortized to related combination of asset groups. The related
asset groups or combination of asset groups refer to those that can benefit from the synergistic
effect of mergers and must not exceed to the reporting range determined by the Company.
When the impairment test is conducted, if there is sign of impairment to the asset group or
combination of asset groups related to goodwill, first perform impair test for asset group or
combination of asset groups without goodwill and calculate the recoverable amount and recognize
the related impairment loss. Then conduct impairment test on those with goodwill, compare the
book value with recoverable amount. If the recoverable amount is lower than the book value,
recognize the impairment loss of the goodwill.
107
China Fangda Group Co., Ltd. 2012 Annual Report
Once recognized, the asset impairment loss cannot be written back in subsequent accounting period.
(3) Specific standard for distinguish between research and development stage
The Company divides internal R&D project expenses into research and development expenses.
Development expenses can only be capitalized when the following conditions are satisfied: the
technology is feasible for use or sales; there is the intention to use or sell the intangible assets; it can
be proven that the product generated by the intangible assets is demanded or the intangible assets in
demanded; if the intangible is used internally, it can be proven that it is useful; with necessary
technical and financial resources and other resources to complete the development of the intangible
assets and the intangible assets can be used or sold; the development expense can be reliably
measured. If not, the development expense is accounted into the current gain/loss account.
If a research project meets the above-mentioned conditions and passes the technical and economic
feasibility study, the project will enter the development stage.
Expenses in the development stage capitalized are listed as development expense on the balance
sheet and transferred to intangible assets when the project reaches the useful condition.
(6) Audit of internal research and development expenses
The research expenses are accounted the current gain/loss account.
Development expenses are capitalized if they meet the capitalization conditions; if not, accounted
into the current income account.
(XX) Long-term amortizable expenses
The Company’s long-term amortizable expenses are measured at the actual costs and amortized
averagely based on the beneficial term. For long-term amortizable expenses that are not beneficial
in the subsequent account periods, the residual value is fully accounted into the current gain/loss
account.
(XXI) Transfer of assets without repurchase conditions
(XXII) Anticipated liabilities
(1) Recognition standards of 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.
108
China Fangda Group Co., Ltd. 2012 Annual Report
(3) Measurement of anticipated liabilities
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.
If liquidation has confirmed that the expenses will be compensated fully or partly by a third or other
party, the compensation amount can only be recognized individually as assets when the recovery of
the amount is almost certain. The compensation must not exceed the book value of the recognized
liabilities.
(XXIII) Share payment and equity instruments
(1) Share payment category
(2) Recognition of fair value of equity instruments
(3) Basis for recognition of the best estimation of realizable equity instruments
(4) Related accounting treatment of implementation, modification and suspension share payment
plan
(XXIV) Repurchase of the Company’s shares
(XXV) Revenue
(1) Specific judgment standard of recognition time of goods sales revenue
When all of the following conditions are satisfied, the sales of goods are recognized as sales income
according to the contract amount received or receivable from the buyer: (1) Main risks and rewards
attached to the ownership of the goods have been transferred to the buyer; (2) No succeeding power
of administration or effective control is reserved which are usually attached to ownership; (3)
Amount 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.
(2) Basis for recognition of revenue from demising of asset using rights
The revenue is recognized when the financial benefit in connection with the demising of asset using
right was received and the amount can be reliably measured.
(3) Basis for recognition of revenue from providing of labor services
If they are not in the same year, then use the estimation on percentage basis when it is possible.
109
China Fangda Group Co., Ltd. 2012 Annual Report
The completion percentage is the costs occurred on the total cost.
The reliable estimation of the result of providing of labor service must meet the following
conditions: A. the revenue can be reliably measured; B. the economic benefit is very likely to flow
into the company; C. the completion can be determined reliably; D. costs incurred or will be
incurred can be reliably measured.
If the result cannot be reliably estimated, use the service cost amount of the compensation obtained
or will be obtained to recognize the revenue of the providing of labor service and recognize the
incurred labor service cost as the current expense. If no compensation can be obtained for incurred
labor service cost, no revenue can be recognized.
(4) Basis and method for recognition of contract completion progress when the revenue from
providing of labor service and construction contracts is recognized on the competition percentage.
On the balance sheet day, the Company recognizes the contract income and costs using the
completion percentage method if the result of the construction contract can be reliably estimated. If
not, such contracts are treated differently. If the contract cost can be recovered, the revenue is
recognized according to the actual contract costs that can be recovered and the contract cost is
recognized as the current expense; if not, the contract cost is recognized as the current expense and
no revenue is recognized.
If the estimated total costs exceed the total revenue, the Company recognizes the estimated loss as
the current expense.
The competition percentage is determined by the share of the costs incurred in the total cost.
The reliable estimation of the result of a construction contract must meet the following conditions:
A. the revenue can be reliably measured; B. the economic benefit is very likely to flow into the
company; C. the completion cost can be clearly distinguished and determined reliably; D. the
completion and costs that will be incurred for completion of the contract can be reliably recognized.
Metro screen door projects of the Company and Shenzhen Fangda Automatic System, and
curtain wall project of 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.
110
China Fangda Group Co., Ltd. 2012 Annual Report
Contract costs are direct and indirect expenses occurred since the date when the contract is engaged
till the completion day. The competition percentage is determined by the share of the costs incurred
in the 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 the agreed rate. For these construction contracts, income will be recognized when
ongoing payment for the project is received and corresponding costs are transferred.
Revenue of products for domestic sales is recognized when the Company delivers the products and
receives the sales payment or obtains the payment voucher; revenue for products for overseas sales
is recognized at departure of the products.
(XXVI) Government subsidy
(1) Type
(2) Accounting method
Government subsidy is only recognized when the required conditions are met and the subsidy is
received.
When a government subsidy is monetary capital, it is measured at the received or receivable amount.
If there is objective evidence indicating that the subsidy is given based on fixed amount, it can be
measured at the receivable amount, otherwise it is recognized at the received 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 current expenses or losses, are recognized as current
gain/loss, if used to cover future expenses or losses, recognized as differed gains, and recorded to
current income account to the period when the expenses are recognized. Government subsidy
measured at the nominal amount is accounted into current income account.
If a recognized government subsidy needs to be returned, if there are 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 gain, record to current income account directly.
111
China Fangda Group Co., Ltd. 2012 Annual Report
(XXVII) Differed income tax assets and differed income tax liabilities
(1) Basis for recognition of deferred income tax assets
For Deductible temporary difference, deductible loss and tax deduction that can be accounted in
subsequent years, the Company recognizes the incurred deferred income tax assets to the extent to
the future income tax proceeds that is very likely to be received for deducting Deductible temporary
difference, Deductible loss and tax deduction, unless the Deductible temporary difference is
generated in following transactions: (1) the transaction is not a merger and the transaction does not
affect the accounting profit or taxable proceeds; (2) for the taxable temporary difference related to
investment in subsidiaries, the corresponding deferred income tax assets are recognized when the
following condition is met: the temporary difference is very likely to be reversed in the foreseeable
future and it is very likely to receive the taxable proceeds that can be used to deduct the Deductible
temporary difference.
(2) Basis for recognition of deferred income tax liabilities
The taxable temporary difference recognizes the related deferred income tax liabilities, unless the
taxable temporary difference is created by the following transactions: (1) Initial recognition of
goodwill, or of assets or liabilities generated in transactions with the following features: the
transaction is not a merger and the transaction does not affect the accounting profit or taxable
proceeds; (2) For taxable temporary difference related to investment in subsidiaries, the reversal
timing for the temporary difference can be controlled and the difference is unlikely to be reversed in
the foreseeable future.
(XXVIII) Operational leasing and financial leasing
(1) Accounting of operational leasing
The Company as the leasor: 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.
The Company as the leasee: 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.
(2) Accounting of financial leasing
The Company as the leasor: 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.
The Company as the leasee: The Company measures the leased assets as the lower of the fair value
and the present value of minimum lease payment of the leased assets on the starting date of the
112
China Fangda Group Co., Ltd. 2012 Annual Report
lease and records the minimum lease payment as long-term payable and the difference between the
two as unrecognized financing expense. The initial direct expense is accounted into asset value.
Unrecognized financial cost is recognized as financial cost at actual interest basis to the periods of
the leasing period. The Company adopts the depreciation policy same as the self-owned fixed assets
to made provision for depreciation of leased assets.
(3) Accounting of sale and lease-back
(XXIX) Assets held for sales
(1) Recognition standard
(2) Accounting treatment
(XXX) Asset securitization
(XXXI) Accounting of hedging
(XXXII) Major changes in accounting policies and estimates
Changes in major accounting estimates in the report period
□ Yes √ No
No change in major accounting estimates in the report period
(1) Changes in accounting policies
Changes in major accounting policies in the report period: no
□ Yes √ No
No change in major accounting policies in the report period
(2) Changes in accounting estimates
Changes in major accounting estimates in the report period
□ Yes √ No
No change in major accounting estimates in the report period
(XXXIII) Correction of previous accounting faults
Faults in previous accounts in the current report period
□ Yes √ No
None
113
China Fangda Group Co., Ltd. 2012 Annual Report
(1) Retrospective restatement method
Faults in adoption of the retrospective restatement method in the report period
□ Yes √ No
(2) Prospective application method
Faults in adoption of the prospective application method in the report period
□ Yes √ No
(XXXIV) Other major accounting policies, accounting estimates and preparation of financial
statements
V Taxation
1. Major taxes and tax rates
Tax Tax basis Tax rate
Business tax Taxable income 6%、17%
Business tax Taxable income 3%、5%
City maintenance and construction
Taxable turnover 7%
tax
Enterprise income tax Taxable income 12.5%、15%、25%
Income tax rates for branches and factories
2. Tax preference and approval
(1) 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 a tax
preference of enterprise income tax of 15% for three years (2009-2011) since the qualifications
were awarded.
(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 Automatic was entitled to enjoy a tax
preference of enterprise income tax of 15% for three years (2009-2011) since the qualifications
were awarded.
(3) 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 cut by half in 2010,
12.5% in 2011 and 2012.
The certifications for the above-mentioned three subsidiaries have expired in 2011 and have
114
China Fangda Group Co., Ltd. 2012 Annual Report
been reviewed and approved in 2012. The Company is forecast to obtain the renewed certification
in 2013 and the enterprise income tax for the three subsidiaries is provisionally collected at 15% in
2012.
(3) Others
VI Merger of enterprises and consolidated financial statements
1. Subsidiaries
(1) Subsidiaries founded or acquired from investment
In RMB
The
balanc
e of
the
owner
s’
intere
st in
Amou the
Balan
nt for parent
ce of
deduc after
Actua other
ting deduc
l items
Propo minor ting
Type Regist Regist invest comp Conso Minor
Busin Share rtion ity the
Subsi of ered Busin ered ment osing lidate ity
ess holdin of gain/l excess
diary subsid addres ess capita at the net statem intere
scope g (%) votes oss in ive
iary s l end of invest ents sts
% the part
the ment
minor of the
period in
ity loss
subsid
intere shared
iaries
sts by
minor
ity
shareh
olders
over
the
share
of
115
China Fangda Group Co., Ltd. 2012 Annual Report
profits
in the
owner
s’
intere
st in
the
subsid
iary
of
minor
ity
shareh
older
at the
begin
ning
of the
year
Desig Desig
Shenz ning, ning,
hen manuf manuf
Fangd acturi acturi
Fully-
a ng, ng,
owne 310,0 310,0
Decor Shenz and and
d 00,00 00,00 100% 100% Yes
ation hen install install
subsid 0.00 0.00
Engin ation ation
iary
eering of of
Co., curtai curtai
Ltd. n n
walls walls
Desig
ning,
Shenz
Install techni
hen
ation cal
Fangd
Fully- and devel
a
owne proces 105,0 oping, 183,7
Auto Shenz
d sing 00,00 install 70,00 100% 100% Yes
matic hen
subsid of 0.00 ation, 0.73
Syste
iary metro and
m
screen sales
Co.,
door of
Ltd.
PSD
syste
116
China Fangda Group Co., Ltd. 2012 Annual Report
m;
impor
t&
export
;
install
ation
and
proces
sing
of
PSD.
Produ R&D,
ction design
Shenz
and and
hen
distrib produ
Fangd Fully-
ution ction
a Yide owne USD3 3,200,
Shenz of of
New d ,200,0 000.0 100% 100% Yes
hen new-t new-t
Mater subsid 00.00 0
ype ype
ial iary
comp comp
Co.,
osite osite
Ltd.
materi materi
als als
Produ
Produ
ction
ction
and
and
sales
sales
of
of
new-t
new-t
Fangd ype
ype
a New materi
Fully- materi
Mater USD1 als,
owne als 12,00
ials Nanch 2,000, comp
d comp 0,000. 100% 100% Yes
(Jiang ang 000.0 osite
subsid osite 00
xi) 0 materi
iary materi
Co., als,
als
Ltd. produ
and
ction
produ
of
ction
curtai
of
n
curtai
walls,
n
windo
117
China Fangda Group Co., Ltd. 2012 Annual Report
walls ws,
metal
struct
ures
and
comp
onents
,
metal
produ
cts
and
enviro
nment
al
protec
tion
materi
als
and
produ
cts
Desig Desig
n, n,
produ produ
ction, ction,
sales sales
and and
install install
Jiangx
ation ation
i
of of
Fangd Fully-
curtai curtai
a New owne 20,00 20,00
Nanch n wall n wall
Type d 0,000. 0,000. 100% 100% Yes
ang alumi alumi
Alumi subsid 00 00
num num
num iary
materi materi
Co.,
als, als,
Ltd.
doors, doors,
windo windo
ws ws
and and
sectio sectio
nal nal
materi materi
118
China Fangda Group Co., Ltd. 2012 Annual Report
als als
Hong
Fully-
Kong
owne HKD
Junjia Hong Invest Invest 10,00
d 10,00 100% 100% Yes
Group Kong ment ment 0.00
subsid 0.00
Co.,
iary
Ltd.
Manu Manu
facturi facturi
ng of ng of
semic semic
onduc onduc
tor tor
lightin lightin
g g
materi materi
al and al and
chips; chips;
lightin lightin
g g
Sheny source source
ang encap encap
Fangd sulati sulati
a on; on;
Contr
Semi- devel 200,0 devel 59,70 -18,50
olled Sheny 10,88 64.58 64.58
condu oping, 00,00 oping, Yes 8,531. 5,134.
subsid ang 5.21 % %
ctor design 0.00 design 11 82
iaries
Lighti ing, ing,
ng manuf manuf
Co., acturi acturi
Ltd. ng, ng,
engin engin
eering eering
, ,
install install
ation ation
and and
tradin tradin
g of g of
semic semic
onduc onduc
tor tor
lightin lightin
g g
119
China Fangda Group Co., Ltd. 2012 Annual Report
syste syste
m m
Comp
uter
softw
are
and
hardw
Devel
are
oping
devel
of
opme
hardw
nt and
Shenz are
sales,
hen and
Fully- comp
Kexu softw
owne 1,000, uter 1,000,
nda Shenz are,
d 000.0 softw 000.0 100% 100% Yes
Softw hen syste
subsid 0 are 0
are m
iary devel
Co., integr
opme
Ltd. ation,
nt,
techni
syste
cal
m
consul
integr
ting
ation
and
techni
cal
consul
ting
Devel Devel
opme opme
Shenz nt and nt and
hen operat operat
Fangd ing of ing of
a Fully- real real
Prope owne estate 10,00 estate 10,00
Shenz
rty d on 0,000. on 0,000. 100% 100% Yes
hen
Devel subsid land 00 land 00
opme iary of of
nt which which
Co., land land
Ltd. use use
right right
is is
120
China Fangda Group Co., Ltd. 2012 Annual Report
legall legall
y y
obtain obtain
ed by ed by
the the
Comp Comp
any; any;
proper proper
ty ty
mana mana
geme geme
nt nt
Notes to subsidiaries founded or acquired from investment
(2) Subsidiaries acquired by mergers of companies under the common control
In RMB
The
balanc
e of
the
owner
s’
intere
Amou st in
Balan
nt for the
ce of
deduc parent
Actua other
ting after
l items
Propo minor deduc
Type Regist Regist invest comp Conso Minor
Busin Share rtion ity ting
Subsi of ered Busin ered ment osing lidate ity
ess holdin of gain/l the
diary subsid addres ess capita at the net statem intere
scope g (%) votes oss in excess
iary s l end of invest ents sts
% the ive
the ment
minor part
period in
ity of the
subsid
intere loss
iaries
sts shared
by
minor
ity
shareh
olders
over
the
121
China Fangda Group Co., Ltd. 2012 Annual Report
share
of
profits
in the
owner
s’
intere
st in
the
subsid
iary
of
minor
ity
shareh
older
at the
begin
ning
of the
year
Notes to subsidiaries acquired by mergers of companies under the common control
(3) Subsidiaries acquired by mergers of companies not under the common control
In RMB
The
balanc
e of
Amou
Balan the
nt for
ce of owner
deduc
Actua other s’
ting
l items intere
Propo minor
Type Regist Regist invest comp Conso Minor st in
Busin Share rtion ity
Subsi of ered Busin ered ment osing lidate ity the
ess holdin of gain/l
diary subsid addres ess capita at the net statem intere parent
scope g (%) votes oss in
iary s l end of invest ents sts after
% the
the ment deduc
minor
period in ting
ity
subsid the
intere
iaries excess
sts
ive
part
of the
122
China Fangda Group Co., Ltd. 2012 Annual Report
loss
shared
by
minor
ity
shareh
olders
over
the
share
of
profits
in the
owner
s’
intere
st in
the
subsid
iary
of
minor
ity
shareh
older
at the
begin
ning
of the
year
Notes to subsidiaries acquired by mergers of companies not under the common control
2. Operational entities of control powers generated by special purpose entities or trust operation or
lease
In RMB
Major assets and liabilities balance recognized
Business with the
Name at the end of the period in consolidated
Company
statements
2. Notes to operational entities of control powers generated by special purpose entities or trust
operation or lease
123
China Fangda Group Co., Ltd. 2012 Annual Report
3. Notes to changes in the consolidation scope
Notes to changes in the consolidation scope
√ Applicable □ Inapplicable
Three entities are added into the consolidation this year. The reason is
The Company established the Shenzhen Fangda Property Development Co., Ltd. through
investment during the report period and Fangda New Material Co., Ltd. and Fangda Decoration
Engineering (Shenyang) Co., Ltd through investment by Fangda Decoration.
No entity is removed from the consolidation this year.
4. New entities added to the consolidation and removed from the consolidation during the report
period
Subsidiaries, special purpose entities and operational entities through trusted operation or lease
newly added into the consolidation
In RMB
Net asset at end of the Net profit of the current
Name
period period
Chengdu Fangda New Material Co., Ltd. 18,501,014.68 -1,498,985.32
Fangda Decoration Engineering
4,938,447.19 -61,552.81
(Shenyang) Co., Ltd.
Shenzhen Fangda Property Development
9,986,611.10 -13,388.90
Co., Ltd.
Subsidiaries, special purpose entities and operational entities through trusted operation or lease
removed from the consolidation
In RMB
Net profit between the
Net assets on the disposal
Name beginning of the year and
day
the disposal day
Notes to entities newly added and removed from the consolidation
5. Merger of companies under the common control during the report period
In RMB
Basis for Revenue Operational
Net profit
judgment of between the activity cash
Substantial between the
merger of beginning of flow between
controller of consolidation
Merged party companies the the
the common period and the
under the consolidation consolidation
control consolidation
common period and the period and the
day
control consolidation consolidation
124
China Fangda Group Co., Ltd. 2012 Annual Report
day day
Notes to mergers of companies under the common control
6. Merger of companies not under the common control during the report period
In RMB
Merged party Goodwill amount Goodwill calculation method
Notes to mergers of companies not under the common control
7. Subsidiaries lost due to loss of control in shares during the report period
Company Disposal day Gain/loss recognition method
Notes to subsidiaries lost due to loss of control in shares during the report period
8. Counter purchase in the report period
Calculation method of
Basis for judgment of Recognition method of
Shell borrower goodwill recognized or
counter purchase merger costs
current gain/loss
Notes to counter purchase
9. Merger by absorption in the report period
In RMB
Type Merged assets Merged liabilities
Merger by absorption under the
Project Amount Project Amount
common control
Merger by absorption not under the
Project Amount Project Amount
common control
Notes to merger by absorption
10. Foreign exchange rate of major statement items of overseas operational entities
VII Notes to the consolidated financial statements
1. Monetary capital
In RMB
Closing amount Opening amount
Project Foreign Exchang Foreign Exchang
RMB RMB
exchange e rate exchange e rate
125
China Fangda Group Co., Ltd. 2012 Annual Report
Cash: -- -- 10,565.48 -- -- 27,427.37
RMB -- -- 9,340.48 -- -- 25,877.99
US Dollar
0.81085
HK Dollar 1,510.76 1,225.00 1,911.16 0.8107% 1,549.38
%
252,155,936.5
Bank deposits: -- -- -- -- 310,876,944.80
7
252,087,857.8
RMB -- -- -- -- 310,189,424.04
2
US Dollar 10,831.08 6.2855% 68,078.75 109,114.69 6.3009% 687,520.76
HK Dollar
Other monetary
-- -- 26,117,466.56 -- -- 13,875,978.60
capital:
RMB -- -- 26,116,643.85 -- -- 12,590,607.47
US Dollar 130.89 6.2855% 822.71 203,998.02 6.3009% 1,285,371.13
HK Dollar
278,283,968.6
Total -- -- -- -- 324,780,350.77
1
Amounts with limitation of use, deposited abroad, with potential recovering risk should be
separately explained.
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.
2. Balance of RMB26,117,466.56 under other monetary capital was mainly deposit for bank
accepted notes and letter of guarantee, including deposit of RMB26,116,595.75 for accepted notes
and guarantee letter which are not regarded as cash equivalent at preparing of cash flow statement.
2. Transactional financial assets
(1) Transactional financial assets
In RMB
Item Closing fair value Opening fair value
(2) Transactional financial assets with realization limitation
In RMB
Sales condition or other realization
Item Closing amount
limitation
126
China Fangda Group Co., Ltd. 2012 Annual Report
(3) Notes to hedging tools and related hedging transactions
3. Notes receivable
(1) Classification of notes receivable
In RMB
Type Closing amount Opening amount
Bank acceptance 5,668,780.88 6,303,353.88
Commercial acceptance 1,970,000.00
Total 7,638,780.88 6,303,353.88
(2) Pledged notes receivable at the end of period
In RMB
Issuer Date of issue Expired on Amount Notes
(3) Notes of which the issuer is unable to perform and transferred into account receivable, and notes
endorsed to other parties but remaining immature
Notes transferred into account receivable due to the failure of the issuer to perform
In RMB
Issuer Date of issue Expired on Amount Notes
Notes
Notes endorsed to other parties but remaining immature
In RMB
Issuer Date of issue Expired on Amount Notes
Erdos Yixing
September 12,
Logistics Group March 12, 2013 1,000,000.00 Bank acceptance
2012
Co., Ltd.
Nanjing Xinjiekou
November 15,
Department Store May 15, 2013 1,000,000.00 Bank acceptance
2012
Co., Ltd.
PPG (Tianjin) Co., December 12m
March 17, 2013 1,000,000.00 Bank acceptance
Ltd 2012
Shandong Xintong
November 28,
Aluminum Co., February 9, 2013 907,277.00 Bank acceptance
2012
Ltd.
Henan Yongtong
October 18, 2012 March 28, 2013 880,000.00 Bank acceptance
Aluminum Co.,
127
China Fangda Group Co., Ltd. 2012 Annual Report
Ltd.
Total -- -- 4,787,277.00 --
Notes
Notes to discounted or pledge commercial acceptance
4. Receivable dividend
In RMB
Opening Closing
Item Increase Decrease Reason Impairment
amount amount
Including: -- -- -- -- -- --
Including: -- -- -- -- -- --
Notes
5. Receivable interest
(1) Receivable interest
In RMB
Item Opening amount Increase Decrease Closing amount
Band deposit
201,961.11 129,127.78 72,833.33
interest
Total 201,961.11 129,127.78 72,833.33
(2) Overdue interest
In RMB
Borrower Overdue time (day) Amount
(3) Notes to receivable interest
6. Account receivable
(1) Account receivable disclosed by categories
In RMB
Closing amount Opening amount
Remaining book Bad debt Remaining book
Type Bad debt provision
value provision value
Amount Proporti Amount Proporti Amoun Proporti Amount Proportio
128
China Fangda Group Co., Ltd. 2012 Annual Report
on (%) on (%) t on (%) n (%)
Account receivable
with major
individual amount 9,063,81 4,399,85
0.97% 48.54%
and bad debt 3.50 0.00
provision provided
individually
Account receivable for which bad debt provision is made by group
Including: 786,01
902,557, 132,330, 121,679,7
receivable out of 96.68% 14.66% 3,262.7 97.43% 15.48%
074.71 232.91 64.63
the consolidation 4
786,01
902,557, 132,330, 121,679,7
Subtotal 96.68% 14.66% 3,262.7 97.43% 15.48%
074.71 232.91 64.63
4
Account receivable
with minor
individual amount 21,956,5 21,956,5 20,731, 20,731,78
2.35% 100% 2.57% 100%
and bad debt 06.84 06.84 784.64 4.64
provision provided
individually
806,74
933,577, 158,686, 142,411,5
Total -- -- 5,047.3 -- --
395.05 589.75 49.27
8
Notes to account receivable
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 (inclusive) as
“individual receivable with large amount” while recognizes product receivables over RMB2 million
(included) as “individual receivable with large amount”.
Account receivable with major individual amount and bad debt provision provided individually at
the end of the period
√ Applicable □ Inapplicable
In RMB
Remaining Bad debt Providing rate
Description Reason
book value provision (%)
Provided based
Gulf international trading FZE 9,063,813.50 4,399,850.00 48.54% on the predicted
unrecoverable
129
China Fangda Group Co., Ltd. 2012 Annual Report
part according
to negotiation
with the
customer
Total 9,063,813.50 4,399,850.00 -- --
In the group, the account receivable of which bad debt provision is made through the account aging
method:
√ Applicable □ Inapplicable
In RMB
Closing amount Opening amount
Remaining book value Remaining book value
Age Bad debt Bad debt
Proporti provision Proporti provision
Amount Amount
on (%) on (%)
Less than 1 year
Including: -- -- -- -- -- --
Subtotal for
476,396,053.7
less than 1 457,699,537.55 49.03% 13,730,986.12 59.05% 14,291,881.61
2
year
1-2 years 239,346,914.90 25.64% 23,934,691.50 98,991,085.32 12.27% 9,899,108.54
2-3 years 40,453,779.30 4.33% 12,136,133.80 39,121,436.82 4.85% 11,736,431.05
171,504,686.8
Over 3 years 165,056,842.96 17.68% 82,528,421.49 21.26% 85,752,343.43
8
3-4 years 52,041,465.65 5.58% 26,020,732.82 46,442,957.34 5.75% 23,192,179.77
4-5 years 44,852,453.92 4.8% 22,426,226.96 46,031,564.00 5.71% 23,015,782.00
Over 5 years 68,162,923.39 7.3% 34,081,461.70 79,030,165.54 9.8% 39,544,381.66
786,013,262.7 121,679,764.6
Total 902,557,074.71 -- 132,330,232.91 --
4 3
Account receivable adopting the balance percentage method in the group
□ Applicable √ Inapplicable
Account receivable adopting other methods in the group
□ Applicable √ Inapplicable
Account receivable with minor individual amount and bad debt provision provided individually
√ Applicable □ Inapplicable
In RMB
Remaining book
Description Bad debt provision Providing rate (%) Reason
value
Aged over 5 years,
Trade receivable 803,340.45 803,340.45 100%
unlike to be
130
China Fangda Group Co., Ltd. 2012 Annual Report
recovered
Aged over 5 years,
Curtain wall
660,625.41 660,625.41 100% unlike to be
project payment
recovered
Litigation-related,
Curtain wall
634,619.39 634,619.39 100% unlikely to be
project payment
recovered
Aged over 5 years,
Trade receivable 563,320.60 563,320.60 100% unlike to be
recovered
Aged over 5 years,
Trade receivable 547,441.48 547,441.48 100% unlike to be
recovered
Aged over 5 years,
Trade receivable 487,785.66 487,785.66 100% unlike to be
recovered
Aged over 5 years,
Trade receivable 430,629.58 430,629.58 100% unlike to be
recovered
Aged over 5 years,
Trade receivable 378,425.30 378,425.30 100% unlike to be
recovered
Aged over 5 years,
Trade receivable 378,237.57 378,237.57 100% unlike to be
recovered
Aged over 5 years,
Trade receivable 354,177.00 354,177.00 100% unlike to be
recovered
Aged over 5 years,
Curtain wall
346,573.70 346,573.70 100% unlike to be
project payment
recovered
Aged over 5 years,
Curtain wall
316,861.34 316,861.34 100% unlike to be
project payment
recovered
Aged over 5 years,
Trade receivable 315,000.00 315,000.00 100% unlike to be
recovered
Aged over 5 years,
Curtain wall
300,000.00 300,000.00 100% unlike to be
project payment
recovered
131
China Fangda Group Co., Ltd. 2012 Annual Report
Subtotal of other
15,439,469.36 15,439,469.36 100%
minor receivables
Total 21,956,506.84 21,956,506.84 -- --
(2) Written-back or recovered account receivable during the report period
In RMB
Accumulative
Basis for
provided amount
recognition of Written-back or
Description Reason before the
original bad debt recovered amount
write-back or
provision
recovery
Bad debt provision for account receivable with major individual amount or with minor individual
amount but independent impairment test
In RMB
Remaining book
Description Bad debt amount Providing rate (%) Reason
value
Notes to account receivable with minor individual amount but triggering substantial risks after
being grouped
(3) Written-off account receivable during the report period
In RMB
Related
Entity Nature Time Amount Reason
transaction
Ji'an business
December 31,
department Loan 58,364.55 Unrecoverable No
2012
(Liu Dayan)
Shenzhen
Longhua
December 24,
Optical Loan 63,571.36 Unrecoverable No
2012
Electron Co.,
Ltd
Notes to written-off account receivable
(4) Shareholder holding 5% or above shares with voting rights of the Company and owing any
account receivable to the Company at the end of period
In RMB
Closing amount Opening amount
Entity
Remaining book Bad debt Remaining book Bad debt
132
China Fangda Group Co., Ltd. 2012 Annual Report
value provision value provision
amount amount
(5) Top 5 account receivable entities
In RMB
Percentage in the
Relationship with
Entity Amount Term total account
the Company
receivable (%)
Health & Holiday
Resort Apartment
Center of Sanya Non-affiliated
7,252,738.29 Less than 1 year 0.78%
Fenghuang Island party
Development Co.,
Ltd.
Health & Holiday
Resort Apartment
Center of Sanya Non-affiliated
37,316,362.17 1-2 years 4%
Fenghuang Island party
Development Co.,
Ltd.
China
Non-affiliated
International Fund 32,932,386.27 Less than 1 year 3.53%
party
Limited
China
Construction
Non-affiliated
Bureau III, No.1 31,316,556.02 1-2 years 3.35%
party
Construction Co.,
Ltd.
Chengdu Fulai
Real Estate Non-affiliated
29,837,569.76 Less than 1 year 3.2%
Development Co., party
Ltd.
Liuzhou
Dongcheng
Non-affiliated
Investment and 25,339,264.10 Less than 1 year 2.71%
party
Development Co.,
Ltd.
Total -- 163,994,876.61 -- 17.57%
133
China Fangda Group Co., Ltd. 2012 Annual Report
(6) Account receivable from affiliates
In RMB
Relationship with the Percentage in the total
Entity Amount
Company account receivable (%)
(7) De-recognized account receivable
In RMB
Gain or loss related to the
Item De-recognized amount
de-recognition
(8) Amounts of assets and liabilities involved continuously in securitization of account receivable
In RMB
Item Closing amount
Assets:
Liabilities:
7. Other receivables
(1) Other receivables disclosed by categories
In RMB
Closing amount Opening amount
Remaining book Bad debt Remaining book
Bad debt provision
Type value provision value
Proport Proport Proporti Proport
Amount Amount Amount Amount
ion (%) ion (%) on (%) ion (%)
Other receivables
with major
individual amount 1,220,316 1,220,316 1,220,316 1,220,316.
1.68% 100% 1.82% 100%
and bad debt .84 .84 .84 84
provision provided
individually
Other receivables for which bad debt provision is made by group
Including:
68,469,39 94.33 11,129,83 16.26 63,039,80 9,627,283. 15.27
receivable out of 93.91%
2.43 % 6.15 % 7.84 90 %
the consolidation
Subtotal 68,469,39 94.33 11,129,83 16.26 63,039,80 93.91% 9,627,283. 15.27
134
China Fangda Group Co., Ltd. 2012 Annual Report
2.43 % 6.15 % 7.84 90 %
Other receivables
with minor
individual amount 2,895,928 2,895,928 2,865,928 2,865,928.
3.99% 100% 4.27% 100%
and bad debt .16 .16 .16 16
provision provided
individually
72,585,63 15,246,08 67,126,05 13,713,528
Total -- -- -- --
7.43 1.15 2.84 .90
Notes to other receivables
Other receivables with an individual amount of RMB1 million (inclusive) are receivables with
major individual amount.
Other receivables with major individual amount and bad debt provision provided individually at the
end of the period
√ Applicable □ Inapplicable
In RMB
Remaining book
Description Bad debt amount Providing rate (%) Reason
value
Aged over 5 years,
Receivable deposit 1,220,316.84 1,220,316.84 100% unlike to be
recovered
Total 1,220,316.84 1,220,316.84 -- --
In the group, the other receivables of which bad debt provision are made through the account aging
method:
√ Applicable □ Inapplicable
In RMB
Closing amount Opening amount
Remaining book
Remaining book value
value
Age Bad debt Bad debt
Propo provision Propo provision
Amount rtion Amount rtion
(%) (%)
Less than 1 year
Including:
Subtotal for less 43.15 55.8
31,319,141.04 942,761.14 37,459,135.30 1,123,917.85
than 1 year % %
25.64 13.64
1-2 years 18,616,091.35 1,861,609.14 9,156,077.06 915,607.70
% %
2-3 years 4,708,070.26 6.49 1,412,421.08 3,122,696.47 4.65 936,808.94
135
China Fangda Group Co., Ltd. 2012 Annual Report
% %
19.05 19.82
Over 3 years 13,826,089.78 6,913,044.79 13,301,899.01 6,650,949.41
% %
7.86 7.99
3-4 years 5,706,414.81 2,949,520.79 5,362,196.23 2,681,098.02
% %
3.06 3.17
4-5 years 2,220,633.18 1,110,316.59 2,124,964.42 1,062,482.21
% %
8.13 8.66
Over 5 years 5,899,041.78 2,853,207.41 5,814,738.36 2,907,369.18
% %
Total 68,469,392.43 -- 11,129,836.15 63,039,807.84 -- 9,627,283.90
Other receivables adopting the balance percentage method in the group
□ Applicable √ Inapplicable
Other receivables adopting other methods in the group
□ Applicable √ Inapplicable
Other receivables with minor individual amount and bad debt provision provided individually
√ Applicable □ Inapplicable
In RMB
Remaining book
Description Bad debt provision Providing rate (%) Reason
value
Aged over 5 years,
Receivable deposit 300,000.00 300,000.00 100% unlike to be
recovered
Aged over 5 years,
Receivable deposit 224,875.84 224,875.84 100% unlike to be
recovered
Aged over 5 years,
Receivable deposit 159,800.00 159,800.00 100% unlike to be
recovered
Aged over 5 years,
Receivable deposit 150,000.00 150,000.00 100% unlike to be
recovered
Aged over 5 years,
Receivable deposit 101,282.55 101,282.55 100% unlike to be
recovered
Aged over 5 years,
Total of other
1,959,969.77 1,959,969.77 100% unlike to be
small amounts
recovered
Total 2,895,928.16 2,895,928.16 -- --
136
China Fangda Group Co., Ltd. 2012 Annual Report
(2) Written-back or recovered other receivables during the report period
In RMB
Accumulative
Basis for
provided amount
recognition of Written-back or
Description Reason before the
original bad debt recovered amount
write-back or
provision
recovery
Bad debt provision for other receivables with major individual amount or with minor individual
amount but independent impairment test
In RMB
Remaining book
Description Bad debt amount Providing rate (%) Reason
value
Notes to other receivables with minor individual amount but triggering substantial risks after being
grouped
(3) Written-off other receivables during the report period
In RMB
Related
Entity Nature Time Amount Reason
transaction
Notes to written-off other receivables
(4) Shareholder holding 5% or above shares with voting rights of the Company and owing any other
receivables to the Company at the end of period
In RMB
Closing amount Opening amount
Entity Bad debt Bad debt
Remaining book Remaining book
provision provision
value value
amount amount
(5) Nature and description of major other receivables
In RMB
Nature or Percentage in the total other
Entity Amount
description receivables (%)
Notes
137
China Fangda Group Co., Ltd. 2012 Annual Report
(6) Top 5 other receivable entities
In RMB
Percentage in the
Relationship with
Entity Amount Term total other
the Company
receivables (%)
Zhejiang Jiayue Non-affiliated
6,898,000.00 Less than 1 year 9.5%
Industrial Co., Ltd. party
Non-affiliated
Xin Song 1,150.00 1-2 years 0%
party
Non-affiliated
Xin Song 1,433,887.00 2-3 years 1.98%
party
Non-affiliated
Xin Song 1,290,290.61 Over 3 years 1.77%
party
Cixi Greentown
Real Estate Non-affiliated
2,278,926.90 1-2 years 3.14%
Development Co., party
Ltd.
Non-affiliated
Wang Weihong 2,247,209.98 1-2 years 3.1%
party
Zhangjiakou
Investment and Non-affiliated
2,120,543.15 1-2 years 2.92%
Commercial party
Center
Total -- 16,270,007.64 -- 22.41%
(7) Other receivables from affiliates
In RMB
Relationship with the Percentage in the total
Entity Amount
Company other receivables (%)
Total -- 16,270,007.64 22.41%
(8) De-recognized other receivables
In RMB
Gain or loss related to the
Item De-recognized amount
de-recognition
138
China Fangda Group Co., Ltd. 2012 Annual Report
(9) Amounts of assets and liabilities involved continuously in securitization of other receivables
In RMB
Item Closing amount
Assets:
Liabilities:
8. Prepayment
(1) Account age of prepayments
In RMB
Closing amount Opening amount
Age Proportio Proportio
Amount Amount
n (%) n (%)
Less than 1
19,468,827.77 84.33% 23,321,608.14 91.66%
year
1-2 years 1,166,643.73 5.1% 978,242.79 3.84%
2-3 years 373,124.18 1.75% 264,158.92 1.04%
Over 3
997,563.54 8.82% 880,359.96 3.46%
years
Total 22,006,159.22 -- 25,444,369.81 --
Notes to account age of prepayments
84% of prepayments are aged less than 1 year.
(2) Top 5 prepayment entities
In RMB
Relationship with
Entity Amount Time Reason
the Company
Wujiang Nanbo
Non-affiliated Transaction
Engineering Glass 2,003,280.43
party unfinished
Co., Ltd.
Litong Aluminum
Industry Non-affiliated Goods not
1,700,400.06
(Guangdong) Co., party delivered
Ltd.
Shanghai Chifei Non-affiliated
1,570,281.30 Unsettled
Industrial Co., Ltd. party
139
China Fangda Group Co., Ltd. 2012 Annual Report
Qinghuangdao
Wanxiang Non-affiliated Unsettled quality
1,070,751.02
Aluminum Co., party dispute
Ltd.
Jiangsu Kaiteer
New-type Non-affiliated Transaction
853,628.80
Decorative party unfinished
Materials Co., Ltd.
Total -- 7,198,341.61 -- --
Notes to major prepayment entities
(3) Shareholders holding 5% or above shares with voting rights of the Company and involved in
any prepayment of the Company at the end of period
In RMB
Closing amount Opening amount
Entity Bad debt Bad debt
Remaining book Remaining book
provision provision
value value
amount amount
(4) Notes to prepayment
9. Inventories
(1) Classification of inventories
In RMB
Closing amount Opening amount
Item Remaining Depreciatio Remaining Depreciation
Book value Book value
book value n provision book value provision
1,474,828.1 41,951,443.8 37,888,262.6 37,526,360.2
Raw materials 43,426,271.98 361,902.41
1 7 4 3
Product in 16,207,626.7 16,207,626.7
6,219,310.56 6,219,310.56
process 8 8
Finished goods 1,984,145.1 14,367,024.0 10,757,841.8
10,455,612.27 8,471,467.16 3,609,182.26
in stock 1 8 2
Asset formed
212,353,564.6 2,014,344. 210,339,220. 183,792,677. 183,792,677.
by construction
5 59 06 32 32
contract
Low price
8,043.45 8,043.45 263.29 263.29
consumable
140
China Fangda Group Co., Ltd. 2012 Annual Report
OEM materials 2,130,706.26 2,130,706.26 624,811.54 624,811.54
Materials in
5,430,367.04 5,430,367.04
transit
Goods
79,959.06 79,959.06
delivered
274,593,509.1 5,473,317. 269,120,191. 258,390,991. 254,419,907.
Total 3,971,084.67
7 81 36 75 08
(2) Inventory depreciation provision
In RMB
Opening Provision made Decrease
Closing balance
Item balance of book in the current
Write-back Write-off of book value
value period
Raw materials 361,902.41 1,520,419.78 407,494.08 1,474,828.11
Finished goods
3,609,182.26 2,312,280.05 3,937,317.20 1,984,145.11
in stock
Asset formed by
construction 2,177,084.57 162,739.98 2,014,344.59
contract
Total 3,971,084.67 6,009,784.40 4,507,551.26 5,473,317.81
(3) Inventory depreciation provision
Proportion of
written-back amount in
Item Basis Reason
the closing balance of
the inventory item (%)
Realizable net value is
Raw materials lower the realizable
cost
Realizable net value is
Finished goods in stock lower the realizable
cost
Asset formed by Predicted construction
construction contract contract loss
Notes to inventory
The depreciation provision made for assets generated by construction contracts in the current period
is mainly attributable to the full Hainan Tianyi engineering costs of Shenyang Fangda, a subsidiary
of the Company.
141
China Fangda Group Co., Ltd. 2012 Annual Report
10. Other current assets
In RMB
Item Closing amount Opening amount
Notes to other current assets
11. Sellable financial assets
(1) Sellable financial assets
In RMB
Item Closing fair value Opening fair value
Sellable equity instruments 2,198,000.00
Total 2,198,000.00
No investment held until mature is reclassified as sellable financial assets in the period.
Notes to sellable financial assets
The Company sold the 700,000.00 tradable shares in Tianjin Global Magnetic Card Co., Ltd. in the
current period.
(2) Long-term creditor's investment in sellable financial assets
In RMB
Accumula
tive
Initial
Expired Opening receivable Closing
Item Type Par value investmen Interest
on balance and balance
t cost
received
interest
Notes to long-term creditor's investment in sellable financial assets
12. Investment held until mature
(1) Investment held until mature
In RMB
Item Closing balance of book value Opening balance of book value
Notes to investment held until mature
(2) Investment held until mature remaining immature and sold in the report period
In RMB
142
China Fangda Group Co., Ltd. 2012 Annual Report
Proportion in the amount before the
Item Amount
sales (%)
Notes to investment held until mature remaining immature and sold in the report period
13. Long-term receivables
In RMB
Type Closing amount Opening amount
14. Investment in joint venture and associated companies
In RMB
Property of
voting Net profit
Name of Closing Closing Total
Shareholdi rights of Closing of the
invested total total net operating
ng (%) the total assets current
entity liabilities assets revenue
Company period
(%)
1. Joint venture
2. Associated company
Notes to major differences between the significant accounting policies of joint ventures and
associated companies and the accounting policies and estimates of the Company
15. Long-term share equity investment
(1) Details of long-term share equity investment
In RMB
Notes
to
inconsi
Proport
stence
Shareh ion of
betwee Provisi
olding voting Impair Cash
Invest Openin Closin n the on
Investe Audit in the rights ment dividen
ment g Change g shareh made
d entity method investe in the provisi d in the
cost balance balance olding in this
d entity investe on period
and period
(%) d entity
voting
(%)
right
proport
ion
143
China Fangda Group Co., Ltd. 2012 Annual Report
(2) Restriction for transfer of capital to invested companies
In RMB
Long-term share equity
investment of which the transfer Accumulative unrecognized loss
Reason
of capital to invested companies in the current period
is restricted
Notes to long-term share equity investment
16. Investment real estates
(1) Investment real estate measured at costs
In RMB
Opening balance of Closing balance of
Item Increase Decrease
book value book value
I Original total
4,428,890.85 4,428,890.85
book value
1. Houses &
4,428,890.85 4,428,890.85
buildings
II Accumulative
total depreciation 789,385.09 789,385.09
and amortization
1. Houses &
789,385.09 789,385.09
buildings
III Total net
book value of
3,639,505.76 3,639,505.76
investment real
estate
1. Houses &
3,639,505.76 3,639,505.76
buildings
IV Total book
value of
3,639,505.76 3,639,505.76
investment real
estate
1. Houses &
3,639,505.76 3,639,505.76
buildings
In RMB
Current period
Depreciation and amortized amount for the current 38,327.08
144
China Fangda Group Co., Ltd. 2012 Annual Report
period
Impairment provision for investment real estate for the
0.00
current period
(2) Investment real estate measured at fair value
In RMB
Increase Decrease
Transferr Gain/loss Closing
Opening ed from caused by Transferr
Item fair
fair value Purchase own use changes Disposal ed to own
d value
or in fair use
inventory value
184,908, 1,821,93 4,363,68 24,169,06 158,197,
1. Total costs
305.38 0.12 2.00 5.10 488.40
184,908, 1,821,93 4,363,68 24,169,06 158,197,
(1) Houses & buildings
305.38 0.12 2.00 5.10 488.40
2. Total changes in fair 92,797,6 13,791,1 1,500,30 8,519,710 96,568,7
value 43.97 34.22 0.00 .26 67.93
92,797,6 13,791,1 1,500,30 8,519,710 96,568,7
(1) Houses & buildings
43.97 34.22 0.00 .26 67.93
3. Total book value of 277,705, 1,821,93 13,791,1 5,863,98 32,688,77 254,766,
investment real estate 949.35 0.12 34.22 2.00 5.36 256.33
277,705, 1,821,93 13,791,1 5,863,98 32,688,77 254,766,
(1) Houses & buildings
949.35 0.12 34.22 2.00 5.36 256.33
State the investment properties which have changed the measurement basis and those which are not
licensed yet. State the reason and expected completion date.
(1) Transfer of real estate and change of measurement basis
1. The investment real estate measured at costs increases by RMB4,428,890.85 as the
workshop No.1 and No.4 located in Fangda High-Tech Party on the Gaoxin Avenue,
Nanchang were changed from own use to lease;
2. The investment real estate measured at fair value increases by RMB1,821,930.12 as the
room 802 of Fangda Science & Technology Building is changed from own use to lease as
approved at the 9th meeting of the 6th term of the Board of the Company;
3. The investment real estate measured at fair value increases by RMB32,688,775.36 as the entire
18th floor of the Fangda Science & Technology Building was changed to own use as approved at the
9th meeting of the 6th term of the Board of the Company and as the 5th and 15th floors were changed
to own use as approved at the 17th meeting of the 6th term of the Board of the Company.
145
China Fangda Group Co., Ltd. 2012 Annual Report
(2) Failure to obtain the ownership certificate
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. The property will be renovated and the Company will not
apply for the property certification.
17. Fixed assets
(1) Fixed assets
In RMB
Opening Closing
Item balance of Increase Decrease balance of
book value book value
1. Original total book 522,610,516.8 579,485,800.9
65,918,690.85 9,043,406.74
value: 0 1
245,739,655.7 287,520,705.0
Houses & buildings 49,320,417.75 7,539,368.44
4 5
Equipment & 227,823,431.0 237,818,748.4
10,259,628.14 264,310.80
machinery 8 2
Transportation 12,354,809.80 3,984,508.53 552,712.00 15,786,606.33
facilities
Electronics and other
36,692,620.18 2,354,136.43 687,015.50 38,359,741.11
devices
Opening
Closing
-- balance of Increase Provision Decrease
balance
book value
2. Total accumulative 203,584,092.1 222,752,425.1
21,420,734.92 2,252,401.87
depreciation: 3 8
Houses & buildings 33,398,583.72 6,897,132.95 971,227.44 39,324,489.23
Equipment & 144,632,453.3 154,763,867.2
10,294,231.56 162,817.63
machinery 3 6
Transportation 7,621,039.34 1,182,323.92 497,440.80 8,305,922.46
facilities
Electronics and other 17,932,015.74 3,047,046.49 620,916.00 20,358,146.23
146
China Fangda Group Co., Ltd. 2012 Annual Report
devices
Opening
Closing
-- balance of --
balance
book value
3. Total net fixed 319,026,424.6 356,733,375.7
--
assets book value 7 3
212,341,072.0 248,196,215.8
Houses & buildings --
2 2
Equipment &
83,190,977.75 -- 83,054,881.16
machinery
Transportation 4,733,770.46 -- 7,480,683.87
facilities
Electronics and other
18,760,604.44 -- 18,001,594.88
devices
5. Total impairment
2,251,026.09 -- 15,177,565.52
provision
Houses & buildings 853,819.00 -- 1,131,563.50
Equipment &
1,397,207.09 -- 14,046,002.02
machinery
Electronics and other
--
devices
5. Total fixed assets 316,775,398.5 341,555,810.2
--
book value 8 1
211,487,253.0 247,064,652.3
Houses & buildings --
2 2
Equipment &
81,793,770.66 -- 69,008,879.14
machinery
Transportation 4,733,770.46 -- 7,480,683.87
facilities
Electronics and other
18,760,604.44 -- 18,001,594.88
devices
The depreciation amounts to RMB21,420,734.92. The original value of transfer of construction
progress into the fixed original assets amounts to RMB25,117,936.15.
(2) Temporary idle fixed assets
In RMB
147
China Fangda Group Co., Ltd. 2012 Annual Report
Accumulative Impairment
Item Book value Net book value Notes
depreciation provision
Houses &
46,273,742.05 2,362,418.01 277,744.50 43,633,579.54
buildings
Equipment &
105,585,374.34 61,097,276.35 12,648,794.93 31,839,303.06
machinery
Transportation
926,291.99 526,960.26 399,331.73
facilities
Electronics and
7,826,686.65 3,926,690.43 3,899,996.22
other devices
(3) Fixed assets leased through financial leasing
In RMB
Accumulative
Item Book value Net book value
depreciation
Electronics and other
24,500.00 4,397.40 20,102.60
devices
(4) Fixed assets lend through financial leasing
In RMB
Type Closing book value
(5) Fixed assets held for sales at the end of the period
In RMB
Estimated disposal Estimated disposal
Item Book value Fair value
expense time
(6) Fixed assets without ownership certificate
Estimated time to obtain the
Item Reason
certificate
Houses in Urumuqi for
Historical reasons
offsetting debt
2. Complex on the Beihuan
Road, Nanshan District, To be renovated
Shenzhen
3. Office building on the To be renovated
148
China Fangda Group Co., Ltd. 2012 Annual Report
Beihuan Road, Nanshan
District, Shenzhen
4. No.5 automatic screen door
factory, Nanchang Fangda The certificate can be obtained
Applying for
High-tech park of Fangda in 2013
Automatic
5. Houses in Dalian of Fangda The certificate can be obtained
Negotiation
Decoration for offsetting debt in 2014
6. No.2 factory on Beihuan
Road, Nanshan District, To be renovated
Shenzhen
7. No.3 factory on Beihuan
Road, Nanshan District, To be renovated
Shenzhen
8. Shenyang Fangda extension
Entering into liquidation
workshop
9. Shenyang Fangda dorm and
Entering into liquidation
workshop 2#
10. Dinning hall and power
Entering into liquidation
station of Shenyang Fangda
Notes to fixed assets
As the Company plans to renovate the Fangda Town, it will not apply for ownership certificates for
properties without the property ownership certificate on the Beihuan Road, Nanshan District,
Shenzhen.
18.Construction in process
(1) Construction in process
In RMB
Closing amount Opening amount
Item Remaining Impairment Remaining Impairment
Book value Book value
book value provision book value provision
Nanchang Fangda
Technology Garden 3,597,740.
3,597,740.17
Automatic PSD 17
Workshop
Dongguan Songshan
173,369,43 173,369,43 72,128,582 72,128,582.3
Lake Fangda Southern
0.56 0.56 .31 1
Technology Garden
149
China Fangda Group Co., Ltd. 2012 Annual Report
2,557,696.
Painting line 2,557,696.60
60
Bacterium of spraying 2,324,786.
2,324,786.32
system 32
Gas project 669,225.64 669,225.64
Fangda Town 1,701,315.0 1,701,315.
reconstruction project 0 00
Installation of
machines and 67,948.72 67,948.72 521,865.39 521,865.39
equipment
175,138,69 175,138,69 81,799,896 81,799,896.4
Total
4.28 4.28 .43 3
(2) Changes in major construction in process
In RMB
Propor Includi
tion of Accu ng:
Interes
Transf engine mulati capital
Openi t Closin
erred Other ering Project ve ized Capita
Budge ng Increa capital g
Name into decrea invest progre capital interes l
t amoun se ization amoun
fixed se ment ss ized t for source
t rate t
assets in the interes the
(%)
budget t current
(%) period
Nanch
ang
Fangd
a
Techn Raised
ology 14,306 13,339 16,937 and
3,597, 118.39
Garde ,990.1 ,920.7 ,660.9 100.00 self-rai
740.17 %
n 7 6 3 sed
Autom fund
atic
PSD
Works
hop
Dongg Raised
197,10 72,128 101,24 173,36
uan 87.96 and
2,366. ,582.3 0,848. 96.97 9,430.
Songs % self-rai
05 1 25 56
han sed
150
China Fangda Group Co., Ltd. 2012 Annual Report
Lake fund
Fangd
a
Southe
rn
Techn
ology
Garde
n
211,40 75,726 114,58 16,937 173,36
Total 9,356. ,322.4 0,769. ,660.9 -- -- -- -- 9,430.
22 8 01 3 56
Notes to change in construction in process
(3) Impairment provisions for construction in process
In RMB
Opening
Item Increase Decrease Closing amount Reason
amount
(4) Progress of major construction in process
Item Project progress Notes
(5) Notes to construction in process
19. Engineering materials
In RMB
Opening
Item Increase Decrease Closing amount
amount
Notes to engineering materials
20. Disposal of fixed assets
In RMB
Opening book
Item Closing book value Reason for disposal
value
Progress of fixed assets to be disposed for over one year
151
China Fangda Group Co., Ltd. 2012 Annual Report
21. Productive biological assets
(1) Measured at costs
In RMB
Opening balance Closing balance of
Item Increase Decrease
of book value book value
1. Planting
2. Livestock raising
3. Forestry
4. Fishery
(2) Measured at fair value
In RMB
Opening book Closing book
Item Increase Decrease
value value
1. Planting
2. Livestock raising
3. Forestry
4. Fishery
Notes to productive biological assets
22. Petroleum assets
In RMB
Opening balance Closing balance
Item Increase Decrease
of book value of book value
Notes to petroleum assets
23. Intangible assets
(1) Intangible assets
In RMB
Opening balance Closing balance
Item Increase Decrease
of book value of book value
1. Original total book
138,877,554.27 1,897,193.27 37,409.40 140,737,338.14
value
Land using rights of 8,543,250.00 8,543,250.00
152
China Fangda Group Co., Ltd. 2012 Annual Report
Fangda Town (phase
I) (Note 4)
Land using rights of
Fangda Town (phase 4,783,050.00 4,783,050.00
III) (Note 5)
Land using rights of
Fangda Tech Garden
11,064,548.41 11,064,548.41
on Gaoxin Road
Nanchang (Note 6)
Land using rights of
Shenyang Fangda 42,038,791.23 42,038,791.23
(Note 7)
Dongguan land using
40,041,465.75 40,041,465.75
rights (note 3)
Patent and classified
27,885,795.89 166,525.00 28,052,320.89
tech
Computer software 4,520,652.99 1,730,668.27 37,409.40 6,213,911.86
2. Total accumulative
28,277,599.00 4,557,857.66 4,364.50 32,831,092.16
amortization
Land using rights of
Fangda Town (phase 4,046,999.12 160,054.48 4,207,053.60
I) (Note 4)
Land using rights of
Fangda Town (phase 1,426,943.25 95,661.00 1,522,604.25
III) (Note 5)
Land using rights of
Fangda Tech Garden
1,433,622.22 232,595.24 1,666,217.46
on Gaoxin Road
Nanchang (Note 6)
Land using rights of
Shenyang Fangda 3,426,350.10 840,775.82 4,267,125.92
(Note 7)
Dongguan land using
867,565.14 800,829.36 1,668,394.50
rights (note 3)
Patent and classified
15,199,269.02 1,881,228.88 17,080,497.90
tech
Computer software 1,876,850.15 546,712.88 4,364.50 2,419,198.53
3. Total net intangible
110,599,955.27 -2,660,664.39 33,044.90 107,906,245.98
assets book value
153
China Fangda Group Co., Ltd. 2012 Annual Report
Land using rights of
Fangda Town (phase 4,496,250.88 -160,054.48 4,336,196.40
I) (Note 4)
Land using rights of
Fangda Town (phase 3,356,106.75 -95,661.00 3,260,445.75
III) (Note 5)
Land using rights of
Fangda Tech Garden
9,630,926.19 -232,595.24 9,398,330.95
on Gaoxin Road
Nanchang (Note 6)
Land using rights of
Shenyang Fangda 38,612,441.13 -840,775.82 37,771,665.31
(Note 7)
Dongguan land using
39,173,900.61 -800,829.36 38,373,071.25
rights (note 3)
Patent and classified
12,686,526.87 -1,714,703.88 10,971,822.99
tech
Computer software 2,643,802.84 1,183,955.39 33,044.90 3,794,713.33
4. Total impairment
5,525,863.77 5,525,863.77
provision
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)
Dongguan land using
rights (note 3)
Patent and classified
5,525,863.77 5,525,863.77
tech
Computer software
Total book value of
110,599,955.27 -8,186,528.16 33,044.90 102,380,382.21
intangible assets
154
China Fangda Group Co., Ltd. 2012 Annual Report
Land using rights of
Fangda Town (phase 4,496,250.88 -160,054.48 4,336,196.40
I) (Note 4)
Land using rights of
Fangda Town (phase 3,356,106.75 -95,661.00 3,260,445.75
III) (Note 5)
Land using rights of
Fangda Tech Garden
9,630,926.19 -232,595.24 9,398,330.95
on Gaoxin Road
Nanchang (Note 6)
Land using rights of
Shenyang Fangda 38,612,441.13 -840,775.82 37,771,665.31
(Note 7)
Dongguan land using
39,173,900.61 -800,829.36 38,373,071.25
rights (note 3)
Patent and classified
12,686,526.87 -1,714,703.88 5,445,959.22
tech
Computer software 2,643,802.84 -4,341,908.38 33,044.90 3,794,713.33
The total amortization amounts to RMB4,557,857.66.
(2) Development project expenses
In RMB
Decrease
Opening Accounted into Recognized as Closing amount
Item Increase
amount current income intangible
account assets
The share of R&D expenses in the total cost of R&D
The share of intangible asset formed by internal R&D of the period in the closing total book value
of intangible assets
Statement on R&D projects, including single account over RMB1 million basing on evaluation
results. Please provide the evaluation body and basis of evaluation
24. Goodwill
In RMB
Closing
Invested entity or item of Opening Closing
Increase Decrease impairment
goodwill balance balance
provision
Shenzhen Woke 8,197,817.29 8,197,817.29 8,197,817.2
155
China Fangda Group Co., Ltd. 2012 Annual Report
9
Fangda Yide 746,519.62
8,944,336.9
Total 8,197,817.29 8,197,817.29
1
Basis for impairment testing and provision of goodwill
Notes:
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. As the parent Shenyang Fangda has been liquidated according to the
resolution of the Shareholders’ Meeting, the company's business has been suspended. As
obvious impairment has been caused, the goodwill was fully used to make the impairment
provision this year.
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.
25. Long-term amortizable expenses
In RMB
Reason for
Opening Other Closing
Item Increase Amortized other
amount decrease amount
decrease
Epoxy floor 1,396,350.00 46,839.00 160,653.35 1,282,535.65
Factory
decoration of
1,532,900.00 51,096.66 1,481,803.34
Fangda
Automatic
Upgrading of
workshop
rented by
Fangda 584,482.05 65,549.39 518,932.66
Decoration
Nanchang
Branch
Upgrading of 484,575.87 138,636.40 345,939.47
156
China Fangda Group Co., Ltd. 2012 Annual Report
workshop
rented by
Fangda
Decoration
Upgrading of
workshop
rented by
Fangda 134,787.38 3,000.00 104,090.56 33,696.82
Decoration
Sanhe
Branch
Office room
decoration of
258,361.30 60,284.30 198,077.00
Chengdu
Fangda
Coating
factory of
90,600.00 34,514.29 56,085.71
Chengdu
Fangda
Hardware
warehouse
maintenance 90,781.20 25,217.00 65,564.20
of Chengdu
Fangda
Kingdee
after-sales
service of 75,471.70 75,471.70
Fangda
Group
Jinshan
factory
renovation of
Fangda 595,569.50 24,815.40 570,754.10
Decoration
Shanghai
Branch
Foundation
of Chengdu 52,059.26 52,059.26
Fangda
Dormitory
decoration of 82,000.00 82,000.00
Fangda
157
China Fangda Group Co., Ltd. 2012 Annual Report
Automatic
Total 2,600,195.30 2,827,581.96 716,916.61 4,710,860.65 --
Notes to long-term amortizable expenses
Notes:
1. The amortization of long-term amortizable expenses amounts to RMB716,916.61.
2. The closing long-term amortizable expenses are up 81.17% from the opening expenses, mainly
due to the expense of RMB1,614,900.00 for upgrading of workshop rented by Fangda Decoration
Nanchang Branch; and the expense of RMB 595,569.50 for construction of the Jinshan factory of
Fangda Decoration Shanghai Branch.
26. Deferred income tax assets and deferred income tax liabilities
(1) Deferred income tax assets and liabilities are not presented as net amount after neutralization
Recognized deferred income tax assets and liabilities
In RMB
Item Closing amount Opening amount
Deferred income tax assets:
Assets impairment provision 32,418,119.65 29,413,806.15
Opening expense 5,766.40
Deductible loss 1,230,904.81 2,887,267.88
Unrealizable gross profit 999,329.06
Anticipated liabilities 63,149.39
Reserved expense 1,126,545.59 978,405.58
Reserved wage 416,485.98 289,342.19
Subtotal 36,191,385.09 33,637,737.59
Deferred income tax liabilities:
Adjustment of fair value of
36,210,286.40 32,148,137.16
investment real estate
Adjustment of fair value of sellable
449,500.00
financial assets
Subtotal 36,210,286.40 32,597,637.16
Details of unrecognized deferred income tax assets
In RMB
Item Closing amount Opening amount
Deductible temporary difference 68,279,939.00 28,784,639.04
158
China Fangda Group Co., Ltd. 2012 Annual Report
Deductible loss 67,503,116.48 58,123,591.73
Total 135,783,055.48 86,908,230.77
Deductible losses of the un-recognized deferred income tax asset will expire in the following years
In RMB
Year Closing amount Opening amount Notes
2012 10,378,557.33
2013 9,604,482.62 10,026,221.51
2014 7,864,870.78 7,864,870.78
2015 7,695,652.54 7,695,652.54
2016 22,158,289.57 22,158,289.57
2017 20,179,820.97
Total 67,503,116.48 58,123,591.73 --
Details of taxable differences and deductible differences
In RMB
Temporary difference
Item
End of the period Beginning of the period
Differences in taxable items
Adjustment of fair value of investment
144,841,145.61 129,689,276.00
real estate
Adjustment of fair value of sellable
1,798,000.00
financial assets
Subtotal 144,841,145.61 131,487,276.00
Deductible different items
Assets impairment provision 191,819,859.24 170,659,472.15
Deductible loss 5,578,451.34 11,549,071.51
Unrealizable gross profit 4,288,919.75
Reserved expense 5,874,734.27 5,007,105.42
Reserved wage 2,776,573.23 2,314,737.55
Anticipated liabilities 420,995.96
Opening expense 38,442.67
Subtotal 210,338,537.83 189,989,825.26
(2) Deferred income tax assets and liabilities are presented as net amount after neutralization
Items of combination of deferred income tax assets and liabilities after deduction
In RMB
159
China Fangda Group Co., Ltd. 2012 Annual Report
Deferred Deductible or
Deferred Deductible or
income tax taxable
income tax taxable
assets or temporary
assets or temporary
liabilities after difference after
Item liabilities after difference after
the deduction at the deduction at
the deduction at the deduction at
the beginning the beginning
the end of the the end of the
of the report of the report
report period report period
period period
Deferred income tax assets 36,191,385.09 33,637,737.59
Deferred income tax liabilities 36,210,286.40 32,597,637.16
Details of deduction between the deferred income tax assets and liabilities
In RMB
Item Deducted amount
Notes to deferred income tax assets and liabilities
27. Details of assets impairment provision
In RMB
Opening Decrease Closing
Item balance of Increase balance of
book value Write-back Write-off book value
157,096,465.4 175,018,461.3
1. Bad debt provision 18,213,088.26 158,980.60 132,111.72
1 5
2. Inventory
3,971,084.67 6,009,784.40 4,507,551.26 5,473,317.81
depreciation provision
7. Fixed assets
2,251,026.09 12,926,539.43 15,177,565.52
impairment provision
12. Intangible assets
5,525,863.77 5,525,863.77
impairment provision
13. Goodwill
746,519.62 8,197,817.29 8,944,336.91
impairment provision
164,065,095.7 210,139,545.3
Total 50,873,093.15 158,980.60 4,639,662.98
9 6
Notes to details of assets impairment
28. Other non-current assets
In RMB
Item Closing amount Opening amount
Notes to other non-current assets
160
China Fangda Group Co., Ltd. 2012 Annual Report
29. Short-term borrowings
(1) Classification of short-term borrowings
In RMB
Item Closing amount Opening amount
Loan by pledge 1,970,000.00 177,000,000.00
Guarantee loan 177,000,000.00
Borrowings with security and
210,000,000.00
guarantee
Borrowings with security and
180,000,000.00
security
Total 181,970,000.00 387,000,000.00
Notes to classification of short-term borrowings
Notes:
1. At the end of the period, the borrowings with security and security of RMB180 million are
pledged with Fangda Science & Technology Building (with a pledge limit of
RMB112,530,000). The remaining RMB67,467,900 is borrowed by credit.
2. The remaining pledge borrowing amounts to RMB1.97 million at the end of the period,
pledged by discounting the commercial acceptance with recourse of the Fangda
Decoration;
3. The short-term borrowings decreased 52.98% from that in the beginning of the period as
the Company issued new short-term financing bonds to repay band borrowings.
(2) Mature but not repaid short-term borrowings
In RMB
Estimated
Borrower Amount Interest rate Use Reason
repayment term
No amount is repaid after the balance sheet day.
Statement on short-term loans, including due but extended short-term loans, the extending
conditions and extended expiration date
30. Transactional financial liabilities
In RMB
Item Closing fair value Opening fair value
Notes to transactional financial liabilities
161
China Fangda Group Co., Ltd. 2012 Annual Report
31. Notes payable
In RMB
Type Closing amount Opening amount
Commercial acceptance 20,537,464.06 7,373,068.26
Bank acceptance 140,242,312.97 31,684,990.21
Total 160,779,777.03 39,058,058.47
Amount due in next fiscal term will be RMB160,779,777.03.
Notes to notes payable
The amount of outstanding notes has increased 311.64% at the end of the period from the beginning,
which was caused by the increase of band acceptance settlement the Fangda Decoration, Fangda
New Material and Fangda Automatic.
32. Account payable
(1) Account payable
In RMB
Item Closing amount Opening amount
Trade payable 275,758,548.18 217,554,998.46
Construction payable 19,344,300.41 9,760,197.62
Installation service payable 109,523,707.17 95,797,692.44
Others 7,219,475.96 1,227,119.63
Total 411,846,031.72 324,340,008.15
(2) Accounts payable to shareholders holding 5% or above shares with voting rights of the
Company in the report period
In RMB
Entity Closing amount Opening amount
(3) Notes to large accounts payable aged over one year
33. Prepayment
(1) Prepayment
In RMB
Item Closing amount Opening amount
Engineering payment 70,888,842.64 119,560,552.08
162
China Fangda Group Co., Ltd. 2012 Annual Report
Material loan 6,099,951.68 4,697,067.10
Others 753,108.70 693,045.60
Total 77,741,903.02 124,950,664.78
(2) Prepayments from shareholders holding 5% or above shares with voting rights of the Company
in the report period
In RMB
Entity Closing amount Opening amount
(3) Notes to large prepayments aged over one year
34. Employees’ wage payable
In RMB
Opening balance Closing balance of
Item Increase Decrease
of book value book value
1. Wage, bonus,
allowance and 17,481,799.52 118,442,801.36 114,356,876.34 21,567,724.54
subsidies
2. Employee
3,232,442.51 3,232,442.51
welfare
3. Social
52.50 9,470,546.61 9,470,599.11
insurance
Including:
medical 12.60 2,512,369.23 2,512,381.83
insurance
Basic pension 36.75 5,953,475.19 5,953,511.94
Unemployment
0.52 412,861.46 412,861.98
insurance
Labor injury
1.58 369,061.90 369,063.48
insurance
Breeding
1.05 222,778.83 222,779.88
insurance
4. Housing
3,389,395.54 3,389,395.54
fund
6. Others 2,951,114.00 739,516.17 1,313,082.16 2,377,548.01
Total 20,432,966.02 135,274,702.19 131,762,395.66 23,945,272.55
The Company does not own any wage to employees.
163
China Fangda Group Co., Ltd. 2012 Annual Report
The work union fund and staff education fund amount to RMB2,377,548.01 without a
non-monetary welfare amount of 0 and compensation for termination of employment of
RMB511,385.00.
Time of payment of wage payable to employees and amount
1. The wage for December 2012 and annual bonus for 2012 are reserved in the balance of
employees’ wage payable and will be paid in January and February 2013.
35. Taxes payable
In RMB
Item Closing amount Opening amount
VAT -4,757,677.68 1,895,422.63
Business tax 23,400,077.35 18,030,603.08
Enterprise income tax 10,068,399.05 15,046,043.63
Personal income tax 444,142.16 440,103.00
City maintenance and construction tax 1,845,487.01 2,677,051.21
Land using tax 639,180.73 989,909.39
Property tax 909,940.53 367,346.01
Education surtax 955,231.71 1,245,684.67
Local education surtax 95,693.78 198,932.54
Others 86,103.34 111,169.71
Total 33,686,577.98 41,002,265.87
Statement on tax payable. Please provide the calculating processes when taxable income is balanced
between branch companies or factories as approved by the Tax Bureau.
Notes:
1. Fangda Decoration and Fangda Automatic adopt the consolidated taxation basis for enterprise
income tax. The parent consolidates the enterprise income tax of subsidiaries, which is paid by
the subsidiaries according to the proportions approved by the tax bureau.
2. The enterprise income tax payable this year is to be consolidated by the tax department.
36. Interest payable
In RMB
Item Closing amount Opening amount
Short-term borrowing interest payable 316,201.11 780,979.73
Short-term bond interest payable 1,638,356.16
Total 1,954,557.27 780,979.73
164
China Fangda Group Co., Ltd. 2012 Annual Report
Notes to interest payable
37. Dividend payable
In RMB
Reason for overdue for
Entity Closing amount Opening amount
over 1 year
Notes to dividend payable
38. Other payables
(1) Other payables
In RMB
Item Closing amount Opening amount
Performance and quality deposit 20,513,800.46 19,298,642.24
Deposit 6,846,769.95 7,320,939.27
Reserved expense 7,248,198.58 4,527,846.10
Others 6,731,287.87 5,635,779.77
Total 41,340,056.86 36,783,207.38
(2) Other payables to shareholder holding 5% or above shares with voting rights of the Company in
the report period
In RMB
Entity Closing amount Opening amount
(3) Notes to large other payables aged over one year
(4) Description of large other payables
(39) Anticipated liabilities
In RMB
Item Opening amount Increase Decrease Closing amount
Others 288,000.00 288,000.00
Total 288,000.00 288,000.00
Notes to anticipated liabilities
165
China Fangda Group Co., Ltd. 2012 Annual Report
40. Non-current liabilities due within 1 year
(1) Non-current liabilities due within 1 year
In RMB
Item Closing amount Opening amount
(2) Long-term loans due within 1 year
Long-term loans due within 1 year
In RMB
Item Closing amount Opening amount
Among the long-term loans due in 1 year, the loans overdue but extended amount to RMB0.00.
Top 5 long-term loans due in 1 year
In RMB
Closing amount Opening amount
Interest
Borrower Start day End day Currency Foreign Domestic Foreign Domestic
rate (%)
exchange currency exchange currency
Overdue loans among long-term loan due within 1 year
In RMB
Annual Estimated
Overdue Overdue
Borrower Amount interest rate Use repayment
time reason
(%) term
No amount is repaid after the balance sheet day.
Notes to long-term loans due within 1 year
(3) Bonds payable due within 1 year
In RMB
Opening Current Closing
Date of Amount Interest Closing
Bond Par value Term interest accrued interest
issue of issue paid balance
payable interest payable
Notes to bonds payable due within 1 year
(4) Long-term payables due within 1 year
In RMB
Initial Interest rate Accrued Closing Borrowing
Borrower Term
amount (%) interest balance conditions
Notes to long-term payables due within 1 year
166
China Fangda Group Co., Ltd. 2012 Annual Report
41. Other current liabilities
In RMB
Closing balance of book
Item Opening balance of book value
value
Short-term debentures 200,000,000.00
Total 200,000,000.00
Notes to other current liabilities
On November 15, 2012, the Company issued the first short-term debenture in 2012:
Short-term debenture Fangda Group’s First Short-term Debenture in 2012
Abbreviation 12 FANGDA GROUP CP001
Code 41260080 Term 365 days
Interest calculation Repayment of capital Issuing day November 15, 2012
basis with interest
Actual amount of RMB200 million Planned amount of RMB200 million
issue issue
Par price RMB100/par value of Interest rate 6.50% (one-year shibor on
RMB100 the issuing day+2.10%)
Main underwriter Industrial Bank Co., Ltd.
42. Long-term borrowings
(1) Classification of long-term borrowings
In RMB
Item Closing amount Opening amount
Notes to classification of long-term borrowings
(2) Top-5 long-term borrowings
In RMB
Closing amount Opening amount
Interest
Borrower Start day End day Currency Foreign Domestic Foreign Domestic
rate (%)
exchange currency exchange currency
Statement on long-term loans. For long-term loans overdue but extended for another period, please
provide the conditions, principal, interest rate, and repayment arrangement.
43. Bond payable
In RMB
167
China Fangda Group Co., Ltd. 2012 Annual Report
Opening Current Closing
Date of Amount Interest Closing
Bond Par value Term interest accrued interest
issue of issue paid balance
payable interest payable
Statement on bonds payable, including the condition and time of converting of the convertible
bonds
44. Long-term payables
(5) Top 5 long-term payables
In RMB
Initial Interest rate Accrued Closing Borrowing
Entity Term
amount (%) interest balance conditions
(2) Details of finance leasing payments in long-term payables
In RMB
Closing amount Opening amount
Entity Foreign
Foreign currency RMB RMB
currency
Guarantee provided by the 3rd party for the leasing finance amounts to RMB0.
Notes to long-term payables
45. Special payables
In RMB
Opening Closing
Item Increase Decrease Remarks
amount amount
Notes to special payables
46. Other non-current liabilities
In RMB
Closing balance of book
Item Opening balance of book value
value
Photon crystal project (Note 2) 1,200,000.00
Environment and energy-saving
500,000.00
projects (Note 3)
Graphic background production and
450,000.00
extension and chip making (Note 4)
Purchase of equipment for 650,000.00
168
China Fangda Group Co., Ltd. 2012 Annual Report
semi-conductor lighting technical
development project (Note 5)
Fund for optical-electric product
420,000.00
projects (Note 6)
High Luminance low reduction direct
plug LED industrial development 800,000.00
(Note 7)
Total 4,020,000.00
Notes to other non-current liabilities, including asset-related and income-related government
subsidy and closing balances:
Notes: The closing other non-current liabilities amount to RMB0, which is mainly because the
Shenyang Fangda is liquidated and the unamortized government subsidy related to capital is
amortized.
47. Capital share
In RMB
Change (+,-)
Opening Transferred Closing
amount Issued new Bonus amount
from Others Subtotal
shares shares
reserves
Total of
756,909,90 756,909,90
capital
5.00 5.00
shares
Notes to changes in capital shares. Name of CPA and number of verification report shall be
provided if capital increasing or decreasing occurred in the report period; as for shareholding
limited companies incorporated for less than three years, only net asset is required for the years
prior to incorporation; for shareholding limited companies reformed from limited companies shall
provide the capital verification at incorporation.
48. Shares in stock
Notes to shares in stock
49. Special reserves
Notes to special reserves
50. Capital reserves
In RMB
Item Opening amount Increase Decrease Closing amount
169
China Fangda Group Co., Ltd. 2012 Annual Report
Capital premium (share
38,238,222.48 38,238,222.48
capital premium)
Other capital reserves 42,241,271.44 68,873.72 248,500.00 42,061,645.16
Total 80,479,493.92 68,873.72 248,500.00 80,299,867.64
Notes to capital reserves
Notes:
1. The other capital reserves increase RMB68,873.72 as the entire 18th floor of Fangda Building is
transferred from lease to own use as approved by the 9th meeting of the 6th term of the Board.
The excessive part of the book value on the transfer day over the fair value is accounted into
capital reserves.
2. Other capital reserves decrease RMB248,500.00 attributable to the sales of financial assets held
for sales and change in the transferred accumulative fair value.
51. Surplus reserves
In RMB
Item Opening amount Increase Decrease Closing amount
Statutory surplus
24,676,077.16 5,818,465.78 30,494,542.94
reserves
Total 24,676,077.16 5,818,465.78 30,494,542.94
Notes to surplus reserves. Please state the related resolutions of the Board on capitalizing of
reserves, making up losses, and dividends.
Note: The increase in the surplus reserve is attributable to the 10% provision on the after-tax net
profit of the parent according to Articles of Association of the Company.
52. Providing of common risk provisions
Notes to providing of common risk provisions
53. Retained profit
In RMB
Provided or
Item Amount distributed
proportion
Adjustment on retained profit of
211,777,968.57 --
previous year
Total of retained profit at beginning
of year adjusted (+ for increase, - for 0.00 --
decrease)
170
China Fangda Group Co., Ltd. 2012 Annual Report
Retained profit adjusted at beginning
211,777,968.57 --
of year
Plus: Net profit attributable to owners
24,948,377.20 --
of the parent
Less: Statutory surplus reserves 5,818,465.78
Closing retained profit 230,907,879.99 --
Details of retained profit adjusted at beginning of year
1) Retrospective adjustment due to adopting of the Enterprise Accounting Standard and related
regulations, included the retained profit by RMB0.
2) Variation of accounting policies, influenced the retained profit by RMB0.
3) Correction of material accounting errors, influenced the retained profit by RMB0.
4) Change of consolidation range caused by merger of entities under common control, influenced
the retained profit by RMB0.
5) Other adjustment influenced the retained profit by RMB0.
Statement on retained profit: for companies issued their securities for the first time, if the
accumulated profit before the issuing is shared by the new and existing shareholders as approved by
the shareholders’ meeting, shall be described particularly; if the accumulated profit before the
issuing is shared only by existing shareholders as approved by the shareholders’ meeting, the
Company shall provide the details of dividend payable to the existing shareholders as audited by
CPA.
54. Operational revenue and costs
(1) Operation incomes and costs
In RMB
Item Occurred in current period Occurred in previous period
Major business turnover 1,346,239,883.78 1,296,010,404.05
Other business income 51,661,540.81 52,765,962.48
Operation cost 1,145,066,535.43 1,087,992,839.87
(2) Business segments (by industries)
In RMB
Occurred in current term Occurred in previous period
Industry
Turnover Operation cost Turnover Operation cost
1,260,903,466.7 1,184,798,163.0
Metal production 1,058,970,944.76 977,805,293.93
1 5
Railroad industry 83,977,888.26 60,474,460.25 98,230,586.47 73,361,235.01
171
China Fangda Group Co., Ltd. 2012 Annual Report
Light production 1,358,528.81 4,238,572.08 12,981,654.53 13,232,303.96
1,346,239,883.7 1,296,010,404.0 1,064,398,832.9
Total 1,123,683,977.09
8 5 0
(3) Business segments (by products)
In RMB
Occurred in current term Occurred in previous period
Product
Turnover Operation cost Turnover Operation cost
Curtain wall system and 1,260,903,466.7 1,184,798,163.0
1,058,970,944.76 977,805,293.93
materials 1 5
Metro screen door 83,977,888.26 60,474,460.25 98,230,586.47 73,361,235.01
LED products 1,358,528.81 4,238,572.08 12,981,654.53 13,232,303.96
1,346,239,883.7 1,296,010,404.0 1,064,398,832.9
Total 1,123,683,977.09
8 5 0
(4) Business segments (by regions)
In RMB
Occurred in current term Occurred in previous period
Region
Turnover Operation cost Turnover Operation cost
1,218,323,612.7 1,217,075,545.4 1,008,524,582.4
Domestic 1,033,772,604.56
0 4 6
Overseas 127,916,271.08 89,911,372.53 78,934,858.61 55,874,250.44
1,346,239,883.7 1,296,010,404.0 1,064,398,832.9
Total 1,123,683,977.09
8 5 0
(5) Revenue from top five customers
In RMB
Percentage in total turnover of the
Customer Major business turnover
Company %
No.1 127,697,605.19 9.13%
No.2 98,678,088.95 7.06%
No.3 63,918,598.74 4.57%
No.4 50,503,017.94 3.61%
No.5 50,236,149.70 3.59%
Total 391,033,460.52 27.96%
172
China Fangda Group Co., Ltd. 2012 Annual Report
Notes to operating revenue
55. Income from contract projects
In RMB
Accumulative
Fixed price Contract Accumulative recognized
Amount Settled amount
contract project occurred costs gross profit
(loss “-”)
Accumulative
Cost-plus Contract Accumulative recognized
Amount Settled amount
contract project occurred costs gross profit
(loss “-”)
Notes to contract projects
56. Business tax and surcharge
In RMB
Occurred in current Occurred in
Item Rate
term previous period
Business tax 16,383,394.34 18,666,270.42
City maintenance and
3,229,213.03 3,581,884.49
construction tax
Education surtax 1,874,597.52 1,974,228.40
Property tax 1,420,866.42 1,354,473.46
Land using tax 160,203.19 158,106.93
Others 834,627.85 1,012,708.72
Total 23,902,902.35 26,747,672.42 --
Notes to business tax and surcharge
57. Sales expense
In RMB
Item Occurred in current term Occurred in previous period
Labor costs 15,069,546.86 10,825,555.42
Freight and miscellaneous
7,060,994.29 6,146,199.77
charges
After-sales service 29,568.03 633,197.88
Travel costs 3,835,444.59 3,112,536.64
173
China Fangda Group Co., Ltd. 2012 Annual Report
Entertainment costs 2,917,590.98 1,477,665.74
Material consumption 732,100.87 652,982.57
Office costs 1,843,898.62 904,822.67
Advertisement and exhibition
976,749.69
costs
Rental 940,454.70 719,897.99
Test and experiment costs 475,562.36 1,165,719.66
Consultant costs 397,084.13 246,149.90
Export credit insurance 39,456.00 866,909.35
Others 1,773,153.48 1,589,359.07
Total 35,114,854.91 29,317,746.35
58. Management expenses
In RMB
Item Occurred in current term Occurred in previous period
Labor costs 57,492,415.23 49,208,779.84
Depreciation and amortization 21,703,660.11 16,156,234.59
Agencies 2,197,604.30 3,773,845.87
Tax 4,716,869.72 4,471,893.17
Maintenance costs 6,376,839.36 2,037,983.11
Water and electricity 1,777,188.22 2,101,335.16
Office expenses 2,249,701.54 2,544,556.04
Travel costs 2,675,487.85 4,067,852.87
R&D 4,596,146.75 2,744,431.85
Entertainment costs 1,872,551.30 2,154,541.69
Rental 2,743,677.38 3,146,641.06
Moving 39,118.30
Lawsuit 3,680,011.46 5,218,326.92
Material consumption 653,471.63 563,765.22
Property management fee 1,670,194.62 1,609,835.89
Others 8,272,070.77 5,775,831.29
Total 122,677,890.24 105,614,972.87
174
China Fangda Group Co., Ltd. 2012 Annual Report
59. Financial expenses
In RMB
Item Occurred in current term Occurred in previous period
Less: Interest income -3,502,021.02 -6,252,460.01
Acceptant discount 1,266,488.89
Exchange gain/loss -12,022.85 1,299,160.88
Commission charges and others 1,775,569.62 1,488,995.48
Total 24,771,976.76 19,752,495.44
60. Income from fair value fluctuation
In RMB
Source of income from fluctuation of
Occurred in current term Occurred in previous period
fair value
Investment real estate measured at fair
12,290,834.22 10,815,131.20
value
Total 12,290,834.22 10,815,131.20
Notes to income from fair value fluctuation
61. Investment income
(1) Details of investment gains
In RMB
Item Occurred in current term Occurred in previous period
Gains from sellable financial assets
3,448,207.99
and similar
Others 99,342.47
Total 3,448,207.99 99,342.47
(2) Gains from long-term equity investment measured by costs
In RMB
Occurred in current Occurred in Reason for change from the
Invested entity
term previous period previous period
(3) Gains from long-term equity investment measured by equity
In RMB
175
China Fangda Group Co., Ltd. 2012 Annual Report
Occurred in current Occurred in Reason for change from the
Invested entity
term previous period previous period
Statement on investment gains, please state whether or not there are material constrains on
retrieving of investment gains.
The change is attributable to the sales of the 700,000.00 tradable shares in Tianjin Global Magnetic
Card Co., Ltd.
62. Assets impairment loss
In RMB
Item Occurred in current term Occurred in previous period
1. Bad debt loss 18,054,107.66 16,501,823.05
2. Inventory depreciation loss 6,009,784.40 2,009,732.81
7. Fixed assets impairment loss 12,926,539.43 853,819.00
12. Intangible assets impairment loss 5,525,863.77
13. Goodwill impairment loss 8,197,817.29
Total 50,714,112.55 19,365,374.86
63. Non-business income
(1) Non-business income
In RMB
Amount accounted
Occurred in current Occurred in previous
Item into the current
term period
accidental gain/loss
Total of gains from disposal of
1,082.24 3,295.49 1,082.24
non-current assets
Including: Gains from disposal
1,082.24 3,295.49 1,082.24
of fixed assets
Government subsidy 6,275,756.00 1,988,650.00 6,275,756.00
Penalty income 365,324.04 177,600.27 365,324.04
Payable account not able to be
416,900.14 47,898.40 416,900.14
paid
Others 4,758,204.64 9,166,504.14 4,758,204.64
Total 11,817,267.06 11,383,948.30 11,817,267.06
176
China Fangda Group Co., Ltd. 2012 Annual Report
(2) Details of government subsidies
In RMB
Occurred in current Occurred in
Item Notes
term previous period
Photon crystal project 1,200,000.00
High Luminance low
reduction direct plug LED 800,000.00
industrial development
Purchase of equipment for
semi-conductor lighting
650,000.00 100,000.00
technical development
project
Environment and
500,000.00
energy-saving projects
Graphic background
production and extension 450,000.00 230,000.00
and chip making
Private enterprise and
SME development fund IT
450,000.00
construction project
subsidy
Fund for optical-electric
420,000.00
product projects
Shenzhen hi-tech industry
349,339.00
subsidy
Nanchang Hi-Tech District
Financial Bureau export 327,200.00 127,700.00
credit insurance subsidy
Nanchang Hi-Tech inland
262,000.00
freight subsidy
Nanchang Financial
Bureau 2011 on-job 236,700.00
training subsidy
Nanchang Hi-Tech 2011
184,800.00
inland freight subsidy
Shenzhen Nanshan
District science and
150,000.00 400,000.00
technology development
fund
177
China Fangda Group Co., Ltd. 2012 Annual Report
Nanchang Hi-Tech District
120,000.00 100,100.00
export subsidy
Nanchang Hi-Tech District
2011 Award for Great Tax 100,000.00
Contribution
LED fluorescent light
manufacturing technology
334,850.00
R&D and application
project
2010 foreign trade
221,200.00
development fund
Nanchang science and
technology insurance 172,300.00
subsidy
Shenzhen core enterprise
160,000.00
subsidy
Other minor subsidies 75,717.00 142,500.00
Total 6,275,756.00 1,988,650.00 --
Notes to non-business income
Major projects are disclosed as follows:
1. Fangda Decoration recovered the revenue of RMB1,061,386.08 related to the Shenzhen
Department Store Corporation case;
2. Income of RMB1,320,811.22 from disposal of wastes;
3. Fangda Yide recognized a non-business income of RMB981,648.97 according to a court
verdict.
64. Non-business expenses
In RMB
Amount accounted
Occurred in current Occurred in into the current
Item
term previous period accidental
gain/loss
Total of losses from disposal of
220,018.04 2,343,990.35 220,018.04
non-current assets
Including: Losses from disposal of
220,018.04 2,427,783.27 220,018.04
fixed assets
Loss from debt reorganization 3,959.20
178
China Fangda Group Co., Ltd. 2012 Annual Report
Donation 120,000.00 233,000.00 120,000.00
Penalty and overdue fine 99,350.01 11,645.94 99,350.01
Others 3,223,156.38 447,208.16 3,223,156.38
Total 3,662,524.43 3,123,596.57 3,662,524.43
Notes to non-business expense
Major projects are disclosed as follows:
1. Fangda Aluminium recognized a loss of 1,444,216.08 in unrecoverable land demolition
compensation;
2. Fangda New Material recognized a difference in the last engineering installment of totally
RMB568,990.73;
3. Fangda Automatic recognized a quality compensation of RMB525,170.00 for the Taipei MRT
Route project.
65. Income tax expenses
In RMB
Occurred in previous
Item Occurred in current term
period
Income tax calculated according to the law and
11,618,150.98 17,199,784.69
regulations of current term
Adjustment of differed income tax 1,485,543.83 2,580,182.17
Total 13,103,694.81 19,779,966.86
66. Calculation of basic earning per share and diluted earning per share
Item Code Occurred in Occurred in
current term previous period
Net profit attributable to common share P1 65,503,925.58
holders of the Company 24,948,377.20
Accidental gain/loss attributable to F 14,498,445.69
common share holders of the Company 17,587,102.82
Net profit attributable to the common P2=P1-F 51,005,479.89
owners of the PLC after deducting of 7,361,274.38
non-recurring gains/losses
Influence of diluting events on net profit P3
attributable to common share holders of
the Company
Influence of diluting events on net profit P4
attributable to the common owners of the
179
China Fangda Group Co., Ltd. 2012 Annual Report
PLC after deducting of non-recurring
gains/losses
Opening share number S0 756,909,905 504,606,604
Amount of shares increased by S1 252,303,301
capitalizing of common reserves or share
dividend
Amount of shares increased by issuing of Si
new shares or transforming of debt to
shares
Number of months from the next month of Mi 12
share increasing by issuing of new shares
or transferring of debts to the end of
report term
Amount of shares decreased by Sj
repurchasing of shares in the report term
Number of months since the next month Mj
of share decreasing to the end of report
term
Amount of shares reduced Sk
Number of months in the report term M0 12 12
Weighted average of common shares S=S0+S1+Si* 756,909,905 756,909,905
issued outside Mi/M0-Sj*Mj/
M0-Sk
Add: the weighted average of common X1
shares increased assuming the diluting
potential common shares transferred into
issued common shares
Weighted average of common shares for X2=S+X1 756,909,905 756,909,905
calculating diluted earning per share
Including: Weighted average of
common shares increased by conversion
of corporate bonds
Weighted average of common shares
increased by exercising of subscription
warrants/options
Weighted average of common shares
increased by performance of repurchase
promise
Earning per share attributable to common Y1=P1/S 0.03 0.09
share holders of the Company
Basic earning per share attributable to the Y2=P2/S 0.01 0.07
common owners of the PLC after
deducting of non-recurring gains/losses
180
China Fangda Group Co., Ltd. 2012 Annual Report
Basic earning per share attributable to Y3= (P1＋ 0.03 0.09
common share holders of the Company P3)/X2
Diluted earning per share attributable to Y4= (P2＋ 0.01 0.07
the common owners of the PLC after P4)/X2
deducting of non-recurring gains/losses
67. Other miscellaneous income
In RMB
Occurred in previous
Item Occurred in current term
period
1. Amount of gain (loss) from sellable financial
1,533,000.00 -2,149,000.00
assets
Less: Income tax influence of
383,250.00 -497,780.00
available-for-sale financial assets
Net amount written into other gains and
1,398,250.00
transferred into gain/loss in previous terms
Subtotal -248,500.00 -1,651,220.00
5. Others 91,831.63
Less: Income tax influence by other
22,957.91
accounted into other misc. incomes
Subtotal 68,873.72
Total -179,626.28 -1,651,220.00
Notes to other miscellaneous income
68. Notes to the cash flow statement
(1) Other cash inflow related to operation
In RMB
Item Amount
Interest income 3,631,146.87
Subsidy income 2,255,756.00
Retrieving of draft deposit net 141,419.27
Retrieving of bidding deposits 4,280,000.00
Operational trade received 5,766,362.90
Others 8,352,926.01
Total 24,427,611.05
181
China Fangda Group Co., Ltd. 2012 Annual Report
(1) Notes to other cash inflow related to operation
(2) Other cash paid related to operation
In RMB
Item Amount
Sales expense 17,220,430.72
Management expenses 40,350,093.26
Bidding deposit paid 12,009,571.37
Net draft deposit net paid 6,517,836.18
Other trades 23,815,008.98
Total 99,912,940.51
Notes to other cash paid related to operation
(3) Other cash received related to investment activities
In RMB
Item Amount
Bidding and contract deposit related to construction
4,022,500.00
projects
Total 4,022,500.00
Notes to other cash received related to investment activities
(4) Other cash paid related to investment activities
In RMB
Item Amount
Bidding deposit paid related to construction projects 2,050,000.00
Total 2,050,000.00
Notes to other cash paid related to investment activities
(5) Other cash received related to financing
In RMB
Item Amount
Notes to other cash received related to financing
182
China Fangda Group Co., Ltd. 2012 Annual Report
(6) Other cash paid related to financing
In RMB
Item Amount
Short-term bond financing costs 1,100,000.00
Total 1,100,000.00
Notes to other cash paid related to financing
69. Supplementary data of cash flow statement
(1) Supplementary data of cash flow statement
In RMB
Amount of the current Amount of the previous
Supplementary Info.
period period
1. Net profit adjusted to cash flow of
-- --
business operation
Net profit 6,443,242.38 59,380,123.26
Plus: Asset impairment provision 50,714,112.55 19,365,374.86
Fixed asset depreciation, gas and petrol
21,459,062.00 16,403,878.73
depreciation, production goods depreciation
Amortizing of intangible assets 4,557,857.66 5,173,399.43
Amortizing of long-term amortizable
716,916.61 461,876.35
expenses
Loss from disposal of fixed assets,
intangible assets, and other long-term assets -910,370.11 -760,047.25
(“-“ for gains)
Loss from fixed asset discard (“-“ for gains) 67,888.91 1,450,855.03
Loss from fair value fluctuation (“-“ for
-12,290,834.22 -10,815,131.20
gains)
Financial expenses (“-“ for gains) 27,664,639.55 23,698,010.18
Investment losses (“-“ for gains) -3,448,207.99 -99,342.47
Decrease of deferred income tax asset
-2,553,647.50 -2,225,237.39
(“-“ for increase)
Increase of deferred income tax asset
4,039,191.33 4,805,419.56
(“-“ for decrease)
Decrease of inventory (“-“ for increase) -16,572,487.74 26,059,387.31
Decrease of operational receivable items -127,562,194.03 -290,074,127.42
183
China Fangda Group Co., Ltd. 2012 Annual Report
(“-“ for increase)
Increase of operational receivable items
123,663,306.62 81,643,448.27
(“-“ for decrease)
Others -16,726,404.65 8,486,616.90
Cash flow generated by business operation,
59,262,071.37 -57,045,495.85
net
2. Major investment and financing operation
-- --
not involving with cash
3. Net change of cash and cash equivalents -- --
Balance of cash at period end 240,167,372.86 300,177,008.78
Less: Initial balance of cash 300,177,008.78 468,878,715.15
Net increasing of cash and cash equivalents -60009635.92 -168701706.37
(2) Information about acquisition or disposal of subsidiaries or businesses
In RMB
Occurred in previous
Supplementary Info. Occurred in current term
period
I. Acquisition of subsidiaries and businesses -- --
II. Disposal of subsidiaries and businesses -- --
(3) Composition of cash and cash equivalents
In RMB
Item Closing amount Opening amount
I. Cash 240,167,372.86 300,177,008.78
Including: Cash in stock 10,565.48 27,427.37
Bank savings can be used at any time 240,155,936.57 298,864,210.28
Other monetary capital can be used at
870.81 1,285,371.13
any time
III. Balance of cash and cash equivalents at
240,167,372.86 300,177,008.78
end of term
Notes to supplementary data of cash flow statement
70. Notes to statement of change in owners’ equity
State the names and adjusted amount of the items of previous year, and retrospective adjustment on
merger of entities under common control.
184
China Fangda Group Co., Ltd. 2012 Annual Report
(VIII) Accounting treatment of capital securitization
1. State the main trade arrangement, accounting treatment, and bankruptcy isolating terms of capital
securitization.
2. Entities on which the Company has no control power but undertake the risks
In RMB
Operating
Net asset at Net profit of
Closing total Closing total revenue of
Name end of the the current Notes
assets liabilities the current
period period
period
(IX) Related parties and transactions
1. Parent of the Company
In RMB
Share of
Voting
the Ultimat
power
Register Legal Register parent e holder Organiz
Relation Owners Busines of the
Parent ed represen ed co. in of the ation
ship hip type s parent
address tative capital the Compan code
compan
Compan y
y%
y%
Shenzhe
n
Banglin
Controll Industri
Technol
ing Ltd. Shenzhe Chen al 30,000, 729840
ogies 9.09% 9.09%
sharehol liability n Jinwu investm 000.00 05-5
Develop
der ent
ment
Co.,
Ltd.
Shenzhe
n Controll Industri
Wang
Shilihe ing Ltd. Shenzhe al 19,780, 729844
Shengg 2.36% 2.36%
Investm sharehol liability n investm 992.00 50-7
uo
ent Co., der ent
Ltd.
Shengji Controll Xiong Industri 590466
Ltd. Hong HKD10
u ing Jianmin al 2.82% 2.82% 83-000-
liability Kong ,000.00
Investm sharehol g investm 10-11-2
185
China Fangda Group Co., Ltd. 2012 Annual Report
ent Ltd. der ent
Particulars about the parent of the Company
Notes:
1. All of the investors of Shenzhen Banglin Technology Development Co., Ltd. – the holding
shareholder of the Company, are natural persons. Among them, Chairman Xiong Jianming is
holding 85% of the shares, and Mr. Xiong Xi – son of Mr. Xiong Jianming, is holding 15% of
the shares.
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. The Company
is not notified of other action-in-concert or related parties among the other holders of current shares.
2. Subsidiaries of the Company
In RMB
Register Legal Register Proporti
Subsidia Ownersh Ownersh Sharehol Organiza
ed represent Business ed on of
ry ip type ip type ding (%) tion code
address ative capital votes %
Designin
Shenzhe g,
n Fangda manufact
Controll
Decorati uring,
ed Ltd. Shenzhe Xiong 310,000, 1924441
on and 100% 100%
subsidiar liability n Jianwei 000.00 8-2
Engineer installati
ies
ing Co., on of
Ltd. curtain
walls
Installati
Shenzhe
on and
n Fangda Controll
processi
Automat ed Ltd. Shenzhe Lin 105,000, 7542542
ng of 100% 100%
ic subsidiar liability n Kebin 000.00 9-3
metro
System ies
screen
Co., Ltd.
door
Producti
Shenzhe on and
n Fangda Controll Sino-for distributi
Yang
Yide ed eign Shenzhe on of USD3,20 6192945
Xioazhu 100% 100%
New subsidiar joint n new-type 0,000.00 4-0
an
Material ies venture composit
Co., Ltd. e
materials
186
China Fangda Group Co., Ltd. 2012 Annual Report
Producti
joint on and
venture sales of
by the new-type
Fangda
Compan materials
New Controll
y and Yang composit USD12,0
Material ed Nanchan 7485261
compani Xioazhu e 00,000.0 100% 100%
s subsidiar g 1-7
es in an materials 0
(Jiangxi) ies
Taiwan, and
Co., Ltd.
Hong producti
Kong or on of
Macao curtain
walls
Design,
producti
Ltd. on, sales
liability and
(joint installati
Jiangxi
venture on of
Fangda
Controll by the curtain
New Yang
ed Compan Nanchan wall 20,000,0 1583066
Type Xioazhu 100% 100%
subsidiar y and g aluminu 00.00 4-0
Aluminu an
ies domestic m
m Co.,
and materials
Ltd.
overseas , doors,
compani windows
es) and
sectional
materials
Hong
Controll
Kong BODY 3007554
ed Hong Investme HKD10,
Junjia CORPO 100% 100% -2000-04
subsidiar Kong nt 000.00
Group RATE -10-4
ies
Co., Ltd.
Manufac
turing of
Shenyan
semicon
g Fangda Controll
Wang ductor
Semi-co ed Ltd. Shenyan 200,000, 6625489
Shenggu lighting 64.58% 64.58%
nductor subsidiar liability g 000.00 1-3
o material
Lighting ies
and
Co., Ltd.
chips;
lighting
187
China Fangda Group Co., Ltd. 2012 Annual Report
source
encapsul
ation;
developi
ng,
designin
g,
manufact
uring,
engineeri
ng,
installati
on and
trading
of
semicon
ductor
lighting
system
Developi
ng of
Ltd. hardware
Shenzhe liability and
Controll
n (Sole software,
ed Shenzhe Lin 1,000,00 5840949
Kexunda investme system 100% 100%
subsidiar n Kebin 0.00 1-9
Software nt by integrati
ies
Co., Ltd. legal on,
person) technical
consultin
g
Develop
ment and
operatin
g of real
Ltd.
Shenzhe estate on
liability
n Fangda Controll land of
(Sole
Property ed Shenzhe Lin which 10,000,0 0589522
investme 100% 100%
Develop subsidiar n Kebin land use 00.00 3-1
nt by
ment ies right is
legal
Co., Ltd. legally
person)
obtained
by the
Compan
y;
188
China Fangda Group Co., Ltd. 2012 Annual Report
property
manage
ment
3. Joint ventures and affiliates
In RMB
Property
of voting
Name of Register Legal Register
Ownersh Sharehol rights of Relation Organiza
invested ed represent Business ed
ip type ding (%) the ship tion code
entity address ative capital
Compan
y (%)
1. Joint venture
2. Associate
4. Other related parties
Other related parties Relationship with the Company Organization code
Notes to other related parties
5. Related transactions
(1) Purchasing of goods and services
In RMB
Occurred in current Occurred in previous
period period
Pricing and Portion Portion
Related decision in in
Related party
transaction making similar similar
process Amount Amount
transac transac
tions tions
(%) (%)
Sales of goods and services
In RMB
Occurred in current Occurred in previous
Pricing and
period period
Related decision
Related party Portion Portion
transaction making
process Amount in Amount in
similar similar
189
China Fangda Group Co., Ltd. 2012 Annual Report
transac transac
tions tions
(%) (%)
(2) Related trusteeship or contracting
Related trusteeship or contracting in which the Company is the undertaker
In RMB
Asset
Gains from
Name of the Name of the situation of Terminating
Start date Pricing basis the deal in
employer undertaker the date
report period
undertaker
Related trusteeship or contracting in which the Company is the undertaker
In RMB
Amount
Asset
Name of the Name of the Terminating recognized in
situation of Start date Pricing basis
employer undertaker date the report
the employer
period
Notes on the trusteeship and contracting:
(3) Related leasing
The Company is the lender
In RMB
Category of Rental
Name of the Name of the
asset for Starting date Stop date Pricing basis recognized in
leasor leasee
lease the period
The Company is the undertaker
In RMB
Category of Rental
Name of the Name of the
asset for Starting date Stop date Pricing basis recognized
leasor leasee
lease in the period
Note to related leasing
(4) Related guarantees
In RMB
Beneficiary Amount Completed or
Guarantor Start date Due date
party guaranteed not
Note to related guarantees
190
China Fangda Group Co., Ltd. 2012 Annual Report
(5) Capital borrowing with related parties
In RMB
Related party Borrowed amount Start date Due date Notes
Borrow in
Lend out
(6) Asset transferring and debt reconstruction with related parties
In RMB
Occurred in current Occurred in previous
period period
Type of Portion Portion
Related Related Pricing in in
transacti
party transaction principle similar similar
on Amount Amount
transac transac
tions tions
(%) (%)
(7) Other related transactions
6. Receivable and payables due with related parties
Receivables from related parties
In RMB
End Beginning of the period
Item Related party Remaining Bad debt Remaining Bad debt
book value provision book value provision
Receivables to related parties
In RMB
Item Related party Closing amount Opening amount
(X) Share payment
1. Overall share payment
In RMB
Notes to share payment
191
China Fangda Group Co., Ltd. 2012 Annual Report
2. Share payment settled by equity
In RMB
Notes to share payment settled by equity
3. Share payment settled by cash
In RMB
Notes to share payment settled by cash
4. Service paid by shares
In RMB
5. Revising and termination of share payment
(XI) Contingent events
1. Contingent liabilities formed by material lawsuit or arbitration, and their influences on the
financial position
Plaintiff Defender Case Court Target Progress
amount
st
Wang Weihong Fangda Engineering The 1 Middle RMB17.07 Loss
Decoration dispute Court of million and appraisal
Chongqing its interest
st
Note: In 2010, Wang Weihong sued to the 1 Middle Court of Chongqing against Fangda
Decoration – one of the Company’s subsidiaries, claiming for payment RMB17 million project
payment and interest, while Fangda Decoration claimed RMB18 million of project payment and
related loss. At present the trial process has been completed. Wang Weihong demanded loss
appraisal in the debate stage. And the bank deposit of RMB12 million of Fangda Decoration was
frozen by the court.
2. Contingent liabilities formed by providing of guarantee to other companies’ debts and their
influences on financial situation
Other contingent liabilities and their influences
(XII) Commitments
1. Major commitments
1. Details of guarantees provided between the Company and its subsidiaries for bank credits are:
1. Details of guarantees provided between the Company and its subsidiaries for bank credits by
192
China Fangda Group Co., Ltd. 2012 Annual Report
December 31, 2012 are listed as follows:
Company Amount Notes
Fangda New Material 50,000,000.00 No loan commitment under the credit item at
the end of the report period
58,000,000.00
Fangda Automatic 250,000,000.00 No loan commitment under the credit item at
the end of the report period
71,420,000.00
Fangda Decoration 500,000,000.00 No loan commitment under the credit item at
the end of the report period
120,000,000.00
142,850,040.00
Fangda Decoration 6,818,027.50 Guaranteed by Fangda Decoration and Fangda
Automatic. This amount is the part used but
Fangda Automatic not due in last year.
Total 1,199,088,067.50
2. Details of guarantees provided by subsidiaries for the Company for bank credits by December 31,
2012 are listed as follows:
Company Amount Notes
Fangda Decoration, Fangda 142,850,000.00 The credit has not been used
Automatic at the end of the period.
The Company has no other commitments that should be disclosed by December 31, 2012.
2. Fulfilling of commitments made in previous periods
(XIII) Post-balance-sheet events
1. Notes to material post-balance-sheet events
In RMB
Influence on the
Reason for not able to
Item Description financial position and
estimate the influence
business performance
2. Notes to profit distribution in post balance sheet period
In RMB
193
China Fangda Group Co., Ltd. 2012 Annual Report
3. Notes to other issues in post balance sheet period
(XIV) Other material events
1. Non-monetary asset exchange
2. Debt reconstruction
3. Enterprise merger
5. Leasing
5. Financial instruments issued to outside, convertible to shares
6. Assets and liabilities measured at fair value
In RMB
Accumulative
changes in fair
Gain/loss
value Impairment
Opening caused by Closing
Item accounting provided in the
amount changes in fair amount
into the period
value
income
account
Financial assets
3. Sellable
2,198,000.00 1,533,000.00
financial assets
Subtotal 2,198,000.00 1,533,000.00
Investment real 277,705,949.3 254,766,256.3
12,290,834.22 1,200,647.26
estate 5 3
279,903,949.3 254,766,256.3
Total 13,823,834.22 1,200,647.26
5 3
7. Foreign currency financial assets and liabilities
In RMB
Accumulative
Gain/loss changes in fair
Impairment
Opening caused by value Closing
Item provided in the
amount changes in fair accounting amount
period
value into the
income
194
China Fangda Group Co., Ltd. 2012 Annual Report
account
Financial assets
3. Loans and
17,876,047.72 3,895,097.19 41,726,895.45
receivables
Subtotal 17,876,047.72 0.00 0.00 3,895,097.19 41,726,895.45
Financial liabilities 0.00 0.00
8. Main contents of annual rewarding plan and material changes
9. Others
Fangda Town reconstruction project
According to Announcement “2012 Shenzhen Urban Renewal Plan The First Projects” (Draft)
issued by the Shenzhen Planning and Land Resources Committee on February 2, 2012, the
Company’s Fangda Town project in Longjing, Xili, Nanshan District has been incorporated into the
“2012 Shenzhen Urban Renewal Plan The First Projects” (Draft) by developed by Shenzhen
Planning and Land Resources Committee.
The land is the Company’s property and covers 41,645m2. The reconstruction includes renewal of
industrial functions and the area for public use accounts for no less than 15 of the reconstruction
area.
(XV) Notes to Financial Statements of the Parent
1. Account receivable
(1) Account receivable
In RMB
Closing amount Opening amount
Remaining book Remaining book
Bad debt provision Bad debt provision
value value
Type Prop
Propo Propo Propo
ortio
Amount Amount rtion Amount rtion Amount rtion
n
(%) (%) (%)
(%)
Account receivable for which bad debt provision is made by group
Including:
8,455,543. 100 39.01 8,602,510. 34.86
receivable out of 3,298,401.79 100% 2,998,948.29
17 % % 09 %
the consolidation
Subtotal 8,455,543. 100 3,298,401.79 39.01 8,602,510. 100% 2,998,948.29 34.86
195
China Fangda Group Co., Ltd. 2012 Annual Report
17 % % 09 %
8,455,543. 8,602,510.
Total -- 3,298,401.79 -- -- 2,998,948.29 --
17 09
Notes to account receivable
Account receivable with major individual amount and bad debt provision provided individually at
the end of the period
□ Applicable √ Inapplicable
In the group, the account receivable of which bad debt provision is made through the account aging
method
√ Applicable □ Inapplicable
In RMB
Closing amount Opening amount
Remaining book value Remaining book value
Age Propo Bad debt Propo Bad debt
Amount rtion provision Amount rtion provision
(%) (%)
Less than 1 year
Including: -- -- -- -- -- --
Subtotal
for less 21.32
490,582.84 5.8% 14,717.49 1,834,317.56 55,029.53
than 1 %
year
14.15 12.79
1-2 years 1,196,767.80 119,676.78 1,100,443.75 110,044.38
% %
13.01
2-3 years 1,100,443.75 330,133.13
%
Over 3 67.04 65.89
5,667,748.78 2,833,874.39 5,667,748.78 2,833,874.38
years % %
65.89
3-4 years 5,667,748.78 2,833,874.38
%
67.04
4-5 years 5,667,748.78 2,833,874.39
%
Total 8,455,543.17 -- 3,298,401.79 8,602,510.09 -- 2,998,948.29
Account receivable adopting the balance percentage method in the group
□ Applicable √ Inapplicable
Account receivable adopting other methods in the group
□ Applicable √ Inapplicable
Account receivable with minor individual amount and bad debt provision provided individually
□ Applicable √ Inapplicable
196
China Fangda Group Co., Ltd. 2012 Annual Report
(2) Written-back or recovered account receivable during the report period
In RMB
Accumulative
Basis for
provided amount
recognition of Written-back or
Description Reason before the
original bad debt recovered amount
write-back or
provision
recovery
Bad debt provision for account receivable with major individual amount or with minor individual
amount but independent impairment test
In RMB
Remaining book
Description Bad debt amount Providing rate (%) Reason
value
Notes to account receivable with minor individual amount but triggering substantial risks after
being grouped
(3) Written-off account receivable during the report period
In RMB
Related
Entity Nature Time Amount Reason
transaction
Notes to written-off account receivable
(4) Shareholder holding 5% or above shares with voting rights of the Company and owing any
account receivable to the Company at the end of period
In RMB
Closing amount Opening amount
Entity Bad debt
Remaining book Remaining book Bad debt
provision
value value provision amount
amount
(5) Nature and description of major other account receivable
(6) Top 5 account receivable entities
In RMB
Percentage in the
Relationship with
Entity Amount Term total account
the Company
receivable (%)
Guangzhou Metro Non-affiliated 1,196,767.80 1-2 years 14.15%
197
China Fangda Group Co., Ltd. 2012 Annual Report
Company party
Guangzhou Metro Non-affiliated
1,100,443.75 2-3 years 13.01%
Company party
Guangzhou Metro Non-affiliated
5,667,748.78 Over 3 years 67.03%
Company party
Shenzhen Taishan
Non-affiliated
Online Tech Co. 229,669.84 Less than 1 year 2.72%
party
Ltd.
Shenzhen
Fuchuangtong Non-affiliated
85,111.20 Less than 1 year 1.01%
Technology Co., party
Ltd.
Shenzhen
Dianlitong Non-affiliated
61,959.17 Less than 1 year 0.73%
Technologies Co., party
Ltd.
Shenzhen BORND
Optical and
Non-affiliated
Electronic 36,366.72 Less than 1 year 0.43%
party
Technology Co.,
Ltd.
Total -- 8,378,067.26 -- 99.08%
(7) Account receivable from affiliates
In RMB
Relationship with the Percentage in the total
Entity Amount
Company account receivable (%)
（8）
Amount of receivable transferred but not satisfying the conditions of termination recognition is
RMB0.00.
(9) If securitization is performed on target asset with purpose of receivable account, please brief the
related arrangements.
2. Other receivables
(1) Other receivables
In RMB
198
China Fangda Group Co., Ltd. 2012 Annual Report
Closing amount Opening amount
Remaining book Bad debt Remaining book Bad debt
value provision value provision
Type Prop Prop Prop Prop
ortio ortio ortio ortio
Amount Amount Amount Amount
n n n n
(%) (%) (%) (%)
Other receivables for which bad debt provision is made by group
Including: receivable
0.43 25.6 0.75 27.1
out of the 2,213,985.94 567,657.33 1,996,058.81 540,923.81
% 4% % %
consolidation
Receivable accounts 510,652,461.9 99.5 263,714,477. 99.2
consolidated 1 5% 63 2%
512,866,447.8 99.9 0.11 265,710,536. 99.9 0.2
Subtotal 567,657.33 540,923.81
5 8% % 44 7% %
Other receivables
with minor individual
0.02 100 0.03 100
amount and bad debt 77,046.00 77,046.00 77,046.00 77,046.00
% % % %
provision provided
individually
512,943,493.8 265,787,582.
Total -- 644,703.33 -- -- 617,969.81 --
5 44
Notes to other receivables
Other receivables with major individual amount and bad debt provision provided individually at the
end of the period
□ Applicable √ Inapplicable
In the group, the other receivables of which bad debt provision are made through the account aging
method
√ Applicable □ Inapplicable
In RMB
Closing amount Opening amount
Remaining book value Remaining book value
Age Propo Bad debt Propo Bad debt
Amount rtion provision Amount rtion provision
(%) (%)
Less than 1 year
Including: -- -- -- -- -- --
Subtotal for 0.18 0.35
953,182.40 28,595.47 928,255.27 27,847.66
less than 1 % %
199
China Fangda Group Co., Ltd. 2012 Annual Report
year
0.04 0.02
1-2 years 203,000.00 20,300.00 50,699.54 5,069.95
% %
0.01
2-3 years 50,699.54 15,209.86 2,729.00 0% 818.70
%
Over 3 0.38
1,007,104.00 0.2% 503,552.00 1,014,375.00 507,187.50
years %
3-4 years 2,729.00 0% 1,364.50
4-5 years 6,000.00 0% 3,000.00
Over 5 0.38
1,004,375.00 0.2% 502,187.50 1,008,375.00 504,187.50
years %
Total 2,213,985.94 -- 567,657.33 1,996,058.81 -- 540,923.81
Other receivables adopting the balance percentage method in the group
□ Applicable √ Inapplicable
Other receivables adopting other methods in the group
√ Applicable □ Inapplicable
In RMB
Group Remaining book value Bad debt provision
Receivable accounts consolidated 510,652,461.91 0.00
Total 510,652,461.91 0.00
Other receivables with minor individual amount and bad debt provision provided individually
√ Applicable □ Inapplicable
In RMB
Remaining book
Description Bad debt provision Providing rate (%) Reason
value
Unlikely to
Trades 44,546.00 44,546.00 100%
recover
Engineering Unlikely to
24,000.00 24,000.00 100%
payment recover
Unlikely to
Deposit 4,500.00 4,500.00 100%
recover
Unlikely to
Deposit 4,000.00 4,000.00 100%
recover
Total 77,046.00 77,046.00 -- --
(2) Written-back or recovered other receivables during the report period
In RMB
200
China Fangda Group Co., Ltd. 2012 Annual Report
Accumulative
Basis for
provided amount
recognition of Written-back or
Description Reason before the
original bad debt recovered amount
write-back or
provision
recovery
Bad debt provision for other receivables with major individual amount or with minor individual
amount but independent impairment test
In RMB
Remaining book
Description Bad debt amount Providing rate (%) Reason
value
Notes to other receivables with minor individual amount but triggering substantial risks after being
grouped
(3) Written-off other receivables during the report period
In RMB
Related
Entity Nature Time Amount Reason
transaction
Notes to written-off other receivables
(4) Shareholder holding 5% or above shares with voting rights of the Company and owing any other
receivables to the Company at the end of period
In RMB
Closing amount Opening amount
Entity Bad debt Bad debt
Remaining book Remaining book
provision provision
value value
amount amount
(5) Nature and description of major other receivables
(6) Top 5 other receivable entities
In RMB
Percentage in the
Relationship with
Entity Amount Term total other
the Company
receivables (%)
Fangda Decoration Related party 327,191,171.50 Less than 1 year 63.79%
Fangda Decoration Related party 78,127,882.12 1-2 years 15.23%
Fangda Decoration Related party 350,445.31 Over 3 years 0.07%
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China Fangda Group Co., Ltd. 2012 Annual Report
Fangda New
Related party 67,401,375.40 Less than 1 year 13.14%
Material
HK Junhjia Related party 6,529.28 Less than 1 year 0%
HK Junhjia Related party 49,352.88 1-2 years 0.01%
HK Junhjia Related party 30,330,898.93 Over 3 years 5.91%
Shenyang Fangda Related party 6,674,389.28 1-2 years 1.3%
Shenyang Fangda Related party 232,382.30 Over 3 years 0.05%
Shenzhen
Longevity Non-affiliated
984,375.00 Over 3 years 0.19%
Pharmaceutical party
Co., Ltd.
Total -- 511,348,802.00 -- 99.69%
(7) Other receivables from affiliates
In RMB
Relationship with the Percentage in the total
Entity Amount
Company other receivables (%)
Fangda Decoration Related party 405,669,498.93 79.09%
Fangda New Material Related party 67,401,375.40 13.14%
HK Junhjia Related party 30,386,781.09 5.92%
Shenyang Fangda Related party 6,906,771.58 1.35%
Kexunda Related party 160,400.00 0.03%
Shenzhen Woke Related party 110,450.91 0.02%
Fangda Property Related party 17,184.00 0%
Total -- 510,652,461.91 99.55%
（8）
Amount of other account receivable transferred but not satisfying the conditions of termination
recognition is RMB0.00.
(9) If securitization is performed on target asset with purpose of other receivable account, please
brief the related arrangements.
3. Long-term share equity investment
In RMB
Investe Audit Invest Openin Change Closin Shareh Proport Notes Impair Provisi Cash
202
China Fangda Group Co., Ltd. 2012 Annual Report
d entity method ment g g olding ion of to ment on dividen
cost balance balance in the voting inconsi provisi made d in the
investe rights stence on in this period
d entity in the betwee period
(%) investe n the
d entity shareh
(%) olding
and
voting
right
proport
ion
Fangda 305,00 305,00 305,00
39,356,
Decora Cost 0,000.0 0,000.0 0,000.0 98.39% 98.39%
000.00
tion 0 0 0
Fangda
19,800, 19,800,
Alumin Cost 99% 99%
000.00 000.00
ium
Fangda 19,907, 19,907,
Cost 75% 75%
Yide 760.00 760.00
HK 10,600. 10,600.
Cost 100% 100%
Junjia 00 00
Fangda 170,38 170,38 170,38
Autom Cost 5,071.7 5,071.7 5,071.7 94.08% 94.08%
atic 3 3 3
Fangda
New 74,496, 74,496, 74,496,
Cost 75% 75%
Materi 600.00 600.00 600.00
al
Shenya 109,56 108,85 108,85
ng Cost 0,000.0 2,073.8 2,073.8 65% 65%
Fangda 0 5 5
Kexun 1,000,0 1,000,0 1,000,0
Cost 100% 100%
da 00.00 00.00 00.00
Fangda
10,000, 10,000, 10,000,
Propert Cost 100% 100%
000.00 000.00 000.00
y
710,16 659,73 669,73
10,000, 39,718, 39,356,
Total -- 0,031.7 3,745.5 3,745.5 -- -- --
000.00 360.00 000.00
3 8 8
Notes to long-term share equity investment
203
China Fangda Group Co., Ltd. 2012 Annual Report
The Company has newly established Fangda Property according to the resolution of the 16th
meeting of the 6th term of the Board on October 29, 2012. The Fangda Town Project Development
Company was solely established by the Company with a registered capital of RMB10 million for
the reconstruction of Fangda Town. The investment of RMB10 million has been fully paid on
November 21, 2012.
4. Operational revenue and costs
(1) Turnover
In RMB
Item Occurred in current period Occurred in previous period
Major business turnover 1,022,878.46
Other business income 46,185,831.72 43,355,186.79
Total 46,185,831.72 44,378,065.25
Operation cost 11,267,937.63 11,314,912.66
(2) Business segments (on industries)
In RMB
Occurred in current period Occurred in previous period
Industry
Turnover Operation cost Turnover Operation cost
Railroad transport
1,022,878.46 671,466.39
equipment
Total 0.00 1,022,878.46 671,466.39
(3) Business segments (by products)
In RMB
Occurred in current period Occurred in previous period
Product
Turnover Operation cost Turnover Operation cost
Railroad transport
1,022,878.46 671,466.39
equipment
Total 0.00 1,022,878.46 671,466.39
(4) Business segments (by regions)
In RMB
Occurred in current period Occurred in previous period
Region
Turnover Operation cost Turnover Operation cost
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China Fangda Group Co., Ltd. 2012 Annual Report
Domestic 1,022,878.46 671,466.39
Total 0.00 1,022,878.46 671,466.39
(5) Revenue from top five customers
In RMB
Percentage in total
Customer Total operating turnover turnover of the
Company %
No.1 7,720,939.93 16.72%
No.2 7,022,261.70 15.2%
No.3 2,585,616.28 5.6%
No.4 2,488,021.20 5.39%
No.5 1,089,143.00 2.36%
Total 20,905,982.11 45.27%
Notes to operating revenue
5. Investment income
(1) Details of investment gains
In RMB
Occurred in current Occurred in previous
Item
period period
Gains from long-term equity investment
39,356,000.00 57,338,200.00
measured by costs
Gains from sellable financial assets and
4,548,207.99
similar
Others 64,444.44
Total 43,904,207.99 57,402,644.44
(2) Gains from long-term equity investment measured by costs
In RMB
Occurred in Occurred in Reason for change from the
Invested entity
current period previous period previous period
Decrease in profits and
Fangda Decoration 39,356,000.00 49,195,000.00
distribution
Total 39,356,000.00 49,195,000.00 --
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China Fangda Group Co., Ltd. 2012 Annual Report
(3) Gains from long-term equity investment measured by equity
In RMB
Occurred in Occurred in Reason for change from the
Invested entity
current period previous period previous period
Notes to investment gains
6. Supplementary data of cash flow statement
In RMB
Amount of the current Amount of the
Supplementary Info.
period previous period
1. Net profit adjusted to cash flow of business
-- --
operation
Net profit 58,184,657.79 68,410,991.91
Plus: Asset impairment provision 326187.02 427828.17
Fixed asset depreciation, gas and petrol
2,768,825.10 2,210,970.53
depreciation, production goods depreciation
Amortizing of intangible assets 658,245.20 637,358.82
Loss from disposal of fixed assets, intangible
-6,525.64 225,265.79
assets, and other long-term assets (“-“ for gains)
Loss from fixed asset discard (“-“ for gains) 67,888.91 8,149.14
Loss from fair value fluctuation (“-“ for gains) -13,791,134.22 -11,008,729.20
Financial expenses (“-“ for gains) 14,606,321.17 12,536,988.86
Investment losses (“-“ for gains) -43,904,207.99 -57,402,644.44
Decrease of deferred income tax asset (“-“ for
2,082,082.91 746,700.07
increase)
Increase of deferred income tax asset (“-“ for
4,450,464.09 4,831,827.95
increase)
Decrease of operational receivable items (“-“ for
-246,906,847.34 -62,382,349.30
increase)
Increase of operational receivable items (“-“ for
17,207,519.64 -4,297,488.06
decrease)
Cash flow generated by business operation, net -204,256,523.36 -45,055,129.76
2. Major investment and financing operation not
-- --
involving with cash
3. Net change of cash and cash equivalents -- --
Balance of cash at period end 25,540,604.84 24,337,261.80
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China Fangda Group Co., Ltd. 2012 Annual Report
Less: Initial balance of cash 24,337,261.80 30,297,718.91
Net increasing of cash and cash equivalents 1203343.04 -5960457.11
7. Assets and liabilities accounted by valuation under counter purchase
Assets and liabilities accounted by valuation under counter purchase
In RMB
Method of Process of
Original book
Item Fair value recognizing fair calculating fair
value
value value
Long-term equity investment formed by counter purchase
In RMB
Amount of the long-term equity
Process of calculating the
Item investment formed by counter
long-term equity investment
purchase
(XVI) Supplementary Information
1. Net income on asset ratio and earning per share
In RMB
Weighted average net Earning per share
Profit of the report period income/asset ratio Basic earnings per Diluted earnings
(%) share per share
Net profit attributable to common
2.3% 0.03 0.03
shareholders of the Company
Net profit attributable to the
common owners of the PLC after
0.68% 0.01 0.01
deducting of non-recurring
gains/losses
2. Irregular situation and causes of items in the financial statements
None
207
China Fangda Group Co., Ltd. 2012 Annual Report
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.
208
