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方大B(200055)公告正文

方 大B:2011年半年度报告(英文版)

公告日期:2011-08-02

    方大集团股份有限公司
    CHINA FANGDA GROUP CO., LTD.
    Interim Report 2011
    Important Prompt
    The Board of Directors and the directors of the Company guarantee that there are no
    significant omissions, fictitious or misleading statements carried in the Report and we
    will accept individual and joint responsibilities for the truthfulness, accuracy and
    completeness of the Report.
    This report was examined and adopted at the 3rd meeting of the 6th term of Board. All
    directors presented the meeting personally.
    The Financial Statement carried in the Semi-annual Report was not audited.
    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.
    This report is prepared both in English and Chinese. When there is any conflict in
    understanding, the Chinese version shall prevail.
    1
    Definitions
    The following terms are defined to the companies goes after them unless
    otherwise stated.
    the Company : China Fangda Group Co., Ltd.
    The Group: the Company and its subsidiaries
    Fangda Decoration: Shenzhen Fangda Decoration Engineering Co., Ltd.
    Fangda Yide: Fangda Yide New Material Co., Ltd.
    Fangda Aluminium: Jiangxi Fangda New-type Aluminium Co., Ltd.
    Fangda Guoke: Shenzhen Fangda Guoke Electri-Optical Technical Co., Ltd.
    Fangda Automatic: Shenzhen Fangda Automatic System Co., Ltd.
    Fangda New Materials: Fangda New Materials (Jiangxi) Co., Ltd.
    Shenzhen Woke: Shenzhen Woke Semiconductor Lighting Co., Ltd.
    Shenyang Fangda: Shenyang Fangda Semiconductor Lighting Co., Ltd.
    HK Junjia: Hong Kong Junjia Group Co., Ltd.
    Banglin: Shenzhen Banglin Technology Development Co., Ltd.
    Shilihe: Shenzhen Shilihe Investment Co., Ltd.
    Onforce: Onforce International Co., Ltd.
    LED: GaN Lighting Diode Semiconductor
    2
    Table of Contents
    I. Company Profile ............................................................................................................ 4
    II. Change in Capital Share and Major Shareholders ..................................................... 7
    III. Particulars about the Directors, Supervisors and Senior Executives ................... 10
    IV. Report of the Board................................................................................................... 13
    V. Significant Events ...................................................................................................... 19
    VI. Financial Report ........................................................................................................ 32
    VII. Document Ready for Inquiring ................................................................................ 33
    3
    I. Company Profile
    1. Company Profile:
    (1) Legal Name of the Company in Chinese and English
    In Chinese: 方大集团股份有限公司                        (abbreviation:方大集团)
    In English:     CHINA FANGDA GROUP CO., LTD. (abbreviation:CFDC )
    (2) Legal Representative: Mr. Xiong Jianming
    (3) Secretary of the Board: Mr. Zhou Zhigang
    Address: Fangda Town, Xili Longjing, Nanshan District, Shenzhen, PRC
    Post code: 518055
    Tel: 86(755) 26788571 ext. 6622
    Fax: 86(755) 26788353
    Email: zqb@fangda.com
    (4) Registered Address of the Company: Fangda Building, Kejinan 12th Avenue, High-tech Zone,
    Shenzhen, PR China.
    Post code: 518057
    Head office: Technology Building, Fangda Town, Xili Longjing, Nanshan District, Shenzhen,
    PRC
    Post code: 518055
    Email: fd@fangda.com
    Website: http://www.fangda.com
    (5) Official Medias of Information Disclosure
    China Securities Journal, Security Times, Shanghai Securities Daily, Hong Kong Commercial
    Daily
    Website assigned by China Securities Regulatory Commission for the disclosing of Annual
    Report:
    http://www.cninfo.com.cn
    Website of the Company where the Interim Report is available:
    http://www.fangda.com
    This Interim Report is available at: the Secretary Office of the Board of the Company.
    (6) Abbreviations and Codes of the Stock and the Stock Exchange Listed
    A Stock: Fangda A        000055 Shenzhen Stock Exchange
    B Stock: Fangda B        200055 Shenzhen Stock Exchange
    4
    2. Financial Highlights (in RMB yuan)
    (1) Major accounting indicies
    Ended this report Ended previous Increase/decrease
    term              year             (%)
    Gross Assets (RMB)                   2,040,148,475.79 1,991,161,158.84            2.46%
    Owners’ equity attributable to the
    1,056,058,837.33 1,009,990,739.07                      4.56%
    shareholders of the listed company (yuan)
    Capital shares (shares)                 756,909,905.00       504,606,604.00                 50.00%
    Net asset per share attributable to the
    shareholders of the listed company                        1.40                 2.00               -30.00%
    (Yuan/share)
    Report term        Same period last     Increase/decrease
    (Jan-Jun)               year                  (%)
    Turnover (yuan)                  579,154,393.68       423,379,762.74            36.79%
    Business profit (RMB)                 49,812,610.64        23,172,085.73           114.97%
    Gross profit (RMB)                   54,684,537.33        36,785,520.86            48.66%
    Net profit attributable to shareholders of
    46,094,698.26        33,608,581.42           37.15%
    the listed company (yuan)
    Net profit after deducting of non-recurring
    gain/loss attributable to the shareholders of    38,385,493.61        13,165,642.02           191.56%
    the listed company (RMB)
    Basic earnings per share (Yuan/share)               0.061              0.049                24.49%
    Diluted earnings per share (Yuan/share)              0.061              0.049                24.49%
    Weighted average of ROE (%)                     4.46%              5.28%                -0.82%
    Weighted average net
    income/asset ratio less non-recurring              3.72%              2.07%                 1.65%
    gain/loss(%)
    Net Cash flow generated by business
    -12,160,290.48       -39,527,323.06               -
    operation (RMB)
    Net Cash flow per share generated by
    -0.02               -0.08                   -
    business operation (yuan/share)
    (2) Non-recurring gain and loss items
    Non-recurring gain and loss items                     Amount          Note (if applicable)
    Gain/loss of non-current assets                                      -247,367.69
    Government subsidies accounted into current gain/loss account,
    other than those closely related to the Company’s common
    63,800.00
    business, comply with the national policy and continues to
    enjoy at certain fixed rate or amount.
    Receiving of interest of
    Capital adoption fee collected from non-financial organizations               project payment due
    4,863,766.62
    and accounted into current gain/loss                                          from Dalian Yunshan
    project
    Gain/loss from change of fair value of investment property
    5,082,327.66
    measured at fair value in follow-up measurement
    Other non-business income and expenditures other than the
    191,727.76
    above
    Influenced amount of income tax                                 -2,244,387.08
    Influenced amount of minority shareholders’ equity                   -662.62
    Total                              7,709,204.65            -
    5
    (3) Impact on the net profit and net asset due to adjustment under IAS (In
    RMB Yuan)
    Domestic Accounting Standard        International Accounting Standard
    Net profit attributable to
    the shareholders of the                46,094,698.26                          46,094,698.26
    listed company
    Owners’ equity to
    shareholders of the                 1,056,058,837.33                      1,060,822,235.57
    listed company
    The different of owners’ equity attributable to the listed company on IAS
    Statement about the
    was mainly the part of interest capitalized in years previous to application
    diversity
    of the new accounting standard on January 1, 2007.
    (4) Net income/asset ratio and earnings per share
    Earnings per share
    Net return on              (yuan/share)
    equity (%)
    Basic            Diluted
    weighted        earnings per      earnings per
    Items                              average            share             share
    Net profit attributable to the
    4.46%           0.061             0.061
    shareholders of the listed company
    Net profit after deducting of
    non-recurring gain/loss attributable to                   3.72%           0.051             0.051
    the shareholders of the listed company
    6
    II. Change in Capital Share and Major
    Shareholders
    (I)     Change of Capital Share
    1. Causation of the change
    The common reserve capitalizing plan of year 2010 was implemented in the report
    term. Upon the total capital shares of 504,606,604 as of December 31, 2010,
    capital reserves were to capitalized on 5 to 10 basis, totally 140,319,572 were
    capitalized to A share holders, and 111,983,729 shares were capitalized to B share
    holders. and the capital shares were increased to 756,909,90 thereafter.
    2. Approval upon the change
    The common reserve capitalizing plan was approved at the Shareholders’ Meeting
    2010.
    3. Change in total capital shares and shareholding structure
    Change of shareholding status
    Before the change                    Changed (+,-)                   After the change
    Issuing
    Bonus Transferred
    Amount    Proportion of new                       Others Sub-total   Amount      Proportion
    shares from reserves
    shares
    I. Shares with
    trading restriction
    conditions            48,014,828    9.52%                     24,007,414      24,007,414 72,022,242      9.52%
    1. State-owned
    shares
    2. State-owned legal
    person shares
    3. Other domestic
    shares               47,945,200 9.50%                         23,972,600      23,972,600 71,917,800      9.50%
    Incl.
    Non-government
    domestic legal
    person shares        18,200,000 3.61%                          9,100,000       9,100,000 27,300,000      3.61%
    Domestic
    natural person
    shares               29,745,200 5.89%                         14,872,600      14,872,600 44,617,800      5.89%
    4. Share held by
    foreign investors
    Incl. Shares held
    by foreign legal
    persons
    Foreign natural
    7
    person shares
    5. Management
    shares                      69,628     0.01%                34,814           34,814     104,442     0.01%
    II. Shares without
    trading limited
    conditions              456,591,776   90.48%           228,295,887      228,295,887 684,887,663    90.48%
    1. Common shares
    in RMB                  232,624,317   46.10%           116,312,158       116,312,158 348,936,475   46.10%
    2. Foreign shares in
    domestic market         223,967,459 44.38%            111,983,729       111,983,729 335,951,188 44.38%
    3. Foreign shares in
    overseas market
    4. Others
    III. Total of capital
    shares                  504,606,604   100.00%          252,303,301      252,303,301 756,909,905    100.00%
    4. Reregistration of the shares
    The newly capitalized A shares have been transferred directly to the accounts of A
    share holders on April 26, 2011, while the newly capitalized B shares have been
    transferred directly into the accounts of B share holders on April 28, 2011.
    5. Shareholding status at the end of report term                               (as of June
    30th 2011, in shares)
    Total          of     72,221 shareholders at end of the report term (including 49,633 A-share
    shareholders          holders, and 22,588 B-share holders)
    Top 10 Shareholders
    Name of the         Properties of        Share                     Conditional Pledged or
    Total shares
    shareholder         shareholder     proportion %                     shares       frozen
    Shenzhen Banglin
    Technologies     Domestic
    Development Co., non-state-owned
    Ltd.        legal person               9.09% 68,774,273                   -          -
    Domestic
    Shenzhen Shilihe non-state-owned
    Investment Co., Ltd. legal person               2.36% 17,860,992                   -          -
    Tieling Xinxin    Domestic
    Copper Industry Co., non-state-owned
    Ltd.        legal person               2.22% 16,800,000         16,800,000 16,800,000
    Domestic natural
    Chen Binblin     person                     1.98% 15,000,000         15,000,000 14,550,000
    Onforce International Overseas      legal
    Ltd.        person                     1.63% 12,300,000                   -          -
    Domestic natural
    Shi Baozhong      person                     1.39% 10,500,000         10,500,000 10,500,000
    Domestic natural
    Zhang Xu       person                     1.39% 10,500,000         10,500,000           -
    Zhongrong       Domestic
    International Trust non-state-owned
    Co., Ltd.      legal person               1.39% 10,500,000         10,500,000           -
    Domestic natural
    Shen Cangqiong person                         1.14% 8,617,800            8,617,800          -
    8
    Domestic natural
    Cao Yifan        person                       0.44% 3,320,865                    -        -
    Top 10 holders of unconditional shares
    Amount of shares without trade
    Name of the shareholder                                                    Category of shares
    limited conditions
    Shenzhen Banglin
    Technologies
    Development Co., Ltd.                   68,774,273                  RMB common shares
    Shenzhen Shilihe
    Investment Co., Ltd.                   17,860,992                  RMB common shares
    Foreign shares placed in
    Onforce International Ltd.                12,300,000                  domestic exchange
    Foreign shares placed in
    Cao Yifan                          3,320,865                  domestic exchange
    Foreign shares placed in
    Chen Lihong                         2,305,365                  domestic exchange
    Foreign shares placed in
    Zhen Fan                          1,980,000                  domestic exchange
    Zhongrong International
    Trust Ltd. – Rongxin Trust
    Contract No.75                       1,931,659                  RMB common shares
    Zhongrong International
    Trust Co., Ltd. – Huian
    No.6                            1,653,147                  RMB common shares
    Foreign shares placed in
    Chen Jinbiao                        1,649,427                  domestic exchange
    Foreign shares placed in
    Li Yitian                         1,558,350                  domestic exchange
    Notes to relationship or Among the top 10 shareholders, Banglin and Onforce are parties with
    “action in concert” action in concert. Banglin and Shilihe are associated. As for the other
    among the top ten       holders of current shares, the Company has not been informed any
    shareholders.        situation of related parties or action in concert parties.
    9
    6. Influences of the capital share changing on the financial
    indices of the latest year and latest term, such as basic
    earnings per share and diluted earnings per share, and net
    asset per share attributable to common shareholders of the
    Company: For the capital shares have increased from
    504,606,604 to 756,909,905 due to implementing of common
    reserve capitalizing for year 2010, the earnings per share
    and diluted earnings per share of previous year have
    decreased from RMB0.074 to RMB0.049.
    7. None of the controlling shareholder or substantial
    dominator of the Company has changed during the report
    term.
    III.     Particulars             about           the         Directors,
    Supervisors and Senior Executives
    1. Changes in Shares Held by Directors, Supervisors
    and Senior Executives
    Shares held      Shares      Shares      Shares
    at the      increased   decreased     held at    Cause of
    Name     Position
    beginning of   this term   this term   the end of    change
    year        (shares)    (shares)      term
    10
    Xiong      Chairman,       68,647          34,324     0        102,971
    Capitalizing
    Jianming      president
    of common
    Wang      Director, Vice   24,191          12,095     0         36,286
    reserves
    Shengguo      president
    Xiong       Director         0                                    0
    Jianwei
    Director,
    Zhou
    Secretary of      0                                    0
    Zhigang
    the Board
    Shao       Independent       0                                    0
    Hanqing       Director
    Guo       Independent       0                                    0
    Jinlong       Director
    Huang      Independent       0                                    0
    Yaying        Director
    Zheng Hua     Host of the      0                                    0
    Supervisory
    Committee
    Yu Guoan      Supervisor       0                                    0
    Cao Naisi     Supervisor       0                                    0
    Yang      Vice President     0                                    0
    Xiaozhuan
    Vice president
    Lin Kebin                      0                                    0
    and CFO
    Former
    Dong
    independent       0                                    0
    Likun
    director
    Song          Former
    0                                    0
    Wenqing      supervisor
    Note: The Company has not implemented any share equity motivation scheme, thus
    none of the directors, supervisors or executives is holding share options or granted
    shares with restriction conditions.
    11
    2. Changes occurred to the directors, supervisors and
    senior executives in the current term.
    Approved by
    Name           Position             Job term         Causation
    Xiong        Chairman,                               Shifting of
    2011.3.25-2014.3.25                 The Shareholders’ Meeting
    Jianming        President                                terms
    2010, the 1st meeting of the
    Wang        Director, Vice                           Shifting of
    2011.3.25-2014.3.25                      6th term of Board
    Shengguo        president                                terms
    Xiong                                                Shifting of   The Shareholders’ Meeting
    Director        2011.3.25-2014.3.25
    Jianwei                                                 terms                   2010
    Director,                                           The Shareholders’ Meeting
    Zhou                                                  Shifting of
    Secretary of the   2011.3.25-2014.3.25                 2010, the 1st meeting of the
    Zhigang                                                  terms
    Board                                                   6th term of Board
    Shao          Independent                             Shifting of   The Shareholders’ Meeting
    2011.3.25-2014.3.25
    Hanqing          Director                                terms                   2010
    Independent                             Shifting of   The Shareholders’ Meeting
    Guo Jinlong                       2011.3.25-2014.3.25
    Director                                terms                   2010
    Huang         Independent                             Shifting of   The Shareholders’ Meeting
    2011.3.25-2014.3.25
    Yaying          Director                                terms                   2011
    Host of the
    Shifting of   Employees’ General Meeting
    Zhen Hua       Supervisory       2011.3.25-2014.3.25
    terms                  2011
    Committee
    Shifting of   The Shareholders’ Meeting
    Yu Guoan         Supervisor       2011.3.25-2014.3.25
    terms                 2011
    Shifting of   The Shareholders’ Meeting
    Cao Naisi       Supervisor       2011.3.25-2014.3.25
    terms                 2011
    Yang                                                  Shifting of    The 1st Meeting of the 6th
    Vice President     2011.3.25-2014.3.25
    Xiaozhuan                                                 terms             Term of Board
    Vice President,                          Shifting of    The 1st Meeting of the 6th
    Lin Kebin                         2011.3.25-2014.3.25
    CFO                                   terms             Term of Board
    Former
    Shifting of
    Dong Likun      independent       2008.6.6-2011.3.25
    terms
    director
    Song                                                  Shifting of
    Former supervisor   2008.6.6-2011.3.25
    Wenqing                                                  terms
    3. The Shareholders’ Meeting 2010 was held in the
    report term
    12
    IV. Report of the Board
    1. Financial Position:
    In RMB
    Scale of
    Items               Jan-Jun 2011       Jan-Jun 2010
    change %
    Turnover                               579,154,393.68     423,379,762.74      36.79%
    Operation cost                         460,275,267.38     339,167,650.59      35.71%
    Sales expense                           14,037,722.42      12,733,055.35      22.75%
    Administrative expense                  46,225,304.98      39,721,901.51      16.37%
    Financial expenses                       8,807,786.28      10,189,597.13      -13.56%
    Asset impairment loss                   -3,686,853.20       854,610.52           -
    Income tax expenses                     10,564,437.14       6,486,285.83      62.87%
    Operation profit                        49,812,610.64      23,172,085.73     114.97%
    Net profit attributable to the
    46,094,698.26      33,608,581.42      37.15%
    shareholders of the listed company
    Cash flow generated by business
    -12,160,290.48     -39,527,323.06        -
    operation, net
    Net increasing of cash and cash
    -53,169,601.60    288,025,892.87
    equivalents                                                                      -
    December 31,        Scale of
    Items               June 30, 2011
    2010            change %
    Gross Assets                           2,040,148,475.79   1,991,161,158.84    2.46%
    Owners’ equity to shareholders of
    1,056,058,837.33   1,009,990,739.07    4.56%
    the listed company
    Prepayment                              34,525,862.83      20,266,020.05      70.36%
    Other account receivable                51,503,441.54      39,235,264.87      31.27%
    Advances received                       90,207,461.25      48,308,874.47      86.73%
    Other account payable                   48,298,812.20      25,384,587.91      90.27%
    Major causes of the above movements:
    13
    (1) Busines turnover and costs have increased by 36.79% and 35.71% respectively,
    mainly caused by increase of sales of curtain wall and materials by 48.49%.
    (2) Income tax expenses increased by 62.87%, mainly caused by increase of profit and
    income tax payable.
    (3) Net amount of cash and cash equivalent has decreased by 118.46% from the same
    period of last year, mainly caused by receiving of proceeds from private issuing of
    shares in the same period of last year, and increase of investment in fixed asset in the
    report term.
    (4) Prepayment account increased by 70.36% over beginning of year, mainly caused
    by increasing of projects and prepayment made for labor service and materials.
    (5) Other receivable increased by 31.27% over beginning of year, mainly caused by
    increase of project deposit.
    (6) Advances received have increased by 86.73%, mainly caused by increase of
    advances received by Fangda Decoration and Fangda Automatic for projects.
    (7) Other payables have increased by 90.27%, mainly caused by increase of bidding
    deposit received.
    2. Business Overview:
    The Company’s business scope is composed by: development, design, production,
    installation, technical consulting & training, sales and after-sales service of new
    building materials, composite materials, metal products, metal structure,
    environmental protection equipment and materials, security equipment, metallurgic
    equipment, optical, mechanical and electronic integration products, macromolecule
    materials and products, fine chemical products, machinery equipment, photo-electric
    materials and equipment, photo-electric equipment, electronic display equipment,
    audio/video equipment, traffic facilities, metro platform screen doors, various
    ventilation equipment and products, plunger equipment, centralized air-conditioning
    equipment and spares and parts, semiconductor materials and devices, integrated
    circuit, illumination products and equipment, solar energy products, screen door
    system for metro, etc. Operation of property management, leasing, and management
    of parking lots.
    The high-tech products including energy-saving curtain wall, compound aluminum
    board, single layer profiled aluminum board, and PSD are the major source of
    business turnover and net profit of the Company. The distribution of turnover and
    profit over industries, products, and territories are as the following (RMB0’000)
    Segments on industries
    Increase/decrease of       Increase/decrease of
    Gross    Increase/decrease of
    On industry or          Operation                                      operation cost over the     gross profit ratio over
    Turnover                profit turnover over the same
    product                cost                                         same period of last year   the same period of last
    ratio (%) period of last year (%)
    (%)                      year (%)
    Metal
    48,523.48 38,899.57     19.83%                  49.02%                    48.49%                      0.28%
    production
    Railroad
    6,353.06   5,358.46    15.66%                  -10.64%                   -8.48%                     -1.99%
    industry
    Segments on products
    Curtain wall   48,523.48 38,899.57     19.83%                 49.02%                     48.49%                      0.28%
    14
    products and
    materials
    Rail
    transportation   6,353.06    5,358.46   15.66%        -10.64%              -8.48%               -1.99%
    equipment
    Regions                Turnover              Change of income over last year %
    Domestic                     49,299.52                                               26.17%
    Overseas                      6,323.80                                              473.49%
    3. Business Analysis
    Increasing of prices has been accelerated in the whole country since the second half of
    last year. To constrain the trend of inflation, the national government has tightened
    control over the macro economy. The national bank has tightened the monetary
    policies as well. Interest rate was increased for successively five times, and the
    deposite-reserve ratio has been lifted for 12 times since the second half of last year.
    These have caused elevating of costs to enterprises and tightening of business
    environment. Meanwhile, this is the first year of the 12th 5-year-plan, the national
    government attached great important to development of new energy and
    environmental protection industries. In the report term, the Company has overcome
    numerous difficulties. Depending on its advantages of complying with the national
    policies, the Company has been persistently pursuing independent innovation and
    development. A good business situation has been achieved. In the report term, the
    Company has realized main business turnover of RMB579.15 million. Basing on a
    successive growth in past three years, another 36.79% of growth YoY was achieved in
    the first half of this year. It was another historical record of the Company. Net profit
    attributable to the owners of the parent company was RMB46.09 million, increased by
    37.15% over the same period of last year. After deducting of non-recurring gain/loss,
    the net profit has increased by 191.56%, which indicates continuously reinforcing of
    profitability of the main businesses. Up to the end of report term, the Company has
    reserved orders worth RMB1.476 billion, which is 254.92% of the business turnover
    of the first half of year. This provided a sound foundation for the business
    development of the whole year. The business performance has shown a trend of rapid
    growth in recent years.
    1) Significant achievement in marketing approach of curtain
    wall products
    The curtain wall market has been expanding quickly along with the fast growth of
    national economy. The Company has attached great importance to the development of
    curtain wall products, and has been leading the industry of the country. In        the
    report term, the Company has been fully utilizing its advantages of market reputation,
    keeping reinforce the exploring of high-end curtain wall market in Pearl River Delta,
    Yangtze River Delta, and Bohai Sea Costal area. Significant progress has been
    achieved. In the first half of year, the Company has won in the bidding
    competitions for curtain wall projects of Shenzhen Airport T3 Terminal, Shenzhen
    15
    Zhongguanghe Building, Changsha Kaifu Wanda Plaza, Qingdao Haier Property
    Executive Building, Kunshan Shimao International Town, Hebei Langhefang
    Financial Street Finance Center, Erduosi International Trade Town, and Beijing
    Mudanyuan Apartment 2#. Curtain wall products have been the main profitable
    business of the Company, whose sales income increases 49.02% over the same period
    of last year. The Company will seize the opportunities of rapid expanding market,
    reinforce the leading position and keep the Company a fast development.
    The 26th Universiade will be held in Shenzhen in August. The curtain wall of the
    central stadium is supplied and constructed by the Company. It was constructed with
    environmental protection and energy saving curtain wall products, and is comparable
    with the “nest” stadium of Beijing. Another main stadium of Universiade was
    constructed with new type polycarbonate roof system, which was invented by the
    Company with four patented technologies. It has successfully overcame the technical
    difficulties of distortion and water resistance.
    2) Contribute to entering of the age of metro
    As the largest in the country and one of the top 3 in the world supplier of PSD system,
    the Company has played a significant role in construction of local metro system of
    Shenzhen City. In June, Shenzhen Metro line 1, 2, 3, 4, and 5 were fully put into
    operation. The Company provided PSD systems for line 1 (Baishizhou – Airport East),
    line 2, line 4 (Minle – Qinghu). The Company’s PSD system was regarded as
    “advanced, stable, elegant, and safe”, and at the leading position globally. Since the
    full operation of the network phase II, the Company’s PSD systems have been
    working with zero fault and high efficiency, and highly praised by the metro company
    and citizens.      The line 4 project division of the Company was awarded “Advanced
    Quality Management”. The Company has contributing to entering of the age of metro
    of Shenzhen city.
    3) LED industry steps into a new age of development
    The Company has accomplished moving of LED production base from Shenzhen to
    Shenyang, and formed a relatively complete industrial chain in Shenyang. This
    indicates the LED segment has entered a new age of development. In the first half of
    year, sales of LED products has increased by 48.05% over the same period of last
    year.
    4) Accelerate deploying of industrial bases
    The Company has been always attaching great importance to technology innovation.
    This has reinforced the market reputation and competition. At present the Company is
    holding a large amount of orders. In the report term, the Company accelerated
    construction of Dongguan Songshanhu Base and Nanchang Base to support
    expanding of production and turnover.
    16
    5) Continuous improving of internal control system
    Along with the overall arrangement of Shenzhen Office of CSRC, the Company was
    assigned one of the 26 key PLCs for internal control system construction. In the report
    term, the Company paid great attention to implementation of internal control
    operations. An external consulting firm was employed to make sure the progress and
    quality of the operations. The Company produced a number of regulations, fully
    examined business processes, checked through for controlling faults, produced
    improving plan, revised and made new Company rules. The internal control system
    was further improved to satisfy altering business environment and requirements and to
    contribute to legal and healthy development.
    6) Awards of achievement
    In the report term, Shenzhen Fangda Automatic System Co., Ltd. – one of the
    fully-owned subsidiaries, was awarded the “Top 50 innovative enterprises of railroad
    transportation industry 2010”, which was the only in the field of PSD. This reflects a
    high profile of innovation approach in the whole area. In the report term, Fangda
    New Materials (Jiangxi) Co. Ltd. – one of the fully-owned subsidiaries of the
    Company, was awarded the “2nd place of technological innovation of Jiangxi
    province” for the “integration and application of 4C pressure module of profiled
    aluminum” developed together with Nanchang University. In the report term, the
    Company was awarded “Enterprise of the Year of Guangdong” and “Best of
    Industrial Relationship of Shenzhen”; Jiangxi New Materials was awarded “Best
    Quality Management” and “Best Enterprise of 2010 of Nanchang High-tech Zone”.
    The brand name “Fangda” was named “Best Buy of Shenzhen” for the 2nd time.
    4. Investment in the report term
    (1) Use of raised capital
    As of June 30, 2011, the situation of proceeds from share placing was as the
    followings: RMB0’000
    Total of proceeds                              33,658.69
    Total of proceeds put into
    Total of proceeds changed to other                                                                                 3,680.96
    0.00 investment in the report term
    use in the report term
    Accumulated proceeds changed to
    0.00
    other use
    Total of proceeds invested                    6,252.13
    % of accumulated proceeds changed
    0.00%
    to other use
    If                                                                 Date
    Total of                                    Investment
    investment                       Amount Accumulated progress at when the
    Project                    proceeds    Total                                                  Gains
    project                       invested investment         end of   project                       Major
    promised to be                    to be investment                                                 in the Gains as
    changed                            this     at end of                become                      change in
    invested by the                 invested    after                               report             report expected?
    (including                        report report term                  useable                    feasibility?
    proceeds                        as   adjustment                         term(%)(3)              term
    partially                        term         (2)                      as
    proposed                                       =(2)/(1)
    change)                                                            proposed
    Project set by
    the prospectus
    17
    Energy-saving
    curtain wall
    and PV curtain                                                                             Dec 31            Not
    No         21,000.00 21,000.00 3,280.58         5,481.31      26.10%              0.00              No
    wall production                                                                            2011              applicable
    expanding
    project
    Expanding of                                                                               Dec 31            Not
    No         12,658.69 12,658.69      400.38        770.82       6.09%              0.00              No
    PSD project                                                                                2011              applicable
    Subtotal of
    investment            -     33,658.69 33,658.69 3,680.96         6,252.13       -          -       0.00       -           -
    promised
    Investment
    project of
    premium
    surplus
    Repaying of
    bank loans (if          -                                                                    -        -         -           -
    any)
    Used as current
    -                                                                    -        -         -           -
    capital (if any)
    Subtotal of
    premium            -           0.00        0.00      0.00          0.00      -          -       0.00       -           -
    proceeds
    Total           -     33,658.69 33,658.69 3,680.96         6,252.13       -          -       0.00       -           -
    Reason or
    situation that
    not on schedule     None
    (on specific
    project)
    Statement on
    major change      None
    in feasibility
    Amount, usage
    and progress of
    Not applicable
    premium
    surplus
    Change of       Applicable
    location of     According to the needs of business development, and approved by the 24th meeting of the 5th term of Board,
    project to     the location of energy saving curtain wall and PV wall project was changed from Nanchang to Dongguan
    invest      Guangdong.
    Adjustment on
    implementation
    Not applicable
    of project
    invested
    Pre-investment      Applicable
    and       On September 30, 2010, it was decided to use the raised capital to replace RMB4,347,753.09 of investment
    replacement by      made previously by Fangda Automatic (1,403,503.00) and Fangda Decoration (4,347,753.09). This has been
    proceeds      verified by CPA with report 天健正信审(2010)专字第 020722 号.
    Idle proceed      Applicable
    used as      On March 28, 2011, payment of RMB20 million was made from idle proceeds to Fangda Decoration; and
    working capital     RMB10 million was made to Fangda Automatic. Both were not over six months.
    Surplus of
    investment and      Not applicable
    causation
    Application
    plan of retained    “Production expanding of energy saving curtain wall and photoelectronic curtain wall” and “Production
    fund from      expanding of PSD”
    financing
    Problem or
    situation in
    using of      None
    proceeds and
    disclosing
    18
    (2) Projects financed by capital other than share placing
    The Company invested to setup Shenyang Fangda Semi-conductor Lighting Co., Ltd.
    together with Shenyang Hunnan New Zone State-owned Asset Co., Ltd. The first
    stage of construction works has basically completed.
    5. Calculation and measuring of major assets,
    liabilities, income, and expenses on fair value basis
    The Company accounts investment properties and available-to-sale finance assets on
    fair value basis. Fair values of investment property will be based on appraisals made
    by professional appraisal institutes.   Disposable financial assets are the 700
    thousand ST Magnetic Card shares held by the Company which were released from
    selling restriction on March 3, 2010. Their fair value is decided by the closing rate at
    end of report term.
    6. Business profitability prediction for the report year
    The Company made no profitability prediction in the previous periodic reports
    regarding the performance of the report term.
    V. Significant Events
    (I) Company Administration
    In the report term, according to the regulations and articles of Company Law,
    Securities Law, Share Listing Rules of Shenzhen Stock Exchange, and Operational
    Instructions for PLCs on Main Board, the Company has been improving its
    management structure, establishing modern enterprising system, standardizing
    business operations, to keep the Company growing in a healthy way.
    As of the end of report term, the practical situation is complying with the
    requirements of the laws of the nation and instructional documents issued by CSRC.
    (II)    Progress          of      internal        control         standardizing
    operation in the 2nd quarter of 2011
    According to the requirements of “Fundamental Standards of Enterprise Internal
    Control” issued collectively by five national departments and the “Notice on Trial
    Operation of Internal Control Improving in PLCs in Shenzhen” issued by Shenzhen
    19
    Office of CSRC, the Company has carried out a number of works according to the
    preplan made previously in the second quarter of 2011. Most of the requirements
    setout by “China Fangda Group Co., Ltd. Internal Control Improving Operation Plan”
    (the “Internal Control Plan” hereinafter.)
    1. Progress of works:
    (1) On the day when the consultant institution entered the Company, an initiating
    meeting was held about the internal control operation. The meeting emphasized on the
    importance of the operation and clarified the extent of the operation. In view of
    making the operation more feasible, the “Internal Control Plan” was made by the
    leading team under the consulting of the consultant institution. The plan was
    examined and adopted at the 2nd meeting of the 6th term of Board held on April 20,
    and disclosed to the public on April 22. Upon the results of former operations, the
    Plan has further clarified the responsible persons, responsibilities, and schedules to
    facilitate smooth implementation of the Plan.
    (2) According to the Internal Control Plan, the leading team and the consulting
    institution interviewed the managements of the Company and the subsidiaries, talked
    about the current situation of management structure, making of development strategy,
    manpower management, capital management, control of hedging instruments, and
    preparing process of financial reports. By this way, the extent of key controlling
    operations were recognized and internal control documents were produced.
    (3) The leading team has made periodical statement on the progress of interviews,
    business reviewing, and regulation making process. The “Table of Internal Control
    Faults (draft)” was made to illustrate the overall situation of internal control system of
    the Company. A improving plan was prepared immediately upon the table.
    According to the requirement of the Instruction of Assessment on Enterprise Internal
    Control, with references to wildly adopted approach and basing on the Company’s
    practical situation, the leading team setout the recognition and reporting procedures
    on internal control faults, including the recognition criteria and reporting process of
    material faults, major faults, and general faults.
    (4) Along with the business flow reviewing process, the leading team produced the
    risk evaluation criteria according to the suggestion of the consulting institution and
    performed risk evaluation works against it. Evaluations covered most of the main
    risks on the company level and business flow level, and emphasized on risk points in
    financial reporting process. A number of risk points were identified for special
    attention and priority. Then risk control documents were prepared under the help of
    the consulting institute to provide reference and templates for future risk identifying.
    To accelerate the operation and save more time for successive improving and
    self-evaluation works, the leading team has drafted the section about risk evaluation
    and control as part of the “Fangda Group Internal Control Handbook (draft)”, which
    released the pressures on coming up operations.
    (5) In implementing of internal control criteria, the leading team has reinforced
    constituting of regulations. According to the requirement of internal control criteria, a
    number of regulations were produced, including Capital Management Rules,
    Instruction on Risk Management, Temporary Supervisory Rules of Special Business,
    20
    Complain and Reporting Rules, and Overall Policies of IT Systems. The works of
    business process reviewing, risk evaluation, and making of regulations were
    implemented in parallel to ensure the progress.
    (6) According to the requirement of Shenzhen Office of CSRC, the leading team
    participated in the conference of internal control leaders.
    2. Comparison of practical progress and the schedule of
    Internal Control Plan
    According to the requirement of the Internal Control Plan, the first three stages should
    be accomplished before end of the 2nd quarter. As of the end of the 2nd quarter, the
    leading team has finished all of the works setout in the Internal Control Plan. The
    followings are the details.
    Schedule of Internal Control Operation of Fangda Group
    Stages of
    No.                       Key missions             Progress              Note
    works
    Preparation works for
    1     Stage I    internal         control      Completed
    construction
    Analysis      of current
    2     Stage II                                 Completed
    internal control
    Preparing of improving
    3    Stage III                                 Completed     Plan drafted
    plan
    Making of Internal
    Following
    4    Stage IV    Internal control improving                  Control Handbook
    up
    started
    Internal control     system
    5     Stage V                                  Not started
    trial operation
    3. Following up works
    The leading team will accelerate the producing of Internal Control Handbook and
    Internal Control Criteria, and finish the collecting works of internal control operation
    results. Upon completion of these works, a testing operation will be implemented in a
    certain range and results will be recorded. Upon the testing results, with reference to
    the Internal Control Instruction and practical situation of the Company, the internal
    control operation result reviewing document will be revised and finalized, which will
    provide a solid foundation for full implementation of internal control regulations.
    21
    (III)   Profit       distribution,          capitalizing          of    common
    reserves, and cash dividend implemented in the report
    term
    No profit distribution was implemented in the report term.
    The common reserve capitalizing plan of year 2010 was implemented in the report
    term. Base on the total capital shares of 504,606,604 at end of 2010, capitalizing of
    common reserves was carried out on 5 to 10 basis to the entire shareholders. Totally
    111,983,729 shares were capitalized. The total of capital shares has increased up to
    756,909,905 shares. The newly capitalized A shares have been transferred directly to
    the accounts of A share holders on April 26, 2011, while the newly capitalized B
    shares have been transferred directly into the accounts of B share holders on April 28,
    2011.
    The Company conducted no share equity promotion scheme in the report term.
    No cash dividend plan made in the report term.
    (IV) Material lawsuit and arbitration affairs in the report
    term
    1. On March 31, 2010, the Company sued to the Middle Court of Guangzhou claiming
    for protection of the Company’s two patent rights violated by Panasonic Electronics
    (China) Ltd. in proceeding of PSD system of Guangzhou Metro. The claiming was to
    stop the violating activity and compensation of RMB10 million. This case was in trial
    process.
    2. In 2010, Wang Weihong sue to Chongqing Middle Court against Fangda
    Decoration – one of the Company’s subsidiaries, claiming for RMB17.07 million
    project payment and interests. This case was in trial process.
    (V) Investment in the report term, including holding of
    shares of other listed companies, commercial banks,
    securities companies, insurance companies, trust
    companies, future companies, and companies which is
    planning to place shares publicly.
    22
    In RMB
    Gain/loss Change of
    Book value at                                               Source
    Stock            Initial   Share                     of the    owners’       Accounting
    Stock ID                     the end of                                                   of
    Code           investment portion                    report equity in the      subject
    term                                                    shares
    term    report term
    ST                                                                                      Debt
    Available-for-sale
    600800 Magnetic 4,850,000.00 0.11% 4,312,000.00           0.00   -26,600.00                    paid in
    financial asset
    Card                                                                                    kind
    Total      4,850,000.00    -    4,312,000.00        0.00   -26,600.00          -            -
    (VI) Trading of other PLC’s shares in the report term:
    None
    (VII) Acquisition / selling of asset, intake, or merger
    event occurred during the report term.
    (1) The Company acquired no assets in the report term.
    (2) No disposal of assets in the report term.
    (VIII) No significant related transactions occurred
    during the report term
    (IX) Particulars about material contracts and their
    progress
    1. The Company has never been involved in such events as keeping as custodian,
    contracted or leased any other company’s assets and vice versa in the report period or
    extended from the previous years.
    2. Particulars about material contracts and their progress
    (1) Shenyang Xingmo’er Shopping Mall curtain wall project is proceeding as
    scheduled by the contract;
    (2) Shenzhen Jiali Plaza phase II is on schedule according to the contract.
    (3) China ASEAN (Liuzhou) Industry Product Trade Center curtain wall project was
    on schedule according to the contract;
    23
    (4) Sanya Phoenix Island International Resort apartment 1, 2, 3, and 4 curtain wall
    project is proceeding as scheduled by the contract;
    (5) Shenzhen Metro Line 1 screen door and safe door system, Shenzhen Metro Line 2
    east extension screen door system, and Shenzhen Metro Line 4 safe door system
    were completed and put into operation in June 2011.
    (6) Xi’an Metro Line 1 phase I PSD system was on schedule;
    (7) Wuhan Rail Line 2 phase I PSD system was on schedule;
    (8) Dalian Metro safe door system project was on schedule.
    3. No major cash asset was consigned to under administration of others in the report
    term
    (X) Special statement and independent opinions of the
    independent directors regarding adoption of capital by
    related parties and providing of external guarantee.
    According to the document issued by CSRC and State-owned Asset Commission
    (Zheng-Jian-Fa[2003]56), under the principle of practical and realistic, the we
    performed cautious inspection on the adoption of capital by related parties and
    providing of external guarantee, we deem:
    1. The Company has established a healthy financial system to prevent adoption of
    capital by the holding shareholder and its related parties and unfair related
    transactions. The Company hasn’t paid any wages, welfares, insurances, or
    commercial expenses on behalf of the holding shareholder or its associated parties.
    The Company conducted no operational capital transaction with any of the holding
    shareholder or its associated parties.
    2. The Company has been controlling the external guarantees strictly. In the report
    term, the Company hasn’t provided any guarantee to the holding shareholder or other
    related parties, any no-incorporated parties or individuals. None of the holding
    shareholder or its related parties has forced the Company to provide guarantee to any
    other parties. All of the guarantees were provided to the Company’s subsidiaries
    following statutory examination procedures. As of June 30, 2011, guarantees provided
    by the Company were as the followings:
    In RMB0’000
    External Guarantee (Exclude controlled subsidiaries)
    Date and Ref. of             Actual date of
    Amount of                      Actual                                      Related
    Guarantee      the announcement                 occurring                     Type of              Completed
    the                      amount of                   Term             party or
    provided to          about the                (signing date                  guarantee               or not
    guarantee                    guarantee                                      not
    guarantee                 of agreements
    Total of external guarantee
    Total of external guarantee approved in
    0.00 actually occurred in the                       0.00
    the report term (A1)
    report term (A2)
    Total of external guarantee
    Total of external guarantee approved as
    0.00 actually occurred as of end                    0.00
    of end of report term (A3)
    of report term (A4)
    24
    Guarantee provided to controlled subsidiaries
    Date and Ref. of           Actual date of
    Amount of                    Actual                                               Related
    Guarantee     the announcement               occurring                    Type of                       Completed
    the                     amount of                        Term                  party or
    provided to        about the               (signing date                 guarantee                        or not
    guarantee                  guarantee                                                not
    guarantee              of agreements
    since
    engage of
    "2010-2-12
    Fangda                                                                         Joint        contract to
    Announcement          20,000.00 Jun 29, 2010      18,879.94                              No        No
    Decoration                                                                     liabilities 2 years
    No. 2010-06
    upon due of
    debt
    since
    engage of
    "2011-3-2
    Fangda                                                                         Joint        contract to
    Announcement          12,000.00 Feb 18 2011        8,769.06                              No        No
    Decoration                                                                     liabilities 2 years
    No. 2011-02
    upon due of
    debt
    since
    engage of
    "2010-2-12
    Fangda                                                                         Joint        contract to
    Announcement          25,000.00 Jun 30 2010       15,740.08                              No        No
    Automatic                                                                      liabilities 2 years
    No. 2010-06
    upon due of
    debt
    since
    engage of
    "2010-2-12
    Fangda                                                                         Joint        contract to
    Announcement           6,000.00 Nov 03 2010        2,523.83                              No        No
    Automatic                                                                      liabilities 2 years
    No. 2010-06
    upon due of
    debt
    since
    engage of
    "2010-2-12
    Fangda New                                                                     Joint        contract to
    Announcement           5,000.00 Dec 13 2010        1,600.00                              No        No
    Materials                                                                      liabilities 2 years
    No. 2010-06
    upon due of
    debt
    since
    engage of
    "2011-3-2
    Fangda New                                                                     Joint        contract to
    Announcement           4,960.00 Jun 17 2011        3,351.91                              No        No
    Materials                                                                      liabilities 2 years
    No. 2011-02
    upon due of
    debt
    since
    engage of
    "2010-2-06
    Fangda New                                                                     Joint        contract to
    Announcement           2,700.00 Sept 29 2010       2,700.00                              No        No
    Materials                                                                      liabilities 2 years
    No. 2010-12
    upon due of
    debt
    since
    Fangda
    engage of
    Decoration,      August19, 2010
    Joint        contract to
    Fangda           Announcement          10,000.00 Sept 06 2010       1,651.87                              No        No
    liabilities 2 years
    Automatic,       No. 2010-27
    upon due of
    Fangda Group
    debt
    Total of guarantee to
    Total of guarantee to subsidiaries                                   subsidiaries actually
    143,000.00                                                35,369.93
    approved in the report term (B1)                                occurred in the report term
    (B2)
    Total of balance of guarantee
    Total of guarantee to subsidiaries                                 actually provided to the
    143,000.00                                                55,216.68
    approved as of the report term (B3)                                 subsidiaries as of end of
    report term (B4)
    Total of guarantee provided by the Company (i.e. total of the above two items)
    Total of guarantee approved in the report                            Total of guarantee occurred
    143,000.00                                                35,369.93
    term (A1+B1)                                           in the report term (A2+B2)
    Total of guarantee approved as of end of                            Total of guarantee occurred
    143,000.00                                                55,216.68
    report term (A3+B3)                                       as of the end of report term
    25
    Percentage of the total guarantee occurred (A4+B4) on net asset of the
    52.29%
    Company
    In which:
    Guarantees provided to the shareholders, substantial controllers and the
    0.00
    related parties (C)
    Guarantee provided directly or indirectly to objects with over 70% of
    0.00
    liability on asset ratio (D)
    Amount of guarantee over 50% of the net asset (E)                                2,413.74
    Total of the above 3 * (C+D+E)                                                   2,413.74
    Statement on the possible joint liabilities on the guarantees not due yet None
    26
    (XI) In the report term, no commitment issues made by
    the Company or shareholders with over 5% of shares
    which have significant influence on the Company’s
    business      performance    or   financial    status.    No
    additional    commitment     on    shares     with    selling
    restrictions by shareholders with over 5% of the
    Company’s shares.
    (XII) In the report term, none of the shareholders with
    over     30% of   shares    proposed or implemented
    share-increasing action.
    (XIII)   No   compensations       on   the    gains      from
    commitment of related parties about the Company’s
    share relocating scheme or major capital relocation
    scheme in the report term.
    (XIV) The Financial Report carried in this Interim
    Report was not audited by CPAs. The Company didn’t
    replaced the CPAs in the report term.
    27
    (XV) In the report term, none of the directors,
    supervisors, executives, shareholders, substantial
    dominators, buyer of the Company was investigated
    by relative departments, executed by legal & discipline
    departments, delivered to legal departments, appeared
    for   crime,    investigated        or   punished     by   China
    Securities     Regulatory   Commission,          restricted   to
    security market, criticized publicly, regarded as
    improper       person,   punished        by   other   executive
    departments, or publicly condemned by the Stock
    Exchange.
    28
    (XVI) Reception of field research:
    Main content involved
    Time/date     Place   Way                     Visitors
    and material provided
    March 10, The     Field       Orient Securities Ltd., Guangzhou   Business operation and
    2011      Company research    Pearl River Asset Management Ltd.   future development.
    Shenyin Wanguo Securities, Hualin
    March 18, The     Field                                           Business operation and
    Securities, Guangdong Andexin
    2011      Company research                                        future development.
    Development Ltd.
    (XVII) Statutory reports and provisional reports in the
    report term:
    No.         Content         Date       of Press media                         Page No.
    publishing
    China Securities Journal          B004
    Announcement                          Securities Times                   D9
    2011-01  of Business
    2011.1.12        Shanghai Securities Daily         B14
    Growth
    Hong Kong Commercial              A18
    Daily (English)
    Resolutions of                        China Securities Journal          B012
    the 28th                         Securities Times                  D21
    2011-02
    Meeting of the        2011.3.4        Shanghai Securities Daily         B25
    5th Term of                        Hong Kong Commercial               A8
    Board                           Daily (English)
    Statement of                         China Securities Journal          B012
    the nominators                        Securities Times                  D21
    of independent                        Shanghai Securities Daily         B25
    2011-03
    directors and        2011.3.4
    Hong Kong Commercial               A9
    the
    Daily (English)
    independent
    directors
    Announcement                          China Securities Journal          B012
    2011-04
    of Resolutions        2011.3.4        Securities Times                  D21
    of the 13th                        Shanghai Securities Daily         B25
    29
    Meeting of the                    Hong Kong         Commercial   A9
    5th Term of                      Daily (English)
    Supervisory
    Committee
    China Securities Journal   B012
    Announcement                        Securities Times            D21
    2011-05  of electing
    2011.3.4         Shanghai Securities Daily   B25
    employee’s
    supervisor                        Hong Kong Commercial        A9
    Daily (English)
    Notice for                      China Securities Journal   B012
    calling of the                    Securities Times            D21
    2011-06
    shareholders’   2011.3.4         Shanghai Securities Daily   B25
    meeting 2010                      Hong Kong Commercial        A9
    Daily (English)
    China Securities Journal   B011
    Summary of                       Securities Times          D21,D23
    2011-07   Annual Report
    2011.3.4         Shanghai Securities Daily B25,B26
    2010
    Hong Kong Commercial        A7
    Daily (English)
    Announcement                        China Securities Journal   B004
    on Returning                       Securities Times            D7
    2011-08   of Capital                        Shanghai Securities Daily   B44
    2011.3.24
    Raised by
    Hong Kong Commercial        A13
    Share Issuing
    Daily (English)
    The                           China Securities Journal       B226
    Resolutions of                    Securities Times               B10
    2011-09
    Shareholders’   2011.3.26        Shanghai Securities Daily       126
    Meeting 2010                      Hong Kong Commercial            A7
    Daily (English)
    Resolutions of                      China Securities Journal       B226
    the 1st Meeting                     Securities Times               B10
    2011-10
    of the 6th Term    2011.3.26        Shanghai Securities Daily       126
    of Board                        Hong Kong Commercial            A7
    Daily (English)
    Resolutions of                    China Securities Journal       B226
    the 1st                       Securities Times               B10
    Meeting of the                    Shanghai Securities Daily       126
    2011-11
    6th Term of     2011.3.26
    Hong Kong Commercial            A7
    Supervisory
    Daily (English)
    Committee
    Announcement                      China Securities Journal       B226
    2011-12
    on Temporally    2011.3.26        Securities Times
    Using Idle                      Shanghai Securities Daily      126
    30
    Capital Raised                      Hong Kong          Commercial   A7
    as Working                         Daily (English)
    Capital Once
    Again
    Announcement                        Securities Times                D51
    of Winning of                       Shanghai Securities Daily       B63
    2011-13    Bidding                          Hong Kong Commercial            A20
    2011.4.1
    Competition                        Daily (English)
    and Engaging                        China Securities Journal        B008
    of Contracts
    Announcement                        Securities Times                D10
    of Winning of                       Shanghai Securities Daily       B12
    2011-14    Bidding                          Hong Kong Commercial            A9
    2011.4.14
    Competition                        Daily (English)
    and Engaging                        China Securities Journal        B004
    of Contracts
    Securities Times                D7
    Announcement                        Shanghai Securities Daily       B112
    of capitalizing
    2011-15
    of capital      2011.4.20        Hong Kong          Commercial   A5
    reserves                         Daily (English)
    China Securities Journal        A30
    Securities Times                D90
    Shanghai Securities Daily       B187
    The 1st
    2011-16     Quarterly
    2011.4.22        Hong Kong          Commercial   A22
    Report 2011
    Daily (English)
    China Securities Journal        B140
    Securities Times                D90
    Resolutions of
    Shanghai Securities Daily       B187
    the 2nd
    2011-17   Meeting of the
    2011.4.22        Hong Kong          Commercial   A22
    6th Term of
    Daily (English)
    Board
    China Securities Journal        B140
    Announcement                        Securities Times                D14
    2011-18 of Winning of
    2011.6.21
    Bidding                             Shanghai Securities Daily       B24
    Competition
    31
    and Engaging                     Hong Kong         Commercial   A16
    of Contracts                     Daily (English)
    China Securities Journal       A29
    All of the above announcements are available in the website assigned by China
    Securities Regulatory Commission: www.cninfo.com.cn
    VI. Financial Report
    (Not Audited)
    1. Financial Statements (Not audited, enclosed)
    2. Notes to Financial Statements (enclosed)
    32
    VII. Document Ready for Inquiring
    1. Semi-annual Report carried with personal signature
    and seal of the Chairman of the Board;
    2. Accounting Statements with signatures and seals of
    the legal representative and financial principal and
    chief of accounting department;
    3. 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.
    4. The Article of Association of the Company adopted
    by the latest Shareholders’ General Meeting.
    Legal representative: Xiong Jianming
    The Board of Directors of
    China Fangda Group Co., Ltd.
    July 29 2011
    33
    Balance Sheet
    Prepared by: China Fangda Group Co., Ltd.                                 June 30th 2011
    in RMB yuan
    Balance at the end of term        Balance at the beginning of year
    Items
    Consolidated       Parent company Consolidated Parent company
    Current asset:
    Monetary capital                     442,490,831.45     34,284,968.42 506,295,863.70 30,547,718.91
    Settlement provision
    Outgoing call loan
    Transactional financial assets
    Notes receivable                       1,550,000.00                     16,491,007.92
    Account receivable                   492,830,911.53      6,195,719.35 396,673,564.76       7,917,726.90
    Prepayment                            34,525,862.83         250,000.00  20,266,020.05        366,736.00
    Insurance receivable
    Reinsurance receivable
    Provisions of Reinsurance
    contracts receivable
    Interest receivable                    1,138,888.88                         51,300.00
    Dividend receivable                                     26,936,500.00                     43,936,500.00
    Other account receivable              51,503,441.54 209,634,878.63      39,235,264.87 200,454,969.75
    Repurchasing of financial assets
    Inventories                          248,191,919.72                    280,285,486.41
    Non-current asset due in 1 year
    Other current asset
    Total of current asset               1,272,231,855.95 277,302,066.40 1,259,298,507.71 283,223,651.56
    Non-current assets
    Disburse of consigned loans
    Available-for-sale financial asset     4,312,000.00      4,312,000.00    4,347,000.00      4,347,000.00
    Expired investment in possess
    Long-term receivable
    Long-term share equity
    658,733,745.58                    658,733,745.58
    investment
    Investment properties                274,539,465.81 265,380,365.81 271,226,332.73 262,602,432.73
    Fixed assets                                            57,877,748.34   240,554,714.52   56,934,198.94
    304,929,329.34
    Construction in process                                     87,378.64    56,762,380.64       87,378.64
    26,674,644.86
    Engineering goods
    Fixed asset disposal                    1,442,705.89                       586,285.67
    Production physical assets
    Gas & petrol
    Intangible assets                     112,597,828.53    10,143,092.40   114,530,578.15   10,323,163.72
    R&D expense                               905,133.30                      1,182,970.28
    Goodwill                                8,197,817.29                      8,197,817.29
    Long-term amortizable expenses          2,860,664.65                      3,062,071.65
    Deferred income tax asset              31,457,030.17    15,029,610.93    31,412,500.20   15,161,997.10
    Other non-current asset
    Total of non-current assets             767,916,619.84 1,011,563,941.70 731,862,651.13 1,008,189,916.71
    Total of assets                       2,040,148,475.79 1,288,866,008.10 1,991,161,158.84 1,291,413,568.27
    Current liabilities
    Short-term loans                      383,000,000.00   200,000,000.00   397,000,000.00 200,000,000.00
    Loan from Central Bank
    Deposit received and hold for
    others
    34
    Call loan received
    Trade off financial liabilities
    Notes payable                          41,652,568.77                      60,226,018.65
    Account payable                       264,658,302.20      1,851,490.36   296,531,749.82    1,901,490.41
    Prepayment received                    90,207,461.25        693,045.60    48,308,874.47      715,925.50
    Selling of repurchased financial
    assets
    Fees and commissions receivable
    Employees’ wage payable               11,043,615.29       406,934.91     14,047,721.00      881,767.40
    Tax payable                            26,999,435.45       885,778.96     21,520,643.71      930,370.30
    Interest payable                          548,793.05       280,250.00        610,850.84      308,275.00
    Dividend payable
    Other account payable                  48,298,812.20     61,967,412.59    25,384,587.91   70,841,835.18
    Reinsurance fee payable
    Insurance contract provision
    Entrusted trading of securities
    Entrusted selling of securities
    Non-current liability due in 1
    year
    Other current liability
    Total of current liability               866,408,988.21    266,084,912.42   863,630,446.40 275,579,663.79
    Non-current liabilities
    Long-term borrowings
    Bond payable
    Long-term payable
    Special payable
    Expectible liabilities                    883,881.35                         347,657.52
    Deferred income tax liability          29,869,048.72     29,351,087.57    28,289,997.60 27,852,316.45
    Other non-recurring liabilities         4,564,850.00                       4,564,850.00
    Total of non-current liabilities          35,317,780.07     29,351,087.57    33,202,505.12 27,852,316.45
    Total of liability                       901,726,768.28    295,435,999.99   896,832,951.52 303,431,980.24
    Owners’ equity (or shareholders’
    equity)
    Capital paid in (or share capital)    756,909,905.00    756,909,905.00   504,606,604.00 504,606,604.00
    Capital reserves                       82,104,113.92     42,703,458.54   334,434,014.92 295,033,359.54
    Less: Shares in stock
    Special reserves
    Surplus reserves                       17,834,977.97     17,834,977.97    17,834,977.97   17,834,977.97
    Common risk provision
    Retained profit                       199,209,840.44    175,981,666.60   153,115,142.18 170,506,646.52
    Different of foreign currency
    translation
    Total of owner’s equity belong to
    1,056,058,837.33   993,430,008.11 1,009,990,739.07 987,981,588.03
    the parent company
    Minor shareholders’ equity                82,362,870.18                     84,337,468.25
    Total of owners’ equity                1,138,421,707.51   993,430,008.11 1,094,328,207.32 987,981,588.03
    Total of liabilities and owners’
    2,040,148,475.79 1,288,866,008.10 1,991,161,158.84 1,291,413,568.27
    equity
    35
    Income Statement
    Prepared by: China Fangda Group Co., Ltd.                  Jan-Jun 2011               RMB
    Yuan
    Amount of the Current Term Amount of the Previous Term
    Items                                    Parent                       Parent
    Consolidated                 Consolidated
    company                      company
    I. Total revenue                             579,154,393.68 20,049,926.08 423,379,762.74 18,558,245.60
    Incl. Business income                        579,154,393.68 20,049,926.08 423,379,762.74 18,558,245.60
    Interest income
    Insurance fee earned
    Fee and commission received
    II. Total business cost                      534,439,453.17 17,513,082.25 409,935,200.30 18,620,458.50
    Incl. Business cost                          460,275,267.38 5,151,318.51 339,167,650.59 4,777,841.15
    Interest expense
    Fee and commission paid
    Insurance discharge payment
    Net claim amount paid
    Net insurance policy reserves
    provided
    Insurance policy dividend paid
    Reinsurance expenses
    Business tax and surcharge            8,780,225.31 1,197,342.53 7,268,385.20       736,359.67
    Sales expense                        14,037,722.42    251,166.98 12,733,055.35     604,810.28
    Administrative expense               46,225,304.98 9,792,692.82 39,721,901.51 9,680,484.63
    Financial expenses                    8,807,786.28 1,922,691.95 10,189,597.13 3,061,119.80
    Asset impairment loss                -3,686,853.20 -802,130.54        854,610.52 -240,157.03
    Plus: Gains from change of fair value “-
    5,082,327.66 4,547,127.66 6,553,456.32 6,498,256.32
    “ for loss)
    Investment gain (“-“ for loss)         15,342.47                  3,174,066.97
    Incl. Investment gains from
    affiliates
    Gains from currency exchange (“-
    “ for loss)
    III. Operational profit (“-“ for loss)      49,812,610.64 7,083,971.49 23,172,085.73 6,436,043.42
    Plus: Non business income                   5,461,800.64    461,369.27 14,744,047.55 3,452,536.32
    Less: Non-business expenses                   589,873.95    430,763.39 1,130,612.42      400,960.00
    Incl. Loss from disposal of
    non-current assets
    IV. Gross profit (“-“ for loss)             54,684,537.33 7,114,577.37 36,785,520.86 9,487,619.74
    Less: Income tax expenses                  10,564,437.14 1,639,557.29 6,486,285.83 3,551,087.99
    V. Net profit (“-“ for net loss)            44,120,100.19 5,475,020.08 30,299,235.03 5,936,531.75
    Net profit attributable to the owners
    46,094,698.26 5,475,020.08 33,608,581.42 5,936,531.75
    of parent company
    Minor shareholders’ equity             -1,974,598.07                 -3,309,346.39
    VI. Earnings per share:
    (I) Basic earnings per share                    0.061                         0.049
    (II) Diluted earnings per share                 0.061                         0.049
    VII. Other misc. incomes                         -26,600.00    -26,600.00 -7,296,195.48    -325,200.55
    VIII. Total of misc. incomes                  44,093,500.19 5,448,420.08 23,003,039.55 5,611,331.20
    Total of misc. incomes attributable to
    46,068,098.26 5,448,420.08 26,312,385.94 5,611,331.20
    the owners of the parent company
    Total misc gains attributable to the
    -1,974,598.07                 -3,309,346.39
    minor shareholders
    36
    Cash Flow Statement
    Prepared by: China Fangda Group Co., Ltd.                  Jan-Jun 2011               RMB
    Yuan
    Amount of the Current Term Amount of the Previous Term
    Items                                      Parent                       Parent
    Consolidated                 Consolidated
    company                      company
    I. Net cash flow from business operation
    Cash received from sales of products and
    572,717,719.70 20,736,668.55 392,653,009.60 16,630,116.26
    providing of services
    Net increase of customer deposits and
    capital kept for brother company
    Net increase of loans from central bank
    Net increase of inter-bank loans from
    other financial bodies
    Cash received against original insurance
    contract
    Net cash received from reinsurance
    business
    Net increase of client deposit and
    investment
    Net increase of trade financial asset
    disposal
    Cash received as interest, processing fee,
    and commission
    Net increase of inter-bank fund received
    Net increase of repurchasing business
    Tax returned                                 2,196,998.64                   239,302.17
    Other cash received from business
    34,846,329.66 1,088,056.36 39,549,834.46 5,304,349.62
    operation
    Sub-total of cash inflow from business
    609,761,048.00 21,824,724.91 432,442,146.23 21,934,465.88
    activities
    Cash paid for purchasing of merchandise
    483,715,194.88 5,182,338.56 346,365,488.62 6,267,741.94
    and services
    Net increase of client trade and advance
    Net increase of savings in central bank
    and brother company
    Cash paid for original contract claim
    Cash paid for interest, processing fee and
    commission
    Cash paid for policy dividend
    Cash paid to staffs or paid for staffs      44,761,059.84 4,010,180.73 32,596,329.65 2,943,955.51
    Taxes paid                                  30,109,619.02 1,967,285.81 34,980,004.22 2,108,963.92
    Other cash paid for business activities     63,335,464.74 5,435,520.75 58,027,646.80 8,989,344.74
    Sub-total of cash outflow from
    621,921,338.48 16,595,325.85 471,969,469.29 20,310,006.11
    business activities
    Cash flow generated by business
    -12,160,290.48 5,229,399.06 -39,527,323.06 1,624,459.77
    operation, net
    II. Cash flow generated by investing
    Cash received from investment retrieving                                    854,089.54
    Cash received as investment gains               15,342.47 17,000,000.00 3,176,516.97 31,615,965.05
    37
    Net cash retrieved from disposal of fixed
    assets, intangible assets, and other long-term          9,372.00        8,040.00     2,372,184.95
    assets
    Net cash received from disposal of
    subsidiaries or other operational units
    Other investment-related cash received
    Sub-total of cash inflow due to
    24,714.47   17,008,040.00     6,402,791.46 31,615,965.05
    investment activities
    Cash paid for construction of fixed assets,
    16,693,359.70      429,778.00 17,353,594.62      1,125,645.91
    intangible assets and other long-term assets
    Cash paid as investment
    Net increase of loan against pledge
    Net cash received from subsidiaries and
    other operational units
    Other cash paid for investment activities
    Sub-total of cash outflow due to
    16,693,359.70      429,778.00 17,353,594.62      1,125,645.91
    investment activities
    Net cash flow generated by
    -16,668,645.23   16,578,262.00 -10,950,803.16 30,490,319.14
    investment
    III. Cash flow generated by financing
    Cash received as investment                                                  340,499,960.00 340,499,960.00
    Incl. Cash received as investment from
    minor shareholders
    Cash received as loans                       90,000,000.00                   276,000,000.00 152,821,754.51
    Cash received from bond placing
    Other financing-related cash received                                              3,765.25
    Subtotal of cash inflow from financing
    90,000,000.00                   616,503,725.25 493,321,714.51
    activities
    Cash to repay debts                         104,000,000.00   12,847,054.29 266,000,000.00 210,000,000.00
    Cash paid as dividend, profit, or interests 10,220,855.72     5,100,550.00 9,008,860.25 5,156,671.25
    Incl. Dividend and profit paid by
    subsidiaries to minor shareholders
    Other cash paid for financing activities        111,983.72      111,983.72     2,978,629.66   2,978,629.66
    Subtotal of cash outflow due to
    114,332,839.44   18,059,588.01 277,987,489.91 218,135,300.91
    financing activities
    Net cash flow generated by
    -24,332,839.44   -18,059,588.01 338,516,235.34 275,186,413.60
    financing
    IV. Influence of exchange rate alternation on
    -7,826.45                       -12,216.25           2.70
    cash and cash equivalents
    V. Net increase of cash and cash equivalents      -53,169,601.60    3,748,073.05 288,025,892.87 307,301,195.21
    Plus: Balance of cash and cash
    468,878,715.15   30,252,759.44 210,823,550.83 42,024,488.50
    equivalents at the beginning of term
    VI. Balance of cash and cash equivalents at the
    415,709,113.55   34,000,832.49 498,849,443.70 349,325,683.71
    end of term
    38
    Consolidated Statement of Change in Owners’ Equity
    Prepared by: China Fangda Group Co., Ltd.                           Interim 2011                      RMB Yuan
    Amount of the Current Term                                                                 Amount of Last Year
    Owners’ Equity Attributable to the Parent Company                                    Owners’ Equity Attributable to the Parent Company
    Capital                                                              Minor Total of   Capital                                                              Minor Total of
    Items                                                         Comm                      shareho owners                                              Comm                      shareho owners
    paid in Capital Less: Special Surplus                                                 paid in Capital Less: Special Surplus
    on risk Retaine           lders’ ’                                                  on risk Retaine           lders’ ’
    (or reserve Shares reserve reserve                       Others                       (or reserve Shares reserve reserve                       Others
    provisi d profit                                                                      provisi d profit
    share     s    in stock   s       s                                 equity equity     share      s    in stock  s       s                                 equity equity
    on                                                                                    on
    capital)                                                                              capital)
    504,60 334,43                                     153,11                   1,094,3    426,78                                            102,52                    714,41
    I. Balance at the end of last                                   17,834,                             84,337,                    80,622,                13,360,                             91,114,
    6,604.0 4,014.9                                   5,142.1                   28,207.   6,359.0                                           6,565.0                   0,289.6
    year                                                             977.97                              468.25                     488.67                 180.84                             696.12
    0      2                                          8                      32           0                                                 6                        9
    Plus: Change of
    accounting policy
    Correcting of previous
    errors
    Others
    504,60    334,43                                  153,11                   1,094,3 426,78                                               102,52                    714,41
    II. Balance at the beginning                                     17,834,                            84,337,                 80,622,                    13,360,                            91,114,
    6,604.0   4,014.9                                 5,142.1                   28,207. 6,359.0                                             6,565.0                   0,289.6
    of current year                                                   977.97                             468.25                  488.67                     180.84                            696.12
    0         2                                       8                        32       0                                                   6                         9
    252,30   -252,32                                                                            253,81                                                                379,91
    III. Changed in the current                                                       46,094,           -1,974, 44,093, 77,820,                            4,474,7          50,588,           -6,777,
    3,301.0   9,901.0                                                                           1,526.2                                                               7,917.6
    year (“-“ for decrease)                                                          698.26            598.07 500.19 245.00                                97.13           577.12           227.87
    0         0                                                                                 5                                                                     3
    46,094,           -1,974, 44,120,                                                     55,063,           -6,777, 48,286,
    (I) Net profit
    698.26            598.07 100.19                                                       374.25           227.87 146.38
    -26,600                                                           -26,600         -4,955,                                                               -4,955,
    (II) Other misc. income
    .00                                                               .00          100.48                                                                100.48
    -26,600                                 46,094,           -1,974, 44,093,         -4,955,                                     55,063,           -6,777, 43,331,
    Total of (I) and (II)
    .00                                  698.26            598.07 500.19           100.48                                      374.25           227.87 045.90
    (III) Investment or                                                                                                        288,64                                                                336,58
    47,945,
    decreasing of capital by                                                                                                    1,671.7                                                               6,871.7
    200.00
    owners                                                                                                                            3                                                                     3
    288,64                                                                336,58
    1. Capital inputted by                                                                                          47,945,
    1,671.7                                                               6,871.7
    owners                                                                                                               200.00
    3                                                                     3
    2. Amount of shares
    paid and accounted as
    owners’ equity
    3. Others
    39
    4,474,7   -4,474,
    (IV) Profit allotment
    97.13   797.13
    1. Providing of surplus                                                                              4,474,7   -4,474,
    reserves                                                                                                    97.13   797.13
    2. Common risk
    provision
    3. Allotment to the
    owners (or shareholders)
    4. Others
    252,30   -252,30
    (V) Internal transferring of                                                         29,875, -29,875
    3,301.0   3,301.0
    owners’ equity                                                                          045.00 ,045.00
    0         0
    252,30   -252,30
    1. Capitalizing of capital                                                         29,875, -29,875
    3,301.0   3,301.0
    reserves (or to capital shares)                                                          045.00 ,045.00
    0         0
    2. Capitalizing of
    surplus reserves (or to capital
    shares)
    3. Making up losses by
    surplus reserves
    4. Others
    (VI) Special reserves
    1. Provided this year
    2. Used this term
    (VII) Others
    756,90                        199,20           1,138,4 504,60 334,43                153,11           1,094,3
    IV. Balance at the end of this            82,104,   17,834,             82,362,                           17,834,             84,337,
    9,905.0                       9,840.4           21,707. 6,604.0 4,014.9             5,142.1           28,207.
    term                                       113.92    977.97              870.18                            977.97              468.25
    0                             4               51        0       2                   8               32
    40
    Change in Owners’ Equity (Parent Co.)
    Prepared by: China Fangda Group Co., Ltd.                         Interim 2011                    RMB Yuan
    Amount of the Current Term                                                         Amount of Last Year
    Capital                                                              Total of  Capital                                                               Total of
    Less:                       Common                                             Less:                        Common
    Items                paid in   Capital            Special Surplus              Retained             paid in   Capital             Special Surplus              Retained
    Shares in                       risk             owners’                      Shares in                        risk             owners’
    (or share reserves            reserves reserves              profit            (or share reserves             reserves reserves              profit
    stock                       provision             equity                       stock                        provision             equity
    capital)                                                                       capital)
    I. Balance at the end of last   504,606,6 295,033,3                    17,834,97           170,506,6 987,981,5 426,786,3 35,682,21                     13,360,18           130,233,4 606,062,2
    year                                04.00     59.54                         7.97               46.52     88.03     59.00      3.36                          0.84               72.40     25.60
    Plus: Change of
    accounting policy
    Correcting of previous
    errors
    Others
    II. Balance at the beginning    504,606,6 295,033,3                    17,834,97           170,506,6 987,981,5 426,786,3   35,682,21                   13,360,18          130,233,4 606,062,2
    of current year                     04.00     59.54                         7.97               46.52     88.03     59.00        3.36                        0.84              72.40     25.60
    III. Changed in the current     252,303,3 -252,329,                                        5,475,020 5,448,420 77,820,24   259,351,1                   4,474,797          40,273,17 381,919,3
    year (“-“ for decrease)           01.00   901.00                                               .08       .08      5.00       46.18                         .13               4.12     62.43
    5,475,020 5,475,020                                                            44,747,97 44,747,97
    (I) Net profit
    .08       .08                                                                 1.25      1.25
    -26,600.0                                                  -26,600.0             584,519.4                                                584,519.4
    (II) Other misc. income
    0                                                          0                     5                                                        5
    -26,600.0                                        5,475,020 5,448,420             584,519.4                                      44,747,97 45,332,49
    Total of (I) and (II)
    0                                              .08       .08                     5                                           1.25      0.70
    (III) Investment or
    47,945,20 288,641,6                                                     336,586,8
    decreasing of capital by
    0.00     71.73                                                         71.73
    owners
    1. Capital inputted by                                                                                    47,945,20 288,641,6                                                     336,586,8
    owners                                                                                                              0.00     71.73                                                         71.73
    2. Amount of shares
    paid and accounted as
    owners’ equity
    3. Others
    4,474,797           -4,474,79
    (IV) Profit allotment
    .13                7.13
    1. Providing of surplus                                                                                                                           4,474,797           -4,474,79
    41
    reserves                                                                                                          .13        7.13
    2. Common risk
    provision
    3. Allotment to the
    owners (or shareholders)
    4. Others
    (V) Internal transferring of 252,303,3 -252,303,                                  29,875,04 -29,875,0
    owners’ equity                     01.00   301.00                                        5.00     45.00
    1. Capitalizing of capital 252,303,3 -252,303,                                  29,875,04 -29,875,0
    reserves (or to capital shares)     01.00   301.00                                        5.00     45.00
    2. Capitalizing of
    surplus reserves (or to capital
    shares)
    3. Making up losses by
    surplus reserves
    4. Others
    (VI) Special reserves
    1. Provided this year
    2. Used this term
    (VII) Others
    IV. Balance at the end of this 756,909,9 42,703,45    17,834,97   175,981,6 993,430,0 504,606,6 295,033,3   17,834,97   170,506,6 987,981,5
    term                                05.00      8.54        7.97       66.60     08.11     04.00     59.54        7.97       46.52     88.03
    42
    China Fangda Group Co., Ltd.
    Notes to Financial Statements
    I n t e r i m 2 0 11
    Prepared by: China Fangda Group Co., Ltd.                                          I n R M B Yu a n
    I. I. General Information
    China Fangda Group Co., Ltd. (the “Company”, or the “Group”) was approved by the Government
    of Shenzhen with Document 深府办函(1995)194 号, and was founded, on the basis of Shenzhen
    Fangda Construction Material Co., Ltd., by way of share issuing in October 1995.
    The Company issued foreign currency shares (B shares) and local currency shares (A shares) and
    listed in November 1995 and April 1996 respectively in Shenzhen Stock Exchange. On June 12, 1997, as
    approved by Shenzhen Bureau of Commerce with Document 深招商复[1997]0192 号, the Company
    was re-registered to a sino-foreign joint venture. Registration routines were completed with Shenzhen
    Commerce and Industry Administration on November 12, 1997. In October 1999, the Company started
    to use the current name.
    On May 11, 2011, as approved by Shenzhen Science, Technologies, Industry, Trading, and IT
    Committee with document 深科工贸信资字[2011]0755 号, the registered capital of the Company was
    increased from RMB504.606604 million to RMB756.909905 million. On May 13, 2011, the Company
    was granted the “Certificate of Enterprise Invested by Citizens from Taiwan, Hong Kong, and Macao”
    by the Government of Shenzhen titled 商外资资审 A 字〔2000〕0025 号, and the share capital was
    increased to RMB756.909905 million.
    The Company holds the business registration number of 440301501124785, and registered address
    of Fangda Building, Kejinan Road 12, High-tech Zone, Shenzhen. Mr. Xiong Jianming is the legal
    representative.
    Our business include new-type building materials, composite materials, metal wares, metal frames,
    environmental equipment and apparatus, fire fighting equipment, optical-mechanical-electrical
    integrated products, polymer materials and their products, fine chemical products, mechanical equipment,
    optical materials and devices, electronic displayer, audio-visual device, transport facilities (exclude
    restricted items and produces under export certification, and their design, developing, installation,
    construction, technical consulting, and training. Managing and leasing of properties under possession
    (Fangda Building at Ke-Ji-Nan Road 12, and Fangda Town at Longzhu Road 4), parking services of
    Fangda Building.
    II. Main Accounting Policies, Estimations and Retrospecting of Previous
    Accounting Errors
    (1) Basis for the preparation of financial statements
    43
    Preparing of the financial statements was on the assumption of the Company’s perpetual operation,
    according to the trades and events practically happened, complying with the Enterprise Accounting
    Standard issued by the Department of Finance and relative application guidance. Accounting estimations
    and assumptions are used in preparing the financial statements with compliance to the Enterprise
    Accounting Standard, which will make influences on the assets, liabilities or contingent liabilities at the
    financial statement date, as well as the income and expenses in the report term.
    (2) Statement of compliance to the Enterprise Accounting Standard
    The financial report and statements are prepared with compliance to the requirement of the
    Enterprise Accounting Standard. They are reflecting the financial position at June 30, 2011, and business
    performance and cash flow situation of Jan-Jun 2011 of the Company frankly and completely.
    (3) Fiscal period
    The fiscal year of the Group is the solar calendar year, that is from January 1 to December 31.
    (4) Standard currency for bookkeeping
    The Company takes RMB as the standard currency for bookkeeping.
    (5) Accounding treatment of the entities under common control and different control as well
    1.   Consolidation of entities under common control
    Assets and liabilities obtained by the merging party are calculated at their book value with the
    merged parties at the merger day. The differences between the book value of net assets and the book
    value of consideration price (or the total of face value of share issued) are adjusted to the share capital
    premium under the capital reserves. If the share capital premium is not enough to neutralize the
    difference, it will be adjusted to the retained gains.
    2.   Consolidation of entities under different control
    For merger of entities under different control, the merger cost is the fair value of the asset paid,
    liability undertaken, and equity securities issued for exchanging of control power over the entities at the
    day of acquisition.
    When a merger of entity under different control is undertaken through multiple trades, accounting
    treatments will be carried out separately on individual and consolidated financial statements as the
    followings:
    (1) In the individual financial statements, the initial investment cost of the particular project will be
    the sum of book value of equity in the entity before the date of acquisition and the newly added
    investment cost; When the share equity before the date of acquisition involves with other integrated
    gains, such gains (such as the part of fair value of the sellable financial assets accounted into capital
    reserves, same for the followings) are transferred into current investment income account.
    (2) In the consolidated financial statements, the share equity in the acquired entity before the date of
    acquisition is recalculated upon the fair value of the equity at the date of acquisition. The balance
    between the fair value and book value shall be accounted into current investment income account; When
    44
    the share equity before the date of acquisition involves with other integrated gains, such gains are
    transferred into investment income account of the period when it occurred.
    Agency expenses and other administrative expenses such as auditing, legal consulting, or appraisal
    services occurred relating to the merger of entities are accounted into current income account when
    occurred; the transaction fees of equity certificates or liability certificates issued by the purchaser for
    payment for the acquisition are accounted at the initial amount of the certificates.
    For merger of enterprises under common control, the merger cost is the fair value of capital paid,
    liability occurred or undertaken, or equity instrument issued thereof, on the day of purchasing to obtain
    power of control over the bought party, and those expenses directly related to the merger. For merger
    done through multiple trades, the overall cost is the sum of cost of each single trade. If the merger
    contract provided faith on future events that may influence the merger cost, and the event has great
    possibility to happen, and its influence may be reliably measured, then it will be accounted into merger
    cost.
    (6) Preparation of Consolidated Financial Statements
    Consolidation range is determined on the basis of control power for the consolidated financial
    statements.
    The Financial Statements of the Company are prepared according to “Enterprise Accounting
    Standard No.33 – Consolidated Financial Statements” and relative rules. All major trades and
    interchanges within the consolidation range have been neutralized. The part of shareholders’ equities not
    attributable to the parent company are presented individually as minority shareholders’ equity in the
    consolidated financial statements.
    When the accounting policies and periods of the subsidiaries are not complying with those of the
    Company’s, they shall be adjusted according to the Company’s accounting policy and accounting period.
    Subsidiaries added as merger of enterprises under different control, the individual statement shall be
    adjusted basing on the recognizable net asset fair value at the day of purchasing; subsidiaries added as
    merger of enterprise under common control, it will be regarded as existing since the contol power is
    acquired, the initial figures of the consolidated balance sheet will be adjusted as well as the related items.
    (7) Recognition of cash and cash equivalents
    Cash equivalent in cash flow statement refers to the investments with short term, strong liquidity
    and small risk of value fluctuation that are held by the Company and easily converted into cash with
    known amount.
    (8) Foreign currencies
    Trades of the Company made in foreign currencies are translated into RMB basing on the middle
    rate announced by China Foreign Currency Trading Center which is authorized by People’s Bank of
    China at the date when the trade is conducted. At the balance sheet date, foreign currency items are
    translated on the middle rate announced by China Foreign Currency Trading Center, the translation
    differences, except for those constructed or produced and can be capitalized directly into relative capital
    45
    costs, are accounted into current gain/loss account. Non-monetary items accounted in foreign currency
    and on historical costs, are still use the middle rate announced by China Foreign Currency Trading
    Center, and the amount in standard currency will not be changed.
    (9) Financial instrument
    1.   Classification, recognition and measuring basis of financial instruments
    Financial assets are categorized as: financial assets measured at fair value with
    variations   accounted into current income account, account receivable (see Note II (X) for
    details), and disposable financial assets. Categorizing of financial assets are decided by the
    intention and capability of holding of the financial assets by the Company or its
    subsidiaries.
    The Company has financial liabilities including: financial liabilities and other financial liabilities
    accounted into current gain/loss account at fair value.
    (1) Financial assets measured at fair value with variations accounted into current income
    account
    Including transactional financial assets and financial assets directly measured by fair value and with
    variations accounted into current gain/loss account, which are initially recognized at the fair value when
    obtained, the related transaction expenses are accounted into current income account when occurred. Cash
    dividend and bond interests included in the prices paid which are announced but not distributed are
    recognized as receivable items individually.   Interests or cash dividends received during the period
    of holding the particular financial assets are recognized as investment gains when received.
    At the balance sheet day, the fair values of such financial assets are accounted into current
    income account. At disposal of such financial assets, the differences between the fair value
    and initial booked value are recognized as investment gains, and the fair value fluctuation
    gain/loss will be adjusted accordingly.
    (2) Sellable financial asset
    Sellable financial asset refers to those sellable non-derivate financial assets recognized initially,
    namely the Company does not elicit financial assets accounted by fair value with variations accounted
    into current income account, investment hold to expiration, loans, and receivables.
    Sellable financial assets are initialised at the sum of fair value and related transaction costs when
    obtained. Due bond interests or cash dividend included in the payment that are announced but not
    distributed are recognized as receivables individually. Interests or cash dividends received during the
    period of holding the sellable financial assets are recognized as investment gains when received. At the
    balance sheet date, sellable financial assets are measured on fair values, and the variations of fair values
    are accounted into “Capital reserves – other capital reserves”.
    At disposal of sellable financial assets, the difference between the amount received and the book
    value of the financial asset will be accounted into “investment gains”, meanwhile, the amount of
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    accumulative change of fair value originally accounted into owners’ equity corresponding to the
    disposed part will be transferred over to “investment gains”.
    (3) Financial liabilities measured at fair value with variations accounted into current
    income account
    Including transactional financial liabilities and financial liabilities directly measured by fair value
    and with variations accounted into current gain/loss account, including:      1)     Financial      liabilities
    undertaken to be repurchased in short future; 2) Those directly assigned as financial liabilities directly
    measured by fair value and with variations accounted into current gain/loss account in view of risk
    management or strategic investment needs;      3) Derivate instruments not used as hedging instruments.
    Such financial liabilities are evaluated at fair value, and the transaction expenses could happen in
    future clearance are not deducted. If fair value is not suitable, evaluation will be on balance of cost after
    amortizing.
    (4) Other financial liabilities
    Other financial liabilities are those other than financial liabilities measured by fair value and
    changes recorded into current gain/loss account, which mainly include account payable and long-term
    payable accounts generated by purchasing of goods. Other financial liabilities are initially recognized by
    their fair value plus relative trade expenses. Subsequent measurement is on amortized costs.
    For other financial liabilities which are not at fair value through profit or loss, for example financial
    guaranteed contracts, they are initially recognized at fair value plus any directly attributable transaction
    costs. After the initial recognition, the other financial liabilities are measured at the higher of the
    followings:
    1. The amount measured in accordance with “Accounting Standards for Business Enterprises No.13
    – Contingency”
    2. The amortized balance measured in accordance with “Accounting Standards for Business
    Enterprises No.14 – Revenue”
    2.   Basis of recognition and accounting of financial asset transferring
    Transferring of financial assets by the Company is including the following two cases:
    (1) Transfer the rights of collecting the cash flow attached to the financial asset to another party;
    (2) Transfer the financial asset to another party, but reserve the rights to collect cash flow related to
    such financial asset, and is responsible to pass the cash flow over to the final beneficiary, and satisfying
    all of the following conditions:
    A. Only when equal cash flow was received upon the financial asset, the party is obligated to give it
    to the final beneficiary party. When an enterprise is making payment on other’s behalf for a short term,
    and will be retrieved in full along with interest at fair market rate, shall be deemed as satisfying this
    condition.
    B. As bounded by the contract, the financial asset is not able to be disposed or use as guarantee,
    however it can be used as guarantee for cash flow of final payment.
    C. The party is obligated to duly forward the cash flow to the final beneficiary party. However
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    except for the cash or cash equivalent the enterprise is not entitled to reinvest, but received between the
    two payments as setout by the contract. When the party is reinvesting the cash according to the contract,
    the gains shall be passed to the final beneficiary party according to the contract.
    Recognition of the financial asset is terminated as soon as all of the risks and rewards attached to
    the financial asset has been transferred to the receiver. Whereas if all of the risks and rewards attached to
    the financial assets are reserved, recognition of the financial asset shall not be terminated.
    When non of the transferring or reserving of the all risks and rewards attached to the financial asset
    happened, it will be handled as:
    (1) When the controlling power over the financial asset is given up, it will be terminated.
    (2) When the controlling power is not given up, financial asset and related liability shall be
    recognized according to the extend the Company is involving in the financial asset.
    3.   Termination of recognition of financial liabilities
    As soon as partial or all of the current responsibilities attached to such financial liabilities,
    recognition of partial or all of the financial liabilities will be terminated. When recognition of financial
    liabilities are partially or wholly terminated, the balance between the book value and the price paid
    (including non-monetary asset transferred out or new financial liabilities undertaken) shall be accounted
    into current income account.
    4.   Recognition of financial instrument fair values
    When there is an active market for the financial instrument, the value quoted at the active market is
    adopted by the Company as the fair value. When there isn’t any active market, fair value will be
    recognized by evaluation techniques. Evaluation techniques include referencing to the prices adopted in
    latest voluntary transaction between parties with full understanding of the situation, referencing to the
    current fair value of other substantially similar financial instruments, discounted cash flow analysis. At
    using of evaluation techniques, market indices will be used to the greatest extent, while particular indices
    of the Company and the subsidiaries to the least.
    5.   Impairment testing on financial assets, providing of impairment provision
    At balance sheet date, the Company performs testing on the book value of financial assets other
    than those measured by fair value and changes accounted into current income account.
    When objective evidence showing that an investment hold to expiration has impaired, the
    impairment amount shall be accounted according to the balance between the book value and the current
    value of expectable future cash flow; if evidence showing that the impaired amount has restored, the
    original impaired amount can be restored to current income account, however the amount to be restored
    shall not greater than the amortized cost of the financial assets with assumption of no impairment
    reserves have been provided at the date of restoring.
    As for sellable financial assets, if the fair value decreased significantly, and it was predicted not
    temporary, then impairment loss will be accounted at the difference between the balance of initial cost
    less retrieved principle less amortized amount and current fair value. The accumulative losses formed by
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    decreasing of fair value originally accounted into the owner’s equity are transferred out along with
    providing of impairment losses, and accounted into “asset impairment loss”.
    (10) Account receivable
    Accounts receivable (including account receivable and other account receivable) are initially
    accounted according to the contract amount or agreement amount. Accounts receivable that are
    unrecoverable due to bankruptcy of the debtor (still unrecoverable through insolvency procedures); death
    of the debtor, and no inheritance or heir of liabilities available; or failure of clearing overdue liabilities
    by the debtor, will be accounted as bad debt losses through legal verification procedures.
    When the Company retrieves the receivables, the differences between the amount retrieved and
    book value of the receivable shall be accounted into current gain/loss account.
    1.   Recognition and providing of bad debt provision on individual receivable account
    with large amount
    The Company divides receivable accounts into project receivables and product receivables. Project
    receivables are those recognized at percentage according to the construction contract, product
    receivables are those formed in other ways. For the current year, the Company recognizes project
    receivables over RMB8 million (included) as “individual receivable with large amount” while
    recognizes product receivables over RMB2 million (included) as “individual receivable with large
    amount” and other receivables over RMB1 million (included) as “individual receivable with large
    amount”. On balance sheet day, the Company performs impairment examination individually on each
    large amount receivables, and recognizes impairment and provides bad debt provision when the
    impairment is recognized; those not impaired are accounted along with the minor amount receivables
    and recognized in risk groups.
    2.   Recognition and providing of bad debt provisions on groups
    Receivable accounts are divided into two groups, which are receivable accounts not consolidated and
    receivable accounts consolidated. Receivable accounts consolidated are provided for bad debt provisions
    on basis of individual recognition; while receivable accounts not consolidated are provided fro bad debt
    provisions on basis of age analyzing as the following:
    Age                                          Providing rate (%)
    Within 1 yr, (included)                                                                                3.00
    1-2 yrs                                                                                              10.00
    2-3 yrs                                                                                              30.00
    Over 3 yrs                                                                                           50.00
    3.   Account receivable with minor individual amount but provided of bad debt
    provisions
    Receivable accounts attributed as project accounts with individual amount under RMB8 million and
    49
    those attributable as products with individual amount under RMB2 million are categorized to “account
    receivable with minor individual amount”; while other receivable accounts with individual amount under
    RMB1 million are categorized as “other receivable accounts with minor individual amount”.
    Individual impairment tests are performed individually on receivable accounts aged over 5 years.
    Full impairment provision will be provided when there is no substantial evidence showing that it could
    be retrieved.
    (11) Inventories
    1.    Categorizing of inventories
    Inventories are those under the Company’s possession for the purpose of selling, in the process of
    production, or materials and goods used in production process or providing of services, including
    materials purchased, raw materials, low-value consumables, OEM materials, products in process,
    semi-finished goods, finished goods, agency goods, and construction in process.
    2.    Pricing of delivering inventory
    Inventories are measured at cost when procured, including purchase cost, processing cost, and other
    costs. Actual costs are recognized at weight average when delivered. Transferring of construction
    materials are recognized individually.
    3.    Recognition of inventory realizable value and providing of impairment provision
    On the balance sheet date, inventories are accounted depending on which is lower between the cost
    and the net realisable value. At overall verification of inventories at the end of year, when the net
    realisable value is lower than the cost, provisions for impairment of inventories shall be drawn.
    Provisions for impairment of inventories shall be accounted according to the difference between the cost
    of individual inventory items and the net realisable value. Including: for inventories such as finished
    products or materials which will be directly sold, in the normal operation, the realizable net value will be
    the balance of estimated selling price less sales expenses and relative taxations; For those inventories
    need further processing, in the normal operation, the realizable net value will be the balance of estimated
    sales price less costs to make it finished, less estimated sales expenses, and less relative taxation. At the
    balance sheet day, inventories with contract prices will be determined for realizable value separately
    from those without contract prices.
    4.    Inventory system
    The Company uses perpetual inventory system. Inventories are checked periodicly and the gains
    and losses from inventory checking are accounted into current gain/loss account.
    5.    Amortizing of low-value consumables and packaging materials
    Low-value consumables are amortized on on-off amortization basis at using. Other materials are
    amortized at 50-50 basis.
    (12) Long-term share equity investment
    50
    Long-term share equity investment of the Company includes the investment in subsidiaries,
    affiliates, and other long-term equities.
    1.   Recognition of initial investment costs
    Investment of the Company in subsidiaries are valued at investment costs. For long-term share
    equity investment formed by shareholding and merger please see Note II(V). Retrospective or retrieved
    investment are adjusted to the cost of long term equity investment.
    For long-term equity investment of the Company with or without common control or major
    influence on the investee, and there is no quotation in an active market, and the fair value is not reliably
    measured, values are on initial investment costs.
    2.   Subsequent measurement and recognition of gain/loss
    The Company uses cost basis in subsequent measurement of investment in subsidiaries, and
    adjusted on equity basis when preparing the consolidated financial statement. Except for the announced
    cash dividend or profit included in the practical cost or price when the investment was made, the
    investment gains are recognized at the announced cash dividend or profit distribution.
    Subsequent measurement of long-term equity investment in investees under common control or
    significant influence is on equity basis. When the initial investment cost is larger than the share of fair
    value of net asset, the initial cost of long-term equity investment shall not be adjusted. When the initial
    investment cost is lower than the share of fair value of net asset, the balance share be accounted into
    current gain/loss, and the long-term investment cost shall be adjusted meanwhile.        After obtaining of
    the long-term equity investment, the investment gain/loss is recognized according to the share of the net
    gain/loss realized by the invested company, and the book value of the long-term equity investment shall
    be adjusted accordingly. The share of profit distributions or cash dividends announced by the invested
    company is used to reduce the book value of the long-term equity investment.
    If the Company has no common control or significant influence on the investee, and there is no
    quotation in an active market, the fair value of the long-term investment is not able to be reliably
    measured, the subsequent measurement shall on cost basis.
    3.   Basis of recognizing common control and significant influence
    Common control is the mutual control of investors over an economic action basing on a contract,
    only effective when it is agreed by all of the investors who have the share of control on the financial and
    business control power. When the investors hold common control over the investee, the investee is
    regarded as their affiliate. Significant influences mean an entity has the power to participate in the
    decision making of another, but cannot dominate individually or jointly with other parties. When the
    investor may significantly influence the investee, the investee is regarded as the affiliate.
    4.   Impairment examination and providing of impairment provision
    At the balance sheet day, if evidence showing that impairment occurred on the long-term equity
    investment, the recoverable amount shall be decided by the higher one of net amount of fair value less
    disposal fees and the current value of predicted future cash flow. When the recoverable amount of the
    long-term equity investment is lower than the book value, the book value will be reduced down to the
    51
    recoverable amount, the reduced amount is recognized as asset impairment loss and counted into current
    gain/loss account, asset impairment provision shall be provided accordingly. Once the long-term equity
    investment impairment loss is recognized, it will not be written back in following fiscal terms.
    (13) Investment properties
    Investment real estates are buildings rented out.
    Investment real estate is measured according to the initial cost. Cost of real estate purchased from
    outside includes purchasing price, tax, and other expenses directly related to the real estate; cost of real
    estate constructed by the Company itself is constructed by the essential costs to make the real estate
    usable.
    Accounting of investment real estates of the Company is on fair value basis when the following
    conditions are satisfied:
    (1) There is an active real estate market where the investment real estate is located;
    (2) Market price and other related information of similar real estates may be acquired from the
    market and used to make reasonable estimation on the fair value of the investment real estate.
    At the balance sheet date, the Company uses fair value to measure the investment properties, no
    depreciation or amortizing is made on the investment properties, book value is adjusted on the base of
    fair value of the property at balance sheet date, and the differences between the fair value and the
    original book value are counted into current gain/loss account.
    At disposal of investment properties, or retrieve from the property permanently and no further
    financial benefit is expected to obtain from the property, recognition of the investment property will be
    terminated. Balance of income from disposal, transferring, discarding, or clearing of investment
    properties less the book value and related taxes is counted into current gain/loss account.
    (14) Fixed assets
    1.    Conditions for fixed asset recognition
    Fixed assets is defined as the tangible assets which are held for the purpose of producing goods,
    providing services, lease or for operation & management, and have more than one year of service life.
    2.    Depreciation of fixed assets
    Other than fixed assets which have already been provided depreciations in full but still in use, the
    Company provides depreciations upon all of the fixed assets. Straight age average basis is adopted in
    depreciation.
    According to the property and usage of the fixed assets, the Company decides the service life and
    predicted net retained value. At end of each fiscal year, verification will be made on the useful life,
    predicted retained value, and depreciation basis, adjustment will be made if difference occurred to the
    original estimations.
    Categories, useful life, predicted net retained value, and annual depreciation rate of fixed assets are
    as the followings:
    Annual depreciation
    Categories            Depreciation age (year)      Residue rate (%)
    rate (%)
    Houses & buildings                      35-45                       10                  2-2.57
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    Annual depreciation
    Categories             Depreciation age (year)       Residue rate (%)
    rate (%)
    Equipment & machinery                      10                       10                      9
    Transportation facilities                  5                        10                       18
    Electronics and other
    5                        10                       18
    devices
    3.   Impairment testing and impairment provisions
    At the balance sheet day, fixed assets are accounted at the lower one of book value and retrievable
    value. If the retrievable value is lower than the book value, the book value will be deducted to the
    retrievable value, and the deducted amount will be recorded as asset impairment loss into current income
    account, and impairment provision shall be provided accordingly. Once the impairment loss was
    recognized, it will not be written back in coming fiscal terms.
    4.   Other statements
    Fixed assets are initially measured at costs. Among them, cost of fixed assets purchased from
    outside include purchasing price, tariffs and other taxes, and other expenditures directly related to the
    asset before it reaches the useful status. Cost of self-build fixed assets is the necessary costs before it is
    made useful. Fixed assets invested by investors are booked at the value according to the investment
    contract, whereas when the contract value is not fairly acceptable, it will be booked at the fair value.
    When a payment for purchasing of fixed asset is overdue and practically forms financing activity, the
    fixed asset is recognized at the current value of purchasing price. The difference between the price paid
    and current value, except for those must be capitalized, shall be accounted into current income account
    of the credit period.
    When fixed asset is disposed, or made no financial benefit by using or disposing it, recognition is
    terminated. Income from disposal, transferring, discarding of fixed assets, less its book value and taxes,
    is accounted into current income account.
    (15) Construction in process
    For construction in process conducted by the Company itself, its actual cost consists of
    essential costs of carrying on the construction till it reaches usable status. Constructions in
    process of the Company are divided to workshop construction and equipment installation
    projects.
    Cost of fixed asset which has already become usable but not settled yet, is recognized according to
    estimated value, and depreciations share be provided. Upon completion of settlement, the original
    estimated value shall be adjusted according to the actual cost, but the depreciations made previously
    shall not be adjusted.
    At the balance sheet day, construction in process are accounted at the lower one of book value and
    retrievable value. If the retrievable value is lower than the book value, the book value will be deducted to
    the retrievable value, and the deducted amount will be recorded as asset impairment loss into current
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    income account, and impairment provision shall be provided accordingly. Once the impairment loss was
    recognized, it will not be written back in coming fiscal terms.
    (16) Borrowing expenses
    Borrowing expenses occurred to the Company that can be accounted as purchasing or production of
    asset satisfying the conditions of capitalizing, are capitalized and accounted as cost of related asset.
    Other borrowing expenses are recognized as expenses according to the occurred amount, and accounted
    into gain/loss of current term. Assets satisfying the conditions of capitalization are referring to the fixed
    assets, investment properties, and inventories that need a long-term construction or production process to
    reach the usable or sellable status.
    Borrowing expenses start to be capitalized when all of the followings are satisfied: (1)            Asset
    expense has already occurred. Asset expenses include cash payment, non-cash asset transferring, or
    undertaking of debt with interest done for purchasing or producing of assets.       (2)    The      borrowing
    expense has already occurred.          (3) Purchasing or production activity, which is necessary for the asset
    to reach the useful status, has already started.
    In the period of capitalization, the capitalized amount of each fiscal period, if it is a special
    borrowing for construction or production of asset satisfying the capitalizing conditions, is the interest
    expenses actually occurred less the interest income from the unused part of borrowings or from
    temporary investment. If it used a common borrowing for construction or production of asset satisfying
    the capitalizing conditions, the capitalized interest amount will be decided by the weighted average of
    accumulative asset expenses over the capital expenses of the special borrowing multiply the capitalizing
    ratio of common borrowing. Capitalizing amount of the interests shall not more than the actual amount
    of interest actually occurred to the current relative borrowing.
    If the construction or production of assets satisfying the capitalizing conditions is suspended
    abnormally for over 3 months, capitalizing of borrowing expenses shall be suspended. Borrowing
    expenses occurred in the suspension period are recognized as expenses and recorded to current income
    account, until the construction or production is resumed. If the suspension is an essential process to make
    the asset usable or sellable, capitalizing of borrowing expenses shall be carried forward.
    When the asset satisfying the capitalizing conditions has reached its usable or sellable status,
    capitalizing of borrowing expenses shall be terminated.
    (17) Intangible assets and development expenses
    Intangible assets are those recognizable non-monetary assets without physical shape under the
    Company’s possess or control, including land using rights, patent, industry property, special technologies,
    and software.
    Intangible assets are initially measured by their costs. Intangible assets purchased are booked at the
    actual cost to purchase and relative expenses. Intangible assets inputted by investors are booked at the
    contract or agreement price, but if the contract or agreement price is not fairly acceptable, it will be booked
    at fair value.
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    The Company analyses and determine the usable life when intangible assets are obtained, and are
    classified into intangible assets with limited useful life, and uncertain useful life.
    Intangible assets with limited useful life are amortized straightly to the useful life, the useful life
    and amortizing basis are reconsidered at the end of each year, when there is difference with the original
    estimation, adjustment shall be made. Intangible assets with limited useful life are amortized as
    followings:
    Categories                     Useful life          Basis of amortization          Notes
    Land using right                    50 yrs                  Average age
    Patent                        10 yrs                  Average age
    Industrial property and special
    10 yrs                 Average age            Internal R&D
    tech
    Software                       5,10 yrs                 Average age
    10 yrs or beneficial
    Other intangible assets                                        Average age
    age
    Intangible assets without certain useful life are not amortized. They will be reconsidered in each
    accounting period, if strong evidence showing that the useful life became limited, then it will be
    estimated, and amortized on straight basis. Intangible asset without certain useful life shall be tested each
    year whether or not there is evidence of impairment.
    On the balance sheet date, the Company measures intangible assets according to the lower of book
    value and retrievable value, intangible asset impairment provisions shall be provided at the difference of
    retrievable value lower than the book value, and the corresponding impairment loss shall be recorded to
    current income account. Once intangible asset impairment losses are recognized, they will not be written
    back in successive fiscal periods.
    Internal R&D expenses are divided into research expenses and development expenses and treated
    separately. The period of scientific or technological creation or research is categorized as research period.
    The period of using the researching fruits or other know-how into practical projects or designing of
    substantial products, equipment, or materials is recognized as development period.
    Research refers to creative and planned investigation on new science or technologies.
    Development means using the researching fruits or other know-how into practical projects or
    designing of substantial products, equipment, or materials is recognized as development period.
    Expenses of internal R&D projects in research stages are recorded into current income account
    when occurred; expenses of internal R&D projects in development stages, are recognized as intangible
    assets when all of the following conditions are satisfied, or otherwise recorded to current income account:
    (1) Developing of the intangible asset is about to be completed, and it is technically possible to be
    put into use or sold; (2) Has the intention to use or sell it;   (3) The intangible asset is proved being able
    to make financial benefit, including there is a market for the products using the intangible asset or the
    intangible asset itself. If the intangible asset is used internally, its usage should be proved; (4) There are
    sufficient technologies, financial resources, or other resources that support the developing, using or
    selling of the intangible asset; (5) When the expenses attributable to the intangible asset can be reliably
    measured. The development expenses accounted in prior income accounts shall not be recognized as
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    asset in succeeding period. Development expenses that have been capitalized shall be demonstrated as
    expenses in the balance sheet, and transferred into intangible asset as soon as it reaches usable status.
    (18) Goodwill
    Goodwill is the difference of merger costs of enterprises under same control over the share of
    recognizable net asset or fair value at the date of purchasing of the invested company.
    Goodwill related to subsidiaries are presented individually in consolidated financial statements,
    goodwill related to affiliates are included in the book value of long-term equity investment.
    Goodwill presented individually in financial statements are tested for impairment at leased once at
    end of each year. At impairment test, the book value of goodwill shall be shared by the benefited asset
    group according to the collaboration effects between the merger businesses.
    (19) Expectable liabilities
    When responsibilities occurred in connection to contingent issues, and all of the following
    conditions are satisfied, they are recognized as expectable liability in the balance sheet:   (1)       This
    responsibility is a current responsibility undertaken by the Company; (2) Execution of this responsibility
    may cause financial benefit outflow from the Company;         (3) Amount of the liability can be reliably
    measured.
    Expected liabilities are initially measured at the best estimation on the expenses to exercise the
    current responsibility, and with considerations to the relative risks, uncertainty, and periodic value of
    currency. When the periodic value of currency is with major influence, then the best estimation will be
    determined at the discount of future cash outflow. The book value of expected liability is revised at
    balance sheet day, and adjustment will be made to reflect current best estimation.
    (20) Payment in shares and equity instruments
    1.   Categories of payment in shares
    Share payment of the Company is divided into payment by shares and payment by cash.
    2.   Recognition of equity instrument fair value
    For equity instruments such as share options with an active market, the fair value is decided by the
    quotation in the active market. For those without an active market, the fair values are decided by a
    pricing model, and the following factors shall be considered when deciding the pricing model: (1)
    Exercising price of the option;      (2) Valid period of the option; (3) Current price of the target shares;
    (4) Predicted share price fluctuation rate;    (5) Predicted dividend of the shares;     (6)    Interest
    rate without risks in the valid period.
    When deciding the fair value of the equity instruments, the influence of market condition in the
    exercisable condition and non-exercisable conditions in the payment agreement shall be considered.
    When the payment of shares is under non-exercisable conditions, the cost corresponding to the services
    shall be recognized only when the non-market conditions (such as service term) in all of the exercisable
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    conditions are satisfied by the employee or other parities.
    3.    Basis of deciding the best estimation of the exercisable equity instruments
    At each balance sheet date during the waiting period, the best estimation shall be made according to
    the newest subsequent information such as the number of employees who have exercisable options, and
    amount of equity instrument shall be adjusted. At the exercisable date, the final estimated amount shall
    be the same with the practical amount of exercisable options.
    4.    Accounting treatment of implementing, amending, and terminating of share
    payment scheme
    Payment by equity is measured by fair value of the equity paid to the employees. If the equity can
    be exercised instantly, it will be accounted into relative cost at the fair value of the equity at the day of
    giving. If the equity is only exercisable upon satisfying of performance or service period, basing on the
    best estimation on the amount of equity, according to the fair value at the day of giving, record the
    service into related cost or capital reserves at each balance sheet date in the period. No adjustment will
    be done on recognized cost or expenses and the owners’ equity after the exercise date.
    Payments of share equity in cash are measured on the fair value of liabilities recognized basing on
    the share equity or other equity instruments. Those which can be exercised immediately upon granting
    are accounted into related costs or expenditures at the fair value undertaken by the Company at the date
    of granting, and liabilities shall be increased correspondingly. Those which can only be exercised upon
    satisfying of certain conditions including providing of services or business contribution, shall be
    accounted into cost account and corresponding liabilities basing on the best estimation of exercising
    condition at each balance sheet day in the waiting period. On each balance sheet day and settlement day
    prior to clearing of related liabilities, the fair value of the liabilities shall be reevaluated, and the changes
    shall be accounted into current income account.
    In case the equity instrument is canceled in the waiting period, the Company will accelerate the
    exercise of the equity instrument to be canceled. The Amount recognizable for the rest of waiting period
    shall be accounted into current gain/loss instantly, and recognized to capital reserves at meantime. When
    the employee or other beneficiary failed to satisfy the conditions to exercise the options in the waiting
    period, the Company will cancel the equity instrument.
    (21) Revenue
    1.    Sales of goods
    When all of the following conditions are satisfied, the sales of goods are recognized as sales income
    according to the contract amount received or receivable from the buyer:         (1) Main risks and rewards
    attached to the ownership of the goods have been transferred to the buyer; (2) No succeeding power of
    administration or effective control is reserved which are usually attached to ownership;        (3)     Amount
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    received can be reliably measured; (4) Related financial benefit may inflow to the Company;       (5)
    Relative costs, occurred or will occur, can be reliably measured.
    When collection of contract payment is by deferred way, and practically with financing characters,
    sales income shall be recognized at the fair value of the receivable contract amount.
    2.   Providing of labor service
    Labor service started and completed in a same fiscal year is recognized as income at completion. If
    they are not in the same year, then use the estimation on percentage basis when it is possible.
    When the partial of service is not able to be estimated, the labor service income is treated as the
    followings:
    A. When the labor cost occurred is expectable to be covered, the labor service income is recognized
    at the cost already occurred, and recorded to labor cost as well.
    B. When the labor cost occurred is not expectable to be covered, the cost will be recorded to current
    gain/loss account without recognizing as labor service income.
    When a contract engaged with other company is including sales of goods and providing of labor
    services, if the goods and services can be measured separately, they will be treated separately. When they
    are not able to be distinguished, or not able to be measured separately, all of them will be treated as sales
    of goods.
    3.   Demising of asset using rights
    Income is recognized when the financial benefit in connection with the demising of asset using
    right was received and the amount can be reliably measured.
    Interest income is recognized according to the applicable period of time and interest rate. Amount
    of application fee is recognized according to the period and calculation decided by the related contract.
    4.   Construction contracts
    Metro screen door projects of the Company and Shenzhen Fangda Automatic System Co., Ltd.
    (Fangda Automatic System), and glass curtain wall project of Shenzhen Fangda Decoration Engineering
    Co., Ltd. (Fangda Decoration) are individual construction contracts, they are accounted by the following
    means:
    Construction contracts completed within a fiscal year are recognized for their income and cost upon
    completion.
    Income and expenses of the construction contracts carried over-year are recognized on percentage
    basis at balance sheet day when all of the following conditions are satisfied: contract income can be
    reliably measured, relative financial benefit can inflow to the Company; progress of the project and costs
    to complete the contract can be reliably recognized; cost occurred to complete the contract can be clearly
    distinguished and reliably measured, which enables comparing of actual cost with predicted cost.
    In which: Contract costs are direct and indirect expenses occurred since the date when the contract
    is engaged till the completion day.
    58
    Progress of a contract is recognized at the percentage of actual accumulative cost in the total of
    budget of the contract.
    Construction contracts completed in current term are recognized for income according to the actual
    total income of the contract less income recognized in previous terms; meanwhile, the total costs of the
    contract less costs recognized in previous terms are recognized as current contract costs. If the total
    contract cost is predicted to be greater than the predicted total income, the predicted loss shall be
    recognized as current cost instantly.
    Parts of the curtain wall project under Fangda Decoration are outsourced, and administrative fees
    are collected at agreed rate. For these construction contracts, income will be recognized when ongoing
    payment for the project is received and corresponding costs are transferred.
    (22) Government subsidy
    Government subsidies are the monetary or non-monetary capital received from the government by
    free, but not include capital inputted by the government as investment of owners.
    When a government subsidy is monetary capital, it is measured at the received or receivable amount.
    None monetary capital are measured at fair value; If no reliable fair value available, recognized at
    RMB1.
    Government subsidies in connection with capital are recognized as deferred income, and amortized
    straight to its useful life, and accounted into current income account.
    Government subsidies in connection with gains, which are used to cover future expenses or losses,
    are recognized as deferred gains, and recorded to current income account to the period when the
    expenses are recognized.
    If a recognized government subsidy need to be returned, if there is relative deferred gains, the
    balance of deferred gains will be setoff, the exceeded part shall be recorded into current income account;
    if there is no relative deferred gains, record to current income account directly.
    (23) Deferred income tax assets/ deferred income tax liabilities
    Income taxes are accounted on liability basis in the balance sheet. When there is difference between
    the book value and taxable basis of asset or liability, deferred income tax asset and deferred income tax
    liability are recognized according to the regulations.
    At the balance sheet day, the current income tax liabilities (or assets) formed in current term or
    previous term, are measured by the amount of income tax to be paid (or refunded) according to the
    taxation law; deferred income tax assets and liabilities are measured at the applicable tax rate in the
    period when the asset is predicted to be retrieved or the liability is predicted to be cleared.
    Recognition of deferred income tax asset is limited to the provisional difference to be deducted, and
    deductible losses and taxable income amount. If the taxable income realized in the future period of
    transferring of provisional differences is not sufficient, which made the financial benefit related to the
    provisional difference unrealizable, no deferred income tax asset is recognized. Deferred         income   tax
    liabilities generated by the taxable provisional difference related to fluctuation of fair value of
    investment in subsidiaries and affiliates are recognized, but those satisfying the recovering time of the
    taxable provisional difference are not recognized;         For deferred income tax assets caused by
    59
    deductible temporary differences related to investment in subsidiaries, affiliates, and joint operations, if
    the deductible temporary differences are possible to be written back in a expectable future, namely there
    is a substantial plan to dispose the investment, and the gains from disposal are enough not only to
    provide taxable income, but also to deduct the deductible temporary difference, it shall be recognized.
    At the balance sheet day, the book values of deferred income tax assets are revised.
    Those deductible provisional differences, which are neither enterprise merger, nor initial recognition of assets
    or liabilities are recognized as income tax expenses or income into current income account.
    (24) Leasing
    Leasing is one of the business operations of the Company.
    1.   The Company is the lender
    Rentals from operational leasing are recognized as current gains on straight basis to the periods of
    leasing. Initial direct expenses are recorded to current income account.
    2.   The Company as lessee
    Rentals in operational leasing are recorded to relative capital cost or current income account on
    straight basis to the periods of leasing. Initial direct expenses are recorded to current income account.
    (25) Sellable assets in possession
    Sellable assets in possession are assets satisfying all of the following conditions:      Resolutions
    have been made on disposal of these non-current asset;Irrevocable agreement has been engaged with the
    buyer.       The possession will be transferred within one year.
    For fixed assets hold for sale, the predicted net residue value shall be adjusted to reflect the net
    value of fair value less the disposal expenses, but not greater than the original book value when it had
    satisfied the conditions of disposable. The balance between the original book value and the predicted net
    residue value shall be accounted into current income account as asset impairment loss.
    Other non-current assets such as intangible assets satisfying the conditions of available-to-sale,
    shall be handled according to the above principles. However the deferred income tax assets, financial
    assets satisfying “Enterprise Accounting Standard No.22 – Recognition and measuring of financial
    instruments”, investment properties and biological properties measured by fair value, and rights from
    insurance contracts, are not included.
    (26) Accounting of hedging instruments
    Hedging instruments are the financial instruments adopted by the Company to avoid risks of
    fluctuating product prices, namely use the expected change of cash flow of the hedging instruments to
    wholly or partially deduct the change of cash flow of the target products. Hedging instrument used by
    the Company is Aluminum Future Contract targeting on purchasing of aluminum materials. The
    Company considers the hedging instrument highly effective only when the following conditions are
    satisfied:
    1. The hedging instrument can effectively neutralize the risks of the target goods caused by change
    of cash flow since it started and in the following period.
    2. The actual effectiveness is between 80% and 125%.
    60
    The part of gains or loss from hedging instruments attributable to effective hedging, shall be
    straightly recognized as owners’ equity and demonstrated individually. The amount of the effective
    hedging shall be decided by the lower one of absolute values of gain or loss since starting of hedging and
    the accumulative variation of cash flow predicted from the beginning of hedging.           When a predicted
    transaction makes the Company recognized a financial asset or liability, the gain or loss originally
    recognized as owners’ equity shall be written over to current income account in the same period with the
    gain or loss of the financial asset or its influence of the Company’s gain/loss.   When      the   net     loss
    originally recognized to owners’ equity is fully or partially unrecoverable in succeeding account period,
    the unrecoverable part shall be written over to current income account. The above hedging accounts are
    terminated as soon as expiration, sold, terminated, and disqualified.
    (27) Change of main accounting policies and estimations
    1.   Change of Accounting Policies
    No change of accounting policies occurred in the year.
    2.   Change of accounting estimations
    No change of accounting estimations occurred in the year.
    (28) Correction of previous accounting faults
    No correction of previous accounting faults occurred in the report term.
    III. Taxation
    (1) Main categories and rates of taxes
    1.   Operation tax and surtaxes
    Tax items                              Tax basis                                Rate            Notes
    income from curtain wall and metro screen door
    3%
    Business tax        installation projects
    Property rental income                                          5%
    Sales income of curtain wall and aluminum
    17%
    materials
    VAT
    Sales income of screen door materials                           17%
    Sales income from LED products                                  17%
    City maintenance
    and construction VAT payable + business tax                                         7%
    tax
    Education surtax VAT payable + business tax                                         3%
    Local education
    VAT payable + business tax                         1% or 2%         Note 1
    surcharges
    Note 1. Subsidiaries of the Company located in Shenyang Province are subject to educational
    surcharge at 1% of VAT and operation tax; subsidiaries in other location are subject to educational
    surcharge at 2% of the same. The Company and its subsidiaries located in Shenzhen are subject to 2% of
    61
    the “three taxes” since January 1, 2011.
    2.   Enterprise income tax
    Name of companies                          Tax rate                Notes
    The headquarter                                                   24%                  Note (1)
    Fangda Decoration                                                 15%                Note (1), (3)
    Fangda Automatic                                                  15%                Note (1), (2)
    Shenzhen Fangda Yide New Material Co., Ltd. (Fangda
    24%                  Note (1)
    Yide)
    Shenzhen Fangda Gruoke Electronic Optical Tech Co., Ltd.
    24%                  Note (1)
    (Fangda Guoke)
    Shenzhen Woke Semi-conductor Lighting Co., Ltd.
    24%                  Note (1)
    (Shenzhen Woke)
    Fangda New Material (Jiangxi) Co., Ltd. (Fangda New
    12.5%               Note (1), (4)
    Material)
    Fangda Aluminium                                                  25%                  Note (1)
    Shenyang Fangda Semi-conductor Lighting Co., Ltd.
    25%                  Note (1)
    (Shenyang Fangda)
    Dongguan Fangda New Material Co., Ltd. (Dongguan New
    25%
    Material)
    Note: (1) The People’s Congress passed “The Income Tax Law of PRC” (the new Tax Law”) on
    March 16, 2007. The new Tax Law took effect on January 1, 2008. Corporation income tax was reduced
    from 33% to 25%. High-tech enterprises recognized by the national government are subject to 15% of
    corporation income tax. According to document 国发[2007]39 号文 issued by the national government,
    the Company and the subsidiaries were subject to 15% of corporation tax, whereas since 2011, the tax
    rate is increased to 24%.
    (5) According to the Certification of High-tech Enterprise issued by Shenzhen Commission of
    Trade Industry and IT, Shenzhen Commission of Finance, Shenzhen National Tax Bureau, and Shenzhen
    Local Tax Bureau on June 27, 2009, Fangda Automatic was entitled to enjoy 15% of Corporation Tax for
    three years since the certification was awarded.
    (3) According to the Certification of High-tech Enterprise issued by Shenzhen Commission of
    Trade Industry and IT, Shenzhen Commission of Finance, Shenzhen National Tax Bureau, and Shenzhen
    Local Tax Bureau on October 29, 2009, Fangda Decoration was entitled to enjoy 15% of Corporation
    Tax for three years (including 2009) since the qualifications were awarded.
    (4) As approved by Nanchang High-tech Zone Tax Bureau with document 洪高国税发(2008)74
    号, Fangda New Material enjoys “2 free 3 half” policy since 2008. The rate is 12.5% since 2010.
    3.   Property tax
    Property tax rate applicable to the Company and subsidiaries is 1.2% basing on 70% of the original
    value of property in Shenzhen. Same for the properties of subsidiaries outside Shenzhen for self use.
    Leasing property is subject to 12% of tax on rental income.
    62
    4.      Personal income tax
    Individual income tax of the employees are paid by the Company on behalf.
    IV. Merger of enterprises and consolidated financial statements
    (1) Profiles of the subsidiaries
    1.      Subsidiaries founded or invested
    Ownership                                          Registered
    Names of                                         Business                             Legal
    of the       Reg. Add.                            capital                            Business scope
    subsidiaries                                      property                         representative
    subsidiary                                         RMB0’000
    Designing, manufacturing,
    and installation of curtain
    Fangda            Fully-owned
    Shenzhen       Ltd. liability   31,000.00 Xiong Jianwei walls, glass shields, doors,
    Decoration         subsidiary
    windows,      fences,     and
    ceilings.
    Designing,          technical
    developing,      installation,
    Fangda            Fully-owned                                                   Wang      and sales of PSD system;
    Shenzhen       Ltd. liability   10,500.00
    Automatic          subsidiary                                                 Shengguo    import        &       export;
    installation and processing
    of PSD.
    Developing,        designing,
    Fangda            Fully-owned                    Sino-foreign                   Yang
    Shenzhen                       USD320.00                manufacturing of new type
    Yide Co.           subsidiary                    joint venture               Xiaozhuan
    composite materials
    Researching, developing,
    manufacturing, trading, and
    installation engineering of
    semi-conductor       material
    Subsidiary of                  Ltd. liability
    Fangda                                                                                    and devices, electro-optical
    controlled     Shenzhen    (Sole investment    5,000.00    Yu Guoan
    Guoke                                                                                     devices and equipment,
    subsidiary                 by legal person)
    electronic         displaying
    devices, video products;
    technical consulting and
    service; international trade.
    Production and selling of
    new materials, compound
    materials, curtain walls,
    Ltd. liability
    doors, windows, metal
    (joint venture
    Fangda                                                                                    structures, metal products,
    Fully-owned                       between                     Yang
    New                               Nanchang                      USD1,200.00               environment        protection
    subsidiary                 companies from                 Xiaozhuan
    Material                                                                                  products,         metallurgy
    Taiwan, Hong
    equipment,        machinery,
    Kong or Macau)
    aluminum products, heat
    radiation           materials,
    macromolecule materials.
    Designing, manufacturing,
    sales and installation of
    aluminum sections for
    Ltd. liability
    curtain walls, doors, and
    (Joint venture
    Fangda            Fully-owned                                                   Yang      windows;          decoration
    Nanchang       with foreign     2,000.00
    Aluminium          subsidiary                                                Xiaozhuan design, water and power
    invested
    supply equipment, air
    company)
    conditioner      installation.
    House renting, equipment
    renting.
    Fully-owned
    HK Junjia                           HK             None               HKD1.00                       Investment
    subsidiary
    Manufacturing             of
    Shenyang           Controlled                                                         Wang
    Shenyang      Ltd. liability        20,000.00                     semiconductor       lighting
    Fangda            subsidiaries                                                      Shengguo
    material and chips; lighting
    63
    source          encapsulation;
    developing, manufacturing,
    technical consulting of
    semiconductor           lighting
    products;          developing,
    designing, manufacturing,
    engineering,        installation
    and          trading           of
    semiconductor           lighting
    system;      materials       and
    products        related        to
    semi-conductor         lighting;
    trading of construction
    material; import and export
    agency service of products
    and technologies.
    Developing, designing and
    sales of new construction
    material;          developing,
    designing, installation and
    trading of curtain walls,
    PSD        systems,         LED
    products,       metal       roof
    products, and solar-energy
    products;                interior
    Dongguan                                                                                          decoration; water            and
    Fully-owned                       Ltd. liability
    New                                                                                               power system installation;
    subsidiary of    Dongguan       (Sole investment       21,280.00     Xiong Jianwei
    Material                                                                                          installation and trade of
    subsidiary                     by legal person)
    Co., Ltd.                                                                                         air-conditioning        system;
    designing,         installation,
    trade of lighting system;
    contracting of overseas
    curtain wall projects and
    domestic          international
    bidding                projects;
    manpower          outsourcing;
    import and export of goods
    and technologies
    Actual
    Share                                                 Balance of other items
    Names of                      Voting rights    investment at
    proportion                                                actually formed net               Consolidated?
    subsidiaries                       (%)           end of term
    (%)                                               investment in the subsidiaries
    RMB0’000
    Fangda
    100.00          100.00          31,000.00                                                       Yes
    Decoration
    Fangda
    100.00          100.00          17,877.73                                                       Yes
    Automatic
    Fangda
    100.00          100.00         USD320.00                                                        Yes
    Yide Co.
    Fangda
    64.58           64.58           10,500.00                                                       Yes
    Guoke
    Fangda
    New            100.00          100.00        USD1,200.00                                                       Yes
    Material
    Fangda
    100.00          100.00          2,000.00                                                        Yes
    Aluminum
    HK Junjia         100.00          100.00          HKD1.00                                                         Yes
    Shenyang
    64.58           64.58           12,916.00                                                       Yes
    Fangda
    Dongguan
    New
    100.00          100.00          21,280.00                                                       Yes
    Material
    Co., Ltd.
    Minor             Amount for deducting minor
    Names of       Ownership      Organization
    shareholders’         shareholder’s equity in the               Notes
    subsidiaries      type            code
    equity             minor shareholder’s equity
    64
    Fangda
    Corporation   19244418-2
    Decoration
    Fangda
    Corporation   75425429-3
    Automatic
    Fangda
    Corporation   61929454-0
    Yide Co.
    Fangda
    Corporation   72856199-4         See notes                See notes
    Guoke
    Fangda
    New           Corporation   74852611-7
    Material
    Fangda
    Corporation   15830664-0
    Aluminum
    HK Junjia           None           None
    Shenyang
    Corporation   66254891-3         82,362,870.18                   -1,974,598.07
    Fangda
    Dongguan
    New
    Corporation   56457096-5
    Material
    Co., Ltd.
    Note: Fangda Guoke is the subsidiary under direct control of Shenyang Fangda. The minority
    shareholders’ equity of Fangda Guoke has already been included in the minority shareholders’ equity of
    Shenyang Fangda, thus it is not presented separately in this table.
    2.     Subsidiaries procured from merger of companies under different control
    Name of the        Ownership                                             Registered
    Business                             Legal
    subsidiaries         of the         Reg. Add.                             capital                            Business Scope
    property                         representative
    (short form)       subsidiary                                           (RMB0’000)
    R&D,
    designing,
    production,
    after service of
    Subsidiary of
    Shenzhen                                                                                                    LED products;
    controlled       Shenzhen           Ltd. liability     1,000.00          Yu Guoan
    Woke                                                                                                       installation of
    subsidiary
    LED         color
    displayer, city
    and          road
    lighting system.
    Actual capital
    Name of the           Share                                              Balance of other items actually
    Voting rights      input at end of
    subsidiaries        proportion                                            formed net investment in the       Consolidated?
    (%)              report term
    (short form)           (%)                                                        subsidiaries
    (RMB0’000)
    Shenzhen
    64.58              64.58           1,899.13                                                  Yes
    Woke
    Minor           Amount for deducting minor
    Names of          Ownership       Organization
    shareholders’    shareholder’s equity in the minor        Note
    subsidiaries         type             code
    equity              shareholder’s equity
    Shenzhen
    Corporation      72855858-4          See notes                    See notes
    Woke
    Note: Shenzhen Woke is the subsidiary under direct control of Fangda Guoke; while Fangda Guoke
    is the subsidiary under direct control of Shenyang Fangda. The minority shareholders’ equity of Fangda
    Guoke and Shenzhen Woke has already been included in the minority shareholders’ equity of Shenyang
    Fangda, thus it is not presented separately in this table.
    (2) The change of consolidation scope
    No change of consolidation scope in the report term.
    65
    V. Notes to the consolidated financial statements
    (1) Monetary capital
    Balance of book value at end of term             Balance of book value at beginning of term
    Original       Exchange      Translated to          Original      Exchange      Translated to
    Items           currency         rate           RMB                 currency        rate           RMB
    I. Cash
    RMB                   15,073.35               1        15,073.35             9,841.07           1          9,841.07
    USD
    HKD                    5,409.06          0.83           4,498.71             4,767.80    0.85093           4,057.07
    Cash subtotal                                          19,572.06                                          13,898.14
    II. Bank savings
    RMB                                               427,024,473.37       478,568,182.50           1    478,568,182.50
    USD                  101,428.35          6.56         665,006.11          346,670.47       6.6227      2,295,894.52
    HKD                       74.57          0.83              62.01                74.57    0.85093              63.45
    Macao Dollar                  0.00                                 -
    Bank     saving
    subtotal                                          427,689,541.49                                     480,864,140.47
    III.     Other
    monetary
    capital
    RMB                                                13,678,509.23        25,417,161.50           1     25,417,161.50
    USD                  170,469.23          6.47       1,103,208.67                100.2      6.6227            663.59
    HKD                                                                -
    Subtotal    of
    other monetary
    capital                                            14,781,717.90                                      25,417,825.09
    Total                                       442,490,831.45                                     506,295,863.70
    Note 1: RMB12 million among the balance of bank deposit at end of year was frozen by the Court
    for the lawsuit involved by Fangda Decoration. This is not regarded as cash equivalent at preparing of
    Cash Flow Statement. For details of the case please see Note VII(I)-1.
    Note 2: Balance of RMB14,781,717.90 under other monetary capital was mainly deposit for bank
    accepted notes and letter of guarantee, which are not regarded as cash equivalent at preparing of cash
    flow statement.
    (2) Notes receivable
    (1) Category of notes receiveable
    Balance of book value at end of            Balance of book value at
    Categories
    term                             beginning of term
    Bank acceptance                                         1,550,000.00                           2,262,000.00
    Commercial acceptance                                                                           14,229,007.92
    66
    Total                                    1,550,000.00                     16,491,007.92
    Note: Notes receivable has decreased by 90.6%, which was mainly due of trade acceptance draft.
    (2) Top 5 bank acceptance drafts endorsed but not due yet are:
    Issuer                      Date of issue       Expired on            Amount
    Shenzhen Tianpai Door & Window
    Technologies Co., Ltd.                             2011.3.9            2011.9.9         3,000,000.00
    Shenzhen Shezhuangzong Decoration
    Engineering Co., Ltd.                            2011.5.13          2011.11.13          2,000,000.00
    Shenyang      Yuanda          Aluminum
    Engineering Co., Ltd.                            2011.2.25           2011.8.25          1,000,000.00
    Shenyang      Yuanda          Aluminum
    Engineering Co., Ltd.                            2011.4.19          2011.10.13          1,000,000.00
    China Construction Co. Division IV
    Ltd.                                             2011.5.11           2011.11.11          553,926.26
    Total                                                                 7,553,926.26
    (3) Account receivable
    (1) Account receivable on categories
    Balance of book value at end of term
    Categories                 Book value                Bad debt provision
    Net amount
    Amount     Proportion       Amount            Rate
    Receivables       with
    major       individual
    amount and bad debt
    provision provided
    individually
    Receivables provided      599,466,541.99     97.32%    106,635,630.46        17.79%   492,830,911.53
    bad debt provision in
    groups
    Incl.      Receivable     599,466,541.99     97.32%    106,635,630.46        17.79%   492,830,911.53
    accounts           not
    consolidated
    Sub-total of group        599,466,541.99     97.32%    106,635,630.46        17.79%   492,830,911.53
    Account receivable
    with minor individual
    16,499,671.58      2.68%     16,499,671.58       100.00%
    amount but bad debt
    provision is provided
    Total             615,966,213.57  100.00% 123,135,302.04         19.99% 492,830,911.53
    Balance of book value at beginning of term
    Categories                 Book value               Bad debt provision
    Providing  Net amount
    Amount      Ratio (%)      Amount
    rate (%)
    Receivables       with
    major       individual
    amount and bad debt
    provision provided
    individually
    67
    Receivables provided
    bad debt provision in     507,918,512.04           96.95%     111,244,947.28       21.90%       396,673,564.76
    groups
    Incl.      Receivable
    accounts           not    507,918,512.04           96.95%     111,244,947.28       21.90%       396,673,564.76
    consolidated
    Sub-total of group        507,918,512.04           96.95%     111,244,947.28       21.90%       396,673,564.76
    Account receivable
    with minor individual
    15,988,232.58            3.05%        15,988,232.58     100.00%
    amount but bad debt
    provision is provided
    Total             523,906,744.62          100.00%     127,233,179.86       24.29%       396,673,564.76
    Including: foreign currencies
    Balance of book value at beginning of
    Balance of book value at end of term
    term
    Items
    Original       Exchange     Translated to         Original     Exchange Translated to
    currency         rate          RMB                currency       rate           RMB
    USD               2,847,661.28          6.48   18,455,737.46        3,413,051.32         6.62 22,603,614.98
    HKD               9,256,528.95          0.83      7,697,729.47      9,256,528.95         0.85     7,876,658.18
    Others               5,805.72           6.67        38,736.92
    Total                                       26,192,203.85                                     30,480,273.16
    Account receivables on which bad debt provisions are provided on age basis in the group:
    Balance of book value at end of term
    Age                                                       Bad debt
    Amount          Proportion                                    Net amount
    provision
    within 1 year                    313,194,358.37       50.85%         9,396,022.37               303,798,336.00
    1-2 yrs                           78,126,168.80         12.68%            7,812,616.88           70,313,551.92
    2-3 yrs                           73,230,081.10         11.89%          21,969,024.33            51,261,056.77
    Over 3 yrs                       134,915,933.72         21.90%          67,457,966.88            67,457,966.85
    Total                  599,466,541.99       97.32%     106,635,630.46        492,830,911.53
    Balance of book value at beginning of term
    Age                                                        Bad debt
    Amount          Proportion                            Net amount
    provision
    within 1 year                    236,060,382.71       45.06%         7,081,926.52       228,978,456.19
    1-2 yrs                           52,161,878.34             9.96%         5,216,187.84           46,945,690.50
    2-3 yrs                           54,506,462.84         10.40%          16,351,938.85            38,154,523.99
    Over 3 yrs                       165,189,788.15         31.53%          82,594,894.07            82,594,894.08
    Total                  507,918,512.04         96.95%         111,244,947.28           396,673,564.76
    Details of receivable accounts with minor amount but provided of bad debt provisions individually:
    Description of
    Book value at       Bad debt
    the receivable                                           Rate                   Reason
    end of term        provision
    accounts
    Curtain       wall
    Aged over 5 years, not
    project                   803,340.45       803,340.45     100.00%
    expectable to be retrieved
    receivable
    68
    Description of
    Book value at         Bad debt
    the receivable                                                  Rate                  Reason
    end of term          provision
    accounts
    Curtain       wall
    Aged over 5 years,            not
    project                     660,625.41             660,625.41    100.00%
    expectable to be retrieved
    receivable
    Aged over 5 years,            not
    Trade receivable            648,100.95             648,100.95    100.00%
    expectable to be retrieved
    Curtain          wall
    Aged over 5 years,            not
    project                     430,629.58             430,629.58    100.00%
    expectable to be retrieved
    receivable
    Aged over 5 years,            not
    Trade receivable            433,868.60             433,868.60    100.00%
    expectable to be retrieved
    Curtain          wall
    Aged over 5 years,            not
    project                     354,177.00             354,177.00    100.00%
    expectable to be retrieved
    receivable
    Curtain          wall
    Aged over 5 years,            not
    project                     346,573.70             346,573.70    100.00%
    expectable to be retrieved
    receivable
    Curtain          wall
    Aged over 5 years,            not
    project                     316,861.34             316,861.34    100.00%
    expectable to be retrieved
    receivable
    Curtain          wall
    Aged over 5 years,            not
    project                     300,000.00             300,000.00    100.00%
    expectable to be retrieved
    receivable
    Aged over 5 years,            not
    Trade receivable
    487,785.66             487,785.66    100.00%    expectable to be retrieved
    Total          4,781,962.69      4,781,962.69
    Note: As of December 31, 2011, account receivables, on which the Company has provided full bad
    debt provision, was amounted to RMB16,499,671.58.
    (2) There is no receivable account that have been fully provided of bad debt provision, or with great
    portion, and retrieved or written back in the report term, or such account with major amount retrieved in
    the report term..
    (3) No receivable account has been deducted in current year.
    (4) No receivable account due from shareholders with over 5% (included) of the Company’s shares
    or related parties.
    (5) Top 5 of receivables at end of report term:
    Relation
    Amount at end                       % in total
    Name of the companies             with the                           Age
    of term                          receivables
    Company
    Shenzhen Greenview Property Co.,                                           Within 1
    Client         36,302,792.44                        5.89%
    Ltd.                                                                         year
    Dalian Wanda Commercial                   Client         24,098,058.91     Within 1           3.91%
    69
    Property Co., Ltd.                                                       year
    Hainan Sanya Phoenix Island                                            Within 1
    Client       19,934,639.77                            3.24%
    Development Co., Ltd.                                                    year
    Xin’Mo’er Property Development                                       Within 1
    Client       32,358,942.75                            5.25%
    (Shenyang) Co., Ltd.                                                     year
    Shenzhen Metro Group Co.,                                              Within 1
    Client       23,166,947.67                            3.76%
    Ltd.                                                                     year
    Total                                135,861,381.54                           22.06%
    (4) Other account receivable
    (1) Other account receivable on categories
    Balance of book value at end of term
    Categories                      Book value                 Bad debt provision
    Net amount
    Amount                                     Providing
    Ratio (%)      Amount
    rate (%)
    Other receivables with major
    individual amount and bad
    1,220,316.84         1.87%   1,220,31.84      100.00%
    debt    provision   provided
    individually
    Other receivables provided                                                                    51,503,441.5
    61,048,293.29      93.76% 9,544,851.75          15.63%
    bad debt provision in groups                                                                             4
    Incl. Receivable accounts not                                                                 51,503,441.5
    61,048,293.29      93.76% 9,544,851.75          15.63%
    consolidated                                                                                             4
    51,503,441.5
    Sub-total of group            61,048,293.29      93.76% 9,544,851.75          15.63%
    4
    Other account receivable with
    minor individual amount but          2,841,928.16         4.36% 2,841,928.16       100.00%
    bad debt provision is provided
    13,607,096.7                 51,503,441.5
    Total
    65,110,538.29 100.00%                 5        20.90%             4
    Balance of book value at beginning of term
    Categories                      Book value               Bad debt provision
    Providing    Net amount
    Amount       Ratio (%)    Amount
    rate (%)
    Other receivables with major
    individual amount and bad
    1,220,316.84         2.33% 1,220,316.84       100.00%
    debt    provision   provided
    individually
    Other receivables provided                                                                    39,235,264.8
    48,373,161.47      92.25% 9,137,896.60          18.89%
    bad debt provision in groups                                                                             7
    Incl. Receivable accounts not                                                                 39,235,264.8
    48,373,161.47      92.25% 9,137,896.60          18.89%
    consolidated                                                                                             7
    39,235,264.8
    Sub-total of group            48,373,161.47      92.25% 9,137,896.60          18.89%
    7
    Other account receivable with        2,841,928.16         5.42% 2,841,928.16       100.00%
    70
    minor individual amount but
    bad debt provision is provided
    13,200,141.6                    39,235,264.8
    Total                  52,435,406.47     100.00%                             25.17%
    0                               7
    Other account receivables on which bad debt provisions are provided on age basis in the group:
    Balance of book value at end of term
    Age                                                       Bad debt
    Amount           Proportion                                 Net amount
    provision
    within 1 year                     39,956,630.93       61.37%        1,212,866.02                38,743,764.91
    1-2 yrs                            3,488,789.08            5.36%            348,878.91             3,139,910.17
    2-3 yrs                            4,091,648.64            6.28%           1,227,494.59            2,864,154.05
    Over 3 yrs                        13,511,224.64            20.75%          6,755,612.23            6,755,612.41
    Total                   61,048,293.29       93.76%        9,544,851.75        51,503,441.54
    Balance of book value at beginning of term
    Age                                                       Bad debt
    Amount          Proportion                           Net amount
    provision
    within 1 year                     26,630,513.01       50.79%          798,915.40        25,831,597.61
    1-2 yrs                            3,702,868.95            7.06%            370,286.90             3,332,582.05
    2-3 yrs                            5,249,702.00            10.01%          1,573,293.62            3,676,408.38
    Over 3 yrs                        12,790,077.51            24.39%          6,395,400.68            6,394,676.83
    Total                   48,373,161.47            92.25%          9,137,896.60         39,235,264.87
    Including: foreign currencies
    Balance of book value at beginning of
    Balance of book value at end of term
    term
    Items
    Original      Exchange       Translated to        Original    Exchange      Translated
    currency        rate            RMB              currency        rate        to RMB
    USD                   83,464.95         6.47        540,151.77        107,953.27      6.6227     714,942.12
    Total                                            540,151.77                                   714,942.12
    Other account receivable with major amount and provided bad debt provision individually or minor
    amount but bad debt provision provided individually:
    Description of       Book value at           Bad debt
    Rate                   Reason
    other receivables      end of term            provision
    Deposit                                                                        Aged over 5 years,           not
    1,220,316.84        1,220,316.84         100.00%
    receivable                                                                     expectable to be retrieved
    Deposit                                                                        Aged over 5 years,           not
    300,000.00            300,000.00        100.00%
    receivable                                                                     expectable to be retrieved
    Deposit                                                                        Aged over 5 years,           not
    224,875.84            224,875.84        100.00%
    receivable                                                                     expectable to be retrieved
    Deposit                                                                        Aged over 5 years,           not
    159,800.00            159,800.00        100.00%
    receivable                                                                     expectable to be retrieved
    Deposit                                                                        Aged over 5 years,           not
    150,000.00            150,000.00        100.00%
    receivable                                                                     expectable to be retrieved
    Total         2,054,992.68    2,054,992.68
    Note : Receivables being provided full bad debt provisions this year were totaled to
    71
    RMB4,062,245.00.
    (2) There is no receivable account that have been fully provided of bad debt provision, or with great
    portion in previous year, but retrieved or written back in the report term, or such account retrieved or
    written back at large percentage or major amount.
    (3) No offsetting of other receivable account.
    (4) No other receivable account due from shareholders with over 5% (included) of the Company’s
    shares or related parties.
    (5) Top 5 debtors of other receivable accounts:
    Portion in total
    Name of the                             Relation with       Amount at
    Specification                                               Age         other receivable
    companies                               the Company         end of term
    accounts (%)
    project
    Wang Weihong                                contractor        3,154,006.68 Within 1 year             4.84%
    management fee
    Zhangjiakou
    Chengtou
    Deposit          Client          3,120,543.15 Within 1 year             4.79%
    Commercial
    Center
    project                                               within 1 yr /
    Xin Song               management           contractor        2,740,327.61     1-2 yrs /2-3         4.21%
    fee                                                     yrs
    Finance Bureau of
    Nanchang Hi-tech Land retrieving            authority of
    2,604,216.08 within 1 year             4.00%
    Development       compensation             land property
    Zone
    Kunming
    Construction          Bidding deposit         Client          2,500,000.00     within 1 yr           3.84%
    Trade Center
    Total                                                  14,119,093.52                         21.68%
    (5) Prepayment
    (1) Demonstrated by ages:
    Balance of book value at end of term
    Age                                                        Bad debt
    Amount          Proportion                                  Net amount
    provision
    within 1 year                     33,438,381.10       95.36%              1,443.37              33,436,937.73
    1-2 yrs (included)                    103,298.77             0.29%            10,329.88             92,968.89
    2-3 yrs (included)                    970,751.02             2.77%           291,225.31            679,525.71
    Over 3 yrs                            551,799.98             1.57%           269,232.34            316,430.50
    Total                    35,064,230.87         100.00%              572,230.90         34,525,862.83
    Balance of book value at beginning of term
    Age                                                         Bad debt
    Amount          Proportion                            Net amount
    provision
    72
    within 1 year                        18,167,810.47             87.18%                   1,443.37            18,166,367.10
    1-2 yrs (included)                       918,561.95                4.41%               10,329.88              908,232.07
    2-3 yrs (included)                     1,101,998.54                5.29%            291,225.31                810,773.23
    Over 3 yrs                               649,879.99                3.12%            269,232.34                380,647.65
    Total            20,838,250.95      100.00%          572,230.90         20,266,020.05
    Note: Book balance of prepayment has increased by 70.36% at the end of term over the beginning
    of term, which was caused by expanding of curtain wall business, and increasing of prepaid installation
    fee and trades.
    (2) Other top 5 debtors of prepayments:
    Relation        Balance of
    Name of the                                                       % in total             Date of         Reason of
    with the       book value at
    companies                                                        prepayment            prepayment        unsettled
    Company         end of term
    Shenzhen        Zhong’an
    Service not
    Lianfa Labor Service             Supplier       5,126,582.91                   14.61%          2011
    provided yet
    Co., Ltd.
    Guangdong            Xingfa                                                                                   Rights on
    Aluminum Co., Ltd.               Suppliers      1,718,431.94                    4.90%          2011           goods not
    transferred
    Nanchang Qingyunpu                                                                                            Rights on
    December
    Jiahua New-type Wall             Supplier       1,548,292.72                    4.41%                         goods not
    2010
    and Glass Firm                                                                                               transferred
    Fujian                Minfa                                                                                   Rights on
    Aluminum Co., Ltd.               Supplier        1,114,391.53                   3.18%          2011           goods not
    transferred
    Shenzhen Zhongshun
    Service not
    Labor        Outsourcing         Supplier       1,095,380.00                    3.12%          2011
    provided yet
    Co., Ltd.
    Total                               10,603,079.10                  30.21%
    (3) No prepayment account involved with shareholders with over 5% (included) of the Company’s
    shares or related parties.
    (6) Inventories
    (1) Details of inventories
    Balance of book value at end of term                Balance of book value at beginning of term
    Items                              Impairment                                             Impairment
    Amount                          Book value             Amount                          Book value
    provision                                              provision
    Raw                  38,160,358.66     225,543.53     37,934,815.13         56,115,354.65     225,543.53     55,889,811.12
    materials
    Product in           13,004,518.31                    13,004,518.31         43,221,748.57                    43,221,748.57
    process
    Finished
    goods in             18,897,114.82   2,161,154.61     16,735,960.21         14,201,337.84    2,224,683.54    11,976,654.30
    stock
    Asset
    177,033,139.92                   177,033,139.92        164,193,924.07                   164,193,924.07
    formed by
    73
    Balance of book value at end of term                 Balance of book value at beginning of term
    Items                              Impairment                                           Impairment
    Amount                               Book value         Amount                          Book value
    provision                                            provision
    construction
    contract
    Low price                  205.05                             205.05        659,849.04                        659,849.04
    consumable
    OEM
    1,862,246.00                          1,862,246.00     3,042,245.47                      3,042,245.47
    materials
    On-road            1,621,035.10                          1,621,035.10     1,301,253.84                      1,301,253.84
    goods
    Total        250,578,617.86        2,386,698.14     248,191,919.72   282,735,713.48    2,450,227.07    280,285,486.41
    (2) Change of inventory impairment provisions
    Balance of                            Decreased this term            Balance of
    book value at        Provided
    Categories                                                        Written                         book value at
    beginning of         this term                    Transferred
    back                            end of term
    term
    Raw materials                         225,543.53                                                            225,543.53
    Products in stock                    2,224,683.54                                        63,528.93        2,161,154.61
    Total                     2,450,227.07                                        63,528.93        2,386,698.14
    (3) Basis of providing impairment provision and situation of writing back
    Percentage of
    amount written
    Basis of providing impairment                                               back in the
    Categories                                                         Reason of written back
    provision                                                       balance of the
    inventory at end
    of report term
    Realizable net value lower
    Raw materials
    than realizable cost
    Realizable net value lower
    Products in stock
    than realizable cost
    (7) Available-for-sale financial asset
    Disposable financial assets are categorized as the following:
    Items                             Fair value at end of term       Fair value at beginning of term
    Available-for-sale bonds
    Available-for-sale                     equity
    4,347,000.00
    instruments                                                        4,312,000.000
    Others
    Total                                           4,312,000.000                          4,347,000.00
    Less: impairment provision for
    available-for-sale financial assets
    Net amount                                          4,312,000.000                          4,347,000.00
    Note 1: The available-for-sale financial asset is the 700,000 current shares of Tianjing Global
    Magnetic Card Co., Ltd.
    74
    (8) Investment properties
    (1) Change of investment properties on fair value basis:
    Increased this term           Decreased this term
    Fair value at           For own use
    Gain/loss                       Fair value at
    Items          beginning of Purchased        or
    from             Transferred end of term
    term                 transferred              Disposed
    change of           for own use
    from
    fair value
    inventory
    I. Total costs      188,914,883.84                                                 1,359,927.84 187,554,956.00
    1. Houses &
    188,914,883.84                                                 1,359,927.84 187,554,956.00
    buildings
    2. Land using
    -
    rights
    II. Total of fair
    value                82,311,448.89
    fluctuation                                                 5,082,327.66             409,266.74 86,984,509.81
    1. Houses &
    82,311,448.89                          5,082,327.66             409,266.74 86,984,509.81
    buildings
    2. Land using
    -
    rights
    III. Total of
    investment
    271,226,332.73
    property book
    value                                                       5,082,327.66           1,769,194.58 274,539,465.81
    1. Houses &
    271,226,332.73                          5,082,327.66           1,769,194.58 274,539,465.81
    buildings
    2. Land using
    rights
    Note 1: Investment property cost has decreased by RMB1,359,927.84, which was caused by
    adjusting of the 8th floor of Fangda Building from rental property to self-owned property. This has
    decreased by investment property cost by RMB1,359,927.84 and the accumulated fluctuation of fair
    value by RMB409,266.74.
    Note 3: Among the investment properties, Fangda Technology Building (with book balance
    RMB187,010,542.16) has been set on pledge for loans. See Note V (18).
    (2) Property license not obtained yet:
    Among the investment property, the workshop No.2 and No.3 located on Beihuan Road in
    Nanshan Shenzhen have not been granted the certificate of property, their book value at end of year was
    RMB28,084,038.20.
    (3) Property converting and change of measurement basis
    Decrease of investment property was caused by adjusting of the 8th floor of Fangda Building from
    rental property to self-owned property.
    (9) Fixed assets
    (1) Change of fixed assets and accumulated depreciations:
    Balance of book
    Balance of
    value at       Increased this     Decreased this
    Items                                                                                       book value at
    beginning of           term              term
    end of term
    term
    I. Total value of original           384,511,171.89    71,991,445.39       6,508,785.19    449,993,832.09
    75
    Balance of book
    Balance of
    value at        Increased this     Decreased this
    Items                                                                                   book value at
    beginning of            term              term
    end of term
    term
    fixed assets
    1. Houses & buildings            212,269,992.86     26,063,985.85       1,382,131.05    236,951,847.66
    2. Machinery                     132,090,633.96     41,402,155.32       3,304,418.23    170,188,371.05
    3. Automobile                     11,248,300.78          215,816.02        12,680.00     11,451,436.80
    4. Electronics and other                                4,309,488.20    1,809,555.91     31,402,176.58
    28,902,244.29
    devices
    II. Total of accumulative                               6,107,321.95    4,994,006.37    143,672,376.86
    142,559,061.28
    depreciation
    1. Houses & buildings             28,895,411.02         2,959,567.25      890,903.49     30,964,074.78
    2. Machinery                      91,185,236.25         1,570,094.52    2,927,229.04     89,828,101.73
    3. Automobile                       6,883,467.49         344,613.42                       7,228,080.91
    4. Electronics and other                                1,233,046.76    1,175,873.84     15,652,119.44
    15,594,946.52
    devices
    III. Total of fixed asset net                                                           306,321,455.23
    241,952,110.61     65,884,123.44       1,514,778.82
    value
    1. Houses & buildings            183,374,581.84     23,104,418.60         491,227.56    205,987,772.88
    2. Machinery                      40,905,397.71     39,832,060.80         377,189.19     80,360,269.32
    3. Automobile                       4,364,833.29        -128,797.40        12,680.00      4,223,355.89
    4. Electronics and other
    13,307,297.77         3,076,441.44      633,682.07     15,750,057.14
    devices
    IV. Total of accumulative
    fixed assets impairment             1,397,396.09                                          1,392,125.89
    provision                                                                    5,270.20
    1. Houses & buildings
    2. Machinery                        1,397,396.09                             5,270.20     1,392,125.89
    3. Automobile
    4. Electronics and other
    devices
    V. Total of fixed asset book
    240,554,714.52     65,884,123.44       1,509,508.62    304,929,329.34
    value
    1. Houses & buildings            183,374,581.84     23,104,418.60         491,227.56    205,987,772.88
    2. Machinery                      39,508,001.62     39,832,060.80         371,918.99     78,968,143.43
    3. Automobile                       4,364,833.29        -128,797.40        12,680.00      4,223,355.89
    4. Electronics and other
    13,307,297.77         3,076,441.44      633,682.07     15,750,057.14
    devices
    Note 1: RMB6,107,321.95 of depreciation provided this term.
    Note 2: The original value of fixed asset increased by RMB71,991,445.39, includes: retrieving of credit
    in term of property by Decoration Co. with amount of RMB24,197,300.00; construction-in-process
    transferred to fixed asset with amount of RMB42,564,361.92; and investment properties adjusted to
    self-use, and newly purchased properties.
    Note 3: Original value of fixed assets reduced by RMB6,508,785.19, mainly caused by disposal,
    76
    discarding of fixed assets.
    (2) Property license not obtained yet:
    Description of    Original book     Accumulated       Net book
    Categories                                                                                    Notes
    property            value         depreciation:      value
    Idle,             under
    Houses          &     Houses in
    686,672.00         58,366.95    628,305.05 procedures            of
    buildings             Urumuqi
    property certificate
    Houses          & Multi-function                                                      Under procedures of
    4,095,350.26     1,493,500.15 2,601,850.11
    buildings            building                                                          property certificate
    Houses          &                                                                     Under procedures of
    Office building        6,769,642.00     2,495,288.56 4,274,353.44
    buildings                                                                              property certificate
    Houses          &                                                                     Under procedures of
    Workshop B-1       18,966,977.90      4,803,057.94 14,163,919.96
    buildings                                                                              property certificate
    Houses          &                                                                     Under procedures of
    Workshop B-2         6,495,786.15     1,644,944.87 4,850,841.28
    buildings                                                                              property certificate
    Houses          &   Dalian World                                                      Under procedures of
    24,197,300.00                   24,197,300.00
    buildings           Trade Tower                                                        property certificate
    Total                             61,211,728.31     10,495,158.47 50,716,569.84
    (10) Construction in process
    (1) Construction in process:
    Balance of book value at beginning of
    Balance of book value at end of term
    term
    Items
    Impairment     Net book                      Impairment     Net book
    Amount                                         Amount
    provision      value                         provision       value
    Phase I pipes,
    11,073,061.61                     11,073,061.61 9,573,061.61                    9,573,061.61
    roads, and fence
    Equipment to be
    37,192,046.30                 37,192,046.30
    reinstalled
    Equipment to be
    4,753,264.02                     4,753,264.02     8,943,256.88                 8,943,256.88
    installed
    Fangda Nanfang
    Science & Tech 9,225,304.29                        9,225,304.29
    Garden
    Others            1,623,014.94                     1,623,014.94     1,054,015.85                 1,054,015.85
    Total            26,674,644.86                26,674,644.86 56,762,380.64                        56,762,380.64
    A、 Profile of major construction in process and changes
    Initial ammount                    Increased this term
    Fund
    Project        Budget                                    Incl. Interest                      Incl. Interest
    recourse         Amount                              Amount
    capitalization                      capitalization
    Phase I pipes,
    roads,    and RMB9 mil. Independent         9,573,061.61                       1,500,000.00
    fence
    Fangda
    Nanfang
    9,225,304.29
    Science       & RMB115.05
    Tech Garden            mil.   recruited
    Equipment
    to          be                              37,192,046.30                       220,835.88
    reinstalled
    77
    Total                                      46,765,107.91                          10,946,141.17
    (Continue)
    Decreased this term                       Amount at end of term
    Incl.                                                           % of
    Project                         Transferred to                                 Incl. Interest      investment
    Amount                                   Amount                                on budget
    fixed asset                                  capitalization
    this period
    Phase I pipes, roads,
    and fence                                                        11,073,061.61                                123%
    Fangda        Nanfang
    Science   &       Tech                                            9,225,304.29                               8.01%
    Garden
    Equipment to be
    37,412,882.18       37,412,882.18
    reinstalled
    Total             37,412,882.18       37,412,882.18         20,298,365.9
    A、 No impairment occurred about construction-in-process at end of report term
    (11) Fixed asset disposal
    Balance of book value              Balance of book value      Reason of transferring
    Items
    at end of term                  at beginning of term           to disposal
    Fixed asset to be
    1,442,705.89                   586,285.67         to be discarded
    discarded
    Total                               1,442,705.89                   586,285.67
    (12) Intangible assets and development expenses
    A、 Intangible assets
    Balance of
    Balance of book
    book value at        Increased this    Decreased
    Items                                                                                 value at end of
    beginning of              term         this term
    term
    term
    I. Total of intangible asset initial value        137,634,777.72           650,764.65                       138,285,542.37
    Land using rights of Fangda Town (Phase I)
    8,543,250.00                                             8,543,250.00
    (Note 2)
    Land using rights of Fangda Town (Phase II)
    4,783,050.00                                             4,783,050.00
    (Note 3)
    Land using rights of Fangda Science & Tech
    Garden located in Gaoxin Road, Nanchang            11,064,548.41                                             11,064,548.41
    (Note 4)
    Land using rights of Shenyang Fangda (Note
    42,038,791.23                                             42,038,791.23
    5)
    Land using rights in Dongguan (Note 6)             40,006,806.75            34,659.00                        40,041,465.75
    Patent and classified tech                         27,380,919.89           453,886.00                        27,834,805.89
    Computer software                                    3,817,411.44          162,219.65                         3,979,631.09
    II. Total of              intangible     asset
    23,104,199.57         2,583,514.27                        25,687,713.84
    amortization
    78
    Balance of
    Balance of book
    book value at    Increased this   Decreased
    Items                                                                  value at end of
    beginning of          term        this term
    term
    term
    Fangda Town land using right (Phase I)         3,901,567.76       72,715.68                   3,974,283.44
    Fangda Town land using right (Phase III)       1,331,282.25       47,830.50                   1,379,112.75
    Land using rights of Fangda Science & Tech
    1,198,529.24      130,597.61                   1,329,126.85
    Garden located on Gaoxin Road, Nanchang
    Land using rights of Shenyang Fangda           2,585,514.30      420,417.90                   3,005,932.20
    Land using rights in Dongguan                    66,678.01       400,472.45                     467,150.46
    Patent and classified tech                    12,591,549.48    1,293,099.65                  13,884,649.13
    Computer software                              1,429,078.53      218,380.48                   1,647,459.01
    III. Total of book net value of
    114,530,578.15                -1,932,749.62                 112,597,828.53
    intangible assets
    Fangda Town land using right (Phase I)         4,641,682.24       -72,715.68                  4,568,966.56
    Fangda Town land using right (Phase III)       3,451,767.75       -47,830.50                  3,403,937.25
    Land using rights of Fangda Science & Tech
    9,866,019.17     -130,597.61                   9,735,421.56
    Garden located on Gaoxin Road, Nanchang
    Land using rights of Shenyang Fangda          39,453,276.93     -420,417.90                  39,032,859.03
    Land using rights in Dongguan                 39,940,128.74     -365,813.45                  39,574,315.29
    Patent and classified tech                    14,788,799.45     -839,213.65                  13,949,585.80
    Computer software                              2,388,903.87       -56,160.83                  2,332,743.04
    IV. Total of accumulated intangible
    asset impairment provisions
    Fangda Town land using right (Phase I)
    Fangda Town land using right (Phase III)
    Land using rights of Fangda Science & Tech
    Garden located on Gaoxin Road, Nanchang
    Land using rights of Shenyang Fangda
    Land using rights in Dongguan
    Patent and classified tech
    Computer software
    V. Total of intangible asset book value      114,530,578.15   -1,932,749.62                 112,597,828.53
    Fangda Town land using right (Phase I)         4,641,682.24       -72,715.68                  4,568,966.56
    Fangda Town land using right (Phase III)       3,451,767.75       -47,830.50                  3,403,937.25
    Land using rights of Fangda Science & Tech
    9,866,019.17     -130,597.61                   9,735,421.56
    Garden located on Gaoxin Road, Nanchang
    Land using rights of Shenyang Fangda          39,453,276.93     -420,417.90                  39,032,859.03
    Land using rights in Dongguan                 39,940,128.74     -362,373.26                  39,577,755.48
    Patent and classified tech                    14,788,799.45     -842,653.84                  13,946,145.61
    Computer software                        2,388,903.87        -56,160.83                       2,332,743.04
    Note 1: RMB2,583,514.27 amortized in the report term.
    79
    Note 2: In 1995, Hengxiang Jingfa Co. inputted 3,797.40 square meters of land valued
    RMB8,543,250.00 to the Company when the Company was incorporated. The land was verified by
    Shenzhen Asset Appraisal Firm with the appraisal report 深资综评报字[1995]第 20 号 to value of
    RMB8,543,250.00. .
    Note 3: According to contract 深地合字(97)012 号 engaged between the Company and Shenzhen
    Bureau of Land Planning, the Company purchased the land using rights attached to land of 15,943.60
    square meters with Ref. number T405-008 by RMB4,783,050.00.
    Note 4: In March 2003, according to the contract engaged between Jiangxi Nanchang High-tech
    Industry Zone Administration Committee and the Company, Fangda New Material Co., Ltd. had
    purchased the land of 177,047.14 square meters to the west of Aixi Lake and north of Gaoxin Road, with
    price of RMB10,622,828.28.
    Note 5: Shenyang Fangda land using right was inputted by Shenyang Hunnan New District
    National Asset Administration Co., Ltd. – the minority shareholder, to Shenyang Fangda in term of
    investment.
    Note 6: According to the “Land Using Right Contract” entered by Guangdong Dongguan National
    Land Resource Bureau and Dongguan New Material Co., Ltd. – one of the subsidiaries of the Company,
    the Company purchased the land using right of 66666 square meters (编号 2010T107 号) with
    RMB40,006,806.75.
    A、 Expenditures of development projects
    Decreased this term
    Balance of
    Recognized      Balance of
    book value at      Increased        Accounted into
    Items                                                                      as        book value at
    beginning of       this term        current income
    intangible     end of term
    term                                account
    asset
    R&D expense            1,182,970.28      151,364.02                         429,201.00       905,133.30
    Total            1,182,970.28     151,364.02                     429,201.00         905,133.30
    Note 1: Intangible asset formed by R&D accounted for 11.07% of the total intangible assets.
    (13) Goodwill
    Balance of                                      Balance of
    Impairment
    book value       Increased        Decreased     book value
    Name of the Companies                                                                       provision at
    at beginning      this term        this term      at end of
    end of term
    of term                                          term
    Shenzhen Woke           8,197,817.29                                    8,197,817.29
    Fangda Yide Co.         746,519.62                                      746,519.62       746,519.62
    Total          8,944,336.91                                    8,944,336.91     746,519.62
    Note 1: The Company acquired the 100% control power over Shenzhen Woke Co. by merger of
    enterprise under common control in May 2007. The difference between the initial investment cost and
    recognizable fair value of the investee has formed the goodwill of RMB8,197,817.29. No evidence of
    80
    impairment shown with Shenzhen Woke Co. thus no impairment provision was provided.
    Note 2: The Company acquired the minority share equities of Fangda Yide Co. in August 2007. The
    difference between the initial investment cost and recognizable fair value of the investee has formed the
    goodwill of RMB746,519.62. For Fangda Yide was not in good business operation for successive years,
    impairment provision has been provided fully upon the goodwill.
    (14) Long-term amortizable expenses
    Balance of                                                     Balance of
    Other
    book value      Increased      Amortized                       book value
    Items                                                             decrease of
    at beginning     this term       this term                       at end of
    this term
    of term                                                         term
    Upgrading of workshop
    rented    by   Fangda
    2,202,981.44      33,750.00     115,293.52                     2,121,437.92
    Decoration   Nanchang
    Branch
    Upgrading of workshop
    rented    by   Fangda         623,212.27                        69,318.20                    553,894.07
    Decoration
    Upgrading of workshop
    rented    by   Fangda
    235,877.94                        50,545.28                    185,332.66
    Decoration      Sanhe
    Branch
    Total             3,062,071.65      33,750.00     235,157.00                     2,860,664.65
    (15) Deferred income tax asset and deferred income tax liabilities
    (1) Deferred income tax asset and deferred income tax liabilities already recognized
    A. Details of un-neutralized deferred income tax asset and liabilities:
    Balance of book value at beginning of
    Balance of book value at end of term
    term
    Items             Deductible                               Deductible
    Deferred income                          Deferred income
    provisional                              provisional
    tax asset                                 tax asset
    differences                              differences
    Asset     impairment
    146,852,113.42        25,876,748.35       153,793,200.88          26,448,912.08
    provision
    Openning expenses             58,599.00             14,649.75             83,043.87           12,456.58
    Neutralizable losses      20,598,555.61          4,944,458.31       20,406,633.15           4,898,982.91
    Expectible liabilities       883,881.35            132,582.20          347,657.52             52,148.63
    Others                     3,908,732.47            488,591.56
    Total           172,301,881.85        31,457,030.17       174,630,535.42          31,412,500.20
    Balance of book value at beginning of
    Items           Balance of book value at end of term
    term
    81
    Taxable                                       Taxable
    Deferred income                             Deferred income
    provisional                                   provisional
    tax liability                               tax liability
    difference                                    difference
    Adjustment           of
    investment property          121,837,272.54             28,930,168.72      115,022,192.93          27,342,717.60
    fair value
    Adjustment           of
    sellable      financial         3,912,000.00               938,880.00         3,947,000.00             947,280.00
    asset fair value
    Change of fair value
    caused by share                               -                        -
    option contracts
    Total                125,749,272.54            29,869,048.72      118,969,192.93          28,289,997.60
    (2) Particulars about deductible provisional difference or losses by non-recognized deferred income
    tax assets
    Items                                End of term                       Beginning of term
    Asset impairment provision                                       26,881,141.42                     27,185,509.66
    Deductible losses                                                69,848,705.56                     66,536,383.69
    Total                        96,729,846.98             93,721,893.35
    Note: In coming periods, none of Fangda Yide, Fangda Guoke, and Fangda Aluminum may
    possibly acquire taxable gains enough to offset deferred income tax asset.
    (3) Deductible losses of non-recognized deferred income tax assets will due in following years:
    Year                             End of term                   Beginning of term            Note
    2011                                                                  3,197,346.04          Without
    2012                                        23,845,037.38            11,917,349.15     considering
    2013                                        12,126,192.06            12,126,192.06     earlier
    2014                                        10,350,213.83            21,401,565.96     termination of
    2015                                        17,726,273.12            17,893,930.48     subsidiaries
    2016                                         5,800,989.17
    Total                                       69,848,705.56            66,536,383.69
    (16) Asset impairment provision
    Balance of                                Decreased this term          Balance of
    book value at          Increased
    Items                                                                                       book value at
    beginning of           this term     Written back     Transferred       end of term
    term
    Bad debt provision          141,005,552.36        6,264,548.84   9,951,402.04        4,069.47     137,314,629.69
    Inventory
    impairment
    provision                     2,450,227.07                                          63,528.93        2,386,698.14
    Fixed               asset
    impairment
    provision                     1,397,396.09                                           5,270.20        1,392,125.89
    Goodwill
    impairment                     746,519.62                                                              746,519.62
    82
    Balance of                              Decreased this term          Balance of
    book value at       Increased
    Items                                                                                  book value at
    beginning of        this term        Written back     Transferred     end of term
    term
    provision
    Total             145,599,695.14     6,264,548.84      9,951,402.04       72,868.60    141,839,973.34
    (17) Assets with constrained ownership
    Assets with constrained ownership are:
    Balance of
    Balance of         Reason of
    Category of        book value at         Increased         Decreased
    book value at     restriction on
    assets           beginning of          this term         this term
    end of term     property rights
    term
    Asset under guarantee
    Fangda        Tech
    Building      (The   184,286,809.08       4,492,927.66      1,769,194.58     187,010,542.16    Loan pledge
    part for rent)
    Fangda      Tech
    Building    (The      13,791,148.03       1,955,646.58       175,479.38       15,571,315.23    Loan pledge
    part for own use)
    Total          184,286,809.08       4,492,927.66      1,769,194.58     187,010,542.16
    (18) Short-term loans
    Short-term loans are:
    Balance of book value         Balance of book value at
    Categories                                                                               Note
    at end of term               beginning of term
    Borrowings          with
    200,000,000.00                       200,000,000.00            Note 1
    security and guarantee
    Guarantee loan                  183,000,000.00                       197,000,000.00       Note 2
    Total                 383,000,000.00                       397,000,000.00
    Note 1: The short-term borrowing of RMB200 million               was secured by Fangda Tech Building
    (limited to RMB113 million), and guaranteed by Fangda Decoration (limited to RMB50 million),
    Fangda Automatic (limited to RMB50 million), and Fangda New Material (limited to RMB50 million).
    Note 2: In the guaranteed loans, RMB73 million was the short-term loans obtained by Fangda New
    Material and secured by the Company; the rest RMB90 million was the short-term loans obtained by
    Fangda Decoration and secured by the Company. RMB20 million was the short-term loans obtained by
    Fangda Automatic. For details please go to Note VI (II) 2.
    (19) Notes payable
    Balance of book value at end of             Balance of book value at
    Categories
    term                              beginning of term
    Bank acceptance                                       35,760,723.63                           59,241,926.92
    Commercial acceptance                                       5,891,845.14                         984,091.73
    83
    Total                                  41,652,568.77                             60,226,018.65
    Note 1: Amount due in next fiscal term will be RMB41,652,568.77.
    Note 2: The outstanding book value of notes payable has increased by 30.84% over the report term,
    which was caused by payment disbursed for notes.
    (20) Account payable
    (1) As of June 30, 2011, payable accounts with large amount and aged over one year:
    Supplier                 Amount                     Description               Reason of overdue
    Fangda         Building                                                              Not claimed by the
    1,278,967.69             Project payment
    provisional booking                                                                       creditor
    Deawoo Group (South                                                                  Not claimed by the
    900,000.00                 Trade
    Korea)                                                                                    creditor
    Fujian       Quanzhou
    Not claimed by the
    Sansong        Ceramic            880,000.00                 Trade
    creditor
    Development Co., Ltd.
    Total                  3,058,967.69
    (2) No payables due to shareholders with 5% or above shares of the Company, nor any related
    parties.
    (21) Prepayment received
    (1) Advances received with large amount and aged over one year
    Causation of not
    Items            Amount            Date of occur               Contents              settled
    Line  No.2          of                                               Advances for      Project not
    Wuhan Metro               7,640,456.00          2010.01              project works     commenced
    Total                     7,640,456.00
    (2) No prepayment received from shareholders with 5% or over shares of the Company, nor related
    parties.
    (22) Employees’ wage payable
    Details of remunerations payable to the employees
    Balance of
    Balance of
    book value at     Increased this     Decreased
    Items                                                                        book value at
    beginning of           term          this term
    end of term
    term
    Wage, bonus, allowance          and
    10,008,820.62    53,273,766.37     56,174,271.26      7,108,315.73
    subsidies
    Employee welfare                                            466,625.62        466,625.62             -
    Social insurance                                           2,267,776.02      2,267,635.52         140.50
    Incl. Medical insurance                                     547,030.98        547,030.98             -
    Basic pension                                              1,580,801.87      1,580,661.37         140.50
    Unemployment insurance                                      53,951.90         53,951.90              -
    Labor injury insurance                                      60,035.28         60,035.28              -
    84
    Balance of
    Balance of
    book value at      Increased this      Decreased
    Items                                                                       book value at
    beginning of            term           this term
    end of term
    term
    Breeding insurance                                         25,955.99         25,955.99             -
    Housing fund                                               959,282.60       959,282.60             -
    Dismissing policy                                              -                 -                 -
    Trade union and education
    4,038,900.38         11,892.92        115,634.24      3,935,159.06
    allowance
    Non-monetary welfare                                       13,537.50         13,537.50             -
    Compensations for disengagement
    -                 -                 -
    other than dismissing policy
    Others                                                         -                 -                 -
    Total              14,047,721.00       56,992,881.03     59,996,986.74   11,043,615.29
    (23) Tax payable
    Balance of book value at beginning
    Items             Balance of book value at end of term
    of term
    VAT                                                   -1,853,670.64                         -9,822,981.98
    Business tax                                      16,706,353.30                            16,951,513.27
    Enterprise income tax                                 8,146,210.93                         10,240,451.93
    Personal income tax                                     509,001.60                            508,580.44
    City maintenance and
    1,732,308.43                          1,795,117.16
    construction tax
    Land using tax                                          202,954.53                            221,094.98
    Property tax                                            663,829.27                            700,416.21
    Education surtax                                        843,302.31                            874,485.65
    Local         education
    35.64                                 1,299.11
    surcharges
    Other taxes                                              49,110.08                             50,666.94
    Total                                   26,999,435.45                            21,520,643.71
    (24) Interest payable
    Balance of book value at beginning
    Items             Balance of book value at end of term
    of term
    Short-term borrowing
    548,793.05                            610,850.84
    interests payable
    Total                                        548,793.05                            610,850.84
    (25) Other account payable
    (1) No other payables due to shareholders with 5% or above of shares of the Company, nor related
    parties.
    (2) Other payables with large amount in detail:
    Balance of book value at end
    Items                                                              Description
    of term
    85
    Ningbo Lailai Energy-saving Doors                           2,060,000.00
    and Windows Co., Ltd.                                                                     Deposit
    Transportation of project works                             1,825,428.09             Transportation
    Jiangxi Changxing Logistics Co.,
    Ltd.                                                        1,550,250.37         Transportation payable
    Jiangsu Tianyi Garment Co., Ltd.                            1,500,000.00                  Deposit
    Offshore freight                                            1,340,245.56         Transportation payable
    Total                                      8,275,924.02
    (3) Large amount other payables aged over one year:
    Balance of book
    Items                                                Description               Reason of overdue
    value at end of term
    Ningbo            Lailai
    Energy-saving Doors and                   2,060,000.00         Project deposit      construction in process
    Windows Co., Ltd.
    Jiangsu Tianyi Garment                                                                   Not claimed by the
    1,500,000.00         Project deposit
    Co., Ltd.                                                                                     creditor
    Shenzhen Yachang Color
    950,000.00               Deposit                  On rental
    Printing Co., Ltd.
    Total                          4,510,000.00
    (26) Expectable liabilities
    Balance of book value at end of        Balance of book value at beginning
    Categories
    term                                    of term
    Maintenance expenses                                      883,881.35                            347,657.52
    Total                                            883,881.35                                347,657.52
    (27) Other non-recurring liabilities
    Balance of book      Balance of book
    Items                                      value at end of          value at
    term           beginning of term
    Application and demonstration project of LED lighting tech
    334,850.00              720,000.00
    (Note 1)
    Optical crystal project (Note 2)                                          1,200,000.00          1,200,000.00
    Environmental protection and energy saving project (Note 3)                 500,000.00              500,000.00
    Graphic grounding production and expanded chip production
    500,000.00              500,000.00
    (Note 4)
    Purchasing of equipment for development of high-power
    750,000.00              850,000.00
    chips (Note 5)
    Fund for optical products (Note 6)                                          480,000.00              480,000.00
    High-power-low-attenuation plug in LED technologies                         800,000.00
    Total                                         4,564,850.00          4,250,000.00
    Note 1: According to document 粤科计字[2008]145 号 issued by Guangdong Department of
    Science and Technologies, and Guangdong Department of Finance on November 24, 2008, Fangda
    86
    Guoke was assigned to undertake the 揹 emonstrative project of LED production technologies with the
    government fund of RMB3.5 million. According to the agreement engaged between Fangda Guoke and
    Shenzhen Technologies and Information Committee on January 12, 2010, and the contract 深科工贸信
    计财字〔2009〕82 号, Shenzhen Technologies and Information Committee provided RMB1 million in
    2010 to support the project led by Fangda Guoke.
    Note 2: According to the contract engaged between Shenzhen Technologies and Information Bureau
    and Fangda Guoke Co. (深科信(2009)202 号) in July 2009, the Bureau provided RMB1.2 million to
    Fangda Guoke to support the development of “photon crystal production technologies”. As of end of this
    term, this project is under development.
    Note 3: According to the notice 沈新区委发(2009)52 号 issued by Shenyang Hunnan New Zone
    Administration Committee on August 26, 2009, the Committee provided RMB500 thousand to Shenyang
    Fangda to support the energy-saving projects. As of June 30, 2011, this project was not through
    acceptance inspection yet.
    Note 4: According to the notice 沈新区委发(2009)72 号 issued by Shenyang Hunnan New Zone
    Administration Committee on August 26, 2009, the Committee provided RMB500 thousand to Shenyang
    Fangda to support the production technologies of graphic background and extension and chips projects.
    As of June 30, 2011, this project was not through acceptance inspection yet.
    Note 5. According to document 深科信〔2005〕401 号, Shenzhen Bureau of Finance and Fangda
    Guoke entered the “Contract on using of technical development fund”. As of December 31, 2008,
    Fangda Guoke has received the fund for purchasing of equipment in two payment amounted to RMB1
    million. In the report term, Fangda Guoke has recognized the government subsidy of RMB100,000.00
    against the expected useful life of the equipment and amortizing of intangible assets. As of June 30, 2011,
    the government subsidy recognized was accumulated to RMB250,000.00.
    Note 6. According to document 沈信产发〔2008〕27 号 issued by Shenyang Information Industry
    Bureau and Shenyang Bureau of Finance on July 17, 2008, Shenyang Fangda received RMB480
    thousand of subsidy to support the production technologies of graphic background and extension and
    chips projects. As of June 30, 2011, this project was not through acceptance inspection yet.
    Note 7: According to the “Scientific and technological project contract of Shenyang High-tech
    Zone” engaged between Shenyang High-tech Development Zone Administration Committee and
    Shanyang Fangda in November 2010, the Committee was about to provide finance of RMB800 thousand
    to Shenyang Fangda for purchasing of equipment. As of June 30, 2011, this project was not through
    acceptance inspection yet.
    (28) Share capital
    (1) Change of capital shares in the period
    Balance of book value at                                                 Balance of book value
    Changed in current term
    beginning of term                                                        at end of term
    Class of
    shareholding                             Issuing        Transferred
    Amount of                       Bonus                                   Amount of
    Proportion of new            from     Others   Sub-total             Proportion
    shares                         shares                                   shares
    shares         reserves
    87
    Balance of book value at                                                   Balance of book value
    Changed in current term
    beginning of term                                                          at end of term
    Class of
    shareholding                                     Issuing        Transferred
    Amount of                        Bonus                                    Amount of
    Proportion of new            from     Others    Sub-total             Proportion
    shares                          shares                                    shares
    shares         reserves
    I. Shares with
    trading    limited
    conditions
    1.     State-owned
    shares
    2. National legal
    person shares
    3. Other domestic
    48,014,828       9.52%
    shares                                                              24,007,414           24,007,414 72,022,242       9.52%
    Incl.
    Non-government
    18,200,000       3.61%
    domestic      legal
    person shares                                                        9,100,000            9,100,000 27,300,000       3.61%
    Domestic
    natural      person         29,814,828       5.91%
    shares                                                              14,907,414           14,907,414 44,722,242       5.91%
    4.        Overseas
    shareholding
    Incl. Shares held
    by foreign legal
    persons
    Foreign
    natural        person
    shares
    Total          of
    48,014,828       9.52%
    conditional shares                                                  24,007,414           24,007,414 72,022,242       9.52%
    II. Shares without
    trading    limited
    conditions
    1. Common shares
    232,624,317      46.10%
    in RMB                                                             116,312,158          116,312,158 348,936,475     46.10%
    2. Foreign shares
    223,967,459      44.38%
    listed at home                                                     111,983,729          111,983,729 335,951,188     44.38%
    3. Foreign shares
    placed abroad
    4. Others
    Total              of
    unconditional              456,591,776      90.48%
    shares                                                             228,295,887          228,295,887 684,887,663     90.48%
    Total of capital
    504,606,604     100.00%
    shares                                                       252,303,301          252,303,301 756,909,905   100.00%
    Note 1. On March 25, 2011, the Shareholders’ Meeting 2010 adopted the dividend and
    capitalizing plan of 2010. In which the plan for capitalizing of common reserves was:
    Upon the total capital shares of 504,606,604 as of December 31, 2010, capital reserves were to
    88
    capitalized on 5 to 10 basis, and the capital shares were increased to 756,909,90 thereafter. This has been
    approved by the authority with document 深 科 工 贸 信 资 字 [2011]0755 号 , and re-registration
    procedures are in process.
    Note 3: As of June 30, 2011, the book balance of conditional shares was 72,022,242, including
    71,917,800 shares could be released on July 15, 2011. The rest are executives’ shares.
    (29) Capital reserves
    Change of capital reserves:
    Balance of book                                          Balance of
    Increased   Decreased this
    Items                       value at                                            book value at
    this term       term
    beginning of term                                         end of term
    Share capital premium                 290,541,523.48                     252,303,301.00      38,238,222.48
    Other capital reserves                 43,892,491.44                          26,600.00      43,865,891.44
    Total                   334,434,014.92                   252,329,901.00  82,104,113.92
    Note 1. Capital reserves – share capital premium has decreased by RMB252,303,301.00, which was
    caused by capitalizing of common reserves according to the resolutions adopted by the Shareholders’
    Meeting 2010.
    Note 2. Other capital reserves has reduced by RMB26,600.00, which was net decreased amount of
    fair value of available-to-sale financial assets after deducting of income tax.
    (30) Surplus reserves
    Change of surplus reserves:
    Balance of book                                              Balance of
    Increased this   Decreased this
    Items                    value at                                                book value at
    term            term
    beginning of term                                             end of term
    Statutory             surplus
    17,834,977.97                                            17,834,977.97
    reserves
    Total                   17,834,977.97                                            17,834,977.97
    (31) Retained profit
    Change of retained profit:
    Items                              Current term
    Profit retained from end of previous period                 153,115,142.18
    Plus: Adjusted amount of retained profit at
    beginning of year (-“ for decrease)
    Profit not distributed at the beginning of term             153,115,142.18
    Plus: Net profit attributable to owners of the
    parent company                                               46,094,698.26
    Attributable profit                                         199,209,840.44
    Less: Statutory surplus reserves
    Optional surplus reserves
    Common risk provisions
    Common share dividend payable
    89
    Items                              Current term
    Common share dividend transferred to
    capital share
    Retained profit at the end of term                         199,209,840.44
    (32) Operational turnover and costs
    (1) Details of business turnover and costs:
    Amount occurred in
    Items                         Occurred current term
    same period last year
    Turnover                                                        579,154,393.68               423,379,762.74
    Incl. Main business turnover                                  556,233,228.08               401,760,236.81
    Other business income                                 22,921,165.60                 21,619,525.93
    Operation cost                                                  460,275,267.38               339,167,650.59
    Incl. Main business cost                                      449,536,349.29               330,318,126.57
    Other business cost                                   10,738,918.09                  8,849,524.02
    (2) Main business turnover classified on industries:
    Amount        occurred   in
    Occurred current term
    same period last year
    Industries
    Operation                                    Operation
    Turnover                                 Turnover
    cost                                      cost
    325,621,513.69         261,964,502.91
    Metal production
    485,234,819.90   388,995,725.08
    Railroad industry                63,530,580.66    53,584,619.99        71,094,433.93           58,550,560.42
    Lighting        product           7,467,827.52     6,956,004.22            5,044,289.18         9,803,063.24
    industry
    401,760,236.81         330,318,126.57
    Total
    556,233,228.08   449,536,349.29
    (3) Business segments on districts:
    Amount        occurred   in
    Occurred current term
    same period last year
    Name of districts
    Operation                                    Operation
    Turnover                                 Turnover
    cost                                      cost
    390,733,338.54         321,634,382.27
    Domestic
    492,995,212.20   408,525,736.36
    Overseas                         63,238,015.88    41,010,612.93        11,026,898.27            8,683,744.30
    401,760,236.81         330,318,126.57
    Total
    556,233,228.08   449,536,349.29
    (4) Turnover contributed by top 5 clients
    Ranks of clients                     Occurred current term              Portion in total turnover
    No.1                                                     70,628,120.30                                12.20%
    No.2                                                       54,382,714.15                              9.39%
    No.3                                                       47,004,202.35                              8.12%
    No.4                                                       44,315,598.32                              7.65%
    90
    No.5                                                       41,646,076.07                                  7.19%
    Total                                 257,976,711.19                                 44.54%
    (33) Turnover from construction contracts
    Contracts accounted over 10% of the total business turnover of current period:
    Accumulated
    Cause for
    Accumulated       gross profit          Amount        Predicted
    Project        Total amount                                                                         predicted
    costs occurred    recognized            settled          loss
    loss
    (“-“ for loss)
    Block
    1-5 of
    Sanya        145,977,668.00     88,508,750.60    35,213,895.00        61,600,466.00
    Phoenix
    Island
    Total        145,977,668.00     88,508,750.60    35,213,895.00        61,600,466.00                          -
    (34) Business tax and surcharge
    Amount occurred in
    Type of taxes             Occurred current term                                             Rate
    same period last year
    Business tax                           6,816,196.08                  5,739,170.20      See Note III - 1
    City    maintenance
    931,385.50                      428,473.80    See Note III - 1
    and construction tax
    Education surtax                         471,297.96                      423,369.34    See Note III - 1
    Property tax                             329,605.54
    Others                                   231,740.23                      677,371.86
    Total                        8,780,225.32                     7,268,385.20
    (35) Sales expense
    Amount occurred in same
    Items                    Occurred current term
    period last year
    Manpower                                                    4,557,707.69                        3,713,005.35
    Freight and misc.                                           3,564,345.80                        2,237,294.51
    After-sales                                                          600.00                        425,407.91
    Business trips                                              1,385,153.93                        1,377,579.18
    Business reception expenses                                  845,239.04                         1,349,640.35
    Material consumable                                          224,038.91                            719,781.97
    Office expenses                                              115,370.20                             55,189.33
    Advertisement and exhibition                                 234,903.52                            835,252.86
    Rental                                                       485,846.59                            282,568.71
    Testing                                                      292,219.66                            109,453.05
    Consulting                                                    35,800.00                                    0.00
    Misc. expenses                                              2,296,497.08                        1,627,882.13
    91
    Total                                 14,037,722.42                  12,733,055.35
    Note: Accrual amount of current period increased by 22.75% over the same period of last year,
    which was caused by increase of labor and transportation expenses.
    (36) Administrative expense
    Amount occurred in same
    Items                     Occurred current term
    period last year
    Manpower                                              21,071,160.19                  18,242,666.42
    Depreciation and amortization                          6,005,472.48                   4,334,810.59
    Agencies                                               1,790,279.20                   1,636,653.29
    Tax                                                    2,397,206.79                   2,680,214.84
    Maintenance fee                                        1,104,675.09                   2,163,150.57
    Water and electricity                                  1,012,462.22                     911,556.36
    Office expenses                                         411,594.25                      511,440.89
    Business trips                                         1,659,945.51                     753,269.37
    Business reception expenses                            1,809,867.94                   1,050,093.26
    Rental                                                  667,676.38                      379,777.11
    Lawsuit                                                2,227,852.55                     195,530.00
    Material consumable                                     375,819.16                      200,561.55
    Property management fee                                 753,982.30                      546,514.78
    Misc. expenses                                         4,937,310.92                   6,115,662.48
    Total                                 46,225,304.98                  39,721,901.51
    Note: Accrual amount of current period increased by 16.37% over the same period of last year,
    which was caused by increase of labor expenses.
    (37) Financial expenses
    Amount occurred in same
    Items                     Occurred current term
    period last year
    Interest expense                                      10,181,079.96                    8,949,946.50
    Less: Incoming interests                               2,965,007.59                     655,857.65
    Plus: Exchange loss                                     986,590.79                      236,298.81
    Less: Exchange gain                                                 -                     9,323.92
    Commission charges and others                           605,123.12                    1,668,533.39
    Total                                     8,807,786.28                  10,189,597.13
    (38) Income from change of fair value
    Source of income from fluctuation of                                    Amount occurred in same
    Occurred current term
    fair value                                                    period last year
    Investment property measured at fair
    value                                                   5,082,327.66                  6,553,456.32
    92
    Total                                       5,082,327.66                         6,553,456.32
    (39) Investment income
    (1) Investment income by resources:
    Amount occurred in
    Sources of investment gains                       Occurred current term
    same period last year
    Investment       gains      from          disposal      of
    available-for-sale financial assets                                                                3,176,516.97
    Other investment income                                                   15,342.47                    -2,450.00
    Total                                          15,342.47                3,174,066.97
    Note: Accrual amount of current period increased by 99.51% over the same period of last year,
    which was caused by greater gains from disposal of available-for-sale financial assets.
    (40) Asset impairment loss
    Occurred current           Amount occurred in
    Items
    term                  same period last year
    Bad debt losses                                                    -3,686,853.20                     854,610.52
    Total                                    -3,686,853.20                     854,610.52
    (41) Non-operational income
    Occurred current      Amount occurred in           Carried to current
    Items
    term             same period last year       contingent gain/loss
    Gains from disposal                of
    non-current assets                                   498.67           10,727,318.70                      498.67
    Incl. Gains from disposal of
    fixed assets                                         498.67            4,181,049.33                      498.67
    Gains from debt reorganization                                            20,603.21
    Government subsidies                             63,800.00             3,673,500.00                   63,800.00
    Penalty income                                   78,830.00                86,341.65                   78,830.00
    Income from penalties                             5,000.00                    4,000.00                 5,000.00
    Payable account not able to be
    paid                                              1,840.75                88,520.46                    1,840.75
    Others                                        5,311,831.22               143,763.53                5,311,831.22
    Total                            5,461,800.64            14,744,047.55                5,461,800.64
    Note 1: Other details are:          (1) Fangda Decoration retrieved the overdue project payment in term
    of property, including RMB4,863,766.62 of interests. (2)            Disposal      of      waste    material   was
    RMB392,611.92.
    Note 2. Non-operational gains decreased by 62.96% comparing with the same period of last year,
    which was mainly caused by receiving of site moving compensation by Fangda Aluminum last year.
    93
    (42) Non-operational expenditure
    Occurred current     Amount occurred in       Carried to current
    Items
    term            same period last year   contingent gain/loss
    Total of loss from disposal of
    non-current assets                           247,866.36               301,542.48              247,866.36
    Incl. Loss from disposal of fixed
    assets                                       247,866.36               301,542.48              247,866.36
    Losses from debt restructuring                                        227,555.80
    Penalty paid                                                            1,360.00
    Outgoing donations                           203,000.00               572,762.20              203,000.00
    Others                                       139,007.59                27,391.94              139,007.59
    Total                         589,873.95             1,130,612.42              589,873.95
    (43) Income tax expenses
    Composition of income tax expenses:
    Amount occurred in same
    Items                     Occurred current term
    period last year
    Income tax calculated according to the law
    and regulations of current term                              8,336,787.87                   3,500,469.18
    Deferred income tax                                          2,227,649.27                   2,985,816.65
    Total                      10,564,437.14                6,486,285.83
    Note 1. Income tax expenses of RMB8,336,787.87 was incurred by Fangda Decoration, Fangda
    New Materials, and Fangda Automatic.
    Note 2. Deferred income tax was mainly the taxable temporary differences caused by fluctuation of
    fair value of investment property of the term.
    (44) Calculation formula of basic earnings per share and diluted earnings per share
    According to “Information Disclosure Rules No.9 – Calculation and disclosure of net earnings on
    asset and earnings per share” ( 中 国 证 券 监 督 管 理 委 员 会 公 告 [2010]2 号 ) and “Explanation
    Announcement of Information Disclosure No. 1 – Non-recurring gain/loss” (中国证券监督管理委员会
    公告[2008]43 号), the earnings per share is calculated as the following:
    1.    Calculation outcome
    Current term               Same period of last term
    Profit of the report period               Basic           Diluted       Basic            Diluted
    earnings per      earnings    earnings per earnings per
    share          per share      share              share
    Net profit attributable to common share
    0.061      0.061          0.049           0.049
    holders of the Company (I)
    Net profit attributable to common share
    holders of the Company after deducting of                 0.051      0.051          0.019           0.019
    non-recurring gain/loss (II)
    94
    2.     Formula of earnings per share
    Same period of
    Items                                      No.          Current term
    last term
    Net profit attributable to common shareholders of the
    1                       46,205,772.95     33,608,581.42
    Company
    Non-recurring gain/loss attributable to the net profit of
    common shareholders of the parent company after               2                        7,709,204.65     20,442,939.40
    deducting of income tax influences
    Net profit attributable to common share holders of the
    3=1-2                   38,385,493.61     13,165,642.02
    Company after deducting of non-recurring gain/loss
    Total of shares at beginning of year                          4                        504,606,604       680,177,106
    Amount of shares increased by capitalizing of common
    5                        252,303,301
    reserves or share dividend
    6
    Amount of shares increased by issuing of new shares or
    6
    transforming of debt to shares
    6
    7
    The number of months from the next month of share
    increasing by issuing of new shares or transferring of        7
    debts to the end of report term
    7
    Amount of shares decreased by repurchasing of shares in
    8
    the report term
    The number of months since the next month of share
    9
    decreasing to the end of report term
    Amount of shares reduced                                      10
    Number of months in the report term                           11                                12                12
    12=4+5+6×7
    Weighted average of common shares issued outside (II)                                  756,909,905       680,177,106
    ÷11-8×9÷11-10
    Weighted average of common shares issued outside
    13
    adjusted for merger under common control (I)
    Basic earning per share (I)                                   14=1÷12                       0.061              0.049
    Basic earning per share (II)                                  15=3÷12                       0.051              0.019
    Diluting potential common share interests recognized as
    16                                  -                    -
    expenses
    Income tax rate                                               17                              24%                22%
    Transformation fees                                           18
    Amount of shares increased by transforming or exercising
    19
    of company bond, subscription certificate, or share option
    20=[1+(16-18)×
    Diluted earning per share (I)                                                                0.061              0.049
    (100%-17)]÷(13+19)
    21=[3+(16-18)
    Diluted earning per share (II)                                                               0.051              0.019
    ×(100%-17)]÷(12+19)
    (1) Basic earnings per share
    Basic earnings per share=P0÷S
    S= S0+S1+Si×Mi÷M0– Sj×Mj÷M0-Sk
    P0 = Net profit attributable to the common shareholders or net profit attributable to the common
    shareholder after deducting of non-recurring gain/loss. S = weighted average of common shares issued in
    the market        S0 = Total shares at the beginning of term          S1 = increased shares due to capitalizing of
    95
    common reserves or dividend Si = shares increased due to placing of new shares or transferred from debt
    in the report term   Sj = shares decreased due to actions such as repurchasing in the report term   SK =
    the amount of shares reduced M0 = number of months of the report term Mi = accumulative number of
    months from the next month of share increasing to the end of report term; Mj = accumulative number of
    months from the next month of share decreasing to the end of report term.
    (2) Diluted earning per share
    Diluted earning per share=P1/(S0+S1+Si×Mi÷M0–Sj×Mj÷M0–Sk+ weighted average of
    common shares increased by share option certificates, future option certificates, and convertible bonds)
    P1 = net profit attributable to common shareholders of the Company, or net profit attributable to
    common shareholders after deducting of non-recurring gain/loss, with considering the influences of
    diluting potential common shares, and adjusted according to Enterprise Accounting Standard and related
    regulations.   At calculating of diluted earnings per share, the Company has considered the influences
    of the entire dilute potential common shares, until the diluted earnings per share had reached the
    minimum level.
    3.   None of the amounts of common shares issued outside or potential common shares has
    greatly changed during the balance sheet date to this report is approved, no potential
    common shares with potential dilution.
    96
    (45) Other misc. incomes
    Amount occurred
    Occurred
    Items                                                                              in same period last
    current term
    year
    1. Gains (losses) from available-for-sale financial assets           -35,000.00           -346,410.96
    Less: Income tax influence of available-for-sale financial
    -8,400.00           -21,210.41
    assets
    Net amount written into other gains and transferred
    2,694,453.18
    into gain/loss in previous terms
    Sub-total                                -26,600.00         -3,019,653.73
    2. Shares in other gains of investees on equity basis
    Less: Income tax influence of shares in other gains of
    investees on equity basis
    Net amount written into other gains and transferred
    into gain/loss in previous terms
    Sub-total
    3. Amount of gains (or losses) from cash flow hedge
    instrument                                                                              -1,648,500.00
    Less: Income tax influence of cash flow hedge instruments
    -217,125.00
    Net amount written into other gains and transferred
    2,845,166.75
    into gain/loss in previous terms
    Adjusted amount transferred to initial amount of the
    0.00
    target project
    Subtotal                                                   -4,276,541.75
    4. Difference from translating of foreign currency financial
    statements
    Less: Net amount of disposing overseas business and
    transferred to current gain/loss
    Sub-total
    5. Others
    Less: Income tax influence by other accounted into other
    misc. incomes
    Net amount accounted into other misc. income and
    transferred into current gain/loss in previous terms
    Sub-total
    Total                                    -26,600.00         -7,296,195.48
    (46) Notes to the Cash Flow Statement
    1.   Other cash inflow related to operation
    Amount of the Current       Amount of the Previous
    Items
    Term                        Term
    Interest income                                          1,869,222.17                    1,470,819.53
    Allowance income                                            68,663.64                    4,623,500.00
    Bidding deposit paid                                    17,176,039.63                  13,991,502.00
    97
    Net amount of trade accounts                                  9,721,956.28                 10,449,421.25
    Others                                                        6,010,447.94                  9,014,591.68
    Total                                   34,846,329.66                 39,549,834.46
    2.   Other cash paid related to operation
    Amount of the Current        Amount of the Previous
    Items
    Term                         Term
    Administrative expense                                       16,751,465.52                 10,157,049.59
    Sales expense                                                 9,480,014.73                  5,202,990.18
    Deposits and securities                                       7,553,798.10                 16,405,862.48
    Individual borrowing                                          5,472,352.31                  5,820,664.17
    Deposit for draft, net                                        3,781,035.25                  9,854,385.82
    Others                                                       20,296,798.83                 10,586,694.56
    Total                                   63,335,464.74                 58,027,646.80
    3.   Other cash paid related to financing
    Amount of the Current        Amount of the Previous
    Items
    Term                         Term
    Payment of share placing fee                                                                2,978,629.66
    Fee of share capital re-registration                           111,983.72
    Total                                     111,983.72                   2,978,629.66
    (47) Appendix of Cash Flow Statement
    (1) Net profit adjusted to cash flow of business operation on indirect basis
    Amount of the
    Amount of the
    Supplementary Info.                                              same period of
    Current Term
    last year
    1.Net profit adjusted to cash flow of operation:
    Net profit                                                             44,120,100.19       28,239,719.82
    Plus: Asset impairment provision                                        -3,686,853.20         854,610.52
    Depreciation of fixed assets                                             6,107,321.46       4,653,198.98
    Amortizing of intangible assets                                          2,586,954.46       2,122,682.15
    Amortizing of long-term expenses                                             235,157.00
    Loss from disposal of fixed assets, intangible assets, and other
    -122,630.13
    long-term assets (“-“ for gains)                                           247,367.69
    Loss from fixed asset discard (“-“ for gains)
    Loss from fluctuation of fair value (“-“ for gains)                   -5,082,327.66      -6,553,456.32
    Financial expenses (“-“ for gains)                                   10,220,855.72        9,008,860.25
    Investment loss (“-“ for gains)                                            -15,342.47    -3,174,066.97
    98
    Amount of the
    Amount of the
    Supplementary Info.                                         same period of
    Current Term
    last year
    Decrease of deferred income tax asset (“-“ for increase)           -44,529.97     -1,240,534.28
    Increase deferred income tax asset (“-“ for decrease)            1,570,651.12      3,026,882.91
    Decrease of inventory (“-“ for increase)                        32,157,095.62    -31,020,490.97
    Decrease of operational receivable items (“-“ for increase)   -117,891,506.08    -71,345,047.83
    Increase of operational payable items (“-“ for decrease)        17,314,765.64     26,022,948.81
    其他 Others
    Cash flow generated by business operation, net                   -12,160,290.48    -39,527,323.06
    2. Major investment and financing activities not involving in
    cash flow
    Liabilities converted to capital
    Convertible bond expire in 1 year
    Fixed assets leased through financing
    3. Change of cash and cash equivalents
    Balance of cash at period end                                    415,709,113.55    498,849,443.70
    Less: Initial balance of cash                                    468,878,715.15    210,823,550.83
    Plus: Balance of cash equivalents at the period end
    Less: Initial balance of cash equivalents
    Net increasing of cash and cash equivalents                      -53,169,601.60    288,025,892.87
    (2) Cash and cash equivalents
    Amount at end
    Items                                             Initial ammount
    of term
    I. Cash                                                         415,709,113.55     468,878,715.15
    Incl: Cash in stock                                                  19,572.06          13,898.14
    Bank savings could be used at any time                415,689,541.49     468,864,140.47
    Other monetary capital could be used at any time                                 676.54
    Usable money in Central Bank
    Money saved in associated financial bodies
    Money from associated financial bodies
    II. Cash equivalents
    Incl. Bond investment due in 3 months
    III. Balance of cash and cash equivalents at end of term        415,709,113.55     468,878,715.15
    VI. Related parties and transactions
    (1) Relationship
    1. Main related parties of the Company
    99
    Voting
    Registered                  Shareholding
    Name of the       Ownership         Reg.            Legal           Business                 Organization                    power in
    capital                       in the
    parties           type            Add.        representative      property                    code                           the
    (RMB0’000)                   Company
    Company
    Shenzhen
    Banglin
    Ltd.                                              Industrial
    Technologies                        Shenzhen      Chen Jinwu                         3,000.00 72984005-5             9.09%      9.09%
    liability                                        investment
    Development
    Co., Ltd.
    Shenzhen
    Shilihe         Ltd.                                                 Industrial
    Shenzhen Wang Shengguo                         1,978.0992 72984450-7             2.36%      2.36%
    Investment Co., liability                                           investment
    Ltd.
    Hong        Kong
    Onforce            Ltd.                                              Industrial
    HK                                             N/A                             1.63%      1.63%
    International      liability                                        investment
    Co., Ltd.
    2. Particulars of the subsidiaries
    Please see Note IV.
    3. Other related parties
    Name of the parties                         Relation with the Company               Organization code
    Shenzhen      Fangda       Special
    Mr. Song Wenqing, Supervisor
    Decoration Engineering Co., Ltd.
    of the Company used to be
    (former Shenzhen Fangda Special                                                                       19229492-X
    Director of this company
    Structure Co., Ltd.) (Fangda Special
    (resigned on August 11, 2010)
    Decoration)
    Original supervisor of the
    Song Wenqing                                    Company (resigned on March
    25, 2011)
    (2) Related party transactions
    1.     Related contracting
    Offer of contracting:
    Name of           Name of              Category of                                       Pricing basis       Contract
    Commence        Termination
    the               the                asset to be                                             of            amount
    date             Date
    employer         contractor              offered                                          contracting      (RMB0’000)
    Fangda                                     Date      of
    Song                Project              Completion       Agreement
    winning in                                            772.94
    Decoration       Wenqing             contracting          of project       price
    bidding
    Fangda      Fangda                         Date      of
    Project                        Completion       Agreement
    Special                        winning in                                          2,323.08
    Decoration Decoration contracting          bidding
    of project       price
    Note. Contract amounts in above table refer to the contracted projects in process in the report term.
    100
    2.   Guarantees among the related parties
    (1) Guarantees among the related companies within the consolidation range:
    The              The           Amount                                                 Completed
    Start date         Due date
    guarantor       beneficiary     guaranteed                                                or not
    24,000,000.00     Sept. 2 2010         Sept. 1 2011          No
    Fangda
    26,000,000.00     Sept. 2 2010         Sept. 1 2011          No
    Decoration,
    Fangda              The         50,000,000.00     Sept. 2 2010         Sept. 1 2011          No
    Automatic,        Company       50,000,000.00     Sept. 3 2010         Sept. 2 2011          No
    Fangda New
    20,000,000.00     Sept 10, 2010        Sept. 9 2011          No
    Material
    30,000,000.00    Sept. 17 2010         Sept.16 2011          No
    The             Fangda
    20,000,000.00     Feb. 1 2011           Feb.1 2012           No
    Company         Automatic
    The             Fangda
    20,000,000.00     Sept 1 2010           Aug 1 2011           No
    Company         Decoration
    The             Fangda
    30,000,000.00     Feb. 22 2011         Feb. 22 2012          No
    Company         Decoration
    The             Fangda
    10,000,000.00     Mar. 4 2011           July 3 2011          No
    Company         Decoration
    The             Fangda
    30,000,000.00     Mar 1, 2011          Mar 1, 2012           No
    Company         Decoration
    16,000,000.00     Dec 20 2010          Dec 19 2011           No
    The             Fangda New      15,000,000.00         Jul 7 2011        Jul 7 2012           No
    Company           Material      15,000,000.00      Jul 12 2011          Jul 12 2012          No
    27,000,000.00     Sept 29 2010         Sept 28 2011          No
    Note: The above are associated guarantees involved in bank loans.
    (2) As of the date of this report, Fangda Decoration has provided guarantees for the
    contract engaged between the Company and its individual shareholders. The guarantee
    involves with amount of RMB783.646 million.
    VII. Contingent issues
    (1) Major unsettled lawsuits
    1.   Major unsettled lawsuit and influences on financial status
    Case
    Plaintiff      The defender                      The court         Target amount        Progress
    description
    Hainan Tianyi     project        Haikou
    Fangda                                                             RMB2,450,811.54
    International     payment        Longhua                               Under trial
    Guoke                                                              and interest
    Building Co.,     lawsuit        People’s
    101
    Ltd.                               Court
    The         1st
    Wang         Fangda           Project       Middle Court RMB17.07         mil
    Under trial
    Weihong      Decoration       dispute       of              and interests
    Chongqing
    Note 1: On December 17, 2009, Fangda Guoke appealed to Haikou Longhua People’s Court against
    Hainan Tianyi International Building Co., Ltd. for the overdue payment of LED system of Hainan Tianyi
    International Building. The claim was RMB2,450,811.54 of overdue payment and relative interests. The
    case was under trial as of June 30, 2011.
    Note 2: In 2010, Wang Weihong sue to Chongqing Middle Court against Fangda Decoration – one
    of the Company’s subsidiaries, claiming for RMB17.07 million project payment and interests. This case
    is in trial process. And the bank deposit of RMB12 million of Fangda Decoration was frozen by the
    court.
    2.   Major lawsuits settled but not executed completely
    (1) On January 13, 2002, Shenzhen Fangda Decoration Engineering Co., Ltd. (Fangda Decoration)
    appealed to Dalian Arbitration Committee against Dalian Hongjin World Trade Center for the
    outstanding payment of RMB22,112,004.30 and interests. On July 28, 2008, Dalian Arbitration
    Committee judged with [2002]大仲字第 228 号 that Dalian Hongjin World Trade Center Co., Ltd. shall
    pay RMB19,194,665.60 and interest to Fangda Decoration in 10 days. (In which interest of
    RMB17,414,863.00 will be charged since December 1, 2001; interest of RMB1,779,802.60 will be
    charged since December 1, 2002.) On June 1, 2011, Dalian Middle Court issued the judgment (2011)
    大执一恢 1 字第 47、87 号 and judged that flat 2,3A,3B,5,6,7,8 on the 10 floor, and 6,12 on the 32 floor,
    and 2,3A,7,12A,12B on the 46 floor of World Trade Center located at 25 Tongxing Street, Zhongshan
    District, Dalian were under possession of Fangda Decoration. This was to compensate the overdue
    project payment owed by Dalian Hongjin World Trade Center Ltd. along with the interests of
    RMB239.573 million.
    (2) On November 24, 2004, Shanxi Taiyuan Middle Court issued the Civil Judgment (2004)并民
    初字第 322 号 that Shanxi No.2 Construction Co., Ltd. and Shanxi Taiyuan Police Station should make
    the payment of RMB11,506,930.98 to Fangda Decoration in two disbursement. As of June 30, 2011,
    Fangda Decoration has retrieved RMB5,272,450.00, and the rest was not retrieved yet.
    (3) On January 2, 2003, Guangzhou Middle Court issued the Civil Settlement Letter (2002)穗中
    法民三初字第 00596 号 requiring Guangzhou Yi’an Plaza Property Development Co., Ltd. to pay
    RMB5,621,329.63 to Fangda Decoration in 15 days. As of June 30, 2011, Fangda Decoration has
    received RMB1,950,000.00, and the rest of payment has not been received yet.
    3.   Other contingent liabilities
    As of June 30, 2011, all of the external guarantees were among the Company and its subsidiaries.
    For details please see Note VI (II) 2.
    No material contingent issues to be disclosed other than the above as of June 30, 2011.
    102
    VIII. Significant commitments
    (1) Significant commitments
    1. Please see Note V. for pledges made by the Company against its own properties. The Company
    promises to the provider of bank credit: additional pledge will be offered to the creditor as soon as the
    property certificate of Fangda Industry Town is granted.
    2. Details of guarantees provided between the Company and its subsidiaries for bank credits are:
    (1) Details of guarantees provided to subsidiaries for bank credit up to June 30, 2011:
    Name of companies                          Amount                              Note
    Fangda New Material                                   126,600,000.00
    For details please go to Note VI
    Fangda Decoration                                     360,000,000.00
    (II) 2
    Fangda Automatic                                      310,000,000.00
    Fangda Decoration                                                        This was guarantee for
    guarantee letter credit and cross
    100,000,000.00     guarantees were provided by
    Fangda Automatic
    Fangda Decoration and Fangda
    Automatic
    Total                                 896,600,000.00
    (2) Details of guarantees provided to the Company for bank credit up to June 30, 2011:
    Name of companies                            Amount                     Note
    Fangda Decoration                                           50,000,000.00
    For details please go to
    Fangda Automatic                                            50,000,000.00
    Note VI (II) 2
    Fangda New Material                                         50,000,000.00
    Total                           150,000,000.00
    Note: For details of guarantee letters please go to Note VIII (I) 2 (1).
    (2) Fulfilling of commitments made in previous terms
    Commitments made by the Company in previous terms were exercised normally along with
    repaying of loans by the receiver of guarantees.
    No material commitment issues to be disclosed other than the above as of June 30, 2011.
    IX. Other Material Issues
    (1) Issuing of short-term bonds
    The 15th meeting of the 5th term of Board was hold on November 11, 2010, on which the
    “Proposal to issue short-term bonds” was adopted. The Company planned to issue not greater than
    RMB400 million of short-term bonds to China Inter-bank Market Association. The proceeds will be
    used to support working capital of the Company and its fully-owned subsidiaries and replacing of some
    bank loans.
    (2) Company restructuring
    103
    The Board of Shenyang Fangda – one of the subsidiaries of the Company, adopted
    resolution (沈方(董)[2010]第002号) on December 7, 2010: Shenyang Fangda will
    takeover Fangda Guoke and all of its assets, including inventories, equipment, and
    intangible assets (patents) will be transferred to Shenyang Fangda at their book value. Upon
    completion of the takeover, Fangda Guoke will be deregistered. This restructuring was in
    process as of the date of this report.
    Shenyang Fangda – subsidiary of the Company, has adopted the resolutions at the 7th meeting of the
    1st board of directors (沈方(董)[2011]第004号) on April 8, 2011. Shenyang Fangda will takeover
    Fangda Woke – the fully-owned subsidiary and Fangda Woke will be deregistered.                        This
    restructuring was in process as of the date of this report.
    (3) Leases
    Details of property leasing as of June 30, 2011.
    Balance of book value at end of          Balance of book value at
    Category of property for rent
    term                           beginning of term
    Investment properties
    274,539,465.81                       271,226,332.73
    Total
    274,539,465.81                       271,226,332.73
    (4) Assets accounted at fair value
    Impairment
    Gain/loss      Accumulative
    Fair value at                                    provisions
    from change      change in fair                   Fair value at
    Items            beginning of                                    provided in
    of fair value   value accounted                   end of term
    term                                         the current
    in the term      into equities
    term
    I. Financial assets
    1. Financial assets on
    fair     value      and       (Derivate
    changes      accounted
    financial assets
    into current gain/loss
    (Derivate     financial not included)
    assets excluded)
    2. Derivate financial
    assets
    3.          Disposable
    4,347,000.00   -35,000.00           -26,600.00            0.00    4,312,000.00
    financial assets
    II.         Investment
    271,226,332.73 5,082,327.66                  0.00           0.00 274,539,465.81
    property
    III.        Production
    biological assets
    IV. Others
    Total of assets     275,573,332.73 5,047,327.66           -26,600.00            0.00 278,851,465.81
    104
    X. Notes to the main items of the financial statements of the parent company
    (I) Account receivable
    (1) Account receivable on categories
    Balance of book value at end of term
    Categories                Book value                   Bad debt provision
    Net amount
    Amount         Proportion     Amount           Rate
    Receivables with major
    individual amount and bad
    debt provision provided
    individually
    Receivables provided bad
    7,964,960.33         100% 1,769,240.98              22.21% 6,195,719.35
    debt provision in groups
    Incl. Receivable accounts
    7,964,960.33         100% 1,769,240.98              22.21% 6,195,719.35
    not consolidated
    Sub-total of group             7,964,960.33         100% 1,769,240.98              22.21% 6,195,719.35
    Account receivable with
    minor individual amount but
    bad debt provision is
    provided
    Total              7,964,960.33         100% 1,769,240.98              22.21% 6,195,719.35
    Balance of book value at beginning of term
    Categories                Book value                   Bad debt provision
    Net amount
    Amount         Proportion     Amount           Rate
    Receivables with major
    individual amount and bad
    debt provision provided
    individually
    Receivables provided bad
    10,467,296.51      100.00% 2,549,569.61              24.36% 7,917,726.90
    debt provision in groups
    Incl. Receivable accounts
    10,467,296.51      100.00% 2,549,569.61              24.36% 7,917,726.90
    not consolidated
    Sub-total of group            10,467,296.51      100.00% 2,549,569.61              24.36% 7,917,726.90
    Account receivable with
    minor individual amount but
    bad debt provision is
    provided
    Total             10,467,296.51      100.00% 2,549,569.61              24.36% 7,917,726.90
    Account receivables on which bad debt provisions are provided on age basis in the group:
    Balance of book value at end of term
    Age                                                      Bad debt
    Amount             Proportion                             Net amount
    provision
    within 1 year                  2,297,211.55          28.84%            68,916.35           2,228,295.20
    1-2 yrs
    2-3 yrs                        5,667,748.78          71.16%        1,700,324.63            3,967,424.15
    Over 3 yrs
    105
    Total                 7,964,960.33         100.00%            1,769,240.98             6,195,719.35
    Balance of book value at beginning of term
    Age                                                           Bad debt
    Amount            Proportion                                    Net amount
    provision
    within 1 year                   2,187,479.05          20.90%                65,624.37            2,121,854.68
    1-2 yrs
    2-3 yrs                         8,279,817.46          79.10%            2,483,945.24             5,795,872.22
    Over 3 yrs
    Total                10,467,296.51         100.00%            2,549,569.61             7,917,726.90
    (2) There is no receivable account that have been fully provided of bad debt provision, or with great
    portion in previous year, but retrieved or written back in the report term, or such account retrieved or
    written back at large percentage or major amount.
    (3) No receivable account neutralized this period.
    (5) As of December 31, 2010, no receivables due from shareholders with 5% or above shares of the
    Company or related parties.
    (5) Top 5 of receivables at end of report term:
    Relation with the         Amount at                           % in total
    Name of the companies                                                            Age
    Company                end of term                        receivables
    within 1
    2,297,211.55
    Guangzhou Metro Company             Screen door client                                  year            100%
    5,667,748.78       2-3 yrs
    Total                                        7,964,960.33                               100%
    (II) Other account receivable
    (1) Other account receivable on categories
    Balance of book value at end of term
    Categories                 Book value                  Bad debt provision
    Ratio                        Providing              Net amount
    Amount                       Amount
    (%)                           rate (%)
    Other receivables
    with         major
    individual amount
    and     bad    debt
    provision provided
    individually
    Other receivables
    provided bad debt
    210,199,551.04    99.97%           564,672.41        0.27%             209,634,878.63
    provision        in
    groups
    Incl.    Receivable
    accounts        not      2,526,869.95       1.20%          564,672.41        22.35%             1,962,197.54
    consolidated
    106
    Receivable
    account within the
    207,672,681.09    98.77%                         0.00%          207,672,681.09
    consolidation
    range
    Sub-total of group    210,199,551.04    99.97%         564,672.41      0.27%          209,634,878.63
    Other       account
    receivable     with
    minor individual
    53,046.00        0.03%         53,046.00      100.00%
    amount but bad
    debt provision is
    provided
    Total          210,252,597.04100.00%      617,718.41      100.00%              209,634,878.63
    Balance of book value at beginning of term
    Categories             Book value                Bad debt provision
    Ratio                        Providing            Net amount
    Amount                   Amount
    (%)                           rate (%)
    Other receivables
    with          major
    individual amount
    and     bad    debt
    provision provided
    individually
    Other receivables
    provided bad debt
    201,041,444.07    99.97%    586,474.32              0.29%       200,454,969.75
    provision        in
    groups
    Incl.    Receivable
    accounts        not    3,253,600.46      1.61%         586,474.32         18.03%       2,667,126.14
    consolidated
    Receivable
    account within the
    197,787,843.61    98.36%                                        197,787,843.61
    consolidation
    range
    Sub-total of group    201,041,444.07    99.97%         586,474.32         0.29%       200,454,969.75
    Other       account
    receivable     with
    minor individual
    53,046.00        0.03%         53,046.00          100%
    amount but bad
    debt provision is
    provided
    Total          201,094,490.07     100%          639,520.32         0.32%       200,454,969.75
    Other account receivables on which bad debt provisions are provided on age basis in the group:
    Balance of book value at end of term
    Age                                                 Bad debt
    Amount         Ratio (%)                                Net amount
    provision
    within 1 year                  1,476,636.95      0.73%            44,299.11             1,432,337.84
    1-2 yrs                             11,858.00     0.01%               1,185.80             10,672.20
    2-3 yrs
    Over 3 yrs                     1,038,375.00       0.52%             519,187.50            519,187.50
    Total                2,526,869.95       1.26%             564,672.41          1,962,197.54
    Age                            Balance of book value at beginning of term
    107
    Bad debt
    Amount             Ratio (%)                               Net amount
    provision
    within 1 year                         2,203,367.46          1.10%           66,101.02            2,137,266.44
    1-2 yrs                                  11,858.00          0.01%              1,185.80             10,672.20
    2-3 yrs
    Over 3 yrs                            1,038,375.00          0.52%          519,187.50              519,187.50
    Total                      3,253,600.46          1.63%          586,474.32            2,667,126.14
    (2) There is no receivable account that have been fully provided of bad debt provision, or with great
    portion in previous year, but retrieved or written back in the report term, or such account retrieved or
    written back at large percentage or major amount.
    (3) No offsetting of other receivable account.
    (4) As of December 31, 2010, no other receivables due from shareholders with 5% or above shares
    of the Company.
    (5) Top 5 debtors of other receivable accounts:
    Portion in total
    Name of the                                Relation with     Amount at end                        other
    Specification                                              Age
    companies                                  the Company         of term                         receivable
    accounts (%)
    Fangda                      Current           Controlled                           within 1
    159,322,832.25                           75.78%
    Decoration                  account          subsidiaries                           year
    Fangda        New           Current           Controlled                           within 1
    8,704,080.92                            4.14%
    Material                    account          subsidiaries                           year
    within 1
    Current           Controlled              5,052.69                         14.45%
    HK Junjia                                                                           year
    account          subsidiaries      30,375,199.12       1-2 yrs
    within 1
    4,336.01
    year
    Current           Controlled        2,488,413.62       1-2 yrs
    Fangda Guoke                                                                                            3.85%
    account          subsidiaries                          2-3 yrs
    2,625,780.30
    2,984,947.27      3 年以上
    Shenzhen
    Changshou                Compensation            Trading
    984,375.00   Over 3 yrs             0.47%
    Pharmacy Co.,             for building          company
    Ltd.
    Total                                                   198,529,036.31                           98.69%
    (6) Receivable account due from related parties
    Name of the              Relation with the                                     Percentage in total of other
    Amount at end of term
    companies                   Company                                                   receivables
    Controlled
    Fangda Decoration                                             159,322,832.25
    subsidiaries                                                             75.78%
    Fangda             New         Controlled
    8,704,080.92
    Material                      subsidiaries                                                              4.14%
    HK Junjia                      Controlled                      30,380,251.81                           14.45%
    108
    subsidiaries
    Controlled
    Fangda Guoke                                                    8,103,477.20
    grand-subsidiary                                                         3.85%
    Controlled
    Shenyang Fangda                                                  243,182.30
    subsidiaries                                                          0.12%
    Controlled
    Fangda Woke                                                        25,489.84
    grand-subsidiary                                                         0.01%
    Controlled
    Fangda Automatic                                                 893,366.77
    subsidiaries                                                          0.42%
    Total                                                207,672,681.09                     98.77%
    (III)     Long-term share equity investment
    Long-term equity investment:
    Balance of
    Changed this     Balance of
    Company            Calculating    Investment         book value at
    term (- for    book value at
    invested in            basis          cost            beginning of
    decrease)      end of term
    term
    Fangda
    Cost basis                       305,000,000.00                     305,000,000.00
    Decoration                           305,000,000.00
    Fangda
    Cost basis
    Aluminium                             19,800,000.00
    Fangda Yide Co.        Cost basis     19,907,760.00
    HK Junjia              Cost basis           10,600.00
    Fangda
    Cost basis                       170,385,071.73                     170,385,071.73
    Automatic                            170,385,071.73
    Fangda           New
    Cost basis                         74,496,600.00                     74,496,600.00
    Material                              74,496,600.00
    Shenyang Fangda        Cost basis    109,560,000.00 108,852,073.85                         108,852,073.85
    Total                          699,160,031.73 658,733,745.58                         658,733,745.58
    Impairment
    Share                                                             Cash dividend
    Company                           Voting rights       Impairment         provision
    proportion                                                          of the current
    invested in                            (%)              provision       provided this
    (%)                                                                   term
    term
    Fangda
    98.39             98.39
    Decoration
    Fangda
    99                99      19,800,000.00
    Aluminium
    Fangda Yide Co.                 75                75      19,907,760.00
    HK Junjia                      100               100           10,600.00
    Fangda
    90.48             90.48
    Automatic
    Fangda           New            75                75
    109
    Material
    Shenyang Fangda                 64.58            64.58
    Total                                               39,718,360.00
    (IV)       Operational turnover and costs
    (1) Details of business turnover and costs:
    Amount occurred in
    Items                             Occurred current term
    same period last year
    Turnover                                                            20,049,926.08                    18,558,245.60
    Incl. Main business turnover                                        1,022,878.46                     184,615.38
    Other business income                                  19,027,047.62                    18,373,630.22
    Operation cost                                                        5,151,318.51                    4,777,841.15
    Incl. Main business cost                                             671,466.39                      131,726.94
    Other business cost                                      4,479,852.12                    4,646,114.21
    (2) Turnover on categories of products
    Amount           occurred    in
    Occurred current term
    same period last year
    Categories of products
    Operation                                         Operation
    Turnover                                    Turnover
    cost                                         cost
    Metro screen            door
    products                         1,022,878.46            671,466.39            184,615.38              131,726.94
    Rental                          19,027,047.62       4,479,852.12           18,373,630.22              4,646,114.21
    Total               20,049,926.08       5,151,318.51           18,558,245.60              4,777,841.15
    (3) Turnover from top 5 clients
    Ranks of clients                     Occurred current term              Portion in total turnover
    No.1                                                           3,306,400.02                               16.49%
    No.2                                                           1,221,126.68                                 6.09%
    No.3                                                           1,022,878.46                                 5.1%
    No.4                                                            563,556.54                                  2.81%
    No.5                                                            431,670.00                                  2.15%
    Total                                          6,545,631.70                               32.64%
    (V) Appendix of Cash Flow Statement
    Amount of        Amount of the
    Supplementary Info.                                  the Current      same period of
    Term             last year
    1.Net profit adjusted to cash flow of operation:
    Net profit                                                                      5,475,020.08          5,936,531.75
    Plus: Asset impairment provision                                                 -802,130.54           -240,157.03
    110
    Amount of      Amount of the
    Supplementary Info.                            the Current    same period of
    Term           last year
    Depreciation of fixed assets                                            1,077,799.18       734,292.69
    Amortizing of intangible assets                                          325,575.97       447,681.75
    Amortizing of long-term expenses
    Loss from disposal of fixed assets, intangible assets, and other
    long-term assets (“-“ for gains)                                         2,356.10
    Loss from fixed asset discard (“-“ for gains)
    Loss from fluctuation of fair value (“-“ for gains)                  -4,547,127.66    -6,498,256.32
    Financial expenses (“-“ for gains)                                    1,965,559.92     2,648,600.20
    Investment loss (“-“ for gains)
    Decrease of deferred income tax asset (“-“ for increase)               132,386.17       -434,125.32
    Increase deferred income tax asset (“-“ for decrease)                 1,507,171.12     3,985,213.31
    Decrease of inventory (“-“ for increase)
    Decrease of operational receivable items (“-“ for increase)            721,324.62      2,659,100.34
    Increase of operational payable items (“-“ for decrease)              -628,535.90     -7,614,421.60
    其他 Others
    Cash flow generated by business operation, net                          5,229,399.06     1,624,459.77
    2. Major investment and financing activities not involving in cash
    flow
    Liabilities converted to capital
    Convertible bond expire in 1 year
    Fixed assets leased through financing
    3. Change of cash and cash equivalents
    Balance of cash at period end                                         34,000,832.49    349,325,681.01
    Less: Initial balance of cash                                         30,252,759.44     42,274,488.50
    Plus: Balance of cash equivalents at the period end
    Less: Initial balance of cash equivalents
    Net increasing of cash and cash equivalents                             3,748,073.05   307,051,192.51
    XI. Supplementary Info.
    (1) Details of non-recurring gain/loss of current term
    According to document 公告[2008]43 号 issued by China Securities Regulatory Commission, the
    non-recurring gain/loss are as the followings:
    Occurred
    Items                                                    Note
    current term
    Gain/loss from disposal of non-working capital, including the
    -247,367.69
    neutralized part of the impairment provision provided already
    Refunding and exemption of taxes in excess of authority or
    without official approval documents
    Government subsidies accounted into current income account
    (except for those government subsidies closely related to the
    63,800.0
    Company’s business, and received at national statutory standard
    and amount)
    111
    Occurred
    Items                                                           Note
    current term
    Receiving of interest
    Capital adoption fee collected from non-financial organizations                       of project payment
    4,863,766.62
    and accounted into current gain/loss                                                  due from Dalian
    Yunshan project
    Gain/loss from differences between the cost of enterprise
    merger and the fair value of recognizable net asset of the
    invested entities
    Gain/loss from non-monetary assets
    Gain/loss from commissioned investment or assets
    Asset impairment provisions provided for force-majeur
    Gain/loss from debt reorganization
    Enterprise reorganizing expenses, such as employee placement
    fee and integration fee
    Gain/loss from trade departing from fair value
    Current net gain/loss of subsidiaries under same control from
    beginning of term till date of consolidation
    Gain/loss generated by contingent liabilities without connection
    with main businesses
    Gain/loss from change of fair value of transactional asset and
    liabilities, and investment gains from disposal of transactional
    financial assets and liabilities and sellable financial assets, other
    than valid period value instruments related to the Company’s
    common businesses
    Restoring of receivable account impairment provision tested
    individually
    Gain/loss from commissioned loans
    Gain/loss from change of fair value of investment property
    5,082,327.66
    measured at fair value in follow-up measurement
    Influence of one-time adjustment made on current gain/loss
    account according to the laws and regulations regarding tax and
    accounting
    Consigning fee received for cosigned operation
    Other non-business income and expenditures other than the
    191,727.76
    above
    Other gain/loss items satisfying the definition of non-recurring
    gain/loss account
    Total of non-recurring gain/loss                        9,954,254.35
    Less: Influenced amount of income tax                                   -2,244,387.08
    Net non-recurring gain/loss (influence on net profit)              7,709,867.27
    Less: Influenced amount of minor shareholders’ equity                        -662.62
    Non-recurring gain/loss attributable to net profit of common
    7,709,204.65
    shareholders of the parent company
    Net profit attributable to common share holders of the
    38,385,493.61
    Company after deducting of non-recurring gain/loss
    (2) Net income on asset and earnings per share
    112
    According to “Information Disclosure Rules No.9 – Calculation and disclosure of net earnings on
    asset and earnings per share ( 中 国 证 券 监 督 管 理 委 员 会 公 告 [2010]2 号 ) and “Explanation
    Announcement of Information Disclosure No. 1 – Non-recurring gain/loss (中国证券监督管理委员会
    公告[2008]43 号), the earnings per share is calculated as the following:
    Current term
    Earnings per share
    Profit of the report period          Net income on asset,                          Diluted
    weighted         Basic earnings
    earnings per
    per share
    share
    Net profit attributable to common
    4.46%              0.061             0.061
    shareholders of the Company
    Net profit attributable to the common
    owners of the PLC after deducting of                        3.72%              0.051             0.051
    non-recurring gains/losses
    Same period of last term
    Earnings per share
    Profit of the report period          Net income on asset,                                Diluted
    Basic earnings
    weighted                                 earnings per
    per share
    share
    Net profit attributable to common
    5.28%             0.049              0.049
    shareholders of the Company
    Net profit attributable to the common
    owners of the PLC after deducting of                        2.07%              0.019             0.019
    non-recurring gains/losses
    XII. Approval of the financial statements
    This financial statement is approved by the Board on July 29, 2011.
    Legal representative:     Accounting Manager: Manager of Accounting Dept.
    China Fangda Group Co., Ltd.
    July 29 2011
    113