新闻源 财富源

2020年01月19日 星期天

方大B(200055)公告正文

方 大B:2012年年度报告(英文版)

公告日期:2013-03-23

                     China Fangda Group Co., Ltd. 2012 Annual ReportChina Fangda Group Co., Ltd.
    2012 Annual Report
         Feb. 2013
                                                         China Fangda Group Co., Ltd. 2012 Annual Report
                    I. Important Statement, Table of Contents and Definitions
    The Board of Directors and the directors of the Company guarantee that there are nosignificant omissions, fictitious or misleading statements carried in the Report and we willaccept individual and joint responsibilities for the truthfulness, accuracy and completeness ofthe Report.
    Mr. Xiong Jianming, the Chairman of Board, Mr. Lin Kebin, the Chief Financial Officer,and Mr. Chen Yonggang, the manager of accounting department declare: the FinancialReport carried in this report is authentic and completed.
    Directors other than the following ones have attended the Board meeting to review theannual report.
                             Position of absent
    Name of absent director                                  Reason                 Name of proxy
                                  director
    Shao Hanqing              Independent director    Business engagement      Guo Jinlong
    Wang Shengguo             Director                Business engagement      Xiong Jianwei
    The Board meeting reviewed and approved the profit distribution preplan: distributingcash dividend of RMB0.3 for each ten shares to all shareholders on the basis of all shares ofthe Company on December 31, 2012 and no dividend share is issued to shareholders.
    Forward-looking statements involved in this report including future plans do not makeany material promise to investors. Investors should pay attention to investment risks.
                                                                                                                   China Fangda Group Co., Ltd. 2012 Annual Report
                                                                                Table of ContentsI. Important Statement, Table of Contents and Definitions ......................................................................................................................2II. Company Profile .................................................................................................................................................................................7III. Financial Highlight ..........................................................................................................................................................................10IV Board of Directors’ Report ...............................................................................................................................................................14V Significant Events ..............................................................................................................................................................................34VI Changes in Share Capital and Shareholders .....................................................................................................................................41VII Particulars about the Directors, Supervisors, Senior Management and Employees ........................................................................47VIII Corporation Governance ................................................................................................................................................................55IX Internal Control ................................................................................................................................................................................65X Financial Statements ..........................................................................................................................................................................68XI Documents for Reference ...............................................................................................................................................................208
                                                   China Fangda Group Co., Ltd. 2012 Annual Report
                                     Definitions
                             Defin
               Terms                                      Description
                             ed as
    Fangda Group, company, the   Defin
                                   China Fangda Group Co., Ltd.
    Company                      ed as
                             Defin Articles of Association of China Fangda Group Co.,Articles of Association
                             ed as Ltd.
                             Defin Meetings of shareholders of China Fangda Group Co.,Meeting of shareholders
                             ed as Ltd.
                             Defin
    Board of Directors                 Board of Directors of China Fangda Group Co., Ltd.
                             ed as
                             Defin Supervisory Committee of China Fangda Group Co.,Supervisory Committee
                             ed as Ltd.
                             Defin
    Banglin Co.                        Shenzhen Banglin Technologies Development Co., Ltd.
                             ed as
                             Defin
    Shilihe Co.                        Shenzhen Shilihe Investment Co., Ltd.
                             ed as
                             Defin
    Shengjiu Co.                       Shengjiu Investment Ltd.
                             ed as
                             Defin
    Fangda Decoration                  Shenzhen Fangda Decoration Engineering Co., Ltd.
                             ed as
                             Defin
    Fangda Automatic                   Shenzhen Fangda Automatic System Co., Ltd.
                             ed as
                             Defin
    Fangda New Material                Fangda New Materials (Jiangxi) Co., Ltd.
                             ed as
                             Defin
    Shenyang Fangda                    Shenyang Fangda Semi-conductor Lighting Co., Ltd.
                             ed as
                             Defin Shenzhen Fangda Guoke Optical & Electronics Co.,Fangda Guoke
                             ed as Ltd.
                             Defin
    Shenzhen Woke                      Shenzhen Woke Semi-conductor Lighting Co., Ltd.
                             ed as
                             Defin
    Hong Kong Junjia                   Hong Kong Junjia Group Co., Ltd.
                             ed as
                             Defin
    Fangda Aluminium                   Jiangxi Fangda New Type Aluminum Co., Ltd.
                             ed as
                                                    China Fangda Group Co., Ltd. 2012 Annual Report
                                Defin
    Fangda Yide Co.                       Shenzhen Fangda Yide New Material Co., Ltd.
                                ed as
                                Defin
    Dongguan New Material                 Dongguan Fangda New Material Co., Ltd.
                                ed as
                                Defin
    Kexunda Co.                           Shenzhen Kexunda Software Co., Ltd.
                                ed as
                                Defin
    Fangda Property                       Shenzhen Fangda Property Development Co., Ltd.
                                ed as
                                Defin
    Chengdu Fangda                        Chengdu Fangda New Material Co., Ltd.
                                ed as
                                Defin
    Shenyang Decoration                   Fangda Decoration Engineering (Shenyang) Co., Ltd.
                                ed as
                                Defin
    CSRC                                  China Securities Regulatory Commission
                                ed as
                                Defin
    SZSE                                  Shenzhen Stock Exchange
                                ed as
                                Defin
    Sponsor, Zhongshan Securities         Zhongshan Securities Co., Ltd.
                                ed as
                                                     China Fangda Group Co., Ltd. 2012 Annual Report
                                  Major Risk Statement
    The Company has specified market, management and production and operation risks inthis report. Please review the potential risks and measures mentioned in the discussion andanalysis of future development in IV. Board of Directors’ Report.
                                                             China Fangda Group Co., Ltd. 2012 Annual Report
                                            II. Company Profile1. Company profiles
    Stock ID                   Fangda Group, Fangda B         Stock code              000055, 200055Modified stock ID (if
                      Noneany)
    Stock Exchange             Shenzhen Stock Exchange
    Chinese name               China Fangda Group Co., Ltd.
    Chinese abbreviation       Fangda GroupEnglish name (if any) CHINA FANGDA GROUP CO., LTD.English abbreviation
                           CFGC(if any)
    Legal representative       Xiong Jianming
                           Fangda Building, Kejinan 12th Avenue, High-tech Zone, Shenzhen, PRRegistered address
                           China.
    Zip code                   518057
                           Technology Building, Fangda Town, Xili Longjing, Nanshan District,Office address
                           Shenzhen, PRC
    Zip code                   518055
    Website                     http://www.fangda.com
    Email                      fd@fangda.com2. Contacts and liaisons
                                          Secretary of the Board       Representative of Stock Affairs
    Name                                Zhou Zhigang                       Guo Linchen
                                    Fangda Town, Xili Longjing,        Fangda Town, Xili Longjing,
    Address                             Nanshan District, Shenzhen,        Nanshan District, Shenzhen,
                                    PRC                                PRC
    Tel.                                86(755)26788571 ext. 6622          86(755)26788571 ext. 6622
    Fax                                 86(755)26788353                    86(755)26788353
    Email                               zqb@fangda.com                     zqb@fangda.com
                                                           China Fangda Group Co., Ltd. 2012 Annual Report3. Information disclosure and inquiringInformation disclosure and
                                        China Securities Journal, Security Times, Shanghaiinquiring Press medias of
                                        Securities Daily, Hong Kong Commercial Dailyinformation disclosureWebsite assigned by CSRC to release
                                    http://www.cninfo.com.cnthe online reports
    Place for information inquiry           Secretarial Office of the Board4. Registration changes
                  Registration      Registration       Business   Tax registration Organization
                     date              place       license number     number          code
                                  Shenzhen
                                  Bureau of
    First           December 31,                     440301501124 440301192448
                                  Industry &                               19244858-9
    registration    1995                             785          589
                                  Commerce
                                  Administration
                                  MarketRegistration at
                                  Supervision
    the end of the September 5,                      440301501124 440301192448
                                  Administration                           19244858-9
    reporting       2012                             785          589
                                  of Shenzhenperiod
                                  MunicipalityChanges in main businesses
                                 Nonesince the listing of the Company
                                  In 1996, the Company listed it’s A and B shares and the
                                  controlling shareholder is Shenzhen Fangda Group Co., Ltd. On
                                  August 25, 2000, the controlling shareholder changed its name
    Changes in the controlling        into Shenzhen Fangda Economic Development Co., Ltd. On July
    shareholders (if any)             5, 2002, the controlling shareholder changed into Shenzhen
                                  Banglin Technologies Development Co., Ltd. By the end of this
                                  reporting period, the controlling shareholder remains the
                                  Shenzhen Banglin Technologies Development Co., Ltd..5. Other informationPublic accountants employed by the Company
    Public accountants           Grant Thornton (special general partner)
                             4th Floor, Scitech Place, 22 Jianguomen Wai Avenue, ChaoyangAddress
                             District, Beijing, ChinaSigning accountant names Liu Wei, Chen Zhaoxin
                                                       China Fangda Group Co., Ltd. 2012 Annual ReportSponsor engaged by the Company to perform continued supervision and guide during the reportingperiod√ Applicable □ Inapplicable
                                                                           Period of supervision
    Sponsor name           Office address         Representatives
                                                                                and guide
                                                                         The period started on
                                                                         July 15, 2010 and
                                                                         ended on November 7,
                                                                         2012. The sponsor has
                                                                         submitted the sponsor
                        29th Floor, New World                            report to CSRC. Given
    Zhongshan Securities    Center, 6009 Yitian                              that the fund raised
                                               He Lihui, Cui Lei
    Co., Ltd.               Road, Futian District,                           from non-public issue
                        Shenzhen                                         of the Company in 2010
                                                                         has not been fully used,
                                                                         the sponsor will
                                                                         continue to perform
                                                                         supervision and guide
                                                                         for the use of the fund.Financial advisor engaged by the Company to perform continued supervision and guide during thereporting period□ Applicable √ Inapplicable
                                                           China Fangda Group Co., Ltd. 2012 Annual Report
                                       III. Financial Highlight1. Financial HighlightThe Company retroactively adjusts or restates financial statistics of the previous years because ofchanges in account policies and correction of accounting errors.□ Yes √ No
                                                                  Increase/decreas
                                  2012              2011                                    2010
                                                                       e (%)
    Turnover (RMB)               1,397,901,424.59 1,348,776,366.53               3.64% 1,161,933,356.48Net profit attributable to
    shareholders of the listed     24,948,377.20     65,503,925.58             -61.91%      55,063,374.25company (RMB)Net profit attributable tothe shareholders of thelisted company and after
                                 7,361,274.38    51,005,479.89             -85.57%      25,603,881.05deducting ofnon-recurring gain/loss(RMB)Net cash flow generated
    by business operation          59,262,071.37    -57,045,495.85                         -31,187,262.97(RMB)Basic earnings per share
                                         0.03              0.09            -66.67%                 0.08(yuan/share)Diluted earnings per share
                                         0.03              0.09            -66.67%                 0.08(yuan/share)Net income on asset ratio
                                         2.3%            6.28%              -3.98%               6.76%(%)
                                                                  Increase/decreas
                               End of 2012       End of 2011                            End of 2010
                                                                       e (%)
    Total asset (RMB)            2,327,802,889.51 2,163,325,598.14                7.6% 1,991,161,158.84Net assets attributable tothe listed company’sshareholders (owners’
                             1,098,612,195.57 1,073,843,444.65               2.31% 1,009,990,739.07interests attributable toshareholders of listedcompany) (RMB)
                                                             China Fangda Group Co., Ltd. 2012 Annual Report2. Differences in accounting data under domestic and foreign accounting standards1. Differences in net profits and assets in financial statements disclosed according to theinternational and Chinese account standards
                                                                                                  In RMB
                             Net profit attributable to the          Net profit attributable to the
                          shareholders of the listed company      shareholders of the listed company
                           Current term          Previous term     Closing amount Opening amountOn Chinese
                            24,948,377.20          65,503,925.58 1,098,612,195.57 1,073,843,444.65accounting standardsItems and amounts adjusted according to International Accounting StandardsOn international
                            24,948,377.20          65,503,925.58 1,103,375,593.81 1,078,606,842.89accounting standards2. Differences in net profits and assets in financial statements disclosed according to the overseasand Chinese account standards
                                                                                                  In RMB
                             Net profit attributable to the          Net profit attributable to the
                          shareholders of the listed company      shareholders of the listed company
                           Current term          Previous term     Closing amount Opening amountOn Chinese
                            24,948,377.20          65,503,925.58 1,098,612,195.57 1,073,843,444.65accounting standardsItems and amounts adjusted according to overseas accounting standards
    On IAS                      24,948,377.20          65,503,925.58 1,103,375,593.81 1,078,606,842.893. Explanation of the differences in accounting data under domestic and foreign accountingstandardsNet assets attributable to the listed company’s shareholders calculated according to the IAS isRMB4763398.24 higher than that calculated according to the domestic accounting standards,mainly attributable to the capitalization of borrow expenses before the domestic EnterpriseAccounting Standard was implemented on January 1, 2007.3. Accidental gain/loss item and amount
                                                                                                  In RMB
               Item                       2012            2011             2010              NotesNon-current asset disposal
                                       260,038.90       -690,807.78     7,068,397.05gain/loss (including the write-off
                                                          China Fangda Group Co., Ltd. 2012 Annual Reportpart for which assets impairmentprovision is made)Subsidies accounted into thecurrent income account (exceptthe government subsidy closely
                                      6,275,756.00   1,988,650.00    5,537,950.00related to the enterprise’sbusiness and based on unifiednational standard quota)Capital using expense charged tonon-financial enterprises and
                                      1,180,032.08accounted into the currentincome accountGain/loss from debt
                                                         3,959.20     -434,040.66reorganizationEnterprise reorganizationexpenses, such as employee
                                                                    -1,273,987.08settlement and integrationexpensesGain/loss from change of fairvalue of transactional financialasset and liabilities, andinvestment gains from disposalof transactional financial assets
                                      3,448,207.99     99,342.47     3,176,516.97and liabilities and sellablefinancial assets, other than validperiod value instruments relatedto the Company’s commonbusinessesGain/loss from change of fairvalue of investment property
                                     12,290,834.22 10,815,131.20 13,921,217.90measured at fair value infollow-up measurementOther non-business income and
                                       917,890.35    6,080,071.96    5,845,075.37expenditures other than the aboveOther gain/loss items satisfying
    the definition of non-recurring                       878,478.35gain/loss account
    Influenced amount of income tax       5,353,185.48   4,616,278.41    4,287,837.54Influenced amount of minority
                                      1,432,471.24     60,101.30        93,798.81shareholders’ equity (after-tax)
    Total                                17,587,102.82 14,498,445.69 29,459,493.20               --
                                                         China Fangda Group Co., Ltd. 2012 Annual ReportExplanation statement should be made for accidental gain/loss items defined and accidentalgain/loss items defined as regular gain/loss items according to the Explanation Announcement ofInformation Disclosure No. 1 - Non-recurring gain/loss mentioned.□ Applicable √ Inapplicable
                                                          China Fangda Group Co., Ltd. 2012 Annual Report
                                  IV Board of Directors’ Report1. Summary
      In 2012, the global economy remains complex and the economy recovery is increasinglysluggish. Facing greater economic uncertainties, the Company has continued to innovate itstechnology and improve its management based on its competitiveness to achieve continued, stableand solid growth. During the reporting period, the Company recorded an operating revenue ofRMB1,397,901,400, hitting the previous high; the new order volume totaled RMB1.934 billion, up15% year-on-year; by the end of this reporting period, the order reserve reached RMB1.427billion.The operating cash flow amounted to RMB59,262,100. The order reserve and cash flow has pavedthe way for the Company’s operation in 2013.
       1. Continuing to make headway in curtain wall system and material market exploration
      In 2012, the Company aggressively promoted the curtain wall system and material business toincrease investment in hardware facilities and marketing. The Company accelerated theconstruction of national industry base and adhered to the market strategy of focusing onenergy-saving and environmental-friendly high-end products based on its solid brand equity. Inaddition to consolidating its market share in the south China market, the Company continued toexpand its shares in the northeast, north, east and southwest China markets and has maderemarkable headway. In 2012, the Company won bids in totally 28 high-end curtain wall projectsincluding the Shenzhen Excellence Meilin Central Plaza North, Jiangsu Xinhua Daily News Center,Shanghai Jiading Cultural Activity Center, Chengdu Jinniu Wanda Plaza, Wuhan Central CulturalZone K5 Hanjie Wanda Plaza, Shenyang 12th National Games Operation Center and Hainan GreenTown Qingshuiwan Westin Hotel and Resort. The increase in orders shows a continued and stronggrowth momentum.
      While exploring the market, the Company actively organized its designing, purchase,production end engineering to delivery products to customers as soon as possible. In the reportingperiod, the sales revenue from the curtain wall system and material business reachedRMB1,260,903,500, up 42% year-on-year.
      Underpinned by years’ experience and continued investment in hardware facilities, theCompany has build a solid foundation and brand equity in the curtain wall system and materialindustry with strong expertise and operating and management capabilities. Fangda curtain wallsystem has emerged as the most competitive brand in the industry. Driven by the policy of“accelerating urbanization and improving the quality of urbanization” made on the economicdevelopment meeting of the central government in the late 2012, the Company has taken measuresto fuel the development of its curtain wall system and material business, to create higher operatingrevenue and profit for the company.
      2. Strengthening internal management of metro equipment production and expanding overseamarkets
      In the report period, the company product metro platform screen door has won the bidding forSingapore Dashi Line Extension, Dongguan Urban Rail R2 Line and Xi’an Qujiang Light Rail
                                                          China Fangda Group Co., Ltd. 2012 Annual ReportProject for its advantages of “advanced performance, stable quality, reliable operation, perfectoutlook and high safety”. The Singapore Dashi Line Extension is one of the major and busiest railline in Singapore and is the company’s another breakthrough after the Hong Kong and Taiwanmetro platform screen door projects to pave the way for oversea market expansion.
    The company joined this industry from 1999 and is one of the first enterprises of this industry.Now the company has come to take the first place in the metro platform screen door product marketfor its market share, brand influence, intellectual property, industrial standard and engineeringservice. Through years’ development, the Company has obtained the core technology in developingmetro screen doors and owned 223 related patents, including 58 invention patents, accounting forover half of aggregate obtained by domestic peers. In addition, the Company owned four softwarecopyrights. In 2013, the Company will take advantage of the opportunity created by the 19-city and25-rail construction plan issued by the State Development and Reform Commission to secure moreorders.
    In the reporting period, the Wuhan metro 2nd line screen door project department was given theOutstanding Unit title.
    3. Fangda Town renewal project performed according to the plan
    In the reporting period, the Company’s Fangda Town project lying in Shenzhen Nanshan XiliLongjing has been fitted into 2012 Shenzhen Urban Renewal Plan The First Projects by ShenzhenPlanning and Land Resources Committee and has been ratified by Shenzhen City Government.Currently the Company is formatting the Fangda Town renewal plan and will put it intoconstruction as soon as it is ratified to elevate the value of the Company. The Fangda Townrenovation plan was approved and implemented, boosting the Company's brand equity. Toaccelerate the project and realize the long-term development of the Company, the 16th meeting ofthe 6th Board of Directors has approved the renewal construction plan of Fangda Town, which willbe constructed by Fangda Property, a fully-owned subsidiary of the Company, with a registeredcapital of RMB10 million.
    4. Industrial base construction taking shape
    In the reporting period, the Company has basically completed the development plan andconstruction of production bases in Beijing, Shanghai, Chengdu, Nanchang and DongguanSongshanhu, completing the national business landscape with Shenzhen as the headquarters,Songshanhu as the base in south China region, Beijing as the base in the north, Chengdu in thesouthwest and Shanghai and Nanchang in the east. The business landscape will pave the way for theCompany to increase its markets share and elevate overall competitiveness, helping the Companyboost production and growth.
    5. Internal control construction improved continuously
    The company has established internal control system by efforts for two years that the work ofrules performance has been basically finished and the internal control work has been pushed intothe consolidation stage. In order to strengthen the foundation made by the previous efforts, in thereport period the Company has optimized the internal control organizational structure, rules andregulations, operation system and information system to improve the company operationmanagement and raise the risk protection capability.
    6. Vigorously pushing forward personnel recruitment, training and reserves
    Along with the industrial scale expansion and new manufacturing bases putting in use, thecompany needs a large number of personnel for management, technology and manufacturing.
                                                         China Fangda Group Co., Ltd. 2012 Annual ReportTherefore, the Company improved its talent introduction, selection, motivation and trainingmechanisms. In 2012, the Company has created nearly 10,000 jobs and recruited more graduatesthan in the previous years and 23% of them are graduates of the universities within the national 211project thus to make the company a sufficient talent reserves.
    7. Technical innovation
    In the reporting period, the Company has paid 71.99 million yuan to push forward the researchand development for new product, new draft, new technology, new structure focusing on cleanerproduction, safety production, energy efficient to make the company product more low carbonenvironment-friendly and provide the company guarantee for sustainable development.
    8. Others
    In the reporting period, the Company won the title of “Guangdong Top 500” and “ShenzhenTop 100” and was selected in the “2012 Top 100 Listed Companies in China” and “CharitableCompanies”.
    In the reporting period, Fangda Decoration, a fully-owned subsidiary of the Company, won six“National Construction Engineering Decoration” prizes and five 2011 Shenzhen Decoration Jinpengprizes and a series of titles and prizes including the China Top-50 Building Curtain Wall Providers,Guangdong Outstanding QC Team, 2009-2012 Sci & Tech Innovation Company and GuangdongConstruction Engineering Jinjiang Prize.
    In reporting period, the fully-owned subsidiary Fangda New Material obtained a practical newtype patent, adding the patents to 26, including 10 patents, ranking top among domestic competitors.In the reporting period, Fangda Aluminium Plate was given the title of 2002-2012 Most InfluentialChinese Aluminium Composite Plate Brand and 2010-2012 Product Quality Certificate. FangdaNew Material was accredited as National Nanchang High-Tech Zone 20th Anniversary OutstandingEnterprise and AAA Standard Good Practice Enterprise.2. Main business analysis1. SummaryThe actual operating performance is over 20% lower or higher than the annual forecast resultdisclosed earlier.□ Applicable √ Inapplicable
                                                           China Fangda Group Co., Ltd. 2012 Annual Report2. RevenueNotes
    In the report period, the new orders of curtain wall systems and materials amounted toRMB1.94 billion. New orders of metro screen doors amounted to RMB68 million and the operatingrevenue grew 3.64% year-on-year.The physical sales revenue is high the labor service revenue√ Yes □ No
    Industry                Item              2012                 2011            YOY change (% )
    Curtain wall        Sales                       2,035,505              1,721,342                18.25%
    system and          Output                      2,069,565              1,755,255                17.91%
    materials           Inventory                         54,076               41,510               30.27%
                    Sales                              1,400                1,650              -15.15%
    Metro screen door Output                               1,407                1,800              -21.83%
                    Inventory                            76                    83               -8.43%Explanation for a year-on-year change of over 30%□ Applicable √ InapplicableMajor orders on hand√ Applicable □ Inapplicable
      In the report period, new orders for curtain wall systems and materials amounted to RMB1.94billion. By December 31, 2012, the order reserve reached RMB1.89 billion, compared withRMB1.35 year-on-year.
      In the report period, new orders for metro screen doors amounted to RMB68 million. By theend of the period, the order reserve amounted to RMB200 million, compared with RMB140 millionyear-on-year. All previous orders will be completed before 2005.Major changes or adjustment of products or services in the report period□ Applicable √ InapplicableMain customersTotal sales amount to top 5 customers
                                                                                       391,033,460.52(RMB)Proportion of sales to top 5 customers in
                                                                                                27.96%the annual salesInformation of the Company's top 5 customers□ Applicable √ Inapplicable3. CostsIndustry
                                                                                                In RMB
                                                           China Fangda Group Co., Ltd. 2012 Annual Report
                                       2012                           2011
    Industry        Item                     Proportion in                  Proportion in YOY change
                              Amount         operating       Amount         operating     (% )
                                             costs (%)                      costs (%)
    Metal        Raw            736,768,455.                   692,187,816.
                                                69.57%                          70.79%             6.4%
    production   materials                22                             46
    Metal                       62,039,282.2                   48,952,424.6
             Labor                               5.86%                           5.01%           26.7%
    production                             4                              2
             Installation
    Metal                       218,488,650.                   201,206,036.
             and onsite                         20.63%                          20.58%             8.6%
    production                            25                             20
             expenses
    Metal                       41,674,557.0                   35,459,016.6
             Others                              3.94%                           3.63%           17.5%
    production                             5                              5
    Metal                       1,058,970,94                   977,805,293.
             Total                                100%                            100%             8.3%
    production                          4.76                             93
    Railroad     Raw            43,219,619.1                   54,449,697.6
                                                71.47%                          74.22%          -20.6%
    industry     materials                 6                              7Railroad
             Labor          5,355,339.41         8.86% 5,694,319.18              7.76%              -6%industry
             InstallationRailroad
             and onsite     7,386,677.35        12.21% 9,758,641.48              13.3%          -24.3%industry
             expensesRailroad
             Others         4,512,824.33         7.46% 3,458,576.68              4.71%           30.5%industry
    Railroad                    60,474,460.2                   73,361,235.0
             Total                                100%                            100%          -17.6%
    industry                               5                              1Product
                                                                                                In RMB
                                       2012                           2011
    Product         Item                     Proportion in                  Proportion in YOY change
                              Amount         operating       Amount         operating     (% )
                                             costs (%)                      costs (%)Curtain wall
             Raw            736,768,455.                   692,187,816.
    system and                                      69.57%                          70.79%             6.4%
             materials                22                             46materialsCurtain wall
                            62,039,282.2                   48,952,424.6
    system and Labor                                 5.86%                           5.01%           26.7%
                                       4                              2materials
    Curtain wall Installation   218,488,650.        20.63% 201,206,036.             20.58%             8.6%
                                                          China Fangda Group Co., Ltd. 2012 Annual Report
    system and    and onsite                 25                          20
    materials     expensesCurtain wall
                             41,674,557.0                 35,459,016.6
    system and Others                                 3.94%                         3.63%           17.5%
                                        5                            5materialsCurtain wall
                             1,058,970,94                 977,805,293.
    system and Total                                  100%                           100%             8.3%
                                     4.76                           93materials
    Metro screen Raw             43,219,619.1                 54,449,697.6
                                                 71.47%                        74.22%          -20.6%
    door         materials                  6                            7Metro screen
             Labor           5,355,339.41         8.86% 5,694,319.18            7.76%              -6%door
             InstallationMetro screen
             and onsite      7,386,677.35        12.21% 9,758,641.48            13.3%          -24.3%door
             expensesMetro screen
             Others          4,512,824.33         7.46% 3,458,576.68            4.71%           30.5%door
    Metro screen                 60,474,460.2                 73,361,235.0
             Total                                100%                           100%          -17.6%
    door                                    5                            1Main suppliers
    Purchase amount of top 5 suppliers (RMB)                                              175,094,166.67Proportion of purchase amount of top 5
    suppliers in the total annual purchase                                                         15.04%amount (%)Information of the Company’s top 5 suppliers□ Applicable √ Inapplicable4. ExpensesTo be provided5. R&D expenses
    The curtain wall system and material R&D projects of the Company mainly include the R&Dof the high-efficiency energy-saving curtain wall, new material R&D and process improvementproject, development of metro screen door controlling system, development of communicationprotocols. The projects aim to standardize products, reduce energy consumption, optimize theproduction process and elevate production efficiency, elevate the Company’s energy efficiency,reduce production and installation costs and develop environmental-friendly and competitiveproducts.
    The total R&D expense in the report period accounts for 6.55% of the latest audited net assets
                                                          China Fangda Group Co., Ltd. 2012 Annual Reportand 5.15% of the latest audited operating revenue.5. Cash flow
                                                                                               In RMB
          Item                     2012                     2011                YOY change (% )Subtotal of operating
                                1,307,973,426.84         1,252,726,153.03                       4.41%activity cash inflowsSubtotal of operating
                                1,248,711,355.47         1,309,771,648.88                      -4.66%activity cash outflowsCash flow generated by
                                   59,262,071.37           -57,045,495.85business operation, netSubtotal of investment
                                   19,972,926.99            87,017,437.58                     -77.05%activity cash inflowsSubtotal of investment
                                  107,622,445.60           165,395,766.81                     -34.93%activity cash outflowsCash flow generated by
    investment activities,            -87,649,518.61           -78,378,329.23                      11.83%netSubtotal of fund raising
                                  770,368,873.33           397,000,000.00                      94.05%activity cash inflowsSubtotal of fund raising
                                  801,936,873.47           430,340,014.63                      86.35%activity cash outflowsCash flow generated by
    fund raising activities,          -31,568,000.14           -33,340,014.63                      -5.31%netNet increasing of cash
                                  -60,009,635.92          -168,701,706.37                     -64.43%and cash equivalentsExplanation for a year-on-year change of over 30%√ Applicable □ InapplicableIn this report period, the net cash flow generated by operating activities increased from RMB-57.4million to RMB59.26 million. This is mainly attributable to the Company’s increased efforts incollective receivables and note payment percentage.The cash inflow of investment activities reduced 77.05% year-on-year, mainly attributable toamount received from matured short-term financial products purchased with ideal capital anddeposit received for infrastructure construction projects;The cash outflow of investment activities reduced 34.93% year-on-year, mainly attributable to thepurchase of short-term financial products with idle capital;The cash inflow of fund raising activities increased 94.05% year-on-year, mainly attributable to thecash received of short-term borrowings and issue of short-term financing bonds;The cash outflow of fund raising activities increased 86.35% year-on-year, mainly attributable to
                                                             China Fangda Group Co., Ltd. 2012 Annual Reportrepayment of short-term borrowings;Explanation of major difference between the cash flow generated by operating activities and the netprofit in the year.√ Applicable □ InapplicableThe cash flow generated by operating activities during the report period is RMB52.82 millionhigher than the net profit of the year, main attributable to the assets impairment, which does notinvolves cash outflow;3. Business composition
                                                                                                  In RMB
                                                           Year-on-year Year-on-year Year-on-year
                                Operation     Gross profit change in     change in     change in
                 Turnover
                                  cost         rate (%)      operating   operating    gross profit
                                                           revenue (%) costs (%)        rate (%)Industry
    Metal          1,260,903,46 1,058,970,94
                                                   16.01%           6.42%            8.3%         -1.46%
    production             6.71         4.76
    Railroad       83,977,888.2 60,474,460.2
                                                   27.99%        -14.51%         -17.57%           2.67%
    industry                  6            5Light
               1,358,528.81 4,238,572.08productionProductCurtain wall
             1,260,903,46 1,058,970,94
    system and                                         16.01%           6.42%            8.3%         -1.46%
                     6.71         4.76materialsMetro screen 83,977,888.2 60,474,460.2
                                                   27.99%        -14.51%         -17.57%           2.67%
    door                    6            5LED
               1,358,528.81 4,238,572.08productsDistrict
               1,218,323,61 1,033,772,60
    Domestic                                           15.15%            0.1%            2.5%         -1.99%
                       2.70         4.56
               127,916,271. 89,911,372.5
    Overseas                                           29.71%         62.05%          60.92%             0.5%
                         08            3Main business statistics adjusted in the recent one year with the statistics criteria adjusted in thereport period□ Applicable √ Inapplicable
                                                              China Fangda Group Co., Ltd. 2012 Annual ReportIV. Assets and Liabilities1. Major changes in assets
                                                                                                   In RMB
                    End of 2012               End of 2011
                             Proportio                  Proportio Change               Notes
                Amount       n in total    Amount       n in total (% )
                              assets                     assets
                                                                       Cash payment for
                                                                       energy-saving curtain wall
    Monetary       278,283,96                 324,780,35                   and electronic optical curtain
                               11.95%                    15.01% -3.06%
    capital              8.61                       0.77                   wall production expansion
                                                                       project and metro screen
                                                                       door production expansion
    Account        774,890,80                 664,333,49
                               33.29%                    30.71% 2.58%
    receivable           5.30                       8.11
               269,120,19                 254,419,90
    Inventory                      11.55%                     11.76% -0.21%
                     1.36                       7.08
    Investment     258,405,76                 277,705,94
                                  11.1%                  12.84% -1.74%
    real estate          2.09                       9.35
               341,555,81                 316,775,39
    Fixed assets                   14.67%                    14.64% 0.03%
                     0.21                       8.58
                                                                       Continuous investment for
    Construction 175,138,69                   81,799,896                   energy-saving and electronic
                                  7.52%                    3.78% 3.74%
    in process         4.28                           .43                  optical curtain wall
                                                                       production expansion2. Major changes in liabilities
                                                                                                   In RMB
                        2012                      2011
                             Proportio                  Proportio Change               Notes
                Amount       n in total    Amount       n in total (% )
                              assets                     assets
                                                                       Issue short-term financing
    Short-term     181,970,00               387,000,00              -10.07
                                  7.82%                  17.89%        bonds of RMB200 million,
    loans                0.00                     0.00                  %
                                                                       reducing short-term loans
                                                           China Fangda Group Co., Ltd. 2012 Annual Report3. Assets and liabilities measured at fair value
                                                                                                In RMB
                                         Accumulati
                                         ve changes
                            Gain/loss       in fair              Amount
                                                    Impairment             Amount
               Opening     caused by        value               purchased                    Closing
    Item                                                provided in           sold in the
               amount      changes in    accounting               in the                     amount
                                                     the period             period
                            fair value     into the               period
                                           income
                                          accountFinancialassets3. Sellable
            2,198,000.0 1,533,000.0financial
                      0           0assets
             2,198,000.0 1,533,000.0Subtotal
                       0           0
    Investment 277,705,94 12,290,834. 1,200,647.2                                               254,766,25
    real estate      9.35          22           6                                                     6.33
              279,903,94 13,823,834. 1,200,647.2                                            254,766,25Total
                    9.35          22           6                                                  6.33Major changes in the assets measurement property of the Company in the report period□ Yes √ No5 Core Competitiveness Analysis(1) Curtain wall system and material
    1. Expertise and brand competitiveness
    In response to the national call for energy saving and emission reduction, the Company hasaggressively develop solar electric and optimal and energy-saving curtain walls, developing a seriesof domestic and global leading solar and energy-saving curtain wall products. The Company owns336 curtain wall and material patents (including 34 invention patents) and one software copyright,ranking top among domestic peers. It has achieved many firsts in the industry and createdincomparable brand equity, making it an optimal choice in the domestic high-end curtain wall andmaterial market.
    2. Focusing on the high-end market to edge out competitors
    Amid the fierce market competition, the Company has focused on the high-end energy-savingcurtain wall market and technical integration to improve high-end project quality. Moreover, it hasfocused resources on high-end curtain wall engineering and won several Luban awards, ZhanTianyou Civil Engineering awards and Classic Construction for the 50th Anniversary of theFoundation of the People’s Republic of China, High-Quality Construction, White Magnolia Prize
                                                          China Fangda Group Co., Ltd. 2012 Annual Reportand Customer Satisfactory Engineering and the title of “Top 10 Competitive Chinese Curtain WallProvider”. The Company has build a leading brand and created a clear edge in the high-end curtainwall market.
    3. Well-developed industry base landscape
    Thanks to continued investment in facilities, the Company has established a national businesslandscape with Shenzhen as the headquarters, Dongguan Songshanhu as the base in the south,Beijing in the north, Chengdu in the southwest and Shanghai and Nanchang in the east. TheDongguan Songshanhu and Nanchang bases are the largest and most advanced curtain wall systemand material production bases in China and across the world, fueling the Company to increase itsmarket share and competitiveness.(2) Rail transport equipment business
    1. Technical advantage
    Through continued independent innovation, the Company has developed the global leadingmetro screen door system with full intellectual property right and broken the monopoly of overseascompetitors. The Company has also compiled the Rail Transport Station Screen Door Standard,which is the first of its kind in China. The standard was approved in April 2006 and wasimplemented on March 1, 2007. As the first standard in the industry in China, the standard hasplayed a key role in guiding the development of China’s rail transport screen door industry andenabled the Company a dominant lead in the industry. Currently, the Company has 223 metroscreen door patents, including 58 invention patents, accounting for half of the aggregate of domesticcompetitors. The Company also has four computer software copyrights.
    2. Brand equity
    So far, the Company has undertaken rail screen door projects in cities including Beijing,Shanghai, Tianjin, Shenyang, Nanjing, Guangzhou, Shenzhen, Dongguan, Wuhan, Xi’an, Dalian,Hong Kong, Taipei and Singapore. The Fangda screen door system has grasped a leading marketshare and established incomparable brand influence thanks to its patents, standard and maintenanceservices. The Company has emerged as the Chinese No.1 and global No.3 screen door provider,building a large competitive edge in the global market.VI. Investment1. External equity investment(1) The Company has no external investment in the report period.(2) The Company does not hold shares in financial enterprises in the report period.(3) Securities investment
                            Numbe Openin          Numbe Closin
                    Initial                                      Closin
                              r of     g           r of      g          Gain/lo Accou
    Securit      Abbrev invest                                       g book
        Code                 shares shareh        shares shareh           ss    nting Source
    ies        iation ment                                          value
                            held at olding        held at olding        (RMB) item
                     cost                                        (RMB)
                            beginni (%)           end of (%)
                                                                China Fangda Group Co., Ltd. 2012 Annual Report
                                      ng of            the
                                       the           period
                                     period          (share)
                                     (share)
    Total                         0.00         0    --          0      --        0.00     0.00     --       --Notes to shareholding in other listed companiesThe Company holds no share in other listed companies.2. Trust wealth management, investment in derivatives and entrustment loan(1) The Company has no trust wealth management in the report period.(2) The Company has no investment in derivatives in the report period.(3) The Company has no entrustment loan in the report period.3. Use of raised capital(1) Overview
                                                                                              In RMB10,000
    Total amount of the raised capital                                                                  33,658.69Total raised capital invested in the report
                                                                                                    11,155.84period
    Total accumulative raised capital invested                                                          27,055.36Amount of raised capital of which the
                                                                                                       6,000purpose was changed in the report periodAccumulative amount of raised capital of
                                                                                                       6,000which the purpose has been changedProportion of raised capital of which the
                                                                                                      17.83%purpose has been changed (%)
                                      Notes to use of raised capitalBy the end of the report period, the Company has strictly comply with the Instruction on StandardOperation of PLCs on the Main Board of Shenzhen Stock Exchange and provisions for use andmanagement of raised capital of the Company to deposit and use the raised capital.(2) Promised raised-capital-based projects
                                                                                              In RMB10,000
    Project promised  If   Promis Adjust Invest Accum Invest Date Profit Wheth Anyto be invested invest ed total ed total ment ulative ment when realize er the major
                                                         China Fangda Group Co., Ltd. 2012 Annual Report
    with the raised ment invest invest in the invest progres the d in the estimat change
    capital and    project ment ment report ment s by project period e profit in the
    investment of the    is   of the  (1) period by the the end becom          is feasibil
    excessive raised change raised              end of of the    e         realize ity
      capital        d    capital             the period( useable          d
                  (includ                    period %)(3)     as
                    ing                       (2)      = propos
                  partial                            (2)/(1) ed
                  change
                      )Promised investment projects1. Energy-saving
                                                               March
    and PV curtain                           8,198.4 21,465.
                  Yes      21,000 27,000                 79.5% 31,                            No
    wall production                                8      83
                                                               2013expansion project
    2. PSD                                                             Decem
                           12,658. 6,658.6 2,957.3 5,589.5   83.94
    production        Yes                                              ber 31,                    No
                                69       9       6       3      %
    expansion project                                                  2012Subtotal of
    promised                   33,658. 33,658. 11,155. 27,055.
                     --                                      --       --           0    --       --
    investment                      69      69      84      36projectsInvestment of excessive raised capitalSubtotal ofinvestment of
                     --          0       0      0       0    --       --           0    --       --excessive raisedcapital
                           33,658. 33,658. 11,155. 27,055.
    Total                --                                      --       --           0    --       --
                                69      69      84      36Reason orsituation that not The construction progress of the Dongguan Technology Zone was delayed andon schedule (on is not ready for move-in.specific project)Notes to major
    changes in          Noneproject feasibilityAmount, purposeand use of
                 Inapplicableexcessive raisedcapital
    Changes in         Applicable
                                                         China Fangda Group Co., Ltd. 2012 Annual Report
    implementation     Occurred in previous yearsplace of
                   To improve the Company's industry landscape, simplify the Company’sinvestment
                   management and reduce management costs, the 24th meeting of the 5th term offunded by raised
                   the Board of the Company approved the proposal of changing thecapital
                   implementation place of the energy-saving and photo-electric curtain wall
                   production expansion project and increasing the implementation entities and
                   changed the implementation place to Dongguan, Guangdong.
    Adjustment of      Applicable
    the                Occurred in the report periodimplementation
    way of             On March 9, 2012, the 1st provisional shareholders’ meeting of the Company
    investment         approved the adjustment proposal to put the RMB60 million for the metro
    funded by raised   screen door production expansion to the energy-saving and photo-electric
    capital            curtain wall production expansion project.
                   ApplicablePre-investment On September 30, 2010, it was decided to use the raised capital ofand replacement RMB4,347,753.09 to replace the investment made previously by Fangdaby raised capital Automatic RMB1,403,503.00 and Fangda Decoration RMB2,944,250.09. This
                  has been verified by CPA with report 天健正信审(2010)专字第 020722 号.
                   Applicable
                    On March 28, 2011, payment of RMB20 million was made from idle proceeds
                    to Fangda Decoration; and RMB10 million was made to Fangda Automatic. On
                    August 19, 2011, the returned idle capital RMB30 million was transferred to
                    raised capital account. On August 23, 2011, payment of RMB20 million wasIdle raised capital made from idle raised capital to Fangda Decoration; and RMB10 million wasused as working made to Fangda Automatic. On February 16, 2012, the returned idle capital
    capital             RMB30 million into the raised capital account. On 22.02.12, payment of
                    RMB20 million was made from idle proceeds to Fangda Decoration; and
                    RMB10 million was made to Fangda Automatic. On 15.08.12, the returned idle
                    capital RMB30 million was transferred to raised capital account. On August 17,
                    2012, payment of RMB20 million was made from idle proceeds to Fangda
                    Decoration; and RMB10 million was made to Fangda Automatic. Both were not
                    over six months.Surplus of
    investment and     InapplicablecauseUse plan of
    retained fund      Inapplicablefrom financing
    Problem or         None
                                                                 China Fangda Group Co., Ltd. 2012 Annual Reportsituation in usingof raised capitaland disclosing(3) Altering of projects financed by raised capital
                                                                                               In RMB10,000
                     Total                   Accumul     Investme                                Any
                  investme                      ative        nt      Date                       major
                     nt of        Actual       actual    progress when the           Whether change
         Correspo                                                            Profit
                    raised      investme     investme      by the project               the     in the
    Altered nding                                                              realized
                  capital in     nt in the   nt by the     end of become             estimate feasibilit
    project promised                                                            in the
                      the         report       end of       the     useable          profit is y after
          project                                                            period
                   altered        period         the     period(%     as             realized     the
                   project                     period    )(3)=(2)/ proposed                    alteratio
                      (1)                        (2)        (1)                                    n
    1.          1.
    Energy-s    Energy-s
    aving       aving
    and PV      and PV
    curtain     curtain                          21,465.8              March
                         27,000 8,198.48                   79.5%                                    No
    wall        wall                                    3              31, 2013
    producti    producti
    on          on
    expansio    expansio
    n project   n project
    2. PSD      2. PSD
    producti    producti                                    Decemb
    on          on        6,658.69 2,957.36 5,589.53 83.94% er 31,                                      No
    expansio    expansio                                    2012
    n project   n project
                        33,658.6 11,155.8 27,055.3
    Total          --                                           --         --              0     --          --
                               9        4        6
                            The screen door project in Nanchang aimed to use a plant in Dafang
                            Jiangxi new material industry zone as the production base. This can
                            reduce the investment of RMB60 million for new plant, office and
    Alteration reason,          facilities. According to the resolution of the 24th meeting of the 5thdecision-making process and term of the Board, the proposal of changing the implementationinformation disclosure (by place of the energy-saving and photo-electric curtain wall production
    project)                    expansion project and increasing the implementation entities was
                            approved to change the implementation place to Dongguan,
                            Guangdong. As a new factory and part of the office and facilities
                            must be built in Dongguan, the investment is forecast to increase to
                                                            China Fangda Group Co., Ltd. 2012 Annual Report
                                RMB75 million. Given the alteration of the two projects, the capital
                                RMB 60 million for the screen door project is transferred to the
                                curtain wall project, while the insufficient part made up by the
                                self-owned capital.Reason or situation that not
                             The construction progress of the Dongguan Technology Zone wason schedule (on specific
                             delayed and is not ready for move-in.project)Notes to major changes in
    project feasibility after the   Nonealteration4. Analysis of major subsidiaries and joint-stock companiesMajor subsidiaries and joint-stock companies
                                  Main                                    Operati
                                         Register Total
    Compan                          products                Net asset Turnover ng Net profit
             Type      Industry            ed     asset
    y                                or                    (RMB) (RMB) profit (RMB)
                                         capital (RMB)
                                services                                  (RMB)
    Fangda                    Curtain
         Type of Decorati         310,000, 1,169,24 360,350, 1,113,87 46,684, 40,895,57
    Decorati                  wall
         subsidiary on            000.00 5,430.70 748.56 9,757.68 907.77           8.89
    on                        system
    Fangda                      Metro
        Type of Railroad                  105,000, 290,962, 186,987, 88,294,4 4,434,8 3,405,863.
    Automat                     screen
        subsidiary industry               000.00     171.13 656.29      00.68 35.80           97
    ic                          door
    Fangda              Metal
         Type of             Aluminu 99,328,8 302,467, 106,920, 210,469, -5,870, -3,686,73
    New                 producti
         subsidiary          m sheet 00.00      038.31 165.20 238.74 635.86           1.27
    Material            onMajor subsidiaries and joint-stock companies
    Fangda Decoration, a leading high-end curtain wall system producer in China, is mainlyinvolved in design, production and engineering of various building curtain wall systems, windows,doors, interior design and furniture.
    Fangda Automatic is China’s largest and world’s third largest metro screen door R&D,production and engineering company.
    Fangda New Material is one of the largest producers of aluminum sheets and compositealuminum sheets.Acquisition and disposal of subsidiaries in the report period□ Applicable √ Inapplicable
                                                             China Fangda Group Co., Ltd. 2012 Annual Report5. The Company has no major project financed not by raised capital in the report period.7. Entities on which the Company has control powerThere is entity on which the Company has control power.8. Future Prospect(1) Future Prospect
      In 2013, the Company will seek to maintain the solid growth momentum. Facing newopportunities and challenges, the Company will continue to develop its curtain wall system andmaterial business to become a leader in the high-end market, making headway in ultra-high,ultra-large, key areas and exports. In addition, the Company will become a domestic leader in platedeep processing industry and consolidate its position in the domestic metro screen door market andaggressively expand globally. Around the aim of collecting receivables, reducing costs, improvingquality and controlling risks, the Company has continued to make progress in technology,production and business development and has reinforced the technical management, productiondesigning and intellectual property right protection. The Company will continue to upgrade its fiveproduction bases in Dongguan Songshanhu, Nanchang, Beijing, Shanghai and Chengdu, furtherimproving its business landscape and pushing forward the Fangda Town renovation program. It willstep up the efforts to recruit and train professionals in various fields and strengthen staff training toimprove staff’s capabilities, responsibility awareness, cohesion, dedication and loyalty to theCompany. In addition, the Company will continue to improve its HR system to meet demands ofcorporate development.(2) Risks facing the Company and measures
      1. Market risks and measures
      The deepening adjustment of the domestic real-estate industry will bring the risk of toughercompetition for the construction curtain wall industry. To cope with the risk, the Company will takea solid business strategy, reducing management costs and increasing the efforts to recoverreceivables on the one hand, and boosting technical innovation, improving product quality, reducingproduct costs and improving the economy profits on the other hand, thus improving the Company’scompetitiveness and risk resistance.
      2. Management risks and measures
      With the development and expansion of the national business landscape, the Company facessevere management risks and urgently needs a large number of management, technical and seniortechnical professionals. Therefore, the Company will further improve its recruitment, selection,incentive and training programs and the internal control system, play full play to IT tools andimprove work efficiency and management.
      3. Production and operation risks and measures
      The macro-economy and market demand have added to the fluctuation in prices of main rawmaterials such as aluminum and steel and labor, affecting the Company’s profitability and creatingadditional production and operation risks for the Company. Therefore, with aim of collectingreceivables, reducing costs, improving quality and controlling risks, the Company will strengthen
                                                           China Fangda Group Co., Ltd. 2012 Annual Reportthe risk forecast and final accounting management and increase the risk awareness in productionand operation, reduce purchase and production costs, raising efficiency and management, thusmaintaining the rapid and stable development of the Company.(3) Future capital demand for development
    In 2013, the Company’s business development needs another working capital of RMB400million. The Company plans to meet the demand through bank loans and issue of financing bonds;the energy-saving and photo-electric curtain wall production expansion project and metro screendoor production expansion project need RMB66 million, all of which will be financed by the raisedcapital.9. Statement of the Board on the “non-standard auditors’ report” issued by the CPA on the currentreport periodThe Company’s auditor Grant Thornton (limited liability partnership) issued the standard opinionauditor’s report for the Company’s 2012 financial statement.10. Statement of changes to accounting policies, estimates and audit methods compared with thefinancial report of the previous yearChanges to accounting policies, estimates and audit methods compared with the financial report ofthe previous year11. Statement of retrospective restatement of major accounting errors in the report periodThere is no major accounting errors that need to be corrected in the report period.12. Statement of change in the financial statement consolidation scope compared with the previousfinancial reportThree companies are newly added as the Company established the Shenzhen Fangda PropertyDevelopment Co., Ltd. through investment during the report period and Fangda New Material Co.,Ltd. and Fangda Decoration (Shenyang) Co., Ltd through investment by Fangda Decoration.13. Profit distribution and dividend payment of the CompanyEstablishment, implementation or adjustment of profit distribution policies especially the cashdividend policy during the report period
    According to the Notice about Implementing of Cash Dividend Plan issued by CSRC, withregarding of the Company’s practice, the Company has revised some of the articles of the Articlesof Association involve with profit distribution. The Shareholders’ Rewarding Plan 2012-2014 wasproduced (the Rewarding Plan). The revising proposal and the Rewarding Plan was examined andadopted at the 12th meeting of the 6th term of Board as well as the 3rd provisional shareholders’meeting 2012. The decision making procedures comply with the regulations.
                                                              China Fangda Group Co., Ltd. 2012 Annual Report
        The Company conducts profit distribution strictly according to the Articles of Association.The current cash dividend policies are complying with the Articles of Association and resolutions ofthe shareholders’ meeting. The dividend standards and rates are clear and specific, a maturedecision making program has been established, the independent directors are performing theirduties effectively, mid-small shareholders have been given sufficient opportunities to express theiropinions, and their legal benefits are protected.
    The Articles of Association (Revised) and The Shareholders’ Rewarding Plan 2012-2014 werepublished on www.cninfo.com.cn on July 5, 2012.The profit distribution preplan and capitalization preplan during the report period comply withrequirements of the Articles of Association.Profit distribution and reserve capitalizing pre-plans or plans over the recent three years (includingthe reporting period)2010: No profit distribution, capital reserve is capitalized base on the total of 504,606,604 capitalshares, 5 bonus shares were issued to each 10 shares of the entire shareholders.2011: No profit distribution and reserve capitalizing.2012: A cash dividend of RMB0.30 (including tax) for each ten shares is issued to all shareholderson the basis of 706,909,905 shares with a total amount of RMB 22,707,297.15, on December 31,2012. No dividend share or capitalization share is issued in the year.Cash dividends for the recent three years
                                                                                                In RMB
                                                                                  Proportion in the net
                                                       Net profit attributable
                                                                                 project attributable to
                              Cash dividend            to shareholders in the
          Year                                                                     shareholders in the
                              (including tax)          consolidated financial
                                                                                 consolidated financial
                                                             statements
                                                                                       statements
    2012                               22,707,297.15                24,948,377.20                      91.02%
    2011                                            0.00            65,503,925.58                           0%
    2010                                            0.00            55,063,374.25                           0%No cash dividend is proposed despite the Company records profits in the report period and apositive undistributed profit.□ Applicable √ Inapplicable14. Social responsibilities
    In the reporting period , the Company has positively assumed social responsibilities by: payingtaxes RMB88.92 million, up 18.97% year-on-year; achieving export revenue USD20.89 million, up66.79%; donating RMB120,000 and investing RMB718,500 to create nearly 10,000 jobs; inputtingRMB1.91 million in employee knowledge and skill training. The company has investedRMB70,560,000 to promote development of new draft, technology, product structure and patentaccording to clean, safety and efficient production to make contribution for environmentalprotection.
                                                             China Fangda Group Co., Ltd. 2012 Annual Report15. Reception of investigations, communications, or interviews in the reporting period
                                                                                      Main content
    Time/date         Place           Way            Visitor            Visitor         involved and
                                                                                    materials provided
                                                                 China
    December 26,             Onsite                                                    Business and future
             The Company                      Institution        Investment
    2012                     investigation                                             development
                                                                 Securities
    Between Jan.                   Telephone
              Off site                                           Public            Business and future
    1, 2012 and                    communicatio Individual
              reception                                          investor          development
    Dec. 31, 2012                  n
                                                             China Fangda Group Co., Ltd. 2012 Annual Report
                                            V Significant Events1. Significant lawsuit and arbitrationThe Company faces no significant lawsuit, arbitration or media questioning event.2. Non-operating capital use by the controlling shareholder or related parties in the reporting termNo capital adoption or repaying by the controlling shareholder or related parties occurred in thereport term, Grant Thornton has provided special statement on this issue. Seehttp://www.cninfo.com.cn on March 23, 2013 for the disclosure reference.3. Bankruptcy and capital reorganizingNone4. Assets tradeThe Company has no assets acquisition, sales or merger during the reporting period.5. Implementation and influences of share equity incentive programThe Company has not implemented a share equity incentive program during the reporting period.6. The Company has no significant related transaction in the report period7. Significant contracts and performance1. Asset entrusting, leasing, contracting(1) No asset entrusting in the report period(2) No contracting in the report period(3) LeasingThe Company leases investment real estates and obtained a lease income of RMB36.18 million inthe report period.Projects that create gains accounting for over 10% of the Company’s total profit in the report period√ Applicable □ Inapplicable
    Contrac        Leased Amount Starting              Stop    Lease Pricing Influenc Related Relatio
        Leasee
    t-out         assets involve date                 date   income basis e on the transacti nship
                                                          China Fangda Group Co., Ltd. 2012 Annual Report
    party                      d by the                    (in               Compa        on
                             leased                   RMB10                 ny
                             assets                    ,000)
                               (in
                            RMB10
                              ,000)
       Shenzhe                                                       39.50%
       n                                                             of the
    The    Yachan Part of                                                total
                                    July 1, June 30,        Monthl
    Compan g Color Fangda         8,162                  772.09          profit in No
                                    2005    2013            y rental
    y      Printing Town                                                 the
       Co.,                                                          report
       Ltd.                                                          period2. Guarantee
                                                                                        In RMB10,000
         External guarantees made by the Company (exclude those made for subsidiaries)
                                 Actual date
                                     of
                 Date of Guarant occurring    Actual                                  Compl Relate
    Guarantee                                            Type of
                disclosur   ee    (signing amount of                        Term      eted or d party
    provided to                                          guarantee
                    e     amount   date of   guarantee                                  not or not
                                 agreements
                                      )
                                                 Total of externalTotal of external
                                                 guarantee actually
    guarantee approved in the                      0                                                      0
                                                 occurred in the reportreport term (A1)
                                                 term (A2)
                                                 Total of externalTotal of external
                                                 guarantee actually
    guarantee approved as of                       0                                                      0
                                                 occurred as of end ofend of report term (A3)
                                                 report term (A4)
                                Guarantee provided to subsidiaries
                                  Actual date
                                      of
                 Date of Guarante occurring    Actual                                 Compl Relate
    Guarantee                                              Type of
                disclosur   e      (signing amount of                       Term      eted or d party
    provided to                                           guarantee
                    e     amount    date of   guarantee                                 not   or not
                                  agreements
                                       )
    Fangda          February     50,000 June 29,      28,776.74 Joint         since      No
                                                   China Fangda Group Co., Ltd. 2012 Annual Report
    Decoration   21, 2012             2012                   liability   engage of
                                                                     contract
                                                                     to 2 years
                                                                     upon due
                                                                     of debt
                                                                     since
                                                                     engage of
    Fangda       February             May 24,                Joint       contract
                         12,000               1,035.92                          No
    Decoration   21, 2012             2012                   liability   to 2 years
                                                                     upon due
                                                                     of debt
                                                                     since
                                                                     engage of
    Fangda       April 20,            April 16,              Joint       contract
                         14,285                                                 No
    Decoration   2012                 2012                   liability   to 2 years
                                                                     upon due
                                                                     of debt
                                                                     since
                                                                     engage of
    Fangda       February             July 27,               Joint       contract
                         25,000               4,803.16                          No
    Automatic    21, 2012             2012                   liability   to 2 years
                                                                     upon due
                                                                     of debt
                                                                     since
                                                                     engage of
    Fangda       August               September              Joint       contract
                         550.62                550.62                           No
    Automatic    19, 2010             29, 2010               liability   to 2 years
                                                                     upon due
                                                                     of debt
                                                                     since
                                                                     engage of
    Fangda       April 20,            April 16,              Joint       contract
                          7,142                                                 No
    Automatic    2012                 2012                   liability   to 2 years
                                                                     upon due
                                                                     of debt
    Fangda New   February             June 6,                Joint
                          5,800                894.23
    Material     21, 2012             2012                   liability
                                                                     since
                                                                     engage of
    Fangda New   February             July 17,               Joint
                          5,000                796.09                contract No
    Material     21, 2012             2012                   liability
                                                                     to 2 years
                                                                     upon due
                                                           China Fangda Group Co., Ltd. 2012 Annual Report
                                                                           of debt
                                                  Total of guarantee toTotal of guarantee to
                                                  subsidiaries actually
    subsidiaries approved in               119,777.62                                                51,693
                                                  occurred in the reportthe report term (B1)
                                                  term (B2)
                                                  Total of balance of
    Total of guarantee to                             guarantee actually
    subsidiaries approved as               119,777.62 provided to the                            36,856.76
    of the report term (B3)                           subsidiaries as of end
                                                  of report term (B4)Total of guarantee provided by the Company (total of the above two)
    Total of guarantee                                Total of guarantee
    approved in the report                 119,777.62 occurred in the report                         51,693
    term (A1+B1)                                      term (A2+B2)
                                                  Total of guaranteeTotal of guarantee
                                                  occurred as of the end
    approved as of end of                  119,777.62                                            36,856.76
                                                  of report termreport term (A3+B3)
                                                  (A4+B4)Percentage of the total guarantee occurred
                                                                                                33.55%(A4+B4) on net asset of the CompanyIncluding:Guarantees provided to the shareholders,
    substantial controllers and the related parties                                                        0(C)Guarantee provided directly or indirectly to
    objects with over 70% of liability on asset ratio                                                      0(D)Amount of guarantee over 50% of the net asset
                                                                                                       0(E)
    Total of the above 3 (C+D+E)                                                                           0Statement on the possible joint liabilities on the
                                                   Noneguarantees not due yetStatement of external guarantees violating the
                                                    Noneprocedure
                                                           China Fangda Group Co., Ltd. 2012 Annual Report(1) The Company has no external guarantee that violates the procedure in the report period.3. No other significant contract8. Fulfilling of commitments1. Commitments of shareholders with over 5% of shares made in the report term or carried overfrom previous terms2. The Company made no prediction or commitment on the profitability of future.9. Engaging and dismissing of CPACPA engaged currently
    Domestic public accountants name         Grant Thornton (special general partner)Remuneration for the domestic public
                                                                                                    130accountants (in RMB10,000)Consecutive years of service by the
                                         1domestic public accountantsName of certified accountants of the
                                         Liu Wei, Chen Zhaoxindomestic public accountantsOverseas public accountants name (if
                                         Noneany)Remuneration for the overseas public
                                                                                                       0accountants (in RMB10,000)Consecutive years of service by the
                                         Noneoverseas public accountants (if any)Name of certified accountants of the
                                         Noneoverseas public accountants (if any)Whether the CPA is replaced√ Yes □ NoWhether the CPA is replaced in the auditing period□ Yes √ NoWhether the approval process is completed to replace the CPA√ Yes □ NoDetails of the CPA replacement and change
    Ascenda Certified Public Accountants – the former auditing body of the Company has mergedwith Jingdu Tianhua CPA (limited liability partnership). Jingdu Tianhua CPA was remained as thelegal entity after the merger and renamed to “Grand Thornton China (limited liability partnership)”.For purpose of keeping the coherence and stability of external auditing work, the AuditingCommittee proposed to hire Grand Thornton China (limited liability partnership) as the CPA of the
                                                          China Fangda Group Co., Ltd. 2012 Annual ReportCompany for year 2012. The auditing fee will be RMB1.3 million, and with term of one year. Thiswas to the consent of the Board of Directors in advance.Engaging of internal control audit CPA, financial advisor and sponsor√ Applicable □ InapplicableThis year, the Company engaged Grand Thornton China (limited liability partnership) as thefinancial statement and internal control auditing CPA with a fee of RMB1.3 million.9. Statement of the Supervisory Committee and Independent Directors (if applicable) on the“non-standard auditors’ report” issued by the CPA on the current report periodInapplicable11. Punishment and rectificationNone12. Trade suspension and termination after the disclose of the annual reportInapplicable13. Other material events
    (1) On January 7, 2012, the Company published an announcement on the approval of theapplication for issuing of short term bonds on China Securities Journal, Shanghai Securities Daily,Securities Times and HKCD;
    (2) On April 11, 2012, the Company published an announcement on the progress of theapplication for urban renovation plan on China Securities Journal, Shanghai Securities Daily,Securities Times and HKCD;
    (3) On June 19, 2012, the Company published an announcement on the 10th meeting of the 6thterm of the Board, on which the proposal of suspending the operation of Shenyang Fangda, acontrolling subsidiary, was approved on China Securities Journal, Shanghai Securities Daily,Securities Times and HKCD;
    (4) On July 5, 2012, the Company published an announcement on the 10 th meeting of the 6thterm of the Board, on which The Shareholders’ Rewarding Plan 2012-2014 was approved on ChinaSecurities Journal, Shanghai Securities Daily, Securities Times and HKCD;
    (5) On November 19, 2012, the Company published an announcement on the completion ofissuance of the first phase of the short-term bonds on China Securities Journal, Shanghai SecuritiesDaily, Securities Times and HKCD.14. Material events of subsidiaries
    On June 18, 2012, the 10th meeting of the 6th term of the Board approved the proposal of
                                                         China Fangda Group Co., Ltd. 2012 Annual Reportsuspending the operation of controlling subsidiary Shenyang Fangda. The announcement of theproposal was published on China Securities Journal, Shanghai Securities Daily, Securities Times,HKCD and www.cninfo.com.cn.15. Bond issuanceNone
                                                           China Fangda Group Co., Ltd. 2012 Annual Report
                            VI Changes in Share Capital and Shareholders一、 Changes in sharesNo change in the Company’s shares in the report period2. Share placing and listing1. Share issuing in latest three yearsName of the
                           Price of issue                                 Approved    Date when
    shares and                                   Amount        Date of
              Date of issue (or interest                                 amount to be trading is
    derivate                                    issued       listing
                               rate)                                        listed    terminated
    securitiesSharesA-stock
    issued         June 4, 2010 RMB7.3            47,945,200 July 15, 2010      47,945,200privatelyStatement of security issuing in latest three years
      In 2010, the Company issued privately 47,945,200 A shares to six particular investors at priceof RMB7.30 each. Totally RMB349,999,960 was raised. The shares were listed on July 15, 2010.The Company hadn’t issued shares in prior three years. The Company has not issued securities inthe last three years in addition to the above-mentioned one.2. Statement of changes in share number and shareholder structure, assets and liabilities structureNone3. Current employees’ sharesNone3. Shareholders and the substantial controller of the Company1. Shareholders and shareholding
                                                                                                 In share
                                            Number of shareholders by the end of theNumber of shareholders in
                                     73,145 5th date day before the disclosure date ofthe reporting period
                                            the annual report
                                                         China Fangda Group Co., Ltd. 2012 Annual Report
                             Top 10 shareholders of the Company
                                       Numb                                Pledging or freezing
                                        er of                  Amou
                                       shares Chang             nt of
                                        held e in              shares
                                                     Condi
    Name of the Properties of Shareholding at the the              witho
                                                     tional
    shareholder shareholder       (%)      end of report             ut Share status          Amount
                                                     shares
                                         the    ing             sales
                                       report period           restric
                                         ing                    tion
                                       periodShenzhen
    Banglin      Domestic                        No
                                       68,77
    Technologies non-state           9.09%       chang
                                       4,273
    Development legal person                     eCo., Ltd.Liaoning
    Fangda        Domestic
                                         30,76
    Group         non-state          4.06%         New
                                         5,226Industry Co., legal personLtd.Shenzhen
    Shilihe       Overseas                   21,33 Increa
                                 2.82%
    Investment    legal person               9,867 seCo., Ltd.Shenzhen
              Domestic                       No
    Shilihe                                17,86
              non-state          2.36%       chang
    Investment                             0,992
              legal person                   eCo., Ltd.
              Domestic                       No
    Wang                                   16,80
              natural            2.22%       chang
    Shaolin                                0,000
              person                         e
              Domestic
                                         3,337, Increa
    Cao Yifan     natural            0.44%
                                            465 se
              person
            Domestic                          No
                                       2,305,
    Chen Lihong natural               0.3%        chang
                                          365
            person                            e
    Jiangxi       Domestic
                                         2,050,
    International non-state          0.27%          New
                                            000
    Trust Co.,    legal person
                                                         China Fangda Group Co., Ltd. 2012 Annual ReportLtd CapitalTrustContract(JinshiNo.199)SOOCHOWSecuritiesCustomer
            Domestic
    Credit                                    1,930,
            non-state             0.25%          New
    Transaction                                  000
            legal personGuaranteeSecuritiesAccount
              Domestic
                                          1,670, Decre
    Zheng Fan     natural             0.22%
                                             426 ase
              personA strategic investor orordinary legal person
    becomes the Top10          Noneshareholder due a stockissue.
                            Among the top 10 shareholders, Shenzhen Banglin Technology
                            Development Co., Ltd. and Shengjiu Investment Co., Ltd. are partiesNotes to top ten
                            action-in-concert. Shenzhen Banglin Technology Development Co.,shareholder relationship or
                            Ltd. and Shenzhen Shilihe Investment Co., Ltd. are related parties."action in concert"
                            The Company is not notified of other action-in-concert or related
                            parties among the other holders of current shares.
                             Top 10 holders of unconditional shares
                                                                           Category of shares
                                 Amount of shares without salesName of the shareholder
                            restriction at the end of the year (Note 4) Category of    Amount
                                                                          shares
    Shenzhen Banglin                                                     RMB
    Technologies Development                                  68,774,273 common               68,774,273
    Co., Ltd.                                                            shares
                                                                     RMBLiaoning Fangda Group
                                                          30,765,226 common               30,765,226Industry Co., Ltd.
                                                                     shares
                                                                     Foreign
                                                                     shares listed
    Shengjiu Investment Ltd.                                  21,339,867                      21,339,867
                                                                     in domestic
                                                                     exchanges
                                                          China Fangda Group Co., Ltd. 2012 Annual Report
                                                                         RMBShenzhen Shilihe
                                                              17,860,992 common            17,860,992Investment Co., Ltd.
                                                                         shares
                                                                         RMB
    Wang Shaolin                                                  16,800,000 common            16,800,000
                                                                         shares
                                                                         Foreign
                                                                         shares listed
    Cao Yifan                                                      3,337,465                    3,337,465
                                                                         in domestic
                                                                         exchanges
                                                                         Foreign
                                                                         shares listed
    Chen Lihong                                                    2,305,365                    2,305,365
                                                                         in domestic
                                                                         exchanges
    Jiangxi International Trust                                              RMB
    Co., Ltd Capital Trust                                         2,050,000 common             2,050,000
    Contract (Jinshi No.199)                                                 sharesSOOCHOW Securities
                                                                         RMBCustomer Credit
                                                               1,930,000 common             1,930,000Transaction Guarantee
                                                                         sharesSecurities Account
                                                                         Foreign
                                                                         shares listed
    Zhen Fan                                                       1,670,426                    1,670,426
                                                                         in domestic
                                                                         exchangesNo action-in-concert or
                              Among the top 10 shareholders, Shenzhen Banglin Technologyrelated parties among the
                              Development Co., Ltd. and Shengjiu Investment Co., Ltd. are partiestop10 unconditional
                              action-in-concert. Shenzhen Banglin Technology Development Co.,shareholders and between
                              Ltd. and Shenzhen Shilihe Investment Co., Ltd. are related parties.the top10 unconditional
                              The Company is not notified of other action-in-concert or relatedshareholders and the top10
                              parties among the other holders of current shares.shareholdersStatement of shareholders
    participating in margin       Nonetrade (if any)2. Profile of the controlling shareholdersLegal person
    Name of controlling   Legal    Date of        Organization
                                                                Registered capital   Main business
    shareholder      representa establis          code
                                                             China Fangda Group Co., Ltd. 2012 Annual Report
                        tive/respo hment
                          nsible
                          person
                                                                                 Industrial
                                                                                 investment,
                                                                                 developing of
    Shenzhen Banglin                                                                 electronic
    Technologies           Chen        June 7,                                       products,
                                           72984005-5             RMB 30 million
    Development Co.,       Jinwu       2001                                          technical
    Ltd.                                                                             consulting,
                                                                                 domestic
                                                                                 commerce,
                                                                                 material tradingOperationperformance,
                     The 2012 annual report of Banglin Technologies has not been audited andfinancial condition,
                     the company will continue to engage in the investment business.cash flow and futuredevelopment strategyStock ownership ofother domestic andoverseas listed
    company controlled     The controlling shareholders hold no share in other listed companies.or whose shares areheld by controllingshareholdersChanges in controlling shareholders in the reporting period□ Applicable √ Inapplicable3. Substantial controller of the CompanyNatural person
                                                             Right of residence in another country or
    Name of substantial controller         Nationality
                                                                              region
    Xiong Jianming                      Chinese                 YesOccupation and position over the
                                 Chair of the Board and president of the Companylast five yearsProfiles of domestic and overseas
                                  The controller held no share in other listed companies in the lastlisted companies in which the
                                  ten years.controller held sharesChange in the substantial controller in the report period□ Applicable √ Inapplicable
                                                           China Fangda Group Co., Ltd. 2012 Annual Report7. Chart of the controlling relationshipControlling over the Company by the substantial controller through trust or other asset management□ Applicable √ Inapplicable4. Other legal person shareholders with over 10% of total sharesNone4. Statement on share increasing proposal raised by the shareholders or their action-in-concertparties in the reporting period
                                                                               Disclosure
                                                                    Initial    date of the
    Name of                                 Actual      Actual
              Number of Proportion of                             disclosure     share
    shareholder/                            number of proportion of
              shares to be shares to be                          date of the increase plan
    action-in-co                              shares      shares
               increased    increased                                share    implementati
    ncert parties                           increased   increased
                                                                increase plan      on
                                                                               completionShenzhenBanglin
                                                                           March 21,
    Technologies     35,000,000          4.62%             0             0%
                                                                           2012DevelopmentCo., Ltd.Shengjiu
                                                                           March 6,
    Investment                                    8,892,747            1.17%
                                                                           2012Ltd.Other matters
    On March 20, 2012, the 8th meeting of the 6th term of the Board approved the proposal to issueno more than 35 million non-public A-shares to the first majority shareholder Banglin Technologies,
                                                         China Fangda Group Co., Ltd. 2012 Annual Reportwhich subscribed for the issue with RMB cash. The proposal was not approved at the meeting andissuance was not implemented.
       VII Particulars about the Directors, Supervisors, Senior Management and Employees1. Changes in shareholding of Directors, Supervisors and Senior Management
                                                               Number
                                                                                              Number
                                                                   of                Decreas
                                                                         Increase                of
                                                                shares                  ed
                                             Starting End                d shares              shares
                   Job                                         held at                shares
    Name Position                 Sex   Age      date of date of             in this             held at
                  status                                       beginni                in this
                                             the term the term            period               end of
                                                                 ng of               period
                                                                          (share)               the
                                                                  the                (share)
                                                                                              period
                                                               period
        ChairmXiong
        an,      In                          Mar. 25, Mar. 25,
    Jianmin                    M            55                     102,971           0         0 102,971
        presiden office                      2011     2014g
        t
       DirectorWang
       , vice In                             Mar. 25, Mar. 25,
    Shengg                     M            55                     36,286            0         0 36,286
       presiden office                       2011     2014uo
       t
    Xiong            In                          Mar. 25, Mar. 25,
        Director           M            44
    Jianwei          office                      2011     2014
        Director
        ,
    Zhou             In                          Mar. 25, Mar. 25,
        secretar           M            50
    Zhigang          office                      2011     2014
        y of the
        Board
        Indepen
    Guo              In                          Mar. 25, Mar. 25,
        dent               M            51
    Jinlong          office                      2011     2014
        director
    Shao   Indepen
                In                           Mar. 25, Mar. 25,
    Hanqin dent                F            74
                office                       2011     2014
    g      director
       Indepen
    Huang           In                           Mar. 25, Mar. 25,
       dent                M            50
    Yaying          office                       2011     2014
       director
                                                             China Fangda Group Co., Ltd. 2012 Annual Report
         Supervi
         sory
         Commit
    Zhen             In                              Mar. 25, Mar. 25,
         tee                 F              53
    Hua              office                          2011     2014
         meeting
         convene
         r
    Yu    Supervi In                                 Mar. 25, Mar. 25,
                             M              53
    Guoan sor     office                             2011     2014
    Cao      Supervi In                              Mar. 25, Mar. 25,
                             F              34
    Naisi    sor     office                          2011     2014
    Yang   Vice
                In                               Mar. 25, Mar. 25,
    Xioazh presiden              M              59
                office                           2011     2014
    uan    t
         Vice
    Lin      presiden In                             Mar. 25, Mar. 25,
                             M              35
    Kebin    t and    office                         2011     2014
         CFO
        Vice
    Wei              In                              Jul. 29, Mar. 25,
        presiden             M              44
    Yuexing          office                          2011     2014
        t
    Total       --          --       --    --           --       --      139,257         0         0 139,2572. Office DescriptionWorking experiences of current directors, supervisors and senior management in recent five years
      Mr. Xiong Jianming: PHD Management; senior engineer; part-time professor of BeijingInstitute of Civil Engineering and Architecture and Nanchang University. He was once employedby Jiangxi Provincial Machinery Design Academe, Administration Bureau of Shekou District ofShenzhen government, etc, deputy to the 10th People’s Congress of Guangdong Province, deputy tothe 2nd and 3rd People’s Congress of Shenzhen City. He’s now assuming Chairman of the Board andPresident of the Company, member of the 5th Shenzhen Committee of CPPCC, standing member ofthe 5th Nanshan Committee of CPPCC, founder and president of the Shenzhen SemiconductorLighting Association, vice president of the Federation of Shenzhen Industries, vice president of theSGCC, president of the Nanshan Industry and Commerce Association and Honorary Chairman ofShenzhen Nanshan Charity Society.
      Mr. Wang Shengguo: Master degree; Visiting Scholar from University of Essen, seniorengineer. He once held such positions as Chief Engineer of Design Institute of the 2nd HeavyMachinery factory of Machinery Industrial Ministry. Mr. Wang is now a Director and VicePresident of the Company.
      Mr. Xiong Jianwei: MBA. He is now a Director of the Company.
      Mr. Zhou Zhigang, bachelor’s degree. He is currently a Director, Secretary of Board, and head
                                                          China Fangda Group Co., Ltd. 2012 Annual Reportof the Securities Dept.
      Ms. Shao Hanqing, professor, doctorial course instructor. Once she was the Vice DirectorGeneral of Shenzhen Bureau of Planning, assistant to the Mayor, Vice Chief Secretary of the CityGovernment, standing commissioner of city council, PR director, and vice chief secretary ofShenzhen Political Consultative Conference. At present she’s the honorary vice chief of ChinaProduction Association, part-time professor of China People’s University, and independent directorof Shenzhen Zhonghang Health Club Co., Ltd., Xingli (HK) Co., Ltd. and the Company.
      Mr. Guo Jinlong, member of China Democratic League, master of economics, certifiedaccountant, certified tax consultant, deputy professor. He once was associate instructor and lecturerof Shanxi University of Finance & Economics, audit assistant of the Shenzhen Shekou ZhonghuaCertified Accountants, a project manager and department leader of Pan-China Shenzhen CPA Ltd.,chief of Profession Division, assistant to chief secretary, vice chief secretary of Shenzhen CPAAssociation. At present he’s independent director of Shenzhen Tuori New Energy Co., Ltd.,Rainbow Shopping Mall Co., Ltd., Shenzhen Zhonghang Health Club Co., Ltd., Shenzhen HanyuMedical Joint Stock Limited, partner of ShineWing Certified Public Account, member of the 5 thShenzhen Committee of CPPCC, member of the 5th council of the Chinese Institute of CPA and anindependent director of the Company.
      Huang Yaying, professor of law, certified lawyer and senior visiting scholar of UNSW. Seniorvisiting scholar of the Law School of UNSW. At present he’s the dean of Law School of ShenzhenUniversity, standing commissioner of Shenzhen People’s Congress, member of the ShenzhenCommission of Legal Affairs, member of the Shenzhen Legal Affair Office Expert ConsultationCommittee, committee member and certified arbitrator of Shenzhen Court of InternationalArbitration and South China International Economic and Trade Arbitration Commission, memberand arbitrator of the Shenzhen Arbitration Commission, arbitrator of China International TradeArbitration Committee, Xi’an Arbitration Committee, Hainan Arbitration Committee and HuizhouArbitration Committee; standing member of the China Academy of Arbitration Law and theChinese Society of Private International Law, lawyer of the Guangdong Guoxin Law Firm and anindependent director of the Company. He is the standing director of the China Academy ofArbitration Law and Institute of China Private International Law, lawyer of the Guangdong GuoxinLaw Firm and independent director of the Company.
      Ms. Zhen Hua: Bachelor degree. She is now Supervisory Committee meeting convener,Chairwoman of Trade Union, and Director of President Office of the Company.
      Mr. Yu Guoan, doctor degree, once associate professor of North-east University, chieftechnical officer, head of IT department. He is now a supervisor of the Company.
      Ms. Cao Naisi, bachelor degree, once head of auditing department, deputy chief of HRdepartment, general manager of the Beijing Branch of the Shenzhen Fangda Decoration, at presentshe’s a supervisor of the Company and vice general manager of Fangda Decoration.
      Mr. Yang Xiaozhuan: Bachelor degree; senior engineer. He once worked for Hubei Provincialmachinery Industry Department and held such positions as managing director of the 2nd MachineTool Factory of Hubei, and Deputy Manager of Shenzhen Jinxin Investment Co., Ltd. Mr. Yang isnow assuming Vice President and chief of the Enterprise Management Department of the Company.
      Mr. Lin Kebin, bachelor’s degree. At present he’s the Vice President and CFO of theCompany.
      Mr. Wei Yuexing, bachelor degree, engineer. Once he was chief engineer of Jiangxi Auto
                                                        China Fangda Group Co., Ltd. 2012 Annual ReportSwitch Factory. Currently he’s the vice president of the Company, and general manager of FangdaDecoration, a fully-owned subsidiary of the Company.Offices held at shareholders entities√ Applicable □ Inapplicable
                                                                                  Whether any
                                                         Starting               remuneration is
                                                                    End date of
    Name              Shareholder entity       Office    date of the                paid at the
                                                                     the term
                                                           term                   shareholder
                                                                                     entity
    Xiong                                                  Oct. 6,
             Shengjiu Investment Ltd.       Chairman                               No
    Jianming                                               2011
    Wang         Shenzhen Shilihe Investment               Oct. 19,
                                            Chairman                               No
    Shengguo     Co., Ltd.                                 2006
    Wang         Shenzhen Shilihe Investment    General    Sep. 29,
                                                                                   No
    Shengguo     Co., Ltd.                      manager    2003
    Xiong        Shenzhen Shilihe Investment               Jun. 12,
                                            Director                               No
    Jianwei      Co., Ltd.                                 2001
    Zhou         Shenzhen Shilihe Investment               Oct. 19,
                                            Director                               No
    Zhigang      Co., Ltd.                                 2006
             Shenzhen Shilihe Investment    Superviso Oct. 19,
    Zhen Hua                                                                           No
             Co., Ltd.                      r         2006Office
            NonedescriptionOffices held at other entities√ Applicable □ Inapplicable
                                                                                  Whether any
                                                         Starting               remuneration is
                                                                    End date of
    Name                    Entity name           Office    date of the                paid at the
                                                                     the term
                                                           term                   shareholder
                                                                                     entity
    Guo          ShineWing Certified Public
                                            Partner    Dec. 2005                   Yes
    Jinlong      Account
    Guo          Shenzhen Tuori New Energy      Independe
                                                        Feb. 2013 Feb. 2016        Yes
    Jinlong      Co., Ltd.                      nt director
    Guo          Rainbow Shopping Mall Co.,     Independe
                                                        Jul. 2010   Jul. 2013      Yes
    Jinlong      Ltd.                           nt director
    Guo          Shenzhen Zhonghang Health      Independe
                                                        Aug. 2010 Aug. 2013        Yes
    Jinlong      Club Co., Ltd.                 nt director
    Guo          Shenzhen Hanyu Medical Joint Independe Oct. 2012       Oct. 2015      Yes
                                                            China Fangda Group Co., Ltd. 2012 Annual Report
    Jinlong     Stock Limited                    nt director
    Shao        Shenzhen Zhonghang Health        Independe
                                                         Aug. 2010 Aug. 2013           Yes
    Hanqing     Club Co., Ltd.                   nt director
    Shao                                         Independe
            Xingli (HK) Co., Ltd.                        May. 2009                     Yes
    Hanqing                                      nt director
    Huang       Law School of Shenzhen
                                             Dean          Jul. 2009                   Yes
    Yaying      UniversityHuang
            Guangdong Guoxin Law Firm        Lawyer        May. 2009                   NoYayingOffice
            The above-mentioned three are independent directors of the Company.description3. Annual Remunerations of the Directors, Supervisors and Senior ExecutivesDecision making procedures, basis and actual payment of remunerations of the Directors,Supervisors and Senior Executives1. Remuneration schemes for directors and supervisors are proposed by the Remuneration andAssessment Committee of the Board, and implemented upon approval of the Board and theShareholders’ Meetings; the remuneration schemes for executives are approved and implementedby the Board.Remuneration for directors and supervisors are decided by the shareholders’ meeting.Remunerations for executives are composed of wages and performance bonus as decided by theBoard.Payment on monthly basisRemunerations of the Directors, Supervisors and Senior Executives of the Company During thereporting period
                                                                                      Unpaid
                                                                           Total
                                                                                    remunerati
                                                               Total    remunerati
                                                                                     on during
    Name       Position       Sex       Age        Job status remunerati on from the
                                                                                        the
                                                                on      shareholdin
                                                                                     reporting
                                                                          g party
                                                                                       period
    Xiong       Chairman,                                           1,190,590.8
                      M                       55 In office                            0.00 843,054.89
    Jianming    president                                                     9
            Director,Wang
            vice         M                    55 In office       616,303.89           0.00 461,533.18Shengguo
            presidentXiong
            Director     M                    44 In office       575,110.52           0.00 402,905.01Jianwei
    Zhou        Director,
                         M                    50 In office       442,541.11           0.00 332,944.66
    Zhigang     secretary of
                                                            China Fangda Group Co., Ltd. 2012 Annual Report
               the Board
    Guo            Independen
                          M                    51 In office       80,000.00           0.00 67,199.36
    Jinlong        t director
    Shao           Independen
                          F                    74 In office       80,000.00           0.00 67,199.36
    Hanqing        t director
    Huang          Independen
                          M                    50 In office       80,000.00           0.00 67,199.36
    Yaying         t director
               Supervisor
               y
    Zhen Hua       Committee F                     53 In office      413,021.11           0.00 310,455.23
               meeting
               convener
    Yu Guoan Supervisor M                          53 In office       30,000.00           0.00 25,920.00
    Cao Naisi      Supervisor F                    34 In office      356,217.00           0.00 281,399.50
    Yang      Vice
                           M                   59 In office      419,689.04           0.00 315,658.68Xioazhuan president
          Vice
    Lin Kebin president        M                   35 In office      465,975.61           0.00 352,162.24
          and CFO
    Wei            Vice
                           M                   44 In office      550,090.52           0.00 398,092.05
    Yuexing        president
                                                                5,299,539.6                  3,925,723.5
    Total            --         --         --           --                             0.00
                                                                          9                            2Equity incentive programs provided for the Directors, Supervisors and Senior Executives of theCompany during the reporting period□ Applicable √ Inapplicable4. Resigned and Dismissed Directors, Supervisors and Senior ExecutivesInapplicable5. Changes in Key Technical Team or Personnel during the Reporting Period (excluding directors,supervisors and senior executives)No change6. Employees
                                   Employees (by December 31, 2012)
                               Fangda Group       Fangda Decoration (main Other                          Total
                               (parent)           subsidiary)             subsidiaries
                                                 China Fangda Group Co., Ltd. 2012 Annual Report
    Number of employees in                64               1,131                   1,685          2880position
    Retired employees on the              0                   0                       0                0Company’s expense
    Categories of professions   Fangda Group   Fangda Decoration (main      Other               Total
                              (parent)       subsidiary)                  subsidiaries
    Production                              0                869                  1,005           1874
    Sales & Marketing                       0                 14                    83              97
    Technicians                             0                114                   135             249
    Finance & Accounting                    9                 13                    30              52
    Executive                              55                121                   432             608
    Categories of education    Fangda Group   Fangda Decoration (main      Other               Total
                              (parent)       subsidiary)                  subsidiaries
    High school or below                   23                744                  1,088           1855
    College diploma                         6                113                   252             371
    Bachelor                               32                264                   337             633
    Master’s degree                        2                 10                     8              20
    Doctor’s degree                        1                  0                     0               1
                                                         China Fangda Group Co., Ltd. 2012 Annual ReportStaff remuneration policy: The Company’s staff remuneration comprises post wage, performancewage, allowance and annual bonus. The Company has set up an economic responsibility assessmentsystem according to the annual operation target and responsibility indicators for all departments.The performance wage is determined by the economic indicators, management indicators,optimization indicators and internal control. The annual bonus is determined by the Company'sannual profit and fulfillment of targets set for various departments. The staff remuneration andwelfare will be adjusted according to the Company’s business operation and changes in the localstandard of living and price index.Staff training program: The Company has established the staff training and re-education system andhas implemented training programs relating to the Company’s business. To reach the training goal,the Company will organization examinations and the HR department will record the results of suchexaminations as basis for annual assessment and adjustment in positions.
                                                         China Fangda Group Co., Ltd. 2012 Annual Report
                                  VIII Corporation Governance1. Overview
       The Company carried out its business operation strictly following with the Company Law,Securities Law and relative regulations of China Securities Regulatory Commission and ShenzhenStock Exchange. And the administration structure has been further improved without conflict withthe laws and regulations. Particulars about the administration of the Company in the report term:According to the Company Law, Securities Law, Shenzhen Stock Exchange Share Listing Rules,Enterprise Accounting System and Enterprise Accounting Standard, the Company has produced theShareholders’ Meeting Criteria, Working Regulations of the Board of Directors, SupervisoryCommittee Meeting Criteria, President Work Criteria, Independent Director Working Criteria,Internal Control Criteria, Information Disclosure Criteria, Proceed Administration Regulations,Accounting Criteria, Internal Auditing Criteria, Manpower Management Regulations, Legal AffairAdministration Rules, Purchase Regulations, Rules of Bidding Invitation, Investor Reception andPromotion, New Subscription Internal Control, Hedge Operation Internal Control, CPA Selectionand Employing, Accounting of Fair Value, Information Insider Registration, External InformationUser Administration, Finance and Accounting Responsibility Management, Rules of RelatedTransaction, External Investment Administration, and Internet Information Disclosure. These havecomposed a mature and effective internal control system covering all aspects of the businessoperation including investment decision-making, related transactions, financial management, R&Dmanagement, HRM, executive management, purchase management, production and salesmanagement and information disclosure. All of them have been implemented smoothly and thereisn’t any major defect or fraudulent practices in executing of the internal control system. Theinternal control system was designed under principles of scientific, rational, and standardization,and with reference to the Company’s practical business operations.
      In the reporting period, the Company has revised the Information Insider Registration Scheme,Articles of Association and has formulated The Shareholders’ Rewarding Plan 2012-2014, andRegulations for Information Disclosure Relating to Inter-bank Bond Market Debt Financing Tool ofFangda Group Co., Ltd. Revising of these regulations may provide stronger support to standardoperation of the Company.
       By the end of the reporting period, the corporate governance complies with the Chinese lawsand requirements regarding corporate governance of listed companies issued by CSRC.Incompliance with the Company Law and related requirements of CSRC□ Yes √ NoImplementation of corporate governance activities and establishment and implementation ofinsider registration and management systemThe Company has revised the “Information Insider Registration Scheme” according to therequirement of CSRC in February 2012. The revised Information Insider Registration Scheme ispublished on www.cninfo.com.cn. No situation was found in the report period that any of theinsiders had been trading the Company’s shares taking advantages of the material information they
                                                           China Fangda Group Co., Ltd. 2012 Annual Reportcould get access to, neither informed by the supervisory authorities regarding inspection orcorrection notice.2. Annual and extraordinary shareholder meetings held during the report period1. Annual shareholder meeting during the report period
                                                                                          Index for
                                                                        Date of
    Meeting           Date           Proposal        Resolution                          information
                                                                       disclosure
                                                                                          disclosure
                                 (1) Reviewing
                                 The Board of
                                 Directors’ Work
                                 Report 2011;
                                 (2) reviewing
                                 Supervisory
                                 Committee’s
                                 Annual Report
                                                                                      The
                                 2011; (3)
                                                                                      announcement
                                 reviewing
                                                                                      of The
                                 Financial
                                                                                      Resolutions of
                                 Settlement
                                                                                      Shareholders’
                                 Report 2011;
                                                                                      Annual
                                 (4) reviewing
                                                                                      Meeting 2011
                                 the proposal of
                                                                                      was published
                                 dividend
    2011 Annual                                       All the                             on China
                                 distribution and
    Shareholder      May 10, 2012                     proposals are     May 11, 2012      Securities
                                 capitalization
    Meeting                                           approved                            Journal,
                                 of common
                                                                                      Shanghai
                                 reserves for
                                                                                      Securities
                                 year 2011; (5)
                                                                                      Daily,
                                 reviewing the
                                                                                      Securities
                                 Annual Report
                                                                                      Times, HKCD
                                 2011 and the
                                                                                      and
                                 Summary; (6)
                                                                                      www.cninfo.co
                                 reviewing the
                                                                                      m.cn
                                 proposal about
                                 applying for
                                 integrated bank
                                 credit, and
                                 providing of
                                 guarantee for
                                 the fully-owned
                                 subsidiaries;
                                                         China Fangda Group Co., Ltd. 2012 Annual Report
                                 (Special
                                 resolution); (7)
                                 reviewing the
                                 proposal on
                                 revising the
                                 Articles of
                                 Association;
                                 (Special
                                 resolution); (8)
                                 listening the
                                 work reports of
                                 the
                                 Independent
                                 Directors2. Extraordinary shareholder meetings during the report period
                                                                                        Index for
                                                                      Date of
    Meeting           Date          Proposal        Resolution                         information
                                                                     disclosure
                                                                                        disclosure
                             (1) Proposal of
                             Revising the
                             Articles of
                             Association;                                        The
                             (2) Proposal of                                     announcement
                             Revising the                                        of 1st
                             Working Rules                                       Provisional
                             of the Board;                                       Shareholders’
                             (3) Proposal on                                     Meeting 2012
                             External                                            was published
                             Investment; (4)                                     on China
    1st Provisional                              All the
                             Proposal on                                         Securities
    Shareholders’ March 9, 2012                 proposals are        March 10, 2012
                             Applying for                                        Journal,
    Meeting 2012                                 approved
                             Loans from the                                      Shanghai
                             Banks to                                            Securities
                             Support                                             Daily,
                             Working                                             Securities
                             Capital; (5)                                        Times, HKCD
                             Proposal to                                         and
                             Provide                                             www.cninfo.co
                             Guarantees for                                      m.cn.
                             the Bank Loans
                             for the
                             Fully-owned
                                                        China Fangda Group Co., Ltd. 2012 Annual Report
                               Subsidiaries;
                               (6) Proposal to
                               Adjust the
                               Amount of
                               Investment in
                               Energy-saving
                               Curtain Wall
                               and
                               Photo-Electric
                               Curtain Wall
                               Expanding and
                               PSD
                               Expanding
                               Projects
                               (1) The
                               proposal to
                               apply for
                               issuing of
                               A-shares
                               privately; (2)
                               The proposal of                                     The
                               the plan to                                         announcement
                               issue A-shares                                      of 2nd
                               privately in                                        Provisional
                               2012; (3) The                                       Shareholders’
                               proposal of the                                     Meeting 2012
                               preplan to issue                                    was published
                               A-shares                                            on China
    2nd Provisional                                 Proposal (2),
                               privately in                                        Securities
    Shareholders’ April 5, 2012                    (3), (6) and (7) April 6, 2012
                               year 2012; (4)                                      Journal,
    Meeting 2012                                    denied
                               The proposal of                                     Shanghai
                               the feasibility                                     Securities
                               report on                                           Daily,
                               application of                                      Securities
                               the proceeds                                        Times, HKCD
                               from issuing of                                     and
                               A-shares                                            www.cninfo.co
                               privately in                                        m.cn.
                               year 2012; (5)
                               The proposal
                               on requesting
                               the
                               shareholders’
                               meeting to
                                                       China Fangda Group Co., Ltd. 2012 Annual Report
                               authorize the
                               Board to
                               practice the
                               private issuing
                               of A-shares
                               with full
                               authority; (6)
                               The proposal to
                               enter into the
                               conditional
                               share
                               subscribing
                               contract with
                               Shenzhen
                               Banglin
                               Technology
                               Development
                               Co., Ltd.; (7)
                               The proposal
                               about
                               subscribing of
                               shares privately
                               by the largest
                               shareholder
                               that is a related
                               transaction.
                               (1) Proposal of                                    The
                               Revising the                                       announcement
                               Plan of                                            of 3rd
                               Providing                                          Provisional
                               Guarantees to                                      Shareholders’
                               Fully-Owned                                        Meeting 2012
                               Subsidiaries of                                    was published
                               the Company;                                       on China
    3rd Provisional                                All the
                               (2) Proposal of                                    Securities
    Shareholders’ July 20, 2012                   proposals are    July 21, 2012
                               Reviewing The                                      Journal,
    Meeting 2012                                   approved
                               Shareholders’                                     Shanghai
                               Rewarding                                          Securities
                               Plan                                               Daily,
                               2012-2014; (3)                                     Securities
                               Proposal of                                        Times, HKCD
                               Revising the                                       and
                               Articles of                                        www.cninfo.co
                               Association;                                       m.cn.
                                                            China Fangda Group Co., Ltd. 2012 Annual Report
                                 (4) Proposal of
                                 Providing
                                 Guarantee to
                                 the
                                 Fully-Owned
                                 Subsidiaries of
                                 the Company.
                                                                                       The
                                                                                       announcement
                                                                                       of 4th
                                                                                       Provisional
                                                                                       Shareholders’
                                                                                       Meeting 2012
                                                                                       was published
                                 Proposal on                                           on China4th Provisional
                December 21,     engaging of the Proposal            December 22,      SecuritiesShareholders’
                2012             CPA for year approved               2012              Journal,Meeting 2012
                                 2012                                                  Shanghai
                                                                                       Securities
                                                                                       Daily,
                                                                                       Securities
                                                                                       Times, HKCD
                                                                                       and
                                                                                       www.cninfo.co
                                                                                       m.cn.3. Performance of independent directors during the report period1. Independent directors’ presenting of board meetings and shareholders’ meetings in the reportperiod
                       Independent directors’ presenting of board meetings
                   Time of
                                                                                            Absent for
    Name of         board
                                Presented Presented by Presented by                           two
    independent     meetings                                                    Absent
                                personally  telecom       proxy                            consecutive
    director     should have
                                                                                            meetings
                   attended
    Shao Hanqing               11             5             5                1              0 No
    Guo Jinlong                11             5             5                1              0 No
    Huang Yaying               11             4             5                2              0 NoTime of presence by
                                                                                                        7independent directors at
                                                           China Fangda Group Co., Ltd. 2012 Annual Reportshareholders’ meetingsStatement for absence for two consecutive board meetingsNone2. Objection raised by independent directorsAny objection raised by independent directors against the Company’s related issues□ Yes √ No3. Other statement for performance of independent directorsAdoption of suggestion proposed by independent directors√ Yes □ NoStatement for suggestion adopted or not by the Company
      (1) During the report period, the Company’s independent directors have paid attention to theCompany’s operation and performed their duties independent in accordance with applicable laws,regulations and Articles of Association of the Company and have proposed many professionalsuggestions for improving the Company’s system and routine operation decision-making. Duringthe report period, independent directors have made independent and just opinion on issues that needindependent directors’ opinions, playing positive roles in improving the Company’s supervisorysystem and protecting the rights and interests of the Company and shareholders.
      (2) Independent opinions issued in 2012
    Name Time of independent                     Issue involved                 Type of Disclosure
                   opinion                                                    independen    of the
                                                                               t opinion independent
                                                                                           opinion
    Shao      February 21, 2012 Using part of the idle financing proceeds       Agreed       Yes
    Hanqing                         to supplement working capital and
    Guo                          adjustment in use of the raised fund in
    Jinlong                        projects
    Huang       March 20, 2012 Related transaction
    Yaying      April 18, 2012 Use of the Company’s fund by controlling
                                  shareholder and other affiliates and
                                  guarantee made by the Company
                                  Internal control self evaluation report
                                  No cash dividend proposal was raised
                                  though the Company made profit in 2012
                                  and the reserve capitalizing pre-plan
                                  Remuneration of directors and senior
                                  executives in 2011
                July 4, 2012      Revision of provisions relating to profit
                                  distribution in the Articles of Association
                                                           China Fangda Group Co., Ltd. 2012 Annual Report
                              The Shareholders’ Rewarding Plan
                              2012-2014
              July 26, 2012   Use of fund and external guarantees made
                              controlling shareholder and other
                              affiliates in the first half of 2012
             August 17, 2012 Using another part of the idle financing
                              proceeds to supplement working capital
             October 26, 2012 Engaging the auditor for 20124. Performance of specific committees under the Board
      (1) Performance of the Development Strategy Committee
    During the report period, the Development Strategy Committee of the Company has performedits duties in accordance with the Working Regulations for Development Strategy Committee andplayed its role in the decision-making process of the Company. Two meetings were convened anddetails are disclosed as follows:
    1. On April 18, 2012, the 2nd meeting of the Development Strategy Committee of the 6th term ofthe Board was held to review: (1) the Company’s production and operation in 2011; (2) theproduction and operation plan for 2012; (3) the Company’s development strategic plan between2012 and 2016. The meeting mainly studied and discussed the production and operation in 2012and the development strategy for 2012.
      2. On July 26, 2012, the 3rd meeting of the Development Strategy Committee of the 6th term ofthe Board was held to view the Company’s production and operation in the first half of 2012 andstudied the fulfillment of the business plan in the first half of the year and places to be improved inthe second half.
      (2) Performance of the Auditing Committee
      During the report period, five Auditing Committee meetings are held to review issuesincluding the arrangement of audit, regular financial reports, engaging the CFA, general regulationsfor internal control and use of the fund raised. Details of the meetings are disclosed as follows:
      1. On April 13, 2012, the 5th meeting of the Auditing Committee of the 6th term of the Boardwas held to review the financial statements with the initial opinion issued by the CFA for 2011 andapprove the auditor report issued by the CFA. After the CFA issued to final auditor’s opinion, theAuditing Committee submitted the resolution on the annual financial statements to the Board andissued the summary report on the auditing of the CFA for this year.
      2. On April 18, 2012, the 6th meeting of the Auditing Committee of the 6th term of the Boardwas held to review and approve: (1) the audited financial statements for 2011; (2) unaudited 20121st quarter financial statements; (3) 2011 financial performance; (4) the internal audit of theCompany in 2011; (5) the internal audit plan of the Company in 2012; (6) the internal controlself-evaluation in 2011; (7) investigation report for the use of raised fund in the fourth quarter of2011; (8) the investigation report for the use of raised fund in the first quarter of 2012.
      3. On July 26, 2012, the 7th meeting of the Auditing Committee of the 6th term of the Boardwas held to review and approve: (1) unaudited 2012 semi-year financial statements; (2) the 2012semi-year financial performance; (3) the internal audit report for the first half of 2012; (4)investigation report for the use of raised fund in the second quarter of 2012.
                                                          China Fangda Group Co., Ltd. 2012 Annual Report
    4. On October 15, 2012, the 8th meeting of the Auditing Committee of the 6th term of the Boardon which the proposal of engaging the CFA for 2012 was approved.
    5. On October 29, 2012, the 9th meeting of the Auditing Committee of the 6th term of the Boardwas held, on which (1) the 2012 third quarter financial statements; (2) investigation report for theuse of raised fund in the third quarter of 2012 were reviewed.
    (3) Performance of the Remuneration and Assessment CommitteeDuring the report period, the Remuneration and Assessment Committee issued the WorkingRegulations for Remuneration and Assessment Committee. On the 1st meeting of the Remunerationand Assessment Committee of the 6th term of the Board held on April 18, 2012, the committeereviewed the main financial indicators and business performance in 2011 and reviewed performanceof duties by the Company’s directors and senior executives. The committee believes that thedirectors and senior executives have worked diligently and fulfilled the business target and othertasks in 2011. The remunerations for directors, supervisors and senior executives disclosed in the2011 annual report comply with the Company’s remuneration policy.5. Performance of Supervisory CommitteeRisks for the Company discovered by the Supervisory Committee□ Yes √ NoNo disagreement with supervisory issues by the Supervisory Committee during the report period.6. Independence of the Company from the controlling shareholder in aspects of businesses,personnel, assets, organizations, and accounting
       The Company is completely separated from the controlling shareholder in aspects ofbusinesses, personnel, assets, organizations and accounting. The Company has its own completed
    businesses and capacity of independent business operation.        In the aspect of business: theCompany has its own purchasing, production, sales, and customer service system which performingindependently. There is not any material related transactions occurred with the controllingshareholders.
    In personnel: The labor management, personnel and salary management are operatedindependently from the controlling shareholder. The senior managements take salaries from theCompany and none of them takes senior management position in the controlling party.
    In assets: The Company owns its production, supplementary production system and accessoryequipments independently, and possesses its own industrial properties, non-patent technologies, andtrademark.
    In organization: The production and business operation, executive management, anddepartment setting are completely independent from the controlling shareholder. No situation ofcombined office exists. The Company adjusts its organizing structure only for its own practicalrequirement of development and management.
    In accounting: The company has its own independent accounting and auditing division,established independent and completed accounting system and management rules, has its own bank
                                                             China Fangda Group Co., Ltd. 2012 Annual Reportaccount, and exercise its liability of taxation independently.7. CompetitionNone8. Assessment and motivation of senior executivesThe Company has implemented a remuneration system that combines post wage and performancebonus. The wages and bonus are determined by on the assessment of senior executives’ innovationcapabilities, general quality, performance, fulfillment of profit and payment collection targets in theImplementation Regulations for 2012 Supervisory and Management Department TargetManagement and Assessment and Implementation Regulations for 2012 Subordinate UnitAssessment.
                                                           China Fangda Group Co., Ltd. 2012 Annual Report
                                         IX Internal Control1. Internal Control Construction
        In 2012, the Company continued to improve internal control regulations as planned based onthe internal control improvement plan and quarterly work targets. Around the risk control, theprogram has focused on internal environment, risk assessment, control activities, information andcommunication and internal supervision, substantially improving the Company’s internal controlsystem and revising the internal control manual.1. Internal environment: According to changes in business of the group and subsidiaries, thecorporate governance team has streamlined the organizational structure of the group; by reviewingthe existing rules and implementation of these rules, the group’s rules and regulations werestreamlined and updated on the OA platform, realizing the IT management of corporate rules andregulations.2. Risk assessment: According to the Company’s business development and changes in the internaland external environment, the corporate governance team has completed the risk assessment andanalysis on the corporate and business level through questionnaire and interviews with theassistance of the management. The program has discovered major risks face the group in 2012 andupdated the list of risks in the internal control manual.3. Controlling activities: The Corporate governance team and Information Management Departmenthave communicated with the management and business department of each company under thegroup to fully review and modify business processes and updated them on the OA system.According to the external and internal control requirements, defects were rectified and processeswere improved. The controlling activity regulations were added according to new companies andbusinesses and the internal control manual was modified.4. Information and communication: The Information Management Department was separated fromTechnical Management Department. The Information Management Department’s duties wereregulated, paving the way for IT construction; the IT management and communication of corporaterules and regulations were realized; the supplier and customer sharing database was established;specific personnel were send to participate in internal control training and shared experience withinthe company; the website was updated, optimizing the communication channels between thecompany and its investors, customers and suppliers.5. Internal supervision: The Company continued to adopt the 3-level risk prevention andsupervisory system in 2012. In addition, under the lead and support of the Auditing Committee, theAudit and Supervision Department has strengthened the management on internal auditing andreviewed main risky links in routing operation and the improvement and implementation of thegroups’ internal control system, authentication and integrity of financial information and efficiencyand effects of operating activities. Any problems discovered were sent to related departments toprevent and reduce risks, supporting the implementation of the internal control system and helpingprevent internal control, financial and legal risks.
                                                            China Fangda Group Co., Ltd. 2012 Annual Report2. Board’s statement on internal control responsibilityThe Board acknowledges its responsibility of establishing, improving and performing internalcontrol and has fulfilled its guide and supervisory responsibility for the establishment andimplementation of internal control and guarantee the authentication of financial statements andsafety and integrity of assets.3. Basis for establishment of the internal financial statement controlThe internal financial statement control system is established based on the Accounting Law,Accounting Criteria for Enterprises, Implementation Guidelines for Enterprise Internal Control andrelated guidelines, Guide for Internal Control of Listed Companies and other regulatory documentsissued by supervisory authorities.4. Internal control self-evaluation reportMajor internal control defects discovered in the report period in the internal control self-evaluation
                                               reportNo major defect is found in the report periodDate of disclosure of the
    internal control                March 23, 2013self-evaluation reportSource of disclosure of the
    internal control            www.cninfo.com.cnself-evaluation report5. Internal control audit report√ Applicable □ Inapplicable
                            Comments in the internal control audit reportWe believe that Fangda Group has been following with the Enterprise Accounting Standard inpreparing of the Financial Statements. The Financial Statements is reflecting, in all importantaspects, the financial situation of Fangda Group as of December 31, 2012, and the businessperformance and cash flow of year 2012.Date of disclosure of the
    internal control audit          March 23, 2013reportSource of disclosure of the
    internal control audit      www.cninfo.com.cnreportNon-standard internal control audit report by the CFA□ Yes √ No
                                                          China Fangda Group Co., Ltd. 2012 Annual ReportConsistency between the internal control audit report and self-evaluation report√ Yes □ No6. Establishment and implementation of the Retrospective Rules of Material False Information inAnnual ReportThe Company has adopted the Retrospective Rules of Material False Information in Annual Report.It will contribute to recognize and process material false in the procedures. The Company has beenimplementing the regulations diligently and no such material false or omission was found in thereport period.
                                                          China Fangda Group Co., Ltd. 2012 Annual Report
                                      X Financial Statements1. Auditors’ report
    Type                                              Standard opinion auditor’s report
    Issued on                                         March 21, 2013
                                                  Grant Thornton CPA (limited liabilityAuditor
                                                  partnership)
    Report No.                                        致同审字(2013)第 350ZA0780 号
                                         Auditors’ Report
                                         Auditors’ report
                                                               致同审字(2013)第350ZA0780号To the shareholders of China Fangda Group Co., Ltd.:
    We have audited the Financial Statements of China Fangda Group Co., Ltd. (“Fangda Group”)attached hereafter, including the Balance Sheet and Consolidated Balance Sheet ended December31, 2012 and the Income Statement, Consolidated Income Statement, Cash Flow Statement,Consolidated Cash Flow Statement, Statement on Change of Shareholders’ Equity, ConsolidatedStatement on Change of Shareholders’ Equity of the year 2012, as well as the Notes to the FinancialStatements.
    1. Executives’ responsibilities on the Financial Statements
    Preparing of the Financial Statements according to Enterprise Accounting Standard is theresponsibility of the management of the Company. This responsibility includes: (1) to prepare thefinancial statements according to the accounting standard, and ensure its fair reflection of businessposition; (2) to design, implement and maintain the internal control system related to producing ofthe Financial Statements, to prevent the Financial Statements from major false presentation due tocheating or error.
    2. Responsibilities of the CPA
    Our responsibilities are to issue auditing opinions on the Financial Statements basing on theauditing works we’ve done on them. We carried out the auditing works with compliance to ChineseCPA Auditing Standard, which requires us to plan and implement our works on the basis ofprofessional ethic standards, and obtain reasonable guarantee that the Financial Statements are freeof major false statements.
    An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor’s judgment,including the assessment of the risks of material misstatement of the financial statements, whether
                                                          China Fangda Group Co., Ltd. 2012 Annual Reportdue to fraud or error. In making those risk assessments, we consider the internal control relevant tothe entity’s preparation of financial statements in order to design audit procedures that areappropriate in the circumstances. An audit also includes evaluating the appropriateness of theaccounting polices used and the reasonableness of the accounting estimates made by management,as well as evaluating the overall presentation of the financial statements.
    We believe that the audit evidence we have obtained is sufficient and appropriate to provide abasis for our audit opinion.
    3. Auditors’ Opinions
    We believe that Fangda Group has been following with the Enterprise Accounting Standard inpreparing of the Financial Statements. The Financial Statements is reflecting, in all importantaspects, the financial situation of Fangda Group as of December 31, 2012, and the businessperformance and cash flow of year 2012.
    Grand Thornton CPA                                    CPA China(limited liability partnership)
                                                      CPA China
    Beijing, China                                March 21, 20132. Financial statementsUnit for statements in notes to financial statements: RMB yuan1. Consolidated Balance SheetPrepared by: China Fangda Group Co., Ltd.
                                                                                               In RMB
              Items                   Beginning balance                     Ending balanceCurrent asset:
    Monetary capital                            278,283,968.61                       324,780,350.77
    Settlement provision
    Outgoing call loan
                                           China Fangda Group Co., Ltd. 2012 Annual Report
    Transactional financialassets
    Notes receivable                7,638,780.88                         6,303,353.88
    Account receivable           774,890,805.30                       664,333,498.11
    Prepayment                    22,006,159.22                        25,444,369.81
    Insurance receivable
    Reinsurance receivable
    Provisions ofReinsurance contractsreceivable
    Interest receivable               72,833.33                            201,961.11
    Dividend receivable
    Other receivables             57,339,556.28                        53,412,523.94
    Repurchasing offinancial assets
    Inventory                    269,120,191.36                       254,419,907.08
    Non-current assets duein 1 year
    Other current assets
    Total of current assets          1,409,352,294.98                    1,328,895,964.70Non-current assets:
    Disburse of consignedloans
    Sellable financial assets                                            2,198,000.00
    Investment held untilmature
    Long-term receivable
    Long-term share equityinvestment
    Investment real estate       258,405,762.09                       277,705,949.35
    Fixed assets                 341,555,810.21                       316,775,398.58
    Construction in process      175,138,694.28                        81,799,896.43
    Engineering materials
    Disposal of fixed assets
    Productive biologicalassets
                                          China Fangda Group Co., Ltd. 2012 Annual Report
    Gas & petrol
    Intangible assets           102,380,382.21                       110,599,955.27
    R&D expense                      67,700.00                            914,683.63
    Goodwill                                                            8,197,817.29
    Long-term amortizable
                                    4,710,860.65                         2,600,195.30expenses
    Deferred income tax
                                  36,191,385.09                        33,637,737.59assets
    Other non-current assets
    Total of non-current assets      918,450,594.53                       834,429,633.44
    Total of assets                 2,327,802,889.51                    2,163,325,598.14Current liabilities
    Short-term loans            181,970,000.00                       387,000,000.00
    Loans from CentralBank
    Deposit received andheld for others
    Call loan received
      Transactional financialliabilities
    Notes payable               160,779,777.03                        39,058,058.47
    Account payable             411,846,031.72                       324,340,008.15
    Prepayment received          77,741,903.02                       124,950,664.78
    Selling of repurchasedfinancial assets
    Fees and commissionspayable
    Employees’ wage
                                  23,945,272.55                        20,432,966.02payable
    Taxes payable                33,686,577.98                        41,002,265.87
    Interest payable               1,954,557.27                           780,979.73
    Dividend payable
    Other payables               41,340,056.86                        36,783,207.38
    Reinsurance fee payable
    Insurance contractprovision
                                             China Fangda Group Co., Ltd. 2012 Annual Report
    Entrusted trading ofsecurities
    Entrusted selling ofsecurities
    Non-current liabilitiesdue in 1 year
    Other current liabilities      200,000,000.00
    Total of current liabilities       1,133,264,176.43                      974,348,150.40Non-current liabilities:
    Long-term loans
    Bond payable
    Long-term payable                     7,700.00                            14,700.00
    Special payables
    Anticipated liabilities                                                  288,000.00
      Deferred income tax
                                     36,210,286.40                        32,597,637.16liabilities
      Other non-current
                                                                            4,020,000.00liabilities
    Total of non-current liabilities     36,217,986.40                        36,920,337.16
    Total liabilities                  1,169,482,162.83                    1,011,268,487.56Owners’ equity (orshareholders’ equity)
    Capital paid in (or share
                                    756,909,905.00                       756,909,905.00capital)
    Capital reserves                80,299,867.64                        80,479,493.92
    Less: Shares in stock
    Special reserves
    Surplus reserves                30,494,542.94                        24,676,077.16
    Common risk provisions
    Retained profit                230,907,879.99                       211,777,968.57
    Difference caused bytranslation of foreigncurrency statementsTotal of owner’s equity
                                   1,098,612,195.57                    1,073,843,444.65belong to the parent company
    Minority interests              59,708,531.11                        78,213,665.93
                                                        China Fangda Group Co., Ltd. 2012 Annual ReportTotal of owners’ equity (or
                                            1,158,320,726.68                      1,152,057,110.58shareholders’ equity)Total of liability and owners’
    equity (or shareholders’                   2,327,802,889.51                      2,163,325,598.14equity)Legal representative: Xiong Jianming CFO: Lin Kebing Accounting Manager: Chen Yonggang2. Balance Sheet of the Parent CompanyPrepared by: China Fangda Group Co., Ltd.
                                                                                             In RMB
             Items                  Beginning balance                     Ending balanceCurrent assets:
    Monetary capital                         25,790,604.84                          24,587,261.80
    Transactional financialassets
    Notes receivable
    Account receivable                         5,157,141.38                           5,603,561.80
    Prepayment                                   20,271.85                              122,369.00
    Interest receivable
    Dividend receivable                      39,356,000.00                          57,338,200.00
    Other receivables                       512,298,790.52                         265,169,612.63
    Inventory
    Non-current asset due in1 year
    Other current assets
    Total of current assets                      582,622,808.59                         352,821,005.23Non-current assets:
    Sellable financial assets                                                         2,198,000.00
    Investment held untilmature
    Long-term receivable
    Long-term share equity
                                             669,733,745.58                         659,733,745.58investment
    Investment real estate                  254,766,256.33                         271,841,967.35
    Fixed assets                             87,649,932.55                          57,299,884.44
                                           China Fangda Group Co., Ltd. 2012 Annual Report
    Construction in process         1,701,315.00                           298,019.24
    Engineering materials
    Disposal of fixed assets
    Productive biologicalassets
    Gas & petrol
    Intangible assets               9,352,376.54                         9,910,673.85
    R&D expense
    Goodwill
    Long-term amortizable
                                       75,471.70expenses
    Deferred income tax
                                   12,333,214.12                        14,415,297.03assets
    Other non-current assets
    Total of non-current assets      1,035,612,311.82                    1,015,697,587.49
    Total of assets                  1,618,235,120.41                    1,368,518,592.72Current liabilities
    Short-term loans             180,000,000.00                       210,000,000.00
      Transactional financialliabilities
    Notes payable
    Account payable                 1,849,090.36                         1,851,490.36
    Prepayment received              753,108.70                            693,045.60
    Employees’ wage
                                     1,479,449.88                         1,251,357.38payable
    Taxes payable                    826,456.83                            655,031.17
    Interest payable                1,954,557.27                           441,980.00
    Dividend payable
    Other payables                83,515,779.52                        66,697,963.87
    Non-current liabilitiesdue in 1 year
    Other current liabilities    200,000,000.00
    Total of current liabilities      470,378,442.56                       281,590,868.38Non-current liabilities:
    Long-term loans
    Bond payable
                                                         China Fangda Group Co., Ltd. 2012 Annual Report
    Long-term payable
    Special payables
    Anticipated liabilities
      Deferred income tax
                                                  36,210,286.40                       32,186,364.40liabilities
      Other non-currentliabilities
    Total of non-current liabilities                  36,210,286.40                       32,186,364.40
    Total liabilities                                506,588,728.96                      313,777,232.78Owners’ equity (orshareholders’ equity)
    Capital paid in (or share
                                                 756,909,905.00                      756,909,905.00capital)
    Capital reserves                             39,799,212.26                       41,078,838.54
    Less: Shares in stock
    Special reserves
    Surplus reserves                             30,494,542.94                       24,676,077.16
    Common risk provisions
    Retained profit                             284,442,731.25                      232,076,539.24
    Difference caused bytranslation of foreigncurrency statementsTotal of owners’ equity (or
                                               1,111,646,391.45                    1,054,741,359.94shareholders’ equity)Total of liability and owners’
    equity (or shareholders’                      1,618,235,120.41                    1,368,518,592.72equity)Legal representative: Xiong Jianming CFO: Lin Kebing Accounting Manager: Chen Yonggang3. Consolidated Income StatementPrepared by: China Fangda Group Co., Ltd.
                                                                                              In RMB
             Items                 Amount of the Current Term      Amount of the Previous Term
    1. Total revenue                               1,397,901,424.59                    1,348,776,366.53
    Incl. Business income                     1,397,901,424.59                    1,348,776,366.53
              Interest income
                                             China Fangda Group Co., Ltd. 2012 Annual Report
              Insurance feeearned
           Fee andcommission received
    2. Total business cost             1,402,248,272.24                    1,288,791,101.81
       Incl. Business cost         1,145,066,535.43                    1,087,992,839.87
              Interest expense
           Fee andcommission paid
            Insurancedischarge payment
              Net claimamount paid
             Net insurancepolicy reserves provided
            Insurance policydividend paid
              Reinsuranceexpenses
              Business tax and
                                     23,902,902.35                        26,747,672.42surcharge
              Sales expense          35,114,854.91                        29,317,746.35
              Administrative
                                    122,677,890.24                       105,614,972.87expense
              Financial
                                     24,771,976.76                        19,752,495.44expenses
              Asset impairment
                                     50,714,112.55                        19,365,374.86loss
      Plus: gains from change
                                     12,290,834.22                        10,815,131.20of fair value (“-“ for loss)
                Investment gains
                                       3,448,207.99                            99,342.47(“-“ for loss)
            Incl. Investmentgains from affiliates and jointventures
                Exchange gains(“-“ for loss)
    3. Operational profit (“-“ for     11,392,194.56                        70,899,738.39
                                                         China Fangda Group Co., Ltd. 2012 Annual Reportloss)
    Plus: non-operational
                                                  11,817,267.06                        11,383,948.30income
    Less: non-operational
                                                   3,662,524.43                         3,123,596.57expenditure
             Incl. Loss from
                                                     220,018.04                         2,343,990.35disposal of non-current assets
    4. Gross profit (“-“ for loss)                  19,546,937.19                        79,160,090.12
    Less: Income tax
                                                  13,103,694.81                        19,779,966.86expenses
    5. Net profit (“-“ for net loss)                 6,443,242.38                        59,380,123.26
      Including: Net profit
    realized by the entity taken                               0.00over before the takeover
    Net profit attributable to
                                                  24,948,377.20                        65,503,925.58the owners of parent company
    Minor shareholders’
                                                  -18,505,134.82                       -6,123,802.32equity
    6. Earnings per share:                       --                                   --
    (1) Basic earnings per
                                                           0.03                                  0.09share
    (2) Diluted earnings per
                                                           0.03                                  0.09share
    7. Other misc. incomes                              -179,626.28                        -1,651,220.00
    8. Total of misc. incomes                          6,263,616.10                        57,728,903.26
      Total of misc. incomes
    attributable to the owners of                     24,768,750.92                        63,852,705.58the parent company
      Total misc gains
    attributable to the minor                         -18,505,134.82                       -6,123,802.32shareholdersNet profit contributed by entities merged under common control in the report period was RMB0.Legal representative: Xiong Jianming CFO: Lin Kebing Accounting Manager: Chen Yonggang4. Income Statement of the Parent CompanyPrepared by: China Fangda Group Co., Ltd.
                                                                                              In RMB
                                                             China Fangda Group Co., Ltd. 2012 Annual Report
              Items                  Amount of the Current Term        Amount of the Previous Term
    1. Turnover                                           46,185,831.72                        44,378,065.25
       Less: Operation cost                           11,267,937.63                        11,314,912.66
            Business tax and
                                                       3,731,267.21                         3,494,969.54surcharge
            Sales expense                                -15,831.98                           609,975.58
            Administrative
                                                      20,145,309.77                        20,079,220.00expense
            Financial expenses                         5,685,040.38                         4,461,333.17
            Asset impairment
                                                        326,187.02                            427,828.17loss
      Plus: gains from change
                                                      13,791,134.22                        11,008,729.20of fair value (“-“ for loss)
             Investment gains
                                                      43,904,207.99                        57,402,644.44(“-“ for loss)
          Incl. Investmentgains from affiliates and jointventures2. Operational profit (“-“ for
                                                      62,741,263.90                        72,401,199.77loss)
    Plus: non-operational
                                                       2,164,511.06                         2,063,986.79income
    Less: non-operational
                                                        188,570.17                            475,666.63expenditure
          Incl. Loss from
                                                         61,363.27                            233,537.63disposal of non-current assets
    3. Gross profit (“-“ for loss)                      64,717,204.79                        73,989,519.93
    Less: Income tax
                                                       6,532,547.00                         5,578,528.02expenses
    4. Net profit (“-“ for net loss)                    58,184,657.79                        68,410,991.91
    5. Earnings per share:                           --                                   --
    (1) Basic earnings pershare
    (2) Diluted earnings pershare
    6. Other misc. incomes                                -1,279,626.28                        -1,651,220.00
    7. Total of misc. incomes                             56,905,031.51                        66,759,771.91
                                                      China Fangda Group Co., Ltd. 2012 Annual ReportLegal representative: Xiong Jianming CFO: Lin Kebing Accounting Manager: Chen Yonggang5. Consolidated Cash Flow StatementPrepared by: China Fangda Group Co., Ltd.
                                                                                           In RMB
            Items               Amount of the Current Term      Amount of the Previous Term1. Net cash flow frombusiness operation
    Cash received from sales
    of products and providing of                1,282,311,735.70                    1,207,779,388.52services
    Net increase of customerdeposits and capital kept forbrother company
    Net increase of loansfrom central bank
      Net increase ofinter-bank loans from otherfinancial bodies
    Cash received againstoriginal insurance contract
    Net cash received fromreinsurance business
    Net increase of clientdeposit and investment
    Net increase of tradefinancial asset disposal
    Cash received asinterest, processing fee, andcommission
      Net increase ofinter-bank fund received
    Net increase ofrepurchasing business
    Tax returned                               1,234,080.09                         2,188,518.65
    Other cash received
                                               24,427,611.05                       42,758,245.86from business operation
    Sub-total of cash inflow from               1,307,973,426.84                    1,252,726,153.03
                                          China Fangda Group Co., Ltd. 2012 Annual Reportbusiness activities
    Cash paid for purchasing
                                 951,259,916.91                     1,045,527,627.48of merchandise and services
    Net increase of clienttrade and advance
    Net increase of savingsin central bank and brothercompany
    Cash paid for originalcontract claim
    Cash paid for interest,processing fee andcommission
    Cash paid for policydividend
    Cash paid to staffs or
                                 131,600,289.66                       115,606,746.78paid for staffs
    Taxes paid                   65,938,208.39                        59,068,854.01
    Other cash paid for
                                  99,912,940.51                        89,568,420.61business activitiesSub-total of cash outflow
                                1,248,711,355.47                    1,309,771,648.88from business activitiesCash flow generated by
                                  59,262,071.37                       -57,045,495.85business operation, net2. Cash flow generated byinvestment:
    Cash received from
                                   1,500,000.00                        51,000,000.00investment recovery
    Cash received as
                                   3,448,207.99                             99,342.47investment profit
    Net cash retrieved fromdisposal of fixed assets,
                                  11,002,219.00                          5,948,411.61intangible assets, and otherlong-term assets
    Net cash received fromdisposal of subsidiaries orother operational units
    Other investment-related
                                   4,022,500.00                        29,969,683.50cash received
                                         China Fangda Group Co., Ltd. 2012 Annual ReportSub-total of cash inflow due
                                  19,972,926.99                       87,017,437.58to investment activities
    Cash paid forconstruction of fixed assets,
                                 105,572,445.60                       95,845,766.81intangible assets and otherlong-term assets
    Cash paid as investment                                          51,000,000.00
    Net increase of loanagainst pledge
    Net cash received fromsubsidiaries and otheroperational units
    Other cash paid for
                                   2,050,000.00                       18,550,000.00investment activitiesSubtotal of investment
                                 107,622,445.60                      165,395,766.81activity cash outflowsCash flow generated by
                                 -87,649,518.61                      -78,378,329.23investment activities, net3. Cash flow generated byfinancing:
    Cash received frominvestment
    Incl. Cash received asinvestment from minorshareholders
    Cash received as loans      570,368,873.33                      397,000,000.00
    Cash received from bond
                                 200,000,000.00placing
    Other financing-relatedcash receivedSubtotal of cash inflow from
                                 770,368,873.33                      397,000,000.00financing activities
    Cash to repay debts         775,500,000.00                      407,000,000.00
    Cash paid as dividend,
                                  25,336,873.47                       23,046,670.20profit, or interests
    Incl. Dividend and profitpaid by subsidiaries to minorshareholders
    Other cash paid for           1,100,000.00                           293,344.43
                                                       China Fangda Group Co., Ltd. 2012 Annual Reportfinancing activitiesSubtotal of cash outflow due
                                               801,936,873.47                      430,340,014.63to financing activitiesNet cash flow generated by
                                               -31,568,000.14                      -33,340,014.63financing4. Influence of exchange rate
    alternation on cash and cash                       -54,188.54                            62,133.34equivalents5. Net increase of cash and
                                               -60,009,635.92                     -168,701,706.37cash equivalents
    Plus: Balance of cash
    and cash equivalents at the                    300,177,008.78                      468,878,715.15beginning of term6. Balance of cash and cash
                                               240,167,372.86                      300,177,008.78equivalents at the end of termLegal representative: Xiong Jianming CFO: Lin Kebing Accounting Manager: Chen Yonggang6. Cash Flow Statement of the Parent CompanyPrepared by: China Fangda Group Co., Ltd.
                                                                                            In RMB
            Items                Amount of the Current Term      Amount of the Previous Term1. Net cash flow frombusiness operation
    Cash received from sales
    of products and providing of                    36,847,528.40                       40,782,560.14services
    Tax returned
    Other cash received
                                               538,398,509.55                      460,822,732.71from business operationSub-total of cash inflow from
                                               575,246,037.95                      501,605,292.85business activities
    Cash paid for purchasing
                                                12,764,972.21                       12,416,456.66of merchandise and services
    Cash paid to staffs or
                                                 8,821,194.92                         7,361,345.99paid for staffs
    Taxes paid                                  4,414,910.67                         4,030,680.64
    Other cash paid for                       753,501,483.51                      522,851,939.32
                                         China Fangda Group Co., Ltd. 2012 Annual Reportbusiness activitiesSub-total of cash outflow
                                779,502,561.31                       546,660,422.61from business activitiesCash flow generated by
                                -204,256,523.36                      -45,055,129.76business operation, net2. Cash flow generated byinvestment:
    Cash received from
                                    400,000.00                        20,000,000.00investment recovery
    Cash received as
                                 61,886,407.99                        44,000,944.44investment profit
    Net cash retrieved fromdisposal of fixed assets,
                                    536,535.00                               8,040.00intangible assets, and otherlong-term assets
    Net cash received fromdisposal of subsidiaries orother operational units
    Other investment-relatedcash receivedSub-total of cash inflow due
                                 62,822,942.99                        64,008,984.44to investment activities
    Cash paid forconstruction of fixed assets,
                                   4,269,332.69                         1,761,027.93intangible assets and otherlong-term assets
    Cash paid as investment     10,000,000.00                        21,000,000.00
    Net cash received fromsubsidiaries and otheroperational units
    Other cash paid forinvestment activitiesSubtotal of investment
                                 14,269,332.69                        22,761,027.93activity cash outflowsCash flow generated by
                                 48,553,610.30                        41,247,956.51investment activities, net3. Cash flow generated byfinancing:
    Cash received from
                                                            China Fangda Group Co., Ltd. 2012 Annual Reportinvestment
    Cash received as loans                        180,000,000.00                       210,000,000.00
    Cash received from bond
                                                   200,000,000.00placing
    Other financing-relatedcash receivedSubtotal of cash inflow from
                                                   380,000,000.00                       210,000,000.00financing activities
    Cash to repay debts                           210,000,000.00                       200,000,000.00
    Cash paid as dividend,
                                                    11,993,687.78                        11,858,872.50profit, or interests
    Other cash paid for
                                                     1,100,000.00                            293,344.43financing activitiesSubtotal of cash outflow due
                                                   223,093,687.78                       212,152,216.93to financing activitiesNet cash flow generated by
                                                   156,906,312.22                         -2,152,216.93financing4. Influence of exchange rate
    alternation on cash and cash                                -56.12                             -1,066.93equivalents5. Net increase of cash and
                                                     1,203,343.04                         -5,960,457.11cash equivalents
    Plus: Balance of cash
    and cash equivalents at the                         24,337,261.80                        30,297,718.91beginning of term6. Balance of cash and cash
                                                    25,540,604.84                        24,337,261.80equivalents at the end of term
    Legal representative: Xiong Jianming CFO: Lin Kebing           Accounting Manager: Chen Yonggang7. Statement of Change in Owners’ Equity (Consolidated)Prepared by: China Fangda Group Co., Ltd.Amount of the Current Term
                                                                                                 In RMB
                                                 Amount of the Current Term
                              Owners’ Equity Attributable to the Parent Company
                                                                             Minor Total of
         Items
                           Capita Capita Less: Speci Surpl Com Retain Other shareho owners’
                           l paid   l    Share al     us   mon  ed      s    lders’ equity
                                                         China Fangda Group Co., Ltd. 2012 Annual Report
                           in (or reserv s in reserv reserv risk profit             equity
                           share es stock es           es provis
                           capita                           ions
                             l)
                         756,9 80,47                 24,67          211,7                   1,152,0
    1. Balance at the end of                                                           78,213,
                         09,90 9,493.               6,077.          77,96                  57,110.5
    last year                                                                           665.93
                          5.00     92                   16           8.57                         8
    Plus: Change ofaccounting policy
          Correcting ofprevious errors
            Others
    2. Balance at the          756,9 80,47               24,67          211,7                   1,152,0
                                                                                   78,213,
    beginning of current       09,90 9,493.             6,077.          77,96                  57,110.5
                                                                                    665.93
    year                        5.00     92                 16           8.57                         8
    3. Amount of change in                              5,818,         19,12
                                 -179,6                                            -18,505 6,263,6
    current term (“-“ for                              465.7         9,911.
                                  26.28                                            ,134.82 16.10
    decrease)                                                8            42
                                                                    24,94
                                                                                   -18,505 6,443,2
    (1) Net profit                                                     8,377.
                                                                                   ,134.82 42.38
                                                                       20
                                 -179,6                                                       -179,62(2) Other misc. income
                                  26.28                                                          6.28
                                                                    24,94
                                 -179,6                                            -18,505 6,263,6
    Total of (1) and (2)                                               8,377.
                                  26.28                                            ,134.82 16.10
                                                                       20(3) Investment ordecreasing of capital byowners1. Capital input byowners2. Amount of sharespaid and accounted asowners’ equity3. Others
                                                    5,818,         -5,818
    (4) Profit allotment                                 465.7         ,465.7
                                                         8              8
    1. Providing of surplus                             5,818,         -5,818
    reserves                                             465.7         ,465.7
                                                             China Fangda Group Co., Ltd. 2012 Annual Report
                                                              8              82. Common riskprovision3. Allotment to theowners (orshareholders)4. Others(5) Internal transferringof owners’ equity1. Capitalizing ofcapital reserves (or tocapital shares)2. Capitalizing ofsurplus reserves (or tocapital shares)3. Making up losses bysurplus reserves4. Others(6) Special reserves1. Provided this year2. Used this term(7) Others
                         756,9 80,29                      30,49         230,9                  1,158,3
    4. Balance at the end of                                                               59,708,
                         09,90 9,867.                    4,542.         07,87                  20,726.
    this term                                                                               531.11
                          5.00     64                        94          9.99                       68Amount of Last Year
                                                                                                  In RMB
                                                       Amount of Last Year
                              Owners’ Equity Attributable to the Parent Company
                            Capita                                                  Minor
                                                                 Com                        Total of
            Items           l paid Capita   Less: Speci Surpl                      shareho
                                                                 mon Retain
                            in (or   l      Share al       us                 Other lders’ owners’
                                                                 risk   ed                   equity
                            share reserv     s in reserv reserv                 s   equity
                                                                provis profit
                            capita es       stock es       es
                                                                 ions
                               l)
                         504,6 334,4                      17,83         153,1                  1,094,3
    1. Balance at the end of                                                               84,337,
                         06,60 34,01                     4,977.         15,14                  28,207.
    last year                                                                               468.25
                          4.00 4.92                          97          2.18                       32
                                             China Fangda Group Co., Ltd. 2012 Annual Report
    Plus:Retrospectiveadjustment caused bymerger of entities undercommon control
    Plus: Change ofaccounting policy
          Correcting ofprevious errors
            Others
    2. Balance at the          504,6 334,4    17,83         153,1                  1,094,3
                                                                       84,337,
    beginning of current       06,60 34,01   4,977.         15,14                  28,207.
                                                                        468.25
    year                        4.00 4.92        97          2.18                       32
    3. Amount of change in 252,3 -253,9      6,841,         58,66
                                                                        -6,123, 57,728,
    current term (“-“ for 03,30 54,52       099.1        2,826.
                                                                        802.32 903.26
    decrease)                1.00 1.00            9            39
                                                        65,50
                                                                        -6,123, 59,380,
    (1) Net profit                                         3,925.
                                                                        802.32 123.26
                                                           58
                                -1,651
                                                                                 -1,651,2
    (2) Other misc. income          ,220.0
                                                                                    20.00
                                     0
                                -1,651                  65,50
                                                                        -6,123, 57,728,
    Total of (1) and (2)            ,220.0                 3,925.
                                                                        802.32 903.26
                                     0                     58(3) Investment ordecreasing of capital byowners1. Capital input byowners2. Amount of sharespaid and accounted asowners’ equity3. Others
                                         6,841,        -6,841
    (4) Profit allotment                      099.1        ,099.1
                                              9             9
                                         6,841,        -6,8411. Providing of surplus
                                          099.1        ,099.1reserves
                                              9             9
                                                         China Fangda Group Co., Ltd. 2012 Annual Report2. Common riskprovision3. Allotment to theowners (orshareholders)4. Others
                          252,3 -252,3(5) Internal transferring
                          03,30 03,30of owners’ equity
                           1.00 1.00
    1. Capitalizing of        252,3 -252,3
    capital reserves (or to   03,30 03,30
    capital shares)            1.00 1.002. Capitalizing ofsurplus reserves (or tocapital shares)3. Making up losses bysurplus reserves4. Others(6) Special reserves1. Provided this year2. Used this term(7) Others
                         756,9 80,47                 24,67          211,7                   1,152,0
    4. Balance at the end of                                                           78,213,
                         09,90 9,493.               6,077.          77,96                  57,110.5
    this term                                                                           665.93
                          5.00     92                   16           8.57                         8Legal representative: Xiong Jianming CFO: Lin Kebing Accounting Manager: Chen Yonggang8. Statement of Change in Owners’ Equity (Parent Company)Prepared by: China Fangda Group Co., Ltd.Amount of the Current Term
                                                                                              In RMB
                                               Amount of the Current Term
                          Capital
                                                                       Commo
            Items         paid in             Less:                                      Total of
                                    Capital           Special Surplus n risk Retaine
                            (or              Shares                                      owners’
                                   reserves          reserves reserves provisio d profit
                           share            in stock                                      equity
                                                                          ns
                          capital)
                                              China Fangda Group Co., Ltd. 2012 Annual Report
                                                                                 1,054,7
    1. Balance at the end of    756,909 41,078,         24,676,             232,076
                                                                                 41,359.
    last year                    ,905.00 838.54          077.16              ,539.24
                                                                                      94
    Plus: Change ofaccounting policy
          Correcting ofprevious errors
            Others
    2. Balance at the                                                                1,054,7
                            756,909 41,078,         24,676,             232,076
    beginning of current                                                             41,359.
                             ,905.00 838.54          077.16              ,539.24
    year                                                                                  943. Amount of change in
                                   -1,279,6         5,818,4              52,366, 56,905,current term (“-“ for
                                      26.28           65.78               192.01 031.51decrease)
                                                                         58,184, 58,184,(1) Net profit
                                                                          657.79 657.79
                                   -1,279,6                                        -1,279,6(2) Other misc. income
                                      26.28                                           26.28
                                   -1,279,6                              58,184, 56,905,Total of (1) and (2)
                                      26.28                               657.79 031.51(3) Investment ordecreasing of capital byowners1. Capital input byowners2. Amount of shares paidand accounted asowners’ equity3. Others
                                                    5,818,4             -5,818,4(4) Profit allotment
                                                      65.78                65.78
    1. Providing of surplus                             5,818,4             -5,818,4
    reserves                                              65.78                65.782. Common riskprovision3. Allotment to theowners (or shareholders)4. Others(5) Internal transferring
                                                            China Fangda Group Co., Ltd. 2012 Annual Reportof owners’ equity1. Capitalizing of capitalreserves (or to capitalshares)2. Capitalizing ofsurplus reserves (or tocapital shares)3. Making up losses bysurplus reserves4. Others(6) Special reserves1. Provided this year2. Used this term(7) Others
                                                                                               1,111,64
    4. Balance at the end of     756,909 39,799,                      30,494,             284,442
                                                                                                6,391.4
    this term                     ,905.00 212.26                       542.94              ,731.25
                                                                                                      5Amount of Last Year
                                                                                                 In RMB
                                                      Amount of Last Year
                             Capital
                                                                          Commo
            Items            paid in             Less:                                      Total of
                                       Capital           Special Surplus n risk Retaine
                               (or              Shares                                      owners’
                                      reserves          reserves reserves provisio d profit
                              share            in stock                                      equity
                                                                             ns
                             capital)
    1. Balance at the end of     504,606 295,033                      17,834,             170,506 987,981
    last year                     ,604.00 ,359.54                      977.97              ,646.52 ,588.03
    Plus: Change ofaccounting policy
          Correcting ofprevious errors
            Others
    2. Balance at the         504,606 295,033                         17,834,             170,506 987,981
    beginning of current year ,604.00 ,359.54                          977.97              ,646.52 ,588.03
    3. Amount of change in                -253,95
                             252,303                              6,841,0              61,569, 66,759,
    current term (“-“ for               4,521.0
                              ,301.00                               99.19               892.72 771.91
    decrease)                                   0
    (1) Net profit                                                                         68,410, 68,410,
                                                China Fangda Group Co., Ltd. 2012 Annual Report
                                                                           991.91 991.91
                                     -1,651,2                                        -1,651,2(2) Other misc. income
                                        20.00                                           20.00
                                     -1,651,2                              68,410, 66,759,Total of (1) and (2)
                                        20.00                               991.91 771.91(3) Investment ordecreasing of capital byowners1. Capital input byowners2. Amount of shares paidand accounted asowners’ equity3. Others
                                                      6,841,0             -6,841,0(4) Profit allotment
                                                        99.19                99.19
    1. Providing of surplus                               6,841,0             -6,841,0
    reserves                                                99.19                99.192. Common riskprovision3. Allotment to theowners (or shareholders)4. Others
                                      -252,30
    (5) Internal transferring    252,303
                                      3,301.0
    of owners’ equity            ,301.00
                                            0
    1. Capitalizing of capital          -252,30
                           252,303
    reserves (or to capital             3,301.0
                            ,301.00
    shares)                                   02. Capitalizing of surplusreserves (or to capitalshares)3. Making up losses bysurplus reserves4. Others(6) Special reserves1. Provided this year2. Used this term
                                                         China Fangda Group Co., Ltd. 2012 Annual Report(7) Others
                                                                                            1,054,7
    4. Balance at the end of   756,909 41,078,                     24,676,             232,076
                                                                                            41,359.
    this term                   ,905.00 838.54                      077.16              ,539.24
                                                                                                 94Legal representative: Xiong Jianming CFO: Lin Kebing Accounting Manager: Chen YonggangIII. General InformationChina Fangda Group Co., Ltd. (the “Company” or the “Group”) is a joint stock company registeredin Shenzhen, Guangdong and was approved by the Government of Shenzhen with Document 深府办函(1995)194号, and was founded, on the basis of Shenzhen Fangda Construction Material Co.,Ltd., by way of share issuing in October 1995. The Registration No. of the Company’s businesslicense is: 440301501124785; registered address: Fangda Building, Kejinan Road 12, High-techZone, Shenzhen. Mr. Xiong Jianming is the legal representative.The Company issued foreign currency shares (B shares) and local currency shares (A shares) andlisted 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, theCompany was re-registered to a Sino-foreign joint venture. Registration routines were completedwith Shenzhen Commerce and Industry Administration on November 12, 1997. In October 1999,the Company started to use the current name.The “profit distribution and capitalizing plan 2010" was adopted on the Shareholders’ AnnualMeeting 2010. Which was: basing on the total capital shares of 504,606,604 shares, 5 bonus sharewas added to each 10 shares to all shareholders, totally 252,303,301 shares was capitalized withface value of RMB1. In May 2011, the Company’s registered capital was changed toRMB756,909,905.The Company has established a corporate governance structure that comprises shareholders’meeting, board of directors and supervisory committee. Currently, the Company sets up thePresident Office, Administrative Department, HR Department, Enterprise Management Department,Financial Department, Audit and Supervisory Department, Securities Department, TechnologyDepartment and IT Department and has established subsidiaries including Fangda Decoration,Fangda Automatic, Fangda New Material, Shenyang Fangda and Fangda Property.The business scope includes new-type building materials, composite materials, metal wares, metal
    frames,      environmental     equipment     and     apparatus,     fire    fighting   equipment,optical-mechanical-electrical integrated products, polymer materials and their products, finechemical products, mechanical equipment, optical materials and devices, electronic displayer,audio-visual device, transport facilities (exclude restricted items and produces under exportcertification, and their design, developing, installation, construction, technical consulting, andtraining. Managing and leasing of properties under possession (Fangda Building at Ke-Ji-Nan Road12, and Fangda Town at Longzhu Road 4), parking services of Fangda Building.
                                                            China Fangda Group Co., Ltd. 2012 Annual ReportIV. Main Accounting Policies, Estimations and Retrospection of Previous Accounting Errors(I) Basis for the preparation of financial statementsThe financial statements have been prepared in accordance with the Enterprise Accounting Standard– Basic Standards and 38 specific accounting principles issued in February 2006 by the Ministry ofFinance and its application guide, interpretation and other related provision (collectively “EnterpriseAccounting Standards”). The Company has also disclosed related financial information according tothe requirement of the Regulations of Information Disclosure No.15 – General Provisions forFinancial Statements (Revised in 2010) issued by the CSRC.Except for subsidiaries that have stopped operating, the financial statements are prepared on thebasis of continuous operation. The financial statements for subsidiaries that have stopped operating(Shenyang Fangda, Fangda Aluminum and Fang Yide) are prepared on the basis of discontinuousoperation.The Company's audit is based on the accrual basis. Except for some financial entrustments andproperty held for investment, the financial statements are prepared based on historical costs. In caseof any asset impairment, the impairment provision will be made as required.(II). Statement of compliance to the Enterprise Accounting StandardThe financial report and statements are prepared with compliance to the requirement of theEnterprise Accounting Standard. They reflect the financial position as of December 31, 2012, andbusiness performance and cash flow situation in Year 2012 of the Company frankly and completely.(III). Fiscal PeriodThe fiscal year of the Group is the solar calendar year, that is from January 1 to December 31.(IV). Bookkeeping standard moneyThe Company takes RMB as the standard currency for bookkeeping.(V). Accounting treatment of the entities under common and different control(1) Consolidation of entities under common controlAssets and liabilities obtained by the merging party are calculated at their book value with themerged parties at the merger day in addition to the adjustment made given the difference inaccounting policies. The differences between the book value of net assets and the book value ofconsideration price (or the total of face value of share issued) are adjusted to the capital reserve(share capital premium). If the share capital premium is not enough to offset the difference, it willbe adjusted to the retained gains.The direct expenses arising from the merger are included in profits and losses in the current period.
                                                            China Fangda Group Co., Ltd. 2012 Annual Report(2) Consolidation of entities under different controlFor 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 atthe day of acquisition. On the acquisition day, the assets and liabilities (if any) acquired by theCompany from the acquired party are recognized on the fair value.Agency expenses and other administrative expenses such as auditing, legal consulting, or appraisalservices occurred relating to the merger of entities are accounted into current income account whenoccurred. The transaction fees of equity certificates or liability certificates issued by the purchaserfor payment for the acquisition are accounted at the initial amount of the certificates.If the merger costs exceed the fair value of the recognizable net assets of the acquired party in themerger, it is recognized as goodwill and measured based the costs after the accumulativeimpairment provision is deducted; if the fair value exceeds the costs, it is included in the incomestatement for the period after being re-examined.(VI). Preparation of Consolidated Financial Statements(1) Preparation of Consolidated Financial StatementsThe consolidation scope for the consolidated financial statements includes the Company and allsubsidiaries.The consolidated financial statements are prepared by the Company based on financial statementsof the Company and subsidiaries and according to other related information and adjusted aslong-term equity investment of subsidiaries through the equity method. During preparation ofconsolidated financial statements, the accounting policies and period of the Company andsubsidiaries must be the same. Major transactions and balances between companies are offset.The part of the shareholders’ equity in subsidiaries not owned the Company is separately listedunder the shareholders’ equity as minority shareholders’ equity in the consolidated balance sheet.The part of the subsidiaries’ net profits and losses for the current period that belongs to minorityshareholders is listed as minority shareholders’ profits and losses under net profit in theconsolidated income statement. If the losses of subsidiaries shared by the minority shareholdersexceed the part of the owners’ equity of the subsidiaries at the beginning of the period, theexcessive part will offset the minority shareholders’ equity.(2) Accounting methods for the share equity of the same subsidiary purchased and sold in twoconsecutive accounting years(VII) Recognition of cash and cash equivalentsCash refers to cash on hand and deposits that can be used at any time for payment. Cash equivalentrefers to the investments with short term, strong liquidity and small risk of value fluctuation that areheld by the Company and easily converted into cash with known amount.
                                                            China Fangda Group Co., Ltd. 2012 Annual Report(VIII) Foreign exchange business and foreign exchange statement translation(1) Foreign currenciesTrades of the Company made in foreign currencies are translated into RMB basing on the spotexchange rate on the date when the trade is conducted.At the balance sheet date, foreign currency items are translated on the spot exchange rate of thebalance sheet date. The exchange differences caused by the difference in exchange rates on thebalance sheet date and initial recognizing date or previous balance sheet date are included in thecurrent profits and losses. Non-monetary items accounted in foreign currency and on historical costsare exchanged with the spot exchange rate on the transaction date.(2) Translation of foreign exchange statement(IX) Financial instrumentFinancial instrument refers to a company’s financial assets and contracts that form other units offinancial liabilities or equity instruments.(1) Classification of financial instrumentsFinancial assets are categorized as: financial assets measured at fair value with variations accountedinto current income account, loans, account receivables and disposable financial assets.Financial assets measured at fair value with variations accounted into current income accountIt includes transactional financial assets and financial assets measured by fair value and withvariations accounted into current gain/loss account at initial recognition. The financial assets arefurther measured by fair value with the gain/loss created by variations in fair value and relateddividends and interest accounted into the current gain/loss account.ReceivablesReceivables refer to non-derivative financial assets without quotations but with fixed recoverableamount or can be confirmed, including receivable accounts and other receivables. Receivablesadopt the effective interest method and are further measured by amortized cost. Gain/loss generatedat final recognition, impairment or amortization is accounted into the current gain/loss account.Sellable financial assetsSellable financial asset refers to those sellable non-derivate financial assets recognized initially andfinancial assets other than the above-mentioned types of financial assets. Sellable financial assetsare further measured by fair value and the premium/discount is amortized by the effective interestmethod and recognized as interest income. Other than the exchange difference of impairment lossand foreign exchange monetary financial assets, which is recognized as current gain and loss, thevariations in fair value of sellable financial assets is recognized as other comprehensive gain and
                                                              China Fangda Group Co., Ltd. 2012 Annual Reportaccounted in capital reserve. When it is derecognized and transferred out, it is accounted into thecurrent gain/loss account. Dividends and interest income related to sellable financial assets areaccounted into the current gain/loss account.The Company’s financial liabilities are mainly other financial liabilities Other financial liabilitiesadopt the effective interest method and are further measured by amortized cost. Gain/loss generatedat final recognition or amortization is accounted into the current gain/loss account.(2) Recognition and measurement of financial instrumentsThe Company recognizes a financial asset or liability when it becomes one party in the financialinstrument contract.Financial asset is derecognized when:(1) The contractual right to receive the cash flows of the financial assets is terminated;(2) The financial asset is transferred and meets the following de-recognition condition.Financial asset transactions in regular ways are recognized and de-recognized on the transactiondate.Financial assets are measured at the fair value at the initial recognition. For financial assetsmeasured at fair value with variations accounted into current income account, related transactionexpenses are accounted into the current income. For other financial assets, the related transactionexpenses are accounted into the initial recognized amounts.(3) Recognition and measurement of financial assets transferThe transfer of financial assets refers to transferring or delivering the financial assets to anotherparty (receiver) other than the issuing party of the financial assets.Recognition of the financial asset is terminated as soon as all of the risks and rewards attached tothe financial asset have been transferred to the receiver. Whereas if all of the risks and rewardsattached to the financial assets are reserved, recognition of the financial asset shall not beterminated.When the Company neither transfers nor reserve almost all risks and rewards attached to thefinancial assets, it will be handled as: When the controlling power over the financial asset is givenup, the financial assets will be derecognized and the generated assets and liabilities will berecognized; when the controlling power is not given up, financial asset and related liability shall berecognized according to the extend the Company is involving in the financial asset.(4) De-recognition conditions of financial liabilitiesWhen partial or all of the current responsibilities attached to such financial liabilities, the partial or
                                                              China Fangda Group Co., Ltd. 2012 Annual Reportall of the financial liabilities are derecognized. When the Company (debtor) and creditor enter intoan agreement to replace the existing financial liabilities by undertaking new financial liabilities andthe contract terms for the new financial liabilities are essentially different from those for theexisting one, the existing financial liabilities will be derecognized and new financial liabilities willbe recognized.(5) Recognition of fair value of financial assets and liabilitiesFor financial assets in an active market, the Company uses the prevailing quotations or askingprices to determine the fair value.If there is no active market, the Company uses evaluation techniques to determine the fair value.The results derived from the adoption of valuation technologies reflect the trading prices that maybe adopted in arm’s length basis transactions on the valuation date. Valuation techniques includeusing recent arm’s length market transactions between knowledgeable, willing parties, if available,reference to the current fair value of another instrument that is substantially the same, a discountedcash flow analysis and option pricing models.The Company has adopted valuation techniques that have been widely accepted by marketparticipants and proven reliable by previous effective transaction prices. When using valuationtechniques to determine financial instruments’ fair value, the Company has managed to use allmarket parameters that market participants would consider during financial instrument pricing andtransaction prices observable in the current market for same financial instruments to examine theeffectiveness of the valuation techniques.(6) Impairment test and provision of financial assets (excluding receivables)The Company checks the book value of financial assets on the balance sheet date. Impairmentprovision will be made in case of objective evidence proving impairment to the financial assets.Objective evidence proving impairment to the financial assets refers to events actually occur afterthe initial recognition of financial assets, with influence on the estimated future cash flows of thefinancial assets and can be reliably measured by the Company.Financial assets measured at amortized costIf there is objective evidence proving impairment to the financial assets, the book value of thefinancial assets will be written down to the present value of the estimated future cash flow(excluding undiscovered future credit loss). The write-down amount is accounted into the currentgain/loss account. The present value of the estimated future cash flow is determined by the originaleffective discount rate with the value of the guarantee considered.Conduct impairment test separately for major financial assets. If there is objective evidencesuggesting impairment, determine the impairment loss and account it into the current gain/lossaccount. Conduct impairment test for other financial assets including financial assets combinationwith similar credit risk features. Test financial assets without impairment separately (includingmajor and minor financial assets) and conduct impairment test in the financial assets combination
                                                           China Fangda Group Co., Ltd. 2012 Annual Reportwith similar credit risk features. Conduct impairment test for financial assets separately recognizedas impaired excluding financial assets combination with similar credit risk features.After the Company recognizes impair loss to financial assets measured by amortized cost, if there isobject evidence suggesting that the value of the financial assets is restored objectively due to anevent after the loss, the recognized impairment loss can be reversed and accounted into the currentgain/loss account. The book value after the reversal must not exceed the amortized cost of thefinancial assets on the reversal date assuming that no impairment provision was made.Sellable financial assetsIf there is objective evidence suggesting impairment to the financial assets, the accumulative lossgenerated by the decrease in the fair value that has been directed accounted into capital reserveshould be transferred out and accounted into the current gain/loss account. The transferredaccumulative loss is the balance of the initial acquisition cost of the sellable financial assets afterthe recovered principal and amortized amount, current fair value and impair loss that has beenaccounted into the gain/loss account are deducted.For the sellable debt instruments recognized as impaired, if the fair value increases in the followingaccounting period objectively due to an event after the original impair loss is recognized, theimpairment loss will be reversed and accounted into the current gain/loss account. Impairment lossincurred in investment of sellable equity instrument is not reversed through the gain/loss account.Financial assets measured at costIf there is no quotation in an active market and its fair value cannot be measured reliably or thederivative financial assets that linked to the equity instrument and can only settled by delivering theequity instrument is impaired, the difference between the book value of the financial assets and thecurrent value recognized by discounting the future cash flow against the market yield of similarfinancial assets in the current market is recognized as the impairment loss and accounted into thecurrent gain/loss account. The impairment loss cannot be reversed after being recognized.(7) The basis of reclassifying the immature investment held until maturity as sellable financialassets, indicating changes in the intention or capability of holding the investment10. Recognition standard and provision method for receivable bad debt provisionReceivables include receivable accounts, other receivables and prepayment.The Company divides receivable accounts into project receivables and product receivables. Projectreceivables are those recognized at percentage according to the construction contract, productreceivables are those formed in other ways.(1) Receivables with major individual amount and bad debt provision provided individually
    Judging basis or standard of major individual         For the current year, the Company recognizes
    amount                                                project receivables over RMB8 million
                                                            China Fangda Group Co., Ltd. 2012 Annual Report
                                                      (inclusive) as “individual receivable with
                                                      large amount” while recognizes product
                                                      receivables over RMB2 million (included) as
                                                      “individual receivable with large amount” and
                                                      other receivables over RMB1 million
                                                      (included) as “individual receivable with large
                                                      amount”.
                                                   The Company performs impairment
                                                   examination individually on each large
                                                   amount receivables, and recognizesProvision method for account receivable with major
                                                   impairment and provides bad debt provisionindividual amount and bad debt provision provided
                                                   when the impairment is recognized based onindividually
                                                   objective evidence. Those not impaired are
                                                   accounted along with the minor amount
                                                   receivables and recognized in risk groups.(2) Recognition and providing of bad debt provisions on groups
            Group            Providing method                        Grouping basis
    Account age                 Aging method           Account ageReceivable accounts
                            Other method           Consolidation scopeconsolidatedReceivables adopting the aging method in the group√ Applicable □ Inapplicable
                            Providing rate for receivable
            Age                                              Providing rate for other receivables %
                                    account %
    Within 1 year (inclusive)                              3%                                             3%
    1-2 years                                             10%                                           10%
    2-3 years                                             30%                                           30%
    Over 3 years                                          50%                                           50%
    3-4 years                                             50%                                           50%
    4-5 years                                             50%                                           50%
    Over 5 years                                          50%                                           50%Receivables adopting the balance percentage method in the group□ Applicable √ InapplicableReceivables adopting other methods in the group√ Applicable □ Inapplicable
                    Group                                           Method
    Receivable accounts consolidated           Individual recognition method
                                                             China Fangda Group Co., Ltd. 2012 Annual Report(3) Account receivable with minor individual amount and bad debt provision provided individuallyReasons for separate bad debt
                                      Long account age or deterioration of customer creditabilityprovision
                                      According to the difference between the present value of futureMethod of bad debt provision
                                      cash flow and the book value(XI) Inventories(1) Classification of inventoriesThe Company’s inventories include purchased materials, raw materials, low-value consumables,OEM materials, products in process, semi-finished goods, finished goods, agency goods, andconstruction in process.(2) Pricing of delivering inventoryWeighted average methodInventories are measured at cost when procured. Raw materials, products in process, commoditystocks and goods shipped in transit are measured by the weighted average method.Construction contracts are measured by the effective cost, including direct and indirect expensesgenerated before the contracts are fulfilled. Costs generated and recognized accumulatively byconstruction in process and settled payment are listed in the balance sheet as offset net amounts.The excessive part of the sum of the generated costs and recognized gross profit (loss) over thesettled payment is listed inventories; the excessive part of the settled payment over the sum of thegenerated costs and recognized gross profit (loss) is listed as the prepayment received.Travel and bidding expenses generated by execution of contracts, if they can be separated andreliably measured and it is likely to enter into contracts, are accounted as the contract cost when thecontracts are entered into; or into the current gain/loss account if the conditions are not met.(3) Recognition of inventory realizable value and providing of impairment provisionOn the balance sheet date, inventories are accounted depending on which is lower between the costand the net realizable value. If the cost is higher than the net realizable value, the impairmentprovision will be made.At overall verification of inventories at the end of year, when the net realizable value is lower thanthe cost, provisions for impairment of inventories shall be drawn. Provisions for impairment ofinventories shall be accounted according to the difference between the cost of individual inventoryitems and the net realizable value.The Company generally made inventory impairment provision individually or by categories.Including: for inventories such as finished products or materials which will be directly sold, in the
                                                           China Fangda Group Co., Ltd. 2012 Annual Reportnormal operation, the realizable net value will be the balance of estimated selling price less salesexpenses and relative taxations; For those inventories need further processing, in the normaloperation, the realizable net value will be the balance of estimated sales price less costs to make itfinished, 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 thosewithout contract prices. Inventories with similar purpose or final use, produced and to be sold in thesame district and cannot be separated for valuation will be provided together; inventory of a largequantity and with low prices are provided by categories. On the balance sheet day, if the influenceof the inventory value write-down has disappeared, the impairment provision will be reversedwithin the provided amount.(4) Inventory systemPerpetual inventory systemThe Company uses perpetual inventory system.(5) Amortizing of low-value consumables and packaging materialsLow price consumableOnce-off amortization basisLow-value consumables are amortized on on-off amortization basis at using.PackageOn-off amortization basisPackages are amortized on on-off amortization basis at using.(XII) Long-term share equity investment(1) Recognition of initial investment costsAll the long-term share equity investments of the Company are the investment in subsidiaries:Investment of the Company in subsidiaries is valued at investment costs. For long-term share equityinvestment formed by shareholding and merger. Retrospective or retrieved investment is adjusted tothe cost of long term equity investment.(2) Subsequent measurement and recognition of gain/lossThe Company uses cost basis in subsequent measurement of investment in subsidiaries, andadjusted on equity basis when preparing the consolidated financial statement. For the long-termequity investment measured on the cost basis, except for the announced cash dividend or profitincluded in the practical cost or price when the investment was made, the cash dividends or profitdistributed by the invested entity are recognized as investment gains in the current gain/lossaccount.
                                                          China Fangda Group Co., Ltd. 2012 Annual Report(3) Basis for recognition of common control and major influence on invested entities(4) Impairment examination and providing of impairment provisionThe Company judges whether there is a sign of impairment to assets on the balance sheet day. Ifsuch sign exists, the Company estimates the recoverable amount and conducts the impairment test.Impairment test is conducted annually for goodwill generated by mergers and intangible assets thathave not reached the useful condition no matter whether the impairment sign exists.The recoverable amount is determined by the higher of the net of fair value minus disposal expenseand the present value of the predicted future cash flow. The Company estimates the recoverableamount on the individual asset item basis; whether it is hard to estimate the recoverable amount onthe individual asset item basis, determine the recoverable amount based on the asset group that theassets belong to. The assets group is determined by whether the main cash flow generated by thegroup is independent from those generated by other assets or assets groups.When the recoverable amount of the assets or assets group is lower than its book value, theCompany writes down the book value to the recoverable amount, the write-down amount isaccounted into the current income account and the assets impairment provision is made.For goodwill impairment test, the book value of goodwill generated by mergers is amortizedthrough reasonable measures since the purchase day to related asset groups; those cannot beamortized to related assets groups are amortized to related combination of asset groups. The relatedasset groups or combination of asset groups refer to those that can benefit from the synergisticeffect of mergers and must not exceed to the reporting range determined by the Company.When the impairment test is conducted, if there is sign of impairment to the asset group orcombination of asset groups related to goodwill, first perform impair test for asset group orcombination of asset groups without goodwill and calculate the recoverable amount and recognizethe related impairment loss. Then conduct impairment test on those with goodwill, compare thebook value with recoverable amount. If the recoverable amount is lower than the book value,recognize the impairment loss of the goodwill.Once recognized, the asset impairment loss cannot be written back in subsequent accounting period.(XIII) Investment real estatesInvestment real estates are held for rent or capital appreciation, or both. The Company’s investmentreal estates include land use right, land use right held for appreciation and transfer and leasedbuildings.For investment real estates with an active real estate transaction market and the Company canobtain market price and other information of same or similar real estates to reasonably estimate theinvestment real estates’ fair value, the Company will use the fair value mode to measure theinvestment real estates subsequently. Variations in fair value are accounted into the currentgain/loss account.
                                                             China Fangda Group Co., Ltd. 2012 Annual ReportThe fair value of investment real estates is determined with reference to the current market prices ofsame or similar real estates in active markets; when no such price is available, with reference to therecent transaction prices and consideration of factors including transaction background, date anddistrict to reasonably estimate the fair value; or based on the estimated lease gains and present valueof related cash flows.For an investment real estate whose fair value is proven unable to be obtained continuously andreliably by objective evidence, the real estate will be measured at cost basis until it is disposed andno residual value remains as assumed.The difference of the proceeds from sales, transfer, retirement or destruction of investment realestates with book value and related taxes deducted is accounted into the current gain/loss account.(XIV) Fixed assets(1) Conditions for fixed asset recognitionFixed assets is defined as the tangible assets which are held for the purpose of producing goods,providing services, lease or for operation & management, and have more than one accounting yearof service life. The fixed assets can only be recognized hen economic interests related to the fixedassets are very likely to flow into the company and the costs of the fixed assets can be reliablymeasured. The Company measures fixed assets at the actual costs when the fixed assets are obtained(3) Recognition and pricing of financing leased fixed assetsThe Company measures the leased assets as the lower of the fair value and the present value ofminimum lease payment of the leased assets on the starting date of the lease and records theminimum lease payment as long-term payable and the difference between the two as unrecognizedfinancing expense. The initial direct expense is accounted into asset value. Unrecognized financialcost is recognized as financial cost at actual interest basis to the periods of the leasing period. TheCompany adopts the depreciation policy same as the self-owned fixed assets to made provision fordepreciation of leased assets.(3) Depreciation of fixed assetsThe Company adopts the straight age average basis to make depreciation provision. The Companywill start to make the depreciation provision when the fixed assets reach the preset serviceablecondition and stop to make the depreciation provision when it is derecognized or categorized asnon-current assets held for sales. Without considering depreciation provision, the Companydetermines annual depreciation rates for various fixed assets according to types, predicted servicelife and residual value:
           Type              Useful year (year)       Residual rate %      Annual depreciation rate %
    Houses & buildings                             45                    10%                               2%
                                                             China Fangda Group Co., Ltd. 2012 Annual Report
    Equipment & machinery                          10                    10%                               9%
    Electronic equipment                            5                    10%                             18%
    Transport equipment                             5                    10%                             18%(4) Impair test and impairment provision for fixed assetsThe Company judges whether there is a sign of impairment to assets on the balance sheet day. Ifsuch sign exists, the Company estimates the recoverable amount and conducts the impairment test.Impairment test is conducted annually for goodwill generated by mergers and intangible assets thathave not reached the useful condition no matter whether the impairment sign exists.The recoverable amount is determined by the higher of the net of fair value minus disposal expenseand the present value of the predicted future cash flow. The Company estimates the recoverableamount on the individual asset item basis; whether it is hard to estimate the recoverable amount onthe individual asset item basis, determine the recoverable amount based on the asset group that theassets belong to. The assets group is determined by whether the main cash flow generated by thegroup is independent from those generated by other assets or assets groups.When the recoverable amount of the assets or assets group is lower than its book value, theCompany writes down the book value to the recoverable amount, the write-down amount isaccounted into the current income account and the assets impairment provision is made.For goodwill impairment test, the book value of goodwill generated by mergers is amortizedthrough reasonable measures since the purchase day to related asset groups; those cannot beamortized to related assets groups are amortized to related combination of asset groups. The relatedasset groups or combination of asset groups refer to those that can benefit from the synergisticeffect of mergers and must not exceed to the reporting range determined by the Company.When the impairment test is conducted, if there is sign of impairment to the asset group orcombination of asset groups related to goodwill, first perform impair test for asset group orcombination of asset groups without goodwill and calculate the recoverable amount and recognizethe related impairment loss. Then conduct impairment test on those with goodwill, compare thebook value with recoverable amount. If the recoverable amount is lower than the book value,recognize the impairment loss of the goodwill.Once recognized, the asset impairment loss cannot be written back in subsequent accounting period.(5) OthersFor fixed assets for which depreciation provision is made, the depreciation rate will be determinedafter the accumulative depreciation provision amount is deducted.At end of each fiscal year, verification will be made on the useful life, predicted retained value, anddepreciation basis.The useful life will be adjusted if the useful life is different from the predicted one; the net residual
                                                            China Fangda Group Co., Ltd. 2012 Annual Reportvalue will be adjusted if the net residual value is different from the predicted one.Overhaul cost generated by regular examination on fixed assets is recognized as fixed assets costswhen there is evidence proving that it meets fix assets recognition conditions. If not, it will beaccounted into the current gain/loss account. Depreciation provision will be made for fixed assetsbetween two regular overhauls.(XV) Construction in process(1) Categories of construction in process(2) Standard and timing for transferring construction in process into fixed assetsConstruction in process will be transferred to fixed assets when it reaches the preset servicecondition.(3) Impair test and impairment provision for construction in processThe Company judges whether there is a sign of impairment to assets on the balance sheet day. Ifsuch sign exists, the Company estimates the recoverable amount and conducts the impairment test.Impairment test is conducted annually for goodwill generated by mergers and intangible assets thathave not reached the useful condition no matter whether the impairment sign exists.The recoverable amount is determined by the higher of the net of fair value minus disposal expenseand the present value of the predicted future cash flow. The Company estimates the recoverableamount on the individual asset item basis; whether it is hard to estimate the recoverable amount onthe individual asset item basis, determine the recoverable amount based on the asset group that theassets belong to. The assets group is determined by whether the main cash flow generated by thegroup is independent from those generated by other assets or assets groups.When the recoverable amount of the assets or assets group is lower than its book value, theCompany writes down the book value to the recoverable amount, the write-down amount isaccounted into the current income account and the assets impairment provision is made.For goodwill impairment test, the book value of goodwill generated by mergers is amortizedthrough reasonable measures since the purchase day to related asset groups; those cannot beamortized to related assets groups are amortized to related combination of asset groups. The relatedasset groups or combination of asset groups refer to those that can benefit from the synergisticeffect of mergers and must not exceed to the reporting range determined by the Company.When the impairment test is conducted, if there is sign of impairment to the asset group orcombination of asset groups related to goodwill, first perform impair test for asset group orcombination of asset groups without goodwill and calculate the recoverable amount and recognizethe related impairment loss. Then conduct impairment test on those with goodwill, compare thebook value with recoverable amount. If the recoverable amount is lower than the book value,recognize the impairment loss of the goodwill.
                                                                China Fangda Group Co., Ltd. 2012 Annual ReportOnce recognized, the asset impairment loss cannot be written back in subsequent accounting period.(XVI) Borrowing expenses(1) Recognition principles for capitalization of borrowing expensesBorrowing expenses occurred to the Company that can be accounted as purchasing or production ofasset satisfying the conditions of capitalizing, are capitalized and accounted as cost of related asset.Borrowing expenses start to be capitalized when all of the followings are satisfied:(1) Asset expense has already occurred. Asset expenses include cash payment, non-cash assettransferring, 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, hasalready started.(2) During borrowing expense capitalizationWhen the asset satisfying the capitalizing conditions has reached its usable or sellable status,capitalizing of borrowing expenses shall be terminated. Borrowing expenses incurred after assetsthat meet capitalization conditions reach the service or sales conditions are accounted into thecurrent gain/loss account according to the actual amounts.(3) Capitalization suspension periodIf the construction or production of assets satisfying the capitalizing conditions is suspendedabnormally for over 3 months, capitalizing of borrowing expenses shall be suspended. During thenormal suspension period, borrowing expenses will be capitalized continuously.(4) Calculation of the capitalization amount of borrowing expense(XVII) Biological assets(XVIII) Oil and gas assets(XIX) Intangible assets(1) Pricing of intangible assets(2) Useful life of intangible assets with limited useful lifeIntangible assets are initially measured at costs and the useful life will be determined when obtained.Where the useful life is limited, the intangible assets will be amortized within the predicted usefullife by using the amortization method that can reflect predicted realization way of the economic
                                                            China Fangda Group Co., Ltd. 2012 Annual Reportbenefit of the assets; whether the realization way cannot be reliably confirmed, use the straight-linemethod. If the useful life is uncertain, the intangible assets are not amortized.
         Items            Estimated useful life                          Basis
    Land using right          Beneficial age          Average age
    Patent                    10 years                Average ageIndustrial property and
                        10 years                  Average agespecial tech
    Software                  5, 10 years             Average age
                          10 years or beneficial
    Other intangible assets                          Average age
                          age(3) Judgment basis of intangible assets without definite useful life(4) Provision of intangible assets impairmentThe Company judges whether there is a sign of impairment to assets on the balance sheet day. Ifsuch sign exists, the Company estimates the recoverable amount and conducts the impairment test.Impairment test is conducted annually for goodwill generated by mergers and intangible assets thathave not reached the useful condition no matter whether the impairment sign exists.The recoverable amount is determined by the higher of the net of fair value minus disposal expenseand the present value of the predicted future cash flow. The Company estimates the recoverableamount on the individual asset item basis; whether it is hard to estimate the recoverable amount onthe individual asset item basis, determine the recoverable amount based on the asset group that theassets belong to. The assets group is determined by whether the main cash flow generated by thegroup is independent from those generated by other assets or assets groups.When the recoverable amount of the assets or assets group is lower than its book value, theCompany writes down the book value to the recoverable amount, the write-down amount isaccounted into the current income account and the assets impairment provision is made.For goodwill impairment test, the book value of goodwill generated by mergers is amortizedthrough reasonable measures since the purchase day to related asset groups; those cannot beamortized to related assets groups are amortized to related combination of asset groups. The relatedasset groups or combination of asset groups refer to those that can benefit from the synergisticeffect of mergers and must not exceed to the reporting range determined by the Company.When the impairment test is conducted, if there is sign of impairment to the asset group orcombination of asset groups related to goodwill, first perform impair test for asset group orcombination of asset groups without goodwill and calculate the recoverable amount and recognizethe related impairment loss. Then conduct impairment test on those with goodwill, compare thebook value with recoverable amount. If the recoverable amount is lower than the book value,recognize the impairment loss of the goodwill.
                                                              China Fangda Group Co., Ltd. 2012 Annual ReportOnce recognized, the asset impairment loss cannot be written back in subsequent accounting period.(3) Specific standard for distinguish between research and development stageThe Company divides internal R&D project expenses into research and development expenses.Development expenses can only be capitalized when the following conditions are satisfied: thetechnology is feasible for use or sales; there is the intention to use or sell the intangible assets; it canbe proven that the product generated by the intangible assets is demanded or the intangible assets indemanded; if the intangible is used internally, it can be proven that it is useful; with necessarytechnical and financial resources and other resources to complete the development of the intangibleassets and the intangible assets can be used or sold; the development expense can be reliablymeasured. If not, the development expense is accounted into the current gain/loss account.If a research project meets the above-mentioned conditions and passes the technical and economicfeasibility study, the project will enter the development stage.Expenses in the development stage capitalized are listed as development expense on the balancesheet and transferred to intangible assets when the project reaches the useful condition.(6) Audit of internal research and development expensesThe research expenses are accounted the current gain/loss account.Development expenses are capitalized if they meet the capitalization conditions; if not, accountedinto the current income account.(XX) Long-term amortizable expensesThe Company’s long-term amortizable expenses are measured at the actual costs and amortizedaveragely based on the beneficial term. For long-term amortizable expenses that are not beneficialin the subsequent account periods, the residual value is fully accounted into the current gain/lossaccount.(XXI) Transfer of assets without repurchase conditions(XXII) Anticipated liabilities(1) Recognition standards of anticipated liabilitiesWhen responsibilities occurred in connection to contingent issues, and all of the followingconditions 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.
                                                            China Fangda Group Co., Ltd. 2012 Annual Report(3) Measurement of anticipated liabilitiesExpected liabilities are initially measured at the best estimation on the expenses to exercise thecurrent responsibility, and with considerations to the relative risks, uncertainty, and periodic valueof currency. When the periodic value of currency is with major influence, then the best estimationwill be determined at the discount of future cash outflow. The book value of expected liability isrevised at balance sheet day, and adjustment will be made to reflect current best estimation.If liquidation has confirmed that the expenses will be compensated fully or partly by a third or otherparty, the compensation amount can only be recognized individually as assets when the recovery ofthe amount is almost certain. The compensation must not exceed the book value of the recognizedliabilities.(XXIII) Share payment and equity instruments(1) Share payment category(2) Recognition of fair value of equity instruments(3) Basis for recognition of the best estimation of realizable equity instruments(4) Related accounting treatment of implementation, modification and suspension share paymentplan(XXIV) Repurchase of the Company’s shares(XXV) Revenue(1) Specific judgment standard of recognition time of goods sales revenueWhen all of the following conditions are satisfied, the sales of goods are recognized as sales incomeaccording to the contract amount received or receivable from the buyer: (1) Main risks and rewardsattached to the ownership of the goods have been transferred to the buyer; (2) No succeeding powerof administration or effective control is reserved which are usually attached to ownership; (3)Amount received can be reliably measured; (4) Related financial benefit may inflow to theCompany; (5) Relative costs, occurred or will occur, can be reliably measured.(2) Basis for recognition of revenue from demising of asset using rightsThe revenue is recognized when the financial benefit in connection with the demising of asset usingright was received and the amount can be reliably measured.(3) Basis for recognition of revenue from providing of labor servicesIf they are not in the same year, then use the estimation on percentage basis when it is possible.
                                                           China Fangda Group Co., Ltd. 2012 Annual ReportThe completion percentage is the costs occurred on the total cost.The reliable estimation of the result of providing of labor service must meet the followingconditions: A. the revenue can be reliably measured; B. the economic benefit is very likely to flowinto the company; C. the completion can be determined reliably; D. costs incurred or will beincurred can be reliably measured.If the result cannot be reliably estimated, use the service cost amount of the compensation obtainedor will be obtained to recognize the revenue of the providing of labor service and recognize theincurred labor service cost as the current expense. If no compensation can be obtained for incurredlabor service cost, no revenue can be recognized.(4) Basis and method for recognition of contract completion progress when the revenue fromproviding of labor service and construction contracts is recognized on the competition percentage.On the balance sheet day, the Company recognizes the contract income and costs using thecompletion percentage method if the result of the construction contract can be reliably estimated. Ifnot, such contracts are treated differently. If the contract cost can be recovered, the revenue isrecognized according to the actual contract costs that can be recovered and the contract cost isrecognized as the current expense; if not, the contract cost is recognized as the current expense andno revenue is recognized.If the estimated total costs exceed the total revenue, the Company recognizes the estimated loss asthe current expense.The competition percentage is determined by the share of the costs incurred in the total cost.The reliable estimation of the result of a construction contract must meet the following conditions:A. the revenue can be reliably measured; B. the economic benefit is very likely to flow into thecompany; C. the completion cost can be clearly distinguished and determined reliably; D. thecompletion and costs that will be incurred for completion of the contract can be reliably recognized.
    Metro screen door projects of the Company and Shenzhen Fangda Automatic System, andcurtain wall project of Fangda Decoration are individual construction contracts. They are accountedby the following means:Construction contracts completed within a fiscal year are recognized for their income and cost uponcompletion.Income and expenses of the construction contracts carried over-year are recognized on percentagebasis at balance sheet day when all of the following conditions are satisfied: contract income can bereliably measured, relative financial benefit can inflow to the Company; progress of the project andcosts to complete the contract can be reliably recognized; cost occurred to complete the contract canbe clearly distinguished and reliably measured, which enables comparing of actual cost withpredicted cost.
                                                            China Fangda Group Co., Ltd. 2012 Annual ReportContract costs are direct and indirect expenses occurred since the date when the contract is engagedtill the completion day. The competition percentage is determined by the share of the costs incurredin the total cost.Construction contracts completed in current term are recognized for income according to the actualtotal income of the contract less income recognized in previous terms; meanwhile, the total costs ofthe contract less costs recognized in previous terms are recognized as current contract costs. If thetotal contract cost is predicted to be greater than the predicted total income, the predicted loss shallbe recognized as current cost instantly.Parts of the curtain wall project under Fangda Decoration are outsourced, and administrative feesare collected at the agreed rate. For these construction contracts, income will be recognized whenongoing payment for the project is received and corresponding costs are transferred.Revenue of products for domestic sales is recognized when the Company delivers the products andreceives the sales payment or obtains the payment voucher; revenue for products for overseas salesis recognized at departure of the products.(XXVI) Government subsidy(1) Type(2) Accounting methodGovernment subsidy is only recognized when the required conditions are met and the subsidy isreceived.When a government subsidy is monetary capital, it is measured at the received or receivable amount.If there is objective evidence indicating that the subsidy is given based on fixed amount, it can bemeasured at the receivable amount, otherwise it is recognized at the received amount. Nonemonetary capital are measured at fair value; if no reliable fair value available, recognized at RMB1.Government subsidies in connection with capital are recognized as differed income, and amortizedstraight to its useful life, and accounted into current income account. Government subsidies inconnection with gains, which are used to cover current expenses or losses, are recognized as currentgain/loss, if used to cover future expenses or losses, recognized as differed gains, and recorded tocurrent income account to the period when the expenses are recognized. Government subsidymeasured at the nominal amount is accounted into current income account.If a recognized government subsidy needs to be returned, if there are relative differed gains, thebalance of differed gains will be setoff, the exceeded part shall be recorded into current incomeaccount; if there is no relative differed gain, record to current income account directly.
                                                               China Fangda Group Co., Ltd. 2012 Annual Report(XXVII) Differed income tax assets and differed income tax liabilities(1) Basis for recognition of deferred income tax assetsFor Deductible temporary difference, deductible loss and tax deduction that can be accounted insubsequent years, the Company recognizes the incurred deferred income tax assets to the extent tothe future income tax proceeds that is very likely to be received for deducting Deductible temporarydifference, Deductible loss and tax deduction, unless the Deductible temporary difference isgenerated in following transactions: (1) the transaction is not a merger and the transaction does notaffect the accounting profit or taxable proceeds; (2) for the taxable temporary difference related toinvestment in subsidiaries, the corresponding deferred income tax assets are recognized when thefollowing condition is met: the temporary difference is very likely to be reversed in the foreseeablefuture and it is very likely to receive the taxable proceeds that can be used to deduct the Deductibletemporary difference.(2) Basis for recognition of deferred income tax liabilitiesThe taxable temporary difference recognizes the related deferred income tax liabilities, unless thetaxable temporary difference is created by the following transactions: (1) Initial recognition ofgoodwill, or of assets or liabilities generated in transactions with the following features: thetransaction is not a merger and the transaction does not affect the accounting profit or taxableproceeds; (2) For taxable temporary difference related to investment in subsidiaries, the reversaltiming for the temporary difference can be controlled and the difference is unlikely to be reversed inthe foreseeable future.(XXVIII) Operational leasing and financial leasing(1) Accounting of operational leasingThe Company as the leasor: Rentals from operational leasing are recognized as current gains onstraight basis to the periods of leasing. Initial direct expenses are recorded to current incomeaccount.The Company as the leasee: Rentals in operational leasing are recorded to relative capital cost orcurrent income account on straight basis to the periods of leasing. Initial direct expenses arerecorded to current income account.(2) Accounting of financial leasingThe Company as the leasor: In financial leasing, the book value of financial rental is the sum oflowest amount of the rent and the initial expenses since the date when the lease is started. Thedifference between the sum of lowest rental, initial direct expense and unsecured balance and thecurrent value is recognized as the unrealized financial income. Unrealized financial income isrecognized as financial income at actual interest basis to the periods of the leasing period.The Company as the leasee: The Company measures the leased assets as the lower of the fair valueand the present value of minimum lease payment of the leased assets on the starting date of the
                                                           China Fangda Group Co., Ltd. 2012 Annual Reportlease and records the minimum lease payment as long-term payable and the difference between thetwo as unrecognized financing expense. The initial direct expense is accounted into asset value.Unrecognized financial cost is recognized as financial cost at actual interest basis to the periods ofthe leasing period. The Company adopts the depreciation policy same as the self-owned fixed assetsto made provision for depreciation of leased assets.(3) Accounting of sale and lease-back(XXIX) Assets held for sales(1) Recognition standard(2) Accounting treatment(XXX) Asset securitization(XXXI) Accounting of hedging(XXXII) Major changes in accounting policies and estimatesChanges in major accounting estimates in the report period□ Yes √ NoNo change in major accounting estimates in the report period(1) Changes in accounting policiesChanges in major accounting policies in the report period: no□ Yes √ NoNo change in major accounting policies in the report period(2) Changes in accounting estimatesChanges in major accounting estimates in the report period□ Yes √ NoNo change in major accounting estimates in the report period(XXXIII) Correction of previous accounting faultsFaults in previous accounts in the current report period□ Yes √ NoNone
                                                            China Fangda Group Co., Ltd. 2012 Annual Report(1) Retrospective restatement methodFaults in adoption of the retrospective restatement method in the report period□ Yes √ No(2) Prospective application methodFaults in adoption of the prospective application method in the report period□ Yes √ No(XXXIV) Other major accounting policies, accounting estimates and preparation of financialstatementsV Taxation1. Major taxes and tax rates
                Tax                             Tax basis                          Tax rate
    Business tax                         Taxable income                    6%、17%
    Business tax                         Taxable income                    3%、5%City maintenance and construction
                                  Taxable turnover                     7%tax
    Enterprise income tax                Taxable income                    12.5%、15%、25%Income tax rates for branches and factories2. Tax preference and approval(1) According to the Certification of High-tech Enterprise issued by Shenzhen Commission ofTrade Industry and IT, Shenzhen Commission of Finance, Shenzhen National Tax Bureau, andShenzhen Local Tax Bureau on October 29, 2009, Fangda Decoration was entitled to enjoy a taxpreference of enterprise income tax of 15% for three years (2009-2011) since the qualificationswere awarded.(2) According to the Certification of High-tech Enterprise issued by Shenzhen Commission ofTrade Industry and IT, Shenzhen Commission of Finance, Shenzhen National Tax Bureau, andShenzhen Local Tax Bureau on October 29, 2009, Fangda Automatic was entitled to enjoy a taxpreference of enterprise income tax of 15% for three years (2009-2011) since the qualificationswere awarded.(3) As approved by Nanchang High-tech Zone Tax Bureau with document 洪高国税发(2008)74号, Fangda New Material enjoys “2 free 3 half” policy since 2008. The rate is cut by half in 2010,12.5% in 2011 and 2012.
    The certifications for the above-mentioned three subsidiaries have expired in 2011 and have
                                                          China Fangda Group Co., Ltd. 2012 Annual Reportbeen reviewed and approved in 2012. The Company is forecast to obtain the renewed certificationin 2013 and the enterprise income tax for the three subsidiaries is provisionally collected at 15% in2012.(3) OthersVI Merger of enterprises and consolidated financial statements1. Subsidiaries(1) Subsidiaries founded or acquired from investment
                                                                                               In RMB
                                                                                                  The
                                                                                                balanc
                                                                                                  e of
                                                                                                   the
                                                                                                owner
                                                                                                    s’
                                                                                                intere
                                                                                                  st in
                                                                              Amou                 the
                                            Balan
                                                                              nt for            parent
                                             ce of
                                                                              deduc              after
                                     Actua other
                                                                               ting             deduc
                                        l    items
                                                          Propo               minor               ting
       Type Regist      Regist       invest comp                Conso Minor
                               Busin                Share rtion                 ity                the
    Subsi of      ered Busin ered         ment osing                lidate ity
                                ess                 holdin of                 gain/l            excess
    diary subsid addres ess capita       at the net                 statem intere
                               scope                g (%) votes               oss in               ive
       iary     s          l         end of invest               ents    sts
                                                            %                   the               part
                                       the ment
                                                                              minor             of the
                                     period in
                                                                                ity               loss
                                            subsid
                                                                              intere            shared
                                             iaries
                                                                                sts                by
                                                                                                minor
                                                                                                   ity
                                                                                                shareh
                                                                                                olders
                                                                                                 over
                                                                                                   the
                                                                                                 share
                                                                                                    of
                                                   China Fangda Group Co., Ltd. 2012 Annual Report
                                                                                         profits
                                                                                         in the
                                                                                         owner
                                                                                             s’
                                                                                         intere
                                                                                           st in
                                                                                            the
                                                                                         subsid
                                                                                           iary
                                                                                             of
                                                                                         minor
                                                                                            ity
                                                                                         shareh
                                                                                          older
                                                                                          at the
                                                                                         begin
                                                                                          ning
                                                                                         of the
                                                                                           year
                    Desig          Desig
    Shenz               ning,          ning,
    hen                 manuf          manuf
    Fangd               acturi         acturi
       Fully-
    a                   ng,            ng,
       owne                310,0           310,0
    Decor         Shenz and            and
       d                   00,00           00,00   100% 100% Yes
    ation         hen install          install
       subsid              0.00             0.00
    Engin               ation          ation
       iary
    eering              of             of
    Co.,                curtai         curtai
    Ltd.                n              n
                    walls          walls
                                Desig
                                ning,Shenz
                   Install      technihen
                   ation        calFangd
      Fully-       and          devela
      owne         proces 105,0 oping, 183,7
    Auto         Shenz
      d            sing 00,00 install 70,00        100% 100% Yes
    matic        hen
      subsid       of      0.00 ation, 0.73Syste
      iary         metro        andm
                   screen       salesCo.,
                   door         ofLtd.
                                PSD
                                syste
                                                       China Fangda Group Co., Ltd. 2012 Annual Report
                                       m;
                                       impor
                                       t&
                                       export
                                       ;
                                       install
                                       ation
                                       and
                                       proces
                                       sing
                                       of
                                       PSD.
                      Produ            R&D,
                      ction            designShenz
                      and              andhen
                      distrib          produ
    Fangd    Fully-
                      ution            ction
    a Yide   owne                 USD3            3,200,
                Shenz of               of
    New      d                    ,200,0           000.0   100% 100% Yes
                hen new-t              new-t
    Mater    subsid               00.00                0
                      ype              ype
    ial      iary
                      comp             compCo.,
                      osite            ositeLtd.
                      materi           materi
                      als              als
                                       Produ
                    Produ
                                       ction
                    ction
                                       and
                    and
                                       sales
                    sales
                                       of
                    of
                                       new-t
                    new-t
    Fangd                                  ype
                    ype
    a New                                  materi
       Fully-       materi
    Mater                      USD1        als,
       owne         als                        12,00
    ials          Nanch        2,000,      comp
       d            comp                      0,000.   100% 100% Yes
    (Jiang        ang          000.0       osite
       subsid       osite                         00
    xi)                        0           materi
       iary         materi
    Co.,                                   als,
                    als
    Ltd.                                   produ
                    and
                                       ction
                    produ
                                       of
                    ction
                                       curtai
                    of
                                       n
                    curtai
                                       walls,
                    n
                                       windo
                                                     China Fangda Group Co., Ltd. 2012 Annual Report
                    walls           ws,
                                    metal
                                    struct
                                    ures
                                    and
                                    comp
                                    onents
                                    ,
                                    metal
                                    produ
                                    cts
                                    and
                                    enviro
                                    nment
                                    al
                                    protec
                                    tion
                                    materi
                                    als
                                    and
                                    produ
                                    cts
                   Desig            Desig
                   n,               n,
                   produ            produ
                   ction,           ction,
                   sales            sales
                   and              and
                   install          installJiangx
                   ation            ationi
                   of               ofFangd Fully-
                   curtai           curtai
    a New owne                 20,00             20,00
             Nanch n wall           n wall
    Type d                     0,000.           0,000.   100% 100% Yes
             ang alumi              alumi
    Alumi subsid               00                   00
                   num              numnum iary
                   materi           materiCo.,
                   als,             als,Ltd.
                   doors,           doors,
                   windo            windo
                   ws               ws
                   and              and
                   sectio           sectio
                   nal              nal
                   materi           materi
                                                  China Fangda Group Co., Ltd. 2012 Annual Report
                     als          alsHong
         Fully-Kong
         owne               HKD
    Junjia          Hong Invest       Invest 10,00
         d                  10,00                 100% 100% Yes
    Group           Kong ment         ment    0.00
         subsid             0.00Co.,
         iaryLtd.
                   Manu           Manu
                   facturi        facturi
                   ng of          ng of
                   semic          semic
                   onduc          onduc
                   tor            tor
                   lightin        lightin
                   g              g
                   materi         materi
                   al and         al and
                   chips;         chips;
                   lightin        lightin
                   g              g
    Sheny              source         source
    ang                encap          encap
    Fangd              sulati         sulati
    a                  on;            on;
       Contr
    Semi-              devel 200,0    devel                                  59,70 -18,50
       olled Sheny                        10,88   64.58 64.58
    condu              oping, 00,00   oping,                      Yes       8,531. 5,134.
       subsid ang                          5.21      %     %
    ctor               design 0.00    design                                    11     82
       iaries
    Lighti             ing,           ing,
    ng                 manuf          manuf
    Co.,               acturi         acturi
    Ltd.               ng,            ng,
                   engin          engin
                   eering         eering
                   ,              ,
                   install        install
                   ation          ation
                   and            and
                   tradin         tradin
                   g of           g of
                   semic          semic
                   onduc          onduc
                   tor            tor
                   lightin        lightin
                   g              g
                                                 China Fangda Group Co., Ltd. 2012 Annual Report
                   syste         syste
                   m             m
                                 Comp
                                 uter
                                 softw
                                 are
                                 and
                                 hardw
                   Devel
                                 are
                   oping
                                 devel
                   of
                                 opme
                   hardw
                                 nt and
    Shenz              are
                                 sales,
    hen                and
      Fully-                     comp
    Kexu               softw
      owne                1,000, uter 1,000,
    nda          Shenz are,
      d                   000.0 softw 000.0      100% 100% Yes
    Softw        hen syste
      subsid              0      are       0
    are                m
      iary                       devel
    Co.,               integr
                                 opme
    Ltd.               ation,
                                 nt,
                   techni
                                 syste
                   cal
                                 m
                   consul
                                 integr
                   ting
                                 ation
                                 and
                                 techni
                                 cal
                                 consul
                                 ting
                   Devel         Devel
                   opme          opme
    Shenz              nt and        nt and
    hen                operat        operat
    Fangd              ing of        ing of
    a     Fully-       real          real
    Prope owne         estate 10,00 estate 10,00
             Shenz
    rty   d            on     0,000. on     0,000.   100% 100% Yes
             hen
    Devel subsid       land 00       land       00
    opme iary          of            of
    nt                 which         which
    Co.,               land          land
    Ltd.               use           use
                   right         right
                   is            is
                                                        China Fangda Group Co., Ltd. 2012 Annual Report
                     legall       legall
                     y            y
                     obtain       obtain
                     ed by        ed by
                     the          the
                     Comp         Comp
                     any;         any;
                     proper       proper
                     ty           ty
                     mana         mana
                     geme         geme
                     nt           ntNotes to subsidiaries founded or acquired from investment(2) Subsidiaries acquired by mergers of companies under the common control
                                                                                             In RMB
                                                                                               The
                                                                                              balanc
                                                                                               e of
                                                                                                the
                                                                                              owner
                                                                                                 s’
                                                                                              intere
                                                                              Amou             st in
                                            Balan
                                                                              nt for            the
                                             ce of
                                                                              deduc           parent
                                     Actua other
                                                                               ting            after
                                        l    items
                                                          Propo               minor           deduc
       Type Regist      Regist       invest comp                Conso Minor
                               Busin                Share rtion                 ity            ting
    Subsi of      ered Busin ered         ment osing                lidate ity
                                ess                 holdin of                 gain/l            the
    diary subsid addres ess capita       at the net                 statem intere
                               scope                g (%) votes               oss in          excess
       iary     s          l         end of invest               ents    sts
                                                            %                   the             ive
                                       the ment
                                                                              minor            part
                                     period in
                                                                                ity           of the
                                            subsid
                                                                              intere           loss
                                             iaries
                                                                                sts           shared
                                                                                                by
                                                                                              minor
                                                                                                ity
                                                                                              shareh
                                                                                              olders
                                                                                               over
                                                                                                the
                                                       China Fangda Group Co., Ltd. 2012 Annual Report
                                                                                              share
                                                                                                 of
                                                                                             profits
                                                                                             in the
                                                                                             owner
                                                                                                 s’
                                                                                             intere
                                                                                               st in
                                                                                                the
                                                                                             subsid
                                                                                               iary
                                                                                                 of
                                                                                             minor
                                                                                                ity
                                                                                             shareh
                                                                                              older
                                                                                              at the
                                                                                             begin
                                                                                              ning
                                                                                             of the
                                                                                               yearNotes to subsidiaries acquired by mergers of companies under the common control(3) Subsidiaries acquired by mergers of companies not under the common control
                                                                                            In RMB
                                                                                              The
                                                                                             balanc
                                                                                              e of
                                                                              Amou
                                            Balan                                              the
                                                                              nt for
                                             ce of                                           owner
                                                                              deduc
                                     Actua other                                                s’
                                                                               ting
                                        l    items                                           intere
                                                          Propo               minor
       Type Regist      Regist       invest comp                Conso Minor                   st in
                               Busin                Share rtion                 ity
    Subsi of      ered Busin ered         ment osing                lidate ity                     the
                                ess                 holdin of                 gain/l
    diary subsid addres ess capita       at the net                 statem intere                parent
                               scope                g (%) votes               oss in
       iary     s          l         end of invest               ents    sts                  after
                                                            %                   the
                                       the ment                                              deduc
                                                                              minor
                                     period in                                                ting
                                                                                ity
                                            subsid                                             the
                                                                              intere
                                             iaries                                          excess
                                                                                sts
                                                                                               ive
                                                                                              part
                                                                                             of the
                                                            China Fangda Group Co., Ltd. 2012 Annual Report
                                                                                                    loss
                                                                                                  shared
                                                                                                     by
                                                                                                  minor