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方大B(200055)公告正文

方大B:2014年半年度报告(英文版)

公告日期:2014-08-26

                       2014 Interim Report of China Fangda Group Co., LtdChina Fangda Group Co., Ltd.
    2014 Interim Report
         August 2014
                                                                 2014 Interim Report of China Fangda Group Co., Ltd
          I Important Statement, Table of Contents and Definitions
         The members of the Board and the Company guarantee that the interimreport is free from any false information, misleading statement or materialomission and are jointly and severally liable for the informations truthfulness,accuracy and integrity.
    Directors other than the following ones have attended the Board meeting toreview the interim report.
    Name of absent director   Position of absent director         Reason                     Name of proxy
         Lin Bin              Independent director        Business engagement              Huang Yaying
    The Company will distribute no cash dividends or bonus shares and has noreserve capitalization plan.
    Mr. Xiong Jianming, the Chairman of Board, Mr. Lin Kebin, the ChiefFinancial Officer, and Mr. Chen Yonggang, the manager of accountingdepartment declare: the Financial Report carried in this report is authentic andcompleted.
    Forward-looking statements involved in this report including future plansdo not make any material promise to investors. Investors should pay attention toinvestment risks.
                                                                                                                      2014 Interim Report of China Fangda Group Co., Ltd
                                                                       Table of ContentsI Important Statement, Table of Contents and Definitions .......................................................................................................................2II Company Profile ..................................................................................................................................................................................6III Financial Highlight .............................................................................................................................................................................8IV Board of Directors’ Report ............................................................................................................................................................... 11V Significant Events ..............................................................................................................................................................................24VI Changes in Share Capital and Shareholders .....................................................................................................................................28VII Particulars about the Directors, Supervisors, and Senior Management ...........................................................................................32VIII Financial Statements ......................................................................................................................................................................34IX Documents for Reference ...............................................................................................................................................................134
                                                                   2014 Interim Report of China Fangda Group Co., Ltd
                                             Definitions
                                     Define
                     Terms                                                   Description
                                      d as
                                     Define
    Fangda Group, company, the Company            China Fangda Group Co., Ltd.
                                      d as
                                     Define
    Articles of Association                       Articles of Association of China Fangda Group Co., Ltd.
                                      d as
                                     Define
    Meeting of shareholders                       Meetings of shareholders of China Fangda Group Co., Ltd.
                                      d as
                                     Define
    Board of Directors                            Board of Directors of China Fangda Group Co., Ltd.
                                      d as
                                     Define
    Supervisory Committee                         Supervisory Committee of China Fangda Group Co., Ltd.
                                      d as
                                     Define
    Banglin Co.                                   Shenzhen Banglin Technologies Development Co., Ltd.
                                      d as
                                     Define
    Shilihe Co.                                   Shenzhen Shilihe Investment Co., Ltd.
                                      d as
                                     Define
    Shengjiu Co.                                  Shengjiu Investment Ltd.
                                      d as
                                     Define
    Fangda Jianke                                 Shenzhen Fangda Jianke Group Co., Ltd.
                                      d as
                                     Define
    Fangda Automatic                              Shenzhen Fangda Automatic System Co., Ltd.
                                      d as
                                     Define
    Fangda New Material                           Fangda New Materials (Jiangxi) Co., Ltd.
                                      d as
                                     Define
    Shenyang Fangda                               Shenyang Fangda Semi-conductor Lighting Co., Ltd.
                                      d as
                                     Define
    Fangda Guoke                                  Shenzhen Fangda Guoke Optical & Electronics Co., Ltd.
                                      d as
                                     Define
    Shenzhen Woke                                 Shenzhen Woke Semi-conductor Lighting Co., Ltd.
                                      d as
                                     Define
    Hong Kong Junjia                              Hong Kong Junjia Group Co., Ltd.
                                      d as
    Fangda Aluminium                     Define Jiangxi Fangda New Type Aluminum Co., Ltd.
                                                              2014 Interim Report of China Fangda Group Co., Ltd
                                 d as
                                Define
    Fangda Yide Co.                          Shenzhen Fangda Yide New Material Co., Ltd.
                                 d as
                                Define
    Fangda Dongguan New Material             Dongguan Fangda New Material Co., Ltd.
                                 d as
                                Define
    Kexunda Co.                              Shenzhen Kexunda Software Co., Ltd.
                                 d as
                                Define
    Fangda Property                          Shenzhen Fangda Property Development Co., Ltd.
                                 d as
                                Define
    Fangda Chengdu New Material              Chengdu Fangda New Material Co., Ltd.
                                 d as
                                Define
    Shenyang Decoration                      Fangda Decoration Engineering (Shenyang) Co., Ltd.
                                 d as
    Fangda New Energy                        Shenzhen Fangda New Energy Co., Ltd.
    Fang SOZN                                Guangdong Fangda SOZN Lighting Co., Ltd.
                                Define
    CSRC                                     China Securities Regulatory Commission
                                 d as
                                Define
    SZSE                                     Shenzhen Stock Exchange
                                 d as
                                Define
    Sponsor, Zhongshan Securities            Zhongshan Securities Co., Ltd.
                                 d as
                                                                                2014 Interim Report of China Fangda Group Co., Ltd
                                                 II Company Profile1. Company Profile
    Stock ID                        Fangda Group, Fangda B                Stock code                      000055, 200055
    Modified stock ID (if any)      None
    Stock Exchange                  Shenzhen Stock Exchange
    Chinese name                    China Fangda Group Co., Ltd.
    Chinese abbreviation (if any)   Fangda Group
    English name (if any)           CHINA FANGDA GROUP CO., LTD.
    English abbreviation (if any)   CFGC
    Legal representative            Xiong Jianming2. Contacts and liaisons
                                                     Secretary of the Board                  Representative of Stock Affairs
    Name                                       Zhou Zhigang                                 Guo Linchen
                                           20F, Fangda Building, Kejinan 12th           20F, Fangda Building, Kejinan 12th
    Address                                    Avenue, High-tech Zone, Shenzhen, PR         Avenue, High-tech Zone, Shenzhen, PR
                                           China.                                       China.
    Tel.                                       86(755) 26788571 ext. 6622                   86(755) 26788571 ext. 6622
    Fax                                        86(755)26788353                              86(755)26788353
    Email                                      zqb@fangda.com                               zqb@fangda.com3. Other Information1. LiaisonChanges to the Company’s registered address, office address, post code, website or email during the report period√ Applicable □ Inapplicable
    Registered address                               Fangda Building, Kejinan 12th Avenue, High-tech Zone, Shenzhen, PR China.
    Post code                                        518057
                                                 20F, Fangda Building, Kejinan 12th Avenue, High-tech Zone, Shenzhen, PROffice address
                                                 China.
    Post code                                        518057
    Website                                          http://www.fangda.com
                                                                               2014 Interim Report of China Fangda Group Co., Ltd
    Email                                               fd@fangda.comEnquiry date on specific websites for provisional
                                                    January 13, 2014announcement disclosure (if any)Website where specific websites for provisional
                                                    http://www.cninfo.com.cnannouncement disclosure are listed (if any)2. Information disclosure and inquiringChanges to the information disclosure and inquiring place□ Applicable √ InapplicablePlease refer to the 2013 annual report for the newspapers and websites where the Company’s information isdisclosed. The inquiry address of the interim report has remained unchanged during the report period.3. Registration changesWhether the registration has changed during the report period□ Applicable √ InapplicablePlease refer to 2013 annual report for the Company’s registration date and address, business license No., taxregistration No. and organization registration code, which have remained unchanged during the report period.
                                                                                     2014 Interim Report of China Fangda Group Co., Ltd
                                                III Financial Highlight1. Financial HighlightThe Company retroactively adjusts or restate financial statistics of the previous years because of changes inaccount policies and correction of accounting errors.□ Yes √ No
                                                      This report period           Same period last year         Year-on-year change (%)
    Turnover (yuan)                                               822,792,739.02                  736,828,039.88                         11.67%Net profit attributable to shareholders of
                                                               40,769,958.24                   39,361,593.42                          3.58%the listed company (yuan)Net profit attributable to the shareholders
    of the listed company and after deducting                      39,669,548.38                   37,591,750.20                          5.53%of non-recurring gain/loss (RMB)Net cash flow generated by business
                                                             -268,552,729.61                    1,089,862.59                                -operation (RMB)
    Basic earnings per share (yuan/share)                                      0.05                          0.05                         0.00%
    Diluted Earnings per share (yuan/share)                                    0.05                          0.05                         0.00%
    Weighted average net income/asset ratio                                3.49%                            3.54%                        -0.05%
                                                  End of the report period           End of last year              Year-on-year change
    Total asset (RMB)                                            3,125,590,102.60               2,599,557,542.57                         20.24%Net profit attributable to the shareholders
                                                             1,178,738,091.94               1,160,639,730.85                          1.56%of the listed company (RMB)2. Differences in accounting data under domestic and foreign accounting standards1. Differences in net profits and assets in financial statements disclosed according to the international andChinese account standards√ Applicable □ Inapplicable
                                                                                                                                      In RMB
                                  Net profit attributable to the shareholders of the       Net profit attributable to the shareholders of the
                                                      listed company                                        listed company
                                        This period                 Last period               Closing amount            Opening amountOn Chinese accounting
                                             40,769,958.24                 39,361,593.42         1,178,738,091.94          1,160,639,730.85standardsItems and amounts adjusted according International Accounting Standards
                                                                                  2014 Interim Report of China Fangda Group Co., LtdCapitalization of borrowing
                                                   0.00                         0.00             4,763,398.24                4,763,398.24expensesOn international accounting
                                         40,769,958.24                39,361,593.42          1,183,501,490.18           1,165,403,129.09standards2. There is no difference in net profits and assets in financial statements disclosed according to theinternational and Chinese account standards during the report period.3. Explanation of the differences in accounting data under domestic and foreign accounting standards√ Applicable □ InapplicableNet assets attributable to the listed company’s shareholders calculated according to the IAS is RMB4,763,398.24higher than that calculated according to the domestic accounting standards, mainly attributable to thecapitalization of borrow expenses before the domestic Enterprise Accounting Standard was implemented onJanuary 1, 2007.3. Accidental gain/loss item and amount√ Applicable □ Inapplicable
                                                                                                                                  In RMB
                               Items                                            Amount                              NotesNon-current asset disposal gain/loss (including the write-off part
                                                                                       -1,351,811.27for which assets impairment provision is made)Subsidies accounted into the current income account (except the
    government subsidy closely related to the enterprise’s business                         158,595.54and based on unified national standard quota)
    Other non-business income and expenditures other than the above                        1,646,215.46
    Other gain/loss items satisfying the definition of non-recurring                                       Gains from reverse repurchase of
                                                                                       1,010,926.07
    gain/loss account                                                                                      treasury bonds
    Less: Influenced amount of income tax                                                    363,515.94
    Total                                                                                  1,100,409.86                     --Explanation 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
            Items                         Amount                                               ReasonGains from reverse repurchase
                                                1,010,926.07 Gains from reverse repurchase of treasury bondsof treasury bonds
    Tax refunded related to                                        It is related to the Company’s business. The amount is refunded to the
                                                  526,615.39
    software products                                              Company according to the tax rate provided by the taxation
                  2014 Interim Report of China Fangda Group Co., Ltdadministration.
                                                                     2014 Interim Report of China Fangda Group Co., Ltd
                                 IV Board of Directors Report1. Summary
    The Chinese economy remained mixed and largely uncertain in H1 2014. The market remained weak andfragile. To survive the weak economy and increasingly fierce competition, the Company has continued improvingthe brand equity, expertise and services, stabilizing the growth. In the report period, the Company recorded a salesincome of RMB822,792,700, up 11.67% year on year. The net profit attributed to owners of the parent reachedRMB40,770,000, up 3.58% year on year. The revenue from main businesses continued growing. By the end of thereport period, the Company had secured new orders worth RMB1.371 billion with undelivered orders worthRMB2.171 billion, which 263.86% of the operating revenue in H1 2014, paving the way for the Company tocomplete the whole year’s sales target.
    1. Curtain wall system and material industry continued growing rapidly
    Currently, the curtain wall system and material industry remains a main source of income and profit for theCompany. The brand equity of the Company’s curtain wall systems and materials has been further improved,boosting the sales. During the report period, the Company won bids in a series of large-sized energy-savinglow-carbon high-end curtain wall and material products such as the Shenzhen Excellence Meilin Center Plaza,Shenzhen Hualin Business Center, Alibaba Chengdu West Base, Chongqing Tianhe International Center, WuhanLianfaJiudu International, Haikou Meilan Airport West Corridor, Suzhou Center Plaza, and Kunming QicaiyunNanhua City. By the end of the report period, the Company has secured new orders for curtain wall systems andmaterials worth RMB1.296 billion, adding the value of undelivered orders to RMB1.578 billion. In H1 2014, theCompany managed to continue production to fulfill orders despite the rainy weather. In the report period, thecurtain wall system and material business generated a sales income of RMB757,874,900, up 12.89% year on year.
    The Company has adhered to the business philosophy of integrity, trust, cooperation and continuousimprovement and seeks to meet customers’ needs thanks to our customer-centered value, strong innovation andhigh engineering quality, receiving wide recognition among customers. In the report period, the Company won theonly outstanding curtain wall supplier prize from Wanda Group as the first curtain wall supplier of Wanda Group.
    2. Multiple preliminary railway traffic equipment orders enter design, production and engineeringstages
    2. Multiple preliminary railway traffic equipment orders enter design, production and engineering stages.During the report period, screen doors and safety safes for Shenzhen metro 3rd phase No.9 and 11 lines, Xi’anmetro No.3 line, Wuhan metro No.4 line 2nd phase, Nanchang metro No.1 line, Fuzhou metro No.1 line,Wuhan-Xiaogan railway, Singapore metro Tuas expansion line have been designed, produced and installed asscheduled. During the report period, the Company has become a metro screen door supplier for well-knowninternational motor producers including Siemens, Hitachi and Alston, propelling the overseas expansion strategy.During the report period, thanks to high reliability and stability, the Company’s screen door systems made therecord the zero failure in the one-million attempt service life test of the Singapore Tuas expansion line andNanchang No.1 line. The two projects have completed the one-million attempt service life test and acceptanceprocedure and have been put into massive product. By the end of the report period, undelivered orders for screendoors are worth RMB593 million.
    3. Fangda Town renovation project is performed as scheduled
    The Fangda Town renovation project (“the Project”) is constructed and invested by the Company’s
                                                                      2014 Interim Report of China Fangda Group Co., Ltdwholly-owned subsidiary Shenzhen Fangda Property Development Co., Ltd. With an investment of aboutRMB2.5 billion, the project will be completed at the end of 2016. The project will serve to house hi-tech industryand hi-end emerging industry R&D headquarters and a landmark complex providing R&D and business facilitiesand integrating ecological offices, shopping malls and entertainment. In additional industry buildings for domesticuse, the project comprises about 100,000 m2 of industry buildings for sales, 20,000 m2 of business property and70,000 m2 of industry buildings for lease. Since the commencement on May 18, the project has been performed asscheduled, Currently, the project is in the foundation pit construction stage. The project will add the Company’snet and total assets, create substantial cash flows for the Company and yield a stable rental income to support thefuture development of the Company and accelerate growth of the Company’s other business.
      4. Developing solar energy PV and LED new resource business via the new energy company
      In the report period, the Company invested RMB100 million from the working capital to set up ShenzhenFangda New Energy Co., Ltd. to develop energy-saving technologies such as solar energy PV application, PVconstruction and LED industry. It will extend the Company’s existing energy-saving business and coincides withthe development trend of the energy-saving industry.
      Currently, the Company is proceeding with the development of the new energy industry as scheduled. OnJuly 18, the Company entered into an agreement with natural person Luo Huichi to acquire 60% stake in theGuangdong Fangda SOZN Lighting Co., Ltd (“New Company”) set up with the fixed assets, intangible assets,sales networks and teams of three LED lighting companies controlled by Luo. The investment does not exceedRMB48 million in cash. The payment includes conditional stock transfer to Luo and conditional investment to theNew Company. The New Company will generate a sales income of RMB150 million and a net profit of RMB3million between July and December 2014, and a sales income of RMB600 million and a net profit of RMB36million in 2015, a sales income of RMB1 billion and a net profit of RMB60 million in 2016. On July 22, theCompany signed the strategic cooperation framework agreement with BOC Shenzhen branch (“Shenzhen BOC”).Under the agreement, Shenzhen BOC will provide credit facilities of no more than RMB5 billion for the Company,its subsidiaries and partners in separate loans and multi-bank loans, including without limitation RMB loans,factoring, acceptance draft, discount, letters of guarantee, credit and other forms of financing and credit support tofacilitate the development of PV plants and PV construction. On August 13, the Company entered into the newenergy PV project cooperation framework agreement with Information Industry Electronics 11th Design InstituteSci & Tech Engineering Co., Ltd. (“11th Sic & Tech”). The Company will make investment to build and operatePV plants. 11th Sci & Tech will provide project resources for the construction of PV plants. 11th Sci & Tech willprovide about 500MW of resource for the Company by the end of 2015, 2.5GW by 2020. 11th Sci and Tech willprovide a full range of technical, designing and contracting services for the Company.
      The Company will develop the LED, PV power plant and PV construction businesses rapidly throughacquiring the LED company, and signing strategic cooperation framework agreements with Shenzhen BOC and11th Sci & Technical. The strategy will generate a stable income for the Company and have profound significancein the future income and profit structure of the Company. Accelerating the development of new energy LED andPV businesses will create a profit point for the Company, restructure the Company’s business structure, boost theCompany’s long-term growth, and create substantial returns for shareholders.
      5. Introducing talents and building the corporate culture
      As orders increase rapidly over the past few year and five industry bases are put into operation, the Companyhas further improved the management matrix, optimize the business process, aggressively introduced high-qualityand diligent management and technical professional to build a modern management led by engineers, technicians,comprehensive management executives and technical sales representatives. The Company has paid great efforts tobuilding a positive corporate and harmonious employment relationship by holding the Women’s Day health care
                                                                             2014 Interim Report of China Fangda Group Co., Ltdseminar, Youngers’ Day speech competition, birthday parties for employees on a monthly basis, social clubs forsingle employees, and various outdoor training programs.
      6. Others
      In the report period, the trademark FANGDA was recognized as a nationwide famous trademark by the SAIC,which will help the Company protect the intelligent property right, marking a great achievement for theCompany’s brand building strategy and showing the Company’s competitiveness. The Company was also chosenby Sina Finance as the most promising listed company and received the title of Shenzhen Famous Brand for the12th consecutive year.
    The Company’s wholly-owned subsidiary Shenzhen Fangda Jianke Group Co., Ltd. received the ShenzhenHigh-Quality Engineering Company and the 1994-2014 Sustainable Outstanding Enterprise from ChinaConstruction Metal Structure Association; Shenzhen Kerry Plaza and Shenzhen Gulf Stadium curtain wallprojects undertaken by the Company won the 2013 Guangdong Gold Construction Project prize and 2013Guangdong High-Quality Construction Engineering prize. Shenzhen Kerry Plaza also won the 2013 ShenzhenGolden Bull Engineering prize. Dalian Wanda Mansion curtain wall project won the 2013 Liaoning ConstructionDecoration prize and 2013 Dalian Construction Decoration prize.2. Main business analysisYear-on-year changes in major financial data
                                                                                                                         In RMB
                             This report period     Same period last year         YOY change               Cause of change
    Turnover                           822,792,739.02          736,828,039.88                    11.67%
    Operation cost                     668,447,444.31          584,493,820.44                    14.36%
    Sales expense                       18,245,120.86            17,614,987.09                    3.58%
    Administrative expense              67,185,503.16            57,347,495.40                   17.16%
    Financial expenses                  11,047,478.14            12,213,522.40                    -9.55%
                                                                                                       Decrease in differed
    Income tax expenses                  4,362,903.54             7,795,908.42                   -44.04%
                                                                                                       income tax
    R&D investment                      41,228,960.53            50,595,655.72                   -18.51%
                                                                                                       Increase in the
                                                                                                       development cost ofCash flow generated by
                                  -268,552,729.61             1,089,862.59              -24,740.97% Fangda Plaza and slowbusiness operations, net
                                                                                                       recovery of accounts
                                                                                                       receivable
    Cash flow generated by                                                                                 Decrease in construction
                                    -3,392,292.06           -55,371,598.84                   -93.87%
    investment activities, net                                                                             amounts received
    Net cash flow generated                                                                                Increase in short-term
                                   313,893,052.10            61,738,199.71                  408.43%
    by financing activities                                                                                borrowing
                                                                                                       General result of changesNet increase in cash and
                                    41,940,681.64             7,456,427.28                  462.48% in cash flows due tocash equivalents
                                                                                                       operating, investment
                                                                        2014 Interim Report of China Fangda Group Co., Ltd
                                                                                                 and financing activitiesMajor changes in profit composition or sources during the report period□ Applicable √ InapplicableThe profit composition or sources of the Company have remained largely unchanged during the report period.Delay of future development and plan disclosed in the Company’s IPO prospectus, fund raising prospectus andcapital reorganization report into this report period□ Applicable √ InapplicableNo future development and plan disclosed in the Company’s IPO prospectus, fund raising prospectus and capitalreorganization report is delayed into this report period.Implementation of business plans disclosed in previous periods in this period
      The Company has continued the strategy of developing the curtain wall system and material business andboosted income and profit by providing differential products and solutions, thus consolidating the Company’smarket share. Multiple preliminary orders have entered designing, production and installation stages and willgenerate sales income in the near future. The Fangda Town renovation project has been commenced andconducted as scheduled. The Company has aggressively expanded into new energy industry to optimize theCompany’s business structure and improve the Company’s competitiveness. The Company has set up ShenzhenFangda New Energy Co., Ltd. to develop solar energy PV applications, PV construction and LED industry tocreate new growth driving forces and fuel the Company’s long-term growth.3. Business composition
                                                                                                                    In RMB
                                                                       Year-on-year     Year-on-year       Year-on-year
                     Turnover       Operation cost   Gross margin       change in         change in       change in gross
                                                                     operating revenue operating costs        marginIndustry
    Metal production   757,874,901.80   626,439,954.13          17.34%            12.89%            14.06%              -0.85%ProductCurtain wall
    system and         757,874,901.80   626,439,954.13          17.34%            12.89%            14.06%              -0.85%materialsDistrict
    Domestic           793,400,026.10   655,681,119.68          17.36%            13.96%            15.72%              -1.25%4 Core Competitiveness Analyses(1) Curtain wall system and material
    1. Expertise and brand competitiveness
      In response to the national call for energy saving and emission reduction, the Company has aggressivelydevelop solar electric and optimal and energy-saving curtain walls, developing a series of domestic and globalleading solar and energy-saving curtain wall products. The Company owns 368 curtain wall and material patents
                                                                    2014 Interim Report of China Fangda Group Co., Ltd(including 23 invention patents) and one software copyright, ranking top among domestic peers. It has achievedmany firsts in the industry and created incomparable brand equity, making it an optimal choice in the domestichigh-end curtain wall and material market. FANGDA is a nationwide well-known trademark in China.
    2. Focusing on the high-end market to edge out competitors
      Amid the fierce market competition, the Company has focused on the high-end energy-saving curtain wallmarket and technical integration to improve high-end project quality. Moreover, it has focused resources onhigh-end curtain wall engineering and won several Luban awards, Zhan Tianyou Civil Engineering awards andClassic Construction for the 50th Anniversary of the Foundation of the People’s Republic of China, High-QualityConstruction, White Magnolia Prize and Customer Satisfactory Engineering and the title of “Top 10 CompetitiveChinese Curtain Wall Provider”. The Company has build a leading brand and created a clear edge in the high-endcurtain wall market.
    3. Well-developed industry base landscape
      Thanks to continued investment in facilities, the Company has established a national business landscapewith Shenzhen as the headquarters, Dongguan Songshanhu as the base in the south, Beijing in the north, Chengduin the southwest and Shanghai and Nanchang in the east. The Dongguan Songshanhu and Nanchang bases are thelargest and most advanced curtain wall system and material production bases in China and across the world,fueling the Company to increase its market share and competitiveness.(2) Rail transport equipment business
    1. Technical advantage
      Through continued independent innovation, the Company has developed the global leading metro screendoor system with full intellectual property right and broken the monopoly of overseas competitors. The Companyhas also compiled the Rail Transport Station Screen Door Standard, which is the first of its kind in China. Thestandard was approved in April 2006 and was implemented on March 1, 2007. As the first standard in the industryin China, the standard has played a key role in guiding the development of China’s rail transport screen doorindustry and enabled the Company a dominant lead in the industry. Currently, the Company has 212 metro screendoor patents, including 40 invention patents. 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, Fuzhou, Nanchang, Wuhan, Xi’an, Dalian, Hong Kong,Taipei and Singapore. The Fangda screen door system has grasped a leading market share and establishedincomparable brand influence thanks to its patents, standard and maintenance services. The Company hasemerged as the Chinese No.1 and global No.3 screen door provider, building a large competitive edge in theglobal market.(3) Real Estate
    The Fangda Town renovation project is well-positioned and enjoys express transport, unique landscaperesources, preferential policies and moderate competition in the district. In additional industry buildings fordomestic use, the project comprises about 100,000 m2 of industry buildings for sales, 20,000 m2 of businessproperty and 70,000 m2 of industry buildings for lease. The project will be put into pre-sales in Q4 2015 and soldout in 2017. The project will buoy the Company’s net assets and total assets, bring strong cash flows for theCompany, provide capital support for the development of businesses, and gain experience in the real-estatedevelopment industry.(4) New energy industry
    In the report period, the Company set up the Shenzhen Fangda New Energy Co., Ltd. to develop solar energyPV applications, PV construction and LED industry. The move will extend the Company’s energy-saving and
                                                                           2014 Interim Report of China Fangda Group Co., Ltdenvironment protection business, coincide with the national plan and industry policies as well as the developmenttrend of the industry.
    1. Technical advantage
    With more than ten years’ experience in developing solar energy PV power generating curtain walltechnology, the Company is the earliest company that masters the intelligent property right in the designing,production and integration of solar energy PV curtain wall systems and is a pioneer in the application of PVcurtain wall technology. The Company built the first solar energy PV integrated building curtain wall system inChina – Shenzhen Fangda Building photoelectric curtain wall system.
    2. Relation with other industries
    The solar power PV industry is closely related to the other businesses of the Company. The distributed solarenergy PV system is related to construction. Moreover, the Company has more than 10 years' experience inelectrical product integration. The Company also has more than 20 years’ experience in construction managementand has the level-1 construction curtain wall engineering qualification and electrical installation engineeringqualification.
    3. Strategic advantageThe Company is engaged in the upper, middle and downstream of the LED industry and is familiar with industrypolicies in China. Currently, the Company is acquiring LED companies to realize fast expansion in the LEDbusiness and seek to create a new profit source for the Company.VI. Investment1. External equity investmentThe Company made no external investment in the report period.(2) The Company held no stake in financial companies in the report period.(3) The Company made no investment in securities in the report period2. Trust wealth management, investment in derivatives and entrustment loan(1) The Company made no trust investment in the report period(2) Derivative investment√ Applicable □ Inapplicable
                                                                                                                 In RMB10,000
                                                                                                             Proportio
    Derivativ                                                                                                      n of       Actual
                                                                                      Impairme
    e                    Related                                           Initial                 Closing    closing    gain/loss
            Relations                       Initial                                      nt
    investme                transactio   Type             Start date End date investmen               investmen investmen     in the
              hip                           amount                                    provision
    nt                      n                                             t amount                t amount t amount       report
                                                                                      (if any)
    operator                                                                                                     in the      period
                                                                                                              closing
                                                                                    2014 Interim Report of China Fangda Group Co., Ltd
                                                                                                                    net assets
                                                                                                                      in the
                                                                                                                     report
                                                                                                                     periodShanghai
                                   Shanghai                 May 5,    July 23,
    Futures    None        No                         1459.21                                 0           0    398.85      0.34%           6.27
                                   aluminum                 2014      2014Exchange
    Total                                             1459.21      --           --            0           0    398.85      0.34%           6.27
    Capital source                                  Self-owned fund
    Lawsuit (if any)                                InapplicableDisclosure date of derivative investment
                                                Noneapproval by the Board of Directors (if any)Disclosure date of derivative investment
    approval by the Shareholders’ Meeting (if      Noneany)
                                                To prevent the risk of fluctuation of raw material prices, the Company adopted theRisk analysis and control measures for the
                                                aluminum futures exchanged at the domestic futures exchange to provide hedging forderivative holding in the report period
                                                aluminum as a raw material for the Company. The Company has set up and(including without limitation market,
                                                implemented the Provincial Regulations on China Fangda Group Domestic Futuresliquidity, credit, operation and legal risks)
                                                Hedging to prevent risks.Changes in the market price or fair valueof the derivative in the report period, the
                                                The fair value of the derivative should be calculated with the open quotation of theanalysis of the derivative’s fair value
                                                futures market and should be reviewed regularly to ensure effective hedging.should disclose the method used andrelated assumptions and parameters.Material changes in the accounting policies
    and rules related to the derivative in the      Noreport period compared to last periodOpinions of independent directors on theCompany’s derivative investment and risk Nonecontrolling(3) Trusted loans□ Applicable √ InapplicableThe Company borrowed no trust loan in the report period.
                                                                                       2014 Interim Report of China Fangda Group Co., Ltd3. Use of raised capital(1) Overview√ Applicable □ Inapplicable
                                                                                                                             In RMB10,000
    Total amount of the raised capital                                                                                                   33,658.69
    Total raised capital invested in the report period                                                                                        624.22
    Total accumulative raised capital invested                                                                                           31,294.63Amount of raised capital of which the purpose was
                                                                                                                                                0changed in the report periodAccumulative amount of raised capital of which the
                                                                                                                                           6,000purpose has been changedProportion of raised capital of which the purpose has
                                                                                                                                       17.83%been changed
                                                        Notes to use of raised capitalBy the end of the report period, the Company has strictly comply with the Instruction on Standard Operation of PLCs on the MainBoard of Shenzhen Stock Exchange and provisions for use and management of raised capital of the Company to deposit and use theraised capital.(2) Promised raised-capital-based projects√ Applicable □ Inapplicable
                                                                                                                             In RMB10,000
                                 If
                                                                                      Investme       Date
                           investme Promised                             Accumul
    Project promised to be                                                                     nt      when the              Whether       Any
                           nt project     total    Adjusted Investme       ative                               Profit
    invested with the raised                                                              progress      project                the        major
                                 is     investme     total     nt in the investme                             realized
    capital and investment                                                                   by the     become               estimate change in
                           changed nt of the investme           report   nt by the                             in the
    of the excessive raised                                                               end of the useable                 profit is        the
                           (includin     raised      nt (1)    period    end of the                           period
         capital                                                                      period (3)      as                 realized feasibility
                           g partial     capital                         period (2)
                                                                                      =(2)/(1) proposed
                           change)Promised investment projectsEnergy-saving and PV
                                                                                                   June 30,
    curtain wall production Yes               21,000      27,000     511.67 25,250.74        93.52%                4,042.3 Yes           No
                                                                                                   2013expansion project
                                                                                                   Decembe2. PSD production
                           Yes          12,658.69 6,658.69       112.55 6,043.89         90.77% r 31,                                Noexpansion project
                                                                                                   2012
    Subtotal of promised             --     33,658.69 33,658.69      624.22 31,294.63          --          --      4,042.3       --           --
                                                                                    2014 Interim Report of China Fangda Group Co., Ltdinvestment projectsInvestment of excessive raised capital
    Total                          --    33,658.69 33,658.69      624.22 31,294.63        --        --       4,042.3     --           --Reason or situation that
    not on schedule (on        Nonespecific project)Notes to major changes
                           Nonein project feasibilityAmount, purpose anduse of excessive raised Inapplicablecapital
                           Applicable
                           Occurred in previous yearsChanges in
    implementation place       To improve the Company's industry landscape, simplify the Company’s management and reduce
    of investment funded       management costs, the 24th meeting of the 5th term of the Board of the Company approved the proposal of
    by raised capital          changing the 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.
                           ApplicableAdjustment of the
                           Occurred in previous yearsimplementation way of
    investment funded by       On March 9, 2012, the 1st provisional shareholders’ meeting of the Company approved the adjustment
    raised capital             proposal to put the RMB60 million for the metro screen door production expansion to the energy-saving
                           and photo-electric curtain wall production expansion project.
                           Applicable
                           On September 30, 2010, it was decided to use the raised capital of RMB4,347,753.09 to replace the
    Initial use of raised      investment made previously by Fangda Automatic RMB1,403,503.00 and Fangda Jianke
    fund in projects and       RMB2,944,250.09. This has been verified by CPA with report 天健正信审(2010)专字第 020722 号.The
    replacement                exchange of a self-financed capital of RMB4,347,753.09 using the raised capital has been verified by
                           Ascenda Certified Public Accountants with 天健正信审(2010)专字第 020722 号 and Self-Raised
                           Capital Investment Project Verification Report issued.
                           Applicable
                           On March 28, 2011, payment of RMB20 million was made from idle proceeds to Fangda Jianke; and
                           RMB10 million was made to Fangda Automatic. On 19.08.11, the returned idle capital RMB30 million
                         was transferred to raise capital account. On August 23, 2011, payment of RMB20 million was made fromIdle raised capital used idle raised capital to Fangda Jianke; and RMB10 million was made to Fangda Automatic. On February 16,
    as working capital       2012, the returned idle capital RMB30 million into the raised capital account. On 22.02.12, payment of
                           RMB20 million was made from idle proceeds to Fangda Jianke; 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 17.08.12, payment of RMB20 million was made from idle proceeds to Fangda Jianke; and RMB10
                           million was made to Fangda Automatic. On February 4, 2013, the returned idle capital RMB30 million was
                                                                                        2014 Interim Report of China Fangda Group Co., Ltd
                           transferred to raised capital account. On February 25, 2013, payment of RMB22 million was made from
                           idle proceeds to Fangda Jianke; and RMB8 million was made to Fangda Automatic. On July 15, 2013, the
                           returned idle capital RMB30 million was transferred to raised capital account.
                           Applicable
                           On July 31, 2013, a remaining raised capital (including interest income) of RMB27,437,151.69 was used to
                           replenish the working capital of the company. The remaining raise capital was due to: 1. the Company
    Surplus of investment      strictly implements multi-supply purchase system and project tendering and bidding regulations, thus
    and cause                  trimming the engineering and equipment purchase costs. 2. in the process of engineering and construction,
                           the Company has taken effective measures to control, supervise and manage engineering costs. 3. The
                           Company has taken effective measures to improve utilization of its resources and optimize its processes to
                           cut the project investment.Use plan of retained
                           Inapplicablefund from financingProblem or situation in
    using of raised capital    Noneand disclosing(3) Altering of projects financed by raised capital√ Applicable □ Inapplicable
                                                                                                                             In RMB10,000
                                  Total                     Accumulati                                                           Any major
                                                                         Investment Date when
                             investment         Actual       ve actual                                              Whether the change in
             Correspondi                                                 progress by the project        Profit
    Altered                     of raised      investment investment                                                   estimate         the
             ng promised                                                  the end of      become      realized in
    project                     capital in     in the report by the end                                                profit is   feasibility
                 project                                                  the period     useable as   the period
                              the altered       period        of the                                                 realized     after the
                                                                         (3)=(2)/(1)    proposed
                              project (1)                   period (2)                                                            alterationEnergy-savi Energy-savi
    ng and PV    ng and PV
    curtain wall curtain wall                                                               June 30,
                                   27,000          511.67    25,250.74       93.52%                       4,042.3 Yes            No
    production production                                                                   2013
    expansion    expansion
    project      project
    2. PSD       2. PSD
    production production                                                                   December
                                  6,658.69         112.55     6,043.89       90.77%                                              No
    expansion    expansion                                                                  31, 2012
    project      project
    Total              --          33,658.69          624.22     31,294.63        --               --         4,042.3       --            --
    Alteration reason, decision-making           The screen door project in Nanchang aimed to use a plant in Dafang Jiangxi new materialprocess and information disclosure (by industry zone as the production base. This can reduce the investment of RMB60 million for
    project)                                     new plant, office and facilities. According to the resolution of the 24th meeting of the 5th
                                                                                         2014 Interim Report of China Fangda Group Co., Ltd
                                              term of the Board, the proposal of changing the implementation place of the energy-saving
                                              and photo-electric curtain wall production 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 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.
                                              As the screen door projects need long period of time, the process from undertaking orders
                                              to realizing revenue is long. In 2013 and report period, the Company undertook orders
    Reason or situation that not on               worth RMB526 million, accounting for nearly 70% of all orders in the country. At the end
    schedule (on specific project)                of report period, orders without delivery totaled RMB593 million. The screen door
                                              production project will underpin us to transform these orders into sales and help us
                                              undertake more orders in the future.Notes to major changes in project
                                              Nonefeasibility after the alteration(4) Projects financed by raised capital
    Projects financed by raised capital                       Date of disclosure                      Index for information disclosureThe Company's Raised Capital Deposit
                                                                August 26, 2014                              www.cninfo.com.cnand Use Report 2014 Interim4. Analysis of major subsidiaries and joint-stock companies√ Applicable □ InapplicableMajor subsidiaries and joint-stock companies
                                                                                                                                     In RMB
                                                  Main
                                                             Registered                                              Operation
    Company           Type            Industry    products or                Total assets Net assets      Turnover                  Net profit
                                                               capital                                                 profit
                                                 services
    Fangda                                         Curtain       310,000,00 2,043,306,9 531,396,76 701,733,13 48,621,43 42,467,792.0
              Subsidiary       Decoration
    Jianke                                         wall system 0                     67.30          4.86          5.72        2.87                15. Major projects of non-raised capital□ Applicable √ InapplicableThe Company has no major project financed not by raised capital in the report period.VI. Forecast of operating performance between January and September in 2014Warning and reasons of possible net loss or substantial change from the last period between the beginning of theyear and the end of the next report period
                                                                                     2014 Interim Report of China Fangda Group Co., Ltd□ Applicable √ InapplicableVII. Statement of the Board on the “non-standard auditors report” issued by the CPA on thecurrent report period□ Applicable √ InapplicableVIII. Statement of the Board of Directors on the Non-standard Auditors Report for H1 2014□ Applicable √ InapplicableIX. Implementation of Profit Distribution of the Company in the Report PeriodProfit distribution plans implemented during the report period, especially cash dividend and reserve capitalizationplans√ Applicable □ Inapplicable
    The 2013 Profit Distribution Proposal was approved on the 28th meeting of the 6th Board of Director held onMarch 7, 2014 and will be confirmed after being reviewed at the 2013 General Shareholders' Meeting held onMarch 31, 2014. A cash dividend of RMB0.30 (tax inclusive) will be paid on each ten shares to all shareholderson the basis of 756,909,905 shares with a total amount of RMB22,707,297.15. The planning, review andimplementation procedure of the profit distribution complies with related laws and regulations and the Company’sArticles of Association. The profit distribution plan was implemented on April 15, 2014 (see the Announcementon Implementation of the 2013 Equity Distribution Plan 2014-29).
                                             Explanation of Cash Dividend Distribution PoliciesComply with the Articles of Association or resolution made at
                                                                      Yesthe General Shareholders' Meeting
    Clear and definite distribution standard and proportion               Yes
    Decision-making procedure and mechanism                               Yes
    Independent directors fulfill their duties                            YesMiddle and small shareholders express their opinions and claims.
                                                                      YesThere rights are well protected.Cash dividend distribution policies are adjusted or revised
                                                                      Inapplicableaccording to lawX. Profit Distribution and Reserve Capitalization Plan in the Report Period□ Applicable √ InapplicableThe Company distributed no cash dividends or bonus shares and has no reserve capitalization plan.XI. Reception of investigations, communications, or interviews in the reporting period√ Applicable □ Inapplicable
                                                               2014 Interim Report of China Fangda Group Co., Ltd
                                                                                        Main content involved and
    Time/date         Place            Way           Visitor             Visitor
                                                                                            materials provided
                                                                  Industrial
                                                                  Securities,
                              Onsite                                                    Business and future
    March 13, 2014   Shenzhen                     Institution         Goldstate
                              investigation                                             development
                                                                  Securities and
                                                                  Guosen Securities
                              Onsite                              Goldstate             Business and future
    March 18, 2014   Shenzhen                     Institution
                              investigation                       Securities            development
                              Onsite                                                    Business and future
    March 19, 2014   Shenzhen                     Institution         Essences Securities
                              investigation                                             development
                              Onsite                              Dongxing              Business and future
    April 23, 2014   Shenzhen                     Institution
                              investigation                       Securities            development
                              Onsite                                                    Business and future
    May 14, 2014     Shenzhen                     Institution         Minsen Investment
                              investigation                                             development
                                                                  Industrial
                                                                  Securities,
                                                                  Citic-Prudential
                                                                  Fund, CCFund,
                              Onsite                              Fortune SG Fund,      Business and future
    May 21, 2014     Shenzhen                     Institution
                              investigation                       Bosera Fund,          development
                                                                  Essence Fund,
                                                                  Galaxy AMC,
                                                                  Qianhai QianBaBa
                                                                  Fund
                              Onsite                                                    Business and future
    June 26, 2014    Shenzhen                     Institution         China Post Fund
                              investigation                                             development
                                                                2014 Interim Report of China Fangda Group Co., Ltd
                                       V Significant EventsI. Corporate GovernanceThe corporate governance complies with the Company Law and related requirements of CSRC.II. The Company has no significant lawsuit or arbitration affair in the report period.III. The Company has no significant affair that arouses media questioning.IV. The Company has no bankruptcy or reorganization events in the report period.V. Assets trade1. The Company required no assets in the report period.2. The Company sold no assets in the report period.3. The Company merged no company in the report period.VI. The Company made or implement no option incentive scheme in the report period.VII. Material related transactionsThe Company made no related transaction related to daily operating in the report period.2. The Company made no related transaction of assets requisition and sales in the report period.3. The Company made no related transaction of joint external investment in the report period.4. The Company had no related debt in the report period.5. The Company has no other significant related transaction in the report period.VIII. The controlling shareholder and its affiliates occupied no capital for non-operatingpurpose of the Company during the report period.IX. Significant contracts and performance1. Asset entrusting, leasing, contracting(1) The Company made no custody in the report period
                                                                           2014 Interim Report of China Fangda Group Co., Ltd(2) The Company made no contract in the report period(3) Leasing√ Applicable □ InapplicableLeasingThe Company leases investment real estate and obtained a lease income of RMB12,305,300 million in the reportperiod.The Company leased no projects that create gains accounting for over 10% of the Company’s total profit in thereport period.2. GuaranteeThe Company made no external guarantee (excluding for subsidiaries)
                                                                                                               In RMB10,000
                                           Guarantee provided to subsidiaries
    Guarantee        Date of    Guarante    Actual date        Actual           Type of       Term        Comple   Related
    provided to      disclosur   e amount    of occurring     amount of          guarantee                 ted or    party
                       e                    (signing date     guarantee                                    not
                                                  of
                                            agreements)
    Fangda Jianke      March          60,000   October 29,         30,449.89    Joint           since         No       No
                   23, 2013                2013                             liability       engage of
                                                                                            contract to
                                                                                            2 years
                                                                                            upon due
                                                                                            of debt
    Fangda Jianke      August         20,000   September           14,836.31    Joint           since         No       No
                   10, 2013                27, 2013                         liability       engage of
                                                                                            contract to
                                                                                            2 years
                                                                                            upon due
                                                                                            of debt
    Fangda Jianke      March          21,000   November 5,          17,639.5    Joint           since         No       No
                   23, 2013                2013                             liability       engage of
                                                                                            contract to
                                                                                            2 years
                                                                                            upon due
                                                                                            of debt
    Fangda Automatic   March          20,000   July 23, 2013        19,212.7    Joint           since         No       No
                   23, 2013                                                 liability       engage of
                                                                                            contract to
                                                                                    2014 Interim Report of China Fangda Group Co., Ltd
                                                                                                   2 years
                                                                                                   upon due
                                                                                                   of debt
    Fangda Jiangxi          March           7,080    April 11,            1,712.78       Joint         since         No       No
    New Material            11, 2014                 2014                                liability     engage of
                                                                                                   contract to
                                                                                                   2 years
                                                                                                   upon due
                                                                                                   of debt
    Fangda Jiangxi          March           8,000    May 5, 2014          5,498.61       Joint         since         No       No
    New Material            11, 2014                                                     liability     engage of
                                                                                                   contract to
                                                                                                   2 years
                                                                                                   upon due
                                                                                                   of debt
    Fangda Jiangxi          March           2,000    April 29,                 526.22    Joint         since         No       No
    New Material            11, 2014                 2014                                liability     engage of
                                                                                                   contract to
                                                                                                   2 years
                                                                                                   upon due
                                                                                                   of debt
    Fangda Property         January        21,000    January 29,               21,000    Joint         since         No       No
                        4, 2014                  2014                                liability     engage of
                                                                                                   contract to
                                                                                                   2 years
                                                                                                   upon due
                                                                                                   of debt
    Total of guarantee to                                    38,080   Total of guarantee to                                  66,281.24
    subsidiaries approved in the                                      subsidiaries actually
    report period                                                     occurred in the report
                                                                  period
    Total of guarantee to                                   159,080   Total of balance of                                  110,876.01
    subsidiaries approved as of the                                   guarantee actually provided
    report period                                                     to the subsidiaries as of end
                                                                  of report periodTotal of guarantee provided by the Company (total of the above two)
    Total of guarantee approved in                           38,080   Total of guarantee occurred                            66,281.24
    the report term                                                   in the report term
    Total of guarantee approved as                          159,080   Total of guarantee occurred                          110,876.01
    of end of report term                                             as of the end of report term
    Percentage of the total guarantee occurred on net asset of the                                                             94.06%
                                                                       2014 Interim Report of China Fangda Group Co., LtdCompanyIncluding:
    Amount of guarantee over 50% of the net asset                                                               51,939.73
    Total of the above 3                                                                                        51,939.73
    Statement on the possible joint liabilities on the guarantees   Nonenot due yet (if any)
    Statement of external guarantees violating the procedure (if    Noneany)The Company made no incompliant external guarantee in the report period.3. The Company entered into no other significant contract in the report.4. The Company entered into no other significant contract in the report period.X. The Company and shareholders with more than 5% stakes in the Company made noguarantee in the report period or before report period but remaining effective in the reportperiod.XI. Engaging and dismissing of CPAWhether the interim financial report is audited□ Yes √ NoXII. The Company received no penalty and made no correction in the report period.XIII. The Company has no risks of delisting due to violating laws in the report period.XIV. The Company had no other significant event to be explained in the report period.
                                                                            2014 Interim Report of China Fangda Group Co., Ltd
                         VI Changes in Share Capital and Shareholders1. Changes in shares
                                                                                                                         In share
                                Before the change                      Change (+,-)                        After the change
                                                     Issued             Transferre
                                                              Bonus                                                   Proportio
                               Amount Proportion      new                d from       Others   Subtotal   Amount
                                                              shares                                                     n
                                                     shares              reservesI. Shares with trade
                                779,292      0.10%                                                         779,292       0.10%restriction conditions
    3. Other domestic shares        779,292      0.10%                                                         779,292       0.10%
        Domestic natural
                                779,292      0.10%                                                         779,292       0.10%person shares
    II. Shares without trading     756,130,6                                                                  756,130,6
                                           99.90%                                                                       99.90%
    limited conditions                   13                                                                         13
                               420,179,4                                                                  420,179,4
    1. Common shares in RMB                    55.51%                                                                       55.51%
                                     25                                                                         25
    2. Foreign shares in           335,951,1                                                                  335,951,1
                                           44.39%                                                                       44.39%
    domestic market                      88                                                                         88
                               756,909,9                                                                  756,909,9
    III. Total of capital shares               100.00%                                                                    100.00%
                                     05                                                                         05Reasons□ Applicable √ InapplicableApproval of the change□ Applicable √ InapplicableShare transfer□ Applicable √ InapplicableImpacts on financial indicators including basic and diluted earnings per share, net assets per share attributable tocommon shareholders of the company in the most recent year and period□ Applicable √ InapplicableOthers that need to be disclosed as required by the securities supervisor□ Applicable √ InapplicableStatement of changes in share number and shareholder structure, assets and liabilities structure□ Applicable √ Inapplicable
                                                                                       2014 Interim Report of China Fangda Group Co., Ltd2. Shareholders and shareholding
                                                                                                                                    In share
                                                                       Number of shareholders ofNumber of shareholders of
                                                                       preferred stocks of which
    common shares at the end of the                               46,291                                                                      0
                                                                       voting rights recovered in thereport period
                                                                       report period
                               Shareholders holding 5% of the Company's shares or top-10 shareholders
    Shareholder     Propertie Shareholdin      Number of         Change in the         Condition      Amount of         Pledging or freezing
                      s of          g        shares held at    reporting period        al shares   shares without
                                                                                                                       Share     Amount
                   sharehold                 the end of the                                        sales restriction
                                                                                                                       status
                       er                      reporting
                                                period
    Shenzhen           Domestic          9.09%      68,774,273                        0            0        68,774,273 Pledged        32,510,000
    Banglin            non-state
    Technologies       legal
    Development        personCo., Ltd.
    Shengjiu           Foreign           4.75%      35,929,581             +9,283,075              0        35,929,581
    Investment Ltd.    legal
                   person
    Huang Jupei        Domestic          4.24%      32,068,920             +7,151,720              0        32,068,920
                   natural
                   person
    Zhou Shijian       Domestic          2.79%      21,123,481         +21,123,481                 0        21,123,481
                   natural
                   person
    Shenzhen Shilihe Domestic            2.36%      17,860,992                        0            0        17,860,992
    Investment Co.,    non-state
    Ltd.               legal
                   person
    Wang Shaolin       Domestic          2.28%      17,272,486               +472,486              0        17,272,486
                   natural
                   person
    Bank of            Others            1.72%      13,028,408         +13,028,408                 0        13,028,408Communication –HuaanChuangxinSecuritiesInvestment Fund
    Jiang Jing         Domestic          1.41%      10,635,440                        0            0        10,635,440
                                                                                 2014 Interim Report of China Fangda Group Co., Ltd
                   natural
                   person
    Zhao Bing          Domestic          1.38%     10,420,126         +10,420,126               0     10,420,126
                   natural
                   person
    Lou Chenglin       Domestic          0.73%       5,500,000         +5,500,000               0      5,500,000
                   natural
                   person
    A strategic investor or       Noneordinary legal personbecomes the Top10shareholder due a stockissue.Notes to top ten shareholder Among the shareholders, Shenzhen Banglin Technology Development Co., Ltd. and Shengjiu
    relationship or "action in    Investment Co., Ltd. are parties action-in-concert. Shenzhen Banglin Technology Development Co.,
    concert"                      Ltd. and Shenzhen Shilihe Investment Co., Ltd. are related parties. The Company is not notified of
                              other action-in-concert or related parties among the other holders of current shares.
                                               Top 10 holders of unconditional shares
                                                                                                          Category of shares
               Shareholder                     Amount of shares without sales restriction           Category of
                                                                                                                        Amount
                                                                                                       shares
    Shenzhen Banglin Technologies                                                                    RMB common
                                                                                    68,774,273                            68,774,273
    Development Co., Ltd.                                                                            shares
                                                                                                 Foreign shares
    Shengjiu Investment Ltd.                                                            35,929,581 listed in domestic         35,929,581
                                                                                                 exchanges
                                                                                                 RMB common
    Huang Jupei                                                                         32,068,920                            32,068,920
                                                                                                 shares
                                                                                                 RMB common
    Zhou Shijian                                                                        21,123,481                            21,123,481
                                                                                                 shares
                                                                                                 RMB common
    Shenzhen Shilihe Investment Co., Ltd.                                               17,860,992                            17,860,992
                                                                                                 shares
                                                                                                 RMB common
    Wang Shaolin                                                                        17,272,486                            17,272,486
                                                                                                 shares
    Bank of Communication – Huaan                                                                   RMB common
                                                                                    13,028,408                            13,028,408
    Chuangxin Securities Investment Fund                                                             shares
                                                                                                 RMB common
    Jiang Jing                                                                          10,635,440                            10,635,440
                                                                                                 shares
    Zhao Bing                                                                           10,420,126 RMB common                 10,420,126
                                                                                  2014 Interim Report of China Fangda Group Co., Ltd
                                                                                                  shares
                                                                                                  RMB common
    Lou Chenglin                                                                          5,500,000                               5,500,000
                                                                                                  sharesNo action-in-concert or related parties Among the top 10 shareholders, Shenzhen Banglin Technology Development Co., Ltd. and
    among the top10 unconditional             Shengjiu Investment Co., Ltd. are parties action-in-concert. Shenzhen Banglin Technology
    shareholders and between the top10        Development Co., Ltd. and Shenzhen Shilihe Investment Co., Ltd. are related parties. The
    unconditional shareholders and the        Company is not notified of other action-in-concert or related parties among the other
    top10 shareholders                        holders of current shares.
                                          Huang Jupei holds 32,063,920 shares of the Company through GF Securities customer
                                          credit transaction guarantee securities account; Zhou Shijian holds 21,123,481 shares of the
                                          Company through GF Securities customer credit transaction guarantee securities account,Participation by top-10 shareholders in
                                          Zhao Bing holds 900,000 shares of the Company through Everbright Securities customerfinancing bonds (if any)
                                          credit transaction guarantee securities account; Lou Chenglin holds 5,500,000 shares of the
                                          Company through China Investment Securities customer credit transaction guarantee
                                          securities account.There is no agreed re-purchasing by top-10 shareholders in the report period.3. Neither the controlling shareholder nor the substantial controller of the Company haschanged in the report period.4. Statement on share increasing proposal raised by the shareholders or theiraction-in-concert parties in the reporting period
                                                                                                                      Disclosure date of
    Name of
                                          Proportion of                        Actual proportion Initial disclosure the share increase
    shareholder/       Number of shares                      Actual number of
                                          shares to be                             of shares      date of the share         plan
    action-in-concert     to be increased                      shares increased
                                           increased                               increased        increase plan      implementation
    parties
                                                                                                                         completionShengjiu
                                                                   9,283,075              1.23%Investment Ltd.
                                                                 2014 Interim Report of China Fangda Group Co., Ltd
        VII Particulars about the Directors, Supervisors, and Senior
                                                 Management1. Changes in shareholding of Directors, Supervisors and Senior ManagementThe Company’s Directors, supervisors and senior management shareholding has remained unchanged during thereport period. For details, please refer to the 2013 annual report.2. Changes in the Directors, Supervisors and Senior Executives√ Applicable □ Inapplicable
    Name                   Job              Type         Date                Reason
                                                                         Term expired and
    Xiong Jianming    Chairman, president      Elected   March 31, 2014
                                                                             re-elected
                                                                         Term expired and
    Wang Shengguo Director, vice president      Elected   March 31, 2014
                                                                             re-elected
                                                                         Term expired and
    Xiong Jianwei           Director           Elected   March 31, 2014
                                                                             re-elected
                   Director, secretary of                                Term expired and
    Zhou Zhigang                               Elected   March 31, 2014
                        the Board                                            re-elected
                                                                         Term expired and
    Huang Yaying      Independent director     Elected   March 31, 2014
                                                                             re-elected
                                                                         Term expired and
    Guo Wanda        Independent director     Elected   March 31, 2014
                                                                             re-elected
                                                                         Term expired and
    Lin Bin        Independent director     Elected   March 31, 2014
                                                                             re-elected
                  Supervisory Committee                                  Term expired and
    Zhen Hua                                 Elected   March 31, 2014
                    meeting convener                                         re-elected
                                                                         Term expired and
    Yin Changjian          Supervisor          Elected   March 31, 2014
                                                                             re-elected
                                                                         Term expired and
    Zen Xiaowu            Supervisor          Elected   March 31, 2014
                                                                             re-elected
                                                                         Term expired and
    Lin Kebin      Vice president and CFO    Engaged   March 31, 2014
                                                                             re-elected
                                                                         Term expired and
    Wei Yuexing         Vice president        Engaged   March 31, 2014
                                                                             re-elected
                                                                    2014 Interim Report of China Fangda Group Co., Ltd
                                                                            Term expired and
    Guo Jinlong     Independent director   Leaving office   March 31, 2014
                                                                                re-elected
                                                                            Term expired and
    Shao Hanqing    Independent director   Leaving office   March 31, 2014
                                                                                re-elected
                                                                            Term expired and
    Yu Guoan           Supervisor         Leaving office   March 31, 2014
                                                                                re-elected
                                                                            Term expired and
    Cao Naisi          Supervisor         Leaving office   March 31, 2014
                                                                                re-elected
                                                                            Term expired and
    Yang Xioazhuan      Vice president      Leaving office   March 31, 2014
                                                                                re-elected
                                                                        2014 Interim Report of China Fangda Group Co., Ltd
                                        VIII Financial Statements1. Auditors reportThe financial statements for H1 2014 have not been audited.2. Financial statementsUnit for statements in notes to financial statements: RMB yuan1. Consolidated Balance SheetPrepared by: China Fangda Group Co., Ltd.
                                                                                                                   In RMB
                  Items                        Closing balance                              Ending balanceCurrent asset:
    Monetary capital                                         307,429,623.20                              333,876,921.97
    Settlement provision
    Outgoing call loan
    Transactional financial assets
    Notes receivable                                            10,729,852.00                               21,898,770.43
    Account receivable                                       993,638,618.20                              898,780,981.93
    Prepayment                                                  46,893,077.41                               28,364,016.21
    Insurance receivable
    Reinsurance receivable
    Provisions of Reinsurancecontracts receivable
    Interest receivable                                            20,800.00                                   36,387.50
    Dividend receivable
    Other receivables                                           65,536,182.96                               66,298,730.17
    Repurchasing of financial assets
    Inventory                                                786,872,945.78                              428,537,851.82
    Non-current assets due in 1 year
    Other current assets                                        89,808,955.68
    Total current assets                                       2,300,930,055.23                             1,777,793,660.03Non-current assets:
                                                     2014 Interim Report of China Fangda Group Co., Ltd
    Disburse of consigned loans
    Sellable financial assets
    Investment held until mature
    Long-term receivable
    Long-term share equity investment        9,952,757.98                               9,994,565.55
    Investment real estate                 189,468,158.14                             195,249,069.13
    Fixed assets                           458,760,985.23                             462,930,269.98
    Construction in process                    182,694.92                                 940,841.00
    Engineering materials
    Disposal of fixed assets                    32,625.31                                 177,298.11
    Productive biological assets
    Gas & petrol
    Intangible assets                       91,199,895.95                              91,527,650.52
    R&D expense
    Goodwill
    Long-term amortizable expenses           3,925,316.69                               3,799,354.79
    Deferred income tax assets              45,658,823.25                              41,166,043.56
    Other non-current assets                25,478,789.90                              15,978,789.90
    Total of non-current assets                 824,660,047.37                             821,763,882.54
    Total of assets                            3,125,590,102.60                          2,599,557,542.57Current liabilities
    Short-term loans                       725,000,000.00                             369,000,000.00
    Loans from Central Bank
    Deposit received and held forothers
    Call loan received
    Transactional financial liabilities
    Notes payable                          202,336,802.87                             188,570,850.63
    Account payable                        650,805,706.90                             489,216,140.32
    Prepayment received                    144,109,711.31                             168,386,251.94
    Selling of repurchased financialassets
    Fees and commissions payable
    Employees’ wage payable                17,028,555.42                              30,182,851.80
    Taxes payable                           52,316,813.48                              44,839,947.77
                                                       2014 Interim Report of China Fangda Group Co., Ltd
       Interest payable                           884,716.66                                 689,153.75
       Dividend payable
       Other payables                          49,463,331.24                              41,687,580.72
       Reinsurance fee payable
       Insurance contract provision
       Entrusted trading of securities
       Entrusted selling of securities
       Non-current liabilities due in 1year
       Other current liabilities
    Total current liabilities                    1,841,945,637.88                          1,332,572,776.93Non-current liabilities:
       Long-term loans
       Bond payable
       Long-term payable
       Special payables
       Anticipated liabilities
       Deferred income tax liabilities         40,858,031.32                              40,656,763.97
       Other non-current liabilities           10,158,474.47                              10,255,823.93
    Total of non-current liabilities               51,016,505.79                              50,912,587.90
    Total liabilities                            1,892,962,143.67                          1,383,485,364.83Owners’ equity (or shareholders’equity)
       Capital paid in (or share capital)     756,909,905.00                             756,909,905.00
       Capital reserves                        79,226,752.01                              79,191,052.01
       Less: Shares in stock
       Special reserves
       Surplus reserves                        46,389,142.21                              46,389,142.21
       Common risk provisions
       Retained profit                        296,212,292.72                             278,149,631.63
       Difference caused by translation offoreign currency statementsTotal of owner’s equity belong to the
                                             1,178,738,091.94                          1,160,639,730.85parent company
       Minor shareholders’ equity             53,889,866.99                              55,432,446.89
                                                                               2014 Interim Report of China Fangda Group Co., LtdTotal of owners’ equity (or
                                                                  1,232,627,958.93                             1,216,072,177.74shareholders’ equity)Total of liability and owners’ equity (or
                                                                  3,125,590,102.60                             2,599,557,542.57shareholders’ equity)
    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                               Closing balance                             Ending balanceCurrent asset:
    Monetary capital                                                  7,499,144.67                            68,223,808.76
    Transactional financial assets
    Notes receivable
    Account receivable                                                 604,459.49                                604,459.49
    Prepayment                                                          43,089.61                                218,984.07
    Interest receivable
    Dividend receivable                                          39,356,000.00                                39,356,000.00
    Other receivables                                           588,210,866.78                               571,620,659.73
    Inventory
    Non-current assets due in 1 year
    Other current assets                                               689,184.18
    Total current assets                                             636,402,744.73                               680,023,912.05Non-current assets:
    Sellable financial assets
    Investment held until mature
    Long-term receivable
    Long-term share equity                                      719,686,503.56                               719,728,311.13investment
    Investment real estate                                      163,615,954.05                               174,778,756.62
    Fixed assets                                                 60,399,293.21                                48,117,849.19
    Construction in process                                                                                      914,126.00
    Engineering materials
    Disposal of fixed assets
                                                         2014 Interim Report of China Fangda Group Co., Ltd
       Productive biological assets
       Gas & petrol
       Intangible assets                        2,120,864.58                               1,351,845.98
       R&D expense
       Goodwill
       Long-term amortizable expenses              79,002.15                                  50,314.43
       Deferred income tax assets              13,638,159.39                             12,342,430.37
       Other non-current assets
    Total of non-current assets                   959,539,776.94                            957,283,633.72
    Total of assets                              1,595,942,521.67                          1,637,307,545.77Current liabilities
       Short-term loans                       200,000,000.00                            104,000,000.00
       Transactional financial liabilities
       Notes payable
       Account payable                            606,941.85                               1,849,090.36
       Prepayment received                        693,045.60                                798,586.70
       Employees’ wage payable                   841,088.14                               1,881,681.86
       Taxes payable                              561,161.47                                260,761.30
       Interest payable                           344,300.00                                193,930.00
       Dividend payable
       Other payables                          83,396,825.27                            192,765,065.68
       Non-current liabilities due in 1year
       Other current liabilities
    Total current liabilities                     286,443,362.33                            301,749,115.90Non-current liabilities:
       Long-term loans
       Bond payable
       Long-term payable
       Special payables
       Anticipated liabilities
       Deferred income tax liabilities         88,810,341.61                             88,615,374.26
       Other non-current liabilities
    Total of non-current liabilities               88,810,341.61                             88,615,374.26
                                                                             2014 Interim Report of China Fangda Group Co., Ltd
    Total liabilities                                               375,253,703.94                              390,364,490.16Owners’ equity (or shareholders’equity)
    Capital paid in (or share capital)                         756,909,905.00                              756,909,905.00
    Capital reserves                                            38,690,396.63                               38,690,396.63
    Less: Shares in stock
    Special reserves
    Surplus reserves                                            46,389,142.21                               46,389,142.21
    Common risk provisions
    Retained profit                                            378,699,373.89                              404,953,611.77
    Difference caused by translationof foreign currency statements
    Total of owners’ equity (or                                  1,220,688,817.73                             1,246,943,055.61shareholders’ equity)
    Total of liability and owners’ equity                        1,595,942,521.67                             1,637,307,545.77(or shareholders’ equity)
    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                                                   822,792,739.02                              736,828,039.88
      Incl. Business income                                        822,792,739.02                              736,828,039.88
              Interest income
              Insurance fee earned
              Fee and commissionreceived
    2. Total business cost                                             781,151,190.76                              693,328,494.53
      Incl. Business cost                                          668,447,444.31                              584,493,820.44
              Interest expense
              Fee and commission paid
              Insurance dischargepayment
              Net claim amount paid
                                                          2014 Interim Report of China Fangda Group Co., Ltd
                Net insurance policyreserves provided
                Insurance policy dividendpaid
                Reinsurance expenses
                Business tax and surcharge         11,358,459.71                             13,633,238.09
                Sales expense                      18,245,120.86                             17,614,987.09
                Administrative expense             67,185,503.16                             57,347,495.40
                Financial expenses                 11,047,478.14                             12,213,522.40
                Asset impairment loss               4,867,184.58                              8,025,431.11
        Plus: gains from change of fairvalue (“-“ for loss)
                Investment gains (“-“ for
                                                     969,118.50loss)
                Incl. Investment gains from
                                                      -41,807.57affiliates and joint ventures
                Exchange gains (“-“ forloss)
    3. Operational profit (“-“ for loss)             42,610,666.76                             43,499,545.35
        Plus: non-operational income                3,041,518.40                              2,504,701.74
        Less: non-operational expenditure           2,061,903.28                                672,299.16
                Incl. Loss from disposal of
                                                    1,569,906.67                                169,723.53non-current assets
    4. Gross profit (“-“ for loss)                   43,590,281.88                             45,331,947.93
        Less: Income tax expenses                   4,362,903.54                              7,795,908.42
    5. Net profit (“-“ for net loss)                 39,227,378.34                             37,536,039.51
        Including: Net profit realized bythe entity taken over before the takeover
        Net profit attributable to the
                                                   40,769,958.24                             39,361,593.42owners of parent company
        Minor shareholders’ equity                -1,542,579.90                             -1,825,553.91
    6. Earnings per share:                        --                                    --
        (1) Basic earnings per share                        0.05                                      0.05
        (2) Diluted earnings per share                      0.05                                      0.05
    7. Other misc. incomes                                35,700.00
    8. Total of misc. incomes                          39,263,078.34                             37,536,039.51
                                                                                2014 Interim Report of China Fangda Group Co., Ltd
        Total of misc. incomes attributable
                                                                       40,805,658.24                               39,361,593.42to the owners of the parent company
        Total misc gains attributable to the
                                                                       -1,542,579.90                               -1,825,553.91minor shareholders
    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
                    Items                          Amount of the Current Term                Amount of the Previous Term
    1. Turnover                                                            14,332,254.25                               23,580,401.58
        Less: Operation cost                                            2,129,602.96                                4,742,190.07
             Business tax and surcharge                                 1,179,113.66                                1,829,817.82
             Sales expense
             Administrative expense                                    11,316,843.92                               10,381,634.49
             Financial expenses                                         5,364,994.52                                2,086,644.86
             Asset impairment loss                                        -53,159.58                                   14,817.75
        Plus: gains from change of fairvalue (“-“ for loss)
             Investment gains (“-“ for
                                                                          -41,807.57loss)
             Incl. Investment gains from
                                                                          -41,807.57affiliates and joint ventures
    2. Operational profit (“-“ for loss)                                 -5,646,948.80                                4,525,296.59
        Plus: non-operational income                                    1,326,268.74                                1,025,011.10
        Less: non-operational expenditure                                 327,022.34                                  373,248.83
             Incl. Loss from disposal of
                                                                          125,522.34                                   34,285.02non-current assets
    3. Gross profit (“-“ for loss)                                       -4,647,702.40                                5,177,058.86
        Less: Income tax expenses                                      -1,100,761.67                                  994,439.99
    4. Net profit (“-“ for net loss)                                     -3,546,940.73                                4,182,618.87
    5. Earnings per share:                                           --                                       --
        (1) Basic earnings per share
        (2) Diluted earnings per share
    6. Other misc. incomes                                                           0.00                                       0.00
                                                                             2014 Interim Report of China Fangda Group Co., Ltd
    7. Total of misc. incomes                                           -3,546,940.73                                4,182,618.87
    Legal 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 from businessoperations:
       Cash received from sales of
                                                                   749,511,473.43                              746,305,400.55products and providing of services
       Net increase of customer depositsand capital kept for brother company
       Net increase of loans from centralbank
       Net increase of inter-bank loansfrom other financial bodies
       Cash received against originalinsurance contract
       Net cash received from reinsurancebusiness
       Net increase of client deposit andinvestment
       Net increase of trade financialasset disposal
       Cash received as interest,processing fee, and commission
       Net increase of inter-bank fundreceived
       Net increase of repurchasingbusiness
       Tax refunded                                                    575,871.97                                1,402,420.40
       Other cash received from business
                                                                    47,867,585.96                               24,853,131.88operationSub-total of cash inflow from business
                                                                   797,954,931.36                              772,560,952.83operations
       Cash paid for purchasing products                           852,304,489.33                              596,363,985.36
                                                       2014 Interim Report of China Fangda Group Co., Ltdand services
    Net increase of client trade andadvance
    Net increase of savings in centralbank and brother company
    Cash paid for original contractclaim
    Cash paid for interest, processingfee and commission
    Cash paid for policy dividend
    Cash paid to and for the staff           105,126,526.67                              80,075,568.67
    Taxes paid                                43,416,941.46                              39,998,936.89
    Other cash paid for business
                                               65,659,703.51                              55,032,599.32activitiesSub-total of cash outflow from business
                                             1,066,507,660.97                            771,471,090.24operationsCash flow generated by business
                                             -268,552,729.61                               1,089,862.59operations, net2. Cash flow generated by investment:
    Cash received from investmentrecovery
    Cash received as investment profit         1,008,267.73
    Net cash retrieved from disposal of
    fixed assets, intangible assets, and other      4,577,733.50                                 230,729.00long-term assets
    Net cash received from disposal ofsubsidiaries or other operational units
    Other investment-related cash
                                                  133,500.00                                 371,500.00receivedSub-total of cash inflow generated from
                                                5,719,501.23                                 602,229.00investment
    Cash paid for construction of fixed
    assets, intangible assets and other             8,981,293.29                              35,013,827.84long-term assets
    Cash paid as investment                                                              20,000,000.00
    Net increase of loan against pledge
    Net cash paid for acquiringsubsidiaries and other operational units
                                                                    2014 Interim Report of China Fangda Group Co., Ltd
    Other cash paid for investment                            130,500.00                                 960,000.00
    Subtotal of cash outflows                                     9,111,793.29                             55,973,827.84Cash flow generated by investment
                                                             -3,392,292.06                            -55,371,598.84activities, net3. Cash flow generated by financingactivities:
    Cash received from investment
    Incl. Cash received frominvestment attracted by subsidiariesfrom minority shareholders
    Cash received from borrowed
                                                            356,000,000.00                            160,000,000.00loans
    Cash received from bond placing
    Other cash received from financingactivitiesSubtotal of cash inflow from financing
                                                            356,000,000.00                            160,000,000.00activities
    Cash paid to repay debts                                                                          70,000,000.00
    Cash paid as dividend, profit, or
                                                             41,950,857.15                             28,180,178.76interests
    Incl. Dividend and profit paid bysubsidiaries to minority shareholders
    Other cash paid for financing
                                                               156,090.75                                  81,621.53activitiesSubtotal of cash outflow from financing
                                                             42,106,947.90                             98,261,800.29activitiesNet cash flow generated by financing
                                                            313,893,052.10                             61,738,199.71activities4. Influence of exchange rate changes
                                                                 -7,348.79                                    -36.18on cash and cash equivalents5. Net increase in cash and cash
                                                             41,940,681.64                              7,456,427.28equivalents
    Plus: Balance of cash and cash
                                                            285,237,255.38                            240,167,372.86equivalents at the beginning of term6. Balance of cash and cash equivalents
                                                            327,177,937.02                            247,623,800.14at the end of the period
    Legal representative: Xiong Jianming      CFO: Lin Kebing    Accounting Manager: Chen Yonggang
                                                                          2014 Interim Report of China Fangda Group Co., Ltd6. 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 from businessoperations:
    Cash received from sales of
                                                                 12,110,570.32                               17,270,087.97products and providing of services
    Tax refunded
    Other cash received from business
                                                                486,019,552.00                              297,539,451.29operationSub-total of cash inflow from business
                                                                498,130,122.32                              314,809,539.26operations
    Cash paid for purchasing products
                                                                  2,860,543.41                                5,883,177.71and services
    Cash paid to and for the staff                               7,871,822.76                                5,654,402.78
    Taxes paid                                                   1,340,978.19                                2,290,978.47
    Other cash paid for business
                                                                784,384,264.75                              181,902,222.11activitiesSub-total of cash outflow from business
                                                                796,457,609.11                              195,730,781.07operationsCash flow generated by business
                                                               -298,327,486.79                              119,078,758.19operations, net2. Cash flow generated by investment:
    Cash received from investmentrecovery
    Cash received as investment profit
    Net cash retrieved from disposal of
    fixed assets, intangible assets, and other                      171,005,300.50                                       729.00long-term assets
    Net cash received from disposal ofsubsidiaries or other operational units
    Other investment-related cashreceivedSub-total of cash inflow generated from
                                                                171,005,300.50                                       729.00investment
    Cash paid for construction of fixed                          1,118,624.57                                   73,788.50
                                                                     2014 Interim Report of China Fangda Group Co., Ltdassets, intangible assets and otherlong-term assets
    Cash paid as investment                                                                            40,000,000.00
    Net cash paid for acquiringsubsidiaries and other operational units
    Other cash paid for investment
    Subtotal of cash outflows                                      1,118,624.57                             40,073,788.50Cash flow generated by investment
                                                             169,886,675.93                            -40,073,059.50activities, net3. Cash flow generated by financingactivities:
    Cash received from investment
    Cash received from borrowed
                                                              96,000,000.00                             90,000,000.00loans
    Cash received from bond placing
    Other cash received from financingactivitiesSubtotal of cash inflow from financing
                                                              96,000,000.00                             90,000,000.00activities
    Cash paid to repay debts                                                                           70,000,000.00
    Cash paid as dividend, profit, or
                                                              28,150,357.15                             26,856,728.43interests
    Other cash paid for financing
                                                                156,090.75                                  81,621.53activitiesSubtotal of cash outflow from financing
                                                              28,306,447.90                             96,938,349.96activitiesNet cash flow generated by financing
                                                              67,693,552.10                             -6,938,349.96activities4. Influence of exchange rate changeson cash and cash equivalents5. Net increase in cash and cash
                                                             -60,747,258.76                             72,067,348.73equivalents
    Plus: Balance of cash and cash
                                                              67,973,808.76                             25,540,604.84equivalents at the beginning of term6. Balance of cash and cash equivalents
                                                               7,226,550.00                             97,607,953.57at the end of the period
    Legal representative: Xiong Jianming       CFO: Lin Kebing    Accounting Manager: Chen Yonggang
                                                                                        2014 Interim Report of China Fangda Group Co., Ltd7. Statement of Change in Owners Equity (Consolidated)Prepared by: China Fangda Group Co., Ltd.
                                                                                                                                         In RMB
                                                                          Amount of the Current Term
                                                Owners’ Equity Attributable to the Parent Company
                                   Capital
                                                                                        Commo                            Minor         Total of
               Items               paid in                Less:
                                              Capital               Special Surplus       n risk   Retaine             sharehold       owners’
                                     (or                 Shares                                               Others
                                              reserves              reserves reserves provisio d profit                ers’ equity    equity
                                    share                in stock
                                                                                           ns
                                   capital)
    1. Balance at the end of last      756,909 79,191,0                           46,389,              278,149,            55,432,44 1,216,072,
    year                               ,905.00      52.01                         142.21                631.63                    6.89       177.74
       Plus: Changes inaccounting policies
            Correction ofprevious errors
            Others
    2. Balance at the beginning of     756,909 79,191,0                           46,389,              278,149,            55,432,44 1,216,072,
    current year                       ,905.00      52.01                         142.21                631.63                    6.89       177.74
    3. Amount of change in current                35,700.0                                             18,062,6             -1,542,57 16,555,781
    term (“-“ for decrease)                            0                                               61.09                    9.90           .19
                                                                                                   40,769,9             -1,542,57 39,227,378(1) Net profit
                                                                                                     58.24                    9.90           .34
                                              35,700.0
    (2) Other misc. income                                                                                                                35,700.00
                                                     0
                                              35,700.0                                             40,769,9             -1,542,57 39,263,078Sub-total of (1) and (2)
                                                     0                                               58.24                    9.90           .34(3) Investment or decreasing ofcapital by owners1. Capital input by owners2. Amount of shares paid andaccounted as owners’ equity3. Others
                                                                                                   -22,707,                           -22,707,29(4) Profit allotment
                                                                                                    297.15                                  7.151. Providing of surplus reserves2. Common risk provision
                                                                                       2014 Interim Report of China Fangda Group Co., Ltd
    3. Allotment to the owners (or                                                                    -22,707,                           -22,707,29
    shareholders)                                                                                      297.15                                  7.154. Others(5) Internal transferring ofowners’ equity1. Capitalizing of capitalreserves (or to capital shares)2. Capitalizing of surplusreserves (or to capital shares)3. Making up losses by surplusreserves4. Others(6) Special reserves1. Provided this year2. Used this term(7) Others
    4. Balance at the end of this     756,909 79,226,7                           46,389,              296,212,            53,889,86 1,232,627,
    period                            ,905.00      52.01                         142.21                292.72                    6.99       958.93
                                                                                                                                        In RMB
                                                                            Amount of Last Year
                                              Owners’ Equity Attributable to the Parent Company
                                  Capital
                                                                                       Commo                            Minor         Total of
               Items              paid in                Less:
                                             Capital               Special Surplus       n risk   Retaine             sharehold       owners’
                                    (or                 Shares                                               Others
                                             reserves              reserves reserves provisio d profit                ers’ equity    equity
                                   share                in stock
                                                                                          ns
                                  capital)
    1. Balance at the end of last     756,909 80,299,8                           30,494,              230,907,            59,708,53 1,158,320,
    year                              ,905.00      67.64                         542.94                879.99                    1.11       726.68
       Plus: Retrospectiveadjustment caused by merger ofentities under common control
       Plus: Changes inaccounting policies
            Correction ofprevious errors
            Others
    2. Balance at the beginning of    756,909 80,299,8                           30,494,              230,907,            59,708,53 1,158,320,
    current year                      ,905.00      67.64                         542.94                879.99                    1.11       726.68
                                                                  2014 Interim Report of China Fangda Group Co., Ltd
    3. Amount of change in current               -1,108,8   15,894,            47,241,7           -4,276,08 57,751,451
    term (“-“ for decrease)                      15.63    599.27                51.64                4.22          .06
                                                                           85,676,8           -4,276,08 81,400,779(1) Net profit
                                                                              63.78                4.22          .56
                                             -1,108,8                                                     -1,108,815.(2) Other misc. income
                                               15.63                                                              63
                                             -1,108,8                      85,676,8           -4,276,08 80,291,963Sub-total of (1) and (2)
                                               15.63                          63.78                4.22          .93(3) Investment or decreasing ofcapital by owners1. Capital input by owners2. Amount of shares paid andaccounted as owners’ equity3. Others
                                                        15,894,            -38,435,                       -22,540,51(4) Profit allotment
                                                        599.27               112.14                             2.87
                                                        15,894,            -15,894,1. Providing of surplus reserves
                                                        599.27               599.272. Common risk provision
    3. Allotment to the owners (or                                             -22,540,                       -22,540,51
    shareholders)                                                                512.87                             2.874. Others(5) Internal transferring ofowners’ equity1. Capitalizing of capitalreserves (or to capital shares)2. Capitalizing of surplusreserves (or to capital shares)3. Making up losses by surplusreserves4. Others(6) Special reserves1. Provided this year2. Used this term(7) Others
    4. Balance at the end of this      756,909 79,191,0     46,389,            278,149,          55,432,44 1,216,072,
    period                             ,905.00     52.01    142.21               631.63                6.89       177.74
                                                                                   2014 Interim Report of China Fangda Group Co., Ltd
    Legal 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.
                                                                                                                                   In RMB
                                                                         Amount of the Current Term
                                      Capital
                                                                 Less:                              Common                       Total of
                 Items               paid in (or   Capital                   Special    Surplus                   Retained
                                                               Shares in                               risk                      owners’
                                       share       reserves                 reserves    reserves                   profit
                                                                 stock                              provisions                   equity
                                      capital)
                                     756,909,90 38,690,396                             46,389,142                404,953,61 1,246,943,1. Balance at the end of last year
                                           5.00          .63                                  .21                      1.77        055.61
    Plus: Changes in accountingpolicies
            Correction of previouserrors
            Others
    2. Balance at the beginning of       756,909,90 38,690,396                             46,389,142                404,953,61 1,246,943,
    current year                               5.00          .63                                  .21                      1.77        055.61
    3. Amount of change in current                                                                                   -26,254,23 -26,254,23
    term (“-“ for decrease)                                                                                              7.88           7.88
                                                                                                                 -3,546,940. -3,546,940.(1) Net profit
                                                                                                                            73            73(2) Other misc. income
                                                                                                                 -3,546,940. -3,546,940.Sub-total of (1) and (2)
                                                                                                                            73            73(3) Investment or decreasing ofcapital by owners1. Capital input by owners2. Amount of shares paid andaccounted as owners’ equity3. Others
                                                                                                                 -22,707,29 -22,707,29(4) Profit allotment
                                                                                                                       7.15           7.151. Providing of surplus reserves2. Common risk provision
    3. Allotment to the owners (or                                                                                   -22,707,29 -22,707,29
    shareholders)                                                                                                          7.15           7.15
                                                                                    2014 Interim Report of China Fangda Group Co., Ltd4. Others(5) Internal transferring ofowners’ equity1. Capitalizing of capital reserves(or to capital shares)2. Capitalizing of surplusreserves (or to capital shares)3. Making up losses by surplusreserves4. Others(6) Special reserves1. Provided this year2. Used this term(7) Others
    4. Balance at the end of this         756,909,90 38,690,396                              46,389,142                378,699,37 1,220,688,
    period                                      5.00           .63                                  .21                      3.89       817.73
                                                                                                                                    In RMB
                                                                              Amount of Last Year
                                       Capital
                                                                   Less:                              Common                     Total of
                 Items                paid in (or     Capital                 Special     Surplus                   Retained
                                                                  Shares in                              risk                    owners’
                                        share        reserves                 reserves    reserves                   profit
                                                                   stock                              provisions                  equity
                                       capital)
                                      756,909,90 39,799,212                              30,494,542                284,442,73 1,111,646,1. Balance at the end of last year
                                            5.00            .26                                 .94                      1.25       391.45
    Plus: Changes in accountingpolicies
            Correction of previouserrors
            Others
    2. Balance at the beginning of        756,909,90 39,799,212                              30,494,542                284,442,73 1,111,646,
    current year                                5.00            .26                                 .94                      1.25       391.45
    3. Amount of change in current                      -1,108,815.                          15,894,599                120,510,88 135,296,66
    term (“-“ for decrease)                                   63                                  .27                      0.52         4.16
                                                                                                                   158,945,99 158,945,99(1) Net profit
                                                                                                                         2.66         2.66
                                                    -1,108,815.                                                                 -1,108,815.(2) Other misc. income
                                                            63                                                                             63
    Sub-total of (1) and (2)                            -1,108,815.                                                    158,945,99 157,837,17
                                                                     2014 Interim Report of China Fangda Group Co., Ltd
                                                        63                                            2.66       7.03(3) Investment or decreasing ofcapital by owners1. Capital input by owners2. Amount of shares paid andaccounted as owners’ equity3. Others
                                                                        15,894,599              -38,435,11 -22,540,51(4) Profit allotment
                                                                                .27                   2.14       2.87
                                                                        15,894,599              -15,894,591. Providing of surplus reserves
                                                                                .27                   9.272. Common risk provision
    3. Allotment to the owners (or                                                                  -22,540,51 -22,540,51
    shareholders)                                                                                         2.87       2.874. Others(5) Internal transferring ofowners’ equity1. Capitalizing of capital reserves(or to capital shares)2. Capitalizing of surplusreserves (or to capital shares)3. Making up losses by surplusreserves4. Others(6) Special reserves1. Provided this year2. Used this term(7) Others
    4. Balance at the end of this         756,909,90 38,690,396             46,389,142             404,953,61 1,246,943,
    period                                      5.00        .63                     .21                   1.77     055.61
    Legal representative: Xiong Jianming         CFO: Lin Kebing   Accounting Manager: Chen YonggangIII. General Information
    China Fangda Group Co., Ltd. (the “Company” or the “Group”) is a joint stock company registered inShenzhen, 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 inOctober 1995. The Registration No. of the Company’s business license is: 440301501124785; with a registered
                                                                      2014 Interim Report of China Fangda Group Co., Ltdcapital of RMB756,909,905; registered address: Fangda Building, Kejinan Road 12, High-tech Zone, Shenzhen.Mr. Xiong Jianming is the legal representative.
    The Company issued foreign currency shares (B shares) and local currency shares (A shares) and listed inNovember 1995 and April 1996 respectively in Shenzhen Stock Exchange. On June 12, 1997, as approved byShenzhen Bureau of Commerce with Document 深招商复[1997]0192号, the Company was re-registered to asino-foreign joint venture. Registration routines were completed with Shenzhen Commerce and IndustryAdministration on November 12, 1997. In October 1999, the Company started to use the current name.
    The Company has established a corporate governance structure that comprises shareholders’ meeting, boardof directors and supervisory committee. Currently, the Company sets up the President Office, AdministrativeDepartment, HR Department, Enterprise Management Department, Financial Department, Audit and SupervisoryDepartment, Securities Department, Technology Department and IT Department and has established subsidiariesincluding Fangda Decoration, Fangda Automatic, Fangda New Material, Shenyang Fangda and Fangda Property.
    The business scope includes new-type building materials, composite materials, metal wares, metal frames,environmental equipment and apparatus, fire fighting equipment, optical-mechanical-electrical integrated products,polymer materials and their products, fine chemical products, mechanical equipment, optical materials anddevices, electronic displayer, audio-visual device, transport facilities (exclude restricted items and produces underexport certification, and their design, developing, installation, construction, technical consulting, and training.Managing and leasing of properties under possession (Fangda Building at Ke-Ji-Nan Road 12, and Fangda Townat Longzhu Road 4), parking services of Fangda Building.IV. Main Accounting Policies, Estimations and Retrospection of Previous Accounting Errors(I) Basis for the preparation of financial statements
    The financial statements have been prepared in accordance with the Enterprise Accounting Standard – BasicStandards and 38 specific accounting principles issued in February 2006 by the Ministry of Finance and itsapplication guide, interpretation and other related provision (collectively “Enterprise Accounting Standards”). TheCompany has also disclosed related financial information according to the requirement of the Regulations ofInformation Disclosure No.15 – General Provisions for Financial Statements (Revised in 2010) issued by theCSRC.
    Except for subsidiaries that have stopped operating, the financial statements are prepared on the basis ofcontinuous operation. The financial statements for subsidiaries that have stopped operating (Shenyang Fangda,Fangda Aluminium and Fang Yide) are prepared on the basis of non-continuous operation.
      The Company's audit is based on the accrual basis. Except for some financial instruments and property heldfor investment, the financial statements are prepared based on historical costs. In case of any asset impairment, theimpairment provision will be made as required.(II) Statement of compliance to the Enterprise Accounting Standard
    The financial report and statements are prepared with compliance to the requirement of the EnterpriseAccounting Standard. They reflect the financial position as of June 30, 2014, and business performance and cash
                                                                      2014 Interim Report of China Fangda Group Co., Ltdflow situation between January and June 2014 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 the merged parties atthe merger day in addition to the adjustment made given the difference in accounting policies. The differencesbetween the book value of net assets and the book value of consideration price (or the total of face value of shareissued) are adjusted to the capital reserve (share capital premium). If the share capital premium is not enough tooffset the difference, it will be adjusted to the retained gains.The direct expenses arising from the merger are included in profits and losses in the current period.(2) Consolidation of entities under different controlFor merger of entities under different control, the merger cost is the fair value of the asset paid, liabilityundertaken, and equity securities issued for exchanging of control power over the entities at the day of acquisition.On the acquisition day, the assets and liabilities (if any) acquired by the Company from the acquired party arerecognized on the fair value.Agency expenses and other administrative expenses such as auditing, legal consulting, or appraisal servicesoccurred relating to the merger of entities are accounted into current income account when occurred. Thetransaction fees of equity certificates or liability certificates issued by the purchaser for payment for theacquisition are accounted at the initial amount of the certificates.If the merger costs exceed the fair value of the recognizable net assets of the acquired party in the merger, it isrecognized as goodwill and measured based the costs after the accumulative impairment provision is deducted; ifthe fair value exceeds the costs, it is included in the income statement for the period after being re-examined.(VI) Accounting policies for disposal of share equity and loss of control(1) Judgment of a basket of transactionsWhen the terms, conditions and economic impacts of several transactions of disposal of share equity and loss ofcontrol meet one or multiple situations listed below, the Company will treat the several transactions as a basket oftransactions:
                                                                       2014 Interim Report of China Fangda Group Co., LtdThese transactions are conducted concurrently or with mutual impacts considered;② These transactions can only achieve the business result as a whole;③ The effectiveness of one transaction depends the occurrence of at least another transaction;④ A single transaction is not economic and is economic when considered together with other transactions.(2) Accounting treatment of a basket of transactions
      For transactions in step disposal of stock equity and loss of control, the difference between the book valueand proceeds from the long-term equity investment corresponding to each disposal of equity in separate financialstatement and the book value of the disposal of long-term equity investment is included in the current investmentgain.
    In consolidated financial statements, between step disposal of stock equity and loss of control, themeasurement of residual stock equity and accounting ratio of related stock equity disposal gain/loss are subject tothe disposal of loss of subsidiary control. The difference between every disposal amount before losing control andthe share of net assets of the subsidiary enjoyed corresponding to the disposal is recognized as other general gainsand is included in capital reserve (other capital reserve). It is transferred to current gain/loss from loss of controlwhen the control is lost.(3) Accounting treatment of non-package transactions
      For transactions in step disposal of stock equity and loss of control, the difference between the book valueand proceeds from the long-term equity investment corresponding to each disposal of equity in separate financialstatement and the book value of the disposal of long-term equity investment is included in the current investmentgain.
    In consolidated financial statements, between step disposal of stock equity and loss of control, themeasurement of residual stock equity and accounting ratio of related stock equity disposal gain/loss are subject tothe disposal of loss of subsidiary control. The difference between every disposal amount before losing control andthe share of net assets of the subsidiary enjoyed corresponding to the disposal is included in capital reserve (stockpremium/capital premium) as an equity transaction. It will not be transferred to current gain/loss from loss ofcontrol when the control is lost.(VII) Preparation of Consolidated Financial Statements(1). Preparation of Consolidated Financial Statements
    The consolidated financial statements are prepared by the Company based on financial statements of theCompany and subsidiaries and according to other related information and adjusted as long-term equity investmentof subsidiaries through the equity method. During preparation of consolidated financial statements, the accountingpolicies and period of the Company and subsidiaries must be the same. Major transactions and balances betweencompanies are offset.
                                                                       2014 Interim Report of China Fangda Group Co., Ltd
    The part of the shareholders’ equity in subsidiaries not owned the Company are separately listed under theshareholders’ equity as minority shareholders’ equity in the consolidated balance sheet. The part of thesubsidiaries’ net profits and losses for the current period that belongs to minority shareholders is listed as minorityshareholders’ profits and losses under net profit in the consolidated income statement. If the losses of subsidiariesshared by the minority shareholders exceed the part of the owners’ equity of the subsidiaries at the beginning ofthe period, the excessive part will offset the minority shareholders’ equity.(2) Accounting methods for the share equity of the same subsidiary purchased and sold in two consecutiveaccounting years(VIII) Recognition of cash and cash equivalents
    Cash refers to cash on hand and deposits that can be used at any time for payment. Cash equivalent refers tothe investments with short term, strong liquidity and small risk of value fluctuation that are held by the Companyand easily converted into cash with known amount.(IX) Foreign exchange business and foreign exchange statement translation(VIII) Foreign currenciesTrades of the Company made in foreign currencies are translated into RMB basing on the spot exchange rate onthe date when the trade is conducted.(2) Translation of foreign exchange statement
    At the balance sheet date, foreign currency items are translated on the spot exchange rate of the balance sheetdate. The exchange differences caused by the difference in exchange rates on the balance sheet date and initialrecognizing date or previous balance sheet date are included in the current profits and losses. Non-monetary itemsaccounted in foreign currency and on historical costs are exchanged with the spot exchange rate on the transactiondate. Non-monetary items accounted in foreign currency and on fair value are exchanged with the spot exchangerate on the determination date of the fair value. The exchange difference between the accountingstandard-currency amount and the original accounting standard-currency amount are included in the currentprofits and losses.(X) Financial instrumentFinancial instrument refers to a company’s financial assets and contracts that form other units of financialliabilities or equity instruments.(1) Classification of financial instruments
    The Company's financial assets mainly include receivables, which refer to non-derivative financial assetswithout quotations but with fixed recoverable amount or can be confirmed, including receivable accounts andother receivables. Receivables adopt the effective interest method and are further measured by amortized cost.Gain/loss generated at final recognition, impairment or amortization is accounted into the current gain/loss
                                                                       2014 Interim Report of China Fangda Group Co., Ltdaccount.
    The Company’s financial liabilities are mainly other financial liabilities. Other financial liabilities adopt theeffective interest method and are further measured by amortized cost. Gain/loss generated at final recognition oramortization 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 financial instrumentcontract.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.(3) Recognition and measurement of financial assets transfer
    The transfer of financial assets refers to transferring or delivering the financial assets to another party(receiver) other than the issuing party of the financial assets.
    Recognition of the financial asset is terminated as soon as all of the risks and rewards attached to thefinancial asset have been transferred to the receiver. Whereas if all of the risks and rewards attached to thefinancial assets are reserved, recognition of the financial asset shall not be terminated.
      When the Company neither transfers nor reserve almost all risks and rewards attached to the financial assets,it will be handled as: When the controlling power over the financial asset is given up, the financial assets will bederecognized and the generated assets and liabilities will be recognized; when the controlling power is not givenup, financial asset and related liability shall be recognized according to the extend the Company is involving inthe financial asset.(4) De-recognition conditions of financial liabilitiesWhen partial or all of the current responsibilities attached to such financial liabilities, the partial or all of thefinancial liabilities are derecognized.Financial asset transactions in regular ways are recognized and de-recognized on the transaction date.(5) Recognition of fair value of financial assets and liabilities
    For financial assets in an active market, the Company uses the prevailing quotations or asking prices todetermine the fair value.
    If there is no active market, the Company uses evaluation techniques to determine the fair value. The resultsderived from the adoption of valuation technologies reflect the trading prices that may be adopted in arm’s lengthbasis transactions on the valuation date. Valuation techniques include using recent arm’s length market
                                                                        2014 Interim Report of China Fangda Group Co., Ltdtransactions between knowledgeable, willing parties, if available, reference to the current fair value of anotherinstrument that is substantially the same, a discounted cash flow analysis and option pricing models.
    The Company has adopted valuation techniques that have been widely accepted by market participants andproven reliable by previous effective transaction prices. When using valuation techniques to determine financialinstruments’ fair value, the Company has managed to use all market parameters that market participants wouldconsider during financial instrument pricing and transaction prices observable in the current market for samefinancial instruments to examine the effectiveness of the valuation techniques.(6) Impairment test and provision of financial assets (excluding receivables)
    Financial assets measured at fair value with variations accounted into current income account. The Companychecks the book value of financial assets on the balance sheet date. Impairment provision will be made in case ofobjective evidence proving impairment to the financial assets. Objective evidence proving impairment to thefinancial assets refers to events actually occur after the initial recognition of financial assets, with influence on theestimated future cash flows of the financial assets and can be reliably measured by the Company.Financial assets measured at amortized cost
    If there is objective evidence proving impairment to the financial assets, the book value of the financial assetswill be written down to the present value of the estimated future cash flow (excluding undiscovered future creditloss). The write-down amount is accounted into the current gain/loss account. The present value of the estimatedfuture cash flow is determined by the original effective discount rate with the value of the guarantee considered.
      Conduct impairment test separately for major financial assets. If there is objective evidence suggestingimpairment, determine the impairment loss and account it into the current gain/loss account. Conduct impairmenttest for other financial assets including financial assets combination with similar credit risk features. Test financialassets without impairment separately (including major and minor financial assets) and conduct impairment test inthe financial assets combination with similar credit risk features. Conduct impairment test for financial assetsseparately recognized as impaired excluding financial assets combination with similar credit risk features.
    After the Company recognizes impair loss to financial assets measured by amortized cost, if there is objectevidence suggesting that the value of the financial assets is restored objectively due to an event after the loss, therecognized impairment loss can be reversed and accounted into the current gain/loss account. The book value afterthe reversal must not exceed the amortized cost of the financial assets on the reversal date assuming that noimpairment provision was made.Financial assets measured at cost
    If there is no quotation in an active market and its fair value cannot be measured reliably or the derivativefinancial assets that linked to the equity instrument and can only settled by delivering the equity instrument isimpaired, the difference between the book value of the financial assets and the current value recognized bydiscounting the future cash flow against the market yield of similar financial assets in the current market isrecognized as the impairment loss and accounted into the current gain/loss account. The impairment loss cannotbe reversed after being recognized.Verification of impairment in various sellable financial assets
                                                                                 2014 Interim Report of China Fangda Group Co., LtdSellable financial assets
    If there is objective evidence suggesting impairment to the financial assets, the accumulative loss generatedby the decrease in the fair value that has been directed accounted into capital reserve should be transferred out andaccounted into the current gain/loss account. The transferred accumulative loss is the balance of the initialacquisition cost of the sellable financial assets after the recovered principal and amortized amount, current fairvalue and impair loss that has been accounted into the gain/loss account are deducted.
    For the sellable debt instruments recognized as impaired, if the fair value increases in the followingaccounting period objectively due to an event after the original impair loss is recognized, the impairment loss willbe reversed and accounted into the current gain/loss account. Impairment loss incurred in investment of sellableequity instrument is not reversed through the gain/loss account.Verification of impairment in various sellable financial assets(7) The basis of reclassifying the immature investment held until maturity as sellable financial assets,indicating changes in the intention or capability of holding the investment11. Recognition standard and provision method for receivable bad debt provisionReceivables include receivable accounts, other receivables and prepayment.(1) Receivables with major individual amount and bad debt provision provided individually
                                                                     For the current year, the Company recognizes project
                                                                     receivables over RMB8 million (inclusive) as “individual
                                                                     receivable with large amount” while recognizes product
    Judging basis or standard of major individual amount                 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
    Provision method for account receivable with major individual        on each large amount receivables, and recognizes impairment
    amount and bad debt provision provided individually                  and provides bad debt provision when the impairment is
                                                                     recognized based on objective evidence.(2) Recognition and providing of bad debt provisions on groups
               Group                       Providing method                                 Grouping basis
    Account age                          Aging method                 Account age
                                                                  Accounts receivable consolidated are accounted using theReceivable accounts consolidated Other method
                                                                  separate test method.Receivables adopting the aging method in the group√ Applicable □ Inapplicable
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                Age                  Providing rate for receivable account           Providing rate for other receivables
    Within 1 year (inclusive)                                            3.00%                                                  3.00%
    1-2 years                                                           10.00%                                                  10.00%
    2-3 years                                                           30.00%                                                  30.00%
    Over 3 years                                                        50.00%                                                  50.00%
    3-4 years                                                           50.00%                                                  50.00%
    4-5 years                                                           50.00%                                                  50.00%
    Over 5 years                                                        50.00%                                                  50.00%Receivables adopting the balance percentage method in the group□ Applicable √ InapplicableReceivables adopting other methods in the group□ Applicable √ Inapplicable(3) Account receivable with minor individual amount and bad debt provision provided individually
    Reasons for separate bad debt provision      Long account age or deterioration of customer creditability
                                             According to the difference between the present value of future cash flow and theMethod of bad debt provision
                                             book value12. 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, inventory, development products, and construction inprocess.(2) Pricing of delivering inventoryWeighted average methodInventories are measured at cost when procured. Raw materials, products in process and commodity stocks intransit are measured by the weighted average method.Construction contracts are measured by the effective cost, including direct and indirect expenses generated beforethe contracts are fulfilled. Costs generated and recognized accumulatively by construction in process and settledpayment are listed in the balance sheet as offset net amounts. The excessive part of the sum of the generated costsand recognized gross profit (loss) over the settled payment is listed inventories; the excessive part of the settledpayment over the sum of the generated costs and recognized gross profit (loss) is listed as the prepaymentreceived.Travel and bidding expenses generated by execution of contracts, if they can be separated and reliably measuredand it is likely to enter into contracts, are accounted as the contract cost when the contracts are entered into; or
                                                                       2014 Interim Report of China Fangda Group Co., Ltdinto the current gain/loss account if the conditions are not met.The actual costs of development products include land transfer payment, infrastructure and facility costs,installation engineering costs, borrows before completion of the development and other costs during thedevelopment process. The actual costs of the development product is priced using the separate pricing method.(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 cost and the netrealizable value. If the cost is higher than the net realizable value, the impairment provision will be made.At overall verification of inventories at the end of year, when the net realizable value is lower than the cost,provisions for impairment of inventories shall be drawn. Provisions for impairment of inventories shall beaccounted according to the difference between the cost of individual inventory items and the net realizable value.The Company generally made inventory impairment provision individually or by categories. Including: forinventories such as finished products or materials which will be directly sold, in the normal operation, therealizable net value will be the balance of estimated selling price less sales expenses and relative taxations; Forthose inventories need further processing, in the normal operation, the realizable net value will be the balance ofestimated sales price less costs to make it finished, less estimated sales expenses, and less relative taxation. At thebalance 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 the same districtand cannot be separated for valuation will be provided together; inventory of a large quantity and with low pricesare provided by categories. On the balance sheet day, if the influence of the inventory value write-down hasdisappeared, the impairment provision will be reversed within the provided amount.(4) Inventory systemThe Company uses perpetual inventory system.(5) Amortizing of low-value consumables and packaging materialsLow price consumableOn-off amortization basisPackageOn-off amortization basis13. Long-term share equity investment(1) Recognition of initial investment costsLong-term share equity investment is measured at the investment cost when it is obtained. The investment cost isgenerally is assets, liabilities occurred or borne to obtained the investment, including direct related costs. Theinvestment cost of long-term share equity investment formed by entities under common control is the share of thebook value of the owner's equity of the merged party on the date of the merger.
                                                                       2014 Interim Report of China Fangda Group Co., Ltd2. Subsequent measurement and recognition of gain/lossThe Company uses the cost method to measure long-term share equity investment in which the Company cancontrol the invested entity; and uses the equity method to measure long-term share equity investment in which theCompany has substantial influence on the invested entity. For the long-term equity investment measured on thecost basis, except for the announced cash dividend or profit included in the practical cost or price when theinvestment was made, the cash dividends or profit distributed by the invested entity are recognized as investmentgains in the current gain/loss account. When the equity method is used to measure long-term equity investment,the investment cost will not be adjusted if the investment cost of the long-term equity investment is larger than theshare of fair value of the recognizable assets of the invested entity. When it is smaller than the share of fair valueof the recognizable assets of the invested entity, the book value will be adjusted and the difference is included inthe current gains of the investment. When the equity method is used, the current investment gain is the share ofthe net gain realized in the current year that can be shared or borne. When the share of the net gains that can beenjoyed is recognized, it is recognized after the net profit of the invested entity is adjusted based on the fair valueof the recognizable assets of the invested entity according to the Company's accounting policies and accountingperiod. Internal transaction gain not realized between the Company and affiliates is measured according to theshareholding proportion and the investment gains is recognized after deduction.(3) Basis for recognition of common control and major influence on invested entitiesMajor influence refers to the power to participate in decision-making of financial and operation policies of acompany, but cannot control or jointly control the making of the policies. If the Company directly or throughsubsidiaries holds more than 20% (inclusive) but less than 50% of the shares with voting rights of the investedentity, unless there is clear evidence proving that the Company cannot participate the decision-making ofproduction and operation of the invested entity, the Company has major influence on the invested entity.(4) Impairment examination and providing of impairment provisionThe Company judges whether there is a sign of impairment to assets on the balance sheet day. If such sign exists,the Company estimates the recoverable amount and conducts the impairment test. The recoverable amount isdetermined by the higher of the net of fair value minus disposal expense and the present value of the predictedfuture cash flow. Once recognized, the asset impairment loss cannot be written back in subsequent accounting period.14. Investment real estateInvestment real estate are held for rent or capital appreciation, or both. The Company’s investment real estateinclude land use right, land use right held for appreciation and transfer and leased buildings.For investment real estate with an active real estate transaction market and the Company can obtain market priceand other information of same or similar real estate to reasonably estimate the investment real estate fair value, theCompany will use the fair value mode to measure the investment real estate subsequently. Variations in fair valueare accounted into the current gain/loss account.The fair value of investment real estate is determined with reference to the current market prices of same orsimilar real estate in active markets; when no such price is available, with reference to the recent transaction
                                                                      2014 Interim Report of China Fangda Group Co., Ltdprices and consideration of factors including transaction background, date and district to reasonably estimate thefair value; or based on the estimated lease gains and present value of related cash flows.For an investment real estate whose fair value is proven unable to be obtained continuously and reliably byobjective evidence, the real estate will be measured at cost basis until it is disposed and no residual value remainsas assumed.The difference of the proceeds from sales, transfer, retirement or destruction of investment real estate with bookvalue and related taxes deducted is accounted into the current gain/loss account.The Company judges whether there is a sign of impairment to assets on the balance sheet day. If such sign exists,the Company estimates the recoverable amount and conducts the impairment test.The Company judges whether there is a sign of impairment to assets on the balance sheet day. If such sign exists,the Company estimates the recoverable amount and conducts the impairment test.The recoverable amount is determined by the higher of the net of fair value minus disposal expense and thepresent value of the predicted future cash flow.Once recognized, the asset impairment loss cannot be written back in subsequent accounting period.15. Fixed assets(1) Conditions for fixed asset recognitionFixed assets is defined as the tangible assets which are held for the purpose of producing goods, providingservices, lease or for operation & management, and have more than one accounting year of service life. The fixedassets can only be recognized hen economic interests related to the fixed assets are very likely to flow into thecompany and the costs of the fixed assets can be reliably measured. The Company measures fixed assets at theactual costs when the fixed assets are obtained(2) Recognition and pricing of financing leased fixed assets(3) Depreciation of fixed assetsThe Company adopts the straight age average basis to make depreciation provision. The Company will start tomake the depreciation provision when the fixed assets reach the preset serviceable condition and stop to make thedepreciation provision when it is derecognized or categorized as non-current assets held for sales. Withoutconsidering depreciation provision, the Company determines annual depreciation rates for various fixed assetsaccording to types, predicted service life and residual value:
             Type                  Service year (year)         Residual rate              Annual depreciation rate %
    Houses & buildings            35-45                                            10.00% 2-2.57
    Mechanical equipment          10                                               10.00% 9
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    Electronic equipment           5                                             10.00% 18
    Transport equipment            5                                             10.00% 18(4) Impair test and impairment provision for fixed assetsThe Company recognizes impairment in fixed assets as follows:The Company judges whether there is a sign of impairment to assets on the balance sheet day. If such sign exists,the Company estimates the recoverable amount and conducts the impairment test.The recoverable amount is determined by the higher of the net of fair value minus disposal expense and thepresent value of the predicted future cash flow.Once recognized, the asset impairment loss cannot be written back in subsequent accounting period.At end of each fiscal year, verification will be made on the useful life, predicted retained value, and depreciationbasis.The useful life will be adjusted if the useful life is different from the predicted one; the net residual value will beadjusted if the net residual value is different from the predicted one.(5) OthersOverhaul cost generated by regular examination on fixed assets is recognized as fixed assets costs when there isevidence proving that it meets fix assets recognition conditions. If not, it will be accounted into the currentgain/loss account. Depreciation provision will be made for fixed assets between two regular overhauls.16.Construction in process(1) Categories of construction in processThe Company recognizes the cost of construction in process according to the actual construction expense,including necessary engineering expenses, borrowing costs to be capitalized before the engineering reaches thepreset service condition and other related costs.(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 service condition.(3) Impair test and impairment provision for construction in processThe Company recognizes impairment in projects in construction as follows: The Company judges whether there isa sign of impairment to assets on the balance sheet day. If such sign exists, the Company estimates the recoverableamount and conducts the impairment test.The Company judges whether there is a sign of impairment to assets on the balance sheet day. If such sign exists,the Company estimates the recoverable amount and conducts the impairment test.
                                                                    2014 Interim Report of China Fangda Group Co., LtdThe recoverable amount is determined by the higher of the net of fair value minus disposal expense and thepresent value of the predicted future cash flow.Once recognized, the asset impairment loss cannot be written back in subsequent accounting period.17. Borrowing expenses(1) Recognition principles for capitalization of borrowing expensesBorrowing expenses occurred to the Company that can be accounted as purchasing of asset satisfying theconditions of capitalizing, are capitalized and accounted as cost of related asset. Borrowing expenses start to becapitalized when all of the followings are satisfied:(1) Asset expense has already occurred. Asset expenses include cash payment, non-cash asset transferring, orundertaking of debt with interest done for purchasing assets;(2) The borrowing expense has already occurred;(3) Purchasing and production activity, which is necessary for the asset to reach the useful status, has alreadystarted.(2) During borrowing expense capitalizationWhen the asset satisfying the capitalizing conditions has reached its usable or sellable status, capitalizing ofborrowing expenses shall be terminated. Borrowing expenses incurred after assets that meet capitalizationconditions reach the service or sales conditions are accounted into the current gain/loss account according to theactual amounts.(3) Capitalization suspension periodIf the construction assets satisfying the capitalizing conditions are suspended abnormally for over 3 months,capitalizing of borrowing expenses shall be suspended. During the normal suspension period, borrowing expenseswill be capitalized continuously.(4) Calculation of the capitalization amount of borrowing expense18. Biological assets19. Petroleum assets20. Intangible assets(1) Pricing of intangible assetsThe Company’s intangible assets include land using rights, patent, industry property, special technologies, andsoftware.
                                                                     2014 Interim Report of China Fangda Group Co., LtdIntangible assets are initially measured at costs and the useful life will be determined when obtained. Where theuseful life is limited, the intangible assets will be amortized within the predicted useful life by using theamortization method that can reflect predicted realization way of the economic benefit of the assets; whether therealization way cannot be reliably confirmed, use the straight-line method. If the useful life is uncertain, theintangible assets are not amortized.(2) Useful life of intangible assets with limited useful lifeAt the end of each year, the Company will reexamine the useful life and amortization basis of intangible assetswith limited useful life. If they change, adjust the prediction and handle it according to accounting estimatechanges.On the balance sheet day, if the intangible assets become unlikely to bring future economic benefits for theCompany, transfer all the intangible assets’ book value into the current gain/loss account.
            Items                Estimated useful life                            Basis
    Land using right            Beneficial age
    Patent                      10
    Proprietary technology      10
    Software                    5, 10 years
    Other intangible assets     10 years or beneficial age(3) Judgment basis of intangible assets without definite useful life(4) Provision of intangible assets impairmentThe Company recognizes impairment in intangible assets as follows: The Company judges whether there is a signof impairment to assets on the balance sheet day. If such sign exists, the Company estimates the recoverableamount and conducts the impairment test.The Company judges whether there is a sign of impairment to assets on the balance sheet day. If such sign exists,the Company estimates the recoverable amount and conducts the impairment test.The recoverable amount is determined by the higher of the net of fair value minus disposal expense and thepresent value of the predicted future cash flow.Once 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.The research expenses are accounted the current gain/loss account.Development expenses can only be capitalized when the following conditions are satisfied: the technology is
                                                                        2014 Interim Report of China Fangda Group Co., Ltdfeasible for use or sales; there is the intention to use or sell the intangible assets; it can be proven that the productgenerated by the intangible assets is demanded or the intangible assets in demanded; if the intangible is usedinternally, it can be proven that it is useful; with necessary technical and financial resources and other resources tocomplete the development of the intangible assets and the intangible assets can be used or sold; the developmentexpense can be reliably measured. If not, the development expense is accounted into the current gain/loss account.If a research project meets the above-mentioned conditions and passes the technical and economic feasibilitystudy, the project will enter the development stage.Expenses in the development stage capitalized are listed as development expense on the balance sheet andtransferred to intangible assets when the project reaches the useful condition.(6) Audit of internal research and development expenses21. Long-term amortizable expensesThe Company’s long-term amortizable expenses are measured at the actual costs and amortized averagely basedon the beneficial term. For long-term amortizable expenses that are not beneficial in the subsequent accountperiods, the residual value is fully accounted into the current gain/loss account.22 Transfer of assets without repurchase conditions23. Anticipated liabilities(1) Recognition standards of anticipated liabilitiesWhen responsibilities occurred in connection to contingent issues, and all of the following conditions are satisfied,they are recognized as expectable liability in the balance sheet:(1) This responsibility is a current responsibility undertaken by the Company;(2) Execution of this responsibility may cause financial benefit outflow from the Company;(3) Amount of the liability can be reliably measured.(2) Measurement of anticipated liabilities
    Expected liabilities are initially measured at the best estimation on the expenses to exercise the currentresponsibility, and with considerations to the relative risks, uncertainty, and periodic value of currency. When theperiodic value of currency is with major influence, then the best estimation will be determined at the discount offuture cash outflow. The book value of expected liability is revised at balance sheet day, and adjustment will bemade to reflect current best estimation.
                                                                      2014 Interim Report of China Fangda Group Co., Ltd24. Share payment and equity instruments(1) Share payment category(2) Recognition of fair value of equity instruments(3) Basis for recognition of the best estimation of realizable equity instruments(4) Related accounting treatment of implementation, modification and suspension share payment plan25. Repurchase of the Companys shares26. 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 income according tothe contract amount received or receivable from the buyer: (1) Main risks and rewards attached to the ownershipof the goods have been transferred to the buyer; (2) No succeeding power of administration or effective control isreserved which are usually attached to ownership; (3) Amount received can be reliably measured; (4) Relatedfinancial benefit may inflow to the Company; (5) Relative costs, occurred or will occur, can be reliably measured.Revenue of products for domestic sales is recognized when the Company delivers the products and receives thesales payment or obtains the payment voucher; revenue for products for overseas sales is recognized at departureof the products.(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 using right wasreceived 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.The completion percentage is the costs occurred on the total cost.The reliable estimation of the result of providing of labor service must meet the following conditions: A. therevenue can be reliably measured; B. the economic benefit is very likely to flow into the company; C. thecompletion can be determined reliably; D. costs incurred or will be incurred can be reliably measured.If the result cannot be reliably estimated, use the service cost amount of the compensation obtained or will beobtained to recognize the revenue of the providing of labor service and recognize the incurred labor service cost asthe current expense. If no compensation can be obtained for incurred labor service cost, no revenue can berecognized.
                                                                      2014 Interim Report of China Fangda Group Co., Ltd(4) Basis and method for recognition of contract completion progress when the revenue from providing oflabor service and construction contracts is recognized on the competition percentage.On the balance sheet day, the Company recognizes the contract income and costs using the completion percentagemethod if the result of the construction contract can be reliably estimated. If not, such contracts are treateddifferently. If the contract cost can be recovered, the revenue is recognized according to the actual contract coststhat can be recovered and the contract cost is recognized as the current expense; if not, the contract cost isrecognized as the current expense and no revenue is recognized.If the estimated total costs exceed the total revenue, the Company recognizes the estimated loss as the currentexpense.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 revenuecan be reliably measured; B. the economic benefit is very likely to flow into the company; C. the completion costcan be clearly distinguished and determined reliably; D. the completion and costs that will be incurred forcompletion of the contract can be reliably recognized.27. Government subsidy(1) TypeThe Company divides government subsidies into assets-related and earnings-related government subsidies.(2) Accounting policyGovernment subsidy is only recognized when the required conditions are met and the subsidy is received.When a government subsidy is monetary capital, it is measured at the received or receivable amount. When thereis no clear evidence indicating compliance with related conditions for governmental support and it is estimatedthat the Company can receive a government subsidy, it will be measured at the receivable amount. Otherwise, it ismeasured at the amount actually received.Government subsidies related to assets are obtained by the Company to purchase, build or formulate in othermanners long-term assets; or subsidies related to benefits.For subsidies that can formulate long-term assets without clear government regulations, the part of the subsidiescorresponding to the asset value will be measured as assets-related government subsidies, while the rest of themwill be measured as benefit-related government subsidies. Where it is difficult to distinguish them from each other,the whole subsidies will be measured as benefit-related government subsidies.Government subsidies in connection with capital are recognized as differed income, and amortized straight to itsuseful life, and accounted into current income account. Government subsidies in connection with gains, which areused to cover current expenses or losses, are recognized as current gain/loss, if used to cover future expenses orlosses, recognized as differed gains, and recorded to current income account to the period when the expenses arerecognized. Government subsidy measured at the nominal amount is accounted into current income account.
                                                                       2014 Interim Report of China Fangda Group Co., LtdIf a recognized government subsidy needs to be returned, if there are relative differed gains, the balance ofdiffered gains will be set off, the exceeded part shall be recorded into current income account; if there is norelative differed gain, record to current income account directly.28. Deferred income tax assets and deferred income tax liabilities(1) Basis for recognition of deferred income tax assetsFor deductable temporary difference, deductible loss and tax deduction that can be accounted in subsequent years,the Company recognizes the incurred deferred income tax assets to the extent to the future income tax proceedsthat is very likely to be received for deducting deductable temporary difference, deductable loss and tax deduction,unless the deductable temporary difference is generated in following transactions: (1) the transaction is not amerger and the transaction does not affect the accounting profit or taxable proceeds; (2) for the taxable temporarydifference related to investment in subsidiaries and joint ventures, the corresponding deferred income tax assetsare recognized when the following condition is met: the temporary difference is very likely to be reversed in theforeseeable future and it is very likely to receive the taxable proceeds that can be used to deduct the deductabletemporary difference.(2) Basis for recognition of deferred income tax liabilitiesThe taxable temporary difference recognizes the related deferred income tax liabilities, unless the taxabletemporary difference is created by the following transactions: (1) Initial recognition of goodwill, or of assets orliabilities generated in transactions with the following features: the transaction is not a merger and the transactiondoes not affect the accounting profit or taxable proceeds; (2) For taxable temporary difference related toinvestment in subsidiaries and joint ventures, the reversal timing for the temporary difference can be controlledand the difference is unlikely to be reversed in the foreseeable future.29. Operational leasing and financial leasing(1) Accounting of operational leasingThe Company is the leaserRentals from operational leasing are recognized as current gains on straight basis to the periods of leasing. Initialdirect expenses are recorded to current income account.The Company is the leaseeRentals in operational leasing are recorded to relative capital cost or current income account on straight basis tothe periods of leasing. Initial direct expenses are recorded to current income account.(2) Accounting of financial leasingThe Company is the leaserIn financial leasing, the book value of financial rental is the sum of lowest amount of the rent and the initialexpenses since the date when the lease is started. The difference between the sum of lowest rental, initial direct
                                                                       2014 Interim Report of China Fangda Group Co., Ltdexpense and unsecured balance and the current value is recognized as the unrealized financial income. Unrealizedfinancial income is recognized as financial income at actual interest basis to the periods of the leasing period.The Company is the leaseeThe Company measures the leased assets as the lower of the fair value and the present value of minimum leasepayment of the leased assets on the starting date of the lease and records the minimum lease payment as long-termpayable and the difference between the two as unrecognized financing expense. The initial direct expense isaccounted into asset value. Unrecognized financial cost is recognized as financial cost at actual interest basis tothe periods of the 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-back30. Assets held for sales(1) Recognition standard(2) Accounting treatment31. Asset securitization32. Accounting of arbitrage hedging
      Arbitrage hedging is one or multiple hedging tools used to prevent the commodity price risk by using theforecast fluctuation of the hedging tools to offset the all or part of the cash flow changes in the arbitration items.The Company uses aluminum futures contracts as the arbitrage tools. The arbitraged item is forecast raw material– aluminum purchase. The arbitrage must meet all the following conditions to be considered as highly effective bythe Company:
      1. Before and during arbitrage, the arbitrage will effectively offset the cash flow changes caused by thearbitraged risks during the period.
      2. The actual offsetting result ranges between 80% and 125%.The part of gains or losses in arbitrage tools in the effective arbitrage are directly recognized as owner’s interestsand reflected as separate items. The amount in the effective arbitrage is recognized by the accumulative gains orlosses from the starting of arbitrage and accumulative changes to the current value of future forecast cash flowsfrom the start of arbitrage. When it is forecasted that a transaction would cause the Company to recognizefinancial assets or liabilities, the related gains or losses previously recognized as owner’s interests will betransferred out when the financial assets or liabilities impact the Company’s gain/loss and included in the currentgain/loss. When the net loss previously recognized in owner’s interests cannot be offset in the future accountperiod, the part that cannot be offset should be transferred out and included in the current gain/loss. Theabove-mentioned arbitrage account expires when the arbitrage tools expire or are sold, terminated and no longermeet the accounting conditions.
                                                                        2014 Interim Report of China Fangda Group Co., Ltd33. Major changes in accounting policies and estimatesNo change in major accounting estimates in the report period(1) No change in major accounting policies in the report period(2) No change in major accounting policies in the report period34. Correction of previous accounting faultsFaults in previous accounts in the current report period□ Yes √ NoNo fault in previous accounts in the current report period(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 √ No35. Other major accounting policies, accounting estimates and preparation of financial statementsV Taxation1. Major taxes and tax rates
                        Tax                                 Tax basis                             Tax rate
    VAT                                        Taxable income                         6%、13%、17%
    Business tax                               Taxable income                         3%、5%
    City maintenance and construction tax      Taxable turnover                       1%、5%、7%
    Enterprise income tax                      Taxable income                         25%,15%,0Income tax rates for branches and factories2. Tax preference and approval(1) According to the Certification of High-tech Enterprise issued by Shenzhen Commission of TechnologicalInnovation, Shenzhen Commission of Finance, Shenzhen National Tax Bureau, and Shenzhen Local Tax Bureauon September 12, 2012, Fangda Jianke was entitled to enjoy a tax preference of enterprise income tax of 15% forthree years (2012-2014) since the qualifications were awarded.
                                                                            2014 Interim Report of China Fangda Group Co., Ltd(2) According to the Certification of High-tech Enterprise issued by Shenzhen Commission of TechnologicalInnovation, Shenzhen Commission of Finance, Shenzhen National Tax Bureau, and Shenzhen Local Tax Bureauon September 12, 2012, Fangda Decoration was entitled to enjoy a tax preference of enterprise income tax of 15%for three years (2012-2014) since the qualifications were awarded.(3) According to the Certification of High-tech Enterprise issued by Jiangxi Ministry of Science and Technology,Jiangxi Ministry of Finance, Jiangxi National Tax Bureau, and Jiangxi Local Tax Bureau on November 7, 2012,Fangda New Material was entitled to enjoy a tax preference of enterprise income tax of 15% for three years(2012-2014) since the qualifications were awarded.(4) On December 25, 2013, Kexunda was certified by Shenzhen Nanshan National Tax Bureau as a software andintegrated circult designer according to the Shenzhen National Tax Reduction Registration [2013] No.739 andwill enjoy exemption from the enterprise income tax for two years and 50% reduction of the same tax for anotherthree years from the year that the company starts making a net profit. Kexunda started making profits in 2013 andtherefore starts to enjoy the exemption.(3) OthersVI Merger of enterprises and consolidated financial statements1. Subsidiaries(1) Subsidiaries founded or acquired from investment
                                                                                                                           In RMB
    Subsidia   Type    Regi    Busine   Regis     Business    Actu     Balan    Share    Proport   Cons    Minor    Amoun        The balance of the
    ry       of    stere     ss     tered      scope        al     ce of    holdin   ion of    olida   share     t for       owners’ interest in
           subsi    d               capita                inves    other      g       votes     te     holder   deducti       the parent after
           diary   addr               l                   tment    items                       state     s’      ng           deducting the
                   ess                                    at the   comp                        ment    equity   minorit       excessive part of
                                                           end     osing                        s                  y         the loss shared by
                                                          of the    net                                         gain/lo           minority
                                                          perio    invest                                        ss in       shareholders over
                                                            d      ment                                           the        the share of profits
                                                                     in                                         minorit        in the owners’
                                                                   subsi                                           y           interest in the
                                                                   diarie                                       interest        subsidiary of
                                                                     s                                             s              minority
                                                                                                                             shareholder at the
                                                                                                                              beginning of the
                                                                                                                                     year
    Shenzhe    Fully   Shen    Design   310,0    Designing,   310,0             100.0    100.00    Yes
    n          -own    zhen    ing,     00,00    manufactu    00,00                0%         %
    Fangda     ed              manufa   0.00     ring, and     0.00
                                                                   2014 Interim Report of China Fangda Group Co., Ltd
    Jianke     subsi          cturing            installatio
    Group      diary          , and              n of
    Co.,                      installa           curtain
    Ltd.                      tion of            walls
                          curtain
                          walls
    Shenzhe    Fully   Shen   Installa   105,0   Designing,    183,7   100.0    100.00   Yes
    n          -own    zhen   tion       00,00   technical     77,27     0%         %
    Fangda     ed             and        0.00    developin      1.73
    Automat    subsi          process            g,
    ic         diary          ing of             installatio
    System                    metro              n, and
    Co.,                      screen             sales of
    Ltd.                      door               PSD
                                             system;
                                             import &
                                             export;
                                             installatio
                                             n and
                                             processing
                                             of PSD.
    Shenzhe    Fully   Shen   Produc     USD     R&D,          3,200   100.0    100.00   Yes
    n          -own    zhen   tion       3,200   design and    ,000.     0%         %
    Fangda     ed             and        ,000.   production      00
    Yide       subsi          distrib    00      of
    New        diary          ution              new-type
    Material                  of                 composite
    Co.,                      new-ty             materials
    Ltd.                      pe
                          compo
                          site
                          materia
                          ls
    Fangda     Fully   Nanc   Produc     USD     Production    12,00   100.0    100.00   Yes
    New        -own    hang   tion       12,00   and sales     0,000     0%         %
    Material   ed             and        0,000   of              .00
    s          subsi          sales      .00     new-type
    (Jiangxi   diary          of                 materials,
    ) Co.,                    new-ty             composite
    Ltd.                      pe                 materials,
                          materia            production
                          ls                 of curtain
                          compo              walls,
                                                                   2014 Interim Report of China Fangda Group Co., Ltd
                          site               windows,
                          materia            metal
                          ls and             structures
                          produc             and
                          tion of            componen
                          curtain            ts, metal
                          walls              products
                                             and
                                             environme
                                             ntal
                                             protection
                                             materials
                                             and
                                             products
    Jiangxi    Fully   Nanc   Design     20,00   Design,       20,00   100.0    100.00   Yes
    Fangda     -own    hang   ,          0,000   production    0,000     0%         %
    New        ed             produc     .00     , sales and     .00
    Type       subsi          tion,              installatio
    Alumin     diary          sales              n of
    um Co.,                   and                curtain
    Ltd.                      installa           wall
                          tion of            aluminium
                          various            materials,
                          curtain            doors,
                          wall               windows
                          alumin             and
                          um                 sectional
                          doors              materials
                          and
                          windo
                          ws
    Hong       Fully   Hon    Invest     HKD     Investmen     10,00   100.0    100.00   Yes
    Kong       -own    g      ment       10,00   t              0.00     0%         %
    Junjia     ed      Kon               0.00
    Group      subsi   g
    Co.,       diaryLtd.
    Shenyan    Cont    Shen   Manuf      200,0   Manufactu     108,8   64.58     64.58   Yes     53,88    -1,542,
    g          rolle   yang   acturin    00,00   ring of       52,07      %         %            9,866.   579.90
    Fangda     d              g of       0.00    semicondu      3.85                                99
    Semi-co    subsi          semico             ctor
    nductor    diari          nducto             lighting
    Lighting   es             r                  material
                                                                  2014 Interim Report of China Fangda Group Co., Ltd
    Co.,                     lightin            and chips;
    Ltd.                     g                  lighting
                         materia            source
                         l and              encapsulat
                         chips;             ion;
                         lightin            developin
                         g                  g,
                         source             designing,
                         encaps             manufactu
                         ulation            ring,
                         ;                  engineerin
                         develo             g,
                         ping,              installatio
                         designi            n and
                         ng,                trading of
                         manufa             semicondu
                         cturing            ctor
                         ,                  lighting
                         engine             system
                         ering,
                         installa
                         tion
                         and
                         trading
                         of
                         semico
                         nducto
                         r
                         lightin
                         g
                         system
    Shenzhe   Fully   Shen   Develo     1,000   Computer      1,000   100.0    100.00   Yes
    n         -own    zhen   ping of    ,000.   software      ,000.     0%         %
    Kexund    ed             hardwa     00      and             00
    a         subsi          re and             hardware
    Softwar   diary          softwar            developme
    e Co.,                   e,                 nt and
    Ltd.                     system             sales,
                         integra            computer
                         tion,              software
                         technic            developme
                         al                 nt, system
                         consult            integration
                         ing                and
                                                                                       2014 Interim Report of China Fangda Group Co., Ltd
                                                    technical
                                                    consulting
    Shenzhe     Fully   Shen   Real-es        50,00     Developm       50,00               100.0        100.00    Yes
    n           -own    zhen   tate           0,000     ent and        0,000                 0%             %
    Fangda      ed             develo         .00       operating        .00
    Property    subsi          pment                    of real
    Develop     diary          and                      estate on
    ment                       operati                  land of
    Co.,                       on;                      which
    Ltd.                       propert                  land use
                           y                        right is
                           manag                    legally
                           ement                    obtained
                                                    by the
                                                    Company;
                                                    property
                                                    manageme
                                                    ntNotes to subsidiaries founded or acquired from investment2. Notes to changes in the consolidation scopeNotes to changes in the consolidation scope□ Applicable √ InapplicableVII Notes to the consolidated financial statements1. Monetary capital
                                                                                                                                     In RMB
                                                  Closing amount                                             Opening amount
            Items                 Foreign          Exchange                                Foreign            Exchange
                                                                      RMB                                                      RMB
                                 exchange                rate                             exchange              rate
    Cash:                                --                   --               15,392.46           --                --                33,975.32
    RMB                                  --                   --               15,280.78           --                --                29,296.71
    HK Dollar                                 142.04 0.78623                     111.68             5,950.69 0.78623                    4,678.61
    Bank deposits:                       --                   --       258,658,623.21              --                --           297,145,634.33
    RMB                                  --                   --       208,370,365.42              --                --           296,625,709.31
    USD                               8,120,413.19 6.0969               49,509,347.19              10,734.32 6.0969                    65,446.08
    SGD                                162,798.75 4.7845                   778,910.60              94,989.85 4.7845                  454,478.94
    Other monetary capital:              --                   --        48,755,607.53              --                --            36,697,312.32
                                                                              2014 Interim Report of China Fangda Group Co., Ltd
    RMB                               --            --            48,755,607.53          --            --            36,697,312.32USD
    Total                             --            --           307,429,623.20          --            --           333,876,921.97Amounts with limitation of use, deposited abroad, with potential recovering risk should be separately explained.1. RMB12 million among the balance of bank deposit at end of year was frozen by the court for the lawsuit
    involved by Fangda Jianke. For details of the case please see Note VII-1.
    Balance of RMB48,755,607.53 under other monetary capital was mainly deposit for bank accepted notes and
    letter of guarantee, including deposit of RMB48,639,666.59 for accepted notes and guarantee letter which are
    not regarded as cash equivalent at preparing of cash flow statement.2. Notes receivable(1) Classification of notes receivable
                                                                                                                        In RMB
                         Type                                   Closing amount                      Opening amount
    Bank acceptance                                                            4,121,078.00                          21,898,770.43
    Commercial acceptance                                                      6,608,774.00
    Total                                                                     10,729,852.00                          21,898,770.43(2) Pledged notes receivable at the end of period
                                                                                                                        In RMB
           Issuer               Date of issue               Due date                  Amount                    Notes(3) Notes of which the issuer is unable to perform and transferred into account receivable, and notesendorsed to other parties but remains immatureThe Company has no note transferred into account receivable due to the failure of the issuer to perform.Notes endorsed to other parties but remaining immature
                                                                                                                        In RMB
           Issuer               Date of issue               Due date                  Amount                    Notes
    Yufeng Group Co., Ltd.    March 12, 2014             September 12, 2014                   1,500,000.00CPI Environmental
    Protection Engineering    May 27, 2014               November 27, 2014                    1,348,800.00Co. Ltd.
    Yufeng Group Co., Ltd.    March 14, 2014             September 19, 2014                   1,000,000.00
    Yufeng Group Co., Ltd.    March 14, 2014             September 19, 2014                   1,000,000.00
    Yufeng Group Co., Ltd.    March 14, 2014             September 19, 2014                   1,000,000.00
                                                                                    2014 Interim Report of China Fangda Group Co., Ltd
    Total                                --                          --                                5,848,800.00             --3. Receivable interest(1) Receivable interest
                                                                                                                                   In RMB
            Items           Opening amount                  Increase                      Decrease                  Closing amount
    Interest receivable                       36,387.50                30,062.50                       45,650.00                     20,800.00
    Total                                     36,387.50                30,062.50                       45,650.00                     20,800.004. Account receivable(1) Account receivable disclosed by categories
                                                                                                                                   In RMB
                                             Closing amount                                            Opening amount
                           Remaining book value          Bad debt provision         Remaining book value          Bad debt provision
             Type
                              Amount           Prop       Amount          Prop          Amount       Propo        Amount         Proporti
                                               ortio                      ortio                       rtion                        on
                                                    n                      nAccount receivable for which bad debt provision is made by group
    Receivable accounts        1,158,177,      98.18%      164,538,655.1     14.21%         1,059,9      98.00     161,204,960.8     15.21%
    outside consolidation         273.39                                 9                  35,942.            %              2
                                                                                             75
    Subtotal                   1,158,177,      98.18%      164,538,655.1     14.21%         1,059,9      98.00     161,204,960.8     15.21%
                               273.39                                 9                  35,942.            %              2
                                                                                             75
    Account receivable with    21,520,47        1.82%      21,520,471.60      100.00        21,620,       2.00     21,570,471.60     99.77%
    minor individual                 1.60                                              %     471.60            %amount and bad debtprovision providedindividually
    Total                      1,179,697,         --       186,059,126.7          --        1,081,5       --       182,775,432.4        --
                               744.99                                 9                  56,414.                           2
                                                                                             35Notes to account receivableFor the current year, the Company recognizes project receivables over RMB8 million (inclusive) as “individualreceivable with large amount” while recognizes product receivables over RMB2 million (included) as “individualreceivable with large amount”.
                                                                               2014 Interim Report of China Fangda Group Co., LtdThe Company had no account receivable with major individual amount and bad debt provision providedindividually at the end of the period.In the group, the account receivable of which bad debt provision is made through the account aging method:
                                                                                                                                 In RMB
                                        Closing amount                                          Opening amount
         Age             Remaining book value                                      Remaining book value
                                                         Bad debt provision                                       Bad debt provision
                          Amount          Proportion                               Amount            ProportionLess than 1 year
    Including:                   --               --                 --                   --                 --                 --
    Less than 1 year         630,127,874.39      53.41%            18,917,677.59      549,013,214.34        51.80%        16,472,504.90Subtotal for less
                         630,127,874.39      53.41%            18,917,677.59      549,013,214.34        51.80%        16,472,504.90than 1 year
    1-2 years                237,102,431.44      20.10%            23,710,243.12      209,253,623.01        19.74%        20,925,362.29
    2-3 years                117,813,746.62       9.99%            35,344,124.00      135,137,295.40        12.75%        40,541,188.60
    Over 3 years             173,133,220.94      14.68%            86,566,610.49      166,531,810.00        15.71%        83,265,905.03
    Total                  1,158,177,273.39       --              164,538,655.19    1,059,935,942.75         --          161,204,960.82Account receivable adopting the balance percentage method in the group□ Applicable √ InapplicableAccount receivable adopting other methods in the group□ Applicable √ InapplicableAccount receivable with minor individual amount and bad debt provision provided individually√ Applicable □ Inapplicable
                                                                                                                                 In RMB
         Description       Remaining book value        Bad debt provision           Provision rate                  Reason
                                                                                                          Aged over 5 years, unlike
    Trade receivable                      4,478,919.79              4,478,919.79                    100.00%
                                                                                                          to be recovered
                                                                                                          Litigation-related,
    Trade receivable                        634,619.39                634,619.39                    100.00%
                                                                                                          unlikely to be recovered
    Curtain wall project                                                                                      Aged over 5 years, unlike
                                      3,160,003.20              3,160,003.20                    100.00%
    payment                                                                                                   to be recovered
    Curtain wall project                                                                                      Litigation-related,
                                        430,629.58                430,629.58                    100.00%
    payment                                                                                                   unlikely to be recovered
    Others                               12,816,299.64             12,816,299.64                    100.00%
    Total                                21,520,471.60             21,520,471.60               --                          --(2) No written-back or recovered account receivable during the report periodBad debt provision for account receivable with major individual amount or with minor individual amount but independent
                                                                                 2014 Interim Report of China Fangda Group Co., Ltdimpairment test
                                                                                                                                  In RMB
         Description        Remaining book value         Bad debt amount              Provision rate                  Reason
                                                                                                            Aged over 5 years, unlike
    Trade receivable                       4,478,919.79               4,478,919.79                    100.00%
                                                                                                            to be recovered
                                                                                                            Litigation-related,
    Trade receivable                            634,619.39              634,619.39                    100.00%
                                                                                                            unlikely to be recovered
    Curtain wall project                                                                                        Aged over 5 years, unlike
                                       3,160,003.20               3,160,003.20                    100.00%
    payment                                                                                                     to be recovered
    Curtain wall project                                                                                        Litigation-related,
                                            430,629.58              430,629.58                    100.00%
    payment                                                                                                     unlikely to be recovered
    Others                                12,816,299.64              12,816,299.64                    100.00%
            Total               21,520,471.60              21,520,471.60Notes to account receivable with minor individual amount but triggering substantial risks after being grouped:The Company accounts receivables with long accounting ages, worsening customer credit but small amount asother receivables with combined major risks.(3) No written-off account receivable during the report period(4) No shareholder holding 5% or above shares with voting rights of the Company owes any accountreceivable to the Company at the end of period.(5) Top 5 account receivable entities
                                                                                                                                  In RMB
                             Relationship with the                                                           Percentage in the total
           Entity                                             Amount                       Term
                                   Company                                                                       account receivable
                          Curtain wall engineering
    No.1                                                            37,584,874.83 Less than 1 year                                    3.19%
                          customer
                          Curtain wall engineering
    No.2                                                             29,410,011.31 1-2 years                                          2.49%
                          customer
                          Curtain wall engineering
    No.3                                                            28,646,942.98 1-3 years                                           2.43%
                          customer
                          Curtain wall engineering
    No.4                                                            27,499,096.15 Less than 1 year                                    2.33%
                          customer
                          Curtain wall engineering
    No.5                                                            25,243,279.60 1-3 years                                           2.14%
                          customer
    Total                                  --                      148,384,204.87               --                                 12.58%
                                                                                 2014 Interim Report of China Fangda Group Co., Ltd(6) There is no receivable from affiliates at the end of the report period.(7) The Company did not de-recognize account receivable in the report period.(8) The Company did not conduct securitization of receivables in the report period.5. Other receivables(1) Other receivables disclosed by categories
                                                                                                                              In RMB
                                           Closing amount                                         Opening amount
                          Remaining book value        Bad debt provision         Remaining book value         Bad debt provision
           Type
                                         Proportio                  Proportio                                               Proportio
                            Amount                    Amount                     Amount        Proportion     Amount
                                            n                          n                                                       nOther receivables withmajor individual amount
                          1,220,316.84      1.46% 1,220,316.84 100.00% 1,220,316.84                1.47%     1,220,316.84 100.00%and bad debt provisionprovided individuallyOther receivables for which bad debt provision is made by groupIncluding: other
                          80,300,887.9               14,764,705.0               79,642,281.3
    receivables out of the                     96.18%                     18.39%                      96.15% 13,343,551.16        16.75%
                                     7                         1                          3consolidation
                          80,300,887.9               14,764,705.0               79,642,281.3
    Subtotal                                   96.18%                     18.39%                      96.15% 13,343,551.16        16.75%
                                     7                         1                          3Other receivables withminor individual amount
                          1,971,822.77      2.36% 1,971,822.77 100.00% 1,971,822.77                2.38%     1,971,822.77 100.00%and bad debt provisionprovided individually
                          83,493,027.5               17,956,844.6               82,834,420.9
    Total                                       --                         --                          --       16,535,690.77      --
                                     8                         2                          4Notes to other receivablesOther receivables with an individual amount of RMB1 million (inclusive) are receivables with major individualamount.Other receivables with major individual amount and bad debt provision provided individually at the end of theperiod√ Applicable □ Inapplicable
                                                                                                                              In RMB
        Description        Remaining book value          Bad debt amount              Provision rate               Reason
    Receivable deposit                    1,220,316.84                1,220,316.84                    100.00% Aged over 5 years, unlike
                                                                                  2014 Interim Report of China Fangda Group Co., Ltd
                                                                                                                to be recovered
    Total                               1,220,316.84                  1,220,316.84               --                            --In the group, the other receivables of which bad debt provision are made through the account aging method√ Applicable □ Inapplicable
                                                                                                                                  In RMB
                                         Closing amount                                            Opening amount
                             Remaining book value                                    Remaining book value
             Age
                                                  Proporti Bad debt provision                           Proporti    Bad debt provision
                                Amount                                                 Amount
                                                    on                                                    onLess than 1 yearIncluding:
    Less than 1 year                  36,735,780.21 44.00%             1,097,323.30        37,490,912.58 47.07%                 1,124,727.37Subtotal for less than 1
                                  36,735,780.21 44.00%             1,097,323.30        37,490,912.58 47.07%                 1,124,727.37year
    1-2 years                         12,980,583.13 15.55%             1,298,058.32        16,166,703.85 20.30%                 1,616,670.39
    2-3 years                         14,581,647.76 17.46%             4,374,494.34        11,950,894.86 15.01%                 3,585,268.47
    Over 3 years                      16,005,376.87 19.17%             7,994,829.06        14,033,770.04 17.62%                 7,016,884.93
    Total                             80,300,887.97      --           14,764,705.02        79,642,281.33       --              13,343,551.16Other receivables adopting the balance percentage method in the group□ Applicable √ InapplicableOther receivables adopting other methods in the group□ Applicable √ InapplicableOther receivables with minor individual amount and bad debt provision provided individually√ Applicable □ Inapplicable
                                                                                                                                  In RMB
         Description       Remaining book value           Bad debt provision           Provision rate                   Reason
    Prepaid engineering                                                                                             Aged over 5 years, unlike
                                      834,065.01                    834,065.01                    100.00%
    amount                                                                                                          to be recovered
                                                                                                                Aged over 5 years, unlike
    Receivable deposit                    550,000.00                    550,000.00                    100.00%
                                                                                                                to be recovered
                                                                                                                Aged over 5 years, unlike
    Prepaid account                       100,000.00                    100,000.00                    100.00%
                                                                                                                to be recovered
    Others                                487,757.76                    487,757.76                    100.00%
    Total                               1,971,822.77                  1,971,822.77               --                            --
                                                                                2014 Interim Report of China Fangda Group Co., Ltd(2) No written-back or recovered other receivables during the report periodBad debt provision for other receivables with major individual amount or with minor individual amount but independent impairmenttest
                                                                                                                                 In RMB
        Description       Remaining book value          Bad debt amount              Provision rate                  Reason
    Receivable deposit                   1,220,316.84               1,220,316.84                      100.00%   Aged over 5 years,
                                                                                                            unlike to be recovered
    Prepaid engineering                    834,065.01                834,065.01                       100.00%   Aged over 5 years,
    amount                                                                                                      unlike to be recovered
    Receivable deposit                     550,000.00                550,000.00                       100.00%   Aged over 5 years,
                                                                                                            unlike to be recovered
    Prepaid account                        100,000.00                100,000.00                       100.00%   Aged over 5 years,
                                                                                                            unlike to be recovered
    Others                                 487,757.76                487,757.76                       100.00%
    Total                                3,192,139.61               3,192,139.61                 --                         --Notes to other receivables with minor individual amount but triggering substantial risks after being grouped:The Company accounts receivables with long accounting ages, worsening customer credit but small amount asother receivables with combined major risks.(3) No written-off other receivable during the report period(4) No shareholder holding 5% or above shares with voting rights of the Company owes any otherreceivables to the Company at the end of period.(5) Nature and description of major other receivables
                                                                                                                                 In RMB
                                                                                                     Percentage in the total other
               Entity                        Amount                  Nature or description
                                                                                                             receivablesHainan GreenTown Investment
                                                     4,346,000.00 Deposit                                                        5.21%Co., Ltd.Shenyang Zhongyi Industrial
                                                     4,365,161.24 House payment                                                  5.23%Co., Ltd.Zhejiang Jiayue Industrial Co.,
                                                     3,699,100.00 Deposit                                                        4.43%Ltd.
                Total                               12,410,261.24              --                                              14.87%(6) Top 5 other receivable entities
                                                                                                                                 In RMB
                                                                                        2014 Interim Report of China Fangda Group Co., Ltd
                                 Relationship with the                                                                  Percentage in the total
           Entity                                                  Amount                           Term
                                      Company                                                                               other receivablesHainan GreenTown
                              Customer                                   4,346,000.00 1-2 years                                           5.21%Investment Co., Ltd.Shenyang Zhongyi
                              Customer                                   4,365,161.24 Less than 1 year                                    5.23%Industrial Co., Ltd.Zhejiang Jiayue
                              Customer                                   3,699,100.00 2-3 years                                           4.43%Industrial Co., Ltd.
                              Curtain wall engineering
    Xin Song                                                                       575.00 2-3 years                                           0.00%
                              contractor
                              Curtain wall engineering
    Xin Song                                                                 2,673,752.61 Over 3 years                                        3.20%
                              contractor
                              Curtain wall engineering
    Wang Weihong                                                              196,384.29 Less than 1 year                                     0.24%
                              contractor
                              Curtain wall engineering
    Wang Weihong                                                              458,570.59 1-2 years                                            0.55%
                              contractor
                              Curtain wall engineering
    Wang Weihong                                                             1,123,604.99 2-3 years                                           1.35%
                              contractor
                              Curtain wall engineering
    Wang Weihong                                                              841,123.48 Over 3 years                                         1.01%
                              contractor
           Total                           --                           17,704,272.20                --                                   21.22%(7) There is no other receivable from affiliates at the end of the report period.(8) No other receivables de-recognized in the report period(9) The Company did not conduct securitization of other receivables in the report period.(10) Governmental subsidy recognized as receivable at the end of the report period
                                                                                                                                          In RMB
                                                                                                                            Reason for failing to
                    Governmental       Closing                     Estimated            Estimated           Estimated
    Entity                                         Closing age                                                              receiving the amount
                       subsidy         balance                   receiving date          amount           receiving basis
                                                                                                                              on time (if any)Shenzhen
                                                                                                          VAT refunded
    national tax                                       Less than 1 August 31,
                   VAT rebated        313,025.62                                          313,025.62 for software
    software VAT                                       year          2014
                                                                                                          companiesbureau
    Total                    --           313,025.62          --             --               313,025.62            --                   --
                                                                           2014 Interim Report of China Fangda Group Co., Ltd6. Prepayment(1) Account age of prepayments
                                                                                                                        In RMB
                                   Closing amount                                          Opening amount
        Age
                               Amount                     Proportion                     Amount                    ProportionLess than 1
                                          43,797,585.83       90.91%                              24,086,301.50        81.30%year
    1-2 years                                  1,886,554.46        4.32%                               2,582,202.92         9.27%
    2-3 years                                    186,327.58        0.46%                                486,463.33          1.76%
    Over 3 years                               1,022,609.54        4.31%                               1,209,048.46         7.67%
    Total                                     46,893,077.41       --                                  28,364,016.21        --(2) Top 5 prepayment entities
                                                                                                                        In RMB
                          Relationship with the
            Entity                                        Amount                    Time                      Reason
                               CompanyShenzhen Gongkan
                                                                                                     Prepaid engineering
    Geotechnical Group Co., Supplier                             9,222,934.32 June 5, 2014
                                                                                                     amountLtd.Foshan Jianmei
                        Supplier                             3,139,847.19 December 1, 2013           Prepaid accountAluminium Co., Ltd.
    CSG Holding Co., Ltd.   Supplier                             2,052,527.19 March 1, 2014              Prepaid accountHenan Yongtong
                        Supplier                             2,495,086.38 April 4, 2014              Prepaid accountAluminium Co., Ltd.Litong Aluminum
    Industry (Guangdong)    Supplier                             1,956,078.22 July 1, 2012               Prepaid accountCo., Ltd.
    Total                              --                      18,866,473.30              --                          --(3) No shareholder holding 5% or above shares with voting rights of the Company receives prepaymentfrom the Company at the end of period.(4) Notes to prepaymentThe prepayment increased by 65% year on year mainly due to prepayment made by the Company’s subsidiaryFangda Property Development Co., Ltd.
                                                                                   2014 Interim Report of China Fangda Group Co., Ltd7. Inventories(1) Classification of inventories
                                                                                                                                In RMB
                                          Closing amount                                            Opening amount
        Items           Remaining book      Depreciation                          Remaining book     Depreciation
                                                                Book value                                               Book value
                            value             provision                               value            provision
    Raw materials              75,384,550.69      1,492,798.29      73,891,752.40       47,592,162.78      1,492,798.29      46,099,364.49
    Product in process          4,382,783.72                     698,107,091.26          5,992,333.49                         5,992,333.49Finished goods in
                           16,329,671.20      1,984,145.11      14,345,526.09       10,246,627.50      1,984,145.11       8,262,482.39stockAsset formed by
                          198,614,835.34      1,830,742.67            38,526.81    229,499,318.33      1,830,742.67     227,668,575.66construction contractLow price
                               46,560.72                              46,560.72         51,278.67                            51,278.67consumable
    OEM materials                443,488.50                           443,488.50          873,790.05                            873,790.05
    Development cost          496,978,741.68                                           139,590,027.07                       139,590,027.07Materials in transit
    Total                     792,180,631.85      5,307,686.07   786,872,945.78        433,845,537.89      5,307,686.07     428,537,851.82(2) Inventory depreciation provision
                                                                                                                                In RMB
                         Opening balance of     Provision made in                     Decrease                     Closing balance of
         Item
                             book value          the current period        Write-back            Write-off            book value
    Raw materials                  1,492,798.29                                                                               1,492,798.29Finished goods in
                                1,984,145.11                                                                              1,984,145.11stockAsset formed by
                               1,830,742.67                                                                               1,830,742.67construction contract
    Total                          5,307,686.07                                                                               5,307,686.07(3) Inventory depreciation provision
                                                                                                         Proportion of written-back
              Items                            Basis                              Reason                amount in the closing balance
                                                                                                             of the inventory item
    Raw materials                   Realizable net value is lower
                                                                                       2014 Interim Report of China Fangda Group Co., Ltd
                                    the cost
                                    Realizable net value is lowerFinished goods in stock
                                    the cost
    Asset formed by construction        Predicted construction contract
    contract                            loss8. Other current assets
                                                                                                                                           In RMB
                        Items                                   Closing amount                                   Opening amount
    Reverse repurchase of treasury bonds                                         80,642,000.00
    VAT to be deducted                                                               9,166,955.68
                        Total                                                89,808,955.68Notes to other current assetsThe reverse repurchase of treasury bonds coincides with the definition of cash equivalent and is treated as cashequivalent in the consolidated cash flow statement.9. Investment in joint venture and associated companies
                                                                                                                                           In RMB
                                      Property of                                                                                   Net profit of
    Name of                                             Closing total    Closing total         Closing total    Total operating
                   Shareholding voting rights of                                                                                    the current
    invested entity                                            assets        liabilities            net assets        revenue
                                     the Company                                                                                       period1. Joint venture2. AssociateShenzhenGanshang Joint
                           20.40%              20.40% 50,330,423.32      1,562,001.85 48,768,421.47                    4,166.00       -204,939.05InvestmentCo., Ltd.10. Long-term share equity investment(1) Details of long-term share equity investment
                                                                                                                                           In RMB
                                                                                   Proportio Notes to
                                                                       Sharehold        n of      inconsiste               Provision      Cash
                                                                                                               Impairme
    Invested      Audit     Investme    Ending                 Closing ing in the         voting         nce                   made in     dividend
                                                  Change                                                          nt
    entity       method     nt cost    balance                balance    invested     rights in      between                   this         in the
                                                                                                               provision
                                                                        entity          the           the                   period        period
                                                                                    invested sharehold
                                                                               2014 Interim Report of China Fangda Group Co., Ltd
                                                                               entity    ing and
                                                                                          voting
                                                                                           right
                                                                                         proportio
                                                                                            nShenzhenGanshang
    Joint                    10,000,00 9,994,565 -41,807.5 9,952,757
              Equity                                                  20.40%   20.40%
    Investme                      0.00           .55      7      .98nt Co.,Ltd.
                         10,000,00 9,994,565 -41,807.5 9,952,757
    Total             --                                                   --        --         --
                              0.00           .55      7      .98(2) Restriction for transfer of capital to invested companies11. Investment real estate(1) Investment real estate measured at costs
                                                                                                                             In RMB
                           Opening balance of book                                                        Closing balance of book
          Items                                            Increase                   Decrease
                                     value                                                                        valueI Original total book
                                      26,150,933.45          17,666,669.66              14,743,910.08                29,073,693.03value
    1. Houses & buildings                 26,150,933.45          17,666,669.66              14,743,910.08                29,073,693.03II Accumulative total
    depreciation and                       5,680,620.94             828,617.22               3,287,749.22                 3,221,488.94amortization
    1. Houses & buildings                  5,680,620.94             828,617.22               3,287,749.22                 3,221,488.94III Total net book
    value of investment                   20,470,312.51          16,838,052.44              11,456,160.86                25,852,204.09real estate
    1. Houses & buildings                 20,470,312.51          16,838,052.44              11,456,160.86                25,852,204.09V Total book value of
                                      20,470,312.51          16,838,052.44              11,456,160.86                25,852,204.09investment real estate
    1. Houses & buildings                 20,470,312.51          16,838,052.44              11,456,160.86                25,852,204.09
                                                                                                                             In RMB
                                                                                                 Current period
    Depreciation and amortized amount for the current period                                                                  374,634.30
                                                                                   2014 Interim Report of China Fangda Group Co., Ltd
    Impairment provision for investment real estate for the current period                                                               0.00(2) Investment real estate measured at fair value
                                                                                                                                 In RMB
                 Items                Opening fair                 Increase                          Decrease             Closing fair
                                         value                                                                               value
                                                      Purch      Transferre     Gain/loss      Dis   Transferred to
                                                       ased       d from          caused       pos      own use
                                                                 own use or         by         al
                                                                 inventory       changes
                                                                                  in fair
                                                                                  value
    1. Total costs                      101,311,548.23                                                     7,961,202.44       93,350,345.79
    (1) Houses & buildings              101,311,548.23                                                     7,961,202.44       93,350,345.79
    2. Total changes in fair value       73,467,208.39                                                     3,201,600.13       70,265,608.26
    (1) Houses & buildings               73,467,208.39                                                     3,201,600.13       70,265,608.26
    3. Total book value of              174,778,756.62                                                    11,162,802.57      163,615,954.05investment real estate
    (1) Houses & buildings              174,778,756.62                                                    11,162,802.57      163,615,954.0512. Fixed assets(1) Fixed assets
                                                                                                                                 In RMB
                                 Opening balance                                                                      Closing balance of
             Items                                                 Increase                          Decrease
                                  of book value                                                                          book value
    1. Original total book value:      685,695,819.65                              35,007,004.98         27,421,366.03       693,281,458.60
    Houses & buildings                 393,946,389.09                              29,972,052.95         25,293,669.66       398,624,772.38
          Mechanical
                                   233,769,225.30                               1,102,240.95            194,800.00       234,676,666.25equipment
          Transportation
                                    17,163,113.28                                101,367.52             194,114.00        17,070,366.80facilitiesElectronics and other
                                    40,817,091.98                               3,831,343.56          1,738,782.37        42,909,653.17devices
                                 Opening balance
                 --                                   Increase                Provision              Decrease          Closing balance
                                  of book value2. Total accumulative
                                   207,630,801.74     3,287,749.22             11,783,729.60          2,457,654.92       220,244,625.64depreciation:
                                                                     2014 Interim Report of China Fangda Group Co., Ltd
    Houses & buildings                 26,604,093.45   3,287,749.22   5,091,814.20          994,401.07      33,989,255.80
          Mechanical
                                  150,791,998.23                  4,567,449.94          175,320.00     155,184,128.17equipment
          Transportation
                                    9,179,557.42                   785,200.11           100,614.60       9,864,142.93facilitiesElectronics and other
                                   21,055,152.64                  1,339,265.35        1,187,319.25      21,207,098.74devices
                                Opening balance
               --                                                    --                              Closing balance
                                 of book value3. Total of net book value of
                                  478,065,017.91                     --                                473,036,832.96fixed assets
    Houses & buildings                367,342,295.64                     --                                364,635,516.58
          Mechanical
                                   82,977,227.07                     --                                 79,492,538.08equipment
          Transportation
                                    7,983,555.86                     --                                  7,206,223.87facilitiesElectronics and other
                                   19,761,939.34                     --                                 21,702,554.43devices4. Total impairment
                                   15,134,747.93                     --                                 14,275,847.73provision
    Houses & buildings                  1,131,563.50                     --                                    272,663.30
          Mechanical
                                   14,003,184.43                     --                                 14,003,184.43equipmentElectronics and other
                                                                     --devices5. Total of the book value of
                                  462,930,269.98                     --                                458,760,985.23fixed assets
    Houses & buildings                366,210,732.14                     --                                364,362,853.28
          Mechanical
                                   68,974,042.64                     --                                 65,489,353.65equipment
          Transportation
                                    7,983,555.86                     --                                  7,206,223.87facilitiesElectronics and other
                                   19,761,939.34                     --                                 21,702,554.43devicesThe depreciation amounts to RMB11,783,729.60. The original value of transfer of construction progress into thefixed original assets amounts to RMB1,932,263.77.
                                                                                     2014 Interim Report of China Fangda Group Co., Ltd(2) Temporary idle fixed assets
                                                                                                                                  In RMB
                                                  Accumulative               Impairment
         Items                Book value                                                         Net book value           Notes
                                                   depreciation               provision
    Houses & buildings             46,268,742.05           4,359,595.27               277,744.50           41,631,402.28Mechanical
                              105,591,939.34          65,176,273.05            12,648,794.93           27,826,427.92equipmentTransportation
                                  358,087.84             335,208.75                                       22,879.09facilities(3) No fixed assets leased through financial leasing(4) No fixed assets lend through financial leasing(5) No fixed assets held for sales at the end of the period(6) Fixed assets without ownership certificate
                      Items                                         Reason                                        Time
    1. Houses in Urumuqi for offsetting debt       Applying for2. Houses in Dalian of Fangda Jianke for
                                               Applying foroffsetting debt
    3. Shenyang Fangda extension workshop          Entering into liquidation4. Shenyang Fangda dorm and workshop
                                               Entering into liquidation2#5. Dining hall and power station of
                                               Entering into liquidationShenyang Fangda
    6. Yuehai Office Building C 502                Historical reasons13. Construction in process(1) Construction in progress
                                                                                                                                  In RMB
                                                  Closing amount                                         Opening amount
              Items                Remaining        Impairment                            Remaining       Impairment
                                                                       Book value                                         Book value
                                   book value         provision                           book value       provisionConstruction of Chengdu
                                      44,803.00                              44,803.00       26,715.00                       26,715.00Xinjin Base
                                                                               2014 Interim Report of China Fangda Group Co., Ltd
    Decoration of office building                                                       914,126.00                         914,126.00
    Floor renovation engineering      137,891.92                         137,891.92
    Total                             182,694.92                         182,694.92     940,841.00                         940,841.00(2) No change in major construction in process(3) No impairment provisions for construction in process(4) No progress of major construction in process14. Disposal of fixed assets
                                                                                                                             In RMB
                  Items                  Opening book value              Closing book value            Reason for disposal
    Tools and apparatus                                      3,761.50
    Mechanical equipment                                   144,421.47                     32,625.31 Retirement to be processed
    Other equipment                                         26,285.39
    Transport equipment                                      2,829.75
    Total                                                  177,298.11                     32,625.31                --15. Intangible assets(1) Intangible assets
                                                                                                                             In RMB
                                Opening balance of                                                       Closing balance of book
            Items                                             Increase                  Decrease
                                   book value                                                                       value
    1. Original total book value          127,766,601.18                1,387,101.05                                    129,153,702.23Land using rights of Fangda
    Tech Garden on Gaoxin                  11,064,548.41                                                                 11,064,548.41Road NanchangShenyang Fangda land use
                                       42,038,791.23                                                                 42,038,791.23right
    Dongguan land using right              40,041,465.75                                                                 40,041,465.75
    Patent and classified tech             28,195,043.67                 960,767.82                                      29,155,811.49
    Computer software                       6,426,752.12                 426,333.23                                       6,853,085.352. Total accumulative
                                       30,713,086.89                1,714,855.62                                     32,427,942.51amortization
    Land using rights of Fangda             1,898,812.70                 116,297.62                                       2,015,110.32
                                                               2014 Interim Report of China Fangda Group Co., LtdTech Garden on GaoxinRoad NanchangShenyang Fangda land use
                                  5,108,021.70       420,417.90                                    5,528,439.60right
    Dongguan land using right         2,469,223.86       400,414.68                                    2,869,638.54
    Patent and classified tech       18,107,946.73       431,305.44                                   18,539,252.17
    Computer software                 3,129,081.90       346,419.98                                    3,475,501.883. Total net intangible assets
                                 97,053,514.29       -327,754.57                                  96,725,759.72book valueLand using rights of Fangda
    Tech Garden on Gaoxin             9,165,735.71       -116,297.62                                   9,049,438.09Road NanchangShenyang Fangda land use
                                 36,930,769.53       -420,417.90                                  36,510,351.63right
    Dongguan land using right        37,572,241.89       -400,414.68                                  37,171,827.21
    Patent and classified tech       10,087,096.94       529,462.38                                   10,616,559.32
    Computer software                 3,297,670.22        79,913.25                                    3,377,583.474. Total impairment
                                  5,525,863.77                                                     5,525,863.77provisionLand using rights of FangdaTech Garden on GaoxinRoad NanchangShenyang Fangda land userightDongguan land using right
    Patent and classified tech        5,525,863.77                                                     5,525,863.77Computer softwareTotal book value of
                                 91,527,650.52       -327,754.57                                  91,199,895.95intangible assetsLand using rights of Fangda
    Tech Garden on Gaoxin             9,165,735.71       -116,297.62                                   9,049,438.09Road NanchangShenyang Fangda land use
                                 36,930,769.53       -420,417.90                                  36,510,351.63right
    Dongguan land using right        37,572,241.89       -400,414.68                                  37,171,827.21
    Patent and classified tech        4,561,233.17       529,462.38                                    5,090,695.55
    Computer software                 3,297,670.22        79,913.25                                    3,377,583.47The total amortization amounts to RMB1,714,855.62.
                                                                               2014 Interim Report of China Fangda Group Co., Ltd(2) Development project expenses16. Goodwill
                                                                                                                             In RMB
                                                                                                                      Closing
      Invested entity or item of
                                       Ending balance        Increase           Decrease       Closing balance      impairment
                goodwill
                                                                                                                     provision
    Shenzhen Woke                               8,197,817.29                                           8,197,817.29      8,197,817.29
    Fangda Yide                                   746,519.62                                             746,519.62       746,519.62
    Total                                       8,944,336.91                                           8,944,336.91      8,944,336.91Basis for impairment testing and provision of goodwill1. The Company acquired the 100% control power over Shenzhen Woke Co. by merger of enterprise under
      common control in May 2007. The difference between the initial investment cost and recognizable fair value
      of the investee has formed the goodwill of RMB8,197,817.29. For Shenzhen Woke was not in good business
      operation for successive years, impairment provision has been provided fully upon the goodwill.2. The Company acquired the minority share equities of Fangda Yide Co. in August 2007. The difference
      between the initial investment cost and recognizable fair value of the investee has formed the goodwill of
      RMB746,519.62. For Fangda Yide was not in good business operation for successive years, impairment
      provision has been provided fully upon the goodwill.17. Long-term amortizable expenses
                                                                                                                             In RMB
                                          Increase in this                                                       Reason for other
        Items         Opening amount                         Amortized       Other decrease   Closing amount
                                              period                                                                decreaseFactory
                           3,642,307.84          15,621.55     475,550.24                        3,182,379.15decorationDecoration of
                             94,732.52         660,388.57        98,185.70                         656,935.39office building
    Hoisting fee                 12,000.00                            5,000.00                           7,000.00Software service
                             50,314.43           49,519.66       20,831.94                          79,002.15fee
    Total                      3,799,354.79        725,529.78      599,567.88                        3,925,316.69           --18. Deferred income tax assets and deferred income tax liabilities(1) Deferred income tax assets and liabilities are not presented as net amount after neutralizationRecognized deferred income tax assets and liabilities
                                                                             2014 Interim Report of China Fangda Group Co., Ltd
                                                                                                                          In RMB
                       Items                                Closing amount                           Opening amountDeferred income tax assets:
    Assets impairment provision                                             36,416,345.81                           35,815,369.06
    Deductible loss                                                           5,960,308.62                           2,365,000.74
    Unrealizable gross profit                                                 2,111,217.08                           1,636,018.35
    Reserved expense                                                             645,182.15                               354,228.28
    Reserved wage                                                                                                         459,594.93
    Deferred earning                                                             525,769.59                               535,832.20
    Subtotal                                                                45,658,823.25                           41,166,043.56Deferred income tax liabilities:
    Adjustment of fair value of investment real estate                      40,858,031.32                           40,656,763.97
    Subtotal                                                                40,858,031.32                           40,656,763.97Details of unrecognized deferred income tax assets
                                                                                                                          In RMB
                       Items                                Closing amount                           Opening amount
    Deductible temporary difference                                         58,817,902.52                           58,902,435.47
    Deductible loss                                                         73,293,328.91                           69,150,558.57
    Total                                                                   132,111,231.43                         128,052,994.04Deductible losses of the un-recognized deferred income tax asset will expire in the following years
                                                                                                                          In RMB
           Year                    Closing amount           Opening amount                             Notes
    2014                                         7,652,531.29           7,864,870.78
    2015                                         7,695,652.54           7,695,652.54
    2016                                        22,158,289.57          22,158,289.57
    2017                                        20,241,373.78          20,241,373.78
    2018                                        11,190,371.90          11,190,371.90
    2019                                         4,355,109.83
    Total                                       73,293,328.91          69,150,558.57                         --Details of taxable differences and deductible differences
                                                                                                                          In RMB
                                                                              Temporary difference
                        Items
                                                                  End                           Beginning of the periodDifferences in taxable items
    Adjustment of gain/loss in fair value                                    162,627,055.88                        162,627,055.88
                                                                         2014 Interim Report of China Fangda Group Co., Ltd
    Subtotal                                                                162,627,055.88                        162,627,055.88Deductible different items
    Assets impairment provision                                             221,377,494.39                        216,510,309.81
    Deductible loss                                                          18,141,129.26                          9,460,002.94
    Unrealizable gross profit                                                 8,444,868.32                          6,715,484.36
    Deferred earning                                                          2,213,067.05                          2,261,103.48
    Reserved expense                                                          4,301,214.31                          2,361,521.89
    Reserved wage                                                                                                   3,063,966.18
    Subtotal                                                                254,477,773.33                        240,372,388.6619. Details of assets impairment provision
                                                                                                                      In RMB
                                Opening balance of                               Decrease                  Closing balance of
            Items                                    Increase
                                   book value                          Write-back           Write-off         book value
    1. Bad debt provision               200,581,750.60    5,036,621.98         169,437.40         103,208.00      205,345,727.182. Inventory depreciation
                                      5,307,686.07                                                              5,307,686.07provision7. Fixed assets impairment
                                     15,134,747.93                                            858,900.20       14,275,847.73provision12. Intangible assets
                                      5,525,863.77                                                              5,525,863.77impairment provision13. Goodwill impairment
                                      8,944,336.91                                                              8,944,336.91provision
    Total                               235,494,385.28    5,036,621.98         169,437.40         962,108.20      239,399,461.6620. Other non-current assets
                                                                                                                      In RMB
                        Items                          Closing amount                           Opening amount
    Prepaid house amount                                                 25,478,789.90                             15,978,789.90
    Total                                                                25,478,789.90                             15,978,789.90Notes to other non-current assetsThe increase in other non-current assets in the period is attributable to the amount repaid by the Fangda Jianke toDalian Gaoxing Wanda Plaza Investment Co., Ltd.
                                                                  2014 Interim Report of China Fangda Group Co., Ltd21. Short-term borrowings(1) Classification of short-term borrowings
                                                                                                            In RMB
                       Items                     Closing amount                        Opening amount
    Loan by pledge                                               200,000,000.00                         104,000,000.00
    Guarantee loan                                               525,000,000.00                         265,000,000.00
    Total                                                        725,000,000.00                         369,000,000.00(2) No mature but not repaid short-term borrowing22. Notes payable
                                                                                                            In RMB
                       Type                      Closing amount                        Opening amount
    Commercial acceptance                                          3,401,883.33                           9,356,905.04
    Bank acceptance                                              198,934,919.54                         179,213,945.59
    Total                                                        202,336,802.87                         188,570,850.63Amount due in next fiscal term will be RMB111,082,405.00.23. Account payable(1) Account payable
                                                                                                            In RMB
                       Items                     Closing amount                        Opening amount
    Account repayable and engineering repayable                 306,430,502.00                          366,465,573.67
    Construction payable                                          7,226,852.86                           10,418,557.07
    Payable installation and implementation fees                130,144,359.65                          107,489,398.01
    Others                                                      207,003,992.39                            4,842,611.57
    Total                                                       650,805,706.90                          489,216,140.32
                                                                       2014 Interim Report of China Fangda Group Co., Ltd(2) No account payable to shareholder holding 5% or above shares with voting rights of the Company inthe report period(3) Notes to large accounts payable aged over one year24. Prepayment(1) Prepayment
                                                                                                                     In RMB
                      Items                            Closing amount                          Opening amount
    Engineering payment                                                 140,419,006.04                           163,602,896.86
    Material loan                                                         1,285,976.88                             1,970,928.42
    Others                                                                2,404,728.39                             2,812,426.66
    Total                                                               144,109,711.31                           168,386,251.94(2) No prepayment from shareholders holding 5% or above shares with voting rights of the Company in thereport period
                                                                                                                     In RMB
                      Entity                           Closing amount                          Opening amount(3) Notes to large prepayments aged over one year25. Employees wage payable
                                                                                                                     In RMB
                       Opening balance of                                                            Closing balance of book
         Items                                   Increase                    Decrease
                              book value                                                                     value1. Wage, bonus,
    allowance and                    27,807,395.20      81,072,358.34                    94,086,213.26            14,793,540.28subsidies
    2. Employee welfare                  32,064.56       2,229,934.21                     2,261,998.77                      0.003. Social
                                    136,727.95       6,772,039.91                     6,908,767.86                      0.00insurance
    Medical insurance                    51,062.33       1,679,725.22                     1,730,787.54                      0.00
    Basic pension                        71,030.72       4,408,202.02                     4,479,232.73                      0.00
    Annuity                               2,811.36               0.00                         2,811.36                      0.00Unemployment
                                      6,651.88         343,232.77                      349,884.64                       0.00insurance
                                                                    2014 Interim Report of China Fangda Group Co., LtdLabor injury
                                        3,429.18      236,835.00                   240,264.18                   0.00insurance
    Breeding insurance                      1,742.48      104,044.91                   105,787.39                   0.00
    4. Housing fund                     99,607.50        1,901,004.82                 1,850,273.32            150,339.00
    6. Others                         2,107,056.59        127,271.68                   149,652.13           2,084,676.14Labor union and
    staff education                   2,107,056.59        126,871.68                   149,252.13           2,084,676.14budget
    Total                            30,182,851.80      92,102,608.96              105,256,905.34          17,028,555.42Note: 1. The Company does not own any wage to employees.2. The work union fund and staff education fund amount to RMB2,084,676.14 without non-monetary welfareamount and compensation for termination of employment.3. Wages, bonus, allowance and subsidies will be paid in July.26. Taxes payable
                                                                                                              In RMB
                         Items                            Closing amount                     Opening amount
    VAT                                                                   8,374,385.36                     -1,250,348.83
    Business tax                                                         26,295,439.32                     23,221,596.65
    Enterprise income tax                                                 9,940,013.05                     15,884,641.78
    Personal income tax                                                   1,166,793.33                        902,435.66
    City maintenance and constructio