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方大B(200055)公告正文

方大B:2014年年度报告(英文版)

公告日期:2015-03-27

                      China Fangda Group Co., Ltd. 2014 Annual Report




China Fangda Group Co., Ltd.

     2014 Annual Report




         March 2015




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                                                    China Fangda Group Co., Ltd. 2014 Annual Report




       I. Important Statement, Table of Contents and Definitions


       The members of the Board and the Company guarantee that the

announcement is free from any false information, misleading statement or

material omission and are jointly and severally liable for the informations

truthfulness, accuracy and integrity.

    All the Directors have attended the meeting of the board meeting at which

this report was examined.

    The Board meeting reviewed and approved the profit distribution preplan:

distributing cash dividend of RMB0.3 for each ten shares to all shareholders on

the basis of all shares of the Company on December 31, 2014 and no dividend

share is issued to shareholders. No reserve is capitalized.

    Mr. Xiong Jianming, the Chairman of Board, Mr. Lin Kebin, the Chief

Financial Officer, and Mr. Chen Yonggang, the manager of accounting

department declare: the Financial Report carried in this report is authentic and

completed.




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                                                                              China Fangda Group Co., Ltd. 2014 Annual Report




                                              Table of Contents




I. Important Statement, Table of Contents and Definitions .................................... 2

II. Company Profile ..................................................................................................... 7

III Financial Highlight .............................................................................................. 10

IV Board of Directors Report.................................................................................. 13

V Significant Events .................................................................................................. 37

VI Changes in Share Capital and Shareholders ..................................................... 42

VII Particulars about the Directors, Supervisors, Senior Management and

Employees ................................................................................................................... 48

VIII Corporation Governance ................................................................................. 56

IX Internal Control ................................................................................................... 61

X Financial Statements ............................................................................................. 63

XI Documents for Reference .................................................................................. 171




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                                                                     China Fangda Group Co., Ltd. 2014 Annual Report




                                              Definitions


                                     Refers
                     Terms                                                   Description
                                       to

                                     Refers
Fangda Group, company, the Company            China Fangda Group Co., Ltd.
                                       to

                                     Refers
Articles of Association                       Articles of Association of China Fangda Group Co., Ltd.
                                       to

                                     Refers
Meeting of shareholders                       Meetings of shareholders of China Fangda Group Co., Ltd.
                                       to

                                     Refers
Board of Directors                            Board of Directors of China Fangda Group Co., Ltd.
                                       to

                                     Refers
Supervisory Committee                         Supervisory Committee of China Fangda Group Co., Ltd.
                                       to

                                     Refers
Banglin Co.                                   Shenzhen Banglin Technologies Development Co., Ltd.
                                       to

                                     Refers
Shilihe Co.                                   Shenzhen Shilihe Investment Co., Ltd.
                                       to

                                     Refers
Shengjiu Co.                                  Shengjiu Investment Ltd.
                                       to

                                     Refers Formerly Shenzhen Fangda Decoration Engineering Co., Ltd., now
Fangda Jianke, Fangda Decoration
                                       to     known as Shenzhen Fangda Jianke Group Co., Ltd.

                                     Refers
Fangda Automatic                              Shenzhen Fangda Automation System Co., Ltd.
                                       to

                                     Refers
Fangda New Material                           Fangda New Materials (Jiangxi) Co., Ltd.
                                       to

                                     Refers
Fangda New Resource                           Shenzhen Fangda New Energy Co., Ltd.
                                       to

                                     Refers
Fang SOZN                                     Guangdong Fangda SOZN Lighting Co., Ltd.
                                       to

                                     Refers
Shenyang Fangda                               Shenyang Fangda Semi-conductor Lighting Co., Ltd.
                                       to

                                     Refers
Shenzhen Woke                                 Shenzhen Woke Semi-conductor Lighting Co., Ltd.
                                       to

Hong Kong Junjia                     Refers Hong Kong Junjia Group Co., Ltd.



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                                                                China Fangda Group Co., Ltd. 2014 Annual Report


                                  to

                                Refers
Fangda Aluminium                         Jiangxi Fangda New Type Aluminum Co., Ltd.
                                  to

                                Refers
Fangda Yide Co.                          Shenzhen Fangda Yide New Material Co., Ltd.
                                  to

                                Refers
Dongguan Fangda New Material             Dongguan Fangda New Material Co., Ltd.
                                  to

                                Refers
Kexunda Co.                              Shenzhen Kexunda Software Co., Ltd.
                                  to

                                Refers
Fangda Property                          Shenzhen Fangda Property Development Co., Ltd.
                                  to

                                Refers Formerly Chengdu Fangda New Material Co., Ltd., now known as
Chengdu Fangda New Material
                                  to     Chengdu Fangda Construction Technology Co., Ltd.

                                Refers
Shenyang Decoration                      Fangda Decoration Engineering (Shenyang) Co., Ltd.
                                  to

                                Refers
CSRC                                     China Securities Regulatory Commission
                                  to

                                Refers
SZSE                                     Shenzhen Stock Exchange
                                  to

                                Refers
Sponsor, Zhongshan Securities            Zhongshan Securities Co., Ltd.
                                  to




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                                                China Fangda Group Co., Ltd. 2014 Annual Report




                          Major Risk Statement

    The Company has specified market, management and production and

operation risks in this report. Please review the potential risks and measures

mentioned in the discussion and analysis of future development in IV. Board of

Directors Report.




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                                                                                   China Fangda Group Co., Ltd. 2014 Annual Report




                                               II. Company Profile

1. Company profiles

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            Fangda Group

English name (if any)           CHINA FANGDA GROUP CO., LTD.

English abbreviation (if any)   CFGC

Legal representative            Xiong Jianming

Registered address              Fangda Building, Kejinan 12th Avenue, High-tech Zone, Shenzhen, PR China.

Zip code                        518057

Office address                  20F, Fangda Building, Kejinan 12th Avenue, High-tech Zone, Shenzhen, PR China.

Zip code                        518057

Website                         http://www.fangda.com

Email                           fd@fangda.com


2. Contacts and liaisons

                                                     Secretary of the Board                   Representative of Stock Affairs

Name                                       Zhou Zhigang                                 Guo Linchen

                                           20F, Fangda Building, Kejinan 12th           20F, Fangda Building, Kejinan 12th
Address
                                           Avenue, Hi-Tech Zone, Shenzhen               Avenue, Hi-Tech Zone, Shenzhen

Tel.                                       86(755) 26788571 ext. 6622                   86(755) 26788571 ext. 6622

Fax                                        86(755)26788353                              86(755)26788353

Email                                      zqb@fangda.com                               zqb@fangda.com


3. Information disclosure and inquiring

Information disclosure and inquiring Press medias China Securities Journal, Security Times, Shanghai Securities Daily, Hong
of information disclosure                               Kong Commercial Daily

Website assigned by CSRC to release the online
                                                        http://www.cninfo.com.cn
reports




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                                                                                       China Fangda Group Co., Ltd. 2014 Annual Report


Place for information inquiry                               Secretarial Office of the Board


4. Registration changes

                                                                         Business license       Tax registration
                         Registration date      Registration place                                                   Organization code
                                                                              number                number

                                               Shenzhen Bureau of
                                               Industry &
First registration     December 13, 1995                               440301501124785        440301192448589       19244858-9
                                               Commerce
                                               Administration

                                               Market Supervision
Registration at the
                                               Administration of
end of the reporting June 20, 2013                                     440301501124785        440301192448589       19244858-9
                                               Shenzhen
period
                                               Municipality

Changes in main businesses since the
                                               None
listing of the Company

                                               In 1996, the Company listed it’s A and B shares and the controlling shareholder is
                                               Shenzhen Fangda Group Co., Ltd. On August 25, 2000, the controlling shareholder
Changes in the controlling shareholders (if changed its name into Shenzhen Fangda Economic Development Co., Ltd. On July 5,
any)                                           2002, the controlling shareholder changed into Shenzhen Banglin Technologies
                                               Development Co., Ltd.      By the end of this reporting period, the controlling
                                               shareholder remains the Shenzhen Banglin Technologies Development Co., Ltd..


5. Other information

Public accountants employed by the Company

Public accountants                   Grant Thornton (special general partner)

Address                              5th Floor, Scitech Place, 22 Jianguomen Wai Avenue, Chaoyang District, Beijing, China

Signing accountant names             Lin Kaiqin and Li Chunmei

Sponsor engaged by the Company to perform continued supervision and guide during the reporting period
√ Applicable □ Inapplicable

          Sponsor name                       Office address               Representatives           Period of supervision and guide

                                                                                               The period started on July 15, 2010 and
                                                                                               ended on November 7, 2012. The
                                                                                               sponsor has submitted the sponsor report
                                 29th Floor, New World Center,
                                                                                               to CSRC. Given that the fund raised
Zhongshan Securities Co., Ltd. 6009 Yitian Road, Futian                He Lihui, Cui Lei
                                                                                               from non-public issue of the Company in
                                 District, Shenzhen
                                                                                               2010 has not been fully used, the sponsor
                                                                                               will continue to perform supervision and
                                                                                               guide for the use of the fund.

Financial advisor engaged by the Company to perform continued supervision and guide during the reporting period

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                                China Fangda Group Co., Ltd. 2014 Annual Report


□ Applicable √ Inapplicable




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                                                                                      China Fangda Group Co., Ltd. 2014 Annual Report




                                             III Financial Highlight

1. Financial Highlight

The Company retroactively adjusts or restates financial statistics of the previous years because of changes in
account policies and correction of accounting errors.
□ Yes √ No
                                             2014                     2013                 Increase/decrease               2012

Turnover (yuan)                           1,938,324,435.51         1,747,620,845.74                      10.91%         1,397,901,424.59

Net profit attributable to
shareholders of the listed company           96,998,429.76            85,676,863.78                      13.21%            24,948,377.20
(yuan)

Net profit attributable to the
shareholders of the listed company
                                             69,068,577.10            68,393,391.56                       0.99%             7,361,274.38
and after deducting of
non-recurring gain/loss (RMB)

Net cash flow generated by
                                           -557,893,929.44           156,544,620.31                   -456.38%             59,262,071.37
business operation (RMB)

Basic earnings per share
                                                       0.13                      0.11                    18.18%                      0.03
(yuan/share)

Diluted Earnings per share
                                                       0.13                      0.11                    18.18%                      0.03
(yuan/share)

Weighted average net income/asset
                                                     8.14%                     7.61%                      0.53%                    2.30%
ratio

                                         End of 2014               End of 2013             Increase/decrease           End of 2012

Total asset (RMB)                         3,662,719,900.41         2,599,557,542.57                      40.90%         2,327,802,889.51

Net profit attributable to the
shareholders of the listed company        1,234,930,863.46         1,160,639,730.85                       6.40%         1,098,612,195.57
(RMB)


2. Differences in accounting data under domestic and foreign accounting standards

1. Differences in net profits and assets in financial statements disclosed according to the international and
Chinese account standards

√ Applicable □ Inapplicable
                                                                                                                                   In RMB

                                 Net profit attributable to the shareholders of the     Net profit attributable to the shareholders of the


                                                                                                                                         10
                                                                                      China Fangda Group Co., Ltd. 2014 Annual Report


                                                      listed company                                     listed company

                                        This period               Last period                 Closing amount       Opening amount

On Chinese accounting
                                           96,998,429.76                85,676,863.78           1,234,930,863.46      1,160,639,730.85
standards

Items and amounts adjusted according International Accounting Standards

On international accounting
                                           96,998,429.76                85,676,863.78           1,239,694,261.70      1,165,403,129.09
standards


2. Differences in net profits and assets in financial statements disclosed according to the overseas and
Chinese account standards

□ Applicable √ Inapplicable
2. There is no difference in net profits and assets in financial statements disclosed according to the international
and Chinese account standards during the report period.

3. Explanation of the differences in accounting data under domestic and foreign accounting standards

√ Applicable □ Inapplicable
Net assets attributable to the listed company’s shareholders calculated according to the IAS is RMB4,763,398.24
higher than that calculated according to the domestic accounting standards, mainly attributable to the
capitalization of borrow expenses before the domestic Enterprise Accounting Standard was implemented on
January 1, 2007.

3. Accidental gain/loss item and amount

√ Applicable □ Inapplicable
                                                                                                                                  In RMB
                     Items                               2014                2013                    2012                 Notes

Non-current asset disposal gain/loss
(including the write-off part for which assets             -24,398.43           -462,554.08           260,038.90
impairment provision is made)

Subsidies accounted into the current income
account (except the government subsidy
closely related to the enterprise’s business           2,340,175.75         1,815,855.07           6,275,756.00
and based on unified national standard
quota)

Capital using expense charged to
non-financial enterprises and accounted into            3,649,313.12         2,149,420.09           1,180,032.08
the current income account

Gain from entrusted investment or assets
                                                        2,144,844.80            306,301.37
management



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                                                                          China Fangda Group Co., Ltd. 2014 Annual Report


Gain/loss from change of fair value of
transactional financial asset and liabilities,
and investment gains from disposal of
transactional financial assets and liabilities    -2,852,885.00                       3,448,207.99
and sellable financial assets, other than valid
period value instruments related to the
Company’s common businesses

Gain/loss from change of fair value of
investment property measured at fair value        34,897,632.10   16,647,859.74     12,290,834.22
in follow-up measurement

Other non-business income and expenditures
                                                  -3,671,724.03    1,929,934.59        917,890.35
other than the above

Less: Influenced amount of income tax              9,526,862.57    5,177,842.87       5,353,185.48

        Influenced amount of minority
                                                    -973,756.92      -74,498.31       1,432,471.24
shareholders’ equity (after-tax)

Total                                             27,929,852.66   17,283,472.22     17,587,102.82           --

Explanation statement should be made for accidental gain/loss items defined and accidental gain/loss items
defined as regular gain/loss items according to the Explanation Announcement of Information Disclosure No. 1 -
Non-recurring gain/loss mentioned.
□ Applicable √ Inapplicable
No accidental gain/loss defined as recurrent gain/loss as defined in Explanation Announcement of Information
Disclosure No. 2




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                                                                      China Fangda Group Co., Ltd. 2014 Annual Report




                                 IV Board of Directors Report

1. Summary

     In 2014, the growth of the Chinese economy continued slowing down, subdued by weak government
investment in fixed assets. Economic risks resurfaced, creating numerous difficulties for enterprises. To survive
the weak economy and increasingly fierce competition, the Company has continued improving the brand equity,
expertise and services, stabilizing the growth. In the report period, the Company recorded a sales income of
RMB1,938,324,400, up 10.91% year on year. The net profit attributed to owners of the parent reached
RMB96,998,400, up 13.21% year on year. The revenue from main businesses continued growing. In 2014, the
Company had secured new orders worth RMB2.816 billion with undelivered orders worth RMB3.268 billion,
which 172.04%, paving the way for the Company to complete the sales target for 2015. While developing existing
businesses, the Company has increased investment in new energy sector in the report period and focused on solar
power plants and LED lights as a development area.
     1、 Curtain wall and material industry development trend
     Currently, the curtain wall system and material sector remains the Company’s main source of sales revenue
and profit. The Company has further consolidated its brand advantages and visibility, making remarkable progress
in key sales regions. In the report period, the Company has won bids in a series of notable energy-saving and
green curtain wall and material projects. The curtain wall system used in Shenyu Shangcheng South project,
China Energy Storage Building, and Chongqing Tianhe Global Center is 300m high. The Company has sought to
expand the business size, improve field management, optimize design and engineering solutions, elevate
production and engineering efficiency, lower costs, consolidate profitability to boost the Company’s long-term
development.
    The Company has adhered to the business philosophy of integrity, trust, cooperation and continuous
improvement and seeks to meet customers’ needs thanks to our customer-centered value, strong innovation and
high engineering quality, receiving wide recognition among customers. The Company won the title of
Outstanding Supplier in the report period.
     2. New energy business
     The Company established a new energy company to develop solar PV applications, PV construction and
LED industry. In the report period, the Company has entered into solar energy power plant construction
agreements of 900MWp in Jiangxi Pingxiang, Xinjian and Longnan and obtained government approval for solar
energy power plant construction of 100MWp. On December 23, 2014, the Board of Directors approved the
proposal of private A-share issuing. No more than 105 million shares (inclusive) will be issued to raise no more
than RMB1.008 billion. The fund will be used to support construction solar power plants and repay bank loans.
The private share issuing is now undergoing. Solar power generation business is a strategic business of the
Company and coincides with the national policy. The business enjoys a bright development lookout and will fuel
the Company’s long-term development.
     In the report period, the Company acquired Fangda SOZN, which is specialized in LED lights. After the
acquisition, management teams are established to explore traditional channels and first- and second-tier markets in
China. The innovative direct sales mode is introduced and is high received among local customers and consumers.
Four modern production bases with new and outstanding equipment are set up, including more than 20 automatic


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                                                                       China Fangda Group Co., Ltd. 2014 Annual Report


assembly lines and intelligent R&D and production devices. Fangda SOZN can produce more than 10 million
LED bulbs now with more than 100 patented technologies, more than 10,000 sales networks. The Company
continued to promote the online and office sales mode in order or tap on the advantages of e-business and
traditional sales channels, making Fangda SOZN the domestic leading LED bulb producer.
     3. Metro screen door business
      In the report period, several screen door orders entered design, production and engineering stage. Screen
doors for Shenzhen metro phase III line No.9 and 11, Xi’an metro line No.3, Wuhan metro phase II line No.4,
Nanchang metro line No.1, Fuzhou metro line No.1, Wuhan-Xiaogan railway, Singapore Dashi extension line
have been designed, produced and installed as scheduled. The screen door business's sales revenue increased
64.55% from the last year. During the report period, thanks to high reliability and stability, the Company’s
screen door systems made the record the zero failure in the one-million attempt service life test of the Singapore
Tuas expansion line and Nanchang No.1 line. The two projects have completed the one-million attempt service
life test and acceptance procedure and have been put into massive product.
     The metro screen door maintenance business is high added-value service sector. As many screen doors enter
the maintenance cycle, the business enjoys a bright outlook. The Company has a natural advantage in this
high-end service industry. Our screen door system are independently developed by us, thus enabling us to provide
prompt, overall, effective and standard maintenance services for our customers without other third parties. In the
report period, the Company received maintenance orders in Tianjin, Nanjing and Shenzhen, showing the
Company’s leadership in the sector. The business will expand the Company’s rail transport industry line.
     4. Fangda Town renovation
     In the report period, Fangda Town renovation project has obtained construction permits. Since
commencement in 2014, various works have been performed as scheduled. The sales will start in the 4th quarter in
2015. To reach the sales target, the Company has launched promotion, business introduction, media development
and advertising in the report period.
     5. Introducing talents and build the corporate culture
     As orders increase rapidly over the past few year and five industry bases are put into operation, the Company
has further improved the management matrix, optimize the business process, aggressively introduced high-quality
and diligent management and technical professional to build a modern management led by engineers, technicians,
comprehensive management executives and technical sales representatives. The Company attaches great
importance to corporate culture and construction of a harmonious working environment. Various activities such as
health care lectures, speech competition, sports competitions are held for the staff, including birthday parties and
speed dating for single employees to refresh employees and get them ready for elevating the Company’s core
competitiveness.
     6. Awards
     In the report period, Fangda is selected by the national industry and commerce administration as a Chinese
well-known trademark and the Company is selected as one of the most promising listing company by Sina.
Fangda also won the title a Shenzhen well-known brand for 12 consecutive years.
     Thanks to outstanding quality and brand equity, the Company has won a series of remarkable titles including
the 1994-2014 outstanding enterprise for sustained development, National Construction Engineering Award,
High-quality Construction Award, Guangdong Engineering Golden Award, Guangdong Construction Engineering
Quality Award, Shenzhen Golden Bull Engineering Award, National Construction Decoration Award, anmd QCC
silver and outstanding performance awards. Mr. Wei Yuexing, general manager of Fangda Jianke is given the title
as one of the Shenzhen 100 industry leaders in the curtain wall industry.

                                                                                                                   14
                                                                       China Fangda Group Co., Ltd. 2014 Annual Report


     Fangda Automatic is given titles as the Xi’an metro construction outstanding supplier, advanced equipment
supplier, outstanding maintenance provider, Nanjing metro construction outstanding supplier, Dongguan railway
line R2 outstanding supplier, Wuhan metro line No.4 phase II outstanding supplier.
     Jiangxi New Material was given the title as an outstanding company in the Nanchang Hi-tech Park, class-A
taxpayer.

2. Main business analysis

1. Summary

Implementation progress of development strategies and operating plans disclosed previously in the report period
      In 2014, the growth of the Chinese economy continued slowing down, subdued by weak government
investment in fixed assets. Economic risks resurfaced, creating numerous difficulties for enterprises. To survive
the weak economy and increasingly fierce competition, the Company has continued improving the brand equity,
expertise and services, stabilizing the growth. In the report period, the Company recorded a sales income of
RMB1,938,324,400, up 10.91% year on year. The net profit attributed to owners of the parent reached
RMB96,998,400, up 13.21% year on year. The revenue from main businesses continued growing. In 2014, the
Company had secured new orders worth RMB2.816 billion with undelivered orders worth RMB3.268 billion,
which 172.04%, paving the way for the Company to complete the sales target for 2015. While developing existing
businesses, the Company has increased investment in new energy sector in the report period and focused on solar
power plants and LED lights as a development area.


The actual operating performance is over 20% lower or higher than the annual forecast result disclosed earlier.
□ Applicable √ Inapplicable
Change in the main business mode
□ Applicable √ Inapplicable

2. Revenue

The physical sales revenue is high the labor service revenue
√ Yes □ No
      Industry                 Items         Unit               2014                2013           YOY change (% )

                      Sales            M2                       2,479,915.61        2,472,558.74              0.30%
Curtain wall system
                      Output           M2                       2,593,192.46        2,403,890.85              7.87%
and materials
                      Inventory        M2                         220,123.14           106,846.3            106.02%

Explanation for a year-on-year change of over 30%
□ Applicable √ Inapplicable
Major orders on hand
√ Applicable □ Inapplicable
In the report period, the Company received orders worth RMB2.816 billion, of which 22.43% has realized output
value. By December 31, 2014, the order reserve amounted to RMB3.268 billion. All the orders have been fulfilled
as contracted.

                                                                                                                     15
                                                                                  China Fangda Group Co., Ltd. 2014 Annual Report


Major changes or adjustment of products or services in the report period
√ Applicable □ Inapplicable
Fang SOZN was acquired in the repot period to add LED bulb into the Company’s product scope, creating a new
profit growth point.
Main customers
Total sales amount to top 5 customers (RMB)                                                                          379,625,604.60

Proportion of sales to top 5 customers in the annual sales                                                                  19.59%

Information of the Company's top 5 customers
□ Applicable √ Inapplicable
Other information about main customers
□ Applicable √ Inapplicable

3. Costs

Industry
                                                                                                                            In RMB

                                                       2014                                2013
     Industry              Items                              Proportion in                       Proportion in    YOY change (% )
                                           Amount                                Amount
                                                             operating costs                    operating costs

Metal production Raw materials           929,436,079.36              67.40%    874,994,717.90            65.38%              6.22%

Metal production Labor                    94,243,308.97                6.83%    76,722,963.79              5.73%            22.84%

                   Installation and
Metal production                         299,337,209.27              21.71%    327,693,011.67            24.48%             -8.65%
                   onsite expenses

Metal production Others                   55,895,771.82                4.05%    59,002,837.42              4.41%            -5.27%

Metal production Total                 1,378,912,369.42             100.00% 1,338,413,530.78            100.00%              3.03%

Product
                                                                                                                            In RMB

                                                       2014                                2013
     Product               Items                              Proportion in                       Proportion in    YOY change (% )
                                           Amount                                Amount
                                                             operating costs                    operating costs

Curtain wall
system and         Raw materials         929,436,079.36              67.40%    874,994,717.90            65.38%              6.22%
materials

Curtain wall
system and         Labor                  94,243,308.97                6.83%    76,722,963.79              5.73%            22.84%
materials

Curtain wall
                   Installation and
system and                               299,337,209.27              21.71%    327,693,011.67            24.48%             -8.65%
                   onsite expenses
materials


                                                                                                                                 16
                                                                               China Fangda Group Co., Ltd. 2014 Annual Report


Curtain wall
system and             Others            55,895,771.82              4.05%    59,002,837.42           4.41%            -5.27%
materials

Curtain wall
system and             Total          1,378,912,369.42            100.00% 1,338,413,530.78         100.00%             3.03%
materials



Main suppliers
Purchase amount of top 5 suppliers (RMB)                                                                      431,310,596.92

Proportion of purchase amount of top 5 suppliers in the
                                                                                                                     26.44%
total annual purchase amount

Information of the Company’s top 5 suppliers
□ Applicable √ Inapplicable
Other information about main suppliers
□ Applicable √ Inapplicable

4. Expenses

None

5. R&D expenses

     In the report period, Fangda Group has developed a series of new products and technology in low-carbon,
energy saving, environmental protection fields, including energy-saving and green curtain wall, solar power
curtain wall, aluminium-plastic composite panel, single-layer aluminium panel, honeycomb aluminum panel,
metro screen door system, LED lights, PV power plants. All the R&D projects have been reviewed and approved
by the Group’s technology committee. The products and technologies have independent intellectual property
rights and patents, which will give a strong booth to the Company’s long-term growth.
  In the report period, the R&D expense totaled RMB86,772,900, accounting 4.48% of the operating revenue in
2014. It accounts for 7.02% of the interest attributed to owners of the parent on December 31, 2014

5. Cash flow

                                                                                                                       In RMB

               Items                          2014                           2013                    YOY change (% )

Sub-total of cash inflow from
                                               1,684,047,696.92                1,806,435,338.47                       -6.78%
business operations

Sub-total of cash outflow from
                                               2,241,941,626.36                1,649,890,718.16                      35.88%
business operations

Cash flow generated by
                                                -557,893,929.44                 156,544,620.31                     -456.38%
business operations, net


                                                                                                                           17
                                                                                  China Fangda Group Co., Ltd. 2014 Annual Report


Sub-total of cash inflow
                                                  302,123,140.16                   120,915,060.37                         149.86%
generated from investment

Subtotal of cash outflows                         588,172,728.21                   172,570,887.63                         240.83%

Cash flow generated by
                                                  -286,049,588.05                   -51,655,827.26                        453.76%
investment activities, net

Subtotal of cash inflow from
                                                 1,303,817,100.01                  529,000,000.00                         146.47%
financing activities

Subtotal of cash outflow from
                                                  642,732,507.84                   588,354,192.64                            9.24%
financing activities

Net cash flow generated by
                                                  661,084,592.17                    -59,354,192.64                      -1,213.80%
financing activities

Net increase in cash and cash
                                                  -182,599,023.19                   45,069,882.52                        -505.15%
equivalents

Explanation for a year-on-year change of over 30%
Explanation of major difference between the cash flow generated by operating activities and the net profit in the
year.

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         margin

Industry

Metal production 1,643,589,644.97 1,378,912,369.42                  16.10%             2.71%               3.03%            -0.26%

Product

Curtain wall
system and             1,643,589,644.97 1,378,912,369.42            16.10%             2.71%               3.03%            -0.26%
materials

District

Domestic               1,856,320,639.39 1,546,696,308.96            16.68%            11.62%              11.23%             0.29%

Overseas                 40,212,936.07     26,435,336.21            34.26%            16.27%              18.74%            -1.37%

Main business statistics adjusted in the recent one year with the statistics criteria adjusted in the report period
□ Applicable √ Inapplicable

IV. Assets and Liabilities

1. Major changes in assets

                                                                                                                            In RMB

                                                                                                                                     18
                                                                                          China Fangda Group Co., Ltd. 2014 Annual Report


                           End of 2014                        End of 2013

                                     Proportion in                      Proportion in      Change                     Notes
                      Amount                             Amount
                                      total assets                        total assets

                    212,430,798.8
Monetary capital                            5.80% 333,876,921.97               12.84%        -7.04%
                                 7

Account             1,105,242,251.
                                           30.18% 898,780,981.93               34.57%        -4.39%
receivable                     46

                                                                                                      The inventory book value balance
                                                                                                      at the end of the period increased
                    982,441,187.0                                                                     128.03% from the beginning. It is
Inventory                                  26.82% 428,537,851.82               16.49%        10.33%
                                 5                                                                    because that the development cost of
                                                                                                      Fangda Town renovation project
                                                                                                      increased.

Investment real     226,279,523.3
                                            6.18% 195,249,069.13                7.51%        -1.33%
estate                           9

Long-term share
                    11,048,660.43           0.30%       9,994,565.55            0.38%        -0.08%
equity investment

                    489,714,684.6
Fixed assets                               13.37% 462,930,269.98               17.81%        -4.44%
                                 3

Construction in
                       341,749.17           0.01%         940,841.00            0.04%        -0.03%
process


2. Major changes in liabilities

                                                                                                                                     In RMB

                               2014                                2013

                                         Proportio                         Proportion
                                                                                          Change                     Notes
                        Amount           n in total       Amount             in total
                                           assets                             assets

Short-term loans     1,100,000,000.00      30.03%       369,000,000.00         14.19%      15.84% Additional bank borrowing


3. Assets and liabilities measured at fair value

                                                                                                                                     In RMB

                                                      Accumulative
                                     Gain/loss        changes in fair
                                                                          Impairment          Amount
                    Opening          caused by            value                                            Amount sold in       Closing
     Items                                                              provided in the     purchased in
                     amount      changes in fair accounting into                                              the period        amount
                                                                             period          the period
                                       value           the income
                                                         account



                                                                                                                                           19
                                                                     China Fangda Group Co., Ltd. 2014 Annual Report


Financial assets

1. Financial
assets
measured at
fair value with
variations
accounted into
                            0.00   -2,852,885.00                        16,263,675.00                13,410,790.00
current income
account
(excluding
derivative
financial
assets)

Investment real
                   174,778,756.62 34,897,632.10    91,831.63                                        198,513,586.15
estate

Total              174,778,756.62 32,044,747.10    91,831.63            16,263,675.00               211,924,376.15

Financial
                            0.00                                                                              0.00
liabilities

Major changes in the assets measurement property of the Company in the report period
□ Yes √ No

4. Main overseas capital

□ Applicable √ Inapplicable

5 Core Competitiveness Analysis

(1) Curtain wall system and material
        1. Expertise and brand competitiveness
     In response to the national call for energy saving and emission reduction, the Company has aggressively
develop solar electric and optimal and energy-saving curtain walls, developing a series of domestic and global
leading solar and energy-saving curtain wall products. The Company owns 372 curtain wall and material patents
(including 23 invention patents) and one software copyright, ranking top among domestic peers. It has achieved
many firsts in the industry and created incomparable brand equity, making it an optimal choice in the domestic
high-end curtain wall and material market. 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 wall
market and technical integration to improve high-end project quality. Moreover, it has focused resources on
high-end curtain wall engineering and won several Luban awards, Zhan Tianyou Civil Engineering awards and
Classic Construction for the 50th Anniversary of the Foundation of the People’s Republic of China, High-Quality
Construction, White Magnolia Prize and Customer Satisfactory Engineering and the title of “Top 10 Competitive
Chinese Curtain Wall Provider”. The Company has build a leading brand and created a clear edge in the


                                                                                                                 20
                                                                        China Fangda Group Co., Ltd. 2014 Annual Report


high-end curtain wall market.
     3. Well-developed industry base landscape
     Thanks to continued investment in facilities, the Company has established a national business landscape with
Shenzhen as the headquarters, Dongguan Songshanhu as the base in the south, Beijing in the north, Chengdu in
the southwest and Shanghai and Nanchang in the east. The Dongguan Songshanhu and Nanchang bases are the
largest and most advanced curtain wall system and material production bases in China and across the world,
fueling the Company to increase its market share and competitiveness.
     4. General supply advantage
    The Company’s main business is design, production and engineering of curtain wall projects. The Company
has expanded into the entire industry chain. It improves the overall supply capability, reduces raw material cost;
and improves the engineering efficiency and engineering quality.
    (2) New energy industry
     In the report period, the Company set up the Shenzhen Fangda New Energy Co., Ltd. to develop solar energy
PV applications, PV construction and LED industry. The move will extend the Company’s energy-saving and
environment protection business, coincide with the national plan and industry policies as well as the development
trend of the industry.
     1. Technical advantage
     With more than ten years’ experience in developing solar energy PV power generating curtain wall
technology, 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 PV
curtain wall technology. The Company built the first solar energy PV integrated building curtain wall system in
China – Shenzhen Fangda Building photoelectric curtain wall system.
     2. Relation with other industries
     Distributed solar PV industry is highly related to the Company’s business. It is closely related to construction.
Moreover, the Company has more than 10 years' experience in electrical product integration. The Company also
has more than 20 years’ experience in construction management and has the level-1 construction curtain wall
engineering qualification and electrical installation engineering qualification.
     3. Strategic advantage
    The Company is engaged in the upper, middle and downstream of the LED industry and is familiar with
industry policies in China. Currently, the Company is acquiring LED companies to realize fast expansion in the
LED business and seek to create a new profit source for the Company.
    (3) Rail transport equipment business
     1. Technical advantage
     Through continued independent innovation, the Company has developed the global leading metro screen
door system with full intellectual property right and broken the monopoly of overseas competitors. The
Company has also compiled the Rail Transport Station Screen Door Standard, which is the first of its kind in
China. The standard was approved in April 2006 and was implemented on March 1, 2007. As the first standard
in the industry in China, the standard has played a key role in guiding the development of China’s rail transport
screen door industry and enabled the Company a dominant lead in the industry. Currently, the Company has 218
metro screen door patents, including 40 invention patents. The Company also has seven computer software
copyrights.
     2. Brand equity


                                                                                                                     21
                                                                                           China Fangda Group Co., Ltd. 2014 Annual Report


     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. It The Fangda screen door system has grasped a leading market share and established
incomparable brand influence thanks to its patents, standard and maintenance services. The Company has
emerged as the Chinese No.1 and global No.3 screen door provider, building a large competitive edge in the
global market.
        (4) Real Estate
     The Fangda Town renovation project is well-positioned and enjoys express transport, unique landscape
resources, preferential policies and moderate competition in the district. In additional industry buildings for
domestic use, the project comprises about 100,000 m2 of industry buildings for sales, 20,000 m2 of business
property and 70,000 m2 of industry buildings for lease. The project will be put into pre-sales in Q4 2015 and
sold out in 2017. The project will buoy the Company’s net assets and total assets, bring strong cash flows for the
Company, provide capital support for the development of businesses, and gain experience in the real-estate
development industry.

VI. Investment

1. External equity investment

(1) External investment: None

(2) Financial enterprise share held: None

(3) Securities investment


                                                  Number
                                                                           Number
                                                  of shares
                                                                           of shares                Closing
                                     Initial       held at       Opening                Closing
                        Abbreviat                                           held at                   book      Gain/loss Accounti
Securities    Code                  investmen beginning sharehold                       sharehold                                       Source
                              ion                                          end of the                value      (RMB)       ng item
                                      t cost       of the          ing                     ing
                                                                            period                   (RMB)
                                                   period
                                                                            (share)
                                                   (share)

                        Sino Oil                                                                                           Transacti
                        and Gas     16,263,67                              100,000,0                13,410,79 -2,852,88 onal
Stock        00702                                           0     0.00%                   0.56%                                       Purchase
                        Holdings           5.00                                   00                     0.00       5.00 financial
                        Ltd                                                                                                assets

                                    16,263,67                              100,000,0                13,410,79 -2,852,88
Total                                                        0     --                      --                                  --         --
                                           5.00                                   00                     0.00       5.00

Disclosure date of approval by
the Board of Directors of           March 11, 2014
securities investment

Disclosure date of securities
                                    None
investment approval by the


                                                                                                                                                 22
                                                                                          China Fangda Group Co., Ltd. 2014 Annual Report


Shareholders’ Meeting (if any)


(4) Shareholding in other listed companies: None

2. Trust wealth management, investment in derivatives and entrustment loan

(1) Wealth management

                                                                                                                                In RMB10,000
                                                                                                                                         Actual
                                                                                                              Impairme
                            Related                                                    Earning    Principal                             gain/loss
              Relations                  Type of                                                                 nt          Estimate
    Trustee                transactio                 Amount Start date End date recognitio recovered                                    in the
                 hip                     product                                                              provision       return
                                n                                                     n method actually                                  report
                                                                                                              (if any)
                                                                                                                                         period

                                                                                      Estimated
                                        Break-eve
Bank of       Non-affili                                         July 4,    August    annual
                           No           n, fixed         2,000                                        2,000              0       8.54        8.54
China         ated party                                         2014       11, 2014 yield
                                        earning
                                                                                      4.1%

CMB                                     Not
                                                                                      Estimated
Shenzhen                                earning-pr
              Non-affili                                         July 9,    Septembe annual
Nanshan                    No           otected          4,000                                        4,000              0      33.75      33.75
              ated party                                         2014       r 3, 2014 yield
Sub-branc                               floating
                                                                                      5.5%
h                                       earning

CMB                                     Not
                                                                                      Estimated
Shenzhen                                earning-pr
              Non-affili                                         July 10,   August    annual
Nanshan                    No           otected          4,000                                        4,000              0      20.71      20.71
              ated party                                         2014       14, 2014 yield
Sub-branc                               floating
                                                                                      5.4%
h                                       earning

CMB                                     Not
                                                                                      Estimated
Shenzhen                                earning-pr
              Non-affili                                         October    October   annual
Nanshan                    No           otected          3,000                                        3,000              0       0.59        0.59
              ated party                                         17, 2014 20, 2014 yield
Sub-branc                               floating
                                                                                      2.4%
h                                       earning

CMB
                                                                                      Estimated
Shenzhen                                Break-eve
              Non-affili                                         October    October   annual
Nanshan                    No           n, floating      6,695                                        6,695              0       1.32        1.32
              ated party                                         17, 2014 20, 2014 yield
Sub-branc                               earning
                                                                                      2.4%
h

CMB                                     Not                                           Estimated
Shenzhen Non-affili                     earning-pr               October    October   annual
                           No                            4,695                                        4,695              0       3.09        3.09
Nanshan ated party                      otected                  21, 2014 31, 2014 yield
Sub-branc                               floating                                      2.4%


                                                                                                                                                  23
                                                                              China Fangda Group Co., Ltd. 2014 Annual Report


h                             earning

                                                                          Estimated
Bank of     Non-affili        Earning-p             December January 4, annual
                         No                 3,000                                                     0      0.92
China       ated party        rotected              31, 2014 2015         yield
                                                                          2.8%

CMB                           Not
                                                                          Estimated
Shenzhen                      earning-pr
            Non-affili                              October   October     annual
Nanshan                  No   otected         10                                           10         0      0.01      0.01
            ated party                              10, 2014 17, 2014 yield
Sub-branc                     floating
                                                                          5.21%
h                             earning

CMB                           Not
                                                                          Estimated
Shenzhen                      earning-pr
            Non-affili                              October   October     annual
Nanshan                  No   otected       5,000                                       5,000         0      5.67      5.67
            ated party                              21, 2014 29, 2014 yield
Sub-branc                     floating
                                                                          5.17%
h                             earning

                              Not
                                                                          Actual
CCB                           earning-pr
            Non-affili                              December January 4, annual
Shenzhen                 No   otected       6,000                                           0         0      2.05
            ated party                              31, 2014 2015         yield
Branch                        floating
                                                                          3.12%
                              earning

CCB                           Not
Shenzhen                      earning-pr                                  Estimated
            Non-affili                              December January 3,
OCT                      No   otected       1,000                         yield             0         0      0.34         0
            ated party                              31, 2014 2015
Sub-branc                     floating                                    3.12%
h                             earning

                              Not
                                                                          Estimated
CCB                           earning-pr
            Non-affili                              December January 4, annual
Shenzhen                 No   otected       6,800                                           0         0      2.33         0
            ated party                              31, 2014 2015         yield
Branch                        floating
                                                                          3.12%
                              earning

                              Not
                              earning-pr                                  Estimated
Bank of     Non-affili                              December January 4,
                         No   otected       3,000                         yield             0         0      2.07         0
China       ated party                              26, 2014 2015
                              floating                                    2.5%
                              earning

                              Not
                                                                          Estimated
CCB                           earning-pr
            Non-affili                              December January 3, annual
Shenzhen                 No   otected       3,000                                           0         0      1.83         0
            ated party                              31, 2014 2015         yield
Branch                        floating
                                                                          3.1%
                              earning

Total                                      52,200      --        --           --       29,400         0     83.22     73.68



                                                                                                                          24
                                                                                       China Fangda Group Co., Ltd. 2014 Annual Report


Source of fund                                   Self-owned fund

Principal and return due but not covered         0

Lawsuit (if any)                                 None

Disclosure date of approval announcement
                                                 March 11, 2014
(if any)

Disclosure date of Shareholders' Meeting
                                                 None
approval announcement (if any)


(2) Derivative investment

                                                                                                                                  In RMB10,000
                                                                                                                              Proportio
                                                                                                                                n of
                                                                                                                               closing
                                                                                                                              investmen    Actual
Derivativ                                                                                          Impairme
                          Related                                                    Initial                       Closing    t amount gain/loss
       e     Relations                               Initial                                          nt
                         transactio     Type                    Start date End date investmen                     investmen     in the     in the
investmen        hip                                 amount                                        provision
                              n                                                     t amount                      t amount     closing     report
t operator                                                                                         (if any)
                                                                                                                              net assets   period
                                                                                                                                in the
                                                                                                                               report
                                                                                                                               period

Shanghai
                                      Shanghai                  May 5,   July 23,
Futures      None        No                          1,459.21                                  0              0          0       0.00%       21.94
                                      aluminum                  2014     2014
Exchange

Total                                                1,459.21      --        --                0              0          0       0.00%       21.94

Capital source                                   Self-owned fund

Lawsuit (if any)                                 Inapplicable

Disclosure date of derivative investment
approval by the Board of Directors (if any)

Disclosure date of derivative investment
approval by the Shareholders’ Meeting (if       None
any)

                                                 To prevent the risk of fluctuation of raw material prices, the Company adopted the
Risk analysis and control measures for the
                                                 aluminum futures exchanged at the domestic futures exchange to provide hedging for
derivative 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 Futures
liquidity, credit, operation and legal risks)
                                                 Hedging to prevent risks.

Changes in the market price or fair value of The fair value of the derivative should be calculated with the open quotation of the
the derivative in the report period, the         futures market and should be reviewed regularly to ensure effective hedging.



                                                                                                                                                    25
                                                                                               China Fangda Group Co., Ltd. 2014 Annual Report


analysis of the derivative’s fair value
should disclose the method used and
related assumptions and parameters.

Material changes in the accounting policies
and rules related to the derivative in the           No
report period compared to last period

Opinions of independent directors on the
Company’s derivative investment and risk None
controlling


(3) Trusted loans: None

3. Use of raised capital

(1) Overview

                                                                                                                                 In RMB10,000
Total amount of the raised capital                                                                                                        33,658.69

Total raised capital invested in the report period                                                                                          760.64

Total accumulative raised capital invested                                                                                                31,431.04

Amount of raised capital of which the purpose was
                                                                                                                                                   0
changed in the report period

Accumulative amount of raised capital of which the
                                                                                                                                             6,000
purpose has been changed

Proportion of raised capital of which the purpose has
                                                                                                                                            17.83%
been changed

                                                             Notes to use of raised capital

By the end of the report period, the Company has strictly comply with the Instruction on Standard Operation of PLCs on the Main
Board of Shenzhen Stock Exchange and provisions for use and management of raised capital of the Company to deposit and use the
raised capital.. The raised capital totaled RMB314,31 million.


(2) Promised raised-capital-based projects

                                                                                                                                 In RMB10,000
                               If                                                          Investme      Date
                                       Promised                               Accumul
Project promised to be investme                                                                 nt      when the              Whether       Any
                                            total     Adjusted Investme         ative                               Profit
invested with the raised nt project                                                        progress     project                 the        major
                                       investme           total    nt in the investme                              realized
capital and investment         is                                                             by the    become                estimate change in
                                       nt of the investme           report    nt by the                             in the
of the excessive raised changed                                                            end of the useable                 profit is      the
                                           raised         nt (1)    period   end of the                            period
         capital           (includin                                                       period (3)      as                 realized feasibility
                                           capital                            period (2)
                           g partial                                                       =(2)/(1) proposed


                                                                                                                                                   26
                                                                                    China Fangda Group Co., Ltd. 2014 Annual Report


                            change)

Promised investment projects

Energy-saving and PV
                                                                                             June 30,
curtain wall production Yes               21,000   27,000     631.15 25,370.21      93.96%              6,270.22 Yes        No
                                                                                             2013
expansion project

                                                                                             Decembe
PSD production
                           Yes        12,658.69 6,658.69      129.49 6,060.83       91.02% r 31,        1,227.83 No         No
expansion project
                                                                                             2012

Subtotal of promised
                                 --   33,658.69 33,658.69     760.64 31,431.04       --         --      7,498.05       --         --
investment projects

Investment of excessive raised capital

Total                            --   33,658.69 33,658.69     760.64 31,431.04       --         --      7,498.05       --         --

Reason or situation that
not on schedule (on        None
specific project)

Notes to major changes
                           None
in project feasibility

Amount, purpose and        Inapplicable
use of excessive raised
capital

                           Applicable

                           Occurred in previous years
Changes 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.

                           Applicable
Adjustment of the
                           Occurred in previous years
implementation 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 Decoration
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.



                                                                                                                                       27
                                                                                         China Fangda Group Co., Ltd. 2014 Annual Report


                           Applicable

                           On September 30, 2010, payment of RMB20 million was made from idle proceeds to Fangda Decoration;
                           and RMB10 million was made to Fangda Automatic. On March 22, 2011, the returned idle capital RMB30
                           million was transferred to raise capital account. On March 28, 2011, payment of RMB20 million was made
                           from idle proceeds to Fangda Decoration; and RMB10 million was made to Fangda Automatic. On August
                           19, 2011, the returned idle capital RMB30 million was transferred to raise capital account. On August 23,
                           2011, payment of RMB20 million was made from idle raised capital to Fangda jianke; and RMB10 million
Idle raised capital used was made to Fangda Automatic. On February 16, 2012, the returned idle capital RMB30 million into the
as working capital       raised capital account. On February 22, 2012, payment of RMB20 million was made from idle proceeds to
                           Fangda Decoration; and RMB10 million was made to Fangda Automatic. On August 15, 2012, the returned
                           idle capital RMB30 million was transferred to raise capital account. On August 17, 2012, payment of
                           RMB20 million was made from idle proceeds to Fangda Decoration; and RMB10 million was made to
                           Fangda Automatic. On February 4, 2013 the returned idle capital RMB30 million was transferred to raise
                           capital account. On February 25, 2013, payment of RMB22 million was made from idle proceeds to
                           Fangda Decoration; and RMB8 million was made to Fangda Automatic. On July 15, 2013, the returned
                           idle capital RMB30 million was transferred to raise capital account.

                           Applicable

                           On July 15, 2013, the surplus raised capital (including interest income RMB was transferred to permanent
                           working capital. On August 22, 2014, raised capital (including interest) 5,150,302.35 was transferred to
                           permanent 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
                           Inapplicable
fund from financing

Problem or situation in
using of raised capital    None
and disclosing


(3) Altering of projects financed by raised capital

                                                                                                                            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)                                                             alteration

Energy-savi Energy-savi                                                                June 30,
                                   27,000        631.15    25,370.21          93.96%                   6,270.22 Yes             No
ng and PV    ng and PV                                                                 2013


                                                                                                                                              28
                                                                                              China Fangda Group Co., Ltd. 2014 Annual Report


curtain wall curtain wall
production production
expansion       expansion
project         project

2. PSD          2. PSD
production production                                                                       December
                                    6,658.69          129.49     6,060.83          91.02%                   1,227.83 No              No
expansion       expansion                                                                   31, 2012
project         project

Total                --            33,658.69          760.64   31,431.04           --            --         7,498.05       --               --

                                               The screen door project in Nanchang aimed to use a plant in Dafang Jiangxi new material
                                               industry zone as the production base. This can reduce the investment of RMB60 million for
                                               new plant, office and facilities.    According to the resolution of the 24th meeting of the 5th
                                               term of the Board, the proposal of changing the implementation place of the energy-saving
Alteration reason, decision-making
                                               and photo-electric curtain wall production expansion project and increasing the
process and information disclosure (by
                                               implementation entities was approved to change the implementation place to Dongguan,
project)
                                               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.

                                               The delivery process of metro screen door takes a long period of time. The Company
Reason or situation that not on                received orders of RMB613 million from 2013 to 2014, accounting for nearly 70% of the
schedule (on specific project)                 national aggregate. Orders to be delivered by the end of 2014 are worth RMB468 million.
                                               The screen door production expansion will support the sales and order delivery.

Notes to major changes in project
                                               None
feasibility after the alteration


4. Analysis of major subsidiaries and joint-stock companies

Major subsidiaries and joint-stock companies
                                                                                                                                           In RMB
                                     Main
Compan                             products     Registered                                                                Operation
             Type     Industry                                     Total assets             Net assets     Turnover                       Net profit
     y                                or          capital                                                                   profit
                                   services

                                   Curtain
Fangda     Subsidia Decorati                                                                              1,499,837,7 81,813,917. 70,755,15
                                   wall        500,000,000      2,297,588,580.12        749,684,129.22
Jianke     ry         on                                                                                         03.29               19          6.37
                                   system

Fangda                             Metro
           Subsidia Railroad                                                                              163,158,433 9,060,690.9 8,973,274.
Automat                            screen      105,000,000        396,147,819.22        192,209,221.13
           ry         industry                                                                                     .01                9           56
ic                                 door

Kexunda Subsidia Railroad Software 1,000,000.00                     57,361,368.99            2,774,714.13 13,472,393. 10,975,280. 12,861,41



                                                                                                                                                   29
                                                                                     China Fangda Group Co., Ltd. 2014 Annual Report


Co.      ry          industry develop                                                                      23           62          5.59
                             ment
                             and
                             system
                             integrati
                             on

Major subsidiaries and joint-stock companies
None
Acquisition and disposal of subsidiaries in the report period
√ Applicable □ Inapplicable
                                      Acquisition and disposal          Acquisition and disposal
                                                                                                         Impact on production and
           Company                  purpose of subsidiaries in the    method of subsidiaries in the
                                                                                                                performance
                                              report period                     report period

Guangdong Fangda SOZN              Speed up expansion to LED
                                                                     Purchase                         Create new profit growth
Lighting Co., Ltd.                 business


5. Major projects of non-raised capital: None

VII. Forecast of operating performance between January and March in 2015

Warning and reasons of possible net loss or substantial change from the last period between the beginning of the
year and the end of the next report period
□ Applicable √ Inapplicable

VIII. Entities on which the Company has control power: None

IX. Future Prospect

       (1) Industry competition map and development trend
       Curtain wall and material system industry
     According to the Chinese Building Decoration Industry 12th Five-year Plan, the domestic building curtain
wall industry is worth RMB400 million in 2015. The urbanization will accelerate the market demand and give a
strong booth to the development of the industry. The government also released a series of policies to support the
development of the industry.
      (2) New energy industry
      1. Solar power industry
     The solar power generation industry is supported by the Chinese government. Since late 2012, the state
council, finance minister, energy administration and state grid have issued a series of policies to regulate various
issues related to PV power generation and subsidies for distributed power plants. Despite that most on-grid power
generation is centralized power plants, accounting for 84% in 2013, distributed power plants will develop rapidly
with the government support.
      (2) LED light


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                                                                      China Fangda Group Co., Ltd. 2014 Annual Report


     LED as the new lighting technology has won support in many countries and organizations, which issued
many policies to support the development of the industry. The retirement of incandescent light bulbs will explode
the development of LED lights. In November 2011, China released the incandescent light bulb retirement
roadmap. All incandescent light bulbs will be retired in China by 2016. Recently, National Development and
Reform Committee and tax administration released the announcement on subsidies for EMC project enterprise.
The government concern for energy conservation will boost the development of the LED industry.
     (3) Rail transport equipment business
      In the 12th Five-year period, the urban metro and railway construction mileage will reach2,600km, with a
total investment of RMB1.27 trillion. Screen door is a key device for metro. Therefore, the demand will remain
strong.
     (4) Real estate
     As the land resource becomes increasingly rare, the urban renovation has become a common issue for many
large cities. Shenzhen government has released a series of policies to encourage renovation projects. Fangda
Town renovation project is located into the crossroad of Dashahe Innovation Corridor and OCT cultural
innovation ring.
    (2) Corporate development strategy and operating plan
       2015 will witness remarkable innovation and development, as well as business, concept transformation of
the Company. A series of internal reforms will be launched to improve the comprehensive competitiveness and
operation efficiency, fueling the Company’s long-term development. The development of the new energy business
is a strategic part in the Company’s development plan. The Company will grasp the gold opportunities to blend
industry, financial and business innovation and blaze a new trail in developing the new energy industry. The
Company will further consolidate its position as the domestic leading supplier of metro screen doors and expand
into the global market. The Company will ensure the quality of the Fangda Town renovation project and meet the
sales target.
    (3) Capital demand for support existing business and construction in progress
     The development of the Company’s main business and Fangda Town renovation project increase the capital
demand. Therefore, the Company has approved the proposal of private A-share issuing to raise RMB1.008 billion,
which will be used to fund construction of solar power plants. To realize the operating target in 2015, the
Company will formulate reasonable financial and capital plans to add more financing channels and self-owned
fund and bank loans to meet the capital demand.
    (4) Potential risks and measures
     1. Market risks and measures
     As the overall designing and engineering quality continues improving in the domestic construction curtain
wall industry, curtain wall products will become increasingly standard, intensifying the market competition. The
Company will continue implementing a prudent operation strategy, fine management and technical innovation to
lower the management costs and accelerate the recovery of receivables. Through new technologies and
processes, we will improve product quality, lower costs and elevate earnings. While consolidating the domestic
market, the Company will step up the efforts in exploring overseas markets, thus elevating our competitiveness in
global markets and improving our resistance to risks.
     2. Management risks and measures
     With an increase in orders in recent years and operation of six industry bases, the Company has continued
expanding rapidly in terms of capitalization, business and teams. The organizational structure and management
system have become more complicated, leading to management risks in industry expansion. The Company will

                                                                                                                  31
                                                                     China Fangda Group Co., Ltd. 2014 Annual Report


continue to improve the matrix management mode, integrate business management, optimize the business flow,
seeking to build a high-efficient and solid management team. We will introduce high-quality, professional
technical and management talents in different fields to strengthen the Company's core competitiveness.
      3. Production and operation risks and measures
      The macro-economy and market demand have added to the fluctuation in prices of main raw materials such
as aluminum and steel and labor, affecting the Company’s profitability and creating additional production and
operation risks for the Company. The Company has sought to lower the purchase and production costs, pay
attention to technical R&D, reduce consumption of raw materials, introduce automatic and intelligent production
equipment, and strengthen staff training to improve working efficiency.
      4. Management and implementation risks in Fangda Town renovation project and measures
     As the first real-estate project undertaken by the Company, the Fangda Town renovation project may lead to
risks for the company in project management and implementation. The Company has recruited a professional
and experienced team and a solid internal control system to manage and implement the project.

X Statement of the Board on the “non-standard auditors report” issued by the CPA on the
current report period

□ Applicable √ Inapplicable

XI The Companys accounting policies, estimates and calculation methods have remained
unchanged from the last annual report.

XII. Retrospective restatement of major accounting errors in the report period

13. Statement of change in the financial statement consolidation scope compared with the
previous financial report

      √ Applicable □ Inapplicable
      Acquire Guangdong Fangda SOZN Lighting Co., Ltd. under different control in the report period.
      Fangda New Energy and Shihui International Holding were established and consolidated in the period.
      Fangda Yi was liquidated in the period and removed from consolidate statements.



XIV Profit distribution and dividend payment of the Company

Formulation, execution or adjustment of profit distribution policy in the report period
√ Applicable □ Inapplicable
      To regulate cash dividend distribution and improve distribution transparency, according to CSRC [2013]
No.43 Cash Dividend of Listed Companies, the Company revised profit distribution policies and terms in the
Articles of Associations and formulated the Shareholder Return Plan for 2015-2017, which were approved at the
8th meeting of the 7th Board of Directors and 1st extraordinary shareholders’ meeting in 2015.
      During the report period, the Company implemented the profit distribution plan for 2013. Approved at the
Shareholders' Meeting 2013 held on March 31, 2014, the Company's profit distribution plan for 2013 is
distributing a cash dividend of RMB0.30 (tax-included) for every ten shares of all the shareholders based on a

                                                                                                                 32
                                                                                       China Fangda Group Co., Ltd. 2014 Annual Report


total of 756,909,905 shares on December 31, 2013. The plan was implemented on April 15, 2014 (see the 2013
Share Equity Distribution Implementation Announce 2014-29).


                                             Explanation of Cash Dividend Distribution Policies

Comply with the Articles of Association or resolution made at
                                                                        Yes
the General Shareholders' Meeting

Clear and definite distribution standard and proportion                 Yes

Decision-making procedure and mechanism                                 Yes

Independent directors fulfill their duties                              Yes

Middle and small shareholders express their opinions and claims.
                                                                        Yes
There rights are well protected.

Cash dividend distribution policies are adjusted or revised
                                                                        Yes
according to law

Profit distribution and reserve capitalizing pre-plans or plans over the recent three years (including the reporting
period)
2012: A cash dividend of RMB0.30 (including tax) for each ten shares is issued to all shareholders on the basis of
756,909,905 shares with a total amount of RMB 22,540,512.87, on December 31, 2012. No dividend share or
capitalization share is issued in the year.
2013: A cash dividend of RMB0.30 (including tax) for each ten shares is issued to all shareholders on the basis of
756,909,905 shares with a total amount of RMB 22,707,297.15, on December 31, 2013. No dividend share or
capitalization share is issued in the year.
2014: A cash dividend of RMB0.30 (including tax) for each ten shares is issued to all shareholders on the basis of
756,909,905 shares with a total amount of RMB 22,707,297.15, on December 31, 2014. No dividend share or
capitalization share is issued in the year.


Cash dividends for the recent three years
                                                                                                                                  In RMB
                                                                                                                       Proportion of the
                                                      Net profit        Proportion in the net      Amount of
                                                                                                                          amount of
                                                    attributable to     project attributable    repurchased share
                           Cash dividend                                                                               repurchased share
        Year                                      shareholders in the    to shareholders in       capital in cash
                          (including tax)                                                                               capital in cash
                                                     consolidated         the consolidated      included in cash
                                                                                                                       included in cash
                                                 financial statements financial statements          dividend
                                                                                                                           dividend

2014                          22,707,297.15            96,998,429.76                 23.41%                     0.00               0.00%

2013                          22,707,297.15            85,676,863.78                 26.50%                     0.00               0.00%

2012                          22,540,512.87            24,948,377.20                 90.35%                     0.00               0.00%

No cash dividend is proposed despite the Company records profits in the report period and a positive undistributed
profit/
□ Applicable √ Inapplicable



                                                                                                                                           33
                                                                                      China Fangda Group Co., Ltd. 2014 Annual Report


XV Profit Distribution and Reserve Capitalization Plan in the Report Period

√ Applicable □ Inapplicable
Bonus shares for every ten shares                                                               0

Cash dividend for every ten shares (yuan,
                                                                                              0.30
tax-included)

Share dividend for each ten shares (share)                                                      0

A total number of shares as the distribution basis                                        756,909,905

Total cash dividend (yuan, including tax)                                                22,707,297.15

Distributable profit (yuan)                                                              404,322,761.53

Proportion of cash dividend in the distributable
                                                                                            100.00%
profit

                                                     Cash dividend distribution policy

The Company is in a fast growth stage. Therefore, the cash dividend will reach 20% of the profit distribution at least.

                                       Details of profit distribution or reserve capitalization plan

     The Company plans to distribute a cash dividend of RMB0.30 (including tax) for each ten shares issued to all shareholders on
the basis of 756,909,905 shares with a total amount of RMB22,707,297.15, on December 31, 2014. No dividend share or
capitalization share is issued in the year.
     The plan needs to be reviewed and approved at the General Shareholders' Meeting 2014.


XVI Social responsibilities

√ Applicable □ Inapplicable
       In the reporting period, the Company has positively assumed social responsibilities by: paying taxes
RMB105 million, up 13.20% year-on-year; donating RMB958,000 and investing RMB771,800 in environment
protection, create nearly 10,000 jobs; inputting RMB2.1421 million in employee knowledge and skill training.
The company has invested RMB86.77 million to promote development of new draft, technology, product
structure and patent according to clean, safety and efficient production to make contribution for environmental
protection.


Are the listed company and subsidiaries involved in a heavy-pollution industry defined by the national
environment protection department?
□ Yes √ No □ N/A
Do the listed and subsidiaries cause any material security problems to the society?
□ Yes √ No □ N/A
Did the listed and subsidiaries receive any administration penalty in the report period?
□ Yes √ No □ N/A




                                                                                                                                    34
                                                                China Fangda Group Co., Ltd. 2014 Annual Report


XVII Reception of investigations, communications, or interviews in the reporting period

√ Applicable □ Inapplicable
                                                                                       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

                                     Onsite                                               Business and future
   July 4, 2014        Shenzhen                   Institution      Fullgoal Fund
                                  investigation                                              development

                                                                  CMS, Shenyin &
                                     Onsite                                               Business and future
   July 8, 2014        Shenzhen                   Institution    Wanguo, Southern
                                  investigation                                              development
                                                                        Fund

                                                                   GF Securities,
                                                                 Invesco Great Wall
                                     Onsite                      fund, QHKY Fund,         Business and future
   July 14, 2014       Shenzhen                   Institution
                                  investigation                      Industrial              development
                                                                     Securities,
                                                                  Prudential Fund


                                                                                                                35
                                                                       China Fangda Group Co., Ltd. 2014 Annual Report


                         Shenzhen,
                                            Onsite                                            Business and future
   July 24, 2014         Dongguan                        Institution    Shenyin & Wanguo
                                         investigation                                           development
                         Songshanhu

                                            Onsite                          Hong Yuan         Business and future
September 3, 2014         Shenzhen                       Institution
                                         investigation                      Securities           development

                                            Onsite                                            Business and future
November 3, 2014          Shenzhen                       Institution    Shenyin & Wanguo
                                         investigation                                           development

                                            Onsite                                            Business and future
November 13, 2014         Shenzhen                       Institution      Yuanta Funds
                                         investigation                                           development

                                                                            Shenyin &
                                                                         Wanguo, China
                                                                            Investment
                                                                        Securities, Invesco
                                            Onsite                       Great Wall fund,     Business and future
December 2, 2014          Shenzhen                       Institution
                                         investigation                   Yintai Securities,      development
                                                                         Qianhai Anzhou
                                                                         Capital, Rongyao
                                                                        Investment, Daoyi
                                                                              Assets

Number of reception                                                            15

Number of institutions                                                         34

Disclosed or leaked uncovered material
                                                                               No
information




                                                                                                                    36
                                                                   China Fangda Group Co., Ltd. 2014 Annual Report




                                      V Significant Events

I. The Company has no significant lawsuit or arbitration affair in the report period.

II. The Company has no significant affair that arouses media questioning.

III. The controlling shareholder and its affiliates occupied no capital for non-operating
purpose of the Company during the report period.

IV. The Company has no bankruptcy or reorganization events in the report period.

V. Assets trade

1. The Company required no assets in the report period.

2. The Company sold no assets in the report period.

3. Enterprise merger

√ Applicable □ Inapplicable
     On July 18, 2014, the Company entered into an agreement with natural person Luo Huichi to acquire 60%
stake in the Guangdong Fangda SOZN Lighting Co., Ltd (“New Company”) set upo with the fixed assets,
intangible assets, sales networks and teams of three LED lighting companies controlled by Luo. The investment
does not exceed RMB48 million in cash. The payment includes conditional stock transfer to Luo and conditional
investment to the New Company. The Announcement on Acquiring Zhongshan SOZN Lighting Co., Ltd. and LED
Lighting Business of Its Affiliates was published on China Securities Journal, Shanghai Securities Daily,
Securities Times, HKCD and www.cninfo.com.cn on July 22, 2014. The acquisition will accelerate the
Company’s LED business expansion and create new profit growth opportunities. As part of the Company’s new
energy development strategy, it coincides with the Company’s development shift onto energy-saving industries
and will optimize the Company’s business structure, thus propelling the Company’s long-term growth. The
acquisition has completed as scheduled. Fangda SOZN recorded a tax-included income of RMB136,832,908.41
between July and December 2014.




                                                                                                               37
                                                                                  China Fangda Group Co., Ltd. 2014 Annual Report


VI. The Company made or implemented no option incentive scheme in the report period.

VII. Material related transactions

1. The 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 related transaction in the report period.

VIII. Significant contracts and performance

1. Asset entrusting, leasing, contracting

(1) The Company made no custody in the report period

(2) The Company made no contract in the report period

(3) Leasing

Leasing
The Company leases investment real estates and obtained a lease income of RMB25,160,000 in the report period.
Projects that create gains accounting for over 10% of the Company’s total profit in the report period
□ Applicable √ Inapplicable
The Company leased no projects that create gains accounting for over 10% of the Company’s total profit in the
report period.

2. Guarantee

The Company made no external guarantee (excluding for subsidiaries)
                                                                                                                      In RMB10,000
                                               Guarantee provided to subsidiaries

                                               Actual date of
 Guarantee provided    Date of     Guarantee      occurring       Actual amount      Type of                       Complete Related
                                                                                                      Term
          to          disclosure    amount     (signing date of    of guarantee     guarantee                      d or not   party
                                                agreements)

                                                                                                 since engage
                      March 11,                 September 3,
   Fangda Jianke                    36,000                          22,823.38     Joint liability of contract to     No        No
                        2014                        2014
                                                                                                 2 years upon



                                                                                                                                      38
                                                                      China Fangda Group Co., Ltd. 2014 Annual Report


                                                                                         due of debt

                                                                                        since engage
                   March 11,              October 20,                                   of contract to
 Fangda Jianke                  20,000                    19,945.62   Joint liability                    No   No
                     2014                    2014                                       2 years upon
                                                                                         due of debt

                                                                                        since engage
                   March 11,             September 9,                                   of contract to
 Fangda Jianke                  25,000                    14,613.72   Joint liability                    No   No
                     2014                    2014                                       2 years upon
                                                                                         due of debt

                                                                                        since engage
                   March 11,                                                            of contract to
 Fangda Jianke                  20,000   June 16, 2014    19,822.97   Joint liability                    No   No
                     2014                                                               2 years upon
                                                                                         due of debt

                                                                                        since engage
                   March 11,             September 30,                                  of contract to
 Fangda Jianke                  21,428                    9,683.29    Joint liability                    No   No
                     2014                    2014                                       2 years upon
                                                                                         due of debt

                                                                                        since engage
                   November              November 11,                                   of contract to
 Fangda Jianke                  15,000                     3,850      Joint liability                    No   No
                    8, 2014                  2015                                       2 years upon
                                                                                         due of debt

                                                                                        since engage
                   March 11,             September 3,                                   of contract to
Fangda Automatic                20,000                    13,266.57   Joint liability                    No   No
                     2014                    2015                                       2 years upon
                                                                                         due of debt

                                                                                        since engage
                   November              November 11,                                   of contract to
Fangda Automatic                5,000                      2,660      Joint liability                    No   No
                    8, 2014                  2015                                       2 years upon
                                                                                         due of debt

                                                                                        since engage
  Fangda New       March 11,                                                            of contract to
                                7,080    April 11, 2015   2,977.68    Joint liability                    No   No
    Material         2014                                                               2 years upon
                                                                                         due of debt

                                                                                        since engage
  Fangda New       March 11,                                                            of contract to
                                8,000    May 5, 2015      5,573.29    Joint liability                    No   No
    Material         2014                                                               2 years upon
                                                                                         due of debt

                                                                                        since engage
                   January 4,             January 29,                                   of contract to
Fangda Property                 21,000                     11,000     Joint liability                    No   No
                     2014                    2014                                       2 years upon
                                                                                         due of debt



                                                                                                                   39
                                                                                     China Fangda Group Co., Ltd. 2014 Annual Report


                                                                  Total of guarantee to
Total of guarantee to subsidiaries
                                             264,000              subsidiaries actually occurred             148,787.48
approved in the report term (B1)
                                                                  in the report term (B2)

                                                                  Total of balance of guarantee
Total of guarantee to subsidiaries
                                                                  actually provided to the
approved as of the report term               264,000                                                         126,216.53
                                                                  subsidiaries as of end of
(B3)
                                                                  report term (B4)

Total of guarantee provided by the Company (total of the above two)

Total of guarantee approved in the                                Total of guarantee occurred in
                                             264,000                                                         148,787.48
report term (A1+B1)                                               the report term (A2+B2)

                                                                  Total of guarantee occurred as
Total of guarantee approved as of
                                             264,000              of the end of report term                  126,216.53
end of report term (A3+B3)
                                                                  (A4+B4)

Percentage of the total guarantee occurred (A4+B4) on net asset
                                                                                                  102.21%
of the Company


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.

IX. Performance of promises

1. The Company and shareholders with more than 5% stakes in the Company made no guarantee in the
report period or before report period but remaining effective in the report period.

2. Explanation and reason of profit forecasts on assets or projects that remain in the report period

□ Applicable √ Inapplicable

10. Engaging and dismissing of CPA

CPA engaged currently
Domestic public accountants name                                         Grant Thornton (special general partner)

Remuneration for the domestic public accountants
                                                                                              130
(in RMB10,000)

Consecutive years of service by the domestic public
                                                                                              3
accountants

Name of certified accountants of the domestic public
                                                                                Lin Kaiqin and Li Chunmei
accountants



                                                                                                                                 40
                                                                        China Fangda Group Co., Ltd. 2014 Annual Report


Overseas public accountants name (if any)                                      None

Remuneration for the overseas public accountants
                                                                                 0
(in RMB10,000)

Consecutive years of service by the overseas public
                                                                               None
accountants (if any)

Name of certified accountants of the overseas public
                                                                               None
accountants (if any)

The CPA is not replaced
□ Yes √ No
Engaging of internal control audit CPA, financial advisor and sponsor
√ Applicable □ Inapplicable
This year, the Company continued engaging Grant Thornton (special general partner) as the internal control CPA.
The financial statement review fee is RMB1.3 million.

11. Statement of the Supervisory Committee and Independent Directors (if applicable) on the
“non-standard auditors report” issued by the CPA on the current report period

□ Applicable √ Inapplicable

XII. The Company received no penalty and made no correction in the report period.

XIII. Trade suspension and termination after the disclose of the annual report

XIV. The Company had no other significant event to be explained in the report period.

XV. Material events of subsidiaries

XVI. The Company issued no corporate bonds in the period.




                                                                                                                    41
                                                                                    China Fangda Group Co., Ltd. 2014 Annual Report




                         VI Changes in Share Capital and Shareholders

1. Changes in shares

1. Changes in shares

                                                                                                                               In share
                                 Before the change                          Change (+,-)                        After the change

                                                          Issued              Transferre
                                                                   Bonus                            Subtot
                                Amount       Proportion    new                  d from     Others            Amount        Proportion
                                                                   shares                             al
                                                          shares               reserves

I. 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
                               756,130,613      99.90%                                                       756,130,613       99.90%
limited conditions

1. Common shares in RMB        420,179,425      55.51%                                                       420,179,425       55.51%

2. Foreign shares in
                               335,951,188      44.39%                                                       335,951,188       44.39%
domestic market

III. Total of capital shares   756,909,905     100.00%                                                       756,909,905      100.00%

Reasons
□ Applicable √ Inapplicable
Approval of the change
□ Applicable √ Inapplicable
Share transfer
□ Applicable √ Inapplicable
Impacts on financial indicators including basic and diluted earnings per share, net assets per share attributable to
common shareholders of the company in the most recent year and period
□ Applicable √ Inapplicable
Others that need to be disclosed as required by the securities supervisor
□ Applicable √ Inapplicable




                                                                                                                                        42
                                                                                          China Fangda Group Co., Ltd. 2014 Annual Report


2. No change in shares with sales restriction

2. Share placing and listing

1. The Company issued no securities in the recent three years

□ Applicable √ Inapplicable

2. Statement of changes in share number and shareholder structure, assets and liabilities structure

□ Applicable √ Inapplicable

3. Current employees shares

□ Applicable √ Inapplicable

3. Shareholders and the substantial controller of the Company

1. Shareholders and shareholding

                                                                                                                                         In share
                                                                                                   Number of
                                                Number of ordinary
Number of                                                                                          shareholders of
                                                shareholders by the
shareholders of                                                                                    preferred stocks of
                                                end of the 5th date
common shares at               46,209                                            52,741            which voting rights               0
                                                day before the
the end of the report                                                                              recovered in the
                                                disclosure date of the
period                                                                                             report period (if any,
                                                annual report
                                                                                                   see Note VIII)

                               Shareholders holding 5% of the Company's shares or top-10 shareholders

                                                       Number of                                                          Pledging or freezing
                                                                                                       Amount of
                                                     shares held at Change in the Conditio
                        Properties of Shareholdi                                                     shares without
    Shareholder                                      the end of the       reporting        nal                            Share
                         shareholder       ng                                                             sales                      Amount
                                                        reporting          period         shares                          status
                                                                                                       restriction
                                                         period

 Shenzhen Banglin
                          Domestic
   Technologies
                        non-state legal   9.09%        68,774,273            0                         68,774,273        Pledged    14,150,000
 Development Co.,
                            person
         Ltd.

Shengjiu Investment Foreign legal
                                          5.00%        37,845,591        +11,199,085                   37,845,591
         Ltd.               person

                          Domestic
    Huang Jupei                           3.96%        30,001,000        +5,083,800                    30,001,000
                        natural person




                                                                                                                                                 43
                                                                                     China Fangda Group Co., Ltd. 2014 Annual Report


                         Domestic
    Zhou Shijian                           2.79%       21,123,481     +21,123,481               21,123,481
                       natural person

                         Domestic
 Shenzhen Shilihe
                       non-state legal     2.36%       17,860,992          0                    17,860,992
Investment Co., Ltd.
                           person

                         Domestic
     Yu Liandi                             1.34%       10,121,923     +10,121,923               10,121,923
                       natural person

  National Social
Insurance Portfolio        Others          1.32%       9,999,832      +9,999,832                9,999,832
      No.109

                         Domestic
     Jiang Jing                            1.19%       9,029,914      -1,605,526                9,029,914
                       natural person

 ICBC-Lion Fund
 Stock Investment          Others          1.12%       8,513,474      +8,513,474                8,513,474
        Fund

      Bank of
 Communication –
 Huaan Chuangxin           Others          0.79%       5,995,718      +5,995,718                5,995,718
     Securities
  Investment Fund

A strategic investor or ordinary
legal person becomes the Top10           None
shareholder due a stock issue.

                                         Among the shareholders, Shenzhen Banglin Technology Development Co., Ltd. and Shengjiu
                                         Investment Co., Ltd. are parties action-in-concert. Shenzhen Banglin Technology
Notes to top ten shareholder
                                         Development Co., Ltd. and Shenzhen Shilihe Investment Co., Ltd. are related parties.     The
relationship or "action in concert"
                                         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.                                  37,845,591                        listed in domestic     37,845,591
                                                                                                      exchanges

                                                                                                    RMB common
             Huang Jupei                                        30,001,000                                               30,001,000
                                                                                                        shares

            Zhou Shijian                                        21,123,481                          RMB common           21,123,481


                                                                                                                                         44
                                                                                       China Fangda Group Co., Ltd. 2014 Annual Report


                                                                                                         shares

  Shenzhen Shilihe Investment Co.,                                                                  RMB common
                                                                  17,860,992                                               17,860,992
                 Ltd.                                                                                    shares

                                                                                                    RMB common
               Yu Liandi                                          10,121,923                                               10,121,923
                                                                                                         shares

 National Social Insurance Portfolio                                                                RMB common
                                                                    9,999,832                                               9,999,832
                No.109                                                                                   shares

                                                                                                    RMB common
               Jiang Jing                                           9,029,914                                               9,029,914
                                                                                                         shares

 ICBC-Lion Fund Stock Investment                                                                    RMB common
                                                                    8,513,474                                               8,513,474
                 Fund                                                                                    shares

  Bank of Communication – Huaan
                                                                                                    RMB common
  Chuangxin Securities Investment                                   5,995,718                                               5,995,718
                                                                                                         shares
                 Fund

No action-in-concert or related
                                           Among the top 10 shareholders, Shenzhen Banglin Technology Development Co., Ltd. and
parties among the top10
                                           Shengjiu Investment Co., Ltd. are parties action-in-concert. Shenzhen Banglin Technology
unconditional shareholders and
                                           Development Co., Ltd. and Shenzhen Shilihe Investment Co., Ltd. are related parties.      The
between the top10 unconditional
                                           Company is not notified of other action-in-concert or related parties among the other holders
shareholders and the top10
                                           of current shares.
shareholders

                                           Huang Jupei holds 30,000,000 shares of the Company through GF Securities customer credit
                                           transaction guarantee securities account; Zhou Shijian holds 21,123,481 shares of the
Participation by top-10 ordinary
                                           Company through GF Securities customer credit transaction guarantee securities account, Yu
shareholders in financing bonds (if
                                           Liandi holds 10,121,923 shares of the Company through GF Securities customer credit
any)
                                           transaction guarantee securities account; Jiang Jing holds 9,024,914 shares of the Company
                                           through Everbright Securities customer credit transaction guarantee securities account.

Agreed re-purchasing by the Company’s top 10 shareholders of common shares and top 10 shareholders of
unconditional common shares in the report period

2. Profile of the controlling shareholders

Legal person
                                   Legal
  Name of controlling                                   Date of
                            representative/resp                        Organization code   Registered capital         Main business
       shareholder                                  establishment
                              onsible person

                                                                                                                   Industrial investment,
                                                                                                                  developing of electronic
   Shenzhen Banglin
                                                                                                                    products, technical
       Technologies            Chen Jinwu            June 7, 2001         72984005-5       RMB 30 million
                                                                                                                   consulting, domestic
 Development Co., Ltd.
                                                                                                                    commerce, material
                                                                                                                          trading


                                                                                                                                            45
                                                                                   China Fangda Group Co., Ltd. 2014 Annual Report


Future development
                            The Company will continue investment.
strategy

Operating result,
financial status and cash Banglin Technology's 2014 financial statements are not audited.
flow

Stock ownership of
other domestic and
overseas listed company
                            None
controlled or whose
shares are held by
controlling shareholders

No change in the controlling shareholder in the report period

3. Substantial controller of the Company

Natural person
           Name of substantial controller               Nationality               Right of residence in another country or region

                  Xiong Jianming                          Chinese                                       Yes

Occupation and position over the last five
                                                Chair of the Board and president of the Company
years

Profiles of domestic and overseas listed
                                                The controller held no share in other listed companies in the last ten years.
companies in which the controller held shares

No change in the actual shareholder in the report period
7. Chart of the controlling relationship




No controlling over the Company by the substantial controller through trust or other asset management




                                                                                                                                    46
                                                                             China Fangda Group Co., Ltd. 2014 Annual Report


4. The Company has no other legal person shareholders with over 10% of total shares

4. Statement on share increasing proposal raised by the shareholders or their
action-in-concert parties in the reporting period

                                                                                                               Disclosure date of
     Name of
                      Number of      Proportion of                      Actual proportion Initial disclosure the share increase
   shareholder/                                      Actual number of
                      shares to be   shares to be                           of shares      date of the share         plan
 action-in-concert                                   shares increased
                       increased      increased                             increased        increase plan      implementation
      parties
                                                                                                                  completion

Shengjiu Investment
                                                       11,199,085            1.48%
       Ltd.




                                                                                                                                 47
                                                                          China Fangda Group Co., Ltd. 2014 Annual Report




VII Particulars about the Directors, Supervisors, Senior Management

                                             and Employees

1. Changes in shareholding of Directors, Supervisors and Senior Management

                                                                             Number of
                                                                             shares held Increased Decreased Number of
                                                    Starting
                                                                  End date       at      shares in   shares in shares held
 Name        Position     Job status   Sex   Age   date of the
                                                                 of the term beginning this period this period at end of
                                                      term
                                                                               of the    (share)     (share)   the period
                                                                               period

 Xiong      Chairman,                              March 31, March 31,
                          In office    M     57                              1,002,771      0           0      1,002,771
Jianming    president                                2014          2017

            Director,
 Wang                                              March 31, March 31,
               vice       In office    M     57                               36,286        0           0        36,286
Shengguo                                             2014          2017
            president

 Xiong                                             March 31, March 31,
             Director     In office    M     46
 Jianwei                                             2014          2017

            Director,
  Zhou      secretary                              March 31, March 31,
                          In office    M     52
Zhigang       of the                                 2014          2017
              Board

 Huang      Independe                              March 31, March 31,
                          In office    M     52
 Yaying     nt director                              2014          2017

  Guo       Independe                              March 31, March 31,
                          In office    M     49
 Wanda      nt director                              2014          2017

            Independe                              March 31, March 31,
 Lin Bin                  In office    M     52
            nt director                              2014          2017

            Supervisor
                y
                                                   March 31, March 31,
Zhen Hua Committee In office           F     55
                                                     2014          2017
             meeting
            convener

  Yin                                              March 31, March 31,
            Supervisor In office       M     46
Changjian                                            2014          2017

  Zen                                              March 31, March 31,
            Supervisor In office       M     45
 Xiaowu                                              2014          2017



                                                                                                                           48
                                                                      China Fangda Group Co., Ltd. 2014 Annual Report


              Vice
                                                   March 31, March 31,
Lin Kebin president      In office   M      37
                                                     2014      2017
           and CFO

   Wei        Vice                                 March 31, March 31,
                         In office   M      46
 Yuexing   president                                 2014      2017

   Guo     Independe                               March 25, March 25,
                         Resigned    M      53
 Jinlong   nt director                               2011      2014

   Shao    Independe                               March 25, March 25,
                         Resigned    F      76
 Hanqing   nt director                               2011      2014

                                                   March 25, March 25,
Yu Guoan Supervisor Resigned         M      55
                                                     2011      2014

                                                   March 25, March 25,
Cao Naisi Supervisor Resigned        F      36
                                                     2011      2014

  Yang        Vice                                 March 25, March 25,
                         Resigned    M      61
Xioazhuan president                                  2011      2014

Total          --           --       --     --        --         --      1,039,057     0          0      1,039,057


2. Office Description

Working experiences of current directors, supervisors and senior management in recent five years
     Mr. Xiong Jianming: PHD Management; senior engineer; part-time professor of Beijing Institute of Civil
Engineering and Architecture and Nanchang University. He was once employed by Jiangxi Provincial
Machinery Design Academe, Administration Bureau of Shekou District of Shenzhen government, etc, deputy to
the 10th People’s Congress of Guangdong Province, deputy to the 2nd and 3rd People’s Congress of Shenzhen City.
He’s now assuming Chairman of the Board and President of the Company, member of the 5th Shenzhen
Committee of CPPCC, standing member of the 5th Nanshan Committee of CPPCC, founder and president of the
Shenzhen Semiconductor Lighting Association, vice president of the Federation of Shenzhen Industries, vice
president of the SGCC, president of the Nanshan Industry and Commerce Association and Honorary Chairman of
Shenzhen Nanshan Charity Society.
     Mr. Wang Shengguo: Master degree; Visiting Scholar from University of Essen, senior engineer. He once
held such positions as Chief Engineer of Design Institute of the 2nd Heavy Machinery factory of Machinery
Industrial Ministry. Mr. Wang is now a Director and Vice President of the Company.
     Mr. Xiong Jianwei: MBA. He is now a director of the Company.
     Mr. Zhou Zhigang, bachelor’s degree. He is currently a Director, Secretary of Board, and head of the
Securities Dept and HR Dept.
     Mr. Huang Yaying, is a master of China University of Political Science and Law, a law professor and
licensed lawyer. He is a senior visiting scholar of the Law School of UNSW and Hong Kong University. He is
now the president of the Law School and a member of the Diploma Appraisal Committee of Shenzhen University,
standing director of the China Academy of Arbitration Law and Institute of China Private International Law,
lawyer of the Guangdong Guoxin Law Firm and independent director of the Company.
     Guo Wanda: Economic PH.D, research. As the executive deputy president of China Development Institute,
he has studied in macro-economy, industry policies and enterprise development strategies for years and provided

                                                                                                                  49
                                                                           China Fangda Group Co., Ltd. 2014 Annual Report


consulting services. He is an independent director of the Company.
      Lin Bin: economics (accounting) doctor. He is a professor of the Accounting Department of the Management
School of Sun Yat-Sen University, director of the Enterprise and Non-Profit Organization Research Center of Sun
Yat-Sen University, and was once the director of the Accounting Department of Sun Yat-Sen University and
MPACC Education Center. He is a member of the consultant panel of the enterprise internal control standard
committee of the Ministry of Finance, deputy president of Guangdong Auditor Society, vice president of the
Guangdong Internal Auditor Association.
      Ms. Zhen Hua: Bachelor degree. She is now Supervisory Committee meeting convener, Chairwoman of
Trade Union, Director of President Office and head of the administration department of the Company.
      Yin Changjian, bachelor's degree, is a CPA. He was only deputy general manager of Beijing branch of
Fangda Jianke and is now the deputy director of the audit and supervision dept. He is a staff supervisor.
      Zeng Xiaowu, master's degree, is a senior engineer. He was once chief engineer, president of the design
institution and is now the vide technical supervisor
      Mr. Lin Kebin, bachelor’s degree. At present he’s the Vice President and CFO of the Company.
      Wei Yuexing, bachelor's degree, is an engineer. He is now vice president of the Company and general
manager of Fangda Jianke


Offices held at shareholders entities
                                                                                                           Whether any
                                                                      Starting date of End date of the remuneration is paid
    Name                  Shareholder entity               Office
                                                                         the term          term         at the shareholder
                                                                                                              entity

    Xiong                                                               October 6,
                       Shengjiu Investment Ltd.          Chairman                                              No
   Jianming                                                               2011

     Wang                                                              October 19,
                 Shenzhen Shilihe Investment Co., Ltd.   Chairman                                              No
   Shengguo                                                               2006

     Wang                                                 General     September 29,
                 Shenzhen Shilihe Investment Co., Ltd.                                                         No
   Shengguo                                               manager         2003

Xiong Jianwei    Shenzhen Shilihe Investment Co., Ltd.    Director    June 12, 2001                            No

                                                                       October 19,
 Zhou Zhigang    Shenzhen Shilihe Investment Co., Ltd.    Director                                             No
                                                                          2006

                                                                       October 19,
   Zhen Hua      Shenzhen Shilihe Investment Co., Ltd.   Supervisor                                            No
                                                                          2006

Office
                None
description

Offices held at other entities
                                                                                                           Whether any
                                                                      Starting date of End date of the remuneration is paid
    Name                     Entity name                   Office
                                                                         the term          term         at the shareholder
                                                                                                              entity

 Huang Yaying     Law School of Shenzhen University        Dean        July 1, 2009                            Yes


                                                                                                                             50
                                                                                China Fangda Group Co., Ltd. 2014 Annual Report


Huang Yaying         Guangdong Guoxin Law Firm                Lawyer       May 1, 2009                                 No

                 Shenzhen Zhongzhuang Construction          Independent
Huang Yaying                                                               May 1, 2013                                Yes
                         Group Stock Co., Ltd.                director

                                                            Independent     October 1,
Huang Yaying       Han's Laser Technology Co., Ltd.                                                                   Yes
                                                              director          2013

                                                            Independent    December 1,
Huang Yaying       Shenzhen Airport Stock Co., Ltd.                                                                   Yes
                                                              director          2014

                                                             Standing
                General Development Research Institute
  Guo Wanda                                                   deputy       July 1, 2007                               Yes
                             (China Shenzhen)
                                                             president

               Shenzhen Baode Technology Group Stock Independent
  Guo Wanda                                                                June 6, 2008                               Yes
                                 Co., Ltd.                    director

                 Shenzhen Meiyingseng Environmental         Independent September 21,          September 22,
  Guo Wanda                                                                                                           Yes
                    Protection Technology Co., Ltd.           director          2010               2016

                 Sun Yat-Sen University Management                          October 1,
    Lin Bin                                                  Professor                                                Yes
                                Academy                                         1998

                Guangzhou Baiyun International Airport      Independent
    Lin Bin                                                               June 27, 2013        June 26, 2016          Yes
                                 Co., Ltd.                    director

                                                            Independent
    Lin Bin      Guangzhou Pearl River Beer Co., Ltd.                     June 19, 2012                               Yes
                                                              director

Office
               The above-mentioned three are independent directors of the Company.
description


3. Annual Remunerations of the Directors, Supervisors and Senior Executives

Decision making procedures, basis and actual payment of remunerations of the Directors, Supervisors and Senior
Executives
1. Remuneration schemes for directors and supervisors are proposed by the Remuneration and Assessment
Committee of the Board, and implemented upon approval of the Board and the Shareholders’ Meetings; the
remuneration schemes for executives are approved and implemented by the Board.
Remuneration for directors and supervisors are decided by the shareholders’ meeting. Remunerations for
executives are composed of wages and performance bonus as decided by the Board.
Payment on monthly basis


Remunerations of the Directors, Supervisors and Senior Executives of the Company During the reporting period
                                                                                                                    In RMB10,000
                                                                                                          Total        Unpaid
                                                                                       Total         remuneration    remuneration
    Name          Position            Sex             Age          Job status
                                                                                  remuneration         from the       during the
                                                                                                     shareholding     reporting


                                                                                                                                    51
                                                                      China Fangda Group Co., Ltd. 2014 Annual Report


                                                                                          party          period

    Xiong        Chairman,
                                 M             57         In office       176.33            0            176.33
   Jianming       president

    Wang        Director, vice
                                 M             57         In office        90.92            0            90.92
  Shengguo        president

Xiong Jianwei     Director       M             46         In office        78.55            0            78.55

                  Director,
Zhou Zhigang secretary of the    M             52         In office        63.84            0            63.84
                    Board

                 Independent
Huang Yaying                     M             52         In office          8              0              8
                   director

                 Independent
  Guo Wanda                      M             49         In office          6              0              6
                   director

                 Independent
   Lin Bin                       M             52         In office          6              0              6
                   director

                 Supervisory
                 Committee
  Zhen Hua                       F             55         In office         53.9            0             53.9
                   meeting
                  convener

Yin Changjian    Supervisor      M             46         In office        31.54            0            31.54

 Zen Xiaowu      Supervisor      M             45         In office        66.46            0            66.46

                Vice president
  Lin Kebin                      M             37         In office        78.76            0            78.76
                  and CFO

 Wei Yuexing    Vice president   M             46         In office        75.56            0            75.56

                 Independent
 Guo Jinlong                     M             53        Resigned            2              0              2
                   director

                 Independent
Shao Hanqing                     F             76        Resigned            2              0              2
                   director

  Cao Naisi      Supervisor      F             36        Resigned          41.61            0            41.61

  Yu Guoan       Supervisor      M             55        Resigned           0.75            0             0.75

        Yang
                Vice president   M             61        Resigned          43.75            0            43.75
  Xioazhuan

Total                 --         --            --            --           825.97            0            825.97

Equity incentive programs provided for the Directors, Supervisors and Senior Executives of the Company during
the reporting period




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                                                                                 China Fangda Group Co., Ltd. 2014 Annual Report


4. Changes in the Directors, Supervisors and Senior Executives

    Name                      Job                   Type             Date                              Reason

Xiong Jianming       Chairman, president           Elected       March 31, 2014                        Expired

Wang Shengguo      Director, vice president        Elected       March 31, 2014                        Expired

 Xiong Jianwei             Director                Elected       March 31, 2014                        Expired

                   Director, secretary of the
 Zhou Zhigang                                      Elected       March 31, 2014                        Expired
                            Board

 Huang Yaying        Independent director          Elected       March 31, 2014                        Expired

  Guo Wanda          Independent director          Elected       March 31, 2014                        Expired

    Lin Bin          Independent director          Elected       March 31, 2014                        Expired

                   Supervisory Committee
   Zhen Hua                                        Elected       March 31, 2014                        Expired
                      meeting convener

 Yin Changjian            Supervisor               Elected       March 31, 2014                        Expired

  Zen Xiaowu              Supervisor               Elected       March 31, 2014                        Expired

  Lin Kebin        Vice president and CFO         Engaged        March 31, 2014                        Expired

 Wei Yuexing            Vice president            Engaged        March 31, 2014                        Expired

  Guo Jinlong        Independent director       Leaving office   March 31, 2014                        Expired

 Shao Hanqing        Independent director       Leaving office   March 31, 2014                        Expired

  Yu Guoan                Supervisor            Leaving office   March 31, 2014                        Expired

   Cao Naisi              Supervisor            Leaving office   March 31, 2014                        Expired

Yang Xioazhuan          Vice president          Leaving office   March 31, 2014                        Expired


5. Core technical team or personnel have remained unchanged in the report period.

6. Employees

                                                Employees (by December 31, 2014)
                                         Fangda Group (parent)     Fangda Jianke       Other                Total
                                                                  (main subsidiary) subsidiaries
           Number of employees                        72                1,588                1359          3,019
               in position
          Retired employees on                        0                     0                  0                0
         the Company’s expense
                 Categories of           Fangda Group (parent)     Fangda Jianke       Other                Total
                  professions                                     (main subsidiary) subsidiaries
                  Production                          0                  552                 824            1376
               Sales & Marketing                      0                     63                99            162


                                                                                                                             53
                                                                     China Fangda Group Co., Ltd. 2014 Annual Report


              Technicians                  0                   258               137            395
         Finance & Accounting              8                    42                28             78
               Executive                  64                   673               271            1008
         Categories of education Fangda Group (parent)    Fangda Jianke       Other             Total
                                                         (main subsidiary) subsidiaries
          High school or below            22                   677               1040           1739
            College diploma                9                   299               146            454
                Bachelor                  32                   597               164            793
            Master’s degree               8                    14                 9             31
            Doctor’s degree               1                    1                  0              2




Staff remuneration policy: The Company’s staff remuneration comprises post wage, performance wage, allowance


                                                                                                                 54
                                                                        China Fangda Group Co., Ltd. 2014 Annual Report


and annual bonus. The Company has set up an economic responsibility assessment system according to the
annual operation target and responsibility indicators for all departments. The performance wage is determined by
the economic indicators, management indicators, optimization indicators and internal control. The annual bonus
is determined by the Company's annual profit and fulfillment of targets set for various departments. The staff
remuneration and welfare will be adjusted according to the Company’s business operation and changes in the
local standard of living and price index.

Staff training plan: The Company has paid continuous attention to training and development of the staff and
introduces innovative learning as part of the long-term strategy. We provide training programs through different
channels and in different fields for different employees will help them fulfill their works, including new staff
training, on-the-job training, operation and management training programs. These programs have largely elevated
capabilities of the staff and underpin the success of the Company.

In the report period, the total of outsourced labor services amounted to 8.56 million hours, with a total income of
RMB256.69 million.




                                                                                                                    55
                                                                       China Fangda Group Co., Ltd. 2014 Annual Report




                                 VIII Corporation Governance

1. Overview

      During the report period, the Company strictly complied with the Company Law, Securities Law,
Governance Standards for Listed Companies, Shenzhen Stock Exchange Share Listing Rules, Operation
Regulations for Listed Companies in the Main Board of Shenzhen Stock Exchange, continued to improve the
legal person governance structure and has formulated a series of internal management systems covering various
aspects. The Company has set up a comprehensive and effective internal control system in important decision
making, related transaction decision making, financial management, HR management, administration, purchase,
production and sales management, confidentiality and information disclosure.
     By the end of the reporting period, the corporate governance complies with the Chinese laws and
requirements regarding corporate governance of listed companies issued by CSRC. The corporate governance
complies with the Company Law and related requirements of CSRC.


Implementation of corporate governance activities and establishment and implementation of insider registration
and management system
     1. Revision of corporate governance
     (1) According to the Company Law (2014 Revised), Guidelines for Articles of Association for Listed
Companies (2014 Revised), the Company revised the Articles of Associations, Shareholders’ Meeting Criteria,
Working Regulations of the Board of Directors and Regulations on External Investment, which were approved at
the 2nd extraordinary shareholders’ meeting in 2014 and 1st extraordinary shareholders’ meeting in 2015. The
announcements were published on China Securities Journal, Shanghai Securities Daily, Securities Times, HKCD
and www.cninfo.com.cn on September 12, 2014 and January 14, 2015.
     (2) To regulate cash dividend distribution and improve distribution transparency, according to CSRC [2013]
No.43 Cash Dividend of Listed Companies, the Company revised profit distribution policies and terms in the
Articles of Associations and formulated the Shareholder Return Plan for 2015-2017, which were approved at the
8th meeting of the 7th Board of Directors and 1st extraordinary shareholders’ meeting in 2015.
     2. Implementing cash dividend distribution plan
     Approved at the Shareholders' Meeting 2013 held on March 31, 2014, the Company's profit distribution plan
for 2013 is distributing a cash dividend of RMB0.30 (tax-included) for every ten shares of all the shareholders
based on a total of 756,909,905 shares on December 31, 2013. The 2013 Share Equity Distribution
Implementation Announcement was published on China Securities Journal, Shanghai Securities Daily, Securities
Times, HKCD and www.cninfo.com.cn on April 8, 2014. 3. Establishing and implementing insider registration
management system
   The Company has revised the “Information Insider Registration Scheme” according to the requirement of
CSRC in February 2012. The revised Information Insider Registration Scheme is published on
www.cninfo.com.cn.


     No situation was found in the report period that any of the insiders had been trading the Company’s shares
taking advantages of the material information they could get access to, neither informed by the supervisory

                                                                                                                   56
                                                                                        China Fangda Group Co., Ltd. 2014 Annual Report


authorities regarding inspection or correction notice.

2. Annual and extraordinary shareholder meetings held during the report period

1. Annual shareholder meeting during the report period


                                                                                    Resoluti     Date of     Index for information
  Meeting       Date                             Proposal
                                                                                         on     disclosure         disclosure

                          (1) Review The Board of Directors’ Work Report
                          2013; (2) review the Supervisory Committee’s Work
                          Report 2013; (3) review the Annual Report 2013 and
                          the Summary; (4) review the Financial Settlement
                                                                                                             The announcement of
                          Report 2013; (5) review the proposal of dividend
                                                                                                             The Resolutions of
                          distribution for year 2013; (6) review the proposal
                                                                                                             Shareholders’ Annual
                          about applying for integrated bank credit; (special       All the
                                                                                                             Meeting 2013 was
2013 Annual               resolution); (7) review the proposal of providing         proposal
              March 31,                                                                        April 1,      published on China
Shareholder               guarantee for the company’s fully-owned subsidiary; s are
              2014                                                                             2014          Securities Journal,
Meeting                   (special resolution); (8) review the proposal of          approve
                                                                                                             Shanghai Securities
                          engaging the auditor for 2014; (9) review the             d
                                                                                                             Daily, Securities
                          remuneration plan for the 7th Board of Directors
                                                                                                             Times, HKCD and
                          (including independent directors) and supervisory
                                                                                                             www.cninfo.com.cn
                          committee; (10) review the proposal of re-electing the
                          Board of Directors of the Company; (11) review the
                          proposal of re-electing the Supervisory Committee of
                          the Company


2. Extraordinary shareholder meetings during the report period


                                                                                    Resoluti     Date of         Index for information
  Meeting       Date                             Proposal
                                                                                         on     disclosure             disclosure

                          1. Proposal on providing guarantee for the Company’s                              The announcement of 1st
1st                       fully-owned subsidiaries.(special resolution) 2. The      All the                  Provisional Shareholders’
Provisional               proposal of approving Shenzhen Fangda Property            proposal                 Meeting 2014 was published
              January                                                                          January
Shareholder               Development Co., Ltd.’s application for integrated       s are                    on China Securities Journal,
              24, 2014                                                                         25, 2014
s’ Meeting               bank credit and providing of guarantee. (Special          approve                  Shanghai Securities Daily,
2014                      resolution) 3. Proposal of Investment in Fangda Town d                             Securities Times, HKCD and
                          renovation project.                                                                www.cninfo.com.cn.

                          1. The proposal about applying for integrated bank                                 The announcement of 2nd
2nd                                                                                 All the
                          credit; (special resolution) 2. The proposal of                                    Provisional Shareholders’
Provisional                                                                         proposal
              September providing guarantee for controlled company; (special                   September Meeting 2014 was published
Shareholder                                                                         s are
              11, 2014    resolution) 3. The proposal on revising the Articles of              12, 2014      on China Securities Journal,
s’ Meeting                                                                         approve
                          Association (special resolution); 4. The proposal of                               Shanghai Securities Daily,
2014                                                                                d
                          Revising Shareholders' Meeting Criteria 5. The                                     Securities Times, HKCD and


                                                                                                                                            57
                                                                                    China Fangda Group Co., Ltd. 2014 Annual Report


                          proposal of Revising Working Regulations of the                             www.cninfo.com.cn.
                          Board of Directors.


3. No shareholder of preferred shares with recovered votes convened extraordinary shareholders meeting

3. Performance of independent directors during the report period

1. Independent directors presenting of board meetings and shareholders meetings in the report period


                                          Independent directors’ presenting of board meetings

                         Time of board                                                                             Absent for two
Name of independent                           Presented        Presented by       Presented by
                        meetings should                                                              Absent         consecutive
       director                               personally          telecom            proxy
                         have attended                                                                               meetings

   Huang Yaying                12                  9                 3                 0                0                 No

     Guo Wanda                 8                   4                 2                 2                0                 No

       Lin Bin                 8                   5                 2                 1                0                 No

   Shao Hanqing                4                   2                 1                 1                0                 No

    Guo Jinlong                4                   2                 1                 1                0                 No

Time of presence by independent
                                                                                       5
directors at shareholders’ meetings

No independent director was absent from two consecutive meetings of the Board of Director in the report period.

2. Independent directors made no objection on related issued of the Company in the report period.

3. Other statement for performance of independent directors

Adoption of suggestion proposed by independent directors
√ Yes □ No
Statement for suggestion adopted or not by the Company
    (1) During the report period, the Company’s independent directors have paid attention to the Company’s
operation and performed their duties independent in accordance with applicable laws, regulations and Articles of
Association of the Company and have proposed many professional suggestions for improving the Company’s
system and routine operation decision-making. During the report period, independent directors have made
independent and just opinion on issues that need independent directors’ opinions, playing positive roles in
improving the Company’s supervisory system and protecting the rights and interests of the Company and
shareholders.
     (2) Independent opinions issued in 2014
                                                                                                               Type of          Disclosure of
                  Time of independent
   Name                                                             Issue involved                            independent      the independent
                        opinion
                                                                                                                opinion           opinion
   Shao             March 7, 2014             Use of the Company’s fund by controlling shareholder            In favor              Yes


                                                                                                                                    58
                                                                         China Fangda Group Co., Ltd. 2014 Annual Report


 Hanqing                            and other affiliates and guarantee made by the Company
   Guo                              Internal control self evaluation report
  Jinlong                           Independent opinion on the profit distribution plan for
  Huang                             2013
  Yaying                            Independent opinion of engaging the auditor for 2014
                                    Independent opinion on remuneration of directors and
                                    senior executives in 2013
                                    Announcement on Using Self-Owned Idle Fund for
                                    Securities Investment
                                    Independent opinions on re-election of the Board of
                                    Directors and annual remuneration for directors and
                                    supervisors
                March 31, 2014      Independent opinions on employing senior management
                                    Use of fund and external guarantees made controlling
                August 21, 2014
                                    shareholder and other affiliates in the first half of 2014
                                    Independent opinions on private share issuance
  Huang
                                    Independent opinions on Related Transactions of Private
  Yaying,
                                    Share Issuance.
   Guo
                                    Opinions on the utilization report of previously raised
Wanda, Lin
              December 23, 2014     capital
    Bin
                                    Opinions on revising the Articles of Association of
                                    China Fangda Group Co., Ltd.
                                    Independent opinions on the Shareholders’ Rewarding
                                    Plan for the next three years


4. Performance of specific committees under the Board

       (1) Performance of the Development Strategy Committee
      During the report period, the Development Strategy Committee of the Company has performed its duties in
accordance with the Working Regulations for Development Strategy Committee and played its role in the
decision-making process of the Company. Two meetings were convened and details are disclosed as follows:
      1. On March 7, 2014, the Company held the 6th meeting of the 6th Development Strategy Commission to
listen to the report on production and operation and production and operation plan for 2013 and 2014.
       2. On August 22, 2014, the 1st meeting of the Development Strategy Committee of the 7th term of the Board
was held to view the Company’s production and operation in the first half of 2014 and studied the fulfillment of
the business plan in the first half of the year and places to be improved in the second half.
       (2) Performance of the Auditing Committee
       During the report period, five Auditing Committee meetings are held to review issues including the
arrangement of audit, regular financial reports, engaging the CFA, and use of the fund raised. Details of the
meetings are disclosed as follows:
       1. On March 3, 2014, the 15th meeting of the Auditing Committee of the 6th term of the Board was held to
review the financial statements with the initial opinion issued by the CFA for 2013 and approved the auditor
report issued by the CFA. After the CFA issued to final auditor’s opinion, the Auditing Committee submitted the

                                                                                                                     59
                                                                      China Fangda Group Co., Ltd. 2014 Annual Report


resolution on the annual financial statements to the Board and issued the summary report on the auditing of the
CFA for this year.

5. Performance of Supervisory Committee

Risks for the Company discovered by the Supervisory Committee
□ Yes √ No
No disagreement with supervisory issues by the Supervisory Committee during the report period.

6. Independence of the Company from the controlling shareholder in aspects of businesses,
personnel, assets, organizations, and accounting

     The Company is completely separated from the controlling shareholder in aspects of businesses, personnel,
assets, organizations and accounting. The Company has its own completed businesses and capacity of independent
business operation.
   In the aspect of business: the Company has its own purchasing, production, sales, and customer service system
which performing independently. There is not any material related transactions occurred with the controlling
shareholders.
   In personnel: The labor management, personnel and salary management are operated independently from the
controlling shareholder. The senior managements take salaries from the Company and none of them takes senior
management position in the controlling party.
   In assets: The Company owns its production, supplementary production system and accessory equipments
independently, and possesses its own industrial properties, non-patent technologies, and trademark.
    In organization: The production and business operation, executive management, and department setting are
completely independent from the controlling shareholder. No situation of combined office exists. The Company
adjusts its organizing structure only for its own practical requirement of development and management.
    In accounting: The company has its own independent accounting and auditing division, established
independent and completed accounting system and management rules, has its own bank account, and exercise its
liability of taxation independently.

7. No horizontal competition

8. Assessment and motivation of senior executives

     The Company has implemented a remuneration system that combines post wage and performance bonus. The
wages and bonus are determined by on the assessment of senior executives’ innovation capabilities, general
quality, performance, fulfillment of profit and payment collection targets in the Implementation Regulations for
2014 Supervisory and Management Department Target Management and Assessment and Implementation
Regulations for 2014 Subordinate Unit Assessment.




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                                                                                    China Fangda Group Co., Ltd. 2014 Annual Report




                                                 IX Internal Control

1. Internal Control Construction

      In 2014, the Company has established a solid internal control system and examine key control activities in
accordance with the Enterprise Internal Control Regulations and Guidelines and Internal Control Evaluation
Guide issued by the Ministry of Finance. Moreover, the Company has urged subsidiaries and branches to establish
and improve the internal control system. The Company has inspected the internal control on business
management, capital management, assets management, investment management, information management and
HR management and make correction on key internal control points to ensure implementation of the internal
control system. Moreover, the Company has accelerated establishment and improvement of internal control
system among its subsidiaries and branches to formulate relate documents. In the report period, the Company
has established internal control system to cover related business and affairs. The existing system is complete,
reasonable and effective with enforceable documents, which will help the Company prevent risks in decision
making and management.

2. Boards statement on internal control responsibility

     The Company has established a comprehensive and effective internal control system and reviews its
effectiveness. It is the responsibility of the Board of Directors to disclose the internal control evaluation report.

3. Basis for establishment of the internal financial statement control

     The financial report internal control system is built based on the Company Law, Enterprise Accounting
Principles, Operation Regulations for Listed Companies in the Main Board of Shenzhen Stock Exchange and
Basic Regulations on Enterprise Internal Control and other applicable laws and regulations.

4. Internal control valuation report

                Major internal control defects discovered in the report period in the internal control evaluation report

No major defect is found in the report period

Date of disclosure of the internal
                                      March 27, 2015
control evaluation report

Disclosure of the internal control
                                      The 2014 Internal Control Evaluation Report will be disclosed on www.cninfo.com.cn.
evaluation report


5. Internal Control Audit or Verification Report

                                            Comments in the internal control audit report

We believe that China Fangda Group has maintained effective internal control on financial reports according to Basic Regulations



                                                                                                                                   61
                                                                                  China Fangda Group Co., Ltd. 2014 Annual Report


on Enterprise Internal Control and related regulations on December 31, 2014.
Date of disclosure of the internal
                                       March 27, 2015
control audit report

Source of disclosure of the internal
                                       The 2014 Internal Control Audit Report will be disclosed on www.cninfo.com.cn.
control audit report

Non-standard internal control audit report by the CFA
Consistency between the internal control audit report and self-evaluation report

6. Establishment and implementation of the Retrospective Rules of Material False
Information in Annual Report

     The Company has adopted the Retrospective Rules of Material False Information in Annual Report. It will
contribute to recognize and process material false in the procedures. The Company has been implementing the
regulations diligently and no such material false or omission was found in the report period.




                                                                                                                              62
                                                                           China Fangda Group Co., Ltd. 2014 Annual Report




                                        X Financial Statements

1. Auditors report

Type                                                       Standard opinion auditor’s report

Issued on                                                  March 25, 2015

Auditor                                                    Grant Thornton (special general partner)

Report No.                                                 致同审字(2015)第 350ZA0071 号

CPA names                                                  Lin Kaiqin and Li Chunmei


                                                  Auditors report
                                                                                   致同审字(2015)第350ZA0071号

To the shareholders of China Fangda Group Co., Ltd.:

      We have audited the Financial Statements of China Fangda Group Co., Ltd. (“Fangda Group”) attached
hereafter, including the Balance Sheet and Consolidated Balance Sheet ended December 31, 2014 and the Income
Statement, Consolidated Income Statement, Cash Flow Statement, Consolidated Cash Flow Statement, Statement
on Change of Shareholders’ Equity, Consolidated Statement on Change of Shareholders’ Equity of the year 2014,
as well as the Notes to the Financial Statements.

       1. Executives responsibilities on the Financial Statements

      Preparing of the Financial Statements according to Enterprise Accounting Standard is the responsibility of
the management of the Company. This responsibility includes: (1) to prepare the financial statements according to
the accounting standard, and ensure its fair reflection of business position; (2) to design, implement and maintain
the internal control system related to producing of the Financial Statements, to prevent the Financial Statements
from major false presentation due to cheating or error.

       2. Responsibilities of the CPA
      Our responsibility is to express an auditing opinion on the financial statements basing on our audit. We
carried out the auditing works with compliance to Chinese CPA Auditing Standard, which requires us to plan
and implement our works on the basis of professional ethic standards, and obtain reasonable guarantee that the
Financial Statements are free of major false statements.

      An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the
risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk
assessments, we consider the internal control relevant to the entity’s preparation of financial statements in order to
design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the
appropriateness of the accounting polices used and the reasonableness of the accounting estimates made by
management, as well as evaluating the overall presentation of the financial statements.

       We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our


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                                                                            China Fangda Group Co., Ltd. 2014 Annual Report


audit opinion.

      3. Auditors Opinions

      We believe that Fangda Group has been following with the Enterprise Accounting Standard in preparing of
the Financial Statements. The Financial Statements is reflecting, in all important aspects, the financial situation of
Fangda Group as of December 31, 2014, and the business performance and cash flow of year 2014.




Grand Thornton CPA                                                   CPA China     Lin Kaiqin
(limited liability partnership)

                                                                     CPA China Li Chunmei



Beijing, China                                        March 25, 2015



2. Financial statements

Unit for statements in notes to financial statements: RMB yuan

1. Consolidated Balance Sheet

Prepared by: China Fangda Group Co., Ltd.
                                                                                                                    In RMB
                 Items                           Closing balance                              Ending balance

Current asset:

      Monetary capital                                        212,430,798.87                               333,876,921.97

      Settlement provision

      Outgoing call loan

      Financial assets measured at fair
value with variations accounted into                               13,410,790.00
current income account

     Derivative financial assets

      Notes receivable                                             83,325,725.70                               21,898,770.43

      Account receivable                                     1,105,242,251.46                              898,780,981.93

      Prepayment                                                   29,234,231.49                               28,364,016.21




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                                                     China Fangda Group Co., Ltd. 2014 Annual Report


      Insurance receivable

      Reinsurance receivable

      Provisions of Reinsurance
contracts receivable

      Interest receivable                                                                36,387.50

      Dividend receivable

      Other receivables at the end of
                                           48,950,647.67                             66,298,730.17
the period

      Repurchasing of financial assets

      Inventory                           982,441,187.05                            428,537,851.82

      Assets held for sales

      Non-current assets due in 1 year

      Other current assets                234,986,107.72

Total current assets                     2,710,021,739.96                         1,777,793,660.03

Non-current assets:

     Disburse of loans

      Sellable financial assets

      Investment held until mature

      Long-term receivable

      Long-term share equity
                                           11,048,660.43                              9,994,565.55
investment

      Investment real estate              226,279,523.39                            195,249,069.13

      Fixed assets                        489,714,684.63                            462,930,269.98

      Construction in process                 341,749.17                                940,841.00

      Engineering materials

      Disposal of fixed assets                 26,918.21                                177,298.11

      Productive biological assets

      Gas & petrol

      Intangible assets                    98,947,331.09                             91,527,650.52

      R&D expense

      Goodwill                             26,279,395.89

      Long-term amortizable expenses         4,119,362.63                             3,799,354.79

      Deferred income tax assets           52,616,656.38                             41,166,043.56

      Other non-current assets             43,323,878.63                             15,978,789.90

Total of non-current assets               952,698,160.45                            821,763,882.54


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                                                         China Fangda Group Co., Ltd. 2014 Annual Report


Total of assets                              3,662,719,900.41                         2,599,557,542.57

Current liabilities

         Short-term loans                    1,100,000,000.00                           369,000,000.00

         Loans from Central Bank

         Deposit received and held for
others

         Call loan received

         Financial liabilities measured at
fair value with variations accounted into
current income account

       Derivative financial liabilities

         Notes payable                        227,266,485.57                            188,570,850.63

         Account payable                      685,108,346.73                            489,216,140.32

         Prepayment received                  122,285,231.14                            168,386,251.94

         Selling of repurchased financial
assets

         Fees and commissions payable

         Employees’ wage payable              41,703,314.26                             30,182,851.80

         Taxes payable                         58,696,926.25                             44,839,947.77

         Interest payable                        2,055,911.11                               689,153.75

         Dividend payable

         Other payables                        47,425,682.44                             41,687,580.72

         Reinsurance fee payable

         Insurance contract provision

         Entrusted trading of securities

         Entrusted selling of securities

         Liabilities held for sales

         Non-current liabilities due in 1
                                                6,000,000.00
year

         Other current liabilities

Total current liabilities                    2,290,541,897.50                         1,332,572,776.93

Non-current liabilities:

         Long-term loans

         Bond payable

          Including: preferred share



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                                                                            China Fangda Group Co., Ltd. 2014 Annual Report


                Perpetual capital
securities

       Long-term payable                                            6,000,000.00

       Employees’ wage payable

       Special payables

       Anticipated liabilities                                      5,859,045.98

       Deferred earning                                            10,049,892.04                               10,255,823.93

       Deferred income tax liabilities                             49,734,436.90                               40,656,763.97

       Other non-current liabilities

Total of non-current liabilities                                   71,643,374.92                               50,912,587.90

Total liabilities                                            2,362,185,272.42                            1,383,485,364.83

Owner’s equity:

       Share capital                                          756,909,905.00                               756,909,905.00

     Other interest tools

        Including: preferred share

                Perpetual capital
securities

       Capital reserves                                            79,099,220.38                               79,099,220.38

       Less: Shares in stock

       Other miscellaneous income                                     91,831.63                                   91,831.63

       Special reserves

       Surplus reserves                                            48,842,080.76                               46,389,142.21

       Common risk provisions

       Retained profit                                        349,987,825.69                               278,149,631.63

Total of owner’s equity belong to the
                                                             1,234,930,863.46                            1,160,639,730.85
parent company

       Minor shareholders’ equity                                 65,603,764.53                               55,432,446.89

Total of owners’ equity                                     1,300,534,627.99                            1,216,072,177.74

Total liabilities and shareholders’ equity                  3,662,719,900.41                            2,599,557,542.57


Legal representative: Xiong Jianming          CFO: Lin Kebing                 Accounting Manager: Chen Yonggang

2. Balance Sheet of the Parent Company

                                                                                                                     In RMB

                    Items                        Closing balance                              Ending balance



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                                                      China Fangda Group Co., Ltd. 2014 Annual Report


Current asset:

      Monetary capital                      22,256,065.49                             68,223,808.76

      Financial assets measured at fair
value with variations accounted into
current income account

     Derivative financial assets

      Notes receivable

      Account receivable                       511,660.60                                604,459.49

      Prepayment                                50,903.86                                218,984.07

      Interest receivable

      Dividend receivable                   28,639,627.17                             39,356,000.00

      Other receivables at the end of
                                           254,604,163.79                            571,620,659.73
the period

      Inventory

      Assets held for sales

      Non-current assets due in 1 year

      Other current assets                  31,005,620.01

Total current assets                       337,068,040.92                            680,023,912.05

Non-current assets:

      Sellable financial assets

      Investment held until mature

      Long-term receivable

      Long-term share equity
                                          1,130,674,559.01                           719,728,311.13
investment

      Investment real estate               198,513,586.15                            174,778,756.62

      Fixed assets                          60,145,112.89                             48,117,849.19

      Construction in process                                                            914,126.00

      Engineering materials

      Disposal of fixed assets

      Productive biological assets

      Gas & petrol

      Intangible assets                      2,256,575.64                              1,351,845.98

      R&D expense

      Goodwill

      Long-term amortizable expenses            81,367.47                                 50,314.43



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                                                        China Fangda Group Co., Ltd. 2014 Annual Report


        Deferred income tax assets            22,623,560.72                             12,342,430.37

        Other non-current assets             220,000,000.00

Total of non-current assets                 1,634,294,761.88                           957,283,633.72

Total of assets                             1,971,362,802.80                         1,637,307,545.77

Current liabilities

        Short-term loans                     350,000,000.00                            104,000,000.00

        Financial liabilities measured at
fair value with variations accounted into
current income account

       Derivative financial liabilities

        Notes payable

        Account payable                          606,941.85                              1,849,090.36

        Prepayment received                      832,772.45                                798,586.70

        Employees’ wage payable               1,956,875.76                              1,881,681.86

        Taxes payable                            567,424.56                                260,761.30

        Interest payable                         659,266.67                                193,930.00

        Dividend payable

        Other payables                       270,281,330.40                            192,765,065.68

        Liabilities held for sales

        Non-current liabilities due in 1
year

        Other current liabilities

Total current liabilities                    624,904,611.69                            301,749,115.90

Non-current liabilities:

        Long-term loans

        Bond payable

         Including: preferred share

                  Perpetual capital
securities

        Long-term payable

        Employees’ wage payable

        Special payables

        Anticipated liabilities

        Deferred earning

        Deferred income tax liabilities       97,693,047.19                             88,615,374.26



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                                                                                 China Fangda Group Co., Ltd. 2014 Annual Report


       Other non-current liabilities

Total of non-current liabilities                                       97,693,047.19                              88,615,374.26

Total liabilities                                                     722,597,658.88                            390,364,490.16

Owner’s equity:

       Share capital                                                  756,909,905.00                            756,909,905.00

     Other interest tools

        Including: preferred share

                Perpetual capital
securities

       Capital reserves                                                38,598,565.00                              38,598,565.00

       Less: Shares in stock

       Other miscellaneous income                                          91,831.63                                  91,831.63

       Special reserves

       Surplus reserves                                                48,842,080.76                              46,389,142.21

       Retained profit                                                404,322,761.53                             404,953,611.77

Total of owners’ equity                                            1,248,765,143.92                           1,246,943,055.61

Total liabilities and shareholders’ equity                         1,971,362,802.80                           1,637,307,545.77


3. Consolidated Income Statement

                                                                                                                           In RMB

                    Items                     Amount occurred in the current period          Occurred in previous period

1. Total revenue                                                    1,938,324,435.51                           1,747,620,845.74

       Incl. Business income                                        1,938,324,435.51                           1,747,620,845.74

               Interest income

               Insurance fee earned

               Fee and commission
received

2. Total business cost                                              1,867,564,531.44                           1,670,170,512.18

       Incl. Business cost                                          1,590,836,786.02                           1,425,369,204.42

               Interest expense

               Fee and commission paid

               Insurance discharge
payment

               Net claim amount paid

               Net insurance policy


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                                                          China Fangda Group Co., Ltd. 2014 Annual Report


reserves provided

                Insurance policy dividend
paid

                Reinsurance expenses

                Business tax and surcharge        22,855,639.99                           23,272,313.84

                Sales expense                     44,684,306.70                           37,383,041.60

                Administrative expense           152,584,713.60                          127,254,247.26

                Financial expenses                29,165,058.80                           23,108,586.39

                Asset impairment loss             27,438,026.33                           33,783,118.67

        Plus: gains from change of fair
                                                  32,044,747.10                           16,647,859.74
value (“-“ for loss)

             Investment gains (“-“ for loss)     1,720,693.98                              300,866.92

             Incl. Investment gains from
                                                   1,054,094.88                                -5,434.45
affiliates and joint ventures

             Exchange gains (“-“ for loss)

3. Operational profit (“-“ for loss)           104,525,345.15                           94,399,060.22

        Plus: non-operational income              16,281,459.18                            7,595,856.24

           Including: Gain/loss of
                                                   3,162,999.40                              154,552.62
non-current assets

        Less: non-operational expenditure         10,623,712.10                            1,344,375.30

             Incl. Loss from disposal of
                                                   1,709,152.13                              617,106.70
non-current assets

4. Gross profit (“-“ for loss)                 110,183,092.23                          100,650,541.16

        Less: Income tax expenses                 17,493,747.57                           19,249,761.60

5. Net profit (“-“ for net loss)                92,689,344.66                           81,400,779.56

        Net profit attributable to the
                                                  96,998,429.76                           85,676,863.78
owners of parent company

        Minor shareholders’ equity               -4,309,085.10                            -4,276,084.22

6. After-tax net of other miscellaneous
                                                                                           -1,108,815.63
income

  After-tax net of other miscellaneous
                                                                                           -1,108,815.63
income attributed to parent owner

       (1) Other comprehensive gain
cannot be classified into gain/loss

              1. Changes in net liabilities
or net assets of re-measured defined
benefit program


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                                                                                   China Fangda Group Co., Ltd. 2014 Annual Report


             2. Share enjoyed in other
miscellaneous income cannot be
classified into gain/loss under the equity
method

     (2) Other comprehensive gain that
                                                                                                                    -1,108,815.63
will be classified into gain/loss

             1. Share enjoyed in other
miscellaneous income that will be
classified into gain/loss under the equity
method

             2. Gain/loss caused by
changes in the fair value of financial asset
for sales

             3 Gain/loss caused by
reclassification of held-to-maturity
investment to financial asset for sales

             4. Effective part of cash flow
hedging gain/loss

             (5) Translation difference of
foreign exchange statement

               6. Others                                                                                            -1,108,815.63

  After-tax net of other miscellaneous
income attributed to minority
shareholders

7. Total of misc. incomes                                                92,689,344.66                              80,291,963.93

      Total of misc. incomes attributable
                                                                         96,998,429.76                              84,568,048.15
to the owners of the parent company

      Total misc gains attributable to the
                                                                          -4,309,085.10                             -4,276,084.22
minor shareholders

8. Earnings per share:

      (1) Basic earnings per share                                                 0.13                                       0.11

      (2) Diluted earnings per share                                               0.13                                       0.11


Legal representative: Xiong Jianming           CFO: Lin Kebing           Accounting Manager: Chen Yonggang


4. Income Statement of the Parent Company

                                                                                                                             In RMB

                  Items                        Amount occurred in the current period           Occurred in previous period



                                                                                                                                 72
                                                        China Fangda Group Co., Ltd. 2014 Annual Report


1. Turnover                                    29,609,371.13                            45,659,921.07

         Less: Operation cost                   5,669,281.13                            10,980,932.52

              Business tax and surcharge        2,420,213.38                             3,415,837.54

              Sales expense

              Administrative expense           24,285,538.55                            22,773,847.97

              Financial expenses               13,398,214.90                            10,054,285.40

              Asset impairment loss            27,045,993.77                            -3,228,252.95

         Plus: gains from change of fair
                                               34,897,632.10                            16,647,859.74
value (“-“ for loss)

              Investment gains (“-“ for
                                               29,805,392.25                                 -5,434.45
loss)

              Incl. Investment gains from
                                                1,054,094.88                                 -5,434.45
affiliates and joint ventures

2. Operational profit (“-“ for loss)         21,493,153.75                            18,305,695.88

         Plus: non-operational income           2,441,486.71                           193,478,232.51

            Incl. Gain from disposal of
                                                  22,719.41                                  4,918.81
non-current assets

         Less: non-operational expenditure       608,712.42                                442,064.12

              Incl. Loss from disposal of
                                                 207,212.42                                 37,992.07
non-current assets

3. Gross profit (“-“ for loss)               23,325,928.04                           211,341,864.27

         Less: Income tax expenses             -1,203,457.42                            52,395,871.61

4. Net profit (“-“ for net loss)             24,529,385.46                           158,945,992.66

5. After-tax net of other miscellaneous
                                                                                        -1,108,815.63
income

        (1) Other comprehensive gain
cannot be classified into gain/loss

               1. Changes in net liabilities
or net assets of re-measured defined
benefit program

               2. Share enjoyed in other
miscellaneous income cannot be
classified into gain/loss under the equity
method

        (2) Other comprehensive gain that
                                                                                        -1,108,815.63
will be classified into gain/loss

               1. Share enjoyed in other



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                                                                                 China Fangda Group Co., Ltd. 2014 Annual Report


miscellaneous income that will be
classified into gain/loss under the equity
method

              2. Gain/loss caused by
changes in the fair value of financial
asset for sale

              (3) Gain/loss caused by
reclassification of held-to-maturity
investment to financial asset for sales

              (4) Effective part of cash
flow hedging gain/loss

              (5) Translation difference
of foreign exchange statement

                 6. Others                                                                                        -1,108,815.63

(6) Total of misc. incomes                                             24,529,385.46                             157,837,177.03

(7) Earnings per share:

       (1) Basic earnings per share

       (2) Diluted earnings per share


5. Consolidated Cash Flow Statement

                                                                                                                           In RMB

                    Items                    Amount occurred in the current period           Occurred in previous period

1. Net cash flow from business
operations:

       Cash received from sales of
                                                                    1,651,025,342.09                           1,763,447,209.35
products and providing of services

       Net increase of customer deposits
and capital kept for brother company

       Net increase of loans from central
bank

       Net increase of inter-bank loans
from other financial bodies

       Cash received against original
insurance contract

       Net cash received from
reinsurance business

       Net increase of client deposit and
investment


                                                                                                                               74
                                                         China Fangda Group Co., Ltd. 2014 Annual Report


     Net increase in financial assets
measured at fair value with variations
accounted into current income account

        Cash received as interest,
processing fee, and commission

        Net increase of inter-bank fund
received

        Net increase of repurchasing
business

        Tax refunded                            1,735,709.16                              1,935,388.44

        Other cash received from
                                               31,286,645.67                             41,052,740.68
business operation

Sub-total of cash inflow from business
                                             1,684,047,696.92                         1,806,435,338.47
operations

        Cash paid for purchasing
                                             1,796,240,670.15                         1,313,329,311.49
products and services

        Net increase of client trade and
advance

        Net increase of savings in central
bank and brother company

        Cash paid for original contract
claim

        Cash paid for interest, processing
fee and commission

        Cash paid for policy dividend

        Cash paid to and for the staff        225,245,085.75                            167,796,650.09

        Taxes paid                             86,882,633.93                             78,014,776.44

        Other cash paid for business
                                              133,573,236.53                             90,749,980.14
activities

Sub-total of cash outflow from business
                                             2,241,941,626.36                         1,649,890,718.16
operations

Cash flow generated by business
                                             -557,893,929.44                            156,544,620.31
operations, net

2. Cash flow generated by investment:

        Cash received from investment
                                              294,000,000.00                            120,000,000.00
recovery

     Cash received as investment profit         2,144,844.81                                306,301.37

        Net cash retrieved from disposal        5,912,795.35                                179,704.00


                                                                                                     75
                                                         China Fangda Group Co., Ltd. 2014 Annual Report


of fixed assets, intangible assets, and
other long-term assets

        Net cash received from disposal
of subsidiaries or other operational units

        Other investment-related cash
                                                   65,500.00                                429,055.00
received

Sub-total of cash inflow generated from
                                              302,123,140.16                            120,915,060.37
investment

        Cash paid for construction of
fixed assets, intangible assets and other      33,875,128.34                             40,911,829.63
long-term assets

        Cash paid as investment               538,263,675.00                            130,000,000.00

        Net increase of loan against
pledge

        Net cash paid for acquiring
                                               15,702,424.87
subsidiaries and other operational units

        Other cash paid for investment            331,500.00                              1,659,058.00

Subtotal of cash outflows                     588,172,728.21                            172,570,887.63

Cash flow generated by investment
                                             -286,049,588.05                            -51,655,827.26
activities, net

3. Cash flow generated by financing
activities:

        Cash received from investment

        Incl. Cash received from
investment attracted by subsidiaries
from minority shareholders

        Cash received from borrowed
                                             1,303,817,100.01                           529,000,000.00
loans

        Cash received from bond placing

        Other cash received from
financing activities

Subtotal of cash inflow from financing
                                             1,303,817,100.01                           529,000,000.00
activities

        Cash paid to repay debts              575,000,000.00                            540,000,000.00

        Cash paid as dividend, profit, or
                                               67,732,507.84                             48,354,192.64
interests

        Incl. Dividend and profit paid by
subsidiaries to minority shareholders



                                                                                                     76
                                                                              China Fangda Group Co., Ltd. 2014 Annual Report


      Other cash paid for financing
activities

Subtotal of cash outflow from financing
                                                                   642,732,507.84                             588,354,192.64
activities

Net cash flow generated by financing
                                                                   661,084,592.17                             -59,354,192.64
activities

4. Influence of exchange rate changes
                                                                       259,902.13                                -464,717.89
on cash and cash equivalents

5. Net increase in cash and cash
                                                                  -182,599,023.19                              45,069,882.52
equivalents

      Plus: Balance of cash and cash
                                                                   285,237,255.38                             240,167,372.86
equivalents at the beginning of term

6. Balance of cash and cash equivalents
                                                                   102,638,232.19                             285,237,255.38
at the end of the period


6. Cash Flow Statement of the Parent Company

                                                                                                                        In RMB

                   Items                  Amount occurred in the current period           Occurred in previous period

1. Net cash flow from business
operations:

      Cash received from sales of
                                                                    25,532,652.79                              44,496,139.39
products and providing of services

      Tax refunded

      Other cash received from
                                                                   535,560,936.32                             580,085,321.10
business operation

Sub-total of cash inflow from business
                                                                   561,093,589.11                             624,581,460.49
operations

      Cash paid for purchasing
                                                                     6,265,876.89                              12,790,698.85
products and services

      Cash paid to and for the staff                                12,900,103.54                              10,045,800.12

      Taxes paid                                                     2,806,998.73                               4,659,170.87

      Other cash paid for business
                                                                   144,910,876.80                             217,012,897.35
activities

Sub-total of cash outflow from business
                                                                   166,883,855.96                             244,508,567.19
operations

Cash flow generated by business
                                                                   394,209,733.15                             380,072,893.30
operations, net




                                                                                                                            77
                                                        China Fangda Group Co., Ltd. 2014 Annual Report


2. Cash flow generated by investment:

        Cash received from investment
                                              20,000,000.00
recovery

     Cash received as investment profit       39,860,211.87

        Net cash retrieved from disposal
of fixed assets, intangible assets, and           66,000.00                             33,241,974.20
other long-term assets

        Net cash received from disposal
of subsidiaries or other operational units

        Other investment-related cash
received

Sub-total of cash inflow generated from
                                              59,926,211.87                             33,241,974.20
investment

        Cash paid for construction of
fixed assets, intangible assets and other       3,257,461.79                             1,359,102.96
long-term assets

        Cash paid as investment              707,011,633.00                             50,000,000.00

        Net cash paid for acquiring
subsidiaries and other operational units

        Other cash paid for investment

Subtotal of cash outflows                    710,269,094.79                             51,359,102.96

Cash flow generated by investment
                                             -650,342,882.92                           -18,117,128.76
activities, net

3. Cash flow generated by financing
activities:

        Cash received from investment

        Cash received from borrowed
                                             446,000,000.00                            194,000,000.00
loans

        Cash received from bond placing

        Other cash received from
financing activities

Subtotal of cash inflow from financing
                                             446,000,000.00                            194,000,000.00
activities

        Cash paid to repay debts             200,000,000.00                            470,000,000.00

        Cash paid as dividend, profit, or
                                              35,741,367.15                             43,525,867.31
interests

        Other cash paid for financing
activities


                                                                                                    78
                                                                                        China Fangda Group Co., Ltd. 2014 Annual Report


Subtotal of cash outflow from financing
                                                                           235,741,367.15                                 513,525,867.31
activities

Net cash flow generated by financing
                                                                           210,258,632.85                                -319,525,867.31
activities

4. Influence of exchange rate changes
                                                                                  -93,226.35                                       3,306.69
on cash and cash equivalents

5. Net increase in cash and cash
                                                                            -45,967,743.27                                 42,433,203.92
equivalents

      Plus: Balance of cash and cash
                                                                             67,973,808.76                                 25,540,604.84
equivalents at the beginning of term

6. Balance of cash and cash equivalents
                                                                             22,006,065.49                                 67,973,808.76
at the end of the period


7. Statement of Change in Owners Equity (Consolidated)

Amount of the Current Term
                                                                                                                                    In RMB

                                                                          Current period

                                               Owners’ Equity Attributable to the Parent Company

                                Other interest tools
                                                                                                                         Minor
                                      Perpet                                                                                       Total of
       Items                                                              Other                          Commo
                                        ual                       Less:                                                 shareho
                       Share Prefer                Capital          miscella Special Surplus n risk Retaine            owners’
                                     capita Other           Shares                                             lders’
                       capital red                reserves           neous reserves reserves provisio d profit          equity
                                        l     s            in stock                                            equity
                              shares                                income                      ns
                                     securi
                                        ties

                       756,90                                                                                                       1,216,0
1. Balance at the                                       79,099,           91,831.              46,389,           278,149 55,432,
                       9,905.                                                                                                       72,177.
end of last period                                       220.38                63              142.21            ,631.63 446.89
                           00                                                                                                           74

      Plus:
Changes in
accounting
policies


Correction of
previous errors

             Under
common       control

             Others




                                                                                                                                          79
                                                    China Fangda Group Co., Ltd. 2014 Annual Report


2. Balance at the      756,90                                                               1,216,0
                                79,099,   91,831.        46,389,         278,149 55,432,
beginning of           9,905.                                                               72,177.
                                220.38        63         142.21           ,631.63 446.89
current period            00                                                                    74

3. Amount of
change in current                                        2,452,9          71,838, 10,171, 84,462,
term (“-“ for                                           38.55           194.06 317.64 450.25
decrease)

(1) Total of misc.                                                        96,998, -4,309,0 92,689,
incomes                                                                   429.76     85.10 344.66

(2) Investment or
                                                                                    16,000, 16,000,
decreasing of
                                                                                    000.00 000.00
capital by owners

1. Common shares
                                                                                    16,000, 16,000,
invested by
                                                                                    000.00 000.00
shareholders

2. Capital invested
by other equity
tool holders

3. Amount of
shares paid and
accounted as
owners’ equity

4. Others

(3) Profit                                               2,452,9         -25,160,          -22,707,
allotment                                                 38.55           235.70            297.15

1. Providing of                                          2,452,9         -2,452,9
surplus reserves                                          38.55            38.55

2. Common risk
provision

3. Allotment to the
                                                                         -22,707,          -22,707,
owners (or
                                                                          297.15            297.15
shareholders)

4. Others

(4) Internal
transferring of
owners’ equity

1. Capitalizing of
capital reserves (or
to capital shares)

2. Capitalizing of


                                                                                                 80
                                                                                        China Fangda Group Co., Ltd. 2014 Annual Report


surplus reserves
(or to capital
shares)

3. Making up
losses by surplus
reserves

4. Others

(5) Special
reserves

1. Provided this
year

2. Used this term

                                                                                                                      -1,519,5 -1,519,5
(6) Others
                                                                                                                         97.26     97.26

                      756,90                                                                                                     1,300,5
4. Balance at the                                      79,099,           91,831.             48,842,           349,987 65,603,
                      9,905.                                                                                                     34,627.
end of this period                                      220.38                63             080.76            ,825.69 764.53
                          00                                                                                                          99

Amount of the Previous Term
                                                                                                                                  In RMB

                                                                          Last period

                                              Owners’ Equity Attributable to the Parent Company

                               Other interest tools

                                     Perpet                                                                            Minor
                                                                         Other                         Commo                     Total of
       Items                                                     Less:                                                 shareho
                                       ual                                                                            owners’
                      Share Prefer                Capital          miscella Special Surplus n risk Retaine
                                                           Shares                                             lders’
                                    capita Other                                                                       equity
                      capital red                reserves           neous reserves reserves provisio d profit
                                                          in stock                                            equity
                                       l     s
                             shares                                income                      ns
                                    securi
                                       ties

                      756,90                                                                                                     1,158,3
1. Balance at the                                      79,099,           1,200,6             30,494,           230,907 59,708,
                      9,905.                                                                                                     20,726.
end of last period                                      220.38             47.26             542.94            ,879.99 531.11
                          00                                                                                                          68

       Plus:
Changes in
accounting
policies


Correction of
previous errors

              Under



                                                                                                                                        81
                                                     China Fangda Group Co., Ltd. 2014 Annual Report


common       control

             Others

2. Balance at the      756,90                                                               1,158,3
                                79,099,   1,200,6         30,494,         230,907 59,708,
beginning of           9,905.                                                               20,726.
                                220.38      47.26         542.94           ,879.99 531.11
current period            00                                                                     68

3. Amount of
change in current                         -1,108,8        15,894,          47,241, -4,276, 57,751,
term (“-“ for                             15.63         599.27           751.64 084.22 451.06
decrease)

(1) Total of misc.                        -1,108,8                         85,676, -4,276, 80,291,
incomes                                     15.63                          863.78 084.22 963.93

(2) Investment or
decreasing of
capital by owners

1. Common shares
invested by
shareholders

2. Capital invested
by other equity
tool holders

3. Amount of
shares paid and
accounted as
owners’ equity

4. Others

(3) Profit                                                15,894,         -38,435,          -22,540,
allotment                                                 599.27           112.14            512.87

1. Providing of                                           15,894,         -15,894,
surplus reserves                                          599.27           599.27

2. Common risk                                                            -22,540,          -22,540,
provision                                                                  512.87            512.87

3. Allotment to the
owners (or
shareholders)

4. Others

(4) Internal
transferring of
owners’ equity

1. Capitalizing of
capital reserves (or

                                                                                                  82
                                                                                            China Fangda Group Co., Ltd. 2014 Annual Report


to capital shares)

2. Capitalizing of
surplus reserves
(or to capital
shares)

3. Making up
losses by surplus
reserves

4. Others

(5) Special
reserves

1. Provided this
year

2. Used this term

(6) Others

                       756,90                                                                                                          1,216,0
4. Balance at the                                        79,099,              91,831.              46,389,          278,149 55,432,
                       9,905.                                                                                                          72,177.
end of this period                                        220.38                   63               142.21          ,631.63 446.89
                           00                                                                                                               74


8. Statement of Change in Owners Equity (Parent Company)

Amount of the Current Term
                                                                                                                                        In RMB

                                                                              Current period

                                     Other interest tools

                                             Perpetu                                       Other
                                                                                Less:                                                 Total of
       Items            Share                   al                 Capital                miscellan    Special   Surplus   Retaine
                                  Preferre                                    Shares in                                               owners’
                       capital               capital    Others     reserves                 eous      reserves   reserves d profit
                                  d shares                                      stock                                                 equity
                                             securiti                                      income
                                               es

1. Balance at the      756,909,                                  38,598,56                                       46,389,14 404,953 1,246,943
                                                                                          91,831.63
end of last period      905.00                                         5.00                                           2.21 ,611.77     ,055.61

       Plus:
Changes in
accounting
policies


Correction of
previous errors

              Others


                                                                                                                                               83
                                                China Fangda Group Co., Ltd. 2014 Annual Report


2. Balance at the
                       756,909,   38,598,56                       46,389,14 404,953 1,246,943
beginning of                                  91,831.63
                        905.00         5.00                            2.21 ,611.77     ,055.61
current period

3. Amount of
change in current                                                 2,452,938 -630,85 1,822,088
term (“-“ for                                                         .55      0.24        .31
decrease)

(1) Total of misc.                                                            24,529, 24,529,38
incomes                                                                        385.46      5.46

(2) Investment or
decreasing of
capital by owners

1. Common shares
invested by
shareholders

2. Capital invested
by other equity
tool holders

3. Amount of
shares paid and
accounted as
owners’ equity

4. Others

(3) Profit                                                        2,452,938 -25,160, -22,707,2
allotment                                                               .55 235.70        97.15

1. Providing of                                                   2,452,938 -2,452,9
surplus reserves                                                        .55     38.55

2. Allotment to the
                                                                              -22,707, -22,707,2
owners (or
                                                                               297.15     97.15
shareholders)

3. Others

(4) Internal
transferring of
owners’ equity

1. Capitalizing of
capital reserves (or
to capital shares)

2. Capitalizing of
surplus reserves
(or to capital


                                                                                              84
                                                                                            China Fangda Group Co., Ltd. 2014 Annual Report


shares)

3. Making up
losses by surplus
reserves

4. Others

(5) Special
reserves

1. Provided this
year

2. Used this term

(6) Others

4. Balance at the      756,909,                                  38,598,56                                       48,842,08 404,322 1,248,765
                                                                                         91,831.63
end of this period      905.00                                        5.00                                            0.76 ,761.53    ,143.92

Amount of the Previous Term
                                                                                                                                       In RMB

                                                                              Last period

                                     Other interest tools

                                             Perpetu                                        Other
                                                                              Less:                                                  Total of
        Items           Share                   al                Capital                miscellan    Special    Surplus   Retaine
                                  Preferre                                   Shares in                                               owners’
                       capital               capital    Others   reserves                   eous      reserves   reserves d profit
                                  d shares                                    stock                                                  equity
                                             securiti                                     income
                                               es

1. Balance at the      756,909,                                  38,598,56               1,200,647               30,494,54 284,442 1,111,646
end of last period      905.00                                        5.00                      .26                   2.94 ,731.25    ,391.45

       Plus:
Changes in
accounting
policies


Correction of
previous errors

              Others

2. Balance at the
                       756,909,                                  38,598,56               1,200,647               30,494,54 284,442 1,111,646
beginning of
                        905.00                                        5.00                      .26                   2.94 ,731.25    ,391.45
current period

3. Amount of
change in current                                                                        -1,108,81               15,894,59 120,510 135,296,6
term (“-“ for                                                                                5.63                   9.27 ,880.52      64.16
decrease)


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(1) Total of misc.     -1,108,81                      158,945 157,837,1
incomes                    5.63                       ,992.66     77.03

(2) Investment or
decreasing of
capital by owners

1. Common shares
invested by
shareholders

2. Capital invested
by other equity
tool holders

3. Amount of
shares paid and
accounted as
owners’ equity

4. Others

(3) Profit                                15,894,59 -38,435, -22,540,5
allotment                                      9.27    112.14     12.87

1. Providing of                           15,894,59 -15,894,
surplus reserves                               9.27 599.27

2. Allotment to the
                                                      -22,540, -22,540,5
owners (or
                                                       512.87     12.87
shareholders)

3. Others

(4) Internal
transferring of
owners’ equity

1. Capitalizing of
capital reserves (or
to capital shares)

2. Capitalizing of
surplus reserves
(or to capital
shares)

3. Making up
losses by surplus
reserves

4. Others

(5) Special
reserves


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1. Provided this
year

2. Used this term

(6) Others

4. Balance at the    756,909,                     38,598,56                              46,389,14 404,953 1,246,943
                                                                     91,831.63
end of this period    905.00                           5.00                                   2.21 ,611.77   ,055.61


III. General Information

China Fangda Group Co., Ltd. (hereinafter referred to as “the Company” or "Fangda") was established by
restructuring Shenzhen Fangda Construction Material Co., Ltd. with the approval Shenzhen Government Office
Doc. No. (1995) in October 1995.         The Registration No. of the Company’s business license is:
440301501124785; with a registered capital 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 in
November 1995 and April 1996 respectively in Shenzhen Stock Exchange.

The Company has established a corporate governance structure that comprises shareholders’ meeting, board of
directors and supervisory committee. Currently, the Company sets up the President Office, Administrative
Department, HR Department, Enterprise Management Department, Financial Department, Audit and Supervisory
Department, Securities Department, Technology Department and IT Department and has established subsidiaries
including Fangda Decoration, Fangda Automatic, Fangda New Material, Shenyang Fangda and Fangda Property.

Business nature and main business activities of the Company and its subsidiaries (collectively referred to "the
Group") include (1) curtain wall segment, production and sales of curtain wall materials, construction curtain wall
design, production and installation; (2) rail transport segment, assembly and processing of metro screen doors; (3)
real estate development segment, develop and operate real estate projects on land with legal land use rights;
property management; (4) new energy segment, R&D, installation and sales of PV devices, design and
construction of PV power plants; R&D, design, production, sales and installation of lighting electric accessories
and other lighting devices, LED products and hardware products.

The financial statements and notes are approved at the 9th meeting of the 7th term of the Board held on March 25,
2015.

The consolidation scope of financial statements in this report period includes the Company and all subsidiaries.
New entities incorporated in this report period include Shenzhen Fangda New Energy Co., Ltd., Guangdong
Fangda SOZN Lighting Co., Ltd., Shihui International Holding Co., Ltd. During the report period, subsidiary
Shenzhen Fangda Yide New Material Co., Ltd. was de-registered. See Note VIII. Changes to the Consolidation
Scope and Note IX. Disclosure of Interest in Other Entities for details.




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IV Basis for the preparation of financial statements

1. Preparation basis

The financial report is prepared based on enterprise accounting standards issued by the Ministry of Finance and
application guide, interpretation and other related provision (collectively “Enterprise Accounting Standards”). The
Group has also disclosed related financial information according to the requirement of the Regulations of
Information Disclosure No.15 – General Provisions for Financial Statements (Revised in 2014) issued by the
CSRC.

2. Continuous operation

The Company is capable of continuous operation. The financial statement is prepared based on continuous
operation.
The Group's audit is based on the accrual basis. Except for some financial instruments and property held for
investment, the financial statements are prepared based on historical costs. In case of any asset impairment, the
impairment provision will be made as required.

V Significant Accounting Policies and Estimates

Specific accounting policy and assumption prompt:

1. Statement of compliance to the Accounting Standards for Business Enterprises

The financial report and statements are prepared with compliance to the requirement of the Enterprise Accounting
Standards. They reflect the financial position as of December 31, 2014, and business performance and cash flow
situation in Year 2014 of the Company frankly and completely.

2. Fiscal period

The fiscal year of the Group is the solar calendar year, that is from January 1 to December 31.

3. Operating period

The operating period of the Group is 12 months.

4. Bookkeeping standard money

The Group takes RMB as the standard currency for bookkeeping.

4. Accounting treatment of the entities under common and different control

(1) Consolidation of entities under common control

Assets and liabilities obtained by the merging party are calculated at their book value with the merged parties at


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the merger day in the final controller’s consolidated financial statements in addition to the adjustment made given
the difference in accounting policies. The differences between the book value of net assets and the book value of
consideration price (or the total of face value of share issued) are adjusted to the capital reserve (share capital
premium). If the share capital premium is not enough to offset the difference, it will be adjusted to the retained
gains.

(2) Consolidation of entities under different control

For merger of entities under different control, the merger cost is the fair value of the asset paid, liability
undertaken, and equity securities issued for exchanging of control power over the entities at the day of acquisition.
On the acquisition day, the assets and liabilities (if any) acquired by the Company from the acquired party are
recognized on the fair value.

If the merger costs exceed the fair value of the recognizable net assets of the acquired party in the merger, it is
recognized as goodwill and measured based the costs after the accumulative impairment provision is deducted; if
the fair value exceeds the costs, it is included in the income statement for the period after being re-examined.

Involved amount or consideration is included in consolidated cost at the fair value on the day of acquisition.
Where the value needs to be adjusted based on the amount on the date of acquisition 12 months later, the
consolidated goodwill should be adjusted accordingly.

(3) Treatment of transaction fees in merger

Agency expenses and other administrative expenses such as auditing, legal consulting, or appraisal services
occurred relating to the merger of entities are accounted into current income account when occurred. The
transaction fees of equity certificates or liability certificates issued by the purchaser for payment for the
acquisition are accounted at the initial amount of the certificates.

6. Preparation of Consolidated Financial Statements

(1) Consolidation scope

The consolidation scope of consolidated financial statements is determined based on control. Control refers to a
power possessed by the Group on invested entities, the power of enjoying variable return by participating in
activities conducted by invested entities, and capabilities of using the power to change the returns. Subsidiaries are
enterprises controlled by the Company.

(2) Preparation of Consolidated Financial Statements

Consolidated financial statements are prepared by the Company based on financial statements of the Company
and subsidiaries and according to other related information. During preparation of consolidated financial
statements, the accounting policies and period of the Company and subsidiaries must be the same. Major
transactions and balances between companies are offset.

Subsidiaries and businesses newly incorporated under the same control during the report period are considered
incorporated in the consolidation scope since the date on which they are controlled. Business results and cash
flows are consolidated in the consolidated income and cash flow statements since the same date.


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Incomes, expenses and profits of subsidiaries and businesses newly incorporated under different control and their
businesses are consolidated from the date of acquisition and end of the report period in the consolidated income
statement, with cash flows consolidated in the consolidated cash flow statement.

The part of the shareholders’ equity in subsidiaries not owned the Company are separately listed under the
shareholders’ equity as minority shareholders’ equity in the consolidated balance sheet. The part of the
subsidiaries’ net profits and losses for the current period that belongs to minority shareholders is listed as minority
shareholders’ profits and losses under net profit in the consolidated income statement. If the losses of
subsidiaries shared by the minority shareholders exceed the part of the owners’ equity of the subsidiaries at the
beginning of the period, the excessive part will offset the minority shareholders’ equity.

7. Recognition of cash and cash equivalents

Cash refers to cash on hand and deposits that can be used at any time for payment. Cash equivalent refers to the
investments with short term, strong liquidity and small risk of value fluctuation that are held by the Group and
easily converted into cash with known amount.

8. Foreign exchange business and foreign exchange statement translation

Trades of the Group made in foreign currencies are translated into RMB basing on the spot exchange rate on the
date when the trade is conducted.

At the balance sheet date, foreign currency items are translated on the spot exchange rate of the balance sheet date.
The exchange differences caused by the difference in exchange rates on the balance sheet date and initial
recognizing date or previous balance sheet date are included in the current profits and losses. Non-monetary items
accounted in foreign currency and on historical costs are exchanged with the spot exchange rate on the transaction
date. Non-monetary items accounted in foreign currency and on fair value are exchanged with the spot exchange
rate on the determination date of the fair value. The exchange difference between the accounting
standard-currency amount and the original accounting standard-currency amount are included in the current
profits and losses.

9. Financial instrument

Financial instrument refers to a company’s financial assets and contracts that form other units of financial
liabilities or equity instruments.

(1) Recognition and derecognition of financial instrument

The Group recognizes a financial asset or liability when it becomes one party in the financial instrument contract.

Financial asset is derecognized when:

(1) The contractual right to receive the cash flows of the financial assets is terminated;

(2) The financial asset is transferred and meets the following derecognition condition.

When partial or all of the current responsibilities attached to such financial liabilities, the partial or all of the

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financial liabilities are derecognized. When the Group (debtor) and creditor enter into an agreement to replace
the existing financial liabilities by undertaking new financial liabilities and the contract terms for the new
financial liabilities are essentially different from those for the existing one, the existing financial liabilities will be
derecognized and new financial liabilities will be recognized.

Financial asset transactions in regular ways are recognized and de-recognized on the transaction date.

(2) Classification and measurement of financial assets

Financial assets of the Group are categorized as: financial assets measured at fair value with variations accounted
into current income account and account receivables. Financial assets are measured at the fair value at the initial
recognition.   For financial assets measured at fair value with variations accounted into current income
account, related transaction expenses are accounted into the current income. For other financial assets,
the related transaction expenses are accounted into the initial recognized amounts.

Financial assets measured at fair value with variations accounted into current income account

It includes transactional financial assets and financial assets measured by fair value and with variations accounted
into current gain/loss account at initial recognition. The financial assets are further measured by fair value with the
gain/loss created by variations in fair value and related dividends and interest accounted into the current gain/loss
account.

Receivables

Receivables refer to non-derivative financial assets without quotations but with fixed recoverable amount or can
be confirmed, including receivable accounts and other receivables (Note V. 10). Receivables adopt the effective
interest method and are further measured by amortized cost. Gain/loss generated at final recognition, impairment
or amortization is accounted into the current gain/loss account.




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(3) Classification and measurement of financial liabilities

The Group’s financial liabilities are mainly other financial liabilities

Other financial liabilities adopt the effective interest method and are further measured by amortized cost.
Gain/loss generated at final recognition or amortization is accounted into the current gain/loss account.

(4) Fair value of financial instrument

See Note V 29 for the method of determining fair value of financial assets and liabilities.

(5) Impairment of financial assets

Financial assets measured at fair value with variations accounted into current income account. The Group checks
the book value of financial assets on the balance sheet date. Impairment provision will be made in case of
objective evidence proving impairment to the financial assets. Objective evidence proving impairment to the
financial assets refers to events actually occur after the initial recognition of financial assets, with influence on the
estimated future cash flows of the financial assets and can be reliably measured by the Company.

Objective evidence providing impairment to financial assets includes:

① Severe financial difficulties for the issuer or debtor;

② The debtor violates a contract, for example delaying in paying interest or principal;

③ The Group makes concessions for the debtor with financial difficulties for economic or legal reasons;

④ The debtor is likely to go into liquidation or other financial reorganization;

⑤ The financial assets cannot be traded in an active market due to severe financial difficulties of the issuer;

⑥ It is un-recognizable whether the cash flow of an asset in a group of financial assets decreases, but the
estimated future cash flow has decreased since the first recognition of the group of financial assets based on
general evaluation of open data and the decrease can be measured, including:

     - The repaying capability of the debtor of the group of financial assets continues worsening;

     - The group of financial assets may not be settled due to economic status of the country or district whether
the debtor is located;

⑦ The equity instrument may not be recovered due to material adverse changes to technical, market, economic or
legal status of the debtor;

⑧ Other objective evidence proving impairment to financial assets

Financial assets measured at amortized cost

If there is objective evidence proving impairment to the financial assets, the book value of the financial assets will
be written down to the present value of the estimated future cash flow (excluding undiscovered future credit loss).
The write-down amount is accounted into the current gain/loss account. The present value of the estimated

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future cash flow is determined by the original effective discount rate with the value of the guarantee considered.

Conduct impairment test separately for major financial assets. If there is objective evidence suggesting
impairment, determine the impairment loss and account it into the current gain/loss account. Conduct
impairment test for other financial assets including financial assets combination with similar credit risk features.
Test financial assets without impairment separately (including major and minor financial assets) and conduct
impairment test in the financial assets combination with similar credit risk features. Conduct impairment test for
financial assets separately recognized as impaired excluding financial assets combination with similar credit risk
features.

After the Group recognizes impair loss to financial assets measured by amortized cost, if there is object evidence
suggesting that the value of the financial assets is restored objectively due to an event after the loss, the
recognized impairment loss can be reversed and accounted into the current gain/loss account. The book value
after the reversal must not exceed the amortized cost of the financial assets on the reversal date assuming that no
impairment provision was made.




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(6) Transfer of financial assets

The transfer of financial assets refers to transferring or delivering the financial assets to another party (receiver)
other than the issuing party of the financial assets.

Recognition of the financial asset is terminated as soon as all of the risks and rewards attached to the financial
asset have been transferred to the receiver. Whereas if all of the risks and rewards attached to the financial assets
are reserved, recognition of the financial asset shall not be terminated.

When the Group neither transfers nor reserve almost all risks and rewards attached to the financial assets, it will
be handled as: When the controlling power over the financial asset is given up, the financial assets will be
derecognized and the generated assets and liabilities will be recognized; when the controlling power is not given
up, financial asset and related liability shall be recognized according to the extend the Group is involving in the
financial asset.

(7) Offsetting of financial assets and liabilities

When the Group has the legal right to offset recognized financial assets and liabilities and can exercise the right,
and the Group plans to set them in net value or realize the financial assets or repay the financial liabilities, the
financial assets and liabilities are presented in the balance sheet by their amounts after offsetting. Financial
assets and liabilities other than the above-mentioned circumstance are presented in the balance sheet separately
and are not offset.

10. Receivables

(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 receivables over RMB2
Judging basis or standard of major individual amount
                                                                million (included) as “individual receivable with large amount”
                                                                and other receivables over RMB1 million (included) as
                                                                “individual receivable with large amount”.

                                                                The Company performs impairment examination individually on
                                                                each large amount receivables, and recognizes impairment and
Provision method for account receivable with major individual   provides bad debt provision when the impairment is recognized
amount and bad debt provision provided individually             based on objective evidence.    Those not impaired are accounted
                                                                along with the minor amount receivables and recognized in risk
                                                                groups.


(2) Recognition and providing of bad debt provisions on groups


                            Group                                                 Method of bad debt provision

Account age                                                     Aging method




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Receivable accounts consolidated                            Other method

Receivables adopting the aging method in the group
√ Applicable □ Inapplicable
                   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%

Receivables adopting the balance percentage method in the group
□ Applicable √ Inapplicable
Receivables adopting other methods in the group
□ Applicable √ Inapplicable

(3) Receivables 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
Method of bad debt provision
                                                            cash flow and the book value


11. Inventories

(1) Classification of inventories

The Group’s inventories include purchased materials, raw materials, low-value consumables, OEM materials,
products in process, semi-finished goods, finished goods, inventory, development cost, and construction in
process.

(2) Pricing of inventory

Inventories are measured at cost when procured. Raw materials, products in process, commodity stocks and goods
shipped in transit are measured by the weighted average method.

Construction contracts are measured by the effective cost, including direct and indirect expenses generated before
the contracts are fulfilled. Costs generated and recognized accumulatively by construction in process and settled
payment are listed in the balance sheet as offset net amounts. The excessive part of the sum of the generated costs
and recognized gross profit (loss) over the settled payment is listed inventories; the excessive part of the settled
payment over the sum of the generated costs and recognized gross profit (loss) is listed as the prepayment
received.

Travel and bidding expenses generated by execution of contracts, if they can be separated and reliably measured
and it is likely to enter into contracts, are accounted as the contract cost when the contracts are entered into; or
into the current gain/loss account if the conditions are not met.


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The actual costs of development include land transfer payment, infrastructure and facility costs, installation
engineering costs, borrows before completion of the development and other costs during the development process.

(3) Recognition of inventory realizable value and providing of impairment provision

12. Assets held for sales

13. Long-term share equity investment

(1) Recognition of initial investment costs

The investment cost of long-term share equity investment formed by entities under common control is the share of the book value of
the owner's equity of the merged party on the date of the merger. The investment cost of long-term share equity investment formed by
entities under different control is the merger cost on the date of the merger.


For other long-term investment: for those obtained with cash, the initial investment cost is the purchase price.

2. Subsequent measurement and recognition of gain/loss

Long-term equity investments in which the Group can control invested entities are accounted using the cost
method; investment in affiliates is accounted using the equity method.

For the long-term equity investment measured on the cost basis, the profit distributed by the invested entity is
recognized as investment gains in the current gain/loss account.

When the equity method is used, the current investment gain is the share of the net gain realized in the current
year that can be shared or borne.

(3) Basis for recognition of major influence on invested entities

Major influence refers to the power to participate in decision-making of financial and operation policies of a
company, but cannot control or jointly control the making of the policies. When determining whether major
influence can be added on the invested entity, it should be considered whether the investor directly or indirectly
holds voting shares of the invested entity and the investor and the impacts that can be created by switching
potential votes held by the investor and other parties into shares of the invested entity, including exchangeable
warrants, share options, exchangeable corporate bonds issued by the invested entity.

If the Company directly or through subsidiaries holds more than 20% (inclusive) but less than 50%
of the shares with voting rights of the invested entity, unless there is clear evidence proving that the
Company cannot participate the decision-making of production and operation of the invested entity,
the Company has major influence on the invested entity; If the Group directly or through
subsidiaries holds less than 20% (exclusive) of the shares with voting rights of the invested entity,
unless there is clear evidence proving that the Group participates the decision-making of production
and operation of the invested entity, the Group does not have major influence on the invested entity.

(4) Impairment examination and providing of impairment provision

See Note V, 19 for the assets impairment provision method for investment in subsidiaries and joint

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ventures.

14. Investment real estates

Measuring method for investment real estate
Measured at fair value
Measuring basis

Investment real estates of the Company are buildings leased.

For investment real estate with an active real estate transaction market and the Company can obtain market price
and other information of same or similar real estate to reasonably estimate the investment real estates’ fair value,
the Company will use the fair value mode to measure the investment real estate subsequently.