方大集团股份有限公司 CHINA FANGDA GROUP CO., LTD. Semi-Annual Report 2007 Important Statement The Board of Directors and the directors of the Company guarantee that there are no significant omissions, fictitious or misleading statements carried in the Report and we will accept individual and joint responsibilities for the truthfulness, accuracy and completeness of the Report. This report has been examined and adopted by the 20th meeting of the 4th term of Board. Mr. Wen Simei, the independent director absent the meeting for business engagement, he entrusted independent director Zhen Xueding to exercise his right of voting and issued the independent opinions. The other directors all presented the meeting. The Financial Statement carried in the Semi-annual Report was not audited. Mr. Xiong Jianming, the Chairman of Board, and Mr. Lin Kebin, the Chief Financial Officer declare: the Financial Report carried in this report is authentic and completed. This report was prepared both in English and Chinese. Should there be any conflict in understanding, the Chinese version shall prevail. Definitions The following terms are defined to the companies goes after them unless otherwise stated. the Company : China Fangda Group Co., Ltd. The Group: the Company and its subsidiaries Fangda Decoration: Shenzhen Fangda Decoration Engineering Co., Ltd. Fangda Yide: Fangda Yide New Material Co., Ltd. Fangda Aluminium: Jiangxi Fangda New-type Aluminium Co., Ltd. Fangda Guoke: Shenzhen Fangda Guoke Electri-Optical Technical Co., Ltd. Fangda Automatic: Shenzhen Fangda Automatic System Co., Ltd. Fangda New Materials: Fangda New Materials (Jiangxi) Co., Ltd. HK Junjia: Hong Kong Junjia Group Co., Ltd. Banglin: Shenzhen Banglin Technology Development Co., Ltd. Shilihe: Shenzhen Shilihe Investment Co., Ltd. Onforce: Onforce International Co., Ltd. LED: GaN Lighting Diode Semiconductor 2 Table of Contents Important Statement .............................................................................................................................1 I. Company Profile ..........................................................................................................................................4 II. Change in Capital Share and Major Shareholders......................................................................................6 III. Particulars about the Directors, Supervisors and Senior Executives.........................................................9 IV. Report of the Board .................................................................................................................................10 V. Significant Events.....................................................................................................................................14 VI. Financial Report......................................................................................................................................19 VII. Documents for Reference ......................................................................................................................19 3 I. Company Profile 1. Company Profile: (1) Legal Name of the Company in Chinese and English In Chinese: 方大集团股份有限公司 （abbreviation：方大集团） In English: CHINA FANGDA GROUP CO., LTD. （abbreviation：CFDC ） (2) Legal Representative: Mr. Xiong Jianming (3) Secretary of the Board: Mr. Zhou Zhigang Securities affair liaison: Ms. Wang Shuiyin Address: Fangda Town, Xili Longjing, Nanshan District, Shenzhen, PRC Post code: 518055 Tel: 86(755) 26788571 ext. 6622 Fax: 86(755) 26788353 Email: [email protected] (4) Registered Address of the Company: Fangda Building, Kejinan 12th Avenue, High-tech Zone, Shenzhen, PR China. Post code: 518057 Head office: Technology Building, Fangda Town, Xili Longjing, Nanshan District, Shenzhen, PRC Post code: 518055 Email: [email protected] Website: http://www.fangda.com (5) Official Medias of Information Disclosure China Securities Journal, Security Times, Shanghai Securities Daily, Hong Kong Commercial Daily Website assigned by China Securities Regulatory Commission for the disclosing of Annual Report: http://www.cninfo.com.cn Website of the Company where the Semi-Annual Report is available: http://www.fangda.com This Semi-annual Report is available at: the Secretary Office of the Board of the Company. (6) Abbreviations and Codes of the Stock and the Stock Exchange Listed A Stock: Fangda A 000055 Shenzhen Stock Exchange B Stock: Fangda B 200055 Shenzhen Stock Exchange 4 2. Financial Highlights (in RMB yuan) （1） Major accounting indices Ended this report Ended previous Increase/decrease term year (%) Gross Assets 1,218,498,673.20 1,202,945,538.36 1.29% Owners’ (shareholders’) equity 504,884,266.84 495,109,976.64 1.97% Net asset per share 1.30 1.40 -7.14% Report term Same period last Increase/decrease (Jan-Jun) year (%) Operation profit -9,621,394.76 -6,259,907.48 -53.70% Total profit 10,107,834.02 9,957,386.75 1.51% Net profit 9,774,290.20 10,282,535.32 -4.94% Net profit deducted non-recurring -9,116,359.10 -5,921,532.73 -53.95% gain/loss Basic gains per share 0.030 0.030 0.00% Diluted gains per share 0.030 0.030 0.00% Net earnings / asset 1.94% 2.08% -0.14% Cash flow generated by business 3,202,804.34 40,747,240.56 -92.14% operation, net Net Cash flow per share generated by 0.008 0.120 -93.33% business operation Note: The non-recurring gain/loss were amounted to RMB18,890,649.30. Namely, RMB1,743,825.28 of non-current asset disposal; RMB302,216.00 of government subsidy; RMB12,000,000.00 of from the discrepancy between the fair value of recognizable assets before enterprise consolidation and the consolidation costs; RMB5,785,499.03 of debt reorganization; RMB-102,311.53 of other non-business income; and RMB838,579.48 of minority shareholders’ equity of non-recurring gain/loss. （2） Impact on the net profit and net asset due to adjustment under IAS (In RMB Yuan) Domestic Accounting Standard International Accounting Standard Net profit 9,774,290.20 9,774,290.20 Net asset 504,884,266.84 612,368,494.61 After adopting of the new accounting standard, the differences between the net profit Statement produced by the domestic accounting standard and the overseas standard has been about the eliminated. The difference of net assets between the two standard were those accumulated diversity from the previous terms to the beginning of this term. （3） Net income/asset ratio and earnings per share Income over net asset Earnings per share Profit Items Basic Fully Weighted earnings Diluted earnings diluted average per share per share Operational profit -1.91% -1.92% -0.02 -0.02 Net profit 1.94% 1.95% 0.03 0.03 Net profit after deducting of -1.81% -1.82% -0.02 -0.02 non-recurring gain/loss 5 II. Change in Capital Share and Major Shareholders (I) Change of Capital Share 1. Causation of the change In the report term, the Shareholders’ Annual Meeting 2006 passed the plan of capitalizing of capital reserves to the entire shareholders as the following: basing on the total of 352,716,000 capital shares, 1 bonus share was allotted to each 10 shares of the entire shareholders, namely the capital shares were increased by 35,271,600 shares. Among them, 17,972,808 were allotted to A shareholders at 1 to 10 basis; 17,298,792 shares were allotted to B shareholders at 1 to 10 basis. The capital shares of the Company were increased up to 387,987,600 shares after completion of this capitalization. 2. Approval upon the change It was approved by the Shareholders’ Annual Meeting 2006. 3. Change in total capital shares and shareholding structure (1) Change in capital shares Before the change Changed (+,-) After the change Issuing Transferred Bonus Amount Proportion of new from Others Sub-total Amount Proportion shares shares reserves I. Shares with conditional 71,919,175 20.39% 7,191,918 3,724 7,195,642 79,114,817 20.39% subscription 1. State-owned shares 2. State-owned legal person shares 3. Other domestic shares 71,919,175 20.39% 7,191,918 3,724 7,195,642 79,114,817 20.39% Incl. Non-government domestic legal person 71,840,400 20.37% 7,184,040 7,184,040 79,024,440 20.37% shares Domestic natural 78,775 0.02% 7,878 3,724 11,602 90,377 0.02% person shares 4. Share held by foreign investors Incl. Shares held by foreign legal persons Foreign natural person shares II. Shares with unconditional 280,796,825 79.61% 28,079,682 -3,724 28,075,958 308,872,783 79.61% subscription 1. Common shares in 107,808,905 30.57% 10,780,890 -3,724 10,777,166 118,586,071 30.57% RMB 2. Foreign shares in 172,987,920 49.04% 17,298,792 17,298,792 190,286,712 49.04% domestic market 3. Foreign shares in overseas market 4. Others III. Total of capital shares 352,716,000 100.00% 35,271,600 35,271,600 387,987,600 100.00% 6 (2) Date when the conditional shares are able to be traded In shares Newly added Balance of shares with Balance of Date Remarks tradable shares conditional subscription unconditional shares April 10 2008 38,798,760 40,225,680 347,761,920 April 10 2009 40,225,680 0 387,987,600 (3) Amount and condition of the top 10 holders of conditional shares In shares Shares with Date when Newly added Name of the No. conditioned trading is tradable Conditions holder subscription allowed shares Can’t be traded in 12 months since the launching of non-negotiable shares reconstruction plan; upon expiring 2008-04-10 19,399,380 of the above term, when the former non-negotiable share 1 Banglin 46,600,620 holders holding above 5% of the shares is trading its shares in the market, the number of traded shares shall not exceed 5% in 12 months, and shall not exceed 10% in 24 2009-04-10 27,201,240 months. 2008-04-10 19,399,380 Can’t be traded in 12 months since the launching of non-negotiable shares reconstruction plan; upon expiring Shenzhen of the above term, when the former non-negotiable share Shilihe 2 32,423,820 holders holding above 5% of the shares is trading its Investment shares in the market, the number of traded shares shall not Co., Ltd. exceed 5% in 12 months, and shall not exceed 10% in 24 months. 2009-04-10 13,024,440 4.