Chengde Dalu Co., Ltd. Annual Report 2011 承 德 大 路 股 份 有 限 公 司 CHENGDE DALU CO．， LTD. ANNUAL REPORT 2011 April 2012 Chengde · PRC 1 Chengde Dalu Co., Ltd. Annual Report 2011 Contents Section I. Important Notice ---------------------------------------------------------------------------------------3 Section II. Company Profile---------------------------------------------------------------------------------------4 Section III. Summary of Accounting Highlights and Business Highlights-------------------------------6 Section IV. Changes in Share Capital and Particulars about Shareholders-----------------------------10 Section V. Particulars about Directors, Supervisors, Senior Executives and Employees------------14 Section VI. Administrative Structure -------------------------------------------------------------------------19 Section VII. Particulars about Shareholders’ General Meeting-------------------------------------------25 Section VIII. Report of the Board of Directors---------------------------------------------------------------26 Section IX. Report of the Supervisory Committee----------------------------------------------------------39 Section IX. Significant Events-----------------------------------------------------------------------------------41 Section XI. Financial Report-------------------------------------------------------------------------------------47 Section XII. Documents for Reference ------------------------------------------------------------------------48 2 Chengde Dalu Co., Ltd. Annual Report 2011 Section I. Important Notice Board of Directors, Supervisory Committee, all directors, supervisors and senior executives of Chengde Dalu Co., Ltd. (hereinafter referred to as the Company) hereby confirm that there are no any fictitious statements, misleading statements, or important omissions carried in this report, and shall take all responsibilities, individual and/or joint, for the reality, accuracy and completion of the whole contents. The 26th Meeting of the 4th Session of the Board deliberated and approved 2011 Annual Report and its summary of the Company. All the directors, supervisors and senior executives attended the board meeting. Crowe Horwath CPA (special general partnership) audited the financial report of the Company and issued the qualified auditor‘s report with paragraph of emphasized matters for the Company. The Board of Director, Supervisory Committee and independent directors of the Company made definitions on the relevant matters; the investors are suggested to pay attention to read. Mr. Yan Qizhong, Chairman of the Board of the Company, Mr. Wang Ansheng, Chief Financial Officer, and Liu Fengguo, Person in Charge of Accounting Organ hereby confirm that the Financial Report of 2011 Annual Report is authentic and complete. Note: The report is prepared in bilingual versions of Chinese and English respectively, in the event of any discrepancy in understanding the two aforementioned versions, the Chinese version shall prevail. 3 Chengde Dalu Co., Ltd. Annual Report 2011 Section II. Company Profile (I) Legal Name of the Company In Chinese: 承德大路股份有限公司 In English: CHENGDE DALU CO., LTD. (II) Legal Representative: Yan Qizhong (III)Secretary of Board of Directors: Yan Qizhong Contact Address: Xiabancheng Town, Chengde County, Hebei Province Tel: 86 (314)-3115048 3115049 Fax: 86 (314)-3111475 E-mail: [email protected] (IV)Registered Address: Xiabancheng Town, Chengde County, Hebei Province Office Address: Xiabancheng Town, Chengde County, Hebei Province Post Code: 067400 Company‘s Internet Web Site: http://www.dxtex.com E-mail: [email protected] (V)Newspapers Chosen for Disclosing the Information of the Company: Securities Times (domestic) and Hong Kong Commercial Daily (overseas) Internet Web Site for Publishing the Annual Report: http://www.cninfo.com.cn The Place Where the Annual Report is Prepared and Placed: Securities Department of the Company Contact Tel: (86) 314-3115049, 3115048 (VI)Stock Exchange Listed with: Shenzhen Stock Exchange Short Form of the Stock: ST DALU B Stock Code: 200160 (VII)Other Relevant Information of the Company Initial registered date: November 3, 1999 Registered address: Industry and Commerce Administration Bureau of Chengde City No. 1, Huangcheng East Rd., Chengde City Registered number for business license of the Company: 130000400001225 Registered number of taxation of the Company: 130821106576876 Organization Code Certificate: 106576876 The Certified Public Accountant engaged by the Company: Crowe Horwath CPA (special general partnership) Office address: 4/F, 2# Building, No. 16 Court, Middle Road, West 4th Ring Haidian Zone, Beijing (VIII) Historical development background: Registration changes of the Company: Initial registration Second registration changes 4 Chengde Dalu Co., Ltd. Annual Report 2011 Date of 1999 – 11-3 2011-8-23 registration Industry and Commerce Office for Industry and Commerce Administration Administration Bureau of registration Bureau of Hebei Province Chengde City Address for No.316, Tiyu South Street, Shijiazhuang, No. 1, Huangcheng East Rd., registration Hebei Province Chengde City Registered number for business 1300001001372 1/1 130000400001225 license Registered number 130821106576876 130821106576876 of taxation Organization Code 106576876 106576876 Certificate 5 Chengde Dalu Co., Ltd. Annual Report 2011 Section III. Summary of Accounting Data and Business Highlights I. Summary of accounting data as of the year 2011 Items Amounts(RMB) Total operating income 515,150.00 Total profit 2,747,631.39 Net profit attributable to the shareholders of the listed 3,643,202.46 company Net profit attributable to the shareholders of the listed -14,020,621.88 company after deducting non-recurring gains and losses Net cash flow arising from operating activities -532,391.56 Notes: Items of non-recurring gains and losses and the amounts: Items of non-recurring gains 2011 Note (If 2010 2009 and losses applicable) Gains and losses from the 829,105,872. Debt restructuring 23 Governmental subsidy 17,900,000.0 19,125,000.00 - reckoned into current gains 0 and losses, but closely relevant to the Company‘s business except for the governmental subsidy enjoyed in quota or ration according to the national general standards Gains and losses from the 0.00 10,644,730.00 disposal of non-current asset -78,908,837. 70 Other non-operating income -35,799.64 280,915.03 and expenditure except for the -379,341,920 aforementioned items .31 Influenced amount of minority -200,376.02 -4,781,250.00 shareholders‘ gains/losses -38,409,535. 33 Impact on income tax 0.00 -411,676.61 - Total 17,663,824.3 - 24,857,718.42 4 332,445,578. 89 6 Chengde Dalu Co., Ltd. Annual Report 2011 II. Major accounting data and financial indexes over past three years ended the end of the report period (Unit: RMB) 1. Major accounting data Increase/decrease in this year 2011 2010 compared with 2009 that in last year (%) Before After After Before After adjustment adjustment adjustment adjustment adjustment Total operating 515,150.00 516,778.00 516,778.00 -0.32% 0.00 0.00 income(RMB) Operation -15,116,568.97 -23,065,703.21 -23,065,703.21 34.46% -137,628,650.87 -137,628,650.87 profit(RMB) Total 2,747,631.39 6,984,941.82 6,984,941.82 -60.66% 329,623,006.84 327,243,651.97 profit(RMB) Net profit 3,643,202.46 1,704,928.05 1,704,928.05 113.69% 186,014,467.46 91,450,169.52 attributable to shareholders of the listed company(RMB) Net profit -14,020,621.88 -23,152,790.37 -23,152,790.37 39.44% -221,422,306.04 -240,995,409.37 attributable to shareholders of the listed company after deducting non-recurring gains and losses(RMB) Net cash flow -532,391.56 -32,273,821.01 -32,273,821.01 98.35% -6,919,098.27 -6,919,098.27 arising from operating activities(RMB) Increase/decrease at the end of this At the end of year compared At the end of 2010 At the end of 2009 2011 with that at the end of last year (%) Before After After Before After adjustment adjustment adjustment adjustment adjustment Total 219,022,670.81 199,976,147.64 199,976,147.64 9.52% 183,328,923.59 190,703,503.14 assets(RMB) Total 240,950,260.50 224,632,050.60 224,632,050.60 7.26% 218,262,175.86 218,262,175.86 liability(RMB) Owners‘ equity -23,882,038.57 -27,525,241.03 -27,525,241.03 13.24% -51,338,938.68 -29,230,169.08 attributable to shareholders of listed company (RMB) Total share 706,320,000.00 706,320,000.00 706,320,000.00 0.00% 706,320,000.00 706,320,000.00 capital(Share) 7 Chengde Dalu Co., Ltd. Annual Report 2011 2. Major financial indexes (Unit: RMB) 2011 2010 Increase/decrease in 2009 this year compared with that in last year (%) Before After After adjustment Before After adjustment adjustment adjustment adjustment Basic earnings 0.0052 0.0024 0.0024 116.67% 0.26 0.13 per share (RMB/Share) Diluted earnings 0.0052 0.0024 0.0024 116.67% 0.26 0.13 per share (RMB/Share) Basic earnings 0.0199 0.0328 0.0328 -39.33% -0.31 -0.34 per share after deducting non-recurring gains and losses (RMB/Share) Weighted 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% average return on equity (%) Weighted 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% average return on equity after deducting non-recurring gains and losses (%) Net cash flow -0.001 -0.046 -0.046 -98.35% -0.0098 -0.0098 arising from operating activities per share (RMB/Share) At the At the end of 2010 Increase/decrease at At the end of 2009 end of the end of this year 2011 compared with that at the end of last year (%) Before After After adjustment Before After adjustment adjustment adjustment adjustment Net asset per share -0.034 -0.039 -0.039 -12.82% -0.07 -0.04 attributable to shareholders of listed company (RMB/share) Asset-liability ratio 110.01% 112.33% 112.33% -2.32% 119.05% 114.45% (%) III. Detailed statement on Provision for the Devaluation of Asset Unit: RMB Items Book balance Increase in Decrease in this period Book balance 8 Chengde Dalu Co., Ltd. Annual Report 2011 at year-begin the report at period-end Reversal Turn-off period I. Bad debt reserve 44,360,872.5 11,618.23 44,372,490.8 9 2 II.