方大集团股份有限公司 CHINA FANGDA GROUP CO., LTD. Annual Report 2011 Table of Contents I. Company Profile .................................................................................................................................. 2 II. Financial Highlight ............................................................................................................................. 3 III. Particulars About the Capital Share and Shareholders ................................................................. 6 IV. Particulars about the Directors, Supervisors, Senior Management and Employees ............... 11 V. Administrative Structure ................................................................................................................. 16 VI. Particulars about the Shareholders’ Meeting ............................................................................... 21 VII. Report of the Board of Directors .................................................................................................. 22 VIII. Report of the Supervisory Committee ........................................................................................ 34 IX. Significant Events ........................................................................................................................... 35 X. Financial Report ............................................................................................................................... 42 XI. Documents For Reference .......................................................................................................... 43 Important Prompt 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 was examined and approved at the 9th meeting of the 6th term of Board. All of the directors other than director Xiong Jianwei presented the meeting. Mr. Xiong empowered director Wang Shengguo to vote on his behalf. This report is prepared both in English and Chinese. When there is any conflict in interpreting, the Chinese version shall prevail. Mr. Xiong Jianming, the Chairman, and Mr. Lin Kebing, the Financial Officer, and Mr. Chen Yonggang, the accounting manager, hereby declares that: The financial statements carried in this annual report are of authentic and complete. I. 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：CFGC ） 2. Legal Representative: Mr. Xiong Jianming 3. Secretary of the Board: Mr. Zhou Zhigang Securities affair liaison: Ms. Guo Linchen 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 Website: http://www.fangda.com Email: [email protected] 5. Official Medias of Information Disclosure China Securities Journal, Security Times, Shanghai Securities Daily, Hong Kong Commercial Daily Place where Annual Reports are available: Secretary Office of the Board of Directors. Website assigned by China Securities Regulatory Commission for the disclosing of Annual Report: http://www.cninfo.com.cn 6. Abbreviations and Codes of the Stock and the Stock Exchange Where Listed A Stock: Fangda Group000055 Shenzhen Stock Exchange B Stock: Fangda B200055Shenzhen Stock Exchange 7. Miscellaneous Information of the Company Initial registration date and place: December 13th, 1995, Shenzhen Bureau of Industry & Commerce Administration Business license number: 440301501124785 Tax registration number: No.440305192448589 Organization code: 19244858-9 Public accountants employed by the Company: Ascenda Certified Public Accountants Office address: A-12/F, Global Trade Center, 36 Beishanhuan Rd. East, Dongcheng District, Beijing 2 II. Financial Highlight 1. Major Accounting Data of Year 2011 (in RMB Yuan) Items Amount Operation profit 70,899,738.39 Total profit 79,160,090.12 Net profit attributable to the shareholders of the listed company 65,503,925.58 Net profit attributable to the owners of the PLC after deducting of non-recurring 51,005,479.89 gains/losses Cash flow generated by business operation, net -57,045,495.85 Note: The total of non-recurring incomes was of RMB14,498,445.69. The details are as followings: In RMB Non-recurring gain and loss items Amount Gain/loss of non-current assets -690,807.78 Government subsidies accounted into current gain/loss account, other than those closely related to the Company’s common business, comply with the national policy and continues to enjoy at 1,988,650.00 certain fixed rate or amount. Gain/loss from debt reorganization 3,959.20 Gain/loss from change of fair value of transactional asset and liabilities, and investment gains from disposal of transactional financial assets and liabilities and sellable financial assets, other 99,342.47 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 in follow-up 10,815,131.20 measurement Gain/loss from commissioned loans 0.00 Other non-business income and expenditures other than the above 6,080,071.96 Other gain/loss items satisfying the definition of non-recurring gain/loss account 878,478.35 Influenced amount of minority shareholders’ equity -60,101.30 Influenced amount of income tax -4,616,278.41 Total 14,498,445.69 3 2. Influences of adjustment on net profit and net asset according to IAS In RMB Net profit attributable to the shareholders of Owners’ equity to shareholders of the listed the listed company company Current term Amount of last term End of term Beginning of term On IAS 65,503,925.58 55,063,374.25 1,078,606,842.89 1,014,754,137.31 On domestic accounting 65,503,925.58 55,063,374.25 1,073,843,444.65 1,009,990,739.07 standard Individual and total of adjustment according to IAS Capitalizing of borrowing 0.00 0.00 4,763,398.24 4,763,398.24 expenses Total of differences between the IAS and 0.00 0.00 4,763,398.24 4,763,398.24 domestic accounting standard Statement on differences The different of owners’ equity attributable to the listed company on IAS was mainly the part between the IAS and of interest capitalized in years previous to application of the new accounting standard on Chinese Accounting January 1, 2007. Standard 3. Major financial data and accounting indices for latest 3 years In RMB Increase/decrease 2011 2010 2009 (%) Turnover (yuan) 1,348,776,366.53 1,161,933,356.48 16.08% 912,979,118.31 Business profit (RMB) 70,899,738.39 49,637,958.64 42.83% 43,189,525.60 Gross profit (RMB) 79,160,090.12 67,655,340.40 17.00% 45,108,302.29 Net profit attributable to shareholders of the listed 65,503,925.58 55,063,374.25 18.96% 44,052,511.46 company (yuan) Net profit attributable to the shareholders of the listed company and after deducting 51,005,479.89 25,603,881.05 99.21% 21,304,916.08 of non-recurring gain/loss(RMB) Net Cash flow generated by -57,045,495.85 -31,187,262.97 46,698,915.92 business operation (RMB) Increase/decrease End of 2011 End of 2010 End of 2009 (%) Total asset (RMB) 2,163,325,598.14 1,991,161,158.84 8.65% 1,482,814,012.11 Total liability (RMB) 1,011,268,487.56 896,832,951.52 12.76% 768,403,722.42 Owners’ equity attributable to the shareholders of the listed 1,073,843,444.65 1,009,990,739.07 6.32% 623,295,593.57 company (yuan) 4 Total capital share (shares) 756,909,905.00 504,606,604.00 50.00% 426,786,359.00 4. According to the requirement of Regulations of Information Disclosure No.9 (Revised 2010) issued by China Securities Regulatory Commission, the Company net income on asset ratio and basic income per share and diluted income per share on weighted average basis in year 2011 were: Earnings per share (yuan/share) Weighted average net income/asset ratio (%) Basic earnings per Items share Diluted earnings per share Net profit attributable to common shareholders of 6.28% 0.09 0.09 the Company Net profit attributable to the common owners of the PLC after deducting 4.89% 0.07 0.07 of non-recurring gains/losses 5. Change of shareholders’ equity in 2011 (RMB Yuan) Total of equity Surplus attributable to the Items Share capital Capital reserves Retained profit reserves owners of the parent co. Beginning 504,606,604 334,434,014.92 17,834,977.97 153,115,142.18 1,009,990,739.07 of term Increased 252,303,301 6,841,099.19 58,662,826.39 317,807,226.58 this term Decreased - 253,954,521.00 - 253,954,521.00 this term End of 756,909,905 80,479,493.92 24,676,077.16 211,777,968.57 1,073,843,444.65 term 1. Profit of the year 1. Transferred 2. Transferred from reserves providing of Cause of Transferred Profit of the from reserves 2. Drop of fair surplus change from reserves year 3. Drop of fair value of financial reserves value of financial asset for sale asset for sale 5 III. Particulars About the Capital Share and Shareholders 1. Statement of Changes in Shares In 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 trade restriction 48,014,828 9.52% 24,007,414 -71,917,800 -47,910,386 104,442 0.01% conditions 1. State-owned shares 2. State-owned legal person shares 3. Other domestic 47,945,200 9.50% 23,972,600 -71,917,800 -47,945,200 shares Incl. Non-government 18,200,000 3.61% 9,100,000 -27,300,000 -18,200,000 domestic legal person shares Domestic natural 29,745,200 5.89% 14,872,600 -44,617,800 -29,745,200 person shares 4. Share held by foreign investors Incl. Shares held by foreign legal persons Foreign natural person shares 5. Management 69,628 0.01% 34,814 34,814 104,442 0.01% shares II. Shares without trading limited 456,591,776 90.48% 228,295,887 71,917,800 300,213,687 756,805,463 99.99% conditions 1.