smart orientalfan xin fang2

1、an account of source of fundsapplicant: ms. fan xin fangfor eb-5 investment immigration applicationtothe united states of america20 march, 2011香港九龍尖沙咀彌敦道70號金冠大廈12樓a電話：(852) 3150 4069手機：(852) 9681 5777傳真：(852) 3177 0501 flat a, 12/f, golden crown court, 70 nathan road, tst, kowloon, hong kong tel: (8

2、52) 3150 4069cell: (852) 9681 5777fax: (852) 3177 0501f銳意東方會計師事務所smart oriental cpa & co.certified public accountantsms. fan xin fangno. 359, north beidou road,taoyuan street, ninghai county,ningbo city,zhejiang province, peoples republic of china.20 march, 2011an account of source of funds for ms.

3、fan xin fangdear madam,upon your request, we have completed the enclosed account of source of funds for your investment in eb-5 immigration application for the united states of america (the report).we have performed the procedures set out in item 1.2 of the report that we regarded as necessary.the r

4、eport is solely prepared for the submission to the us immigration authority, for the purpose of your immigration application to the united states of america under the eb-5 program. the report should not, in whole or in part, be published for, or quoted to, any other parties without our prior written

5、 consent or used for any other purpose. we do not accept any responsibility to any other party to whom the report may be shown, or to those who may obtain a copy for any other purpose.yours sincerely,for and on behalf of smart oriental cpa & co.certified public accountantscontents1 introduction 1.1

6、term of reference 1.2 procedures 1.3 restriction of use 2 an account of source of funds2.1 summary of work performed 2.2 applicants and her father, mr. fan da fas background 2.3 factual findings on business information 3findings on the source of funds of usd 538,000 for the applicants immigration to

7、 the united states of america under eb-5 3.1advances from ningbo dafa construction co., ltd. (the company)3.2bank records of the advances from the company to the applicants personal bank account in china3.3money from the applicants personal bank account in china to her bank account in hong kong thro

8、ugh 11 individuals4 appendices 1. introductionsmart oriental cpa & co. is a firm of registered certified public accountants in hong kong. smart oriental has substantial experience in providing auditing services related to immigration to australia canada and the united states of america, etc. 1.1 ter

9、m of referencethe report including the appendices has been prepared upon the request of ms. fan xin fang (the applicant).the applicant engaged smart oriental cpa & co. to perform an independent review of her source of funds totaling usd 538,000, in relation to her immigration application to the unit

10、ed states of america under the eb-5 program.the primary objective of the report is to summarize the supported findings on the following： the financial background of the applicant; the income source of the applicant; the transaction history for funding the applicants investment under eb-5 immigration

11、 application; source of funds totaling usd 538,000 for the applicants immigration application to the united states of america under eb-5 the applicants identity information.1.2 procedureswe have performed the following procedures: gathered general information on the applicants property; identified t

12、he income sources for funding the applicants investment under eb-5 immigration application; examined relevant documents of income sources; examined document of the applicants fund for investment under eb-5 immigration application as specified in the report; reviewed the relevant information on the f

13、inancial background of the applicant; reviewed the applicants bank records;we hereby emphasize that the procedures performed were confined to providing explanations on the source of funds of usd 538,000, for the applicants investment in her immigration application to the united states of america und

14、er the eb-5 program. therefore, the report does not intend to, and neither should it be constructed as to provide or disclose all information required by the applicant. furthermore, such procedures do not constitute an audit, examination or review in accordance with the international standards on au

15、diting, and we do not express an opinion or make any other form of representation as to the completeness of the information provided in the report, as well as the sufficiency of the procedures in meeting all the requirements of the u.s. immigration department.the data included in the report have bee

16、n extracted from the information provided to us by the applicant. unless otherwise stated in the report, we have not sought independent confirmation of the accuracy of any of the information provided by the applicant. hence, neither our firm, nor any of its members or employee, would accept responsi

17、bility in any way for the accuracy of the information.furthermore, the report reflects events and circumstance, as they existed on the report date. we are under no obligation to update the report or to revise the information contained herein for events or transactions occurred subsequently to the da

18、te of this report.unless otherwise stated, all amounts in the report are expressed in renminbi yuan, the official currency of peoples republic of china (the prc).1.3 restriction of usethe report is prepared solely for the purpose of the applicants investment in her immigration application to the uni

19、ted states of america under the eb-5 program, and should not ,in whole or in part ,be published for ,or quoted to ,any other parties without our written consent or used for any other purpose. we do not accept responsibility for any other parties to whom the report may be shown or to those who may ob

20、tain a copy.2. an account of source of funds2.1 summary of work performed we conducted a site visit to the business place of the company in no. 359, north beidou road, taoyuan street, ninghai county, ningbo city, zhejiang, prc in january, 2011. we discussed with the applicant and her father, mr. fan

21、 da fa about the business and operations of the company. we also examined supporting documents on the funds of usd 538,000 and a number of original documents as specified in this report, including: business license of ningbo dafa construction co., ltd. (the company); articles of association of the c

22、ompany; capital verification reports of the company; basic information of the company; local and state tax registration certificate of the company; prc management financial statements of the company for the years/period ended 31 december, 2006, 2007, 2008, 2009, and 30 november, 2010. the companys r

23、esolution on shareholders meeting on loans of rmb 1,700,000 and rmb 2,000,000 to the applicant and mr. fan da fa dated 15 february, 2011 respectively; the gift agreement of donating rmb 2,000,000 to the applicant from the applicants father, mr. fan da fa; the check counterfoil of the company at bank

24、 of ningbo for the advance of rmb 3,700,000 to the applicant on 18 february, 2011; bank statement showing deposits of rmb 3,700,000 to the applicants bank account on 18 february, 2011; bank records showing the transfer of usd 538,000 to us bank from applicants hong kong bank account on 25 february,

25、2011.2.2 applicant and her father, mr. fan da fas background based on our work, we report our findings below:applicants personal informationnamefan xin fangsexfemale identity card noate of birth11 september, 1980place of birthzhejiang province, prcaddressno.39, 3 group, luojia vi

26、llage, yuelong street, ninghai county, zhejiang province, prcmr. fan da fas personal informationnamefan da fasexmale identity card noate of birth3 february, 1950place of birthzhejiang province, prcaddressno.39, 3 group, luojia village, yuelong street, ninghai county, zhejiang pro

27、vince, prcmr. fan da fa is the father of the applicant. he borrowed the cash advance of rmb 2,000,000 from the company and donated the money to the applicant for her immigration application to the united states of america under eb-5. meanwhile, the applicant herself borrowed the cash advances of rmb

28、 1,700,000 from the company.we enclose herewith the certified true copy of prc identity card of the applicant and her father per appendix 1 and 2 with the english translation.we also enclose herewith the certified true copy of the gift agreement of rmb 2,000,000 to the applicant from mr. fan da fa p

29、er appendix 3. 2.3 factual findings on business information the details of the company were summarized below:name of the companyningbo dafa construction co., ltd.registration number 330226000005075registered addressno. 359, north beidou road, chengguan, ninghai county, zhejiang, prctype of businessl

30、imited liability companylegal representativefan da fadate of establishment:5 june, 1995registered capitalrmb 6,000,000the company was incorporated as a limited liability company on 5 june, 1995 under the name of ninghai dafa shed house decoration co., ltd. according to the company name change note d

31、ated 13 april, 1999, its name changed into ninghai dafa steel structure shed house production co., ltd. then according to the company name change note dated 24 july, 2000, its name again changed into ningbo dafa steel structure co., ltd. its name finally changed into ningbo dafa construction co., lt

32、d. according to the company name change note dated 10 april, 2009.we enclose herewith the certified true copy of the companys latest business license, articles of association dated 21 march, 2009, company name change note dated 13 april, 1999, 24 july, 2000 and 10 april, 2009, basic information and

33、local and state tax registration certificate per appendix 4, 6, 7, 16 and 17 respectively with the english translation thereof enclosed per appendix 5. contributed capital of the applicants and mr. fan da fas business, ningbo dafa construction co., ltd.according to the capital verification report da

34、ted 5 may, 1995, the registered capital of the company was rmb 600,000. mr. fan da fa took up share of rmb 540,000, which represents 90% of total shareholdings of the company.according to the capital verification report dated 21 july, 2000, the registered capital of the company was increased into rm

35、b 3,080,000. mr. fan da fa took up share of rmb 2,780,000, which represents 90.26% of total shareholdings of the company.according to the share transfer agreement dated 6 march, 2003, ye xiu wei transferred rmb 300,000 to the applicant.according to the capital verification report dated 9 april, 2009

36、, the registered capital of the company was increased to rmb 6,000,000. mr. fan da fa took up share of rmb 2,880,000, which represents 48% of total shareholdings of the company, while the applicant took up share of rmb 900,000, which represents 15% of total shareholdings of the company.the registere

37、d capital of the company is shown as followsshareholders namecapital balanceas at 5 may, 1995movementas at 21 july, 2000capital balance as at 21 july, 2000rmb%rmbrmb%fan da fa540,000902,240,0002,780,00090.26fa xin fang-ye xiu wei60,00010240,000300,0009.74fan yong xin-you qiao fei-total600,0001002,48

38、0,0003,080,000100:shareholders namecapital balanceas at 21 july, 2000movementas at 6 march, 2003capital balance as at 6 march, 2003rmb%rmbrmb%fan da fa2,780,00090.262,780,00090.26fa xin fang-300,000300,0009.74ye xiu wei300,0009.74(300,000)-fan yong xinyou qiao feitotal3,080,000100-3,080,000100shareh

39、olders namecapital balanceas at 6 march, 2003movementas at 9 april, 2009capital balance as at 9 april, 2009rmb%rmbrmb%fan da fa2,780,00090.26100,0002,880,00048fa xin fang300,0009.74600,000900,00015ye xiu wei-fan yong xin1,320,0001,320,00022you qiao fei900,000900,00015total3,080,0001002,920,0006,000,

40、000100we are not aware of any change in the companys ownership since 9 april, 2009.we enclosed herewith the certified true copies of capital verification reports dated 5 may, 1995, 21 july, 2000 and 9 april, 2009 per appendix 9, 11 and 15 respectively, with the english translation thereof enclosed p

41、er appendix 8, 10 and 14 respectively. in addition, we enclosed herewith the certified true copies of share transfer agreement dated 6 march, 2003 per appendix 13, with the english translation thereof enclosed per appendix 12.nature of businessningbo dafa construction co., ltd. (the company) is prin

42、cipally engaged in construction material, steel structure production and construction engineering.organisation structure, the applicant and her father, mr. fan da fas position in the companythe applicant is the supervisor of the company, while her father, mr. fan da fa is the general manager of the

43、company. the organization chart of the company is enclosed per appendix 20. summary of financial informationwe extracted the following financial information of ningbo dafa construction co., ltd. (the company) for the years/period ended 31 december, 2006, 2007, 2008, 2009, and 30 november, 2010 as fo

44、llows:financial highlights 30 november, 2010 31 december, 200931 december, 200831 december, 200731 december, 2006rmbrmbrmbrmbrmbrevenue 18,845,271.2619,976,132.6017,976,132.6020,782,516.4519,927,181.71profit before tax3,102,549.523,468,485.722,359,796.432,681,071.343,522,018.19income tax775,637.3886

45、7,121.43778,732.82884,753.541,162,266.00net profit after tax2,326,912.142,601,364.291,581,063.611,796,317.802,359,752.19retained earnings11,390,083.559,063,171.416,461,807.124,880,743.523,084,425.72we enclose herewith the certified true copies of the prc management financial statements for the years

46、/period ended 31 december, 2006, 2007, 2008, 2009, and 30 november, 2010 per appendix 19 with the english translation of the prc management financial statements for the years/period ended 31 december, 2006, 2007, 2008, 2009, and 30 november, 2010 per appendix 18.3findings on the source of funds of u

47、sd 538,000 for the applicants immigration to the united states of america under eb-5 3.1 advances from the companyaccording to the applicant, the investment of usd 538,000 for the immigration application to the united states of america under eb-5 is sourced from the companys loan and her father, mr.

48、 fan da fas donation. we enclose herewith the certified true copy of the resolution of shareholders meeting of the company dated 15 february, 2011 for approving cash advance of rmb 1,700,000 and rmb 2,000,000 from the company to the applicant and mr. fan da fa per appendix 22, with the english trans

49、lation thereof enclosed per appendix 21.according to the financial statement as at 30 november, 2010, the retained earning of the company was rmb 11,390,083.55. mr. fan da fas share of retained earnings of the company based on 48% of shareholding was rmb 5,467,240.11, which is more than the amount o

50、f cash advance to mr. fan da fa. meanwhile, the applicants share of retained earnings of the company based on 15% of shareholding was rmb 1,708,512.53.the cash advance of rmb 1,700,000 and rmb 2,000,000 from the company is together deposited into the applicants personal bank account of 6223161800201

51、715 with bank of ningbo.in prc, shareholders loan is not subject to individual income tax, whereas dividends upon distribution are subject to 20% prc income tax in the hands of the recipient. therefore, for tax deferral and personal income tax planning purposes, both the applicant and mr. fan da fa

52、decided to borrow the required funds instead of receiving the paid funds as dividend from the company for ms. fan xin fangs eb-5 application before she is assured of the success of the eb-5 application. we understand from the applicant and her father that should the eb-5 application be unsuccessful,

53、 they would use the money refunded from the escrow bank account to repay their shareholders loans without incurring any personal income tax prematurely.3.2bank records of the advances from the company to the applicants personal bank account in chinawe noted from the check counterfoil of the company

54、per appendix 26 that rmb 3,700,000 was withdrawn on 18 february, 2011 from the companys bank account 60010122000199903 with bank of ningbo, zhejiang city, prc. we also noted that rmb 3,700,000 was deposited into the applicants personal bank account of 6223161800201715 with bank of ningbo.check counterfoil per appendix 24the applicants bank account statement per appendix 25date of withdrawalrmbdate of depositrmb18 february