Through our contractually controlled subsidiaries, Fujian Province Baisha Fire Control Industrial Trading Co., Ltd. (“Baisha Fujian”) and Fujian Fulian Machinery Co., Ltd. (“Fulian Machinery”), we operate a fire safety products company in the People’s Republic of China, providing “one-stop” fire safety solutions from design, production, sale and installation of fire protection products and systems to after-sales maintenance of common and patented fire extinguishing systems. We manufacture over forty different fire safety products which are primarily divided among four categories: (1) gaseous fire protection systems and products, (2) fire protection doors and windows, (3) fire hydrant systems and products and (4) traditional fire protection products and systems such as fire hydrants, fire hoses and fire-fighting lances.
We market our products to commercial, industrial and residential users. We distribute our fire safety products in twenty-one (21) provinces, direct-controlled municipalities and autonomous regions of mainland China. Our customers include Chinese railway operators, financial institutions, telecom companies, residential and commercial building owners and electricity plants. We have provided fire safety products and services for more than 4,000 key projects across China. Our company as has been designated an authorized manufacturer of special locomotive fire facilities by CSR Qishuyan Locomotive Co., Ltd., an affiliate of China South Locomotive & Rolling Stock Corporation Limited, one of the two locomotive manufacturing companies in China, which allows us to sell our products to CSR Qishuyan Locomotive Co., Ltd for installation in its locomotives.
In 2010, our Company was recognized as one of the Top Ten Chinese Fire Protection Brands by HC International. Our “Yuan Hong” trademark is recognized as a “China Well-Known Trademark.” Trademarks in China may be identified as well-known by the Trademark Office of the SAIC or the People’s Court. Our “Yuan Hong” trademark was recognized as a “China Well-Known Trademark” by Changde Intermediate People's Court. Five elements are considered during the accreditation process: public awareness, duration of use, extent of publicity efforts, previous records of protection as a well-known trademark, and other relevant factors. China’s membership in the “Paris Convention for the Protection of Industrial Property” since 1984 gives special legal protection to well-known trademarks, both domestically and internationally. There are several key additional protections for well-known trademarks, such as cross-class protection, protection against bad faith registration, protection against registration for domain name or company name by other entities.
We are the first “High- and New-Technology Enterprise” in the fire safety products industry of Fujian Province, a recognition awarded jointly by Fujian Provincial Department of Science and Technology, Fujian Provincial Department of Finance, Fujian Provincial Government, State Administration of Taxation and Fujian Provincial Taxation Bureau, pursuant to the Regulations Regarding High- and New-Technology Enterprise Designation promulgated by the Department of Technology, the Department of Treasury and the State Administration of Taxation in April 2008. Through such award, the Chinese government aims to promote science and technology and economy development through industrial innovations. This award comes with strict qualification requirements, including the ownership in the intellectual property of its core technology, a set percentage of employees having received university education, a set percentage of annual net income earmarked for R&D, a set percentage of revenues coming from high-tech products and services, among others. High- and New-Technology Enterprises regularly receive preferential treatments in the areas of taxation, human resources and funding, among others, from the various levels of the government. See “Risk Factor—Our business benefits from certain government incentives” for a discussion of the effects and extent of such preferential tax treatment.
