深圳中冠纺织印染股份有限公司
Shenzhen Victor Onward Textile Industrial Co., Ltd.
2011 Annual Report
April 2012
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Important Notes
The Board of Directors of the Company hereby guarantees that there are no misstatement, misleading
representation or important omissions in this report and shall assume joint and several liability for the
authenticity, accuracy and completeness of the contents hereof.
Shinewing Certified Public Accountants audited the Financial Report of the Company and issued
the standard unqualified Auditor‘s Report.
Mr. Hu Yongfeng, board chairman and General Manager, Mr.Zhang Jinliang, Deputy General Manager , Mr.
Ren Chengzheng , Manager of Financial Dept of the Company represent and warrant the financial report in
this report is true and complete.
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Contents
Section 1. Brief Introduction of the Company
Section II. Summary of Accounting Highlights and Business Highlights
Section III Changes in Share Capital and Particulars about Shareholders
Section IV. Particulars about Directors, Supervisors, Senior Executives and staff
Section V Administrative Structure
Section VI. Particulars about Shareholders‘ General Meeting
Section VII Report of the Board of Directors
Section VIII Report of the Supervisory Committee
Section IX Important Events
Section X. Financial Report
Section X1. .List of Documents Available for Inspection
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Section I Brief Introduction of the Company
(I) Name of the Company in Chinese: 深圳中冠纺织印染股份有限公司
Name in English:Shenzhen Victor Onward Textile Industrial Co., Ltd.
Abbreviation of English name of the Company: VICTOR ONWARD
(II) Legal Representative: Hu Yongfeng
(III) Secretary to the Board of Directors : Zhang Jinliang
Contact address: Room 1308, Hualian Building, No.2008 Shennan Zhong Road , Shenzhen
Tel：（755）83668425
Fax: (755) 83668427
E-mail: zhangjl@udcgroup.com
Securities affair representative: Wu Xia
Contact address: Room 1308, Hualiang Building, No.2008 Shennan Zhong Road, Shenzhen
Tel：（755）83667895
Fax：（755）83668427
E-mail: wuxia_08@126.com
IV. Registered address: 26 Kuipeng Road, Kuiyong Town, Longgang District, Shenzhen
Business address: 26 Kuipeng Road, Kuiyong Town, Longgang District, Shenzhen
Contact address: Room 1308, Hualiang Building, No.2008 Shennan Zhong Road, Shenzhen
Zip Code: 518119
Website: http:// www.chinaszvo.com
E-mail：szvo@chinaszvo.com
(V) Designated newspapers for information disclosure: Securities Times and Hong Kong
Commercial Daily.
Designated website for information disclosure: http://www.cninfo.com.cn
The place for preparing and placing the annual report: Office of the board secretary of the
Company
(VI) Stock exchange for listing of the stocks of the Company: Shenzhen Stock Exchange
Stock abbreviation: ST Shenzhen Victor Onward A, ST Shenzhen Victor Onward B
Stock code : 000018, 200018
VII. Other Relevant Information of the Company
1. The date and place when and where the Company made its first registration:
The Company was first registered as Shenzhen Victor Onward Printing and Dyeing Co., Ltd. in
Shenzhen in 1984.
The Company changed its registration and was registered as Shenzhen Victor Onward Textile
Industrial Co., Ltd. in Shenzhen in 1991.
2. Registration No. of Legal Entity Business License: 440301501131182
3. Tax Registration No.: 440301618801483
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4. The name and business address of the Certified Public Accountants engaged by the Company
Name: Shinewing Certified Public Accountants
Address:Room 4001A,Lianhe Plaza, Futian District, Shenzhen, China
Section II. Summary of Accounting Highlights and Business Highlights
I. Main Profit Indicators of 2011
Unit：RMB
Items Amount
Operating profit -17,466,634
Total profit -17,466,414
Net profit attributable to the shareholders of the listed company -17,361,593
Net profit after deducting of non-recurring gain/loss attributable to
-17,375,777
the shareholders of listed company
Cash flow generated by business operation, net 4,202,430
Difference between IFRS and PRC GAAP :
Unit:RMB
Net profit attributable to shareholders of Owners‘ equity attributable to
listed Company shareholders of listed company
Amount in current Amount at the Amount at the
Amount in last period
period priod-end period-begin
Pursuant to overseas
-17,248,507 4,220,760 112,420,637 135,858,634
accounting standards
Pursuant to Chinese
-17,361,593 4,102,924 119,047,096 142,929,499
accounting standards
Subitem and total adjusted pursuant to international accounting standards::
Total of differences
between the IAS and
113,086 117,836 -6,626,459 -7,070,865
domestic accounting
standard
Statement on
differences between
113,086 117,836 -6,626,459 -7,070,865
the IAS and Domestic
accounting Standard
Explanation on
The influence of appreciation through appraisal of workshop and 2 parking spaces in
difference between
Hong Kong in 1992.
IFRS and PRC GAAP
Items of deducting non-recurring gains and losses and the involved amounts are as following:
(Unit：RMB)
Items of non-recurring gains and losses Amount(2011) Amount (2010) Amount (2009)
Gains and losses of non-recurring -522.00 -39,237.00 93,320.00
Except the effective hedge business
related to the normal operation business
of the Company, the profit and loss in the
changes of fair values caused by the 13,965.00 257,537.00 343,265.00
holding of tradable financial assets and
tradable financial liabilities as well as the
investment returns in disposal of tradable
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financial assets, tradable financial
liabilities and saleable financial assets
Single impairment test for impairment of
receivables transferred back to 0.00 0.00 172,943.00
preparation
Other non-operating income and
741.00 38,860.00 -330,568.00
expenditure beside for the above items
Amount of influence of minority interests 0.00 -18,660.00 1,596.00
Total 14,184.00 238,500.00 280,556.00
2. Highlights of accounting data and financial indicators in the latest three years
Main accounting data Unit：RMB
Changed over
2011 2010 2009
last year（％）
Total income
9,850,484.00 9,351,110.00 5.34% 27,517,759.00
operating
Operating profit -17,466,634.00 2,328,181.00 -850.23% 11,905,069.00
Total profit -17,466,414.00 2,326,231.00 -850.85% 11,667,821.00
Net profit
attributable to the
-17,361,593.00 4,102,924.00 -523.15% 12,090,678.00
shareholders of the
listed company
Net profit after
deducting of
non-recurring
gain/loss -17,375,777.00 3,864,424.00 -549.63% 11,810,122.00
attributable to the
shareholders of
listed company
Cash flow generated
by business 4,202,430.00 237,582.00 1,668.83% -866,440.00
operation, net
Changed over
End of 2011 End of 2010 last year（％） End of 2009
Gross assets 172,238,794.00 195,732,419.00 -12.00% 201,318,234.00
Gross Liabilities 54,565,212.00 54,114,515.00 0.83% 57,751,198.00
Shareholders‘ equity
attributable to
119,047,096.00 142,929,499.00 -16.71% 143,058,948.00
shareholders of the
listed company
Capital stock 169,142,356.00 169,142,356.00 0.00% 169,142,356.00
Main Financial Indicators Unit：RMB
Changed over
2011 2010 2009
last year（％）
Basic gains per
-0.10 0.02 -600.00% 0.07
share(RMB/Share)
Diluted gains per
-0.10 0.02 -600.00% 0.07
share(RMB/Share)
Basic earning per share
after deducting of
-0.10 0.02 -600.00% 0.07
non-recurring
gains/losses(RMB/Share)
Weighted average net
-12.93% 2.80% -15.73% 8.90%
asset earning ratio（%）
Net income on asset, -12.94% 2.64% -15.58% 8.69%
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weighted and deducted
non-recurring
gain/loss(%)
Net cash flow per share
generated by business 0.025 0.001 2,400.00% -0.005
operation (RMB/Share)
Changed over
End of 2011 End of 2010 last year（％）
End of 2009
Net asset per share
attributable to
0.70 0.85 -17.65% 0.85
shareholders of the listed
company(RMB/Share)
Assets liabilities ratio 31.68% 27.65% 4.03% 28.69%
3. Return Ratio and Earnings per share
Earnings per share
Return Ratio on Net asset,
Profit in the report peirod Basic gains per Diluted gains per
Weighted(%)
share share
Net profit attributable to the
shareholders of the parent -12.93 -0.10 -0.10
Company
Net profit after deducting
non-recuring gains and losses -12.94 -0.10 -0.10
attributable to the shareholders
4. Particulars about Changes in Shareholders' Equity in the Report Period
Unit：（RMB）
Owner‘s equity Attributable to the Parent Company Minor Total of
Items Attributable shareholders‘ owners‘
Share Capital Other equity equity
profit
Balance
at the
beginning 169,142,356 39,872,534 26,704,791 -98,665,017 5874835 -1,311,595 141,617,904
of current
year
Changed
in the -130,061 -17,361,593 -6,390,749 -61,919 -23,944,322
current
year
Balance
at the end
169,142,356 39,742,473 26,704,791 -116,026,610 -515,914 -1,373,514 117,673,582
of this
term
Section III. Particulars about Changes in Share Capital and Shareholders
I. The changes in share capital
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(1) The changes in share capital
Unit: shares
Year-beginning Increase or decrease this time Year-end
(+/-)
Quantity Proportion% Other Subtotal Quantity Proportion%
I. Share with
conditional 0 0 0 0 0 0
subscription
1.State-owned shares 0 0 0 0 0 0
2.Staee-owned legal
0 0 0 0 0 0
person shares
3.Other domestic
0 0 0 0 0 0
shares
Of which：
Domestic legal person
0 0 0 0 0 0
shares
Domestic natural
0 0 0 0 0 0
person shares
4.Share held by
0 0 0 0 0 0
foreign investors
Of which：
Foreign legal person
0 0 0 0 0 0
shares
Foreign natural person
0 0 0 0 0 0
shares
II. Shares with
unconditional 169,142,356 100 0 0 169,142,356 100
subscription
1.Common shares in
99,720,453 58.96 0 0 99,720,453 58.96
RMB
2.Foreign shares in
69,421,903 41.04 0 0 69,421,903 41.04
domestic market
3.Foregin shares in
0 0 0 0 0 0
overseas market
4.Other 0 0 0 0 0 0
III. Total of capital
169,142,356 100 0 0 169,142,356 100
shares
II. Share issue and listing
(1) The Company has never issued shares or derived securities within the previous three years as
of the end of the report period.
（2） The total number of the shares of and its structure of the Company remained unchanged
within the previous three year by the end of the report period.
III．Introduction to shareholders
1. Total number of shareholders at the end of the period:
At the end of 2011, the Company had 11,710 registered shareholders in total including 7,078
shareholders of A shares and 4,632 shareholders of B shares.
2．At the end of 2011,,Top 10 shareholders and top 10 holders of unconditional shares
Unit：Shares
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Total By the end of the last month of the
number of 11,710 announcement date of the annual report 11,864
shareholders period
Top 10 holders of shares
Increase or
Nature of Share Conditional Pledged
Name of the shareholder Total shares decrease in
shareholder proportion % the year shares or frozen
Union Holdings Co., Ltd. Other 25.51% 43,141,032 0 0 0
STYLE-SUCCESS Foreign
14.46% 24,466,029 0 0 0
LIMITED shareholder
Shenzhen Textile State-owned
5.64% 9,543,394 -196,200 0 0
(Group)Holdings Ltd shareholder
Rich Crown Investment Co., Foreign
3.62% 6,114,556 0 0 0
Ltd. shareholder
Union Development Group
Other 3.44% 5,821,089 0 0 0
Co., Ltd.
Liuzhou Jiali Real estate
Other 1.93% 3,268,700 +1,988,600 0 Unknown
Development Co., ltd.
Foreign
Shing Ying Chieh 0.92% 1,550,362 -148,620 0 Unknown
shareholder
GUOTAI JUNAN
Foreign
SECURITIES(HONGKONG) 0.87% 1,475,055 0 0 Unknown
shareholder
LIMITED
Liuzhou Ruiheng
Other 0.82% 1,380,000 0 0 Unknown
Mechatronics Co., Ltd.
Foreign
KGI ASIA LIMITED 0.56% 944,109 0 0 Unknown
shareholder
Top 10 holders of unconditional shares
Unconditional
Name of the shareholder Type of shares
shares
Union Holdings Co., Ltd. 43,141,032 RMB Common shares
STYLE-SUCCESS LIMITED 24,466,029 Foreign shares placed in domestic exchange
Shenzhen Textile (Group)Holdings Ltd 9,543,394 RMB Common shares
Rich Crown Investment Co., Ltd. 6,114,556 Foreign shares placed in domestic exchange
Union Development Group Co., Ltd. 5,821,089 RMB Common shares
Liuzhou Jiali Real estate Development Co.,
3,268,700 RMB Common shares
ltd.
Shing Ying Chieh 1,550,362 Foreign shares placed in domestic exchange
GUOTAI JUNAN
1,475,055 Foreign shares placed in domestic exchange
SECURITIES(HONGKONG) LIMITED
Liuzhou Ruiheng Mechatronics Co., Ltd. 1,380,000 RMB Common shares
KGI ASIA LIMITED 944,109 Foreign shares placed in domestic exchange
Notes to the related relationship between the The controlling shareholder of the above-mentioned largest
shareholders or their concerted action shareholder Shenzhen Union Holdings Ltd.and fourth shareholder
Rich Crown Investment Co., Ltd.. Is Union Development Group Ltd.
3. Introduction to the largest shareholder of the Company
Name of the largest shareholder of the Company: Shenzhen Union Holdings Co., Ltd.
Legal representative: Dong Binggen
Date of establishment: September 11, 1989
Business scope: Production of and dealing in various fabrics, garments chemical fibers and
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textile equipment, domestic commerce, material supply and marketing (excluding monopolized
commodities), management of self-owned properties, processing with imported materials and
designs, internal introduction and foreign cooperation, assembling with imported spare parts and
cooperation in compensation trade.
Registered capital：RMB 1123.8877 million
Nature of enterprise: Share-holding system
Registered address: Shenzhen
4. Particulars about the actual controller of the Company
In the report period, the actual controller of the Company remains unchanged.
Name of the actual controller: Union Development Group Co., Ltd.
Legal representative: Dong Binggen
Date of establishment: August 1983
Registered capital：RMB 90.61 million
Business scope: Production and sales of chemical, textile and garment products (the license of
product site is subject to separate application), import and export business, contracting of project
construction, import and export of necessary engineering equipment and materials, export of
labor, external investment, technical consulting services, real estate development and sales
within the scope of land use right legally obtained, property management and lease services and
sales of automobiles (including cars).
5.The property right and controlling relationship between Union Development Group Ltd. and
the Company is as follows:
Hangzhou Jinjiang Group
Co., Ltd.
20.89%
Union Development Group Co.,
Ltd.
31.32% 99.99%
3.44%
Union Holdings Co., Ltd. Rich Crown Investment Co.,
Ltd.
25.51% 3.62%
Shenzhen Victor Onward Textile Industrial Co., Ltd.
6.Statement of Union Group on its shareholders, shareholder structure and actual controller:
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Throughout the years, due to constant reform of economic management system and quick
development of socialist market economy, the Group has experienced management mechanism 's
adjustment and equity structure change for many times. In 1993 when the State Council carried
out structural reform, Ministry of Textile Industry was dissolved and China Textile Federation
was established. The Group's relationship of subordination continued. After China Textile
Federation was dissolved in 1998, the Group was put under the supervision of Central Enterprise
Industrial Committee. In 2003, State-owned Assets Supervision and Administration Commission
of the State Council was established. In April 2005, The Group became one of the enterprises
under its supervision. State-owned Assets Supervision and Administration Commission of the
State Council transferred 12.09% state-owned equity of Union Group to OCT Group Company
and authorized OCT Group Company to perform the capital contributor's responsibilities on
behalf of 12.09% state-owned equity. OCT Group Company became the largest shareholder of
Union Group.
Union Group has been engaged in textile and garment industry for long term. Due to fierce
market competition, state-owned capital has left or is leaving textile and garment industry. The
provincial management mechanism to which the Group's shareholders are subject has also
undergone great change. From 2004, some shareholders of the Group as promoters began to
assign shares of Union Group in succession according to the change of situation and their own
conditions. Some private enterprises became the shareholders of Union Group. By November
2005, Hangzhou Jinjiang Group Co., Ltd. acquired 20.89% equity of Union Group and became
the largest shareholder. OCT Group became the second largest shareholder.
(1) At present, Union Group has 16 corporate shareholders. The particulars are as follows:
Proportion of Remarks
Amount of capital
capital
No. Name of shareholder contribution
contribution
(RMB‘0000)
(%)
1 Hangzhou Jinjiang Group Co., Ltd. 1,892.8120 20.8896 Private
2 OCT Group 1,094.9500 12.0842 State-owned
3 Henan Fuxin Investment Co., Ltd. 984.2567 10.8600 Private
4 Xian International Intrust Co., Ltd. 926.0019 10.2196 State-owned
5 Shandong Textile Industrial Association 569.9196 6.2898 State-owned
6 Hebei National assets Holding Co., Ltd. 531.4800 5.8655 State-owned
7 Hebei National assets Holding Co., Ltd. 530.0000 5.8492 Private
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8 Heilongjiang Textile Industry Association 500.0000 5.5181 State-owned
9 Sichuan Shulian Co., Ltd. 329.0240 3.6312 Private
Hebei Textile Industry Association State-owned
10 300.0000 3.3108
Secretariat
11 Jiangsu Textile (Group) Company 288.6723 3.1859 State-owned
12 Liaoning Textile Industry Association 286.4400 3.1612 State-owned
13 Shenzhen Textile (Group)Holdings Ltd 260.0000 2.8694 State-owned
14 Xinjiang Textile Industry Association 236.4600 2.6096 State-owned
15 Beijing Textile Holdings Co., Ltd. 215.8400 2.3820 State-owned
16 China Textile Machineay (Group)Co., Ltd. 115.1435 1.2707 State-owned
Total 9061.00 100.00
(2) Composition of board members of Union Group
According to the Articles of Association of Union Group, the directors shall be appointed by
the corporate shareholders that contribute capital of more than RMB 5 million (not including
RMB 5 million) and be elected by the shareholders' meeting. The board of directors shall be
composed of 7 to 11 members. The current sixth board of directors was elected in October 2008.
It has 7 members, including 5 members coming from corporate shareholders, 1 member jointly
recommended by shareholders and 1 independent director. The particulars are as follows:
No Name of shareholder Directors appointed Remarks
1 Hangzhou Jinjiang Group Co., Ltd. 1 person/Dou Baibing
2 OCT Group 1 person /Wang Xiaowen
3 Shandong Textile Industrial Association 1 person/Xia Zhilin
4 Hebei National assets Holding Co., Ltd. 1 person /Gao Jianru
Original
5 Tianjing Tianfang Investment Co.,Ltd. 1 person/Liu Baogen Shareholder
representative
Connon
6 Dong Binggen
recommended
Indepenment
7 Long Xingping
Director
(3) Description of the actual controllers
Union Group has been a standardized limited liability company since its establishment.
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Despite decentralized equity and large number of shareholders, the department in charge of
industry and state asset management department has been incontrovertible direct administrator
because they were all state-owned shareholders and engaged in the same industry before 2004.
Private capital has entered since 2004 and its proportion has been unceasingly enlarged. The
largest shareholder turned from national administrative department into a state-owned
enterprise, which was then replaced by a private enterprise. The actual controller of Union
Group gradually changed. The concrete process of change is as follows:
(1) After the establishment of Union Group and before State-owned Assets
Commission under the State Council transferred 12.09% equity held by it to OCT Group, the
relationship of subordination of Union Group was definite. State administrative agencies
(Ministry of Textile Industry, China Textile Federation, industrial commission of national
enterprise and State-owned Assets Commission under the State Council) exercised
management rights. Relevant national departments were responsible for the establishment of
board of directors, appointment of management, audit and supervision.
(2) From April 2005, OCT Group became the largest shareholder of Union Group. The
management methods adopted when State-owned Assets Commission under the State Council
conducted supervision were still adopted in some aspects. For examples, Union Group
regularly submitted financial data to state assets management department and accepted the
economy audit by the supervisory committee under the State Council. The financial statements
of OCT Group consolidated those of Union Group. However, changes started in some aspects.
The establishment of board of directors and the appointment of management were carried out
completely according to the Articles of Association of Union Group. The shareholders' general
meeting and the board of directors independently exercised the powers assigned by laws and
regulations. The reelection of board of directors and the appointment of management were no
longer reported to relevant department for examination and approval.
(3) In 2005, Hangzhou Jinjiang Group held 20.89% equity of Union Group through acquisition
and became the largest shareholder of Union Group by replacing OCT Group. Hangzhou
Jinjiang Group and OCT Group respectively appointed one of 8 members of the fifth board of
directors reelected in that year.
(4) In 2007, Union Group did not submit various financial data to OCT Group and state-owned
regulatory authority. The statements of OCT Group did not consolidate those of Union Group.
State assets supervision organ did not conduct regular economy audit of Union Group either.
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(5) Though private enterprise Hangzhou Jinjiang Group is the largest shareholder, only
one of 1 member of the board of directors comes from it and it has no substantial influence on
important decisions of Union Group. Meanwhile, Hangzhou Jinjiang Group neither
participated in the daily management and operation of Union Group, nor required submission
of daily financial statements, nor consolidated financial statements nor sent personnel to
conduct economy audit
(6) From the fifth board of directors, Dong Binggen was jointly recommended by all
shareholders to enter the board of directors and was elected as board chairman. He does not
represent any shareholder. Instead, he is responsible for all shareholders.
Based on the above facts, Union Group holds the opinion that Union Group, as a limited
liability company with a history of 29 years, has formed a standardized mode of operation
according to law and business management during change of equity and its corporate
governance structure has been increasingly stable and mature. The shareholders' meeting is the
highest power organ of the Company. The board of directors is responsible to the shareholders'
meeting and exercises the right to make decisions on important matters of Union Group
according to the articles of association. The management is responsible for daily operation
management of Union Group. At present, Union Group does not have administrative
department or unit in charge. The largest shareholder only holds 20.89% equity of Union
Group. No shareholder has absolute control over or absolute influence on the shareholders'
meeting and board of directors of Union Group and is daily operation. The mutual restriction
between shareholders of Group is quite apparent. Therefore, Union Group only has the largest
shareholder and does not have actual controller at present.
7. Introduction to other legal person shareholders holding over 10% of total shares
(1) Style-Success Ltd.
Legal Representative: Miss Amy Wang
Date of establishment:November 1999
Business scope: Investment
Section IV Particulars about Directors, Supervisors, Senior Executives
and Employees
I Basic information about directors, supervisors and senior executives and Staff
（1）Basic information
1.In formation for the change of share holding and salary of directors, supervisors and executives
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and staff
Increase/dec The total Incentive
Shares rease amount of stock option
held at Shares amount remuneration
vested during
Ag the held at received from
Name Sex Title Term of office
e year-b the the Company in the reporting
eginni year-end the report period
ng period
(RMB‘0000)
Board
Hu Ma chairman/G
49 2011.10-2014.10 0 0 38
Yongfeng le eneral
Manager
Ma Vice Board
Ding Yue 53 2011.10-2014.10 0 0 0
le chairman
Fe
Vice Board
Shu Yibo ma 39 2011.10-2014.10 0 0 0
chairman
le
Fe
Zhang Mei ma 36 Director 2011.10-2014.10 0 0 0
le
Feng Ma
49 Director 2011.10-2014.10 0 0 0
Junbin le
Zhang Ma Director ，
49 2011.10-2014.10 0 0 18
Jinliang le Deputy GM
Ma Independent
Jin Ligang 52 2011.10-2014.10 0 0 5
le director
Shen Ma Independent
54 2011.10-2014.10 0 0 5
Songqin le director
Wang Ma Independent
38 2011.10-2012.2 0 0 5
Tianguang le director
Chairman of
Dong Ma the
62 2011.10-2014.10 0 0 0
Binggen le supervisory
committee
Fe
Huang
ma 54 Supervisor 2011.10-2014.10 0 0 0
Xiaoping
le
Pan Ma
60 Supervisor 2011.10-2014.10 0 0 11
Weichao le
Deputy
Zhang Ma
49 general 2011.10-2014.10 0 0 0
Jinliang le
Manager
Zhang Ma Board
49 2011.10-2014.10 0 0 0
Jinliang le secretary
Ren Manager of
Ma
Changzhen 36 Finance 2011.10-2014.10 0 0 11
le
g Dept
Notes：The board of directors of the Company received the written resignation application of
independent director Mr. Wang Tianguang on February 27, 2012. Before new independent
director takes up his post, Mr. Wang Tianguang shall continue to perform the responsibilities of
independent director.
2. Particulars about directors and supervisors holding positions at corporate shareholders
Name Name of corporate Position Term of office Whether
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shareholders receiving
remuneration
or subsidy
Secretary of Party
Dongbingge Union Development Group committee, chairman of
2008.10-till now Yes
n Co., Ltd. board of directors and
President
Dong
Union Holdings Ltd. Board chairman 2007.6-till now No
Binggen
Union Development Group
Ding Yue Vice President 2008.10- till now Yes
Co., Ltd.
Ding Yue Union Holdings Ltd. Convener of the
2007.6- till now No
Supervisory Committee
Hu Union Development Group
Vice President 2008.10- till now No
Yongfeng Co., Ltd.
Hu
Union Holdings Ltd. Vice Board chairman 2007.6- till now No
Yongfeng
Secretary of Party
Huang Union Development Group
committee, secretary of 2008.10- till now Yes
Xiaoping Co., Ltd.
discipline committee
Huang
Union Holdings Ltd. Director 2007.6- till now No
Xiaoping
Shenzhen Textile(Holding)
Feng Junbin Deputy general manager 2007.1- till now Yes
Co., Ltd.
Union Development Group Deputy manager of
Zhang Mei 2011.2- till now Yes
Co., Ltd. Finance Dept.
Zhang Mei Union Holdings Ltd. Director 2009.5- till now No
(II).Particulars about main work experience of present directors, supervisor and senior executives
Chairman of the Board :
Hu Yongfeng, male, with bachelor degree, was born in July 1962, Senior Engineer，graduated
from Southeast Textile Technology Institute in 1983. He is ever took the post of section chief of
state textile headquarters general office, He now serves as Vice President of Union Development
Group Co., Ltd. and Vice chairman of the Board of Union Holdings Co., Ltd., He served as
chairman of the Board of the Company from Oct., 2000 till now. He served as General manager
of the Company since April 2008.
Vice Chairman of the Board :
Ding Yue, male, was born in March 1958, with bachelor degree, Senior Economist,
graduated from Lanzhou University in 1983. He took the turns of deputy section chief of
personnel labor department of Textile Technology Department, section chief of personnel labor
department of textile headquarters, deputy director of personnel labor department of textile
headquarters and concurrently director of talents exchange center of Textile Headquarters and
chairman of the Board of Union Holdings Co., Ltd., He now serves as Vice President of Union
Development Group Co., Ltd. and convener of the supervisory committee of Union Holdings Co.,
Ltd., He served as director of the Company from June 2002 till now. He served as Vice
Chainman board of the Company since April 18, 2008.
Shu Yibo, Female，was born in February 1972, who is studying for EMBA. ,ever took the post of Manager of
Sale of Manqi Industry Co., Ltd., Director of Manqi Investment Development Co., Ltd..He is now in charge of
Chairman of the board , General Manager of Manqi Industry Co., Ltd.,Chairman of board of Manqi Investment
Development Co., Ltd.She served as director of the Company since April 18, 2008, He served as Vice
Chairman of board of the Company July 29, 2008.
Director：
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Zhang Mei, female,was born in February 1975, is a certified public accountant with Master's
degree, She once worked at Financial Division of China Garment Corporation. she now serves as
Deputy manager of Finance Dept of Union Development Group Co., Ltd, She served as Director
of the Company since April 18, 2008.
Feng Junbin, male, was born in July 1962, is a junior college graduate. He has served successively as special
enterprise controller of Dapu Financial Bureau of Guangdong Province, deputy division chief of Fengshun
Financial Bureau and director of Audit Dept, Manager of Management Dept , He now serves as Deputy
General Manager, Supervisor of Shenzhen Textile (Holdings) Co., Ltd. He now serves as Deputy General
Manager of Shenzhen Textile (Holdings) Co., Ltd, He served as director of the Company April 18, 2008.
Zhang Jinliang, male,was born in May 1962, Senior Accountant, a senior accountant with bachelor
degree, was born in May 1962. He ever took the post of senior section chief of Shenyang
Dispatch and Shenzhen Dispatch of Audit Administration, manager of operation department of
Shenzhen Property Union Holdings Co., Ltd., deputy director and director of auditing office of
Union Development Group Co., Ltd., deputy general manager of Shenzhen Union Holdings Co.,
Ltd. and general manager of Yuyao Union Textile Co., Ltd., and he held the position of deputy
general manager of the Company since December 2004, He served as Board secretary of the company
since December 27, 2010, He served as Director of the Company since October 18, 2011.
Independent directors:
Jin Ligang, male, was born in August 1959, graduated from Beijing Foreign Trade College in 1980. From 1981
to 1983, he majored in international economy at Rome LUISS Private University. He once worked at North
America and Oceania Department of Third Bureau of Ministry of Foreign Trade and Economic Cooperation,
who was in charge of U.S.-related affairs. He has served as assistant of board chairman and president and
office director of West Europe China Trade Center (Hamburg, West Germany), deputy chief and chief of
America and Oceania Department of Ministry of Foreign Trade and Economic Cooperation, business
counselor of Economic and Commercial Department of Embassy in U.S. and business counselor of Economic
and Business Office of Consulate General in New York in succession. He now serves as board chairman of
American Stone Bridge International Company and director of Beijing Decision Making & Consultation
Center. He served as Independent directors of the company since April 2008.
Shen Songqin, male, was born in January 1957, has doctor's degree. In 1980, he graduated from Hangzhou
University and worked there after graduation. He studied for Master's degree at Hangzhou University from
1985 and obtained the degree of master of Arts in 1988. He studied for doctor's degree from 1995 and obtained
the degree of doctor of literature in 1998. His dissertation was appraised "Excellent Dissertation for Doctor's
Degree in China in 2000". He now is a professor, doctor tutor and deputy dean of Chinese Language
Department of Zhejiang University. In 2006, he was appraised as Qianjiang Scholor of Zhejiang Province
(specially engaged professor). In 2007, he was appraised as Middle-aged/Young Expert with Outstanding
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Contribution in Zhejiang Province". He served as independent director of the Company since April 18, 2008.
Wang Tianguang, male, Was born in May 1973, is a certified public accountant. He graduated from Economic
Management School of Qinghua University. He once served as chief staff of Listed Company Supervision
Division of Shenzhen Securities Regulatory Bureau, general manager of Shenzhen Investment Banking Dept.
of Yinhe Securities. He now serves as General Manager of Southwest securities Co., Ltd, Investment
Bank, He served as Independent direstor of the company since April 18, 2008.
Due to job changes, proffered the company's board of directors his resignation on Feb 27, 2012
Supervisors:
Dong Binggen, male, was born in July 1949, an engineer, with bachelor degree, graduated from
East China Textile Technology Institute in 1977. He ever took the post of deputy president of
Zhejiang Silk Technology Institute, general manager of China Clothes Headquarters and board
chairperson of China Clothes Association, etc.; he is now in charge of secretary of Party
Committee, chairman of the board and general manager of Shenzhen Union Development Group
Co., Ltd. and chairman of the Board of Shenzhen Union Holdings Co., Ltd., He served as
Charnman and held the position of Chairman of the Supervisory Committee of the Company
from June 2002 till now.
Huang Xiaoping, female, Was born in January 1957, an Economist, is a junior college graduate,once served as
policewoman of Public Security Bureau of Dan County, Hainan, chief staff and deputy director of office,
deputy chief and chief of Personnel & Labor Division and office director of China Garment Industry
Corporation, vice chairman of China Garment Association. She now serves as deputy secretary of Party
committee and secretary of discipline committee of Union Development Group Co., Ltd. Co., Ltd. she served
as Supervisor of the company since April 18, 2008.
Pan Weichao, male, Was born in August 1951, is a junior college graduate., has worked at the Company since
April 1984. He has served successively as vice chairman of labor union, Manager of General Affairs Dept. and
chairman of labor union. He now serves as Manager of affairs Dept of the Company, he has served as
employee-representing supervisor of the Company Since April 18, 2008.
Secretary of the Board of Directors:
Zhang Jinliang（Refer to Director column for details)
Manager of Finance Dept:
Ren Changzheng, male, was born in August 1975, In 1997,he graduated from Guizhou Finance University,
once worked at Financial Division of Guizhou Yunman Aircraft Factory and Planning and Finance Division of
Union Development Group Co., Ltd. He now serves as Manager of Finance Dept of the Company.
（III）Annual remuneration
The total amount of annual remuneration of directors, supervisors and senior executives in
2011 is RMB 0.93 million. Including,The allowance for each independent director is RMB
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50,000 (including tax) per year.
（IV）Particulars about leaving post, engaging and dismissing
1. In the report period, the term of office of the fifth board of directors and supervisory
committee expired. The first provisional shareholders' general meeting of the Company in 2011
elected the members of new board of directors and supervisory committee. The sixth board of
directors is composed of directors Hu Yongfeng ,Ding Yue, Zhang Mei, Shu Yibo, Feng
Junbin ,Zhang Jinliang and independent directors Jin Ligang , Shen Songqin and Wang
Tianguang. The sixth supervisory committee is composed of Dong Bingen, Huang Xiaoping and
employee-representing supervisor Pan Weichao.
Chen Xing, a member of the fifth board of directors, resigned for personal reason. The other
directors were reappointed as members of the sixth board of directors. Zhang Jinliang was
appointed as a new director. Upon expiration of term of office, all the members of the fifth
supervisory committee were reappointed as the members of the sixth supervisory committee.
On October 18, 2011, the first meeting of the sixth board of directors elected Hu Yongfeng
as the chairman of the sixth board of directors and Ding Yue and Shu Yibo as vice chairmans
thereof. Upon nomination by the chairman of the board of directors of the Company, Hu
Yongfeng was appointed as the general manager of the Company and Zhang Jinliang was
reappointed as board secretary. Upon nomination by the general manager of the Company,
Zhang Jinliang was appointed as the deputy general manager of the Company and Ren
Changzheng was appointed as the financial manager of the Company.
The term of office of the members of the current board of directors and senior executives is
three years from October 18, 2011 to the date when the Company holds a shareholders' general
meeting to examine the matter about reelection of board of directors.
2. The board of directors of the Company received the written resignation application of
independent director Mr. Wang Tianguang on February 27, 2012. Before new independent
director takes up his post, Mr. Wang Tianguang shall continue to perform the responsibilities of
independent director.
The resolutions of the meetings were disclosed on Securities Times ,Hong Kong Commercial
Daily and www.cninfo.com.cn respectively on October 19, 2011 and February 28, 2011.
II.. Staffs:
By the end of the report period, the Company had 27 staff members in total, including 5
managerial employees , 3 financial employees, 19 Logistics employees. The Company has
provided social insurance to its staff according to relevant regulations of the government.
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Section V Administrative Structure
1.Administrative Status
The Company has constantly improved its corporate governance structure，established modern
enterprise system and standardized its operation strictly according to the requirements of the
Company Law， Securities Law，Stock Listing Rules of Shenzhen Stock Exchange, Guidelines
for Governance of Listed Companies and relevant laws and regulations of CSRC. In accordance
with relevant regulations on special activities of governance of listed companies and
requirements of CSRC Shenzhen Securities Administration, Establish and perfect the internal
control management and system, sustainable development govemance activities, To further
standardize the operation of the Company, improve the management of the Company.
In the report period, The company, abiding by the requirement of ―Opinions on Detection, Prevention
and Control of Insider Trading in Capital Markets by Law‖ issued by China Securities Regulatory Commission,
Regulatory Agency, Shenzhen Stock Exchange and other supervisory authorities, ―Notice on Implementation
of Spirit of Special Working Conference of Information Disclosure of Listed Company‘‖ of Shenzhen
Regulatory Agency ({2011} No. 87) and other relevant documents, has conscientiously followed the
conference spirit and all the supervisory requirements issued in the ―Notice‖, timely forwarded the relevant
materials and organized to study. The directors, supervisors and senior executives of the company and the
relevant controlling shareholders have attended. By the study, the company has further improved the
management awareness of prevention of insider trading and standardization of insider information,
strengthened the legal consciousness and behavior criteria for the chief executive and staff of the company, and
played a positive role in promoting the standard development of the company. Also, the company has,
according to the internal control system improved gradually, further defined all the departments‘ authorities.
(1). Shareholders and shareholders' general meeting: The Company convened and held
shareholders' general meeting strictly according to the requirements of Opinions on
Standardization of Shareholders' General Meeting of Listed Companies, formulated Rules of
Procedure of Shareholders' General Meeting, ensured all shareholders, especially medium and
small shareholders, enjoy equal position and can fully exercise their own rights.
(2). Relationship between the controlling shareholder and the Company: The acts of the
controlling shareholder of the Company were standardized. It did not exceed the authority of the
shareholders' general meeting to directly or indirectly intervene with the decision-making and
operating activities of the Company. The Company is independent from its controlling
shareholder in respect of personnel, assets, finance, organ and business. The board of directors,
the supervisory committee and internal organ of the Company are able to operate independently.
(3). Directors and the board of directors: The Company elected directors strictly according to the
director selection and appointment procedure specified in the Articles of Association of the
Company and will further perfect director selection and appointment procedure and actively
promote system of cumulative voting. The member composition of the board of directors of the
Company complied with the requirements of laws and regulations. The board of directors of the
Company formulated Rules of Procedure of the Board of Directors. Directors of the Company
were able to attend board meetings and shareholders' general meetings with responsible attitude,
actively participate in relevant training, get familiar with relevant laws and regulations and
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understand the rights, obligations and responsibilities of director. The Company has established
independent director system according to Guiding Opinions on the Establishment of Independent
Director System at Listed Companies issued by CSRC. The numbers of independent directors are
3 peoples.
(4). Supervisors and the supervisory committee: The number and composition of the Supervisory
Committee of the Company complied with the requirements of laws and regulations. The
Supervisory Committee of the Company formulated the Rules of Procedure of the Supervisory
Committee. The supervisors of the Company were able to perform their duties seriously, take the
attitude of being responsible for all shareholders and supervise the legality and regulation
conformity of the Company's finance and the duty performance of the directors, managers and
other senior executives of the Company.
(5). Performance evaluation and encouragement and regulating mechanism The Company
established the system of subsidy for independent directors and directors and remuneration for
senior executives. The Company will further improve and perfect overall remuneration system,
establish fair and transparent performance appraisal standard and stimulation and restriction
mechanism for directors, supervisors and executives.
(6). Interested parties: The Company was able to fully respect and safeguard the legal rights and
interests of the interested parties including banks, other creditors, employees and consumers and
promote its sustained and healthy development together with interested parties.
(7).Information disclosure and transparency: The Company designated the secretary to the board
of directors to be responsible for information disclosure, Regulations on Management of
Information Disclosure,Regulations on Management of External Information Users and reception
of shareholder and consultation. In the report period, the Company was able to truly, accurately,
completely and timely disclose relevant information according to the provisions of laws,
regulations and the Articles of Association of the Company. The Company will continue to
operate in a standardized way strictly according to the requirements of relevant laws and
regulations including the Company Law, further perfect company administration structure and
establish and improve various regulations in light of the gap with the requirements of Standards
of Administration of Listed Companies, ensure the maximization of shareholders' interests and
safeguard the lawful rights and interests of all shareholders.
II. Particulars about duty performance of independent directors
The Company has perfected independent director system in the Articles of Association of
the Company according to Guiding Opinions on the Establishment of Independent Director
System at Listed Companies issued by CSRC. The board of directors of the Company now has
three independent directors, taking up one third of the total number of directors. These Three
independent directors have consciously performed their duties according to the principles of
good faith and diligence since they came into office. They expressed independent opinions on
important matters of the Company including external guarantees, related transactions, corporate
governance.
Independent Directors‘ attendance of the Boarding meeting
Times of Attended Absent form
Attended by
Name meeting personally meeting Notes
proxy (times)
should attend (times) (times)
Jin Ligang 5 5 0 0
Shen Songqin 5 5 0 0
Wang
5 5 0 0
Tianguang
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III. The separation of the Company from its controlling shareholder in five respects
The Company is independent from its controlling shareholder in respect of personnel, assets,
finance, organization and business. The particulars are as follows:
1. Business: The Company has complete business and the ability of independent operation. It is
completely independent from its controlling shareholder in respect of business.
2. Personnel: The Company is independent in respect of labor, personnel and wage management.
Except that Mr. Hu Yongfeng, the board chairman and general manager of the Company,
received remuneration from the actual controller, other senior executives received remuneration
from the Company, who neither held position at nor received remuneration from the controlling
shareholder.
3. Assets: The Company has complete assets. Its property rights are definite and not related to its
controlling shareholder and other shareholders.
4. Organization: The Company established an organizational structure that is completely
independent of its controlling shareholder. The board of directors, the supervisory committee and
internal organs of the Company are able to operate independently.
5. Finance: The Company has independent finance. It set up independent finance department and
established independent financial accounting system. It has standardized and independent
financial and accounting system and financial control system applicable to branches and subsidiaries. The
Company independently pays taxes according to law. It opened accounts with banks independently. The
Company and its controlling shareholder do not use the same bank account.
IV. Description of Inter-Industry Competition and Affiliated Transaction formed by the company due to the
partial reformation
1. There not exists the inter-industry competition between the company and the controlling shareholder & its
other controlled enterprises.
2. There not exists the inter-industry operation between the company and the subordinate enterprise of actual
controller.
3. Currently, the main affiliated transaction between the company and the actual controller is house tenancy,
and the affiliated transaction follows the fair principle of the market. So, there is no the situation that the
authenticity of the company‘s operation results is affected.
V. Internal Control of the Company
(I) Establishment and Perfectness of the Company‘s Internal Control System
The company has been attached great importance to the construction of internal control system, gradually
formed and continuously improved an increasingly sound, effective and standardized governance and internal
control system in practice, and created good internal management of corporation and normative operation
order for the company.
1. General Situation of Construction of Internal Control
The internal control of the company covers all the levels of governance and business management, and plays
an important role in the company‘s major decisions, financial management, staff management, information
disclosure, affiliated transaction management, etc., which has together formed a systematic, integrated,
scientific and reasonable internal control system.
2. Description of Implementation Status of Internal Control Norms
In the report period, the company has, in accordance with the overall deployment of basic norms on promoting
22/133 22
the implementation of internal control of listed company issued by Ministry of Finance, China Securities
Regulatory Commission and Regulatory Agency and the requirement of ―Notice on Well Implementing Pilot
Work of Internal Control Norms of Listed Company in Shenzhen‖, timely held the mobilization meeting of
implementation of internal control norms, and carried out the special study of internal control many times to
improve the deep comprehension and appreciation to the work of internal control norms in the range of the
company. Also, the company has established the ―Work Programme of Implementation of Internal Control
Norms‖ and defined the organization, personnel arrangement, work content and time plan. The work
programme has been examined and approved by the Audit Committee Meeting and the 15th Board of Directors
of 5 Session held by the company in April, 2011. Currently, the company is carrying out the implementation
work of internal control norms on schedule and in a well-organized way.
3. Establishment of Effective Internal Supervision System
1) The company has set up the Supervisory Committee, which is responsible for the shareholders‘ meeting and
conducts the supervision for the implementation of the directors‘ and senior executives‘ duties behavior.
2) The Board of Directors of the company is consisted of the Audit Committee, which is in charge of the
communication, supervision and verification work of the internal and external audit for the company according
to the ―Detailed Work Rules of Audit Committee‖ and other related supporting systems and provisions.
3) The Board of Directors of the company includes 3 independent directors. During the report period, the three
independent directors all can be prudent in exercising the supervision rights and actively participate in all the
important work of the company and issue the objective and independent advice.
4) The company has set up the internal audit department within the Finance Department, which is charge of the
Board of Directors directly, conducts the inspection and supervision of the company‘s internal control
operation, regularly checks the defects of the internal control of the company, assesses the effect and efficiency
of implementation, timely puts forward suggestions for improvement and strengthens the audit for supervision
of the internal operation.
(II) Opinion of Evaluation for the Internal Control of the Company
1. Self-Evaluation Report of Internal Control of the Company
The company‘s existing internal control system can adapt to the requirements of the company‘s management,
and has established the internal control system. Also, there are no any significant disadvantages in all the key
aspects of internal decision-making, operation management, audit and supervision, and a good implementation
is achieved in practical work.
Details please see the ―Annual Self-Evaluation Report of Internal Control of Shenzhen Victor Onward Textile
Industrial Co., Ltd. in 2011‖ disclosed with the Annual Report of this year.
2. Opinion of the Supervisory Committee of the Company for Self-Evaluation of the Internal Control
1) The company has established and perfected the internal control system covering the whole process of
production operation in accordance with the relevant provisions of China Securities Regulatory Commission
and Shenzhen Stock Exchange and the specific status of the company, in order to ensure to have the rules to
follow for all the works, and has formed the standardized management system. Also, the company‘s existing
internal control system can provide the guarantee to the normal production and business activities of the
company.
2) The company has established and improved the corporate governance structure and internal organization in
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line with the requirements of modern management, formed the decision-making, implementation and
supervision mechanism for the focus activities of internal control of the company, and ensured the
standardized operation of the company‘s various business activities.
3) During the report period, the company doesn‘t violate the ―Internal Control Guideline in Listed Company‖
of Shenzhen Stock Exchange and the internal control system of the company. In summary, The Supervisory
Committee believes that the ―Annual Self-Evaluation Report of Internal Control in 2011‖ of the company has
fully and objectively reflected the actual situation of the company‘s internal control, and can reveal the existing
defects and propose the rectification plan. So, we agree with the report.
3. Opinion of the Independent Directors of the Company for Self-Evaluation of the Internal Control
According to the requirement of ―Notice on Well Implementing Work of Annual Report of Listed Company in
2011‖ of Shenzhen Stock Exchange, we has, as the independent director of the company, conducted the careful
review of the ―Annual Self-Evaluation Report of Internal Control of the Company in 2011‖ submitted by the
Board of Directors, communicated with the company‘s management and the related administrative department,
referred to the management system of the company, and issued the following comments based on the position
of independent judgment.
1) The company‘s internal control system is in line with the requirements of the relevant national regulations
and securities regulatory authorities, and is also suitable to the demands of actual situation of current
production operation situation of the company.
2) The company‘s internal control measures play a better role in all the processes and aspects of corporate
management.
3) The ―Annual Self-Evaluation Report of Internal Control of the Company in 2011‖ has objectively reflected
the real situation of the company‘s internal control, had more comprehensive summary of internal control, and
more clear direction of efforts to strengthen internal control.
4) The ―Annual Self-Evaluation Report of Internal Control of the Company in 2011‖ meets the actual status of
internal control of the company.
6. Establishment and Implementation of Internal Control System of Financial Report
The company, regarding the related laws and regulations of ―Accounting Law of the People‘s Republic of
China‖, ―Fundamental Norms for Enterprise Internal Control‖ and ―Application Guidelines of Enterprise
Internal Control (No.14) — Financial Report‖ as the basis of establishment of the internal control of financial
report for the company, implements the internal control for the standardization of preparing the financial report,
submitting and analysis of use of control processes, improvement the authorization and approval system on all
aspects of financial report, establishment of daily information verification system, full use of accounting
information technology, accounting treatment of determination of the major issues, verification of debt of
inventory assets, establishment and implementation of calculation and budget and other key aspects, in order to
ensure the legality, compliance, trueness and integrity.
7. Declaration of the Board of Directors for Internal Control Responsibilities
The Internal control is implemented by the Board of Directors, the Supervisory Committee, Management and
all employees of the company aiming at the achievement of control target processes. The Board of Directors
complies with the national laws and regulations and the requirements of securities regulatory authorities to
constantly improve all the rules and regulations of the company‘s internal control, promote the establishment,
24/133 24
perfection and effective operation of the company‘s internal control, and assume important responsibility for
the integrity and rationality of all construction of internal control system. Also, the company senior managers
bear the primary responsibility for the implementation of the internal control system.
8. Establishment and Implementation of the ―Responsibility Claim System on Significant Error in Information
Disclosure of Annual Report‖
The company has formulated the ―Responsibility Claim System on Significant Error in Information Disclosure
of Annual Report‖, which has further clarified the management of disclosure of annual report information,
improved the quality and the transparency of disclosure of annual report, enlarged the responsibility claim of
significant error in information disclosure. In the report period, There are no the occurrence of serious
accounting errors correction, grave omission of information supplements, performance forecast amendments
and other issues.
IX Performance Appraisal & Incentive Mechanism for Executives, Establishment and
Implementation of Relevant Rewarding Rules
We appraise the performance of executives according to relevant index and criterions, the results
of performance appraisal are recorded in the archives of executives, and are linked to the
compensations and hiring of executives.
Section VI. Particulars about Shareholders‘ General Meeting
In the report period，the Company held 2 shareholders‘ general meeting. Relevant particulars
are as follows:
(1) 2010 annual shareholders' general meeting of the Company
1. Notice, convening and holding of shareholders' general meeting
The Company issued the notice of holding 2010 annual shareholders' general meeting on April
27, 2011. 2010 annual shareholders' general meeting of the Company was held in the meeting
room on the 16/F of Union Building, Shennan Road Central, Shenzhen in the morning of May 23,
2010 scheduled. The meeting was presided over by Mr. Hu Yongfeng, the board chairman of the
Company. 4 hareholders and shareholders' agents attended this meeting, representing
89,086,100 shares which account for 52.67% of the total shares of the Company. 2 shareholders
holding A shares (agents) attended the meeting, representing 58,505,515 shares which account
for 58.67% of total voting shares held by the Company's shareholders holding A shares. 2
shareholders holding B shares (agents) attended the meeting, representing 30,580,585 shares
which account for 44.05% of total voting shares held by shareholders holding B shares of the
Company. Chen Dong, lawyer of Guangdong Shengdian Law Office attended and witnessed the
meeting and issued legal opinion.
2. The resolutions adopted at the shareholders' general meeting and the disclosure of resolution
announcement
The meeting examined and voted through the following proposals:
(1) 2010 annual work report of the board of directors of the Company；
(2) 2010 annual work report of the supervisory committee of the Company；
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(3) 2010 annual report of the Company and its summary；
(4) The profit distribution preplan of the Company for 2010；
（5）The proposal for renewing the engagement of Shine Wing Certified Public
Accountants as the Company's audit body for 2011.
The announcement of the resolutions of this meeting was published on Securities Times and
Hong Kong Commercial Daily on May 24,2011.
(2) 2011 First provisional shareholders' general meeting of the Company
1. Notice, convening and holding of shareholders' general meeting
The Company issued the notice of holding 2011 First provisional shareholders' general meeting
on September 28, 2011. 2011 First provisional shareholders' general meeting of the Company
was held in the meeting room on the 16/F of Union Building, Shennan Road Central, Shenzhen
in the morning of October 18, 2011 scheduled. The meeting was presided over by Mr. Hu
Yongfeng, the board chairman of the Company. 4 hareholders and shareholders' agents attended
this meeting, representing 89,086,100 shares which account for 52.67% of the total shares of
the Company. 2 shareholders holding A shares (agents) attended the meeting, representing
58,505,515 shares which account for 58.67% of total voting shares held by the Company's
shareholders holding A shares. 2 shareholders holding B shares (agents) attended the meeting,
representing 30,580,585 shares which account for 44.05% of total voting shares held by
shareholders holding B shares of the Company. Chen Dong, lawyer of Guangdong Shengdian
Law Office attended and witnessed the meeting and issued legal opinion.
2. The resolutions adopted at the shareholders' general meeting and the disclosure of resolution
announcement
The meeting examined and voted through the following proposals:
（1）The Proposal Concerning Reelection of Board of Directors
（2）The Proposal Concerning Reelection of Supervisory Committee
（3）The proposal concerning independent director salary of the sixth meeting
of board of directors.
The announcement of the resolutions of this meeting was published on Securities Times and
Hong Kong Commercial Daily on October 19,2011.
VII Report of the Board of Directors
I. The discussion and analysis of operation status
In the report year, the printing and dyeing mill of the Company in Shenzhen continued
production suspense while the parent company and five subsidiaries continued the suspension of
printing and dyeing business due to the production suspense of the printing and dyeing mill. The
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parent company, Nanhua Company and Hong Kong Company maintained daily operation
through property lease. The other three subsidiaries had suspended business. The Company
planned to invest in the joint venture project of Nanjing East Asia Textile Printing and Dyeing
Co., Ltd. with partial machinery and equipment. Due to change of foundation of joint venture
and prospect of the industry, the capital increase was not completed. In the report year, the
income from house rent was the main source of net inflow of cash and the source of income from
main operation. On the whole, the income of the Company exceeded its expenditure so that its
operation was extended. Due to no income from substantial key business matched with asset
scale and no income from investing in enterprises, big operating loss was unavoidable in the
report year.
(I) Review of the operating status of the Company in the report period
1. Overall operating status in the report period
Unit：RMB
Amount of
Proportion of
Items 2011 2010 change and change (%)
percentage
Operating Income 9,850,484 9,351,110 499,374 5.34
Operating Profit -17,466,634 2,328,181 -19,794,815 -850.23
Total profit -17,466,414 2,326,231 -19,792,645 -850.85
Net profit attributable to
shareholders of listed -17,361,593 4,102,924 -21,464,517 -523.15
Company
Notes ：
(1)Operation income conspicuously Increased by RMB 0.50 million year on year mainly due to
Rental income has increased.
⑵Operating profit decreased by RMB 19.79 million mainly because the key business of the
Company was not recovered,
the earnings of Zhejiang Union Hangzhou Bay Ventures Co., Ltd.,decreased by RMB 42.46 mill
ion and suffered loss of RMB 10.06 million;
(3)Total profit decreased by RMB 19.79 million mainly for the reason mentioned in (2);
(4) The net profit attributable to shareholders of listed Company increase by RMB 21.46 million year on
year mainly due to the said factors.
2. Scope of key business and its operation status
Scope of key business :Production and sales of textile products, necessary raw materials,
auxiliary materials, various fabrics and garments and provision of relevant services.
In report period, the controlled subsidiaries continued production suspense and rectification
and were mainly engaged in asset preservation .
(1).The income from main operation earned by the Company in the report period mainly
includes the income from rent. In the report period, the total income from main operation was
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RMB 9.85 million, and increased of 5.35% year on year. The Company realized net profit of
RMB -17.47 million.
(1) Income from and cost of core business in terms of industry are as follows:
Unit：RMB‘0000
The Status of key business in terms of industry of business
Change of
key
Increase/dec
Key Increase/dec business
Income rease of key
On industry or Cost of key business rease of key profit over
from key business
production business profit ratio turnover business the same
business
（％） cost（％） period of
（％） last year
（％）
Fabrics
bleaching, 0 0 0.00% -100.00% -100.00% -66.67%
Printing & dyeing
Lease 985 427 56.65% 17.40% 6.75% 4.33%
Income from and cost of main operation in terms of areas are as follows:
Unit: RMB‘0000
Income from key Increase/decrease of income
Area
business （％）
Mainland China 807 5.35%
Hong Kong and Overseas 178 5.32%
(2) The line of business or product whose income or profit accounts for over 10% of total income from main
operation or profit from main operation in the report period
The Status of key business in terms of industry of business
Change of
key
Increase/dec
Key Increase/dec business
Income rease of key
On industry or Cost of key business rease of key profit over
from key business
production business profit ratio turnover business the same
business
（％） cost（％） period of
（％） last year
（％）
Fabrics
bleaching, 0 0 0.00% -100.00% -100.00% -66.67%
Printing & dyeing
Lease 985 427 56.65% 17.40% 6.75% 4.33%
(3). The profit structure and key business structure in the report period did not change much
compared with the previous report period.
(4).Major Suppliers and Customers
At present, the Company is mainly engaged in renting property. The tenants in Shenzhen
are its main customers.
3.Change in composition of the Company's assets and reasons therefore:
Unit:RMB‘0000
28/133 28
Amount of
Items of consolidated Proportion of
2011 2010 change and
balance sheet change (%)
percentage
Other receivable 46 17 29 170.59
Inventories 16 42 -26 -61.90
Disposable financial
70 87 -17 -19.54
asset
Long term share
6319 7719 -1400 -18.14
equity investment
Property investment 3437 3967 -530 -13.36
Fixed Assets 1207 1749 -542 -30.99
Different of foreign
-52 587 -639 -108.86
currency translation
（1）Other receivable Increased by RMB 0.29 million and 170.59% mainly due to reserve of
deposit；
（ 2 ） Inventories Decreased by RMB 0.26 million and 61.90% mainly due
to the provision for decline in value of inventory preparation;
（ 3 ） Disposable financial asset decreased by RMB 0.17 and 19.54 % mainly due
to the Hong Kong stock exchange trading market prices decreased；
（4）Long-term share equity investment decreased by RMB 14 miollion and 18.14% mainly due
to Zhejiang Union Hangzhou Bay Ventures Co., Ltd. real estate projects losses for the year；
（5）Real estate for investment decreased by RMB 5.30 million and 13.36% mainly due to
depreciation of house properties;
(6)Fixed assets decreased by RMB 5.42 million and 30.99% mainly due
to the provision for impairment of fixed assets；
(7)Different of foreign currency translation decreased by RMB 6.39 million and 108.86% mainly
due
to the company standard accounting currency HongKong dollars to RMB exchange rate effects.
4.Reasons for material change in the items of profit and loss statement of the Company in the
report period:
Unit ：RMB‘0000
Amount of
Items of profit and loss Proportion of
statement
2011 2010 change and change (%)
percentage
Business income 985 935 50 5.35
Business cost 426 432 -6 -1.39
Operating taxes and
44 44
extras
Sales expense 28 68 -40 -58.82
Administrative
800 886 -86 -9.71
expense
Financial expenses 31 65 -34 -52.31
Asset impairment loss 331 401 -70 -17.46
29/133 29
Investment gain -1060 1152 -2212 -192.01
(1)Operating taxes and extras Increased by RMB 0.44 million
Mainly due to the original collection in the sales expense item weight classification effects;
（2）Sales expense decreased by RMB 0.40 million mainly due to abovementioned；
（ 3 ） Administrative expense decreased by RMB 0.86 million and 9.71% mainly due
to control of expenses ;
（4）Financial expenses decreased by RMB 0.34 million and 52.31% mainly due to decrease of
loans of Nanhua Company, a subsidiary;
(5)Asset impairment loss decreased by RMB 0.70 million
Mainly due to the reduction of bad debt losses;
(6)Investment gain decreased by RMB 22.12 million and 192.01 %
Mainly due to the earnings of Zhejiang Union Hangzhou Bay Ventures Co., Ltd.,decreased by R
MB 42.46 million.
5. Composition of the cash flow of the Company:
Unit:RMB‘0000
2011 Proportion to
the net
amount of Proportion of
Items Amount of cash
cash flow change in
flow
from similar cash and cash
activities % equivalents %
Subtotal of cash inflows from
business activities 1555 370.24% 965.84%
Subtotal of cash outflows from
business activities 1135 270.24% 704.97%
Net cash flows from operating
activities 420 100.00% 260.87%
Subtotal of cash inflows from
investing activities 11 122.22% 6.83%
Subtotal of cash outflows from
investing activities 2 22.22% 1.24%
Net cash flows from investing
activities 9 100.00% 5.59%
Subtotal of cash inflows from
financing activities 0 0.00% 0.00%
Subtotal of cash outflows of
financing activities 13 -100.00% 8.07%
Net cash flows from financing
activities -13 100.00% -8.07%
Influence of the change of
exchange rate on cash -255 100.00% -158.39%
Change in cash and cash
equivalents 161 100.00% 100.00%
30/133 30
Amount
of change Proportion
Items 2011 2010 of change Proportion of change (%)
and (%)
percentage
Cash
received
from sales
1099 932 167 17.92%
Recover loan
of goods or
rending of
services
Fabrics bleaching, Printing
Tax
0 18 -18 -100.00% & dyeing suspended
returned
Cash paid
for
purchasing
0 250 -250 -100.00%
The same as above
of
merchandise
and services
Taxes paid 208 189 19 10.05%
Affected by rental income
Other cash
paid for
business
552 626 -74 -11.82% Unit accounts
activities
Cash
received as
9 26 -17 -65.38%
investment
gains
The payment of the loan principal
Cash to
13 308 -295 -95.78% for the last term
repay debts
6. Status of equipment utilization of the Company:
The Company suspended production for rectification in February 2007 and plans to relocate
factory. Its equipment has been in idle status.
Due to difficulties for the joint venture and change of prospect of textile industry, this investment plan
continued to be delayed and the project for capital increase has not been completed while equipment has been
left idle. Up to the present, the project has been delayed for four years. The difficulties for the joint venture
project have constantly increased. The Company is actively seeking effective measures and trying to settle this
problem properly. The Company has made provision for impairment of fixed assets in respect of equipment.
7.The operating status of main controlling subsidiaries and joint ventures
Five subsidiaries controlled by the Company stopped the operation of relevant printing and
dyeing business due to the production suspense of printing and dyeing mill ,Nanhua Company
and Hongkong Company of them maintained their daily operation by house property lease.
In the report year, the Company suffered operation loss. Other 3 subsidiaries have suspended business.
Hangzhou Bay Company, one of joint stock subsidiaries, suffered loss in the report year, which is the main
reason for the Company's loss for the report year.
(II) Forecast of the Company's future development
1. The development trend of the industry the Company is engaged in and the situation of market
31/133 31
competition confronted by the Company
The company belongs to the textile industry, which is perfectly competitive industry and has fierce
competition in the industry. Due to the economic crisis, the decline of exports, the rising RMB exchange rate
and costs and other factors, the survival of textile business is difficult, and there is still no recovery sign for
the textile, printing and dyeing industry shown in the short term.
2. Development opportunities and challenges in the future and business plan for the new year:
In the case of disruption of the survival and development of the main textile business, the company actively
studies the future development strategy to fill the hollow blank of main business and enhance the continuous
operation capacity of the company.
3. The fund needed by the Company to realize the strategy of sustainable development, the plan
to use funds and fund source
The current funds of the company are sufficient, which meets the existing business needs and no other funds
arrangement.
4.Main risk factors and countermeasures
The company originally plans to restore the main business by the relocation of plant‘s equipment and the
operation of Nanjing project with joint venture, but due to the continual difficulties growth of Nanjing project
with joint venture, the funds-raised project hasn‘t been completed till now, and the main business of the
company has been hollow, which brings the uncertainty to the future development of the company. However,
the company is actively studying the operation strategy suitable to the future development for the company,
and strives for an early production and management for the company along the right lines. .
2. Investment in the report period
(I) There were neither funds raised in the report period nor those raised in previous periods whose use
continued in the report period.
(II) In the report period, there were investment projects utilizing non-raised funds:No
3. Notes to the unqualified auditor's report with paragraph of emphasized matters issued by Shine
Wing Certified Public Accountants for the Company's financial report for 2010
(I) Basic information about the matters involved in non-standard unqualified audit opinions:
Shine Wing Certified Public Accountants issued unqualified auditor's report with paragraph of emphasized
matters for the Company's financial statements for 2011 Basic information of emphasized matters: Since
March 2007, Shenzhen Victor Onward Textile Industrial Co., Ltd. stopped production and dismissed most of
workers. And most subsidiaries of the company had stopped production and it maintained daily operation by
house leasing. Shenzhen Victor Onward Textile Industrial Co., Ltd. had disclosed its improvement measures in
Note 13 of Financial Statement, but its sustainable operation ability is still uncertain. This paragraph does not
affect audit opinions that have been given.
(II) Basic opinions of certified public accountants on such matter:
Shine Wing Certified Public Accountants accepted entrustment, completed the audit of the financial
statements of the Company for 2011 and issued unqualified auditor's report with paragraph of emphasized
matters for the Company's financial statements for 2011. In accordance with No. 14 Rule for Preparation and
Report of Information Disclosure by Companies Publicly Issuing Securities - Non-standard Unqualified Audit
Opinions and Treatment of Matters Involved Therein, relevant notes are as follows:
As noticed by Shine Wing Certified Public Accountants during audit, Since March 2007,
32/133 32
Shenzhen Victor Onward Textile Industrial Co., Ltd. stopped production and dismissed most of
workers. The company currently only had house leasing business.
Except that Shenzhen East Asia Victor Onward Textile Printing and Dyeing Co., Ltd. is still
operating normally, other 5 subsidiaries controlled by the Company have stopped operation or
are maintaining daily operation by house property lease. It plans to invest in Nanjing East Asia
Textile Printing and Dyeing Co., Ltd. with part of machinery and equipment in 2007, Due to the
reason on the side of the other party of joint venture and change of industry prospect. we believe
that the sustainable operation ability of Shenzhen Victor Onward Textile Industrial Co., Ltd. is
still uncertain, so I emphasized the situation in the audit reports and issued unqualified auditor's
report with paragraph of emphasized matters. The matters involved in highlighted statement did
not apparently violate Accounting Standards for Business Enterprises and regulations on relevant
information disclosure standardization.
This special statement is issued by us according to relevant regulations of CSRC and shall not be used for
other purpose. We and the C.P.A. who performed this service shall not bear any liability for the consequences
caused by its improper use.
(III) The opinions of the board of directors, supervisory committee and management of the
Company on this matter:
The board of directors, Supervisory Committee and managers believed that the printing and
dyeing plant of the company had stopped operation or maintained daily operation by house
leasing. .It plans to invest in Nanjing East Asia Textile Printing and Dyeing Co., Ltd. with part of
machinery and equipment, Due to the reason on the side of the other party of joint venture and change of
industry prospect.
(IV) Extent of influence of this matter on the Company:
This event greatly impacted the production & operation activities and sustainable
development of company, it made company had the situation of implementing other special
treatment which was stipulated in Shenzhen Stock Exchange Listing Rules , the stock of our
company had been implemented for other special treatment.
(V) The possibility of eliminating this matter and its influence:
Though the transfer of printing and dyeing business has been somewhat delayed,The board of
directors of company is positively studying the future development of company to enhance
company's sustainable operating ability.
(VI) The concrete measures of eliminating this matter and its influence
Company is communicating with joint venture partner and trying to minimize the
losses and settle this joint venture project issue properly.
IV. Routine work of the board of directors
1. Board meetings and resolutions in the report period:
In the report period, the board of directors of the Company held 5 meetings in total.
1. In the Morning of April 27, 2011, the 15th meeting of the fifth board of directors of the
Company was held in the meeting room on the 16/F of Union Building , Shennan Road Central,
Shenzhen. The announcement of the resolutions of this meeting was published on Securities
33/133 33
Times , Hong Kong Commercial Daily and www.cninfo.com.cn on April 29, 2011.
2.In the Morning of August 29, 2011, the 16th meeting of the fifth board of directors of the
Company was held through voting by correspondence. The announcement of the resolutions of
this meeting was published on Securities Times , Hong Kong Commercial Daily and
www.cninfo.com.cn on August 30, 2011.
3. In the Morning of September 20, 2011, the 17th meeting of the fifth board of directors of the
Company was held through voting by correspondence. The announcement of the resolutions of
this meeting was published on Securities Times , Hong Kong Commercial Daily and
www.cninfo.com.cn on September 24, 2011.
4. In the Morning of October 18, 2011, the first meeting of the sixth board of directors of the
Company was held in the meeting room on the 16/F of Union Building , Shennan Road Central,
Shenzhen. The announcement of the resolutions of this meeting was published on Securities
Times , Hong Kong Commercial Daily and www.cninfo.com.cn on October 19, 2011.
5. In the Morning of October 28, 2011, the 2nd meeting of the Sixth board of directors of the
Company was held through voting by correspondence. The announcement of the resolutions of
this meeting was published on Securities Times , Hong Kong Commercial Daily and
www.cninfo.com.cn on October 29, 2011.
(2)Implementation by the board of directors of the resolutions of the shareholders' general
meeting
The board of directors of the Company strictly implemented the resolutions of shareholders'
general meetings and the matters authorized by shareholders' general meetings according to the
provisions of the Company Law and the Articles of Association of the Company.
2010 annual shareholders' general meeting of the Company examined and adopted the
proposal for the profit distribution of the Company for 2011: The Company is neither to
distribute dividends nor capitalize capital surplus for 2011.
（3）Performance introduced of the Special Committee of the Board of Directors
Audit committee performed the following duties based on the principle of due diligence
during the reporting period.
The members of the committees under the board of directors of the Company performed the
following responsibilities in the light of the principle of diligence and dutifulness:
1. On September 1, 2011, the nomination committee of the board of directors held a special
meeting to examine the post qualification of 9 recommended candidates for directors and
independent directors of the sixth board of directors, made relevant resolution and submitted the
same to the board of directors for examination.
2. On December 30, 2011，Audit committee reviewed company‘s financial report auditing
work plan 2011 and debriefed the ―Analysis on the business activities of Shenzhen Victor
34/133 34
Onward Textile Industrial Co., Ltd. in 2011‖ presented by financial department of Shenzhen
Victor Onward Textile Industrial Co., Ltd., audit committee agreed the financial report audit
work plan 2010 submitted by company.
3.On January 20, 2011, Audit committee gave the opinion to unaudited financial
statements at the second meeting before annual report and thought that the financial statement
2011 prepared by company basically reflected the assets status and business performance of
company. Audit committee agreed to conduct annual finance report audit work based on it and
request company‘s financial department provide positive cooperation, and coordinate this audit
work, strengthen communication and contact, promptly inform audit committee about the issues
found in auditing works and audit progress
4. On March 30, 2012, Audit committee carefully reviewed the initial audit report issued by
annual CPA at the third meeting before annual report. By referring to part of their working paper
and verifying related situation, audit committee thought that this initial audit report was prepared
according to new edition of accounting standard. Basically, it truly and fairly reflected
company‘s financial situation on Dec. 31st, 2011 and business performance and cash flow in
2011. There is no objection on the initial audit report issued by annual audit CPA.
5.On April 20, 2012, The audit committee examined and adopted the proposal for renewing
the engagement of Shine Wing Certified Public Accountants as the auditing body of the
Company for 2012 and for engaging Shine Wing Certified Public Accountants as the auditing
body of the Company for internal control in 2012. Audit committee think that ShineWing
accounting firm strictly followed the regulations of audit laws and rules and started and
completed company‘s annual audit 2010, the audit time is sufficient, audit personnel have high
professional quality, strong practice ability and risk awareness. Their audit conclusion truly
reflected the actual situation of company. Audit committee proposed to recruit ShineWing
accounting firm continuously as the audit institution for annual audit 2012. The audit committee
examined and adopted the proposal for renewing the engagement of Shine Wing Certified Public
Accountants as the auditing body of the Company for 2012 and for engaging Shine Wing
Certified Public Accountants as the auditing body of the Company for internal control in 2012.
Audit committee proposed to recruit ShineWing accounting firm continuously as the audit
institution for annual audit 2011.
(V). Preplan for profit distribution or capitalization of capital surplus for 2011 Profit distribution
preplan for 2011
（1）Profit distribution preplan for 2011
As audited by Shinewing Certified Public Accountants, the total profit of the Company for 2011
is RMB -17,466,414 , After deduction of minority gains and losses of RMB-61,919 and income
tax expenses of -42,902, net profit is RMB-17,361,593,the total year-end undistributed profit is - RMB
-116,026,610. The Company is neither to distribute profit nor to capitalize capital surplus for the current
year.
(2）Particulars about the cash bonus of the Company in lately three years
Unit：RMB
Ratio of net profit
Net profit attributable
attributable to
to shareholders of
Year for bonus Amount of cash shareholders of listed Distributable profit
listed company in
distribution bonus(Included Tax) company in dring the year
consolidated statement
consolidated
of bonus year
statement
2010 0.00 4,102,924.00 0.00% -98,665,017.00
35/133 35
2009 0.00 12,090,678.00 0.00% -102,767,941.00
2008 0.00 -25,957,333.00 0.00% -115,810,517.00
The proportion of accumulative cash bonus during recent three
0.00%
years in latest annual average net profit（%）
6. Investment management in the report period
a) There were neither proceeds raised in the report period nor those raised in previous
periods whose use continued in the report period.
b) In the report period, there were no projects using non-raised proceeds.
c) In the report period, there was neither entrusted money management nor entrusted
loan.
7.The statement of the board of directors on responsibility for internal control and conditions of
establishment and perfection of internal control system
The statement of the board of directors on responsibility for internal control: It is the
responsibility of the board of directors to establish, perfect and effectively implement internal
control system and evaluate the effectiveness of internal control according to the provisions of
Basic Standards for Internal Control of Enterprises, Guidelines for Internal Control of
Enterprises and Guidelines for Evaluation of Internal Control of Enterprises.
The main progress of establishment and perfection of internal control system is as follows:
In the report year, the management of the Company attached great importance to the
implementation of internal control and formulated the Work Scheme for Implementation of
Internal Control Standards of the Company according to the actual operation status at present for
the purpose of improving internal control system related to financial report, laying solid
foundation for development and enhancing the ability and level of preventing and withstanding
risks.
In the morning of April 27, 2011, the 15th meeting of the fifth supervisory committee of Shenzhen Victor
Onward Textile Industrial Co., Ltd. was held on 16/F of Union Building, Shennan Road Central, Shenzhen.
The meeting examined and adopted the Work Scheme for Implementation of Internal Control
Standards of the Company.
To substantially promote the construction of internal control system and ensure high quality
and actual effect, the Company established a work team for internal control under the direct
leadership of board chairman according to relevant work scheme and actively carried out internal
control work related to financial report. After mobilization and relevant training, basic
information sorting, defect comparison of business flow and system and formulation of
practicable internal control standards for the stage of internal control system construction have
36/133 36
been completed. For the stage of self-evaluation of internal control, the formulation of evaluation
standards and defect verification and gathering have been basically completed. Next, the report
on rectification and self-evaluation of internal control for the stage of self-evaluation of internal
control will be reported. Auditing certified public accountants for internal control will be
engaged and auditor's report on internal control will be issued.
During the active implementation of internal control, the Company seriously examined and
reviewed the implementation status, progress and content of internal control in previous period
and found the following main problems: (I) There is room for improvement in respect of
insufficient professional capacity for professional capacity, lacking of specialized knowledge and
low quality standards for internal control system construction in the initial stage. (II) Internal
control document system awaited further improvement. The documents for basic management
system of the Company were comprehensive and systematic but those related to internal control
require further revision, supplementation and perfection. (III) There was dispute over the way to
satisfactorily construct internal control system and enable it to comply with the actual operating
status of the Company and better enhance its management level and increase economic benefits.
To solve the above problems, on the one hand, the Company will help its employees get a
better understanding of internal control and learn more specialized knowledge about internal
control and arouse their enthusiasm of participation, which will lay solid foundation for the
implementation of internal control in the future. On the other hand, the Company will really turn
internal control into an important part of day-to-day work for controlling and reducing risks
according the principle of simplification, effectiveness and practicality, based on thriftiness and
in the light of the situation of production suspense and uncertain main operation.
8. Implementation status of Regulations on Insider Registration and Management
In the report year, the Company strictly implemented Regulations on Insider Registration
and Management. The insider record was reported in all periodical reports to be disclosed
according to facts.
Insiders did not purchase or sell the stocks of the Company or derived securities. Regulatory
authority did not take supervising measures or impose administrative penalty against the
Company or relevant personnel due to failure of implementation of Regulations on Insider
Registration and Management or being suspected of insider trading.
Section VIII Report of the Supervisory Committee
I. The meetings of the supervisory committee
37/133 37
In the report period，the supervisory committee of the Company held 5 meetings in total.
(1) In the morning of April 27, 2011, the 12nd meeting of the fifth supervisory committee of Shenzhen Victor
Onward Textile Industrial Co., Ltd. was held on 16/F of Union Building, Shennan Road Central, Shenzhen.
The meeting examined and adopted the following resolutions:
1. 2010 Work Report of the Company;
2. 2010 Auditor's Report of the Company ;
3. Profit Distribution Preplan of the Company for 2010;
4. 2010 Annual Report and 2010 Annual Report (Summary) of the Company;
5. Special Statement on Matters Involved in Unqualified Auditor's Report with Highlighted
Matter Paragraph for 2010;
6. Report on Self-evaluation on Internal Control of Shenzhen Victor Onward Textile Industrial
Co., Ltd. in 2010;
7. Work Scheme for Implementation of Internal Control Standards of the Company;
8. The First Quarterly Report 2011;
9. Proposal for Changing Accounting Policies of the Company.
（2）In the Morning of August 29, 2011, the 13rd meeting of the fifth supervisory committee of
the company was held through voting by correspondence. The meeting examined and adopted
the following resolutions:The semiannual report 2011 and its Summary.
（3）In the Morning of September 20, 2011, the 14th meeting of the fifth supervisory committee
of the company was held through voting by correspondence. The meeting examined and adopted
the following resolutions: the Proposal Concerning Reelection of Supervisory Committee ;
（4）In the morning of October 18, 2011, the first meeting of the Sixth supervisory committee of Shenzhen
Victor Onward Textile Industrial Co., Ltd. was held on 16/F of Union Building, Shennan Road Central,
Shenzhen. The meeting examined and adopted the following resolutions: Mr. Dong Binggen was
elected as chairman of the sixth supervisory committee of the Company.
（5）In the Morning of October 28, 2011, the 2nd meeting of the sixth supervisory committee of
the company was held through voting by correspondence. The meeting examined and adopted
the following resolutions: The Third Quarterly Report 2011.
II. In the report period，the supervisory committee seriously performed its duties and expressed
independent opinions in respect of the following matters:
1. The operation of the Company according to law.
In the report period, the Company operated strictly according to Company Law, Securities law
and the Articles of Association of the Company and other relevant laws and regulations. The
Company's procedure of decision was legal and its internal control system was sound. The
38/133 38
directors and managers of the Company all did their duties during their work and none of their
acts were found to violate the laws, regulations and the Articles of Association or harm the
Company's interests.
2. Inspection of the financial status of the Company.
The Supervisory Committee carefully checked and examined the financial data of the Company including the
financial report of the Company for 2011 audited by Shine Wing Certified Public Accountants and held the
opinion that the unqualified auditor's report of the Company for 2011 with paragraph of emphasized matters
issued by Shine Wing Certified Public Accountants was true and gave a true view of the financial position and
operating results of the Company.
3. The Company did not raise funds in the report period.
4. Neither insider trading nor act that caused harm to the rights and interests of part of
shareholders or the loss of the Company's assets was found in respect of the transaction price of
the assets purchased or sold by the Company.
5. The related transactions between the Company and associated enterprises (companies) were
conducted in a fair manner and at market prices. The joint investment made by the Company and
related enterprises is in keeping with the interests of the Company. Relevant voting procedure
complied with relevant provisions of the Articles of Association of the Company and Stock
Listing Rules of Shenzhen Stock Exchange and related directors observed the regulations on
absence during vote. The related transactions were fair and reasonable and did not harm the
interests of the Company and middle and small shareholders.
6. In the report year, Shine Wing Certified Public Accountants issued unqualified auditor's report
with paragraph of emphasized matters for the Company's financial report for 2010. Company
board of supervisors that: the cost in printing & dyeing industry is continuing high in Shenzhen.
the printing & dyeing business of the Company and Productions & operations are in serious
difficulties and are hard to continue normal operation. the Company controlled subsidiary
Nanhua Printing & Dyeing and the Company ownerd Printing & Dyeing Factory are
continuously suspended for rectification. As the transfer of the Company's printing and dyeing
business is somewhat delayed, the production and operating activities of the Company have been
seriously affected, In accordance with the provisions of 13.3.1 of Stock Listing Rules of
Shenzhen Stock Exchange, Shenzhen Stock Exchange carried out special treatment of the stocks
of the Company from August 27, 2007.
7. The current internal control system of company is relative perfect, reasonable and
effective in general, company‘s Self-assessment report for internal control 2011 objectively and
truly reflected the establishment, development and implementation of company internal control
system.
Section IX Important Events
I. The Company did not get involved in any material lawsuit or arbitration in the report period.
II. The acquisition and disposal of assets and merger by absorption in which the Company was
39/133 39
involved in the report period.
III. Related transactions.
(I) Related transactions related to daily operation
1.Related leased
Not applicable
(2) Fund transfer between the Company and related parties( Unit:RMB)
Amount of Amount of
Related party
period-end period-begin
Account receivable:
Shenye Union(Hong Kong) 299,354 314,198
Other receivable
Union Group 23,159,803 22,564,462
Union Property 700,734 699,258
3. Other material related transactions
No other material related transaction.
4. Significant contracts and their performance
(I) The Company did not hold in trust or contract for or lease the assets of other companies nor
did other companies nor did other companies hold in trust or contract for the assets of the
Company in the report period.
(2). Significant guarantee:
(A) In the report period, the Company did not provided the external guarantee. There was no significant
guarantee that was provided in previous periods but continued to be valid in the report period. The Company
will strictly according to the requirements of laws and regulations of the Company Law, the Securities Law,
Stock Listing Rules and the Articles of Association of the Company, further standardize the fund transfer
between the Company and the controlling shareholder and other related parties, lower operation risk and
protect the legitimate rights and interests of investors.
(B) The special statement and independent opinions of the independent directors on the external guarantee of
the Company.
According Circular on Certain Issues Relating to Standardization of Fund Transfer Between Listed
Companies and Their Related Parties and Guarantees Provided by Listed Companies ("the Circular") issued by
CSRC, we, as the Company's independent directors，seriously examined the status of the external guarantee
provided by the Company with practical attitude and hereby give our opinions on relevant issues:
According to the result of our prudent investigation，as of December 31, 2010,the Company did not provide
guarantee to its controlling shareholder, other related parties of which the Company holds less than 50% equity,
any unincorporate entity or individual against regulations nor did the controlling shareholder and other related
parties force the Company to provide guarantee to others as of the end of the report period. In the report
period，the Company specified the examination and approval procedure of external guarantee and the credit
40/133 40
standards for the object of guarantee according to the gist of the Circular, added the same to the revised
Articles of Association of the Company, strictly observed the provisions of the Articles of Association of the
Company and strictly controlled the risks of its external guarantee.
（3）The Company did not entrust others to manage its cash assets in the report period.
（4）Other significant contracts
The first provisional shareholders' general meeting of Shenzhen Victor Onward Textile Industrial
Co., Ltd. in 2007 held on April 6, 2007 adopted the proposal for increasing capital of Nanjing
East Asia Textile Printing and Dyeing Co., Ltd.
Nanjing East Asia Textile Printing and Dyeing Co., Ltd. ("Nanjing East Asia") is a sino-foreign
equity joint venture legally registered in Nanjing. The Company plans to operate Nanjing East
Asia as a joint venture through increasing share capital of Nanjing East Asia. The Company is to
increase capital of Nanjing East Asia with material objects valued at RMB 30 million as
registered capital (full payment of subscribed registered capital is subject to the appraised value
accepted by both parties), which accounts for 30% of total registered capital. The original
shareholders of Nanjing East Asia are to invest RMB 70 million in Nanjing East Asia as
registered capital (Full payment of subscribed registered capital is subject to audited amount
accepted by both parties), which accounts for 70% of total registered capital. After completion of
share capital increase, Nanjing East Asia will be renamed as NAN JING VICTOR ONWARD
PRINTING & DYEING CO.,LTD .
As the funding of joint venture counterpart is not available in time, it caused the delay of project
schedule and the increasing investment project has not been finished by now. It has been delayed
for three years and many factors had changed comparing with the original factors, a lot of things
had changed such as local investment environment, financing environment and environmental
requirement etc. which increased the difficulty to the starting of joint venture investment project.
It also caused a lot of loss for the long time idle of factory machine and equipment. The expense
for restarting equipment will be increased greatly and all of them make the difficulties to the
completion of joint venture investment project. Company is keeping communication with joint
venture partner and trying to reduce the loss to the uttermost level & solve this joint venture
project issue properly.
As the other party of joint venture failed to make construction fund available for use in time,
the construction term of the project was extended. Up to the present, the joint venture project has
not been completed. The project has been delayed for four years. Many factors such as local
investment environment, financing environment and environmental requirements have changed
greatly, which has made it more difficult to construct the joint venture project. Long-term idling
of factory machinery and equipment caused great wear and tear and the cost of restarting
equipment was expected to increase greatly, which made it difficult to complete the joint venture
project. The Company is actively seeking effective measures to minimize losses and solve the
problem of joint venture project satisfactorily.
(5) In accordance with the notice of Shenzhen Stock Exchange about Fair Information
Disclosure of Listed Companies, the Company improved internal control system and procedure
41/133 41
for information disclosure and formulated reception and introduction system, information
disclosure, reference and registration system. The Company and relevant information disclosure
obligors strictly abode by the principle of fair information disclosure, neither implemented
discriminatory policy nor disclosed, revealed or divulged non-open significant information to
specific objects.
Reception Place Mode Object Discussion issue and offered
information
Office of Telephone Individual The Company
board investor communicated with
investors in respect of its
2011 secretary of production and operation
the status and its reorganization
and listened to the opinions
Comapny of investors.
(VI) In the report period, Commitment made by the Company or shareholders holding over 5%
of shares of the Company.
(1) Capital commitments
1.Significant commitments
The external investment contract and the related financial expenses signed haven‘t been
executed or fully performed
As of December 31, 2011, Group has signed a contract but there are still outstanding major
agreement total foreign investment RMB 30 million .Specific conditions are as follows:
Name Investment Payabl Non-payabl Investme Notes
amount e e amount of nt Period
amoun investment
t of
invest
ment
Investment in
The Capital inc
machinery and
reasing of the
equipment in 30 million - 30 million Uncertain
project has not
Nanjing East asia
yet completed
Textiles Co., ltd.
2.The Signed or is ready to carry out the contract of large contracts
As of December 31, 2011,The Group still has signed the agreement but did not pay large
amounts of letting contracts total RMB 1.71 million. Specific conditions are as follows:
Name Investment Payable Non-paya Investment Notes
42/133 42
amount amount of ble Period
investment amount of
investmen
t
The lelocation Not because of the
of production other production
equipment as 1,710,000 855,000 855,000 Uncertain sites can not be
a whole works completed
relocation
2.In addition to these commitments ，as of December 31, 2011,The Company has no other
significant commitments.
（II）Unfreezing of restricted shares held after share holding structure reform in the report period
The restricted A shares held by relevant shareholders holding non-negotiable shares in A share
market after the share holding structure reformhares were all unfrozen in 2009. The promise
made by Union Holdings Co., Ltd., the largest shareholder(43,141,032 shares) of the Company,
in the share holding structure reform of the Company: If it sells the unfrozen negotiable shares of
the Company held by it through the trading system of Shenzhen Stock Exchange six months after
unfreezing of shares and sells 5% or more than 5% of total shares within six months from the
first sale, it shall strictly meet the requirements of relevant laws, regulations and rules and timely
notify the Company to make announcement about share sales. The content of disclosure: The
quantity of shares to be sold, the planned time of sale, the range of selling price and reason for
selling and other information required by Shenzhen Stock Exchange. this commitment is under
fulfillment.
(VII)Engagement and ismission of Certified public Accountants
In the report period, The Company still engaged Shine Wing Certified Public Accountants
to do the auditing work .The annual auditing fees totaled RMB 0.30 million, Shine Wing
Certified Public Accountants has providing auditing service for 6 years for the Company in
succession.
(VIII) Punishment to the Company , its Directors, Supervisors and senior Managment and
rectification in the reporting period.
In the report period, none of the Company, its Directors,Supervisors, senior Management ,
Shareholders or actual controllers was subject to investigation by cometent authorities,
enforcement measures by judicial and regulatory authorities, transfer to judicial departments or
prosecution for criminal liability, inspection or administrative punishment by CSRC,
non-admission to securities market, or punishment by other administrative departments or
public condemnation by the Zhenzhen Exchange as a result of being identified as an
43/133 43
inappropriate candidate.
(IX) Future issues of balance sheet
This Company had no other significant matters after the balance sheet date.
(X) Other material events
The key business of the Company has not recovered. The circumstance for other special
treatment specified in Stock Listing Rules of Shenzhen Stock Exchange still exists. Other special
treatment continued for the trading of the stocks of the Company.
Section X Financial Report
Auditor‘s report
XYZH/2011SZA1035
To All shareholders of Shenzhen Victor onward Textile Industrial Co., Ltd.：
We audited accompanying financial statements of Shenzhen Victor Onward Textile Industrial Co., Ltd.
(hereinafter referred to as "the Company"), including balance sheet and consolidated balance sheet as at
December 31, 2011, profit statement and consolidated profit statement, cash flow statement and consolidated
cash flow statement, statement of changes in shareholders' equity and consolidated statement of changes in
stockholders equity for the year then ended and the notes to financial statements.
I. Management‘s responsibility for the financial statements
Preparation of financial statements in accordance with the Accounting Standards for Business
Enterprises is the responsibility of the management of the Company. Such responsibility includes:
(1) Prepare the financial statements according to business enterprises regulation, so that making
reasonable accounting estimate.
(2) design, implementation and maintenance of internal control related to the preparation of financial
statements so that financial statements are free from material misstatement caused by fraudulent
practices or errors.
II. Auditor‘s responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on
our audit and to report our opinion solely to you, as a body, and for no other purpose. We
conducted our audit in accordance with International Standards on Auditing, Those standards
require that we comply with ethical requirements and plan and perform the audit to obtain
reasonable assurance whether the consolidated financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the consolidated financial statements. The procedures selected depend on the
auditor‘s judgment, including the assessment of the risks of material misstatement of the
44/133 44
consolidated financial statements, whether due to fraud or error, In making those risk
assessments, the auditor considers internal control relevant to the Group‘s preparation and fair
presentation of the consolidated financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group‘s internal control. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of accounting estimates made
by management, as well as evaluating the overall presentation of the consolidated financial
statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
III. Opinion
In our opinion, the financial statements of the Company have been prepared in accordance with the
provisions of Accounting Standards for Business Enterprises and give a fair view, in all material aspects, of the
financial position of the Company as at December 31, 2011 and its operating results and cash flow for the year
then ended.
IV. Matters emphasized
We remind the users of financial statements to pay attention to the fact that the Company stopped
production and dismissed most of workers since March 2007. And most subsidiaries of the
company had stopped production and it maintained daily operation by house leasing. Shenzhen
Victor Onward Textile Industrial Co., Ltd. had disclosed its improvement measures in Note 13 of
Financial Statement, but its sustainable operation ability is still uncertain. This paragraph does
not affect audit opinions that have been given.
Shine Wing Certified public Accountants C.P.A：
Zhang WeiJian
C.P.A：
Xia Wei
Beijing China April 20, 2012
Balance Sheet
Prepared by: Shenzhen Victor Onward Textile Industrial Co., Ltd. Unit:RMB
December 31, 2011 December 31, 2010
Assets Parent Parent
Consolidated Consolidated
company company
21,483,163 23,577,186
Monetary fund 53,399,316 51,786,613
45/133 45
Trading financial 68,900 77,235
assets 68,900 77,235
Bill receivable
Account receivable 744,712 586,576
Prepayments 27,548 23,225
Interest receivable 38,378 6,646
Other account 72,999,033 75,638,428
receivable 457,264 175,951
Inventories 162,457 162,457 429,613 429,612
Non-current asset due
in 1 year
Other current asset
Total of current assets 54,898,575 94,713,553 53,085,859 99,722,461
Non-current assets：
Disposable financial
asset 703,055 874,427
Expired investment
in possess
Long-term account
receivable
Long-term equity
investment 63,192,614 36,788,953 77,199,476 38,613,199
Investment property 34,373,451 5,397,921 39,679,004 6,019,483
Fixed assets 12,070,406 9,170,487 17,492,132 14,313,935
Construction in
progress
Engineering material
Disposal of fixed
assets
Intangible assets 1,901,069 1,901,069 2,049,023 2,049,023
Expense on research
and development
Goodwill 5,099,624 5,352,498
Long-term expenses
to be apportioned
Deferred income tax
assets
Other non-current
assets
Total
non-current assets 117,340,219 53,258,430 142,646,560 60,995,640
Total assets 172,238,794 147,971,983 195,732,419 160,718,101
Legal representative: Financial controller The person in charge of the financial
Department:
Hu Yongfeng Zhang Jinliang Ren Changzheng
46/133 46
Balance Sheet(Cont‘d)
Prepared by: Shenzhen Victor Onward Textile Industrial Co., Ltd. Unit:RMB
December 31, 2011 December 31, 2010
Liabilities and
shareholders‘ equity Parent
Consolidated Parent company Consolidated
company
Current liabilities
Short-term loan
Trade off financial
liabilities
Bill payable
Account payable 3,239,221 113,337 3,353,297 115,281
Prepayment 2,775,476 1,999,540 2,718,175 1,939,819
Employees‘ wage
payable 590,220 559,510 620,363 579,911
Tax payable 2,700,348 1,617,284 2,914,867 1,723,217
Dividend payable 1,215,946 1,276,241
Other account payable 31,167,220 855,475 29,974,945 651,133
Non-current liability due
in 1 year
Other current liability 1,584,784 1,544,249 1,228,163 1,185,618
Total of current liability 43,273,215 6,689,395 42,086,051 6,194,979
Non-current liabilities：
Long-term loan 1,160,011 1,350,126
Long-term payable 8,486,859 8,907,695
Differed income
Expected liabilities
Differed income tax
liability 808,335 4,180,138 892,357 4,211,921
Other non-current
liabilities 836,792 836,792 878,286 878,286
Total of non-current
liabilities 11,291,997 5,016,930 12,028,464 5,090,207
Total of liability 54,565,212 11,706,325 54,114,515 11,285,186
Owners‘ equity
Share capital 169,142,356 169,142,356 169,142,356 169,142,356
Capital reserves 39,742,473 31,606,598 39,872,534 31,606,598
Less：Shares in stock
Surplus reserves 26,704,791 26,309,287 26,704,791 26,309,287
Common risk provision
Undistributed profit -116,026,610 -86,396,616 -98,665,017 -80,137,758
Different of foreign
currency translation -515,914 -4,395,967 5,874,835 2,512,432
Total of owner‘s equity
belong to the parent
company 119,047,096 136,265,658 142,929,499 149,432,915
Minor shareholders‘
equity -1,373,514 -1,311,595
47/133 47
Total of owners‘ equity 117,673,582 136,265,658 141,617,904 149,432,915
Total of liabilities and
owners‘ equity 172,238,794 147,971,983 195,732,419 160,718,101
Legal representative: Financial controller The person in charge of the financial
Department:
Hu Yongfeng Zhang Jinliang Ren Changzheng
48/133 48
Profit statement
Year 2011
Prepared by: Shenzhen Victor Onward Textile Industrial Co., Ltd. Unit:RMB
Report period Same period of the previous year
Items
Consolidated The Company Consolidated The Company
I. Total operating income 9,850,484 1,529,480 9,351,110 1,315,850
Including：Operating income 9,850,484 1,529,480 9,351,110 1,315,850
II. Total operating cost 16,626,343 7,542,183 18,546,449 5,081,502
Including：operating cost 4,269,140 478,671 4,323,089 -45,739
Business tax and surcharge 447,517
Sales expense 282,627 687,772
Administrative expense 8,000,296 5,378,215 8,868,792 5,218,289
Financial expenses 316,201 -3,045,975 652,427 -2,773,710
Asset impairment loss 3,310,562 4,731,272 4,014,369 2,682,662
Add：Gains from change of fair
-88,247 -88,247
value （―-‖for loss）
Investment gain（―-‖for loss） -10,602,528 13,965 11,523,520 257,537
Incl: investment gains from affiliates -10,616,493 11,264,659
III. Operational profit（―-‖for loss） -17,466,634 -6,086,985 2,328,181 -3,508,115
Add：Non-business income 8,308 38,382 189
Less：Non business expenses 8,088 522 40,332 39,434
Incl：Loss from disposal of non-current
5,983
assets
IV.Total profit(―-‖for loss) -17,466,414 -6,087,507 2,326,231 -3,547,360
Less：Income tax expenses -42,902 171,351 -44,704 62,760
V. Net profit（―-‖for net loss） -17,423,512 -6,258,858 2,370,935 -3,610,120
Net profit attributable to the owners of
-17,361,593 -6,258,858 4,102,924 -3,610,120
parent company
Minority shareholders‘ gain & loss -61,919 -1,731,989
VI. Earnings per share：
（I）Basic earnings per share -0.10 0.02
(II)Diluted earnings per share -0.10 0.02
VII. Other comprehensive income -6,520,810 -6,908,399 -4,320,067 -5,259,999
VIII. Total comprehensive income -23,944,322 -13,167,257 -1,949,132 -8,870,119
Total comprehensive income
attributable to the owner of the parent
company -23,882,403 -13,167,257 -129,449 -8,870,119
Total comprehensive income
attributable minority shareholders -61,919 -1,819,683
Legal representative: Financial controller The person in charge of the financial
Department:
49/133 49
Hu Yongfeng Zhang Jinliang Ren Changzheng
50/133 50
Cash flow statement
Year 2011
Prepared by: Shenzhen Victor Onward Textile Industrial Co., Ltd. Unit:RMB
Same period of the
Report period
previous year
Parent Parent
Consolidated Consolidated
Items company company
I.Cash flows from operating activities
Cash received from sales of goods or 10,994,411 1,734,055 9,321,851 1,916,761
rendingNetof increase of trade financial asset
disposalTax returned 185,563 104,485
Other cash received from business 4,554,589 2,501,703 5,010,985 3,803,329
operation
Sub-total of cash inflow 15,549,000 4,235,758 14,518,399 5,824,575
Cash paid for purchasing of 2,508,670 1,035,551
services
merchandise toandstaffs or paid for staffs
Cash paid 3,746,246 2,335,711 3,612,910 2,237,620
Taxes paid 2,079,732 923,458 1,898,137 850,110
Other cash paid for business activities 5,520,592 2,087,780 6,261,100 2,466,390
Sub-total of cash outflow from 11,346,570 5,346,949 14,280,817 6,589,671
business activitiesgenerated by business
Cash flow 4,202,430 -1,111,191 237,582 -765,096
operation, net
II.Cash flow generated by investing
Cash received from investment 81,386
retrieving
Cash received as investment gains 96,861 96,861 260,948 257,537
Net cash retrieved from disposal of fixed 9,890 9,890 9,669 9,669
assets, intangible assets, and other
long-term assets from disposal of
subsidiaries or other operational units
Other investment-related cash received
Sub-total of cash inflow due to 106,751 106,751 352,003 267,206
investmentforactivities of fixed assets, 18,535 83,200 55,788
assets
intangibleinvestmentand other long-term
Cash paid as
assets
Net increase in mortgage loan
Net cash received from subsidiaries
paid for units
and othercashoperationalinvestment activities
Other
Sub-total of cash outflow due to 18,535 - 83,200 55,788
investment activities
Net cash flow generated by investment 88,216 106,751 268,803 211,418
III.Cash flow generated by financing
Cash received as investment
Incl: Cash received as investment from
shareholders
minorCash received as loans
Cash received from bond placing
Other financing –related ash received
Sub-total of cash inflow from financing - - - -
activities to repay debts
Cash 129,462 3,084,542
Cash paid as dividend, profit, or interests
Incl: Dividend and profit paid by
Other cash to for shareholders
subsidiariespaidminorfinancing activities
Sub-total of cash outflow due to 129,462 - 3,084,542 -
financingflow generated by financing
Net cash activities -129,462 - -3,084,542 -
51/133 51
IV.Influence of exchange rate alternation -2,548,481 -1,089,583 -1,740,856 -829,638
on cashincreasecashof equivalentscash
V.Net and cash and 1,612,703 -2,094,023 -4,319,013 -1,383,316
equivalents of cash and cash 51,786,613 23,577,186 56,105,626 24,960,502
and cash term
equivalents atofthecashbeginning ofequivalents
VI. Balance 53,399,316 21,483,163 51,786,613 23,577,186
at the end of term
Legal representative: Financial controller The person in charge of the financial
Department:
Hu Yongfeng Zhang Jinliang Ren Changzheng
52/133 52
Consolidated Statement on Change in Owners‘ Equity
Prepared by: Shenzhen Victor Onward Textile Industrial Co., Ltd.
Year 2011 Unit :RMB
Amount of the Current term
Items Less: Common Minor
Capital Specialized Surplus Attributable Total of owners‘
Share Capital Shares in risk Other shareholders‘
reserves reserve reserves profit equity
stock provision equity
I.Balance at the end of last
169,142,356 39,872,534 26,704,791 -98,665,017 5,874,835
year
Add: Change of
-
accounting policy
Correcting of previous
-
errors
Other -
II.Balance at the beginning
169,142,356 39,872,534 - - 26,704,791 - -98,665,017 5,874,835 -1,311,595 141,617,904
of current year
III.Changed in the current
- -130,061 - - - - -17,361,593 -6,390,749 -61,919 -23,944,322
year
（I） Net profit -17,361,593 -61,919 -17,423,512
（II）Other misc.income -130,061 -6,390,749 -6,520,810
Total of (I) and (II) - -130,061 - - - - -17,361,593 -6,390,749 -61,919 -23,944,322
(III) Investment or
decreasing of capital by - - - - - - - - - -
owners
1. Capital inputted by
-
owners
2．Amount of shares paid
and accounted as -
owners‘ equity
3. Other -
（IV）Profit allotment - - - - - - - - - -
1.Providing of surplus
-
reserves
2．Common risk provision -
3. Allotment to the
-
owners (or shareholders)
53/133
4. Other -
(V) Internal transferring
- - - - - - - - - -
of owners‘ equity
Capitalizing of capital
reserves -
(or to capital shares)
1.Capitalizing of surplus
reserves -
(or to capital shares)
3．Making up losses by
-
surplus reserves.
4. Other -
(VI) Special reserves - - - - - - - - - -
1. Provided this year -
2．Used this term -
IV. Balance at the end of
169,142,356 39,742,473 - - 26,704,791 - -116,026,610 -515,914 -1,373,514 117,673,582
this term
Legal representative: Financial controller The person in charge of the financial
Department:
Hu Yongfeng Zhang Jinliang Ren Changzheng
Consolidated Statement on Change in Owners‘ Equity
Year 2011
Prepared by: Shenzhen Victor Onward Textile Industrial Co., Ltd.
Year 2011 Unit :RMB
Amount of the previous term
Items Less: Common Minor
Capital Specialized Surplus Attributable Total of owners‘
Share Capital Shares in risk Other shareholders‘
reserves reserve reserves profit equity
stock provision equity
I.Balance at the end of last
169,142,356 39,297,104 26,704,791 -102,767,941 10,682,638
year
Add: Change of
-
accounting policy
Correcting of previous
-
errors
Other -
54/133
II.Balance at the beginning
169,142,356 39,297,104 - - 26,704,791 - -102,767,941 10,682,638 508,088 143,567,036
of current year
III.Changed in the current
- 575,430 - - - - 4,102,924 -4,807,803 -1,819,683 -1,949,132
year
（I） Net profit 4,102,924 -1,731,989 2,370,935
（II）Other misc.income 575,430 -4,807,803 -87,694 -4,320,067
Total of (I) and (II) - 575,430 - - - - 4,102,924 -4,807,803 -1,819,683 -1,949,132
(III) Investment or
decreasing of capital by - - - - - - - - - -
owners
1. Capital inputted by
-
owners
2．Amount of shares paid
and accounted as -
owners‘ equity
3. Other -
（IV）Profit allotment - - - - - - - - - -
1.Providing of surplus
-
reserves
2．Common risk provision -
3. Allotment to the owners
-
(or shareholders)
4. Other -
(V) Internal transferring of
- - - - - - - - - -
owners‘ equity
Capitalizing of capital
reserves (or to capital -
shares)
1.Capitalizing of surplus
reserves -
(or to capital shares)
3．Making up losses by
-
surplus reserves.
4. Other -
(VI) Special reserves - - - - - - - - - -
1. Provided this year -
2．Used this term -
55/133
IV. Balance at the end of
169,142,356 39,872,534 - - 26,704,791 - -98,665,017 5,874,835 -1,311,595 141,617,904
this term
Legal representative: Financial controller The person in charge of the financial
Department:
Hu Yongfeng Zhang Jinliang Ren Changzheng
Statement of change in owner’s Equity of the Parent Company
Prepared by: Shenzhen Victor Onward Textile Industrial Co., Ltd.
Year 2011 Unit :RMB
Amount of the Current term
Different of
Items Less: Common
Capital Specialized Surplus Attributable foreign Total of
Share Capital Shares in risk
reserves reserve reserves profit currency owners‘ equity
stock provision
translation
I.Balance at the end of
169,142,356 31,606,598 26,309,287 -80,137,758 2,512,432 149,432,915
last year
Add: Change of
-
accounting policy
Correcting of previous
-
errors
Other -
II.Balance at the
beginning of current 169,142,356 31,606,598 - - 26,309,287 - -80,137,758 2,512,432 149,432,915
year
III.Changed in the
- - - - - - -6,258,858 -6,908,399 -13,167,257
current year
（I） Net profit -6,258,858 -6,258,858
（II）Other misc.income -6,908,399 -6,908,399
Total of (I) and (II) - - - - - - -6,258,858 -6,908,399 -13,167,257
56/133
(III) Investment or
decreasing of capital by - - - - - - - - -
owners
1. Capital inputted by
-
owners
2．Amount of shares
paid and accounted as -
owners‘ equity
3. Other -
（IV）Profit
- - - - - - - - -
allotment
1.Providing of
-
surplus reserves
2．Common risk
-
provision
3. Allotment to the
owners (or -
shareholders)
4. Other -
(V) Internal
transferring of owners‘ - - - - - - - - -
equity
Capitalizing of capital
reserves (or to capital -
shares)
1.Capitalizing of
surplus reserves -
(or to capital shares)
3．Making up losses by
-
surplus reserves.
4. Other -
(VI) Special reserves - - - - - - - - -
1. Provided this year -
2．Used this term -
IV. Balance at the end
169,142,356 31,606,598 - - 26,309,287 - -86,396,616 -4,395,967 136,265,658
of this term
Legal representative: Financial controller The person in charge of the financial
Department:
57/133
Hu Yongfeng Zhang Jinliang Ren Changzheng
Statement of change in owner‘s Equity of the Parent Company
Prepared by: Shenzhen Victor Onward Textile Industrial Co., Ltd.
Year 2011 Unit :RMB
Amount of the previous term
Different of
Items Less: Common
Capital Specialized Surplus Attributable foreign Total of
Share Capital Shares in risk
reserves reserve reserves profit currency owners‘ equity
stock provision
translation
I.Balance at the end of
169,142,356 31,606,598 - 26,309,287 - -76,527,638 7,772,431 158,303,034
last year
Add: Change of
-
accounting policy
Correcting of
-
previous errors
Other -
II.Balance at the
beginning of current 169,142,356 31,606,598 - - 26,309,287 - -76,527,638 7,772,431 158,303,034
year
III.Changed in the
- - - - - - -3,610,120 -5,259,999 -8,870,119
current year
（I） Net profit -3,610,120 -3,610,120
（II）Other
-5,259,999 -5,259,999
misc.income
Total of (I) and (II) - - - - - - -3,610,120 -5,259,999 -8,870,119
(III) Investment or
decreasing of capital by - - - - - - - - -
owners
1. Capital inputted by
-
owners
2．Amount of shares
paid and accounted as -
owners‘ equity
3. Other -
58/133
（IV）Profit
- - - - - - - - -
allotment
1.Providing of surplus
-
reserves
2．Common risk
-
provision
3. Allotment to the
owners (or -
shareholders)
4. Other -
(V) Internal
transferring of owners‘ - - - - - - - - -
equity
Capitalizing of capital
reserves (or to capital -
shares)
(1)Capitalizing of
surplus reserves -
(or to capital shares)
3．Making up losses by
-
surplus reserves.
4. Other -
(VI) Special reserves - - - - - - - - -
1. Provided this year -
2．Used this term -
IV. Balance at the end
169,142,356 31,606,598 - - 26,309,287 - -80,137,758 2,512,432 149,432,915
of this term
Legal representative: Financial controller The person in charge of the financial
Department:
Hu Yongfeng Zhang Jinliang Ren Changzheng
59/133
1.Basic Information of the Company
Shenzhen Victor Onward Textile Industrial Co., Ltd. (hereinafter referred to as "the
Company"), grew out of the Xingnan Printing Factory Co., Ltd, founded in 1980, was
the first wholly foreign-owned enterprise in Shenzhen. In April 1984, Xingnan Printing
Factory Co., Ltd was changed into foreign joint venture, and was renamed Shenzhen
Victor Onward Textile Industrial Co., Ltd. . On November 19, 1991, the Company was
reorganized into a joint stock limited company and renamed Shenzhen Victor Onward
Textile Industrial Co., Ltd. pursuant to the approval of Shenzhen Municipal
Government.
The domestically listed RMB ordinary shares ("A shares, Stock code: 000018" ) and
domestically listed foreign investment shares ("B shares ,stock code: 200018") issued
by the Company were listed on Shenzhen Stock Exchange in 1992.
By December 31, 2011, the total share capital was 169,142,356 million shares, of which
circulating A-share 99,720,453 shares, circulating B-share 69,421,903. of which Union
Holdings Co., Ltd. (hereinafter referred to Union Holdings ) holding limit-sale
A-shares3,141,032 shares, accounting for 25.51% of the total equity, is the controlling
shareholder of the company, Union Development Group Co., Ltd. (hereinafter referred
to Union Group)holding circulating A –share 5,821,089 shares, accounting for 3.44% of
the total equity, Union Group holds 31.32% of equity of Hualian Holdings and has the
right to control Union Holdings, thus Union Group is the actual controller of the
Company.
By December 31, 2011, Victor Onward printing and dyeing (Hong Kong) Co., Ltd.
(hereinafter referred to as "Hong Kong Victor Onward"), Hong Kong Victor Onward
Digital Printing Co., Ltd. (hereinafter referred to as "Victor Onward Digital Printing"),
Shengzhong Industrial Co., Ltd. (hereinafter referred to as "Shengzhong") ,Shenzhen
East Asia Victor onward Holding (hereinafter referred to as ―East Asia Company)and
Shenzhen Nanhua Printing and Dyeing as well as its wholly-funded subsidiary Nanhua
Xingye Co., Ltd (hereinafter referred to as "Nanhua Xingye") are all subsidiaries of
the Company. The Company and its subsidiaries are collectively referred to as "the
Group".
The Group is mainly engaged in the production and processing (printing and dyeing) and sales of
various high-grade fabrics of pure cotton, pure linen, polyester-mixed cotton, linen cotton and mixed
fiber and finished garments. Registered address: 26 Kuipeng Road, Kuiyong Town,
Longgang District, Shenzhen Legal Representative: Hu Yongfeng
II. Basis for the preparation of financial statements
The financial statements was prepared on the basis of the Group's continuous operation.
III.Complying with the statements in Accounting Standards for Business Enterprises
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The financial statements of the Group comply with the requirements of Accounting
Standards for Business Enterprises, truly reflect the integrity of the financial situation,
operating results and cash flows, and other relevant information of the company.
IV. Accounting policies, accounting estimation and the method of preparing consolidated
financial statements
(1)Fiscal year
The fiscal year of the Group starts on January 1 and ends on December 31 on the
Gregorian calendar.
(2)Standard currency for book keeping
Except for Shenzhen East Asia Company and Veaopel taking RMB as the standard
currency for bookkeeping, the Company and other subsidiaries of the Group all take
HKD as the standard currency for bookkeeping.
(3) Basis for bookkeeping and costing principle
The Group's basis for bookkeeping is accrual system. Except that the financial assets for
transaction, the financial liabilities for transaction, and financial assets available for sale
are accounted by fair value, generally, account by historical cost.
(4) Cash and cash equivalents
The cash stated in cash flow statement refers to cash in hand and bank deposits usable
for payment at any time. Cash equivalent refers to the investments with holding period
of less than 3 months and strong liquidity that are readily convertible to known amount
of cash and subject to insignificant risk of changes in value.
(5)Foreign currency Convert
（1）Foreign currency Transactions
（2）Foreign currency statement Convert
The financial statements of the company and the subsidiaries making HK dollars as bookkeeping currency
shall be converted into RMB. In the course of conversion, the assets & liabilities items shall be converted by
using the spot exchange rate on the balance sheet date, the items of shareholders equity except for the
retained profit shall be converted according to the spot exchange rate, the items of incomes and expenses in
the profit statement shall be converted by the approximate exchange rate of spot exchange rate on
the transaction date. The conversion differences of foreign currency statements produced in the
above conversions shall be individually listed under the item of shareholders equity.
The cash flow in the cash flow statement are converted by the average exchange rate of the
market rates announced in the accounting period. The influences on cash flow from the changes
of exchange rate are separately listed in cash flow statement.
6. Financial assets and Financial Liabilities
(1). Financial assets
1.Classification of financial assets:
According to investment purposes and economic nature, the financial assets of the Group can be divided into
the financial assets measured by fair value and the changes included in the current loss and gain, the expired
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investments held, receivables and financial assets for sale, the four categories.
The financial assets measured by fair value and the changes included in the current loss and gain: mainly
refer to the financial assets for sale in short term, which shall be listed in balance sheet in transactional
financial assets.
The expired investments held: refer to the non-derivative financial assets which have fixed expire date and
fixed or determined recovering amount.
Loan and account receivables: refer to the non-derivative financial assets which have no quotation in active
market but have fixed or determined recovering amount, including notes receivable, accounts receivable,
interest receivable, dividends receivable and other receivables.
Financial assets for sale: include the non-derivative financial assets which are recognized as for sale when
they are initially confirmed, and the financial assets which are not divided into other categories.
2. Confirmation and measurement of financial assets
Financial assets in the financial instruments of the group, confirmed by all fair value in the bala
nce sheet. The relevant expenses to obtain the financial assets measured by fair value and the ch
anges included in the current loss and gain shall be included in the current loss and gain, the rel
evant transactional expenses of other financial assets shall be the initial confirmation amount.
At fair value and changes in their gains and losses included in the current period of financial
assets and financial assets to be sold in accordance with the fair value of follow-up measures;
receivables and investments held to maturity using the effective interest method to share more
than the cost listed.
The changes of fair values of financial assets measured by fair value and the changes included
in the current loss and gain shall be included in the changing loss and gain of fair value; all the
interest and cash dividends obtained during the period holding the assets shall be confirmed as
investment income; upon the disposal of the assets, the differences between the fair value and
initial bookkeeping amount shall be confirmed as investment loss and gain, and at the same
time, the changing loss and gain of fair value shall be adjusted.
Except for impairment losses and monetary financial assets in foreign currency exchange gains and losses,
the financial assets measured by fair value and the changes included in the current loss and gain,
on the financial sheet date, the Group will check the book value of other financial assets on the
balance sheet date, if there is objective evidence showing that impairment has happened on a
financial asset, provision for the impairment shall be drown.
3. Impairment of financial assets
Except for the financial assets measured by fair value and the changes included in the current
loss and gain, on the financial sheet date, the Group will check the book value of other financial
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assets on the balance sheet date, if there is objective evidence showing that impairment has
happened on a financial asset, provision for the impairment shall be drown.
Amortized cost measurement of financial assets reducing value, according to the estimated future cash
flows(excluding future credit losses that have not occurred)are lower than the difference between the book
value of, provision
Amortized cost measurement of financial assets reducing value, according to the estimated future cash flows
(excluding future credit losses that have not occurred)are lower than the difference between the book value of,
provision for impainment . if there is objective evidence that a financial asset value has been restored, and
objective and confirm matters that occurred after the loss, back to original
confirmationofimpairmentlosses,included in the current profits and losses.
When the fair value of financial assets available for sale through large or non-temporary dedine, the original
directly included in the fair value of the equity out of drop formation of accumulated losses and included
impairment losses. Confirmed that the impairment loss of investment in debt securities available for sale, fair
value increases, and after a period on the objective and confirm matters that occurred after the impairment
losses, reversal and the original confirmation of impairment losses induded in the current profits and losses.
(1)Transfer of financiao assets
Financial assets to meet one of the following conditions, terminates confirmed: ① the right to receive cash
flows from the financial asset of the contract termination; ② the financial asset has been transferred, and the
group will finance almost on all the risks and rewards of ownership of assets transferred to the party; ③ the
financial asset has been transferred, although the Group has neither transferred nor retained almost on all the
risks and rewards of ownership of financial assets, but gave up on the control of financial assets.
Enterprise has neither transferred nor retained almost on all the risks and rewards of ownership of financial
assets, and did not give up on the control of financial assets, in accordance with their continuing involvement
in transferred financial assets recognized on financial assets, and confirm the liabilities accordingly.
Total transfers of financial assets to meet the termination of recognition criteria, the book value of the
transferred financial assets, and received by the transfer price and the original included in other
comprehensive income difference between the sum of the changes in the fair value of the cumulative amount
of included in the current profits and losses.
Financial assets part transfer meet terminated confirmed conditions of, will by transfer financial assets
overall of book value, in terminated confirmed part and is not terminated confirmed part Zhijian, in
accordance with their of relative fair value for sharing, and will due to transfer and received of on price and
the should sharing to terminated confirmed part of original meter into other integrated income of fair value
changes Trojan amount of and, and sharing of Qian in book amount of difference meter into Dang period
profit and loss.
(2)Financial Liabilities
The financial liabilities of our Group shall be classified into the financial liabilities or other ones which are
measured at their fair values and the variation of which is recorded into the profits and losses of the current
period when they are initially recognized.
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The financial liabilities, which are measured at their fair values and the variation of which is recorded into
the profits and losses of the current period, including transactional financial liabilities and the financial
liabilities designated which are measured at their fair values and variation of which is recorded into the
profits and losses of the current period when they are initially recognized, shall be made subsequent
measurement on its financial assets according to their fair values, and the profits and losses arising from the
change in the fair value and the dividends and interests expenses related to the financial liability shall be
recorded into the profits and losses of the current period.
The subsequent measurement shall be made on the basis of the post-amortization costs by adopting the actual
interest rate method for other financial liabilities.
When financial liabilities present obligations in whole or in part have been discharged, terminating confirmed
part of the financial liabilities or obligations have been discharged. Terminating confirmed part of the
difference between the book value and paying the price, included in the current profits and losses.
(3)The determination method for fair value of financial assets and financial liabilities
If there is active market for a financial instrument, the quoted prices in the active market shall be used to
determine the fair values thereof. In the active market, the quoted prices of our Group for the financial assets
it holds or the financial liabilities it plans to assume shall be the present actual offer for the corresponding fair
values of assets or liabilities, while the quoted prices of our Group for the financial assets it plans to acquire
or the financial liabilities it has assumed shall be the available charge for the corresponding fair values of
assets or liabilities. Where there is no available offer or charge for a financial asset or financial liability, but
there is no any significant change to the economic environment after the latest transaction day, we shall adopt
the market quoted price of the latest transaction to determine the fair value of the said financial asset or
financial liability.
Where there is no active market for a financial instrument, we shall adopt value appraisal techniques to
determine its fair value. The value appraisal techniques mainly include the prices adopted by the parties, who
are familiar with the condition, in the latest market transaction upon their own free will, the current fair value
obtained by referring to other financial instruments of the same essential nature, the cash flow capitalization
method and the option pricing model, etc.
7.Account receivable and provisions for bad debts
The Group will recognize the following cases as the determination standard of loss on bad debts for accounts
receivable: the debt or others can't be repaid in the foreseeable period, e.g. the debtor units have been closed,
revocation, bankruptcy, insolvent, severe insufficient cash flow or the occurrence of natural disasters; the
repayment obligations are delayed and failed to be performed beyond 3-year by the debt entities; there are
other absolute evidences proving that unable to be collected or little possibility.
The Group adopted the method of counter compensation for the possible bad debt losses, which
were drown provision for bad debt by the method of individual recognition at period end and
were included in the current loss and gain. The receivables which were not to be recovered,
after being approved by the Group, would be regarded as bad debt loss and the provision for
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bed debt would be written off.
（1）Accounts receivable with material specific amount and specific provisioned bad bebt preparation.
Judgment criteria or amount standard of Account receivable with special account
material specific amount or amount receivable exceeding RMB 1 million is
criterial viewed as material accounts receivable.
Provision method with material specific Provision Had debt preparation in
amount and provision of specific bad accordance with the difference of
debt preparation present value of future cash flow below
the book value .
(2)The accounts receivable of bad debt provisions made by Group
Determine the basis of Group
Group of account age The Group is classified by the credit risk features
basised on the account age of receivables
Group of affiliated party The Group is classified by the credit risk features
based on the relations of account receivables and
transaction objects.
Deposit Group The Group is classified by the credit risk features
basised on the account age of receivables .
The withdrawing method of bad debt reserves carried by Group.
Group of account age The provisions for bad debts withdrawn by the analysis
method of account age
Group of affiliated party Generally without the provisions for bad debts.
Group of account age Generally without the provisions for bad debts.
1）Provision proportion of bad debt preparation of accounts receivable adopting aging
analysis method：
Age Proportion
Within 1 year 3%
1-2 years 10%
2-3 years 50%
Over 3 years 100%
2）The accounts receivable of bad debt provisions withdrawn by adopting other methods：
Related party Special relationship between the related party and the Group
(such as joint ventures, associates, etc.), there is a little
Group
balance between the predicted future cash flow and the
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carrying amount.
Including the rent deposit, purchase deposit and reserve
deposit, etc., but without great individual amount and the
Deposit Group bad debt reserves withdrawn by combination are difficult to
reflect the accounts receivable of risk features.
（3）Account receivable with non-material specific amount but specific bad debt preparation
Accounts receivable with non-material
Reason of specific bad debt preparation specific amount and being not able to relent
provison its risk character by provisioning bad debt
preparation in accordance with portfoio
Bad debt preparation will be provisioned
inaccordance with the difference of
Provision method of bad debt preparation
present value of its future cash flow below
its book value.
8. Inventories
(1)The inventories of the Company include raw materials, work-in-process, finished
products, low-value and easily-worn articles and packing articles and are stated at the
lower of cost and net realizable value.
Perpetual inventory system was implemented for inventory, the inventory would be
priced according to actual cost; upon receiving or sending inventory, weighted average
method would be used. The low value consumable products would be amortized by
method of one-time writing off.
The inventory at year end can be priced by depending on which is lower between cost
and realizable net value if the inventory were damaged or full or partly unused or the
sale price lower than cost and other reasons. The provision for devaluation of finished
products and big raw materials shall be drown according to the difference which the
cost of individual inventory item higher than the realizable net value; other raw
materials with large quantity and low unit price shall be drown provision for devaluation
according to categories.
9.Long-term equity investment
Long-term equity investments mainly include the equity investments which are held by
the Group and the ones that the units being invested can be controlled or jointly
controlled, or the equity investments which have not quotation in active market and the
fair value can not be reliably measured.
Joint control refers to the control that common control on some economic activities
according to contract. The references for the determination of common control are the
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business activities which any operating party can not be controlled independently; the
decisions relating to basic operating activities of the joint venture enterprise are to be
agreed by all joint parties.
Significant impact refers to having the right to participate in decision making on
financial and operating policies of the units being invested but can not control or jointly
control the making of these policies. The determining reference of significant impact is
to own 20% (inclusive) or more but less than 50% of the voting shares directly owned
by the Group or owned through subsidiaries, unless there is clear evidence that under
that circumstance the production operating decision can not be participated and no
major influence will formed.
The long-term equity investments obtained through merger of companies under same
control the merger were the owner's equity book value of the shares as a long-term
equity investment of initial investment cost. The long-term equity investments obtained
through merger of companies under different control shall make the fair value which
made on the merger (purchase) to pay the control of the assets or liabilities as the
merger cost.
Apart from the long-term equity investments stated above, the long-term equity
investment obtained by cash, the initial investment obtained by cash will be determined
according to the price actually paid, initial investment costs include the direct costs, tax,
and other necessary expenses to obtaining long-term investment; the initial investment
will be determined according to the fair value of the equity securities issued; the
long-term equity investments invested by investors, the initial investment cost shall be
determined according to contract value; the long-term equity investment obtained by
debt restructuring, non-monetary assets or other methods, the initial investment cost
shall be determined according to the relevant accounting standards.
If the subsidiary uses the cost method to account, adjustment shall be conducted
according to equity method when prepare the consolidated financial statements; the
joint venture and joint venture investment using the equity method; for the long-term
equity investments which have no control or joint control or significant influence and no
price in an active market, the method of cost shall be adopted to account; the long-term
equity investments which have no control or joint control or significant influence, there
are quotations in an active market and the fair value can be reliably measured, shall be
accounted as financial assets for sale.
When using the method of cost accounting, the long-term equity investments were
priced by the initial investment costs.Additional investment to recover the cost of
long-term equity investment. When using the equity method accounting, the current
investment gains and losses are the share of net losses and gains to be owned or shared
and achieved in the current year by the unit being invested. When determining the share
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to be shared by the unit being invested, on the basis of the fair value of the identifiable
assets, according to the accouting policy and accounting period of the Group, offsetting
the internal transaction loss and gain and the part that the equity proportion attributable
to the joint enterprise and united enterprise, and confirm the net profit of the unit being
invested after profit adjustment.
For the long-term equity investments on joint venture enterprises and joint owned
enterprises held before the first implementation date, if existing the debit difference
relating to the equity investment, the debit difference of equity investment, after
deducting the investment loss and gain according to the original remained period,
should be confirmed as investment gains and losses.
The Group shall adopt the cost method to calculate for those invested units that never
have the jointed control or significant impacts due to the investment reduced, and a
long-term equity investment for which there is no quoted price in the active market and
whose fair value cannot be reliably measured; Also, the cost method shall be adopted to
calculate for the long-term equity investment able to be implemented and controlled to
the invested units due to the investment supplemented; Moreover, the equity method
shall be adopted to account for performing the jointed control or significant impacts to
the invested units but no control formed due to the investment supplemented, or without
control to the invested units but able to implement the long-term equity investment of
jointed control or major impacts to the invested units due to disposing of the investment.
The gap between the carrying amount and actual payment gained in disposal of the
long-term equity investment will be recorded into the investment interest of the current
period. Using the equity method for calculating the long-term equity investment which
is recorded into the owner's equity due to other changes except for the net profits or
losses of the invested units, the initial parts recorded into the owner's equity shall be
transferred into the investment returns of the current period when disposal of the
investment.
10. Investment real estate
The investment real estates of the Group are the rental buildings.
The investment real estates are accounted by the cost, the purchased investment real
estates include the cost of the purchase price, related taxes and fees and other expenses
which can be directly attributable to the assets; the costs of investment real estate self
constructed include the necessary expenses to construct the asset to reach the predicted
use state.
The Group adopts the cost method to conduct follow-up measurement on investment
real estates are accounted devaluations and amortized. The expected service life, net
residual rate and value depreciation rates of investment real estate are as follows:
Type Evpected useful Estinated Annual depreciation rate（%）
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life（Year） residual value
rate
Real estate in 20-50 years
Hongkong 0% 2%-5%
Real estate in 20-30 years
China 10% 3%-4.5%
If the investment real estate is changed to self use, since the date of change,
investment real estate shall be converted into fixed assets or intangible assets. The
function of self-use real estate is to earn rent or capital appreciation, then since the date
of change, the fixed assets or intangible assets shall be converted into investment real
estate. When the conversion happens, the book value before the conversion will be the
book value after the conversion.
When the real estate investment is disposed or will never be used, and economic
interests can not be obtained from the disposal, the confirmation of the investment real
estate shall be terminated. The amount of the income from the sale, transfer, disposal of
the investment in real estate deducting the book value and related taxes and fees shall be
included in the current loss and gain.
Using the fair value model for subsequent measurement, should disclose the accounting policy
adopted pursuant to, including the identification of investment real estate market real estate locations
have active basis; Companies able to make the same or similar from the real estate market real estate
market prices and other relevant information, so as to estimate the fair value of investment property
basis; Indication of when to estimate the fair value of investment property key assumptions and main
determining factors involved.
11. Fixed assets
Fixed assets refer to the tangible assets which have the following characteristics at
the same time, namely, held for production of goods, providing services, leasing or
operation and management, and the life span shall not be more than a year, and the unit
value is high.
Classification of fixed assets: houses and buildings, machinery and equipments,
transportation equipments, office equipments and others.
The fixed assets shall be measured according to the actual cost to obtain them, including,
the cost of purchasing the fixed assets including the purchase price, value-added tax,
import tariffs and other related taxes, and other expenses happened to reach the
predicted use state; the cost of building the fixed assets, which are composed of the
expenses to reach the predicted use state of the assets; the fixed assets invested by
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investors, the value on the contract or agreement shall be the accounting value, but if the
contract or agreement value is not fair, the fair value shall be accounted; the fixed leased
assets, the lower amount of the fair value of leased assets and the present value of the
lowest lease payment shall be as the accounting value.
Follow-up expenditures on fixed assets, including major repair expenses, expenses on updated
improvement and other, To confirm compliance with the conditions of fixed assets, it shall be
included in the cost fixed assets, the recognition of book value of replaced the part shall be
terminated; If not meeting the conditions of confirming fixed assets, they should be
included in the current period.
In addition to the fixed assets which depreciation and impairment had already fully
accounted and the lands which are separately accounted, the Group accounts
depreciation on all fixed assets. The method of average number of years will be used
when accounting depreciation which will be included in the costs and expenses of the
relevant assets. The predicted net residual rate, classified depreciation years and
depreciation rates are as follows:
Type Evpected useful Estinated residual Annual depreciatio
No life（Year） value rate n rate（%）
Real estate in Hong 20-50 years
1 Kong 0% 2%-5%
Real estate in 20-30 years
2 China 10% 3%-4.5%
Machinery and 5-14 years
3 equipment 10% 6%-18%
Transportation 4-5 years
4 Equipment 10% 18%-22.5%
Office equipment and 5 years
5 other 10% 18%
At the end of each year, the Group shall recheck the predicted service life of fixed
assets, the predicted net residual value and depreciation method, if changes happen, then
it shall be treated as accounting estimate.
When the fixed assets were disposed, or expected to be used or the disposal can not
have economic interests, the confirmation of the fixed assets shall be terminated. The
income from the sale, transfer or damage of the fixed assets deducting the book value
and related taxes shall be included in the current loss and gain.
12. Construction in progress
The price of the construction project: determine the costs according to the actual
expenditure on the project. Measure the price of the self-operated projects according to
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the direct materials, direct wages, direct construction costs; Measure the turnkey
projects according to the price should be paid on the project; measure the project of
equipment installation according to the value, of the equipment, installation costs, and
the expenditures on the trial operation to determine the project costs. The costs of
projects under construction also include the cost of borrowing to be capitalized and
exchange gain and loss.
The time for the construction project converted to the fixed assets: the fixed assets of the company
reached the predicted state, according to the budget of the project, construction cost or the actual cost
of the project, transfer the fixed assets according to the predicted price, account the depreciation
from the next month on. Upon finishing the procedures, make relevant adjustment.
13.Borrowing costs
Borrowing costs include interest on borrowings, amortization of discount or premium,
as well as the supporting costs and exchange difference due to foreign currency
borrowing. The borrowing costs which can be directly attributed to capitalized condition,
and taken place in the capital expenditure, borrowing costs have taken place, in order to
meet the assets available for sale or purchase of the necessary state of construction or
production activities, the capitalization begins; when the construction or purchase of the
conditions of production in line with the capital assets reached the sale state, the
capitalization should stop. And the rest borrowing costs should be recognized as
expenses in the current period.
The expenses on interests for the specialized loan happened in current period deducting
the interest income from the bank or the investment income from temporary investment
should be capitalized; the general assets of the borrower in accordance with the
cumulative excess of expenditure over the assets of the specialized part of the borrower
multiplied by the weighted average expenditure occupied by the weighted average
borrowings to determine the amount of capitalization, until the restart of construction or
purchase of assets. The capitalization rate shall be calculated and determined in the light of the
general borrowing and weighted average interest rate.
The assets which meet capitalization conditions, refer to the fixed assets,
investment real estates and other inventories which are constructed for a long time
(usually more than one year) to achieve the intended use or sale of state to.
If meet the capitalization conditions or non-normal breaks occurred in the course of
production and the break time is more than three months, then the capitalization of
borrowing costs shall be suspended; when the acquisition or construction or production
meet the conditions of capitalization and achieve the predicted use or sale state, Asset
acquisition or production activities began.
14. Intangible assets
The intangible assets of the Group include land use rights and computer software.
Including: For the intangible assets purchased, the actual purchase price was the actual
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cost; For the intangible assets invested by investors, The actual cost of intangible assets
invested by investors, shall be determined according to the contract or agreement value,
but if the contract or agreement values are not fair, the actual costs shall be determined
according to the fair value.
Since the date of selling land use rights, they are amortized according to the years
sold; patent technology, non-patent technology and other intangible assets are amortized
in accordance with the expected number of years, the benefited years specified in the
contract and the effective length according to law. The amount to be amortized will be
included in the related asset costs and current loss and gain according to the benefited
targets.
The predicted service life of the intangible assets and amortization methods should
be rechecked and adjusted at the end of each year. Recheck the intangible assets with
uncertain service life in each accounting period should be rechecked, if there is evidence
showing that the service life of the intangible asset is limited, then estimate its service
life and amortized it within the predicted service life.
15. Impairment in non-financial assets
The Group conducts inspection on long-term equity investments, fixed assets,
construction in progress, intangible assets with limited service life on every balance
sheet date. when exist the following signs showing that the assets may have impairment,
the Group will conduct impairment test. The intangible assets without certain service
life, whether it has impairment signs, impairment tests shall be conducted at the end of
each year. If the recoverable amount of single asset can not be tested, it shall be tested
on the basis of the asset group the asset belong to or the asset combination.
After the impairment test, if the book value of the asset exceeds its recoverable amount,
the deficiency is recognized as the impairment loss, upon the confirmation of the above
assets, they will not be transferred back in the following accounting period. The
recoverable amount of the asset refer to the net amount of the fair value of the asset
deducting disposal cost of assets and the present value of the expected future cash
flows.
The signs of impairment as follows:
(1). Current market value of assets decreased significantly, the decline is significantly
higher than the decline due to time passage or normal use.
(2) The economic, technical or legal environment of the company and the market of the
assets will have significant change in the current period or in the near future, therefore
negative impact on the enterprise.
(3) Market interest rates or other market return rate of investment in the current period
have been increased, thus affecting the discount rate of the predicted cash flow, and
resulting in the significant reduction in the amount of recoverable assets.
(4) There is evidence showing that the assets were actually obsolete or damaged.
(5) The assets have been or will be idle, ended the use or disposed in advance.
(6)There are evidences of internal report showing that the economic performance of the
assets has been lower than or less than what expected, such as the net cash flow created
by assets or the operating profits (or losses) realized are far below (or above)the
expected amount.
(7) Other signs showing the assets may have or have had impairment.
16.Goodwill
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Goodwill refers to the difference of equity investment under the control of the same cost
or merger of enterprises should enjoy more than the cost or a merger of the investment
was the purchase of flats or net assets in order to obtain.
The goodwill related to subsidiaries shall be individually listed in the consolidated
financial statements, the goodwill related to joint companies and associated companies
shall be included in the book value of long-term equity investments.
17.Long-term amortized expenses
The long-term expenses of the Group to be amortized refer to all the expenses already
paid but should be undertaken in the current period or in the coming period with
amortization period more than 1 year (not including 1 year), the expenses will be
amortized averagely in the benefit period. If the long-term prepaid expenses can not
benefit from subsequent accounting period, then all amortization value of the project not
amortized should be transferred to the current loss and gain.
18. Employee‘s salary
During the accounting period, workers‘ salary shall be recognized as liability, and
be included in relevant cost and expenses according to the beneficiary target of the
service provided by workers, and shall be included in the relevant cost and expenses.
The compensations for the cancelation of workers‘ labor relationship shall be included
in the current loss and gain.
Including wages, bonuses, allowances and subsidies, welfares, social insurance and
housing accumulation fund, union fee and workers‘ education fund, and other related
expenses related to obtain services provided by employees.
If decide to relieve the labor relationships with employee before the employment
contracts become mature, or encourage workers to voluntarily accept the compensation
proposal due to redundancy, while the Group has have a formal plan for termination of
labor relationship or have proposed the voluntary redundancy scheme which will be
implemented, and the Group is unable to unilaterally withdraw the plan on the
cancellation of labor relationship or the layoff proposal, the anticipated debts, confirmed
to be caused by the compensation due to relieve of labor relationships with workers,
shall be recorded into the profits and losses of the current period.
19. Predicted liabilities
When the external security, commercial acceptance bill discount, pending
litigation or arbitration, product quality assurance or business related matters subject to
the following conditions at the same time, the Group will identify it as liabilities: the
obligation is a present obligation of the Group; the enforcement of the obligation is
likely to lead to the outflow of economic benefits; the amount of the obligation can be
measured reliably.
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Predicted liabilities shall be conducted initial measurement according to the best estimates of
related existing liabilities, and comprehensively consider risks, uncertainties and the time value of
money and other factors relating to contingent events. Time value of money has the greatest
influence, the best estimates shall be determined by future cash outflow. On the balance sheet,
recheck the book value of predicted liabilities, adjust the book value to reflect the current best
estimates if there are any changes.
20. Principle for confirmation of income
The Group's revenues mainly include: incomes from sales of goods and transferring
assets use right. The principle of income confirmation is as follows:
When the Group had transferred the ownership of the risks and rewards of the
commodities to the buyer, the Group does not keep the management right relating to
ownership and does not implement effective control on the commodities sold out, the
income amount can be reliably measured, and the related economic benefit will possibly
flow into the enterprise, and when the related costs may happen or had happened can be
measured reliably, the realization of the commodity sold out should be confirmed.
The economic interests relating to transaction can flow into the company, and the
relevant incomes and costs can be reliably measured, the sales income of transferring
assets use right shall be confirmed.
21. Government subsidies
Government subsidies, when the Group can meet the conditions attached and can
receive, shall be confirmed. If government subsidies are monetary assets, they shall be
measured according to the amount received; the subsidies allocated according to rated
standards, they shall be measured according to the amount receivable. If government
subsidies are non-monetary assets, they shall be measured according to fair value; if the
fair value can not be reliably measured, they shall be measured according to nominal
amount (1 yuan).
The government subsidies relating to assets shall be recognized as deferred income, and
be averagely distributed within the service life of relevant assets, and be included in
the current loss and gain. If the government subsidies relating to income are used to
compensate the related expenses and losses, they shall be confirmed as deferred income
and be included in the current loss and gain in the period of confirming relevant
expenses. If used to compensate the relevant expenses and losses happened, they shall
be included in the current loss and gain.
22. Deferred income tax assets and deferred income tax liabilities
Deferred income tax assets and deferred income tax liabilities shall be confirmed
according to the difference between the tax base of assets and liabilities and their book
value (temporary differences). The loss and tax which can be offset in the future years
74/133
shall be recognized as temporary differences to determine the corresponding deferred
income tax assets. On the balance sheet date, deferred income tax assets and deferred
income tax liabilities shall be measured by the predicted application rate.
The Group shall determine the deferred income tax assets produced by the deductible
temporary differences within the amount limit of payable taxes which are likely used to
deduct the temporary differences. The book value of the recognized deferred income tax
assets shall be deducted when the deferred income tax assets produced by the deductible
temporary differences within the amount limit of payable taxes which are likely used to
deduct the temporary differences. When enough payable tax can be obtained, the
deducted amount shall be transferred back.
23. Lease
At the beginning date of lease, the Group divided leasing into financing lease
and operating lease.
Financing lease essentially refers to the lease that transferred all the risks and rewards relating
to asset ownership. As the lessee, on the beginning date of lease, the Group took lower one in the
cash of the fair value and the lowest lease payment as the book-keeping value of the fixed assets
leased in by financing, and the lowest lease payment as the accounting value of the long-term
payment, and the difference between the them will be recorded as financing costs not confirmed.
Operating lease refers to the other lease apart from financing lease. As the lessee,
during the lease period, the Group included the related asset cost and current losses and
gains by the straight-line method during the lease period. The rent of the Group will be
confirmed as income during the lease period by the straight-line method.
24.Accounting of income tax
The accounting of income tax of the Group shall use the method of debt of balance
sheet. The income tax expenses include current income tax and deferred income tax.
The current income tax and deferred income tax relating to the transactions and events
directly included in shareholders equity shall be included in shareholders equity, except
the book value of deferred income tax adjustment goodwill, the rest current income tax
and deferred income tax or income shall be included in the current loss and gain.
Current income tax cost refers to the amount of payable income tax which shall be paid
to tax department according to the current transactions and events determined according
to tax provisions; deferred income tax refers to difference between deferred income tax
balance sheet debt in accordance with the law shall be recognized deferred income tax
assets and deferred income tax liabilities in the amount originally confirmed.
25. Corporate consolidation
Corporate consolidation refers to two or more separate companies merge and form a transaction
or event of report subject. The consolidation day or purchase day or the consolidation date of
obtaining the assets or liabilities, shall be confirmed as the date of obtaining the control right of the
party being merged or purchased.
The corporate consolidation under same control: the assets and liabilities obtained
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by the consolidation party in the merger shall be measured according to the book
value of merged party on the consolidation day. The difference between the book
value of net assets obtained by the consolidation party and the book value of the
consolidation price paid, the capital public reserve shall be adjusted; if the capital
public reserve is not enough to be deducted, the retained earnings shall be adjusted.
The corporate consolidation under different control: the consolidation cost is the fair
value of equity stocks issued and the assets and debts paid to obtain the control right of
the purchased party on the purchase day. The difference between the consolidation cost
and fair value of recognizable net asset, shall be confirmed as goodwill; if the
consolidation cost is smaller than the fair value of recognizable net asset of the
purchased party, the difference shall be included in current loss and gain upon
confirmation.
26.Methods for compilation of consolidated financial statements
(1). Principles to determine the scope of merger:
The Group will include the subsidiaries which have actual controlling right and the
subjects which have special purpose into the scope of consolidated financial statements.
（1） Accounting methods adopted in consolidated financial statements:
The consolidated financial statements of the Group shall be compiled in accordance
with Enterprise Accounting Standards No. 33 - Consolidated Financial Statements and
the related provisions, the major internal transaction in the scope of consolidation and
transactions shall be offset. The part of shareholders equity of the subsidiary which does
not belong to the parent company, shall be individually listed as equity of minority
shareholders in the consolidated financial statement. If the accounting policy and
accounting period of the subsidiary and the company are not consistent, when compile
consolidated financial statement, the financial statement of the subsidiary shall be
adjusted according to the accounting policy and accounting period of the company.
For the subsidiary obtained by corporate merger under different control, when prepare
consolidated financial statements, the individual financial statement shall be adjusted on the basis of
fair value of the net assets on the purchase day; for the subsidiary obtained by corporate merger
under same control, it will be taken as having been existed at the year beginning, its assets, liabilities,
operating results and cash flow shall be consolidated in the financial statement according to original
book value since the year beginning of the consolidation period.
V. Changes in accounting policies and estimates
1.Changes in accounting policies and estimates
According to the provisions of ―Accounting Standards Interpretation for Enterprises No.
4‖ (Finance [2010] 15) that ―in the consolidated financial statements, if the current
losses burdened by the minority shareholders of subsidiary company exceed the portion
shared in the owner‘s equity by the minority shareholders at the beginning of the
subsidiary, the balance shall reduce the equity of minority shareholders. Which will be
traced to adjust except the impracticable if the minority shareholders haven‘t disposed
as per above provision before the interpretation is released.‖ in 2010, the Group changes
76/133
the excess deficit of minority shareholder of the subsidiary burdened by parent company
into that burdened by the minority shareholder of the subsidiary. But the subsidiary
company – South China Company whose minority shareholders has declared bankrupt
in 2000 and have compulsory liquidation which can‘t be taken back, so the minority
shareholders of South China Company no longer bear the losses.
2. Changes and impact of the accounting estimation
The Group has no changes in accounting estimation this year.
3..Correction of accounting errors from previous term
There is no correction of the accourting error from previous term in the report period.
VI.Taxation
Type Tax basis Tax rate
Business tax Business income 5%
City construction tax and education additional expenses Turnover tax 7%
Education additional tax Turnover tax 3%
Local surcharge for Education Turnover tax 2%
Enterprise income tax Taxable income 24%
1. Enterprise income tax
The interest rate of corporate income tax of the company and subsidiaries in China
mainland is 25%, according to the State Council on December 26, 2007, of the [2007]
No. 39 Notice on the Implementation of Enterprise Income Tax Preferential Policies for
the Transition, the enterprise income tax rate of the Company and the subsidiaries in
China mainland gradually transited from 15% to 25%, the company implement the
transition rate of 22% in 2010. the interest rate of the income from Hong Kong of the
subsidiaries in Hong Kong is 16.5%.
2.VAT
The sales interest rate of processing income and sale income of printing products
of subsidiaries in China mainland and the company is 17%, export products will be
adopted the method of "free, credit and rebate", the tax rebate rate is 16% (2010). The
purchase of raw materials such as VAT input tax paid by the amount of output tax can
be offset, the tax rate is 17%. Of which: the input tax of VAT for export products can
pply for payment of rebate. VAT taxable amount is the balance of the current output tax
offseting the current input tax.
The subsidiaries of the Company in Hong Kong do not need to pay VAT.
3. Business tax
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The housing rental income of the company and Nanhua Printing & Dyeing
Company shall be applied to business tax, applicable rate 5%. The subsidiaries of the
Company in Hong Kong do not need to pay business tax.
4. City construction tax and education additional expenses
City construction tax of the Company is based on the value-added tax, business tax,
applicable interest rate 7% and 3% ,according to the taxpayer‘s actual payment of
VAT,the Education Supplementary Tax will be begin to be paid since January 1, 2011.
applicable interest rate 2%.
The subsidiaries of the company in Hong Kong do not need to pay City
construction tax and education additional expenses.
5. Property tax
70% of the original value of property of the subsidiaries of the Company in China
mainland shall be the tax basis, applicable tax rate 1.2% ,Rental property to real estate
tax based on rental income,applicable tax rate 12%, subsidiaries in Hong Kong do not
pay property taxes.
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深圳中冠纺织印染股份有限公司财务报表附注
2011 年 1 月 1 日至 2011 年 12 月 31 日
（本财务报表附注除特别注明外，均以人民币元列示）
VII.Corporation Consolidation and Consolidation Financial statement
（1）Subsidiaries
Proportion% Whether
Registration Registered Vote right the
Name Quality Business scope Investment amount Notes
plance capital Direct Indirect Proportion% merger of
statement
Hong Kong Purchase of raw materials,
2,400,002 marketing of printed and dyed 2,400,002 1
Victor Onward HongKong Trade
woven fabrics, investment and
100% 100% Yes
（HKD） （HKD）
Co. holding business
Shenzhong 1,000,000 Sales of Corduroy, dyed cloth 1,000,000
Hongkong Trade and printed cloth 100% 100% Yes 2
Company （HKD） （HKD）
Nanhua 85,494,700 Production and sales of printed cloth HKD 16,874,255
Shenzhen Production and dyed cloth 54.82% 14.62% 69.44% Yes 3
Company （HKD） +RMB 4,240,100
Xinye Hongkong Trade 10,000 Sales of printed cloth and dyed cloth 10,000
Company 100% 100% Yes 4
（HKD） （HKD）
Textilet,Printing and dyeing
industry and Raw
Shenzhen East
3,000,000 1,530,000
Asia Co. Shenzhen Trade materials ,Machinery
51% 51% Yes 5
(RMB) equipment and other (RMB)
fabrics
79/133
深圳中冠纺织印染股份有限公司财务报表附注
2011 年 1 月 1 日至 2011 年 12 月 31 日
（本财务报表附注除特别注明外，均以人民币元列示）
1.The Company invested HKD 2,400,002 in 1984 to establish Hong Kong Victor Onward
Company in Hong Kong.
2. Shengzhong Company was established in November 9 1993, registered capital 1 million Hong Kong dollars,
Hong Kong Victor Onward holding 100% equity.
3. Nanhuan Company was established in July 21, 1988, registered capital 85.49 million Hong Kong dollars, by
December 31, 2011 the shareholding structure as follows:
Year-beginning
Name of investor Proportion% Year-end amount Proportion
amount
Shenye Union (Hongkong)Co.,
Ltd. 26,127,180.32 30.56% 26,127,180.32 30.56%
The Company * 46,868,194.54 54.82% 46,868,194.54 54.82%
Hong Kong Victor Onward
Company 12,499,325.14 14.62% 12,499,325.14 14.62%
Total 85,494,700.00 100.00% 85,494,700.00 100.00%
4. Xingye Company invested HKD10,000 to establish Industry Company in Hong Kong in
December 1996. Nanhua Company Holding‘s 100% of the equity.
5. Shenzhen East Asia Company was established in February 28, 2007, registered capital 3 million yuan, the
company invested 1.53 million yuan, holding 51% equity, Nanjing East Asia Textile Co., Ltd. invested 1.47
million yuan, holding 49% equity.
(2)The changes of consolidated scope
No changes of consolidated scope happened during the current period.
(3) Foreign currency translation
Except that Shenzhen East Asia Company Company has RMB as basic accounting currency, the
company and other subsidiaries have Hong Kong dollars as basic accounting currency. The
financial statements are reflected after conversion of RMB and the foreign currency conversion
methods were described in Note IV, 5, of which the spot exchange rate of HK dollar to RMB was
0.8509 at year beginning, and the spot exchange rate at year end was 0.8107 the approximate
exchange rate of the spot exchange rate uses the current average exchange rate 0.8308.
VIII. Notes to the main items of consolidated financial statements and the Company's financial
statements
The following financial statements disclosed below, except where indicated otherwise, "year
beginning" means January 1, 2011, "year end" means December 31, 2011, "this year" means
from January 1, 2011 to December 31, "last year" means from January 1, 2010 to December 31,
the currency unit RMB.
1. Monetary Capital
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深圳中冠纺织印染股份有限公司财务报表附注
2011 年 1 月 1 日至 2011 年 12 月 31 日
（本财务报表附注除特别注明外，均以人民币元列示）
Year-end balance Year-beginning balance
Items Original Exchange RMB Original Exchange RMB
currency rate equivalent currency rate equivalent
Stock cash 13,567 91,999
RMB 10,547 1.0000 10,547 81,570 1.0000 81,570
HKD 3,725 0.8107 3,020 12,256 0.8509 10,429
Bank deposit 52,631,239 46,026,397
RMB 27,166,560 1.0000 27,166,560 20,478,001 1.0000 20,478,001
HKD 30,084,085 0.8107 24,389,168 28,692,137 0.8509 24,414,139
USD 170,692 6.3009 1,075,511 171,268 6.6227 1,134,257
Other
monetary
capital 754,510 5,668,217
RMB 754,510 1.0000 754,510 5,668,217 1.0000 5,668,217
HKD 53,399,316 51,786,613
Total
Funds in other currencies (RMB) mainly kept in the securities of the Group companies for the
purchase of new shares issued by drawing lots of money does not exist at the end of restrictions on the use
of monetary funds.
2.Financial assets for transection
（1） Financial assets for transection
Item Year-end balance Year-beginning balance
Equity tool investment for 68,900 77,235
transaction.
Total 68,900 77,235
Transactional equity tools are the shares which are to be cashed at any time purchased by the
subsidiary of the company, priced by fair value, its cash has no major restrictions.
3.Account receivable
(1)Categories of account receivable
Year-end balance Year-beginning balance
Type Book Balance Provision for bad debts Book Balance Provision for bad debts
Amount Proportion% Amount Proportion% Amount Proportion% Amount Proportion%
Account 3,714,877 29.47 2,970,165 79.95 5,334,174 36.47 4,747,598 89.00
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深圳中冠纺织印染股份有限公司财务报表附注
2011 年 1 月 1 日至 2011 年 12 月 31 日
（本财务报表附注除特别注明外，均以人民币元列示）
Year-end balance Year-beginning balance
Type Book Balance Provision for bad debts Book Balance Provision for bad debts
Amount Proportion% Amount Proportion% Amount Proportion% Amount Proportion%
receivable
with
significant
specific
amount
that were
provisioned
had debt
preparation
separately
Aging
group
account
receivable
that were
not
significant
but have 8,892,549 70.53 8,892,549 100.00 9,293,828 63.53 9,293,828 100.00
been
provisioned
bad debt
preparation
separately
Total 12,607,426 100.00 11,862,714 94.09 14,628,002 100.00 14,041,426 86.86
1） Account receivable with significant specific amount that were provisioned had debt preparation
separately
Provision Reason of
Name Book balance Bad debts
proportion% provision
Victor Onward Textile Aging long
1,606,281 861,569 53.64
(HK)Co., Ltd.
Carnival Index Aging long
1,098,549 1,098,549 100.00
International Ltd
TAI YANG ENTERPRISE
CO.,LTD
1,010,047 1,010,047 100.00 Aging long
Total 3,714,877 2,970,165 79.95
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深圳中冠纺织印染股份有限公司财务报表附注
2011 年 1 月 1 日至 2011 年 12 月 31 日
（本财务报表附注除特别注明外，均以人民币元列示）
2） As of December 31, 2011, account receivable that were not significant but
have been provisioned bad debt preparation separately
Book Provision Reason of
Name Bad debts
balance proportion% provision
Aging
770,071 770,071 100.00
VEGA GARMENT CO.,LTD long
Quanzhou Wishful bird Garment Co., Aging
80,518 80,518 100.00
Ltd long
Aging
45,761 45,761 100.00
Tangshan Lifeng Garments Co., Ltd long
Aging
573,536 573,536 100.00
Fly Dragon International long
Aging
566,661 566,661 100.00
Grateful Textiles Co.,Ltd long
Aging
465,126 465,126 100.00
World Fabrica (Int'l) Ltd long
Aging
446,352 446,352 100.00
Shenzhen Fangzhou Textile Co., Ltd. long
Aging
351,500 351,500 100.00
Ezhou Xiangya Garments Co., Ltd. long
Aging
333,502 333,502 100.00
Tak Shing Buying Office Led long
Aging
332,234 332,234 100.00
Starline Textile CO.Ltd. long
Aging
299,354 299,354 100.00
Shenye Union （HK）Co., Ltd long
Aging
295,088 295,088 100.00
Panther Fabric Ltd. long
Changshu Zhongjiang Clothing Import Aging
270,134 270,134 100.00
and export Co., Ltd long
Aging
245,560 245,560 100.00
Victor Onward Textile (HK)Co., Ltd. long
Aging
215,229 215,229 100.00
Nissho Iwai HK Corp Ltd. long
Aging
192,891 192,891 100.00
Unimix Ltd. long
Aging
191,295 191,295 100.00
Tai Hing Linings Co Ltd long
Aging
185,981 185,981 100.00
Human Changpuan Garment long
Ningbo Youngor Fukumura Aging
172,910 172,910 100.00
UniformsCo., Ltd. long
Aging
146,600 146,600 100.00
Win favour development ltd long
Aging
146,502 146,502 100.00
Speedy Textiles Co long
Aging
135,686 135,686 100.00
Lin Feng Textile Co. long
Aging
131,954 131,954 100.00
Jicheng Cotton industry Co., Ltd. long
Millionaire(HK)Weaving Ltd. 124,249 124,249 100.00 Aging
4/133
深圳中冠纺织印染股份有限公司财务报表附注
2011 年 1 月 1 日至 2011 年 12 月 31 日
（本财务报表附注除特别注明外，均以人民币元列示）
Book Provision Reason of
Name Bad debts
balance proportion% provision
long
Aging
121,930 121,930 100.00
Leader Day Ltd. long
Aging
110,024 110,024 100.00
Tex Mate Fabrics (HK) long
Aging
109,178 109,178 100.00
New Design Textiles Ltd. long
Aging
102,606 102,606 100.00
Deep Success Industrial Ltd long
Aging
101,030 101,030 100.00
Wynvaye Industrial Co long
Aging
89,613 89,613 100.00
ACTSUNLTD. long
Aging
77,828 77,828 100.00
Tamurakoma Co Ltd. long
Aging
65,461 65,461 100.00
International Textiles Co long
Shenzhen Hongtian Cloth Trade Co., Aging
59,380 59,380 100.00
Ltd. long
Aging
54,607 54,607 100.00
Ho Cheong Textiles Ltd long
Aging
54,156 54,156 100.00
Origin Textiles Co Ltd. long
Aging
50,389 50,389 100.00
Wing Fook Piecegoods Co.,Ltd long
Aging
49,905 49,905 100.00
Wing Shum Piecesgoods Co Ltd. long
Aging
47,588 47,588 100.00
Gold Eagle Textiles Limited long
Aging
43,852 43,852 100.00
Charman Trading Co long
Aging
43,847 43,847 100.00
AtexTradingCo long
Aging
992,461 992,461 100.00
Other long
Total 8,892,549 8,892,549 100.00
(3)Of the account receivables at the end of period, there were none owed by corporate shareholders of the
Company holding over 5% (including 5%) of its total shares with voting rights.
(4)The front 5 units‘ information of account receivable
Unit name Relation with the Amount Percentage of
Age account
receivable(%)
company
Victor Onward Textile Non-Related
parties
1,606,281 2-3 years 12.74
(HK)Co., Ltd.
Carnival Index International Non-Related Over 3
parties 1,098,549 years
8.71
Ltd
5/133
深圳中冠纺织印染股份有限公司财务报表附注
2011 年 1 月 1 日至 2011 年 12 月 31 日
（本财务报表附注除特别注明外，均以人民币元列示）
Unit name Relation with the Amount Percentage of
Age account
receivable(%)
company
TAI YANG ENTERPRISE Non-Related Over 3
1,010,047 years
8.01
CO.,LTD. parties
Non-Related Over 3
770,071 6.11
VEGA GARMENT CO.,LTD parties years
Non-Related Over 3
573,536 4.55
Fly Dragon International parties years
Total 5,058,484 40.12
(5)About the account receivable from the related parties
Relation with this
Name Amount Proportion(%)
company
The related parties
controlled the same
Shenye Union（HK）Co., Ltd. Actual controller 299,354 2.37
(6)Accounts receivable include the following foreign currency balances
Foreign Year-end balance Year-beginning balance
currency Original Exchange RMB Original Exchange RMB
Name currency rate equivalent currency rate equivalent
HKD 11,586,257 0.8107 9,392,979 11,038,875 0.8509 9,392,979
USD 405,753 6.3009 2,556,610 405,753 6.6227 2,687,180
Total 11,949,589 12,080,159
4. Prepayments
（1） Aging
Year-end balance Year-beginning balance
Items Amount Proportion Amount Proportion
（%） （%）
Within 1 year 27,089 98.33 22,832 98.31
1－2 years 459 1.67 393 1.69
Total 27,548 100.00 23,225 100.00
（2） Prepayments main unit
Relation with
Company Name Amount Age Causes
the Company
Non-Related Within 1 Payments for goods
Insurance premium parties 19,251 year not paid
6/133
深圳中冠纺织印染股份有限公司财务报表附注
2011 年 1 月 1 日至 2011 年 12 月 31 日
（本财务报表附注除特别注明外，均以人民币元列示）
Relation with
Company Name Amount Age Causes
the Company
Business Register Non-Related Payments for goods
fees parties 3,707 1-2 years not paid
Non-Related Payments for goods
Vehicle license fees parties 2,884 Over 1 year not paid
Total 25,842
(3) Of the Prepayment at the end of period, there were none owed by corporate shareholders of
the Company holding over 5% (including 5%) of its total shares with voting rights.
(4)Prepayments include the following foreign currency balances
Foreign Year-end balance Year-beginning balance
Currency of Original Exchange RMB Original Exchange RMB
Name currency rate equivalent currency rate equivalent
HKD 33,980 0.8107 27,548 27,295 0.8509 23,225
Total 27,548 23,225
(5)Interest receivable
Items Year-beginning Increase in Decrease in Exchange Year-end
balance the current the current rate balance
period period Differences
Interest on Fixed 6,646
32,046 -314 38,378
deposits
Total 6,646 32,046 -314 38,378
The interests receivable was the ones for the subsidiary of the company Hong Kong Victor Onward
Bank‘s deposits, with principal about 20 million Hong Kong dollars.
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深圳中冠纺织印染股份有限公司财务报表附注
2011 年 1 月 1 日至 2011 年 12 月 31 日
（本财务报表附注除特别注明外，均以人民币元列示）
5. (6)Other receivables
（1） Categories of other receivable
Year-end balance Year-beginning balance
Type Book Balance Provision for bad debts Book Balance Provision for bad debts
Amount Proportion% Amount Proportion% Amount Proportion% Amount Proportion%
Other
receivable
with
significant
specific
amount 3,368,370 69.76 3,368,370 100.00 3,376,237 73.57 3,376,237 100.00
that were
provisioned
bed debt
preparation
separately
Other
accounts
that were
provisioned
bad debt
preparation
1/133
深圳中冠纺织印染股份有限公司财务报表附注
2011 年 1 月 1 日至 2011 年 12 月 31 日
（本财务报表附注除特别注明外，均以人民币元列示）
Year-end balance Year-beginning balance
Type Book Balance Provision for bad debts Book Balance Provision for bad debts
Amount Proportion% Amount Proportion% Amount Proportion% Amount Proportion%
in
accordance
with agin
Group
Deposit
457,264 9.47 175,951 3.83
Group
Other
receivable
that were
not
significant
but have 1,002,594 20.77 1,002,594 100.00 1,036,996 22.60 1,036,996 100.00
been
provisioned
had debt
preparation
separately
Total 4,828,228 100.00 4,370,964 90.53 4,589,184 100.00 4,413,233 96.17
2/133
深圳中冠纺织印染股份有限公司财务报表附注
2011 年 1 月 1 日至 2011 年 12 月 31 日
（本财务报表附注除特别注明外，均以人民币元列示）
1） Other ts receivable with significant specific amount that were provisioned had debt preparation
separately
Provision Reason of
Name Book balance Bad debts
proportion% provision
Nanjing East Asia 1,313,370 1,313,370 100.00 Aging long
CCB.Guangdong Aging long
1,080,000 1,080,000 100.00
Shunde Branch
Changzhou Dongfeng Aging long
Textile Printing & dyeing 975,000 975,000 100.00
Equipment Co., Ltd.
Total 3,368,370 3,368,370 100.00
2） Group-Deposit Group
Book Provision Reason of
Name Bad debts
balance proportion% provision
Huachuang Room 1802 38,139 - -
Huachuang180508 36,644 - -
RECOVERABLECLIENT:A/R 31,718 - -
11,547 Deposit,
CVA
Shenzhen Zhengju Technology No provis
175,560
Co., Ltd. ion for b
Withholding telephonecharges 53,741
ad debts
Tang Hongzai 20,000 - -
Other 89,915 - -
Total 457,264 - -
3） As of December 31, 2011, account receivable that were not significant but have been
provisioned bad debt preparation separately
Book Provision Reason of
Name Bad debts
balance proportion% provision
HongKong Victor Onward 693,951 693,951 100.00 Aging long
Shanghai Huayinke Industry 100.00
180,000 180,000 Aging long
Co., Ltd.
Shenzhen Environmental 100.00
Management System 35,000 35,000 Aging long
Certification Center
Shenzhen Design Institute of 100.00
Ministry of Machinery Industry 30,000 30,000 Aging long
Shanghai Branch
Other 63,643 63,643 100.00 Aging long
Total 1,002,594 1,002,594 100.00 Aging long
1/133
深圳中冠纺织印染股份有限公司财务报表附注
2011 年 1 月 1 日至 2011 年 12 月 31 日
（本财务报表附注除特别注明外，均以人民币元列示）
(2)Of the Other account receivable at the end of period, there were none owed by corporate
shareholders of the Company holding over 5% (including 5%) of its total shares with voting
rights.
(3)The front 5 units‘ information of Other account receivable
Relation with Account Proportion(%)
Name Amount Content
the company Age
Nanjing East Asia Non-Related Over 3
1,313,370 27.20 Goods
C parties years
CCB.Guangdong Non-Related Over 3
1,080,000 22.37 Goods
Shunde Branch parties years
Changzhou
Dongfeng
Textile Printing Non-Related Over 3
975,000 20.19 Goods
& dyeing parties years
Equipment Co.,
Ltd.
Non-Related Over 3
HongKong Victor 693,951 14.37 Goods
Onward
parties years
Shanghai
Huayinke Non-Related Over 3
180,000 3.73 Goods
Industry Co., parties years
Ltd.
Total 4,242,321 87.86
(4)Other receivable include the following foreign currency balances
Foreign Year-end balance Year-beginning balance
Currency of Original Exchange RMB Original Exchange RMB
Name currency rate equivalent currency rate equivalent
HKD 1,215,331 0.8107 985,269 1,219,263 0.8509 1,037,471
Total 985,269 1,037,471
7.Inventory
（1）Inventory types
Year-end balance Year-beginning balance
Book Provision for Book value Book Provision Book
Items
balance bad debts balance for bad value
debts
2/133
深圳中冠纺织印染股份有限公司财务报表附注
2011 年 1 月 1 日至 2011 年 12 月 31 日
（本财务报表附注除特别注明外，均以人民币元列示）
Year-end balance Year-beginning balance
Book Provision for Book value Book Provision Book
Items
balance bad debts balance for bad value
debts
Raw
1,868,259 162,457
materials 2,030,716 2,131,413 1,701,800 429,613
Stock
635,916 635,916
goods 644,622 644,622
Total 2,666,632 2,504,175 162,457 2,776,035 2,346,422 429,613
The Company has been out of production, the closing inventories shall be written down after deducting the full
amount provisions except the preservation materials.
(2)Provision for impairment of inventories
Decrease in the current
Increase in Exchange
Year-beginning period Year-end
Items the current rate
balance Transferred balance
period Reselling changes
back
Raw
materials 1,701,800 252,979 -86,520 1,868,259
Stock
goods 644,622 -8,706 635,916
Total 2,346,422 252,979 -95,226 2,504,175
8.Financial assets for sale
1. Financial assets for sale
Items Year-beginning balance (Fair Year-end balance (Fair value )
value )
Equity tools for sale. 703,055 874,427
Total 703,055 874,427
The equity tools for sale are the shares held by the subsidiary of the company Hong Kong Victor Onward
Mainly Because they are not to be cashed in a short term.
9.Long-term equity investment
（1）Long-term equity investment
3/133
深圳中冠纺织印染股份有限公司财务报表附注
2011 年 1 月 1 日至 2011 年 12 月 31 日
（本财务报表附注除特别注明外，均以人民币元列示）
Items Year-end balance Year-beginning balance
The cost of long-term equity
investment accounting -
The equity method long-term
equity investment 63,192,614 77,199,476
Total of long-term equity
investment 63,192,614 77,199,476
Less ： Long-term equity
investments for impairment
Net value long-term equity
investment 63,192,614 77,199,476
(2)The equity method long-term equity investment
Cash
Holdings Vote
Investment Exchange rate Year-end dividend
Name Proportion proportion change
Cost Amount of change balance at this
（%） （%）
year-beginning year
1.Zhejiang
Union
Hangzhou Bay 25% 25% 58,588,403 77,199,476 -10,616,493 -3,390,369 63,192,614
Chuangye Co.,
Ltd.
Total 58,588,403 77,199,476 -10,616,493 -3,390,369 63,192,614
Zhejiang Union Hangzhou bay chuangye Co., Ltd. (hereinafter named―Hangzhoubay‖) current change
including current profit confirmed by equity method is RMB10,616,493.
(3)The investment in the Enterprise
Holdi
Vote Total
ngs Total Net asset
propo Total assets at Business Net profit at
Name Prop Liabilities at total at the
rtion the end year income tat this year
ortio the end year end year
（%） this year
n %）
Zhejiang
Union
Hangzhou 25% 25% 1,337,026,932 1,045,067,119 291,959,813 55,368,828.31 -42,465,971
Bay
Chuangye
4/133
深圳中冠纺织印染股份有限公司财务报表附注
2011 年 1 月 1 日至 2011 年 12 月 31 日
（本财务报表附注除特别注明外，均以人民币元列示）
Holdi
Vote Total
ngs Total Net asset
propo Total assets at Business Net profit at
Name Prop Liabilities at total at the
rtion the end year income tat this year
ortio the end year end year
（%） this year
n %）
Co., Ltd.
10.Property investment
The investment in real estate companies use the cost model measures
Decrease Exchange
Amount of Increase in in
current period current rate changed Year-end balance
Items year-beginning period
Original Value 101,717,557 -4,805,554 96,912,003
House, Building 101,717,557 -4,805,554 96,912,003
Accumulated
62,038,553 3,430,954 -2,930,955 62,538,552
amortisation
House, Building 62,038,553 3,430,954 -2,930,955 62,538,552
Book Net value 39,679,004 34,373,451
House, Building 39,679,004 34,373,451
11.Fixed assets
(1)Breakdown of Fixed assets
Amount of Decrease Exchange Year-end
Increase in
current period
in current
Items year-beginning period rate changed balance
Original Value. 169,118,038 18,087 101,605 -7,973,491 161,061,029
House and building 50,351,437 -2,378,809 47,972,628
Machine and
104,233,077
Equipment -4,924,397 99,308,680
Transportation
4,915,121
Equipment 101,605 -219,643 4,593,873
Office equipment
9,618,403
and other 18,087 -450,642 9,185,848
Accumulated
116,821,045 198,051 136,035 -5,507,372 111,375,689
amortisation
House and building 27,537,760 89,788 44,591 -1,300,996 26,281,961
5/133
深圳中冠纺织印染股份有限公司财务报表附注
2011 年 1 月 1 日至 2011 年 12 月 31 日
（本财务报表附注除特别注明外，均以人民币元列示）
Amount of Decrease Exchange Year-end
Increase in
current period
in current
Items year-beginning period rate changed balance
Machine and
78,727,442 -3,719,406 75,008,036
Equipment
Transportation
4,243,598 92,080 91,444 -191,462 4,052,772
Equipment
Office equipment
6,312,245 16,183 -295,508 6,032,920
and other
Impairment
34,804,861 4,451,425 -1,641,352 37,614,934
Provision
House and building 16,232,914 -766,910 15,466,004
Machine and
15,697,431 4,451,425 -741,611 19,407,245
Equipment
Transportation
50,369 -93 50,276
Equipment
Office equipment
2,824,147 -132,738 2,691,409
and other
Book value 17,492,132 12,070,406
House and building 6,580,763 6,224,663
Machine and
9,808,204 4,893,399
Equipment
Transportation
621,154 490,825
Equipment
Office equipment
482,011 461,519
and other
(2)Details of temporary idle fixed assets are as follows：
Book
Items Original Accumulated Impairment
value depreciation provision Book Net value
House and building 44,541,973 25,173,561 15,466,005 3,902,407
Machine and
98,998,752 74,858,652 19,471,657 4,668,443
Equipment
Transportation
2,979,438 2,681,462 297,976
Equipment
Office equipment and
7,543,601 4,839,872 2,504,293 199,436
other
Total 154,063,764 107,553,547 37,441,955 9,068,262
* The original value of the temporarily idle machinery and equipments to be invested in
Nanjing Textile Printing & dyeing Co., Ltd. was RMB76,214,685, Accumulated amortisation
was RMB55,404,409, Impairment Provision was RMB16,759,772 , Book value was RMB
4,050,504 .
12.Intangible assets
6/133
深圳中冠纺织印染股份有限公司财务报表附注
2011 年 1 月 1 日至 2011 年 12 月 31 日
（本财务报表附注除特别注明外，均以人民币元列示）
Amount of Decrease in Exchange Year-end
Increase in
current period
current
Items year-beginning period rate changed balance
Original Value 13,669,525 -645,805 13,023,720
Land use right 12,968,838 -612,701 12,356,137
software 700,687 -33,104 667,583
Accumulated
amortisation 11,382,077 51,150 -537,736 10,895,491
Land use right 10,919,815 51,150 -515,897 10,455,068
software 462,262 -21,839 440,423
Book Net value 2,287,448 2,128,229
Land use right 2,049,023 1,901,069
software 238,425 227,160
Impairment
Provision 238,425 -11,265 227,160
Land use right
software 238,425 -11,265 227,160
Book value 2,049,023 -147,954 1,901,069
Land use right 2,049,023 -147,954 1,901,069
software
The real estate title certificate issued by Shenzhen Land Resource and House Property
Administration for part of the land for the factory building and office building of the Company
located at 26 Kuipeng Road, Baishigang, Kuiyong Town, Longgang District, Shenzhen was
obtained on January 18, 2010. The valid term is from March 5, 1999 to March 4, 2049.
Increase in accumulated amortization, Amortization RMB51,150 in this year.
13. Goodwill
Increase Decrease Exchange
Year-beginning in in Year-end Impairment
Items current current rate
balance period balance in year end
period changed
For the
goodwill
formed from
holding shares
of Nanhua 5,352,498 -252,874 5,099,624
7/133
深圳中冠纺织印染股份有限公司财务报表附注
2011 年 1 月 1 日至 2011 年 12 月 31 日
（本财务报表附注除特别注明外，均以人民币元列示）
Increase Decrease Exchange
Year-beginning in in Year-end Impairment
Items current current rate
balance period balance in year end
period changed
Company,
Total 5,352,498 -252,874 5,099,624
Nanhua Printing and Dyeing Company has also been discontinued, whose daily operations
maintained rely on the rental housing. Although South China Company has a negative net asset,
the company has a vast piece of land and property in Shenzhen city. And the historical cost of
assets recorded into account basis will changed, which will be appreciated in value greatly once
assessed, we believe that there is no value-reduced of the investment, so the goodwill is not
impaired.
14.Impairment of assets schedule
Decrease in
Amount of
Accrual the current Exchange Amount of
Items year-beginn
amount period rate change year-end
ing
Switchback
Provision for bad
18,454,659 1,504,208 -716,773 16,233,678
debts
Stock
Impairment 2,346,422 252,979 -95,226 2,504,175
Provision
Impairment of 34,804,861 4,561,791 -1,751,718 37,614,934
fixed assets
Inta
Impairment of 238,425 -11,265 227,160
Intangible assets
Total 55,844,367 4,814,770 1,504,208 -2,574,982 56,579,947
15.Account payable
(1)Account payable
Items Year-end balance Year-beginning balance
Total 3,239,221 3,353,297
Including：over 1 year 3,239,221 332,468
Accounts payable with age over one year included a number of accounts, without single
significant amount of accounts payable.
8/133
深圳中冠纺织印染股份有限公司财务报表附注
2011 年 1 月 1 日至 2011 年 12 月 31 日
（本财务报表附注除特别注明外，均以人民币元列示）
(2)Of the account payable at the end of period, there were none owed by corporate
shareholders of the Company holding over 5% (including 5%) of its total shares with voting
rights.
(3)Accounts payable include the following foreign currency balances.
Name of Year-end balance Year-beginning balance
Foreign Original Exchange RMB Original Exchange RMB
Currency currency rate equivalent currency rate equivalent
HKD 324,942 0.8107 263,430 324,942 0.8509 276,493
Total 263,430 276,493
16.Advanced account
(1)Advanced account
Items Year-end balance Year-beginning balance
Total 2,775,476 2,718,175
Including：over 1 year 2,775,476 2,718,175
Advanced account more than 1 year was mainly the sale fund for the wasted materials from
the relocation of the company, and due to delays in the overall relocation plan, the money paid in
advance was temporarily suspended.
（2） Of the prepayments at the end of period, there were none owed by corporate
shareholders of the Company holding over 5% (including 5%) of its total shares with voting
rights.
（3）Advanced Accounts include the following foreign currency balances.
Name of Year-end balance Year-beginning balance
Foreig
n Original Exchange RMB Original Exchange RMB
Currency currency rate equivalent currency rate equivalent
HKD 2,339,945 0.8509 1,991,059
USD 96,411 6.3009 607,476 101,903 6.6227 674,873
Total 607,476 2,665,932
17.Wage payables to employees
Year-begin Decrease in Exchange
Increase in Year-end
Items ning current period
current rate
period balance
balance changed
9/133
深圳中冠纺织印染股份有限公司财务报表附注
2011 年 1 月 1 日至 2011 年 12 月 31 日
（本财务报表附注除特别注明外，均以人民币元列示）
Year-begin Decrease in Exchange
Increase in Year-end
Items ning current period
current rate
period balance
balance changed
Wage (Including reward ,
500,218 3,531,556 3,539,388 -23,631 468,755
allowance and subsidy)
Welfarism For employees 1,013 1,364 -48 2,329
Social insurance premiums 120,400 120,400
Including :
79,492 79,492
Medical insurance premiums
Basic old-age insurance
31,072 31,072
premiums
Unemployment insurance
2,579 2,579
expenses
Industrial injury insurance
4,293 4,293
premiums
Childbirth insurance
2,964 2,964
premiums
Housing accumulation fund 23,680 23,680
Trade union outlays and
68,411 62,778 -1 5,632
employee education outlays
Other 119,132 -5,628 113,504
Total 620,363 3,745,411 3,746,246 -29,308 590,220
At the period end, the company had no wages payable that belong to arrears.，The compensation balance
payable of employee at the end of year will be expected to be paid in May 2012.
18.Fees and taxes payables
Items Year-end balance Year-beginning balance
VAT 815,662 821,067
Business tax 172,225 237,054
Enterprise income tax 1,204,195 1,337,550
Tax on city maintenance and
1,742
construction 1,224
Property tax 276,414 283,975
Individual income tax 98
Stamp tax 228,865 233,699
Educational surcharge 747 200
Local Educational surcharge 498
Total 2,700,348 2,914,867
19.Dividend payable
10/133
深圳中冠纺织印染股份有限公司财务报表附注
2011 年 1 月 1 日至 2011 年 12 月 31 日
（本财务报表附注除特别注明外，均以人民币元列示）
Items Year-end Year-beginning
balance balance Reasons of arrears
State Development &
243,189 255,248
Investment Co., Ltd*2
CITIC Group *2 243,189 255,248
Shenzhen Nanyou (Group)
121,595 127,624
Company*2 Capital tense*1
Shenye Union（Hongkong）Co.,
121,595 127,624
Ltd.
HongKong Victor Onward 486,378 510,497
Total 1,215,946 1,276,241
*1 The above payable dividends were the payable dividends of Nanhua Company, a subsidiary of the company,
the change in balance mainly due to the change of exchange rate. Because Nanhuan Company‘s capital was
more tension and the shareholders did not ask for the fund, the payable dividends have not been paid. The
payable dividends reduced at the end of the period mainly due to the change of exchange rate.
*2 The above three companies are the former shareholders of Nanhuan Company, the subsidiary of the
company.
20.Other accounts payable
(1)Other accounts payable
Items Year-end balance Year-beginning balance
Total 31,167,220 29,974,945
Including：Over 1 year 30,834,965 29,626,008
Other payables which are longer than one year mainly were the loans borrowed by Nanhuan Company
the subsidiary of the company from related companies, which have not been paid because of capital tension.
(2) Of the Other payables at the end of period, there were none owed by corporate shareholders of
the Company holding over 5% (including 5%) of its total shares with voting rights.
(3)Other payable payable by large in year end year
Items Amount Age Nature or content
Room 760 Cargo Floor （ #HKS Within 1
154,033 Property deposit
PINNERS-760） year
State Development & Investment Co., Over 3 Current account and
2,858,167
Ltd years interest
Over 3
Jinrongyuan Company 940,000 Workshop deposit
years
Over 3
Union Development Group 23,184,124
years Loans
Total 27,136,324
11/133
深圳中冠纺织印染股份有限公司财务报表附注
2011 年 1 月 1 日至 2011 年 12 月 31 日
（本财务报表附注除特别注明外，均以人民币元列示）
(4)Other payable Accounts include the following foreign currency balances.
Year-end balance Year-beginning balance
Name of
Foreign Original Exchange RMB Original Exchange RMB
currency
currency rate equivalent currency rate equivalent
HKD 868,734 0.8107 704,283 923,050 0.8509 785,423
Total 704,283 785,423
21.Other current liabilities
Items Year-end balance Year-beginning balance
Sewage charges 62,600 62,598
Audit fees 1,433,438 1,076,785
Land use fees 88,000 87,997
Securities management Fees 746 783
Total 1,584,784 1,228,163
22.Long-term borrowing
(1)Classification of long-term borrowing
Type Year-end balance Year-beginning balance
Impawn borrowing 1,160,011 1,350,126
Total 1,160,011 1,350,126
The borrowing was the installment payment for the housing in Hong Kong bought by the
subsidiary of the company Xingye Company, the mortgage article was the house purchased. The
installment payment was HKD 2,366,000 , which paid in 240 month, As of December 31,
2011,Principal amount of HKD 1,430,875.43 (RMB1,160,011)
23.Long-term payable
Unit Time Year-beginning Interest Interest Year-end Borrowing
balance rate（%） balance condition
Assess the Unimited 8,907,695
value of duration 8,486,859
assets
Total 8,907,695 8,486,859
* The company was authorized by People's Bank of China when it was reorganized into joint-stock
company, the revaluation of the assets of the revaluation gain attributable to the restructuring of the Company
before the shareholder. The asset was re-assessed on January 31, 1992, which generated about 14,754,000
HKD revaluation gain, recorded on account as long-term payable subject, part of them have been used to offset
12/133
深圳中冠纺织印染股份有限公司财务报表附注
2011 年 1 月 1 日至 2011 年 12 月 31 日
（本财务报表附注除特别注明外，均以人民币元列示）
the bad debts prior to listing (about 4,285,000 HKD ). The shareholders before the reorganization have agreed
not to require the company to pay such amounts with cash, to offset each other when purchase stocks of the
company in the future, the decrease of long-term payables mainly due to the change of exchange rate.
24.Deferred income tax liabilities
（1）The confirmed Deferred income tax liabilities
Items Year-end balance Year-beginning balance
The income tax of taxable temporary
difference. 808,335 892,357
Total 808,335 892,357
（2）The temporary difference
Item of the taxable temporary Year-end balance Year-beginning balance
Assets assessment appreciation 4,899,000 5,408,224
Total 4,899,000 5,408,224
Tax rate 16.5% 16.5%
Confirmation of the Deferred
income tax liabilities. 808,335 892,357
* When the company was reorganized into joint-stock company, the company was approved by the
People's Bank of China, the added value of the assets of the subsidiary of the company Hong Kong Victor
Onward Company, according to Hong Kong Standards, can not be adjusted, and was not to be deducted when
accounting the income tax, resulting in the differences in net value of fixed assets and accounting basis.
25.Other non-current liabilities
Items Year-beginning
Year-end balance
balance
ERP Information construction 228,216 239,532
Technology subsidies 608,576 638,754
Total 836,792 878,286
（1）The above funds were the special subsidies received from Shenzhen Department of Finance in
2004 for the digital jet printing projects and for the construction of enterprise information. The deal must
be accepted by the Financial Bureau before accounting, so it was suspended. The reduction was due to the
13/133
深圳中冠纺织印染股份有限公司财务报表附注
2011 年 1 月 1 日至 2011 年 12 月 31 日
（本财务报表附注除特别注明外，均以人民币元列示）
change in exchange rates.
26.Share capital
Name/Type Year-beginning balance Change Year-end balance
Amount Proportion% Amount Amount Proportion%
Restricted shares
Common shares in
RMB 99,720,453 58.96 99,720,453 58.96
Foreign shares in
domestic market 69,421,903 41.04 69,421,903 41.04
Total restricted
shares 169,142,356 100.00 169,142,356 100.00
Total of capital
shares 169,142,356 100.00 169,142,356 100.00
27.Capital common reserve
Items Year-beginning Increase in Decrease in Year-end
current period current period
balance balance
Share capital Premium 29,718,829 29,718,829
Other Capital common 10,153,705 10,023,644
reserve 130,061
Total 39,872,534 130,061 39,742,473
Current increment in capital surplus came from current fair value gain of finance assets available for
sale.
28.Surplus common reserve
Items Year-beginning Increase in Decrease in Year-end
current period current period
balance balance
Statutory Surplus
26,704,791 26,704,791
common reserve
Total 26,704,791 26,704,791
29.Retained profit
Items Amount Proportion（%）
Balance at the end of last period -98,665,017
Add： The beginning of the undistributed
profits adjustments
Including：Change of accounting policy
14/133
深圳中冠纺织印染股份有限公司财务报表附注
2011 年 1 月 1 日至 2011 年 12 月 31 日
（本财务报表附注除特别注明外，均以人民币元列示）
Items Amount Proportion（%）
Correcting previous errors
Change of consolidated scope
Other adjustments
Balance at the beginning of current year -98,665,017
Add：The net profit due to the shareholders of -17,361,593
the parent company in the year
Less ： Withdrawing statutory surplus public
reserve
Withdrawing discretionary surplus reserve
Withdrawing Ordinary risk allowance
Common stocks dividends payable
Stock dividend transferred in stock capital
Balance at the end of current year -116,026,610
30.Minority shareholders equity
Name of Subsidiary Proportion% Year-beginning
Year-end amount
balance
Nanhua Company* 30.56
Shenzhen East Asia -1,311,595
Company 49.00 -1,373,514
Total -1,373,514 -1,311,595
Nanhua Company and Shenzhen East Asia, two subsidiaries of the Company, suffered excess
loss. According to No. 4 Interpretation of Accounting Standards for Business Enterprises, where
the loss for current period shared by minority shareholders of a subsidiary exceeds the owner's
equity enjoyed by them in this subsidiary at the beginning of period in consolidated financial
statements, the difference shall write off minority interests. Whether the Articles of Association
of the Company or an agreement defines the obligation of minority shareholders for excess loss
or not, excess loss shall write off minority interests, i.e., minority interests will be negative when
the subsidiary suffering excess loss is included for statement consolidation. However, the
minority shareholders of Nanhua Company were declared bankrupt and suffered compulsory
liquidation in 2000. No retroaction can be conducted. Therefore, the minority shareholders of
Nanhua Company shall no longer bear losses.
31. Business income,Business cost
Items Amount of current Amount of Previous
period period
15/133
深圳中冠纺织印染股份有限公司财务报表附注
2011 年 1 月 1 日至 2011 年 12 月 31 日
（本财务报表附注除特别注明外，均以人民币元列示）
Items Amount of current Amount of Previous
period period
Key business income 961,014
Other business income 9,850,484 8,390,096
Total 9,850,484 9,351,110
Key business cost 317,033
Other business cost 4,269,140 4,006,056
Total 4,269,140 4,323,089
(1)Key buiness—Product
Amount of current period Amount of Previous period
Name Business Business
Business cost Business cost
income income
Cloth bleaching, printing and 317,033
961,014
dyeing
Rent 9,850,484 4,269,140 8,390,096 4,006,056
Total 9,850,484 4,269,140 9,351,110 4,323,089
The total sale incomes of the top five customers was RMB8,568,819.01 , representing 87%
of the main business income in this year.
a) Revenue from main business status of top tive clients
Name of customer Business Revenues Proportion to revenue from main
business（%）
Shenzhen Nanshan Saint Laurent
Wedding Photography 504,000 5.12
SCSExpress International
996,960 10.12
Limited）
CVA HOLDING 860,859 8.74
Shenzhen Finance sources
5,640,000 57.26
Development Co., Ltd.
Shenzhen Hebainian Investment
567,000 5.76
Development Co., Ltd.
Total 8,568,819 87.00
32.Business tax and supertax
Items Amount of Amount of Calculation and payment
current period Previous period criteria
Bussiness tax 399,509 5%
City construction tax and
27,966 7%
education additional
16/133
深圳中冠纺织印染股份有限公司财务报表附注
2011 年 1 月 1 日至 2011 年 12 月 31 日
（本财务报表附注除特别注明外，均以人民币元列示）
Items Amount of Amount of Calculation and payment
current period Previous period criteria
expenses
Education expenses 3&
11,985
surtax
Local Education 2%
8,057
expenses surtax
Total 447,517
The annual business tax and surcharges in cost accounting，out of this period.
33.Sale expenses
Items Amount of current Amount of Previous
period period
Office fees 830 37,934
Travel fees 7,735 26,682
Telephone and fax fees 8,062 18,743
Welfare 3,946 11,882
Miscellaneous 6,524 750
Wage 237,012 372,116
Society fees 2,510
Transportion fees 1,877 5,000
Other 5,027
Car costs 8,777
Staff insurance 6,860
Dormitory fees 5,000
Sample fees 10,410 15,752
Business insurance 69,300
Transportation costs 20,929
Depreciation 6,231 80,510
Rental fee 282,627 687,772
Pay commission
Total
34.Management expenses
Items Amount of current Amount of Previous
period period
Telephone fees 53,219 69,300
Taxes paid 755,170 1,510,239
17/133
深圳中冠纺织印染股份有限公司财务报表附注
2011 年 1 月 1 日至 2011 年 12 月 31 日
（本财务报表附注除特别注明外，均以人民币元列示）
Items Amount of current Amount of Previous
period period
Insurance premium 349,050 336,928
Travel fees 199,796 114,479
Vehicle fuel 113,124 250,008
Property management fees 42,803 52,307
Board fees 277,724 260,786
Welfare 154,121 145,142
Union funds 70,107 35,209
Wage 2,353,702 2,416,195
Society fees 350,190 477,292
Tolls 81,040 11,349
Lawyer fees 67,628 87,322
Social insurance 235,832 252,371
Audit fees 727,332 393,303
Water and electricity fees 350,165 919,151
Parking fees 17,916 16,814
Amortization of intangible assets 52,418 54,620
Repair fees 504,899 108,996
Transportion fees 1,346
Depreciation 202,962 223,396
Securities management expenses 283,858 439,111
Rental fee 109,390 226,397
Dormitory fees 95,323 46,779
Office fees 229,999 185,312
Staff training fees 30,432
Other 212,393 234,640
Housing funds 79,703
Total 8,000,296 8,868,792
35.Financial expenses
Items Amount of current Amount of Previous
period period
Interest expenses 1,060,657 808,011
Less：Interest income 373,742 243,326
Add：Exchange rate loss -381,925 74,237
Add：Other expenses 11,211 13,505
Total 316,201 652,427
18/133
深圳中冠纺织印染股份有限公司财务报表附注
2011 年 1 月 1 日至 2011 年 12 月 31 日
（本财务报表附注除特别注明外，均以人民币元列示）
36.Asset impairment losses
Items Amount of current Amount of Previous
period period
Bad debt losses -1,504,208 3,491,123
Inventory devaluation losses 252,979 460,344
Fixed asset impairment losses 4,561,791 62,902
Total 3,310,562 4,014,369
37.Changes income in fair value /loss
Items Amount of Amount of Previous
current period period
Trading financial assets- -88,247
Total -88,247
38.Investment income
(1）Investment income generated by the sources listed
Items Amount of current Amount of
period Previous period
Income from transfer of equity investment -10,616,493 11,264,659
Disposal trading financial assets to achieve return 13,965 258,861
investment
Total -10,602,528 11,523,520
There were no major restrictions in the investment income at the period end.
(2)Equity method
Items Amount of Amount of reason
current period Previous
period
Total -10,616,493 11,264,659
Including: -10,616,493 11,264,659 Affiliated company Hangzhou Bay has loss
Hangzhou Bay
Company RMB10,616,49 in the report period
39.Non-operating income
(1)Non-operating income
19/133
深圳中冠纺织印染股份有限公司财务报表附注
2011 年 1 月 1 日至 2011 年 12 月 31 日
（本财务报表附注除特别注明外，均以人民币元列示）
Items Amount of Amount of Amount of non-current gains &
current Previous loss in this year
period period
Net income disposition fixed
assets
Including ： Income
disposition fixed assets
Other 8,308 38,382 8,308
Total 8,308 38,382 8,308
40.Non-operating expense
Items Amount of Amount of Amount of non-current gains & loss in
current period Previous this year
period
Loss disposition Non-current 39,237
522 522
assets
Including: loss on disposal of 39,237
522 522
fixed assets
External donations 976 976
Fine expense 6,590 1,095 6,590
Total 8,088 40,332 8,088
41.Income tax expenses
(1)Income tax expenses
Items Amount of current Amount of
period Previous period
The current income tax expense
Deferred income tax expense -42,902 -44,704
Total -42,902 -44,704
42.Calculation process for Basic gains per share and Diluted gains per shares
Amount of Amount of
Items No current period Previous
period
20/133
深圳中冠纺织印染股份有限公司财务报表附注
2011 年 1 月 1 日至 2011 年 12 月 31 日
（本财务报表附注除特别注明外，均以人民币元列示）
Amount of Amount of
Items No current period Previous
period
Net profit attributable
to shareholder of the 1 -17,361,593 4,102,924
Parent Company
Non-recurring
gain/loss
attributable to the 2 14,184 238,500
shareholders of the
Parent Company
Attributable to the
shareholders of the
Parent Company, Net
3=1-2 3,864,424
profit after deducting -17,375,777
of non-recurring
gain/loss
Total of shares at
169,142,356
year-beginning 4 169,142,356
Public reserve was
transferred as capital
and share increase 5
from dividend
distribution（Ⅰ）
The issuance of new
shares or increase the
number of shares and 6
other debt-equity
swap（Ⅱ）
ncrease in the shares
(Ⅱ)from the next
month to the end 7
month of the
reporting period
Shares decreased in
the reporting period 8
due to repurchase.
21/133
深圳中冠纺织印染股份有限公司财务报表附注
2011 年 1 月 1 日至 2011 年 12 月 31 日
（本财务报表附注除特别注明外，均以人民币元列示）
Amount of Amount of
Items No current period Previous
period
Decrease in the
shares from the next
month to the end 9
month of the
reporting period
Share number
decrease for shares 10
deduction
Number of months of
11
the reporting period
The weighted
average number of 12=4+5+6×7÷11
169,142,356
ordinary shares -8×9÷11-10
issued out. 169,142,356
Basic gains per share 0.02
-0.10
（Ⅰ） 13=1÷12
Diluted gains per -0.10 0.02
share（Ⅱ） 14=3÷12
The interest of
ordinary shares
15
which was confirmed
as costs
Conversion costs 16
Income tax rate 17 24% 22%
Warrants, shares with
18
equity right increase
Diluted gains per
19=[1+(15-16)×(1-17)]÷(12+18) -0.10 0.02
share（Ⅰ）
Diluted gains per
19=[3+(15-16)×(1-17)]÷(12+18) -0.10 0.02
share（Ⅱ）
43.Other comprehensive income
Items Amount of Amount of
current period Previous period
22/133
深圳中冠纺织印染股份有限公司财务报表附注
2011 年 1 月 1 日至 2011 年 12 月 31 日
（本财务报表附注除特别注明外，均以人民币元列示）
Items Amount of Amount of
current period Previous period
1．Loss amount producted by sellable financial assets -130,061 575,430
Less：Income tax infection producted by sellablefinancial assets
Net amount transferred into profit and loss at current priod that
reckoned into other comprehersive income at former period
Subtotal -130,061 575,430
2．The enjoyed share in other comprehensive incomeofother
invested unit according to equity method
Less：Income tax infection producted from theenjoyed shre in
other comprehensive income of other invested unit according
to equity method
Net amount transferred into profit and loss at current period that
reckoned into other comprehersive income at former priod
Subtotal
3．Benefit (Or loss) amount producted from cash flow
Less：Income tax infection produced from cash flowhedging
instruments
Net amount transferred into profit and loss at current period that
reckoned into other comprehensive income at former period
Transferred to the adjustment of initial confirmation amount of
items at hedged period
Subtotal
4．Translating difference in foreign currency financial reports -6,390,749 -4,895,497
Less：Net amount that transferred into profitandloss at current
period in disposed overseas business
Subtotal -6,390,749 -4,895,497
5．Other -
Less ： Taxation infection arising from reckoning other -
comprehensive income
Net amount transferred into profit and loss at current period that -
reckoned into other comprehensive income at former period.
Subtotal -
Total -6,520,810 -4,320,067
44.Cash flow statement
23/133
深圳中冠纺织印染股份有限公司财务报表附注
2011 年 1 月 1 日至 2011 年 12 月 31 日
（本财务报表附注除特别注明外，均以人民币元列示）
(1)Other cash received relating to financing activities
a.Other cash received relating to financing activities
Items Amount of current period
Interest income 772,118
Deposit ,water and electricity fees 1,663,780
Between units and individuals 934,560
Exchange income 1,076,830
Other 107,301
Total 4,554,589
b.Other cash paid relating to operating activities
Items Amount of current period
Sales commissions 72,695
Rental fee 109,390
Society fees 384,025
Between units 20,263
Transportion fees 276,848
Audit fees 466,699
Office fees 241,973
Insurance premium 122,848
Travel fees 133,013
Telephone fees 104,303
Securities management expenses 398,583
Water and electricity fees 2,508,048
Parking fees 17,916
Labour union fee 78,760
Property management fees 135,966
Repair fees 236,845
Deposit 59,471
Board fees 14,836
Other 138,110
Total 5,520,592
c)Supplement information of Consolidated Flow Statement
24/133
深圳中冠纺织印染股份有限公司财务报表附注
2011 年 1 月 1 日至 2011 年 12 月 31 日
（本财务报表附注除特别注明外，均以人民币元列示）
Items Amount of Amount of
current period Previous period
1. Adjusting net profit to net cash flow in operating activities:
Net profit -17,423,512 2,370,935
Add： Provision for impairment of assets 3,310,562 4,014,369
Fixed assets depreciation 198,051 3,842,554
Amortization of intangible assets 51,150 53,686
Amortization of long-term expenses to be amortize
The losses on the disposal of fixed assets, intangible assets and
522 39,237
other long-term assets
Loss on retirement of fixed assets
Loss on changes of Fair value 88,247
Financial expenses 2,540,077 1,740,856
Investment losses 10,602,528 -11,523,520
Decrease of deferred income tax asset
Increase of deferred income tax liability -84,022 -76,511
Decrease in inventory 426,940
Decrease in operating receivable 1,057,273 2,228,442
Increase in operating payables 3,853,150 -2,527,146
Other -352,260
Net cash flows from operating activities 4,202,430 237,582
2.Investing and financing activities that do not involve cash
receipts and payments
Conversion of debt into capital
Convertible bonds to be expired within one year
Fixed assets under financial lease
3.Net increase in cash and cash equivalents
Cash at the end of the period 53,399,316 51,786,613
Less：Cash at the beginning of the period 51,786,613 56,105,626
Add: Cash equivalents at the end of the period
Less：Cash equivalents at the beginning of the period
Net increase in cash and cash equivalents 1,612,703 -4,319,013
The financial cost due to change in exchange rate and the impact on cash and cash equivalents
RMB 2,540,077, the financial cost of interest payments was the loan interest of the related
parties, reflected in business activities.
(3) Cash and cash equivalents
25/133
深圳中冠纺织印染股份有限公司财务报表附注
2011 年 1 月 1 日至 2011 年 12 月 31 日
（本财务报表附注除特别注明外，均以人民币元列示）
Items Amount of Amount of
current Previous
period period
53,399,316 51,786,613
I. Cash
13,567 91,999
Of which: Cash in stock
52,631,239 46,026,397
Bank savings could be used at any time
754,510 5,668,217
Other monetary capital could be used at any time
Usable money in Central Bank
Money saved in associated financial bodies
Money from associated financial bodies
II. Cash equivalents
Of which: bond investment which will due in three months
53,399,316 51,786,613
III. Balance of cash and cash equivalents at the period end
Of which:：Parent company or subsidiary of the Group using - -
restricted cash and cash equivalents
IX. Related party relationship and related transactions
(I) Related party relationship
1. The related parties with controlling relationship
(1)The related parties with controlling relationship
Parent Registered Legal Organizati
Type Nature on Code
company address representa
tive
Union Issue company 11/F,Union Production Dong
192471500
Holdings Bulding, and sale ofclothing Binggen
Limited real
Shennan Zhong and textiles,& andexport
Union Import
Union Dong
Road,Shenzhen estate developin 190337957
Group liability Bulding,Shennan business ―processing Binggen
Company Zhong Road, with materials‖ and
(2)The registered capital Shenzhen partiesprocessing relationship and the change thereof.
imported materials
Parent company Balance in year Increase of this Decrease of Balance in year
beginning period this period end
Union Group 90,606,000 90,606,000
26/133
深圳中冠纺织印染股份有限公司财务报表附注
2011 年 1 月 1 日至 2011 年 12 月 31 日
（本财务报表附注除特别注明外，均以人民币元列示）
Parent company Balance in year Increase of this Decrease of Balance in year
beginning period this period end
Union 1,123,887,712 1,123,887,712
Holdings
(3)The related parties without controlling relationship
Shares amount Holding proportion%
Parent company
Amount in Amount Amount in Amount
year end in year year end in year
Union Group* 5,821,089 5,821,089 3.44% 3.44%
beginning beginning
Union 43,141,032 43,141,032 25.51% 25.51%
Holdings
* Union Group holds 31.32% of equity capital of Union Holdings, it controls Union Holdings, and Union
Holdings is a controlling shareholder of the company, thus Union Group is the actual controller of the
company
2.Subsidary
The subsidiaries of the Company as described in Note VII
3.Joint venture and affiliated company.
Joint venture and affiliated company ,see Notes VIII,9
4. Other Related party
Related
Organization
Type Name transactions
Code
The related parties -
Current balance
controlled the same Actual
controller Shenye Union（HK）Co., Ltd.
The related parties 192199105
Current balance
controlled the same Actual Shenzhen Union Property
controller Group Co., Ltd.
(2) Lease assets to the related parties
In the report year, the Company leased Room 1307 and 1308 of Union Building owned by Union
Group. The term of tenancy is from January 1, 2009 to May 31, 2009. The monthly rent is RMB
6800. The rent was determined according to market price. * The original lease contract agreement still
continues down to the expiration of the contract , without signing a new lease contract.
(3) Balance current related parties
Related parties Year-end balance Year-beginning balance
Account receivable
Shenye Union（HK）Co., Ltd. 299,354 314,198
27/133
深圳中冠纺织印染股份有限公司财务报表附注
2011 年 1 月 1 日至 2011 年 12 月 31 日
（本财务报表附注除特别注明外，均以人民币元列示）
Related parties Year-end balance Year-beginning balance
Other payable
Union Group 23,159,803 22,564,462
Shenzhen Union Property Group Co., Ltd. 700,734 699,258
X.Subsequent events
As of December 31, 2011,The company has no forrned form other Importance events.
XI.Commitment events
1. The external investment contracts and the related financial expenditures which have signed or
not yet completely fulfilled.
By December 31, 2011The Group still has the major external investments RMB 30 million
which have signed but still not paid, as follows:
Name of investment Contractual Prepaid Unpaid Expected Remarks
projects investment investme investment investment
amount nt amount period
amount
Invest Nanjing East Can not be
Asia Textile Co., Ltd Unsurenes relocated because
30 million - 30 million
with machinery and s the fields
equipments uncompleted
4) The big contract which has been signed or is ready to be carried out
By December 31, 2011 The Group still has big contract which has been signed but not paid, a total of 1.71
million yuan, as follows:
Name of Contractual Prepaid Unpaid Expected Remarks
investment investment investment investment investment
projects amount amount amount period
Elocation of Can not be
production relocated because
1,710,000 855,000 855,000 Unsureness
equipments as the fields
a whole uncompleted
4. Except for the events described above, By December 31, 2011the Group has no other significant
commitment events.
XII . Events after balance sheet date
The Group had no other significant matters after the balance sheet date.
XIII. Other Significant Events
28/133
深圳中冠纺织印染股份有限公司财务报表附注
2011 年 1 月 1 日至 2011 年 12 月 31 日
（本财务报表附注除特别注明外，均以人民币元列示）
1.Lease
(1) Business in leasing assets (The lessor under operating leases)
Year-end balance Year-beginning
Type balance
Cost 96,912,003 101,717,557
House, Building 96,912,003 101,717,557
Accumulated amortisation 62,538,552 62,038,553
House, Building 62,538,552 62,038,553
Impairment provision
House, Building
The book value 34,373,451 39,679,004
House, Building 34,373,451 39,679,004
2.Items related to measurement of fair value.
Item Amount at Provision Amount
Gains and Accumulative
the for at the end
beginning losses from change of fair impairment of period
of period made in
change of value
current
fair value in accounted for period
current as rights and
period interests
Financial assets
1. Financial assets
calculated according to
fair value whose change is 77,235 -8,335 68,900
accounted for as profits or
losses for current period
Trading financial assets 874,427 -171,372 703,055
Subtotal of financial 951,662 -171,372
assets 771,955
3.Foreign financial assets and foreign financial liability
Item Amount at Provision Amount
Gains and Accumulative
the for at the end
beginning losses from change of fair impairment of period
of period made in
change of value
current
fair value in accounted for period
current as rights and
period interests
29/133
深圳中冠纺织印染股份有限公司财务报表附注
2011 年 1 月 1 日至 2011 年 12 月 31 日
（本财务报表附注除特别注明外，均以人民币元列示）
Financial assets
Trading financial assets 874,427 -171,372 703,055
Subtotal of financial 874,427
-171,372 703,055
assets
4.Other Significant Events
Since March 2007, Shenzhen Victor Onward Textile Industrial Co., Ltd. stopped production
and dismissed most of workers. The company currently only had some house leasing business.
5. Subsidiaries controlled by the company had stopped the operation and were depending on
house lease to maintain. In 2007 the company intended to invest part of machineries and
equipments to Nanjing East Asia Textile Printing & Dyeing Co., Ltd. But due to the reasons of
the joint venture party and the prospect change in the industry, the investment plan was delayed.
Up to the present, the project has been delayed for 4years. The difficulties for the joint venture
project have constantly increased. The Company is actively negotiating with the other party of
the joint venture and trying to settle this problem properly.
XIV.Notes of main items of parent company‘s financial statements
30/133
深圳中冠纺织印染股份有限公司财务报表附注
2011 年 1 月 1 日至 2011 年 12 月 31 日
（本财务报表附注除特别注明外，均以人民币元列示）
1. Account receivable
(1) Categories of account receivable
Type Year-end balance Year-beginning balance
Book Balance Provision for bad debts Book Balance Provision for bad debts
Amount Proportion% Amount Proportion% Amount Proportion% Amount Proportion%
Account
receivable
with
significant
specific
amount 3,503,464 27.79 3,503,464 100.00 3,872,632 31.60 3,872,632 100
that were
provisioned
had debt
preparation
separately
Aging
group
1/133
深圳中冠纺织印染股份有限公司财务报表附注
2011 年 1 月 1 日至 2011 年 12 月 31 日
（本财务报表附注除特别注明外，均以人民币元列示）
Type Year-end balance Year-beginning balance
Book Balance Provision for bad debts Book Balance Provision for bad debts
Amount Proportion% Amount Proportion% Amount Proportion% Amount Proportion%
account
receivable
that were
not
significant
but have 7,974,647 63.25 7,974,647 100.00 8,384,444 68.40 8,384,444 100
been
provisioned
bad debt
preparation
separately
Total 11,478,111 100.00 11,478,111 100.00 12,257,076 100.00 12,257,076 100.00
2/133
深圳中冠纺织印染股份有限公司财务报表附注
2011 年 1 月 1 日至 2011 年 12 月 31 日
（本财务报表附注除特别注明外，均以人民币元列示）
1） Account receivable with significant specific amount that were provisioned had
debt preparation separately
Provision Reason of
Name Book balance Bad debts
proportion% provision
Carnival Index Aging long
1,098,549 1,098,549 100.00
International Ltd
TAI YANG Aging long
ENTERPRISE 1,010,047 1,010,047 100.00
CO.,LTD.
The company in
Shenzhong Enterprise
1,394,868 1,394,868 100.00 solvent, to be c
Co.,Ltd.
anceled
Total 3,503,464 3,503,464 100.00
2） As of December 31, 2011, account receivable that were not significant but have been
provisioned bad debt preparation separately
Provision Reason of
Name Book balance Bad debts
proportion% provision
Fly Dragon International 573,536 573,536 100.00 Aging long
Grateful Textiles Co.,Ltd 566,661 566,661 100.00 Aging long
World Fabrica (Int'l) Ltd 465,126 465,126 100.00 Aging long
Shenzhen Fangzhou Textile Aging long
446,352 446,352 100.00
Co., Ltd.
Ezhou Xiangya Garments Aging long
351,500 351,500 100.00
Co., Ltd.
Tak Shing Buying Office Led 333,502 333,502 100.00 Aging long
Starline Textile CO.Ltd. 332,234 332,234 100.00 Aging long
Shenye Union（HK）Co., Ltd. 299,354 299,354 100.00 Aging long
Panther Fabric Ltd. 295,088 295,088 100.00 Aging long
Changshu Jiangsu Garments Aging long
270,134 270,134 100.00
Import & Export Co., Ltd.
Victor Onward Aging long
245,560 245,560 100.00
Textile(HK)Co., Ltd.
Nissho Iwai HK Corp Ltd. 215,229 215,229 100.00 Aging long
Unimix Ltd. 192,891 192,891 100.00 Aging long
Tai Hing Linings Co Ltd 191,295 191,295 100.00 Aging long
Human Changpuan Garment 185,981 185,981 100.00 Aging long
Ningbo Youngor Fukurmura Aging long
Uniforms Co., Ltd.
172,910 172,910 100.00
Win favour evelopment ltd 146,600 146,600 100.00 Aging long
Speedy Textiles Co 146,502 146,502 100.00 Aging long
Other 2,544,192 2,544,192 100.00 Aging long
1/133
深圳中冠纺织印染股份有限公司财务报表附注
2011 年 1 月 1 日至 2011 年 12 月 31 日
（本财务报表附注除特别注明外，均以人民币元列示）
Provision Reason of
Name Book balance Bad debts
proportion% provision
Total 7,974,647 7,974,647 100.00
(2) Of the prepayments at the end of period, there were none owed by corporate shareholders of the Company
holding over 5% (including 5%) of its total shares with voting rights.
(3)The front 5 units‘ information of account receivable
Unit name Relation with Amount Fixed year Percentage of
the company account receivable
Carnival Index International Non-Related Over 3
Ltd parties
1,098,549 years 9.57
Non-Related Over 3
TAI YANG ENTERPRISE CO.,LTD. parties
1,010,047 years 8.80
Subsidiary Over 3
Shenzhong Enterprise Co.,Ltd.
1,394,868 years 12.15
Non-Related Over 3
Fly Dragon International parties
573,536 years 5.00
Non-Related Over 3
Grateful Textiles Co.,Ltd parties
566,661 years 4.94
Total 4,643,661 40.46
(4)About the account receivable from the related parties
Relation with this
Name Amount Proportion(%)
company
Shenzhong Enterprise Co.,Ltd. Subsidiary 1,394,868 12.15
Shenzhen East Asia Victor Onward
Textile Printing & dyeing 0.45
Subsidiary 51,871
The related
parties controlled
2.61
the same Actual 299,354
Shenye Union（HK）Co., Ltd. controller
Total 15.21
1,746,093
(5)Balance of foreign currency in account receivable
Year-end balance Year-beginning balance
Foreign
Original Exchange Amount in Original Exchange Amount in
currency
currency rate RMB currency rate RMB
HKD 11,586,257 0.8107 9,392,979 11,038,875 0.8509 9,392,979
Total 9,392,979 9,392,979
2. Other receivables
(1)Categories of other receivable
2/133
深圳中冠纺织印染股份有限公司财务报表附注
2011 年 1 月 1 日至 2011 年 12 月 31 日
（本财务报表附注除特别注明外，均以人民币元列示）
Year-end balance Year-beginning balance
Type Book Balance Provision for bad debts Book Balance Provision for bad debts
Amount Proportion% Amount Proportion% Amount Proportion% Amount Proportion%
Other
receivable
with
significant
specific
amount 76,582,183 98.40 3,881,910 5.07 78,976,883 98.09 3,376,237 4.27
that were
provisioned
bed debt
preparation
separately
Other
accounts
that were
provisioned
bad debt -
preparation
in
accordance
with agin
1/133
深圳中冠纺织印染股份有限公司财务报表附注
2011 年 1 月 1 日至 2011 年 12 月 31 日
（本财务报表附注除特别注明外，均以人民币元列示）
Year-end balance Year-beginning balance
Type Book Balance Provision for bad debts Book Balance Provision for bad debts
Amount Proportion% Amount Proportion% Amount Proportion% Amount Proportion%
Group
Deposit
298,760 0.38 37,782 0.05
Group
Other
receivable
that were
not
significant
but have 949,941 1.22 949,941 100.00 1,497,823 1.86 1,497,823 100.00
been
provisioned
had debt
preparation
separately
Totla 77,830,884 100.00 4,831,851 6.21 80,512,488 100 4,874,060 6.05
2/133
深圳中冠纺织印染股份有限公司财务报表附注
2011 年 1 月 1 日至 2011 年 12 月 31 日
（本财务报表附注除特别注明外，均以人民币元列示）
1） Other ts receivable with significant specific amount that were provisioned had debt preparation
separately
Provision Reason of
Name Book balance Bad debts
proportion% provision
HongKong Victor
Onward 59,700,273
Shenzhen Nanhua
Printing & 13,000,000
dyeing Company
Nanjing East Asia 1,313,370 1,313,370 100.00 Aging long
CCB.Guangdong
1,080,000 1,080,000 100.00 Aging long
Shunde Branch
Changzhou
Dongfeng Textile 975,000 975,000 100.00
Printing & dyeing
Aging long
Equipment Co., Ltd.
Shenzhen East The company inso
Asia Victor Onward 513,540 513,540 100.00 lvent, to be can
Textile Printing &
dyeing celed
Total 76,582,183 3,881,910 5.07
2） Group –Deposit Group
Book Provision Reason of
Name Bad debts
balance proportion% provision
Shenzhen Zhengju
175,560
Technology Co., Ltd.
Withholding Deposit, N
53,741
telephonecharges o provision
Tang Hongzhai 20,000 for bad d
Other 49,459 ebts
Total 298,760
3） As of December 31, 2011, Other receivable that were not significant but have been
provisioned bad debt preparation separately
Name Book balance Amount Proportion % Reason
HongKong Victor
Onward 693,951 693,951 100.00 Aging long
Shanghai
Huayinke Trade 180,000 180,000 100.00 Aging long
Industry Co., Ltd.
Shenzhen Aging long
Environmental
35,000 35,000 100.00
Management
System
1/133
深圳中冠纺织印染股份有限公司财务报表附注
2011 年 1 月 1 日至 2011 年 12 月 31 日
（本财务报表附注除特别注明外，均以人民币元列示）
Name Book balance Amount Proportion % Reason
Certification
Center
Shenzhen Design Aging long
Institute of
Ministry of
30,000 30,000 100.00
Machinery
Industry Shanghai
Branch
Other 10,990 10,990 100.00 Aging long
Total 949,941 949,941 100.00 -
（2） As of Decrember 31,2011，In the balance of accounts payable, there were no payables to
shareholders holding 5.00% (including 5.00%) or more of the voting right of the Company;
(3) The front 5 units‘ information of Other account receivable
Proportion(%)
Unit name Relation Amount
Account
with the Content
Age
company
HongKong Victor Over 3
59,700,273 76.71
Onward Subsidiary years Business
Shenzhen Nanhua Over 3
Printing & dyeing 13,000,000 years 16.70
Company Subsidiary Business
Non-Related Over 3
1,313,370 years 1.69
Nanjing East Asia parties Goods
Non-Related Over 3
CCB.Guangdong 1,080,000 years 1.39
Shunde Branch parties Goods
Changzhou Dongfeng Non-Related Over 3
Textile Printing & dyeing 975,000 years 1.25 Goods
Equipment Co., Ltd. parties
Total 76,068,643 97.74
(4) Account receivable from Related affiliated parties
Relation with
Name Amount Proportion(%)
the company
HongKong Victor Onward Subsidiary 59,700,273 76.71
Shenzhen Nanhua Printing & dyeing
Subsidiary 13,000,000 16.70
Company
Shenzhen East Asia Victor Onward Textile
Subsidiary 513,540 0.66
Printing & dyeing Company
Total 73,213,813 94.07
2/133
深圳中冠纺织印染股份有限公司财务报表附注
2011 年 1 月 1 日至 2011 年 12 月 31 日
（本财务报表附注除特别注明外，均以人民币元列示）
(5)Other receivable include the following foreign currency balances
Foreign Year-end balance Year-beginning balance
Currency Original Exchange RMB Original Exchange RMB
of Name currency rate equivalent currency rate equivalent
HKD 74,697,285 0.8107 60,557,089 79,822,967 0.8509 67,921,362
Total 60,557,089 67,921,362
3. Long-term equity investment
(1) Long-term equity investment
Items Year-end balance Year-beginning balance
The cost of long-term equity
investment accounting 38,041,853 39,928,226.
Total of long-term equity
investment 38,041,853 39,928,226
Less ： Long-term equity
investments for impairment 1,252,900 1,315,027
Net value long-term equity
investment 36,788,953 38,613,199
(2)The cost method and equity method long-term equity investment
Cash
dividend
Vote Initial Year-beginning Exchange rate Year-end
Name Proportion % change of the
proportion % amount balance change balance
current
period
The cost
method
HongKong
Victor Onward 100 100 2,411,282 22,266,157 -1,051,945 21,214,212
Shenzhen
Nanhua
Printing &
23,082,83
dyeing
Company 54.82 54.82 1 16,347,042 -772,301 15,574,741
Shenzhen
East Asia
Victor
Onward
Textile
Printing &
dyeing
Company 51 51 1,470,000 1,315,027 -62,127 1,252,900
Total 26,964,11 39,928,226 -1,886,373 38,041,853
3/133
深圳中冠纺织印染股份有限公司财务报表附注
2011 年 1 月 1 日至 2011 年 12 月 31 日
（本财务报表附注除特别注明外，均以人民币元列示）
Cash
dividend
Vote Initial Year-beginning Exchange rate Year-end
Name Proportion % change of the
proportion % amount balance change balance
current
period
3
(3)Provision for impairment on long-term equity investment
Name of Year-end
Year-beginning Increasein Decrease in the Chinges in
invested balance
company balance the current current period exchange tates
period
Shenzhen East 1,315,027 -62,127 1,252,900
Asia
4. Business income,Business cost
Items Amount of current Amount of Previous
period period
Key business income 70,200
Other business income 1,529,480 1,245,650
Total 1,529,480 1,315,850
Key business cost -519,626
Other business cost 478,671 473,887
Total 478,671 -45,739
（1） Key business-product
Amount of current period Amount of Previous period
Name of product
Revenue Cost Revenue Cost
Cloth bleaching, printing and
70,200 -519,626
dyeing
House lease 1,529,480 478,671 1,245,650 473,887
Total 1,529,480 478,671 1,315,850 -45,739
（2） Top five customers
Name Revenue Percentage of total business income
（%）
4/133
深圳中冠纺织印染股份有限公司财务报表附注
2011 年 1 月 1 日至 2011 年 12 月 31 日
（本财务报表附注除特别注明外，均以人民币元列示）
Name Revenue Percentage of total business income
（%）
Shenzhen Nanshan Saint Laurent
Wedding Photography 502,080 32.83
Jishunda Automobile drier
60,790 3.97
training Company
Chen Shen 46,279 3.03
Shenzhen Taihe Mechanical &
electrical equipment Co., ltd. 61,967 4.05
Di Weini 38,254 2.50
Total 709,370 46.38
5.Investment revenue
1.Investment revenue Source
Items Amount of current Amount of
period Previous period
Disposal trading financial assets to achieve return 257,537
13,965
investment
Total 13,965 257,537
The was no severs constrict on the collection of the investment earings.
6.Cash flow statement Supplementary Information of the parent company
Items Amount of Amount of
current period Previous
period
I. Adjusting net profit to cash flow from operating activities
-6,258,858 -3,610,120
Net profit
4,731,272 2,682,662
Add : Impairment loss provision of assets
Depreciation of fixed assets, oil and gas assets and
5,752 366,046
consumablebiological assets
52,418 54,620
Amortization of intanglble assets
-
Amortization of long-term deferred expenses
522 39,237
Loss on disposal of non-current assets
Loss from fixed assets discard
88,247
Loss of fair value fluctuation on assets
5/133
深圳中冠纺织印染股份有限公司财务报表附注
2011 年 1 月 1 日至 2011 年 12 月 31 日
（本财务报表附注除特别注明外，均以人民币元列示）
Items Amount of Amount of
current period Previous
period
1,089,583 829,638
Financial cost
-13,965 -257,537
Loss on investment
-
Decrease of deferred income tax assets
-31,783 -82,685
Increase of deferred income tax assets
Decrease of inventories 14,945
Decrease of operating receivable 2,644,395 4,374,718
Increase of operating receivables -3,418,774 -3,669,313
Other -1,507,307
Net cash flows arising from operating activities -1,111,191 -765,096
II. Significant investment and financing activities that withoutcash flows
Liability transfer to capital
Convertible corporate bond due within 1 year
Finance leased fixed assets
III. Net increase of cash and cash equivalents
23,577,186
Ending balance of cash 21,483,163
24,960,502
Less: Beginning balance of cash 23,577,186
Add: Ending balance of cash
Less: Beginning balance of cash equivalents
Net increase of cash and cash equivalents -2,094,023 -1,383,316
1.Supplementary Information
1. Non–operating gain and loss statement of this year
Items Amount of Amount of Notes
current period Previous
period
Gain/loss form disposal of non-current assets -522 -39,237
Tax rebate or derate approved by goingbeyond the
authority . Tax rebate or derate without official approval
document. Incidental tax rebate or derate.
6/133
深圳中冠纺织印染股份有限公司财务报表附注
2011 年 1 月 1 日至 2011 年 12 月 31 日
（本财务报表附注除特别注明外，均以人民币元列示）
Items Amount of Amount of Notes
current period Previous
period
Govemment Grants accrued into current profit & loss
List into ― the fund occupation expensecharged on
non-financial enterprise‖, subordinate to the accounting
items ― Gurrent profit & loss‖
Earning arising from identifiable fairvalue of net assets of
investees, which should be enjoyed when costs (which are
obtained by the enterprise) invested in subsidiary
companies, pool companies and joint ventures, is less than
the obtained investment
Non-currency asset exchange profit & loss
Profit & loss arising from entrusting thethird party to invest
or manage assets
Provision for asset impairment withdrawndue to force
majeure (e.g.natural disaster)
Profit & loss arising from debt recombination
Expenses for enterprise recombination
Profit & loss that exceed the fair value,arising from
transaction with unfair transaction price
Net profit & loss during term beginningtomerger date of the
subsidiaries arising form business merger under same
control
Profit & loss arising from the probableevents irrelevant to
normal operating business of the company
Except the effective hedge business related to the normal
operation business of the Company, the profit and loss in the
changes of fair values caused by the holding of tradable
financial assets and tradable financial liabilities as well as 13,965 257,537
the investment returns in disposal of tradable financial
assets, tradable financial liabilities and saleable financial
assets
Single impairment test for impairment of receivables
7/133
深圳中冠纺织印染股份有限公司财务报表附注
2011 年 1 月 1 日至 2011 年 12 月 31 日
（本财务报表附注除特别注明外，均以人民币元列示）
Items Amount of Amount of Notes
current period Previous
period
transferred back to preparation
Profit & loss obtained from loan for outwards entrust
Profit & loss arising from change of fairvalue of
investment-based real estate where subsequent
Measurement is conducted by using the fair value mode
Impact on the current profit & loss causedby one-off
adjustment conducted on the current profit & loss
according to requirements stipulated by taxation
/accounting laws and regulations
Entrusting earning arising from the entrusted operation.
Except the above items, other non-operating eqarning and
741 38,860
expenditure
Other profit & loss items confirming tothedefinition of
nonrecurring profit & loss
Subtotal 14,184 257,160
Amount of influence of income tax
Amount of influence of minority interests -18,660
Total 14,184 238,500
2.Return on net assets and earnings per share
Earnings per share（RMB）
Profit of the report period Return on net assets . Weighted（%） Basic earnings per Diluted gains per
share share
Net profit attributable to
shareholder of parent -12.93 -0.10 -0.10
company
Net profit attributable to the
parent company
-12.94 -0.10 -0.10
shareholders after deducting
of non-recurring gain/loss.
8/133
深圳中冠纺织印染股份有限公司财务报表附注
2011 年 1 月 1 日至 2011 年 12 月 31 日
（本财务报表附注除特别注明外，均以人民币元列示）
XVI. The approval of financial reports
The report of the financial statements was approved by all directors of the board of directors
of the Company on April 20,2012.
Section X1. List of Documents Available for Inspection
1.Financial statements bearing the seal and signature of legal representative, financial controller
and the person in charge of the accounting organ.
2. Original of the Auditors Report carrying the seal of PricewaterhouseCoopers Zhongtian
Certified Public Accountants and the personal signatures of the C.P.A.
3.The original of all the Company's documents and the original manuscripts of announcements
publicly disclosed on the newspapers designated by China Securities Regulatory
Commission in the report period.
The Board of Directors of Shenzhen Victor Onward Textile Industrial Co., Ltd.
April 20, 2012
9/133
