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神州长城(000018)公告正文

ST中冠B:2012年年度报告(英文版)

公告日期:2013-04-23

                                 深圳中冠纺织印染股份有限公司 2012 年度报告全文
         深圳中冠纺织印染股份有限公司Shenzhen Victor Onward Textile Industrial Co., Ltd.
                2012 Annual Report
                    April 2013
                                                                深圳中冠纺织印染股份有限公司 2012 年度报告全文
            I. Important Notice, Table of Contents and Definitions
    The Board of Directors ,Supervisory Committee, all directors, supervisors and senior executives of theCompany hereby guarantees that there are no misstatement, misleading representation or important omissions inthis report and shall assume joint and several liability for the authenticity, accuracy and completeness of thecontents hereof.
    Mr.Hu Yongfeng, The Company leader, Mr. Zhang Jinliang, Chief financial officer and the Mr..RenChangzheng, the person in charge of the accounting department (the person in charge of the accounting )herebyconfirm the authenticity and completeness of the financial report enclosed in this annual report.
    All the directors attended the board meeting for reviewing the Annual Report.
    The Company has no plan of cash dividends carried out, bonus issued and capitalizing of common reserveseither.
    This report is written respectively in Chinese and in English. In the event of any discrepancy between thetwo above-mentioned versions,the Chinese version shall prevail.
                                                                 深圳中冠纺织印染股份有限公司 2012 年度报告全文
                                         Table of Contents2012 Annual ReportI..Important Notice, Table of contents and DefinitionsII. Basic Information of the CompanyIII. Summary of Accounting Highlights and Business HighlightsIV. Report of the Board of DirectorsV. Important EventsVI. Change of share capital and shareholding of Principal ShareholdersVII. Information about Directors, Supervisors and Senior ExecutivesVIII. Administrative structureIX. Internal ControlX. Financial ReportXI. Documents available for inspection
                                                               深圳中冠纺织印染股份有限公司 2012 年度报告全文
                                            Definition
                                   Refers
             Terms to be defined                                           Definition
                                     to
                                   Refers
    Company/The Company/                        Shenzhen Victor Onward Textile Industrial Co., Ltd.
                                     to
                                   Refers
    Company Law                                 Company Law of the People‘s Republic of China
                                     to
                                   Refers
    Securities Law                              Securities Law of the People‘s Republic of China
                                     to
                                   Refers
    ―CSRC‖                                    China Securities Regulatory Commission
                                     to
                                                            深圳中冠纺织印染股份有限公司 2012 年度报告全文
                                       Indication of major risks
    Information Disclosure media appointed by the Company are: Securities Times, Hong Kong CommercialDaily and Juchao Website (www.cninfo.com.cn),Investors are advised to pay attention to investment risks.
                                                                           深圳中冠纺织印染股份有限公司 2012 年度报告全文II. Basic Information of the Company1. Company Information
                                ST Shen Victor Onward A,
    Stock abbreviation                                                     Stock code:               000018、200018
                                ST Shen Victor Onward BStock exchange for
                                Shenzhen Stock Exchangelisting:
    Name in Chinese                 深圳中冠纺织印染股份有限公司
    Chinese Abbreviation            中冠
    English name (If any)           Shenzhen Victor Onward Textile Industrial Co., Ltd
    English abbreviation (If any)   VICTOR ONWARD
    Legal Representative            Hu Yongfeng
    Registered address              26 Kuipeng Road, Kuiyong Town, Longgang District, ShenzhenPostal code of the Registered
                                518119Address
    Office Address                  26 Kuipeng Road, Kuiyong Town, Longgang District, ShenzhenPostal code of the office
                                518119address
    Internet Web Site               http://www.chinaszvo.com
    E-mail                          szvo@chinaszvo.com2. Contact person and contact manner
                                                        Board secretary                 Securities affairs Representative
    Name                                        Zhang Jinliang                            Wu Xia
                                            Room 1308, Hualiang Building, No.2008 Room 1308, Hualiang Building, No.2008Contact address
                                            Shennan Zhong Road, Shenzhen              Shennan Zhong Road, Shenzhen
    Tel                                         (755)83668425                           (755)83667895
    Fax                                         (755)83668427                           (755)83668427
    E-mail                                      zhangjl@udcgroup.com                      wux@udcgroup.com3. Information disclosure and placed
                                                                                  深圳中冠纺织印染股份有限公司 2012 年度报告全文Newspapers selected by the Company for
                                                       Securities Times and Hongkong Commercial Daily.information disclosureInternet website designated by CSRC for
                                                       http: // www.cninfo. com. cnpublishing the Annual report of the CompanyThe place where the Annual report is prepared and
                                                       Room 1308, Hualiang Building, No.2008 Shennan Zhong Road, Shenzhenplaced4.Changes in Registration
                                                                   Number of
                              Date of              Authority     Business License    Taxation                  Organization
                            Registration         Registered with of Enterprise as Registration No.:               Code
                                                                  Legal Person
    Initial registration     April 1, 1984          Shenzhen              440301501131182      440301618801483   61880148=3Registration at the
    end of the reporting November 9, 1991           Shenzhen              440301501131182      440301618801483   61880148=3periodChanges in principal business activities
                                                No Changessince listing (if any)Changes is the controlling shareholder in
                                                No Changesthe past (is any)V. Other Relevant InformationCPAs engaged
    Name of the CPAs                         Shinewing Certified Public Accountants
    Office address:                         10/F,A Unit, Lianhe Plaza, Futian District, Shenzhen, ChinaNames of the Certified Public
                                         Zhang Weijian, Xia WeiAccountants as the signatoriesThe sponsor performing persist ant supervision duties engaged by the Company in the reporting period.□ Applicable√ Not applicableThe Financial advisor performing persist ant supervision duties engaged by the Company in the reporting period□ Applicable√ Not applicableIII. Summary of Accounting Highlights and Business Highlights
                                                                             深圳中冠纺织印染股份有限公司 2012 年度报告全文I.Summary of accounting /Financial DataMay the Company make retroactive adjustment or restatement of the accounting data of the previous years due tochange of the accounting policy and correction of accounting errors.□ Yes √ No
                                                                                       Changed over last year
                                             2012                    2011                                             2010
                                                                                              (%)
    Operating Gross income(RMB)                11,095,669.00            9,850,484.00                     12.64%          9,351,110.00Net profit attributable to the
    shareholders of the listed company             -247,331.00          -17,361,593.00                   -98.58%           4,102,924.00(RMB)Net profit after deducting ofnon-recurring gain/loss attributable
                                                300,041.00          -17,375,777.00                 -101.73%            3,864,424.00to the shareholders of listedcompany(RMB)Cash flow generated by business
                                               -384,418.00            4,202,430.00                 -109.15%             237,582.00operation, net(RMB)Basic earning per
                                                         0                      -0.1                   -100%                   0.02share(RMB/Share)Diluted gains per
                                                         0                      -0.1                   -100%                   0.02share(RMB/Share)(RMB/Share)
    Net asset earning ratio(%)                         -0.21%                 -12.93%                    12.72%                 2.8%
                                            End of                  End of             Changed over last            End Of
                                             2012                    2011                year(%)                  2010
    Gross assets(RMB)                         172,002,557.00          172,238,794.00                     -0.14%       195,732,419.00Shareholders‘ equity attributable to
    shareholders of the listed company          118,852,391.00          119,047,096.00                     -0.16%       142,929,499.00(RMB)(II)The differences between domestic and international accounting standards1.Simultaneously pursuant to both Chinese accounting standards and international accounting standards disclosedin the financial reports of differences in net income and net assets.
                                                                                                                        Unit:RMB
                                   Net profit attributable to the shareholders Net Assets attributable to                      the
                                             of the listed company             shareholders of the listed company
                                    Amount in the             Amount in the        End of the reporting         Beginning of the
                                   reporting period           previous period            period                 reporting period
                                                                         深圳中冠纺织印染股份有限公司 2012 年度报告全文
    According to CAS                      -247,331.00            -17,361,593.00           118,852,391.00        119,047,096.00Items and amount adjusted according to CAS and IASSwitch back the part ofHong Kong house
                                       110,363.00                 113,086.00            -5,298,751.00         -6,626,459.00property assessment inaccordance with IASPursuant to overseas
                                      -136,968.00            -17,248,507.00           113,553,640.00        -112,420,637.00accounting standards2. Difference in Net profit and net Assets in the Financial Report as Disclosed Respectively according to theAccounting standards Outside Mainland China and the Chinese Accounting Standards.
                                                                                                                    Unit:RMB
                                Net profit attributable to the shareholders             Net Assets attributable to the
                                          of the listed company                      shareholders of the listed company
                                 Amount in the           Amount in the            End of the reporting    Beginning of the
                                reporting period         previous period                period            reporting period
    According to CAS                        -247,331.00              -17,361,593.00         118,852,391.00         119,047,096.00Items and amount adjusted according to CAS and IASSwitch back the part of HongKong house property
                                         110,363.00                 113,086.00            -5,298,751.00         -6,626,459.00assessment in accordance withIASPursuant to overseas
                                        -136,968.00              -17,248,507.00         113,553,640.00        -112,420,637.00accounting standards3.Note to the Difference in the Accounting Data based on the Accounting Standards of CAS and IAS.The influence of appreciation through appraisal of workshop and 2 parking spaces in Hong Kong in 1992.(III)Items and amount of deducted non-current gains and losses
                                                                                                                    Unit:RMB
                  Items                     Amount (2012)        Amount (2011)        Amount(2010)             NotesNon-current asset disposalgain/loss(including the write-off part
                                                      5,174.00            -522.00           -39,237.00for which assets impairment provisionis made)
    Except the effective hedge business                   6,045.00          13,965.00          257,537.00
                                                                  深圳中冠纺织印染股份有限公司 2012 年度报告全文related to the normal operationbusiness of the Company, the profitand loss in the changes of fair valuescaused by the holding of tradablefinancial assets and tradable financialliabilities as well as the investmentreturns in disposal of tradablefinancial assets, tradable financialliabilities and saleable financial assetsOther non-operating income and
    expenditure beside for the above             -558,591.00            741.00         38,860.00itemsAmount of influence of minority
                                                                                   18,660.00interests(After tax)
    Total                                        -547,372.00         14,184.00        238,500.00                     --For the Company‘s non-recurring gain/loss items as defined in the Explanatory Announcement No.1 oninformation disclosure for Companies Offering their Securities to the Public-Non-recurring Gains and Losses andits non-recurring gain/loss items as illustrated in the Explanatory Announcement No.1 on information Disclosurefor Companies offering their securities to the public-non-recurring Gains and losses which have been defined asrecurring gains and losses, it is necessary to explain the reason.□ Applicable√ Not applicable
                                   IV. Report of the Board of DirectorsI. General
    In the report period, the printing and dyeing mill of the Company in Shenzhen continued production suspensewhile the parent company and five subsidiaries continued the suspension of printing and dyeing business due tothe production suspense of the printing and dyeing mill. The parent company, Nanhua Company and Hong KongCompany 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 theindustry, the capital increase was not completed. In the report year, the income from house rent was the main partof net inflow of cash and the source of income from main operation.
                                                                    深圳中冠纺织印染股份有限公司 2012 年度报告全文II. Analysis on principal Business1.GeneralIn 2012, the textile, printing and dyeing business of the head office and controlled subsidiaries of the Company didnot recover and continued to be suspended for rectification. The Company leased its idle properties and carried outdomestic trade of textile products on a small scale.
    Progress of development strategy and operation plans in this period that are disclosed by the company in theprevious annual reports.
      The Company plans to invest in Nanjing East Asia Textile Printing and Dyeing Co., Ltd. with part ofmachinery and equipment, Due to the reason on the side of the other party of joint venture and change of industryprospect, the replenishment cannot be fulfilled and need court proceedings.Reasons for difference of actual operation performance has 20% lower or higher than profit forecast of the Yeardisclosed□ Applicable√ Not applicable2. RevenueNotes:
       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 2012, the total income from main operation was RMB 11.09 million, including rent income was RMB 9.82
    million , Textile trade income was RMB 1.27 million.Is the income from sales in kind greater than the service income?□ Yes √ NoSignificant orders in hand□ Applicable√ Not applicableSignificant change in or adjustment of the products or services in the reporting period:□ Applicable√ Not applicableMain customers
    Total sales amount to top 5 customers (RMB)                                                             9,364,596.00Proportion of sales to top 5 customers in the
                                                                                                              84.4%annual sales(%)Information of the Company‘s top 5 customers
                                                                              深圳中冠纺织印染股份有限公司 2012 年度报告全文√ Applicable □ Not applicable
    No                          Name                              Amount of sales                        Proportion(%)
           Shenzhen Jinrongyuan Development Co.,
    1                                                                        5,640,000.00                                 50.83%
           Ltd.
    2      Zhejiang Helan Industry Co., Ltd.                                 1,266,777.00                                 11.42%
    3      SCSExpress International Limited                                   996,960.00                                   8.99%
    4      CVA HOLDING                                                        860,859.00                                   7.76%
           Shenzhen Hebainian Investment
    5                                                                         600,000.00                                   5.41%
           Development Co., Ltd.
    Total                         ——                                         9,364,596.00                                  84.4%3.CostsClassification of sectors
                                                                                                                        Unit:RMB
                                                        2012                                  2011
    Classification                                              Proportion in                          Proportion in Increase/Decre
                         Items
    of sectors                               Amount             operation         Amount            operation costs    ase(%)
                                                                costs(5(                                 (%Textile
                                          1,248,550.00             23.06%                   0.00              0%IndustryLeasing
                                          4,164,806.00             76.94%       4,269,140.00               100%          -2.44%IndustryClassification of products
                                                                                                                        Unit:RMB
                                                        2012                                  2011Classification
    of products                                                  Proportion in                         Proportion in Increase/Decre
                         Items
                                            Amount             operation         Amount              operation       ase(%)
                                                               costs(%)                              costs(%)
    Textile                                   1,248,550.00             23.06%                                     0%
    Lease                                     4,164,806.00             76.94%       4,269,140.00               100%          -2.44%NotesPrincipal suppliers
    Total sales volume of top 5 clients (RMB)                                                                                   0.00Percentage of total sales volume of top 5 clients in total
                                                                                                                             0%annual sales volume (%)
                                                                    深圳中冠纺织印染股份有限公司 2012 年度报告全文Information about the top 5 suppliers□ Applicable√ Not applicable3.Expenses
    The financial expenses for 2012 were RMB - 444,174, which decreased by RMB 760,375 and 240.47% overthose for 2011 (RMB 316,201) mainly due to deposit interest income and exchange gains and losses.5.R& D ExpensesN/A.6.Cash Flow
                                                                                                           Unit:RMB
             Items                      2012                          2011                Increase/Decrease(%)Subtotal of cash flow
    received from operation                    13,498,118.00                15,549,000.00                     -13.19%activitiesSubtotal of cash flow paid
                                          13,882,536.00                 11,346,570.00                      22.35%for operating activitiesNet cash flow arising from
                                             -384,418.00                 4,202,430.00                    -109.15%operating activitiesSubtotal of investment
                                                30,000.00                    106,751.00                     -71.9%activity cash inflowsSubtotal of investment
                                               690,127.00                     18,535.00                 3,623.37%activity cash outflowsNet cash flow arising from
                                             -660,127.00                      88,216.00                  -848.31%investment activitiesSubtotal of fund raising
                                               126,343.00                    129,462.00                     -2.41%activity cash outflowsNet cash flow arising from
                                             -126,343.00                  -129,462.00                       -2.41%raising activitiesNet increase in cash and
                                           -1,172,054.00                 1,612,703.00                    -172.68%cash equivalentsNotes to the year-on-year change of the relevant data by over 30%√Applicable □Not applicable
    Net cash flows from operating activities were RMB -384,418, which decreased by 109.15% over theprevious year (RMB 4,202,430) mainly due to receipt of bills receivable of RMB 1.5 million as payment forgoods in the current year and no recovery of house rent for the previous year in arrears in the current year (which
                                                                    深圳中冠纺织印染股份有限公司 2012 年度报告全文occurred to Nanhua in 2011). Net cash flows from investing activities were RMB - 660,127, which decreased by848.31% over the previous year (RMB 88,216)mainly due to the Company's purchase of fixed assets in thecurrent year.Notes to the big difference between cash flow from operating activities and net profit in the reporting year□ Applicable√ Not applicableIII. Composition of principal businesses
                                                                                                               Unit:RMB
                                                                                     Increase/decrea    Increase/decrea
                                                                 Increase/decrea
                                                                                      se of principal     se of gross
                                                                 se of reverse in
                                                                                       business cost    profit rate over
                    Operating                       Gross profit    the same
                                  operating costs                                     over the same        the same
                     revenue                          rate(%)     period of the
                                                                                         period of       period of the
                                                                    previous
                                                                                      previous year      previous year
                                                                     year(%)
                                                                                            (%)               (%)IndustryTextile
                   1,266,777.00     1,248,550.00            1.44%                                                1.44%Industry
    Lease Industry     9,828,892.00     4,164,806.00          57.63%            -0.22%           -2.44%              0.98%ProductSales of
    viscose staple     1,266,777.00     1,248,550.00            1.44%                                                1.44%fiber
    Rent               9,828,892.00     4,164,806.00          57.63%            -0.22%           -2.44%              0.98%District
    Domestic           9,482,107.00     4,261,720.00          55.06%             17.5%           37.86%             -6.65%
    Hong Kong          1,613,562.00     1,151,636.00          28.63%            -9.35%           -2.41%             -5.08%Under the circumstance that the statistic specifications for the Company‘s principal business data experiencedadjustment in the reporting period, the principal business data upon adjustment of the statistic specifications at theend of the reporting period in the latest year.□ Applicable√ Not applicableIV. Analysis on Assets and Liabilities1.Significant Change in assets
                                                                                                               Unit:RMB
                                                                            深圳中冠纺织印染股份有限公司 2012 年度报告全文
                         End of 2012                    End of 2011              Proportio
                                                                                     n
                                  Proportion in                  Proportion in
                                                                                 increase/d      Notes to the significant change
                     Amount          the total      Amount          the total
                                                                                  ecrease
                                     assets(%)                      assets(%)
                                                                                    (%)
                   52,227,262.0                   53,399,316.0
    Monetary fund                          30.36%                             31% -0.64%
                              0                              0Accounts
                    744,712.00           0.43%     744,712.00           0.43%            0%receivable
    Inventories         101,536.00           0.06%     162,457.00           0.09% -0.03%Investment
                   31,041,484.0                   34,373,451.0
    based real                             18.05%                         19.96% -1.91%
                              0                              0estateLong-term
                   65,784,312.0                   63,192,614.0
    equity                                 38.25%                         36.69%       1.56%
                              0                              0investment
                   12,416,459.0                   12,070,406.0
    Fixed assets                             7.22%                          7.01%      0.21%
                              0                              0
    Trading                                                                                       Decrease due to the Company’
                                                    68,900.00           0.04%
    financial assets                                                                               sales of stocks it held
                                                                                         In the report year, the sales of
    Bill receivable 1,500,000.00             0.87%                                     0.87% viscose staple fiber were settled
                                                                                         by using bills.
                                                                                     Increase due to uncompleted
                                                                                     prepayment of decoration
    Prepayments       176,443.00            0.1%      27,548.00           0.02% -0.08% expenses by Victor Onward Hong
                                                                                     Kong, a subsidiary of the
                                                                                     Company, in the report year.
                                                                                     Decrease due to provision for
    Inventories         101,536.00           0.06%     162,457.00           0.09% -0.03% diminution in value of inventories
                                                                                     in the report year.2.Significant Change in Liabilities
                                                                                                                         Unit:RMB
                              2012                           2011             Proporti
                                                                                 on
                                  Proportion                     Proportion            Notes to the significant change
                     Amount                         Amount                    increase
                                  in the total                   in the total
                                                                              /decreas
                                                                     深圳中冠纺织印染股份有限公司 2012 年度报告全文
                                   assets (%)                assets (%)     e(%)Long-term
                1,033,936.00            0.6% 1,160,011.00        0.67% -0.07%loan
                                                                                  Due to non-payment of unpaidEmployees‘
                  766,680.00           0.45%    590,220.00       0.34%      0.11% remuneration for the board ofwage payable
                                                                                  directors at the end of the period.3.Assets and liabilities Measured with Fair value
                                                                                                            Unit:RMB
                                 Gain/loss on Cumulative
                Amount at                                   Impairment Purchased Sold amount
                                   fair value  fair value
                                                           provisions in amount in       in the          Amount at
    Item               year          change in the  change
                                                           the reporting the reporting reporting
                                   reporting recorded into                                                year end
                beginning                                     period        period      period
                                     period      equityFinancialassets1.Financialassetsmeasured byfair value,and itschanges are
    reckoned in       68,900.00        -68,900.00currentgains/losses(not includingderivativefinancialasset)3.Financialassets
                 703,055.00                      48,487.00                                                751,542.00available forsalesAforementio
                 771,955.00        -68,900.00    48,487.00           0.00                                 751,542.00ned totalFinancial
                          0.00           0.00         0.00           0.00                                        0.00liabilitiesDid great change take place in measurement of the principal assets in the reporting period ?□ Yes √ No
                                                                         深圳中冠纺织印染股份有限公司 2012 年度报告全文V. Analysis on core CompetitivenessN/A.VI. Analysis on investment Status1. External Equity investment(1)External investment
                                                   External investment
    Investment Amount in 2012(RMB)        Investment Amount in 2011(RMB)                             Change rate
                0.00                                      0.00                                       0.00
                                              Particulars of investees
                                                                                     Proportion in the investees‘ equity
             Companies                             Principal business
                                                                                                     (%)
    Zhejiang Union Hangzhou Bay
                                                       Real estate                                   25%
        Chuangye Co., Ltd.(2)Holding of the equity in financial enterprises
                           Number          Sharehol                  Sharehol
                                                        Number                     Book
                          of shares           ding                      ding
                                                       of shares                  balance Gain.
                            held at        proportio                 proportio
                  Initial                               held at                    at the  loss of
                              the           n at the                  n at the                               Sauce of
    Company Company Investme                                the end                    end of    the    Accounti
                          beginnin         beginnin                    end of                                  the
    Name     type   nt cost                                 of the                     the   reporting ng items
                           g of the         g of the                     the                                  shares
                 (RMB)                                 reporting                 reporting period
                          reporting        reporting                 reporting
                                                       period(sh                   period (RMB)
                            period           period                  period(%
                                                         ares)                    (RMB)
                           (shares)           (%)                         )
    Total                      0.00        0      --                 0       --           0.00        0.00      --      --(3)Investment in Securities
                                    Number Shareho           Number      Shareho      Book
                                        of    lding             of         lding     balance      Gain.
                            Initial
                                     shares proporti          shares     proporti     at the     loss of
                   Short investm                                                                         Account Sauce
    Security Security                    held at on at the        held at    on at the    end of       the
                  form of     ent                                                                           ing  of the
    category code                          the beginnin          the end      end of        the     reportin
                  security cost(RM                                                                        items shares
                                    beginnin g of the         of the        the      reportin   g period
                              B)
                                    g of the reportin        reportin    reportin    g period   (RMB)
                                    reportin    g            g period        g       (RMB)
                                                                               深圳中冠纺织印染股份有限公司 2012 年度报告全文
                                              g     period( (shares) period(
                                           period(s   %)               %)
                                            hares)
                     Winovel 31,000.0                                                               -11,640.
    Stock    601558                               2,000            0%          0           0%    0.00                   Buy
                     Wind           0                                                                    00
                     Semir   37,900.0                                                               -18,817.
    Stock    002563                               1,000            0%          0           0%    0.00                   Buy
                     Garment        0                                                                     00
                Boya
                Bio-phar
    Stock    300294                     0.00           0           0%          0           0%    0.00 8,755.00          Buy
                maceutic
                al
    Stock    002662 WKW                 0.00           0           0%          0           0%    0.00    568.00         BuyOther securities investment
                                    0.00           0      --               0      --         0.00      0.00    --      --held at the end of the period
                                68,900.0                                                            -21,134.
    Total                                         3,000       --               0      --         0.00              --      --
                                       0                                                                  00Notes to holding of the equity in other listed companies2.Entrusted Financing , investment in derivative products and entrusted loan(1)Entrusted Financing
                                                                                                                Unit:RMB‘0000
                                                       Amount
          Amount     Starting    Expiry    Method                                      Has the
                                                         of the      Actual
            of the    date of    date of      for                                     statutory Provisio
                                                       principa     income Income                         Related
    Trustee‘ entruste   entruste   entruste   determi                                    procedu n for                Associat
                                                            l        in the actually                     transacti
    s Name        d          d          d      ning the                                   res been impairm               ion
                                                       actually     reportin obtained                    on(Y.N)
          financin   financin   financin   remuner                                      gone      ent
                                                       recovere     g period
              g          g          g        ation                                    through
                                                           d
    Total            0      --         --         --                0          0            0   --            0    --      --Overdue unreceived principal and
                                                                                                                            0accumulated earnings amountNotes(2)Investment in derivativesPosition of derivatives invested at the End of the Report Period□ Applicable√ Not applicableNotes:
                                                                        深圳中冠纺织印染股份有限公司 2012 年度报告全文(3)Entrusted loan
                                                                                                      Unit:RMB‘0000
                                                                                                   Countermeas
                                                                                                   ures against
                                                                                       Exhibition the risks of
                                                                           Application
                     Is it a                                                             period,    exhibition
    Prospective                                                Guarantor or of the loan
                    related      Amount         Interest rate                          overdue or    period,
    borrower                                                   collateral    by the
                     party                                                             contentious   overdue
                                                                            borrower
                                                                                         matter     period or
                                                                                                   contentious
                                                                                                      matter
    Total                  --                   0        --            --             --            --           --Notes3.Application of the Raised capital(1)General application of the raised capital
                                                                                                        Unit:RMB‘0000
    Total amount of the raised capital                                                                                 0
    Total raised capital invested in the report period                                                                 0
    Total accumulative raised capital invested                                                                         0Amount of raised capital of which the purpose
                                                                                                                   0was changed in the report periodAccumulative amount of raised capital of
                                                                                                                   0which the purpose has been changedProportion of raised capital of which the
                                                                                                                  0%purpose has been changed (%)
                                             Notes to use of raised capital(2)Promised projects of raised capital
                                                                                                      Unit:RMB‘0000
                     Project Total     Total Amount Accumu Investm Date Benefit Has the Has any
    Committed
                    changed raised investm invested lated        ent   when realized predicte materialinvestment projects
                    (includi capital ent after in the amount progress the      in the d result change
    and investment
                       ng    invested adjustm reportin invested ended project reportin   be     taken
                                                                  深圳中冠纺织印染股份有限公司 2012 年度报告全文
                        partial  as    ent (1) g period at the    the      has g period realized place in
                       change) committ                  end of reportin reached                  feasibili
                                 ed                      the       g       the                      ty
                                                       reportin period( predicte
                                                           g    %)(3)=(     d
                                                       period(2 2)(1) applicab
                                                           )            le statusCommitted investment projectsSubtotal of
    committed                 --            0      0        0         0    --        --          0   --      --investment projectsInvestment of excessive raised capital Investment of excessive raised capitalRepayment of bank
                          --            0      0        0         0         0%   --     --       --      --loan(If any)Replenishing the
    working capital (If       --            0      0        0         0         0%   --     --       --      --any)Subtotal of intended
    investment with           --            0      0        0         0    --        --          0   --      --unbooked proceeds
    Total                     --            0      0        0         0    --        --          0   --      --Analysis ForFailure To ReachThe Planned
                   .Schedule AndEarnings(SpecificProjects)Notes to significantchange in feasibility .of the projectmount, application Not applicableand application
    progress of the    .unbooked proceedsAbout the change of Not applicablethe implementationsite of the projects
                     .invested with theproceeds
    Adjustment of the      Not applicable
                                                                   深圳中冠纺织印染股份有限公司 2012 年度报告全文implementationway of investment
                      .funded by raisedcapital
    About the initial    Not applicableinvestment in theprojects planned tobe invested with the .proceeds and thereplacement
    Using the idle     Not applicableproceeds tosupplement the
                   .working capital ontemporary basis
    Balance of the      Not applicableproceeds in processof project
                    .implementation andthe causeAbout application
    and status of the     .proceeds unusedProblems existingin application of theproceeds and the
                      .informationdisclosure or otherissues(3)Change of the Projects invested with the Raised Capital
                                                                                                       Unit:RMB;0000
                                                                           Date
                       Total                  Accumula                                                      Has any
                                                           Investmen     when the
          Correspon raised         Amount         ted                                                       material
                                                           t progress     project    Benefit
             ding     capital      actually     amount                                            Has the    change
    Projects                                                  ended the        has    realized in
           projects invested       invested    invested                                          predicted    taken
    after                                                     reporting    reached       the
              for     in the         in the   at the end                                         result be place in
    change                                                    period(%)        the     reporting
          undertakin projects     reporting      of the                                           realized feasibility
                                                           (3)=(2)/(1   predicted period
               g       after        period    reporting                                                     after the
                                                                )       applicable
                    change(1)                 period(2)                                                      change
                                                                           status
                                                                                   深圳中冠纺织印染股份有限公司 2012 年度报告全文
    Total           --                0                  0             0       --             --               0      --          --Changing reason, decision
    procedure and statement of            .disclosure(In specific project)Situation about not coming up toschemed progress or expected
                                 .revenue and the reason(Inspecific project)Explanation on great changes of
    feasibility of project after    .changed4.Analysis on principal subsidiaries and Mutual Shareholding CompaniesParticulars about the principal subsidiaries and Mutual shareholding companies
                                          Leading
                          Sectors                               Total                     Operatin
    Company Company                           products Registere           Net assets Tumover          Net Profit
                          engaged                            assets(RM                    g profit
    Name     type                              and    d capital            (RMB)      (RMB)            (RMB)
                             in                                  B)                       (RMB)
                                          servicesHongKong
                         Textile          Textile        2,400,002 115,059,8 44,366,66 1,613,561 2,282,40 2,348,602.0
    Victor     Subsidiary
                         industry         trade          (HKD)       89.00      2.00       .00     9.00           0OnwardCo.Ltd
                                          Textile
    Nanhua             Textile                Printing       85,494,70 28,021,87 -17,950,1 6,647,443 380,128.
        Subsidiary                                                                                        380,128.00
    Company            industry               and            0(HKD)       7.00     42.00       .00      00
                                          dyeingParticulars about the principal subsidiaries and Mutual holding companiesAcquirement and disposal of subsidiaries in the Reporting period□ Applicable√ Not applicable5.Projects invested with the non-raised capital
                                                                                                                       Unit:RMB‘0000
                                                                            Amount
                                                                         accumulatively
                                             Amount invested in
        Name         Total investment                                   invested up to the     Project progress        Earnings
                                              the reporting year
                                                                       end of the reporting
                                                                                period
                                                                         深圳中冠纺织印染股份有限公司 2012 年度报告全文
    Total                                 0                     0                      0             --         --
                               Notes to the material projects invested with non-raised capitalVII. Special purpose principal under the control of the CompanyN/A.VIII. Development prospect
        The Company actively made exploration to seek breakthrough, organized relevant personnel to conductindustrial project feasibility study, tried to fix a development target and made great efforts to find a path suitablefor its industrial development.IX. Explanation of the Board of Directions Concerning the ― non-standard audit report‖ issued bythe CPAs firm for the reporting period.
        1.Basic information
    Shine Wing Certified Public Accountants issued unqualified auditor's report with paragraph of emphasizedmatters for the Company's financial statements for 2012 Basic information of emphasized matters: Since March2007, 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.,but its sustainable operation ability is still uncertain.
        (II) Basic opinions of certified public accountants on such matter:
    Shine Wing Certified Public Accountants accepted entrustment, completed the audit of the financialstatements of the Company for 2012 and issued unqualified auditor's report with paragraph of emphasized mattersfor the Company's financial statements for 2012. In accordance with No. 14 Rule for Preparation and Report ofInformation Disclosure by Companies Publicly Issuing Securities - Non-standard Unqualified Audit Opinions andTreatment of Matters Involved Therein, relevant notes are as follows:As noticed by Shine Wing Certified Public Accountants during audit, Since March 2007, Shenzhen VictorOnward Textile Industrial Co., Ltd. stopped production and dismissed most of workers. The company currentlyonly 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 byhouse property lease. It plans to invest in Nanjing East Asia Textile Printing and Dyeing Co., Ltd. with part ofmachinery and equipment in 2007, The investment plan has not been implemented, the proposed investment hasbeen idle equipment stored in the Victor Onward Company. On June 4, 2012, The Victor Onward Company hasinstituted court action at Jiangsu Province Higher People's Court, and asked to terminate the contracts andagreement on investment on Nanjing project. We believe that the sustainable operation ability of Shenzhen VictorOnward Textile Industrial Co., Ltd. is still uncertain, so I emphasized the situation in the audit reports and issuedunqualified auditor's report with paragraph of emphasized matters. The matters involved in highlighted statementdid not apparently violate Accounting Standards for Business Enterprises and regulations on relevant informationdisclosure standardization.
                                                                   深圳中冠纺织印染股份有限公司 2012 年度报告全文(III) The opinions of the board of directors, supervisory committee and management of theCompany on this matter:
      The board of directors, Supervisory Committee and managers believed that the printing and dyeing plant ofthe company had stopped operation or maintained daily operation by house leasing. .It plans to invest in NanjingEast Asia Textile Printing and Dyeing Co., Ltd. with part of machinery and equipment, Due to the reason on theside of the other party of joint venture and change of industry prospect. Partners disagree with our views in thereplenishment of the things, thus cooperation is difficult to continue. Although we sent our staff to Nanjing manytimes for negotiation, but failed to reach a consensus. Therefore, we decided the proceedings in the People'sCourt.(IV) Extent of influence of this matter on the Company:This event greatly impacted the production & operation activities and sustainable development of company, itmade company had the situation of implementing other special treatment which was stipulated in Shenzhen StockExchange Listing Rules , the stock of our company had been implemented for other special treatment. As theaudited net profits of the Company for 2011 and 2012 were negative, Shenzhen Stock Exchange will give specialtreatment to the stocks of the Company for the caution of delisting risk according to relevant regulations includingStock Listing Rules of Shenzhen Stock Exchange. The stocks of the Company will be subject to special treatmentfor caution of delisting risk after the disclosure of 2012 annual report. The Company stocks will be suspendedfrom April 24, 2013, The stocks of the Company will implement special treatment for delisting risk warning afterthe Company was restored for trading from April 24,2013.
    According to Stock Listing Rules of Shenzhen Stock Exchange, the listing of the stocks of the Company willbe suspended from the day of announcement of 2013 annual report if its audited net profit for 2013 is stillnegative. In case of failure to reverse loss according to the annual report for the latest period disclosed withinstatutory time limit, the stocks of the Company will face the risk of termination of listing.(V) The possibility of eliminating this matter and its influence:
    In order to try to have the caution of delisting risk revoked, the Company will make all efforts to enhanceoperating efficiency and increase return through various measures and take "reversing loss into profit" as thepriority target of production and operation for the year in 2013.(VI) The concrete measures of eliminating this matter and its influenceThe Company Holding a positive and prudent attitude, the company has been looking for a new business directionand an effective way to fight to reverse loss into profit in 2013.X. Explain change of the accounting policy, accounting estimate and measurement methods ascompared with the financial reporting of last year.N/A.XII. Explain change of the consolidation scope as compared with the financial reporting of lastyear.N/A.
                                                                   深圳中冠纺织印染股份有限公司 2012 年度报告全文XII. Explain change of the consolidation scope as compared with the financial reporting of lastyear.N/A.XIII. Dividend Distribution PreparationImplementation or adjustment of the Company‘s profit Distribution policy, Especially Cash Dividend DistributionPolicy in the Reporting Period.
      According to relevant regulations including the Notice of Further Implementing the Matters ConcerningDistribution of Cash Dividends by Listed Companies, the Notice of Seriously Satisfying Relevant Requirementsof the Notice of Further Implementing the Matters Concerning Distribution of Cash Dividends by ListedCompanies issued by Shenzhen Securities Regulatory Bureau (Shen Zheng Ju Gong Si Zi (2012) No. 43Document) and the Articles of Association of the Company, the 4th meeting of the sixth board of directors of theCompany held on August 14, 2012 examined and adopted the Company's Profit Distribution Policy and Planningfor Return to Shareholders in the Nest Three Years (2012-2014) and the Proposal for Revising Part of Clauses of theArticles of Association of the Company and revised the clauses of the Articles of Association of the Companyconcerning profit distribution. The revised profit distribution policy defined dividend distribution standards andproportion, increased the transparency and operability of profit distribution policy and protected the lawful rightsand interests of middle and small shareholders. The formulation of the Company's Profit Distribution Policy andPlanning for Return to Shareholders in the Next Three Years (2012-2014) improved the Company's decisionmaking and supervision mechanism for profit distribution and ensured return to shareholders. The said Articles ofAssociation and planning were examined and adopted by the first provisional shareholders' general meeting in2012 and implemented. When the Company formulated this planning, independent directors conducted effectivesupervision of the profit distribution plan of the Company and expressed independent opinions.Refer to Announcement that disclosed on Securities Times ,Hong Kong Commercial Daily and www.cninfo.com.cn respectively on August 16, 2012.Implementation or adjustment of the Company‘s profit Distribution policy, Especially Cash Dividend DistributionPolicy in the Reporting Period.The profit distribution preplan or proposal and the preplan or proposal of conversion of the capital reserve intoshare capital in the past three years(with the reporting period inclusive):(1) The company‘s annual profit distribution for 2010.As audited by Shinewing Certified Public Accountants, the total profit of the Company for 2010 isRMB2,326,231 , After deduction of minority gains and losses of RMB-1,731,989 and income tax expenses of-44,704, net profit is RMB4,102,924,the total year-end undistributed profit is - RMB -98,665,017. The Companyis neither to distribute profit nor to capitalize capital surplus for the current year.The company‘s annual profit distribution for 2011.As audited by Shinewing Certified Public Accountants, the total profit of the Company for 2011 is
                                                                     深圳中冠纺织印染股份有限公司 2012 年度报告全文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. TheCompany is neither to distribute profit nor to capitalize capital surplus for the current year.The company‘s annual profit distribution and the capital accumulation funds to increased capital stock for 2012.Profit distribution preplan for 2012:1 As audited by Shinewing Certified Public Accountants, the total profit of the Company for 2012 isRMB-289,200 , After deduction of minority gains and losses of RMB0 and income tax expenses of -41,869, netprofit is RMB-247,331,the total year-end undistributed profit is - RMB-116,273,941. The Company is neither todistribute profit nor to capitalize capital surplus for the current year.2. According to the decisions of the 6th meeting of the sixth board of directors of the Company held on April 19,2013, the Company will neither distribute profit nor capitalize capital surplus for 2012 and will use the profit tomake up the losses of the previous year.
    The above profit distribution preplan is to be submitted to 2012 annual shareholders' general meeting forexamination.3. The reason for no profit distribution for 2012, use of profit and relevant plan
    At present, the Company has no main operation and only leases some factory buildings. As of the end of thereport period, the profit available for distribution to shareholders was still negative. the Company will neitherdistribute profit nor capitalize capital surplus for 2012 and will use the profit to make up the losses of the previousyear.
    4. The independent opinions expressed by the independent directors of the Company on the profit distributionpreplan made by the board of directors for 2012
    In the opinion of the independent directors, the Profit Distribution Preplan for 2012 examined and adopted atthe board meeting of the Company was made based on fully considering the current conditions of the Company,complied with the Company's actual conditions and contributed to the Company's normal operation and thesafeguarding of shareholders' long-term interest. It also completely complied with relevant provisions of theArticles of Association of the Company and Accounting Regulations for Business Enterprises. The profitdistribution preplan of the Company for 2012 was approved. It was also approved to submit this preplan to 2012annual shareholders' general meeting of the Company for examination.
    Dividend distribution of the latest three years
                                                                                                            Unit:RMB
                                                             Net profit attributable to       Ratio in net profit
                                                              the over of the parent      attributable to the parent
                               Cash dividend (Including
            Year                                                 company in the                company in the
                                         Tax)
                                                              consolidated financial       consolidated financial
                                                                   statements                     statements
    2012                                                                       -247,331.00
    2011                                                                    -17,361,593.00
    2010                                                                      4,102,924.00
                                                                   深圳中冠纺织印染股份有限公司 2012 年度报告全文In the reporting period, both the Company‘s profit and the parent company‘s retained earnings were positivehowever not cash dividend distribution proposal has been put forward.□ Applicable√ Not applicableXIV. Social responsibility(I) Protecting shareholders' rights and interests1. The Company attached importance to reasonable investment return to investors especially middle and smallshareholders, formulated continuously stable profit distribution policy, revised the clauses of the Articles ofAssociation of the Company concerning profit distribution especially the policy for cash dividend distribution,defined dividend distribution standards and proportion, formulated Planning for Return to Shareholders from 2012to 2014 and fully safeguarded shareholders' lawful rights and interests.2. The Company perfected the mechanism for shareholders‘ general meeting, standardized the procedure ofconvening and holding shareholders' general meeting and its agenda and ensured middle and small shareholders'right of knowing facts about the Company, participation and voting.(II) Safeguarding employees' rights and interests1. The Company implemented the system of all employees signing labor contracts according to relevant provisionsof Labor Law and Labor Contract Law and formulated and unceasingly perfected the regulations on safeguardingemployees' rights and interests. It has sound remuneration appraisal system so as to ensure reasonable allocation ofremuneration to employees.2. Despite current production suspense, the Company has always adhered to the work policy of "safety first",regularly organized employees to study and unceasingly improved all safety systems to earnestly safeguardemployees' rights and interests.
    XV. Statement of such activities as reception, research, communication, interview in thereporting period
                                                                                           Discussion topics andReception time Reception place Way of reception Types of visitors Visitors received
                                                                                           provision of materials
                                                                                          Enquiry about the
    February 21,     BOD office of
                                    By phone          Individual        Investor          Company‘s operating
    2012              the Company
                                                                                          status
                                                                                          Enquiry about the
                 BOD office of
    May 7, 2012                         By phone          Individual        Investor          possibility of the
                 the Company
                                                                                          Company‘s delisting
                 BOD office of                                                            Enquiry about the
    July 4, 2012                        By phone          Individual        Investor
                 the Company                                                              company situation
                                                                                          Enquiry about the
    December 24,     BOD office of                                                            Company‘s whether the
                                    By phone          Individual        Investor
    2012             the Company                                                              Company has any plan
                                                                                          for reorganization
                                                                深圳中冠纺织印染股份有限公司 2012 年度报告全文
                                         V. Important EventsI. Major lawsuits and Arbitration affairs√ Applicable□ Not applicable
      Basic        Amount      Whether        Progress
                                                                          Judgment
    information of involved       comes to           of     Trial results               Disclosure Index of
                                                                         enforcement
    lawsuits(Arbitra (RMB‘0000     accrual      lawsuits(a and influence                   date    disclosure
                                                                           situation
      tion)          )      liability or not rbitration)On June 4,
    2012,       The
    company      hasinstituted courtaction against
    below      three
    companies      atJiangsuProvince HigherPeople's Court,and asked to
                                                                                                     Announceme
    terminate    the
                                                                                                     nt No.
    contracts    and
                                                                                                     2012-0614)agreements
                                                                                                     Securities
    signed      with                           The case
                                                                                                     Times , Hong
    Nanjing     East        4,792           No hasn‘t yet                               June 16, 2012
                                                                                                     Kong
    Asia      Textile                          been tried
                                                                                                     Commercial
    Printing       &
                                                                                                     Daily and
    Dyeing      Co.,
                                                                                                     www.cninfo.
    Ltd.,    Nanjing
                                                                                                     com.cn
    East        AsiaInvestment &DevelopmentGroup Co., Ltd.and Hong KongYaojunxing Co.,Ltd., who shallpayRMB47,922,902.92 to thecompany for the
                                                               深圳中冠纺织印染股份有限公司 2012 年度报告全文pecuniary lossof implicativecompensationand undertakethe costs oflitigation. The
    company     has
    received     theSu-Shang-Wai-Chu-Zi No.0002
    (2012)        of
    ―Notice      onIndictmentAcceptance andCollegial PanelAnnouncement‖
    issued        byJiangsuProvince HigherPeople's Courton June 14,2012.Query form media□ Applicable√ Not applicableIn the reporting year, the Company had no query from mediaII. Non—operation oriented Fund Occupancy by the Controlling Shareholder and/ or RelatedParties
                                 Amount at
                                              Amount     Total     Amount at
    Name of                            the                                                  Predicted
                                             increased repaid in   the end of                       Predicted
    sharehold                        beginning                                     Predicted amount to
          Occupanc                             in the     the          the                         repayment
    er or                 Cause     of the                                       way of be repaid
           y time                            reporting reporting    reporting                         time
    related                        reporting                                    repayment (RMB‘00
                                             period(R period        period(R                        (month)
    parties                        period(R                                                   00)
                                               MB )     (RMB)         MB )
                                   MB)
    Total                                    0           0         0           0     --              0     --Ratio of total value at
    per5iod-end in net assets of                                                                               0%period-end (%)
                                                                                             深圳中冠纺织印染股份有限公司 2012 年度报告全文III. Bankruptcy or Reorganization Related EventsN/A.IV. Assets Transactions1. Acquisition of Assets
                                                    Net profit
                                                                       Net profit          Proportio
                                               contributed to
                                                                    contributed to n of the
                                                the company
                                                                     the Company net profit
                                                     from the
                                                                     from the year contribut
    The other Assets       Transacti              acquisition date
                                                                     beginning to ed by the Is it a Connectivi
    party or acquisiti       on                   to the year end
                                                                     the year end          asset for related ty relations Disclosure              Disclosure
    eventual     on or      price(R Progress (RMB 0000)
                                                                     (RMB‘0000)              the       transact with the             date             index
    controlle transferre MB‘000                   (Applicable to
                                                                    (Applicable to Compan                 ion      other party
    r         d in        0)                            the
                                                                             the           y in the
                                                consolidation
                                                                     consolidation           total
                                                       of the
                                                                         of the             profit
                                               enterprises not
                                                                      enterprises)           (%)
                                                   under the )General on Acquisition of Assets2. Sales of Assets
                                             Net
                                            profit
                                           contribu
                                            ted to                 Proporti                              Connect
                                             the                    on of                                  ivity
                                           compan                  the net                               Relation Has all
                                                                                                                                 Has all
                                           y from                   profit                    Is it a     s with       the
                                                       Gain/los                                                                    the
    Other                          Transact     the                   contribu Pricing related                the       ownersh
                                                       s arising                                                                  credit
    party of                           ion     beginni                  ted by principl transacti             other      ip of the                          Disclos
            Assets    Date of                            from                                                                     /debt      Disclos
    the                              price    ng of                  the asset e for the on Is it a         party       assets                              ure
             sold      sale                              sales                                                                   involve ure date
    transacti                       (RMB‘0      the                    for the        asset     related (applica involve                                   index
                                                       (RMB‘0                                                                   d been
    on                            000) reportin                    compan          sold     transacti ble to         d been
                                                         000)                                                                    transferr
                                            g year                 y in the                    on          the       transferr
                                                                                                                                    ed
                                            to the                   total                               related        ed
                                           date of                  profit                               transacti
                                           sales of                  (%)                                   on)
                                           the asset
                                           (RMB‘0
                                             000)
                                                                           深圳中冠纺织印染股份有限公司 2012 年度报告全文Notes to the sales of assets:3. Enterprise ConsolidationN/A.V. Implementation of the Company‘s Equity Incentive plan and its influencesN/A.VI. Material related transactions1. Related transactions in connection with daily operation
                                      Principl                Amount       Proporti
                         Descript        e of                   of the     on in the
                                                Price of
                 Type of ion of        pricing                 related      amount Mode of
    Related Relation                                 related                                     Market Disclosu Disclosu
                 related related        of the                transacti      of the settleme
    parties  ship                                   transacti                                    price re date re index
                 parties transacti     related                   on         similar     nt
                                                   ons
                            ons       transacti               (RMB‘0      transacti
                                          on                    000)        on (%)
    Total                                    --          --                0         0%    --       --       --        --2. Related transactions conceding assets acquisition/sales
                                                          Estimat
                                   Principl     Book                               Way of      Income
                                                             ed
                        Descrip       e of      value                  Fair Assign Settlem       from
                                                            value
                Type of tion of    pricing     of the                market ment ent for          the            Disclos
    Related Relatio                                            of the                                       Disclos
                related related      of the   assigne                 value price    the       assigne             ure
    party nship                                              assigne                                       ure date
                 party transact     related   d assets               (RMB (RMB related         d assets           index
                                                          d assets
                          ion      transact    (RMB                  0000) 0000) transact       (RMB
                                                           (RMB
                                      ion     0000)                                  ion        0000)
                                                          0000)3. Important related transitions with joint investment
                                                                           Total assets
                         Pricing                                                        Net assets            Net profit
                                                   Principal Registered      of the
    Joint   Relationshi principle      Name of                                              of the               of the
                                                 business of capital of     investee
    investors      p     for the joint the investee                                         investee             investee
                                                 the investee the investee (RMB‘000
                       investment                                                         (RMB)                (RMB)
                                                                               0)
                                                                                深圳中冠纺织印染股份有限公司 2012 年度报告全文4.Current Associated rights of credit and liabilitiesDid there exist any non-operational related rights of credit and liabilities□Yes √ No
                                                                         Whether there Balance at the      Amount in
                                            Type of                                                                         Balance at the
                          Association                       Reason for     is the use of   beginning of         this
    Associated party                       claims and                                                                        end of period
                          relationship                      formation     non-operating      period       period(RMB‘
                                             debts                                                                          (RMB‘0000)
                                                                             capitals      (RMB‘0000)          0000)5.Other material related transactions
                       Related party                             Amount at the end of         Amount at the beginning
                                                                      period                        of periodAccount receivable
    Shenye Union(Hong Kong)Co., Ltd.                                                 299,428                              299,354Other Payable
    Union Development Gruop Co., Ltd.                                               24,748,412                        23,159,803
    Shenzhen Union Property Group Co., Ltd.                                            700,734                              700,734Relevant inquiry with the internet website for disclosing provisional report on material related transactions
                                                      Date of disclosing provisional       Description of the website for disclosingDescription of provisional announcement
                                                             announcement                         provisional announcementsVII. Important contracts and implementation1. Custody, contacting and leases(1)CustodyDescription of custodiesProjects that have brought about gains/losses to the company taking over 10% of the Company‘s total profit in thereporting period.□ Applicable√ Not applicable(2)ContractsDescription of contractsNoneProjects that have brought about gains/losses to the Company taking over 10% of the Company‘s total profit in thereporting period□ Applicable√ Not applicable
                                                                           深圳中冠纺织印染股份有限公司 2012 年度报告全文(3)LeasesDescription of leasesNoneProjects that have brought about gains/losses to the company taking over 10% of the Company‘s total profit in thereporting period□ Applicable√ Not applicable2.Guarantees
                                                                                                               Unit:RMB‘0000
                                     External Guarantee (Exclude controlled subsidiaries)
                                                                                                                      Guarante
                       Relevant                                                                                          e
                                                  Date of
                      disclosure                                                                           Complete      for
                                                 happening        Actual
    Name of the      date/No. of Amount of                                      Guarantee      Guarantee implemen associate
                                                  (Date of       mount of
    Company             the       Guarantee                                       type          term       tation       d
                                                  signing        guarantee
                      guaranteed                                                                            or not     parties
                                                agreement)
                        amount                                                                                        (Yes or
                                                                                                                        no)
                                   Guarantee of the Company for the controlling subsidiaries
                                                                                                                      Guarante
                      Relevant                                                                                           e
                                                  Date of                                                  Complete
                      disclosure                                                                                         for
    Name of the                    Amount        happening        Actual                                   implemen
                     date/No. of                                                Guarantee      Guarantee              associate
    Company                          of           (Date o       mount of                                   tation
                         the                                                        type         term                    d
    guaranteed                    guarantee      signing        guarantee                                    or
                      guaranteed                                                                                       parties
                                                agreement)                                                   not
                        amount                                                                                        (Yes or
                                                                                                                        no)Total of Company‘s guarantee(namely total of the large two aforementioned)Including:Description of the guarantee with complex method(1)Outward guarantee against law
                                                                                                               Unit:RMB‘0000(1)Outward guarantee against law
                                                                                                               Unit:RMB‘0000
                                                                    深圳中冠纺织印染股份有限公司 2012 年度报告全文
                                                                  Balance
                                  Proportio                                   Proportio
                   Amount                                          of the
                                   n in the                                    n in the
                   involved                                       guarante
         Relations                net assets                                  net assets         Predicted
    Name of              in the                                      e against                                 Predicted
         hip with                   at the                                      at the Predicted amount
    the              guarante                  Guarante Guarante   law up to                                  time of
            the                     end of                                      end of way of released
    guarante           e against                  e type e period        the                                    release(
         Compan                      the                                         the     release (RMB‘0
    e                  the                                          annual                                   month)
             y                    reporting                                   reporting            000)
                   law(RM                                          report
                                  period(%                                    period(%
                   B‘0000)                                       (RMB‘0
                                       )                                           )
                                                                    000)
    Total                         0         0%     --        --               0         0%      --         --           --3.Other important contracts
                                  Appraise
                       Book
                                   d value
         Name of     value of
    Name of                             of the                                                           Impleme
           the      the assets              Name of                      Transacti
    the                               assets            Benchma                        Is it a          ntation
         counterp    involved                  the                           on
    company                           involved            rk date of Pricing            related Relations status
            art        in the               appraisal                     price(R
    concludi                            in the            appraisal policy             transacti  hip    ended the
         concludi    contract               agent (is                    MB‘000
    ng the                           contract            (is any)                         on            reporting
          ng the     (RMB‘0                  any)                           0)
    contract                          (RMB‘0                                                             period
         contract     000)(if
                                   000) (if
                        any)
                                     any)VIII. Implementation of Commitments1. The commitments of the Company and its shareholders holding over 5% of the Company‘s total shares in thereport year of extending to the report year from previous year.
                                                                           Time of
                                         Commitment                                        Period of
            Commitment                                   Contents          making                            Fulfillment
                                           maker                                          commitment
                                                                         commitment
                                        Union          Committed
                                         Holdings      when the
                                         Co.,          restricted-for-
                                         Ltd/Shenzhe   sale shares
                                                                                                            Under
    Commitment on share reform               n Textile     from the                          In effect
                                                                                                            Fulfillment
                                         (Holdings)    shares
                                         Co.,          restructuring
                                         Ltd./Union    were listed for
                                         Developmen    circulation in
                          深圳中冠纺织印染股份有限公司 2012 年度报告全文t Group Co., the market: i.
    Ltd.         if they plan to
             sell the shares
             through the
             securities
             exchange
             system in the
             future, and the
             decrease of
             the shares
             they hold
             reaches 5%
             within 6
             months after
             the first
             decrease, they
             will disclose
             an
             announcemen
             t indicating
             the sale
             through the
             company
             within two
             trading days
             before the
             first decrease;
             ii. They shall
             strictly
             observe the
             ―Guidelines
             on Transfer of
             Restricted-for
             -sale Original
             Shares of
             Listed
             Companies‖ a
             nd the
             provisions of
             the relevant
             business
             principles of
             Shenzhen
             Stock
                                                                         深圳中冠纺织印染股份有限公司 2012 年度报告全文
                                                             Exchange.Commitment in the acquisition
                                            Notreport or the report on equity
                                            applicablechanges
    Commitment made upon the assets             Not
    replacement                                 applicable
                                            NotCommitments made upon issuance
                                            applicable
    Other commitments made to minority          Not
    shareholders                                applicable
    Executed timely or not?                     YesDetailed person for failing to execute
                                       Not applicableand the next planMake commitments on causing theproblems of horizontal competition Noand related-party transactions or not?
    Settlement period of commitment             Not applicable
    Way of settlement                           Not applicable
    Fulfillment of commitment                   Under Fulfillment2.There existed profit anticipation for the Company‘s assets or projects while the reporting period was still withinthe duration of the profit anticipation. The Company made explanation on whether the assets or projects reachedthe anticipated profit and the cause
                                                                  Cause of
                                         Predicted Actual result
    Profit-predict                                                    failure to
                                        result in the   in the                              Predicted     Predicted
    ed assets or Predicted      Predicted                           realize the
                                          reporting   reporting                             disclosure    disclosure
    name of      staring time ending time                           predicted
                                        period(RMB period (RMB                                 date         index
    project                                                         result(if
                                           0000)        000)
                                                                 applicable)IX. Engagement/Disengagement of CPAsCPAs currently engaged
    Name of the domestic CPAs                          Shinewing Certified Public AccountantsRemuneration for domestic accounting firm
                                                                                                                   30(RMB‘0000)Continuous life of auditing service for domestic
                                                   7accounting firm
    Name of domestic CPA                               Zhang Weijian, Xia Wei
                                                                      深圳中冠纺织印染股份有限公司 2012 年度报告全文Has the CPAs been changed in the current period□ Yes √ NoDescription of the CPAs, financial adviser or sponsor engaged for internal control auditing□ Yes √ NoX. Explanation of the Supervisory Committee and Independent Directors (If applicable)on the Qualified Auditor‘sReport Issued by the CPAs.Shine Wing Certified Public Accountants Co., Ltd. issued unqualified auditor's report with highlighted paragraphsfor the financial statements of the Company for 2012. The board of directors of the Company made a specialstatement on the matters involved in the Unqualified Auditor's Report of the Company for 2012 with HighlightedParagraphs. The independent directors of the Company expressed independent opinions on this. The supervisorycommittee of the Company held the opinion that this statement matched its actual conditions and agreed toopinions of the board of directors of the Company.XI. Punishment and Rectification
                                                      Type of
                                                                      Conclusion(if                     Index of
       Name           Type           Reasons      investigation and                   Disclosure date
                                                                       applicable)                      disclosure
                                                      penaltyAbout directors, supervisors, senior executives or shareholders holding over 5% of the Company‘s total sharessuspected of being involved in trading of the Company‘s shares against the regulations and recovery of the profitobtained by such persons suspected of being involved in trading of the Company‘s shares against the regulationsas disclosed by the Company.□Applicable √Not applicableXII. Situation of being confronted of suspension or termination of listing upon disclosure of theAnnual reportN/A.XIII. Notes to other significant Events
    Announcement on lawsuits.of Shenzhen Victor Onward Textile Industrial Co., Ltd. AnnouncementNo.:2012-0614,Announcement Date: June 16, 2012.(www.cninfo.com.cn),Investors are advised to pay attentionto investment risks.http://www.cninfo.com.cn/finalpage/2012-06-16/61144742.PDFXIV. Significant events of subsidiariesN/A.
                               深圳中冠纺织印染股份有限公司 2012 年度报告全文XV. Issuing of Company BondsN/A.
                                                                                 深圳中冠纺织印染股份有限公司 2012 年度报告全文
                   VI. Change of share capital and shareholding of Principal Shareholders
         (I).Changes in share capital
                               Before the change                   Increase/decrease(+,-)                              After the Change
                              Amount Proportion                                Capitalizat
                                                                                 ion of
                                                      Share       Bonus                                                              Proportio
                                                                                common        Other       Subtotal       Quantity
                                                     allotment    shares                                                                n
                                                                                reserve
                                                                                  fundI. Share with conditional
                                        0      0%             0            0              0           0              0          0           0%subscription
    1.State-owned shares                    0      0%             0            0              0           0              0          0           0%2.Staee-owned legal person
                                        0      0%             0            0              0           0              0          0           0%shares
    3.Other domestic shares                 0      0%             0            0              0           0              0          0           0%Of which:Domestic legal
                                        0      0%             0            0              0           0              0          0           0%person sharesDomestic natural person
                                        0      0%             0            0              0           0              0          0           0%shares4.Share held by foreign
                                        0      0%             0            0              0           0              0          0           0%investors
    Of which:Foreign legal
                                        0      0%             0            0              0           0              0          0           0%person shares
    Foreign natural person
                                        0      0%             0            0              0           0              0          0           0%shares
    5. .Executive shares                   0      0%             0            0              0           0              0          0           0%
    II. Shares with              169,142,3                                                                                  169,142,3
                                             100%             0            0              0           0              0                  100%
    unconditional subscription         56                                                                                         56
    1.Common shares in            99,720,45                                                                                  99,720,45
                                            58.96%            0            0              0           0              0                 58.96%
    RMB                                     3                                                                                       3
                                                                                  深圳中冠纺织印染股份有限公司 2012 年度报告全文
    2.Foreign        shares      in 69,421,90                                                                            69,421,90
                                                41.04%            0          0          0         0              0               41.04%
    domestic market                          3                                                                                  3
    3.Foregin        shares      in
                                         0           0%           0          0          0         0              0          0            0%overseas market
    4.Other                                 0           0%           0          0          0         0              0          0            0%
                                  169,142,3                                                                          169,142,3
    III. Total of capital shares                     100%            0          0          0         0              0                 100%
                                         56                                                                                56Approval of changes in sharesN/A.Approval of Change of Shares□Applicable √Not applicableTransfer of Change of sharesN/A.Influence from the shareholding movements upon such financial indicators as Earnings per share, net asset pershare of the lastest year and the latest accounting period□Applicable √Not applicableOther information necessary to disclose for the Company or need to disclosed under requirement from security regulatorsN/A.II. Issuing and listing1. Issuing activities over the past three Years
    Description of
                                                                                                      Quantity
    stock and its                         Issuing price (Or                                                            Expiration date of
                          Issuing date                         Issuing quantity    Listing date   approved for
    Derivative                               interest rate)                                                               transaction
                                                                                                       listing
    SecuritiesStockConvertible Corporate Bonds, Detachable Convertible Bond and Corporate BondsStock optionsStatement of security issuing in latest three yearsN/A.
                                                                                       深圳中冠纺织印染股份有限公司 2012 年度报告全文2. Change of asset and liability structure caused by change of total capital shares and structureN/A.3.About the existing employees‘ shares
    Date of issuing the employees‘                                                                               Issuing quantity of the employees‘
                                         Issuing price of the employees‘ shares (RMB)
              shares                                                                                                     shares(shares)Notes to the existing employees‘
                                       N/AsharesIII. Shareholders and actual controlling shareholder1. Number of shareholders and shareholding
                                                                                                                                            Unit: Shares
    Total shareholders in the reporting                           Total shareholders at the end of the 5th day from the
                                                     10,742                                                                                     10,084
    period                                                        date of disclosing the annual report
                                                        Shares held by 5% shareholders
                                                               Quantit                              Number               Pledging or freezing
                                                                            Increase Number
                                                               y at the                              of the
                                                                            /decreas   of the
                       Properties of            Share          end of                               Non-res
    Shareholder name                                                            e in the restricte                     Status of the
                       shareholder           proportion %        the                                 tricted                              Quantity
                                                                            reportin d shares                         shares
                                                              reportin                               shares
                                                                            g period   held
                                                              g period                                held
                   Domestic Non-
    Union Holdings                                                 43,141,                               43,141,
                   State-owned legal                25.51%                  0                   0
    Co., Ltd.                                                          032                                   032
                   person
    STYLE-SUCCES             Foreign                               24,466,                               24,466,
                                                    14.46%                  0                   0
    S LIMITED              shareholder                                 029                                   029Shenzhen Textile
                   State-owned                                 9,233,3 -310,00                       9,233,3
    (Group)Holdings                                      5.46%                                      0
                   Legal person                                        94 0                               94LtdRich Crown
                         Foreign                              6,114,55                              6,114,55
    Investment Co.,                                      3.62%                  0                   0
                       shareholder                                      6                                     6Ltd.
    Union              Domestic Non-
                                                               5,821,0                               5,821,0
    Development        State-owned legal                 3.44%                  0                   0
                                                                       89                                 89
    Group Co., Ltd.    person
    Liuzhou Jiali      Domestic Non-                     2.49% 4,220,0 +951,30                      0 4,220,0
                                                                          深圳中冠纺织印染股份有限公司 2012 年度报告全文
    Real estate     legal person                              00 0                         00
    Development     State-owned legal
    Co., ltd.       person
                Foreign Natural                       2,039,6 +163,10              2,039,6
    Zeng Ying                                     1.21%                            0
                 person                                   00 0                         00Liuzhou
                Domestic Non-
    Ruiheng                                               1,710,0 +330,00              1,710,0
                State-owned legal             1.01%                            0
    Mechatronics                                              00 0                         00
                personCo., Ltd.
    Shing Ying      Foreign Natural                       1,534,9                      1,534,9
                                              0.91%             -15,400        0
    Chieh           person                                    62                           62
                Foreign Natural
    Zheng Lian                                    0.55% 930,000 +14,000            0 930,000
                personStrategy investors or generallegal person becomes top 10
                                    N/Ashareholders due to rightsissued (if applicable)
    Explanation on associated           The controlling shareholder of the above-mentioned largest shareholder
    relationship among the              Shenzhen Union Holdings Ltd.and fourth shareholder Rich Crown Investment
    aforesaid shareholders              Co., Ltd.. Is Union Development Group Ltd.
                               Shareholding of top 10 shareholders of unrestricted shares
                                     Quantity of unrestricted shares held at the end                 Share type
    Name of the shareholder
                                            of the reporting period (Note 4)                  Share type     Quantity
                                                                                             RMB Common
    Union Holdings Co., Ltd.                                                     43,141,032                       43,141,032
                                                                                             shares
                                                                                        Foreign shares
                                                                                        placed in
    STYLE-SUCCESS LIMITED                                                        24,466,029                       24,466,029
                                                                                        domestic
                                                                                        exchange
    Shenzhen Textile                                                                             RMB Common
                                                                              9,233,394                           9,233,394
    (Group)Holdings Ltd                                                                          shares
                                                                                        Foreign shares
    Rich Crown Investment Co.,                                                              placed in
                                                                              6,114,556                           6,114,556
    Ltd.                                                                                    domestic
                                                                                        exchange
    Union Development Group                                                                      RMB Common
                                                                              5,821,089                           5,821,089
    Co., Ltd.                                                                                    shares
    Liuzhou Jiali Real estate                                                                    RMB Common
                                                                              4,220,000                           4,220,000
    Development Co., ltd.                                                                        shares
                                                                深圳中冠纺织印染股份有限公司 2012 年度报告全文
                                                                              Foreign shares
                                                                              placed in
    Zeng Ying                                                           2,039,600                      2,039,600
                                                                              domestic
                                                                              exchange
    Liuzhou Ruiheng                                                                 RMB Common
                                                                    1,710,000                      1,710,000
    Mechatronics Co., Ltd.                                                          shares
                                                                              Foreign shares
                                                                              placed in
    Shing Ying Chieh                                                    1,534,962                      1,534,962
                                                                              domestic
                                                                              exchange
                                                                              Foreign shares
                                                                              placed in
    Zheng Lian                                                            930,000                        930,000
                                                                              domestic
                                                                              exchangeExplanation on associatedrelationship or consistentaction among the top 10
    shareholders of non-restricted   The controlling shareholder of the above-mentioned largest shareholder
    negotiable shares and that       Shenzhen Union Holdings Ltd. and fourth shareholder Rich Crown Investment
    between the top 10               Co., Ltd.. Is Union Development Group Ltd.shareholders of non-restrictednegotiable shares and top 10shareholdersNotes to the shareholdersinvolved in financing securities N/A(if any)2.Controlling shareholderCorporation
                            Legal      Date ofof
    Name of the Controlling                                                             Principal business
                         representati incorpora Organization code Registered Capital
      shareholder                                                                        activities
                          ve/Leader      tion
                                                                                         Production of and
                                                                                         dealing in various
                                                                                         fabrics, garments
    Shenzhen           Union               Septembe                                          chemical fibers and
                         Dong
    Holdings Co., Ltd.                      r11,    19247150-0          1123.8877 million    textile equipment,
                         Binggen
                                        1989                                             domestic commerce,
                                                                                         material supply and
                                                                                         marketing
                                                                                         (excluding
                                                                   深圳中冠纺织印染股份有限公司 2012 年度报告全文
                                                                                             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.
                                                                                             real estate
                                                                                             development and
                                                                                             sales within the
                                                                                             scope of land use
                                                                                             right legally
                                                                                             obtained, property
                                                                                             management and
                                                                                             lease services and
                                                                                             sales of automobiles
                                                                                             (not including
                                                                                             Limit term).Operating results,
                           At the end of 2012, the total assets and net profit of Union Holdings Co., Ltd. werefinancial position, cash
                           RMB 4265.71 million and RMB 86.33 million respectively. The company will developflow and future
                           real estate business as its main operation as ever.development strategyEquity of otherdomestic/foreign listed
    company controlled by      N/Aactual controller inreporting periodChange of the actual controller in the reporting period□Applicable √Not applicable3.Information about the controlling shareholder of the CompanyCorporation
                            Legal      Date ofName of the controlling
                         representati establish      Institution code   Registered capital      Main business
    shareholder
                         ve/person in ment
                                                                  深圳中冠纺织印染股份有限公司 2012 年度报告全文
                        charge
                                                                                                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
    Union Development    Dong          August                                                       equipment           and
                                            19033795-7                  90.61 million
    Group Co., Ltd.     Binggen       23, 1983                                                     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).
    Operating results,   At the end of 2011, the total assets, shareholders' equity and net profit of Union Developing Group
                                                                        深圳中冠纺织印染股份有限公司 2012 年度报告全文
    financial position, cash   Co., Ltd. were RMB 7295.02 million, RMB 3203.34 million and RMB 63.47 million respectively.
    flow and future            The future development strategy is to become an excellent operator of city compound development.development strategyEquity of otherdomestic/foreign listed
                           Union Holdings Co., Ltd.(000036)Quantity of shares held 352.0493 million,Shareholdingcompany controlled by
                           ratio31.32%.actual controller inreporting periodChange of the actual controller in the reporting period□Applicable √Not applicableBlock Diagram of the ownership and control relations between the company and the actual controller
                                  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.
                                                                   深圳中冠纺织印染股份有限公司 2012 年度报告全文The actual controller controls the company by means of trust or managing the assets in other way□Applicable √Not applicable4.Other corporate shareholder holding over 10% of the Company‘s shares
                                 Legal
                                           Date of                                            Principal businesses
                               represent
    Corporate shareholder                    incorpora Organization code      Registered capital   or management
                              actives/Lea
                                             tion                                                  activities
                                  der
                             Miss Amy     Novembe
    Style-Success Ltd.                                                                                 Investment
                             Wang          r4, 1999IV. Share Acquisition plan proposed or implemented by the Company‘s Shareholder and its concerted actor in thereporting period
                                                                                                Date of
                                                                                            disclosing the
                                                             Proportion of Date of initial
    Name of the Quantity of the Proportion of     Quantity of                                       end of
                                                              the shares     disclosure of
    shareholder/co shares to be the shares to be shares actually                                implementatio
                                                               actually    the shares to be
    ncerted actor  acquired     acquired (%)       acquired                                     n of the share
                                                             acquired (%)      acquired
                                                                                              acquisition
                                                                                                  planN/ANotice to other conditions
               VII. Information about Directors, Supervisors and Senior ExecutivesI. Change in shares held by directors, supervisors and senior executives
                                                                          Number        Volume      Volume       Number
                                                                         of shares     of shares   of shares    of shares
                                                                         acquired      acquired      sold        held at
                                                      Starting   Expiry
                      Office                                             at end of       during     during        end of
    Name    Positions                 Sex       Age     date of    date of
                      status                                                the           the         the           the
                                                       tenure    tenure
                                                                         reporting     reporting   reporting    reporting
                                                                         period(sh       period    period(sh    period(sh
                                                                           ares)        (shares)     ares)         ares)
    N/A                                                                                0           0           0           0
    Total         --         --          --        --        --        --              0           0           0           0
                                                                   深圳中冠纺织印染股份有限公司 2012 年度报告全文II. Posts holdingWork Experience in the past five years of Directors, supervisors and senior Executives in Current officeBoard chairman:Hu Yongfeng, male, was born in July 1962,with bachelor degree, Senior Engineer,graduated from SoutheastTextile Technology Institute in 1983. He is ever took the post of section chief of state textile headquarters generaloffice, He now serves as Vice President of Union Development Group Co., Ltd. and Vice chairman of the Boardof Union Holdings Co., Ltd., He served as chairman of the Board of the Company from Oct., 2000 till now. Heserved 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 labordepartment 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 exchangecenter of Textile Headquarters and chairman of the Board of Union Holdings Co., Ltd., He now serves as VicePresident of Union Development Group Co., Ltd. and convener of the supervisory committee of Union HoldingsCo., Ltd., He served as director of the Company from June 2002 till now. He served as Vice Chainman board ofthe Company since April 18, 2008.Vice Chairman of the Board :Shu Yibo, Female,was born in February 1972, who is studying for EMBA. ,ever took the post of Manager of Saleof Manqi Industry Co., Ltd., Director of Manqi Investment Development Co., Ltd..He is now in charge ofChairman of the board , General Manager of Manqi Industry Co., Ltd.,Chairman of board of Manqi InvestmentDevelopment Co., Ltd.She served as director of the Company since April 18, 2008, He served as Vice Chairmanof board of the Company July 29, 2008.Director:Zhang Mei, Female, was born in February 1975, is a certified public accountant with Master's degree, She onceworked at Financial Division of China Garment Corporation. she now serves as Deputy manager of Finance Deptof 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 specialenterprise controller of Dapu Financial Bureau of Guangdong Province, deputy division chief of FengshunFinancial Bureau and director of Audit Dept, Manager of Management Dept , He now serves as Deputy GeneralManager, Supervisor of Shenzhen Textile (Holdings) Co., Ltd. He now serves as Deputy General Manager ofShenzhen 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, wasborn in May 1962. He ever took the post of senior section chief of Shenyang Dispatch and Shenzhen Dispatch ofAudit Administration, manager of operation department of Shenzhen Property Union Holdings Co., Ltd., deputydirector and director of auditing office of Union Development Group Co., Ltd., deputy general manager ofShenzhen Union Holdings Co., Ltd. and general manager of Yuyao Union Textile Co., Ltd., and he held theposition of deputy general manager of the Company since December 2004, He served as Board secretary of thecompany since December 27, 2010, He served as Director of the Company since October 18, 2011.Independent directors:
                                                                  深圳中冠纺织印染股份有限公司 2012 年度报告全文Jin Ligang, male, was born in August 1959, graduated from Beijing Foreign Trade College in 1980. From 1981 to1983, he majored in international economy at Rome LUISS Private University. He once worked at North Americaand Oceania Department of Third Bureau of Ministry of Foreign Trade and Economic Cooperation, who was incharge of U.S.-related affairs. He has served as assistant of board chairman and president and office director ofWest Europe China Trade Center (Hamburg, West Germany), deputy chief and chief of America and OceaniaDepartment of Ministry of Foreign Trade and Economic Cooperation, business counselor of Economic andCommercial Department of Embassy in U.S. and business counselor of Economic and Business Office ofConsulate General in New York in succession. He now serves as board chairman of American Stone BridgeInternational Company and director of Beijing Decision Making & Consultation Center. He served as Independentdirectors of the company since April 18, 2008.Shen Songqin, male, was born in January 1957, has doctor's degree. In 1980, he graduated from HangzhouUniversity and worked there after graduation. He studied for Master's degree at Hangzhou University from 1985and obtained the degree of master of Arts in 1988. He studied for doctor's degree from 1995 and obtained thedegree of doctor of literature in 1998. His dissertation was appraised "Excellent Dissertation for Doctor's Degreein China in 2000". He now is a professor, doctor tutor and deputy dean of Chinese Language Department ofZhejiang University. In 2006, he was appraised as Qianjiang Scholor of Zhejiang Province (specially engagedprofessor). In 2007, he was appraised as Middle-aged/Young Expert with Outstanding Contribution in ZhejiangProvince". He served as independent director of the Company since April 18, 2008.Chen Jinmei, female, born in June 1952, is a senior accountant of professor level with master's degree. She studiedin Hangzhou Electronic Industry College, Party School of Zhejiang Provincial Party Committee, Macao Scienceand Technology University and Zhejiang University in succession. She once served as director general andsecretary of Party committee of Financial Bureau and Local Taxation Bureau of Hangzhou, a member ofHangzhou municipal Party committee and a NPC deputy of Hangzhou and Zhejiang Province. She has nowretired. She served as Independent director of the Company since August 31, 2012.Wang Tianguang, male, Was born in May 1973, is a certified public accountant. He graduated from EconomicManagement School of Qinghua University. He once served as chief staff of Listed Company SupervisionDivision of Shenzhen Securities Regulatory Bureau, general manager of Shenzhen Investment Banking Dept. ofYinhe 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 February 27, 2012Supervisors:Dong Binggen, male, was born in July 1949, an engineer, with bachelor degree, graduated from East China TextileTechnology 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 isnow in charge of secretary of Party Committee, chairman of the board and general manager of Shenzhen UnionDevelopment Group Co., Ltd. and chairman of the Board of Shenzhen Union Holdings Co., Ltd., He served asChairman and held the position of Chairman of the Supervisory Committee of the Company from June 2002 tillnow.Supervisors:Huang Xiaoping, female, Was born in January 1957, an Economist, is a junior college graduate, once served aspolicewoman of Public Security Bureau of Dan County, Hainan, chief staff and deputy director of office, deputy
                                                                 深圳中冠纺织印染股份有限公司 2012 年度报告全文chief and chief of Personnel & Labor Division and office director of China Garment Industry Corporation, vicechairman of China Garment Association. She now serves as deputy secretary of Party committee and secretary ofdiscipline committee of Union Development Group Co., Ltd. Co., Ltd. she served as Supervisor of the companysince April 18, 2008.Pan Weichao, male, Was born in August 1951, is a junior college graduate., has worked at the Company sinceApril 1984. He has served successively as vice chairman of labor union, Manager of General Affairs Dept. andchairman of labor union. He now serves as Manager of affairs Dept of the Company, he has served asemployee-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, onceworked at Financial Division of Guizhou Yunman Aircraft Factory and Planning and Finance Division of UnionDevelopment Group Co., Ltd. He now serves as Manager of Finance Dept of the Company.Office taking in shareholder companies√Applicable □Not applicable
                                                       Titles                                Does he /she
    Names of the                                        engaged in Sharing date                    receive
                                                                            Expiry date of
    persons in         Names of the shareholders           the      of office                 remuneration or
                                                                             office term
    office                                           shareholder    term                    allowance from
                                                         s                                 the shareholder
                                                 Secretary
                                                 of Party
                                                 committee,
    Dong                                             chairman May 18,
               Union Development Group Co., Ltd.                             May 17, 2015 Yes
    Binggen                                          of board of 2012
                                                 directors
                                                 and
                                                 President
    Dong                                                Board       June 30,
               Union Holdings Co., Ltd.                                      June 29, 2013 No
    Binggen                                             chairman    2010
                                                    Vice        May 28,
    Ding Yue       Union Development Group Co., Ltd.                             May 17, 2015 Yes
                                                    President   2012
                                                    Convener
                                                    of      the
                                                                June 30,
    Ding Yue       Union Holdings Co., Ltd.             Supervisor               June 29, 2013 No
                                                                2010
                                                    y
                                                    Committee
                                                    Vice
    Hu Yongfeng Union Development Group Co., Ltd.                   May 18,2013 May 17, 2015 Yes
                                                    President
                                                                 深圳中冠纺织印染股份有限公司 2012 年度报告全文
                                                   Vice Board June 30,
    Hu Yongfeng Union Holdings Co., Ltd.                                           June 29, 2013 No
                                                   chairman 2010
                                                Secretary
                                                of     Party
    Huang                                           committee, October 1,
              Union Development Group Co., Ltd.                                               Yes
    Xiaoping                                        secretary of 2008
                                                discipline
                                                committee
    Huang                                                           June 30,
              Union Holdings Co., Ltd.             Director                    June 29, 2013 No
    Xiaoping                                                        2010
                                                   Deputy
            Shenzhen Textile(Holding) Co.,
    Feng Junbin                                        general      May 4, 2010 May 3, 2013       Yes
            Ltd.
                                                   manager
                                                Deputy
                                                manager of February 1,
    Zhang Mei     Union Development Group Co., Ltd.                                               Ye
                                                Finance    2011
                                                Dept.
                                                                June 30,
    Zhang Mei     Union Holdings Co., Ltd.             Director                    June 29, 2013 No
                                                                2010
    Notes         N/AOffices taken in other organizations√Applicable □Not applicable
                                                                                                  Whether
                                                                                                  receiving
                                                                 Office term    Office term
    Name                   Name of other units           Position                                   remuneration
                                                                 start from       ended
                                                                                              from other units
                                                                                                    or not
              Manqi Investment Development Co., General
    Shu Yibo                                                        July 1, 2002                  Yes
              Ltd                               Manager
              STONEBRIDGE Enterprise               Board        January 1,
    Jin Ligang                                                                                    Yes
              Consultant (Beijing)Co., Ltd.      chairman     2008Shen
              Hangzhou Normal University           President    June 1, 2009                  YesSongqin
    Notes         N/AIII. Remuneration to directors, supervisors and senior executivesDecision-making procedures, basis for determination and actual payment of the remuneration to directors ,supervisors and senior executives
                                                                     深圳中冠纺织印染股份有限公司 2012 年度报告全文
    The remuneration appraisal committee of the board of directors of the Company proposed remunerationstandards according to the responsibilities, work scope and importance of directors, supervisors and seniorexecutives, the earnings of the Company for the current year and the remuneration level of relevant post andsubmitted it to the board of directors for approval. After approval, the remuneration was paid on monthly basis.The remuneration of independent directors is subject to approval by the shareholders' meeting.Remuneration to directors, supervisors and senior executives in the reporting period
                                                                                                   Unit:RMB‘0000
                                                                                                 Remuneratio
                                                                           Total        Total
                                                                                                   n actually
                                                                       remuneration remuneration
                                                                                                  receives at
    Name        Positions        Sex            Age       Office status received      received
                                                                                                   the end of
                                                                         from the     from the
                                                                                                 the reporting
                                                                         Company shareholder
                                                                                                     period
            Board
            chairman/Ge
    Hu Yongfeng             Male                          50 In Office                  38             0           38
            neral
            Manager
              Vice Board
    Ding Yue                 Male                         54 In office                   0
              chairman
              Vice Board
    Shu Yibo                 Female                       40 In Office                   0
              chairman
    Zhang Mei     Director       Female                   37 In office                   0
    Feng Junbin Director         Male                     50 In Office                   0
    Zhang         Director ,
                          Male                        50 In office                   0             0               0
    Jinliang      Deputy GM
              Independent
    Jin Ligang                Male                        53 In Office                   5             0               5
              director
              Independent
    She Songqin               Male                        55 In office                   5             0               5
              director
              Independent
    Chen Jinmei               Female                      60 In office                 2.5             0           2.5
              director
    Wang          Independent
                          Male                        39 Leave office              2.5             0           2.5
    Tianguang     director
              Chairman of
    Dong          the
                          Male                        63 In office                   0
    Binggang      supervisory
              committeeHuang
              Supervisor     Female                   55 In office                   0Xiaoping
                                                                               深圳中冠纺织印染股份有限公司 2012 年度报告全文
    Pan Weichao Supervisor              Male                        61 In office                    11              0                 11
    Zhang             Board
                                    Male                        50 In office                    20              0                 20
    Jinliang          secretary
    Ren        Manager of
                        Male                                    37 In office                    13              0                 13Changzheng Finance Dept
        Total             --               --             --             --                     97              0                 97Incentive equity to directors, supervisors or/and senior executives in the reporting period□Applicable√Not applicableIV. Retirement and dismissal of Directors, Supervisors and senior Executives
        Names              Titles               Types           Date                                 Causes
                     Independent                         February 27,
    Wang Tianguang                        Dimission                          Resign from the Board of Director for personal reasons
                     director                            2012V. Change of the Core Team of Technology of Key technical personnel (Other than director, supervisor or seniorexecutive) in the Reporting PeriodThere is no change of the Core Team of Technology of Key technical personnel (Other than director, supervisoror senior executive)in the Reporting PeriodVI. Particulars about employees.
    Categories of professions                         Number of persons                       Proportion
    Finance & Accounting                              3                                       11%
    Executive                                         4                                       15%
    Logistics                                         20                                      74%
    Total                                             27                                      100%
    Masters‘ degree                                  1                                       4%
    Bachelors‘ degree                                3                                       11%
    College diploma                                   3                                       11%
    High school and below                             20                                      74%
    Total                                             27                                      100%
        As of December 31, 2012, The Company should bear expenses for 0 retired employees.
                                                         深圳中冠纺织印染股份有限公司 2012 年度报告全文(1) The figure of professional composition(2) The figure of education background of the professional composition
                                                           深圳中冠纺织印染股份有限公司 2012 年度报告全文
                            VIII. Administrative structureI. General situationThe Company has constantly improved its corporate governance structure,established modern enterprisesystem 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 ListedCompanies and relevant laws and regulations of CSRC. In accordance with relevant regulations on specialactivities of governance of listed companies and requirements of CSRC Shenzhen SecuritiesAdministration, Establish and perfect the internal control management and system, sustainabledevelopment governance activities, To further standardize the operation of the Company, improve themanagement of the Company.
    In the report period, the board of directors of the Company revised the Articles of Association of theCompany, Rules of Procedure of Shareholders‘General Meeting, Rules of Procedure of the Board ofDirectors, Rules of Procedure of the Supervisory Committee, Detailed Working Rules of General Manager,Regulations on Management of Person in Charge of Financial Affairs, Regulations on SignificantInvestment and Financial Decision and Regulations on Financial Management to improve planning andgovernance and strengthen risk control. The said regulations were examined and adopted by the board ofdirectors.
    In the report period, The board of directors of the Company further improved the decision making andsupervision mechanism for reasonable, continuous and stable dividend distribution and formulated theProfit Distribution Policy and Planning for Return to Shareholders in the Next Three Years. According tothe forecast of the Company's operating status and the fund demand plan for project investment and basedon fully considering the interests of shareholders, the planning reasonably balanced the relationshipbetween using profit for enterprise development and giving return to shareholders and determinedreasonable profit distribution plan. Meanwhile, the Articles of Association of the Company define thedetails of the profit distribution policy, especially cash dividend distribution policy.
    In the report period, The Company further increased information transparency and properly carried outpublicity work for protection of investors. It timely answered the questions of investors and communicatedwith medium and small investors by making use of telephone, email, especially the platform forcommunication with investors set up by Shenzhen Stock Exchange to let them know itself better andimprove its information transparency.Does there exist any difference in compliance with the corporate governance , the PRC Company Law andthe relevant provisions of CSRC,□ Yes √ NoThere exist no difference in compliance with the corporate governance , the PRC Company Law and therelevant provisions of CSRC.For the standardization of the Registration and Management System on Learners of Insider Information ofListed Company, the company has held the special meeting of the Sixth Board of Directors and made fullrevision on ―Management System on Learners of Inside Information‖ on June 28, 2012 in accordance withthe requirements of the ―Provisions on Listed Company Formulating Management System on Learners of
                                                             深圳中冠纺织印染股份有限公司 2012 年度报告全文Insider Information‖ and combined with the actual situation of the company. Thus, the company has furtherclarified the use scope, the data filing procedures and the responsibility claim of the non-public information.In the Report period, According to the requirements of the ―Registration and Management System onLearners of Insider Information‖, the company has well performed the management and the safe delivery ofall the information, and completely put into and recorded the report, the transmission, the preparation, thereview and the disclosure of all the learner lists of insider information before the public disclosure of theinsider information. In the Report period, The company has not found the situation that the relevantpersonnel is engaged in the insider transaction by using the insider information and suggest others toconduct the transaction with the insider information, there is no the situation that the insider information isdisclosed, and not exists the situation that the company shall be taken a crackdown and ordered forrectification by the regulatory department because of the implementation of the Registration System onLearners of Insider Information or the suspicion of insider transaction.II. Annual General Meeting and Extraordinary Shareholders‘ Meetings in the Reporting Period1.Annual General Meeting
                                         Description of
    Sessions          Meeting Date                           Resolution       Disclosure date    Disclosure index
                                           proposals
                                       (1) The Work
                                       Report of the
                                       Board of
                                       Directors for
                                       2011;
                                       (2) The Work
                                       Report of the
                                       supervisory
                                                                                                 Announcement
                                       Committee for
                                                                                                 No. 2012-0613)
                                       2011;
                                                                                                 Securities Times ,
                                       (3)、Annual                                             Hong Kong
    2011 Shareholders‘                    Report for 2011 Adoption
                      May 15, 2012                                           May 16, 2012        Commercial
    general meeting                        and its summary;                                          Daily and
                                       (4)、The                                                www.cninfo.com.
                                       Preplan for Profit                                        cn on May 16,
                                       Distribution for                                          2012
                                       2011(5)、The
                                       Proposal for
                                       Deregistering the
                                       Printing and
                                       Dyeing Mill of
                                       Shenzhen Victor
                                       Onward Textile
                                       Industrial Co.,
                                                                       深圳中冠纺织印染股份有限公司 2012 年度报告全文
                                               Ltd.2.Extraordinary Shareholders‘ Meetings
                                                  Description of
       Sessions            Meeting Date                                  Resolution         Disclosure date      Disclosure index
                                                      proposals
                                                    (1) The profit
                                               distribution
                                               policy and
                                               planning for
                                               return to
                                               shareholders in
                                               the next three
                                               years                                                          Announcement
                                                    (2) The                                                   No. 2012-0620)
                                               proposal                                                       Securities Times ,The first provisional
                                               concerning the                                                 Hong Kongshareholders‘
                        August 31, 2012        revision of the     Adoption              September 1, 2012    CommercialGeneral meeting in
                                               Articles of                                                    Daily and2012
                                               Association of the                                             www.cninfo.com.
                                               Company                                                        cn on September
                                                    (3) The                                                   1, 2012
                                               proposal for
                                               electing the
                                               candidates for
                                               independent
                                               directors of the
                                               board of directorsIII. Duty performance of independent Directors1. Attendance of Board Meetings and General Meetings
                                          Independent Directors‘ Attendance at Board Meetings
                          Number of
                                                                                                                    Failure to
                            Board                          Number of
                                                                                                                    personally
                           meetings           Number of     meetings     Number of
    Independent                                                                                       Number of     attend board
                         necessary to             spot     attended by attendances by
    Directors                                                                                        absence        meetings
                        be attended in        attendances Communicatio representative
                                                                                                                   successively
                        the reporting                           n
                                                                                                                  twice (Yes/No)
                            period
    Jin Ligang                                4                 1                3                   0               0 No
                                                             深圳中冠纺织印染股份有限公司 2012 年度报告全文
    Shen Songqin                     4               1                3              0                  0 No
    Wang Tianguang                   3               1                2              0                  0 No
    Chen Jinmei                      1               0                1              0                  0 NoNumber of general meetings
    attended by independent directors                                                                               1as non-voting delegatesNotes to failure to personally attend Board Meetings Successively TwiceN/A2.Objection of independent directors on some relevant issuesObjection of independent directors on some relevant issues□ Yes √NoIndependent directors proposed no objection against the relevant matters in the reporting period.3. Other notes to duty performance of independent directorsHas an independent director‘s advice to the Company been accepted√Yes □NoExplanation on acceptance of or failure to accept an independent director‘s advice to the Company.
    In the report period, the independent directors of the Company attended the meetings of the board ofdirectors and all special committees on time, expressed independent opinions on the proposals of the boardof directors. They gave many opinions and suggestions during meetings and adjournment and the Companyadopted all of them.IV. Duty Performance of Special Committees under the Board of Directors in the ReportingPeriod
    The board of directors of the Company has special committees including audit committee,remuneration and appraisal committee, strategy committee and nomination committee. According to thescope of authority specified in the working rules for them, the committees conducted study and put forwardopinions and suggestions for reference by the board of directors for decision making.(I) The duty performance of the audit committee of the board of directors
    In the report period, the chairman of the audit committee of the board of directors of the Companyresigned for personal reason. The 4th meeting of the sixth board of directors of the Company held on August14, 2012 elected a new chairman. An independent director engaged in professional accounting acted as thenew chairman.According to relevant regulations of CSRC, the audit committee of the board of directors of the Companydid the following work during the preparation of the annual report of the Company for 2012:1. On December 24 , 2012, the audit committee of the Company examined the working plan for audit offinancial report for 2012, listened to Analysis of Economic Activities of Shenzhen Victor Onward in 2012
                                                            深圳中冠纺织印染股份有限公司 2012 年度报告全文made by Finance Dept. of the Company and approved the said working plan.2. On January 19, 2013, the audit committee of the board of directors examined the financial and accountingstatements for 2012 provided by the Company and expressed the following opinions: The financial andaccounting statements for 2012 prepared by the Company basically reflected the Company's asset conditionand operating results. The audit committee agreed to carrying out audit of annual financial report on thisbasis, requested the Finance Dept. of the Company to actively provide cooperation and coordination inrespect of this audit, strengthen communication and connection with the audit committee and timely reportthe problems found in the process of audit and the progress of audit to the audit committee.3. On March 11 , 2013, the audit committee of the board of directors examined the preliminary audit reportissued by the certified public accountants for annual audit and held the following opinions after looking uppartial working papers and verifying relevant facts: This preliminary examination report was preparedaccording to new accounting standards and basically gave a truthful and fair view of the financial position ofthe Company as at December 31, 2012 and its operating results and cash flow for 2012 in all major aspects.The audit committee had no objection to the preliminary examination report issued by the certified publicaccountants for annual audit.4. On April 12 , 2013, the audit committee of the board of directors examined the Company's auditor's reportfor 2012 issued by Shine Wing Certified Public Accountants, agreed to the result of audit of the Company'sfinancial statements for 2012 conducted by the certified public accountants and to submitting this financialaudit report to the board of directors of the Company for examination. The audit committee held thefollowing opinions on the summarization report of certified public accountants on the audit work for 2012:Shine Wing Certified Public Accountants carried out and completed the audit of the Company for 2012strictly according to the provisions of audit laws, regulations and standards. The audit time was adequateand the auditing personnel have high professional quality, strong practicing ability and sharp risk awareness.The auditor's report issued by it reflected the financial position, operating results and cash flow of theCompany for 2012 in all aspects and its audit conclusion truly reflected the actual conditions of theCompany.5. As Credit Shine Wing Certified Public Accountants . originally engaged by the Company as annualauditing body served the Company for a long time (7 years in succession from 2006 to 2012), the Companyplanned to no longer renew the engagement of this company as the auditing body for 2013. The Companyexpressed heartfelt gratitude to Credit Shine Wing Certified Public Accountants for its hard work.
    According to the provisions of the Company's Work System of Choosing and Engaging Certified PublicAccountants, the audit committee agreed to submitting the proposal for engaging Dahua Certified PublicAccountants (LLP) as the auditing body for 2013 annual audit and internal control to the board of directorsand shareholders' general meeting. The annual auditing fee is RMB 0.55 million (Including travelingexpenses).(II) The duty performance of the nomination committee of the board of directors
    On August 10, 2012, the nomination committee held a meeting, adopted the Proposal for ChangingIndependent Directors and submitted the proposal to the 4th meeting of the sixth board of directors of theCompany for examination.V. Work of the supervisory CommitteeDid the supervisory Committee find any risk existing in performing the supervision activities in the
                                                              深圳中冠纺织印染股份有限公司 2012 年度报告全文reporting period□Yes √NoThe supervisory Committee has no objection against any matters under supervision in the reporting periodVI. Independence and Completeness in business, personnel , assets, organization and financeThe 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 completelyindependent from its controlling shareholder in respect of business.2. Personnel: The Company is independent in respect of labor, personnel and wage management. Seniorexecutives received remuneration from the Company, who neither held position at nor receivedremuneration from the controlling shareholder.3. Assets: The Company has complete assets. Its property rights are definite and not related to itscontrolling shareholder and other shareholders.4. Organization: The Company established an organizational structure that is completely independent of itscontrolling shareholder. The board of directors, the supervisory committee and internal organs of theCompany are able to operate independently.5. Finance: The Company has independent finance. It set up independent finance department andestablished independent financial accounting system. It has standardized and independent financial andaccounting system and financial control system applicable to branches and subsidiaries. The Companyindependently pays taxes according to law. It opened accounts with banks independently. The Companyand its controlling shareholder do not use the same bank account.
    VII. Horiontal Competitions1. 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.VIII. Assessment and incentive Mechanism for Senior executivesWe appraise the performance of executives according to relevant index and criterions, the results ofperformance appraisal are recorded in the archives of executives, and are linked to the compensations andhiring of executives.
                                                                深圳中冠纺织印染股份有限公司 2012 年度报告全文
                                             IX. Internal Control
    I.         Internal control ConstructionAccording to the requirements of the Notice of Properly Carrying Out the Work Concerning Experimentsof Standardization of Internal Control of Listed Companies in Shenzhen issued by Shenzhen SecuritiesRegulatory Bureau and relevant provisions of Fundamental Norms of Internal Control of Enterprises andSupporting Guidelines for Internal Control of Enterprises, the Company formulated the plan forimplementation of internal control norms and started the construction of comprehensive internal controlsystem to further strengthen the construction of the Company's standardized internal control system. In thereport period, the Company formulated the Collection of Internal Control Documents of Shenzhen VictorOnward Textile Industrial Co., Ltd. and issued it for implementation, which was examined and adopted ata special meeting of the sixth board of directors of the Company. The strict implementation of relevantregulations on internal control facilitated the Company's standardized operation and quickened its healthydevelopment and protected investors' lawful rights and interests.II. Statement of the Board of directors on the Responsibility of internal controlThe Internal control is implemented by the Board of Directors, the Supervisory Committee, Managementand all employees of the company aiming at the achievement of control target processes. The Board ofDirectors complies with the national laws and regulations and the requirements of securities regulatoryauthorities to constantly improve all the rules and regulations of the company‘s internal control, promotethe establishment, perfection and effective operation of the company‘s internal control, and assumeimportant 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 controlsystem.III.Basis for establishment of internal control of the Financial ReportThe company, regarding the related laws and regulations of ―Accounting Law of the People‘s Republic ofChina‖, ―Fundamental Norms for Enterprise Internal Control‖ and ―Application Guidelines of EnterpriseInternal Control (No.14) — Financial Report‖ as the basis of establishment of the internal control offinancial report for the company, implements the internal control for the standardization of preparing thefinancial report, submitting and analysis of use of control processes, improvement the authorization andapproval 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 andother key aspects, in order to ensure the legality, compliance, trueness and integrity.IV. Self-assessment report of the internal control
    About the significant Defects of the internal control found in the internal control self-assessment report in the
                                                     reporting period
                                                                 深圳中冠纺织印染股份有限公司 2012 年度报告全文No significant defect of internal control was found in the reporting periodDate of disclosing the internalcontrol self-assessment report, April 23, 2013full textIndex of disclosing the
    internal control                 Refer to Announcement that disclosed on www.cninfo.com.cn on April
    self-assessment report, full     23, 2013.textV.Internal control audit report√Applicable □Not applicable
                                    Review opinions in the internal control audit reportWe believe that, Shenzhen Victor Onward Textile Industrial Co., Ltd. maintained efficient internal control offinancial reports in all significant aspects according to ― Basic Standards of Corporate Internal Control‖ andrelevant regulations on December 31, 2012Date of disclosing the internal
                                April 19, 2013control audit report, full textIndex of disclosing the
    internal control audit report,   XYZH/2012SZA1024full text
                                    Review opinions in the internal control audit reportHas the CPAs issued a qualified auditor‘s report of internal control .□ Yes √NoDoes the internal control audit report issued by the CPAs agree with the self-assessment report of theBoard of Directors√Yes □NoVI. Establishment and implementation of the Responsibility investigation system for seriousErrors in the Annual ReportIn the report period, The company examine itself according to―Responsibility Claim System on SignificantError in Information Disclosure of Annual Report‖,there are no the occurrence of serious accounting errorscorrection, grave omission of information supplements.
                                                            深圳中冠纺织印染股份有限公司 2012 年度报告全文
                                         X. Financial ReportI. Audit report
                                                         Issued unqualified auditor's report with paragraph ofType of audit opinion
                                                         emphasized matters
    Date for signing the auditor‘s report                   April 19, 2013
    Name of audit firm                                       Shinewing Certified Public Accountants
    Document No. of the auditor‘s report                    XYZH/2012SZA1044
                                           Auditors‘ Report
                                                                                     XYZH/2012SZA1044To 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 Consolidation and parent Company balancesheet on December 31, 2012, Consolidation and parent Company profit statement, Consolidation andparent Company cash flow statement for the year 2012 and Consolidation and parent Company statementof change in shareholders' equity and the notes to financial statements.I. Management‘s responsibility for the financial statements
      The Management is responsible for the preparation and the true and fair presentation of thesefinancial statements in accordance with Accounting Standard for Business Enterprises and ChinaAccounting System For Business Enterprises. These responsibilities include: (i) designing, implementingand maintaining internal control relevant to the preparation and the true and fair presentation of financialstatements that are free from material misstatement, whether due to fraud or error;(ii) selecting andapplying appropriate accounting policies; (iii) and making accounting estimates that are reasonable in thecircumstances.
      II. Auditor‘s responsibility
    Our responsibility is to express an opinion on these financial statements based on our audit. Weconducted our audit in accordance with the Standards on Auditing for Certified Public Accountants.Those standards require that we comply with ethical requirements and plan and perform the audit to
                                                              深圳中冠纺织印染股份有限公司 2012 年度报告全文obtain reasonable assurance as to whether the financial statements free from material misstatement.
    An audit involves performing procedures to obtain audit evidence about the amounts and disclosuresin the financial statements. The procedures selected depend on the auditor‘s judgment, including theassessment of the risks of material misstatement of the financial statements, whether due to fraud or error.In making those risk assessments, the auditor considers internal control relevant to the entity‘s preparationand true and fair presentation of the financial statements in order to design audit procedures that areappropriate in the circumstances, but not for the propose of expressing an opinion on the effectiveness ofthe entity‘s internal control. An audit also includes evaluating the appropriateness of accounting policiesused and the reasonableness of accounting estimates made by the management, as well as evaluating theoverall presentation of the financial statements.
    We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our audit opinion.
    III. Auditing opinionIn our opinion, the financial statements give a true and fair view of the financial position of the Companyas of 31 December 2012 and its financial performance and cash flows for the year then ended inaccordance with the Accounting Standards for Business Enterprises and China Accounting System forBusiness Enterprises.IV. Matters emphasizedWe remind the users of financial statements to pay attention to the fact that the Company stoppedproduction and dismissed most of workers since March 2007. And most subsidiaries of the company hadstopped production and it maintained daily operation by house leasing. Shenzhen Victor Onward TextileIndustrial Co., Ltd. had disclosed its improvement measures in Note 11of Financial Statement, but itssustainable operation ability is still uncertain. This paragraph does not affect audit opinions that havebeen given.Shine Wing Certified public Accountants
                                                    C.P.A:(LLP)
                                                    Zhang WeiJian
                                                    C.P.A:
                                                    Xia Wei
             Beijing China                          April 19,2013
                                                          深圳中冠纺织印染股份有限公司 2012 年度报告全文II. Financial StatementsStatement in Financial Notes are carried in RMB/CNY1.Consolidated Balance sheetPrepared by: Shenzhen Victor Onward Textile Industrial Co., Ltd.
                                                                                            Unit:RMB
              Items                          Year-end balance                  Year-beginning balance
         Current asset:
         Monetary fund                                      52,227,262.00                        53,399,316.00
       Settlement provision
        Outgoing call loan
    Trading financial assets                                                                        68,900.00
          Bill receivable                                    1,500,000.00
       Account receivable                                       744,712.00                          744,712.00
          Prepayments                                           176,443.00                           27,548.00
       Insurance receivable
    Reinsurance receivable
    Provisions of Reinsurance
       contracts receivable
        Interest receivable                                      38,414.00                           38,378.00
       Dividend receivable
    Other account receivable                                   260,005.00                          457,264.00Repurchasing of financial assets
           Inventories                                          101,536.00                          162,457.00Non-current asset due in 1 year
       Other current asset
      Total of current assets                               55,048,372.00                        54,898,575.00
      Non-current assets:
    Loans and payment on other‘s
                                    深圳中冠纺织印染股份有限公司 2012 年度报告全文
        behalf disbursed
    Disposable financial asset           751,542.00                            703,055.00Expired investment in possess
    Long-term receivable
    Long term share equity
                                      65,784,312.00                        63,192,614.00
         investment
      Property investment             31,041,484.00                        34,373,451.00
          Fixed assets                12,416,459.00                        12,070,406.00
    Construction in progress
      Engineering material
      Fixed asset disposal
    Production physical assets
          Gas & petrol
        Intangible assets              1,860,764.00                         1,901,069.00
          R & D petrol
            Goodwill                   5,099,624.00                         5,099,624.00
    Long-germ expenses to be
          amortized
    Differed income tax asset
    Other non-current asset
    Total of non-current assets       116,954,185.00                       117,340,219.00
         Total of assets             172,002,557.00                       172,238,794.00
       Current liabilities
        Short-term loans
    Loan from Central BankDeposit received and hold for
            others
       Call loan received
    Trade off financial liabilities
          Bill payable
        Account payable                3,239,571.00                         3,239,221.00
       Advance payment                 2,778,488.00                         2,775,476.00Selling of repurchased financial
             assetsFees and commissions receivable
                                      深圳中冠纺织印染股份有限公司 2012 年度报告全文
    Employees‘ wage payable              766,680.00                            590,220.00
           Tax payable                   1,622,074.00                         2,700,348.00
         Interest payable
        Dividend payable                 1,215,946.00                         1,215,946.00
      Other account payable             32,227,317.00                        31,167,220.00
    Reinsurance fee payable
    Insurance contract provision
    Entrusted trading of securities
    Entrusted selling of securitiesNon-current liability due in 1 year
      Other current liability            1,547,263.00                         1,584,784.00
    Total of current liability         43,397,339.00                        43,273,215.00
    Non-current liabilities:
         Long-term loan                  1,033,936.00                         1,160,011.00
          Bond payable
       Long-term payable                 8,488,953.00                         8,486,859.00
         Special payable
       Expected liabilities
    Differed income tax liability           766,660.00                            808,335.00
    Other non-current liabilities          836,792.00                            836,792.00
    Total of non-current liabilities      11,126,341.00                        11,291,997.00
         Total of liability             54,523,680.00                        54,565,212.00
         Owners‘ equity
           Share capital               169,142,356.00                       169,142,356.00
         Capital reserves               39,790,784.00                        39,742,473.00
      Less:Shares in stock
         Special reserves
         Surplus reserves               26,704,791.00                        26,704,791.00
    Common risk provision
       Undistributed profit           -116,273,941.00                      -116,026,610.00
    Different of foreign currency
                                          -511,599.00                          -515,914.00
           translationTotal of owner‘s equity belong to
                                       118,852,391.00                       119,047,096.00
       the parent company
    Minority shareholders‘ equity        -1,373,514.00                        -1,373,514.00
                                                          深圳中冠纺织印染股份有限公司 2012 年度报告全文
      Total of owners‘ equity                             117,478,877.00                       117,673,582.00
    Total of liabilities and owners‘
                                                           172,002,557.00                       172,238,794.00
               equityLegal representative :Hu YongfengnPerson-in-charge of the accounting work:Zhang JinliangPerson-in -charge of the accounting organ:Ren Changzhengi2. Balance sheet of Parent CompanyPrepared by: Shenzhen Victor Onward Textile Industrial Co., Ltd.
                                                                                            Unit:RMB
                Items                        Year-end balance                  Year-beginning balanceCurrent asset:
    Monetary fund                                               17,293,509.00                        21,483,163.00
    Trading financial assets                                                                             68,900.00
    Bill receivable                                              1,500,000.00Account receivablePrepaymentsInterest receivableDividend receivable
    Other account receivable                                    72,818,786.00                        72,999,033.00
    Inventories                                                     101,536.00                          162,457.00Non-current asset due in 1 yearOther current asset
    Total of current assets                                     91,713,831.00                        94,713,553.00Non-current assets:Disposable financial assetExpired investment in possessLong-term receivable
    Long     term         share   equity
                                                            36,788,953.00                        36,788,953.00investment
    Property investment                                          5,060,748.00                         5,397,921.00
    Fixed assets                                                 9,145,661.00                         9,170,487.00Construction in progress
                                        深圳中冠纺织印染股份有限公司 2012 年度报告全文Engineering materialFixed asset disposalProduction physical assetsGas & petrol
    Intangible assets                          1,860,764.00                         1,901,069.00R & D petrolGoodwill
    Long-germ         expenses    to   beamortizedDiffered income tax assetOther non-current asset
    Total of non-current assets               52,856,126.00                        53,258,430.00
    Total of assets                          144,569,957.00                       147,971,983.00Current liabilitiesShort-term loansTrade off financial liabilitiesBill payable
    Account payable                              113,344.00                           113,337.00
    Advance payment                            2,002,540.00                         1,999,540.00
    Employees‘ wage payable                    735,970.00                            559,510.00
    Tax payable                                 573,074.00                          1,617,284.00Interest payableDividend payable
    Other account payable                       884,092.00                            855,475.00Non-current liability due in 1 year
    Other current liability                    1,547,263.00                         1,544,249.00
    Total of current liability                 5,856,283.00                         6,689,395.00Non-current liabilities:Long-term loanBond payableLong-term payableSpecial payableExpected liabilities
    Differed income tax liability              4,180,138.00                         4,180,138.00
                                                          深圳中冠纺织印染股份有限公司 2012 年度报告全文
    Other non-current liabilities                                 836,792.00                            836,792.00
    Total of Non-current liabilities                             5,016,930.00                         5,016,930.00
    Total of liability                                          10,873,213.00                        11,706,325.00Owners‘ equity
    Share capital                                              169,142,356.00                       169,142,356.00
    Capital reserves                                            31,606,598.00                        31,606,598.00Less:Shares in stockSpecial reserves
    Surplus reserves                                            26,309,287.00                        26,309,287.00Provision of general risk
    Undistributed profit                                       -88,963,263.00                       -86,396,616.00Different of foreign currency
                                                            -4,398,234.00                        -4,395,967.00translation
    Total of owners‘ equity                                   133,696,744.00                       136,265,658.00Total of liabilities and owners‘
                                                           144,569,957.00                       147,971,983.00equityLegal representative :Hu YongfengnPerson-in-charge of the accounting work:Zhang JinliangPerson-in -charge of the accounting organ:Ren Changzhengi3.Consolidated Profit StatementPrepared by: Shenzhen Victor Onward Textile Industrial Co., Ltd.
                                                                                           Unit :RMB
                Items                     Amount in this period                 Amount in last period
    I. Income from the key business                             11,095,669.00                         9,850,484.00
    Incl:Business income                                       11,095,669.00                         9,850,484.00Interest incomeInsurance fee earnedFee and commission received
    II. Total business cost                                     13,388,125.00                        16,626,343.00
    Incl:Business cost                                          5,413,356.00                         4,269,140.00Interest expense
                                              深圳中冠纺织印染股份有限公司 2012 年度报告全文Fee and commission paidInsurance discharge paymentNet claim amount paidInsurance policy dividend paidInsurance policy dividend paidReinsurance expenses
    Business tax and surcharge                        487,000.00                            447,517.00
    Sales expense                                     295,678.00                            282,627.00
    Administrative expense                           7,567,920.00                         8,000,296.00
    Financial expenses                               -444,174.00                            316,201.00
    Asset impairment loss                              68,345.00                          3,310,562.00Add:Gains from change of fir
                                                   -25,480.00                           -88,247.00value (―-‖for loss)
    Investment gain(―-‖for loss)                 2,582,153.00                       -10,602,528.00
    Incl: investment       gains     from
                                                 2,576,108.00                       -10,616,493.00affiliatesGains from currency exchange(―-‖for loss)
    III. Operational profit(―-‖for loss            264,217.00                        -17,466,634.00
    Add:Non-business income                           29,498.00                              8,308.00
    Less:Non business expenses                       582,915.00                              8,088.00Incl : Loss from disposal ofnon-current assets
    IV.Total profit(―-‖for loss)                   -289,200.00                        -17,466,414.00
    Less:Income tax expenses                          -41,869.00                           -42,902.00
    V. Net profit(―-‖for net loss)               -247,331.00                        -17,423,512.00Including: Net profit realized bythe entity taken over before thetakeoverNet profit attributable to the
                                                 -247,331.00                        -17,361,593.00owners of parent company
    Minority shareholders‘ equity                                                          -61,919.00
    VI. Earnings per share:                 --                                   --
    (I)Basic earnings per share                              0                                   -0.1
    (II)Diluted earnings per share                             0                                   -0.1
    VII. Other comprehensive income                    52,626.00                         -6,520,810.00
                                                             深圳中冠纺织印染股份有限公司 2012 年度报告全文
    VIII. Total comprehensive income                                  -194,705.00                          -23,944,322.00Total comprehensive income
    attributable to the owner of the                                  -194,705.00                          -23,882,403.00parent companyTotal comprehensive income
                                                                            0.00                              -61,919.00attributable minority shareholdersEnterprise combination under same controlling at the end of current period. the net profit for the enterpriseto be combined is 0.00.Legal representative :Hu YongfengnPerson-in-charge of the accounting work:Zhang JinliangPerson-in -charge of the accounting organ:Ren Changzhengi4. Profit statement of the Parent Company
    Prepared by: Shenzhen    Victor Onward Textile Industrial Co., Ltd.
                                                                                                 Unit :RMB
    Items                                         Amount in this period                   Amount in last period
    I. Income from the key business                                  2,834,664.00                            1,529,480.00
    Less:Business cost                                            1,585,723.00                                 478,671.00Business tax and surcharge
    Sales expense
    Administrative expense                                          5,266,633.00                            5,378,215.00
    Financial expenses                                          -2,253,351.00                           -3,045,975.00
    Asset impairment loss                                                 61,132.00                         4,731,272.00Add:Gains from change of for
                                                                      -25,480.00                              -88,247.00value (―-‖for loss)
    Investment gain(―-‖for loss)                                        6,045.00                               13,965.00
    Incl: investment gains fromaffiliates
    II. Operational profit(―-‖for loss)                         -1,988,906.00                           -6,086,985.00
    Add:Non-business income                                               5,174.00
    Less:Non- business expenses                                         582,915.00                                 522.00Incl:Loss from disposal ofnon-current assets
                                                           深圳中冠纺织印染股份有限公司 2012 年度报告全文
    III.Total profit(―-‖for loss)                              -2,566,647.00                           -6,087,507.00
    Less:Income tax expenses                                                                            171,351.00
    IV. Net profit(―-‖for net loss)                          -2,566,647.00                           -6,258,858.00
    V. Earnings per share:                              --                                    --
    (I)Basic earnings per share                                           -0.02                                 -0.04
    (II)Diluted earnings per share                                         -0.02                                 -0.04
    VI. Other comprehensive income                                      -2,268.00                        -6,908,399.00
    VII. Total comprehensive income                              -2,568,915.00                          -13,167,257.00Legal representative :Hu YongfengnPerson-in-charge of the accounting work:Zhang JinliangPerson-in -charge of the accounting organ:Ren Changzhengi5. Consolidated Cash flow statement
    Prepared by: Shenzhen     Victor Onward Textile Industrial Co., Ltd.
                                                                                                Unit :RMB
               Items                        Amount in this period                Amount in last period
    I.Cash flows       from    operatingactivitiesCash received from sales of goods
                                                              9,739,794.00                           10,994,411.00or rending of servicesNet increase of customer depositsand capital kept for brothercompanyNet increase of loans from centralbankNet increase of inter-bank loansfrom other financial bodiesCash received against originalinsurance contract
    Net     cash    received          fromreinsurance businessNet increase of client deposit andinvestmentNet increase of trade financial
                                      深圳中冠纺织印染股份有限公司 2012 年度报告全文asset disposalCash received as interest,processing fee and commissionNet increase of inter-bank fundreceived
    Net increase     of   repurchasingbusinessTax returnedOther cash received from business
                                         3,758,324.00                         4,554,589.00operation
    Sub-total of cash inflow                13,498,118.00                        15,549,000.00Cash paid for purchasing of
                                         1,460,804.00merchandise and servicesNet increase of client trade andadvanceNet increase of savings n centralbank and brother companyCash paid for original contractclaimCash paid for interest, processingfee and commissionCash paid for policy dividendCash paid to staffs or paid for
                                         3,953,848.00                         3,746,246.00staffs
    Taxes paid                               2,149,524.00                         2,079,732.00Other cash paid for business
                                         6,318,360.00                         5,520,592.00activitiesSub-total of cash outflow from
                                        13,882,536.00                        11,346,570.00business activitiesCash flow generated by business
                                          -384,418.00                         4,202,430.00operation, net
    II.Cash flow       generated    byinvestingCash received from investmentretrieving
    Cash received as investment gains                                                96,861.00Net cash retrieved from disposal
                                           30,000.00                              9,890.00of fixed assets, intangible assets,
                                        深圳中冠纺织印染股份有限公司 2012 年度报告全文and other long-term assetsNet cash received from disposal
    of    subsidiaries   or   otheroperational unitsNet cash received from disposal
    of    subsidiaries   or   otheroperational unitsSub-total of cash inflow due to
                                             30,000.00                            106,751.00investment activitiesCash paid for construction of
    fixed assets, intangible assets and         690,127.00                             18,535.00other long-term assetsCash paid as investmentNet increase of loan againstpledge
    Net     cash     received    fromsubsidiaries and other operationalunitsOther cash paid for investmentactivities
    Sub-total of cash outflow     due to
                                            690,127.00                             18,535.00investment activitiesNet cash flow generated by
                                           -660,127.00                             88,216.00investment
    III.Cash flow      generated      byfinancingCash received as investmentIncl: Cash received as investmentfrom minor shareholdersCash received as loansCash received from bond placing
    Other financing       –related   ashreceivedSub-total of cash inflow fromfinancing activities
    Cash to repay debts                         126,343.00                            129,462.00Cash paid as dividend, profit, orinterests
                                                          深圳中冠纺织印染股份有限公司 2012 年度报告全文Incl: Dividend and profit paid bysubsidiaries to minor shareholdersOther cash paid for financingactivitiesSub-total of cash outflow due to
                                                              126,343.00                            129,462.00financing activitiesNet cash flow generated by
                                                              -126,343.00                          -129,462.00financingIV. Influence of exchange rate
    alternation on cash and cash                                       -1,166.00                     -2,548,481.00equivalentsV.Net increase of cash and cash
                                                            -1,172,054.00                         1,612,703.00equivalentsAdd: balance of cash and cash
    equivalents at the beginning of                             53,399,316.00                        51,786,613.00termVI.Balance of cash and cash
                                                            52,227,262.00                        53,399,316.00equivalents at the end of termLegal representative :Hu YongfengnPerson-in-charge of the accounting work:Zhang JinliangPerson-in -charge of the accounting organ:Ren Changzhengi6. Cash flow statement of the Parent CompanyPrepared by: Shenzhen Victor Onward Textile Industrial Co., Ltd.
                                                                                           Unit :RMB
               Items                      Amount in this period                 Amount in last period
    I.Cash flows     from      operatingactivitiesCash received from sales of goods
                                                             1,567,887.00                         1,734,055.00or rending of servicesTax returnedOther cash received from business
                                                             2,466,260.00                         2,501,703.00operation
    Sub-total of cash inflow                                     4,034,147.00                         4,235,758.00
    Cash paid for purchasing of                                  1,460,804.00
                                      深圳中冠纺织印染股份有限公司 2012 年度报告全文merchandise and servicesCash paid to staffs or paid for
                                         2,557,382.00                         2,335,711.00staffs
    Taxes paid                                905,283.00                            923,458.00Other cash paid for business
                                         3,330,336.00                         2,087,780.00activitiesSub-total of cash outflow from
                                         8,253,805.00                         5,346,949.00business activitiesCash flow generated by business
                                        -4,219,658.00                         -1,111,191.00operation, net
    II.Cash flow        generated   byinvestingCash received from investmentretrieving
    Cash received as investment gains                                                96,861.00Net cash retrieved from disposal
    of fixed assets, intangible assets,        30,000.00                              9,890.00and other long-term assetsNet cash received from disposal
    of    subsidiaries   or   otheroperational units
    Other cash receivable           forinvestment activitiesSub-total of cash inflow due to
                                           30,000.00                            106,751.00investment activitiesCash paid for construction offixed assets, intangible assets andother long-term assetsCash paid as investment
    Net     cash     received    fromsubsidiaries and other operationalunitsOther cash paid for investmentactivities
    Sub-total of cash outflow   due toinvestment activitiesNet cash flow generated by
                                           30,000.00                            106,751.00investment
    III.Cash     flow   generated   by
                                                          深圳中冠纺织印染股份有限公司 2012 年度报告全文financingCash received from absorbinginvestmentCash received as loansCash received from bond placing
    Other financing       –related   ashreceivedSub-total of cash inflow fromfinancing activitiesCash to repay debtsCash paid as dividend, profit, orinterestsOther cash paid for financingactivitiesSub-total of cash outflow due tofinancing activitiesNet cash flow generated byfinancingIV. Influence of exchange rate
    alternation on cash and cash                                         4.00                        -1,089,583.00equivalentsV.Net increase of cash and cash
                                                            -4,189,654.00                        -2,094,023.00equivalentsAdd: balance of cash and cash
    equivalents at the beginning of                             21,483,163.00                        23,577,186.00termVI.Balance of cash and cash
                                                            17,293,509.00                        21,483,163.00equivalents at the end of termLegal representative :Hu YongfengnPerson-in-charge of the accounting work:Zhang JinliangPerson-in -charge of the accounting organ:Ren Changzhengi7. Consolidated Statement on Change in Owners‘ EquityPrepared by: Shenzhen Victor Onward Textile Industrial Co., Ltd.Amount in this period
                                                                                            Unit:RMB
                                                                 深圳中冠纺织印染股份有限公司 2012 年度报告全文
                                                                   Amount in this period
                                          Owner‘s equity Attributable to the Parent Company
                                                                                                 Minor
                Items                                Less:         Surplu Comm                           Total of
                                            Capital        Special                 Attribu      sharehol
                                    Share           Shares            s    on risk                       owners‘
                                            reserve          ized                   table Other ders‘
                                    Capital            in          reserve provisi                        equity
                                               s           reserve                 profit        equity
                                                     stock            s      on
                                    169,142 39,742,4                26,704,          -116,02 -515,91 -1,373,51 117,673,58I.Balance at the end of last year
                                    ,356.00     73.00               791.00          6,610.00          4.00   4.00         2.00Add: Change of accounting
    policyCorrecting of previous errors
        Other
    II.Balance at the beginning of      169,142 39,742,4                26,704,          -116,02 -515,91 -1,373,51 117,673,58
    current year                        ,356.00     73.00               791.00          6,610.00          4.00   4.00         2.00
                                              48,311.0                               -247,33                        -194,705.0
    III.Changed in the current year                                                                   4,315.00   0.00
                                                    0                                      1.00                             0
                                                                                     -247,33                        -247,331.0
    (I) Net profit                                                                                           0.00
                                                                                           1.00                             0
                                              48,311.0
    (II)Other misc.income                                                                         4,315.00   0.00 52,626.00
                                                    0
                                              48,311.0                               -247,33                        -194,705.0
    Total of (I) and (II)                                                                             4,315.00   0.00
                                                    0                                      1.00                             0(III) Investment or decreasingof capital by owners1. Capital inputted by owners2.Amount of shares paid andaccounted as owners‘ equity3. Other(IV)Profit allotment1.Providing of surplus reserves2.Providing of common riskprovisions3.Allotment to the owners (orshareholders)
    4.Other(V) Internal transferring ofowners‘ equity1. Capitalizing of capital
                                                                 深圳中冠纺织印染股份有限公司 2012 年度报告全文reserves (or to capital shares)2. Capitalizing of surplusreserves (or to capital shares)3.Making up losses bysurplus reserves.4. Other(VI) Special reserves1. Provided this year2.Used this term(VII)Other
    IV. Balance at the end of this      169,142 39,790,7                26,704,          -116,27 -511,59 -1,373,51 117,478,87
    term                                ,356.00    84.00                791.00          3,941.00       9.00       4.00        7.00Amount in last year
                                                                                                           Unit:RMB
                                                                    Amount in last year
                                          Owner‘s equity Attributable to the Parent Company
                                                                                                 Minor
                 Items                               Less:         Surplu Comm                           Total of
                                            Capital        Special                 Attribu      sharehol
                                    Share           Shares            s    on risk                       owners‘
                                            reserve          ized                   table Other ders‘
                                    Capital            in          reserve provisi                        equity
                                               s           reserve                 profit        equity
                                                     stock            s      on
                                    169,142 39,872,5                26,704,          -98,665, 5,874,83 -1,311,59 141,617,90I.Balance at the end of last year
                                    ,356.00    34.00                791.00            017.00       5.00       5.00        4.00Add:Retrospective adjustmentcaused by merger of entitiesunder common controlAdd: Change of accounting
       policyCorrecting of previous errors
         Other
    II.Balance at the beginning of      169,142 39,872,5                26,704,          -98,665, 5,874,83 -1,311,59 141,617,90
    current year                        ,356.00    34.00                791.00            017.00       5.00       5.00        4.00
    \ III.Changed in the current                  -130,06                                -17,361, -6,390,7 -61,919.0 -23,944,32
    year                                             1.00                                 593.00      49.00          0        2.00
                                                                                     -17,361,             -1,731,98 -19,093,58
    (I) Net profit
                                                                                      593.00                  9.00        2.00
                                              -130,06                                           -6,390,7 1,670,070 -4,850,740.
    (II)Other misc.income
                                                 1.00                                             49.00        .00         00
                                                          深圳中冠纺织印染股份有限公司 2012 年度报告全文
                                            -130,06                        -17,361, -6,390,7 -6,191,90 -23,944,32Total of (I) and (II)
                                               1.00                         593.00    49.00      0.00        2.00(III) Investment or decreasingof capital by owners1. Capital inputted by owners2.Amount of shares paid andaccounted as owners‘ equity3. Other
    (IV)Profit allotment1.Providing of surplus reserves2.Providing of common riskprovisions3.Allotment to the owners (orshareholders)
       4.Other(V) Internal transferring ofowners‘ equity1. Capitalizing of capitalreserves (or to capital shares)2. Capitalizing of surplusreserves (or to capital shares)3.Making up losses bysurplus reserves.4. Other(VI) Special reserves1. Provided this year2.Used this term
    (VII)Other
    IV. Balance at the end of this    169,142 39,742,4          26,704,        -116,02 -515,91 -1,373,51 117,673,58
    term                              ,356.00    73.00           791.00       6,610.00     4.00      4.00        2.00Legal representative :Hu YongfengnPerson-in-charge of the accounting work:Zhang JinliangPerson-in -charge of the accounting organ:Ren Changzhengi
                                                                    深圳中冠纺织印染股份有限公司 2012 年度报告全文8. Statement of change in owner‘s Equity of the Parent CompanyPrepared by: Shenzhen Victor Onward Textile Industrial Co., Ltd.Amount in this period
                                                                                                      Unit:RMB
                                                                      Amount in this period
                 Items
                                                             Less: Specializ            Common               Total of
                                       Share        Capital                    Surplus            Attributa
                                                            Shares in    ed                risk              owners‘
                                       Capital     reserves                    reserves           ble profit
                                                             stock    reserves          provision             equity
                                      169,142,35 31,606,598                      26,309,287         -90,792,58 136,265,65I.Balance at the end of last year
                                            6.00        .00                             .00              3.00         8.00
    Add:     Change     of   accounting
       policyCorrecting of previous errors
         Other
    II.Balance at the beginning of 169,142,35 31,606,598                             26,309,287         -90,792,58 136,265,65
    current year                                6.00        .00                             ..00             3.00         8.00
                                                                                                   -2,568,914. -2,568,914.III.Changed in the current year
                                                                                                           00          00
                                                                                                   -2,566,647. -2,566,647.
    (I) Net profit
                                                                                                           00          00
    (II)Other misc.income                                                                            -2,267.00   -2,267.00
                                                                                                   -2,568,914. -2,568,914.Subtotal of (I) and (II)
                                                                                                           00          00(III) Investment or decreasing ofcapital by owners1. Capital inputted by owners2.Amount of shares paid andaccounted as owners‘ equity3. Other
    (IV)Profit allotment1.Providing of surplus reserves2.Providing of common riskprovisions3.Allotment to the owners (orshareholders)
                                                                   深圳中冠纺织印染股份有限公司 2012 年度报告全文
       4.Other(V) Internal transferring ofowners‘ equity1. Capitalizing of capitalreserves (or to capital shares)2. Capitalizing of surplusreserves (or to capital shares)3.Making up losses by surplusreserves.4. Other(VI) Special reserves1. Provided this year2.Used this term
    (VII)Other
    IV. Balance at the end of this        169,142,35 31,606,598                    26,309,287          -93,361,49 133,696,74
    term                                        6.00        .00                            .00              7.00         4.00Amount in last year
                                                                                                     Unit:RMB
                                                                      Amount in last year
                 Items
                                                             Less: Specializ           Common               Total of
                                       Share        Capital                   Surplus            Attributa
                                                            Shares in   ed                risk              owners‘
                                       Capital     reserves                   reserves           ble profit
                                                             stock    reserve          provision             equity
                                      169,142,35 31,606,598                     26,309,287         -77,625,32 149,432,91I.Balance at the end of last year
                                            6.00        .00                            .00              6.00         5.00
    Add:     Change     of   accounting
       policyCorrecting of previous errors
         Other
    II.Balance at the beginning of 169,142,35 31,606,598                            26,309,287         -77,625,32 149,432,91
    current year                                6.00        .00                            .00              6.00         5.00
                                                                                                   -13,167,25 -13,167,25III.Changed in the current year
                                                                                                        7.00         7.00
                                                                                                  -6,258,858. -6,258,858.
    (I) Net profit
                                                                                                          00          00
                                                                                                  -6,908,399. -6,908,399.
    (II)Other misc.income
                                                                                                          00          00
                                                            深圳中冠纺织印染股份有限公司 2012 年度报告全文
                                                                                            -13,167,25 -13,167,25Subtotal of (I) and (II)
                                                                                                 7.00        7.00(III) Investment or decreasing ofcapital by owners1. Capital inputted by owners2.Amount of shares paid andaccounted as owners‘ equity3. Other
    (IV)Profit allotment1.Providing of surplus reserves2.Providing of common riskprovisions3.Allotment to the owners (orshareholders)
       4.Other(V) Internal transferring ofowners‘ equity1. Capitalizing of capitalreserves (or to capital shares)2. Capitalizing of surplusreserves (or to capital shares)3.Making up losses by surplusreserves.4. Other(VI) Special reserves1. Provided this year2.Used this term
    (VII)Other
    IV. Balance at the end of this      169,142,35 31,606,598               26,309,287          -90,792,58 136,265,65
    term                                      6.00        .00                      .00               3.00        8.00Legal representative :Hu YongfengnPerson-in-charge of the accounting work:Zhang JinliangPerson-in -charge of the accounting organ:Ren Changzhengi
                                                           深圳中冠纺织印染股份有限公司 2012 年度报告全文(III)Basic Information of the CompanyShenzhen Victor Onward Textile Industrial Co., Ltd. (hereinafter referred to as "the Company"), grew outof the Xingnan Printing Factory Co., Ltd, founded in 1980, was the first wholly foreign-owned enterprisein Shenzhen. In April 1984, Xingnan Printing Factory Co., Ltd was changed into foreign joint venture, andwas renamed Shenzhen Victor Onward Textile Industrial Co., Ltd. . On November 19, 1991, the Companywas reorganized into a joint stock limited company and renamed Shenzhen Victor Onward TextileIndustrial Co., Ltd. pursuant to the approval of Shenzhen Municipal Government.The domestically listed RMB ordinary shares ("A shares, Stock code: 000018" ) and domestically listedforeign investment shares ("B shares ,stock code: 200018") issued by the Company were listed onShenzhen Stock Exchange in 1992.By December 31, 2012, the total share capital was 169,142,356 million shares, of which circulatingA-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 for25.51% 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 for3.44% of the total equity, Union Group holds 31.32% of equity of Union Holdings and has the right tocontrol Union Holdings, thus Union Group is the actual controller of the Company.
      By December 31, 2012, Victor Onward printing and dyeing (Hong Kong) Co., Ltd. (hereinafterreferred 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. (hereinafterreferred to as "Shengzhong") ,Shenzhen East Asia Victor onward Holding (hereinafter referred to as ―EastAsia Company)and Shenzhen Nanhua Printing and Dyeing as well as its wholly-funded subsidiary NanhuaXingye Co., Ltd (hereinafter referred to as "Nanhua Xingye") are all subsidiaries of the Company.The Group is mainly engaged in the production and processing (printing and dyeing) and sales of varioushigh-grade fabrics of pure cotton, pure linen, polyester-mixed cotton, linen cotton and mixed fiber andfinished garments. Registered address: 26 Kuipeng Road, Kuiyong Town, Longgang District, ShenzhenLegal Representative: Hu Yongfeng(IV)Principal accounting policies, accounting estimates and early errors1.Basis for the preparation of financial statements
      The financial statements of the Group were prepared on basis of continuous operation and accordingto actual transactions and matters, Accounting Standards for Business Enterprises promulgated by Ministryof Finance and relevant regulations and the accounting policies and estimation stated in Note IV -Important Accounting Policies and Accounting Estimate.
                                                             深圳中冠纺织印染股份有限公司 2012 年度报告全文2. Statement on complying with corporate accounting standardsThe financial statements of the Group comply with the requirements of Accounting Standards forBusiness Enterprises, truly reflect the integrity of the financial situation, operating results and cash flows,and other relevant information of the company.3. Fiscal yearThe fiscal year of the Group starts on January 1 and ends on December 31 on the Gregorian calendar.4. Accounting standard money
      The Company and two subsidiaries namely Nanhua Company and Shenzhen East Asia Company takeRMB as the base currency for bookkeeping while the other subsidiaries take Hong Kong Dollar as the basecurrency for bookkeeping. In the report year, the Company and its subsidiary Nanhua Company changedtheir base currency for bookkeeping from HKD into RMB because they received and made cash paymentin RMB.5. Accounting process method of enterprise consolidation under same and different controlling.(1)Enterprise merger under same control:(2)Enterprise merger under different control:
    6. The compiling method of combined financial statement
    (1). Principles to determine the scope of merger:
    The Group will include the subsidiaries which have actual controlling right and the subjects whichhave special purpose into the scope of consolidated financial statements.
    (2)Accounting methods adopted in consolidated financial statements:The consolidated financial statements of the Group shall be compiled in accordance with EnterpriseAccounting Standards No. 33 - Consolidated Financial Statements and the related provisions, the majorinternal transaction in the scope of consolidation and transactions shall be offset. The part of shareholdersequity of the subsidiary which does not belong to the parent company, shall be individually listed as equityof minority shareholders in the consolidated financial statement. If the accounting policy and accountingperiod of the subsidiary and the company are not consistent, when compile consolidated financialstatement, the financial statement of the subsidiary shall be adjusted according to the accounting policyand accounting period of the company.
                                                                      深圳中冠纺织印染股份有限公司 2012 年度报告全文
        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.
           (2)Accounting treatment when the share equity of the same subsidiary is purchased and sold, or sold
         and surcease in successively two years.
        (7) Recognition Standard of Cash & 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 arereadily convertible to known amount of cash and subject to insignificant risk of changes in value.8. Foreign currency Convert(1)Foreign currency TransactionsThe foreign currency transactions the Group were accounted according to the amount of foreign currency on thefirst day of the current month converting to the amount of bookkeeping currency. On the balance sheet date,foreign currency monetary items would be converted into RMB by using the spot exchange rate on the balancesheet date, the conversion differences produced shall be directly included in the current loss and gain except theexchange differences produced by foreign currency special loans borrowed for purchasing or production of theassets which meet the capitalization conditions. The foreign currency non-monetary items measured by fair valueshall be converted into RMB by the spot exchange rate on the fair value date, the conversion differences producedshall be directly included in current loss and gain as fair value changes. The foreign currency non-monetary itemsmeasured by historical costs shall be converted by using the spot exchange rate on the transaction date, and itsRMB amount will not be changed.(2)Foreign currency statement ConvertThe financial statements of the company and the subsidiaries making HK dollars as bookkeeping currency shall beconverted into RMB. In the course of conversion, the assets & liabilities items shall be converted by using the spotexchange rate on the balance sheet date, the items of shareholders equity except for the retained profit shall beconverted according to the spot exchange rate, the items of incomes and expenses in the profit statement shall beconverted by the approximate exchange rate of spot exchange rate on the transaction date. The conversiondifferences of foreign currency statements produced in the above conversions shall be individually listed under theitem of shareholders equity.From January 1 of the report year, the Company and its subsidiary Nanhua Company changed their base currencyfor bookkeeping from HKD into RMB because they received and made cash payment in RMB. At the time ofchange, all items were translated into items stated in base currency for bookkeeping at the spot exchange ratequoted on the day of change. The amount after translation was taken as historical cost calculated in new basecurrency for bookkeeping.
                                                                     深圳中冠纺织印染股份有限公司 2012 年度报告全文The cash flow in the cash flow statement are converted by the average exchange rate of the market rates announcedin the accounting period. The influences on cash flow from the changes of exchange rate are separately listed incash flow statement.
           9. Financial instruments
        (1) Classification of financial instruments:According to investment purposes and economic nature, the financial assets of the Group can be divided into thefinancial assets measured by fair value and the changes included in the current loss and gain, the expiredinvestments 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 tothe 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 ordetermined recovering amount, and the management level has the intention or ability to hold the assets.Receivables: refer to the non-derivative financial assets which have no quotation in active market but have fixed ordetermined recovering amount, including notes receivable, accounts receivable, interest receivable, dividendsreceivable and other receivables.Financial assets for sale: include the non-derivative financial assets which are recognized as for sale when theyare initially confirmed, and the financial assets which are not divided into other categories.
        (2) Measurement of financial instrumentsFinancial assets are conducted initial confirmation by at fair value. The relevant expenses to obtain the financialassets measured by fair value and the changes included in the current loss and gain shall be included in the currentloss and gain, the relevant 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 financialassets to be sold in accordance with the fair value of follow-up measures; receivables and investments held tomaturity 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 lossand gain shall be included in the changing loss and gain of fair value; all the interest and cash dividends obtainedduring the period holding the assets shall be confirmed as investment income; upon the disposal of the assets, thedifferences 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.The changes of fair values of financial assets measured by fair value and the changes included in the current lossand gain shall be included in the changing loss and gain of fair value; all the interest and cash dividends obtainedduring the period holding the assets shall be confirmed as investment income; upon the disposal of the assets, thedifferences 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.
                                                                     深圳中冠纺织印染股份有限公司 2012 年度报告全文
    Except for impairment losses and monetary financial assets in foreign currency exchange gains and losses,         thefinancial assets measured by fair value and the changes included in the current loss and gain, on the financial sheetdate, the Group will check the book value of other financial assets on the balance sheet date, if there is objectiveevidence showing that impairment has happened on a financial asset, provision for the impairment shall be drown.
              (3) Recognition basis and measurement for transferred financial 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, 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 in book amount of difference meter into Dang period
        profit and loss.
        (4)The conditions to stopping the financial liabilitiesThe financial liabilities of our Group shall be classified into the financial liabilities or other ones which aremeasured at their fair values and the variation of which is recorded into the profits and losses of the current periodwhen they are initially recognized.The financial liabilities, which are measured at their fair values and the variation of which is recorded into theprofits and losses of the current period, including transactional financial liabilities and the financial liabilitiesdesignated which are measured at their fair values and variation of which is recorded into the profits and losses ofthe current period when they are initially recognized, shall be made subsequent measurement on its financial assetsaccording to their fair values, and the profits and losses arising from the change in the fair value and the dividendsand interests expenses related to the financial liability shall be recorded into the profits and losses of the currentperiod.The subsequent measurement shall be made on the basis of the post-amortization costs by adopting the actualinterest rate method for other financial liabilities.
                                                                         深圳中冠纺织印染股份有限公司 2012 年度报告全文When financial liabilities present obligations in whole or in part have been discharged, terminating confirmed partof the financial liabilities or obligations have been discharged. Terminating confirmed part of the differencebetween the book value and paying the price, included in the current profits and losses.(5)The determination method for fair value of financial assets and financial liabilities1.If there is active market for a financial instrument, the quoted prices in the active market shall be used todetermine the fair values thereof. In the active market, the quoted prices of our Group for the financial assets itholds or the financial liabilities it plans to assume shall be the present actual offer for the corresponding fair valuesof assets or liabilities, while the quoted prices of our Group for the financial assets it plans to acquire or thefinancial liabilities it has assumed shall be the available charge for the corresponding fair values of assets orliabilities. Where there is no available offer or charge for a financial asset or financial liability, but there is no anysignificant change to the economic environment after the latest transaction day, we shall adopt the market quotedprice of the latest transaction to determine the fair value of the said financial asset or financial liability.2.Where there is no active market for a financial instrument, we shall adopt value appraisal techniques to determineits fair value. The value appraisal techniques mainly include the prices adopted by the parties, who are familiarwith the condition, in the latest market transaction upon their own free will, the current fair value obtained byreferring to other financial instruments of the same essential nature, the cash flow capitalization method and theoption pricing model, etc.(6)Providing of impairment provision on financial assets (exclude receivable accounts)
         Except for financial assets at fair value through profit and loss, the Group assesses at the balance sheet date
         the carrying amount of other financial assets. If there is any objective evidence that a financial asset is
         impaired, the Group provides for such impairment losses.
         If there is objective evidence that an impairment loss has been incurred on financial assets carried at
         amortized cost, the amount of the loss is measured as the difference between the asset‘s carrying amount
         and the present value of estimated future cash flows (excluding future credit losses that have not been
         incurred). If in a subsequent period, the amount of the impairment loss increases and the increase can be
         related objectively to an event occurring after the impairment is recognized, the previously recognized
         impairment loss is reversed by adjusting the allowance account. The amount of the reversal is recognized in
         the income statement.
         If the fair value of an available-for-sale financial asset incurred a significant or prolonged decline, the
         cumulative loss arising from the decline in fair value that has been recognized directly in shareholders‘
         equity is removed from shareholders‘ equity and recognized in the income statement. If, after impairment
         loss has been recognized on an available-for-sale debt instrument and the fair value of the debt instrument
         increases in a subsequent period whereby the increase can be objectively related to an event occurring after
         the impairment losses are recognized, the impairment loss is reversed and recognized in the profit and loss.
         If, after impairment loss has been recognized on an available-for-sale equity instrument, the fair value of
         the equity instrument increases in a subsequent period, the impairment loss is directly recognized in
         shareholders‘ equity.
                                                                     深圳中冠纺织印染股份有限公司 2012 年度报告全文
        (7)If investment held to mature is recztegorized to sellable financial assets, please state the intention or
        evidence of change incapability
        10. Recognition standard and providing basis of bad debt provision on receivable accountsThe Group will recognize the following cases as the determination standard of loss on bad debts for accountsreceivable: 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; therepayment obligations are delayed and failed to be performed beyond 3-year by the debt entities; there are otherabsolute 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 drownprovision for bad debt by the method of individual recognition at period end and were included in the current lossand gain. The receivables which were not to be recovered, after being approved by the Group, would be regardedas bad debt loss and the provision for bed debt would be written off.(1)Accounts receivable with material specific amount and specific provisioned bad debt preparation.
                                                                      深圳中冠纺织印染股份有限公司 2012 年度报告全文
                                                              Account receivable with special account receivableJudgment criteria or amount standard of material specific
                                                              exceeding RMB 1 million is viewed as materialamount or amount criteria
                                                              accounts receivable.
                                                              Provision Had debt preparation in accordance withProvision method with material specific amount and
                                                              the difference of present value of future cash flowprovision of specific bad debt preparation
                                                              below the book value .(2)The accounts receivable of bad debt provisions made by Group
                                 Method for recognition
             Name                     of impairment                     Basis of determination of groups
                                  allowances by group
                                                          The group is classified by the credit risk features
    Group of account age             The age analysis
                                                           basised on the account age of receivables
                                                          The Group is classified by the credit risk features based
    Group of Related party           Other                    on the relations of account receivables and transaction
                                                          objects
                                                          The Group is classified by the credit risk features
    Deposit group                    Other
                                                          basised on the account age of receivables .Accounts on age basis in the portfolio:√applicable□ not applicable
               Age                    Rate for receivables(%)                 Rate for other receivables(%)Within 1 year(Included 1
                                                                3%                                                 3%year)
    1-2 years                                                      10%                                               10%
    2-3 years                                                      50%                                               50%
    Over 3 years                                                 100%                                               100%Accounts on percentage basis in group:□ applicable √not applicableAccounts on other basis in group:√applicable□ not applicable
                     Name                                                       Notes
                                                Special relationship between the related party and the Group
    Related party Group                             (such as joint ventures, associates, etc.), there is a little balance
                                                between the predicted future cash flow and the carrying amount.
                                                Including the rent deposit, purchase deposit and reserve deposit,
                                                etc., but without great individual amount and the bad debtDeposit group
                                                reserves withdrawn by combination are difficult to reflect the
                                                accounts receivable of risk features.
                                                                    深圳中冠纺织印染股份有限公司 2012 年度报告全文
    (3)Account receivable with non-material specific amount but specific bad debt preparation
                                         Accounts receivable with non-material specific amount and being not
    Reason of specific bad debt              able to relent its risk character by provisioning bad debt preparation in
    preparation provision:                  accordance with portfolio
    Provision method of bad debt             Bad debt preparation will be provisioned in accordance with the
    preparation                              difference of present value of its future cash flow below its book value.
    11.Inventory(1)Inventory classificationThe inventories of the Company include raw materials, packing articles, low-value and easily-wornarticles ,Work-in-process and stock goods ,etc..(2)Pricing method of stock delivered
    Stock delivered is measured according to weighted average method.(3)Confirmation basis of stock net realizable value and withdrawal method of inventory falling price reserves.The inventory at year end can be priced by depending on which is lower between cost and realizable net value ifthe inventory were damaged or full or partly unused or the sale price lower than cost and other reasons. Theprovision for devaluation of finished products and big raw materials shall be drown according to the differencewhich the cost of individual inventory item higher than the realizable net value; other raw materials with largequantity and low unit price shall be drown provision for devaluation according to categories.Goods in stock, products in production and other materials directly for the sale, the amount of the realizable netvalue shall be determined according to the estimated sale price deducting the estimated sale expenses and relevanttaxes; the amount of realizable value of material inventory for production shall be determined according to theestimated sale value of finished products deducting the estimated cost which will happen before the completionand estimated sale cost and relevant taxes. The inventory holding for the implementation of sale contract orservice contract, the realizable net value shall be accounted on the basis of contract price; if the quantity ofinventory held by enterprise is bigger than the quantity ordered in the sale contract, the realizable net value of theexcess inventory shall be accounted on the basis of general sale price.(4)Inventory systemInventory system adopts the perpetual inventory method.(5)Amortization method of consumption goods with low value and wrap pageConsumption goods with low value: Consumption goods with low value adopt one time amortization methodwhen used. Packing:
                                                                    深圳中冠纺织印染股份有限公司 2012 年度报告全文Wrap page: Wrap page adopts one time amortization when used.
    12.Long-term equity investment(1)Investment cost confirmationLong-term equity investments mainly include the equity investments which are held by the Group and the onesthat the units being invested can be controlled or jointly controlled, or the equity investments which have notquotation in active market and the fair value can not be reliably measured. The long-term equity investmentsobtained through merger of companies under same control the merger were the owner's equity book value of theshares as a long-term equity investment of initial investment cost. The long-term equity investments obtainedthrough 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 equityinvestments stated above, the long-term equity investment obtained by cash, the initial investment obtained bycash 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 determinedaccording 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 investmentobtained by debt restructuring, non-monetary assets or other methods, the initial investment cost shall bedetermined according to the relevant accounting standards.(2)Rear measuring and profit and loss confirmation methodIf the subsidiary uses the cost method to account, adjustment shall be conducted according to equity method whenprepare the consolidated financial statements; the joint venture and joint venture investment using the equitymethod; for the long-term equity investments which have no control or joint control or significant influence andno price in an active market, the method of cost shall be adopted to account; the long-term equity investmentswhich have no control or joint control or significant influence, there are quotations in an active market and the fairvalue can be reliably measured, shall be accounted as financial assets for sale. When using the method of costaccounting, the long-term equity investments were priced by the initial investment costs.Additional investment torecover the cost of long-term equity investment. When using the equity method accounting, the current investmentgains and losses are the share of net losses and gains to be owned or shared and achieved in the current year by theunit being invested. When determining the share to be shared by the unit being invested, on the basis of the fairvalue of the identifiable assets, according to the accounting policy and accounting period of the Group, offsettingthe internal transaction loss and gain and the part that the equity proportion attributable to the joint enterprise andunited enterprise, and confirm the net profit of the unit being invested after profit adjustment. For the long-termequity investments on joint venture enterprises and joint owned enterprises held before the first implementationdate, 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 asinvestment gains and losses. The Group shall adopt the cost method to calculate for those invested units that neverhave the jointed control or significant impacts due to the investment reduced, and a long-term equity investmentfor which there is no quoted price in the active market and whose fair value cannot be reliably measured; Also, thecost method shall be adopted to calculate for the long-term equity investment able to be implemented and
                                                                   深圳中冠纺织印染股份有限公司 2012 年度报告全文controlled to the invested units due to the investment supplemented; Moreover, the equity method shall beadopted to account for performing the jointed control or significant impacts to the invested units but no controlformed due to the investment supplemented, or without control to the invested units but able to implement thelong-term equity investment of jointed control or major impacts to the invested units due to disposing of theinvestment. The gap between the carrying amount and actual payment gained in disposal of the long-term equityinvestment will be recorded into the investment interest of the current period. Using the equity method forcalculating the long-term equity investment which is recorded into the owner's equity due to other changes exceptfor the net profits or losses of the invested units, the initial parts recorded into the owner's equity shall betransferred into the investment returns of the current period when disposal of the investment.(3) Confirm the basis that has common control and major infection upon invested unit.Joint control refers to the control that common control on some economic activities according to contract. Thereferences for the determination of common control are the business activities which any operating party can notbe controlled independently; the decisions relating to basic operating activities of the joint venture enterprise areto be agreed by all joint parties. Significant impact refers to having the right to participate in decision making onfinancial and operating policies of the units being invested but can not control or jointly control the making ofthese policies. The determining reference of significant impact is to own 20% (inclusive) or more but less than50% of the voting shares directly owned by the Group or owned through subsidiaries, unless there is clearevidence that under that circumstance the production operating decision can not be participated and no majorinfluence will formed.(4)Depreciation testing method and depreciation reserve withdrawal method.
    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 thatthe assets may have impairment, the Group will conduct impairment test. The intangible assets without certainservice life, whether it has impairment signs, impairment tests shall be conducted at the end of each year. If therecoverable amount of single asset can not be tested, it shall be tested on the basis of the asset group the assetbelong to or the asset combination.After the impairment test, if the book value of the asset exceeds its recoverable amount, the deficiency isrecognized as the impairment loss, upon the confirmation of the above assets, they will not be transferred back inthe following accounting period. The recoverable amount of the asset refer to the net amount of the fair value ofthe 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 dueto time passage or normal use.(2) The economic, technical or legal environment of the company and the market of the assets will havesignificant 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, thusaffecting the discount rate of the predicted cash flow, and resulting in the significant reduction in the amount ofrecoverable 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.
                                                                    深圳中冠纺织印染股份有限公司 2012 年度报告全文(6)There are evidences of internal report showing that the economic performance of the assets has been lower thanor less than what expected, such as the net cash flow created by assets or the operating profits (or losses) realizedare far below (or above)the expected amount.(7) Other signs showing the assets may have or have had impairment.13. Investment real estateThe 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 thepurchase price, related taxes and fees and other expenses which can be directly attributable to the assets; the costsof investment real estate self constructed include the necessary expenses to construct the asset to reach thepredicted use state.The Group adopts the cost method to conduct follow-up measurement on investment real estates are accounteddevaluations and amortized. The expected service life, net residual rate and value depreciation rates of investmentreal estate are as follows:
    Type                                 Expected useful     Estimated residual value Annual depreciatio
                                          life(Year)              rate                   n rate(%)
    Real estate in                   20-50 years                                     0%              2%-5%Hongkong
    Real estate in                   20-30 years                                   10%             3%-4.5%China
    If the investment real estate is changed to self use, since the date of change, investment real estate shall beconverted into fixed assets or intangible assets. The function of self-use real estate is to earn rent or capitalappreciation, then since the date of change, the fixed assets or intangible assets shall be converted into investmentreal estate. When the conversion happens, the book value before the conversion will be the book value after theconversion.When the real estate investment is disposed or will never be used, and economic interests can not be obtainedfrom the disposal, the confirmation of the investment real estate shall be terminated. The amount of the incomefrom the sale, transfer, disposal of the investment in real estate deducting the book value and related taxes and feesshall be included in the current loss and gain.
    Using the fair value model for subsequent measurement, should disclose the accounting policy adoptedpursuant 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 otherrelevant information, so as to estimate the fair value of investment property basis; Indication of when to estimatethe fair value of investment property key assumptions and main determining factors involved.
                                                                     深圳中冠纺织印染股份有限公司 2012 年度报告全文
      14. Fixed assets(1)Confirmation conditions of 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 notbe more than a year, and the unit value is high. Classification of fixed assets: houses and buildings, machinery andequipments, transportation equipments, office equipments and others. The fixed assets shall be measuredaccording to the actual cost to obtain them, including, the cost of purchasing the fixed assets including thepurchase price, value-added tax, import tariffs and other related taxes, and other expenses happened to reach thepredicted use state; the cost of building the fixed assets, which are composed of the expenses to reach thepredicted use state of the assets; the fixed assets invested by investors, the value on the contract or agreement shallbe the accounting value, but if the contract or agreement value is not fair, the fair value shall be accounted; thefixed leased assets, the lower amount of the fair value of leased assets and the present value of the lowest leasepayment 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 notmeeting the conditions of confirming fixed assets, they should be included in the current period.(2)Cognizance evidence and pricing method of financial leasing fixed assets(3)Fixed assets depreciation method
      In addition to the fixed assets which depreciation and impairment had already fully accounted and the landswhich are separately accounted, the Group accounts depreciation on all fixed assets. The method of averagenumber of years will be used when accounting depreciation which will be included in the costs and expenses ofthe relevant assets. The predicted net residual rate, classified depreciation years and depreciation rates are asfollows:
    No           Type                           Expected useful Estimated residual value Annual depreciation r
                                                 life(Year)          rate                     ate(%)
    1          Real estate in                20-50 years                  0%                  2%-5%
               Hongkong
    2          Real estate in                20-30 years                 10%                 3%-4.5%
             China
    3          Machinery and equipment        5-14 years                 10%                  6%-18%
    4          Transportation equipment       4-5 years                  10%                18%-22.5%
                                                                            深圳中冠纺织印染股份有限公司 2012 年度报告全文
    5           Office   equipment       and        5 years                      10%                   18%
              other
    Type                                         Expected useful    Estimated residual value rate   Annual depreciation rate(%)
                                                 life(Year)
    House and Building                 20-50                                                  0%                         2%-5%
    Machinery and equipment            5-14                                                  10%                        6%-18%
    Electronic equipment               5                                                     10%                            18%
    Transportation equipment           4-5                                                   10%                     18%-22.5%(4)Depreciation measuring method and depreciation reserves withdrawn method of fixed assetsRefer to 13. Long-term equity investment (4) - Methods of Impairment Testing and Provision for Impairment forthe details of methods of impairment testing and provision for impairment of fixed assets.(5)Other
       At the end of each year, the Group shall recheck the predicted service life of fixed assets, the predicted netresidual 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, theconfirmation of the fixed assets shall be terminated. The income from the sale, transfer or damage of the fixedassets deducting the book value and related taxes shall be included in the current loss and gain.
       15. Projects under construction(1)Categories of projects under constructionThe 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 the direct materials, direct wages, direct constructioncosts; Measure the turnkey projects according to the price should be paid on the project; measure the project ofequipment installation according to the value, of the equipment, installation costs, and the expenditures on the trialoperation to determine the project costs. The costs of projects under construction also include the cost ofborrowing to be capitalized and exchange gain and loss.(2)Standard and timing for transferring of projects under construction to fixed assetsThe time for the construction project converted to the fixed assets: the fixed assets of the company reached thepredicted state, according to the budget of the project, construction cost or the actual cost of the project, transferthe fixed assets according to the predicted price, account the depreciation from the next month on. Upon finishingthe procedures, make relevant adjustment.
       (3)Impairment text and providing of impairment provisions on projects under construction
                                                                   深圳中冠纺织印染股份有限公司 2012 年度报告全文
      16. Borrowing cost(1)Principle of the recognition of capitalized borrowing costs
    The assets which meet capitalization conditions, refer to the fixed assets, investment real estates and otherinventories which are constructed for a long time (usually more than one year) to achieve the intended use or saleof state to.(2)Capitalizing period of borrowing expenses
    (3)Temporarily suspension of capitalizing period
    If meet the capitalization conditions or non-normal breaks occurred in the course of production and the breaktime is more than three months, then the capitalization of borrowing costs shall be suspended; when theacquisition or construction or production meet the conditions of capitalization and achieve the predicted use orsale state, Asset acquisition or production activities began.(4)Calculating of borrowing expense capitalizing
    Borrowing costs include interest on borrowings, amortization of discount or premium, as well as the supportingcosts and exchange difference due to foreign currency borrowing. The borrowing costs which can be directlyattributed to capitalized condition, and taken place in the capital expenditure, borrowing costs have taken place, inorder to meet the assets available for sale or purchase of the necessary state of construction or productionactivities, the capitalization begins; when the construction or purchase of the conditions of production in line withthe capital assets reached the sale state, the capitalization should stop. And the rest borrowing costs should berecognized as expenses in the current period.
    Borrowing costs include interest on borrowings, amortization of discount or premium, as well as the supportingcosts and exchange difference due to foreign currency borrowing. The borrowing costs which can be directlyattributed to capitalized condition, and taken place in the capital expenditure, borrowing costs have taken place, inorder to meet the assets available for sale or purchase of the necessary state of construction or productionactivities, the capitalization begins; when the construction or purchase of the conditions of production in line withthe capital assets reached the sale state, the capitalization should stop. And the rest borrowing costs should berecognized as expenses in the current period.
    17. Biological assets18.Oil gas assets
    19.Intangible assets(1)Pricing of intangible assets
    The intangible assets of the Group include land use rights and computer software. Including: For theintangible assets purchased, the actual purchase price was the actual cost; For the intangible assets invested by
                                                                      深圳中冠纺织印染股份有限公司 2012 年度报告全文investors, The actual cost of intangible assets invested by investors, shall be determined according to the contractor agreement value, but if the contract or agreement values are not fair, the actual costs shall be determinedaccording to the fair value.(2)Estimation of service life of intangible assets with limited service life
           Name                  Expected useful life                               Basis(3)Intangible assets without certain useful life
    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 amortizedwill 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 andadjusted at the end of each year. Recheck the intangible assets with uncertain service life in each accountingperiod should be rechecked, if there is evidence showing that the service life of the intangible asset is limited, thenestimate its service life and amortized it within the predicted service life.(4)Provision for impairment of investment assetsProvision for impairment of investment assets Refer to 13. Long-term equity investment (4) - Methods ofImpairment Testing and Provision for Impairment for the details of methods of impairment testing and provisionfor impairment.(5)Dividing of research stage and development stage of internal R& D projects(6)Accounting of internal R & D expenses
    20.Long-term amortization expensesThe long-term expenses of the Group to be amortized refer to all the expenses already paid but should beundertaken in the current period or in the coming period with amortization period more than 1 year (not including1 year), the expenses will be amortized averagely in the benefit period. If the long-term prepaid expenses can notbenefit from subsequent accounting period, then all amortization value of the project not amortized should betransferred to the current loss and gain.
                                                                    深圳中冠纺织印染股份有限公司 2012 年度报告全文21.Asset transferring with repurchasing terms22.Predicted liabilities(1)Recognition of Predicted liabilities
    When the external security, commercial acceptance bill discount, pending litigation or arbitration, productquality assurance or business related matters subject to the following conditions at the same time, the Group willidentify it as liabilities: the obligation is a present obligation of the Group; the enforcement of the obligation islikely to lead to the outflow of economic benefits; the amount of the obligation can be measured reliably.(2)Accounting of Predicted liabilities
    Predicted liabilities shall be conducted initial measurement according to the best estimates of related existingliabilities, and comprehensively consider risks, uncertainties and the time value of money and other factorsrelating to contingent events. Time value of money has the greatest influence, the best estimates shall bedetermined by future cash outflow. On the balance sheet, recheck the book value of predicted liabilities, adjust thebook value to reflect the current best estimates if there are any changes.23.Share payment and equity instrument(1)Category of share payment(2)Recognition of fair value of equity instruments(3)Recognition basis of best estimation of exercisable equity instruments(4)Accounting treatment of share payment plan to be implemented, revised , and terminated24.Repurchasing of the Company‘s shares25. Revenues(1)Recognition time for sales of goods
    When the Group had transferred the ownership of the risks and rewards of the commodities to the buyer, theGroup does not keep the management right relating to ownership and does not implement effective control on thecommodities sold out, the income amount can be reliably measured, and the related economic benefit willpossibly flow into the enterprise, and when the related costs may happen or had happened can be measuredreliably, the realization of the commodity sold out should be confirmed.
                                                                   深圳中冠纺织印染股份有限公司 2012 年度报告全文(2)Incomes from transferring asset use rightThe economic interests relating to transaction can flow into the company, and the relevant incomes and costs canbe reliably measured, the sales income of transferring assets use right shall be confirmed.(3)Confirm the evidence to provide labor income(4)Deciding of completion percentage when percentage basis is adopted to recognize income from serviceproviding or construction contracts26. Governmental subsidy(1)Categories
    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; thesubsidies allocated according to rated standards, they shall be measured according to the amount receivable. Ifgovernment subsidies are non-monetary assets, they shall be measured according to fair value; if the fair value cannot be reliably measured, they shall be measured according to nominal amount (1 yuan).(2)Accounting treatmentThe government subsidies relating to assets shall be recognized as deferred income, and be averagely distributedwithin the service life of relevant assets, and be included in the current loss and gain. If the government subsidiesrelating to income are used to compensate the related expenses and losses, they shall be confirmed as deferredincome and be included in the current loss and gain in the period of confirming relevant expenses. If used tocompensate the relevant expenses and losses happened, they shall be included in the current loss and gain.
    27. Deferred income tax assets/Deferred income tax liability
    (1)Confirmation of deferred income tax assetsDeferred income tax assets and deferred income tax liabilities shall be confirmed according to the differencebetween the tax base of assets and liabilities and their book value (temporary differences). The loss and tax whichcan be offset in the future years shall be recognized as temporary differences to determine the correspondingdeferred income tax assets. On the balance sheet date, deferred income tax assets and deferred income taxliabilities shall be measured by the predicted application rate. The Group shall determine the deferred income taxassets produced by the deductible temporary differences within the amount limit of payable taxes which are likelyused to deduct the temporary differences. The book value of the recognized deferred income tax assets shall bededucted when the deferred income tax assets produced by the deductible temporary differences within theamount limit of payable taxes which are likely used to deduct the temporary differences. When enough payabletax can be obtained, the deducted amount shall be transferred back.
                                                                   深圳中冠纺织印染股份有限公司 2012 年度报告全文
    (2) The confirmation of deferred income tax liabilityDeferred income tax assets and deferred income tax liabilities shall be confirmed according to the differencebetween the tax base of assets and liabilities and their book value (temporary differences).28.Operational leasing and Financing leasing(1)Accounting of operational leasing
    Operating lease refers to the other lease apart from financing lease. As the lessee, during the lease period, theGroup included the related asset cost and current losses and gains by the straight-line method during the leaseperiod. The rent of the Group will be confirmed as income during the lease period by the straight-line method.(2)Accounting treatment of financing leasing
    Financing lease essentially refers to the lease that transferred all the risks and rewards relating to assetownership. As the lessee, on the beginning date of lease, the Group took lower one in the cash of the fair valueand the lowest lease payment as the book-keeping value of the fixed assets leased in by financing, and the lowestlease payment as the accounting value of the long-term payment, and the difference between the them will berecorded as financing costs not confirmed.(3)Assets acquired under finance lease29. Sellable assets in possession(1)Recognition of sellable assets in possession(2)Accounting treatment of sellable assets in possession30.Securitilization of assets31.Hedging instruments32.Change of main accounting policies and estimationsIs there any material change of accounting policies occurred in the year□ Yes √ No(1)Change of accounting policiesIs there any change in accounting policies in the report period□ Yes √ No
                                                                     深圳中冠纺织印染股份有限公司 2012 年度报告全文(2)Change of accounting estimationsIs there any change in accounting estimations in the report period□ Yes √ No.33.Correction of accounting errors in previous periodIs there any accounting error with previous period found in the report period□ Yes √ No(1)Retrospective restatementIs there any retrospective restatement on the accounting error with previous periods done in the report term□ Yes √ No(2)Future adoption methodIs there any future adoption method apply able to accounting errors with previous period, found in the reportperiod.□ Yes √ No34.Other principal accounting policies, estimations and preparation method of financial statements
    1)GoodwillGoodwill refers to the difference of equity investment under the control of the same cost or merger of enterprisesshould enjoy more than the cost or a merger of the investment was the purchase of flats or net assets in order toobtain.The goodwill related to subsidiaries shall be individually listed in the consolidated financial statements, thegoodwill related to joint companies and associated companies shall be included in the book value of long-termequity investments.
    2)Employee‘s salary
    During the accounting period, workers‘ salary shall be recognized as liability, and be included in relevantcost and expenses according to the beneficiary target of the service provided by workers, and shall be included inthe relevant cost and expenses. The compensations for the cancelation of workers‘ labor relationship shall beincluded 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
                                                                    深圳中冠纺织印染股份有限公司 2012 年度报告全文employees.If decide to relieve the labor relationships with employee before the employment contracts become mature, orencourage workers to voluntarily accept the compensation proposal due to redundancy, while the Group has havea formal plan for termination of labor relationship or have proposed the voluntary redundancy scheme which willbe implemented, and the Group is unable to unilaterally withdraw the plan on the cancellation of laborrelationship or the layoff proposal, the anticipated debts, confirmed to be caused by the compensation due torelieve of labor relationships with workers, shall be recorded into the profits and losses of the current period.3)Accounting of income tax
    The accounting of income tax of the Group shall use the method of debt of balance sheet. The income taxexpenses include current income tax and deferred income tax. The current income tax and deferred income taxrelating to the transactions and events directly included in shareholders equity shall be included in shareholdersequity, except the book value of deferred income tax adjustment goodwill, the rest current income tax and deferredincome 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 departmentaccording to the current transactions and events determined according to tax provisions; deferred income taxrefers to difference between deferred income tax balance sheet debt in accordance with the law shall berecognized deferred income tax assets and deferred income tax liabilities in the amount originally confirmed.
    4)Corporate consolidation
    Corporate consolidation refers to two or more separate companies merge and form a transaction or event ofreport 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 by theconsolidation party in the merger shall be measured according to the book value of merged party on theconsolidation day. The difference between the book value of net assets obtained by the consolidationparty and the book value of the consolidation price paid, the capital public reserve shall be adjusted; if thecapital 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 stocksissued and the assets and debts paid to obtain the control right of the purchased party on the purchase day. Thedifference 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, thedifference shall be included in current loss and gain upon confirmation.(V)Taxation1.Main categories and rates of taxes
                  Taxes                               Tax references                    Applicable tax rates
                                                                                       深圳中冠纺织印染股份有限公司 2012 年度报告全文
                                                         Income from sales of products and
                          VAT                                                                                        17%
                                                                   processing
                  Business tax                                      Business income                                   5%
    City maintenance and construction tax                                Turnover tax                                    7%
             Enterprise income tax                           Amount of income taxable                                25%
                Education surtax                                      Turnover tax                                    3%
        Local surcharge for Education                                 Turnover tax                                    2%Income tax rate applicable to branches and factories.The interest rate of corporate income tax of the company and subsidiaries in China mainland is 25%, according tothe State Council on December 26, 2007, of the [2007] No. 39 Notice on the Implementation of Enterprise IncomeTax Preferential Policies for the Transition, the enterprise income tax rate of the Company and the subsidiaries inChina mainland gradually transited from 15% to 25%, the company implement the transition rate of 25% in 2012the interest rate of the income from Hong Kong of the subsidiaries in Hong Kong is 16.5%.
        2. Tax preference and approval file3.OtherThe subsidiaries of the company in Hong Kong do not need to pay the domestic tax.
    (VI) Enterprise consolidation and combined financial statements
        1. Subsidiary(1)Subsidiary obtained through establishment or investment
                                                                                                                                     Unit:RMB
                                                                                                                                        After
                                                                                                                                        wrote
                                                                                                                            Amount
                                                                             Other                                                      down
                                                                                                                            used to
                                                                            projects                                                   current
                                                                                                                             write
                                                                            balance                                                    period
                                                                  Actual                        Proporti Whether Interest    down
    Full                                                                      essential Holding                                          loss of
                        Registra             Register             capital                        on of   consolid   of        lost
    name of Subsidia                   Busines              Busines             ly from proporti                                           minority
                          tion                 ed                 amounts                       voting ation of minority included
    subsidia ry type                      s                 s scope               net       on                                             sharehol
                         place               capital                of                          rights(% report sharehol       in
    ry                                                                       investm    (%)                                               ders
                                                                  the end                          )      form      der     minority
                                                                             ent to                                                     over
                                                                                                                            sharehol
                                                                            subsidia                                                    equity
                                                                                                                              der
                                                                               ry                                                      beginni
                                                                                                                            interest
                                                                                                                                       ng share
                                                                                                                                          of
                                                                         深圳中冠纺织印染股份有限公司 2012 年度报告全文
                                                                                                                 minority
                                                                                                                 sharehol
                                                                                                                 ders in
                                                                                                                   the
                                                                                                                 subsidia
                                                                                                                 ry from
                                                                                                                   the
                                                                                                                  parent
                                                                                                                 compan
                                                                                                                   y‘s
                                                                                                                 share ,B
                                                                                                                  alance
                                                                                                                    of
                                                                                                                 Owner's
                                                                                                                  equity
                                           Purchase
                                           of    raw
                                           materials,
                                           marketinHong
                                   2,400,0 g        of
    Kong      Limited                          printed
                    Hong           02                  2,400,0
    Victor    Compan           Trade           and dyed                       100%    100% Yes        0.00    0.00       0.00
                    Kong           (HKD                 02.00
    Onward y                                   woven
                                   )      fabrics,Co.Ltd
                                           investme
                                           nt     and
                                           holding
                                           business
                                             Sales        of
    Shenzho                            1,000,0 Corduroy
          Limited
    ng                  Hong           00        ,       dyed 1,000,0
          Compan           Trade                                          100%    100% Yes        0.00    0.00       0.00
    Compan              Kong           (HKD cloth and              00.00
          y
    y                                  )        printed
                                             cloth
                                             Productio
                                                  n and
                                   85,494,
    Nanhua Limited                                   sales of
                    Shenzhe Product 700                        85,494,
    Compan Compan                                    printed                 69.44% 69.44% Yes        0.00    0.00       0.00
                    n        ion   (HKD                       700.00
    y         y                                  cloth and
                                   )
                                                  dyed
                                                  cloth
                                             Sales of
    Xinye     Limited                  10,000
                    Hong                     printed           10,000.
    Compan Compan              Trade   (HKD                                  100%    100% Yes        0.00    0.00       0.00
                    Kong                     cloth and             00
    y         y                        )
                                             dyed
                                                                                                    深圳中冠纺织印染股份有限公司 2012 年度报告全文
                                                         cloth
                                                         Textilet,P
                                                         rinting
                                                         and
                                                         dyeing
                                                         industry
    Shenzh                                                   and
             Limited
    en East                   Shenzhe              3,000,0 Raw             3,000,0                                                      -1,373,5
             Compan                  Trade                                                              51%        51% Yes                          0.00          0.00
    Asia                      n                    00        materials         00.00                                                       14.00
             y
    Co                                                       ,Machine
                                                         ry
                                                         equipmen
                                                         t and
                                                         other
                                                         fabricsNotes(2)The company has no subsidiary company acquired via enterprise consolidation under same controlling.
                                                                                                                                                     Unit:RMB
                                                                                                                                                               After
                                                                                                                                                               wrote
                                                                                                                                                               down
                                                                                                                                                              current
                                                                                                                                                              period
                                                                                                                                                              loss of
                                                                                                                                                             minority
                                                                                                                                                             sharehold
                                                                                         Other                                                 Amount
                                                                                                                                                              ers over
                                                                                        projects                                                used to
                                                                                                                                                              equity
                                                                       Actual           balance                                                  write
    Full name                                                                                                       Proportio Whether Interest of                beginning
                                                                       capital         essentiall   Holding               consolidat   &