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神州长城(000018)公告正文

*ST中冠B:2013年年度报告(英文版)

公告日期:2014-02-28

                              深圳中冠纺织印染股份有限公司 2013 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.
                2013 Annual Report
                   February 2014
                                                                   深圳中冠纺织印染股份有限公司 2013 年度报告全文
             I. Important Notice, Table of Contents and DefinitionsThe Board of Directors ,Supervisory Committee, all directors, supervisors and senior executives of the Companyhereby guarantees that there are no misstatement, misleading representation or important omissions in this reportand shall assume joint and several liability for the authenticity, accuracy and completeness of the contents hereof.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 reserves either.Mr.Hu Yongfeng, The Company leader, Mr. Zhang Jinliang, Chief financial officer and the Mr.Ren Changzheng,the person in charge of the accounting department (the person in charge of the accounting ) hereby confirm theauthenticity and completeness of the financial report enclosed in this annual report.Da Hua Certified Public Accountants(Special General Partnership) issued an unqualified auditor's report withhighlighted paragraphs to the Company. The board of directors and the supervisory committee of the Companyhave explained relevant matters in detail. Investors are advised to read relevant statements.
                                                                 深圳中冠纺织印染股份有限公司 2013 年度报告全文
                                         Table of Contents2013 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 2013 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 2013 年度报告全文
                                                  Indication of major risks
       This Report has been prepared in both Chinese and English. In case of any discrepancy, the Chinese version shall prevail.Please pay attention.II. Basic Information of the Company1. Company Information
                                *ST Shen Victor Onward A,*ST Shen
    Stock abbreviation                                                     Stock code                 000018、200018
                                Victor Onward B
    Stock exchange for listing:    Shenzhen Stock Exchange
    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.udcgroup.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.com
                                                                               深圳中冠纺织印染股份有限公司 2013 年度报告全文3. Information disclosure and placedNewspapers 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                         Da Hua Certified Public Accountants(Special General Partnership)
    Office address:                         8/F, B Union Square , No.5022. Binhe Road, Futian District , ShenzhenNames of the Certified Public
                                         Xu Haining, Yang ChunxiangAccountants 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 applicable
                                                                          深圳中冠纺织印染股份有限公司 2013 年度报告全文III. Summary of Accounting Highlights and Business HighlightsI.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
                                         2013                     2012                                         2011
                                                                                           (%)
    Operating Gross income(RMB)            26,998,990.00            11,095,669.00                  143.33%        9,850,484.00Net profit attributable to the
    shareholders of the listed company        8,214,810.00              -247,331.00                -3,421.38%     -17,361,593.00(RMB)Net profit after deducting ofnon-recurring gain/loss attributable
                                         -5,711,308.00              300,041.00                 -2,003.51%     -17,375,777.00to the shareholders of listedcompany(RMB)Cash flow generated by business
                                          1,708,608.00              -384,418.00                 -544.47%        4,202,430.00operation, net(RMB)Basic earning per
                                                  0.0486                  -0.0015                 -3,340%                -0.1share(RMB/Share)Diluted gains per
                                                  0.0486                  -0.0015                 -3,340%                -0.1share(RMB/Share)(RMB/Share)
    Net asset earning ratio(%)                       6.7%                   -0.21%                    6.91%             -12.93%
                                        End of                   End of             Changed over last         End of
                                         2013                    2012                 year(%)              2011
    Gross assets(RMB)                     170,502,789.00           172,002,557.00                     -0.87%    172,238,794.00Shareholders‘ equity attributable to
    shareholders of the listed company      126,320,072.00           118,852,391.00                     6.28%     119,047,096.00(RMB)II.Items and amount of non-current gains and losses
                                                                                                                   Unit:RMB
                    Items                 Amount (2013)          Amount (2012)          Amount(2011)          NotesNon-current asset disposalgain/loss(including the write-off part
                                                 13,906,305.00              5,174.00                -522.00for which assets impairment provisionis made)Except the effective hedge business
                                                                            6,045.00            13,965.00related to the normal operation
                                                                深圳中冠纺织印染股份有限公司 2013 年度报告全文business 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               19,813.00       -558,591.00           741.00items
    Total                                       13,926,118.00      -547,372.00        14,184.00         --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
                                                                               深圳中冠纺织印染股份有限公司 2013 年度报告全文
                                      IV. Report of the Board of DirectorsI. General1. 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,the lawsuit has been made. Within this year, the companydisposed all textile machinery and equipment, the company has not textile processing capacity. Although this yearthe company saled the property located in Kowloon, Hongkong But the rental income still a major part of the cashflows and the main part of the current main business income.2. The risks that the Company is facing and countermeasuresProduction suspense brought significant influence on the production and operating activities andcontinuous development of the Company. 2The audited net profits of the Company for twoconsecutive fiscal years (i.e., 2011 and 2012) were both negative. According to relevant regulationsincluding Stock Listing Rules of Shenzhen Stock Exchange, Shenzhen Stock Exchange enforcedspecial treatment ("delisting risk caution") of the stocks of the Company from April 24, 2013. In orderto have the caution of delisting risk revoked, the Company made all efforts to enhance operating efficiency and increase returnthrough various measures and successfully reversed loss into profit in 2013.II. Analysis on principal Business1.General
    In 2013, the textile, printing and dyeing business of the head office subsidiaries of the Company did not recoverand continued to be suspended for rectification. The Company leased its idle properties and carried out domestictrade of textile products on a small scale, The disposal of real estate investment .
    Progress of development strategy and operation plans in this period that are disclosed by the company in theprevious annual reports.
    As the plan of investing in Nanjing East Asia Textile Printing and Dyeing Co., Ltd. with part ofmachinery and equipment was not fulfilled, part of the Company's assets have been in idle status forlong time since production suspense for rectification. At present, the investment project (NanjingEast Asia Textile Printing and Dyeing Co., Ltd.) has entered litigation procedure. There will be nopossibility of investment completion. The Company has finished disposing the fixed assets(machinery and equipment ) and machine parts.Reasons for difference of actual operation performance has 20% lower or higher than profit forecast of the Yeardisclosed□ Applicable√ Not applicable
                                                                          深圳中冠纺织印染股份有限公司 2013 年度报告全文2. 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 2013, the total income from main operation was RMB 26.99 million, including rent income was RMB 10.09
    million , Textile trade income was RMB 1.29 million and disposal of real estate investment income was 15.61
    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)                                                                24,266,117.00Proportion of sales to top 5 customers in the
                                                                                                                89.87%annual sales(%)Information of the Company‘s top 5 customers√Applicable □ Not applicable
    No                           Name                          Amount of sales                Proportion(%)
    1         China Real Estate (HK) Group Co., Ltd.                  15,611,945.00                            57.82%
               Shenzhen Jinrongyuan Development Co.,
    2                                                                  5,851,500.00                            21.67%
               Ltd.
    3         Zhejiang Helan Industry Co., Ltd.                        1,292,308.00                              4.79%
    4         SCS Express International Limited                          910,364.00                              3.37%
                Shenzhen Hebainian Investment
    5                                                                    600,000.00                              2.22%
               Development Co., Ltd.
    Total                            --                                 24,266,117.00                            89.87%3.CostsClassification of Industry
                                                                                                              Unit:RMB
    Classification             Items                       2013                           2012             Increase/Decre
                                                                             深圳中冠纺织印染股份有限公司 2013 年度报告全文
    of industry                                               Proportion in                      Proportion in        ase(%)
                                            Amount             operation       Amount          operation costs
                                                                costs(5(                             (%Textile
                                             1,282,051.00           13.55%      1,248,550.00           23.06%              -9.51%IndustryLeasing
                                             4,602,706.00           48.65%      4,164,806.00           76.94%            -28.29%IndustryReal estate
                                             3,576,246.00            37.8%IndustryClassification of products
                                                                                                                       Unit:RMB
                                                        2013                              2012Classification
    of products                                                  Proportion in                     Proportion in Increase/Decre
                          Items
                                            Amount             operation       Amount            operation ase(%)
                                                               costs(%)                          costs(%)Sales of
    viscosestaple                               1,282,051.00           13.55%      1,248,550.00           23.06%              -9.51%fiber
    Leasing                                      4,602,706.00           48.65%      4,164,806.00           76.94%            -28.29%The disposal of
    real estate                                  3,576,246.00            37.8%investmentNotes
    The real estate for investment disposed of in the report period is the house property of Victor Onward Printing and Dyeing (HongKong) Co., Ltd., a wholly-owned subsidiary of the Company, which is located at Room 1801-1804, Huachuang Center, 889 ChuangSha Wan Road, Kowloon, Hong Kong.Principal 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 (%)Information about the top 5 suppliers□ Applicable√ Not applicable3.Expenses
    The financial expenses for 2013 were RMB247,455, which increased by RMB 691.629 and 155.71% overthose for 2012 (RMB -444,174) mainly due to exchange gains and losses,Income tax were RMB 2,384,583, whichincreased by RMB -41,869 for 2012, The increase mainly due to the profits tax generated from the disposal ofinvestment property real by Hongkong Victor Onward.
                                                                    深圳中冠纺织印染股份有限公司 2013 年度报告全文6.Cash Flow
                                                                                                           Unit:RMB
            Items                        2013                         2012                 Increase/Decrease(%)Subtotal of cash flow
    received from operation                      12,450,237.00                13,498,118.00                         -7.76%activitiesSubtotal of cash flow paid
                                             10,741,629.00                13,882,536.00                        -22.62%for operating activitiesNet cash flow arising from
                                                1,708,608.00                 -384,418.00                   -544.47%operating activitiesSubtotal of investment
                                             20,749,535.00                    30,000.00                  69,065.12%activity cash inflowsSubtotal of investment
                                                  36,411.00                  690,127.00                        -94.72%activity cash outflowsNet cash flow arising from
                                             20,713,124.00                   -660,127.00                 -3,237.75%investment activitiesSubtotal of fund raising
                                             10,124,439.00                   126,343.00                   7,913.45%activity cash outflowsNet cash flow arising from
                                            -10,124,439.00                   -126,343.00                  7,913.45%raising activitiesNet increase in cash and
                                             11,275,648.00                -1,172,054.00                  -1,062.04%cash equivalentsNotes to the year-on-year change of the relevant data by over 30%√Applicable □Not applicable
    Net cash flows from operating activities increased mainly because the payment of RMB 1.5 million for goodscollected in the form of banker's acceptance bill in the previous year was encashed in the report year. The cashinflows from investing activities increased mainly due to inflow of RMB 15.61 million from the disposal of thehouse property located at Room 1801-1804, Huachuang Center, 889 Chuang Sha Wan Road, Kowloon, HongKong and inflow of RMB 5.13 million from the disposal of dyeing machines and equipment. Net cash flows fromfinancing activities decreased mainly due to payment of loan principal of RMB 10 million to Union Group, arelated party, which was borrowed in the previous year.Notes to the big difference between cash flow from operating activities and net profit in the reporting year√Applicable□Not applicable
      The reason for the big difference between the net cash flows of RMB 1,708,608 from operating activities inthe report period and the net profit of RMB 8,214,810 for the report year for the shareholders of the Company isthat the important sources of the net profit of the Company for the report year are the disposal of fixed assets(which generated net profit of RMB 1.9 million) and sales of real estate for investment (which generated net profitof RMB 9.65 million).
                                                                           深圳中冠纺织印染股份有限公司 2013 年度报告全文III. 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
                       1,292,308.00        1,282,051.00           0.79%                 2.02%             2.68%              -0.65%Industry
    Lease Industry       10,094,737.00         4,602,706.00           54.4%                  2.7%            10.51%              -3.23%
    Real estate          15,611,945.00         3,576,246.00          77.09%Productviscose staple
                       1,292,308.00        1,282,051.00           0.79%                 2.02%             2.68%              -0.65%fiber
    Leasing              10,094,737.00         4,602,706.00           54.4%                  2.7%            10.51%              -3.23%The disposal of
    real estate          15,611,945.00         3,576,246.00          77.09%investmentDistrict
    Domestic               9,553,683.00        4,151,650.00          56.54%                 0.75%             -2.58%             1.48%
    Hong Kong            17,445,307.00         5,309,353.00          69.57%            981.17%              361.03%             40.94%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
                          End of 2013                     End of 2012           Proportio
                                                                                    n
                                 Proportion in                  Proportion in
                                                                                increase/d       Notes to the significant change
                     Amount           the total     Amount         the total
                                                                                 ecrease
                                      assets(%)                   assets(%)
                                                                                   (%)
                                                                         深圳中冠纺织印染股份有限公司 2013 年度报告全文
                                                                                         The main reason for increase is the
                                                                                         profit from the disposal of real estate
    Monetary capital   63,502,910.00        37.24% 52,227,262.00         30.36%     6.88%
                                                                                         for investment by Hong Kong Victor
                                                                                         Onward
    Accounts                                                                                 Full amount provision for bad debts in
                                                   744,712.00         0.43%    -0.43%
    receivable                                                                               respect of accounts receivable
                                                                                         Full amount provision for impairment
    Inventories                                        101,536.00         0.06%    -0.06%
                                                                                         in respect of inventories
    Real estate for                                                                          Disposal of real estate for investment
                   23,458,153.00        13.76% 31,041,484.00         18.05%    -4.29%
    investment                                                                               by Hong Kong Victor Onward
    Long-term equity                                                                         Hangzhou Bay Venture Company made
                   66,931,685.00        39.26% 65,784,312.00         38.25%     1.01%
    investment                                                                               profit
    Fixed assets        7,191,205.00         4.22% 12,416,459.00          7.22%       -3% Disposal of machinery and equipment2.Significant Change in Liabilities
                                                                                                                         Unit:RMB
                             2013                          2012               Proporti
                                                                                 on
                                   Proportion                    Proportion
                                                                              increase    Notes to the significant change
                    Amount         in the total   Amount         in the total
                                                                              /decreas
                                   assets (%)                    assets (%)
                                                                                e(%)
    Long-term loan      1,101,349.00         0.65%    1,033,936.00          0.6%    0.05% For the reason of interest
                                                                                         Advance receipts decreased because
                                                                                         the advance receipts from disposal of
    Advance receipts    1,076,531.00         0.63%    2,778,488.00        1.62%    -0.98% machinery and equipment were carried
                                                                                         forward after completion of
                                                                                         transactions in the report year.
                                                                                         Remuneration payable to staff and
    Remuneration                                                                             workers increased because the
    payable to staff    1,109,352.00         0.65%     766,680.00         0.45%      0.2% remuneration payable to the board of
    and workers                                                                              directors was not paid yet at the end of
                                                                                         the year.
                                                                                         Taxes and levies payable increased due
                                                                                         to provision for profit tax in respect ofTaxes and levies
                    4,250,191.00         2.49%    1,622,074.00        0.94%     1.55% the disposal of real estate forpayable
                                                                                         investment in Hong Kong in the report
                                                                                         year.
                                                                                         Other payables decreased due to
    Other payables     21,762,365.00        12.76% 32,227,317.00         18.74%    -5.97% repayment of loans to related
                                                                                         companies in the report year.
                                                                             深圳中冠纺织印染股份有限公司 2013 年度报告全文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      equityFinancialassets3.Financialassets
                       751,542.00                    -168,600.00                                                       582,942.00available forsalesSubtotal of
                       751,542.00                    -168,600.00                                                       582,942.00Financial assetsAforementio
                       751,542.00                    -168,600.00                                                       582,942.00ned totalFinancial
                               0.00                                                                                            0.00liabilitiesDid great change take place in measurement of the principal assets in the reporting period ?□ Yes √ NoV. Analysis on core CompetitivenessN/AVI. Analysis on investment Status1. External Equity investment(1)External investment
                                                       External investment
    Investment Amount in 2013(RMB)                  Investment Amount in 2012(RMB)                       Change rate
                                          0.00                                    0.00                                          0%
                                                      Particulars of investees
                   Companies                            Principal business               Proportion in the investees‘ equity (%)Zhejiang Union Hangzhou Bay Chuangye
                                                            Real estate                                                       25%
                   Co., Ltd.
                                                                              深圳中冠纺织印染股份有限公司 2013 年度报告全文2.Analysis on principal subsidiaries and Mutual Shareholding CompaniesParticulars about the principal subsidiaries and Mutual shareholding companies
                                                                                                                             Unit:RMB
                                          Leading
                 Sectors                                         Total                     Operating
    Company Company                          products Registered           Net assets Tumover           Net Profit
                 engaged                                      assets(RM                      profit
    Name     type                             and     capital              (RMB)      (RMB)             (RMB)
                    in                                            B)                        (RMB)
                                          servicesHongKong
                            Textile      Textile      2,400,002    121,632,880 50,734,564. 17,445,307. 11,913,267. 9,530,660.0
    Victor        Subsidiary
                            industry     trade        (HKD)                .00           00           00              00          0OnwardCo.Ltd
                                         Textile
    Nanhua             Textile               Printing     85,494,700    29,250,478. -17,259,520 6,486,700.0
        Subsidiary                                                                                               502,352.00 490,235.00
    Company            industry              and          (HKD)                00           .00                0
                                         dyeingZhejiangUnion
          Sharehold             Real estate
    Hangzhou            Real estate             247,476,832 1,414,590,8 305,663,374 55,875,550. 5,072,925.0 3,399,130.0
          ing                     Develop
    Bay                  Industry               .6                02.00         .00         00            0           0
          companies               mentChuangyeCo., Ltd.Particulars about the principal subsidiaries and Mutual holding companies
       Victor Onward Printing and Dyeing (Hong Kong) Co., Ltd., a subsidiary of the Company, entered into real estate purchase andsale contract with China Real Estate (Hong Kong) Group Co., Ltd., a related party, on December 6, 2013. The real estate is located atRoom 1801-1804, Huachuang Center, 889 Chuang Sha Wan Road, Kowloon, Hong Kong . This transaction involved amount ofHKD 19.55 million (equivalent to RMB 15.61 million), which contributed net profit of RMB 9.65 million to the Company in 2013. Itis an important asset transaction that helped the Company successfully turned losses into profits in 2013.Acquirement and disposal of subsidiaries in the Reporting period□ Applicable√ Not applicableVII. Prediction of business performance for January -March 2014.Estimation of accumulative net profit from the beginning of the year to the end of next report period to be lossprobably or the warning of its material change compared with the corresponding period of the last year andexplanation of reason.√ Applicable □Not applicableForenotice of earning :LossesType of data filet for the prediction
                                  Year beginning to end of next Same period of                  Increase or decrease%
                                                                        深圳中冠纺织印染股份有限公司 2013 年度报告全文
                                   report period         the previous
                                                            yearEstimated amount of
    accumulative net                   -200 --           0             -266 --                     -24.81% --         0%profit(RMB‘0000)Basic earnings per shares
                                 -0.011 --           0          -0.016 --                      -31.25% --         0%(Yuan/share)
                            Due to loss of real estate projects of Zhejiang Union Hangzhou Bay Ventures Co.,
    Notes to forenotice of      Ltd. Accounted for on equity basis, the accumulative net profit for the period from
    earnings                    January 2014 to March 2014 is estimated to be loss and about RMB -2 million to
                            RMB 0.VIII. Special purpose principal under the control of the Company
      N/AIX. Development prospect
      Controlling shareholder of the Company and the management of the company attaches greatimportance tothe company‘s continued operational problems, through a wariety of ways, including saling the assets andbusiness of the company or its subsidiaries, joint venture or expand an existing business, aiming to improve thecompany asset quality, iprofitability, and enhance capacity for sustainable development .X. Explanation of the Board of Directions Concerning the ― non-standard audit report‖ issued by the CPAs firmfor the reporting period.1.Basic information
    Da Hua Certified Public Accountants(Special General Partnership) issued unqualified auditor's report withparagraph of emphasized matters for the Company's financial statements for 2013 Basic information ofemphasized matters: Since March 2007, Shenzhen Victor Onward Textile Industrial Co., Ltd. stopped productionand dismissed most of workers. And most subsidiaries of the company had stopped production and it maintaineddaily operation by house leasing., Shenzhen Victor Onward Textile Industrial Co., Ltd. had disclosed itsimprovement measures in Note 11of Financial Statement,but its sustainable operation ability is still uncertain.2. Basic opinions of certified public accountants on such matter:
    Da Hua Certified Public Accountants(Special General Partnership) accepted entrustment, completed the auditof the financial statements of the Company for 2013 and issued unqualified auditor's report with paragraph ofemphasized matters for the Company's financial statements for 2013. In accordance with No. 14 Rule forPreparation and Report of Information Disclosure by Companies Publicly Issuing Securities - Non-standardUnqualified Audit Opinions and Treatment of Matters Involved Therein, relevant notes are as follows:As noticed by Shine Wing Certified Public Accountants during audit, Since March 2007, Shenzhen VictorOnward Textile Industrial Co., Ltd. stopped production and dismissed most of workers. The company currentlyonly had house leasing business.
                                                                   深圳中冠纺织印染股份有限公司 2013 年度报告全文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.3.The opinions of the board of directors, supervisory committee and management of the Companyon 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.4. Extent of influence of this matter on the Company:This event greatly impacted the production & operation activities and sustainable development of company, it madecompany 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, According to the relevant regulationsincluding Stock Listing Rules of Shenzhen Stock Exchange, on April 24, 2013 on the Shenzhen Stock Exchangeimplemented the "delisting risk warning" to the company stock trading.5.The possibility of eliminating this matter and its influence:
      In order to have the caution of delisting risk revoked, the Company made all efforts to enhance operatingefficiency and increase return through various measures and successfully reversed loss into profit in 2013.6.The concrete measures of eliminating this matter and its influence
      Controlling shareholder of the Company and the management of the company attaches greatimportance tothe company‘s continued operational problems, through a wariety of ways, including saling the assets andbusiness of the company or its subsidiaries, joint venture or expand an existing business, aiming to improve thecompany asset quality, iprofitability, and enhance capacity for sustainable development .XI. Explain change of the accounting policy, accounting estimate and measurement methods as compared with thefinancial reporting of last year.
       N/A
                                                                               深圳中冠纺织印染股份有限公司 2013 年度报告全文XII. Explain retrospective restatement due to correction of significant accounting errors in the reporting period.
        N/AXIII. Explain change of the consolidation scope as compared with the financial reporting of last year.N/AXIV. Dividend Distribution PreparationImplementation or adjustment of the Company‘s profit Distribution policy, Especially Cash Dividend DistributionPolicy in the Reporting Period.√Applicable □ Not applicableThe Company's profit distribution policy, based primarily on the 4th meeting of the sixth board of directors of the Companyconsidered and approved the "Articles of Association" in the relevant provisions on the Company's Profit Distribution Policy andPlanning for Return to Shareholders in the Nest Three Years (2012-2014), The revised profit distribution policy defined dividenddistribution standards and proportion was clear, improved the Company's decision making and supervision mechanism for profitdistribution and ensured return to shareholders.. independent directors conducted effective supervision of the profit distribution planof the Company and expressed independent opinions. Minority shareholders have adequate opportunity to express their views andaspirations,Refer to Announcement that disclosed on Securities Times ,Hong Kong Commercial Daily and www.cninfo.com.cnrespectively on August 16, 2012. for the Articles of Association of the Company concerning profit distribution.
                                               Special cash dividend policy descriptionWhether meets the requirements of the
    provisions of the articles of association or                Compliance with regulations and requirementsshareholders' meeting resolutions:
    Whether dividends standard and proportion are clear         Dividends standard and proportion are clearWhether decision making and supervision mechanism for
                                                            Decision making and supervision mechanism for profit distribution areprofit distribution are completed
                                                            completed
    Whether independent directors perform their duties          Independent directors implemented the status of the company's profit
    responsibly and play its due role:                          distribution plan for the effective oversight and independent opinionwhether the Minority shareholders have adequate
                                                            Minority shareholders have adequate opportunity to express their viewsopportunity to express their views and aspirations and
                                                            and aspirations,Their legitimate rights and interests have been fullyTheir legitimate rights and interests have been fully
                                                            protectedprotectedWhether the Cash dividend policy to adjust or change the In 2013, there are no cash dividend policy adjustments andconditions and procedures are compliant and transparent changes..Notice: During the reporting period the company should disclose the profit distribution policy, especially cashdividend policy formulation, implementation or adjustments, explain the requirements of the provisions of thearticles of association or shareholders' meeting resolutions, whether the Minority shareholders legitimate rightsand interests have been fully protected, whether the Independent directors implemented opinions, Whether
                                                                               深圳中冠纺织印染股份有限公司 2013 年度报告全文dividends standard and proportion are clear, and Whether the Cash dividend policy to adjust or change theconditions and procedures are compliant and transparent.The profit distribution preplan or proposal and the preplan or proposal of conversion of the capital reserve into share capital in thepast three years(with the reporting period inclusive):The company‘s annual profit distribution for 2011.As audited by Shinewing Certified Public Accountants, the total profit of the Company for 2011 isRMB-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 for 2012.1 As audited by Da Hua Certified Public Accountants(Special General Partnership) , the total profit of theCompany for 2012 is RMB-289,200 , After deduction of minority gains and losses of RMB 0 and income taxexpenses of -41,869, net profit is RMB-247,331,the total year-end undistributed profit is - RMB-116,273,941. TheCompany is neither to distribute profit nor to capitalize capital surplus for the current year.Profit distribution preplan for 2013:
    1 As audited by Da Hua Certified Public Accountants(Special General Partnership) , the total profit of theCompany for 2013 is RMB10,234,487 , After deduction of minority gains and losses of RMB-364,906 andincome tax expenses of2,384,583, net profit is RMB8,214,810,the total year-end undistributed profit isRMB-108,059,131. The Company is neither to distribute profit nor to capitalize capital surplus for the currentyear.2. According to the decisions of the 12th meeting of the sixth board of directors of the Company held on February26, 2014, the Company will neither distribute profit nor capitalize capital surplus for 2013 and will use the profitto make up the losses of the previous year.
       The above profit distribution preplan is to be submitted to 2013 annual shareholders' general meeting forexamination.3.. The reason for no profit distribution for 2013, 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. After the discussion inBoard of directors meeting, the Company will neither distribute profit nor capitalize capital surplus for 2013and will use the profit to make up the losses of the previous year.4.. The independent opinions expressed by the independent directors of the Company on the profit distributionpreplan made by the board of directors for 2013
    In the opinion of the independent directors, the Profit Distribution Preplan for 2013 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 2013 was approved. It was also approved to submit this preplan to 2013annual shareholders' general meeting of the Company for examination.
                                                                           深圳中冠纺织印染股份有限公司 2013 年度报告全文
       Dividend distribution of the latest three years
                                                                                                         Unit:RMB
                                                                 Net profit attributable to the    Ratio in net profit attributable to
                                                                over of the parent company in         the parent company in the
              Year              Cash dividend (Including Tax)
                                                                    the consolidated financial          consolidated financial
                                                                           statements                         statements
    2013                                                                                8,214,810.00
    2012                                                                                 -247,331.00
    2011                                                                              -17,361,593.00In 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 applicableXV.Preplan for profit distribution and transferring capital reserve into share capital for the report period
                                                    Cash dividend policy:
                                                            NotesAccording to the decisions of the 12th meeting of the sixth board of directors of the Company held on February26, 2014, the Company will neither distribute profit nor capitalize capital surplus for 2013 and will use the profitto make up the losses of the previous year. It was also approved to submit this preplan to 2013 annualshareholders' general meeting of the Company for examination.XVI. Social responsibility(I) Protecting shareholders' rights and interests1. The company established a standardized corporate governance structure, the effective implementation andmonitoring of the operating mechanism to ensure that the company operates in accordance with law, standardizedoperation and promote common development with all stakeholders. Concerned about public welfare andenvironmental protection issues, and maximize shareholders' equity, the pursuit of economic efficiency intoaccount social, practicing corporate social responsibility.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.
                                                                              深圳中冠纺织印染股份有限公司 2013 年度报告全文Whether the listed company and its subsidiaries belong to the heavy polluting industries regulated by the state environmentalprotection department.
    □ Yes   √ NoWhether the listed company and its subsidiary exist the major social security issues.
    □ Yes   √ NoWhether has been punished during the report period.
    □ Yes   √ NoXVII.Statement of such activities as reception, research, communication, interview in the reportingperiod
                                                                                                         Discussion topics andReception time Reception place Way of reception Types of visitors Visitors received
                                                                                                         provision of materials
                                                                                                        Inquiry about the
                                                                                                        possibility of the
                     BOD office of the
    January 9, 2013                           By phone             Individual           Investor            conversion of the
                      Company
                                                                                                        Company's B shares into H
                                                                                                        shares
                                                                                                        Inquiry about the date of
                     BOD office of the
    May 30,2013                               By phone             Individual           Investor            shareholders' general
                     Company
                                                                                                        meeting of the Company
                                                                                                        Inquire about the possibility
                     BOD office of the                                                                  of the Company's loss
    July 30,2013                              By phone             Individual           Investor
                     Company                                                                            reversal at the end of the
                                                                                                        year
                                                                                                        Inquiry about the time of
                     BOD office of the
    December 27, 2013                         By phone             Individual           Investor            disclosure of the annual
                     Company
                                                                                                        report of the Company
                                                                                     深圳中冠纺织印染股份有限公司 2013 年度报告全文
                                                         V. Important EventsI. Major lawsuits and Arbitration affairs√ Applicable□ Not applicableBasic information
                             Amount      Whether comes Progress of                              Judgment
           of                                                              Trial results and                  Disclosure      Index of
                            involved        to accrual      lawsuits(arb                       enforcement
    lawsuits(Arbitratio                                                           influence                          date         disclosure
                           (RMB‘0000)   liability or not     itration)                         situation
           n)On June 4, 2012,The company has
    instituted         court
    action           against
    below              three
    companies             at
    Jiangsu      Province
    Higher          People'sCourt, and askedto terminate the
    contracts           and
    agreements signed                                                                                                           Announceme
    with Nanjing East                                                                                                           nt No.
    Asia             Textile                                                                                                    2012-0614)
    Printing & Dyeing                                           The case                                                        Securities
    Co., Ltd., Nanjing                                          hasn‘t                                                         Times , Hong
                                 4,792 No                                                                    June 16,2012
    East               Asia                                     yet been                                                        Kong
    Investment            &                                     tried                                                           Commercial
    Development                                                                                                                 Daily and
    Group Co., Ltd.                                                                                                             www.cninfo.
    and Hong Kong                                                                                                               com.cn
    Yaojunxing         Co.,Ltd., who shall payRMB47,922,902.92 to the companyfor the pecuniaryloss of implicativecompensation andundertake the costsof litigation. The
    company             has
    received             the
                          深圳中冠纺织印染股份有限公司 2013 年度报告全文Su-Shang-Wai-Ch
    u-Zi         No.0002(2012) of ―Notice
    on         Indictment
    Acceptance          and
    Collegial        PanelAnnouncement‖issued by Jiangsu
    Province        HigherPeople's Court onJune 14, 2012. TheDefendant NanjingEast Asia Textile
    Printing            andDyeing Co., Ltd.made objection tothe jurisdiction ofthis case during theperiod of defence
    submission.         The
    court      formed     a
    collegial       bench
    and         conductedexaminationaccording to law.2On December 24,
    2013,          Jiangsu
    Higher       People'sCourt issued CivilRuling Paper toreject the objectionmade by NanjingEast Asia Textile
    Printing            andDyeing Co., Ltd.
    about               thejurisdiction.((2013) SSWXCZ
    No.     0001     CivilRuling Paper of
    Jiangsu         Higher
    People's         Court
    Civil           RulingPaper)
                                                                                      深圳中冠纺织印染股份有限公司 2013 年度报告全文II.Query form media□ Applicable√ Not applicableIn the reporting year, the Company had no query from mediaIII. Bankruptcy or Reorganization Related EventsN/A.IV. Assets Transactions1. Sales of Assets
                                                                     Pr
                                                                     op
                                                                     ort
                                                                     ion
                                                                     of
                                                                     the
                                                                     net
                                            Net
                                                                     pr
                                           profit
                                                                     ofi
                                          contribu
                                                                      t
                                           ted to                                                 Connect
                                                                     co
                                            the                                                     ivity
                                                                     ntr
                                          compan                                                  Relation Has all
                                                                     ibu                                                  Has all
                                          y from                                       Is it a     s with       the
                                                                     ted                                                    the
    Other                         Transact     the                            Pricing related          the       ownersh
                                                                     by                                                    credit
    party of                         ion      beginni      Gain/loss           principl transacti      other      ip of the                         Disclos
            Assets   Date of                                         the                                                   /debt      Disclos
    the                           price      ng of      arising from         e for the on Is it a    party       assets                             ure
             sold     sale                                           ass                                                  involve ure date
    transacti                      (RMB‘0      the          sales              asset     related (applica involve                                  index
                                                                     et                                                   d been
    on                           000) reportin                               sold    transacti ble to         d been
                                                                     for                                                  transferr
                                           g year                                       on          the       transferr
                                                                     the                                                     ed
                                           to the                                                 related        ed
                                                                     co
                                          date of                                                 transacti
                                                                     mp
                                          sales of                                                  on)
                                                                     an
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                                                                     y
                                          (RMB‘0
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                                                                     (%
                                                                          深圳中冠纺织印染股份有限公司 2013 年度报告全文
                                                            )
           Room
           1801-18
           ,Huachu                                                              The                               http://wChina
           ang                                                                  related                           ww.cninReal
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           No.889. Decemb                                                       controll                Decemb cn/final
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           Cheung er 6,          1,561   965 Turnaround                   Yes   ed the     Yes   Yes    er 31,    page/20
    ong)                                                        5 on
           Sha        2013                                                      same                    2013      13-12-3
    Group                                                       %
           Wan                                                                  Actual                            1/63434Co.,
           Road,                                                                controll                          860.PDLtd.
           Kowloo                                                               er                                F
           n,Hongk
           ong.WuxiGuokangPrinting&DyeingMachin
           Fixed                                                                                                  http://we Plant,
           Assets                                                                                                 ww.cninGuangz
           (Mach                                                                                                 fo.com.hou
           inery                                           24.                                                    cn/final
    Yongjun               June 30,                 Ppofit            Agreem                                 June 4,
           and                    675    190               22             No               Yes   Yes              page/20
    ye                    2013                     increased         ent                                    2013
           Equipm                                           %                                                     13-06-0Investm
           ent )                                                                                                 4/62551ent Co.,
           and Part                                                                                               854.PDLtd.,
                                                                                                                  FYingdeJifengDyeing&Weaving Co.,Ltd.V. Implementation of the Company‘s Equity Incentive plan and its influencesN/A.
                                                                               深圳中冠纺织印染股份有限公司 2013 年度报告全文VI. Material related transactions1.Other material related transactions
      The house property of Victor Onward Printing and Dyeing (Hong Kong) Co., Ltd., a wholly-owned subsidiary of the Company,which is located at Room 1801-1804, Huachuang Center, 889 Chuang Sha Wan Road, Kowloon, Hong Kong, was sold to China RealEstate (Hong Kong) Group Co., Ltd., a related party, in the form of agreed assignment and at the price of HKD 19.55 million(equivalent to RMB 15.50 million) appraised by Loyalty Surveyors Co., Ltd., a Hong Kong appraisal agency, and Shenzhen TianjianGuozhonglian Assets Appraisal & Land and Real Estate Valuation Co., Ltd.Refer to Announcement that disclosed on Securities Times ,Hong Kong Commercial Daily and www.cninfo.com.cn respectively on November 6, 2013 (Announcement No. 0650)
      On December 6, 2013, Victor Onward Printing and Dyeing (Hong Kong) Co., Ltd. and China Real Estate (Hong Kong) GroupCo., Ltd. entered into purchase and sale contract and completed the transaction in the witness of the laywers of both parties. Thepayment for the house property has been fully received.Refer to Announcement that disclosed on Securities Times ,Hong Kong Commercial Daily and www.cninfo.com.cn respectively on December 31, 2013 (Announcement No. 0651)
    The purchase and sale contract has been registered and filed with Hong Kong Government Land Registry and the real estatetransaction has been fully completed.Relevant inquiry with the internet website for disclosing provisional report on material related transactions
                                                    Date of disclosing provisional        Description of the website for disclosing
    Description of provisional announcement
                                                            announcement                         provisional announcementsRelated Transaction Announcement of
    Shenzhen Victor Onward Textile Industrial        October 11, 2013                      (http//www.cninfo.com.cn)Co., Ltd.
    Announcement on the progress of the real         December 31, 2013                     (http//www.cninfo.com.cn)
    estate transaction                               February 14, 2014                     (http//www.cninfo.com.cn)VII. Important contracts and implementation1..Other related transactionOn December 6, 2013, Victor Onward Printing and Dyeing (Hong Kong) Co., Ltd. and China Real Estate (HongKong) Group Co., Ltd. entered into purchase and completed the sale contract in the witness of the laywers of bothparties. This transaction involved amount of HKD 19.55 million (equivalent to RMB 15.61 million). The paymentfor the property has been fully received. The contract has been recorded in Hong Kong Land Registry registration,thus the real estate transactions have been completed.
                                                                        深圳中冠纺织印染股份有限公司 2013 年度报告全文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.
                                     Commitment                           Time of making       Period of
             Commitment                                  Contents                                            Fulfillment
                                         maker                             commitment        commitment
                                                     Committed
                                                     when the
                                                     restricted-for-sal
                                                     e shares from
                                                     the shares
                                                     restructuring
                                                     were listed for
                                                     circulation in the
                                                     market: i. 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%
                                    Union Holdings                                                         Under
    Commitment on share reform                           within 6 months June 3, 2009          In effect
                                    Co., Ltd                                                               Fulfillment
                                                     after the first
                                                     decrease, they
                                                     will disclose an
                                                     announcement
                                                     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-sa
                                                     le Original
                                                     Shares of Listed
                                                     Companies‖ and
                                                                               深圳中冠纺织印染股份有限公司 2013 年度报告全文
                                                               the provisions of
                                                               the relevant
                                                               business
                                                               principles of
                                                               Shenzhen Stock
                                                               Exchange.Commitment in the acquisition report or
                                            Not applicablethe report on equity changesCommitments made in Material assets
                                            Not applicableReorganization
    Commitments made in issuing                 Not applicableOther commitments offered to
    the company‘s minority                     Not applicableshareholdersWhether the commitments
                                            Yesfulfilled in a timely mannerThe specific reason for the
    unfinished commitments and                  Not applicablethe next step(If any)2.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 result Actual result in   failure to
    Profit-predicte                                                                                                        Predicted
                   Predicted        Predicted      in the reporting the reporting      realize the     Predicted
    d assets or                                                                                                          disclosure
                  staring time     ending time      period(RMB       period (RMB       predicted     disclosure date
    name of project                                                                                                          index
                                                       0000)              0000)         result(if
                                                                                       applicable)IX. Engagement/Disengagement of CPAsCPAs currently engaged
    Name of the domestic CPAs                              Da Hua Certified Public Accountants(Special General Partnership)Remuneration for domestic accounting firm
                                                                                                                                    30(RMB‘0000)Continuous life of auditing service for domestic
                                                       1accounting firm
    Name of domestic CPA                                   Xu Haining, Yang Chunxiang
                                                                              深圳中冠纺织印染股份有限公司 2013 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 √ No
        In the report year, the Company engaged Da Hua Certified Public Accountants (special general partnership) as the auditingbody for internal control for 2013 and paid it remuneration of RMB 0.15 million.X. Explanation of the Supervisory Committee and Independent Directors (If applicable)on the Qualified Auditor‘sReport Issued by the CPAs.Da Hua Certified Public Accountants(Special General Partnership) issued unqualified auditor's report withhighlighted paragraphs for the financial statements of the Company for 2013. The board of directors of theCompany made a special statement on the matters involved in the Unqualified Auditor's Report of the Companyfor 2013 with Highlighted Paragraphs. The independent directors of the Company expressed independent opinionson this. The supervisory committee of the Company held the opinion that this statement matched its actualconditions and agreed to opinions 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
                                                               penaltyNotes□Applicable √Not applicableAbout 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 Events1.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.PDF2.1. Announcement of Shenzhen Victor Onward Textile Industrial Co., Ltd. on Assignment of Partial Equity of A Joint VentureNamed Zhejiang Union Hangzhou Bay Ventures Co., Ltd. by A Wholly-owned Subsidiary Named Victor Onward Printing andDyeing (Hong Kong) Co., Ltd and relevant announcements disclosed on Securities Times, Hong Kong Commercial Daily and
                                                                             深圳中冠纺织印染股份有限公司 2013 年度报告全文www.cninfo.com.cn on June 18, 2013 (Announcement No. 0639).3. Related Transaction Announcement of Shenzhen Victor Onward Textile Industrial Co., Ltd.Refer to Announcement that disclosed on Securities Times ,Hong Kong Commercial Daily and www.cninfo.com.cn respectively on October 11, 2013. (Announcement No. 0644)4.Announcement of resolutions of the 10th Meeting of the Sixth board of Directors of Shenzhen Victor Onward TextileIndustrial Co., Ltd.Refer to Announcement that disclosed on Securities Times ,Hong Kong Commercial Daily and www.cninfo.com.cn respectively on October 11, 2013. (Announcement No. 0645)5. The Company entered into transaction contract with Wuxi Guokang Printing and Dyeing Machinery Plant, Guangzhou YongjunyeInvestment Co., Ltd. and Yingde Jifeng Dyeing and Weaving Co., Ltd. in respect of disposal of fixed assets (machinery andequipment) and parts. The said asset sale was voted through at the seventh meeting of the sixth board of directors of the Company.Refer to Announcement that disclosed on Securities Times ,Hong Kong Commercial Daily and www.cninfo.com.cn respectively on June 4, 2013. (Announcement No. 0634), At the end of the report year, relevant transaction wascompleted. RMB 6.75 million was collected in total and net profit of RMB 1.90 million from the disposal was made.6. During the reporting period, the company has not the relevant issues of promises required in ―Guideline No. 4on Supervision and Administration of Listed Companies – The Commitment and Performance of The ListedCompany and its Actual Controller, Shareholders, Affiliated Party and Offeror‖ or overdue unfulfilledcommitments.XIV. Significant events of subsidiaries
       The house property of Victor Onward Printing and Dyeing (Hong Kong) Co., Ltd., a wholly-owned subsidiary of the Company,which is located at Room 1801-1804, Huachuang Center, 889 Chuang Sha Wan Road, Kowloon, Hong Kong, was sold to China RealEstate (Hong Kong) Group Co., Ltd., a related party, in the form of agreed assignment and at the price of HKD 19.55 million(equivalent to RMB 15.50 million) appraised by Loyalty Surveyors Co., Ltd., a Hong Kong appraisal agency, and Shenzhen TianjianGuozhonglian Assets Appraisal & Land and Real Estate Valuation Co., Ltd.(Refer to Announcement that disclosed on Securities Times ,Hong Kong Commercial Daily and www.cninfo.com.cn respectively on November 6, 2013, October 31, 2013 and Fubruary 14, 2014. (Announcement No.2013-0650,2013-0651and 2013-0654)XV.Issuing of Company BondsN/A.
                                                                                 深圳中冠纺织印染股份有限公司 2013 年度报告全文
                   VI. Change of share capital and shareholding of Principal Shareholders
      (I).Changes in share capital
                                                                                                                                     Unit:Shares
                                 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
                                       0        0%            0            0              0           0              0          0            0%person 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
    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
    2.Foreign        shares      in 69,421,90                                                                                69,421,90
                                            41.04%            0            0              0           0              0                 41.04%
    domestic market                        3                                                                                        33.Foregin shares in overseas
                                       0        0%            0            0              0           0              0          0            0%market
    4.Other                               0        0%            0            0              0           0              0          0            0%
    III. Total of capital shares   169,142,3     100%            0            0              0           0              0 169,142,3         100%
                                                                                     深圳中冠纺织印染股份有限公司 2013 年度报告全文
                                          56                                                                                       56Reasons for share changed□Applicable√Not applicableApproval of Change of Shares□Applicable√Not applicableOwnership transfer of share changes□Applicable√Not applicableInfluence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to commonshareholders of Company in latest year and period□Applicable√Not applicableOther information necessary to disclose for the company or need to disclosed under requirement from security regulators√Applicable□Not applicableII. Issuing and listing1.. Change of asset and liability structure caused by change of total capital shares and structureN/A.2. 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 at the end of the 5th day from
    Total shareholder at period-end                              9,164                                                                           9,088
                                                                     the date of disclosing the annual report
                                               Particular about shares held by top ten shareholders
                                                         Quantity Increase/d Number Number of                     Pledging or freezing
                                               Share    at the end ecrease in     of the        the
    Shareholder           Properties of
                                           proportion     of the        the     restricted Non-restri     Status of the
         name            shareholder                                                                                               Quantity
                                                 %       reporting reporting      shares    cted shares         shares
                                                          period       period      held        held
    Union Holdings      Domestic Non-               25.51% 43,141,03 0                         0 43,141,03
                                                                             深圳中冠纺织印染股份有限公司 2013 年度报告全文
    Co., Ltd.          State-owned legal                        2                               2
                   person
    STYLE-SUCCES Foreign legal                           24,466,02                       24,466,02
                                          14.46%                 0              0
    S LIMITED          person                                   9                               9Rich Crown
                   Foreign legal
    Investment Co.,                              3.62% 6,114,556 0                  0 6,114,556
                   personLtd.
    Union              Domestic Non-
    Development        State-owned legal         3.36% 5,681,089 -140,000           0 5,681,089
    Group Co., Ltd.    person
    Liuzhou Jiali      Domestic Non-
    Real estate        legal person
                                             2.54% 4,300,000 +80,000            0 4,300,000
    Development        State-owned legal
    Co., ltd.          personShenzhen Textile
                   State-owned                                   -5,488,80
    (Group)Holdings                              2.21% 3,744,594                    0 3,744,594
                   Legal person                                  0Ltd
                   Domestic Natural
    Zeng Ying                                    1.21% 2,049,600 +10,000            0 2,049,600
                   personLiuzhou
                   Domestic Non-Ruiheng
                   State-owned legal         1.01% 1,700,000 -10,000            0 1,700,000Mechatronics
                   personCo., Ltd.
    Shing Ying         Foreign Natural
                                             0.54%    909,962 -625,000          0     909,962
    Chieh              person
                   Domestic Natural
    Nie Zongdao                                  0.51%    854,350                   0     854,350
                   personStrategy investors or generallegal person becomes top 10
    shareholders due to rights             N/Aissued (if applicable)See Notes3)
    Explanation on associated              The controlling shareholder of the above-mentioned largest shareholder Shenzhen Union
    relationship among the aforesaid       Holdings Ltd.and third shareholder Rich Crown Investment Co., Ltd.. Is Union Development
    shareholders                           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                        Share type       Quantity
                                                                                                 RMB Common
    Union Holdings Co., Ltd.                                                            43,141,032                        43,141,032
                                                                                                 shares
                                                                           深圳中冠纺织印染股份有限公司 2013 年度报告全文
                                                                                           Foreign shares
                                                                                           placed in
    STYLE-SUCCESS LIMITED                                                           24,466,029                    24,466,029
                                                                                           domestic
                                                                                           exchange
                                                                                            Foreign shares
    Rich Crown Investment Co.,                                                                  placed in
                                                                                  6,114,556                    6,114,556
    Ltd.                                                                                        domestic
                                                                                            exchange
    Union Development Group                                                                       RMB Common
                                                                                  5,681,089                    5,681,089
    Co., Ltd.                                                                                     shares
    Liuzhou Jiali Real estate                                                                     RMB Common
                                                                                  4,300,000                    4,300,000
    Development Co., ltd.                                                                         shares
    Shenzhen Textile                                                                              RMB Common
                                                                                  3,744,594                    3,744,594
    (Group)Holdings Ltd                                                                           shares
                                                                                            Foreign shares
                                                                                            placed in
    Zeng Ying                                                                         2,049,600                    2,049,600
                                                                                            domestic
                                                                                            exchange
    Liuzhou Ruiheng                                                                               RMB Common
                                                                                  1,700,000                    1,700,000
    Mechatronics Co., Ltd.                                                                        shares
                                                                                           Foreign shares
                                                                                           placed in
    Shing Ying Chieh                                                                   909,962                       909,962
                                                                                           domestic
                                                                                           exchange
                                                                                              RMB Common
    Nie Zongdao                                                                        854,350                       854,350
                                                                                              sharesExplanation 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)(See Notes 4)Did any shareholder of the Company carry out an agreed buy-back in the reorting period?□ Yes √ No
                                                                  深圳中冠纺织印染股份有限公司 2013 年度报告全文2.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
                            charge
                                                                                             Production of and
                                                                                             dealing in various
                                                                                             fabrics, garments
                                                                                             chemical fibers and
                                                                                             textile equipment,
                                                                                             domestic commerce,
                                                                                             material supply and
                                                                                             marketing
                                                                                             (excluding
                                                                                             monopolized
                                                                                             commodities),
                                                                                             management of
                                                                                             self-owned
                                                                                             properties,
                                                                                             processing with
                                                                                             imported materials
    Shenzhen           Union               Septembe
                         Dong                                          RMB 1123.8877         and designs, internal
    Holdings Co., Ltd.                      r11,    19247150-0
                         Binggen                                       million               introduction and
                                        1989
                                                                                             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 September 2013, the total assets and net profit of Union Holdings Co.,
    financial position, cash   Ltd. were RMB 4309.12 million and RMB 63.25 million respectively. The company
                                                                   深圳中冠纺织印染股份有限公司 2013 年度报告全文
    flow and future           will develop 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
                            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
    Union Development         Dong          August
                                                 19033795-7             RMB 90.61million       engineering
    Group Co., Ltd.          Binggen       23, 1983
                                                                                               equipment and
                                                                                               materials, export of
                                                                                               labor, external
                                                                                               investment,
                                                                                               technical consulting
                                                                                               services, real estate
                                                                                               development and
                                                                                               sales within the
                                                                                               scope of land use
                                                                                               right legally
                                                                                               obtained, property
                                                                                               management and
                                                                        深圳中冠纺织印染股份有限公司 2013 年度报告全文
                                                                                                     lease services and
                                                                                                     sales of automobiles
                                                                                                     (including cars).
                           At the end of 2012, the total assets, shareholders' equity, Shareholders‘ equity attributable toOperating results,
                           shareholders of the parent company and net profit of Union Developing Group Co., Ltd. werefinancial position, cash
                           RMB7907.77 million, RMB 3384.88 million,1476.29 million and RMB 70.79 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 applicableParticulars about the actual controller of the Company
    Union Group Co., Ltd. holds 31.32% equity capital of China Union Holding Ltd. and has controllingrelationship with China Union Holding Ltd. which is the controlling shareholder of the company. Thus, HualianDevelopment Group Co., Ltd. is the actual controller of the company. At present, the Company only has thelargest shareholder but no actual controller. Regarding actual controller, Union Group makes the followingstatement:
    (1) Brief introduction of Union GroupUnion Group was jointly sponsored and established by 21 corporate shareholders including Ministry of TextileIndustry and textile departments or bureaus of 18 provinces or cities in August 1983. Registered capital:RMB90.61 million By taking the policy advantages of Shenzhen Special Zone, Union Group, as a model enterprise inChinese textile industry, is specially engaged in investment and operation in textile industry and import and exportof Textile products, which is directly under Ministry of Textile Industry.
    Throughout the years, due to constant reform of economic management system and quick development ofsocialist market economy, the Group has experienced management mechanism 's adjustment and equity structurechange for many times. In 1993 when the State Council carried out structural reform, Ministry of Textile Industrywas dissolved and China Textile Federation was established. The Group's relationship of subordination continued.After China Textile Federation was dissolved in 1998, the Group was put under the supervision of CentralEnterprise Industrial Committee. In 2003, State-owned Assets Supervision and Administration Commission of theState Council was established. In April 2005, The Group became one of the enterprises under its supervision.State-owned Assets Supervision and Administration Commission of the State Council transferred 12.09%state-owned equity of Union Group to OCT Group Company and authorized OCT Group Company to perform the
                                                                           深圳中冠纺织印染股份有限公司 2013 年度报告全文capital contributor's responsibilities on behalf of 12.09% state-owned equity. OCT Group Company became thelargest shareholder of Union Group.
    Union Group has been engaged in textile and garment industry for long term. Due to fierce marketcompetition, state-owned capital has left or is leaving textile and garment industry. The provincial managementmechanism to which the Group's shareholders are subject has also undergone great change. From 2004, someshareholders of the Group as promoters began to assign shares of Union Group in succession according to thechange of situation and their own conditions. Some private enterprises became the shareholders of Union Group.By November 2005, Hangzhou Jinjiang Group Co., Ltd. acquired 20.89% equity of Union Group and became thelargest shareholder. OCT Group became the second largest shareholder.(1) At present, Union Group has 16 corporate shareholders. The particulars are as follows:
                                                                Amount of capital       Proportion of capital   Remarks
        No.                 Name of shareholder
                                                             contribution (RMB‘0000)     contribution (%)
        1     Hangzhou Jinjiang Group Co., Ltd.                          1,892.8120                  20.8896    Private
        2     OCT Group                                                  1,094.9500                  12.0842 State-owned
        3     Henan Fuxin Investment Co., Ltd.                             984.2567                  10.8600    Private
        4     Changan International Trust Co., Ltd                         926.0019                  10.2196 State-owned
        5     Shandong Textile Industrial Association                      569.9196                    6.2898 State-owned
        6     Hebei National assets Holding Co., Ltd.                      531.4800                    5.8655 State-owned
        7     Zhejiang Zhengcai Trade Co., Ltd                             530.0000                    5.8492   Private
        8     Heilongjiang Textile Industry Association                    500.0000                    5.5181 State-owned
        9     Sichuan Shulian Co., Ltd.                                    329.0240                    3.6312   Private
        10    Hubei      Textile    Industry   Association                 300.0000                    3.3108 State-owned
              Secretariat
        11    Jiangsu Textile (Group) Co., Ltd.                            288.6723                    3.1859 State-owned
        12    Liaoning Textile Industry Association                        286.4400                    3.1612 State-owned
        13    Shenzhen Textile (Group)Holdings Ltd                         260.0000                    2.8694 State-owned
        14    Xinjiang      Uygur   Autonomous     Region                  236.4600                    2.6096 State-owned
              Textile Industry Association
        15    Beijing Textile Holdings Co., Ltd.                           215.8400                    2.3820 State-owned
        16    China Textile Machinery (Group)Co., Ltd.                     115.1435                    1.2707 State-owned
                                    Total                                   9061.00                    100.00
                                                                 深圳中冠纺织印染股份有限公司 2013 年度报告全文
    As of the day of issuing this report, Union Group has 16 shareholders in total, which are all corporateshareholders. 12 shareholders are state-owned enterprises or enterprises with government background, whichcollectively hold 58.77% equity of Union Group. 4 shareholders are private enterprises, which collectively hold41.23% equity of Union Group.
    (2) Composition of board members of Union Group
    According to the Articles of Association of Union Group, the directors shall be appointed by the corporateshareholders that contribute capital of more than RMB 5 million (not including RMB 5 million) and be elected bythe shareholders' meeting. The board of directors shall be composed of 7 to 11 members. The current sixth boardof directors was elected in May 2012.. It has 7 members, including 5 members coming from corporateshareholders, 1 member jointly recommended by shareholders and 1 independent director. The particulars are asfollows:
           No                        Name of shareholder                   Directors appointed       Remarks
           1     Hangzhou Jinjiang Group Co., Ltd.                        1 person/Dou Baibing
           2
                                                                      1       person      /Wang
                 OCT Group
                                                                      Xiaowen
           3
                 Shandong Textile Industrial Association                   1 person/Xia Zhilin
           4
                                                                          1 person /Zhuang
                 Hebei National assets Holding Co., Ltd.
                                                                               Zhiming
           5     Zhejiang Zhengcai Trade Co., Ltd                     1 person/Zhang Sijie
           6
                                                                                                  Common
                                                                            Dong Binggen
                                                                                                  recommended
           7
                                                                                                   Independent
                                                                           Long Xingping
                                                                                                     Director(3) Description of the actual controllers
    Union Group has been a standardized limited liability company since its establishment. Despitedecentralized equity and large number of shareholders, the department in charge of industry and state assetmanagement department has been incontrovertible direct administrator because they were all state-ownedshareholders and engaged in the same industry before 2004. Private capital has entered since 2004 and itsproportion has been unceasingly enlarged. The largest shareholder turned from national administrativedepartment into a state-owned enterprise, which was then replaced by a private enterprise. The actual controller
                                                                   深圳中冠纺织印染股份有限公司 2013 年度报告全文of Union Group gradually changed. The concrete process of change is as follows:
    (1) After the establishment of Union Group and before State-owned Assets Commission under the StateCouncil transferred 12.09% equity held by it to OCT Group, the relationship of subordination of Union Groupwas definite. State administrative agencies (Ministry of Textile Industry, China Textile Federation, industrialcommission of national enterprise and State-owned Assets Commission under the State Council) exercisedmanagement rights. Relevant national departments were responsible for the establishment of board of directors,appointment of management, audit and supervision.(2) From April 2005, OCT Group became the largest shareholder of Union Group. The management methodsadopted when State-owned Assets Commission under the State Council conducted supervision were stilladopted in some aspects. For examples, Union Group regularly submitted financial data to state assetsmanagement department and accepted the economy audit by the supervisory committee under the State Council.The financial statements of OCT Group consolidated those of Union Group. However, changes started in someaspects. The establishment of board of directors and the appointment of management were carried outcompletely according to the Articles of Association of Union Group. The shareholders' general meeting and theboard of directors independently exercised the powers assigned by laws and regulations. The reelection of boardof directors and the appointment of management were no longer reported to relevant department for examinationand approval.(3) In 2005, Hangzhou Jinjiang Group held 20.89% equity of Union Group through acquisition and became thelargest shareholder of Union Group by replacing OCT Group. Hangzhou Jinjiang Group and OCT Grouprespectively appointed one of 8 members of the fifth board of directors reelected in that year.(4) In 2007, Union Group did not submit various financial data to OCT Group and state-owned regulatoryauthority. The statements of OCT Group did not consolidate those of Union Group. State assets supervisionorgan did not conduct regular economy audit of Union Group either.
    (5) Though private enterprise Hangzhou Jinjiang Group is the largest shareholder, only one of 1 member ofthe board of directors comes from it and it has no substantial influence on important decisions of Union Group.Meanwhile, Hangzhou Jinjiang Group neither participated in the daily management and operation of UnionGroup, nor required submission of daily financial statements, nor consolidated financial statements nor sentpersonnel to conduct economy audit(6) From the fifth board of directors, Dong Binggen was jointly recommended by all shareholders to enter theboard of directors and was elected as board chairman. He does not represent any shareholder. Instead, he isresponsible for all shareholders.
                                                                   深圳中冠纺织印染股份有限公司 2013 年度报告全文
       Based on the above facts, Union Group holds the opinion that Union Group, as a limited liability companywith a history of 31 years, has formed a standardized mode of operation according to law and businessmanagement during change of equity and its corporate governance structure has been increasingly stable andmature. The shareholders' meeting is the highest power organ of the Company. The board of directors isresponsible to the shareholders' meeting and exercises the right to make decisions on important matters of UnionGroup according to the articles of association. The management is responsible for daily operation managementof Union Group. At present, Union Group does not have administrative department or unit in charge. The largestshareholder only holds 20.89% equity of Union Group. No shareholder has absolute control over or absoluteinfluence on the shareholders' meeting and board of directors of Union Group and is daily operation. The mutualrestriction between shareholders of Group is quite apparent. Therefore, Union Group only has the largestshareholder and does not have actual controller at present.The particulars of the shareholders holding more than 10% of total shares on the level of final control
    √Yes        □ NoCorporate shareholders:Name of
    shareholder     Legal       Date of
                                       Organizatio Registered
    on the level representati incorporatio                                             Main business
                                         n code     Capital
    of final    ve/Leader        n
    control
                                          14375868-7   99000    Licensed business: Coal wholesale. General
                                                                business: wholesale and retail of paper, paper
                                                                products and raw materials, general
                                                                merchandises, electrical wires and cables,
                                                                communication equipment, building
    Hangzhou                                                        materials, decorative materials, hardware and
    Jinjiang       Dou         March 17,                            electrical appliances, electronic products,
    Group Co.,     Zhenggang   1993                                 chemical products and raw materials (except
    Ltd.                                                            chemical hazardous articles and poisonous
                                                                chemicals), metal material and plastic
                                                                products; export and import business, all
                                                                lawful businesses not subject to examination
                                                                and approval, including the business scope of
                                                                branches.
                                          190346175    630000   Key business: Export of textile products and
    OCT Group      Ren Kelei   June 6, 1986
                                                                light industrial products and business of
                                                                commodities and mechanical equipment of
                                                                the first category for self use in the special
                                                                    深圳中冠纺织印染股份有限公司 2013 年度报告全文
                                                                 zone approved by competent department of
                                                                 special zone, import of industrial products
                                                                 (subject to (92) Wai Jing Mao Guan Ti Shen
                                                                 Zheng Zi No. A19024 Document issued by
                                                                 Economic and Trade Ministry), compensation
                                                                 trade, investment in industries, tourism, real
                                                                 estate, commerce and trade, finance and
                                                                 insurance, packaging, decoration and printing
                                                                 industries, domestic sales of commodities
                                                                 produced for export and imported
                                                                 commodities, tourism, warehouse lease,
                                                                 culture and art business, donation, bonded
                                                                 warehouse for automobiles, convention and
                                                                 exhibition services (the businesses subject to
                                                                 permit can be operated only after the
                                                                 obtainment of relevant permits) and sales of
                                                                 automobiles (including cars).
    Henan                                      56984136-5   1100     Investment in industriesFuxin
              Yan Sanyin   March 4, 2011Investment Co., Ltd.
                                           22060745-3   125888   Fund trust, personal estate trust, real estate
                                                                 trust, securities trust, trust of other properties
                                                                 or property rights, doing investment fund
                                                                 businesses as a sponsor of investment funds
                                                                 or fund management companies,
                                                                 reorganization, takeover and merger of
                                                                 enterprise assets, project financing, money
                                                                 management for enterprises, financial
    Changan                                                          consultation, securities underwriting
    Internation Gao            December                              approved by relevant department of the State
    al Trust Chengcheng        28,1999                               Council, intermediary services, consultation
    Co., Ltd.                                                        and credit inquiry, trusted safekeeping and
                                                                 safety-deposit box business, application of
                                                                 inherent properties by means of deposit with
                                                                 banks, due from banks, loan, lease and
                                                                 investment, providing guarantee to others
                                                                 with inherent properties, and other businesses
                                                                 stipulated in laws and regulations or
                                                                 approved by China Banking Industry
                                                                 Regulatory Commission.
    Operating     1.As of December 31, 2013, the total assets and net assets of Hangzhou Jinjiang Group Co., Ltd. were
    results,      respectively RMB 40.439 billion and RMB 14.92 billion. Its operating income and net profit for 2013
                                                                           深圳中冠纺织印染股份有限公司 2013 年度报告全文financial  were respectively RMB 24.988 billion million and RMB 0.591 billion.position,  2. . As of December 31, 2013, the total assets and net assets of OCT Group . were respectively RMBcash flow 104.5 billion and RMB 33 billion. Its operating income and net profit for 2013 were respectivelyand future RMB48.2 billion and RMB 4.8 billion.developmen 3. As of December 31, 2013, the total assets and net assets of Henan Fuxin Investment Co., Ltd. weret strategy respectively RMB 42.50 million and RMB 11.93 million. Its operating income and net profit for 2013
              were respectively RMB 0 million and RMB 0.53 million.
              4.. As of December 31, 2013, the total assets and net assets of Changan International Trust Co., Ltd.
              were respectively RMB 4.003 billion and RMB 3.095 billion. Its operating income and net profit for
              2013 were respectively RMB 2.329 billion million and RMB 0.944 billion.
                     The above-mentioned shareholders on the level of control have no control relationship with the
              Company and its actual controller Union Group. There is a difference between their business
              operations and strategic positioning. There is no substantial influence on the development of the
              Company.The equityof otherdomesticandforeignlistedcompaniescontrolled
           Not applicableby theshareholders on thelevel offinalcontrol inthe reportperiodBlock 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.
                                                                              深圳中冠纺织印染股份有限公司 2013 年度报告全文
                             31.32%                                  99.99%
                                                                                               3.36%
            Union Holdings Co., Ltd.                     Rich Crown Investment Co.,
                                                                    Ltd.
                             25.51%                                   3.62%
                        Shenzhen Victor Onward Textile Industrial Co., Ltd.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
                                                                                                   Date of initial
    Name of the       Quantity of the   Proportion of the     Quantity of      Proportion of the                           the end of
                                                                                                  disclosure of the
    shareholder/conce     shares to be        shares to be      shares actually    shares actually                         implementation
                                                                                                    shares to be
      rted actor        acquired         acquired (%)          acquired         acquired (%)                             of the share
                                                                                                      acquired
                                                                                                                       acquisition planN/ANotice to other conditionsN/A
                                                                          深圳中冠纺织印染股份有限公司 2013 年度报告全文
                  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)
    Hu           Board                                         October    October
                           In office   Male           51                                0           0           0           0
    Yongfeng chairman                                          18,2011    18, 2014
             Vice Board                                    October    October
    Ding Yue                   In office   Male           55                                0           0           0           0
             chairman                                      18,2011    18, 2014
             Vice Board                                    October    October
    Shu Yibo                   In office   Female         41                                0           0           0           0
             chairman                                      18,2011    18, 2014
                                                           October    October
    Zhang Mei Director         In office   Female         38                                0           0           0           0
                                                           18,2011    18, 2014
    Feng                                                       October    October
             Director      In office   Male           51                                0           0           0           0
    Junbin                                                     18,2011    18, 2014
    Zhang                                                      October    October
             Director      In office   Male           51                                0           0           0           0
    Jinliang                                                   18,2011    18, 2014
             Independe                                     October    October
    Jin Ligang                 In office   Male           54                                0           0           0           0
             nt director                                   18,2011    18, 2014
    Shen         Independe                                     October    October
                           In office   Male           56                                0           0           0           0
    Songqin      nt director                                   18,2011    18, 2014
    Chen         Independe                                     August 31, October
                           In office   Female         61                                0           0           0           0
    Jinmei       nt director                                   2012       18,2014
             Chairman
             of the
    Dong                                                       October    October
             supervisor In office      Male           64                                0           0           0           0
    Binggen                                                    18,2011    18, 2014
             y
             committee
    Huang                                                      October    October
             Supervisor In office      Female         56                                0           0           0           0
    Xiaoping                                                   18,2011    18, 2014
    Pan                                                        October    October
             Supervisor In office      Male           62                                0           0           0           0
    Weichao                                                    18,2011    18, 2014
    Zhang        Deputy        In office   Male           51 October      October           0           0           0           0
                                                                      深圳中冠纺织印染股份有限公司 2013 年度报告全文
    Jinliang     general                                    18,2011   18, 2014
             Manager,
             Board
             secretary
    Ren          Manager
                                                        October   October
    Changzhe of Finance In office   Male               38                               0         0         0         0
                                                        18,2011   18, 2014
    ng           Dept
    Total       --       --        --        --            --        --            0         0         0         0II. 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 LanzhouUniversity in 1983. He took the turns of deputy section chief of personnel labor department of Textile TechnologyDepartment, section chief of personnel labor department of textile headquarters, deputy director of personnel labordepartment of textile headquarters and concurrently director of talents exchange center of Textile Headquartersand chairman of the Board of Union Holdings Co., Ltd., He now serves as Vice President of Union DevelopmentGroup Co., Ltd. and convener of the supervisory committee of Union Holdings Co., Ltd., He served as director ofthe Company from June 2002 till now. He served as Vice Chainman board of the Company since April 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 since July 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 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 2008.Zhang Jinliang, male, was born in May 1962, Senior Accountant, a senior accountant with bachelor degree, was
                                                                  深圳中冠纺织印染股份有限公司 2013 年度报告全文born 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 2011.Independent directors: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 asIndependent directors of the company since April 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 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 2012.Ms. Chen Jinmei is appointed as an independent director of the company and resigned from the Board ofDirectors for her personal reasons on January 21, 2014. Her resignation application will be effective after a newindependent director elected by the shareholders‘ meeting of the company replaces her. During this transitionalphase, Ms. Chen will continue to assume responsibility as an independent director.Supervisors: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 till
                                                                 深圳中冠纺织印染股份有限公司 2013 年度报告全文now.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, deputychief 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 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 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
               Union Holdings Co., Ltd.                         June 21, 2013   June 20, 2016   No
    Binggen                                             chairman
                                                    Vice        May 28,
    Ding Yue       Union Development Group Co., Ltd.                                May 17, 2015 Yes
                                                    President   2012
                                                    Convener
    Ding Yue       Union Holdings Co., Ltd.             of      the June 21, 2013 June 20, 2016     No
                                                    Supervisor
                                                                 深圳中冠纺织印染股份有限公司 2013 年度报告全文
                                                   y
                                                   Committee
                                                   Vice
    Hu Yongfeng Union Development Group Co., Ltd.                   May 18, 2012    May 17, 2015    Yes
                                                   President
                                                   Vice Board
    Hu Yongfeng Union Holdings Co., Ltd.                          June 21, 2013 June 20, 2016       No
                                                   chairman
                                                Secretary
                                                of     Party
    Huang                                           committee, October 1,
              Union Development Group Co., Ltd.                                                 Yes
    Xiaoping                                        secretary of 2008
                                                discipline
                                                committeeHuang
              Union Holdings Co., Ltd.             Director     June 21, 2013   June 20, 2016   NoXiaoping
                                                Manager of
                                                           February 1,
    Zhang Mei     Union Development Group Co., Ltd. Finance                                         Yes
                                                           2011
                                                Dept.
    Zhang Mei     Union Holdings Co., Ltd.             Director     June 21, 2013   June 20, 2016   No
                                                   Deputy
            Shenzhen Textile(Holding) Co.,                      August 17,
    Feng Junbin                                        general                      August 16, 2016 Yes
            Ltd.                                                2013
                                                   manager
    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., Board
    Shu Yibo                                                        July 1, 2002                    Yes
              Ltd                               chairman
              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 ,
                                                                     深圳中冠纺织印染股份有限公司 2013 年度报告全文supervisors and senior executives
    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                          51 In Office                  38                             38
            neral
            Manager
              Vice Board
    Ding Yue                 Male                         55 In Office                     0
              chairman
              Vice Board
    Shu Yibo                 Female                       41 In Office                     0
              chairman
    Zhang Mei     Director       Female                   38 In Office                     0
    Feng Junbin Director         Male                     51 In Office                     0
    Zhang         Director ,
                          Male                        51 In Office                     0
    Jinliang      Deputy GM
              Independent
    Jin Ligang                Male                        54 In Office                     5                           5
              director
              Independent
    She Songqin               Male                        56 In Office                     5                           5
              director
              Independent
    Chen Jinmei               Female                      61 In Office                     5                           5
              director
              Chairman of
    Dong          the
                          Male                        64 In Office                     0
    Binggang      supervisory
              committee
    Huang         Supervisor     Female                   56 In Office                     0
                                                                                    深圳中冠纺织印染股份有限公司 2013 年度报告全文Xiaoping
    Pan Weichao Supervisor            Male                              62 In Office                        9                                9
    Zhang            Board
                                  Male                              51 In Office                       23                              23
    Jinliang         secretary
    Ren        Manager of
                        Male                                        38 In Office                       15                              15Changzheng Finance Dept
    Total              --                --                  --               --                    100               0              100Incentive 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
                                                                                Ms. Chen Jinmei resigned from the Board of Directors for
                                                                                her personal reasons,Her resignation application will be
                  Independent
    Chen Jinmei                         Dimission               January 21, 2014 effective after a new independent director elected by the
                  director
                                                                                shareholders’ meeting of the company replaces her.
                                                                                During this transitional phase.V. 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.
           Classified                Divided by function                       Number of persons                     Proportion
    Classified according ty                         Financial                 5                                   16%professions
                                          Administrative                  4                                   13%
                                  Logistics                               22                                  71%
                                  Total                                   31                                  100%
    Classified according by           Postgraduate or above                   1                                   3%
    education background                           Universities               3                                   10%
                                                Colleges                  3                                   10%
                                  Mid-school or below                     24                                  77%
                                  Total                                   31                                  100%
    As of December 31, 2013, The Company should bear expenses for 1 retired employees.
                                                         深圳中冠纺织印染股份有限公司 2013 年度报告全文(1) The figure of professional composition(1) The figure of education background of the professional composition
                                                                  深圳中冠纺织印染股份有限公司 2013 年度报告全文
                                VIII. Administrative structureI. General situationThe company‘s governance meets the requirements of regular documents on the governance of the listedcompanies issued by China Securities Regulatory Commission.During the reporting period, The company has strictly abided by the relevant laws, rules and regulations requestedon ―Corporate Law‖, ―Securities Law‖, ―Listing Rules of Shenzhen Stock Exchange‖ and―Governance Rules of Listed Companies‖ and by China Securities Regulatory Commission, established andperfected the internal control management system, and constantly made the deep improvement of the corporategovernance activities to further standardize the company operations and improve the management level. Thecompany‘s governance meets the basic requirements of regular documents on the governance of the listedcompanies issued by China Securities Regulatory Commission.(1).. Shareholders and shareholders' general meeting: The Company convened and heldshareholders' general meeting strictly according to the requirements of Opinions on Standardizationof Shareholders' General Meeting of Listed Companies, formulated Rules of Procedure ofShareholders' General Meeting, ensured all shareholders, especially medium and small shareholders,enjoy equal position and can fully exercise their own rights.(2).. Relationship between the controlling shareholder and the Company: The acts of the controllingshareholder of the Company were standardized. It did not exceed the authority of the shareholders'general meeting to directly or indirectly intervene with the decision-making and operating activitiesof the Company. The Company is independent from its controlling shareholder in respect ofpersonnel, assets, finance, organ and business. The board of directors, the supervisory committeeand internal organ of the Company are able to operate independently.3. The Directors and The Board of Directors: the Board of Directors includes four special committees, such asAudit Committee, Nomination Committee, Strategy Committee and Remuneration and Appraisal Committee,which has provided a favorable support to the company for the decision-making related issues. Each specialcommittee has operated according to their work responsibilities and procedure rules, made research andexamination for the relative business and major issues of the company, and expressed the professional opinions inthe Board of Directors to offer support and advice for the scientific decision-making of the Board and ensure theBoard‘s work more scientific and efficient. Also, the organization of the Board of Directors is in line with therequirement of laws and regulations, and the independent directors play an important role in the corporatedecision-making. So, the company attaches importance to the function of the independent directors. In thecompany‘s management, the independent directors make careful review and express the independent views for thefinancial audit, the affiliated transactions and other issues.(4).Supervisors and the supervisory committee: The number and composition of the SupervisoryCommittee of the Company complied with the requirements of laws and regulations. TheSupervisory Committee of the Company formulated the Rules of Procedure of the Supervisory
                                                                    深圳中冠纺织印染股份有限公司 2013 年度报告全文Committee. The supervisors of the Company were able to perform their duties seriously, take theattitude of being responsible for all shareholders and supervise the legality and regulationconformity of the Company's finance and the duty performance of the directors, managers and othersenior executives of the Company.5. The Company and The Affiliated Party: the affiliated transactions between the company and the affiliated partyare strictly managed and the audit of the affiliated transactions is performed in accordance with the relevantprocedures. Also, the affiliated transactions are in compliance with the laws and regulations, and there not existthe issues that the major shareholders make use of the affiliated transactions to occupy the funds of the listedcompany.(6)Information disclosure and transparency: The Company designated the secretary to the board ofdirectors to be responsible for information disclosure, Regulations on Management of InformationDisclosure,Regulations on Management of External Information Users and reception of shareholderand consultation. In the report period, the Company was able to truly, accurately, completely andtimely disclose relevant information according to the provisions of laws, regulations and theArticles of Association of the Company. The Company will continue to operate in a standardizedway strictly according to the requirements of relevant laws and regulations including the CompanyLaw, further perfect company administration structure and establish and improve variousregulations in light of the gap with the requirements of Standards of Administration of ListedCompanies, ensure the maximization of shareholders' interests and safeguard the lawful rights andinterests of all shareholders.
    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 communicated withmedium and small investors by making use of telephone, email, especially the platform for communication withinvestors set up by Shenzhen Stock Exchange to let them know itself better and improve its informationtransparency.Does there exist any difference in compliance with the corporate governance , the PRC Company Law and therelevant provisions of CSRC,□ Yes √ NoThere exist no difference in compliance with the corporate governance , the PRC Company Law and the relevantprovisions of CSRC.Implementation of the Campaign of Corporate Governance and Preparation and Implementation of theRegistration Management System for insidersIn the Report period, The company has not found the situation that the relevant personnel is engaged in the insidertransaction by using the insider information and suggest others to conduct the transaction with the insiderinformation, there is no the situation that the insider information is disclosed, and not exists the situation that thecompany shall be taken a crackdown and ordered for rectification by the regulatory department because of theimplementation of the Registration System on Learners of Insider Information or the suspicion of insidertransaction.
                                                                         深圳中冠纺织印染股份有限公司 2013 年度报告全文II. Annual General Meeting and Extraordinary Shareholders‘ Meetings in the Reporting Period1.Annual General Meeting
                                             Description of
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                                                                         深圳中冠纺织印染股份有限公司 2013 年度报告全文III. 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
    Chen Jinmei                      6                 1                 5                   0               0 No
    Jin Ligang                       6                 1                 5                   0               0 No
    Shen Songqin                     6                 1                 5                   0               0 NoNumber of general meetings
    attended by independent directors                                                                                     2as 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 board ofdirectors. They gave many opinions and suggestions during meetings and adjournment and the Company adoptedall of them.IV. Duty Performance of Special Committees under the Board of Directors in the Reporting Period
    The board of directors of the Company has special committees including audit committee, remuneration andappraisal committee, strategy committee and nomination committee. According to the scope of authority specifiedin the working rules for them, the committees conducted study and put forward opinions and suggestions for
                                                                   深圳中冠纺织印染股份有限公司 2013 年度报告全文reference by the board of directors for decision making.
    According to relevant regulations of CSRC, the audit committee of the board of directors of the Company didthe following work during the preparation of the annual report of the Company for 2013:
    1. On November 18, 2013, the Audit Committee and the management of the company and the certifiedaccountants for annual audit (CPAs) of Dahua Accounting Office Ltd. (special general partner) held the firstmeeting on the audit work of the year 2013 annual financial report. The members of the Audit Committee and themanagement of the company made the detailed introduction of the basic situation of the company to the CPAs.2. On January 3, 2014, the Audit Committee of the company examined the audit work plans of the year 2013annual financial report, heard the audit schedule and progress made by the accountants for annual audit, andagreed to the audit work of the 2013 annual financial report proposed by Accounting Office.3. On January 9, 2013, the Audit Committee under the Board of Directors reviewed the year 2013 annual financialaccounting statements offered by the company, and made the following comments: the year 2013 annual financialaccounting statements basically reflected the assets condition and operation performance, the Audit Committeeagreed to conduct the audit work of annual financial report on this basis, and advised the Finance Department toactively cooperate and coordinate this audit work, in order to strengthen communication and contact and timelyreflect some issues in the process of audit and the advancement of audit work to the Audit Committee.4. On January 27, 2014, the Audit Committee under the Board of Directors and the certificated accountants ofannual audit held a conference call. CPAs described the audit conditions on the phone, and the members of theAudit Committee believed that the views of CPAs on all major matters were basically reflect the company‘sfinancial condition on December 31, 2013 and the business performance and cash flows of the year 2013 truly andfairly. So, they didn‘t make objection to the preliminary results of the certificated accountants of annual audit.5. On February 26, 2014, the Audit Committee under the Board of Directors examined thecompany‘s 2013 annual audit report issued by Dahua Accounting Office Ltd. (special generalpartner), and the Audit Committee agreed to the audit results on the year 2013 annual accountingstatements by Dahua Accounting Office Ltd. (special general partner) and agreed to submit thefinancial audit report to the Board of Directors to examine. For the summary report of the year 2013annual audit work issued by Dahua Accounting Office Ltd. (special general partner), the AuditCommittee believed that Dahua Accounting Office Ltd. (special general partner) has strictlyfollowed the provisions of auditing regulations and standards to develop and complete thecompany‘s 2013 annual audit work with the sufficient auditing time, high professional quality andstrong performance ability and sense of risk, the issued audit report fully reflected the company‘sfinancial condition, business performance and cash flows of the year 2013, and its audit conclusiontruly reflected the actual situation of the company.The Duty Performance of the Remuneration Committee under the Board of Directors of the Company: theRemuneration Committee under the Board of Directors has reviewed the remuneration of the directors, thesupervisors and the senior management members of the company which was disclosed in 2013 according to theprovisions of the ―Detailed Work Rules of the Remuneration and Appraisal Committee under the Board ofDirectors‖, and believed that the remuneration of the directors, the supervisors and the senior managementmembers disclosed in year 2013 annual report of the company has been strictly implemented as per the relevantprovisions.V. Work of the supervisory CommitteeDid the supervisory Committee find any risk existing in performing the supervision activities in the reporting
                                                                    深圳中冠纺织印染股份有限公司 2013 年度报告全文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, organizationand 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 received remunerationfrom the controlling shareholder.3. Assets: The Company has complete assets. Its property rights are definite and not related to its controllingshareholder 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 the Company areable to operate independently.5. Finance: The Company has independent finance. It set up independent finance department and establishedindependent financial accounting system. It has standardized and independent financial and accounting systemand financial control system applicable to branches and subsidiaries. The Company independently pays taxesaccording to law. It opened accounts with banks independently. The Company and its controlling shareholder donot 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 of performanceappraisal are recorded in the archives of executives, and are linked to the compensations and hiring of executives.
                                                                       深圳中冠纺织印染股份有限公司 2013 年度报告全文
                                                 IX. Internal Control
    I.         Internal control ConstructionThe company has abided by the requirements of regular documents such as ―Corporate Law‖ and ―InternalControl Guideline in Listed Companies‖, established and improved the corporate governance structure, perfectedthe internal control system, and met all the provisions of the relevant rules and regulations. Also, the company hasstrictly implemented the relevant systems on the internal control, promoted the normative operations and healthydevelopment of the company, protected the legitimate rights and interests of investors, guaranteed the company‘sassets security and accelerated the stable, healthy and sustainable development for the company. For the detailsabout the self-evaluation of internal control of the company during the reporting period, please see the ―AnnualSelf-evaluation Report of Internal Control in 2013‖.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, Management and allemployees of the company aiming at the achievement of control target processes. The Board of Directorscomplies with the national laws and regulations and the requirements of securities regulatory authorities toconstantly improve all the rules and regulations of the company‘s internal control, promote the establishment,perfection and effective operation of the company‘s internal control, and assume important responsibility for theintegrity and rationality of all construction of internal control system. Also, the company senior managers bear theprimary responsibility for the implementation of the internal control system.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 of China‖,―Fundamental Norms for Enterprise Internal Control‖ and ―Application Guidelines of Enterprise Internal Control(No.14) — Financial Report‖ as the basis of establishment of the internal control of financial report for thecompany, implements the internal control for the standardization of preparing the financial report, submitting andanalysis of use of control processes, improvement the authorization and approval system on all aspects offinancial report, establishment of daily information verification system, full use of accounting informationtechnology, accounting treatment of determination of the major issues, verification of debt of inventory assets,establishment and implementation of calculation and budget and other key aspects, in order to ensure the legality,compliance, trueness and integrity.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 periodNo significant defect of internal control was found in the reporting periodDate of disclosing the internalcontrol self-assessment report, February 28, 2014full text
                                                                         深圳中冠纺织印染股份有限公司 2013 年度报告全文Index of disclosing theinternal control
                                 Refer to Announcement that disclosed on www.cninfo.com.cn on February 28, 2014.self-assessment report, fulltextV.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, 2013.Date of disclosing the internal
                                Februar 28, 2014control audit report, full textIndex of disclosing the
    internal control audit report,   Refer to Announcement that disclosed on www.cninfo.com.cn on February 28, 2014.full textHas 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 the Board ofDirectors√Yes □NoVI. Establishment and implementation of the Responsibility investigation system for serious Errorsin the Annual ReportIn the report period, The company examine itself according to―Responsibility Claim System on Significant Errorin Information Disclosure of Annual Report‖,there are no the occurrence of serious accounting errors correction,grave omission of information supplements.
                                                                  深圳中冠纺织印染股份有限公司 2013 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                  February 26, 2014
                                                        Da Hua Certified Public Accountants(Special GeneralName of audit firm
                                                        Partnership)
    Document No. of the auditor‘s report                   Dahuashenzi[2014]No.001429
    Name                                                    Xu Haining , Yang Chunxiang
                                             Auditors‘ Report
                                                                                       Dahuashenzi[2014]No.001429To 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 balance sheet onDecember 31, 2013, Consolidation and parent Company profit statement, Consolidation and parent Company cashflow statement for the year 2013 and Consolidation and parent Company statement of 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 these financialstatements in accordance with Accounting Standard for Business Enterprises and China Accounting System ForBusiness Enterprises. These responsibilities include: (i) designing, implementing and maintaining internal controlrelevant to the preparation and the true and fair presentation of financial statements that are free from materialmisstatement, whether due to fraud or error;(ii) selecting and applying appropriate accounting policies; (iii) andmaking accounting estimates that are reasonable in the circumstances.
       II. Auditor‘s responsibility
    Our responsibility is to express an opinion on these financial statements based on our audit. We conductedour audit in accordance with the Standards on Auditing for Certified Public Accountants. Those standards requirethat we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance as to
                                                                   深圳中冠纺织印染股份有限公司 2013 年度报告全文whether the financial statements free from material misstatement.
    An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in thefinancial statements. The procedures selected depend on the auditor‘s judgment, including the assessment of therisks of material misstatement of the financial statements, whether due to fraud or error. In making those riskassessments, the auditor considers internal control relevant to the entity‘s preparation and true and fairpresentation of the financial statements in order to design audit procedures that are appropriate in thecircumstances, but not for the propose of expressing an opinion on the effectiveness of the entity‘s internalcontrol.. An audit also includes evaluating the appropriateness of accounting policies used and the reasonablenessof accounting estimates made by the management, as well as evaluating the overall presentation of the financialstatements.
    We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for ouraudit opinion.
    III. Auditing opinionIn our opinion, the financial statements give a true and fair view of the financial position of the Company as of 31December 2013 and its financial performance and cash flows for the year then ended in accordance with theAccounting Standards for Business Enterprises and China Accounting System for Business Enterprises.IV. Matters emphasizedWe remind the users of financial statements to pay attention to the fact that the Company stopped production anddismissed most of workers since March 2007. And most subsidiaries of the company had stopped production andit maintained daily operation by house leasing. Shenzhen Victor Onward Textile Industrial Co., Ltd. had disclosedits improvement measures in Note 11of Financial Statement, but its sustainable operation ability is still uncertain.This paragraph does not affect audit opinions that have been given.
    Da Hua Certified Public Accountants(Special General          C.P.A:Xu Haining
                    Partnership)
                     Beijing China
                                                              C.P.A:Yang Chunxiang
                                                                                        February 26, 2014
                                                                   深圳中冠纺织印染股份有限公司 2013 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                                      63,502,910.00                           52,227,262.00
       Settlement provision
        Outgoing call loan
    Trading financial assets
          Bill receivable                                    1,500,000.00                            1,500,000.00
       Account receivable                                                                             744,712.00
          Prepayments                                            25,192.00                            176,443.00
       Insurance receivable
    Reinsurance receivable
    Provisions of Reinsurance
       contracts receivable
        Interest receivable                                      79,340.00                             38,414.00
       Dividend receivable
    Other account receivable                                   311,279.00                            260,005.00Repurchasing of financial assets
           Inventories                                                                                101,536.00Non-current asset due in 1 year
        Other current asset
      Total of current assets                               65,418,721.00                           55,048,372.00
      Non-current assets:
    Loans and payment on other‘s
        behalf disbursed
    Disposable financial asset                                  582,942.00                            751,542.00
    Expired investment in possess
      Long-term receivable
    Long term share equity
                                                            66,931,685.00                           65,784,312.00
          investment
                                         深圳中冠纺织印染股份有限公司 2013 年度报告全文
      Property investment            23,458,153.00                        31,041,484.00
          Fixed assets                7,191,205.00                        12,416,459.00
    Construction in progress
      Engineering material
      Fixed asset disposal
    Production physical assets
          Gas & petrol
        Intangible assets             1,820,459.00                         1,860,764.00
          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      105,084,068.00                       116,954,185.00
         Total of assets            170,502,789.00                       172,002,557.00
       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               3,186,939.00                         3,239,571.00
       Advance payment                1,076,531.00                         2,778,488.00Selling of repurchased financial
             assetsFees and commissions receivable
    Employees‘ wage payable           1,109,352.00                          766,680.00
          Tax payable                 4,250,191.00                         1,622,074.00
        Interest payable
       Dividend payable               1,215,946.00                         1,215,946.00
    Other account payable           22,663,345.00                        32,227,317.00
    Reinsurance fee payable
                                                                深圳中冠纺织印染股份有限公司 2013 年度报告全文
    Insurance contract provision
    Entrusted trading of securities
    Entrusted selling of securitiesNon-current liability due in 1 year
      Other current liability                                1,547,263.00                         1,547,263.00
    Total of current liability                            35,049,567.00                         43,397,339.00
    Non-current liabilities:
         Long-term loan                                      1,101,349.00                         1,033,936.00
          Bond payable
        Long-term payable                                    8,230,694.00                         8,488,953.00
         Special payable
        Expected liabilities
    Differed income tax liability                              702,735.00                           766,660.00
    Other non-current liabilities                              836,792.00                           836,792.00
    Total of non-current liabilities                         10,871,570.00                         11,126,341.00
         Total of liability                                45,921,137.00                         54,523,680.00
          Owners‘ equity
           Share capital                                  169,142,356.00                        169,142,356.00
         Capital reserves                                  39,645,048.00                         39,790,784.00
      Less:Shares in stock
         Special reserves
         Surplus reserves                                  26,704,791.00                         26,704,791.00
    Common risk provision
       Undistributed profit                               -108,059,131.00                      -116,273,941.00
    Different of foreign currency
                                                            -1,112,992.00                          -511,599.00
           translationTotal of owner‘s equity belong to
                                                          126,320,072.00                        118,852,391.00
       the parent company
    Minority shareholders‘ equity                            -1,738,420.00                        -1,373,514.00
    Total of owners‘ equity                             124,581,652.00                        117,478,877.00
    Total of liabilities and owners‘
                                                          170,502,789.00                        172,002,557.00
               equityLegal representative :Hu YongfengnPerson-in-charge of the accounting work:Zhang Jinliang
                                                                   深圳中冠纺织印染股份有限公司 2013 年度报告全文Person-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                                               10,557,501.00                           17,293,509.00Trading financial assets
    Bill receivable                                              1,500,000.00                            1,500,000.00Account receivablePrepaymentsInterest receivableDividend receivable
    Other account receivable                                    80,967,376.00                           72,818,786.00
    Inventories                                                                                           101,536.00Non-current asset due in 1 yearOther current asset
    Total of current assets                                     93,024,877.00                           91,713,831.00Non-current assets:Disposable financial assetExpired investment in possessLong-term receivable
    Long     term         share   equity
                                                            36,788,953.00                           36,788,953.00investment
    Property investment                                          4,723,575.00                            5,060,748.00
    Fixed assets                                                 4,384,712.00                            9,145,661.00Construction in progressEngineering materialFixed asset disposalProduction physical assetsGas & petrol
    Intangible assets                                            1,820,459.00                            1,860,764.00R & D petrol
                                             深圳中冠纺织印染股份有限公司 2013 年度报告全文Goodwill
    Long-germ         expenses    to   beamortizedDiffered income tax assetOther non-current asset
    Total of non-current assets              47,717,699.00                        52,856,126.00
    Total of assets                         140,742,576.00                       144,569,957.00Current liabilitiesShort-term loansTrade off financial liabilitiesBill payable
    Account payable                             113,344.00                           113,344.00
    Advance payment                            302,540.00                          2,002,540.00
    Employees‘ wage payable                   677,181.00                           735,970.00
    Tax payable                                767,076.00                           573,074.00Interest payableDividend payable
    Other account payable                     1,158,902.00                          884,092.00Non-current liability due in 1 year
    Other current liability                   1,547,263.00                         1,547,263.00
    Total of current liability                4,566,306.00                         5,856,283.00Non-current liabilities:Long-term loanBond payableLong-term payableSpecial payableExpected liabilities
    Differed income tax liability             4,180,138.00                         4,180,138.00
    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                        9,583,236.00                        10,873,213.00Owners‘ equity
    Share capital                           169,142,356.00                       169,142,356.00
    Capital reserves                         31,606,598.00                        31,606,598.00
                                                                   深圳中冠纺织印染股份有限公司 2013 年度报告全文Less:Shares in stockSpecial reserves
    Surplus reserves                                            26,309,287.00                           26,309,287.00Provision of general risk
    Undistributed profit                                       -91,500,667.00                          -88,963,263.00Different of foreign currency
                                                            -4,398,234.00                           -4,398,234.00translation
    Total of owners‘ equity                                   131,159,340.00                          133,696,744.00Total of liabilities and owners‘
                                                           140,742,576.00                          144,569,957.00equityLegal 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                             26,998,990.00                           11,095,669.00
    Incl:Business income                                       26,998,990.00                           11,095,669.00Interest incomeInsurance fee earnedFee and commission received
    II. Total business cost                                     19,403,168.00                           13,388,125.00
    Incl:Business cost                                          9,461,003.00                            5,413,356.00Interest expenseFee and commission paidInsurance discharge paymentNet claim amount paidInsurance policy dividend paidInsurance policy dividend paidReinsurance expenses
                                                  深圳中冠纺织印染股份有限公司 2013 年度报告全文
    Business tax and surcharge                      597,749.00                           487,000.00
    Sales expense                                   300,128.00                           295,678.00
    Administrative expense                         8,073,279.00                         7,567,920.00
    Financial expenses                              247,455.00                          -444,174.00
    Asset impairment loss                           723,554.00                            68,345.00Add:Gains from change of fir
                                                                                      -25,480.00value (―-‖for loss)
    Investment gain(―-‖for loss)                849,782.00                          2,582,153.00
    Incl: investment       gains     from
                                                849,782.00                          2,576,108.00affiliatesGains from currency exchange(―-‖for loss)
    III. Operational profit(―-‖for loss         8,445,604.00                          264,217.00
    Add:Non-business income                       1,923,105.00                           29,498.00
    Less:Non business expenses                     134,222.00                           582,915.00Incl : Loss from disposal of
                                                 32,666.00non-current assets
    IV.Total profit(―-‖for loss)                10,234,487.00                         -289,200.00
    Less:Income tax expenses                      2,384,583.00                           -41,869.00
    V. Net profit(―-‖for net loss)             7,849,904.00                         -247,331.00Including: Net profit realized bythe entity taken over before thetakeoverNet profit attributable to the
                                               8,214,810.00                         -247,331.00owners of parent company
    Minority shareholders‘ equity                  -364,906.00
    VI. Earnings per share:                 --                                --
    (I)Basic earnings per share                       0.0486                              -0.0015
    (II)Diluted earnings per share                      0.0486                              -0.0015
    VII. Other comprehensive income                 -747,129.00                           52,626.00
    VIII. Total comprehensive income               7,102,775.00                         -194,705.00Total comprehensive income
    attributable to the owner of the               7,467,681.00                         -194,705.00parent companyTotal comprehensive income
                                                -364,906.00attributable minority shareholders
                                                                     深圳中冠纺织印染股份有限公司 2013 年度报告全文Legal representative :Hu YongfengnPerson-in-charge of the accounting work:Zhang JinliangPerson-in -charge of the accounting organ:Ren Changzheng4. 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                                3,067,093.00                              2,834,664.00
    Less:Business cost                                          1,619,224.00                              1,585,723.00
    Business tax and surcharge                                          205,239.00                                143,998.00
    Sales expense
    Administrative expense                                        5,680,368.00                              5,266,633.00
    Financial expenses                                              -80,168.00                          -2,253,351.00
    Asset impairment loss                                              -21,157.00                                 61,132.00Add:Gains from change of for
                                                                                                              -25,480.00value (―-‖for loss)
    Investment gain(―-‖for loss)                                                                                6,045.00
    Incl: investment gains fromaffiliates
    II. Operational profit(―-‖for loss)                       -4,336,413.00                             -1,988,906.00
    Add:Non-business income                                      1,907,472.00                                     5,174.00
    Less:Non- business expenses                                       108,463.00                                582,915.00Incl:Loss from disposal ofnon-current assets
    III.Total profit(―-‖for loss)                               -2,537,404.00                             -2,566,647.00
    Less:Income tax expenses
    IV. Net profit(―-‖for net loss)                           -2,537,404.00                             -2,566,647.00
    V. Earnings per share:                              --                                        --
    (I)Basic earnings per share                                           -0.015                                   -0.0152
    (II)Diluted earnings per share                                         0.015                                    -0.0152
    VI. Other comprehensive income                                                                                 -2,267.00
                                                                   深圳中冠纺织印染股份有限公司 2013 年度报告全文
    VII. Total comprehensive income                             -2,537,404.00                           -2,568,914.00Legal 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
                                                            11,387,046.00                            9,739,794.00or 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 financialasset disposalCash received as interest,processing fee and commissionNet increase of inter-bank fundreceived
    Net increase      of   repurchasingbusiness
                                          深圳中冠纺织印染股份有限公司 2013 年度报告全文Tax returnedOther cash received from business
                                       1,063,191.00                         3,758,324.00operation
    Sub-total of cash inflow              12,450,237.00                        13,498,118.00Cash paid for purchasing of
                                       1,500,000.00                         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
                                       3,429,791.00                         3,953,848.00staffs
    Taxes paid                             2,044,981.00                         2,149,524.00Other cash paid for business
                                       3,766,857.00                         6,318,360.00activitiesSub-total of cash outflow from
                                      10,741,629.00                        13,882,536.00business activitiesCash flow generated by business
                                       1,708,608.00                          -384,418.00operation, net
    II.Cash flow       generated    byinvestingCash received from investmentretrievingCash received as investment gainsNet cash retrieved from disposal
    of fixed assets, intangible assets,   20,749,535.00                           30,000.00and other long-term assetsNet cash received from disposal
    of    subsidiaries   or   otheroperational unitsNet cash received from disposal
    of    subsidiaries   or   otheroperational units
                                             深圳中冠纺织印染股份有限公司 2013 年度报告全文Sub-total of cash inflow due to
                                        20,749,535.00                            30,000.00investment activitiesCash paid for construction of
    fixed assets, intangible assets and         36,411.00                           690,127.00other 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
                                            36,411.00                           690,127.00investment activitiesNet cash flow generated by
                                        20,713,124.00                          -660,127.00investment
    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                     10,094,025.00                           126,343.00Cash paid as dividend, profit, or
                                            30,414.00interestsIncl: Dividend and profit paid bysubsidiaries to minor shareholdersOther cash paid for financingactivitiesSub-total of cash outflow due to
                                        10,124,439.00                           126,343.00financing activities
    Net cash flow generated by              -10,124,439.00                         -126,343.00
                                                                   深圳中冠纺织印染股份有限公司 2013 年度报告全文financingIV. Influence of exchange rate
    alternation on cash and cash                                -1,021,645.00                                  -1,166.00equivalentsV.Net increase of cash and cash
                                                            11,275,648.00                           -1,172,054.00equivalentsAdd: balance of cash and cash
    equivalents at the beginning of                             52,227,262.00                           53,399,316.00termVI.Balance of cash and cash
                                                            63,502,910.00                           52,227,262.00equivalents 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
                                                             3,067,093.00                            1,567,887.00or rending of servicesTax returnedOther cash received from business
                                                             2,375,794.00                            2,466,260.00operation
    Sub-total of cash inflow                                     5,442,887.00                            4,034,147.00Cash paid for purchasing of
                                                             1,500,000.00                            1,460,804.00merchandise and servicesCash paid to staffs or paid for
                                                             2,379,494.00                            2,557,382.00staffs
    Taxes paid                                                    953,849.00                              905,283.00Other cash paid for business
                                                            12,497,027.00                            3,330,336.00activities
                                           深圳中冠纺织印染股份有限公司 2013 年度报告全文Sub-total of cash outflow from
                                      17,330,370.00                          8,253,805.00business activitiesCash flow generated by business
                                      -11,887,483.00                        -4,219,658.00operation, net
    II.Cash flow       generated    byinvestingCash received from investmentretrievingCash received as investment gainsNet cash retrieved from disposal
    of fixed assets, intangible assets,    5,152,000.00and other long-term assetsNet cash received from disposal
    of    subsidiaries   or   other                                                30,000.00operational units
    Other cash receivable           forinvestment activitiesSub-total of cash inflow due to
                                       5,152,000.00                            30,000.00investment 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
                                       5,152,000.00                            30,000.00investment
    III.Cash flow      generated    byfinancingCash received from absorbinginvestmentCash received as loansCash received from bond placing
                                                                      深圳中冠纺织印染股份有限公司 2013 年度报告全文
    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                                            -525.00                                 4.00equivalentsV.Net increase of cash and cash
                                                                  -6,736,008.00                        -4,189,654.00equivalentsAdd: balance of cash and cash
    equivalents at the beginning of                                   17,293,509.00                        21,483,163.00termVI.Balance of cash and cash
                                                                  10,557,501.00                        17,293,509.00equivalents at the end of termLegal representative :Hu YongfengnPerson-in-charge of the accounting work:Zhang JinliangPerson-in -charge of the accounting organ:Ren Changzheng7. Consolidated Statement on Change in Owners‘ EquityPrepared by: Shenzhen Victor Onward Textile Industrial Co., Ltd.Amount in this period
                                                                                                         Unit:RMB
                                                                 Amount in this period
                                        Owner‘s equity Attributable to the Parent Company
                                                                                      Minor
           Items
                                                                                              Total of
                                                                                     sharehol
                              Share Capital Less: Special Surplu Comm Attribu                 owners‘
                                                                               Other ders‘
                              Capital reserve Shares ized   s    on risk table                 equity
                                                                                      equity
                                                                          深圳中冠纺织印染股份有限公司 2013 年度报告全文
                                                s         in reserve reserve provisi profit
                                                        stock           s      on
                                    169,142 39,790,7                  26,704,        -116,27 -511,59 -1,373,51 117,478,87I.Balance at the end of last year
                                    ,356.00    84.00                   791.00       3,941.00      9.00       4.00        7.00Add: Change of accounting
    policyCorrecting of previous errors
        Other
    II.Balance at the beginning of      169,142 39,790,7                  26,704,        -116,27 -511,59 -1,373,51 117,478,87
    current year                        ,356.00    84.00                   791.00       3,941.00      9.00       4.00        7.00
                                              -145,73                               8,214,81 -601,39 -364,906. 7,102,775.III.Changed in the current year
                                                 6.00                                   0.00      3.00         00          00
                                                                                    8,214,81             -364,906. 7,849,904.
    (I) Net profit
                                                                                        0.00                   00          00
                                              -145,73                                          -601,39              -747,129.0
    (II)Other misc.income
                                                 6.00                                             3.00                      0
                                              -145,73                               8,214,81 -601,39 -364,906. 7,102,775.Total of (I) and (II)
                                                 6.00                                   0.00      3.00         00          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 by
                                                                        深圳中冠纺织印染股份有限公司 2013 年度报告全文surplus reserves.4. Other(VI) Special reserves1. Provided this year2.Used this term(VII)Other
    IV. Balance at the end of this      169,142 39,645,0                26,704,          -108,05 -1,112,9 -1,738,42 124,581,65
    term                                ,356.00     48.00               791.00          9,131.00       92.00    0.00        2.00Amount 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 39,742,4                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:Retrospective adjustmentcaused by merger of entitiesunder common controlAdd: Change of accounting
       policyCorrecting of previous errors
         Other
    II.Balance at the beginning of      169,142 39,742,4                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
    \ III.Changed in the current                  48,311.0                               -247,33                       -194,705.0
                                                                                                 4,315.00
    year                                                0                                     1.00                             0
                                                                                     -247,33                       -247,331.0
    (I) Net profit
                                                                                          1.00                             0
                                              48,311.0
    (II)Other misc.income                                                                        4,315.00          52,626.00
                                                    0
                                              48,311.0                               -247,33                       -194,705.0
    Total of (I) and (II)                                                                            4,315.00
                                                    0                                     1.00                             0(III) Investment or decreasingof capital by owners
                                                                   深圳中冠纺织印染股份有限公司 2013 年度报告全文1. 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 39,790,7          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       7.00Legal representative :Hu YongfengnPerson-in-charge of the accounting work:Zhang JinliangPerson-in -charge of the accounting organ:Ren Changzheng8. 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
                                                                          深圳中冠纺织印染股份有限公司 2013 年度报告全文
                                                                      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        -93,361,49 133,696,74I.Balance at the end of last year
                                            6.00        .00                             .00              7.00        4.00
    Add:     Change     of   accounting
       policyCorrecting of previous errors
         Other
    II.Balance at the beginning of 169,142,35 31,606,598                             26,309,287        -93,361,49 133,696,74
    current year                                6.00        .00                             .00              7.00        4.00
                                                                                                   -2,537,404. -2,537,404.III.Changed in the current year
                                                                                                           00          00
                                                                                                   -2,537,404. -2,537,404.
    (I) Net profit
                                                                                                           00          00
    (II)Other misc.income
                                                                                                   -2,537,404. -2,537,404.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)
       4.Other(V) Internal transferring ofowners‘ equity1. Capitalizing of capitalreserves (or to capital shares)
                                                                         深圳中冠纺织印染股份有限公司 2013 年度报告全文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         -95,898,90 131,159,34
    term                                        6.00        .00                            .00              1.00         0.00Amount 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         -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 and
                                                                           深圳中冠纺织印染股份有限公司 2013 年度报告全文accounted 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             -93,361,49 133,696,74
    term                                    6.00         .00                                 .00                   7.00        4.00Legal representative :Hu YongfengnPerson-in-charge of the accounting work:Zhang JinliangPerson-in -charge of the accounting organ:Ren ChangzhengIII.Basic Information of the Company1. HistoryShenzhen Victor Onward Textile Industrial Co., Ltd. (hereinafter referred to as "the Company"), grew out of the Xingnan PrintingFactory Co., Ltd, founded in 1980, was the first wholly foreign-owned enterprise in Shenzhen. In April 1984, Xingnan PrintingFactory Co., Ltd was changed into foreign joint venture, and was renamed Shenzhen Victor Onward Textile Industrial Co., Ltd. . OnNovember 19, 1991, the Company was reorganized into a joint stock limited company and renamed Shenzhen Victor Onward TextileIndustrial Co., Ltd. pursuant to the approval of Shenzhen Municipal Government.2.The domestically listed RMB ordinary shares ("A shares, Stock code: 000018" ) and domestically listed foreign investment shares
                                                                              深圳中冠纺织印染股份有限公司 2013 年度报告全文("B shares ,stock code: 200018") issued by the Company were listed on Shenzhen Stock Exchange in 1992.By December 31, 2013, the total share capital was 169,142,356 million shares, of which circulating A-share 99,720,453 shares,circulating B-share 69,421,903. of which Union Holdings Co., Ltd. (hereinafter referred to Union Holdings ) holding limit-saleA-shares 43,141,032 shares, accounting for 25.51% of the total equity, is the controlling shareholder of the company, UnionDevelopment Group Co., Ltd. (hereinafter referred to Union Group)holding circulating A –share 5,681,089 shares, accounting for3.36% of the total equity, Union Group holds 31.32% of equity of Union Holdings and has the right to control Union Holdings, thusUnion Group is the actual controller of the Company.
      By December 31, 2013, Victor Onward printing and dyeing (Hong Kong) Co., Ltd. (hereinafter referred to as "Hong Kong
    Victor Onward"), Shengzhong Industrial Co., Ltd. (hereinafter referred to as "Shengzhong")     ,Shenzhen East Asia Victor onwardHolding (hereinafter referred to as ―East Asia Company), Shenzhen Nanhua Printing and Dyeing (hereinafter refered to as ―NanhuaCompany‖) as well as its wholly-funded subsidiary Nanhua Xingye Co., Ltd (hereinafter referred to as "Nanhua Xingye") are allsubsidiaries of the Company.Registered address: 26 Kuipeng Road, Kuiyong Town, Longgang District, ShenzhenLegal Representative: Hu Yongfeng2.Business nature
        The Company engages in textile printing & Dyeing industry .3.Business scope:
    The production and processing (printing and dyeing) and sales of various high-grade fabrics of pure cotton, pure linen,polyester-mixed cotton, linen cotton and mixed fiber and finished garments.IV.Principal accounting policies, accounting estimates and early errors1.Basis for the preparation of financial statementsThe preparation of financial statements of the company based on continuous operation. Base on actual transactions and eventsoccurring, according to the ministry of finance issued ―Accounting Standards for Enterprises - Basic Standards‖ on 15th February2006 and 38 items of specific accounting standards, application guidelines of accounting standards which was promulgated after,accounting standards interpretation and other requirements (hereafter named ―Enterprise Accounting Standard‖), General Provisionsof Financial Statements,NO.15 rules of the editing and reporting regarding information disclosure for companies publicly issuingsecurities by China Securities Regulatory Commission(2010 revised)has confirmed,the financial report was based on it.(2). Statement on the Accounting Standard Followed by the Company
      The financial statements prepared by the Company comply with the requirements of corporate accountingstandards. They truly and completely reflect the financial situations, operating results, equity changes and cashflow, and other relevant information of the company.(3)Fiscal YearThe Company adopts the Gregorian calendar year commencing on January 1 and ending on December 31 as thefiscal year.(4)Standard currency for bookkeepingThe Company takes RMB as the standard currency for bookkeeping.
                                                                               深圳中冠纺织印染股份有限公司 2013 年度报告全文Its overseas subsidiaries choose the currency of the primary economic environment in which the subsidiaryoperates as the functional currency. However, the financial statements should be translated into RMB.(5).The accounting solution of business combinations under the same and different control(1)Corporate merger under same control1. Realize all the terms and conditions of transactions in the process of enterprise acquisition step by step, and
    adopt the accounting method to conduct a package deal for the multiple transactions if the following items
    appear for the economic impact:
    2.   These deals are simultaneously entered into effect or under the consideration of mutual influence;
    3.   These transactions must be as a whole to achieve a complete business performance;
    4.   The occurrence of one deal is depended on that of other transactions;
    5.   Single transaction maybe is uneconomical, but it is economical when it is considered together with other
    transactions.6.Corporate merger under same control1) The Individual Financial StatementsIf the consideration of the merging enterprise is that the company makes payment in cash, transfers non-cashassets or bears its debts, and issues equity bonds, it shall, at the date of merger, regard the share of the book valueof the owner's equity of the merged party as the initial cost of the long-term equity investment. The differencebetween the initial cost of the long-term equity investment and the payment in cash, non-cash assets transferred aswell as the book value of the debts borne by the merging party shall offset against the capital reserve.All the direct costs paid by the company for the conduct of business combination, including audit fees, appraisalfees, legal services fee, etc., should be accounted into current profit and loss at the time incurred. If there is theconsolidated financial statements for the merged party, the initial cost of the long-term equity investment isdetermined based on the owner's equity of the merged party at the date of merger.2) The Consolidated Financial StatementsThe acquired assets and liabilities by the merged parties through business combination are measured at their bookvalue with the merged parties on the date of merger. If the accounting policies adopted by the merged parties areinconsistent with those of the company, the company can make adjustment in accordance with its accountingpolicies on the date of combination, and confirm them in accordance with the provisions of the AccountingStandards for Enterprises.(2). Corporate merger under different controlsWith the merger under the different control, the merger cost is the assets to pay, liabilities incurred or taken and the fair value of theissued equity securities which a buyer gains the control from the acquiree on the purchase date. In case of anyfuture events defined in merger contract whose predictable occurrence could influence the merger cost and therelated amount could be reliably calculated at merger date, such amount should also be included in merger cost.All the intermediary fees, such as audit fees, legal services fees, appraisal and consultation fees, and other relatedmanagement expenses paid by the company for the conduct of business combination should be accounted intocurrent profit and loss at the time incurred; the transaction charge of equity or debt bonds issued by the companyfor the consideration of the merging enterprise are accounted into initial recognized value of the equity or debtbonds.The company recognizes as goodwill for the difference of the combination costs more than the fair value of theidentifiable net assets obtained from the merged parties, and accounts into current profit and loss for the differenceof the combination costs less than the fair value of the identifiable net assets obtained from the merged partiesafter checked.If the enterprise achieves the business merger not under same control through multi-step implementation of
                                                                                 深圳中冠纺织印染股份有限公司 2013 年度报告全文transactions, it shall distinguish the individual financial statements and the incorporated financial statements toconduct the related process of accounting treatment:1. In the individual financial statements, the sum of the book value of equity investment of acquiree held before the date of purchaseand the new investment cost added at the date of acquisition shall be made as the initial investment cost of this investment project; Ifthe holding acquiree‘s equity before the date of purchase is involved with other composite income, the other related compositeincomes shall be transferred into the investment income of current period in the disposal of the investment project (such as, thechange of fair value of the salable financial asset shall be attributed to capital reserves, hereinafter the same).2. In the consolidation financial statements, the holding acquiree‘s equity prior to the date of purchase shall be measured again withthe fair value of equity at the date of acquisition, and the difference between the fair value and the book value is attributed to theinvestment income of current period; If the holding acquiree‘s equity prior to the date of purchase involved with other compositeincome, the other related composite incomes shall be transferred into the investment income of current period at the date of purchase.(6)The method of drawing up the Consolidation financial statements(1) The method of drawing up the Consolidation financial statementsThe company has real control to the subsidiary and special purpose entity which are included in the scope ofConsolidation financial statements.The accounting policies & accounting periods adopted by all the subsidiaries that have been included into thescope of the consolidated financial statements should be consistent with those adopted by the company. If theaccounting policies & accounting periods adopted by the subsidiaries are different from those adopted by thecompany, the company shall make necessary adjustments according to the accounting policies & accountingperiods it adopts when preparing the consolidated financial statements.After adjusting the long-term equity investments on its subsidiaries according to the equity method, the companyshall prepare the consolidated financial statements based on the financial statements of the company & itssubsidiaries, and other related documents.The influences of the internal transactions between the company & its subsidiaries, and its subsidiaries themselveson the consolidated balance sheet, consolidated profit statement, consolidated cash flow statement &consolidated statement of changes in owner‘s equity will be counteracted at the preparation of the consolidatedfinancial statements.When the amount of loss for the period attributable to the minority shareholders of a subsidiary exceeds theminority shareholders‘ portion of the opening balance of owners‘ equity of the subsidiary, the excess amountshould be still allocated against minority interest.In the report period, If the subsidiary is added through the business combination under the same control, thebeginning balance of the consolidated balance sheet shall be adjusted. The incomes, expenses & profits of thesubsidiary incurred from the beginning of the current period to the end of the reporting period shall be includedinto the consolidated profit statement. The cash flow from the beginning of the current period to the end of thereporting period shall be included into the consolidated cash flow statement.In the report period, If the subsidiary is added through the business combination not under the same control, thebeginning balance of the consolidated balance sheet shall not be adjusted. The incomes, expenses & profits of thesubsidiary incurred from the acquisition date to the end of the reporting period shall be included into theconsolidated profit statement. The cash flow from the acquisition date to the end of the reporting period shall beincluded into the consolidated cash flow statement.In the report period, If the company disposes its subsidiary, the incomes, expenses & profits incurred from thebeginning of the subsidiary to the disposal date shall be included into the consolidated profit statement. The cashflow from the beginning of the subsidiary to the disposal date shall be included into the consolidated cash flowstatement.If an enterprise loses control over a subsidiary company it originally services due to the disposal of some equityinvestment or for any other reasons, in consolidated financial statements, the remaining equity shall bere-measured as per the fair value at the date of the control lost. The difference between the sum of theconsideration received on the disposal of equities and the fair value of remaining equities, and the net assets share
                                                                             深圳中冠纺织印染股份有限公司 2013 年度报告全文continually calculated by the original subsidiary company since the merger date on the basis of the original stockproportion shall be accounted for as investment income for the period in which control was lost. Othercomprehensive income related to the equity investment that the subsidiary company originally owned shall beincluded in current investment income at the date of the control lost.(7) Recognition Standard of Cash & Cash Equivalents
    The company recognizes its cash in vault & the deposits that are ready for payment at any time as cash whenpreparing the cash flow statement.which are featured with short term (expire within 3 months since purchased),high liquidity, easy to convert to know cash, low in risk of value change, could be recognized as cash equivalents.(8)Foreign Currency Transaction(1)The foreign currency translation servicesThe foreign currency transaction uses the spot rate at the time of the transaction as the exchange rate to convertthe currency into CNY for keeping account.The balances of the foreign currency monetary items shall be converted according to the spot rate on the balancesheet date. Except that the exchange balances on the foreign currency borrowings for expenses on the assetseligible for capitalization shall be dealt according to the principle of loan expense capitalization, all the otherexchange balances shall be included into the profits & losses at the current period. The foreign currencynon-monetary items measured in historical costs shall still be converted according to the spot rate at the time ofthe transaction. Their account standard money amounts shall not be changed. The foreign currency non-monetaryitems measured in fair values shall be converted according to the spot rate on the recognition date of the fairvalues. The exchange balances incurred accordingly shall be recorded into the profits & losses at the currentperiod or the additional paid-in capital.(2)The foreign currency financial statementsThe assets in the balance sheet and liabilities items, by using the spot exchange rate on the balance sheet date, all equity projectsexcept the item of ―Undistributed Profits‖, other items were calculated by the spot exchange rate. With the income and expense items,it was determined by a systematic and rational approach, and calculated by the approximate exchange rate of the spot exchange rateto convert on the transaction date. The converting differences generated by the foreign currency financial statements, and all equityitems in the balance sheet are listed separately.On disposal of overseas operations, the corresponding difference of foreign currency translation related to theoverseas operations and listed in the owner‘s equity in Balance Sheet should be moved from owners‘ equity tocurrent profits and losses. On partial disposal of overseas operations, the partial proportion of difference shouldalso be converted into current profits and losses.Partial disposal of a foreign operation, is calculated portion of theforeign currency earnings disposal(9).(9) Financial InstrumentsFinancial instruments consist of financial assets, financial liabilities and equity instruments.(1)Classification of financial toolsThe Company divides the financial assets into four categories: financial assets measured at fair value and theirvariations are recognized as current gain/loss, including trade financial assets or financial liabilities andrecognized directly as financial assets measured at fair value and their variations are recognized as currentgain/loss; Investment hold till expiration; loans and account receivable; saleable financial assets .The companydivides the financial liabilities into two categories: financial liabilities measured at fair value and their variationsare recognized as current gain/loss; other financial liabilities.(2) Recognition and measurement of financial tools(1) Financial assets and liabilities measured at fair value and their variations are recognized as current gain/lossThe fair value (after deducting of announced but not distributed cash dividend or due but not obtained bondinterests) is recognized as initial amount when obtained.
                                                                    深圳中冠纺织印染股份有限公司 2013 年度报告全文Interests or cash dividends during the period of holding are recognized as investment gains. The fair value will beadjusted and accounted as current gain/loss.When disposed, the differences between fair value and initial amount are recognized as investment gains, and thusadjust the gain/loss of fair value.(2) Investment hold till expirationThe fair value (after deducting of due but not obtained bond interests) plus the related trade expenses isrecognized as initial amount when obtained.Interest gains will be calculated at amortizing of costs and actual interest rate (the face rate is adopted when thedifference between the actual rate and face rate is minor) during the period of holding, and accounted asinvestment gains. Actual rate is recognized when obtained, and is not changed in the predictable holding period orapplicable shorter period.When disposed, the difference between the obtained price and book value is accounted as investment gains.(3) Account receivableThe receivable debts of selling goods or providing services, and the credits of other company hold by thecompany not including the debt which has price in active market, including accounts receivable, notes receivable,prepaid accounts, other receivables, long-term receivables, etc. The contract or agreement price charging frompurchaser should be taken as the initial confirmation amount; if it has the nature of financing, it should beconfirmed according its current value.
       When retrieved or disposed of, the difference between the actual received amount and the book value isaccounted as current gain/loss.(4) Saleable financial assetsThe fair value (after deducting of announced but not distributed cash dividend or due but not obtained bondinterests) plus the related trade expenses is recognized as initial amount when obtained.Interest or cash dividend occurred during the period of holding is recognized as investment gains. Change of fairvalue is accounted as capital reserves (other capital reserves) at the end of term.When disposed, the difference between the obtained price and book value is accounted as investment gains.Meanwhile, the corresponding part of accumulated change of fair value accounted as owners‘ equity is transferredinto investment gain/loss.(5) Other financial liabilitiesOther financial liabilities are recognized initially at the sum of fair value and related trade expenses. Successivemeasurement will be on the basis of amortized costs.(3). Recognition and measurement basis of financial asset transpositionWhen financial asset transposition occurred, the recognition of this particular financial asset is terminated ifalmost all risks and rewards attached to the asset have been transferred to the acceptor. If retain all the risks andrewards of ownership of financial assets, the financial assets can be confirmed.When determine whether the transfer of financial assets meet the conditions of confirmation of the above financialassets, the principle of substance being more important than form should be adopted. The transfer of financialassets can be divided into overall transfer and part transfer of financial assets. If the transfer of financial assetsmeet the conditions of terminating confirmation, the following the difference of the two amounts will be includedin the current profit and loss:(1) Book value of the financial asset to be transposed;(2) The sum of price received due to the transposition, and the accumulation of change in fair value originallyaccounted as owners‘ equity (when the asset to be transposed is saleable financial asset).
      If part transfer of financial assets meet the conditions of terminating confirmation, the book value of thetransferred financial assts, the difference between the confirmed part and the unconfirmed part (in this case, theservice assets retained should be deemed as the part of unconfirmed financial assets), should be amortized inaccordance with their relative fair value, and the difference between the following two amount should be includedcurrent profit and loss:① Book value of the confirmed part;
    ②All fair values of financial assets and financial liabilities are recognized with reference to the price in theactive market.
    If the transfer of financial assets does not meet the conditions of terminating confirmation, the financial
                                                                        深圳中冠纺织印染股份有限公司 2013 年度报告全文assets should be confirmed again, the prices received will recognized as financial liabilities.(4).The conditions to stopping the financial liabilitiesThe obligation of financial liabilities are already cancelled which should be stopped confirming the financialliability or the part of it. Our company could stop confirming the currently financial liability and begin to confirmthe newly financial liability if the loaner made an agreement that they would assume the new way of financialliability which replace the current one, and make sure the newly financial liability is totally different from the oldone in contract with our company.Stop admitting the financial liability or a part of it, and at mean time we could admit the newly financial liabilitywhich is in new insertions of contract as the newly financial liability if the current financial liability has beenrevised.Stop admitting the balance of value of financial liability and consideration (Including the roll-out of non-cashassets or financial liabilities) which could be consider as current profits and losses.Stop and continue admitting a part of value, and distribute the value of financial liability, if our companyrepurchased the part of financial liability. And the balance of value of which distributed to the part of stoppingadmitting and paid (Including the roll-out of non-cash assets or financial liabilities) which could be consider ascurrent profits and losses.(5).Recognition basis of financial assets and financial liabilitiesThe company has adopted financial assets and financial liabilities measured with the fair value to activatefinancial assets or financial liabilities of the market, and determined its fair value based on the quotation in anactive market; if there no exists financial assets or financial liabilities to activate the market, the valuationtechniques (including the price made in the market transactions which is recently conducted by each party withwilling action and acquaintance of situation, the current fair value, discounted cash flow analysis and equityoption pricing models, etc. of other financial instruments which is substantially similar with the reference) shall beused to determine its fair value; for the initial or original financial assets or the liabilities assumed, its fair valueshall be determined on the basis of the transaction price of market.(6)Providing of impairment provision on financial assets (exclude receivable accounts)On the balance sheet date, the company performs inspection on the book value of financial assets apart from thosewhich are calculated at fair value and the changes of which are taken into the current profit and loss account.Depreciation provision is required for the circumstance where objective evidences indicate that depreciationoccurs to the financial assets.Objective evidences for depreciation include (but not limited to) the following:1. the issuer or the debtor suffers serious financial difficulty;2. the debtor has breached the contract, such as failure or delay thereof in repayment of interests or the principal;3. the debtee compromises to the debtor in consideration of the economic or legal aspect;4. the debtor is very likely to be in bankruptcy or other financial reorganization;5. the issuer suffers serious financial difficulty, which results in failure of financial assets to trade in the active
    market;6. observable data indicating that there is a measurable decrease in the estimated future cash flows from a group
    of financial assets since the initial recognition of those assets, although the decrease cannot yet be identified
    with the individual financial asset in the group, including: adverse changes in the payment status of borrowers
    in the group; an increase in the unemployment which appears in the debtor‘s country or region; a decrease in
    property prices for mortgages in the relevant area, or adverse changes in industry conditions that affect the
    borrowers in the group;
                                                                           深圳中冠纺织印染股份有限公司 2013 年度报告全文7. any significant change with an adverse effect that has taken place in the technological, market, economic or
    legal environment in which the issuer of equity instruments operates, and indicates that the cost of
    investments in equity instruments may not be recovered; or8. the fair value of the equity instrument investment suffers serious or non-temporary drop.The special depreciation method of financial assets is as follows:(1) Depreciation Provision of Financial Assets Available for Sale:The individual identification method is adopted to evaluate the depreciation losses for the financial assets availablefor sale. Of which, the objective evidence that indicates the depreciation of equity instrument investment availablefor sale includes the fair value of the equity instrument investment suffering serious or non-temporary drop, andthe specific quantitative criteria:The company shall conduct a separate check to all equity instrument investment available for sale at the balancesheet date, if fair value of the equity instrument investment at the balance sheet date is less than its initial investmentcost beyond 50% (including 50%) or over one year of duration (including one year), the depreciation occurs; if fairvalue of the equity instrument investment at the balance sheet date is less than its initial investment cost beyond 20%(including 20%) but not up to 50%, the company shall take into account of other relevant factors, such as pricefluctuation rate, etc., to judge if there is depreciation of the equity instrument investment.When the financial assets available for sale (namely, AFS financial assets) are impaired, the company shall reverseand charge the accumulated losses due to decreases in fair value previously recognized directly in capital to profit orloss for the current period, even if the financial assets are not derecognized. The reversed accumulated losses are theasset‘s initial acquisition costs after deducting amounts recovered and amortized, current fair value and impairmentlosses previously recognized in profit or loss.If, in a subsequent period, the carrying amount of AFS debt instruments investment increases and the increase canbe related objectively to an event occurring after the impairment was recognized, the previously recognizedimpairment losses are reversed. The reversal shall be recognized in profit or loss for the current period. The reversalof impairment losses of AFS equity instruments is recognized in capital reserve. But, impairment losses incurred byinvestments in an unquoted equity instrument (without a quoted price in an active market) whose fair value cannotbe reliably measured and derivatives that are linked to and must be settled by delivery of investments in equityinstruments are not reversed.(2) Depreciation Reserves of Held-to-Maturity InvestmentsIf there is objective evidence of depreciation for held-to-maturity investments, the difference between the carryingamount and the present value of estimated future cash flows is recognized as impairment loss. If there is evidencethat its value has recovered after accrued, the previously recognized impairment loss shall be reversed. Theamount of the reversal shall be recognized in profit or loss for the current period. The reversal shall not result in acarrying amount of the financial asset that exceeds what the amortized cost would have been had the impairmentnot been recognized at the date the impairment is reversed.All Recognition Standards of Depreciation of Financial Assets Available for Sale(7)If investment held to mature is recztegorized to sellable financial assets, please state the intention orevidence of change incapability .(10). Recognition standard and providing basis of bad debt provision on receivable accounts(1)Accounts receivable with material specific amount and specific provisioned bad debt preparation.Judgment criteria or amount standard of material specific amount or Account receivable with special account receivable
                                                                               深圳中冠纺织印染股份有限公司 2013 年度报告全文
    amount criteria                                                        exceeding RMB 1 million is viewed as material accounts
                                                                       receivable.
                                                                       Conduct the devalue test separately. Set up the bad
                                                                       debt reserve according to the shortfall of the present
                                                                       value of expected future cash flows against itsProvision method with material specific amount and
                                                                       carrying amount and record it into the profits &provision of specific bad debt preparation
                                                                       losses at the current period. Allot those assessed
                                                                       individually but no impairment for receivables into
                                                                       the bad debt reserves on a collective basis.(2)The accounts receivable of bad debt provisions made by Group
                                     Method for recognition of
                Name                 impairment allowances by                        Basis of determination of groups
                                               group
                                                                   The group is classified by the credit risk features basised on the
    Group of account age                The age analysis
                                                                    account age of receivables
                                                                   The Group is classified by the credit risk features based on the
    Group of Related party              Other
                                                                   relations of account receivables and transaction objects
                                                                   The Group is classified by the credit risk features basised on the
    Deposit group                       Other
                                                                   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 year)                                          3%                                                           3%
    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 (such as joint
    Related party Group                                    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., butDeposit group
                                                       without great individual amount and the bad debt reserves withdrawn by
                                                                          深圳中冠纺织印染股份有限公司 2013 年度报告全文
                                                   combination are difficult to reflect the accounts receivable of risk features.(3)Account receivable with non-material specific amount but specific bad debt preparation
                                           Accounts receivable with non-material specific amount and being not able to relentReason of specific bad debt preparation
                                           its risk character by provisioning bad debt preparation in accordance with portfolioprovision:
                                           Bad debt preparation will be provisioned in accordance with the difference ofProvision method of bad debt preparation
                                           present value of its future cash flow below its book value.
    (11)Inventory(1)Inventory classificationInventory refers to various assets that are held for sale, the work in process or consumptions during the process ofthe production for the company in the daily of business, mainly including raw materials, packaging material, lowvalue consumables, in-process products, inventory, etc.(2)Pricing method of stock delivered
    Stock delivered is measured according to weighted average method.The inventories are initially calculated and accounted in accordance with the actual cost, and the inventory costincludes the purchase cost, processing cost and the other cost.(3)Confirmation basis of stock net realizable value and withdrawal method of inventory falling price reserves.Recognition Basis of Inventories‘ Net Realizable Values and Counting & Drawing Method of Obsolete InventoryReserves:After taking stock at the end of the period,In the process of normal operation, the realizable value of goods inventories such as completed products,commodities and tradable materials etc. is recognized by its estimated selling pricing deducting estimated sellingexpenses and related taxes and expenses. The realizable net value of material inventories for processing isrecognized by the estimated selling price of the finished products deducting estimated cost and selling price andrelated taxes. The realizable net value of inventories held for execution of sales contracts or labor contracts iscalculated on the basis of contract price. In case inventories exceed contracted amount, the exceeded part is basedon the general selling price.At end of period, depreciation reserve is made for every individual inventory item. For inventories in large varietywith low unit price, depreciation reserve is made by categories. For inventories related to products series producedand sold within the same region, having the same or similar end-use purpose, and hard to be differentiated fromother items, combined depreciation reserve is made.When factors that caused deduction of prior inventory value disappear, the deducted amount shall be resumed, andoriginally accrued depreciation provision shall be returned. The amount returned is booked into current incomestatement.(4)Inventory systemInventory system adopts the perpetual inventory method.
                                                                      深圳中冠纺织印染股份有限公司 2013 年度报告全文(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:Wrap page: Wrap page adopts one time amortization when used.(12)Long-term equity investment(1)Investment cost confirmation(1) For the long term equity investment from enterprise merger, the detailed accounting policy, please refer to the
    accounting method of merger of enterprises under or not under the same controller in Note II / (V). While, the
    long term equity investment acquired through liability reorganization is booked on the basis of fair value.(2)
    Long-term equity investment obtained by other ways.Long-term equity investment obtained by cash payment
    is recognized for initial investment cost according to the price practically paid.Long-term equity investmentobtained by placing of equity stocks is recognized for initial investment cost at the fair value of thestock.Long-term equity investment input by investors is recognized for initial investment cost according to theinvestment contract or agreement (less the cash dividend or profit announced but not distributed). However whenthe value in the contract or agreement is not fair value is not adopted. The non-monetary asset exchange for acommercial real income and assets or the fair value other assets can be reliably measured, the initial investmentcost should be determined according to long-term equity investment exchanged through the non-monetary assetexchange, unless there is evidence showing that for the fair value of assets is more reliable; the non-monetaryasset exchange which does not meet the above premises, the book value of the exchanged assets to and therelevant fees and taxes to be paid should be the initial investment cost of the long-term equity investment. Theinitial investment cost of the long-term equity investments obtained through debt restructuring should bedetermined in accordance with fair value.(2)Follow-up Measurements & Recognitions of Profits or LossesCost basis is adopted in accounting of long-term equity investment without joint control or major influence, andwith no quotation in an active market, thus the fair value is not able to be reliably measured. Equity basis will beadopted for the long-term equity investment with joint control or major influence.The long-term equity investmentthat has joint control or significant influences over the invested entity shall be measured by employing the equitymethod. If the initial cost is more than the investing enterprise' attributable share of the fair value of the investedentity's identifiable net assets for the investment, the initial cost of the long-term equity investment may not beadjusted. If the initial cost is less than the investing enterprise' attributable share of the fair value of the investedentity's identifiable net assets for the investment, the difference shall be recorded into the profits & losses at thecurrent period.The treatment for the other changes of owner‘s equity besides net loss and profit of the unit beinginvested: for the other changes of owners‘ equity besides net profit and loss of the unit being invested, whenshareholding ratio remains unchanged, the part shared or undertaken according to share ratio, the book value oflong-term equity investment should be adjusted, and at the same time, the capital surplus (other capital surplus).(2)Recognition of Profits or Losses.Employing the cost method, besides acquiring the actual payment forinvesting or the dividends / profits which have already been declared but not distributed yet, the company shallrecognize its current investment income by enjoying the dividends / profits declared to be distributed by theinvested entity.The investment income Recognition by cost method is only limited to distribution of accumulated net profit after
                                                                   深圳中冠纺织印染股份有限公司 2013 年度报告全文the unit being invested receives investment, the part of profit and cash dividends more than the amount will beregarded as initial investment cost recovery. The loss which should be confirmed to the unit being invested underequity method should be treated in accordance with the following orders: First of all, deduct the book value oflong-term equity investment. Second, if the book value of long-term equity investment can not be deducted, thelong-term equity value of the net value of the unit being invested should be further confirmed as investment lossand used to deduct the book value of long-term receivables. Finally, after the above treatment, the additionalliabilities to be undertaken according to investment contract or agreement should be confirmed as expectedliability according to the expected liability and be concluded in the current investment loss. If the unit beinginvested achieves profit in the following period, after deducting the unconfirmed liabilities, it should be treatedaccording to the adverse order as described above, the book value of the confirmed expected liabilities should bededucted, the book value of the long-term equity investment and long-term equity of net assets of the unit beinginvested should also be resumed, and at the same time, the investment income should be confirmed.(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.On the balance sheet date, if the long-term equity investment shows impairment due to the decreasing marketprice or the deteriorating business operation of the invested entity, the recoverable amount of the long-term equityinvestment should be determined on the basis of the net amount from the fair value of the individual long-termequity investment less the disposal expenses, or the present worth of the estimated future cash flow of thelong-term equity investment, whichever is higher. When the recoverable amount of the long-term equityinvestment is less than the book value, the book value of assets should be written down to the recoverable amount,and the amount written down is recognized as the asset impairment loss, which should be included in the currentprofits and losses; meanwhile, the corresponding asset impairment provision should be counted and drawn. As toa long-term equity investment with no significant influence, if there is no offer in the active market for it and itsfair value cannot be reliably measured, its impairment loss shall be recognized according to the differencebetween its carrying amount & the current value recognized by discounting the future cash flow according to thecurrent market return similar to the financial asset. Besides the business reputation formed by the businesscombination, where the measurement results of the removable amounts show that the receivable amount of anyother long-term equity investment is lower than its carrying value, the difference shall be recognized as theimpairment loss.No matter whether there is any sign of possible assets impairment, the business reputation formedby the business combination shall be subject to impairment test every year.Once any loss of the long-term equityinvestment impairment is recognized, it shall not be switched back any more.(13). Investment real estate
                                                                    深圳中冠纺织印染股份有限公司 2013 年度报告全文
    The term ―Investment real estates‖ refers to the real estates held for generating rentand/orcapital appreciation,
    including the right to use any land which has already been rented, the right to use any land which is held and
    prepared for transfer after appreciation & the right to use any building which has already been rented.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 Annual depreciation rate
                                           life(Year)       value rate                          (%)
    Real estate in                            20-50                    0%                    2%-5%Hongkong
    Real estate in                            20-30                   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.The company shall estimate the recoverable amount for any impairment, and then determine the correspondingimpairment loss if the recoverable amount less than its book value.Once the impairment loss of the real estate investment is recognized, it will not be reversed in the future.When the investment real estate is disposed of, or permanently terminates its use and no economic benefits areexpected from its disposal, terminate the confirmation of the investment real estate. Disposal income ofinvestment property for sale, transfer, disposal of scrap or being destroyed is charged to current profit or loss afterdeducting its book value and related taxes.
    (14) Fixed assets(1)Confirmation conditions of fixed assetsFixed assets refer to physical assets owned for purpose of production, service providing, leasing or management,and operation with service life of more than one year. Fixed assets are recognized when all of the followingconditions are satisfied:Financial benefits attached to the fixed asset is possibly inflowing to the Company;(2)The cost of the fixed asset can be reliable measured.(2)Cognizance evidence and pricing method of financial leasing fixed assets
                                                                        深圳中冠纺织印染股份有限公司 2013 年度报告全文The fixed assets acquired by the company in line with the following one or several criteria shall be recognized asthe fixed assets acquired under finance leases: (1) at the expiration of the lease, the ownership of the leased assetsshall be transferred to the company. (2) the company has the option to purchase the leased assets, the purchaseprice is expected be far lower than the fair value of the leased assets under the implementation of option right, sothat it can be reasonably determined that the company shall exercise the option on the acquisition date. (3) thelease term is the majority for the leased assets even if the ownership no transferred. (4) the present value of theminimum lease payments of the company almost is equal to the fair value of the leased assets on the acquisitiondate. (5) For the special nature of the leased assets, only the company can use if no major modification made. Forthe fixed assets acquired under finance leases, the company takes less of the fair value of the leased asset on theacquisition date and the present value of the minimum lease payments as recorded value. Also, the minimum leasepayments are accounted as the recorded value for the long-term payables, and the difference are as theunconfirmed financing fees. The initial direct expenses, such as commission charge, attorney fees, travel expensesand stamp duty attributable to the lease item occurred in the process of the lease negotiation and the signature oflease contract, shall be recorded into the leased assets value. The unrecognized financing charges in each periodduring the lease term are amortized by effective interest method. The company shall adopt the depreciation policyin line with its own fixed assets to count and draw the depreciation of fixed assets acquired under finance leases.If the ownership of lease assets acquired at the expiration of lease can be reasonably confirmed, the depreciationwill be recognized in the use life of lease assets. If can‘t be confirmed, the shorter period between the lease termand the use life of lease assets will be recognized as the depreciation.(3)Fixed assets depreciation methodExcept for the fixed assets that continually used after the depreciation counted and drawn fully, the depreciation offixed assets is made by average year method. Rate is based on category, expected years of use and expected netresidual ratio.For the fixed assets acquired under finance leases, if the ownership of lease assets acquired at the expiration oflease will be reasonably confirmed, the depreciation will be recognized in the remaining use life of lease assets. Ifcan‘t be confirmed, the shorter period between the lease term and the remaining use life of lease assets will berecognized as the depreciation.
      For the fixed assets formed by using the special reserve expenditure, the special reserve is offset against thecost of fixed assets and the same amount of accumulated depreciation is recognized. Also, the depreciation for thefixed assets are no longer counted and drawn in the future period.The company shall confirm the useful life and estimated residual value rate for the fixed assets according to thenature and the use status of the fixed assets. At the end of the year, the service life, estimated residual value anddepreciation method for the fixed assets are reviewed, and the adjustment will be accordingly if there is differencewith the previous estimated count.
       Classified depreciation years and depreciation rates are as follows:
    Type                                     Evpected useful    Estinated residual value rate     Annual depreciation rate(%)
                                             life(Year)
    House and building              20-50                       0%-10%                          2%-5%
    Machinery and equipment         5-14                                                 10% 6%-18%
                                                                    深圳中冠纺织印染股份有限公司 2013 年度报告全文
    Electric Equipment             5                                                10% 18%
    Transportation equipment       4-5                                              10% 18%-22.5%(4). Test Method for Fixed Asset Impairment and Counting & Drawing Method for Fixed Asset ImpairmentReservesThe company shall, at the end of each period, make a judgment on whether there is any sign of possible fixedassets impairment.Where any evidence shows that there is possible fixed assets impairment, the recoverable amount of the fixedassets shall be estimated. The recoverable amount shall be determined in light of the higher one of the net amountof the fair value of the fixed assets minus the disposal expenses & the current value of the expected future cashflow of the fixed assets.Where a fixed asset's recoverable amount is lower than its carrying value, the carrying value of the fixed assetshall be recorded down to the recoverable amount, and the reduced amount shall be recognized as the loss of thefixed asset impairment and be recorded into the profits & losses at the current period. Simultaneously, the fixedasset impairment reserve shall be made accordingly.After the loss of the fixed asset impairment has been recognized, the depreciation expense of the impaired fixedasset shall be adjusted accordingly in the future period so as to amortize the post-adjustment carrying value of thefixed asset systematically (deducting the expected net salvage value) within the residual service life of the fixedasset.When there are signs showing that a fixed asset will devaluate, the enterprise estimates its collectable amountbased on the individual fixed asset. If it is difficult to make estimation of the collectable amount for the individualfixed asset, the enterprise will recognize its collectable amount on the basis of the asset group that the fixed assetbelongs to.
    (15). Projects under construction(1)Categories of projects under constructionThe company shall measure the self-constructed constructions in progress at the actual cost, which comprisesthose expenditures necessarily incurred for bringing the asset to working condition for its intended use, includingmaterials costs, labor costs, relevant taxes paid, capitalized loans, indirect expense for apportion, etc.. Theconstructions in progress of the company should be accounted by the project classification.(2)Standard and timing for transferring of projects under construction to fixed assetsAll the expenditures that bring the construction in process to the expected condition for use shall be the creditvalue of the fixed asset. If the fixed asset construction in process has already reached the expected condition foruse, but hasn‘t been made the final account; it shall be carried forward to a fixed asset according to its estimatedvalue based on the budget, cost or actual cost of the construction starting from the date when it reaches theexpected condition for use, and the fixed asset shall be depreciated according to the company‘s depreciationpolicy for fixed assets. After the final account has been made, the original provisional estimated value shall beadjusted according to the actual cost, but the depreciation which has originally been counted & drawn shall not beadjusted.(3) Test Method for Construction-in-Process Impairment and Counting & Drawing MethodThe company shall, at the end of each period, make a judgment on whether there is any sign of possible
                                                                     深圳中冠纺织印染股份有限公司 2013 年度报告全文constructions-in-process impairment.Where any evidence shows that there is possible constructions-in-process impairment, the recoverable amount ofthe constructions-in-process shall be estimated. The recoverable amount shall be determined in light of the higherone of the net amount of the fair value of the constructions-in-process minus the disposal expenses & the currentvalue of the expected future cash flow of the constructions-in-process.Where a construction-in-process's recoverable amount is lower than its carrying value, the carrying value of theconstruction-in-process shall be recorded down to the recoverable amount, and the reduced amount shall berecognized as the loss of the construction-in-process impairment and be recorded into the profits & losses at thecurrent period. Simultaneously, the construction-in-process impairment reserve shall be made accordingly.Once any loss of the construction-in-process impairment is recognized, it shall not be switched back in the futureaccounting periods.When there are signs showing that constructions in progress will devaluate, the enterprise estimates its collectableamount based on the individual construction in progress. If it is difficult to make estimation of the collectableamount for the individual construction in progress, the enterprise will recognize its collectable amount on thebasis of the asset group that the construction in progress belongs to.
    (16)Loan expenses
    1. Recognition principles for capitalizing of loan expenses
    Borrowing expenses occurred to the Company that can be accounted as purchasing or production of assetsatisfying the conditions of capitalizing, are capitalized and accounted as cost of related asset. Other borrowingexpenses are recognized as expenses according to the occurred amount, and accounted into gain/loss of currentterm.
    The assets meeting capital conditions refer to the fixed assets, investment real estates and inventories whichare constructed or produced in a long time to reach the predicted use or sale state.
    When a loan expense satisfies all of the following conditions, it is capitalized:1. Expenditures on assets have taken place, asset expenditures include the assets used to construct or produce theassets which meet the capitalization conditions, and expend by cash or transferring non-cash assets or bearinginterest debt;2. Loan costs have taken place;3. The construction or production activities to make assets to reach the intended use or sale of state have begun.2. Duration of capitalization of Loan costsThe capitalization period refers to the period from starting capitalization of loan costs to the stop of capitalization,the period of the break of capitalization of Loan costs is not included.When the construction or production meets the intended use or sale of state of capitalization conditions, the Loancosts should stop capitalization.When the construction or production meets the conditions of capitalization and can be used individually, thecapitalization of the loan costs of the assets should be stopped.Where each part of a asset under acquisition and construction or production is completed separately and is readyfor use or sale during the continuing construction of other parts, but it can not be used or sold until the asset is
                                                                      深圳中冠纺织印染股份有限公司 2013 年度报告全文entirely completed, the capitalization of the borrowing costs shall be ceased when the asset is completed entirely..3 Capitalization Suspension PeriodWhere the acquisition and construction or production of a qualified asset is interrupted abnormally and theinterruption period lasts for more than 3 months, the capitalization of the borrowing costs shall be suspended. Ifthe interruption is a necessary step for making the qualified asset under acquisition and construction or productionready for the intended use or sale, the capitalization of the borrowing costs shall continue. The borrowing costsincurred during such period shall be recorded into the profits & losses at the current period, till the acquisition andconstruction or production of the asset restarts.
    4. Calculation of the amount of capitalization of Loan costsInterest expense due to specialized Loan and its auxiliary expenses shall be capitalized before the asset whichsatisfies the capitalizing conditions reaches its useable or saleable status.
    Interest amount of common Loan to be capitalized equals to accumulated asset expense less weightedaverage of specialized loan part of asset expense multiplies capitalizing rate of common Loan occupied.Capitalizing rate is determined according to weighted average interest of common Loan.
    If the Loan has discount or premium, the discount or premium amount should be determined according toactual interests in each accounting period. The interest amount should be adjusted in each period.(17).Intangible assets
    1. The valuation methods of intangible assets
    (1)The initial measurement is conducted according to the actual cost when the                   intangible assetsare acquired
    The cost of the purchased intangible assets includes its buying price, relevant tax and the othe expenses thatare directly attributed to this assets meeting its predetermined objective and other expenses that occur. The buyingprice of intangible assets is over the deferred payment under normal credit conditions, which has the nature offinancing materially, the cost of intangible assets is determined on the basis of the present value of its buyingprice.
    We acquire the mortgaged intangible assets from debtors through debt restructuring and determine the entryvalue on the basis of the fair value of the intangible assets,we have the balance between the book value of debtrestructuring and the fair value of intangible assets used for mortgage charged to the current profit and loss.
    The entry value of the non-monetary assets exchanged into by the non-monetary assets are determined on thebasis of the fair value of the assets exchanged out if the exchange of non-monetary assets has commercial natureand the assets exchanged into or out can be reliably measured, unless there is authentic evidence indicating thatthe fair value of assets exchanged into are more reliable; if the non-monetary assets that cannot meet the aboveprerequisite use the book value of the assets exchanged out and relevant taxes payable as the cost of thenon-monetary assets, the profit and loss is not confirmed.
    The entry value of the intangible assets acquired by the absorption merger under the control of one companyis determined by the book value of the merged party;the entry value of the intangible assets acquired by theabsorption merger that is not under the control of one company is determined by the fair value.
    The cost of the intangible assets developed internally includes the materials consumed in developing theassets, cost of service, registration fees, other patent used in developing, amortization of concession and interestcharges meeting the capitalization conditions and othe direct costs that occur before the intangible assets
                                                                           深圳中冠纺织印染股份有限公司 2013 年度报告全文meeting the predetermined objective.
      (2)Subsequent measurement
      The Company analyses and makes judgment of its serviceable life when acquiring the intangible assets.
    The intangible assets that have limited serviceable life are amortized by the straight-line method during theperiod when the assets can bring about economic interests;The intangible assets are deemed as uncertainserviceable life and are not amortized if it is impossible to expect the period when the assets could bring abouteconomic interests.(3)Estimation of service life of intangible assets with limited service lifeThe land use right shall be amortized on average according to the year limit of transfer from the date oftransferring; proprietary technology, non-proprietary technology and other intangible assets shall be amortized onaverage by installment in accordance with the shortest one among the three including estimated durable years,beneficial years specified in contract and valid years stipulated by law. The amortization amount is accounted foras the related asset costs and current profit and loss according to the beneficiaries.At the end of each period, the review is made for service life and amortization method of the intangible assets which have limitedservice life.After review, there is no difference for the service life and amortization method of intangible assets at the end ofthis period.
                Item                Amortisation periods                                    Basis(3)The judgment basis of the intangible assets with indefinite lifeAt the end of each period, the review is made for service life of the intangible assets which have unrecognizedservice life.After review, if there is evidence indicating the service life of intangible assets is finite, its service life should beestimated.(4)Provision for impairment of investment assets
    The intangible assets that have certain serviceable life are conducted at the ending with the test ofdepreciation of value if the assets indicate obviously that those are depreciating
    For conducting a test of depreciation of value of the intangible assets, it needs to estimate the recoverableamount of the assets. The recoverable amount is determined by the higher between the net amount obtainedthrough the fair value of intangible assets minus settlement changes and the present value of the future cash flowexpected by the intangible assets.
    When the recoverable amount of intangible assets is below their book value, the book value of intangibleassets is written down to the recoverable amount and the amount written down is confirmed as the loss ofdepreciation of value of intangible assets and is charged to the current profit and loss, while the correspondingprovision for the depreciation of value of intangible assets is made.
    The depletion of the depreciation of value of intangible assets or the amortization charge in the future periodwill be adjusted accordingly after confirmation of the loss of the depreciation of value of intangible assets so thatit can systematically allocate the book value of intangible assets adjusted in the residual serviceable life of
                                                                                深圳中冠纺织印染股份有限公司 2013 年度报告全文intangible assets(deduction of anticipated net value).
    Upon confirmation of the loss of the depreciation of value of intangible assets, the loss will not be reversed inthe subsequent accounting period any longer.When there are signs showing one intangible asset will devaluate, the enterprise estimates its collectable amountbased on the individual intangible asset. If it is difficult to make estimation of the collectable amount for theindividual intangible asset, the enterprise will recognize its collectable amount on the basis of the asset group thatthe intangible asset belongs to.(18)Long-term amortizable expensesLong-term deferred charge will be averagely amortized in the benefited period.(19).Predicted liabilities(1)Recognition of Predicted liabilitiesThe liabilities related to contingencies and meeting the following conditions are reflected asestimated liabilities:The liabilities that are present liabilities assumed by the company;The fulfillment of the liabilities may cause outflow of economic interests from the company;The amount of the liabilities can be reliably measured.(2)Accounting of Predicted liabilities
    Predicted liabilities shall be conducted initial measurement according to the best estimates of related existing liabilities,When the company recognizes the optimum estimation, it shall be in overall consideration of risks, uncertaintyand time value of currency and other factors related to contingent matters. When the influence of time value ofmoney is significant, the optimum estimates shall be determined by discounting relevant future cash outflowThe optimum estimates are conducted as follows:If there is a continuous range (or area) for the necessary expenses and the same result possibility within the range,the optimum estimate is recognized according to the middle value, namely the average of upper limit and lowerlimit of amount within the range.If there no exits a continuous range (or area) for the necessary expenses or the different result possibility withinthe range even if there is a continuous range, and if there are contingent matters related to individual item, theoptimum estimate is recognized according to the amount that has most possibility to occur. If there are contingentmatters involving multiple items, the optimum estimate is counted and confirmed as per all the possible resultsand associated probabilities.(20)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 will
                                                                      深圳中冠纺织印染股份有限公司 2013 年度报告全文possibly 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.(2)Incomes from transferring asset use rightThe economic benefits related to the transactions are likely to flow into the enterprise, if the revenue amount canbe reliably measured, the revenue amount of transferring assets use right can be recognized as following:(1) the interest income amount will be measured according to time and actual interest rates of the currency funds
    used by others.(2) the income amount of usage charges will be measured according to the charge time and method determined in
    the relevant contract or agreement.(21)Governmental subsidy(1)CategoriesGovernment Grant refers to monetary or non-monetary assets acquired without consideration from government,except for the capital invested in by the government as business owner. According to relevant grant objectsprescribed in the government documents, the government grants are classified as the government grants related toassets and the income-related government grants. The government grants related to assets refer to the grants oflong-term assets acquired by the company, used for purchase and construction or formed by other methods, andthe income-related government grants refer to all the government grants except for those pertinent to assets.(2) Accounting Policy1. Recognition of Government GrantIf the government grant is the monetary asset, it shall be measured in the light of the received or receivableamount. If the government grant is the no-monetary asset, it shall be measured at its fair value. If its fair valuecannot be obtained in a reliable way, it shall be measured at its nominal amount (RMB 1). The government grantsmeasured at their nominal amounts shall e directly included in the current profits and losses.2. Accounting MethodThe government grants pertinent to assets shall be recognized as deferred income, and it will be accounted to as thenon-operating income amortized by installment according to the service life of assets constructed or purchased.If it is necessary to refund any government grant which has been recognized, and there is the deferred incomeconcerned, the book balance of the deferred income shall be offset against, but the excessive part shall be includedin the current profits and losses. If there is no deferred income concerned to the government grant, it shall be directlyincluded in the current profits and losses.
    (22). Deferred income tax assets/Deferred income tax liability1. References for confirmation of deferred income tax assetsThe company is likely to determine the deferred income tax assets produced from deductible temporarydifferences with the limit of offsetting the taxable income of temporary difference.2.The confirmation basis of deferred income tax liabilitiesThe Company confirms the temporary differences of the taxable that is not paid in the current and prior periods as
                                                                   深圳中冠纺织印染股份有限公司 2013 年度报告全文the deferred income tax liabilities. However, the goodwill, the transactions formed from non-business merger andthose will affect either accounting profit or the temporary differences of the taxable income when the transactionsoccur are not included in the deferred income tax liabilities.(23)Operational leasing and Financing leasing(1)Accounting of operational leasing(1) The leasing fees paid for the leased assets by the company shall be recorded as the current expense according to
    the straight-line method in the whole lease term not excluding the rent free period. The initially direct expense
    related to the lease transactions paid by the company shall be recognized as the current expense.When the assets lessor has assumed the lease-related expenses which should be borne by the company, the companyshall deduct these expenses from the total amount of rent, amortize in the lease term according to the rents afterdeducted and record as the current expenses.(2) The leasing fees received for the leased assets by the company shall be recognized as the lease income
    according to the straight-line method in the whole lease term not excluding the rent free period. The initially
    direct expense related to the lease transactions paid by the company shall be recognized as the current expense.
    For a large of amount, it will be capitalized and recorded as the current revenue based on the same confirmation
    of lease income during the whole lease period.When the company has assumed the lease-related expenses which should be borne by the lessee, the company shalldeduct these expenses from the total amount of rent and amortize in the lease term according to the rents afterdeducted.(2) Accounting Method for Financing Leases(1) The assets acquired under financing leases: the lower value between the fair value of leased assets and the
    present value of the minimum lease payments is recognized as the recorded value, the minimum lease
    payments are recognized as the recorded value of long-term payables, and the difference is recognized as
    unrecognized finance expense at the inception of the lease.The company shall adopt the effective interest method to amortize and record as the financial costs during theassets lease term.(24)Change of main accounting policies and estimationsIs there any material change of accounting policies occurred in the year□ Yes √ NoN/A(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 2013 年度报告全文(2)Change of accounting estimationsIs there any change in accounting estimations in the report period□ Yes √ No.(25)Correction of accounting errors in previous periodIs there any accounting error with previous period found in the report period□ Yes √ No(1)Change of accounting policiesIs there any change in accounting policies in the report period□ Yes √ No(2)Change of accounting estimationsIs there any change in accounting estimations in the report period□ Yes √ No.V.Taxation1.Main categories and rates of taxes
                     Taxes                           Tax references                    Applicable tax rates
    Business tax                               Business income                      5%Urban Construction Tax and Educational
                                       Turnover tax                             7%Surtax
          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.
    1.Enterprise income taxThe interest rate of corporate income tax of the company and subsidiaries in China mainland is 25%, the interestrate of the income from Hong Kong of the subsidiaries in Hong Kong is 16.5%.
    2. VAT。The output tax ratio of domestic sales revenue and processing income of printing and dyeing products for thecompany and its subsidiaries established in Mainland China is 17%, and the export sales is subject to the―exemption, compensation and refund‖ methods. The company‘s input tax for purchasing raw materials offsetsthe output tax with ratio of 17%. Of which, the input tax paid for export products can be applied for refunds. Thecompany‘s VAT payable is the balance after offset between current period‘s input and output taxes.
                                                                                       深圳中冠纺织印染股份有限公司 2013 年度报告全文The subsidiaries of the company in Hong Kong do not need to pay the VAT.
    3. Business taxBusiness tax applied to revenues of the company and South China Dyeing and Printing Co., Ltd. from the housingrental, rate being 5%. It‘s unnecessary for the subsidiary in Hong Kong to pay the business tax.(IV) Urban Construction Tax and Educational SurtaxThe company‘s urban construction tax and education surtax are based on payable VAT and business tax, tax ratebeing 7% and 3%. Since January 1, 2011, 2% of VAT and business tax actually paid by taxpayer are as the localeducation surtax. It‘s unnecessary for the subsidiary in Hong Kong to pay the urban construction tax and theeducation surtax.(V) Property TaxThe tax of property with own use for the company and its subsidiaries established in Mainland China is based on70% of original value of the property, tax rate being 1.2%, and the tax of leased property is based on the rentalincome, tax rate being 12%. It‘s unnecessary for the subsidiary in Hong Kong to pay the property tax.
    VI. Enterprise consolidation and combined financial statements
        1. Subsidiary(1)Subsidiary obtained through establishment or investment
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                                                                             深圳中冠纺织印染股份有限公司 2013 年度报告全文
                                                                                                                     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
    Victor    Compan              Trade            and dyed                       100%    100% Yes        0.00    0.00       0.00
                    Kong               (HKD
    Onward y                                       woven
                                       )      fabrics,Co.Ltd
                                               investme
                                               nt     and
                                               holding
                                               business
                                                 Sales        of
    Shenzho                                1,000,0 Corduroy
          Limited
    ng                  Hong               00        ,       dyed
          Compan              Trade                                           100%    100% Yes        0.00    0.00       0.00
    Compan              Kong               (HKD cloth and
          y
    y                                      )        printed
                                                 cloth
                                                 Productio
                                                      n and
                                       85,494,
    Nanhua Limited                                       sales of
                    Shenzhe Product 700
    Compan Compan                                        printed                 69.44% 69.44% Yes        0.00    0.00       0.00
                    n           ion    (HKD
    y         y                                      cloth and
                                       )
                                                      dyed
                                                      cloth
                                                 Sales of
    Xinye     Limited                      10,000 printed
                    Hong
    Compan Compan                 Trade    (HKD cloth and                        100%    100% Yes        0.00    0.00       0.00
                    Kong
    y         y                            )        dyed
                                                 cloth
                                                 Textilet,P
                                                 rintingShenzh
          Limited                                and
    en East             Shenzhe            3,000,0                     3,000,0                         -1,738,4
          Compan               Trade             dyeing                        51%     51% Yes                0.00       0.00
    Asia                n                  00                           00.00                            20.00
          y                                      industryCo
                                                 and
                                                 Raw
                                                                            深圳中冠纺织印染股份有限公司 2013 年度报告全文
                                             materials
                                             ,Machine
                                             ry
                                             equipmen
                                             t and
                                             other
                                             fabricsOther statements on Subsidiaries obtained through incorporation or investment:
    1.The Company invested HKD 2,400,002 in 1984 to establish Hongkong Victor Onward Company InHongkong.
    2.Shenghong Company Was established in November 9, 1993, registered capital 1 million HKD,Hongkong Victor Onward Holding 100% equity.
    3.Nanhua Company was established in July 21 1988, registered capital 85.49 million HKD, ByDecember 31, 2013 the shareholding structure as follows:
    Name of investor                         Year-beginning        Proportion     Year-end amount         Proportion%
                                            amount                 %
    The Compoany                                 46,868,194.54         54.82%            46,868,194.54          54.82%
    Shenye Union           (Hongkong)            26,127,180.32         30.56%            26,127,180.32          30.56%Co.,Ltd.
    The Company                                  12,499,325.14         14.62%            12,499,325.14          14.62%
    Hong Kong Victor Onward                      85,494,700.00       100.00%             85,494,700.00          100.00%Company
               Total
    4.Xingye Company invested HKD 10,000 to establish industry Company in Hongkong in December1996. Nanhua Company holding‘s 100% of the equity.
    5.Shenzhen East Asia Company was established in February 28, 2007, registered capital 3 million yuan,the company invested 1.53 million yuan , holding 51% equity , Nanjiang East ASIA Textile Co., Ltd.Invested 1.47 million yuan , holding 49% equity.2. Changes of combination scope at current periodNotes□Applicable √Not applicable3. Exchange rate of main accounts of overseas businessesThe spot exchange rate of HKD to RMB WAS 0.81090 at year beginning , and the spot exchange rate at year endwas0.78623
    the approximate exchange rate of the sot exchange rate uses the current average exchange rate 0.798573.Except the company, its subsidiaries South China Dyeing and Printing Co., Ltd. and Shenzhen Southeast Asia Co.,Ltd. choose RMB as the functional currency, other subsidiaries choose HK dollar. However, the financialstatements should be translated into RMB. For the translation method of the financial statements for foreigncurrency, please refer to the Note II.
                                                                           深圳中冠纺织印染股份有限公司 2013 年度报告全文
         VII. Notes to the major items of consolidated financial statement
        1.Monetary Capital
                                                                                                                        Unit:RMB
                                             Year-end balance                                Year-beginning balance
            Items                               Exchange