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神州长城(000018)公告正文

中冠B:2015年半年度报告(英文版)

公告日期:2015-08-31

                            深圳中冠纺织印染股份有限公司 2015 年半年度报告全文




Shenzhen Victor Onward Textile Industrial Co., Ltd.

            The Semi-annual Report 2015




                    August 2015




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                                                               深圳中冠纺织印染股份有限公司 2015 年半年度报告全文




             I. Important Notice, Table of Contents and Definitions


The Board of Directors ,Supervisory Committee, all directors, supervisors and senior executives of the Company


hereby guarantees that there are no misstatement, misleading representation or important omissions in this report


and shall assume joint and several liability for the authenticity, accuracy and completeness of the contents hereof.



All the directors attended the board meeting for reviewing this 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 the
authenticity and completeness of the financial report enclosed in this semi-annual report.




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                                         Table of Contents




2015 Semi-Annual Report

I..Important Notice, Table of contents and Definitions

II. Basic Information of the Company

III. Summary of Accounting Highlights and Business Highlights

IV. Report of the Board of Directors

V. Important Events

VI. Change of share capital and shareholding of Principal Shareholders

VII. Situation of the Preferred Shares

VIII. Information about Directors, Supervisors and Senior Executives

IX. Financial Report

X. Documents available for inspection




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                                                      深圳中冠纺织印染股份有限公司 2015 年半年度报告全文




                                          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




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II. Basic Information of the Company


1. Company Information


                               Victor Onward A, Victor Onward
Stock abbreviation                                            Stock code:                           000018、200018
                               B
Stock exchange for
                               Shenzhen Stock Exchange
listing:
Name in Chinese                深圳中冠纺织印染股份有限公司

Chinese Abbreviation (If
                         中冠
any)
English name (If any)          Shenzhen Victor Onward Textile Industrial Co., Ltd
English abbreviation (If
                               VICTOR ONWARD
any)
Legal Representative           Hu Yongfeng
2. Contact person and contact manner
                                                        Board secretary                     Securities affairs Representative
Name                                        Zhang Jinliang                             Wu Xia
                                            Room 1308, Hualiang Building, Room 1308, Hualiang Building,
Contact address                             No.2008 Shennan Zhong Road, No.2008 Shennan Zhong Road,
                                            Shenzhen                      Shenzhen
Tel                                         (755)83668425                              (755)83667895

Fax                                         (755)83668427                              (755)83668427

E-mail                                      zhangjl@udcgroup.com                       wux@udcgroup.com


3.Other

(1)Way to contact the Company

Whether registrations address, offices address and codes as well as website and email of the Company changed in
reporting period or not
□ Applicable □√ Not Applicable
The registered address, office address and their postal codes, website address and email address of the Company did not change
during the reporting period. The said information can be found in the 2014 Annual Report.


(2)About information disclosure and where this report is placed

Did any change occur to information disclosure media and where this report is placed during the reporting period?

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□ Applicable √ Not applicable
The newspapers designated by the Company for information disclosure, the website designated by CSRC for
disclosing this report and the location where this report is placed did not change during the reporting period. The
said information can be found in the 2014 Annual Report.

(3)Registration changes of the Company

Whether registration has changed in reporting period or not
□ Applicable √ Not applicable
Date/place for registration of the Company, registration nmber for enterprise legal license number of taxation
registration and organization code have no change in reporting period, found more details in annual report 2014.




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III. Summary of Accounting Data and Financial Indicators

1.Summary of accounting /Financial Data

May the Company make retroactive adjustment or restatement of the accounting data of the previous years due to
change of the accounting policy and correction of accounting errors.
□Yes   √No
                                                 Reporting period          Same period of last year      YoY+/-(%)

Operating income(RMB)                                    5,569,686.00                  5,077,451.00                  9.69%

Net profit attributable to the shareholders
                                                            -608,576.00                    738,330.00            -182.43%
of the listed company(RMB)

Net profit after deducting of non-recurring
gain/loss attributable to the shareholders of               -608,576.00                    740,248.00            -182.21%
listed company(RMB)

Cash flow generated by business operation,
                                                             911,858.00                  2,708,214.00             -66.33%
net(RMB)

Basic earning per share(RMB/Share)                                -0.004                         0.004           -200.00%

Diluted gains per
                                                                  -0.004                         0.004           -200.00%
share(RMB/Share)(RMB/Share)

Weighted average ROE(%)                                          -0.46%                         0.58%              -1.04%

                                                As at the end of the
                                                                           As at the end of last year    YoY+/-(%)
                                                 reporting period

Gross assets (RMB)                                      173,233,623.00                184,418,905.00               -6.07%

Shareholders’ equity attributable to
                                                        130,693,937.00                131,266,672.00               -0.44%
shareholders of the listed company(RMB)

II.The differences between domestic and international accounting standards

1.Simultaneously pursuant to both Chinese accounting standards and international accounting standards disclosed
in the financial reports of differences in net income and net assets.

□ Applicable √Not applicable
No difference .

2. Differences of net profit and net assets disclosed in financial reports prepared under overseas and Chinese
accounting standards.

□ Applicable √Not applicable
No difference .

III.Items and amount of non-current gains and losses
□ Applicable √Not applicable
No difference .

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                                    IV. Report of the Board of Directors

I. General

   1. Business highlights
     In the report period, the printing and dyeing mill of the Company in Shenzhen continued production suspense
while the parent company and five subsidiaries continued the suspension of printing and dyeing business due to
the production suspense of the printing and dyeing mill. The parent company, Nanhua Company and Hong Kong
Company maintained daily operation through property lease. The other two subsidiaries had suspended business.
cancellation of a subsidiary,The Company planned to invest in the joint venture project of Nanjing East Asia
Textile Printing and Dyeing Co., Ltd. with partial machinery and equipment. Due to change of foundation of joint
venture and prospect of the industry, the capital increase was not completed. The litigation of 2014 has been over.
The company’s rent income is the major part of the cash inflow, also the major part of the current main business.
 2. The risks that the Company is facing and countermeasures

 Production suspense brought significant influence on the production and operating activities and continuous devel
opment of the Company. On June 16, 2014, the company began planning a major reorganization of assets. On Oct
ober 13, 2014 the 16th meeting of sixth session of the board of directors examined and adopted the " Shenzhen Vi
ctor Onward Textile Industrial Co., Ltd. major assets replacement and issue shares to buy assets and related transa
ctions and raise matching funds plan" and other related proposals.
   On July 27, 2015, the company received “The Reply on Ratifying The Reorganization of Significant Asset of
Shenzhen Victor Onward Textile Industrial Co., Ltd.And Issuing Shares to Chen Lue etc. to Buy Assets And
Raising Matching Funds” (CSRC Approval No.1774 [2015]) from China Securities Regulatory Commission. The
company’s boards would soon start the reorganization,the issue of shares to buy assets and raise the matching
funds in accordance with the above approvals’ requirements and the authorization of the shareholders' meeting.


At present, the company and the related parties are actively promoting the work of the major asset restructuring to
make the production and operation of the company smoothly as soon as possible.

II. Analysis on principal Business

Year-on-year changes in major financial statistics
                                                                                                                    In RMB

                            This report period      Same period last year     YOY change(%)           Cause change

Operating income
                                     5,569,686.00              5,077,451.00               9.69% The occupancy rate grew


                                                                                                  The house property
Operating cost                       1,922,683.00              1,446,029.00              32.96%
                                                                                                  reclassified

Sale expenses                                0.00                      0.00

Administrative                                                                                    Caused by the
                                     4,090,387.00              3,550,910.00              15.19%
expenses                                                                                          reorganization cost




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                                                                                                               The interest income
Financial expenses                         -193,363.00              -58,719.00                     229.30%
                                                                                                               increased

Income taqx expenses                              0.00                      0.00

                                                                                                               The Curent
Net cash flows from
                                           911,858.00             2,708,214.00                      -66.33% reorganization cost
operating activities
                                                                                                               increased

Net cash flows from
                                            -62,873.00              -64,702.00                       -2.83%
investing activities
                                                                                                               Paid Union Group For
Net cash flows from
                                                                 -6,291,275.00                    -100.00% the principal a year
financing activities
                                                                                                               earlier

Net increase in cash
                                           670,900.00            -3,253,848.00                    -120.62% Ditto
and cash equivalents
Major changes in profit composition or cources during the report period
□ Applicable √ Not applicable
The profit composition or sources of the Company have remained largely unchanged during the report period.
Delay of future development and plan disclosed in Company’s IPO prospectus, fund raising prospectus and capital
reorganization report into this report period.\
□ Applicable √ Not applicable
No future development and plan disclosed in Company’s IPO prospectus, fund raising prospectus and capital
reorganization report into this report period.\
Progress of development strategy and operation plans in this period that are disclosed by the company in the previous annual reports.

This year the company headquarters and its subsidiaries lease unused property .


III. Composition of principal businesses
                                                                                                                                    In RMB

                                                                                                  Increase/decrease
                                                                              Increase/decrease                          Increase/decrease
                                                                                                     of principal
                                                                              of reverse in the                            of gross profit
                       Operating                            Gross profit                          business cost over
                                       operating costs                         same period of                            rate over the same
                        revenue                               rate(%)                              the same period
                                                                                  the previous                             period of the
                                                                                                  of previous year
                                                                                    year(%)                              previous year (%)
                                                                                                         (%)

Industry

Lease Industry          5,569,686.00         1,922,683.00          65.48%                 9.69%             32.96%                  -6.04%

Product

Leasing                 5,569,686.00         1,922,683.00          65.48%                 9.69%             32.96%                  -6.04%

District

China                   4,869,285.00         1,701,968.00          65.05%                12.35%             38.90%                  -6.68%

Hong Kong                 700,401.00           220,715.00          68.49%                -5.78%                0.00%                -1.82%


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IV. Analysis on Assets and Liabiliti

N/A


V. Analysis on investment Status


1. External Equity investment


(1)External investment


√Applicable □Not applicable



                                                       External investment

      Investment amount (January-June           Investment Amount (January-June
                                                                                                   Change rate(%)
               2015)(RMB)                                  2014)(RMB)

                                                      Particulars of investees

                Companies                               Principal business               Proportion in the investees’ equity (%)

 Zhejiang Union Hangzhou Bay Chuangye
                                                            Real estate                                                    25.00%
                 Co., Ltd.


(2)Holding of the equity in Financial Enterprises


□ Applicable√ Not applicable
N/A


(3)Investment in Securities

□ Applicable√ Not applicable
N/A


(4)Explanation on Holding Equity in Other Listed Companies

□ Applicable√ Not applicable
N/A


2.Entrusted Financing, Investment in Derivative Products and Entrusted Loan

(1)Entrusted Financing

□ Applicable√ Not applicable
N/A




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                                                                           深圳中冠纺织印染股份有限公司 2015 年半年度报告全文


(2)Investment in Derivatives

□ Applicable√ Not applicable
N/A


(3)Entrusted loan

□ Applicable√ Not applicable
N/A


(3)Changes of raised funds projects

□ Applicable√ Not applicable
N/A


4.Analysis on principal subsidiaries and Mutual Shareholding Companies

√Applicable □Not applicable
Particulars about the principal subsidiaries and Mutual shareholding companies
                                                                                                                                      In RMB

                                              Leading                     Total                                     Operating
 Company       Company            Sectors                  Registered                   Net assets    Tumover                     Net Profit
                                             products                   assets(RMB                                   profit
   Name           type       engaged in                      capital                     (RMB)         (RMB)                       (RMB)
                                            and services                    )                                        (RMB)

Hong Kong
Victor                      Textile         Textile        2,400,002    129,679,33 58,950,886.                      -229,156.
             Subsidiary                                                                               700,401.00                  -229,156.00
Onward                      industry        trade          (HKD)               8.00            00                       00
Co.Ltd

                                            Textile
Nanhua                      Textile                        85,494,700 24,835,951. -15,647,865 2,833,200.0 246,972.4
             Subsidiary                     Printing and                                                                          246,972.49
Company                     industry                       (HKD)                00            .00             0             9
                                            dyeing

Zhejiang
Union
                                            Real estate
Hangzhou     Shareholding Real estate                      247,476,83 1,974,356,2 340,235,83 31,324,402. -200,673.
                                              Develop                                                                             -200,673.00
Bay          companies           Industry                  2.6                  04.00         3.00             00         00
                                              ment
Chuangye
Co., Ltd.


5. Projects invested with Funds not raised through share offering

□ Applicable√ Not applicable
N/A




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VI. Prediction of business performance for January -September 2015.

Estimation of accumulative net profit from the beginning of the year to the end of next report period to be loss
 probably or the warning of its material change compared with the corresponding period of the last year and
 explanation of reason.

□ Applicable√ Not applicable
VII. Explanation by the Board of Directors and the Supervisory Committee about the “ non-standard audit report”
issued by the CPAs firm for the reporting period.
□ Applicable √ Not applicable

VIII. Explanation by the Board of Directors about the “ non-standard audit report “ for lastyear.

√ Applicable □ Not applicable

1.Basic information

    Da Hua Certified Public Accountants(Special General Partnership) issued unqualified auditor's report with
paragraph of emphasized matters for the Company's financial statements for 2014 Basic information of
emphasized matters: Since March 2007, Shenzhen Victor Onward Textile Industrial Co., Ltd. stopped production
and dismissed most of workers. And most subsidiaries of the company had stopped production and it maintained
daily operation by house leasing., Shenzhen Victor Onward Textile Industrial Co., Ltd. had disclosed its
improvement measures in Note 13 of Financial Statement,but its sustainable operation ability is still uncertain.
2. Basic opinions of certified public accountants on such matter:
Da    Hua      Certified   Public     Accountants(Special   General   Partnership)     accepted    entrustment,
Da Hua certified Public Accountants[2015] No.000917 issued an unqualified auditor's report with highlighted par
agraphs to the Company on February 9, 2015.completed the audit of the financial statements of the Company for
2014 and issued unqualified auditor's report with paragraph of emphasized matters for the Company's financial
statements for 2014. In accordance with No. 14 Rule for Preparation and Report of Information Disclosure by
Companies Publicly Issuing Securities - Non-standard Unqualified Audit Opinions and Treatment of Matters
Involved Therein, relevant notes are as follows:
As noticed by Shine Wing Certified Public Accountants during audit, Since March 2007, Shenzhen Victor
Onward Textile Industrial Co., Ltd. stopped production and dismissed most of workers. The company currently
only had house leasing business. Except that Shenzhen East Asia Victor Onward Textile Printing and Dyeing Co.,
Ltd. is still operating normally, other 5 subsidiaries controlled by the Company have stopped operation or are
maintaining daily operation by house property lease.
We believe that the sustainable operation ability of Shenzhen Victor Onward Textile Industrial Co., Ltd. is still
uncertain, so I emphasized the situation in the audit reports and issued unqualified auditor's report with paragraph
of emphasized matters. The matters involved in highlighted statement did not apparently violate Accounting
Standards for Business Enterprises and regulations on relevant information disclosure standardization.

3.The opinions of the board of directors, supervisory committee and management of the Company on this matter:

     The board of directors, Supervisory Committee and managers believed that the printing and dyeing plant of
the company had stopped operation or maintained daily operation by house leasing.

4. Extent of influence of this matter on the Company:

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      The matter of the company temporarily did not have delisting influence.
5.The possibility of eliminating this matter and its influence:
      The company stopped textile industry, does not have the printing and dyeing processing capacity, hollow
core business problem is serious, sustainable business faces major problems. Company with a positive attitude has
been seriously looking for a new business direction, also conducted a wide range of research and exploration.
Currently, the company currently steadily carry forward major asset reorganization.

6.The concrete measures of eliminating this matter and its influence

     On June 2014 the company began major reorganization of assets, is planned and under progress. If the
company can complete major asset restructuring, hollow core business operations and sustainability issues will be
solved.

IX. Profit distribution carried out in the report period

Execution or adjustment of profit distribution, especially cash dividend, and capitalizing of reserves in the report
period.
□ Applicable √ Not applicable


Previous year’s profit distribution plan was no profit distribution and shares converted from capital reserve either
X. Preplan for profit distribution and turning capital reserve into share capital in the reporting period
□ Applicable √ Not applicable
The Company planed that no to distribute cash dividend, bonus shares and there was no turning of capital reserve
into share capital.

XI. Statement of such activities as reception, research, communication, interview in the reporting period

√ Applicable □    Not applicable
                                                                                                        Discussion topics and
  Reception time    Reception place     Way of reception    Types of visitors    Visitors received
                                                                                                        provision of materials

                   BOD office of the                                                                 Inquiry of company
January 15,2015                        By phone            Individual           Investor
                    Company                                                                          restructuring

                   BOD office of the                                                                 Inquiry of progress in
June 23,2015                           By phone            Individual           Investor
                   Company                                                                           restructuring

                                                                                                     Inquire whether have
                   BOD office of the
June 29,2015                           By phone            Individual           Investor             received the official
                   Company
                                                                                                     approvals from CSRC




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                                                              深圳中冠纺织印染股份有限公司 2015 年半年度报告全文




                                          V. Important Events

1.Governance of the Company

In the report period, The company has strictly abided by the “Corporate Law”, “Securities Law”, “Governance
Rules of Listed Companies”, “Articles of Association” and the provisions and requirements of The China
Securities Regulatory Commission (CSRC) and The Shenzhen Stock Exchange (SZSE) to continuously improve
the corporate governance structure, The company is committed to establish a perfect internal control system for
management, continue to implement governance activities, specify the operation further and raise the
management level. The company’s governance conforms to the basic requirements of the normative documents on
governing listed companies publish by CSRC.There isn’t difference between the management prac tise and the
regulations of the Company Law and CSRC.

II. Lawsuits affairs

Major lawsuits and Arbitration affairs

□ Applicable √ Not applicable
The Company has no major lawsuit or arbitration in the report period.

Other Lawsuits affairs

□ Applicable √ Not applicable

III. Query form media
□ Applicable √ Not applicable
In the reporting year, the Company had no query from media
IV. Bankruptcy or Reorganization Events
□ Applicable √ Not applicable
There Company was not involved in any bankruptcy or reorganization events in the reporting period.

V. Transaction in Assets

1. Purchase of assets
□ Applicable √ Not applicable

There is no purchase of assets in the Company during the reporting period.

2. Sale of assets
□ Applicable √ Not applicable
There is no sale of assets in the Company during the reporting period
3. Business combination
□ Applicable √ Not applicable


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                                                                          深圳中冠纺织印染股份有限公司 2015 年半年度报告全文


There is no Bubiness combination in the Company during the reporting period
VI. Implementation and Influence of Equity Incentive Plan of the Company
□ Applicable √ Not applicable
There is no equity incentive plan and its implementation in the Company during the reporting period.
VII. Significant related-party transactions

1. Related-party transactions concerning routine operation

□ Applicable √ Not applicable
The company has no transactions related to daily operations in the reporting period.
2. Related-party transactions arising from asset acquisition or sale
□ Applicable √ Not applicable
The Company was not involved in any related-party transactions arising from asset acquisition or sale during the
reporting period.
3. Related-party transitions with joint investments
□ Applicable √ Not applicable
The Company was not involved in any related-party transaction with joint investments during the reporting
period.

4. Credits and liabilities with related parties

□ Applicable √ Not applicable
There is no any credit and liability with related parties of the Company of the reporting period.


5. Other significant related-party transactions

□ Applicable √ Not applicable
The Company was not Other significant related-party transactions during the reporting period.
VIII. Particulars about the non-operating occupation of funds by the controlling shareholder
and other related parties of the Company
□ Applicable √ Not applicable
The Company was not involved in the non-operating occupation of funds by the controlling shareholder and other
related parties during the reporting period..
IX. Particulars about significant contracts and their fulfillment
1. Particulars about trusteeship, contract and lease
(1) Trusteeship
□ Applicable √ Not applicable




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                                                               深圳中冠纺织印染股份有限公司 2015 年半年度报告全文


There was no any trusteeship of the Company in the reporting period.

(2) Contract

□ Applicable √ Not applicable

There was no any contract of the Company in the reporting period.
(3) Lease
□ Applicable √ Not applicable
There was not involved in ant lease of the Company in the reporting period.

2. Guarantees provided by the company

□ Applicable √ Not applicable
There was not involved in any Guarantees provided by the company in the reporting period.
3. Other significant contracts
□ Applicable √ Not applicable
There was no other significant contract of the Company in the reporting period.
4. Other significant transactions
□ Applicable √ Not applicable
X. Commitments made by the Company or shareholders holding over 5% of the Company’s shares in the
reporting period or such commitments carried down into the reporting period
□ Applicable √ Not applicable
There was no commitments made by the company or shareholders holding over 5% of the company's shares in the
reporting period or such commitments carried down into the reporting period.
XI. Particulars about engagement and disengagement of CPAs firm
Whether the semi-annual financial report had been audited?
□ Yes √ No
The semi-annual financial report has not been audited.
XII. Punishment and Rectification
□ Applicable √ Not applicable

There was no any punishment and rectification of the Company in the reporting period.

XIII. Reveal of the delisting risks of illegal or violation
□ Applicable √ Not applicable
There was no any delisting risk of illegal or violation of the Company in the reporting period.

XIV. Explanation about other significant matters

√ Applicable □Not applicable
1. “The Announcement on a part of Shenzhen Victor Onward Textile Industrial Co., Ltd. Factory Buildings
Collected by the Government”, the Management Committee of Shenzhen Dapeng District released “The Decision

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                                                                         深圳中冠纺织印染股份有限公司 2015 年半年度报告全文


Announcement on the Management Committee of Shenzhen Dapeng New District Collecting Houses” which says,
the committee decided to collect the related housing estates located in Kuixin community for the need to build a
people’s hospital in Dapeng new district. The housing estates which would be collected this time include
Kuichong Company’s part of the buildings which haven’t got estate right certificate, and the area of these
buildings is 18,000 square meters. The matters mentioned above were announced in Securities Times,Hong Kong
Commercial Daily and www.cninfo.com.cn. on June 24, 2014, the Announcement No.: 2014-0673. No
compensation scheme or arrangement for this item has been issued yet.
2. On June 16, 2014, the company started planning the reorganization of the major assets. At present the company
and the other parties are promoting all the work actively. For relevant matters, please refer to “The Announcement on
the Reorganization and Suspension of Major Assets in Shenzhen Victor Onward Textile Industrial Co., Ltd ”, “The Announcement on
the Progress of Major Assets’ Reorganization in Shenzhen Victor Onward Textile Industrial Co., Ltd ”, “The Announcement on the
Application for Continuous Suspension of Major Assets after the Expiration of Last Suspension in Shenzhen Victor Onward Textile
Industrial Co., Ltd”, “The Proposal of the Major Assets’ Reorganization and issued shares to buy assets and raise matching funds
in Shenzhen Victor Onward Textile Industrial Co., Ltd ”,“The Proposal of the Major Assets’ Reorganization and issued shares to bu
y assets and raise matching funds in Shenzhen Victor Onward Textile Industrial Co., Ltd ”“The Proposal of the Major Assets’
 Reorganization and issued shares to buy assets and raise matching funds in Shenzhen Victor Onward Textile Ind
ustrial Co., Ltd.”(draft)”“The Announcement of CSRC’s Administrative Permissive Application and Acceptance
of Shenzhen Victor Onward Textile Industrial Co., Ltd. on Significant Asset Replacement And Issuing Shares to
Buy Assets And The Related Transaction And Raising Matching Funds”, “The Announcement of Resolutions of
the First provisional shareholders' general meeting of Shenzhen Victor Onward Textile Industrial Co., Ltd.”
  “The Announcement of The Scenario of East Asia Co.,Ltd on Changing Significant Asset Replacement And
Issuing Shares to Buy Assets And Raising Matching Funds”, “The Reply of Shenzhen Victor Onward Textile
Industrial Co., Ltd. on A Feedback Notice(No.150551) of CSRC’s Administrative Permissive Projects Audits”,
“The Announcement of Shenzhen Victor Onward Textile Industrial Co., Ltd. on Significant Asset Replacement
And Issuing Shares to Buy Assets And The Related Transaction And Raising Matching Funds conditionally
passing the audits of The Merger And Reorganization Audit Committee for Listed Companies of CRSC And The
Resumption of Trade for The Corporate Stock”, “The Announcement of Shenzhen Victor Onward Textile
Industrial Co., Ltd. on Significant Asset Replacement And Issuing Shares to Buy Assets And The Related
Transaction approved by CRSC”, “The Revised Announcement of The Report of Shenzhen Victor Onward
Textile Industrial Co., Ltd. on Significant Asset Replacement And Issuing Shares to Buy Assets And The Related
Transaction And Raising Matching Funds”“The Announcement of The Delivered Transfer with Placing Asset of
Shenzhen Victor Onward Textile Industrial Co., Ltd. on Significant Asset Replacement And Issuing Shares to
Buy Assets And The Related Transaction And Raising Matching Funds”. which were released in Securities
Times,Hong                                                                                              Kong
Commercial Daily and www.cninfo.com.cn on June 16, 2014, June 23,2014, June 30, 2014, July7, 2014, July 14,
2014, July 21,2014, July 28, 2014, August 4, 2014, August 11, 2014, August 15, 2014, August 22, 2014,August 29,
2014, September 5,2014, September 12, 2014, September 19, 2014, September 26, 2014, October 10, 2014,
October 15, 2014, November 14, 2014, December 15, 2014, January 14, 2015, February 13, 2015, March 27, 2015,
April 25, 2015, May 12, 2015, May 28, 2015, June 4, 2015, June 26, 2015, July 28, 2015 and August 4,2015 . The
above asset reorganizations and related work have been underway.




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                                                                            深圳中冠纺织印染股份有限公司 2015 年半年度报告全文



                      VI. Change of share capital and shareholding of Principal Shareholders

1.Changes in share capital
                                                                                                                                        In 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
                                                                                   fund

 I. Share with conditional
                                       0      0.00%            0            0              0           0              0          0       0.00%
 subscription

 1.State-owned shares                  0      0.00%            0            0              0           0              0          0       0.00%

 2..Staee-owned legal
                                       0      0.00%            0            0              0           0              0          0       0.00%
 person shares

 3.Other domestic shares               0      0.00%            0            0              0           0              0          0       0.00%

 Of which:Domestic legal
                                       0      0.00%            0            0              0           0              0          0       0.00%
 person shares

 Domestic natural person
                                       0      0.00%            0            0              0           0              0          0       0.00%
 shares

 4.Share held by foreign
                                       0      0.00%            0            0              0           0              0          0       0.00%
 investors

 Of which:Foreign legal
                                       0      0.00%            0            0              0           0              0          0       0.00%
 person shares

 Foreign natural person
                                       0      0.00%            0            0              0           0              0          0       0.00%
 shares

 II. Shares with                169,142,3                                                                                 169,142,3
                                            100.00%            0            0              0           0              0                100.00%
 unconditional subscription           56                                                                                        56

 1.Common shares in RMB 99,720,45           58.96%             0            0              0           0              0
                                                                                                                          99,720,45
                                                                                                                                        58.96%
                                3                                                                                                3

2.Foreign shares in domestic 69,421,90                                                                                    69,421,90
                                            41.04%             0            0              0           0              0                 41.04%
             market                    3                                                                                         3


3.Foregin shares in overseas
                                       0      0.00%            0            0              0           0              0          0       0.00%
             market

 4.Other                               0      0.00%            0            0              0           0              0          0       0.00%

 III. Total of capital shares   169,142,3   100.00%            0            0              0           0              0 169,142,3 100.00%


                                                                                                                                              18
                                                                                  深圳中冠纺织印染股份有限公司 2015 年半年度报告全文


                                       56                                                                                          56

Reasons for share changed:
□ Applicable √ Not applicable

Approval of Change of Shares
□ Applicable √ Not applicable
Ownership transfer of share changes
□ Applicable √ Not applicable
Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to
common shareholders of Company in latest year and period
□ Applicable √ Not applicable

Other information necessary to disclose for the company or need to disclosed under requirement from security
regulators
□ Applicable √ Not applicable
Explanation on changes in aspect of total shares, shareholders structures as well as structure of assets and liability
of the Company

II. Shareholders and actual controlling shareholder

                                                                                                                                        In Shares
                                                                          Total number of preferred
Total number of common                                                    shareholders that had restored
shareholders at the end of the                                 9,947 the                                                                       0
reporting period                                                          voting right at the end of the
                                                                          reporting period (if any) (note 8)

                                       Shareholding of shareholders holding more than 5% shares

                                                     Number                          Amount                       Number os share pledged/frozen
                                                                                                   Amount of
                                        Proportion of shares Changes in                 of
                       Nuture of                                                                   un-restricte
  Shareholders                           of shares    held at           reporting   restricted
                      shareholder                                                                   d shares      State of share    Amount
                                        held(%)     period             period       shares
                                                                                                      held
                                                       -end                            held

                   Domestic Non-
Union Holdings                                       43,141,03
                   State-owned legal        25.51%                  0                          0 43,141,032
Co., Ltd.                                                       2
                   person

STYLE-SUCC Foreign legal                             24,466,02
                                            14.46%                  0                          0 24,466,029
ESS LIMITED person                                              9

Rich Crown
                   Foreign legal
Investment Co.,                              3.62% 6,114,556 0                                 0     6,114,556
                   person
Ltd.

Union              Domestic Non-
Development        State-owned legal         3.36% 5,681,089 0                                 0    5,681,089
Group Co., Ltd. person


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                                                                         深圳中冠纺织印染股份有限公司 2015 年半年度报告全文


National social
security fund     Other                     2.79% 4,712,873 +214,099                  0   4,712,873
112

Liuzhou Jiali     Domestic Non-
Real estate       legal person
                                            2.15% 3,630,000 -690,000                  0   3,630,000
Development       State-owned legal
Co., ltd.         person

National social
security fund     Other                     1.77% 3,000,053 +3,000,053                0   3,000,053
413

                  Domestic Natural
Zeng Ying                                   1.22% 2,070,600 0                         0   2,070,600
                  person

KGI ASIA          Foreign legal
                                            1.03% 1,738,060 +260,000                  0   1,738,060
LIMITED           person

China Galaxy
International
                  Foreign legal
Securities                                  0.85% 1,437,080 +1,437,080                0   1,437,080
                  person
(Hongkong)
Co., Ltd.

Strategy investors or general legal
person becomes top 10 shareholders
                                      N/A
due to rights issued (if
applicable)See Notes 3)

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 of the               Share type
      Name of the shareholder
                                                          reporting period                          Share type        Quantity

                                                                                                 RMB Common
Union Holdings Co., Ltd.                                                            43,141,032                            43,141,032
                                                                                                 shares

                                                                                                 Foreign shares
                                                                                                 placed in
STYLE-SUCCESS LIMITED                                                               24,466,029                            24,466,029
                                                                                                 domestic
                                                                                                 exchange

                                                                                                 Foreign shares
                                                                                                 placed in
Rich Crown Investment Co., Ltd.                                                      6,114,556                             6,114,556
                                                                                                 domestic
                                                                                                 exchange

Union Development Group Co.,                                                         5,681,089 RMB Common                  5,681,089


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                                                                        深圳中冠纺织印染股份有限公司 2015 年半年度报告全文


Ltd.                                                                                           shares

                                                                                               RMB Common
National social security fund 112                                                  4,712,873                             4,712,873
                                                                                               shares

Liuzhou Jiali Real estate                                                                      RMB Common
                                                                                   3,630,000                             3,630,000
Development Co., ltd.                                                                          shares

                                                                                               RMB Common
National social security fund 413                                                  3,000,053                             3,000,053
                                                                                               shares

                                                                                               Foreign shares
                                                                                               placed in
Zeng Ying                                                                          2,070,600                             2,070,600
                                                                                               domestic
                                                                                               exchange

                                                                                               Foreign shares
                                                                                               placed in
KGI ASIA LIMITED                                                                   1,738,060                             1,738,060
                                                                                               domestic
                                                                                               exchange

                                                                                               Foreign shares
China Galaxy International                                                                     placed in
                                                                                   1,437,080                             1,437,080
Securities (Hongkong) Co., Ltd.                                                                domestic
                                                                                               exchange

Explanation on associated
relationship or consistent action
among the top 10 shareholders of       The controlling shareholder of the above-mentioned largest shareholder Shenzhen Union
non-restricted negotiable shares and Holdings Ltd. and third shareholder Rich Crown Investment Co., Ltd.. Is Union Development
that between the top 10 shareholders Group Ltd.
of non-restricted negotiable shares
and top 10 shareholders

                                       Among the shareholders above, Liuzhou Jiali Real estate Development Co., ltd. holds
Notes to the shareholders involved
                                       3,630,000 shares of the Company through stock account with credit transaction and guarantee
in financing securities (if any)(See
                                       of Guohai Securities Co., Ltd.
Notes 4)


Whether top ten common shareholders or top ten common shareholders with un-restrict shares held have a
buy-back agreement dealing in reporting period.
□ Yes √ No
The top ten common shareholders or top ten common shareholders with un-restrict shares held of the Company
have no buy –back agreement dealing in reporting period.

III. Change of the controlling shareholder or the actual controller

Change of the controlling shareholder in the reporting period
□ Applicable √ Not Applicable
There was no any change of the controlling shareholder of the Company in the reporting period.


                                                                                                                                 21
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Change of the actual controller in the reporting period
□ Applicable √ Not applicable
There was no any change of the actual controller of the Company in the reporting period.
IV. Particulars on shareholding increase scheme during the reporting period proposed or implemented by the
shareholders and act-in-concert persons
□ Applicable √ Not applicable
Within the scope known to the Company, there was no any shareholding increase scheme during the reporting
period proposed or implemented by the shareholders and act-in-concert persons.




                                   Section VII. Situation of the Preferred Shares


□ Applicable √ Not Applicable
The Company had no preferred shares in the reporting period




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VIII. Information about Directors, Supervisors and Senior Executives

I. Change in shares held by directors, supervisors and senior executives

□ Applicable √ Not Applicable
Shareholdings of directors, supervisors and senior management staff did not change in the reporting period. For
details, see the 2014 annual report.
II. Changes in directors, supervisors and senior management staffs
□ Applicable √ Not Applicable
Directors, supervisors and senior management staff did not change in the reporting period. For details, see the
2014 annual report.




                                              IX. Financial Report


1. Audit report

Has this semi-annual report been audited?
□ Yes √ No
The semi-annual financial report has not been audited.

II. Financial statements

Currency unit for the statements in the notes to these financial statements:RMB

1.Consolidated Balance sheet

Prepared by: Shenzhen Victor Onward Textile Industrial Co., Ltd.
                                                    June 30,2015
                                                                                                            In RMB

                Items                         Year-end balance                     Year-beginning balance
            Current asset:

            Monetary fund                                     64,285,104.00                           73,614,204.00

         Settlement provision

Outgoing call loan

  Financial assets measured at fair
value with variations accounted into



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                                         深圳中冠纺织印染股份有限公司 2015 年半年度报告全文


current income account

     Derivative financial assets

 Bill receivable

 Account receivable                               0.00                                 0.00

  Prepayments                               18,695.00                              4,922.00

 Insurance receivable

Reinsurance receivable

Provisions of Reinsurance contracts
receivable

  Interest receivable                             0.00                          112,685.00

  Dividend receivable

 Other account receivable                  147,878.00                           135,178.00

 Repurchasing of financial assets

 Inventories

  Assets held for sales

  Non-current asset due in 1 year

  Other current asset

Total of current assets                  64,451,677.00                        73,866,989.00

Non-current assets:

  Loans and payment on other’s behalf
disbursed

  Disposable financial asset               584,707.00                           584,900.00

  Expired investment in possess

 Long-term receivable

 Long term share equity investment       75,753,592.00                        75,816,615.00

 Property investment                     24,438,734.00                        25,943,393.00

  Fixed assets                            1,145,288.00                         1,327,230.00

  Construction in progress

Engineering material

  Fixed asset disposal

  Production physical assets

 Gas & petrol

 Intangible assets                        1,760,001.00                         1,780,154.00

 R & D petrol

 Goodwill                                 5,099,624.00                         5,099,624.00


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Long-germ expenses to be amortized

Differed income tax asset

 Other non-current asset

Total of non-current assets                108,781,946.00                       110,551,916.00

Total of assets                            173,233,623.00                       184,418,905.00

Current liabilities

  Short-term loans

 Loan from Central Bank

 Deposit received and hold for others

 Call loan received

Financial liabilities measured at fair
value with variations accounted into
current income account

     Derivative financial liabilities

  Bill payable

  Account payable                            3,189,756.00                         3,190,199.00

 Advance payment                             1,029,656.00                         1,029,656.00

 Selling of repurchased financial assets

Fees and commissions receivable

 Employees’ wage payable                     974,947.00                          1,020,718.00

 Tax payable                                 4,221,313.00                         4,108,302.00

 Interest payable

 Dividend payable                            1,215,946.00                         1,215,946.00

  Other account payable                     21,876,466.00                        31,491,092.00

 Reinsurance fee payable

 Insurance contract provision

 Entrusted trading of securities

Entrusted selling of securities

  Liabilities held for sales

Non-current liability due in 1 year

Other current liability                      1,069,249.00                         2,069,249.00

Total of current liability                  33,577,333.00                        44,125,162.00

Non-current liabilities:

  Long-term loan                              947,942.00                          1,009,719.00

 Bond payable


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  Including:preferred stock

             Sustainable debt

  Long-term payable                                             8,255,609.00                         8,258,331.00

  Long=term payable employees’s
remuneration

 Special payable

 Expected liabilities

     Differed income                                             836,792.00                           836,792.00

  Differed income tax liability                                  664,139.00                           664,358.00

Other non-current liabilities

Total non-current liabilities                                 10,704,482.00                         10,769,200.00

Total of liability                                            44,281,815.00                         54,894,362.00

Owners’ equity

  Share capital                                              169,142,356.00                        169,142,356.00

     Other equity instruments

  Including:preferred stock

             Sustainable debt

 Capital reserves                                             39,391,650.00                         39,391,650.00

  Less:Shares in stock

        Other comprehensive income                              -168,058.00                           -203,899.00

Special reserves

  Surplus reserves                                            26,704,791.00                         26,704,791.00

 Common risk provision

Undistributed profit                                         -104,376,802.00                      -103,768,226.00

Total of owner’s equity belong to the
                                                             130,693,937.00                        131,266,672.00
parent company

Minority shareholders’ equity                                 -1,742,129.00                        -1,742,129.00

Total of owners’ equity                                     128,951,808.00                        129,524,543.00

Total of liabilities and owners’ equity                     173,233,623.00                        184,418,905.00


Legal representative :Hu Yongfengn


Person-in-charge of the accounting work:Zhang Jinliang


Person-in -charge of the accounting organ:Ren Changzhengi




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2. Balance sheet of Parent Company


                                                                                                      In RMB



                    Items                 Year-end balance                   Year-beginning balance

Current asset:

Monetary fund                                            12,298,636.00                         23,480,977.00

Financial assets measured at fair value
with variations accounted into current
income account

  Derivative financial assets

 Bill receivable

 Account receivable

  Prepayments

  Interest receivable

  Dividend receivable                                                0.00                               0.00

Other account receivable                                 81,139,522.00                         81,098,215.00

  Inventories

Assets held for sales

  Non-current asset due in 1 year

Other current asset

Total of current assets                                  93,438,158.00                        104,579,192.00

Non-current assets:

  Disposable financial asset

Expired investment in possess

 Long-term receivable

 Long term share equity investment                       36,788,953.00                         36,788,953.00

 Property investment                                         7,569,501.00                       7,738,085.00

  Fixed assets                                                818,770.00                          818,770.00

  Construction in progress

Engineering material

  Fixed asset disposal

  Production physical assets

 Gas & petrol

Intangible assets                                            1,760,001.00                       1,780,153.00



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 R & D petrol

 Goodwill

Long-germ expenses to be amortized

Differed income tax asset

 Other non-current asset

Total of non-current assets               46,937,225.00                        47,125,961.00

Total of assets                          140,375,383.00                       151,705,153.00

Current liabilities

  Short-term loans

Financial liabilities measured at fair
value with variations accounted into
current income account

  Derivative financial liabilities

  Bill payable

  Account payable                            113,337.00                           113,337.00

 Advance payment                            302,540.00                           302,540.00

 Employees’ wage payable                   582,182.00                           627,181.00

 Tax payable                                794,637.00                           844,600.00

 Interest payable

 Dividend payable

  Other account payable                    6,630,984.00                        16,235,868.00

  Liabilities held for sales

Non-current liability due in 1 year

Other current liability                    1,069,249.00                         2,069,247.00

Total of current liability                 9,492,929.00                        20,192,773.00

Non-current liabilities:

  Long-term loan

 Bond payable

  Including:preferred stock

             Sustainable debt

  Long-term payable

     Employees’ wage payable

     Special payable

 Expected liabilities

Differed income                             836,792.00                           836,792.00


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Differed income tax liability                               4,180,138.00                            4,180,138.00

  Other non-current liabilities

Total of Non-current liabilities                            5,016,930.00                            5,016,930.00

Total of liability                                         14,509,859.00                           25,209,703.00

Owners’ equity

        Share capital                                  169,142,356.00                             169,142,356.00

  Other equity instrument

  Including:preferred stock

             Sustainable debt

 Capital reserves                                          31,606,598.00                           31,606,598.00

  Less:Shares in stock

  Other comprehensive income                               -4,358,150.00                            -4,398,234.00

Special reserves

Surplus reserves                                           26,309,287.00                           26,309,287.00

Undistributed profit                                   -96,834,567.00                             -96,164,557.00

Total of owners’ equity                               125,865,524.00                             126,495,450.00

Total of liabilities and owners’ equity               140,375,383.00                             151,705,153.00


3.Consolidated Profit statement


                                                                                                          In RMB



                     Item                  Report period                    Same period of the previous year

I. Income from the key business                             5,569,686.00                            5,077,451.00

Incl:Business income                                       5,569,686.00                            5,077,451.00

     Interest income                                                0.00                                       0.00

 Insurance fee earned                                               0.00                                       0.00

Fee and commission received                                         0.00                                       0.00

II. Total business cost                                     6,128,094.00                            5,194,360.00

Incl:Business cost                                         1,922,683.00                            1,446,029.00

      Interest expense                                              0.00                                       0.00

 Fee and commission paid                                            0.00                                       0.00

    Insurance discharge payment                                     0.00                                       0.00

  Net claim amount paid                                             0.00                                       0.00

Insurance policy dividend paid                                      0.00                                       0.00



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Insurance policy dividend paid                        0.00                                 0.00

  Reinsurance expenses                                0.00                                 0.00

     Business tax and surcharge                308,387.00                           256,140.00

    Sales expense                                     0.00                                 0.00

 Administrative expense                       4,090,387.00                         3,550,910.00

   Financial expenses                         -193,363.00                            -58,719.00

 Asset impairment loss                                0.00                                 0.00

 Add:Gains from change of fir value
                                                      0.00                                 0.00
(“-”for loss)

  Investment gain(“-”for loss)              -50,168.00                          857,157.00

  Incl: investment gains from affiliates              0.00                          857,157.00

     Gains from currency exchange
                                                      0.00                                 0.00
(“-”for loss)

III. Operational profit(“-”for loss)      -608,576.00                           740,248.00

     Add :Non-operational income                     0.00                                 0.00

  Including:Income from disposal of
                                                      0.00                                 0.00
non-current assets

  Less:Non business expenses                         0.00                            1,918.00

Incl:Loss from disposal of non-current
                                                      0.00                            1,918.00
assets

IV.Total profit(“-”for loss)                -608,576.00                           738,330.00

Less:Income tax expenses                             0.00                                 0.00

V. Net profit                                 -608,576.00                           738,330.00

Net profit attributable to the owners of
                                              -608,576.00                           738,330.00
parent company

Minority shareholders’ equity                        0.00                                 0.00

VI. Other comprehensive income                  35,841.00                           262,589.00

Net of profit of other comprehensive inco
me attributable to owners of the parent co      35,841.00                           262,589.00
mpany.

(I)Other comprehensive income items
that will not be reclassified into
                                                      0.00                                 0.00
gains/losses in the subsequent accounting
period

1.Re-measurement of defined benefit pla
                                                      0.00                                 0.00
ns of changes in net debt or net assets

2.Other comprehensive income under the                0.00                                 0.00


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equity method investee can not be reclass
ified into profit or loss.

(II)
Other comprehensive income that will be                                   35,841.00                                  262,589.00
reclassified into profit or loss.

1.Other comprehensive income under the
equity method investee can be reclassifie                                       0.00                                        0.00
d into profit or loss.

2.Gains and losses from changes in fair v
                                                                                0.00                                   15,764.00
alue available for sale financial assets

3.Held-to-maturity investments reclassifi
ed to gains and losses of available for sal                                     0.00                                        0.00
e financial assets

4.The effective portion of cash flow hedg
                                                                                0.00                                        0.00
es and losses

5.Translation differences in currency fina
                                                                          35,841.00                                  246,825.00
ncial statements

6.Other                                                                         0.00                                        0.00


7.Net of profit of other comprehensive in
                                                                                0.00                                        0.00
come attributable to Minority
shareholders’ equity

VII. Total comprehensive income                                         -572,735.00                                 1,000,919.00

Total comprehensive income attributable
                                                                        -572,735.00                                 1,000,919.00
to the owner of the parent company

 Total comprehensive income
                                                                                0.00                                        0.00
attributable minority shareholders

VIII. Earnings per share

(I)Basic earnings per share                                                 -0.004                                       0.004

 (II)Diluted earnings per share                                               -0.004                                       0.004

The current business combination under common control, the net profits of the combined party before achieved net profit of RMB 0,
last period the combined party realized RMB 0.


Legal representative :Hu Yongfengn

Person-in-charge of the accounting work:Zhang Jinliang

Person-in -charge of the accounting organ:Ren Changzhengi




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4. Profit statement of the Parent Company

                                                                                                              In RMB

                    Items                       Report period                   Same period of the previous year

I. Income from the key business                                 1,917,380.00                             1,041,445.00

  Incl:Business cost                                             168,586.00                              168,586.00

Business tax and surcharge                                        149,728.00                                71,755.00

     Sales expense

 Administrative expense                                         3,135,693.00                             2,180,252.00

     Financial expenses                                          -866,617.00                              -861,200.00

 Asset impairment loss

  Add:Gains from change of fir value
(“-”for loss)

  Investment gain(“-”for loss)

  Incl: investment gains from affiliates

II. Operational profit(“-”for loss)                          -670,010.00                              -517,948.00

      Add :Non-operational income

  Including:Income from disposal of
non-current assets
  Less:Non business expenses
Incl:Loss from disposal of
non-current assets
III.Total profit(“-”for loss)                                  -670,010.00                              -517,948.00

 Less:Income tax expenses

IV. Net profit(“-”for net loss)                              -670,010.00                              -517,948.00

V.Net of profit of other comprehensive i
                                                                   40,084.00
ncome

  (I)Other comprehensive income
items that will not be reclassified into
                                                                   40,084.00
gains/losses in the subsequent
accounting period

1.Re-measurement of defined benefit pl
ans of changes in net debt or net assets

2.Other comprehensive income under th
e equity method investee can not be recl
assified into profit or loss.

(                   II                    )                           0.00



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Other comprehensive income that will b
e reclassified into profit or loss.

1.Other comprehensive income under th
e equity method investee can be reclassi
fied into profit or loss.

2.Gains and losses from changes in fair
value available for sale financial assets

3.Held-to-maturity investments reclassif
ied to gains and losses of available for s
ale financial assets

4.The effective portion of cash flow hed
ges and losses


5.Translation differences in currency fin
ancial statements

             6.Other

VI. Total comprehensive income                                  -629,926.00                          -517,948.00

VII. Earnings per share:

(I)Basic earnings per share

 (II)Diluted earnings per share


5. Cash Flow Statement

                                                                                                          In RMB

                  Items                      Amount in this period                Amount in last period
I.Cash flows from operating activities

Cash received from sales of goods or
                                                               5,569,686.00                         6,501,169.00
rending of services

 Net increase of customer deposits and
capital kept for brother company

Net increase of loans from central bank

Net increase of inter-bank loans from
other financial bodies

Cash received against original insurance
contract

Net cash received from reinsurance
business

Net increase of client deposit and
investment


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                                            深圳中冠纺织印染股份有限公司 2015 年半年度报告全文


Net increase of trade financial asset
disposal

Cash received as interest, processing fee
and commission

Net increase of inter-bank fund received

Net increase of repurchasing business

   Tax returned

Other cash received from business
                                            1,535,143.00                          1,117,687.00
operation

   Sub-total of cash inflow                 7,104,829.00                          7,618,856.00

Cash paid for purchasing of merchandise
and services

Net increase of client trade and advance

Net increase of savings n central bank
and brother company

Cash paid for original contract claim

 Cash paid for interest, processing fee
and commission

 Cash paid for policy dividend

Cash paid to staffs or paid for staffs      1,156,462.00                          1,379,093.00

 Taxes paid                                 1,004,606.00                          1,094,357.00

Other cash paid for business activities     4,031,903.00                          2,437,192.00

Sub-total of cash outflow from business
                                            6,192,971.00                          4,910,642.00
  activities

Cash flow generated by business
                                              911,858.00                          2,708,214.00
operation, net

II.Cash flow generated by investing

Cash received from investment
retrieving

Cash received as investment gains

Net cash retrieved from disposal of fixed
assets, intangible assets, and other
long-term assets

Net cash received from disposal of
subsidiaries or other operational units

Other investment-related cash received

Sub-total of cash inflow due to


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                                              深圳中冠纺织印染股份有限公司 2015 年半年度报告全文


investment activities

Cash paid for construction of
fixed assets, intangible assets                  62,873.00                            64,702.00
and other long-term assets

Cash paid as investment

Net increase of loan against pledge

Net cash received from subsidiaries and
other operational units

Other cash paid for investment activities

Sub-total of cash outflow due to
                                                 62,873.00                            64,702.00
investment activities

Net cash flow generated by investment            -62,873.00                           -64,702.00

III.Cash flow generated by financing

Cash received as investment

Incl: Cash received as investment from
minor shareholders

Cash received as loans

Cash received from bond placing

Other financing –related ash received

Sub-total of cash inflow from financing
activities

Cash to repay debts                                                                 6,291,275.00

Cash paid as dividend, profit, or interests

Incl: Dividend and profit paid by
subsidiaries to minor shareholders

Other cash paid for financing activities

Sub-total of cash outflow due to
                                                                                    6,291,275.00
financing activities

Net cash flow generated by financing                                               -6,291,275.00

IV. Influence of exchange rate
                                                -178,085.00                          393,915.00
alternation on cash and cash equivalents

V.Net increase of cash and cash
                                                670,900.00                         -3,253,848.00
equivalents

Add: balance of cash and cash
                                              58,614,204.00                        63,502,910.00
equivalents at the beginning of term

VI ..Balance of cash and cash
                                              59,285,104.00                        60,249,062.00
equivalents at the end of term


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                                                             深圳中冠纺织印染股份有限公司 2015 年半年度报告全文


6. Cash Flow Statement of the Parent Company

                                                                                                         In RMB

                   Items                    Amount in this period                Amount in last period
I.Cash flows from operating activities

Cash received from sales of goods or
                                                              1,917,380.00                         2,465,163.00
rending of services

 Tax returned
Other cash received from business
                                                              2,058,967.00                          875,492.00
operation
Sub-total of cash inflow                                      3,976,347.00                         3,340,655.00

Cash paid for purchasing of
merchandise and services
Cash paid to staffs or paid for
                                                               781,594.00                           804,933.00
staffs
Taxes paid                                                     662,064.00                           511,942.00

Other cash paid for business activities                       3,715,030.00                         1,657,744.00

Sub-total of cash outflow from business
                                                              5,158,688.00                         2,974,619.00
  activities

Cash flow generated by business
                                                             -1,182,341.00                          366,036.00
operation, net

II.Cash flow generated by investing

Cash received from investment
retrieving

Cash received as investment gains

Net cash retrieved from disposal of fixed
assets, intangible assets, and other
long-term assets

Net cash received from disposal of
subsidiaries or other operational units

Other investment-related cash received

 Sub-total of cash inflow due to
investment activities

Cash paid for construction of
fixed assets, intangible assets
and other long-term assets

     Cash paid as investment

Net cash received from subsidiaries and

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                                                                    深圳中冠纺织印染股份有限公司 2015 年半年度报告全文


other operational units

Other cash paid for investment activities

Sub-total of cash outflow due to
investment activities

Net cash flow generated by investment

III.Cash flow generated by financing

  Cash received as investment

    Cash received as loans

 Cash received from bond placing

Other financing –related ash received

 Sub-total of cash inflow from financing
activities

  Cash to repay debts

Cash paid as dividend, profit, or interests

Other cash paid for financing activities

 Sub-total of cash outflow due to
financing activities

Net cash flow generated by financing

IV. Influence of exchange rate
alternation on cash and cash equivalents

V.Net increase of cash and cash
                                                                    -1,182,341.00                          366,036.00
equivalents

Add: balance of cash and cash
                                                                     8,480,977.00                        10,557,501.00
equivalents at the beginning of term

VI ..Balance of cash and cash
                                                                     7,298,636.00                        10,923,537.00
equivalents at the end of term

7. Consolidated Statement on Change in Owners’ Equity
Amount in this period


                                                                                                               In RMB

                                                              Amount in this period

                                       Owner’s equity Attributable to the Parent Company
                                                                                                              Total
                                  Other Equity                                                       Minor
       Items                                           Less: Other           Surplu Comm                       of
                       Share     instrusment   Capital               Specia                  Attribu shareh
                                                       Shares Compre            s    on risk                 owner
                       Capit prefer            reserve                lized                   table olders’
                                                          in hensive         reserve provisi                   s’
                        al    red Sustai Other s                     reserve                 profit equity
                                                        stock Income            s      on                    equity
                              stock nable


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                                                 深圳中冠纺织印染股份有限公司 2015 年半年度报告全文


                                debt

                       169,14                                               -103,97
I.Balance at the                       39,391,               26,704,                  -1,742,1 129,524
                       2,356.                                               2,125.0
end of last year                       650.00                 791.00                    29.00 ,543.00
                          00                                                     0

Add: Change of
     accounting
     policy

Correcting of
previous errors

Merger of entities
under common
control

          Other

II.Balance at the      169,14                                               -103,97
                                       39,391,               26,704,                  -1,742,1 129,524
beginning of           2,356.                                               2,125.0
                                       650.00                 791.00                    29.00 ,543.00
current year              00                                                     0

III.Changed in the                                                          -572,73           -572,73
current year                                                                   5.00              5.00

(1)Total
                                                                            -572,73           -572,73
comprehensive
                                                                               5.00              5.00
income

(II)Investment or
decreasing of
capital by owners

1.Ordinary Share
s invested by hare
holders

2 . Holders of oth
er equity instrume
nts invested capital

3.Amount of
shares paid and
accounted as
owners’ equity

4.Other

(III)Profit
allotment

1.Providing of
surplus reserves




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                                                                       深圳中冠纺织印染股份有限公司 2015 年半年度报告全文


 2.Providing         of
common            risk
provisions

3.Allotment to the
owners (or
shareholders)

       4.Other

(IV) Internal
transferring of
owners’ equity

1. Capitalizing of
capital reserves (or
to capital shares)

2. Capitalizing of
surplus reserves
(or to capital
shares)

3.Making up
losses by surplus
reserves.

4. Other

(VI Special
reserves

1. Provided this
year

2.Used this term

  (VII)Other

                          169,14                                                                  -104,54
IV. Balance at the                                   39,391,                            26,704,             -1,742,1 128,951
                          2,356.                                                                  4,860.0
end of this term                                      650.00                            791.00                29.00 ,808.00
                             00                                                                        0

Amount in last year
                                                                                                                     In RMB

                                                                  Amount in last year

                                          Owner’s equity Attributable to the Parent Company
                                                                                                                 Total
                                      Other Equity                                                      Minor
        Items                                             Less: Other           Surplu Comm                       of
                          Share     instrusment   Capital               Specia                  Attribu shareh
                                                          Shares Compre            s    on risk                 owner
                          Capit prefer            reserve                lized                   table olders’
                                                             in hensive         reserve provisi                   s’
                           al    red Sustai Other    s                  reserve                 profit equity
                                                           stock Income            s      on                    equity
                                   stock nable


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                                                  深圳中冠纺织印染股份有限公司 2015 年半年度报告全文


                                 debt

                       169,14                                                -108,74
I.Balance at the                        39,217,               26,704,                  -1,738, 124,581
                        2,356.                                               4,698.0
end of last year                         623.00                791.00                  420.00 ,652.00
                           00                                                      0

Add: Change of
     accounting
     policy

Correcting of
previous errors

Merger of entities
under common
control

          Other

II.Balance at the 169,14                                                     -108,74
                                        39,217,               26,704,                  -1,738, 124,581
beginning            of 2,356.                                               4,698.0
                                         623.00                791.00                  420.00 ,652.00
current year               00                                                      0

III.Changed in the                      174,027                              4,772,5 -3,709. 4,942,8
current year                                .00                                73.00       00   91.00

(1)Total
                                                                             4,772,5 -3,709. 4,768,8
comprehensive
                                                                               73.00       00   64.00
income

(II)Investment or
decreasing of
capital by owners

1.Ordinary Share
s invested by hare
holders

2 . Holders of oth
er equity instrume
nts invested capital

3.Allotment to the
owners (or
shareholders)

     4.Other

(IV) Internal
transferring of
owners’ equity

1. Capitalizing of
capital reserves (or
to capital shares)


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                                                                              深圳中冠纺织印染股份有限公司 2015 年半年度报告全文


2. Capitalizing of
surplus reserves
(or to capital
shares)

3.Making up
losses by surplus
reserves.

4. Other

(VI )Special
reserves

1. Provided this
year

2.Used this term

  (VII)Other

IV. Balance at the
end of this term

(V) Special
reserves

1. Provided this
year

2.Used this term

                                                  174,027                                                                              174,027
  (VI)Other
                                                          .00                                                                               .00

                     169,14                                                                                      -103,97
IV. Balance at the                                 39,391,                                      26,704,                        -1,742, 129,524
                     2,356.                                                                                       2,125.0
end of this term                                   650.00                                        791.00                         129.00 ,543.00
                        00                                                                                                0


8.Statement of change in owner’s Equity of the Parent Company

Amount in this period


                                                                                                                                        In RMB

                                                                      Amount in this period

                               Other Equity instrusment
                                                                                        Other
                                                                            Less:                             Common Attribut Total of
       Items          Share                                     Capital                Compreh      Surplus
                               preferre Sustain                            Shares in                            risk          able     owners’
                     Capital                      Other         reserves                ensive     reserves
                               d stock   able                               stock                             provision       profit   equity
                                                                                       Income
                                         debt

I.Balance at the 169,142,                                   31,606,59                                         26,309,28 -100,56 126,495,4


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                                               深圳中冠纺织印染股份有限公司 2015 年半年度报告全文


end of last year         356.00         8.00                                7.00 2,791.0        50.00
                                                                                        0

Add: Change of
     accounting
     policy

Correcting         of
previous errors

         Other

II.Balance at the                                                                  -100,56
                        169,142,   31,606,59                           26,309,28             126,495,4
beginning          of                                                              2,791.0
                         356.00         8.00                                7.00                50.00
current year                                                                            0

III.Changed in the                                                                 -629,92 -629,926.
current year                                                                          6.00         00

(I)Total
                                                                                   -629,92 -629,926.
comprehensive
                                                                                      6.00         00
income

(II) Investment or
decreasing of
capital by owners

1.Ordinary Share
s invested by hareh
olders

2 . Holders of oth
er equity instrume
nts invested capital

3.Amount of
shares paid and
accounted as
owners’ equity

4.Other

(III)Profit
allotment

1.Providing of
surplus reserves

2.Allotment to the
owners (or
shareholders)

3.Other

(IV)Internal
transferring of

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                                                                           深圳中冠纺织印染股份有限公司 2015 年半年度报告全文


owners’ equity

 1. Capitalizing of
capital reserves (or
to capital shares)

 2. Capitalizing of
surplus reserves
(or to capital
shares)

 3.Making up
losses by surplus
reserves.

4. Other

(V) Special
reserves

1. Provided this
year

2.Used this term

(VI)Other

                                                                                                               -101,19
IV. Balance at the 169,142,                                    31,606,59                           26,309,28             125,865,5
                                                                                                               2,717.0
end of this term           356.00                                   8.00                                7.00                24.00
                                                                                                                    0

Amount in last year


                                                                                                                           In RMB



                                                                      Amount in last year

                                    Other Equity instrusment
                                                                             Other           Commo
        Items
                                                                    Less:                             Attribu Total of
                          Share                           Capital          Compreh Surplus n risk
                                  preferre Sustain                 Shares                              table owners’
                          Capital                  Other reserves            ensive reserves provisio
                                  d stock able                    in stock                            profit equity
                                                                            Income              n
                                             debt

I.Balance at the 169,142,                                      31,606,59                           26,309,28 -95,898, 131,159,3
end of last year           356.00                                   8.00                                7.00   901.00       40.00

Add: Change of
       accounting
       policy

Correcting           of
previous errors

Other


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                                                 深圳中冠纺织印染股份有限公司 2015 年半年度报告全文


II.Balance at the
                          169,142,   31,606,59                           26,309,28 -95,898, 131,159,3
beginning            of
                           356.00         8.00                                7.00    901.00     40.00
current year

III.Changed in the                                                                   -4,663,8 -4,663,89
current year                                                                           90.00      0.00

(I)Total
                                                                                     -4,663,8 -4,663,89
comprehensive
                                                                                       90.00      0.00
income

(II) Investment or
decreasing of
capital by owners

1.Ordinary Share
s invested by hareh
olders

2 . Holders of oth
er equity instrume
nts invested capital

3.Amount of
shares paid and
accounted as
owners’ equity

4.Other

(III)Profit
allotment

1.Providing of
surplus reserves

2.Allotment to the
owners (or
shareholders)

3.Other

(IV)Internal
transferring of
owners’ equity

 1. Capitalizing of
capital reserves (or
to capital shares)

 2. Capitalizing of
surplus reserves
(or to capital
shares)


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                                                                          深圳中冠纺织印染股份有限公司 2015 年半年度报告全文


 3.Making up
losses by surplus
reserves.

4. Other

(V) Special
reserves

1. Provided this
year

2.Used this term

(VI)Other

                                                                                                                     -100,56
IV. Balance at the 169,142,                                31,606,59                                    26,309,28              126,495,4
                                                                                                                     2,791.0
end of this term      356.00                                     8.00                                         7.00                50.00
                                                                                                                           0


III.Basic Information of the Company

    Shenzhen Victor Onward Textile Industrial Co., Ltd. (hereinafter referred to as "the Company"), grew out of the Xingnan
    Printing Factory Co., Ltd, founded in 1980, was the first wholly foreign-owned enterprise in Shenzhen. In April 1984, Xingnan
    Printing Factory Co., Ltd was changed into foreign joint venture, and was renamed Shenzhen Victor Onward Textile Industrial
    Co., Ltd. . On November 19, 1991, the Company was reorganized into a joint stock limited company and renamed Shenzhen
    Victor Onward Textile Industrial Co., Ltd. pursuant to the approval of Shenzhen Municipal Government. The Company has got
    the Registration No. of Legal Entity Business License : 440301501131182.


The domestically listed RMB ordinary shares ("A shares, Stock code: 000018" ) and domestically listed foreign investment shares
("B shares ,stock code: 200018") issued by the Company were listed on Shenzhen Stock Exchange in 1992.
After years of bonus issue, rights issue, share capital and the issuance of new shares,By June 30, 2015, 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. Registered Capital:
RMB 169.1424 million. Registration address and headquarter address are 26 Kuipeng Road, Kuiyong Town, Longgang District,
Shenzhen. Union Holdings Co., Ltd. (hereinafter referred to Union Holdings ) holding limit-sale A-shares 43,141,032 shares,
accounting for 25.51% of the total equity, is the controlling shareholder of the company, Union Development Group Co., Ltd.
(hereinafter referred to Union Group)holding circulating A –share 5,681,089 shares, accounting for 3.36% of the total equity, Union
Group holds 31.32% of equity of Union Holdings and has the right to control Union Holdings, thus Union Group is the actual
controller of the Company.
    The Company has got the Registration No. of Legal Entity Business License : 440301501131182.
            Registration address:26 Kuipeng Road, Kuiyong Town, Longgang District, Shenzhen.

2.Business scope:
General business :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.

3.Business nature
 The nature of the company's business and main business activities




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The Company engages in textile printing & Dyeing industry .


There are four entities included in the current consolidated financial statementsthe, including:
                      Name                              Type          Level      Shareholding ratio Percentage of voting
                                                                                      (%)          rights比例(%)
Victor Onward (HK) Co., Ltd                       Wholly owned          II              100                 100
                                                  subsidiary
Shenzhen Nanhua Printing & dyeing Co.,Ltd.        Wholly owned          II             69.44               69.44
                                                  subsidiary
Nanhua Xingye Co., Ltd.                           Wholly owned          II              100                 100
                                                  subsidiary
Shenzhen East Asia Victor Onward Printing & Hoding                      II              51                  51
dyeing Textile Co., Ltd.                          subsidiary


There are four entities included in the current consolidated financial statementsthe, including:
                      Name                              Type          Level      Shareholding ratio Percentage of voting
                                                                                      (%)          rights比例(%)
Victor Onward (HK) Co., Ltd                       Wholly owned          II              100                 100
                                                  subsidiary
Shenzhen Nanhua Printing & dyeing Co.,Ltd.        Wholly owned          II             69.44               69.44
                                                  subsidiary
Nanhua Xingye Co., Ltd.                           Wholly owned          II              100                 100
                                                  subsidiary
Shenzhen East Asia Victor Onward Printing & Hoding                      II              51                  51
dyeing Textile Co., Ltd.                          subsidiary


There reduced one entity included in the current consolidated financial statementsthe compared to the previous period,specifically
1. The subsidiary no longer consolidated, special purpose entities, the entity that loss control of the operating right by way of commis
sion and rental of business.
                     Name                       Reasons of change
Shengzhong Enterprise Co., Ltd.                 On
                                                December 12, 2014, the Registrar of Companies in Hong Kong SAR c
                                                ompleted deregistration, has been dissolved.

For specific information detailed in the entity scope of consolidation change, refer to No. 8-Change in the scope of
consolidation."



IV.Basis for the preparation of financial statements

1.Basis for the preparation
The company is based on continuous operation, according to the actual transactions and events, in accordance with "Accounting Stan
dards for Enterprises - Basic Standards" issued by the Ministry of Finance and specific corporate accounting standards, corporate acc
ounting standards application guide, explained Accounting Standards and other regulations (hereinafter referred to as "Enterprise Acc

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ounting Standards") are recognized and used to measure, on this basis, combined with China Securities Regulatory Commission, "pu
blic offering of securities of the Company disclosure Rule No. 15 - financial Reporting general Provisions" (2014 revised) , the finan
cial report was based on it.


2. Continuous operation.

The Company since 12 months after the reporting period does not exist on the company's continued viability of significant concern e
vents or circumstances.


V. Significant accounting policies and accounting estimates
Specific accounting policies and accounting estimates tips:
1. Statement on the Accounting Standard Followed by the Company
The financial statements prepared by the Company comply with the requirements of corporate accounting standards. They truly and
completely reflect the financial situations, operating results, equity changes and cash flow, and other relevant information of the
company.

2.Fiscal Year
The Company adopts the Gregorian calendar year commencing on January 1 and ending on December 31 as the fiscal year.


3.Standard currency for bookkeeping

The Company takes RMB as the standard currency for bookkeeping.

Its overseas subsidiaries choose the currency of the primary economic environment in which the subsidiary operates as the functional
currency. However, the financial statements should be translated into RMB.
4.The accounting solution of business combinations under the same and different control
(1)     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:
1.These deals are simultaneously entered into effect or under the consideration of mutual influence;
1.     These transactions must be as a whole to achieve a complete business performance;
2.     The occurrence of one deal is depended on that of other transactions;
3.     Single transaction maybe is uneconomical, but it is economical when it is considered together with other transactions.
     (2) Corporate merger under same control
1)      The Individual Financial Statements
If the consideration of the merging enterprise is that the company makes payment in cash, transfers non-cash assets or bears its debts,
and issues equity bonds, it shall, at the date of merger, regard the share of the book value of the owner's equity of the merged party as
the initial cost of the long-term equity investment. The difference between the initial cost of the long-term equity investment and the
payment in cash, non-cash assets transferred as well as the book value of the debts borne by the merging party shall offset against the
capital reserve.
If there exists contingent consideration and estimated liabilities or assets are needed to confirm, the capital reserves (capital premium
or stock premium) shall be adjusted for the difference between the amount of the estimated liabilities or assets and the settlement
amount of subsequent contingent consideration, or the retained earnings shall be adjusted when the capital reserves are insufficient.


For the business combination ultimately realized through multiple transactions and the package deal, all the transactions will be
conducted the accounting treatment as the deal with acquisition of control. For the non-package deal, the capital reserves shall be
adjusted for the difference between the initial investment cost of long-term equity investment and the sum of the book value of
long-term equity investment before merging and that of new consideration payment obtained on the merger date, or the retained


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earnings shall be adjusted if the capital reserves are insufficient to offset. As for the equity investment held before the merger date,
the accounting treatment will not be conducted temporarily for other comprehensive income accounted and confirmed by equity
method, financial ways and measurement criteria until there is the same basis to directly dispose the relevant assets or liabilities by
the invested party in disposal of the investment. Also, the accounting treatment will not be done temporarily for other changes in
owner equity of the net assets accounted and confirmed with the equity method from the invested party except for the net profit or
loss, other compressive income and the profits distribution until the profits and losses of the current period are transferred in disposal
of the investment.
All the direct costs paid by the company for the conduct of business combination, including audit fees, appraisal fees, legal services
fee, etc., should be accounted into current profit and loss at the time incurred. For the transaction expenses directly related to the
merger consideration by the issued equity instruments, the capital reserves shall be offset, the surplus reserves and the undistributed
profits will be successively offset if the capital reserves are not sufficient. At the same time, the transaction expenses will be included
into the initially recognized amount of the debt instruments.
If there is the consolidated financial statements for the merged party, the initial cost of the long-term equity investment is determined
based on the owner's equity of the merged party at the date of merger.
2)   The Consolidated Financial Statements
The assets and liabilities acquired in the business combination by the merger party should be measured as per the book value of
consolidated financial statement of the ultimate control party for the owner equity of the merged party on the merger date.
For the business combination ultimately realized through multiple transactions and the package deal, all the transactions will be
conducted the accounting treatment as the deal with acquisition of control. For the non-package deal, the long-term equity investment
held by the merger party before merging will change if the relevant profit and loss, other comprehensive income and other owner
equity are confirmed between the ultimate control date and the merger date for the merger party and the merged party on the
acquirement date, and shall respectively offset the initial retained incomes or the profits and losses of the current period during the
comparative statement.
If there is different for the accounting policy adopted by the merged parties and the company, the company shall make adjustment
according to its accounting policy at the merger date. On this basis, the company will recognize as per the provisions of Accounting
Standards for Business Enterprises.
  (3). Corporate merger under different controls
 With the merger under the different control, the merger cost is the assets to pay, liabilities incurred or taken and the fair value of the
issued equity securities which a buyer gains the control from the acquiree on the purchase date. In case of any future events defined
in merger contract whose predictable occurrence could influence the merger cost and the related 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 related management
expenses paid by the company for the conduct of business combination should be accounted into current profit and loss at the time
incurred; the transaction charge of equity or debt bonds issued by the company for the consideration of the merging enterprise are
accounted into initial recognized value of the equity or debt bonds.
The company recognizes as goodwill for the difference of the combination costs more than the fair value of the identifiable net assets
obtained from the merged parties, and accounts into current profit and loss for the difference of the combination costs less than the
fair value of the identifiable net assets obtained from the merged parties after checked.
If the enterprise achieves the business merger not under same control through multi-step implementation of transactions, it shall
distinguish the individual financial statements and the incorporated financial statements to conduct the related process of accounting
treatment:
For the non-package deal, the relevant accounting treatment should be respectively conducted for the individual financial statement
and the consolidated financial statements:
(1) For the individual financial statements and the equity investment held before the merger date and accounted by the equity method,
the sum of the book value of equity investment from the purchased party held before the purchase date and the new investment cost
at the purchase date shall be as the initial investment cost of the investment.

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As for the equity investment held before the merger date and confirmed and accounted by the financial ways and measurement
criteria, the sum of the fair value of equity investment and the new investment cost at the merger date shall be as the initial
investment cost at the merger date. The difference between the original fair value of equity and the book value and the variation in
the accumulative fair value originally included into other comprehensive incomes shall recorded into the current investment incomes
at the merger date.
(2)In the consolidation financial statements, the holding acquiree’s equity prior to the date of purchase shall be measured again
with the fair value of equity at the date of acquisition, and the difference between the fair value and the book value is attributed to the
investment income of current period; If the holding acquiree’s equity prior to the date of purchase involved with other composite
income, the other related composite incomes shall be transferred into the investment income of current period at the date of purchase.
5.The method of drawing up the Consolidation financial statements
The company has real control to the subsidiary and special purpose entity which are included in the scope of Consolidation financial
statements.
The accounting policies & accounting periods adopted by all the subsidiaries that have been included into the scope of the
consolidated financial statements should be consistent with those adopted by the company. If the accounting policies & accounting
periods adopted by the subsidiaries are different from those adopted by the company, the company shall make necessary adjustments
according to the accounting policies & accounting periods it adopts when preparing the consolidated financial statements.
After adjusting the long-term equity investments on its subsidiaries according to the equity method, the company shall prepare the
consolidated financial statements based on the financial statements of the company & its subsidiaries, and other related documents.
The influences of the internal transactions between the company & its subsidiaries, and its subsidiaries themselves on 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 consolidated financial statements.
When the amount of loss for the period attributable to the minority shareholders of a subsidiary exceeds the minority shareholders’
portion of the opening balance of owners’ equity of the subsidiary, the excess amount should be still allocated against minority
interest.
In the report period, If the subsidiary is added through the business combination under the same control, the beginning balance of the
consolidated balance sheet shall be adjusted. The incomes, expenses & profits of the subsidiary incurred from the beginning of the
current period to the end of the reporting period shall be included into the consolidated profit statement. The cash flow from the
beginning of the current period to the end of the reporting 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, the beginning balance of
the consolidated balance sheet shall not be adjusted. The incomes, expenses & profits of the subsidiary incurred from the acquisition
date to the end of the reporting period shall be included into the consolidated profit statement. The cash flow from the acquisition
date to the end of the reporting period shall be included into the consolidated cash flow statement.
In the report period, If the company disposes its subsidiary, the incomes, expenses & profits incurred from the beginning of the
subsidiary to the disposal date shall be included into the consolidated profit statement. The cash flow from the beginning of the
subsidiary to the disposal date shall be included into the consolidated cash flow statement.
If an enterprise loses control over a subsidiary company it originally services due to the disposal of some equity investment or for any
other reasons, in consolidated financial statements, the remaining equity shall be re-measured as per the fair value at the date of the
control lost. The difference between the sum of the consideration received on the disposal of equities and the fair value of remaining
equities, and the net assets share continually calculated by the original subsidiary company since the merger date on the basis of the
original stock proportion shall be accounted for as investment income for the period in which control was lost. Other comprehensive
income related to the equity investment that the subsidiary company originally owned shall be included in current investment income
at the date of the control lost.


6.Joint venture arrangements classification and Co-operation accounting treatment

            1.Joint venture arrangements classification
       Under the terms of the structure of the company, the legal form of the joint venture arrangements agreed in the joint venture
      arrangements, other factors such as the relevant facts and circumstances, the joint venture arrangements include co-operation and
      joint ventures.


      The joint venture arrangement unreached by individual entity is divided into common business; joint venture arrangement


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      reached by individual entity usually classified as a joint venture; but there is conclusive evidence that any of the following
      conditions are satisfied and the division of joint venture arrangements in line with the relevant laws and regulations for the
      common business:


     (1)The legal form of a joint venture arrangement shows that the joint venture party have rights and bear obligations in respect of
     the relevant assets and liabilities.


     (2)Contractual terms of the JV agreement arrangements agrees that the joint venture party have rights and bear obligations in
     respect of the relevant assets and liabilities.


     (3)Other relevant facts and circumstances indicate that the joint venture party have rights and bear obligations in respect of the
     relevant assets and liabilities.
     If joint venture parties enjoy almost all outputs associated with the joint venture arrangements, and the settle of the liability
     arrangement continued reliance on joint venture the joint venture party support.


2.The joint operation on Accounting treatment
     The Company confirms that the following items share a common interest in the business associated with the Company, and audit
     in accordance with the provisions of the relevant enterprise accounting standards:


     (1)Confirm individual assets and common assets held based on shareholdings;
     (2)Confirm individual liabilities and shared liabilities held based on shareholdings;
     (3)Confirm the income from the sales revenue of co-operate business output
     (4)Confirm the income from the sales of the co-operate business output based on shareholdings;
     (5)Confirm the individual expenditure and co-operate business cost based on shareholdings.


      The company co-operates to invest or sell assets (excluding the assets constituting the business), before sold to third party, only
confirm the part of transaction gains and losses that attributable to other participants. Assets sold in accordance with "Enterprise
Accounting Standards No. 8 Impairment of Assets" and other provisions, the Company confirmed all the loss.


      The company co-operates to purchase assets (excluding the assets constituting the business), before sold to third party, only
confirm the part of transaction gains and losses that attributable to other participants. Assets acquired in accordance with "Enterprise
Accounting Standards No. 8 Impairment of Assets" and other provisions, the Company confirmed that part of loss based on
shareholdings.


      The Company is not entitled to jointly controlled, if the Company co-operate the relevant assets and bear related liabilities, need
accounting treatment based upon the above principles.
      Otherwise, should be accounted in accordance with the relevant provisions of accounting standards.


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 when preparing 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 services

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The shot exchange rate on the transaction date is adopted as the translation exchange rate to convert to RMB for bookkeeping when
the foreign currency transaction is initially recognized.


On the balance sheet date, the monetary items of foreign currency are translated as per the shot exchange rate on the balance sheet
date, the foreign exchange conversion gap arising from which, except for the balance of exchange arising from special foreign
currency borrowings for the purchase and construction of qualified assets subject to the principle of borrowing costs, shall be
recorded into the profits and losses of the current period. The non-monetary items of foreign currency measured at the historical cost
shall still be translated at the spot exchange rate on the transaction date, of which the amount of functional currency shall not be
changed.
The non-monetary items of foreign currency measured at the fair value shall be translated at the spot exchange rate on the fair value
recognized date, the foreign exchange conversion gap arising from which shall be as the variation in the fair value to be recorded into
the profits and losses of the current period. The balance of exchange arising from the non-monetary items of a sellable cash shall be
recorded into other comprehensive incomes.
    (2)The foreign currency financial statements
The assets in the balance sheet and liabilities items, by using the spot exchange rate on the balance sheet date, all equity projects
except 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 rate
to convert on the transaction date. The converting differences generated by the foreign currency financial statements, and all equity
items in the balance sheet are listed separately.
On disposal of overseas operations, the corresponding difference of foreign currency translation related to the overseas operations
and listed in the owner’s equity in Balance Sheet should be moved from owners’ equity to current profits and losses. On partial
disposal of overseas operations, the partial proportion of difference should also be converted into current profits and losses.Partial
disposal of a foreign operation, is calculated portion of the foreign currency earnings disposal.
9.Financial Instruments
Financial instruments consist of financial assets, financial liabilities and equity instruments.


   (1)Classification of financial tools


The Company divides the financial assets into four categories: financial assets measured at fair value and their variations are
recognized as current gain/loss, including trade financial assets or financial liabilities and recognized directly as financial assets
measured at fair value and their variations are recognized as current gain/loss; Investment hold till expiration; loans and account
receivable; saleable financial assets .The company divides the financial liabilities into two categories: financial liabilities measured at
fair value and their variations are 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/loss
   The financial assets or financial liabilities which are measured at their fair values and of which the variation is recorded into the
current profits and losses, include transactional financial assets or liabilities and the directly designated financial assets or liabilities
which are measured at their fair values and of which the variation included in the current profits and losses.
The transactional financial assets or liabilities refer to the financial assets or liabilities meeting any of the following requirements:
1) The purpose to acquire the financial assets or liabilities is for selling, repurchase or repo of them in the short-term.


2) Forming a part of the identifiable combination of financial instruments which are managed in a centralized way and for which
there are objective evidences proving that the company may manage the combination by way of short-term profit making in the near
feature.
3) Being a derivative financial instrument, excluding the designated derivative instruments which are effective hedging instruments,
or derivative instruments belong to financial guarantee contracts, and the derivative instruments which are connected with the equity
instrument investments for which there is no quotation in the active market and whose fair value cannot be reliably measured, and

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which shall be settled by the delivery of the equity instruments.
Only the financial assets or liabilities meeting any of the following requirements can be designated when they are initially recognized,
as financial assets or financial liabilities as measured at its fair value and of which the variation is recorded into the current profits
and losses:
1) The designation is able to eliminate or obviously reduce the discrepancies in the recognition or measurement of relevant gains or
losses arisen from the different basis of measurement of the financial assets or financial liabilities;


2) The official written documents on risk management or investment strategies have recorded that the combination of the financial
assets, the combination of the financial liabilities, or the combination of the financial assets and liabilities will be managed and
evaluated on the basis of the fair value and reported to the key management personnel.
3) The mixed instrument including one item or multiple items of the embedded derivative instrument, unless the embedded derivative
instrument has not significant change of the cash flow of the mixed instrument or shall not obviously be separated from the relevant
mixed instrument.
4) The mixed instrument which includes the embedded derivative instrument which should be separated but can’t be made an
independent measurement when obtaining or subsequently on the balance sheet date.
The company recognizes the financial assets or financial liabilities which are measured at their fair values and of which the variation
are recorded into the current profits and losses, as the initially recognized amount as per the fair value (deducting the cash dividends
declared but not issued yet or the bond interest matured but not withdrawn yet) when acquiring, and the relevant transaction costs are
recorded into the current profits and losses. At the same time, the acquired interests or cash dividends are recognized as the
investment incomes during the holding period, and the changes in the fair value are recorded into the current profits or losses at the
end of period. When disposing, the balance of the fair value and the initial bookkeeping amount is recognized as the investment
income, and the profits or losses of the variation of the fair value should be adjusted.


(2) The account receivables
The loan receivables arising from the goods for sale or the services provided by the company, the loans of other enterprises including
the receivables held by the company excluding the liability instrument with quotation in the active market, and the contract received
with the purchaser or the agreed price should be as the initially recognized amount. The financing receivables will be recognized
initially as per the current value.
When drawing back or disposing, the difference of the acquired price and the book value of the account receivables shall be recorded
into the current profits or losses.
    (3) The investments of held-to-maturity
The held-to-maturity investment refers to a non-derivative financial asset with a fixed date of maturity, a fixed or determinable
amount of repo price and the company holds for a definite purpose or is able to hold until its maturity.
The company regards the held-to-maturity investment as the initially recognized amount as per the sum of the fair value (deducting
the bond interest matured but not withdrawn yet) and the relevant transaction costs when acquiring. The interest income shall be
recognized and recorded into the investment returns measured on the basis of the post-amortization costs and the actual interest rate
during the holding period. The actual interest rate is confirmed when acquiring and remains unchanged within the predicted term of
existence or within a shorter applicable term. When disposing, the balance of the acquired price and the book value of the investment
shall be recorded into the investment returns.
If the amount of the held-to-maturity investment disposed or re-classified as other financial assets is more than that of the sold or
re-classified held by the company, the surplus of such investment shall be immediately re-classified as a sellable financial asset after
disposed or re-classified. At the re-classification day, the balance between the book value of investment and its fair value shall be
computed into other comprehensive incomes, and when the sellable financial asset is impaired or transferred out when it is
terminated from recognizing, it shall be recorded into the profits and losses of the current period, with the exception of the following:



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1) The date of sale or re-classification is quite near to the maturity date or the repo date of the investment (e.g., with 3 months prior to
maturity) that any change of the market interest rate will produce little impact upon the fair value of the investment.
2) The company has drawn back all the initial principal of the investment by way of repayment according to the provisions of the
contract.


3) The sale or re-classification is caused by any independent event that the company cannot control, predicted not to occur again and
is hard to be reasonably predicted.


 (4) The financial assets available for sale


The sellable financial assets refer to the non-derivative financial assets which are designated as sellable when they are initially
recognized as well as the financial assets other than other financial assets class.
The company regards the sellable financial assets as the initially recognized amount as per the sum of the fair value (deducting the
cash dividends declared but not issued yet or the bond interest matured but not withdrawn yet) and the relevant transaction costs
when acquiring. The acquired interest or cash dividends shall be recognized as the investment returns during the holding period. The
gains or losses arising from the change in the fair value of a sellable financial asset, with the exception of the impairment losses and
the gap arising from foreign exchange conversion of financial cash assets in any foreign currency, shall be directly included in other
comprehensive incomes. When the disposal of the sellable financial assets, the balance between the acquired price and the book
value of the financial assets shall be recorded into the profits and losses of the investment. Meanwhile, the accumulative amount
relevant to the disposed amount arising from the change in the fair value of other comprehensive incomes which are directly included
shall be transferred out and recorded into the profits and losses of the investment.
The equity instrument investment which has no quotation in the active market and whose fair value cannot be reliably measured, and
the derivative financial assets which are connected with the equity instrument and required to settle by the delivery of the equity
instrument shall be measured by costs.


(5) Other financial liabilities
    The originally recognized amount shall be regarded as per the sum of fair value and the relevant transaction costs, and the
subsequent measurement will be made by adopting the post-amortization costs.
3.Recognition and measurement basis of financial asset transposition
When financial asset transposition occurred, the recognition of this particular financial asset is terminated if almost all risks and
rewards attached to the asset have been transferred to the acceptor. If retain all the risks and rewards of ownership of financial assets,
the financial assets can be confirmed.
   (2) Recognition and measurement of financial tools
(1) Financial assets and liabilities measured at fair value and their variations are recognized as current gain/loss
The fair value (after deducting of announced but not distributed cash dividend or due but not obtained bond interests) is recognized
as initial amount when obtained.
    When determine whether the transfer of financial assets meet the conditions of confirmation of the above financial assets, the
principle of substance being more important than form should be adopted. The transfer of financial assets can be divided into overall
transfer and part transfer of financial assets. If the transfer of financial assets meet the conditions of terminating confirmation, the
following the difference of the two amounts will be included in 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 originally accounted 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 the transferred financial
assts, the difference between the confirmed part and the unconfirmed part (in this case, the service assets retained should be deemed
as the part of unconfirmed financial assets), should be amortized in accordance with their relative fair value, and the difference
between the following two amount should be included current profit and loss:
① Book value of the confirmed part;

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 ②All fair values of financial assets and financial liabilities are recognized with reference to the price in the active market.
        If the transfer of financial assets does not meet the conditions of terminating confirmation, the financial assets should be
confirmed again, the prices received will recognized as financial liabilities.
(4).The conditions to stopping the financial liabilities
The obligation of financial liabilities are already cancelled which should be stopped confirming the financial liability or the part of it.
Our company could stop confirming the currently financial liability and begin to confirm the newly financial liability if the loaner
made an agreement that they would assume the new way of financial liability which replace the current one, and make sure the newly
financial liability is totally different from the old one 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 liability which is in new
insertions of contract as the newly financial liability if the current financial liability has been revised.
Stop admitting the balance of value of financial liability and consideration (Including the roll-out of non-cash assets 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 company repurchased the part of
financial liability. And the balance of value of which distributed to the part of stopping admitting and paid (Including the roll-out of
non-cash assets or financial liabilities) which could be consider as current profits and losses.
(5).Recognition basis of financial assets and financial liabilities
The company has adopted financial assets and financial liabilities measured with the fair value to activate financial assets or financial
liabilities of the market, and determined its fair value based on the quotation in an active market; if there no exists financial assets or
financial liabilities to activate the market, the valuation techniques (including the price made in the market transactions which is
recently conducted by each party with willing action and acquaintance of situation, the current fair value, discounted cash flow
analysis and equity option pricing models, etc. of other financial instruments which is substantially similar with the reference) shall
be used to determine its fair value; for the initial or original financial assets or the liabilities assumed, its fair value shall 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 those which 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 depreciation occurs 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;
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; or
8.     the fair value of the equity instrument investment suffers serious or non-temporary drop.


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The special depreciation method of financial assets is as follows:


(1) Depreciation Provision of Financial Assets Available for Sale:
The company shall conduct a separate check to all equity instrument investment available for sale at the balance sheet date, if fair
value of the equity instrument investment at the balance sheet date is less than its initial investment cost beyond 50% (including 50%)
or over one year of duration (including one year), the depreciation occurs; if fair value 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 price fluctuation rate, etc., to judge if there is depreciation of the equity instrument investment.
The “cost” mentioned above shall be recognized on the basis of the balance of the obtained principals and the amortized amount
deducted from the initially obtained costs of the sellable equity instrument investment and the impairment losses originally recorded
into the profits and losses. The “fair value” is recognized based on the closing price of stock exchange at the end of period unless
there exists the restricted period for the sellable equity instrument investment. The sellable equity instrument investment which shall
be recognized according to the compensation amount, which required in the risks due to the equity instrument unable to be sold in the
open market undertaken by the market participant during the specified period, deducted from the closing price of stock exchange at
the end of period.
When the financial assets available for sale (namely, AFS financial assets) are impaired, the company shall reverse and charge the
accumulated losses due to decreases in fair value previously recognized directly in capital to profit or loss for the current period, even if
the financial assets are not derecognized. The reversed accumulated losses are the asset’s initial acquisition costs after deducting
amounts recovered and amortized, current fair value and impairment losses previously recognized in profit or loss.
If, in a subsequent period, the carrying amount of AFS debt instruments investment increases and the increase can be related objectively
to an event occurring after the impairment was recognized, the previously recognized impairment losses are reversed. The reversal shall
be recognized in profit or loss for the current period. The reversal of impairment losses of AFS equity instruments is recognized in
capital reserve. But, impairment losses incurred by investments in an unquoted equity instrument (without a quoted price in an active
market) whose fair value cannot be reliably measured and derivatives that are linked to and must be settled by delivery of investments
in equity instruments are not reversed.
(2) Depreciation Reserves of Held-to-Maturity Investments
If there is objective evidence of depreciation for held-to-maturity investments, the difference between the carrying amount and the
present value of estimated future cash flows is recognized as impairment loss. If there is evidence that its value has recovered after
accrued, the previously recognized impairment loss shall be reversed. The amount of the reversal shall be recognized in profit or loss
for the current period. The reversal shall not result in a carrying amount of the financial asset that exceeds what the amortized cost
would have been had the impairment not been recognized at the date the impairment is reversed.
   (7)Offset of financial asset and financial liability
The financial assets and financial liabilities are respectively shown in the balance sheet and no offset each other. However, the net
amount after offset will be displayed in the balance sheet if the following requirements are simultaneously met:
(1) The company has the legal rights to offset the recognized amount, and the legal rights are performable at present.
 (2) The company plans to settle with net amount or simultaneously sell off the financial assets and pay off the financial liabilities.




10. Accounts receivable


(1)Accounts receivable with material specific amount and specific provisioned bad debt preparation.

Judgment criteria or amount standard of material specific amount
                                                                       Exceeding RMB 1 million (Including)
or amount criteria

Provision method with material specific amount and provision of Conduct the devalue test separately. Set up the bad debt reserve


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specific bad debt preparation                                      according to the shortfall of the present value of expected future
                                                                   cash flows against its carrying amount and record it into the
                                                                   profits & 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 credit risk Group

                                 Name                                       Method for recognition of impairment allowances

Group of account age                                               The age analysis

Group of Related party                                             Other

Deposit group                                                      Other

Accounts on age basis in the portfolio:
√applicable□ not applicable

                     Age                               Rate for receivables(%)                   Rate for other receivables(%)

Within 1 year(Included 1 year)                                                  3.00%                                            3.00%

1-2 years                                                                       10.00%                                           10.00%

2-3 years                                                                       50.00%                                           50.00%

Over 3 years                                                                     100.00%                                     100.00%

Accounts on percentage basis in group:
□ applicable √not applicable
Accounts on other basis in group:
√applicable□ not applicable

                     Age                               Rate for receivables(%)                   Rate for other receivables(%)

Group of Related party                                                            0.00%                                            0.00%

Deposit group                                                                     0.00%                                            0.00%

(3)Account receivable with non-material specific amount but specific bad debt preparation

                                                                   There is objective evidence that the Company will be unable to r
Reason of specific bad debt preparation provision:
                                                                   ecover the money under the original terms of receivables.

                                                                   According to accounts receivable present value to estimated futur
Provision method of bad debt preparation
                                                                   e cash flows lower than its book value. Make provision of the bal
                                                                   ance.


  11.Inventory


(1)Inventory classification
Inventory refers to various assets that are held for sale, the work in process or consumptions during the process of the production for
the                 company                   in                the                   daily                of                     business,
Including raw materials, working materials, processing materials, products, homemade semi-finished products (finished goods), issue


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d commodities.


  (2)Pricing method of stock delivered


     The inventories are initially calculated and accounted in accordance with the actual cost, and the inventory cost includes the

purchase cost, processing cost and the other cost. Stock delivered is measured according to weighted average method.



   (3)Confirmation basis of stock net realizable value and withdrawal method of inventory falling price reserves.
Recognition Basis of Inventories’ Net Realizable Values and Counting & Drawing Method of Obsolete Inventory Reserves: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 selling expenses and related taxes and expenses. The
realizable net value of material inventories for processing is recognized by the estimated selling price of the finished products
deducting estimated cost and selling price and related taxes. The realizable net value of inventories held for execution of sales
contracts or labor contracts is calculated on the basis of contract price. In case inventories exceed contracted amount, the exceeded
part is based on the general selling price.
At end of period, depreciation reserve is made for every individual inventory item. For inventories in large variety with low unit price,
depreciation reserve is made by categories. For inventories related to products series produced and sold within the same region,
having the same or similar end-use purpose, and hard to be differentiated from other items, combined depreciation reserve is made.
When factors that caused deduction of prior inventory value disappear, the deducted amount shall be resumed, and originally accrued
depreciation provision shall be returned. The amount returned is booked into current income statement.


    (4)Inventory system

Inventory system adopts the perpetual inventory method.

    (5)Amortization method of consumption goods with low value and wrap page

 (1) Consumption goods with low value: Consumption goods with low value adopt one time amortization method when used.

Packing:

(2)Wrap page: Wrap page adopts one time amortization when used.

(3)Other turnover material adopts one time amortization when used.


  12. Classified as the assets held for sale
1. Recognition criteria for the classification of the assets held for sale
   The company will recognize the combination parts of the enterprise (or non-current assets) which simultaneously meet the
following requirements, as the components of the assets held for sale.


(1) The components should be immediately sold under the current condition only according to the usual terms of the parts sold.
(2) The enterprise has made resolution for the disposal of the components, the approval of shareholders’ meeting or relevant authority
agency if the shareholder’s approval is requested by the rules.
(3) The enterprise has signed the irrevocable transfer agreement with the transferee.



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(4) The transfer shall be completed within one year.
2. Accounting method for the classification of the assets held for sale
   For the fixed assets held for sale, the company shall adjust the estimated net residual value of the fixed assets in order to make it
reflecting the amount after the disposal costs deducted from the fair value, which doesn’t exceed the original book value of the fixed
assets when the condition of holding for sale is met. The impairment losses of the assets shall be regarded and recorded into the
current profits and losses if the original book value is more than the balance of the estimated net residual value after adjusting. The
fixed assets held for sale which not withdraw the depreciation or amortization shall be measured according to the lesser one between
the balances of the book value or the fair value minus the disposal costs respectively.
The equity investment, intangible assets and other non-current assets held for sale shall be handled as per above mentioned principles,
but excluding the deferred income tax assets, the financial assets regulated in “Accounting Standards for Enterprises No.22 –
Recognition and Measurement of Financial Instruments”, the investment property and the biological assets measured by the fair
value, and the contractual right issued in the insurance contract.


13.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 IV / (V). While, the long term equity investment
     acquired through liability reorganization is booked on the basis of fair value.
(2) The long-term equity investments acquired by other ways
For the long-term equity investment acquired by the cash payment method, the purchase price of actual payment as the initial
investment cost, which includes costs, taxes and other necessary expenses directly relevant to the long-term equity investment
acquired.


For the long-term equity investment acquired by the issuance of the equity securities, the fair value of the issuance of the equity
securities as the initial investment cost. The transaction costs occurred in the issuance or acquirement of own equity instruments can
be deducted from the equity for those that can be directly included in the equity transactions.


The non-monetary asset exchange for a commercial real income and assets or the fair value other assets can be reliably measured, the
initial investment cost should be determined according to long-term equity investment exchanged through the non-monetary asset
exchange, unless there is evidence showing that for the fair value of assets is more reliable; the non-monetary asset exchange which
does not meet the above premises, the book value of the exchanged assets to and the relevant fees and taxes to be paid should be the
initial investment cost of the long-term equity investment. The initial investment cost of the long-term equity investments obtained
through debt restructuring should be determined in accordance with fair value.

2.Follow-up Measurements & Recognitions of Profits or Losses
   (1)Cost method
The company can adopt the cost method to account the long-term equity investment controlled by the invested party and follow the
initial investment cost to calculate the price and add or take back the investment and adjust the costs of long-term equity investment.


Except for the price of actual payment in acquiring investment or the cash dividends or profits declared but not issued yet included in
the consideration, the company shall recognize the cash dividends or profits delivered by the invested party as the current investment
returns.
(2) The equity method
The company shall adopt the equity method to account the long-term equity investment of the joint ventures and the cooperative

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enterprises, and use the measurement of the fair value and record the changes into the profits and losses for the parts of the equity
investment of the joint ventures indirectly held by risk investment agency, mutual fund, trust company or other similar bodies
including the investment-link-insurance funds.


For the initial investment cost of the long-term equity investment is more than the balance of the shares of the fair value of the
identifiable net assets from the invested party in investment, the initial investment cost of the long-term equity investment shouldn’t
be adjusted. If less, recorded into the current profits and losses.


The investment returns and other comprehensive incomes will be respectively recognized as per the shares of the net profits and
losses and other comprehensive returns realized by those shared and undertaken invested parties after the company acquires the
long-term equity investment, and the book value of long-term equity investment shall be adjusted simultaneously. Also, the shared
parts shall be calculated according to the profits and cash dividends delivered by the invested party, and the book value of long-term
equity investment shall be reduced correspondingly. For other changes in owner’s equity of the invested parity except for net profits
and losses, other comprehensive returns and profits distribution, the book value of long-term equity investment shall be adjusted and
the owner’s equity should be recorded into.
The shared portions of the net profits and losses of the invested party shall be recognized by the company after the net profits of the
invested party are adjusted based on the fair value of the identifiable assets from the invested party when acquiring the investment.
Also, the profits and losses of investment are recognized on the basis of the offset of the shared proportion for the internal transaction
profits and losses issued but not realized yet between the company and the joint venture and the cooperation enterprises.


The following steps should be taken when the company confirms to share the losses of the invested party: First, offset the book value
of the long-term equity investment. Then, offset the book value of the long-term receivables after recognize the investment losses
based on the book value of long-term equity of the net investment from the invested party if the book value of the long-term equity
investment is insufficient to offset. Last, recognize the estimated loads as per the estimated liability undertaken and record into the
current investment losses if additional liability is still needed to undertake based on the provisions of investment contract or
agreement after above-mentioned steps.
For the profits realized by the invested party during the future period, the company shall handle based on the opposite steps after
deducting the unconfirmed losses undertaken, and resume the recognized investment returns after reduce the confirmed book balance
of estimated liabilities and resume other book values of long-term rights and investments of the net investment from the invested
party.
  3. Transformation of accounting method for the long-term equity investment
(1) The fair value measurement transformed to the equity method
For the equity investments originally held by the company and having non-control, joint control or major impact on the invested
party through the accounting treatment as per the confirmation of financial instrument and the measurement criterion, which can have
significant impact or haven’t control on the invested party due to the additional investment, the sum of the fair value of the equity
investment originally held and the new investment costs based on the recognition of “Accounting Standards for Enterprises No.22 –
Recognition and Measurement of Financial Instruments” shall be regarded as the initial investment costs accounted by the equity
method.
If the equity investment held originally can be classified as the financial assets for sale, the difference between the fair value and the
book value, and the variation in the accumulative fair value of other comprehensive returns recorded originally will be transferred
into the current profits and losses accounted by the equity method.


If the initial investment costs accounted by the equity method is less than the difference between the portions of the fair value of the
identifiable net assets shared from the invested party on the additional investment date calculated and recognized as per the new



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shareholding proportion after the additional investment, the book value of long-term equity investment should be adjusted and which
shall be recorded into the current nonbusiness incomes.
(2) The fair value measurement or the equity method transformed to the cost method
  For the equity investments originally held by the company and having non-control, joint control or major impact on the invested
party through the accounting treatment as per the confirmation of financial instrument and the measurement criterion, or the
long-term equity investments in the joint ventures and the cooperative enterprises held originally, which can have control on the
invested party under non-common control due to the additional investment, the sum of the book value of the equity investment
originally held and the new investment costs in preparation of individual financial statement shall be regarded as the initial
investment costs accounted by the cost method.
Other comprehensive returns accounted and recognized for the equity investment held prior to the purchase date by adopting the
equity method, should be conducted the accounting treatment according to the same basis of relevant assets or liabilities directly
disposed by the invested party.
If the equity investment held before the purchase date is conducted the accounting treatment according to the relevant provisions of
“Accounting Standards for Enterprises No.22 – Recognition and Measurement of Financial Instruments”, the variation in the
accumulative fair value of other comprehensive returns recorded originally shall be transferred to the current profits and losses
accounted by the cost method.
(3) The equity method transformed to the fair value measurement


   If the company loses the joint control or major impact on the invested party due to disposal of part of equity investments, the
remaining equity after disposed should be accounted according to “Accounting Standards for Enterprises No.22 – Recognition and
Measurement of Financial Instruments”, and the balance between the fair value and the book value shall be recorded into the current
profits and losses on the date of joint control or major impact lost.
Other comprehensive returns accounted and recognized for the original equity investment by adopting the equity method, should be
conducted the accounting treatment according to the same basis of relevant assets or liabilities directly disposed by the invested party
when stop to account by the equity method.
(4).The cost method transforming to the equity method
   If the company loses the control of the invested party due to disposal of part of equity investments, and the remaining equity after
disposed can have joint control or major impact on the invested party in preparation of individual financial statement, the equity
method shall be adopted to conduct accounting and the remaining equity shall be regarded to use the equity method to account and
adjust when acquiring.
(5) The cost method transforming to the fair value measurement
  If the company loses the control of the invested party due to disposal of part of equity investments, and the remaining equity after
disposed can’t have joint control or major impact on the invested party in preparation of individual financial statement, the relevant
provisions of “Accounting Standards for Enterprises No.22 – Recognition and Measurement of Financial Instruments” should be
followed to conduct the accounting treatment, and the balance between the fair value and the book value shall be recorded into the
current profits and losses on the date of control lost.
4. Disposal of the long-term equity investment
  The difference between the book value and the price acquired actually in disposal of the long-term equity investment should be
recorded into the current profits and losses. The long-term equity investment accounted by the equity method shall be conducted the
accounting treatment of part of other original comprehensive returns as per the corresponding proportion on the same basis of the
relevant assets or liabilities directly disposed by the invested party when the disposal of the investment.
If the following one or multiply requirements are met for all transaction terms, conditions and economic impact in disposal of the
equity investment of subsidiary, the multiply transactions will be regarded as the package deal to conduct the accounting treatment:
(1) These transactions are signed simultaneously or after the consideration of the influence each other.



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(2) These transactions should be as a whole to achieve a complete business result.
(3) One transaction occurs depending on the issuance of at least other one transaction.
(4) It is uneconomic for one transaction, but economic with other transactions.
For the control on the original subsidiary lost due to disposal of part of the equity investment or other reasons and the non-package
deal, the relevant accounting treatment should be respectively conducted for the individual financial statement and the consolidated
financial statements:
(1) In the individual financial statement, the difference between the book value and the price acquired actually in disposal of the
equity shall be recorded into the current profits and losses. If the remaining equity after disposed can have joint control or major
impact on the invested party, the equity method shall be adopted to conduct accounting and the remaining equity shall be regarded to
use the equity method to account and adjust when acquiring. If the remaining equity after disposed can’t have joint control or major
impact on the invested party, the relevant provisions of “Accounting Standards for Enterprises No.22 – Recognition and
Measurement of Financial Instruments” should be followed to conduct the accounting treatment, and the balance between the fair
value and the book value shall be recorded into the current profits and losses on the date of control lost.
(2) In the consolidated financial statements, for all the transactions before the control on subsidiary lost, and the balance between the
disposal price and the long-term equity investment respectively minus the net assets from the purchase date or the combination date
of subsidiary, the capital reserves (stock premium) shall be adjusted, or the retained earnings shall be adjusted when the capital
reserves are insufficient. When the control on the subsidiary lost, the remaining equity should be measured again according to the fair
value on the control lost date. The difference of the consideration acquired by the disposal of equity and the fair value of the surplus
equity minus the net assets portion of the original subsidiary calculated from the purchase date a per the original stock proportion
shall be recorded into the current investment income after the control lost and offset the business reputation. Other comprehensive
returns relevant to the original subsidiary shares investment shall be transferred into the current investment returns when the control
lost.
For the package deal for all the transactions in disposal of the equity investment till the control lost, all the transactions will be
conducted the accounting treatment as a deal to dispose and the relevant accounting treatment should be respectively conducted for
the individual financial statement and the consolidated financial statements:
(1) In the individual financial statement, all the differences between the book value of the long-term equity investment of the prices
disposed and the equity disposed before the control lost shall be recognized as other comprehensive incomes and recorded into the
current profits and losses in the control lost.
 (2) In consolidated financial statement, all the differences between the net assets portions of subsidiary of the prices disposed and
the investment disposed before the control lost shall be recognized as other comprehensive incomes and recorded into the current
profits and losses in the control lost.
5. Criteria of the judgment of joint control and significant impact
   If the company controls an arrangement together with other parties according to the relevant agreement, the activity
decision-making with significant impact for the arrangement should be achieved after the unanimous agreement gained from the
control parties, which is regarded as the joint control of one arrangement with other parties and the arrangement is belong to the
cooperative arrangement.
The cooperative arrangement achieved by the independent body which should be as the cooperative enterprises and the equity
method shall be adopted to account according to the relevant agreement to judge when the company has rights to the net assets of the
independent body. If hasn’t rights, the independent body shall be as the joint operation, the company shall recognize the items related
to the benefit portions of joint operation and the accounting treatment should be conducted according to the relevant provisions of
accounting standards for enterprises.
The significant impact refers to the investor has rights to participate in decision-making for the finance and operation policy of the
invested party, but can’t control or jointly control the setup of these policies with other parties. The company has made judgment of
significant impact on the invested party through the following one or multiply conditions and under comprehensive consideration of



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all facts and status.
(1) There are representatives in the board of Directors or equivalent authorities of the invested party.
(2) Participate in the setup process of finance and operation policies of the invested party.
(3) There is major transactions occurred among the invested parties.
(4) Dispatch the management to the invested party.
(5) Offer the key technical data to the invested party.


14. Investment real estate
The measurement mode of investment property
The measurement by the cost method
Depreciation or amortization method

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 the purchase price,
related taxes and fees and other expenses which can be directly attributable to the assets; the costs of investment real estate self
constructed include the necessary expenses to construct the asset to reach the predicted use state.

The Group adopts the cost method to conduct follow-up measurement on investment real estates are accounted devaluations and

amortized. The expected service life, net residual rate and value depreciation rates of investment real estate are as follows:

                 Type                      Expected useful           Estimated residual     Annual depreciation rate(%)

                                             life(Year)                 value rate

                                                  20-50                        0%                          2%-5%
Real estate in

 Hongkong

                                                  20-30                       10%                          3%-4.5%
Real estate in

China


If the investment real estate is changed to self use, since the date of change, investment real estate shall be converted into fixed assets

or intangible assets. The function of self-use real estate is to earn rent or capital appreciation, then since the date of change, the fixed

assets or intangible assets shall be converted into investment real estate. When the conversion happens, the book value before the

conversion will be the book value after the conversion.
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 are expected from its
disposal, terminate the confirmation of the investment real estate. Disposal income of investment property for sale, transfer, disposal
of scrap or being destroyed is charged to current profit or loss after deducting its book value and related taxes.
Basis of the fair value measurement chosen
15.Fixed assets


(1)Confirmation conditions
    Fixed 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 following conditions are satisfied:Financial

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benefits attached to the fixed asset is possibly inflowing to the Company;(2) The cost of the fixed asset can be reliable measured.
        The fixed assets of the company shall be initially measured by costs. Of which, the fixed assets costs purchased include
purchase price, import duties, other relevant taxes and other expenses that make the fixed assets can be used. The costs of
self-constructed fixed assets are the expenses arisen from the construction of the assets reaching the expected use status. The fixed
assets invested by the investors shall be recorded into the accounting value according to the value agreed in the investment contract
or agreement, but the unfair value agreed in the contract or agreement shall be bookkept as per the fair value. If the price for purchase
of the fixed assets is beyond the usual credit term and delay in payment, and there actually is financial, the cost of fixed assets shall
be recognized based on the present value of purchase price. The difference between the price paid actually and the present value of
purchase price shall be recorded into the current profits and losses within the credit period except for the capitalization granted.


(2)Depreciation method



                                                               Evpected useful      Estinated residual value   Annual depreciation rat
            Type              Depreciation method
                                                                    life(Year)              rate                              e(%)

Real estate in
                           Straight-line method        20-50                       0%                          2%-5%
 Hongkong

Real estate in
                           Straight-line method        20-30                       10%                         3%-4.5%
China
Machinery and
                           Straight-line method        5-14                        10%                         6%-18%
equipment

Transportation
                           Straight-line method        4-5                         10%                         18%-22.5%
equipment

Office equipment and
                           Straight-line method        5                           10%                         18%
other

1) The depreciation of the fixed assets
    The fixed assets depreciation should be withdrawn within the expected service life according to the recorded value minus the
estimated net residual value. For the fixed assets after the impairment provision withdrawn, the amount of depreciation shall be
recognized according to the book value after the impairment provision deducted and the usable service life in the future.
The company determines the service life and the estimated net residual value of the fixed assets according to the nature and use of the
fixed assets, reviews the service life, the estimated net residual value and depreciation method of the fixed assets at the end of the
year, and makes the corresponding adjustment if it is different to the original estimated value.
2) The subsequent expenditure of the fixed assets
  The subsequent expenditure relevant to the fixed assets shall be recorded into the costs of the fixed assets if the recognition
requirements of the fixed assets are met. If not met, recorded into the current profits and losses when occurring.
 3) The disposal of the fixed assets
 The fixed assets shall be derecognized when the assets are disposed and can be used or there is no economic benefit from the
disposal. The amount of the book value and the relevant taxes deducted from the disposal incomes of the fixed assets sold,
transferred, scraped or damaged.


(2)Cognizance evidence and pricing method of financial leasing fixed assets
The fixed assets acquired by the company in line with the following one or several criteria shall be recognized as the fixed assets
acquired under finance leases: (1) at the expiration of the lease, the ownership of the leased assets shall be transferred to the company.

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(2) the company has the option to purchase the leased assets, the purchase price is expected be far lower than the fair value of the
leased assets under the implementation of option right, so that it can be reasonably determined that the company shall exercise the
option on the acquisition date. (3) the lease term is the majority for the leased assets even if the ownership no transferred. (4) the
present value of the minimum lease payments of the company almost is equal to the fair value of the leased assets on the acquisition
date. (5) For the special nature of the leased assets, only the company can use if no major modification made. For the fixed assets
acquired under finance leases, the company takes less of the fair value of the leased asset on the acquisition date and the present
value of the minimum lease payments as recorded value. Also, the minimum lease payments are accounted as the recorded value for
the long-term payables, and the difference are as the unconfirmed financing fees. The initial direct expenses, such as commission
charge, attorney fees, travel expenses and stamp duty attributable to the lease item occurred in the process of the lease negotiation
and the signature of lease contract, shall be recorded into the leased assets value. The unrecognized financing charges in each period
during the lease term are amortized by effective interest method. The company shall adopt the depreciation policy in 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 depreciation will be recognized in the use life of lease assets. If can’t be
confirmed, the shorter period between the lease term and the use life of lease assets will be recognized as the depreciation.


  16.Projects under construction


(1)Categories of projects under construction


The company shall measure the self-constructed constructions in progress at the actual cost, which comprises those expenditures
necessarily incurred for bringing the asset to working condition for its intended use, including materials costs, labor costs, relevant
taxes paid, capitalized loans, indirect expense for apportion, etc.. The constructions in progress of the company should be accounted
by the project classification.




(2)Standard and timing for transferring of projects under construction to fixed assets


All the expenditures that bring the construction in process to the expected condition for use shall be the credit value of the fixed asset.
If the fixed asset construction in process has already reached the expected condition for use, but hasn’t been made the final account;
it shall be carried forward to a fixed asset according to its estimated value based on the budget, cost or actual cost of the construction
starting from the date when it reaches the expected condition for use, and the fixed asset shall be depreciated according to the
company’s depreciation policy for fixed assets. After the final account has been made, the original provisional estimated value shall
be adjusted according to the actual cost, but the depreciation which has originally been counted & drawn shall not be adjusted.



     17.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 asset satisfying the

conditions of capitalizing, are capitalized and accounted as cost of related asset. Other borrowing expenses are recognized as

expenses according to the occurred amount, and accounted into gain/loss of current term.
     The assets meeting capital conditions refer to the fixed assets, investment real estates and inventories which are 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:


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1. Expenditures on assets have taken place, asset expenditures include the assets used to construct or produce the assets which meet
the capitalization conditions, and expend by cash or transferring non-cash assets or bearing interest 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 costs
The 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 Loan costs should stop
capitalization.
When the construction or production meets the conditions of capitalization and can be used individually, the capitalization 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 ready for use or sale
during the continuing construction of other parts, but it can not be used or sold until the asset is entirely completed, the capitalization
of the borrowing costs shall be ceased when the asset is completed entirely.
.3 Capitalization Suspension Period
 Where the acquisition and construction or production of a qualified asset is interrupted abnormally and the interruption period lasts
for more than 3 months, the capitalization of the borrowing costs shall be suspended. If the interruption is a necessary step for
making the qualified asset under acquisition and construction or production ready for the intended use or sale, the capitalization of
the borrowing costs shall continue. The borrowing costs incurred during such period shall be recorded into the profits & losses at the
current period, till the acquisition and construction or production of the asset restarts.

      4. Calculation of the amount of capitalization of Loan costs

Interest expense due to specialized Loan and its auxiliary expenses shall be capitalized before the asset which satisfies the

capitalizing conditions reaches its useable or saleable status.

     Interest amount of common Loan to be capitalized equals to accumulated asset expense less weighted average 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 to actual interests in each
accounting period. The interest amount should be adjusted in each period.



18..Intangible assets

(1) Valuation method, service life and impairment test
The intangible assets refer to the identifiable non-monetary assets without physical substance owned or controlled by the company,
including software, land use rights, etc.
   1.The initial measurement

     The cost of the purchased intangible assets includes its buying price, relevant tax and the othe expenses that are directly
attributed to this assets meeting its predetermined objective and other expenses that occur. The buying price of intangible assets is
over the deferred payment under normal credit conditions, which has the nature of financing materially, the cost of intangible assets
is determined on the basis of the present value of its buying price.
     We acquire the mortgaged intangible assets from debtors through debt restructuring and determine the entry value on the basis


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of the fair value of the intangible assets,we have the balance      between the book value of debt restructuring 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 the basis of the fair
value of the assets exchanged out if the exchange of non-monetary assets has commercial nature and the assets exchanged into or
out can be reliably measured, unless there is authentic evidence indicating that the fair value of assets exchanged into are more
reliable; if the non-monetary assets that cannot meet the above prerequisite use the book value of the assets exchanged out and
relevant taxes payable as the cost of the non-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 company is determined by
the book value of the merged party;the entry value of the intangible assets acquired by the absorption 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 the assets, cost of service,
registration fees, other patent used in developing, amortization of concession and interest charges meeting the capitalization
conditions and othe direct costs that occur before the intangible assets meeting the predetermined objective.
     (2)Subsequent measurement


The Company acquired intangible assets at the time of analysis to determine its life, is divided into a finite useful life and intangible a
ssets with indefinite useful life.

The intangible assets that have limited serviceable life are amortized by the straight-line method during the period when the assets
can bring about economic interests;The intangible assets are deemed as uncertain serviceable life and are not amortized if it is
impossible to expect the period when the assets could bring about economic interests.
(2) Accounting policy of expenditure for internal research and development
1. The specific standards of the classification of research and development stages of internal R&D projects of the company
Research stage: the stage of the creative and planned investigation and research activities that is to acquire and understand new
scientific or technological knowledge.
Development stage: the stage that the research achievement or other knowledge are applied in some plans or designs for the
production of newly or substantially improved materials, devices, products and other activities before the commercial production or
usage.
The expenditure of internal research and development projects in the research stage shall be recorded into the current profits and
losses when occurring.
2. The special standards of the conformation of capitalization for the expenditure in development stage
  The expenditures of internal research and development projects in the development stage shall be recognized as the intangible
assets when the following requirements are simultaneously met:
(1) Complete the intangible assets to make it usable or for sale and have the technical feasibility.
(2) Have the intention to complete the intangible assets for using or sales.
(3) The mode for the economic interest produced by the intangible assets includes the evidence of there being the market for the
products produced by the intangible assets or for the intangible assets by self, and the usefulness for the assets used internal.
(4) There are sufficient technical, financial resources and other resources for support to complete the development of the intangible
assets and there is ability to use or sell the intangible assets.
(5) The expenditure belong to the intangible assets in the development stage can be reliably measured.
The expenditure in the development stage but above-mentioned requirements not met, shall be recorded into the current profits and
losses when occurring. The development expenses recorded into the profits and losses during previous period shall not be recognized
again in the future period. The capitalized expenses in the development stage are shown as the development costs on the balance
sheet, and shall be transferred to the intangible assets from the date that the project reaching to the intended use.
19. Impairment of the long-term assets


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The company makes judgment of the long-term assets if there exists the possible impairment at the balance sheet date. If there is the
impairment for the long-term assets, the recoverable amount can be estimated based on the individual asset. If it is difficult to
estimate the recoverable amount of the individual asset, the recoverable amount of asset group shall be recognized on the basis of the
asset group which the asset is belong to.
The estimation of the recoverable amount of assets should be recognized according to the higher one between the net amount of the
fair value minus the disposal costs and the present value of the cash flow of assets expected in the future.
The measurement results of the recoverable amount show that the book value of long-term assets shall be reduced to the recoverable
amount and the reduced amount shall be recognized as the impairment loss of assets and recorded into the current profits and losses,
and the impairment provisions of the relevant assets are withdrawn if the recoverable amount of the long-term assets is less than the
book value. The impairment loss of assets after recognized shouldn’t be reversed in the future accounting period.
After the recognition of the assets impairment loss, the depreciation or amortization costs of the impairment assets should be made
adjustment accordingly in the future period in order to make the assets to systematically amortize the book value of the assets after
adjusted within the remaining service life (the estimated residual value deducted).
The intangible assets with indefinite goodwill and service life due to the combination of enterprise, shall be conducted the
impairment test every year regardless of the impairment.
The impairment test shall be conducted for the goodwill combining with the relevant asset group or the asset group combination.
When the relevant asset group or the asset group combination including the goodwill are conducted the impairment test, the
impairment test should be firstly conducted for the asset group without the goodwill or the asset group combination, the recoverable
amount shall be calculated and the corresponding impairment loss shall be recognized by comparison with the relevant book value if
there exists the impairment for the asset group relevant to the goodwill or the asset group combination. Then the impairment test
should be conducted for the asset group with the goodwill or the asset group combination, the impairment loss of the goodwill shall
be recognized if the recoverable amount of the relevant asset group or the asset group combination is less than the book value by
comparison of the book value of these relevant asset group or the asset group combination (including the book value of the goodwill
amortized) with the recoverable amount.



20.Long-term amortizable expenses

The long-term unamortized expense refers to all the expenses that occurred and undertaken in the current period or with the
amortization limit of more than 1 year for the company. The long-term unamortized expense shall be amortized within the benefit
period according to the direct method.
21. Remuneration
(1) Accounting methods for short-term compensation
Remuneration refers to all kinds of rewards or compensation that the Company gives to get in return for the services its employees
provide or employment termination. It includes short-term compensation, post-employment benefits, demission benefits and other
long-term employee benefits.
Short-term compensation refers to employees’ payroll that need be paid within the following twelve months after the financial year
services are provided, excluding the post-employment and demission benefits. During the accounting year the employees provide
their services, payroll payable is recognized as liabilities and counted in the costs and expenses of the assets benefiting from
employees’ services.
(2) Accounting methods for post-employment benefits
Post-employment benefits refer to the compensation and benefits that the Company gives to get in return for employees’ services for
their retirement or employment termination, excluding short-term compensation and demission benefits. It falls into two categories,
defined contribution plans and defined benefit plans.
Defined contribution plans are mainly the schemes of pension, unemployment insurance etc. organized and implemented by local


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labor and social securities authorities. During the accounting period employees provide their services, payable amounts are calculated
according to the plans and recognized as liabilities and counted in current profit and loss or costs of related assets.
The Company does not have other obligations than paying off the above benefits during specified periods.
(3) Accounting methods for demission benefits
The Company offers compensation to terminate employment with its employees before it expires or encourage them to accept lay-off.
Such compensation is demission benefits and counted in current profit and loss.
(4) Accounting methods for other long-term employee benefits
It is all other employee benefits excluding short-term compensation, post-employment benefits and demission benefits.


22..Predicted liabilities


(1)Recognition of Predicted liabilities


The liabilities related to contingencies and meeting the following conditions are reflected as estimated 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, uncertainty and time value of
currency and other factors related to contingent matters. When the influence of time value of money is significant, the optimum
estimates shall be determined by discounting relevant future cash outflow
The 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 lower limit of amount within the range.
If there no exits a continuous range (or area) for the necessary expenses or the different result possibility within the range even if
there is a continuous range, and if there are contingent matters related to individual item, the optimum estimate is recognized
according to the amount that has most possibility to occur. If there are contingent matters involving multiple items, the optimum
estimate is counted and confirmed as per all the possible results and associated probabilities.
It can be recognized separately as assets when estimated liabilities are paid by the Company but can be fully or partly compensated
by a third party and the compensation mostly sure can be received, which does not exceed the book value of estimated liabilities.
23. Share-based compensation
     1. Share-based compensation types
  Share-based compensation divides into equity settlement and cash settlement.
     2. Determining methods for fair value of equity instruments
The fair value of equity instruments such as options granted and existing in the active market can be determined by reference to the
quotations in the active market. Otherwise, it is determined by option pricing model, which should take into account the following
factors: (1) exercise prices of options; (2) validity of options; (3) current prices of underlying shares; (4) estimated volatility of share
prices; (5) estimated dividends; (6) risk-free interest rate of options within validity.
When determining the equity instruments fair value of the granted date, the Company considers the impact of the market conditions
and non-vesting conditions as specified in Share-based compensation agreements. If there are non-vesting conditions and employees
or any other parties satisfy all non-market vesting conditions (for example, service period), Share-based compensation can be


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recognized as costs and expenses for received services.
     3. Basis of best exercisable equity instruments estimate
Every balance sheet day during the vesting period, the Company makes best estimate according to the most updated number of
employees that are eligible to exercise their options and adjusts the quantity of exercisable equity instruments. On vesting dates, the
final estimated quantity of exercisable equity instruments is consistent with the actual exercisable quantity.
     4. Accounting treatment for implementation, amendment and termination of Share-based compensation
   Share-based compensation by equity settlement is calculated according to the fair value of granted equity instruments. The
Company can count it in costs and expenses by reference to the fair value of the granted date and increase capital reserve accordingly
if it can be exercised immediately after being granted. If it cannot be exercised till services or performance meets the conditions
during the vesting period, then on every balance sheet date during the vesting period, received services can be counted in related
costs or expenses and capital reserve by reference to best estimates of exercisable equity instruments quantity and its fair value of the
granted date. No adjustments will be made on already recognized costs or expenses and ownership equity after vesting dates.
For share-based compensation by cash settlement, the fair value is measured by reference to that of the liabilities determined based
the shares or other equity instruments the Company undertakes. The Company can count it as costs and expenses by reference to the
fair value of the granted date and increase liabilities accordingly if it can be exercised immediately after being granted. If it cannot be
exercised till services or performance meets the conditions during the vesting period, then on every balance sheet date during the
vesting period, received services can be counted in related costs or expenses and liabilities by reference to best estimates of
exercisable equity instruments quantity and the fair value of the liabilities the Company undertakes. On every balance sheet date and
settlement date before the related liabilities are cleared, the fair value is re-calculated and the changes are counted in current profit
and loss.
     5. Equity instruments changes and accounting treatment
  If the granted equity instruments are cancelled during the vesting period, the Company treats it as accelerated vesting and counts in
current profit and loss the amounts that should be recognized during the rest vesting period and recognizes capital reserve
accordingly at the same time. If employees or other parties can choose but fail to satisfy non-vesting conditions during the vesting
period, the Company sees this as cancellation of granted equity instruments.
24. Preferred shares, perpetual capital securities and other financial instruments
Upon initial recognition, the Company categorizes such financial instruments or their components into financial liabilities or equity
instruments in accordance with the financial instruments principles and by reference to the contract terms and the reflected economic
substance of such financial instruments as the issued preferred shares and perpetual capital securities as well as the definitions:
1. Issued financial instruments that meet one of the following conditions are financial liabilities:
        (1) Contract obligations to pay cash or other financial assets;
      (2) Contract obligations to exchange financial assets or liabilities with other parties under unfavorable conditions;
      (3) Derivative instrument contracts that the Company’s own equity instruments must or can be used for settlement and the
Company would deliver its own variable equity instruments;
      (4) Derivative instrument contracts that the Company’s own equity instruments must or can be used for settlement, excluding
those that a fixed quantity of its own equity instruments are used in exchange of cash or other financial assets.
     2. Equity instruments must meet all the following conditions:
            (1) Contract obligations excluding cash or other financial assets payment to others, or unfavorable exchange of financial
assets or liabilities with others;
      (3) Derivative instrument contract obligations that the Company’s own equity instruments must or can be used for settlement,
which does not include settlement by delivering variable equity instruments of its own as well as those that a fixed quantity of its
own equity instruments are used in exchange of cash or other financial assets.
         3. Accounting methods
      As equity instruments, the interest expenses or dividends should be distributed as profit, and its buy-back and write-off should


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be treated as changes of equity, from which such transaction expenses such as handling charges and commission are deducted;
As financial liabilities, the interest expenses or dividends should be handled as borrowing expenses, and the income or losses arising
from its buy-back or redemption should be counted in current profit and loss while the transaction expenses like handling charges and
commission being counted in the initial measurement amount of the issued instruments.



25.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, the Group does not keep
the management right relating to ownership and does not implement effective control on the commodities sold out, the income
amount can be reliably measured, and the related economic benefit will possibly flow into the enterprise, and when the related costs
may happen or had happened can be measured reliably, the realization of the commodity sold out should be confirmed.
Payments on deferred terms are of financing nature in fact and thus, should be recognized at fair value as revenues.


  (2)Incomes from transferring asset use right


The economic benefits related to the transactions are likely to flow into the enterprise, if the revenue amount can be 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.


     As main revenue of the Company, lease income is recognized according to the receivable dates and amounts as specified in
contracts or agreements.
     (3) Assets transfers with buy-back conditions
  If the Company signs buy-back agreement with the purchase party when selling products or transferring other assets, it should
make a judgment whether the product sale satisfies revenue recognition conditions. As buy-back after sale is financing transaction,
the Company does not recognize sales revenue when delivering products or assets. During buy-back, interests are put aside and
counted in financial expenses based on the differences between buy-back and sales prices.


26.Governmental subsidy
(1)Basis and accounting methods for assets related government subsidies
Assets related government subsidies refer to the government subsidies that are used to purchase or build assets or form long-term
assets in other ways.
At the end of reporting periods, government subsidies are recognized at receivable amounts if there are evidences that the Company
is eligible and anticipated to receive the fund according to the financial support policies. Otherwise, the subsidies are recognized
upon receipt.
Government subsidies as monetary assets are measured at received or receivable amounts. Those as non-monetary assets are
measured at fair value and nominal amount (RMB 1) as fair value cannot be achieved reliably. Such subsidies measured at nominal
amount are directly counted in current profit and loss.
The government grants pertinent to assets shall be recognized as deferred income, and it will be accounted to as the non-operating
income amortized by installment according to the service life of assets constructed or purchased.
(2). Accounting Method


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Proceeds related government subsidies are those government subsidies other than the assets related.
The government grants pertinent to assets shall be recognized as deferred income, and it will be accounted to as the non-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 income concerned, the book
balance of the deferred income shall be offset against, but the excessive part shall be included in the current profits and losses. If there
is no deferred income concerned to the government grant, it shall be directly included in the current profits and losses.
If it is necessary to refund any government grant which has been recognized, and there is the deferred income concerned, the book
balance of the deferred income shall be offset against, but the excessive part shall be included in the current profits and losses. If there
is no deferred income concerned to the government grant, it shall be directly included in the current profits and losses.




27. Deferred income tax assets/Deferred income tax liability

Deferred income tax assets and liabilities are calculated and recognized according to the differences (temporary differences) between
the taxation base of assets and liabilities and the book value. As at balance sheet dates, both are calculated at applicable tax rates
during the period it is anticipated to take the assets back or clear the liabilities.
  1. References for confirmation of deferred income tax assets
The Company recognizes the deferred tax income assets arising from deductible temporary differences to the limit of the deductible
losses and taxable income that it probably would achieve to reduce deductible temporary differences and carry forward. However, it
does not recognize those arising from the initial measurements of assets or liabilities in the following transactions.
(1)Transactions are not business merge;
(2)It neither affects the accounting profit nor taxable income or deductible losses while transactions being made.
For the deductible temporary differences related to the investments by associated enterprises, which meet the following conditions,
deferred tax assets should be recognized accordingly: the temporary differences are probable to revert in the foreseeable future and it
is very likely to achieve taxable income to deduct such differences.

   2.The confirmation basis of deferred income tax liabilities
The Company recognizes the payable but not paid yet taxable temporary differences of current or prior periods as deferred tax
liabilities, which exclude the following:
      (1) The temporary differences that are formed at initial measurement of goodwill;
      (2) Non-business merge transactions or events that neither affect accounting profits nor the temporary differences arising from
taxable income (or deductible losses);
      (3) The taxable temporary differences related to the investments by the subsidiaries and associated enterprises, which can revert
in a controllable timing but will not revert in the foreseeable future.


28.Operational 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 company shall deduct these
expenses from the total amount of rent, amortize in the lease term according to the rents after deducted 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

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     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 shall deduct these
expenses from the total amount of rent and amortize in the lease term according to the rents after deducted.


(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 the assets lease term.
(2)Finance leased assets: the company inception of the lease, the finance lease receivables, the difference between the present value
and the residual value of its unsecured recognized as unrealized financing income recognized in the respective period of future lease
rental income received, initial direct costs related to the transaction with the rental companies, and included in the initial
measurement of the finance lease receivable and reduce the amount of revenue recognized over the lease term.




29. Other significant accounting policies and estimates
      1. Discontinued operations
 The components that are disposed or held for sale and are separable while being operated and financial statements being compiled
are recognized as discontinued operation if they satisfy one of the following conditions:
       (1) Such components can represent an independent major business or a major operation region.
     (2) Such components are part of disposal plans for an independent major business or a major operation region.
     (3) Such components are just the subsidiaries to be obtained through re-sale.




30.Change of main accounting policies and estimations


(1)Change of main accounting policies
□Applicable √Not applicable


(2)Change of main accounting estimations

□Applicable √Not applicable


VI.Taxation

1.Main categories and rates of taxes



                   Taxes                                   Tax references                            Applicable tax rates
In case there exist any taxpayer paying corporate income tax at different tax rates, disclose the information

                        Name of taxpayer                                                     Income tax rates


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2.Tax preferences

3.Other

( 1).Enterprise income tax
The interest rate of corporate income tax of the company and subsidiaries in China mainland is 25%, the interest rate 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 the company 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 offsets the output tax with ratio of 17%. Of which, the input tax paid
for export products can be applied for refunds. The company’s VAT payable is the balance after offset between current period’s input
and output taxes.
The subsidiaries of the company in Hong Kong do not need to pay the VAT.
(3) Business tax
Business tax applied to revenues of the company and South China Dyeing and Printing Co., Ltd. from the housing
rental, rate being 5%. It’s unnecessary for the subsidiary in Hong Kong to pay the business tax.
  (4) Urban Construction Tax and Educational Surtax
The company’s urban construction tax and education surtax are based on payable VAT and business tax, tax rate
being 7% and 3%. Since January 1, 2011, 2% of VAT and business tax actually paid by taxpayer are as the local
education surtax. It’s unnecessary for the subsidiary in Hong Kong to pay the urban construction tax and the
education surtax.
  (5) Property Tax
The tax of property with own use for the company and its subsidiaries established in Mainland China is based on
70% of original value of the property, tax rate being 1.2%, and the tax of leased property is based on the rental
income, tax rate being 12%. It’s unnecessary for the subsidiary in Hong Kong to pay the property tax.
(6) Property tax
According to 70% of the original value of the property as the tax base, the tax rate is 1.2%, or the tax base for rental income, the tax r
ate is 12%.
  (7) Personal income tax
Employee personal income tax withheld by the Company.


         VII. Notes to the major items of consolidated financial statement

       1.Monetary Capital

                                                                                                                                 In RMB

                    Items                                  Year-end balance                           Year-beginning balance

Cash                                                                            72,597.00                                     52,545.00

Bank deposit                                                                63,537,099.00                                 72,889,183.00

Other monetary capital                                                         675,408.00                                    672,476.00

Total                                                                       64,285,104.00                                 73,614,204.00

Notes:


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Other monetary funds mainly are the capital that deposited in the securities company and used to purchase and draw the new bond.

As of June 30, 2015,
The Company has no pledged, no frozen, the potential risks to recover the money.
Among them the restricted cash details as follows:

                        Items                                 Year-end balance                Year-beginning balance

Cash deposit                                                            5,000,000                                     ---
                        Total                                           5,000,000                                     ---
2. Account receivable
    (1).Classification account receivables.

                                                                                                                                     In RMB

                                          Amount in year-end                                        Amount in year- begin

                              Book Balance       Bad debt provision                 Book Balance        Bad debt provision
        Type                                                           Book
                         Amount Proportio Amount Proportio                       Amount Proportio Amount Proportion( Book value
                                                                       value
                                        n(%)                 n(%)                            n(%)                    %)

Receivables with
major individual
amount and bad debt
provision provided
individually             3,974,16                3,974,16                        3,974,1               3,974,163
                                       31.61%               31.61%        0.00              31.61%                   31.61%            0.00
receivables with                3.00                 3.00                           63.00                    .00
major individual
amount and bad debt
provision provided
individually

Account receivable
with minor individual 8,598,70                   8,598,70                        8,598,7               8,598,702
                                       68.39%               68.39%        0.00              68.39%                   68.39%            0.00
amount but bad debt             2.00                 2.00                           02.00                    .00
provision is provided

                         12,572,8                12,572,8                        12,572,               12,572,86
Total                                  100.00%              100.00%       0.00              100.00%                 100.00%            0.00
                              65.00                 65.00                         865.00                    5.00

Receivable accounts with large amount individually and bad debt provisions were provided
√ Applicable □ not applicable


                                                                                                                                     In RMB

Receivable         accounts                                              Amount in year-end

(Unit)                        Receivable accounts         Bad debt provision               Proportion                     Reason

Hong Kong Victor
                                          1,858,488.00                1,858,488.00                     100.00% Aging long
Onward Co., Ltd.

Carnival                                  1,102,238.00                1,102,238.00                     100.00% Aging long


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IndexInternationalLtd

TAIYANGENTERPRISE
                                          1,013,437.00              1,013,437.00                   100.00% Aging long
CO.,LTD

Total                                     3,974,163.00              3,974,163.00            --                            --

Account reveivable on which bad debt proisions are provided on age basis in the group
□Applicable √Not applicable
Receivable accounts on which had debt provisions are provided on percentage analyze basis in a portfolio
□Applicable √Not applicable
Receivable accounts on which had debt provisions are provided by other ways in the portfolio


(2)Accrual period, recovery or reversal of bad debts situation


The current amount of provision for bad debts is RMB0.00; recovery or payback for bad debts Amount is RMB 0.00.
Where the current bad debts back or recover significant amounts:

                   Name                                  Back or withdraw money                        Recovery methods


(3)The current accounts receivable write-offs situation

                                                                                                                               In RMB

                                Items                                                     Amount written off

Account receivables actually written-off during the reporting period:
                                                                                                                               In RMB

                         Nature of account                           Reason for written       Verification       Arising from related
        Name                                   Amount written off
                            receivables                                     -off                 procedures       transactions (Y/N)

Explanation for write-off of account receivables:
N/A


(4)The ending balance of other receivables owed by the imputation of the top five parties


                 Name                         Amount in year-end         Proportion(%)           Bad debt provision
  Hong Kong Victor Onward Co., Ltd.                         1,858,488        14.78                            1,858,488
      CarnivalIndexInternationalLtd                         1,102,238        8.77                             1,102,238
  TAIYANGENTERPRISECO.,LTD.                                 1,013,437        8.06                             1,013,437
         FlyDragonInternational                               575,461        4.58                              575,461
         GratefulTextilesCo.,Ltd                              568,564        4.52                              568,564
                 Total                                      5,118,188        40.71                            5,118,188




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3.Prepayments

(1)Age analysis


                                                                                                                                         In RMB

                                               Year-end balance                                      Year-beginning balance
           Age
                                      Amount                   Proportion                        Amount                    Proportion

Within 1 year                               18,695.00                     100.00%                         4,922.00                      100.00%

Total                                       18,695.00               --                                    4,922.00               --

Notes :
(2) Prepayment situation of Top 5 ending balance by prepaid object imputation

                      Name                               Year-end balance                           Proportion(%)
The closing balance of the top five prepaymen                                    18,695                                 100.00
ts
Notes:


4. Interest receivable


(1)Interest receivable


                                                                                                                                         In RMB

                 Classification                            Year-end balance                                Year-beginning balance

Fixed deposit                                                                                                                         112,685.00

Total                                                                                     0.00                                        112,685.00


(2)Significat overdue interest


                                                                                                                     Whether the occurrence
           Name                   Year-end balance            Overdue time                       Reason               of impairment and its
                                                                                                                         judgment basis

Other Notes:


5.Other rceivables

(1)Disclosure of calassification of other receivables

                                                                                                                           In RMB


                                         Amount in year-end                                         Amount in year-begin
          Type
                            Book Balance       Bad debt provision        Bok        Book Balance           Bad debt provision         Bok value



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                          Amount Proportio Amount Amount                value       Amount Proportio Amount Proportion(
                                        n(%)                           Proportio               n(%)                  %)
                                                                         n(%)

Other receivables
with major individual
                          3,368,37                3,368,37                          3,368,3             3,368,370
amount and had debt                    74.66%                77.19%                           74.87%                 77.19%
                              0.00                    0.00                            70.00                   .00
provision provided
individually

Other receivables
provided bad debt         147,878.                                     147,878.0 135,178
                                        3.28%                                                   3.00%                             135,178.00
provision in cridit               00                                            0       .00
risk groups

Other account
receivable with
                          995,629.                995,629.                          995,629             995,629.0
minor individual                       22.07%                22.81%                           22.13%                 22.81%
                                  00                   00                               .00                    0
amount but bad debt
provision is provided

                          4,511,87                4,363,99             147,878.0 4,499,1                4,363,999
Total                                  100.00%               100.00%                          100.00%               100.00% 135,178.00
                              7.00                    9.00                      0     77.00                   .00

Other receivable accounts with large amount and were provided had debt provisions individually at end of period.
√ Applicable □ Not applicable
                                                                                                                                     In RMB

                                                                                End of term
Other receivable(Unit)
                                  Other receivable           Bad debt provision                Proportion                 Reason

Nanjing East Asia                         1,313,370.00                 1,313,370.00                     100.00% Aging long

CCB.Guangdong Shunde
                                          1,080,000.00                 1,080,000.00                     100.00% Aging long
Branch

Changzhou Dongfeng
Textile Printing & dyeing                      975,000.00                975,000.00                     100.00% Aging long
Equipment Co., Ltd.

Total                                     3,368,370.00                 3,368,370.00                --                        --

Other receivable accounts in Group on which bad debt provisions were provided on age analyze basis:
□Applicable √Not applicable
Other receivable account in Group on which bad debt provisions were provided on percentage basis:
□Applicable √Not applicable
Other Receivable accounts on which bad debt provisions are provided by other ways in the portfolio:
□Applicable √Not applicable
√Applicable □Not applicable
                   Name                                                      End of term



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                                              Other receivable            Bad debt provision      Proportion(%)
Deposit Group                                              147,878                ---                       ---
                  Total                                    147,878                ---                       ---


(2)Accrual period, recovery or reversal of bad debts situation


The current amount of provision for bad debts is RMB 0.00; recovery or payback for bad debts Amount is RMB 0.00.
Where the current bad debts back or recover significant amounts:
                                                                                                                              In RMB

                    Name                    Back or withdraw money                         Recovery methods

(3)Other receivables Nature of fund classification information
                                                                                                                              In RMB

                    Nature                                  End of term                                Beginning of term

Goods                                                                       4,363,999.00                                 4,363,999.00

Deposit                                                                       147,878.00                                   135,178.00

Total                                                                       4,511,877.00                                 4,499,177.00


(4)The ending balance of other receivables owed by the imputation of the top five parties


                                                                                                                              In RMB



                                                                                           Portion in total other Bad debt provision
        Name                   Nature         Year-end balance              Age
                                                                                           receivables(%)         of year-end balance

Nanjing East Asia Goods                             1,313,370.00 Over 3 years                           29.11%           1,313,370.00

CCB.Guangdong
                       Goods                        1,080,000.00 Over 3 years                           23.94%           1,080,000.00
Shunde Branch

Changzhou
Dongfeng Textile
                       Goods                          975,000.00 Over 3 years                           21.61%             975,000.00
Printing & dyeing
Equipment Co., Ltd.

HongKong Victor
                       Goods                          675,282.00 Over 3 years                           14.97%             675,282.00
Onward

Shanghai Huayinke
Trade Industry Co.,    Goods                          180,000.00 Over 3 years                            3.99%             180,000.00
Ltd.

Total                             --                4,223,652.00             --                         93.61%           4,223,652.00



  6. Disposable financial asset


(1)Sellable financial assets

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                                                                                                                                            In RMB



                                             Balance in year -end                                    Amount at year beginning
             Items                                 Provision for                                             Provision for
                               Book balance                             Book value       Book balance                             Book value
                                                   impairment                                                impairment

Available-for-sale equity
                                    584,707.00                            584,707.00         584,900.00                                  584,900.00
instruments

According to the fair value
                                    584,707.00                            584,707.00         584,900.00                                  584,900.00
measurement

Total                               584,707.00                            584,707.00         584,900.00                                  584,900.00

(2)Measured at fair value for the available-for-sale financial assets at the end period
                                                                                                                                            In RMB

                              Available-for-sale equity        Available-for-sale
Classification                                                                                                                    Total
                                     instruments              liabilities instruments

Equity instruments
cost/Amortized cost of                      299,300.00
debt instruments

Fair value                                  584,707.00

Changes in the fair value
of the amount that accum
                                            285,407.00
ulated in other comprehe
nsive income.


7.Long-term equity investment


                                                                                                                                            In RMB

                                                                Increase/decrease

                                                                Other
                Amount                                                                                                                    The end
                                                              comprehe                  Declarati Provision                  Amount
                   at       Added                                           Other                                                          balance
  Name                                                          nsive                   on of cash   for                     at period
             period-be investmen                                           changes                               Other                    impairme
                                                               income                   dividends impairme                     end
              ginning      t                                               in equity                                                         nt
                                                              adjustmen                 or profit       nt
                                                                   t

I. Joint venture

II.Affiliated

Zhejiang
Union
             75,816,61                           -50,168.0                                                     -12,855.0 75,753,59
Hangzhou
                     5.00                                 0                                                              0        2.00
Bay
Chuangye

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Co., Ltd.

              75,816,61                        -50,168.0                                       -12,855.0 75,753,59
Subtotal
                     5.00                               0                                             0      2.00

              75,816,61                        -50,168.0                                       -12,855.0 75,753,59
Total
                     5.00                               0                                             0      2.00



     Notes


     10.Investment real estate


(1)Measured by the cost of investment in real estate
√□ ApplicableNot applicable
                                                                                                                     In RMB

                                                                                 Construction in
             Items               House and building         Land use right                                   Total
                                                                                    progress

I.Book value

1. Balance at
                                       135,236,814.00                                                        135,236,814.00
period-beginning

2.Increase in the current
period

  (1) Purchase

( 2 ) Inventory\Fixed
assets\ Transferred from
 construction in progress

  (3)Increased of
Enterprise Combination



3.Decreased amount of
the period

     (1)Dispose

     (2)Other out



4. Balance at period-end               135,236,814.00                                                        135,236,814.00

II.Accumulated
amortization

     1.Opening balance                  93,282,495.00                                                         93,282,495.00

     2.Increased amount
                                         1,504,659.00                                                           1,504,659.00
 ofthe period



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  (1) Withdrawal                       1,504,659.00                                                      1,504,659.00



3.Decreased amount of
the period

       (1)Dispose

       (2)Other out



  4. Balance at
                                      94,787,154.00                                                     94,787,154.00
period-end

III. Impairment provision

1. Balance at
                                      16,010,926.00                                                     16,010,926.00
period-beginning

  2.Increased amount of
the period

       (1) Withdrawal



3.Decreased amount of
the period

       (1)Dispose

         (2)Other out



4. Balance at period-end              16,010,926.00                                                     16,010,926.00

IV.Book value

1.Book value at period
                                      24,438,734.00                                                     24,438,734.00
-end

  2.Book value at
                                      25,943,393.00                                                     25,943,393.00
period-beginning



  9. Fixed assets

(1)Fixed assets
                                                                                                                 In RMB

                                                  Machine          Electronic       Transpiration
          Items          House and building                                                              Total
                                                equipment          equipment         Equipment

I. Original price

       1.Opening
                                 162,490.00           321,521.00     6,365,613.00       3,625,186.00    10,474,810.00
balance



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      2.Increased
 amount ofthe
 period

(1) Purchase

(2)    Transferred fro

            m construc

            tion in pro

            gress

(3)Increased         of

Enterprise

Combination



  3. Decrease in the
current period

      (1)Disposal

Exchange rate
                             311.00       615.00        12,175.00          6,934.00         20,035.00
Change

4. Balance at
                          162,179.00   320,906.00    6,353,438.00       3,618,252.00     10,454,775.00
period-end

II.Accumulated
amortization

1. Balance at
                          114,322.00   289,437.00    3,707,805.00       3,016,242.00      7,127,806.00
period-beginning

2. Increase in the
current period

  (1) Withdrawal                                        54,893.00        107,014.00        161,907.00



3. Decrease in the
current period

(1)Disposal



  4. Balance at
                          114,322.00   289,437.00    3,762,698.00       3,123,256.00      7,289,713.00
period-end

III. Impairment
provision

1. Balance at                                        1,969,498.00         50,276.00       2,019,774.00


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period-beginning

  2.Increased
amount of the period

  (1) Withdrawal



  3. Decrease in the
current period

(1)Dispose



4. Balance at
                                                                          1,969,498.00             50,276.00          2,019,774.00
period-end

IV.Book value

1.Book value at
                                   47,857.21          31,469.03             621,241.59            444,720.17          1,145,288.00
period -end

2.Book value at
                                   48,168.00          32,084.00             688,310.00            558,668.00          1,327,230.00
period-beginning


(3)Fixed assets with un-completed property certificates


                                                                                                                              In RMB

                    Items                                   Book Value                                      Reason

House and building                                                         2,475,155.00 Historical issues

Notes
13. Intangible assets


(1) List of intangible assets


Items                       Land use right      Patent right       Non-patent right             Other                 Total


I. Original price

     1.Opening
                               12,356,137.00                                                      667,583.00         13,023,720.00
balance

     2.Increased
 amount ofthe
 period

(1) Purchase

(2)Internal

          Developm


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            ent

(3)Increased         of

Enterprise

Combination



3.Decreased amount
of the period

  (1)Disposal



4. Balance at
                          12,356,137.00                        667,583.00      13,023,720.00
period-end

II.Accumulated
amortization

1. Balance at
                          10,575,983.00                        440,423.00      11,016,406.00
period-beginning

2. Increase in the
                             20,153.00                                            20,153.00
current period

     (1) Withdrawal          20,153.00                                            20,153.00



3.Decreased amount
of the period

  (1)Disposal



  4. Balance at
                          10,596,136.00                        440,423.00      11,036,559.00
period-end

III. Impairment
                                                               227,160.00        227,160.00
provision

1. Balance at
                                                               227,160.00        227,160.00
period-beginning

2. Increase in the
current period

(1) Withdrawal



3.Decreased amount
of the period

(1)Disposal



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4. Balance at
                                                                                                     227,160.00            227,160.00
period-end

4. Book value

1.Book value at
                               1,760,001.00                                                                              1,760,001.00
period -end

  2.Book value at
                               1,780,154.00                                                                              1,780,154.00
period-beginning

Intangible assets through internal R & D accounting for the balance of intangible assets ratio of 0.00% at the end of the period.


13.Goodwill


(1)Original book value of goodwill


                                                                                                                                 In RMB

                        Amount at                                                                                       Amount at
Name                                       Increase in the current period         Decrease in the current period
                    period-beginning                                                                                    period-end

                                                                                                                         5,099,624.00

        Total            5,099,624.00                                                                                    5,099,624.00


(2)Goodwill impairment


                                                                                                                                 In RMB


                        Amount at                                                                                       Amount at
        Name                               Increase in the current period         Decrease in the current period
                    period-beginning                                                                                    period-end


Statement of basis for impairment testing and provision of goodwill:
Nanhua company has discontinued, maintain daily operations rely on rental housing, although the company has negative net assets, b
ut the it has large tracts of land and real estate company in Shenzhen city, the fair value is much higher than the book value, manage
ment believes that the investment goodwill impairment is not formed.
12. Deferred income tax assets and deferred income tax liability
(1)Deferred tax liabilities without offsetting
                                                                                                                                 In RMB



                                          Amount at period-end                                Amount at period-beginning
           Items                                         Deferred income tax                                   Deferred income tax
                             Temporary differences                                 Temporary differences
                                                               liability                                             liability

Revaluation of assets                   4,026,412.00                 664,139.00               4,026,412.00                 664,358.00

Total                                   4,026,412.00                 664,139.00               4,026,412.00                 664,358.00



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(2)Deductible losses of the un-recognized deferred income tax asset will expire in the following years
                                                                                                                               In RMB

               Year                    Amount at period-end          Amount at period-beginning                  Remarks

Details of taxable differences and deductible differences

The company is reorganized into the shares company after approved by People’s Bank of China. The increase value of assets
revaluation for its subsidiary of HongKong Victor Onward         Company can’t be accounted into the book value according to the
provisions of accounting rules. Also, it can’t be conducted pre-tax profits deducted, resulting in the difference between the fixed net
assets and tax basis.


The company has no unconfirmed deferred tax assets not recognized deductible temporary differences and tax losses on June
30, 2015.


13. Account payable
        (1)Account payable



                      Items                             Amount at period-end                      Amount at period-beginning

Payable amount for materials*                                               3,189,756.00                                 3,190,199.00

Total                                                                       3,189,756.00                                 3,190,199.00

(2)Accounts payable with the age over 1 year:
                                                                                                                               In RMB

                      Items                             Amount at period-end                                Reason

Notes:
*
Accounts payable aging more than one year, including a number of cooperative units, no single significant amount of accounts payab
le. Changes during the period was due to exchange rate movements.


14. Advance account
        1. Advance account

                                                                                                                               In RMB

                      Items                             Amount at period-end                      Amount at period-beginning

     Advance account                                                        1,029,656.00                                 1,029,656.00

Total                                                                       1,029,656.00                                 1,029,656.00

     15. Payable Employee wage
     (1)Payable Employee wage
                                                                                                                               In RMB



                                                                                                                Year-end balance
            Items             Year-beginning balance    Increase in the current   Decrease in the current



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                                                               period                      period
I. Short-term
                                        1,020,718.00              1,074,855.00                1,120,626.00              974,947.00
compensation

II.Post-employment bene
fits - defined contribution                                         127,926.00                  127,926.00
plans

Total                                   1,020,718.00              1,202,781.00                1,248,552.00              974,947.00


(2)Short-term compensation


                                                                                                                           In RMB


            Items             Year-beginning balance   Increase in the current     Decrease in the current
                                                                                                               Year-end balance

                                                               period                      period
1.Wages, bonuses,
                                          196,359.00              1,012,827.00                1,012,827.00              196,359.00
allowances and subsidies

2.Employee welfare                                                   32,073.00                   32,073.00

3. Social insurance
                                                                     29,955.00                   29,955.00
premiums

Inlduding :Medical
                                                                     26,824.00                   26,824.00
insurance

Work injury insurance                                                   1,403.00                    1,403.00

Maternity insurance                                                     1,615.00                    1,615.00

Supplementary
                                                                         114.00                      114.00
medicalinsurance

V.Union funds and staff
                                          451,964.00                                             45,771.00              406,193.00
education fee

Other short-term
                                          372,395.00                                                                    372,395.00
compensation

Total                                   1,020,718.00              1,074,855.00                1,120,626.00              974,947.00

(3)Defined        contribution plans listed
                                                                                                                           In RMB


            Items             Year-beginning balance   Increase in the current     Decrease in the current
                                                                                                               Year-end balance

                                                               period                      period

1. Basic old-age
                                                                     83,743.00                   83,743.00
insurance premiums

2.Unemployment                                                          3,710.00                    3,710.00


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insurance

3.Enterprise annuity
                                                              40,473.00                 40,473.00
payment

Total                                                        127,926.00                127,926.00

Notes:


18. Tax Payable
                                                                                                                      In RMB

                     Items                         At end of term                           At beginning of term

VAT                                                                  -137,711.00                               -137,711.00

Business Tax                                                         413,259.00                                    310,963.00

Enterprise Income tax                                               3,352,563.00                              3,352,563.00

Individual income tax                                                                                                1,560.00

City Construction tax                                                 18,615.00                                     11,454.00

House property Tax                                                   187,086.00                                    187,086.00

Educational surtax                                                    13,295.00                                      8,181.00

Land use tax                                                         144,956.00                                    144,956.00

Stamp Tax                                                            229,250.00                                    229,250.00

Total                                                               4,221,313.00                              4,108,302.00

Notes:


17.Dividend payable


                                                                                                                      In RMB

                     Name                          At end of term                           At beginning of term

Other                                                               1,215,946.00                              1,215,946.00

Total                                                               1,215,946.00                              1,215,946.00

Notes:




                                                                                       Reason of overdue for one
                      Name                  At end of term      At beginning of term
                                                                                                 year

State Development & Investment Co., Ltd*2             243,189               243,189                 *1

CITIC Group*2                                         243,189               243,189

Shenzhen Nanyou (Group) Company*2                     121,595               121,595

Shenye Union(Hongkong)Co., Ltd.                     121,595               121,595

HongKong Victor Onward                                486,378               486,378



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                     Total                                  1,215,946              1,215,946

Notes
*1 The above payable dividends were the payable dividends of Nanhua Company, a subsidiary of the company, Because Nanhuan
Company’s capital was more tension and the shareholders did not ask for the fund, the payable dividends have not been paid.

*2 The above three companies are the former shareholders of Nanhuan Company.
18. Other payable

     (1)Other payable

                                                                                                                             In RMB

                    Items                                 Year-end balance                         Year-Beginning balance

Deposit                                                                      5,000,000.00                              15,000,000.00

Lease deposit                                                                2,215,285.00                               2,105,285.00

Non financial institutions borrowing                                         3,000,000.00                               3,000,000.00

Loan and Interest                                                            9,811,846.00                               9,811,846.00

Other                                                                        1,849,335.00                               1,573,961.00

Total                                                                    21,876,466.00                                 31,491,092.00

(2)Explanation on other account payable with over one year age
                                                                                                                             In RMB

                    Items                                 Year-end balance                                    Reason

Union Development Group                                                      9,111,111.00 Loan and Interest

State Development & Investment Co., Ltd                                      3,000,000.00 Non financial institutions borrowing

Jinrongyuan Company                                                          1,100,000.00 Lease deposit

Shenzhen Union Property Group Co., Ltd.                                       700,734.00 Loan and Interest

Total                                                                    13,911,845.00                          --

Notes


19.Other current liabilities


                                                                                                                             In RMB

                    Items                                 Year-end balance                         Year-Beginning balance

Accrued expenses-Land use expenses                                              88,000.00                                  88,000.00

Accrued expenses-sewage charge                                                  62,600.00                                  62,600.00

Accrued expenses-Audit expenses                                               914,888.78                                1,727,389.00

Accrued expenses-Securities
                                                                                 3,760.22                                191,260.00
administration

Total                                                                        1,069,249.00                               2,069,249.00

The Increase and decrease of short-term bonds payable:
                                                                                                                             In RMB

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                                                                                Accrued i Premium
                                                                                                             The
                                                         Year-Begi Issue this nterest at        and
                         Issuing     Bond      Issuing                                                    period for             Year-end
  Name         Value                                       nning    period      par value    discount
                             date   period     amount                                                     repaymen               balance
                                                          balance               amount       amortiatio
                                                                                                              t
                                                                                                 n

Notes :


22. Long-term borrowings



(1)Long-term borrowings classifications
                                                                                                                                  In RMB

                     Items                                 Year-end balance                             Year-Beginning balance

Loan by pledge                                                                 947,942.00                                  1,009,719.00

Total                                                                          947,942.00                                  1,009,719.00

Statement on long-term borrowings.
The borrowing was the installment payment for the bousing in Hongkong bought by the subsidiary of the Company Xingye
Company , the mortgage article was the house purchased. The installment payment was HKD 2, 366,000, Which paid in 240 month,
from March, 2004. Mortgage rates fall 2.65 percent compared to HK mortgage bank prime rate. On June 30, 2015, the principal
amount of HKD 1,202,041.69 (equivalent to RMB 947,041,69 Yuan) was unpaid.
Notes ,including interest rate interval:


23.Long-term payable

(1)Long-term payable

                                                                                                                                  In RMB

                    Name                                   Balance year-end                             Year-beginning balance

Assess the value of assets                                                    8,255,609.00                                 8,258,331.00

Statement on long-term payables:
        When the Company was reorganized into a joint stock company, it obtained the special approval of People's Bank of China for
vesting the appraisal increment from the revaluation of the assets of Hong Kong Victor Onward in the original shareholders of the
Company before reorganization. Such assets were appraised on January 31, 1992. increment of around HKD 14,754,000 was
generated from the assets appraisal and entered the long-term account payable. Part of it has been used to set off the bad debts of
around HKD 4,285,000 incurred before listing. The original shareholders of the Company before the reorganization agreed not to
require reimbursement of such increment in cash. It will be used to set off the price at which they will subscribe for shares of the
Company in the future.


24.Deferred income

                                                                                                                                  In RMB


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         Items              Year-beginning           Increase in the             Decrease in the
                                                                                                     Year-end balance              Reason

                                  balance            current period              current period
Government subsidy                     836,792.00                                                             836,792.00 See table below

Total                                  836,792.00                                                             836,792.00                 --

Liabilities related to government grants
                                                                                                                                                In RMB

                                                                  The
                     Balance      at    the New          grants
                                                                  non-operating                            Balance     at   the Income related to
    Liabilities      beginning           of amount   of this                             Other changes
                                                                  revenue    amount                        end of period        assets
                     period                 period
                                                                  of this period

ERP Information
                              228,216.00                                                                         228,216.00 Related to assets
construction

Technology
                              608,576.00                                                                         608,576.00 Related to assets
subsidies

Total                         836,792.00                                                                         836,792.00                --

Notes :
*These payments the Company received in 2004 from Shenzhen Municipal Bureau of Finance allocated for jet printing projects of sp
ecial subsidies and special subsidies for the construction of enterprise information, in order to carry out the accounting treatment in a
ccordance with the results because of the need finance bureau acceptance acceptance, As the project has not been temporarily suspen
ded acceptance of it.


     23. Stock capital

                                                                                                                                                In RMB

                                                                  Increase/decrease this time (+ , - )
                        Balance                                                                                                          Balance
                                        Issuing of new                        Transferred
                    Year-beginning                        Bonus shares                             Other             Subtotal            year-end
                                            share                            from reserves

Total of capital
                    169,142,356.00                                                                                                169,142,356.00
shares

Notes :


  24. Capital reserves

                                                                                                                                                In RMB


            Items              Year-beginning balance        Increase in the current        Decrease in the current         Year-end balance

                                                                        period                      period
Share premium                               29,718,829.00                                                                          29,718,829.00

Other                                        9,672,821.00                                                                            9,672,821.00


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Total                                     39,391,650.00                                                                        39,391,650.00

Statement on capital reserves:


25.Other comprehensive income


                                                                                                                                       In RMB

                                                                                 Amount of current period

                                                                        Less          :
                                                                        Previously rec
                                                          Amount for                                   After - tax a After - tax a
                                           Year-beginni                                                                              Year-end
                    Items                                               ognized in pro
                                                          the period                         Less:    ttributable t ttributable t
                                            ng balance                                                                               balance
                                                                        fit or loss in ot
                                                          before inco                       Income tax o the parent o minority s
                                                                        her comprehen
                                                          me tax                                        company       hareholders
                                                                        sive income


1.Other comprehensive income that
will not be reclassified subsequently                                                                          0.00
to profit or loss

Indluding:Change as a result of
remeasurement of the net defined                                                                               0.00
benefit plan liability or asset

Share of other comprehensive income
of the investee underthe equity
                                                                                                               0.00
method that will not be reclassified to
profit or loss

II. Other Comprehensive income that
                                                                                                                                     -168,058.
will be reclassified subsequently to        -203,899.00     35,841.00                                     35,841.00
                                                                                                                                           00
profit or loss

Indluding:Share of other
comprehensive income of the
                                                                                                               0.00
investee under the equity method that
w8ill be reclassified to profit or loss

Gains or losses on changes in fair
                                                                                                                                     427,425.0
value of available-for-sale financial        427,425.00                                                        0.00
                                                                                                                                               0
assets

Gains or losses on reclassification of
held-to-maturityinvestments to                                                                                 0.00
available-for –sale financial assets

Effective portion of gains or losses on
                                                                                                               0.00
cash flow hedges

Translation differences of financial                                                                                                 -595,483.
                                            -631,324.00     35,841.00                                     35,841.00
                                                                                                                                           00


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statements denominated in foreign

currencies

                                                                                                                              -168,058.
Total of other comprehensive income         -203,899.00    35,841.00                                  35,841.00        0.00
                                                                                                                                      00

Notes:


28. Surplus reserve


                                                                                                                               In RMB


            Items           Year-beginning balance        Increase in the current    Decrease in the current      Year-end balance

                                                                  period                     period
Statutory surplus reserve                 26,704,791.00                                                                 26,704,791.00

Total                                     26,704,791.00                                                                 26,704,791.00

Statement on surplus reserves. Please state the related resolutions of the Board on capitalizing of reserves, making up losses, and
dividends:


27. Retained profits


                                                                                                                               In RMB

                       Items
                                                      Amount of current period                        Amount of previous period
Before adjustments: Retained profits in last period
                                                                              -103,768,226.00                         -108,059,131.00
end

After adjustments: Retained profits at the period
                                                                              -103,768,226.00                         -108,059,131.00
beginning

Add:Net profit belonging to the owner of the
                                                                                    -608,576.00                            738,330.00
parent company

Retained profit at the end of this term                                       -104,376,802.00                         -107,320,801.00


As regards the details of adjusted the beginning undistributed profits

(1)As the retroactive adjustment on Enterprise Accounting Standards and its related new regulations, the affected beginning

undistributed profits are RMB 0.00.


(2) As the change of the accounting policy, the affected beginning undistributed profits are RMB 0.00.


(3) As the correction of significant accounting error, the affected beginning undistributed profits are RMB 0.00 .


(4) As the change of consolidation scope caused by the same control, the affected beginning undistributed profits are RMB 0.00.



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(5) Other adjustment of the total affected beginning undistributed profits are RMB 0.00 .


     28. Business income and Business cost

                                                                                                                                      In RMB


           Items               Amount of current period                                             Amount of previous period
                                       Income                     Cost                           Income                     Cost

Main business                             5,569,686.00                 1,922,683.00                 5,077,451.00              1,446,029.00

Total                                     5,569,686.00                 1,922,683.00                 5,077,451.00              1,446,029.00

        29. Business tax and subjoin
                                                                                                                                      In RMB

                     Items
                                                Amount of current period                                  Amount of previous period

Business tax                                                                    275,346.00                                      228,697.00

Urban construction tax                                                           19,274.00                                         16,008.00

Education surcharge                                                                   8,260.00                                       6,861.00

Local Education surcharge                                                             5,507.00                                       4,574.00

Total                                                                           308,387.00                                      256,140.00

Notes:

          30. Investment income
                                                                                                                                      In RMB

                       Items
                                                           Amount of current period                        Amount of previous period
Long-term equity investment equity method of
                                                                                       -50,168.00                               857,157.00
accounting

Total                                                                                  -50,168.00                               857,157.00

Notes:
     31. Non-Operation expenses

                                                                                                                                      In RMB

                                                                                                              The amount of non-operating
               Items
                                     Amount of current period            Amount of previous period                  gains & lossed

Total Disposal of loss of
                                                                0.00                              1,918.00
non-current assets

Including: Disposal of net loss
                                                                                                  1,918.00
of fixed assets

Total                                                           0.00                              1,918.00

Notes:


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32.Other Comparehensive income

See Notes VII.25.


  33. Supplement Information for cash flow statement


(1)Supplement Information for cash flow statement
                                                                                                                          In RMB


             Supplement Information            Amount of current period                       Amount of previous period

I. Adjusting net profit to cash flow from
                                                                 --                                      --
operating activities

     Net profit                                                              -608,576.00                            738,330.00

Depreciation of fixed assets, oil and gas
                                                                            1,666,566.00                            132,060.00
assets and consumable biological assets

Amortization of intangible assets                                             20,153.00                              20,153.00

Loss on disposal of fixed assets, intangible
                                                                                                                      1,918.00
assets and other long-term deferred assets

Financial cost                                                               -193,363.00                            -58,719.00

Loss on investment                                                            50,168.00                            -857,157.00

Decease of operating receivables                                              86,212.00                           1,848,263.00

Increased of operating Payable                                               -109,302.00                            883,366.00

Net cash flows arising from operating
                                                                             911,858.00                           2,708,214.00
activities

II. Significant investment and financing
                                                                 --                                      --
activities that without cash flows:

III. Net increase and decreased of cash and
                                                                 --                                      --
cash equivalents

Ending balance of cash                                                     59,285,104.00                         60,249,062.00

Less: Beginning balance of cash                                            58,614,204.00                         63,502,910.00

Net increase of cash and cash equivalents                                    670,900.00                          -3,253,848.00


(2)Composition of cash and cash equivalents


                                                                                                                          In RMB


                       Items                          Amount of current period                Amount of previous period


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                                                                             59,285,104.00                                 58,614,204.00
I. Cash

                                                                                 72,597.00                                     52,545.00
Of which: Cash in stock
Bank savings could be used at any time                                       58,537,099.00                                  5,889,184.00

Other monetary capital could be used at any
                                                                                675,408.00                                    672,476.00
time

III. Balance of cash and cash equivalents at
                                                                             59,285,104.00                                 58,614,204.00
the period end

Notes:
VIII. Changes in the consolidation scope
1. Other causes of changes in consolidation scope
Description of consolidation scope changes and other causes (eg, the new subsidiary, the subsidiary liquidation, etc.) and related cond
itions:
December 12, 2014, Shengzhong Company completed the deregistration procedures at the Hong Kong Companies Registry, disbande
d. no longer included in the scope of consolidation at ending
Shengzhong company was founded in November 9, 1993, the registered capital of HKD 1 million, Victor Onward
Textile(HK)Co.,Ltd. holds 100% stake. Nature of business for trade, business scope is the sale of corduroy, fabric and color prints.


IX.Interests in other entities
1. Interest in the subsidiaries
(1)Consitutation of enterprise group

                     Principal place ofof      Registered        Nature                  Shareholding ratio
          Name                                                   Nature                                                      Mode
                          business              address                              Direct              indirect

Victor Onward
Textile(HK)Co., Hongkong                    Hongkong        Trade                        100.00%                       Establish
Ltd.

Nanhua Company Shenzhen                     Shenzhen        Production                    54.82%               14.62% Purchase

Xingye Company Hongkong                     Hongkong        Trade                        100.00%              100.00% Establish

Shenzhen East
                     Shenzhen               Shenzhen        Trade                         51.00%                       Establish
Asia Company

Notes:
Holding half or less of the voting but still control, and holds more than half of the voting rights, but does not control the investee basi
s of:
For consolidated important structured body, control based on:
The company is an agent or principal is determined based on::
Notes:
2.Interests in joint ventures arrangement or associates
(1) Significant joint ventures or associates




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                      Principal place of        Registered                                 Shareholding ratio                Processing
        Name                                                        Nature
                           business              address                                Direct               indirect        method

Zhejiang Union
 Hangzhou bay                                                 Real estate
                      Hangzhou             Hangzhou                                          25.00%                          Equity Method
 Chuangye Co.,                                                development
 Ltd.

The description of Joint ventures or associates is different from the proportion of voting rights of the shares :Holds 20% less of the v
oting rights but has significant influence, or holds 20% or more of the voting rights but does not have a significant impact on the basi
s of:
(2)Key Financial Information of Important associates
                                                                                                                                         In RMB

                                                    Balance at year end/ Amount in current       Balance at year beginning/ Amount in last
                                                                    period                                          period



Notes
X. Disclosure of the fair value
1. Ending fair value of assets and liabilities
                                                                                                                                         In RMB

                                                                              End fair value
             Items             The first level measured        The second level       The third level measured
                                                                                                                              Total a
                               at fair value                 measured at fair value          at fair value

I. Sustained fair value
                                           --                          --                          --                            --
measurement

(1)Available for sale
                                                584,707.00                                                                            584,707.00
financial assets

(2)Equity instrument
                                                584,707.00                                                                            584,707.00
investment

II.Non-continuous
                                           --                          --                          --                            --
measurement fair value


2.Sustained and non-sustained first-level fair value measurement project price determinations is to acquire identical assets on
measurement date or the unadjusted quoted of liabilities in active markets.


3.Sustained and non-sustained second-level fair value measurement project, adopted valuation techniques and significant parameters
qualitative and quantitative information can be the directly or indirectly observable of related assets or liabilities except first-level
observables.
        The second level of the input values include: 1) similar assets or liabilities quotation in active market; 2)similar assets or
liabilities quotation in inactive market; 3) other observable inputs except the quotation, including interest rates can be observed, yield
curve, implied volatility and credit spreads, etc. during normal interval of quotation; 4) the market value and other input validation.




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4.Sustained and non-sustained third-level fair value measurement project, adopted valuation techniques and significant parameters
qualitative and quantitative information can be the unobservable inputs of related assets or liabilities.


XI. Related parties and related-party transactions
1. Parent company information of the enterprise
                                                                                                The parent company The parent company

          Name             Registered address          Nature             Regis rated capital    of the Company's      of the Company’s
                                                                                                 shareholding ratio        vote ratio

                                                Import & export
                                                business “processing
Union Development
                       Shenzhen                 with materials” and     9,060.6                              4.13%                  4.13%
 Group
                                                processing with
                                                imported materials

                                                Production
Union                                           and sale ofclothing
                       Shenzhen                                          112,388.7712                        25.51%                  25.51%
Holdings                                        and textiles, and real
                                                estate Developin

Notes:
The enterprise is the ultimate controlling party is Union Development Group Co., Ltd.
Notes:
2.Particulars of the subsidiaries

see Note IX ,1 for details of this enterprise nine subsidiaries,1. in subsidiary rights.


  3. Other Related parties information of the enterprise



                    Other Related parties name                                  Relation of other Related parties with the company
Shenye Union(HK)Co., Ltd.                                              The related parties controlled the same Actual controller

Shenzhen Union Property Group Co., Ltd.                                  The related parties controlled the same Actual controller

Notes


4. Related transactions.


(1)Related leasing


The Company is the lender
                                                                                                                                     In RMB

         Name of the owner             Category of asset for rent        Rental recognized in the period Rental recognized in last period




The Company is the undertaker


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                                                                                                                                  In RMB



Name of the owner                    Category of asset for rent        Rental recognized in the period Rental recognized in last period

Union Development Group                        Real estate                                      41,760.00                     41,760.00

Notes
5. Payables and receivables of the related party

(1)Receivables
                                                                                                                                  In RMB

                                                              Amount at year end                       Amount at year beginning
        Name               Related party
                                                 Balance of Book        Bad debt Provision       Balance of Book     Bad debt Provision

                      Shenye Union(HK)
Account receivable                                       300,359.00                300,359.00           300,359.00           300,359.00
                      Co., Ltd.

(2)Payables
                                                                                                                                  In RMB

             Name                             Related party                  Amount at year end             Amount at year beginning

                                  Union Development Group
Other payable                                                                              9,111,111.69                     9,111,111.69
                                   Co.,Ltd.

                                  Shenzhen Union Property
Other payable                                                                                700,734.00                      700,734.00
                                  Group Co., Ltd.


XII.Commitment events and subsequent events

1.Importance commitment events

Important commitments of existence of balance sheet date
    As of June 30, 2015,The Company has no need to be disclosed commitment events



XIII. Post-balance-sheet events

1. Other explanation after balance sheet date.

As of the reporting date, the major balance sheet of the company in the future without the need to disclose non-adj
usting events.




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XIV.Other important events

1.Other

 (1)On July 14, 2014, Shenzhen Dapeng new city government online (http//www.dpxq.gov.cn) published the
"Shenzhen Dapeng district management committee decisions on house expropriation notice", said: the need to
build Dapeng District People's Hospital, decided to levy a property related to the new community of sunflower.
The property contains the part of the company's buildings; a building area of about 18000 square meters, by the
end of December 31, 2014, the book value was RMB 2,475,155. The matter remains to be approved by the board
of directors of the company.

    ( 2) On June 3, 2015, the company received the notice from China Securities Regulatory
Commission(hereinafter referred to CSRC), which was audited by No.45 working conference of 2015 convened
by The Merger And Reorganization Audit Committee for Listed Companies of CRSC. The significant asset
replacement and issue of shares to buy asset and the related transaction and raising matching funds of the
company have conditionally passed the audits.
    (3) November 13, 2014, the Company's subsidiary, Shenzhen East Asia Company applied for cancellation to
the Shenzhen Market Supervisory Authority. According to [2014] No. 6683432, "Record Notice" issued by
Shenzhen Market Supervisory Authority. Shenzhen Market Supervisory Authority has put on record of the
liquidation group of Shenzhen East Asia Company on November 13, 2014. As of the financial reporting date,
Shenzhen East Asia Company cancellation procedures have not yet been completed.



  XV.Notes s of main items in financial reports of parent company


     1.Account receivable


(1)Account receivable
                                                                                                                                 In RMB

                                          Year-end balance                                     Year-beginning balance

                         Book Balance          Provision for bad               Book Balance         Provision for bad debts
          Type                                      debts             Book
                                                                                                                              Book value
                                   Proportio              Proportio   value             Proportio                Proportion
                        Amount       n%        Amount        n%               Amount      n%         Amount          %

Account receivable
with significant
specific amount that    2,115,67               2,115,67                       2,115,6               2,115,676
                                    20.92%                 20.92%                        20.92%                     20.92%
were provisioned had        6.00                   6.00                        76.00                       .00
debt preparation
separately

Account receivable
                        7,995,98               7,995,98                       7,995,9               7,995,985
with minor individual               79.08%                 79.08%                        79.08%                     79.08%
                            5.00                   5.00                        85.00                       .00
amount but bad debt

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provision is provided

                        10,111,66               10,111,6                        10,111,               10,111,66
Total                                 100.00%              100.00%                        100.00%                   100.00%
                               1.00               61.00                         661.00                     1.00

Receivable accounts with large amount individually and bad debt provisions were provided
√Applicable □ Not applicable


                                                                                                                                    In RMB

Receivable          accounts                                             Year-end balance

(Unit )                       Receivable accounts        Bad debt provision              Proportion                      Reason

Carnival Index
                                          1,102,238.00               1,102,238.00                     100.00% Age long
International Ltd

TAI YANG
                                          1,013,438.00               1,013,438.00                     100.00% Age long
ENTERPRISE CO.,LTD.

Total                                     2,115,676.00               2,115,676.00                --                           --

Using age methods to provision for bad debts of account receivable in group:
□Applicable √not Applicable
Using percentage balance method of provision for bad debts of account receivable in group:
□Applicable √not Applicable
Using other methods to provision for bad debts of account receivable in group:
(2)Important accounts receivable write-offs situation
The current amount of provision for bad debts is RMB 0.00; recovery or payback for bad debts Amount is RMB 0.00.
Where the current bad debts back or recover significant amounts:
                                                                                                                                    In RMB

                      Name                                         Amount                                          Way



(3)The ending balance of receivables owed by the imputation of the top five parties

                    Name                        Year-end balance          Proportion(%)          Provision for bad debts
Carnival Index International Ltd                             1,102,238                10.90                       1,102,238
TAI YANG ENTERPRISE                                          1,013,438                10.02                       1,013,438
CO.,LTD.
Fly Dragon International                                      575,461                     5.69                     575,461
Grateful Textiles Co.,Ltd                                     568,564                     5.62                     568,564
Shenzhen Fangzhou Textile Co.,Ltd.                            468,502                     4.63                     468,502
                    Total                                    3,728,203                36.87                       3,728,203




    2.Other receivable


(1)Other receivable

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                                                                                                                                              In RMB

                                           Year-end balance                                               Year-beginning

                                                Provision for bad
                            Book balance                                              Book balance        Provision for bad debts
         Type                                         debts             Book
                                                                                                                                          Book value
                                    Proportio              Proportio    value                 Proportio                 Proportion(
                  &nbs